G.R. No. 169704 ; November 17, 2010
ALBERT TENG, doing business under the firm name ALBERT TENG FISH TRADING, and EMILIA TENG-CHUA, Petitioners, vs. ALFREDO S. PAHAGAC, EDDIE D. NIPA, ORLANDO P. LAYESE, HERNAN Y. BADILLES and ROGER S. PAHAGAC, Respondents.

FACTS

Petitioners, Albert Teng Fish Trading and its proprietors, are engaged in deep-sea fishing. They claimed that they entered into joint venture agreements with master fishermen (maestros), who managed the fishing voyages and hired their own crew, including the respondents who acted as checkers. The respondents, however, filed a complaint for illegal dismissal, alleging they were directly hired by Teng to act as his “eyes and ears” on the boats, reporting catch details via radio, receiving his unloading instructions, and handling provisions. They asserted they received fixed monthly salaries, 13th month pay, bonuses, and incentives based on the catch. They were terminated after Teng expressed doubts about their catch reports.
The Voluntary Arbitrator (VA) ruled in favor of Teng, finding no employer-employee relationship. The respondents filed a motion for reconsideration, which the VA denied, opining that its rules did not provide for such a motion. The respondents then appealed to the Court of Appeals (CA), which reversed the VA, finding an employer-employee relationship and illegal dismissal. Teng appealed to the Supreme Court, arguing the VA decision had become final due to an improper motion for reconsideration and that no employment relationship existed.

ISSUE

1. Did the filing of a motion for reconsideration from the VA’s decision render it final and executory, depriving the CA of jurisdiction?
2. Was an employer-employee relationship established between Teng and the respondents?

RULING

The Supreme Court denied the petition, affirming the CA. On the procedural issue, the Court held that the 1989 Procedural Guidelines cited by the VA, which allegedly prohibited a motion for reconsideration, were not validly issued as they lacked publication. Consequently, the applicable rules were those under the Labor Code and the Revised Rules of Court, which allow such motions. The respondents’ motion for reconsideration was thus a proper remedy that tolled the period for appeal, and the CA correctly acquired jurisdiction.
On the substantive issue, the Court applied the four-fold test for employment. It found that Teng exercised control over the respondents: they followed his specific instructions on reporting and unloading the catch, and he approved their procurement lists. The payment of fixed monthly salaries, not merely shares in the catch, indicated compensation characteristic of an employee. Teng provided the fishing boats, gear, and capital, satisfying the tools and instrumentality test. The respondents’ duties as checkers were integral to Teng’s deep-sea fishing business. Therefore, an employer-employee relationship was established. Their dismissal, being without just or authorized cause and due process, was illegal. The case was remanded for computation of backwages and separation pay.