Case Summary (G.R. No. 151228)
Petitioner and Respondent
Petitioner
• Rolando Y. Tan, theater owner and manager.
Respondent
• Leovigildo Lagrama, painter.
• National Labor Relations Commission (NLRC) Fifth Division.
• Court of Appeals.
• Labor Arbiter Rogelio P. Legaspi.
Key Dates
• Employment period: September 1, 1988–October 17, 1998
• Labor Arbiter decision: June 17, 1999
• NLRC reversal: June 30, 2000; reconsideration denied September 29, 2000
• Court of Appeals decision: May 31, 2001; resolution denying reconsideration: November 27, 2001
• Supreme Court decision: August 15, 2002
Applicable Law
• 1987 Philippine Constitution (post-1990 decisions)
• Labor Code, Articles 279 (security of tenure) and 282(1) (just causes for termination)
• Four-fold test for employer-employee relationship (selection, control, dismissal power, wage payment)
• Due process requirements under the Labor Code and its Implementing Rules
Factual Background
On October 17, 1998, Tan accused Lagrama of urinating in his work area and ordered him to stop drawing and vacate the premises. Lagrama denied the infraction and insisted it did not warrant dismissal. Tan repeatedly shouted “Get out,” and Lagrama left. Lagrama then filed a complaint for illegal dismissal and money claims before the Sub-Regional Arbitration Branch of the NLRC.
Labor Arbiter Proceedings and Decision
Tan contended that Lagrama was an independent contractor paid on a piece-work basis and not entitled to employee benefits. Lagrama maintained employee status and sought reinstatement plus various benefits. On June 17, 1999, Labor Arbiter Legaspi found the dismissal illegal, ordered reinstatement but granted separation pay in lieu, and awarded separation pay, backwages, 13th-month pay, service incentive leave pay, and damages totaling P136,849.99.
NLRC Proceedings
On appeal, the NLRC Fifth Division (June 30, 2000) reversed the Labor Arbiter, ruling Lagrama an independent contractor. A motion for reconsideration was denied on September 29, 2000.
Court of Appeals Proceedings
Lagrama petitioned for certiorari before the Court of Appeals. The appellate court found sufficient evidence of employer control over work schedules, methods, workplace rules, and material provision. It held that Lagrama’s weekend painting for others was a sideline insufficient to negate employee status. On May 31, 2001, the Court of Appeals annulled the NLRC resolutions and reinstated the Labor Arbiter’s decision. A motion for reconsideration was denied on November 27, 2001.
Issues on Review
- Existence of employer-employee relationship between Tan and Lagrama
- Legality of Lagrama’s dismissal under just-cause and due process requirements
Employer-Employee Relationship Analysis
Applying the four-fold test, the Supreme Court confirmed:
• Selection and engagement: Tan directly hired Lagrama.
• Control: Tan prescribed work hours, workspace rules (cleanliness, prohibition against urination outside restrooms), and supplied materials.
• Power to dismiss: Tan acknowledged the right to fire Lagrama.
• Wage payment: Lagrama was paid on a piece-work basis but subject to payroll requirements; absence of payroll records suggested adverse inferences against Tan.
The regular and continuous nature of Lagrama’s work in the theater business established a necessary link to Tan’s trade, making him a regular employee.
Illegal Dismissa
...continue readingCase Syllabus (G.R. No. 151228)
Facts
- Rolando Y. Tan was president of Supreme Theater Corporation and general manager of Crown and Empire Theaters in Butuan City.
- Leovigildo Lagrama worked as a painter of ad billboards and murals for the Empress, Supreme, and Crown Theaters from September 1, 1988 to October 17, 1998.
- On October 17, 1998, Tan accused Lagrama of urinating in his work area and ordered him to stop drawing and leave the premises.
- Lagrama denied the charge, insisted it was a minor infraction if true, and was repeatedly told to “Get out” until he left.
- Lagrama filed an illegal dismissal complaint with the NLRC Sub-Regional Arbitration Branch No. X, seeking reinstatement and payment of separation pay, backwages, 13th month pay, service incentive leave pay, salary differential, and damages.
- Tan claimed Lagrama was an independent contractor paid on a fixed piece-work basis and denied terminating him; he submitted affidavits showing Lagrama’s similar engagements elsewhere.
Procedural History
- June 17, 1999: Labor Arbiter Rogelio P. Legaspi found an employer-employee relationship, declared the dismissal illegal, and awarded P136,849.99 in separation pay, backwages, 13th month pay, service incentive leave pay, and damages.
- Petitioner Tan appealed to the NLRC Fifth Division.
- June 30, 2000: NLRC Fifth Division reversed the Labor Arbiter, holding Lagrama an independent contractor.
- September 29, 2000: NLRC denied Lagrama’s motion for reconsideration.
- Lagrama petitioned the Court of Appeals via Rule 65 certiorari.
- May 31, 2001: Court of Appeals annulled NLRC resolutions, reinstated the Labor Arbiter’s decision, and denied Tan’s motion for reconsideration on November 27, 2001.
- August 15, 2002: Supreme