G.R. No. 78711 . June 27, 1990.
ABOITIZ SHIPPING EMPLOYEES ASSOCIATION, LAZARO ABAIGAR, VICTORIANO ANIBAN, FELIPE BATERZAL, RUFINO YAGUIT, JONNIE YAGUIT and EUGENIO BALBUENA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ABOITIZ SHIPPING CORPORATION, respondents.

FACTS

Petitioners, carpenters, claimed they were illegally dismissed by Aboitiz Shipping Corporation (ABOITIZ) on April 26, 1985, a day after a labor inspection related to a case they filed. They alleged this constituted unfair labor practice and illegal dismissal, seeking reinstatement with backwages. ABOITIZ denied an employer-employee relationship existed at the time of dismissal, asserting petitioners were employees of Narben’s Service Contractor, owned by spouses Ben and Leonarda Baguio, pursuant to a June 16, 1984 Service Contract. This contract explicitly stated no employer-employee relationship existed between ABOITIZ and Narben’s carpenters, granting Narben’s the rights to hire, fire, pay wages, and control the work.
Petitioners presented evidence to prove a direct relationship with ABOITIZ, including Social Security System (SSS) numbers, deductions for SSS premiums and withholding tax, company-issued identification cards, and time cards. The Labor Arbiter and the National Labor Relations Commission (NLRC) dismissed the complaint, ruling no employer-employee relationship existed between petitioners and ABOITIZ at the time of the alleged dismissal, as they were under Narben’s employ.

ISSUE

Whether or not an employer-employee relationship existed between petitioners and respondent Aboitiz Shipping Corporation at the time of the alleged dismissal on April 26, 1985.

RULING

The Supreme Court dismissed the petition, upholding the NLRC’s finding that no employer-employee relationship existed. The Court applied the four-fold test from Mafinco Trading Corporation vs. Ople: (1) selection and engagement; (2) payment of wages; (3) power of dismissal; and (4) power of control. The Service Contract vested all these elements in Narben’s Service Contractor, not in ABOITIZ. Narben’s had the right to hire and fire the carpenters, paid their wages, and exercised administrative supervision and control over their work performance.
The evidence presented by petitioners did not overturn this conclusion. The SSS and tax deductions were administered by Narben’s. The identification cards issued by ABOITIZ were special IDs authorizing the bearers to transact business with the company, distinct from the IDs issued to regular employees which explicitly certified employment. The issue of the existence of an employer-employee relationship is a question of fact, and the findings of the Labor Arbiter and NLRC are conclusive absent grave abuse of discretion. The Court found no such abuse, as the NLRC’s decision was supported by the contract and the application of the established four-fold test.