Republic of the
Supreme Court
ALBERT TENG, doing business under the firm name ALBERT TENG FISH
TRADING, and EMILIA TENG-CHUA,
Petitioners, -
versus - ALFREDO S. PAHAGAC, EDDIE D.
NIPA, Respondents. |
G.R. No. 169704
Present: CARPIO
MORALES, J., Chairperson, BRION, BERSAMIN, VILLARAMA, JR., and SERENO, JJ. Promulgated: November 17, 2010 |
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D E C I S I O N
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BRION, J.: |
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Before this Court is a Petition for Review
on Certiorari[1]
filed by petitioners Albert Teng Fish Trading, its owner Albert Teng, and its
manager Emilia Teng-Chua, to reverse and set aside
the
BACKGROUND FACTS
Albert Teng Fish Trading is engaged in deep sea fishing and, for this
purpose, owns boats (basnig),
equipment, and other fishing paraphernalia. As owner of the business, Teng
claims that he customarily enters into joint venture agreements with master
fishermen (maestros) who are skilled
and are experts in deep sea fishing; they take charge of the management of each
fishing venture, including the hiring of the members of its complement. He
avers that the maestros hired the
respondent workers as checkers to
determine the volume of the fish caught in every fishing voyage.[4]
On
The respondent workers alleged that
Teng hired them, without any written employment contract, to serve as his “eyes
and ears” aboard the fishing boats; to classify the fish caught by bañera; to report to Teng via radio communication the classes and
volume of each catch; to receive instructions from him as to where and when to
unload the catch; to prepare the list of the provisions requested by the maestro and the mechanic for his
approval; and, to procure the items as approved by him.[5]
They also claimed that they received regular monthly salaries, 13th
month pay, Christmas bonus, and incentives in the form of shares in the total
volume of fish caught.
They asserted that sometime in
September 2002, Teng expressed his
doubts on the correct volume of fish caught in every fishing voyage.[6] In
December 2002, Teng informed them that their services had been terminated.[7]
In
his defense, Teng maintained that he did not have any hand in hiring the
respondent workers; the maestros, rather than he, invited them to
join the venture. According to him, his role was clearly limited to the
provision of the necessary capital, tools and equipment, consisting of basnig, gears, fuel, food, and other
supplies.[8]
The
VA rendered a decision[9] in
Teng’s favor and declared that no employer-employee relationship existed
between Teng and the respondent workers. The dispositive portion of the VA’s
WHEREFORE, premises considered, judgment is
hereby rendered dismissing the instant complaint for lack of merit.
It follows also, that all other claims are
likewise dismissed for lack of merit.[10]
The respondent workers received the
VA’s decision on
Under Executive Order No. 126, as amended by
Executive Order No. 251, and in order to implement Article 260-262 (b) of the
Labor Code, as amended by R.A. No. 6715, otherwise known as the Procedural
Guidelines in the Conduct of Voluntary Arbitration Proceedings, inter alia:
An award or the Decision of the Voluntary
Arbitrators becomes final and executory after ten (10) calendar days from
receipt of copies of the award or decision by the parties (Sec. 6, Rule VII).
Moreover,
the above-mentioned guidelines do not provide the remedy of a motion for
reconsideration to the party adversely affected by the order or decision of
voluntary arbitrators.[14]
On
WHEREFORE, premises considered, the petition is
granted. The questioned decision of the Voluntary Arbitrator dated
SO
ORDERED.[15]
Teng moved to reconsider the CA’s
decision, but the CA denied the motion in its resolution of
a. the VA’s decision is not subject to a
motion for reconsideration; and
b. no employer-employee relationship
existed between Teng and the respondent workers.
Teng contends that the VA’s decision
is not subject to a motion for reconsideration in the absence of any specific
provision allowing this recourse under Article 262-A of the Labor Code.[17]
He cites the 1989 Procedural Guidelines,
which, as the VA declared, does not provide the remedy of a motion for
reconsideration.[18] He
claims that after the lapse of 10 days from its receipt, the VA’s decision
becomes final and executory unless an appeal is taken.[19]
He argues that when the respondent workers received the VA’s decision on
Teng
further insists that the VA was correct in ruling that there was no
employer-employee relationship between him and the respondent workers. What he
entered into was a joint venture agreement with the maestros, where Teng’s role was only to provide basnig, gears, nets, and other tools and
equipment for every fishing voyage.[22]
THE COURT’S RULING
We resolve to deny the petition for lack of merit.
Article
262-A of the Labor Code does not prohibit the filing of a motion for
reconsideration.
On
originally worded as:
Art. 263 x x x Voluntary arbitration awards
or decisions shall be final,
unappealable, and executory.
As amended, Article 263 is now
Article 262-A, which states:
Art. 262-A. x x x [T]he award or decision x x
x shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from
receipt of the copy of the award or decision by the parties.
