GR 106212; (March, 1997) (Digest)
G.R. No. 106212 March 7, 1997
PROGRESS HOMES and ERMELO ALMEDA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, GREGORIO A. MEDRANO, et al., respondents.
FACTS
Petitioner Progress Homes Subdivision, a project of the Ermelo M. Almeda Foundation, Inc., undertook a low-cost housing project in Camarines Sur. Petitioner Ermelo Almeda is its President and General Manager. Private respondents, construction workers, filed a complaint for illegal dismissal, backwages, and other monetary claims. They alleged they were regular employees, paid below minimum wage, and were dismissed after demanding benefits. Petitioners countered that no employer-employee relationship existed, claiming private respondents were not hired by them and were merely project employees.
The Labor Arbiter ruled for the workers, finding an employer-employee relationship existed as they were hired through foreman Rodolfo Badillo, and declared the dismissal illegal. The NLRC affirmed the decision, holding petitioners jointly and severally liable for backwages and separation pay.
ISSUE
Whether the National Labor Relations Commission committed grave abuse of discretion in affirming the Labor Arbiter’s decision which found an employer-employee relationship and illegal dismissal based on insufficient evidence.
RULING
Yes. The Supreme Court granted the petition, set aside the NLRC decision, and remanded the case for further proceedings. The Court found the evidence insufficient to establish an employer-employee relationship. The Labor Arbiter erroneously dismissed the foreman’s affidavit denying the hiring as merely “self-serving” without basis and relied on bare allegations. The fundamental guidelines to determine such a relationship—selection and engagement, payment of wages, power of dismissal, and the right-of-control test—were not substantiated. Private respondents failed to present concrete evidence, such as pay slips or contracts, proving petitioners hired them. The Labor Arbiter should have conducted a hearing to resolve these factual issues, especially given the categorical denial of employment. Procedurally, reliance solely on position papers, where vital facts are contested, deprived petitioners of due process. Furthermore, the NLRC erred in holding Almedo solidarily liable without evidence of malice or bad faith on his part. Corporate officers are not personally liable for corporate obligations unless such malice is proven.