Mantalaba, Jr. v. Manila Electric Co.

SECOND DIVISION

[G.R. No. 238558. October 6, 2021.]

SULPICIO B. MANTALABA, JR., ET AL., petitioners, vs.MANILA ELECTRIC COMPANY, ET AL., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Second Division, issued a Resolution dated06 October 2021which reads as follows:

"G.R. No. 238558 (Sulpicio B. Mantalaba, Jr., et al. v. Manila Electric Company, et al.). — This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the Resolutions dated May 31, 2017 2 and February 6, 2018 3 of the Court of Appeals (CA) in CA-G.R. SP No. 150263. The assailed issuances affirmed the November 29, 2016 Decision 4 and January 23, 2017 Resolution 5 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 11-003471-16 which, in turn, affirmed the August 31, 2016 Decision 6 of Labor Arbiter (LA) Jasper Z. Dela Cruz (LA Dela Cruz) in NLRC NCR Case No. 02-01741-16, dismissing petitioners' Sulpicio B. Mantalaba, Jr., et al. (petitioners) complaint for illegal dismissal.

Antecedents

Petitioners were employed by respondent Miescor Logistics, Inc. (MLI) and were assigned to render services for respondent Manila Electric Company (Meralco) under the following circumstances: 7

 

Name	Position	Date employed
Sulpicio B. Mantalaba, Jr.	Stockman	May 1996
Marvin B. Cruz	Utility man	May 2008
Telesforo S. Villegas	Stockman	September 1996
Bonifacio R. Hernandez	Stock supervisor	July 1999
Redentor G. Gerero	Stockman	September 1988
Reynaldo Z. Balictar	Stockman	May 1979
Vilma T. Panginen	Encoder/Clerk V	January 1998

 

Petitioners' respective contracts of employment were renewed by MLI on an annual basis. However, sometime in November 2015, they were asked to sign an "End of Contract" document. When they refused to do so, MLI allegedly terminated their employment and withheld their salaries and other remunerations. Thereafter, petitioners instituted a complaint 8 against MLI and Meralco before the arbitration branch of the NLRC. HESIcT

In their Position Paper, 9 petitioners contended that MLI is a mere labor-only contractor and in-house agent of Meralco. Petitioners asseverated that MLI and Meralco have built a cabo system so that the latter can escape its responsibilities as an employer; that they were lawful Meralco employees who had the right to security of tenure; that they were dismissed without any just or lawful cause; and that they are entitled to their respective monetary claims.

In contrast, MLI, in its Position Paper, 10 disputed petitioners' assertions. MLI argued, inter alia, that petitioners were project employees who voluntarily signed project employment contracts 11 with fixed and varying periods; that in the course of MLI's engagement of petitioners' services, the latter had regularly been subjected to the process of receiving a notice of termination, renewal or extension, as well as the submission of clearance documents, quitclaims, and waivers; 12 that MLI had complied with the reportorial requirements 13 of the Department of Labor and Employment (DOLE) with regard to the termination of project employees; and that there was no termination to speak of because petitioners' respective contracts have simply expired.

On the other hand, Meralco, in its Position Paper, 14 maintained that it had no employment relationship with petitioners. Meralco merely engaged MLI to provide warehousing services, which consisted of "inventory management and control, order processing, bar-coding, re-packaging, labeling and quality control and supply replenishment," 15 as evidenced by Warehouse Management Contracts 16 which were entered into between 2012 and 2015. Moreover, before it entered into the foregoing agreements with MLI, Meralco required the former to submit documents 17 as would prove its capability to perform the said services and its financial capacity as an independent contractor. Thus, petitioners can never be considered as regular employees of Meralco.

The LA's Ruling

On August 31, 2016, LA Dela Cruz rendered a decision 18 dismissing petitioners' complaint for illegal dismissal, albeit directing MLI to pay their unpaid salaries amounting to P12,000.00 each.

LA Dela Cruz found that MLI's standing as an independent contractor was supported by documentary evidence. It is duly registered as such with the DOLE under Certificate of Registration No. NCR-PFO-9309-111412-111 19 and holds Business Permit No. SER-16-3416 20 issued by Pasig City. In addition, MLI's Audited Financial Statements 21 showed that its total assets amounted to P356,372,439.00 and a net income of P21,449,045.00. More importantly, MLI was able to prove that it had the power of control over petitioners as project employees.

Thus, LA Dela Cruz disposed:

WHEREFORE, premises considered, judgment is hereby rendered DISMISSING the complaint for illegal dismissal.

