Santos vs NLRC : 120944 : July 23, 1998 : J. Mendoza : Second Division

SECOND DIVISION

[G.R. No. 120944. July 23, 1998]

SPOUSES JOSE and CARMEN SANTOS, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION AND LUDOVICO PAMPLONA, respondents.

D E C I S I O N

MENDOZA, J.:

This is a petition for certiorari to annul and set aside the decision[1] of the National Labor Relations Commission, dated June 29, 1994, affirming the labor arbiter’s decision and ordering petitioners to pay private respondent Ludovico Pamplona wage differential, 13th month pay, service incentive leave pay, and attorney’s fees.

The facts are as follows:

Petitioner spouses Jose and Carmen Santos operate two gasoline stations and maintain a depot for the storage of gasoline in Iloilo City. Private respondent Ludovico Pamplona worked in said gasoline stations and at the depot. The question is whether he was an employee of petitioners or an independent contractor doing vulcanizing jobs.

The question arose because on November 13, 1992, private respondent filed a complaint against petitioners for underpayment of wages, non-payment of 13th month pay, and attorney’s fees.[2] His complaint was later amended to include nonpayment of overtime pay, premium pay for holiday, premium pay for rest day, holiday pay, service incentive leave pay, night shift differential, and separation pay.[3] In his position paper, private respondent alleged that he started working for petitioners on November 23, 1970 as a gasoline station helper at the latter’s gasoline station located at Fuentes-Ledesma Streets;[4] that he was later assigned to work as watchman at petitioners’ Getty Installation in Lapuz, Iloilo City in 1981;[5] that in 1985, he was transferred and assigned to petitioners’ gasoline station in Oton, Iloilo City where he worked as attendant until his retirement in 1991;[6] that he was petitioners’ employee, as defined in Art. 280 of the Labor Code, due to the fact that he had performed services which were necessary or desirable in the usual course of business of petitioners;[7] that he was paid wages below the prevailing minimum wage at that time;[8] that he was not given either overtime pay[9] or 13th month pay, retirement benefits, and other bonuses to which he was entitled.[10] In support of these allegations he submitted his affidavit and that of Bonifacio Mirasol.[11]

Petitioners filed a position paper, dated October 12, 1993, in which they denied that private respondent Pamplona was their employee and alleged that the latter was, in fact, a vulcanizer who had a shop beside their gasoline station in Oton, Iloilo; that private respondent was not on their payroll and had no SSS record.[12] The position paper was supported by the affidavit of petitioner Jose Santos.[13]

On October 27, 1993, the labor arbiter rendered a decision ordering petitioners to pay private respondent wage differential, 13th month pay, service incentive leave pay, and attorney’s fees. The dispositive portion of the decision reads:[14]

FOREGOING PREMISES CONSIDERED, judgment is hereby rendered directing the respondents to pay the complainant, jointly and severally, his benefits, to wit:

P41,157.28 as wage differential;

4,865.98 as 13th month pay;

445.00 as service incentive leave pay; or a total of

P51,115.09

Said respondents are further ordered to pay attorney’s fees equivalent to ten (10%) per centum of the total award or P5,111.50.

All other claims are hereby ordered DISMISSED.

SO ORDERED.

In finding the existence of an employer-employee relationship between the parties, the labor arbiter said:[15]

We give credence to the allegations of the complainant and Bonifacio Mirasol. It would be easy for the respondents to deny their relationship with the complainant. It would be very easy for the respondents to say that the complainant is not their employee. But respondents should bear in mind that complainant had been an instrument to their business. Including the name of the complainant in the payrolls is a unilateral act of the respondents. Whether or not the name of the complainant is included in their payroll is immaterial as long as the complainant is suffered to work for them. Covering the employees with Social Security System coverage [sic] is also a unilateral act of the respondents. Employers, more often than not, do not report their employees for SSS coverage.

Moreover, why should respondents allow complainant to live in Lapuz with their employees and in Oton when they bought the Oton Gasoline Station? Why should respondents allow complainant to live in Oton or Lapuz when they claim that complainant is an independent vulcanizer? Apparently, the respondents did these because [respondents] suffered the complainant to work for them.

