G.R. No. 179428, January 26, 2011 PRIMO E. CAONG, JR., ALEXANDER J. TRESQUIO, and LORIANO D.

DALUYON, petitioners,
vs. AVELINO REGUALOS,respondent.

FACTS:
P Caong, Tresquio and Daluyon were employed as jeepney drivers by Respondent Regualos under a boundary agreement.
o Caong since Sept 1998; permanent on 2000; assigned to new jeepney with P550 boundary in July 2001; suspended Oct 9-15, 2001 for
failure to pay full amount of the boundary; readmitted and assigned to an older jeepney w/ P500 boundary; he was only able to remit P400
on Nov 9 2001 due to scarcity of drivers; he was barred from driving because of deficiency in boundary on Nov 11, 2001
o Tresquio since Aug 1996; permanent in 1997; assigned to new jeepney with P500 boundary in 1998; he was only able to remit P450 due
to scarcity of passengers on Nov 6 2001; he was barred from driving due to deficiency on Nov 8, 2001
o Daluyon since Mar 1998; assigned to a relatively new jeepney for a P500 boundary; he was only able to remit P470 due to scarcity of
passengers on Nov 7 2001; was barred from driving his jeepney on Nov 8, 2001

P filed separate complaints for illegal dismissal against Regualos who barred them from driving the jeepneys due to deficiencies in their
boundary payments. Regualos told them they were not illegally dismissed, and could resume their use of vehicles after payment of arrears.
LA, NLRC, CA: ruled that there was an employer-employee relationship between Regualos and the petitioners and that there was no
dismissal because they would be allowed to use the vehicles once they pay their arrears. A reasonable sanction was deemed to be an
appropriate penalty; EE relationship of parties was not severed but merely suspended because Regualos refused to allow petitioners to drive
the jeepneys when they failed to pay their obligations.

R Regualos alleged that the P were lessees of his vehicles and not his employees. Thus, the LA had no jx.
P filed petition with SC.

ISSUE:
WON the Ps were illegally dismissed. --NO
WON the policy of suspending drivers pending payment of arrears in their boundary obligations reasonable. YES

RULING: NO.
LABOR LAW - Employer-employee relationships
It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-
employee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called
"boundary" that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee.
The Labor Arbiter, the NLRC, and the CA uniformly declared that petitioners were not dismissed from employment but merely suspended
pending payment of their arrears. Findings of fact of the CA, particularly where they are in absolute agreement with those of the NLRC and the
Labor Arbiter, are accorded not only respect but even finality, and are deemed binding upon this Court so long as they are supported by
substantial evidence.
Suspension was NOT to sever the employer-employee relationship and it only dragged on because petitioners refused to pay the arrears
Also, due process is simply the opportunity to be heard and, since this is NOT a case of termination of employment, the twin-notice
rule is not necessary. >> The meeting conducted by Regualos on November 4, 2001 served as sufficient notice to petitioners.

We have no reason to deviate from such findings. Indeed, petitioners suspension cannot be categorized as dismissal, considering that
there was no intent on the part of respondent to sever the employer-employee relationship between him and petitioners. In fact, it was
made clear that petitioners could put an end to the suspension if they only pay their recent arrears. As it was, the suspension dragged on
for years because of petitioners stubborn refusal to pay. It would have been different if petitioners complied with the condition and respondent
still refused to readmit them to work. Then there would have been a clear act of dismissal. But such was not the case. Instead of paying,
petitioners even filed a complaint for illegal dismissal against respondent.
It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all aspects of employment,
including the prerogative to instill discipline on his employees and to impose penalties, including dismissal, if warranted, upon erring
employees. This is a management prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose
is within the managements discretion. The only limitation on the exercise of management prerogative is that the policies, rules, and
regulations on work-related activities of the employees must always be fair and reasonable, and the corresponding penalties, when
prescribed, commensurate to the offense involved and to the degree of the infraction

DISPOSITION
Petition is DENIED.