GR 160506; (June, 2011) (Digest)
G.R. No. 160506, June 6, 2011
JOEB M. ALIVIADO, ET AL., Petitioners, vs. PROCTER & GAMBLE PHILS., INC., and PROMM-GEM INC., Respondents.
FACTS
Petitioners worked as merchandisers for Procter & Gamble Phils., Inc. (P&G) from various dates starting as early as 1982 or as late as 1991, until their dismissals on either May 5, 1992, or March 11, 1993. They individually signed employment contracts with either Promm-Gem Inc. or Sales and Promotions Services (SAPS) for periods of approximately five months at a time. They were assigned to different outlets to handle P&G products, received wages from Promm-Gem or SAPS, and were subjected to disciplinary measures by these agencies. P&G, engaged in manufacturing consumer products, entered into contracts with Promm-Gem and SAPS for product promotion and merchandising. In December 1991, petitioners filed a complaint against P&G for regularization, service incentive leave pay, and other benefits, later amended to include their dismissal. The Labor Arbiter dismissed the complaint, finding no employer-employee relationship between petitioners and P&G, and ruling that Promm-Gem and SAPS were legitimate independent contractors. The NLRC affirmed this decision. The Court of Appeals affirmed the NLRC but ordered P&G to pay service incentive leave pay.
ISSUE
Whether the Court of Appeals committed reversible error in not finding grave abuse of discretion by the public respondents, given that petitioners proved respondent P&G was their true employer, and Promm-Gem and SAPS were engaged in labor-only contracting.
RULING
The Supreme Court granted the petition. It ruled that Promm-Gem and SAPS were labor-only contractors, making P&G the statutory employer of petitioners. The Court found that petitioners performed work directly related to P&G’s main business of manufacturing and selling consumer products, and P&G exercised control over petitioners through its representatives who monitored their work and enforced company policies. Petitioners were regular employees of P&G, and their dismissal without just cause and due process was illegal. P&G was ordered to reinstate petitioners and pay full backwages, inclusive of allowances and other benefits, from the time of dismissal until actual reinstatement. The award of service incentive leave pay by the Court of Appeals was affirmed.