Baylon v. Abulencia

FIRST DIVISION

[G.R. No. 237125. September 22, 2020.]

DM BAYLON AND/OR PRISCILLA BAYLON, petitioners,vs. ANGELO F. ABULENCIA, HARRYKEEN G. JAVIER, SALVADOR I. PETRO LA, SR., SALVADOR I. PETROLA, JR., ALEXIS CARAMAT, PHILLIP WARREN G. JAVIER, GLENN A. ALACAR, AND ORLANDO N. PEREZ, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedSeptember 22, 2020which reads as follows:

"G.R. No. 237125 — DM BAYLON AND/OR PRISCILLA BAYLON vs. ANGELO F. ABULENCIA, HARRYKEEN G. JAVIER, SALVADOR I. PETROLA, SR., SALVADOR I. PETROLA, JR., ALEXIS CARAMAT, PHILLIP WARREN G. JAVIER, GLENN A. ALACAR, AND ORLANDO N. PEREZ

The Case

Petitioner DM Baylon, through its sole proprietor Priscilla Baylon, assails the following dispositions of the Court of Appeals in CA-G.R. SP No. 145003 entitled "DM Baylon and/or Priscilla Baylon v. National Labor Relations Commission, Angelo F. Abulencia, Harrykeen G. Javier, Salvador I. Petrola, Sr., Alexis Caramat, Salvador I. Petrola, Jr., Phillip Warren G. Javier, Glenn A. Alacar, and Orlando N Perez":

1. Decision 1 dated September 26, 2017 affirming the National Labor Relations Commission's (NLRC) ruling that respondents were regular employees of petitioner; and

2. Resolution 2 dated January 24, 2018 denying petitioner's motion for reconsideration.

Antecedents

By separate Complaints 3 all dated December 29, 2014, respondents Angelo F. Abulencia, Harrykeen G. Javier, Phillip Warren G. Javier, Alexis Caramat, Salvador I. Petrola, Jr., Glenn A. Alacar, and Orlando Perez charged petitioner with non-payment of holiday pay, holiday premium, and 13th month pay. Meanwhile, Salvador I. Petrola, Sr., filed a complaint for illegal dismissal and for non-payment of holiday pay, holiday premium, and 13th month pay. 4 They essentially alleged: 5

Their employment details are as follows:

 

Name	Date Hired	Position	Daily Salary	Date of Resignation/Dismissal
Angelo F. Abulencia	November 18, 2011	Salesman and/or Helper	P280.00	Resigned on December 19, 2014
Harrykeen G. Javier	November 10, 2011	Welder	P400.00	Resigned on December 15, 2014
Salvador I. Petrola, Sr.	January 2011	Lathe machine Fabricator	P400.00	Illegally dismissed on April 5, 2014
Alexis Caramat	August 24, 2008	Welder	P400.00	Resigned on December 15, 2014
Salvador I. Petrola, Jr.	January 7, 2013	Lathe Machine Operator and Welder	P400.00	Resigned on December 15, 2014
Phillip Warren G. Javier	February 2, 2009	Fabricator and Welder	P500.00	Resigned on December 15, 2014
Glenn A. Alacar	January 29, 2006	Lathe Machine Operator and Welder	P500.00	Resigned on December 15, 2014
Orlando N. Perez	June 7, 2013	Welder	P300.00	Resigned on December 15, 2014

 

They exclusively worked for more than a year for petitioner DM Baylon, a sole proprietorship owned by Priscilla Baylon. They performed tasks necessary and desirable to its business of fabricating bakery equipment. Respondent Angelo F. Abulencia reported three (3) days a week — Sunday to Tuesday from 8 o'clock in the morning until 6 o'clock in the afternoon while respondents Harrykeen G. Javier, Alexis Caramat, Salvador I. Petrola, Jr., Phillip Warren G. Javier, Glenn A. Alacar, and Orlando N. Perez reported Monday to Saturday, 8 o'clock in the morning to 5:30 in the afternoon. They resigned as they could no longer tolerate Priscilla's inhumane treatment of them and her unsavory remarks against them.

Respondent Salvador I. Petrola, Sr. on the other hand, was terminated on ground of absence without leave on April 4, 2014. He, however, gave notice to Priscilla of his intended absence on said day. He alleged he was terminated without just cause and was denied due process. He sought backwages and separation pay in addition to his claims for holiday pay, holiday premium, and 13th month pay.

On February 12, 2015, respondents amended their complaint to include non-payment of overtime pay and manifested that more or less twenty (20) workers were under petitioner's employ. 6

Petitioner, 7 on the other hand, denied employer-employee relationship with respondents. It countered that respondents were piece-rate workers whose jobs were dependent on the availability of orders for fabrication of bakery equipment. They were not required to observe definite work days and work hours and were free to offer their work elsewhere.

