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1.) COCA-COLA BOTTLERS PHILS.

, INC v ISSUE:
ALAN M. AGITO, REGOLO S. OCA III, ERNESTO G. ALARIAO, JR., 1. WON Interserve was a legitimate job contractor, or a labor only
ALFONSO PAA, JR., DEMPSTER P. ONG, URRIQUIA T. ARVIN, GIL contractor.
H. FRANCISCO, and EDWIN M. GOLEZ,
HELD: No, It is not

G.R. No. 179546, February 13, 2009 RATIO:


Author: Pierse Henrik C. Laudencia
A legitimate job contract, wherein an employer enters into a contract
DOCTRINE: with a job contractor for the performance of the formers work, is
permitted by law. On the other hand, labor-only contracting is an
A legitimate job contract, wherein an employer enters into a contract arrangement wherein the contractor merely acts as an agent in
with a job contractor for the performance of the formers work, is recruiting and supplying the principal employer with workers for the
permitted by law. On the other hand, labor-only contracting is an purpose of circumventing labor law provisions setting down the rights
arrangement wherein the contractor merely acts as an agent in of employees. It is not condoned by law.
recruiting and supplying the principal employer with workers for the
purpose of circumventing labor law provisions setting down the rights labor-only contracting would give rise to: (1) the creation of an
of employees. It is not condoned by law. employer-employee relationship between the principal and the
employees of the contractor or sub-contractor; and (2) the
labor-only contracting would give rise to: (1) the creation of an solidary liability of the principal and the contractor to the
employer-employee relationship between the principal and the employees in the event of any violation of the Labor Code.
employees of the contractor or sub-contractor; and (2) the
solidary liability of the principal and the contractor to the Petitioner argues that there could not have been labor-only
employees in the event of any violation of the Labor Code contracting, since respondents did not perform activities that were
indispensable to petitioners principal business. And, even
FACTS
1. Petitioner is a domestic corporation duly registered with the
assuming that they did, such fact alone does not establish an
Securities and Exchange Commission (SEC) and engaged in employer-employee relationship between petitioner and the
manufacturing, bottling and distributing soft drink beverages and other respondents, since respondents were unable to show that
allied products. petitioner exercised the power to select and hire them, pay their
wages, dismiss them, and control their conduct.
2. Respondents alleged in their Position Paper that they were
salesmen assigned at the Lagro Sales Office of petitioner. They had The law clearly establishes an employer-employee relationship
been in the employ of petitioner for years, but were not regularized. between the principal employer and the contractors employee
Their employment was terminated on 8 April 2002 without just cause
upon a finding that the contractor is engaged in labor-only
and due process.;
contracting
3 Petitioners aver that respondents were employees of Interserve who
were tasked to perform contracted services in accordance with the The court also finds that the capital of Interserve was not enough,
provisions of the Contract of Services executed between petitioner because the paid up capital stocks were not sufficient
and Interserve, and that the later was an independent contractor.
Interserve did not have substantial capital or investment in
the form of tools, equipment, machineries, and work
premises; and respondents, its supposed employees,
performed work which was directly related to the principal
business of petitioner. It is, thus, evident that Interserve falls
under the definition of a labor-only contractor, under Article
106 of the Labor Code; as well as Section 5(i) of the Rules
Implementing Articles 106-109 of the Labor Code, as
amended.