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    San Miguel Corporation V MAERC Integrated Services

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    barcelonna
    1. San Miguel Corporation (SMC) contracted with MAERC Integrated Services to provide workers for bottle washing and segregation. When the contract ended, the workers filed complaints against SMC and MAERC for illegal dismissal and unpaid wages and benefits. 2. The court had to determine if the workers were employees of SMC or MAERC, and if MAERC was an independent contractor or a labor-only contractor. 3. The court ruled the workers were SMC employees based on SMC's role in hiring and controlling the workers. It also found MAERC was a labor-only contractor set up specifically for SMC's needs, without an independent business, making SMC responsible

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    San Miguel Corporation V MAERC Integrated Services

    Uploaded by

    barcelonna
    423 views2 pages
    1. San Miguel Corporation (SMC) contracted with MAERC Integrated Services to provide workers for bottle washing and segregation. When the contract ended, the workers filed complaints against SMC and MAERC for illegal dismissal and unpaid wages and benefits. 2. The court had to determine if the workers were employees of SMC or MAERC, and if MAERC was an independent contractor or a labor-only contractor. 3. The court ruled the workers were SMC employees based on SMC's role in hiring and controlling the workers. It also found MAERC was a labor-only contractor set up specifically for SMC's needs, without an independent business, making SMC responsible

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    San Miguel Corporation v MAERC Integrated Services

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    San Miguel Corporation v MAERC Integrated Services

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    1. San Miguel Corporation (SMC) contracted with MAERC Integrated Services to provide workers for bottle washing and segregation. When the contract ended, the workers filed complaints against SMC and MAERC for illegal dismissal and unpaid wages and benefits. 2. The court had to determine if the workers were employees of SMC or MAERC, and if MAERC was an independent contractor or a labor-only contractor. 3. The court ruled the workers were SMC employees based on SMC's role in hiring and controlling the workers. It also found MAERC was a labor-only contractor set up specifically for SMC's needs, without an independent business, making SMC responsible

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    423 views2 pages

    San Miguel Corporation V MAERC Integrated Services

    Uploaded by

    barcelonna
    1. San Miguel Corporation (SMC) contracted with MAERC Integrated Services to provide workers for bottle washing and segregation. When the contract ended, the workers filed complaints against SMC and MAERC for illegal dismissal and unpaid wages and benefits. 2. The court had to determine if the workers were employees of SMC or MAERC, and if MAERC was an independent contractor or a labor-only contractor. 3. The court ruled the workers were SMC employees based on SMC's role in hiring and controlling the workers. It also found MAERC was a labor-only contractor set up specifically for SMC's needs, without an independent business, making SMC responsible

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    San Miguel Corporation v MAERC Integrated Services

    Facts
    Complainants are workers of SMC involved in the washing and segregating of
    various kinds of empty bottles used by SMC to sell and distribute its beer beverages
    to the consuming public. It appears that SMC entered into a contract with MAERC,
    engaging the services of the latter, such contract being renewed from time to time.
    When the service contract was terminated, the workers filed a complaint for illegal
    dismissal, underpayment of wages and non-payment of other benefits. They
    claimed that SMC was their real employer and that MAERC was merely used as a
    tool by SMC to avoid its liability under the Labor Code. The Labor Arbiter dismissed
    the complaints for illegal dismissal holding that MAERC is an independent
    contractor. The NLRC however, ruled that MAERC was a labor-only contractor and
    that complainants were SMC employees. This decision was affirmed by the CA.
    Issue
    1. WON the complainants are employees of SMC or MAERC
    2. WON MAERC is a labor-only contractor or an independent contractor
    Held
    1. The complainants are employees of SMC. In ascertaining an employeremployee relationship, the ff. factors are considered: (1) the selection and
    engagement of employee, (2) the payment of wages, (3) the power of
    dismissal, and (4) the power to control an employees conduct, which is the
    most important factor. In this case, the evidence disclosed that SMC played a
    large and indispensable part in the hiring of MAERCs workers. Majority of the
    complainants were already working for SMC when the workers were
    instructed to apply for work in MAERC to make it appear that complainants
    were hired by MAERC. As for the payment of wages, it was revealed that SMC
    assumed the responsibility of paying for the mandated overtime, holiday ,
    rest day and 13th month pay of the workers. As to the power of control, while
    the contract between SMC and MAERC provided that SMC has no control or
    supervision whatsoever over the conduct of the workers in respect to how
    they perform their task, there are indicators that SMC actively supervised the
    complainants. They also asserted their right to discipline the workers by
    recommending the penalty to be imposed due to infractions committed by
    some workers. With these facts and circumstances, the court thus held that
    the complainants are employees of SMC

    2. MAERC is a labor-only contractor. There is job contracting permissible under


    the Code if the ff. conditions are met: (1) the contractor carries on an

    independent business and undertakes to perform the job, service or task on


    its own account, under its own responsibility and according to its own manner
    and method free from the control and direction of the principal in all matters
    connected with the performance of the work, except as to the results thereof,
    and (2) the contractor has substantial capital or investment in the form of
    tools, equipment, machineries, work premises and other materials which are
    necessary in the conduct of his business. In this case, while MAERCs
    investment in the form of buildings, tools and equipment amounted to more
    than P4,000,000.00, the court cannot disregard the fact that it was SMC who
    required that MAERC undertook such investment under the understanding
    that their relationship wpuld be on a long-term basis. Nor do the court
    believes that MAERC has an independent business. Not only was it set-upped
    to specifically meet the pressing needs of SMC which was having their labor
    problems in the segretagtion division, none of its workers were also ever
    assigned to any other establishment. Therefore, SMC is a labor-only
    contractor.

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