Almirante: Employer-employee relationship

Labor Case Digest

Petitioners Pedrito R. Parayday and Jaime Reboso alleged that they were employed sometime in October 1996 and March 1997, respectively, as fitters/welders by Oceanview/VRC Lighterage Co., Inc. and VRC/Oceanview Shipbuilders Co., Inc. Their duties and responsibilities included, among others, assembling, welding, fitting, and installing materials or components using electrical welding equipment, and/or repairing and securing parts and assemblies.

Sometime in 2003, Oceanview changed its corporate name to “Shogun Ships Inc.”, herein respondent, which maintained the same line of business and retained in its employ petitioners. The management of Shogun Ships Inc., verbally dismissed them from service effective May 1, 2008 due to lack of work as fitters and welders. Thus, they filed a complaint for illegal dismissal, regularization and money claims.

Upon the other hand, respondent invoked the defense that no employer-employee relationship existed between it and petitioners. It pointed out that it is engaged in the business of domestic cargo shipping and was only incorporated sometime in November 2002, several years after petitioners were engaged by Oceanview in 1996/1997. At best, petitioners were helpers brought in by its regular employees on certain occasions when repairs were needed to be done on its barges. Its regular employees occasionally called in their friends and nearby neighbors, such as petitioners, who were seeking temporary work as helpers until such time the needed repairs on the barges were completed. They were not engaged on regular basis since it had regular employees for its technical, mechanical and electrical needs.

Is there merit to this defense?

Ruling: No.

Significantly, respondent have not denied that petitioners were duly compensated for any work done by them on the barges. Respondent even categorically admitted that Shogun Ships provided petitioners financial assistance when they were hospitalized from May 11, 2006 until June 6, 2006. Respondent also have not disproved the allegation of petitioners that Shogun Ships continued to pay petitioners’ salaries after they were discharged from hospitalization on June 7, 2006.

Respondent also have not categorically denied that petitioners were verbally dismissed on May 1, 2008, as in fact, respondent’s allegations, i.e., that petitioners’ ”work to repair was only done when there is work available for them. Once the repair was done, petitioners were paid for work done, and it ends there” corroborated petitioners’ claims that cessation of their services was determined by Shogun Ships.

All told, the fact that the aforesaid allegations of petitioners were not controverted by herein respondent lends credence to petitioners’ assertions that Shogun Ships: (1) engaged them as its employees; (2) paid their salaries for services rendered; and (3) had ultimate discretion to dismiss their services after the needed repairs on the barges were carried out. It is worth noting that Rule 8, Section 11, of the Rules of Court, which supplements the NLRC Rules of Procedure, provides that allegations which are not specifically denied are deemed admitted.

As regards Shogun Ship’s power of control over petitioner, respondent contended that Shogun Ships did not direct the manner and method in which petitioners do their work. It bears emphasis, however, that the control test calls merely for the existence of the right to control the manner of doing the work and not the actual exercise of the right. x x x.

Clearly, considering that petitioners were working on the barges alongside regular employees of Shogun Ships and that they were taking orders from its engineering as to the required specifications on how the barges of Shogun Ships should be repaired, which respondent herein failed to deny, it may be thus logically inferred that Shogun Ships, to some degree, exercised control or had the right to control the work of petitioners. (Pedrito R. Parayday and Jaime Reboso vs. Shogun Shipping Co., Inc., G.R. No. 204555, July 6, 2020).


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