Almirante: Employer-employee relationship

RESPONDENTS Tirso Enopia and 31 others were hired from Jan. 20, 1994 to March 20, 1996 as crew members of the fishing mother boat F/B MG-28 owned by petitioner Joaquin “Jake” Lu, who is the sole proprietor of Mommy Gina Tuna Resources (MGTR) based in General Santos City.

Respondents and Lu had an income-sharing arrangement wherein 55 percent goes to Lu, 45 percent to the crew members, and an additional four percent as “backing incentive.”

They also equally share the expenses for the maintenance and repair of the mother boat, and for the purcahse of nets, ropes and payaos.

In a case for illegal dismissal, monetary claims and damages filed by respondents, Lu claimed that their relationship was one of a joint venture where respondents are industrial partners.

There was no employer-employee relationship between them. It was the piado who hired them. They were not paid wages but shares in the catch. They were not subject to his discipline and he had no control over the day-to-day fishing operations, although they stayed in contact through petitioner’s radio operator or checker.

Does this defense find merit?

Ruling: No.

In determining the existence of an employer-employee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) the power to control the worker’s conduct; (3) the payment of wages by whatever means; and (4) the power of dismissal. We find all these elements present in this case.

x x x

In this case, petitioner contends that it was the piado who hired respondents. However, it was shown by the latter’s evidence that the employer stated in their Social Security System (SSS) online inquiry system printouts was MGTR, which is owned by petitioner.

We have gone over these printouts and found that the date of the SSS remitted contributions coincided with the date of respondents’ employment with petitioner. Petitioner failed to rebut such evidence. Thus, the fact that petitioner had registered the respondents with SSS is proof that they were indeed his employees.

The coverage of the Social Security Law is predicated on the existence of an employer-employee relationship.

Moreover, the records show that the four percent backing incentive fee, which was divided among the fishermen engaged in the fishing operations approved by petitioner, was paid to respondents after deducting the latter’s respective vale or cash advance.

Notably, even the piado’s name was written in the backing incentive fee sheet with the corresponding vale, which was deducted from his incentive fee.

If indeed a joint venture was agreed upon between petitioner and respondents, why would these fishermen obtain vale or cash advance from petitioner and not from the piado, who allegedly hired and had control over them?

It was established that petitioner exercised control over respondents. It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employer actually supervises the performance of duties by the employee. It is enough that he former has a right to wield the power.

Petitioner admitted in his pleadings that he had contact with respondents at sea via the former’s radio operator and their checker. He claimed that the use of the radio was only for the purpose of receiving requisitions for the needs of the fishermen in the high seas and to receive reports of fish catch so that they can then send service boats to haul the same.

However, such communication would establish that he was constantly monitoring or checking the progress of respondents’ fishing operations throughout the duration thereof, which showed their control and supervision over respondents’ activities.

x x x

The payment of respondents’ wages based on the percentage share of the fish catch would not be sufficient to negate the employer-employee relationship existing between them.

x x x

Petitioner wielded the power of dismissal over respondents when he dismissed them after they refused to sign the joint fishing venture agreement. (Peralta, J., SC 2nd Division, Joaquin Lu vs. Tirso Enopia,, G.R. No. 197899, March 6, 2017).
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