REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF LABOR AND EMPLOYMENT

NATIONAL LABOR RELATIONS COMMISSION
REGIONAL ARBITRATION BRANCH NO. IV
ND
2 Floor Hectan Commercial Building, National Highway
Corner Chipeco Avenue, Barangay Halang,
Calamba City, Laguna

ALLEN ALDRED R. TARONAS, ET AL,

Complainants

NLRC CASE NO. RAB IV 09-01755-10-C

HON. LABOR ARBITER DANA
CASTILLON

-versus-

DAEDUCK PHILS, INC.

Herein duly represented by
MR. MARIO ESTRELLA,
MR. DAEWON LEE
Respondents.
x- - - - - - - - - - -- - - - - -x

MOTION TO AMEND POSITION PAPER

TO IMPLEAD SILVER PEAK
MANPOWER SERVICES AS CO-
RESPONDENT

COMES NOW, the respondents DaeduckPhils, Inc./Mr. Mario V.

Estrella/Mr. Dae Won Lee, through the undersigned representative, unto this

Honorable Office of the Honorable Labor Arbiter most respectfully submits

and states that:

PREFARATORY STATEMENTS

This instant case is being amended to IMPLEAD as Co-Respondent,

Silver Peak Manpower Services as it is the true and factual EMPLOYER of

herein Complainant/s and is therefore a real party in interest who stands to

be benefited or injured by the judgment in the suit and without whom no

final determination can be had of an action. Likewise, Silver Peak

Manpower Services is hereby impleaded as a party for a complete

determination or settlement of the claim subject of the action and to afford

those already parties to this case complete relief.

THE PARTIES

1. Complainant/s, Mr. Allen Aldred Taronas et al, is/are

Employee/s of Silver Peak Manpower Services (SPMS) and holding a

position of regular status and assigned at specific project subcontracted with

Daeduck Philippines, Inc. (DDPI), whom may be served with summons,

notices, orders, decisions, and other legal processes of this Honorable Office

at his given address at Gulod Garita B. Maragondon, Cavite or through their

counsel Workers Assistance Center Inc., Indian Mango St., Manggahan

Compound, Sapa 1, Rosario Cavite.

2. Respondent DAEDUCK Phils., Inc., hereinafter referred to as

DDPI, is a corporation duly organized and existing under the laws of the

Republic of the Philippines, is engaged in manufacturing business with

business address at Philippine Economic Zone Authority (PEZA), Lot 1-13

Block. 20, Phase 4, Main Avenue, Rosario, Cavite, where this Honorable

Office’s summons and other processes may be served; Whereas, Mr. Mario

Estrella is the Human Resource Manager of DDPI and is duly authorized

representative of DDPI; and Mr. Dae Won Lee is the President of DDPI.

Both individual respondents may be served with summons, notices, orders,

decisions, and other legal processes of this Honorable Office at DDPI’s

business office at PEZA, Lot 1-13, Block. 20, Phase 4, Main Avenue,

Rosario, Cavite;
 3. As Co-Respondent, Silver Peak Manpower Services,

hereinafter referred to as SPMS, is a legitimate and licensed sub-contracting

enterprise, duly registered with Department of Trade and Industries (DTI),

with DO Certificate No. 00241886 as a single proprietor owned and

managed by Ms Catherine G. Moralde. SPMS holds a DO 18-02

License, and is compliant with all the government requirements as

legitimate subcontractor. It’s place of business is at 28 Dao Drive Camella

Homes, Habay II Bacoor, Cavite, where it may be served with summons,

notices, orders, decisions, and other legal processes of this Honorable

Office;

STATEMENT OF THE CASE

4. The Complaint filed against the respondent is for alleged illegal

deduction on wages made by Silver Peak Manpower Services which the

Complainant/s charged against respondents without impleading Silver Peak

Management Services as co-respondent with prayer for overtime pay, night

differential pay, holiday pay, 13th month pay and regularization which was

allegedly adversely affected due to alleged illegal deduction on wages.

