1 JOSE SONZA vs.

ABS-CBN BROADCASTING CORPORATION

G.r no. 138051/June 10. 2004
FACTS: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABS-CBN was
represented by its corporate officers while MJMDC was represented by Sonza, as President and general manager, and Tiangco as its EVP and
treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonzas services exclusively to ABS-CBN as talent for radio and
television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the second and third year.

On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program and career.
After the said letter, Sonza filed with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries,
separation pay, service incentive pay,13th month pay, signing bonus, travel allowance and amounts under the Employees Stock Option Plan
(ESOP). ABS-CBN contended that no employee-employer relationship existed between the parties. However, ABS-CBN continued to remit Sonzas
monthly talent fees but opened another account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC affirmed the decision of the Labor
Arbiter. CA also affirmed the decision of NLRC.
ISSUE:
Whether or not there was employer-employee relationship between the parties.
HELD: Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee, the
payment of wages, the power of dismissal and the employers power to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called "control test", is the most important element.

Sonzas services to co-host its television and radio programs are because of his peculiar talents, skills and celebrity status. Independent contractors
often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. The specific selection and hiring
of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the
Agreement. For violation of any provision of the Agreement, either party may terminate their relationship. Applying the control test to the present
case, we find that SONZA is not an employee but an independent contractor.

The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the
extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed
an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent
contractor. To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on
radio were outside ABS-CBNs control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the
program format and airtime schedule "for more effective programming." ABS-CBNs sole concern was the quality of the shows and their standing in
the ratings.

Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonzas work. A radio broadcast specialist who works
under minimal supervision is an independent contractor. Sonzas work as television and radio program host required special skills and talent, which
SONZA admittedly possesses.

ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as independent
contractors. The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-employee relationship under
labor laws. Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to life and
livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an
individual, possessed with special skills, expertise and talent, of his right to contract as an independent contractor.
2 ZANOTTE SHOES Vs. NLRC
G.r no. 100665/Feb. 13. 1995
FACTS: Private respondents filed a complaint for illegal dismissal and for various monetary claims, including the recovery of damages and attorney's fees,
against petitioners. In their supplemental position paper, the complainants subsequently confined themselves to the illegal dismissal charge and
abandoned the monetary claims. Private respondents averred that they worked for a minimum of twelve hours daily, including Sundays and holidays
when needed; that they were paid on piece-work basis; that it "angered" petitioner Lorenzo when they requested to be made members of the Social
Security System ("SSS"); and that, when they demanded an increase in their pay rates, they were prevented (starting 24 October 1988) from
entering the work premises. Petitioners, in turn, claimed that their business operations were only seasonal, normally twice a year, one in June
(coinciding with the opening of school classes) and another in December (during the Christmas holidays), when heavy job orders would come in.
Private respondents, according to petitioners, were engaged on purely contractual basis and paid the rates conformably with their respective
agreements
ISSUE: Whether the employer-employee relationship exists between petitioner and respondents and whether there is illegal dismissal or abandonment
warranting separation pay.
HELD: The work of private respondents is clearly related to, and in the pursuit of, the principal business activity of petitioners. The indicia used for
determining the existence of an employer-employee relationship, all extant in the case at bench, include(a) the selection and engagement of the
employee;(b) the payment of wages;(c) the power of dismissal; and(d) the employer's power to control the employee with respect to the result of the
work to be done and to the means and methods by which the work to be done and to the means and methods by which the work is to be
accomplished. The Labor Arbiter, sustained by the NLRC concluded that during the conciliation stage, petitioner had repeatedly indicated that they
were willing to accept back all complainants aside from denying complainants allegation. It is clear that there was no dismissal to talk about in the
first place which would have to be determined whether legal or not. Also in consideration of complainants' desire to be given separation pay instead
of being ordered back to work, all these factors the Labor Arbiter rule that there was neither dismissal nor abandonment but complainants are simply
out of job for reasons not attributable to either party.
3 Insular Life Assurance Co vs. NLRC
G.r no. 84484/Nov. 15.1989
FACTS:
Since 1968, respondent Basiao has been an agent for petitioner company, and is authorized to solicit within the Philippines applications for
insurance policies and annuities in accordance with the existing rules and regulations of the company. In return, he would receive compensation, in
the form of commissions.

Some four years later, in April 1972, the parties entered into another contract an Agency Manager's Contract and to implement his end of it
Basiao organized an agency or office to which he gave the name M. Basiao and Associates, while concurrently fulfilling his commitments under the
first contract with the Company. In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seeking a reconsideration,
Basiao sued the Company in a civil action and this, he was later to claim, prompted the latter to terminate also his engagement under the first
contract and to stop payment of his commissions starting April 1, 1980.

Basiao thereafter filed with the then Ministry of Labor a complaint against the Company and its president. The complaint sought to recover
commissions allegedly unpaid thereunder, plus attorney's fees. The respondents disputed the Ministry's jurisdiction over Basiao's claim, asserting
that he was not the Company's employee, but an independent contractor.
ISSUE:
Whether or not there exist an employer-employee relationship between Basiao and Insular Life.
HELD: Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should
have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of, and adjudicating, said claim, being without jurisdiction
to do so, as did the respondent NLRC in affirming the Arbiter's decision. This conclusion renders it unnecessary and premature to consider Basiao's
claim for commissions on its merits.

Control test" (Viana vs. Alejo Al-Lagadan, 1956):
"In determining the existence of employer-employee relationship, the following elements are generally considered, namely: (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). . . ,"

- However, not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered
may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term.

- Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the
use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both
the result and the means used to achieve it.

- Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner.
It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that
they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons
who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the
determination of the premiums to be paid and the schedules of payment. None of these really invades the agent's contractual prerogative to adopt
his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employer-employee
relationship between him and the company.
4 Villamaria vs Court of Appeals
G.r. no. 165881/April 19. 2006
FACTS: Petitioner Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship engaged in assembling passenger jeepneys with a public
utility franchise to operate along the Baclaran-Sucat route. By 1995, Villamaria stopped assembling jeepneys and retained only nine, four of which
he operated by employing drivers on a boundary basis. One of those drivers was respondent. Bustamante remitted P450 a day to Villamaria as
boundary and kept the residue of his daily earnings as compensation for driving the vehicle. In August 1997, Villamaria verbally agreed to sell the
jeepney to Bustamante under the boundary-hulog scheme, where Bustamante would remit to Villarama P550 a day for a period of 4 years;
Bustamante would then become the owner of the vehicle and continue to drive the same under Villamarias franchise. It was also agreed that
Bustamante would make a downpayment of P10,000.
- On August 7, 1997, Villamaria executed a contract entitled Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog over the
passenger jeepney. The parties agreed that if Bustamante failed to pay the boundary-hulog for 3 days, Villamaria Motors would hold on to the
vehicle until Bustamante paid his arrears, including a penalty of P50 a day; in case Bustamante failed to remit the daily boundary-hulog for a period
of one week, the Kasunduan would cease to have legal effect and Bustamante would have to return the vehicle to Villamaria Motors.
- Bustamante continued driving the jeepney under the supervision and control of Villamaria. As agreed upon, he made daily remittances of P550 in
payment of the purchase price of the vehicle. Bustamante failed to pay for the annual registration fees of the vehicle, but Villamaria allowed him to
continue driving the jeepney.
- In 1999, Bustamante and other drivers who also had the same arrangement with Villamaria Motors failed to pay their respective boundary-hulog.
This prompted Villamaria to serve a Paalala, reminding them that under the Kasunduan, failure to pay the daily boundary-hulog for one week,
would mean their respective jeepneys would be returned to him without any complaints. He warned the drivers that the Kasunduan would
henceforth be strictly enforced and urged them to comply with their obligation to avoid litigation. On July 24, 2000, Villamaria took back the jeepney
driven by Bustamante and barred the latter from driving the vehicle.
- Bustamante filed a Complaint for Illegal Dismissal against Villamaria and his wife Teresita. He narrated that in July 2000, he informed the
Villamaria spouses that the surplus engine of the jeepney needed to be replaced, and was assured that it would be done. However, he was later
arrested and his drivers license was confiscated because apparently, the replacement engine that was installed was taken from a stolen vehicle.
He was no longer allowed to drive the vehicle unless he paid them P70,000.
ISSUE:
WON the existence of a boundary-hulog agreement negates the employer-employee relationship between the vendor and vendee
HELD: Under the boundary-hulog scheme, a dual juridical relationship is created: that of employer-employee and vendor-vendee. The Kasunduan did not
extinguish the employer-employee relationship of the parties extant before the execution of said deed.
Reasoning
- The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the
compensation of the driver, that is, the latters daily earnings are remitted to the owner/operator less the excess of the boundary which represents
the drivers compensation. Under this system, the owner/operator exercises control and supervision over the driver. It is unlike in lease of chattels
where the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. The
management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it
that the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business
operations. The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not sufficient
to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business
or trade of the owner/operator.
- Under the Kasunduan, respondent was required to remit P550 daily to petitioner, an amount which represented the boundary of petitioner as well
as respondents partial payment (hulog) of the purchase price of the jeepney. Thus, the daily remittances also had a dual purpose: that of
petitioners boundary and respondents partial payment (hulog) for the vehicle. This dual purpose was expressly stated in the Kasunduan. The well-
settled rule is that an obligation is not novated by an instrument that expressly recognizes the old one, changes only the terms of payment, and adds
other obligations not incompatible with the old provisions or where the new contract merely supplements the previous one. The two obligations of
the respondent to remit to petitioner the boundary-hulog can stand together.
- The existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the means
and method of the work. The amount earned in excess of the boundary hulog is equivalent to wages and the fact that the power of dismissal was
not mentioned in the Kasunduan did not mean that private respondent never exercised such power, or could not exercise such power.
- Neither is such juridical relationship negated by petitioners claim that the terms and conditions in the Kasunduan relative to respondents behavior
and deportment as driver was for his and respondents benefit: to insure that respondent would be able to pay the requisite daily installment of
P550, and that the vehicle would still be in good condition despite the lapse of 4 years. What is primordial is that petitioner retained control over the
conduct of the respondent as driver of the jeepney.
- As respondents employer, it was the burden of petitioner to prove that respondents termination from employment was for a lawful or just cause,
or, at the very least, that respondent failed to make his daily remittances of P550 as boundary. However, petitioner failed to do so. Well-settled is
the rule that, the employer has the burden of proving that the dismissal of an employee is for a just cause. The failure of the employer to discharge
this burden means that the dismissal is not justified and that the employee is entitled to reinstatement and back wages.
5 ORLANDO FARM GROWERS ASSOCIATION/GLICERIO AOVER vs. NLRC
FACTS: Petitioner Orlando Farm Growers Association (Anover is the president) is an association of landowners engaged in the production of export quality
bananas located in Kinamayan, Sto. Tomas, Davao del Norte, established for the sole purpose of dealing collectively with Stanfilco on matters
concerning technical services, canal maintenance, irrigation and pest control, among others. Respondents (about 20 complainants) were hired as
farm workers by several member-landowners but, nonetheless, were made to perform functions as packers and harvesters in the plantation of
petitioner association

.January 8, 1993 July 30, 1994 respondents were dismissed on various dates. Thus, they filed against petitioner for illegal dismissal and
monetary benefits.

Petitioners liabilities to complainants are joint and solidary, with its responsibleofficers.4.September 6, 1995
LABOR ARBITER SANCHO ordered reinstatement of respondents and payment of back wages and other benefits

Note: 2 complainants eventually dropped their case (Loran Paquit and Lovilla Dorlones) because they were able to amicably settle their claims.
December 26, 1996 - NLRC affirmed decision of LA and denied the motion for reconsideration.

Petitioner contends that being an unregistered association and having been formed solely to serve as an effective medium for dealing collectively
with Stanfilco and not existing in law, it cannot be considered an employer
ISSUE:
Whether or not an unregistered association may be an employer independent of the respective members it represents
HELD: YES. Petition is DISMISSED. NLRC judgment affirmed but remanded back to Labor Arbiter Sancho to specify the amount each respondent is
entitled to.

