Republic of the Philippines

Department of Labor and Employment

NATIONAL LABOR RELATIONS COMMISSION
National Capital Region
Quezon City

____ DIVISION

IROSE T. MALUNHAO, RAYMART A.

BONSATO, FE C. EIMAN, HELEN D.
DELA VEGA, ELVIE I. AGSAULIO,
RONALYN C. MANGUBAT, JEZA R.
PEPITO, PILIPINA E. BRIOL, and
OMEGA N. BOLAÑOS,
Complainants-Appellants,

- versus - NLRC-NCR Case No. 05-08766-18

NLRC LAC NO._____________________

SURGILINK ENTERPRISES AND

PHARMACY/JOYCE ANN MEDINA
LOPEZ,
Respondents-Appellees.
x-------------------------------------------------------x

MEMORANDUM OF APPEAL

COMPLAINANTS-APPELLANTS, by counsel, to this Honorable

Commission, most respectfully appeal from the Decision, dated 30 October
2018, rendered by Honorable Labor Arbiter Rommel R. Veluz, copy of
which was received by the complainants-appellants, through counsel, on 09
November 2018. The dispositive portion of the assailed Decision reads:

“WHEREFORE, there being no employer-employee relationship

between the Respondent and the Complainants, the instant case is
hereby DISMISSED for lack of jurisdiction.

SO ORDERED.

Quezon City, Philippines, 30 October 2018.”

 THE CASE

This is a case for UNFAIR LABOR PRACTICE (ULP) due to union

busting and illegal closure; ILLEGAL DISMISSAL; UNDERPAYMENT
of salary/wages and overtime pay; NON-PAYMENT of holiday pay,
premiums on holiday and rest days, service incentive leave pay (SILP), night
shift differential, 13th month pay and ECOLA; MORAL AND
EXEMPLARY DAMAGES; ATTORNEY’S FEES; and PAYMENT OF
LITIGATION AND THE LIKE EXPENSES, including cost of the suit,
filed by herein complainants-appellants against herein respondents-
appellees.

As reliefs, complainants-appellants seek for their immediate

reinstatement to their former positions without loss of seniority rights and
other privileges under the law and the payment of their full back wages,
inclusive of allowances, and to other benefits or their monetary equivalent,
computed from the time their compensations were withheld from them up to
their actual reinstatement.

Furthermore, complainants-appellants seek that they will be

compensated for other money claims, moral and exemplary damages, ten
percent (10%) attorney’s fees, computed from the total monetary award, and
other related litigation costs and expenses.

TIMELINESS OF THE APPEAL

On 09 November 2018, complainants-appellants received, through

counsel, a copy of the assailed Decision. They have a period of ten (10) days
from notice within which to interpose their objections thereto by way of an
Appeal. Hence, they have until 19 November 2018 within which to submit
their Memorandum of Appeal. Therefore, the filing of this Memorandum of
Appeal, on or before 19 November 2018, is well within the ten (10)-day
period prescribed by the 2011 NLRC Rules of Procedure.

THE PARTIES

Complainants-appellants IROSE T. MALUNHAO, RAYMART A.

BONSATO, FE C. EIMAN, HELEN D. DELA VEGA, ELVIE I.
AGSAULIO, RONALYN C. MANGUBAT, JEZA R. PEPITO,
PILIPINA E. BRIOL, and OMEGA N. BOLAÑOS are regular employees
of respondent-appellee SURGILINK ENTERPRISES AND

Page 2 of 23
PHARMACY. They may be served with summonses and other legal
processes, through the undersigned counsel, at Room 206, Jiao Bldg. No. 2
Timog Avenue, Quezon City.

Respondent-appellee SURGILINK ENTERPRISES AND

PHARMACY, upon the other hand, is a business enterprise operating under
and by virtue of Philippine laws while respondent-appellee JOYCE ANN
MEDINA LOPEZ is the owner/manager of the respondent company and
the person primarily liable to the pitiless dismissal of herein complainants-
appellants. They may be served with summonses and other legal processes at
1658 Rizal Avenue, Sta Cruz, Manila NCR 1000 and/or 1748 Rizal Avenue,
Brgy. 337, Zone 034, Sta. Cruz, Manila 1000 (in front of Department of
Health).

FACTS OF THE CASE

1. Complainants-appellants IROSE T. MALUNHAO,

RAYMART A. BONSATO, FE C. EIMAN, HELEN D. DELA VEGA,
ELVIE I. AGSAULIO, RONALYN C. MANGUBAT, JEZA R. PEPITO,
PILIPINA E. BRIOL, and OMEGA N. BOLAÑOS are regular employees
of respondent-appellee Surgilink Enterprises and Pharmacy. They were
engaged to perform works which are usually necessary or desirable in the
usual trade or business of respondent-appellee Surgilink Enterprises and
Pharmacy, an enterprise engaged in the trade and sale of pharmacy products.

2. The complete facts and circumstances of this case were clearly

and concisely narrated in complainants-appellants’ Pinagsama-samang
Sinumpaang Salaysay which was attached to, and made an integral part of,
their Position Paper as Annex “A”, and hereunder quoted for ready
reference, to wit:

“KAMI, sina IROSE T. MALUNHAO, RAYMART A.

