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[G.R. No. 144672.
SECOND DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this
Court dated
G.R. No. 144672 (San Miguel Corporation vs. MAERC Integrated Services, Inc., et al.)
This resolves the motion for reconsideration of our Decision of
Petitioner reiterates the arguments raised in that case that no employer-employee relationship exists between it and the complainants, and that MAERC is an independent contractor hence petitioner should not be held solidarily liable with MAERC for complainants' monetary benefits and the indemnity fee due each of them.
Specifically, it disputes this Court's finding that MAERC solely engaged the services of complainants; that the cost breakdown for the wages used by petitioner and MAERC is the type approved by this Court in an earlier decision; and, that MAERC exercised control over the complainants' conduct.
Petitioner points out that no intervention or influence could have been extended by it in the selection or hiring of complainants, and that such a conclusion cannot be drawn from the fact that the complainants or the majority of them had worked for petitioner before it signed a contract with MAERC.
Petitioner also claims to be unsupported by evidence this Court's statement that the incorporators of MAERC had admitted having supplied and recruited workers for SMC even before MAERC was created. It avers that only one of the two complainants who testified before the Labor Arbiter declared that he was instructed by a supervisor for petitioner to apply with MAERC.
Petitioner's contentions must be rejected. While the continuity of service rendered by the workers to petitioner by itself does not signify an employer-employee relationship, it was held to be so considering the other circumstances present; more so, since the workers continued to work for petitioner without break from their former employer and then as employees of MAERC even before the latter was incorporated.
The fact that MAERC admitted recruiting workers for petitioner
before its incorporation is adequately supported by the record. While the
Security and Exchange Commission issued a Certificate of Incorporation
[1]
cralaw
to MAERC only on
As regards petitioner's deprecation of a complainant's testimony that a supervisor of petitioner gave an instruction to apply for work with an incorporator of MAERC to be unsupportive of this Court's judgment, we hold that the failure of complainants to present other witnesses to corroborate this testimony does not affect the credibility of this particular testimony.
Under the Rules of the National Labor Relations Commission, "trial-type" hearings are not even required in proceedings before the Labor Arbiter. They are essentially summary and non-litigious in nature where parties by agreement may even submit their case for decision on the basis of position papers and their supporting evidence. While the parties went through a hearing, to require the numerous complainants to testify before the Labor Arbiter for corroboration would unnecessarily prolong the proceedings and render nugatory the intent of the rules to expedite the process.
Petitioner nonetheless submits that its supervisor's instruction was "probably a well, meaning advice" We must dismiss this postulation. The complainant testified that he worked for petitioner without break since 1979. If prior to MAERC, the complainant was in the employ of another contractor identified as Jopard Services and not by petitioner, we find improper and totally unnecessary such a "well-meaning advice." Indeed, it is remarkable that the majority of complainants were able to continue their service for petitioner from their former contractor to MAERC without so much as a pause, meaning that the selection and hiring must have occurred well during the time the complainants were still under the employ of another contractor.
Moreover, petitioner denies having used MAERC as a mere agent in paying the wages of complainants, and claims on the other hand that the memoranda of labor rates for the segregation and washing activities appended to the service contract entered into by MAERC and petitioner providing for the payment of employer's share of the SSS and Medicare contributions, 13th month pay, incentive leave pay and maternity benefits, and other wage benefits, are valid and standard. For this purpose, it cites Escario v. NLRC, [3] cralaw as well as the DOLE Department Order No. 14, Series of 2001, entitled "Guidelines Governing the Payment and Working Conditions of Security Guards and Similar Personnel in the Private Security Industry."
In Escario, this Court held that the billing rate and cost breakdown of payment contained in the agreement between a company and its contractor is a standard provision of service contracts to insure that under the contract employees of the job contractor will receive the benefits mandated by law. Even if we did acknowledge in Escario the practice of specifying the labor benefits to be received by employees in the billing rates in service contracts, nevertheless we are constrained to rule that Escario as well as the DOLE Guidelines which requires the inclusion of benefits in the cost distribution in the service contracts is inapplicable to the case at bench. In Escario, D. L. Admark, the contractor, was found to be engaged in permissive job contracting after it was learned that It was engaged in a distinct and independent business of advertising, promotion and publicity, the sales and merchandising of goods and services while respondent California Marketing Co., Inc., was into manufacturing and distribution of food products. D. L. Admark was also found to have several merchandising contracts with other companies. The Court also held it to be an independent contractor after applying the four-fold test in determining the employer-employee relationship.
