G.R. No. 211015 - Cagayan Electric Power and Light Co., Inc. vs. CEPALCO Employee's Labor Union-Associated Labor Unions

The petitions for review on certiorari were filed by Cagayan Electric Power & Light Company, Inc. (CEPALCO) and CEPALCO Energy Services Corporation (CESCO) against the CEPALCO Employee's Labor Union-Associated Labor Unions-Trade Union Congress of the Philippines (TUCP).
The Court of Appeals (CA) had previously absolved the petitioners from charges of Unfair Labor Practice (ULP) but declared CESCO as engaged in labor-only contracting, making its employees regular employees of CEPALCO.
The petitions challenge the CA's findings regarding CESCO's status as a labor-only contractor.

CEPALCO is a domestic corporation engaged in electric distribution, while CESCO is involved in trading and services.
On February 19, 2007, CEPALCO contracted CESCO for meter-reading services, leading to the replacement of several CEPALCO employees with CESCO workers.
The respondent filed a complaint for ULP, alleging that CEPALCO's actions were intended to evade responsibilities under the Collective Bargaining Agreement (CBA) and labor laws.

The Labor Arbiter dismissed the ULP complaint, finding that CESCO was an independent contractor with substantial evidence supporting its business operations.
The National Labor Relations Commission (NLRC) affirmed this ruling, stating that the evidence did not establish ULP.
Respondent's subsequent complaints regarding warehousing services were similarly dismissed based on the principle of res judicata.

In CA-G.R. SP No. 03169-MIN, the CA found CESCO engaged in labor-only contracting, citing lack of control over workers and insufficient capitalization.
The CA ruled that CESCO's workers were regular employees of CEPALCO but found no substantial evidence of ULP.
In CA-G.R. SP No. 04296-MIN, the CA reiterated that CESCO was a labor-only contractor and that CEPALCO was responsible for CESCO's workers, again finding no ULP.

Petitioners contended that the CA erred in declaring CESCO a labor-only contractor despite being absolved of ULP charges.
They argued that the issue of CESCO's status was moot due to the finality of the ULP ruling and that the respondent lacked standing to challenge CESCO's employee status.

The Court agreed with the CA's finding that CESCO was engaged in labor-only contracting based on the criteria set forth in the Labor Code and relevant Department Orders.
The Court noted that CESCO failed to demonstrate substantial capital or control over the work performed, which are essential elements to establish independent contractor status.

The Court concurred with the CA that there was no evidence of ULP, as the respondent did not prove that CEPALCO's contracting arrangements interfered with employees' rights to self-organization.
The complaints filed by the respondent were dismissed with finality, as they did not establish a violation of workers' rights.

The Court clarified that the respondent lacked legal standing to seek relief regarding the status of CESCO's employees, as it did not demonstrate a direct injury or benefit from the outcome.
The employees of CESCO, not the respondent, would be the proper parties to seek any relief related to their employment status.

The Court partly granted the petitions, deleting the portions of the CA's decisions that declared CESCO's workers as regular employees of CEPALCO.
The rest o...continue reading