G.R. No. 124055 -

Ruling

WHEREFORE, premises considered, the appealed judgment is modified. Intervenor DL ADMARK is ordered to reinstate the eighty one (81) complainants mentioned in the appealed decision to their former positions with backwages from March 16, 1992 until they are actually reinstated. The award of attorney's fees equivalent to ten (10%) of the award is deleted for lack of basis. [3] Petitioners filed a motion for reconsideration but the same was denied by the NLRC for lack of merit. [4] Hence, this petition. In the main, the issue brought to fore is whether petitioners are employees of CMC or D.L. Admark. In resolving this, it is necessary to determine whether D.L. Admark is a labor-only contractor or an independent contractor. Petitioners are of the position that D.L. Admark is a labor-only contractor and cites this Court's ruling in the case of Tabas, which they claim is applicable to the case at bar for the following reasons: 1. The petitioners are merchandisers and the petitioners in the Tabas case are also merchandisers who have the same nature of work. 2. The respondent in this case is California Manufacturing Co. Inc. while respondent in the Tabas case is the same California Manufacturing Co. Inc. 3. The agency in the Tabas case is Livi Manpower Services. In this case, there are at least, three (3) agencies namely: the same Livi Manpower Services; the Rank Manpower Services and D.L. Admark whose participation is to give and pay the salaries of the petitioners and that the money came from the respondent CMC as in the Tabas case. 4. The supervision, management and/or control rest upon respondent California Manufacturing Co. Inc. as found by the Honorable Labor Arbiter which is also, true in the Tabas Case. [5] We cannot sustain the petition. Petitioners' reliance on the Tabas case is misplaced. In said case, we ruled that therein contractor Livi Manpower Services was a mere placement agency and had simply supplied herein petitioner with the manpower necessary to carry out the company's merchandising activity. We, however, further stated that : It would have been different, we believe, had Livi been discretely a promotions firm, and that California had hired it to perform the latter's merchandising activities. For then, Livi would have been truly the employer of its employees and California, its client. x x x. [6] In other words, CMC can validly farm out its merchandising activities to a legitimate independent contractor. There is labor-only contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present: (a) The person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; and (b) The workers recruited and placed by such person are performing activities which are directly related to the principal business of th