GR L 9417; (December, 1958) (Digest)
G.R. No. L-9417, December 22, 1958
ISABELO DOCE, petitioner, vs. WORKMEN’S COMPENSATION COMMISSION and DADO JADAO, respondents.
FACTS
Dado Jadao filed a claim for compensation with the Workmen’s Compensation Commission against Isabelo Doce for injuries sustained in an accident on June 11, 1953, in Manila, while working as a conductor of a bus owned by Doce. The bus was operated under a “boundary system.” Doce contested the claim, denying the existence of an employer-employee relationship and challenging the Commission’s jurisdiction. A referee ruled that a conductor working under the boundary system is an employee under the law, ordering Doce to pay Jadao compensation of P757.43, plus medical expenses, and to pay the Commission P8.00 in fees. The Commission affirmed this decision on July 2, 1955. The facts, as found by the Commission, establish that Jadao was the conductor of Bus No. 9 owned by Doce, earning an average of P4.00 daily for a five-day workweek. Under the boundary system, the driver and conductor gave Doce a fixed daily amount of P15.00 from the bus’s earnings. The owner supplied the initial gasoline, but its cost was later reimbursed from the day’s earnings. After deducting the gasoline cost and the P15.00 rental, the remainder was divided between the conductor and the driver.
ISSUE
Whether an employer-employee relationship existed between the bus owner (Isabelo Doce) and the conductor (Dado Jadao) who worked under a boundary system, where the conductor was not paid a direct wage by the owner.
RULING
Yes, an employer-employee relationship existed. The Supreme Court affirmed the Commission’s decision, ruling that the case falls squarely within the precedent set in National Labor Union vs. Dinglasan. In that case, it was held that a driver operating a vehicle under a boundary system is considered an employee within the meaning of the law. The Court rejected the argument that the relationship was merely one of lessor and lessee. The key factors were that the workers (the conductor and driver) had no investment in the business and did not participate in its management; their only contribution was their labor. The arrangement where they paid a fixed daily amount to the owner from their earnings and kept the excess as compensation did not negate the employment relationship. Therefore, Doce, as the bus owner, was liable to pay workmen’s compensation to Jadao. The decision was affirmed with costs against the petitioner.