Atienza vs. Saluta

In cases where an employee claims illegal dismissal against a corporation but fails to prove by substantial evidence the existence of an employer-employee relationship under the four-fold test (selection, payment of wages, power of dismissal, and control), and the alleged employer proves the claimant was actually a family driver under personal employ, the Civil Code provisions on household service apply rather than the Labor Code, given that the Kasambahay Law (RA 10361) repealed Labor Code Articles 141-152 on househelpers but expressly excludes family drivers from its coverage.

Noel Sacramento Saluta was hired in May 2012 to drive for Celia R. Atienza, a top official of CRV Corporation, receiving P9,000.00 monthly. On December 11, 2014, Saluta was involved in a vehicular accident while driving, for which P15,000.00 was deducted from his salary to cover damages. On December 23, 2014, Saluta requested leave to claim his driver's license as his Temporary Operator's Permit had expired, but Atienza refused due to prior appointments. Saluta failed to report for work on December 24, 2014, allegedly prompting Atienza to terminate him verbally. Saluta subsequently filed a complaint for illegal dismissal and monetary claims against both Atienza and CRV Corporation.

• Noel Sacramento Saluta was hired in May 2012 as a driver for Celia R. Atienza, receiving a monthly salary of P9,000.00 with free board and lodging.
• On December 11, 2014, Saluta was involved in a vehicular accident while driving along North Luzon Expressway, hitting the rear portion of another vehicle.
• The company advanced P15,000.00 for damages to be deducted from Saluta's salary, and authorities confiscated his driver's license, issuing him a Temporary Operator's Permit (TOP).
• On December 23, 2014, Saluta requested permission to be absent to claim his driver's license as his TOP had expired, but Atienza refused due to prior appointments.
• Saluta failed to report for work on December 24, 2014, and instead went to claim his license; he arranged for another driver to substitute for him.
• Atienza allegedly told Saluta over the phone: "kung hindi ka makakapag-drive ngayon, mabuti pa maghiwalay na tayo" (if you cannot drive today, we might as well part ways).
• Saluta interpreted this as verbal termination and went to CRV Corporation's office where General Manager Rodolfo Reyes allegedly confirmed the termination and refused to release his remaining salary pending reimbursement of the P15,000.00 advance.
• Saluta filed a complaint for illegal dismissal, non-payment of wages, overtime pay, holiday pay, premium pay, illegal deduction, and issuance of certificate of employment on April 7, 2015.
• Atienza contended that Saluta was her personal/family driver, not a company driver, and that he abandoned his job when he failed to return to work after December 23, 2014.
• Saluta claimed he was a regular employee of CRV Corporation since May 2012 and that he was illegally dismissed.

• Celia R. Atienza argued that the Court of Appeals erred in ruling that Saluta was a company driver of CRV Corporation despite his failure to prove by substantial evidence the existence of an employer-employee relationship with the company, citing Lopez v. Bodega City for the rule that the employee bears the burden of proving such relationship.
• She insisted that Saluta was her personal driver, evidenced by: (a) lack of employment contract with CRV Corporation; (b) payment of salaries by her personally (not through company ATM as claimed); and (c) her exercise of control over his work by deciding when and where he would drive for her and her family.
• She contended that Saluta was not dismissed but abandoned his job when he refused to return to work after December 23, 2014, and informed Reyes that he would no longer report for work.
• She argued that as a family driver who left without justifiable reason, Saluta forfeited unpaid salary under Article 149 of the Labor Code (or Article 1697 of the Civil Code) and was not entitled to separation pay, wage differentials, holiday pay, 13th month pay, or service incentive leave pay as family drivers are exempt from these benefits under the Labor Code.

