3. Aliviado v.

Procter and Gamble

GR. No. 160505
March 9, 2010


FACTS:

Respondent Procter & Gamble (P & G) entered into contracts with Promm-Gem and SAPS for the promotion and
merchandising of its products .Petitioners all individually signed employment contracts with either Promm-Gem or
SAPS for periods of more or less five months at a time. 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 also imposed disciplinary measures on erring merchandisers for reasons such as habitual
absenteeism, dishonesty or changing day-off without prior notice. In December 1991, petitioners filed a complaint
against P&G for regularization, service incentive leave pay and other benefits with damages. The Labor Arbiter
dismissed the complaint for lack of merit and ruled that there was no employer-employee relationship between
petitioners and P&G. On appeal, the decision was affirmed by the NLRC and subsequently by the CA. Hence, this
petition.


ISSUE:

Whether or not Promm-Gem and SAPS are legitimate job contractors


RULING:

Labor laws expressly prohibit labor-only contracting. To prevent its circumvention, the Labor Code establishes an
employer-employee relationship between the employer and the employees of the labor-only contractor. In this case,
the petitioners have been charged with the merchandising and promotion of the products of P&G, an activity that has
already been considered by the Court as doubtlessly directly related to the manufacturing business, which is the
principal business of P&G. 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, the Court finds that the
former is engaged in "labor-only contracting". Therefore, the employees of SAPS are the employees of P&G, SAPS
being the merely the agent of P&G.