JACK C.

VALENCIA
vs
CLSSIQUE VINYL PRODUCTS CORP

FACTS

On March 24, 2010, Valencia filed with the Labor Arbiter a Complaint 3 for Underpayment of Salary and Overtime Pay;
Non-Payment of Holiday Pay, Service Incentive Leave Pay, 13 th Month Pay; Regularization; Moral and Exemplary
Damages; and, Attorney's Fees against respondents Classique Vinyl Products Corporation (Classique Vinyl) and its
owner Johnny Chang (Chang) and/or respondent Cantingas Manpower Services (CMS). When Valencia, however,
asked permission from Chang to attend the hearing in connection the said complaint on April 17, 2010, the latter
allegedly scolded him and told him not to report for work anymore. Hence, Valencia amended his complaint to include
illegal dismissal.4

Valencia alleged that he applied for work with Classique Vinyl but was told by the latter's personnel office to proceed
to CMS, a local manpower agency, and therein submit the requirements for employment. CMS made him sign a
contract of employment6 but no copy of the same was given to him. He then proceeded to Classique Vinyl for
interview and thereafter started working for the company in June 2005 as felitizer operator. Valencia claimed that he
worked 12 hours a day from Monday to Saturday and was receiving ₱187.52 for the first eight hours and an overtime
pay of ₱117.20 for the next four hours, or beyond the then minimum wage mandated by law. Five months later, he
was made to serve as extruder operator but without the corresponding increase in sa1aiy. He was neither paid his
holiday pay, service incentive leave pay, and 13 th month pay. Worse, premiums for Philhealth and Pag-IBIG Fund
were not paid and his monthly deductions for Social Security System (SSS) premiums were not properly remitted. He
was also being deducted the amounts of ₱100.00 and ₱60.00 a week for Cash Bond and Agency Fee, respectively.
Valencia averred that his salary was paid on a weekly basis but his pay slips neither bore the name of Classique
Vinyl nor of CMS; that all the machineries that he was using/operating in connection with his work were all owned by
Classique Vinyl; and that his work was regularly supervised by Classique Vinyl. He further averred that he worked for
Classique Vinyl for four years until his dismissal. Hence, by operation of law, he had already attained the status of a
regular employee of his true employer, Classique Vinyl, since according to him, CMS is a mere labor-only contractor.
Valencia, therefore, argued that Classique Vinyl should be held guilty of illegal dismissal for failing to comply with the
twin-notice requirement when it dismissed him from the service and be made to pay for his monetary claims.

Classique Vinyl, for its part, denied having hired Valencia and instead pointed to CMS as the one who actually
selected, engaged, and contracted out Valencia's services. It averred that CMS would only deploy Valencia to
Classique Vinyl whenever there was an urgent specific task or temporary work and these occasions took place
sometime in the years 2005, 2007, 2009 and 2010. It stressed that Valencia's deployment to Classique Vinyl was
intermittent and limited to three to four months only in each specific year. Classique Vinyl further contended that
Valencia's performance was exclusively and directly supervised by CMS and that his wages and other benefits were
also paid by the said agency. It likewise denied dismissing Valencia from work and instead averred that on April 16,
2010, while deployed with Classique Vinyl, Valencia went on a prolonged absence from work for reasons only known
to him. In sum, Classique Vinyl asserted that there was no employer-employee relationship between it and Valencia,
hence, it could not have illegally dismissed the latter nor can it be held liable for Valencia's monetary claimsCMS, on
the other hand, denied any employer-employee relationship between it and Valencia. It contended that after it
deployed Valencia to Classique Vinyl, it was already the latter which exercised full control and supervision over him.
Also, Valencia's wages were paid by Classique Vinyl only that it was CMS which physically handed the same to
Valencia. LA dismissed the complain for lack of merit. NLRC dismissed Valencia's appeal and affirmed the decision
of the Labor Arbiter. When Valencia sought recourse from the CA, the said court rendered a Decision12 denying his
Petition for Certiorari and affirming the ruling of the NLRC.