BONSATO, FE C. EIMAN, HELEN D. DELA VEGA, ELVIE I.
AGSAULIO, RONALYN C. MANGUBAT, JEZA R. PEPITO,
PILIPINA E. BRIOL, at OMEGA N. BOLAÑOS, matapos
manumpa alinsunod sa ipinag-uutos ng batas, ay kusang-loob at
malayang nagpapahayag na:

(1) IROSE T. MALUNHAO

Ako po si IROSE T. MALUNHAO, Filipino, nasa hustong

gulang, at naninirahan sa #15 Int. 1 Nadurata St., 4th Avenue,
Grace Park, Caloocan City. Ako po ay nagsimulang mag-trabaho
sa Surgilink Pharmacy noong ika-23 ng Pebrero 2008 bilang

Page 3 of 23
isang Pharmacy Assistant. Ang aking sweldo sa isang araw ay
P230.00 kada araw noon taong 2008; P300.00 noong 2010;
P350.00 noong 2012; P385.00 taong 2014; P400.00 taong 2015
at naging P430.00 noong 2017-2018;

(2) RAYMART A. BONSATO

Ako po si RAYMART A. BONSATO, Filipino, nasa hustong

gulang, at naninirahan sa 1409 Kalimbas St., Sta. Cruz, Manila.
Ako po ay nagsimulang mag-trabaho sa Surgilink Pharmacy
noong ika-19 ng Hunyo 2014 bilang isang Helper/Sales Staff. Ang
aking sweldo sa isang araw ay P180.00 noong 2014; taong 2015
naging P230.00; pagkaraan ng anim (6) na buwan, P250.00;
taong 2016 naging P300.00; anim (6) na buwan ulit, P350.00;
taong 2017 naging P400.00 at sa kasalukuyan ay P410.00;

(3) FE C. EIMAN

Ako po si FE C. EIMAN, Filipino, nasa hustong gulang,

nakatira sa 1422-A M. Natividad, Sta. Cruz, Manila, at nag-
tatrabaho sa Surgilink Pharmacy bilang Purchaser/Supervisor.
Nagsimula akong magtrabaho dito noong August 22, 2003 na may
sahod sa isang araw na Apatnaraang Piso (P400.00) at, sa
kasalukuyan, ito ay naging P575.00;

(4) HELEN D. DELA VEGA

Ako po si HELEN D. DELA VEGA, Filipino, nasa hustong

gulang at nakatira sa 1726 Oroquita St., Sta. Cruz, Manila.
Nagsimula po akong pumasok sa Surgilink Pharmacy noong May
2005 bilang isang Pharmacy Assistant at ang aking sahod sa
isang araw ay Isang Daan at Limapung Piso (P150.00). Sa
kasalukuyan, ang aking sahod sa isang araw ay Apatnaraan at
Limampung Piso (P450.00);

(5) ELVIE I. AGSAULIO

Ako po si ELVIE I. AGSAULIO, Filipino, nasa hustong gulang

at nakatira sa No. 71 Marcela Street, Maypajo, Caloocan City.
Nagsimula po akong pumasok sa Surgilink Pharmacy noong ika-1
ng Agosto 2006 bilang isang Pharmacy Assistant at ang aking
sahod sa isang araw ay Isang Daan at Walumpung Piso
(P180.00). Sa kasulukuyan ang aking sahod kada araw ay
P500.00;

Page 4 of 23
(6) RONALYN C. MANGUBAT

Ako po si RONALYN C. MANGUBAT, Filipino, nasa hustong

gulang at nakatira sa 1602 Sebastian St. Bagbaguin, Valenzuela
City. Nagsimula po akong pumasok sa Surgilink Pharmacy noong
ika-14 ng Enero 2015 bilang isang Pharmacy Assistant at ang
aking sahod sa isang araw ay P420.00;

(7) JEZA R. PEPITO

Ako po si JEZA R. PEPITO, Filipino, nasa hustong gulang at

naninirahan sa #3172 Pilar Street, Manuguit, Tondo Manila.
Nagsimula po akong pumasok sa Surgilink Pharmacy noong ika-
12 ng Septyembre 2011 bilang isang Pharmacy Assistant at ang
aking sahod sa isang araw ay Apatnaraan at Dalawampung Piso
(P420.00);

(8) PILIPINA E. BRIOL

Ako po si PILIPINA E. BRIOL, Filipino, nasa hustong gulang

at nakatira sa 156 Champaca St., Paliwas, Obando, Bulacan.
Nagsimula po akong pumasok sa Surgilink Pharmacy noong ika-5
ng Nobyembre 2000 bilang isang Supervisor at ang aking sahod
sa isang araw ay Apatnaraan at Walumpung Piso (P480.00);

(9) OMEGA N. BOLAÑOS

Ako po si OMEGA N. BOLAÑOS, Filipino, nasa hustong

gulang at nakatira sa 933 R. Papa St., Sampaloc, Manila.
Pumasok ako sa Surgilink Pharmacy noong Hunyo 2015 bilang
isang Pharmacy Assistant at ang aking sahod sa isang araw ay
Tatlongdaan at Animnapu’t Limang Piso (P365.00);

(10) PARA SA LAHAT

(a) Sa aming pagtatrabaho, mayroong mga panahon na

paghihigpit ang ginawa ng pamunuan ng Surgilink Pharmacy sa
amin. Halos araw-araw kaming pinag-iinitan dahil sinisingil sa
amin ang mga expired na produkto na mismong pinadala ng
kumpanya, pati ang nawawalang injectable ay isinisisi pa rin sa
amin. Kapag kami naman ay nale-late sa trabaho, sinisingil kami
ng kumpanya base sa oras ng aming pagkakahuli sa pagpasok;

Page 5 of 23
(b) May pangyayari pang naganap sa kumpanya noong
nakatanggap sila ng sulat galing Department of Labor and
Employment (DOLE). Upang magmukhang rehistrado ang
nasabing pharmacy, nagpadala sila ng agency (Job on Link) at
hinikayat kaming magsinungaling at pumirma sa nasabing sulat.
Dahil din dito, nag-iba ang shifting ng pasok ng kumpanya na
dating 3 shifts, ay naging 2 shifts na lamang;

