G.R. No.

190809 immediately preceeding the termination of their

employment could avail themselves of the
DE LA SALLE ARANETA UNIVERSITY, Petitioner vs. postemployment benefits. As part-time faculty member,
JUANITO c. BERNARDO, Respondent Bernardo did not acquire permanent employment under
the Manual of Regulations for Private Schools, in relation
DECISION to the Labor Code, regardless of his length of service.

LEONARDO-DE CASTRO, J.: Aggrieved by the repeated denials of his claim for
retirement benefits, Bernardo filed before the NLRC,
National Capital Region, a complaint for non-payment of
Before Us is a Petition for Review on Certiorari under Rule retirement benefits and damages against DLS-AU and Dr.
45 of the Rules of Court filed by De La Salle-Araneta Bautista.
University (DLS-AU) seeking the annulment and reversal
of the Decision1 dated June 29, 2009 and
2 DLS-AU and Dr. Bautista averred that DLS-AU is a non-
Resolution dated January 4, 2010 of the Court of Appeals
in CA-G.R. SP No. 106399, which affirmed in toto the stock, non-profit educational institution duly organized
under Philippine laws, and Dr. Bautista was then its
Decision3 of the National Labor Relations Commission
Executive Vice-President. DLS-AU and Dr. Bautista
(NLRC) in NLRC NCR CA No. 043416-05. The NLRC
reversed and set aside the Labor Arbiter's Decision4 dated countered that Bernardo was hired as a part-time lecturer
December 13, 2004 in NLRC NCR Case No. 00-02-02729- at the Graduate School of DLS-AU to teach Recent
Advances in Animal Nutrition for the first semester of
04 and found that respondent Juanito C. Bernardo
school year 2003-2004. As stated in the Contract for Part-
(Bernardo) was entitled to retirement benefits.
Time Faculty Member Semestral, Bernardo bound himself
to teach "for the period of one semester beginning June 9,
On February 26, 2004, Bernardo filed a complaint against 2003 to October 12, 2003." The contract also provided that
DLS-AU and its owner/manager, Dr. Oscar Bautista (Dr. "this Contract shall automatically expire unless expressly
Bautista), for the payment of retirement benefits. Bernardo renewed in writing."9 Prior contracts entered into between
alleged that he started working as a part-time professional Bernardo and DLS-AU essentially contained the same
lecturer at DLS-AU (formerly known as the Araneta provisions. On November 8, 2003, DLS-AU informed
University Foundation) on June 1, 1974 for an hourly rate Bernardo that his contract would no longer be renewed.
of ₱20.00. Bernardo taught for two semesters and the DLS-AU and Dr. Bautista were surprised when they
summer for the school year 1974-1975. Bernardo then received a letter from Bernardo on February 18, 2004
took a leave of absence from June 1, 197 5 to October 31, claiming retirement benefits and Summons dated February
1977 when he was assigned by the Philippine Government 26, 2004 from the NLRC in relation to Bernardo's
to work in Papua New Guinea. When Bernardo came back complaint.10
in 1977, he resumed teaching at DLS-AU until October '12,
2003, the end of the first semester for school year 2003-
DLS-AU and Dr. Bautista maintained that Bernardo, as a
2004. Bernardo's teaching contract was renewed at the
part-time employee, was not entitled to retirement benefits.
start of every semester and summer. However, on
The contract between DLS-AU and Bernardo was for a
November 8, 2003, DLS-AU informed Bernardo through a
fixed term, i.e., one semester. Contracts of employment for
telephone call that he could not teach at the school
anymore as the school was implementing the retirement a fixed term are not proscribed by law, provided that they
age limit for its faculty members. As he was already 75 had been entered into by the parties without any force,
duress, or improper pressure being brought to bear upon
years old, Bernardo had no choice but to retire. At the time
the employee and absent any other circumstance vitiating
of his retirement, Bernardo was being paid ₱246.50 per
consent. That DLS-AU no longer renewed Bernardo's
hour.5
contract did not necessarily mean that Bernardo should be
deemed retired from service.
Bernardo immediately sought advice from the Department
of Labor and Employment (DOLE) regarding his
DLS-AU and Dr. Bautista also contended that Bernardo, as
entitlement to retirement benefits after 27 years of
a part-time employee, was not entitled to retirement
employment. In letters dated January 20, 20046 and
February 3, 2004,7 the DOLE, through its Public benefits pursuant to any retirement plan, CBA, or
Assistance Center and Legal Service Office, opined that employment contract. Neither was DLS-AU mandated by
law to pay Bernardo retirement benefits. The compulsory
Bernardo was entitled to receive benefits under Republic
retirement age under Article 302 [287] of the Labor Code,
Act No. 7641, otherwise known as the "New Retirement
as amended, is 65 years old. When the employee reaches
Law," and its Implementing Rules and Regulations.
said age, his/her employment is deemed terminated. The
matter of extension of the employee's service is addressed
Yet, Dr. Bautista, in a letter8 dated February 12, 2004, to the sound discretion of the employer; it is a privilege only
stated that Bernardo was not entitled to any kind of the employer can grant. In this case, Bernardo was
separation pay or benefits. Dr. Bautista explained to effectively separated from the service upon reaching the
Bernardo that as mandated by the DLS-AU's policy and age of 65 years old. DLS-AU merely granted Bernardo the
Collective Bargaining Agreement (CBA), only full-time privilege to teach by engaging his services for several
permanent faculty of DLS-AU for at least five years
more years after reaching the compulsory retirement age. The prescriptive period referred to in Article 291 of the
Assuming arguendo that Bernardo was entitled to Labor Code, as amended applies to all kinds of money
retirement benefits, he should have claimed the same claims arising from employer-employee relations including
upon reaching the age of 65 years old. Under Article 291 claims for retirement benefits.
of the Labor Code, as amended, all money claims arising
from employer-employee relations shall be filed within The ruling of the Supreme Court in De Guzman v. Court of
three years from the time the cause of action accrues. Appeals, (G.R. No. 132257, October 12, 1998), squarely
applies to the instant case:
Still according to DLS-AU and Dr. Bautista, Bernardo had
no cause of action against Dr. Bautista because the latter "The language of Article 291 of the Labor Code does not
was only acting on behalf of DLS-AU as its Executive Vice- limit its application only to "money claims specifically
President. It is a well-settled rule that a corporation is a recoverable under said Code, " but covers all money
juridical entity with a legal personality separate and distinct claims arising from employer-employee relations. Since
from the people comprising it and those acting for and on petitioners' demand for unpaid retirement/separation
its behalf. There was no showing that Dr. Bautista acted benefits is a money claim arising from their employment by
deliberately or maliciously in refusing to pay Bernardo his private respondent, Article 291 of the Labor Code is
retirement benefits, so as to make Dr. Bautista personally applicable. Therefore, petitioners' claim should be filed
liable for any corporate obligations of DLS-AU to Bernardo. within three years from the time their cause of action
accrued, or forever barred by prescription. "
Finally, DLS-AU asserted that Bernardo failed to establish
the factual and legal bases for his claims for actual, moral, It cannot be denied that the claim for retirement
and exemplary damages, and attorney's fees. There was benefits/pay arose out of employer-employee relations. In
no proof of the alleged value of the profits or any other loss line with the decision of the Supreme Court in De
suffered by Bernardo because of the non-payment of his Guzman, it should be treated as a money claim that must
retirement benefits. There was likewise no evidence of bad be claimed within three years from the time the cause of
faith or fraud on the part of DLS-AU in refusing to grant action accrued.
Bernardo retirement benefits.
Thus, upon reaching the compulsory retirement age of
On December 13, 2004, the Labor Arbiter rendered its sixty-five (65), [Bernardo] was effectively separated from
Decision dismissing Bernardo's complaint on the ground of the service. Clearly, such was the time when his cause of
prescription, thus: action accrued. He should have sought the payment of
such benefits/pay within three (3) years from such time. It
[T]he age of sixty-five (65) is declared as the compulsory cannot be denied that [Bernardo] belatedly sought the
retirement age under Article 287 of the Labor Code, as payment of his retirement benefits/pay considering that he
amended. When the compulsory retirement age is reached filed the instant Complaint only ten (10) years after his
by an employee or official, he is thereby effectively cause of action accrued. For failure to claim the retirement
separated from the service (UST Faculty Union v. National benefits/pay to which he claims to be entitled within three
Labor Relations Commission, University of Santo (3) years from the time he reached the age of sixty-five
Tomas, G.R. No. 89885, August 6, 1990). As mentioned (65), his claim should be forever barred.11
earlier, [Bernardo] is already seventy-five (75) years old,
and is way past the compulsory retirement age. If he were The Labor Arbiter decreed:
indeed entitled to receive his retirement pay/benefits, he
should have claimed the same ten (10) years ago upon WHEREFORE, premises considered, judgment is hereby
reaching the age of sixty-five (65).
rendered DISMISSING the instant Complaint on the
ground that the claim for retirement benefits/pay is already
In this connection, it would be worthy to mention that the barred by prescription.12
Labor Code contains a specific provision that deals with
money claims arising out of employer-employee
Bernardo appealed the foregoing Labor Arbiter's Decision
relationships. Article 291 of the Labor Code as amended to the NLRC, arguing that since he continuously worked for
clearly provides: DLS-AU and Dr. Bautista until October 12, 2003, he was
considered retired and the cause of action for his
"ART 291. MONEY CLAIMS. - All money claims arising retirement benefits accrued only on said date. There was
from employer-employee relations accruing during the clearly an agreement between Bernardo and DLS-AU that
effectivity of this Code shall be filed within three (3) years the former would continue teaching even after reaching the
from the time the cause of action accrued; otherwise they compulsory retirement age of 65 years. In addition, under
shall forever be barred. Republic Act No. 7641, part-time workers are entitled to
retirement pay of one-half month salary for every years of
xxxx service, provided that the following conditions are present:
(a) there is no retirement plan between the employer and
employees; (b) the employee has reached the age of 60
years old for optional retirement or 65 years old for
compulsory retirement; and (c) the employee should have DLS-AU filed before the Court of Appeals a Petition
rendered at least five years of service with the employer. for Certiorari and Prohibition, imputing grave abuse of
Bernardo avowed that all these conditions were extant in discretion on the part of the NLRC for (1) holding that
his case. Bernardo was entitled to retirement benefits despite the
fact that he was a mere part-time employee; and (2) not
The NLRC, in its Decision dated June 30, 2008, reversed holding that Bernardo's claim for retirement benefits was
the Labor Arbiter's ruling and found that Bernardo timely barred by prescription.
filed his complaint for retirement benefits. The NLRC
pointed out that DLS-AU and Dr. Bautista, knowing fully The Court of Appeals promulgated its Decision on June 29,
well that Bernardo already reached the compulsory age of 2009, affirming in toto the NLRC judgment. The Court of
retirement of 65 years old, still extended Bernardo's Appeals ruled that the coverage of, as well as the exclusion
employment. Thus, Bernardo's cause of action for from, Republic Act No. 7641 are clearly delineated under
payment of his retirement benefits accrued only on Sections 1 and 2 of the Implementing Rules of Book VI,
November 8, 2003, when he was informed by DLS-AU that Rule II of the Labor Code, as well as the Labor Advisory on
his contract would no longer be renewed and he was Retirement Pay Law; and part-time employees are not
deemed separated from employment. The principle of among those excluded from enjoying retirement benefits.
estoppel was also applicable against DLS-AU and Dr. Labor and social laws, being remedial in character, should
Bautista who could not validly claim prescription when they be liberally construed in order to further their purpose. The
were the ones who permitted Bernardo to work beyond appellate court also declared that the NLRC did not err in
retirement age. As to Bernardo's entitlement to retirement relying on the Implementing Rules of Republic Act No.
benefits, the NLRC held: 7641 because administrative rules and regulations issued
by a competent authority remain valid unless shown to
Equally untenable is the contention that [Bernardo], being contravene the Constitution or used to enlarge the power
a part time employee, is not entitled to retirement benefits of the administrative agency beyond the scope intended.
under Republic Act No. 7641. Indeed, a perusal of the
retirement law does not exclude a part time employee from The Court of Appeals additionally determined that
enjoying retirement benefits. On this score, Republic Act Bernardo's cause of action accrued only upon his
No. 7641 explicitly provides as within its coverage "all separation from employment and the subsequent denial of
employees in the private sector, regardless of their his demand for retirement benefits. To the appellate court,
position, designation, or status, and irrespective of the the NLRC was correct in applying the equitable doctrine of
method by which their wages are paid" (Section 1, Rules estoppel since the continuous extension of Bernardo's
Implementing the New Retirement Law) (Underlined for employment, despite him being well over the statutory
emphasis). The only exceptions are employees covered by compulsory age of retirement, prevented him from already
the Civil Service Law; domestic helpers and persons in the claiming his retirement benefits for he was under the
personal service of another; and employees in retail, impression that he could avail himself of the same
service and agricultural establishments or operations eventually upon the termination of his employment.
regularly employing not more than ten employees (ibid).
Clearly, [Bernardo] does not fall under any of the The dispositive portion of the Decision of the Court of
exceptions. Appeals reads:

Lastly, it is axiomatic that retirement law should be WHEREFORE, the petition is DISMISSED for lack of
construed liberally in favor of the employee, and all doubts merit. The assailed Decision of the National Labor
as to the intent of the laws should be resolved in favor of Relations Commission, dated 30 June 2008, is
the retiree to achieve its humanitarian purpose (Re: hereby AFFIRMED in toto. [Bernardo's] application for the
Gregorio G. Pineda, 187 SCRA 469, 1990). A contrary issuance of a Temporary Restraining Order and/or Writ of
ruling would inevitably defy such settled rule.13 Preliminary Injunction is accordingly DENIED.15

