GR 182018; (October, 2012) (Digest)
G.R. No. 182018 October 10, 2012
NORKIS TRADING CORPORATION, Petitioner, vs. JOAQUIN BUENA VISTA, HENRY FABROA, RICARDO CAPE, BERTULDO TULOD, WILLY DONDOYANO and GLEN VILLARASA, Respondents.
FACTS
Respondents were hired by petitioner Norkis Trading Corporation, a manufacturer of Yamaha motorcycles, on various dates between 1993 and 1994 as welders and machine operators. They performed skilled work using Norkis-owned machines and materials within the company premises, under the direct supervision and control of Norkis’s leadmen and production supervisor, and received their salaries from Norkis’s accounting personnel. However, they were not treated as regular employees but were instead considered members of Panaghiusa sa Kauswagan Multi-Purpose Cooperative (PASAKA), which was presented as an independent contractor supplying labor to Norkis. After filing a DOLE complaint for labor-only contracting, respondents were suspended and eventually dismissed by PASAKA for alleged violations of cooperative rules.
ISSUE
The core issue is whether an employer-employee relationship existed between Norkis Trading and the respondents, making Norkis liable for illegal dismissal, or whether the respondents were legitimately employees of the cooperative PASAKA.
RULING
The Supreme Court ruled that an employer-employee relationship existed between Norkis Trading and the respondents, making Norkis their true employer. The Court applied the four-fold test: (1) the selection and engagement of the employees; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control, which is the most determinative element. The evidence showed Norkis exercised control over respondents’ work, as they used Norkis’s tools and equipment, performed work integral to Norkis’s main business, and were supervised by Norkis personnel. The setup constituted labor-only contracting, where the contractor (PASAKA) merely supplied workers to a principal (Norkis). In labor-only contracting, the workers are deemed employees of the principal. Consequently, the suspension and dismissal effected by PASAKA were acts attributable to Norkis. Having found the dismissals to be without just or authorized cause and due process, the Court affirmed the award of reinstatement and full backwages to the respondents.