[G.R. No. 129315. October 2, 2000] OSIAS I. CORPORAL, SR., et al VS Natio al Labor Note!

" This special civil action for certiorari seeks the review of the Resolution dated October 17, 1996 of public respondent National Labor Relations Co ission !"irst #ivision$,%1& in NLRC NCR Case No' (()(*)(+16+)9,, and the Resolution dated -arch ,, 1997 den.in/ the otion for reconsideration' The aforecited October 17th Resolution affir ed the #ecision dated 0epte ber 12, 1996 of Labor 3rbiter 4otenciano 0' Ca5i6ares dis issin/ the petitioners7 co plaint for ille/al dis issal and declarin/ that petitioners are not re/ular e plo.ees of private respondent Lao 8nten/ Co pan., 9nc'' #AC$S" The records of the case show that the five ale petitioners, na el., Osias 9' Corporal, 0r', 4edro Tolentino, -anuel Caparas, 8lpidio Lacap, and 0i plicio 4edelos worked as barbers, while the two fe ale petitioners, Teresita "lores and 4atricia Nas worked as anicurists in New Look :arber 0hop located at 6,1 4' 4aterno 0treet, ;uiapo, -anila owned b. private respondent Lao 8nten/ Co' 9nc'' 4etitioner Nas alle/ed that she also worked as watcher and arketer of private respondent' 4etitioners clai that at the start of their e plo. ent with the New Look :arber 0hop, it was a sin/le proprietorship owned and ana/ed b. -r' <icente Lao' 9n or about =anuar. 1921, the children of <icente Lao or/ani6ed a corporation which was re/istered with the 0ecurities and 8>chan/e Co ission as Lao 8nten/ Co' 9nc' with Trinidad On/ as 4resident of the said corporation' ?pon its incorporation, the respondent co pan. took over the assets, e@uip ent, and properties of the New Look :arber 0hop and continued the business' 3ll the petitioners were allowed to continue workin/ with the new co pan. until 3pril 1,, 199, when respondent Trinidad On/ infor ed the that the buildin/ wherein the New Look :arber 0hop was located had been sold and that their services were no lon/er needed' On 3pril 12, 199,, petitioners filed with the 3rbitration :ranch of the NLRC, a co plaint for ille/al dis issal, ille/al deduction, separation pa., non)pa. ent of 1+th onth pa., and salar. differentials' Onl. petitioner Nas asked for pa. ent of salar. differentials as she alle/ed that she was paid a dail. wa/e of 41,'(( throu/hout her period of e plo. ent' The petitioners also sou/ht the refund of the 41'(( that the respondent co pan. collected fro each of the dail. as salar. of the sweeper of the barber shop' 4rivate respondent in its position paper averred that the petitioners were Aoint venture partners and were receivin/ fift. percent co ission of the a ount

char/ed to custo ers' Thus, there was no e plo.er)e plo.ee relationship between the and petitioners' 3nd assu in/ ar/uendo, that there was an e plo.er) e plo.ee relationship, still petitioners are not entitled to separation pa. because the cessation of operations of the barber shop was due to serious business losses' 9n a #ecision dated 0epte ber 12, 199,, Labor 3rbiter 4otenciano 0' Ca5i6ares, =r' ordered the dis issal of the co plaint on the basis of his findin/s that the co plainants and the respondents were en/a/ed in a Aoint venture and that there e>isted no e plo.er)e plo.ee relation between the ' The Labor 3rbiter also found that the barber shop was closed due to serious business losses or financial reverses and conse@uentl. declared that the law does not co pel the establish ent to pa. separation pa. to whoever were its e plo.ees' On appeal, NLRC affir ed the said findin/s of the Labor 3rbiter and dis issed the co plaint for want of erit, ratiocinatin/ thusB 9ndeed, co plainants failed to show the e>istence of e plo.er)e plo.ee relationship under the fourwa. test established b. the 0upre e Court' 9t is a co on practice in the :arber 0hop industr. that barbers suppl. their own scissors and ra6ors and the. split their earnin/s with the owner of the barber shop' The onl. capital of the owner is the place of work whereas the barbers provide the skill and e>pertise in servicin/ custo ers' The onl. control e>ercised b. the owner of the barber shop is to ascertain the nu ber of custo ers serviced b. the barber in order to deter ine the sharin/ of profits' The barbers a.be characteri6ed as independent contractors because the. are under the control of the barber shop owner onl. with respect to the result of the work, but not with respect to the details or anner of perfor ance' The barbers are en/a/ed in an independent callin/ re@uirin/ special skills available to the public at lar/e' This case is an e>ception to the /eneral rule that findin/s of facts of the NLRC are to be accorded respect and finalit. on appeal' Ce have lon/ settled that this Court will not uphold erroneous conclusions unsupported b. substantial evidence' 9t ust also stress that where the findin/s of the NLRC contradict those of the labor arbiter, the Court, in the e>ercise of its e@uit. Aurisdiction, a. look into the records of the case and ree>a ine the @uestioned findin/s' ISS%&" Chether or not an e plo.er)e plo.ee relationship e>isted between petitioners and private respondent Lao 8nten/ Co pan., 9nc' The Labor 3rbiter has concluded that the petitioners and respondent co pan. were en/a/ed in a Aoint venture' The NLRC concluded that the petitioners were independent contractors' '&L(" The Labor 3rbiter7s findin/s that the parties were en/a/ed in a Aoint venture is