In the end, the NLRC adjudged: The Motion for Reconsideration of DLS-AU was denied by
the Court of Appeals in its Resolution dated January 4,
WHEREFORE, judgment is hereby rendered REVERSING 2010.
and SETTING ASIDE the appealed decision of the Labor
Arbiter. Accordingly, a new one is issued finding [Bernardo] Hence, DLS-AU lodged the present petition before us,
entitled to retirement benefits under Republic Act No. 7641 raising the following issues:
and ordering [DLS-AU and Dr. Bautista] to pay [Bernardo]
his retirement benefits equivalent to at least one-half (1/2) I
month of his latest salary for every year of his service.
Other claims are hereby denied for lack of merit.14
WHETHER OR NOT PART-TIME EMPLOYEES ARE
EXCLUDED FROM THE COVERAGE OF THOSE
In a Resolution dated September 15, 2008, the NLRC
ENTITLED TO RETIREMENT BENEFITS UNDER
denied the Motion for Reconsideration of DLS-AU and Dr. REPUBLIC ACT NO. [7641].
Bautista for lack of merit.
II. employee's duties set down in that contract as being
"usually necessary or desirable in the usual business or
WHETHER OR NOT A CLAIM FOR RETIREMENT trade of the employer." The concept of the employee's
BENEFITS FILED BEYOND THE PERIOD PROVIDED duties as being "usually necessary or desirable in the usual
FOR UNDER ART. 291 OF THE LABOR CODE HAS business or trade of the employer" is not synonymous with
PRESCRIBED.16 or identical to employment with a fixed term. Logically, the
decisive determinant in the term employment should not
We find the instant petition bereft of merit. be the activities that the employee is called upon to
perform, but the day certain agreed upon by the parties for
the commencement and termination of their employment
Bernardo is not questioning the relationship, a day certain being understood to be "that
termination of his employment, but which must necessarily come, although it may not be
only asserting his right to retirement known when." Seasonal employment, and employment for
benefits. a particular project are merely instances of employment in
which a period, where not expressly set down, is
There is no dispute that Bernardo was a part-time lecturer necessarily implied.
at DLS-AU, with a fixed-term employment. As a part-time
lecturer, Bernardo did not attain permanent status. Section xxxx
93 of the 1992 Manual of Regulations for Private Schools
provided:
Accordingly, and since the entire purpose behind the
development of legislation culminating in the present
Sec. 93. Regular or Permanent Status. - Those who have Article 280 of the Labor Code clearly appears to have
served the probationary period shall be made regular or been, as already observed, to prevent circumvention of the
permanent. Full-time teachers who have satisfactorily employee's right to be secure in his tenure, the clause in
completed their probationary period shall be considered said article indiscriminately and completely ruling out all
regular or permanent. written or oral agreements conflicting with the concept of
regular employment as defined therein should be
Per Section 92 of the same Regulations, probationary construed to refer to the substantive evil that the Code
period for academic personnel "shall not be more than itself has singled out: agreements entered into precisely to
three (3) consecutive years of satisfactory service for those circumvent security of tenure. It should have no application
in the elementary and secondary levels, six (6) consecutive to instances where a fixed period of employment was
regular semesters of satisfactory service for those in the agreed upon knowingly and voluntarily by the parties,
tertiary level, and nine (9) consecutive trimesters of without any force, duress or improper pressure being
satisfactory service for those in the tertiary level where brought to bear upon the employee and absent any other
collegiate courses are offered on the trimester basis." circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee
Thus, jurisprudence identified the requisites which should dealt with each other on more or less equal terms with no
concur for a private school teacher to acquire permanent moral dominance whatever being exercised by the former
status, viz.: (1) the teacher is a full-time teacher; (2) the over the latter. Unless thus limited in its purview, the law
teacher must have rendered three consecutive years of would be made to apply to purposes other than those
service; and (3) such service must have been explicitly stated by its framers; it thus becomes pointless
satisfactory.17 and arbitrary, unjust in its effects and apt to lead to absurd
and unintended consequences.
Considering the foregoing requirements, a part-time
employee would not attain permanent status no matter Such interpretation puts the seal on [Bibiso v. Victorias
how long he had served the school.18 Bernardo did not Milling Co., Inc.]upon the effect of the expiry of an agreed
become a permanent employee of DLS-AU despite period of employment as still good rule - a rule reaffirmed
teaching there as a part-time lecturer for a total of 27 years. in the recent case of Escudero v. Office of the
President (G.R. No. 57822, April 26, 1989) where, in the
Our jurisprudence had likewise settled the legitimacy of fairly analogous case of a teacher being served by her
fixed-term employment. In the landmark case of Brent school a notice of termination following the expiration of the
School, Inc. v. Zamora,19 the Court pronounced: last of three successive fixedterm employment contracts,
the Court held:
From the premise - that the duties of an employee entail
"activities which are usually necessary or desirable in the "Reyes' (the teacher's) argument is not persuasive. It loses
usual business or trade of the employer" - the conclusion sight of the fact that her employment was probationary,
does not necessarily follow that the employer and contractual in nature, and one with a definitive period. At
employee should be forbidden to stipulate any period of the expiration of the period stipulated in the contract, her
time for the performance of those activities. There is appointment was deemed terminated and the letter
nothing essentially contradictory between a definite period informing her of the non-renewal of her contract is not a
of an employment contract and the nature of the condition sine qua non before Reyes may be deemed to
have ceased in the employ of petitioner UST. The notice is Article 302 [287] of the Labor Code, as amended by
a mere reminder that Reyes' contract of employment was Republic Act No. 7641, reads:
due to expire and that the contract would no longer be
renewed. It is not a letter of termination. The interpretation Art. 302 [287]. Retirement. -Any employee may be
that the notice is only a reminder is consistent with the retired upon reaching the retirement ageestablished in
court's finding in Labajo, supra. x xx." the collective bargaining agreement or other applicable
employment contract.
Bernardo's employment with DLS-AU had always been for
a fixed-term, i.e., for a semester or summer. Absent In case of retirement, the employee shall be entitled to
allegation and proof to the contrary, Bernardo entered into receive such retirement benefits as he may have earned
such contracts of employment with DLS-AU knowingly and under existing Jaws and any collective bargaining
voluntarily. Hence, Bernardo's contracts of employment agreement and other agreements: Provided
with DLS-AU for a fixed term were valid, legal, and binding. however, That an employee's retirement benefits under
Bernardo's last contract of employment with DLS-AU any collective bargaining and other agreement shall not be
ended on October 12, 2003, upon the close of the first less than those provided herein.
semester for school year 2003-2004, without DLS-AU
offering him another contract for the succeeding semester.
In the absence of retirement plan or agreement providing
for retirement benefits of employees in the establishment,
Nonetheless, that Bernardo was a part-time employee and an employee upon reaching the age of sixty (60) years or
his employment was for a fixed period are immaterial in this more, but not beyond sixty five (65) years which is hereby
case. Bernardo is not alleging illegal dismissal nor claiming declared the compulsory retirement age, who has served
separation pay. Bernardo is asserting his right to at least five (5) years in said establishment, may retire and
retirement benefits given the termination of his shall be entitled to retirement pay equivalent to at least
employment with DLS-AU when he was already 75 years one-half (1/2) month salary for every year of service, a
old. fraction of at least six (6) months being considered as one
whole year.
As a part-time employee with fixed-term
employment, Bernardo is Unless the parties provide for broader inclusions, the term
entitled to retirement benefits. one-half month salary shall mean fifteen (15) days plus one
twelfth (1/12) of the 13th month pay and the cash
The Court declared in Aquino v. National Labor Relations equivalent of not more than five (5) days of service
Commission20 that retirement benefits are intended to help incentive leaves.
the employee enjoy the remaining years of his life,
lessening the burden of worrying for his financial support, xxxx
and are a form of reward for his loyalty and service to the
employer. Retirement benefits, where not mandated by Retail, service and agricultural establishments or
law, may be granted by agreement of the employees and operations employing not more than ten (10)
their employer or as a voluntary act on the part of the employees or workers are exempted from the
employer. coverage of this provision.

In the present case, DLS-AU, through Dr. Bautista, denied

Violation of this provision is hereby declared unlawful and
Bernardo's claim for retirement benefits because only full-
subject to the penal provisions provided under Article 288
time permanent faculty of DLS-AU are entitled to said
of this Code. (Emphases ours.)
benefits pursuant to university policy and the CBA. Since
Bernardo has not been granted retirement benefits under
any agreement with or by voluntary act of DLS-AU, the Book VI, Rule II of the Rules Implementing the Labor Code
next question then is, can Bernardo claim retirement clearly describes the coverage of Republic Act No. 7641
benefits by mandate of any law? and specifically identifies the exemptions from the same,
to wit:
We answer in the affirmative.
Sec. 1. General Statement on Coverage. - This Rule shall
apply to all employees in the private sector, regardless
Republic Act No. 7641 is a curative social legislation. It of their position, designation or status and
precisely intends to give the minimum retirement benefits irrespective of the method by which their wages are
to employees not entitled to the same under collective paid, except to those specifically exempted under
bargaining and other agreements. It also applies to Section 2 hereof. As used herein, the term "Act" shall
establishments with existing collective bargaining or other
refer to Republic Act No. 7641, which took effect on
agreements or voluntary retirement plans whose benefits
January 7, 1993.
are Jess than those prescribed in said law. 21
Section 2. Exemptions. - This Rule shall not apply to the
following employees:
2.1 Employees of the National Government and its corporations, if they are covered by the Civil Service Law
political subdivisions, including Government-owned and its regulations.
and/or controlled corporations, if they are covered by
the Civil Service Law and its regulations. xxxx

2.2 Domestic helpers and persons in the personal service C. SUBSTITUTE RETIREMENT PLAN
of another. (Deleted by Department Order No. 20 issued
by Secretary Ma. Nieves R. Confessor on May 31, 1994.) Qualified workers shall be entitled to the retirement benefit
under RA 7641 in the absence of any individual or
2.3. Employees of retail, service and agricultural collective agreement, company policy or practice. x x x
establishments or operations regularly employing not (Emphasis ours.)
more than ten (10) employees. As used in this sub-
section:
Republic Act No. 7641 states that "any employee may be
retired upon reaching the retirement age x x x;" and "[i]n
(a) "Retail establishment" is one principally engaged in the case of retirement, the employee shall be entitled to
sale of goods to end-users for personal or household use. receive such retirement benefits as he may have earned
It shall lose its retail character qualified for exemption if it under existing laws and any collective bargaining
is engaged in both retail and wholesale of goods. agreement and other agreements." The Implementing
Rules provide that Republic Act No. 7641 applies to "all
(b) "Service establishment" is one principally engaged in employees in the private sector, regardless of their
the sale of service to individuals for their own or household position, designation or status and irrespective of the
use and is generally recognized as such. method by which their wages are paid, except to those
specifically exempted x x x." And Secretary Quisumbing' s
(c) "Agricultural establishment/operation" refers to an Labor Advisory further clarifies that the employees covered
employer which is engaged in agriculture. This term refers by Republic Act No. 7641 shall "include part-time
to all farming activities in all its branches and includes, employees, employees of service and other job contractors
among others, the cultivation and tillage of the soil, and domestic helpers or persons in the personal service of
production, cultivation, growing and harvesting of any another."
agricultural or horticultural commodities, dairying, raising of
livestock or poultry, the culture of fish and other aquatic The only exemptions specifically identified by Republic Act
products in farms or ponds, and any activities performed No. 7641 and its Implementing Rules are: (1) employees
by a farmer or on a farm as an incident to or in conjunctions of the National Government and its political subdivisions,
with such farming operations, but does not include the including government-owned and/or controlled
manufacture and/or processing of sugar, coconut, abaca, corporations, if they are covered by the Civil Service Law
tobacco, pineapple, aquatic or other farm products. and its regulations; and (2) employees of retail, service and
(Emphases ours.) agricultural establishments or operations regularly
employing not more than 10 employees.
Through a Labor Advisory dated October 24, 1996, then
Secretary of Labor, and later Supreme Court Justice, Based on Republic Act No. 7641, its Implementing Rules,
Leonardo A. Quisumbing (Secretary Quisumbing), and Secretary Quisumbing's Labor Advisory, Bernardo, as
provided Guidelines for the Effective Implementation of a part-time employee of DLS-AU, is entitled to retirement
Republic Act No. 7641, The Retirement Pay Law, benefits. The general coverage of Republic Act No. 7641
addressed to all employers in the private sector. Pertinent is broad enough to encompass all private sector
portions of said Labor Advisory are reproduced below: employees, and part-time employees are not among those
specifically exempted from the law. The provisions of
A. COVERAGE Republic Act No. 7641 and its Implementing Rules are
plain, direct, unambiguous, and need no further
elucidation. Any doubt is dispelled by the unequivocal
RA 7641 or the Retirement Pay Law shall apply to all
employees in the private sector, regardless of their statement in Secretary Quisumbing's Labor Advisory that
Republic Act No. 7641 applies to even part-time
position, designation or status and irrespective of the
method by which their wages are paid. They shall include employees.
part-time employees, employees of service and other
job contractors and domestic helpers or persons in Under the rule of statutory construction of expressio unius
the personal service of another. est exclusio alterius, Bernardo's claim for retirement
benefits cannot be denied on the ground that he was a
part-time employee as part-time employees are not among
The law does not cover employees of retail, service and
those specifically exempted under Republic Act No. 7641
agricultural establishments or operations employing not
or its Implementing Rules. Said rule of statutory
more than [ten] (10) employees or workers and employees
of the National Government and its political subdivisions, construction is explained thus:
including Government-owned and/or controlled
It is a settled rule of statutory construction that the express We further find that the Implementing Rules and Secretary
mention of one person, thing, or consequence implies the Quisumbing' s Labor Advisory are consistent with Article 4
exclusion of all others. The rule is expressed in the familiar of the Labor Code, which expressly mandates that "all
maxim, expressio unius est exclusio alterius. doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules
The rule of expressio unius est exclusio alterius is and regulations, shall be resolved in favor of labor." There
formulated in a number of ways. One variation of the rule being no compelling argument herein to convince us
is the principle that what is expressed puts an end to that otherwise, we uphold the legality and validity of the
which is implied. Expressum facit cessare taciturn. Thus, Implementing Rules and Secretary Quisumbing's Labor
where a statute, by its terms, is expressly limited to certain Advisory, and likewise apply the same to Bernardo's case.
matters, it may not, by interpretation or construction, be
extended to other matters. For the availment of the retirement benefits under Article
302 [287] of the Labor Code, as amended by Republic Act
xxxx No. 7641, the following requisites must concur: (1) the
employee has reached the age of 60 years for optional
The rule of expressio unius est exclusio alterius and its retirement or 65 years for compulsory retirement; (2) the
employee has served at least five years in the
variations are canons of restrictive interpretation. They are
establishment; and (3) there is no retirement plan or other
based on the rules of logic and the natural workings of the
human mind. They are predicated upon one's own applicable agreement providing for retirement benefits of
voluntary act and not upon that of others. They proceed employees in the establishment. Bernardo - being 75 years
old at the time of his retirement, having served DLS-AU for
from the premise that the legislature would not have made
a total of 27 years, and not being covered by the grant of
specified enumeration in a statute had the intention been
retirement benefits in the CBA - is unquestionably qualified
not to restrict its meaning and confine its terms to those
to avail himself of retirement benefits under said statutory
expressly mentioned.22
provision, i.e., equivalent to one-half month salary for
every year of service, a fraction of at least six months being
The NLRC and the Court of Appeals did not err in relying considered as one whole year.25
on the Implementing Rules of Republic Act No. 7641 in
their respective judgments which favored Bernardo.
Bernardo's employment was
extended beyond the compulsory
Congress, through Article 5 of the Labor Code, delegated retirement age and the cause of
to the Department of Labor and Employment (DOLE) and action for his retirement benefits
other government agencies charged with the accrued only upon the termination of
administration and enforcement of said Code the power to his extended employment with DLS-AU.
promulgate the necessary implementing rules and
regulations. It was pursuant to Article 5 of the Labor Code
Article 306 [291] of the Labor Code mandates:
that then Secretary of Labor Ma. Nieves R. Confesor
issued on January 7, 1993 the Rules Implementing the
New Retirement Law, which became Rule II of Book VI of Art. 306 [291]. Money claims. - All money claims arising
the Rules Implementing the Labor Code. from employer-employee relations accruing during the
effectivity of this Code shall be filed within three years from
the time the cause of action accrued; otherwise they shall
In ruling that Bernardo, as part-time employee, is entitled
be forever barred.
to retirement benefits, we do no less and no more than
apply Republic Act No. 7641 and its Implementing Rules
issued by the DOLE under the authority given to it by the DLS-AU invokes UST Faculty Union v. National Labor
Congress. Needless to stress, the Implementing Rules Relations Commission,26 wherein it was held that when an
partake the nature of a statute and are binding as if written employee or official has reached the compulsory
in the law itself. They have the force and effect of law and retirement age, he is thereby effectively separated from the
enjoy the presumption of constitutionality and legality until service. And so, DLS-AU maintains that Bernardo's cause
they are set aside with finality in an appropriate case by a of action for his retirement benefits, which is patently a
competent court.23 money claim, accrued when he reached the compulsory
retirement age of 65 years old, and had already prescribed
when Bernardo filed his complaint only 10 years later,
Moreover, as a matter of contemporaneous interpretation
when he was already 75 years old.
of law, Secretary Quisumbing's Labor Advisory has
persuasive effect. It is undisputed that in administrative
law, contemporaneous and practical interpretation of law We are not persuaded.
by administrative officials charged with its administration
and enforcement carries great weight and should be The case of UST Faculty Union is not in point as the issue
respected, unless contrary to law or manifestly involved therein was the right of a union to intervene in the
erroneous.24 extension of the service of a retired employee. Professor
Tranquilina J. Marilio (Prof. Marilio) already reached the
compulsory retirement age of 65 years old, but was
granted by the University of Sto. Tomas (UST) an this conduct shall be acted upon, or at least influenced by
extension of two years tenure. We ruled in said case that the other party; and (c) knowledge, actual or constructive,
UST no longer needed to consult the union before refusing of the actual facts.
to further extend Prof. Marilio' s tenure.1âwphi1
Inaction or silence may under some circumstances amount
A cause of action has three elements, to wit, (1) a right in to a misrepresentation, so as to raise an equitable
favor of the plaintiff by whatever means and under estoppel. When the silence is of such a character and
whatever law it arises or is created; (2) an obligation on the under such circumstances that it would become a fraud on
part of the named defendant to respect or not to violate the other party to permit the party who has kept silent to
such right; and (3) an act or omission on the part of such deny what his silence has induced the other to believe and
defendant violative of the right of the plaintiff or constituting act on, it will operate as an estoppel. This doctrine rests on
a breach of the obligation of the defendant to the plaintiff.27 the principle that if one maintains silence, when in
conscience he ought to speak, equity will debar him from
Bernardo's right to retirement benefits and the obligation of speaking when in conscience he ought to remain silent.
DLS-AU to pay such benefits are already established
under Article 302 [287] of the Labor Code, as amended by DLS-AU, in this case, not only kept its silence that
Republic Act No. 7641. However, there was a violation of Bernardo had already reached the compulsory retirement
Bernardo's right only after DLS-AU informed him on age of 65 years old, but even continuously offered him
November 8, 2003 that the university no longer intended to contracts of employment for the next 10 years. It should
offer him another contract of employment, and already not be allowed to escape its obligation to pay Bernardo's
accepting his separation from service, Bernardo sought his retirement benefits by putting entirely the blame for the
retirement benefits, but was denied by DLSAU. Therefore, deferred claim on Bernardo's shoulders.
the cause of action for Bernardo's retirement benefits only
accrued after the refusal of DLS-AU to pay him the same, WHEREFORE, premises considered, the instant Petition
clearly expressed in Dr. Bautista's letter dated February 1s DISMISSED for lack of merit. The Decision dated June
12, 2004. Hence, Bernardo's complaint, filed with the 29, 2009 and Resolution dated January 4, 2010 of the
NLRC on February 26, 2004, was filed within the three- Court of Appeals in CA-G.R. SP No. 106399
year prescriptive period provided under Article 291 of the are AFFIRMED.
Labor Code.
SO ORDERED.
Even granting arguendo that Bernardo's cause of action
already accrued when he reached 65 years old, we cannot G.R. No. 215281
simply overlook the fact that DLS-AU had repeatedly
extended Bernardo's employment even when he already
reached 65 years old. DLS-AU still knowingly offered
Bernardo, and Bernardo willingly accepted, contracts of
employment to teach for semesters and summers in the
succeeding 10 years. Since DLS-AU was still continuously
engaging his services even beyond his retirement age,
Bernardo deemed himself still employed and deferred his
claim for retirement benefits, under the impression that he
could avail himself of the same upon the actual termination
of his employment. The equitable doctrine of estoppel is
thus applicable against DLS-AU. In Planters Development
Bank v. Spouses Lopez,28 we expounded on the principle
of estoppels as follows:

