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    Coca Cola Bottlers V. Agito

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    Salman Johayr
    The Supreme Court ruled that Interserve was a labor-only contractor and not a legitimate job contractor in its case with Coca Cola. Labor-only contracting occurs when the contractor does not have substantial capital or investment and the workers perform activities directly related to the principal's business. Here, Interserve did not have substantial capital and the workers it supplied worked as salesmen for Coca Cola. In another case, the Supreme Court also found that FCCSI was a labor-only contractor and not an independent contractor when it supplied bill collectors to Manila Water. FCCSI did not have substantial capitalization for its size and number of workers, and it was Manila Water that provided the necessary equipment for the contracted work. The

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    Coca Cola Bottlers V. Agito

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    Salman Johayr
    35 views2 pages
    The Supreme Court ruled that Interserve was a labor-only contractor and not a legitimate job contractor in its case with Coca Cola. Labor-only contracting occurs when the contractor does not have substantial capital or investment and the workers perform activities directly related to the principal's business. Here, Interserve did not have substantial capital and the workers it supplied worked as salesmen for Coca Cola. In another case, the Supreme Court also found that FCCSI was a labor-only contractor and not an independent contractor when it supplied bill collectors to Manila Water. FCCSI did not have substantial capitalization for its size and number of workers, and it was Manila Water that provided the necessary equipment for the contracted work. The

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    LABSTAN SET2

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    The Supreme Court ruled that Interserve was a labor-only contractor and not a legitimate job contractor in its case with Coca Cola. Labor-only contracting occurs when the contractor does not have substantial capital or investment and the workers perform activities directly related to the principal's business. Here, Interserve did not have substantial capital and the workers it supplied worked as salesmen for Coca Cola. In another case, the Supreme Court also found that FCCSI was a labor-only contractor and not an independent contractor when it supplied bill collectors to Manila Water. FCCSI did not have substantial capitalization for its size and number of workers, and it was Manila Water that provided the necessary equipment for the contracted work. The

    Copyright:

    © All Rights Reserved
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    Download as docx, pdf, or txt
    35 views2 pages

    Coca Cola Bottlers V. Agito

    Uploaded by

    Salman Johayr
    The Supreme Court ruled that Interserve was a labor-only contractor and not a legitimate job contractor in its case with Coca Cola. Labor-only contracting occurs when the contractor does not have substantial capital or investment and the workers perform activities directly related to the principal's business. Here, Interserve did not have substantial capital and the workers it supplied worked as salesmen for Coca Cola. In another case, the Supreme Court also found that FCCSI was a labor-only contractor and not an independent contractor when it supplied bill collectors to Manila Water. FCCSI did not have substantial capitalization for its size and number of workers, and it was Manila Water that provided the necessary equipment for the contracted work. The

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    COCA COLA BOTTLERS V.

    AGITO,
    G.R. No. 179546. December 13, 2009

    FACTS:
    Coca-Cola (Coke) is a domestic corporation, who engaged the services of Interserve as
    a manning agency. Respondents in this case were deployed by Interserve. Respondents were
    salesmen assigned at the Lagro Sales Office of Coke. Respondents alleged that they were
    employed by Coke for years, but were not regularized. Their employment was terminated by
    Coke. This prompted the respondents to file a complaint for regularization and reinstatement.

    In its defense, Coke alleged that respondents were not their employees as evidenced by
    the Contract of Coke with Interserve. The contract constituted a legitimate job contracting.

    ISSUE:
    W/N Interserve is a legitimate job contractor.

    HELD:
    No. Interserve is a labor-only contractor. The law clearly establishes an employer-
    employee relationship between the principal employer and the contractor’s employee upon a
    finding that the contractor is engaged in labor-only contracting. There is labor-only contracting
    where: (1) the person supplying workers to an employee does not have substantial capital or
    investment in the form of tools, equipment, machineries, work premises, among others, and the
    (2) workers recruited and placed by such persons are performing activities which are directly
    related to the principal business of such employer.
    In this case, both indicators are present. First, although there is no absolute figure for
    what is considered a substantial capital, the court measures the same against the type of work
    which the contractor obligated to perform for the principal. In this case, the Contract does not
    specify the work or project to be performed by the respondents. Further, in Interserve’s Articles
    of Incorporation, its primary purpose is in the business of janitorial and allied services. Yet, the
    respondents were hired as salesmen and leadman of coke. The contractor, not the employee,
    has the burden of proof that it has the substantial capital, investment, and tool to engage in job
    contracting. Having failed to establish the substantial capital of Interserve, the Court will not
    presume that Interserve had sufficient investment in service vehicles and equipment, especially
    since respondents’ allegation that they were equipment.
    MANILA WATER V. DALUMPINES
    G.R. No. 175501, October 04, 2010

    Facts:
    Petitioner Manila Water Company, Inc. (Manila Water) was one of two private
    concessionaires contracted by the MWSS to manage the water distribution system in the east
    zone of Metro Manila. Under the concession agreement, Manila Water absorbed the regular
    employees of MWSS including the individual respondents. Manila Water engaged their services
    without written contract from August 1, 1997 to August 31, 1997. On September 1, 1997,
    individual respondents signed a 3-month contract to perform collection services on commission
    basis for Manila Waters branches in the east zone. Before the expiration of the contract of
    services, the 121 bill collectors formed a corporation named ACGI which was one of the entities
    engaged by Manila Water for its courier service. Manila Water then entered into a service
    agreement with respondent FCCSI also for its courier needs. Their service agreements covered
    the periods 1997 to 2002. FCCSI gave a deadline for the bill collectors who were members of
    ACGI to submit applications and letters of intent to transfer to FCCSI. The individual
    respondents in this case were among the bill collectors who joined FCCSI and were hired
    effective December 1, 1997.On various dates between May and October 2002, individual
    respondents were terminated from employment. Manila Water no longer renewed its contract
    with FCCSI because it decided to implement a "collector-less" scheme whereby customers
    would instead remit payments through "Bayad Centers." Thus, aggrieved bill collectors
    individually filed complaints for illegal dismissal against petitioner Manila Water and respondent
    FCCSI

    Issue:
    W/N FCCSI is an independent contractor

    Held:

    NO. FCCSI is not an independent contractor.

    Department Order No. 18-02, Series of 2002, enunciates that labor-only contracting
    refers to an arrangement where the contractor or subcontractor merely recruits, supplies, or
    places workers to perform a job, work, or service for a principal, and any of the following
    elements are present: (i) the contractor or subcontractor does not have substantial capital or
    investment which relates to the job, work, or service to be performed and the employees
    recruited, supplied, or placed by such contractor or subcontractor are performing activities which
    are directly related to the main business of the principal; or (ii) the contractor does not exercise
    the right to control the performance of the work of the contractual employee.

    In the instant case, the CA found that FCCSI is a labor-only contractor. Based on the
    factual findings of the CA, FCCSI does not have substantial capital or investment to qualify as
    an independent contractor. FCCSI's capitalization may not be considered substantial
    considering that it had close to a hundred collectors covering the east zone service area of
    Manila Water customers. The allegation in the position paper of FCCSI that it serves other
    companies' courier needs does not "cure" the fact that it has insufficient capitalization to qualify
    as independent contractor. Neither did FCCSI prove its allegation by substantial evidence other
    than by their self-serving declarations. What is evident is that it was Manila Water that provided
    the equipment and service vehicles needed in the performance of the contracted service.

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