G.R. No. 225075 - ARNULFO M. FERNANDEZ, PETITIONER, v. KALOOKAN SLAUGHTERHOUSE INCORPORATED*/ERNESTO CUNANAN, RESPONDENTS.

Before the Court is a Petition for Review on Certiorari¹ (Petition) under Rule 45 of the Rules of Court assailing the Decision²  dated March 29, 2016 and Resolution³ dated May 30, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 141852. The CA denied the petition for certiorari  assailing the Decision⁴  dated April 30, 2015 and Resolution⁵  dated June 22, 2015 of the National  Labor  Relations  Commission  (NLRC)  in  NLRC LAC  No. 03-000666-15, which reversed the Labor Arbiter's (LA) Decision⁶ dated January 27,  2015  finding  that  petitioner  Arnulfo  M.  Fernandez  (petitioner)  was illegally dismissed.

Facts
According to petitioner, he was hired in 1994 as a butcher by Kalookan Slaughterhouse, Inc. (Kalookan Slaughterhouse), a single proprietorship owned by respondent Emesto Cunanan (Cunanan).⁷  He claimed that he worked from Monday to Sunday, from 6:30P.M. to 7:30A.M., with a daily wage of P700.00, which was later reduced to P500.00.⁸ He further claimed that he met an accident while driving Kalookan Slaughterhouse's  truck in December 2013 and that deductions were made from his wages.⁹ He questioned these deductions in July 2014, and thereafter he was treated unreasonably.¹⁰  Petitioner further claimed that on July 21, 2014, he suffered from a headache and did not report for work.¹¹

The next day, however, he was shocked when he only received P200.00 due to his previous undertime and was informed that he could no longer report for work due to his old age.¹²

Kalookan Slaughterhouse,  on the other hand, asserted that petitioner is an independent butcher working under its Operation Supervisor, Cirilo Tablit (Tablit).¹³  He received payment based on the number of hogs he butchered and was only required to be in the slaughterhouse  when customers  brought hogs to be slaughtered.¹⁴ Kalookan Slaughterhouse alleged  that it imposed policies on the entry to the premises, which applied to employees, dealers, independent butchers, hog and meat dealers and trainees.¹⁵ According to Kalookan Slaughterhouse,  petitioner  violated  the  policies and he misconstrued the disallowance  to  enter  the  slaughterhouse   as  an  act  of dismissal.¹⁶

LA Decision

On August 5, 2014, petitioner filed the complaint  for illegal dismissal before the LA. After the exchange of pleadings, the LA ruled that petitioner was illegally dismissed. The dispositive portion of the LA Decision states:

WHEREFORE,  premises considered, judgment is hereby rendered declaring the complainant to have been illegally dismissed by the respondents as a regular employee. Conformably, respondent Kalookan Slaughter House and its owner, respondent Ernesto N. Cunanan, are hereby ordered, jointly and severally, to pay the complainant backwages computed from [the] time of dismissal until finality of this Decision and separation pay, which equivalent (sic)  to one (1)  month salary per year of service, counted from time of engagement until finality of this Decision.

As of this date, complainant's backwages and separation pay are tentatively computed at P84,500.00 and P260,000.00, respectively.

Respondents Kalookan Slaughter House and Ernesto N. Cunanan are further ordered, jointly and severally, to pay the complainant the following:

Service Incentive Leave Pay	-	p	7,500.00
13th Month Pay	-		39,000.00
Night Shift Differential	-		1,462.50
Attorney's Fees	-		39,246.25

All other claims are denied.

SO ORDERED.¹⁷

The LA found that the requisites of an employer-employee relationship were established as follows: petitioner was hired by Kalookan Slaughterhouse through Tablit and petitioner was paid his daily wage for his butchering services.¹⁸  Further, Kalookan Slaughterhouse had authority to discipline petitioner as regards his work activities through Kalookan Slaughterhouse's personnel named Noelberto De Guzman (De   Guzman).¹⁹   Kalookan Slaughterhouse also exercised control over the conduct of petitioner in the performance of his work and implemented policies regulating his rendition of services. In fact, De Guzman admitted to the strict policies imposed by Kalookan Slaughterhouse such as the requirement of I.D.s, uniforms, and even where butchering knives are inserted. According to De Guzman, petitioner violated all of these.²⁰ The policies implemented showed that petitioner could not render butchering services following his own ways and means. The LA also found that petitioner presented his I.D. issued by Kalookan  Slaughterhouse,  which  proved  that  he  was  an  employee  of Kalookan Slaughterhouse.²¹