Section 2, Rule 131 of the Rules of Court provides that

whenever a party has, by his own declaration, act, or
omission, intentionally and deliberately led another to
believe that a particular thing is true, and to act upon such
belief, he cannot, in any litigation arising out of such
declaration, act or omission, be permitted to falsify it.

The concurrence of the following requisites is necessary

for the principle of equitable estoppel to apply: (a) conduct
amounting to false representation or concealment of
material facts or at least calculated to convey the
impression that the facts are otherwise than, and
inconsistent with, those which the party subsequently
attempts to assert; (b) intent, or at least expectation that
ROLANDO DE ROCA, Petitioner On 4 September 2012, petitioner filed a petition8 for
vs. annulment of judgment on the ground of lack of jurisdiction
EDUARDO C. DABUY AN, JENNIFER A. BRANZUELA, before the NLRC. However, the petition was dismissed
JENNYL YN A. RI CARTE, and HERMINIGILDO F. because it was also filed beyond the period allowed by the
SABANATE, Respondents 2011 NLRC Rules of Procedure. Petitioner sought
reconsideration but the same was also denied.9
DECISION
Ruling of the Labor Arbiter
DEL CASTILLO, J.:
In the above-mentioned June 29, 2012 Decision10 in
This Petition for Review on Certiorari1 seeks to set aside NLRC-NCR-Case No. 02-02490-12, Labor Arbiter J.
the June 19, 2014 Decision2 and October 28, 2014 Potenciano F. Napenas, Jr. held, among others, that -
Resolution3 of the Court of Appeals (CA) dismissing the
Petition for Certiorari4 in CA-G.R. SP No. 127974 and x x x [R]espondent Rolando De Roca surprisingly filed a
denying herein petitioner's Motion for "Motion to Dismiss" on the ground of lack of jurisdiction. In
Reconsideration,5 respectively. substance, the motion is anchored on the alleged lack of
employer-employee relationship between the parties
Factual Antecedents thereto. In support thereof: respondent De Roca further
alleged that it was rather the Oceanic Travel and Tour
Agency and respondent Ewayan in whose favor
As found by the CA, the facts are as follows:
respondent De Roca leased the subject Hotel, rule the true
employers of the complainants as evidenced by the
In 2012, private respondents filed a complaint6 for Contract of Lease of Buildings (Annex "1" respondent’s
illegal dismissal against "RAF Mansion Hotel Old Motion to Dismiss).
Management and New Management and Victoriano
Ewayan." Later, private respondents amended the
complaint and included petitioner Rolando De Roca as Subsequent thereof [sic], complainants filed an Opposition
[co]-respondent. Summons was sent through registered with Motion to Implead (to Respondent’s Motion to
mail to petitioner but it was returned. Dismiss), seeking, among others, that the corporation
"Oceanic Travel and Tour Agency" be impleaded as
additional respondent.
Thereafter, a conference was set but only complainants
attended. Thus, another summons was issued and
personally served to petitioner by the bailiff of the NLRC as xxxx
evidenced by the latter’s return dated 14 March 2012.
Despite service of summons, petitioner did not attend Anent the Motion to Dismiss, Rule V, Sections 6 and 7 of
the subsequent hearings prompting the labor arbiter the Revised 2011 NLRC Rules of Procedure explicitly
to direct private respondents to submit their position provide:
paper.
‘SECTION 6. MOTION TO DISMISS. - Before the date set
On 18 April 2012, private respondents submitted their for the mandatory conciliation and mediation conference,
position paper. On the same day, petitioner filed his the respondent may file a motion to dismiss on grounds
motion to dismiss7 on the ground of lack of provided under Section 5, paragraph (a) hereof Such
jurisdiction. He alleged that[,] while he [was] the owner motion shall be immediately resolve[ d] by the Labor
of RA.F Mru1sion Hotel building, the same [was being] Arbiter through a written order. An order denying the
leased by Victoriano Ewayan., the owner of Oceanics motion to dismiss, or suspending its resolution until the
Travel and Tour Agency. Petitioner claims that Ewayan final determination of the case, is not appealable.
was the employer of private respondents,
Consequently, he asserted that there was no SECTION 7. EFFECT OF FAILURE TO FILE. - No motion
employer-employee relationship between him and to dismiss shall be allowed or entertained after the lapse of
private respondents and the labor arbiter had no the period provided in Section 6 hereof.’
jurisdiction.
Clearly, respondent De Roca’s Motion to Dismiss, having
On 29 June 2012. the labor arbiter rendered a decision been filed long after the date set for the mandatory
directing petitioner, among others, to pay backwages and conference, should be dismissed on such ground being a
other monetary award to private respondents. In said prohibited pleading.
decision, the labor arbiter also denied the motion to
dismiss for having been filed beyond the reglementary Coming now on [sic] the meat of the controversy, since
period. Petitioner received a copy of the decision on 3 respondents obviously failed to controvert the allegations
August 2012. by the complainants in their Position Papers accompanied
with supporting evidence, We have no recourse but to
accord them credence for being uncontradicted.
xxxx annulment of judgment was denied because it was filed
after the lapse of the period prescribed under the 2011
Obviously, respondents had failed to discharge such NLRC Rules of Procedure and this is the issue that this
burden. Court will resolve.

WHEREFORE, premises considered, judgement is hereby xxxx

rendered finding all the respondents liable for illegal
dismissal. Record shows that petitioner received the decision of the
labor arbiter on 3 August 2012 but he filed his petition on 4
Accordingly, all of them are hereby ordered to pay September 2012 or thirty-one days after such receipt. In
complainants their full backwages and other monetary this regard, the NLRC did not commit any error in denying
claims computed from date of their dismissal up to the the petition much more grave abuse of discretion. The rule
promulgation of this decision plus 10% of the total is clear and the NLRC may not ‘arbitrarily disregard
monetary award as attorney’s fees. specific provisions of the Rules which are precisely
intended to assist the parties in obtaining just, expeditious
and inexpensive settlement of labor disputes.’
xxxx

Lastly, the Motion to Dismiss is denied for being filed Similarly, the labor arbiter did not commit any grave abuse
of discretion because he just observed the NLRC rules
beyond the period allowed by the rules, thus, a prohibited
when he denied petitioner's motion to dismiss. x x x
pleading. Also, the Motion to implead Oceanic Travel and
Tours Agency as additional respondent is denied for the
same reason. In addition, We also cannot attribute grave abuse of
discretion in the labor arbiter’s resolution of the motion to
dismiss in the decision itself: While this may seem peculiar,
SO ORDERED.11
it must be emphasized that the motion to dismiss was filed
at about the period when the case was about to be
Ruling of the National Labor Relations Commission submitted for decision. x xx

Instead of filing an appeal before the National Labor In the case at bar, the inclusion of the denial of the motion
Relations Commission (NLRC), petitioner instituted to dismiss in the decision is not without justification.
the petition for annulment of judgment referred to Petitioner not only failed to submit the motion to dismiss on
above, which the NLRC dismissed in its September 28, time but also forfeited the right to submit his position paper
2012 Resolution12 for being tardy, as it was filed beyond because he did not attend the conference and subsequent
the 10-day reglementary period prescribed under Section hearings. Even if the labor arbiter denied the motion to
3, Rule XII of the 2011 NLRC Rules of Procedure. dismiss in a separate order, petitioner would still be
precluded from submitting a position paper where he can
Ruling of the Court of Appeals buttress his claim of lack of jurisdiction. The labor arbiter,
therefore, could not be said to have committed grave
Petitioner filed a Petition for Certiorari before the CA, abuse of discretion in denying the motion to dismiss and in
where he argued, among others, that he was never an incorporating its order in the decision.
employer of the respondents, as he was merely the owner
of the premises which were leased out to and occupied by xxxx
respondents' true employer, Victoriano Ewayan (Ewayan),
who owned Oceanic Travel and Tours Agency which As regards the claim of petitioner on the merits of his
operated the RAF Mansion Hotel where respondents were ground, We cannot consider his arguments and assume
employed as cook, waitress, and housekeeper; and that that his allegation of lack of employer-employment [sic]
his inclusion in the labor case was borne of malice which relationship between him and private respondents is true.
is shown by the fact that when the labor complaint was First, he did not present any evidence to support his claim
filed, he was not originally impleaded as a respondent, and because he lost the opportunity to submit a position paper.
was made so only after respondents discovered that their Thus, his allegations will remain mere allegations.
employer had already absconded - in which case he was
impleaded under the pretext that he constituted the "new
management of RAF Mansion Hotel". Second, it would transgress fairness if his allegations in
this petition should be given any attention because the
private respondents never had the [opportunity to] present
On June 19, 2014, the CA rendered the assailed evidence to meet his claims. Private respondents'
Decision dismissing the petition, decreeing thus: arguments were correctly centered on the provisions of the
2011 NLRC Rules of Procedure because they were the
At the outset, We note that the issue raised by petitioner is bases for the denial of petitioner's motion to dismiss and
imprecise because the NLRC did not rule on the propriety petition for annulment of judgment.
of finding petitioner liable to private respondents. It is
obvious from the assailed resolution that the petition for
Furthermore, petitioner did not submit the position paper of of the labor tribunals, petitioner argues that the Labor
private respondents where We can find their averments on Arbiter's decision is null and void as there was no
the employment relationship between them and petitioner determination of facts and evidence relative to his
or lack thereof. This omission not only rendered useless supposed liability to respondents; that he was not at any
the evaluation of the asseverations in the petition but also time the respondents' employer, but merely the owner-
gave Us another reason to dismiss this petition under lessor of the premises where Ewayan and his Oceanic
Section 3, Rule 46 of the Rules of Court. Petitioner is well- Travel and Tours Agency operated the RAF Mansion
aware that this pleading is material to the resolution of his Hotel where respondents were employed as hotel
petition and in neglecting to attach the same to his petition, staff; that the labor tribunals did not acquire
the same would warrant the dismissal of this petition. jurisdiction over him since the element of employer-
employee relationship was lacking; that he was
Lastly, the ultimate aim of petitioner is for Us to review the impleaded in the case only because respondents could no
findings of the labor arbiter on the employment relationship longer trace the whereabouts of their true employer,
between him and the private respondents. 'The basic issue Ewayan, who appears to have absconded - for which
of whether or not the NLRC has jurisdiction over the case reason respondents aim to unduly recover their claims
resolves itself into the question of whether an employer- from him; that the labor tribunals and the CA strictly applied
employee relationship existed' between them. 111us, it is the labor procedural laws and rules, when the rule in labor
an issue which necessitates presentation of evidence on cases is that technical rules of procedure are not binding
the part of petitioner and evaluation of the pieces of and must yield to the merits of the case and the interests
evidence of each party. Again, this is not proper in a of justice and due process; and that since the labor
petition for certiorari. tribunals did not have jurisdiction over him as he was not
at any given period the respondents' employer, their
decisions are a nullity.
WHEREEFORE, the petition is DISMISSED.

