G.R. No. 118946 - People vs. Salem

Petitioner Coca-Cola Bottlers Phils., Inc. ("Coca-Cola") is a domestic corporation engaged in manufacturing, bottling, and distributing soft drink beverages and allied products.
Respondents Alan M. Agito, Regolo S. Oca III, Ernesto G. Alariao, Jr., Alfonso Paa, Jr., Dempster P. Ong, Urriquia T. Arvin, Gil H. Francisco, and Edwin M. Golez filed two complaints before the NLRC for reinstatement with back wages, regularization, nonpayment of 13th month pay, and damages.
Complaints were filed against Coca-Cola, Interserve Management & Manpower Resources, Inc. ("Interserve"), and other contractors.

Respondents alleged they were salesmen assigned at Coca-Cola’s Lagro Sales Office and had been employed for years without regularization.
Their employment was terminated on April 8, 2002, allegedly without just cause or due process.
Respondents failed to state specific grounds for filing complaints against other contractors aside from Coca-Cola and Interserve.

Coca-Cola averred that respondents were employees of Interserve, a legitimate independent contractor under a Contract of Services signed March 23, 2002.
Interserve was presented as an independent contractor with substantial capital investment (Articles of Incorporation, BIR registration, audited financial statements, and DOLE registration certificate).
Coca-Cola argued that respondents were hired, paid, and supervised by Interserve; thus, no employer-employee relationship existed between respondents and Coca-Cola.

Labor Arbiter found respondents were employees of Interserve, not Coca-Cola.
Emphasized that respondents’ work was not indispensable to Coca-Cola’s principal business of manufacturing and bottling.
Noted Interserve’s registration as a legitimate contractor and its maintenance of respondents’ employment records and remittances to SSS, Medicare, and Pag-ibig.
Declared that Coca-Cola’s issuance of circulars and rules to respondents did not amount to employer control.
Ordered Interserve to pay respondents their pro-rated 13th month pay but dismissed complaints against Coca-Cola and other contractors.

Affirmed Labor Arbiter’s decision; no employer-employee relationship between Coca-Cola and respondents.
Reiterated that Interserve was an independent contractor with substantial assets and registration.
Dismissed complaints against Coca-Cola for lack of merit.

Reversed NLRC Resolution and Labor Arbiter’s finding.
Declared Interserve a labor-only contractor lacking sufficient capital and investment to meet Coca-Cola’s demands for delivery and distribution services.
Found respondents performed tasks directly related and necessary to Coca-Cola’s main business.
Held that Coca-Cola exercised effective control over respondents’ work methods and conduct.
Noted provisions in the Contract of Service between Coca-Cola and Interserve implied mere manpower supply rather than specific jobs.
Remanded case to NLRC for further proceedings.

Coca-Cola challenged the Court of Appeals decision before the Supreme Court.
Raised four main issues regarding Interserve’s status as a labor-only contractor, respondents’ work being necessary to Coca-Cola, existence of employer-employee relationship, and nature of Interserve’s engagement.

Whether the Court of Appeals acted in accordance with evidence, laws, and jurisprudence in ruling that Interserve is a labor-only contractor.

Whether the Court of Appeals correctly concluded that respondents performed work necessary and desirable to Coca-Cola's business.

Whether the Court of Appeals erred in declaring respondents employees of Coca-Cola despite the absence of the four traditional elements of employment relationship (selection and hiring, payment of wages, dismissal, control).

Whether the Court of Appeals erred in concluding that Interserve was engaged only to supply manpower to Coca-Cola.