G.R. No.

L-48645 January 7, 1987

Brotherhood vs. Zamora

Facts: The petitioners are workers who have been employed at the San Miguel Parola
Glass Factory as “pahinantes” or “kargadors” for almost seven years. They worked
exclusively at the SMC plant, never having been assigned to other companies or
departments of San Miguel Corp, even when the volume of work was at its minimum.
Their work was neither regular nor continuous, depending on the volume of bottles to be
loaded and unloaded, as well as the business activity of the company. When any of the
glass furnaces suffered a breakdown, making a shutdown necessary, the petitioners
work was temporarily suspended. Thereafter, the petitioners would return to work at the
glass plant. However, work exceeded the eight-hour day and sometimes, necessitated
work on Sundays and holidays. But they were neither paid overtime nor compensation.

So the workers organized and affiliated themselves with Brotherhood Labor Unity
Movement (BLUM). They wanted to be paid to overtime and holiday pay. They pressed
the SMC management to hear their grievances. BLUM filed a notice of strike with the
Bureau of Labor Relations in connection with the dismissal of some of its members. San
Miguel refused to bargain with the union alleging that the workers are not their
employees but the employees of an independent labor contracting firm, Guaranteed
Labor Contractor.

The workers were then dismissed from their jobs and denied entrance to the glass
factory despite their regularly reporting for work. A complaint was filed for illegal
dismissal and unfair labor practices.

Issue: WoN there exists Employer-employee relationship between petitioner workers

and SMC

Ruling: In determining the existence of an employer-employee relationship, the

elements that are generally considered are the following: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer's power to control the employee with respect to the means and
methods by which the work is to be accomplished. It is the "control test" that is the most
important element.

Petitioners worked continuously and exclusively for an average of 7 years for the
company. Considering the length of time that the petitioners have worked with the
company, there is justification to conclude that they were engaged to perform activities
necessary or desirable in the usual business or trade of SMC, and the petitioners are,
therefore regular employees.

Even assuming that there is a contract of employment executed between

SMC and the said labor contractor, the court ruled that Guaranteed and Reliable Labor
contractors have neither substantial capital nor investment to qualify as an independent
contractor under the law. The premises, tools and equipment used by the petitioners in
their jobs are all supplied by SMC. It is only the manpower or labor force which the
alleged contractors supply, suggesting the existence of a "labor only" contracting
scheme prohibited by law.

It is important to emphasize that in a truly independent contractor-contractee

relationship, the fees are paid directly to the manpower agency in lump sum without
indicating or implying that the basis of such lump sum is the salary per worker multiplied
by the number of workers assigned to the company. The alleged independent
contractors in the case at bar were paid a lump sum representing only the salaries the
workers were entitled to, arrived at by adding the salaries of each worker which depend
on the volume of work they had accomplished individually.

The power of dismissal by the employer was evident when the petitioners had already
been refused entry to the premises. The petitioners were dismissed allegedly because
of the shutdown of the glass manufacturing plant. Shutdown was merely temporary, one
of its furnaces needing repair. Operations continued after such repairs.It is apparent that
the closure of the warehouse was a ploy to get rid of the petitioners, who were then
agitating the company for reforms and benefits.

The inter-office memoranda submitted in evidence prove the company’s control over the
workers. That San Miguel has the power to recommend penalties or dismissal is the
strongest indication of the company’s right of control over the workers as direct
employer. If the entity has the power to control the means and method for ht
accomplishment of the work, that entity has authority over the employee

Kahit na 3 out of 4 points yung nasa agency, aas long as nasa San Mig yung power to
control and supervise, employees ng san mig pa rin yung mga petitioners because it
shows authority of the company over them. The most important talaga is the 4 th power