Broadway Motors vs NLRC

TOPIC: In Invalid Contracting

FACTS:
1. By virtue of a written undated Work Contract private respondent Vicente Apolinario began work as an auto painter or petitioner
Broadway otors! Inc.
". Vicente as Contractor and #o$nny C$ieng! %arts and &ervice 'perations anager of petitioner Corporation signed t$e contract.
(. Vicente worked for a period of 1) years until $e was barred fro* entering t$e pre*ises of Broadway otors and $is relations$ip wit$ it
effectively ter*inated because of $is alleged involve*ent in a fistfig$t wit$ t$e s$op superintendent.
+. Vicente filed an action for illegal dis*issal wit$ t$e ,C- Arbitration Branc$ of t$e ,.-C.
5. /$e .abor Arbiter dis*issed t$e co*plaint on t$e ground t$at under t$e Work Contract and an Addendu* to Work Contract! Vicente,
havin s!""#ied the wor$ers % inc#!din hi&se#', was a &ere contractor and co!#d not, there'ore, (e considered as the
Cor"oration)s e&"#oyee*
0. Appeal was *ade to t$e ,.-C.
1. /$e ,.-C reversed t$e decision2 e*ployer3e*ployee relations$ip e4isted
). %etitioner Corporation urges t$at Apolinario was not its own e*ployee but! rat$er! an independent contractor w$o conducted $is own
business under t$e trade na*e V Auto*otive -epair &ervice and $is own Contract Workers.
ISS+,:
W5, t$ere6s an e4istence of an e*ployer3e*ployee relations$ip7
-,L.:
89&.
:our facts are generally considered in deter*ining t$e e4istence of an e*ployer3e*ployee relations$ip! na*ely2 1; t$e *anner of selection and engage*ent of t$e putative e*ployee< "; t$e *ode of
pay*ent of wages< (; t$e presence or absence of a power of dis*issal< and +; t$e presence or absence of a power to control t$e putative e*ployee6s conduct. Control test! is t$e *ost i*portant criterion.
1. /$e record s$ows t$at Apolinario was $ired directly by petitioner corporation to work in t$e latter=s auto repair s$op as an auto painter!
w$ic$ fact is evidenced by t$e undated Work Contract e4ecuted between Apolinario and petitioner Corporation t$roug$ its aut$ori>ed
representative.
". /$at petitioner Corporation reserved unto itself t$e power of dis*issal is evidenced fro* t$e fact t$at petitioner Corporation unilaterally
undertook to ter*inate Apolinario6s relations$ip wit$ itself.
(. /urning to t$e power of control of Apolinario6s conduct! it appears for* t$e stipulations of t$e work Contract t$at Apolinario as $is
Contract Workers were re?uired not only to keep regular working $ours! but to render overti*e services as well! w$en suc$ as
necessitated eit$er by t$e volu*e or i**ediacy of t$e work@
a. Apolinario was re?uired to render overti*e service and wear unifor*s and IA worn in t$e pre*ises of t$e petitioner.
+. %etitioner supplied all t$e tools necessary for Apolinario to carry out $is Bobs.
C. Apolinario was engaged in t$e perfor*ance of a work directly related to t$e business operations of t$e petitioner.
0. #ob Contracting *ust be distinguis$ed fro* .abor 'nly contracting. .abor only contracting is defined in section D of -ule VIII of t$e
'*nibus -ules I*ple*enting t$e .abor Code. In this case, there was a #a(or/on#y contractin arrane&ent*
a. #ob Contracting E&ec ) of -ule VIII! Book Ill of t$e '*nibus -ules I*ple*enting t$e .abor Code;2
i. /$e contractor carries on an independent business and undertakes t$e contract work on his own account under his own responsibility according to his own manner
and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work e4cept as to t$e results
t$ereof< and
ii. /$e contractor $as substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials w$ic$ are necessary in t$e
conduct of $is business. E9*p$asis supplied.;
b. .abor3only contracting E&ec D of -ule VIII! Book Ill of t$e '*nibus -ules I*ple*enting@;2
i. Any person w$o undertakes to supply workers to an e*ployer s$all be dee*ed to be engaged in labor3only contracting w$ere suc$ person2
1. Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and
2. The workers recruited and Placed by such person are performing activities which are directly related to the principal business or operations of the
employer in which workers are habitually employed.
ii. .abor3only contracting as defined $erein is $ereby pro$ibited and the person acting as contractor shall be considered merely as an agent or intermediary of the
employer w$o s$all be responsible to t$e workers in t$e sa*e *anner and e4tent as if t$e latter were
c. As stated in Philippine ank of !ommunications v. "ational #abor $elations !ommission et al, a finding t$at a contractor
was a labor3only contractor is e?uivalent to a finding t$at an e*ployer3e*ployee relations$ip e4isted between t$e owner
and t$e labor3only contractor including t$e latter6s Contract Workers! t$at relations$ip is being attributed by t$e law itself.
1. y ratio E/FI& I& ,'/ W-I//9, I, /F9 CA&9; in relation to t$e topic2 Since #a(or/on#y contractin is not contractin at a##, it)s
e''ect is creation o' e&"#oyer/e&"#oyee re#ationshi" (etween the "rinci"a# and the wor$ers hired (y the a##eed contractor*
There is a(sor"tion o' e&"#oy&ent re#ationshi" 'ro& the a##eed contractor to his c#ient0"rinci"a#* The #atter, there'ore,
sho!#ders a## o(#iations o' an e&"#oyer, not 1!st the "ay&ent o' waes*
%etition dis*issed. ,.-C decision is affir*ed.