G.R. No.

50915 August 30, 1990

ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION, petitioner,
vs.
HON. JACOBO C. CLAVE, in his capacity as Presidential Executive Assistant, ASSOCIATED FEDERATION OF LABOR (AFL)
and its members, namely AMADOR GUARINO, VICENTE MARQUEZ, ALFREDO ENRIQUEZ and NICASIO SAN
JUAN, respondents.
FACTS:
(This petition for certiorari under Rule 65 of the Rules of Court seeks the annulment of the decision of the Presidential
Executive Assistant of the Office of the President affirming the ruling of the Secretary of Labor which ordered the payment
of back wages to private respondents.)
Petitioner Corporation entered into separate but identical contracts of promotional dealership with Epifanio Cabillan, Sofronio
Perdigon and Walfrido Alverez for the purpose of selling the cigarettes manufactured by petitioner. These dealers hired private
respondents as drivers or helpers but subsequently dismissed them.
On October 15, 1973, the National President of respondent Associated Federation of Labor (AFL), for and in behalf of
respondents filed a complaint with the Labor Arbiter against Petitioner Corporation and its promotional dealers, for unfair l abor
practice in dismissing respondent employees and for violation of P.D. No. 21, the Minimum Wage Law and the Eight Hour Labor
Law.
Petitioner Corporation, in its answer, denied the existence of employer-employee relationship between the former and
respondent employees.
The Labor Arbiter rendered a decision which held the petitioner liable for all claims and charges in the complaint except for the
unfair labor practice charge, and ordered Petitioner Corporation to reinstate respondent employees with full back wages.
Petitioner appealed to the National Labor Relations Commission but the same was dismissed. On appeal to the Secretary of
Labor, which the latter affirmed the decision of the NLRC.
Still not satisfied, petitioner elevated the case to the Office of the President. In its decision, the Office of the President affirmed
the appealed decision of the Secretary of Labor with the modification that the award of back wages to be paid to private
respondents be limited to six (6) months.
ISSUE:
The issue to be resolved in this case is whether or not private respondents, who were hired by the promotional dealers of the
corporation, should be considered as employees of the corporation itself.
RULING:
The petition is DISMISSED and the decision of the Office of the President is AFFIRMED.
The Court found the petition devoid of merit.
It is a fundamental rule that relations of parties must be judged from case to case and the decree of law and not by declaration of
parties
The main issue of whether these dealers and the latter's drivers are employees of the corporation can only be resolved by
applying the four-fold test to determine the existence of an employer-employee relationship. In a long line of decisions, the Court,
has invariably applied the four factors: 1) the selection and engagement of the employee; 2) the payment of wages; 3) the power
of dismissal; and 4) the power to control the employee's conduct. It is the latter factor, which is called the "control test" that is the
most important. It appears that public respondent and the labor officers had applied the foregoing criteria in the facts of this case
and correctly arrived at the conclusion that the dealers and the drivers/helpers of the latter were employees of Petitioner
Corporation. Records amply show that the dealers and private respondents were required not only to keep regular working
hours but to abide by petitioner's regulations and policies as well. In other words, these dealers and the latter's workers were
under the direct control and supervision of petitioner corporation from the very moment they entered the work premises at the
beginning of the working day until closing time. This was even expressly stated in the contracts of dealership.
That, "Job contracting" must be distinguished from "labor-only contracting" which is defined in Section 9 of Rule VIII, Book III of
the Omnibus Rules Implementing the Labor Code,
Records show that the contracts of dealership expressly directed the dealers to hire chauffer and/or helpers. Petitioner supplied
the necessary vehicles for the selling of cigarettes and defrayed all expenses for repairs thereof, fuel and toll payments. The
work carried out by the dealers and the latter's drivers was performed during regular working hours six (6) days a week, which
circumstance made it impossible for them to carry on any additional and independent business outside the premises of
petitioner. Clearly, the promotional dealers were only engaged in "labor-only contracting."
A finding that a contractor was a "labor-only" contractor is equivalent to a finding that an employer-employee relationship existed
between the owner and the "labor-only" contractor including the latter's workers, that relationship being attributed by the law
itself. The rationale behind this is to prevent any violation or circumvention of any provision of our labor laws. The law in effect
holds both the employer and labor-only contractor responsible to the latter's employees for the more effective safeguarding of the
employees' rights under the Labor Code.