FU TENG WU AND JAIFAN WU, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND ARJAY SANTOS, RESPONDENTS.

Fu Teng Wu versus National Labor Relations Commission

The Case

This is a petition for certiorari brought by Fu Teng Wu and Jaifan Wu, Chinese businessmen engaged in the consignment and retail of various products, against the National Labor Relations Commission and their former worker Arjay Santos. The Wus ask the Supreme Court to annul the Commission's ruling that they were Santos's employers and that they illegally dismissed him. The case matters because it gathers in one decision the two questions that recur in every illegal dismissal suit: how an employer-employee relationship is proved, and who carries the burden once a dismissal is alleged. It also teaches a sharp lesson on judicial admissions, for the Wus lost chiefly because of what they had already admitted.

Procedural History

Santos filed a complaint for illegal dismissal with money claims before the Labor Arbiter. The Labor Arbiter ruled for Santos, found that an employer-employee relationship existed between him and the Wus, and held them liable for illegal dismissal. The Wus appealed to the National Labor Relations Commission, which affirmed the Labor Arbiter in full and dismissed the appeal for lack of merit. The Wus moved for reconsideration, and the Commission denied the motion. The Wus then came to the Supreme Court by a petition for certiorari under Rule 65, charging grave abuse of discretion amounting to lack or excess of jurisdiction.

Facts

Santos worked as an electrician and as an all-around helper in the Wus' business. He claimed he was hired on the fourteenth of June 2010 and was unceremoniously terminated in March 2011. On the thirtieth of March 2011 he filed his complaint for illegal dismissal with money claims against the Wus.

The Wus denied that Santos was their employee. They said he worked for one Claire Marasigan, the store owner to whom they consigned their products for sale, and that they merely assisted her in running the business. They added that, upon their suggestion, Marasigan stopped giving Santos daily free meals, and that Santos abandoned his job and retaliated by filing the complaint.

At the preliminary conference before the Labor Arbiter, however, Jaifan Wu admitted that the Wus had hired Santos and paid his salary, and even admitted paying him a daily wage of 185 pesos. Marasigan later appeared and claimed that she was the employer, showing the tax registration and the trade registration of her store. The Labor Arbiter and the Commission nonetheless ruled for Santos, and the Wus elevated the matter to the Supreme Court.

Issues

• Whether or not the Commission gravely abused its discretion in declaring the Wus the employers of Santos.
• Whether or not the Commission gravely abused its discretion in treating the admissions of Jaifan Wu during the preliminary conference as proof of the employer-employee relationship.
• Whether or not the Commission gravely abused its discretion in finding that Santos was illegally dismissed.
• Whether or not the Commission gravely abused its discretion in awarding separation pay, full backwages, and holiday pay.

Applicable Provisions

Section 2, Rule 16, Book 5 of the Omnibus Rules Implementing the Labor Code, on the notice required when abandonment is charged, provides:

Section 2. Notice of abandonment. — Where the employee has abandoned his work, the employer shall send a notice to the employee at his last known address, requiring him to report for work within a reasonable time, and stating that his failure to do so will result in the termination of his employment.

The Court cites this rule to show what the Wus should have presented to substantiate their claim of abandonment, and did not.

Ruling

On the first two issues, the Court held that no grave abuse of discretion attended the finding of an employer-employee relationship. In labor cases the employer bears the burden of proving that the employee was not dismissed, or that the dismissal was not illegal; but before an illegal dismissal case can prosper, the employer-employee relationship must first be established. Jurisprudence applies the four-fold test: the manner of selection and engagement or power to hire; the payment of wages; the presence or absence of the power of dismissal; and the presence or absence of the power of control. Here the Wus admitted during the preliminary conference that they hired Santos and paid his salary. The Court called an admission against interest the best evidence, affording the greatest certainty of the facts in dispute, because no man would declare anything against himself unless the declaration were true. Since an illegal dismissal case can prosper only where such a relationship exists, the admission was plainly against the Wus' interest. The Wus were estopped from taking a different position, and the documents shown by Marasigan proved only that her business complied with registration requirements; they did not prove that she hired Santos, paid his wages, or exercised control over him.

On the third issue, the Court held that the dismissal was illegal. The burden of proving that an employee was not dismissed, or that a dismissal was not illegal, rests fully on the employer, and failure to discharge that burden means the dismissal was not justified and was illegal. The Wus offered only a bare allegation of abandonment. They should have presented Santos's time record, a letter demanding that he return to work, a notice of abandonment sent to his last known address as the Omnibus Rules require, or a notice of termination on that ground, and they presented none. The Court also held that a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, and Santos filed his complaint within the very month he was dismissed. On the fourth issue, the Court sustained the awards, since the findings of the Labor Arbiter, affirmed by the Commission, are accorded not only great respect but even finality when supported by substantial evidence and devoid of unfairness.

Doctrine

First, the employer-employee relationship is established by the four-fold test: the power to hire, the payment of wages, the power of dismissal, and the power of control. Second, an admission against interest is the best evidence of the fact admitted, and a party who admits a fact in the proceedings below is estopped from asserting a contrary position later. Third, the employer bears the burden of proving that the dismissal was justified; a bare claim of abandonment, unsupported by a time record, a return-to-work letter, or the notice required by Section 2, Rule 16, Book 5 of the Omnibus Rules, cannot discharge that burden. Fourth, abandonment is inconsistent with the immediate filing of a complaint for illegal dismissal. Fifth, findings of the Labor Arbiter affirmed by the Commission are entitled to respect, even finality, when supported by substantial evidence.

Disposition

The petition was dismissed, and the Commission's decision and resolution were affirmed; the Wus lost and remained liable to Santos for illegal dismissal.

Remember This

Memorize the line that an admission against interest is the best evidence, and that the employer's burden in an illegal dismissal case cannot be met by a bare claim of abandonment. Examiners use this case to test the four-fold test, the doctrine of judicial admissions, and the evidentiary requirements for proving abandonment.