Paulino Ungos III

Lawyer | Law Professor | Author

Tag: 2019-06

  • IDs, Uniforms, and Vague Affidavits

    Arnulfo alleged that in 1994 he was hired as a butcher by Ernesto (the proprietor of Kalookan Slaughterhouse) and was made to work the entire week, from 6:30 P.M. to 7:30 A.M. with a daily wage of P700.00, that later became P500.00.

    Arnulfo narrated that on July 21, 2014, he suffered from a headache and was unable to report for duty. The next day, Ernesto informed him that he could no longer report for work due to his old age.

    Aggrieved by these developments, Arnulfo filed a complaint for illegal dismissal against Ernesto.

    Ernesto, on the other hand, asserted that Arnulfo was an independent butcher engaged by his Operation Supervisor, Cirilo, and he was paid based on the number of hogs he butchered. Ernesto added that Arnulfo was only called into the slaughterhouse when customers brought hogs to be slaughtered.

    In arguing against Arnulfo’s claim of illegal dismissal, Ernesto contended that he imposed policies on the entry to the premises of Kalookan Slaughterhouse, which applied to employees, dealers, independent butchers, hog and meat dealers, and trainees. In this regard, Noelberto (one of Ernesto’s employees) stated that Arnulfo violated said policies and then misconstrued the disallowance to enter the slaughterhouse as an act of dismissal.

    Although the Office of the Labor Arbiter found that Arnulfo was hired by Ernesto himself, the National Labor Relations Commission and the Court of Appeals, however, ruled that Arnulfo was engaged by Cirilo (Ernesto’s Operation Supervisor) and he was Cirilo’s own employee.

    Was Arnulfo an employee of Ernesto?

    The Supreme Court ruled in the affirmative.

    The Court reiterated the settled rule that to determine the existence of an employer-employee relationship, four elements generally need to be considered, namely: (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. The Court stated that these elements or indicators comprise the so-called ‘four-fold’ test of employment relationship.

    In the present case, it was found that the butchering services rendered by Arnulfo at the Kalookan Slaughterhouse was undisputed.

    However, Arnulfo was also found to have presented the following pieces of evidence:
    (1) an identification card and three gate passes stating that he was a butcher at the Kalookan Slaughterhouse;
    (2) log sheets for three days showing that he reported for work; and
    (3) a trip ticket showing that Arnulfo was the captain of a group of personnel that went to Bataan.

    The Court also considered Ernesto’s admission (by way of Noelberto’s statement) that uniforms were given to all employees, including Arnulfo.

    The Court reiterated its ruling in Masonic Contractor, Inc. v. Madjos1G.R. No. 185094, November 25, 2009 in that it is common practice for companies to provide identification cards to individuals not only as a security measure, but more importantly to identify the bearers thereof as bona fide employees of the firm or institution that issued them. The provision of company-issued identification cards and uniforms, said the Court, indubitably constitutes substantial evidence sufficient to support the existence of the employment relation.

    For the Court, the totality of Arnulfo’s evidence and the admissions of Ernesto led it to conclude that Arnulfo was Ernesto’s employee.

    On the other hand, the Court looked into Ernesto’s claims that Cirilo was the employer of Arnulfo and the person who paid the latter’s wages. However, the Court found no evidence supporting said claims. The Court even stated that Cirilo was not shown to (1) possess substantial capital and investment to have an independent business; (2) be Arnulfo’s employer; and (3) pay his salaries. Other than Cirilo’s Sinumpaang Salaysay, no document was presented to show that he paid Arnulfo’s salaries.

    Moreover, the Court stated when Ernesto denied that Arnulfo was his employee but alleged that the latter rendered services as Cirilo’s employee, Ernesto effectively admitted the substantial fact that Arnulfo has been rendering butchering services for several years. The Court considered such denial as negative pregnants2denials pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied which acknowledged that Ernesto indeed employed Arnulfo.

    The Court stressed that while Cirilo claimed to be Arnulfo’s employer, he also admitted that he never exercised any control over the means and methods by which Arnulfo rendered butchering services. Said the Court, if Cirilo was Arnulfo’s employer, he should have had control over Arnulfo’s means and methods for doing his job. As the Sinumpaang Salaysay of Cirilo reads, he only monitored whether the butchers finished their work.

    However, record revealed that Noelberto (Ernesto’s employee), was the one who actually exercised control in that he reprimanded Arnulfo (1) for his failure to properly store his butchering knives; (2) for coming to Kalookan Slaughterhouse with dirty clothes; (3) for reporting for work drunk; and (4) for not having an I.D. before going to the slaughterhouse.

    The Court concluded that all the foregoing circumstances established that Ernesto (through Cirilo) engaged Arnulfo, paid for his salaries, and in effect had the power to dismiss him. Further, Ernesto (through Noelberto) exercised control over Arnulfo’s conduct.

    To the mind of the Court, Ernesto was Arnulfo’s employer.

