Sumifru (Philippines) Corp. vs. Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUFA-NAFLU-KMU)

Factual findings of quasi-judicial agencies, such as the DOLE, when supported by substantial evidence, are entitled to great respect and bind the Court in a Rule 45 petition, which is limited to questions of law. The Court's review in labor cases is confined to determining whether the Court of Appeals correctly resolved the presence or absence of grave abuse of discretion on the part of the DOLE Secretary, not to re-evaluate the sufficiency of the evidence.

Sumifru (Philippines) Corp. is a domestic corporation and the surviving entity after its merger with Fresh Banana Agricultural Corporation (FBAC) in 2008. FBAC was engaged in the buying, marketing, and exportation of Cavendish bananas. Respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUFA) is a legitimate labor organization affiliated with the National Federation of Labor Unions and Kilusang Mayo Uno. The dispute concerns the conduct of a certification election among the rank-and-file employees of Packing Plant 90 (PP 90), which requires a prior determination of who the true employer of those workers is.

Sumifru (Philippines) Corp. is a domestic corporation and the surviving entity after its merger with Fresh Banana Agricultural Corporation (FBAC) in 2008. FBAC was engaged in the buying, marketing, and exportation of Cavendish bananas. Respondent Nagkahiusang Mamumuo sa Suyapa Farm (NAMASUFA) is a legitimate labor organization affiliated with the National Federation of Labor Unions and Kilusang Mayo Uno.

On March 14, 2008, NAMASUFA filed a Petition for Certification Election before the DOLE Regional Office No. XI in Davao City, seeking to represent all rank-and-file employees, numbering around one hundred forty, of packing plant 90 (PP 90) of FBAC. NAMASUFA claimed that there was no existing union in the establishment. On May 9, 2008, FBAC filed an Opposition, arguing that no employer-employee relationship existed between it and the workers, alleging that NAMASUFA's members were actually employees of A2Y Contracting Services (A2Y), a duly licensed independent contractor, as evidenced by A2Y's payroll records. In its Comment, NAMASUFA countered that its members were former workers of Stanfilco before FBAC took over its operations sometime in 2002, and that these former employees were required to join the Compostela Banana Packing Plant Workers' Cooperative (CBPPWC) before they were hired and allowed to work at FBAC's packing plant. NAMASUFA further alleged that its members had been working at PP 90 long before A2Y came. On June 20, 2008, pending resolution of the petition, FBAC was merged with Sumifru, the latter being the surviving corporation.

On July 28, 2008, the DOLE Med-Arbiter issued an Order granting the petition for certification election and declaring Sumifru as the employer of the workers concerned. Applying the four-fold test, the Med-Arbiter found that FBAC's staff advised interested applicants to become members of CBPPWC first and obtain a recommendation from it; that the payment of wages by A2Y was at best an administrative arrangement, as the payroll summary lacked relevant information such as the employee's rate of pay, deductions, and amount actually paid; that FBAC imposed disciplinary measures against erring workers, proving its disciplinary authority; and that FBAC exercised control over the workers by giving instructions on how to perform their work, requiring them to fill up monitoring sheets, and supplying the materials used in the packing plant. The Med-Arbiter concluded that FBAC was the real employer and that its reliance on A2Y was "nothing but an elaborate scheme to deprive them their right to self-organization."

Sumifru appealed to the DOLE Secretary, who dismissed the appeal on February 8, 2010. The DOLE Secretary ruled that CBPPWC was supplying workers to FBAC (now Sumifru), that FBAC required applicants to become cooperative members first, and that Sumifru failed to prove that CBPPWC was duly registered under Department Order No. 18-02 or that it possessed substantial capital or investment. The DOLE Secretary found CBPPWC to be engaged in labor-only contracting, making Sumifru the true employer. The alleged partnership agreement between CBPPWC and A2Y was deemed self-serving for lack of evidence. Sumifru then filed a Petition for Certiorari with the Court of Appeals, which dismissed the petition on February 8, 2012, finding no grave abuse of discretion on the part of the DOLE Secretary. The CA enumerated the evidence of Sumifru's control over the workers, including memoranda on standardized breaktime, "no helmet, no entry" and "no ID, no entry" policies, attendance sheets for meetings and seminars called by FBAC, and various checklists and surveys issued by FBAC. The CA accorded respect to the findings of fact of the DOLE Secretary, given the latter's special knowledge and expertise over matters under its jurisdiction. Sumifru's motion for reconsideration was denied on May 18, 2012, leading to the instant petition.