Respondent MLI is hereby directed to PAY Complainants their unpaid salary in the amount of P12,000.00 each or for a grand total of P84,000.00.

Other claims are denied due to lack of merit.

SO ORDERED.22

Aggrieved, petitioners interposed an appeal 23 with the NLRC, duly opposed 24 by MLI.

The NLRC's Ruling

In a Decision 25 dated November 29, 2016, the NLRC affirmed the findings and conclusions of LA Dela Cruz.

The NLRC found that, indeed, MLI had continuously exercised supervision and control over petitioners during the entire time that they were rendering services for Meralco. Moreover, MLI's engagement contracts with other companies proved that it was not solely created to serve Meralco. As to the assertion that petitioners were illegally dismissed, the NLRC ruled that petitioners' numerous Project Employment Contracts with MLI disprove the same.

Accordingly, the decretal portion of the NLRC's ruling reads:

WHEREFORE, the appeal filed by complainants is hereby DENIED for lack of merit. The decision dated 31 August 2016 is AFFIRMED.

SO ORDERED. 26 TAIaHE

Petitioners' Motion for Reconsideration 27 was denied by the NLRC in its January 23, 2017 Resolution.

Undaunted, petitioners filed a Rule 65 Petition for Certiorari28 with the CA.

The CA's Ruling

In the first assailed Resolution dated May 31, 2017, the CA found that the NLRC did not commit any grave abuse of discretion when it denied petitioners' appeal.

The appellate court ruled that MLI was able to adduce sufficient evidence to show that it exercised "full and exclusive responsibility and liability for the engagement, selection, supervision, control, termination, compensation and disciplinary action of petitioners." 29 These factors, the CA said, were indicators of an employment relationship between MLI and petitioners. Thus:

WHEREFORE, the petition for certiorari is DISMISSED for lack of merit.

SO ORDERED.30

Petitioners sought a reconsideration 31 of the above Resolution, but the same was denied by the CA in the second assailed Resolution dated February 6, 2018.

Hence, the present recourse.

Issue

Whether or not the CA erred in affirming the issuances of the NLRC and LA Dela Cruz which dismissed petitioners' complaint for illegal dismissal.

The Ruling of the Court

The petition is bereft of merit.

Procedural considerations

At the outset, petitioners raise questions of fact which are beyond the ambit of a Rule 45 petition for review on certiorari. It bears stressing that only questions of law may be raised in a petition for review on certiorari, 32 not questions of facts, 33 as the Court is not a trier of facts. 34 The Court will not entertain questions of fact as the factual findings of the appellate courts are final, binding, or conclusive on the parties and upon this Court when supported by substantial evidence. 35

For a question to be one of law, the question must not involve an examination of the probative value of the evidence presented by any of the litigants. The resolution of the issue must solely depend on what the law provides on the given set of circumstances. Once it is obvious that the issue invites a review of the evidence presented, the question posed is one of fact. 36

In Cheesman v. Intermediate Appellate Court, 37 We distinguished questions of fact and questions of law in the following manner:

As distinguished from a question of law — which exists "when the doubt or difference arises as to what the law is on a certain state of facts" — "there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts"; or when the "query necessarily invites calibration of the whole evidence considering mainly the credibility of witnesses, existence and relevancy of specific surrounding circumstances, their relation; to each other and to the whole and the probabilities of the situation." 38

On this score alone, the petition must necessarily fail.

Nevertheless, even if We were to overlook petitioners' grave procedural misstep and adjudicate on the merits of their arguments, Our position remains unswayed. We find no reversible error on the part of the CA when it rendered the herein assailed issuances.

Petitioners are project employees

Article 295 of the Labor Code defines the different types of employment:

Art. 295. 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.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

The aforecited provision contemplates four kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose 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; (3) seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for the duration of the season; and (4) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence later added a fifth kind, the fixed-term employee. 39 TCAScE

For an employee to be considered project-based, the employer must show that: (a) the employee was assigned to carry out a specific project or undertaking; and (b) the duration and scope of which were specified at the time the employee was engaged for such project. 40 It is crucial that the employees were informed of their status as project employees at the time of hiring and that the period of their employment must be knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure being brought to bear upon the employees or any other circumstances vitiating their consent. 41

Here, MLI was able to adduce substantial evidence as would show that through the years of engaging petitioners' services in various projects, it was able to inform them of the duration and scope of their work at the time that they entered into different project employment contracts. Moreover, everytime a project was completed, MLI processed petitioners' exit documents and reported the termination of their employment with the DOLE.

