The Supreme Court granted the petition of 11 workers and declared that they were illegally dismissed by respondent Rowena Osada, doing business under the names T. Osada Logistics and Services and Osada Transport. The Court reversed the rulings of the Court of Appeals (CA) and the National Labor Relations Commission (NLRC), which had overturned an earlier decision favoring the workers.
The Case
The petitioners were engaged to perform delivery services in connection with the online retail operations of Lazada E-Services Philippines, Inc. (Lazada). On April 18, 2018, except for Jovy, the petitioners were allegedly hired by respondent T. Osada Logistics and Services (T. Logistics), a sole proprietorship registered on April 13, 2018 in the name of Rowena Osada (Rowena) and engaged in delivery and transport services, to work as delivery riders for T. Logistics' Lazada account.
Each rider used his own motorcycle to pick up merchandise from Lazada's warehouse and deliver packages to Lazada's customers. The petitioners said they were directly under the supervision and control of T. Logistics' Operations Manager Ruel G. Pullan (Ruel), and were paid per delivery or according to a Rate Matrix set by T. Logistics.
Jovy's engagement began earlier and involved Osada Transport, a separate sole proprietorship registered in Rowena's name and engaged in taxi operations. In August 2017, Jovy worked as a stay-in taxi driver on a boundary system, and by January 2018 was assigned as dispatcher/collector for the taxi operations. When Rowena obtained the Lazada delivery account for T. Logistics, Jovy helped recruit other petitioners as riders.
The petitioners allege that on or about May 4, 2018, Ruel told the riders to stop reporting for work effective May 7, 2018. Jovy asserts he was summarily dismissed on May 28, 2018 through a verbal instruction. They said they were given no further work, no written notices, and no valid reason.
The respondents denied that any illegal dismissal took place, characterizing the rider-petitioners as independent contractors. As to Jovy, they claimed he walked out and stopped coming to work out of resentment after a management meeting on May 12, 2018.
The Issue
The Court addressed whether the petitioners were employees of the respondents and whether they were illegally dismissed without just cause and without due process.
The Ruling
The Court declared that the petitioners were illegally dismissed by respondent Rowena Osada, doing business under the names T. Osada Logistics and Services and Osada Transport.
In its disposition, the Court ordered: "ACCORDINGLY, the Petition for Review on Certiorari is GRANTED. The Decision, dated August 16, 2022, and the Resolution, dated January 24, 2023, of the Court of Appeals in CA-G.R. SP No. 165232 are REVERSED."
Rowena Osada was ordered to pay the petitioners separation pay in lieu of reinstatement, equivalent to one month's salary for every year of service, with a fraction of at least six months considered as one whole year; provided, that petitioners who rendered less than six months of service shall receive separation pay equivalent to one-half month's salary. She was also ordered to pay full backwages, inclusive of regular allowances and benefits, and attorney's fees equivalent to 10% of the total monetary award.
All monetary awards shall earn legal interest at 6% per annum from the date of finality of the Decision until full payment. The records were remanded to the Labor Arbiter for immediate computation of the awards. All other claims of the petitioners were denied for lack of merit.
By the Numbers
- Backwages computed from May 7, 2018 for the rider-petitioners and May 28, 2018 for Jovy R. Calderon, up to finality of the Decision
- T. Logistics registered on April 13, 2018
- Petitioners allegedly hired on April 18, 2018
- Separation pay: one month's salary per year of service; one-half month's salary for those with less than six months of service
- Attorney's fees: 10% of the total monetary award
- Legal interest: 6% per annum from finality until full payment
- Computation to be completed within 30 days from the Labor Arbiter's receipt of the Decision
- 11 petitioners named in the disposition
The Court's Reasoning
The Court emphasized that the right of workers to security of tenure is a fundamental guarantee enshrined in the Constitution and labor laws. It stated that employers who attempt to sidestep this guarantee by misclassifying employees as contractors or by dispensing with them without cause or process do so at their peril.
The Court found that the petitioners were rank-and-file workers, delivery riders, who sought only to earn an honest living under the direction of the respondents, and were deprived of their livelihood without any semblance of due process. It commended the Labor Arbiter's initial discernment of the petitioners' plight and reversed the rulings of the NLRC and CA that failed to give full effect to the evidence of illegal dismissal.
The Court noted that expediency or personal pique can never justify the illegal dismissal of employees. It directed that the judgment be satisfied without delay, subject to the applicable rules on execution and on the liability of community or conjugal partnership property.
Source: Supreme Court Decision in G.R. No. 265600, penned by Associate Justice Lomena D. Singh.
This report summarizes a public Supreme Court decision and is not legal advice.