The LA also ruled that Kalookan Slaughterhouse failed to prove its claim that petitioner was not its employee. The LA ruled that Kalookan Slaughterhouse failed to prove that Tablit, who was its employee, was an independent or job contractor. As its Operations Supervisor, Tablit was deemed to have acted in the interest of Kalookan Slaughterhouse. And since Tablit engaged petitioner, petitioner is deemed an employee of Kalookan Slaughterhouse.²²

The LA thus found that petitioner was illegally dismissed when he was told on July 22, 2014 that he could no longer work due to his old age. For the LA, this was not a just or valid cause to terminate  petitioner's employment and  it was  an  arbitrary  and  whimsical  act of Kalookan  Slaughterhouse.²³ Given the foregoing, petitioner was entitled to backwages and separation pay. Petitioner was also entitled to service incentive leave pay, 13^th month pay, and night shift differential pay as Kalookan Slaughterhouse failed to prove that petitioner was paid the foregoing.²⁴

NLRC Decision

Aggrieved, Kalookan Slaughterhouse appealed to the NLRC, which reversed the LA. The dispositive portion of the NLRC Decision states:

WHEREFORE, premised on all the foregoing considerations, the Decision appealed from is hereby REVERSED and SET ASIDE and a new one is entered DISMISSING  the above-entitled case for lack of employer-­employee relationship.

SO ORDERED.²⁵

The NLRC  ruled that although  there was a semblance of employer-employee  relationship as the work of a butcher  is necessary and desirable in the usual trade and business of a slaughterhouse, the facts and circumstances in this case  showed  that there  was no employer-employee relationship.²⁶ The NLRC ruled that it was normal and usual practice in slaughterhouses to engage  the services  of butchers on a contractual or per piece basis.²⁷ Petitioner was an independent  contractor  and not an employee of Kalookan  Slaughterhouse because there was no regular  payroll showing his name and the legal deductions made from his salary.  There  were also no pay slips, and the money he received from Tablit showed that he was an independent  butcher  and not an employee  of Kalookan  Slaughterhouse.^28]  The NLRC found that the Sinumpaang Salaysay of Tablit  tends  to show that there  was no employer-employee relationship between  petitioner  and Kalookan  Slaughterhouse.²⁹  The NLRC also ruled that petitioner  failed to prove any dismissal  as he was only barred  from entering  the premises  for his failure  to follow  the slaughterhouse's policies,³⁰  but nonetheless ruled that there was just cause to dismiss  petitioner  as he was found sleeping  on duty.³¹

CA Decision

Petitioner questioned the NLRC Decision to the CA through a petition for certiorari. The CA, however, denied the petition. The dispositive portion of the CA  Decision states:

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.³²

The CA ruled that petitioner's claim of the existence of an employer­ employee relationship is not supported by substantial evidence as he failed to submit salary vouchers, pay slips, daily work schedule and even a certificate of withholding tax on compensation income.³³ The CA found that the gate passes and log sheets that petitioner submitted were not sufficient as the gate passes specifically state that they do not qualify the holder as an employee of Kalookan Slaughterhouse and the log sheets were only for services from September 24 and 28, 2012.³⁴

The CA also ruled that petitioner failed to disprove the Sinumpaang Salaysay of Tablit that petitioner was one of the butchers that Tablit personally hired and paid when there were too many hogs to be butchered at the slaughterhouse.³⁵

Petitioner moved for reconsideration but the CA denied this. Hence, this Petition.


The issues raised in the Petition are as follows:

I

WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN EMPLOYER­ EMPLOYEE RELATIONSHIP  BETWEEN  THE  PETITIONER  AND THE RESPONDENTS.

II

WHETHER THE [CA] COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE NLRC DECISION AND RESOLUTION WHICH FAILED TO RECOGNIZE THAT THERE WAS AN ILLEGAL DISMISSAL IN THE INSTANT CASE.³⁶

The Petition is granted.

