CHAVEZ vs NLRCG.R. No. 146530.January 17, 2005. CALLEJO

Petitioner: PEDRO CHAVEZRespondents: NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING, INC. and ALVIN LEE, Plant Manager

FACTS: Supreme Packaging, Inc. engaged the services of Pedro Chavez, as truck driver tasked to deliver the Supreme Packagings products from its factory in Bataan, to its various customers, mostly in Metro Manila. Supreme Packaging furnished Chavez with a truck. Most of the delivery trips were made at nighttime (starting 6:00 p.m. and returning thereto in the afternoon two or three days after). The deliveries were made in accordance with the routing slips issued by Supreme Packaging indicating the order, time and urgency of delivery. Initially, Chavez was paid P350.00 per trip, adjusted to P480.00 and, at the time of his alleged dismissal, P900.00 per trip. Chavez expressed to respondent Alvin Lee, Supreme Packagings plant manager, Chavezs desire to avail himself of the benefits that the regular employees were receiving such as overtime pay, nightshift differential pay, and 13th month pay, among others. Although promised, such were not extended to him. Chavez filed a complaint for regularization but before the case could be heard, he was terminated. Consequently, an amended complaint was filed for illegal dismissal, unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13th month pay, among others. Supreme Packaging denied the existence of an employer-employee relationship, averring that Chavez was an independent contractor as evidenced by the contract of service, renewed twice, the terms being the same except for the payment to Chavez. Chavez had the sole control over the means and methods by which his work was accomplished. He paid the wages of his helpers and exercised control over them. They also did not dismiss Chavez. Rather, the severance of his contractual relation with the Supreme Packaging was due to his violation of the terms and conditions of their contract. Chavez allegedly failed to observe the minimum degree of diligence in the proper maintenance of the truck he was using, thereby exposing Supreme Packaging to unnecessary significant expenses of overhauling the said truck.

ISSUE: Whether there existed an employer-employee relationship between the Supreme Packaging and the Chavez YES

RATIO: The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employers power to control the employees conduct. The most important element is the employers control of the employees conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. All the four elements are present in this case. First. Undeniably, it was Supreme Packaging who engaged the services of the Chavez without the intervention of a third party. Second. That Chavez was paid on a per trip basis is not significant. This is merely a method of computing compensation and not a basis for determining the existence or absence of employer-employee relationship. One may be paid on the basis of results or time expended on the work, and may or may not acquire an employment status, depending on whether the elements of an employer-employee relationship are present or not. In this case, it cannot be gainsaid that Chavez received compensation from the Supreme Packaging for the services that he rendered to the latter. Third. Supreme Packagings power to dismiss Chavez was inherent in the fact that they engaged the services of the Chavez as truck driver. They exercised this power by terminating Chavezs services albeit in the guise of severance of contractual relation due allegedly to the latters breach of his contractual obligation. Fourth. While an independent contractor enjoys independence and freedom from the control and supervision of his principal, an employee is subject to the employers power to control the means and methods by which the employees work is to be performed and accomplished. Although Supreme Packaging denied that they exercised control over the manner and methods by which Chavez accomplished his work, a careful review of the records shows that the latter performed his work as truck driver under the Supreme Packaging supervision and control: 1. The truck driven by the Chavez belonged to Supreme Packaging; 2. There was an express instruction from the Supreme Packaging that the truck shall be used exclusively to deliver Supreme Packagings goods; 3. Supreme Packaging directed Chavez, after completion of each delivery, to park the truck in either of two specific places only, to wit: at its office in Metro Manila or at BEPZ, Mariveles, Bataan; 4. Supreme Packaging determined how, where and when the Chavez would perform his task by issuing to him gate passes and routing slips. Chavez performed the delivery services exclusively for the Supreme Packaging for a continuous and uninterrupted period of ten years. Neither can Supreme Packaging claim that the Chavez was guilty of gross negligence. The single and isolated act of the Chavezs negligence in the proper maintenance of the truck alleged by the Supreme Packaging does not amount to gross and habitual neglect warranting his dismissal. However, circumstances do not warrant Chavezs reinstatement. More equitable disposition is separation pay.