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FERNANDEZ v. KALOOKAN SLAUGHTERHOUSE INC./CUNANAN

FACTS:

The petitioner Arnulfo M. Fernandez (petitioner) claimed that he was hired as a butcher by Kalookan Slaughterhouse, Inc. (Kalookan Slaughterhouse) owned by respondent Ernesto Cunanan (Cunanan) in 1994. He alleged that he worked from Monday to Sunday, from 6:30 P.M. to 7:30 A.M., with a daily wage of initially P700.00, which was later reduced to P500.00. He also stated that he had an accident while driving Kalookan Slaughterhouse's truck in December 2013 and that deductions were made from his wages. After questioning these deductions in July 2014, petitioner alleged that he was treated unreasonably. On July 21, 2014, he claimed to have suffered from a headache and did not report for work. The next day, he was shocked to receive only P200.00 due to previous undertime, and he was informed that he could no longer report for work due to his old age.

Kalookan Slaughterhouse, on the other hand, argued that petitioner is an independent butcher working under its Operation Supervisor named Cirilo Tablit (Tablit). They asserted that he received payment based on the number of hogs he butchered and was only required to be in the slaughterhouse when customers brought hogs to be slaughtered. Kalookan Slaughterhouse implemented policies on the entry to the premises, which applied to employees, dealers, independent butchers, hog and meat dealers, and trainees. They claimed that petitioner violated these policies and misconstrued his disallowance to enter the slaughterhouse as an act of dismissal.

Petitioner filed a complaint for illegal dismissal before the Labor Arbiter (LA) on August 5, 2014. The LA ruled in favor of petitioner, finding him to have been illegally dismissed. Kalookan Slaughterhouse and Cunanan were ordered jointly and severally to pay backwages, separation pay, service incentive leave pay, 13th month pay, night shift differential, and attorney's fees. Kalookan Slaughterhouse appealed to the National Labor Relations Commission (NLRC), which reversed the LA's decision, dismissing the case for lack of employer-employee relationship. The Court of Appeals (CA) affirmed the NLRC's decision, denying petitioner's petition for certiorari. Petitioner now seeks a review before the Supreme Court.

ISSUES:

  1. Whether there is an employer-employee relationship between the petitioner and Kalookan Slaughterhouse or its supervisor Tablit.

  2. Whether the NLRC and CA committed a grave error in ruling that petitioner was only engaged by Tablit and was Tablit's own employee.

  3. Whether petitioner was an employee of Kalookan Slaughterhouse or of Tablit.

  4. Whether petitioner was illegally dismissed.

  5. Whether the petitioner was illegally dismissed by Kalookan Slaughterhouse Incorporated.

  6. Whether the Labor Arbiter was correct in awarding backwages, separation pay, service incentive leave pay, night shift differential pay, and 13th month pay to the petitioner.

  7. Whether legal interest should be imposed on the backwages and separation pay awarded to the petitioner.

RULING:

  1. YES. The LA found that petitioner was engaged by Kalookan Slaughterhouse itself based on the log sheets and gate passes submitted by the petitioner. The NLRC and CA, however, ruled that petitioner was engaged by Tablit. The Court agrees with the LA's findings and rules that there is an employer-employee relationship between petitioner and Kalookan Slaughterhouse.

  2. YES. The NLRC and CA committed a grave error in ruling that Tablit was petitioner's employer. The Court cites a previous case, Masonic Contractor, Inc. v. Madjos, where it was held that the provision of identification cards and uniforms by the company to the employee is sufficient evidence to prove the existence of an employer-employee relationship. In this case, petitioner was provided with gate passes and an identification card that stated he was a butcher. Additionally, Tablit's affidavit did not show that he exercised control over petitioner's means and methods of work. Therefore, the Court agrees with the LA's finding that petitioner was engaged by Kalookan Slaughterhouse, not Tablit.

  3. Petitioner was an employee of Kalookan Slaughterhouse. The totality of evidence, including documents such as gate passes, log sheets, and a trip ticket, proved that petitioner was engaged by Kalookan Slaughterhouse. The claim that petitioner was Tablit's employee was not proven, as no documents were presented to show that Tablit paid petitioner's salaries. Additionally, Kalookan Slaughterhouse effectively admitted that petitioner worked for them by alleging that he rendered services as Tablit's employee.

  4. Petitioner was illegally dismissed. The Labor Arbiter correctly ruled that petitioner's allegation of dismissal was unrebutted. The National Labor Relations Commission's ruling that petitioner was not allowed to enter due to failure to comply with the slaughterhouse's policies did not adequately address the issue of dismissal. Therefore, petitioner is entitled to his money claims.

  5. The Court ruled that the petitioner was indeed illegally dismissed by Kalookan Slaughterhouse Incorporated. The failure of the respondent to specifically deny that the petitioner was informed that he could no longer report to work on a certain date is deemed as admission that the dismissal occurred on that date.

  6. The Court held that the Labor Arbiter correctly awarded backwages and separation pay to the petitioner. The respondent failed to provide evidence that it had paid the petitioner the service incentive leave pay, night shift differential pay, and 13th month pay that he was entitled to. The Court limited the award to three years prior to the filing of the complaint.

  7. The Court ruled that legal interest at the rate of six percent per annum should be imposed on the backwages and separation pay awarded to the petitioner from the finality of the decision until it is fully satisfied.

PRINCIPLES:

  • The existence of an employer-employee relationship is determined by the four-fold test, which includes the selection and engagement of the employee, payment of wages, power of dismissal, and power to control the employee's conduct.

  • The provision of identification cards and uniforms by a company is substantial evidence to prove the existence of an employer-employee relationship.

  • In exceptional cases, the Court may review factual findings of labor tribunals and the CA when there is insufficient evidence to support their findings or when conflicting findings exist.

  • Admissions in pleadings are binding on the party making them and constitute judicial admissions (Pamplona Plantation Company v. Acosta).

  • Negative pregnants are allegations that are denials but pregnant with the admission of substantial facts in the pleading responded to (Pamplona Plantation Company v. Acosta).

  • An allegation not specifically denied is deemed admitted.

  • Backwages and separation pay are awarded until the finality of the decision that granted them, unless there are exceptional circumstances such as the death of the employee.

  • The burden of proof to show payment of benefits rests on the employer.

  • Legal interest is imposed on monetary awards in labor cases.