Sunday, October 16, 2011

Joeb M. Aliviado, et al. vs. Procter and Gamble Phils., Inc., et al., G.R. No. 160506, June 6, 2011.

Independent job contracting; required substantial capital. (J. Abad)

Petitioners assert that they are employees of P&G and that Promm-Gem and SAPS are merely labor-only contractors providing manpower services to P&G. There is “labor-only” contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In the instant case, the Supreme Court found that Promm-Gem has substantial investment which relates to the work to be performed. The financial statements show that it has authorized capital stock of P1 million and a substantial amount of paid-in capital and other assets to support its operations. Under the circumstances, Promm-Gem cannot be considered a labor-only contractor; it is in fact a legitimate independent contractor. On the other hand, the financial records of SAPS show that it has a paid-in capital of only P31,250.00. There is no other evidence presented to show how much its working capital and assets are. Furthermore, there is no showing of substantial investment in tools, equipment or other assets. Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to the principal business of P&G, SAPS is considered to be engaged in “labor-only contracting”

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