Lab Stand Duka by Raffy

Case Digest in Labor Standards
By Rafael D. Pangilinan
BATONG BUHAY GOLD MINES, INC. v. DELA SERNA
G.R. No. 86963. August 6, 1999
URISIMA, !.
"#$ts%
Elsie Rosalinda Ty, Antonia Mendelebar, Ma. Concepcion O. Reyes and 1,247 others filed a complaint aainst !aton !"hay #old Mines,
$nc. for% &1' non(payment of their basic pay and allo)ances for the period of * +"ly 1,-. to / +"ly 1,-40 &2' non(payment of their basic pay
and allo)ances for the period 1* +"ne 1,-4 to / October0 &.' non(payment of their salaries for the period 1* March 1,-* to the present0 &4'
non(payment of their 1.th month pay for 1,-/, 1,-* and 1,-70 &/' non(payment of their 1acation and sic2 lea1e, and the compensatory
lea1es of mine site employees0 and &*' non(payment of the salaries of employees )ho )ere placed on forced lea1es since 3o1ember, 1,-/
to the present, if this is not feasible, the affected employees be a)arded correspondin separation pay.
The 4abor 5tandards and 6elfare Officers s"bmitted their report )ith the follo)in recommendations%
768ERE9ORE, premises considered, this case is hereby s"bmitted )ith the recommendation that an Order of Compliance be iss"ed
directin respondent !aton !"hay #old Mines $nc. to pay complainants: Elsie Rosalina Ty, et al. ;4,-1-,74*.4< by )ay of "npaid salaries of
)or2ers from March 1*, 1,-7 to present, "npaid and ECO4A differentials "nder 6ae Order 3os. 2 and / "npaid 1.th months pay for 1,-/
and 1,-*, and "npaid 1acation=sic2=compensatory lea1e benefits.>
The Reional ?irector adopted the recommendation of the 456Os. The complainants filed an e@(parte motion for the iss"ance of a
)rit of e@ec"tion and appointment of special sheriff. The Reional ?irector iss"ed an Order directin the respondent to p"t "p a cash or
s"rety bond other)ise a )rit of e@ec"tion )ill be iss"ed. 6hen the respondent failed to post a cash=s"rety bond, and "pon motion for the
iss"ance of a )rit of e@ec"tion by the complainants, the Reional ?irector, on 14 5eptember 1,-7 iss"ed a )rit of e@ec"tion appointin Mr.
+ohn Espiridion Ramos as 5pecial 5heriff and directin him to do the follo)in% 7ABo" are to collect the abo1e(stated amo"nt from the
respondent and deposit the same )ith Cashier of this Office for appropriate disposition to herein complainants "nder the s"per1ision of the
office of the ?irector. Other)ise, yo" are to e@ec"te this )rit by attachin the oods and chattels of the respondent not e@empt from
e@ec"tion or in case of ins"fficiency thereof aainst the real or immo1able property of the respondent.>
The 5pecial 5heriff proceeded to e@ec"te the appealed Order on 17 5eptember 1,-7 and seiCed three &.' "nits of ;eterb"ilt tr"c2s
and then sold the same by p"blic a"ction. Dario"s materials and motor 1ehicles )ere also seiCed on different dates and sold at p"blic
a"ction by said sheriff.
The p"blic respondent iss"ed an order "pholdin the E"risdiction of the Reional ?irector and ann"llin all the a"ction sales cond"cted
by 5pecial 5heriff +ohn Ramos. The decretal portion of the said Order r"led% 7the p"blic a"ction sales cond"cted by special sheriff +ohn
Ramos p"rs"ant to the )rit of e@ec"tion dated 14 5eptember 1,-7 on 24 5eptember 2, 2<, 2., and 2, October 1,-7 are all hereby declared
3F44 A3? DO$?. 9"rthermore, the personal properties sold and the proceeds thereof )hich ha1e been t"rned o1er to the complainants thr"
their leal co"nsel are hereby ordered ret"rned to the c"stody of the respondent and the b"yers respecti1ely.>
Issu&s%
6O3 the Reional ?irector has E"risdiction o1er the complaint filed by the employees of !!#M$0 and
H&'(%
The s"bEect labor standards case )as filed on 9ebr"ary /, 1,-7 at )hich time Article 12- &b' read as follo)s%
7Art. 12- &b' Visitorial and enforcement powers G 7&b' The Minister of 4abor or his d"ly a"thoriCed representati1e shall ha1e the po)er to
order and administer, after d"e notice and hearin, compliance )ith the labor standards pro1isions of this Code based on the findins of
labor re"lation officers or ind"strial safety enineers made in the co"rse of inspection, and to iss"e )rits of e@ec"tion to the appropriate
a"thority for the enforcement of their order, e@cept in cases )here the employer contests the findins of the labor re"lations officers and
raises iss"es )hich cannot be resol1ed )itho"t considerin e1identiary matters that are not 1erifiable in the ordinary co"rse of inspection.>
Article 12- &b' reH"ires the conc"rrence of the follo)in elements in order to di1est the Reional ?irector or his representati1es of
E"risdiction, to )it% &a' that the petitioner &employer' contests the findins of the labor re"lations officer and raises iss"es thereon0 &b' that in
order to resol1e s"ch iss"es, there is a need to e@amine e1identiary matters0 and &c' that s"ch matters are not 1erifiable in the normal co"rse
of inspection.
1
Raisin lac2 of E"risdiction in a Motion to ?ismiss is not the contest contemplated by the e@ception cla"se "nder Article 12-&b' of the 4abor
Code )hich )o"ld ta2e the case o"t of the E"risdiction of the Reional ?irector and brin it before the 4abor Arbiter.
;etitioner:s ref"sal to allo) the 4abor 5tandards and 6elfare Officers to cond"ct inspection in the premises of their head office in Ma2ati
and the fail"re to file their position paper is eH"i1alent to a )ai1er of its riht to contest the claims of the employees. This Co"rt had occasion
to hold there is no 1iolation of d"e process )here the Reional ?irector merely reH"ired the s"bmission of position papers and resol1ed the
case s"mmarily thereafter.
I1.J
9"rthermore, the iss"ance of the compliance order )as )ell )ithin the E"risdiction of the Reional ?irector, as
5ection 14 of the R"les on the ?isposition of 4abor 5tandards Cases pro1ides%
S&$t)o* 1+. "#)'u,& to A--&#, G 6here the employer or the complainant fails or ref"ses to appear d"rin the in1estiation, despite
proper notice, for t)o &2' consec"ti1e hearins )itho"t E"stifiable reasons, the hearin officer may recommend to t.& R&g)o*#' D),&$to, t.&
)ssu#*$& o/ # $o0-')#*$& o,(&, 1#s&( o* t.& &v)(&*$& #t .#*( o, #* o,(&, o/ ()s0)ss#' o/ t.& $o0-'#)*t #s t.& $#s& 0#2 1&.
&Emphasis s"pplied'
The po)er then of the Reional ?irector &"nder the present state of la)' to adE"dicate employees money claims is s"bEect to the
conc"rrence of all the reH"isites pro1ided "nder 5ec. 2 of RA *71/, to )it%
&a' the claim is represented by an employer or person employed in domestic or ho"sehold ser1ice, or ho"sehelper0
&b' the claim arises from employer(employee relationship0
&c' the claimant does not see2 reinstatement0 and
&d' the areate money claim of each employee or ho"sehelper does not e@ceed ;/,<<<.
The r"lin in Servandos Inc. vs. Sec. of Labor and Employment and the Regional Director, Region VI, DLE, in effect, e@panded the
E"risdictional limitation pro1ided for by RA *71/ as to incl"de labor standards cases "nder Article 12- &b' and no loner limited to ordinary
monetary claims "nder Article 12,.
Rep"blic Act 77.<, the la) o1ernin the 1isitorial and enforcement po)ers of the 4abor 5ecretary and his representati1es reads%
7Article 12- &b' Not3)t.st#*()*g t.& -,ov)s)o*s o/ A,t)$'&s 149 #*( 415 o/ t.)s Co(& to the contrary, and in cases )here the
relationship of employer(employee still e@ists, the 5ecretary of 4abor and Employment or his d"ly a"thoriCed representati1es shall ha1e the
po)er to iss"e compliance orders to i1e effect to the labor standards pro1isions of this Code and other labor leislation based on the
findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The 5ecretary or his
d"ly a"thoriCed representati1e shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of their orders, e@cept in cases
)here the employer contests the findins of the labor employment and enforcement officer and raises iss"es s"pported by doc"mentary
proofs )hich )ere not considered in the co"rse of inspection.
Do$t,)*&s%
labor standards G refers to the minim"m reH"irements prescribed by e@istin la)s, r"les and re"lations relatin to )aes, ho"rs of )or2,
cost of li1in allo)ance and other monetary and )elfare benefits, incl"din occ"pational, safety and health standards
+"risdiction o1er the s"bEect matter is determined by the la) in force )hen the action )as commenced, "nless a s"bseH"ent stat"te
pro1ides for its retroacti1e application, as )hen it is a c"rati1e leislation.
C"rati1e stat"tes are intended to s"pply defects, abride s"perfl"ities in e@istin la)s and c"rb certain e1ils. They are intended to enable
persons to carry into effect that )hich they ha1e desined and intended, b"t has failed of e@pected leal conseH"ence by reason of some
stat"tory disability or irre"larity in their o)n action. They ma2e 1alid that )hich, before the enactment of the stat"te, )as in1alid.
RUBI, ET AL. v. THE RO6INCIAL BOARD O" MINDORO
G.R. No. L71+858 M#,$. 5, 1919
MALCOLM, !.%
"#$ts%
On 9ebr"ary 1, 1,17, the pro1incial board of Mindoro adopted resol"tion 3o. 2/ )hich is as follo)s%
The pro1incial o1ernor, 8on. +"an Morente, +r., presented the follo)in resol"tion%
2
76hereas se1eral attempts and schemes ha1e been made for the ad1ancement of the non(Christian people of Mindoro, )hich )ere all a
fail"re,
76hereas it has been fo"nd o"t and pro1ed that "nless some other meas"re is ta2en for the Manyan )or2 of this pro1ince, no s"ccessf"l
res"lt )ill be obtained to)ard ed"catin these people.
76hereas it is deemed necessary to oblied them to li1e in one place in order to ma2e a permanent settlement,
76hereas the pro1incial o1ernor of any pro1ince in )hich non(Christian inhabitants are fo"nd is a"thoriCed, )hen s"ch a co"rse is
deemed necessary in the interest of la) and order, to direct s"ch inhabitants to ta2e "p their habitation on sites on "nocc"pied p"blic lands
to be selected by him and appro1ed by the pro1incial board.
76hereas the pro1incial o1ernor is of the opinion that the sitio of Tibao on 4a2e 3a"Ean is a place most con1enient for the Manyanes to
li1e on, 3o), therefore be it
7Resolved, that "nder section 2<77 of the Administrati1e Code, -<< hectares of p"blic land in the sitio of Tibao on 3a"Ean 4a2e be
selected as a site for the permanent settlement of Manyanes in Mindoro s"bEect to the appro1al of the 8onorable 5ecretary of the $nterior,
and
7Resolved f!rther, That Manyans may only solicit homesteads on this reser1ation pro1idin that said homestead applications are
pre1io"sly recommended by the pro1incial o1ernor.>
5aid resol"tion 3o. 2/ &series 1,17' of the pro1incial board of Mindoro )as appro1ed by the 5ecretary of the $nterior.
On ?ecember 4, 1,17, the pro1incial o1ernor of Mindoro iss"ed e@ec"ti1e order 3o. 2 )hich says%
73o), therefore, $, +"an Morente, +r., pro1incial o1ernor of Mindoro, p"rs"ant to the pro1isions of section 214/ of the re1ised
Administrati1e Code, do hereby direct that all the Manyans in the to)nships of 3a"Ean and ;ola and the Manyans east of the !aco Ri1er
incl"din those in the districts of ?"lanan and R"bi:s place in Calapan, to ta2e "p their habitation on the site of Tibao, 3a"Ean 4a2e, not
later than ?ecember .1, 1,17.
7Any Manyan )ho shall ref"se to comply )ith this order shall "pon con1iction be imprisoned not e@ceed in si@ty days, in accordance )ith
section 27/, of the re1ised Administrati1e Code.>
R"bi and other Man"ianes of the ;ro1ince of Mindoro applied for the iss"ance of )rit of habeas corp!s. They alleed that the
Man"ianes are bein illeally depri1ed of their liberty by the pro1incial officials of that pro1ince. R"bi and his companions are said to be
held on the reser1ation established at Tibao, Mindoro, aainst their )ill, and one ?abalos is said to be held "nder the c"stody of the
pro1incial sheriff in the prison at Calapan for ha1in r"n a)ay form the reser1ation.
ISSUE%
6O3 5ecs. 214/ and 27/, are "nla)f"l for bein "nd"e deleation of leislati1e po)er0 discriminatory bet)een indi1id"als beca"se of
their reliio"s beliefs0 1iolati1e of d"e process of la) and eH"al protection of the la)0 and in1alid e@ercise of police po)er
HELD%
5ection 214/ and 27/, of the Administrati1e Code of 1,17 reads as follo)s%
5EC. 214/. Establishment of non"#hristina !pon sites selected by provincial governor. K 6ith the prior appro1al of the ?epartment 8ead,
the pro1incial o1ernor of any pro1ince in )hich non(Christian inhabitants are fo"nd is a"thoriCed, )hen s"ch a co"rse is deemed necessary
in the interest of la) and order, to direct s"ch inhabitants to ta2e "p their habitation on sites on "nocc"pied p"blic lands to be selected by him
an appro1ed by the pro1incial board.
5EC. 27/,. Ref!sal of a non"#hristian to ta$e !p appointed habitation. K Any non(Christian )ho shall ref"se to comply )ith the directions
la)f"lly i1en by a pro1incial o1ernor, p"rs"ant to section t)o tho"sand one h"ndred and forty(fi1e of this Code, to ta2e "p habitation "pon
a site desinated by said o1ernor shall "pon con1iction be imprisonment for a period not e@ceedin si@ty days.
.
The tr"e distinction therefore is bet)een the deleation of po)er to ma2e the la), )hich necessarily in1ol1es a discretion as to )hat it
shall be, and conferrin an a"thority or discretion as to its e@ec"tion, to be e@ercised "nder and in p"rs"ance of the la). The first cannot be
done0 to the later no 1alid obEection can be made. ?iscretion may be committed by the 4eislat"re to an e@ec"ti1e department or official. The
4eislat"re may ma2e decisions of e@ec"ti1e departments of s"bordinate official thereof, to )hom t has committed the e@ec"tion of certain
acts, final on H"estions of fact.
An e@ception to the eneral r"le permits the central leislati1e body to deleate leislati1e po)ers to local a"thorities. The ;hilippine
4eislat"re has here conferred a"thority "pon the ;ro1ince of Mindoro, to be e@ercised by the pro1incial o1ernor and the pro1incial board.
6ho b"t the pro1incial o1ernor and the pro1incial board, as the official representati1es of the pro1ince, are better H"alified to E"de 7)hen
s"ch as co"rse is deemed necessary in the interest of la) and orderL> As officials chared )ith the administration of the pro1ince and the
protection of its inhabitants, )ho b"t they are better fitted to select sites )hich ha1e the conditions most fa1orable for impro1in the people
)ho ha1e the misfort"ne of bein in a bac2)ard stateL
5ection 214/ of the Administrati1e Code of 1,17 is not an "nla)f"l deleation of leislati1e po)er by the ;hilippine 4eislat"re to
pro1incial official and a department head.
The term 7non(Christian> refers to nati1es of the ;hilippines $slands of a lo) rade of ci1iliCation, and that section 214/ of the
Administrati1e Code of 1,17, does not discriminate bet)een indi1id"als an acco"nt of reliio"s differences.
civil liberty ( meas"re of freedom )hich may be enEoyed in a ci1iliCed comm"nity, consistently )ith the peacef"l enEoyment of li2e freedom
in others0 incl"des the riht to e@ist and the riht to be free from arbitrary personal restraint or ser1it"de0 also incl"des the riht of the citiCens
to be free to "se his fac"lties in all la)f"l )ays0 to li1e and )or2 )here he )ill0 to earn his li1elihood by an la)f"l callin0 to p"rs"e any
1ocations, and for that p"rpose to enter into all contracts )hich may be proper, necessary, and essential to his carryin o"t these p"rposes to
a s"ccessf"l concl"sion
d!e process of law ( e1ery citiCen shall hold his life, liberty, property, an imm"nities "nder the protection of the eneral r"les )hich o1ern
society
To constit"te 7d"e process of la),> as has been often held, a E"dicial proceedin is not al)ays necessary. $n some instances, e1en a
hearin and notice are not reH"isite a r"le )hich is especially tr"e )here m"ch m"st be left to the discretion of the administrati1e officers in
applyin a la) to partic"lar cases. Any leal proceedin enforced by p"blic a"thority, )hether sanctioned by ae and c"stoms, or ne)ly
de1ised in the discretion of the leislati1e po)er, in f"rtherance of the p"blic ood, )hich reards and preser1es these principles of liberty
and E"stice, m"st be held to be d"e process of la).
7?"e process of la)> means simply first, that there shall be a la) prescribed in harmony )ith the eneral po)ers of the leislati1e
department of the #o1ernment0 second, that this la) shall be reasonable in its operation0 third, that it shall be enforced accordin to the
re"lar methods of proced"re prescribed0 and fo"rth, that it shall be applicable ali2e to all the citiCens of the state or to all of a class.
The plede that no person shall be denied the eH"al protection of the la)s is not infrined by a stat"te )hich is applicable to all of a class.
The classification m"st ha1e a reasonable basis and cannot be p"rely arbitrary in nat"re.
The police po)er of the 5tate is a po)er coe@tensi1e )ith self(protection, and is not inaptly termed the Ala) of o1err"lin necessity.
The #o1ernment of the ;hilippine $slands has both on reason and a"thority the riht to e@ercise the so1erein police po)er in the
promotion of the eneral )elfare and the p"blic interest. The police po)er of the ;hilippine #o1ernment belons to the 4eislat"re and that
this po)er is limited only by the Acts of Conress and those f"ndamental principles )hich lie at the fo"ndation of all rep"blican forms of
o1ernment.
On the leislati1e intent of 5ecs. 214/ and 27/, of the Administrati1e Code%
Accordin to then $nterior 5ec.% 7$t is not deemed )ise to abandon the present policy o1er those )ho prefer to li1e a nomadic life and
e1ade the infl"ence of ci1iliCation. The #o1ernment )ill follo) its policy to oraniCe them into political comm"nities and to ed"cate their
children )ith the obEect of ma2in them "sef"l citiCens of this co"ntry. To permit them to li1e a )ayfarin life )ill "ltimately res"lt in a b"rden
to the state and on acco"nt of their inorance, they )ill commit crimes and ma2e depredation, or if not they )ill be s"bEect to in1ol"ntary
ser1it"de by those )ho may )ant to ab"se them.>
7To attain the end desired, )or2 of a ci1iliCin infl"ence has been contin"ed amon the non(Christian people. These people are bein
ta"ht and "ided to impro1e their li1in conditions in order that they may f"lly appreciate the benefits of ci1iliCation. Those of them )ho are
4
still i1en to nomadic habits are bein pers"aded to abandon their )ild habitat and settle in oraniCed settlements. They are bein made to
"nderstand that it is the p"rpose of the #o1ernment to oraniCe them politically into fi@ed and permanent comm"nities, th"s brinin them
"nder the control of the #o1ernment, to aid them to li1e and )or2, protect them from in1ol"ntary ser1it"de and ab"se, ed"cate their children,
and sho) them the ad1antaes of leadin a ci1iliCed life )ith their ci1iliCed brothers. $n short, they are bein impressed )ith the p"rposes
and obEecti1es of the #o1ernment of leadin them to economic, social, and political eH"ality, and "nification )ith the more hihly ci1iliCed
inhabitants of the co"ntry.>
Act 3o. 2*74 in reestablishin the !"rea" of non(Christian Tribes, defines the aim of the #o1ernment to)ards the non(Christian people in
the follo)in terms%
7$t shall be the d"ty of the !"rea" of non(Christian Tribes to contin"e the )or2 for ad1ancement and liberty in fa1or of the reion inhabited
by non(Christian 9ilipinos and foster by all adeH"ate means and in a systematical, rapid, and complete manner the moral, material,
economic, social, and political de1elopment of those reions, al)ays ha1in in 1ie) the aim of renderin permanent the m"t"al intellience
bet)een, and complete f"sion of, all the Christian and non(Christian elements pop"latin the pro1inces of the Archipelao.>
$nsofar as the Man"ianes themsel1es are concerned, the p"rpose of the #o1ernment is e1ident. 8ere, )e ha1e on the $sland of Mindoro,
the Man"ianes, leadin a nomadic life, ma2in depredations on their more fort"nate neihbors, "ned"cated in the )ays of ci1iliCation, and
doin nothin for the ad1ancement of the ;hilippine $slands. 6hat the #o1ernment )ished to do by brinin than into a reser1ation )as to
ather toether the children for ed"cational p"rposes, and to impro1e the health and morals K )as in fine, to bein the process of
ci1iliCation. this method )as termed in 5panish times, 7brinin "nder the bells.> The same idea adapted to the e@istin sit"ation, has been
follo)ed )ith reference to the Man"ianes and other peoples of the same class, beca"se it reH"ired, if they are to be impro1ed, that they be
athered toether. On these fe) reser1ations there li1e "nder restraint in some cases, and in other instances 1ol"ntarily, a fe) tho"sands of
the "nci1iliCed people. 5ereation really constit"tes protection for the Man"ianes.
Considered, therefore, p"rely as an e@ercise of the police po)er, the co"rts cannot fairly say that the 4eislat"re has e@ceeded its rihtf"l
a"thority. it is, indeed, an "n"s"al e@ercise of that po)er. !"t a reat malady reH"ires an eH"ally drastic remedy.
9"rther, one cannot hold that the liberty of the citiCen is "nd"ly interfered )itho"t )hen the deree of ci1iliCation of the Man"ianes is
considered. They are restrained for their o)n ood and the eneral ood of the ;hilippines. 3or can one say that d"e process of la) has not
been follo)ed. To o bac2 to o"r definition of d"e process of la) and eH"al protection of the la), there e@ists a la)0 the la) seems to be
reasonable0 it is enforced accordin to the re"lar methods of proced"re prescribed0 and it applies ali2e to all of a class.
!MM ROMOTION AND MANAGEMENT, INC. v. CA
G.R. No. 148899. August 9, 1996
:AUNAN, !.
"#$ts%
9ollo)in the m"ch(p"bliciCed death of Maricris 5ioson in 1,,1, former ;resident CoraCon AH"ino ordered a total ban aainst the
deployment of performin artists to +apan and other forein destinations. The ban )as, ho)e1er, rescinded after leaders of the o1erseas
employment ind"stry promised to e@tend f"ll s"pport for a proram aimed at remo1in 2in2s in the system of deployment. $n its place, the
o1ernment, thro"h the 5ecretary of 4abor and Employment, s"bseH"ently iss"ed ?epartment Order 3o. 2-, creatin the Entertainment
$nd"stry Ad1isory Co"ncil &E$AC', )hich )as tas2ed )ith iss"in "idelines on the trainin, testin certification and deployment of performin
artists abroad.
;"rs"ant to the E$AC:s recommendations,
I1J
the 5ecretary of 4abor, on +an"ary *, 1,,4, iss"ed ?epartment Order 3o. . establishin
1ario"s proced"res and reH"irements for screenin performin artists "nder a ne) system of trainin, testin, certification and deployment of
the former. ;erformin artists s"ccessf"lly h"rdlin the test, trainin and certification reH"irement )ere to be iss"ed an Artist:s Record !oo2
&AR!', a necessary prereH"isite to processin of any contract of employment by the ;OEA.
Thereafter, the ?epartment of 4abor, follo)in the E$AC:s recommendation, iss"ed a series of orders fine(t"nin and implementin the
ne) system. ;rominent amon these orders )ere the follo)in iss"ances%
1. ?epartment Order 3o. .(A, pro1idin for additional "idelines on the trainin, testin, certification and deployment of performin
artists.
2. ?epartment Order 3o. .(!, pertainin to the Artist Record !oo2 &AR!' reH"irement, )hich co"ld be processed only after the artist
co"ld sho) proof of academic and s2ills trainin and has passed the reH"ired tests.
/
.. ?epartment Order 3o. .(E, pro1idin the minim"m salary a performin artist o"ht to recei1e &not less than F5M*<<.<< for those
bo"nd for +apan' and the a"thoriCed ded"ctions therefrom.
4. ?epartment Order 3o. .(9, pro1idin for the "idelines on the iss"ance and "se of the AR! by ret"rnin performin artists )ho,
"nli2e ne) artists, shall only "ndero a 5pecial Orientation ;roram &shorter than the basic proram' altho"h they m"st pass the
academic test.
Issu&%
6O3 said orders 1' 1iolated the constit"tional riht to tra1el0 2' abrided e@istin contracts for employment0 and .' depri1ed indi1id"al
artists of their licenses )itho"t d"e process of la)0 6O3 the iss"ance of the Artist Record !oo2 &AR!' )as discriminatory and illeal and in
ross 1iolation of the constit"tional riht
H&'(%
The Artist Record !oo2 reH"irement and the H"estioned ?epartment Order related to its iss"ance )ere iss"ed by the 5ecretary of 4abor
p"rs"ant to a 1alid e@ercise of the police po)er.
$n 1,-4, the ;hilippines emered as the larest labor sendin co"ntry in Asia d)arfin the labor e@port of co"ntries )ith mammoth
pop"lations s"ch as $ndia and China. Accordin to the 3ational 5tatistics Office, this diaspora )as a"mented ann"ally by o1er 4/<,<<<
doc"mented and clandestine or illeal &"ndoc"mented' )or2ers )ho left the co"ntry for 1ario"s destinations abroad, l"red by hiher salaries,
better )or2 opport"nities and sometimes better li1in conditions.
Of the h"ndreds of tho"sands of )or2ers )ho left the co"ntry for reener past"res in the last fe) years, )omen composed slihtly close to
half of those deployed, constit"tin 47N bet)een 1,-7(1,,1, e@ceedin this proportion &/-N' by the end of 1,,1,
I*J
the year former
;resident AH"ino instit"ted the ban on deployment of performin artists to +apan and other co"ntries as a res"lt of the r"esome death of
9ilipino entertainer Maricris 5ioson.
$t )as d"rin the same period that most of o"r )omen, a lare n"mber employed as domestic helpers and entertainers, )or2ed "nder
e@ploitati1e conditions mar2ed by physical and personal ab"se. E1en then, the Co"rt noted that the sordid tales of maltreatment s"ffered by
mirant 9ilipina )or2ers, e1en rape and 1ario"s forms of tort"re, confirmed by testimonies of ret"rnin )or2ers compelled "rent o1ernment
action.
;"rs"ant to the alarmin n"mber of reports that a sinificant n"mber of 9ilipina performin artists ended "p as prostit"tes abroad
&many of )hom )ere beaten, dr"ed and forced into prostit"tion', and follo)in the deaths of a n"mber of these )omen, the o1ernment
bean instit"tin meas"res aimed at deployin only those indi1id"als )ho met set standards )hich )o"ld H"alify them as leitimate
performin artists. $n spite of these meas"res, ho)e1er, a n"mber of o"r co"ntrymen ha1e nonetheless fallen 1ictim to "nscr"p"lo"s
recr"iters, endin "p as 1irt"al sla1es controlled by forein crime syndicates and forced into Eobs other than those indicated in their
employment contracts. 6orse, some of o"r )omen ha1e been forced into prostit"tion.
Th"s, after a n"mber of inadeH"ate and failed accreditation schemes, the 5ecretary of 4abor iss"ed on A""st 1*, 1,,., ?.O. 3o. 2-,
establishin the Entertainment $nd"stry Ad1isory Co"ncil &E$AC', the policy ad1isory body of ?O4E on entertainment ind"stry matters.
I,J
Actin on the recommendations of the said body, the 5ecretary of 4abor, on +an"ary *, 1,,4, iss"ed the assailed orders. These orders
embodied E$AC:s Resol"tion 3o. 1, )hich called for "idelines on screenin, testin and accreditin performin o1erseas 9ilipino artists.
The )elfare of 9ilipino performin artists, partic"larly the )omen )as paramo"nt in the iss"ance of ?epartment Order 3o. .. 5hort of a
total and absol"te ban aainst the deployment of performin artists to 7hih ris2> destinations, a meas"re )hich )o"ld only dri1e recr"itment
f"rther "nderro"nd, the ne) scheme at the 1ery least rationaliCes the method of screenin performin artists by reH"irin reasonable
ed"cational and artistic s2ills from them and limits deployment to only those indi1id"als adeH"ately prepared for the "npredictable demands
of employment as artists abroad. $t cannot be ainsaid that this scheme at least lessens the room for e@ploitation by "nscr"p"lo"s
indi1id"als and aencies.
Moreo1er, here or abroad, selection of performin artists is "s"ally accomplished by a"ditions, )here those deemed "nfit are "s"ally
)eeded o"t thro"h a process )hich is inherently s"bEecti1e and 1"lnerable to bias and differences in taste. The AR! reH"irement oes one
step f"rther, ho)e1er, attemptin to minimiCe the s"bEecti1ity of the process by definin the minim"m s2ills reH"ired from entertainers and
performin artists. As the 5olicitor #eneral obser1ed, this sho"ld be easily met by e@perienced artists possessin merely basic s2ills. The
tests are aimed at sereatin real artists or performers from those passin themsel1es off as s"ch, eaer to accept any a1ailable Eob and
therefore e@posin themsel1es to possible e@ploitation.
*
As to the other pro1isions of ?epartment Order 3o. . H"estioned by petitioners, there is nothin )ron )ith the reH"irement for doc"ment
and boo2in confirmation &?.O. .(C', a minim"m salary scale &?.O. .(E', or the reH"irement for reistration of ret"rnin performers. The
reH"irement for a 1en"e certificate or other doc"ments e1idencin the place and nat"re of )or2 allo)s the o1ernment closer monitorin of
forein employers and helps 2eep o"r entertainers a)ay from prostit"tion fronts and other )or2sites associated )ith "nsa1ory, immoral,
illeal or e@ploitati1e practices. ;arenthetically, none of these iss"ances appear e1en remotely "nreasonable or arbitrary. They address a
felt need of accordin reater protection for an oft(e@ploited sement of o"r OC6:s. They respond to the ind"stry:s demand for clearer and
more practicable r"les and "idelines. On the )hole, they are aimed at enhancin the safety and sec"rity of entertainers and artists bo"nd
for +apan and other destinations, )itho"t stiflin the ind"stry:s concerns for e@pansion and ro)th.
Apart from the 5tate:s police po)er, the Constit"tion itself mandates o1ernment to e@tend the f"llest protection to o"r o1erseas
)or2ers. The basic constit"tional statement on labor, embodied in 5ection 1- of Article $$ of the Constit"tion pro1ides%
5ec. 1-. The 5tate affirms labor as a primary social economic force. $t shall protect the rihts of )or2ers and promote their )elfare.
More emphatically, the social E"stice pro1ision on labor of the 1,-7 Constit"tion in its first pararaph states% 7The 5tate shall afford f"ll
protection to labor, local and o1erseas, oraniCed and "noraniCed and promote f"ll employment and eH"ality of employment opport"nities
for all.>
Fnder the )elfare and social E"stice pro1isions of the Constit"tion, the promotion of f"ll employment, )hile desirable, cannot ta2e a
bac2seat to the o1ernment:s constit"tional d"ty to pro1ide mechanisms for the protection of o"r )or2force, local or o1erseas.
A profession, trade or callin is a property riht )ithin the meanin of o"r constit"tional "arantees. One cannot be depri1ed of the riht to
)or2 and the riht to ma2e a li1in beca"se these rihts are property rihts, the arbitrary and "n)arranted depri1ation of )hich normally
constit"tes an actionable )ron.
I12J
3e1ertheless, no riht is absol"te, and the proper re"lation of a profession, callin, b"siness or trade has al)ays been "pheld as a
leitimate s"bEect of a 1alid e@ercise of the police po)er by the state partic"larly )hen their cond"ct affects either the e@ec"tion of leitimate
o1ernmental f"nctions, the preser1ation of the 5tate, the p"blic health and )elfare and p"blic morals.
ASOCIACION DE AGRICULTORES DE TALISAY7SILAY, INC. v. TALISAY7SILAY MILLING CO., INC.