SO ORDERED.13 Respondents’ Arguments

In their Comment19 to the Petition, respondents argue that

Petitioner filed a motion for reconsideration, but the CA
denied the same via its October 28, 2014 Resolution. the Petition should be denied for lack of merit; that the CA's
Hence, the instant Petition, which includes a prayer for dispositions are just and correct; that the issue in this case
injunctive relief against execution of the judgment pending does not involve the merits of the labor arbiter's decision,
but merely the propriety of the NLRC’s dismissal of
appeal.
petitioner's petition for annulment of judgment; that
nonetheless, they have satisfactorily proved below that
On December 10, 2014 and January 12, 2015, the Court petitioner is their employer, by the evidence they submitted
issued Resolutions14 respectively granting temporary - consisting of identification cards (IDs) issued to them and
injunctive relief and issuing in favor of petitioner a signed by Ewayan, and pay envelopes and advise slips
Temporary Restraining Order15 upon filing of a cash or showing their salaries as the basis for their claims; that
surety bond. since petitioner owned the building which was a hotel, it
follows that he is their employer; that since he is their
In a November 9, 2015 Resolution,16 the Court resolved to employer, the labor arbiter acquired jurisdiction over him;
give due course to the Petition. and that since the decision of the labor arbiter on the merits
became final and executory for petitioner's failure to appeal
Issue the same, the same may no longer be impugned.

Petitioner frames the issue in this Petition thus - Our Ruling

Petitioner submits before this Honorable Court that the The Court grants the Petition.
Court of Appeals erred in affirming the findings of both the
labor arbiter and the NLRC and in concluding that they did All throughout the proceedings, petitioner has insisted that
not abuse their discretion and acted beyond their he was not the employer of respondents; that he did not
jurisdiction when they asserted their authorities and found hire the respondents, nor pay their salaries, nor exercise
petitioner DE ROCA solidarily liable with EWAYAN/ supervision or control over them, nor did he have the
OCEANIC TRAVEL AND TOUR AGENCY to private power to terminate their services. In support of his claim,
respondents, despite the patent lack of employer- he attached copies of a lease agreement - a Contract of
employee relationship between the petitioner and private Lease of a Building20 - executed by him and Oceanic Tours
respondents.17 and Travel Agency (Oceanic) represented by Ewayan
through his attorney-in- fact Marilou Buenafe. The
Petitioner’s Arguments agreement would show that petitioner was the owner of a
building called the RAF Mansion Hotel in Roxas Boulevard,
In his Petition and Reply18 seeking reversal of the assailed Baclaran, Parañaque City; that on September 25, 2007,
CA dispositions as well as the nullification of the decisions Oceanic agreed to lease the entire premises of RAF
Mansion Hotel, including the elevator, water pump, bolsters petitioner’s allegation that Ewayan had
airconditioning units, and existing furnishings and all items absconded and left respondents without recourse
found in the hotel and included in the inventory list attached other than to implead him as the "new management"
to the lease agreement, except for certain portions of the upon whom the obligation to settle the claims
building where petitioner conducted his personal business abandoned by Ewayan now fell.
and which were leased out to other occupants, including a
bank; that the lease would be for a period of five years, or "Contracts take effect only between the parties, their
from October 15, 2007 up to October 15, 2012; that the assigns and heirs, except in case where the lights and
monthly rental would be ₱450,000.00; and that all obligations arising from the contract are not
expenses, utilities, maintenance, and taxes - except real transmissible by their nature, or by stipulation or by
property truces - incurred and due on the leased building provision of law."23The contract of employment
would be for the lessee's account. between respondents, on the one hand, and Oceanic
and Ewayan on the other, is effective only between
Petitioner likewise attached to the instant Petition copies them; it does not extend to petitioner, who is not a
of: 1) a January 23, 2012 letter21 of demand to pay and party thereto. His only role is as lessor of the premises
vacate sent to Ewayan, directing the latter's attention to which Oceanic leased to operate as a hotel; he cannot
previous demand letters sent to him and making a final be deemed as respondent's employer - not even under
demand to pay rentals in arrears; and 2) a written waiver the pretext that he took over as the "new management"
and acknowledgment22 executed by respondents - except of the hotel operated by Oceanic. There simply is no
respondent Herminigildo Sabanate - and other Oceanic truth to such claim.
employees to the effect that petitioner should not be held
liable as owner of the premises for the "problems" caused Thus, to allow respondents to recover their monetary
by Ewayan. claims from petitioner would necessarily result in their
unjust enrichment.
Thus, it would appear from the fact on record and the
evidence that petitioner's building was an existing hotel There is unjust enrichment ‘when a person unjustly retains
called the "RAF Mansion Hotel", which Oceanic agreed to a benefit to the loss of another, or when a person retains
continue to operate under the same name. There is no money or property of another against the fundamental
connection between petitioner and Oceanic other than principles of justice, equity and good conscience.’ The
through the lease agreement executed by them; they are principle of unjust enrichment requires two conditions: (1)
not partners in the operation of RAF Mansion Hotel. It just that a person is benefited without a valid ba5is or
so happens that Oceanic decided to continue operating the justification, and (2) that such benefit is derived at the
hotel using the original name – "RAF Mansion Hotel". expense of another.

The only claim respondents have in resorting to implead The main objective of the principle against unjust
petitioner as a corespondent in the labor case is the fact enrichment is to prevent one from enriching himself at the
that he is the owner of the entire building called "RAF expense of another without just cause or consideration. x
Mansion Hotel" which happens to be the very same name x x24
of the hotel which Ewayan and Oceanic continued to
adopt, for reasons not evident in the pleadings. It must be "In rendering justice, courts have always been, as they
noted as well that when they originally filed the labor case, ought to be, conscientiously guided by the norm that on the
respondents did not include petitioner as respondent
balance, technicalities take a backseat against substantive
therein. It was only later on that they moved to amend their
rights, and not the other way around."25 In short,
complaint, impleading petitioner and thus amending the
substantive law outweighs procedural technicalities as in
title of the case to "x xx, Complainants, versus RAF
this case.
Mansion Hotel Old Management and New
Management/Victoriano Ewayan and Rolando De Roca,
Respondents." Indeed, where as here, there is a strong showing that
grave miscarriage of justice would result from the strict
application of the [r]ules, we will not hesitate to relax the
As correctly observed by petitioner, such belated attempt same in the interest of substantial justice. It bears stressing
to implead him in the labor case must be seen as an that the rules of procedure are merely tools designed to
afte1thought. Moreover, the fact that respondents
facilitate the attainment of justice. They were conceived
recognize petitioner as embodying the "new
and promulgated to effectively aid the court in the
management" of RAF Mansion Hotel betrays an
dispensation of justice. Courts are not slaves to or robots
admission on their part that he had no hand in the "old
of technical rules, shorn to be, conscientiously guided by
management" of the hotel under Ewayan, during
the norm that on the balance, technicalities take a
which they were hired and maintained as hotel
backseat against substantive rights, and not the other way
employees - meaning that petitioner was never
around. Thus, if the application of the rules would tend to
considered as Ewayan's partner and co-employer;
frustrate rather than promote justice. it is always within our
respondents merely viewing petitioner as the
power to suspend the rules, or except a particular case
subsequent manager taking over from Ewayan, which
from its operation.26
Taking this to mind, the labor tribunals and the CA should NESTLE PHILIPPINES, INC., Petitioner,
have considered petitioner’s repeated pleas to scrutinize vs.
the facts and particularly the lease agreement executed by BENNY A. PUEDAN, JR., JAYFER D. LIMBO,
him and Oceanic, which would naturally exculpate him BRODNEY N. AVILA, ARTHUR C. AQUINO, RYAN A.
from liability as this would prove the absence of an MIRANDA, RONALD R. ALAVE, JOHNNY A. DIMAYA,
employment relation between him and respondents. MARLON B. DELOS REYES, ANGELITO R. CORDOVA,
Instead, the case was determined on pure technicality EDGAR S. BARRUGA, CAMILO B. CORDOVA, JR.,
which in labor disputes, is not necessarily sanctioned – JEFFRY B. LANGUISAN, EDISON U. VILLAPANDO,
given that proceedings before the Labor Arbiter and the JHEIRNEY S. REMOLIN, MARY LUZ A.
NLRC are non-litigious in nature where they are MACATALAD,* JENALYN M. GAMUROT, DENNIS G.
encouraged to avail of all reasonable means to ascertain BAWAG, RAQUEL A. ABELLERA, and RICANDRO G.
the facts of the case without regard to technicalities of law GUATNO, JR., Respondents.
or procedure.27Petitioner's motion to dismiss, though
belated, should have been given due attention. DECISION

In arriving at the foregoing conclusions, the Court is guided PERLAS-BERNABE, J.:

by the allegations and arguments of the parties on the
existence of an employment relation between them, which Assailed in this petition for review on certiorari1are the
may be found in their pleadings - even at this stage. In Decision2 dated March 26, 2015 and the Resolution3 dated
particular, respondents squarely addressed the issue in September 17, 2015 of the Court of Appeals (CA) in CA-
their Comment to the herein Petition. On the other hand,
G.R. SP No. 132686, which affirmed the Decision4 dated
petitioner has consistently raised the issue and argued
May 30, 2013 and the Resolution5 dated August 30, 2013
against it all throughout. Since the issue was raised in the
of the National Labor Relations Commission (NLRC) in
Petition and adequately met by the respondents in their
LAC No. 02-000699-13/ NCR-03-04761-12, declaring
Comment thereto, the Court is not precluded from ruling petitioner Nestle Philippines, Inc. (NPI), jointly and
thereon. There is thus no need to remand the case to the
severally liable with Ocho de Septiembre, Inc. (ODSI) to
Labor Arbiter for further proceedings. Finally, this resolves
respondents Benny A. Puedan, Jr., Jayfer D. Limbo,
respondents' claim that the issue here involves only the
Brodney N. Avila, Arthur C. Aquino, Ryan A. Miranda,
propriety of the NLRC's dismissal of petitioner’s petition for
Ronald R. Alave, Johnny A. Dimaya, Marlon B. Delos
annulment of judgment; having argued against petitioner's Reyes, Angelita R. Cordova, Edgar S. Barruga, Camilo B.
claim of absence of an employment relation between them Cordova, Jr., Jeffry B. Languisan, Edison U. Villapando,
- and having presented documentary evidence below to
Jheirney S. Remolin, Mary Luz A. Macatalad, Jenalyn M.
prove their case against petitioner - the issue relative to
Gamurot, Dennis G. Bawag, Raquel A. Abellera, and
existence or non-existence of an employment relation is
Ricandro G. Guatno, Jr. (respondents) for separation pay,
ripe for adjudication before this Court.
nominal damages, and attorney's fees.

