Javier vs Flyace

FACTS: Javier an employee of Fly Ace performing various work for

the latter filed a complaint before the NLRC for underpayment of
salaries and other labor standard benefits.

He alleged that he reported for work from Monday to Saturday from

7:00 oclock in the morning to 5:00 o'clock in the afternoon; that
during his employment, he was not issued an identification card and
pay slips by the company; that he reported for work but he was no
longer allowed to enter the company premises by the security guard
upon the instruction of Ruben Ong (Mr. Ong), his superior; that after
several minutes of begging to the guard to allow him to enter, he saw
Ong whom he approached and asked why he was being barred from
entering the premises; that Ong replied by saying, Tanungin mo anak
mo;that he discovered that Ong had been courting his daughter
Annalyn after the two met at a fiesta celebration in Malabon City; that
Annalyn tried to talk to Ong and convince him to spare her father
from trouble but he refused to accede; that thereafter, Javier was
terminated from his employment without notice; and that he was
neither given the opportunity to refute the cause/s of his dismissal
from work.

Fly Ace denied the existence of employer-employee relationship

between them and Javier as the latter was only called roughly 5 to 6
times only in a month whenever the vehicle of its contracted hauler,
Milmar Hauling Services, was not available. Labor Arbiter dismissed
the complaint ruling that respondent Fly Ace is not engaged in
trucking business but in the importation and sales of groceries. Since
there is a regular hauler to deliver its products, we give credence to
Respondents claim that complainant was contracted on pakiao basis.

On appeal, NLRC reversed the decisin of the LA. It was of the view
that a pakyaw-basis arrangement did not preclude the existence of
employer-employee relationship. Payment by result is a method of
compensation and does not define the essence of the relation. It is a
mere method of computing compensation, not a basis for determining
the existence or absence of an employer-employee relationship. The
NLRC further averred that it did not follow that a worker was a job
contractor and not an employee, just because the work he was doing
was not directly related to the employers trade or business or the
work may be considered as extra helper as in this case; and that the
relationship of an employer and an employee was determined by law
and the same would prevail whatever the parties may call it. Finding
Javier to be a regular employee, the NLRC ruled that he was entitled
to a security of tenure. For failing to present proof of a valid cause for
his termination, Fly Ace was found to be liable for illegal dismissal of
Javier who was likewise entitled to backwages and separation pay in
lieu of reinstatement. However, on appeal, CA reversed the ruling of
NLRC.
The CA ruled that Javier's failure to present salary vouchers, payslips,
or other pieces of evidence to bolster his contention, pointed to the
inescapable conclusion that he was not an employee of Fly Ace.
Further, it found that Javiers work was not necessary and desirable to
the business or trade of the company, as it was only when there were
scheduled deliveries, which a regular hauling service could not
deliver, that Fly Ace would contract the services of Javier as an extra
helper. Lastly, the CA declared that the facts alleged by Javier did not
pass the control test.

He contracted work outside the company premises; he was not

required to observe definite hours of work; he was not required to
report daily; and he was free to accept other work elsewhere as there
was no exclusivity of his contracted service to the company, the same
being co-terminous with the trip only. Since no substantial evidence
was presented to establish an employer-employee relationship, the
case for illegal dismissal could not prosper. Hence, this appeal.

ISSUE: Does an employer-employee relationship exist between

Javier and Fly Ace, thereby holding the latter guilty of illegal
dismissal?

HELD: The LA and the CA found Javier's claim of employment with

Fly Ace as wanting and deficient. The Court is constrained to agree.
Labor officials are enjoined to use reasonable means to ascertain the
facts speedily and objectively with little regard to technicalities or
formalities but nowhere in the rules are they provided a license to
completely discount evidence, or the lack of it. The quantum of
proof required, however, must still be satisfied. Hence, when
confronted with conflicting versions on factual matters, it is for them
in the exercise of discretion to determine which party deserves
credence on the basis of evidence received, subject only to the
requirement that their decision must be supported by substantial
evidence.Accordingly, the petitioner needs to show by substantial
evidence that he was indeed an employee of the company against
which he claims illegal dismissal.

