P alleged that he was employed sometime in October 1996, as a fitter/welder by O, Inc., a corporation engaged in the business of ship building. As a fitter/welder, P assembled, welded, fitted, installed, and repaired certain barge components. P presented a copy of his O, Inc. company Identification Card (ID), Certificate of Employment (COE) dated 5 February 2001, and time keeper report.
P stated that sometime in 2003, O, Inc. changed its corporate name to S, Inc., maintained the same line of business, and retained in its employ P and other O, Inc. employees.
P further stated that sometime in May 2006, he was assigned to Lamao, Limay, Bataan to do a welding job on one of S, Inc.’s barges. On 11 May 2006, an explosion occurred which caused P to sustain third degree burns on certain parts of his body. P was then hospitalized from 11 May until 6 June 2006 and had received financial assistance from S, Inc. for the duration of his confinement.
P alleged that S, Inc. verbally dismissed him from service effective 1 May 2008 due to lack of work, which was why he filed a complaint for illegal dismissal against S, Inc.
S, Inc. denied that it engaged P as its regular employee. In support of its claim that no employer-employee relationship existed between them, S, Inc. pointed out that it was only incorporated sometime in November 2002, several years after O, Inc. engaged P as its fitter/welder in 1996. Furthermore, S, Inc. maintained that it was a separate and distinct entity from O, Inc. and that no such change of corporate name as claimed by P.
S, Inc. alleged that, at best, P was only a helper brought in by its regular employees on certain occasions when repairs were needed to be done on its barges. It stressed that it did not engage P on a regular basis as his work on the barges was merely temporary or occasional. It further stated that P was free to seek employment elsewhere at any given time.
Was P an employee of S, Inc.?
In Parayday v. Shogun Shipping Co., Inc.,1G.R. No. 204555, July 6, 2020. the Supreme Court declared that an employer-employee relationship existed between P and S, Inc.
Initially, the Court did not give credence to the ID and COE presented by P, for the said documents were issued by O, Inc. and not by S, Inc. The Court also did not consider the time keeper report presented by P because their genuineness and due execution were unverifiable.
Nonetheless, the Court found that S, Inc. failed to categorically deny the following circumstances:
- Sometime in May 2006, it permitted P to work on repairs on one of its barges. It was also found that S, Inc. did not also deny that P worked for it until he was supposedly verbally dismissed from employment on 1 May 2008. Notably, S, Inc. even admitted that P was called in to do repairs on its barges.
- P was duly compensated for his work done on the barges. S, Inc. even categorically admitted that it provided him financial assistance when he was hospitalized from 11 May until 6 June 2006. It also did not disprove P’s allegation that it continued to pay his salaries after he was discharged from the hospital on 7 June 2006.
- P was verbally dismissed on 1 May 2008. The Court noted S, Inc.’s allegation that P only did repair work whenever the same was available. The Court viewed that it was S, Inc. that determined the cessation of P’s services.
According to the Court, the Rules of Court2Under Rule 8, Section 11., which supplements the NLRC Rules of Procedure, provides that allegations which are not specifically denied are deemed admitted.
As regards S, Inc.’s power of control over P, the Court emphasized that the control test calls merely for the existence of the right to control the manner of doing the work and not the actual exercise of the right.3Dy Keh Beng v. International Labor and Marine Union of the Philippines, G.R. No. L-32245, May 25, 1979, 179 PHIL 131-139. The Court added that an employer’s power of control, particularly over personnel working under the employer, is deemed inferred, more so when said personnel are working at the employer’s establishment.
In the present case, the Court found that P worked on the barges alongside regular employees of S, Inc. and that S, Inc. did not deny that he was taking orders from its engineers as to the required specifications on how the barges of Shogun Ships should be repaired. For the Court, it could thus logically infer that S, Inc., to some degree, exercised control or had the right to control the work of P.
P was an employee of S, Inc.
Further reading:
- Parayday v. Shogun Shipping Co., Inc., G.R. No. 204555, July 6, 2020.
