REYNALDO BAUTISTA, PETITIONER, VS. HON. AMADO C. INCIONG, IN HIS CAPACITY AS DEPUTY MINISTER OF LABOR AND ASSOCIATED LABOR UNIONS (ALU), RESPONDENTS.

Bautista versus Inciong

The Case

This is a labor case about illegal dismissal. The petitioner, Reynaldo Bautista, was a union organizer. He filed a complaint for illegal dismissal against his employer, the Associated Labor Unions, after he was terminated. The Deputy Minister of Labor dismissed his complaint, ruling that no employer-employee relationship existed between Bautista and the union. Bautista brought the matter to the Supreme Court, which had to decide whether a labor union can itself be an employer of the persons who work for it. The case matters because it settles that a labor union is not exempt from the very labor laws it champions, and it applies the settled test for determining an employer-employee relationship.

Procedural History

Bautista filed his complaint for illegal dismissal with the Ministry of Labor. The Regional Director of the National Capital Region ruled in his favor. The Director ordered the union to reinstate him to his former position with full backwages, to pay him emergency allowance and thirteenth month pay, and to refund his Mutual Aid Fund Deposit. The union appealed to the Ministry of Labor. The Deputy Minister set aside the Director's order and dismissed the complaint for lack of merit, finding that no employer-employee relationship existed. Bautista then filed this petition with the Supreme Court, contending that the Deputy Minister committed grave abuse of discretion.

Facts

Bautista was employed by the Associated Labor Unions as an organizer in 1972, with a starting salary of 250 pesos a month. He paid his monthly Social Security System contributions, with the union as his employer. On March 15, 1979, he was left in the union's office while his fellow organizers attended a certification election at Chrysler Philippines in Cainta, Rizal, because he was not the organizer assigned to that company. The next day, March 16, 1979, he went on sick leave for ten days. His sickness benefit application form, signed by the union's physician, was given to the union for submission to the Social Security System.

When Bautista reported back for work after his leave, the union's Area Vice-President for Luzon informed him that his employment had been terminated effective March 15, 1979. He filed his complaint on March 28, 1979. On April 18, 1979, the union filed a clearance application to terminate his services effective March 16, 1979, on the ground of abandonment of work.

The Deputy Minister ruled against Bautista. He found that the petitioner was merely accommodated by the union after he was dismissed by his former employer in 1972. He held that the union's payment of the employer's share in the Social Security System premiums was not conclusive proof of employment, because the union did this as a favor for those performing full-time union activities. He added that the union is not an entity for profit but a registered labor union whose sole purpose is the representation of its bona fide organization units.

Issues

• Whether or not the Deputy Minister committed grave abuse of discretion in holding that there was no employer-employee relationship between Bautista and the Associated Labor Unions.
• Whether or not Bautista is entitled to the benefits he prayed for, including reinstatement and backwages.

Applicable Provisions

The decision does not quote a specific statutory provision. It applies the settled test for the existence of an employer-employee relationship, which the Court restated in this case:

In determining the existence of an employer-employee relationship, the elements that are generally considered are the following: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. It is the so-called control test that is the most important element.

This test bears on the case because the Court used these four elements to determine whether the union was Bautista's employer.

Ruling

On the first issue, the Court ruled in favor of Bautista. It held that there was nothing in the records to support the Deputy Minister's conclusion that Bautista was not an employee of the union. The mere fact that the respondent is a labor union does not mean that it cannot be considered an employer of the persons who work for it. Much less should it be exempted from the very labor laws which it espouses as a labor organization.

Applying the four elements, the Court found that Bautista was selected and hired by the union. He was paid wages by the union. The union had the power to dismiss him, as indeed it dismissed him. And the union tightly controlled his work as one of its organizers. The Court also found it significant that the union filed a clearance application with the Ministry of Labor to terminate his services. The Court concluded that there was absolutely no factual or legal basis for the Deputy Minister's decision.

On the second issue, the Court held that reinstatement was no longer proper. The records showed antipathy and antagonism between Bautista and the union. The union would not want a union organizer whom it did not trust and who could sabotage its efforts to unionize establishments. Severance pay was therefore more proper. The Court ordered the union to pay him an amount equal to his backwages for only three years, and the separation pay to which he may be entitled as of the end of the three-year period under the applicable law or collective bargaining agreement.

Doctrine

A labor union is not exempt from the labor laws it champions. It can be considered an employer of the persons who work for it. To determine whether an employer-employee relationship exists, the Court considers four elements: the selection and engagement of the employee, the payment of wages, the power of dismissal, and the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. The control test is the most important element. Where the evidence shows that the union hired the worker, paid his wages, had the power to dismiss him, and controlled his work, an employer-employee relationship exists. Where reinstatement is no longer feasible because of antagonism between the parties, backwages may be awarded in the nature of severance pay.

Disposition

The petition was granted. The decision of the Deputy Minister was annulled and set aside, and the order of the Regional Director was reinstated and ordered executed, except that instead of reinstatement, the union was ordered to pay Bautista backwages for three years and the separation pay to which he may be entitled.

Remember This

A labor union can be an employer, and it is not exempt from the labor laws it espouses. Examiners like to use this case to test the four elements of the employer-employee relationship and the control test, and to show that backwages may be awarded as severance pay when reinstatement is no longer feasible.