CHEVRON v. GALIT

[16] CHEVRON v.
GALIT
FACTS:
Galit alleged that he is a regular and permanent employee of Chevron since 1982, having been
assigned at the company's Pandacan depot; he is an "all-around employee" whose job consists
of cleaning the premises of the depot, changing malfunctioning oil gaskets, transferring oil from
containers and other tasks that management would assign to him; in the performance of his
duties, he was directly under the control and supervision of Chevron supervisors; on January 15,
2005, he was verbally informed that his employment is terminated but was promised that he will
be reinstated soon; for several months, he followed up his reinstatement but was not given back
his job.
SJS claimed that: it is a company which was established in 1993 and was engaged in the business
of providing manpower to its clients on a "per project/contract" basis; Galit was hired by SJS in
1993 as a project employee and was assigned to Chevron, as a janitor, based on a contract
between the two companies; contrary to Galit's allegation, he started working for SJS only in 1993;
the manpower contract between SJS and Chevron eventually ended on November 30, 2004
which resulted in the severance of Galit's employment; SJS finally closed its business operations
in December 2004; it retired from doing business in Manila on January 21, 2005; Galit was paid
separation pay of P11,000.00.
Chevron contended that it entered into two (2) contracts for janitorial services with SJS from May
1, 2001 to April 30, 2003 and from June 1, 2003 to June 1, 2004; under these contracts, SJS
undertook to "assign such number of its employees, upon prior agreement with [petitioner], as
would be sufficient to fully and effectively render the work and services undertaken" and to "supply
the equipment, tools and materials, which shall, by all means, be effective and efficient, at its own
expense, necessary for the performance" of janitorial services; Galit, who was employed by SJS,
was assigned to petitioner's Pandacan depot as a janitor; his wages and all employment benefits
were paid by SJS; he was subject to the supervision, discipline and control of SJS; on November
30, 2004, the extended contract between petitioner and SJS expired; subsequently, a new
contract for janitorial services was awarded by petitioner to another independent contractor;
petitioner was surprised that Galit filed an action impleading it; despite several conferences, the
parties were not able to arrive at an amicable settlement.
LA found that SJS is a legitimate contractor and that it was Galit's employer, not petitioner. The
LA dismissed Galit's complaint for illegal dismissal against petitioner for lack of jurisdiction on the
ground that there was no employer-employee relationship between petitioner and Galit. The LA
likewise dismissed the complaint against SJS and Salomon for lack of merit on the basis of his
finding that Galit's employment with SJS simply expired as a result of the completion of the project
for which he was engaged.
The NLRC affirmed the findings of the LA that SJS was a legitimate job contractor and that it was
Galit's employer. However, the NLRC found that Galit was a regular, and not a project employee,
of SJS, whose employment was effectively terminated when SJS ceased to operate.
Contrary to the findings of the LA and the NLRC, the CA held that SJS was a labor-only contractor,
that petitioner is Galit's actual employer and that the latter was unjustly dismissed from his
employment.
ISSUE: Whether or not SJS was a legitimate job contractor. (YES)
RULING:
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably
adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employee's
conduct, or the so-called "control test." Under the control test, an employer-employee relationship
exists where the person for whom the services are performed reserves the right to control not
only the end achieved, but also the manner and means to be used in reaching that end.
In the instant case, the true nature of Galit's employment is evident from the Job Contract between
petitioner and SJS that the latter was an employer, to wit: (1) the power of selection and
engagement of employees, under Sections 4.1 and 6.1 (d); (2) the payment of wages, under
Sections 4.1 and 6.1 (c); (3) the power to discipline and dismiss, under Section 4.1; and, (4) the
power to control the employee's conduct, under Sections 4.1, 4.2, and 5.1.
As to SJS' power of selection and engagement, Galit himself admitted in his own affidavit that it
was SJS which assigned him to work at Chevron's Pandacan depot. As such, there is no question
that it was SJS which selected and engaged Galit as its employee.
With respect to the payment of wages, the Court finds no error in the findings of the LA that Galit
admitted that it was SJS which paid his wages. While Galit claims that petitioner was the one
which actually paid his wages and that SJS was merely used as a conduit, Galit failed to present
evidence to this effect. Galit, likewise, failed to present sufficient proof to back up his claim that it
was petitioner, and not SJS, which actually paid his SSS, Philhealth and Pag-IBIG premiums. On
the contrary, it is unlikely that SJS would report Galit as its worker, pay his SSS, Philhealth and
Pag-IBIG premiums, as well as his wages, if it were not true that he was indeed its employee.
In addition, it would bear to point out that contrary to the ruling of the CA, the work performed by
Galit, which is the "scooping of slop of oil water separator," has no direct relation to petitioner's
business, which is the importation, refining and manufacture of petroleum products. The Court
defers to the findings of both the LA and the NLRC that the job performed by Galit, which
essentially consists of janitorial services, may be incidental or desirable to petitioner's main activity
but it is not necessary and directly related to it.
As to whether or not SJS is an independent contractor, jurisprudence has invariably ruled that an
independent contractor carries on an independent business and undertakes the contract work on
his own account, under his own responsibility, according to his own manner and method, and free
from the control and direction of his employer or principal in all matters connected with the
performance of the work except as to the results thereof.
In the instant case, SJS presented evidence to show that it had an independent business by
paying business taxes and fees and that it was registered as an employer with the Social Security
System. Moreover, there was no evidence to show that SJS and its employees were ever subject
to the control of petitioner. On the contrary, as shown above, SJS possessed the right to control
its employees' manner and means of performing their work, including herein respondent Galit.
As to its capital, there is no dispute that SJS generated an income of P1,523,575.81 for the year
2004. In the present case, while SJS' income of more than P1,500,000.00 was not shown to be
equivalent to its authorized capital stock, such income is an indication of how much capital was
put into its business to generate such amount of revenue. Thus, the Court finds no sufficient
reason to disturb the findings of the LA and the NLRC that SJS had substantial capital.

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[16] CHEVRON v.

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