G.R. No. L719935. "&1,u#,2 19, 1959
REUBLIC v. "ERNANDE;
G. R. No. L74138+. "&1,u#,2 19, 1959
$n a class s"it, plaintiffs ;4A3TER5 and their laborer so"ht the benefits of the increased sharin participation prescribed by Rep"blic Act
3o. -<, &5"ar Act of 1,/2' for crop year 1,/2(1,/. and for e1ery year thereafter, predicated on the claim that a maEority of the ;4A3TER5
had no millin contracts )ith the CE3TRA40 or, in the alternati1e, in the e1ent that the co"rt sho"ld r"le that the sharin proportions
prescribed by Rep"blic Act -<, )as not applicable to the district, the increased sharin participation ranted by defendant CE3TRA4 in
contracts entered into )ith eiht planters in 1,/4 sho"ld be declared applicable to them startin from crop year 1,/4(1,// and e1ery year
thereafter p"rs"ant to the pro1isions of millin contracts bet)een ;4A3TER5 and the CE3TRA4 since the year 1,2<(1,21 )herein the
CE3TRA4 bo"nd itself to i1e all planters ha1in contracts )ith it the hihest rate of participation it )o"ld e1er i1e to any planter &a sort of a
most(fa1ored planter cla"se'. After findin the 5"ar Act constit"tional and applicable to the plaintiffs and )itho"t passin "pon plaintiff:s
alternati1e ca"se of action, the trial co"rt ranted the main reliefs prayed for in the complaint and denied all co"nterclaims of the defendant
CE3TRA4. The CE3TRA4 appealed. $t H"estioned the trial E"de:s ha1in enaed the ser1ices of the ;4A3TER5: co"nsel as his o)n
la)yer0 assailed the constit"tionality of Rep"blic Act -<,0 and assined as errors the findins that a maEority of the ;4A3TER5 had millin
contracts )ith it and that Rep"blic Act -<, )as applicable e1en to ;4A3TER5 )ho had millin contracts.
The 5"preme Co"rt held that it )ill not in1alidate and set aside the trial E"de:s E"dment despite his ha1in enaed ;4A3TER5: co"nsel
as his o)n la)yer, beca"se the records sho) that ;4A3TER5: opponent for not been depri1ed of a fair and impartial trial. The 8ih Trib"nal
"pheld the constit"tionality of Rep"blic Act -<, on the ro"nd that it )as a social E"stice and police po)er meas"re for the promotion of labor
conditions in s"ar plantations, hence, )hate1er rational deree of constraint it e@erts on freedom of contract and e@istin contract"al
obliations is constit"tionally permissible. $t f"rther fo"nd that maEority of the ;4A3TER5 had millin contracts )ith the CE3TRA4, hence the
sharin proportions prescribed in 5ection 1 of Rep"blic Act -<, )as not applicable to them, b"t r"led that the hiher sharin participation
ranted by the CE3TRA4 to eiht planters in 1,/4 )as applicable to plaintiffs ;4A3TER5 p"rs"ant to the most(fa1ored planter cla"se
contained in millin contracts bet)een ;lanters and the Central since crop year 1,2<(1,21, and the reference point in determinin the ratio
of sharin amon the CE3TRA4, the ;4A3TER5 and the latter:s laborers is the pro1ision of 5ection , of Rep"blic Act -<, &)hich allots *<N
7
of the proceeds of any increase in the participation ranted the planters abo1e their present share', in conE"nction )ith the effect of the most(
fa1ored planter cla"se.
ASUNCION BROS. < CO., INC. v. CIR
G.R. No. L73991+. !u'2 45, 1988
NAR6ASA, !:
"#$ts%
As"ncion !ros. O Co., $nc. and +ose As"ncion )ere chared )ith "nfair labor practice in the C.$.R. by the Co"rt ;rosec"tor, on complaint
of certain of their employees and the latter:s labor oraniCation, the As"ncion !ros. 6oodcraft Employees and 4aborers Fnion. The
complaint s"bstantially alleed that beca"se the indi1id"al complainants had oraniCed a labor oraniCation )hich later affiliated itself )ith
the ;hilippine Transport and #eneral 6or2ers OraniCation &;T#6O' the company, thr" its eneral manaer, +ose As"ncion, had made the
members )or2 on rotation basis and e1ent"ally dismissed them on 1ario"s dates.
$n their ans)er, the petitioners denied the acc"sation0 they claimed that the rotation of )or2ers )as resorted to on acco"nt of
circ"mstances beyond their control, not the least of )hich )as the 7systematic> acts of the complainants: absentin themsel1es at )ill,
reportin late, and 7moonlihtin> )ith other firms.
The 8earin E@aminer fo"nd petitioners "ilty as chared and recommended that since respondent b"siness firm is only a small and
ro)in b"siness entity )hich may not be in a position to immediately implement a ret"rn to )or2 order of complainants, the reinstatement
m"st be rad"al to minimiCe the idea of economic dislocation by interatin a labor force that it cannot possibly absorb. This may be
arraned by, say, 2 complainants e1ery month, dependin on the need and e@iency of the b"siness. And considerin f"rther the precario"s
sit"ation that may ens"e beca"se of anticipated a)ard of h"e amo"nt of damaes, )hich )ill eat "p the assets of the respondents b"siness
and since some of the complainants ha1e fo"nd cas"al or temporary employment else)here, the amo"nt of bac2()aes be limited to a
period of * months comp"ted at the rate of the employees )ere enEoyin at the time of their dismissal.
Issu&%
6O3 the C.$.R. lost E"risdiction of the case on prom"lation of the 4abor Code &;? 442' on May 1, 1,74
H&'(%
The iss"e is ro"nded on Article ..- of the Code pro1idin that 7All cases pendin before the Co"rt of $nd"strial Relations and the
3ational 4abor Relations Commission established "nder ;residential ?ecree 3o. 21 at the time of the passage of this Code sho"ld be
transferred to and processed by the 3ational 4abor Relations Commission created "nder this Code in accordance )ith the proced"re laid
do)n herein.> The petitioners set the passage of the Code at May 1, 1,74 and ar"e that the C.$.R. had already lost E"risdiction by the time it
rendered E"dment on +"ne 27, 1,74. The point is not )ell ta2en.
6hile it is tr"e that the 4abor Code )as prom"lated on May 1, 1,74, it e@pressly pro1ided
9
that its effecti1ity )o"ld commence si@
months thereafter, or on 3o1ember 1, 1,74. Moreo1er, Article ..- relied "pon by the petitioners )as amended by ;? /7<(A by inter
alia chanin the )or2 %passage% to %effectivity.% The amendment made the pro1ision read as follo)s% 7All cases. pendin before the Co"rt of
$nd"strial Relations and the 3ational 4abor Relations Commission established "nder ;residential ?ecree 3o. 21 on the date of effectivity of
this Code shall be transferred to and processed by the correspondin labor relations di1ision of the reional labor office, the !"rea" of 4abor
Relations or the 3ational 4abor Relations Commission created "nder this Code ha1in coniCance of the same in accordance )ith the
proced"re laid do)n herein, and implementin r"les and re"lations.>
And the date of effecti1ity of the Code, fi@ed at 3o1ember 1, 1,74, as abo1e stated, )as reaffirmed by ;? /7<(A.
6
There can be no do"bt
that the 4abor Co"rt still had E"risdiction of the case at the time it rendered its E"dment on +"ne 27, 1,74.
The error of the 4abor Co"rt lies in its omission to ta2e acco"nt of rele1ant e1idence on record and the H"ite material fact that the
employees and their "nion had completely disrearded the rie1ance proced"re set forth in their collecti1e barainin areement )ith the
petitioner company.
The Co"rt a &!o inored the e1idence i1en by t)o impartial )itnesses% #ilbert T"mlos personnel manaer of ;ermaline and E"staH"io
Perr, manaer of Pa)ayan 6oodcraft, )ho both testified to the employment of a maEority of the complainants in their respecti1e firms. Their
s)orn declarations are f"lly corroborati1e and confirmatory of the testimony of the petitioners: )itnesses, as )ell as the doc"ments listin the
-
names of those )or2ers )hose employment had been terminated, the specific infractions of company r"les constit"tin the respecti1e
ca"ses therefor, and the dates of the commission of said infractions. 3o reason is i1en by the Co"rt for ref"sin to ta2e acco"nt of s"ch
material proofs, and none in tr"th appears on record to E"stify it. The e1idence satisfactorily establishes the petitioners: claim that their
)oodcraft plant 44 operates "nder an interated assembly fine system &I)hereJ assinments Iare interated% e..J pattern, c"ttin, car1in,
lathe machine, disc sandin, spindle sandin, dr"m sandin, 1arnishin and finishin, pac2in'. 9ail"re of one "nit or set of )or2ers to
perform in time its assined f"nctions hampers the )hole operation and )ill ca"se stoppae of )or2, to the damae and preE"dice of the
enterprise, a small and b"ddin one at that.> The record th"s contains adeH"ate e1identiary fo"ndation for the dismissal of the complainants
from employment, a circ"mstance that at the time constit"tes pers"asi1e ref"tation of the theory that said complainants )ere fired simply
beca"se of their "nion acti1ities.
9"rther disclosed by the record is the disreard by the complainant employees and their "nion of the rie1ance proced"re prescribed in
their collecti1e barainin areement )ith the employer, dated 9ebr"ary 1,, 1,*,. 11Article Q$$ of that areement states that K
$n the e1ent that rie1ances or differences arise bet)een the Fnion and the Company or bet)een a )or2er or ro"p of )or2ers on the one
hand and the Company on the other, as reards the application, implementation of this areement, or other differences )hich any of the
parties desire to resol1e, the Company and the Fnion shall ta2e immediate steps to settle the difference in the follo)in manner%
1. 7A rie1ance committee composed of fo"r &4' members shall be created, t)o &2' of )hich shall come from the Company and the
other t)o &2' from the Fnion. Any rie1ance shall be resol1ed by the said committee )ithin t)o &2' days after the rie1ance is
s"bmitted to them.
2. $n case of disareement, parties aree to s"bmit the differences to the !"rea" of 4abor Relations, ?epartment of 4abor, for
resol"tion.
.. $f it cannot be resol1ed by the !"rea" of 4abor Relations, then the case may be s"bmitted to an arbitrator areed "pon by both the
Company and the Fnion )hose decision shall be final and "nappealable.
4. $f ho)e1er the parties cannot aree to arbitration, then the same shall be considered as a labor disp"te.>
3o reason )hate1er is i1en by the Fnion and the other complainants for inorin this proced"re for the settlement of their rie1ance
relatin to their )or2 rotation )hich, as petitioners ha1e pointed o"t, co"ld ha1e been easily threshed o"t in the #rie1ance Committee, or
their s"bseH"ent dismissal from their employment. There is nothin in the record )arrantin condemnation of the petitioners for "nfair labor
practice in ha1in terminated the employment of the complainants, s"ch termination of )or2 bein, on the contrary, E"stified by the material
circ"mstances.
NB v. CABANSAG
G.R. No. 195818. !u*& 41, 4889
ANGANIBAN, !.
"#$ts%
$n late 1,,-, 9lorence Cabansa arri1ed in 5inapore as a to"rist. 5he applied for employment, )ith the 5inapore !ranch of the
;hilippine 3ational !an2, a pri1ate ban2in corporation oraniCed and e@istin "nder the la)s of the ;hilippines, )ith principal offices at the
;3! 9inancial Center, Ro@as !o"le1ard, Manila. At the time, the 5inapore ;3! !ranch )as "nder the helm of R"ben C. Tobias, a la)yer,
as #eneral Manaer, )ith the ran2 of Dice(;resident of the !an2. At the time, too, the !ranch Office had 2 types of employees% &a'
e@patriates or the re"lar employees, hired in Manila and assined abroad incl"din 5inapore, and &b' locally &direct' hired. 5he applied for
employment as !ranch Credit Officer, at a total monthly pac2ae of M5#4,/<<.<<, effecti1e "pon ass"mption of d"ties after appro1al. R"ben
C. Tobias fo"nd her eminently H"alified and )rote on October 2*, 1,,-, a letter to the ;resident of the !an2 in Manila, recommendin the
appointment of 9lorence O. Cabansa, for the position.
The ;resident of the !an2 )as impressed )ith the credentials of 9lorence O. Cabansa that he appro1ed the recommendation of R"ben
C. Tobias. 5he then filed an AApplication,: )ith the Ministry of Manpo)er of the #o1ernment of 5inapore, for the iss"ance of an AEmployment
;ass: as an employee of the 5inapore ;3! !ranch. 8er application )as appro1ed for a period of 2 years.
R"ben C. Tobias )rote a letter to 9lorence O. Cabansa offerin her a temporary appointment, as Credit Officer, at a basic salary of
5inapore ?ollars 4,/<<.<<, a month and, "pon her s"ccessf"l completion of her probation to be determined solely, by the !an2, she may be
e@tended at the discretion of the !an2, a permanent appointment and that her temporary appointment )as s"bEect to the follo)in terms and
conditions%
1. 7Bo" )ill be on probation for a period of three &.' consec"ti1e months from the date of yo"r ass"mption of d"ty.
2. Bo" )ill obser1e the !an2:s r"les and re"lations and those that may be adopted from time to time.
.. Bo" )ill 2eep in strictest confidence all matters related to transactions bet)een the !an2 and its clients.
4. Bo" )ill de1ote yo"r f"ll time d"rin b"siness ho"rs in promotin the b"siness and interest of the !an2.
,
/. Bo" )ill not, )itho"t prior )ritten consent of the !an2, be employed in any)ay for any p"rpose )hatsoe1er o"tside b"siness ho"rs
by any person, firm or company.
*. Termination of yo"r employment )ith the !an2 may be made by either party after notice of one &1' day in )ritin d"rin probation,
one month notice "pon confirmation or the eH"i1alent of one &1' day:s or month:s salary in lie" of notice.>
9lorence O. Cabansa accepted the position and ass"med office. !arely . months in office, 9lorence O. Cabansa s"bmitted to R"ben C.
Tobias, on March ,, 1,,,, her initial A;erformance Report.: R"ben C. Tobias )as so impressed )ith the AReport: that he made a notation and,
on said AReport:% A#OO? 6ORP.: 8o)e1er, in the e1enin of April 14, 1,,,, )hile 9lorence O. Cabansa )as in the flat, )hich she and
Cecilia AH"ino, the Assistant Dice(;resident and ?ep"ty #eneral Manaer of the !ranch and Rosanna 5armiento, the Chief ?ealer of the
said !ranch, rented, she )as told by the 2 that R"ben C. Tobias has as2ed them to tell 9lorence O. Cabansa to resin from her Eob.
9lorence O. Cabansa )as perple@ed at the s"dden t"rn of e1ents and the r"nabo"t )ay R"ben C. Tobias proc"red her resination from the
!an2. The ne@t day, 9lorence O. Cabansa tal2ed to R"ben C. Tobias and inH"ired if )hat Cecilia AH"ino and Rosanna 5armiento had told
her )as tr"e. R"ben C. Tobias confirmed the 1eracity of the information, )ith the e@planation that her resination )as imperati1e as a Acost(
c"ttin meas"re: of the !an2. R"ben C. Tobias, li2e)ise, told 9lorence O. Cabansa that the ;3! 5inapore !ranch )ill be sold or
transformed into a remittance office and that, in either )ay, 9lorence O. Cabansa had to resin from her employment. The more 9lorence
O. Cabansa )as perple@ed. 5he then as2ed R"ben C. Tobias that she be f"rnished )ith a A9ormal Ad1ice: from the ;3! 8ead Office in
Manila. 8o)e1er, R"ben C. Tobias flatly ref"sed. 9lorence O. Cabansa did not s"bmit any letter of resination.
R"ben C. Tobias aain s"mmoned 9lorence O. Cabansa to his office and demanded that she s"bmit her letter of resination, )ith the
prete@t that he needed a Chinese(spea2in Credit Officer to penetrate the local mar2et, )ith the information that a Chinese(spea2in Credit
Officer had already been hired and )ill be reportin for )or2 soon. 5he )as )arned that, "nless she s"bmitted her letter of resination, her
employment record )ill be blemished )ith the notation A?$5M$55E?: spread thereon. 6itho"t i1in any definiti1e ans)er, 9lorence O.
Cabansa as2ed R"ben C. Tobias that she be i1en s"fficient time to loo2 for another Eob. R"ben C. Tobias told her that she sho"ld be Ao"t:
of her employment by May 1/, 1,,,.
8o)e1er, on April 1,, 1,,,, R"ben C. Tobias aain s"mmoned 9lorence O. Cabansa and adamantly ordered her to s"bmit her letter of
resination. 5he ref"sed. On April 2<, 1,,,, she recei1ed a letter from R"ben C. Tobias terminatin her employment )ith the !an2.
Issu&s%
1. 6O3 the arbitration branch of the 34RC in the 3ational Capital Reion has E"risdiction o1er the instant contro1ersy0
2. 6O3 the arbitration of the 34RC in the 3ational Capital Reion is the most con1enient 1en"e or for"m to hear and decide the
instant contro1ersy0 and
.. 6O3 the respondent )as illeally dismissed, and therefore, entitled to reco1er moral and e@emplary damaes and attorney:s fees
H&'(%
The E"risdiction of labor arbiters and the 34RC is specified in Article 217 of the 4abor Code as follo)s%
7ART. 217. +"risdiction of 4abor Arbiters and the Commission. G &a' E@cept as other)ise pro1ided "nder this Code the 4abor Arbiters shall
ha1e oriinal and e@cl"si1e E"risdiction to hear and decide, )ithin thirty &.<' calendar days after the s"bmission of the case by the parties for
decision )itho"t e@tension, e1en in the absence of stenoraphic notes, the follo)in cases in1ol1in all )or2ers, )hether aric"lt"ral or non(
aric"lt"ral%
1. Fnfair labor practice cases0
2. Termination disp"tes0
.. $f accompanied )ith a claim for reinstatement, those cases that )or2ers may file in1ol1in )ae, rates of pay, ho"rs of )or2 and
other terms and conditions of employment
4. Claims for act"al, moral, e@emplary and other forms of damaes arisin from the employer(employee relations0
/. Cases arisin from any 1iolation of Article 2*4 of this Code, incl"din H"estions in1ol1in the leality of stri2es and loc2o"ts0 and
*. E@cept claims for Employees Compensation, 5ocial 5ec"rity, Medicare and maternity benefits, all other claims, arisin from
employer(employee relations, incl"din those of persons in domestic or ho"sehold ser1ice, in1ol1in an amo"nt of e@ceedin fi1e
tho"sand pesos &;/,<<<.<<' reardless of )hether accompanied )ith a claim for reinstatement.
&b' The commission shall ha1e e@cl"si1e appellate E"risdiction o1er all cases decided by 4abor Arbiters.
More specifically, 5ection 1< of RA -<42 reads in part%
75ECT$O3 1<. 'oney #laims. K 3ot)ithstandin any pro1ision of la) to the contrary, the 4abor Arbiters of the 3ational 4abor Relations
Commission &34RC' shall ha1e the oriinal and e@cl"si1e E"risdiction to hear and decide, )ithin ninety &,<' calendar days after the filin of
the complaint, the claims arisin o"t of an employer(employee relationship or by 1irt"e of any la) or contract in1ol1in 9ilipino )or2ers for
o1erseas deployment incl"din claims for act"al, moral, e@emplary and other forms of damaes.
1<
labor arbiters clearly ha1e original and e(cl!sive E"risdiction o1er claims arisin from employer(employee relations, incl"din termination
disp!tes in1ol1in all )or2ers, amon )hom are o1erseas 9ilipino )or2ers &O96'.
Respondent )as directly hired, )hile on a to"rist stat"s in 5inapore, by the ;3! branch in that city state. ;rior to employin respondent,
petitioner had to obtain an employment pass for her from the 5inapore Ministry of Manpo)er. 5ec"rin the pass )as a re"latory
reH"irement p"rs"ant to the immiration re"lations of that co"ntry.
The ;hilippine o1ernment reH"ires non(9ilipinos )or2in in the co"ntry to first obtain a local )or2 permit in order to be leally employed
here. That permit, ho)e1er, does not a"tomatically mean that the non(citiCen is thereby bo"nd by local la)s only, as a1erred by petitioner. $t
does not at all imply a )ai1er of one:s national la)s on labor. Absent any clear and con1incin e1idence to the contrary, s"ch permit simply
means that its holder has a leal stat"s as a )or2er in the iss"in co"ntry.
a branch office in 5inapore. 5inificantly, respondent:s employment by the 5inapore branch office had to be appro1ed by !enEamin ;.
;alma #il, the president of the ban2 )hose principal offices )ere in Manila. This circ"mstance militates aainst petitioner:s contention that
respondent )as 7locally hired>0 and totally 7o1erned by and s"bEect to the la)s, common practices and c"stoms> of 5inapore, not of the
;hilippines. $nstead, )ith more reason does this fact reinforce the pres"mption that respondent falls "nder the leal definition of migrant
wor$er, in this case one deployed in 5inapore. 8ence, petitioner cannot escape the application of ;hilippine la)s or the E"risdiction of the
34RC and the labor arbiter.
6hether employed locally or o1erseas, all 9ilipino )or2ers enEoy the protecti1e mantle of ;hilippine labor and social leislation, contract
stip"lations to the contrary not)ithstandin. This prono"ncement is in 2eepin )ith the basic p"blic policy of the 5tate to afford protection to
labor, promote f"ll employment, ens"re eH"al )or2 opport"nities reardless of se@, race or creed, and re"late the relations bet)een
)or2ers and employers.
5ection 1&a' of R"le $D of the 34RC R"les of ;roced"re reads%
75ection 1. Ven!e G &a' All cases )hich 4abor Arbiters ha1e a"thority to hear and decide may be filed in the Reional Arbitration !ranch
ha1in E"risdiction o1er the )or2place of the complainant=petitioner0 ;ro1ided, ho)e1er that cases of O1erseas 9ilipino 6or2er &O96' shall
be filed before the Reional Arbitration !ranch )here the complainant resides or )here the principal office of the respondent=employer is
sit"ated, at the option of the complainant.
79or p"rposes of 1en"e, )or2place shall be "nderstood as the place or locality )here the employee is re"larly assined )hen the ca"se of
action arose. $t shall incl"de the place )here the employee is s"pposed to report bac2 after a temporary detail, assinment or tra1el. $n the
case of field employees, as )ell as amb"lant or itinerant )or2ers, their )or2place is )here they are re"larly assined, or )here they are
s"pposed to re"larly recei1e their salaries=)aes or )or2 instr"ctions from, and report the res"lts of their assinment to their employers.>
Fnder the 7Mirant 6or2ers and O1erseas 9ilipinos Act of 1,,/> &RA -<42', a migrant wor$er >refers to a person )ho is to be enaed, is
enaed or has been enaed in a rem"nerated acti1ity in a state of )hich he or she is not a leal resident0 to be "sed interchaneably )ith
o1erseas 9ilipino )or2er.> Fndeniably, respondent )as employed by petitioner in its branch office in 5inapore. Admittedly, she is a 9ilipino
and not a leal resident of that state. 5he th"s falls )ithin the cateory of 7mirant )or2er> or 7o1erseas 9ilipino )or2er.>
As s"ch, it is her option to choose the 1en"e of her Complaint aainst petitioner for illeal dismissal. The la) i1es her t)o choices% &1' at
the Reional Arbitration !ranch &RA!' )here she resides or &2' at the RA! )here the principal office of her employer is sit"ated. 5ince her
dismissal by petitioner, respondent has ret"rned to the ;hilippines (( specifically to her residence at 9ilin1est $$, R"eCon City. Th"s, in filin
her Complaint before the RA! office in R"eCon City, she has made a 1alid choice of proper 1en"e.
Respondent )as already a re"lar employee at the time of her dismissal, beca"se her three(month probationary period of employment
had already ended. This r"lin is in accordance )ith Article 2-1 of the 4abor Code% 7An employee )ho is allo)ed to )or2 after a probationary
period shall be considered a re"lar employee.> $ndeed, petitioner reconiCed respondent as s"ch at the time it dismissed her, by i1in her
one month:s salary in lie" of a one(month notice, consistent )ith pro1ision 3o. * of her employment Contract.
As a re"lar employee, respondent )as entitled to all rihts, benefits and pri1ilees pro1ided "nder o"r labor la)s. One of her f"ndamental
rihts is that she may not be dismissed )itho"t d"e process of la). The t)in reH"irements of notice and hearin constit"te the essential
elements of proced"ral d"e process, and neither of these elements can be eliminated )itho"t r"nnin afo"l of the constit"tional "arantee.
11
$n dismissin employees, the employer m"st f"rnish them t)o )ritten notices% 1' one to apprise them of the partic"lar acts or omissions for
)hich their dismissal is so"ht0 and 2' the other to inform them of the decision to dismiss them. As to the reH"irement of a hearin, its
essence lies simply in the opport"nity to be heard.
Respondent )as not notified of the specific act or omission for )hich her dismissal )as bein so"ht. 3either )as she i1en any chance
to be heard, as reH"ired by la). At any rate, e1en if she )ere i1en the opport"nity to be heard, she co"ld not ha1e defended herself
effecti1ely, for she 2ne) no ca"se to ans)er to. All that petitioner tendered to respondent )as a notice of her employment termination
effecti1e the 1ery same day, toether )ith the eH"i1alent of a one(month pay. This Co"rt has already held that nothin in the la) i1es an
employer the option to s"bstit"te the reH"ired prior notice and opport"nity to be heard )ith the mere payment of .< days: salary.
The employer shall be sanctioned for noncompliance )ith the reH"irements of, or for fail"re to obser1e, d"e process that m"st be
obser1ed in dismissin an employee.
Moreo1er, Articles 2-2, 2-. and 2-4 of the 4abor Code pro1ide the 1alid ro"nds or ca"ses for an employee:s dismissal. The employer
has the b"rden of pro1in that it )as done for any of those E"st or a"thoriCed ca"ses. The fail"re to dischare this b"rden means that the
dismissal )as not E"stified, and that the employee is entitled to reinstatement and bac2 )aes.
;etitioner has not asserted any of the ro"nds pro1ided by la) as a 1alid reason for terminatin the employment of respondent. $t merely
insists that her dismissal )as 1alidly effected p"rs"ant to the pro1isions of her employment Contract, )hich she had 1ol"ntarily areed to be
bo"nd to.
GLOBE7MAC:AY CABLE AND RADIO COR. v. NLRC
G.R. No. 84911. M#,$. 3, 1994
ROMERO, !.
"#$ts%
$n May 1,-2, pri1ate respondent )as employed by #lobe(Mac2ay Cable and Radio Corporation &#MCR' as eneral systems analyst. Also
employed by petitioner as manaer for technical operations: s"pport )as ?elfin 5aldi1ar )ith )hom pri1ate respondent )as alleedly 1ery
close.
5ometime in 1,-4, petitioner #MCR, prompted by reports that company eH"ipment and spare parts )orth tho"sands of dollars "nder the
c"stody of 5aldi1ar )ere missin, ca"sed the in1estiation of the latter:s acti1ities. The report dated 5eptember 2/, 1,-4 prepared by the
company:s internal a"ditor, Mr. A"stin Maramara, indicated that 5aldi1ar had entered into a partnership styled Conca1e Commercial and
$nd"strial Company )ith Richard A. Bambao, o)ner and manaer of Elecon Enineerin 5er1ices &Elecon', a s"pplier of petitioner often
recommended by 5aldi1ar. The report also disclosed that 5aldi1ar had ta2en petitioner:s missin 9edders airconditionin "nit for his o)n
personal "se )itho"t a"thoriCation and also conni1ed )ith Bambao to defra"d petitioner of its property. The airconditioner )as reco1ered
only after petitioner #MCR filed an action for reple1in aainst 5aldi1ar.

$t li2e)ise appeared in the co"rse of Maramara:s in1estiation that $melda 5alaCar 1iolated company re"lations by in1ol1in herself in
transactions conflictin )ith the company:s interests. E1idence sho)ed that she sined as a )itness to the articles of partnership bet)een
Bambao and 5aldi1ar. $t also appeared that she had f"ll 2no)lede of the loss and )hereabo"ts of the 9edders airconditioner b"t failed to
inform her employer.
ConseH"ently, in a letter dated October -, 1,-4, petitioner company placed pri1ate respondent 5alaCar "nder pre1enti1e s"spension for 1
month, effecti1e October ,, 1,-4, th"s i1in her .< days )ithin )hich to, e@plain her side. !"t instead of s"bmittin an e@planations . days
later or on October 12, 1,-4 pri1ate respondent filed a complaint aainst petitioner for illeal s"spension, )hich she s"bseH"ently amended
to incl"de illeal dismissal, 1acation and sic2 lea1e benefits, 1.th month pay and damaes, after petitioner notified her in )ritin that effecti1e
3o1ember -, 1,-4, she )as considered dismissed in 1ie) of her inability to ref"te and dispro1e these findins.
Issu&%
6O3 the 4abor Trib"nal for ha1in committed ra1e ab"se of discretion in holdin that the s"spension and s"bseH"ent dismissal of
pri1ate respondent )ere illeal and in orderin her reinstatement )ith 2 years: bac2)aes
H&'(%
12
The in1estiati1e findins of Mr. Maramara, )hich pointed to ?elfin 5aldi1ar:s acts in conflict )ith his position as technical operations
manaer, necessitated immediate and decisi1e action on any employee closely, associated )ith 5aldi1ar. The s"spension of 5alaCar )as
f"rther impelled by the disco1ery of the missin 9edders airconditionin "nit inside the apartment pri1ate respondent shared )ith 5aldi1ar.
Fnder s"ch circ"mstances, pre1enti1e s"spension )as the proper remedial reco"rse a1ailable to the company pendin 5alaCar:s
in1estiation. !y itself, pre1enti1e s"spension does, not sinify that the company has adE"ded the employee "ilty of the chares she )as
as2ed to ans)er and e@plain. 5"ch disciplinary meas"re is resorted to for the protection of the company:s property pendin in1estiation any
alleed malfeasance or misfeasance committed by the employee.
6hile the Co"rt areed )ith the propriety of 5alaCar:s pre1enti1e s"spension, it held that her e1ent"al separation from employment )as
not for ca"se.
6hat is the remedy in la) to rectify an "nla)f"l dismissal so as to 7ma2e )hole> the 1ictim )ho has not merely lost her Eob )hich, "nder
settled +"rispr"dence, is a property riht of )hich a person is not to be depri1ed )itho"t d"e process, b"t also the compensation that sho"ld
ha1e accr"ed to her d"rin the period )hen she )as "nemployedL
Art. 27, of the 4abor Code, as amended, pro1ides%
Sec!rity of )en!re. K $n cases of re"lar employment, the employer shall not terminate the ser1ices of an employee e@cept for a E"st
ca"se or )hen a"thoriCed by this Title. An employee )ho is "nE"stly dismissed from )or2 shall be entitled to reinstatement )itho"t loss of
seniority rihts and other pri1ilees and to his f"ll bac2)aes, incl"si1e of allo)ances, and to his other benefits or their monetary eH"i1alent
comp"ted from the time his compensation )as )ithheld from him "p to the time of his act"al reinstatement.
Corollary thereto are the follo)in pro1isions of the $mplementin R"les and Re"lations of the 4abor Code%
5ec. 2. Sec!rity of )en!re. K $n cases of re"lar employments, the employer shall not terminate the ser1ices of an employee e@cept for a
E"st ca"se as pro1ided in the 4abor Code or )hen a"thoriCed by e@istin la)s.
5ec. .. Reinstatement. K An employee )ho is "nE"stly dismissed from )or2 shall by entitled to reinstatement )itho"t loss of seniority
rihts and to bac2)aes.>
There bein no e1idence to sho) an a"thoriCed, m"ch less a leal, ca"se for the dismissal of pri1ate respondent, she had e1ery riht, not
only to be entitled to reinstatement, b"t ay )ell, to f"ll bac2)aes.
The intendment of the la) in prescribin the t)in remedies of reinstatement and payment of bac2)aes is, in the former, to restore the
dismissed employee to her stat"s before she lost her Eob.
The follo)in reasons ha1e been ad1anced by the Co"rt for denyin reinstatement "nder the facts of the case and the la) applicable
thereto0 that reinstatement can no loner be effected in 1ie) of the lon passae of time &22 years of litiation' or beca"se of the realities of
the sit"ation0 or that it )o"ld be 7inimical to the employer:s interest0 7 or that reinstatement may no loner be feasible0 or, that it )ill not ser1e
the best interests of the parties in1ol1ed0 or that the company )o"ld be preE"diced by the )or2ers: contin"ed employment0 or that it )ill not
ser1e any pr"dent p"rpose as )hen s"per1enin facts ha1e transpired )hich ma2e e@ec"tion on that score "nE"st or ineH"itable or, to an
increasin e@tent, d"e to the res"ltant atmosphere of 7antipathy and antaonism> or 7strained relations> or 7irretrie1able estranement>
bet)een the employer and the employee.
$n lie" of reinstatement, the Co"rt has 1ario"sly ordered the payment of bac2)aes and separation pay or solely separation pay.
On strained relations bet)een the employer and the employee as a ro"nd% $t sho"ld be pro1ed that the employee concerned occ"pies a
position )here he enEoys the tr"st and confidence of his employer0 and that it is li2ely that if reinstated, an atmosphere of antipathy and
antaonism may be enerated as to ad1ersely affect the efficiency and prod"cti1ity of the employee concerned.
8ere, it has not been pro1ed that the position of pri1ate respondent as systems analyst is one that may be characteriCed as a position of
tr"st and confidence s"ch that if reinstated, it may )ell lead to strained relations bet)een employer and employee. 8ence, this does not
constit"te an e@ception to the eneral r"le mandatin reinstatement for an employee )ho has been "nla)f"lly dismissed.
