RICHARD N.

WAHING,
RONALD L. CALAGO AND
PABLO P. MAIT,
PETITIONERS,
VS. SPOUSES AMADOR
DAGUIO AND ESING
DAGUIO, RESPONDENTS
G.R. No. 219755
April 18, 2022
Facts of the Case:

This Court resolves a Petition for Review on Certiorari

assailing the Court of Appeals Decision and Resolution setting
aside the National Labor Relations Commission's Decision to
remand an illegal dismissal complaint for further reception of
evidence. Instead of ruling on the procedural issues raised
before it, the Court of Appeals decided the case on the merits
and dismissed the complaint for illegal dismissal upon finding
that there was no employer-employee relationship between the
parties.
Facts of the Case:

• As rubber tree tappers, Richard

N. Wahing (Wahing), Ronald L.
Calago (Calago), and Pablo P.
Mait (Mait) (collectively, Wahing
et al.) were placed under the
operational and economic control
of Amador Daguio and Esing
Daguio (the Daguio Spouses).
Facts of the Case:

• Wahing et al. worked as rubber

tree tappers for the Daguio
Spouses until Mait was ordered
to "stop tapping the rubber tree"
on October 15, 2006. On
February 6, 2007, Wahing and
Calago were similarly ordered to
stop working on the Daguio
Spouses' trees.
Facts of the Case:

• Wahing et al. then filed a complaint

for illegal dismissal, reinstatement
or separation pay, underpayment of
wages, labor standards benefits,
damages, and attorney's fees.
However, the Labor Arbiter
dismissed the complaint "after
finding that the relationship
between [the parties] was that of a
landlord and tenant and not of
employer-employee."
Facts of the Case:

• Wahing et al. appealed the Labor

Arbiter's ruling before the
National Labor Relations
Commission which then vacated
and set aside their complaint's
dismissal and ordered the Labor
Arbiter to decide the complaint
on the merits.
Facts of the Case:
September 28, 2010
When the Labor Arbiter ordered the parties
to submit their respective position papers,
only Wahing et al. were able to file theirs,
despite the Daguio Spouses being sent
several notices to do so. Thus, the Labor
Arbiter's ruled that Wahing et al. were
illegally dismissed from employment. The
Labor Arbiter then ordered the Daguio
Spouses to pay Wahing et al. a total
monetary award of ₱777,090.52.
Facts of the Case:

Daguio Spouses appealed the

Labor Arbiter's findings to the
National Labor Relations
Commission, arguing that they
neither received the Labor
Arbiter's Orders to submit their
position paper nor Wahing et al.'s
position paper.
Facts of the Case:

The Daguio Spouses also moved to

have their appeal bond reduced, which
was partially granted, subject to an
additional posting of P50,000.00 in cash
or surety, as appeal bond. In view of the
Daguio Spouses' appeal, the National
Labor Relations Commission issued an
August 24, 2011 Resolution, ordering
the case remanded once more for
reception of the Daguio Spouses'
evidence.
Facts of the Case:

Wahing et al. then moved for the

reconsideration of the August 24,
2011 Resolution, but were denied
relief.

Thus, they filed a Petition for

Certiorari before the Court of
Appeals.
Facts of the Case:

Instead of ruling on the procedural

defects raised in the Petition for
Certiorari, the Court of Appeals
decided the case on the merits
because the case had already
been remanded multiple times and
the parties' evidence had already
been attached to the pleadings
made part of the record.
Facts of the Case:

CA found that the Daguio

Spouses' evidence adequately
refuted the existence of an
employer-employee relationship,
while Wahing et al. merely relied
on procedural technicalities and
"self-serving allegations."
Facts of the Case:

Since Wahing et al. failed to

overcome their burden of proving
the existence of the employer-
employee relationship, the Court
of Appeals found that they could
not have been illegally dismissed
from employment.
Facts of the Case:

Wahing et al. then moved for the

reconsideration of the Court of Appeals'
Decision but were again denied relief.

Thus, Wahing et al. filed a Petition for

Review on Certiorari before this Court,
which argues that the Court of Appeals
committed grave error when it ruled on
the merits of the case despite these
issues never being raised in their
Petition for Certiorari.
Issue:

WON the Court of Appeals gravely

erred in resolving issues which
were not raised on appeal by the
petitioners. Subsumed under this
is the issue of WON petitioners
were respondents' employees.
 I

The Court of Appeals has the authority to review and

decide the case on the merits, consistent with the principle
of judicial economy and in avoidance of "dispensing
piecemeal justice.
 I

As a general rule, only matters assigned as errors in the appeal may

be resolved. Rule 51, Section 8 of the Rules of Court provides:

SECTION 8. Questions that May Be Decided. — No error which

does not affect the jurisdiction over the subject matter or the validity
of the judgment appealed from or the proceedings therein will be
considered unless stated in the assignment of errors, or closely
related to or dependent on an assigned error and properly argued in
the brief, save as the court may pass upon plain errors and clerical
errors.
 I

The Court of Appeals has the discretion lo consider the

issue and address the matter where its ruling is necessary
(a) to arrive at a just and complete resolution of the case;
(b) to serve the interest of justice; or (c) to avoid
dispensing piecemeal justice.
 I

In labor cases, rules of procedure should not be applied in a

very rigid and technical sense. They are merely tools designed
to facilitate the attainment of justice, and where their strict
application would result in the frustration rather than promotion
of substantial justice, technicalities must be avoided.
Technicalities should not be permitted to stand in the way of
equitably and completely resolving the rights and obligations of
the parties. Where the ends of substantial justice shall be
better served, the application of technical rules of procedure
may be relaxed.3
 II