The conflicting factual findings of the LA vis-a-vis the NLRC and the CA warrant a review of the factual t1ndings of the labor tribunals and the CA. As the Court ruled in Cariño v. Maine Marine Phils., Inc.:³⁷

As a rule, "[i]n appeals by certiorari under Rule 45 of the Rules of Court, the task of the Court is generally to review only errors of law since it is not a trier of facts, a rule which definitely applies to labor cases." As the Court  ruled in Scanmar Maritime Services, Inc. v. Conag: "But  while the  NLRC   and  the  LA  are  imbued   with  expertise   and  authority   to resolve factual issues, the Court has in exceptional  cases delved into them where there is insufficient evidence to support their findings, or too much is deduced from the bare facts submitted by the parties, or the LA and the NLRC came up with conflicting findings x x x."³⁸

Petitioner was an employee of
Kalookan Slaughterhouse.

Petitioner submitted the following:

(a)	log sheets for three days in September 2012 where it was shown that he reported for work;39
(b)	three gate passes and one identification card all of which state that he was abutcher;40 and
(c)	a trip ticket showing that on December 30, 2007, petitioner was part of a group who went to Bataan. The trip ticket had a notation that petitioner was a captain of the trip and the truck with Plate Number CJH 377 was driven by a certain Peter.41

On the other hand, Kalookan Slaughterhouse presented the following pieces of evidence:

(a)	Sinumpaang Salaysay42 of Tablit alleging that he has been an employee of Kalookan Slaughterhouse for more or less 20 years, he was given authority by Cunanan to hire people as hog butchers when the need arose but he himself would be responsible for paying them, and that one of those hog butchers was petitioner, he did not exercise control over the means and methods of the butchers and he only monitored if they finished their work, and that Kalookan Slaughterhouse strictly implemented the "No ID, No Entry" Policy, "No Uniform, No Entry" Policy, "No Gate Pass, No Entry" Policy, and that those under the influence of alcohol were prohibited from entering the premises;
(b)	Photographs of petitioner sleeping in the premises of Kalookan Slaughterhouse;43
(c)	Photographs of policies implemented by Kalookan Slaughterhouse as listed by Tablit;44 and,
(d)	Sinumpaang Salaysay45 of De Guzman where he alleged that he is a caretaker of Kalookan Slaughterhouse and he knew of petitioner as one of the butchers hired by Tablit; he would often reprimand petitioner for failing to follow Kalookan Slaughterhouse's policies such as when petitioner failed to wear his ID, wear his uniform, and properly store his knives used for butchering. Petitioner would also sometimes come to work with dirty clothes, and there was one time he caught petitioner sleeping. He also alleged that petitioner is Tablit's employee, and that he would only see petitioner when there were many hogs to, be butchered, thus petitioner would not report for work every day.

It is  settled that "[t]o determine the  existence of an  employer­-employee relationship,   four  elements generally need to  be  considered, namely: (1) the selection and engagement of the employee; (2) the payment of  wages;  (3)  the  power of dismissal;   and  (4)  the  power  to  control the employee's conduct. These elements or indicators comprise the so-called 'four-fold' test of employment relationship."⁴⁶

From the foregoing, it is undisputed that petitioner rendered butchering services  at  Kalookan  Slaughterhouse.  The  LA  found  that  petitioner  was engaged  by Kalookan  Slaughterhouse  itself since  petitioner  submitted  log sheets and gate passes. The NLRC and the CA, however, ruled that petitioner was only engaged by Tablit,  Kalookan Slaughterhouse's Operation Supervisor,  and he was Tablit's   own  employee.  This was supported by Tablit's Sinumpaang Salaysay.

The Court finds that the NLRC and the CA committed a grave error and agrees with the LA.

