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Norkis Trading Corporation v. Buenavista

The respondents filed a complaint against Norkis Trading Corporation for illegal suspension, illegal dismissal, and unfair labor practice. Norkis Trading claimed that the respondents were not employees but rather members of PASAKA, a cooperative that served as an independent contractor supplying labor to Norkis Trading. The court ruled that PASAKA was a mere labor-only contractor and that the respondents were actually employees of Norkis Trading. PASAKA did not have substantial capitalization to qualify as a legitimate independent contractor, carried out work directly related to Norkis Trading's principal business without independence, and failed to ensure respondents' labor rights. Therefore, Norkis Trading was determined to be the principal employer of the respondents.

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232 views2 pages

Norkis Trading Corporation v. Buenavista

The respondents filed a complaint against Norkis Trading Corporation for illegal suspension, illegal dismissal, and unfair labor practice. Norkis Trading claimed that the respondents were not employees but rather members of PASAKA, a cooperative that served as an independent contractor supplying labor to Norkis Trading. The court ruled that PASAKA was a mere labor-only contractor and that the respondents were actually employees of Norkis Trading. PASAKA did not have substantial capitalization to qualify as a legitimate independent contractor, carried out work directly related to Norkis Trading's principal business without independence, and failed to ensure respondents' labor rights. Therefore, Norkis Trading was determined to be the principal employer of the respondents.

Uploaded by

Jestherin Baliton
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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G.R. No.

182018               October 10, 2012

NORKIS TRADING CORPORATION


vs.
JOAQUIN BUENA VISTA, HENRY FABROA, RICARDO CAPE, BERTULDO TULOD, WILLY
DONDOY ANO and GLEN VILLARASA

The respondents were hired by Norkis Trading, a domestic corporation engaged in the business of
manufacturing and marketing of Yamaha motorcycles and multi-purpose vehicles, on separate dates
and for various positions, particularly:

Name Date of Hiring Position

Joaquin Buenavista March 14, 1994 Operator

Henry Fabroa January 5, 1993 Welder

Ricardo Cape January 1993 Welder/Operator

Bertuldo Tulod November 13, 1994 Welder/Assistant Operator

Willy Dondoyano January 1993 Welder

Glen Villariasa February 1993 Welder 3

Although they worked for Norkis Trading as skilled workers assigned in the operation of industrial
and welding machines owned and used by Norkis Trading for its business, they were not treated as
regular employees by Norkis Trading. Instead, they were regarded by Norkis Trading as members of
PASAKA, a cooperative organized under the Cooperative Code of the Philippines, and which was
deemed an independent contractor that merely deployed the respondents to render services for
Norkis Trading. The respondents nonetheless believed that they were regular employees of Norkis
Trading

Despite having served respondent Norkis Trading for many years and performing the same functions
as regular employees, complainants were not accorded regular status. The filing of the complaint for
labor-only contracting allegedly led to the suspension of the respondents’ membership with
PASAKA.

Respondents filed a complaint for illegal suspension, illegal dismissal, unfair labor practice

Norkis Trading and PASAKA claimed that the respondents were not employees of Norkis Trading.
They insisted that the respondents were members of PASAKA, which served as an independent
contractor that merely supplied services to Norkis International Co., Inc. (Norkis International)
pursuant to a job contract Norkis Trading stressed that the respondents were deployed by PASAKA
16 

to Norkis International, a company that is entirely separate and distinct from Norkis Trading.

ISSUE: WON respondents are employees of Norkis


RULINg:

Norkis Trading is the principal employer of the respondents, considering that PASAKA is a
mere labor-only contractor.

Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor


merely recruits, supplies, or places workers to perform a job, work, or service for a principal. In labor-
only contracting, the following elements are present: (a) the contractor or subcontractor does not
have substantial capital or investment to actually perform the job, work, or service under its own
account and responsibility; and (b) the employees recruited, supplied or placed by such contractor or
subcontractor perform activities which are directly related to the main business of the principal.

person is considered engaged in legitimate job contracting or subcontracting if the following


conditions concur: (a) the contractor carries on a distinct and independent business and partakes the
contract work on his account under his own responsibility according to his own manner and method,
free from the control and direction of his employer or principal in all matters connected with the
performance of his work except as to the results thereof; (b) the contractor has substantial capital or
investment; and (c) the agreement between the principal and the contractor or subcontractor
assures the contractual employees’ entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social welfare
benefits.

First. PASAKA failed to prove that it has substantial capitalization or investment in the form of tools,
equipment, machineries, work premises, among others, to qualify as an independent contractor.
PASAKA’s claim that it has machineries and equipment worth ₱ 344,273.02 as reflected in its
Financial Statements and Supplementary Schedule

Second. PASAKA likewise did not carry out an independent business from NORKIS TRADING.

Third. Private respondents performed activities directly related to the principal business of NORKIS
TRADING. They worked as welders and machine operators engaged in the production of steel
crates which were sent to Japan for use as containers of motorcycles that are then sent back to
NORKIS TRADING.

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