SC upholds driver/hauler; reverses NLRC, CA rulings

Published October 18, 2021, 12:30 PM

by Rey Panaligan 

Supreme Court

Is a truck driver/hauler a regular employee of a marketing firm which hired him to deliver consumer goods?

If his case is similar to that of Rodrigo A. Upod’s, then he is a regular employee as there exists an employer-employee relationship between him and the firm.

On May 19, 2017, Upod sued Onon Trucking and Marketing Corporation (Onon Trucking) and Aimardo V. Interior for illegal dismissal.

Upod told the labor arbiter that he was hired in April 2004 as a hauler/driver to deliver goods. He said he was paid on a “per trip” basis by Onon Trucking at 16 per cent of the gross revenue per trip.

He said he was suspended in 2009 but he was rehired in 2014 until February 2017 when he was no longer given any delivery assignment.

Onon Trucking said there was no employer-employee relationship since Upod was never its employee. It said that just like other freelance drivers, Upod was hired to transport supplies to its clients.

On Feb. 28, 2019, Labor Arbiter Ma. Lourdes R. Baricaua declared Upod a regular employee of Onon Trucking. The firm and/or Interior were ordered to pay Upod P169,000, 13th month pay, and attorney’s fees.

The labor arbiter ruled that the elements of employer-employee relationship were present in Upod’s case, namely: Onon Trucking hired Upod as driver to transport its goods to different parts of Luzon, Upod was paid on per trip basis, the firm’s power to dismiss Upod was inherently included in its power to engage the latter as its employee, and Upod performed his tasks as truck driver under the firm’s supervision and control.

The arbiter also ruled that Upod’s claims for non-membership in the Social Security System, Philippine Health Insurance Corp., and Home Development Mutual Fund should be lodged with the proper forum.

Onon Trucking’s appealed to the National Labor Relations Commission (NLRC). On June 26, 2018, the NLRC granted the appeal and reversed the arbiter’s ruling.

The NLRC ruled that Upod did not present evidence to prove his employment with the firm. It said that the terms of the per trip contract were clear — the engagement ended upon completion of Upod’s delivery of the goods or his return to the warehouse whichever came earlier.

It also said that the limited engagement of Upod’s services – two to three times per week – also weighed heavily against his claim for employment, and thus, there could be no illegal dismissal.

The case reached the Court of Appeals (CA) on Upod’s appeal. While the CA agreed with the labor arbiter that there was an employer-employee relationship, it ruled that Upod was validly dismissed.

Upod elevated the case to the SC. In a decision written by Associate Justice Amy C. Lazaro Javier, the SC agreed with the labor arbiter that the four-fold test to determine employer-employee relationship was complied with in Upod’s case.

The SC said:

“A regular employee, therefore, is one who is either (1) engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; or (2) a casual employee who has rendered at least one (1) year of service, whether continuous or broken, with respect to the activity in which he or she is employed.

“To be valid, petitioner’s dismissal should have been for just or authorized causes and only upon compliance with procedural due process. As it was, respondent company (Onon Trucking) complied with neither condition in effecting petitioner’s dismissal. It just abruptly stopped giving delivery assignment to petitioner in February 2017.

“Petitioner need not even prove the fact of his dismissal in view of respondent company’s admission that it stopped giving assignment to petitioner because allegedly, his contract already expired.

“Article 279 (now Article 294) of the Labor Code mandates that an illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges, fulI backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.

“Where reinstatement is no longer viable as an option, or when the dismissed employee opted not to be reinstated, as in here, separation pay equivalent to one (I) month salary for every year of service should be awarded as an alternative. Payment of separation pay is in addition to payment of backwages.

“Verily, petitioner is entitled to backwages reckoned from February 2017 until finality of this Decision. As for his separation pay in lieu of reinstatement, he is also entitled to one (I) month salary for every year of service reckoned from the year 2014 when he was hired anew as driver until finality of this decision. Further, he is entitled to payment of his 13th month pay.

“Finally, the Court finds that respondent Onon Trucking should be solely liable for the monetary awards here. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf, and, in general, from the people comprising it.

“ACCORDINGLY, the petition is GRANTED. The Decision dated February 14, 2019 and Resolution dated July 10, 2019 of the Court of Appeals in CA-G.R. SP No. 158220, are REVERSED and SET ASIDE.

“Petitioner RODRIGO A. UPOD is declared ILLEGALLY DISMISSED and respondent ONON TRUCKING AND MARKETING CORPORATION is ORDERED to PAY him: 1) BACKWAGES reckoned from February 2017 until finality of this Decision; 2) SEPARATION PAY equivalent to one (1) month salary for every year of service reckoned from 2014 until finality of this Decision; 3) 13th MONTH PAY limited to three (3) years prior to the filing of the complaint; and 4) Ten percent (10%) ATTORNEY’S FEES.

“These monetary awards shall earn six percent (6%) legal interest per annum from finality of this Decision until fully paid. SO ORDERED.”