In sum, the rule of thumb remains: the onus probandi falls on

petitioner to establish or substantiate such claim by the requisite
quantum of evidence. Whoever claims entitlement to the benefits
provided by law should establish his or her right thereto. Sadly, Javier
failed to adduce substantial evidence as basis for the grant of relief.

By way of evidence on this point, all that Javier presented were his
self-serving statements purportedly showing his activities as an
employee of Fly Ace. Clearly, Javier failed to pass the substantiality
requirement to support his claim.

While Javier remains firm in his position that as an employed

stevedore of Fly Ace, he was made to work in the company premises
during weekdays arranging and cleaning grocery items for delivery to
clients, no other proof was submitted to fortify his claim. The lone
affidavit executed by one Bengie Valenzuela was unsuccessful in
strengthening Javiers cause.

The Court is of the considerable view that on Javier lies the burden to
pass the well-settled tests to determine the existence of an employer-
employee relationship.

South East International Rattan, Inc. and/or Estanislao Agbay v. Jesus J. Coming G.R. No. 186621
March 12, 2014
Villarama, J.

Doctrine:

To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-
fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee’s conduct, or the so-called "control test."

FACTS:

Petitioner SEIRI is engaged in manufacturing and exporting furniture abroad.

On November 3, 2003, Respondent Coming filed a complaint for illegal dismissal, underpayment of wages, non-
payment of holiday pay, 13th month pay and service incentive leave pay, with prayer for reinstatement, back wages,
damages and attorney’s fees.

Respondent alleged that he was hired by petitioners as Sizing Machine Operator on March 17, 1984. Despite being
an employee for many years, respondent was dismissed on January 1, 2002 without lawful cause. He was told that
he will be terminated because the company is not doing well financially and that he would be called back to work only
if they need his services again. Respondent waited for almost a year but petitioners did not call him back to work.

Petitioners denied having hired respondent asserting that SEIRI was incorporated only in 1986, and that respondent
actually worked for SEIRI’s furniture suppliers because when the company started in 1987 it was engaged purely in
buying and exporting furniture and its business operations were suspended from the last quarter of 1989 to August
1992. They stressed that respondent was not included in the list of employees submitted to the SSS.

Respondent also included an Affidavit executed by five former employees of herein petitioner which supports his
claim that he was an employee of the latter.

LA/RTC/NLRC RULING:

In his Decision dated April 30, 2004, Labor Arbiter Ernesto F. Carreon ruled that respondent is a regular employee of
SEIRI and that the termination of his employment was illegal.

On July 28, 2005, the NLRC’s Fourth Division rendered its Decision setting aside the decision of the Labor Arbiter.
The NLRC likewise denied respondent’s motion for reconsideration.

CA RULING:

By Decision dated February 21, 2008, the CA reversed the NLRC and ruled that there existed an employer-
employee relationship between petitioners and respondent who was dismissed without just and valid cause.

APPEAL TO THE SC: Petitioner's Contention: See Facts

Respondent's Contention: See Facts

ISSUE/S:

1. Whether there exists an ER-EE relationship between the petitioners and respondents. 2. Whether petitioners are
liable for illegal dismissal.

HELD:

1. Yes. To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the
four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee’s conduct, or the so-called "control test."

In Tan v. Lagrama, the Court held that the fact that a worker was not reported as an employee to the SSS is not
conclusive proof of the absence of employer-employee relationship. Otherwise, an employer would be rewarded for
his failure or even neglect to perform his obligation.

Petitioners’ admission that the five affiants were their former employees is binding upon them. While they claim that
respondent was the employee of their suppliers Mayol and Apondar, they did not submit proof that the latter were
indeed independent contractors; clearly, petitioners failed to discharge their burden of proving their own affirmative
allegation. There is thus no showing that the five former employees of SEIRI were motivated by malice, bad faith or
any ill-motive in executing their affidavit supporting the claims of respondent.