STATEMENT OF THE FACTS

5. Complainant/s allege/s in his/their complaint/s primarily for

illegal deduction that respondents hired him/them as their employee/s and

intentionally did not implead Silver Peak Manpower Services as co-

respondents who in truth and in fact was the one who deducted the alleged

illegal deduction from their salaries as it is the employer from whom they

received their compensation from;

 6. Complainant/s in his/their complaint/s intentionally did not

state that DDPI and SPMS entered into a Service Agreement where the

latter will supply the former with services to support its peak production

requirements for labor and because of the Service Agreement, SPMS

engaged the services of complainants and are deployed at DDPI site

pursuant to said Service Agreement;

7. Prior to their deployment, they are formally engaged by SPMS,

and not by DDPI, as evidenced by the Complainants’ respective Engagement

Contract duly signed by them and attached hereto as an integral part of

Annex “A” – the previously filed position paper of herein respondent

DDPI and is also made an integral part hereof;

8. Pursuant to the Service Agreement between SPMS and DDPI,

SPMS has the right to deploy an SPMS Project Coordinator in the Client’s

site for the purpose of coordination, monitoring of activities of SPMS

employees only;

9. As earlier mentioned all the herein complainants are formally

engaged as employees of and by SPMS and are treated as such as evidenced

by payment of salaries, processing of SSS,PHIC, HDMF, among others.

Copies of SPMS bi-monthly payroll sheet duly acknowledge received bi-

monthly pay by individual employees, SSS employer contribution monthly

payment duly filed and paid with SSS with corresponding detailed list of

employee file including SSS transmittal certification and Home

Development Mutual Fund (HDMF) Receipt for monthly payments made by

SPMS with corresponding detailed SPMS Employee Transmittal List for

monthly Pag-ibig premium remittance are likewise attached hereto as an

integral part of Annex “A” – the previously filed position paper of herein

respondent DDPI and is likewise made an integral part hereof;

10. Under the Service Agreement, what the DDPI will do is just to

communicate with SPMS Coordinator as regards to the SPMS deployed

employees performance and results required in accordance with the Service

Agreement. If there would be any concerns regarding the conduct of

employees the DDPI will report the same with SPMS Coordinator which

will in turn resolve the particular issues or concern with SPMS internal

management;

11. As a matter of practice SPMS employees deployed in the

Client’s site will use DDPI’s ID Card, Swipe Card, Gate Pass, PEZA ID Pass

etc. for purposes of identification, convenience, and as a measure of security

against trespassers;

12. As part of the Service Agreement operational requirement, the

SPMS shall monitor the work performance of its employees to ensure its

contractual obligations with the Client DDPI of providing with quality

service are met. Accordingly, DDPI will conduct skills evaluation to see to

it that SPMS is keeping with its obligations under the agreement. DDPI will

inform the SPMS of results of the skills certification conducted. SPMS will

in turn decide what actions to be taken towards their employees having in

mind the of the result of the certification;

 13. On July 2010 SPMS communicated with DDPI its situation of

being in state of financial distress and has advised the client that it may stop

operations if its financial condition worsened. Eventually, SPMS closed its

business November 30, 2010 due to financial losses. However, so as not to

affect the operations of its Client DDPI, SPMS suggested its employees that

they may choose to apply for work to another subcontractor, the Maximum

Solutions Corporation (MSC). However, since MSC is another entity, a new

employment contract or engagement would be required;

14. On December 1, 2010, majority of the SPMS employees,

including the herein complainants applied for and were hired by MSC.

Hence, the complainants have ceased to become the employees of SPMS

effective as of their employment with MSC but nonetheless were deployed

at DDPI site;

15. On March 9, 2011, SPMS upon learning that some of its

employees have filed complaints with NLRC for underpayment of salaries

or wages, overtime pay, holiday pay, and service incentive leave pay among

others against the herein Respondents DDPI, Mr. Mario Estrella, and Mr.

