SECOND DIVISION

June 19, 2019

G.R. No. 225075

ARNULFO M. FERNANDEZ, Petitioner
vs.
KALOOKAN SLAUGHTERHOUSE INCORPORATED*/ERNESTO CUNANAN, Respondents

D E C I S I O N

CAGUIOA, J.:

Before the Court is a Petition for Review on Certiorari1 (Petition) under Rule 45 of the Rules of Court assailing the Decision2 dated March 29, 2016 and Resolution3 dated May 30, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 141852. The CA denied the petition for certiorari assailing the Decision4 dated April 30, 2015 and Resolution5 dated June 22, 2015 of the National Labor Relations Commission (NLRC) in NLRC LAC No. 03-000666-15, which reversed the Labor Arbiter's (LA) Decision6 dated January 27, 2015 finding that petitioner Arnulfo M. Fernandez (petitioner) was illegally dismissed.

Facts

According to petitioner, he was hired in 1994 as a butcher by Kalookan Slaughterhouse, Inc. (Kalookan Slaughterhouse), a single proprietorship owned by respondent Emesto Cunanan (Cunanan).7 He claimed that he worked from Monday to Sunday, from 6:30P.M. to 7:30A.M., with a daily wage of ₱700.00, which was later reduced to ₱500.00.8 He further claimed that he met an accident while driving Kalookan Slaughterhouse's truck in December 2013 and that deductions were made from his wages.9 He questioned these deductions in July 2014, and thereafter he was treated unreasonably.10 Petitioner further claimed that on July 21, 2014, he suffered from a headache and did not report for work.11 The next day, however, he was shocked when he only received ₱200.00 due to his previous undertime and was informed that he could no longer report for work due to his old age.12

Kalookan Slaughterhouse, on the other hand, asserted that petitioner is an independent butcher working under its Operation Supervisor, Cirilo Tablit (Tablit).13 He received payment based on the number of hogs he butchered and was only required to be in the slaughterhouse when customers brought hogs to be slaughtered.14 Kalookan Slaughterhouse alleged that it imposed policies on the entry to the premises, which applied to employees, dealers, independent butchers, hog and meat dealers and trainees.15 According to Kalookan Slaughterhouse, petitioner violated the policies and he misconstrued the disallowance to enter the slaughterhouse as an act of dismissal.16

LA Decision

On August 5, 2014, petitioner filed the complaint for illegal dismissal before the LA. After the exchange of pleadings, the LA ruled that petitioner was illegally dismissed. The dispositive portion of the LA Decision states:

WHEREFORE, premises considered, judgment is hereby rendered declaring the complainant to have been illegally dismissed by the respondents as a regular employee. Conformably, respondent Kalookan Slaughter House and its owner, respondent Ernesto N. Cunanan, are hereby ordered, jointly and severally, to pay the complainant backwages computed from [the] time of dismissal until finality of this Decision and separation pay, which equivalent (sic) to one (1) month salary per year of service, counted from time of engagement until finality of this Decision.

As of this date, complainant's backwages and separation pay are tentatively computed at P84,500.00 and P260,000.00, respectively.

Respondents Kalookan Slaughter House and Ernesto N. Cunanan are further ordered, jointly and severally, to pay the complainant the following:

Service Incentive Leave Pay - P 7,500.00

13th Month Pay - 39,000.00

Night Shift Differential - 1,462.50

Attorney's Fees - 39,246.25

All other claims are denied.

SO ORDERED.17

The LA found that the requisites of an employer-employee relationship were established as follows: petitioner was hired by Kalookan Slaughterhouse through Tablit and petitioner was paid his daily wage for his butchering services.18 Further, Kalookan Slaughterhouse had authority to discipline petitioner as regards his work activities through Kalookan Slaughterhouse's personnel named Noelberto De Guzman (De Guzman).19 Kalookan Slaughterhouse also exercised control over the conduct of petitioner in the performance of his work and implemented policies regulating his rendition of services. In fact, De Guzman admitted to the strict policies imposed by Kalookan Slaughterhouse such as the requirement of I.D.s, uniforms, and even where butchering knives are inserted. According to De Guzman, petitioner violated all of these.20 The policies implemented showed that petitioner could not render butchering services following his own ways and means. The LA also found that petitioner presented his I.D. issued by Kalookan Slaughterhouse, which proved that he was an employee of Kalookan Slaughterhouse.21

The LA also ruled that Kalookan Slaughterhouse failed to prove its claim that petitioner was not its employee. The LA ruled that Kalookan Slaughterhouse failed to prove that Tablit, who was its employee, was an independent or job contractor. As its Operations Supervisor, Tablit was deemed to have acted in the interest of Kalookan Slaughterhouse. And since Tablit engaged petitioner, petitioner is deemed an employee of Kalookan Slaughterhouse.22