Notably, Article 262-A deleted the
word “unappealable” from Article
263. The deliberate selection of the language in the amendatory act differing
from that of the original act indicates that the legislature intended a change
in the law, and the court should endeavor to give effect to such intent.[24] We recognized the intent of the change of
phraseology in Imperial Textile Mills,
Inc. v. Sampang,[25] where
we ruled that:
It is true that the present rule [Art. 262-A] makes the voluntary arbitration award final and executory after ten calendar days from receipt of the copy of the award or decision by the parties. Presumably, the decision may still be reconsidered by the Voluntary Arbitrator on the basis of a motion for reconsideration duly filed during that period.[26]
In
Coca-Cola Bottlers Phil., Inc., Sales Force Union-PTGWO-Balais v. Coca-Cola
Bottlers Philippines, Inc.,[27]
we likewise ruled that the VA’s decision may
still be reconsidered on the basis of a motion for reconsideration seasonably
filed within 10 days from receipt thereof.[28] The seasonable filing of a motion for
reconsideration is a mandatory requirement to forestall the finality of such
decision.[29] We
further cited the 1989 Procedural Guidelines which implemented Article 262-A, viz:[30]
[U]nder Section 6, Rule VII of the same
guidelines implementing Article 262-A of the Labor Code, this Decision, as a
matter of course, would become final and executory after ten (10) calendar days
from receipt of copies of the decision by the parties x x x unless, in the meantime, a motion for
reconsideration or a petition for review to the Court of Appeals under Rule 43
of the Rules of Court is filed within the same 10-day period. [31]
These
rulings fully establish that the absence of a categorical language in Article
262-A does not preclude the filing of a motion for reconsideration of the VA’s
decision within the 10-day period. Teng’s allegation
that the VA’s decision had become final and executory by the time the
respondent workers filed an appeal with the CA thus fails. We consequently rule
that the respondent workers seasonably filed a motion for reconsideration of
the VA’s judgment, and the VA erred in denying the motion because no motion for
reconsideration is allowed.
The
Court notes that despite our interpretation that Article 262-A does not
preclude the filing of a motion for reconsideration of the VA’s decision, a
contrary provision can be found in Section 7, Rule XIX of the Department of
Labor’s Department Order (DO) No. 40, series of 2003:[32]
Rule
XIX
Section 7. Finality of
Award/Decision. – The decision, order, resolution or award of the voluntary
arbitrator or panel of voluntary arbitrators shall be final and executory after
ten (10) calendar days from receipt of the copy of the award or decision by the
parties and it shall not be subject of a
motion for reconsideration.
Presumably on the basis of DO 40-03, the 1989
Procedural Guidelines was revised in 2005 (2005
Procedural Guidelines),[33]
whose pertinent provisions provide that:
Rule VII –
DECISIONS
Section
6. Finality
of Decisions. – The decision of the Voluntary Arbitrator shall be final
and executory after ten (10) calendar days from receipt of the copy of the
decision by the parties.
Section
7.
Motions for Reconsideration. – The decision of the Voluntary Arbitrator
is not subject of a Motion for
Reconsideration.
We are surprised that neither the VA
nor Teng cited DO 40-03 and the 2005 Procedural Guidelines as authorities for
their cause, considering that these were the governing rules while the case was
pending and these directly and fully supported their theory. Had they done so,
their reliance on the provisions would have nevertheless been unavailing for
reasons we shall now discuss.
In the exercise of its power to
promulgate implementing rules and regulations, an implementing agency, such as
the Department of Labor,[34]
is restricted from going beyond the terms of the law it seeks to implement; it
should neither modify nor improve the law. The agency formulating the rules and
guidelines cannot exceed the statutory authority granted to it by the
legislature.[35]
By allowing a 10-day period, the
obvious intent of Congress in amending Article 263 to Article 262-A is to
provide an opportunity for the party adversely affected by the VA’s decision to
seek recourse via a motion for
reconsideration or a petition for review under Rule 43 of the Rules of Court
filed with the CA. Indeed, a motion for reconsideration is the more appropriate
remedy in line with the doctrine of exhaustion of administrative remedies. For this reason, an appeal from
administrative agencies to the CA via
Rule 43 of the Rules of Court requires exhaustion of available remedies[36] as
a condition precedent to a petition under that Rule.
