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GARDEN OF MEMORIES PARK v. NLRC

FACTS:

The case involved a petition seeking the nullification of the Court of Appeals' decision that affirmed the National Labor Relations Commission's finding of joint and several liability of Garden of Memories Memorial Park and Life Plan, Inc. (Garden of Memories) and Paulina Requiño (Requiño) for the money claims of respondent Hilaria Cruz (Cruz). Cruz, who worked as a utility worker at Garden of Memories, filed a complaint for illegal dismissal and other labor-related claims against the company. Garden of Memories argued that Cruz was not their employee but an employee of Requiño, who was their independent service contractor. However, the Labor Arbiter, the National Labor Relations Commission (NLRC), and the Court of Appeals all ruled that Requiño was a labor-only contractor due to her lack of substantial capital or investments. The NLRC's decision that Cruz's dismissal was illegal and that Garden of Memories and Requiño were jointly and severally liable for Cruz's monetary claims was upheld by the Court of Appeals. The petitioners appealed the decision, but the Supreme Court found no merit in their arguments and explained its limited jurisdiction to review only errors of law, not fact. The Supreme Court emphasized that the factual findings of labor officials, when supported by substantial evidence, are final and binding. It was also noted that the Labor Arbiter, NLRC, and Court of Appeals unanimously agreed that Requiño was not a legitimate contractor.

ISSUES:

  1. Whether petitioner Paulina Requiño is engaged in labor-only contracting

  2. Whether there exists an employer-employee relationship between respondent Hilaria Cruz and petitioner Garden of Memories

  3. Whether respondent Hilaria Cruz abandoned her work

  4. Whether there is a basis in granting the monetary awards in favor of respondent Cruz despite the absence of a clear pronouncement regarding the legality or illegality of her dismissal

RULING:

  1. Petitioner Paulina Requiño is engaged in labor-only contracting. The Court affirmed the findings of the tribunals below, stating that Requiño lacked the substantial capital or investment required for an independent contractor and did not exercise the right to control the performance of the work.

  2. There exists an employer-employee relationship between respondent Hilaria Cruz and petitioner Garden of Memories. Due to the labor-only contracting nature of Requiño's arrangement, Requiño was considered merely an agent of Garden of Memories, making Cruz an employee of Garden of Memories.

  3. Respondent Hilaria Cruz did not abandon her work. The Court agreed with the findings that Cruz did not show any intention to sever her employment and actively sought to continue her employment.

  4. There is a basis in granting the monetary awards in favor of respondent Cruz. Given the findings of illegal dismissal and labor-only contracting, the monetary awards were upheld.

PRINCIPLES:

  • Labor-only contracting occurs when the contractor does not have substantial capital or investment and the workers are performing activities directly related to the employer’s business. In such cases, the contractor is considered merely an agent of the employer.

  • Employer-employee relationship may be established even through a contractor if said contractor is found to be engaged in labor-only contracting.

  • Illegal dismissal occurs when an employee, especially a regular one, is terminated without just cause or due process.

  • Burden of proof lies with the employer to show that an employee abandoned their work, demonstrating both an absence without justifiable reason and a clear intent to sever the employer-employee relationship.