2. As a regular employee, respondent enjoys the right to security of tenure under Article 279 of the Labor Code and
may only be dismissed for a just or authorized cause, otherwise the dismissal becomes illegal.

Respondent, whose employment was terminated without valid cause by petitioners, is entitled to reinstatement
without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances and other
benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time
of his actual reinstatement. Where reinstatement is no longer viable as an option, back wages shall be computed
from the time of the illegal termination up to the finality of the decision. Separation pay equivalent to one month salary
for every year of service should likewise be awarded as an alternative in case reinstatement in not possible.

10. Bernard A. Tenazas, et al. v. R. Villegas Taxi Transport and Romualdo Villegas G.R. No. 192998
April 2, 2014
Reyes J.

Doctrine:

In Macasero v. Southern Industrial Gases Philippines, the Court reiterated, thus:

An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are
separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between
the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to
either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. The normal
consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment
of backwages computed from the time compensation was withheld up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of
service should be awarded as an alternative. The payment of separation pay is in addition to payment of backwages.

FACTS:

Tenazas and Francisco filed a complaint for illegal dismissal against R. Villegas Taxi Transport and/or Romualdo and
Andy. A similar case was filed by Endraca against the same respondents. The two (2) cases were subsequently
consolidated.

Tenazas alleged that on July 1, 2007, the taxi unit assigned to him was sideswiped by another vehicle, causing a
dent on the left fender near the driver seat. Upon reporting the incident to the company, he was scolded by
respondents Romualdo and Andy and was told to leave the garage for he is already fired. He was even threatened
with physical harm should he ever be seen in the company’s premises again. Despite the warning, Tenazas reported
for work on the following day but was told that he can no longer drive any of the company’s units as he is already
fired.

Francisco, on the other hand, averred that his dismissal was brought about by the company’s unfounded suspicion
that he was organizing a labor union. He was instantaneously terminated, without the benefit of procedural due
process, on June 4, 2007.

Endraca related that before he was dismissed, he brought his taxi unit to an auto shop for an urgent repair. He was
charged the amount of ₱700.00 for the repair services and the replacement parts. As a result, he was not able to
meet his boundary for the day. Upon returning to the company garage and informing the management of the incident,
his driver’s license was confiscated and was told to settle the deficiency in his boundary first before his license will be
returned to him. He was no longer allowed to drive a taxi unit despite his persistent pleas.

Respondents admitted that Tenazas and Endraca were employees of the company, the former being a regular driver
and the latter a spare driver. The respondents, however, denied that Francisco was an employee of the company.

LA/RTC/NLRC RULING:

The Labor Arbiter (LA) ruled that there was no illegal dismissal in the case at bar.

On June 23, 2009, the NLRC rendered a Decision holding that the evidence submitted by the petitioners sufficed to
establish the existence of employer-employee relationship and their illegal dismissal.

CA RULING:

The CA rendered a Decision, affirming with modification the Decision dated June 23, 2009 of the NLRC. The CA
agreed with the NLRC’s finding that Tenazas and Endraca were employees of the company, but ruled otherwise in
the case of Francisco for failing to establish his relationship with the company.

APPEAL TO THE SC:

Petitioner's Contention:

See Facts

Respondent's Contention:

See Facts

ISSUE/S:

1. Whether there is employer-employee relationship. 2. Whether there was an illegal dismissal.

HELD:

1. As Francisco was claiming to be an employee of the respondents, it is incumbent upon him to proffer evidence to
prove the existence of said relationship.