;etitioner #MCR points o"t that as a matter of company policy, it prohibits its employees from in1ol1in themsel1es )ith any company that
has b"siness dealins )ith #MCR. ConseH"ently, )hen pri1ate respondent 5alaCar sined as a )itness to the partnership papers of
Conca1e &a s"pplier of Fltra )hich in t"rn is also a s"pplier of #MCR', she )as deemed to ha1e placed. herself in an "ntenable position as
far as petitioner )as concerned.
1.
As a systems analyst, 5alaCar )as 1ery far remo1ed from operations in1ol1in the proc"rement of s"pplies. 5alaCar:s d"ties re1ol1ed
aro"nd the de1elopment of systems and analysis of desins on a contin"in basis. $n other )ords, 5alaCar did not occ"py a position of tr"st
relati1e to the appro1al and p"rchase of s"pplies and company assets.
To rely on the Maramara report as a basis for 5alaCar:s dismissal )o"ld be most iniH"ito"s beca"se the b"l2 of the findins centered
principally oh her friend:s alleed thie1ery and anomalo"s transactions as technical operations: s"pport manaer. 5aid report merely
insin"ated that in 1ie) of 5alaCar:s special relationship )ith 5aldi1ar, 5alaCar miht ha1e had direct 2no)lede of 5aldi1ar:s H"estionable
acti1ities. ?irect e1idence implicatin pri1ate respondent is )antin from the records.
$t is also )orth emphasiCin that the Maramara report came o"t after 5aldi1ar had already resined from #MCR on May .1, 1,-4. 5ince
5aldi1ar did not ha1e the opport"nity to ref"te manaement:s findins, the report remained ob1io"sly one(sided. 5ince the main e1idence
obtained by petitioner dealt principally on the alleed c"lpability of 5aldi1ar, )itho"t his ha1in had a chance to 1oice his side in 1ie) of his
prior resination, strinent e@amination sho"ld ha1e been carried o"t to ascertain )hether or not there e@isted independent leal ro"nds to
hold 5alaCar ans)erable as )ell and, thereby, E"stify her dismissal. 9indin none, from the records, the Co"rt fo"nd her to ha1e been
"nla)f"lly dismissed.
SANTOS v. EMLOYEES= COMENSATION COMMISSION
G.R. No. 89444. A-,)' 5, 1993
NOCON, !.
"#$ts%
9rancisco 5antos )as employed as )elder at the ;hilippine 3a1y and its 3a1al 5hipyard as early as March 22, 1,//. 8e spent the last .2
years of his life in the o1ernment ser1ice, the first year as a )elder helper and the last t)o years as shipyard assistant.
On ?ecember 2,, 1,-*, 9rancisco )as admitted at the 3a1al 5tation 8ospital in Ca1ite City, on complaint that he )as ha1in epiastric
pain and been 1omitin blood 2 days prior to his hospitaliCation. 8is case )as dianosed as bleedin ;eptic Flcer disease &;F?',
cholelithiasis and diabetes mellit"s. On +an"ary 11, 1,-7, he died, the ca"se of )hich as indicated in the ?eath Certificate )as li1er
cirrhosis.
Mrs. Carmen A. 5antos filed a claim for the death benefit of her h"sband, 9rancisco, on +an"ary 2-, 1,-7, p"rs"ant to ;residential ?ecree
3o. *2*, as amended. 8o)e1er, on a letter dated April .<, 1,-7, the #o1ernment 5er1ice $ns"rance 5ystem &#5$5', denied the claim on the
ro"nd that "pon proofs and e1idence s"bmitted, 9rancisco:s ailment cannot be considered an occ"pational disease as contemplated "nder
;.?. *2*, as amended.
Mrs. 5antos then so"ht the assistance of the Commander of 3A5COM, ;3, )ho in t"rn )rote the #5$5 reH"estin for a fa1orable action
on her claim. 5aid letter also s"bstantiated petitioner:s claim that her h"sband:s d"ties as 5enior 6elder, assined at the 5tr"ct"ral !ranch
of the 3a1al 5hipb"ildin 9acility, reH"ired him to perform delicate )eldin Eobs inside compartments of na1al 1essels, li2e compartmentation
b"l2 heads0 C$C rooms0 officers and ;O:s H"arters0 f"el, l"be oil and fresh )ater tan2s, )here he )as e@posed to heat and inhalation of
b"rnin chemical s"bstances and as f"mes comin from b"rnin )eldin electrodes.
?espite s"ch endorsement, petitioner:s motion for reconsideration )as li2e)ise denied, "pon claim of the #5$5 that 9rancisco:s Eob as a
)elder )o"ld instead ca"se l"n disease rather than li1er cirrhosis.
Issu&%
$s li1er cirrhosis an illness )hich is compensableL
H&'(%
The la) defines $o0-&*s#1'& s)$>*&ss as any illness definitely accepted as occ"pational disease listed by the Commission, or any
illness ca"sed by employment s"bEect to proof that the ris2 of contractin the same is increased by the )or2in conditions. 9or sic2ness and
the res"ltin death of an employee to be compensable, the claimant m"st sho) either% &1' that it is a res"lt of an occ"pational disease listed
"nder Anne@ A of the Amended R"les on Employees: Compensation )ith the conditions set therein satisfied0 or &2' if not so listed, that the
ris2 of contractin the disease is increased by the )or2in conditions.
14
6here the claimant:s illness is not listed in the Table of Occ"pational ?iseases embodied in Anne@ A of the R"les of Employees:
Compensation, said claimant m"st positi1ely pro1e that the ris2 of contractin the disease is increased by the )or2in conditions.
Cirrhosis of the li1er is not listed as an occ"pational disease. 3e1ertheless, in case of Librea v. Employees #ompensation #ommission,
the Co"rt too2 a liberal stand and based on the e1idence presented, prono"nced the said sic2ness compensable. $n the cited case, a
?i1ision ;hysical Ed"cation 5"per1isor, )ho li2e)ise spent the last .2 years of his life in p"blic ser1ice )as adE"ded entitled to the benefits
of the ECC, "pon his death d"e to li1er cirrhosis.
The ca"se of death of petitioner:s h"sband co"ld 1ery )ell be related to his pre1io"s )or2in conditions. As a )elder, 9rancisco )as
e@posed to heat, as f"mes and chemical s"bstances comin from the b"rnin electrodes ca"sed by )eldin. #enerally, the metal b"rned is
iron. $n the co"rse thereof, other compo"nds and o@ides, s"ch as carbon mono@ide, carbon dio@ide, s"lf"r and phosphor"s, may be emitted
in the process of )eldin, dependin on the 2ind of material "sed and e@tent of corrosion of the metal )or2ed on. These 1aporiCed metals
are inhaled by the )elder in the process and sinificantly in this case, 9rancisco had to do )eldin Eobs )ithin enclosed compartments.
Research sho)s that inestion or inhalation of small amo"nts of iron o1er a n"mber of years may lead to siderosis. Ac"te poisonin brins
abo"t circ"latory collapse )hich may occ"r rapidly or be delayed to 4- ho"rs )ith li1er fail"re. These are ind"strial haCards to )hich
9rancisco )as e@posed. And in the lon co"rse of time, .2 years at that, his contin"o"s e@pos"re to b"rned electrodes and chemicals
emitted therefrom )o"ld li2ely ca"se poisonin and malf"nction of the li1er.
?octrine on compensability% The leadin doctrine on compensability is that laid do)n in the case of Raro v. Employees #ompensation
#ommission, )here this co"rt said 7There is a )idespread misconception that the poor employee is still arrayed aainst the miht and po)er
of his rich corporate employer. 8ence, he m"st be i1en all 2inds of fa1orable pres"mptions. This is fallacio"s. $t is no) the tr"st f"nd and not
the employer )hich s"ffers if benefits are paid to claimants )ho are not entitled "nder the la). The employer Eoins the employee in tryin to
ha1e their claims appro1ed. The employer is spared the problem of pro1in a neati1e proposition that the disease )as not ca"sed by
employment.
$t is no) the tr"st f"nd and not the employer )hich s"ffers if benefits are paid to claimants )ho are not entitled "nder the la). The
employer Eoins the employee in tryin to ha1e their claims appro1ed. The employer is spared the problem of pro1in a neati1e proposition
that the disease )as not ca"sed by employment.
Reason behind the doctrine% The 3e) 4abor Code has abolished the pres"mption of compensability for illness contracted by a )or2er
d"rin employment. To be entitled to disability benefits, the claimant has to present e1idence to pro1e that his ailment )as the res"lt of, or
the ris2 of contractin the same )ere ara1ated by )or2in conditions or the nat"re of his )or2.
6hile the pres"mption of compensability and theory of ara1ation "nder the 6or2men:s Compensation Act may ha1e been abandoned
"nder the ne) 4abor Code, the liberality of the la) in eneral in fa1or of the )or2in man still pre1ails. The Employees: Compensation Act is
basically a social leislation desined to afford relief to the )or2in man and )oman in o"r society.
NATIONAL SUGAR RE"INERIES COR. v. NLRC #*( NBSR SUER6ISORY UNION, ?ACI@UA TUC
G.R. No. 181561. M#,$. 4+, 1993
REGALADO, !.
"#$ts%
3ational 5"ar Refineries Corporation &3A5FRE9CO' operates . s"ar refineries located at !"2idnon, $loilo and !atanas. The !atanas
refinery )as pri1atiCed on April 11, 1,,2 p"rs"ant to ;roclamation 3o. /<. 1 ;ri1ate respondent "nion represents the former s"per1isors of
the 3A5FRE9CO !atanas 5"ar Refinery.
;etitioner implemented a +ob E1al"ation &+E' ;roram affectin all employees, from ran2(and(file to department heads. The +E ;roram
)as desined to rationaliCed the d"ties and f"nctions of all positions, reestablish le1els of responsibility, and reconiCe both )ae and
operational str"ct"res. +obs )ere ran2ed accordin to effort, responsibility, trainin and )or2in conditions and relati1e )orth of the Eob. As a
res"lt, all positions )ere re(e1al"ated, and all employees incl"din the members of respondent "nion )ere ranted salary adE"stments and
increases in benefits commens"rate to their act"al d"ties and f"nctions.
9or abo"t ten years prior to the +E ;roram, the members of respondent "nion )ere treated in the same manner as ran2(and file
employees. As s"ch, they "sed to be paid o1ertime, rest day and holiday pay p"rs"ant to the pro1isions of Articles -7, ,. and ,4 of the 4abor
Code as amended. 6ith the implementation of the +E ;roram, the follo)in adE"stments )ere made% &1' the members of respondent "nion
1/
)ere re(classified "nder le1els 5(/ to 5(- )hich are considered manaerial staff for p"rposes of compensation and benefits0 &2' there )as an
increase in basic pay of the a1erae of /<N of their basic pay prior to the +E ;roram, )ith the "nion members no) enEoyin a )ide ap
&;1,2*,.<< per month' in basic pay compared to the hihest paid ran2(and(file employee0 &.' lone1ity pay )as increased on top of
alinment adE"stments0 &4' they )ere entitled to increased company CO4A of ;22/.<< per month0 &/' there )as a rant of ;1<<.<<
allo)ance for rest day=holiday )or2.
T)o years after the implementation of the +E ;roram, specifically on +"ne 2<, 1,,<, the members of herein respondent "nion filed a
complainant )ith the e@ec"ti1e labor arbiter for non(payment of o1ertime, rest day and holiday pay alleedly in 1iolation of Article 1<< of the
4abor Code.
Issu&%
6O3 s"per1isory employees, as defined in Article 212 &m', !oo2 D of the 4abor Code, sho"ld be considered as officers or members of
the manaerial staff "nder Article -2, !oo2 $$$ of the same Code, and hence are not entitled to o1ertime rest day and holiday pay
H&'(%
$t is not disp"ted that the members of respondent "nion are s"per1isory employees, as defined employees, as defined "nder Article
212&m', !oo2 D of the 4abor Code on 4abor Relations, )hich reads%
7&m' AManaerial employee: is one )ho is 1ested )ith po)ers or preroati1es to lay do)n and e@ec"te manaement policies and=or to hire,
transfer, s"spend, lay(off, recall, dischared, assin or discipline employees. 5"per1isory employees are those )ho, in the interest of the
employer effecti1ely recommend s"ch manaerial actions if the e@ercise of s"ch a"thority is not merely ro"tinary or clerical in nat"re b"t
reH"ires the "se of independent E"dment. All employees not fallin )ithin any of those abo1e definitions are considered ran2(and(file
employees of this !oo2.>
;etitioner, ho)e1er, a1ers that for p"rposes of determinin )hether or not the members of respondent "nion are entitled to o1ertime, rest day
and holiday pay, said employees sho"ld be considered as 7officers or members of the manaerial staff> as defined "nder Article -2, !oo2 $$$
of the 4abor Code on 76or2in Conditions and Rest ;eriods> and amplified in 5ection 2, R"le $, !oo2 $$$ of the R"les to $mplement the 4abor
Code, to )it%
7Art. -2 #overage. K The pro1isions of this title shall apply to employees in all establishments and "nderta2ins )hether for profit or not,
b"t not to o1ernment employees, manaerial employees, field personnel, members of the family of the employer )ho are dependent on him
for s"pport, domestic helpers, persons in the personal ser1ice of another, and )or2ers )ho are paid by res"lts as determined by the
5ecretary of 4abor in Appropriate re"lations.>
M#*#g&,)#' &0-'o2&&s refer to those )hose primary d"ty consists of the manaement of the establishment in )hich they are employed
or of a department or s"bdi1ision thereof, and to other officers or members of the manaerial staff.
7A5ec. 2. E(emption. K The pro1isions of this r"le shall not apply to the follo)in persons if they H"alify for e@emption "nder the condition set
forth herein%
@@@ @@@ @@@
&b' Manaerial employees, if they meet all of the follo)in conditions, namely%
1. Their primary d"ty consists of the manaement of the establishment in )hich they are employed or of a department or s"bdi1ision
thereof%
2. They c"stomarily and re"larly direct the )or2 of t)o or more employees therein%
.. They ha1e the a"thority to hire or fire other employees of lo)er ran20 or their s"estions and recommendations as to the hirin
and firin and as to the promotion or any other chane of stat"s of other employees are i1en partic"lar )eiht.
&c' Officers or members of a manaerial staff if they perform the follo)in d"ties and responsibilities%
1. The primary d"ty consists of the performance of )or2 directly related to manaement policies of their employer0
2. C"stomarily and re"larly e@ercise discretion and independent E"dment0
.. &i' Re"larly and directly assist a proprietor or a manaerial employee )hose primary d"ty consists of the manaement of the
establishment in )hich he is employed or s"bdi1ision thereof0 or &ii' e@ec"te "nder eneral s"per1ision )or2 alon specialiCed or
1*
technical lines reH"irin special trainin, e@perience, or 2no)lede0 or &iii' e@ec"te "nder eneral s"per1ision special assinments
and tas2s0 and
4. 6ho do not de1ote more 2< percent of their ho"rs )or2ed in a )or2()ee2 to acti1ities )hich are not directly and closely related to
the performance of the )or2 described in pararaphs &1', &2', and abo1e.>
The H"estion )hether a i1en employee is e@empt from the benefits of the la) is a fact"al one dependent on the circ"mstances of the
partic"lar case, $n determinin )hether an employee is )ithin the terms of the stat"tes, the criterion is the character of the )or2 performed,
rather than the title of the employee:s position.
The +ob Dal"e Contrib"tion 5tatements 7 of the "nion members )ill sho) that these s"per1isory employees are "nder the direct
s"per1ision of their respecti1e department s"perintendents and that enerally they assist the latter in plannin, oraniCin, staffin, directin,
controllin comm"nicatin and in ma2in decisions in attainin the company:s set oals and obEecti1es. These s"per1isory employees are
li2e)ise responsible for the effecti1e and efficient operation of their respecti1e departments. More specifically, their d"ties and f"nctions
incl"de, amon others, the follo)in operations )hereby the employee%
1. assists the department s"perintendent in the follo)in%
a. plannin of systems and proced"res relati1e to department acti1ities0
b. oraniCin and sched"lin of )or2 acti1ities of the department, )hich incl"des employee shiftin sched"led and mannin
complement0
c. decision ma2in by pro1idin rele1ant information data and other inp"ts0
d. attainin the company:s set oals and obEecti1es by i1in his f"ll s"pport0
e. selectin the appropriate man to handle the Eob in the department0 and
f. preparin ann"al departmental b"det0
2. obser1es, follo)s and implements company policies at all times and recommends disciplinary action on errin s"bordinates0
.. trains and "ides s"bordinates on ho) to ass"me responsibilities and become more prod"cti1e0
4. cond"cts semi(ann"al performance e1al"ation of his s"bordinates and recommends necessary action for their
de1elopment=ad1ancement0
/. represents the s"perintendent or the department )hen appointed and a"thoriCed by the former0
*. coordinates and comm"nicates )ith other inter and intra department s"per1isors )hen necessary0
7. recommends disciplinary actions=promotions0
-. recommends meas"res to impro1e )or2 methods, eH"ipment performance, H"ality of ser1ice and )or2in conditions0
,. sees to it that safety r"les and re"lations and proced"re and are implemented and follo)ed by all 3A5FRE9CO employees,
recommends re1isions or modifications to said r"les )hen deemed necessary, and initiates and prepares reports for any obser1ed
abnormality )ithin the refinery0
1<. s"per1ises the acti1ities of all personnel "nder him and oes to it that instr"ctions to s"bordinates are properly implemented0 and
11. performs other related tas2s as may be assined by his immediate s"perior.
The members of respondent "nion dischare d"ties and responsibilities )hich inel"ctably H"alify them as officers or members of the
manaerial staff, as defined in 5ection 2, R"le $ !oo2 $$$ of the aforestated R"les to $mplement the 4abor Code, 1iC.% &1' their primary d"ty
consists of the performance of )or2 directly related to manaement policies of their employer0 &2' they c"stomarily and re"larly e@ercise
discretion and independent E"dment0 &.' they re"larly and directly assist the manaerial employee )hose primary d"ty consist of the
manaement of a department of the establishment in )hich they are employed &4' they e@ec"te, "nder eneral s"per1ision, )or2 alon
specialiCed or technical lines reH"irin special trainin, e@perience, or 2no)lede0 &/' they e@ec"te, "nder eneral s"per1ision, special
assinments and tas2s0 and &*' they do not de1ote more than 2<N of their ho"rs )or2ed in a )or2()ee2 to acti1ities )hich are not directly
and clearly related to the performance of their )or2 hereinbefore described.
The "nion members sho"ld be considered as officers and members of the manaerial staff and are, therefore, e@empt from the co1erae
of Article -2. ;erforce, they are not entitled to o1ertime, rest day and holiday.
BONI"ACIO v. GO6ERNMENT SER6ICE INSURANCE SYSTEM BM)*)st,2 o/ E(u$#t)o* < Cu'tu,&C #*( EMLOYEES= COMENSATION
COMMISSION
G.R. No. L764485. D&$&01&, 19, 1986
"ERNAN, !.
"#$ts%
17
The late 4o"rdes !onifacio )as a classroom teacher assined to the district of !aamanoc, ?i1ision of Catand"anes, Ministry of
Ed"cation and C"lt"re from A""st, 1,*/ "ntil she contracted carcinoma of the breast )ith metastases to the astrointestinal tract and l"ns
)hich ca"sed her death on October /, 1,7-.
5he "nder)ent radical mastectomy for cancer of the breast in 1,7.. $n 1,7*, )hen her ailment )as noted to ha1e metastasiCed to her
abdomen, she s"bmitted herself to an operation 2no)n as e@ploratory laparotomy in March of the same year. On 5eptember 1, 1,7-, she
complained of abdominal pain, abdominal enlarement, 1omitin, and fail"re to pass stools in spite of la@ati1es. Fpon operation it )as fo"nd
that her entire astrointestinal tract )as en1eloped by carcinoma. ?espite chemotherapy, she died on October /, 1,7- from carcinoma of the
breast metastatic to astrointestinal tract and l"ns.
Issu&%
6O3 the deceased:s ca"se of death is compensable
H&'(%
3o. A $o0-&*s#1'& s)$>*&ss means any illness definitely accepted as an occ"pational disease listed by the Employees Compensation
Commission, or any illness ca"sed by employment s"bEect to proof by the employee that the ris2 of contractin the same is increased by
)or2in conditions. 9or this p"rpose, the Commission is empo)ered to determine and appro1e occ"pational diseases and )or2(related
illnesses that may be considered compensable based on pec"liar haCards of employment.
Th"s, for the sic2ness or the res"ltin disability or death to be compensable, the sic2ness m"st be the res"lt of an accepted occ"pational
disease fisted by the Employees Compensation Commission IAnne@ 7A> of the Amended R"les on Employees CompensationJ, or any other
sic2ness ca"sed by employment s"bEect to proof by claimant that the ris2 of contractin the same is increased by )or2in conditions.
Carcinoma of the breast )ith metastases to the astrointestinal tract and l"ns is not listed by the Commission as an occ"pational
disease. As to the metastases to the astrointestinal tract and l"ns the Commission lists s"ch disease as occ"pational only in the follo)in
employment%
cc!pational Diseases *at!re of Employment
1*. Cancer of stomach and
other lymphatic and blood
formin 1essels0 nasal
ca1ity and sin"ses
6ood)or2ers, )ood
prod"cts ind"stry
carpenters, loers and
employees in p"lp and
paper mills and ply)ood
mills
17. Cancer of the l"ns,
li1er and brain.
Dinyl chloryde )or2ers,
plastic )or2ers.
Fnder the 6or2men:s Compensation 4a), it is not necessary for the claimant to carry the b"rden of proof to establish his case to the point
of demonstration. $t is not necessary to pro1e that employment )as the sole ca"se of the death or inE"ry s"ffered by the employee. $t is
s"fficient to sho) that the employment had contrib"ted to the ara1ation or acceleration of s"ch death or ailment. Once the disease had
been sho)n to ha1e arisen in the co"rse of employment, it is pres"med by la), in the absence of s"bstantial e1idence to the contrary, that it
arose o"t of it.
Fnder the present 4abor Code, the 7latit"dinarian or e@pansi1e application of the 6or2men:s Compensation 4a) in fa1or of the employee
or )or2er> no loner pre1ails as the b"rden of sho)in proof of ca"sation has shifted bac2 to the employee partic"larly in cases of sic2ness
or inE"ries )hich are not accepted or listed as occ"pational by the Employees Compensation Commission.
TADADA v. TU6ERA
G.R. No. L763919. A-,)' 4+, 1989
ESCOLIN, !.
"#$ts%
$n1o2in the riht of the people to be informed on matters of p"blic concern as )ell as the principle that la)s to be 1alid and enforceable
m"st be p"blished in the Official #aCette, petitioners filed for )rit of mandam"s to compel respondent p"blic officials to p"blish and=or ca"se
1-
to p"blish 1ario"s presidential decrees, letters of instr"ctions, eneral orders, proclamations, e@ec"ti1e orders, letters of implementations and
administrati1e orders.
The 5olicitor #eneral, representin the respondents, mo1ed for the dismissal of the case, contendin that petitioners ha1e no leal
personality to brin the instant petition.
Issu&%
6O3 p"blication in the Official #aCette is reH"ired before any la) or stat"te becomes 1alid and enforceable.
H&'(%
Art. 2 of the Ci1il Code does not precl"de the reH"irement of p"blication in the Official #aCette, e1en if the la) itself pro1ides for the date
of its effecti1ity. The clear obEect of this pro1ision is to i1e the eneral p"blic adeH"ate notice of the 1ario"s la)s )hich are to re"late their
actions and cond"ct as citiCens. 6itho"t s"ch notice and p"blication, there )o"ld be no basis for the application of the ma@im ignoratia legis
nominem e(c!sat. $t )o"ld be the heiht of inE"stice to p"nish or other)ise b"rden a citiCen for the transression of a la) )hich he had no
notice )hatsoe1er, not e1en a constr"cti1e one.
The 1ery first cla"se of 5ection 1 of CA *.- reads% there shall be p"blished in the Official #aCetteS. The )ord 7shall> therein imposes
"pon respondent officials an imperati1e d"ty. That d"ty m"st be enforced if the constit"tional riht of the people to be informed on matter of
p"blic concern is to be i1en s"bstance and 1alidity.
The p"blication of presidential iss"ances of p"blic nat"re or of eneral applicability is a reH"irement of d"e process. $t is a r"le of la) that
before a person may be bo"nd by la), he m"st first be officially and specifically informed of its contents. The Co"rt declared that presidential
iss"ances of eneral application )hich ha1e not been p"blished ha1e no force and effect.
TADADA v. TU6ERA
GR L763919, 49. D&$&01&, 1986
C,uE, !.
"#$ts%
This is a motion for reconsideration of the decision prom"lated on April 24, 1,-/. Respondent ar"ed that )hile p"blication )as
necessary as a r"le, it )as not so )hen it )as 7other)ise> as )hen the decrees themsel1es declared that they )ere to become effecti1e
immediately "pon their appro1al.
Issu&s%
6O3 a distinction be made bet)een la)s of eneral applicability and la)s )hich are not as to their p"blication0 6O3 a p"blication shall
be made in p"blications of eneral circ"lation.
H&'(%
The cla"se 7"nless it is other)ise pro1ided> refers to the date of effecti1ity and not to the reH"irement of p"blication itself, )hich cannot in
any e1ent be omitted. This cla"se does not mean that the leislat"re may ma2e the la) effecti1e immediately "pon appro1al, or in any other
date, )itho"t its pre1io"s p"blication.
74a)s> sho"ld refer to all la)s and not only to those of eneral application, for strictly spea2in, all la)s relate to the people in eneral
albeit there are some that do not apply to them directly. A la) )itho"t any bearin on the p"blic )o"ld be in1alid as an intr"sion of pri1acy or
as class leislation or as an !ltra vires act of the leislat"re. To be 1alid, the la) m"st in1ariably affect the p"blic interest e1e if it miht be
directly applicable only to one indi1id"al, or some of the people only, and not to the p"blic as a )hole.
All stat"tes, incl"din those of local application and pri1ate la)s, shall be p"blished as a condition for their effecti1ity, )hich shall bein 1/
days after p"blication "nless a different effecti1ity date is fi@ed by the leislat"re.
;"blication m"st be in f"ll or it is no p"blication at all, since its p"rpose is to inform the p"blic of the content of the la).
1,
Article 2 of the Ci1il Code pro1ides that p"blication of la)s m"st be made in the Official #aCette, and not else)here, as a reH"irement for
their effecti1ity. The 5"preme Co"rt is not called "pon to r"le "pon the )isdom of a la) or to repeal or modify it if it finds it impractical.
The p"blication m"st be made forth)ith, or at least as soon as possible.
C#'#'#*g vs. @)'')#0s
GR +5888, 4 D&$&01&, 19+8
L#u,&', !%
"#$ts%
The 3ational Traffic Commission, in its resol"tion of 17 +"ly 1,4<, resol1ed to recommend to the ?irector of ;"blic 6or2s and to the
5ecretary of ;"blic 6or2s and Comm"nications that animal(dra)n 1ehicles be prohibited from passin alon Rosario 5treet e@tendin from
;laCa Calderon de la !arca to ?asmariTas 5treet, from 7%.< a.m. to 12%.< p.m. and from 1%.< p.m. to /%.< p.m.0 and alon RiCal A1en"e
e@tendin from the railroad crossin at Antipolo 5treet to Echa"e 5treet, from 7 a.m. to 11 p.m., from a period of one year from the date of
the openin of the Colante !ride to traffic. The Chairman of the 3ational Traffic Commission, on 1- +"ly 1,4<, recommended to the
?irector of ;"blic 6or2s the adoption of the meas"re proposed in the resol"tion, in p"rs"ance of the pro1isions of Common)ealth Act /4-,
)hich a"thoriCes said ?irector of ;"blic 6or2s, )ith the appro1al of the 5ecretary of ;"blic 6or2s and Comm"nications, to prom"late r"les
and re"lations to re"late and control the "se of and traffic on national roads. On 2 A""st 1,4<, the ?irector of ;"blic 6or2s, in his first
indorsement to the 5ecretary of ;"blic 6or2s and Comm"nications, recommended to the latter the appro1al of the recommendation made
by the Chairman of the 3ational Traffic Commission, )ith the modification that the closin of RiCal A1en"e to traffic to animal(dra)n 1ehicles
be limited to the portion thereof e@tendin from the railroad crossin at Antipolo 5treet to ACcarraa 5treet. On 1< A""st 1,4<, the 5ecretary
of ;"blic 6or2s and Comm"nications, in his second indorsement addressed to the ?irector of ;"blic 6or2s, appro1ed the recommendation
of the latter that Rosario 5treet and RiCal A1en"e be closed to traffic of animal(dra)n 1ehicles, bet)een the points and d"rin the ho"rs as
indicated, for a period of 1 year from the date of the openin of the Colante !ride to traffic. The Mayor of Manila and the Actin Chief of
;olice of Manila ha1e enforced and ca"sed to be enforced the r"les and re"lations th"s adopted. Ma@imo Calalan, in his capacity as a
pri1ate citiCen and as a ta@payer of Manila, bro"ht before the 5"preme co"rt the petition for a )rit of prohibition aainst A. ?. 6illiams, as
Chairman of the 3ational Traffic Commission0 Dicente 9raante, as ?irector of ;"blic 6or2s0 5erio !ayan, as Actin 5ecretary of ;"blic
6or2s and Comm"nications0 E"loio Rodri"eC, as Mayor of the City of Manila0 and +"an ?omin"eC, as Actin Chief of ;olice of Manila.
Issu&%
6O3 the r"les and re"lations prom"lated by the ?irector of ;"blic 6or2s infrine "pon the constit"tional precept reardin the
promotion of social E"stice to ins"re the )ell(bein and economic sec"rity of all the people.
H&'(%
The promotion of social E"stice is to be achie1ed not thro"h a mista2en sympathy to)ards any i1en ro"p. 5ocial E"stice is 7neither
comm"nism, nor despotism, nor atomism, nor anarchy,> b"t the h"maniCation of la)s and the eH"aliCation of social and economic forces by
the 5tate so that E"stice in its rational and obEecti1ely sec"lar conception may at least be appro@imated. 5ocial E"stice means the promotion
of the )elfare of all the people, the adoption by the #o1ernment of meas"res calc"lated to ins"re economic stability of all the competent
elements of society, thro"h the maintenance of a proper economic and social eH"ilibri"m in the interrelations of the members of the
comm"nity, constit"tionally, thro"h the adoption of meas"res leally E"stifiable, or e@tra(constit"tionally, thro"h the e@ercise of po)ers
"nderlyin the e@istence of all o1ernments on the time(honored principle of sal!s pop!li est s!prema le(. 5ocial E"stice, therefore, m"st be
fo"nded on the reconition of the necessity of interdependence amon di1ers and di1erse "nits of a society and of the protection that sho"ld
be eH"ally and e1enly e@tended to all ro"ps as a combined force in o"r social and economic life, consistent )ith the f"ndamental and
paramo"nt obEecti1e of the state of promotin the health, comfort, and H"iet of all persons, and of brinin abo"t 7the reatest ood to the
reatest n"mber.>
HILIINE ASSOCIATION O" SER6ICE EFORTERS, INC. ?ASEIA v. TORRES
G.R. No. 181459. August 6, 1994
GRIDO7AGUINO, !.
"#$ts%
2<
A petition for prohibition )ith temporary restrainin order )as filed by the ;hilippine Association of 5er1ice E@porters &;A5E$, for short', to
prohibit and enEoin the 5ecretary of the ?epartment of 4abor and Employment &?O4E' and the Administrator of the ;hilippine O1erseas
Employment Administration &or ;OEA' from enforcin and implementin ?O4E ?epartment Order 3o. 1*, 5eries of 1,,1 and ;OEA
Memorand"m Circ"lars 3os. .< and .7, 5eries of 1,,1, temporarily s"spendin the recr"itment by pri1ate employment aencies of 9ilipino
domestic helpers for 8on Pon and 1estin in the ?O4E, thro"h the facilities of the ;OEA, the tas2 of processin and deployin s"ch
)or2ers.
On +"ne 1, 1,,1, as a res"lt of p"blished stories reardin the ab"ses s"ffered by 9ilipino ho"semaids employed in 8on Pon, ?O4E
5ecretary R"ben ?. Torres iss"ed ?epartment Order 3o. 1*, 5eries of 1,,1, temporarily s"spendin the recr"itment by pri1ate employment
aencies of 9ilipino domestic helpers oin to 8on Pon. The ?O4E itself, thro"h the ;OEA too2 o1er the b"siness of deployin s"ch
8on Pon(bo"nd )or2ers.
;"rs"ant to the abo1e ?O4E circ"lar, the ;OEA iss"ed Memorand"m Circ"lar 3o. .<, 5eries of 1,,1, dated +"ly 1<, 1,,1, pro1idin
#F$?E4$3E5 on the #o1ernment processin and deployment of 9ilipino domestic helpers to 8on Pon and the accreditation of 8on Pon
recr"itment aencies intendin to hire 9ilipino domestic helpers.
On A""st 1, 1,,1, the ;OEA Administrator also iss"ed Memorand"m Circ"lar 3o. .7, 5eries of 1,,1, on the processin of employment
contracts of domestic )or2ers for 8on Pon.