unsupported b. an. docu entar. evidence' 9t should be noted that aside fro the self)servin/ affidavit of Trinidad Lao On/, there were no other evidentiar. docu ents, nor written partnership a/ree ents presented' Ce have ruled that even the sharin/ of proceeds for ever. Aob of petitioners in the barber shop does not ean the. were not e plo.ees of the respondent co pan.' 4etitioners are not Dindependent contractorsD' The. did not carr. on an independent business' Neither did the. undertake cuttin/ hair and anicurin/ nails, on their own as their responsibilit., and in their own anner and ethod' The services of the petitioners were en/a/ed b. the respondent co pan. to attend to the needs of its custo ers in its barber shop' -ore i portantl., the petitioners, individuall. or collectivel., did not have a substantial capital or invest ent in the for of tools, e@uip ent, work pre ises and other aterials which are necessar. in the conduct of the business of the respondent co pan.' Chat the petitioners owned were onl. co bs, scissors, ra6ors, nail cutters, nail polishes, the nippers ) nothin/ else' :. no standard can these be considered substantial capital necessar. to operate a barber shop' "ro the records, it can be /leaned that petitioners were not /iven work assi/n ents in an. place other than at the work pre ises of the New Look :arber 0hop owned b. the respondent co pan.' 3lso, petitioners were re@uired to observe rules and re/ulations of the respondent co pan. pertainin/, a on/ other thin/s, observance of dail. attendance, Aob perfor ance, and re/ularit. of Aob output' The nature of work perfor ed b. were clearl. directl. related to private respondent7s business of operatin/ barber shops' Respondent co pan. did not dispute that it owned and operated three !+$ barber shops' Eence, petitioners were not independent contractors' 4rivate respondent clai s it had no control over petitioners' The power to control refers to the e>istence of the power and not necessaril. to the actual e>ercise thereof, nor is it essential for the e plo.er to actuall. supervise the perfor ance of duties of the e plo.ee' 9t is enou/h that the e plo.er has the ri/ht to wield that power'%11& 3s to the Dcontrol testD, the followin/ facts indubitabl. reveal that respondent co pan. wielded control over the work perfor ance of petitioners, in thatB !1$ the. worked in the barber shop owned and operated b. the respondentsF !1$ the. were re@uired to report dail. and observe definite hours of workF !+$ the. were not free to accept other e plo. ent elsewhere but devoted their full ti e workin/ in the New Look :arber 0hop for all the fifteen !1,$ .ears the. have worked until 3pril 1,, 199,F !*$ that so e have worked with respondents as earl. as in the 196(7sF !,$ that petitioner 4atricia Nas was instructed b. the respondents to watch the other si> !6$ petitioners in their dail. task' Certainl., respondent co pan. was clothed with the power to dis iss an. or all of the for Aust and valid cause' 4etitioners were unar/uabl. perfor in/ work necessar. and desirable in the business of the respondent co pan.' Chile it is no lon/er true that e bership to 000 is predicated on the e>istence of an e plo.ee)e plo.er relationship since the polic. is now to encoura/e even the

