PUREFOODS
CORPORATION (now G.R. No. 172241
SAN MIGUEL PUREFOODS
COMPANY, INC.), Present:
Petitioner,
QUISUMBING,
J.,
Chairperson,
CARPIO
MORALES,
- versus
- TINGA,
VELASCO,
JR., and
BRION,
JJ.
NATIONAL LABOR RELATIONS Promulgated:
COMMISSION (2nd
Division) and
LOLITA NERI,
Respondents.
x----------------------------------------------------------------------------x
Tinga,
J.:
This
is a Petition for Review of the Decision[1]
and Resolution[2] of the Court of Appeals dated
The
antecedents follow.
On
The
case was remanded to Labor Arbiter Felipe P. Pati, who, after finding that Neri
is not an employee of petitioner, but rather of D.L. Admark, an independent
labor contractor, dismissed the complaint on
The
Court of Appeals, relying on the case of Escario
v. NLRC,[16] held that D.L. Admark is a legitimate
independent contractor. However, it
ruled that complainants are regular employees of Purefoods.[17] Citing
Art. 280 of the Labor Code, the appellate
court found that complainants were
engaged to perform activities which are
usually necessary or desirable in the usual business or trade of Purefoods, and
that they were under the control and supervision of Purefoods’ supervisors, and
not of D.L. Admark’s. It noted that in the Promotions Agreements between D.L. Admark
and Purefoods, there was no mention of the list of D.L. Admark employees who will handle particular promotions for
petitioner, and that complainants’ periods of employment are not fully covered
by the Promotions Agreements.[18]
The
Court of Appeals pointed out that Purefoods did not present any evidence to
support its claim that complainants were employees of D.L. Admark. It likewise failed to implead D.L. Admark, or
even present a representative of D.L. Admark who could testify in its favor.[19] Finally,
the Court of Appeals ruled that Neri was illegally dismissed, as there was no
valid and just cause for terminating her employment and she was not given the
requisite notice and hearing.[20]
Purefoods
sought reconsideration[21]
of the decision but its motion was denied on
In
the present petition for review,[23] Purefoods
argues that the affidavits it attached to its motion for reconsideration before
the Court of Appeals are not evidence presented for the first time, but rather just
corroboration, clarification, and/or explanation of what it had advanced in the
proceedings below. It likewise claims
that the other complainants in this case are not entitled to the avails of the
suit because they failed to verify the position paper and the memorandum on
appeal. Purefoods maintains that Neri
and the complainants are not employees of Purefoods, but of D.L. Admark, an
independent job contractor. Thus, it cannot be held liable for illegal
dismissal. Finally, it claims that
Article 280 of the Labor Code is not applicable in a trilateral relationship
involving a principal, an independent job contractor, and the latter’s
employees.[24]
This simple issue of determining
employer-employee relationship between Purefoods and the complainants has been given
differing answers by the lower tribunals,
so much so that the Court
will have to
look into the factual matters involved.
Deeply embedded in our jurisprudence is the rule that the findings of
facts of quasi-judicial bodies like the NLRC are accorded great respect and, at
times, even finality. There are,
however, exceptions, among which is when there is a conflict between the
factual findings of the NLRC and the Labor Arbiter.[25]
Accordingly, this Court must of necessity review the records to determine which
findings should be preferred as more conformable to the evidentiary facts.[26]
There is merit
in the petition.
The
Court agrees with Purefoods’ argument that Art. 280 of the Labor Code[27]
finds no application in a trilateral relationship involving a principal, an
independent job contractor, and the latter’s employees. Indeed, the Court has ruled that said provision
is not the yardstick for determining the existence of an employment
relationship because it merely distinguishes between two kinds of employees, i.e., regular employees and casual
employees, for purposes of determining the right of an employee to certain
benefits, to join or form a union, or to security of tenure; it does not apply
where the existence of an employment relationship is in dispute.[28] It is therefore erroneous on the part of the
Court of Appeals to rely on Art. 280 in determining whether an
employer-employee relationship exists between respondent Neri and Purefoods.
