42.

FARLEY FULACHE, MANOLO JABONERO, DAVID CASTILLO, JEFFREY LAGUNZAD,

MAGDALENA MALIG-ON BIGNO, FRANCISCO CABAS, JR., HARVEY PONCE and ALAN C.
ALMENDRAS, vs. ABS-CBN BROADCASTING CORPORATION

CASE DIGEST

FACTS:

1. June 2001, petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey Lagunzad,
Magdalena Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan C. Almendras
(petitioners) and Cresente Atinen (Atinen) filed two separate complaints for regularization, unfair
labor practice and several money claims (regularization case) against ABS-CBN Broadcasting
Corporation-Cebu (ABS-CBN)
2. petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File
Employees Union (Union) executed a collective bargaining agreement. ; they learned that they
had been excluded from its coverage as ABS-CBN considered them temporary and not regular
employees, in violation of the Labor Code.
3. ABS-CBN further claimed that to cope with fluctuating business conditions, it contracts on a
case-to-case basis the services of persons who possess the necessary talent, skills, training,
expertise or qualifications to meet the requirements of its programs and productions. These
contracted persons are called "talents" and are considered independent contractors who offer
their services to broadcasting companies. ABS-CBN alleged that the petitioners’ services were
contracted on various dates by its Cebu station as independent contractors/off camera talents,
and they were not entitled to regularization in these capacities.
4. Labor Arbiter Rendoque rendered his decision5 holding that the petitioners were regular
employees of ABS-CBN, ABS-CBN appealed the ruling to the National Labor Relations
Commission.
5. While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache,
Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of
employment with service contractor Able Services. The four drivers and Atinen responded by
filing a complaint for illegal dismissal (illegal dismissal case).
6. In her April 21, 2003 decision in the illegal dismissal case, 7 Labor Arbiter Rendoque, found that
petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been dismissed due to
redundancy, an authorized cause under the law. 8 He awarded them separation pay of one (1)
month’s salary for every year of service.
7. petitioners went to the CA through a petition for certiorari under Rule 65 of the Rules of Court.
the CA ruled that the petitioners failed to prove their claim to CBA benefits since they never
raised the issue in the compulsory arbitration proceedings, and did not appeal the labor arbiter’s
decision which was silent on their entitlement to CBA benefits. On the illegal dismissal issue, the
CA upheld the NLRC decision reinstating the labor arbiter’s April 21, 2003 ruling. 17 Thus, the
drivers – Fulache, Jabonero, Castillo and Lagunzad – were not illegally dismissed as their
separation from the service was due to redundancy;
8. petitioners challenged the CA ruling on both procedural and substantive grounds.

ISSUE:

(1) Whether the petitioners, as regular employees, are members of the bargaining unit entitled to CBA
benefits; and

(2) Whether petitioners Fulache, Jabonero, Castillo and Lagunzad were illegally dismissed.

HELD:

1. REGULARIZATION CASE AND THE CLAIM FOR CBA BENEFITS

Petitioners’ position is with merit. As regular employees, the petitioners fall within the coverage of
the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract. , it is
declared that complainants in these cases are REGULAR EMPLOYEES of respondent ABS-CBN and
not INDEPENDENT CONTRACTORS and thus henceforth they are entitled to the benefits and
privileges attached to regular status of their employment.

This declaration unequivocally settled the petitioners’ employment status: they are ABS-CBN’s regular
employees entitled to the benefits and privileges of regular employees. These benefits and privileges
arise from entitlements under the law (specifically, the Labor Code and its related laws), and from their
employment contract as regular ABS-CBN employees, part of which is the CBA if they fall within the
coverage of this agreement. the petitioners are members of the appropriate bargaining unit because
they are regular rank-and-file employees and do not belong to any of the excluded categories. Thus,
as regular rank-and-file employees, they fall within CBA coverage under the CBA’s express terms and
are entitled to its benefits.

To further clarify what we stated above, CBA coverage is not only a question of fact, but of law and
contract. The factual issue is whether the petitioners are regular rank-and-file employees of ABS-CBN.
The tribunals below uniformly answered this question in the affirmative. From this factual finding flows
legal effects touching on the terms and conditions of the petitioners’ regular employment. This was
what the labor arbiter meant when he stated in his decision that "henceforth they are entitled to the
benefits and privileges attached to regular status of their employment."