The Labor Arbiter's Ruling

By Decision 8 dated June 30, 2015, Labor Arbiter Isagani Laurence G. Nicolas dismissed the case for alleged lack of merit. According to him, respondents failed to substantiate their claim of employment with petitioner. There was no proof that petitioner had the power of control over respondents who were merely tapped as independent contractors to fabricate kitchen equipment. 9

The National Labor Relations Commission's (NLRC) Ruling

As borne by its decision 10 dated November 23, 2015, the NLRC partly granted respondents' appeal. It declared respondents as regular employees of petitioner. It also ordered petitioner to pay respondents their daily wage for regular holidays and 13th month pay — both subject to the three-year limitation under Article 291 11 (now Article 306) of the Labor Code. But it denied respondents' claim for holiday premium and overtime pay.

Meanwhile, it rejected petitioner's position that respondents' job depended on the availability of job orders, holding that if such were the case, then no employee would ever attain regular status. Even assuming that respondents were piece-rate employees, the piece-rate basis of compensation did not negate respondents' regular employment status.

Lastly, Salvador I. Petrola, Sr. was illegally dismissed, hence, entitled to backwages and separation pay, in lieu of reinstatement.

On petitioner's motion for reconsideration, the NLRC affirmed with modification per Resolution 12 dated January 25, 2016. It deleted the award in favor of Salvador I. Petrola, Sr. as it turned out that he was not among the appellants who questioned the labor arbiter's adverse ruling before the NLRC.

The Proceedings before the Court of Appeals

Petitioner went to the Court of Appeals 13via a petition for certiorari. It charged the NLRC with grave abuse of discretion when it declared respondents to be its regular employees and even awarded them monetary benefits. It reiterated that respondents were not its regular employees but were in fact occasional workers who performed specific tasks only. Too, it pointed out that the NLRC was divested of jurisdiction as regards respondent Perez who appeared not to have signed the verification and certification against forum shopping in the memorandum of appeal filed before the NLRC.

In their Comment, 14 respondents maintained that they are petitioner's regular employees, hence, entitled to holiday pay and 13th month pay. They countered that petitioner cannot raise at this late stage of the proceedings the NLRC' s alleged lack of jurisdiction over respondent Perez just because he failed to sign the verification and certification against forum shopping in the memorandum of appeal filed before the NLRC.

The Court of Appeals' Ruling

By its assailed Decision 15 dated September 26, 2017, the Court of Appeals affirmed. It ruled that respondents were petitioner's regular employees performing for more than one (1) year already acts necessary and desirable to its business and trade. Applying the four-fold test, petitioner hired respondents, paid their wages, and had the power to dismiss them. Lastly, petitioner controlled respondents' manner of performing their work. Engaged in the business of fabrication of bakery equipment, petitioner necessarily implemented measures in the manufacture and construction of equipment. As regular workers, they are entitled to holiday pay and 13th month pay.

Petitioner's motion for reconsideration was denied by Resolution 16 dated January 24, 2018.

The Present Petition

Petitioner now seeks 17 affirmative relief from the Court and prays anew for the dismissal of the case. Petitioner insists that respondents were not its regular employees but were only occasionally engaged for a specific task such that they are not entitled to their claims for labor standard benefits accorded to regular employees. It had no power of dismissal over respondents as their relationship ended upon completion of the job for which they were contracted for. As regards respondent Perez, the labor arbiter's decision lapsed into finality for his failure to appeal the same. Lastly, granting respondents are entitled to their claims, Petrola Jr.'s entitlement should only be reckoned from January 7, 2013 and not December 2011.

In their Comment, 18 respondents echo the same arguments they pleaded before the Court of Appeals.

Ruling

An employer-employee relationship was

To determine the existence of an employer-employee relationship, jurisprudence has invariably adhered to the four-fold test, to wit:

(1) the selection and engagement of the employee;

(2) the payment of wages;

(3) the power of dismissal; and

(4) the power to control the employee's conduct, or the so-called "control test."

Of these four, the last one is the most important. The "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the "control test," an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end. 19

The presence of the first and second elements is undisputed. Admittedly, petitioner engaged respondents' services as salesman, lathe machine fabricator, and welder for the fabrication of bakery equipment. Too, it was petitioner who paid their wages.

As for the third element, the power to select and engage employees also include the concomitant power to dismiss. Petitioner nevertheless denies it had the power of dismissal because its relationship with respondents ended upon completion of a particular task.

