RESPONDENT Skills and Talent Employment Pool Inc. (Step) is engaged in human resource management and technical services.
One of its clients is petitioner Lingnam Restaurant. In a contract of employment, respondent Jessie Colaste is a project employee of respondent Step assigned to work with petitioner Lingnam Restaurant as assistant cook.
Colaste filed a complaint for illegal dismissal against Lingnam Restaurant and Step. In defense, Lingnam Restaurant denied that it was the employer of Colaste and alleged that Step was Colaste’s real employer.
The Labor Arbiter (LA) found no merit in the defense of Lingnam Restaurant. The National Labor Relations Commission (NLRC) reversed the LA decision and held that Step is an independent contractor. The Court of Appeals (CA) reversed the NLRC decision and reinstated the LA decision.
Did the CA err?
Ruling: No.
The Court notes that Step, in its cautionary pleading filed before the Labor Arbiter, stated that it entered into an agreement with petitioner Lingnam Restaurant in 2002, where it agreed to provide Lingnam Restaurant with human resources to perform activities related to the operation of its restaurant. Thus, as stated by the Court of Appeals, Step merely acted as a placement agency providing human resources to Lingnam Restaurant. The service rendered by Step in favor of Lingnam Restaurant was not the performance of a specific job, but the supply of personnel to work at Lingnam Restaurant. In this case, Step provided petitioner with an assistant cook in the person of Jessie Colaste.
In the employment contract between Jessie Colaste and Step from Jan. 4, 2006 up to June 3, 2007, Colaste was assigned as kitchen helper at Lingnam Restaurant, while in the subsequent employment contracts from Nov. 5, 2007 up to Jan. 5, 2008, and from Jan. 5, 2008 up to March 5, 2008, he was assigned as assistant cook.
The three employment contracts state that Jessie Colaste’s “work result performance shall be under the strict supervision, control and make sure that the end result is in accordance with the standard specified by client to Step Inc.”
Hence, the Court agrees with the Court of Appeals that the work performance of Colaste is under the strict supervision and control of the client (Lingnam Restaurant) as well as the end result.
As assistant cook of Lingnam Restaurant, Colaste’s work is directly related to the restaurant business of petitioner. He works in petitioner’s restaurant and presumably under the supervision of its chief cook. This falls under the definition of labor-only contracting under Section 5 of Rule VIII-A, Book III of the Amended Rules To Implement The Labor Code, since the contractor, Step, merely supplied Jessie Colaste as assistant cook to the principal, Lingnam Restaurant; the job of Colaste as assistant cook is directly related to the main business of Lingnam Restaurant, and Step does not exercise the right to control the performance of the work of Colaste, the contractual employee.
As Step is engaged in labor-only contracting, the principal, petitioner Lingnam Restaurant, are deemed the employer of Colaste, in accordance with Section 7, Rule VIII-A, Book III of the Amended Rules To Implement The Labor Code.
Colaste started working with petitioner since 2006 and he should be considered a regular employee of petitioner. (Lingnam Restaurant vs. Skills & Talent Employment Pool, Inc., and Jessie Colaste, G.R. No. 214667, December 3, 2018).