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TENG V.

PAHAGAC
FACTS:
1. Albert Teng Fish Trading is engaged in deep sea fishing. Teng
claims that he customarily enters into joint venture
agreements with master fishermen who will be in charge of
the management of each fishing venture, including the
hiring of the members of its complement.
2. Teng alleges that the master fishermen hired the respondent
workers as checkers to determine the volume of the fish
caught in every fishing voyage.
3. Respondent workers filed a complaint for illegal dismissal
against Teng before the NCMB.
4. Respondents alleged that:
a. Teng hired them without any written employment
contract to serve as his eyes and ears aboard the
fishing boats.
b. To classify the fish caught
c. To receive instructions where to unload the catch
d. That they received regular monthly salaries plus 13 th
month pay
5. They asserted that Teng expressed his doubts on the correct
volume of the fish caught and subsequently terminated
them
6. Teng contends that he does not have ay hand in hiring the
respondent workers and that the master fisherman is the
one who hired them. That his role is to supply the
equipments and capital.
7. Voluntary Arbitrator: ruled in favor of Teng. No EE-ER
relationship.
8. Respondents filed an MR but VA denied the same with
teason that the remedy of a MR is not provided for that
party adversely affecter under the Procedural Guidelines in
the Conduct of Voluntary Arbitration Proceedings.
9. CA: reversed. There exists an ER-EE relationship between
them.
10. Teng moved to reconsider the CAs decision alleging that:
a. The VAs decision is not subject to MR, hence, the
VAs decision has becom final and executory
b. No ER-EE relationship.
ISSUE:
1. WON the remedy of MR is not allowed for the decision of VA?
2. WON there is ER-EE relationship?
HELD:

First Issue:
1. Article 263 of LC states that Voluntary arbitration or
decisions shall be final and unappealable and executory.
However, RA 6715 amended that provision and deleted the
word unappealable.
a. Therefore, the legislature intended a change in the
law.
2. The VAs 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.
3. Under Section 6, Rule VII of the same guidelines
implementing Article 262-A of the Labor Code, this Decision,
as a matter of course, would become final and executory
after ten (10) calendar days from receipt of copies of the
decision by the parties x x x unless, in the meantime, a
motion for reconsideration or a petition for review to the
Court of Appeals under Rule 43 of the Rules of Court is filed
within the same 10-day period.
4. Also, In the exercise of its power to promulgate
implementing rules and regulations, an implementing
agency, such as the Department of Labor, is restricted from
going beyond the terms of the law it seeks to implement; it
should neither modify nor improve the law. The agency
formulating the rules and guidelines cannot exceed the
statutory authority granted to it by the legislature.
5. By disallowing the reconsideration of the VAs decision,
these rules deny the VA the chance to correct himself and
compel the courts of justice to prematurely intervene with
the action of an administrative agency entrust with the
adjudication of controversies coming under its special
knowledge.
Second Issue:
1. There exists an ER-EE relationship. 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 Tengs 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.
2. The respondents received uniform amounts of their shares
so the arguments of Teng that it is commission is ridiculous
since it would mean that they caught the same number of
fish for 13 years.

3. There was element of control as teng directed the workers


on what to do.
4. Teng cannot hide behind the fact that Master fisherman
hired the workers since that would mean that Teng
committed impermissible labor only contracting. Labor only
contracting is declared prohibited.
5. 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,

6.

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.
Teng admitted that he solely provided for the capital and
equipment and the master supplied the workers