Similar to the facts of this case, the Court in Masonic Contractor, Inc. v.  Madjos⁴⁷  (Masonic   Contractor)  ruled  that  the  fact  that  the  company provided identification cards and uniforms and the vague affidavit of the purported  employer were  sufficient  evidence  to  prove  the  existence  of employer-employee relationship. Thus:

Petitioners' defense that they merely contracted the services of respondents through Malibiran fails to persuade us. The facts of this case show that respondents have been under the employ of MCI as early as 1991. They were hired not to perform a specific job or undertaking. Instead, they were employed as all-around laborers doing varied and intermittent jobs, such  as  those  of  drivers,  sweepers,  gardeners,  and  even  undertakers or tagalibing,  until they were arbitrarily terminated by MCI in 2004. Their wages were paid directly by MCI, as evidenced by the latter's payroll summary, belying its self-serving and unsupported contention that it paid directly to Malibiran for respondents' services. Respondents had identification cards or gate passes issued not by Malibiran, but by MCI, and were required to wear uniforms bearing MCI's emblem or logo when they reported for work.

It is common practice for companies to provide identification cards to individuals not only as a security measure, but more importantly to identify the bearers thereof as bona fide employees of the firm or institution that issued them. The provision of company-issued identification cards and uniforms to respondents, aside from their inclusion in MCI's summary payroll, indubitably constitutes substantial evidence sufficient to support only one conclusion: that respondents were indeed employees of MCI.

Moreover, as correctly observed by the CA, petitioners failed to show that it was Malibiran who exercised control over the means and methods of the work assigned to respondents. Interestingly, Malibiran's affidavit is silent on the aspect of control over respondents'  means and methods of work. Rather than categorically stating that she was the one who directly employed respondents to render work for MCI, Malibiran merely implies that, like respondents, she was just a co-worker. Malibiran's statement that the work for MCI was merely in the nature of accommodation to help respondents earn a living, in effect, impliedly admits the fact that she did not have the capacity to engage in the independent job-contracting business, and that, therefore, she was not respondents' employer.⁴⁸

Here,  the  totality  of  petitioner's   evidence  and  the  admissions  of Kalookan Slaughterhouse  convinces the Court that petitioner was indeed an employee of Kalookan Slaughterhouse. Petitioner was able to present an LD., gate  passes,  log  sheets,  and  a  trip  ticket.  Kalookan  Slaughterhouse  even admitted through De Guzman that uniforms were given to all personnel, including petitioner.

The CA, however, disregarded  the gate passes, as it claimed that the gate pass had a note that such did not qualify the holder as an employee.⁴⁹

This is an error as this only applied to one of the gate passes and the other gate passes did not have this notation.

Further, petitioner was able to submit an I.D. in addition to the gate passes. The trip ticket and the log sheets also showed that Kalookan Slaughterhouse  engaged  petitioner.  These  are  sufficient  to  prove  that petitioner was engaged by Kalookan Slaughterhouse.⁵⁰

Kalookan Slaughterhouse, however, attempts to show that even if petitioner worked in the slaughterhouse, he was Tablit's employee. Tablit claims to be an employee of the slaughterhouse for more or less 20 years and that   he   has   engaged   petitioner   as   one   of   his   butchers.   Kalookan Slaughterhouse further alleged that petitioner's salaries were paid by Tablit. Kalookan Slaughterhouse, however, failed to prove this. In fact, Tablit was not shown to possess substantial capital and investment to have an independent business, be petitioner's  employer and pay his salaries. Other than Tablit's Sinumpaang Salaysay, no document was presented to show that he paid petitioner's salaries.

Further, by denying that petitioner was its employee but alleging that he rendered services as Tablit's employee, Kalookan Slaughterhouse effectively admitted the substantial fact that petitioner has been rendering butchering services for 20 years from the filing of the complaint on August 5, 2014. As the Court held in Pamplona Plantation Company v. Acosta:⁵¹

x x x Petitioner is estopped from denying that respondents worked for it. In the first place, it never raised this defense in the proceedings before the Labor Arbiter. Notably, the defense it raised pertained to the nature of respondents'   employment, i.e.,  whether  they  are  seasonal  employees, contractors,  or  worked  under the pakyaw system.  Thus,  in  its  Position Paper, petitioner alleged that some of the respondents are coconut filers and copra hookers or sakadors; some are seasonal employees who worked as scoopers or lugiteros;  some are contractors; and some worked under the pakyaw system. In support of these allegations, petitioner even presented the company's payroll, which will allegedly prove its allegations.

