Case Digest: DOLE Philippine v. Esteva, G.R. No. 161115, November 30, 2006

  • In 1993, Dole Philippines, Inc. and Cannery Multi-Purpose Cooperative (CAMPCO), entered into a Service Contract, where CAMPCO members provided services to Dole. Although the contract was initially for six months, it was extended or renewed without a written agreement.
  • DOLE's Regional Office found CAMPCO engaged in labor-only contracting, leading to a cease and desist order affirmed by DOLE Undersecretary Trajano. Despite the order, CAMPCO and others continued operations, leading DOLE to issue a Writ of Execution in 1999.
  • Respondents, who started working for Dole through CAMPCO in 1993-1994, filed a Complaint in 1996 alleging illegal dismissal and claiming regular employment status and wage differentials.
  • LA: Ruled in favor of Dole, stating CAMPCO was not engaged in labor-only contracting and respondents were not regular employees.
  • NLRC: Affirmed the decision. CAMPCO's substantial capital was cited as evidence of legitimate job contracting.
  • CA: Ruled CAMPCO did not qualify as an independent job contractor, emphasizing the need for independent business conduct, not just substantial capital investment. CAMPCO's lack of independence and Dole's control indicated labor-only contracting.

WoN CAPCO is engaged in the prohibited act of labor-only contracting. YES

The finding by the DOLE Secretary's authorized representatives that CAMPCO was a labor-only contractor is conclusive and cannot be deviated from. While some factors suggest an independent contractor relationship between petitioner and CAMPCO (e.g., CAMPCO selecting members to work, payment arrangements), other factors indicate a labor-only contracting arrangement such as the lack of substantial capital, sole reliance on petitioner, and petitioner's control over CAMPCO members' work and assignments.

Although petitioner touts the multi-million pesos assets of CAMPCO, it does well to remember that such were amassed in the years following its establishment. In 1993, when CAMPCO was established and the Service Contract between petitioner and CAMPCO was entered into, CAMPCO only had ₱6,600.00 paid-up capital, which could hardly be considered substantial. It only managed to increase its capitalization and assets in the succeeding years by continually and defiantly engaging in what had been declared by authorized DOLE officials as labor-only contracting.

CAMPCO did not operate independently from petitioner but was established solely to provide services to petitioner during peak seasons, with petitioner as its only client. CAMPCO did not perform specific or special jobs but supplied manpower as needed by petitioner, indicating labor-only contracting activities.  


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