THIRDDIVISION

ROLANDO SASAN, SR., G.R.No.176240

LEONILO DAYDAY,
MODESTO AGUIRRE,
Present:
ALEJANDRO ARDIMER,

ELEUTERIO SACIL,
YNARESSANTIAGO,J.,
WILFREDO JUEGOS,
Chairperson,
PETRONILO CARCEDO and
AUSTRIAMARTINEZ,
CESARPACIENCIA,
Petitioners, AZCUNA,*
CHICONAZARIO,and
versus NACHURA,JJ.

NATIONAL LABOR
RELATIONS COMMISSION
4TH DIVISION, EQUITABLE Promulgated:
PCI BANK and HELPMATE,
INC.,
Respondents. October17,2008
xx

DECISION

CHICONAZARIO,J.:

[1]
AssailedinthisPetitionforReviewunderRule45oftheRulesofCourtaretheDecision
dated 24 April 2006 of the Court of Appeals in CAG.R. SP No. 79912, which affirmed the
Decision dated 22 January 2003 of the National Labor Relations Commission (NLRC) in NLRC
CaseNo.V0002412002findingthatHelpmate,Inc.(HI)isalegitimateindependentjobcontractor
[2]
and that the petitioners were not illegally dismissed from work and the Resolution dated 31
October2006ofthesamecourtdenyingtheMotionforReconsiderationfiledbythepetitioners.

 [3]
Respondent EquitablePCI Bank (EPCIBank), a banking entity duly organized and
[4]
existingunderandbyvirtueofPhilippinelaws,enteredintoaContractforServices withHI,a
domestic corporation primarily engaged in the business of providing janitorial and messengerial
services. Pursuant to their contract, HI shall hire and assign workers to EPCIBank to perform
janitorial/messengerial and maintenance services. The contract was impliedly renewed year after
[5] [6] [7]
year. Petitioners Rolando Sasan, Sr., Leonilo Dayday, Modesto Aguirre, Alejandro
[8] [9] [10] [11]
Ardimer, Eleuterio Sacil, Wilfredo Juegos, Petronilo Carcedo, and Cesar
[12]
Peciencia wereamongthoseemployedandassignedtoEPCIBankatitsbranchalongGorordo
[13]
Avenue,Lahug,CebuCity,aswellastoitsotherbranchesintheVisayas.

O 23 July 2001, petitioners filed with the Arbitration Branch of the NLRC in Cebu City
[14]
separatecomplaints againstEPCIBankandHIforillegaldismissal,withclaimsforseparation
pay, service incentive leave pay, allowances, damages, attorneys fees and costs. Their complaints
were docketed as NLRC RABVII Case No. 0713812001 and raffled to Labor Arbiter Jose G.
Gutierrez(LaborArbiterGutierrez)fortheirproperdisposition.Subsequently,on22August2001,
[15]
thepetitioners amendedtheircomplaintstoincludeaclaimfor13thmonthpay.

SeveralconciliationhearingswerescheduledbyLaborArbiterGutierrezbutthepartiesstill
failedtoarriveatamutuallybeneficialsettlementhence,LaborArbiterGutierrezorderedthatthey
submittheirrespectivepositionpapers.

In their position papers, petitioners claimed that they had become regular employees of E
PCIBankwithrespecttotheactivitiesforwhichtheywereemployed,havingcontinuouslyrendered
janitorialandmessengerialservicestothebankformorethanoneyearthatEPCIBankhaddirect
controlandsupervisionoverthemeansandmethodsbywhichtheyweretoperformtheirjobsand
thattheirdismissalbyHIwasnullandvoidbecausethelatterhadnopowertodososincetheyhad
becomeregularemployeesofEPCIBank.

For its part, EPCIBank averred that it entered into a Contract for Services with HI, an
independent job contractor which hired and assigned petitioners to the bank to perform janitorial
andmessengerialservicesthereat.ItwasHIthatpaidpetitionerswages,monitoredpetitionersdaily
timerecords(DTR)anduniforms,andexerciseddirectcontrolandsupervisionoverthepetitioners
and that therefore HI has every right to terminate their services legally. EPCIBank could not be
heldliableforwhatevermisdeedHIhadcommittedagainstitsemployees.

HI, on the other hand, asserted that it was an independent job contractor engaged in the
businessofprovidingjanitorialandrelatedservicestobusinessestablishments,andEPCIBankwas
oneofitsclients.Petitionerswereitsemployees,partofitspoolofjanitors/messengersassignedto
EPCIBank. The Contract for Services between HI and EPCIBank expired on 15 July 2000. E
PCIBank no longer renewed said contract with HI and, instead, bidded out its janitorial
requirementstotwootherjobcontractors,AbleServicesandPuritan.HIdesignatedpetitionersto
new work assignments, but the latter refused to comply with the same. Petitioners were not
dismissedbyHI,whetheractuallyorconstructively,thus,petitionerscomplaintsbeforetheNLRC
werewithoutbasis.

LaborArbiterGutierrezfocusedonthefollowingissues:(a)whetherpetitionerswereregular
employeesofHI(b)whetherpetitionerswereillegallydismissedfromtheiremploymentand(c)
whetherpetitionerswereentitledtotheirmoneyclaims.

