G.R. No. 129076 November 25, 1998
ORLANDO FARMS GROWERS ASSOCIATION/GLICERIO AÑOVER, petitioner, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (FIFTH DIVISION), ANTONIO PAQUIT, ESTHER BONGGOT, FRANCISCO BAUG, LEOCADIO ORDONO, REBECCA MOREN, MARCELINA HONTIVEROS, MARTIN ORDONO, TITO ORDONO, FE ORDONO, ERNIE COLON, EUSTIQUIO GELDO, DANNY SAM, JOEL PIAMONTE, FEDERICO PASTOLERO, VIRGINIA BUSANO, EDILMIRO ALDION, EUGENIO BETICAN, JR. and BERNARDO OPERIO, respondents.

FACTS

Petitioner Orlando Farms Growers Association, with co-petitioner Glicerio Añover as its President, is an association of landowners engaged in the production of export quality bananas. It was established to deal collectively with Stanfilco on technical services, canal maintenance, irrigation, and pest control. Respondents were hired as farm workers by several member-landowners but were made to perform functions as packers and harvesters in the plantation of the petitioner association. After respondents were dismissed on various dates from January 8, 1993 to July 30, 1994, they filed complaints for illegal dismissal and monetary benefits. The Labor Arbiter, in a decision dated September 6, 1995, declared the dismissals illegal and ordered reinstatement, payment of backwages, and other benefits. The NLRC affirmed this decision in toto. Petitioner filed a petition for certiorari, arguing that the NLRC erred in finding that respondents were its employees, contending that the individual landowners were the true employers as evidenced by their payment of SSS contributions and that the association, being unregistered, could not be considered an employer. Petitioner also claimed it never exercised control over the respondents’ work.

ISSUE

The principal issue is whether an unregistered association may be an employer independent of the respective members it represents. Corollary to this is whether an employer-employee relationship existed between the petitioner association and the respondents, and whether the dismissal was valid.

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the decision of the NLRC, subject to the deletion of the award of moral damages and attorney’s fees, and remanded the case to the Labor Arbiter to specify the individual awards. The Court held that an unregistered association can be considered an employer under Article 212(e) of the Labor Code, which defines an employer as “any person acting in the interest of an employer, directly or indirectly.” The law does not require registration. The Court found substantial evidence to support the existence of an employer-employee relationship, applying the four-fold test: (1) selection and engagement; (2) payment of wages; (3) power of dismissal; and (4) power of control, the last being the most important. The petitioner association issued circulars and memoranda concerning work rules, issued identification cards to the workers, and entered into compromise agreements involving money claims of employees, acts indicative of control and employer status. The NLRC’s factual findings, which coincided with those of the Labor Arbiter, were accorded respect and finality. The Court further ruled that the petitioner failed to prove a valid ground for dismissal and did not observe the due process requirements (the two-notice rule). Consequently, the dismissals were illegal. Respondents were entitled to full backwages from the date of dismissal up to reinstatement, not limited to three years.