Labor Law, Employer-Employee Relationship
Quotable Quote (Justice Garcia):
“The contrivances may be many and the schemes ingenious and imaginative. But this Court will not hesitate to put pen to a line and defend the worker’s right to be secure in his (or her) proprietary right to regular employment and his right to a secure employment..”
FACTS:San Miguel Corporation (SMC) seeks to reverse a Court of Appeals (CA) decision which affirmed an NLRC declaration that private respondent Rafael Maliksi (Maliksi) is a regular employee of SMC and must be reinstated with benefits.
Maliksi in October 16, 1990 sued SMC-Magnolia Division and Philippine Software Services and Education Center (PHILSSEC) for them to recognize him as a regular employee. Later on the same case he included the charge of illegal dismissal when petitioners terminated his services later that month. Maliksi’s employment record shows he served SMC alternately as budget head, accounting clerk and acting clerk under Skillpower, Lipercon and PHILSSEC between 1981 up to February 1985 “for periods spread apart,” or for at least three years and seven months.
Respondent Maliksi maintained that he is an employee of SMC-Magnolia and that Lipercon, Skillpower, Inc. and PHILSSEC are labor-only contractors, none being his employer. PHILSSEC meanwhile disclaimed liability as it catered only to computerized accounting needs of businesses like SMC-Magnolia, PHILSSEC’s principal function being that of manual control of data needed during the computerization. PHILSSEC added that it controlled Maliksi’s work, paid his salary and required him to report directly to it. Maliksi was terminated because the project was completed on October 31, 1990. SMC for its part basically asserted the same, contending that PHILSSEC exercised exclusive managerial prerogative over the complainant as to hiring, payment of salary, dismissal and the control over his work. It was interested only in the result of the work specified in the contract but not as to the means and methods of accomplishing the same. Also, PHILSSEC has substantial capital of its own. What it markets to clients are computer programs and training systems on computer technology and not the usual labor or manpower supply to establishment concerns. Further, SMC said, Maliksi’s service has no relation to the principal business of SMC, which is food and beverage.
The Labor Arbiter declared Maliksi a regular employee of PHILSSEC and absolved SMC from liability. Maliksi appealed to the NLRC which in turn reversed the Labor Arbiter’s decision, ordering SMC-Magnolia Division to reinstate him without loss of seniority rights and with full benefits. When the case reached the CA, the latter affirmed in toto the NLRC’s decision, finding Lipercon and Skillpower as mere conduits to circumvent Article 280 of the Labor Code, employing Maliksi as contractual or project employee through these entities, thereby undermining his right to gain regular employment status under the law. The CA agreed with the NLRC that Maliksi’s work was necessary or desirable in the business of SMC in its Magnolia Division, for more than the required one-year period, and that he became permanent and regular with SMC after the statutory period of one year of service. The CA also concluded that on account of his past employment contracts with SMC under Lipercon and Skillpower, Maliksi was already a regular employee of SMC when he entered into SMC’s computerization project as part of the PHILSSEC project complement.
ISSUE:
Whether or not Maliksi was a regular employee of SMC?
HELD:
Petition DENIED. Maliksi is a regular employee of SMC. Lipercon and Skillpower are labor-only contractors providing as they do personnel services to the public for a fee. There is an employer-employee relationship and the Court gives due deference to this factual findings of both the NLRC and the CA. Having served SMC for an aggregate period of more than three (3) years through employment contracts with these Lipercon and Skillpower, Maliksi should be considered as SMC’s regular employee. The fact is that he was hired and re-hired by SMC to perform administrative and clerical work that was necessary to SMC’s business on a daily basis.
In Bustamante v. National Labor Relations Commission, the Court ruled that petitioners were employees engaged to perform activities necessary in the usual business of the employer. The contract for probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade paying them the benefits attached to such status. They were hired and re-hired in a span of from two to four years to do the same type of work which conclusively shows the necessity of petitioners’ service to the respondent company’s business.
With respect to PHILSSEC, there was no need for Maliksi to be employed under the former’s computerization program to be considered a regular employee of SMC at the time. Moreover, SMC itself admits that Maliksi’s work under the computerization program did “not require the operation of a computer system, such as the software program being developed by PHILSSEC.” Maliksi’s work under the PHILSSEC project was mainly administrative in nature and necessary to the development of SMC’s business.
Maliksi was juggled from one employment contract to another in a continuous bid to circumvent labor laws. The act of hiring and re-hiring workers over a period of time without considering them as regular employees evidences bad faith on the part of the employer making it liable to pay damages. The contrivances may be many and the schemes ingenious and imaginative. But this Court will not hesitate to put pen to a line and defend the worker’s right to be secure in his (or her) proprietary right to regular employment and his right to a secure employment, viz, one that is free from fear and doubt, that anytime he could be removed, retrenched, his contract not renewed or he might not be re-hired.
Considering, however, the supervening event that SMC’s Magnolia Division has been acquired by another entity, respondent Maliksi’s reinstatement it appears is no longer feasible. Instead, he should be awarded separation, in addition to the other monetary awards, pay as an alternative. Likewise, owing to petitioner’s bad faith in juggling the latter from one labor contractor to another, it should be held liable to pay nominal damages for causing undue injury and inconvenience to the private respondent in its contractual hiring-firing-rehiring scheme and for denying him his proprietary right to regular employment.
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