Issu&s%
6O3 respondents acted )ith ra1e ab"se of discretion and=or in e@cess of their r"le(ma2in a"thority in iss"in said circ"lars0 6O3 the
assailed ?O4E and ;OEA circ"lars are contrary to the Constit"tion0 )hether the reH"irements of p"blication and filin )ith the Office of the
3ational Administrati1e Reister )ere not complied )ith
H&'(%
Article .* of the 4abor Code rants the 4abor 5ecretary the po)er to restrict and re"late recr"itment and placement acti1ities.
Art. .*. Reg!latory +ower. K The 5ecretary of 4abor shall ha1e the po)er to restrict and reg!late the recr"itment and placement acti1ities
of all aencies )ithin the co1erae of this title IRe"lation of Recr"itment and ;lacement Acti1itiesJ and is hereby a!thori,ed to iss!e orders
and prom!lgate r!les and reg!lations to carry o!t the ob-ectives and implement the provisions of this title.
On the other hand, the scope of the re"latory a"thority of the ;OEA, )hich )as created by E@ec"ti1e Order 3o. 7,7 to ta2e o1er the
f"nctions of the O1erseas Employment ?e1elopment !oard, the 3ational 5eamen !oard, and the o1erseas employment f"nctions of the
!"rea" of Employment 5er1ices, is broad and far(ranin for%
1. Amon the f"nctions inherited by the ;OEA from the def"nct !"rea" of Employment 5er1ices )as the po)er and d"ty to establish
and maintain a reistration and=or licensin system to re"late pri1ate sector participation in the recr"itment and placement of
)or2ers, locally and o1erseas0
2. $t ass"med from the def"nct O1erseas Employment ?e1elopment !oard the po)er and d"ty to recr"it and place )or2ers for o1erseas
employment of 9ilipino contract )or2ers on a o1ernment to o1ernment arranement and in s"ch other sectors as policy may
dictate0
.. 9rom the 3ational 5eamen !oard, the ;OEA too2 o1er to re"late and s"per1ise the acti1ities of aents or representati1es of
shippin companies in the hirin of seamen for o1erseas employment0 and sec"re the best possible terms of employment for contract
seamen )or2ers and sec"re compliance there)ith.
restrict ( to confine, limit or stop
reg!late ( the po)er to protect, foster, promote, preser1e, and control )ith d"e reard for the interests, first and foremost, of the p"blic,
then of the "tility and of its patrons
?O4E Administrati1e Order 3o. 1*J merely restricted the scope or area of petitioner:s b"siness operations by e@cl"din therefrom
recr"itment and deployment of domestic helpers for 8on Pon till after the establishment of the 7mechanisms> that )ill enhance the
protection of 9ilipino domestic helpers oin to 8on Pon. $n fine, other than the recr"itment and deployment of 9ilipino domestic helpers
for 8on2on, petitioner may still deploy other class of 9ilipino )or2ers either for 8on2on and other co"ntries and all other classes of
9ilipino )or2ers for other co"ntries.
5aid administrati1e iss"ances, intended to c"rtail, if not to end, rampant 1iolations of the r"le aainst e@cessi1e collections of placement
and doc"mentation fees, tra1el fees and other chares committed by pri1ate employment aencies recr"itin and deployin domestic
21
helpers to 8on2on. They are reasonable, 1alid and E"stified "nder the eneral )elfare cla"se of the Constit"tion, since the recr"itment and
deployment b"siness, as it is cond"cted today, is affected )ith p"blic interest.
The alleed ta2eo1er Iof the b"siness of recr"itin and placin 9ilipino domestic helpers in 8on2onJ is merely a remedial meas"re, and
e@pires after its p"rpose shall ha1e been attained. This is e1ident from the tenor of Administrati1e Order 3o. 1* that recr"itment of 9ilipino
domestic helpers oin to 8on2on by pri1ate employment aencies are hereby 7temporarily s"spended effecti1e +"ly 1, 1,,1.> The
alleed ta2eo1er is limited in scope, bein confined to recr"itment of domestic helpers oin to 8on2on only.
The E"stification for the ta2eo1er of the processin and deployin of domestic helpers for 8on2on res"ltin from the restriction of the
scope of petitioner:s b"siness is confined solely to the "nscr"p"lo"s practice of pri1ate employment aencies 1ictimiCin applicants for
employment as domestic helpers for 8on2on and not the )hole recr"itment b"siness in the ;hilippines.
The H"estioned circ"lars are therefore a 1alid e@ercise of the police po)er as deleated to the e@ec"ti1e branch of #o1ernment.
3e1ertheless, they are leally in1alid, defecti1e and "nenforceable for lac2 of po)er p"blication and filin in the Office of the 3ational
Administrati1e Reister as reH"ired in Article 2 of the Ci1il Code, Article / of the 4abor Code and 5ections .&1' and 4, Chapter 2, !oo2 D$$ of
the Administrati1e Code of 1,-7 )hich pro1ide%
Art. 2. 4a)s shall ta2e effect after fifteen &1/' days follo)in the completion of their p"blication in the Official #aCatte, "nless it is other)ise
pro1ided.
Art. /. R!les and Reg!lations. K The ?epartment of 4abor and other o1ernment aencies chared )ith the administration and
enforcement of this Code or any of its parts shall prom"late the necessary implementin r"les and re"lations. 5"ch r"les and re"lations
shall become effecti1e fifteen &1/' days after anno"ncement of their adoption in ne)spapers of eneral circ"lation.
5ec. .. .iling. K &1' E1ery aency shall file )ith the Fni1ersity of the ;hilippines 4a) Center, three &.' certified copies of e1ery r"le
adopted by it. R"les in force on the date of effecti1ity of this Code )hich are not filed )ithin three &.' months shall not thereafter be the basis
of any sanction aainst any party or persons.
5ec. 4. Effecti1ity. K $n addition to other r"le(ma2in reH"irements pro1ided by la) not inconsistent )ith this !oo2, each r"le shall become
effecti1e fifteen &1/' days from the date of filin as abo1e pro1ided "nless a different date is fi@ed by la), or specified in the r"le in cases of
imminent daner to p"blic health, safety and )elfare, the e@istence of )hich m"st be e@pressed in a statement accompanyin the r"le. The
aency shall ta2e appropriate meas"res to ma2e emerency r"les 2no)n to persons )ho may be affected by them.
DELOS SANTOS v. !EBSEN MARITIME, INC.
G.R. No. 19+189
GARCIA, !.
"#$ts%
+ebsen Maritime, $nc., for and in behalf of AboitiC 5hippin Co. &AboitiC 5hippin, for short', hired petitioner:s h"sband, #il R. ?elos 5antos
&hereinafter, ?elos 5antos' as third enineer of MD 6ild $ris. The correspondin contract of employment, as appro1ed by the ;hilippine
O1erseas Employment Administration &;OEA', )as for a fi@ed period of 1 month and for a specific "nderta2in of cond"ctin said 1essel to
and from +apan. $t H"oted ?elos 5antos: basic monthly salary and other monetary benefits in F5 c"rrency. Fnder ;OEA r"les, all
employers and principals are reH"ired to adopt the ;OEA ( standard employment contract &;OEA(5EC' )itho"t preE"dice to their adoption of
terms and conditions o1er and abo1e the minim"m prescribed by that aency.
On the 1essel:s ret"rn to the ;hilippines a month after, ?elos 5antos remained on board, respondent ha1in opted to retain his ser1ices
)hile the 1essel "nder)ent repairs in Ceb". After its repair, MD 6ild $ris, this time renamed=reistered as MD 5"per RoRo 1<<, sailed )ithin
domestic )aters, ha1in been mean)hile iss"ed by the Maritime $nd"stry A"thority a Certificate of Dessel Reistry and a permit to enae in
coast)ise trade on the Manila(Ceb"(Manila(Uamboana(#eneral 5antos(Manila ro"te. ?"rin this period of employment, ?elos 5antos )as
paid by and recei1ed from respondent his salary in ;hilippine peso thr" a payroll(deposit arranement )ith the ;hilippine Commercial O
$nd"strial !an2.
5ome fi1e months into the 1essel:s inter(island 1oyaes, ?elos 5antos e@perienced episodes of chest pain, n"mbness and body
)ea2ness )hich e1ent"ally left him temporarily paralyCed. On 17 9ebr"ary 1,,*, he )as bro"ht to the Manila ?octor:s 8ospital G a d"ly
22
accredited hospital of respondent ( )here he "nder)ent a spinal col"mn operation. Respondent sho"ldered all operation(related e@penses,
incl"si1e of his post operation confinement.
As narrated in the assailed decision of the Co"rt of Appeals, the follo)in e1ents ne@t transpired%

1. After his dischare from the Manila ?octor:s, ?elos 5antos )as made to "ndero physical therapy sessions at the same hospital,
)hich compelled the !atanas(based ?elos 5antoses to rent a room near the hospital at ;.,<<<.<< a month0
2. ?elos 5antos "nder)ent a second spinal operation at the non(accredited 4o"rdes 8ospital at the cost of ;11,, /.*.<<0 and
.. After 4o"rdes, ?elos 5antos )as confined in a clinic in 5an +"an, !atanas )here ;2<,<<<.<< in hospitaliCation e@penses )as
inc"rred.

The spo"ses ?elos 5antos paid all the e@penses attendant the second spinal operation as )ell as for the s"bseH"ent medical treatment.
;etitioner:s demand for reimb"rsement of these e@penses )as reEected by respondent for the reason that all the sic2ness benefits of ?elos
5antos "nder the 5ocial 5ec"rity 5ystem &555' 4a) had already been paid.
Issu&%
)hich, bet)een the ;OEA(5EC and the 4abor Code, o1erns the employer(employee relationship bet)een ?elos 5antos and respondent
after MD 6ild $ris, as later renamed 5"per RoRo 1<<, ret"rned to the co"ntry from its one(month cond"ction 1oyae to and from +apan
H&'(%
The fact that ?elos 5antos contin"ed to )or2 in the same 1essel )hich sailed )ithin ;hilippine )aters does not mean that the ;OEA
standard employment contract contin"es to be enforced bet)een the parties. The employment of ?elos 5antos is )ithin the ;hilippines, and
not on a forein shore. The pro1isions of the 4abor Code shall o1ern their employer(employee relationship.
;OEA )as created primarily to "nderta2e a systematic proram for o1erseas employment of 9ilipino )or2ers and to protect their rihts to
fair and eH"itable employment practices. And to ens"re that o1erseas )or2ers, incl"din seafarers on board ocean(oin 1essels, are amply
protected, the ;OEA is a"thoriCed to form"late employment standards in accordance )ith )elfare obEecti1es of the o1erseas employment
proram. #i1en this consideration, the Co"rt is at a loss to "nderstand )hy the ;OEA(5EC sho"ld be made to contin"e to apply to domestic
employment, as here, in1ol1in a 9ilipino seaman on board an inter(island 1essel.
?elos 5antos: ;OEA(appro1ed employment contract )as for a definite term of 1 month only. After the lapse of the said period, his
employment "nder the ;OEA(appro1ed contract may be deemed as f!nct!s oficio and ?elos 5antos: employment p"rs"ant thereto
considered a"tomatically terminated, there bein no m"t"ally(areed rene)al or e@tension of the e@pired contract.
A seaman need not physically disembar2ed from a 1essel at the e@piration of his employment contract to ha1e s"ch contract considered
terminated. And the repatriation aspect of the contract ass"mes sinificance only )here the 1essel remains in a forein port. 9or, repatriation
pres"pposes a ret"rn to one:s co"ntry of oriin or citiCenship. $n the case at bar, ho)e1er, there can be H"ibblin that MD 6ild $ris ret"rned to
the port of Ceb" )ith ?elos 5antos on board. ;arenthetically, )hile the parties are areed that their "nderlyin contract )as e@ec"ted in the
co"ntry, the records do not indicate )hat city or pro1ince of the ;hilippines is the specific point of hire. 6hile petitioner says it is Manila, she
did not bother to attach to her petition a copy of the contract of employment in H"estion.
;etitioner s"bmits, echoin the 34RC:s holdin, that the ;OEA(appro1ed contract remained in f"ll force and effect e1en after the
e@piry thereof o)in to the interplay of the follo)in circ"mstances% 1' ?elos 5antos, after s"ch contract e@piration, did not concl"de another
contract of employment )ith respondent, b"t )as as2ed to remain and )or2 on board the same 1essel E"st the same0 and 2' $f the parties
intended their employer(employee relationship to be "nder the aeis of a ne) contract, s"ch intention sho"ld ha1e been embodied in a ne)
areement.
The fact that respondent retained ?elos 5antos and allo)ed him to remain on board the 1essel cannot pla"sibly be interpreted, in conte@t,
as e1idencin an intention on its part to contin"e )ith the ;OEA(5EC. $n the practical 1ie)point, there co"ld ha1e been no sense in
consentin to rene)al since the rationale for the e@ec"tion of the ;OEA(appro1ed contract had already been ser1ed and achie1ed.
DUTY "REE HILIINES v. MO!ICA
G.R. No. 166369. S&-t&01&, 38, 4889
2.
YNARES7SANTIAGO, !.
"#$ts%
The ?iscipline Committee of ?"ty 9ree ;hilippines &?9;' rendered a decision findin 5toc2 Cler2 Rossano MoEica "ilty of 3elect of ?"ty
by ca"sin considerable damae to or loss of materials, assets and property of ?9;. Th"s, MoEica )as considered forcibly resined from the
ser1ice )ith forfeit"re of all benefits e@cept his salary and the monetary 1al"e of the accr"ed lea1e credits.
MoEica )as formally informed of his forced resination on +an"ary 14, 1,,-. There"pon, he filed a complaint for illeal dismissal )ith
prayer for reinstatement, payment of f"ll bac2 )aes, damaes, and attorney:s fees, aainst ?9; before the 3ational 4abor Relations
Commission &34RC'.
Issu&%
6O3 the decision rendered by 34RC and affirmed by CA sho"ld be dismissed for lac2 of E"risdiction
H&'(%
Bes. Respondent MoEica is a ci1il ser1ice employee0 therefore, E"risdiction is loded not )ith the 34RC, b"t )ith the Ci1il 5er1ice
Commission.
?9; )as created "nder E@ec"ti1e Order &EO' 3o. 4*I-J on 5eptember 4, 1,-* primarily to a"ment the ser1ice facilities for to"rists and to
enerate forein e@chane and re1en"e for the o1ernment. $n order for the o1ernment to e@ercise direct and effecti1e control and
re"lation o1er the ta@ and d"ty free shops, their establishment and operation )as 1ested in the Ministry, no) ?epartment of To"rism &?OT',
thro"h its implementin arm, the ;hilippine To"rism A"thority &;TA'.I,J All the net profits from the merchandisin operations of the shops
accr"ed to the ?OT.
As pro1ided "nder ;residential ?ecree &;?' 3o. /*4,I1<J ;TA is a corporate body attached to the ?OT. As an attached aency, the
recr"itment, transfer, promotion and dismissal of all its personnel )as o1erned by a merit system established in accordance )ith the ci1il
ser1ice r"les. $n fact, all ;TA officials and employees are s"bEect to the Ci1il 5er1ice r"les and re"lations.
Accordinly, since ?9; is "nder the e@cl"si1e a"thority of the ;TA, it follo)s that its officials and employees are li2e)ise s"bEect to the
Ci1il 5er1ice r"les and re"lations. Clearly then, MoEica:s reco"rse to the 4abor Arbiter )as not proper. 8e sho"ld ha1e follo)ed the
proced"re laid do)n in ?9;:s merit system and the Ci1il 5er1ice r"les and re"lations.
agency G any b"rea", office, commission, administration, board, committee, instit"te, corporation, )hether performin o1ernmental or
proprietary f"nction, or any other "nit of the 3ational #o1ernment, as )ell as pro1incial, city or m"nicipal o1ernment, e@cept as other)ise
pro1ided
government employees G all employees of all branches, s"bdi1isions, instr"mentalities, and aencies, of the #o1ernment, incl"din
o1ernment(o)ned or controlled corporations )ith oriinal charters.
EO 3o. 2,2 or )he /dministrative #ode of 0123 empo)ered the Ci1il 5er1ice Commission to hear and decide administrati1e cases
instit"ted by or bro"ht before it directly or on appeal, incl"din contested appointments, and re1ie) decisions and actions of its offices and
of the aencies attached to it.
The established r"le is that the hirin and firin of employees of o1ernment(o)ned and controlled corporations are o1erned by
pro1isions of the Ci1il 5er1ice 4a) and Ci1il 5er1ice R"les and Re"lations. +"risdiction o1er the stri2e and the dismissal of pri1ate
respondents is therefore loded not )ith the 34RC b"t )ith the Ci1il 5er1ice Commission.
EO 3o. 2,2 pro1ided that ci1il ser1ice employees ha1e the riht to present their complaints or rie1ances to manaement and ha1e them
adE"dicated as e@peditio"sly as possible in the best interest of the aency, the o1ernment as a )hole, and the employee concerned. 5"ch
complaint or rie1ances shall be resol1ed at the lo)est possible le1el in the department or aency, as the case may be, and the employee
shall ha1e the riht to appeal s"ch decision to hiher a"thorities. $n case any disp"te remains "nresol1ed after e@ha"stin all the a1ailable
remedies "nder e@istin la)s and proced"re, the parties may Eointly refer the disp"te in the ;"blic 5ector 4abor Manaement Co"ncil for
appropriate action.
24
SOCIAL SECURITY SYSTEM EMLOYEES ASSOCIATION ?SSSEAA v. CA
G.R. No. 89459 !u'2 48, 1989
CORTES, !.
"#$ts%
The 555 filed a complaint for damaes )ith a prayer for a )rit of preliminary inE"nction aainst petitioners, allein that on +"ne ,, 1,-7,
the officers and members of 555EA staed an illeal stri2e and barricaded the entrances to the 555 !"ildin, pre1entin non(stri2in
employees from reportin for )or2 and 555 members from transactin b"siness )ith the 5550 that the stri2e )as reported to the ;"blic
5ector 4abor ( Manaement Co"ncil, )hich ordered the stri2ers to ret"rn to )or20 that the stri2ers ref"sed to ret"rn to )or20 and that the 555
s"ffered damaes as a res"lt of the stri2e. The complaint prayed that a )rit of preliminary inE"nction be iss"ed to enEoin the stri2e and that
the stri2ers be ordered to ret"rn to )or20 that the petitioners be ordered to pay damaes0 and that the stri2e be declared illeal.
The 555EA )ent on stri2e after the 555 failed to act on the "nion:s demands, )hich incl"ded% implementation of the pro1isions of the old
555(555EA collecti1e barainin areement &C!A' on chec2(off of "nion d"es0 payment of accr"ed o1ertime pay, niht differential pay and
holiday pay0 con1ersion of temporary or contract"al employees )ith * months or more of ser1ice into re"lar and permanent employees and
their entitlement to the same salaries, allo)ances and benefits i1en to other re"lar employees of the 5550 and payment of the children:s
allo)ance of ;.<.<<, and after the 555 ded"cted certain amo"nts from the salaries of the employees and alleedly committed acts of
discrimination and "nfair labor practices.
The position of the petitioners is that the Reional Trial Co"rt had no E"risdiction to hear the case initiated by the 555 and to iss"e the
restrainin order and the )rit of preliminary inE"nction, as E"risdiction lay )ith the ?epartment of 4abor and Employment or the 3ational 4abor
Relations Commission, since the case in1ol1es a labor disp"te.
On the other hand, the 555 ad1ances the contrary 1ie), on the ro"nd that the employees of the 555 are co1ered by ci1il ser1ice la)s
and r"les and re"lations, not the 4abor Code, therefore they do not ha1e the riht to stri2e. 5ince neither the ?O4E nor the 34RC has
E"risdiction o1er the disp"te, the Reional Trial Co"rt may enEoin the employees from stri2in.
Issu&s%
1. ?o the employees of the 555 ha1e the riht to stri2eL
2. ?oes the Reional Trial Co"rt ha1e E"risdiction to hear the case initiated by the 555 and to enEoin the stri2ers from contin"in )ith the
stri2e and to order them to ret"rn to )or2L
H&'(%
Considerin that "nder the 1,-7 Constit"tion 7TJhe ci1il ser1ice embraces all branches, s"bdi1isions, instr"mentalities, and aencies of the
#o1ernment, incl"din o1ernment(o)ned or controlled corporations )ith oriinal charters> IArt. $Q&!', 5ec. .2&l' see also 5ec. 1 of E.O. 3o.
1-< )here the employees in the ci1il ser1ice are denominated as 7o1ernment employees>J and that the 555 is one s"ch o1ernment(
controlled corporation )ith an oriinal charter, ha1in been created "nder R.A. 3o. 11*1, its employees are part of the ci1il ser1ice and are
co1ered by the Ci1il 5er1ice Commission:s memorand"m prohibitin stri2es. This bein the case, the stri2e staed by the employees of the
555 )as illeal.
The eneral r"le is that the terms and conditions of employment in the #o1ernment, incl"din any political s"bdi1ision or instr"mentality
thereof are o1erned by la). 5ince the terms and conditions of o1ernment employment are fi@ed by la), o1ernment )or2ers cannot "se
the same )eapons employed by )or2ers in the pri1ate sector to sec"re concessions from their employers. The principle behind labor
"nionism in pri1ate ind"stry is that ind"strial peace cannot be sec"red thro"h comp"lsion by la). Relations bet)een pri1ate employers and
their employees rest on an essentially 1ol"ntary basis. 5"bEect to the minim"m reH"irements of )ae la)s and other labor and )elfare
leislation, the terms and conditions of employment in the "nioniCed pri1ate sector are settled thro"h the process of collecti1e barainin. $n
o1ernment employment, ho)e1er, it is the leislat"re and, )here properly i1en deleated po)er, the administrati1e heads of o1ernment
)hich fi@ the terms and conditions of employment. And this is effected thro"h stat"tes or administrati1e circ"lars, r"les, and re"lations, not
thro"h collecti1e barainin areements.
E.O. 3o. 1-<, )hich pro1ides "idelines for the e@ercise of the riht to oraniCe of o1ernment employees, )hile clinin to the same
philosophy, has, ho)e1er, rela@ed the r"le to allo) neotiation )here the terms and conditions of employment in1ol1ed are not amon those
fi@ed by la). Th"s% 75ECT$O3 1.. Terms and conditions of employment or impro1ements thereof, e@cept those that are fi@ed by la), may be
the s"bEect of neotiations bet)een d"ly reconiCed employees: oraniCations and appropriate o1ernment a"thorities.>
2/
The same e@ec"ti1e order has also pro1ided for the eneral mechanism for the settlement of labor disp"tes in the p"blic sector to )it%
75ECT$O3 1*. The Ci1il 5er1ice and labor la)s and proced"res, )hene1er applicable, shall be follo)ed in the resol"tion of complaints,
rie1ances and cases in1ol1in o1ernment employees. $n case any disp"te remains "nresol1ed after e@ha"stin all the a1ailable remedies
"nder e@istin la)s and proced"res, the parties may Eointly refer the disp"te to the ;"blic 5ector 4abor( Manaement Co"ncil for appropriate
action.>
#o1ernment employees may, therefore, thro"h their "nions or associations, either petition the Conress for the betterment of the terms
and conditions of employment )hich are )ithin the ambit of leislation or neotiate )ith the appropriate o1ernment aencies for the
impro1ement of those )hich are not fi@ed by la). $f there be any "nresol1ed rie1ances, the disp"te may be referred to the ;"blic 5ector
4abor ( Manaement Co"ncil for appropriate action. !"t employees in the ci1il ser1ice may not resort to stri2es, )al2(o"ts and other
temporary )or2 stoppaes, li2e )or2ers in the pri1ate sector, to press"re the #o1ernment to accede to their demands. As no) pro1ided
"nder 5ec. 4, R"le $$$ of the R"les and Re"lations to #o1ern the E@ercise of the Riht of #o1ernment( Employees to 5elf( OraniCation,
)hich too2 effect after the instant disp"te arose, 7ItJhe terms and conditions of employment in the o1ernment, incl"din any political
s"bdi1ision or instr"mentality thereof and o1ernment( o)ned and controlled corporations )ith oriinal charters are o1erned by la) and
employees therein shall not stri2e for the p"rpose of sec"rin chanes thereof.>
The 4abor Code itself pro1ides that terms and conditions of employment of o1ernment employees shall be o1erned by the Ci1il 5er1ice
4a), r"les and re"lations. More importantly, E.O. 3o. 1-< 1ests the ;"blic 5ector 4abor ( Manaement Co"ncil )ith E"risdiction o1er
"nresol1ed labor disp"tes in1ol1in o1ernment employees. Clearly, the 34RC has no E"risdiction o1er the disp"te.
This bein the case, the Reional Trial Co"rt )as not precl"ded, in the e@ercise of its eneral E"risdiction "nder !.;. !l. 12,, as
amended, from ass"min E"risdiction o1er the 555:s complaint for damaes and iss"in the inE"ncti1e )rit prayed for therein. Fnli2e the
34RC, the ;"blic 5ector 4abor ( Manaement Co"ncil has not been ranted by la) a"thority to iss"e )rits of inE"nction in labor disp"tes
)ithin its E"risdiction. Th"s, since it is the Co"ncil, and not the 34RC, that has E"risdiction o1er the instant labor disp"te, resort to the eneral
co"rts of la) for the iss"ance of a )rit of inE"nction to enEoin the stri2e is appropriate.
LUMANTA v. NLRC
G.R. No. 84819. "&1,u#,2 8, 1989
"ELICIANO, !.
"#$ts%
4"C 4"manta, Eoined by /4 other retrenched employees, filed a complaint for "npaid Ad retrenchment or separation pay aainst 9ood
Terminal, $nc. &79T$>' )ith the ?epartment of 4abor and Employment. The complaint )as later amended to incl"de chares of "nderpayment
of )aes and non(payment of emerency cost of li1in allo)ances &ECO4A'.
9T$ mo1ed to dismiss the complaint on the ro"nd of lac2 of E"risdiction. $t ar"ed that bein a o1ernment(o)ned and controlled
corporation, its employees are o1erned by the Ci1il 5er1ice 4a) not by the 4abor Code, and that claims arisin from employment fall )ithin
the E"risdiction of the Ci1il 5er1ice Commission and not the ?epartment of 4abor and Employment.
Issu&%
6O3 a labor la) claim aainst a o1ernment(o)ned and controlled corporation, s"ch as pri1ate respondent 9T$, falls )ithin the
E"risdiction of the ?epartment of 4abor and Employment
H&'(%
gov&,*0&*t7o3*&( #*( $o*t,o''&( $o,-o,#t)o*s 3)t. o,)g)*#' $.#,t&, G corporations chartered by special la) as distin"ished from
corporations oraniCed "nder o"r eneral incorporation stat"te(the Corporation Code
+"risdiction is determined as of the time of the filin of the complaint. At the time the complaint aainst pri1ate respondent 9T$ )as filed
&i.e., 2< March 1,-7', and at the time the decisions of the respondent 4abor Arbiter and 3ational 4abor Relations Commission )ere rendered
&i.e., .1 A""st 1,-7 and 1- March 1,--, respecti1ely', the 1,-7 Constit"tion had already come into effect. latter of $nstr"ction 3o. 1<1.,
dated 1, April 1,-<, incl"ded 9ood Terminal, $nc. in the cateory of 7o1ernment(o)ned or controlled corporations.>
5
5ince then, 9T$ ser1ed
as the mar2etin arm of the 3ational #rains A"thority &no) 2no)n as the 3ational 9ood A"thority'. The pleadins sho) that 9T$ )as
pre1io"sly a pri1ately o)ned enterprise, created and oraniCed "nder the eneral incorporation la), )ith the corporate name 7#reater Manila
9ood Terminal Mar2et, $nc.>
8
The record does not indicate the precise amo"nt of the capital stoc2 of 9M that is o)ned by the o1ernment0
2*
the petitioners: claim, and this has not been disp"ted, that 9Tl is not h"ndred percent &1<<N' o1ernment(o)ned and that it has some
pri1ate shareholders.
!eca"se respondent 9T$ is o1ernment(o)ned and controlled corporation )itho"t oriinal charter, it is the ?epartment of 4abor and
Employment, and not the Ci1il 5er1ice Commission, )hich has E"risdiction o1er the disp"te arisin from employment of the petitioners )ith
pri1ate respondent 9T$, and that conseH"ently, the terms and conditions of s"ch employment are o1erned by the 4abor Code and not by the
Ci1il 5er1ice R"les and Re"lations.
;"blic respondent 3ational 4abor Relations Commission acted )itho"t or in e@cess of its E"risdiction in dismissin petitioner:s complaint.
SOUTHEAST ASIAN "ISHERIES DE6ELOMENT CENTER7AGUACULTURE DEARTMENT ?SEA"DEC7AGDA v. NLRC
G.R. No. 86553 "&1,u#,2 1+, 1994
NOCON, !.
"#$ts%
5EA9?EC(AR? is a department of an international oraniCation, the 5o"theast Asian 9isheries ?e1elopment Center, oraniCed thro"h
an areement entered into in !an2o2, Thailand on ?ecember 2-, 1,*7 by the o1ernments of Malaysia, 5inapore, Thailand, Dietnam,
$ndonesia and the ;hilippines )ith +apan as the sponsorin co"ntry &Article 1, Areement Establishin the 5EA9?EC'.
On April 2<, 1,7/, pri1ate respondent +"1enal 4aCaa )as employed as a Research Associate an a probationary basis by the 5EA9?EC(
AR? and )as appointed 5enior E@ternal Affairs Officer on +an"ary /, 1,-. )ith a monthly basic salary of ;-,<<<.<< and a monthly
allo)ance of ;4,<<<.<<. Thereafter, he )as appointed to the position of ;rofessional $$$ and desinated as 8ead of E@ternal Affairs Office
)ith the same pay and benefits.
On May -, 1,-*, petitioner 4acanilao in his capacity as Chief of 5EA9?EC(AR? sent a notice of termination to pri1ate respondent
informin him that d"e to the financial constraints bein e@perienced by the department, his ser1ices shall be terminated at the close of office
ho"rs on May 1/, 1,-* and that he is entitled to separation benefits eH"i1alent to 1 month of his basic salary for e1ery year of ser1ice pl"s
other benefits.
Fpon petitioner 5EA9?EC(AR?:s fail"re to pay pri1ate respondent his separation pay, the latter filed on March 1-, 1,-7 a complaint
aainst petitioners for non(payment of separation benefits pl"s moral damaes and attorney:s fees )ith the Arbitration !ranch of the 34RC.
Issu&%
6O3 ;hilippine Co"rts ha1e E"risdiction o1er 5EA9?EC(AR?
H&'(%
;etitioner 5o"theast Asian 9isheries ?e1elopment Center(AH"ac"lt"re ?epartment &5EA9?EC(AR?' is an international aency beyond
the E"risdiction of p"blic respondent 34RC.
$t )as established by the #o1ernments of !"rma, Pindom of Cambodia, Rep"blic of $ndonesia, +apan, Pindom of 4aos, Malaysia.
Rep"blic of the ;hilippines, Rep"blic of 5inapore, Pindom of Thailand and Rep"blic of Dietnam for the promotion of research in
aH"ac"lt"re.
!ein an intero1ernmental oraniCation, 5EA9?EC incl"din its ?epartments &AR?', enEoys f"nctional independence and freedom from
control of the state in )hose territory its office is located.
;"rs"ant to its bein a sinatory to the Areement, the Rep"blic of the ;hilippines areed to be represented by one ?irector in the
o1ernin 5EA9?EC Co"ncil and that its national la)s and re"lations shall apply only insofar as its contrib"tion to 5EA9?EC of 7an
areed amo"nt of money, mo1able and immo1able property and ser1ices necessary for the establishment and operation of the Center> are
concerned. $t e@pressly )ai1ed the application of the ;hilippine la)s on the disb"rsement of f"nds of petitioner 5EA9?EC(AR?.
;hilippine Co"rts ha1e no E"risdiction o1er 5EA9?EC(AR?. One of the basic imm"nities of an international oraniCation is imm"nity from
local E"risdiction, i.e., that it is imm"ne from the leal )rits and processes iss"ed by the trib"nals of the co"ntry )here it is fo"nd.
&See +en2s, Id., pp. .7(44' The ob1io"s reason for this is that the s"bEection of s"ch an oraniCation to the a"thority of the local co"rts )o"ld
27
afford a con1enient medi"m thr" )hich the host o1ernment may interfere in there operations or e1en infl"ence or control its policies and
decisions of the oraniCation0 besides, s"ch s"bEection to local E"risdiction )o"ld impair the capacity of s"ch body to dischare its
responsibilities impartially on behalf of its member(states. $n the case at bar, for instance, the entertainment by the 3ational 4abor Relations
Commission of Mr. Madamba:s reinstatement cases )o"ld amo"nt to interference by the ;hilippine #o1ernment in the manaement
decisions of the 5EARCA o1ernin board0 e1en )orse, it co"ld compromise the desired impartiality of the oraniCation since it )ill ha1e to
s"it its act"ations to the reH"irements of ;hilippine la), )hich may not necessarily coincide )ith the interests of the other member(states. $t
is precisely to forestall these possibilities that in cases )here the e@tent of the imm"nity is specified in the enablin instr"ments of
international oraniCations, E"risdictional imm"nity from the host co"ntry is in1ariably amon the first accorded.
INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION v. CALLE!A
G.R. No. 89598. S&-t&01&, 48, 1998
:AISANAN NG MANGGAGA@A AT TAC SA IRRI7ORGANI;ED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE v.
SECRETARY O" LABOR AND EMLOYMENT
G.R. No. 89331. S&-t&01&, 48, 1998
MELENCIO7HERRERA, !.
"#$ts%
#.R. 3o. -/7/<%
As an aftermath of the Dietnam 6ar, the pliht of Dietnamese ref"ees fleein from 5o"th Dietnam:s comm"nist r"le confronted the
international comm"nity.
$n response to this crisis, on 2. 9ebr"ary 1,-1, an Areement )as fored bet)een the ;hilippine #o1ernment and the Fnited 3ations
8ih Commissioner for Ref"ees )hereby an operatin center for processin $ndo(Chinese ref"ees for e1ent"al resettlement to other
co"ntries )as to be established in !ataan.
$CMC )as one of those accredited by the ;hilippine #o1ernment to operate the ref"ee processin center in Moron, !ataan. $t )as
incorporated in 3e) Bor2, F5A, at the reH"est of the 8oly 5ee, as a non(profit aency in1ol1ed in international h"manitarian and 1ol"ntary
)or2. $t is d"ly reistered )ith the Fnited 3ations Economic and 5ocial Co"ncil &ECO5OC' and enEoys Cons"ltati1e 5tat"s, Cateory $$. As
an international oraniCation renderin 1ol"ntary and h"manitarian ser1ices in the ;hilippines, its acti1ities are parallel to those of the
$nternational Committee for Miration &$CM' and the $nternational Committee of the Red Cross &$CRC'.
On 14 +"ly 1,-*, Trade Fnions of the ;hilippines and Allied 5er1ices &TF;A5' filed )ith the then Ministry of 4abor and Employment a
;etition for Certification Election amon the ran2 and file members employed by $CMC The latter opposed the petition on the ro"nd that it is
an international oraniCation reistered )ith the Fnited 3ations and, hence, enEoys diplomatic imm"nity.
On appeal by TF;A5, ?irector ;"ra CalleEa of the !"rea" of 4abor Relations &!4R', re1ersed the Med(Arbiter:s ?ecision and ordered the
immediate cond"ct of a certification election. At that time, $CMC:s reH"est for reconition as a specialiCed aency )as still pendin )ith the
?epartment of 9orein Affairs &?E9ORA9'.
5"bseH"ently, ho)e1er, the ;hilippine #o1ernment, thro"h the ?E9ORA9, ranted $CMC the stat"s of a specialiCed aency )ith
correspondin diplomatic pri1ilees and imm"nities, as e1idenced by a Memorand"m of Areement bet)een the #o1ernment and $CMC.
$CMC then so"ht the immediate dismissal of the TF;A5 ;etition for Certification Election in1o2in the imm"nity e@pressly ranted b"t the
same )as denied by respondent !4R ?irector )ho, aain, ordered the immediate cond"ct of a pre(election conference. $CMC:s t)o Motions
for Reconsideration )ere denied despite an opinion rendered by ?E9ORA9 that said !4R Order 1iolated $CMC:s diplomatic imm"nity.
#.R. 3o. -,..1%
On , ?ecember 1,/,, the ;hilippine #o1ernment and the 9ord and Roc2efeller 9o"ndations sined a Memorand"m of Fnderstandin
establishin the $nternational Rice Research $nstit"te &$RR$' at 4os !aTos, 4a"na. $t )as intended to be an a"tonomo"s, philanthropic, ta@(
free, non(profit, non(stoc2 oraniCation desined to carry o"t the principal obEecti1e of cond"ctin 7basic research on the rice plant, on all
phases of rice prod"ction, manaement, distrib"tion and "tiliCation )ith a 1ie) to attainin n"triti1e and economic ad1antae or benefit for
the people of Asia and other maEor rice(ro)in areas thro"h impro1ement in H"ality and H"antity of rice.>
2-
$nitially, $RR$ )as oraniCed and reistered )ith the 5ec"rities and E@chane Commission as a pri1ate corporation s"bEect to all la)s and
re"lations. 8o)e1er, by 1irt"e of ;res. ?ecree 3o. 1*2<, prom"lated on 1, April 1,7,, $RR$ )as ranted the stat"s, preroati1es,
pri1ilees and imm"nities of an international oraniCation.
The OraniCed 4abor Association in 4ine $nd"stries and Aric"lt"re &O4A4$A', is a leitimate labor oraniCation )ith an e@istin local
"nion, the Papisanan n Manaa)a at TAC sa $RR$ &Papisanan, for short' in respondent $RR$.
On 2< April 1,-7, the Papisanan filed a ;etition for ?irect Certification Election )ith Reion $D, Reional Office of the ?epartment of 4abor
and Employment &?O4E'.
$RR$ opposed the petition in1o2in ;res. ?ecree 3o. 1*2< conferrin "pon it the stat"s of an international oraniCation and rantin it
imm"nity from all ci1il, criminal and administrati1e proceedins "nder ;hilippine la)s.
Issu&s%
6O3 the rant of diplomatic pri1ilees and imm"nities to $CMC e@tends to imm"nity from the application of ;hilippine labor la)s
6O3 the 5ecretary of 4abor committed ra1e ab"se of discretion in dismissin the ;etition for Certification Election filed by Papisanan
H&'(%
?iplomatic imm"nity has, in fact, been ranted $CMC and $RR$. Article $$ of the Memorand"m of Areement bet)een the ;hilippine
#o1ernment and $CMC pro1ides that $CMC shall ha1e a stat"s 7similar to that of a specialiCed aency.> Article $$$, 5ections 4 and / of the
Con1ention on the ;ri1ilees and $mm"nities of 5pecialiCed Aencies, adopted by the F3 #eneral Assembly on 21 3o1ember 1,47 and
conc"rred in by the ;hilippine 5enate thro"h Resol"tion 3o. 1, on 17 May 1,4,, e@plicitly pro1ides%
7Art. $$$, 5ection 4. The specialiCed aencies, their property and assets, )here1er located and by )homsoe1er held, shall en-oy imm!nity
from every form of legal process e@cept insofar as in any partic"lar case they ha1e e@pressly )ai1ed their imm"nity. $t is, ho)e1er,
"nderstood that no )ai1er of imm"nity shall e@tend to any meas"re of e@ec"tion.
5ec. /. K The premises of the specialiCed aencies shall be in1iolable. The property and assets of the specialiCed aencies, )here1er
located and by )homsoe1er held shall be imm"ne from search, reH"isition, confiscation, e@propriation and any other form of interference,
)hether by e@ec"ti1e, administrati1e, E"dicial or leislati1e action.>
$RR$ is similarly sit"ated, ;res. ?ecree 3o. 1*2<, Article ., is e@plicit in its rant of imm"nity, th"s% 7Art. .. Imm!nity from Legal +rocess. K
The $nstit"te shall enEoy imm"nity from any penal, ci1il and administrati1e proceedins, e@cept insofar as that imm"nity has been e@pressly
)ai1ed by the ?irector(#eneral of the $nstit"te or his a"thoriCed representati1es.>
?iplomatic imm"nity is essentially a political H"estion and co"rts sho"ld ref"se to loo2 beyond a determination by the e@ec"ti1e branch of
the o1ernment, and )here the plea of diplomatic imm"nity is reconiCed and affirmed by the e@ec"ti1e branch of the o1ernment as in the
case at bar, it is then the d"ty of the co"rts to accept the claim of imm"nity "pon appropriate s"estion by the principal la) officer of the
o1ernment or other officer actin "nder his direction. 8ence, in adherence to the settled principle that co"rts may not so e@ercise their
E"risdiction as to embarrass the e@ec"ti1e arm of the o1ernment in cond"ctin forein relations, it is accepted doctrine that in s"ch cases
the E"dicial department of o1ernment follo)s the action of the political branch and )ill not embarrass the latter by ass"min an antaonistic
E"risdiction.
)*t&,*#t)o*#' o,g#*)E#t)o* G oraniCation set "p by areement bet)een t)o or more states0 endo)ed )ith some deree of international
leal personality s"ch that they are capable of e@ercisin specific rihts, d"ties and po)ers0 oraniCed mainly as a means for cond"ctin
eneral international b"siness in )hich the member states ha1e an interest
s-&$)#')E&( #g&*$)&s G international oraniCations ha1in f"nctions in partic"lar fields &see Arts. /7 and *. of the F3 Charter'
There are basically three propositions "nderlyin the rant of international imm"nities to international oraniCations. These principles,
contained in the $4O Memorand"m are stated th"s% 1' international instit"tions sho"ld ha1e a stat"s )hich protects them aainst control or
interference by any one o1ernment in the performance of f"nctions for the effecti1e dischare of )hich they are responsible to
democratically constit"ted international bodies in )hich all the nations concerned are represented0 2' no co"ntry sho"ld deri1e any national
financial ad1antae by le1yin fiscal chares on common international f"nds0 and .' the international oraniCation sho"ld, as a collecti1ity of
5tates members, be accorded the facilities for the cond"ct of its official b"siness c"stomarily e@tended to each other by its indi1id"al member
2,
5tates. The theory behind all three propositions is said to be essentially instit"tional in character. 7$t is not concerned )ith the stat"s, dinity
or pri1ilees of indi1id"als, b"t )ith the elements of f"nctional independence necessary to free international instit"tions from national control
and to enable them to dischare their responsibilities impartially on behalf of all their members. The raison detre for these imm"nities is the
ass"rance of "nimpeded performance of their f"nctions by the aencies concerned.
The rant of imm"nity from local E"risdiction to $CMC and $RR$ is clearly necessitated by their international character and respecti1e
p"rposes. The obEecti1e is to a1oid the daner of partiality and interference by the host co"ntry in their internal )or2ins. The e@ercise of
E"risdiction by the ?epartment of 4abor in these instances )o"ld defeat the 1ery p"rpose of imm"nity, )hich is to shield the affairs of
international oraniCations, in accordance )ith international practice, from political press"re or control by the host co"ntry to the preE"dice of
member 5tates of the oraniCation, and to ens"re the "nhampered performance of their f"nctions.
$CMC:s and $RR$:s imm"nity from local E"risdiction by no means depri1es labor of its basic rihts, )hich are "aranteed by Article $$,
5ection 1-, Article $$$, 5ection -, and Article Q$$$, 5ection ., of the 1,-7 Constit"tion0 and implemented by Articles 24. and 24* of the 4abor
Code, relied on by the !4R ?irector and by Papisanan.
9or, $CMC employees are not )itho"t reco"rse )hene1er there are disp"tes to be settled. 5ection .1 of the Con1ention on the ;ri1ilees
and $mm"nities of the 5pecialiCed Aencies of the Fnited 3ations
15
pro1ides that 7each specialiCed aency shall ma2e pro1ision for
appropriate modes of settlement of% &a' disp"tes arisin o"t of contracts or other disp"tes of pri1ate character to )hich the specialiCed
aency is a party.> Moreo1er, p"rs"ant to Article $D of the Memorand"m of Areement bet)een $CMC the ;hilippine #o1ernment, )hene1er
there is any ab"se of pri1ilee by $CMC, the #o1ernment is free to )ithdra) the pri1ilees and imm"nities accorded. Th"s%
7Art. $D. #ooperation with 4overnment /!thorities. K 1. The Commission shall cooperate at all times )ith the appropriate a"thorities of the
#o1ernment to ens"re the obser1ance of ;hilippine la)s, r"les and re"lations, facilitate the proper administration of E"stice and pre1ent the
occ"rrences of any ab"se of the pri1ilees and imm"nities ranted its officials and alien employees in Article $$$ of this Areement to the
Commission.
2. $n the e1ent that the #o1ernment determines that there has been an ab"se of the pri1ilees and imm"nities ranted "nder this
Areement, cons"ltations shall be held bet)een the #o1ernment and the Commission to determine )hether any s"ch ab"se has occ"rred
and, if so, the #o1ernment shall )ithdra) the pri1ilees and imm"nities ranted the Commission and its officials.>
3either are the employees of $RR$ )itho"t remedy in case of disp"te )ith manaement as, in fact, there had been oraniCed a for"m for
better manaement(employee relationship as e1idenced by the formation of the Co"ncil of $RR$ Employees and Manaement &C$EM'
)herein 7both manaement and employees )ere and still are represented for p"rposes of maintainin m"t"al and beneficial cooperation
bet)een $RR$ and its employees.> The e@istence of this Fnion fact"ally and tellinly belies the ar"ment that ;res. ?ecree 3o. 1*2<, )hich
rants to $RR$ the stat"s, pri1ilees and imm"nities of an international oraniCation, depri1es its employees of the riht to self(oraniCation.
GENERAL MILLING COR. v. TORRES
G.R. No. 93666. A-,)' 44, 1991
"ELICIANO, !.
"#$ts%
The 3ational Capital Reion of the ?epartment of 4abor and Employment iss"ed an Alien Employment ;ermit in fa1or of petitioner Earl
Timothy Cone, a Fnited 5tates citiCen, as sports cons"ltant and assistant coach for petitioner #eneral Millin Corporation &#MC'.
;etitioners #MC and Cone entered into a contract of employment )hereby the latter "ndertoo2 to coach #MC:s bas2etball team.
The !oard of 5pecial $nH"iry of the Commission on $mmiration and ?eportation appro1ed petitioner Cone:s application for a chane of
admission stat"s from temporary 1isitor to pre(arraned employee.
;etitioner #MC reH"ested rene)al of petitioner Cone:s alien employment permit. #MC also reH"ested that it be allo)ed to employ Cone as
f"ll(fleded coach.
!as2etball Coaches Association of the ;hilippines &!CA;>' appealed the iss"ance of said alien employment permit to the respondent
5ecretary of 4abor )ho iss"ed a decision orderin cancellation of petitioner Cone:s employment permit on the ro"nd that there )as no
sho)in that there is no person in the ;hilippines )ho is competent, able and )illin to perform the ser1ices reH"ired nor that the hirin of
petitioner Cone )o"ld redo"nd to the national interest.
.<
Issu&s%
6O3 respondent 5ecretary of 4abor ra1ely ab"sed his discretion )hen he re1o2ed petitioner Cone:s alien employment permit0
6O3 5ection * &c', R"le Q$D, !oo2 $ of the Omnib"s R"les $mplementin the 4abor Code is n"ll and 1oid as it is in 1iolation of the
enablin la) as the 4abor Code does not empo)er respondent 5ecretary to determine if the employment of an alien )o"ld redo"nd to
national interest
H&'(%
;etitioners: contention that respondent 5ecretary of 4abor sho"ld ha1e deferred to the findins of Commission on $mmiration and
?eportation as to the necessity of employin petitioner Cone, is bereft of leal basis. The 4abor Code itself specifically empo)ers
respondent 5ecretary to ma2e a determination as to the a1ailability of the ser1ices of a person in the ;hilippines )ho is competent, able and
)illin at the time of application to perform the ser1ices for )hich an alien is desired. $n short, the ?epartment of 4abor is the aency 1ested
)ith E"risdiction to determine the H"estion of a1ailability of local )or2ers. The constit"tional 1alidity of leal pro1isions rantin s"ch
E"risdiction and a"thority and reH"irin proof of non(a1ailability of local nationals able to carry o"t the d"ties of the position in1ol1ed, cannot
be serio"sly H"estioned.
Article 4< of the 4abor Code reads as follo)s%
7Art. 4<. Employment per !nit of non"resident aliens. GG Any alien see2in admission to the ;hilippines for employment p"rposes and any
domestic or forein employer )ho desires to enae an alien for employment in the ;hilippines shall obtain an employment permit from the
?epartment of 4abor.
)he employment permit may be iss!ed to a non"resident alien or to the applicant employer after a determination of the non(a1ailability of a
person in the ;hilippines )ho is competent, able and )illin at the time of application to perform the ser1ices for )hich the alien is desired.
9or an enterprise reistered in preferred areas of in1estments, said employment permit may be iss"ed "pon recommendation of the
o1ernment aency chared )ith the s"per1ision of said reistered enterprise.> &Emphasis s"pplied'
EOLE v. GOCE
G.R. No. 113161. August 49, 1999
REGALADO, !.
"#$ts%
An information for illeal recr"itment committed by a syndicate and in lare scale, p"nishable "nder Articles .- and ., of the 4abor Code
&;residential ?ecree 3o. 442' as amended by 5ection 1&b' of ;residential ?ecree 3o. 2<1-, )as filed aainst spo"ses ?an and 4oma #oce
and 3elly A"stin allein that the said acc"sed, conspirin and confederatin toether and helpin one another, representin themsel1es to
ha1e the capacity to contract, enlist and transport 9ilipino )or2ers for employment abroad, did then and there )illf"lly and "nla)f"lly, for a
fee, recr"it and promise employment=Eob placement abroad, to &1' Rolando ?alida, &2' Ernesto Al1areC, &.' Roelio 5alado, &4' Ramona
5alado, &/' ?ionisio Masaya, &*' ?a1e Ri1era, &7' 4orenCo Al1areC, and &-' 3elson Trinidad, )itho"t first ha1in sec"red the reH"ired license
or a"thority from the ?epartment of 4abor.
9o"r of the complainants testified for the prosec"tion. Roelio 5alado )as the first to ta2e the )itness stand and he declared that
sometime in March or April, 1,-7, he )as introd"ced by 4orenCo Al1areC, his brother(in(la) and a co(applicant, to 3elly A"stin in the latter:s
residence at 9actor, ?onalo, ;araTaH"e, Metro Manila. Representin herself as the manaer of the Clo1er ;lacement Aency, A"stin
sho)ed him a Eob order as proof that he co"ld readily be deployed for o1erseas employment. 5alado learned that he had to pay ;/,<<<.<<
as processin fee, )hich amo"nt he a1e sometime in April or May of the same year. 8e )as iss"ed the correspondin receipt.
9
Also in April or May, 1,-7, 5alado, accompanied by fi1e other applicants )ho )ere his relati1es, )ent to the office of the placement
aency at 3a2pil 5treet, Ermita, Manila )here he sa) A"stin and met the spo"ses ?an and 4oma #oce, o)ners of the aency. 8e
s"bmitted his bio(data and learned from 4oma #oce that he had to i1e ;12,<<<.<<, instead of the oriinal amo"nt of ;/,<<<.<< for the
placement fee. Altho"h s"rprised at the ne) and hiher s"m, they s"bseH"ently areed as lon as there )as an ass"rance that they co"ld
lea1e for abroad.
.1
Thereafter, a receipt )as iss"ed in the name of the Clo1er ;lacement Aency sho)in that 5alado and his aforesaid co(applicants each
paid ;2,<<<.<<, instead of the ;/,<<<.<< )hich each of them act"ally paid. 5e1eral months passed b"t 5alado failed to lea1e for the
promised o1erseas employment. 8ence, in October, 1,-7, alon )ith the other recr"its, he decided to o to the ;hilippine O1erseas
Employment Administration &;OEA' to 1erify the real stat"s of Clo1er ;lacement Aency. They disco1ered that said aency )as not d"ly
licensed to recr"it Eob applicants. 4ater, "pon learnin that A"stin had been arrested, 5alado decided to see her and to demand the ret"rn of
the money he had paid, b"t A"stin co"ld only i1e him ;/<<.<<.
Ramona 5alado, the )ife of Roelio 5alado, came to 2no) thro"h her brother, 4orenCo Al1areC, abo"t 3elly A"stin. Accompanied by
her h"sband, Roelio, Ramona )ent to see A"stin at the latter:s residence. A"stin pers"aded her to apply as a c"tter=se)er in Oman so
that she co"ld Eoin her h"sband. Enco"raed by A"stin:s promise that she and her h"sband co"ld li1e toether )hile )or2in in Oman, she
instr"cted her h"sband to i1e A"stin ;2,<<<.<< for each of them as placement fee, or the total s"m of ;4,<<<.<<.
M"ch later, the 5alado co"ple recei1ed a teleram from the placement aency reH"irin them to report to its office beca"se the 73OC>
&1isa' had alleedly arri1ed. Aain, aro"nd 9ebr"ary, or March, 1,-7, Roelio a1e ;2,<<<.<< as payment for his and his )ife:s passports.
?espite follo)("p of their papers t)ice a )ee2 from 9ebr"ary to +"ne, 1,-7, he and his )ife failed to lea1e for abroad.
Complainant ?ionisio Masaya, accompanied by his brother(in(la), AH"iles Ortea, applied for a Eob in Oman )ith the Clo1er ;lacement
Aency at ;araTaH"e, the aency:s former office address. There, Masaya met 3elly A"stin, )ho introd"ced herself as the manaer of the
aency, and the #oce spo"ses, ?an and 4oma, as )ell as the latter:s da"hter. 8e s"bmitted se1eral pertinent doc"ments, s"ch as his bio(
data and school credentials.
$n May, 1,-*, Masaya a1e ?an #oce ;1,,<<.<< as an initial do)npayment for the placement fee, and in 5eptember of that same year,
he a1e an additional ;1<,<<<.<<. 8e )as iss"ed receipts for said amo"nts and )as ad1ised to o to the placement office once in a )hile to
follo) "p his application, )hich he faithf"lly did. M"ch to his dismay and charin, he failed to lea1e for abroad as promised. Accordinly, he
)as forced to demand that his money be ref"nded b"t 4oma #oce co"ld i1e him bac2 only ;4,<<<.<< in installments.
As the prosec"tion:s fo"rth and last )itness, Ernesto Al1areC too2 the )itness stand on +"ne 7, 1,,.. 8e testified that in 9ebr"ary, 1,-7,
he met appellant A"stin thro"h his co"sin, 4arry Al1areC, at her residence in ;araTaH"e. 5he informed him that 7 madalas siyang
nagpapala$ad sa man> and offered him a Eob as an amb"lance dri1er at the Royal 8ospital in Oman )ith a monthly salary of abo"t M*<<.<<
to M7<<.<<.
On March 1<, 1,-7, Al1areC a1e an initial amo"nt of ;.,<<<.<< as processin fee to A"stin at the latter:s residence. $n the same month,
he a1e another ;.,<<<.<<, this time in the office of the placement aency. A"stin ass"red him that he co"ld lea1e for abroad before the
end of 1,-7. 8e ret"rned se1eral times to the placement aency:s office to follo) "p his application b"t to no a1ail. 9r"strated, he demanded
the ret"rn of the money he had paid, b"t A"stin co"ld only i1e bac2 ;/<<.<<. Thereafter, he loo2ed for A"stin abo"t eiht times, b"t he
co"ld no loner find her.
The trial co"rt rendered E"dment findin herein appellant 3elly A"stin "ilty as a principal in the crime of illeal recr"itment in lare
scale, and sentencin her to ser1e the penalty of life imprisonment, as )ell as to pay a fine of ;1<<,<<<.<<.
Issu&%
6O3 appellant is "ilty of illeal recr"itment
H&'(%
The testimonial e1idence sho) that she indeed f"rther committed acts constit"ti1e of illeal recr"itment. All fo"r prosec"tion )itnesses
testified that it )as A"stin )hom they initially approached reardin their plans of )or2in o1erseas. $t )as from her that they learned abo"t
the fees they had to pay, as )ell as the papers that they had to s"bmit. $t )as after they had tal2ed to her that they met the acc"sed spo"ses
)ho o)ned the placement aency.
!ein an employee of the #oces, it )as therefore loical for appellant to introd"ce the applicants to said spo"ses, they bein the o)ners
of the aency. As s"ch, appellant )as act"ally ma2in referrals to the aency of )hich she )as a part. 5he )as therefore enain in
recr"itment acti1ity.
?espite A"stin:s pretensions that she )as b"t a neihbor of the #oce co"ple, the testimonies of the prosec"tion )itnesses paint a
different pict"re. Roelio 5alado and ?ionisio Masaya testified that appellant represented herself as the manaer of the Clo1er ;lacement
Aency. Ramona 5alado )as offered a Eob as a c"tter=se)er by A"stin the first time they met, )hile Ernesto Al1areC remembered that )hen
.2
he first met A"stin, the latter represented herself as 7nagpapaalis pap!nta sa man.> $ndeed, A"stin played a pi1otal role in the operations
of the recr"itment aency, )or2in toether )ith the #oce co"ple.
There is )''&g#' ,&$,u)t0&*t )hen one i1es the impression of ha1in the ability to send a )or2er abroad. Appellant a1e complainants
the distinct impression that she had the po)er or ability to send people abroad for )or2 s"ch that the latter )ere con1inced to i1e her the
money she demanded in order to be so employed.
A"stin recei1ed from complainants 1ario"s s"ms for p"rpose of their applications. 8er act of collectin from each of the complainants
payment for their respecti1e passports, trainin fees, placement fees, medical tests and other s"ndry e@penses "nH"estionably constit"tes
an act of recr"itment )ithin the meanin of the la). $n fact, appellant demanded and recei1ed from complainants amo"nts beyond the
allo)able limit of ;/,<<<.<< "nder o1ernment re"lations. $t is tr"e that the mere act of a cashier in recei1in money far e@ceedin the
amo"nt allo)ed by la) )as not considered per se as 7recr"itment and placement> in contemplation of la), b"t that )as beca"se the recipient
had no other participation in the transactions and did not conspire )ith her co(acc"sed in defra"din the 1ictims. That is not the case here.
TRANS ACTION O6ERSEAS COR. v. SEC. O" LABOR
G.R. No. 189983. S&-t&01&, 9, 1995
ROMERO, !.
"#$ts%
9rom +"ly 24 to 5eptember ,, 1,-7, petitioner Trans Action O1erseas Corporation, a pri1ate fee(charin employment aency, sco"red
$loilo City for possible recr"its for alleed Eob 1acancies in 8on2on. ;ri1ate respondents so"ht employment as domestic helpers thro"h
petitioner:s employees, 4"C1iminda Araon, !en 8"r ?omincil and his )ife Cecille. The applicants paid placement fees ranin from
;1,<<<.<< to ;14,<<<.<<, b"t petitioner failed to deploy them. Their demands for ref"nd pro1ed "na1ailin0 th"s, they )ere constrained to
instit"te complaints aainst petitioner for 1iolation of Articles .2 and .4&a' of the 4abor Code, as amended
;OEA Reional E@tension Fnit Coordinator Edar 5omes testified that altho"h he )as a)are that petitioner collected fees from
respondents, the latter insisted that they be allo)ed to ma2e the payments on the ass"mption that it co"ld hasten their deployment abroad.
8e added that Mrs. 8onorata Manliclic, a representati1e of petitioner tas2ed to o1ersee the cond"ct of the inter1ie)s, told him that she )as
lea1in behind presined receipts to Araon as she cannot stay in $loilo City for the screenin of the applicants. Manliclic, ho)e1er, denied
this 1ersion and ar"ed that it )as 5omes )ho instr"cted her to lea1e the receipts behind as it )as perfectly alriht to collect fees.
Then 4abor Fndersecretary 3ie1es R. Confesor rendered the assailed order, the dispositi1e portion of )hich reads% 7Respondent aency
is liable for t)enty eiht &2-' co"nts of 1iolation of Article .2 and fi1e &/' co"nts of Article .4 &a' )ith a correspondin s"spension in the
areate period of si@ty si@ &**' months. Considerin ho)e1er, that "nder the sched"le of penalties, any s"spension amo"ntin to a period
of 12 months merits the imposition of the penalty of cancellation, the license of respondent TRA35 ACT$O3 ODER5EA5 COR;ORAT$O3 to
participate in the o1erseas placement and recr"itment of )or2ers is hereby ordered CA3CE44E?, effecti1e immediately.>
;etitioner filed its Motion for Temporary 4iftin of Order of Cancellation allein, amon other thins, that to deny it the a"thority to enae
in placement and recr"itment acti1ities )o"ld EeopardiCe not only its contract"al relations )ith its forein principals, b"t also the )elfare,
interests, and li1elihood of recr"ited )or2ers sched"led to lea1e for their respecti1e assinments. 9inally, it manifested its )illinness to post
a bond to ins"re payment of the claims to be a)arded, sho"ld its appeal or motion be denied.
9indin the motion to be )ell ta2en, Fndersecretary Confesor pro1isionally lifted the cancellation of petitioner:s license pendin resol"tion
of its Motion for Reconsideration. 8o)e1er, petitioner:s motion for reconsideration )as e1ent"ally denied for lac2 of merit0 th"s, order
re1o2in its license )as reinstated.
Issu&%
6O3 the 5ecretary of 4abor and Employment has E"risdiction to cancel or re1o2e the license of a pri1ate fee(charin employment
aency
H&'(%
Fnder E@ec"ti1e Order 3o. 7,7

&E.O. 3o. 7,7' and E@ec"ti1e Order 3o. 247 &E.O. 3o. 247',

the ;OEA )as established and mandated to
ass"me the f"nctions of the O1erseas Employment ?e1elopment !oard &OE?!', the 3ational 5eamen !oard &35!', and the o1erseas
..
employment f"nction of the !"rea" of Employment 5er1ices &!E5'. ;etitioner theoriCes that )hen ;OEA absorbed the po)ers of these
aencies, Article ./ of the 4abor Code, as amended, )as rendered ineffecti1e.
The po)er to s"spend or cancel any license or a"thority to recr"it employees for o1erseas employment is 1ested "pon the 5ecretary of
4abor and Employment. Article ./ of the 4abor Code, as amended, )hich pro1ides%
7Art. /. 5"spension and=or Cancellation of 4icense or A"thority K The Minister of 4abor shall ha1e the po)er to s"spend or cancel any
license or a"thority to recr"it employees for o1erseas employment for 1iolation of r"les and re"lations iss"ed by the Ministry of 4abor, the
O1erseas Employment ?e1elopment !oard, and the 3ational 5eamen !oard, or for 1iolation of the pro1isions of this and other applicable
la)s, #eneral Orders and 4etters of $nstr"ctions.>
The po)er to s"spend or cancel any license or a"thority to recr"it employees for o1erseas employment is conc"rrently 1ested )ith the
;OEA and the 5ecretary of 4abor.
As reards petitioner:s alternati1e ar"ment that the non(filin of the 1,-7 ;OEA 5ched"le of ;enalties )ith the F; 4a) Center rendered
it ineffecti1e and, hence, cannot be "tiliCed as basis for penaliCin them, it m"st ne noted that the ;OEA Re1ised R"les on the 5ched"le of
;enalties )as iss"ed p"rs"ant to Article .4 of the 4abor Code, as amended. The same merely amplified and partic"lariCed the 1ario"s
1iolations of the r"les and re"lations of the ;OEA and clarified and specified the penalties therefor. $ndeed, the H"estioned sched"le of
penalties contains only a listin of offenses. $t does not prescribe additional r"les and re"lations o1ernin o1erseas employment b"t only
detailed the administrati1e sanctions imposable by this Office for some en"merated prohibited acts. Th"s, it need not be filed )ith F; 4a)
Center.
HILIINE7SINGAORE ORTS COR. ?SCA v. NLRC
G.R. No. 65839. !#*u#,2 49, 1993
BIDIN, !.
"#$ts%
On 5eptember /, 1,77, ;5;C and +ardin entered into a contract of employment )herein the latter )as employed by the former as a
)inchman=sinalman at the Commercial $slamic ;ort of +eddah in 5a"di Arabia for a t)o(year period commencin in +an"ary, 1,7-. On or
abo"t October 1-, 1,7-, the ;5;C Medical ?irector recommended that +ardin be i1en priority in the sched"le for rest and recreation &R and
R' lea1e as he )as dianosed to be in need of a fist"lectomy d"e to 7fist"la in an".>
+ardin )as sent bac2 to the ;hilippines at ;5;C:s e@pense for medical treatment. At the #5$5 8ospital, R"eCon City )here he )as
treated and confined, his ailment )as dianosed as 7pr"ritis ani d"e to ancylostomiasis.> On 3o1ember 4, 1,7-, +ardin )as certified as fit to
)or2 by his attendin physician at the said hospital. 6hen he reported to the ;5;C on the same day, ho)e1er, he )as ad1ised to file his
resination papers.
Th"s, +ardin filed )ith the then Ministry of 4abor, Reion $D, Manila, a complaint for illeal dismissal and reco1ery of bac2)aes. The
;5;C prayed for the dismissal of the complaint principally on the ro"nd that "nder Art. 1/ of the 4abor Code &;.?. 3o. 442', the !"rea" of
Employment 5er1ices and not the 4abor Arbiter had E"risdiction o1er the case beca"se it in1ol1ed the o1erseas employment of a 9ilipino
)or2er.
Issu&%
6O3 the decision rendered by the 34RC sho"ld be dismissed for )ant of E"risdiction
8eld%
6hen +ardin filed the complaint for illeal dismissal on +an"ary .1, 1,7,, Art. 217 &/' of the 4abor Code pro1ided that 4abor Arbiters and he
34RC shall ha1e 7e@cl"si1e E"risdiction to hear and decide> all cases arisin from employer(employee relations 7"nless e@pressly e@cl"ded
by this Code.> At that time, Art. 1/ of the same Code had been amended by ;.?. 3o. 1412 )hich too2 effect on +"ne ,, 1,7-. The pertinent
pro1ision of the said presidential decree states%
7Art. 1/. !"rea" of Employment 5er1ices. K
&a' . . . . . .
