Employer's onus probandi re validity of dismissal


This treats of the Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court seeking the reversal of the Decision[2] dated June 11, 2013, and Resolution[3] dated November 26, 2013, rendered by the Court of Appeals (CA) in CA-G.R. SP No. 126822, which dismissed the Complaint[4] for illegal dismissal filed by Rolando Jamilano (Jamilano), Ronald Lascuna (Lascuna), and Willy C. Boneo (Boneo) (collectively referred to as the petitioners).

Private respondent Transnational Construction Corporation (TNCC) is a domestic corporation engaged in real estate leasing.

The petitioners were hired by TNCC to work in a construction project at the New Galeria Mall in Pasay City. Jamilano was hired on October 8, 2009 as a foreman, with a daily wage of Six Hundred Pesos (Php 600.00). Likewise, Boneo was hired as a welder/carpenter on October 11, 2008, while Lascuna was hired as a plumber on October 15, 2009. Both of them received a daily wage of Four Hundred Twenty Pesos (Php 420.00).

In addition to their assignment at the New Galeria Mall Baclaran, the petitioners likewise performed work in other construction projects in Buchanan, Greenhills and Ecology Village, Cortijos Building in Greenhills, Magallanes, Makati City, New Rosario Arcade in Ortigas Avenue Extension and a resort in Real, Quezon.[5]

Jamilano worked under the supervision of Architect Rommel Mostoles (Architect Mostoles), and Engineer Chris Madriaga (Engineer Madriaga), whereas Lascuna and Boneo worked under the supervision of Jamilano in TNCC's project in New Galeria Mall in Pasay.

On February 5, 2011, the petitioners were called to the office of Mark Anthony Tan (Tan) and Ric Abordo (Abordo), Manager and Supervisor, respectively, of Galeria Mall. They were informed that their employment will be effectively terminated on February 7, 2011.[6]

This prompted the petitioners to file a Complaint[7] for Illegal Dismissal with Claims for Non-Payment of Holiday Pay, Service Incentive Leave Pay, 13th Month Pay, Night Shift Differential and Damages before the Labor Arbiter (LA). In their Position Paper,[8] the petitioners claimed that their dismissal was effected without just or authorized cause.

In its defense, TNCC denied being the employer of the petitioners. Rather, TNCC averred that the petitioners were actually employees of Architect Mostoles. TNCC pointed out that it is not engaged in the construction business, but in real estate leasing. TNCC denied having any knowledge of work purportedly performed by the petitioners in Makati, Greenhills, and Pasig City.[9]

On August 8, 2011, the LA rendered a Decision[10] finding the petitioners to be employees of TNCC, who have been illegally dismissed by the latter. Likewise, the LA found that the petitioners were dismissed without any just or authorized cause and without complying with the procedural due process requirements under the Labor Code.[11] As such, the LA awarded backwages computed from the date of the dismissal until the date of its decision, and ordered the payment of separation pay in lieu of reinstatement. [12] However, the LA dismissed the claim for monetary awards upon finding that the petitioners failed to prove their entitlement thereto.

Aggrieved, TNCC filed an appeal[13] against the decision of the LA.

The petitioners likewise filed a Partial Appeal[14] arguing among others that the LA committed serious error in ordering the payment of separation pay in lieu of reinstatement, despite their prayer for reinstatement, and for failing to order the payment of their 13th month pay, holiday pay and service incentive leaves.

On appeal, the National Labor Relations Commission (NLRC) reversed the ruling of the LA.[15] The NLRC held that there was no evidence proving the existence of an employer-employee relationship between the petitioners and TNCC. Moreover, the NLRC found that the petitioners failed to prove that they rendered services for TNCC for a considerable length of time and that their work as plumber, carpenter, and foreman are an integral part of the business of TNCC, which was real estate leasing.

Dissatisfied with the ruling, the petitioners filed a Petition for Certiorari before the CA.