On November 19, 1993, petitioners appealed to the National Labor Relations Commission.[16] On January 4, 1994, they filed a supplemental memorandum of appeal “to correct, supplement and amplify inadequate allegations and certain omissions” in their memorandum of appeal.[17] Attached to the supplemental memorandum are the following:[18]

EXHIBITS DESCRIPTION

“1” Complaint of Appellee dated 13 November, 1993;

“2” Notification and Summons dated 25 November, 1993;

“3” Notice of Hearing dated 16 February, 1993;

“4” Notice of Hearing dated 05 May, 1993;

“5” Notice of Hearing dated 07 June, 1993;

“6” Order dated 19 July, 1993

“7” Motion for Extension of Time to File Position Paper dated 05 August 1993 filed by complai-nant;

“8” Motion to Amend Complaint dated 12 August, 1993 filed by Complainant;

“9” Position Paper for the Complainant dated 19 August, 1993;

“10” Affidavit of appellee Ludovico Pamplona dated 12 August 1993;

“11” Affidavit of Bonifacio Mirasol dated 17 August, 1993;

“12” Order dated 24 September, 1993;

“13” Motion for Reconsideration of the Order dated September 24, 1993, filed by respondents-appellants;

“14” Position Paper for the Appellants dated 12 October, 1993;

“15” Affidavit of appellant Jose Santos dated 12 October, 1993;

“16” Opposition to the Motion for reconsideration dated 23 Oct. 1993;

“17” Reply to Opposition to the Motion for Reconsidera-tion dated 05 Nov. 93;

“18” Decision dated 27 October, 1993;

“19” Affidavit of Rodolfo Mirasol dated 28 December, 1993;

“20” Affidavit of Camelo Terente dated 28 December, 1993;

“21” Affidavit of Nestor Bautista dated 28 December, 1993;

“22” Affidavit of Magela A. Malaca dated 28 December, 1993;

“23” Affidavit of Gerondio Mente dated 28 December, 1993;

“24” Affidavit of Juanito Navarro dated 28 December, 1993;

“25” Affidavit of Mario Martinez dated 28 December, 1993;

“26” Affidavit of Bonifacio Mirasol dated 17 December, 1993;

“26-A” Official translation of Annex “26”;

“27” Certification issued by Pilipinas Shell Petro-leum Corporation;

“28” Certification issued by the Department of Labor and Employment.

Private respondent filed an opposition to petitioners’ “Motion for Leave to File and for Admission of Supplemental Memorandum of Appeal.”[19]

On June 29, 1994, the NLRC rendered a decision affirming that of the labor arbiter. The NLRC denied petitioners’ motion for leave to adduce additional evidence.[20] Petitioners filed a motion for reconsideration, but it was likewise denied by the NLRC in its resolution dated May 2, 1995.[21] Hence, this petition.

Petitioners contend:

1. THE HONORABLE COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING PETITIONERS’ MOTION FOR LEAVE TO FILE AND FOR ADMISSION OF SUPPLEMENTAL MEMORANDUM OF APPEAL;

2. THE HONORABLE COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT AN EMPLOYER-EMPLOYEE RELATIONSHIP EXISTED BETWEEN HEREIN PETITIONERS AND RESPONDENT LUDOVICO PAMPLONA DESPITE WANT OF EVIDENCE;

3. THE HONORABLE COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN HOLDING THAT RESPONDENT LUDOVICO PAMPLONA IS ENTITLED TO WAGE DIFFERENTIAL, 13TH MONTH PAY AND SERVICE INCENTIVE LEAVE WITH PAY;

Petitioners argue that since they filed their memorandum of appeal within the ten-day reglementary period, their subsequent pleadings seeking to introduce new evidence should have been admitted by the NLRC. They claim that the new evidence would show the lack of employer-employee relationship between them and private respondent Pamplona; that a hearing should have been conducted by the labor arbiter considering their denial that an employer-employee relationship existed between them and private respondent; that there was no legal or factual basis for the awards made by the labor arbiter; and, that they should not be bound by the gross negligence of their former counsel.

On the other hand, private respondent contends that the supplemental memorandum of appeal of petitioner was filed beyond the ten-day reglementary period provided by law; that petitioners are bound by their counsel’s failure to present in the NLRC the additional evidence they sought to introduce; that, in fact, the nonproduction of the evidence was a strategy consciously adopted by petitioners’ counsel with their conformity; that new evidence should not really be allowed on appeal; that petitioners should have asked for a full-blown hearing earlier; that the existence of an employer-employee relationship between him and petitioners was sufficiently proved; and, that the factual findings of the NLRC and the labor arbiter on this matter should be accorded great weight.