On 7 January 2002, on the basis of the parties position papers and documentary evidence,
LaborArbiterGutierrezrenderedaDecisionfindingthatHIwasnotalegitimatejobcontractoron
thegroundthatitdidnotpossesstherequiredsubstantialcapitalorinvestmenttoactuallyperform
thejob,work,orserviceunderitsownaccountandresponsibilityasrequiredundertheLaborCode.
[16]
HIisthereforealaboronlycontractorandtherealemployerofpetitionersisEPCIBankwhich
isheldliabletopetitioners.AccordingtoLaborArbiterGutierrez:

[T]heundisputedfactsshowthatthe[hereinpetitioners]weremadetoperformnotonlyasjanitors
butalsoasmessengers,driversandoneofthemevenworkedasanelectrician.Forus,thesejobsare
notonlydirectlyrelatedtothemainbusinessoftheprincipalbutare,likewisedeemednecessaryin
theconductofrespondentEquitablePCIBanksprincipalbusiness.Thus,basedontheabove,weso
declarethatthe[petitioners]areemployeesofrespondentEquitablePCIBank.And having worked
withrespondentEquitablePCIBankformorethanone(1)year,theyaredeemedregularemployees.
Theycannot,therefore,beremovedfromemploymentwithoutcauseandwithoutdueprocess,which
is wanting in this case. Hence, the severance of their employment in the guise of termination of
[17]
contractisillegal.


Inthedispositiveportionofhis7January2002Decision,LaborArbiterGutierrezawardedto
petitionersthefollowingamounts:

I.CESARPACIENCIA

a)Backwages
July15,2001toJanuary8,2002
=P190.00perday
=5monthsand6days
=136daysxP190.00 =P25,840.00

b)SeparationPay
June10,1996toJuly15,2001
=5years
=P190.00x26daysx5years/2 =P12,350.00

c)13thMonthPay
=P190.00x26days =P4,940.00
Total P43,130.00

IIDominador Suico, Jr. (did not
fileAmendedComplaint)

a)Backwages
July 15, 2001 to January 15,
2002 =P25,840.00
sameasPaciencia

b)SeparationPay
Feb.2,1999toJuly15,2001 =P6,175.00
=P190.00x26daysx2.5years =P32,015.00
/2
Total

III Roland Mosquera (did not
fileAmendedComplaint)

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
March8,1998toJuly15,2001
=P190.00x26daysx3yrs./2 =P7,410.00
Total =P33,250.00

IVPetronilloCarcedo

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
Sept.16,1984toJuly15,2001
=P190.00x26daysx17yrs./2 =P41,990.00
c)13thMonthPay
=P190.00x26days
Total =P4,940.00
=P72,770.00

VRolandoSasan,Sr.

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
October1989toJuly15,2001
=P190.00x26daysx12yrs./2 =P29,640.00

c)13thMonthPay
=P190.00x26days =P4,940.00
Total =P60,420.00

VILeoniloDayday

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
Feb.8,1983toJuly15,2001
=P190.00x26daysx18yrs./2 =P44,460.00

c)13thMonthPay
=P190.00x26days =P4,940.00
Total =P75,240.00

VIIEleuterioSacil

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
June2,1992toJuly15,2001
=P190.00x26daysx9yrs./2 =P22,230.00

c)13thMonthPay
=P190.00x26days =P4,940.00
Total =P53,010.00

VIIIMarioJuntilla

a)Backwages
(sameasPacencia) =P25,840.00

b)SeparationPay
October7,1987toJuly15,2001
=P190.00x26daysx14yrs./2 =P34,580.00

c)13thMonthPay
=P190.00x26days =P4,940.00
Total =P65,360.00

IXWilfredoJuegos

a)Backwages
(sameasPacencia) =P25,840.00

 b)SeparationPay
July23,1990toJuly15,2001
=P190.00x26daysx11yrs./2 =P27,170.00

th
c)13 MonthPay
=P190.00x26days =P4,840.00
Total =P57,950.00

XModestoAguirre

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
=Jan.5,1992toJuly15,2001
=P190.00x26daysx9.5yrs./ =P23,465.00
2

th
c)13 MonthPay =P4,940.00
=P190.00x26days =P54,245.00
Total

XIAlejandroArdimer

a)Backwages
(sameasPaciencia) =P25,840.00

b)SeparationPay
=Jan.20,1990toJuly15,2001
=P190.00x26daysx11.5yrs./ =P28,405.00
2

th
c)13 MonthPay =P4,940.00
=P190.00x26days =P59,185.00
Total

xxxx

WHEREFORE,theforegoingpremisesconsidered,judgmentisherebyrendereddirectingthe
respondentsEquitablePCIBankandHelpmate,Inc.topayjointlyandsolidarilythecomplainantsas
follows:

1.CesarPacienciaP43,130.00
2.DominadorSuico,Jr.32,015.00
3.RolandMosquera33,250.00
4.PetroniloCarceda72,770.00
5.RolandSasan,Sr.60,420.00
6.LeoniloDayday75,240.00
7.EleuterioSacil53,010.00
8.MarioJuntilla65,360.00
9.WilfredoJuegos57,950.00
10.ModestoAguirre54,245.00
11.AlejandroArdimer59,185.00
[18]
TOTALP606,575.00


Aggrieved by the decision of Labor Arbiter Gutierrez, respondents EPCIBank and HI
appealedthesametotheNLRC,4thDivision,stationedinCebuCity.Theirappealsweredocketed
as NLRC Case No. V0002412002. In support of its allegation that it was a legitimate job
contractor,HIsubmittedbeforetheNLRCseveraldocumentswhichitdidnotpresentbeforeLabor
ArbiterGutierrez.Theseare:

