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Chavez vs.

NLRC,
G.R. No. 146530, January 17, 2005
Facts Chavez was hired by herein private respondent-employer Supreme
Packaging, Inc. as a truck driver on October !, "#$%. &he company
'urnished Chavez with a truck, and Chavez was tasked to deliver the
company(s products 'rom its 'actory in )ataan to various customers in *etro
*anila. *ost o' Chavez(s delivery trips were made in the nighttime, starting
at the 'actory on +P*, and returning thereto in the a'ternoon two or three
days later. &he company gave Chavez ,routing slips-, which indicated the
chronological order in which the deliveries were to be made. Some deliveries
were printed with the words ./S0, which indicated that Chavez had to give
1rst priority in delivering these products to certain customers. Initially, the
company paid him P2!34trip 'or his services, which was later increased to
P%$3, then P#33. In "##, Chavez talked to the company(s plant manager
and e5pressed his desire to avail o' the regular bene1ts that the regular
employees o' the company were receiving, such as overtime pay, night shi't
di6erential, and "2
th
month pay, among others. &he plant manager, herein
co-respondent 7lvin 8ee, promised to give these bene1ts to Chavez, but
subse9uently 'ailed to do so. On :ebruary 3, "##!, Chavez 1led a complaint
'or regularization with the .egional 7rbitration )ranch ;o. III o' the ;8.C in
San :ernando, Pampanga. )e'ore the case could be heard, however,
Supreme Packaging, Inc. terminated Chavez(s services as truck driver.
Conse9uently, on *ay !, "##!, Chavez 1led an amended complaint against
the respondents 'or illegal dismissal, un'air labor practice, and non-payment
o' overtime pay, night shi't di6erential pay, "2
th
month pay, and other
bene1ts. &he company 'or its part denied the e5istence o' an employer-
employee relationship between it and Chavez, averring that Chavez was an
independent contractor as evidenced by the ,Contract o' Service- that
Chavez and the company entered into. Said Contract o' Service stated, inter
alia, that <a= Chavez is designated as a Contractor, <b= due to the volume o'
the products, the Contractor is 'ree to hire his own two helpers, over whom
he shall have absolute control and disciplinary power, <c= the Contractor shall
e5ercise direct control over his work, but accountable to the Principal <the
company= 'or any damaged or lost goods, and <d= that ,the Contractor shall
hold the Principal 'ree and harmless 'rom any liability or claim that may arise
by virtue o' the Contractor(s non-compliance to the e5isting provisions o' the
*inimum >age 8aw, the ?mployees Compensation 7ct, the Social Security
System 7ct 555 it being clearly understood that any truck drivers, helpers or
men working with and 'or the Contractor, are not employees who will be
indemni1ed by the Principal 'or any such claim.- &here'ore, said the
company, since Chavez had sole control over the means and methods by
which his work was to be accomplished and even e5ercised control over his
helpers and paid their wages, Chavez was not a regular worker sub@ect to
regularization.
!ssue &he core issue is whether or not there was employer-employee
relationship.
Ru"#n$ Aes there was. &he Supreme Court applied the 'our-'old test in this
wiseB <"= the company undeniably engaged the services o' Chavez as a truck
driver, <= Chavez(s being paid on a per delivery4trip basis was merely a
method o' computing compensation, and thus Chavez was de1nitely paid
wages in contemplation o' 7rticle #C<'= o' the 8abor Code, <2= the company(s
power o' dismissal over Chavez was inherent in the 'act that they engaged
his services, and the company e5ercised this power when they terminated
Chavez. 7s to the 'ourth and all-important ,control test-, the Court compared
an independent contractor to an employee, and de1ned an independent
contractor as ,one who carries on a distinct and independent business and
undertakes to per'orm the @ob, work, or service on its own account and under
its own responsibility according to its own manner and method, 'ree 'rom the
control and direction o' the principal in all matters connected with the
per'ormance o' the work e5cept as to the results thereo'.- In this case, the
Court said that Chavez per'ormed his work as a truck driver not as an
independent contractor but an employee 'or and under the company(s
supervision and control, 'or the reasons thatB <a= Chavez did not have
substantial capitalization 'or his own tools, machinery, or work premises, in
that even the truck driven by Chavez belonged to the company, <b= Chavez
was speci1cally ordered by the company to use the truck 'or the delivery
only o' the company(s products, and even to park the truck only at two
parking spaces designated by the company, <c= the manner and method in
which the delivery itsel' was to be made was directed by the company
through the ,routing slips-, and <d= Chavez per'ormed his services
e5clusively 'or the company 'or an uninterrupted period o' ten years. &hese
'acts show that notwithstanding the ,Contract o' Service-, an employer-
employee relationship e5isted, and ,cannot be negated by e5pressly
repudiating it in a contract and providing therein that the employee is an
independent contractor when, as in this case, the 'acts clearly show
otherwise. Indeed, the employment status o' a person is de1ned and
prescribed by law and not by what the parties say it should be.-