Daewon Lee immediately field a MANIFESTATION to be included in the

instant case as co-respondent as it is a real party in interest who stands to be

benefited or injured by the judgment on this suit;

15. However since the complaint did not implead SPMS as co-

respondent and that the acts or acts complained of were allegedly done

during which SPMS was the employer and likewise SPMS voluntarily

appeared in the said proceeding through its representative, Atty. Williamore

P. Parada thereby placing itself under this Honorable Office’s jurisdiction,

herein respondent hereby formally files a motion with leave to implead

SPMS as co-respondent in the instant case through this amended position

paper in accordance with the rule of law and equity;

16. The basis of said motion is that notwithstanding the closure of

the operations, SPMS is a real party in interest who stands to be benefited or

injured by the judgment of the suit as SPMS has still contractual obligations

with DDPI arising from the Service Agreement, which contains an

indemnity clause, to wit:

“CONTRACTOR (SPMS) shall indemnify, defend and hold harmless the

CLIENT (DDPI). Its respective directors, officers, employees, officers,

employees, agents, successors and assigns, from and against all claims,

demands, actions, suits, judgments, losses, damages, costs and expenses,

including court costs and reasonable attorney’s fees, incurred as a result of

any of the following:

(i) breach of or failure to perform any obligation, provision or condition

of CONTRACTOR contained in this Agreement;

(ii) all losses and damages arising from any accident directly attributable

to its and/ or it employee’s fault or negligence which may cause the death or

bodily injury or injuries to any person or damage to property by or on

account of CONTRACTOR’S work under this Agreement;

(iii) CONTRACTOR’S failure to comply with any applicable laws,

regulations or order;

(iv) any negligent act or omission or intentional misconduct on the part of

the CONTRACTOR or its employees;

(v) the termination of CONTRACTOR under this Agreement or any

project or assignment;

(vi) the alleged existence of any employer/employee relationship between

CONTRACTOR’S employee and CLIENT;

(vii) any direct claims for worker’s compensation benefits asserted against

CLIENT by any of the CONTRACTOR’S employee”;

Other facts of the instant case are succinctly presented in Annex “A” – the

previously filed position paper of herein respondent DDPI attached

hereto and made an integral part hereof.

Likewise, the previously filed position paper of herein respondent attached

hereto as Annex “A” – the previously filed position paper of herein

respondent DDP is made an integral part hereof;

These factual backdrops will determine that the herein Respondent DDPI is

not and was not an employer of the herein Complainants.

ISSUE

I. Whether or not the Complainant/s is/are Regular Employees of

Respondent DDPI?

II. Whether or not Respondent DDPI is guilty of illegal deduction of salaries

and wages which shall entitle the complainant/s to the money claims against

Respondent DDPI.
 DISCUSSIONS

I. Complainant/s are NOT REGULAR employees of

Respondent DDPI.

In determining the existence of employee-employer

relationship, the elements that are generally considered comprise the so-

called “four-fold” test, namely:

a. the selection in engagement of the employee;

b. the payment of wages;

c. the power of dismissal; and

d. the employer’s power ( or reserved power) to control the

employee with respect to the means and methods by which the work is to

accomplished. It is this “control test” that is most important element.

(“Brotherhood” Labor Unity Movement of the Philippines, et al. vs.

Zamora, G.R. No. 48645, January 7, 1987).

One by one we shall discuss the elements or the “tests” and its

application to the present Complaints.