On June 11, 2013, the CA rendered the assailed Decision,[16] affirming the ruling of the NLRC. The CA held that the petitioners failed to prove the existence of an employer-employee relationship between them and TNCC. The CA noted that the petitioners were under the supervision and control of Architect Mostoles. In turn, Architect Mostoles is not an employee of TNCC and had in fact entered into a retainer agreement with the latter for a period of six months, which states that there shall be no employer-employee relationship between the parties.[17] The CA further observed that the NLRC did not commit grave abuse of discretion when it refused to make a finding as to whether or not Architect Mostoles is an independent contractor or a labor-only contractor. The CA further ratiocinated that any competent evidence proving Architect Mostoles' status as a labor-only contractor can only come from the latter. The CA opined that such an issue has been rendered irrelevant by the failure of the petitioners to prove that TNCC is their employer.[18]

Undeterred, the petitioners filed the instant Petition for Review on Certiorari[19] praying for the reversal of the assailed decision.

The instant legal conundrum rests on the resolution of the following issues, namely: (i) whether or not there exists an employer-employee relationship between the petitioners and TNCC; and (ii) whether or not the petitioners were illegally dismissed by TNCC.

On this score, the petitioners point out that they are employees of TNCC and were illegally dismissed by the latter. They claim that Architect Mostoles, who TNCC points to be their real employer, is a labor-only contractor.

On the other hand, TNCC maintains that the petitioners are not its employees. The petitioners' purported claims of employment rest on their company identification cards and payrolls, which are bereft of any indications to show that TNCC is in fact their employer. TNCC emphasizes that the petitioners worked under the supervision and control of Architect Mostoles. Anent the claim that Architect Mostoles is a labor-only contractor, TNCC avers that it entered into a Retainership Agreement wherein Architect Mostoles was contracted to provide his technical expertise. He was not primarily engaged to be a supplier of workers. The contract between the two parties indicated nothing to the effect that Architect Mostoles is under the obligation to provide TNCC with personnel.[20]

Ruling of the Court

The instant petition is bereft of merit.

It must be noted at the outset, that it is a well-settled rule that the jurisdiction of the Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court is limited only to reviewing errors of law, not of fact, unless the factual findings complained of are completely devoid of support from the evidence on record, or the assailed judgment is based on a gross misapprehension of facts.[21] The Court finds that none of the mentioned circumstances are present in this case to warrant a review of the factual findings of the case.

Be that as it may, the instant case should be dismissed due to the failure of the petitioners to prove that TNCC is indeed their employer. It must be noted that in an illegal dismissal case, the onus probandi rests on the employer to prove that the dismissal of an employee was for a valid cause.[22] However, before proceeding to determine the illegality of the dismissal, the employee must first prove the existence of an employer-employee relationship between him and the employer.[23]

Accordingly, in ascertaining the existence of an employer-employee relationship, jurisprudence has consistently adhered to the four-fold test, to wit: (i) the selection and engagement of the employee; (ii) the payment of wages; (iii) the power of dismissal; and (iv) the power of control over the employee's conduct.[24] The last test, which is deemed as the most important determining factor is premised on whether the person for whom the services are performed reserves the right to control both the end achieved and the manner and means used to achieve that end.[25]

As correctly held by the CA, the allegations and proof submitted by the petitioners militate against their claim that they are employees of TNCC.In the first place, the documents presented by the petitioners were not only insufficient to show that they were employees of TNCC, but even contradicted their proffered claim of employment. The identification card presented by Boneo was not issued by TNCC, but by a company named "CWPI".[26] CWPI is an entity separate and distinct from TNCC. The petitioners did not even show, much less allege, that a relationship existed between CWPI and TNCC. Neither was the identification card signed or issued by any of the authorized officers of TNCC.

Likewise, it is doubtful whether the Payroll and Daily Time Records of the petitioners were actually issued by TNCC. Although the petitioners claimed that the aforementioned documents were prepared by employees of TNCC, the petitioners however failed to prove this allegation.

Similarly, although the petitioners claim that they worked in other projects in Makati, Greenhills and Pasig, they failed to present any proof showing that these were construction projects of TNCC. Absent any showing that such constructions projects were indeed commissioned by TNCC, the Court cannot just automatically accept the petitioners' averment.