The LA thus found that petitioner was illegally dismissed when he was told on July 22, 2014 that he could no longer work due to his old age. For the LA, this was not a just or valid cause to terminate petitioner's employment and it was an arbitrary and whimsical act of Kalookan Slaughterhouse.23 Given the foregoing, petitioner was entitled to backwages and separation pay. Petitioner was also entitled to service incentive leave pay, 13th month pay, and night shift differential pay as Kalookan Slaughterhouse failed to prove that petitioner was paid the foregoing.24

NLRC Decision

Aggrieved, Kalookan Slaughterhouse appealed to the NLRC, which reversed the LA. The dispositive portion of the NLRC Decision states:

WHEREFORE, premised on all the foregoing considerations, the Decision appealed from is hereby REVERSED and SET ASIDE and a new one is entered DISMISSING the above-entitled case for lack of employer-≠employee relationship.

SO ORDERED.25

The NLRC ruled that although there was a semblance of employer-employee relationship as the work of a butcher is necessary and desirable in the usual trade and business of a slaughterhouse, the facts and circumstances in this case showed that there was no employer-employee relationship.26 The NLRC ruled that it was normal and usual practice in slaughterhouses to engage the services of butchers on a contractual or per piece basis.27 Petitioner was an independent contractor and not an employee of Kalookan Slaughterhouse because there was no regular payroll showing his name and the legal deductions made from his salary. There were also no pay slips, and the money he received from Tablit showed that he was an independent butcher and not an employee of Kalookan Slaughterhouse.28 The NLRC found that the Sinumpaang Salaysay of Tablit tends to show that there was no employer-employee relationship between petitioner and Kalookan Slaughterhouse.29 The NLRC also ruled that petitioner failed to prove any dismissal as he was only barred from entering the premises for his failure to follow the slaughterhouse's policies,30 but nonetheless ruled that there was just cause to dismiss petitioner as he was found sleeping on duty.31

CA Decision

Petitioner questioned the NLRC Decision to the CA through a petition for certiorari. The CA, however, denied the petition. The dispositive portion of the CA Decision states:

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.32

The CA ruled that petitioner's claim of the existence of an employer≠ employee relationship is not supported by substantial evidence as he failed to submit salary vouchers, pay slips, daily work schedule and even a certificate of withholding tax on compensation income.33 The CA found that the gate passes and log sheets that petitioner submitted were not sufficient as the gate passes specifically state that they do not qualify the holder as an employee of Kalookan Slaughterhouse and the log sheets were only for services from September 24 and 28, 2012.34

The CA also ruled that petitioner failed to disprove the Sinumpaang Salaysay of Tablit that petitioner was one of the butchers that Tablit personally hired and paid when there were too many hogs to be butchered at the slaughterhouse.35

Petitioner moved for reconsideration but the CA denied this. Hence, this Petition.

Issues

The issues raised in the Petition are as follows:

I

WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN EMPLOYER≠ EMPLOYEE RELATIONSHIP BETWEEN THE PETITIONER AND THE RESPONDENTS.

II

WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN ILLEGAL DISMISSAL IN THE INSTANT CASE.36

The Court's Ruling

The Petition is granted.

The conflicting factual findings of the LA vis-a-vis the NLRC and the CA warrant a review of the factual findings of the labor tribunals and the CA. As the Court ruled in Cariño v. Maine Marine Phils., Inc.:37

As a rule, "[i]n appeals by certiorari under Rule 45 of the Rules of Court, the task of the Court is generally to review only errors of law since it is not a trier of facts, a rule which definitely applies to labor cases." As the Court ruled in Scanmar Maritime Services, Inc. v. Conag: "But while the NLRC and the LA are imbued with expertise and authority to resolve factual issues, the Court has in exceptional cases delved into them where there is insufficient evidence to support their findings, or too much is deduced from the bare facts submitted by the parties, or the LA and the NLRC came up with conflicting findings x x x."38

Petitioner was an employee of
Kalookan Slaughterhouse.

