SERVFLEX, INC., PETITIONER, VS. LOVELYNN M. URERA, SHERRYL I. CABRERA, PRECIOUS C. PALANCA AND JOCO JIM L. SEVILLA, RESPONDENTS.
FACTS
Respondents Lovelynn M. Urera, Sherryl I. Cabrera, Precious C. Palanca, and Joco Jim L. Sevilla filed a complaint for regularization and nonpayment of benefits against Philippine Long Distance Telephone Company (PLDT) and Servflex, Inc. (petitioner). Respondents alleged they applied at PLDT but were referred to petitioner, which deployed them to work at PLDT as Database Engineers starting in 2013. They contended petitioner was a labor-only contractor as it had no independent business, their work was integral to PLDT’s business, and PLDT exercised control over their performance. PLDT and petitioner countered that their relationship was governed by a legitimate Contract of Service for three years commencing January 1, 2014, and that petitioner was a legitimate job contractor with DOLE registration, substantial capital, and exercised control over respondents as their direct employer. The Labor Arbiter ruled for respondents, declaring petitioner a labor-only contractor and respondents as regular employees of PLDT, ordering solidary payment of monetary awards, damages, and attorney’s fees. The NLRC reversed, dismissing the complaint and finding petitioner a legitimate contractor and the employer of respondents. The Court of Appeals granted respondents’ petition for certiorari, reinstating the LA’s decision with modifications.
ISSUE
Whether petitioner Servflex, Inc. is a legitimate job contractor or a labor-only contractor, making respondents regular employees of PLDT.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals. Petitioner Servflex, Inc. was declared a labor-only contractor, and respondents were declared regular employees of PLDT. The Court held that the existence of a DOLE registration certificate is not conclusive proof of legitimate job contracting. The factual findings of the Labor Arbiter, affirmed by the CA, established that petitioner did not have substantial capital or investment in the form of tools, equipment, machinery, or work premises. The work performed by respondents as Database Engineers was directly related to and integral to the principal business of PLDT. Furthermore, PLDT exercised control over respondents as they worked at PLDT’s premises, followed its work schedule, received instructions and supervision from PLDT managers, and attended PLDT training. The service agreement between petitioner and PLDT, which commenced in 2014, could not supersede the fact that respondents had already been deployed to and performing work for PLDT since 2013. The arrangement was a scheme to prevent respondents’ regularization. Thus, petitioner, as a labor-only contractor, was deemed merely an agent of PLDT, and PLDT was held solidarily liable with petitioner for the payment of respondents’ full backwages, benefits, moral and exemplary damages, and attorney’s fees.
