ZANOTTE SHOES/Leonardo Lorenzo

vs.
NLRC, et. al
G.R. No. 100665 February 13, 1995
By Richard Troy A. Colmenares
USA College of Law
Start: 6/27/14 10:00:37 PM
Finish: 6/27/14 11:01:57 PM
Nature of the Case
A petition for certiorari against the order of NLRC sustaining the award of separation pay to respondents.

Facts
Private respondents filed a complaint on illegal dismissal and monetary claims plus damages and attorneys fees against Zanotte Shoes.
They allege: (1) that they work at least 12 hours daily, including Sundays and holidays when needed; (2) paid on a piece-work basis; (3) their
request to be made members of SSS angered petitioner Lorenzo; and (4) that when they demanded for a higher rate, they were denied entry
to work premises. Petitioners counter: (1) that their business operation is seasonal (coinciding with the opening of classes and during
Christmas holidays); (2) when heavy job-orders would come; and (3) that private respondents are engaged contractually and paid based on
their agreements. The labor arbiter rendered judgment, awarding separation pay to the private respondents. The same was sustained by
NLRC, thereby denying petitioners appeal and motion for reconsideration. Thus, this petition. Solicitor General (SG) agreed with the
existence of employer-employee (E2e) relationship between parties but held strong reservations on the award of separation pay because:
(1) there was neither dismissal [of employer]; (2) nor abandonment [of the workers]. NLRC submitted its own comment.

Issue(s)
(1). Is there E2e relationship between parties?
(2). Can the private respondents avail of separation pay?

Held
(1). Yes.

The Court did not disturb the findings of the Labor Arbiter and the NLRC on the existence of E2e relationship with finality absent
substantial evidence against the contrary findings. The work of private respondents is clearly related to, and in the pursuit of, the
principal business activity of petitioners. The indicia used is in establishing E2e relationship are as follows: (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
employee with respect to the result of the work to be done and to the means and methods by which the work to be done and
accomplished. Key to this issue is the existence of control, and not its actual exercise.

(2). No.

As sustained by NLRC, the Labor Arbiter concluded there was neither dismissal nor abandonment and noted that instead of being
ordered back to work, private respondents wanted to be given separation pay. The conciliation stage shows that Zanotte Shoes
offered reinstatement, and thus there is no dismissal to speak of. The private respondents are out of job for reasons not attributable
to the parties.

NLRC, on its part, noted that the Labor Arbiter saw that fear on the part of complainants to enter into a trap being laid before them
for indeed, it is peculiar for an employer who wants to get rid of its employees, to insist on reinstatement rather than a separation
pay scheme which the law allows them so they may be able to better manage their business. This is but mere speculation. The
Zanotte shoes has offered to accept back the workers and yet the workers refused to accept such offer. Thus, they cannot be
entitled to a separation pay.

is
^