Republic
of the
Philippines
SUPREME
COURT
ManilaSECOND
DIVISION
PROGRESS
HOMES and ERMELO ALMEDA,
Petitioners,
G. R. No. 106212
March 7, 1997
-versus-
NATIONAL
LABOR RELATIONS COMMISSION,
GREGORIO A. MEDRANO, DANTE BAGUIO,
JAIME
GUAN, JOSE
SAPALARAN, RONNIE DELPINO,
DIONISIO FRANCISCO and ELMER BAGUIO,
Respondents.
D
E C I S I O N
ROMERO, J.:
Petitioners
seek to set aside the Decision of
the National Labor Relations Commission [NLRC] which affirmed the
decision
of the Labor Arbiter, the dispositive portion of which states:
Petitioner
Progress Homes Subdivision [Progress Homes],
is a housing project undertaken by the Ermelo M. Almeda Foundation,
Inc.,
a non-stock organization duly registered with the Securities and
Exchange
Commission [SEC]. When it engaged in constructing low-cost housing
units
for low-income employees, it named its project "Progress Homes
Subdivision"
in Camarines Sur. The other petitioner, Ermelo Almeda, is the President
and General Manager of Progress Homes and the owner of the land where
the
Progress Homes Subdivision is located.
Private
respondents allegedly were among the workers
employed by petitioners in their construction and development of the
subdivision
from 1986 to 1988. They were paid varying salaries. Forty
of these workers, including private respondents, filed before the NLRC
Arbitration Branch a petition for reinstatement, salary adjustment,
ECOLA,
overtime pay and 13th month pay. Petitioners
amicably settled the case with thirty-three of the laborers, leaving
private
respondents as the only claimants. Private respondents alleged that
they
worked as laborers and carpenters for 8.5 hours a day at a salary below
the minimum wage and that when they demanded payment of the benefits
due
them, they were summarily dismissed and barred from entering the
workplace.
Petitioners
denied that private respondents were
regular employees claiming that they were only project employees and
that
there was no employer-employee relationship between them.
On
December 27,
1991, the Labor Arbiter in Legazpi
City forthwith issued a decision in favor of private respondents.
On
appeal, the
NLRC affirmed the Labor Arbiter's
decision.
Hence,
this
petition.
Petitioners
maintain that there never existed
an employer-employee relationship between them and private respondents
and that due process was denied them in proceedings before the Labor
Arbiter
and in the NLRC.
Moreover,
they
point out that private respondents
could not say who hired them, nor could they produce pay slips to prove
that they were on petitioners' payroll. Petitioners present the
affidavit
of their foreman stating that he never hired the workers, as evidence
of
the alleged non-hiring of private respondents.
We
find merit in
this petition.
The
Labor
Arbiter, in finding that an employer-employee
relationship existed between the parties, said:
This Branch holds that herein petitioners were
illegally dismissed by the respondents, it being an established fact
that
employer-employee relationship exists. Respondents hired all the
petitioners
thru the former's foreman Rodolfo Badillo. Although this foreman denied
hiring the petitioners an admission was made that oftentimes said
foreman
saw these petitioners working in the residential units which the
respondents
were constructing at that time. The affidavit of foreman Rodolfo
Badillo
to the contrary is without merit for being self-serving, particularly
in
the light that the same was never alleged and/or utilized when the
amicable
settlement was entered into by and between the respondents and the
other
co-employees/co-petitioners of herein petitioners. To argue that the
affiant
considers the latter employees who opted to amicably settle their
disputes
with the same respondents, as having "actually work (sic) for
Progress
Homes Subdivision" while maintaining that the former [petitioners] were
not, without any other basis other than said self-serving allegation,
is
patently untenable. The least that the respondents could have done was
to present the alleged written contracts of all the petitioners
expressly
stating therein the terms and conditions of their employment if indeed
they were executed. Finding none in the records except a xerox copy of
one supposedly entered by a certain Salvador B. Anonuevo, who is not
even
one of the petitioners in the instant cases respondents' argument not
only
lack factual basis but borders on insult to ones (sic)
sensibility.
Apparently, said piece of document [Annex "D"] together with the xerox
copy of the alleged Certificate of Filing of Amended Articles of
Incorporation
from the Securities and Exchange Commission [SEC] were not even
certified
true copies and/or properly authenticated.
The evidence on
record fails to convince the Court
that private respondents were indeed employed by petitioners. The Labor
Arbiter does not give credence to the affidavit of petitioners' foreman
that he did not hire private respondents.
Said
affidavit
cannot just be perfunctorily dismissed
as "self-serving," absent any showing that he was lying when he made
the
statements therein. The question that obtrudes itself at this stage is:
who did hire them? Private respondents have not presented any evidence
that petitioners were their immediate employers.
It
does not make
sense to require petitioners
to produce contracts when they categorically deny having entered into
any
contract of employment with private respondents. To determine the
existence of an employer-employee relationship, the courts have
generally
sought the answer to these guidelines:
(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.[1]
Under
the
so-called "right of control" test, the
person for whom the services are performed reserves a right to control,
not only the end to be achieved, but the means to be used in reaching
such
an end. In addition, this Court has also considered the existing
economic
conditions prevailing between the parties, such as the inclusion of the
employee in the payroll.[2]
It
was
speculative and conjectural on the part
of the NLRC to declare petitioners' argument as "mere alibi." The
employment
contract presented by petitioners, while admittedly defective, did not
refer to any of the private respondents. No evidence was presented to
show
that petitioners engaged the services of private respondents.
