PCIAUTOMATI

ONCENTER,INC.vs.NATIONALLABORRELATI
ONSCOMMI
SSI
ON
andHECTORSANTELI CES
G.R.No.115920,Januar
y29,1996

FACTS:

In1985,Phi li
ppineCommer ci
alInter
nationalBank( PCIB)commencedi t
s4thGLEnv ironmentConv ersi
on
Projectintendedt oli
nkal lexi
stingcomput ersy stemswi t
hinPCI Bandi t
svari
ousbr anchesaroundt he
country.Itenteredint
oaComput erServi
cesAgr eementwi thpetit
ionerPCIAut
omat i
onCent er,I
nc.(PCI-
AC),underwhi chpeti
ti
onerobl i
gateditselftodirect,super
viseandr unthedevel
opmentoft hesoftware,
comput ersoftwareapplicati
onsandcomput ersystem ofPCI B.Underthesameagr eement,PCIB,ont he
otherhand, agreedtoprovidethepetit
ionerPCI -ACwi thencodersandcomputeratt
endants,amongot hers.

Tocomplywit
hitsobl
igat
iontoprocuremanpowerf
ort
hepet
it
ioner
,PCI
Bengagedt
heser
vicesofPr
ime
ManpowerResour
cesDevelopment,
Inc.(
Pri
me).

OnSeptember1985,amongt hosehir
edbyPri
measdat aencoderwasher einprivat
er espondentHect
or
Sant
eli
ces(Sant
eli
ces)whowasassignedtoworkonthe4t hGLEnv i
ronmentConv er
sionPr oj
ectofPCI
B.
However,onMarch1991,Pri
medecidedt
oter
minaterespondentSant
elices'ser
vicesafteritwasinf
ormed
bypeti
ti
onerPCI
-ACt hathi
sservi
ceswer
enolongerneededintheproject.

Asaconsequence,respondentSantel
icesf i
ledbeforetheNLRCacompl ai
ntforil
legaldi
smi
ssalagai
nst
Pri
meandPCI-AC.I n1993,theLaborAr bi
terheldthatrespondentSant
eli
ces'
dismissalwasi
ll
egal
.Pri
me
andPCI-ACappealedtot heNLRC.Howev er,publ
icrespondentNLRCaf f
ir
medt heDecisi
onoftheLabor
Arbi
ter
.

Hence,
thi
spet
it
ion.

I
SSUES:

1.WON privat
erespondentSant
eli
ces,bei
ngaprojectemployee,wasv
ali
dlydi
smi
ssedwhent
he
pr
ojecthewasworkingonwascompletedonMar
ch15, 1991

2.WON petit
ionerPCI -AC i
ssol
idar
il
yli
abl
e wi
th Pr
imef
oral
lthe monet
arycl
aimsofpr
ivat
e
r
espondentSantel
ices

RULI
NG:

1.NO.Thedi
smi
ssalofpr
ivat
erespondentSant
eli
ceswasi
nval
id.

Danil
oCal auag,theassistantv i
ce-presidentandmanagerofI nter
nati
onalOper ati
onsofPr i
me
Manpower ,expl
ainedinhi stest
imonyt hathereinprivt
erespondentHectorSant eli
ceswasiniti
all
y
assi
gnedt oworkasdat aencoderi nTower2.Then, hewasassignedt oTower1becauset herewas
workt o bedonei n Tower1 t hatnecessi t
ated histransf
ert herealthough thewor khewas
perf
orminginTowerI Iwasst il
lexist
ingandTowerI Ii
sstil
linprogress.I
not herwords,hi
sorigi
nal
assi
gnmenti ssti
llon-goingupt othepresent.

