[14] Villamaria v CA

by the employer”
|||
GR No. 165881| April 19, 2006 | Elements of the Relationship | Genoveza

Petitioner: Oscar Villamaria Doctrine: Employ-employee relationship is determined not by the

Respondents: Court of Appeals compensation or wages but on the presence or absence of control over the
Recit-Ready: means and method of the work
Villamaria is a jeepney operator in which he employs drivers and compensates
them on a boundary basis. Bustamante, one of the drivers, agreed to buy the FACTS:
jeepney under the boundary-hulog scheme where he would remit 450 pesos a
day for a period of 4 years. It was also agreed that Bustamante would make a 1. Villamaria was the owner of a business engaged in jeepney assembly.
downpayment of P10,000.00. It was also agreed that failure to pay the He then shifted to being an operator, retaining only four jeepneys
boundary for a week would mean confiscation and return of the jeepneys. wherein he employed drivers on a boundary basis
Villamaria took back the jeepney driven by Bustamante and barred the latter 2. Bustamante, one of the drivers, agreed to buy the jeepney under the
from driving the vehicle. The latter then filed an illegal dismissal case against boundary-hulog scheme where he would remit 450 pesos a day for a
the Villamarias. The Villamaria countered that there is no employer employee period of 4 years. It was also agreed that Bustamante would make a
relationship as the agreement between them turned the relationship into a downpayment of P10,000.00.
vendor vendee. The issue in this case is whether or not there is an employer- 3. The parties agreed that if Bustamante failed to pay the boundary-hulog
employee relationship between the Villamaria and Bustamante. The SC held for three days, Villamaria Motors would hold on to the vehicle until
yes because petitioner retained control of respondent's conduct as driver of Bustamante paid his arrears, including a penalty of P50.00 a day; in case
the vehicle. Citing the CA decision, the Court ratiocinated: “the existence of an Bustamante failed to remit the daily boundary-hulog for a period of one
employment relation is not dependent on how the worker is paid but on the week, the Kasunduan would cease to have legal effect and Bustamante
presence or absence of control over the means and method of the work; that would have to return the vehicle to Villamaria Motors.
the amount earned in excess of the "boundary hulog" is equivalent to wages; 4. The agreement also contained the following stipulations:
and that the fact that the power of dismissal was not mentioned in the ● Bustamante was authorized to operate the vehicle to transport
Kasunduan did not mean that private respondent never exercised such power, passengers only and not for other purposes
or could not exercise such power. Moreover, requiring petitioner to drive the ● Any fine that may be imposed by government authorities would be
unit for commercial use, or to wear an identification card, or to don a decent charged against his account
attire, or to park the vehicle in Villamaria Motors garage, or to inform Villamaria ● Pay for the cost of replacing any parts of the vehicle that would be lost
Motors about the fact that the unit would be going out to the province for two or damaged due to his negligence.
days of more, or to drive the unit carefully, etc. necessarily related to control ● Notify before repairs Villamaria Motors in case of serious damage
over the means by which the petitioner was to go about his work; that the ● Notify Villamaria Motors if the the jeepney is bo leased for more than
ruling applicable here is not Singer Sewing Machine but National Labor Union two days
since the latter case involved jeepney owners/operators and jeepney drivers, ● Bustamante will pay for vehicle registration
and that the fact that the "boundary" here represented installment payment of 5. On July 24, 2000, Villamaria took back the jeepney driven by Bustamante
the purchase price on the jeepney did not withdraw the relationship from that and barred the latter from driving the vehicle.|||
of employer-employee, in view of the overt presence of supervision and control
 6. On August 15, 2000, Bustamante filed a complaint for Illegal Dismissal driver,that is, the latter's daily earnings are remitted to the owner/operator less
against Villamaria and his wife Teresita. In his Position Paper, 8 the excess of the boundary which represents the driver's compensation. Under
Bustamante alleged that he was employed by Villamaria in July 1996 this system, the owner/operator exercises control and supervision over the
under the boundary system, where he was required to remit P450.00 a driver. It is unlike in lease of chattels where the lessor loses complete control
day. over the chattel leased but the lessee is still ultimately responsible for the
7. The Villaramaria countered this, stating that Bustamante failed to pay consequences of its use. The management of the business is still in the hands of
the requisite 450 a day and alleged that Bustamante abandoned the the owner/operator, who, being the holder of the certificate of public
vehicle for two weeks in a gasoline station convenience, must see to it that the driver follows the route prescribed by the
8. The spouses Villamaria argued that Bustamante was not illegally franchising and regulatory authority, and the rules promulgated with regard to the
dismissed since the Kasunduan executed on August 7, 1997 business operations. The fact that the driver does not receive fixed wages but
transformed the employer-employee relationship into that of vendor- only the excess of the "boundary" given to the owner/operator is not sufficient to
vendee. Hence, the spouses concluded, there was no legal basis to hold change the relationship between them.
them liable for illegal dismissal. |||
9. On March 15, 2002, the Labor Arbiter rendered judgment in favor of the The juridical relationship of employer-employee between petitioner and
spouses Villamaria and ordered the complaint dismissed||| for lack of respondent was not negated by the stipulations in the Kasunduan, considering
jurisdiction that petitioner retained control of respondent's conduct as driver of the vehicle.
10. CA reversed the NLRC decision As correctly ruled by the CA: The exercise of control by private respondent over
petitioner's conduct in operating the jeepney he was driving is inconsistent with
ISSUES: Whether or not there is an employer-employee relationship between private respondent's claim that he is, or was, not engaged in the transportation
Villamaria and Bustamante business; that, even if petitioner was allowed to let some other person drive the
unit, it was not shown that he did so; that the existence of an employment
RATIO: relation is not dependent on how the worker is paid but on the presence or
absence of control over the means and method of the work; that the amount
Yes. Under the boundary-hulog scheme incorporated in the Kasunduan, a dual
earned in excess of the "boundary hulog" is equivalent to wages; and that the fact
juridical relationship was created between petitioner and respondent: that of
that the power of dismissal was not mentioned in the Kasunduan did not mean
employer-employee and vendor-vendee. The Kasunduan did not extinguish the
that private respondent never exercised such power, or could not exercise such
employer-employee relationship of the parties.
power. Moreover, requiring petitioner to drive the unit for commercial use, or to
wear an identification card, or to don a decent attire, or to park the vehicle in
The Court ruled in National Labor Union v. Dinglasan that the jeepney
Villamaria Motors garage, or to inform Villamaria Motors about the fact that the
owner/operator-driver relationship under the boundary system is that of
unit would be going out to the province for two days of more, or to drive the unit
employer-employee and not lessor-lessee. This doctrine was affirmed, under
carefully, etc. necessarily related to control over the means by which the
similar factual settings, in Magboo v. Bernardo and Lantaco, Sr. v. Llamas , and
petitioner was to go about his work; that the ruling applicable here is not Singer
was analogously applied to govern the relationships between auto-calesa
Sewing Machine but National Labor Union since the latter case involved jeepney
owner/operator and driver, bus owner/operator and conductor, and taxi
owners/operators and jeepney drivers, and that the fact that the "boundary" here
owner/operator and driver
represented installment payment of the purchase price on the jeepney did not
withdraw the relationship from that of employer-employee, in view of the overt
The boundary system is a scheme by an owner/operator engaged in transporting
presence of supervision and control by the employer
passengers as a common carrier to primarily govern the compensation of the