Locsin vs. PLDT

Locsin vs. PLDT Case Digest

RAUL G. LOCSIN and EDDIE B. TOMAQUIN, Petitioners,
vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Respondent.

G.R. No. 185251
October 2, 2009

Facts:

On November 1, 1990, respondent PLDT and the Security and Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement whereby SSCP would provide armed security guards to PLDT to be assigned to its various offices. Petitioners Raul Locsin and Eddie Tomaquin, among other security guards, were posted at a PLDT office. On August 30, 2001, respondent issued a Letter terminating the Agreement effective October 1, 2001. Despite the termination of the Agreement, however, petitioners continued to secure the premises of their assigned office. They were allegedly directed to remain at their post by representatives of respondent. In support of their contention, petitioners provided the Labor Arbiter with copies of petitioner Locsin’s payslips for the period of January to September 2002. Then, on September 30, 2002, their services were terminated.

Petitioners filed a complaint before the Labor Arbiter for illegal dismissal and recovery of money claims such as overtime pay, holiday pay, and premium pay for holiday and rest day, service incentive leave pay, Emergency Cost of Living Allowance, and moral and exemplary damages against PLDT. The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal. It held that petitioners were employees of PLDT and not of SSCP for petitioners continued to serve as guards of PLDT’s offices. As such employees, they were entitled to substantive and procedural due process before termination of employment.

PLDT appealed to NLRC which rendered a Resolution affirming in toto the Arbiter’s Decision. Thus, PDLT filed a Motion for Reconsideration of the NLRC’s Resolution which was also denied.

Hence, PLDT filed a Petition for Certiorari with the CA which rendered the assailed decision granting PLDT’s petition and dismissing petitioners’ complaint. The CA applied the fourfold test in order to determine the existence of an employer-employee relationship between the parties but did not find such relationship. It determined that SSCP was not a labor-only contractor and was an independent contractor having substantial capital to operate and conduct its own business. The CA further bolstered its decision by citing the Agreement whereby it was stipulated that there shall be no employer-employee relationship between the security guards and PLDT. Anent the payslips that were presented by petitioners, the CA noted that those were issued by SSCP and not PLDT; hence, SSCP continued to pay the salaries of petitioners after the Agreement. This fact allegedly proved that petitioners continued to be employees of SSCP albeit performing their work at PLDT’s premises. Hence, this petition. 

ISSUES:

Whether petitioners became employees of respondent after the Agreement between SSCP and respondent was terminated.

Held:

Yes. The SC held that there was no employer-employee relationship between the parties from the time of petitioners’ first assignment to respondent by SSCP in 1988 until the alleged termination of the Agreement between respondent and SSCP. The petitioners were among those declared to be employees of their respective security agencies and not of PLDT. However, the petitioners became the employees of respondent after the agreement between SSCP and respondent was terminated.

While respondent and SSCP no longer had any legal relationship with the termination of the Agreement, petitioners remained at their post securing the premises of respondent while receiving their salaries, allegedly from SSCP. Clearly, such a situation makes no sense, and the denials proffered by respondent do not shed any light to the situation. It is but reasonable to conclude that, with the directive of respondent, petitioners continued with their services. Evidently, such are indicia of control that respondent exercised over petitioners. Such power of control has been explained as the “right to control not only the end to be achieved but also the means to be used in reaching such end.” With the conclusion that respondent directed petitioners to remain at their posts and continue with their duties, it is clear that respondent exercised the power of control over them; thus, the existence of an employer-employee relationship.

Evidently, respondent having the power of control over petitioners must be considered as petitioners’ employer––from the termination of the Agreement onwards––as this was the only time that any evidence of control was exhibited by respondent over petitioners. Thus, as aptly declared by the NLRC, petitioners were entitled to the rights and benefits of employees of respondent, including due process requirements in the termination of their services. Both the Labor Arbiter and NLRC found that respondent did not observe such due process requirements. Having failed to do so, respondent is guilty of illegal dismissal.