Republic of the Philippines

Department of Labor and Employment

MEDIATION ARBITRATION AND LEGAL SERVICES UNIT
Regional Office No. III
Diosdado Macapagal Government Center, Brgy. Maimpis
City of San Fernando, Pampanga
IN
RE:
CERTIFICATION
ELECTION AMONG THE RANKAND-FILE EMPLOYEES OF AAIN
PHIL. CO. LTD.
Case No. RO3-RO-CE-03-0314-14
KILUSAN NG MANGGAGAWANG
MAKABAYAN (KMM-KATIPUNAN)
AAIN PHIL. CO. LTD. CHAPTER
(KMM-AAINC),
Petitioner,
AAIN PHIL. Corp.,
Employer.
x------------------------------------------------------x
SUPPLEMENTAL POSITION PAPER
PETITIONER, by counsel, to this Honorable Office,
most respectfully submits this Supplemental Position Paper
in support of its Petition, as follows:
STATEMENT OF THE CASE
This is a petition for the opening of the ballots for votes
casted by the 172 members of the KILUSAN NG
MANGGAGAWANG
MAKABAYAN
(KMM-KATIPUNAN)
AAIN PHIL. CO. LTD. CHAPTER (KMM-AAINC) during the
certification election held at AAIN PHIL. Corp. compound in
San Rafael, Bulacan on 12 July 2014. The 172 ballots were
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challenged by Employer, AAIN Phil. Corp. on the supposition

that the 172 names appearing in the list submitted by herein
Petitioner are attached to Virtue Manpower Services and are
not regular employees of AAIN Phil. Corp.
Upon the other hand, Petitioner challenges the ballots
for votes casted by four (4) employees of AAIN on the
ground that they are supervisors and/or members of the
managerial staff and therefore, disqualified from taking part
in the certification election.
As reliefs, Petitioner herein seeks for the immediate
counting of the 172 ballots challenged by AAIN Phil. Corp.
and likewise prays that the four votes that Petitioner
challenges be nullified and excluded from the counting of
votes.
PARTIES
Petitioner, Kilusan ng Manggagawang Makabayan
(KMM-KATIPUNAN) AAIN PHIL. CO. LTD CHAPTER (KMMAAINC), is the local chapter of the Kilusang ng
Manggagawang Makabayan (KMM)-Katipunan, having been
created and chartered as such on 09 February 2014, with all
the rights and privileges of a legitimate labor organization to
act as the representatives of its members for the purpose of
collective bargaining with its employer and the right to
promote the moral, social, political and economic well-being
of its member subject to the provisions of the Labor Code
and other pertinent laws. It may be served with summonses
and other legal processes of this Honorable Office at Room
206 JIAO Bldg., No. 2 Timog Avenue, Quezon City.
Employer, AAIN Phil. Corp. (AAIN for brevity) is a
corporation established and existing under the laws of the
Philippines. It manufactures inner garments like brassieres,
bikinis, sandos, boxer shorts and the like. Its principal
address is at PDC Information Techno Park, Brgy. Tambubong,
San Rafael, Bulacan where it can be served with summonses
and other legal processes of this Honorable Office.
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BRIEF STATEMENT OF FACTS

Petitioner
KILUSAN
NG
MANGGAGAWANG
MAKABAYAN (KMM-KATIPUNAN) AAIN PHIL. CO. LTD.
CHAPTER (KMM-AAINC) is the local chapter of Kilusan ng
Manggagawang Makabayan with around one hundred ninety
(190) members from the rank-and-file sector of AAIN. The
union officers and members hold positions and are engaged
in the main assembly line of the garment business of herein
Employer and were hired and assigned as sewers, cutters,
trimmers, revisers, packers, quality controllers and
maintenance mechanics.
Upon its organization, Petitioner filed a petition for the
conduct of the certification election, before the Honorable
Mediator Arbiter, for the purpose of establishing the sole and
exclusive bargaining agent of the rank-and-file employees of
AAIN. The petition was granted and the certification election
was eventually held on July 12, 2014.
During the certification election, there were one
hundred seventy-six (176) segregated ballots. Out of this
number, one hundred seventy-two (172) were casted by
employees whose names are included in the list of members
of KILUSAN NG MANGGAGAWANG MAKABAYAN (KMMKATIPUNAN) AAIN PHIL. CO. LTD. CHAPTER (KMM-AAINC). The
remaining four votes were challenged by the Petitioner
because they were casted by employees of AAIN who are
holding either supervisory or managerial positions.
AAIN challenged the 176 votes because the Employer
maintains that the sewers and all factory workers of AAIN are
employed by Virtue Manpower Services which the former
alleges as having full control and responsibility in the hiring,
supervision and control over the factory workers of AAIN. The
Petitioner, however, disagrees. The 176 voters who casted
their votes are all regular employees of AAIN and not of
Virtue Manpower Services and therefore, their votes must be
allowed and counted.
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In an Order of the Honorable Mediator Eladio De Jesus

