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PCI AUTOMATION CENTER, INC. vs. NLRC
PCI AUTOMATION CENTER, INC. vs. NLRC
vs.
NATIONAL LABOR RELATIONS COMMISSION and HECTOR SANTELICES
Facts:
To comply with its obligation to procure manpower for the petitioner, PCIB engaged
the services of Prime Manpower Resources Development, Inc. (Prime). PCIB and
Prime entered into an External Job Contract
On September 20, 1985, private respondent Hector Santelices was hired by Prime
and assigned to petitioner as a data encoder to work on the 4th GL Environment
Conversion Project of PCIB.5 However, on March 18, 1991, Prime decided to
terminate private respondent's services after it was informed by the petitioner that
his services were no longer needed in the project
HELD:
The petitioner, through PCIB, contracted Prime to provide it with qualified personnel
to work on the computer conversion project of PCIB.17 The External Job Contract
between Prime and PCIB must be read in conjunction with the Computer Services
Agreement between PCIB and the petitioner. Under the Computer Services
Agreement, the petitioner shall direct and supervise the computer conversion project
of PCIB while PCIB shall provide the petitioner with data encoders and computer
attendants to work on the project. Pursuant to said Agreement, PCIB called on
Prime to furnish the petitioner with the needed personnel, one of whom was private
respondent. Hence, although the parties in the External Job Contract are only Prime
and PCIB, the legal consequences of such contract must also be made to apply to
the petitioner. Under the circumstances, PCIB merely acted as a conduit between
the petitioner and Prime. The project was under the management and supervision of
the petitioner and it was the petitioner which exercised control over the persons
working on the project.
Under the law, any person (hereinafter referred to as the "principal employer") who
enters into an agreement with a job contractor, either for the performance of a
specified work or for the supply of manpower, assumes responsibility over the
employees of the latter.18 However, for the purpose of determining the extent of the
principal employer's liability, the law makes a distinction between legitimate job
contracting and labor-only contracting. Article 106 of the Labor Code states:
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and
extent that he is liable to employees directly employed by him.
Considering the terms of the External Job Contract executed by Prime and PCIB, it
cannot be doubted that Prime is a labor-only contractor. Under the contract, Prime
merely acted as a placement agency providing manpower to the petitioner through
PCIB. The service rendered by Prime in favor of the petitioner was not the
performance of a specific job, but the supply of qualified personnel to work as data
encoders and computer attendants in connection with the petitioner's project.
Petitioner solidarily liable with Prime for the payment of all the monetary claims of
private respondent.