G.R. No. 231090 . June 22, 2022.
PHILIPPINE PIZZA, INC., PETITIONER, VS. ELVIS C. TUMPANG, JOEL L. RAMO, RUEL C. FENIS, AND CONSOLIDATED BUILDING MAINTENANCE, INC., RESPONDENTS.

FACTS

Petitioner Philippine Pizza, Inc. (PPI), a domestic corporation and franchisee/operator of Pizza Hut restaurants, engaged the services of respondent Consolidated Building Maintenance, Inc. (CBMI), a corporation providing janitorial, kitchen, messengerial, and allied services. Respondents Elvis C. Tumpang, Joel L. Ramo, and Ruel C. Fenis were deployed by CBMI to PPI as delivery riders. They filed a complaint for regularization against PPI and CBMI before the Labor Arbiter (LA), alleging they were hired by PPI in 2003, 2004, and 2008, respectively, and that their work as delivery riders was necessary and desirable to PPI’s business. They contended CBMI was a labor-only contractor as PPI exercised control and supervision over them and owned the motorcycles they used. The LA dismissed the complaint, finding CBMI to be a legitimate job contractor and the employer of respondents, as CBMI, through its supervisor, exercised control, and PPI did not own the motorcycles. The NLRC affirmed the LA’s decision. On a Rule 65 Petition for Certiorari, the Court of Appeals (CA) reversed the NLRC, holding that CBMI was a labor-only contractor because the respondents’ duties were necessary and desirable to PPI’s business, and the evidence failed to show specific instances of CBMI’s actual control. PPI and CBMI filed the present Petition for Review on Certiorari under Rule 45.

ISSUE

Whether the Court of Appeals erred in finding grave abuse of discretion on the part of the NLRC and in holding that CBMI is a labor-only contractor and that PPI is the employer of respondents.

RULING

The Supreme Court granted the petition, reversed the CA Decision and Resolution, and reinstated the NLRC Resolutions. The Court held that the NLRC did not commit grave abuse of discretion, as its finding that CBMI is a legitimate job contractor is supported by substantial evidence and is settled by the doctrine of stare decisis. The Court cited its prior rulings in CBMI v. Asprec (832 Phil. 630) and PPI v. Cayetano ( G.R. No. 230030 ), which involved substantially similar facts and parties, and which definitively declared CBMI to be a legitimate independent contractor based on its Certificate of Registration from the DOLE, substantial capital, and independent operation. The CA erred in disregarding these precedents and in imputing grave abuse of discretion to the NLRC. Consequently, CBMI remains the legitimate employer of the respondents.