Petitioner submitted the following:

(a) log sheets for three days in September 2012 where it was shown that he reported for work;39

(b) three gate passes and one identification card all of which state that he was abutcher;40 and

(c) a trip ticket showing that on December 30, 2007, petitioner was part of a group who went to Bataan. The trip ticket had a notation that petitioner was a captain of the trip and the truck with Plate Number CJH 377 was driven by a certain Peter.41

On the other hand, Kalookan Slaughterhouse presented the following pieces of evidence:

(a) Sinumpaang Salaysay42 of Tablit alleging that he has been an employee of Kalookan Slaughterhouse for more or less 20 years, he was given authority by Cunanan to hire people as hog butchers when the need arose but he himself would be responsible for paying them, and that one of those hog butchers was petitioner, he did not exercise control over the means and methods of the butchers and he only monitored if they finished their work, and that Kalookan Slaughterhouse strictly implemented the "No ID, No Entry" Policy, "No Uniform, No Entry" Policy, "No Gate Pass, No Entry" Policy, and that those under the influence of alcohol were prohibited from entering the premises;

(b) Photographs of petitioner sleeping in the premises of Kalookan Slaughterhouse;43

(c) Photographs of policies implemented by Kalookan Slaughterhouse as listed by Tablit;44 and,

(d) Sinumpaang Salaysay45 of De Guzman where he alleged that he is a caretaker of Kalookan Slaughterhouse and he knew of petitioner as one of the butchers hired by Tablit; he would often reprimand petitioner for failing to follow Kalookan Slaughterhouse's policies such as when petitioner failed to wear his ID, wear his uniform, and properly store his knives used for butchering. Petitioner would also sometimes come to work with dirty clothes, and there was one time he caught petitioner sleeping. He also alleged that petitioner is Tablit's employee, and that he would only see petitioner when there were many hogs to, be butchered, thus petitioner would not report for work every day.

It is settled that "[t]o determine the existence of an employer≠-employee relationship, four elements generally need to be considered, namely: (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. These elements or indicators comprise the so-called 'four-fold' test of employment relationship."46

From the foregoing, it is undisputed that petitioner rendered butchering services at Kalookan Slaughterhouse.1‚шphi1 The LA found that petitioner was engaged by Kalookan Slaughterhouse itself since petitioner submitted log sheets and gate passes. The NLRC and the CA, however, ruled that petitioner was only engaged by Tablit, Kalookan Slaughterhouse's Operation Supervisor, and he was Tablit's own employee. This was supported by Tablit's Sinumpaang Salaysay.

The Court finds that the NLRC and the CA committed a grave error and agrees with the LA.

Similar to the facts of this case, the Court in Masonic Contractor, Inc. v. Madjos47 (Masonic Contractor) ruled that the fact that the company provided identification cards and uniforms and the vague affidavit of the purported employer were sufficient evidence to prove the existence of employer-employee relationship. Thus:

Petitioners' defense that they merely contracted the services of respondents through Malibiran fails to persuade us. The facts of this case show that respondents have been under the employ of MCI as early as 1991. They were hired not to perform a specific job or undertaking. Instead, they were employed as all-around laborers doing varied and intermittent jobs, such as those of drivers, sweepers, gardeners, and even undertakers or tagalibing, until they were arbitrarily terminated by MCI in 2004. Their wages were paid directly by MCI, as evidenced by the latter's payroll summary, belying its self-serving and unsupported contention that it paid directly to Malibiran for respondents' services. Respondents had identification cards or gate passes issued not by Malibiran, but by MCI, and were required to wear uniforms bearing MCI's emblem or logo when they reported for work.

It is common practice for companies to provide identification cards to individuals not only as a security measure, but more importantly to identify the bearers thereof as bona fide employees of the firm or institution that issued them. The provision of company-issued identification cards and uniforms to respondents, aside from their inclusion in MCI's summary payroll, indubitably constitutes substantial evidence sufficient to support only one conclusion: that respondents were indeed employees of MCI.

Moreover, as correctly observed by the CA, petitioners failed to show that it was Malibiran who exercised control over the means and methods of the work assigned to respondents. Interestingly, Malibiran's affidavit is silent on the aspect of control over respondents' means and methods of work. Rather than categorically stating that she was the one who directly employed respondents to render work for MCI, Malibiran merely implies that, like respondents, she was just a co-worker. Malibiran's statement that the work for MCI was merely in the nature of accommodation to help respondents earn a living, in effect, impliedly admits the fact that she did not have the capacity to engage in the independent job-contracting business, and that, therefore, she was not respondents' employer.48

Here, the totality of petitioner's evidence and the admissions of Kalookan Slaughterhouse convinces the Court that petitioner was indeed an employee of Kalookan Slaughterhouse. Petitioner was able to present an LD., gate passes, log sheets, and a trip ticket. Kalookan Slaughterhouse even admitted through De Guzman that uniforms were given to all personnel, including petitioner.

