Case Summary (G.R. No. 192282)
Key Dates and Procedural Posture
Relevant filings and adjudications: respondents filed an initial complaint on February 8, 2007 and amended it on March 15, 2007. Labor Arbiter issued a decision dismissing the complaint (August 15, 2007); the NLRC, Sixth Division affirmed (July 29, 2008), denying reconsideration. The Court of Appeals reversed and ordered relief for respondents (January 6, 2010; denial of reconsideration May 13, 2010). The present petition for review on certiorari under Rule 45 challenges the CA rulings.
Applicable Law and Constitutional Basis
Governing constitutional provision: 1987 Constitution, Article XIII (labor rights and security of tenure). Governing statutory provisions: Labor Code Articles 279 (security of tenure) and 280 (regular and casual employment), Omnibus Rules implementing the Labor Code (Notice of Dismissal, Sec. 2, Rule XIV, Book V), and relevant implementing rules on holiday pay, service incentive leave (Articles 94–95 and their IRR), and Presidential Decree No. 851 and its Rules for 13th month pay. Jurisprudential standards cited include control test and precedents on pakyaw/task basis workers.
Factual Background
Respondents claim they worked long hours (Monday–Saturday, 7:00 a.m. to 10:00 p.m.) without overtime and other monetary benefits; petitioners characterize respondents as pakyaw workers paid per job and allege disciplinary problems (drinking, quarrels) and occasional contracting out when respondents failed to finish orders. Petitioners presented a five-month contract (dated February 3, 2007) proposing contractual employment on piece-rate terms and excluding entitlement to leave, 13th month pay and bonuses; respondents refused to sign, and they allege they were told on March 15, 2007 to stop reporting to work.
Procedural History and Claims
Respondents initially filed money claims and (erroneously checked) illegal dismissal in their complaint. After the encounter on March 15, 2007, they amended to assert illegal dismissal plus nonpayment of wages, overtime, holiday pay, service incentive leave pay, and 13th month pay. The Labor Arbiter dismissed the complaint for lack of merit; NLRC affirmed, holding no proof of termination and that pakyaw workers are not entitled to the monetary claims asserted. The CA reversed, declaring illegal dismissal and ordering backwages, separation pay and other monetary benefits; this Supreme Court review evaluates whether the CA correctly found grave abuse of discretion by the NLRC.
Standard of Review under Rule 45
A Rule 45 petition is limited generally to questions of law and whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision. The Court recognizes the usual bar against reappreciation of factual evidence on Rule 45, but where NLRC and CA factual findings conflict materially, a limited review of the evidence is warranted to determine whether the CA correctly concluded that the NLRC committed grave abuse.
Determination Whether Employment Was Terminated
The Court examined the record and found the CA’s conclusion—that petitioners terminated respondents’ employment—substantiated. The chronology shows respondents filed a complaint on February 8, 2007 after being offered the five-month contract; when summoned on March 15, 2007, respondents were presented the contract and, upon refusing to sign, were told to go home and not report for work. Petitioners’ contemporaneous position paper claims a proposal of contractual terms that would be more beneficial, but the contract itself explicitly excluded leave and 13th month benefits—contradicting petitioners’ characterization. Petitioners did not prove a just cause for dismissal, did not conduct a disciplinary investigation, and did not afford respondents a chance to explain. Because the employer bears the burden of proving just and valid cause and due process in terminations, petitioners’ failure to do so supports the CA’s finding of illegal dismissal.
Employment Status: Pakyaw Workers and the Control Test
Although respondents were paid on a per-piece (pakyaw) basis, the Court applied Article 280 and the control test to determine employment status. Article 280 treats as regular those engaged to perform activities necessary to the employer’s business; an employee who rendered at least one year is deemed regular with respect to the activity. The control test—existence of employer’s right to control manner and details of work—was satisfied: respondents performed core tasks (carpentry, mascilla, rubbing, painting) necessary to casket manufacture, reported at the workplace, used production logs checked by petitioners, and were subject to petitioner’s instructions. The Court thus held pakyaw workers who are under the employer’s control are regular employees and entitled to security of tenure.
Security of Tenure and Due Process Violations
As regular employees, respondents were protected by Article 279 and the constitutional guarantee of security of tenure. Petitioners failed to serve written notice of dismissal specifying acts or omissions constituting grounds for termination and failed to observe procedural due process. The absence of written notice and lack of investigatory procedure violated the employees’ right to due process; hence dismissal (as found) was unjustified and illegal.
Remedies: Reinstatement, Backwages, and Separation Pay in Lieu
Article 279 entitles an unjustly dismissed regular employee to reinstatement without loss of seniority and to full backwages and other benefits. The Court affirmed the CA’s holding that respondents were entitled to reinstatement and backwages but recognized practical limitations: respondents filed their complaint in 2007, and nine years had lapsed—this period was deemed substantial, making reinstatement impractical. Consistent with jurisprudence, the Court allowed separation pay in lieu of reinstatement: separation pay computed at one month’s pay per year of ser
...continue readingCase Syllabus (G.R. No. 192282)
Court, Case Number, and Dates
- Reported at 796 Phil. 597, Third Division, G.R. No. 192282.
- Decision date listed at the top as October 05, 2016; judgment notice records that the original decision was received by the Office on November 8, 2016 at 3:30 p.m.
- Petition for Review on Certiorari under Rule 45 of the Rules of Court from the Court of Appeals decision in CA-G.R. SP No. 106965.
Parties
- Petitioners: A. Nate Casket Maker and/or Armando and Anely Nate (owners/proprietors).
