Title
Algon Engineering Construction Corp. vs. National Labor Relations Commission
Case
G.R. No. 83402
Decision Date
Oct 6, 1997
Algon challenged NLRC's ruling that Espinosa was its employee, not just a lessor, based on control evidence; SC upheld NLRC, affirming employer-employee relationship and awarded Espinosa P21,113.41.
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Case Digest (G.R. No. 83402)

Facts:

  1. Background of the Case
    Petitioners Algon Engineering Construction Corporation (Algon) and Alex Gonzales filed a petition for certiorari challenging the Resolutions of the National Labor Relations Commission (NLRC) dated April 21, 1987, and March 24, 1988. The NLRC affirmed the Labor Arbiter's decision, which found that private respondent Jose Espinosa was an employee of Algon and awarded him P21,113.41 for underpaid wages and other monetary claims under labor standards laws.

  2. Nature of Algon's Business
    Algon is engaged in road construction and utilizes heavy equipment. To minimize costs, Algon entered into lease contracts with property owners near construction sites to park and store its equipment. Private respondent Espinosa's house was near the Lucena-Talacogon Project site, and Algon leased his property for this purpose, paying a bi-monthly storage fee of P300.00.

  3. Espinosa's Claim
    Espinosa claimed that aside from the lease agreement, he was employed by Algon as a watchman, guarding the equipment from 6:00 PM to 6:00 AM. He alleged he was paid P20.00 daily and was forced to resign when his shift was changed to daytime.

  4. Labor Arbiter's Findings
    The Labor Arbiter found that Espinosa was indeed employed as a watchman by Algon. This conclusion was based on a memorandum dated August 13, 1983, issued by Algon's General Construction Foreman, Emigdio L. Manlegro, which held Espinosa accountable for the loss of four batteries due to gross negligence. The memorandum referred to Espinosa as a watchman and indicated control over his conduct, a key element in establishing an employer-employee relationship.

  5. NLRC's Decision
    The NLRC affirmed the Labor Arbiter's decision, ruling that the memorandum and other evidence, such as cash vouchers showing payments for storage fees at multiple locations, supported the existence of an employer-employee relationship. The NLRC dismissed Algon's appeal and denied its motion for reconsideration.

Issue:

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Ruling:

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Ratio:

  1. Existence of Employer-Employee Relationship
    The Court applied the four-fold test to determine the existence of an employer-employee relationship: (a) selection and engagement of the employee, (b) payment of wages, (c) power of dismissal, and (d) the employer's power to control the employee's conduct. The control test is the most crucial element, and the memorandum issued by Algon's foreman demonstrated that Algon exercised control over Espinosa's duties as a watchman.

  2. Credibility of Evidence
    The Court found the August 13, 1983, memorandum to be credible evidence of an employer-employee relationship. The memorandum not only referred to Espinosa as a watchman but also held him accountable for the loss of company property under company rules and regulations, further establishing Algon's control over Espinosa.

  3. Review of Factual Findings
    The Court reiterated that factual findings of labor agencies, such as the NLRC, are generally binding and will not be disturbed unless there is a showing of lack of jurisdiction or grave abuse of discretion. In this case, the NLRC's findings were supported by substantial evidence, and the Court found no reason to overturn them.

  4. Monetary Claims
    The Court upheld the Labor Arbiter's award of P21,113.41 to Espinosa, as the existence of an employer-employee relationship entitled him to the monetary claims under applicable labor laws.


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