CONTROL IS THE MOST IMPORTANT ELEMENT THAT ESTABLISHES EMPLOYER-EMPLOYEE RELATIONSHIP

Control is the most crucial element of employer-employee relationship and if present in the case will establish such relationship.

Hence, the SC held that:

Sumifru (Philippines) Corp. vs. Nagkahiusang Mamumuo sa Suyapa Farm (Namasufa-Naflu-Kmu)

G.R. No. 202091, June 7, 2017

Facts:

Sumifru is a domestic corporation and is the surviving corporation after its merger with Fresh Banana Agricultural Corporation (FBAC). FBAC was engaged in the buying, marketing, and exportation of Cavendish bananas. Respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF A-NAFLU-KMU) (NAMASUF A) is a labor organization affiliated with the National Federation of Labor Unions and Kilusang Mayo Uno.

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The private respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF A-NAFLU-KMU), a legitimate labor organization, filed a Petition for Certification Election before the Department of Labor and Employment, Regional Office No. XI in Davao City. NAMASUFA sought to represent all rank-and-file employees, numbering around one hundred forty, of packing plant 90 (PP 90) of Fresh Banana Agricultural Corporation (FBAC). NAMASUF A claimed that there was no existing union in the aforementioned establishment.

The private respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF A-NAFLU-KMU) filed a Petition for Certification Election before the Department of Labor and Employment. NAMASUFA sought to represent all rank-and-file employees, numbering around one hundred forty, of packing plant 90 (PP 90) of Fresh Banana Agricultural Corporation (FBAC). NAMASUFA claimed that there was no existing union in the aforementioned establishment.

FBAC filed an Opposition to the Petition. It argued that there exists no employer-employee relationship between it and the workers involved. It alleged that members of NAMASUFA are actually employees of A2Y Contracting Services (A2Y), a duly licensed independent contractor, as evidenced by the payroll records of the latter.

NAMASUF A, in its Comment to Opposition countered, among others, that its members were former workers of Stanfilco before FBAC took over its operations sometime in 2002. The said former employees were then required to join the Compostela Banana Packing Plant Workers’ Cooperative (CBPPWC) before they were hired and allowed to work at the Packing Plant of FBAC. It further alleged that the members of NAMASUF A were working at PP 90 long before A2Y came.

Pending resolution of the petition, FBAC was merged with SUMIFRU, the latter being the surviving corporation.

Med-Arbiter Ruling:

The DOLE Med-Arbiter issued an Order granting the Petition for Certification Election of NAMASUF A and declared that Sumifru was the employer of the workers concerned.

The Med-Arbiter held that the “four-fold test” will show that respondent FBAC is the employer of petitioner’s members. The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; ( c) the power of dismissal; and ( d) the employer’s power to control the employee’s conduct.

The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. On the first factor, (selection and engagement of the employer), it is that the staff of FBAC advised that those who are interested to be hired in the Packing Plant to become members first of CBPPWC and get a recommendation from it.

On the second factor (payment of wages), while the FBAC tried to impress that workers are paid by A2Y Contracting Services, this at best is but an administrative arrangement. The payroll summary submitted does not contain the relevant information such as the employee’s rate of pay, deductions made and the amount actually paid to the employee.

On the third factor, (the power of dismissal), it is very clear that FBAC is the authority that imposes disciplinary measures against erring workers. This alone proves that it wields disciplinary authority over them. Finally, on the fourth factor which is the control test, the fact that the respondent FBAC gives instructions to the workers on how to go about their work is sufficient indication that it exercises control over their movements. The workers are instructed as to what time they are supposed to report and what time they are supposed to return. They were required to fill up monitoring sheets as they go about their jobs and even the materials which they used in the packing plant were supplied by FBAC.

Secretary of Labor Ruling:

Sumifru appealed to the DOLE Secretary and in a Resolution dated February 8, 2010, the DOLE Secretary dismissed the appeal. The DOLE Secretary ruled that Sumifru is the true employer of the workers.

Sumifru then filed a Petition for Certiorari with the CA raising the issue of whether the DOLE Secretary committed grave abuse of discretion in declaring it as the employer of the workers at PP 90.

CA Ruling:

The CA dismissed the petition.

The CA ruled that the DOLE Secretary did not commit grave abuse of discretion because the latter’s ruling that Sumifru was the employer of the workers was anchored on substantial evidence.

The CA, after reviewing the records, accorded respect to the findings of facts of the DOLE Secretary, which affirmed the Med-Arbiter, as they have special knowledge and expertise over matters under their jurisdiction.

Sumifru moved for reconsideration but the CA denied it. Hence, the Petition.

Issue/s:

Whether or not there is employer-employee relationship when the company required monitoring sheets and imposed disciplinary actions for non-compliance with “No Helmet -No Entry” “No ID -No Entry” policies.

SC Ruling:

Sumifru gave instructions to the workers on how to go about their work, what time they were supposed to report for work, required monitoring sheets as they went about their jobs, and provided the materials used in the packing plant.

In affirming the Med-Arbiter, the DOLE Secretary relied on the documents submitted by the parties and ascertained that Sumifru indeed exercised control over the workers in PP 90. The DOLE Secretary found that the element of control was present because Sumifru required monitoring sheets and imposed disciplinary actions for non-compliance with “No Helmet -No Entry” “No ID -No Entry” policies.