Petitioner further asserts that the contractor's share included in the billing rates is not equivalent of "a commission" given to a cabo or a labor-only 'contractor but MAERC's estimate of what profit-margin it should charge petitioner to meet its overhead expenses, generate a return on its investments in equipment and fixed assets and meet its interest debts. It was silent however on the fact that the billing rates or cost breakdown already contained an item for the overhead expenses. [4] cralaw Petitioner also admitted to paying for use of the equipment and facilities of the MAERC hence the separate items for forklifts and warehouse likewise provided for in the cost breakdown. [5] cralaw
Most importantly, petitioner refutes this Court's conclusion that petitioner exercised control over the workplace. It stresses that the checkers assigned to the workplace did not stay there continuously to merit the conclusion that they maintained a "constant presence" as held by this Court in its Decision.
We disagree. While petitioner's checkers may not have stayed the full eight (8) hours in the workplace because they had to leave for their office to make their reports, their attendance need not be continuous to be considered constant and therefore an indication of control. We find in fact that they maintained sufficient presence at the workplace to be able to pinpoint the workers whose performance was not up to par and to report who they were.
We also lay aside petitioner's insistence that three (3) letters [6] cralaw dated 7 February 1989 submitted by complainants do not evidence petitioner's power to recommend disciplinary actions to be taken against MAERC employees. Contrary to petitioner's assertions, these letters which recommended a "last warning" or "first warning" to several MAERC employees found responsible for rejected bottles actually originated from petitioner's segregation quality control inspector, Mr. W. Padin, as indicated by his signature appearing immediately below the body of the letter, and not from Mr. Poligrates, a MAERC employee. While Mr. Poligrates also signed at the bottom of the letters, he only signed as a MAERC representative and his signature appeared alongside that of petitioner's employee Mr. Pardillo who also signed as petitioner's representative.
Besides, these letters were addressed to an officer and a manager of the MAERC, but the stern language used belied that these communications had come from a mere rank-and-file MAERC employee. Again, Mr. Carlito Singson, head of the Mandaue Container Service of SMC, also called the attention of MAERC, in a letter dated 10 February 1989, with regard to the employees subject of the 7 February 1989 letters.
Petitioner's assertion of its management prerogative to determine whether to contract out the performance of its work to independent contractors must fail. An assiduous review of the whole record convinces us that MAERC was a mere labor-only contractor. For as revealed by a MAERC letter to SMC President Mr. Francisco Eizmendi, which petitioner has belatedly disputed in the present motion for reconsideration, the whole arrangement of contracting the bottle washing and segregation activities to MAERC was only devised apparently to avoid labor problems Petitioner's attempt to distance itself from the workers after requiring MAERC to establish the conditions to satisfy the requirements for a status of a legitimate job contractor cannot prosper inasmuch as there is enough evidence to substantiate the existence of an employer-employee relationship between petitioner and complainants. This Court has held that it will only recognize a company's prerogatives so long as they are exercised in good faith and for the advancement of the employer's interest, and not for the purpose of defeating or circumventing the rights of the employees. [7] cralaw
WHEREFORE, we find no reason to reconsider our earlier pronouncement; hence the motion for reconsideration is DENIED and the DENIAL is FINAL.
SO ORDERED.
Very truly yours,
TOMASITA M. DRIS
Clerk of Court
By:
(Sgd.) LUDICHI YASAY-NUNAG
Asst. Div. Clerk of Court
Endnotes:
[1] cralaw Rollo, p. 243.
[2] cralaw Id., p. 235-242.
[3] cralaw G.R. No. 124055, 8 June 2000.
[4] cralaw Rollo, pp. 272-274.
[5] cralaw Id., pp. 273-274.
[6] cralaw Anexes "C," "D" and "E;" id., pp 261-263.
[7] cralaw San Miguel Brewery Sales v. Ople, G.R. No. 53515,8 February 1989, 270 SCRA 25.
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