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15, 2012
On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard
benefits. He alleged that he was an employee of Fly Ace since September 2007, performing various tasks at the
respondents warehouse such as cleaning and arranging the canned items before their delivery to certain locations,
except in instances when he would be ordered to accompany the companys delivery vehicles, as pahinante; that he
reported for work from Monday to Saturday from 7:00 oclock in the morning to 5:00 oclock in the afternoon; that
during his employment, he was not issued an identification card and payslips by the company; that on May 6, 2008,
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;5 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;" 6 that he then went home and discussed the matter with his family; 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.
To support his allegations, Javier presented an affidavit of one Bengie Valenzuela who alleged that Javier was a
stevedore or pahinante of Fly Ace from September 2007 to January 2008. The said affidavit was subscribed before
the Labor Arbiter (LA).7
For its part, Fly Ace averred that it was engaged in the business of importation and sales of groceries. Sometime in
December 2007, Javier was contracted by its employee, Mr. Ong, as extra helper on a pakyaw basis at an agreed
rate of P 300.00 per trip, which was later increased to P 325.00 in January 2008. Denying that he was their employee,
Fly Ace insisted that there was no illegal dismissal.8 Fly Ace submitted a copy of its agreement with Milmar Hauling
Services and copies of acknowledgment receipts evidencing payment to Javier for his contracted services bearing the
words, "daily manpower (pakyaw/piece rate pay)" and the latters signatures/initials. The CA likewise added that
Javiers 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. 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,
ISSUE: Whether or not Javier is an employee of respondent
RULING: No. Javier is not an employee of Fly Ace.
As the records bear out, the LA and the CA found Javiers claim of employment with Fly Ace as wanting and deficient.
The Court is constrained to agree. Although Section 10, Rule VII of the New Rules of Procedure of the NLRC 28 allows
a relaxation of the rules of procedure and evidence in labor cases, this rule of liberality does not mean a complete
dispensation of proof. 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.

"No particular form of evidence is required to prove the existence of such employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be
admitted. - fnt31 Hence, while no particular
form of evidence is required, a finding that such relationship exists must still rest on some substantial evidence.
Moreover, the substantiality of the evidence depends on its quantitative as well as its qualitative aspects."30Although
substantial evidence is not a function of quantity but rather of quality, the x x x circumstances of the instant case
demand that something more should have been proffered. 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.
Javier failed to pass the substantiality requirement to support his claim. Hence, the Court sees no reason to depart
from the findings of the CA. 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. In said document, all Valenzuela attested to was that he would
frequently see Javier at the workplace where the latter was also hired as stevedore. 34 Certainly, in gauging the
evidence presented by Javier, the Court cannot ignore the inescapable conclusion that his mere presence at the
workplace falls short in proving employment therein. The supporting affidavit could have, to an extent, bolstered
Javiers claim of being tasked to clean grocery items when there were no scheduled delivery trips, but no information
was offered in this subject simply because the witness had no personal knowledge of Javiers employment status in
the company.
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, viz: (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 employees conduct. Of these
elements, the most important criterion is whether the employer controls or has reserved the right to control the
employee not only as to the result of the work but also as to the means and methods by which the result is to be
Javiers allegations did not establish that his relationship with Fly Ace had the attributes of an employer-employee
relationship on the basis of the above-mentioned four-fold test. Worse, Javier was not able to refute Fly Aces
assertion that it had an agreement with a hauling company to undertake the delivery of its goods. It was also baffling
to realize that Javier did not dispute Fly Aces denial of his services exclusivity to the company. In short, all that Javier
laid down were bare allegations without corroborative proof.
There was no substantial evidence to prove employer-employee relationship. Having a service contract with Milmar
Hauling Services for the purpose of transporting and delivering company products to customers, Fly Ace contracted
Javier as an extra helper or pahinante on a mere "per trip basis." Javier, who was actually a loiterer in the area, only
accompanied and assisted the company driver when Milmar could not deliver or when the exigency of extra deliveries
arises for roughly five to six times a month. Before making a delivery, Fly Ace would turn over to the driver and Javier
the delivery vehicle with its loaded company products. With the vehicle and products in their custody, the driver and
Javier "would leave the company premises using their own means, method, best judgment and discretion on how to
deliver, time to deliver, where and [when] to start, and manner of delivering the products." 20


