Nestle Philippines vs. Puedan

Nestle Philippines, Inc. v. Puedan, GR 220617, Jan.
30, 2017 contractor (regardless of whether labor-only or independent), but that of a

Facts: seller and a buyer/re-seller. As aptly explained by NPI, the goods it
Respondents filed a complaint for illegal dismissal, damages and attorney’s manufactures are distributed to the market through various distributors,
fees against Nestle Phils., Inc. (NPI) and Ocho de Septiembre Inc. (ODSI). The e.g., ODSI, that in turn, re-sell the same to designated outlets through its
respondents alleged that ODSI and NPI hired them to sell various NPI own employees such as the respondents. Therefore, the reselling activities
products in the assigned covered area. After sometime, the respondents allegedly performed by the respondents properly pertain to ODSI, whose
demanded that they be considered regular employees of NPI, but they were principal business consists of the "buying, selling, distributing, and
directed to sign contracts of employment with ODSI instead. Respondents marketing goods and commodities of every kind" and “[entering] into all
refused to comply with such directives resulting to their dismissal from their kinds of contracts for the acquisition of such goods [and commodities].”
position. Respondents contend that ODSI is a labor-only contractor, and Thus, contrary to the CA's findings, the aforementioned stipulations in the
thus, they should be deemed regular employees of NPI, and there was no Distributorship Agreement hardly demonstrate control on the part of NPI
just or authorized cause for their dismissal. ODSI averred that it is a over the means and methods by which ODSI performs its business, nor were
company engaged in the business of buying, selling, distributing, and they intended to dictate how ODSI shall conduct its business as a
marketing of goods and commodities of every kind, and it enters into all distributor. Otherwise stated, the stipulations in the Distributorship
kinds of contracts for the acquisition thereof. ODSI admitted that it hired Agreement do not operate to control or fix the methodology on how ODSI
respondents as its employees and assigned them to execute the should do its business as a distributor of NPI products, but merely provide
Distributorship Agreement it entered with NPI. However, the business rules of conduct or guidelines towards the achievement of a mutually
relationship between NPI and ODSI turned sour. Eventually, NPI downsized desired result - which in this case is the sale of NPI products to the end
its marketing and promotional support from ODSI which resulted to the consumer.
termination of the Distributorship Agreement. ODSI argued that Verily, it was only reasonable for NPI - it being a local arm of one of the
respondents were not dismissed but merely on floating status. Meanwhile, largest manufacturers of foods and grocery products worldwide - to require
NPI did not file any position paper or appear in the scheduled conferences. its distributors, such as ODSI, to meet various conditions for the grant and
LA: Dismissed the complaint for lack of merit and concluded that all the continuation of a distributorship agreement for as long as these conditions
impleaded respondents therein (including NPI) should be held liable for the do not control the means and methods on how ODSI does its distributorship
payment of nominal damages plus attorney’s fees. business, as shown in this case. This is to ensure the integrity and quality of
NLRC: Reversed and set aside the LA ruling, and ordered ODSI and NPI to the products which will ultimately fall into the hands of the end consumer.
pay each of the respondents separation pay and nominal damages. Thus, the foregoing circumstances show that ODSI was not a labor- only
Respondents moved for a partial reconsideration. NPI also moved for contractor of NPI; hence, the latter cannot be deemed the true employer of
reconsideration, contending that it was deprived of its right to participate in respondents. As a consequence, NPI cannot be held jointly and severally
the proceedings before the LA and NLRC. NLRC denied both motions. liable to ODSI's monetary obligations towards respondents.
CA: Affirmed the NLRC ruling.
Issue: Whether ODSI is a labor-only contractor of NPI, and consequently, NPI
is respondents' true employer
Held:
In holding NPI jointly and severally liable with ODSI for the monetary awards
in favor of respondents, both the NLRC and the CA held that based on the
provisions of the Distributorship Agreement between them, ODSI is merely
a labor-only contractor of NPI.
However, a closer examination of the Distributorship Agreement reveals
that the relationship of NPI and ODSI is not that of a principal and a

Nestle Philippines vs. Puedan

Uploaded by

Copyright:

Available Formats

Nestle Philippines vs. Puedan

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Nestle Philippines vs. Puedan

Uploaded by

Copyright:

Available Formats

Nestle Philippines, Inc. v. Puedan, GR 220617, Jan.

30, 2017 contractor (regardless of whether labor-only or independent), but that of a

You might also like