NAME: Michelle C.

Llaneta-Villamora YEAR/COURSE/SECTION: JD-2A

Case No. 32.

Hijos De F. Escano, Inc., v NLRC, G.R. No. 59229, 22 August 1991

ISSUE: Is Hijos De F. Escano availing the services of stevedores for their shipping business,
considered as their employer and should be liable for their reinstatement and payment of
back wages.

ARGUMENT OF THE PETITIONER (Escano): No employment relationship existed with his

company and the stevedores. Likewise, their payroll, SSS and Medicare contributions
are paid by PIER 8 A&S.

ARGUMENT OF THE RESPONDENT (NLRC et.al.): PIER 8 A&S was a labor only
contractor and that Escano was the principal employer of the stevedores. The stevedores’
claims that since they had long been providing services for Escano vessels they should
also be considered employees of Escano. Their duty and work assignments are under the
close supervision of the supervisors of Escano. Hijos De F. Escaṅo owns the
machineries, equipment and other facilities used in the performance of their work, the
jobs they were performing are indispensable part of the business of Escaṅo, and that
PIER 8 A&S merely acted as middleman who supplied workers to Hijos De F. Escaṅo.

SC RULING: No. The stevedores are not employees of Hijos De F. Escaṅo and it is not liable
for their reinstatement and payment of back wages.

RATIO: Hijos De F. Escaṅo is a corporation engaged in inter-island shipping business.

Considering that, a shipping company is not normally or customarily engaged in
stevedoring and arrastre activities it contracts with other companies offering those
services. Hence, employees of stevedoring company should not be considered as
employees of the shipping company. Considering the absence of employer-employee
relationship Hijos De F. Escaṅo is not liable for reinstatement and payment of back
wages of the stevedores.

INSTRUCTION LEARNED: Stevedoring involves the loading and unloading of cargo on or

from a vessel on a port; it includes handling of cargo from the hold of the ship to the
dock or to a barge and the loading on a ship of outgoing cargo. On the other hand,
arrastre services involves the handling of cargo deposited on the wharf or between the
establishments of the shipper and the ships tackle. Although their services are
indispensable in a shipping business, their employees could not be considered as
employees of the shipping business, because the nature of the services they provide are
different from that of the latter.