Case Summary (G.R. No. 173254-55)
Relevant Facts
DFI owns an 800-hectare banana plantation in Alejal, Carmen, Davao, which was initially covered by the Comprehensive Agrarian Reform Law (CARL) of 1988. DFI was granted a deferment to continue its operations until 1998. Subsequently, following complaints from laid-off employees, the Department of Agrarian Reform (DAR) recalled DFI’s deferment privilege, leading to the automatic compulsory acquisition and distribution of the land under CARL. DFI then decided to voluntarily sell a portion of the plantation but retained about 200 hectares, referred to as the managed area. The awarded plantation was distributed to agrarian reform beneficiaries who later established DARBMUPCO.
Employment Agreements and Subsequent Disputes
DARBMUPCO entered a Banana Production and Purchase Agreement (BPPA) with DFI to cultivate high-grade bananas. Due to manpower shortages, DFI contracted individual contractors to recruit workers for the agricultural operations. Disputes arose regarding the employment status of the approximately 400 workers who were engaged by these contractors, with DFI and DARBMUPCO denying their status as employers.
Certification Election and NLRC Proceedings
In 1997, the SPFL filed a petition for certification election to determine the exclusive bargaining representative for the workers. The Med-Arbiter initially determined DARBMUPCO as the employer, but the Secretary of Labor and Employment (SOLE) later ruled that DFI was the statutory employer, stating that DFI supervised the contractors and directly directed the work. Both parties contested these decisions in subsequent appeals.
Court of Appeals Decision
The Court of Appeals (CA) upheld the SOLE’s ruling, concluding that DFI is the employer of the respondent-workers based on provided evidence, including that DFI engaged the contractors and supervised their work. The CA noted that the ownership of the land where work was performed did not determine employer status.
Labor Contracting Principles
The case revolves around the legal framework governing job contracting and labor-only contracting as delineated by the Labor Code of the Philippines. Labor-only contracting occurs when contractors have insufficient capital or investment, thus deeming them agents of the principal employer. DFI argued against the status of the contractors as labor-only, but the admissions made by the contractors, acknowledging their limited resources and labor supervision by DFI, were determinative.
Judicial Findings and Employer-Employee Relationship
The Supreme Court affirmed the CA's conclusion that DFI is the primary employer of the respondent-workers. The ruling emphasized the con
...continue readingCase Syllabus (G.R. No. 173254-55)
Case Background
- The case revolves around the employment status of approximately 400 workers (respondent-workers) who were engaged in a banana plantation owned by Diamond Farms, Inc. (DFI) and operated by the Diamond Farms Agrarian Reform Beneficiaries Multi-Purpose Cooperative (DARBMUPCO).
- DFI filed a Petition for Review challenging the decisions of the Court of Appeals which declared DFI as the statutory employer of the respondent-workers.
- The core issue was determining who among DFI, DARBMUPCO, or the respondent-contractors is the actual employer of the respondent-workers.
Relevant Facts
- DFI owned an 800-hectare banana plantation in Davao, which was subject to compulsory acquisition under the Comprehensive Agrarian Reform Law (CARL).
- DFI was granted a deferment privilege by the Department of Agrarian Reform (DAR) to continue operations until 1998 but later faced marketing problems and laid off employees.
- Following petitions from former employees alleging abandonment of operations, DAR revoked DFI's deferment privilege, leading to compulsory acquisition and distribution of the plantation.
- DFI offered to sell the plantation to the government, resulting in the division of the land into an awarded plantation (689.88 hectares) and a managed area (approximately 200 hectares retained by DFI).
Formation of DARBMUPCO
- The awarded plantation was turned over to agrarian reform beneficiaries who formed DARBMUPCO.
- DARBMUPCO entered into a Banana Production and Purchase Agreement (BPPA) with DFI, whereby they would cultivate bananas exclusively for DFI.
- DFI agreed to cover labor costs for packaging and maintenance operations conducted by