SUMIFRU (PHILIPPINES) CORP. (SURVIVING ENTITY OF A MERGER WITH FRESH BANANA AGRICULTURAL CORPORATION AND OTHER CORPORATIONS), PETITIONER, VS. NAGKAHIUSANG MAMUMUO SA SUYAPA FARM…

Sumifru versus Nagkahiusang Mamumuo sa Suyapa Farm

The Case

This is a labor case about who is the real employer of packing-plant workers, and whether a certification election may proceed among them. Sumifru (Philippines) Corporation, the surviving corporation in a merger with Fresh Banana Agricultural Corporation, asks the Supreme Court to overturn the finding that it is the employer of the workers at Packing Plant 90 in Upper Siocon, Compostela, Compostela Valley. The union Nagkahiusang Mamumuo sa Suyapa Farm, affiliated with the National Federation of Labor Unions and Kilusang Mayo Uno, filed the petition for certification election. The case matters because it shows how the Supreme Court treats the factual findings of labor agencies, and how the four-fold test of employment, especially the control test, defeats arrangements that disguise the true employer.

Procedural History

The union filed a petition for certification election before the Department of Labor and Employment, Regional Office Eleven, in Davao City. The Circuit Mediator-Arbiter granted the petition, declared Sumifru the employer of the workers, and ordered a certification election. Sumifru appealed to the Secretary of Labor and Employment, who dismissed the appeal and affirmed the Mediator-Arbiter. Sumifru then filed a petition for certiorari with the Court of Appeals, arguing that the Secretary committed grave abuse of discretion. The Court of Appeals denied the petition and affirmed the Secretary. Sumifru moved for reconsideration, which the Court of Appeals also denied. Sumifru then came to the Supreme Court through a petition for review on certiorari under Rule 45.

Facts

Fresh Banana Agricultural Corporation was engaged in buying, marketing, and exporting Cavendish bananas. The union members had been workers of Stanfilco before Fresh Banana took over its operations sometime in 2002. Those former employees were required to join the Compostela Banana Packing Plant Workers' Cooperative before they were hired and allowed to work at the packing plant. The union alleged that its members were working at Packing Plant 90 long before A2Y Contracting Services came into the picture.

In March 2008, the union filed a petition for certification election, seeking to represent around one hundred forty rank-and-file employees of Packing Plant 90, claiming there was no existing union in the establishment. Fresh Banana opposed, arguing that there was no employer-employee relationship between it and the workers, because the union members were actually employees of A2Y Contracting Services, a duly licensed independent contractor, as shown by the latter's payroll records. In June 2008, while the petition was pending, Fresh Banana merged with Sumifru, the latter being the surviving corporation.

The Mediator-Arbiter applied the four-fold test and found that Fresh Banana was the real employer. On selection and engagement, the staff of Fresh Banana advised interested applicants to first become members of the cooperative and get its recommendation. On payment of wages, the payroll summary submitted did not contain relevant information such as the rate of pay, deductions, and the amount actually paid. On the power of dismissal, Fresh Banana imposed disciplinary measures on erring workers. On control, Fresh Banana gave instructions on how to go about the work, required monitoring sheets, and supplied the materials used in the packing plant. The Mediator-Arbiter called the arrangement an elaborate scheme to deprive the workers of their right to self-organization.

Issues

• Whether or not the Court of Appeals erred in affirming the finding of the Secretary of Labor and Employment that Sumifru is the employer of the workers engaged for the packing operations at Packing Plant 90.
• Whether or not the Secretary of Labor and Employment committed grave abuse of discretion in so ruling.

Applicable Provisions

Rule 45 of the Rules of Court, as discussed in the decision, limits a petition for review on certiorari to questions of law. The Court states the rule as follows:

The office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it shall raise only questions of law.

This limits the Court to reviewing whether the Court of Appeals correctly determined the presence or absence of grave abuse of discretion on the part of the Secretary, not whether the Secretary's decision on the merits was strictly correct.

Ruling

On the first issue, the Court held that Sumifru's arguments raise questions of fact. Sumifru even submitted to the Court, as annexes to its petition, the very same evidence it had presented before the Mediator-Arbiter, the Secretary, and the Court of Appeals. The Court stressed that in a petition for review on certiorari it is limited to questions of law, and in a labor case it reviews only whether the Court of Appeals was correct in finding the presence or absence of grave abuse of discretion on the part of the Secretary.

On the second issue, the Court found no grave abuse of discretion. The factual findings of quasi-judicial agencies like the Department of Labor and Employment, when supported by substantial evidence, are entitled to great respect in view of their expertise. The Court defined substantial evidence as follows:

That amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

The Mediator-Arbiter found that Sumifru gave instructions to the workers on how to go about their work, what time to report, required monitoring sheets, and provided the materials used in the packing plant. The Secretary found the element of control present because Sumifru required monitoring sheets and imposed disciplinary actions for non-compliance with the no helmet, no entry and no identification, no entry policies. The Court of Appeals even went further and reviewed the records itself, reaching the same conclusion. The Court held it could not re-calibrate the factual bases of these findings, especially where the petition failed to show any whimsicality or capriciousness in the exercise of judgment.

Doctrine

A petition for review on certiorari under Rule 45 raises only questions of law. In labor cases, judicial review does not extend to a re-evaluation of the sufficiency of the evidence on which the labor official's findings rest. The factual findings of quasi-judicial agencies such as the Department of Labor and Employment, when supported by substantial evidence, are entitled to great respect and bind the Court absent a showing of whimsical or capricious exercise of judgment. Substantial evidence is that amount of relevant evidence a reasonable mind might accept as adequate to support a conclusion. On the merits, the four-fold test determines the existence of an employer-employee relationship: selection and engagement, payment of wages, power of dismissal, and control over the employee's conduct, the last being the most important. Control refers to the right of the employer, whether actually exercised or reserved, to control the work as well as the means and methods by which it is accomplished.

Disposition

The Supreme Court denied the petition and affirmed the Decision and Resolution of the Court of Appeals, so the certification election among the rank-and-file workers of Packing Plant 90 may proceed.

Remember This

Memorize this line: factual findings of labor agencies supported by substantial evidence bind the Supreme Court, which under Rule 45 reviews only questions of law. Examiners use this case to test the limits of a Rule 45 petition in labor disputes and the application of the control test to defeat labor-only contracting schemes.