(c) Bukod po sa wala sa minimum wage and sahod namin,

ang malupit pa nito ay wala kaming benepisyo natatangap sa
kumpanya tulad ng SSS, PhilHealth, PagIbig, Double pay, Sick
Leave, Maternity Leave, 13th month pay at Night Shift Differential.
Kinakaltasan din kami ng Isang Daang Piso (P100.00) para daw
sa Emergency Fund. Kapag sumapit na ang Emergency ay hindi
ito makukuha agad at kung makukuha man, ito ay mas mababa sa
aming ibinigay;

(d) Kung kaya’t, nagpasya kaming magkakasama na magtatag

ng UNYON upang igiit sa kumpanya ang pagtupad nila sa labor
standards at ipaglaban ang aming mga karapatan. Kami ay
sumapi sa labor federation na Kilusan ng mga Manggagawang
Katipunan (KMM-Katipunan) at binuo ang KMM-Surgilink
Enterprises and Pharmacy Chapter;

(e) At nang lumakas ang aming organisasyon, naging banta

ito laban sa mga malupit na namamahala sa loob ng pharmacy;

(f) Noong papasok na kami sa trabaho noong ika-30 ng Abril,

2018, nagulat na lamang kami na nakasarado na ang Pharmacy
at may karatulang nakalagay na “Close for Renovation”. Ang
masakit pa dito, hindi man lamang kami binigyan ng
impormasyon tungkol sa pagsasara ng botika. Kalaunan,
pinadalhan kami ng sulat ng kumpanya at sinasabing AWOL na
kami at nalugi na ang kumpanya;

(g) Isa lamang po ang nakikita naming dahilan ng pagtanggal

sa amin. Ito ay ang pagsama namin sa Kilusan ng mga
Manggagawang Makabayan-Katipunan;

(h) Malinaw po na ito ay isang Unfair Labor Practice (ULP).

Karapatan po ng mga manggagawa ang bumuo, sumuporta at
maging kasapi ng isang unyon para proteksyunan ang kanilang
mga karapatan. Ito po ay nakabatay sa ating Saligang Batas at
ganun din sa Batas Paggawa;

Page 6 of 23
 (i) Dahil dito, kami ay sama-samang dumiretso sa tangapan
ng DOLE para idulog ang aming mga hinaing at mabigyang
katarungan ang aming sinapit.

(j) Dahil po sa iligal na pagkakatanggal nila sa amin, kami

ay napilitang magsampa ng kaso sa National Labor Relations
Commission (NLRC) upang panagutin ang pamunuan ng
Surgilink Enterprises and Pharmacy sa kanilang mga iligal na
gawain laban sa kanilang mga manggagawa na katulad namin;

(k) Dahil din po sa biglaan at iligal na pagkakatanggal

(AWOL) sa amin sa trabaho, kami at ang aming mga pamilya ay
dumanas ng hindi birong paghihirap dahil sa kami lamang ang
inaasahan nila. Dumanas kami ng gutom, hindi mapagkatulog,
palaging balisa, takot, walang gana sa pagkain, kahihiyan at iba
pa;

(l) Dahil din po dito ay napilitan kaming kumuha ng serbisyo

ng isang abogado upang maayos at mahinusay na malitis ang
kasong ito;

(m) Ang biglaang pagkakatanggal sa amin sa aming mga

trabaho ay malinaw na isang pagmamani-obra upang makatakas
sa kanilang mga pananagutan;

(n) Hindi naging makatarungan ang pagtrato sa amin ng

pamunuan ng Surgilink Enterprises and Pharmacy. Ang
nangyaring paglabag sa aming mga karapatan, na kaakibat ang
matinding paghihirap ng aming mga pamilya, ay hindi dapat
katigan kung kaya’t lubusan ang aming pakikibaka upang
mabigyan ng tahasang kasagutan ang aming pagdadalamhati sa
kasalukuyan;

(o) Ginawa namin ang Pinagsama-samang Sinumpaang

Salaysay na ito upang ilahad ang paglabag ng Surgilink
Enterprises and Pharmacy at pamunuan nito sa aming mga
karapatan.”

3. Aggrieved by the irresponsible acts of the respondents-

appellees, complainants-appellants were constrained to file a case against the
former before the labor tribunal.

4. In their defense, respondents-appellees denied the existence of

an employer-employee relationship between them and the complainants-
Page 7 of 23
appellants. They claimed that the complainants-appellants are employees of
Job-On-Link Staffing Services (JOLSS, for brevity).

5. As proof thereof, they submitted, purportedly as evidence,

Identification Cards and the Project Based Contracts (Annexes “6-Series and
7-Series of the Respondents-appellees’ Position Paper). Apart from the
foregoing, there were no other evidence proffered by the respondents-
appellees proving the lawful existence of the alleged employer (JOLSS) of
the complainants-appellants.

6. The complainants-appellants, upon the other hand, submitted

photocopies of their ID cards showing the name of Surgilink Enterprises and
Pharmacy as the company they represent. As such, it is indubitable that they
are employees of Surgilink Enterprises and Pharmacy and not of any other
company as insisted by the respondents-appellees. The allegation that the
complainants-appellants are employees of JOLSS is a mere subterfuge to
preclude them from attaining security of tenure. JOLSS, if it indeed has an
agreement with Surgilink Enterprises and Pharmacy involving the
engagement of the complainants-appellants, is a mere labor-only contractor
which engagement is definitely proscribed by law.

