LABOR BATCH 3 - Almeda v Asahi, Aklan v San Miguel

8/10/2019 LABOR BATCH 3 - Almeda v Asahi, Aklan v San Miguel

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ALMEDA ET AL VS ASAHI GLASS

FACTS: This a complaint for illegal dismissal with claims for moral and

exemplary damages and attorneys fees filed by Almeda, et al against Asahi Glass

and San Sebastian Allied Services, Inc. SSASI.

Petitioners alleged that Asahi and SSASI entered into a service contract

whereby SSASI undertook to provide Asahi with the necessary manpower for its

operations. Pursuant to such a contract, SSASI employed petitioners Randy

Almeda, Edwin Audencial, Nolie Ramirez and Ernesto Calicagan as glass cutters,and petitioner Reynaldo Calicagan as Quality Controller, all assigned to work for

respondent. Asahi terminated its service contract with SSASI, which in turn,

terminated the employment of petitioners on the same date. Believing that SSASI

was a labor-only contractor, and having continuously worked as glass cutters and

quality controllers for the respondent - functions which are directly related to itsmain line of business as glass manufacturer - for three to 11 years, petitioners

asserted that they should be considered regular employees of the Asahi; and that

their dismissal from employment without the benefit of due process of law was

unlawful.

Asahi claimed that petitioners were employees of SSASI and were merely

assigned by SSASI to work for respondent to perform intermittent services pursuantto an Accreditation Agreement. SSASI averred that it was the one who hired

petitioners and assigned them to work for respondent on occasions that the latters

work force could not meet the demands of its customers. Eventually, however,

respondent ceased to give job orders to SSASI, constraining the latter to terminate

petitioners employment.

ISSUE:Whether or not Almeda et al are employees of Asahi Glass even they were

originally hired by San Sebastian Allied Services.

HELDYes. Almeda, et al are employees of Asahi Glass.

Permissible job contracting or subcontracting refers to an arrangement whereby

a principal agrees to put out or farm out to a contractor or subcontractor the

performance or completion of a specific job, work or service within a definite or

predetermined period, regardless of whether such job, work or service is to be

performed or completed within or outside the premises of the principal. A person is

considered engaged in legitimate job contracting or subcontracting if the following

conditions concur:

(a) The contractor or subcontractor carries on a distinct and independent

business and undertakes to perform the job, work or service on its own

account and under its own responsibility according to its own manner and

method, and free from the control and direction of the principal in allmatters connected with the performance of the work except as to the

results thereof;

(b) The contractor or subcontractor has substantial capital or investment;

and

(c) The agreement between the principal and contractor or subcontractor

assures the contractual employees entitlement to all labor and occupational

safety and health standards, free exercise of the right to self-organization,

security of tenure, and social and welfare benefits.

On the other hand, labor-only contracting, a prohibited act, is an arrangement inwhich the contractor or subcontractor merely recruits, supplies or places workers to

perform a job, work or service for a principal. In labor-only contracting, the

following elements are present:

(a) The contractor or subcontractor does not have substantial capital or

investment to actually perform the job, work or service under its own

account and responsibility;

(b) The employees recruited, supplied or placed by such contractor or

subcontractor is performing activities which are directly related to the

main business of the principal.

In labor-only contracting, the statutes create an employer-employee relationship

for a comprehensive purpose: to prevent circumvention of labor laws. The

contractor is considered as merely the agent of the principal employer and the

latter is responsible to the employees of the labor-only contractor as if such

employees are directly employed by the principal employer. Therefore, if SSASI

was a labor-only contractor, then respondent shall be considered as the employer of

petitioners who must bear the liability for the dismissal of the latter, if any.

An important element of legitimate job contracting is that the contractor has

substantial capital or investment, which respondent failed to prove.

Furthermore, the Court is unconvinced by respondents argument that petitioners

were performing jobs that were not directly related to respondents main line of

business. Respondent is engaged in glass manufacturing. One of the petitioners

served as a quality controller, while the rest were glass cutters. The only excuse

offered by respondent - that petitioners services were required only when there was

an increase in the markets demand with which respondent could not cope - only

prove even more that the services rendered by petitioners were indeed part of the

main business of respondent. It would mean that petitioners supplemented the

regular workforce when the latter could not comply with the markets demand;

necessarily, therefore, petitioners performed the same functions as the regular

workforce. The indispensability of petitioners services was fortified by the length

and continuity of their performance, lasting for periods ranging from three to 11years.


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More importantly, the Court finds that the crucial element of control over

petitioners rested in respondent. The power of control refers to the authority of the

employer to control the employee not only with regard to the result of work to be

done, but also to the means and methods by which the work is to be accomplished.

It should be borne in mind that the power of control refers merely to the

existence of the power and not to the actual exercise thereof. It is not essential

for the employer to actually supervise the performance of duties of the

employee; it is enough that the former has a right to wield the power.

