VOL.

307,MAY17,1999

131

CocaColaBottlersPhils.,Inc.vs.NLRC
*

G.R.No.120466.May17,1999.

COCA COLA BOTTLERS PHILS., INC., petitioner, vs.

NATIONAL LABOR RELATIONS COMMISSION and RAMON
B.CANONICATO,respondents.
Labor Law Administrative Law Findings of fact of administrative
offices are generally accorded respect.We find good cause to sustain
petitioner. Findings of fact of administrative offices are generally accorded
respect by us and no longer reviewed for the reason that such factual
findings are considered to be within their field of expertise. Exception
however is made, as in this case, when the NLRC and the Labor Arbiter
madecontradictoryfindings.
SameEmployerEmployeeRelationshipEvidenceCourttakesjudicial
noticeofthepracticeadoptedinseveralgovernmentandprivateinstitutions
and industries of hiring janitorial services on an independent contractor
basis Although janitorial services may be considered directly related to
theprincipalbusinessofanemployer,courtdeemedthemunnecessaryinthe
conductoftheemployersprincipalbusiness.Weperceiveattheoutsetthe
dispositionoftheNLRCthatjanitorialservicesarenecessaryanddesirable
tothetradeorbusinessofpetitionerCOCACOLA.Butthisisinconsistent
with our pronouncement in Kimberly Independent Labor Union v.
DrilonwheretheCourttookjudicialnoticeofthepracticeadoptedinseveral
government and private institutions and industries of hiring janitorial
services on an independent contractor basis. In this respect, although
janitorial services may be considered directly related to the principal
business of an employer, as with every business, we deemed them
unnecessaryintheconductoftheemployersprincipalbusiness.
SameSameSameThejudicialnoticerestsontheassumptionthatthe
independentcontractorisalegitimatejobcontractorsothattherecanbeno
doubt as to the existence of an employeremployee relationship between the
contractor and the worker.This judicial notice, of course, rests on the
assumption that the independent contractor is a legitimate job contractor so
that there can be no doubt as to the existence of an employeremployee

relationship
______________
*SECONDDIVISION.

132

132

SUPREMECOURTREPORTSANNOTATED
CocaColaBottlersPhils.,Inc.vs.NLRC

between the contractor and the worker. In this situation, the only pertinent
question that may arise will no longer deal with whether there exists an
employment bond but whether the employee may be considered regular or
casualastodeservetheapplicationofArt.280oftheLaborCode.

SPECIALCIVILACTIONintheSupremeCourt.Certiorari.
ThefactsarestatedintheopinionoftheCourt.
Valencia, Ciocon, Dabao, Valencia, De la Paz, Dionela,
RavinaandPandanLawOfficesforpetitioner.
JoseMaxS.Ortizforprivaterespondent.
BELLOSILLO,J.:
This petition for certiorari under Rule 65 of
the Revised Rules of
1
Court assails the 3 January 1995 decision of the National Labor
Relations Commission (NLRC) holding that private respondent
RamonB.CanonicatoisaregularemployeeofpetitionerCocaCola
Bottlers Phils., Inc. (COCA COLA) entitled to reinstatement and
backwages.TheNLRCreversedthedecisionoftheLaborArbiter
2
of 28 April 1994 which declared that no employeremployee
relationshipexistedbetweenCOCACOLAandCanonicatothereby
foreclosingentitlementtoreinstatementandbackwages.
On 7 April 1986 COCA COLA entered into a contract of
janitorial 3 services with Bacolod Janitorial Services (BJS)
stipulating amongothers
______________
1 Decision penned by Commissioner Amorito Canete, concurred in by Presiding

CommissionerIreneaE.CenizaandCommissionerBernabeS.Batuhan,NLRCCebu

City,FourthDivision,Rollo,pp.5458.
2

Decision penned by Labor Arbiter Ray Allan T. Drilon, NLRC Regional

ArbitrationBranchNo.VI,BacolodCity,id.,pp.2851.
3Records,pp.334336.