7. Due to the failure of the parties to amicably resolve their issues

during the mandatory conference, both were directed to submit their
respective position papers and responsive pleadings. Both complied and,
thereafter, the case was submitted for decision.

8. On 30 October 2018, the assailed Decision was rendered.

Unfortunately, however, the Honorable Labor Arbiter a quo did not find
complainants-appellants to have been illegally dismissed.

9. The Honorable Labor Arbiter a quo ruled that there exists no

employer-employee relationship between respondent-appellee Surgilink
Enterprises and Pharmacy and the complainants-appellants. He did not
consider the IDs presented by the complainants-appellants as proofs of the
said relationship despite the fact that the latter performed the jobs of
Pharmacy Assistants and Sales Staff, among others, with Surgilink
Enterprises and Pharmacy.

10. It is beyond cavil that the tasks assigned to the complainants-

appellants are usually necessary, desirable, and directly related to the main
business of Surgilink Enterprises and Pharmacy, a business engaged in sale
of pharmacy products. They were performing their assigned tasks in the
company for more than one (1) year already when they were just unlawfully
disallowed to enter the respondents-appellees’ premises.
Page 8 of 23
 11. Clearly aggrieved, the complainants-appellants decide to
exercise prudence and act in elevating the case on appeal before the
Honorable National Labor Relations Commission.

12. Hence, this Memorandum of Appeal.

GROUNDS

I.

WITH ALL DUE RESPECT, THE HONORABLE

LABOR ARBITER A QUO SERIOUSLY AND
PALPABLY ERRED IN HOLDING THAT NO
EMPLOYER-EMPLOYEE RELATIONSHIP
EXISTS BETWEEN RESPONDENT-APPELLEE
SURGILINK ENTERPRISES AND PHARMACY
AND HEREIN COMPLAINANTS-APPELLANTS.

II.

WITH ALL DUE RESPECT, THE HONORABLE

LABOR ARBITER A QUO SERIOUSLY AND
PALPABLY ERRED IN HOLDING THAT
COMPLAINANTS-APPELLANTS WERE NOT
ILLEGALLY DISMISSED.

III.

WITH ALL DUE RESPECT, THE HONORABLE

LABOR ARBITER A QUO SERIOUSLY ERRED IN
HOLDING THAT RESPONDENTS-APPELLEES
DID NOT COMMIT UNFAIR LABOR PRACTICE.

IV.

WITH ALL DUE RESPECT, THE HONORABLE

LABOR ARBITER A QUO SERIOUSLY AND
PALPABLY ERRED IN NOT GRANTING THE
COMPLAINANTS-APPELLANTS’ RESPECTIVE
MONEY CLAIMS, INCLUDING CLAIMS FOR

Page 9 of 23
 MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY’S FEES.

DISCUSSION/ARGUMENTS

WITH ALL DUE RESPECT, THE

HONORABLE LABOR ARBITER A QUO
SERIOUSLY AND PALPABLY ERRED IN
HOLDING THAT NO EMPLOYER-
EMPLOYEE RELATIONSHIP EXISTS
BETWEEN RESPONDENT-APPELLEE
SURGILINK ENTERPRISES AND
PHARMACY AND HEREIN
COMPLAINANTS-APPELLANTS.

WITH ALL DUE RESPECT, THE

HONORABLE LABOR ARBITER A QUO
SERIOUSLY AND PALPABLY ERRED IN
HOLDING THAT COMPLAINANTS-
APPELLANTS WERE NOT ILLEGALLY
DISMISSED.

With all due respect, the Honorable Labor Arbiter a quo had seriously
and palpably erred when he ruled that complainants-appellants are not
employees of respondent-appellee SURGILINK ENTERPRISES AND
PHARMACY and thus, they are not deemed to have been illegally
dismissed by the latter.

The Honorable Labor Arbiter a quo disposed the issue on illegal

dismissal in this wise:

“Perusing over the pleadings filed by the parties, the issues are
the following: 1) whether the Complainants are employees of
Respondent SURGILINK, if in the affirmative; 2) whether the
Complainants were illegally dismissed; and 3) whether the
Complainants are entitled to their monetary claims including the
payment of moral and exemplary damages, and attorney’s fees.

On the existence of employer-employee relationship, the Supreme

Court has occasion to rule that “the existence of employer-
employee relationship is often difficult of determination,
especially when it is purposely made so by an employer on
evading liability under the law; but the creation of the relationship
should not be adjudged strictly in accordance with technical legal

Page 10 of 23
rules but rather according to the actualities of industrial or
business practice” (Gloria Uy, etc. vs. The Workmen’s
Compensation Commission, et al., G.R. No. L-43380, April 28,
1980).

In a significantly related case, the Supreme Court ruled that in

determining the existence of employer-employee relationship, the
elements are the following:

“xxx To ascertain the existence of an employer-employee

relationship, jurisprudence has invariably applied the four-fold
test, namely: (1) the manner of selection and engagement; (2)
payment of wages; (3) the presence or absence of the power of
dismissal; and (4) the presence or absence of the power of control.
Of these four, the last one is the most important. The so-called
“control test” is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an
employer-employee relationship exist(s) where the person for
whom the services are performed reserves the right to control not
only the end achieved, but also the manner and means to be used
in reaching that end” (Abante vs. Lamadrid Bearing and Parts
Corp., G.R. No. 87098, 4 November 1996, 264 SCRA 1, 7).

It should be remembered that the burden is on the Complainants

to prove that they were employees of the Respondents. In this case,
however, aside from the bare allegation of the Complainants, there
is no evidence on Record to prove that they were employees of the
Respondents. Instead, the pieces of evidence on Record,
particularly the Identification Cards and the Project Based
Contracts (Annexes “6-Series and 7-Series of the Respondents’
Position Paper) clearly show that the Complainants are
employees of Job-On-Link Staffing Services (JOLSS) and not
employees of Respondent SURGILINK. Stated differently, this
Office finds that there exists no employer-employee relationship
between the Respondents and the Complainant.