As to petitioners' contentions regarding the posting of an

appeal bond, Tres Reyes also deems this requirement as
a procedural matter that may be relaxed in pursuit of
substantial justice.
 II

According to Labor Code and he NLRC Rules of

Procedure there is legislative and administrative intent to
strictly apply the appeal bond requirement, and the Court
should give utmost regard to this intention.
 II

“To assure the workers that if they finally prevail in the

case[,] the monetary award will be given to them upon the
dismissal of the employer's appeal [and] is further meant
to discourage employers from using the appeal to delay or
evade payment of their obligations to the employees."
 II

However, the Court, in special and justified circumstances,

has relaxed the requirement of posting a supersedeas
bond for the perfection of an appeal on technical
considerations to give way to equity and justice.
 II

Under Section 6 of Rule VI of the 2005 NLRC Revised

Rules of Procedure, the reduction of the appeal bond is
allowed, subject to the following conditions: (1) the motion
to reduce the bond shall be based on meritorious grounds;
and (2) a reasonable amount in relation to the monetary
award is posted by the appellant. Compliance with these
two conditions will stop the running of the period to perfect
an appeal.
 III

Contrary to the Court of Appeals' findings, respondents

employed petitioners as farm workers and are, thus,
subject to the rules governing an employer-employee
relationship.
 III

The four elements of an employer-employee relationship,

which have since been adopted in subsequent
jurisprudence, are (1) the power to hire; (2) the payment
of wages; (3) the power to dismiss; and (4) the power to
control. The power to control is the most important of the
four elements
 III

Both parties submitted testimonial evidence in support of

their respective positions on the existence of the
employer-employee relationship. Petitioners submitted
testimonies from their co-workers detailing: (1) their daily
wages for their required hours of work; (2) respondents'
constant supervision of their workers during work hours;
and (3) the possibility of dismissal from work for failing to
serve three consecutive work days.
 III

On the other hand, respondents submitted the testimonies

of their "former caretaker," a local rubber merchant, and
several local government officials, who all testified that
petitioners "only share[d] in the proceeds" of rubber sales
and were not engaged as agricultural employees.
 III

From the foregoing, there is sufficient corroborating

testimony to support petitioners' claim that they served as
employees on respondents' rubber plantation. Testimonies
from petitioners' colleagues, who were similarly asked to
leave the plantation, illustrate that they: (1) were required
to work at set hours per day; (2) were paid a set rate per
day of work; (3) worked under the respondents' constant
supervision; and (4) could be dismissed for violating the
work standards set by respondents.
 III

As to the element of control, rubber tapping does not lend

itself to the usual standard of assessing an employer's
control over the "means and methods" of an employee's
work.
 III

Two-tiered test (Employer Control)

(1) the putative employer's power to control the employee

with respect to the means and methods by which the work
is to be accomplished; and (2) the underlying economic
realities of the activity or relationship.
 III

Economic Reality Test

Thus, the determination of the relationship between employer and

employee depends upon the circumstances of the whole economic
activity, such as:

(1) the extent to which the services performed are an integral part of the
employer's business;

(2) the extent of the worker's investment in equipment and facilities;

(3) the nature and degree of control exercised by the employer;

(4) the worker's opportunity for profit and loss;

 III

Economic Reality Test

Thus, the determination of the relationship between employer and employee

depends upon the circumstances of the whole economic activity, such as:

5) the amount of initiative, skill, judgment or foresight required for the success of
the claimed independent enterprise;

6) the permanency and duration of the relationship between the worker and the
employer; and

7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business.
 III

The benchmark of economic reality in analyzing possible

employment relationships for purposes of the Labor Code
ought to be the economic dependence of the worker on
his employer.
 III

Jurisprudence states that "[w]hen the evidence of the

employer and the employee are in equipoise, doubts are
resolved in favor of labor. This is in line with the policy of
the State to afford greater protection to labor.
 III

Article XIII, Section 3 of the 1987 Constitution guarantees the right of workers to security of
tenure. "One's employment, profession, trade or calling is a "'property right," of
which a worker may be deprived only upon compliance with due process
requirements:

It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII,
Sec. 3 of the New Constitution, Section 9, Article II of the 1973 Constitution). The
guarantee is an act of social justice. When a person has no property, his job may possibly
be his only possession or means of livelihood. Therefore, he should be protected against
any arbitrary deprivation of his job. Article 280 of the Labor Code has construed security of
tenure as meaning that "the employer shall not terminate the services of an employee
except for a just cause or when authorized by" the code. Dismissal is not justified for being
arbitrary where the workers were denied due process and a clear denial of due process, or
constitutional right must be safeguarded against at all times.
 III

Conformably, liberal construction of Labor Code

provisions in favor of workers is stipulated by Article 4 of
the Labor Code:

Art. 4. Construction in favor of labor. All doubts in the

implementation and interpretation of the provisions of this
Code, including its implementing rules and regulations,
shall be resolved in favor of labor.
 III

WHEREFORE, the Petition for Review on Certiorari is GRANTED.

The Court of Appeals' January 23, 2015 Decision, and its July 7,
2015 Resolution, are hereby REVERSED and SET ASIDE.

The September 28, 2010 Decision of the Labor Arbiter finding the
existence of the employer-employee relationship and petitioners'
illegal dismissal, and awarding back wages and other benefits is
hereby REINSTATED, subject to the possibility of reinstatement in
lieu of separation pay. Petitioners are likewise entitled to Attorney's
Fees at the rate of ten percent (10%) of the entire monetary award.
THAT’S ALL FOLKS!