Justice for the illegally dismissed Lazada riders

As a postscript to last Monday's celebration of Labor Day, we applaud the Supreme Court for rendering a decision that shall bring earth-shaking tremors in the emerging online sales industry that employs riders to pick up and deliver goods. For a time, the sales companies insist these riders are independent contractors and therefore not entitled to SSS, PhilHealth, Pag-Ibig and other benefits like overtime, holiday pay, and thirteenth month pay. Well this thinking has been put to an end.

In a landmark decision never before made by any other court, the Supreme Court, speaking through Justice Mario Victor Leonen, a former UP Law dean and human rights lawyer, decided the case of Chrisden Ditiangkin, Henrix Molines, Harvey Juanio, Joselito Verde, and Brian Anthony Nabong, all Lazada riders, in case number GR 246892, the decision promulgated on January 19, 2023. The Supreme Court reversed the rulings of the Court of Appeals and the NLRC which both held that there was no employer-employee relationship between Lazada and the riders and that the latter were independent contractors. They are employees and as such, should be paid all benefits provided by the Labor Code and other social legislations.

This Supreme Court decision may also be invoked by riders for other companies like Grab, Uber, Gojek, Foodpanda, LINE, ShopeeFood, Deliveroo, Comfort, AirAsiaFood, BeCar, and the like. Not only were the riders declared as employees of the company, they were also illegally dismissed according to the Supreme Court. The complainants in the case will receive huge amounts of money in terms of backwages, which will constitute their salaries and benefits from the time they were fired to the time of actual reinstatement. They are also entitled to 10% attorney's fees in accordance with Article 111 of the Labor Code, and based on the Dario Nacar vs. Gallery Frames precedent, their monetary awards can earn 6% interest from the time of the date of finality of the decision up to the time of full satisfaction of judgment. By the way, all the money to be received are not subject to tax because it isn’t considered income but restitution for damages.

The criteria used by the Supreme Court in declaring the riders to be employees are the so-called elements of the well-settled Four Way Test. First, they were hired by the company, interviewed, tested, and then engaged to work. Second, they were paid daily compensation. No matter what you call this pay, whether it is commission, rental, or boundary, in the eyes of the law, they are wages. Third, the control test which is the power of Lazada to discipline, reprimand, suspend, or punish the riders for violations of company policy. Fourth, is the power of dismissal. Even if there is no written order terminating their services, when they were not given any tasks anymore or their routes were given to other riders, there was already, in the eyes of the law, an act of dismissal. It was illegal because the riders were not even formally charged with any offense, much less given due process to explain their side.

When I was a young Labor arbiter in 1977, sent by then Secretary Blas Ople to Cebu to hear and decide labor cases, I ruled that taxi and jeepney drivers are employees of operators, thus should be granted all labor standard benefits under the law. My decision was appealed but was upheld by the NLRC and ultimately by the Supreme Court. Taxi operators and their lawyers alleged drivers were industrial partners and operators were capitalist partners. They said the contract was a partnership and not employment. I overruled that and said drivers are employees because they are subject to disciplinary action. You don’t discipline a partner but an employee. And my decision was upheld. Of course, the operators hated me for that and the drivers never even thanked me for such a precedent-setting decision. I lost many friends for that bold decision.

That decision was why I was promoted as DOLE undersecretary without any political backing. Ople was convinced that I could stand pressure and could apply the law without fear or favor. The Lazada case is another landmark jurisprudence that can make many companies angry. The law may be hard, but it is the law. It’s the duty of justices and arbiters to apply it no matter who gets hurt. This column should make people realize justice can only prevail if we decide cases not based on other considerations but the truth and the rule of law. Nothing less, nothing more.