COCA-COLA BOTTLERS PHILIPPINES V. DELA CRUZ

GR No. 184977

December 7, 2009

Brion, J.

FACTS:

Respondents Dela Cruz, Guasis, Pugal, Hermo, Somero, Jr., Diocares, and Ichapare were route helpers assigned to work with petitioner Coca-Cola Bottlers's trucks. Pursuant to their work, respondents go from the Coca- Cola sales offices or plants to customer outlets such as sari-sari stores, restaurants, groceries, supermarkets and the like. They likewise claim that they were hired either directly by the petitioner or by its contractors, but they do not enjoy the full remuneration, benefits and privileges granted to the petitioner’s regular sales force. As a result, they filed to separate complaints for their regularization with money claims against petitioner. They argued that the services they rendered were necessary and desirable in the regular business of the petitioner. On the other hand, petitioner Coca-Cola Bottlers contended that it did not have employer-employee relationship with the respondents on the ground that it entered into contracts of services with Peerless and Excellent Partners Cooperative, Inc. which entitled the latter the right to select, hire, dismiss, supervise, control and discipline and pay the salaries of all personnel they assign to the petitioner. Respondents disclaimed the contention of the petitioner, claiming that they worked under the control and supervision of the company’s supervisors who prepared their work schedules and assignments and that Peerless was in the nature of a labor-only contractor because of its insufficient capital to provide services to petitioner.

LA: Dismissed the complaint for lack of jurisdiction after finding that the respondents were employees of Peerless and not of Coca-Cola Bottlers.

NLRC: Affirmed LA's ruling.

CA: Reversed the previous decisions and ruled that Peerless was engaged in labor-only contract based on the respondents’ assertions and the petitioner’s admissions that Peerless simply supplied the company with manpower. Furthermore, the Court found no proof in the records that Peerless met the required capitalization and tools.

ISSUES:

1. Whether or not Peerless and Excellent Partners Cooperative, Inc. is a labor-only contractor.

2. Whether or not the respondents are regular employees.

RULING:

1.The Court ruled in affirmative.

Labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: 1. The contractor or subcontractor does not have sufficient capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; OR, 2. The contractor does not exercise the right to control over the performance of the work of the contractual-employee.

By "right to control”, it pertains to the prerogative of a party to determine, not only the end result sought to be achieved, but also the means and manner to be used to achieve this end.

A key consideration in resolving whether either of the two elements of a labor-only contractor is present in a given case is the contract between the company and the purported contractors. However, the contract between the principal and the contractor is not the final word on how the contracted workers relate to the principal and the purported contractor; the relationships must be tested on the basis of how they actually operate.

The facts of the case show that the respondents, acting as sales route helpers, were only engaged in the marginal work of helping in the sale and distribution of company products. They only provided the muscle work that sale and distribution required and were thus necessarily under the company’s control and supervision in doing these tasks. Also, respondents were not independently selling and distributing company products, using their own equipment, means and methods of selling and distribution. They only supplied the manpower that helped the company in the handing of products for sale and distribution. Therefore, Peerless and Excellent were mere labor-only contractors who had no sufficient capitalization and equipment to undertake sales and distribution of softdrinks as independent activities separate from the manufacture of softdrinks, and who had no control and supervision over the contracted personnel.

2. The Court ruled in affirmative.

It found that respondents, for being engaged in component functions in the main business of the company under the latter’s supervision and control, were regular employees who are entitled to their respective claims.