MANILA, Philippines — The Supreme Court (SC) has clarified that a Certificate of Registration from the Department of Labor and Employment (DOLE) does not automatically mean a manpower agency is engaged in legal job contracting.

In a decision written by Associate Justice Japar B. Dimaampao, the SC’s Third Division ruled that Nozomi Fortune Services, Inc. (Nozomi) had engaged in labor-only contracting when it deployed Celestino A. Naredo to Samsung Electro-Mechanics Philippines (Samsung) as a production operator.

The case began when Naredo and several other workers, who had been hired by Nozomi between 2003 and 2005, were assigned to Samsung’s production line. Their task: operating stacking machines to pile chip capacitors—an essential function in Samsung’s microchip manufacturing process.

In 2010, Samsung informed the workers that their services were no longer required. Feeling unjustly terminated, the workers filed complaints for illegal dismissal and sought regularization, arguing that they were effectively employees of Samsung and that Nozomi merely acted as an intermediary.

Initially, the Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the complaint. 

They pointed to Nozomi’s DOLE registration, substantial capital, and existing facilities as proof of its legitimacy as a job contractor. They also highlighted the workers’ resignation letters as evidence that they had voluntarily ended their employment.

However, the Court of Appeals reversed this ruling, declaring Nozomi guilty of labor-only contracting—a decision the Supreme Court later affirmed.

The SC explained that determining whether an agency is a legitimate job contractor or merely a labor-only contractor requires a thorough examination of the facts. 

While a DOLE Certificate of Registration can suggest compliance, it cannot serve as conclusive proof.

Under the Labor Code, legal job contracting occurs when a contractor not only supplies workers but also provides the necessary tools, equipment, and supervision, the SC said.

On the other hand, labor-only contracting happens when an agency supplies workers without adequate resources or control, leaving the actual employer in charge of supervision.

In Naredo’s case, the SC noted that the tools and equipment he used belonged to Samsung, not Nozomi. His work—operating machinery essential to Samsung’s production—was integral to the company’s primary business. 

The SC likewise said that Samsung supervisors directly oversaw his tasks, reinforcing the conclusion that Samsung was his real employer.

Despite this finding, the SC ruled there was no illegal dismissal, as the workers had voluntarily submitted their resignation letters.