Consequently, there being no employer-employee relationship

between the Respondents and the Complainants, this Office is
constrained to dismiss the Complainants’ causes of action, on the
ground of lack of jurisdiction considering that the jurisdiction of
this Office as provided for in the Labor Code is based on the
existence of employer-employee relationship as pointed out by no
less than the Supreme Court in one of the cases it has decided, to
wit:

Page 11 of 23
 “It is evident that there is a unifying element which runs through
paragraphs 1 to 5 and that is, that they all refer to cases or
disputes arising out of or in connection with an employer-
employee relationship.” (San Miguel Corporation vs. NLRC, 161
SCRA 719 [1998]).

WHEREFORE, there being no employer-employee relationship

between the Respondent and the Complainants, the instant case is
hereby DISMISSED for lack of jurisdiction.

SO ORDERED.

Quezon City, Philippines, 30 October 2018.”

At the onset, it is worthy to emphasize that the rule is long and well
settled that, in illegal dismissal cases, the burden of proof is upon the
employer to show that the employee’s termination from service is for a just
and valid cause. The employers case succeeds or fails on the strength of its
evidence and not the weakness of that adduced by the employee, in keeping
with the principle that the scales of justice should be tilted in favor of the
latter in case of doubt in the evidence presented by them. Often described as
more than a mere scintilla, the quantum of proof is substantial evidence
which is understood as such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other equally reasonable
minds might conceivably opine otherwise. Failure of the employer to
discharge the foregoing onus would mean that the dismissal is not justified
and therefore illegal. (Functional, inc. vs. Samuel C. Granfil, G.R. No.
176377, 16 November 2011.)

It is quite unfortunate that the Honorable Labor Arbiter a quo has put
unfairly the burden on the shoulders of the complainants-appellants to prove
that respondent-appellee Surgilink Enterprises and Pharmacy is their
employer and not any other else. He even disregarded the photocopies of the
IDs submitted by the complainants-appellants and simply stated that “aside
from the bare allegation of the Complainants, there is no evidence on
Record to prove that they were employees of the Respondents”

The existence of said IDs bearing the name of the complainants-

appellanats and showing Surgilink Enterprises and Pharmacy as their
company was not even disputed by the respondents-appellees. The failure of
the other complainants-appellants to produce their official Surgilink
Enterprises and Pharmacy IDs is not their fault as none were issued to them
after all. The fact, however, that the respondents-appellees did not lift a

Page 12 of 23
finger to dispute the complainants-appellants’ information that they were
made to suffer work at the at the store of Surgilink Enterprises and Pharmacy
must militate against them, more especially when JOLSS, the alleged true
employer of the complainants-appellants, was not proved to be a legitimate
job contractor.

The Honorable Labor Arbiter a quo has simply believed, hook, line,
and sinker, the unsubstantiated allegation of respondents-appellees that
JOLSS is an independent employer. As such, he ruled that respondent-
appellee Surgilink Enterprises and Pharmacy is not the employer of the
complainants-appellants but JOLSS and hence, his Office has no jurisdiction
to take cognizance of the present complaint.

In holding that JOLSS is the employer of the complainants-appellants,

the Honorable Labor Arbiter a quo relied on the following pieces of
evidence proffered by the adverse parties, to wit: (1) Identification Cards and
(2) Project Based Contracts.

It must be stressed that the respondents-appellees impliedly claimed

that JOLSS is an independent contractor. Verily, it has the burden to prove its
claim by substantial evidence.

With all due respect, the foregoing pieces of evidence on which the
decision of the Honorable Labor a quo hinge have no relevance in this case.
They are not the substantial proofs required by law from someone claiming
the existence of a legitimate labor contracting;

At this point, it is necessary to point out that JOLSS, if it indeed

exists, is presumed to be engaged in mere labor-only contracting, contrary to
Honorable Labor Arbiter a quo’s baseless conclusion that it is a legitimate
employer.

Articles 106 and 107 of the Labor Code of the Philippines

(Presidential Decree No. 442, as amended) provide as follows:

ART. 106. Contractor or subcontractor. - Whenever an employer

enters into a contract with another person for the performance of
the former's work, the employees of the contractor and of the
latter's subcontractor, if any, shall be paid in accordance with the
provisions in this Code.

Page 13 of 23
 In the event that the contractor or sub-contractor fails to pay the
wages of his employees in accordance with this Code, the
employer shall be jointly and severally liable with his contractor
or sub-contractor to such employees to the extent of the work
performed under the contract in the same manner and extent that
he is liable to employees directly employed by him.

The Secretary of Labor may, by appropriate regulations, restrict

or prohibit the contracting out of labor to protect the rights of
workers established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions between labor-
only contracting and job contracting as well as differentiations
within these types of contracting and determine who among the
parties involved shall be considered the employer for purposes of
this Code, to prevent any violation or circumvention of any
provisions of this Code.

There is "labor-only" contracting where the person supplying

workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by
such person are performing activities which are directly related to
the principal business of such employer. In such cases, the person
or intermediary shall be considered merely as an agent of the
employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.

ART. 107. Indirect employer. — The provisions of the immediately

preceding Article shall likewise apply to any person, partnership
association or corporation which, not being an employer,
contracts with an independent contractor for the performance of
any work, task, job or project. (Emphasis supplied)

Labor-only contracting is expressly prohibited by our labor laws.

