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    SMC V Marec

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    Monique Ang
    The document discusses the differences between a legitimate job contractor and a labor-only contractor under Philippine law. It finds that MAERC displayed characteristics of a labor-only contractor as it was set up specifically to service the needs of SMC and its workers were never assigned to any other establishment. As a labor-only contractor, SMC would be considered a direct employer and jointly liable along with MAERC for paying all of the employees' rightful claims, including separation benefits.

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    SMC V Marec

    Uploaded by

    Monique Ang
    6 views1 page
    The document discusses the differences between a legitimate job contractor and a labor-only contractor under Philippine law. It finds that MAERC displayed characteristics of a labor-only contractor as it was set up specifically to service the needs of SMC and its workers were never assigned to any other establishment. As a labor-only contractor, SMC would be considered a direct employer and jointly liable along with MAERC for paying all of the employees' rightful claims, including separation benefits.

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    The document discusses the differences between a legitimate job contractor and a labor-only contractor under Philippine law. It finds that MAERC displayed characteristics of a labor-only contractor as it was set up specifically to service the needs of SMC and its workers were never assigned to any other establishment. As a labor-only contractor, SMC would be considered a direct employer and jointly liable along with MAERC for paying all of the employees' rightful claims, including separation benefits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    6 views1 page

    SMC V Marec

    Uploaded by

    Monique Ang
    The document discusses the differences between a legitimate job contractor and a labor-only contractor under Philippine law. It finds that MAERC displayed characteristics of a labor-only contractor as it was set up specifically to service the needs of SMC and its workers were never assigned to any other establishment. As a labor-only contractor, SMC would be considered a direct employer and jointly liable along with MAERC for paying all of the employees' rightful claims, including separation benefits.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner

    and terms of payment.[Vinoya v. NLRC]


    MAERC, as earlier discussed, displayed the characteristics of a labor-only contractor. Moreover, while
    MAERCs investments in the form of buildings, tools and equipment amounted to more than P4 Million, it was
    the SMC which required MAERC to undertake such investments under the understanding that the business
    relationship between petitioner and MAERC would be on a long term basis. MAERC did not have an
    independent business. Not only was it set up to specifically meet the pressing needs of SMC which was then
    having labor problems in its segregation division, none of its workers was also ever assigned to any other
    establishment, thus convincing us that it was created solely to service the needs of SMC.

    On the liability of SMC


    In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose,
    i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally
    liable with the job contractor only for the payment of the employees' wages whenever the contractor fails to
    pay the same. Other than that, the principal employer is not responsible for any claim made by the employees.
    In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive
    purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the
    principal employer and the latter is responsible to the employees of the labor-only contractor as if such
    employees had been directly employed by the principal employer. The principal employer therefore becomes
    solidarily liable with the labor-only contractor for all the rightful claims of the employees.
    This distinction between job contractor and labor-only contractor, however, will not discharge SMC from
    paying the separation benefits of the workers, inasmuch as MAERC was shown to be a labor-only contractor;
    in which case, petitioner's liability is that of a direct employer and thus solidarily liable with MAERC.

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