With the view taken of the case, it necessarily follows that The Facts
the decision of the Labor Arbiter must be set aside for
being grossly erroneous and unjust.1âwphi1 At worst, it is
null and void, and, as petitioner correctly put it, it is a The instant case arose from an
"lawless thing, which can be treated act an outlaw and slain amended6 complaint7 dated July 6, 2012 for illegal
at sight, or ignored wherever it exhibits its head."28 Being dismissal, damages, and attorney's fees filed by
of such nature, it could not have acquired finality, contrary respondents against, inter alia, ODSI and NPI.
to what respondents believe - as it "creates no rights and Respondents alleged that on various dates, ODSI and NPI
imposes no duties. Any act performed pursuant to it and hired them to sell various NPI products in the assigned
any claim emanating from it have no legal effect."29 covered area. After some time, respondents demanded
that they be considered regular employees of NPI, but they
were directed to sign contracts of employment with ODSI
WHEREFORE, the Petition is GRANTED. The June 19,
instead. When respondents refused to comply with such
2014 Decision and October 28, 2014 Resolution of the
directives, NPI and ODSI terminated them from their
Court of Appeals in CA-G.R. SP No. 127974
position. 8 Thus, they were constrained to file the
are REVERSED and SETASIDE. NLRC-NCR-Case No. complaint, claiming that: (a) ODSI is a labor-only
02-02490-12 is ordered DISMISSED, but only as against
contractor and, thus, they should be deemed regular
petitioner Rolando De Roca. employees of NPI; and (b) there was no just or authorized
cause for their dismissal.9
SO ORDERED.
For its part, ODSI averred that it is a company engaged in
the business of buying, selling, distributing, and marketing
of goods and commodities of every kind and it enters into
G.R. No. 220617 all kinds of contracts for the acquisition thereof. ODSI
admitted that on various dates, it hired respondents as its
employees and assigned them to execute the
Distributorship Agreement10 it entered with NPI, 11 the 3.10 Should NESTLE manufacture and/or distribute other
relevant portions of which state: products not subject of this Agreement, which, in
NESTLE's opinion, should likewise be extended to
3.1 DISTRIBUTOR (ODSI) shall assign a sales force in DISTRIBUTOR's outlets, such additional products shall be
his/her regular employ, dedicated solely to the handling of included among those listed in Annex "A" hereof.
NPI Grocery Retail Products under this Agreement, and
who shall exclusively cover assigned areas/channels of NESTLE shall deliver the Products to DISTRIBUTOR's
distribution. warehouse(s) at its own expenses. Immediately upon
receipt of the Products, DISTRIBUTOR shall carry out a
3.2 DISTRIBUTOR shall service the outlets within the visual inspection thereof. In the event any quantity of the
Territory by reselling Products obtained exclusively from Products is found to be defective upon such visual
Nestle Philippines, Inc. and not from any other source. inspection, NESTLE shall replace such quantity of the
Products at no cost to DISTRIBUTOR.
3.3 DISTRIBUTOR shall utilize booking and distribution
salesmen to 3.11 All costs for transportation and/or shipment of the
Products from DISTRIBUTOR's warehouse(s) to its
outlets/customers shall be the account of the
undertake territory development. Booking done by
DISTRIBUTOR shall be delivered by its personnel. DISTRIBUTOR. 12
Collection of accounts shall be taken cared (sic) of by
DISTRIBUTOR, without prejudice to the provisions of However, the business relationship between NPI and
Clause 13 hereof. ODSI turned sour when the former' s sales department
badgered the latter regarding the sales targets. Eventually,
3.4 DISTRIBUTOR's route salesmen shall exclusively NPI downsized its marketing and promotional support from
cover assigned ex-truck areas/channels of distribution. ODSI which resulted to business reverses and in the
latter's filing of a petition for corporate rehabilitation and,
subsequently, the closure of its Nestle unit due to the
3.5 DISTRIBUTOR shall also provide training to its staff or termination of the Distributorship Agreement and the
personnel where necessary, to improve operations in failure of rehabilitation. Under the foregoing
servicing the requirements of DISTRIBUTOR's customers. circumstances, ODSI argued that respondents were not
From time to time, NESTLE shall offer to DISTRIBUTOR dismissed but merely put in floating status. 13
suggestions and recommendations to improve sales and
to further develop the market.
On the other hand, NPI did not file any position paper or
appear in the scheduled conferences. 14
3.6 DISTRIBUTOR shall meet the sales, reach and
distribution targets agreed upon by NESTLE and
The Labor Arbiter Ruling
DISTRIBUTOR. For purposes of this clause, reach targets
refer to the number of stores, dealers and/or outlets which
DISTRIBUTOR should cover or service within a particular In a Decision15 dated December 28, 2012, the Labor
period. Distribution targets refer to the number of stock Arbiter (LA) dismissed the complaint for lack of merit, but
keeping units and/or product lines covered by this nevertheless, ordered, inter alia, ODSI and NPI to pay
Agreement. respondents nominal damages in the aggregate amount of
₱235,728.00 plus attorney's fees amounting to ten percent
(10%) of the total monetary awards. 16 The LA found that:
In the event of DISTRIBUTOR's failure to meet NESTLE's
sales targets, NESTLE has the sole discretion of assigning (a) respondents were unable to prove that they were NPI
employees; and (b) respondents were not illegally
another distributor of the Products and/or reducing the
dismissed as ODSI had indeed closed down its operations
Territory covered by DISTRIBUTOR.
due to business losses. 17 As to the issue on the failure to
give respondents a thirty (30)-day notice prior to such
3.7 DISTRIBUTOR agrees to provide at its own cost and closure, the LA concluded that all the impleaded
expense facilities and other resources necessary for the respondents therein (i.e., including NPI) should be held
distribution and sale of the Products. liable for the payment of nominal damages plus attorney's
fees. 18 Aggrieved, respondents appealed to the NLRC.19
3.8 NESTLE's sales personnel may get orders for the
Products distributed by DISTRIBUTOR and pass on the The NLRC Ruling
said orders to DISTRIBUTOR.
In a Decision20 dated May 30, 2013, the NLRC reversed
3.9 NESTLE shall provide the necessary promotional and and set aside the LA ruling and, accordingly, ordered ODSI
marketing support for the Products through promotional and NPI to pay each of the respondents: (a) separation pay
materials, product information literature, participation in amounting to Yi month pay for every year of service
trade fairs, and other market development activities. reckoned from the time they were employed until the
finality of the Decision; and (b) nominal damages in the
amount of ₱30,000.00. The NLRC likewise ordered NPI The CA Ruling
and ODSI to pay respondents attorney's fees amounting to
ten percent (10%) of the monetary awards.21 In a Decision32 dated March 26, 2015, the CA affirmed the
NLRC ruling. Anent the issue on due process, the CA held
Contrary to the LA's findings, the NLRC found that while that NPI was not deprived of its opportunity to be heard as
ODSI indeed shut down its operations, it failed to prove it was able to receive a copy of the complaint and other
that such closure was due to serious business losses as it pleadings, albeit it failed to respond thereto. 33 As regards
did not present evidence, e.g., financial statements, to the substantive issue, the CA ruled that despite ODSI and
corroborate its claims. As such, it ruled that respondents NPI's contract being denominated as a "Distributorship
are entitled to separation pay. In this relation, the NLRC Agreement," it contained provisions demonstrating a labor-
also found that since ODSI failed to notify respondents of only contracting arrangement between them, as well as
such closure, the latter are likewise entitled to nominal NPI' s exercise of control over the business of ODSI.
damages.22 Moreover, the CA pointed out that: (a) there was nothing in
the records which showed that ODSI had substantial
Further, the NLRC found ODSI to be a labor-only capital to undertake an independent business;
contractor of NPI, considering that: (a) ODSI had no and (b) respondents performed tasks essential to NPI's
substantial capitalization or investment; (b) respondents business.34Undaunted, NPI moved for
performed activities directly related to NPI's principal reconsideration, 35 which was, however, denied in a
business; and (c) the fact that respondents' employment Resolution36 dated September 17, 2015; hence, this
depended on the continuous supply of NPI products shows petition.
that ODSI had not been carrying an independent business
according to its own manner and method.23 The Issues Before the Court

Consequently, the NLRC deemed NPI to be respondents' The essential issues for the Court's resolution are whether
true employer, and thus, ordered it jointly and severally or not the CA correctly ruled that: (a) NPI was accorded
liable with ODSI to pay the monetary claims of due process by the tribunals a quo; and (b) ODSI is a
respondents. 24 labor-only contractor of NPI, and consequently, NPI is
respondents' true employer and, thus, deemed jointly and
Respondents moved for a partial severally liable with ODSI for respondents' monetary
reconsideration, 25 arguing that since it was only ODSI that claims.
closed down operations and not NPI and, considering the
finding that the latter was deemed to be their true The Court's Ruling
employer, NPI should reinstate them, or if not practicable,
to pay them separation pay equivalent to one (1) month To justify the grant of the extraordinary remedy
pay for every year of service. NPI also moved for of certiorari, the petitioner must satisfactorily show that the
reconsideration,26 contending that: (a) it was deprived of its court or quasi-judicial authority gravely abused the
right to participate in the proceedings before the LA and discretion conferred upon it. Grave abuse of discretion
the NLRC; and (b) it had no employer-employee connotes a capricious and whimsical exercise of judgment,
relationship with respondents as ODSI was never its done in a despotic manner by reason of passion or
contractor, whether independent or labor-only.27 However, personal hostility, the character of which being so patent
the NLRC denied both motions in a Resolution28dated and gross as to amount to an evasion of positive duty or to
August 30, 2013, holding that: (a) respondents' termination a virtual refusal to perform the duty enjoined by or to act at
was due to the closure of ODSI's Nestle unit, an authorized all in contemplation of law. 37
cause and, thus, the monetary awards in their favor were
proper; (b) NPI was not deprived of its right to participate
In labor disputes, grave abuse of discretion may be
in the proceedings as it was duly served with copies of the ascribed to the NLRC when, inter alia, its findings and
parties' respective pleadings, as well as the rulings of both
conclusions are not supported by substantial evidence, or
the LA and the NLRC; (c) assuming arguendo that NPI
that amount of relevant evidence which a reasonable mind
was indeed deprived of due process, its subsequent filing
might accept as adequate to justify a conclusion. 38
of a motion for reconsideration before the NLRC cured the
defect as it was able to argue its position in the said motion;
and (d) the circumstances surrounding the Distributorship Guided by the foregoing considerations, the Court finds
Agreement between ODSI and NPI showed that the former that the CA was correct in ruling that the labor tribunals a
is indeed a labor-only contractor of the latter. 29 quo gave NPI an opportunity to be heard. However, it erred
in not ascribing grave abuse of discretion on the NLRC's
finding that ODSI is a labor-only contractor of NPI and,
Dissatisfied, NPI filed a petition for certiorari30before the
thus, the latter is the respondents' true employer, and
CA, essentially insisting that: (a) it was deprived of due
jointly and severally liable with ODSI for respondents'
process before the tribunals a quo; and (b) there was no
monetary claims. As will be explained hereunder, such
employer-employee relationship between NPI and
finding by the NLRC is not supported by substantial
respondents. 31 Records reveal that no other party
evidence.
elevated the matter before the CA.
I. seek reconsideration of the action or ruling complained
of. 49
The observance of fairness in the conduct of any
investigation is at the very heart of procedural due process. Evidently, the foregoing shows that NPI was not denied
The essence of due process is to be heard, and, as applied due process of law as it was afforded the fair and
to administrative proceedings, this means a fair and reasonable opportunity to explain its side.
reasonable opportunity to explain one's side, or an
opportunity to seek a reconsideration of the action or ruling II.
complained of. Administrative due process cannot be fully
equated with due process in its strict judicial sense, for in
In holding NPI jointly and severally liable with ODSI for the
the former a formal or trial-type hearing is not always
monetary awards in favor of respondents, both the NLRC
necessary, and technical rules of procedure are not strictly
and the CA held that based on the provisions of the
applied.39 The Court's disquisition in Ledesma v. CA40is
Distributorship Agreement between them, ODSI is merely
instructive on this matter, to wit: a labor-only contractor of NPI. 50 In this regard, the CA
opined that the following stipulations of the said Agreement
Due process, as a constitutional precept, does not always evinces that NPI had control over the business of ODSI,
and in all situations require a trial-type proceeding. Due namely, that: (a) NPI shall offer to ODSI suggestions and
process is satisfied when a person is notified of the charge recommendations to improve sales and to further develop
against him and given an opportunity to explain or defend the market; (b) NPI prohibits ODSI from exporting its
himself. In administrative proceedings, the filing of charges products (the No-Export provision); (c) NPI provided
and giving reasonable opportunity for the person so standard requirements to ODSI for the warehousing and
charged to answer the accusations against him constitute inventory management of the sold goods;
the minimum requirements of due process. The essence and (d) prohibition imposed on ODSI to sell any other
of due process is simply to be heard, or as applied to products that directly compete with those of NPI.51
administrative proceedings, an opportunity to explain
ones side, or an opportunity to seek a reconsideration
However, a closer examination of the Distributorship
of the action or ruling complained of.41(Emphasis and
Agreement reveals that the relationship of NPI and ODSI
underscoring supplied)
is not that of a principal and a contractor (regardless of
whether labor-only or independent), but that of a seller and
In this case, NPI essentially claims that it was deprived of a buyer/re-seller. As stipulated in the Distributorship
its right to due process when it was not notified of the Agreement, NPI agreed to sell its products to ODSI at
proceedings before the LA and did not receive copies and discounted prices,52 which in turn will be re-sold to
issuances from the other parties and the LA, identified customers, ensuring in the process the integrity
respectively.42 However, as correctly pointed out by the and quality of the said products based on the standards
CA, NPI was furnished via courier of a copy of the agreed upon by the parties. 53 As aptly explained by NPI,
amended complaint filed by the respondents against it as the goods it manufactures are distributed to the market
shown by LBC Receipt No. 125158910840. 43 It is also through various distributors, e.g., ODSI, that in turn, re-sell
apparent that NPI was also furnished with the respondents' the same to designated outlets through its own employees
Position Paper, Reply, and Rejoinder.44 Verily, NPI was such as the respondents. Therefore, the reselling activities
indeed accorded due process, but as the LA mentioned, allegedly performed by the respondents properly pertain to
the former chose not to file any position paper or appear in ODSI, whose principal business consists of the "buying,
the scheduled conferences.45 selling, distributing, and marketing goods and commodities
of every kind" and "[entering] into all kinds of contracts for
Assuming arguendo that NPI was somehow deprived of the acquisition of such goods [and commodities]."54
due process
Thus, contrary to the CA's findings, the aforementioned
by either of the labor tribunals, such defect was cured stipulations in the Distributorship Agreement hardly
by: (a) NPI' s filing of its motion for reconsideration before demonstrate control on the part of NPI over the means and
the NLRC; (b) the NLRC's subsequent issuance of its methods by which ODSI performs its business, nor were
Resolution dated August 30, 2013 wherein the tribunal they intended to dictate how ODSI shall conduct its
considered all of NPI's arguments as contained in its business as a distributor. Otherwise stated, the stipulations
motion; and (c) NPI's subsequent elevation of the case to in the Distributorship Agreement do not operate to control
the CA. In Gonzales v. Civil Service Commission, 46 the or fix the methodology on how ODSI should do its business
Court reiterated the rule that "[a]ny seeming defect in [the] as a distributor of NPI products, but merely provide rules
observance [of due process] is cured by the filing of a of conduct or guidelines towards the achievement of a
motion for reconsideration," and that "denial of due mutually desired result55 - which in this case is the sale of
process cannot be successfully invoked by a party who NPI products to the end consumer. In Steelcase, Inc. v.
[was] afforded the opportunity to be heard x x Design International Selections, Inc., 56 the Court held that
x."47 Similarly, in Autencio v. Mañara,48it was held that the imposition of minimum standards concerning sales,
defects in procedural due process may be cured when the marketing, finance and operations are nothing more than
party has been afforded the opportunity to appeal or to
an exercise of sound business practice to increase sales SO ORDERED.
and maximize profits, to wit:

Finally, both the CA and DISI rely heavily on the Dealer

Performance Expectation required by Steelcase of its G.R. No. 197899
distributors to prove that DISI was not functioning
independently from Steelcase because the same imposed
JOAQUIN LU, Petitioner
certain conditions pertaining to business planning,
organizational structure, operational effectiveness and vs
efficiency, and financial stability. It is actually logical to TIRSO ENOPIA, ROBERTO ABANES, ALEJANDRE
expect that Steelcase, being one of the major BAGAS, SALVADOR BERNAL, SAMUEL CAHAYAG,
manufacturers of office systems furniture, would require its ALEJANDRO CAMPUGAN, RUPERTO CERNA, JR.,
dealers to meet several conditions for the grant and REYNALDO CERNA, PETER CERVANTES,
continuation of a distributorship agreement. The LEONARDO CO ND ES TABLE, ROLANDO ESLOPOR,
imposition of minimum standards concerning sales, ROLLY FERNANDEZ, EDDIE FLORES, ROLANDO
marketing, finance and operations is nothing more FLORES, JUDITO FUDOLIN, LEO GRAPANI, FELIX
than an exercise of sound business practice to HUBAHIB, JERRY JUAGPAO, MARCIANO LANUTAN,
increase sales and maximize profits for the benefit of JOVENTINO MATOBATO, ALFREDO MONIVA,
both Steelcase and its distributors. For as long as VICTORIANO ORTIZ, JR., RENALDO PIALAN,
these requirements do not impinge on a distributor's ALFREDO PRUCIA, PONCIANO REANDO, HERMENIO
independence, then there is nothing wrong with REMEGIO, DEMETRIO RUAYA, EDGARDO RUSIANA,
placing reasonable expectations on them. 57 (Emphasis NESTOR SALILI, VICENTE SASTRELLAS, ROMEO
and underscoring supplied) SUMAYANG, and DESIDERIO TABAY, Respondents