• Noel Sacramento Saluta insisted that he was a regular company driver of CRV Corporation since May 2012, rendering services absolutely necessary and desirable to the company's business.
• He argued that Atienza only claimed he was a personal driver to circumvent minimum wage requirements for company drivers.
• He maintained that he received salaries through ATM like other regular employees and customarily reported to the company General Manager.
• He asserted that he did not resign or abandon his job, citing his filing of the illegal dismissal complaint as proof of his intention to return to work, and argued that abandonment cannot be inferred from mere absence.
• He contended that Atienza failed to discharge the burden of proving that dismissal was for just cause and after due process, and that he was entitled to full backwages, separation pay, wage differentials, holiday pay, 13th month pay, service incentive leave pay, damages, and attorney's fees.

• Procedural Issues:
  • Whether the Supreme Court may review factual findings when the Labor Arbiter, NLRC, and Court of Appeals arrived at conflicting conclusions regarding the existence of an employer-employee relationship.
• Substantive Issues:
  • Whether an employer-employee relationship existed between Saluta and CRV Corporation, or whether Saluta was merely the personal driver of Atienza.
  • Whether Saluta was illegally dismissed from employment or had abandoned his position.
  • Whether Saluta is entitled to backwages, separation pay, wage differentials, holiday pay, 13th month pay, and service incentive leave pay.
  • Whether the reversal of the Court of Appeals decision benefits CRV Corporation despite its failure to appeal.

• Procedural:
  • The Supreme Court held that while it is not a trier of facts, it may review factual issues in labor cases when the findings of the Labor Arbiter, NLRC, and Court of Appeals are conflicting, necessitating a reevaluation of the records to arrive at a just resolution.
• Substantive:
  • The Court ruled that Saluta failed to prove by substantial evidence the existence of an employer-employee relationship with CRV Corporation under the four-fold test, as he presented no employment contract, company ID, pay slips, or proof that the company exercised control or dismissal power over him; instead, Atienza exercised control over his work and the power to dismiss.
  • The Court held that Saluta was the personal/family driver of Atienza, governed by Articles 1689, 1697, and 1699 of the Civil Code, not the Labor Code, because Republic Act No. 10361 (Kasambahay Law) expressly repealed Articles 141-152 of the Labor Code (which covered househelpers and family drivers) but expressly excluded family drivers from its coverage under Section 4(d) and Section 2 of its Implementing Rules.
  • The Court ruled that Saluta was not dismissed from employment, as bare and unsubstantiated allegations of verbal termination do not constitute substantial evidence; the evidence must be clear, positive, and convincing, and Saluta failed to prove he was prevented from returning to work.
  • The Court held that abandonment was not established, as mere absence without justifiable reason is insufficient; there must be clear proof of deliberate and unjustified intent to sever the employment relationship, which is negated by the filing of a complaint for illegal dismissal.
  • The Court ruled that Saluta was not entitled to wage differentials, holiday pay, 13th month pay, or service incentive leave pay because persons in the personal service of another, including family drivers, are exempt from these benefits under Articles 82, 94, and 95 of the Labor Code and Section 3(d) of the rules implementing Presidential Decree No. 851.
  • The Court held that the reversal of the judgment does not benefit CRV Corporation because only Atienza appealed, and under the doctrine of separate juridical personality, a corporation has a personality distinct from its officers and stockholders; the rights and liabilities of the parties are not so interwoven as to be inseparable.

