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    Neri v. NLRC

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    Jhomel Delos Reyes
    This case involves petitioners Virginia Neri and Jose Cabelin who were hired by respondent BCC, a corporation that provides technical and other services, and were assigned to work for FEBTC. They filed a complaint to be recognized as regular employees of FEBTC. The Labor Arbiter and NLRC ruled that BCC was an independent contractor as it had substantial capital of P1 million. They held that petitioners were employees of BCC, not FEBTC. The Supreme Court affirmed, finding that BCC was not engaged in "labor-only" contracting since it proved it had substantial capital, as was established before the lower courts. It was not necessary for BCC to also prove investment in tools,

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    Neri v. NLRC

    Uploaded by

    Jhomel Delos Reyes
    115 views2 pages
    This case involves petitioners Virginia Neri and Jose Cabelin who were hired by respondent BCC, a corporation that provides technical and other services, and were assigned to work for FEBTC. They filed a complaint to be recognized as regular employees of FEBTC. The Labor Arbiter and NLRC ruled that BCC was an independent contractor as it had substantial capital of P1 million. They held that petitioners were employees of BCC, not FEBTC. The Supreme Court affirmed, finding that BCC was not engaged in "labor-only" contracting since it proved it had substantial capital, as was established before the lower courts. It was not necessary for BCC to also prove investment in tools,

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    NERI V. NLRC

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    This case involves petitioners Virginia Neri and Jose Cabelin who were hired by respondent BCC, a corporation that provides technical and other services, and were assigned to work for FEBTC. They filed a complaint to be recognized as regular employees of FEBTC. The Labor Arbiter and NLRC ruled that BCC was an independent contractor as it had substantial capital of P1 million. They held that petitioners were employees of BCC, not FEBTC. The Supreme Court affirmed, finding that BCC was not engaged in "labor-only" contracting since it proved it had substantial capital, as was established before the lower courts. It was not necessary for BCC to also prove investment in tools,

    Copyright:

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

    Neri v. NLRC

    Uploaded by

    Jhomel Delos Reyes
    This case involves petitioners Virginia Neri and Jose Cabelin who were hired by respondent BCC, a corporation that provides technical and other services, and were assigned to work for FEBTC. They filed a complaint to be recognized as regular employees of FEBTC. The Labor Arbiter and NLRC ruled that BCC was an independent contractor as it had substantial capital of P1 million. They held that petitioners were employees of BCC, not FEBTC. The Supreme Court affirmed, finding that BCC was not engaged in "labor-only" contracting since it proved it had substantial capital, as was established before the lower courts. It was not necessary for BCC to also prove investment in tools,

    Copyright:

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

    A.

    Legitimate Job Contracting


    2. Elements of legitimate contracting
    39. Neri v. NLRC, G.R. Nos. 97008-09, 23 July 1993.

    Facts: Petitioners Virginia G. Neri and Jose Cabelin applied for positions with, and were hired
    by, respondent BCC, a corporation engaged in providing technical, maintenance, engineering,
    housekeeping, security and other specific services to its clientele. They were assigned to work in
    the Cagayan de Oro City Branch of respondent FEBTC on 1 May 1979 and 1 August 1980,
    respectively, Neri an radio/telex operator and Cabelin as janitor, before being promoted to
    messenger on 1 April 1989.

    On 28 June 1989, petitioners instituted complaints against FEBTC and BCC before Regional
    Arbitration Branch No. 10 of the Department of Labor and Employment to compel the bank to
    accept them as regular employees and for it to pay the differential between the wages being paid
    them by BCC and those received by FEBTC employees with similar length of service.

    The Labor Arbiter dismissed the complaint for lack of merit. Respondent BCC was considered
    an independent contractor because it proved it had substantial capital. Thus, petitioners were held
    to be regular employees of BCC, not FEBTC. The dismissal was appealed to NLRC which on 28
    September 1990 affirmed the decision on appeal. On 22 October 1990, NLRC denied
    reconsideration of its affirmance, prompting petitioners to seek redress from this Court.

    Issue: WON BCC is engaged in Labor only contracting. Hence, the petitioners’ are the
    employees of FEBTC

    Held: No, BCC is not engaged in labor only contracting.


    Respondent BCC need not prove that it made investments in the form of tools, equipment,
    machineries, work premises, among others, because it has established that it has sufficient
    capitalization. The Labor Arbiter and the NLRC both determined that BCC had a capital stock of
    P1 million fully subscribed and paid for. BCC is therefore a highly capitalized venture and
    cannot be deemed engaged in "labor-only" contracting.

    It is well-settled that there is "labor-only" contracting where: (a) the person supplying workers to
    an employer does not have substantial capital or investment in the form of tools, equipment,
    machineries, work premises, among others; and, (b) the workers recruited and placed by such
    person are performing activities which are directly related to the principal business of the
    employer.

    Article 106 of the Labor Code defines "labor-only" contracting thus —

    Art. 106. Contractor or subcontractor. — . . . . There is "labor-only" contracting


    where the person supplying workers to an employer does not have substantial
    capital or investment in the form of tools, equipment, machineries, work
    premises, among others, and the workers recruited by such persons are
    performing activities which are directly related to the principal business of such
    employer . . . . (emphasis supplied).
    Based on the foregoing, BCC cannot be considered a "labor-only" contractor because it has
    substantial capital. While there may be no evidence that it has investment in the form of tools,
    equipment, machineries, work premises, among others, it is enough that it has substantial capital,
    as was established before the Labor Arbiter as well as the NLRC. In other words, the law does
    not require both substantial capital and investment in the form of tools, equipment, machineries,
    etc. This is clear from the use of the conjunction "or". If the intention was to require the
    contractor to prove that he has both capital and the requisite investment, then the conjunction
    "and" should have been used. But, having established that it has substantial capital, it was no
    longer necessary for BCC to further adduce evidence to prove that it does not fall within the
    purview of "labor-only" contracting. There is even no need for it to refute petitioners' contention
    that the activities they perform are directly related to the principal business of respondent bank.

    Be that as it may, the Court has already taken judicial notice of the general practice adopted in
    several government and private institutions and industries of hiring independent contractors to
    perform special services. These services range from janitorial, security  and even technical or
    other specific services such as those performed by petitioners Neri and Cabelin. While these
    services may be considered directly related to the principal business of the
    employer, nevertheless, they are not necessary in the conduct of the principal business of the
    employer.

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