Republic of the Philippines

Supreme Court
Manila


THIRD DIVISION


AL!RT T!N"# $oin% business
un$er the firm name AL!RT
T!N" &ISH TRADIN"# an$
!MILIA T!N"'CH(A,
Petitioners,



- versus -



AL&R!DO S) PAHA"AC# !DDI!
D) NIPA# ORLANDO P) LA*!S!#
H!RNAN *) ADILL!S an$
")R) No) +,-./0

Present:

CARPIO MORALES, J., Chairperson,
BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.



RO"!R S) PAHA"AC#
Respondents.
Prou!"ated:


Nove#er $%, &'$'

1'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' 1

D ! C I S I O N

RION# J):


Be(ore t)is Court is a Petition (or Revie* on Certiorari
$
+$, (i!ed #-
petitioners A!#ert .en" /is) .radin", its o*ner A!#ert .en", and its ana"er
Ei!ia .en"-C)ua, to reverse and set aside t)e Septe#er &$, &''0 de1ision
&
+&,
and t)e Septe#er $, &''2 reso!ution
3
+3, o( t)e Court o( Appea!s 4CA5 in CA-6.R.
SP No. %7%73. .)e CA reversed t)e de1ision o( t)e Vo!untar- Ar#itrator 4VA5,
Nationa! Con1i!iation and Mediation Board 4NCMB5, Re"ion I8, 9a#oan"a Cit-,
and de1!ared t)at t)ere e:ists an ep!o-er-ep!o-ee re!ations)ip #et*een .en"
and respondents ;ernan Badi!!es, Or!ando La-ese, Eddie Nipa, A!(redo Pa)a"a1,
and Ro"er Pa)a"a1 41o!!e1tive!-, respondent workers5. It a!so (ound t)at .en"
i!!e"a!!- disissed t)e respondent *or<ers (ro t)eir ep!o-ent.
$+$, =nder Ru!e 02 o( t)e Ru!es o( Court> rollo, pp. ?-3%.
&+&, Penned #- Asso1iate Justi1e Arturo 6. .a-a", and 1on1urred in #- Asso1iate Justi1e Este!a
M. Per!as-Berna#e and Asso1iate Justi1e Ed"ardo A. Cae!!o> id. at 0$-2$.
3+3, Id. at 2&-23.

AC2"RO(ND &ACTS

A!#ert .en" /is) .radin" is en"a"ed in deep sea (is)in" and, (or t)is
purpose, o*ns #oats 4basnig5, e@uipent, and ot)er (is)in" parap)erna!ia. As
o*ner o( t)e #usiness, .en" 1!ais t)at )e 1ustoari!- enters into Aoint venture
a"reeents *it) aster (is)eren 4maestros5 *)o are s<i!!ed and are e:perts in
deep sea (is)in"> t)e- ta<e 1)ar"e o( t)e ana"eent o( ea1) (is)in" venture,
in1!udin" t)e )irin" o( t)e e#ers o( its 1op!eent. ;e avers t)at t)e maestros
)ired t)e respondent *or<ers as chec3ers to deterine t)e vo!ue o( t)e (is)
1au")t in ever- (is)in" vo-a"e.
0
+0,

On /e#ruar- &', &''3, t)e respondent *or<ers (i!ed a 1op!aint (or i!!e"a!
disissa! a"ainst A!#ert .en" /is) .radin", .en", and C)ua #e(ore t)e NCMB,
Re"ion Bran1) No. I8, 9a#oan"a Cit-.

.)e respondent *or<ers a!!e"ed t)at .en" )ired t)e, *it)out an- *ritten
ep!o-ent 1ontra1t, to serve as )is Be-es and earsC a#oard t)e (is)in" #oats> to
1!assi(- t)e (is) 1au")t #- baera> to report to .en" via radio 1ouni1ation t)e
1!asses and vo!ue o( ea1) 1at1)> to re1eive instru1tions (ro )i as to *)ere and
*)en to un!oad t)e 1at1)> to prepare t)e !ist o( t)e provisions re@uested #- t)e
maestro and t)e e1)ani1 (or )is approva!> and, to pro1ure t)e ites as approved
0+0, Id. at $0.
#- )i.
2
+2, .)e- a!so 1!aied t)at t)e- re1eived re"u!ar ont)!- sa!aries, $3
t)
ont) pa-, C)ristas #onus, and in1entives in t)e (or o( s)ares in t)e tota!
vo!ue o( (is) 1au")t.