Permissible job contracting or subcontracting
refers to an arrangement whereby a principal agrees to put out or farm out with
the contractor or subcontractor the performance or completion of a specific job,
work or service within a definite or predetermined period regardless of whether
such job, work or service is to be performed or completed within or outside the
premises of the principal.[29] In
this arrangement, the following conditions must be met: (a) the contractor carries on a distinct and
independent business and undertakes the contract work on his account under his
own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with
the performance of his work except
as to the results thereof; (b) the contractor has substantial
capital or investment; and (c) the agreement between the principal and
contractor or subcontractor assures the contractual employees’ entitlement to
all labor and occupational safety and health standards, free exercise of the
right to self-organization, security of tenure, and social welfare benefits.[30]
To support its
position that respondent is not its employee, Purefoods relies on the following: (i) the Promotions
Agreements[31] it
entered into with D.L. Admark; (ii) Department Order No. 10 (Series of 1997)[32]
which defines legitimate contracting or subcontracting; and (iii) Escario
v. NLRC[33] wherein
the Court declared D.L. Admark as a legitimate labor contractor.
On the other hand, early on, Neri and
the rest of the complainants admitted that they worked for petitioner through D.L.
Admark.[34] However, they also averred that they were
under the control and supervision of petitioner’s employees—salesmen, poultry
sales managers, deli supervisors—who give them work orders and to whom they
submit weekly inventory reports and monthly competitive sales report. In
support of these statements, Neri appended several documents (various Identification
Cards, Certification from Rustan’s Supermarkets stating that respondent Neri is
from Purefoods, Memoranda to respondent Neri written
by a supervisor
from
Purefoods, letters from Purefoods area sales managers
introducing complainants as Purefoods Merchandisers).[35]
Purefoods, meanwhile, claims that these documents must be taken in the context
of the performance of the service contracted out—promotion of its products.[36]
In the first place, D.L. Admark’s
status as a legitimate independent contractor has already been established in Escario v. NLRC.[37] In the said case, complainants, through D.L.
Admark, worked as merchandisers for California Manufacturing Corporation (CMC).
They filed a case before the labor arbiter for the regularization of their
employment status with CMC, and while the case was pending, D.L. Admark sent
termination letters to complainants. The complainants thereafter amended their
complaint to include illegal dismissal.
The Court considered the following circumstances as tending to establish
D.L. Admark’s status as a legitimate job contractor:
1) The SEC registration certificate of D.L. Admark states that it is a firm engaged in promotional, advertising, marketing and merchandising activities.
2) The service contract between CMC and D.L. Admark clearly provides that the agreement is for the supply of sales promoting merchandising services rather than one of manpower placement.
3) D.L. Admark was actually engaged in several activities, such as advertising, publication, promotions, marketing and merchandising. It had several merchandising contracts with companies like Purefoods, Corona Supply, Nabisco Biscuits, and Licron. It was likewise engaged in the publication business as evidenced by its magazine the “Phenomenon.”
4) It had its own capital assets to carry out its
promotion business. It then had current
assets amounting to P6 million and is therefore a highly capitalized
venture. It had an authorized capital
stock of P500,000.00. It owned
several motor vehicles and other tools, materials and equipment to service its
clients. It paid rentals of P30,020
for the office space it occupied.[38]
Moreover, applying the four-fold test
used in determining employer-employee relationship, the Court found that: the
employees therein were selected and hired by D.L. Admark; D.L. Admark paid
their salaries, as evidenced by the payroll prepared by D.L. Admark and sample
contribution forms; D.L. Admark had the power of dismissal as it admitted that
it was the one who terminated the employment of the employees; and finally, it
was D.L. Admark who exercised control and supervision over the employees.[39]
Furthermore, it is evident from the Promotions
Agreements entered into by Purefoods that D.L. Admark is a legitimate labor
contractor. A sample agreement reads in part:
WHEREAS, The FIRST PARTY is engaged in the general promotion business;
WHEREAS, The SECOND PARTY will launch its “Handog sa Graduates” promotion project;
WHEREAS, The FIRST PARTY has offered its services to the SECOND PARTY, in connection with the said promotion project, and the latter has accepted the said offer;
NOW, THEREFORE, for and in consideration of the foregoing premises, and of the mutual convenience between them, the parties have agreed as follows:
1.
