G.R. No. 219569 , August 17, 2016
HSY MARKETING LTD., CO., PETITIONER, VS. VIRGILIO O. VILLASTIQUE, RESPONDENT.

FACTS

Petitioner HSY Marketing Ltd., Co. hired respondent Virgilio O. Villastique as a field driver on January 3, 2003, with a daily compensation of ₱370.00, tasked to deliver ready-to-wear items and general merchandise for Fabulous Jeans & Shirt & General Merchandise. On January 10, 2011, respondent figured in a vehicular accident, injuring a pedestrian, Ryan Dorataryo. Petitioner shouldered the medical expenses of ₱64,157.15, which it asked respondent to reimburse. On February 24, 2011, respondent was allegedly required to sign a resignation letter, which he refused. When he tried to collect his salary a few days later, he was told it was withheld due to his refusal to resign. Convinced he was terminated on February 26, 2011, respondent filed a complaint for illegal dismissal with money claims against petitioner, Fabulous Jeans, and its owner, Alexander G. Arqueza.
Petitioner contended that respondent was a negligent and reckless driver, committed several violations, and went on absence without leave after the accident to evade liability, thereby voluntarily severing his employment. The Labor Arbiter dismissed the illegal dismissal charge, finding no evidence of termination or voluntary resignation, but awarded separation pay (in lieu of reinstatement due to strained relations) and service incentive leave pay. The NLRC and the Court of Appeals affirmed these findings. Petitioner elevated the case to the Supreme Court.

ISSUE

1. Whether an employer-employee relationship existed between petitioner and respondent.
2. Whether respondent was illegally dismissed or voluntarily resigned, and consequently, whether the award of separation pay was proper.
3. Whether respondent is a regular employee entitled to service incentive leave pay.

RULING

1. On the existence of an employer-employee relationship: YES. The Supreme Court upheld the consistent findings of the Labor Arbiter, NLRC, and Court of Appeals that petitioner was the employer of respondent. The Court noted that the issue is factual, and it found no cogent reason to depart from the lower tribunals’ unanimous conclusion. Petitioner admitted in its Position Paper that respondent was “a field driver for the Cagayan de Oro Branch of HSY MARKETING LTD., CO., (NOVO JEANS & SHIRT).” The Court also cited the pernicious practice of setting up dummy companies to avoid employer-employee relations, as alleged by respondent and not rebutted by petitioner. Thus, petitioner cannot evade liability as the employer.
2. On illegal dismissal or voluntary resignation and the award of separation pay: The Supreme Court agreed with the lower tribunals that respondent was NOT illegally dismissed. There was no substantial evidence, other than respondent’s self-serving allegation, to prove that petitioner dismissed him or prevented him from returning to work. However, the Court also found no evidence of voluntary resignation or abandonment by respondent. Since there was no dismissal, the award of separation pay was NOT proper. Separation pay is granted only in instances of illegal dismissal, or when employment is terminated for authorized causes under Article 283 of the Labor Code, or in cases of disease under Article 284. As the employer-employee relationship was not severed by a dismissal or resignation, the award of separation pay had no legal basis and was deleted.
3. On respondent’s entitlement to service incentive leave pay: YES. The Supreme Court affirmed the CA’s ruling that respondent was a regular employee, not a field personnel. His task as a driver was necessary and desirable to the usual trade or business of his employer. As such, he was entitled to service incentive leave pay under Article 95 of the Labor Code. Petitioner failed to present payroll or pay slips to prove that this benefit had been paid. Therefore, the award of service incentive leave pay stands.