.)e- asserted t)at soetie in Septe#er &''&, .en" e:pressed )is dou#ts
on t)e 1orre1t vo!ue o( (is) 1au")t in ever- (is)in" vo-a"e.
D
+D, In Ee1e#er
&''&, .en" in(ored t)e t)at t)eir servi1es )ad #een terinated.
%
+%,

In )is de(ense, .en" aintained t)at )e did not )ave an- )and in )irin" t)e
respondent *or<ers> t)e maestros, rat)er t)an )e, invited t)e to Aoin t)e venture.
A11ordin" to )i, )is ro!e *as 1!ear!- !iited to t)e provision o( t)e ne1essar-
1apita!, too!s and e@uipent, 1onsistin" o( basnig, "ears, (ue!, (ood, and ot)er
supp!ies.
7
+7,

.)e VA rendered a de1ision
?
+?, in .en"Fs (avor and de1!ared t)at no
ep!o-er-ep!o-ee re!ations)ip e:isted #et*een .en" and t)e respondent *or<ers.
.)e dispositive portion o( t)e VAFs Ma- 3', &''3 de1ision reads:
2+2, Id. at $77.
D+D, Id. at 03.
%+%, Ibid.
7+7, Id. at $0.
?+?, Id. at D'-D?.

G;ERE/ORE, preises 1onsidered, Aud"ent is )ere#- rendered
disissin" t)e instant 1op!aint (or !a1< o( erit.

It (o!!o*s a!so, t)at a!! ot)er 1!ais are !i<e*ise disissed (or !a1< o(
erit.
$'
+$',
.)e respondent *or<ers re1eived t)e VAFs de1ision on 4une +5# 5//6)
$$
+$$,
.)e- (i!ed a motion for reconsi$eration# 7hich 7as $enie$ in an order dated
June &%, &''3 and *)i1) t)e- re1eived on 4ul8 9# 5//6)
$&
+$&, .)e VA reasoned out
t)at Se1tion D, Ru!e VII o( t)e $?7? Pro1edura! 6uide!ines in t)e Condu1t o(
Vo!untar- Ar#itration Pro1eedin"s 41! "ro#ed$ral %$idelines5 does not provide
t)e reed- o( a otion (or re1onsideration to t)e part- adverse!- a((e1ted #- t)e
VAFs order or de1ision.
$3
+$3, .)e order states:

=nder E:e1utive Order No. $&D, as aended #- E:e1utive Order No. &2$,
and in order to ip!eent Arti1!e &D'-&D& 4#5 o( t)e La#or Code, as aended #-
R.A. No. D%$2, ot)er*ise <no*n as t)e Pro1edura! 6uide!ines in t)e Condu1t o(
Vo!untar- Ar#itration Pro1eedin"s, inter a!ia:

An a*ard or t)e Ee1ision o( t)e Vo!untar- Ar#itrators
#e1oes (ina! and e:e1utor- a(ter ten 4$'5 1a!endar da-s (ro
re1eipt o( 1opies o( t)e a*ard or de1ision #- t)e parties 4Se1. D,
Ru!e VII5.

Moreo:er# the abo:e'mentione$ %ui$elines $o not pro:i$e the reme$8
of a motion for reconsi$eration to the part8 a$:ersel8 affecte$ b8 the or$er
or $ecision of :oluntar8 arbitrators)
+0
;+0<
$'+$', Id. at D?.
$$+$$, Id. at %&.
$&+$&, Ibid.
$3+$3, Id. at %'.

On 4ul8 5+# 5//6# t)e respondent-*or<ers e!evated t)e 1ase to t)e CA. In its
de1ision o( Septe#er &$, &''0, t)e CA reversed t)e VAFs de1ision a(ter (indin"
su((i1ient eviden1e s)o*in" t)e e:isten1e o( ep!o-er-ep!o-ee re!ations)ip:

=H!R!&OR!# preises 1onsidered, t)e petition is "ranted. .)e
@uestioned de1ision o( t)e Vo!untar- Ar#itrator dated Ma- 3', &''3 is )ere#-
R!V!RS!D an$ S!T ASID! #- orderin" private respondent to pa- separation
pa- *it) #a1<*a"es and ot)er onetar- #ene(its. /or t)is purpose, t)e 1ase is
R!MAND!D to t)e Vo!untar- Ar#itrator (or t)e 1oputation o( petitionerFs
#a1<*a"es and ot)er onetar- #ene(its. No pronoun1eent as to 1osts.

SO ORD!R!D)
$2
+$2,

.en" oved to re1onsider t)e CAFs de1ision, #ut t)e CA denied t)e otion
in its reso!ution o( Septe#er $, &''2.
$D
+$D, ;e, t)erea(ter, (i!ed t)e present
Petition (or Revie* on Certiorari under Ru!e 02 o( t)e Ru!es o( Court, 1!aiin"
t)at:

a. t)e VAFs de1ision is not su#Ae1t to a otion (or re1onsideration>
and
#. no ep!o-er-ep!o-ee re!ations)ip e:isted #et*een .en" and t)e
respondent *or<ers.

