GR 142351; (November, 2006) (Digest)
G.R. No. 142351 ; November 22, 2006
ST. MARTIN FUNERAL HOMES, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND BIENVENIDO ARICAYOS, Respondents.
FACTS
Bienvenido Aricayos filed a complaint for illegal dismissal against St. Martin Funeral Homes. He alleged he was the Operations Manager and was terminated due to the owner’s suspicion he misappropriated funds for tax payments. St. Martin contended no employer-employee relationship existed, stating Aricayos merely assisted the former owner, the petitioner’s mother, as a gesture of gratitude for financial help, without compensation or inclusion in company payroll. The Labor Arbiter dismissed the case for lack of jurisdiction, citing the Dela Salle University ruling that when the existence of an employer-employee relationship is disputed, the regular courts, not the Labor Arbiter, should resolve the issue after a full trial.
The NLRC reversed the Labor Arbiter, annulled the decision, and remanded the case for further proceedings to determine the factual issue of employer-employee relationship. St. Martin elevated the case to the Supreme Court via certiorari ( G.R. No. 130866 ), which issued a landmark ruling redirecting such petitions to the Court of Appeals. The CA, in the assailed decision, affirmed the NLRC’s remand order, finding no grave abuse of discretion.
ISSUE
Whether the Labor Arbiter correctly dismissed the complaint for lack of jurisdiction without first conducting a hearing or further proceedings to determine the existence of an employer-employee relationship.
RULING
The Supreme Court denied the petition and affirmed the CA. The Labor Arbiter erred in dismissing the complaint outright. Jurisdiction over illegal dismissal cases is conferred upon Labor Arbiters under Article 217 of the Labor Code. The pivotal issue of whether an employer-employee relationship exists is a question of fact that must be resolved by the Labor Arbiter as the quasi-judicial agency equipped to make such determination. The Dela Salle University doctrine is inapplicable; it pertains to specific instances where the claim arises from alleged hiring after probation, not to a blanket rule ousting labor tribunal jurisdiction whenever the relationship is contested.
The Labor Arbiter must first ascertain the relationship using the established four-fold test (selection, payment of wages, power of dismissal, control) before assuming or declining jurisdiction. Here, the parties submitted conflicting allegations and documents. Petitioner’s own admissions—that respondent assisted in management from 1995 until the owner’s death in 1996 and was later barred from participation—necessitated a deeper factual inquiry. The Labor Arbiter’s reliance solely on position papers, without a hearing to thresh out contrasting claims, was improper. Therefore, the NLRC correctly ordered a remand for appropriate proceedings, and the CA committed no error in upholding this order.