G.R. No.

197899, March 06, 2017

JOAQUIN LU, Petitioner, v. TIRSO ENOPIA, ROBERTO ABANES,

ALEJANDRE BAGAS, SALVADOR BERNAL, SAMUEL CAHAYAG,
ALEJANDRO CAMPUGAN, RUPERTO CERNA, JR., REYNALDO CERNA,
PETER CERVANTES, LEONARDO CONDESTABLE, ROLANDO ESLOPOR,
ROLLY FERNANDEZ, EDDIE FLORES, ROLANDO FLORES, JUDITO
FUDOLIN, LEO GRAPANI, FELIX HUBAHIB, JERRY JUAGPAO, MARCIANO
LANUTAN, JOVENTINO MATOBATO, ALFREDO MONIVA, VICTORIANO
ORTIZ, JR., RENALDO PIALAN, ALFREDO PRUCIA, PONCIANO REANDO,
HERMENIO REMEGIO, DEMETRIO RUAYA, EDGARDO RUSIANA,
NESTOR SALILI, VICENTE SASTRELLAS, ROMEO SUMAYANG, and
DESIDERIO TABAY, Respondents.

DECISION

PERALTA, J.:

Before us is a petition for review on certiorari filed by Joaquin Lu which seeks

to reverse and set aside the Decision1 dated October 22, 2010 and the
Resolution2 dated May 12, 2011, respectively, of the Court of Appeals issued
in CA-G.R. SP No. 55486-MIN.

The facts of the case, as stated by the Court of Appeals, are as follows:

Petitioners (now herein 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 the other hand, Lu alleged that the master fisherman (piado) Ruben Salili
informed him that petitioners still refused to sign the agreement and have
decided to return the vessel F/B MG-28.

On August 25, 1997, petitioners filed their complaint for illegal dismissal,
monetary claims and damages. Despite serious efforts made by Labor
Arbiter (LA) Arturo P. Aponesto, the case was not amicably settled, except for
the following matters: (1) Balansi 8 and 9; (2) 10% piado share; (3) sud-
anon refund; and (4) refund of payment of motorcycle in the amount of
P15,000.00. LA Aponesto further inhibited himself from the case out of
"delicadeza," and the case was raffled to LA Amado M. Solamo.

In their Position Paper, petitioners alleged that their refusal to sign the Joint
Venture Fishing Agreement is not a just cause for their termination.
Petitioners also asked for a refund of the amount of P8,700,407.70 that was
taken out of their 50% income share for the repair and maintenance of boat
as well as the purchase of fishing materials, as Lu should not benefit from
such deduction.

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, viz.: it was
the piado who hired petitioners; they were not paid wages but shares in the
catch, which they themselves determine; they were not subject to his
discipline; and respondent had no control over the day-to-day fishing
operations, although they stayed in contact through respondent's radio
operator or checker. Lu also claimed that petitioners should not be
reimbursed for their share in the expenses since it was their joint venture
that shouldered these expenses.3

On June 30, 1998, the LA rendered a Decision4 dismissing the case for lack of
merit finding that there was no employer-employee relationship existing
between petitioner and the respondents but a joint venture.

In so ruling, the LA found that: (1) respondents were not hired by petitioner
as the hiring was done by the piado or master fisherman; (2) the earnings of
the fishermen from the labor were in the form of wages they earned based
on their respective shares; (3) they were never disciplined nor sanctioned by
the petitioner; and, (4) the income-sharing and expense splitting was no
doubt a working set up in the nature of an industrial partnership. While
petitioner issued memos, orders and directions, however, those who were
related more on the aspect of management and supervision of activities after
the actual work was already done for purposes of order in hauling and
sorting of fishes, and thus, not in the nature of control as to the means and
method by which the actual fishing operations were conducted as the same
was left to the hands of the master fisherman.

The LA also ruled that the checker and the use of radio were for the purpose
of monitoring and supplying the logistics requirements of the fishermen while
in the sea; and that the checkers were also tasked to monitor the recording
of catches and ensure that the proper sharing system was implemented;
thus, all these did not mean supervision on how, when and where to fish.

Respondents appealed to the National Labor Relations Commission (NLRC),

which affirmed the LA Decision in its Resolution5 dated March 12, 1999.
Respondents' motion for reconsideration was denied in a Resolution 6 dated
July 9, 1999.

Respondents filed a petition for certiorari with the CA which dismissed7 the
same for having been filed beyond the 60-day reglementary period as
provided under Rule 65 of the Rules of Court, and that the sworn certification
of non-forum shopping was signed only by two (2) of the respondents who
had not shown any authority to sign in behalf of the other respondents. As
their motion for reconsideration was denied, they went to Us via a petition
for certiorari assailing the dismissal which We granted in a Resolution8 dated
July 31, 2006 and remanded the case to the CA for further proceedings.