$0+$0, Ibid.
$2+$2, Id. at 2'.
$D+$D, Id. at 2&-23.
.en" 1ontends t)at t)e VAFs de1ision is not su#Ae1t to a otion (or
re1onsideration in t)e a#sen1e o( an- spe1i(i1 provision a!!o*in" t)is re1ourse
under Arti1!e &D&-A o( t)e La#or Code.
$%
+$%, ;e 1ites t)e $?7? Pro1edura!
6uide!ines, *)i1), as t)e VA de1!ared, does not provide t)e reed- o( a otion (or
re1onsideration.
$7
+$7, ;e 1!ais t)at a(ter t)e !apse o( $' da-s (ro its re1eipt, t)e
VAFs de1ision #e1oes (ina! and e:e1utor- un!ess an appea! is ta<en.
$?
+$?, ;e
ar"ues t)at *)en t)e respondent *or<ers re1eived t)e VAFs de1ision on June $&,
&''3,
&'
+&', t)e- )ad $' da-s, or unti! June &&, &''3, to (i!e an appea!. As t)e
respondent *or<ers opted instead to ove (or re1onsideration, t)e $'-da- period to
appea! 1ontinued to run> t)us, t)e VAFs de1ision )ad a!read- #e1oe (ina! and
e:e1utor- #- t)e tie t)e- assai!ed it #e(ore t)e CA on Ju!- &$, &''3.
&$
+&$,

.en" (urt)er insists t)at t)e VA *as 1orre1t in ru!in" t)at t)ere *as no
ep!o-er-ep!o-ee re!ations)ip #et*een )i and t)e respondent *or<ers. G)at
)e entered into *as a Aoint venture a"reeent *it) t)e maestros, *)ere .en"Fs ro!e
*as on!- to provide basnig, "ears, nets, and ot)er too!s and e@uipent (or ever-
(is)in" vo-a"e.
&&
+&&,
$%+$%, Id. at $%-$7.
$7+$7, Id. at %'-%$.
$?+$?, Id. at $7.
&'+&', Id. at %&.
&$+&$, Id.at $?.
&&+&&, Id. at &$.
TH! CO(RT>S R(LIN"

Ge reso!ve to $en8 t)e petition (or !a1< o( erit.

Article 262-A of the Labor Code does not
prohibit the filing of a motion for
reconsideration.


On Mar1) &$, $?7?, Repu#!i1 A1t No. D%$2
&3
+&3, too< e((e1t, aendin",
aon" ot)ers, Arti1!e &D3 o( t)e La#or Code *)i1) *as
&3+&3, An A1t .o E:tend Prote1tion .o La#or, Stren"t)en .)e Constitutiona! Ri")ts O( Gor<ers .o Se!(-
Or"aniHation, Co!!e1tive Bar"ainin" And Pea1e(u! Con1erted A1tivities, /oster Industria! Pea1e And ;aron-,
Proote .)e Pre(erentia! =se O( Vo!untar- Modes O( Sett!in" La#or Eisputes And Reor"aniHe .)e Nationa! La#or
Re!ations Coission, Aendin" /or .)ese Purposes Certain Provisions O( Presidentia! Ee1ree No. 00&, As
Aended, Ot)er*ise Ino*n As .)e La#or Code O( .)e P)i!ippines, Appropriatin" /unds .)ere(or and /or Ot)er
Purposes.
ori"ina!!- *orded as:

Art. &D3 : : : Vo!untar- ar#itration a*ards or de1isions shall be final#
unappealable# an$ e1ecutor8)

As aended, Arti1!e &D3 is no* Arti1!e &D&-A, *)i1) states:

Art. &D&-A. : : : +.,)e a*ard or de1ision : : : s)a!! 1ontain t)e (a1ts and
t)e !a* on *)i1) it is #ased. It shall be final an$ e1ecutor8 after ten ?+/@
calen$ar $a8s from receipt of the cop8 of the a7ar$ or $ecision b8 the
parties)

Nota#!-, Arti1!e &D&-A de!eted t)e *ord AunappealableB (ro Arti1!e &D3.
.)e de!i#erate se!e1tion o( t)e !an"ua"e in t)e aendator- a1t di((erin" (ro t)at
o( t)e ori"ina! a1t indi1ates t)at t)e !e"is!ature intended a 1)an"e in t)e !a*, and
t)e 1ourt s)ou!d endeavor to "ive e((e1t to su1) intent.
&0
+&0, Ge re1o"niHed t)e
intent o( t)e 1)an"e o( p)raseo!o"- in Imperial &e'tile Mills, In#. v. (ampang,
&2
+&2,
*)ere *e ru!ed t)at:

It is true t)at t)e present ru!e +Art. &D&-A, a<es t)e vo!untar- ar#itration
a*ard (ina! and e:e1utor- a(ter ten 1a!endar da-s (ro re1eipt o( t)e 1op- o( t)e
a*ard or de1ision #- t)e parties. Presumabl8# the $ecision ma8 still be
reconsi$ere$ b8 the Voluntar8 Arbitrator on the basis of a motion for
reconsi$eration $ul8 file$ $urin% that perio$)
&D
+&D,
&0+&0, A"pa!o, (tat$tor) Constr$#tion 4&''D ed.5, p. 3?', 1itin" (ar#os v. Castillo, &D SCRA 723
4$?D?5> "ortillo v. (alvani, 20 P)i!. 203 4$?3'5.
&2+&2, 6.R. No. ?0?D', Mar1) 7, $??3, &$? SCRA D2$.
&D+&D, Id. at D20.