1. The selection and engagement of the employee.

The complaint would have wanted this Honorable Office to believe

that because the Complainants have worked for Respondent DDPI, then it

follows that they are Employees of DDPI. However the Complaint has failed

to recognize the fact that Respondent DDPI has a valid and existing Service

Agreement with Silver Peak Manpower Services. By the very nature of a

Service Agreement, it can only be expected that the Complainants will work
for Respondent DDPI, but they remain employees of SPMS. The herein

Complainants cannot close their eyes of this fact. Nothing in the Complaint

questioned the validity of the Service Agreement entered into by and

between SPMS and DDPI. Without an allegation and showing of its

invalidity, the Agreement stands and must be respected by the herein

Complainants;

The Complaint also alleges that they were hired by Respondent DDPI.

But this allegation is just that, a mere allegation and self-serving and is not

supported by any evidence.

“Hiring” is a term in Philippine Labor Law that has gained a technical

significance that is both a question of fact and law. Whether or not an

individual is “hired” must answered in light of the prevailing jurisprudence

regarding the matter. In one case the Supreme Court has this to say whether

an individual is hired by an employer, thus:

“To be considered valid, the hiring should be done by the employer or

his representative duly authorized to hire employees or laborers. Where the

employer is a corporation, the power to appoint is vested in the board of

directors, unless by the articles of incorporation, it has conferred upon an

executive officers of the corporation.”( Yu Chuck vs. “Kung Li Po,” 46 Phil.

608[1924]).

As to the manner of creation, a notable legal literature regarding the

matter is illuminating, thus:

“The relationship of master and servant relationship or employer and

employee is a contractual relationship. As between the parties themselves, at

least there must be something to indicate on the part of the supposed master

or employer that the supposed servant or employee is to act for him subject

to his control, and that supposed employee or servant must act or agree to
act in others behalf. In this respect, the rules applicable to the creation and

existence of the relationship of principal and agent are equally applicable.

The relationship may be created by express contract but this is not essential;

it may be created as well by conduct which that the parties recognize that

one is the employer or master and that the other is the employee of servant.

(35 Am Jur, p. 450)”.

The truth of the matter is that it was the SPMS, and not the

Respondent DDPI, who engaged the services of the herein Complainants as

evidenced by a valid Engagement Contract duly signed by the herein

complainants. Thus it cannot now be denied by the herein Complainants

that they are not engaged by SPMS without running afoul to the employment

contract they freely and voluntarily entered into. Without allegation and a

showing of invalidity, the Engagement Contract referred to above must stand

and be respected by the herein Complainants. There is no other conclusion

that could be drawn except for the fact that indeed it is SPMS, and not

Respondent DDPI, that engaged the services of the herein Complainants.

2. The payment of wages.

The wages of the herein Complainants were handed down or paid by

SPMS as evidenced by SSS Transmittal Certification, Pag-Ibig Fund

Receipt, Pay Slips. The Complaint alleges in par. 1.4 that the “wages are

literally handed down by Silver Peak” but there is no guidelines on how

wages should be paid. The Complaint would have want to suggests to this

Honorable Office that there is a valid, acceptable, or legal way of payment

of wages but the Complaint cannot give one. On the same paragraph it also

alleges that SPMS is just an agent or conduit of the herein Respondent DDPI

and therefore the Complaint concluded that it is DDPI who actually paid the
herein Complainants wages. However this allegation is never supported by

any evidence. An inference cannot stand on the basis of another inference.

The same paragraph also flatly declared that “agencies do not have

substantial capital”. Adequate capital means adequate to pay his people and

to keep the business his business operational. This declaration can be

negated by the fact that SPMS has been able to maintain operations by

timely payments of wages of its employees and that SPMS has DO

Certificate No. 00241886 as a single proprietor.

3. Power of Dismissal.

The Complaint in paragraph 1.5 also alleges that Respondent DDPI

has the authority to dismiss the herein Complainants but there was not any

showing of any authority or the exercise thereof by the herein Respondent

DDPI. It is but natural for Respondent DDPI to evaluate and assess the

performance of employees of SPMS to make sure that Service Agreement is

properly observed. What must be determined are whether the assessments

and evaluations, as bases for dismissals, if they were ever made, are

conclusive and binding to the herein Complainants. The Complaint

miserably failed to support these allegations by substantial evidence.