1. Certificate of Filing of Certificate of Increase of Capital Stock, Certificate of Filing Amended
Articles of Incorporation, and General Information Sheet Stock Corporation of HI showing
thereinthatitincreaseditsauthorizedcapitalstockfromP1,500,000.00toP20,000,000.00on12
March1999withtheSecuritiesandExchangeCommission

2.AuditedFinancialStatementofHIshowingthereinthatithasTotalAssetsofP20,939,935.72asof
31December2000

3.TransferCertificateofTitleNo.110173andTaxDeclarationNo.GR2K0906300582registered
underthenameofHIshowingthat it has a parcel of land with Market Value of P1,168,860.00
locatedalongRizalAvenue(nowBacalsoAvenue),CebuCity,and

4.TaxDeclarationNo.GR2K0906300583registeredunderthenameofHIshowing thatit hasa
commercialbuildingconstructedontheprecedinglotlocatedalongBacalsoAvenue,Cebu City
[19]
withmarketvalueofP2,515,170.00.


The NLRC promulgated its Decision on 22 January 2003 modifying the ruling of Labor
Arbiter Gutierrez. The NLRC took into consideration the documentary evidence presented by HI
for the first time on appeal and, on the basis thereof, declared HI as a highly capitalized venture
withsufficientcapitalization,whichcannotbeconsideredengagedinlaboronlycontracting.

Onthechargeofillegaldismissal,theNLRCruledthat:

Thechargeofillegaldismissalwasprematurelyfiled.Therecordshowsthatbarelyeight(8)
daysfrom15July2001whenthecomplainantswereplacedonatemporaryoffdetail,theyfiledtheir
complaintson23July2001andamendedtheircomplaintson22August2001againsttherespondents
onthepresumptionthattheirserviceswerealreadyterminated.Temporaryoffdetailisnotequivalent
[20]
todismissal.xxx.


The NLRC deleted Labor Arbiter Gutierrezs award of backwages and separation pay, but
affirmedhisawardfor13thmonthpayandattorneysfeesequivalenttotenpercent(10%)ofthe13th
[21]
month pay, to the petitioners. Thus, the NLRC decreed in its 22 January 2003 Decision, the
paymentofthefollowingreducedamountstopetitioners:

 WHEREFORE,premisesconsidered,thedecisionofLaborArbiterJoseG.Gutierrezdated7
January2002isMODIFIED,towit:

[22]
OrderingrespondentsHelpmate,Inc.andEquitablePCIBanktojointlyandseverally pay
th
thecomplainantsoftheir13 monthpayandattorneysfeesintheaggregateamountofFortyThree
ThousandFourHundredSeventyTwoand00/100(P43,472.00),brokendownasfollows:

1.Aguirre,ModestoP5,434.00
2.Ardimer,Alejandro5,434.00
3.Carcedo,Petronilo5,434.00
4.Dayday,Leonilo5,434.00
5.Juegos,Wilfredo5,434.00
6.Juntilla,Mario5,434.00
7.Paciencia,Cesar5,434.00
8.Sacil,Eleuterio5,434.00
[23]
TOTALP43,472.00


Petitioners Motion for Reconsideration was denied by the NLRC in its Resolution dated 1 July
[24]
2003.

DistressedbythedecisionoftheNLRC,petitionerssoughtrecoursewiththeCourtofAppealsby
[25]
filingaPetitionforCertiorari underRule65ofthe1997RulesofCivilProceduredocketedas
CAG.R.SPNo.79912.

InitsDecisiondated24April2006,theCourtofAppealsaffirmedthefindingsoftheNLRCthat
HIwasalegitimatejobcontractorandthatitdidnotillegallydismisspetitioners:

Astothequestionofwhetherornot,asalegitimateindependentjobcontractor,respondentHI
illegallydismissedthepetitioners.Weruleinthenegative.

ItisundisputedthatthecontractbetweenrespondentHIanditsclientEPCIBankexpiredonJuly15,
2000.The record shows that after said expiration, respondent HI offered the petitioners new work
assignmentstovariousestablishmentswhichareHIsclients.Thepetitioners,therefore,werenoteven
placedonfloatingstatus.Theysimplyrefused,withoutjustifiablereason,toassumetheirnewwork
assignments which refusal was tantamount to abandonment. There being no illegal dismissal,
[26]
petitionersarenotentitledtobackwagesorseparationpay.


Thefalloofthe24April2006Decisionoftheappellatecourtreads:

WHEREFORE,inviewoftheforegoingpremises,judgmentisherebyrenderedbyusDENYINGthe
petition filed in this case and AFFIRMING the decision of the NLRC, Fourth Division, in NLRC
[27]
CaseNo.V0001452003promulgatedonJune22,2003.


PetitionersnowcomebeforeusviatheinstantPetitionraisingthefollowingissues:

WHETHERORNOTTHEHONORABLECOURTOFAPPEALSACTEDINEXCESSOFTHEIR
JURISDICTION AND/OR COMMITTED GRAVE ABUSE OF DISCRETION IN UPHOLDING
THENLRC4THDIVISIONSDECISIONANDGRAVELYERREDIN:

I. ACCEPTING AND APPRECIATING THE PIECES OF EVIDENCE SUBMITTED BY
RESPONDENTSDURINGAPPEAL,ALLEXISTINGDURINGTHETIMETHENLRCRAB7S
TRIAL, CONTRARY TO THIS HONORABLE COURTS PREVIOUS ESTABLISHED
DECISIONS.