In Co#a*Cola Bottlers "hil., In#., (ales +or#e ,nion*"&%-.*Balais v.
Co#a*Cola Bottlers "hilippines, In#.,
&%
+&%, *e !i<e*ise ru!ed t)at t)e VAFs de1ision
ma8 still be reconsi$ere$ on the basis of a motion for reconsi$eration
seasonabl8 file$ 7ithin +/ $a8s from receipt thereof)
&7
+&7, The seasonable
filin% of a motion for reconsi$eration is a man$ator8 reCuirement to forestall
the finalit8 of such $ecision)
&?
+&?, Ge (urt)er 1ited t)e $?7? Pro1edura!
6uide!ines *)i1) ip!eented Arti1!e &D&-A, vi/0
3'
+3',

+=,nder Se1tion D, Ru!e VII o( t)e sae "uide!ines ip!eentin" Arti1!e
&D&-A o( t)e La#or Code, t)is Ee1ision, as a atter o( 1ourse, *ou!d #e1oe
(ina! and e:e1utor- a(ter ten 4$'5 1a!endar da-s (ro re1eipt o( 1opies o( t)e
de1ision #- t)e parties : : : unless# in the meantime# a motion for
reconsi$eration or a petition for re:ie7 to the Court of Appeals un$er Rule
06 of the Rules of Court is (i!ed *it)in t)e sae $'-da- period.
3$
+3$,

.)ese ru!in"s (u!!- esta#!is) t)at t)e a#sen1e o( a 1ate"ori1a! !an"ua"e in
Arti1!e &D&-A does not pre1!ude t)e (i!in" o( a otion (or re1onsideration o( t)e
VAFs de1ision *it)in t)e $'-da- period. .en"Fs a!!e"ation t)at t)e VAFs de1ision
)ad #e1oe (ina! and e:e1utor- #- t)e tie t)e respondent *or<ers (i!ed an appea!
*it) t)e CA t)us (ai!s. Ge 1onse@uent!- ru!e t)at t)e respondent *or<ers
seasona#!- (i!ed a otion (or re1onsideration o( t)e VAFs Aud"ent, and t)e VA
&%+&%, 6.R. No. $22D2$, Ju!- &7, &''2, 0D0 SCRA 2'%, 2$D.
&7+&7, Ibid.
&?+&?, Ibid.
3'+3', Id. at 2$3.
3$+3$, Id. at 2$2-2$D.
erred in den-in" t)e otion #e1ause no otion (or re1onsideration is a!!o*ed.

.)e Court notes t)at despite our interpretation t)at Arti1!e &D&-A does not
pre1!ude t)e (i!in" o( a otion (or re1onsideration o( t)e VAFs de1ision, a 1ontrar-
provision 1an #e (ound in Se1tion %, Ru!e 8I8 o( t)e Eepartent o( La#orFs
Eepartent Order 41.5 No. 0', series o( &''3:
3&
+3&,

Ru!e 8I8
Se1tion %. &inalit8 of A7ar$DDecision) E .)e de1ision, order, reso!ution
or a*ard o( t)e vo!untar- ar#itrator or pane! o( vo!untar- ar#itrators s)a!! #e (ina!
and e:e1utor- a(ter ten 4$'5 1a!endar da-s (ro re1eipt o( t)e 1op- o( t)e a*ard
or de1ision #- t)e parties and it shall not be subFect of a motion for
reconsi$eration)

Presua#!- on t)e #asis o( EO 0'-'3, t)e $?7? Pro1edura! 6uide!ines *as revised
in &''2 42334 "ro#ed$ral %$idelines5,
33
+33, *)ose pertinent provisions provide
t)at:

Rule VII E
D!CISIONS

Se1tion D. Finality of Decisions. J .)e de1ision o( t)e Vo!untar-
Ar#itrator s)a!! #e (ina! and e:e1utor- a(ter ten 4$'5 1a!endar da-s (ro re1eipt o(
t)e 1op- o( t)e de1ision #- t)e parties.

