Title
Geraldo vs. The Bill Sender Corp.
Case
G.R. No. 222219
Decision Date
Oct 3, 2018
Delivery worker paid per-piece for 14 years ruled regular employee; illegally dismissed without due process, awarded backwages and benefits, but company president absolved of personal liability.
illegal dismissal
due process
monetary claims
A

Case Summary (G.R. No. 222219)

Factual Background

Geraldo was engaged as a delivery/messenger man to deliver bills for the company’s client, the Philippine Long Distance Telephone Company (PLDT). He was paid on a “per-piece basis,” meaning the amount of his compensation depended on the number of bills he delivered.

Geraldo’s complaint alleged that on August 7, 2011, the company’s operations manager, Mr. Nicolas Constantino, suddenly informed him that his employment was being terminated because he allegedly failed to deliver certain bills. Geraldo asserted that he was not assigned to deliver the particular bills, and although he sought reconsideration, the manager proceeded with his termination. He maintained that the termination was illegal for lack of the required due process and sought that the company and Ms. Cando be held liable for his monetary claims.

The Company’s Version of Events

The company countered that Geraldo was not a full-time employee but only a piece-rate worker who reported for work “as he pleased.” It claimed that messengers could transfer from one company to another, and that bills would be assigned to other messengers if a messenger did not report. It further asserted that Geraldo was not illegally dismissed because it was Geraldo who abandoned his job when he no longer reported for work, and thus Geraldo bore the burden to substantiate his claim of illegal dismissal.

Labor Arbiter Proceedings and Ruling

On November 29, 2012, the LA ruled against the company. It held that, notwithstanding the company’s assertion, the burden of proving that dismissal is for just cause rests on the employer pursuant to Article 277(b) of the Labor Code, without distinction whether the employer admits or denies the dismissal. The LA also found that Geraldo was a regular employee because he performed work that was usually necessary and desirable to the company’s business of delivering bills and other mail matters. Even assuming the work was not continuous or was intermittent, the LA held that Geraldo’s repeated performance for more than a year demonstrated the necessity, if not indispensability, of his work.

The LA rejected the company’s claims that Geraldo was employed elsewhere and that he abandoned his job, finding that the company failed to substantiate those assertions. Even on the assumption that abandonment occurred, the LA ruled that the company still needed to follow the twin-notice requirement mandated by Sections 2 and 5, Book V, Rule XIV of the Labor Code.

Having found illegal dismissal, the LA ordered the company to pay separation pay, service incentive leave pay, and attorney’s fees, in the aggregate amount of P352,214.13.

NLRC Review

In a decision dated May 9, 2013, the National Labor Relations Commission (NLRC) affirmed the LA’s ruling. It clarified that computation of backwages must run from the time of dismissal up to the finality of the NLRC decision. The NLRC found that the company failed to discharge its burden to prove the employee’s deliberate and unjustified refusal to resume employment and failed to comply with the twin-notice requirement. It also rejected the abandonment theory, reasoning that Geraldo’s filing of the complaint after seven (7) months from the alleged dismissal did not constitute a material indicium of abandonment because the lapse of time, given the applicable period, was not decisive.

Court of Appeals Ruling and Reconsideration

On August 7, 2014, the CA set aside the NLRC decision. It reasoned that because Geraldo was paid on a per-piece basis, he was hired on a per-result basis and thus was not an employee of the company. The CA also emphasized that messengers habitually transferred between companies depending on the availability of mail matters. On this view, there was allegedly no basis to award separation pay, backwages, thirteenth month pay, service incentive leave pay, and attorney’s fees.

On September 28, 2015, the CA denied Geraldo’s motion for reconsideration.

Issues Raised in the Petition

Geraldo then filed a Rule 45 petition on November 26, 2015. He argued, among others, that the CA gravely abused its discretion in dismissing his complaint based on the premise that being paid per piece meant that he was not an employee and therefore not entitled to security of tenure. He also contended that the CA disregarded factual and legal bases for the awards of backwages, separation pay, service incentive leave, thirteenth month pay, and attorney’s fees. Finally, he claimed that Ms. Cando, as president, should be held liable for his monetary claims due to alleged bad faith in the termination of his employment and deprivation of benefits.

