Arbitrary mass dismissals, unpaid wages & fake employers: Abuse of contract labour in the Philippines

Ricky Liporada worked at the Coca-Cola Bottlers Philippines Inc. (CCBPI) sales office and warehouse operations in Bagumbayan for 17 years, first as a delivery truck driver (of company-owned trucks) then as a checker. During his 17 years working at CCBPI he was told that he was working under a subcontractor called IWPI, then later he was told he was hired through Concepcion Lines, then IWPI again, and finally Concepcion Lines and Freight Services. But he did the same job and received all instructions from and reported directly to CCBPI management and supervisors. Then one day, at the end of his shift on 31 January 2009, he was told by CCBPI management that he would no longer be allowed to work anymore. Don’t come back tomorrow.

Danilo Dichoso was arbitrarily dismissed on the same day, just as he finished cleaning the warehouse at CCBPI Bagumbayan. He started working at CCBPI in 1993 and over the next 16 years he worked as a pallet loader, mixer, checker, forklift operator, and finally as a janitor. Like Ricky Liporada he was registered as having been recruited under IWPI and Concepcion Lines, but he reported directly to CCBPI management and supervisory staff. For 17 years the only boss was CCBPI management and his workplace was No. 2 Obrero Street - the premises owned and operated by CCBPI. But when Dichoso ended his shift at 3PM on 31 January he was simply told that he was no longer allowed to enter the premises of CCBPI Bagumbayn.

Ervin Sarles was hired by CCBPI through Concepcion Lines in February 2003 and in July of that year was assigned as a security checker, which meant he signed the Load Order Gate Pass (LOGP) for the delivery trucks and also checked the IPSM (inter plant shipping memo). He did this for 6 years. At 9AM on 31 January 2009, while Sarles was counting outgoing and incoming products, he was suddenly ordered to surrender all of the inventory documents. When he asked for an explanation he was told that according to the Sales Logistics Head of CCBPI Bagumbayan his job was being taken over by workers hired through another contractor.

Rafael Diola was hired as a janitor at CCBPI Bagumbayan in August 1993, then from 1994 to 1997 worked as a pallet loader. From 1998 he was employed at CCBPI as a forklift operator - until his sudden dismissal on 31 January 2009.

And the list goes on.

Dozens of workers at CCBPI Bagumbayan were arbitrarily dismissed on 31 January and 30 June 2009. When these workers sought legal support from the Labor Education and Research Network (LEARN) to challenge their unfair dismissal, CCBPI denied any responsibility as the employer, claiming that they were all contract agency workers employed by Concepcion Line Freight Service - a company none of them had actually seen, aside from a small office inside the CCBPI Bagumbayan premises.

Despite its claim to adhere to TCCC’s Code of Business Conduct for Suppliers, CCBPI could not explain why the contractor operated under three different names and the owner, Edwardo C. Concepcion, used six different variations of his name in business documents. Even more difficult to explain was why Coca-Cola continued doing business with a company which was not even registered with the Department of Labor and Employment (DOLE) as a contractor and was under criminal investigation for failing to comply with the mandatory Social Security System (SSS). This investigation revealed that Concepcion Line Freight Service had “insufficient capital” and could not even pay wages let alone workers’ social security entitlements.

In fact the dismissed workers’ petition to the National Labor Relations Commission (NLRC) clearly demonstrates that: the inability to meet payroll and to pay the SSS are clear indications that Concepcion Lines does not have sufficient capital to be treated as a legitimate subcontractor.

This suggests that Concepcion Lines is a labour-only contractor supplying CCBPI, and therefore, according to the Labor Code of the Philippines, CCBPI must take responsibility for these workers as their employer.*

When the unfairly dismissed workers filed a lawsuit against CCBPI in the NLRC, the company immediately denied any responsibility and impleaded Concepcion Lines and Freight Services, claiming that the case should be made against the contractor, not Coca-Cola. In its submission CCBPI informed the NLRC that Concepcion Lines and Freight Services is located at No.6 Ilang-Ilang St., Mary Subdivision, Mayamot, Antipolo City. When a warrant of arrest was issued the illegally dismissed workers accompanied the bailiff to the address supplied by CCBPI on 17 August 2009. And this is what they found.....

In fact the only address the dismissed workers knew was the place they’d worked for years - Coca-Cola’s own Bagumbayan sales office and warehouse. And this is where the court officer delivered the warrant.

The Real Thing ....the real address at No. 2 Obrero Street, Bagumbayan, Quezon City happens to be CCBPI’s Bagumbayan operations

In fact documents filed with DOLE by Concepcion Lines and Freight Services give its address as Bagumbayan, No. 2 Obrero Street, the same address as the CCBPI’s Bagumbayan Sales Office.

Despite this CCBPI continues to deny any responsibility for the dismissed workers and refuses to pay any wages, benefits or other compensation still owed to them. As the lawsuit filed by the dismissed workers with the support of LEARN concludes: “The above allegations show that the so-called Concepcion Lines (or whatever the name of the business or the owner is) is being used by CCBPI solely to deny the existence of an employer-employee relationship.”

* NOTE: Under the Philippines Labor Code Article 106:

"There is labor only contracting where 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 the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him."