Employer-employee relationship

The power of an employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship.

Petitioner Marsman and Company Inc. (Marsman), engaged in the business of distribution and sale of pharmaceutical and consumer products, employed respondent Rodil C. Sta. Rita as a warehouse man.

It purchased Metro Drug Distribution Inc. now, Consumer Products Distribution Services Inc. (CPDSI). The employees of the two corporations were integrated through a memorandum of agreement effective July 1, 1996 under the Metro Drug legal entity. Marsman’s functions were limited to those of the holding company and CPDSI as the main operating company.

The services of Sta. Rita were terminated by CPDSI on Feb. 28, 2000 due to redundancy. Aggrieved, Sta. Rita filed a complaint against Marsman for illegal dismissal, damages and attorney’s fees.

Marsman invoked the defense that the labor arbiter had no jurisdiction over the complaint because it was not anymore the employer of Sta. Rita but CPDSI.

Is this defense meritorious?

Ruling: Yes.

To prove the element on the payment of wages, Sta. Rita submitted forms for leave application, with either Marsman’s logo or CPDSI’s logo.

Significantly, the earlier leave forms bore Marsman’s logo but the latest leave application of Sta. Rita already had CPDSI’s logo. In any event, the forms for leave application did not sufficiently establish that Marsman paid Sta. Rita’s wages. Sta. Rita could have presented pay slips, salary vouchers, payrolls, certificates of withholding tax on compensation income or testimonies of his witnesses.

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As to the power of dismissal, the letter dated Jan. 14, 2000 clearly indicated that CPDSI, and not Marsman, terminated Sta. Rita’s services by reason of redundancy.

Finally, Sta. Rita failed to prove that Marsman had the power of control over his employment at the time of his dismissal.

The power of an employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. Control, in such relationships addresses the details of day to day work like assigning the particular task that has to be done, monitoring the way tasks are done and their results, and determining the time during which the employee must report for work or accomplish his or her assigned task.

The court, likewise, takes notice of the company IDs attached in Sta. Rita’s pleading. The “old” ID bore Marsman’s logo while the “new” ID carried Metro Drug’s logo.

The Court has held that in a business establishment, an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it. Thus the “new” ID confirmed that Sta. Rita was an employee of Metro Drug, which, to reiterate, later changed its name to CPDSI.

Having established that an employer-employee relationship did not exist between Marsman and Sta. Rita at the time of his dismissal, Sta. Rita’s original complaint must be dismissed for want of jurisdiction on the part of the labor arbiter to take cognizance of the case.

For this reason, there is no need for the court to pass upon the other issues raised. (Marsman and Company, Inc. vs. Rodil C. Sta. Rita, G.R. No. 194765, April 23, 2018).