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[G.R. No. 139755. November 24, 1999]

TASHI GARMENTS, INC. vs. ARMA, et al.

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated NOV 24, 1999.

G.R. No. 139755(Tashi Garments, Inc., et al. vs. Elaine Arma, et al.)

This is a petition for review of the decision, dated February 9, 1999, of the Court of Appeals. The facts are as follows:

Petitioner Tashi Garments, Inc. (TGI) is a corporation engaged in the manufacture of ready-to-wear garments. Petitioner Jesusa dela Cruz is an officer of petitioner TGI. Respondents are workers of petitioner TGI who were hired under contracts with definite periods. On December 30, 1994, petitioner TGI terminated the services of respondents on the ground that their contracts had expired. Respondents filed a complaint for illegal dismissal with the Arbitration Branch of the National Labor Relations Commission (NLRC). In response, petitioners claim that there was no employer-employee relationship between TGI and respondents, the latter being independent contractors. In his decision, dated November 28, 1998, the Labor Arbiter found that petitioner TGI used the devise of periodically renewing the contracts of respondents to avoid recognizing their regular status. Hence, under Art. 280 of the Labor Code, respondents are considered regular employees who could not be dismissed except for cause.

Petitioners appealed to the NLRC, which in a resolution, dated June 30, 1997, reversed the decision of the Labor Arbiter. The NLRC ruled that contracts with definite periods are not prohibited by law, and since the contracts of respondents had expired, the termination of their services was valid.

Respondents filed a motion for reconsideration, which the NLRC denied in a resolution, dated October 21, 1997, on the ground that it was filed out of time. They then brought the case to this Court on certiorari. Pursuant to the ruling in St. Martin Funeral Home v. National Labor Relations Commission, G.R. No. 130866, September 16, 1998, the case was referred to the Court of Appeals which, in a decision rendered on February 9, 1999, set aside the resolution of the NLRC and held respondents to be regular employees and their dismissal to be illegal. Hence, this petition for review on certiorari.

First. Petitioners point out that Atty. Anita Montevilla, the former counsel of respondents, received a copy of the decision of the NLRC on July 11, 1997, but respondents' motion for reconsideration was filed only on October 10, 1997. Hence, the decision of the NLRC had become final and the Court of Appeals should have dismissed respondents' petition for certiorari.

However, as the Court of Appeals held in its resolution of July 15, 1999 denying petitioners' motion for reconsideration, Atty. Montevilla had misrepresented to respondents that she had filed a motion for reconsideration when in truth she had not. Upon learning the truth, respondents immediately referred their case to the Public Attorney's Office (PAO), which filed the motion for reconsideration on October 10, 1997. This finding is supported by an affidavit of Elaine Arma, one of the respondents.

A party is not bound by the representation of his counsel when as a result of the unfaithfulness of the latter, the former is deprived of his day in court (Cf. Amil v. Court of Appeals, G.R. No. 125272, October 7, 1999). In this case, respondents, upon learning that their former counsel had not filed a motion for reconsideration, lost no time in referring their case to the PAO, which filed such a motion.

Second. Petitioners also maintain that, in view of the nature of a special civil action for certiorari; the Court of Appeals did not have the authority to review the factual conclusions of the NLRC. To be sure, great weight, and even finality, is ordinarily given to the factual conclusions of administrative agencies such as the NLRC. However, the Court of Appeals has ample authority to review such factual conclusions upon giving due course to a special civil action for certiorari if the same are whimsical, capricious, and arbitrary to a degree amounting to grave abuse of discretion (See Llobrera v. National Labor Relations Commission, 162 SCRA 788 [1988]). It may even conduct hearings in the course of resolving questions of fact (Rule 46, �6, Rules of Court). It should be pointed out that in the present case, there was a variance between the factual findings of the Labor Arbiter and those of the NLRC, which made it necessary for the Court of Appeals to review the factual findings of the NLRC in the present case. The instant petition has not sufficiently shown any reversible error on the part of the Court of Appeals in reaching its conclusions.

In determining the existence of employer-employee relationship, the most important factor is whether the employer controls the employee not only as to the result of the work but also as to the means and methods by which the same is to be accomplished (Makati Haberdashery, Inc. v. NLRC, 179 SCRA 448 [1989]). The contracts of respondents expressly provide that they are required to "comply with all the rules and regulations of the MANAGEMENT [TGI], especially those governing the performance of duties." Clearly, respondents are not independent contractors as claimed by petitioners but employees of petitioner TGI.

In Baguio Country Club Corporation v. NLRC (206 SCRA 643 [1992]), this Court held that the repeatedly rehiring, continuing need for the services, and performance of tasks of an employee for at feast a year entitle him to be considered a regular employee. In this case, the Court of Appeals, noting the periodic renewal of the Contracts the respondents in an apparent attempt to prevent them from attaining regular status, correctly found them to be regular employees and then dismissal illegal, thus:

As shown in the service contract of petitioner Elaine Arma, she was first hired in July 1990 to October 1990, them from February 1992 to May 1992, and then from May 1991 up to October 1994 and later on from October 1994 to March 21, 1995. Her services were terminated on December 30, 1994. Most of the petitioners were similarly situated. They were hired with contracts that were renewed several times. Evidently, petitioners had been employed for one year or even more, some of them performing the necessary task of sewing garments and are, therefore, considered as regular employees of private respondent. The repeated hiring and the continuing need for petitioners' services are sufficient evidence of the necessity and indispensability of their services to private respondent's business.

In accordance with the ruling in Tucor Industries, Inc. v. NLRC (197 SCRA 296 [1991]), the appellate court found that-

Private respondent claims that these petitioners were hired to help in the manufacture of office uniforms for the Philippine Postal Corporation. These service contracts, however, do not indicate that petitioners were hired for a specific project. Private respondent failed to present the bidding contract with the Philippine Postal Corporation to at least reconcile the period when the contract was in fact awarded to the company and the hiring of petitioners. In the said service contracts of petitioners, the term of the completion or termination of the alleged Philippine Postal Corporation bidding project was not determined at the start of the employment. It has been held that where the contract of employment does not specify the undertaking and the termination or completion of which was not determined at the start of the employment, the employment contract is defective.

The Court of Appeals likewise correctly dismissed petitioners' allegations that respondents had resigned, that they had executed quitclaims, and that there is no basis for the payment to them of backwages, salary differentials, 13th month pay, legal holiday pay, and service incentive pay. In the first place, the assertion of petitioners that respondents validly resigned contradicts their contention that the latter's services were terminated because their contracts had expired. Petitioners also stated in their position paper that, contrary to the usual practice in the company, respondents were not required to execute resignation letters upon the expiration of their contracts. Secondly, respondents have not been shown to have executed quitclaims. Thirdly, the Labor Arbiter ruled that as respondents were paid below the minimum wage, their backwages, salary differentials, 13th month pay, legal holiday pay, and service incentive pay should be computed based on the minimum wage then in effect. Since petitioners failed to prove that respondent were paid their proper wages, the Court of Appeals properly affirmed the Labor Arbiter.

Third. Petitioners likewise argue that as a legal entity, petitioner TGI has a personality separate and distinct from petitioner Dela Cruz. However, they did not raise this issue either before the Labor Arbiter or the NLRC. Hence, they are barred from raising it before the Court of Appeals and this Court.

WHEREFORE, the petition is DENIED.

Very truly yours,

(Sgd.) TOMASITA M. DRIS

Clerk of Court

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