G.R. No. 121605 - Jo vs. National Labor Relations Commission

In 1970, petitioners Paz Martin Jo and Cesar Jo acquired the Dinaas Barber Shop from owner Dina Tan.
Upon acquisition, all employees of the shop, including private respondent Peter Mejila, were absorbed by the new owners.
The name of the establishment was later changed to Windfield Barber Shop.
The earnings of the shop were shared between the barbers and the owners: the barbers received two‐thirds (2/3) of the fee per haircut or shaving service rendered, while one‐third (1/3) went to the owners.

In 1977, petitioners designated private respondent to serve as caretaker after the previous caretaker became physically unfit.
As caretaker, in addition to his regular barber duties, private respondent had specific responsibilities:

To report malfunctions in the airconditioning units and interruptions in water or electrical supply.
To coordinate with the laundry woman for washing dirty linen.
To recommend applicants for interview and hiring, subject to petitioners’ final decision.
To attend to other operational needs of the shop.

For these additional responsibilities, he was compensated with an honorarium equivalent to one‐third (1/3) of the shop’s net income.

In 1986, following the demolition of the building housing the shop, petitioners relocated the business to a nearby rented place and reopened it as Cesaras Palace Barbershop and Massage Clinic.
At the new location, private respondent continued his dual roles as barber and caretaker.
His compensation as caretaker was adjusted to a fixed monthly honorarium with the following schedule:

In November 1992, an altercation broke out between private respondent and his co-barber, Jorge Tinoy, resulting in constant personal insults during working hours.
Private respondent reported the dispute to Atty. Allan Macaraya of the labor department, prompting a conference involving the petitioners and a mediation effort led by petitioners’ counsel, Atty. Prudencio Abragan.
During mediation, despite assurances that his status as caretaker-barber was secure, private respondent demanded several thousand pesos as separation pay and other monetary benefits.
After a subsequent conference set by Atty. Abragan—which private respondent failed to attend—he nevertheless continued to report for work.
On January 2, 1993, private respondent turned over the duplicate keys of the shop to the cashier and removed all his personal belongings.
Shortly thereafter, on January 8, 1993, he began working as a regular barber at Goldilocks Barbershop in Iligan City.
On January 12, 1993, private respondent filed a complaint for illegal dismissal, seeking separation pay, other monetary benefits, attorney’s fees, and damages, notably without praying for reinstatement.

Private respondent was indeed an employee of petitioners.
He was not dismissed but left his job voluntarily due to personal differences with a co-worker.
The complaint was dismissed, though petitioners were ordered to pay his 13th month pay and attorney’s fees.

The National Labor Relations Commission (NLRC), in its November 21, 1994 decision, set aside the Labor Arbiter’s judgment.

The NLRC sustained the finding of an employer-employee relationship.
It ruled that private respondent was illegally dismissed, ordering petitioners to reinstate him or, alternatively, to pay backwages, separation pay, 13th month pay (calculated only on his caretaker compensation), and attorney’s fees.

Petitioners’ subsequent motion for reconsideration was denied in a Resolution dated June 7, 1995, leading them to file the present petition for certiorari challenging the NLRC’s decision.

Whether private respondent was truly an employee of petitioners or merely a “partner in trade” compensated on a commission-sharing basis.

Whether private respondent was illegally dismissed by petitioners or rather abandoned his job voluntarily.