Verily, it was only reasonable for NPI - it being a local arm DECISION
of one of the largest manufacturers of foods and grocery
products worldwide - to require its distributors, such as PERALTA, J.:
ODSI, to meet various conditions for the grant and
continuation of a distributorship agreement for as long as Before us is a petition for review on certiorari filed by
these conditions do not control the means and methods on Joaquin Lu which seeks to reverse and set aside the
how ODSI does its distributorship business, as shown in Decision1dated October 22, 2010 and the
this case.1âwphi1 This is to ensure the integrity and quality Resolution2 dated May 12, 2011, respectively, of the Court
of the products which will ultimately fall into the hands of of Appeals issued in CA-G.R. SP No. 55486-MIN.
the end consumer.
The facts of the case, as stated by the Court of Appeals,
Thus, the foregoing circumstances show that ODSI was are as follows:
not a labor-only contractor of NPI; hence, the latter cannot
be deemed the true employer of respondents. As a Petitioners (now herein respondents) were hired from
consequence, NPI cannot be held jointly and severally January 20, 1994 to March 20, 1996 as crew members of
liable to ODSI's monetary obligations towards the fishing mother boat F/B MG-28 owned by respondent
respondents. Joaquin "Jake" Lu (herein petitioner Lu) who is the sole
proprietor of Mommy Gina Tuna Resources [MGTR] based
WHEREFORE, the petition is GRANTED. The Decision in General Santos City. Petitioners and Lu had an income-
dated March 26, 2015 and the Resolution dated sharing arrangement wherein 55% goes to Lu, 45% to the
September 17, 2015 of the Court of Appeals in CA-G.R. crew members, with an additional 4% as "backing
SP No. 132686 are hereby REVERSED and SET incentive." They also equally share the expenses for the
ASIDE. Accordingly, the Decision dated May 30, 2013 and maintenance and repair of the mother boat, and for the
the Resolution dated August 30, 2013 of the National purchase of nets, ropes and payaos.
Labor Relations Commission in LAC No. 02-000699-13/
NCR-03-04761-12 are MODIFIED, DELETING petitioner Sometime in August 1997, Lu proposed the signing of a
Nestle Philippines, Inc.'s solidary liability with Ocho de Joint Venture Fishing Agreement between them, but
Septiembre, Inc. (ODSI) for the latter's monetary petitioners refused to sign the same as they opposed the
obligations to respondents Benny A. Puedan, Jr., Jayfer D. one-year term provided in the agreement. According to
Limbo, Brodney N. Avila, Arthur C. Aquino, Ryan A. petitioners, during their dialogue on August 18, 1997, Lu
Miranda, Ronald R. Alave, Johnny A. Dimaya, Marlon B. terminated their services right there and then because of
Delos Reyes, Angelito R. Cordova, Edgar S. Barruga, their refusal to sign the agreement. On the other hand, Lu
Camilo B. Cordova, Jr., Jeffry B. Languisan, Edison U. alleged that the master fisherman (piado) Ruben Salili
Villapando, Jheimey S. Remolin, Mary Luz A. Macatalad, informed him that petitioners still refused to sign the
Jenalyn M. Gamurot, Dennis G. Bawag, Raquel A. agreement and have decided to return the vessel F/B MG-
Abellera, and Ricandro G. Guatno, Jr. 28.
On August 25, 1997, petitioners filed their complaint for recording of catches and ensure that the proper sharing
illegal dismissal, monetary claims and damages. Despite system was implemented; thus, all these did not mean
serious efforts made by Labor Arbiter (LA) Arturo P. supervision on how, when and where to fish.
Aponesto, the case was not amicably settled, except for
the following matters: (1) Balansi 8 and 9; (2) Respondents appealed to the National Labor Relations
10% piado share; (3) sud-anon refund; and (4) refund of Commission (NLRC), which affirmed the LA Decision in its
payment of motorcycle in the amount of ₱15,000.00. LA Resolution5 dated March 12, 1999. Respondents' motion
Aponesto further inhibited himself from the case out of for reconsideration was denied in a Resolution6 dated July
"delicadeza," and the case was raffled to LA Amado M. 9, 1999.
Solamo.
Respondents filed a petition for certiorari with the CA
In their Position Paper, petitioners alleged that their refusal which dismissed7 the same for having been filed beyond
to sign the Joint Venture Fishing Agreement is not a just the 60-day reglementary period as provided under Rule 65
cause for their termination. Petitioners also asked for a of the Rules of Court, and that the sworn certification of
refund of the amount of ₱8,700,407.70 that was taken out non-forum shopping was signed only by two (2) of the
of their 50% income share for the repair and maintenance respondents who had not shown any authority to sign in
of boat as well as the purchase of fishing materials, as Lu behalf of the other respondents. As their motion for
should not benefit from such deduction. reconsideration was denied, they went to Us via a petition
for certiorari assailing the dismissal which We granted in a
On the other hand, Lu denied having dismissed petitioners, Resolution8 dated July 31, 2006 and remanded the case to
claiming that their relationship was one of joint venture the CA for further proceedings.
where he provided the vessel and other fishing
paraphernalia, while petitioners, as industrial partners, Petitioner filed its Comment to the petition. The parties
provided labor by fishing in the high seas. Lu alleged that submitted their respective memoranda as required by the
there was no employer-employee relationship as its CA.
elements were not present, viz.: it was the piado who hired
petitioners; they were not paid wages but shares in the
On October 22, 2010, the CA rendered its assailed
catch, which they themselves determine; they were not
Decision reversing the NLRC, the decretal portion of which
subject to his discipline; and respondent had no control reads as follows:
over the day-to-day fishing operations, although they
stayed in contact through respondent's radio operator or
checker. Lu also claimed that petitioners should not be WHEREFORE, premises considered, the assailed March
reimbursed for their share in the expenses since it was 12, 1999 Resolution of public respondent National Labor
their joint venture that shouldered these expenses.3 Relations Commission (NLRC), Fifth Division, Cagayan de
Oro City, is hereby REVERSED and SET ASIDE, and a
new one is entered.
On June 30, 1998, the LA rendered a Decision4 dismissing
the case for lack of merit finding that there was no
employer-employee relationship existing between Thus, private respondent Mommy Gina Tuna Resources
petitioner and the respondents but a joint venture. (MGTR) thru its sole proprietor/general manager, Joaquin
T. Lu (Lu), is hereby ORDERED to pay each of the
petitioners, namely, TIRSO ENOPIA, ROBERTO
In so ruling, the LA found that: (1) respondents were not
ABANES, ALEJANDRE BAGAS, SALVADOR BERNAL,
hired by petitioner as the hiring was done by the piado or
master fisherman; (2) the earnings of the fishermen from
the labor were in the form of wages they earned based on SAMUEL CAHAYAG, ALEJANDRO CAMPUNGAN,
their respective shares; (3) they were never disciplined nor RUPERTO CERNA, JR., REYNALDO CERNA, PETER
sanctioned by the petitioner; and, (4) the income-sharing CERVANTES, LEONARDO CONDESTABLE, ROLANDO
and expense-splitting was no doubt a working set up in the ESLOPOR, ROLLY FERNANDEZ, EDDIE FLORES,
nature of an industrial partnership. While petitioner issued ROLANDO FLORES, JUDITO FUDOLIN, LEO GRAPANI,
memos, orders and directions, however, those who were FELIX HUBAHIB, JERRY JUAGPAO, MARCIANO
related more on the aspect of management and LANUTAN, JOVENTINO MATOBATO, ALFREDO
supervision of activities after the actual work was already MONIVA, VICTORIANO ORTIZ, JR., RENALDO PIALAN,
done for purposes of order in hauling and sorting of fishes, SEVERO PIALAN, ALFREDO PRUCIA, POCIANO
and thus, not in the nature of control as to the means and REANDO, HERMENIO REMEGIO, DEMETRIO RUAYA,
method by which the actual fishing operations were EDGARDO RUSIANA, NESTOR SALILI, RICHARD
conducted as the same was left to the hands of the master SALILI, SAMUEL SALILI, VICENTE SASTRELLAS,
fisherman. ROMEO SUMAYANG and DESIDERIO TABAY the
following:
The LA also ruled that the checker and the use of radio
were for the purpose of monitoring and supplying the (1) SEPARATION PAY (in lieu of the supposed
logistics requirements of the fishermen while in the sea; reinstatement) equivalent to one (1) month pay for every
and that the checkers were also tasked to monitor the year of service reckoned from the very moment each
petitioner was hired as fishermen-crew member II
of FIB MG-28 by MGTR until the finality of this judgment.
A fraction of at least six (6) months shall be considered one THE HONORABLE COURT OF APPEALS EXCEEDED
(l) whole year. Any fraction below six months shall be ITS JURISDICTION BY TREATING RESPONDENTS'
paid pro rata; PETITION FOR CERTIORARI UNDER RULE 65 AS AN
ORDINARY APPEAL, AND BY INSISTING ON ITS OWN
(2) FULL BACKWAGES (inclusive of all allowances and EVALUATION OF THE EVIDENCE.
other benefits required by law or their monetary equivalent)
computed from the time they were dismissed from III
employment on August 18, 1997 until finality of this
Judgment;
THE HONORABLE COURT OF APPEALS RENDERED
THE DECISION DATED 22 OCTOBER 2010 CONTRARY
(3) EXEMPLARY DAMAGES in the sum of Fifty Thousand TO LAW AND THE EVIDENCE ON RECORD.
Pesos (₱50,000.00);
IV
(4) ATTORNEY'S FEES equivalent to 10% of the total
monetary award. THE HONORABLE COURT OF APPEALS HAS
DEPARTED FROM THE ACCEPTED AND USUAL
Considering that a person's income or earning is his COURSE OF JUDICIAL PROCEEDINGS BY MAKING ITS
"lifeblood," so to speak, i.e., equivalent to life itself, this ASSAILED DECISION IMMEDIATELY EXECUTORY
Decision is deemed immediately executory pending PENDING APPEAL IN SPITE OF THE FACT THAT
appeal should MGTR decide to elevate this case to the RESPONDENTS DID NOT ASK FOR IMMEDIATE
Supreme Court. PAYMENT OF SEPARATION PAY AND OTHER CLAIMS,
AND DESPITE THE CLAIM OF RESPONDENTS THAT
Let this case be referred back to the Office of the Labor MOST OF THEM ARE CURRENTLY EMPLOYED IN
Arbiter for proper computation of the awards.9 OTHER DEEP-SEA FISHING COMPANIES.10

The CA found that petitioner exercised control over Petitioner contends that no grave abuse of discretion can
respondents based on the following: (1) respondents were be attributed to the NLRC's finding affirming that of the LA
the fishermen crew members of petitioner's fishing vessel, that the arrangement between petitioner and respondents
thus, their services to the latter were so indispensable and was a joint venture partnership; and that the CA, in
necessary that without them, petitioner's deep-sea fishing assuming the role of an appellate body, had re-examined
industry would not have come to existence much less the facts and re-evaluated the evidence thereby treating
fruition; (2) he had control over the entire fishing operations the case as an appeal instead of an original action
undertaken by the respondents through the master for certiorari under Rule 65.
fisherman (piado) and the assistant master
fisherman (assistant piado) employed by him; (3) We are not persuaded.
respondents were paid based on a percentage share of the
fish catch did not in any way affect their regular In Prince Transport, Inc. v. Garcia,11 We held:
employment status; and (4) petitioner had already invested
millions of pesos in its deep-sea fishing industry, hence, it
is highly improbable that he had no control over The power of the CA to review NLRC decisions via a
respondents' fishing operations. petition for certiorari under Rule 65 of the Rules of Court
has been settled as early as this Court's decision in St.
Martin Funeral Homes v. NLRC. In said case, the Court
Petitioner's motion for reconsideration was denied by the
held that the proper vehicle for such review is a special civil
CA in its Resolution dated May 12, 2011. action for certiorari under Rule 65 of the said Rules, and
that the case should be filed with the CA in strict
Aggrieved, petitioner filed the instant petition for review observance of the doctrine of hierarchy of courts.
on certiorari citing the following as reasons for granting the Moreover, it is already settled that under Section 9 of Batas
same, to wit: Pambansa Blg. 129, as amended by Republic Act No.
7902, the CA, pursuant to the exercise of its original
I jurisdiction over petitions for certiorari, is specifically given
the power to pass upon the evidence, if and when
THE HONORABLE COURT OF APPEALS RENDERED necessary, to resolve factual issues. Section 9 clearly
THE ASSAILED DECISION CONTRARY TO LAW AND states:
LOGIC BY CITING THE ABSENCE OF PROOF OF
REQUISITES OF A VALID DISMISSAL AS BASIS FOR xxxx
CONCLUDING THAT THE NLRC GRAVELY ABUSED
ITS DISCRETION. The Court of Appeals shall have the power to try cases and
conduct hearings, receive evidence and perform any and
all acts necessary to resolve factual issues raised in cases selection and engagement of the workers; (2) the power to
falling within its original and appellate jurisdiction, including control the worker's conduct; (3) the payment of wages by
the power to grant and conduct new trials or further whatever means; and (4) the power of dismissal.16 We find
proceedings.x x x. all these elements present in this case.