2. ILLEGAL DISMISSAL CASE

The termination of employment of the four drivers occurred under highly questionable
circumstances and with plain and unadulterated bad faith.

The records show that the regularization case was in fact the root of the resulting bad faith as this case
gave rise and led to the dismissal case. First, the regularization case was filed leading to the labor
arbiter’s decision31declaring the petitioners, including Fulache, Jabonero, Castillo and Lagunzad, to be
regular employees. ABS-CBN appealed the decision and maintained its position that the petitioners
were independent contractors. ABS-CBN took matters into its own hands and terminated the
petitioners’ services, clearly disregarding its own appeal then pending with the NLRC.

To justify the termination of service, the company cited redundancy as its authorized cause but offered
no justificatory supporting evidence. It merely claimed that it was contracting out the petitioners’
activities in the exercise of its management prerogative.

By law,39 illegally dismissed employees are entitled to reinstatement without loss of seniority rights and
other privileges and to full backwages, inclusive of allowances, and to other benefits or their monetary
equivalent from the time their compensation was withheld from them up to the time of their actual
reinstatement. The four dismissed drivers deserve no less.
43. NELSON BEGINO VS ABS-CSB, GR NO. 199166, 20 APRIL 2015

FACTS:

1. ABS-CBN engaged the services of petitioners Nelson Begino and Gener Del Valle sometime in
1996 as Cameramen/Editors for TV Broadcasting. With their services engaged by respondents
thru Talent Contracts which, though regularly renewed over the years, provided terms ranging
from three (3) months to one (1) year, petitioners were given Project Assignment Forms which
detailed, among other matters, the duration of a particular project as well as the budget and the
daily technical requirements thereof.
2. While specifically providing that nothing therein shall be deemed or construed to establish an
employer-employee relationship between the parties, the aforesaid Talent Contracts included,
among other matters, provisions on the following matters: (a) the Talent’s creation and
performance of work in accordance with the ABS-CBN’s professional standards and compliance
with its policies and guidelines; (b) the Talent’s non-engagement in similar work for a person or
entity directly or indirectly in competition with or adverse to the interests of ABS-CBN and non-
promotion of any product or service without prior written consent; and (c) the results-oriented
nature of the talent’s work which did not require them to observe normal or fixed working hours.
3. Claiming that they were regular employees of ABS-CBN, petitioners filed against respondents
the complaint before the National Labor Relations Commission for regularization, underpayment
of overtime pay, holiday pay, 13th month pay, service incentive leave pay, damages and
attorney's fees, petitioners alleged that they performed functions necessary and desirable in
ABS-CBN's business.
4. Respondents insisted that, pursuant to their Talent Contracts and/or Project Assignment Forms,
petitioners were hired as talents, to act as reporters and/or cameramen for TV Patrol Bicol for
designated periods and rates.
5. Having been terminated during the pendency of the case, Petitioners filed on 10 July 2007 a
second complaint against respondents, for regularization, payment of labor standard benefits,
illegal dismissal and unfair labor practice. Labor Arbiter Jesus Orlando Quiñones resolved in
favor of petitioners who, having rendered services necessary and related to ABS-CBN’s
business for more than a year, were determined to be its regular employees.
6. respondents elevated the case on appeal before the NLRC, during the pendency of which
petitioners filed a third complaint against the former, for illegal dismissal, regularization, non-
payment of salaries and 13th month pay, unfair labor practice, damages and attorney’s fees.
7. The NLRC rendered a Decision dated 31 March 2010, affirming said Labor Arbiter’s appealed
decision. Respondents filed the Rule 65 petition for certiorari docketed before the CA.
8. 29 June 2011, the CA rendered the herein assailed decision, reversing the findings of the Labor
Arbiter and the NLRC.