The CA, however, disregarded the gate passes, as it claimed that the gate pass had a note that such did not qualify the holder as an employee.49 This is an error as this only applied to one of the gate passes and the other gate passes did not have this notation.

Further, petitioner was able to submit an I.D. in addition to the gate passes. The trip ticket and the log sheets also showed that Kalookan Slaughterhouse engaged petitioner. These are sufficient to prove that petitioner was engaged by Kalookan Slaughterhouse.50

Kalookan Slaughterhouse, however, attempts to show that even if petitioner worked in the slaughterhouse, he was Tablit's employee. Tablit claims to be an employee of the slaughterhouse for more or less 20 years and that he has engaged petitioner as one of his butchers. Kalookan Slaughterhouse further alleged that petitioner's salaries were paid by Tablit. Kalookan Slaughterhouse, however, failed to prove this. In fact, Tablit was not shown to possess substantial capital and investment to have an independent business, be petitioner's employer and pay his salaries. Other than Tablit's Sinumpaang Salaysay, no document was presented to show that he paid petitioner's salaries.

Further, by denying that petitioner was its employee but alleging that he rendered services as Tablit's employee, Kalookan Slaughterhouse effectively admitted the substantial fact that petitioner has been rendering butchering services for 20 years from the filing of the complaint on August 5, 2014. As the Court held in Pamplona Plantation Company v. Acosta:51

x x x Petitioner is estopped from denying that respondents worked for it. In the first place, it never raised this defense in the proceedings before the Labor Arbiter. Notably, the defense it raised pertained to the nature of respondents' employment, i.e., whether they are seasonal employees, contractors, or worked under the pakyaw system. Thus, in its Position Paper, petitioner alleged that some of the respondents are coconut filers and copra hookers or sakadors; some are seasonal employees who worked as scoopers or lugiteros; some are contractors; and some worked under the pakyaw system. In support of these allegations, petitioner even presented the company's payroll, which will allegedly prove its allegations.

By setting forth these defenses, petitioner, in effect, admitted that respondents worked for it, albeit in different capacities. Such allegations are negative pregnants - denials pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied, and amounts to an acknowledgement that respondents were indeed employed by petitioner.52

Even worse for Kalookan Slaughterhouse, while Tablit claimed to be petitioner's employer, he also admitted that he did not exercise any control over the means and methods of petitioner in rendering butchering services. If he was indeed petitioner's employer, he should have control over petitioner's means and methods for doing his job.

It, however, appears on record that De Guzman, who is also an employee of Kalookan Slaughterhouse, was the one who exercised control over petitioner's means and methods as he reprimanded petitioner for his failure to properly store his butchering knives, coming to Kalookan Slaughterhouse with dirty clothes, reporting for work drunk, and not having an I.D. before going to the slaughterhouse.

All the foregoing show that Kalookan Slaughterhouse, through Tablit, was the one who engaged petitioner, paid for his salaries, and in effect had the power to dismiss him. Further, Kalookan Slaughterhouse exercised control over petitioner's conduct through De Guzman. To the mind of the Court, Kalookan Slaughterhouse was petitioner's employer and it exercised its rights as an employer through Tablit and De Guzman, who were its employees.

Petitioner was illegally dismissed and
entitled to his money claims.

Petitioner claims that on July 22, 2014 he was callously informed that he could no longer report for work because of his old age.53 Kalookan Slaughterhouse, however, claims that petitioner was not dismissed but was only barred from entering as he failed to comply with the "No I.D., No Entry" Policy and the "No Uniform, No Entry" Policy.54

The LA ruled that petitioner's allegation of dismissal was unrebutted as De Guzman only attested to several instances where petitioner was reprimanded for his failure to comply with the slaughterhouse's policy.55 For the LA, De Guzman did not state that on July 22, 2014 he had barred petitioner from entering for his failure to comply with the policies.56

The NLRC believed Kalookan Slaughterhouse that petitioner was not allowed to enter since he failed to comply with the slaughterhouse's policy.57 The CA did not discuss the issue of dismissal as it ruled that petitioner was not an employee of Kalookan Slaughterhouse.58 The Court finds that the LA was correct in ruling that petitioner was illegally dismissed.

Indeed, Kalookan Slaughterhouse failed to specifically deny that on July 22, 2014, petitioner was informed that he could no longer report for work. De Guzman only alleged that he merely barred petitioner from entering the slaughterhouse in several instances because of his failure to wear his I.D. and uniform but he failed to state that this was done on July 22, 2014. De Guzman's silence on this matter is deemed as an admission by Kalookan Slaughterhouse that petitioner was indeed dismissed on July 22, 2014. As the Court held in Masonic Contractors:

x x x By their silence, petitioners are deemed to have admitted the same. Section 11 of Rule 8 of the Rules of Court, which supplements the NLRC Rules, provides that an allegation not specifically denied is deemed admitted. x x x59

Having been illegally dismissed, the LA was correct m awarding backwages and separation pay.