However, equally settled is the rule that factual findings of It is settled that no particular form of evidence is required
labor officials, who are deemed to have acquired expertise to prove the existence of an employer-employee
in matters within their jurisdiction, are generally accorded relationship. Any competent and relevant evidence to
not only respect but even finality by the courts when prove the relationship may be admitted.17
supported by substantial evidence, i.e., the amount of
relevant evidence which a reasonable mind might accept In this case, petitioner contends that it was the piado who
as adequate to justify a conclusion. But these findings are hired respondents, however, it was shown by the latter's
not infallible. When there is a showing that they were evidence that the employer stated in their Social Security
arrived at arbitrarily or in disregard of the evidence on System (SSS) online inquiry system printouts was MGTR,
record, they may be examined by the courts. The CA can which is owned by petitioner. We have gone over these
grant the petition for certiorari if it finds that the NLRC, in printouts and found that the date of the SSS remitted
its assailed decision or resolution, made a factual finding contributions coincided with the date of respondents'
not supported by substantial evidence. It is within the employment with petitioner. Petitioner failed to rebut such
jurisdiction of the CA, whose jurisdiction over labor cases evidence. Thus, the fact that petitioner had registered the
has been expanded to review the findings of the NLRC.12 respondents with SSS is proof that they were indeed his
employees. The coverage of the Social Security Law is
Here, the LA's factual findings was affirmed by the NLRC, predicated on the existence of an employer-employee
however, the CA found that the latter's resolution did not relationship.18
critically examine the facts and rationally assess the
evidence on hand, and thus found that the NLRC gravely Moreover, the records show that the 4% backing incentive
abused its discretion when it sustained the LA's decision fee which was divided among the fishermen engaged in
dismissing respondents' complaint for illegal dismissal on the fishing operations approved by petitioner was paid to
the ground of lack of merit. respondents after deducting the latter's respective vale or
cash advance.19 Notably, even the piado's name was
The judicial function of the CA in the exercise of written in the backing incentive fee sheet with the
its certiorari jurisdiction over the NLRC extends to the corresponding vale which was deducted from his incentive
careful review of the NLRC's evaluation of the evidence fee. If indeed a joint venture was agreed upon between
because the factual findings of the NLRC are accorded petitioner and respondents, why would these fishermen
great respect and finality only when they rest on substantial obtain vale or cash advance from petitioner and not from
evidence.13 Accordingly, the CA is not to be restrained the piado who allegedly hired and had control over them.
from revising or correcting such factual findings whenever
warranted by the circumstances simply because the NLRC It was established that petitioner exercised control over
is not infallible. Indeed, to deny to the CA this power is to respondents. It should be remembered that the control test
diminish its corrective jurisdiction through the writ merely calls for the existence of the right to control, and not
of certiorari.14 necessarily the exercise thereof. It is not essential that the
employer actually supervises the performance of duties by
The main issue for resolution is whether or not an the employee. It is enough that the former has a right to
employer-employee relationship existed between wield the power.20
petitioner and respondents.
Petitioner admitted in his pleadings that he had contact
At the outset, We reiterate the doctrine that the existence with respondents at sea via the former's radio operator and
of an employer-employee relationship is ultimately a their checker. He claimed that the use of the radio was only
question of fact. Generally, We do not review errors that for the purpose of receiving requisitions for the needs of
raise factual questions. However, when there is a conflict the fishermen in the high seas and to receive reports of fish
among the factual findings of the antecedent deciding catch so that they can then send service boats to haul the
bodies like the LA, the NLRC and the CA, it is proper, in same. However, such communication would establish that
the exercise of Our equity jurisdiction, to review and re- he was constantly monitoring or checking the progress of
evaluate the factual issues and to look into the records of respondents' fishing operations throughout the duration
the case and re-examine the questioned findings. In thereof, which showed their control and supervision over
dealing with factual issues in labor cases, substantial respondents' activities. Consequently, We give more
evidence or that amount of relevant evidence which a credence to respondents' allegations in their petition filed
reasonable mind might accept as adequate to justify a with the CA on how such control was exercised, to wit:
conclusion is sufficient.15
The private respondent (petitioner) controls the entire
In determining the existence of an employer-employee fishing operations. For each mother fishing boat, private
relationship, the following elements are considered: (1) the respondent assigned a master fisherman (pi ado) and
assistant master fisherman (assistant pi ado), who every services to MGTR are so indispensable and necessary that
now and then supervise the fishing operations. Private without them MGTR's deep-sea fishing industry would not
respondent also assigned a checker and assistant checker have come to existence, much less fruition. Thus, We do
based on the office to monitor and contact every now and not see any reason why the ruling of the Supreme Court
then the crew at sea through radio. The checker and in Ruga v. National Labor Relations Commission should
assistant checker advised then the private respondent of not apply squarely to the instant case, viz.:
the condition. Based on the report of the checker, the
private respondent, through radio, will then instruct the x x x The hiring of petitioners to perform work which is
"piado" how to conduct the fishing operations.21 necessary or desirable in the usual business or trade of
private respondent x x x [qualifies] them as regular
Such allegations are more in consonance with the fact that, employees within the meaning of Article 28025 of the Labor
as the CA found, MGTR had already invested millions of Code as they were indeed engaged to perform activities
pesos in its deep-sea fishing industry. usually necessary or desirable in the usual fishing
business or occupation of private respondent.26
The payment of respondents' wages based on the
percentage share of the fish catch would not be sufficient As respondents were petitioner's regular employees, they
to negate the employer-employee relationship existing are entitled to security of tenure under Section 3,27 Article
between them. As held in Ruga v. NLRC:22 XIII of the 1987 Constitution. It is also provided under
Article 279 of the Labor Code, that the right to security of
x x x [I]t must be noted that petitioners received tenure guarantees the right of employees to continue in
compensation on a percentage commission based on the their employment absent a just or authorized cause for
gross sale of the fish-catch, i.e., 13% of the proceeds of termination. Considering that respondents were
the sale if the total proceeds exceeded the cost of the petitioner's regular employees, the latter's act of asking
crude oil consumed during the fishing trip, otherwise, only them to sign the joint fishing venture agreement which
10% of the proceeds of the sale. Such compensation falls provides that the venture shall be for a period of one year
within the scope and meaning of the term "wage" as from the date of the agreement, subject to renewal upon
defined under Article 97(f) of the Labor Code, thus: mutual agreement of the parties, and may be pre-
terminated by any of the parties before the expiration of the
(f) "Wage" paid to any employee shall mean the one-year period, is violative of the former's security of
remuneration or earnings, however designated, capable of tenure. And respondents' termination based on their
refusal to sign the same, not being shown to be one of
being expressed in terms of money, whether fixed or
those just causes for termination under Article 282,28 is,
ascertained on a time, task, piece or commission basis, or
therefore, illegal.
other method of calculating the same, which is payable by
an employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for An employee who is unjustly dismissed from work shall be
services rendered or to be rendered, and included the fair entitled to reinstatement without loss of seniority rights and
and reasonable value, as determined by the Secretary of other privileges and to his full backwages, inclusive of
Labor, of board, lodging, or other facilities customarily allowances, and to his other benefits or their monetary
furnished by the employer to the employee. x x x23 equivalent computed from the time his compensation was
withheld from him up to the time of his actual
Petitioner wielded the power of dismissal over respondents reinstatement.29
when he dismissed them after they refused to sign the joint
fishing venture agreement. Respondents who were unjustly dismissed from work are
entitled to reinstatement and backwages, among others.
The primary standard for determining regular employment However, We agree with the CA that since most (if not all)
of the respondents are already employed in different deep-
is the reasonable connection between the particular
sea fishing companies, and considering the strained
activity performed by the employee in relation to the usual
relations between MGTR and the respondents,
trade or business of the employer.24 Respondents' jobs as
fishermen-crew members of FIB MG 28 were directly reinstatement is no longer viable. Thus, the CA correctly
related and necessary to petitioner's deep-sea fishing ordered the payment to each respondent his separation
business and they had been performing their job for more pay equivalent to one month for every year of service
reckoned from the time he was hired as fishermen-crew
than one year. We quote with approval what the CA said,
member of FIB MG-28 by MGTR until the finality of this
to wit:
judgment.
Indeed, it is not difficult to see the direct linkage or causal
connection between the nature of petitioners' (now The CA correctly found that respondents are entitled to the
respondents) work visa- vis MGTR's line of business. In payment of backwages from the time they were dismissed
until the finality of this decision.
fact, MGTR's line of business could not possibly exist, let
alone flourish without people like the fishermen crew
members of its fishing vessels who actually undertook the The CA's award of exemplary damages to each
fishing activities in the high seas.1âwphi1 Petitioners' respondent is likewise affirmed. Exemplary damages are
granted by way of example or correction for the public good On March 24, 2010, Valencia filed with the Labor Arbiter a
if the employer acted in a wanton, fraudulent, reckless, Complaint3 for Underpayment of Salary and Overtime Pay;
oppressive or malevolent manners.30 Non-Payment of Holiday Pay, Service Incentive Leave
Pay, 13th Month Pay; Regularization; Moral and Exemplary
We also agree with the CA that respondents are entitled to Damages; and, Attorney's Fees against respondents
attorney's fees in the amount of 10% of the total monetary Classique Vinyl Products Corporation (Classique Vinyl)
award.1âwphi1 It is settled that where an employee was and its owner Johnny Chang (Chang) and/or respondent
forced to litigate and, thus, incur expenses to protect his Cantingas Manpower Services (CMS). When Valencia,
rights and interest, the award of attorney's fees is legally however, asked permission from Chang to attend the
and morally justifiable.31 hearing in connection the said complaint on April 17, 2010,
the latter allegedly scolded him and told him not to report
for work anymore. Hence, Valencia amended his complaint
The legal interest shall be imposed on the monetary
awards herein granted at the rate of six percent (6%) per to include illegal dismissal.4
annum from the finality of this judgment until fully paid.32
In his Sinumpaang Salaysay, 5 Valencia alleged that he
applied for work with Classique Vinyl but was told by the
Petitioner's contention that there is no justification to
latter's personnel office to proceed to CMS, a local
incorporate in the CA decision the immediate execution
manpower agency, and therein submit the requirements
pending appeal of its decision is not persuasive. The
petition for certiorari filed with the CA contained a general for employment. Upon submission thereof, CMS made him
prayer for such other relief and remedies just and equitable sign a contract of employment6 but no copy of the same
was given to him. He then proceeded to Classique Vinyl
under the premises. And this general prayer is broad
for interview and thereafter started working for the
enough to justify extension of a remedy different from or
company in June 2005 as felitizer operator. Valencia
together with the specific remedy sought.33 Indeed, a court
claimed that he worked 12 hours a day from Monday to
may grant relief to a party, even if the party awarded did
not pray for it in his pleadings.34 Saturday and was receiving ₱187.52 for the first eight
hours and an overtime pay of ₱117.20 for the next four
hours, or beyond the then minimum wage mandated by
WHEREFORE, the petition for review law. Five months later, he was made to serve as extruder
on certiorari is DENIED. The Decision dated October 22, operator but without the corresponding increase in sa1aiy.
2010 and the Resolution dated May 12, 2011 of the Court He was neither paid his holiday pay, service incentive
of Appeals in CA-G.R. SP No. 55486-MIN are leave pay, and 13th month pay. Worse, premiums for
hereby AFFIRMED. The monetary awards which are Philhealth and Pag-IBIG Fund were not paid and his
herein granted shall earn legal interest at the rate of six monthly deductions for Social Security System (SSS)
percent (6%) per annum from the date of the finality of this premiums were not properly remitted. He was also being
Decision until fully paid. deducted the amounts of ₱100.00 and ₱60.00 a week for
Cash Bond and Agency Fee, respectively. Valencia
SO ORDERED. averred that his salary was paid on a weekly basis but his
pay slips neither bore the name of Classique Vinyl nor of
CMS; that all the machineries that he was using/operating
in connection with his work were all owned by Classique
Vinyl; and that his work was regularly supervised by
G.R. No. 206390
Classique Vinyl. He further averred that he worked for
Classique Vinyl for four years until his dismissal. Hence, by
JACK C. VALENCIA, Petitioner, operation of law, he had already attained the status of a
vs. regular employee of his true employer, Classique Vinyl,
CLASSIQUE VINYL PRODUCTS CORPORATION, since according to him, CMS is a mere labor-only
JOHNNY CHANG (Owner) and/or CANTINGAS contractor. Valencia, therefore, argued that Classique
MANPOWER SERVICES, Respondents. Vinyl should be held guilty of illegal dismissal for failing to
comply with the twin-notice requirement when it dismissed
DECISION him from the service and be made to pay for his monetary
claims.
DEL CASTILLO, J.:
Classique Vinyl, for its part, denied having hired Valencia
This Petition for Review on Certiorari assails the and instead pointed to CMS as the one who actually
December 5, 2012 Decision1 and March 18, 2013 selected, engaged, and contracted out Valencia's services.
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP It averred that CMS would only deploy Valencia to
No. 120999, which respectively denied the Petition Classique Vinyl whenever there was an urgent specific
for Certiorari filed therewith by petitioner Jack C. Valencia task or temporary work and these occasions took place
(Valencia) and the motion for reconsideration thereto. sometime in the years 2005, 2007, 2009 and 2010. It
stressed that Valencia's deployment to Classique Vinyl
Factual Antecedents was intermittent and limited to three to four months only in
each specific year. Classique Vinyl further contended that
Valencia's performance was exclusively and directly ranging from 3 months to 4 months for the years 2005,
supervised by CMS and that his wages and other benefits 2007, 2009 and 2010. Notably, no controverting evidence
were also paid by the said agency. It likewise denied was offered to dispute respondent [Classique Vinyl's]
dismissing Valencia from work and instead averred that on assertion.
April 16, 2010, while deployed with Classique Vinyl,
Valencia went on a prolonged absence from work for Obviously, [Valencia] was deployed by CMS to [Classique
reasons only known to him. In sum, Classique Vinyl Vinyl] for a fixed period.
asserted that there was no employer-employee
relationship between it and Valencia, hence, it could not In Pangilinan v. General Milling Corporation, G.R. No.
have illegally dismissed the latter nor can it be held liable
149329, July 12, 2004, the Supreme Court ruled that it
for Valencia's monetary claims. Even assuming that
does not necessarily follow that where the duties of the
Valencia is entitled to monetary benefits, Classique Vinyl
employee consist of activities usually necessary or
averred that it cannot be made to pay the same since it is
desirable in the usual business of the employer, the parties
an establishment regularly employing less than 10 are forbidden from agreeing on a period of time for the
workers. As such, it is exempted from paying the performance of such activities. There is thus nothing
prescribed wage orders in its area and other benefits under
essentially contradictory between a definite period of
the Labor Code. At any rate, Classique Vinyl insisted that
employment and the nature of the employee's duties.
Valencia's true employer was CMS, the latter being an
independent contractor as shown by the fact that it was
duly incorporated and registered not only with the Thus, even if respondent [Classique Vinyl] exercises full
Securities and Exhange Commission but also with the control and supervision over the activities perfom1ed by
Department of Labor and Employment; and, that it has [Valencia], the latter's employment cannot be considered
substantial capital or investment in connection with the as regular.
work performed and services rendered by its employees to
clients. Likewise, even if [Valencia] is considered the regular
employee of respondent CMS, the complaint for illegal
CMS, on the other hand, denied any employer-employee dismissal cannot prosper as [the] employment was not
relationship between it and Valencia. It contended that terminated by respondent CMS.
after it deployed Valencia to Classique Vinyl, it was already
the latter which exercised full control and supervision over On the other hand, there is no substantial evidence to
him. Also, Valencia's wages were paid by Classique Vinyl support
only that it was CMS which physically handed the same to
Valencia. [Valencia's] view that he was actually dismissed from his
employment by respondent [Classique Vinyl]. After all, it is
Ruling of the Labor Arbiter elementary that he who makes an affirmative allegation
has the burden of proof. On this score, [Valencia] failed to
On September 13, 2010, the Labor Arbiter issued a establish that he was actually dismissed from his job by
Decision,7 the pertinent portions of which read: respondent [Classique Vinyl], aside from his bare
allegation.
Is [Valencia] a regular employee of respondent (Classique
Vinyl]? With regard to underpayment of salary, respondent CMS
admitted that it received from respondent [Classique Vinyl]
the salary for [Valencia's] deployment. Respondent CMS
The Certificate of Business Name Registration issued by
never contested that the amount received was sufficient for
the Department of Trade and Industry dated 17 August the payment of [Valencia's] salary.
2007 and the Renewal of PRP A License No. M-08-03-269
for the period 29 August 2008 to 28 August 2010 issued by
the Regional Director of the National Capital Region of the Furthermore, respondent [Classique Vinyl] cannot be
Department of Labor and Employment [on the] 1st day of obliged to pay [Valencia's] overtime pay, holiday pay,
September 2008 are pieces of evidence to prove that service incentive leave and 13th month pay as well as the
respondent [CMS] is a legitimate Private Recruitment and alleged illegal deduction on the following grounds:
Placement Agency.
a) [Valencia] is not a rank-and-file employee of [Classique
Pursuant to its business objective, respondent CMS Vinyl];
entered into several Employment Contracts with
complainant Valencia as Contractual Employee for b) No proof was offered to establish that [Valencia] actually
deployment to respondent [Classique Vinyl], the last of rendered overtime services;
which was signed by [Valencia] on 06 February 2010.
c) [Valencia had] not [worked] continuously or even
The foregoing Employment Contract for a definite period intermittently for [one whole] (1) year[-]period during the
supports respondent [Classique Vinyl's] assertion that specific year of his deployment with respondent [Classique
[Valencia] was not hired continuously but intermittently Vinyl] to be entitled to service incentive leave pay.
d) [Valencia] failed to offer substantial evidence to prove they will not take against [Valencia] his numerous tardiness
that respondent [Classique Vinyl] illegally deducted from and absences at work and[;] his nonobservance of the
his sala.7 the alleged agency and cash bond. company rules,· The statement of [CMS] reads:

