GR 124055; (June, 2000) (Digest)
G.R. No. 124055 ; June 8, 2000
ROLANDO E. ESCARIO, ET AL., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, CALIFORNIA MANUFACTURING CO. INC. AND DONNA LOUISE ADVERTISING AND MARKETING ASSOCIATES INCORPORATED, respondents.
FACTS
Petitioners worked as merchandisers for the products of California Manufacturing Co. Inc. (CMC). Their services were terminated on March 16, 1992. Petitioners filed a complaint for regularization and illegal dismissal against CMC, alleging they were its direct employees. They performed tasks like price-tagging and inventory under CMC’s control, using its materials, and claimed their salaries were paid by CMC through its agent, Donna Louise Advertising and Marketing Associates, Inc. (D.L. Admark), to evade legal liabilities.
CMC denied an employer-employee relationship, asserting it hired D.L. Admark as an independent promotional contractor. D.L. Admark intervened, claiming it was petitioners’ true employer, providing merchandising services to multiple clients, including CMC. The Labor Arbiter ruled for petitioners, finding them CMC’s employees performing necessary and desirable tasks in its business, citing the precedent in Tabas v. CMC. The NLRC reversed this decision on appeal.
ISSUE
Whether the NLRC committed grave abuse of discretion in ruling that no employer-employee relationship existed between petitioners and CMC, and that D.L. Admark was their lawful employer.
RULING
The Supreme Court denied the petition, affirming the NLRC’s decision. The Court applied the four-fold test for employer-employee relationship: selection and hiring, payment of wages, power of dismissal, and power of control. The evidence, particularly payroll documents and vouchers, conclusively showed that D.L. Admark hired petitioners, paid their salaries, and exercised the power to dismiss them. Petitioners failed to substantiate their claim of CMC’s control over their work performance. The memoranda they presented as proof were addressed to store owners or CMC’s regular staff, not to them.
Since a legitimate employer-employee relationship between D.L. Admark and petitioners was established, it became unnecessary to determine if petitioners’ tasks were integral to CMC’s business. On illegal dismissal, the Court agreed with the NLRC that D.L. Admark admitted dismissing petitioners for disowning it as their employer—a cause not recognized as just or authorized under the Labor Code—and without due process. The NLRC’s findings were supported by evidence and constituted a valid exercise of judgment, not grave abuse of discretion.