Title
Masing and Sons Development Corp. vs. Rogelio
Case
G.R. No. 161787
Decision Date
Jul 27, 2011
A laborer claimed continuous employment despite SSS retirement, seeking benefits. Court ruled in his favor, affirming employer-employee relationship and entitlement to retirement pay.
labor benefits
underpayment of wages
retirement benefits

Case Summary (G.R. No. 161787)

Factual Background

Rogelio alleged that he had worked continuously as a laborer at the Ibajay, Aklan branch of a copra-related business that belonged to the Chan family enterprise. He traced the business’s evolution from Pan Phil. Copra Dealer to Yao Mun Tek, then to Aklan Lumber and General Merchandise, and finally to MSDC in 1984, with managers changing over time. He further alleged that Crispin Chan took over managerial responsibility in 1990, and that he worked in the Ibajay branch together with other employees.

Rogelio stated that he was first reported for SSS coverage in January 1974 and, after paying contributions for more than ten years, became entitled to SSS retirement benefits. In 1991, he claimed that to facilitate approval of those SSS benefits, he entered into an internal arrangement with Chan and MSDC: MSDC would issue a certification of separation from employment, even though he would supposedly continue working as a laborer in Ibajay. The certification dated August 10, 1991 stated that Rogelio was “officially separated” effective July 1, 1989.

Rogelio claimed that his last salary was paid on March 17, 1997, and that Lim, the Ibajay branch manager, later informed him that he was deemed retired as of that date, while Chan allegedly confirmed that he had reached compulsory retirement age after he verified his status at the main office. Rogelio then commenced his labor claims, asserting that despite the supposed separation, he did not receive thirteenth month pay, service incentive leave, premium pay for holidays and rest days, COLA, and retirement benefits from MSDC at the time of his retirement in March 1997.

To support his claim that he continued working for the Chan enterprise up to March 17, 1997, Rogelio submitted sworn affidavits of co-workers—Domingo Guevarra, Juanito Palomata, and Ambrosio Seneres—dated January 19, 1998. They stated, in substance, that they were employed by MSDC’s predecessor in the 1950s to work in the Ibajay branch, and that MSDC and Chan continuously employed them until their respective retirements. They also declared that they did not receive retirement benefits from Chan and MSDC upon retirement. They corroborated the managers’ identities and the continuity of employment as narrated by Rogelio.

The Parties’ Positions Before the LA and NLRC

Petitioners denied that they engaged in copra buying in Ibajay and asserted that they had not registered such business in any government agency. They claimed that Lim had not been their agent or employee because Lim was an independent copra buyer. Petitioners, however, admitted that Rogelio had previously been their employee, asserting that he was hired on January 3, 1977 and retired on June 30, 1989. They further contended that after July 1, 1989, Rogelio was employed by Lim until the filing of the complaint.

Petitioners presented Lim’s affidavit stating that Rogelio was one of Lim’s employees from July 1, 1989 until the termination of his services. They also submitted an SSS Form R-1A reporting Rogelio (and Palomata) as Lim’s employees, Lim’s application for registration as a copra buyer, Chan’s affidavit, and affidavits from Guevarra and Seneres denying that they had executed or signed Rogelio’s January 19, 1998 affidavits. Guevarra allegedly recanted, stating he had been an employee of Lim. Guevarra’s daughter executed an affidavit stating that Guevarra had not signed the earlier affidavit attributed to him and that her father had been employed by Lim.

Labor Arbiter’s Ruling

On April 5, 1999, the LA dismissed the complaint. The LA found that there was no employer-employee relationship between Chan and MSDC and Rogelio effective July 1, 1989 until the filing of the complaint, ruling that Rogelio was then the employee of Wynne O. Lim. The LA held that Rogelio’s retirement claim under Republic Act No. 7641 against the petitioners should be directed to Lim, and it also ruled that the retirement claim was barred by prescription because it was treated as a money claim that prescribed after three years from accrual. The LA likewise dismissed the remaining claims on the same ground of accrual during Rogelio’s employment with Lim.

NLRC’s Affirmance

On January 28, 2000, the NLRC affirmed the LA’s decision. It reasoned that there could be no double retirement in the private sector. It further expressed concern that allowing Rogelio to claim retirement benefits again would enrich him at the expense of the Government, and it concluded that because Rogelio had retired in 1991, he could no longer avail of the benefits under Republic Act No. 7641, which took effect on January 7, 1993.