The for
egoing t
estimonyexpressl
yand cl earl
yadmi tt
ed that4 GL conv er
sion proj
ect,mor e
par
ti
cularl
yTowerI Itowhichcomplai
nantwasor igi
nal
lyassignedisst
il
lanon-goi ngproject,and
notyetcompletedasposi tedbyrespondents.Therewast herefor
enor easonf orcomplainant'
s
di
smissalonMar ch15,1991onthegroundofcompl eti
onofpr oj
ect.
2.YES, PCI-AC i
ssol
idar
il
yli
abl
ewi
thPr
imef
oral
lthemonet
arycl
aimsofpr
ivat
erespondent
Sant
eli
ces.

Fort
hepurposeofdeter
mini
ngtheextentoft
heprincipalempl
oyer'
sli
abi
li
ty,Ar
t106oft heLabor
Codemakesadist
inct
ionbet
weenlegi
timat
ejobcontracti
ngandlabor
-onl
ycontract
ing.

Inlegit
imatejobcont racti
ng,noemployer-employeerelati
onshi
pexistsbetweentheemploy
eesof
thejobcont ractorandt heprinci
palemployer.Eventhen,theprinci
palemployerbecomesjointl
y
andsev eral
lyliabl
ewi ththejobcontr
actorforthepaymentoft heemployees'wageswheneverthe
contract
orfailstopayt hesame.I nsuchcase,thelawcr eat
esanempl oyer
-employeerel
ati
onship
betweent hepr i
ncipalemployerandthejobcont r
actor
'semployeesforalimit
edpurposeonly,t
hat
is,
toensur ethattheempl oyeesarepaidthei
rwages.

Ont heot herhand,i nlabor-onlycontracti

ng,anempl oy
er-empl oyeer elat
ionshipiscr eatedbylaw
betweent hepr i
ncipalempl oyerandt heempl oyeesoft helabor-onl ycont r
actor.Int hi
scase,t he
labor-onlycont ractorisconsi dered mer elyan agentoft hepr incipalempl oyer.Thepr inci
pal
empl oyeri sresponsibletot heempl oyeesoft helabor-onlycont ract
orasi fsuchempl oyeeshad
been direct l
yempl oyed byt hepr i
ncipalempl oyer
.Thepr incipalempl oyert hereforebecomes
soli
darilyliabl
ewi t
ht helabor-onlycontractorf
oralltheright
fulclaimsoft heempl oyees.

Thus,i
nl egi
ti
mat ejobcontr
acti
ng,thepr
incipalempl
oyeri
sconsi
deredonl
yanindi
rectemploy
er,
whil
einl abor-onlycont
racti
ng,thepri
ncipalemploy
erisconsi
deredthedir
ectemployerofthe
employees.

Here,i
tiscl
earintermsoft heExt
ernalJobCont r
actexecut
edbyPr i
meandPCI BthatPri
mei sa
l
abor-onl
ycontractor
.Underthecont r
act,Pri
memer elyactedasapl acementagencypr ov
idi
ng
manpowertopetit
ionerPCI-ACthroughPCI B.Theser
vicerenderedbyPr imei nfavorofthePCI-
ACwasnott heperfor
manceofaspeci fi
cjob,butt
hesupplyofqualif
iedper sonnelt
owor kasdata
encoder
sandcomput erat
tendant
sinconnect i
onwitht
hepetiti
oner'
sproject.

Accordingl
y,si
ncePri
mei salabor-onlycontr
act
or,
thewor
ker
sitsuppli
edtothepeti
ti
onerPCI-AC,
i
ncludingpri
vater
espondentSanteli
ces,shoul
dbeconsi
der
edemployeesofthepeti
ti
onerPCI-AC.

Thus,NLRCwascorr
ecti
nholdi
ngpetit
ionerPCI
-ACsol
idar
il
yli
abl
ewi
thPr
imef
ort
hepay
mentof
al
lthemonet
arycl
aimsofpr
ivat
erespondent.

I
N VIEW WHEREOF,t
hepet
it
ioni
sDI
SMI
SSED.Theassai
ledDeci
sionandResol
uti
onar
eher
eby
AFFI
RMED.