Sometime in 1958, private respondent Jaime Sahot5 started working as a truck helper for petitioners family-owned
trucking business named Vicente Sy Trucking. In 1965, he became a truck driver of the same family business,

renamed T. Paulino Trucking Service, later 6Bs Trucking Corporation in 1985, and thereafter known as SBT Trucking
Corporation since 1994. Throughout all these changes in names and for 36 years, private respondent continuously
served the trucking business of petitioners. In April 1994, Sahot was already 59 years old. He had been incurring
absences as he was suffering from various ailments. He inquired about his medical and retirement benefits with the
Social Security System (SSS) on April 25, 1994, but discovered that his premium payments had not been remitted by
his employer. Sahot had filed a week-long leave sometime in May 1994. On May 27th, he was medically examined
and treated for EOR, presleyopia, hypertensive retinopathy G II (Annexes "G-5" and "G-3", pp. 48, 104,
respectively),6 HPM, UTI, Osteoarthritis (Annex "G-4", p. 105),7 and heart enlargement. At the end of his week-long
absence, Sahot applied for extension of his leave for the whole month of June, 1994. Sahot found himself in a
dilemma. He was facing dismissal if he refused to work, But he could not retire on pension because petitioners never
paid his correct SSS premiums. The fact remained he could no longer work as his left thigh hurt abominably.
Petitioners ended his dilemma. They carried out their threat and dismissed him from work, effective June 30, 1994. He
ended up sick, jobless and penniless.
On September 13, 1994, Sahot filed with the NLRC NCR Arbitration Branch, a complaint for illegal dismissal,
docketed as NLRC NCR Case No. 00-09-06717-94. He prayed for the recovery of separation pay and attorneys fees
against Vicente Sy and Trinidad Paulino-Sy, Belen Paulino, Vicente Sy Trucking, T. Paulino Trucking Service, 6Bs
Trucking and SBT Trucking, herein petitioners. For their part, petitioners contend that private respondent was not
illegally dismissed as a driver because he was in fact petitioners industrial partner. They add that it was not until the
year 1994, when SBT Trucking Corporation was established, and only then did respondent Sahot become an
employee of the company.
ISSUE: WON respondent Jaime Sahot is an employee of petitioner Sy
RULING: Yes. Respondent is an employee of Sy.
there was error committed by the Labor Arbiter when he concluded that complainant was an industrial partner prior to
1994. A computation of the age of complainant shows that he was only twenty-three (23) years when he started
working with respondent as truck helper.
The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the
employees conduct. The most important element is the employers control of the employees conduct, not only as to
the result of the work to be done, but also as to the means and methods to accomplish it. 19
As found by the appellate court, petitioners owned and operated a trucking business since the 1950s and by their own
allegations, they determined private respondents wages and rest day.20 Records of the case show that private
respondent actually engaged in work as an employee. During the entire course of his employment he did not have the
freedom to determine where he would go, what he would do, and how he would do it. He merely followed instructions
of petitioners and was content to do so, as long as he was paid his wages. Indeed, said the CA, private respondent
had worked as a truck helper and driver of petitioners not for his own pleasure but under the latters control.
Private respondent, for his part, denies that he was ever an industrial partner of petitioners. There was no written
agreement, no proof that he received a share in petitioners profits, nor was there anything to show he had any
participation with respect to the running of the business. 18 Article 176721 of the Civil Code states that in a contract of
partnership two or more persons bind themselves to contribute money, property or industry to a common fund, with
the intention of dividing the profits among themselves. 22 Not one of these circumstances is present in this case. No
written agreement exists to prove the partnership between the parties. Private respondent did not contribute money,
property or industry for the purpose of engaging in the supposed business. There is no proof that he was receiving a
share in the profits as a matter of course, during the period when the trucking business was under operation. Neither

is there any proof that he had actively participated in the management, administration and adoption of policies of the
business. Thus, private respondent was not an industrial partner but an employee of petitioner.