ISSUE: WHETHER THERE EXISTS AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN CLASSIQUE VINYL

HELD: NO.

"It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, 'the quantum
of proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion.’ ‘The burden of proof rests upon the party who asserts the affirmative of
an issue’."21 Since it is Valencia here who is claiming to be an employee of Classique Vinyl, it is thus incumbent upon
him to proffer evidence to prove the existence of employer-employee relationship between them. He "needs to show
by substantial evidence that he was indeed an employee of the company against which he claims illegal
dismissal."22 Corollary, the burden to prove the elements of an employer-employee relationship, viz.: (1) the selection
and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control,
lies upon Valencia.

Indeed, there is no hard and fast rule designed to establish the aforementioned elements of employer-employee
relationship.23 "Any competent and relevant evidence to prove the relationship may be admitted." 24 In this case,
however, Valencia failed to present competent evidence, documentary or otherwise, to support his claimed employer-
employee relationship between him and Classique Vinyl. All he advanced were mere factual assertions unsupported
by proof.

In fact, most of Valencia's allegations even militate against his claim that Classique Vinyl was his true employer. For
one, Valencia stated in his Sinumpaang Salaysay that his application was actually received and processed by CMS
which required him to submit the necessary requirements for employment. Upon submission thereof, it was CMS that
caused him to sign an employment contract, which upon perusal, is actually a contract between him and CMS. It was
only after he was engaged as a contractual employee of CMS that he was deployed to Classique Vinyl. Clearly,
Valencia's selection and engagement was undertaken by CMS and conversely, this negates the existence of such
element insofar as Classique Vinyl is concerned. It bears to state, in addition, that as opposed to Valencia's
argument, the lack of notarization of the said employment contract did not adversely affect its veracity and
effectiveness since significantly, Valencia does not deny having signed the same.25 The CA, therefore, did not err in
relying on the said employment contract in its determination of the merits of this case..

Aside from the afore-mentioned inconsistent allegations of Valencia, his claim that his work was supervised by
Classique Vinyl does not hold water. Again, the Court finds the same as a self-serving assertion unworthy of
credence. On the other hand, the employment contract which Valencia signed with CMS categorically states that the
latter possessed not only the power of control but also of dismissal over him, viz.:

xxxx

2. That the employee shall observe all rules and regulations of the company during the period of employment and
[the] lawful instructions of the management or its representatives. Failure to do so or if performance is below
company standards, management [has] the right to immediately cancel this contract.

x x x x30

Clearly, therefore, no error can be attributed on the part of the labor tribunals and the CA in ruling out the existence of
employer-employee relationship between Valencia and Classique Vinyl.

Further, the Court finds untenable Valencia's argument that neither Classique Vinyl nor CMS was able to present
proof that the latter is a legitimate independent contractor and therefore, unable to rebut the presumption that a
contractor is presumed to be a labor-only contractor. "Genera1ly, the presumption is that the contractor is a labor-only
[contractor] unless such contractor overcomes the burden of proving that it has the substantial capital, investment,
tools and the lik.e."31 Here, to prove that CMS was a legitimate contractor, Classique Vinyl presented the former's
Certificate of Registration32 with the Department of Trade and Industry and, License 33 as private recruitment and
placement agency from the Department of Labor and Employment. Indeed, these documents are not conclusive
evidence of the status of CMS as a contractor. However, such fact of registration of CMS prevented the legal
presumption of it being a mere labor-only contractor from arising.34 In any event, it must be stressed that "in labor-
only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees had been directly employed by the
principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the
rightful claims of the employees."35 The facts of this case, however, failed to establish that there is any circumvention
of labor laws as to call for the creation by the statute of an employer-employee relationship between Classique Vinyl
and Valencia. In fact, even as against CMS, Valencia's money claims has been debunked by the labor tribunals and
the CA. Again, the Court is not inclined to disturb the same.

In view of the above disquisition, the Court finds no necessity to dwell on the issue of whether Valencia was illegally
dismissed by Classique Vinyl and whether the latter is liable for Valencia's money claims.