• Four-fold Test for Employer-Employee Relationship — The test requires proof of: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) power of control over the employee's conduct. The burden of proving these elements rests on the party asserting the existence of the relationship. In this case, the Court applied this test to determine that Saluta was a personal driver, not a company employee, because Atienza exercised control over his work and he failed to present documentary evidence proving employment with the corporation.
• Burden of Proof in Illegal Dismissal Cases — While the employer bears the burden of proving that dismissal was for valid cause, the employee must first establish by substantial evidence the fact of dismissal itself. Bare allegations without competent proof are insufficient. Here, the Court found Saluta's claim of verbal termination unsubstantiated and self-serving.
• Abandonment as a Defense — Abandonment requires: (1) failure to report for work without valid or justifiable reason; and (2) clear intention to sever the employer-employee relationship, with the second element being determinative. Mere absence is not tantamount to abandonment, and filing a complaint for illegal dismissal negates any intent to abandon. The Court found no abandonment as Saluta filed a complaint protesting his dismissal.
• Expressio Unius Est Exclusio Alterius — The express mention of one person, thing, or consequence implies the exclusion of all others. The Court applied this maxim to determine that because the Kasambahay Law specifically enumerated who are considered domestic workers and excluded family drivers, the latter cannot be included by interpretation.
• Doctrine of Separate Juridical Personality — A corporation has a personality separate and distinct from its stockholders and officers. Consequently, a reversal of judgment on appeal binds only the parties who actually appealed and does not benefit parties against whom judgment was rendered but who did not join in the appeal, unless their rights and liabilities are inseparable. The Court held that CRV Corporation, not having appealed, was not benefited by Atienza's successful appeal.

• "Bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value."
• "Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts."
• "Social justice principles cannot be used to expand the coverage of the law to subjects not intended by the Congress to be included."
• "The burden of proving abandonment is upon the employer who, whether pleading the same as a ground for dismissing an employee or as a mere defense, additionally has the legal duty to observe due process."
• "Each party must prove his affirmative allegation, that mere allegation is not evidence."

• Lopez v. Bodega City — Cited by the petitioner and the Court to establish that in illegal dismissal cases, the employee bears the burden of proving the existence of an employer-employee relationship by substantial evidence.
• Protective Maximum Security Agency, Inc. v. Fuentes — Cited for the definition of abandonment as the deliberate and unjustified refusal of an employee to resume employment, requiring clear intention to sever the relationship manifested by overt acts.
• Marsman & Company, Inc. v. Sta. Rita — Cited for the rule that allegations in the complaint must be duly proven by competent evidence and the burden of proof is on the party making the allegation.
• Valencia v. Classique Vinyl Products Corporation — Cited for the elements of the four-fold test in determining employer-employee relationships.
• MZR Industries v. Colambot and Borja v. Miñoza — Cited for the principle that where an employee's failure to work was occasioned neither by abandonment nor termination, each party must bear his own loss.
• Municipality of Orion v. Concha and Government of the Republic of the Philippines v. Tizon — Cited for the rule that a reversal of judgment on appeal is binding on parties to the suit but shall not benefit parties against whom judgment was rendered in the court a quo but who did not join in the appeal.

• Civil Code, Articles 1689, 1697, and 1699 — Govern household service, providing for reasonable compensation, indemnity for unjust termination (15 days pay), forfeiture of salary for leaving without justifiable reason (not exceeding 15 days), and the right to a written statement upon extinguishment of service. The Court applied these provisions to the relationship between Atienza and Saluta.
• Labor Code, Articles 82, 94, and 95 — Exclude persons in the personal service of another from coverage of overtime, holiday pay, and service incentive leave provisions. The Court cited these to deny Saluta's claims for such benefits.
• Labor Code, Articles 141 and 149 — Formerly governed employment of househelpers and family drivers, but were expressly repealed by Section 44 of the Kasambahay Law.
• Republic Act No. 10361 (Kasambahay Law), Sections 4(d) and 44 — Section 4(d) defines domestic workers and excludes family drivers; Section 44 repeals Articles 141-152 of the Labor Code. The Court interpreted these provisions to determine that family drivers fall outside the Kasambahay Law's coverage and must revert to Civil Code provisions.
• Presidential Decree No. 851, Section 3(d) — Excludes employers of household helpers and persons in the personal service of another from 13th month pay coverage.
• Batas Pambansa Bilang 68 (Corporation Code), Section 122 — Provides that a corporation whose registration has been revoked continues to be a body corporate for three years for purposes of winding up affairs, including prosecuting and defending suits.