CANLUBANG SECURITY AGENCY CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION AND ARSENIO A. BARTOLAY, REYNALDO ACOSTA, JANUARIO AGUADA, AUGUSTIA E. AGUILA, LEONCIO…

The real issue raised in this illegal dismissal case is whether
or not respondent National Labor Relations Commission (NLRC) committed grave
abuse of discretion in ruling that the petitioner, Canlubang Security Agency
(CSA, for short), and not Canlubang Automotive Resources Corporation (CARCO,
for short), was the employer of the private respondents, Arsenio A. Bartolay,
et al. (hereinafter referred to as “private respondents”).

The facts, as narrated by the Solicitor General, are as follows:

“CARCO had a security service contract with CSA whereby the
latter agreed to secure, guard and protect CARCO’s properties and
interest. This contractual relation
continued until February 14, 1985 when CARCO notified CSA that in view of
recent developments and performance of the security personnel detailed with
CARCO, the latter decided to engage the services of another agency (Annex ‘B’,
Petition).

“Sometime in February, 1985, several security guards,
supervisors, and officers headed by private respondent Arsenio A. Bartolay,
filed a complaint for illegal termination against CSA and CARCO. On May 14, 1985, however, private
respondents filed a Motion to Dismiss said complaint as against CSA (Annex ‘H’,
Petition). Pertinent allegations of
said Motion read:

“‘2. After a careful and thorough analysis of the
circumstances giving rise to this case, we are convinced and of the conviction
that we have no cause of action whatsoever against CSA, the latter
not being our employer but CARCO.

“‘3. Hence, we hereby forever release and
discharge CSA, its owners, officers, employees, successors and assigns from any
and all manner of actions, suits, debts, claims, demands and liabilities
whatsoever we now have or may have in law or equity against the said company,
its owners, officers, employees, successors and assigns by reason or as a
consequence of, or in connection with, or incident to, our employment as
security guards, our intention being to release and discharge completely,
absolutely and finally said CSA, its owners, officers, employees, successors or
assigns;

“‘4. We further hereby waive, renounce and forego all claims, particularly separation
pay, sick leave, vacation leave, and any other claim under any law or contract
which we have or might have against CSA by virtue of our employment as security
guards.’

“Labor Arbiter Cresencio Ramos, in his Order dated May 5, 1985
(Annex ‘J’, Petition), granted said Motion. CARCO appealed therefrom and resolving the same, the NLRC, in its Resolution dated January 26, 1986, set
aside the Order of Labor Arbiter Ramos and remanded the case to the Arbitration
Branch for further proceedings. The
NLRC observed that the Labor Arbiter erred in dismissing the case as against
CSA which is an indispensable party to the case and as such should be impleaded
as party respondent (Annex ‘N’, Petition).

“In said hearing, the CSA did not present any evidence and
opted to adopt the evidence presented by private respondents.

“In the Decision dated September 15, 1988 (Annex ‘B’,
Petition) Labor Arbiter Alvarez found private respondents’ dismissal to be
illegal but held only CSA liable therefor and dismissed the complaint as
against CARCO for lack of employer-employee relationship.

“In an appeal therefrom, the NLRC, in its Resolution dated
October 12, 1989, modified the foregoing Decision by dismissing the complaint
as against both CSA and CARCO (Annex ‘F’, Petition).

“Private respondents moved to reconsider the foregoing
Decision and the NLRC, in its Resolution dated December 19, 1990 (Annex ‘A’,
Petition) granted the same and reinstated the appealed Decision of Labor
Arbiter Alvarez which found only CSA liable to private respondents for illegal
termination.

“CSA’s Motion for Reconsideration was denied by the NLRC in
its Resolution dated January 31, 1991 (Annex ‘C’, Petition).

“Hence, this Petition upon the contention that:

“‘In issuing the Resolution (Annex ‘A’) complained of Public
Respondent National Labor Relations Commission (NLRC) acted with great abuse of
discretion making the following findings which are contrary to law and evidence, to
wit:

“I. NLRC’s finding that the quitclaim clearly x x x was premised on an erroneous belief that respond­ent CARCO
is the real employer (p. 9).

“II. NLRC’s finding that to
exonerate respond­ency (sic) CSA is contrary to the declared policy of the law
to afford protection to labor and to assure them the right to security of
tenure (p. 9).

“III. NLRC’s finding that while rights may be waived, the same must
not be contrary to law, public order, morals and good customs or prejudicial to
a third person with a right recognized by law (p. 9).

“IV. NLRC’s finding that the affidavit of Antonio Yulo, as officer of CSA is
indeed self-serving and should be held suspect. His declaration cannot overcome the documentary evidence
presented by respondent CARCO to controvert the same.’” (pp. 225-229,
Rollo.)

The petition is without merit.