In this case, however, Francisco failed to present any proof substantial enough to establish his relationship with the
respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or any
personnel file that could somehow depict his status as an employee. Anent his claim that he was not issued with
employment records, he could have, at least, produced his social security records which state his contributions,
name and address of his employer, as his co-petitioner Tenazas did. He could have also presented testimonial
evidence showing the respondents’ exercise of control over the means and methods by which he undertakes his
work. This is imperative in light of the respondents’ denial of his employment and the claim of another taxi operator,
Emmanuel Villegas, that he was his employer. Specifically, in his Affidavit, Emmanuel alleged that Francisco was
employed as a spare driver in his taxi garage from January 2006 to December 2006, a fact that the latter failed to
deny or question in any of the pleadings attached to the records of this case. The utter lack of evidence is fatal to
Francisco’s case especially in cases like his present predicament when the law has been very enient in not requiring
any particular form of evidence or manner of proving the presence of employer-employee relationship.
2. Yes. The CA’s order of reinstatement of Tenazas and Endraca, instead of the payment of separation pay, is also
well in accordance with prevailing jurisprudence

This doctrine of strained relations, however, should not be used recklessly or applied loosely nor be based on
impression alone. "It bears to stress that reinstatement is the rule and, for the exception of strained relations to apply,
it should be proved that it is likely that if reinstated, an atmosphere of antipathy and antagonism would be generated
as to adversely affect the efficiency and productivity of the employee concerned."
Sagun vs ANZ

LVN Pictures, Inc v. Philippine Musicians Guild

August 8, 2019
Written by ENERIHET
G.R. No. L-12598

January 28, 1961

Facts:

Philippine Musicians Guild is a duly registered legitimate labor organization. LVN Pictures, Inc.,
Sampaguita Pictures, Inc., and Premiere Productions, Inc. are corporations, duly organized
under the Philippine laws, engaged in the making of motion pictures and in the processing and
distribution thereof; that said companies employ musicians for the purpose of making music
recordings for title music, background music, musical numbers, finale music and other
incidental music. Ninety-five (95%) percent of all the musicians playing for the musical
recordings of said companies are members of the Philippine Musicians Guild.

The Guild prayed that it be certified as the sole and exclusive bargaining agency for all
musicians working in the aforementioned companies. In their respective answers, the latter
denied that they have any musicians as employees, and alleged that the musical numbers in the
filing of the companies are furnished by independent contractors.

The lower court sustained the theory of the Guild. A reconsideration of the order complained of
having been denied by the Court en banc, LVN Pictures, inc., and Sampaguita Pictures, Inc., filed
these petitions for review for certiorari.

Issue:

Whether or not the musicians are employees of the companies?

Ruling:

Yes. It is well settled that “an employer-employee relationship exists . . .where the person for
whom the services are performed reserves a right to control not only the end to be achieved
but also the means to be used in reaching such end . . . .”

In other words, to determine whether a person who performs work for another is the latter’s
employee or an independent contractor, the National Labor Relations relies on ‘the right to
control’ test. Under this test an employer-employee relationship exist where the person for
whom the services are performed reserves the right to control not only the end to be achieved,
but also the manner and means to be used in reaching the end.

In this case, the work of the musical director and musicians is a functional and integral part of
the enterprise performed at the same studio substantially under the direction and control of
the company.

Furthermore, the film companies summon the musicians to work, through the musical
directors. The film companies, through the musical directors, fix the date, the time and the
place of work. The film companies, not the musical directors, provide the transportation to and
from the studio. The film companies furnish meal at dinner time.

The motion picture director — not the musical director — “solely directs and performance of
the musicians before the camera“. The motion picture director “supervises the performance of
all the actors, including the musicians who appear in the scenes, so that in the actual
performance to be shown in the screen, the musical director’s intervention has stopped.” Or, as
testified to in the lower court, “the movie director tells the musical director what to do; tells
the music to be cut or tells additional music in this part or he eliminates the entire music he
does not (want) or he may want more drums or move violin or piano, as the case may be”. The
movie director “directly controls the activities of the musicians.” He “says he wants more drums
and the drummer plays more” or “if he wants more violin or he does not like that.”