Petitioners followed the work schedule prepared by respondent. They were required

to observe all rules and regulations of the respondent pertaining to, among other

things, the quality of job performance, regularity of job output, and the manner and

method of accomplishing the jobs. Other than being the one who hired petitioners,

there was absolute lack of evidence that SSASI exercised control over them or their

work.

SSASI is a labor-only contractor; hence, it is considered as the agent of

respondent. Respondent is deemed by law as the employer of petitioners.

Equally unavailing is respondents stance that its relationship with petitioners

should be governed by the Accreditation Agreement stipulating that petitionerswere to remain employees of SSASI and shall not become regular employees of the

respondent. A party cannot dictate, by the mere expedient of a unilateral declaration

in a contract, the character of its business, i.e., whether as labor-only contractor or

as job contractor, it being crucial that its character be measured in terms of and

determined by the criteria set by statute


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AKLAN VS SAN MIGUEL CORP, BMA PHIL ASIA

FACTS: Respondent BMA Philasia, Inc. (BMA) is a domestic corporation engaged

in the business of transporting and hauling of cargoes, goods, and commodities of

all kinds. Petitioners are the former employees of respondent BMA at respondent

San Miguel Corporations (SMC) warehouse inPasig City. They were hired under

fixed-term contracts beginning October 1999. July 2001, petitioners went to DOLE

to file a complaint against BMA for underpayment of wages and non-payment of

premium pay for rest day, 13th month pay, and service incentive leave pay. BMA

agreed to a settlement with some of the complaints for underpayment wages. BMA

also refused to settle the claim of other complaints.

October 2001, petitioners held a strike at the warehouse premises to protest BMAs

refusal to pay the claim for underpayment of the res t of the workers which disrupted

the business operations of private respondents, prompting BMA to terminate their

services.

Petitioners alleged that they were illegally dismissed after filing a complaint for

underpayment of wages and non-payment of benefits before the DOLE; they were

terminated after staging a peaceful picket to protest the non-payment of their

claims. According to them, BMA is a labor-only contractor. SMC was not only the

owner of the warehouse and equipment used by BMA, it was their true

employer. The manner and means by which they performed their work were

controlled by SMC through its Sales Logistic Coordinator who was overseeing their

performance everyday.

The Labor Arbiter and finds that the SMC and BMA are jointly and severally liable

for the non-payment of the said incentives.

Private respondent SMC maintained that it had no employer-employee relationship

with petitioners who were hired and supervised exclusively by BMA pursuant to a

warehousing and delivery agreement in consideration of a fixed monthly fee. SMC

argued that BMA is a legitimate and independent contractor, duly registered with

the Securities and Exchange Commission (SEC) as a separate and distinct

corporation with substantial capitalization, investment, equipment, and tools. It

submitted documentary evidence proving that BMA engaged the services of

petitioners, paid for their wages and benefits, and exercised exclusive control and

supervision over them.

The NLRC affirmed the decision of the Labor Arbiter, CA reversed and set aside

the decisions of the NLRC hence this case.

ISSUE: Whether or not SMC have an employee-employer relationship with the

petitioners.

HELD: SC held that SMC showed that under their contract, BMA provided

delivery trucks, drivers, and helpers in the storage and distribution of SMC

products. On a day-to-day basis, after the routes were made by SMC salesmen, they

would book the orders they obtained. In turn, BMAs Schedular Planner, detailed at

the Pasig Warehouse, downloaded these booked orders from the computer and

processed the necessary documents to be forwarded to the Warehouse Checker, also

an employee of BMA. SMC contended that petitioners were dismissed by BMA for

staging a two-hour strike without complying with the mandatory requirements for a

valid strike. As a result, BMA had to come up with ways and means in order to

avoid the disruption of delivery operations.

A finding that a contractor is a "labor-only" contractor, as opposed to permissible

job contracting, is equivalent to declaring that there is an employer-employee

relationship between the principal and the employees of the supposed contractor,

and the "labor-only" contractor is considered as a mere agent of the principal, the

real employer.

Both the Labor Arbiter and the NLRC found that the employment contracts of

petitioners duly prove that an employer-employee relationship existed between

petitioners and BMA.

In its ruling, the NLRC considered the following elements to determine the

existence of an employer-employee relationship: (1) the selection and engagement

of the workers; (2) power of dismissal; (3) the payment of wages by whatever

means; and (4) the power to control the workers conduct.All four elements were

found by the NLRC to be vested in BMA.

Petitioners argue mainly that their employer is, in fact, respondent SMC, not

respondent BMA. They contend that BMA is a labor-only contractor and SMC, as

their true employer, should be held directly liable for their money claims, but the

facts of the case belies the contention of the petitioner thus the SC held that SMC

should not be held liable for the money claims of the petitioner.

Documents

LABOR BATCH 3 - Almeda v Asahi, Aklan v San Miguel