Article 106 of the Labor Code defines labor-only contracting as "supplying
workers to an employer [who] does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises,
among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of
such employer;"

In determining the existence of an independent contractor

relationship, several factors may be considered, such as, but not necessarily
confined to, whether or not the contractor is carrying on an independent
business; the nature and extent of the work; the skill required; the term and

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duration of the relationship; the right to assign the performance of specified
pieces of work; the control and supervision of the work to another; the
employer’s power with respect to the hiring, firing and payment of the
contractor’s workers; the control of the premises; the duty to supply
premises, tools, appliances, materials and labor; and the mode, manner and
terms of payment. (New Golden City Builders & Development Corp. v.
Court of Appeals, 463 Phil. 821, 829 [2003]);

On the other hand, there is labor-only contracting where: (a) the

person supplying workers to an employer does not have substantial capital
or investment in the form of tools, equipment, machineries, work premises,
among others; and (b) the workers recruited and placed by such person are
performing activities which are directly related to the principal business of
the employer. (Neri v. National Labor Relations Commission, G.R. Nos.
97008-09, July 23, 1993, 224 SCRA 717, 721);

Generally, the presumption is that the contractor is a labor-only

contracting unless such contractor overcomes the burden of proving that it
has the substantial capital, investment, tools and the like. (7K Corporation v.
National Labor Relations Commission, G.R. No. 148490, November 22,
2006, 507 SCRA 509, 523);

In this instant case, though respondents-appelles are not the alleged

contractor, it has the burden of proving that JOLSS has sufficient capital or
investment since it is claiming the supposed status of the latter as an
independent contractor. (Coca-Cola Bottlers Phils., Inc. v. Agito, G.R. No.
179546, February 13, 2009, 579 SCRA 445, 465). The respondents-
appellees, however, fell short of adducing evidence purporting to show that
JOLSS has satisfactory capitalization. Neither did it demonstrate that JOLSS
invested in the form of tools, equipment, machineries, work premises and
other materials which are necessary in the completion of the service
contracts;

Another indicating factor that classifies JOLSS as a labor-only

contractor is the failure of the respondents-appelees to show that the former
exercises the right to control the performance of the work of the
complainants.

With all due respect, the reliance of the Labor Arbiter a quo on the
Identification Cards and the Project Based Contracts impliedly showing that
it was JOLSS that has control and supervision over complainants-appellants
is misplaced. Such document is bereft of any evidentiary value. The
respondents-appellees has the burden of presenting the person from JOLSS
who have exercised supervision over complainants-appellants. It was never
established that JOLSS took entire charge, control, and supervision of the

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work and service agreed upon. If respondents-appellees have fallen short of
proving that JOLSS has entire control and supervision over the work of the
complainants-appellants, it follows then that the latter is free from the
burden of proving that it was respondents-appellees that indeed supervised
them.

The requirement of the law in determining the existence of

independent contractorship is that the contractor should undertake the work
on his own account, under his own responsibility, according to his own
manner and method, free from the control and direction of the employer
except as to the results thereof (Section 8 of Department of Labor and
Employment (DOLE) Department Order No. 10, Series of 1997). The
allegation of respondents-appellees that JOLSS exercises the sole
supervision and control over the complainants-appellants is a mere
allegation. They did not advance any evidence indicating that JOLSS have
the discretions to determine the means and manner by which the work of
complainants-appellants should be performed. Rather, circumstances will
show that the works of the complainants-appellants had been in strict
compliance with, and subject to, all requirements and standards of the
respondents-appellees.

Under the foregoing circumstances, there is no doubt that JOLSS, if it

has indeed entered into an employment contract with the respondents-
appelees, is engaged in labor-only contracting, and is considered merely an
agent of the latter. The respondents-appelles are the principal employers and,
hence, responsible to the complainants-appellants.

Employers may not terminate the service of a regular employee except

for a just cause or when authorized under the Labor Code. It is not difficult
to see that to uphold the alleged contractual arrangement between the
respondents-appelees and JOLSS would in effect be to permit employers to
avoid the necessity of hiring regular or permanent employees and to enable
them to keep their employees indefinitely on a temporary or casual status,
thus to deny them security of tenure in their jobs. Article 106 of the Labor
Code is precisely designed to prevent such a result.

Considering that the presumption that JOLSS was engaged in

prohibited labor-only contracting was not overcome, the respondents-
appellees shall be deemed the true employer of complainants-appellants. As
regular employees of respondents-appellees, complainants-appellants cannot
be dismissed except for just or authorized causes, none of which were
alleged or proven to exist in this case, the only defense of respondents-
appellees against the charge of illegal dismissal being that complainants-
appellants were not its employees. Records also failed to show that
respondents-appellees afforded complainants-appellants the twin
requirements of procedural due process, i.e., notice and hearing, prior to

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their dismissal. complainants-appellants were not served notices informing
them of the particular acts for which their dismissal was sought. Nor were
they required to give their side regarding the charges made against
them. Certainly, the complainants-appellants’ dismissal was not carried out
in accordance with law and, therefore, illegal.

Given that complainants-appellants were illegally dismissed by

petitioner, they are entitled to reinstatement, full backwages, inclusive of
allowances, and to their other benefits or the monetary equivalents
thereof computed from the time their compensations were withheld from
them up to the time of their actual reinstatement, as mandated under the
Labor Code.

WITH ALL DUE RESPECT, THE HONORABLE

LABOR ARBITER A QUO SERIOUSLY ERRED IN
HOLDING THAT RESPONDENTS-APPELLEES
DID NOT COMMIT UNFAIR LABOR PRACTICE.

