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Marsman hired Sta. Rita as a warehouseman and controlled his warehouse assignments. Marsman thereafter purchased Metro Drug, now CPDSI,
which was engaged in a similar business. Marsman then entered into a MOA with MEU, its bargaining representative, integrating its employees
with CPDSI and transferring its employees, and employment obligation to CPDSI. Sta. Rita was assigned as a warehouseman in one of the
warehouses serviced by CPDSI. CPDSI terminated his employment due to redundancy. Sta. Rita thus filed an illegal dismissal case with the
NLRC against Marsman. SC ruled that there was no employer-employee relationship between Marsman and Sta. Rita due to the transfer of
employees to CPDSI.
DOCTRINE
In an illegal dismissal case, the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. However,
before a case for illegal dismissal can prosper, an employer-employee relationship must first be established.
FACTS
1. Marsman was engaged in the business of distribution and sale of pharmaceutical and consumer products for different manufacturers.
2. It temporarily hired Sta. Rita from Nov. 16, 1993 as a warehouse helper then confirmed his status as a regular employee on September 18,
1994 (wage: P3,796.00). Sta. Rita later joined Marsman Employees Union (MEU). Marsman initially administered Sta. Rita's warehouse
assignments to its different warehouses.
3. In July 1995, Marsman purchased Metro Drug Distribution Inc, now Consumer Products Distribution Services, Inc. (CPDSI), which was also
engaged in the distribution of pharmaceutical and consumer products.
4. The similarity in their businesses led to the integration of their employees formalized in a MOA dated June 1996 which provides that the
“management decided to integrate the employees of Marsman and Metro Drug effective July 1, 1996 under the Metro Drug legal entity” and
that “The union acknowledges Management's decision to transfer all employees of Marsman, including members of MEU-. PSMM/DF A, to
Metro Drug Distribution, Inc.”
- Marsman transitioned into a holding company and Metro Drug the operating company.
- Nov. 7, 1997 – Metro Drug changed its name to CPDSI
5. CPDSI contracted its logistic services to EAC Distributors (EAC), where CPDSI would provide warehousemen for EAC’s tobacco business
operating in EAC-Libis warehouse.
6. A letter issued by Marsman confirmed Sta. Rita's appointment as warehouseman for EAC-Libis Warehouse, effective Oct. 13, 1997, which
also stated that the assignment was a "transfer that is part of our cross-training program.”
7. EAC ended their logistic service agreement with CPDSI due to the transfer of its stock to its own warehouse.
8. CPDSI thus terminated the employment of those assigned in the EAC-Libis Warehouse including Sta. Rita. In a letter, CPDSI’s VP
notified Sta. Rita that his services will be terminated February 28, 2000 due to redundancy. CPDSI also reported this to DOLE.
9. Jan 25, 2000 - Sta. Rita filed a complaint in the NLRC against Marsman for illegal dismissal with damages in the form of moral, exemplary,
and actual damages and attorney's fees.
10. Marsman filed a MTD on the premise that the Labor Arbiter had no jurisdiction over the complaint for illegal dismissal because Marsman is
not Sta. Rita's employer.
11. LA found Marsman guilty of illegal dismissal. NLRC reversed upon appeal finding that there was no er-ee relationship.
12. CA reversed the NLRC and held that Marsman was Sta. Rita's employer because he was allegedly not part of the integration of employees
between Marsman and CPDSI. Hence this petition by Marsman.
1
o Power of Selection
There was nothing in the agreement to negate CPDSI' s power to select its employees and to decide when to engage them.
That CPDSI took Sta. Rita into its employ and assigned him to one of its clients signified the former's acquiescence to the
transfer.
The Letter of Marsman to Sta. Rita neither disturbed CPDSI’s selection powers.
When read in isolation, the use of "cross-training program" may be subject to a different interpretation but reading it together
with the MOA indicates that the "cross-training program" was in relation to the transition phase that Marsman and CPDSI
were then undergoing.
o Payment of wages
The form for leave application bearing Marsman’s logo did not sufficiently establish that Marsman paid Sta. Rita's wages.
He could have presented pay slips, salary vouchers, payrolls, certificates of withholding tax on compensation income or
testimonies of his witnesses.46
The submission of his SSS ID only proved his membership in the social insurance program. Sta. Rita should have instead
presented his SSS records which could have reflected his contributions, and the name and address of his employer.
o Power of dismissal
The letter dated January 14, 2000 clearly indicated that CPDSI, and not Marsman, terminated Sta. Rita's services.
o Power of Control
The Court has held that in a business establishment, an identification card is usually provided not only as a security measure
but mainly to identify the holder thereof as a bona fide employee of the firm issuing.
Thus the "new" ID of Sta Rita bearing Metro Drug’s logo confirmed that he was an employee of Metro Drug, which later
changed its name to CPDSI.
DISPOSITIVE PORTION
Petition granted.