II.REVERSING,WITHOUTANYLEGALBASIS,THEFACTUALFINDINGOFNLRCRAB7
THATTHERESPONDENTHIWASLABORONLYCONTRACTOR.

III. RULING, WITHOUT ANY LEGAL BASIS, THAT THE ILLEGAL DISMISSAL
[28]
COMPLAINTSWEREPREMATURELYFILED.


Beforeproceedingtothesubstantiveissues,wefirstaddresstheproceduralissuesraisedby
petitioners.

PetitionersobjecttotheacceptanceandconsiderationbytheNLRCoftheevidencepresented
by HI for the first time on appeal. This is not a novel procedural issue, however, and our
[29]
jurisprudenceisalreadyrepletewithcases allowingtheNLRCtoadmitevidence,notpresented
beforetheLaborArbiter,andsubmittedtotheNLRCforthefirsttimeonappeal.Technicalrulesof
evidence are not binding in labor cases. Labor officials should use every reasonable means to
ascertainthefactsineachcasespeedilyandobjectively,withoutregardtotechnicalitiesoflawor
[30]
procedure,allintheinterestofdueprocess.

ThesubmissionofadditionalevidencebeforetheNLRCisnotprohibitedbyitsNewRules
ofProcedure.Afterall,rulesofevidenceprevailingincourtsoflaworequityarenotcontrollingin
labor cases. The NLRC and labor arbiters are directed to use every and all reasonable means to
ascertainthefactsineachcasespeedilyandobjectively,withoutregardtotechnicalitiesoflawand
procedureallintheinterestofsubstantialjustice.Inkeepingwiththisdirective,ithasbeenheldthat
theNLRCmayconsiderevidence,suchasdocumentsandaffidavits,submittedbythepartiesfor
the first time on appeal. The submission of additional evidence on appeal does not prejudice the
[31]
otherpartyforthelattercouldsubmitcounterevidence.

 [32]
In Clarion Printing House, Inc. v. National Labor Relations Commission, we again
emphasizedthat:

[T]he NLRC is not precluded from receiving evidence, even for the first time on appeal, because
technicalrulesofprocedurearenotbindinginlaborcases.

The settled rule is that the NLRC is not precluded from receiving evidence on appeal as technical
rules of evidence are not binding in labor cases.In fact, labor officials are mandated by the Labor
Code to use every and all reasonable means to ascertain the facts in each case speedily and
objectively, without regard to technicalities of law or procedure, all in the interest of due process.
Thus,inLawinSecurityServicesv.NLRC,andBristolLaboratoriesEmployeesAssociationDFAv.
NLRC,weheldthateveniftheevidencewasnotsubmittedtothelaborarbiter,thefactthatitwas
duly introduced on appeal to the NLRC is enough basis for the latter to be more judicious in
admittingthesame,insteadoffallingbackonthemeretechnicalitythatsaidevidencecannolonger
beconsideredonappeal.Certainly, the first course of action would be more consistent with equity
andthebasicnotionsoffairness.


For the same reasons, we cannot find merit in petitioners protestations against the
documentaryevidencesubmittedbyHIbecausetheyweremerephotocopies.Evidently,petitioners
are invoking the best evidence rule, espoused in Section 3, Rule130 of the Rules of Court. It
providesthat:

Section 3. Original document must be produced exceptions. When the subject of inquiry is the
contentsofadocument,noevidenceshallbeadmissibleotherthantheoriginaldocumentitselfxxx.

Theaboveprovisionexplicitlymandatesthatwhenthesubjectofinquiryisthecontentsofa
document, no evidence shall be admissible other than the original document itself. Notably,
[33]
certifiedtruecopiesofthesedocuments,acceptableundertheRulesofCourt werefurnished
tothepetitioners.Evenassumingthatpetitionersweregivenmerephotocopies,again,westressthat
proceedingsbeforetheNLRCarenotcoveredbythetechnicalrulesofevidenceandprocedureas
observedintheregularcourts.Technicalrulesofevidencedonotapplyifthedecisiontograntthe
petitionproceedsfromanexaminationofitssufficiencyaswellasacarefullookintothearguments
[34]
containedinpositionpapersandotherdocuments.

Petitioners had more than adequate opportunity when they filed their motion for
reconsiderationbeforetheNLRC,theirPetitiontotheCourtofAppealsandeventothisCourt,to
refuteorpresenttheircounterevidencetothedocumentaryevidencepresentedbyHI.Havingfailed
in this respect, petitioners cannot now be heard to complain about these documentary evidences
presented by HI upon which the NLRC and the Court of Appeals based its finding that HI is a
legitimatejobcontractor.

The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, a fair and reasonable opportunity to explain one's side. It is also an
opportunitytoseekareconsiderationoftheactionorrulingcomplainedof.Itisnotthedenialofthe
righttobeheardbutdenialoftheopportunitytobeheardthatconstitutesviolationofdueprocess
oflaw.Petitionershereinwereaffordedeveryopportunitytobeheardandtoseekreconsiderationof
the adverse judgment against them. They had every opportunity to strengthen their positions by
presenting their own substantial evidence to controvert those submitted by EPCIBank and HI
beforetheNLRC,andevenbeforetheCourtofAppeals.Itcannotwinitscasebymerelyraising
unsubstantiateddoubtorrelyingontheweaknessoftheadversepartiesevidence.
Wenowproceedtotheresolutionofthesubstantiveissuessubmittedbypetitionersforour
consideration,particularly,whetherHIisalaboronlycontactorandEPCIBankshouldbedeemed
petitioners principal employer and whether petitioners were illegally dismissed from their
employment.

