Thursday, February 23, 2012

Tabas vs. California Manufacturing Company Inc., [G.R. No. L-80680, 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 employer-employee relation between the petitioners and the company and impleaded Livi Manpower Services, Inc. as a party-respondent. 

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 to employment of labor" and that "California is free and harmless from any liability arising from such laws or from any accident that may befall workers and employees of Livi while in the performance of their duties for California. 

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 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. 

Issue: Whether or not there exist an employee-employer relationship between petitioners and California Manufacturing Company

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 employer-employee 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. 

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

The fact that the petitioners have allegedly admitted being Livi's "direct employees" in their complaints is nothing conclusive. For one thing, the fact that the petitioners were (are), will not absolve California since liability has been imposed by legal operation. For another, and as the court indicated, the relations of parties must be judged from case to case and the decree of law, and not by declarations of parties. 

In the case at bar, Livi is admittedly an "independent contractor providing temporary services of manpower to its client. " When it thus provided California with manpower, it supplied California with personnel, as if such personnel had been directly hired by California. Hence, Article 106 of the Code applies. 

The Court need not therefore consider whether it is Livi or California which exercises control over the petitioner vis-a-vis the four barometers referred to earlier, since by fiction of law, either or both shoulder responsibility. 

The records show that the petitioners bad been given an initial six-month contract, renewed for another six months. Accordingly, under Article 281 of the Code, they had become regular employees-of-California-and had acquired a secure tenure. Hence, they cannot be separated without due process of law. 

The court reiterate that the petitioners are its employees and who, by virtue of the required one-year length-of-service, have acquired a regular status.

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