self)e plo.ed dress akers, anicurists and Aeepne. drivers to beco e 000 e bers, we could not a/ree with private respondents that petitioners were re/istered with the 0ocial 0ecurit. 0.ste as their e plo.ees onl. as an acco odation' 3s we have earlier entioned private respondent showed no proof to their clai that petitioners were the ones who solel. paid all 000 contributions' 9t is unlikel. that respondents would report certain persons as their workers, pa. their 000 pre iu as well as their wa/es if it were not true that the. were indeed their e plo.ees'"inall., the labor arbiter a/ree that there was sufficient evidence that the barber shop was closed due to serious business losses and respondent co pan. closed its barber shop because the buildin/ where the barber shop was located was sold' 3n e plo.er a. adopt policies or chan/es or adAust ents in its operations to insure profit to itself or protect invest ent of its stockholders' 9n the e>ercise of such ana/e ent prero/ative, the e plo.er a. er/e or consolidate its business with another, or sell or dispose all or substantiall. all of its assets and properties which a. brin/ about the dis issal or ter ination of its e plo.ees in the process'

IN VI&) )'&R&O#, the petition is GR3NT8#' The public respondent7s #ecision dated October 17, 1996 and Resolution dated -arch (,, 1997 are 08T 309#8' 4rivate respondents are hereb. ordered to pa., severall. and Aointl., the seven !7$ petitioners their !1$ 1+th onth pa. and !1$ separation pa. e@uivalent to one onth pa. for ever. .ear of service, to be co puted at the then prevailin/ ini u wa/e at the ti e of their actual ter ination which was 3pril 1,, 199,' *ara+,i ot -! NLRC .199/0 2/1 SCRA 539

#AC$S" 4etitioner 3leAandro -ara/uinot, =r' aintains that private respondents e plo.ed hi as part of the fil in/ crewwith a salar. of 4+7,'(( per week' 3bout four onths later, he was desi/nated 3ssistant 8lectrician with a weekl.salar. of 4*(('((, which was increased to 4*,('((' Ee was pro oted to the rank of 8lectrician with a weekl. salar. of4*7,'((, which was increased to 4,+9'(('4etitioner 4aulino 8nero, on his part, clai s that private respondents e plo.ed hi in as a e ber of the shootin/crew with a weekl. salar. of 4+7,'((, which was increased to 4*1,'(( then to 4*7,'(('4etitioners7 tasks consisted of loadin/, unloadin/ and arran/in/ ovie e@uip ent in the shootin/ area as instructed b. the ca era an, returnin/ the e@uip ent to <iva "il s7 warehouse, assistin/ in the Dfi>in/D of the li/htin/ s.ste ,and perfor in/ other tasks that the ca era an andHor director a. assi/n'4etitioners sou/ht the assistance of their supervisors, -rs' 3leAandria Cesario, to facilitate their re@uest that privaterespondents adAust their salar. in accordance with the ini u wa/e law' 9n =une 1991, -rs' Cesario infor edpetitioners that -r' <ic del Rosario would a/ree to increase their salar. onl.

