G.R. No. 235534 , January 23, 2023
Edward R. Añonuevo, Petitioner, vs. CBK Power Company, Ltd. (CBK), Hiroshi Tanimura (Chief Administrative Officer-CBK), Servillano Dunglao (VP for Administration-CBK), and TCS Manpower Services, Inc. (TCS), Respondents.

FACTS

Petitioner Edward R. Añonuevo filed a complaint for illegal dismissal, regularization, and damages against respondents CBK Power Company, Ltd., its officers Hiroshi Tanimura and Servillano Dunglao, and TCS Manpower Services, Inc. Añonuevo alleged that on July 10, 2008, he applied for work at CBK’s Kalayaan Power Plant but was instructed to apply with Rolpson Enterprise, a manpower provider. He started working at the plant on July 14, 2008. On June 15, 2010, he was informed his salary would come from TCS instead, and on March 9, 2011, he signed two employment contracts with TCS covering specific periods. On December 14, 2012, TCS informed him his employment would terminate on December 31, 2012, due to the expiration of TCS’s service contract with CBK. On December 19, 2012, he was escorted out of CBK’s premises. Añonuevo claimed he was a regular employee of CBK, performing tasks necessary to its power generation business, and that Rolpson and TCS were labor-only contractors. CBK and its officers denied an employer-employee relationship, asserting CBK contracted temporary, non-core jobs to legitimate contractors like TCS. TCS intervened, claiming it was Añonuevo’s legitimate employer. The Labor Arbiter and the NLRC dismissed the complaint, finding TCS a legitimate contractor and no employer-employee relationship between Añonuevo and CBK. The CA affirmed, finding no grave abuse of discretion.

ISSUE

Did the CA err in holding that the NLRC committed no grave abuse of discretion in finding that Añonuevo was not a regular employee of CBK?

RULING

Yes. The Supreme Court granted the petition, finding the CA erred. The NLRC committed grave abuse of discretion as its conclusion that Añonuevo was a TCS employee was not supported by substantial evidence. The evidence established that Añonuevo was a regular employee of CBK. CBK failed to prove that Rolpson and TCS were legitimate job contractors and not labor-only contractors. The burden of proof was on the respondents, and they did not sufficiently show that these entities had substantial capital or investment, or that Añonuevo’s work as an IT Technician was not directly related to CBK’s business. Añonuevo’s work—monitoring contractors, performing IT jobs, safety patrol, and computer drawing—was necessary and desirable to CBK’s power generation business. The employment contracts Añonuevo signed with TCS were prepared only after he had been working, indicating they were a subterfuge to conceal a direct hiring arrangement. Since Añonuevo was a regular employee of CBK, his dismissal was illegal as it was based on the expiration of a service contract, which is not a valid authorized cause for termination under the Labor Code. The Supreme Court reversed the CA Decision and Resolution and held CBK, Tanimura, and Dunglao solidarily liable for Añonuevo’s reinstatement, full backwages, and other monetary awards.