1. PAGUIO TRANSPORT CORPORATION, petitioner vs. NATIONAL LABOR RELATIONS

COMMISSION and WILFREDO MELCHOR, respondents.
1. The "boundary system" used in taxi (and jeepney) operations presupposes an
employer-employee relation;
2. The employer must prove just (or authorized) cause and due process to justify
dismissal of an employee;

NOTES & DIGESTS IN LABOR LAW I, AGRARIAN LAW AND SOCIAL LEGISLATION

3. Strained relations must be demonstrated as a fact; and 4. Back wages and

reinstatement are necessary

consequences of illegal dismissal.

♥ Complainant Wilfredo Melchor was hired by respondent company as a taxi driver

on under the 'boundary system.'

♥ On 24 November 1993, complainant allegedly met a vehicular accident along

Quirino Avenue near the PNR Station and Plaza Dilao when he accidentally bumped a
car which stopped at the intersection even when the traffic light was green and go.
After he submitted the traffic accident report to the office of respondents, he was
allegedly advised to stop working and have a rest. After several days, he allegedly
reported for work only to be told that his service was no longer needed. Hence, the
complaint for illegal dismissal, among others.

♥ Respondents: complainant was not illegally dismissed.  There being in the first
place no employer-

employee relationship between them.

 Element of control which was a paramount test to determine the existence of such a

relationship was lacking.

 Element of the payment of compensation

- payment of boundary is instead made allegedly makes the relationship between

them of a 'wase-agreement'

 Complainant's termination arose out of a valid cause and after he refused to

articulate his stand on the investigation being conducted on him.

 Three occasions when complainant figured in a vehicular accident involving the taxi
unit he was driving
  As a result of the alleged compounded damages which the respondents had to
shoulder on account of the supposed reckless driving of the complainant, the former
was allegedly left with no alternative but to ask complainant's explanation why he
should still be allowed to drive. Complainant, despite several chances, allegedly
failed to do so.

♥ NLRC: Private respondent was an illegally dismissed employee of petitioner.

o  “The relationship created between the parties operating under a 'boundary

system' is one of an employer and employee, and not of a lessor and a
lessee”
o  Not afforded the twin requirements of due process
o  The guilt and culpability of private respondent which would give petitioner
valid ground to effect his dismissal cannot be established by a mere allegation
of his reckless driving

 Liable for back wages in the amount of P86,400, and not P67,200 as computed by the
labor arbiter. It found, however, that this liability should be imposed on Petitioner
Corporation only, and not on its president who was also impleaded by private respondent.

First Issue: Employer-Employee Relation

♥ Petitioner argues that under said arrangement, he had

no control over the number of hours private respondent had to work and the routes he had
to take. Therefore, he concludes that the employer-employee relationship cannot be
deemed to exist.

  X: Not of lessor-lessee. In the lease of chattels, the lessor loses complete control
over the chattel leased.
  The fact that the drivers do not receive fixed wages but get only the excess of that
so- called boundary they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee.
  Thus, private respondents were employees...because they had been engaged to
perform activities which were usually necessary or desirable in the usual trade or
business of the employer.

Second Issue: Just Cause

♥ Private respondent's involvement in three vehicular

accidents within a span of several months constitutes

just cause for his dismissal.

♥ It was private respondent who was at fault

  Petitioner, however, did not submit any proof to support these allegations. Well-
settled is the rule that the employer has the burden of proving that the dismissal of
an employee is for a just cause. The failure of the employer to discharge this burden
means that the dismissal is not justified and that the employee is entitled to
reinstatement and back wages.
  In this case, petitioner failed to prove any just or authorized cause for his dismissal.
Private respondent, therefore, must be deemed illegally dismissed.
   Said pieces of documentary evidence were not mentioned or included therein, but
were submitted by petitioner only when he led his present petition with this Court.
Such factual issues cannot be resolved in a petition for certiorari like the present
case, because the Court's review of NLRC decisions is limited to questions of
jurisdiction and grave abuse of discretion.
  Not a trier of facts; factual issues are not a proper subject for certiorari.
  Mere involvement in an accident, absent any showing of fault or recklessness on
the part of an employee, is not a valid ground for

dismissal. Third Issue: No Due Process

♥ Twin requirements of notice and hearing

♥ The employer must furnish the worker two written

notices:
1. One to apprise him of the particular acts or

omissions for which his dismissal is sought and 2. The other to inform him of his employer's

decision to dismiss him.