In the same vein, petitioners' supposed length of service with MLI does not automatically lead to the conclusion that they have become regular employees. In Caseres v. Universal Robina Sugar Milling Corporation, 42 the Court held that "length of service is not the controlling determinant of the employment tenure of a project employee, but whether the employment has been fixed for a specific project or undertaking, its completion has been determined at the time of the engagement of the employee." 43

The records show that petitioners voluntarily entered into project employment contracts, knowing fully well that their respective tenures would cease upon the completion of MLI's various projects. They even secured clearances and executed waivers and quitclaims as part of the termination process in MLI's past projects. In the course of these transactions, petitioners never raised any objections. Neither did they assert any claim that they have become regularized employees of Meralco, MLI's client.

MLI is a legitimate independent

Article 106 of the Labor Code clearly identifies and distinguishes the relations that may arise in a situation where there is an employer, a contractor, and employees of the contractor. 44 It provides, thus:

ART. 106. Contractor or subcontractor. — Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of the contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. 45

From the foregoing provision, the two possible relations that may arise among the parties are: (1) the permitted legitimate job contract; or (2) the prohibited labor-only contracting.

In Coca-Cola Bottlers Phils., Inc. v. Agito, 46 the Court distinguished these two concepts, thus:

A legitimate job contract, wherein an employer enters into a contract with a job contractor for the performance of the former's work, is permitted by law. Thus, the employer-employee relationship between the job contractor and his employees is maintained. In legitimate job contracting, the law creates an employer-employee relationship between the employer and the contractor's employees only for a limited purpose, i.e., to ensure that the employees are paid their wages. The employer becomes jointly and severally liable with the job contractor only for the payment of the employees' wages whenever the contractor fails to pay the same. Other than that, the employer is not responsible for any claim made by the contractor's employees.

On the other hand, labor-only contracting is an arrangement wherein the contractor merely acts as an agent in recruiting and supplying the principal employer with workers for the purpose of circumventing labor law provisions setting down the rights of employees. It is not condoned by law. A finding by the appropriate authorities that a contractor is a "labor-only" contractor establishes an employer-employee relationship between the principal employer and the contractor's employees and the former becomes solidarily liable for all the rightful claims of the employees. 47 ITAaHc

In determining the existence of an independent contractor relationship, several factors may be considered, such as, but not necessarily confined to, whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. 48

As correctly found by LA Dela Cruz, and as affirmed by the NLRC and the CA, MLI was able to prove that it is an independent contractor. It has been incorporated and duly registered with the Securities and Exchange Commission, 49 as well as the DOLE under Certificate of Registration No. NCR-PFO-9309-111412-111 50 and the Social Security System under Employer No. 0391402867. 51 It has obtained a Contractor's License 52 from the Philippine Contractors Accreditation Board and a Business Permit 53 from the local government of Pasig City. Too, the finding that MLI has sufficient capitalization is supported by its audited financial statements 54 and its tax remittances 55 to the Bureau of Internal Revenue. And apart from Meralco, MLI has other high profile clients. 56

Finally, MLI exercised complete control and supervision over the conduct and performance of its project employees. Worth noting at this juncture is the following exposition of LA Dela Cruz:

There is no question that it is Respondent MLI which had complete control and supervision over the work performance of the Complainants. In fact, the presence of control was not only supported by the contact extensions and memos but was even conferred by the pertinent provision stipulated in the Service Agreement, viz.:

xxx xxx xxx

"W. Be fully and exclusively responsible and liable for the engagement, selection, supervision, control, management, direction, termination, compensation and disciplinary action of its officers, employees, personnel and agents and ensure their compliance with the obligations and responsibilities stipulated in this Contract";

xxx xxx xxx

Although Complainants would like to impress upon this Office that control resides with Respondent Meralco based on the belief that they were supervised by its own managers and supervisors, they failed to submit any material evidence which can validate the purported practice. Quite remarkably, they did not even provide the specific names of Respondent Meralco's personnel who allegedly exercised direct supervision over them. Such claim was just based on naked allegations. 57

Petitioners' bare allegation, that MLI is a mere labor-only contractor and in-house agent that exists to enable Meralco to circumvent its responsibilities as their true employer, cannot overturn the evidence on record. It is settled that bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value. 58 There is nothing on record that shows even a hint that Meralco is petitioners' real employer. CHTAIc

