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SOUTH EAST INTERNATIONAL RATTAN v. JESUS J. COMING

FACTS:

Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged in manufacturing and exporting furniture. Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of wages, non-payment of holiday pay, 13th month pay, and service incentive leave pay. Respondent alleged that he was hired by the petitioners as a Sizing Machine Operator in 1984 and was unjustly dismissed on January 1, 2002. Petitioners denied having hired respondent and claimed that he worked for SEIRI's furniture suppliers. The Labor Arbiter ruled that the respondent is a regular employee of SEIRI, but the NLRC reversed this decision. The Court of Appeals ruled in favor of the respondent, stating that the respondent is a regular employee of SEIRI, and reinstated the Labor Arbiter's decision with a modification on the computation of back wages. Petitioners filed a motion for reconsideration, but it was denied. Thus, this petition for review on certiorari was filed before the Supreme Court.

This case primarily revolves around whether an employer-employee relationship exists between the petitioners and the respondent. The petitioners presented various pieces of evidence, such as Employment Reports to the SSS, Certifications, affidavits, payroll sheets, individual pay envelopes, and employee earnings records. However, these documents did not mention the respondent's name. An affidavit by Angelina Agbay, the Treasurer and Human Resources Officer, stated that SEIRI ceased operations in 1989 and only resumed business in 1992 with minimal manufacturing. Agbay also claimed that the company did not hire workers for certain tasks and that the President of the company, Estanislao Agbay, did not dispense salaries. On the other hand, Vicente Coming's affidavit mentioned that the respondent worked in a furniture factory from 1982 to 1986 and subsequently had various "pakiao" jobs. In 1999, the respondent worked as a sizing machine operator on an off-and-on basis for Allan Mayol, and also had a side job supplying rattan furniture to SEIRI.

ISSUES:

  1. Whether there exists an employer-employee relationship between petitioners and respondent.

  2. Whether petitioners are liable for illegal dismissal.

  3. Whether back wages should be computed from the time of illegal termination until the finality of the decision.

  4. Whether the Court of Appeals correctly appreciated the evidence presented by both parties.

RULING:

  1. The employer-employee relationship between petitioners and respondent exists. The Court used the four-fold test to determine this relationship.

  2. Petitioners are liable for illegal dismissal. The dismissal of respondent was without just and valid cause.

  3. Back wages should be computed from the time of the illegal termination until the finality of the decision.

  4. The Court of Appeals correctly appreciated the evidence presented by both parties, giving more weight to the affidavits of respondent's co-workers.

PRINCIPLES:

  • Four-fold Test:

    • Selection and engagement of the employee

    • Payment of wages

    • Power of dismissal

    • Power of control over the employee’s conduct

  • Security of Tenure (Article 279 of the Labor Code): An employee who is unjustly dismissed is entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of allowances and other benefits.

  • Substantial evidence: The amount of relevant evidence that a reasonable mind might accept as adequate to justify a conclusion.

  • Non-reporting to SSS: The fact that an employee was not reported to the SSS is not conclusive proof against the existence of an employer-employee relationship.

  • Burden of proof: The employer must prove affirmative defenses, such as the existence of an independent contractor.

  • In dubio pro operario: Doubts in evidence are resolved in favor of the laborer.