- As to the requirement of a hearing, the

essence of due process lies simply in an opportunity to be heard, and not always and
indispensably in an actual hearing.

♥ Burden of proof rests on the employer.

♥ Private respondent was not given notice that he was

being dismissed.
♥ When ordered to explain the vehicular accident, he

was not informed that petitioner was contemplating his dismissal and that his involvement
in said vehicular accident was the cause thereof. Private respondent was merely asked to
explain the vehicular accident per se , not his defense against a charge of dismissal arising
from the vehicular accident. He became aware of his employer's intention to dismiss him
only when he was actually told not to report for work anymore.

Fourth Issue: Strained Relations

♥ Strained relations must be demonstrated as a fact.

Petitioner failed to do so. Its allegation that private respondent was incompetent and
reckless in his manner of driving, which led to his involvement in three vehicular accidents,
is not supported by the records. As earlier noted, no evidence was properly submitted by
petitioner to prove or give credence to his assertions.

♥ Because the claim of petitioner has no factual basis, the doctrine on strained relations
cannot be applied in this case. Moreover, the ling of the Complaint for illegal dismissal does
not by itself justify the invocation of this doctrine.

♥ The doctrine on 'strained relations' cannot be applied indiscriminately since every labor
dispute almost invariably results in 'strained relations'; otherwise, reinstatement can never
be possible simply because some hostility is engendered between the parties as a result of
their disagreement. That is human nature."

Fifth Issue: Reinstatement and Back Wages

♥ Because he was illegally dismissed, private respondent

is entitled to reinstatement and back wages pursuant to

Section 279 of the Labor Code.

♥ Illegally dismissed employees are entitled to full back wages without conditions or
limitations.
♥ Back wages ought to be computed from the time of the illegal dismissal to the time of
reinstatement, either actual or in the payroll, without any deduction or qualification.

LBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA TENG- CHUA,
Petitioners, vs. ALFREDO S. PAHAGAC, EDDIE D. NIPA, ORLANDO P. LAYESE, HERNAN Y. BADILLES and
ROGER S. PAHAGAC, Respondents.

GR No.: 169704 Date: November 17, 2010

Ponente: BRION, J.:

Doctrine: Article 262-A of the Labor Code does not prohibit the filing of a motion for reconsideration. In Coca- Cola
Bottlers Phil., Inc., Sales Force Union-PTGWO-Balais v. Coca-Cola Bottlers Philippines, Inc., we likewise ruled that
the VA’s decision may still be reconsidered on the basis of a motion for reconsideration seasonably filed within 10
days from receipt thereof. The seasonable filing of a motion for reconsideration is a mandatory

requirement to forestall the finality of such decision

FACTS:

Albert Teng Fish Trading is engaged in deep sea fishing and, for this purpose, owns boats (basnig), equipment, and
other fishing paraphernalia. As owner of the business, Teng claims that he customarily enters into joint venture
agreements with master fishermen (maestros) who are skilled and are experts in deep sea fishing; they take charge
of the management of each fishing venture, including the hiring of the members of its complement. He avers that the
maestros hired the respondent workers as checkers to determine the volume of the fish caught

in every fishing voyage.4

On February 20, 2003, the respondent workers filed a complaint for illegal dismissal against Albert Teng Fish

Trading, Teng, and Chua before the NCMB, Region Branch No. IX, Zamboanga City.