ISSUE:

1. Whether or not the CA seriously and reversibly erred in not dismissing respondents’ petition
for certiorari.
2. Whether or not the CA seriously and reversibly erred in brushing aside the determination made
by both the Labor Arbiter and the NLRC of the existence of an employer-employee relationship
between the parties

HELD:

1. The Court finds the petition impressed with merit.

2. As to the first issue, record shows that the NLRC took cognizance of respondents’ appeal and
proceeded to resolve the same in favor of petitioners by affirming the Labor Arbiter’s decision.
Not having filed their own petition for certiorari to take exception to the liberal attitude the NLRC
appears to have adopted towards its own rules of procedure.
3. Although the existence of an employer-employee relationship is, on the other hand, a question
of fact which is ordinarily not the proper subject of a Rule 45 petition for review on certiorari like
the one at bar, the conflicting findings between the labor tribunals and the CA justify a further
consideration of the matter.
4. To determine the existence of said relation, case law has consistently applied the four-fold test,
to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer's power to control the employee on the means and
methods by which the work is accomplished.[
5. Of these criteria, the so-called “control test”.Under this test, an employer-employee relationship
is said to exist where the person for whom the services are performed reserves the right to
control not only the end result but also the manner and means utilized to achieve the same
6. The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project
Assignment Forms and the terms and condition embodied therein, petitioners are regular
employees of ABS-CBN. Time and again, it has been ruled that the test to determine whether
employment is regular or not is the reasonable connection between the activity performed by the
employee in relation to the business or trade of the employer. As cameramen/editors and
reporters, petitioners were undoubtedly performing functions necessary and essential to ABS-
CBN’s business of broadcasting television and radio content.
7. As cameramen/editors and reporters, it also appears that petitioners were subject to the control
and supervision of respondents which, first and foremost, provided them with the equipments
essential for the discharge of their functions.
8. Rather than the project and/or independent contractors respondents claim them to be, it is
evident from the foregoing disquisition that petitioners are regular employees of ABS-CBN.
Viewed from the prism of these considerations, SC find and so hold that the CA reversibly erred
when it overturned the NLRC's affirmance of the Labor Arbiter's finding that an employer-
employee relationship existed between the parties.
44. INSULAR LIFE VS NLRC, 179 SCRA 459

FACTS:

1. On 21 August 1992 petitioner entered into an agency contract with respondent Pantaleon de los
Reyes4 authorizing the latter to solicit within the Philippines applications for life insurance and
annuities for which he would be paid compensation in the form of commissions.
2. The contract was prepared by petitioner. It contained the stipulation that no employer-employee
relationship shall be created between the parties and that the agent shall be free to exercise his
own judgment as to time, place and means of soliciting insurance. De los Reyes however was
prohibited by petitioner from working for any other life insurance company, and violation of this
stipulation was sufficient ground for termination of the contract. Aside from soliciting insurance
for the petitioner, private respondent was required to submit to the former all completed
applications for insurance within ninety (90) consecutive days, deliver policies, receive and
collect initial premiums and balances of first year premiums, renewal premiums, deposits on
applications and payments on policy loans
3. On 1 March 1993 petitioner and private respondent entered into another contract 6 where the
latter was appointed as Acting Unit Manager under its office. It was similarly provided in the
management contract that the relation of the acting unit manager and/or the agents of his unit
to the company shall be that of independent contractor. If the appointment was terminated for
any reason other than for cause, the acting unit manager would be reverted to agent status and
assigned to any unit.
4. As long as he was unit manager in an acting capacity, De los Reyes was prohibited from working
for other life insurance companies or with the government. He could not also accept a managerial
or supervisory position in any firm doing business in the Philippines without the written consent
of petitioner.
5. Private respondent worked concurrently as agent and Acting Unit Manager until he was notified
by petitioner on 18 November 1993 that his services were terminated effective 18 December
1993. On 7 March 1994 he filed a complaint before the Labor Arbiter on the ground that he was
illegally dismissed and that he was not paid his salaries and separation pay.
6. The Labor Arbiter dismissed the complaint but on appeal was reversed by the NLRC tribunal
ruling that Pantaleon was an employee of petitioner. Petitioner contends that nature of the work
has already been resolved by the Court in the earlier case of Insular Life v. Basiao where Basiao
is declared an independent contractor and not an employee of petitioner.

