GR 185094; (November, 2009) (Digest)
G.R. No. 185094 ; November 25, 2009
MASONIC CONTRACTOR, INC. and MELVIN BALAIS/AVELINO REYES, Petitioners, vs. MAGDALENA MADJOS, ZENAIDA TIAMZON, and CARMELITA RAPADAS, Respondents.
FACTS
Respondents Magdalena Madjos, Zenaida Tiamzon, and Carmelita Rapadas were employed in 1991 by Masonic Contractor, Inc. (MCI) as all-around laborers performing various tasks such as driving, sweeping, and grass-cutting. They received daily wages directly from MCI and worked regular hours. In 2004, after being told to take a two-day leave, they were barred from returning to work and informed they had been replaced. This prompted them to file a complaint for illegal dismissal and non-payment of various monetary benefits.
Petitioners denied being the direct employer, arguing that MCI had maintenance contracts with memorial parks and engaged the services of a certain Luz Malibiran to provide manpower. They presented Malibiran’s affidavit stating the workers were independent contractors who voluntarily grouped together for work. The Labor Arbiter and the NLRC dismissed the complaint, ruling that respondents failed to prove MCI exercised control over their work, thus no employer-employee relationship existed.
ISSUE
Whether an employer-employee relationship existed between petitioners and respondents, making the dismissal illegal.
RULING
Yes, an employer-employee relationship existed, and respondents were illegally dismissed. The Supreme Court affirmed the Court of Appeals’ reversal of the NLRC decision. The determination of such a relationship hinges on the four-fold test: selection and engagement, payment of wages, power of dismissal, and the employer’s power of control, with the control test being paramount.
The facts substantiate all elements. Respondents were hired by MCI in 1991, performed continuous and varied duties for over a decade, and received wages directly from MCI’s payroll. Their work as all-around laborers was necessarily subject to MCI’s direction and control. Petitioners’ claim of a legitimate contracting arrangement through Malibiran fails. The Court found this setup indicative of labor-only contracting, as petitioners did not prove that Malibiran possessed substantial capital or investment. The burden to disprove labor-only contracting lies with the employer, which petitioners failed to discharge. Consequently, MCI is deemed the direct employer.
Since respondents were dismissed without just or authorized cause and without procedural due process, the dismissal was illegal. Furthermore, petitioners’ failure to specifically deny the claims for unpaid overtime, holiday, and 13th-month pay in their pleadings constitutes an admission of those liabilities under the Rules of Court. Petitioners were thus ordered to reinstate respondents or pay separation pay, full backwages, and the unpaid monetary benefits.