Asia Security & Investigation Agency (ASIA) executed a one-year contract with the Baron Hotel (BARON) for the former to provide the latter with 20 security guards to safeguard the persons and belongings of hotel guests, among others. The security guards filled up Baron application form and submitted the executed forms directly to the Security Department of Baron. The pay slips of the security guards bore Baron's logo and showed that Baron deducted therefrom the amounts for SSS premiums, medicare contributions and withholding taxes. Assignments of security guards, who should be on duty or on call, promotions, suspensions, dismissals and award citations for meritorious services were all done upon approval by Baron's chief Security officer. After the expiration of the contract with Asia, Baron did not renew the same and instead executed another contract for security services with another agency. Asia placed the affected security guards on "floating status" on "no work no pay" basis. Having been displaced from work, the Asia security guards filed a case against the Baron Hotel for illegal dismissal, overtime pay, minimum wage differentials, vacation leave and sick leave benefits, and 13th month pay. Baron Hotel denied liability alleging that Asia is the employer of the security guards and therefore, their complaint for illegal dismissal and payment of money claims should be directed against Asia. Nevertheless, Baron filed a Third-Party Complaint against Asia.

(a) Is there an employer-employee relationship between the Baron Hotel, on one hand, and the Asia security guards, on the other hand? Explain briefly.
(b) Assuming that ASIA is the employer, is the act of ASIA in placing the security guards on "floating status" lawful? Why? (1999 BAR)