• Question of Fact / Rule 45 Limitation: Sumifru argued that the CA committed palpable mistake and ruled contrary to law and settled jurisprudence in affirming the DOLE Secretary's findings, and that the Court should re-calibrate the factual bases of the lower tribunals.
• Independent Contractor: Sumifru argued that A2Y Contracting Services was engaged either by the Upper Siocon Growers or the Cooperative for the packing operations at PP 90, and that no employer-employee relationship existed between it and the workers.
• Identity of Employer: Sumifru argued that even assuming the Cooperative and/or A2Y were not legitimate labor contractors, only the Upper Siocon Growers, and not Sumifru, may be deemed the employer of the workers at PP 90.
• Misapprehension of Facts: Sumifru argued that the DOLE committed grave and palpable mistake in grossly misapprehending the facts and evidence on record, which, if properly appreciated, would establish that Sumifru is not the employer of NAMASUFA's members.
• Alleged Inconsistencies: Sumifru argued that the reliance on alleged inconsistencies in its pleadings was misplaced, as there were no inconsistencies at all.

N/A — The decision does not recount the respondent's arguments before the Supreme Court.

• Scope of Review: Whether the Court of Appeals committed palpable mistake and ruled contrary to law and settled jurisprudence in affirming the findings of the DOLE Secretary that Sumifru is the employer of the workers at PP 90.
• Employer-Employee Relationship: Whether Sumifru, rather than A2Y Contracting Services or the Upper Siocon Growers, is the true employer of the members of NAMASUFA working at PP 90.

• Scope of Review: No. The petition raised only questions of fact, which are not proper in a petition for review on certiorari under Rule 45. The Court's review is limited to determining whether the CA correctly resolved the presence or absence of grave abuse of discretion on the part of the DOLE Secretary.
• Employer-Employee Relationship: Yes. The DOLE Secretary's ruling that Sumifru was the employer of the workers was supported by substantial evidence, particularly the element of control, and the CA correctly found no whimsical or capricious exercise of judgment on the part of the DOLE Secretary.

• Scope of Review: The Court emphasized that in a petition for review on certiorari under Rule 45, it is limited to questions of law. In labor cases, the review is confined to whether the CA correctly determined the presence or absence of grave abuse of discretion on the part of the DOLE Secretary, not whether the latter's decision on the merits was strictly correct. Citing Holy Child Catholic School vs. Sta. Tomas, the Court stated that the question is not whether the CA committed grave abuse of discretion, but whether it correctly determined the existence or want of grave abuse of discretion on the part of the SOLE. The Court also cited FFW vs. Court of Appeals for the rule that factual findings of quasi-judicial agencies, when supported by substantial evidence, are entitled to great respect, and that judicial review does not extend to evaluating the sufficiency of evidence or re-calibrating the evidence all over again, especially where the findings of the labor official and the appellate court coincide.

• Employer-Employee Relationship: The Court found that the CA was correct in finding that the DOLE Secretary did not commit any whimsical or capricious exercise of judgment. Substantial evidence was defined as "that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise." The Med-Arbiter found, based on documents submitted by the parties, that Sumifru gave instructions to the workers on how to go about their work, what time they were supposed to report for work, required monitoring sheets as they went about their jobs, and provided the materials used in the packing plant. The DOLE Secretary relied on these documents and found that the element of control was present because Sumifru required monitoring sheets and imposed disciplinary actions for non-compliance with "No Helmet - No Entry" and "No ID - No Entry" policies. The CA, even as it recognized that the findings of fact of the DOLE Secretary and the Med-Arbiter were binding, went further and itself reviewed the records, arriving at the same conclusion. The Court held that it could not re-calibrate the factual bases of the Med-Arbiter, DOLE Secretary, and the CA, especially where the petition failed to show any whimsicality or capriciousness in the exercise of judgment in finding the existence of an employer-employee relationship.

