Case Summary (G.R. No. 207429)
Key Dates and Procedural Posture
Complaint filed: May 19, 2017. Labor Arbiter decision: February 28, 2018 (declared petitioner regular employee and illegally dismissed). NLRC decision: June 26, 2018 (reversed, found no employer-employee relationship). CA decision: February 14, 2019 (found employment but held petitioner was a fixed-term employee; dismissal valid). CA resolution denying reconsideration: July 10, 2019. Supreme Court decision reviewed here: July 14, 2021.
Applicable Law and Constitutional Basis
Governing constitutional framework: 1987 Philippine Constitution (applicable to cases decided in 1990 or later). Primary statutory authorities: Labor Code of the Philippines (P.D. No. 442) as amended and renumbered — particularly Article 295 (regular and casual employment), Article 294 (security of tenure), Article 306 (prescription for money claims), and Article 224 (jurisdiction of Labor Arbiters and the Commission). Procedural rule: Rule 45 limitations on review and recognized exceptions where factual findings conflict between tribunals.
Factual Background
Petitioner began service with respondent corporation in April 2004 as a driver hauling goods from San Miguel Brewery to various delivery points. He was suspended in 2009 for alleged abandonment and rehired in 2014. From 2014 until February 2017 petitioner reported for work and received per-trip compensation (16% of gross revenue). In February 2017 he stopped receiving delivery assignments and then filed the complaint, alleging loss of continuous employment and non-enrollment in SSS, PhilHealth, and Pag-IBIG, and non-payment of 13th month pay.
Respondent’s Assertion
Respondents denied an employer-employee relationship, asserting petitioner was an independent freelance driver engaged on a per-trip contract that terminated upon delivery of goods or return to the warehouse. Respondents emphasized the per-trip arrangement and limited frequency of engagement (two to three times per week) to support non-employment status.
Labor Arbiter’s Findings and Relief
Labor Arbiter Baricaua found all elements of an employer-employee relationship present (selection/engagement, payment, disciplinary/dismissal power, and control) and ruled petitioner a regular employee illegally dismissed. The Labor Arbiter awarded separation pay, 13th month pay, and attorney’s fees, but declined jurisdiction over SSS/PhilHealth/Pag-IBIG claims, directing those to appropriate agencies.
NLRC Ruling
The NLRC reversed the Labor Arbiter, concluding petitioner failed to prove employment with the corporation. The NLRC emphasized the clear per-trip terms indicating termination upon delivery or return and the intermittent nature of assignments (2–3 times weekly), which it found inconsistent with regular employment.
Court of Appeals Ruling
The Court of Appeals modified the NLRC’s conclusion: it agreed there was an employer-employee relationship but characterized petitioner as a fixed-term employee under the per-trip contract, thus holding that the engagement validly ended upon completion of each trip and there was no illegal dismissal when assignments ceased.
Issue on Review and Standard of Review
Central issue: whether an employer-employee relationship existed and, if so, whether petitioner was a regular employee unlawfully dismissed. The Supreme Court noted Rule 45 ordinarily limits review to questions of law, but an exception applies when factual findings conflict among the Labor Arbiter, NLRC, and CA — requiring the Court to reexamine facts, which it did here.
Analytical Framework: The Four-Fold Test
The Court applied the established four-fold test to determine employment: (1) selection and engagement; (2) payment of wages; (3) power of dismissal; and (4) power to control the employee’s conduct. The Court treated the method of payment (per-trip) as a compensation mechanism that does not, by itself, negate employment status.
Supreme Court’s Findings on Employment Relationship
Applying the four-fold test, the Court found: (1) petitioner was engaged by Onon Trucking as driver and had long tenure (2004–2009; rehired 2014–2017); (2) petitioner received compensation from Onon Trucking (16% per trip); (3) the company’s power to hire inherently included the power to discipline and dismiss; and (4) the company exercised control — the truck was company-owned and the company determined routes and delivery instructions. Cited precedents (e.g., Chavez, Cielo) supported finding regular status despite per-trip payment.
Status Determination: Regular Employee
Under Article 295 of the Labor Code, an employee becomes regular when engaged to perform activities necessary or desirable in the employer’s usual business or when a casual worker renders at least one year of service. The Court concluded petitioner’s duties (delivery drivers) were necessary to Onon Trucking’s business and that petitioner had rendered service exceeding one year; therefore he acquired regular employee status.
Determination of Illegal Dismissal
Because petitioner was a regular employee, any termination required just or authorized cause and compliance with procedural due process. Respondent abruptly stopped assigning deliveries in February 2017 without adherence to substantive or procedural safeguards. The Court treated the cessation of assignments, together with respondent’s admission that the engagement had ceased, as constituting dismissal.