The Solicitor General, in behalf of the NLRC, filed a comment in which he argues that the factual findings of the NLRC and the labor arbiter are based on substantial evidence and that petitioners have not given any justifiable reason for the allowance in the NLRC of additional evidence for them.

Indeed, in his affidavit,[22] private respondent stated:

I, LUDOVICO P. PAMPLONA, of legal age, single, Filipino and resident of Zone 5, Molo Blvd., Iloilo City after having been sworn to in accordance with law do hereby depose and say, that:

1. I started working on November 23, 1970 as a gasoline station helper from 2:00 PM to 10:00 PM and 4:00 AM to 7:00 AM, the whole week at the Caltex Gasoline Station located in Fuentes-Ledesma Sts., Iloilo City owned and operated by Spouses Jose and Carmen Santos;

2. I was transferred in 1981 as a watchman by Spouses Jose and Carmen Santos to the Getty Installation in Lapuz, Iloilo City which they rented and used for storing petroleum products;

3. Aside from being a watchman in that installation, I [was] also made to work on Saturdays and Sundays receiving purchase orders for gasoline and other petroleum products sold by the aforementioned spouses from their stored gasoline and other petroleum products in that installation;

4. When the said rent over the Getty Installation expired in 1985 I was assigned and transferred to the gasoline station in Oton, Iloilo owned and operated by the Spouses Jose and Carmen Santos and I worked in that gasoline station from 4:00 AM to 10:00 AM and from 2:00 PM to 7:00 PM until my retirement in August, 1991;

5. I received a salary of twenty pesos per week when I was working at the Caltex Gasoline Station at Fuentes-Ledesma, Iloilo City: at the Getty Installation, my salary was one hundred twenty pesos per week, and in the Oton Gasoline Station my salary was one hundred pesos per week until my retirement in August, 1991;

6. After working for more than twenty years (20) in the businesses of Spouses Jose and Carmen Santos, I retired from work in 1991 at the age of seventy-two (72), because of old age and my frail body which had been exposed to gasoline and other petroleum products can no longer sustain the daily grind of a gasoline station attendant;

7. I intended to enjoy my retirement secured that I will be supported by retirement benefits and privileges mandated by law, hence I demanded from my employer my retirement pay;

8. But to my disappointment and dismay Spouses Jose and Carmen Santos spurned my plea to be paid of my retirement benefits;

9. Adding to my anguish, I found out that the salary I was receiving during the time I was working with my employers were below the minimum wage provided by law, and the mentioned spouses did not pay me any overtime pay, night shift differentials, 13th month pay and other premiums mandated by labor laws;

10. I also found that I was not reported as an employee in the business of Spouses Jose and Carmen Santos to the Social Security System hence as a consequence I could not claim any benefit from the Social Security System;

11. I am executing this affidavit to attest to the fact that Spouses Jose and Carmen Santos, as my employers paid my wages not in accordance with the minimum wage law, nor did they pay me overtime pay, night shift differentials, holiday pay, and other premiums provided by the Labor Code; furthermore Spouses Jose and Carmen Santos failed to pay me retirement benefits and did not report my employment to the Social Security System.

IN WITNESS WHEREOF, I have hereunto set my hand this 12th day of August, 1993, in Iloilo City, Philippines.

LUDOVICO P. PAMPLONA

(Affiant)

Private respondent’s witness, Bonifacio Mirasol, stated in his affidavit:[23]

I, BONIFACIO MIRASOL of legal age, Filipino, married and a resident of Tabuc Suba, Jaro, Iloilo City after having been sworn to in accordance with law do hereby depose and say, that:

I was employed as driver of a gasoline tanker truck by Spouses Jose and Carmen Santos in their business from February 1977 up to the time when I retired in 1990;

Since the time I was employed in 1972 with the above-mentioned spouses I came to know already a certain employee of my employer Spouses Jose and Carmen Santos by the name of Ludovico Pamplona;

Ludovico Pamplona was a gasoline station helper in the gasoline station of my employer in Fuentes-Ledesma Sts., Iloilo City while I was the driver of the first gasoline tanker of my employer and part of my work was also to deliver gasoline and other petroleum products to different stations including that in Fuentes-Ledesma Sts., Iloilo City, owned and operated by Sps. Jose and Carmen Santos;

Sometime in 1981 Ludovico Pamplona was assigned as watchman in the Getty Installation at Lapuz, Iloilo City, rented by Spouses Jose and Carmen Santos and used by them for storing gasoline and other petroleum products;