In Philips Semiconductors (Phils.), Inc. v. Fadriquela, 20 the Court rejected an employment arrangement on "as the need arises" to augment or supplement its regular employment "for the duration of peak loads" during short-term surges to respond to cyclical demands depending upon the needs of its customers, domestic and international. According to the Court, any worker hired under such arrangement can never attain regular employment status. On this basis, therefore, petitioner cannot negate the existence of its power to dismiss included in its power of selection and engagement of respondents to perform tasks which are necessary and desirable to petitioner's business.

Anent the fourth element, petitioner's power of control over respondents is bolstered by its own statement in the present petition, viz.:

x x x In order to fulfill a particular order, Baylon had to hire their [respondents'] services, pay them, and supervise them to the extent that they perform in accordance with the requirements of the particular order. 21 (emphasis added)

Clearly, petitioner exercised control over the manner by which respondents performed their tasks for the purpose of ensuring that they comply with its client's specifications. Respondents did not have the discretion to depart from these specifications or otherwise adopt their own method in the production of the client's bakery equipment.

In fine, there is no denying that an employer-employee relationship existed between petitioner and respondents.

Respondents Abulencia, Caramat, Alacar,

The primary standard of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. 22 Article 295 of the Labor Code provides:

ARTICLE 295. [280] Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. 23 x x x

Under this provision, an employment shall be deemed regular where the employee:

a) has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; or

b) has rendered at least one year of service, whether such service is continuous or broken, with respect to the activity in which he is employed. 24

In De Leon v. National Labor Relations Commission, 25 the Court held that law overrides conditions prejudicial to the interest of the worker whose weak bargaining position needs the State's support. What determines whether a certain employment is regular or casual is not the employer's will and word to which the desperate worker often accedes, much less the procedure of hiring the employee or the manner of paying his salary; it is the nature of the activities performed in relation to the particular business or trade considering all circumstances, and in some cases, the length of time of its performance, and its continued existence.

Respondents had been hired as salesmen, helper, welder, lathe machine fabricator and welder — tasks which are necessary and desirable to petitioner's business of fabrication of bakery equipment. Respondents Abulencia, Caramat, Alacar, Petrola, Jr., Perez, Harrykeen Javier, and Phillip Javier, therefore, are regular employees of petitioner.

For respondent Perez's failure to sign the verification in the Memorandum of Appeal before the NLRC, we apply the liberal construction of the Rules to promote substantial justice. We find the signature of the six (6) other respondents with whom respondent Perez share the cause of action — substantial compliance for the requirement of verification. These six (6) other respondents very well knew the circumstances surrounding this case and their consequent appeal from the labor arbiter's dismissal.

Too, the merits of the subject case alone compel the Court to apply liberal construction of the Rules and hold substantial compliance for the certification against forum shopping. Generally, the certification against forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the Rule.26

The Court applied substantial compliance in Torres v. Specialized Packaging Development Corp., 27 where the verification and certification against forum shopping filed before the Court of Appeals was executed by only two (2) of the 25 petitioners-employees who claimed to have been illegally dismissed. These two (2) signatories, according to the Court, are unquestionably real parties in interest, who had sufficient knowledge to swear to the truth of the allegations in the Petition. This verification is enough assurance that the matters alleged therein have been made in good faith or are true and correct, not merely speculative. Too, the merits of the substantive aspects of the case, among others, was deemed as special circumstance or compelling reason for giving due course to the petition.

Of course, this is not to say that procedural requirements are to be taken lightly. 28 When technicality deserts its function of being an aid to justice, the Court is justified in exempting from its operations a particular case. Technical rules of procedure should be used to promote, not frustrate justice. 29

So must it be.

Respondents Abulencia, Caramat, Alacar,

As regular employees, respondents Abulencia, Caramat, Alacar, Petrola, Jr., Perez, Harrykeen Javier, and Phillip Javier are entitled to holiday pay under Article 94 30 of the Labor Code and 13th month pay under Presidential Decree No. 851 31 subject to the three-year prescriptive period under Article 306 32 of the Labor Code. The Court notes, however, that the NLRC erroneously computed respondent Petrola Jr.'s entitlement to the above statutory benefits from December 23, 2011 when it is undisputed that he was engaged by petitioner on January 7, 2013. Thus, respondent Petrola, Jr. is entitled to holiday pay and 13th month pay computed from January 7, 2013 up to the date of his resignation on December 15, 2014.