4. The employer’s power (or reserved power) to control the

employee with respect to the means and methods by which the work is to

accomplished.

In order to constitute a weighty, if not conclusive, factor in

determining whether the relationship between parties is that of master and

servant, the control of the alleged master must be complete or unqualified; it

must be authoritative control reaching into the details of how the work is
performed, and must be distinguished from mere suggestion as to the detail

or necessary cooperation as to the work furnished is a part of a larger

undertaking. In other words, a person beneficially interested in the work

being performed by another may exercise a certain measure of control for

a definite and restricted purpose without incurring the responsibilities or

acquiring the immunities of a master with respect to the person so

controlled;(emphasis supplied) and the existence of a master and servant

relationship will not be inferred from the mere reservation of powers which

do not deprive the person doing the work of his right to do the work

according to his own initiative as long as he does it according to the

contract. (56 C.J.S.)

As suggested by the literature above-cited that because Respondent

DDPI is beneficially interested in the work being performed under the

Service Agreement it is but natural to expect that at some point a certain

degree of control is exercised, but this not the degree or nature of control

that law comprehends.

“The principal consideration in determining whether a workman is

an employee or an independent contractor is the right to control the manner

of doing the work, it is not the actual exercise of the right by interfering

with the work, but the right to control, which constitutes the “test”.

(Emphasis supplied)(Amalgamated Roofing Co. vs. Traveler’s Ins. Co., 233

N.E., 259, 261, 00 III. 487, quoted in “Words and Phrases,” Permanent ed.,

Vol. 14, p. 576).

Thus it may be argued that Respondent DDPI may have actually at

some point have exercised the right by interfering with the work, but the
question remains is “Does it have the right to interfere or control the work

under either the law or contract?”

Based from the above discussions, on the evidence presented, and the

law applicable in the instant controversy it is hope that it is substantially

shown that the herein Respondent DDPI is not or was not an Employer of

the herein Complainants.

II. Respondent DDPI is not guilty of illegal deduction of salaries and

wages and therefore Complainant/s is/are not entitled to the

complainant to money claims against Respondent DDPI.

There is no factual basis of the claim of the complainant for underpayment

of salaries and wages, overtime pay, holiday pay and service incentive leave

pay as said allegation was based only form the presumption that certain

amounts were deducted from the Complaint/s salaries as payment of income

taxes or withholding taxes but the truth of the fact is that full payment was

made by DDPI to SPMS for the full amount of SPMS billings in accordance

with the Service Agreement.

Moreover, SPMS through its Manifestation herein attached as ANNEX B –

Manifestation filed by SPMS and is hereby made an integral part hereof

voluntarily and equivocally admitted that that to wit: “it has committed

inadvertent error in July 2010 when it started deducting P9.00 from the

wages of its employees (herein complainant/s) due to misapprehension of a

BIR rule on Withholding Tax. Nonetheless, the error was immediately

corrected and rectified on September 2010”. Likewise, SPMS voluntarily

and equivocally manifests its intent to settle any unpaid obligations it may

have in favor of the complainant employees to wit: “…should there be some

amounts which he claims that he is entitled to which pertains to Holiday

Pay, OT pay etc., SPMS is willing and to settle it provided that there

presented proof of specific incidents that this was not paid to him”

Complainant cannot claim for attorney’s fee since the complaint has no valid

cause of action and complaint does not allege a claim for recovery of unpaid

salaries and wages against the Respondent DDPI.