ENCYCLOPEDIA vs. NLRC and Limjoco 1996 case

Private respondent Benjamin Limjoco was a Sales Division Manager of petitioner Encyclopaedia Britannica and was
in charge of selling petitioner's products through some sales representatives. As compensation, private respondent
received commissions from the products sold by his agents. He was also allowed to use petitioner's name, goodwill
and logo. Petitioner would also be informed about appointments, promotions, and transfers of employees in private
respondent's district. It was, however, agreed upon that office expenses would be deducted from private respondent's
commissions. On June 14, 1974, private respondent Limjoco resigned from office to pursue his private business. Then
on October 30, 1975, he filed a complaint against petitioner Encyclopaedia Britannica with the Department of Labor
and Employment, claiming for non-payment of separation pay and other benefits, and also illegal deduction from his
sales commissions.
Petitioner Encyclopaedia Britannica alleged that complainant Benjamin Limjoco (Limjoco, for brevity) was not its
employee but an independent dealer authorized to promote and sell its products and in return, received commissions
therefrom. He also had his own separate office, financed the business expenses, and maintained his own workforce.
The salaries of his secretary, utility man, and sales representatives were chargeable to his commissions. Thus,
petitioner argued that it had no control and supervision over the complainant as to the manner and means he
conducted his business operations. The latter did not even report to the office of the petitioner and did not observe
fixed office hours. Consequently, there was no employer-employee relationship.
Limjoco maintained otherwise. He alleged that he was hired by the petitioner in July 1970, was assigned in the sales
department, and was earning a certain amount as an average monthly salary. was under the supervision of the
petitioner's officials who issued to him and his other personnel, memoranda, guidelines on company policies,
instructions and other orders. He was, however, dismissed by the petitioner when the Laurel-Langley Agreement
expired. As a result thereof, Limjoco asserts that in accordance with the established company practice and the
provisions of the collective bargaining agreement, he was entitled to termination pay, unpaid benefits (Christmas
bonus, midyear bonus, clothing allowance, vacation leave, and sick leave), and the amounts illegally deducted from
his commissions which were then used for the payments of office supplies, office space, and overhead expenses.
ISSUE: WON there is an employer employee relationship between petitioners and respondent LImjoco.
RULING: No. Limjoco is an independent contractor.

In determining the existence of an employer-employee relationship the following elements must be present: 1)
selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; and 4) the power to control
the employee's conduct. Of the above, control of employee's conduct is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. 3 Under the control test, an
employer-employee relationship exists 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 used in reaching that end. 4

The fact that petitioner issued memoranda to private respondents and to other division sales managers did not prove
that petitioner had actual control over them. The different memoranda were merely guidelines on company policies
which the sales managers follow and impose on their respective agents. It should be noted that in petitioner's
business of selling encyclopedias and books, the marketing of these products was done through dealership
agreements. The sales operations were primarily conducted by independent authorized agents who did not receive
regular compensations but only commissions based on the sales of the products. These independent agents hired
their own sales representatives, financed their own office expenses, and maintained their own staff. Thus, there was a
need for the petitioner to issue memoranda to private respondent so that the latter would be apprised of the company
policies and procedures. Nevertheless, private respondent Limjoco and the other agents were free to conduct and
promote their sales operations. The periodic reports to the petitioner by the agents were but necessary to update the
company of the latter's performance and business income. Although the petitioner can fix the prices of the products for
reason of uniformity and private respondent could not alter them, the latter, nevertheless, had free rein in the means
and methods for conducting the marketing operations. He selected his own personnel and only reason why he had to
notify the petitioner about such appointments was for purpose of deducting the employees' salaries from his
commissions. (Petitioner in their agreement had to be informed about the appointments, promotions, and transfers of
employees that respondent Limjoco had to take)