HSY MARKETING LTD., CO.,* Petitioner, v. VIRGILIO O. VILLASTIQUE, Respondent.

(G.R. No. 219569, August 17, 2016)

Prepared by : Matthew Evan M. Esteves

Topic : Tests to Determine the Existence of Employer-Employee Relationship

FACTS :

On 'January 3, 2003, respondent was employed by the petitioner as a field driver for Fabulous
Jeans & Shirt & General Merchandise, who was given the responsibility of delivering ready-to-
wear products and/or general merchandise. Respondent was involved in an accident on January
10, 2011, when the service vehicle he was operating in Iligan City struck a pedestrian. Fabulous
Jeans paid P64,157.15 for the pedestrian's hospitalization and medical costs; the respondent was
asked to pay back this sum, but to no effect. The respondent supposedly had to sign a resignation
letter on February 24, 2011, but he declined to do so. A few days later, when he tried to get his pay
for that week, but he was informed that it had been withheld because he had declined to resign.
The respondent is convinced that he was already terminated on February 26, 2011. Respondent
filed a complaint for illegal dismissal with money claims against Fabulous Jeans, and its owner
before the NLRC.

Petitioner, et al. claimed in their defense that respondent had been found to be a negligent and
reckless driver and had committed several violations in the course of his employment, which led
to the vehicle accident involving Dorataryo. After they paid for Dorataryo's hospitalization and
medical costs, respondent went on absence without leave, presumably to avoid liability for his
recklessness. His money claims will therefore fail because he was not fired.

The Labor Arbiter dismissed the complaint of illegal dismissal against Fabulous Jeans and Arqueza
for lack of factual and evidentiary basis, finding petitioner to be respondent's employer since there
is no evidence submitted by petitioner that respondent had indeed voluntarily resigned. So,
aggrieved, petitioner appealed to the NLRC which affirm the finding of the LA. The petitioner
moved for reconsideration but denied. Therefore, he elevated the case to the Court of Appeals but
likewise, CA sustained the decision of the lower court as it declared that respondent was not a field
personnel but a regular employee whose job was essential and necessary to the customary trade
and business of his employer.

ISSUES :

Whether or not an employment relationship existed between the parties in this case?
RULING:

Yes. The employment relationship existed between the parties. Considering that the LA, the
NLRC, and the CA consistently found petitioner liable as the employer of the respondent, the
Court sees no compelling reason to depart from their judgment on this score.

In fact, it is even worth noting that the respondent claimed in his Position Paper before the LA that
he was hired by petitioner and was required to report for work at its store in Cagayan de Oro City.
This was confirmed by petitioner in its own Position Paper, declaring the respondent to be "a field
driver for the Cagayan de Oro Branch of (petitioner) HSY MARKETING LTD., CO., (NOVO
JEANS & SHIRT)." Undoubtedly, petitioner should be bound by such admission and must not be
allowed to continue to deny any employer-employee relationship with respondent.

In addition, the Court had already exposed the practice of setting up "distributors" or "dealers"
which are, in reality, dummy companies that allow the mother company to avoid employer-
employee relations and, consequently, shield the latter from liability from employee claims in case
of illegal dismissal, closure, unfair labor practices, and the like. The petitioner failed to present
evidence to rebut on the claims against him. Therefore, it cannot be allowed to evade liability as
the employer of the respondent.