They asserted that sometime in September 2002, Teng expressed his doubts on the correct volume of fish caught

in every fishing voyage. In December 2002, Teng informed them that their services had been terminated.
In his defense, Teng maintained that he did not have any hand in hiring the respondent workers; the maestros, rather
than he, invited them to join the venture. According to him, his role was clearly limited to the provision of the

necessary capital, tools and equipment, consisting of basnig, gears, fuel, food, and other supplies.

The VA rendered a decision in Teng’s favor and declared that no employer-employee relationship existed

between Teng and the respondent workers.

On July 21, 2003, the respondent-workers elevated the case to the CA. In its decision of September 21, 2004, the CA
reversed the VA’s decision after finding sufficient evidence showing the existence of employer-employee

relationship.

Teng contends that the VA’s decision is not subject to a motion for reconsideration in the absence of any specific
provision allowing this recourse under Article 262-A of the Labor Code. He cites the 1989 Procedural Guidelines,
which, as the VA declared, does not provide the remedy of a motion for reconsideration. He claims that after the
lapse of 10 days from its receipt, the VA’s decision becomes final and executory unless an appeal is taken. He
argues that when the respondent workers received the VA’s decision on June 12, 2003, they had 10 days, or until
June 22, 2003, to file an appeal. As the respondent workers opted instead to move for reconsideration, the 10-day
period to appeal continued to run; thus, the VA’s decision had already become final and executory by the time

they assailed it before the CA on July 21, 2003.

Teng further insists that the VA was correct in ruling that there was no employer-employee relationship between him
and the respondent workers. What he entered into was a joint venture agreement with the maestros, where

Teng’s role was only to provide basnig, gears, nets, and other tools and equipment for every fishing voyage.

ISSUE/S:

1. WON Article 262-A precludes the filing of a motion for reconsideration of the VA’s decision within the 10-day

period.

2. WON there exists an employer-employee relationship between Teng and the respondent workers.

Held:

2. There exists an employer-employee relationship between Teng and the respondent workers.

We agree with the CA’s finding that sufficient evidence exists indicating the existence of an employer-employee

relationship between Teng and the respondent workers.

While Teng alleged that it was the maestros who hired the respondent workers, it was his company that issued to the
respondent workers identification cards (IDs) bearing their names as employees and Teng’s signature as the
employer. Generally, in a business establishment, IDs are issued to identify the holder as a bona fide employee of

the issuing entity.

For the 13 years that the respondent workers worked for Teng, they received wages on a regular basis, in addition to
their shares in the fish caught. The worksheet showed that the respondent workers received uniform amounts within
a given year, which amounts annually increased until the termination of their employment in 2002. Teng’s claim that
the amounts received by the respondent workers are mere commissions is incredulous, as it would

mean that the fish caught throughout the year is uniform and increases in number each year.

More importantly, the element of control – which we have ruled in a number of cases to be a strong indicator of the
existence of an employer-employee relationship – is present in this case. Teng not only owned the tools and
equipment, he directed how the respondent workers were to perform their job as checkers; they, in fact, acted as

Teng’s eyes and ears in every fishing expedition.

Teng cannot hide behind his argument that the respondent workers were hired by the maestros. To consider the
respondent workers as employees of the maestros would mean that Teng committed impermissible labor-only

contracting. As a policy, the Labor Code prohibits labor-only contracting

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.

In the present case, the maestros did not have any substantial capital or investment.1avvphi1 Teng admitted that he
solely provided the capital and equipment, while the maestros supplied the workers. The power of control over the
respondent workers was lodged not with the maestros but with Teng. As checkers, the respondent workers’ main
tasks were to count and classify the fish caught and report them to Teng. They performed tasks that were necessary
and desirable in Teng’s fishing business. Taken together, these incidents confirm the existence of a labor-only
contracting which is prohibited in our jurisdiction, as it is considered to be the employer’s attempt to

evade obligations afforded by law to employees.

Accordingly, we hold that employer-employee ties exist between Teng and the respondent workers. A finding that the
maestros are labor-only contractors is equivalent to a finding that an employer-employee relationship exists between
Teng and the respondent workers. As regular employees, the respondent workers are entitled to all the

benefits and rights appurtenant to regular employment.

