Dy Keh Beng -vs- International Labor and Maritime Union of the Philippines, et al.

FACTS:

A charge for ULP was filed against Dy Keh beng for discriminatory acts within the meaning of RA 875, Section
4(a.1) and 4(a.2) by dismissing Carlos N. Solano and Ricardo Tudla for their union activities. A case was filed in court
and Dy Keh Beng contended that he did not know Tudla and that Solano was not his employee because the latter came
to the establishment only when there was work which he did on pakiaw basis, each piece of work being done under a
separate contract. TheCIR held that an Er-Ee relationship existed between Dy Keh Beng and complainants Tudla and
Solano, although Solano was admitted to have worked on piece basis. Petitioner anchors his contention of the non-
existence of employee-employer relationship on the control test., arguing that there was no evidence to show that
petitioner had the right to direct the manner and method of respondents work.

ISSUE :

Whether or not there existed an employee-employee relation between petitioner DyKeh Beng and respondents
Solano and Tudla.

HELD:

Yes. Evidence showed that the work of Solano and Tudla was continuous except inthe event of illness, although
their services were compensated on piece basis. The control test calls for the existence of the right to control the
manner of doing the work, not the actual exercise of the right considering that Dy Keh Beng is engaged in the
manufacture of baskets known as kaing, those working under Dy would be subject to Dys specifications such as the
size and quality of the kaing. And since the laborers are done at Dys establishments, it could be inferred that Dy could
easily exercise control upon them. As to the contention that Solano was not an employee because he worked on piece
basis, the court ruled that it should be determined that if indeed payment by piece is just a method of compensation
and does not define the essence of the relation. Payment cannot be construed by piece where work is done in such
establishment so put the worker completely at liberty to turn him out and take it another at pleasure. Justice Perfecto
also contended that pakyaw system is a labor contract between employers and employees between capitalists and
laborers. Wherefore, the award of back wages is modified to an award of back wages for 3 years at the rated of
compensation the employees were receiving at the time of dismissal.