[G.R. No. 147510.June 25, 2001]
SPFL vs.
HON. LAGUESMA, et al.
SECOND DIVISION
Gentlemen:
Quoted
hereunder, for your information, is a resolution of this Court dated JUN
25 2001.
G.R. No. 147510(Southern
Philippines Federation of Labor (SPFL) v. Hon. Bienvenido E. Laguesma,
Undersecretary of Labor, Asia Brewery, Inc., and Timog Integrated Factors
Corporation, et al.)
On January 19, 1994,
petitioner Southern Philippines Federation of Labor (SPFL) filed, on behalf of
its affiliate, Asia Brewery Employees Union APFL (ABEU-SPFL), a petition for
certification election with the Department of Labor (DOLE). Petitioner prayed
that after due hearing, an order be issued declaring respondent Asia Brewery,
Inc. (ABI) as the employer of the employees belonging to the bargaining unit
and that a certification election be duly conducted among the rank-and-file
employees of respondent company. Petitioner union alleged, among other things,
that it is a legitimate labor organization duly registered with the DOLE; that
ABI is an establishment engaged in the business of brewing beer; that the
proposed bargaining unit was composed of about 340 rank-and-file employees in
the Bottling, Electrical, General Services, Materials, Processing and Utility
Departments of ABI; that all these employees are under the employ of respondent
Timog Integrated Factors Corporation (Timog), a labor-only contractor, and are
performing work which are usually necessary and desirable to the main business
of respondent ABI; that ABI is the direct employer of the employees; and that
no certification election had been conducted among the employees during the 12
months preceding the date of the filing of the petition.
In its answer, ABI denied
that it was the employer of the members of the union, but that it was respondent
Timog; that the proposed bargaining unit included employees not belonging to
the rank-and-file; that the petition did not contain the sufficient number of
employees constituting the bargaining unit; and that the petition should be
denied for lack of legal and factual basis.
On April 13, 1994, Asia
Brewery Incorporated and/or Timog Integrated Factors Corporation Employees
Union-FFW filed a motion for intervention. Among other things, it alleged that
it was a legitimate labor organization affiliated with the Federation of Free
Workers (FFW); that respondents 'ABI and/or Timog had about 340 rank-and-file
workers assigned in the Bottling, Electrical, General Services, Materials.
Processing and Utility Departments of respondent ABI; and that no certification
election had been conducted among the employees belonging to said bargaining
unit during the last 12 months preceding the date of the filing of their
petition.
On May 13, 1994,
respondent Timog filed a motion for intervention and an answer-in-intervention
averring that it was an independent contractor of respondent ABI and was the
real and actual employer of the members of the petitioner union; that by reason
thereof, they should have been impleaded as a proper party in the petition of
the petitioner union; and that the petition was defective for including union
members who were not rank-and-file employees and for failure to obtain the
required number of rank-and-file employees required by law to constitute a
bargaining unit. To prove its allegations, respondent Timog submitted copies of
the following: its certificate of filing of the articles of incorporation; its
articles of incorporation; its appointment letters to the union officers of the
petitioner union hiring them as its employees which were accepted and duly
signed by them; and its pay slips to its employees, including the union
officers, which were duly received and signed by them.
In reply to respondent
Timog's motion for intervention, petitioner union argued that Timog failed to
submit any contract to prove the existence of a contractor-contractee
relationship with respondent ABI; that respondent Timog did not have
substantial capital or investment in the form of tools, equipment, machineries
and work premises; and that the workers recruited and placed by respondent
Timog were performing activities which are directly related to the principal
business of respondent ABI.
By way of rejoinder, Timog
claimed that it carried an independent business and undertook its work in its
own manner and method, free from the control and direction of ABI in all
matters connected with the performance of the work except as to the results
thereof; that it had substantial capital or investment in the form of
equipment, work premises and other materials which were necessary in the
conduct of its business. In support thereof, Timog submitted copies of the
following documents, to wit: (1) a copy of the existing Operation and
Maintenance Agreement entered into by and between ABI and Timog; (2) a copy of
the existing contract of lease entered into by and between ABI and Timog
whereby the former leased to the latter a portion of its field office to be
used by Timog in connection with said Operation and Maintenance Agreement; (3)
pictures of Timog's work premises which were covered by said contract of lease;
(4) a copy of the deed of absolute sale of chattel executed by and between ABI
and Timog dated February 1, 1992 to prove that Timog had substantial capital
and investment in the form of tools, equipment and other materials which were
necessary in the conduct of its business and in the performance of its
contractual obligations; (5) copies of the affidavits of the members of the
petitioner union declaring, among others, that they were employees of Timog and
not respondent ABI; and (6) proofs of SSS contribution payments for the months
of October, November and December 1993 made by Timog as employer of the members
of petitioner union.