Se1tion %. Motions for Reconsideration. J .)e de1ision o( t)e Vo!untar-
Ar#itrator is not subFect of a Motion for Reconsi$eration)
3&+3&, .oo< e((e1t on Mar1) $2, &''3.
33+33, Si"ned #- t)e Se1retar- o( La#or on Mar1) $2, &''2.

Ge are surprised t)at neit)er t)e VA nor .en" 1ited EO 0'-'3 and t)e &''2
Pro1edura! 6uide!ines as aut)orities (or t)eir 1ause, 1onsiderin" t)at t)ese *ere t)e
"overnin" ru!es *)i!e t)e 1ase *as pendin" and t)ese dire1t!- and (u!!- supported
t)eir t)eor-. ;ad t)e- done so, t)eir re!ian1e on t)e provisions *ou!d )ave
nevert)e!ess #een unavai!in" (or reasons *e s)a!! no* dis1uss.

In t)e e:er1ise o( its po*er to prou!"ate ip!eentin" ru!es and
re"u!ations, an ip!eentin" a"en1-, su1) as t)e Eepartent o( La#or,
30
+30, is
restri1ted (ro "oin" #e-ond t)e ters o( t)e !a* it see<s to ip!eent> it s)ou!d
neit)er odi(- nor iprove t)e !a*. .)e a"en1- (oru!atin" t)e ru!es and
"uide!ines 1annot e:1eed t)e statutor- aut)orit- "ranted to it #- t)e !e"is!ature.
32
+32,

B- a!!o*in" a $'-da- period, t)e o#vious intent o( Con"ress in aendin"
Arti1!e &D3 to Arti1!e &D&-A is to provide an opportunit- (or t)e part- adverse!-
a((e1ted #- t)e VAFs de1ision to see< re1ourse via a otion (or re1onsideration or a
petition (or revie* under Ru!e 03 o( t)e Ru!es o( Court (i!ed *it) t)e CA. Indeed,
a otion (or re1onsideration is t)e ore appropriate reed- in !ine *it) t)e
do1trine o( e:)austion o( adinistrative reedies. /or t)is reason, an appea! (ro
30+30, La#or Code, Arti1!e 2. 5$les and reg$lations) J .)e Eepartent o( La#or and ot)er "overnent a"en1ies
1)ar"ed *it) t)e adinistration and en(or1eent o( t)is Code or an- o( its parts s)a!! prou!"ate t)e ne1essar-
ip!eentin" ru!es and re"u!ations. Su1) ru!es and re"u!ations s)a!! #e1oe e((e1tive (i(teen 4$25 da-s a(ter
announ1eent o( t)eir adoption in ne*spapers o( "enera! 1ir1u!ation.
32+32, "hilippine Apparel -orkers ,nion v. N65C, No. L-2'3&', Ju!- 3$, $?7$, $'D SCRA 000.
adinistrative a"en1ies to t)e CA via Ru!e 03 o( t)e Ru!es o( Court re@uires
e:)austion o( avai!a#!e reedies
3D
+3D, as a 1ondition pre1edent to a petition under
t)at Ru!e.

.)e re@uireent t)at adinistrative reedies #e e:)austed is #ased on t)e
do1trine t)at in providin" (or a reed- #e(ore an adinistrative a"en1-, ever-
opportunit- ust #e "iven to t)e a"en1- to reso!ve t)e atter and to e:)aust a!!
opportunities (or a reso!ution under t)e "iven reed- #e(ore #rin"in" an a1tion in,
or resortin" to, t)e 1ourts o( Austi1e.
3%
+3%, G)ere Con"ress )as not 1!ear!- re@uired
e:)austion, sound Audi1ia! dis1retion "overns,
37
+37, "uided #- 1on"ressiona!
intent.
3?
+3?,

B- disa!!o*in" re1onsideration o( t)e VAFs de1ision, Se1tion %, Ru!e 8I8 o(
EO 0'-'3 and Se1tion % o( t)e &''2 Pro1edura! 6uide!ines *ent dire1t!- a"ainst
t)e !e"is!ative intent #e)ind Arti1!e &D&-A o( t)e La#or Code. .)ese ru!es den- t)e
VA t)e 1)an1e to 1orre1t )ise!(
0'
+0', and 1ope! t)e 1ourts o( Austi1e to
preature!- intervene *it) t)e a1tion o( an adinistrative a"en1- entrusted *it)
t)e adAudi1ation o( 1ontroversies 1oin" under its spe1ia! <no*!ed"e, trainin" and
spe1i(i1 (ie!d o( e:pertise. In t)is era o( 1!o""ed 1ourt do1<ets, t)e need (or
3D+3D, Ee Leon, Ee Leon, Jr., Administrative 6aw0 &e't and Cases 4&''2 ed.5, p. 3D'.
3%+3%, Id. at 32%.
37+37, & A Jur &d, K 2'D, 0?&.
3?+3?, Ibid.
0'+0', A"pa!o, Administrative 6aw 4&''2 ed.5, p. $%7.
spe1ia!iHed adinistrative a"en1ies *it) t)e spe1ia! <no*!ed"e, e:perien1e and
1apa#i!it- to )ear and deterine propt!- disputes on te1)ni1a! atters or intri1ate
@uestions o( (a1ts, su#Ae1t to Audi1ia! revie*, is indispensa#!e.
0$
+0$, In Ind$strial
7nterprises, In#. v. Co$rt o8 Appeals,
0&
+0&, *e ru!ed t)at re!ie( ust (irst #e
o#tained in an adinistrative pro1eedin" #e(ore a reed- *i!! #e supp!ied #- t)e
1ourts even t)ou") t)e atter is *it)in t)e proper Aurisdi1tion o( a 1ourt.
03
+03,