Existence of Regular Employment: Applicable Standards

The Supreme Court treated the illegality of dismissal as dependent on the nature of Geraldo’s relationship with the company. It relied on Article 280 of the Labor Code, which defines a regular employee as one engaged to perform activities necessary or desirable to the employer’s usual business or trade, and also includes casual employees who have rendered at least one year of service with respect to the activity for which they are employed.

The Court reiterated the test established in Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission, namely, that the determination of regularity turns on the reasonable connection between the employee’s activity and the employer’s usual business or trade. It further stated that when the employee has performed the work for at least one year, even if intermittent, the law deems the repeated and continuing need for that activity as evidence of necessity or indispensability.

Regular Employee Status Despite Piece-Rate Compensation

Applying those standards, the Court found it undisputed that the company was engaged in delivering bills and other mail matters and that Geraldo was employed as a delivery/messenger to deliver bills for the company’s clients. It held that the company could not deny that Geraldo performed activities necessary or desirable to its business because its fundamental purpose—delivery of bills—could not be accomplished without messengers like him.

The Court also found that even if the company treated Geraldo as non-full-time, his employment still qualified as regular given the duration of performance. It counted the years from Geraldo’s engagement on June 20, 1997 up to his services’ termination on August 7, 2011, concluding that he delivered mail matters for the company for more than fourteen (14) years. It explained that while length of time is not the sole controlling criterion, it is vital in establishing whether the tasks performed are necessary and indispensable to the employer’s business.

The Court rejected the CA’s approach that per-piece payment disproved employee status. It held that payment on a piece-rate basis does not negate regular employment, citing Hacienda Leddy/Ricardo Gamboa, Jr. v. Villegas. It emphasized that the statutory concept of “wage” under Article 97 of the Labor Code is broad and covers remuneration expressed on a time, task, piece, or commission basis. Payment by piece was characterized as merely a method of compensation that does not define the essence of the relationship. The Court also stressed that regularity is determined not by the employer’s will or the manner of salary payment, but by the nature of the activities performed in relation to the business, considering all circumstances and, where relevant, the duration of performance.

Illegal Dismissal: Burden on the Employer and Failure to Prove Abandonment

Having found that Geraldo was a regular employee entitled to security of tenure, the Court held that the company had to prove that his termination complied with legal requirements. It relied on settled rules in illegal dismissal cases that the burden of proof rests on the employer to show just and valid cause.

The Court found that the company’s abandonment allegation was unsupported. It held that apart from a self-serving claim, the company failed to present proof of overt acts showing Geraldo’s intention to abandon his work. It restated the doctrine that abandonment requires proof of a deliberate and unjustified refusal to resume employment and an unequivocal intent to discontinue work. It explained that mere absence is insufficient; the absence must be accompanied by manifest acts clearly pointing to the employee’s desire not to work anymore.

The Court further reasoned that Geraldo’s filing of the illegal dismissal complaint negated any intent to sever his employment. It noted that the records showed he even sought permission to return to work, but the company rejected that request. It also held that the seven (7) months between the alleged dismissal and the complaint was not a material indication of abandonment because the complaint was filed within the reasonable period in the three (3)-year timeframe provided under Article 291 of the Labor Code, citing Padilla Machine Shop, et al. v. Javilgas.

Due Process Violation: Failure of the Twin-Notice Requirement

In addition to lack of just and valid cause, the Court found that the dismissal also failed to observe the required procedural due process. It reiterated that termination requires two written notices: the notice informing the employee of the specific acts or omissions for which dismissal is sought, and a subsequent notice informing him of the employer’s decision to dismiss.

The Court held that the company failed to show compliance with the twin-notice rule. It noted that the company’s own Comment admitted failure to serve any written notices and attempted to rely on the claim that oral notice could be considered substantial compliance. The Court rejected this approach and concluded that Geraldo’s dismissal was illegal due to both substantive and procedural infirmities.

Monetary Awards and Regular Employee Entitlements

Because Geraldo was determined to be a regular employee illegally dismissed without just cause and without the re

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