G.R. No. 238859 . October 19, 2022
ELBA J. CABALLERO, PETITIONER, VS. VIKINGS COMMISSARY, AND/OR JACKSON GO, AND HARDWORKERS MANPOWER SERVICES, INC., AND/OR AIME BOLONGAITA, RESPONDENTS.

FACTS

Petitioner Elba J. Caballero applied for work at Vikings Commissary, was interviewed by its HR staff, and began working as a packer on January 15, 2015. She was subsequently informed that Vikings was not directly hiring and was made to sign an employment contract with Hardworkers Manpower Services, Inc., a manpower agency. Her initial three-month contract was repeatedly renewed, and she was reassigned as a dim sum maker, a role necessary to Vikings’ restaurant business. Vikings supervised her work, dictated procedures, and recommended employee dismissals. On April 5, 2016, a Vikings chef informed Caballero her services were terminated, and she was ordered to leave the premises. She thereafter filed a complaint for illegal dismissal against both Vikings and Hardworkers.
Hardworkers claimed to be a legitimate contractor, presenting a Department of Labor and Employment certificate of registration, and asserted that Caballero was its fixed-term employee assigned to Vikings. It alleged her dismissal was due to a work infraction and that she abandoned her assignment by not reporting back to its office. Vikings failed to participate in the proceedings. The Labor Arbiter and the National Labor Relations Commission dismissed the complaint, ruling Caballero was Hardworkers’ project employee and was not illegally dismissed. The Court of Appeals affirmed this decision.

ISSUE

Whether a labor-only contracting arrangement exists, making Vikings the true employer liable for Caballero’s illegal dismissal.

RULING

Yes. The Supreme Court reversed the Court of Appeals and declared Caballero a regular employee of Vikings. A contractor’s certificate of registration is not conclusive proof of legitimate job contracting. The totality of circumstances must be examined. The Court found Hardworkers was engaged in labor-only contracting, a prohibited arrangement, as it did not have substantial capital or investment, and the work performed by Caballero as a dim sum maker was directly related to, and necessary in, the principal business of Vikings, a restaurant. Furthermore, Vikings exercised control over Caballero’s performance. As a labor-only contractor, Hardworkers is deemed merely an agent, and Vikings is considered the direct employer.
An employee who is repeatedly rehired by the same principal to perform tasks necessary to its business for at least one year attains the status of a regular employee. Caballero’s successive contract renewals from January 2015 to April 2016 for the same necessary work made her a regular employee of Vikings. Her dismissal, effected summarily by Vikings without due process, was illegal. Consequently, Vikings and Hardworkers are held jointly and severally liable for her full backwages, separation pay in lieu of reinstatement, and other monetary claims. The case was remanded to the Labor Arbiter for computation of exact monetary awards.