    Was Arnulfo illegally dismissed from employment?

    The Court found that Arnulfo was illegally dismissed from employment. This was because Ernesto failed to specifically deny that on July 22, 2014, Arnulfo was informed that he could no longer report for work.

    According to the Court, Noelberto only alleged that he merely barred Arnulfo from entering the slaughterhouse in several instances because of his failure to wear his I.D. and uniform but he failed to state that this was done on July 22, 2014.

    The Court ruled that Noelberto’s silence on this matter was deemed as an admission by Ernesto that Arnulfo was indeed dismissed on July 22, 2014.3Section 11, Rule 8 of the Rules of Court provides: SECTION 11. Allegations Not Specifically Denied Deemed Admitted. — Material averments in a pleading asserting a claim or claims, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied.

    Having been illegally dismissed, the Court affirmed the Office of the Labor Arbiter’s awards of separation pay and backwages.

    Further reading:

    • Fernandez v. Kalookan Slaughterhouse, Inc., G.R. No. 225075, June 19, 2019.

  • Considered Neither the Intent Nor the Origin of the Gift

    Alvin claimed that on January 31, 2005, he was hired as a Hotel Personnel Planner for the Crewing Department of respondent Philippine Transmarine Carriers, Inc. (PTC), a manning agency acting as agent for foreign principals and engaged in the business of sending Filipino seafarers. Record established that at the start of his employment, Alvin was given PTC’s old company handbook.

    Alvin’s first few years with PTC went well, and he was promoted to Hotel Personnel Officer in 2008. In December 2010, he was seconded by PTC to its offshore processing unit, where he was given the position of “Scheduler.” During his time with PTC, he received several awards.

    However, in 2010, was given a verbal reprimand for a violation of PTC’s policy against receiving “pasalubong“.

    In 2012, PTC revised its Code of Discipline, which indicated more clearly its prohibition against accepting any gift with collective minimum value of Php500.00 and which punished the same with dismissal from employment. Record established that Alvin was served a copy of the revised Code of Discipline.

    On October 9, 2013, Alvin, along with a co-employee Aaron, was caught on the surveillance camera accepting a brown bag from Fred, another employee. It was soon discovered that the brown bag contained two bottles of Jack Daniel’s Whiskey given by Mustafa, a friend and co-employee of Alvin from a previous employment. Alvin was confronted about the incident and he readily admitted that he and Aaron did accept the gift. However, Alvin insisted that it was not a violation of the company policy for it did not come from a crewmember but from an outsider.

    An administrative hearing was held on November 6, 2013 and attended by Alvin. In said hearing, Aaron testified that Alvin told Fred not to hand the gift as there was a surveillance camera in his office and the handing of the gift might be misinterpreted. Aaron further stated that Alvin then advised Fred to proceed to the rear section of the crewing operations office.

    On November 12, 2013, Mustafa sent an email to PTC stating that he gifted Alvin two bottles of whiskey worth US$36.00 as a gesture of goodwill and token of their friendship. Mustafa also stated that personal favor between Alvin and Fred was not the reason for this gift.

    On November 22, 2013, Alvin received a written resolution from PTC informing him of the termination of his employment. PTC also terminated the employment of Aaron.

    On January 30, 2014, Alvin filed a case for illegal dismissal with the Labor Arbiter.

    Did PTC validly dismiss Alvin from employment?

    The Supreme Court ruled that Alvin was validly dismissed by PTC.

    The Court found that Alvin’s dismissal was anchored on his violation of a specific provision in PTC’s Code of Discipline which punished two separate acts:

    • offering or accepting, whether directly or indirectly, any gift with a collective value of Php500.00 or more, regardless of who it came from; and
    • acceptance by an employee of any gift — regardless of value — from a crew member, ex-crew member, or representative of a crew member.

    The Court noted from the said provision that a violation, even on the first instance, merited the penalty of dismissal from employment.

    In the present case, Alvin admitted to receiving a gift during his tenure with PTC. However, he contended that:

    • he did not violate PTC’s Code of Discipline since he did not receive the gift from a crew member, ex-crew member, or representative of a crew member; and
    • the provision was vague, unreasonable, and unfair.

    Alvin argued that an analysis of the said provision would reveal that the same was utterly vague, without any qualification as to from whom the gift should come from and for what consideration. Alvin pointed out that the governing principles behind the PTC provision did not take into account the intent or the origin of the gift. Alvin concluded that the subject provision should have been declared to be unreasonable and unfair.

    The Court did not agree, for it determined that Alvin’s act clearly fell under the first act punished by the subject provision in PTC’s Code of Discipline. According to the Court, Alvin received a gift with a value of $36.00, which was clearly above the Php500.00 threshold under the PTC provision. The Court further stated that the subject provision in PTC’s Code of Conduct was not vague and unreasonable. Said the Court: The fact that it did not specify the origin of the gift or the purpose for which the gift was given did not automatically mean that the PTC provision was vague. It simply meant that this “no gift” policy of PTC was absolute, that is, the origin or the purpose of the gift was irrelevant. In simple terms, the mere act of offering or receiving a gift constituted a violation.

