Maraguinot v. Viva Films, Jan.

22, 1998 CABADING

FACTS: Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the
filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their request
that their salary be adjusted in accordance with the minimum wage law. On June 1992, Mrs. Cesario,
their supervisor, told them that Mr. Vic Del Rosario would agree to their request only if they sign a blank
employment contract. Petitioners refused to sign such document. After which, the Mr. Enero was forced
to go on leave on the same month and refused to take him back when he reported for work. Mr.
Maraguinot on the other hand was dropped from the payroll but was returned days after. He was again
asked to sign a blank employment contract but when he refused, he was terminated. Consequently, the
petitioners sued for illegal dismissal before the Labor Arbiter. The private respondents claim the
following: (a) that VIVA FILMS is the trade name of VIVA PRODUCTIONS, INC. and that it was primarily
engaged in the distribution & exhibition of movies- but not then making of movies; (b) That they hire
contractors called ´producersµ who act as independent contractors as that of Vic Del Rosario; and (c) As
such, there is no employee-employer relation between petitioners and private respondents. 20 of 231
The Labor Arbiter HELD that the complainants are employees of the private respondents. That the
producers are not independent contractor but should be considered as labor-only contractors and as
such act as mere agent of the real employer. Thus, the said employees are illegally dismissed. The
private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter declaring
that the complainants were project employees due to the ff. reasons: (a) Complainants were hired for
specific movie projects and their employment was coterminus with each movie project; (b)The work is
dependent on the availability of projects. As a result, the total working hours logged extremely varied;
(c) The extremely irregular working days and hours of complainants work explains the lump sum
payment for their service; and (d) The respondents alleged that the complainants are not prohibited
from working with other movie companies whenever they are not working for the independent movie
producers engaged by the respondents. A motion for reconsideration was filed by the complainants but
was denied by NLRC. In effect, they filed an instant petition claiming that NLRC committed a grave abuse
of discretion in: (a) Finding that petitioners were project employees; (b) HELD that petitioners were not
illegally dismissed; and (c) Reversing the decision of the Labor Arbiter. In the instant case, the petitioners
allege that the NLRC acted in total disregard of evidence material or decisive of the controversy. ISSUE:
Whether there exist an employeeemployer relationship between the petitioners and the private
respondents. HELD: There exist an employee- employer relationship between the petitioners and the
private respondents because of the ff. reasons that nowhere in the appointment slip does it appear that
it was the producer who hired the crew members. Moreover, it was VIVA·V corporate name appearing
on heading of the slip. It can likewise be said that it was VIVA who paid for the SeWLWLRQeUV· salaries.
Respondents also admit that the petitioners were part of a work pool wherein they attained the status
of regular employees because of the ff. requisites: (a) There is a continuous rehiring of project
employees even after cessation of a project; (b) The tasks performed by the alleged ´SURMecW ePSOR\
eeVµ are vital, necessary and indispensable to the usual business or trade of the employer; and (c)
However, the length of time which the employees are continually rehired is not controlling but merely
serves as a badge of regular employment. Since the producer and the crew members are employees of
VIVA and that these ePSOR\eeV· works deal with the making of movies. It can be said that VIVA is
engaged of making movies and not on the mere distribution of such. The producer is not a job
contractor because of the ff. reasons: (Sec. Rule VII, Book III of the Omnibus Rules Implementing the
Labor Code.) a. A contractor carries on an independent business and undertakes the contract work on
his own account under his own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with the performance of the
work except as to the results thereof. The said producer has a fix time frame and budget to make the
movies. b. The contractor should have substantial capital and materials necessary to conduct his
business. The said producer, Del Rosario, does not have his own tools, equipment, machinery, work
premises and other materials to make motion pictures. Such materials were provided by VIVA. It can be
said that the producers are labor-only contractors. Under Article 106 of the Labor Code (reworded)
where the contractor does not have the requisites as that of the job contractors