Labor Law Digest: PHILIPPINE FUJI XEROX CORPORATION, et al v. NLRC et al [G.R. No. 111501. March 5, 1996]

PHILIPPINE FUJI XEROX CORPORATION, et al v. NLRC et al 
[G.R. No. 111501. March 5, 1996]

Facts:
Fuji Xerox entered into an agreement under which Skillpower, Inc. supplied workers to operate copier machines of Fuji Xerox as part of the latters Xerox Copier Project in its sales offices. Private respondent Pedro Garado was assigned as key operator at Fuji Xerox branch at Buendia, Makati  in February of 1980.

In February of 1983, Garado went on leave and his place was taken over by a substitute. Upon his return in March, he discovered that there was a spoilage of over 600 copies. Afraid that he might be blamed for the spoilage, he tried to talk to a service technician of Fuji Xerox into stopping the meter of the machine.

The technician refused Garados request, but this incident came to the knowledge of Fuji Xerox which, on May 31, 1983, reported the matter to Skillpower, Inc. The next day, Skillpower, Inc. wrote Garado, ordering him to explain. In the meantime, it suspended him from work. Garado filed a complaint for illegal dismissal.

The Labor Arbiter held in a decision rendered on October 30, 1986 that Garado was an employee of Skillpower, Inc., and that he had merely been assigned by Skillpower, Inc. to Fuji Xerox. Hence, the dismissal.

On the other hand, the NLRC found Garado to be in fact an employee of petitioner Fuji Xerox and by it to have been illegally dismissed.

Hence the present petition. Fuji Xerox argues that Skillpower, Inc. is an independent contractor and that Garado is its employee for the following reasons:

(1) Garado was recruited by Skillpower, Inc.;

(2) The work done by Garado was not necessary to the conduct of the business of Fuji Xerox;

(3) Garados salaries and benefits were paid directly by Skillpower, Inc.;

(4) Garado worked under the control of Skillpower, Inc.; and

(5) Skillpower, Inc. is a highly-capitalized business venture.

ISSUE:
(1) Whether or not Skillpower Inc. is an independent contractor and Garado was its employee?

HELD:
NO. Skillpower is a labor-only contractor and Garado is not its employee, based on the following findings:

(1) Garado was recruited by Skillpower, Inc. solely for assignment to Fuji Xerox to work in the latters Xerox Copier Project. When Garado was first assigned to work at Fuji Xerox, he had never been assigned to any other company so much so that by 1984, he was already a member of the union which petitioned the company for his regularization.

(2) The Xerox Copier Project of petitioners promotes goodwill for the company. It may not generate income for the company but there are activities which a company may find necessary to engage in because they ultimately redound to its benefit. Operating the company's copiers at its branches advertises the quality of their products and promotes the company's reputation and public image. It also advertises the utility and convenience of having a copier machine. It is noteworthy that while not operated for profit the copying service is not intended either to be promotional, as, indeed, petitioner charged a fee for the copies made.
Here, the service being rendered by private respondent was not a specific or special skill that Skillpower, Inc. was in the business of providing. 

(3) Private respondent was made to understand that he was an employee of Skillpower, Inc., and not of the client to which he was assigned. Garado signed a contract entitled Appointment as Contract Worker, in which it was stated that his status was that of a contract worker for a definite period from January 1, 1983 to June 30, 1983. As such, private respondents employment was considered temporary, to terminate automatically six (6) months afterwards, without necessity of any notice and without entitling private respondent to separation or termination pay. Therefore, the termination of the contract or any renewal or extension thereof did not entitle him to become an employee of the client and the latter was not under any obligation to appoint him as such, notwithstanding the total duration of the contract or any extension or renewal thereof.

(4) Two letters reveal the role which Fuji Xerox played in the dismissal of the private respondent. They dispel any doubt that Fuji Xerox exercised disciplinary authority over Garado and that Skillpower, Inc. issued the order of dismissal merely in obedience to the decision of petitioner.

(5) Petitioner Fuji Xerox argues that Skillpower, Inc. had typewriters and service vehicles for the conduct of its business independently of the petitioner. But typewriters and vehicles bear no direct relationship to the job for which Skillpower, Inc. contracted its service of operating copier machines and offering copying services to the public. The fact is that Skillpower, Inc. did not have copying machines of its own. What it did was simply to supply manpower to Fuji Xerox. The phrase substantial capital and investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business, in the Implementing Rules clearly contemplates tools, equipment, etc., which are directly related to the service it is being contracted to render. One who does not have an independent business for undertaking the job contracted for is just an agent of the employer.

Petition for certiorari is DISMISSED.