GR 115920; (January, 1996) (Digest)
G.R. No. 115920; January 29, 1996
PCI AUTOMATION CENTER, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and HECTOR SANTELICES, respondents.
FACTS
Petitioner PCI Automation Center, Inc. (PCI-AC) entered into a Computer Services Agreement with Philippine Commercial International Bank (PCIB) to develop software and computer systems. To fulfill its manpower needs under this agreement, PCIB, in turn, contracted Prime Manpower Resources Development, Inc. (Prime) to supply personnel, including private respondent Hector Santelices, who was hired by Prime in 1985 and assigned to PCI-AC as a data encoder. In 1991, Prime terminated Santelices upon PCI-AC’s advice that his services were no longer required.
Santelices filed a complaint for illegal dismissal against both Prime and PCI-AC before the National Labor Relations Commission (NLRC). The Labor Arbiter ruled in favor of Santelices, declaring Prime a labor-only contractor and holding it solidarily liable with PCI-AC for his monetary claims. The NLRC affirmed this decision, prompting PCI-AC to file the instant petition for certiorari.
ISSUE
Whether the NLRC committed grave abuse of discretion in affirming the Labor Arbiter’s ruling that Prime is a labor-only contractor, thereby making PCI-AC solidarily liable for the monetary claims of Santelices.
RULING
The Supreme Court dismissed the petition and affirmed the NLRC’s decision. The legal logic centers on the distinction between legitimate job contracting and labor-only contracting under Article 106 of the Labor Code. A legitimate contractor undertakes to perform a specific job or service for a principal, while a labor-only contractor merely supplies workers to perform tasks that are usually necessary or desirable in the principal’s business.
Applying this distinction, the Court found Prime to be a labor-only contractor. The “External Job Contract” between PCIB and Prime showed that Prime merely supplied personnel, such as encoders, to PCI-AC. PCI-AC exercised direct supervision and control over these workers, dictating their tasks and the need for their services. Prime did not carry on an independent business or undertake a specific job; its role was limited to providing manpower. Consequently, under the law, Prime is considered merely an agent of PCI-AC, the principal employer. The workers supplied, including Santelices, are deemed employees of PCI-AC for purposes of the Labor Code.
Therefore, PCI-AC, as the principal employer, is solidarily liable with the labor-only contractor, Prime, for all of Santelices’s rightful monetary claims arising from his illegal dismissal. The NLRC’s affirmation of this solidary liability was legally correct and did not constitute grave abuse of discretion.