Short answer. Yes. Article 109 makes every employer or indirect employer responsible together with the contractor or subcontractor for any violation of the Labor Code, and for civil liability all of them are considered direct employers. You may implead both and recover the whole amount from either.
What the law says
every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code
Labor Code, Article 109 — Solidary Liability. Read the full provision →
What the law says
For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
Labor Code, Article 109 — Solidary Liability. Read the full provision →
Both, and for the whole amount
Article 109 is headed solidary liability, and that is precisely what it creates: every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. Solidary liability means each of them answers for the entire obligation, not for a share of it. You are not obliged to sue the contractor first, prove it cannot pay, and only then turn to the principal. Naming both in the same claim is the ordinary course, and it protects you if one of them disappears while the case is pending.
It is not limited to unpaid wages
The words are any violation of any provision of this Code, which is wider than the wage rules the surrounding articles deal with. Underpayment of the minimum wage, unpaid overtime, missing premium pay for rest days and holidays, and unpaid service incentive leave all sit inside the Code, and the responsibility that Article 109 spreads across the chain covers them. What it distributes is responsibility for the violation; it does not convert every complaint against a contractor into a complaint the principal must answer regardless of subject matter.
Being 'considered direct employers' removes an argument
The second sentence does specific work. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. The usual defence of a principal is that it never hired you, so it owes you nothing. This provision meets that defence directly: for civil liability under this chapter, the principal is measured as though it had employed you. The article also opens with the phrase that the provisions of existing laws to the contrary notwithstanding, so an arrangement between the principal and the contractor allocating the risk elsewhere does not displace it.
Getting the parties right in the claim
The practical failure in these cases is naming the wrong company. Use exact corporate names rather than trade names or the sign at the site, and take them from documents — the service agreement if you can get it, the purchase or job order, the gate pass, the client-signed time records, or the uniform and identification card. Where a contractor has already closed, say so early, because the point of Article 109 is that the claim survives it. Keep the periods and rates in writing; the amount owed has still to be proved, however many parties answer for it.