The requirement that administrative
remedies be exhausted is based on the doctrine that in providing for a remedy
before an administrative agency, every opportunity must be given to the agency
to resolve the matter and to exhaust all opportunities for a resolution under
the given remedy before bringing an action in, or resorting to, the courts of
justice.[37] Where Congress has not clearly required
exhaustion, sound judicial discretion governs,[38]
guided by congressional intent.[39]
By disallowing reconsideration of the
VA’s decision, Section 7, Rule XIX of DO 40-03 and Section 7 of the 2005
Procedural Guidelines went directly against the legislative intent behind
Article 262-A of the Labor Code. These rules deny the VA the chance to correct himself[40]
and compel the courts of justice to prematurely intervene with the action of an
administrative agency entrusted with the adjudication of controversies coming
under its special knowledge, training and specific field of expertise. In this era of clogged court dockets, the need for
specialized administrative agencies with the special knowledge, experience and
capability to hear and determine promptly disputes on technical matters or
intricate questions of facts, subject to judicial review, is indispensable.[41]
In Industrial Enterprises, Inc. v. Court
of Appeals,[42]
we ruled that relief must first be obtained in an administrative proceeding
before a remedy will be supplied by the courts even though the matter is within
the proper jurisdiction of a court.[43]
There exists an employer-employee relationship between
Teng and the respondent workers.
We agree with the CA’s finding that
sufficient evidence exists indicating the existence of an employer-employee
relationship between Teng and the respondent workers.
While Teng alleged that it was the maestros who hired the respondent workers,
it was his company that issued to the respondent workers identification cards (IDs) bearing their names as employees
and Teng’s signature as the employer. Generally, in a business establishment,
IDs are issued to identify the holder as a bona
fide employee of the issuing entity.
For the 13 years that the respondent workers
worked for Teng, they received wages on a regular basis, in addition to their
shares in the fish caught.[44]
The worksheet showed that the respondent workers received uniform amounts
within a given year, which amounts annually increased until the termination of
their employment in 2002.[45]
Teng’s claim that the amounts received by the respondent workers are mere
commissions is incredulous, as it would mean that the fish caught throughout
the year is uniform and increases in number each year.
More importantly, the element of
control – which we have ruled in a number of cases to be a strong indicator of
the existence of an employer-employee relationship – is present in this case.
Teng not only owned the tools and equipment, he directed how the respondent workers
were to perform their job as checkers; they, in fact, acted as Teng’s eyes and
ears in every fishing expedition.
Teng cannot hide behind his argument
that the respondent workers were hired by the maestros. To consider the respondent workers as employees of the maestros would mean that Teng committed
impermissible labor-only contracting. As a policy, the Labor Code prohibits
labor-only contracting:
ART. 106. Contractor or Subcontractor – x x x The
Secretary of Labor and Employment may, by appropriate regulations, restrict or
prohibit the contracting-out of labor.
x x x x
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 persons 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.
Section 5
of the DO No. 18-02,[46]
which implements Article 106 of the Labor Code, provides:
Section 5.
Prohibition against labor-only
contracting. – Labor-only contracting is hereby declared prohibited.
For this purpose, labor-only contracting shall refer to an arrangement where
the contractor or subcontractor merely recruits, supplies or places workers to
perform a job, work or service for a principal, and any of the following
elements are present:
(i)
The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and the
employees recruited, supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main business of the
principal; or
(ii)
The contractor does not exercise the right to control over the
performance of the work of the contractual employee.
In the present case, the maestros did not have any substantial capital
or investment. Teng admitted that he solely provided the capital and equipment,
while the maestros supplied the
workers. The power of control over the respondent workers was lodged not with
the maestros but with Teng. As
checkers, the respondent workers’ main tasks were to count and classify the
fish caught and report them to Teng. They performed tasks that were necessary
and desirable in Teng’s fishing business. Taken together, these incidents
confirm the existence of a labor-only contracting which is prohibited in our
jurisdiction, as it is considered to be the employer’s attempt to evade
obligations afforded by law to employees.
Accordingly, we hold that
employer-employee ties exist between Teng and the respondent workers. A finding
that the maestros are labor-only
contractors is equivalent to a finding that an employer-employee relationship
exists between Teng and the respondent workers. As regular employees, the
respondent workers are entitled to all the benefits and rights appurtenant to regular
employment.
The dismissal of an
employee, which the employer must validate, has a twofold requirement: one is substantive, the other is procedural.[47] Not only must the dismissal be for a just or
an authorized cause, as provided by law; the rudimentary requirements of due
process – the opportunity to be heard and to defend oneself – must be observed
as well.[48] The
employer has the burden of proving that the dismissal was for a just cause;
failure to show this, as in the present case, would necessarily mean that the
dismissal was unjustified and, therefore, illegal.[49]
The respondent worker’s
allegation that Teng summarily dismissed them on suspicion that they were not
reporting to him the correct volume of the fish caught in each fishing voyage
was never denied by Teng. Unsubstantiated suspicion is not a just cause to terminate one’s employment
under Article 282[50]
of the Labor Code. To allow an employer to dismiss an employee based on mere
allegations and generalities would place the employee at the mercy of his
employer, and would emasculate the right to security of tenure.[51]
For his failure to comply with the Labor Code’s substantive requirement on
termination of employment, we declare that Teng illegally dismissed the
respondent workers.
