Makati Haberdashery

vs.
NLRC, et. al
G.R. Nos. 83380-81 November 15, 1989
By Richard Troy A. Colmenares
USA College of Law
Start: 6/25/14 10:14:04 PM
Finish: 6/25/14 6/25/14 11:25:58 PM
Nature of the Case
A petition for certiorari seeking to reverse two separate cases jointly heard by the labor arbiter finding ordering petitioner to reinstate
dismissed workers and pay their monetary claims.

Facts
Private respondents worked on a tailoring shop and were paid on a piece-rate basis, except two others who paid on a monthly basis. They
were given a daily allowance provided they reported to work between 9:30 AM-6:00PM/7:00 PM, Mondays to Fridays, and including
Sundays and holidays on peak periods. A labor organization to which the private respondents belonged filed a complaint before the NLRC
for (a) underpayment of the basic wage; (b) underpayment of living allowance; (c) non-payment of overtime work; (d) non-payment of holiday
pay; (e) non-payment of service incentive pay; (f) 13th month pay; and (g) benefits provided for under Wage Orders at the time. Meanwhile,
a package containing a barong was left. When asked to explain, one of the private respondents (Pelobello) said it was an order from a
customer of another private respondent (Zapata). Allegedly, Zapata admitted to have copied the design of competitor petitioner
Haberdashery. In the afternoon of the same day, both Zapata and Pelobello denied ownership of the package. A memorandum was issued
asking both to explain by 4 February 1985 why no action should be taken against them for accepting a job order which is prejudicial and in
direct competition with the business of the company. Allegedly, both did not respond and report for work. Thus, they were dismissed on 4
February. They countered by filing a separate complaint of illegal dismissal before the labor arbiter. The labor arbiter jointly heard the
complaints, ordering: (1) the reinstatement of private respondents; (2) denying the charge of unfair labor practice for lack of merit; (3)
dismissing the claims of underpayment for lack of merit; and (4) finding petitioner in violation of the decrees on the cost of living allowance
(COLA), service incentive leave pay and the 13th Month Pay ordering computation of the private respondents monetary claims. Petitioners
appeal before the NLRCs was denied, but limiting the backwages of Zapata and Pelobello to one year. Petitioners motion for
reconsideration was also denied. Thus, this petition.

Issue(s)
(1). Is there employer-employee (E2e)relationship between the parties?
(2). Are private respondents entitled to monetary claims despite the finding they are not entitled to minimum wage?
(3). Were Pelobello and Zapata illegally dismissed?

Held
(1). Yes.

Key to determining E2e is the four-fold test: (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. It is the so called "control test" that is the most important
element. This simply means the determination of whether the employer controls or has reserved the right to control the employee
not only as to the result of the work but also as to the means and method by which the same is to be accomplished.

Control is evident in the case of the private respondents. Supervision is indeed manifest in this line of business the manner and
quality of cutting, sewing and ironing. Furthermore, the presence of control is evident in the Assistant Managers memorandum, the
contents of which indubitably reserves the right to control its employees not only as to the result but also the means and methods
by which the same are to be accomplished. The facts also disclose that they are regular employees for they report on a fixed
schedule and paid additional allowance. The private respondents being regular employees belies the fact that they are independent
contractors for they rely on the companys resources to effectuate their individual tasks.

(2). In general, yes, but considering the facts of the case, the private respondents are only entitled to COLA and 13
th
month pay.

Since the private respondents are regular employees, they are, by operation of law, entitled to a minimum wage. The same has not
been established in this consolidated case. However, since the private respondents did not make an appeal to the labor arbiters
decision nor did they raise the same in the Supreme Court, accordingly, this issue has been laid to rest.

As to COLA and 13
th
month pay, the private respondents are entitled to claim the same by operation of law. But they cannot claim
service incentive leave pay and holiday pay for they are piece-rate workers which falls an exception to the rule in availing the
same.

(3). No.

The public respondents mis-appreciated the facts. The copied barong tagalog was in the possession of Pelobello who pointed that
Zapata was owner. The fact the both employees went on AWOL (absence without official leave) and ignored petitioners
memorandum seeking them to explain their side was an open defiance to the lawful orders of the petitioner which is a justifiable
ground for termination and is a clear indication of guilt in committing acts inimical to the interest of the employer which is a valid
ground for dismissal. In fact, the labor arbiter himself did not believe the version of the private respondents as regards the issue on
the barong. Finally, there is no evidence showing that petitioner violated due process. On the contrary, it was the private
respondents who exhibited lack of regard and interest for petitioners rules. Thus, the petitioner had valid grounds to dismiss private
respondent, annulling the decision that private respondents Zapata and Perobello were illegally dismissed.
where
^
'
the
^
in