GR L 29590; (September, 1982) (Digest)
G.R. No. L-29590 September 30, 1982
PHILIPPINE REFINING CO., INC. vs. COURT OF APPEALS, SOCIAL SECURITY COMMISSION, SOCIAL SECURITY SYSTEM, BUKLOD NG MANGGAGAWA and VICENTE GARCIA
FACTS
Petitioner Philippine Refining Company is engaged in extracting and refining oil from copra. Respondent Vicente Garcia started working for the company in 1922. By 1948, he was a foreman overseeing 22 workers under a pakiao (piece-rate) arrangement, with the company paying the workers directly. In 1955, the arrangement was formalized in writing, granting Garcia authority to hire men, with compensation on a volume basis per metric ton of copra handled. The workers’ tasks—unloading, storing, and delivering copra to the mill—were essential, permanent, and integral to the company’s operations. When the Social Security Act was implemented, the company did not report these workers for coverage, contending Garcia was an independent contractor and the workers were his employees.
ISSUE
Whether an employer-employee relationship exists between Philippine Refining Company and the workers under Vicente Garcia for purposes of compulsory coverage under the Social Security Act.
RULING
The Supreme Court affirmed the decisions of the Social Security Commission and the Court of Appeals, ruling that an employer-employee relationship exists. The Court applied the control test, which examines whether the employer controls or has the right to control the employee not only as to the result of the work but also as to the means and methods by which it is accomplished. The facts demonstrate that the company exercised positive and direct control over the handling of copra, a basic raw material integral to its business. Company employees dictated where to store copra, when to bring it out, how much to load, and what class to handle. The company owned the conveyor and controlled its operation. Garcia had no independent office, no funds to pay workers apart from the lump sums received from the company, and worked exclusively for the company. He denied being an independent contractor. The work was a permanent and indispensable part of the company’s operations, not an incidental project. Given the constitutional mandate for social security and the presumption in favor of coverage, assertions of an independent contractor relationship are subject to rigorous scrutiny. The control test was more than satisfactorily met, establishing the company as the employer.