By setting forth these defenses, petitioner, in effect, admitted that respondents worked for it, albeit in different capacities. Such allegations are negative  pregnants  - denials   pregnant  with  the  admission   of  the substantial facts  in the pleading  responded  to which are not squarely denied, and  amounts to an  acknowledgement that  respondents were indeed employed by petitioner.⁵²

Even worse for Kalookan Slaughterhouse, while Tablit claimed to be petitioner's employer, he also admitted that he did not exercise any control over the means and methods of petitioner in rendering butchering services. If he was indeed petitioner's employer, he should have control over petitioner's means and methods for doing his job.

It,  however,  appears  on  record  that  De  Guzman,  who  is  also  an employee  of Kalookan  Slaughterhouse,  was the one who exercised control over  petitioner's means  and methods  as he reprimanded  petitioner  for his failure to properly store his butchering knives, coming to Kalookan Slaughterhouse  with dirty clothes, reporting for work drunk, and not having an I.D. before going to the slaughterhouse.

All the foregoing show that Kalookan Slaughterhouse,  through Tablit, was the one who engaged petitioner, paid for his salaries, and in effect had the power to dismiss  him. Further, Kalookan  Slaughterhouse  exercised  control over petitioner's conduct through De Guzman. To the mind of the Court, Kalookan Slaughterhouse was petitioner's employer and it exercised its rights as an employer through Tablit and De Guzman, who were its employees.

Petitioner was illegally dismissed and
entitled to his money claims.

Petitioner claims that on July 22, 2014 he was callously informed that he could no longer report for work because of his old age.⁵³ Kalookan Slaughterhouse,  however,  claims that petitioner  was not dismissed  but was only barred from entering as he failed to comply with the "No I.D., No Entry" Policy and the "No Uniform, No Entry" Policy.⁵⁴

The LA ruled that petitioner's allegation of dismissal was unrebutted as De Guzman only attested to several instances where petitioner was reprimanded for his failure to comply with the slaughterhouse's policy.⁵⁵ For the LA, De Guzman did not state that on July 22, 2014 he had barred petitioner from entering for his failure to comply with the policies.⁵⁶

The NLRC believed Kalookan Slaughterhouse  that petitioner was not allowed to enter since he failed to comply with the slaughterhouse's policy.⁵⁷  The CA did not discuss the issue of dismissal as it ruled that petitioner was not an employee of Kalookan Slaughterhouse.⁵⁸ The Court finds that the LA was correct in ruling that petitioner was illegally dismissed.

Indeed,  Kalookan  Slaughterhouse  failed to specifically  deny that on July 22, 2014, petitioner was informed that he could no longer report for work. De Guzman only alleged that he merely barred petitioner from entering the slaughterhouse in several instances because of his failure to wear his I.D. and uniform  but  he  failed  to  state  that  this  was  done  on  July  22,  2014.  De Guzman's silence on this matter is deemed as an admission by Kalookan Slaughterhouse that petitioner was indeed dismissed on July 22, 2014. As the Court held in Masonic Contractors:

x x x By their silence, petitioners are deemed to have admitted the same. Section 11 of Rule 8 of the Rules of Court, which supplements the NLRC Rules, provides that an allegation not specifically denied is deemed admitted. x x x⁵⁹

Having  been illegally· dismissed, the LA was correct m awarding backwages and separation pay.

The LA's  award of service incentive leave pay, night shift differential pay, and 13^th month pay is also proper as Kalookan Slaughterhouse  failed to prove that  it had paid petitioner  such benefits under the law.⁶⁰  Such award should be limited to three years prior to the filing of the complaint in August 5, 2014 in accordance with Article 306 of the Labor Code.⁶¹

Finally, Kalookan Slaughterhouse  is likewise liable for legal interest at the rate of six percent (6o/o) per annum from the finality of this Decision until full satisfaction.