Respondents-appellees are guilty of unfair labor practice because of

their union-busting activities. As proof, attached hereto, as ANNEX “A”, is
the resolution of the Department of Labor and Employment (DOLE)
showing the complainants-appellants’ union as the sole and exclusive
bargaining agent of the rank-and-file employees of Surgilink Enterprises and
Pharmacy. The resolution clearly shows that complainants-appellants are
regular employees at Surgilink Enterprises and Pharmacy. It cannot be
gainsaid then that their dismissal was triggered by their union affiliation and
union activities and not for any other just or authorized causes.

Article 289 (a) of the Labor Code states that it shall be unlawful for an
employer to interfere with, restrain or coerce employees in the exercise of
their right to self-organization. Likewise, paragraph (e) of the same article
prohibits employer to discriminate in regard to wages, hours of work and
other terms and conditions of employment in order to encourage or
discourage membership in any labor organization. These proscribed acts,
among others, undoubtedly, are unfair labor practices which are detrimental
to the workers’ welfare and rights.

To dismiss its employees especially the officers and members of

complainant union who are militant and dynamic after the organization of
the same is something that smacks of unfair labor practice. In labor parlance
that is union-busting. If respondent-appellee company dismissed said
complainant-appellant before the organization of complainant union, there
would have been neither misgivings nor suspicion as to its ulterior motives.
But when its management dismissed said complainants after the organization
of their union and after they had sent a letter of demands for the

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improvement of the working conditions of the employees of the company,
that is the legendary last straw that broke the camel's back. In fine,
respondent company (Surgilink Enterprises and Pharmacy, in this case) is
guilty of union-busting. (Oceanic Air Products, Inc. vs. CIR, G.R. No. L-
18704, January 31, 1963).

WITH ALL DUE RESPECT, THE HONORABLE

LABOR ARBITER A QUO SERIOUSLY AND
PALPABLY ERRED IN NOT GRANTING THE
COMPLAINANTS-APPELLANTS’ RESPECTIVE
MONEY CLAIMS, INCLUDING CLAIMS FOR
MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY’S FEES.

A simple perusal of the Complaint clearly reveals that the

respondents-appellees have violated different labor standards. Respondents-
appellees should then be required to submit proofs of payment of the same.
Otherwise, and necessarily therefore, respondent-appellee’ failure to present
or submit proofs of payment will necessarily legitimize complainants-
appellants’ money claims.

Besides, settled is the rule in this jurisdiction that, in money claim

cases, the burden of proof is shifted to the employer for the simple reason
that it is the one in possession of all the needed and necessary pieces of
evidence to best ascertain said claims.

The case of GREGORIO S. SABEROLA vs. RONALD SUAREZ

and RAYMUNDO LIRASAN, JR., G.R. No. 151227, July 14, 2008, is very
helpful and instructive on this point, to wit:

“As to respondents’ monetary claims, we uphold the findings of

the NLRC. As employer, the petitioner has the burden of proving
that the rate of pay given to the respondents is in accordance with
the minimum fixed by the law and that he paid thirteenth month
pay, service incentive leave pay and other monetary claims.

We have consistently held that as a rule, one who pleads

payment has the burden of proving it. Even when the plaintiff
alleges non-payment, still the general rule is that the burden rests
on the defendant to prove payment, rather than on the plaintiff
to prove non-payment. The debtor has the burden of showing with
legal certainty that the obligation has been discharged by
payment. When the existence of a debt is fully established by the
evidence contained in the record, the burden of proving that it has
been extinguished by payment devolves upon the debtor who

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 invokes such a defense against the claim of the creditor. When the
debtor introduces some evidence of payment, the burden of going
forward with the evidence — as distinct from the general burden
of proof — shifts to the creditor, who is then under a duty of
producing some evidence to show non-payment.

In the instant case, the burden of proving payment of the

monetary claims rests on petitioner, being the employer of
respondents. This is because the pertinent personnel files,
payrolls, records, remittances and other similar documents that
would show that the claims have been paid are not in the
possession of the worker but in the custody and absolute control
of the employer. Sadly, the petitioner failed to do so.”
(Underscoring Ours)

The case of GRANDTEQ INDUSTRIAL STEEL PRODUCTS, INC.

and ABELARDO M. GONZALES vs. EDNA MARGALLO, G.R. No.
181393, July 28, 2009, is likewise elucidating:

“In cases involving money claims of employees, the employer

has the burden of proving that the employees did receive their
wages and benefits and that the same were paid in accordance
with law.

It is settled that once the employee has set out with particularity
in his complaint, position paper, affidavits and other documents
the labor standard benefits he is entitled to, and which the
employer allegedly failed to pay him, it becomes the employer’s
burden to prove that it has paid these money claims. One who
pleads payment has the burden of proving it; and even where the
employees must allege nonpayment, the general rule is that the
burden rests on the defendant to prove payment, rather than on the
plaintiff to prove nonpayment.” (Underscoring Ours)

All the illegal and improvident acts of the respondents-appellees

discussed above, which are part and parcel of their malevolent and anti-
worker inclination and attitudes, were motivated by ill-will and illicit
intentions and committed with willful and evident bad faith.

Verily, complainants-appellants are entitled to moral damages as

provided for under Articles 2217 and 2219 in relation to Article 21 and
paragraph 6 of Article 32 of the Civil Code of the Philippines.

The foregoing provisions read as follows:

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 Article 2217. Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages
may be recovered if they are the proximate result of the
defendant’s wrongful act or omission. (Emphasis supplied).

Article 2219. Moral damages may be recovered in the following

and analogous cases:

xxx

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29,
30, 32, 34 and 35. (Underscoring Supplied).

