Title
Rosario Brothers, Inc. vs. Ople
Case
G.R. No. L-53590
Decision Date
Jul 31, 1984
Workers hired as tailors, pressers, and stitchers by Rosario Brothers Inc. claimed employer-employee relationship, seeking 13th month pay and living allowances. Supreme Court ruled in their favor, affirming employment status and benefits entitlement, dismissing the employer’s untimely petition.
labor dispute
labor union
wages

Case Summary (G.R. No. L-53590)

Factual Background on the Work Arrangement

The private respondents were hired by the petitioner in its tailoring department. Some had worked there as early as 1969 and were separated on January 2, 1978. They received weekly wages on a piecework basis, with deductions for withholding tax in accordance with the Bureau of Internal Revenue (BIR) rules. They were registered with the Social Security System (SSS) as employees of the petitioner, with SSS premiums deducted from their wages. They also belonged to the Avenida-Cubao Manila COD Department Store Labor Union, which had a Collective Bargaining Agreement with the company. Their work attendance was regulated through a bundy clock, like other employees, and they were required to report from Monday through Saturday and remain in the tailoring shop for no less than eight (8) hours a day, unless no job order was given after waiting for two to three hours, in which event they could leave and return in the afternoon.

Job orders were distributed by a master cutter who supervised the work, ensured that outputs were completed as soon as possible, and distributed job work. The petitioner’s position, as reflected in its memoranda, was that once job orders and materials were distributed, the private respondents were “on their own,” with freedom to work in the petitioner’s shop or elsewhere, provided they finished within specifications and time. The petitioner also asserted that the private respondents could contract other persons to do the job for them and could accept other tailoring jobs from other establishments.

Administrative Complaint and Labor Arbiter Ruling

On September 7, 1977, the private respondents filed a complaint before the Regional Office of the Department of Labor (then the Ministry) alleging violations of PD 851 and PD 525, as amended by PD 1123. After the petitioner filed its answer, the case was certified for compulsory arbitration to the Labor Arbiter.

On December 29, 1977, the Labor Arbiter dismissed the private respondents’ claims for unpaid emergency living allowance and 13th month pay for lack of merit. The Labor Arbiter held that the complainants were not employees of the petitioner within the meaning of Article 267(b) of the Labor Code. As a consequence, the private respondents were dismissed on January 2, 1978, and the dismissal prompted the filing of an illegal dismissal complaint with the Ministry of Labor.

NLRC Affirmance and Reversal by the Minister of Labor

The NLRC affirmed the Labor Arbiter and dismissed the appeal for lack of merit. The private respondents then appealed to the Minister of Labor, who reversed the NLRC.

In a decision dated March 27, 1979, the Minister of Labor held that the relationship between the parties was one of employees and employer. The Minister found material indicators that the private respondents were hired as tailors, pressers, stitchers, and coatmakers in the petitioner’s tailoring department. They were reportedly hired through the master cutter and the department head, with approval by the personnel department and management. They had to report from Monday to Saturday, record attendance through a bundy clock, and stay in the shop for at least eight hours a day unless no job was given after a two- to three-hour waiting period. Their piecework wages were said to be paid according to company-set rates. They were also registered with the SSS with premiums deducted, and taxes were withheld according to BIR rules. The Minister also considered that they enjoyed benefits under the collective agreement.

The Minister further relied on control-type facts, including the requirement to work on job orders promptly, deadlines on assigned jobs, instructions to report tailors who postponed work near deadlines, and the requirement to follow the tailoring department’s code of discipline and rules and regulations. He also noted that dismissal could be imposed for serious violations, such as bringing out company patterns.

The Minister rejected the petitioner’s theory that the decrees did not cover the private respondents because they allegedly had “no fixed time” of entry and exit and no fixed number of workdays. The Minister found no basis in the decrees themselves to exclude them and found implementing rules consistent with coverage. He quoted that the rules for PD 525 applied to all employees of covered employers “regardless of their position, designation or employment status, and irrespective of the method by which their wages are paid,” and that they applied to piece-rate workers. The rules for PD 851 similarly entitled all employees of covered employers to benefits regardless of employment status or wage payment method.

The Minister ordered the petitioner to pay emergency allowances under PD 525 and PD 1123 and 13th month pay under PD 851 from the effectivity dates of the decrees, but not earlier than the stated dates indicating the start of employment of the named complainants. The Minister directed the Socio-Economic Analyst of the NLRC to compute the amounts within 20 calendar days.

Execution Proceedings and the Petition for Certiorari

After the Minister’s decision, the private respondents moved for issuance of a writ of execution, which was granted and partially implemented. On February 28, 1980, the Labor Arbiter ordered the designation of a Socio-Economic Analyst to compute the balance of claims in accordance with the Minister’s decision. A report dated March 4, 1980 computed the balance of private respondents’ claims for emergency living allowance and 13th month pay up to February 29, 1980, totaling P71,131.14. A writ of execution was then issued for the satisfaction of that amount.

The petitioner filed a petition for certiorari on April 11, 1980, praying to annul and set aside the Minister’s decision and to dismiss the claims.

The Issues Framed by the Petition

The petitioner raised two principal matters. First, it sought judicial nullification of the Minister’s decision and argued that the private respondents were not employees of the petitioner because the memoranda from 1973 to 1977 allegedly showed that the petitioner lacked control and supervision over their work. Second, it challenged the enforceability of the decrees as applied to the private respondents, essentially asserting that their employment character should have excluded them from the coverage.

The Petitioner’s Contentions on Lack of Control and Non-Employment

The petitioner anchored its argument on the asserted absence of employer control. It maintained that after job orders and materials were distributed, the private respondents worked independently, had freedom on where to perform their tasks, and could accept other work. It therefore asserted that no employer-employee relationship had been created.

The Court’s Disposition on Timeliness and Finality

The Court refused to sustain the petition. It held that the petition was filed too late. The petitioner filed on April 11, 1980, while the Minister’s decision dated March 27, 1979 had already become final, and the decision had also been partially implemented, as reflected in the sheriff’s return dated July 17, 1979. What remained for execution was only the balance of the private respondents’ claims. On that ground alone, the petition could not prosper.

Substantive Reasoning: Employer-Employee Relationship

The Court also found the petition devoid of merit. It invoked the test for employer-employee relationship articulated in Mafinco Trading Corporation vs. Ople, 70 SCRA 139, namely: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) power to control the employees’ conduct, with the latter as the most important element. It differentiated an independent contractor, who exercises independent employment and contracts to do work according to the contractor’s own methods, without being subject to the employer’s control except as to results.

Applying these elements, the Court affirmed the Minister’s findings:

First, the selection and hiring of the private respondents were done by the petitioner through the master cutter of its tailoring department, who was a regular employee. The hiring procedure was modified at one point when management handled personnel hiring after applications were qualified by a committee of four, with additional approval by the personnel department.

Second, the Court noted the petitioner paid weekly wages on a piecework basis. It characterized piecework remuneration as “wage” within the meaning of Article 97(f) of the New Labor Code (PD 442), which covered remuneration payable by time, task, piece, commission, or other methods under a contract of employment.

Third, the Court found that the petitioner had the power to dismiss, based on memoranda requiring strict compliance. Violations were grounds for outright dismissal. The Court recognized that the private respondents were in fact dismissed on January 2, 1978, even though their dismissal was declared illegal by the Labor Arbiter and was pending appeal before the NLRC.

Fourth, the Court held that the petitioner controlled the manner and cond

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