BROTHERHOOD LABOR UNITY MOVEMENT

vs HON. ZAMORA (1991)

FACTS:

Petitioners-members of Brotherhood Labor Unit

Movement of the Philippines (BLUM), worked as
cargadores or pahinante since 1961 at the SMC Plant.
Sometime in January 1969, the petitioner workers
numbering 140 organized themselves and engaged in
union activities.
Believing that they are entitled to overtime and
holiday pay, the petitioners aired their gripes and
grievances but it was not heeded by the respondents.
One of the union member was dismissed from work.
Hence, the petitioners filed a complaint of unfair labor
practice against respondent SMC on the ground of illegal
dismissal.
On the other hand, SMC argued that the complainant
are not or have never been their employees but they are
the employees of the Guaranteed Labor Contractor, an
independent labor contracting firm
Labor Arbiter Nestor Lim rendered a decision in favor
of the complainants which was affirmed by the NLRC
On appeal, the Secretary set aside the NLRC ruling
stressing the absence of an employer-employee
relationship

Issue: Whether an employer-employee relationship exists

between petitioners and respondent San Miguel Corporation
HELD: YES
In determining the existence of an employer-employee
relationship, the elements that are generally considered are
the following: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the
employee with respect to the means and methods by which
the work is to be accomplished. It is the called "control test"
that is the most important element

In the CAB, petitioners worked continuously and exclusively

for an average of 7 years for the company. Considering the
length of time that the petitioners have worked, there is
justification to conclude that they were engaged to perform
activities necessary or desirable in the usual business of
trade of the respondent. Hence, petitioners are considered
regular employees.
Even assuming that there is a contract of employment
executed between SMC and the said labor contractor, the
court ruled that Guaranteed and Reliable Labor contractors
have neither substantial capital nor investment to qualify as
an independent contractor under the law. The premises, tools
and equipments used by the petitioners in their jobs are all
supplied by the respondent SMC. It is only the manpower or
labor force which the alleged contractors supply, suggesting
the existence of a "labor only" contracting scheme prohibited
by law
It is important to emphasize that that in a truly independent
contractor-contractee relationship, the fees are paid directly
to the manpower agency in lump sum without indicating or
implying that the basis of such lump sum is the salary per
worker multiplied by the number of workers assigned to the
company.
In the CAB, the alleged independent contractors were
paid a lump sum representing only the salaries the workers
were entitled to, arrived at by adding the salaries of each
worker which depend on the volume of work they had
accomplished individually. Therefore, there is no
independent contractor-contractee relationship.
WHEREFORE, PETITION IS GRANTED.

Tabas vs. California Manufacturing Company Inc., G.R. No. L80680, January 26, 1989]
Facts: The petitioners petitioned the National Labor Relations Commission
for reinstatement and payment of various benefits, including minimum
wage, overtime pay, holiday pay, thirteen-month pay, and emergency cost
of

living allowance pay,

against

the

respondent,

the

California

Manufacturing Company. California denied the existence of an employeremployee

relation

between

the

petitioners

and

the

company

California at cost "; and that "payroll for the preceding week shall be
delivered by Livi at California's premises."
The petitioners were then made to sign employment contracts with
durations of six months, upon the expiration of which they signed new
agreements with the same period. Pending proceeding they were notified
by California that they would not be rehired. As a result, they filed an
amended complaint charging California with illegal dismissal.

and

impleaded Livi Manpower Services, Inc. as a party-respondent.

Issue: Whether or not there exist an employee-employer relationship

between petitioners and California Manufacturing Company

Petitioners were assigned to work as "promotional merchandisers" for

California pursuant to a manpower supply agreement. The agreement
provided that California "has no control or supervisions whatsoever over
Livi's workers with respect to how they accomplish their work or perform
California's obligation"; the Livi "is an independent contractor and nothing
herein contained shall be construed as creating between California and Livi
. . . the relationship of principal-agent or employer-employee'; that "it is
hereby agreed that it is the sole responsibility of Livi to comply with all
existing

as

well

as

future

laws,

rules

and

regulations

pertinent

toemployment of labor" and that "California is free and harmless from any
liability arising from such laws or from any accident that may befall

Held: Yes. The existence of an employer-employees relation is a question

of law and being such, it cannot be made the subject of agreement.
Hence, the fact that the manpower supply agreement between Livi and
California had specifically designated the former as the petitioners'
employer and had absolved the latter from any liability as an employer, will
not erase either party's obligations as an employer, if an employeremployee relation otherwise exists between the workers and either firm. At
any rate, since the agreement was between Livi and California, they alone
are bound by it, and the petitioners cannot be made to suffer from its
adverse consequences.

workers and employees of Livi while in the performance of their duties for
California.

The Court has consistently ruled that the determination of whether or not
there is an employer-employee relation depends upon four standards: (1)

It was further expressly stipulated that the assignment of workers to

California shall be on a "seasonal and contractual basis"; that "cost of
living allowance and the 10 legal holidays will be charged directly to

the manner of selection and engagement of the putative employee; (2) the
mode of payment of wages; (3) the presence or absence of a power
of dismissal; and (4) the presence or absence of a power to control the

putative employee's conduct. Of the four, the right-of-control test has been
held to be the decisivefactor.

The Court need not therefore consider whether it is Livi or California which
exercises control over the petitioner vis-a-vis the fourbarometers referred

The fact that the petitioners have allegedly admitted being Livi's "direct

to earlier, since by fiction of law, either or both shoulder responsibility.

employees" in their complaints is nothing conclusive. For one thing, the

fact that the petitioners were (are), will not absolve California since liability

The records show that the petitioners bad been given an initial six-month

has been imposed by legal operation. For another, and as the court

contract, renewed for another six months. Accordingly, under Article 281

indicated, the relations of parties must be judged from case to case and

of the Code, they had become regular employees-of-California-and had

the decree of law, and not by declarations of parties.

acquired a secure tenure. Hence, they cannot be separated without due

process of law.

In the case at bar, Livi is admittedly an "independent contractor providing

temporary services of manpower to its client. " When it thus provided

The court reiterate that the petitioners are its employees and who, by

California with manpower, it supplied California with personnel, as if such

virtue of the required one-year length-of-service, have acquired a regular

personnel had been directly hired by California. Hence, Article 106 of the

status.

Code applies.