Court of Appeals’ Reversal

Rogelio filed a special civil action for certiorari in the CA, alleging grave abuse of discretion by the NLRC in denying his benefits and rejecting his money claims based on prescription. On October 24, 2003, the CA reversed. It held that Rogelio substantially established that he remained employed by Chan and MSDC up to March 17, 1997. It also ruled that the retirement benefits under Republic Act No. 7641 were distinct from the retirement benefits that could be claimed under the Social Security Law, applying the ruling in Oro Enterprises, Inc. v. NLRC (G.R. No. 110861, November 14, 1994, 238 SCRA 105).

The CA set aside the NLRC decision and remanded the case to the LA for computation of Rogelio’s retirement benefits under Article 287 of the Labor Code, as amended, pegged at the minimum wage prevailing in Ibajay, Aklan as of March 17, 1997, together with attorney’s fees based on the same.

Issues Raised on Appeal

Petitioners raised three alleged errors: first, that the CA erred in taking cognizance of Rogelio’s certiorari despite the NLRC decision allegedly becoming final and executory nearly two months before the petition was filed; second, that the CA erred in concluding that Rogelio remained their employee from July 6, 1989 up to March 17, 1997; and third, that the CA erred in awarding retirement benefits and attorney’s fees.

Supreme Court’s Ruling on Timeliness of Certiorari

The Court held that the CA did not err in taking cognizance of Rogelio’s petition for certiorari. The Court found that Rogelio received the NLRC’s denial of his motion for reconsideration on January 16, 2003, and thus had 60 days from that date to file the petition, consistent with Section 4, Rule 65, Rules of Court. The Court noted that the CA received the petition on March 17, 2003. It rejected petitioners’ insistence that the finality of the NLRC decision barred the petition, explaining that finality of the NLRC decision did not preclude resort to certiorari within the prescribed period when the issue raised involved jurisdiction.

Supreme Court’s Review of the Employer-Employee Relationship

The Court treated the question of whether an employer-employee relationship existed between petitioners and Rogelio from July 1, 1989 to March 17, 1997 as essentially a question of fact. It reiterated that findings of fact based on substantial evidence generally bind, but it acknowledged that where the LA and NLRC findings conflicted with those of the CA, equity and review of the records warranted re-evaluation.

The Court scrutinized the CA’s factual assessment. It observed that the CA identified discrepancies in petitioners’ documentary evidence. The Court agreed with the CA that multiple certificates reflected differing employment commencement dates. It also noted that Chan denied engaging in copra buying in Ibajay, yet certificates issued by Chan allegedly identified him as a “copra dealer” with an Ibajay address. The Court further observed that Lim’s status and the claimed separation were undermined by the continuing “physical reality” of Rogelio’s work pattern: Rogelio and co-workers supposedly continued to go to work day in and day out, doing the same job in the same place, without apparent discontinuity except “on paper.”

The Court also noted that Lim apparently “inherited,” at least on paper, ten employees from Chan, including Rogelio, on the same day, July 1, 1989. Yet petitioners allegedly failed to present credible additional documentary support beyond Lim’s affidavit and business registration to substantiate the claimed transfer of employment circumstances. The Court emphasized that petitioners’ explanation was not supported by evidence. It found that the denial of employment continuity did not answer the practical question of what Rogelio and co-workers did for petitioners before July 1, 1989 if they were not laborers of the petitioners. It further stressed that, given Rogelio’s long employment history with petitioners, it was implausible that Rogelio and his witness would mistakenly believe that Lim was only a manager rather than the new employer.

The Court invoked the guiding labor principle that doubts reasonably arising from the evidence are resolved in favor of the laborer, for reasons tied to the laborer’s safety and decent living as mandated by Article 1702 of the Civil Code. It thus affirmed the CA’s factual conclusion that Chan and MSDC employed Rogelio up to his retirement in 1997. The Court held that petitioners failed to adduce credible evidence to outweigh Rogelio’s evidence showing continuing employment.

Supreme Court’s Ruling on Entitlement to Retirement Benefits

On entitlement, the Court focused on Article 287 of the Labor Code, as amended by Republic Act No. 7641, particularly the third paragraph governing retirement pay in the absence of a retir

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