The law does not require an employer to be registered before he may considered as one within the definition of the Labor Code.
Art 212 (e) of the Labor Code defines an employer as any person acting in the interest of an employer, directly or indirectly
-
To determine the existence of employer employee relationship (Filipinas Broadcasting Network v. NLRC):
1.The manner of selection and engagement
2.Payment of wages
3.Presence or absence of the power of dismissal
4.Presence or absence of the power of control (most important element )

Evidence to support existence of employer employee relationship:
During the subsistence of the association, several circulars and memoranda were issued concerning, among other things, absences without formal
request, loitering in the work area and disciplinary measures with which every worker is enjoined to comply.
The employees were issued IDs
6 Maraguinot vs NLRC
FACTS: Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private respondents as part of the filming crew. About 4 months later, he
was designated Asst. Electrician. He was then promoted to the rank of Electrician.
- Petitioner Paulino Enero claims that private respondents employed him as a member of the shooting crew.
- Petitioners tasks consisted of loading, unloading and arranging movie equipment in the shooting area as instructed by the cameraman, returning
the equipment to Viva Films warehouse, assisting in the fixing of the lighting system, and performing other tasks that the cameraman and/or
director may assign.
- Petitioners requested that private respondents adjust their salary in accordance with the minimum wage law. Petitioners were informed that Mr. Vic
del Rosario would agree to increase their salary only if they signed a blank employment contract. As petitioners refused to sign, private respondents
forced Enero to go on leave then refused to take him back when he reported for work. Meanwhile, Maraguinot was dropped from the company
payroll but was returned and again asked to sign a blank employment contract, and when he still refused, private respondents terminated his
services. Petitioners thus sued for illegal dismissal before the Labor Arbiter.
- Private respondents claim that Viva Films is primarily engaged in the distribution and exhibition of movies, but not in the business of making
movies; in the same vein, private respondent Vic del Rosario is merely an executive producer,i.e., the financier who invests a certain sum of money
for the production of movies distributed and exhibited by VIVA; that they contract persons called producers -- also referred to as associate
producers-- to produce or make movies for private respondents; and that petitioners are project employees of the associate producers who, in
turn, act as independent contractors. As such, there is no employer-employee relationship between petitioners and private respondents; that it was
the associate producer of a film who hired Maraguinot.and he was released upon payment of his last salary, as his services were no longer needed;
that Enero was hired for a movie, went on vacation and by the time he reported back to work the move had been completed.
- The Labor Arbiter found that:
-- complainants are the employees of the respondents. The producer cannot be considered as an independent contractor but should be considered
only as a labor-only contractor and as such, acts as a mere agent of the real employer, the herein respondents. Also, it is an admitted fact that the
complainants received their salaries from the respondents. It is very clear also that complainants are doing activities which are necessary and
essential to the business of the respondents, that of movie-making. Complainant Maraguinot worked as an electrician while complainant Enero
worked as a crew [member]. Hence, the complainants were illegally dismissed.
- Private respondents appealed to the NLRC. In its decision, it said that:
1. Complainants were hired for specific movie projects and their employment was co-terminus with each movie project the completion/termination of
which are pre-determined, such fact being made known to complainants at the time of their engagement.
2. Each shooting unit works on one movie project at a time. And the work of the shooting units, which work independently from each other, are not
continuous in nature but depends on the availability of movie projects.
3. Further shown by respondents is the irregular work schedule of complainants on a daily basis. Maraguinot was supposed to report on 05 August
1991 but reported only on 30 August 1991, or a gap of 25 days. Complainant Enero worked on 10 September 1991 and his next scheduled working
day was 28 September 1991, a gap of 18 days.
4. The extremely irregular working days and hours of complainants work explain the lump sum payment for complainants services for each movie
project. Hence, complainants were paid a standard weekly salary regardless of the number of working days and hours they logged in. Otherwise, if
the principle of no work no pay was strictly applied, complainants earnings for certain weeks would be very negligible.
5. Respondents also alleged that complainants were not prohibited from working with other movie companies.
The NLRC, in reversing the Labor Arbiter, then concluded that these circumstances, taken together, indicated that complainants (herein petitioners)
were project employees. Petitioners Claim To support their claim that they were regular (and not project) employees of private respondents,
petitioners cited their performance of activities that were necessary or desirable in the usual trade or business of private respondents and added that
their work was continuous, i.e., after one project was completed they were assigned to another project.
Respondents Private respondents reiterate their version of the facts and stress that their evidence supports the view that petitioners are project
employees; point to petitioners irregular work load and work schedule; emphasize the NLRCs finding that petitioners never controverted the
allegation that they were not prohibited from working with other movie companies; and ask that the facts be viewed in the context of the peculiar
characteristics of the movie industry.
The Office of the Solicitor General (OSG) is convinced that this petition is improper since petitioners raise questions of fact; and submits that
petitioners reliance on Article 280 of the Labor Code to support their contention that they should be deemed regular employees is misplaced, as
said section merely distinguishes between two types of employees, i.e., regular employees and casual employees, for purposes of determining the
right of an employee to certain benefits. The OSG likewise rejects petitioners contention that since they were hired not for one project, but for a
series of projects, they should be deemed regular employees. In closing, the OSG disagrees with petitioners claim that the NLRCs classification of
the movie producers as independent contractors had no basis in fact and in law, since, on the contrary, the NLRC took pains in explaining its basis
for its decision.

ISSUE: 1. Whether an employer-employee relationship existed between petitioners and private respondents or any one of private respondents.

2.Whether petitioners were illegally dismissed.
HELD: 1. YES. The relationship between VIVA and its producers or associate producers seems to be that of agency, as the latter make movies on behalf
of VIVA, whose business is to make movies. As such, the employment relationship between petitioners and producers is actually one between
petitioners and VIVA, with the latter being the direct employer.

The employer-employee relationship between petitioners and VIVA can further be established by the control test. While four elements are usually
considered in determining the existence of an employment relationship, namely: (a) the selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the employers power to control the employees conduct, the most important element is the employers
control of the employees conduct, not only as to the result of the work to be done but also as to the means and methods to accomplish the same.
These four elements are present here.

