Reyes vs. Glaucoma Research Foundation

No employer-employee relationship exists, and no case for illegal dismissal can prosper, where the putative employer does not exercise control over both the end achieved and the manner and means of work and where the worker is not economically dependent on the putative employer. The finding rested on petitioner's unregulated working hours, absence of supervision, concurrent consultancies, compensation without employee deductions, and corroborating evidence that he served only as consultant despite his use of the title administrator.

Glaucoma Research Foundation, Inc. operates the Eye Referral Center, with Manuel B. Agulto as its Executive Director. The Center was the workplace where organizational, administrative, and consultancy work relating to its organizational set-up and employees' manual was performed.

Petitioner alleged that on August 1, 2003 he was hired by respondent corporation as administrator of its Eye Referral Center, performed his duties as such, and continuously received his monthly salary of ₱20,000.00 until the end of January 2005. Beginning February 2005, his salary was withheld without notice, although he continued to report for work. On April 11, 2005 he wrote respondent Agulto that he had not received salaries since February 2005 as well as his 14th month pay for 2004, but received no response.

According to petitioner, on April 21, 2005 he was informed by the Assistant to the Executive Director and the Assistant Administrative Officer that he was no longer Administrator of the Center, his office was thereafter padlocked and closed without notice, and although he still reported for work, on April 29, 2005 the security guard on duty no longer allowed him to enter the premises. Respondents, for their part, contended that upon petitioner's representation that he was an expert in corporate organizational structure and management affairs, they engaged him as consultant or adviser to formulate an updated organizational set-up and employees' manual, and that he later designated himself as administrator on a trial basis upon his own claim of need therefor. They denied control over his working hours and manner of performance, asserted he reported and left as he pleased and became overbearing with three complaints filed against him, and maintained he voluntarily severed relations and concurrently served as consultant to the Manila International Airport Authority, Manila Intercontinental Port Authority, and Anti-Terrorist Task Force for Aviation and Air Transportation Sector.

The Labor Arbiter found no employer-employee relationship because petitioner failed to prove appointment as administrator and receipt of salaries as such, failed to deny concurrent government consultancies, was neither supervised nor controlled, observed no definite working hours, and received allowances as consultant rather than salaries. On appeal, the National Labor Relations Commission reversed, holding the Labor Arbiter's conclusion lacked support and that respondents failed to prove dismissal for cause with due process. The Court of Appeals annulled the NLRC ruling and reinstated the Labor Arbiter, holding under the control test and economic reality test that no employment relationship existed, noting petitioner's admission on working hours, his December 1-31, 2004 leave taken by mere notice with advice to appoint a replacement, pay slips without SSS and withholding tax deductions, a cash voucher describing ₱20,000.00 as allowance for December 2004, affidavits of respondent corporation's Medical Records Custodian and Administrative Officer attesting to consultancy status, and his resume showing concurrent consultancies during his stint from August 1, 2003 to April 29, 2005.

• Defective Verification: Petitioner argued that respondents' petition for certiorari before the Court of Appeals should have been dismissed because its verification was improperly notarized, the jurat stating only the community tax certificate number of the affiant, which is not competent evidence of identity under the 2004 Rules on Notarial Practice as amended by the Resolution dated February 19, 2008.
• Existence of Employer-Employee Relationship: Petitioner maintained that evidence on record established an employer-employee relationship, pointing to his hiring as administrator, his designation as such in intra-company correspondence and identification card, the organizational plans subject to Board approval, and pay slips showing payment of salaries.

• Nature of Engagement as Consultant: Respondents countered that petitioner was engaged only as consultant or adviser to formulate an updated organizational set-up and employees' manual compatible with their condition, and that he designated himself as administrator on a trial basis.
• Absence of Employer Control: Respondents argued that no employer-employee relationship existed because they had no control over petitioner's working hours, as he reported and left as he pleased, and no control over the manner of performance of his duties as consultant.
• No Dismissal: Respondents maintained that petitioner was not dismissed but voluntarily severed his relations after becoming overbearing and souring his relationship with employees and officers, leading to three complaints against him.

• Sufficiency of Verification: Whether respondents' petition for certiorari should have been dismissed for defective verification for failure to comply with the 2004 Rules on Notarial Practice on competent evidence of identity.
• Existence of Employer-Employee Relationship: Whether an employer-employee relationship existed between respondents and petitioner so as to sustain a case for illegal dismissal.

• Sufficiency of Verification: No. Competent evidence of identity is not required where the affiant is personally known to the notary public, and minor procedural lapses not impairing justice should not defeat substantive rights.
• Existence of Employer-Employee Relationship: No. No employer-employee relationship was established by substantial evidence under the control test and economic reality test, so the illegal dismissal claim must fail.