Monetary Remedies and Computation
Remedies under Article 294 and related jurisprudence were applied: petitioner was entitled to reinstatement without loss of seniority and full backwages, but because reinstatement was not viable or was not chosen, separation pay
...continue readingCase Syllabus (G.R. No. 207429)
Case Caption and Procedural Posture
- G.R. No. 248299, decided July 14, 2021, Second Division, decision penned by Justice Lazaro‑Javier.
- Petitioner: Rodrigo A. Upod. Respondents: Onon Trucking and Marketing Corporation (Onon Trucking) and Aimardo V. Interior.
- Petition for review on certiorari under Rule 45 challenging the Court of Appeals’ dispositions in CA‑G.R. SP No. 158220 (appellate decision and denial of motion for reconsideration).
- Relief sought: reversal of Court of Appeals’ finding that petitioner was a fixed‑term employee and denial of illegal dismissal; petitioner prays for monetary reliefs and separation pay in lieu of reinstatement.
Facts as Alleged by Petitioner
- Petitioner alleges initial engagement by Onon Trucking in April 2004 as hauler/driver.
- Primary tasks: travel to San Miguel Brewery, Inc. in San Fernando, Pampanga to withdraw stocks for piling and distribution to various grocery stores.
- Compensation arrangement: paid on a "per trip" basis (16% of gross revenue per trip as later specified).
- Employment history: affiliated with respondent until 2009 when suspended for alleged abandonment; rehired in 2014; continued peaceful and continuous reporting for work until February 2017 when he received no further delivery assignments.
- Petitioner thereafter maintained hauling trucks for a few days, then left and filed the present complaint upon concluding continuous employment was no longer possible.
- Claims included illegal dismissal and money claims; he asserted non‑provision of benefits due a regular employee (SSS, PhilHealth, Pag‑Ibig) despite rendering service for more than a year.
Respondents’ Factual and Legal Position
- Respondents denied the existence of an employer‑employee relationship between Onon Trucking and petitioner.
- Onon Trucking (owned by respondent Interior according to respondents) asserted it engaged independent freelance drivers to transport supplies to clients and paid them per delivery (16% of gross revenue per trip in petitioner’s case).
- The engagement, by respondents’ account, ended upon delivery of supplies or upon return to the warehouse, whichever came first; engagements were limited (two to three times per week) and terminated without further notice upon completion.
Procedural History: Lower Forums and Appellate Review
- Complaint filed May 19, 2017 for illegal dismissal with money claims; included claims of non‑payment of SSS/PhilHealth/Pag‑ibig and non‑payment of 13th month pay.
- Labor Arbiter Decision dated February 28, 2018: declared petitioner a regular employee and illegally dismissed; ordered Onon Trucking and/or Interior to pay petitioner P169,400.00 (separation pay, 13th month pay, attorney’s fees). Other claims dismissed for lack of jurisdiction.
- NLRC Decision dated June 26, 2018: reversed the Labor Arbiter, holding petitioner failed to prove employment; emphasized per‑trip contract terms and limited engagement frequency; concluded absence of employer‑employee relationship and thus no illegal dismissal. Motion for reconsideration denied August 28, 2018.
- Court of Appeals Decision (assailed) dated February 14, 2019: agreed with Labor Arbiter that an employer‑employee relationship existed but held petitioner was a fixed‑term employee whose engagement expired per the per‑trip contract; therefore his cessation of assignments did not constitute illegal dismissal. Motion for reconsideration denied by CA Resolution dated July 10, 2019.
- Present petition to the Supreme Court seeks reversal of the CA decision and affirmance of petitioner’s status as regular employee entitled to remedies for illegal dismissal.
Labor Arbiter’s Findings and Rationale
- Found that all elements of an employer‑employee relationship were present: selection and engagement, payment of wages, power to dismiss, and control/supervision.
- Noted respondents hired petitioner as driver to transport goods to Luzon destinations; paid per trip; exercised control over routes; the power to dismiss flowed from their power to engage.
- Granted separation pay, 13th month pay, and attorney’s fees; declined to adjudicate SSS/PhilHealth/Pag‑ibig claims (lack of jurisdiction).
NLRC’s Findings and Rationale
- Reversed Labor Arbiter: held petitioner did not prove employment with respondent company.
- Relied on the per‑trip contract terms (engagement ended upon delivery or return) and limited engagements (two to three times weekly) to conclude services were freelance/independent.
- Determined no employer‑employee relationship existed and therefore no illegal dismissal.
Court of Appeals’ Findings and Rationale
- Modified prior rulings: recognized the existence of an employer‑employee relationship per the Labor Arbiter but held petitioner was a fixed‑term employee.
- Held petitioner voluntarily signed the per‑trip contract and that the engagement ended upon delivery or return without need of further notice.
- Concluded that petitioner’s engagement expiration validated the cessation of assignments; thus no illegal dismissal.
Issue Presented to the Supreme Court
- Whether petitioner established an employer‑employee relationship with Onon Trucking and, if so, whether his cessation of assignments amounted to