Reasoning (On job contracting)
It is settled that the contracting out of labor is allowed only in case of job contracting.
- Assuming that the associate producers are job contractors, they must then be engaged in the business of making motion pictures. As such, and to
be a job contractor under the preceding description, associate producers must have tools, equipment, machinery, work premises, and other
materials necessary to make motion pictures.The associate producer did not have substantial capital nor investment in the form of tools, equipment
and other materials necessary for making a movie. If private respondents insist that their associate producers are labor contractors, then these
producers can only be labor-only contractors.18
- As labor-only contracting is prohibited, the law considers the person or entity engaged in the same a mere agent or intermediary of the direct
employer. But even by the preceding standards, the associate producers of VIVA cannot be considered labor-only contractors as they did not
supply, recruit nor hire the workers.

Reasoning (On control test)
- VIVAs control is evident in its mandate that the end result must be a quality film acceptable to the company. The means and methods to
accomplish the result are likewise controlled by VIVA, viz., the movie project must be finished within schedule without exceeding the budget, and
additional expenses must be justified; certain scenes are subject to change to suit the taste of the company; and the Supervising Producer, the
eyes and ears of VIVA and del Rosario, intervenes in the movie-making process by assisting the associate producer in solving problems
encountered in making the film.

- Aside from control, the element of selection and engagement is likewise present in the instant case and exercised by VIVA. A sample appointment
slip was offered by private respondents to prove that members of the shooting crew except the driver are project employees of the Independent
Producers. Notably, nowhere in the appointment slip does it appear that it was the producer or associate producer who hired the crew members;
moreover, it is VIVAs corporate name which appears on the heading of the appointment slip. What likewise tells against VIVA is that it paid
petitioners salaries as evidenced by vouchers, containing VIVAs letterhead, for that purpose.

2. YES
Ratio A project employee or a member of a work pool may acquire the status of a regular employee when the following concur:
1) There is a continuous rehiring of project employees even after cessation of a project; and
2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer.
However, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular
employment.

- In the instant case, the evidence on record shows that petitioner Enero was employed for a total of two (2) years and engaged in at least eighteen
(18) projects, while petitioner Maraguinot was employed for some three (3) years and worked on at least twenty-three (23) projects. Moreover, as
petitioners tasks involved, among other chores, the loading, unloading and arranging of movie equipment in the shooting area as instructed by the
cameramen, returning the equipment to the Viva Films warehouse, and assisting in the fixing of the lighting system, it may not be gainsaid that
these tasks were vital, necessary and indispensable to the usual business or trade of the employer. As regards the underscored phrase, it has been
held that this is ascertained by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its
entirety.

Reasoning
- It may not be ignored, however, that private respondents expressly admitted that petitioners were part of a work pool; and, while petitioners were
initially hired possibly as project employees, they had attained the status of regular employees in view of VIVAs conduct.
- At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a duty to re-hire a project employee even after
completion of the project for which he was hired. The import of this decision is not to impose a positive and sweeping obligation upon the employer
to re-hire project employees. What this decision merely accomplishes is a judicial recognition of the employment status of a project or work pool
employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the employer of project or work pool employees who perform
tasks necessary or desirable to the employers usual business or trade. Let it not be said that this decision coddles labor, for as Lao19 has ruled,
project or work pool employees who have gained the status of regular employees are subject to the no work-no pay principle.
- The Courts ruling here is meant precisely to give life to the constitutional policy of strengthening the labor sector, but, we stress, not at the
expense of management. Lest it be misunderstood, this ruling does not mean that simply because an employee is a project or work pool employee
even outside the construction industry, he is deemed, ipso jure, a regular employee. All that we hold today is that once a project or work pool
employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2)
these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular
employee, pursuant to Article 280 of the Labor Code and jurisprudence.
Disposition instant petition is GRANTED.
7 MAKATI HABERDASHERY INC V NLRC
FACTS: Private respondents have been working for petitioner Makati Haberdashery, Inc. (Haberdashery) as tailors, seamstress, sewers, basters and
"plantsadoras". They were paid on a piece-rate basis (except two who are paid on a monthly basis). In addition to their piece-rate, they were given a
daily allowance of P3.00 pesos provided they report for work before 9:30 a.m. everyday. They were required to work from or before 9:30 a.m. to
6:00 or 7:00 p.m. Mon to Sat, and during peak periods even on Sundays and holidays.

- The Sandigan ng Manggagawang Pilipino filed a complaint for underpayment of the basic wage; underpayment of living allowance; non-payment
of overtime work; non-payment of holiday pay; non-payment of service incentive pay; 13th month pay; and benefits provided for under Wage Orders
Nos. 1, 2, 3, 4 and 5.

- During the pendency of case, private respondent Pelobello left a package w/ a salesman of the Haberdashery, w/c contained a barong tagalog.
When confronted, Pelobello said that it was respondent Zapatas. Zapata allegedly admitted that he copied the design of Haberdashery. A
memorandum was issued to each of them to explain why no action should be taken against them for accepting a job order which i s prejudicial and in
direct competition with the business of the company. Both respondents did not submit their explanation and did not report for work. They were
dismissed by petitioner. They countered by filing a complaint for illegal dismissal.

