labor hr double bundleRegular employment occurs when there is employer-employee relationship and the employee has been with the company for at least six (6) months and/or has been engaged to perform activities which are necessary or desirable in the  usual business or trade of the employer.

Rodrigo A. Upod vs. Onon Trucking and Marketing Corporation and Aimardo V. Interior

G.R. No. 248299, July 14, 2021

Regular employment of truck drivers in hauling business; Where the employee performed acts necessary and desirable to respondent company’s  business  and trade for more than a year, his  status had already ripened that of regular employment;


Respondent Onon Trucking and Marketing Corporation (Onon Trucking / Respondent Company) hired petitioner Rodrigo A. Upod (Upod) way hack in April 2004 as hauler/driver. His tasks consisted mainly of travelling to the manufacturing plant of San Miguel Brewery,  Inc. in San Fernando, Pampanga to withdraw stocks for piling and distribution to different grocery stores.

Upod was paid on a “per trip”  basis. He was  affiliated with respondent until 2009 when he got suspended on ground of alleged abandonment. Respondent company rehired him come 2014.

Since then, Upod peacefully and continuously reported for work until February 2017 when  he was no longer given any delivery assignment. He, nonetheless, continued maintaining the hauling trucks  for a few days. Thereafter, he decided to leave and file the present suit because  he realized that his continuous employment was no longer possible.

Respondent company, on the other hand, denied the supposed employer-employee relationship with Upod and asserted there could be no illegal dismissal to speak of since Upod was never its employee.  It countered that respondent Interior was the owner of Onon Trucking, an entity engaged in wholesale and retail of products. It hired independent freelance drivers like Upod to transport supplies to its clients. It paid the drivers on per delivery basis  which in Upod’s case was sixteen percent (16%) of the gross revenue per trip. Upod’s engagement ended without further notice, upon delivery of the supplies or upon his  return to the warehouse whichever came first.

LA Ruling:

The Labor Arbiter (LA) declared Upod as respondent company’s regular employee.

The labor arbiter held that all the elements of employer-employee relationship are present in this case: One. Respondent company hired Upod as driver to transport its goods to different parts of Luzon. Two. Respondent company paid Upod on per trip basis. Three. Respondent company’s power to dismiss Upod was inherently included in its power to engage the latter as its employee. Four. Upod performed his tasks  as truck driver under respondent company’s supervision and control.

Thus,  it was respondent company which determined Upod’ s route for the areas of delivery. The labor arbiter granted Upod’s prayer for separation pay, 13th month pay, and attorney’s fees but denied his claim for non-membership with the SSS, Philhealth, and Pag-Ibig. According to the labor arbiter, these claims should be lodged with the proper forum.

NLRC Ruling:

The National Labor Relations Commission (NLRC) reversed the LA.

The NLRC held that Upod did not adduce evidence to prove his supposed employment with respondent company. On the contrary, the terms of the per trip contract were clear –  the engagement ended upon completion of Upod’s delivery of the goods or his return to the  warehouse whichever came earlier. The limited engagement of Upod’s services-two to three (2-3) times per week also weighed heavily against Upod’s claim of employment with respondent company. Absent any employer-employee relationship between Upod and respondent company there could be no illegal dismissal to speak of.

Upod’s motion for reconsideration got denied.

CA Ruling:

The CA modified the NLRC Decision.

While it agreed with the labor arbiter that there was indeed an employer-employee relationship between the parties, it nevertheless refused to pronounce that the NLRC gravely abused its discretion when it held that Upod was not illegally dismissed. On the contrary, it held that Upod, as a fixed-term employee of respondent company, was validly dismissed.

Upod voluntarily signed the per trip contract such that the engagement ended upon his delivery of the goods or his return to the warehouse whichever came first, without need of further notice.

Upod’s motion for reconsideration was denied


Whether or not a truck driver on a per trip basis is a regular employee

SC Ruling:

The Supreme Court (SC) found the petition meritorious.

Before the Court could rule on illegal termination cases, the employee must first establish his or her employment relationship with the employer. The court ascertains whether the employee was able to discharge this burden by taking into account the determinative factors of employment under the four-fold test: (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.

The elements are all present here. One. Respondent company hired Upod as hauler/driver. Except for the interruption in Upod’s service from 2009 until 2014, he had been with respondent company since 2004 until 2017 or for about eight (8) years already.

Two. Respondent company paid Upod 16% of gross  revenues per trip. The fact that Upod was paid on per trip basis  does not negate the existence of an employer-employee relationship;  for the same is simply  a method for computing compensation. One may be paid on the basis of results or time expended on the work,  and may or may not acquire an employment status, depending on the presence or absence of the elements of an employer-employee  relationship.

Three. Respondent company’s power to hire included its inherent power to discipline Upod.

Four. Respondent company exercised the power of control over Upod’s performance of his task. For one, the truck which Upod operated was owned by respondent Onon Trucking. For another, respondent company specifically defined respondent’s route for e very delivery, e.g., Tuguegarao City, Cagayan to San Fernando, Pampanga.

In Chavez vs. National Labor  Relations Commission, the Court declared Chavez a regular employee despite having been engaged and paid on a per trip basis . The Court found that respondents engaged Chavez’ services without the intervention of a third party; Chavez received compensation from respondent company for the services he rendered to the  latter; respondents’ power to dismiss was inherently included in their power to engage the services of Upod as truck driver; and respondents’ right of control was manifested by attendant circumstances.

The SC reinstated the findings of the LA. Citing Article 295 of the Labor Code, the SC held that regular employee is  one who is either (i) engaged to perform activities which are necessary or desirable in the  usual business or trade of the employer; or (2) a casual employee who has rendered at least one (1) year of service, whether continuous or broken, with respect to the activity in which  he or she  is  employed.

As an entity engaged in the wholesale and  retail of various products, respondent company must necessarily engage the services of delivery  drivers, such as herein Upod, for the purpose of getting its products delivered to its clients. To be sure, since Upod had performed acts necessary and desirable to respondent company’s  business  and trade for more than a year, his  status had already ripened to a regular employment.

In Cielo vs. National Labor Relations Commission, therein Upod was declared a regular employee of the private respondent which was engaged in the trucking business  as a  hauler of cattle,  crops,  and other cargo for the Philippine Packing Corporation. Private respondent’s business, according to the Court, required the services of drivers continuously because the work was not seasonal, nor limited to a single

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undertaking or operation. Since Cielo had already completed more than  six ( 6) months of service with the trucking company, he was deemed to  have already acquired the status of a  regular employee at the time of his dismissal.

In the case of Upod  here, he  had  already been  in the service of respondent company continuously for eight (8) years before he got dismissed. To be valid,  Upod’s dismissal  should have been for just or authorized causes and only upon compliance with procedural due process.

As it was,  respondent company complied with neither conditions in effecting Upod’s dismissal. It just  abruptly stopped giving  delivery assignment to Upod in February 2017. Upod need  not even prove the fact of his dismissal in view of respondent company’s admission that it stopped giving assignment to Upod because allegedly, his contract already expired.

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