Maraguinot vs. NLCR, Del Rosario & Viva Films

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ALEJANDRO MARAGUINOT, JR. AND PAUILINO ENERO v. NLRC, VIC DEL ROSARIO, VIVA FILMS
GR No. 120969

Facts:

Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part of the filming crew. Sometime in May 1992, sought the assistance of their supervisor to facilitate their request that their salary be adjusted in accordance with the minimum wage law.

On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would agree to their request only if they sign a blank employment contract. Petitioners refused to sign such document. After which, the Mr. Enero was forced to go on leave on the same month and refused to take him back when he reported for work. Mr. Maraguinot on the other hand was dropped from the payroll but was returned days after. He was again asked to sign a blank employment contract but when he refused, he was terminated.

Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The private respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition of movies- but not then making of movies; (b) That they hire contractors called “producers” who act as independent contractors as that of Vic Del Rosario; and (c) As such, there is no employee-employer relation between petitioners and private respondents.

The Labor Arbiter held that the complainants are employees of the private respondents. That the producers are not independent contractor but should be considered as labor-only contractors and as such act as mere agent of the real employer. Thus, the said employees are illegally dismissed.

The private respondents appealed to the NLRC which reversed the decision of the Labor Arbiter declaring that the complainants were project employees due to the ff. reasons: (a) Complainants were hired for specific movie projects and their employment was co-terminus with each movie project; (b)The work is dependent on the availability of projects. As a result, the total working hours logged extremely varied; (c) The extremely irregular working days and hours of complainants work explains the lump sum payment for their service; and (d) The respondents alleged that the complainants are not prohibited from working with other movie companies whenever they are not working for the independent movie producers engaged by the respondents.

A motion for reconsideration was filed by the complainants but was denied by NLRC. In effect, they filed an instant petition claiming that NLRC committed a grave abuse of discretion in: (a) Finding that petitioners were project employees; (b) Ruling that petitioners were not illegally dismissed; and (c) Reversing the decision of the Labor Arbiter.

In the instant case, the petitioners allege that the NLRC acted in total disregard of evidence material or decisive of the controversy.

Issues:

(a) W/N there exist an employee- employer relationship between the petitioners and the private respondents.

(b) W/N the private respondents are engaged in the business of making movies.

(c) W/N the producer is a job contractor.

Held:

There exist an employee- employer relationship between the petitioners and the private respondents because of the ff. reasons that nowhere in the appointment slip does it appear that it was the producer who hired the crew members. Moreover, it was VIVA’s corporate name appearing on heading of the slip. It can likewise be said that it was VIVA who paid for the petitioners’ salaries.

Respondents also admit that the petitioners were part of a work pool wherein they attained the status of regular employees because of the ff. requisites: (a) There is a continuous rehiring of project employees even after cessation of a project; (b) The tasks performed by the alleged “project employees” are vital, necessary and indispensable to the usual business or trade of the employer; and (c) However, the length of time which the employees are continually re-hired is not controlling but merely serves as a badge of regular employment.

Since the producer and the crew members are employees of VIVA and that these employees’ works deal with the making of movies. It can be said that VIVA is engaged of making movies and not on the mere distribution of such.

The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III of the Omnibus Rules Implementing the Labor Code.)

a. A 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, 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. The said producer has a fix time frame and budget to make the movies.

b. The contractor should have substantial capital and materials necessary to conduct his business. The said producer, Del Rosario, does not have his own tools, equipment, machinery, work premises and other materials to make motion pictures. Such materials were provided by VIVA.

It can be said that the producers are labor-only contractors. Under Article 106 of the Labor Code (reworded) where the contractor does not have the requisites as that of the job contractors.