- Labor Arbiter found Haberdashery guilty of illegal dismissal and ordered them to reinstate Pelobello and Zapata. The charge of unfair labor
practice and claims for underpayment re violation of the minimum wage law were dismissed for lack of merit. And found Haberdashery to have
violated the decrees on the cost of living allowance, service incentive leave pay and the 13th Month Pay. NLRC affirmed decision.
ISSUE: 1. WON an employee-employer relationship existed between Haberdashery and respondent workers
2. WON the respondent workers were entitled to their monetary claims (COLA, service incentive, 13th month pay, etc)
3. WON Pelobello and Zapata were illegally dismissed
HELD: 1. YES
Ratio The facts at bar indubitably reveal that the most important requisite of control is present. When a customer enters into a contract with the
haberdashery or its proprietor, the latter directs an employee who may be a tailor, pattern maker, sewer or "plantsadora" to take the customer's
measurements, and to saw the pants, coat or shirt as specified by the customer. Supervision is actively manifested in all these aspects -- the
manner and quality of cutting, sewing and ironing.
- The test of employee-employer relationship is four-fold: (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 employee's conduct. It is the so-called "control test" that is the most important element. This
means the determination of whether the employer controls or has reserved the right to control the employee not only as to the result of the work but
also as to the means and method by which the same is to be accomplished. - It is evident that petitioner has reserved the right to control its
employees not only as to the result but also the means and methods by which the same are to be accomplished. That private respondents are
regular employees is further proven by the fact that they have to report for work regularly from 9:30 a.m. to 6:00 or 7:00 p.m. and are paid an
additional allowance of P3.00 daily if they report for work before 9:30 a.m.
- Private respondents did not exercise independence in their own methods, but on the contrary were subject to the control of petitioners from the
beginning of their tasks to their completion. Unlike independent contractors who generally rely on their own resources, the equipment, tools,
accessories, and paraphernalia used by private respondents are supplied and owned by petitioners. Private respondents are totally dependent on
petitioners in all these aspects.

2. Minimum Wage- YES; COLA YES
- As a consequence of their status as regular employees of the petitioners, they can claim cost of living allowance. This is apparent from the
provision defining the employees entitled to said allowance, thus: ". . . All workers in the private sector, regardless of their position, designation or
status, and irrespective of the method by which their wages are paid."
13th Month Pay YES
- Section 3(e) of the Rules and Regulations Implementing P.D. No. 851 provides: " The Decree shall apply to all employers except to:
xxx xxx xxx
(e) Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a
specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case
the employer shall be covered by this issuance insofar as such workers are concerned."
SERVICE INCENTIVE LEAVE PAY NO
- While private respondents are entitled to Minimum Wage, COLA and 13th Month Pay, they are not entitled to service incentive leave pay because
as piece-rate workers being paid at a fixed amount for performing work irrespective of time consumed in the performance thereof, they fall under
one of the exceptions stated in Section 1(d), Rule V, Implementing Regulations, Book III, Labor Code. (pls see provision)
Holiday Pay- NO.
- Private respondents cannot also claim holiday pay under Section 1(e), Rule IV, Implementing Regulations, Book III, Labor Code.

3. NO
- Haberdashery had valid grounds to terminate the services of private respondents.
- It does show that a violation of the employer's rules has been committed and the evidence of such transgression, the copied barong tagalog, was
in the possession of Pelobello who pointed to Zapata as the owner. When required by their employer to explain in a memorandum issued to each of
them, they not only failed to do so but instead went on AWOL, waited for the period to explain to expire and for petitioner to dismiss them. Assuming
that such acts do not constitute abandonment of their jobs as insisted by private respondents, their blatant disregard of their employer's
memorandum is undoubtedly an open defiance to the lawful orders of the latter, a justifiable ground for termination of employment by the employer
expressly provided for in Article 283(a) of the Labor Code as well as a clear indication of guilt for the commission of acts inimical to the interests of
the employer, another justifiable ground for dismissal under the same Article of the Labor Code, paragraph (c). Well established in our jurisprudence
is the right of an employer to dismiss an employee whose continuance in the service is inimical to the employer's interest.
- We have ruled that:
"No employer may rationally be expected to continue in employment a person whose lack of morals, respect and loyalty to his employer, regard for
his employer's rules, and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared.
"That there should be concern, sympathy, and solicitude for the rights and welfare of the working class, is meet and proper. That in controversies
between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writings should be
resolved in the former's favor, is not an unreasonable or unfair rule. But that disregard of the employer's own rights and interests can be justified by
that concern and solicitude is unjust and unacceptable." (Stanford Microsystems, Inc. v. NLRC, 157 SCRA 414-415 [1988]).
- The law is protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer. More importantly, while the
Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed that every labor dispute will
automatically be decided in favor of labor.
- The right to dismiss or otherwise impose disciplinary sanctions upon an employee for just and valid cause, pertains in the first place to the
employer, as well as the authority to determine the existence of said cause in accordance with the norms of due process.
8 Victorias Milling Co Inc vs NLRC
FACTS: Petitioner maintains that they Stay Order applies only to claims existing prior to or at the time of the issuance of such order. It avers that Sec. 6 of
PD No. 902-A is clear and categorical that the suspension covers actions for claims which are pending before any court at the time of the
appointment of the management committee or rehabilitation receiver. And, not being a pre-existing claim, payment of petitioner claim will not result
in undue preference which is the mischief sought to be prevented by a stay order. Respondent posits that it is immaterial when the actions were
commenced as the cited provision is dear that all actions standing before a court against a corporation under a management committee must be
stayed; hence, even actions for claims instituted after the appointment of the management committee are covered the stay.
ISSUE:
Does the stay order only suspend those claims existing before or at the time of its issuance?
HELD: Suspension of actions/claims against a corporation cover all claims against the distressed corporation whether for damages, labor cases,
collection cases or claims of pecuniary nature, at any stage, in order to expedite the rehabilitation. However, this does not include criminal cases
against
corporation officer.
9
Filamer Christian Institutevs IAC
FACTS: Daniel Funtecha was a working student of Filamer. He was assigned as the school janitor to clean the school 2 hours every morning. Allan Masa
was the son of the school president and at the same time he was the schools jeepney service driver. On October 20, 1977 at about 6:30pm, after
driving the students to their homes, Masa returned to the school to report and thereafter have to go home with the jeep so that he could fetch the
students early in the morning. Masa and Funtecha live in the same place so they usually go home together. Funtecha had a student drivers license
so Masa let him take the drivers seat. While Funtecha was driving, he accidentally hit an elderly Kapunan which led to his hospitalization for 20
days. Kapunan filed a criminal case and an independent civil action based on Article 2180 against Funtecha.

