6/1/2018 CONTROL IS THE MOST IMPORTANT ELEMENT THAT ESTABLISHES EMPLOYER-EMPLOYEE RELATIONSHIP - EBV Law Office

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EMPLOYER-EMPLOYEE
RELATIONSHIP
Published by  Atty Elvin B. Villanueva at  August 28, 2017

The Author
Control is the most crucial element of employer-employee relationship and if
Atty. Elvin B.
present in the case will establish such relationship.
Villanueva is a
Hence, the SC held that: litigation lawy
specializing in
Sumifru (Philippines) Corp. vs. Nagkahiusang Mamumuo sa Suyapa Farm laws. He grad
(Namasufa-Na u-Kmu) from Arellano
University Sch
G.R. No. 202091, June 7, 2017
Law with hono
Facts: was a recipien
the Supreme
Sumifru is a domestic corporation and is the surviving corporation after its merger award for his
with Fresh Banana Agricultural Corporation (FBAC). FBAC was engaged in the on the Role of
buying, marketing, and exportation of Cavendish bananas. Respondent Rule of Law in
Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF A-NAFLU-KMU) (NAMASUF A) National
is a labor organization a liated with the National Federation of Labor Unions and Development.
Kilusang Mayo Uno.
Learn More
Get a copy of the re-numbered Labor Code pursuant to RA 10151

The private respondent Nagkahiusang Mamumuo sa

Suyapa Farm (NAMASUF A-NAFLU-KMU), a legitimate labor Categories
organization, led a Petition for Certi cation Election
before the Department of Labor and Employment,
Atty. Elvin
Regional O ce No. XI in Davao City. NAMASUFA sought to
Books
represent all rank-and- le employees, numbering around
one hundred forty, of packing plant 90 (PP 90) of Fresh Corporati
Banana Agricultural Corporation (FBAC). NAMASUF A Law
claimed that there was no existing union in the
aforementioned establishment. Criminal L

The private respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUF A- Events

NAFLU-KMU) led a Petition for Certi cation Election before the Department of
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6/1/2018 CONTROL IS THE MOST IMPORTANT ELEMENT THAT ESTABLISHES EMPLOYER-EMPLOYEE RELATIONSHIP - EBV Law Office

Labor and Employment. NAMASUFA sought to represent Forms and

all rank-and- le employees, numbering around one Templates
hundred forty, of packing plant 90 (PP 90) of Fresh
Banana Agricultural Corporation (FBAC). NAMASUFA Labor Law
claimed that there was no existing union in the
Rules of
aforementioned establishment.
Procedure
FBAC led an Opposition to the Petition. It argued that
Tax Law
there exists no employer-employee relationship between
it and the workers involved. It alleged that members of TRAIN Law
NAMASUFA are actually employees of A2Y Contracting
Services (A2Y), a duly licensed independent contractor, as Uncatego
evidenced by the payroll records of the latter.

NAMASUF A, in its Comment to Opposition countered,

among others, that its members were former workers of
Tags
Stan lco before FBAC took over its operations sometime in 2002. The said former
employees were then required to join the Compostela Banana Packing Plant 240 days
Workers’ Cooperative (CBPPWC) before they were hired and allowed to work at the abandonme
Packing Plant of FBAC. It further alleged that the members of NAMASUF A were
working at PP 90 long before A2Y came.
abandon
of work a

Pending resolution of the petition, FBAC was merged with SUMIFRU, the latter backwag
being the surviving corporation. closure

