2.

Tabasvs California Manufacturing

FACTS
1. Petitioners were the employees of Livi Manpower Services. They were assigned to the respondent pursuant to a
manpower supply agreement as promotional merchandisers.
2. t was provided in the agreement that! 1" #alifornia would have no control or supervision over the wor$ers as to
how they perform or accomplish their wor$% 2" Livi is an independent contractor and that it has the sole
responsi&ility of complying with all the e'isting as well as future laws% rules and regulations pertinent to
employment of la&or% (" the assignment to #alifornia was seasonal and contractual% and )" payroll% including
#*L+ and holiday pay shall &e delivered Livi at #alifornia,s premises.
(. Petitioners were made to sign -.month employment contracts which were renewed for the same period. /nli$e
regular employees of #alifornia% they did not receive fringe &enefits and &onuses and were paid only a daily
allowance.
). Petitioners contend that they have &ecome regular employees of #alifornia. Su&se0uent to their claim for
regulari1ation% #alifornia no longer re.hired them. Livi% on the other hand% claims the wor$ers as its employees
and that it is an independent contractor.
2. La&or +r&iter found that no employer.employee relationship e'isted. The 3L4# affirmed the ruling.
ISSUE
Is there an employer-employee relationship between California and the petitioners?
HELD
56S. The e'istence of an employer.employee relationship is a 0uestion of law and cannot &e made su&7ect to
agreement. The stipulations in the manpower supply agreement will not erase either party,s o&ligations as an
employer. Livi is a la&or.only contractor% notwithstanding the provisions in the agreement. The nature of one,s
&usiness is not determined &y self.serving appellations &ut &y test provided &y statute and the prevailing case law.
#alifornia,s contention that the wor$ers are not performing activities which are directly related to its general
&usiness of manufacturing is untena&le. The promotion or sale of products% including the tas$ of occasional price
tagging% is an integral part of the manufacturing &usiness. Livi as a placement agency had simply supplied the
manpower necessary for #alifornia to carry out its merchandising activities% using the latter,s premises and
e0uipment. Merchandising is li$ewise not a specific pro7ect &ecause it is an activity related to the day.to.day
operations of #alifornia. 8ased on +rticle 19- of the La&or #ode% the la&or.only contractor is considered merely an
agent of the employer and lia&ility must &e shouldered &y either one or &y &oth. Petitioners are ordered reinstated
as regular employees.