All told, the CA did not commit any reversible error when it affirmed the findings of the NLRC which, in turn, upheld the Decision of LA Dela Cruz in toto. MLI is a legitimate independent contractor which engaged petitioners' services as project employees and, thereafter, deployed them to its client, Meralco. Upon the completion of their respective undertakings, petitioners' employment with MLI automatically expired. There is no illegal dismissal which MLI could be held liable for. In petitions for review on certiorari like the instant case, the Court invariably sustains the unanimous factual findings of the LA, the NLRC, and the CA, especially when such findings are supported by substantial evidence and there is no cogent basis to reverse the same, as in this case. 59

WHEREFORE, the petition is DENIED for lack of merit. The Resolutions dated May 31, 2017 and February 6, 2018 of the Court of Appeals in CA-G.R. SP No. 150263 are hereby AFFIRMED.

SO ORDERED."

By authority of the Court:

(SGD.) TERESITA AQUINO TUAZONDivision Clerk of Court

 

Footnotes

1.Rollo, Vol. I, pp. 3-23.

2.Id., Vol. II, pp. 816-820. Penned by Associate Justice Myra V. Garcia-Fernandez with Presiding Justice Andres B. Reyes, Jr. (retired Member of this Court) and Priscilla J. Baltazar-Padilla (former Member of this Court) concurring.

3.Id. at 843-845. Penned by Associate Justice Myra V. Garcia-Fernandez with Associate Justices Priscilla J. Baltazar-Padilla (former Member of this Court) and Victoria Isabel A. Paredes.

4.Id. at 782-797. Penned by Presiding Commissioner Alex A. Lopez with Commissioners Pablo C. Espiritu, Jr. and Cecilio Alejandro C. Villanueva concurring.

5.Id. at 813-814.

6.Id. at 715-745.

7.Id. at 716.

8.Id., Vol. I, pp. 47-49.

9.Id. at 50-73.

10.Id. at 235-249.

11.Id. at 332-465.

12.Id. at 466-500; id., Vol. II, pp. 501-595.

13.Id., Vol. II, pp. 596-603.

14.Id., Vol. I, pp. 131-148.

15.Id. at 132.

16.Id. at 149-175.

17.Id. at 176-234.

18.Id., Vol. II, pp. 715-745.

19.Id., Vol. I, p. 176.

20.Id. at 178.

21.Id. at 182-223.

22.Id., Vol. II, p. 744.

23.Id. at 746-759.

24.Id. at 760-777.

25.Id. at 782-797.

26.Id. at 796.

27.Id. at 798-806.

28.Id., Vol. I, pp. 26-45.

29.Id., Vol. II, p. 819.

30.Id. at 820.

31.Id. at 821-826.

32.Pascual v. Burgos, 776 Phil. 167, 182 (2016).

33.Chu, Jr. v. Caparas, 709 Phil. 319, 328 (2013).

34.Gatan v. Vinarao, 820 Phil. 257, 265 (2017).

35.Cu v. Ventura, 840 Phil. 650 (2018).

36.Heirs of Villanueva v. Heirs of Mendoza, 810 Phil. 172, 178 (2017).

37. 271 Phil. 89 (1991).

38.Id. at 97-98.

39.Innodata Knowledge Services, Inc. v. Inting, 822 Phil. 314, 335 (2017).

40.Dacles v. Millennium Erectors Corporation, 763 Phil. 550, 558 (2015).

41.Herma Shipyard, Inc. v. Oliveros, 808 Phil. 668, 680 (2017).

42. 560 Phil. 615 (2007).

43.Id. at 623.

44.San Miguel Foods, Inc. v. Rivera, 824 Phil. 961, 972 (2018).

45.Id. at 972-973.

46. 598 Phil. 909 (2009).

47.Id. at 923.

48.Garden of Memories Park and Life Plan, Inc. v. National Labor Relations Commission, 681 Phil. 299, 310 (2012).

49.Rollo, Vol. I, pp. 251-261.

50.Id. at 176.

51.Id. at 228-232.

52.Id. at 177.

53.Id. at 178.

54.Id. at 179-223.

55.Id. at 225-227.

56.Id., Vol. II, pp. 652-695.

57.Id. at 736.

58.LNS International Manpower Services v. Padua, Jr., 628 Phil. 223, 224 (2010).

59.Letran Calamba Faculty and Employees Association v. National Labor Relations Commission, 567 Phil. 26, 39 (2008).