Pursuant to Nacar v. Gallery Frames, 33 the monetary awards in favor of respondents Abulencia, Harrykeen G. Javier, Phillip Warren G. Javier, Caramat, Alacar, and Perez shall earn six percent (6%) interest per annum from finality of the NLRC Decision until fully paid. Under Section 14, Rule VII of the NLRC Rules of Procedure, 34 the NLRC Decision became final and executory on February 11, 2016. 35

The monetary award in favor of respondent Petrola, Jr., on the other hand, shall earn six percent (6%) interest per annum from finality of this Resolution until fully paid. 36

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated September 26, 2017 and Resolution dated January 24, 2018 of the Court of Appeals in CA-G.R. SP No. 145003 are AFFIRMED with MODIFCATION. Petitioner is ordered to PAY:

1) Respondents Angelo F. Abulencia, Harrykeen G. Javier, Phillip Warren G. Javier, Alexis Caramat, Orlando Perez, and Glenn A. Alacar holiday pay and 13th month pay computed from December 2011 to December 15, 2014. This monetary award shall earn six percent (6%) interest per annum from February 11, 2016 until fully paid;

2) Respondent Salvador I. Petrola, Jr. is entitled to holiday pay and 13th month pay computed from January 7, 2013 to December 15, 2014. This monetary award shall earn six percent (6%) interest per annum from finality of this Resolution until fully paid.

The letter dated February 26, 2019 of Mr. John Patrick D. Gatpatan, Records Officer I, Archives Section, Judicial Records Division, Court of Appeals, Manila, in compliance with the Resolution dated December 3, 2018, transmitting the rollo of CA G.R. SP No. 145003 with 211 pages with thereto attached Court of Appeals Decision dated September 26, 2017, is NOTED.

SO ORDERED."

By authority of the Court:

(SGD.) LIBRADA C. BUENADivision Clerk of Court

by:

MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1. Penned by Associate Justice Socorro B. Inting and concurred in by Associate Justices Marlene Gonzales-Sison and Rafael Antonio M. Santos, all members of the Fifteenth Division, rollo, pp. 24-32.

2.Id. at 33-34.

3. CA rollo, pp. 37-46.

4.Rollo, p. 26.

5. CA rollo, pp. 47-60.

6.Rollo, p. 26.

7. CA rollo, pp. 61-68.

8.Id. at 72-79.

9.Rollo, pp. 10-11.

10. CA rollo, pp. 16-31.

11.ARTICLE 306. [291] Money Claims. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred (Labor Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered), July 21, 2015).

12. CA rollo, pp. 33-36.

13.Id. at 15.

14.Id. at 121-132.

15.Rollo, pp. 24-32.

16.Id. at 33-34.

17.Id. at 8-23.

18.Id. at 43-56.

19. See Atok Big Wedge Co., Inc. v. Gison, 670 Phil. 615, 627 (2011).

20. 471 Phil. 355, 373 (2004).

21.Rollo, p. 16.

22. See De Leon v. National Labor Relations Commission, 257 Phil. 626, 632 (1989).

23. Labor Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered), July 21, 2015.

24. See Mehitabel Furniture Co. v. NLRC, 292-A Phil. 740, 742-743 (1993).

25.Supra note 22, at 635.

26. See Cortal, et al. v. Inaki A. Larrazabal Enterprises, et al., 817 Phil. 464, 484 (2017).

27. Phil. 540, 545 (2004).

28. See Paras v. Judge Baldado, 406 Phil. 589, 595 (2001).

29. See Donato v. Court of Appeals, 462 Phil. 676, 692 (2003).

30.ARTICLE 94. Right to Holiday Pay. — (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and

(c) As used in this Article, "holiday" includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election. (Labor Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered), July 21, 2015).

31.SECTION 1. All employers are hereby required to pay all their employees receiving a basic salary of not more than P1,000 a month, regardless of the nature of their employment, a 13th-month pay not later than December 24 of every year. (13th Month Pay Law, Presidential Decree No. 851, December 16, 1975).

32.ARTICLE 306. [291] Money Claims. — All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred. (Labor Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered), July 21, 2015).

33. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. See Nacar v. Gallery Frames, 716 Phil. 267, 279 (2013).

34.SECTION 14. Finality of Decision of the Commission and Entry of Judgment. — a) Finality of the Decisions, Resolutions or Orders of the Commission. — Except as provided in Section 9 of Rule X, the decisions, resolutions or orders of the Commission shall become final and executory after ten (10) calendar days from receipt thereof by the counsel or authorized representative or the parties if not assisted by counsel or representative.

b) Entry of Judgment. — Upon the expiration of the ten (10) calendar day period provided in paragraph (a) of this Section, the decision, resolution, or order shall be entered in a book of entries of judgment. In the absence of return cards, certifications from the post office or the courier or other proofs of service to the parties, the Executive Clerk or Deputy Executive Clerk shall consider the decision, resolution or order as final and executory after sixty (60) calendar days from date of mailing.

(The 2011 NLRC Rules of Procedure, [May 31, 2011]).

35. CA rollo, pp. 98-99.

36.Supra note 33.