Article 21. Any person who willfully causes loss or injury to

another in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.

Article 32. Any public officer or employee, or any private

individual, who directly or indirectly obstructs, defeats, violates
or in any manner impedes or impairs any of the following rights
and liberties of another person shall be liable to the latter for
damages:

xxx

(6) The right against deprivation of property without due

process of law.

Since it is clear that complainants-appellants are entitled to moral

damages, perforce, they are likewise entitled to exemplary damages pursuant
to Article 2229 of the Civil Code of the Philippines which provides:

Article 2229. Exemplary or corrective damages are imposed, by

way of example or correction for the public good, in addition to
the moral, temperate, liquidated or compensatory damages.

Moreover, it is unquestionable that the complainants-appellants were

deliberately dismissed from the service by reason of their active involvement
in the activities of KMM Katipunan-Surgilink Chapter. Complainants-
appellants’ dismissal constituted unfair labor practice. It was done to

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interfere with, restrain or coerce employees in the exercise of their right to
self-organization.

In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees

Association, et al. v. NLRC, et al., 323 SCRA 86, the Court found it proper
to award moral and exemplary damages to illegally dismissed employees as
their dismissal was tainted with unfair labor practice. The Court said:

“Unfair labor practices violate the constitutional rights of

workers and employees to self-organization, are inimical to the
legitimate interests of both labor and management, including their
right to bargain collectively and otherwise deal with each other in
an atmosphere of freedom and mutual respect; and disrupt
industrial peace and hinder the promotion of healthy and stable
labor-management relations. As the conscience of the
government, it is the Court’s sworn duty to ensure that none trifles
with labor rights.

For this reason, we find it proper in this case to impose moral

and exemplary damages on private respondent.”

Finally, having been compelled to engage the services of a counsel to

vindicate their rights, complainants-appellants are further entitled to
attorney’s fees equivalent to ten (10) percent of the total judgment amount
that may be awarded herein. As the Supreme Court held in Philippine
National Construction Corporation vs. NLRC, 277 SCRA 91:

“It is settled that in actions for recovery of wages or where an

employee was forced to litigate and, thus, incur expenses to
protect his rights and interests, the award of attorney’s fees is
legally and morally justifiable.”

PRAYER

WHEREFORE, in view of all the foregoing, it is most respectfully

prayed of this Honorable Commission that, after due consideration, the 30
October 2018 Decision of Honorable Labor Arbiter Rommel R. Veluz BE
REVERSED AND SET ASIDE and a NEW ONE BE ENTERED, as
follows:

1. DECLARING complainants-appellants as regular employees of

SURGILINK ENTERPRISES AND PHARMACY who have been denied
due process and illegally dismissed by them;

Page 21 of 23
 2. DECLARING respondents-appellees to reinstate the
complainants-appellants to their former positions without loss of seniority
rights and other privileges and with FULL BACKWAGES from the time
they were deprived of their works until they are actually reinstated to their
former positions;

3. HOLDING respondents-appellees guilty of unfair labor

practice (ULP) for their union-busting activities and liable to the
complainants-appellants’ union for moral and exemplary damages
amounting to FIVE HUNDRED THOUSAND PESOS (P500,000.00) and
ONE MILLION PESOS (P1,000,000.00), respectively.

4. HOLDING respondents-appellees LIABLE, jointly and

solidarily, for DAMAGES in the amount of ONE HUNDRED
THOUSAND PESOS (P100,000.00), as moral damages for each
complainant-appellant, and TWO HUNDRED THOUSAND PESOS
(P200,000.00), as exemplary damages for each complainant-appellant;

5. HOLDING all respondents-appellees LIABLE, jointly and

solidarily, for all the money claims herein claimed.

6. DECLARING respondents-appellees liable to reimburse

complainants-appellants all their litigation and other related expenses,
including attorney’s fees equivalent to ten (10%) percent of the total
monetary award.

OTHER RELIEFS deemed just and equitable under the premises are
likewise prayed for.

Quezon City, 19 November 2018.

Legal Advocates for Workers’ INterest

(L A W I N)
Counsel for the Complainants-Appellants
Room 206, Jiao Building
No. 2 Timog Avenue, Quezon City
Email address: [email protected]
Telefax (02) 373-18-44

Page 22 of 23
 ERNESTO R. ARELLANO
PTR No. 5521327; 01-04-18; Quezon City
IBP No. 020231; 01-04-18; CALMANA
ROLL No. 22660
MCLE No. V-0011875; Issued 11-11-15; Until 04-14-19

JASPER C. BALBOA
PTR No. 2723758; 01-18-18; Mandaluyong City
IBP No. 025213; 01-10-18; Manila I
ROLL No. 63288
MCLE Compliance No. V-0019823
valid from 04/20/2016 until 04/14/2019

RENATO B. BORLASA
PTR No. 5521328; 01-04-18; Quezon City
IBP No. 022944; 01-03-18; Quezon City
ROLL No. 65855
MCLE Compliance No. VI-0002758
7 July 2017; Until 14 April 2019

Copy furnished: (by registered mail)

SURGILINK ENTERPRISES AND

PHARMACY/JOYCE ANN MEDINA
LOPEZ
1658 Rizal Avenue, Sta Cruz, Manila NCR
1000 and/or 1748 Rizal Avenue, Brgy. 337,
Zone 034, Sta. Cruz, Manila 1000

EXPLANATION

This Memorandum of Appeal was filed in this Honorable

Commission, and a copy thereof was served to the counsel of the adverse
parties, by registered mail due to distance, time constraint, and lack of office
personnel who can render the preferred personal filing and service.

ERNESTO R. ARELLANO RENATO B. BORLASA

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