- Respondents (original complainants below): Elias V. Arango, Edwin M. Mapusao, Jorge C. Cariao, Jermie Mapusao, Wilson A. Nate, Edgar A. Nate, Michael A. Montales, Celso A. Nate, Benjes A. Llona, and Allan A. Montales.
Relief Sought Before the Supreme Court
- Petitioners sought reversal of the Court of Appeals Decision dated January 6, 2010, and its Resolution dated May 13, 2010, which had reversed and set aside the NLRC Decision dated July 29, 2008 and ordered respondents to be declared illegally dismissed and to be paid backwages, separation pay and other monetary benefits.
- Issues raised in petition: (1) whether the Court of Appeals committed grave abuse of discretion in declaring complainants were illegally dismissed; and (2) alleged serious errors in findings of fact by the CA.
Procedural History — Trial Court to CA
- Labor Arbiter (LA) Eduardo J. Carpio issued a Decision on August 15, 2007 dismissing respondents' complaint for illegal dismissal, underpayment of wages, and non-payment of overtime pay, holiday pay, service incentive leave pay, and 13th month pay, for lack of merit.
- LA recognized respondents as pakyaw workers deemed regular employees but ruled petitioners did not terminate respondents’ services.
- LA held respondents earned more than minimum wage; as pakyaw workers they were not entitled to overtime, holiday pay, SIL pay, and 13th month pay, citing analogies to field personnel and purely commission basis workers.
- National Labor Relations Commission (NLRC), Sixth Division affirmed the LA Decision on July 29, 2008, finding no substantial evidence of termination and reiterating that pakyaw workers are not entitled to money claims because work depends on availability of job orders; no proof of overtime rendered.
- Respondents filed a petition for certiorari with the Court of Appeals (CA). CA reversed and set aside the NLRC decision in its January 6, 2010 Decision, declaring petitioners to have illegally dismissed respondents and ordering payment of backwages, separation pay and other monetary benefits, directing the Labor Arbiter to conduct further proceedings to determine amounts of backwages and separation pay.
- Petitioners’ motion for reconsideration to the CA was denied by Resolution dated May 13, 2010.
- Petitioners elevated the case to the Supreme Court via Rule 45 Petition for Review on Certiorari.
Factual Background
- Petitioners are owners/proprietors of A. Nate Casket Maker, operating a casket-making business.
- Respondents were employed at various dates beginning in 1998 as carpenters, mascilladors (mascilla?), and painters until alleged termination in March 2007.
- Respondents were described as "stay-in" workers with free board and lodging.
- Petitioners characterized respondents as pakyaw workers paid per job order; submitted job orders for caskets dated February 1–8, 2007 as evidence.
- Petitioners alleged respondents habitually drank and quarreled, causing failure to complete job orders on time and forcing petitioners to contract out work.
- On February 3, 2007 petitioners presented a proposed employment agreement changing from pakyaw to contractual basis and allegedly offering vacation and sick leave and other benefits to regular employees (petitioners claimed proposal was more beneficial).
- Respondents alleged long workdays from Monday to Saturday, 7:00 a.m. to 10:00 p.m., without overtime pay or other monetary benefits despite claims.
- On March 15, 2007 respondents were called to petitioners' office and were made to sign a Contract of Employment; respondents allege that upon refusal to sign, petitioners told them to go home because their employment was terminated.
- Respondents filed their original complaint on February 8, 2007 for money claims and later amended on March 15, 2007 to include illegal dismissal and monetary claims.
The Contract of Employment (reproduced in the record)
- Dated February 3, 2007, captioned "A. NATE CASKET MAKER CONTRACT OF EMPLOYMENT."
- Terms expressly stated:
- Employment on a 5-month contract basis, renewable on a case-to-case basis based on performance/efficiency.
- Company reserves right to discontinue or terminate employment anytime if performance does not meet expectations or original conditions no longer exist.
- Remuneration on per item/piece basis (per casket made).
- Obligation to strictly follow work schedules.
- During employment, employees shall not be eligible to earn or receive sick leave pay, vacation leave pay, 13th month pay, bonuses, or other benefits given to regular employees.
- Contract governed by existing and future company policies.
- The contract bore signatures of proprietors (Mr. and Mrs. Armando and Anely Nate) and an acknowledgment by the employee that he/she accepted the contract and was oriented to company policies; dated February 3, 2007 according to the record.
Parties’ Contentions at Supreme Court Level (as reflected in filings)
- Petitioners admitted respondents’ regular employment status at various points but insisted that they never dismissed respondents; they argued employment was coterminous with job orders because business depended on availability of job orders, and being pakyaw workers paid by result, respondents were not entitled to money claims.
- Respondents contended that issues raised by petitioners in the Rule 45 petition were primarily questions of fact and that only questions of law may be raised in a Rule 45 petition.
Standard of Review — Rule 45 and Scope
- Rule 45 petitions are limited to questions of law; in labor cases the Court reviews whether the Court of Appeals correctly determined the presence or absence of grave abuse of discretion by the NLRC.
- The Supreme Court emphasized that in a Rule 45 review, it must assess whether the CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision, not whether the NLRC decision on merits was correct.
- Cited authorities: Career Philippines Shipmanagement, Inc. v. Serna and Montoya v. Transmed Manila Corp. for parameters of review.
Admission to Review Evidence on Record
- Although Rule 45 normally bars re-appreciation of facts, the Court found review of the evidence compelling and proper due to conflicting factual findings between the NLRC and the CA.
- The Court therefore examined factual matters: whether respondents’ employment was terminated and whether pakyaw workers who are considered regular are entitled to overtime, holiday, SIL pay and 13th month pay.
Court’s Findings on Termination and Due Process
- The CA and Supreme Court found petitioners did terminate respondents’ employment.
- Respondents