GARDEN OF MEMORIES PARK and PAULINA REQUIÑO vs NLRC

G.R. No. 160278, February 8, 2012

Facts
 Hilaria Cruz worked at the Garden of Memories as utility worker from August 1991 until
termination on February 1998.
 Her nature of work in said place is utility work: cleaning and maintenance of ground facilities of
the memorial park.
 One day, a misunderstanding ensued between Cruz and a co-worker regarding the use of water
hose and when it came into knowledge of Requiño, they were told to go home and not to
return anymore.
 After 3 days, Cruz, reported for work but she was told that she was already replaced.
 She reported the matter to manager of Garden of Memories and manifested her protest.
 According to Cruz, she is a regular employee. Hence, cannot be terminated without just cause.
 Garden of Memories, however, denied liability, and said Requiño is her employer and that no
employer-employee relationship exists between Cruz and Garden of Memories as Requiño is an
independent service contractor.
 She filed illegal dismissal and money claims against Garden of Memories.

Issue
1. Is Paulina Requiño a labor-only contractor?
2. Is Cruz an employee of Garden of Memories?

Law Applicable / Legal Principle

 The law applicable is Article 106 of the Labor Code defining and prohibiting Labor-only
Contracting.

Case History
 (1998) Cruz filed for illegal dismissal and money claims.
 (1999) Labor Arbiter held that Requiño is a labor-only contractor.
 (2000) NLRC: affirmed Labor Arbiter’s ruling because Requiño has no substantial capitalization
or investment in the form of tools.
 Meanwhile, the Court of Appeals affirmed the ruling of the NLRC. Hence, this petition.

Ruling
1. Yes, Requiño is a labor-only contractor as she failed to overturn the presumption of labor-only
contracting when she failed to prove that she has sufficient capitalization. Neither was it shown
that it has invested in tools and other materials necessary for completion of service contract.

Here, the Supreme Court found that there is no compelling reason to deviate from the findings
of the tribunals and that both capitalization and power of control on the part of Requiño are
wanting.

2. Yes, Cruz is an employee of Garden of Memories. Requiño failed to prove her power of control
over the work of Cruz as shown by the Service Control Agreement between Garden of
Memories and Requiño. Here, the work of Cruz was subjected to the requirements and
standards of Garden of Memories. More importantly, Requiño agreed in the contract the
performance of work which is of similar nature as that of the regular employees of the Garden
of Memories which shows that the power of control over the employees is possessed by
Garden of Memories.
Opinion of the Student
 I agree with the Supreme Court.
 Here, the Supreme Court applied the provision of Article 106 of the Labor Code to favor Cruz as
one who was a victim of the injustice brought about by those who engage in labor-only
contracting.
 It was very clear in the case that Garden of Memories controlled the performance of the work
of those being deployed by Requiño to work in the place. Moreover, there was no showing that
Requiño, if she is an independent service contract, has the substantial capitalization or
investment in the form or materials or tools to perform the service contract. Therefore, it must
be concluded that Cruz is an employee of Garden of Memories.