WHEREFORE, we DENY the petition and AFFIRM the
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE
CONCUR:
CONCHITA CARPIO MORALES
Associate Justice |
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LUCAS P. BERSAMIN Associate Justice |
MARTIN S. VILLARAMA, JR. Associate Justice |
MARIA
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
CONCHITA CARPIO MORALES
Associate Justice
Chairperson
CERTIFICATION
RENATO
C. CORONA
Chief
Justice
[1] Under Rule 45 of the Rules of
Court; rollo, pp. 9-37.
[2] Penned by Associate Justice
Arturo G. Tayag, and concurred in by Associate Justice Estela M. Perlas-Bernabe
and Associate Justice Edgardo A. Camello; id.
at 41-51.
[3]
[4]
[5]
[6]
[7] Ibid.
[8]
[9]
[10]
[11]
[12] Ibid.
[13]
[14] Ibid.
[15]
[16]
[17]
[18]
[19]
[20]
[21] Id.at 19.
[22]
[23] An Act To Extend Protection To Labor, Strengthen The
Constitutional Rights Of Workers To Self-Organization, Collective Bargaining
And Peaceful Concerted Activities, Foster Industrial Peace And Harmony, Promote
The Preferential Use Of Voluntary Modes Of Settling Labor Disputes And
Reorganize The National Labor Relations Commission, Amending For These Purposes
Certain Provisions Of Presidential Decree No. 442, As Amended, Otherwise Known
As The Labor Code Of The Philippines, Appropriating Funds Therefor and For Other Purposes.
[24] Agpalo, Statutory Construction (2006 ed.), p. 390, citing Sarcos v. Castillo, 26 SCRA 853 (1969); Portillo v. Salvani, 54 Phil. 543
(1930).
[25] G.R. No. 94960,
[26]
[27] G.R. No. 155651,
[28] Ibid.
[29] Ibid.
[30]
[31]
[32] Took effect on
[33] Signed by the Secretary of Labor
on March 15, 2005.
[34] Labor Code, Article 5. Rules and regulations. – The Department of Labor and other
government agencies charged with the administration and enforcement of this
Code or any of its parts shall promulgate the necessary implementing rules and
regulations. Such rules and regulations shall become effective fifteen (15)
days after announcement of their adoption in newspapers of general circulation.
[35] Philippine Apparel Workers
[36] De Leon, De Leon, Jr., Administrative Law: Text and Cases (2005
ed.), p. 360.
[37]
[38] 2 Am Jur 2d, § 506, 492.
[39] Ibid.
[40] Agpalo, Administrative Law (2005 ed.), p. 178.
[41]
[42] G.R. No. 88550,
[43] Ibid.
[44] At the ratio of one bañera for every 30 bañera of fish caught, id. at 42-43.
[45]
1.
Alfredo S. Pahagac and Eddie D. Nipa
YEAR MONTHLY
WAGE RATE
1989 P
300.00
1989 500.00
1992 700.00
1994 1,000.00
1996 1,400.00
1998
until dismissed 1,700.00
2.
Hernan Y. Badilles and Roger S.
Pahagac
YEAR MONTHLY
WAGE RATE
1990 P
500.00
1992 700.00
1994 1,000.00
1996 1,400.00
1998
until dismissed 1,700.00
3.
Orlando P. Layese, who was
originally hired as second patron in 1989-1995 with share in [the] catch,
was subsequently appointed as checker sometime in February 1996 with a fixed
monthly wage rate as follows:
YEAR MONTHLY
WAGE RATE
1989-1995 [on
commission basis]
1996 P
1,500.00
1998
until dismissed P
1,700.00
[46] Effective
[47] Pascua, et al. v. NLRC, et al., G.R. No. 123518,
[48] Ibid., citing Jamer, et al, v. NLRC, et al., 278 SCRA 632 (1997).
[49] Ibid., citing, Metro Transit
Organization, Inc. v. NLRC, et al., 263 SCRA 313 (1996); Mapalo v. NLRC, et al.,
233 SCRA 266 (1994); Philippine Manpower
Services, Inc., et al. v. NLRC,
et al., 224 SCRA 691 (1993).
[50] Art. 282. Termination by
Employer. An employer may terminate an
employment for any of the following causes:
(a)
Serious
misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
(b)
Gross
and habitual neglect by the employee of his duties;
(c)
Fraud
or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
(d)
Commission
of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and
(e)
Other
causes analogous to the foregoing.
[51] Supra note 47, citing, Sanyo
Travel Corp., et al. v. NLRC, 280 SCRA 129 (1997); and JGB and Associates, Inc. v. NLRC, et al., 254 SCRA 457 (1996).