The Court, however, notes that petitioner's counsel manifested that it was informed of petitioner's death but that his heirs failed to provide a death certificate. Petitioner's counsel also sought to request a death certificate from the Philippine  Statistics  Authority, which in turn, issued a certificate that it had no record of death of any person under the name of petitioner.⁶²

Generally,   the  computation   of  backwages   and  separation   pay  is computed until the finality of the decision that awarded them. However, given the foregoing, the LA and petitioner's counsel are directed to confirm petitioner's death, and if confirmed, the LA is directed to compute petitioner's backwages and separation pay only until his death.⁶³

WHEREFORE, premises considered, the Petition is GRANTED. The Decision dated March 29,2016 and Resolution dated May 30, 2016 of the Court of Appeals in CA-G.R. SP No. 141852 are REVERSED and SET ASIDE. The January 27, 2015 Decision of the Labor Arbiter in NLRC NCR Case No. 08-09779-14 is  REINSTATED,  and the Labor Arbiter  is  DIRECTED to recompute the backwages and separation pay following the above guidelines.

Kalookan Slaughterhouse Incorporated is likewise liable for legal interest of six percent (6%) per annum on the award of backwages and separation pay computed from the finality of this Decision until full satisfaction.

SO ORDERED.

Carpio, (Chairperson), Perlas-Bernabe,  J. Reyes, Jr. and Lazaro-Javier, JJ., concur.

Endnotes:

---

^* Also appears as "Kalookan Slaughterhouse"and "Kalookan Slaughter House, Inc." in some parts of the records.

¹Rollo, pp. 1 1-30.

² Id. at  194-208.  Penned  by Associate  Justice  Fernanda  Lampas  Peralta,  with  Associate  Justices  Jane Aurora C. Lantion and Nina G. Antonia-Valenzuela concurring.

³ Id. at 221.

⁴ Id. at 121-131. Penned by Commissioner Pablo C. Espiritu, Jr., with Presiding Commissioner  Alex A. Lopez concurring.

⁵ Id. at 162-163.

⁶ Id. at 97-105. Penned by Labor Arbiter Jose Antonio C. Ferrer.

⁷Id. at 76, and 195.

⁸ Id. at 195-196.

⁹ Id. at 195, 196.

¹⁰ Id. at 196.

¹¹ Id.

¹² Id. at 55 and 196.

¹³ Id. at 196.

¹⁴ Id.

¹⁵ Id.

¹⁶ Id.

¹⁷ Id. at 104-105.

¹⁸ Id. at 101.

¹⁹ Id.

²⁰ Id.

²¹ Id. at 102.

²² Id. at 100-101.

²³ Id.at 103.

²⁴ Id. at 103-104.

²⁵ Id. at 130.

²⁶ Id. at 127.

²⁷ Id.

²⁸ Id. at 128.

²⁹ Id. at 129.

³⁰ Id. at 129-130.

³¹ Id. at 129.

³² Id. at 208.

³³ Id. at 203.

³⁴ Id.

³⁵ Id. at 204.

³⁶ Id. at 18.

³⁷ G.R. No. 231111, October  17, 2018.

³⁸ Id. at 5; citations omitted.

³⁹Rollo, pp. 64-66.

⁴⁰ Id. at 89.

⁴¹ Id. at 90.

⁴² Id. at 79.

⁴³ Id. at 80.

⁴⁴ Id.at 81-82.

⁴⁵ Id. at 83-84.

⁴⁶David v. Macasio,  738 Phil. 293, 307 (2014).

⁴⁷ 620 Phil. 737 (2009).

⁴⁸ Id. at 742-743; citations omitted.

⁴⁹Rollo, p. 203.

⁵⁰ See Domasig v. National  Labor Relations Commission, 330 Phil. 518, 524 (1996).

⁵¹ 539 Phil. 305 (2006).

⁵² Id. at 311; emphasis and underscoring  supplied.

⁵³Rollo, p. 55.

⁵⁴ Id. at 71.

⁵⁵ See id. at I 03.

⁵⁶ See id.

⁵⁷ Id. at 130.

⁵⁸ Id. at 203-207.

⁵⁹Masonic Contractor, Inc. v. Madjos, supra note 47, at 744; citations omitted.

⁶⁰Rollo, p. 104.

⁶¹ ART.  306.  [291] Money  Claims.    All money  claims arising  from  employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

⁶²Rollo, p. 257.

⁶³See Divine Word College of Laoag v. Mina, 784 Phil. 546, 559 (2016).