ISSUE:

Whether or not there exists employer-employee relationship between petitioner and Pantaleon.

HELD:

1. As to the matter involving the power of dismissal and control by the employer, the latter of which
is the most important of the test, unlike Basiao, herein respondent De los Reyes was
appointed Acting Unit Manager, not agency manager. Petitioner in fact has admitted that it
provided De los Reyes a place and a table at its office where he reported for and worked
whenever he was not out in the field.
2. Under the managership contract, De los Reyes was obliged to work exclusively for petitioner in
life insurance solicitation and was imposed premium production quotas. He was proscribed from
accepting a managerial or supervisory position in any other office including the government
without the written consent of petitioner. De los Reyes could only be promoted to permanent unit
manager if he met certain requirements and his promotion was recommended by the petitioner’s
District Manager and Regional Manager and approved by its Division Manager. As Acting Unit
Manager, De los Reyes performed functions beyond mere solicitation of insurance business for
petitioner. As found by the NLRC, he exercised administrative functions which were necessary
and beneficial to the business of INSULAR LIFE.
3. Exclusivity of service, control of assignments and removal of agents under private respondent’s
unit, collection of premiums, furnishing of company facilities and materials as well as capital
described as Unit Development Fund are but hallmarks of the management system in which
herein private respondent worked. This obtaining, there is no escaping the conclusion that
private respondent Pantaleon de los Reyes was an employee of herein petitioner.
45. TONGKO VS MANUFACTURER’S LIFE INSURANCE COMPANY

GR NO. 167622, 29 JUNE 2010

FACTS:

1. Tongko asserted that as Unit Manager, he was paid an annual over-rider not exceeding
₱50,000.00, regardless of production levels attained and exclusive of commissions and
bonuses. He also claimed that as Regional Sales Manager, he was given a travel and
entertainment allowance of ₱36,000.00 per year in addition to his overriding commissions; he
was tasked with numerous administrative functions and supervisory authority over Manulife’s
employees, aside from merely selling policies and recruiting agents for Manulife; and he
recommended and recruited insurance agents subject to vetting and approval by Manulife. He
further alleges that he was assigned a definite place in the Manulife offices when he was not in
the field – at the 3rd Floor, Manulife Center, 108 Tordesillas corner Gallardo Sts., Salcedo
Village, Makati City – for which he never paid any rental. Manulife provided the office
equipment he used, including tables, chairs, computers and printers (and even office
stationery), and paid for the electricity, water and telephone bills. As Regional Sales Manager,
Tongko additionally asserts that he was required to follow at least three codes of conduct. 9
2. Manulife argues that Tongko had no fixed wage or salary. Under the Agreement, Tongko was
paid commissions of varying amounts, computed based on the premium paid in full and
actually received by Manulife on policies obtained through an agent. As sales manager,
Tongko was paid overriding sales commission derived from sales made by agents under his
unit/structure/branch/region. Manulife also points out that it deducted and withheld a 10% tax
from all commissions Tongko received; Tongko even declared himself to be self-employed and
consistently paid taxes as such—i.e., he availed of tax deductions such as ordinary and
necessary trade, business and professional expenses to which a business is entitled. Manulife
asserts that the labor tribunals have no jurisdiction over Tongko’s claim as he was not its
employee as characterized in the four-fold test and our ruling in Carungcong v. National Labor
Relations Commission.
3. The labor arbiter decreed that no employer-employee relationship existed between the parties.
However, the NLRC reversed the labor arbiter’s decision on appeal; it found the existence of
an employer-employee relationship and concluded that Tongko had been illegally dismissed.
In the petition for certiorari with the Court of Appeals (CA), the appellate court found that the
NLRC gravely abused its discretion in its ruling and reverted to the labor arbiter’s decision that
no employer-employee relationship existed between Tongko and Manulife.

