PHILIPPINE PIZZA v. PORRAS

 

PHILIPPINE PIZZA INC., v. PORRAS

[GR No. 230030, August 29, 2018]

 

FACTS:

On various dates, respondents were hired by CBMI, a job contractor which provides kitchen, delivery, sanitation, and allied services to PPI's Pizza Hut chain of restaurants (Pizza Hut), and were thereafter deployed to the various branches of the latter. Cayetano and Deloso worked as team members/service crew, while Avenido, Gurion, Recto, and Sumbang, Jr. served as delivery riders.

Respondents alleged that they rendered work for Pizza Hut, ranging from seven (7) to eleven (11) years, hence, they were regular employees of PPI and not of CBMI. They claimed to have been initially hired by PPI but were subsequently transferred to CBMI so as to prevent them from attaining their regular employment status. Despite the said transfer, however, they were still under the direct supervision of the managers of Pizza Hut and had been using its tools and machines for work. Thus, respondents, along with several others, filed separate complaints for Illegal Dismissal against PPI and CBMI.

For its part, PPI denied any employer-employee relationship with respondents, averring that it entered into several Contracts of Services with CBMI to perform janitorial, bussing, kitchen, table service, cashiering, warehousing, delivery, and allied services in PPI's favor. It also contended that respondents were assigned to various branches of Pizza Hut and were performing tasks in accordance with CBMI's manner and method, free from the direction and control of PPI.

On the other hand, CBMI admitted that respondents were its employees, and that it paid their wages and remitted their SSS, PhilHealth, and Pag-IBIG contributions. It insisted that it is a legitimate job contractor, as it possesses substantial capital and a Department of Labor and Employment (DOLE) Certicate of Registration; undertakes a business separate and distinct from that of PPI based on its Articles of Incorporation; and more importantly, retained and exercised the right of control over respondents. Moreover, CBMI explained that it had no choice but to recall, and subsequently, place respondents in oating status, considering that PPI had reduced its need for services in some Pizza Hut branches. Lastly, CBMI maintained that before it had the opportunity to re-assign respondents, the latter already led their complaints.

 

ISSUES:

Whether or not CBMI is engaged in a prohibited labor-only contracting arrangement with PPI

 

RULING

No, CBMI is not engaged in a prohibited labor-only contracting arrangement with PPI.\

CBMI is presumed to have complied with all the requirements of a legitimate job contractor, considering the Certificates of Registration issued to it by the DOLE. Although not a conclusive proof of legitimacy, the certification nonetheless prevents the presumption of labor-only contracting from arising. It gives rise to a disputable presumption that the contractor's operations are legitimate.

The NLRC was also correct in holding that CBMI has substantial capital and investment. Based on CBMI's 2012 General Information Sheet, it has an authorized capital stock in the amount of P10,000,000.00 and subscribed capital stock in the amount of P5,000,000.00, P3,500,000.00 of which had already been paid-up. Additionally, its audited financial statements 50 50 show that it has considerable current and non-current assets amounting to P85,518,832.00. Taken together, CBMI has substantial capital to properly carry out its obligations with PPI, as well as to sufficiently cover its own operational expenses.

More importantly, the NLRC correctly gave credence to CBMI's claim that it retained control over respondents, as shown by the deployment of at least one (1) CBMI supervisor in each Pizza Hut branch to regularly oversee, monitor, and supervise the employees' attendance and performance. This claim was further substantiated by CBMI's area coordinators, who admitted in their Affidavits that: (a) they oversee, monitor, and ensure CBMI employees' compliance with company policies, rules, and regulations, whichever Pizza Hut branch they may be assigned; (b) they are responsible for ensuring that CBMI employees perform their tasks and functions in the manner that CBMI mandates; (c) they regularly visit and monitor each area of deployment; (d) they track and confirm the attendance and punctuality of CBMI employees; and (e) they constantly inform CBMI's Human Resource Department (HRD) Manager of any company violations committed by the employees.

Furthermore, the existence of the element of control can also be inferred from CBMI's act of subjecting respondents to disciplinary sanctions for violations of company rules and regulations as evidenced by the various Offense Notices and Memoranda issued to them. Additionally, records show that CBMI employed measures to ensure the observance of due process before subjecting respondents to disciplinary action. In fact, CBMI's HRD Manager, Sarah G. Delgado, attested in her Affidavit that one of her duties is to make sure that due process is equally afforded to all erring CBMI employees before a disciplinary action is imposed upon them.

Lastly, the NLRC correctly found that no employer-employee relationship exists between PPI and respondents, and that the latter were employees of CBMI. Records reveal that respondents applied for work with CBMI and were consequently selected and hired by the latter. They were then required by CBMI to attend orientations and seminars wherein respondents were apprised of the working conditions, basic customer service, basic good grooming, and company rules and regulations. During the course of their employment, CBMI paid their wages and remitted/paid their SSS, PhilHealth, and Pag-IBIG contributions. CBMI also exercised the power of discipline and control over them as discussed in the preceding paragraphs.

From all indications, the Court finds that CBMI is a legitimate job contractor, and thus, the employer of respondents.