In determining the existence of employer-employee relationship,
the following elements are generally considered, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; (4) the power
to control the employee’s conduct – although the latter is the most important
element (Brotherhood Labor Unity Movement of the Philippines vs. Zamora, 147
SCRA 49; Social Security System vs. Court of Appeals, 156 SCRA 383; Broadway
Motors, Inc. vs. NLRC, 156 SCRA 522; Bautista vs. Inciong, 158 SCRA 665).

In the case at bar, the contract for security service entered
into between CSA and CARCO provided, among other terms, as follows:

“1. Firearms and other ammunitions needed by the
guards for effectively securing CARCO’s premises shall be provided by CSA.

“2. Replacement of security guards shall be
reposed on CSA.

“3. Discipline of the guards as well as their
dismissal shall be within the regulation of the agency or CSA.

“4. The guards are employees of the agency and not
that of the client company.

“5. All wages, benefits, and increments due
under existing laws to the guards shall be the sole and exclusive
responsibility of CSA.

“6. The agency shall
hold CARCO ‘free from any liability, cause or causes of action, case, claim,
which may be filed by security guards employed by the agency which matters
involve the provisions of wage act or laws … or where such claim involve the
question of employment as said guards are in no sense personnel or employees of
the client company.’” (pp. 52-53, Rollo.)

The right-of-control test, i.e. “where the person for whom
the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such as end” (Sevilla
vs. Court of Appeals, 160 SCRA 171) belonging to petitioner CSA by express
stipulation of its contract with CARCO, is determinative of the existence of
employer-employee relationship between CSA and its guards, the private
respondents herein. Where no
employer-employee relationship has been proven to exist between the private
respondents and CARCO, the labor case filed by the private respondents against
CARCO with DOLE’s arbitration body should be dismissed for there is no legal
basis for the private respondents’ claims for separation pay and other benefits
against CARCO.

In the similar case of AMERICAN PRESIDENT LINES vs. CLAVE (114
SCRA 826, 833), we ruled:

“In the light of the foregoing standards, We fail to see how
the complaining watchmen of the Marine Security Agency can be considered as
employees of the petitioner. It is the
agency that recruits, hires, and assigns the work of its watchmen. Hence, a watchman can not perform any
security service for the petitioner’s vessels unless the agency first accepts
him as its watchman. With respect to
his wages, the amount to be paid to a security guard is beyond the power of the
petitioner to determine. Certainly, the
lump sum amount paid by the petitioner to the agency in consideration of the
latter’s service is much more than the wages of any one watchman. In point of fact, it is the agency that
quantifies and pays the wages to which a watchman is entitled.

“Neither does the petitioner have any power to dismiss the
security guards. In fact, We fail to
see any evidence in the record that it wielded such a power. It is true that
it may request the agency to change a particular guard. But this, precisely, is proof that the power
lies in the hands of the agency.

“Since the petitioner has to deal with the agency, and not the
individual watchmen, on matters pertaining to the contracted task, it stands to
reason that the petitioner does not exercise any power over the watchmen’s
conduct. Always, the agency stands
between the petitioner and the watchmen;
and it is the agency that is answerable to the petitioner for the conduct of
its guards.”

Petitioner CSA disclaims any liability for the termination of
private respondents from their employment because of the QUITCLAIM/WAIVER
contained in the latter’s Motion to Dismiss their complaint against CSA based
on their belief that their employer was CARCO and not CSA.

That argument deserves scant consideration for as the Solicitor
General aptly observed:

“The alleged Quitclaim/Waiver is patently invalid being
premised on a wrong conviction or belief. As pointed out above, the existence of an employer-employee
relationship, as a condition for the availment of provisions of the Labor Code,
is determined by evidence and jurisprudence and the task of determining the
same is judicial in character.

“Consequently, private respond­ents may not arrogate unto
themselves the authority to determine unilaterally, the existence of an
employer-employee relationship, otherwise, the disposition of the case would be
made to depend, to a large extent, on the ‘belief and conviction’ of a party
litigant and not on the evidence adduced and jurisprudence applicable
thereto.” (pp. 230-231, Rollo.)

The issue of whether employer-employee relationship existed
between the parties is a question of fact which was resolved by the labor
arbiter against CSA and upheld by the NLRC. Review of labor cases are confined to questions of jurisdiction or grave
abuse of discretion. (Aboitiz Shipping Employees
Association vs. NLRC, 186 SCRA 825.) In this case, we find that no grave abuse
of discretion was committed by the NLRC. The findings of facts of the labor arbiter and the NLRC are binding on
this Court.

WHEREFORE, the petition for certiorari is DISMISSED
for lack of merit. No costs.

SO ORDERED.

Cruz, (Chairman), Padilla, and
Bellosillo, JJ., concur.