G.R. No. 186621, March 12, 2014
SOUTH EAST INTERNATIONAL RATTAN, INC. and/or ESTANISLAO AGBAY, Petitioners, vs. JESUS J. COMING, Respondent.

FACTS

Respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of wages, and non-payment of various benefits against petitioners South East International Rattan, Inc. (SEIRI) and its President, Estanislao Agbay. Respondent alleged he was hired as a Sizing Machine Operator on March 17, 1984, paid ₱150 daily, and was dismissed on January 1, 2002, purportedly due to the company’s financial difficulties, with a promise of re-hiring which never materialized. Petitioners denied the existence of an employer-employee relationship, asserting that SEIRI was incorporated only in 1986, engaged primarily in export trading, and that respondent worked for their furniture suppliers, not for SEIRI directly. They presented evidence including SSS employment reports, payroll records (1999-2000) without respondent’s name, affidavits from suppliers (Allan Mayol and Faustino Apondar) certifying respondent worked for them, and affidavits from respondent’s brother, Vicente Coming, supporting their claim. Respondent submitted an affidavit from five former co-workers stating he was a pioneer employee of SEIRI for almost twenty years. The Labor Arbiter ruled in favor of respondent, finding him a regular employee illegally dismissed. The NLRC reversed the Labor Arbiter and dismissed the complaint. The Court of Appeals then reversed the NLRC, reinstated the Labor Arbiter’s decision with modifications on the computation of backwages and other benefits.

ISSUE

The primary issue is whether an employer-employee relationship existed between petitioners and respondent. Subsidiary issues include the correctness of the appellate court’s appreciation of evidence, the finding of illegal dismissal, and the computation of backwages.

RULING

The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals. The Court held that an employer-employee relationship existed between SEIRI and respondent. Applying the four-fold test, the Court found that petitioners exercised control over respondent as his work as a sizing machine operator was directly related to and necessary for SEIRI’s manufacturing business. The affidavits from co-workers constituted substantial evidence of employment, while the evidence presented by petitioners, particularly the affidavits from suppliers and Vicente Coming, were deemed unreliable and insufficient to overturn such finding. The payroll records and SSS reports were not conclusive as they pertained only to a limited period and did not disprove employment prior to 1999. Respondent’s dismissal, based on an alleged financial downturn, was illegal due to the employer’s failure to substantiate such claim with sufficient evidence and to comply with procedural due process. The award of backwages from the time of illegal termination until the finality of the decision, and the directive for the Labor Arbiter to recompute separation pay and other monetary awards, were upheld as consistent with law and jurisprudence.