Permissible job contracting or subcontracting refers to an arrangement whereby a principal
agreestoputoutorfarmouttoacontractororsubcontractortheperformanceorcompletionofa
specificjob,workorservicewithinadefiniteorpredeterminedperiod,regardlessofwhethersuch
job,workorserviceistobeperformedorcompletedwithinoroutsidethepremisesoftheprincipal.
[35]
Apersonisconsideredengagedinlegitimatejobcontractingorsubcontractingifthefollowing
conditionsconcur:

(a)Thecontractororsubcontractorcarriesonadistinctandindependentbusinessandundertakesto
performthejob,workorserviceonitsownaccountandunderitsownresponsibilityaccordingtoits
own manner and method, and free from the control and direction of the principal in all matters
connectedwiththeperformanceoftheworkexceptastotheresultsthereof

(b)Thecontractororsubcontractorhassubstantialcapitalorinvestmentand

(c) The agreement between the principal and contractor or subcontractor assures the contractual
employeesentitlementtoalllaborandoccupationalsafetyandhealthstandards,freeexerciseofthe
[36]
righttoselforganization,securityoftenure,andsocialandwelfarebenefits.


Incontrast,laboronlycontracting,aprohibitedact,isanarrangementwherethecontractoror
subcontractor merely recruits, supplies or places workers to perform a job, work or service for a
[37]
principal. Inlaboronlycontracting,thefollowingelementsarepresent:

(a)Thecontractororsubcontractordoesnothavesubstantialcapitalorinvestmenttoactually
performthejob,workorserviceunderitsownaccountandresponsibilityand

(b) The employees recruited, supplied or placed by such contractor or subcontractor are
[38]
performingactivitieswhicharedirectlyrelatedtothemainbusinessoftheprincipal.


Indistinguishingbetweenpermissiblejobcontractingandprohibitedlaboronlycontracting,
[39] [40]
weelucidatedinVinoyav.NationalLaborRelationsCommission, thatitisnotenoughto
showsubstantialcapitalizationorinvestmentintheformoftools,equipment,etc.Otherfactsthat
may be considered include the following: whether or not the contractor is carrying on an
independentbusinessthenatureandextentoftheworktheskillrequiredthetermanddurationof
the relationship the right to assign the performance of specified pieces of work the control and
supervision of the work to another the employers power with respect to the hiring, firing and
paymentofthecontractorsworkersthecontrolofthepremisesthedutytosupplypremises,tools,
[41]
appliances,materialsandlaborandthemodeandmannerortermsofpayment. Simplyput,the
[42]
totalityofthefactsandthesurroundingcircumstancesofthecasearetobeconsidered. Each
case must be determined by its own facts and all the features of the relationship are to be
[43]
considered.

Inthecaseatbar,wefindsubstantialevidencetosupportthefindingoftheNLRC,affirmedbythe
CourtofAppeals,thatHIisalegitimatejobcontractor.

WetakenotethatHIhasbeenissuedbytheDepartmentofLaborandEmployment(DOLE)
[44]
CertificateofRegistration NumberedVII8591297048.Thesaidcertificatestatesamongother
things:

CERTIFICATEOFREGISTRATION
NumberedVII8591297048

isissuedto

HELPMATE,INCORPORATED
330N.BacalsoAvenue,CebuCity

forhavingcompliedwiththerequirementsasprovidedforundertheLaborCode,asamended,andits
ImplementingRulesandhavingpaidtheregistrationfeeintheamountofONEHUNDREDPESOS
(P100.00)perOfficialReceiptNumber9042769,datedOctober16,1997.

 In witness whereof, and by authority vested in me by the Labor Code, as amended, and its
Implementing Rules specifically Department Order No. 10 series of 1997, I have hereunto set my
[45]
handandaffixedtheOfficialonthis23rddayofDecember1997.

Havingbeenissuedbyapublicofficer,thiscertificationcarrieswithitthepresumptionthatit
[46]
wasissuedintheregularperformanceofofficialduty. Intheabsenceofproof,petitionersbare
assertion cannot prevail over this presumption. Moreover, the DOLE being the agency primarily
responsible for regulating the business of independent job contractors, we can presume in the
absenceofevidencetothecontrarythatitthoroughlyevaluatedtherequirementssubmittedbyHI
asapreconditiontotheissuanceoftheCerificateofRegistration.

TheevidenceonrecordalsoshowsthatHIiscarryingonadistinctandindependentbusiness
from EPCIBank. The employees of HI are assigned to clients to perform janitorial and
messengerial services, clearly distinguishable from the banking services in which EPCIBank is
engaged.