if the. si/ned a blank e plo. entcontract' 3s petitioners refused to si/n, private respondents forced 8nero to /o on leave in then refused to take hi back when he reported for work' -eanwhile, -ara/uinot was dropped fro the co pan. pa.roll fro 2 to 11 =une1991, but was returned on 11 =une 1991' Ee was a/ain asked to si/n a blank e plo. ent contract, and when he stillrefused, private respondents ter inated his services on 1( =ul. 1991' 4etitioners thus sued for ille/al dis issal'On the other hand, private respondents assert that the. contract persons called DproducersD also referred to asDassociate producersD 2 to DproduceD or ake ovies for private respondentsF and contend that petitioners areproAect e plo.ees of the association producers who, in turn, act as independent contractors' 3s such, there is noe plo.er)e plo.ee relationship between petitioners and private respondents' ISS%&" Chether or not an e plo.er)e plo.ee relationship e>isted between petitioners and private respondents or an. one ofprivate respondents' '&L(" 3ssu in/ that the associate producers are Aob contractors, the. ust then be en/a/ed in the business of akin/ otion pictures' 3s such, and to be a Aob contractor under the precedin/ description, associate producers ust have tools, e@uip ent, achiner., work pre ises, and other aterials necessar. to ake otion pictures'Eowever, the associate producers here have none of these' 4rivate respondents7 evidence reveals that the ovie) akin/ e@uip ent are supplied to the producers and owned b. <9<3' These include /enerators, cables and woodenplatfor s, ca eras and Dshootin/ e@uip entFD in fact, <9<3 likewise owns the trucks used to transport thee@uip ent' 9t is thus clear that the associate producer erel. leases the e@uip ent fro <9<3'9f private respondents insist that the associate producers are labor contractors, then these producers can onl. beDlabor)onl.D contractors' 3s labor)onl. contractin/ is prohibited, the law considers the person or entit. en/a/ed inthe sa e a ere a/ent or inter ediar. of the direct e plo.er' :ut even b. the precedin/ standards, the associateproducers of <9<3 cannot be considered labor)onl. contractors as the. did not suppl., recruit nor hire the workers'9n the instant case, it was =uanita Cesario, 0hootin/ ?nit 0upervisor and an e plo.ee of <9<3, who recruited crew e bers fro an Davailable /roup of free) lance workers which includes the co plainants -ara/uinot and 8nero'D 1*3nd in their -e orandu , private respondents declared that the associate producer Dhires the services of ' ' ' 6$ca era crew which includes !a$ ca era anF !b$ the utilit. crewF !c$ the technical staffF !d$ /enerator an andelectricianF !e$ clapperF etc' ' ' ' 'D 1, This clearl. showed that the associate producers did not suppl. the workersre@uired b. the ovie proAect'The relationship between <9<3 and its producers or associate producers see s to be that of a/enc., as the latter ake ovies on behalf of <9<3, whose business is to D akeD ovies' 3s such, the

e plo. ent relationship betweenpetitioners and producers is actuall. one between petitioners and <9<3, with the latter bein/ the direct e plo.er'The e plo.er) e plo.ee relationship between petitioners and <9<3 can further be established b. the Dcontrol test'DThese four ele ents are present here'<9<37s control is evident in its andate that the end result ust be a D@ualit. fil acceptable to the co pan.'D The eans and ethods to acco plish the result are likewise controlled b. <9<3, vi6', the ovie proAect ust befinished within schedule without e>ceedin/ the bud/et, and additional e>penses ust be AustifiedF certain scenes aresubAect to chan/e to suit the taste of the co pan.F and the 0upervisin/ 4roducer, the De.es and earsD of <9<3 and delRosario, intervenes in the ovie) akin/ process b. assistin/ the associate producer in solvin/ proble s encounteredin akin/ the fil '9t a. not be validl. ar/ued then that petitioners are actuall. subAect to the ovie director7s control, and not <9<37sdirection' The director erel. instructs petitioners on how to better co pl. with <9<37s re@uire ents to ensure thata @ualit. fil is co pleted within schedule and without e>ceedin/ the bud/et' 3t botto , the director is akin to asupervisor who erel. oversees the activities of rank)and)file e plo.ees with control ulti atel. restin/ on thee plo.er'-oreover, appoint ent slips 12 issued to all crew e bers stateB #urin/ the ter of this appoint ent .ou shallco pl. with the duties and responsibilities of .our position as well as observe the rules and re/ulations pro ul/ated b. .our superiors and b. Top -ana/e ent'The words DsupervisorsD and DTop -ana/e entD can onl. refer to the DsupervisorsD and DTop -ana/e entD of <9<3':. co andin/ crew e bers to observe the rules and re/ulations pro ul/ated b. <9<3, the appoint ent slipsonl. e phasi6e <9<37s control over petitioners'3side fro control, the ele ent of selection and en/a/e ent is likewise present in the instant case and e>ercised b.<9<3' Notabl., nowhere in the appoint ent slip does it appear that it was the producer or associate producer whohired the crew e bersF oreover, it is <9<37s corporate na e which appears on the headin/ of the appoint ent slip' Chat likewise tells a/ainst <9<3 is that it paid petitioners7 salaries as evidenced b. vouchers, containin/ <9<37sletterhead, for that purpose' 3ll the circu stances indicate an e plo. ent relationship between petitioners and<9<3 alone, thus the inevitable conclusion is that petitioners are e plo.ees onl. of <9<3'