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VOL.307,MAY17,1999

133

CocaColaBottlersPhils.,Inc.vs.NLRC
That the First Party (COCA COLA) desires to engage the services of the
Second Party (BJS), as an Independent Contractor, to perform and provide
for the maintenance, sanitation and cleaning services for the areas
hereinbelowmentioned,alllocatedwithintheaforesaidbuildingoftheFirst
Partyxxxx
1. The scope of work of the Second Party includes all floors, walls,
doors, vertical and horizontal areas, ceiling, all windows, glass
surfaces, partitions, furniture, fixtures and other interiors within
theaforestatedcoveredareas.
2. Except holidays which are rest days, the Second Party will
undertake daily the following: 1) Sweeping, dampmopping, spot
scrubbing and polishing of floors 2) Cleaning, sanitizing and
disinfecting agents to be used on commodes, urinals and
washbasins, water spots on chrome and other fixtures to be
checked 3) Cleaning of glass surfaces, windows and glass
partitions that require daily attention 4) Cleaning and dusting of
horizontal and vertical surfaces 5) Cleaning of fixtures, counters,
panels and sills 6) Clean, pickup cigarette butts from sandburns
and ashtrays and trash receptacles 7) Trash and rubbish disposal
andburning.
In addition, the Second Party will also do the following once a
week, to wit: 1) Cleaning, waxing and polishing of lobbies and
offices 2) Washing of windows, glasses that require cleaning 3)
Thoroughdisinfectingandcleaningoftoiletsandwashrooms.
3. The Second Party shall supply the necessary utensils, equipment
andsupervision,anditshallonlyemploytheservicesoffifteen(15)
honest, reliable, carefully screened, cooperative and trained
personnel, who are in good faith, in the performance of its herein
undertakingxxxx
4. The Second Party hereby guarantees against unsatisfactory
workmanship. Minor repair of comfort rooms are free of charge
providedtheFirstPartywillsupplythenecessarymaterialsforsuch
repairsatitsexpense.Asmaybenecessary,theSecondPartyshall

also report on such part or areas of the premises covered by this

contractwhichmayrequirerepairsfromtimetotimexxx(italics
supplied).
134

134

SUPREMECOURTREPORTSANNOTATED
CocaColaBottlersPhils.,Inc.vs.NLRC

Everyyearthereafteraservicecontractwasenteredintobetweenthe
4
partiesundersimilartermsandconditionsuntilaboutMay1994.
On 26 October 1989 COCA COLA hired private respondent
Ramon Canonicato as a casual employee and assigned him to the
bottling crew as a substitute for absent employees. In April 1990
COCA COLA terminated Canonicatos casual employment. Later
that year COCA COLA availed of Canonicatos services, this time
asapainterincontractualprojectswhichlastedfromfifteen(15)to
5
thirty(30)days.
6
On1April1991CanonicatowashiredasajanitorbyBJS which
assigned him to COCA COLA considering his familiarity with its
premises. On 5 and 7 March 1992 Canonicato started painting the
facilities of COCA COLA and continued doing so several months
7
thereafterorsoforafewdayseverytimeuntil6to25June1993.
Goaded by information that COCA COLA employed previous
BJS employees who filed a complaint against the company
for
8
regularization pursuant to a compromise agreement, Canonicato
submitted a similar complaint
against COCA COLA to the Labor
9
Arbiteron8June1993. ThecomplaintwasdocketedasRABCase
No.06061033793.
Without notifying BJS, Canonicato no longer reported to his
COCA COLA assignment starting 29 June 1993. On 15 July 1993
hesenthissisterRowenatocollecthissalaryfrom
______________
4Id.,pp.3537,331333.
5Projectswerecontractedon3August1631,1990September115&1530,1990

October115&1631,1990Records,pp.182184.
6Records,pp.3839.
7Paintingjobsweredoneon2729March199219,22and29August19925,12,

28and29September19923,11and31October199214December199210,1720
January199316,20and27February19936,10,1517,19and20March1995and1,
9and14May1993Records,pp.185232.
8Records,pp.3839.

9Id.,p.1.

