Contractual workers won millions vs. a multinational

The Supreme Court awarded millions of pesos as backwages and damages to a group of contractual workers, declaring these hundreds of merchandizers as regular employees of a big multi-national and declaring one labor agency as having engaged in labor-only contracting. The company exhausted all legal remedies to shield itself from this labor case and used big law firms to fight this multi-million suit, but all were in vain. The workers won and they earned hundreds of millions in monetary awards. My former Law student, a humble lady labor lawyer, also got a whopping  P40 million in attorney’s fees. This was in the celebrated case of Joeb Aliviado, et al vs PGPI, et al, (GR 160506 )  decided by the highest court of the land, first, on 10 March 2010 and reaffirmed on 06 June 2011.

 It is common practice among manufacturing and sales companies, engaged in the business of selling consumer products to push their products in the malls store outlets by deploying merchandizers to push their products. They are not employees of the malls or of the manufacturing firms. They are supposed to be employees of some agencies or outsourcing companies that provide labor. 

 The problem is that the Labor Code considers workers as regular employees of the principal company, in this case, the manufacturing firms under any of the following circumstances:  one, if the work is usually necessary and desirable to the usual business of the principal, and two, when the agency has no substantial capitalization, and is said to be engaged in labor-only contracting. The law is very simple but big firms make business decisions by taking risks. Most of the time, they avoid the adverse effects of the labor law’s implementation. But in many cases already decided by the Supreme Court, this practice has been repeatedly condemned by the Court as a naked circumvention of the law. It is said that the advent of globalization made it imperative to embrace outsourcing and contractualization as a strategy to survive in a harshly competitive business environment.

 The complainants were hired by two agencies since 1982 to 1993, on a series of 5-month work contracts. Thus, they were called contractuals. They were paid minimum wages and were deprived of security of tenure.  In the early nineties, they filed a case for REGULARIZATION of their status. On November 29, 1996, after three years, the Labor Arbiter dismissed their complaint for supposed lack of merit. That decision was affirmed by the NLRC on July 27, 1997, less than one year from the workers’ appeal. The workers went to the Court of Appeals. They lost twice there when their motion for reconsideration was speedily disposed of. The workers did not lose hope. They went to the Supreme Court. They had no money. But they had a brave lady lawyer who took the cudgels for them. I am proud of this lawyer because she was my student way back in the 80s.

 The Supreme Court, on March 10, 2010, in a monumental judgement, decided in favor of the workers. The SC ruled that the appellate court and labor tribunals all committed reversible errors in failing to see the merits of the workers’ cause. The court found that one of the agencies being used by that giant multinational had a capitalization of a measly P31,250. It also ruled that the other agency, while legitimate, was guilty of illegal dismissal.  And since the dismissal was illegal, the employer should pay full backwages from 1993 up to 2011 or for a period of more than 18 years, and considering further that the manner of dismissal was in bad faith, the workers were awarded moral damages plus attorney’s fees equal to 10% of the total award. If you have read John Grisham’s Rainmaker, or saw the movie, this was one of its illustrations. The total liability of that giant firm would reach almost P500 million.

While we applaud the workers’ legal victory in this landmark case, we feel very disappointed that the workers had to fight since 1993 to collect what the law says they rightfully deserve. However, on second thought, we believe that this is part of the struggle and we should be happy that we have a Supreme Court that remains as the workers’ last bastion for justice and compassion. Workers should not lose heart even if they have to wait long for the ultimate reward of their painful  struggle.