Quintanar v. Coca Cola Bottlers Philippines Inc,. G.R. No. 210565, 28 June 2016.

MENDOZA, J.

FACTS: Complainants were former employees of Coca-Cola (CC) as regular Route

Helpers,* they were direct hires of the company during the period of 1984 to 2000.
After sometime, the complainants were transferred successively as agency workers to
the different manpower agencies, the latest being respondent Interserve Management
and Manpower Resources, Inc.
Complainants filed a case for illegal dismissal against CC. They contended that they
were regular employees of the latter and could only be dismissed for just and authorized
cause. CC, however, denied the existence of an employer-employee relationship with
the complainants. CC maintained that respondent Interserve was the employer of the
complainants with whom it has a service agreement.
LA and NLRC were consistent in holding that ER-EE relationship exists and,
consequently, that complainants were illegally dismissed. CA, however, overturned.
ISSUE/S: (1) Does an employment relationship exist between the route helpers and
CC even if during the course of their employment they were transferred to a labor
contractor?
(2) Can a contractor be considered engaged in labor only contracting despite its
registration with the DOLE as an independent contractor and possession of substantial
capital?
(3) Was there a valid termination and thereby a valid severance of employment
relationship when complainants were transferred to manpower agencies?
RULING: [Issue 1] Yes. In this case, the SC, guided by stare decisis, applied its position
in prior cases involving the Routine Helpers and CC. The Court ruled that that an
employment relationship existed between the parties for the following reasons:
1) Routine Helpers perform functions necessary and desirable, even indispensable, in
the usual business or trade of Coca- Cola Philippines, Inc;
2) SC pronouncements in prior cases that Interserve is a labor-only contractor;**
3) the employees performed work which was directly related to the principal business
of petitioner; and
4) in the service agreements between CC and the manpower agencies, CC still exercised
the right of control over the employees.
[Issue 2] Yes. The possession of substantial capital is only one element. Labor-only
contracting exists when any of the two elements is present, that is, such employees are
performing activities directly related to the principal business of the employer, and lack
of substantial capital or investment. Thus, even if the Court would indulge Coca-Cola
and admit that Interserve had more than sufficient capital or investment in the form of
tools, equipment, machineries, work premises, still, it cannot be denied that the
petitioners were performing activities which were directly related to the principal
business of such employer. Also, it has been ruled that no absolute figure is set for what
is considered 'substantial capital' because the same is measured against the type of work
which the contractor is obligated to perform for the principal.
[Issue 3] No. Even granting that the petitioners were last employed by Interserve, the
record is bereft of any evidence that would show that the petitioners voluntarily
resigned from their employment with Coca-Cola only to be later hired by Interserve.
Other than insisting that the petitioners were last employed by Interserve, Coca-Cola
failed not only to show by convincing evidence how it severed its employer relationship
with the petitioners, but also to prove that the termination of its relationship with them
was made through any of the grounds sanctioned by law.
-oOo-

*Their duties consist of distributing bottled Coca-Cola products to the stores and customers in their
assigned areas/routes, and they were paid salaries and commissions at the average of P3,000.00 per
month.
**since it did not have substantial capital or investment in the form of tools, equipment, machineries,
and work premises. (Agito case)