    Significantly, the Court took into account PTC’s rationale for the subject provision. According to PTC, in view of the Philippine Overseas Employment Administration’s strict requirements and the severity of the corresponding penalty imposed at the first instance, firm implementation of company rules and regulations was indispensable. PTC added that it was only just and reasonable to adopt measures to ensure that any act of its officials, employees, and representatives that would merit the cancellation of its license be imposed the supreme penalty of dismissal.

    The Court stated that company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied with until finally revised or amended.1 Aparente, Sr. v. National Labor Relations Commission, G.R. No. 117652, April 27, 2000. Furthermore, a company’s management prerogatives shall be upheld so long as they are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements.2 Aparente, Sr. v. National Labor Relations Commission, G.R. No. 117652, April 27, 2000. In this regard, the Court ruled that the dismissal of Alvin which hinged on a provision that prescribed dismissal even on the first instance of violation, should therefore be upheld.

    In this case, the Court ruled that PTC was well within its management prerogative in terminating Alvin’s employment upon a finding of violation of its company rules. The Court stated that Alvin’s actions revealed that he was aware of his violation of PTC’s rule. By his own admission, he instructed Fred to give the gift to Aaron in the far end of the office, as he knew that there was a surveillance camera in their work area. He thus knew that he was at risk of getting caught doing an act he should not do. Despite this, he still received the gift and did not return the same to Mustafa or even turned over the same to the Human Resources Department as instructed by PTC’s Code of Discipline. For the Court, the acts of Alvin revealed willful misconduct or disobedience of company rules that further justified PTC’s decision to terminate his employment.

    Further reading:

    • De Leon v. Philippine Transmarine Carriers, Inc., G.R. No. 232194, June 19, 2019.

  • His Position Became Unnecessary upon Shipment Completion

    On November 1, 2009, the employer hired Manuel as a technical consultant. Under the agreement, Manuel was tasked to:

    • Prepare reports;
    • Be the intermediary of certain teams;
    • Attend coordination meetings;
    • Evaluate billings; and
    • Conduct Site visits.

    Through a letter dated June 27, 2013, the employer informed Manuel of the termination of his employment due to the cessation of delivery operations and diminution of activities. Aggrieved by the actions of his employer, Manuel filed a complaint for illegal dismissal against it.

    The employer contended that it had sufficiently established redundancy of Manuel’s position. It presented certain documents to prove that there was a significant diminution in the volume of materials business and that the completion of shipment had rendered his position irrelevant. The employer further argued that it did not dismiss Manuel in bad faith, contending that it complied with labor law requirements in terminating his employment. The employer pointed out that he was given a notice of termination with computation of his separation pay, and that the Department of Labor and Employment was also notified.

    Was Manuel validly dismissed from employment on the ground of redundancy?

    The Supreme Court ruled that Manuel was not validly dismissed on said ground.

    The Court stated that redundancy is recognized as one of the authorized causes for dismissing an employee under the Labor Code of the Philippines. Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business.

    The Court further stated that for the implementation of a redundancy program to be valid, the employer must comply with the following requisites:

    • written notice served on both the employees and the Department of Labor and Employment at least one month prior to the intended date of retrenchment;
    • payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher;
    • good faith in abolishing the redundant positions in that the employer must provide substantial proof that the services of the employees are in excess of what it requires; and
    • fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

    In the present case, the Court acknowledged that the employer complied with the first and second requisites. It was able to notify Manuel and the Department of Labor and Employment at least a month before the planned redundancy. Manuel also received a computation of his separation pay corresponding to at least one month pay for every year of service with additional payment for economic assistance.

    However, the Court found that the employer failed to establish compliance with the third and fourth requisites.

    The Court discovered that the employer’s only basis for declaring petitioner’s position redundant was that his function, which was to monitor the delivery of supplies, became unnecessary upon completion of shipment.

    However, the Court discovered that Manuel’s employment agreement reveals the contrary as there was no mention of monitoring shipment as part of his tasks. The Court said that if his work pertains mainly to the delivery of supplies, it should have been specifically stated in his job description. Thus, the Court found no basis for the employer to consider Manuel’s position irrelevant when shipment had been completed.

    The Court also found that the employer failed to show that they used fair and reasonable criteria in determining what positions should be declared redundant.

    The Court explained that fair and reasonable criteria may take into account the preferred status, efficiency, and seniority of employees to be dismissed due to redundancy.

    However, the Court found that the employer never showed that it used any of these in choosing Manuel as among the employees affected by redundancy.

    The Court accordingly declared Manuel to have been illegally dismissed from employment.

    Further reading:

    • Acosta v. Matiere SAS, G.R. No. 232870, June 3, 2019.