Jimenez v. NLRC

G.R. No. 116960 (April 2, 1996)

Bernardo and Jose liable for unpaid wages; Fredelito not considered an employee per SC ruling.

Facts:

On June 29, 1990, private respondents Pedro and Fredelito Juanatas filed a complaint against JJaS Trucking and Dr. Bernardo Jimenez for unpaid wages, commissions, separation pay, and damages. They claimed to have been employed by Bernardo Jimenez since December 1987, with Pedro serving as a driver/mechanic and Fredelito as a helper. Their compensation was based on a commission structure that started at 17% and was later increased to 20% of the gross income from hauling soft drinks for Coca-Cola Bottling Company.

The Juanatas claimed that they received only partial commissions amounting to P84,000.00 for the years 1988 and 1989, despite the total gross income of nearly P1,000,000.00 during that period. They alleged that they were owed an additional P106,211.86 in unpaid commissions and P15,050.30 in separation pay, totaling P114,261.86, and contended that their termination in March 1990 was illegal.

In response, the petitioners argued that Fredelito was not an employee but merely a helper to his father, Pedro. They claimed that all commissions had been paid and that the truck used for their operations was sold in 1991, thus negating any claims of illegal dismissal.

After hearings, Labor Arbiter Roque B. de Guzman ruled in favor of Pedro Juanatas, awarding him separation pay and attorney's fees, while dismissing Fredelito's complaint for lack of merit. The private respondents appealed this decision to the National Labor Relations Commission (NLRC), which modified the labor arbiter's ruling by declaring Fredelito an employee entitled to share in the commission and separation pay awarded to Pedro. The NLRC also ordered the petitioners to pay the total unpaid commissions of P84,387.05 and reduced the attorney's fees.

The petitioners filed a motion for reconsideration, which was denied, prompting them to seek certiorari from the Supreme Court.

Legal Issues:

  1. Did the NLRC commit grave abuse of discretion in ruling that the private respondents were not paid their commissions in full?
  2. Was Fredelito Juanatas an employee of JJaS Trucking entitled to share in the commission and separation pay?

Arguments:

Petitioners' Arguments:

  • They contended that Fredelito was not an employee but a helper to his father, Pedro, and that all commissions had been duly paid.
  • They argued that the sale of the truck in 1991 indicated that the private respondents were not illegally dismissed.

Respondents' Arguments:

  • The Juanatas claimed that they were owed substantial unpaid commissions and that their termination was unjust.
  • They argued that the NLRC's findings were supported by the evidence presented, which showed that the petitioners failed to prove full payment of the commissions.

Court's Decision and Legal Reasoning:

The Supreme Court affirmed the NLRC's decision with modifications. The Court found no reason to disturb the NLRC's conclusion that the entire amount of commissions had not been paid, emphasizing the burden of proof on the petitioners to demonstrate that payment had been made. The Court reiterated that the party asserting payment has the burden to prove it, and the petitioners failed to provide sufficient evidence to support their claims.

However, the Court disagreed with the NLRC's determination that Fredelito was an employee of the petitioners. It clarified that the existence of an employer-employee relationship is determined by several factors, including the selection and engagement of the employee, payment of wages, power of dismissal, and control over the employee's conduct. The Court noted that Fredelito was hired by his father and was under his supervision, thus lacking the necessary elements to establish an employer-employee relationship with the petitioners.

Significant Legal Principles Established:

  1. The burden of proof lies with the party asserting payment in a claim for unpaid wages or commissions.
  2. The determination of an employer-employee relationship hinges on the presence of specific factors, particularly the control test, which assesses the employer's authority over the employee's work and conduct.