Labor 1 – Atty.

Daguinod | Digest | 2CLM - Camariño

Case No. 2-1: Brotherhood Labor Unity Movement vs. San Miguel Corporation
G.R. No. L-48645 | January 7, 1987
GUTIERREZ, JR., J.:

TOPIC:
DOCTRINE:

FACTS:

On July 11, 1969, BLUM filed a complaint against San Miguel Corporation for
unfair labor practice. Allegedly, the respondents ordered the complainants to
disaffiliate from the complainant union. The respondents moved the dismissal
on the grounds that the complainants was never an employee of their company
but are employees by an independent contractor who had the full opportunity
to hire and control the employees. Moreover, the NLRC ruled that there is an
absence of an employer-employee relationship. On the contrary, the
petitioners argued that there is an employer-employee relationship existing
because they were dismissed for unionism which constituted unfair labor
practice.

The petitioners are found to be workers who are employed as the San Miguel
Parloa Glass Factory since 1961 for about seven years of service at the time
of their termination, working as cargadores and pahinante. The petitioners
first worked under the Superintendent-in-Charge Camahort which provides the
company with the tools, equipment and paraphernalia used for the job.
Moreover, there were job orders from Camahort.

Work in the glass factory was neither regular nor continuous, depending on
the volume of bottles manufactured and work did not necessarily mean a full
eight hour day for the petitioners, however, they were paid based on a piece
rate basis. Sometime in January 1969, a total of 140 organized workers
affiliated themselves in a union, in the belief that they are entitled to
labor benefits and that they were being mistreated and being paid below than
the minimum wage. On February 20, 1969, all petitioners were dismissed from
their jobs and are denied entrance to the company despite regularly reporting
to work.
RTC RULING:

CTA RULING:

ISSUE:

W/not there exists an employer-employee relationship between the BLUM and San
Miguel Corporation.
ARGUMENTS
PETITIONER Brotherhood Labor Unity RESPONDENT San Miguel Corporation:

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Movement:
For an average seven year of each
petitioner had worked continuously and
exclusively for the company’s company,
there is a justification to conclude
that they were engaged to perform
activities necessary to the business
of the respondent and therefore, are
regular employees. And despite the
past shutdown of the glass plant, the
petitioners are regularly coming back
to continuously do their jobs.
SC RULING:
The petitioners are employees of the
Guaranteed Labor Contractor, a labor
contracting firm.
Sec 8, Rule VIII, Book III of the
Implementing Rules of the Labor Code,
there is job contracting if: (1)the
contractor carries on an INDEPENDENT
business and undertakes the contract
work on his own, and (3) the
contractor has substantial
capital/investments necessary conduct
to his business.

RULING ON RJL Martinez Fishing Corporation vs. NLRC:

The employer-employee relationship between the parties herein is not
coterminous with each loading and unloading job. The job of catching a fish
is a continuous process and is not a seasonal job. It is desirable to the
business of the respondent and this circumstance of employment makes the
complainant a regular employee because it is not dependent to any seasonal
activity.

Art. 106 of LC (provides a legal effect of a labor only contracting scheme):

The person shall be considered as an agent of employer who shall be
responsible to the workers in the same manner as if they were directly
employed by the latter.
BASE:

The Guaranteed and Reliable contractors have neither substantial capital nor
investment to qualify as an independent contractor. All paraphernalia, tools,
etc. used by petitioners from the job are from the respondent company.

While it is true that there are no other ways to specifically load/unload

bottles (or by doing their job), the mere fact that the SMC imposed
disciplinary measures for violations or infractions to its rules as well as
its right to recommend transfers and the dismissal of piece workers only
entails that SMC has control over the petitioners. Moreover, Abner Bungay,
the alleged SMC representative of the labor contractor is the strongest
indicator of respondent company’s right of control over the petitioners as
direct employer.

Therefore, the petition is GRANTED. SMC is ordered to reinstate petitioners

with 3 years back wages and if reinstatement is no longer possible, SMC is
ordered to pay equivalent to one month pay for every year of service.

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