In the independent civil action, the lower court ruled that Filamer is subsidiarily liable for the tortious act of Funcheta and was compelled to pay for
damages based on Article 2180 which provides that employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks. Filamer assailed the decision and it argued that under Section 14, Rule X, Book III of the Labor Code
IRR, working scholars are excluded from the employment coverage hence there is no employer-employee relations between Filamer and Funcheta;
that the negligent act of Funcheta was due to negligence only attributable to him alone as it is outside his assigned task of being the school janitor.
The CA denied Filamers appeal but the Supreme Court agreed with Filamer. Kapunan filed for a motion for reconsideration.
ISSUE:
Whether or not Filamer should be held subsidiarily liable.
HELD: Yes. This time, the SC ruled in favor of Kapunan (actually his heirs cause by this time Kapunan was already dead). The provisions of Section 14,
Rule X, Book III of the Labor Code IRR was only meant to provide guidelines as compliance with labor provisions on working conditions, rest
periods, and wages is concerned. This does not in any way affect the provisions of any other laws like the civil code. The IRR cannot defeat the
provisions of the Civil Code. In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. There is a distinction hence
Section 14, Rule X, Book III of the Rules is not the decisive law in a civil suit for damages instituted by an injured person during a vehicular accident
against a working student of a school and against the school itself.
The present case does not deal with a labor dispute on conditions of employment between an alleged employee and an alleged employer. It invokes
a claim brought by one for damages for injury caused by the patently negligent acts of a person, against both doer-employee and his employer.
Hence, the reliance on the implementing rule on labor to disregard the primary liability of an employer under Article 2180 of the Civil Code is
misplaced. An implementing rule on labor cannot be used by an employer as a shield to void liability under the substantive provisions of the Civil
Code.

Funtecha is an employee of Filamer. He need not have an official appointment for a drivers position in order that Filamer may be held responsible
for his grossly negligent act, it being sufficient that the act of driving at the time of the incident was for the benefit of Filamer (the act of driving the
jeep from the school to Masas house is beneficial to the school because this enables Masa to do a timely school transportation service in the
morning). Hence, the fact that Funtecha was not the school driver or was not acting with the scope of his janitorial duties does not relieve Filamer of
the burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the
supervision over him. Filamer has failed to show proof of its having exercised the required diligence of a good father of a family over its employees
Funtecha and Allan.
/
Besa vs Trajano
FACTS: January, 1985, private respondent Kaisahan ng Mangagawang Pilipino, a legitimate labor union duly registered with the Ministry of Labor and
Employment, iled a Petition for Certification Election in the National Labor Relations Division of the National Capital Region. Petitioner opposed it
alleging that 1. There is no employer-employee relationship between Besa's and the petitioners-signatories to the petition; 2. The subject of the
present petition had previously been decided by the defunct Court of Industrial Relations, and is therefore barred under the principle of res judicata;
3. The petition fails to comply with the mandatory formal requirements under Sec. 2, Book V, of the Omnibus Rules Implementing the Labor Code;
and 4. This Hon. Commission has no jurisdiction over the subject matter and parties to the petition.

Acting on the Petition, the Opposition thereto, and the Reply to the Opposition, the Med-Arbiter on June 27, 1985, issued an order declaring that
there was an employer-employee relationship between the parties and directed that an election be conducted. Petitioner appealed the order to the
Director of BLR, but it was dismissed. Thus the Petition of the Union (KAMPIL) before the Med-Arbiter for the holding of the certification election was
granted.
ISSUE:
Whether or not there is employer-employee relationship between Besa and the petitioner-signatories to the petition.
HELD: No. The records of the case reveal that an employer-employee relationship does not exist between the 17 shoeshiners and petitioner. The shoe
shiner is distinct from a piece worker because while the latter is paid for work accomplished, he does not, however, contribute anything to the capital
of the employer other than his service. It is the employer of the piece worker who pays his wages, while the shoe shiner in this instance is paid
directly by his customer. The piece worker is paid for work accomplished without regard or concern to the profit as derived by his employer, but in
the case of the shoe shiners, the proceeds derived from the trade are always divided share and share alike with respondent BESA. The shoe shiner
can take his share of the proceeds everyday if he wanted to or weekly as is the practice of qqqBesas The employer of the piece worker supervises
and controls his work, but in the case of the shoe shiner, respondent BESA does not exercise any degree of control or supervision over their person
and their work. All these are not obtaining in the case of a piece worker as he is in fact an employee in contemplation of law, distinct from the shoe
shiner.

Entitlement of the minimum requirements of the law particularly on wages and allowances presupposes the existence of employer-employee
relationship which is determined by the concurrence of the following conditions: 1. right to hire; 2. payment of wages; 3. right to fire; and 4. control
and supervision. The most important condition to be considered is the exercise of control and supervision over the employees. these shoe shiners
are not employees of the company, but are partners instead. This is due to the fact that the owner/manager does not exercise control and
supervision over the shoe shiners. That the shiners have their own customers from whom they charge the fee and divide the proceeds equally with
the owner, which make the owner categorized them as on purely commission basis.
11
People v Goce
FACTS: On January 1988, an information for illegal recruitment committed by a syndicate nd in large scale, punishable under Articles 38 and 39 of the labor
code as amended by PD 2018, filed against Dan and Loma Goce and Nelly Agustin in the RTC of Manila, alleging that in or about during the period
comprised between May 1986 and June 25, 1987, both dates inclusive in the City of Manila, the accused conspired and represent themsleves to
have the capacity to recruit Filipino workers for employment abroad.

January 1987, a warrant of arrest was issued against the 3 accused bot none of them was arrested. Hence, on February 1989, the RTC prdered the
case archived but issued a standing warrant os arrest against the accused.

Thereafter, knowing the whereabouts of the accused, Rogelio Salado requested for a copy of the warrant of arrest and eventual ly Nelly Agustin was
apprehended by the Paranaque Police. Agustin's counsel filed a motion to revive the case and requested to set a hearing for purpose of due
process and for accused to immediately have her day in court. On the arraignment, Agustin pleaded not guilty and the trial went on with four
complainants testified for the prosecution and reciepts of the processing fees they paid.

Agustin for the defense asserted that Goce couple were licensed recruiters but denied her participation in the recruitment and denied knowledge of
the receipts as well.