As
regards the
matter of evidence, it is clear
that the Labor Arbiter relied solely on the bare allegations of the
parties
in their position papers in rendering his now assailed decision. Rule
V,
Sections 4 and 5(b) of The New Rules of Procedure of the National Labor
Relations Commission states:
Sec. 4. Determination of Necessity of
Hearing.
- Immediately after the submission by the parties of their position
papers/memorandum the Labor Arbiter shall motu proprio determine
whether
there is need for a formal trial or hearing. At this stage, he may, at
his discretion and for the purpose of making such determination, ask
clarificatory
questions to further elicit facts or information, including but not
limited
to the subpoena of relevant documentary evidence, if any from any party
or witness.
[b] If the Labor Arbiter finds no necessity
of
further hearing after the parties have submitted their position papers
and supporting documents, he shall issue an Order to that effect and
shall
inform the parties, stating the reasons therefor. In any event, he
shall
render his decision in the case within the same period provided in
paragraph
[a] hereof.
In Greenhills
Airconditioning and Services Inc. v.
NLRC,[3]
whose issues are similar to instant case, we stated that there was
grave
abuse of discretion on the part of the labor arbiter when he submitted
the case for decision solely on the basis of the position papers:
It
is of note
that certain important issues are
raised by the position papers filed before the labor arbiter among
which
are:
1. whether respondent Abellano was a project
employee whose employment was deemed ended when the project was
cancelled
or whether he was a regular employee;
2. If he was a regular employee, whether he
voluntarily
resigned as alleged by petitioners or was dismissed;
3. If he was dismissed, whether there were
valid
grounds for his dismissal.
The
nature of
the above issues shows that there was
indeed grave abuse of discretion on the part of the labor arbiter in
issuing
the order dated 18 September 1992 submitting the case for decision,
without
any hearing.
Article
221 of
the Labor Code states in part:
Art. 221. Technical rules not binding and
prior resort to amicable settlement.- In any proceeding
before
the Commission or any of the Labor Arbiters, the rules of evidence
prevailing
in courts of law or equity shall not be controlling and it is the
spirit
and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain
the
facts in each case speedily and objectively and without regard to
technicalities
of law or procedure, all in the interest of due process
In rendering
his now assailed decision, the labor
arbiter relied solely on the bare allegations of the parties in their
position
papers. There is nothing in the labor arbiter's decision to show how he
arrived at the conclusion that it was respondent Abellano's allegations
that deserved belief. The prudent and logical action which the labor
arbiter
should have taken was to set the case for hearing particularly on the
abovementioned
three [3] issues to avoid any impression of denial of due process to
either
or both of the parties.
While
it is true
that the employer has the burden
of proving the presence of valid grounds for dismissal of a worker, the
abovestated issues in this case require a hearing and reception of
evidence
before the issue of the validity of Abellano's dismissal can be
resolved.
The respondent NLRC in sustaining and affirming the decision of the
labor
arbiter which was arrived at without hearing on the vital issues
involved,
itself committed grave abuse of discretion.
The
same issues
are raised in the instant case
and the Labor Arbiter should have set the case for further presentation
of evidence considering the dearth of evidence supporting private
respondents'
claims.
Furthermore,
the
NLRC committed grave abuse of
discretion when it affirmed the Labor Arbiter's decision holding
petitioner
Almeda jointly and severally liable with Progress Homes. The Court has
held that corporate directors and officers are solidarily liable with
the
corporation for the termination of employment of employees only if the
termination is done with malice or in bad faith.[4]
The Labor Arbiter's decision failed to disclose why Almeda was made
personally
liable. There appears no evidence on record that he acted maliciously
or
in bad faith in terminating the services of private respondents.[5]
Petitioner Almeda, therefore, should not have been made personally
answerable
for the payment of private respondents' salaries.
WHEREFORE,
the
decision of respondent National
Labor Relations Commission is hereby set aside. The complaint of
private
respondents against herein petitioner is hereby remanded to the Labor
Arbiter
of Naga City for hearing, reception of evidence and decision. No
pronouncement
as to costs.
SO
ORDERED.
Regalado, Puno,
Mendoza and Torres, Jr.,
JJ
.,
concur.
______________________________
Endnotes
[1]
Zanotte Shoes v. NLRC, 241 SCRA 261 [1995]; Wiluga v. NLRC, 225 SCRA
537
[1993].
[2]
Sevilla v. Court of Appeals, 160 SCRA 171 [1988]; Visayan Stevedore
Trans.
Co. v. Court of Industrial Relations, 19 SCRA 426 [1967].
[3]
245 SCRA 390 [1995].
[4]
MAM Realty Development Corp. v. NLRC, 244 SCRA 803 [1995].
[5]
Sunio v. NLRC, 127 SCRA 390 [1984]; General Bank and Trust Co. v. CA,
135
SCRA 569 [1985].
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