Despite the aforementioned compliance by HI with the requisites for permissible job
contracting, Labor Arbiter Gutierrez still declared that HI was engaged in prohibited laboronly
contractingbecauseitdidnotpossesssubstantialcapitalorinvestmenttoactuallyperformthejob,
workorserviceunderitsownaccountorresponsibility.BoththeNLRCandtheCourtofAppeals
ruledtothecontrary,andweagree.
Substantialcapitalorinvestmentreferstocapitalstocksandsubscribedcapitalizationinthe
caseofcorporations,tools,equipments,implements,machineriesandworkpremises,actuallyand
directlyusedbythecontractororsubcontractorintheperformanceorcompletionofthejob,work
[47]
or service contracted out. An independent contractor must have either substantial capital or
investment in the form of tools, equipment, machineries, work premises, among others. The law
does not require both substantial capital and investment in the form of tools, equipment,
[48]
machineries,etc. Itisenoughthatithassubstantialcapital.InthecaseofHI,ithasprovenboth.

We have expostulated that once it is established that an entity such as in this case, HI has
substantialcapital,itwasnolongernecessarytoadducefurtherevidencetoprovethatitdoesnot
[49]
fall within the purview of laboronly contracting. There is even no need for HI to refute the
contentionofpetitionersthatsomeoftheactivitiestheyperformedsuchasthoseofmessengerial
servicesaredirectlyrelatedtotheprincipalbusinessofEPCIBank.

 Inanyevent,wehaveearlierdeclaredthatwhiletheseservicesrenderedbythepetitionersas
janitors,messengersanddriversareconsidereddirectlyrelatedtotheprincipalbusinessofabank,
inthiscaseEPCIBank,nevertheless,theyarenotnecessaryintheconductofits(EPCIBANKs)
[50]
principalbusiness.

HIhassubstantialcapitalintheamountofP20,939,935.72.Ithasitsownbuildingwhereit
[51]
holdsofficeandithasbeenengagedinbusinessformorethanadecadenow. As observed by
theCourtofAppeals,surely,suchawellestablishedbusinessentitycannotbeconsideredalabor
onlycontractor.

Etchedinanunendingstreamofcasesarefourstandardsindeterminingtheexistenceofan
employeremployee relationship, namely: (a) the manner of selection and engagement of the
putative employee (b) the mode of payment of wages (c) the presence or absence of power of
dismissal and, (d) the presence or absence of control of the putative employees conduct. Most
[52]
determinativeamongthesefactorsisthesocalledcontroltest.

Thepresenceofthefirstrequisitefortheexistenceofanemployeremployeerelationshipto
wit, the selection and engagement of the employee is shown by the fact that it was HI which
selectedandengagedtheservicesofpetitionersasitsemployees.Thisisfortifiedbytheprovision
inthecontractofservicesbetweenHIandEPCIBankwhichstates:

Selection, Engagement, Discharge. [HI] shall have exclusive discretion in the selection,
[53]
engagement,investigation,disciplineanddischargeofitsemployees.


Onthesecondrequisiteregardingthepaymentofwages,itwasHIwhopaidpetitionerstheir
wagesandwhoprovidedtheirdailytimerecordsanduniformsandothermaterialsnecessaryforthe
work they performed. Therefore, it is HI who is responsible for petitioners claims for wages and
otheremployeesbenefits.Precisely,thecontractofservicesbetweenHIandEPCIBankrevealsthe
following:

IndemnityforSalariesandBenefits,etc.[HI]shallberesponsibleforthesalaries,allowances,
[54]
overtimeandholidaypay,andotherbenefitsofitspersonnelincludingwithholdingtaxes.


 As to the third requisite on the power to control the employees conduct, and the fourth
requisite regarding the power of dismissal, again EPCIBank did not have the power to control
petitionerswithrespecttothemeansandmethodsbywhichtheirworkwastobeaccomplished.It
likewisehadnopowerofdismissaloverthepetitioners.AllthatEPCIBankcoulddowastoreport
to HI any untoward act, negligence, misconduct or malfeasance of any employee assigned to the
premises.ThecontractofservicesbetweenEPCIBankandHIisnoteworthy.Itstates:

[HI]shallhavetheentirecharge,controlandsupervisionoverallitsemployeeswhomaybe
fieldedto[EPCIBank].Forthispurpose,[HI]shallassignaregularsupervisorofitsemployeeswho
maybefieldedtotheBankandwhichregularsupervisorshallexclusivelysuperviseandcontrolthe
[55]
activitiesandfunctionsdefinedinSection1hereof.xxx.


All these circumstances establish that HI undertook said contract on its account, under its
own responsibility, according to its own manner and method, and free from the control and
directionofEPCIBank.Wherethecontroloftheprincipalislimitedonlytotheresultofthework,
independentjobcontractingexists.ThejanitorialserviceagreementbetweenEPCIBankandHIis
definitelyacaseofpermissiblejobcontracting.

Considering the foregoing, plus taking judicial notice of the general practice in private, as
well as in government institutions and industries, of hiring an independent contractor to perform
[56]
special services, ranging from janitorial, security and even technical services, we can only
concludethatHIisalegitimatejobcontractor.Assuchlegitimatejobcontractor,thelawcreatesan
[57]
employeremployee relationship between HI and petitioners which renders HI liable for the
lattersclaims.

Inviewoftheprecedingconclusions,petitionerswillneverbecomeregularemployeesofE
[58]
PCIBankregardlessofhowlongtheywereworkingforthelatter.