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VOL.307,MAY17,1999

135

CocaColaBottlersPhils.,Inc.vs.NLRC
10

BJS. BJSreleasedhissalarybutadvisedRowenatotellCanonicato
to report for work. Claiming that he was barred from entering the
premisesofCOCACOLAoneither14or15July1993,Canonicato
met with the proprietress of BJS, Gloria Lacson, who
offered him
11
assignmentsinotherfirmswhichhehoweverrefused.
On 23 July 1993 Canonicato amended his complaint against
COCACOLAbycitinginsteadasgroundsthereforillegaldismissal
and underpayment
of wages. He included BJS therein as a co
12
respondent. On 28 September 1993 BJS sent him a letter advising
himtoreportforworkwithinthree(3)daysfromreceipt,otherwise,
13
hewouldbeconsideredtohaveabandonedhisjob.
On28April1994theLaborArbiterruledthat:(a)therewasno
employeremployeerelationshipbetweenCOCACOLAandRamon
Canonicato because BJS was Canonicatos real employer (b) BJS
wasalegitimatejobcontractor,hence,anyliabilityofCOCACOLA
as to Canonicatos salary or wage differentials was solidary with
BJSinaccordancewithpars.1and2ofArt.106,LaborCode(c)
COCA COLA and BJS must jointly and severally pay Canonicato
his wage differentials amounting to P2,776.80 and his 13th month
salary of P1,068.00, including ten (10%) percent attorneys fees in
the sum of P384.48. The Labor Arbiter also ordered that all other
claimsbyCanonicatoagainstCOCACOLAbedismissedforlackof
employeremployee relationship that the complaint for illegal
dismissal as well as all the other claims be likewise dismissed for
lack of merit and that COCA COLA and BJS deposit P4,429.28
with the Department of Labor Regional Arbitration
Branch Office
14
withinten(10)daysfromreceiptofthedecision.
______________
10Id.,p.54.
11Id.,p.71.
12Id.,p.5.
13Id.,p.56.
14SeeNote2,pp.5051.

136

136

SUPREMECOURTREPORTSANNOTATED
CocaColaBottlersPhils.,Inc.vs.NLRC

TheNLRCrejectedonappealthedecisionoftheLaborArbiteron
the ground that the janitorial services of Canonicato were found to
be necessary or desirable in the usual business or trade of COCA
COLA.TheNLRCacceptedCanonicatospropositionthathiswork
with the BJS was the same as what he did while still a casual
employee of COCA COLA. In so holding the NLRC applied Art.
280oftheLaborCodeanddeclaredthatCanonicatowasaregular
employee of COCA COLA and entitled
to reinstatement and
15
paymentofP18,105.10inbackwages.
On26May1995theNLRCdeniedCOCACOLAsmotionfor
16
reconsiderationforlackofmerit. Hence,thispetition,assigningas
errors: (a) NLRCs finding that janitorial services were necessary
and desirable in COCA COLAs trade and business (b) NLRCs
applicationofArt.280oftheLaborCodeinresolvingtheissueof
whetheranemploymentrelationshipexistedbetweentheparties(c)
NLRCs ruling that there was an employeremployee relationship
betweenpetitionerandCanonicatodespiteitsvirtualaffirmancethat
BJS was a legitimate job contractor (d) NLRCs declaration that
Canonicato was a regular employee of petitioner although he had
rendered the company only five (5) months of casual employment
and,(e)NLRCsorderdirectingthereinstatementofCanonicatoand
17
thepaymenttohimofsix(6)monthsbackwages.
We find good cause to sustain petitioner. Findings of fact of
administrative offices are generally accorded respect by us and no
longer reviewed for the reason that such factual findings are
consideredtobewithintheirfieldofexpertise.Exceptionhowever
ismade,asinthiscase,whentheNLRCandtheLaborArbitermade
contradictoryfindings.
We perceive at the outset the disposition of the NLRC that
janitorial services are necessary and desirable to the trade or
businessofpetitionerCOCACOLA.Butthisisinconsistent
______________
15SeeNote1.
16NLRCResolutionissuedbysameDivision,Rollo,pp.6872.
17Petition,pp.1221,id.,pp.1322.

