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Mago vs. Sun Power

Jobcrest contracted with Sunpower Manufacturing to provide business process services. Jobcrest then trained and assigned Leo and Leilanie to work for Sunpower. Leo and Leilanie took leave then were terminated. They claimed Sunpower was their statutory employer. The Court ruled that Jobcrest was a legitimate independent contractor based on the evidence. As Jobcrest was an independent contractor, Sunpower was not the statutory employer of Leo and Leilanie.

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Khristienne Bernabe
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570 views2 pages

Mago vs. Sun Power

Jobcrest contracted with Sunpower Manufacturing to provide business process services. Jobcrest then trained and assigned Leo and Leilanie to work for Sunpower. Leo and Leilanie took leave then were terminated. They claimed Sunpower was their statutory employer. The Court ruled that Jobcrest was a legitimate independent contractor based on the evidence. As Jobcrest was an independent contractor, Sunpower was not the statutory employer of Leo and Leilanie.

Uploaded by

Khristienne Bernabe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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LEO V. MAGO, et al vs.

SUN POWER MANUFACTURING LIMITED


G.R. No. 210961
January 24, 2018

Facts:

On October 10, 2008, Jobcrest and Sunpower entered into a Service Contract
Agreement, in which Jobcrest undertook to provide business process services for
Sunpower, a corporation principally engaged in the business of manufacturing
automotive computer and other electronic parts. Jobcrest then trained its employees,
including the petitioners, for purposes of their engagement in Sunpower. After the
satisfactory completion of this training, the petitioners, who were then cohabiting
together, were assigned to Sunpower's plant in Laguna Technopark. Leo was tasked as
a Production Operator in the Coinstacking Station while Leilanie was assigned as a
Production Operator, tasked with final visual inspection in the Packaging Station
on Jobcrest's On-site Supervisor, Allan Dimayuga (Allan), supervised the petitioners
during their assignment with Sunpower. It was alleged that sometime in October 2011,
Sunpower conducted an operational alignment, which affected some of the services
supplied by Jobcrest. Sunpower decided to terminate the Coinstacking/Material
Handling segment and the Visual Inspection segment. Meanwhile, Leo and Leilanie
were respectively on paternity and maternity leave because Leilanie was due to give
birth to their common child. Leo was thereafter informed that their employment were
terminated due to absences when he reported for work and he was served with a
"Notice of Admin Charge/Explanation Slip," requiring her to explain why he failed to
disclose her co-habitation status with Leilanie. Leilanine was informed that she will be
transferred to another client company and was likewise provided a referral slip for a
medical examination, pursuant to her new assignment. Despite the filing of the
complaint, Leilanie returned to Jobcrest where she was served with a similar "Notice of
Admin Charge/Explanation Slip," requiring her to explain why she failed to disclose her
co-habitation status with Leo.

The LA held that Jobcrest is a legitimate independent contractor and the petitioners'
statutory employer. The NLRC reversed the LA's findings. The CA granted Sunpower's
petition for  certiorari and enjoined the implementation of the assailed NLRC ruling.

Issue:

Whether or not Jobcrest is a legitimate and independent contractor.

Ruling:

Yes, Jobcrest is a legitimate and independent contractor.


DOLE Department Order (DO) No. 18-02, the regulation in force at the time of the
petitioners' assignment to Sunpower, reiterated the language of the Labor Code. In
order to become a legitimate contractor, the contractor must have substantial capital or
investment, and must carry a distinct and independent business free from the control of
the principal. In addition, the Court requires the agreement between the principal and
the contractor or subcontractor to assure the contractual employees' entitlement to all
labor and occupational safety and health standards, free exercise of the right to self-
organization, security of tenure, and social welfare benefits.

Furthermore, the Court considers job contracting or subcontracting as permissible when


the principal agrees to farm out the performance of a specific job, work or service to
the contractor, for a definite or predetermined period of time, regardless of whether
such job, work, or service is to be performed or completed within or outside the
premises of the principal. Ordinarily, a contractor is presumed to be a labor-only
contractor, unless the contractor is able to discharge the burden of overcoming this
presumption. In cases when it's the principal claiming the legitimacy of the contractor,
then the burden is borne by the principal.

Preliminarily, the Court finds that there is no such burden resting on either Sunpower or
Jobcrest in this case. It is true that Sunpower maintained its position that Jobcrest is a
legitimate and independent contractor. But since the petitioners do not dispute that
Jobcrest was a duly-registered contractor under Section 11 of DOLE DO No. 18-02,
there is no operative presumption that Jobcrest is a labor-only contractor.

The Court is constrained to give more weight to the substantiated allegations of


Sunpower, as opposed to the unfounded self-serving accusations of the petitioners. All
things considered, Sunpower is not the statutory employer of the petitioners. The
circumstances obtaining in this case, as supported by the evidence on record, establish
that Jobcrest was a legitimate and independent contractor. There is no reason for this
Court to depart from the CA's findings.

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