dated 15 September 2014, which was received by the
petitioner-union on 19 September 2014, the parties are
directed to file their respective supplemental position papers
within ten (10) days from receipt of the said Order. Hence,
this pleading.
Issue
WHETHER OR NOT VIRTUE MANPOWER IS A MERE
LABOR-ONLY CONTRACTOR
Discussions/Arguments
VIRTUE MANPOWER IS A MERE
LABOR-ONLY CONTRACTOR AND
THEREFORE, THE REAL EMPLOYER
OF
THE
172
RANK-AND-FILE
EMPLOYEES WHO VOTED DURING
THE CERTIFICATION ELECTION IS
AAIN
1.
Petitioner manifests that the issues, arguments
and/or discussion contained in Petitioners Position Paper in
this case dated 27 August 2014 are hereby re-pleaded and
made part hereof by reference.
2.
At the onset, it must be stressed that the 172
workers whose votes are subject of this petition are already
working in the employ of AAIN even long before Virtue
Manpower assumed its Service Contract Agreement with
AAIN. It cannot be gainsaid, therefore, that the assumption
of Virtue Manpower as an alleged independent contractor of
AAIN is a mere subterfuge to preclude AAINs workers from
attaining regular status in their jobs.

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3.
It is worth reiterating that Virtue Manpower is a
mere labor-only contractor and not an independent
contractor as asseverated by AAIN in its position paper. The
real employer of the 172 workers in AAIN who participated
and voted during 12 July 2014 certification election for the
determination of the sole and exclusive bargaining agent of
the rank-and-file employees of AAIN is indubitably AAIN.
4.
Labor-only contracting is expressly prohibited by
our labor laws. Article 106 of the Labor Code defines laboronly contracting as "supplying workers to an employer [who]
does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person
are performing activities which are directly related to the
principal business of such employer."
5.
In determining the existence of an independent
contractor relationship, several factors may be considered,
such as, but not necessarily confined to, whether or not the
contractor is carrying on an independent business; the
nature and extent of the work; the skill required; the term
and duration of the relationship; the right to assign the
performance of specified pieces of work; the control and
supervision of the work to another; the employers power
with respect to the hiring, firing and payment of the
contractors workers; the control of the premises; the duty to
supply premises, tools, appliances, materials and labor; and
the mode, manner and terms of payment. (New Golden
City Builders & Development Corp. v. Court of
Appeals, 463 Phil. 821, 829 [2003]).
6.
On the other hand, there is labor-only contracting
where: (a) the person supplying workers to an employer
does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises, among
others; and (b) the workers recruited and placed by such
person are performing activities which are directly related to
the principal business of the employer. (Neri v. National

Page 5 of 10

Labor Relations Commission, G.R. Nos. 97008-09, July

23, 1993, 224 SCRA 717, 721).
7.
Generally, the presumption is that the contractor
is a labor-only contracting unless such contractor overcomes
the burden of proving that it has the substantial capital,
investment, tools and the like. (7K Corporation v.
National Labor Relations Commission, G.R. No.
148490, November 22, 2006, 507 SCRA 509, 523).
8.
In this instant petition, though AAIN is not the
contractor, it has the burden of proving that Virtue
Manpower has sufficient capital or investment since it is
claiming the supposed status of Virtue Manpower as an
independent contractor. (Coca-Cola Bottlers Phils., Inc. v.
Agito, G.R. No. 179546, February 13, 2009, 579 SCRA
445, 465). AAIN, however, fell short of adducing evidence
purporting to show that Virtue Manpower had satisfactory
capitalization. Neither did it demonstrate that Virtue
Manpower invested in the form of tools, equipment,
machineries, work premises and other materials which are
necessary in the completion of the service contract.
9.
Another indicating factor that classifies Virtue
Manpower as a labor-only contractor was its failure to
exercise the right to control the performance of the work of
the aforementioned 172 workers. Virtue Manpower is merely
a coursed-through channel for the payment of the salaries of
these 172 workers. It exercises no power of control over
these 172 workers since the right to direct not only the end
to be achieved but also the means for reaching such end is
inherently and primarily possessed by AAIN.
10. The requirement of the law in determining the
existence of independent contractorship is that the
contractor should undertake the work on his own account,
under his own responsibility, according to his own manner
and method, free from the control and direction of the
employer except as to the results thereof. (Section 8 of
Department of Labor and Employment (DOLE)
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Department Order No. 10, Series of 1997) The Service