ISSUE:

1. Whether or not there is an existing employer-employee relationship.

HELD:

1. NO. Based on the evidence on record, the petitioner’s occupation was to sell Manulife’s
insurance policies and products from 1977 until the termination of the career agent’s agreement.
The evidence also shows that through the years, Manulife permitted him to exercise guiding
authority over other agents who operate under their own agency agreements with Manulife and
whose commissions he shared. Under this scheme — an agreement that pervades the
insurance industry — petitioner in effect became a “lead agent” and his own commissions
increased as they included his share in the commissions of the other agents; he also receive
greater reimbursement for expenses and was allowed to use Manulife’s facilities. His designation
also changed from unit manager to branch manager and then to regional sales manager, to
reflect the increase in the number of agents he recruited and guided, as well as the increase in
the area where these agents operated.
2. By the Agreement’s express terms, Tongko served as an "insurance agent" for Manulife, not as
an employee. To be sure, the Agreement’s legal characterization of the nature of the relationship
cannot be conclusive and binding on the courts; the characterization of the juridical relationship
 the Agreement embodied is a matter of law that is for the courts to determine. At the same time,
though, the characterization the parties gave to their relationship in the Agreement cannot simply
be brushed aside because it embodies their intent at the time they entered the Agreement, and
they were governed by this understanding throughout their relationship. At the very least, the
provision on the absence of employer-employee relationship between the parties can be an aid
in considering the Agreement and its implementation, and in appreciating the other evidence on
record.
3. Evidence shows that Tongko’s role as an insurance agent never changed during his relationship
with Manulife. If changes occurred at all, the changes did not appear to be in the nature of their
core relationship. Tongko essentially remained an agent, but moved up in this role through
Manulife’s recognition that he could use other agents approved by Manulife, but operating under
his guidance and in whose commissions he had a share. For want of a better term, Tongko
perhaps could be labeled as a "lead agent" who guided under his wing other Manulife agents
similarly tasked with the selling of Manulife insurance.
4. There are built in elements of control specific to an insurance agency, which do not amount to
the elements of control that characterizes an employment relationship governed by the labor
code. The insurance code provides definite parameters in the way an agent negotiates for the
sale of the company’s insurance products, his collection activities and his delivery of the
insurance contract or policy. In addition, the civil code defines an agent as a person who binds
himself to do something in behalf of another, with the consent or authority of the latter. Article
1887 of the civil code also provides that in the execution of the agency, the agent shall act in
accordance with the instructions of the principal.
5. Under this legal situation, the only conclusion that can be made is that the absence of
evidence showing Manulife’s control over Tongko’s contractual duties points to the absence of
any employer-employee relationship between Tongko and Manulife. In the context of the
established evidence, Tongko remained an agent all along; although his subsequent duties
made him a lead agent with leadership role, he was nevertheless only an agent whose basic
contract yields no evidence of means-and-manner control.
6. This conclusion renders unnecessary any further discussion of the question of whether an
agent may simultaneously assume conflicting dual personalities. But to set the record straight,
the concept of a single person having the dual role of agent and employee while doing the
same task is a novel one in our jurisprudence, which must be viewed with caution especially
when it is devoid of any jurisprudential support or precedent. The quoted portions in Justice
Carpio-Morales’ dissent,33 borrowed from both the Grepalife and the second Insular Life cases,
to support the duality approach of the Decision of November 7, 2008, are regrettably far
removed from their context – i.e., the cases’ factual situations, the issues they decided and the
totality of the rulings in these cases – and cannot yield the conclusions that the dissenting
opinions drew.

Decision from one digest over the internet:

NO. In the determination of whether an employer-employee relationship exists between 2 parties, this
court applies the four-fold test to determine the existence of the elements of such relationship.
Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute,
four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b)
the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the
employee’s conduct. IT is the so-called “control test” which constitutes the most important index of
existence of the employer-employee relationship that is, whether the employer controls or has
reserved the right to control the employee not only as to the result of the work to be done but also as
to the means and methods by which the same is to be accomplished. Stated otherwise, an employer-
employee relationship exists where the person for whom the services are performed reserves the right
to control not only the end to be achieved but also the means to be used in reaching such end. In the
case at bar, the absence of evidence showing Manulife’s control over Tongko’s contractual duties points
to the absence of any employer-employee relationship between Tongko and Manulife. In the context of
the established evidence, Tongko remained an agent all along; although his subsequent duties made
him a lead agent with leadership role, he was nevertheless only an agent whose basic contract yields
no evidence of means-and-manner control. Claimant clearly failed to substantiate his claim of
employment relationship by the quantum of evidence the Labor Code requires.
 Tongko’s failure to comply with the guidelines of de Dios’ letter, as a ground for termination of
Tongko’s agency, is a matter that the labor tribunals cannot rule upon in the absence of an employer-
employee relationship. Jurisdiction over the matter belongs to the courts applying the laws of insurance,
agency and contracts.

