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Allied Banking Corporation, Now Merged With Philippine National Bank Vs Reynold Calumpang

The document summarizes a Supreme Court case between Allied Banking Corporation and an employee, Reynold Calumpang. The Court of Appeals found an employer-employee relationship existed between the bank and Calumpang. However, the bank argued Calumpang was employed by a third party contractor, RCI. The Supreme Court found both the bank and RCI responsible as the bank was the principal employer and RCI was a labor-only contractor, making it an agent of the bank as the actual employer. The Court determined both the bank and RCI were responsible for addressing Calumpang's claims of unfair dismissal and underpayment.

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62 views2 pages

Allied Banking Corporation, Now Merged With Philippine National Bank Vs Reynold Calumpang

The document summarizes a Supreme Court case between Allied Banking Corporation and an employee, Reynold Calumpang. The Court of Appeals found an employer-employee relationship existed between the bank and Calumpang. However, the bank argued Calumpang was employed by a third party contractor, RCI. The Supreme Court found both the bank and RCI responsible as the bank was the principal employer and RCI was a labor-only contractor, making it an agent of the bank as the actual employer. The Court determined both the bank and RCI were responsible for addressing Calumpang's claims of unfair dismissal and underpayment.

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emen pena
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Clemente A.

Pena

Block 2A, 11-23724

ALLIED BANKING CORPORATION, now merged with PHILIPPINE NATIONAL


BANK Vs REYNOLD CALUMPANG

G.R. No. 219435


January 17, 2018
Velasco Jr., J.:

Statement of Issue/s: Whether or not the Court of Appeals erred in finding that the Bank and
the respondent had an employer-employee arrangement.

Complaint’s Argument/s: Petitioner terminated the respondent Calumpag for delaying the
fulfillment of the said assignment to the client of the former who discovered that during those
periods the respondent was also plying his pedicab and ferrying passengers and the
respondent had borrowed money from their multiple clients. It argued that the respondent
was not RCI's employee, but RCI's partner, with whom it had entered into a Service
Agreement to provide 'messengerial, janitorial, communications and maintenance services
and workers for that reason. It also denied the existence of any employer-employee
relationship between itself and the respondent because of the existence of the service
agreement which clearly indicated in Article XI. It futher argued that it was merely
exercising its prerogative under the Service Agreement to request substitution or relief from
any RCI assigned staff when the Branch Head told the respondent that its services would no
longer be needed at the Branch. It concluded that since there was no relationship between the
parties between employer and employee, the respondent did not bring an action against
himself for wrongful dismissal, damages and other claims.

Respondent’s Argument/s: As a janitor at the petitioner's Tanjay City Branch and also a
messenger service, Calumpang was terminated by the petitioner for the latter's client's delay
in complying with the said task. He lodged a complaint against the complainant before the
NLRC for unfair dismissal and underpayment of wages and alleged that the four-fold
employer-employee relationship test between him and the bank was present.1) a regular
employee of the Bank assigned in the branch; 2) engaged his services and exercised direct
control and supervision over him through the Branch Head, not only as to the results of his
work but also as to the means and methods by which the same was to be accomplished; 4) his
salary and wages is being paid by the branch every “quincina”.  He further alleged that it was
petitioner Bank, through its Branch Head, who terminated his services.
Decision of the Court: Labor Arbiter’s ruling; It held that there was an employer-employee
relationship between petitioner and respondent, based on the following findings: (a)
Respondent rendered services to petitioner for eleven (11) unbroken years; (b) There was no
evidence of a Service Agreement between petitioner and RCI; (c) There was no evidence of a
request for replacement of respondent made by petitioner with RCI; (d) Respondent was
directly paid by petitioner and not through RCI; (e) Respondent's work was directly
controlled and supervised by petitioner; (f) It was petitioner who terminated the services of
respondent with no participation of RCI whatsoever; and (g) RCI disowned any employment
relationship with respondent and ruled that the reason and manner by which respondent was
terminated fell short of the requirements of the law since due process was not observed.
Accordingly, respondent was declared to have been illegally dismissed and ordered to be
reinstated without loss of seniority or privileges, with full backwage. The NLRC affirmed the
ruling of LA and upheld its ruling by Court of Appeals.

The Court finds the Court of Appeals partly erred in declaring that there exists an employer-
employee relationship between the Bank and respondent.

Ratio: A finding that a contractor is a labor-only contractor, as opposed to legal work


contracting, is equivalent to claiming that an employer-employee arrangement exists between
the principal and the supposed contractor's workers, and that the labor-only contractor is
deemed to be a mere agent of the principal, the actual employer.

In this case, petitioner bank is the principal employer, and RCI is the primary contractor of
the labor force. As such, petitioner and RCI are firmly responsible for the respondent's
rightful allegations.

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