Contract Agreement between Virtue Manpower and AAIN
clearly indicates that Virtue Manpower has no discretion to
determine the means and manner by which the work is
performed. Rather, the work should be in strict compliance
with, and subject to, all requirements and standards of AAIN.
11. Under these circumstances, there is no doubt that
Virtue Manpower is engaged in labor-only contracting, and is
considered merely an agent of AAIN. As such, the workers it
allegedly supplies should be considered as employees
of AAIN. Consequently, the latter, as principal employer, is
responsible to the employees of the labor-only contractor as
if such employees have been directly employed by it. (San
Miguel Corporation v. MAERC Integrated Services,
Inc., 453 Phil. 543, 567 [2003])
12. Notably, the 172 workers, members of the
petitioner-union herein, were hired, engaged and made to
work in the production line of employer AAIN as sewers,
cutters, trimmers, revisers, packers, quality controllers and
maintenance mechanics. They perform activities which are
necessary or desirable to the principal trade or business of
AAIN. Thus, they are regular employees of AAIN and
therefore, entitled to participate and vote in the certification
election for the determination of the sole and exclusive
bargaining agent of the rank-and-file employees of AAIN.
PRAYER
WHEREFORE, premises considered, it is respectfully
prayed of this Honorable Office, that:
1.
The votes of the 172 individuals who are listed as
members of herein Petitioner be ALLOWED and COUNTED
because the named employees are regular rank-and-file
employees of AAIN; and

Page 7 of 10

2.
The votes of the four (4) supervisory employees of
AAIN be DISALLOWED on the reason that they do not
belong to the bargaining unit of the rank-and-file employees.
Other reliefs just and equitable under the premises are
likewise prayed for.
Quezon City for the City of San Fernando, Pampanga.
29 September 2014.
LAWIN
(Legal Advocates for Workers INterest)
Counsel for Petitioner
Room 206, Jiao Building
2 Timog Avenue, Quezon City
Email address: lawin2setufree@yahoo.com
Telefax (02) 373-18-44

ERNESTO R. ARELLANO
PTR No. 9032889; 01-03-14; Q.C.
IBP No. 950559; 01-03-14; CALMANA
ROLL No. 22660
MCLE No. IV-0017780; 22 April 2013

JASPER C. BALBOA
PTR No. 3122775; 05-08-14; MANILA
IBP No. 967904; 03-28-14; MANILA
ROLL No. 63288
MCLE (Not applicable; Admitted 07 May 2014)
VERIFICATION
I, ROBERTO SAMANIEGO, of legal age, Filipino, after
being duly sworn, depose and say:
That I am
MANGGAGAWANG

the President
MAKABAYAN

of KILUSAN NG
(KMM-KATIPUNAN)
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AAIN PHIL. CO. LTD. CHAPTER (KMM-AAINC) and the

duly authorized representative of the Petitioner in this case;
that I have caused the preparation and filing of the foregoing
Position Paper; that I have read the contents of the same;
and that I affirm them as true and correct to the best of my
own personal knowledge and based on authentic records;
IN WITNESS WHEREOF, I hereunto affixed my own
signature this 29th day of September 2014 here in Quezon
City.

ROBERTO SAMANIEGO
Affiant
SUBSCRIBED AND SWORN to before me this 29th day of
September 2014 here in Quezon City. Affiant exhibited to
me his Social Security System (S.S.S.) I.D. Number 333765577-2, for the purpose of establishing his personal
identity.

Doc. No._____;
Page No._____;
Book No._____;
Series of 2014.

Copy Furnished: by registered mail

MICHAEL ANGELO PARADO
Counsel for the Employer
Room 507 Metro View SVN Bldg.,
San Antonio St. corner Quirino Ave.,
Malate, Manila.
EXPLANATION
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This Position Paper was served to this Honorable Office

and the office of the Employers counsel at the address
above indicated by registered mail due to time constraint
and lack of personnel to effect the preferred personal
service.

ERNESTO R. ARELLANO

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