here e!ists an employer-employee
relationship bet"een eng and the
respondent "or#ers.

Ge a"ree *it) t)e CAFs (indin" t)at su((i1ient eviden1e e:ists indi1atin" t)e
e:isten1e o( an ep!o-er-ep!o-ee re!ations)ip #et*een .en" and t)e respondent
*or<ers.

G)i!e .en" a!!e"ed t)at it *as t)e maestros *)o )ired t)e respondent
*or<ers, it *as )is 1opan- t)at issued to t)e respondent *or<ers identi(i1ation
1ards 4I1s5 #earin" t)eir naes as ep!o-ees and .en"Fs si"nature as t)e
ep!o-er. 6enera!!-, in a #usiness esta#!is)ent, IEs are issued to identi(- t)e
)o!der as a bona 8ide ep!o-ee o( t)e issuin" entit-.
0$+0$, "ad$a, et al. v. 5anada, et al., 6.R. Nos. $0$?0? and $2$$'7, O1to#er $0, &''&, 3?'
SCRA DD3.
0&+0&, 6.R. No. 7722', Apri! $7, $??', $70 SCRA 0&D.
03+03, Ibid.

/or t)e $3 -ears t)at t)e respondent *or<ers *or<ed (or .en", t)e- re1eived
*a"es on a re"u!ar #asis, in addition to t)eir s)ares in t)e (is) 1au")t.
00
+00, .)e
*or<s)eet s)o*ed t)at t)e respondent *or<ers re1eived uni(or aounts *it)in a
"iven -ear, *)i1) aounts annua!!- in1reased unti! t)e terination o( t)eir
ep!o-ent in &''&.
02
+02, .en"Fs 1!ai t)at t)e aounts re1eived #- t)e
respondent *or<ers are ere 1oissions is in1redu!ous, as it *ou!d ean t)at t)e
(is) 1au")t t)rou")out t)e -ear is uni(or and in1reases in nu#er ea1) -ear.

More iportant!-, t)e e!eent o( 1ontro! J *)i1) *e )ave ru!ed in a nu#er
o( 1ases to #e a stron" indi1ator o( t)e e:isten1e o( an ep!o-er-ep!o-ee
re!ations)ip J is present in t)is 1ase. .en" not on!- o*ned t)e too!s and e@uipent,
00+00, At t)e ratio o( one baera (or ever- 3' baera o( (is) 1au")t, id. at 0&-03.
02+02, Id. at 0&-03, t)e ont)!- sa!aries o( t)e respondent *or<ers (ro $?7?-$??7:
$. A!(redo S. Pa)a"a1 and Eddie E. Nipa
LEAR MON.;LL GA6E RA.E
$?7? P 3''.''
$?7? 2''.''
$??& %''.''
$??0 $,'''.''
$??D $,0''.''
$??7 unti! disissed $,%''.''
&. ;ernan L. Badi!!es and Ro"er S. Pa)a"a1
LEAR MON.;LL GA6E RA.E
$??' P 2''.''
$??& %''.''
$??0 $,'''.''
$??D $,0''.''
$??7 unti! disissed $,%''.''
3. Or!ando P. La-ese, *)o *as ori"ina!!- )ired as se1ond patron in $?7?-$??2 *it) s)are in +t)e, 1at1), *as
su#se@uent!- appointed as 1)e1<er soetie in /e#ruar- $??D *it) a (i:ed ont)!- *a"e rate as (o!!o*s:
LEAR MON.;LL GA6E RA.E
$?7?-$??2 +on 1oission #asis,
$??D P $,2''.''
$??7 unti! disissed P $,%''.''
)e dire1ted )o* t)e respondent *or<ers *ere to per(or t)eir Ao# as 1)e1<ers>
t)e-, in (a1t, a1ted as .en"Fs e-es and ears in ever- (is)in" e:pedition.