The FIRST PARTY shall handle and
implement the “Handog sa Graduates” promotion project of the SECOND PARTY, said
project to last from
2. The FIRST PARTY shall indemnify the SECOND PARTY for any loss or damage to the latter’s properties, if such loss or damage is due to the fault or negligence of the FIRST PARTY or its agents or employees.
3. There shall be no employer-employee relationship between the FIRST PARTY or its agents or employees and the SECOND PARTY.
4.
In consideration for the services to be
rendered by the FIRST PARTY to the SECOND PARTY, the latter shall pay the
former the amount of Two Million Six Hundred Fifty Two Thousand pesos only (P2,652,000.00)
payable as follows:
x x x[40]
The agreements confirm that D.L.
Admark is an independent contractor which Purefoods had engaged to supply general
promotion services, and not mere manpower services, to it. The provisions
expressly permit D.L. Admark to handle
and implement Purefoods’ project, and categorically state that there shall be
no employer-employee relationship between D.L. Admark’s employees and
Purefoods. While it may be true that complainants were required
to submit regular reports and were introduced as Purefoods merchandisers, these
are not enough to establish Purefoods’ control over them. Even if the report
requirements are somehow considered as control measures, they were imposed only
to ensure the effectiveness of the promotion services rendered by D.L. Admark. It would be a rare contract
of service that gives untrammelled freedom to the party hired and eschews any
intervention whatsoever in his performance of the engagement.[41] Indeed, it would be foolhardy for any company
to completely give the reins and totally ignore the operations it has contracted
out.
Significantly, the pieces of evidence
submitted by Neri do not support her claim of having been a regular employee of
Purefoods. We note that two “Statement
of Earnings and Deductions”[42]
were issued for the same period, December 1989, and in one “Statement,” someone deliberately erased the notation “January
1997,” thereby casting doubt on the authenticity
of the said documents. Even the identification cards[43]
presented by Neri are neither binding on Purefoods nor even indicative of her claimed
employee status of Purefoods, issued as they were by the supermarkets concerned
and not by Purefoods itself. Moreover,
the check voucher issued by Purefoods
marked “IN PAYMENT OF DL ADMARK DELI ATTENDANTS 12.00 PESOS ADJUSTMENT JAN 30,
1991 TO JUNE 22, 1992,”[44]
signed and received by Neri, is proof that Purefoods never considered Neri as
its own employee, but rather as one of
D.L. Admark’s deli attendants.
We also note that Neri herself
admitted in her Sinumpaang Salaysay
and in the hearings that she applied with D.L. Admark[45]
and that she worked for Purefoods through D.L. Admark.[46] Neri
was aware from the start that D.L. Admark was her employer and not Purefoods.
She had kept her contract with D.L. Admark, and inquired about her employment status with D.L. Admark. It was D.L. Admark,
as her employer, which had the final say in, and which actually effected, her termination.
Purefoods argues that the Court of
Appeals erred in denying the affidavits it attached to its motion for
reconsideration on the ground that these were presented for the first time, and
additionally states that the affidavits are just corroboration, clarification
and/or explanation of what it had already argued in its previous
pleadings. The point is not pivotal.[47]
After all, there is no need for such supporting affidavits. Purefoods had
already disputed the authenticity and veracity of the pieces of evidence
presented by Neri in the earlier proceedings, plausibly and successfully as it
turned out ultimately. Verily, this
Court earlier debunked the documents as not sufficient to establish the
purported employer-employee relationship.
On to another matter. We agree with Purefoods that it is only Neri
who could have been entitled to the avails of the suit, if at all. While there are twelve complainants in the
amended complaint, only seven (7) out of the twelve (12) had verified it.[48] Thereafter, when the case was remanded to the labor arbiter
for further proceedings, it was only Neri who verified the memorandum on
appeal. It was also only Neri who presented evidence and testified during the
hearings conducted by the labor arbiter. This is most evident in Neri’s Formal
Offer of Exhibits for Complainant[49] wherein the only pieces of evidence
offered were the position paper, her Sinumpaang
Salaysay, her signature, a copy of the Collective Bargaining Agreement, and
a computation of her claims.