Moreover, the petitioners were informed about their dismissal by Tan and Abordo. There is no showing however that Tan and Abordo are employees of TNCC. On the contrary, Tan and Abordo are the Manager and Supervisor, respectively, of New Galena Mall, which is an entity separate and distinct form TNCC.

Most importantly, the petitioners were not able to establish that TNCC had control over the performance of their work. On the contrary, the records show that TNCC did not in any way exercise control over the work performed by the petitioners, to effectively consider it as their employer. Rather, as pointed out by TNCC and admitted by the petitioners, it was actually Architect Mostoles who supervised their work. Interestingly, the petitioners even latched on to this defense, and claimed that Architect Mostoles is a labor-only contractor, thereby making TNCC their actual employer. This argument fails to persuade as the records show that Architect Mostoles and TNCC entered into a Retainer Agreement, where the former undertook to provide technical expertise to the latter. By no stretch of the imagination may it be viewed that Architect Mostoles was hired to provide workers for TNCC.

Based on the foregoing, it becomes all too apparent that the CA committed no reversible error in rendering the assailed decision dismissing the petitioners' claim of illegal dismissal. The petitioners failed to establish the existence of an employer-employee relationship between it and TNCC. Absent this crucial connection, the Court has no recourse but to dismiss the charge of illegal dismissal.

In fine, it must be remembered that in protecting the rights of the laborers, the law does not authorize the oppression or self-destruction of the employer.[27] "The constitutional commitment to the policy of social justice cannot be understood to mean that every labor dispute shall automatically be decided in favor of labor."[28] After all, management also has its rights which are entitled to respect and enforcement in the interest of simple fair play.[29]

WHEREFORE, premises considered, the instant petition is DENIED. Accordingly, the Decision dated June 11, 2013, and Resolution dated November 26, 2013, in CA-G.R. SP No. 126822 are AFFIRMED in toto.

[1] Rollo, pp. 7-31.

[2] Penned by Associate Justice Mariflor P. Punzalan-Castillo, with Associate Justices Amy C. Lazaro-Javier and Zenaida T. Galapate-Laguilles concurring; id. at 32-39.

[3] Id. at 40-41.

[4] Id. at 68-69. '

[5] Id. at 9-13; 74.

[6] Id. at 11.

[7] Id. at 68-69.

[8] Id. at 70-72.

[9] Id. at 77-79.

[10] Id. at 102-121.

[11] Id. at 119.

[12] Id.

[13] Id. at 137-154.

[14] Id. at 122-136.

[15] Id. at 56-65.

[16] Id. at 32-39.

[17] Id. at 38.

[18] Id.

[19] Id. at 7-31.

[20] Id. at 190-192.

[21] Tenazas, el al. v. R. Villegas Taxi Transport, et al., 731 Phil. 217, 228 (2014), citing "J" Marketing Corp. v. Taran, 607 Phil. 414, 424 (2009).

[22] Reyes v. Glaucoma Research Foundation, Inc., et al., 760 Phil. 779, 789 (2015), citing Lopez v. Bodega City (Video-Disco Kitchen of the Phils.) and/or Torres-Yap, 558 Phil. 666, 673 (2007).

[23] Reyes v. Glaucoma Research Foundation, Inc., et al., id. at 789.

[24] South East International Rattan, Inc., el al. v. Coming, 729 Phil. 298, 306 (2014).

[25] Reyes v. Glaucoma Research Foundation, Inc., el al., supra note 22, at 240, citing Legend Hotel (Manila), el al. v. Realuyo, 691 Phil. 226, 240 (2012).

[26] Rollo, p. 86.

[27] Imasen Philippine Manufacturing Corporation v. Alcon and Papa, 746 Phil. 172, 179 (2014), citing Mercury Drug Corporation v. NLRC, 258 Phil. 384, 391 (1989).

[28] Imasen Philippine Manufacturing Corporation v. Alcon and Papa, id. at 375.

[29] Reyes v. Glaucoma Research Foundation, Inc. el. al, supra note 22, citing Javier v. Fly Ace Corp. et al, G.R. No. 192558, February 15, 2012.

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