Respondent Asahi Glass Philippines entered into a service contract with San Sebastian Allied Services whereby the latter undertook to provide the former with the necessary manpower for its glass manufacturing business. Pursuant to the contract, SSASI hired herein petitioners as glass cutters and quality controllers all assigned to work for respondent. Sometime after, respondent terminated its service contract with SSASI which in turn terminated the employment of petitioners. Petitioners then filed complaints before the Labor Arbiter asserting they should be considered regular employees of the respondent as they are performing functions which are directly related to its business. Respondent contends that petitioners were employees of SSASI a legitimate job contractor. The Labor Arbiter dismissed the complaint but on appeal was reversed by the NLRC tribunal declaring SSASI a labor-only contractor. CA reversed said decision and denied reconsideration.
Whether or not SSASI is a labor-only contractor.
An important element of legitimate job contracting is that the contractor has substantial capital or investment, which respondent failed to prove. The Court did not find a single financial statement or record to attest to the economic status and financial capacity of SSASI to venture into and sustain its own business independent from petitioner.
Furthermore, the Court is unconvinced by respondent’s argument that petitioners were performing jobs that were not directly related to respondent’s main line of business. Respondent is engaged in glass manufacturing. One of the petitioners served as a quality controller, while the rest were glass cutters. Petitioners supplemented the regular workforce when the latter could not comply with the market’s demand; necessarily, therefore, petitioners performed the same functions as the regular workforce. The indispensability of petitioners’ services was fortified by the length and continuity of their performance, lasting for periods ranging from three to 11 years.
More importantly, the Court finds that the crucial element of control over petitioners rested in respondent. In the instant case, petitioners worked at the respondent’s premises, and nowhere else. Petitioners followed the work schedule prepared by respondent. They were required to observe all rules and regulations of the respondent pertaining to, among other things, the quality of job performance, regularity of job output, and the manner and method of accomplishing the jobs.
SSASI is a labor-only contractor; hence, it is considered as the agent of respondent. Respondent is deemed by law as the employer of petitioners.