San Miguel Corp vs NLRC 510 SCRA 181 (2006)

Concept: Requirements for Independent Contractor

Facts:

• SMC (San Miguel) seeks to reverse the decision of the CA which affirmed the decision of the NLRC that Rafael Maliksi is a REGULAR EMPLOYEE
• Oct. 16, 1990. Maliksi filed a complaint against SMC compelling them to recgonize him as regular employee. Oct 31, 1990, he was dismissed by SMC.
• His complaint then now includes illegal dismissal
• Maliksi thru Lipercon (contractor), was assigned to SMC. After a while another contractor (Skillpower) assigned him to SMC again then lastly, another contractor (Philippine Sofware Services and Education Center or PHILSEC) assgined him to SMC. (To clarify things dear reader, Three different agencies assigned him to SMC). Those assignments are from 1981 to 1985.
• Maliksi argued that he is an employee if Magnolia (a division of SMC). He also argued that the contractors are LABOR ONLY CONTRACTORS and not his employer.
• PHILSEC disclaimed liability as it catered only to computerized accounting needs of businesses like SMC. PHILSEC's principal funding being manual control of data needed during computerization.
• Maliksi was terminated because the project ended.
• SMC contends that PHILSEC exercised sxclusive managerial prerogative over Maliksi as ti hiring, payment of salary, dismissal, and control of his work (take note these are the requisites for employee-employer relationship). PHILSEC has substantial capital of its own and what it caters to clients are computer programs and training systems on computer tech and not the usual labor or man power supply (test for independent contractor).
• SMC said that Maliksi's service has no relations to SMC's primary business which is food and beverages. (The court said that this contention has no merit since accounting chorva is part of the business).
• The Labor Arbiter declared that Maliksi is an employee of PHILSEC.
• Maliksi appealed to the NLRC, reversed the decision of the Labor Arbiter, making SMC the employer.
• SMC appealed to the CA. CA affired the decision of the NLRC.
• CA said that tho Lipercon and Skillpower are mere conduits on Maliksi being on SMC, still made him (Maliksi) a regular employee because of the required one year period.

Issue: W/ON Maliksi is a regular employee

Held. Yes, he is a regular employee. Lipercon and Skillpower are LABOR ONLY CONTRACTORS providing personnel services for a fee. There is an employee-employer relationship and the court gives due deference ti the factual findings of the NLRS and CA. Having served SMC for 3 years thru Lipercon and Skillpower deemed Maliksi a regular employee.

Source and Full Text: http://sc.judiciary.gov.ph/jurisprudence/2006/december2006/147566.htm