Dispositive: We REVERSE our Decision of November 7, 2008, GRANT Manulife’s motion for
reconsideration and, accordingly, DISMISS Tongko’s petition.
 46. GALLEGO VS BAYER PHILS, GR NO 179807

FACTS:

1. Ramy Gallego (petitioner) was contracted in April 1992 by Bayer Philippines, Inc. (BAYER) as
crop protection technician to promote and market BAYER products.
2. In 1996, petitioner’s employment with BAYER came to a halt, prompting him to seek
employment with another company. BAYER eventually reemployed petitioner, however, in
1997 through Product Image and Marketing Services, Inc. (PRODUCT IMAGE) of which
respondent Edgardo Bergonia (Bergonia) was the President and General Manager,
performing the same task as that of crop protection technician – promoting BAYER products
to farmers and dealers in Panay Island – solely for the benefit of BAYER.3
3. By petitioner’s claim, in October, 2001, he was directed by Pet Pascual, the newly assigned
BAYER sales representative, to submit a resignation letter, but he refused; and that in
January, 2002, he was summoned by his immediate supervisors including respondent
Danpin Guillermo (Guillermo), BAYER District Sales Manager for Panay, and was ordered to
quit his employment which called for him to return all pieces of service equipment issued to
him, but that again he refused.4
4. Still by petitioner’s claim, he continued performing his duties and receiving compensation
until the end of January, 2002; that on April 7, 2002, he received a memorandum that his
area of responsibility would be transferred to Luzon
5. Believing that his employment was terminated, petitioner lodged on June 6, 2002 a complaint
for illegal dismissal with the National Labor Relations Commission (NLRC) against herein
respondents Bayer, Guillermo, Product Image, and Bergonia, with claims for reinstatement,
backwages and/or separation pay, unpaid wages, holiday pay, premium pay, service
incentive leave and allowances, damages and attorney’s fees.
6. Respondents BAYER and Guillermo denied the existence of an employer-employee
relationship between BAYER and petitioner, explaining that petitioner’s work at BAYER was
simply occasioned by the Contract of Promotional Services that BAYER had executed with
PRODUCT IMAGE whereby PRODUCT IMAGE was to promote and market BAYER
products on its (PRODUCT IMAGE) own account and in its own manner and method. They
added that as an independent contractor, PRODUCT IMAGE retained the exclusive power of
control over petitioner as it assigned full-time supervisors to exercise control and supervision
over its employees assigned at BAYER.
7. The Labor Arbiter found BAYER, et al. guilty of illegal dismissal and ordered the
reinstatement of Gallego. The NLRC reversed the decision of the Labor Arbiter. Gallego then
appealed to the Court of Appeals via Certiorari, which was dismissed. Hence, this petition.

ISSUES:
1. Whether or not PRODUCT IMAGE is a labor-only contractor and BAYER should be deemed
Gallego’s principal employer

HELD:
1. Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees
to farm out with a contractor or subcontractor the performance of a specific job, work, or service within
a definite or predetermined period, regardless of whether such job, work or, service is to be performed
or completed within or outside the premises of the principal.

2. Under this arrangement, the following conditions must be met: (a) the contractor carries on a distinct
and independent business and undertakes the contract work on his 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 his work except as to the results
thereof; (b) the contractor has substantial capital or investment; and (c) the agreement between the
principal and contractor or subcontractor assures the contractual employees’ entitlement to all labor
and occupational safety and health standards, free exercise of the right to self-organization, security of
tenure, and social welfare benefits.
3. In distinguishing between permissible job contracting and prohibited labor-only contracting, the
totality of the facts and the surrounding circumstances of the case are to be considered, each case to
be determined by its own facts, and all the features of the relationship assessed.

