G.R. No. 172241 - PUREFOODS CORPORATION (NOW SAN MIGUEL PUREFOODS COMPANY, INC.), VS. NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION) AND LOLITA NERI.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, this Court must of necessity review the records to determine which findings should be preferred as more conformable to the evidentiary facts. [26] There is merit in the petition. The Court agrees with Purefoods' argument that Art. 280 of the Labor Code [27] finds no application in a trilateral relationship involving a principal, an independent job contractor, and the latter's employees. Indeed, the Court has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely distinguishes between two kinds of employees, i.e. , regular employees and casual employees, for purposes of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an employment relationship is in dispute. [28] It is therefore erroneous on the part of the Court of Appeals to rely on Art. 280 in determining whether an employer-employee relationship exists between respondent Neri and Purefoods. Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. [29] In this arrangement, the following conditions must be met: (a) the contractor carries on a distinct and independent business and undertakes the contract work on his 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 his work except as to the results thereof; (b) the contractor has substantial capital or investment; and (c) the agreement between the principal and contractor or subcontractor assures the contractual employees' entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits. [30] To support its position that respondent is not its employee, Purefoods relies on the following: (i) the Promotions Agreements [31] it entered into with D.L. Admark; (ii) Department Order No. 10 (Series of 1997) [32] which defines legitimate contracting or subcontracting; and (iii) Escario v. NLRC [33] wherein the Court declared D.L. Admark as a legitimate labor contractor. On the other hand, early on, Neri and the rest of the complainants admitted that they worked for petitioner through D.L. Admark. [34] However, they also averred that they were under the control and supervision of petitioner's employees--salesmen, poultry sales managers, deli supervisors--who give them work orders and to whom they submit weekly inventory reports and monthly competitive sales report. In support of these statements, Neri app