I personally knew that Ludovico Pamplona was assigned there because the installation was just across the street from the Caltex Depot where I got gasoline and other petroleum products considering my tanker at that time was a Caltex tanker, and sometimes I parked my tanker in the Getty Installation because it was rented also by my employer;

And when I returned from out of town trips early in the morning at around 4:00 AM in the gasoline station at Fuentes-Ledesma Sts., Iloilo City, Ludovico Pamplona was already attending the gas pumps which opened at 4:00 AM, similarly when I returned late at night Ludovico Pamplona was still working at the gasoline station which closed at around 10:00 PM and when I returned at anytime of the day I always found [sic] Mr. Pamplona manning the gas pumps or doing other work at the said gasoline station;

Since I also went to the Getty Installation when Ludovico Pamplona was a watchman there he was the one took care all of the petroleum products stored and he was the one who received purchase orders on Saturdays and Sundays;

Likewise, I delivered gasoline at the Oton gasoline station owned and operated by the Spouses Jose and Carmen Santos and I came to know starting in 1985 that Ludovico Pamplona was transferred and assigned there because he was the one who climbed the top of the gasoline tanker to check its content before it will be transferred to the underground tank of the gasoline station;

I was able to know that Ludovico Pamplona was transferred to the gasoline station in Oton, Iloilo because the rent over the Getty installation expired and when I retired in 1990 he was still working there until his retirement also in 1991;

Out of my concern for Ludovico Pamplona who was my co-employee in the businesses of Jose and Carmen Santos, I asked him sometimes if he was reported to the Social Security System (SSS), and if he was only paying SSS premiums and our employer was paying their counterpart contributions and he said he did not know if he was reported in the SSS with an added assurance that it will be taken care of by our employer, Spouses Jose and Carmen Santos;

Every December, during our Christmas party, it was customary and natural for Spouses Jose and Carmen Santos to declare in front of other employees, guests and their immediate relatives that we, Ludovico Pamplona, Roberto Bravo and myself were their most loyal and trusted employees and their businesses prospered because of our efforts and dedication;

In fact the three of us were given medallion [sic] because of our exemplary service which they could no longer refuse to notice nor take for granted;

I am executing this affidavit to attest to the truth and fact that Ludovico Pamplona was an employee of Spouses Jose and Carmen Santos continuously from 1970 up to his retirement in 1991 in their various businesses so that he Ludovico Pamplona could claim whatever benefits accruing to him as mandated by labor law;

IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of August 1993, in Iloilo City, Philippines.

(SGD) BONIFACIO MIRASOL

(Affiant)

A Petition for Certiorari under Rule 65 of the Rules of Court will lie only where a grave abuse of discretion or an act without or in excess of jurisdiction on the part of the respondent Commission is clearly shown.[24] It is axiomatic that findings of fact made by labor arbiters and affirmed by the National Labor Relations Commission are not only entitled to great respect, but even finality, and are considered binding on this Court if the same is supported by substantial evidence.[25]

The question of whether an employer-employee relationship exists is a question of fact.[26] No particular form of evidence is required to prove the existence of such employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted.[27]

The elements considered in determining the existence of an employer-employee relationship are present in this case, 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.[28]

Petitioners deny that private respondent Ludovico Pamplona was ever their employee. They claim that he was not on their payroll and that he did not have any SSS record. The payrolls were not, however, even presented in evidence, either before the labor arbiter or before the NLRC. Petitioners cite the ruling in Sevilla v. Court of Appeals.[29] In that case, however, it was not only admitted that Sevilla was not on the company’s payroll, but it was likewise found that she was not subject to the control of the alleged employer. In contrast, it has not been really proven that private respondent was not included in the payroll.

Nor is the fact that private respondent has no SSS records conclusive of the question whether he was an employee of petitioners. For the fact is that he did not have any SSS record because his employment was not reported to the SSS by petitioners. To find that private respondent was not petitioners’ employee because he did not have a record of employment in the SSS, when the duty of reporting his employment is that of petitioners, is to reward law violations. Private respondent’s allegation was corroborated by Bonifacio Mirasol who, in his affidavit, stated:

Nor was it an abuse of discretion for the NLRC to deny petitioners’ motion for leave to submit additional evidence to disprove the existence of an employer-employee relationship. It is true that, in some cases, the power of the NLRC to admit additional evidence on appeal has been upheld, but in those cases the failure to submit the evidence was justified.[30] In New Valley Times Press v. NLRC,[31] which petitioners cite, the party’s failure to present evidence before the labor arbiter was justified. The person in possession of the pertinent documents was ill and had to go abroad for treatment. Counsel was in his mid-eighties and himself was suffering from the debilitating effects of old age. On the other hand, the new counsel did not immediately come to know about the existence of the documents which had to be submitted in evidence.

