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Maraguinot vs NLRC

Davide, Jr., J. | January 22, 1998

- Alejandro Maraguinot (Maraguinot) alleges that he was employed by Viva Films
(Viva) as part of the filming crew. He was later designated as Assistant
Electrician and then later promoted to Electrician.
- Paulinmo Enero (Enero) likewise claims that Viva hired him as a member of the
shooting crew.
- Maraguinot and Eneros tasks consisted of loading, unloading and arranging
movie equipment in the shooting area.
- They later asked the company that their salaries be adjusted in accordance with
the minimum wage law. In response, the company said that they would grant
the adjustment provided they signed a blank employment contract. When they
refused, they were forced to go on leave. Upon his return, the company refused
to take Enero back. As regards Maraguinot, he was dropped from the company
payroll, but was later returned. When again he refused to sign the blank
contract, his services were terminated.
- Maraguinot and Enero then sued for illegal dismissal.
- VIVA CLAIMS that they contract persons called producers/assistant producers
to make movies and contend that Maraguinot and Enero are project employees
of these producers who act as independent contractors. Hence there is no
employer-employee relationship between them. In addition, Viva claims that
Maraguinot was hired for the movie Mahirap Maging Pogi, while Enero was
hired for the movie Sigaw ng Puso.
- LABOR ARBITER: ruled in favor of Maraguinot and Enero and held that they were
employees of Viva and as such were illegally dismissed by the latter.
- NLRC: reversed the LA and ruled that the circumstances of the case showed that
they were only project employees of Viva.
- WON Maraguinot and Enero are employees of Viva.
- WON they were illegally dismissed.
- They were regular employees.
- They were illegally dismissed.
- Viva claims that the producers were job contractors.
o However, under Section 8 of Rule VIII, Book III of the Omnibus Rules
Implementing the Labor Code, to be considered a job contractor, such
associate producers must have tools, equipment, machinery, work
premises and other materials necessary to make motion picture. The
associate producers had none of these, and that in fact, the movie making
equipment is owned by Viva.
o Given that, these producers can be considered only as labor-only
contractors. As such is prohibited, the law considers the person or entity
engaged in the same a mere agent or intermediary of the direct employer.

BUT EVEN GIVEN THAT, these producers cannot be considered as job

contractors, much less labor-only contractors as they did not supply,
recruit nor hire the workers. In this case, it was Viva who recruited the crew
members from an available groups of freelance workers which include the
- The relationship between Viva and its producers seem to be that of agency as
the latter makes movies on behalf of Viva whose business is that of making
- The existence of an employer-employee relationship between Maraguinot &
Enero and Viva is further supported by the following:
o The four elements under 4-fold test are present.
o CONTROL: Viva has a Supervising Producer that monitors the progress of
the producers. Viva, in effect, controls the outcome of the film and the
means through which it is produced.
o SELECTION AND SUPERVISION: Viva issued appointment slips with their
corporate name as the heading.
o SALARIES: It was likewise Viva who paid the employees salaries.
- While Maraguinot and Enero were possibly initially hired as project employees,
they had attained the status of regular employees.
- A project employee or a member of a work pool may acquire the status
of a regular employee when the ff. concur:
o There is a continuous rehiring of project employees even after
cessation of the project.
o The tasks performed are vital, necessary and indispensable to the
usual business or trade of the employer.
- The length of time during which the employee was continuously rehired is not
controlling, but merely serves as a badge of regular employment.
- In this case, Enero was employed for 2 years and engaged in at least 18
projects; while Maragunot was employed for 3 years and worked on at least 23
- Citing Lao vs. NLRC, the could held that a work pool may exist although the
workers in the pool do not receive salaries and are free to seek other
employment during temporary breaks in the business, provided that the
workers shall be available when called to report for a project. Although primarily
applicable to regular seasonal workers, this setup can likewise be applied to
project workers in so far as the effect of temporary cessation of work is
- Once a project or work pool employee has been (a) continuously, as
opposed to intermittently, rehired by the same employer for the same
tasks or nature of tasks; (b) these tasks are vital, necessary, and
indispensable to the usual business or trade of the employer, then the
employee must be deemed a regular employee, pursuant to Article 280
of the Labor Code and jurisprudence.
- As Maraguinot and Enero have already gained the status of regular employees,
their dismissal was unwarranted since the cause invoked for their dismissal
(completion of the project) is not one of the valid causes for termination under
Article 282 of the Labor Code.