.en" 1annot )ide #e)ind )is ar"uent t)at t)e respondent *or<ers *ere
)ired #- t)e maestros. .o 1onsider t)e respondent *or<ers as ep!o-ees o( t)e
maestros *ou!d ean t)at .en" 1oitted iperissi#!e !a#or-on!- 1ontra1tin".
As a po!i1-, t)e La#or Code pro)i#its !a#or-on!- 1ontra1tin":

AR.. $'D. Contra1tor or Su#1ontra1tor J : : : .)e Se1retar- o( La#or and
Ep!o-ent a-, #- appropriate re"u!ations, restri1t or pro)i#it t)e 1ontra1tin"-
out o( !a#or.
: : : :

There is Alabor'onl8B contractin% 7here the person suppl8in% 7or3ers to an
emplo8er $oes not ha:e substantial capital or in:estment in the form of tools#
eCuipment# machineries# 7or3 premises# amon% others# an$ the 7or3ers
recruite$ an$ place$ b8 such persons are performin% acti:ities 7hich are
$irectl8 relate$ to the principal business of such emplo8er) In su1) 1ases, t)e
person or interediar- s)a!! #e 1onsidered ere!- as an a"ent o( t)e ep!o-er
*)o s)a!! #e responsi#!e to t)e *or<ers in t)e sae anner and e:tent as i( t)e
!atter *ere dire1t!- ep!o-ed #- )i.


Se1tion 2 o( t)e EO No. $7-'&,
0D
+0D, *)i1) ip!eents Arti1!e $'D o( t)e La#or
Code, provides:

Se1tion 2. "rohibition against labor*onl) #ontra#ting. 9 Labor'onl8
contractin% is hereb8 $eclare$ prohibite$) /or t)is purpose, !a#or-on!-
1ontra1tin" s)a!! re(er to an arran"eent *)ere t)e 1ontra1tor or su#1ontra1tor
ere!- re1ruits, supp!ies or p!a1es *or<ers to per(or a Ao#, *or< or servi1e (or a
prin1ipa!, and an- o( t)e (o!!o*in" e!eents are present:
0D+0D, E((e1tive Mar1) $D, &''&.
4i5 .)e 1ontra1tor or su#1ontra1tor does not )ave su#stantia! 1apita! or
investent *)i1) re!ates to t)e Ao#, *or< or servi1e to #e per(ored and
t)e ep!o-ees re1ruited, supp!ied or p!a1ed #- su1) 1ontra1tor or
su#1ontra1tor are per(orin" a1tivities *)i1) are dire1t!- re!ated to t)e
ain #usiness o( t)e prin1ipa!> or
4ii5 .)e 1ontra1tor does not e:er1ise t)e ri")t to 1ontro! over t)e per(oran1e
o( t)e *or< o( t)e 1ontra1tua! ep!o-ee.

In t)e present 1ase, t)e maestros did not )ave an- su#stantia! 1apita! or
investent. .en" aditted t)at )e so!e!- provided t)e 1apita! and e@uipent, *)i!e
t)e maestros supp!ied t)e *or<ers. .)e po*er o( 1ontro! over t)e respondent
*or<ers *as !od"ed not *it) t)e maestros #ut *it) .en". As 1)e1<ers, t)e
respondent *or<ersF ain tas<s *ere to 1ount and 1!assi(- t)e (is) 1au")t and
report t)e to .en". .)e- per(ored tas<s t)at *ere ne1essar- and desira#!e in
.en"Fs (is)in" #usiness. .a<en to"et)er, t)ese in1idents 1on(ir t)e e:isten1e o( a
!a#or-on!- 1ontra1tin" *)i1) is pro)i#ited in our Aurisdi1tion, as it is 1onsidered to
#e t)e ep!o-erFs attept to evade o#!i"ations a((orded #- !a* to ep!o-ees.

A11ordin"!-, *e )o!d t)at ep!o-er-ep!o-ee ties e:ist #et*een .en" and
t)e respondent *or<ers. A (indin" t)at t)e maestros are !a#or-on!- 1ontra1tors is
e@uiva!ent to a (indin" t)at an ep!o-er-ep!o-ee re!ations)ip e:ists #et*een
.en" and t)e respondent *or<ers. As re"u!ar ep!o-ees, t)e respondent *or<ers
are entit!ed to a!! t)e #ene(its and ri")ts appurtenant to re"u!ar ep!o-ent.