In contrast, petitioners had every opportunity to submit before the labor arbiter’s office the evidence which they sought to adduce in the NLRC. They did not even try to submit their evidence together with their appeal memorandum but only did so with a supplemental one which they filed more than a month after their main memorandum on appeal had been filed.

Petitioners cannot claim that the failure to present the evidence before the labor arbiter’s office was due to their counsel’s mistake. They invoke the ruling in Legarda v. Court of Appeals,[32] but the negligence of counsel in that case was gross and palpable. As this Court said in that case:[33]

Nothing is more settled than the rule that the mistake of a counsel binds the client. It is only in case of gross or palpable negligence of counsel when the courts must step in and accord relief to a client who suffered thereby.

What happened there was that the defendant’s counsel did not only fail to file an answer, as a result of which a judgment by default was entered against the defendant, but also failed to appeal from the judgment or to file a petition for relief therefrom.

Nothing of that sort happened in this case. The general rule should, therefore, apply: petitioners are bound by the mistake of their counsel. In fact, it is doubtful there was an oversight in not presenting the evidence which petitioners sought to introduce later. As accurately observed by private respondent, the nonproduction of the evidence was calculated. It was part of counsel’s strategy adopted with the knowledge and consent of petitioners.

Petitioners’ contention that there should have been a full-blown trial is likewise untenable. Under Rule VII, §3 of the Revised Rules of the NLRC, labor arbiters have the power to “determine whether there is a need for a formal hearing or investigation . . . after the submission by the parties of their position papers and supporting proofs.”[34] The labor arbiter’s reasons for considering the case submitted for decision are stated in the following portion of his decision:[35]

. . . Hearings were scheduled and on the hearing on 08 March 1993, respondents [now petitioners] manifested to submit their position paper within fifteen (15) days. Again hearings were scheduled and on 19 July 1993 an Order was issued directing parties to file their position paper within twenty (20) days. On 05 August 1993, counsel for the complainant [now private respondent] filed a motion for extension of time to file position paper and eventually filed his position paper on 23 August 1993. The [petitioners], despite receipt of the order failed to file their position paper, so that on 25 August 1993, an Order was again issued directing counsel to file his position paper within fifteen (15) days from receipt of the Order. Receipt of the Order dated 25 August 1993, notwithstanding, counsel for the [petitioners] failed to file [their] position paper. Meanwhile, counsel for the complainant filed a motion to submit case for immediate resolution. On 24 September 1993, an Order was issued considering the case as submitted for resolution on the basis of the evidence available on record. The Order was received by counsel for the [petitioners] and on 14 October 1993 counsel filed his motion for reconsideration of the Order dated September 24, 1993 and position paper.

At any rate, if petitioners thought they should submit additional evidence, they should have asked for a chance to do so. The fact, however, is that after belatedly filing their position paper in the labor arbiter’s office, they did nothing more and, in fact, agreed to submit the case for decision.

The mere fact that petitioners denied the allegations in private respondent’s affidavit and that of Bonifacio Mirasol did not necessarily warrant the holding of a full-blown hearing considering the above-mentioned observations of the labor arbiter. In addition, it cannot be said that the NLRC and the labor arbiter gravely abused their discretion by relying only on said affidavits of private respondent and Bonifacio Mirasol. As we have said:[36]

This Court will not ordinarily disturb findings of fact of administrative agencies like the public respondents. It is axiomatic that in their exercise of adjudicative functions they are not bound by strict rules of evidence and of procedure. When confronted with conflicting versions of factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received. [Halili v. Floro, 90 Phil. 245 (1951); Estate of Florencio Buan v. Pampanga Bus Co. and La Mallorca, 99 Phil. 373 (1956); Luzon Brokerage Co. v. Luzon Labor Union, 117 Phil. 118 (1963), 7 SCRA 116].

WHEREFORE, petition is DISMISSED.

SO ORDERED.

Regalado, (Chairman), Melo, Puno, and Martinez, JJ., concur.