.4
&b' The !"rea" shall ha1e the oriinal and e@cl"si1e E"risdiction o1er all matters or cases in1ol1in employer(employee relations incl"din
money claims, arisin o"t of or by 1irt"e of any la) or contracts in1ol1in 9ilipino )or2ers for o1erseas employment, e@cept seamen. The
decisions of the !"rea" shall be final and e@ec"tory s"bEect to appeal to the 5ecretary of 4abor )hose decisions shall be final and
inappealable.>
Considerin that pri1ate respondent +ardin:s claims "ndeniably arose o"t of an employer(employee relationship )ith petitioner ;5;C and
that pri1ate respondent )or2ed o1erseas or in 5a"di Arabia, the !"rea" of Employment 5er1ices and not the 4abor Arbiter had E"risdiction
o1er the case. Ov&,s&#s &0-'o20&*t is defined by Art. 1.&h' of the 4abor Code as employment of a )or2er o"tside the ;hilippines. 5ince
the definition does not ma2e a distinction reardin the nationality of the employer, 9ilipino employers )ho deploy their employees abroad
sho"ld be deemed co1ered by the definition.
Art. 1/ )as f"rther amended by ;.?. 3o. 1*,1 )hich too2 effect on May 1, 1,,<. 5"ch amendment H"alified the E"risdiction of the !"rea" of
Employment 5er1ices as follo)s%
7&b' The reional offices of the Ministry of 4abor shall ha1e the oriinal and e@cl"si1e E"risdiction o1er all matters or cases in1ol1in
employer(employee relations incl"din money claims, arisin o"t of or by 1irt"e of any la) or contracts in1ol1in 9ilipino )or2ers for
o1erseas employment e@cept seamen0 +rovided, That the !"rea" of Employment 5er1ices may, in the case of the 3ational Capital Reion,
e@ercise s"ch po)er, )hene1er the Minister of 4abor deems it appropriate. The decisions of the reional offices or the !"rea" of
Employment 5er1ices if so a"thoriCed by the Minister of 4abor as pro1ided in this Article, shall be appealable to the 3ational 4abor Relations
Commission "pon the same ro"nds pro1ided in Article 22. hereof. The decisions of the 3ational 4abor Relations Commission shall be final
and inappealable.>
8ence, as f"rther amended, Art. 1/ pro1ided for conc"rrent E"risdiction bet)een the reional offices of the then Ministry of 4abor and the
!"rea" of Employment 5er1ices 7in the case of the 3ational Capital Reion.>
The f"nctions of the !"rea" of Employment 5er1ices )ere s"bseH"ently ass"med by the ;hilippine O1erseas Employment Administration
&;OEA' on May 1, 1,-2 by 1irt"e of E@ec"ti1e Order 3o. 7,7 by rantin the ;OEA oriinal and e@cl"si1e E"risdiction o1er all cases,
incl"din money claims, in1ol1in employer(employee relations arisin o"t of or by 1irt"e of any la) or contract in1ol1in 9ilipino )or2ers for
o1erseas employment, incl"din seamen. This de1elopment sho)ed the leislati1e a"thority:s contin"in intent to e(cl!de from the 4abor
Arbiter:s E"risdiction claims arisin from o1erseas employment.
These amendments not)ithstandin, )hen the complaint for illeal dismissal )as filed on +an"ary .1, 1,7,, "nder Art. 1/, as amended by
;.?. 3o. 1412, it )as the !"rea" of Employment 5er1ices )hich had E"risdiction o1er the case and not the 4abor Arbiters. ;.?. 3o. 1*,1
)hich a1e the reional offices of the Ministry of 4abor conc"rrent E"risdiction )ith the !"rea" of Employment 5er1ices, )as prom"lated
more than a year after the complaint )as filed.
At the time the 4abor Arbiter too2 coniCance of the complaint for illeal dismissal, he )as de1oid of E"risdiction. ConseH"ently, the decision
prom"lated by him is n"ll and 1oid ha1in been rendered )itho"t E"risdiction and may be str"c2 do)n any time K e1en on appeal to the
5"preme Co"rt.
CHA6E; v. BONTO7ERE;
G.R. No. 189888. M#,$. 1, 1999
UNO, !.
"#$ts%
;etitioner, an entertainment dancer, entered into a standard employment contract for o1erseas 9ilipino artists and entertainers )ith ;lannin
+apan Co., 4td.,

thro"h its ;hilippine representati1e, pri1ate respondent Centr"m ;lacement O ;romotions Corporation. The contract had a
d"ration of 2 to * months, and petitioner )as to be paid a monthly compensation of One Tho"sand 9i1e 8"ndred ?ollars &F5M1,/<<<.<<'.
On ?ecember /, 1---, the ;OEA appro1ed the contract. 5"bseH"ently, petitioner e@ec"ted the follo)in side areement )ith her +apanese
employer thro"h her local manaer, +aC Talents ;romotion.
On ?ecember 1*, 1,--, petitioner left for Osa2a, +apan, )here she )or2ed for * months, "ntil +"ne 1<, 1,-,. 5he came bac2 to the
;hilippines on +"ne 14, 1,-,.
./
;etitioner instit"ted the case at bench for "nderpayment of )aes )ith the ;OEA on 9ebr"ary 21, 1,,1. 5he prayed for the payment of 5i@
Tho"sand F.5. ?ollars &F5M*,<<<.<<', representin the "npaid portion of her basic salary for si@ months. Chared in the case )ere pri1ate
respondent Centr"m ;romotions and ;lacement Corporation, the ;hilippine representati1e of ;lannin +apan, Co., $nc., its ins"rer, Times
5"rety and $ns"rance Co., $nc., and +aC Talents ;romotion.
The complaint )as dismissed by p"blic respondent ;OEA Administrator on the ro"nd of laches. 8e ratiocinated th"s% 7complainant
&referrin to petitioner herein' )as satisfied and did not ha1e any complaint &abo"t' anythin reardin her employment in +apan "ntil after
almost t)o &2' years &)hen' she filed the instant complaint on 9ebr"ary 21, 1,,1. The records sho) that after sinin the 5tandard
Employment Contract on ?ecember 1, 1,--, she entered into a side areement )ith the +apanese employer thr" her local manaer, +aC
Talents ;romotion consentin to a monthly salary of F5M7/<.<< )hich she affirmed d"rin the conference of May 21, 1,,1. Respondent
aency had no 2no)lede nor participation in the said areement s"ch that it co"ld not be fa"lted for 1iolation of the 5tandard Employment
Contract reardin the stip"lated salary. 6e cannot ta2e coniCance of s"ch 1iolation )hen one of the principal parties thereto opted to
recei1e a salary different from )hat has been stip"lated in their contract, especially so if the contractin party did not consent=participate in
s"ch arranement. Complainant &petitioner' cannot no) demand from respondent aency to pay her the salary based &on' the processed
Employment Contract for she is no) considered in bad faith and hence, estopped from claimin thereto thr" her o)n act of consentin and
areein to recei1e a salary not in accordance )ith her contract of employment. Moreo1er, her self(imposed silence for a lon period of time
)or2ed to her o)n disad1antae as she allo)ed laches to pre1ail )hich barred respondent from doin somethin at the o"tset. 3ormally, if a
person:s riht &is' 1iolated, she=he )o"ld immediately react to protect her=his rihts )hich is not tr"e in the case at bar.> L#$.&s has been
defined as one:s nelience or fail"re to assert his riht in d"e time or )ithin reasonable time from the accr"al of his ca"se of action, th"s,
leadin another party to belie1e that there is nothin )ron )ith his o)n claim. $t e1inces implied consent or acH"iescence to the 1iolation of
the riht.
On appeal, the 34RC "pheld the decision of the ;OEA.
Issu&%
6O3 p"blic respondents committed ra1e ab"se of discretion in findin that she is "ilty of laches0 that she entered into a side contract on
?ecember 1<, 1,-- for the red"ction of her basic salary to F5M7/<.<< )hich s"perseded, n"llified and in1alidated the standard employment
contract she entered into on ?ecember 1, 1,--0 and that ;lannin +apan Co., 4td. and pri1ate respondents are not solidarily liable to her for
F5M*,<<<.<< in "npaid )aes
H&'(%
9irstly, the manaerial commission areement e@ec"ted by petitioner to a"thoriCe her +apanese Employer to ded"ct T)o 8"ndred 9ifty
F.5. ?ollars &F5M2/<.<<' from her monthly basic salary is 1oid beca"se it is aainst o"r e@istin la)s, morals and p"blic policy. $t cannot
s"persede the standard employment contract of ?ecember 1, 1,-- appro1ed by the ;OEA )ith the follo)in stip"lation appended thereto%
7$t is "nderstood that the terms and conditions stated in this Employment Contract are in conformance )ith the 5tandard Employment
Contract for Entertainers prescribed by the ;OEA "nder Memorand"m Circ"lar 3o. 2, 5eries of 1,-*. Any alterations or chanes made in
any part of this contract )itho"t prior appro1al by the ;OEA shall be n"ll and 1oid.>
The stip"lation is in line )ith the pro1isions of R"le $$, !oo2 D and 5ection 2&f', R"le $, !oo2 D$ of the 1,,1 R"les and Re"lations
#o1ernin O1erseas Employment, th"s%
75ec. 1. Employment Standards. The Administration shall determine, form"late and re1ie) employment standards in accordance )ith the
mar2et de1elopment and )elfare obEecti1es of the o1erseas employment proram and the pre1ailin mar2et conditions.
75ec. 2. 'inim!m +rovisions for #ontract. The follo)in shall be considered the minim"m reH"irements for contracts of employment%
a. #"aranteed )aes for re"lar )or2in ho"rs and o1ertime pay for ser1ices rendered beyond re"lar )or2in ho"rs in accordance
)ith the standards established by the Administration0
75ec. .. Standard Employment #ontract. The administration shall "nderta2e de1elopment and=or periodic re1ie) of reion, co"ntry and
s2ills specific employment contracts for landbased )or2ers and cond"ct re"lar re1ie) of standard employment contracts &5EC' for
seafarers. These contracts shall pro1ide for minim"m employment standards herein en"merated "nder 5ection 2, of this R"le and shall
reconiCe the pre1ailin labor and social leislations at the site of employment and international con1entions. The 5EC shall set the
minim"m terms and conditions of employment. All employers and principals shall adopt the 5EC in connection )ith the hirin of )or2ers
.*
)itho"t preE"dice to their adoption of other terms and conditions of employment o1er and abo1e the minim"m standards of the
Administration.>
and !OOP D$, RF4E $%
75ec. 2. 4ro!nds for s!spension5cancellation of license.
f. 5"bstit"tin or alterin employment contracts and other doc"ments appro1ed and 1erified by the Administration from the time of
act"al sinin thereof by the parties "p to and incl"din the period of e@piration of the same )itho"t the Administration:s appro1al.
The basic salary of One Tho"sand 9i1e 8"ndred F.5. ?ollars &F5M1,/<<.<<' "aranteed to petitioner "nder the parties: standard
employment contract is in accordance )ith the minim!m employment standards )ith respect to )aes set by the ;OEA, Th"s, the side
areement )hich red"ced petitioner:s basic )ae to 5e1en 8"ndred 9ifty F.5. ?ollars &F5M7/<.<<' is n"ll and 1oid for 1iolatin the ;OEA:s
minim"m employment standards, and for not ha1in been appro1ed by the ;OEA. $ndeed, this side areement is a scheme all too freH"ently
resorted to by "nscr"p"lo"s employers aainst o"r helpless o1erseas )or2ers )ho are compelled to aree to satisfy their basic economic
needs.
5econdly. The doctrine of laches or 7stale demands> cannot be applied to petitioner. 9or petitioner filed her claim )ell )ithin the three(year
prescripti1e period for the filin of money claims set forth in Article 2,1 of the 4abor Code.
Thirdly, pri1ate respondents Centr"m and Times as )ell as ;lannin +apan Co., 4td. K the aency:s forein principal K are solidarily
liable to petitioner for her "npaid )aes. This is in accordance )ith stip"lation 1..7 of the parties: standard employment contract )hich
pro1ides%
71..7. The Employer &in this case, ;lannin +apan Co., 4td.' and its local aent=promoter=representati1e &pri1ate respondent Centr"m
;romotions O ;lacement Corporation' shall be -ointly and severally responsible for the proper implementation of the terms and conditions in
this Contract.7
This solidary liability also arises from the pro1isions of 5ection 1<&a'&2', R"le D, !oo2 $ of the Omnib"s R"les $mplementin the 4abor
Code, as amended, th"s%
75ec. 1<. Re&!irement before recr!itment. K !efore recr"itin any )or2er, the pri1ate employment aency shall s"bmit to the !"rea" the
follo)in doc"ments%
a. A formal appointment or aency contract e@ec"ted by a forein(based employer in fa1or of the license holder to recr"it and hire
personnel for the former . . . . 5"ch formal appointment or recr"itment areement shall contain the follo)in pro1isions, amon
others%
@ @ @
2. +ower of the agency to s!e and be s!ed -ointly and solidarily with the principal or foreign based employer for any of the
violations of the recr!itment agreement and the contracts of employment.
MARSAMAN MANNING AGENCY, INC. v. NLRC
G.R. No. 145199. August 49, 1999
BELLOSILLO, !.
"#$ts%
;ri1ate respondent 6ilfredo T. CaEeras )as hired by petitioner MAR5AMA3, the local mannin aent of petitioner ?$AMA3T$?E5, as Chief
Coo2 5te)ard on the 'V +rigipos, o)ned and operated by ?$AMA3T$?E5, for a contract period of 1< months )ith a monthly salary of
F5M*<<.<<, e1idenced by a contract bet)een the parties dated 1/ +"ne 1,,/. CaEeras started )or2 on - A""st 1,,/ b"t less than 2
months later, or on 2- 5eptember 1,,/, he )as repatriated to the ;hilippines alleedly by 7m"t"al consent.>
;ri1ate respondent CaEeras filed a complaint for illeal dismissal aainst petitioners )ith the 34RC 3ational Capital Reion Arbitration
!ranch allein that he )as dismissed illeally, denyin that his repatriation )as by m"t"al consent, and as2in for his "npaid )aes,
o1ertime pay, damaes, and attorney:s fees. CaEeras alleed that he )as assined not only as Chief Coo2 5te)ard b"t also as assistant
.7
coo2 and messman in addition to performin 1ario"s in1entory and reH"isition Eobs. !eca"se of his additional assinments he bean to feel
sic2 E"st a little o1er a month on the Eob constrainin him to reH"est for medical attention.
Issu&%
6O3 pri1ate respondent )as illeally dismissed
H&'(%
$n the Contract of Employment entered into )ith pri1ate respondent, petitioners co1enanted strict and faithf"l compliance )ith the terms and
conditions of the 5tandard Employment Contract appro1ed by the ;OEA=?O4E )hich pro1ides%
71. The employment of the seaman shall cease "pon e@piration of the contract period indicated in the Cre) Contract !nless the 'aster and
the Seaman, by m!t!al consent, in writing agree to an early termination...>
Fnder the foreoin, the employment of a 9ilipino seaman may be terminated prior to the e@piration of the stip"lated period pro1ided that the
master and the seaman &a' m!t!ally consent thereto and &b' red"ce their consent in writing.
;etitioners do not deny the fact that they ha1e fallen short of the reH"irement. 3o doc"ment e@ists )hereby Capt. Ale2os and pri1ate
respondent red"ced to )ritin their alleed 7m"t"al consent> to the termination of their employment contract. $nstead, petitioners presented
the 1essel:s ?ec2 4o )herein an entry !nilaterally made by Capt. Ale2os p"rported to sho) that pri1ate respondent himself as2ed for his
repatriation. 8o)e1er, the 34RC correctly dismissed its e1identiary 1al"e. 9or one thin, it is a "nilateral act )hich is 1ehemently denied by
pri1ate respondent. 5econdly, the entry in no )ay satisfies the reH"irement of a bilateral doc"mentation to pro1e early termination of an
o1erseas employment contract by m"t"al consent reH"ired by the 5tandard Employment Contract. 8ence, since the latter sets the minim"m
terms and conditions of employment for the protection of 9ilipino seamen s"bEect only to the adoption of better terms and conditions over
and above the minim"m standards, the 34RC co"ld not be acc"sed of ra1e ab"se of discretion in not acceptin any thin less.
The disp"ted entry in the ?ec2 4o )as neither a"thenticated nor s"pported by credible e1idence. Altho"h petitioners claim that CaEeras
sined his 5eaman:s 5er1ice Record !oo2 to sinify his conformity to the repatriation, the 34RC fo"nd the alleation to be act"ally "ntr"e
since no sinat"re of pri1ate respondent appeared in the Record !oo2.
3either co"ld the 7Medical Report> prepared by ?r. 8oed be considered corroborati1e and concl"si1e e1idence that pri1ate respondent )as
s"fferin from 7paranoia> and 7other mental problems,> s"pposedly E"st ca"ses for his repatriation. 9irstly, absol"tely no e1idence, not e1en
an alleation, )as offered to enlihten the 34RC or this Co"rt as to ?r. 8oed:s H"alifications to dianose mental illnesses. 5econdly, the
Medical Report prepared by ?r. 8oed contained only a eneral statement that pri1ate respondent )as s"fferin from 7paranoia> and 7other
mental problems> )itho"t pro1idin the details on ho) the dianosis )as arri1ed at or in )hat stae the illness )as. $f ?r. 8oed indeed
competently e@amined pri1ate respondent then he )o"ld ha1e been able to disc"ss at lenth the circ"mstances and precedents of his
dianosis. 9"rthermore, neither did petitioners pro1e that pri1ate respondent )as incompetent or contin"o"sly incapacitated for the d"ties for
)hich he )as employed by reason of his alleed mental state. On the contrary his ability as Chief Coo2 5te)ard, "p to the 1ery moment of
his repatriation, )as rated 7Dery #ood> in his 5eaman:s 5er1ice Record !oo2 as correctly obser1ed by p"blic respondent.
4astly, on the amo"nt of salaries d"e pri1ate respondent, the r"le has al)ays been that an illeally dismissed )or2er )hose employment is
for a fi@ed period is entitled to payment of his salaries correspondin to the "ne@pired portion of his employment. 8o)e1er on 1/ +"ly 1,,/,
RA -<42 other)ise 2no)n as the 7Mirant 6or2ers and O1erseas 9ilipinos Act of 1,,/> too2 effect, 5ec. 1< of )hich pro1ides%
75ec. 1<. $n case of termination of o1erseas employment )itho"t E"st, 1alid or a"thoriCed ca"se as defined by la) or contract, the )or2er
shall be entitled to the f"ll reimb"rsement of his placement fee )ith interest at t)el1e percent &12N' per ann!m, pl!s his salaries for the
!ne(pired portion of the employment contract or for three &6' months for every year of the !ne(pired term whichever is less.>
The 4abor Arbiter, rationaliCin that the aforesaid la) did not apply since it became effecti1e only one &1' month after respondent:s o1erseas
employment contract )as entered into on 1/ +"ne 1,,/, simply a)arded pri1ate respondent his salaries correspondin to the "ne@pired
portion of his employment contract, i.e., for -.* months. The 34RC affirmed the a)ard and the Office of the 5olicitor #eneral &O5#' f"lly
areed. !"t petitioners no) insist that 5ec. 1<, RA -<42 is applicable beca"se altho"h pri1ate respondent:s contract of employment )as
entered into before the la) became effecti1e his alleed ca"se of action, i.e., his repatriation on 2- 5eptember 1,,/ )itho"t E"st, 1alid or
a"thoriCed ca"se, occ"rred )hen the la) )as already in effect. ;etitioners: p"rpose in so ar"in is to in1o2e the la) in E"stifyin a lesser
monetary a)ard to pri1ate respondent, i.e., salaries for . months only p"rs"ant to the last portion of 5ec. 1< as opposed to the salaries for
-.* months a)arded by the 4abor Arbiter and affirmed by the 34RC.
.-
5ec. 1<, RA -<42, applies in the case of pri1ate respondent and to all o1erseas contract )or2ers dismissed on or after its effecti1ity on 1/
+"ly 1,,/ in the same )ay that 5ec. .4,
2-
RA *71/,
2,
is made applicable to locally employed )or2ers dismissed on or after 21 March
1,-,.
.<
8o)e1er, )e cannot s"bscribe to the 1ie) that pri1ate respondent is entitled to three &.' months: salary only. A plain readin of 5ec.
1< clearly re1eals that the choice of )hich amo"nt to a)ard an illeally dismissed o1erseas contract )or2er, i.e., )hether his salaries for the
"ne@pired portion of his employment contract or three &.' months: salary for e1ery year of the "ne@pired term, )hiche1er is less, comes into
play only )hen the employment contract concerned has a term of at least one &1' year or more. This is e1ident from the )ords 7for e1ery
year of the "ne@pired term> )hich follo)s the )ords 7salaries . . . for three months.>
EOLE v. NA6ARRA
G.R. No. 119361. "&1,u#,2 19, 4881
ARDO, !.
"#$ts%
+ob and Rodolfo, alon )ith Rodolfo:s )ife
2
CoraCon, operated an aency )hich p"rported to ha1e the a"thority to recr"it and place
)or2ers for employment in Tai)an. The aency
.
)as named Rodolfo 3a1arra:s Tra1el Cons"ltant and #eneral 5er1ices &7R3TC#5>', )hich
in the co"rse of its operation )as able to 1ictimiCe se1eral hapless 1ictims )ho ne1er left ;hilippine soil, and in d"e time, filed complaints
)ith the ;hilippine O1erseas Employment Aency &;OEA' aainst acc"sed for illeal recr"itment.
3either R3TC#5 nor Rodolfo, CoraCon or +ob in their personal capacities )ere licensed or a"thoriCed by the ;hilippine O1erseas
Employment Administration to recr"it )or2ers for o1erseas employment.
The trial co"rt s"mmariCed the testimonies of complainants, th"s%
MER4$E D$44E5CA identified Rodolfo as the one )ith )hom she applied to for employment in Tai)an on May *, 1,,2, at the R3TC#5
office in 3o1aliches, R"eCon City. As placement fee she paid fifteen tho"sand pesos &;1/,<<<.<<' to $nday ;ada)an &Rodolfo:s coo2 and
la"ndry)oman, hereafter, 7$nday>', at CoraCon and Rodolfo:s ho"se, and another fifteen tho"sand pesos &;1/,<<<.<<' on ?ecember 22,
1,,2. 5he identified +ob as the administrati1e officer of R3CT#5, )ho entertained her and the other applicants d"rin the times she 1isited
the aency:s office to follo) "p her application.
#4$CER$A MAR$3A5 sinled o"t +ob as the one )ho recr"ited her for employment in Tai)an as a factory )or2er. 5he testified that she
)as recr"ited by +ob on April 24, 1,,2 at R3TC#5 )here she )as told that she and her co(applicants )o"ld lea1e for Tai)an t)o months
after they applied on April 24, 1,,2. 5he a1e +ob all the reH"irements the aency as2ed for incl"din her passport and birth certificate. 5he
)as also reH"ired to pay a placement fee of t)enty tho"sand pesos &;2<,<<<.<<', altho"h the receipt i1en to her )as only for the amo"nt
of fifteen tho"sand pesos &;1/,<<<.<<'. 5he a1e her passport to +ob and she handed the placement fee to $nday )ho a1e it to CoraCon in
her presence.
!E$3DE3$?A AMFTA3 testified that )hile in Rodolfo:s ho"se in 3o1aliches, R"eCon City, on May 11, 1,,2, Rodolfo promised her that she
)o"ld be able to lea1e for Tai)an "pon payment of a t)enty tho"sand pesos &;2<,<<<.<<' placement fee. On April 11, 1,,2, !ein1enida
paid the amo"nt to $nday )ho a1e it to CoraCon in !ein1enida:s presence. 5he ne1er had the chance to o to Tai)an. Fpon in1estiation
)ith the ;OEA, she disco1ered that R3TC#5 )as not reistered.
ER3E5TO AMFTA3 testified that in April 1,,2, he filed an application to )or2 at a factory in Tai)an before CoraCon in the R3TC#5
office. $t )as CoraCon )ho inter1ie)ed him and as2ed him to s"bmit some reH"irements. 6hile at the said office, he sa) Rodolfo there, )ho
a1e him the ass"rance that he )o"ld be able to lea1e for Tai)an immediately. 8e )as ne1er deployed to Tai)an, despite payin a
placement fee of t)enty tho"sand pesos &;2<,<<<.<<'.
94OR$E RO5E RAMO5 testified that she applied )ith R3TC#5 as a factory )or2er for Tai)an and that she paid a placement fee of
t)enty fi1e tho"sand pesos &;2/,<<<.<<' and another payment of one tho"sand pesos &;1,<<<.<<' as medical fee. 5he )ent to R3TC#5
d"rin the last )ee2s of 9ebr"ary, March and April 1,,2 and )as inter1ie)ed by +ob. 5he )as introd"ced to Rodolfo by her co(complainant
E1elyn 4lacas. 5he )as not able to lea1e for Tai)an, neither )as she able to retrie1e her payments from R3TC#5 for )hen she )ent to the
office on ?ecember 2., 1,,., it had already been raided by the C$5 and ;OEA for recr"itin for o1erseas employment )itho"t license or
a"thority.
4$6AB6AB CRFU testified that she 1isited Rodolfo and CoraCon:s ho"se and came to 2no) that Rodolfo )as the ;resident of R3TC#5,
an aency )hich deported itself to her as and aency p"rportin to ha1e a"thority to recr"it )or2ers for placement in Tai)an. That on April
.,
1,,., she )ent to Rodolfo:s ho"se to inH"ire abo"t the processin of her papers for employment in Tai)an. There she )as ass"red by
Rodolfo that CoraCon )as in Tai)an and )as already ta2in care of her application.
4O$?A MACA5O testified that she came to 2no) Rodolfo )hen she 1isited $nday on ?ecember ., 1,,1, at Rodolfo:s ho"se and Rodolfo
and CoraCon recr"ited her to )or2 as a factory )or2er in Tai)an. 9or this p"rpose she paid the spo"ses ten tho"sand pesos &;1<,<<<.<<'
placement fee on +an"ary -, 1,,2. 5he )as ne1er sent to Tai)an.
Issu&%
6O3 acc"sed(appellants are "ilty of illeal recr"itment
H&'(%
A *o*')$&*s&& or *o*.o'(&, of a"thority means any person, corporation or entity )itho"t a 1alid license or a"thority to enae in
recr"itment or placement from the 5ecretary of 4abor, or )hose license or a"thority has been s"spended, re1o2ed or cancelled by the
;hilippine O1erseas Employment Administration or the 5ecretary of 4abor.
2-
Fnder Article 1.&b' of the 4abor Code, ,&$,u)t0&*t #*(
-'#$&0&*t refer to%
7... any act of can1assin, enlistin, contractin, transportin, "tiliCin, hirin or proc"rin )or2ers, and incl"des referrals, contract
ser1ices, promisin or ad1ertisin for employment, locally or abroad, )hether for profit or not% ;ro1ided, that any person or entity )hich in
any manner, offers or promises for a fee employment to t)o or more persons shall be deemed enaed in recr"itment and placement.>
Acc"sed(appellants committed acts of recr"itment and placement, s"ch as promises to the complainants of profitable employment abroad
and acceptance of placement fees. Acc"sed(appellants a1e the impression that they had the po)er to send the complainants to Tai)an for
employment.
6ith the certification from the ?epartment of 4abor and Employment statin that R3TC#5 )as not a"thoriCed to recr"it )or2ers for
o1erseas employment, and promises by the acc"sed of employment abroad for complainants on payment of placements fees, the concl"sion
is inescapable that acc"sed are liable for illeal recr"itment.
Article .- &b' of the 4abor Code, as amended by ;. ?. 3o. 2<1- pro1ides that illeal recr"itment shall be considered an offense in1ol1in
economic sabotae if any of the follo)in H"alifyin circ"mstances e@ists% 9irst, )hen illeal recr"itment is committed by a syndicate. 9or
p"rposes of the la), a s2*()$#t& e@ists )hen three or more persons conspire or confederate )ith one another in carryin o"t any "nla)f"l or
illeal transaction, enterprise or scheme. 5econd, there is economic sabotae )hen illeal recr"itment is committed in a lare scale, as
)hen it is committed aainst three or more persons indi1id"ally or as a ro"p.
The acts of acc"sed(appellants sho)ed "nity of p"rpose. All these acts establish a common criminal desin m"t"ally deliberated "pon and
accomplished thro"h coordinated mo1es.
E1en ass"min that there )as no conspiracy, the record clearly sho)s illeal recr"itment committed in a lare scale, since at least *
complainants )ere 1ictims, )hich is more than the minim"m n"mber of persons reH"ired by la) to constit"te illeal recr"itment in a lare
scale, res"ltin in economic sabotae.
EOLE v. GASACAO
G.R. No. 168++9. Nov&01&, 11, 4889
YNARES7SANTIAGO, !.
"#$ts%
Appellant )as the Cre)in Manaer of #reat Eastern 5hippin Aency $nc., a licensed local mannin aency, )hile his nephe) and co(
acc"sed, +ose #asacao, )as the ;resident. As the cre)in manaer, appellant:s d"ties incl"ded recei1in Eob applications, inter1ie)in the
applicants and informin them of the aency:s reH"irement of payment of performance or cash bond prior to deployment.
On A""st 4, 2<<<, appellant and +ose #asacao )ere chared )ith 4are 5cale $lleal Recr"itment defined "nder 5ection *, pararaphs
&a', &l' and &m' of Rep"blic Act &RA' 3o. -<42 or the Mirant 6or2ers and O1erseas 9ilipinos Act of 1,,/, and penaliCed "nder 5ection 7 &b'
of the same la), before the RTC of R"eCon City.
4<
Issu&%
6O3 error attended the trial co"rt:s findins, as affirmed by the Co"rt of Appeals, that appellant )as "ilty beyond reasonable do"bt of the
crime of lare scale illeal recr"itment
8eld%
RA 3o. -<42 defines illeal recr"itment as follo)s%
75ec. *. ?E9$3$T$O35. G 9or p"rposes of this Act, illeal recr"itment shall mean any act of can1assin, enlistin, contractin, transportin,
"tiliCin, hirin, proc"rin )or2ers and incl"des referrin, contract ser1ices, promisin or ad1ertisin for employment abroad, )hether for
profit or not, )hen "nderta2en by a non(licensee or non(holder of a"thority contemplated "nder Article 1.&f' of ;residential ?ecree 3o. 442,
as amended, other)ise 2no)n as the 4abor Code of the ;hilippines% ;ro1ided, that s"ch non(licensee or non(holder )ho, in any manner,
offers or promises for a fee employment abroad to t)o or more persons shall be deemed so enaed. $t shall li2e)ise incl"de the follo)in
acts, )hether committed by any persons, )hether a non(licensee, non(holder, licensee or holder of a"thority.
7a. To chare or accept directly or indirectly any amo"nt reater than the specified in the sched"le of allo)able fees prescribed by the
5ecretary of 4abor and Employment, or to ma2e a )or2er pay any amo"nt reater than that act"ally recei1ed by him as a loan or ad1ance0
@ @ @
7f. 9ail"re to act"ally deploy )itho"t 1alid reason as determined by the ?epartment of 4abor and Employment0 and
@ @ @
7m. 9ail"re to reimb"rse e@penses inc"rred by the )or2ers in connection )ith his doc"mentation and processin for p"rposes of deployment,
in cases )here the deployment does not act"ally ta2e place )itho"t the )or2er:s fa"lt. $lleal recr"itment )hen committed by a syndicate or
in lare scale shall be considered as offense in1ol1in economic sabotae.
7$lleal recr"itment is deemed committed by a syndicate carried o"t by a ro"p of three &.' or more persons conspirin or confederatin )ith
one another. $t is deemed committed in lare scale if committed aainst three &.' or more persons indi1id"ally or as a ro"p.>
A ')$&*s& is a doc"ment iss"ed by the ?epartment of 4abor and Employment &?O4E' a"thoriCin a person or entity to operate a pri1ate
employment aency, )hile an #ut.o,)t2 is a doc"ment iss"ed by the ?O4E a"thoriCin a person or association to enae in recr"itment and
placement acti1ities as a pri1ate recr"itment entity. 8o)e1er, it appears that e1en licensees or holders of a"thority can be held liable for
illeal recr"itment sho"ld they commit any of the abo1e(en"merated acts.
There is no merit in appellant:s contention that he co"ld not be held liable for illeal recr"itment since he )as a mere employee of the
mannin aency, p"rs"ant to 5ection * of RA 3o. -<42 )hich pro1ides%
7The persons criminally liable for the abo1e offenses are the principals, accomplices and accessories. $n case of E"ridical persons, the
officers ha1in control, manaement or direction of their b"siness shall be liable.>
Contrary to appellant:s claim, he is not a mere employee of the mannin aency b"t the cre)in manaer. As s"ch, he recei1es Eob
applications, inter1ie)s applicants and informs them of the aency:s reH"irement of payment of performance or cash bond prior to the
applicant:s deployment. As the cre)in manaer, he )as at the forefront of the company:s recr"itment acti1ities.
