G.R. No. 142293 ; February 27, 2003
VICENTE SY, TRINIDAD PAULINO, 6B’S TRUCKING CORPORATION, and SBT TRUCKING CORPORATION, petitioners, vs. HON. COURT OF APPEALS and JAIME SAHOT, respondents.

FACTS

Private respondent Jaime Sahot began working for the petitioners’ family-owned trucking business in 1958 as a helper, later becoming a driver in 1965. He rendered continuous service for 36 years despite changes in the business name. In 1994, at age 59, Sahot suffered from various ailments, including osteoarthritis and heart enlargement, which affected his ability to drive. He applied for and was granted a week-long leave in May 1994. Due to his condition, he sought an extension for the month of June. Petitioners allegedly threatened to terminate him if he did not return to work. Unable to work due to pain and unable to retire because petitioners had not remitted his SSS premiums, Sahot was dismissed effective June 30, 1994. He subsequently filed a complaint for illegal dismissal.
Petitioners contended Sahot was not an employee but an industrial partner until 1994, when SBT Trucking Corporation was established and he allegedly became an employee. They argued Sahot abandoned his job by not reporting back after his leave and had voluntarily resigned. They also invoked a prior NLRC case involving other drivers to support their partnership claim.

ISSUE

The core issue is whether Sahot was an employee illegally dismissed due to illness or an industrial partner who abandoned his work.

RULING

The Supreme Court affirmed the Court of Appeals, ruling that Sahot was a regular employee illegally dismissed and entitled to separation pay. The Court meticulously applied the four-fold test for an employer-employee relationship: (1) the selection and engagement of the employee, (2) payment of wages, (3) power of dismissal, and (4) power of control. The evidence showed petitioners controlled Sahot’s work, dictating his assignments, routes, and schedule. He received a fixed monthly salary, not a share in profits, which is indicative of an employment relationship, not a partnership. The defense of industrial partnership was rejected as unsupported by evidence like a partnership agreement or profit-sharing scheme; it was a mere subterfuge to evade labor obligations.
Regarding dismissal, the Court found Sahot did not abandon his job. His failure to report was due to a debilitating illness, and he had duly applied for a leave extension. His dismissal, prompted by his illness, fell under Article 284 of the Labor Code, which allows termination due to disease but mandates payment of separation pay. Consequently, the Court upheld the award of separation pay computed at one-half month’s salary per year of service for his entire 36 years of service, from 1958 to 1994. The petitioners’ failure to remit SSS premiums was noted as a separate violation but did not negate the existence of the employment relationship and the illegality of the dismissal.