WefurtherrulethatpetitionerswerenotillegallydismissedbyHI.Upontheterminationof
theContractofServicebetweenHIandEPCIBank,petitionerscannotinsisttocontinuetowork
for the latter. Their pullout from EPCIBank did not constitute illegal dismissal since, first,
petitioners were not employees of EPCIBank and second, they were pulled out from said
assignmentduetothenonrenewaloftheContractofServicebetweenHIandEPCIBank.At the
timetheyfiledtheircomplaintswiththeLaborArbiter,petitionerswerenotevendismissedbyHI
theywereonlyoffdetailpendingtheirreassignmentbyHItoanotherclient.Andwhentheywere
 [59]
actuallygivennewassignmentsbyHIwithotherclients, petitionersevenrefusedthesame.As
theNLRCpronounced,petitionerscomplaintforillegaldismissalisapparentlypremature.

WHEREFORE, premises considered, the Petition is DENIED for lack of merit. The Decision
dated 24 April 2006 and Resolution dated 31 October 2006 of the Court of Appeals are
AFFIRMED.Costsagainstpetitioners.

SOORDERED.

MINITAV.CHICONAZARIO
AssociateJustice

WECONCUR:

CONSUELOYNARESSANTIAGO
AssociateJustice
Chairperson



MA.ALICIAAUSTRIAMARTINEZADOLFOS.AZCUNA
AssociateJusticeAssociateJustice



ANTONIOEDUARDOB.NACHURA
AssociateJustice


ATTESTATION

IattestthattheconclusionsintheaboveDecisionwerereachedinconsultationbeforethecasewas
assignedtothewriteroftheopinionoftheCourtsDivision.

CONSUELOYNARESSANTIAGO
AssociateJustice
Chairperson,ThirdDivision



CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitution,andtheDivisionChairpersonsAttestation,
itisherebycertifiedthattheconclusionsintheaboveDecisionwerereachedinconsultationbefore
thecasewasassignedtothewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