Significantly, all of the
exhibits were offered to support
Neri’s claims only; there was no mention of the other complainants. It being very clear that it was only Neri who had participated in the
appeal and presented evidence, the NLRC erred in including the other
complainants as prevailing parties in its decision. Otherwise stated, considering
that it is only Neri who had appealed the case and participated in the
proceedings up to the present petition, it is only she who should be entitled
to the avails of this suit, if any should be due.
In
view of the foregoing, we hold that Neri is not an employee of Purefoods, but
that of D.L. Admark. In the absence of
employer-employee relations between Neri and Purefoods, the complaint for
illegal dismissal and other monetary claims must fail.
WHEREFORE, the Petition is GRANTED. The Decision and Resolution of the Court of
Appeals dated
and SET
ASIDE. Respondent Neris’ complaint
docketed as NLRC NCR Case No. 00-06-03149-92 is DISMISSED.
SO ORDERED.
DANTE O. TINGA
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
CONCHITA CARPIO MORALES PRESBITERO J.
VELASCO, JR.
Associate Justice Associate Justice
ARTURO D. BRION
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson,
Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1]Rollo, pp. 77-97; Penned by Associate
Justice Celia C. Librea-Leagogo, with
Associate Justices Renato C. Dacudao and Lucas P. Bersamin, concurring.
[6]NLRC
records, Vol. 1, p. 11; Felix Quinsanos, Marciano M. Bane, Emeterio Dizon, Jr.,
Ronaldo Caduboy, Solores Marange, Jose Alvin Javier, Ferdie Cruz, Isabel
Agapulco, Petronila Saculo, Ferdinand Leonardo and Claudine C. Guevarra. Amended Complaint.
[7]The
complaint also asks for the additional relief of full backwages from the time
of Neri’s dismissal up to the date of actual reinstatement. Amended Complaint;
id.
[27]Art.
280. Regular and Casual Employment.—The
provisions of written agreement to the contrary notwithstanding and regardless
of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for the duration of the
season.
An
employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any
employee who has rendered at least one (1) year of service, whether such
service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall
continue while such activity exists.
[29]Acevedo v. Advanstar Company, Inc., G.R.
No. 157656, 11 November 2005, 474 SCRA 656, 667; See also Section 6 of Department Order No. 10 ( Series of 1997)
[32]Amending the Rules Implementing Books III and VI of
the Labor Code as Amended, promulgated on
[33]388
Phil. 929 (2000).
[40]The other Promotions Agreements are similarly written,
except for the name of the project, amount involved and the dates covered.
[41]Insular Life Assurance Co., Ltd. v. NLRC,
G.R. No. 84484, 15 November 1989, 179 SCRA 459, 464-465.
[45]See
Neri’s testimony during the hearing before the labor arbiter; TSN dated
ATTY. SASING: What
do you mean yes, did you apply with Purefoods?
WITNESS: No, I did not.
ATTY. SASING : As
a matter of fact you applied with what you called an agency?
WITNESS: Yes.
ATTY. SASING: And this agency is what you in your Sinumpaang Salaysay are Admark Agency?
WITNESS: Yes.
ATTY. SASING: And it was with this agency that you submit
your vacations and all documents, bonds?
WITNESS: Yes.
.
[46]Rollo, pp. 190-191; In her Sinumpaang Salaysay, Neri stated that:
1. Na ako ay namasukan
sa Purefoods Corporation sa pamamagitan ng Admark Agency noong Setyembre 1986
at ang unang naging trabaho ko ay bilang isang Poultry Merchandiser;
[48]Emeterio
Dizon, Jr., Marciano Bane, Lolita Neri, Ronaldo Caloboy, Felix Quinsanos,
Claudine Guevarra, and Jose Alvin J. Javier; rollo, p. 184.