Moreover, the amended complaint of the complainants showed that it is

represented by Workers’ Assistance Center, Inc.(WACI) through counsel

Noel V. Neri. Jurisprudence dictates that a Corporation cannot validly

practice law and represent the herein Complainants following the case of

Ulep vs. Legal Aid Clinic, Inc.( Bar Matter No. 553, June 7, 1993); and that

the said case prohibits Atty. Neri from further representing the Complainants

as he cannot act as agent-lawyer of WACI;

PRAY E R

WHEREFORE, premises considered, it is respectfully prayed that:

1. This motion be given due course to implead Silver Peak

Manpower Services as Co-Respondent and accept the amended position

paper of herein Respondents as such;

2. The complaint for illegal deduction with prayer for

regularization as well as underpayment of salaries and wages, overtime pay,

holiday pay, and service incentive leave against the Respondent DDPI be

dismissed for lack of merit;

 3. To deny award of attorney’s fee as the Workers’ Assistance

Center, Inc.(WACI) as a Corporation cannot validly practice law and

represent the herein Complainants following the case of Ulep vs. Legal Aid

Clinic, Inc.( Bar Matter No. 553, June 7, 1993); and to prohibit Atty. Noel V.

Neri from further representing the Complainants as he cannot act as agent-

lawyer of WACI;

4. To order the Complainants to pay the Respondent DAEDUCK

Phils., Inc. the costs of the proceeding and reasonable attorney’s fees and

appearance fee;

All other reliefs and remedies that are just and equitable are likewise

prayed for.

Rosario, Cavite for Calamba City, May 21, 2011.

MARIO V. ESTRELLA
HUMAN RESOURCE MANAGER/
ADMIN SENIOR MANAGER
DAEDUCK PHILIPPINES, INC.
PHILIPPINE ECONOMIC ZONE AUTHORITY
LOT NO. 1-13, BLOCK 20, PHASE 4,
MAIN AVENUE, ROSARIO CAVITE 4106
VERIFIACATION AND CERTIFICATION ON NON-FORUM SHOPPING

I, Mario V. Estrella, of legal age, Filipino, and a resident of Tanza,

Cavite, after having been duly sworn in accordance with law hereby deposes

and say:

1. That I am the Human Resource Manager/Administrative Senior

Manager of Daeduck Phils., Inc., one of the Respondents in this case and the

duly authorized representative of the respondent of Daeduck Phils., Inc. and

individual respondent Mr. Dae Won Lee as evidenced by the Board

Secretary’s Certificate stating therein that a Board Resolution was executed

and approved authorizing the affiant to represent the corporation and the

individual respondents in the above-entitled case;

2. That I caused the preparation and filing pf the foregoing position

paper;

3. That I read and understood the contents of the foregoing

Position Paper and that the same are true and correct to the best of my own

knowledge and belief;

4. That I have not commenced nor filed any other action or

proceeding before the Supreme Court, the Court of Appeals, or any other

tribunal or administrative agency, entity or quasi-judicial body and to the

best of my own knowledge and belief there is no such action or proceeding

pending in the Supreme Court, the Court of Appeals, or any other tribunal or

administrative agency, entity, or quasi-judicial body and that if ever O

should learn later on that a similar action is pending in the Supreme Court,

the Court of Appeals, or any other tribunal or administrative agency, entity

or quasi-judicial body, I undertake to report the same to this Honorable

Office within five (5) days upon learning or knowledge of the pendency of

the same.

MARIO V. ESTRELLA

Affiant

Subscribed and sworn to before me on this__________________of

May in _______________________________________, Philippines, affiant

exhibiting his _______________________ issued ____________________.

Doc. No. ______________

Page No. ______________

Book No ______________

Series of 2011

Copy Furnished:

Allen Aldred R. Taronas, et al

Gulod Garita B, Maragondon, Cavite

Atty. Noel V. Neri

Workers Assistance Center Inc.,
Indian Mango St., Mangahan Compound, Sapa 1, Rosario Cavite

Silver Peak Manpower Services through

Atty. Williamore P. Parada
Trinidad Law Firm
Suite 5L,Vernida Bldg I, 120 Amorsolo Street, Makati City