*PerSpecialOrderNo.521,dated29September2008,signedbyChiefJusticeReynatoS.Puno,designatingAssociateJusticeAdolfoS.
AzcunatoreplaceAssociateJusticeRubenT.Reyes,whoisonofficialleave.
[1]
PennedbyAssociateJusticeIsaiasP.DicdicanwithAssociateJusticesRamonM.Bato,Jr.andEnricoA.Lanzanasrollo,pp.159167.
[2]
Rollo,p.169.
[3]
NowBancoDeOroUnibankrollo,p.489.
[4]
RecordsaresilentastothedateoftheinitialContractforServicesbetweenHIandEPCIBankrollo,p.383.
[5]
Commencedworkon27October1989asdriverrollo,p.46.
[6]
Commencedworkon8February1983janitormessengerid.
[7]
Commencedworkon15June1992asjanitormessengerid.
[8]
Commencedworkon20January1990aselectricianid.
[9]
Commencedworkon2June1992asdrivermessengerid.
[10]
Commencedworkon23July1990asdrivermessengerid.
[11]
Commencedworkon16September1984asjanitormessengerid.
[12]
Commencedworkon10June1996asdrivermessengerid.
[13]
TheoriginalcomplainantsbeforetheLaborArbiterincludedDominadorSuico,Jr.,RolandMosqueraandMarioJuntilla.Thesethree
lateracceptedandreportedtotheirnewassignmentsrollo,p.66.
[14]
ComplaintsofAlejandroArdimer,EleuterioSacil,LeoniloDayday,RolandoSasan,Sr.,ModestoAguirre,PetroniloCarcedo,Cesar
Paciencia,WilfredoJuegosrollo,pp.2445.
[15]
DominadorSuico,Jr.andRolandMosqueradidnotamendtheircomplainttoincludeaclaimfor13thmonthpayrollo,p.73.
[16]
BookVII,RuleVIII,sec.(d)Contractingorsubcontractingreferstoanarrangementwherebyaprincipalagreestoputoutorfarmout
with a 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
premisesoftheprincipalashereinafterqualified.
SubjecttotheprovisionofSection6,7and8ofthisRule,contractingorsubcontractingshallbelegitimateifthefollowingcircumstance
concur:
(i)Thecontractororsubcontractorcarriesonadistinctandindependentbusinessandundertakestoperformthejob,workorserviceonits
ownaccountandunderitsownresponsibility,accordingtoitsownmannerandmethod,andfreefromthecontrolanddirection
oftheprincipalinallmattersconnectedwiththeperformanceoftheworkexceptastotheresultsthereof.
(ii)Thecontractororsubcontractorhassubstantialcapitalorinvestmentand
(iii)Theagreementbetweentheprincipalandcontractororsubcontractorassuresthecontractualemployeesentitlementtoalllaborand
occupationalsafetyandhealthstandards,freeexerciseoftherighttoselforganization,securityoftenure,andsocialandwelfare
 benefits.
[17]
Rollo,p.71.
[18]
Id.at7377.
[19]
Rollo,pp.119120.
[20]
Id.at124125.
[21]
PetitionerRolandoSasan,Sr.wasnotawarded13th monthpaybecauseaccordingtotheNLRC,hedidnotamendhisComplaintto
includeaprayerforsuchaward.(Rollo,p.131.)
[22]
TheLaborCodeprovidesforthesolidaryliabilityofanyperson,partnership,associationorcorporationwhichnotbeinganemployer
contractswithanindependentcontractor.
PertinentprovisionsoftheLaborCodearehereunderquoted:
ART. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to any person, partnership,
associationorcorporationwhich,notbeinganemployer,contractswithanindependentcontractorfortheperformanceofany
work,task,joborproject.
ART.109.Solidaryliability.Theprovisionsofexistinglawstothecontrarynotwithstanding,everyemployerorindirectemployershall
be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of
determiningtheextentoftheircivilliabilityunderthisChapter,theyshallbeconsideredasdirectemployers.
[23]
Rollo,p.127.
[24]
Id.at129.
[25]
Idat133.
[26]
Id.at166.
[27]
Id.
[28]
Id.at531532.
[29]
MayonHotelandRestaurantv.Adana,G.R.No.157634,16May2005,458SCRA609,628GenuinoIceCo.v.Magpantay,G.R.
No.147790,27June2006,493SCRA195,204.
Art.221oftheLaborCodeisclear:
Art.221.Technicalrulesnotbindingandpriorresorttoamicablesettlement.InanyproceedingbeforetheCommissionoranyofthe
LaborArbiters,therulesofevidenceprevailingincourtsoflaworequityshallnotbecontrollingxxx.
[30]
Panliliov.NationalLaborRelationsCommission,346Phil.30,3536(1997).
[31]
NFDInternationalManningAgentsv.NationalLaborRelationsCommission,G.R.No.116629.16January1998,284SCRA239,
245seealsoTanjuanv.PhilippinePostalSavingsBank,Inc.,457Phil.993,1005(2003)Andayav.NationalLaborRelations
Commission,G.R.No.157371,15July2005,463SCRA577,584.
[32]
G.R.No.148372,27June2005,461SCRA272,289.
[33]
Sec.24.Proofofofficialrecords.Therecordofpublicdocumentsreferredtoinparagraph(a)ofSection19,whenadmissibleforany
purpose,maybeevidencedbyanofficialpublicationthereoforbyacopyattestedbytheofficerhavingthelegalcustodyofthe
record,orbyhisdeputy,andaccompanied,iftherecordisnotkeptinthePhilippines,withacertificatethatsuchofficerhasthe
custody.Iftheofficeinwhichtherecordiskeptisinaforeigncountry,thecertificatemaybemadebyasecretaryoftheembassy
or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines
stationedintheforeigncountryinwhichtherecordiskept,andauthenticatedbythesealofhisoffice.(RULESOFCOURT,Rule
132.)
[34]
SeeFurusawaRubberPhilippines,Inc.v.SecretaryofLaborandEmployment,347Phil.293,300301(1997).
[35]
OmnibusRulesImplementingtheLaborCode,BookIII,RuleVIIIA,Section4(d).
[36]
Id.
[37]
OmnibusRulesImplementingtheLaborCode,BookIII,RuleVIIIA,16Section4(d).
[38]
Vinoyav.NationalLaborRelationsCommission,381Phil.460,472(2000).
[39]
In legitimate job contracting, the law creates an employeremployee relationship for a limited purpose, i.e., to ensure that the
employeesarepaidtheirwages.Theprincipalemployerbecomesjointlyandseverallyliablewiththejobcontractoronlyforthe
paymentoftheemployeeswageswheneverthecontractorfailstopaythesame.Otherthanthat,theprincipalemployerisnot
responsibleforanyclaimmadebytheemployees.
On the other hand, inlaboronlycontracting, the statute creates an employeremployee relationship for a comprehensive purpose: to
preventacircumventionoflaborlaws.Thecontractorisconsideredmerelyanagentoftheprincipalemployerandthelatteris
responsible to the employees of the laboronly contractor as if such employees had been directly employed by the principal
employer.Theprincipalemployerthereforebecomessolidarityliablewiththelaboronlycontractorforalltherightfulclaimsof
theemployees(SanMiguelCorporationv.MAERCIntegratedServices,Inc.,453Phil.543,566567(2003).
[40]
Supranote38.
[41]
Acevedov.AdvanstarCompany,Inc.,G.R.No.157656,11November2005,474SCRA656,668.
[42]
SanMiguelCorporationv.MAERCIntegratedServices,Inc.,supranote39.
[43]
EncyclopediaBritannica(Phils),Inc.v.NationalLaborRelationsCommission,332Phil.1,9(1996).
[44]
Rollo,p.68.
[45]
Id.at69.
[46]
Dr.Grievev.JudgeJaca,465Phil.825,831(2004).
[47]
Manayav.AlabangCountryClub,Incorporated,G.R.No.168988,19June2007,525SCRA140,157158.
[48]
SeeNeriv.NationalLaborRelationsCommission,G.R.Nos.9700809,21July1993,224SCRA717721.
[49]
Id.
[50]
Id.
[51]
Rollo,p.165.
[52]
DelosSantosv.NationalLaborRelationsCommission,423Phil.1020,1029(2001).
[53]
Rollo,p.385.
[54]
Id.at384.
[55]
Id.at385.
[56]
Filsyn v. National Labor Relations Commission, 327 Phil. 144, 150 (1996) Kimberly Independent Labor Union For Solidarity,
ActivismandNationalismOrganizedLaborAssociationInLineIndustriesandAgriculturev.Drilon,G.R.No.77629,9May
1990,185SCRA190,204CocaColaBottlersv.NationalLaborRelationsCommission,366Phil.581,589(1999).
[57]
PhilippineBankofCommunicationsv.NationalLaborRelationsCommission,230Phil.430,439(1986).
[58]
Extensionofservicecontractisnotasourceofemployeremployeerelation.(PhilippineAirlines,Inc.v.NationalLaborRelations
Commission,358Phil.919,936[1998].)
[59]
Rollo,p.122.