GR 120466; (May, 1999) (Digest)
G.R. No. 120466 May 17, 1999
Coca Cola Bottlers Phils., Inc., petitioner, vs. National Labor Relations Commission and Ramon B. Canonicato, respondents.
FACTS
Petitioner Coca Cola Bottlers Phils., Inc. (COCA COLA) entered into a yearly contract for janitorial services with Bacolod Janitorial Services (BJS), an independent contractor. The contract stipulated that BJS would provide personnel, equipment, and supervision for cleaning COCA COLA’s premises. Private respondent Ramon Canonicato was hired as a casual employee by COCA COLA in 1989 but was terminated in April 1990. He was later engaged for short-term painting projects. On April 1, 1991, BJS hired Canonicato as a janitor and assigned him to COCA COLA. In June 1993, Canonicato filed a complaint for regularization against COCA COLA before the Labor Arbiter, later amending it to illegal dismissal. He stopped reporting to his BJS assignment. BJS advised him to return to work and later sent a notice considering him to have abandoned his job.
ISSUE
The core issue is whether an employer-employee relationship existed between COCA COLA and Canonicato, making him COCA COLA’s regular employee entitled to reinstatement and back wages.
RULING
The Supreme Court ruled that no employer-employee relationship existed between COCA COLA and Canonicato. The Court applied the four-fold test: selection and engagement, payment of wages, power of dismissal, and power of control. The evidence showed BJS hired, paid, and had the power to dismiss Canonicato. COCA COLA’s contract with BJS explicitly designated BJS as an independent contractor responsible for supplying and supervising its own personnel. The Court found BJS to be a legitimate job contractor, possessing substantial capital, investment, and tools, and it serviced other clients besides COCA COLA. The existence of a service contract between COCA COLA and BJS, which was not shown to be a mere labor-only contracting scheme, negated a direct employment relationship. Consequently, Canonicato remained an employee of BJS. The NLRC erred in applying Article 280 of the Labor Code to deem Canonicato a regular employee of COCA COLA merely because janitorial work was necessary to its business. The correct test is the existence of an employer-employee relationship, which was absent. The Supreme Court reinstated the Labor Arbiter’s decision, holding BJS and COCA COLA solidarily liable only for Canonicato’s monetary claims (wage differentials and 13th month pay) under Article 106 of the Labor Code, but absolving COCA COLA from the illegal dismissal complaint and the obligation to reinstate.