• Sufficiency of Verification: A jurat requires appearance before the notary, personal knowledge by the notary or identification through competent evidence of identity, signing in presence, and oath, with the disjunctive "or" making personal knowledge sufficient without identification documents. Applied here, the attorney-in-fact who executed the verification and certificate against forum shopping was undisputedly personally known to the notary, who held office at respondents' place of business and served as respondents' legal counsel. In any event, courts should decide on merits rather than technicalities where procedural lapses do not impair administration of justice, and a mere glitch in evidence of identity may be overlooked in the interest of justice.
• Existence of Employer-Employee Relationship: The complainant must prove employer-employee relationship by substantial evidence before the employer's burden to prove valid dismissal arises, with selection, payment, dismissal power, and particularly control as determinants. Control over approval or rejection of the end product is not the control contemplated; what matters is control over how the work itself is done, and one who works at his own pleasure without definite hours and is paid by result is not an employee. Here petitioner admitted reporting and leaving as he pleased, took a month-long leave on December 1-31, 2004 by mere notice while advising appointment of a replacement, and was shown by resume to hold concurrent consultancies, negating economic dependence. Pay slips without SSS and withholding deductions, a cash voucher describing payment as allowance, corroborating affidavits of company officers, and the rule that mere title as administrator and designation of payments as salaries are not determinative further negated employment.

• Control test — The most significant determinant of employer-employee relationship is the employer's power to control the work, premised on reservation of the right to control both the end achieved and the manner and means used to achieve that end. Approval or rejection of commissioned work product alone is not such control; control over how the work itself is done is required, and its absence here negated employment.
• Economic reality test — Where there is no written agreement, the totality of circumstances is examined with economic dependence of the worker on the employer as benchmark under the Labor Code. Petitioner's concurrent consultancy positions during his stint showed he was not wholly dependent on respondent company.
• Burden of proof in illegal dismissal — Each party must prove affirmative allegations by competent evidence, and while the employer bears the onus to prove valid cause for dismissal, the complainant must first establish employer-employee relationship by substantial evidence, defined as relevant evidence a reasonable mind might accept as adequate.
• Jurat and personal knowledge under notarial rules — A jurat requires personal appearance, personal knowledge by the notary or identification through competent evidence of identity, signing in presence, and oath; because of the disjunctive "or," personal knowledge dispenses with need for identification documents. The verification was thus valid where the affiant was personally known to the notary.
• Liberal construction of procedural rules — Procedural rules are tools to facilitate justice and strict application frustrating substantial justice must be eschewed; minor defects in verification not impairing proper administration of justice should be overlooked to decide cases on merits.
• Evidentiary value of affidavits in labor cases — Affidavits may be given evidentiary value even if affiants are not presented for cross-examination, consistent with the summary nature of proceedings and without mandatory application of technical rules of evidence. The affidavits attesting to consultancy status were thus credited as corroborated by other evidence.
• Title and salary designation not determinative — Mere title or designation in a corporation, including as administrator, and designation of payments as salaries, will not by themselves determine employment; salary is a general term for remuneration for services. The identification card, intra-company designation, and pay slips therefore did not prove employment.

• "If the notary public knows the affiants personally, he need not require them to show their valid identification cards." — States the rule excusing competent evidence of identity where personal knowledge exists, which sustained the verification in this case.
• "The power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship." — Defines the controlling benchmark under the control test applied to reject employment status.
• "Well settled is the rule that where a person who works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, no employer-employee relationship exists." — Provides the canonical formulation for absence of control, applied to petitioner's self-regulated hours and manner of work.
• "Lawsuits, unlike duels, are not to be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts. There should be no vested rights in technicalities." — Articulates the policy for excusing the alleged verification defect in favor of merits adjudication.

• Jandoquile vs. Revilla, Jr., A.C. No. 9514, April 10, 2013 — Followed as authority that a notary who personally knows affiants need not require valid identification cards, sustaining the jurat.
• Heirs of Amada Zaulda vs. Isaac Zaulda, G.R. No. 201234, March 17, 2014 — Followed for the principle that procedural lapses not impairing justice should yield to merits adjudication and that technicalities impeding justice deserve scant consideration.
• Legend Hotel (Manila) vs. Realuyo, G.R. No. 153511, July 18, 2012 — Followed on burden of proving employment by substantial evidence, factors of employment, non-review of facts with exception for conflicting LA-CA and NLRC findings, and formulation of the control test.
• Insular Life Assurance Co., Ltd. vs. National Labor Relations Commission, 259 Phil. 65 (1989) — Followed to hold no employment where the worker is not subject to rules governing performance, reporting time, or exclusive service.
• Okol vs. Slimmers World International, et al., 623 Phil. 13 (2009) — Followed for the rule that mere title or designation does not determine employer-employee relationship.
• Almirez vs. Infinite Loop Technology Corporation, 516 Phil. 705 (2006) — Followed for the rule that designation of payments as salaries is not determinative and salary is a general term for remuneration for services.
• Lepanto Consolidated Mining Co. vs. Dumapis, et al., 584 Phil. 100 (2008) — Followed to give evidentiary value to affidavits despite absence of cross-examination in summary labor proceedings.

• Section 6, Rule II, 2004 Rules on Notarial Practice — Defines jurat as requiring personal appearance, personal knowledge by the notary or identification through competent evidence of identity, signing in presence, and oath; applied to hold verification valid based on personal knowledge.
• Section 2(b), Rule IV, 2004 Rules on Notarial Practice — Prohibits notarial acts where the signatory is neither personally present nor personally known or otherwise identified through competent evidence of identity; applied with the disjunctive reading to excuse identification documents where personal knowledge exists.

Mariano C. Del Castillo, Martin S. Villarama, Jr., Bienvenido L. Reyes, Francis H. Jardeleza