ALIPIO R.

RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME BARBIN, NICANOR
FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN, petitioners,

vs.

NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or

ARSENIO DE GUZMAN, respondents.

G.R. No. L-72654-61 January 22, 1990

Facts: Records show that the petitioners were the fishermen-crew members of 7/B Sandyman II,
one of several fishing vessels owned and operated by private respondent De Guzman Fishing
Enterprises engaged in the fishing business at Camaligan, Camarines Sur. For services rendered
petitioners were paid on percentage commission basis in cash and received a minimum income
per week. On September 11, 1983 upon arrival at the fishing port, petitioners were told to go to
the police station for investigation of the report that they sold some of their fish-catch at midsea
to the prejudice of private respondent. Petitioners denied the charge and claimed that the same
was a countermove to them having formed a labor union. No witnesses was presented and no
formal criminal complain filed but the private respondent refused to allow the petitioners to
return to work. Petitioners filed a complaint for illegal dismissal in the ministry of labor and
employment. Respondent denied the claim, that there was no employer-employee relationship
and they were engage in joint venture. The labor arbiter dismissed the complaint. On appeal, the
NLRC affirmed the dismissal.

Issue: Whether or not there exist and employer-employee relationship.

Held: We rule in favor of petitioners.

We have consistently ruled that in determining the existence of an employer-employee

relationship, the elements that are generally considered are the following (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 with respect to the means and methods by which the
work is to be accomplished. The employment relation arises from contract of hire, express or
implied. In the absence of hiring, no actual employer-employee relation could exist. From the
four (4) elements mentioned, We have generally relied on the so-called right-of-control test
where the person for whom the services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching such end. The test calls merely for
the existence of the right to control the manner of doing the work, not the actual exercise of the
right.

HIRING Records show that in the instant case, as distinguished from the Pajarillo case where the
crew members are under no obligation to remain in the outfit for any definite period as one can
be the crew member of an outfit for one day and be the member of the crew of another vessel
the next day, the herein petitioners, on the other hand, were directly hired by private
respondent, through its general manager, Arsenio de Guzman, and its operations manager,
Conrado de Guzman and have been under the employ of private respondent for a period of 8-15
years in various capacities, except for Laurente Bautu who was hired on August 3, 1983 as
assistant engineer. Petitioner Alipio Ruga was hired on September 29, 1974 as patron/captain of
the fishing vessel; Eladio Calderon started as a mechanic on April 16, 1968 until he was
promoted as chief engineer of the fishing vessel; Jose Parma was employed on September 29,
1974 as assistant engineer; Jaime Barbin started as a pilot of the motor boat until he was
transferred as a master fisherman to the fishing vessel 7/B Sandyman II; Philip Cervantes was
hired as winchman on August 1, 1972 while Eleuterio Barbin was hired as winchman on April 15,
1976.

PAYMENT OF WAGE Aside from performing activities usually necessary and desirable in the
business of private respondent, it must be noted that petitioners received compensation on a
percentage commission based on the gross sale of the fish-catch i.e. 13% of the proceeds of the
sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip,
otherwise only 10% of the proceeds of the sale. The claim of private respondent, which was
given credence by public respondent, that petitioners get paid in the form of share in the fish-
catch which the patron/pilot as head of the team distributes to his crew members in accordance
with their own understanding is not supported by recorded evidence. Except that such claim
appears as an allegation in private respondent's position paper, there is nothing in the records
showing such a sharing scheme as preferred by private respondent.

FIRING Furthermore, the fact that on mere suspicion based on the reports that petitioners
allegedly sold their fish-catch at midsea without the knowledge and consent of private
respondent, petitioners were unjustifiably not allowed to board the fishing vessel on September
11, 1983 to resume their activities without giving them the opportunity to air their side on the
accusation against them unmistakably reveals the disciplinary power exercised by private
respondent over them and the corresponding sanction imposed in case of violation of any of its
rules and regulations. The virtual dismissal of petitioners from their employment was
characterized by undue haste when less extreme measures consistent with the requirements of
due process should have been first exhausted. In that sense, the dismissal of petitioners was
tainted with illegality.

CONTROL The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority for
the ruling that a "joint fishing venture" existed between private respondent and petitioners is
not applicable in the instant case. There is neither light of control nor actual exercise of such
right on the part of the boat-owners in the Pajarillo case, where the Court found that the pilots
therein are not under the order of the boat-owners as regards their employment; that they go
out to sea not upon directions of the boat-owners, but upon their own volition as to when, how
long and where to go fishing; that the boat-owners do not in any way control the crew-members
with whom the former have no relationship whatsoever; that they simply join every trip for
which the pilots allow them, without any reference to the owners of the vessel; and that they
only share in their own catch produced by their own efforts.
 The aforementioned circumstances obtaining in Pajarillo case do not exist in the instant
case. The conduct of the fishing operations was undisputably shown by the testimony of Alipio
Ruga, the patron/pilot of 7/B Sandyman II, to be under the control and supervision of private
respondent's operations manager. Matters dealing on the fixing of the schedule of the fishing
trip and the time to return to the fishing port were shown to be the prerogative of private
respondent. While performing the fishing operations, petitioners received instructions via a
single-side band radio from private respondent's operations manager who called the
patron/pilot in the morning. They are told to report their activities, their position, and the
number of tubes of fish-catch in one day. Clearly thus, the conduct of the fishing operations was
monitored by private respondent thru the patron/pilot of 7/B Sandyman II who is responsible for
disseminating the instructions to the crew members.

SC PETITION IS GRANTED