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ATOK BIG WEDGE COMPANY v. JESUS P. GISON

FACTS:

In February 1992, respondent Jesus P. Gison was engaged as a part-time consultant on a retainer basis by petitioner Atok Big Wedge Company, Inc. He assisted the company's legal counsel in prosecuting cases against illegal surface occupants and performed liaison work with government agencies. Respondent was paid a monthly retainer fee of P3,000.00. The parties executed a retainer agreement, but it was misplaced and could no longer be found.

The retainer arrangement continued for eleven years until respondent requested for his registration with the Social Security System (SSS). Petitioner did not grant this request, claiming that he was only a retainer/consultant. On the same date that the registration request was made, petitioner terminated the retainer contract, stating that respondent's services were no longer necessary.

Respondent filed a complaint against petitioner for its refusal to register him with the SSS, as well as for illegal dismissal, unfair labor practice, underpayment of wages, non-payment of 13th month pay, vacation pay, and sick leave pay. He alleged that there was an employer-employee relationship, that his involvement with petitioner's problems was not temporary, and that he performed liaison work and other tasks for the company.

The Labor Arbiter dismissed the complaint, finding no employer-employee relationship. The NLRC affirmed the dismissal. Respondent filed a petition for review with the Court of Appeals (CA), which ruled in his favor. The CA held that respondent should be considered a regular employee under Article 280 of the Labor Code and ordered reinstatement and payment of backwages.

Petitioner filed this petition for review on certiorari before the Supreme Court seeking to reverse the CA's decision.

ISSUES:

  1. Whether or not the Court of Appeals decided questions of substance contrary to law and applicable rulings of the Supreme Court when it gave due course to the petition for certiorari despite the fact that there was no showing that the National Labor Relations Commission (NLRC) committed grave abuse of discretion.

  2. Whether or not the Court of Appeals decided questions of substance contrary to law and applicable rulings of the Supreme Court when it based its finding that the respondent is entitled to regular employment on a provision of law that the Supreme Court has declared to be inapplicable in case the existence of an employer-employee relationship is in dispute or is the fact in issue.

  3. Whether or not the Court of Appeals decided questions of substance contrary to law and applicable rulings of the Supreme Court when it erroneously found that the respondent is a regular employee of the company.

  4. Whether or not the Court of Appeals decided questions of substance contrary to law and applicable rulings of the Supreme Court when it erroneously directed respondent's reinstatement despite the fact that the nature of the services he provided to the company was sensitive and confidential.

  5. Whether there is an employer-employee relationship between the petitioner and the respondent.

  6. Whether the respondent is entitled to the rights and privileges of a regular employee.

  7. Whether or not the appellate court committed reversible error in ruling that there was substantial evidence to establish the guilt of the accused beyond reasonable doubt for illegal possession of firearms and ammunition.

RULING:

  1. The Court ruled in favor of the petitioner and held that the Court of Appeals erred in deciding in favor of the respondent. The Court held that:

  2. The Court of Appeals should have limited the issue on whether or not there was grave abuse of discretion on the part of the NLRC in rendering the resolution affirming the decision of the Labor Arbiter. The petition filed by the respondent before the Court of Appeals was a petition for certiorari under Rule 65 of the Rules of Court, and the CA should have strictly observed the doctrine on hierarchy of courts as the appropriate forum for the relief desired.

  3. The Court of Appeals erred in applying Article 280 of the Labor Code in determining whether there was an employer-employee relationship between the petitioner and the respondent. Article 280 only sets the distinction between a casual employee and a regular employee for purposes of determining the rights of an employee to be entitled to certain benefits. It does not apply when the existence of an employer-employee relationship is in dispute.

  4. The determination of whether an employer-employee relationship exists is a question of fact, and the findings of the Labor Arbiter and the NLRC on this matter should be accorded great weight and finality when supported by substantial evidence. The Court should defer to their determination in this case.

  5. The Court found that there is no employer-employee relationship between the petitioner and the respondent. The control test, which is the most crucial indicator of the presence of an employer-employee relationship, was not present in this case. The petitioner did not control the manner and methods by which the respondent performed his tasks, and the respondent was given the freedom to accomplish the tasks using his own means and methods. The absence of control on the part of the petitioner led to the conclusion that there is no employer-employee relationship.

  6. The respondent is not entitled to the rights and privileges of a regular employee. Even though the respondent performed tasks for the petitioner for eleven years, this did not result in the respondent becoming a regular employee. The length of service and the repeated assignment of tasks by the petitioner did not grant the respondent the rights and privileges of a regular employee. Article 280 of the Labor Code, which distinguishes between regular employees and casual employees, is not applicable in this case. The Court ruled that Article 280 does not determine the existence of an employment relationship but is only used to determine the right of an employee to certain benefits, to join or form a union, or to security of tenure.

  7. The Court held that the appellate court committed reversible error in finding the accused guilty beyond reasonable doubt for illegal possession of firearms and ammunition. The Court emphasized that the prosecution failed to establish beyond reasonable doubt that the accused owned or possessed the firearms and ammunition illegally. The prosecution's evidence was purely circumstantial and did not sufficiently prove the accused's guilt. Thus, the Court acquitted the accused of the charges.

PRINCIPLES:

  • The special civil action of certiorari under Rule 65 of the Rules of Civil Procedure is the proper remedy to question the resolution of the NLRC, and it should be initially filed before the Court of Appeals in observance of the doctrine of hierarchy of courts. (St. Martin Funeral Home v. NLRC)

  • The existence of an employer-employee relationship is a question of fact, and the determination thereon by the Labor Arbiter and the NLRC shall be accorded respect and finality when supported by substantial evidence. (Jurisprudence)

  • The four-fold test is used to determine the existence of an employer-employee relationship: (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, or the so-called "control test."

  • The control test is the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. It exists when the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.

  • An employer-employee relationship may be absent even if the tasks performed are necessary and desirable for the business of the employer.

  • Article 280 of the Labor Code, which distinguishes between regular employees and casual employees, is not used to determine the existence of an employment relationship but to determine certain rights and privileges of employees.

  • In criminal cases, the prosecution has the burden of proving the guilt of the accused beyond reasonable doubt.

  • Circumstantial evidence must be consistent with each other, consistent with the hypothesis that the accused is guilty, and inconsistent with any other hypothesis.

  • Mere presence at the scene of the crime or association with the principal actors is not sufficient to establish guilt beyond reasonable doubt.