Brotherhood V Zamora

Brotherhood Labor Unity Movement of the Philippines (BLUM) et al. v. Hon.
Zamora, Presidential Assistant for

Legal Affairs and San Miguel Corporation (SMC)
GR L-48645 | 7 Jan 1987 | J. Gutierrez, Jr.
NATURE: Petition to Review Order SOLE
FACTS: Petitioner Union consists of pahinantes, carrying empty beverage bottles to and from the trucks owned by SMC.
They formed their Union sometime in Jan 1969. Subsequently, the Union requested for recognition and bargaining with the
SMC. SMC refused, averring that there is no employee-employer (ee-er) relationship between them, and that the petitioners
are employed by an independent contractor. Due to SMC's refusal to bargain, the Union filed a NOTICE OF STRIKE with
the Bureau of Labor Relations (BLR).
Pending conciliatory conferences before the BLR, the SMC allegedly illegally dismissed some of the Union's members
who, despite the Company's orders, refused to disaffiliate from the Union. Hence, the petitioners-dismissed employees, as
well as the Union, filed before the Labor Arbiter a COMPLAINT for UNFAIR LABOR PRACTICES against the SMC.
The resolution of the case is contingent upon the determination of the existence of ee-er relationship between the Union's
members and the SMC.
Unrebutted evidence and testimony on record establish that the petitioners are workers who have been employed at the San
Miguel Parola Glass Factory since 1961, averaging about seven (7) years of service at the time of their termination.
The petitioners first reported for work to Superintendent-in-Charge Camahort. They were issued gate passes signed by
Camahort and were provided by the respondent company with the tools, equipment and paraphernalia used in the loading,
unloading, piling and hauling operation.
Job orders emanated from Camahort. Said orders are relayed to the capatazes or group leaders who then give orders to the
workers as to where, when and what to load, unload, pile, pallet or clean.
Petitioners were paid every ten (10) days on a piece rate basis, that is, according to the number of cartons and wooden shells
they were able to load, unload, or pile. The group leader notes down the number or volume of work that each individual
worker has accomplished. This is then made the basis of a report or statement which is compared with the notes of the
checker and warehousemen as to whether or not they tally. Final approval of report is by officer-in-charge Camahort. The
pay check is given to the group leaders for encashment, distribution, and payment to the petitioners in accordance with
payrolls prepared by said leaders. From the total earnings of the group, the group leader gets a participation or share
of ten (10%) percent plus an additional amount from the earnings of each individual.
LABOR ARBITER: ee-er relationship exists

NLRC: Affirmed the LA
SOLE: Reversed the NLRC and held that there is no ee-er relationship
ISSUE-HELD:
1) WON there is an ee-er relationship – YES
2) WON there was unlawful withholding on the part of the ER – YES
RATIO:
There is an EE-ER Relationship between the Ps and SMC
The unrebutted evidence (provided above) reveal that the CONTROL TEST has been complied with. SMC controls the
manner, means, and method of work by the petitioners-employees. Orders come from SMC's employee, Camahort, to which
the employees must comply with.
The payment of the workers' wages is a critical factor in determining the actuality of an employer-employee relationship
whether between respondent company and petitioners or between the alleged independent contractor and petitioners. It is
important to emphasize that in a truly independent contractor-contractee relationship, the fees are paid directly to the
manpower agency in lump sum without indicating or implying that the basis of such lump sum is the salary per worker
multiplied by the number of workers assigned to the company.
The alleged independent contractors in the case at bar were paid a lump sum representing only the salaries the workers were
entitled to, arrived at by adding the salaries of each worker which depend on the volume of work they. had accomplished
individually. These are based on payrolls, reports or statements prepared by the workers' group leader, warehousemen and
checkers, where they note down the number of cartons, wooden shells and bottles each worker was able to load, unload, pile
or pallet and see whether they tally. The amount paid by respondent company to the alleged independent contractor
considers no business expenses or capital outlay of the latter. Nor is the profit or gain of the alleged contractor in the
conduct of its business provided for as an amount over and above the workers' wages. Instead, the alleged contractor
receives a percentage from the total earnings of all the workers plus an additional amount corresponding to a
percentage of the earnings of each individual worker, which, perhaps, accounts for the petitioners' charge of
unauthorized deductions from their salaries by the respondents.
(RELATED TO TAX) The case does not explicitly provide a ruling re. Wage deductions so I'll discuss it here. In the Labor
Code, Article 113 states:
No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his
employees, except:
a. In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
b. For union dues, in cases where the right of the worker or his union to check-off has been recognized by
the employer or authorized in writing by the individual worker concerned; and
c. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and
Employment.
Revenue Regulation 2-98, Sec. 2.78, provides that “The employer is constituted as the withholding agent”, authorized to
withhold tax on compensation income (a method of collecting the income tax at source upon receipt of the income).
In the case, the 10% deductions made on the salaries of the employees would be considered unlawful, since these do not fall
under any of the exceptions provided in the Labor Code. They could not be considered as withholding tax, since the
deductions do not accrue in favor of the government, but in favor of SMC's other employees, i.e. the capatazes and team
leaders.

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Brotherhood Labor Unity Movement of the Philippines (BLUM) et al. v. Hon.

Zamora, Presidential Assistant for

NATURE: Petition to Review Order SOLE

LABOR ARBITER: ee-er relationship exists

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