.)e disissa! o( an ep!o-ee, *)i1) t)e ep!o-er ust va!idate, )as a
t*o(o!d re@uireent: one is su#stantive, t)e ot)er is pro1edura!.
0%
+0%, Not on!-
ust t)e disissa! #e (or a Aust or an aut)oriHed 1ause, as provided #- !a*> t)e
rudientar- re@uireents o( due pro1ess J t)e opportunit- to #e )eard and to
de(end onese!( J ust #e o#served as *e!!.
07
+07, .)e ep!o-er )as t)e #urden o(
provin" t)at t)e disissa! *as (or a Aust 1ause> (ai!ure to s)o* t)is, as in t)e
present 1ase, *ou!d ne1essari!- ean t)at t)e disissa! *as unAusti(ied and,
t)ere(ore, i!!e"a!.
0?
+0?,

.)e respondent *or<erFs a!!e"ation t)at .en" suari!- disissed t)e on
suspi1ion t)at t)e- *ere not reportin" to )i t)e 1orre1t vo!ue o( t)e (is) 1au")t
in ea1) (is)in" vo-a"e *as never denied #- .en". =nsu#stantiated suspi1ion is not
a Aust 1ause to terinate oneFs ep!o-ent under Arti1!e &7&
2'
+2', o( t)e La#or
Code. .o a!!o* an ep!o-er to disiss an ep!o-ee #ased on ere a!!e"ations
0%+0%, "as#$a, et al. v. N65C, et al., 6.R. No. $&32$7, Mar1) $3, $??7, &7% SCRA 220.
07+07, Ibid., 1itin" Jamer, et al, v. N65C, et al., &%7 SCRA D3& 4$??%5.
0?+0?, Ibid., 1itin", Metro &ransit .rgani/ation, In#. v. N65C, et al., &D3 SCRA 3$3 4$??D5>
Mapalo v. N65C, et al., &33 SCRA &DD 4$??05> "hilippine Manpower (ervi#es, In#., et al. v.
N65C, et al., &&0 SCRA D?$ 4$??35.
2'+2', Art. &7&. .erination #- Ep!o-er. An ep!o-er a- terinate an ep!o-ent (or an-
o( t)e (o!!o*in" 1auses:
4a5 Serious is1ondu1t or *i!!(u! diso#edien1e #- t)e ep!o-ee o( t)e !a*(u! orders
o( )is ep!o-er or representative in 1onne1tion *it) )is *or<>
4#5 6ross and )a#itua! ne"!e1t #- t)e ep!o-ee o( )is duties>
415 /raud or *i!!(u! #rea1) #- t)e ep!o-ee o( t)e trust reposed in )i #- )is
ep!o-er or du!- aut)oriHed representative>
4d5 Coission o( a 1rie or o((ense #- t)e ep!o-ee a"ainst t)e person o( )is
ep!o-er or an- iediate e#er o( )is (ai!- or )is du!- aut)oriHed
representatives> and
4e5 Ot)er 1auses ana!o"ous to t)e (ore"oin".
and "enera!ities *ou!d p!a1e t)e ep!o-ee at t)e er1- o( )is ep!o-er, and *ou!d
eas1u!ate t)e ri")t to se1urit- o( tenure.
2$
+2$, /or )is (ai!ure to 1op!- *it) t)e
La#or CodeFs su#stantive re@uireent on terination o( ep!o-ent, *e de1!are
t)at .en" i!!e"a!!- disissed t)e respondent *or<ers.

=H!R!&OR!, *e D!N* t)e petition and A&&IRM t)e Septe#er &$,
&''0 de1ision and t)e Septe#er $, &''2 reso!ution o( t)e Court o( Appea!s in CA-
6.R. SP No. %7%73. Costs a"ainst t)e petitioners.

SO ORD!R!D.


ART(RO D) RION
Asso1iate Justi1e



=! CONC(R:



2$+2$, ($pra note 0%, 1itin", (an)o &ravel Corp., et al. v. N65C, &7' SCRA $&? 4$??%5> and
J%B and Asso#iates, In#. v. N65C, et al., &20 SCRA 02% 4$??D5.
CONCHITA CARPIO MORAL!S
Asso1iate Justi1e




L(CAS P) !RSAMIN
Asso1iate Justi1e


MARTIN S) VILLARAMA# 4R)
Asso1iate Justi1e




MARIA LO(RD!S P) A) S!R!NO
Asso1iate Justi1e









ATT!STATION

I attest t)at t)e 1on1!usions in t)e a#ove Ee1ision )ad #een rea1)ed in
1onsu!tation #e(ore t)e 1ase *as assi"ned to t)e *riter o( t)e opinion o( t)e CourtFs
Eivision.



CONCHITA CARPIO MORAL!S
Asso1iate Justi1e
Chairperson



C!RTI&ICATION

Pursuant to Se1tion $3, Arti1!e VIII o( t)e Constitution, and t)e Eivision
C)airpersonFs Attestation, it is )ere#- 1erti(ied t)at t)e 1on1!usions in t)e a#ove
Ee1ision )ad #een rea1)ed in 1onsu!tation #e(ore t)e 1ase *as assi"ned to t)e
*riter o( t)e opinion o( t)e CourtFs Eivision.




R!NATO C) CORONA
C)ie( Justi1e