FIRST DIVISION

[G.R. No. 95011. April 22, 1991.]

M.Y. SAN BISCUITS INC. , petitioner, vs. ACTING SECRETARY

BIENVENIDO E. LAGUESMA and PHILIPPINE TRANSPORT AND
GENERAL WORKERS ORGANIZATIONS , respondents.

Ambrosio B. De Luna for petitioner.

Pedro A. Lopez for private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; BUREAU OF LABOR

RELATIONS; MED-ARBITER; WITH ORIGINAL AND EXCLUSIVE JURISDICTION TO
DETERMINE EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP. — Under Article
226 of the Labor Code, the BLR has the original and exclusive jurisdiction to inter alia,
decide all disputes, grievances or problems arising from or affecting labor-
management relations in all workplaces whether agricultural or non-agricultural.
Necessarily, in the exercise of this jurisdiction over labor-management relations, the
med-arbiter has the authority, original and exclusive, to determine the existence of an
employer-employee relationship between the parties.
2. ID.; ID.; ID.; ID.; ID.; RESOLUTION OF CERTIFICATION ELECTION CASES. —
Apropos to the present case, once there is a determination as to the existence of such
relationship, the med-arbiter can then decide the certi cation election case. As the
authority to determine the employer-employee relationship is necessary and
indispensable in the exercise of jurisdiction by the med-arbiter, his nding thereon may
only be reviewed and reversed by the Secretary of Labor who exercises appellate
jurisdiction under Article 259 of the Labor Code, as amended.

DECISION

GANCAYCO , J : p

The issue presented by this petition is whether or not the med-arbiter or the
Secretary of Labor and Employment has the authority to determine the existence of an
employer-employee relationship between the parties in a petition for certi cation
election.
On May 12, 1989, private respondent Philippine Transport and General Workers
Organization (Union for short) le a petition for certi cation election as a bargaining
agent for a group of employees of petitioner M.Y. San Biscuits, Inc. before the med-
arbiter of the Department of Labor and Employment (DOLE).
After the parties submitted their position papers, on August 25, 1989, the med-
arbiter issued an order dismissing the petition for lack of merit as there is no employer-
employee relationship between petitioner and the delivery drivers, helpers represented
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 by respondent Union. 1
Meanwhile, respondent Union and several others led before the NLRC Branch of
Region No. IV a complaint for underpayment of wages; non-payment of 13th month
pay; service incentive pay and COLA; damages and attorney's fees.
On February 9, 1990, the labor arbiter rendered a decision dismissing the said
complaint on the ground that there is no employer-employee relationship between the
parties. 2 On February 26, 1990 private respondent appealed to the National Labor
Relations Commission (NLRC). prcd

In the certi cation election case, private respondent appealed to the Secretary of
DOLE. On December 15, 1989, then DOLE Secretary Franklin Drilon promulgated a
resolution reversing the decision of the med-arbiter, thus nding that there exists an
employer-employee relationship between petitioner and private respondent. 3
Petitioner led a motion for reconsideration of this resolution on January 22,
1990 and a manifestation on February 12, 1990 asking that action be held in abeyance
pending consideration of the other case where the labor arbiter rendered a decision
declaring the absence of an employer-employee relationship between the parties. 4 On
April 16, 1990, public respondent issued an order denying the relief sought in the
manifestation of petitioner. 5 Petitioner led a motion for reconsideration therefrom 6
but it was denied on June 18, 1990. 7
Thus, this petition for certiorari with prayer for the issuance of a writ of
preliminary prohibitory injunction and temporary restraining order based on the
following grounds:
"I. The Acting Secretary Bienvenido E. Laguesma abused his discretion in
denying the Manifestation led by Petitioner on the ground of a prejudicial
question involving the issue of employer-employee relationship pending before
the National Labor Relations Commission (NLRC).

"II. The Hon. Secretary has no jurisdiction to determine the existence of [an]
employer-employee relationship between petitioner and private respondent." 8

On September 19, 1990, the Court, without giving due course to the petition,
required the respondents to comment thereon within ten (10) days from notice and
granted the prayer for the issuance of a temporary restraining order enjoining the
execution of the questioned orders dated December 15, 1989 and June 18, 1990.
The main thrust of the petition is that the public respondent Secretary has no
jurisdiction to determine the existence of an employer-employee relationship between
the parties and that its determination is vested in the NLRC.
The petition must fail.
Under Article 226 of the Labor Code, as amended, the Bureau of Labor Relations
(BLR), of which the med-arbiter is an officer, has the following jurisdiction —
"ART. 226. Bureau of Labor Relations. — The Bureau of Labor Relations and
the Labor Relations divisions in the regional o ces of the Department of Labor
shall have original and exclusive authority to act, at their own initiative or upon
request of either or both parties, on all inter-union and intra-union conflicts, and all
disputes, grievances or problems arising from or affecting labor-management
relations in all work places whether agricultural or non-agricultural, except those
arising from the implementation or interpretation of collective bargaining
agreements which shall be the subject of grievance procedure and/or voluntary
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 arbitration. LibLex

"The Bureau shall have fteen (15) working days to act on labor cases before it,
subject to extension by agreement of the parties." (Emphasis supplied.)

