Jang Lim v. NLRC (G.R. No. 124630)

Facts:

Respondent Cotabato Timberland Company Inc is a company engaged in the production and manufacture of plywood and veneer. Respondent tapped and hired Teddy Arabi whose main task is simply to recruit herein petitioners to perform milling and pilling works. Being exploited and underpaid, a group of disgruntled workers filed a complaint for unpaid labor standards benefits against CTCI. The parties settled but CTCI made it appear that Arabi was petitioners’ employer and the one who paid their claims. Subsequently, after being warned that management was dissatisfied with their work performance, CTCI terminated petitioners without due process. Thus, petitioners filed a complaint for illegal dismissal and payment of monetary claims against CTCI. The Labor Arbiter found in favor of petitioners. NLRC tribunal reversed the decision stating that no employer-employee relationship existed between petitioners and CTCI, and that Teddy Arabi being an independent contractor was the real employer of petitioners.

Issues:

(1) Whether or not petitioners are employees of CTCI.

(2) Whether or not Teddy Arabi is an independent contractor.

Ruling:

(1) YES. CTCI exercised the power of control over the employees. The work activities and schedules of petitioners were set by CTCI. Evidence of CTCI’s absolute control and supervision over the manner and conduct of work of the petitioners can be established from the following: (1) the manning/shifting schedules of the petitioners were entirely prepared and approved by CTCI; and (2) photocopies of the company identification cards bearing the name of the CTCI and likewise countersigned by CTCI’s Personnel Officer. Also, the fact that petitioners herein were advised that “the management of CTCI has been dissatisfied with their work performance and production output results” undoubtedly indicate CTCI’s power to regulate and direct the means and methods to be utilized in petitioners’ work. We find that the petitioners performed usual, regular and necessary services for petitioner’s production of goods. In Zanotte Shoes v. NLRC, it was held that there is an employer-employee relationship where the work performed is clearly related to, and in the pursuit of, the principal business activity of the employer.

(2) NO. The allegations that Arabi has sufficient capitalization or that he has investments in the form of tools, equipment, machineries, and work premises, are entirely unsubstantiated. In our view what clearly appears here is that Arabi is a mere agent of CTCI. His only job is to recruit and hire manpower as needed. Arabi is definitely not an independent contractor. Therefore, it is not Arabi but CTCI which is responsible to petitioners who must be deemed employed not by Arabi but by the company.

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