On July 18, 1994, the
med-arbiter issued an order, the dispositive portion of which reads:
WHEREFORE, premises
considered, an order is hereby issued:
1. Dismissing the
petition as against respondent Asia Brewery Incorporated, not being the
employer of the members of the petitioner in the proposed bargaining unit;
2. Finding
respondent Timog integrated Factors Corporation as the employer of the members
of the petitioner of the proposed bargaining unit;
3. Ordering the
conduct of a certification election to be participated in by the rank-and-file
workers of Timog Integrated Factors Corporation at its premises at Ipil El
Salvador. Oriental with the following choices:
a. ASIA BREWERY
EMPLOYEES UNION-SPFL;
b. TIMOG INTEGRATED FACTORS
CORPORATION EMPLOYEES UNION-FFW; and
c. NO UNION.
Pre-election conference is
set on August 4, 1994, at 10:00 a.m. at the Regional Office to determine the
qualifications of the voters and to thresh out the mechanics of the election.
Respondent Timog is
directed to submit five (5) copies of the list of rank-and-file workers at
Ipil, El Salvador, Misamis Oriental taken from the payroll of October 1-30,
1993 indicating their names, positions and dates of employment and to bring the
aforementioned payroll during the pre-election conference lot verification
purposes.
Further, respondent/employer
Timog is likewise directed to post photostat copies of the order immediately
within its premises. Let copies of the order be furnished the parties.
SO ORDERED.
On appeal, the Department
of Labor affirmed with modification, on April 20, 1995, the med-arbiter's
order. The dispositive portion of its decision reads:
WHEREFORE, the appeal
filed [by] the petitioner is hereby DISMISSED for lack of merit while the
appeal filed by respondent Asia Brewery Inc. is hereby Granted. Thus, the
Med-Arbiter's Order is hereby affirmed subject to the modification that SPFL
shall amend the charter issued to Asia Brewery Employees Union to reflect its
real employer which is Timog Integrated Factors Corporation and shall make the
necessary amendments/changes in the registration of the local before the
appropriate body in this Department.
SO ORDERED.
Petitioner union's motion
for reconsideration was later denied in an order dated July 26, 1995.
On appeal, the Court of
Appeals affirmed the decision of the DOLE. Hence, this petition for review on
certiorari.
Petitioner union contends
that Timog is a labor-only contractor of ABI, not a job contractor. It alleges
that the employees supplied by Timog do work that relate to the principal
business of ABI; that while Timog has an authorized capital stock of P500,000.00,
only P125,000.00 is actually subscribed and, that, as such, it does not
have substantial capital or investment required of job contractors. Petitioner
reiterates its contention that ABI should be declared the employer of the
employees belonging to the petitioner union and that a certification election
be duly conducted among the rank-and-file employees belonging to the bottling,
electrical, general services, materials, processing and utility departments,
and such other positions necessary and directly related to the business of ABI
After due consideration,
the Court finds the petition to be without merit.
The determination as to
whether Timog is a job contractor or a labor-only contractor is a question of
fact. The Court finds no reason to set aside the factual findings of the
med-arbiter affirmed by the Secretary of Labor and, later, by the appeals court
that indeed Timog is a job contractor.
Under Book III, Rule VIII,
§18 of the Omnibus Rules Implementing the Labor Code, there is "job
contracting" permissible under the Code if the following conditions are
satisfied: (1) The contractor carries on an independent business and undertakes
the 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 except
as to the results thereof; and (2) The contractor has substantial capital or
investment in the form of tools, equipment, machineries, work premises, and
other materials which are necessary in the conduct of his business (Bordeos v.
National Labor Relations Commission, 262 SCRA 424 (1996)). In this case, the
Court of Appeals found that Timog is engaged in the business of providing
general services to the public, that it has an existing Operation and
Maintenance Agreement with ABI; that pursuant to the agreement. Timog is the
employer of the employees belonging to the petitioner union, that Timog issued
appointments to the union officers of the petitioner union when it hired them
as its employees; that as shown by SSS contribution payment receipts, Timog
paid the wages of the employees and remitted their SSS premiums; and that the
deed of absolute sale of chattel show that Timog had substantial capital and
investment in terms of tools, equipment, machineries and work premises. Hence,
petitioner's mere assertion that its members are employees of ABI cannot stand.
Anent petitioner's claim
that Timog does not have substantial capital or investment, suffice it to state
that the amount of its subscribed capital stock does not affect its viability
as a job contractor of respondent ABI. Art. 13 of Corporation Code provides
that at least twenty-five (25%) percent of the authorized capital stock as
stated in the articles of incorporation must be subscribed at the time of
incorporation, and at least twenty-five (25%) percent of the total subscription
must be paid upon subscription. In this case, Timog is a corporation duly registered
with the Securities and Exchange Commission. The total amount of capital stock
actually subscribed is P125,000.00 and the total amount of the
subscribed capital stock actually paid is P125,000.00. More importantly,
Art. 106 of the Labor Code does not require a specific amount of subscribed
capital stock as a factor in determining substantial capital or investment of a
company for it to qualify as a job contractor.
WHEREFORE, the petition is DENIED for lack of showing that the
Court of Appeals committed any reversible error.
Very truly yours,
(Sgd.) TOMASITA B. MAGAY-DRIS
Clerk of Court