137

VOL.307,MAY17,1999

137

CocaColaBottlersPhils.,Inc.vs.NLRC

with our
pronouncement in Kimberly Independent Labor Union v.
18
Drilon wheretheCourttookjudicialnoticeofthepracticeadopted
in several government and private institutions and industries of
hiring janitorial services on an independent contractor basis. In
thisrespect,althoughjanitorialservicesmaybeconsidereddirectly
related to the principal business of an employer, as with every
business, we deemed them 19unnecessary in the conduct of the
employersprincipalbusiness.
This judicial notice, of course, rests on the assumption that the
independent contractor is a legitimate job contractor so that there
can be no doubt as to the existence of an employeremployee
relationshipbetweenthecontractorandtheworker.Inthissituation,
the only pertinent question that may arise will no longer deal with
whetherthereexistsanemploymentbondbutwhethertheemployee
maybeconsideredregularorcasualastodeservetheapplicationof
Art.280oftheLaborCode.
Itisanaltogetherdifferentmatterwhentheveryexistenceofan
employmentrelationshipisinquestion.Thiswastheissuegenerated
by Canonicatos application for regularization of his employment
with COCA COLA and the subsequent denial by the latter of an
employeremployee relationship with the applicant. It was error
therefore for the NLRC to apply Art. 280 of the Labor Code in
determining the existence of an employment relationship of the
parties herein, especially in light of20 our explicit holding in Singer
SewingMachineCompanyv.Drilon that
x x x x [t]he definition that regular employees are those who perform
activitieswhicharedesirableandnecessaryforthebusinessoftheemployer
isnotdeterminativeinthiscase.Anyagree
_______________
18G.R.No.78791,9May1990,185SCRA191seealsoRhonePoulencAgrochemicals

Phils.,Inc.v.NLRC,G.R.Nos.10263335,19January1993,217SCRA249.
19Neriv.NLRC,G.R.Nos.9700809,23July1993,224SCRA717.
20G.R.No.91307,24January1991,193SCRA270,279.

138

138

SUPREMECOURTREPORTSANNOTATED
CocaColaBottlersPhils.,Inc.vs.NLRC

ment may provide that one party shall render services for and in behalf of

another for a consideration (no matter how necessary for the latters
business)evenwithoutbeinghiredasanemployee.Thisispreciselytruein
thecaseofanindependentcontractorshipaswellasinanagencyagreement.
The Court agrees with the petitioners argument that Article 280 is not the
yardstick for determining the existence of an employment relationship
becauseitmerelydistinguishesbetweentwokindsofemployees,i.e.,regular
employeesandcasualemployees,forpurposesofdeterminingtherightofan
employeetocertainbenefits,tojoinorformaunion,ortosecurityoftenure.
Article 280 does not apply where the existence of an employment
relationshipisindispute.

In determining the existence of an employeremployee relationship

it is necessary to determine whether the following factors are
present: (a) the selection and engagement of the employee (b) the
payment of wages (c) the power
to dismiss and, (d) the power to
21
controltheemployeesconduct. Notably,theseareallfoundinthe
relationship between BJS and Canonicato and not between
Canonicato22 and petitioner COCA COLA. As the SolicitorGeneral
manifested
Intheinstantcase,theselectionandengagementofthejanitorsforpetitioner
were done by BJS. The application form and letter submitted by private
respondent (Canonicato) to BJS show that he acknowledged the fact that it
wasBJSwhodidthehiringandnotpetitionerxxxx
BJS paid the wages of private respondent, as evidenced by the fact that
on July 15, 1993, private respondent sent his sister to BJS with a note
authorizinghertoreceivehispay.
Power of dismissal is also exercised by BJS and not petitioner. BJS is
theonethatassignsthejanitorstoitsclientsandtransfersthemwhenitsees
fit.SinceBJSistheonewhoengagestheirservices,thenitonlyfollowsthat
it also has the power to dismiss them when justified under the
circumstances.
______________
21PhilippineAirlines,Inc.v.NLRC,G.R.No.120506,28October1996,263SCRA638.
22ManifestationandMotionInLieuofComment,Rollo,pp.112114.

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VOL.307,MAY17,1999

139

CocaColaBottlersPhils.,Inc.vs.NLRC

Lastly, BJS has the power to control the conduct of the janitors. The
supervisors of petitioner, being interested in the result of the work of the
janitors,alsogivesuggestionsastotheperformanceofthejanitors,butthis

doesnotmeanthatBJShasnocontroloverthem.Theinterestofpetitioner
is only with respect to the result of their work. On the other hand, BJS
overseesthetotalityoftheirperformance.