Moreover, as against respondent CMS[,] the record is Needless to say that [Valencia] in the course of his
bereft of factual basis for the exact computation of employment has incurred many infractions like tardiness
[Valencia's] money claims as it has remained and absences, non-observance of company rules, but
uncontroverted that [Valencia] was not deployed respondent [CMS], in reiteration will not take this
continuously neither with respondent [Classique Vinyl] up as leverage against [Valencia]. x x x
and/or to such other clientele.
Though [Valencia] worked in the premises of Classique
WHEREFORE, premises considered, judgment is hereby Vinyl x x x and that the [equipment] he used in the
rendered [d]ismissing the above-entitled case for lack of performance of his work was provided by the between
merit and/or factual basis [Valencia] and Classique Vinyl x x x in view of the foregoing
circumstances earlier reflected. Besides, as articulated by
SO ORDERED,8 jurisprudence, the power of control does not require actual
exercise of the power but the power to wield that power x
Ruling of the National Labor Relations Commission x x.

With the foregoing chain of events, it is evident that

Valencia promptly appealed to the National Labor
[Valencia] is an employee of respondent [CMS].
Relations Commission (NLRC). Applying the four-fold test,
the NLRC, however, declared CMS as Valencia's
employer in its Resolution9 dated April 14, 2011, viz.: x x x x10

In Order to determine the existence of an employer- Accordingly, the NLRC held that there is no basis for
employee relationship, the following yardstick had been Valencia to hold Classique Vinyl liable for his alleged illegal
consistently applied: (l) the selection and engagement; (2) dismissal as well as for his money claims. Hence, the
payment of wages; (3) power of dismissal and; (4) the NLRC dismissed Valencia's appeal and affirmed the
power to control the employee[']s conduct. decision of the Labor Arbiter.

In this case, [Valencia] admitted that he applied for work Valencia's motion for reconsideration thereto was likewise
with respondent [CMS] x x x. Upon the acceptance of his denied for lack of merit in the Resolution11 dated June 8,
application, he was made to sign an employment contract 2011.
x x x. [Valencia] also admitted that he received his wages
from respondent [CMS] x x x. As a matter of fact, Ruling of the Court of Appeals
respondent [CMS] argued that [Valencia] was given a non-
cash wage in the approximate amount of Php3,000.00 x x When Valencia sought recourse from the CA, the said
x. court rendered a Decision12 dated December 5, 2012
denying his Petition for Certiorari and affirming the ruling
Notably, it is explicitly stated in the employment contract of of the NLRC.
[Valencia] that he is required to observe all the rules and
regulations of the company as well as [the] lawful Valencia's motion for reconsideration was likewise denied
instructions of the management during his employment. in a Resolution 13 dated March 18, 2013.
That failure to do so would cause the termination of his
employment contract. The pertinent provision of the Hence, this Petition for Review on Certiorari imputing upon
contract reads:
the CA the following errors:

2. The employee shall observe all the rules and regulations

WITH DUE RESPECT, IT IS A SERIOUS ERROR WHICH
of the company during the period of employment and [the]
CONSTITUTE[S] GRAVE ABUSE OF DISCRETION
lawful instructions of the management or its
AMOUNTING TO LACK OR IN EXCESS OF
representatives. Failure to do so or if performance is below
JURISDICTION ON THE PART OF THE HONORABLE
company standards, management [has] the right to
COURT OF APPEALS TO HAVE RULED THAT
immediatelycancel this contract. x x x
PETITIONER IS AN EMPLOYEE OF CMS AND
FURTHER RULED THAT HE IS NOT ENTITLED TO HIS
The fact that [Vale1icia] was subjected to such restriction MONETARY CLAIMS.
is an evident exercise of the power of control over
[Valencia]. WITH DUE RESPECT, THE HONORABLE COURT OF
APPEALS['] DECISION AND RESOLUTION ARE
The power of control of respondent [CMS] over Valencia CONTRARY TO LAW AND WELL-SETTLED RULE.14
was further bolstered by the declaration of the former that
Valencia points out that the CA, in ruling that he was an facts and will not review the factual findings of the lower
employee of CMS, relied heavily on the employment tribunals as these are generally binding and
contract which the latter caused him to sign. He argues, conclusive."'19 While there are recognized
however, that the said contract deserves scant exceptions,20 none of them applies in this case.
consideration since aside from being improperly filled up
(there were many portions without entries), the same was Even if otherwise, the Court is not inclined to depart from
not notarized. Valencia likewise stresses that ti.11e burden the uniform findings of the Labor Arbiter, the NLRC and the
of proving that CMS is a legitimate job contractor lies with CA.
respondents. Here, neither Classique Vinyl nor CMS was
able to present proof that the latter has substantial capital
"It is an oft-repeated rule that in labor cases, as in other
to do business as to be considered a legitimate
administrative and quasi-judicial proceedings, 'the
independent contractor. Hence, CMS is presumed to be a
quantum of proof necessary is substantial evidence, or
mere labor-only contractor and Classique Vinyl, as CMS'
such amount of relevant evidence which a reasonable
principal, was Valencia's true employer. As to his alleged mind might accept as adequate to justify a conclusion.’
dismissal, Valencia argues that respondents failed to ‘The burden of proof rests upon the party who asserts the
establish just or authorized cause, thus, his dismissal was
affirmative of an issue’."21 Since it is Valencia here who is
illegal. Anent his monetary claims, Valencia invokes the
claiming to be an employee of Classique Vinyl, it is thus
principle that he who pleads payment has the burden of
incumbent upon him to proffer evidence to prove the
proving it. Since respondents failed to present even a
existence of employer-employee relationship between
single piece of evidence that he has been paid his labor them. He "needs to show by substantial evidence that he
standards benefits, he believes that he is entitled to was indeed an employee of the company against which he
recover them from respondents who must be held jointly
claims illegal dismissal."22 Corollary, the burden to prove
and severally liable for the same. Further, Valencia
the elements of an employer-employee
contends that respondents should be assessed moral and relationship, viz.: (1) the selection and engagement of the
exemplary damages for circumventing pertinent labor laws employee; (2) the payment of wages; (3) the power of
by preventing him from attaining regular employment dismissal; and (4) the power of control, lies upon Valencia.
status. Lastly, for having been compelled to engage the
services of counsel, Valencia claims that he is likewise
entitled to attorney's fees. Indeed, there is no hard and fast rule designed to establish
the aforementioned elements of employer-employee
relationship.23 "Any competent and relevant evidence to
For their part, respondents Classique Vinyl and Chang prove the relationship may be admitted."24 In this case,
point out that the issues raised by Valencia involve
however, Valencia failed to present competent evidence,
questions of fact which are not within the ambit of a petition
documentary or otherwise, to support his claimed
for review on certiorari. Besides, findings of facts of the
employer-employee relationship between him and
labor tribunals when affirmed by the CA are generally
Classique Vinyl. All he advanced were mere factual
binding on this Court. At any rate, the said respondents assertions unsupported by proof.
reiterate the argun1ents they raised before the labor
tribunals and the CA.
In fact, most of Valencia's allegations even militate against
his claim that Classique Vinyl was his true employer. For
With respect to respondent CMS, the Court dispensed with one, Valencia stated in his Sinumpaang Salaysay that his
the filing of its comment15 when the resolution requiring it application was actually received and processed by CMS
to file one was returned to the Court unserved 16 and after which required him to submit the necessary requirements
Valencia informed the Court that per Certification 17 of the
for employment. Upon submission thereof, it was CMS that
Office of the Treasurer of Valenzuela City where CMS's
caused him to sign an employment contract, which upon
office was located, the latter had already closed down its
perusal, is actually a contract between him and CMS. It
business on March 21, 2012. was only after he was engaged as a contractual employee
of CMS that he was deployed to Classique Vinyl. Clearly,
Our Ruling Valencia's selection and engagement was undertaken by
CMS and conversely, this negates the existence of such
There is no merit in the Petition. element insofar as Classique Vinyl is concerned. It bears
to state, in addition, that as opposed to Valencia's
The core issue here is whether there exists an employer- argument, the lack of notarization of the said employment
employee relationship between Classique Vinyl and contract did not adversely affect its veracity and
Valencia. Needless to state, it is from the said effectiveness since significantly, Valencia does not deny
detennination that the other issues raised, i.e., whether having signed the same.25 The CA, therefore, did not err in
Valencia was illegally dismissed by Classique Vinyl and relying on the said employment contract in its
whether the latter is liable for his monetary claims, hinge. determination of the merits of this case. For another,
However, as correctly pointed out by Classique Vinyl, "[t]he Valencia himself acknowledged that the pay slips 26 he
issue of whether or not an employer-employee relationship submitted do not bear the name of Classique Vinyl. While
existed between [Valencia] and [Classique Vinyl] is the Court in Vinoya v. National Labor Relations
essentially a question of fact." 18 "The Court is not a trier of Commission27took judicial notice of the practice of
employer to course through the purported contractor the the latter is responsible to the employees of the labor-only
act of paying wages to evade liabilities under the Labor contractor as if such employees had been directly
Code, hence, the non-appearance of employer's name in employed by the principal employer. The principal
the pay slip, the Court is not inclined to rule that such is the employer therefore becomes solidarily liable with the labor-
case here. This is conside1ing that although CMS claimed only contractor for all the rightful claims of the
in its supplemental Position Paper/Comment that the employees."35 The facts of this case, however, failed to
money it used to pay Valencia's wages came from establish that there is any circumvention of labor laws as
Classique Vinyl,28 the same is a mere allegation without to call for the creation by the statute of an employer-
proof Moreover, such allegation is inconsistent with CMS's employee relationship between Classique Vinyl and
earlier assertion in its Position Paper29 that Valencia Valencia. In fact, even as against CMS, Valencia's money
received from it non-cash wages in an approximate claims has been debunked by the labor tribunals and the
amount of ₱3,000.00. A clear showing of the element of CA. Again, the Court is not inclined to disturb the same.
payment of wages by Classique Vinyl is therefore absent.
In view of the above disquisition, the Court finds no
Aside from the afore-mentioned inconsistent allegations of necessity to dwell on the issue of whether Valencia was
Valencia, his claim that his work was supervised by illegally dismissed by Classique Vinyl and whether the
Classique Vinyl does not hold water. Again, the Court finds latter is liable for Valencia's money claims.
the same as a self-serving assertion unworthy of credence.
On the other hand, the employment contract which WHEREFORE, the Petition for Review
Valencia signed with CMS categorically states that the on Certiorari is DENIED. 'The assailed December 5, 2012
latter possessed not only the power of control but also of Decision and March 18, 2013 Resolution of the Court of
dismissal over him, viz.: Appeals in CA-G.R. SP No. 120999 are AFFIRMED.

xxxx SO ORDERED.

2. That the employee shall observe all rules and

regulations of the company during the period of
employment and [the] lawful instructions of the
management or its representatives. Failure to do so or if
performance is below company standards, management
[has] the right to immediately cancel this contract.

x x x x30

Clearly, therefore, no error can be attributed on the part of

the labor tribunals and the CA in ruling out the existence of
employer-employee relationship between Valencia and
Classique Vinyl.

Further, the Court finds untenable Valencia's argument

that neither Classique Vinyl nor CMS was able to present
proof that the latter is a legitimate independent contractor
and therefore, unable to rebut the presumption that a
contractor is presumed to be a labor-only contractor.
"Genera1ly, the presumption is that the contractor is a
labor-only [contractor] unless such contractor overcomes
the burden of proving that it has the substantial capital,
investment, tools and the lik.e."31 Here, to prove that CMS
was a legitimate contractor, Classique Vinyl presented the
former's Certificate of Registration32 with the Department
of Trade and Industry and, License33 as private recruitment
and placement agency from the Department of Labor and
Employment. Indeed, these documents are not conclusive
evidence of the status of CMS as a contractor. However,
such fact of registration of CMS prevented the legal
presumption of it being a mere labor-only contractor from
arising.34 In any event, it must be stressed that "in labor-
only contracting, the statute creates an employer-
employee relationship for a comprehensive purpose: to
prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and