The LA's award of service incentive leave pay, night shift differential pay, and 13th month pay is also proper as Kalookan Slaughterhouse failed to prove that it had paid petitioner such benefits under the law.60 Such award should be limited to three years prior to the filing of the complaint in August 5, 2014 in accordance with Article 306 of the Labor Code.61

Finally, Kalookan Slaughterhouse is likewise liable for legal interest at the rate of six percent (6%) per annum from the finality of this Decision until full satisfaction.

The Court, however, notes that petitioner's counsel manifested that it was informed of petitioner's death but that his heirs failed to provide a death certificate. Petitioner's counsel also sought to request a death certificate from the Philippine Statistics Authority, which in turn, issued a certificate that it had no record of death of any person under the name of petitioner.62

Generally, the computation of backwages and separation pay is computed until the finality of the decision that awarded them. However, given the foregoing, the LA and petitioner's counsel are directed to confirm petitioner's death, and if confirmed, the LA is directed to compute petitioner's backwages and separation pay only until his death.63

WHEREFORE, premises considered, the Petition is GRANTED. The Decision dated March 29,2016 and Resolution dated May 30, 2016 of the Court of Appeals in CA-G.R. SP No. 141852 are REVERSED and SET ASIDE. The January 27, 2015 Decision of the Labor Arbiter in NLRC NCR Case No. 08-09779-14 is REINSTATED, and the Labor Arbiter is DIRECTED to recompute the backwages and separation pay following the above guidelines.

Kalookan Slaughterhouse Incorporated is likewise liable for legal interest of six percent (6%) per annum on the award of backwages and separation pay computed from the finality of this Decision until full satisfaction.

SO ORDERED.

Carpio, (Chairperson), Perlas-Bernabe, J. Reyes, Jr. and Lazaro-Javier, JJ., concur.


Footnotes

* Also appears as "Kalookan Slaughterhouse"and "Kalookan Slaughter House, Inc." in some parts of the records.

1 Rollo, pp. 1 1-30.

2 Id. at 194-208. Penned by Associate Justice Fernanda Lampas Peralta, with Associate Justices Jane Aurora C. Lantion and Nina G. Antonia-Valenzuela concurring.

3 Id. at 221.

4 Id. at 121-131. Penned by Commissioner Pablo C. Espiritu, Jr., with Presiding Commissioner Alex A. Lopez concurring.

5 Id. at 162-163.

6 Id. at 97-105. Penned by Labor Arbiter Jose Antonio C. Ferrer.

7 Id. at 76, and 195.

8 Id. at 195-196.

9 Id. at 195, 196.

10 Id. at 196.

11 Id.

12 Id. at 55 and 196.

13 Id. at 196.

14 Id.

15 Id.

16 Id.

17 Id. at 104-105.

18 Id. at 101.

19 Id.

20 Id.

21 Id. at 102.

22 Id. at 100-101.

23 Id. at 103.

24 Id. at 103-104.

25 Id. at 130.

26 Id. at 127.

27 Id.

28 Id. at 128.

29 Id. at 129.

30 Id. at 129-130.

31 Id. at 129.

32 Id. at 208.

33 Id. at 203.

34 Id.

35 Id. at 204.

36 Id. at 18.

37 G.R. No. 231111, October 17, 2018.

38 Id. at 5; citations omitted.

39 Rollo, pp. 64-66.

40 Id. at 89.

41 Id. at 90.

42 Id. at 79.

43 Id. at 80.

44 Id. at 81-82.

45 Id. at 83-84.

46 David v. Macasio, 738 Phil. 293, 307 (2014).

47 620 Phil. 737 (2009).

48 Id. at 742-743; citations omitted.

49 Rollo, p. 203.

50 See Domasig v. National Labor Relations Commission, 330 Phil. 518, 524 (1996).

51 539 Phil. 305 (2006).

52 Id. at 311; emphasis and underscoring supplied.

53 Rollo, p. 55.

54 Id. at 71.

55 See id. at 103.

56 See id.

57 Id. at 130.

58 Id. at 203-207.

59 Masonic Contractor, Inc. v. Madjos, supra note 47, at 744; citations omitted.

60 Rollo, p. 104.

61 ART. 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.

62 Rollo, p. 257.

63 See Divine Word College of Laoag v. Mina, 784 Phil. 546, 559 (2016).


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