On November 1993, trial court rendered judgment finding that Agustin as a principal in the crime of illegal recruitment in large scale with sentence of
life imprisonment and pay P100,000.00.
ISSUE: Agustin appealed with the following arguments: (1) her act of introducing the complainants to the couple does not fall within the meaning of illegal
recruitment and placement under Article 13 in relation to Article 34 of the labor code; (2) there is no proof of conspiracy and (3) there is no proof that
appellant offered/promised overseas employment to the complainants.
HELD: The testimonial evidence shows that Agustin indeed further committed acts constitutive of illegal recruitment because, the complainants had a
previous interview with Agustin (as employee of the Goce couple) about fees and papers to submit that may constitute as referral. Agustin collected
the payments of the complainants as well as their passports, training fees, medical tests and other expenses. On the issue of proof, the court held
that the receipts exhibited by the claimants are clear enough to prove the payments and transaction made.
12
Catan vs NLRC
FACTS: Petitioner Catan, a duly licensed recruitment agency, as agent of Ali and FahdShabokshi Group, a Saudi Arabian firm recruited private respondent
Francisco D. Reyes towork in Saudi Arabia. The term of contract is for one (1) year, however, the contract provided for automatic renewal.Said
contract was automatically renewed when private respondent was not repatriatedby hi Saudi employer but instead was assigned to work as a
crusher plant operator.On March 30, 1983 while he was working as a crusher plant operator, his ankle wascrushed under the machine he was
operating.On May 15, 1983 after expiration of renewed term, private respondent returned to thePhilippines. His ankle was operated on at the Sta.
Mesa Heights Medical Center for which heincurred expenses.On September 9, 1983, he returned to Saudi and resume to his work and on May
15,1984, he was repatriated. And upon his return, he had ankle treated for which he incurredfurther expenses.Private respondent filed a claim
against Catan placement agency on the basis of theprovision in the employment contract that the employer shall compensate the employee if he
isinjured or permanently disabled in the course of employment.POEA rendered judgment in favor of the complainant. Ordering the respondent
placementagency to pay SEVEN THOUSAND NINE HUNDRED EIGHTY FIVE and 60/100 (P7, 985.60),TWENTY FIVE THOUSAND NINTY SIX
20/100 (P29, 096.20) and 10% for attorneys fees.On appeal, respondent NLRC affirmed the decision of the POEA.
ISSUE: Whether or not the Placement Agency is liable for disability benefits to privaterespondent, since the time he was injured his original contract had
already expired?
HELD: Yes, Catan Placement Agency is liable for disability benefits to private respondent. Private respondents contract of employment can not be said to
have expired on May 14, 1982as it was automatically renewed since no notice of its termination was given by either or both parties at a month
before its termination. As stipulated in their contract. M. S. Catan Agency was at the time of complainant's accident resulting in his permanent partial
disability was (sic) no longer the accredited agent of its foreign principal, foreign respondent therein, yet its responsibility over the proper
implementation of complainant's employment/service contract and the welfare of complainant himself in the foreign job site, still existed, the contract
of employment in question not having expired yet.
This must be so, because the obligations covenanted in the recruitment agreement entered into by and between the local agent and its foreign
principal are not coterminus with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities
of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the
employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Otherwise, this will render nugatory
the very purpose for which the law governing the employment of workers for foreign jobs abroad was enacted.
13
People of the Philippines vs Hernandez
FACTS: In April 1993, eight (8) information for syndicated and large scale illegal recruitment and eight (8) informations for estafa were filed against
accused-appellants, spouses Karl and Yolanda Reichl, together with Francisco Hernandez. Only the Reichl spouses were tried and convicted by the
trial court as Francisco Hernandez remained at large.
ISSUE:
Whether or not the respondents are guilty of illegal recruitment
HELD: In the case at bar, the prosecution was able to prove beyond reasonable doubt that accused-appellants engaged in activities that fall within the
definition of recruitment and placement under the Labor Code. The evidence on record shows that they promised overseas employment to private
complainants and required them to prepare the necessary documents and to pay the placement fee, although they did not have any license to do
so. There is illegal recruitment when one who does not possess the necessary authority or license gives the impression of having the ability to send
a worker abroad. Accused-appellants assert that they merely undertook to secure Austrian visas for private complainants, which act did not
constitute illegal recruitment. They cite the document marked at Exhibit "J" stating that they promised to obtain Austrian tourist visas for private
complainants. We are not convinced. Private complainants Narcisa Hernandez, Leonora Perez and Charito Balmes categorically stated that Karl
and Yolanda Reichl told them that they wouldprovide them overseas employment and promised them that they would be able to leave the country
on a specified date. We do not see any reason to doubt the truthfulness of their testimony. The defense has not shown any ill motive for these
witnesses to falsely testify against accused-appellants if it were not true that they met with the Reichl spouses and the latter represented themselves
to have the capacity to secure gainful employment for them abroad. The minor lapses in the testimony of these witnesses pointed out by accused-
appellants in their brief do not impair their credibility, especially since they corroborate each other on the material points,
i.e., that they met with the three accused several times, that the three accused promised to give them overseas employment, and that they paid the
corresponding placement fee but were not able to leave the country. It has been held that truth-telling witnesses are not always expected to give
error-free testimonies considering the lapse of time and the treachery of human memory. Moreover, it was shown that Karl Reichl signed a
document marked as Exhibit "C" where he promised to refund the payments given by private complainants for the processing of their papers. We
are not inclined to believe Mr. Reichl's claim that he was forced by Francisco Hernandez to sign said document. There is no showing, whether in his
testimony or in that of his wife, that private complainants threatened to harm them if he did not sign the document. Mr. Reichl is an educated man
and it cannot be said that he did not understand the contents of the paper he was signing. When he affixed his signature thereon, he in effect
acknowledged his obligation to ensure the departure of private complainants and to provide them gainful employment abroad. Such obligation arose
from the promise of overseas placement made by him and his co-accused to private complainants. The admission made by accused-appellants in
Exhibit "J" that they promised to obtain Austrian visas for private complainants does not negate the fact that they also promised to procure for them
overseas employment. In fact, in Exhibit "J", accused-appellants admitted that each of the private complainants paid the amount of P50,000.00.