Med-Arbiter Ruling: construct

dismissal
The DOLE Med-Arbiter issued an Order granting the Petition for Certi cation Death bene
Election of NAMASUF A and declared that Sumifru was the employer of the workers disability Disab
concerned.
claim dismi
The Med-Arbiter held that the “four-fold test” will show that respondent FBAC is the doubts resolved in

employer of petitioner’s members. The elements to determine the existence of an labor due process

employment relationship are: (a) the selection and engagement of the employee; employer-
(b) the payment of wages; ( c) the power of dismissal; and ( d) the employer’s power employee
to control the employee’s conduct. relationsh
The most important element is the employer’s control of the employee’s conduct, and habitual neglec

not only as to the result of the work to be done, but also as to the means and job contracting
methods to accomplish it. On the rst factor, (selection and engagement of the lab
jurisdiction
employer), it is that the sta of FBAC advised that those who are interested to be only contra
hired in the Packing Plant to become members rst of CBPPWC and get a loss of tru
recommendation from it. and
On the second factor (payment of wages), while the FBAC tried to impress that con denc
workers are paid by A2Y Contracting Services, this at best is but an administrative detail status PEME
arrangement. The payroll summary submitted does not contain the relevant Permane
information such as the employee’s rate of pay, deductions made and the amount
actually paid to the employee.
and Tota
Disabilit
On the third factor, (the power of dismissal), it is very clear that FBAC is the piercing the ve
authority that imposes disciplinary measures against erring workers. This alone employment m
proves that it wields disciplinary authority over them. Finally, on the fourth factor p
examination
which is the control test, the fact that the respondent FBAC gives instructions to employmen
the workers on how to go about their work is su cient indication that it exercises quitclaim
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6/1/2018 CONTROL IS THE MOST IMPORTANT ELEMENT THAT ESTABLISHES EMPLOYER-EMPLOYEE RELATIONSHIP - EBV Law Office

control over their movements. The workers are instructed as to what time they are reinstateme
supposed to report and what time they are supposed to return. They were required release resign
to ll up monitoring sheets as they go about their jobs and even the materials res judicata
which they used in the packing plant were supplied by FBAC. retirement
Secretary of Labor Ruling: retrenchm
second motio
Sumifru appealed to the DOLE Secretary and in a Resolution dated February 8, reconsiderat
2010, the DOLE Secretary dismissed the appeal. The DOLE Secretary ruled that separation
Sumifru is the true employer of the workers. serious
Sumifru then led a Petition for Certiorari with the CA raising the issue of whether miscond
the DOLE Secretary committed grave abuse of discretion in declaring it as the strained relatio
employer of the workers at PP 90. terminatio
unfair labor practic
CA Ruling:
Our mission Opening hours Contact dismissal
us vis

The CA dismissed the petition. power waiver w

To deliver legal services Monday - Friday:  Unit G03 breach

Makati willf
The CA ruled that the DOLEthatSecretary did not
will provide the commit
 grave
8:30amabuse of discretion
- 5:30pm disobedience
Executive Tower 2, Dela
because the latter’s ruling that Sumifru was the
best solution for clientsemployer of the workers was Rosa St., Makati City
anchored on substantial evidence.
and better results for Saturday - Sunday:
society. Closed
 to  (02) 579-9170
The CA, after reviewing the records, accorded respect the ndings of facts of the
 (02) 831-5881
DOLE Secretary, which a rmed the Med-Arbiter, as they have special knowledge
 attyelvin@gmail.com
and expertise over matters under their jurisdiction.

Sumifru moved for reconsideration but the CA denied it. Hence, the Petition. learomano77@gmail.com

Issue/s:

Whether or not there is employer-employee relationship when the company

required monitoring sheets and imposed disciplinary actions for non-compliance
with “No Helmet -No Entry”©“No ID EBV
2017 -No Law.
Entry”
Allpolicies.
Rights Reserved. CkDesign
SC Ruling:

Sumifru gave instructions to the workers on how to go about their work, what time
they were supposed to report for work, required monitoring sheets as they went
about their jobs, and provided the materials used in the packing plant.

In a rming the Med-Arbiter, the DOLE Secretary relied on the documents

submitted by the parties and ascertained that Sumifru indeed exercised control
over the workers in PP 90. The DOLE Secretary found that the element of control
was present because Sumifru required monitoring sheets and imposed disciplinary
actions for non-compliance with “No Helmet -No Entry” “No ID -No Entry” policies.

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6/1/2018 CONTROL IS THE MOST IMPORTANT ELEMENT THAT ESTABLISHES EMPLOYER-EMPLOYEE RELATIONSHIP - EBV Law Office

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