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Case Study: Joaquin Lu vs. Tirso Enopia et al.

G.R. No. 197899

06 Mar 2017

Peralta, J.


Respondents were hired from January 20, 1994 to March 20, 1996 as crew members of the fishing mother boat F/B MG-28 owned by respondent Joaquin "Jake" Lu (herein petitioner Lu) who is the sole proprietor of Mommy Gina Tuna Resources [MGTR] based in General Santos City. Petitioners and Lu had an income-sharing arrangement wherein 55% goes to Lu, 45% to the crew members, with an additional 4% as "backing incentive." They also equally share the expenses for the maintenance and repair of the mother boat, and for the purchase of nets, ropes and payaos.

Sometime in August 1997, Lu proposed the signing of a Joint Venture Fishing Agreement between them, but petitioners refused to sign the same as they opposed the one-year term provided in the agreement. According to petitioners, during their dialogue on August 18, 1997, Lu terminated their services right there and then because of their refusal to sign the agreement.

On August 25, 1997, petitioners filed their complaint for illegal dismissal, monetary claims and damages. Petitioners alleged that their refusal to sign the Joint Venture Fishing Agreement is not a just cause for their termination.

On the other hand, Lu denied having dismissed petitioners, claiming that their relationship was one of joint venture where he provided the vessel and other fishing paraphernalia, while petitioners, as industrial partners, provided labor by fishing in the high seas. Lu alleged that there was no employer-employee relationship as its elements were not present


Whether or not an employer-employee relationship existed between petitioner Lu and respondents, Enopia et al.


Yes, there is an employer-employee relationship.

In determining the existence of an employer-employee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) the power to control the worker's conduct; (3) the payment of wages by whatever means; and (4) the power of dismissal. We find all these elements present in this case.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted.

In this case, petitioner contends that it was the piado who hired respondents, however, it was shown by the latter's evidence that the employer stated in their Social Security System (SSS) online inquiry system printouts was MGTR, which is owned by petitioner. Printouts of their individual sss contribution sheet that the date of the SSS remitted contributions coincided with the date of respondents' employment with petitioner. Petitioner failed to rebut such evidence. Thus, the fact that petitioner had registered the respondents with SSS is proof that they were indeed his employees. The coverage of the Social Security Law is predicated on the existence of an employer-employee relationship. Moreover, the records show that these fishermen obtain vale or cash advance from petitioner and not from the piado who allegedly hired and had control over them.

It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. It is not essential that the employer actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power.

The private respondent (petitioner) controls the entire fishing operations. Petitioner assigned a master fisherman (pi ado) and assistant master fisherman (assistant pi ado) for each mother fishing boat, who every now and then supervise the fishing operations. Private respondent also assigned checkers based on the office to monitor and contact every now and then the crew at sea through radio. The checkers advise the private respondent of the condition and the latter, through radio, will then instruct the "piado" how to conduct the fishing operations.

The payment of respondents' wages based on the percentage share of the fish catch falls within the scope and meaning of the term “wage” as defined under Article 97(f) of the Labor Code

Petitioner wielded the power of dismissal over respondents when he dismissed them after they refused to sign the joint fishing venture agreement.

The primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer.

There is a direct linkage or causal connection between the nature of petitioners' (now respondents) work visa- vis MGTR's line of business. In fact, MGTR's line of business could not possibly exist, let alone flourish without people like the fishermen crew members of its fishing vessels who actually undertook the fishing activities in the high seas.

Considering that respondents were petitioner's regular employees, the latter's act of asking them to sign the joint fishing venture agreement which provides that the venture shall be for a period of one year from the date of the agreement, subject to renewal upon mutual agreement of the parties, and may be pre-terminated by any of the parties before the expiration of the one-year period, is violative of the former's security of tenure. And respondents' termination based on their refusal to sign the same, not being shown to be one of those just causes for termination under Article 282, is, therefore, illegal.

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