McBurnie V GanzonOctober 17, 2013J.

Reyes

Facts:

On October 4, 2002, McBurnie, an Australian national, instituted acomplaint for illegal dismissal and other
monetary claims against therespondents. McBurnie claimed that on May 11, 1999, he signed a five-
yearemployment agreement with the company EGI as an Executive Vice-President

who shall oversee the management of the company’s hotels and

resorts within the Philippines. He performed work for the company untilsometime in November 1999,
when he figured in an accident thatcompelled him to go back to Australia while recuperating from his
injuries.While in Australia, he was informed by respondent Ganzon that his serviceswere no longer
needed because their intended project would no longerpush through.The respondents opposed the
complaint, contending that theiragreement with McBurnie was to jointly invest in and establish a
companyfor the management of hotels. They did not intend to create an employer-employee relationship,
and the execution of the employment contract thatwas being invoked by McBurnie was solely for the
purpose of allowingMcBurnie to obtain an alien work permit in the Philippines. At the timeMcBurnie left for
Australia for his medical treatment, he had not yetobtained a work permit.In a Decision dated September
30, 2004, the LA declared McBurnieas having been illegally dismissed from employment, and thus
entitled toreceive: (a) US$985,162.00 as salary and benefits for the unexpired term of

their employment contract, (b) ₱2,000,000.00 as moral and exemplarydamages, and (c) attorney’s fees
equivalent to 10%

of the total monetaryaward.On appeal, the NLRC dismissed the appeal and motion to reduce thebond of
approximately P60M. On one of the many appeals to CA, it grantedthe motion to reduce appeal bond and
directed NLRC to give due course totheir appeal. NLRC then reversed and set aside the ruling of LA
above. TheNLRC rule that: (1) McBurnie was never an employee of the respondentsand (2) he failed to
obtain work permit that would have allowed him towork for the respondents. The third division of SC
however reversed thedecision of CA granting the motion to reduce the bond and it directive forthe NLRC
to give course to the appeal. The earlier ruling of LA thus becamefinal. This is deemed a third MR.

(Note: The court held that even if it is procedurally defective since

it’s

already a third MR, it does not preclude thecourt from ruling for the sake of substantial justice.)

Issue: W/N McBurnie, an Australian national can be considered as anemployee of Ganzon? NO

The court basically adopted the ruling of NLRC.

Court held that before McBurnie can allege illegal dismissal, it wasnecessary for him to establish, first and
foremost, that he wasqualified and duly authorize to obtain employment w/in our jurisdiction. This
requirement for foreigners who intend to workw/in the country to obtain employment permit is laid down in
Art.40 Title II of the Labor Code. Failure to do so poses serious problemin obtaining relief from the Court.
Hence, by the very fact thatMcBurnie failed to obtain employment permit necessitates thedismissal of his
labor complaint.
The court also noted that McBurnie failed to establish employer

employee relationship. The records disclose that employment ofMcBurnie is conditional on the successful
completion of the projectfinancing for the hotel project in Baguio City and his acquisition ofAlien
Employment Permit.

It must be noted that the project didn’t push through.

McBurnie likewise failed to prove employer-employee relationshipin accordance w/ the four-fold test: (1)
selection & engagement (2)payment of wages (3) power of dismissal and (4) control.

McBurnie also failed to show any document such as payslips orvouchers of his salaries during the time
that he allegedly worked forthe respondent