From the foregoing, the BLR has the original and exclusive jurisdiction to inter
alia, decide all disputes, grievances or problems arising from or affecting labor-
management relations in all workplaces whether agricultural or non-agricultural.
Necessarily, in the exercise of this jurisdiction over labor-management relations, the
med-arbiter has the authority, original and exclusive, to determine the existence of an
employer-employee relationship between the parties.
Apropos to the present case, once there is a determination as to the existence of
such a relationship, the med-arbiter can then decide the certi cation election case. 9 As
the authority to determine the employer-employee relationship is necessary and
indispensable in the exercise of jurisdiction by the med-arbiter, his nding thereon may
only be reviewed and reversed by the Secretary of Labor who exercises appellate
jurisdiction under Article 259 of the Labor Code, as amended, which provides —
"ART. 259. Appeal from certi cation election orders . — Any party to an
election may appeal the order or results of the election as determined by the Med-
Arbiter directly to the Secretary of Labor and Employment on the ground that the
rules and regulations or parts thereof established by the Secretary of Labor and
Employment for the conduct of the election have been violated. Such appeal shall
be decided within fifteen (15) calendar days."

When as in this case Secretary Drilon of DOLE rendered a resolution dated

December 15, 1989 reversing the order of the med-arbiter dated August 25, 1989 by
declaring the existence of an employer-employee relationship between the parties, such
nding cannot be rendered nugatory by a contrary nding of the labor arbiter in a
separate dispute for money claims between same parties.
It is absurd to suggest that the med-arbiter and Secretary of Labor cannot make
their own independent nding as to the existence of such relationship and must have to
rely and wait for such a determination by the labor arbiter or NLRC in a separate
proceeding. For then, given a situation where there is no separate complaint led with
the labor arbiter, the med-arbiter and/or the Secretary of Labor can never decide a
certi cation election case or any labor-management dispute properly brought before
them as they have no authority to determine the existence of an employer-employee
relationship. Such a proposition is, to say the least, anomalous.
Correctly indeed, the Secretary of Labor denied the prayer in the manifestation of
petitioner to await the resolution of the NLRC as to the existence of such employer-
employee relationship. LLphil

The Court reproduces with approval the ndings and conclusions of the
Secretary in the said resolution dated December 15, 1989.
"The sole issue to be resolved is whether or not there exists an employer-employee
relationship between members of petitioning union and the company.
"After a careful review of the records of the case, we find for the appellant.

"It has been well settled in jurisprudence that the factors to be considered in
determining the existence of employer-employee relationship are as follows: (a)
selection and engagement of the employees; (b) the payment of wages; (c) the
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 process [sic] of dismissal; and, (d) the employer's power to control the employee
with respect to the means and methods [with] which the work is to be
accomplished.
"On the rst factor, (selection and engagement of the employer), [sic] it is very
apparent from the records that the personnel of M.Y. San Biscuits are the one
responsible for hiring of employees. Assuming, it is the salesman that engages
his own driver, it could be inferred however that such authority emanates from the
respondent.
"On the second factor (payment of wages), while the respondent tried to impress
upon us that the drivers/helpers are not in the payroll of the company and,
therefore, not receiving salaries from it, this at best is but an administrative
arrangement in order to save the respondent from the burden of keeping records
and other indirect cost.

On the third factor, (the power of dismissal), it is very clear that herein respondent
is the authority that imposes disciplinary measures against erring drivers. This
alone proves that it wields disciplinary authority over the drivers/helpers.
Finally, on the fourth factor which is the control test, the fact that the respondent
gives daily instructions to the drivers on how to go about their work is su cient
indication that it exercises control over the movements of the drivers/helpers. The
drivers are instructed as to what time they are supposed to report to the office and
what time they are supposed to return.

Viewed from the above circumstances, it is every clear that the herein respondent
is the real employer of the drivers/helpers. They are in truth and in fact the
employees of the respondent and its attempt to seek refuge on its salesmen as
the ostensible employer of the drivers/helpers was nothing but an elaborate
scheme to deprive drivers/helpers their right to self-organization.

WHEREFORE, premises considered, the appeal is hereby granted and the Med-
Arbiter's Order dated 25 August 1989 vacated, and in lieu thereof, a new one is
entered calling for the conduct of a certi cation election among the
drivers/helpers of M.Y. San Biscuits with the following as choices:

1. Philippine Transport and General Workers Organization (PTGWO); and,

2. No Union.
SO ORDERED." 1 0

On September 19, 1990, the NLRC promulgated its resolution reversing the
decision of the labor arbiter and nding the existence of an employer-employee
relationship between the parties. 1 1 A motion for reconsideration filed by petitioner was
denied in a resolution dated November 16, 1990. 1 2
On all counts, the petition must be struck down.
WHEREFORE, the petition is DISMISSED. The temporary restraining order which
the Court issued on September 19, 1990 is hereby lifted, with costs against petitioner.
SO ORDERED.
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
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 Footnotes
1. Annex D to the Petition.
2. Annex E to the Petition.

3. Annex F to the Petition.

4. Annex H to the Petition.

5. Annex I to the Petition.

6. Annex J to the Petition.

7. Annex K to the Petition.

8. Page 6, Rollo.
9. Besa vs. Trajano, 146 SCRA 501 (1987).

10. Annex G to the Petition; pages 162 to 163, Rollo.

11. Pages 132 to 143, Rollo.

12. Pages 145 to 147, Rollo.

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