Labor Law Review |Sobrevinas | August December 2014|Page

Viana v. Al-lagadan
20 August 2014
Ponente: Concepcion
Lia

SUMMARY:
Vianas sailboat sank, and crew member Alejandro
disappeared with the craft, prompting the latters parents
(respondents) to file a claim for compensation. Both the
WCC Referee and the Commissioner found ER-EE
relationship by considering Alejandros share, which he
should have received at the end of the trip, as wages. The
SC ruled it could not determine whether Alejandro was an
industrial partner or an employee, as the facts are
insufficient to warrant a reasonable conclusion. Only
element 2 could be assumed to exist.
DOCTRINE:
In determining the existence of ER-EE relationship, the
following elements are generally considered:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employees conduct although
the latter is the most important element
FACTS:
1. Petitioner Viaas sailboat Magkapatid sank in Sept 1948.
Alejandro Al-Lagadan, member of the crew, disappeared with the
craft. His parents (respondents) filed a claim for compensation
under Act No. 3428.
2. A Referee of the Workmens Compensation Commission (WCC)
ordered Viaa to pay P1,560. He based his decision on the report
that the basis of engaging the services of crewmen is determined
in accordance with the contract executed between the owner and

the patron. The contract commonly followed is on a share basis

after deducting all the expenses. One-half goes to the owner, and
the other half goes to the patron and the members. The hiring of
the crew is done by the patron himself. Usually, when a patron
enters into a contract with the owner, he has a crew ready with
him.
2. The Commissioner affirmed the Referees decision.
sustained the finding of an ER-EE relationship, and considered
share which Alejandro received at the end of each trip was in
nature of wages which is defined under sec 39 of
Compensation Act. This is so because such share could
reckoned in terms of money.

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3. Viaa brought the matter to SC for review by certiorari, on the

ground that Alejandro was, at the time of his death, an industrial
partner, not an employee. He alleged in his petition that the
practice observed in engaging the services of crewmen is on a
partnership basis, such that that the owner receives half of the
earnings after deducting the expenses, the other half is divided
pro rata among the members, the patron receiving 4 parts, the
piloto 3 parts, the wheelsman 1 1/2 parts and the members 1
part each.
ISSUES/HELD:
Was Alejandro an industrial partner or an employee? Could not be
determined. Case remanded to WCC.
RATIO:
In determining the existence of ER-EE relationship, the following
elements are generally considered:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employees conduct although the
latter is the most important element (35 Am. Jur. 445).

Labor Law Review |Sobrevinas | August December 2014|Page

Assuming that the share received by Alejandro could partake of

the nature of wages and that the 2nd element exists, the
record does not contain any specific data regarding the
3rd and 4th elements.
With respect to the 1st element, the facts are insufficient
to warrant a reasonable conclusion.
On the one hand, the report suggests that the members are
chosen by the patron, seemingly, upon his sole responsibility and
authority. However, the report referred to a practice commonly
and usually observed in a given place. No record on whether
such practice had been followed in this case. More important still,
the language used in the report may be construed as intimating,
not only that the patron selects and engages the crew, but,
also, that the members thereof are subject to his control and may
be dismissed by him. The report is open to the conclusion that
the crew has a contractual relation, not with the owner, but with
the patron, and that the latter is either their employer or their
partner.
Upon the other hand, the very allegations of the petition show
otherwise, for Viaa explicitly averred that Alejandro was his
industrial partner. This implies that a contract of partnership
existed between them and that, accordingly, if the crew was
engaged by the patron, the latter did so merely as agent of
Viaa. Again, if Viaa were a partner of the crew members, then
neither Viaa nor the patron could control or dismiss the latter.
In the interest of justice and equity, it would be better to remand
the case to the WCC for further evidence and findings on the
following questions:
(1) who selected the crew of the Magkapatid and engaged their
services;
(2) if selected and engaged by the patron, did the latter act in his
own name and for his own account, or on behalf and for the
account of Viaa;
(3) could Viaa have refused to accept any of the crew members
chosen and engaged by the patron;

(4) did Viaa have authority to determine the time when, the
place where and/or the manner or conditions in or under which
the crew would work; and
(5) who could dismiss its members.