Petitioner LIKHA-PMPB filed a petition for certification election before the DOLE as it sought to represent all 70 rank-and-file promo employees of respondent Burlingame Corporation. Respondent opposed arguing that there exists no employer-employee relationship between them since petitioner’s members are actually employees of F. Garil Manpower Services, a duly licensed local employment agency. The Med-Arbiter found for respondent finding no employer-employee relationship existed, but was reversed on appeal to the DOLE. CA reversed the decision holding F. Garil to be an independent contractor.
(1) Whether or not F. Garil is an independent contractor; and
(2) Whether or not petitioner are employees of Burlingame Corporation.
(1) NO. We agree with the Secretary that F. Garil is not an independent contractor. First, F. Garil does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises, and other materials, to qualify as an independent contractor. No proof was adduced to show F. Garil‘s capitalization. Second, the work of the promo-girls was directly related to the principal business or operation of Burlingame. Marketing and selling of products is an essential activity to the main business of the principal. Lastly, F. Garil did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, Burlingame.
(2) YES. The “four-fold test” will show that respondent is the employer of petitioner‘s members. The involvement of F. Garil in the hiring process was only with respect to the recruitment aspect because the actual hiring itself was done through the deployment of personnel to establishments by Burlingame. Burlingame would pay the workers through F. Garil a certain sum per worker on the basis of eight-hour work every 15th and 30th of each calendar month which evinces the fact that F. Garil merely served as conduit in the payment of wages to the deployed personnel. Burlingame upon request to F. Garil may replace any personnel found to be inefficient, troublesome, uncooperative and not observing the rules and regulations set forth by it.
There is no doubt that F. Garil was engaged in labor-only contracting, and as such, is considered merely an agent of Burlingame. Since F. Garil is a labor-only contractor, the workers it supplied should be considered as employees of Burlingame in the eyes of the law.