Title
David vs. Macasio
Case
G.R. No. 195466
Decision Date
Jul 2, 2014
Worker paid on task basis entitled to holiday and SIL pay but not 13th month pay, as employer-employee relationship confirmed despite task-based payment.

Case Summary (G.R. No. 195466)

Key Dates and Procedural Posture

Labor Arbiter decision: April 30, 2009 (dismissal of monetary claims). NLRC decision: May 26, 2010 (affirmed LA). CA decision: November 22, 2010 (reversed NLRC in part). CA resolution denying reconsideration: January 31, 2011. Petition for review to the Supreme Court culminated in the contested Supreme Court resolution.

Claims and Factual Allegations

Respondent Macasio sued for nonpayment of overtime, holiday pay, 13th month pay, service incentive leave (SIL), and moral/exemplary damages and attorney’s fees. He alleged employment as a butcher since January 6, 1995 (a certificate later reflected an erroneous 2000 date), daily reporting, employer-set schedules, daily fixed remuneration which increased over time, employer ownership of hogs and work tools, and employer control over leaves and work assignments.

Petitioner’s Defense and Factual Assertions

Petitioner David claimed a pakyaw (task) basis engagement, denied an employer-employee relationship, asserted business commencement in 2005 and a smaller workforce, and maintained that Macasio was paid P700.00 per engagement irrespective of hours worked and only when hogs were delivered. David produced sworn statements by co-workers to corroborate the task-basis arrangement and argued that task-basis payment excludes entitlement to the contested benefits under implementing rules.

Labor Arbiter and NLRC Findings

The Labor Arbiter dismissed Macasio’s monetary claims, accepting that he was engaged on a pakyaw/task basis and therefore not entitled to overtime, holiday, SIL and 13th month pay. The NLRC affirmed, reasoning that Macasio performed non-time work and was paid by result (fixed P700 per task), placing him outside the coverage of the Labor Standards on overtime, SIL, holiday pay and the implementing rules for 13th month pay.

Court of Appeals Ruling

The Court of Appeals found grave abuse of discretion in the NLRC’s denial because it failed to determine whether the pakyaw/task worker was also a “field personnel.” Applying Serrano and related precedent, the CA held that task-basis payment alone does not automatically exclude entitlement to holiday and SIL — exclusion applies when the worker is a field personnel whose hours cannot be determined with reasonable certainty. The CA awarded holiday, SIL and 13th month pay (for three years) and 10% attorney’s fees, but denied moral and exemplary damages.

Issues Presented to the Supreme Court

The core legal issue reviewed under Rule 45 (Rule 65 context below CA) was whether the CA correctly found that the NLRC gravely abused its discretion by denying the monetary claims merely because respondent was paid on a non-time (pakyaw) basis, without determining whether he was a field personnel exempted from Title I benefits; and whether the CA correctly awarded holiday, SIL and 13th month pay.

Jurisdictional and Procedural Limits on Review

The Supreme Court emphasized the limited scope of a Rule 45 petition reviewing a CA decision rendered under Rule 65: it examines legal errors in the CA’s determination of whether the NLRC gravely abused its discretion, not a de novo factual review of the merits. The Court relied on Montoya v. Transmed and related authorities to frame the review as primarily legal in nature, while recognizing that some factual findings binding on the Court are those affirmed by the CA and supported by evidence.

Legal Standards — Employment Relationship and the Four-Fold/Control Tests

To establish employer-employee relationship the Court applied the four-fold test (selection/engagement, payment of wages, power of dismissal, power to control). The control test is dispositive: the key inquiry is whether the employer has the right or opportunity to control not only the result but the means and methods of accomplishment. Economic-dependence indicia were also noted as reinforcing employment status. The Court reiterated that method of payment (pakyaw/task) is a method of calculating wages and does not, by itself, negate an employment relationship (Article 97(6); Article 101).

Supreme Court Finding on Employment Relationship

Applying the four-fold test and control indicators to the proven facts, the Supreme Court concluded that an employer-employee relationship existed: David engaged Macasio; paid him wages (P700 per engagement confirmed by parties and witnesses); set reporting days and times; controlled assignments and the workplace (rented premises); and had the right and opportunity to supervise performance. Economic dependence factors (work integral to business, repeated engagements, regular reporting and advances) further supported employment status.

Supreme Court Finding on Nature of Engagement: Pakyaw/Task Basis

All tribunals (LA, NLRC, CA) had factually found that Macasio was paid on a pakyaw/task basis — a fixed amount for completing a task irrespective of time spent — and the Supreme Court accepted this factual finding as binding because it was supported by the record.

Applicable Law on Holiday Pay and Service Incentive Leave (SIL)

Article 82 (coverage) and Articles 94–95 (holiday and SIL pay) of the Labor Code and the IRR are the governing provisions. Article 82 lists exclusions including field personnel and workers “paid by results as determined by the Secretary of Labor.” The IRR’s provisions on holiday and SIL expressly exclude “field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis.” The Court examined statutory text, the IRR, and controlling jurisprudence (Cebu Institute of Technology, Autobus, Serrano) and applied ejusdem generis: general terms such as “those who are engaged on task or contract basis” must be read in relation to the particular term “field personnel.”

Interpretation and Jurisprudential Rule Applied to Holiday and SIL

The Court reaffirmed established jurisprudence that being paid on a task/pakyaw basis alone is insufficient to exclude a worker from holiday and SIL benefits. Exclusion requires that the worker qualify as “field personnel” — i.e., perform duties away from principal place of business and have actual hours that cannot be determined with reasonable certainty, or otherwise be an employee whose time and performance are unsupervised. The IRR was interpreted as validly qualifying the Article 82 exclusion; Serrano, Cebu Institute and Autobus were cited to support that task-basis payment must be read in conjunction with the field-personnel concept.

Application to Facts — Holiday and SIL Entitlement

Applying the field-personnel test, the Supreme Court agreed with the CA that Macasio was not a field personnel: he regularly worked at the principal place of business, his hours were ascertainable (start around 10:00 p.m.), and David supervised his time and performance. Consequently, despite the pakyaw/task payment method, Macasio was entitled to holiday and SIL pay. The NLRC’s dismissal of those claims solely on the pakyaw payment method was held to be a grave abuse of discretion.

Applicable Law on 13th Month Pay and Governing Distinction

PD No. 851 and its implementing rules govern 13th month pay. The implementing rules explicitly exempt under Section 3(e) “employers of those who are

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