Thepoweroftheemployertocontroltheworkoftheemployeeis
saidtobethemostsignificantdeterminant.Canonicatodisputedthis
power of BJS over him by asserting that his employment with
COCACOLAwasnotinterruptedbyhisapplicationwithBJSsince
his duties before and after he applied for regularization were the
same,involvingastheydid,workinginthemaintenancedepartment
and doing painting tasks within its facilities. Canonicato cited the
Labor Utilization Reports of COCA COLA showing his painting
assignments.Thesereports,however,arenotexpressiveofthetrue
nature of the relationship between Canonicato and COCA COLA
neither do they detract from the fact that BJS exercised real
authorityoverCanonicatoasitsemployee.
Moreover, a closer scrutiny of the reports reveals that the
paintingjobswereperformedbyCanonicatosporadically,eitherina
23
fewdayswithinamonthandonlyforafewmonthsinayear. This
infrequencyorirregularityofassignmentscountervailsCanonicatos
submissionthathewasassignedspecificallytoundertakethetaskof
painting the whole year round. If anything, it hews closely to the
assertionofBJSthatitassignedCanonicatotothesejobstomaintain
andsanitizethepremisesofpetitionerCOCACOLApursuanttoits
24
contractofserviceswiththecompany.
It is clear from these established circumstances that NLRC
shouldhaverecognizedBJSastheemployerofCanonicatoandnot
COCACOLA.Thisisdemandedbythefactthatitdidnotdisturb,
and therefore it upheld, the finding of the Labor Arbiter that BJS
wastrulyalegitimatejobcontractorand
______________
23SeeNote7.
24SeeNote3.

140

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SUPREMECOURTREPORTSANNOTATED
CocaColaBottlersPhils.,Inc.vs.NLRC

could by itself hire its own employees.TheCommission couldnot

have reached any other legitimate conclusion considering that BJS
satisfied all the requirements of a jobcontractor under the law,
namely, (a) the ability to carry on an independent business and

undertake the contract work on its own account under its own
responsibility according to its own manner and method, free from
the control and direction of its principal or client in all matters
connectedwiththeperformanceoftheworkexceptastotheresults
thereofand,(b)thesubstantialcapitalorinvestmentintheformof
tools, equipment, machinery, work premises, and
other materials
25
whicharenecessaryintheconductofitsbusiness.
ItistobenotedthatCOCACOLAisnottheonlyclientofBJS
which has its roster of clients like San Miguel Corporation,
Distileria Bago Incorporated, University of Negros Occidental
Recolletos, University of St. La Salle, Riverside College, College
Assurance Plan26 Phil., Inc., and Negros Consolidated Farmers
Association,Inc. ThisisproofenoughthatBJShasthecapabilityto
carry on its business of janitorial services with big establishments
aside from petitioner
and has sufficient capital or materials
27
necessary therefor. All told, there being no employeremployee
relationship between Canonicato and COCA COLA, the latter
cannotbevalidlyorderedtoreinstatetheformerandpayhimback
wages.
WHEREFORE,thepetitionisGRANTED.TheNLRCdecision
of 3 January 1995 declaring Ramon B. Canonicato a regular
employee of petitioner Coca Cola Bottlers Phils., Inc., entitled to
reinstatementandbackwagesisREVERSEDandSETASIDE.The
decisionoftheLaborArbiterof28April1994findingnoemployer
employeerelationshipbetweenpetitionerandprivaterespondentbut
directing petitioner Coca Cola Bottlers Phils., Inc., instead and
BacolodJanitorial
______________
25Nagusarav.NLRC,G.R.Nos.11793637,290SCRA245,20May1998.
26BJSAdvertisementontheOccasionofits29thAnniversary,Rollo,p.220.
27Records,pp.100110.

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VOL.307,MAY18,1999

141

Gabisayvs.NationalLaborRelationsCommission

Services to pay jointly and severally Ramon B. Canonicato

P2,776.80 as wage differentials, P1,068.00 as 13th month pay and
P384.48asattorneysfees,isREINSTATED.
SOORDERED.
Puno,MendozaandQuisumbing,JJ.,concur.

Buena,J.,Onleave.
Petitiongranted,judgmentreversedandsetaside.
Note.An employeremployee relation is created by contract,
andcannotbeforceduponeitherpartysimplyupontheorderofthe
arbiter. (Yu vs. National Labor Relations Commission, 245 SCRA
134[1995])
o0o

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