To pro1e illeal recr"itment, it m"st be sho)n that appellant a1e complainants the distinct impression that he had the po)er or ability to
send complainants abroad for )or2 s"ch that the latter )ere con1inced to part )ith their money in order to be employed.
I1<J
Appellant:s act of
promisin the pri1ate complainants that they )ill be deployed abroad )ithin three months after they ha1e paid the cash bond clearly sho)s
that he is enaed in illeal recr"itment.
E1en ass"min that appellant )as a mere employee, s"ch fact is not a shield aainst his con1iction for lare scale illeal recr"itment. $n the
case of +eople v. #abais, the Co"rt held that an employee of a company or corporation enaed in illeal recr"itment may be held liable as
principal, toether )ith his employer, if it is sho)n that he acti1ely and conscio"sly participated in the recr"itment process.
Appellant is "ilty beyond reasonable do"bt of lare scale illeal recr"itment. $t )as established that he promised o1erseas employment to
fi1e applicants, herein pri1ate complainants. 8e inter1ie)ed and reH"ired them to complete and s"bmit doc"ments p"rportedly needed for
41
their employment. Altho"h he informed them that it is optional, he collected cash bonds and promised their deployment not)ithstandin the
proscription aainst its collection "nder 5ection *< of the Omnib"s R"les and Re"lations $mplementin R.A. 3o. -<42 )hich state that%
75EC. *<. ,o.)1)t)o* o* Bo*(s #*( D&-os)ts. H $n no case shall an employment aency reH"ire any bond or cash deposit from the
)or2er to "arantee performance "nder the contract or his=her repatriation.>
appellant failed to deploy the pri1ate complainants )itho"t any 1alid reason, this not)ithstandin his promise to them that those )ho can pay
the cash bond )ill be deployed )ithin three months from payment of the same. 5"ch fail"re to deploy constit"tes a 1iolation of 5ection * &l'
of RA 3o. -<42. 6orse, )hen it became clear that appellant cannot deploy the pri1ate complainants )itho"t their fa"lt, he failed to ret"rn the
amo"nt of the cash bond paid by them.
$lleal recr"itment is deemed committed in '#,g& s$#'& if committed aainst three or more persons indi1id"ally or as a ro"p. $n this case,
fi1e complainants testified aainst appellant:s acts of illeal recr"itment, thereby renderin his acts tantamo"nt to economic sabotae. Fnder
5ection 7 &b' of RA 3o. -<42, the penalty of life imprisonment and a fine of not less than ;/<<,<<<.<< nor more than ;1,<<<.<<<.<< shall be
imposed if illeal recr"itment constit"tes economic sabotae.
EASTERN ASSURANCE < SURETY COR. ?EASCOA v. SECRETARY O" LABOR
G.R. No. L759+36798. !#*u#,2 15, 1998
NAR6ASA, !.
"#$ts%
9rom +"ne 1,-. to ?ecember 1,-/ .. persons applied for o1erseas employment )ith + O ! Manpo)er 5pecialist, $nc. $n consideration of
promised deployment, complainants paid respondent 1ario"s amo"nts for 1ario"s fees. Most of: the receipts iss"ed )ere sihed by Mrs.
!aby !"ndalian, E@ec"ti1e Dice(;resident of + O !.
!eca"se of non(deployment the applicants filed separate complaints )ith the 4icensin and Re"lation Office of ;OEA aainst + O ! for
1iolation of Articles .2 and .4 &a' of the 4abor Code bet)een the months of April to October 1,-/.
$n its separate Ans)er, EA5CO essentially disclaimed liability on the ro"nd that the claims )ere not e@pressly co1ered by the bond, that
;OEA had no E"risdiction to order forfeit"re of the bond, that some of the claims )ere paid beyond or prior to the period of effecti1ity of the
bond.
The ;OEA Administrator iss"ed an Order in fa1or of complainants )hich contained the follo)in statement and direction th"s%
7Respondent )as s"spended on May 2., 1,-/, +"ne 2*, 1,-/ and +an"ary 17, 1,-* all for illeal e@action. Considerin its trac2 record of
illeal e@action acti1ities and considerin f"rther the ross 1iolation of recr"itment r"les and re"lations established aainst it in the instant
cases, and the e@piration of its license on 9ebr"ary 1/, 1,-/, it is hereby fore1er banned from participation in the o1erseas employment
proram. $t is ordered to cease and desist from f"rther enain in recr"itment acti1ities other)ise Vit shall be prosec"ted for illeal
recr"itment.> 7Respondent + O ! Manpo)er 5pecialist is directed to ref"nd all .. complainants as listed in the Order of 5eptember -, 1,-*.
Respondent Eastern Ass"rance and 5"rety Corporation is hereby fo"nd Eointly and se1erally liable )ith respondent + O ! Manpo)er
5pecialist to ref"nd nineteen &1,' complainants in the modified amo"nts.>
Issu&%
6O3 the ;OEA and 5ecretary of 4abor had no E"risdiction o1er the claims for ref"nd filed by non(employees0
H&'(%
The complaints are for 1iolation of Articles .2 and .4 a' of the 4abor Code. Article .2 and pararaph &a' of Article .4 read as follo)s%
7Art. .2. .ees to be paid by wor$ers.KAny person applyin )ith a pri1ate fee(charin employment aency for employment assistance
shall not be chared any fee "ntil he has obtained employment thro"h its efforts or has act"ally commenced employment. 5"ch fee shall be
al)ays co1ered )ith the appro1ed receipt clearly sho)in the amo"nt paid. The 5ecretary of 4abor shall prom"late a sched"le of allo)able
fees.
7Art. .4. +rohibited practices.K$t shall be "nla)f"l for any indi1id"al, entity, licensee, or holder of a"thority%
42
a' To chare or accept, directly or indirectly, any amo"nt reater than that specified in the sched"le of allo)able fees prescribed by
the 5ecretary of 4abor, or to ma2e a )or2er pay any amo"nt reater than act"ally recei1ed by him as a loan or ad1ance0>
The penalties of s"spension and cancellation of license or a"thority are prescribed for 1iolations of the abo1e H"oted pro1isions, amon
others. And the 5ecretary of 4abor has the po)er "nder 5ection ./ of the la) to apply these sanctions, as )ell as the a"thority, conferred by
5ection .*, not only, to 7restrict and re"late the recr"itment and placement acti1ities of all aencies,> b"t also to 7prom"late r"les and
re"lations to carry o"t the obEecti1es and implement the pro1isions> o1ernin said acti1ities. ;"rs"ant to this r"le(ma2in po)er th"s
ranted, the 5ecretary of 4abor a1e the ;OEA >on its o)n initiati1e or "pon filin of a complaint or report or "pon reH"est for in1estiation
by any arie1ed person, . . . &a"thority to' cond"ct the necessary proceedins for the s"spension or cancellation of the license or a"thority
of any aency or entity> for certain en"merated offenses incl"din K
1. the imposition or acceptance, directly or indirectly, of any amo"nt of money, oods or ser1ices, or any fee or bond in e@cess of
)hat is prescribed by the Administration, and
2. any other 1iolation of pertinent pro1isions of the 4abor Code and other rele1ant la)s, r"les and re"lations.
$mplicit in these po)ers is the a)ard of appropriate relief to the 1ictims of the offenses committed by the respondent aency or contractor,
specially the ref"nd or reimb"rsement of s"ch fees as may ha1e been fra"d"lently or other)ise illeally collected, or s"ch money, oods or
ser1ices imposed and accepted in e@cess of )hat is licitly prescribed.
SORIANO v. O""SHORE SHIING AND MANNING COR.
G.R. No. 58+89. S&-t&01&, 1+, 1989
"ERNAN, C.!.
"#$ts%
;etitioner 3orberto 5oriano, a licensed 5econd Marine Enineer, so"ht employment and )as hired by pri1ate respondent Pn"t Pn"tsen
O.A.5. thro"h its a"thoriCed shippin aent in the ;hilippines, Offshore 5hippin and Mannin Corporation. As e1idenced by the Cre)
Areement, petitioner )as hired to )or2 as Third Marine Enineer on board Pn"t ;ro1ider> )ith a salary of F5M-<<.<< a month on a
cond"ction basis for a period of fifteen &1/' days. 8e admitted that the term of the contract )as e@tended to si@ &*' months by m"t"al
areement on the promise of the employer to the petitioner that he )ill be promoted to 5econd Enineer. Th"s, )hile it appears that
petitioner Eoined the aforesaid 1essel on +"ly 2., 1,-/ he sined off on 3o1ember 27, 1,-/ d"e to the alleed fail"re of pri1ate respondent(
employer to f"lfill its promise to promote petitioner to the position of 5econd Enineer and for the "nilateral decision to red"ce petitioner:s
basic salary from F5M-<<.<< to F5M/*<.<<. ;etitioner )as made to sho"lder his ret"rn airfare to Manila.
;etitioner filed )ith the ;hilippine O1erseas Employment Administration &;OEA for short', a complaint aainst pri1ate respondent for
payment of salary differential, o1ertime pay, "npaid salary for 3o1ember, 1,-/ and ref"nd of his ret"rn airfare and cash bond alleedly in the
amo"nt of ;2<,<<<.<< contendin therein that pri1ate respondent "nilaterally altered the employment contract by red"cin his salary of
F5M-<<.<< per month to F5M/*<.<<, ca"sin him to reH"est for his repatriation to the ;hilippines. Altho"h repatriated, he claims that he
failed to recei1e payment for the follo)in%
1. 5alary for 3o1ember )hich is eH"i1alent to F5M-<<.<<0
2. 4ea1e pay eH"i1alent to his salary for 1*./ days in the s"m of F5M44<.<<0
.. 5alary differentials )hich is eH"i1alent to F5M24<.<< a month for fo"r &4' months and one &1' )ee2 in the total s"m of
F5M1,<2<,<<0
4. 9i@ed o1ertime pay eH"i1alent to F5M24<.<< a month for fo"r &4' months and one &1' )ee2 in the s"m of F5M1,<2<.<<0
/. O1ertime pay for 14 5"ndays eH"i1alent to F5M4-4.,,0
*. Repatriation cost of F5M,4/.4*0
7. ;etitioner:s cash bond of ;2<,<<<.<<.
Respondent ;OEA r"led as follo)s% 7D$E6E? $3 T8E 4$#8T O9 T8E 9ORE#O$3#, respondents are hereby ordered to pay
complainant, Eointly and se1erally )ithin ten &1<' days from receipt hereof the amo"nt of ;1/,<<<.<< representin the reimb"rsement of the
cash bond deposited by complainant less F5M2-/.-. &to be con1erted to its peso eH"i1alent at the time of act"al payment'.>
$ss"e%
6O3 p"blic respondent committed ra1e ab"se of discretion and=or acted )itho"t or in e@cess of E"risdiction by disreardin the alteration
of the employment contract made by pri1ate respondent &;etitioner claims that the alteration by pri1ate respondent of his salary and o1ertime
rate )hich is e1idenced by the Cre) Areement and the e@it pass constit"tes a 1iolation of Article .4 of the 4abor Code of the ;hilippines.'
4.
H&'(%
There is no alteration made in the Cre) Areement or in the E@it ;ass. As the oriinal data appear, the fi"res F5M-<<.<< fall "nder the
col"mn salary, )hile the )ord 7incl"si1e> is indicated "nder the col"mn o1ertime rate. 6ith the s"pposed alterations, the fi"res F5M/*<.<<
)ere hand)ritten abo1e the fi"res F5M-<<.<< )hile the fi"res F5M24<.<< )ere also )ritten abo1e the )ord 7incl"si1e>.
Moreo1er, the presence of petitioner:s sinat"re after said items renders improbable the possibility that petitioner co"ld ha1e
mis"nderstood the amo"nt of compensation he )ill be recei1in "nder the contract. 3or has petitioner ad1anced any e@planation for
statements contrary or inconsistent )ith )hat appears in the records. Th"s, he claimed% IaJ that pri1ate respondent e@tended the d"ration of
the employment contract indefinitely, b"t admitted in his Reply that his employment contract )as e@tended for another * months by
areement bet)een pri1ate respondent and himself% IbJ that )hen petitioner demanded for his o1ertime pay, respondents repatriated
him )hich aain )as discarded in his reply statin that he himself reH"ested for his 1ol"ntary repatriation beca"se of the bad faith and
insincerity of pri1ate respondent0 IcJ that he )as reH"ired to post a cash bond in the amo"nt of ;2<,<<<.<< b"t it )as fo"nd that he deposited
only the total amo"nt of ;1/,<<<.<<0 IdJ that his salary for 3o1ember 1,-/ )as not paid )hen in tr"th and in fact it )as petitioner )ho o)es
pri1ate respondent F5M2-/.-. for cash ad1ances and on 3o1ember 27, 1,-/ the final pay slip )as e@ec"ted and sined0 and IeJ that he
finished his contract )hen on the contrary, despite proddins that he contin"e )or2in "ntil the rene)ed contract has e@pired, he adamantly
insisted on his termination.
Article .4 pararaph &i' of the 4abor Code reads%
7;rohibited ;ractices. K $t shall be "nla)f"l for any indi1id"al, entity, licensee, or holder of a"thority%
@ @ @
&i' To s"bstit"te or alter employment contracts appro1ed and 1erified by the ?epartment of 4abor from the time of act"al sinin thereof by
the parties "p to and incl"din the period of e@piration of the same )itho"t the appro1al of the ?epartment of 4abor.>
$n the case at bar, both the 4abor Arbiter and the 3ational 4abor Relations Commission correctly analyCed the H"estioned annotations as
not constit"tin an alteration of the oriinal employment contract b"t only a clarification thereof )hich by no stretch of the imaination can be
considered a 1iolation of the abo1e(H"oted la). Fnder similar circ"mstances, this Co"rt r"led that as a eneral proposition, e@ceptions from
the co1erae of a stat"te are strictly constr"ed. !"t s"ch constr"ction ne1ertheless m"st be at all times reasonable, sensible and fair. 8ence,
to r"le o"t from the e@emption amendments set forth, altho"h they did not materially chane the terms and conditions of the oriinal letter of
credit, )as held to be "nreasonable and "nE"st, and not in accord )ith the declared p"rpose of the Marin 4a).
EOLE v. DIA;
TORRES, !R., !.
"#$ts%
Mary Anne 3a1arro )as 22 years old, sinle and a st"dent of the Fni1ersity of the $mmac"late Concepcion in 1,,2, ta2in "p !achelor of
5cience in M"sic, ?a1ao City.
Maria Theresa 9abricante )as 2. years old, sinle and Eobless in 1,,2. 5he is accordinly a commerce rad"ate of the 3otre ?ame
Fni1ersity in Cotabato City.
Maria Elena RamireC )as 27 years old, married and a b"siness)oman in 1,,2. 5he is accordinly a collee rad"ate of the Fni1ersity of
Mindanao in ?a1ao City )here she finished the co"rse of !achelor of 5cience in Commerce, maEor in manaement.
9rom the combined testimonies of these three complainants, the Co"rt has athered that this is )hat happened, )hich a1e rise to this
case%
$n +"ne 1,,2 they )ere all enrolled at the 8enichi Techno E@chane C"lt"ral 9o"ndation in ?a1ao City, st"dyin 3ipono. Their teacher
)as Mrs. Remedios Aplicador.
One day Mrs. Aplicador told them that if they )anted to o and )or2 abroad, partic"larly !r"nei )here they co"ld earn a salary of 7M7<<.<<
for fo"r ho"rs daily )or2,> she )o"ld refer them to Mr. ;a"lo 4im )ho 2ne) one Enr. Er)in ?iaC )ho )as recr"itin applicants for !r"nei.
44
Accompanied by Mrs. Aplicador, the three complainants )ent to Mr. ;a"lo 4im )ho e@plained to them that he )as not the one recr"itin
)or2ers b"t Enr. ?iaC. Mr. 4im informed them that his children had already applied )ith Enr. ?iaC and that the reH"irements )ere bio(data,
passport, medical chec2"p, $.?. and income ta@ ret"rn, and ;2,/<<.<< for processin of their papers. Tellin them that he 2ne) 7pretty )ell
the recr"iter> Enr. ?iaC and that 76e don:t ha1e to )orry )e can really o abroad and as a matter of fact he said that his three children )ere
applyin &to o' to !r"nei,> he offered to accompany them to Enr. Er)in ?iaC at the office of the C$5. They as2ed Mr. 4im )hen he )as
a1ailable, and he said +"ly 1- &1,,2', 5at"rday mornin.
On +"ly 1-, Mr. ;a"lo 4im and Mrs. Remedios Aplicador accompanied the three complainants to Enr. ?iaC )ho )as then bein detained
in the C$5 ?etention Center in ?a1ao City and introd"ced them to him. The complainants as2ed Enr. ?iaC )hy he )as 7inside the cell,> and
he e@plained that fo"r applicants had filed a case aainst him 7beca"se they co"ld not accept that they )ere sic2 of hepatitis and that the
C$5 elements are E"st ma2in money o"t of it>. They as2ed him if he )as 7recr"itin applicants for !r"nei> and 7he said yes>0 they also
inH"ired )hat )ere the reH"irements, and he said fo"r passport siCe pict"res of each applicant, bio(data, income ta@ ret"rn, medical
certificate, 3!$ clearance, passport, ;2,/<<.<< for processin of the papers of each applicant, and ;*/,<<<.<< as placement fee, b"t only
;2<,<<<.<< for plane fare )as to be paid by each applicant, the balance of ;4/,<<<.<< )as to be paid by means of salary ded"ctions. The
;2,/<<.<< for processin of their respecti1e applications )as to be paid at the ho"se of Enr. ?iaC at 14 Aries 5treet, #5$5 8eihts, ?a1ao
City.
Mary Anne 3a1arro paid ;2,.<<.<< to Enr. ?iaC at his residence on +"ly 22, 1,,2. There is no e@planation by her )hy she paid only
;2,.<<.<< and not ;2./<<.<<.
Maria Theresa 9abricante paid only ;2,<<<.<< to Enr. ?iaC also on +"ly 22, 1,,2. 5he paid only that amo"nt beca"se, accordin to her
testimony, she already had a passport and Enr. ?iaC said she )as reH"ired to pay only ;2,<<<.<<.
Maria Elena RamireC paid to Enr. ?iaC ;2,/<<.<< b"t she lost her receipt. 8o)e1er, it )as ret"rned to her by Enr. ?iaC on A""st 17,
1,,2.
After s"bmittin to the acc"sed all the reH"ired papers and "nderoin medical e@amination &before the ret"rn of said amo"nts to the
complainants', they as2ed him )hen they co"ld lea1e. The acc"sed told them to )ait for three to fo"r )ee2s as his papers )ere still bein
processed by the C$5. ?"rin this period )hen the acc"sed had already been released from detention, the complainants 2ept inH"irin from
him )hen they )o"ld be lea1in for !r"nei, oin to his ho"se se1eral times )here they sa) many other applicants li2e them. !"t the
acc"sed E"st 2ept sayin that his papers )ere still )ith the C$5.
6hen he )as still detained, he told the complainants that 7the name of his aency is confidential b"t the o)ner thereof is Erlinda
Rom"aldeC> )ho 7"sed to be her &sic' mistress> ass"rin them that 7)e don:t ha1e to )orry abo"t it beca"se he said it is o1ernment proEect
and then he said he )ill escort "s to ;hilippine ;laCa 8otel for briefin before lea1in for abroad and after the briefin at the ;hilippine ;laCa
8otel )e )ill proceed to ;OEA )here )e )ill sin a contract that is the time )e )ill i1e him the amo"nt of ;2<,<<<.<< and then )e )ill
proceed to the residence of Erlinda Rom"aldeC )here )e )ill be stayin for three days>.
Issu&%
H&'(%
The crime of )''&g#' ,&$,u)t0&*t, as defined "nder Articles .- &a' in relation to Articles 1. &b' and .4 and penaliCed "nder Article ., of the
4abor Code, as amended by ;residential ?ecree 1,2< and ;residential ?ecree 2<1-, is any recr"itment acti1ity, incl"din the prohibited
practices en"merated "nder Article .4, "nderta2en by a non(licensee or non(holder of a"thority.
$n +eople v. #abacang, the Co"rt r"led that the crime of illeal recr"itment is committed )hen t)o elements conc"r, namely%
1. That the offender has no 1alid license or a"thority reH"ired by la) to enable one to la)f"lly enae in recr"itment and placement of
)or2ers0 and,
2. That the offender "nderta2es either any acti1ity )ithin the meanin of recr"itment and placement defined "nder Article 1.&b', or
any prohibited practices en"merated "nder Article .4.
Article 1. &b' of the 4abor Code, pro1ides for the stat"tory definition of 7recr"itment and placement,> as follo)s%
4/
7R&$,u)t0&*t #*( -'#$&0&*t refers to any act of can1assin, enlistin, contractin, transportin, "tiliCin, hirin or proc"rin )or2ers,
and incl"des referrals, contract ser1ices, promisin or ad1ertisin for employment, locally or abroad, )hether for profit or not0 ;ro1ided that
any person or entity )hich in any manner offers or promises for a fee employment to t)o or more persons shall be deemed enaed in
recr"itment and placement.>
any of the acts mentioned in Article 1.&b' )ill constit"te recr"itment and placement e1en if only one prospecti1e )or2er is in1ol1ed. The
n"mber of persons dealt )ith is not an essential inredient of the act of recr"itment and placement.
Article .-&a' clearly sho)s that illeal recr"itment is an offense )hich is essentially committed by a non(licensee or non(holder of a"thority.
A *o*7')$&*s&& or *o*7.o'(&, o/ #ut.o,)t2 means any person, corporation or entity )hich has not been iss"ed a 1alid license or
a"thority to enae in recr"itment and placement by the 5ecretary of 4abor, or )hose license or a"thority has been s"spended, re1o2ed or
cancelled by the ;OEA or the 5ecretary.
Moreo1er, recr"itment and placement acti1ities of aents or representati1es )hose appointments by a licensee or holder of a"thority )ere
not pre1io"sly a"thoriCed by the ;OEA shall li2e)ise constit"te illeal recr"itment.
The elements of the crime of )''&g#' ,&$,u)t0&*t )* '#,g& s$#'& are%
1. the offender is a non(licensee or non(holder of a"thority to enae in recr"itment and placement acti1ity,
2. the offender "nderta2es recr"itment and placement acti1ity defined "nder Article 1.&b', or any prohibited practices en"merated
"nder Article .4, and
.. illeal recr"itment is committed aainst three or more persons indi1id"ally or as a ro"p.
The acts of the appellant, )hich )ere clearly described in the l"cid testimonies of the three 1ictims, s"ch as collectin from each of the
complainants payment for passport, medical tests, placement fee, plane tic2ets and other s"ndry e@penses, promisin them employment
abroad, contractin and ad1ertisin for employment, "nH"estionably constit"te acts of lare scale illeal recr"itment.
A person is "ilty of illeal recr"itment )hen he i1es the impression that he has the po)er to send )or2ers abroad. Appellant ?iaC
manifestly a1e that impression to the three complainants that he had the ability to send )or2ers abroad. Misrepresentin himself as a
recr"iter of )or2ers for !r"nei, he promised them )or2 for a fee and con1inced them to i1e their money for the p"rpose of ettin an
employment o1erseas.
EOLE v. GUTIERRE;
G.R. No. 14++39. "&1,u#,2 9, 488+.
T'NGA, !.
"#$ts%
On April 1-, 1,,4, Rosemarie T"ade )ent to the ho"se of one Celia !a"tista, a 7recr"iter(aent> of the acc"sed, at !ry. !"lala, Dian,
$locos 5"r.
.
Celia told Rosemarie that she had to s"bmit the follo)in reH"irements for her application to )or2 in ?"bai as a domestic helper%
;4,<<<.<< as placement fee, ;1,2<<.<< for passport, ;-/<.<< for 7medical,> si@ &*' 2@2 pict"res and her oriinal birth certificate.
The ne@t day, Rosemarie, toether )ith 7recr"iter(aent> Celia !a"tista and fello) applicant E1elyn Ramos, tra1eled to Manila to the
ho"se of one Esther #amilde, another of the acc"sed:s 7recr"iter(aents.> There, Rosemarie and E1elyn filled o"t their bio(data forms. The
t)o then "nder)ent a medical e@amination before ha1in their )hole(body pict"re ta2en. Esther told them that they )o"ld 2no) the res"lts
of their application from Celia.
T)o )ee2s later, Celia told Rosemarie that her application for ?"bai )as already appro1ed and that she )ill be recei1in M1/<.<<(dollars
per month. 9or the first . months, ho)e1er, there )ill be salary ded"ctions.
On A""st 27, 1,,4, Rosemarie and E1elyn, alon )ith Celia and Esther, )ent to the acc"sed:s office at 5arif"din Manpo)er and #eneral
5er1ices at E?5A E@tension, ;asay City. The acc"sed told Rosemarie that she needed to pay ;2,<<<.<< more. The acc"sed said she had
recei1ed all of Rosemarie:s doc"ments and the money paid to Celia. Tr"stin in Celia, Rosemarie did not demand a receipt from the
acc"sed.
4*
;ri1ate complainant E1elyn Ramos )as )ith Rosemarie )hen she )ent to Celia !a"tista:s ho"se on April 1,, 1,,4. Celia told E1elyn that
for ;4,<<<.<< she co"ld lea1e for ?"bai to )or2 as a domestic helper. 4i2e Rosemarie, E1elyn a1e all her doc"ments and paid the fees to
Celia, )ho in t"rn handed them to Esther #amilde in Tondo. On +"ne 1<, 1,,4, Ramos a1e !a"tista ;-,<<<.<<, )hich )as also t"rned o1er
to #amilde.
On A""st 22, 1,,4, Celia told E1elyn that she only had to )ait one more )ee2 before she left for ?"bai. On A""st 27, 1,,4, Esther
bro"ht E1elyn to the acc"sed:s office, )here the acc"sed as2ed for an additional ;2,<<<.<< as processin fee for the ;hilippine O1erseas
Employment Aency &;OEA'. E1elyn paid the amo"nt on A""st .1, 1,,4, incl"din a terminal fee of ;/<<.<<. 4i2e Rosemarie, E1elyn )as
not able to lea1e the co"ntry despite the acc"sed:s promises.
Another complainant, Rosalyn 5"mayo, also applied for o1erseas Eob placement as a domestic helper in ?"bai. 8er e@perience )as more
aoniCin. $n her case, it )as one Marilyn #arcia )ho assisted Rosalyn. 5he s"bmitted a copy of her birth certificate, * copies of 2 @ 2
pict"res, 2 copies of her )hole(body pict"re, passport, and medical certificate. Marilyn also as2ed Rosalyn to pay% a processin fee of
;7,/<<.<<, ;2,*2<.<< as f"ll ta@, ;/<<.<< as terminal fee, and ;.,<<<.<< as ser1ice chare.
All the doc"ments and money i1en by Rosalyn to Marilyn )ere s"bseH"ently remitted to the acc"sed at her office on +"ne 2-, 1,,4. The
acc"sed told Rosalyn that she )o"ld be lea1in anytime, b"t after three months, Rosalyn:s depart"re did not p"sh thro"h.
?espite the setbac2, the acc"sed 2ept ass"rin Rosalyn that she )o"ld still be able to lea1e. One time, the acc"sed bro"ht her to the
airport and instr"cted her to hide in the airport restroom. After fifteen min"tes, the acc"sed told her that they had to lea1e the airport
beca"se %mahigpit sa immigration.% On another occasion, the acc"sed directed Rosalyn to hide inside the Pay"mani Resta"rant for 1/
min"tes. 3othin happened after, tho"h, and they )ent home.
On 3o1ember 14, 1,,4, Rosalyn )as aain at the airport. The acc"sed )arned her, tho"h, that if the $mmiration Officer insisted on
seein her papers, it )o"ld be better for her to lea1e. As directed, she left the airport )hen she )as as2ed to prod"ce her doc"ments.
E@asperated, Rosalyn )ent to the acc"sed:s ho"se and demanded the ret"rn of her money and her doc"ments. $nstead of accedin to
Rosalyn:s demands, the acc"sed sho"ted at her and )arned her that she had to pay a cancellation fee of M.<<.<<. Rosalyn )as not able to
i1e the amo"nt so she stayed )ith the acc"sed, )ho ass"red her that she )o"ld still be able to lea1e the co"ntry and that she )o"ld
recei1e a monthly salary of M1/< to M2<<. These promises )ere ne1er f"lfilled. Rosalyn th"s )ent to the ;OEA, )here ;OEA Administrator
9elicisimo +oson, +r. informed her that the acc"sed did not ha1e a license to recr"it.
#enerosa As"ncion s"ffered the same fate as her co(applicants. $n A""st 1,,4, she applied for o1erseas Eob placement )ith one 4inda
Rabaino. #enerosa s"bmitted her passport, medical certificate, clearance from the 3ational !"rea" of $n1estiation &3!$', birth certificate,
bio(data and pict"res. 5he also paid ;1/,<<<.<< in t)o installments on 5eptember , and 12, 1,,4,4< )hich payments )ere not receipted.
4inda told #enerosa she )o"ld be lea1in on 5eptember 1., 1,,4. 8o)e1er, she )as not able to lea1e beca"se, accordin to 4inda, at
2/, #enerosa )as "nder(aed. 4inda then referred #enerosa to the acc"sed in the latter:s office, )here 4inda t"rned o1er #enerosa:s
doc"ments as )ell as the ;1/,<<< << to the acc"sed. The acc"sed promised that 4inda )o"ld be able to lea1e, b"t her depart"re ne1er too2
place.44 6hen #enerosa demanded the ret"rn of her money and her doc"ments, the acc"sed told her that she had to pay a cancellation fee
of M*<<.<<. 5t"nned, 4inda E"st opted to a)ait the f"rther o"tcome of her application.4* 8er )aitin )as all for na"ht.
6ith the promises of Eobs abroad "nf"lfilled, complainants decided to 1erify if the acc"sed )as a licensed recr"iter. Fpon learnin from the
;OEA that she )as not so licensed, they proceeded to the ;hilippine Anti(Crime Commission &;ACC' to e@ec"te their respecti1e affida1its.
5;O4 +ohnny MarH"eta in1estiated the )omen:s complaint. 8e confirmed )ith the ;OEA that the acc"sed )as not licensed or
a"thoriCed to recr"it o1erseas contract )or2ers. The fo"r complainants also informed him that the acc"sed )anted to meet )ith the ro"p on
+an"ary 2*, 1,,/./< 5;O4 MarH"eta th"s had their money, totalin ;2,<<<.<<, mar2ed at the 3ational !"rea" of $n1estiation &3!$'
9orensic 5ection for their entrapment operation.
On +an"ary 2*, 1,,/, the acc"sed met )ith the fo"r complainants at +ollibee, Common)ealth A1en"e, R"eCon City. As soon as she
finished co"ntin the mar2ed money and )rappin it in +ollibee nap2ins, the acc"sed )as arrested.
$n her defense, the acc"sed claimed that as an 7employee> of a d"ly licensed aency )ho )as tas2ed to recr"it and offer Eob placements
abroad, she co"ld not be held liable for illeal recr"itment. 5he admitted that she had no a"thority to recr"it in her personal capacity, b"t that
her a"thority emanated from a 5pecial ;o)er of Attorney &5;A' and a Certification iss"ed by a licensed aency.
Issu&%
47
H&'(%
I''&g#' ,&$,u)t0&*t is committed )hen t)o elements conc"r, namely% &1' the offender has no 1alid license or a"thority reH"ired by la) to
enable one to la)f"lly enae in recr"itment and placement of )or2ers0 and &2' he "nderta2es either any acti1ity )ithin the meanin of
7recr"itment and placement> defined "nder Art. 1.&b', or any of the prohibited practices en"merated "nder Art. .4 of the 4abor Code. Art.
1.&b' of the 4abor Code defines 7recr"itment and placement> as 7any act of can1assin, enlistin, contractin, transportin, "tiliCin, hirin, or
proc"rin )or2ers, and incl"des referrals, contract ser1ices, promisin or ad1ertisin for employment, locally or abroad, )hether for profit or
not% ;ro1ided, That any person or entity )hich, in any manner, offers or promises for a fee employment to t)o or more persons, shall be
deemed enaed in recr"itment and placement.>
The crime becomes I''&g#' R&$,u)t0&*t )* L#,g& S$#'& )hen the t)o elements conc"r, )ith the addition of a third element% the recr"iter
committed the same aainst three or more persons, indi1id"ally or as a ro"p.
5ection 11, R"le $$, !oo2 $$ of the R"les and Re"lations #o1ernin O1erseas Employment reH"ires the prior appro1al of the ;OEA of the
appointment of representati1es or aents%
75ection 11. A--o)*t0&*t o/ R&-,&s&*t#t)v&s. E1ery appointment of representati1es or aents of licensed aency shall be s"bEect to
prior appro1al or a"thority of the Administration.
7The appro1al may be iss"ed "pon s"bmission of or compliance )ith the follo)in reH"irements%
a. ;roposed appointment or 5pecial ;o)er of Attorney0
b. Clearances of the proposed representati1e or aent from 3!$0
c. A s)orn or 1erified statement by the desinatin or appointin person or company ass"min f"ll responsibility for all the acts of the
aent or representati1e done in connection )ith the recr"itment and placement of )or2ers.>
Appro1al by the Administration of the appointment or desination does not a"thoriCe the aent or representati1e to establish a branch or
e@tension office of the licensed aency represented.