4. In the case at bar, the Court finds substantial evidence to support the finding of the NLRC that
PRODUCT IMAGE is a legitimate job contractor. The Court notes that PRODUCT IMAGE was issued
by the Department of Labor and Employment (DOLE) Certificate of Registration Numbered NCR-8-
0602-176. The DOLE certificate having been issued by a public officer, it carries with it the presumption
that it was issued in the regular performance of official duty.Gallego’s bare assertions fail to rebut this
presumption. Further, since the DOLE is the agency primarily responsible for regulating the business of
independent job contractors, the Court can presume, in the absence of evidence to the contrary, that it
had thoroughly evaluated the requirements submitted by PRODUCT IMAGE before issuing
the Certificate of Registration.

5. Independently of the DOLE’s Certification, among the circumstances that establish the status of
PRODUCT IMAGE as a legitimate job contractor are: (1) PRODUCT IMAGE had, during the period in
question, a contract with BAYER for the promotion and marketing of BAYER products; (2) PRODUCT
IMAGE has an independent business and provides services nationwide to big companies such as
Ajinomoto Philippines and Procter and Gamble Corporation; and (3) PRODUCT IMAGE’s total assets
from 1998 to 2000 amounted to P405,639, P559,897, and P644,728, respectively. PRODUCT IMAGE
also posted a bond in the amount of P100,000 to answer for any claim of its employees for unpaid
wages and other benefits that may arise out of the implementation of its contract with BAYER.

6. PRODUCT IMAGE cannot thus be considered a labor-only contractor.

47. COCA COLA BOTTLERS VS RICKY DELA CRUZ

FACTS:

1. Respondents Ricky E. Dela Cruz, Rolando M. Guasis, Manny C. Pugal, Ronnie L. Hermo,
Rolando C. Somero, Jr., Dibson D. Diocares, and Ian Ichapare (respondents) filed in July 2000
two separate complaints4 for regularization with money claims against Coca-Cola Bottlers
Philippines, Inc., (petitioner or the company).
2. Before the Labor Arbiter, the respondents alleged that they are route helpers assigned to work
in the petitioner’s trucks. They go from the Coca- Cola sales offices or plants to customer
outlets such as sari-sari stores, restaurants, groceries, supermarkets and similar
establishments; 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. They argued that the services they render are necessary and desirable in the
regular business of the petitioner.5
3. the petitioner contended that it entered into contracts of services with Peerless 6 and Excellent
Partners Cooperative, Inc. (Excellent)7 to provide allied services; under these contracts,
Peerless and Excellent retained the right to select, hire, dismiss, supervise, control and discipline
and pay the salaries of all personnel they assign to the petitioner; in return for these services,
Peerless and Excellent were paid a stipulated fee. The petitioner posited that there is no
employer-employee relationship between the company and the respondents and the complaints
should be dismissed for lack of jurisdiction on the part of the National Labor Relations
Commission (NLRC).
4. Labor Arbiter Joel S. Lustria dismissed the complaint for lack of jurisdiction
5. The respondents appealed to the NLRC.13 On October 31, 2007, the NLRC denied the appeal
and affirmed the labor arbiter’s ruling,14 and subsequently denied the respondents’ motion for
reconsideration.15 The respondents thus sought relief from the CA through a petition
for certiorari under Rule 65 of the Rules of Court.
6. CA reversed the previous decisions and ruled that Peerless was engaged in labor-only
contract based on the respondents’ assertions and the petitioner’s admission that Peerless
simply supplied the company manpower. Furthermore, the Court found no proof in the records
that Peerless met the required capitalization and tools.

ISSUE:

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

HELD:

1. Peerless and Excellent were mere suppliers of labor 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. They are therefore labor-only contractors. Consequently, the contracted
personnel, engaged in component functions in the main business of the company under the
latter’s supervision and control, cannot but be regular company employees. In these lights, the
petition is totally without merit and hence must be denied.
2. 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.
3. 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.
4. 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.
5. 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.