• Four-Fold Test — The test to determine the existence of an employer-employee relationship, consisting of: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee's conduct. The most important element is the employer's control of the employee's conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. The Court applied this test in affirming the findings of the Med-Arbiter and DOLE Secretary that Sumifru was the true employer of the workers at PP 90.

• Labor-Only Contracting — A contractor is engaged in labor-only contracting when it does not possess substantial capital or investment in relation to the work performed, and the employees it places are performing activities distinct and independent from the main business of the principal. The DOLE Secretary found CBPPWC to be engaged in labor-only contracting because Sumifru failed to prove that CBPPWC was duly registered under Department Order No. 18-02 or that it possessed substantial capital or investment, and the workers performed activities not distinct from Sumifru's main business.

• Substantial Evidence Rule — Substantial evidence is "that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise." The Court applied this standard in reviewing the factual findings of the DOLE Secretary, which were entitled to great respect and finality when supported by substantial evidence.

• Rule 45 Limitation — A petition for review on certiorari under Rule 45 of the Rules of Court shall raise only questions of law. The Court applied this rule in refusing to re-calibrate the factual findings of the Med-Arbiter, DOLE Secretary, and CA, which were all supported by substantial evidence.

• "Our review is, therefore, limited to the determination of whether the CA correctly resolved the presence or absence of grave abuse of discretion in the decision of the [Secretary of Labor and Employment (SOLE)], not on the basis of whether the latter's decision on the merits of the case was strictly correct. Whether the CA committed grave abuse of discretion is not what is ruled upon but whether it correctly determined the existence or want of grave abuse of discretion on the part of the SOLE." — This passage, quoted from Holy Child Catholic School vs. Sta. Tomas, defines the limited scope of judicial review in labor cases and is central to the Court's ruling.

• "We take this occasion to emphasize that the office of a petition for review on certiorari under Rule 45 of the Rules of Court requires that it shall raise only questions of law. The factual findings by quasi-judicial agencies, such as the Department of Labor and Employment, when supported by substantial evidence, are entitled to great respect in view of their expertise in their respective fields." — This passage, quoted from FFW vs. Court of Appeals, articulates the doctrine on the binding effect of factual findings of quasi-judicial agencies and the Rule 45 limitation.

• "As defined, substantial evidence is 'that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.'" — This passage defines the substantial evidence standard applied by the Court in reviewing the DOLE Secretary's factual findings.

• Holy Child Catholic School vs. Sta. Tomas, 714 Phil. 427 (2013) — Cited as controlling authority for the limited scope of judicial review in labor cases, specifically that the Court reviews only whether the CA correctly determined the presence or absence of grave abuse of discretion on the part of the SOLE.
• FFW vs. Court of Appeals, 401 Phil. 776 (2000) — Cited as controlling authority for the rule that factual findings of quasi-judicial agencies, when supported by substantial evidence, are entitled to great respect and bind the Court, and that Rule 45 petitions are limited to questions of law.
• T & H Shopfitters Corp./Gin Queen Corp. vs. T & H Shopfitters Corp./Gin Queen Workers Union, 728 Phil. 168 (2014) — Cited as the source of the definition of substantial evidence.

• Rule 45, Rules of Court — The provision governing petitions for review on certiorari to the Supreme Court, which requires that only questions of law be raised. The Court applied this rule in refusing to re-calibrate the factual findings of the lower tribunals.
• Department Order No. 18-02 — The DOLE issuance governing the registration and qualification of contractors. The DOLE Secretary noted that Sumifru failed to prove that CBPPWC was duly registered under this order, supporting the finding of labor-only contracting.

Sereno, C.J. (Chairperson), Leonardo-De Castro, J., Del Castillo, J., and Perlas-Bernabe, J., concurred in the decision.

N/A — No dissenting opinions were noted in the provided text.