Tabas et al VS. California Manufacturing Company

G.R. No. L-80680 January 26, 1989

Facts:

Petitioners filed a petition in the NLRC for reinstatement and payment of various benefits against California Manufacturing Company. The respondent company then denied the existence of an employer-employee relationship between the company and the petitioners.

Pursuant to a manpower supply agreement, it appears that the petitioners prior their involvement with California Manufacturing Company were employees of Livi Manpower service, an independent contractor, which assigned them to work as "promotional merchandisers." The agreement provides that:

California "has no control or supervisions whatsoever over [Livi's] workers with respect to how they accomplish their work or perform [Californias] obligation" It was further expressly stipulated that the assignment of workers to California shall be on a "seasonal and contractual basis"; that "[c]ost of living allowance and the 10 legal holidays will be charged directly to [California] at cost "; and that "[p]ayroll for the preceeding [sic] week [shall] be delivered by [Livi] at [California's] premises."

Issue:

Whether the petitioners are California's or Livi's employees?

Held:

There is no doubt that in the case at bar, Livi performs "manpower services",  meaning to say, it contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims to the contrary, and notwithstanding the provision of the contract that it is "an independent contractor."  The nature of one's business is not determined by self-serving appellations one attaches thereto but by the tests provided by statute and prevailing case law.  The bare fact that Livi maintains a separate line of business does not extinguish the equal fact that it has provided California with workers to pursue the latter's own business. In this connection, we do not agree that the petitioners had been made to perform activities 'which are not directly related to the general business of manufacturing,"  California's purported "principal operation activity. "  The petitioner's had been charged with "merchandizing [sic] promotion or sale of the products of [California] in the different sales outlets in Metro Manila including task and occational [sic] price tagging,"  an activity that is doubtless, an integral part of the manufacturing business. It is not, then, as if Livi had served as its (California's) promotions or sales arm or agent, or otherwise, rendered a piece of work it (California) could not have itself done; Livi, as a placement agency, had simply supplied it with the manpower necessary to carry out its (California's) merchandising activities, using its (California's) premises and equipment.

Neither Livi nor California can therefore escape liability, that is, assuming one exists.

Petition granted.