(3)

RONNIE L. ABING vs. NLRC, et al

G.R. No. 185345.September 10, 2014
Ponente: JUSTICE BIENVENIDO L. REYES
SALIENT POINTS/TOPICS: Labor Contracting or
Subcontracting; Labor-only contracting
Section 4(a) of Department Order No. 18-02 issued by
the Department of Labor and Employment (DOLE) defines
legitimate labor contracting or subcontracting as an
arrangement whereby a principal agrees to put out or farm
out with a contractor or subcontractor the performance or
completion of a specific job, work or service within a definite
or predetermined period, regardless or whether such job,
work or service is to be performed or completed within or
outside the premises of the principal. Under such an
arrangement, no employer-employee relationship is created
between the principal and the contractual worker, who is
actually the employee of the contractor.
On the other hand, labor-only contracting as defined
by Article 106 of the Labor Code occurs when any of the
following circumstances occurs: first, the contractor 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 the contractor are
performing activities which are directly related to the
principal business of the employer; or second, the contractor
does not exercise the right to control the performance of the
work of the employee. Such an arrangement is prohibited
and consequently, the law deems the principal as the
employer of the contractual employee.
As found by the Labor Arbiter, the NLRC and the CA,
Facilitators General Services, Inc. (FGSI) is a legitimate job

contractor and that the petitioner was its employee when he

was dismissed upon the expiration of its service contract with
Allied Bank.
Before FGSI entered into a service contract with Allied
Bank in September 2002, it had been doing business as a
personnel and manpower agency for 20 years since its
incorporation on April 17, 1980. Its service contract with
Allied Bank expressly provides that it shall provide Allied
Bank's main office with janitorial and maintenance personnel
who shall remain as FGSI's employees. Moreover, FGSI
serviced not only Allied Bank but had similar service
contracts with other companies, such as Asian Development
Bank, Bank of the Philippine Islands, United Coconut Planters
Bank, Kenny Rogers and Fortune Tobacco. As noted by the
appellate court, FGSI has its own investment in tools and
equipment used to provide janitorial services.
Applying the four-fold test used in determining an
employer-employee relationship, which are: (1) the selection
and engagement of employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the
employee's conduct, the Labor Arbiter, the NLRC and the CA
are all in agreement that these elements are possessed by
FGSI.
All these taken into account, the Supreme Court
dismissed the complaint for illegal dismissal filed against the
respondents. The Court ruled that petitioner Abing is clearly
an employee FGSI and not of Allied Bank.

Philippines and the Dorchester Marine Ltd. govern the

employment relationship between Eulogio Dumadag and the
petitioners. The two instruments are the law between them. They
are bound by their terms and conditions, particularly in relation to
this case, the mechanism prescribed to determine liability for a
disability benefits claim.

(5)
PHILIPPINE HAMMONIA SHIP AGENCY, INC. (now known
as BSM CREW SERVICE CENTRE PHILIPPINES, INC.) and
DORCHESTER MARINE LTD vs. EULOGIO V. DUMADAG
G.R. No. 194362.June 26, 2013
Ponente: JUSTICE ARTURO D. BRION
SALIENT POINTS/TOPICS: Seafarers; Philippine Overseas
Employment Administration Standard Employment Contract (POEASEC)
The Department of Labor and Employment (DOLE), through
the POEA, has simplified the determination of liability for workrelated death, illness or injury in the case of Filipino seamen
working on foreign ocean-going vessels. Every seaman and the
vessel owner (directly or represented by a local manning agency)
are required to execute the POEA Standard Employment Contract
(POEA-SEC) as a condition sine qua non prior to the deployment for
overseas work. The POEA-SEC, of which the parties are both
signatories, is the law between them and as such, its provisions
bind both of them. Said contract is supplemented by the CBA
between the owner of the vessel and the covered seaman.
In the present case, the POEA-SEC and the CBA between

the Associated Marine Officers and Seamens Union of the

Dumadag, however, pursued his claim for permanent total

disability benefits, reimbursement of medical expenses,

sickness allowance and attorneys fees against the
petitioners without observing the procedure both laid-out in the
POEA-SEC and the CBA. He consulted physicians of his choice
regarding his disability after Dr. Dacanay, the company-designated
physician, issued her fit-to-work certification for him. There is
nothing inherently wrong with the consultations as the POEA-SEC
and the CBA allow him to seek a second opinion. The problem only
arose when he pre-empted the mandated procedure by filing a
complaint for permanent disability compensation on the strength of
his chosen physicians opinions, without referring the conflicting
opinions to a third doctor for final determination as provided in the

POEA-SEC and the CBA. Said non-compliance constituted a

breach of his contractual obligation to have the conflicting
assessments of his disability referred to a third doctor for a
binding opinion.
After considering the circumstances of the present
case, the Court ruled that Dumadags non-compliance with
the mandated procedure under the POEA-SEC and the CBA
militates against his claim for permanent total disability
benefits, reimbursement of medical expenses, sickness
allowance and attorneys fees against the petitioners.