Thursday, January 5, 2017

Case Digest: ALPS Transportation v. Rodriguez


G.R. No. 186732               June 13, 2013


Respondent Elpidio Rodriguez (Rodriguez) was previously employed as a bus conductor. He entered into an employment contract with Contact Tours Manpower and was assigned to work with the bus company ALPS Transportation, owned by Alfredo Perez as a sole proprietor.

During the course of his employment, Rodriguez was found to have committed irregularities on 26 April 2003, 12 October 2003, and 26 January 2005. The latest irregularity report dated 26 January 2005 stated that he had collected bus fares without issuing corresponding tickets to passengers. The report was annotated with the word "Terminate."

Rodriguez alleged that he was dismissed from his employment on 27 January 2005, or the day after the issuance of the last irregularity report. However, he did not receive any written notice of termination. He went back to the bus company a number of times, but it refused to readmit him.
Rodriguez then filed before the labor arbiter a complaint for illegal dismissal.

In response to the complaint, ALPS and Perez stated that they did not have any prerogative to dismiss Rodriguez, as he was not their employee, but that of Contact Tours.


1. Whether Rodriguez was illegally dismissed;
2. Assuming Rodriguez was illegally dismissed, whether ALPS Transportation and/or Alfredo E. Perez is liable for the dismissal.

1.     Yes
2.     Yes.

For a dismissal to be valid, the rule is that the employer must comply with both substantive and procedural due process requirements. Substantive due process requires that the dismissal must be pursuant to either a just or an authorized cause under the Labor Code. Procedural due process, on the other hand, mandates that the employer must observe the twin requirements of notice and hearing before a dismissal can be effected.

Evidence must, therefore, be substantial and not based on mere surmises or conjectures for to allow an employer to terminate the employment of a worker based on mere allegations places the latter in an uncertain situation and at the sole mercy of the employer. An accusation that is not substantiated will not ripen into a holding that there is just cause for dismissal. A mere accusation of wrongdoing or a mere pronouncement of lack of confidence is not sufficient cause for a valid dismissal of an employee. Thus, the failure of the petitioners to convincingly show that the respondent misappropriated the bus fares renders the dismissal to be without a valid cause. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter.

Turning to the issue of procedural due process, both parties agree that Rodriguez was not given a written notice specifying the grounds for his termination and giving him a reasonable opportunity to explain his side.

As to the contention of ALPS that Rodriguez is an employee of Contact Tours, the presumption is that a contractor is a labor-only contractor unless he overcomes the burden of proving that it has substantial capital, investment, tools, and the like. While ALPS Transportation is not the contractor itself, since it is invoking Contact Tours status as a legitimate job contractor in order to avoid liability, it bears the burden of proving that Contact Tours is an independent contractor.

However, aside from making bare assertions and offering the Kasunduan between Rodriguez and Contact Tours in evidence, ALPS Transportation has failed to present any proof to substantiate the former's status as a legitimate job contractor. Hence, the legal presumption that Contact Tours is a labor-only contractor has not been overcome.

As a labor-only contractor, therefore, Contact Tours is deemed to be an agent of ALPS Transportation. Thus, the latter is responsible to Contact Tours' employees in the same manner and to the same extent as if they were directly employed by the bus company.

Finally, since ALPS Transportation is a sole proprietorship owned by Perez, it is he who must be held liable for the payment of backwages to Rodriguez. A sole proprietorship does not possess a juridical personality separate and distinct from that of the owner of the enterprise. Thus, the owner has unlimited personal liability for all the debts and obligations of the business, and it is against him that a decision for illegal dismissal is to be enforced.

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