Petitioner filed its Comment to the petition. The parties submitted their
respective memoranda as required by the CA.
On October 22, 2010, the CA rendered its assailed Decision reversing the
NLRC, the decretal portion of which reads as follows:

WHEREFORE, premises considered, the assailed March 12, 1999 Resolution

of public respondent National Labor Relations Commission (NLRC), Fifth
Division, Cagayan de Oro City, is hereby REVERSED and SET ASIDE, and a
new one is entered.

Thus, private respondent Mommy Gina Tuna Resources (MGTR) thru its sole
proprietor/general manager, Joaquin T. Lu (Lu), is hereby ORDERED to pay
each of the petitioners, namely, TIRSO ENOPIA, ROBERTO ABANES,
ALEJANDRE BAGAS, SALVADOR BERNAL, SAMUEL CAHAYAG, ALEJANDRO
CAMPUNGAN, RUPERTO CERNA, JR., REYNALDO CERNA, PETER CERVANTES,
LEONARDO CONDESTABLE, ROLANDO ESLOPOR, ROLLY FERNANDEZ, EDDIE
FLORES, ROLANDO FLORES, JUDITO FUDOLIN, LEO GRAPANI, FELIX HUBAHIB,
JERRY JUAGPAO, MARCIANO LANUTAN, JOVENTINO MATOBATO, ALFREDO
MONIVA, VICTORIANO ORTIZ, JR., RENALDO PIALAN, SEVERO PIALAN,
ALFREDO PRUCIA, POCIANO REANDO, HERMENIO REMEGIO, DEMETRIO
RUAYA, EDGARDO RUSIANA, NESTOR SALILI, RICHARD SALILI, SAMUEL SALILI,
VICENTE SASTRELLAS, ROMEO SUMAYANG and DESIDERIO TABAY the
following:

(1) SEPARATION PAY (in lieu of the supposed reinstatement) equivalent to one
(1) month pay for every year of service reckoned from the very moment each
petitioner was hired as fishermen-crew member of F/B MG-28 by MGTR until
the finality of this judgment. A fraction of at least six (6) months shall be
considered one (1) whole year. Any fraction below six months shall be
paid pro rata;

(2) FULL BACKWAGES (inclusive of all allowances and other benefits required
by law or their monetary equivalent) computed from the time they were
dismissed from employment on August 18, 1997 until finality of this
Judgment;

(3) EXEMPLARY DAMAGES in the sum of Fifty Thousand Pesos (P50,000.00);

(4) ATTORNEY'S FEES equivalent to 10% of the total monetary award.

Considering that a person's income or earning is his "lifeblood," so to

speak, i.e., equivalent to life itself, this Decision is deemed immediately
executory pending appealshould MGTR decide to elevate this case to the
Supreme Court.

Let this case be referred back to the Office of the Labor Arbiter for proper
computation of the awards.9

The CA found that petitioner exercised control over respondents based on

the following: (1) respondents were the fishermen crew members of
petitioner's fishing vessel, thus, their services to the latter were so
indispensable and necessary that without them, petitioner's deep-sea fishing
industry would not have come to existence much less fruition; (2) he had
control over the entire fishing operations undertaken by the respondents
through the master fisherman (piado) and the assistant master fisherman
(assistant piado) employed by him; (3) respondents were paid based on a
percentage share of the fish catch did not in any way affect their regular
employment status; and (4) petitioner had already invested millions of pesos
in its deep-sea fishing industry, hence, it is highly improbable that he had no
control over respondents' fishing operations.

Petitioner's motion for reconsideration was denied by the CA in its Resolution

dated May 12, 2011.

Aggrieved, petitioner filed the instant petition for review on certiorari citing
the following as reasons for granting the same, to wit:

THE HONORABLE COURT OF APPEALS RENDERED THE ASSAILED DECISION

CONTRARY TO LAW AND LOGIC BY CITING THE ABSENCE OF PROOF OF
REQUISITES OF A VALID DISMISSAL AS BASIS FOR CONCLUDING THAT THE
NLRC GRAVELY ABUSED ITS DISCRETION.

II

THE HONORABLE COURT OF APPEALS EXCEEDED ITS JURISDICTION BY

TREATING RESPONDENTS' PETITION FOR CERTIORARI UNDER RULE 65 AS AN
ORDINARY APPEAL, AND BY INSISTING ON ITS OWN EVALUATION OF THE
EVIDENCE.

III

THE HONORABLE COURT OF APPEALS RENDERED THE DECISION DATED 22

OCTOBER 2010 CONTRARY TO LAW AND THE EVIDENCE ON RECORD.

