G.R. No. 204555 , July 06, 2020
Pedrito R. Parayday and Jaime Reboso, Petitioners, vs. Shogun Shipping Co., Inc., Respondent.

FACTS

Petitioners Pedrito R. Parayday and Jaime Reboso alleged they were employed as fitters/welders by Oceanview/VRC Lighterage Co., Inc., and VRC/Oceanview Shipbuilders Co., Inc. (Oceanview) in 1996 and 1997, respectively. They claimed that in 2003, Oceanview changed its corporate name to Shogun Shipping Co., Inc. (respondent), which retained them as employees. Their duties involved assembling, welding, fitting, and installing materials or components for Oceanview/Shogun barges. They worked seven days a week and were paid a daily salary. On May 11, 2006, they sustained burns from an explosion while working on respondent’s barge, M/T Daniela Natividad, in Lamao, Limay, Bataan. They were hospitalized until June 6, 2006. Respondent paid their medical expenses but not their salaries during confinement. Salaries resumed after discharge until the first week of August 2006, after which financial assistance for medical expenses stopped. Petitioners alleged they were verbally dismissed effective May 1, 2008, due to lack of work.
Respondent denied an employer-employee relationship, asserting it was a domestic cargo shipping corporation incorporated in November 2002, separate and distinct from Oceanview, which was engaged in shipbuilding. Respondent claimed petitioners were merely helpers occasionally called by its regular employees for temporary repair work on barges, not engaged on a regular basis. It presented affidavits from its Vessel Materials Coordinator and Warehouseman to support this. Respondent stated that in 2008, regular employees ceased calling helpers as repairs could be completed without them, and petitioners then demanded work which was unavailable.
The Labor Arbiter ruled petitioners were regular employees illegally dismissed, ordering reinstatement with backwages. The NLRC affirmed. The Court of Appeals reversed, setting aside the NLRC decision, finding no employer-employee relationship.

ISSUE

Whether an employer-employee relationship existed between petitioners and respondent Shogun Shipping Co., Inc.

RULING

No. The Supreme Court denied the petition and affirmed the Court of Appeals Decision. The employer-employee relationship was not established. The four-fold test—selection and engagement of employees, payment of wages, power of dismissal, and power of control—was not satisfied. Petitioners failed to substantiate their claim that Oceanview merely changed its name to Shogun Ships; evidence showed they were distinct corporations with different primary purposes. Petitioners’ presented documents (ID and Certificate of Employment) were issued by Oceanview, not respondent. The handwritten payslips lacked respondent’s letterhead or signature and were insufficient to prove respondent’s control over their work or payment of wages. The fact that respondent paid for their medical expenses after the 2006 explosion did not conclusively prove employment, as it could have been done out of beneficence. Petitioners’ claim of performing necessary and desirable tasks for respondent’s business was unsubstantiated, as their work as fitters/welders was not directly related to respondent’s cargo shipping business but to shipbuilding/repair, which was Oceanview’s line. The NLRC’s finding of regularity based on repeated need for their services was erroneous, as the necessity of the activity (ship repair) to the employer’s business (shipping) does not automatically confer regular employee status on the workers hired for such activity. Without proof of an employer-employee relationship, the claims for illegal dismissal and monetary benefits could not prosper.