G.R. No. 78693 - Cielo vs. National Labor Relations Commission

Petitioner: Zosimo Cielo, a truck driver.
Respondents: Henry Lei and/or Henry Lei Trucking Company, a private trucking firm.

A written agreement was executed on June 30, 1984, between Henry Lei (as the owner and first party) and Zosimo Cielo (as the second party).
The agreement provided that:

The term was fixed at six (6) months with the possibility of early termination at the option of either party.
Net income from the cargo truck after fuel and oil expenses was to be divided on a 90/10 basis in favor of the first party.
There was an explicit stipulation declaring that no employer-employee relationship existed between the parties; the relationship was purely contractual.
The petitioner was responsible for any loss or damage to the truck and was to return the unit in its received condition (except for fair wear and tear) upon the contract’s termination or expiration.

Although the contract was set to run until December 31, 1984, the petitioner was formally notified on December 22, 1984, of the termination of his services, on the ground of the contractual expiration.
The petitioner contended that he had begun work on June 16, 1984, and by working for more than six months, he had acquired the status of a regular employee, entitling him to security of tenure and other benefits under the Labor Code.
Additionally, the petitioner alleged that his dismissal was connected with his refusal to sign an affidavit—which stated that he acknowledged receipt of his salary and allowances—that he was compelled to sign by the private respondent.

The Labor Arbiter initially found in favor of the petitioner, ordering his reinstatement with back wages.
On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision, holding that the petitioner’s employment had expired under the binding short-term contract.
The petitioner then elevated the case to the Supreme Court on certiorari under Rule 65, where issues of timeliness (petition filed within a “reasonable period” of three months) and the substance of the contractual relationship were raised.

The Court required the production of the agreement for proper examination; however, the petitioner claimed he did not have a copy, and the private respondent could not initially locate the file.
The complete records, including the said agreement, were eventually received on October 15, 1990, from the NLRC’s Cagayan de Oro regional office.
The content of the agreement and the separate affidavit revealed a scheme where the respondent intended to avoid compliance with the Labor Code by labeling employment as contractual rather than regular, despite operating a continuous trucking service for the Philippine Packing Corporation.

The private respondent maintained that the parties’ relations were governed by the contractual stipulations, purposely excluding the application of labor laws.
Evidence showed that all drivers employed by the trucking company were hired on fixed-term contracts with similar provisions, aimed at evading labor protections such as security of tenure, minimum wage, and benefits.
The petitioner's refusal to sign the affidavit was presented by the respondent as an act of disrespect or insubordination, which they argued impacted the renewal of his contract.
However, the petitioner’s stance was that his refusal was a protection against an unwitting waiver of statutory rights as provided under the Labor Code.

Whether the agreement, which purported to define the petitioner as an independent contractor with a fixed-term contract, can override the substantive protections afforded to regular employees under the Labor Code.

Specifically, did the agreement’s stipulation of “no employer-employee relationship” effectively nullify the actual nature of the petitioner’s work engagement?

Whether the petitioner, despite the existence of a fixed-term contract, attained the status of a regular employee by virtue of performing functions necessary to the respondent’s main business operations.

In particular, whether working continuously for more than six months in a role essential to the trucking company’s operations qualifies him as a regular employee under Article 280 of the Labor Code.

The validity and implications of the affidavit requirement by the private respondent, which allegedly forced the petitioner to waive his statutory rights.

Did the affidavit serve as a deceptive device to secure unjust waiver of employment benefits and protections?