IV

THE HONORABLE COURT OF APPEALS HAS DEPARTED FROM THE ACCEPTED

AND USUAL COURSE OF JUDICIAL PROCEEDINGS BY MAKING ITS ASSAILED
DECISION IMMEDIATELY EXECUTORY PENDING APPEAL IN SPITE OF THE FACT
THAT RESPONDENTS DID NOT ASK FOR IMMEDIATE PAYMENT OF SEPARATION
PAY AND OTHER CLAIMS, AND DESPITE THE CLAIM OF RESPONDENTS THAT
MOST OF THEM ARE CURRENTLY EMPLOYED IN OTHER DEEP-SEA FISHING
COMPANIES.10

Petitioner contends that no grave abuse of discretion can be attributed to the

NLRC's finding affirming that of the LA that the arrangement between
petitioner and respondents was a joint venture partnership; and that the CA,
in assuming the role of an appellate body, had re-examined the facts and re-
evaluated the evidence thereby treating the case as an appeal instead of an
original action for certiorari under Rule 65.

We are not persuaded.

In Prince Transport, Inc. v. Garcia,11 We held:

The power of the CA to review NLRC decisions via a petition

for certiorari under Rule 65 of the Rules of Court has been settled as early as
this Court's decision in St. Martin Funeral Homes v. NLRC. In said case, the
Court held that the proper vehicle for such review is a special civil action
for certiorari under Rule 65 of the said Rules, and that the case should be
filed with the CA in strict observance of the doctrine of hierarchy of courts.
Moreover, it is already settled that under Section 9 of Batas Pambansa Blg.
129, as amended by Republic Act No. 7902, the CA, pursuant to the exercise
of its original jurisdiction over petitions for certiorari, is specifically given the
power to pass upon the evidence, if and when necessary, to resolve factual
issues. Section 9 clearly states:

xxx

The Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings. x
x x.

However, equally settled is the rule that factual findings of labor officials,
who are deemed to have acquired expertise in matters within their
jurisdiction, are generally accorded not only respect but even finality by the
courts when supported by substantial evidence, i.e., the amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion. But these findings are not infallible. When there is a showing that
they were arrived at arbitrarily or in disregard of the evidence on record,
they may be examined by the courts. The CA can grant the petition
for certiorari if it finds that the NLRC, in its assailed decision or resolution,
made a factual finding not supported by substantial evidence. It is within the
jurisdiction of the CA, whose jurisdiction over labor cases has been expanded
to review the findings of the NLRC.12

Here, the LA's factual findings was affirmed by the NLRC, however, the CA
found that the latter's resolution did not critically examine the facts and
rationally assess the evidence on hand, and thus found that the NLRC
gravely abused its discretion when it sustained the LA's decision dismissing
respondents' complaint for illegal dismissal on the ground of lack of merit.
The judicial function of the CA in the exercise of its certiorari jurisdiction over
the NLRC extends to the careful review of the NLRC's evaluation of the
evidence because the factual findings of the NLRC are accorded great
respect and finality only when they rest on substantial
evidence.13 Accordingly, the CA is not to be restrained from revising or
correcting such factual findings whenever warranted by the circumstances
simply because the NLRC is not infallible. Indeed, to deny to the CA this
power is to diminish its corrective jurisdiction through the writ of certiorari.14

The main issue for resolution is whether or not an employer-employee

relationship existed between petitioner and respondents.

At the outset, We reiterate the doctrine that the existence of an employer-

employee relationship is ultimately a question of fact. Generally, We do not
review errors that raise factual questions. However, when there is a conflict
among the factual findings of the antecedent deciding bodies like the LA, the
NLRC and the CA, it is proper, in the exercise of Our equity jurisdiction, to
review and re-evaluate the factual issues and to look into the records of the
case and re-examine the questioned findings. In dealing with factual issues
in labor cases, substantial evidence or that amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion is
sufficient. 15

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.16 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.17

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. We have gone over these printouts and found
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.18

Moreover, the records show that the 4% backing incentive fee which was
divided among the fishermen engaged in the fishing operations approved by
petitioner was paid to respondents after deducting the latter's
respective vale or cash advance.19 Notably, even the piado's name was
written in the backing incentive fee sheet with the corresponding vale which
was deducted from his incentive fee. If indeed a joint venture was agreed
upon between petitioner and respondents, why would these fishermen obtain
vale or cash advance from petitioner and not from the piado who allegedly
hired and had control over them.

