Case Digest: SIP and the Spouses Pablo v. Batolina, etc.
G.R. No. 192473 : October 11, 2010
S.I.P. FOOD HOUSE and MR. and MRS. ALEJANDRO PABLO, Petitioners, v. RESTITUTO BATOLINA, ALMER CALUMPISAN, ARIES MALGAPO, ARMANDO MALGAPO, FLORDELIZA MATIAS, PERCIVAL MATIAS, ARWIN MIRANDA, LOPE MATIAS, RAMIL MATIAS, ALLAN STA. INES, Respondents.
BRION, J.:
FACTS:
The GSIS Multi-Purpose Cooperative (GMPC) is an entity organized by the employees of the Government Service Insurance System (GSIS). Incidental to its purpose, GMPC wanted to operate a canteen in the new GSIS Building, but had no capability and expertise in this area. Thus, it engaged the services of the petitioner S.I.P. Food House (SIP), owned by the spouses Alejandro and Esther Pablo, as concessionaire. The respondents Restituto Batolina and nine (9) others (the respondents) worked as waiters and waitresses in the canteen.
In February 2004, GMPC terminated SIPs "contract as GMPC concessionaire," because of GMPCs decision "to take direct investment in and management of the GMPC canteen;" SIPs continued refusal to heed GMPCs directives for service improvement; and the alleged interference of the Pablos two sons with the operation of the canteen. The termination of the concession contract caused the termination of the respondents employment, prompting them to file a complaint for illegal dismissal, with money claims, against SIP and the spouses Pablo.
The respondents alleged before the labor arbiter that they were SIP employees who were illegally dismissed. To avoid liability, SIP argued that it operated the canteen in behalf of GMPC since it had no authority by itself to do so. The respondents were not its employees, but GMPCs, as shown by their identification cards.
The LA ruled that respondents were GMPCs employees and not SIPs. The labor arbiter, however, opined that even if respondents were considered as SIPs employees, their dismissal would still not be illegal because the termination of its contract to operate the canteen came as a surprise and was against its will, rendering the canteens closure involuntary.
Respondents appealed to the NLRC. In its decision, the NLRC found that SIP was the respondent's employer, but it sustained the labor arbiter's ruling that the employees were not illegally dismissed as the termination of SIPs concession to operate the canteen constituted an authorized cause for the severance of employer-employee relations. . As the labor arbiter did, the NLRC regarded the closure of SIPs canteen operations involuntary, thus, negating the employee's entitlement to separation pay.
On appeal, the CA, finding substantial evidence in the records supporting the NLRC conclusions, brushed aside SIPs argument that it could not have been the employer of the respondents because it was a mere labor-only contractor of GMPC. It sustained the NLRC's findings that SIP was the respondent's employer. SIP moved for reconsideration but the same was denied. Hence, this petition.
S.I.P. FOOD HOUSE and MR. and MRS. ALEJANDRO PABLO, Petitioners, v. RESTITUTO BATOLINA, ALMER CALUMPISAN, ARIES MALGAPO, ARMANDO MALGAPO, FLORDELIZA MATIAS, PERCIVAL MATIAS, ARWIN MIRANDA, LOPE MATIAS, RAMIL MATIAS, ALLAN STA. INES, Respondents.
BRION, J.:
FACTS:
The GSIS Multi-Purpose Cooperative (GMPC) is an entity organized by the employees of the Government Service Insurance System (GSIS). Incidental to its purpose, GMPC wanted to operate a canteen in the new GSIS Building, but had no capability and expertise in this area. Thus, it engaged the services of the petitioner S.I.P. Food House (SIP), owned by the spouses Alejandro and Esther Pablo, as concessionaire. The respondents Restituto Batolina and nine (9) others (the respondents) worked as waiters and waitresses in the canteen.
In February 2004, GMPC terminated SIPs "contract as GMPC concessionaire," because of GMPCs decision "to take direct investment in and management of the GMPC canteen;" SIPs continued refusal to heed GMPCs directives for service improvement; and the alleged interference of the Pablos two sons with the operation of the canteen. The termination of the concession contract caused the termination of the respondents employment, prompting them to file a complaint for illegal dismissal, with money claims, against SIP and the spouses Pablo.
The respondents alleged before the labor arbiter that they were SIP employees who were illegally dismissed. To avoid liability, SIP argued that it operated the canteen in behalf of GMPC since it had no authority by itself to do so. The respondents were not its employees, but GMPCs, as shown by their identification cards.
The LA ruled that respondents were GMPCs employees and not SIPs. The labor arbiter, however, opined that even if respondents were considered as SIPs employees, their dismissal would still not be illegal because the termination of its contract to operate the canteen came as a surprise and was against its will, rendering the canteens closure involuntary.
Respondents appealed to the NLRC. In its decision, the NLRC found that SIP was the respondent's employer, but it sustained the labor arbiter's ruling that the employees were not illegally dismissed as the termination of SIPs concession to operate the canteen constituted an authorized cause for the severance of employer-employee relations. . As the labor arbiter did, the NLRC regarded the closure of SIPs canteen operations involuntary, thus, negating the employee's entitlement to separation pay.
On appeal, the CA, finding substantial evidence in the records supporting the NLRC conclusions, brushed aside SIPs argument that it could not have been the employer of the respondents because it was a mere labor-only contractor of GMPC. It sustained the NLRC's findings that SIP was the respondent's employer. SIP moved for reconsideration but the same was denied. Hence, this petition.
ISSUE:
Whether or not SIP was the employer of respondents
HELD:
LABOR LAW
The SC agreed with the CA when it ruled out SIPs claim that it was a labor-only contractor or a mere agent of GMPC. SIP and its proprietors could not be considered as mere agents of GMPC because they exercised the essential elements of an employment relationship with the respondents such as hiring, payment of wages and the power of control, not to mention that SIP operated the canteen on its own account as it paid a fee for the use of the building and for the privilege of running the canteen. The fact that the respondents applied with GMPC in February 2004 when it terminated its contract with SIP, is another clear indication that the two entities were separate and distinct from each other.
That complainants were employees of respondents is further bolstered by the fact that respondents do not deny that they were the ones who paid complainant's salary. When complainants charged them of underpayment, respondents even interposed the defense of file board and lodging given to complainants.
Clearly, no less than respondents, thru their counsel, admitted that complainants herein were their employees.
PETITION DISMISSED
LABOR LAW
The SC agreed with the CA when it ruled out SIPs claim that it was a labor-only contractor or a mere agent of GMPC. SIP and its proprietors could not be considered as mere agents of GMPC because they exercised the essential elements of an employment relationship with the respondents such as hiring, payment of wages and the power of control, not to mention that SIP operated the canteen on its own account as it paid a fee for the use of the building and for the privilege of running the canteen. The fact that the respondents applied with GMPC in February 2004 when it terminated its contract with SIP, is another clear indication that the two entities were separate and distinct from each other.
That complainants were employees of respondents is further bolstered by the fact that respondents do not deny that they were the ones who paid complainant's salary. When complainants charged them of underpayment, respondents even interposed the defense of file board and lodging given to complainants.
Clearly, no less than respondents, thru their counsel, admitted that complainants herein were their employees.
PETITION DISMISSED