The respondent worker’s allegation that Teng summarily dismissed them on suspicion that they were not reporting to
him the correct volume of the fish caught in each fishing voyage was never denied by Teng. Unsubstantiated
suspicion is not a just cause to terminate one’s employment under Article 28250 of the Labor Code. To allow an
employer to dismiss an employee based on mere allegations and generalities would place the employee at the mercy
of his employer, and would emasculate the right to security of tenure.51 For his failure to comply with the Labor
Code’s substantive requirement on termination of employment, we declare that Teng illegally dismissed the

respondent workers.

DY KEH BENG vs. INTERNATIONAL LABOR and MARINE UNION OF THE

PHILIPPINES, ET AL. G.R. No. L-32245 May 25, 1979 Employer-employee
Relationship, Unfair labor practice, Control test
OCTOBER 25, 2017

FACTS:

A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory,
for discriminatory acts within the meaning of Section 4(a), sub-paragraph (1) and (4). Republic
Act No. 875, by dismissing Carlos N. Solano and Ricardo Tudla for their union activities. After
preliminary investigation was conducted, a case was filed in the Court of Industrial Relations for
in behalf of the International Labor and Marine Union of the Philippines and two of its members,
Solano and Tudla.

An employee-employer relationship was found to have existed between Dy Keh Beng and
complainants Tudla and Solano, although Solano was admitted to have worked on piece basis.
According to Dy Keh Beng, however, Solano was not his employee for the following reasons:

(1) Solano never stayed long enought at Dy’s establishment;

(2) Solano had to leave as soon as he was through with the

(3) order given him by Dy;

(4) When there were no orders needing his services there was nothing for him to do;

(5) When orders came to the shop that his regular workers could not fill it was then that Dy went
to his address in Caloocan and fetched him for these orders; and

(6) Solano’s work with Dy’s establishment was not continuous.

According to petitioner, these facts show that respondents Solano and Tudla are only piece
workers, not employees under Republic Act 875, where an employee is referred to as

“shall include any employee and shag not be limited to the employee of a particular employer
unless the Act explicitly states otherwise and shall include any individual whose work has ceased
as a consequence of, or in connection with any current labor dispute or because of any unfair
labor practice and who has not obtained any other substantially equivalent and regular
employment.”

While an employer

“includes any person acting in the interest of an employer, directly or indirectly but shall not
include any labor organization (otherwise than when acting as an employer) or anyone acting in
the capacity of officer or agent of such labor organization.”

ISSUE:

Whether there existed an employee employer relation between petitioner Dy Keh Beng and the
respondents Solano and Tudla .

RULING:

Petitioner really anchors his contention of the non-existence of employee-employer relationship

on the control test.

While this Court upholds the control test under which an employer-employee relationship exists
“where the person for whom the services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching such end, ” it finds no merit with
petitioner’s arguments as stated above. It should be borne in mind that the control test calls
merely for the existence of the right to control the manner of doing the work, not the actual
exercise of the right.

Considering the finding by the Hearing Examiner that the establishment of Dy Keh Beng is
“engaged in the manufacture of baskets known as kaing, it is natural to expect that those working
under Dy would have to observe, among others, Dy’s requirements of size and quality of the
kaing. Some control would necessarily be exercised by Dy as the making of the kaing would be
subject to Dy’s specifications. Parenthetically, since the work on the baskets is done at Dy’s
establishments, it can be inferred that the proprietor Dy could easily exercise control on the men
he employed.

As to the contention that Solano was not an employee because he worked on piece basis, this
Court agrees with the Hearing Examiner that circumstances must be construed to determine
indeed if payment by the piece is just a method of compensation and does not define the essence
of the relation. Units of time … and units of work are in establishments like respondent (sic) just
yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon.
We cannot construe payment by the piece where work is done in such an establishment so as to
put the worker completely at liberty to turn him out and take in another at pleasure.