Facts
Sometime in 2012, petitioner GDI Lighting Solutions (GDI Lighting), a company engaged in the business of selling and supplying lighting lamps and bulbs and LED Lighting Technology, hired respondent Jasmin Bacalangco Unating (Unating) as a Market Assistant. GDI Lighting promised her a salary of P1,000.00/day, additional food allowance, and transportation allowance. In time, Unating was promoted to Manager/Supervisor.
In November 2014, Unating asked petitioner Yehuda Ortal (Ortal), President and CEO of GDI Lighting, for financial assistance due to her impending maternity leave, as she could not avail of maternity leave benefits from the Social Security System (SSS) since GDI Lighting did not enroll her with SSS. Ortal ignored her request. Unating repeated her plea after knowing she would need to undergo Caesarian section procedure, but she was unheeded.
On the last week of December 2014, Ortal directed Unating to turn over company records in her possession. Unating complied and turned over the records in the presence of her two daughters and the new office secretary, Josalie Cabante. On January 2, 2015, Ortal advised Unating to go home since she was due to give birth.
On January 29, 205, aggrieved by the lack of support, Unating filed a Complaint against GDI Lighting and Ortal for illegal dismissal, nonpayment of salary/wages, overtime pay, holiday pay, holiday premium, rest day premium, service incentive leave pay, 13th month pay, separation pay, emergency cost of living allowance (ECOLA), night shift differential pay, and nonpayment of maternity benefits, with prayer for moral and exemplary damages, as well as attorney’s fees.
Unating alleged in her position paper, that during her time working with GDI Lighting, she was not paid any salary or other forms of compensation, aside from meal allowances, as well as other pay. GDI Lighting, on the other hand, asserted in its position paper, that there was no employer-employee relationship between them and Unating, the latter being an independent contractor as evidenced by a Manpower Service Agreement.
On November 25, 2015, the Labor Arbiter ruled in favor if GDI Lighting, finding that Unating failed to discharge the burden of proving the existence of an employer-employee relationship with GDI Lighting. The LA stated that Unating failed to show any contract or appointment paper that she was hired or on GDI Lighting’s payroll or that GDI Lighting registered or enrolled her with any government entity. Likewise, Unating failed to prove that she was bound to observe strict schedule of working hours, or that her continued tenure was dependent on whether or not she adhered or was compliant with the rules, regulations or policies of GDI Lighting.
Upon appeal, the NLRC partially granted an award in favor of Unating, insofar as the award for the payment of her salaries, 13th month pay, and service incentive leave, as it ruled that there existed an employer-employee relationship between Unating and GDI Lighting. The NLRC stated that aside from the Manpower Service Agreement, which was not witnessed and remained unnotarized, no other evidence was presented by GDI Lighting to support its claim that Unating was an independent contractor. However, the NLRC found that Unating was not illegally dismissed by GDI Lighting based on Unating’s mere allegations and bare statements on refusal to heed her request for assistance and maternity benefits. GDI Lighting moved for reconsideration but was denied, prompting it to file a Petition for Certiorari with the CA. The CA affirmed the NLRC Decision. GDI Lighting moved for reconsideration which was denied. Hence, this Petition.
ISSUE: Whether or not the CA erred in ruling that there existed an employeremployee relationship between the parties and that Unating was entitled to backwages, 13th month pay, service incentive leave pay, and attorney’s fees.
Ruling
NO. In the present case, the records reveal that the Manpower Service Agreement which GDI Lighting submitted as evidence was undated, unnotarized, and not witnessed to be credible as a real contract between the parties. Unating denied entering into such agreement and averred that her signature therein is different from her signature in the Complaint and Position Paper.
To prove that she was an employee of GDI Lighting, Unating presented (1) a company identification card issued by Ortal which indicated her status as “Supervisor” and an employee of the company, and (2) various electronic mails with buyers and suppliers to prove her communications, involvement and role that were directly related to the company’s main business and which were under the control and direct supervision of GDI Lighting.
Aside from the Manpower Service Agreement and Unating’s evidence, no other evidence was submitted by the parties to prove or disprove the existence of an employer-employee relationship.
It is a well-settled rule in jurisprudence that when the evidence of the employer and the employee are in equipoise, doubts are resolved in favor of labor. This is in line with the policy of the State to afford greater protection to labor.
Thus, weighing the Manpower Service Agreement submitted by GDI Lighting to prove that Unating was an independent contractor, and the identification card and electronic mails submitted by Unating to prove that she was an employee, we agree with the NLRC and the CA that it is reasonable to conclude that Unating is an employee of GDI Lighting.
All the elements of the four-fold test, used in determining the existence of employer-employee relationship and which involves an inquiry into: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee with respect to the means and method by which the work is to be accomplished, are all present in this case.
Further, since Unating denied that she was an independent contractor, the burden to prove that she is an independent contractor shifted to GDI Lighting. In Chavez v. National Labor Relations Commission, we defined that “an independent contractor is one who carries on a distinct and independent business and undertakes to perform the job, work, or service on its own account and under its own responsibility according to its own manner and method, free from the control and direction of the principal in all matters connected with the performance of the work except as to the results.”
However, aside from submitting the Manpower Service Agreement, GDI Lighting did not present any other proof to show that Unating was a legitimate contractor with substantial capital, investment and tools to operate. Such mere allegations by GDI Lighting will not suffice.
Also, where an employee is tasked to undertake activities usually desirable or necessary in the usual business of the employer, the contractor is considered as a “labor-only” contractor and such employee is considered as a regular employee of the employer.
Here, Unating’s work, as a Marketing Assistant then promoted as a Manager/Supervisor, dealing with buyers and suppliers for lights installation is directly related to GDI Lighting’s principal business of selling and supplying lighting needs to clients. Aside from this, Unating was also assigned to prepare and submit daily time records and payroll, supervise electricians and technicians, and deal with the engineers of different client companies. Clearly, Unating performed tasks which were desirable or necessary in GDI Lighting’s main business. Thus, we find Unating to be an employee of GDI Lighting entitled to backwages, 13th month pay, service incentive leave pay, and attorney’s fees.