Case Summary (G.R. No. 211015)
Relevant Facts
The respondent is the certified bargaining representative for the regular employees of CEPALCO, which provides electricity distribution in Cagayan de Oro and nearby municipalities. CEPALCO entered into a contract with CESCO for meter-reading activities on February 19, 2007, leading to the dismissal and reassignment of several regular employees, prompting the respondent to file a complaint against the petitioners for ULP. The primary allegations include the claim that contracting with CESCO was intended to evade responsibilities under the Collective Bargaining Agreement (CBA) and violate labor laws.
Initial Legal Proceedings
The Labor Arbiter dismissed the first complaint (NLRC Case No. RAB-10-07-00408-2007) asserting that CESCO was an independent contractor and that CEPALCO had not committed ULP. This dismissal was upheld by the National Labor Relations Commission (NLRC) on appeal. In subsequent proceedings, another contract for warehousing services led to similar complaints by the respondent, which were again dismissed under res judicata principles.
Court of Appeals Decisions
The Court of Appeals reversed the findings of the NLRC in the first case, determining that CESCO engaged in labor-only contracting based on evidence showing CEPALCO exercised control over CESCO workers and pointing to CESCO's insufficient capitalization. The CA also absolved CEPALCO of ULP allegations due to lack of malice or bad faith. A similar conclusion was reached in the subsequent case, reinforcing the finding that CESCO was a labor-only contractor.
Issues on Appeal
In the petitions for review, the petitioners challenge the CA's classification of CESCO as a labor-only contractor, arguing that the issue was non-justiciable following the determination of no ULP. They assert that the respondent lacks standing to complain about the employment status of CESCO employees as it does not represent them.
Court's Ruling
The Supreme Court predominantly agreed with the CA's determination that CESCO was engaged in labor-only contracting. The Court emphasized the lack of evidence regarding substantial investment by CESCO and its lack of control over work performed, aspects crucial to defining labor-only contracting under Article 106 and Department Order No. 18-02 of the Labor Code.
However, the Court upheld the CA's finding that there was no ULP due to inadequate evidence linking CEPALCO's contractin
...continue readingCase Syllabus (G.R. No. 211015)
Introduction
- The case involves two petitions for review on certiorari filed by petitioners Cagayan Electric Power & Light Company, Inc. (CEPALCO) and CEPALCO Energy Services Corporation (CESCO) against the decisions of the Court of Appeals (CA).
- The petitions challenge the CA's findings regarding unfair labor practices and the status of employees hired by CESCO.
Background
- CEPALCO is a domestic corporation engaged in electric distribution, while CESCO is a business entity involved in trading and services.
- On February 19, 2007, CEPALCO and CESCO entered into a Contract for Meter Reading Work wherein CESCO was tasked to perform CEPALCO's meter-reading activities.
- The engagement led to the reassignment and replacement of several CEPALCO employees, prompting the CEPALCO Employee's Labor Union to file unfair labor practice (ULP) complaints against the petitioners.
Labor Union’s Allegations
- The union claimed that the contracting out of services was a strategy by CEPALCO to evade its responsibilities under the Collective Bargaining Agreement (CBA).
- They argued that this action constituted labor-only contracting, thereby making the workers of CESCO regular employees of CEPALCO.
Petitioners' Defense
- Petitioners contended that CESCO is an independent contractor and that the contracting out of services di