It was established that petitioner exercised control over respondents. 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. 20

Petitioner admitted in his pleadings that he had contact with respondents at

sea via the former's radio operator and their checker. He claimed that the
use of the radio was only for the purpose of receiving requisitions for the
needs of the fishermen in the high seas and to receive reports of fish catch
so that they can then send service boats to haul the same. However, such
communication would establish that he was constantly monitoring or
checking the progress of respondents' fishing operations throughout the
duration thereof, which showed their control and supervision over
respondents' activities. Consequently, We give more credence to
respondents' allegations in their petition filed with the CA on how such
control was exercised, to wit:

The private respondent (petitioner) controls the entire fishing operations. For
each mother fishing boat, private respondent assigned a master fisherman
(piado) and assistant master fisherman (assistant piado), who every now and
then supervise the fishing operations. Private respondent also assigned a
checker and assistant checker based on the office to monitor and contact
every now and then the crew at sea through radio. The checker and assistant
checker advised then the private respondent of the condition. Based on the
report of the checker, the private respondent, through radio, will then
instruct the "piado" how to conduct the fishing operations.21
Such allegations are more in consonance with the fact that, as the CA found,
MGTR had already invested millions of pesos in its deep-sea fishing industry.

The payment of respondents' wages based on the percentage share of the

fish catch would not be sufficient to negate the employer-employee
relationship existing between them. As held in Ruga v. NLRC:22

x x x [I]t must be noted that petitioners received compensation on a

percentage commission based on the gross sale of the fish-catch, i.e., 13% of
the proceeds of the sale if the total proceeds exceeded the cost of the crude
oil consumed during the fishing trip, otherwise, only 10% of the proceeds of
the sale. Such compensation falls within the scope and meaning of the term
"wage" as defined under Article 97(f) of the Labor Code, thus:

(f) "Wage" paid to any employee shall mean the remuneration or earnings,
however designated, capable of being expressed in terms of money, whether
fixed or ascertained on a time, task, piece or commission basis, or other
method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work
done or to be done, or for services rendered or to be rendered, and included
the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to
the employee. x x x23

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.24Respondents' jobs as
fishermen-crew members of F/B MG 28 were directly related and necessary
to petitioner's deep-sea fishing business and they had been performing their
job for more than one year. We quote with approval what the CA said, to wit:

Indeed, it is not difficult to see the 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.
Petitioners' services to MGTR are so indispensable and necessary that
without them MGTR's deep-sea fishing industry would not have come to
existence, much less fruition. Thus, We do not see any reason why the ruling
of the Supreme Court in Ruga v. National Labor Relations Commission should
not apply squarely to the instant case, viz.:

x x x The hiring of petitioners to perform work which is necessary or

desirable in the usual business or trade of private respondent x x x [qualifies]
them as regular employees within the meaning of Article 28025 of the Labor
Code as they were indeed engaged to perform activities usually necessary or
desirable in the usual fishing business or occupation of private respondent.26

As respondents were petitioner's regular employees, they are entitled to

security of tenure under Section 3,27 Article XIII of the 1987 Constitution. It is
also provided under Article 279 of the Labor Code, that the right to security
of tenure guarantees the right of employees to continue in their employment
absent a just or authorized cause for termination. 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 282,28 is, therefore, illegal.

An employee who is unjustly dismissed from work shall be entitled to

reinstatement without loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.29

Respondents who were unjustly dismissed from work are entitled to

reinstatement and backwages, among others. However, We agree with the
CA that since most (if not all) of the respondents are already employed in
different deep-sea fishing companies, and considering the strained relations
between MGTR and the respondents, reinstatement is no longer viable. Thus,
the CA correctly ordered the payment to each respondent his separation pay
equivalent to one month for every year of service reckoned from the time he
was hired as fishermen-crew member of F/B MG-28 by MGTR until the finality
of this judgment.

The CA correctly found that respondents are entitled to the payment of

backwages from the time they were dismissed until the finality of this
decision.

The CA's award of exemplary damages to each respondent is likewise

affirmed. Exemplary damages are granted by way of example or correction
for the public good if the employer acted in a wanton, fraudulent, reckless,
oppressive or malevolent manners.30

We also agree with the CA that respondents are entitled to attorney's fees in
the amount of 10% of the total monetary award. It is settled that where an
employee was forced to litigate and, thus, incur expenses to protect his
rights and interest, the award of attorney's fees is legally and morally
justifiable.31

The legal interest shall be imposed on the monetary awards herein granted
at the rate of six percent (6%) per annum from the finality of this judgment
until fully paid.32

Petitioner's contention that there is no justification to incorporate in the CA

decision the immediate execution pending appeal of its decision is not
persuasive. The petition for certiorari filed with the CA contained a general
prayer for such other relief and remedies just and equitable under the
premises. And this general prayer is broad enough to justify extension of a
remedy different from or together with the specific remedy sought. 33 Indeed,
a court may grant relief to a party, even if the party awarded did not pray for
it in his pleadings.34

WHEREFORE, the petition for review on certiorari is DENIED. The Decision

dated October 22, 2010 and the Resolution dated May 12, 2011 of the Court
of Appeals in CA-G.R. SP No. 55486-MIN are hereby AFFIRMED. The
monetary awards which are herein granted shall earn legal interest at the
rate of six percent (6%) per annum from the date of the finality of this
Decision until fully paid.

SO ORDERED.