PHIL. BANK COMMUNICATIONS vs. NLRCG.R. No. L-66598December 19, 1986Digest by: Lanz Olives

Petitioners: Philippine Bank of CommunictionsRespondent: The National Labor Relations Commission, Honorable Arbiter Teodorico L. Dogelio and Ricardo Orpiada

Petition: Petition for certiorariPonente: Feliciano, J.

FACTS:Petitioner PBCOM and CESI ( Corporate Executive Search Inc.) entered into a letter agreement wherein CESI will provide Temporary Services to petitioner. Attached to the letter was a list of messengers, assigned to work with the petitioner, including respondent Orpiada. Orpiada rendered services within the premises of the bank. On October 1976, petitioner requested CESI to withdraw Orpiadas assignment because Orpiadas services were no longer needed. Thus, Orpiada filed a complaint against petitioner for illegal dismissal and failure top ay the 13th month pay. The petitioner bank maintains that no employer-employee relationship was established between itself and Ricardo Orpiada and that Ricardo Orpiada was an employee of (CESI) and not of the bank.ISSUE/S:

WON an employer-employee relationship existed between the petitioner bank and private respondent Ricardo Orpiada

RULING/ RATIO:YES. In the case at bar, Orpiada is not previously selected by the bank but was assigned to work by CESI. The selection of Orpiada by CESI, was however subject to the acceptance of the bank. With respect to the payment of Orpiadas wages, the bank remitted to CESI the daily rate or Orpiada and CESI pays the latter his wages. He was also listed in the payroll of CESI with SSS deduction. In respect of the power of dismissal, the bank requested CESI to withdraw Orpiadas assignment, which resulted to the latters termination.With regards to power of control, Orpiada performed his functions within the banks premises and not in CESA/Payment of wages and power of dismissal exist between CESI and Orpiada. However, selection and control exist between Orpiada and the bank. Thus, it is necessary to determine the relationship between the bank and CESI, whether the latter is a job (independent) contactor or a labor-only contracting.In the present case, the undertaking of CESI in favor of the bank was not the performance of a specific job, but to produce its client the bank with a certain number of persons to work as messengers. Thus, Orpiada utilized the premises and office equipment of the bank and not of CESI.Orpiada worked in the bank for a period of 16 months. Under the Labor Code, any employee who has rendered at least 1 year, whether continuous or not, shall be considered as a regular employee. Therefore, CESI was only engaged in a labor-only contracting with petitioner and Orpiada. As a result, petitioner is liable to Opiada as if Opiada had been directly employer by the bank.

DISPOSITIVE: NLRC and Ricardo Orpiada won

DOCTRINE: Under the general rule set out in the first and second paragraphs of Article 106, an employer who enters into a contract with a contractor for the performance of work for the employer, does not thereby create an employer-employes relationship between himself and the employees of the contractor. Thus, the employees of the contractor remain the contractor's employees and his alone. Nonetheless when a contractor fails to pay the wages of his employees in accordance with the Labor Code, the employer who contracted out the job to the contractor becomes jointly and severally liable with his contractor to the employees of the latter "to the extent of the work performed under the contract" as such employer were the employer of the contractor's employees. The law itself, in other words, establishes an employer-employee relationship between the employer and the job contractor's employees for a limited purpose, i.e., in order to ensure that the latter get paid the wages due to them.

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