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    Civil Law Aliviado vs. Procter and Gamble G.R. No. 160506 June 6, 2011 SUBJECTS: Obligations and Contract Facts

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    Weddanever Cornel
    This case involved merchandisers who worked promoting Procter & Gamble products. They were hired by and received wages from two companies, Promm-Gem and SAPS. The merchandisers argued P&G was their actual employer. The Supreme Court found Promm-Gem was a legitimate independent contractor but SAPS was a "labor-only contractor" as it had no substantial capital investment and the work directly related to P&G's business. As such, P&G was considered the employer of those hired by SAPS under labor law and was responsible for their benefits. The petition was granted finding an employer-employee relationship between P&G and the merchandisers hired by SAPS.

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    Civil Law Aliviado vs. Procter and Gamble G.R. No. 160506 June 6, 2011 SUBJECTS: Obligations and Contract Facts

    Uploaded by

    Weddanever Cornel
    98 views2 pages
    This case involved merchandisers who worked promoting Procter & Gamble products. They were hired by and received wages from two companies, Promm-Gem and SAPS. The merchandisers argued P&G was their actual employer. The Supreme Court found Promm-Gem was a legitimate independent contractor but SAPS was a "labor-only contractor" as it had no substantial capital investment and the work directly related to P&G's business. As such, P&G was considered the employer of those hired by SAPS under labor law and was responsible for their benefits. The petition was granted finding an employer-employee relationship between P&G and the merchandisers hired by SAPS.

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    This case involved merchandisers who worked promoting Procter & Gamble products. They were hired by and received wages from two companies, Promm-Gem and SAPS. The merchandisers argued P&G was their actual employer. The Supreme Court found Promm-Gem was a legitimate independent contractor but SAPS was a "labor-only contractor" as it had no substantial capital investment and the work directly related to P&G's business. As such, P&G was considered the employer of those hired by SAPS under labor law and was responsible for their benefits. The petition was granted finding an employer-employee relationship between P&G and the merchandisers hired by SAPS.

    Copyright:

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

    Civil Law Aliviado vs. Procter and Gamble G.R. No. 160506 June 6, 2011 SUBJECTS: Obligations and Contract Facts

    Uploaded by

    Weddanever Cornel
    This case involved merchandisers who worked promoting Procter & Gamble products. They were hired by and received wages from two companies, Promm-Gem and SAPS. The merchandisers argued P&G was their actual employer. The Supreme Court found Promm-Gem was a legitimate independent contractor but SAPS was a "labor-only contractor" as it had no substantial capital investment and the work directly related to P&G's business. As such, P&G was considered the employer of those hired by SAPS under labor law and was responsible for their benefits. The petition was granted finding an employer-employee relationship between P&G and the merchandisers hired by SAPS.

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

    CIVIL LAW

    Aliviado vs. Procter and Gamble


    G.R. No. 160506 June 6, 2011

    SUBJECTS: Obligations and Contract

    FACTS:
    Petitioners worked as merchandisers of P&G. They all individually signed employment contracts
    with either Promm-Gem or SAPS. They were assigned at different outlets, supermarkets and
    stores where they handled all the products of P&G. They received their wages from Promm-Gem
    or SAPS. SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for
    reasons such as habitual absenteeism, dishonesty or changing day-off without prior notice. To
    enhance consumer awareness and acceptance of the products, P&G entered into contracts with
    Promm-Gem and SAPS for the promotion and merchandising of its products. In December 1991,
    petitioners filed a complaint against P&G for regularization, service incentive leave pay and
    other benefits with damages.

    ISSUE: Whether or Not P&G is the employer of petitioners.

    HELD:
    In order to resolve the issue of whether P&G is the employer of petitioners, it is necessary to first
    determine whether Promm-Gem and SAPS are labor-only contractors or legitimate job
    contractors.Clearly, the law and its implementing rules allow contracting arrangements for the
    performance of specific jobs, works or services. However, in order for such outsourcing to be
    valid, it must be made to an  independent contractor because the current labor rules expressly
    prohibit labor-only contracting. To emphasize, there is labor-only contracting when the
    contractor or sub-contractor merely recruits, supplies or places workers to perform a job, work or
    service for a principal and any of the following elements are present:

    i) The contractor or subcontractor does not have substantial capital or investment which relates to
    the job, work or service to be performed and the employees recruited, supplied or placed by such
    contractor or subcontractor are performing activities which are directly related to the main
    business of the principal; or

    ii) The contractor does not exercise the right to control over the performance of the work of
    the contractual
    Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find
    that it is a legitimate independent contractor.

    Considering that SAPS has no substantial capital or investment and the workers it recruited are
    performing activities which are directly related to the principal business of P&G, we find that the
    former is engaged in “labor-only contracting”.Where labor-only contracting exists, the Labor
    Code itself establishes an employer-employee relationship between the employer and the
    employees of the labor-only contractor. The statute establishes this 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.

    Petition Granted

    NOTE:
    Respondent filed MR, which was denied.
    In its resolution, the Court upheld its decision declaring SAPS has no substantial capital,
    therefore, labor-only contractor.

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