G.R. No. 222219 . October 03, 2018
REYNALDO S. GERALDO, PETITIONER, VS. THE BILL SENDER CORPORATION/MS. LOURDES NER CANDO, RESPONDENTS.

FACTS

Petitioner Reynaldo S. Geraldo was employed by respondent The Bill Sender Corporation, a company engaged in delivering bills for clients like PLDT, as a delivery/messenger man on June 20, 1997. He was compensated on a per-piece basis, with his salary dependent on the number of bills delivered. Geraldo alleged that on August 7, 2011, the company’s operations manager informed him of his termination for alleged failure to deliver certain bills, a charge he disputed. He filed a complaint for illegal dismissal, claiming his termination was effected without due process. The corporation countered that Geraldo was not a regular employee but a piece-rate worker who reported for work at his own discretion and had abandoned his job.
The Labor Arbiter ruled in Geraldo’s favor, declaring him a regular employee performing work necessary and desirable to the company’s business. The LA found the dismissal illegal due to the company’s failure to prove just cause and observe due process, awarding separation pay, backwages, and other benefits. The NLRC affirmed this decision. However, the Court of Appeals reversed, holding that no employer-employee relationship existed. The CA reasoned that being paid per piece and the alleged practice of messengers transferring between companies meant Geraldo was hired on a per-result basis and was not an employee entitled to security of tenure.

ISSUE

The core issue is whether an employer-employee relationship existed between Geraldo and The Bill Sender Corporation, making his dismissal subject to labor laws on security of tenure and due process.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the NLRC Decision with modification. The Court held that an employer-employee relationship indisputably existed. The determination of such a relationship is based on the four-fold test: the selection and engagement of the employee; payment of wages; power of dismissal; and the employer’s power to control the employee’s conduct, which is the most important indicator. The Court found that all four elements were present. The company hired Geraldo, paid him wages (albeit on a per-piece basis), possessed the power to dismiss him, and exercised control over his delivery routes and methods. The mode of compensation, whether time-based or output-based, is irrelevant to the existence of an employment relationship.
The Court emphasized that Geraldo was a regular employee. His work as a delivery man was clearly necessary and desirable to the company’s main business of delivering bills. His repeated engagement for over a year, despite the per-piece payment scheme, solidified his status as a regular employee under Article 280 of the Labor Code. Consequently, he was entitled to security of tenure. The company failed to prove a valid cause for dismissal and did not comply with the twin-notice requirement, rendering Geraldo’s dismissal illegal. He was thus entitled to backwages, separation pay, and other monetary awards. However, the Court absolved respondent Lourdes Ner Cando, the corporate president, from personal liability, as there was no evidence she acted with malice or bad faith in the dismissal. The corporate veil cannot be pierced absent proof of fraud or bad faith.