However, in Exhibit "C", which was executed on a later date, accused-appellants promised to refund to each complainant an amount exceeding
P150,000.00. This is an acknowledgment that accused-appellants received payments from the complainants not only for securing visas but also for
their placement abroad. Accused-appellants' defense of denial and alibi fail to impress us. The acts of recruitment were committed from June 1992
until January 1993 in Batangas City. Karl Reichl was in Manila from July 29, 1992 until September 19, 1992, and then he returned to the Philippines
and stayed in Batangas from October 21, 1992. Yolanda Reichl, on the other hand, claimed that he was in Manila on the dates alleged in the
various information. It is of judicial notice that Batangas City is only a few hours' drive from Manila. Thus, even if the spouses were staying in Manila,
it doesnot prevent them from going to Batangas to engage in their recruitment business. Furthermore, it appears that the three accused worked as a
team and they conspired and cooperated with each other in recruiting domestic helpers purportedly to be sent to Italy. Francisco Hernandez
introduced Karl and Yolanda Reichl to the job applicants as his business partners. Karl and Yolanda Reichl themselves gave assurances to private
complainants that they would seek employment for them in Italy. Francisco Hernandez remitted the payments given by the applicants to the Reichl
spouses and the latter undertook to process the applicants' papers. There being conspiracy, each of the accused shall be equally liable for the acts
of his co-accused even if he himself did not personally take part in its execution.
14
People vs Cabais
FACTS: Accused-appellant Nellie Cabais met the complainants Joan Merante, Nancy Oidi, Florentino Balanon, Jr. and Imelda Mortera on different
occasions. They were told that the accused-appellant was a legal recruiter working with a licensed recruitment agency based in Manila. She talked
to complainants several times during the period of February 1994 up to May 1994, persuading them to be contract workers in South Korea. She
even presented some persons to influence them. Convinced, the complainants complied with requirement and paid all the needed amounts. After
complying with all there quirements, complainants were told to wait for their deployment. They waited and repeatedly inquired about the status of
their applications. However, several months passed and they were not deployed as promised. Complainants checked with the office of the
Philippine Overseas Employment Administration(POEA) in Baguio and learned that Nellie Cabais was not licensed to recruit in Baguio or in any part
of the Cordillera Administrative Region. The accused was indicted for illegal recruitment and estafa. For her part, accused Cabais denied all the
charges against her. She alleged that she was hired as an employee and as such employee, her duties only included processing other applications
for job placement and entertaining applicants. Accused Cabais denied involvement in the recruitment of complainants, claiming that it was her boss
who was doing recruitment activities. She admitted, though, that she received payments from complainants, but alleged that she was merely acting
upon the instruction of Forneas and that she turned over all the payments to her employer.
ISSUE:
Whether or not accused-appellant Accused-appellant Cabais is guilty of illegal recruitment committed in large scale.
HELD: Yes, In this case, all the requisite of illegal recruitment are present. Accused-appellant was the one who informed complainants of job prospects in
Korea and the requirements for deployment. She also received money from them as placement fees. Complainants parted with their money,
evidenced by receipts signed by accused Cabais. Thus, accused-appellant actively participated in the recruitment of the complainants. Furthermore,
accused-appellant did not possess any license to engage in recruitment activities, as evidenced by a certification from the POEA and the testimony
of a representative of said government agency. Her acts constituted recruitment, and considering that she admittedly had no license or authority to
recruit workers for overseas employment, accused-appellant is guilty of illegal recruitment. Despite the fact that she was just an ordinary employee
of the company, her criminal liability would still stand for being a conspirator with the corporate officers in undertaking illegal recruitment activities.
Since the recruitment involves three or more persons, accused-appellant is guilty of illegal recruitment in a large scale
15
Salazar vs Achacoso
FACTS:
Rosalie Tesoro of Pasay City in a sworn statement filed with the POEA, charged petitioner with illegal recruitment. Public respondent Atty.
Ferdinand Marquez sent petitioner a telegram directing him to appear to the POEA regarding the complaint against him. On the same day, after
knowing that petitioner had no license to operate a recruitment agency, public respondent Administrator Tomas Achacoso issued a Closure and
Seizure Order No. 1205 to petitioner. It stated that there will a seizure of the documents and paraphernalia being used or intended to be used as the
means of committing illegal recruitment, it having verified that petitioner has (1) No valid license or authority from the Department of Labor and
Employment to recruit and deploy workers for overseas employment; (2) Committed/are committing acts prohibited under Article 34 of the New
Labor Code in relation to Article 38 of the same code. A team was then tasked to implement the said Order. The group, accompanied by mediamen
and Mandaluyong policemen, went to petitioners residence. They served the order to a certain Mrs. For a Salazar, who let them in. The team
confiscated assorted costumes. Petitioner filed with POEA a letter requesting for the return of the seized properties, because she was not given
prior notice and hearing. The said Order violated due process. She also alleged that it violated sec 2 of the Bill of Rights, and the properties were
confiscated against her will and were done with unreasonable force and intimidation.
ISSUE: Whether or Not the Philippine Overseas Employment Administration (or the Secretary of Labor) can validly issue warrants of search and seizure (or
arrest) under Article 38 of the Labor Code
HELD: Under the new Constitution, . . . no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the
judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be
searched and the persons or things to be seized. Mayors and prosecuting officers cannot issue warrants of seizure or arrest. The Closure and
Seizure Order was based on Article 38 of the Labor Code. The Supreme Court held, We reiterate that the Secretary of Labor, not being a judge,
may no longer issue search or arrest warrants. Hence, the authorities must go through the judicial process. To that extent, we declare Article 38,
paragraph (c), of the Labor Code, unconstitutional and of no force and effect The power of the President to order the arrest of aliens for
deportation is, obviously, exceptional. It (the power to order arrests) cannot be made to extend to other cases, like the one at bar. Under the
Constitution, it is the sole domain of the courts. Furthermore, the search and seizure order was in the nature of a general warrant. The court held
that the warrant is null and void, because it must identify specifically the things to be seized.

WHEREFORE, the petition is GRANTED. Article 38, paragraph (c) of the Labor Code is declared UNCONSTITUTIONAL and null and voi d. The
respondents are ORDERED to return all materials seized as a result of the implementation of Search and Seizure Order No. 1205.