PHIL. BANK COMMUNICATIONS vs.

NLRC
G.R. No. L-66598
December 19, 1986
Digest by: Lanz Olives

FACTS:
Petitioner PBCOM and CESI ( Corporate Executive Search Inc.)
entered into a letter agreement wherein CESI will provide
Temporary Services to petitioner. Attached to the letter was a list
of messengers, assigned to work with the petitioner, including
respondent Orpiada. Orpiada rendered services within the premises
of the bank. On October 1976, petitioner requested CESI to withdraw
Orpiadas assignment because Orpiadas services were no longer
needed. Thus, Orpiada filed a complaint against petitioner for illegal
dismissal and failure top ay the 13th month pay. The petitioner bank
maintains that no employer-employee relationship was established
between itself and Ricardo Orpiada and that Ricardo Orpiada was an
employee of (CESI) and not of the bank.
ISSUE/S:

With respect to the payment of Orpiadas wages, the bank

remitted to CESI the daily rate or Orpiada and CESI pays the latter
his wages. He was also listed in the payroll of CESI with SSS
deduction.
In respect of the power of dismissal, the bank requested
CESI to withdraw Orpiadas assignment, which resulted to the
latters termination.
With regards to power of control, Orpiada performed his
functions within the banks premises and not in CESA/
Payment of wages and power of dismissal exist between
CESI and Orpiada. However, selection and control exist between
Orpiada and the bank. Thus, it is necessary to determine the
relationship between the bank and CESI, whether the latter is a job
(independent) contactor or a labor-only contracting.
In the present case, the undertaking of CESI in favor of the
bank was not the performance of a specific job, but to produce its
client the bank with a certain number of persons to work as
messengers. Thus, Orpiada utilized the premises and office
equipment of the bank and not of CESI.
Orpiada worked in the bank for a period of 16 months.
Under the Labor Code, any employee who has rendered at least 1
year, whether continuous or not, shall be considered as a regular
employee.
Therefore, CESI was only engaged in a labor-only
contracting with petitioner and Orpiada. As a result, petitioner is
liable to Opiada as if Opiada had been directly employer by the bank.

WON an employer-employee relationship existed between the

petitioner bank and private respondent Ricardo Orpiada

DISPOSITIVE: NLRC and Ricardo Orpiada won

RULING/ RATIO:
YES. In the case at bar, Orpiada is not previously selected by the
bank but was assigned to work by CESI. The selection of Orpiada by
CESI, was however subject to the acceptance of the bank.

DOCTRINE: Under the general rule set out in the first and second
paragraphs of Article 106, an employer who enters into a contract
with a contractor for the performance of work for the employer, does
not thereby create an employer-employes relationship between

Petitioners: Philippine Bank of Communictions

Respondent: The National Labor Relations Commission, Honorable
Arbiter Teodorico L. Dogelio and Ricardo Orpiada
Petition: Petition for certiorari
Ponente: Feliciano, J.

himself and the employees of the contractor. Thus, the employees of

the contractor remain the contractor's employees and his alone.
Nonetheless when a contractor fails to pay the wages of his
employees in accordance with the Labor Code, the employer who
contracted out the job to the contractor becomes jointly and severally
liable with his contractor to the employees of the latter "to the extent
of the work performed under the contract" as such employer were the
employer of the contractor's employees. The law itself, in other
words, establishes an employer-employee relationship between the
employer and the job contractor's employees for a limited purpose,
i.e., in order to ensure that the latter get paid the wages due to them.

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