1.) COCA-COLA BOTTLERS PHILS.
, INC v ISSUE:
ALAN M. AGITO, REGOLO S. OCA III, ERNESTO G. ALARIAO, JR.,
ALFONSO PAA, JR., DEMPSTER P. ONG, URRIQUIA T. ARVIN, GIL
H. FRANCISCO, and EDWIN M. GOLEZ,
G.R. No. 179546, February 13, 2009
Author: Pierse Henrik C. Laudencia
DOCTRINE:
A legitimate job contract, wherein an employer enters into a contract
with a job contractor for the performance of the formers work, is
permitted by law. On the other hand, labor-only contracting is an
arrangement wherein the contractor merely acts as an agent in
recruiting and supplying the principal employer with workers for the
purpose of circumventing labor law provisions setting down the rights
of employees. It is not condoned by law.
labor-only contracting would give rise to: (1) the creation of an
employer-employee relationship between the principal and the
employees of the contractor or sub-contractor; and (2) the
solidary liability of the principal and the contractor to the
employees in the event of any violation of the Labor Code
FACTS
1. Petitioner is a domestic corporation duly registered with the
Securities and Exchange Commission (SEC) and engaged in
manufacturing, bottling and distributing soft drink beverages and other
allied products.
2. Respondents alleged in their Position Paper that they were
salesmen assigned at the Lagro Sales Office of petitioner. They had
been in the employ of petitioner for years, but were not regularized.
Their employment was terminated on 8 April 2002 without just cause
and due process.;
3 Petitioners aver that respondents were employees of Interserve who
were tasked to perform contracted services in accordance with the
provisions of the Contract of Services executed between petitioner
and Interserve, and that the later was an independent contractor.
1. WON Interserve was a legitimate job contractor, or a labor only
contractor.
HELD: No, It is not
RATIO:
A legitimate job contract, wherein an employer enters into a contract
with a job contractor for the performance of the formers work, is
permitted by law. On the other hand, labor-only contracting is an
arrangement wherein the contractor merely acts as an agent in
recruiting and supplying the principal employer with workers for the
purpose of circumventing labor law provisions setting down the rights
of employees. It is not condoned by law.
labor-only contracting would give rise to: (1) the creation of an
employer-employee relationship between the principal and the
employees of the contractor or sub-contractor; and (2) the
solidary liability of the principal and the contractor to the
employees in the event of any violation of the Labor Code.
Petitioner argues that there could not have been labor-only
contracting, since respondents did not perform activities that were
indispensable to petitioners principal business. And, even
assuming that they did, such fact alone does not establish an
employer-employee relationship between petitioner and the
respondents, since respondents were unable to show that
petitioner exercised the power to select and hire them, pay their
wages, dismiss them, and control their conduct.
The law clearly establishes an employer-employee relationship
between the principal employer and the contractors employee
upon a finding that the contractor is engaged in labor-only
contracting
The court also finds that the capital of Interserve was not enough,
because the paid up capital stocks were not sufficient
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.