Fernandez v. Kalookan Slaughterhouse
REITERATIONFacts
The Antecedents: Petitioner Arnulfo M. Fernandez claimed to have been employed as a butcher by Kalookan Slaughterhouse, Inc. (Kalookan Slaughterhouse) since 1994, working under a daily wage. He alleged that after questioning deductions from his wages in July 2014, he was subjected to unreasonable treatment and subsequently informed on July 21, 2014, that he could no longer report for work due to his old age. Kalookan Slaughterhouse, however, contended that petitioner was an independent butcher engaged on a per-hogs-butchered basis and was only required to be present when customers brought hogs. They asserted that petitioner violated company policies, leading to his temporary exclusion from the premises, which he misinterpreted as dismissal. Procedural History: Petitioner filed a complaint for illegal dismissal against Kalookan Slaughterhouse and its owner, Ernesto Cunanan, before the Labor Arbiter (LA). The LA ruled in favor of the petitioner, finding him to have been illegally dismissed and ordering the respondents to pay backwages, separation pay, service incentive leave pay, 13th month pay, night shift differential, and attorney's fees. Aggrieved, Kalookan Slaughterhouse appealed to the National Labor Relations Commission (NLRC), which reversed the LA's decision, dismissing the case for lack of an employer-employee relationship. The petitioner then filed a petition for certiorari with the Court of Appeals (CA), which denied the petition. This led to the present Petition for Review on Certiorari before the Supreme Court. The Petition: Petitioner seeks review of the CA's decision affirming the NLRC's ruling, arguing that both lower tribunals erred in failing to recognize the existence of an employer-employee relationship and in consequently failing to find that he was illegally dismissed. The petition contends that the evidence presented, including identification cards, gate passes, and log sheets, sufficiently establishes an employer-employee relationship, and that his termination due to old age was without just cause. The core of the petition is that the CA and NLRC misappreciated the facts and the law, leading to an erroneous conclusion that he was an independent contractor and not an employee.
Issue(s)
WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN EMPLOYEREMPLOYEE RELATIONSHIP BETWEEN THE PETITIONER AND THE RESPONDENTS. WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN ILLEGAL DISMISSAL IN THE INSTANT CASE.
Ruling
The Petition is granted. The Decision dated March 29, 2016 and Resolution dated May 30, 2016 of the Court of Appeals in CA-G.R. SP No. 141852 are REVERSED and SET ASIDE. The January 27, 2015 Decision of the Labor Arbiter in NLRC NCR Case No. 08-09779-14 is REINSTATED. The Labor Arbiter is DIRECTED to recompute the backwages and separation pay following the guidelines set forth in the decision. Kalookan Slaughterhouse Incorporated is also liable for legal interest of six percent (6%) per annum on the award of backwages and separation pay computed from the finality of this Decision until full satisfaction.
Ratio Decidendi
On Issue 1: WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN EMPLOYEREMPLOYEE RELATIONSHIP BETWEEN THE PETITIONER AND THE RESPONDENTS. The Court finds that the NLRC and the CA committed a grave error in ruling that no employer-employee relationship existed. The four-fold test, comprising the selection and engagement of the employee, payment of wages, power of dismissal, and power to control the employee's conduct, is the standard for determining employment. Petitioner presented evidence such as an ID, gate passes, log sheets, and a trip ticket, which collectively indicated his engagement by Kalookan Slaughterhouse. The company's admission through De Guzman that uniforms were provided to all personnel, including petitioner, further supports this. The CA erred in disregarding some gate passes based on a notation that did not apply to all of them. Kalookan Slaughterhouse's attempt to attribute petitioner's engagement to Tablit, its supervisor, was unconvincing as Tablit lacked the substantial capital to be an independent employer and failed to demonstrate control over petitioner's work methods. Instead, it was De Guzman, an employee of Kalookan Slaughterhouse, who exercised control over petitioner's conduct by reprimanding him for policy violations, thereby establishing Kalookan Slaughterhouse's control over petitioner's means and methods of work. On Issue 2: WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN ILLEGAL DISMISSAL IN THE INSTANT CASE. The Court agrees with the LA that petitioner was illegally dismissed. Petitioner alleged that on July 22, 2014, he was informed he could no longer report for work due to his old age. Kalookan Slaughterhouse countered that petitioner was merely barred from entry for failing to comply with company policies like the 'No ID, No Entry' rule. However, the company failed to specifically deny the allegation that petitioner was informed of his termination on July 22, 2014. De Guzman's testimony only attested to instances where petitioner was reprimanded for policy violations but did not state that petitioner was barred from entering on that specific date. This silence on a material allegation is deemed an admission by Kalookan Slaughterhouse. Therefore, petitioner was illegally dismissed and is entitled to backwages and separation pay as awarded by the LA. The monetary claims for service incentive leave pay, night shift differential pay, and 13th month pay are also proper, limited to three years prior to the filing of the complaint, as Kalookan Slaughterhouse failed to prove payment of these benefits.
Main Doctrine
The existence of an employer-employee relationship is determined by the 'four-fold test': (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. The totality of evidence, including the issuance of an ID, gate passes, log sheets, and the exercise of control over work methods, can establish this relationship, even if the employer attempts to attribute the hiring to a supervisor.