G.R. No. 72654-61; January 22, 1990
ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN, NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or ARSENIO DE GUZMAN, respondents.

FACTS

The petitioners were fishermen-crew members of the trawl fishing vessel 7/B Sandyman II, owned and operated by private respondent De Guzman Fishing Enterprises. They served in various capacities such as patron/pilot, engineers, and fishermen. Their compensation was based on a percentage commission of the proceeds from the sale of the fish catch, with guaranteed minimum weekly incomes. On September 11, 1983, upon the vessel’s arrival at port, the petitioners were instructed by the company president to report to the police station for investigation regarding an alleged sale of fish-catch at midsea. They denied the charge, attributing it to their recent formation of a labor union. No evidence was presented, and no formal charges were filed. Nevertheless, they were not allowed to return to work.
The petitioners filed complaints for illegal dismissal and non-payment of monetary benefits. The Labor Arbiter dismissed their complaints, ruling that a “joint fishing venture,” not an employer-employee relationship, existed between the parties. This decision was affirmed by the National Labor Relations Commission (NLRC). The petitioners elevated the case to the Supreme Court, arguing that the NLRC committed grave abuse of discretion.

ISSUE

The primary issue is whether an employer-employee relationship existed between the petitioners and De Guzman Fishing Enterprises.

RULING

The Supreme Court ruled in favor of the petitioners, finding that an employer-employee relationship did exist. The Court applied the four-fold test: the selection and engagement of the employee, payment of wages, power of dismissal, and the employer’s power of control over the employee’s conduct. The element of control was deemed decisive. The evidence established that the private respondent exercised control over the petitioners through its operations manager, who supervised the fishing operations by fixing schedules, directing the vessel’s course via radio, determining the volume of catch, and setting the return time to port. The petitioners were also prohibited from joining other outfits without management’s permission and were required to follow company policies.
The Court rejected the “joint venture” theory, noting that a partnership requires a clear intent to form one, which was absent. The arrangement for profit-sharing based on a percentage of the catch is a common method of remunerating fishermen and does not negate employment. The Court cited precedents, including Abong vs. Workmen’s Compensation Commission, which held that fishermen working on boats where the owner provides the vessel, gear, and fuel, and exercises control, are employees. The dismissal was illegal as it was based on an unsubstantiated charge and appeared motivated by union activity. The NLRC resolution was reversed. The private respondent was ordered to reinstate the petitioners with three years’ backwages and other monetary benefits.