Any re1ocation or amendment in the appointment sho"ld be comm"nicated to the administration. Other)ise, the desination or
appointment shall be deemed as not re1o2ed or amended.
5ection 1, R"le Q of the same !oo2, in t"rn, pro1ides that 7recr"itment and placement acti1ities of aents or representati1es appointed by
a licensee, )hose appointments )ere not a"thoriCed by the Administration shall li2e)ise constit"te illeal recr"itment.>
That appellant enaed in recr"itment and placement is beyond disp"te. The complainin )itnesses cateorically testified that the
acc"sed promised them on se1eral occasions that they )o"ld be lea1in for )or2 abroad. Appellant recei1ed complainants: money and
doc"ments, a fact that the complainants themsel1es )itnessed and )hich the acc"sed ac2no)leded )hen she ret"rned the same to them
after the filin of the case aainst her. Appellant e1en bro"ht complainant Rosalyn 5"mayo to the airport three times, raisin her
e@pectations, b"t lea1in her hanin in mid(air. The acc"sed e1en had the a"dacity to demand cancellation fees from the complainants
)hen they as2ed for a ref"nd.
EOLE v. DE LEON
G.R. No. 118391. "&1,u#,2 5, 1995
ROMERO, !.
"#$ts%
Appellant ?olores de 4eon )as chared )ith 1iolation of Article .- &a' of ;residential ?ecree 1412 in relation to Article 1/ &b' and &c' of the
4abor Code in an information )hich reads%
7That in or abo"t and d"rin the period comprised bet)een +"ly *, 1,,2 and 5eptember .<, 1,,2, incl"si1e, in the City of Manila,
;hilippines, the said acc"sed, representin herself to ha1e the capacity to contract, enlist and transport 9ilipino )or2ers for employment in
+eddah=5a"di Arabia, did then and there )ilf"lly and "nla)f"lly for a fee, recr"it and promise employment=Eob placement in said co"ntry to
4-
Roberto ;orio y 5il1a, Ambrosio Miler y dela Cr"C, Rafael 4a"rente y EnriH"eC, Olimpia #"illena y ?aliopac, Cipriano ;ereC y !onoy,
Charlene Tatlonhari y 5ota, El1ira !anta y ;"no, ;"rita +oaH"in y 9lores, 4oreta Tatlonhari y Toboro, +oseph Cha1eC y Cater, AnaliCa
Tatlonhari y Toboro, +aime $ndaya y 4amboCon, Man"el Cab"sao y ;ar"nao, Edardo Alaao y dela Cr"C, Raym"nda Mi"elles y !alaba,
?esiree dela Cr"C y 4aconsay, 9elicidad #al1eC y ?"c"sin, E@eH"iel Mi"elles y Cir"nay, Rosenda +ose y ;ereC, #"illermo 4ampa y
Tans"eco, Edmar Alaao y dela Cr"C, Rommel 4oCano y CorteC, Rodante 5"nico y #al1eC and Romeo ;orio y 5il1a, )itho"t first ha1in
sec"red the reH"ired license or a"thority from the ?epartment of 4abor and Employment.>
The trial co"rt fo"nd aainst appellant.
Issu&%
H&'(%
$lleal recr"itment is defined in Article .- of the 4abor Code, as amended, as follo)s%
7Art. .-. Illegal Recr!itment. K &a' Any recr"itment acti1ities, incl"din the prohibited practices en"merated "nder Article .4 of this Code,
to be "nderta2en by non(licensees or non(holders of a"thority shall be deemed illeal and p"nishable "nder Article ., of this Code. The
Ministry of 4abor and Employment or any la) enforcement officer may initiate complaints "nder this Article.
7&b' $lleal recr"itment )hen committed by a syndicate or in lare scale shall be considered an offense in1ol1in economic sabotae and
shall be penaliCed in accordance )ith Article ., hereof.
7$lleal recr"itment is deemed committed by a syndicate if carried o"t by a ro"p of three &.' or more persons conspirin and=or
confederatin )ith one another in carryin o"t any "nla)f"l or illeal transaction, enterprise or scheme defined "nder the first pararaph
hereof. $lleal recr"itment is deemed committed in lare scale if committed aainst three &.' or more persons indi1id"ally or as a ro"p.>
Article 1.&b' of the same Code defines 7recr"itment and placement> as% 7any act of can1assin, enlistin, contractin, transportin,
"tiliCin, hirin or proc"rin )or2ers, and incl"des referrals, contract ser1ices, promisin or ad1ertisin for employment, locally or abroad,
)hether for profit or not% ;ro1ided, that any person or entity )hich, in any manner, offers or promises for a fee employment to t)o or more
persons shall be deemed enaed in recr"itment and placement.
To pro1e illeal recr"itment, only t)o elements need be sho)n% &1' the person chared )ith the crime m"st ha1e "nderta2en recr"itment
acti1ities0 and &2' the said person does not ha1e a license or a"thority to do so.
A ')$&*s& is a doc"ment iss"ed by the ?epartment of 4abor and Employment &?O4E' a"thoriCin a person or entity to operate a pri1ate
employment aency, )hile an a"thority is a doc"ment iss"ed by the ?O4E a"thoriCin a person or association to enae in recr"itment and
placement acti1ities as a pri1ate recr"itment aency.
$n the instant case, appellant clearly committed lare scale illeal recr"itment as she recr"ited at least three persons, i1in them the
impression that she had the capability of sendin them abroad for ass"red Eobs in 5a"di Arabia, and collectin 1ario"s amo"nts alleedly for
processin and placement fees )itho"t license or a"thority to do so.
EOLE v. CALON;O
G.R. Nos. 119198799. S&-t&01&, 45, 1996
BELLOSILLO, !.
"#$ts%
5ometime in 9ebr"ary 1,,2 ?anilo de los Reyes and his brother(in(la) !elarmino Torrerosa met Reydante CalonCo in the ho"se of
4oreta CastaTeda at 3o. 1< ;. !"ros 5treet, ;asi, Metro Manila. $n that meetin CalonCo lost no time in informin them that he co"ld
pro1ide them employment abroad, partic"larly $taly, for a fee. CalonCo )as lib and pers"asi1e that ?e los Reyes and Torrerosa )ere
H"ic2ly con1inced to cast their lot )ith him. Fpon ret"rnin home they too2 stoc2 of their assets and reso"rces and came "p )ith the fi"res
s"fficient for the processin of their applications for employment abroad. T)o months after their initial meetin, or on 1. April 1,,2, ?e los
Reyes a1e CalonCo ;/<,<<<.<<. 8e also pleded the 9ord 9iera of his brother(in(la) to CalonCo for ;7<,<<<.<< in order to come "p )ith
the ;12<,<<<.<< processin fee imposed by CalonCo. The latter then informed ?e los Reyes of his 7sched"led> depart"re for $taly on 2, April
4,
1,,2. 8o)e1er, despite the lapse of the period, ?e los Reyes and Torrerosa remained in the ;hilippines altho"h their recr"iter reiterated
his promise to send them to $taly.
On 1 May 1,,2, instead of sendin them to $taly, they )ere billeted at Aloha 8otel alon Ro@as !o"le1ard. The follo)in day, or on 2 May
1,,2, they boarded a plane that )as s"pposed to ta2e them to $taly. !"t CalonCo had another destination in mind. They landed in !an2o2
instead )here their 1isas for $taly, accordin to CalonCo, )o"ld be processed. They stayed at +.S. 4!est 7otel for one and a half months.
6hile in !an2o2 the acc"sed aain collected money from them p"rportedly to defray the e@penses for their 1isas. They also inc"rred
e@penses for food and accommodation, and for o1erstayin, ?e los Reyes had to pay 2-<< bahts to the immiration a"thorities only to
disco1er to their "tter dismay that CalonCo had already ret"rned to the ;hilippines.
$n their helplessness in a forein land they so"ht the help of 4oreta CastaTeda by callin her "p in Manila. CastaTeda promptly fetched
them from !an2o2 and bro"ht them bac2 to the ;hilippines. The day follo)in their arri1al they )ent to the office of CalonCo on ;adre
9a"ra. ?espite their fr"strations in !an2o2 CalonCo still insisted that he )o"ld send them to $taly as he promised. $n their nai1ety )hich )as
no match to the "nmitiated a"dacity of CalonCo, ?e los Reyes and Torrerosa still cl"n to the promises of CalonCo hopin aainst hope
that the latter )o"ld still f"lfill them. 8o)e1er the promises remained "nf"lfilled so they loo2ed aain for CalonCo. !"t this time their H"arry
had already absconded.
They 1erified from the ;OEA )hether CalonCo or his R./.#. 8!siness /gency )as d"ly a"thoriCed and licensed to recr"it people for
employment abroad. The ;OEA certified that R.A.C. 8!siness /gency )as not licensed to recr"it )or2ers for o1erseas employment.
On her part, 8aCel de ;a"la testified that she first met appellant and the other complainants at the ho"se of 4oreta CastaTeda at 3o. 1< ;.
!"ros 5treet, ;asi, Metro Manila. Con1inced that she )o"ld e1ent"ally be employed in $taly as a domestic helper she a1e CalonCo
;12<,<<<.<<. Fnli2e the other complainin )itnesses, she )as not able to fly to !an2o2 on 2 May 1,,2 as her passport )as not yet
a1ailable. 5he left only on * May 1,,2 )here she )as met by CalonCo at the airport and bro"ht to the +.S. 4!est 7otel )here her
companions )ho had arri1ed earlier )ere already billeted. 5he said that )hile in !an2o2 CalonCo as2ed money aain from her.
Elmer Clamor, a 2-(year old resident of #en. Trias, Ca1ite, )as similarly sit"ated )ith 8aCel de ;a"la. Clamor narrated that he a1e
CalonCo ;12<,<<<.<< for the latter:s commitment to send him to $taly, and in fact )hile in !an2o2 he a1e CalonCo F5M2/<.<< more.
!ernardo Miranda, a constr"ction )or2er from Talisay, !atanas, )as another 1ictim of CalonCo. 4"red by the latter:s ass"rances that he
)o"ld be sent to $taly, he a1e CalonCo a total of ;12<,<<<.<< for the processin of his application for )or2 in $taly. !"t, li2e all the rest of
them, Miranda only reached !an2o2. The promised Eob, his hard(earned money and CalonCo himself e1ent"ally disappeared.
5enior 4abor Employment Office 3enita Mercado of the ;OEA confirmed that neither Reydante CalonCo nor his R./.#. 8!siness
/gency )as a"thoriCed to recr"it )or2ers for employment abroad.
Reydante CalonCo tells "s his o)n story. 8e admits bein enaed in the cons"ltancy b"siness thro"h his R./.#. 8!siness /gency b"t
denies any in1ol1ement in recr"itment acti1ities. 8e admits 2no)in 4oreta CastaTeda and 4eticia 5olis as the t)o ha1e so"ht his
assistance reardin their real estate b"siness. 8e denies 2no)in the complainin )itnesses e@cept ?anilo de los Reyes and !elarmino
Torrerosa )ho once 1isited him in his office. 6hile he disclaims the receipts presented by the prosec"tion as official receipts of
his R./.#. 8!siness /gency he admits that the sinat"res thereon )ere similar to his.
Issu&%
6O3 appellant is "ilty of illeal recr"itment and estafa
H&'(%
Article 1., par. &b', of the 4abor Code defines recr"itment and placement as K
7&A'ny act of can1assin, enlistin, contractin, transportin, "tiliCin, hirin or proc"rin )or2ers, and incl"des referrals, contract ser1ices,
promisin or ad1ertisin for employment, locally or abroad, )hether for profit or not0 +rovided, that any person or entity )hich, in any manner,
offers or promises for a fee employment to t)o or more persons shall be deemed enaed in recr"itment and placement.>
$lleal recr"itment is specifically defined in Art. .- of the Code th"s K
7&a' Any recr"itment acti1ities, incl"din the prohibited practices en"merated "nder Article .4 of this Code, to be "nderta2en by non(
licensees or non(holders of a"thority shall be deemed illeal and p"nishable "nder Article ., of this Code.
/<
hereof. $lleal recr"itment is deemed committed in lare scale if committed aainst three &.' or more persons indi1id"ally or as a ro"p.
$lleal recr"itment in lare scale is committed )hen a person 7&a' "nderta2es any recr"itment acti1ity defined "nder Article 1.&b' or any
prohibited practice en"merated "nder Article .4 of the 4abor Code0 &b' does not ha1e a license or a"thority to la)f"lly enae in the
recr"itment and placement of )or2ers0 and &c' commits the same aainst three or more persons, indi1id"ally or as a ro"p.>
3
The testimony
of complainants e1idently sho)ed that CalonCo )as enaed in recr"itment acti1ities in lare scale. .irstly, he del"ded complainants into
belie1in that Eobs a)aited them in $taly by distinctly impressin "pon them that he had the facility to send them for )or2 abroad. 8e e1en
sho)ed them his passport to lend credence to his claim. To top it all, he bro"ht them to !an2o2 and not to $taly. 3either did he ha1e any
arranements in !an2o2 for the transfer of his recr"its to $taly. Secondly, ;OEA li2e)ise certified that neither CalonCo nor R./.#. 8!siness
/gency )as licensed to recr"it )or2ers for employment abroad. Appellant admitted this fact himself. )hirdly, appellant recr"ited fi1e &/'
)or2ers th"s ma2in the crime illeal recr"itment in lare scale constit"tin economic sabotae.
As reards the con1iction of CalonCo for estafa on / co"nts the Co"rt r"led in +eople v. )!rda that recr"itment of persons for o1erseas
employment )itho"t the necessary recr"itin permit or a"thority from the ;OEA constit"tes illeal recr"itment0 ho)e1er, )here some other
crimes or felonies are committed in the process, con1iction "nder the 4abor Code does not precl"de p"nishment "nder other stat"tes.
CalonCo defra"ded complainants thro"h deceit. They )ere ob1io"sly misled into belie1in that he co"ld pro1ide them employment in
$taly. As a res"lt, the / complainants )ho desperately )anted to a"ment their income and impro1e their lot parted )ith their hard(earned
money.
EOLE v. CHO@DURY
G.R. No. 149955788. "&1,u#,2 19, 4888
UNO, !.
"#$ts%
!"l" Cho)d"ly and +osephine On )ere chared before the Reional Trial Co"rt of Manila )ith the crime of illegal recr!itment in large
scale committed as follo)s%
7That sometime bet)een the period from A""st 1,,4 to October 1,,4 in the City of Manila, ;hilippines and )ithin the E"risdiction of this
8onorable Co"rt, the abo1e(named acc"sed, representin themsel1es to ha1e the capacity to contract, enlist and transport )or2ers for
employment abroad, conspirin, confederatin and m"t"ally helpin one another, did then and there )illf"lly, "nla)f"lly and felonio"sly
recr"it the herein complainants% Estrella !. CalleEa, Mel1in C. Miranda and Aser 5. 5asis, indi1id"ally or as a ro"p for employment in Porea
)itho"t first obtainin the reH"ired license and=or a"thority from the ;hilippine O1erseas Employment Administration.>
They )ere li2e)ise chared )ith three co"nts of estafa committed aainst pri1ate complainants. The 5tate ;rosec"tor, ho)e1er, later
dismissed the estafa chares aainst Cho)d"ry and filed an amended information indictin only On for the offense.
The trial co"rt fo"nd Cho)d"ry "ilty beyond reasonable do"bt of the crime of illeal recr"itment in lare scale.
Issu&%
6O3 acc"sed(appellant 2no)inly and intentionally participated in the commission of the crime chared
H&'(%
3o.
The elements of illeal recr"itment in lare scale are%
/1
1. The acc"sed "ndertoo2 any recr"itment acti1ity defined "nder Article 1. &b' or any prohibited practice en"merated "nder Article .4
of the 4abor Code0
2. 8e did not ha1e the license or a"thority to la)f"lly enae in the recr"itment and placement of )or2ers0 and
.. 8e committed the same aainst three or more persons, indi1id"ally or as a ro"p.
The last pararaph of 5ection * of Rep"blic Act &RA' -<42 states who shall be held liable for the offense, th"s%
7The persons criminally liable for the abo1e offenses are the principals, accomplices and accessories. In case of -!ridical persons, the
officers having control, management or direction of their b!siness shall be liable.>
An employee of a company or corporation enaed in illeal recr"itment may be held liable as principal, toether )ith his employer, if it is
sho)n that he actively and conscio!sly participated in illeal recr"itment. 6here it is sho)n that the employee )as merely actin "nder the
direction of his s"periors and )as "na)are that his acts constit"ted a crime, he may not be held criminally liable for an act done for and in
behalf of his employer.
Acc"sed(appellant inter1ie)ed pri1ate complainants in the months of +"ne, A""st and 5eptember in 1,,4 at Craftrade:s office. At that
time, he )as employed as inter1ie)er of Craftrade )hich )as then operatin "nder a temporary a"thority i1en by the ;OEA pendin
rene)al of its license. The temporary license incl"ded the a"thority to recr"it )or2ers. 8e )as con1icted based on the fact that he )as not
reistered )ith the ;OEA as employee of Craftrade. 3either )as he, in his personal capacity, licensed to recr"it o1erseas )or2ers. 5ection
1< R"le $$ !oo2 $$ of the R"les and Re"lation #o1ernin O1erseas Employment &1,,1' reH"ires that e1ery chane, termination
or appointment of officers, representati1es and personnel of licensed aencies be reistered )ith the ;OEA. Aents or representati1es
appointed by a licensed recr"itment aency )hose appointments are not pre1io"sly appro1ed by the ;OEA are considered 7non(licensee> or
7non(holder of a"thority> and therefore not a"thoriCed to enae in recr"itment acti1ity.
the prosec"tion failed to pro1e that acc"sed(appellant )as a)are of Craftrade:s fail"re to reister his name )ith the ;OEA and that he
acti1ely enaed in recr"itment despite this 2no)lede. The obliation to reister its personnel )ith the ;OEA belons to the officers of the
aency. A mere employee of the aency cannot be e@pected to 2no) the leal reH"irements for its operation. The e1idence at hand sho)s
that acc"sed(appellant carried o"t his d"ties as inter1ie)er of Craftrade belie1in that the aency )as d"ly licensed by the ;OEA and he, in
t"rn, )as d"ly a"thoriCed by his aency to deal )ith the applicants in its behalf. Acc"sed(appellant in fact confined his actions to his Eob
description. 8e merely inter1ie)ed the applicants and informed them of the reH"irements for deployment b"t he ne1er recei1ed money from
them. Their payments )ere recei1ed by the aency:s cashier, +osephine On. 9"rthermore, he performed his tas2s "nder the s"per1ision of
its president and manain director.
EFECUTI6E SECRETARY v. CA
G.R. No. 131519. M#2 49, 488+
CALLE!O, SR., !.
"#$ts%
Rep"blic Act 3o. -<42, other)ise 2no)n as the Mirant 6or2ers and O1erseas 9ilipinos Act of 1,,/, too2 effect on +"ly 1/, 1,,/. The
Omnib"s R"les and Re"lations $mplementin the Mirant 6or2ers and O1erseas 9ilipino Act of 1,,/ )as, thereafter, p"blished in the April
7, 1,,* iss"e of the Manila !"lletin. 8o)e1er, e1en before the la) too2 effect, the Asian Recr"itment Co"ncil ;hilippine Chapter, $nc.
&ARCO(;hil.' filed, on +"ly 17, 1,,/, a petition for declaratory relief "nder R"le *. of the R"les of Co"rt )ith the Reional Trial Co"rt of
R"eCon City to declare as "nconstit"tional 5ection 2, pararaph &', 5ection *, pararaphs &a' to &E', &l' and &m', 5ection 7, pararaphs &a'
and &b', and 5ections , and 1< of the la), )ith a plea for the iss"ance of a temporary restrainin order and=or )rit of preliminary inE"nction
enEoinin the respondents therein from enforcin the assailed pro1isions of the la).
The ARCO(;hil. alleed that Rep. Act 3o. -<42 )as self(e@ec"tory and that no implementin r"les )ere needed. $t prayed that the co"rt
iss"e a temporary restrainin order to enEoin the enforcement of 5ection *, pararaphs &a' to &m' on illeal recr"itment, 5ection 7 on
penalties for illeal recr"itment, and 5ection , on 1en"e of criminal actions for illeal recr"itments.
The trial co"rt iss"ed a temporary restrainin order. After the petitioners filed their comment on the petition, the ARCO(;hil. filed an
amended petition, the amendments consistin in the incl"sion in the caption thereof 11 other corporations )hich it alleed )ere its members
and )hich it represented in the s"it, and a plea for a temporary restrainin order enEoinin the respondents from enforcin 5ection *
s"bsection &i', 5ection * s"bsection &2' and pararaphs 1/ and 1* thereof, 5ection -, 5ection 1<, pararaphs 1 and 2, and 5ections 11 and
4< of Rep. Act 3o. -<42. The respondent ARCO(;hil. assailed 5ection 2&' and &i', 5ection * s"bsection &a' to &m', 5ection 7&a' to &b', and
5ection 1< pararaphs &1' and &2'.
/2
&see 5ecs. * to 11'
The respondent a1erred that s"ch pro1isions of Rep. Act 3o. -<42 1iolate 5ection 1, Article $$$ of the Constit"tion. Accordin to the
respondent, 5ection *&' and &i' discriminated aainst "ns2illed )or2ers and their families and, as s"ch, 1iolated the eH"al protection cla"se,
as )ell as Article $$, 5ection 12 and Article QD, 5ections 1 and .&.' of the Constit"tion. As the la) enco"raed the deployment of s2illed
9ilipino )or2ers, only o1erseas s2illed )or2ers are ranted rihts. The respondent stressed that "ns2illed )or2ers also ha1e the riht to see2
employment abroad. Accordin to the respondent, the riht of "ns2illed )or2ers to d"e process is 1iolated beca"se they are pre1ented from
findin employment and earnin a li1in abroad. $t cannot be ar"ed that s2illed )or2ers are imm"ne from ab"ses by employers, )hile
"ns2illed )or2ers are merely prone to s"ch ab"ses. $t )as pointed o"t that both s2illed and "ns2illed )or2ers are s"bEected to ab"ses by
forein employers. 9"rthermore, the prohibition of the deployment of "ns2illed )or2ers abroad )o"ld only enco"rae fly(by(niht illeal
recr"iters.
Accordin to the respondent, the rant of incenti1es to ser1ice contractors and mannin aencies to the e@cl"sion of all other licensed and
a"thoriCed recr"iters is an in1alid classification. 4icensed and a"thoriCed recr"iters are th"s depri1ed of their riht to property and d"e
process and to the 7eH"ality of the person.> $t is "nderstandable for the la) to prohibit illeal recr"iters, b"t to discriminate aainst licensed
and reistered recr"iters is "nconstit"tional.
The respondent, li2e)ise, alleed that 5ection *, s"bsections &a' to &m' is "nconstit"tional beca"se licensed and a"thoriCed recr"itment
aencies are placed on eH"al footin )ith illeal recr"iters. $t contended that )hile the 4abor Code distin"ished bet)een recr"iters )ho are
holders of licenses and non(holders thereof in the imposition of penalties, Rep. Act 3o. -<42 does not ma2e any distinction. The penalties in
5ection 7&a' and &b' bein based on an in1alid classification are, therefore, rep"nant to the eH"al protection cla"se, besides bein
e@cessi1e0 hence, s"ch penalties are 1iolati1e of 5ection 1,&1', Article $$$ of the Constit"tion. $t )as also pointed o"t that the penalty for
officers=officials=employees of recr"itment aencies )ho are fo"nd "ilty of economic sabotae or lare(scale illeal recr"itment "nder Rep.
Act 3o. -<42 is life imprisonment. 5ince recr"itment aencies "s"ally operate )ith a manpo)er of more than three persons, s"ch aencies
are forced to sh"t do)n, lest their officers and=or employees be chared )ith lare scale illeal recr"itment or economic sabotae and
sentenced to life imprisonment. Th"s, the penalty imposed by la), bein disproportionate to the prohibited acts, disco"raes the b"siness of
licensed and reistered recr"itment aencies.
The respondent also posited that 5ection *&m' and pararaphs &1/' and &1*', 5ections -, , and 1<, pararaph 2 of the la) 1iolate 5ection
22, Article $$$ of the Constit"tion prohibitin e@(post facto la)s and bills of attainder. This is beca"se the pro1isions pres"me that a licensed
and reistered recr"itment aency is "ilty of illeal recr"itment in1ol1in economic sabotae, "pon a findin that it committed any of the
prohibited acts "nder the la). 9"rthermore, officials, employees and their relati1es are pres"med "ilty of illeal recr"itment in1ol1in
economic sabotae "pon s"ch findin that they committed any of the said prohibited acts.
Issu&%
6O3 )hether or not the trial co"rt committed ra1e ab"se of its discretion amo"ntin to e@cess or lac2 of E"risdiction in iss"in the
assailed order and the )rit of preliminary inE"nction on a bond of only;/<,<<< and )hether or not the appellate co"rt erred in affirmin the
trial co"rt:s order and the )rit of preliminary inE"nction iss"ed by it
H&'(%
The 1alidity of 5ection * of R.A. 3o. -<42 )hich pro1ides that employees of recr"itment aencies may be criminally liable for illeal
recr"itment has been "pheld in +eople v. #howd!ry%
7As stated in the first sentence of 5ection * of RA -<42, the persons )ho may be held liable for illeal recr"itment are the principals,
accomplices and accessories. An employee of a company or corporation enaed in illeal recr"itment may be held liable as principal,
toether )ith his employer, if it is sho)n that he acti1ely and conscio"sly participated in illeal recr"itment. $t has been held that the
e@istence of the corporate entity does not shield from prosec"tion the corporate aent )ho 2no)inly and intentionally ca"ses the
corporation to commit a crime. The corporation ob1io"sly acts, and can act, only by and thro"h its h"man aents, and it is their cond"ct
)hich the la) m"st deter. The employee or aent of a corporation enaed in "nla)f"l b"siness nat"rally aids and abets in the carryin on of
s"ch b"siness and )ill be prosec"ted as principal if, )ith 2no)lede of the b"siness, its p"rpose and effect, he conscio"sly contrib"tes his
efforts to its cond"ct and promotion, ho)e1er sliht his contrib"tion may be.>
To be entitled to a preliminary inE"nction to enEoin the enforcement of a la) assailed to be "nconstit"tional, the party m"st establish that it
)ill s"ffer irreparable harm in the absence of inE"ncti1e relief and m"st demonstrate that it is li2ely to s"cceed on the merits, or that there are
s"fficiently serio"s H"estions oin to the merits and the balance of hardships tips decidedly in its fa1or.
/.
The possibility that the officers and employees of the recr"itment aencies, )hich are members of the respondent, and their relati1es )ho
are employed in the o1ernment aencies chared in the enforcement of the la), )o"ld be indicted for illeal recr"itment and, if con1icted
sentenced to life imprisonment for lare scale illeal recr"itment, absent proof of irreparable inE"ry, is not s"fficient on )hich to base the
iss"ance of a )rit of preliminary inE"nction to s"spend the enforcement of the penal pro1isions of Rep. Act 3o. -<42 and a1ert any
indictments "nder the la). The normal co"rse of criminal prosec"tions cannot be bloc2ed on the basis of alleations )hich amo"nt to
spec"lations abo"t the f"t"re.
There is no alleation in the amended petition or e1idence add"ced by the respondent that the officers and=or employees of its members
had been threatened )ith any indictments for 1iolations of the penal pro1isions of Rep. Act 3o. -<42. 3either is there any alleation therein
that any of its members and=or their officers and employees committed any of the acts en"merated in 5ection *&a' to &m' of the la) for )hich
they co"ld be indicted. 3either did the respondent add"ce any e1idence in the RTC that any or all of its members or a reat n"mber of other
d"ly licensed and reistered recr"itment aencies had to stop their b"siness operations beca"se of fear of indictments "nder 5ections * and
7 of Rep. Act 3o. -<42. The respondent merely spec"lated and s"rmised that licensed and reistered recr"itment aencies )o"ld close
shop and stop b"siness operations beca"se of the assailed penal pro1isions of the la). A )rit of preliminary inE"nction to enEoin the
enforcement of penal la)s cannot be based on s"ch conEect"res or spec"lations. The Co"rt cannot ta2e E"dicial notice that the processin of
deployment papers of o1erseas )or2ers ha1e come to a 1irt"al standstill at the ;OEA beca"se of the assailed pro1isions of Rep. Act 3o.
-<42. The respondent m"st add"ce e1idence to pro1e its alleation, and the petitioners accorded a chance to add"ce contro1ertin
e1idence.
The respondent e1en failed to add"ce any e1idence to pro1e irreparable inE"ry beca"se of the enforcement of 5ection 1<&1'&2' of Rep. Act
3o. -<42. $ts fear or apprehension that, beca"se of time constraints, its members )o"ld ha1e to defend forein employees in cases before
the 4abor Arbiter is based on spec"lations. E1en if tr"e, s"ch incon1enience or diffic"lty is hardly irreparable inE"ry.
EOLE v. TURDA
G.R. Nos. 958++7+6. !u'2 6, 199+
BELLOSILLO, !.
"#$ts%
#E3ER TFR?A alias 7!oy> &a.2.a. #"adal"pe T"rda, +r.' toether )ith his )ife Milaros T"rda and Carmen Manera, )as chared )ith
illeal recr"itment and 2 co"nts of estafa. 8o)e1er, Milaros T"rda and Carmen Manera )ere ne1er apprehended so that only #ener T"rda
co"ld be arrained and tried.
$n the first )ee2 of A""st 1,-*, appellant #ener T"rda, his )ife Milaros T"rda nic2named 7Mila,> and Carmen Manera )ent to the ho"se
of complainant 9lorante Rosales at 2- $locos 5"r 5t., !ao !antay, R"eCon City, to con1ince his family that the former co"ld sec"re an
o1erseas Eob for 9lorante in $taly and another for his sister 5hirley Cabal" in 9rance for a fee. 9lorante and 5hirley accepted the offer and
their father, Roberto Rosales, paid ;7<,<<<.<< for both. 8o)e1er, he did not as2 for a receipt beca"se of his tr"st in appellant and his )ife
)ho )ere 5hirley:s 7compadre> and 7comadre> for the 17 years.
The spo"ses #ener and Mila, toether )ith Carmen Manera, bro"ht 9lorante and 5hirley to the airport for their s"pposed depart"re for
abroad at fi1e o:cloc2 that afternoon. The T"rdas "sed their Dol2s)aen in brinin their 2 7recr"its> to the airport for the c"stomary 7send(
off.> After a lon )ait, appellant and his co(acc"sed told 9lorante and 5hirley that their passports had not been released and that their
depart"re had to be resched"led, )ith the ass"rance ho)e1er that they co"ld lea1e as soon as their papers )ere released.
?espite se1eral promises, 9lorante and 5hirley )ere still "nable to lea1e. They 1isited the T"rdas se1eral times at their ho"se b"t the
former )ere i1en more promises instead. 9lorante e1en )ent to the aency of acc"sed Carmen Manera, the $nternational 9riendship and
#eneral 5er1ices, at Mabini 5t., Ermita, Manila, b"t )as "nable to tal2 to her beca"se at that time there )ere many applicants inside the
office. Complainant and his sister finally demanded the ret"rn of their money, b"t the T"rdas failed to i1e their money bac2. ConseH"ently,
9lorante Rosales )ent to the Office of the City 9iscal of R"eCon City to file the correspondin complaint.
5ometime before 5eptember 1,-7, another complainant, Celina Andan, learned that her application for an immirant 1isa )ith the
Canadian Embassy )as denied. 6hile her application )as pendin, Celina:s mother, Milaros Andan, )as pers"aded by Milaros T"rda to
entr"st to her the processin of Celina:s papers since she &Milaros T"rda' had already been abroad and had one thro"h the application
process pre1io"sly. The Andans and the T"rdas had 2no)n each other for more than 1< years as their stores )hich sold rice and 4;#,
respecti1ely, )ere near each other.
/4
After the denial of Celina Andan:s application, #ener and Mila "ndertoo2 the processin of Celina:s tra1el papers for )hich they )ere
i1en a do)npayment of ;2/,<<<.<< )ith the promise to ref"nd the amo"nt if she )o"ld not be able to lea1e for Canada )ithin 4/ days.
8o)e1er, sho"ld they s"cceed, Celina )o"ld ha1e to pay them an additional amo"nt of ;./,<<<.<< "pon deli1ery to her of her 1isa.
On 14 5eptember 1,-7, the mother of Celina a1e a chec2 in her store for ;14,/<<.<< and cash of ;/<<.<< to Mila T"rda for )hich the
latter a1e a receipt in the presence of appellant #ener. On 22 5eptember 1,-7, Celina:s mother aain a1e a chec2 to the T"rdas in the
amo"nt of ;1<,<<<.<< for )hich a receipt )as li2e)ise iss"ed by Milaros T"rda.
After 4/ days, Celina Andan )as still "nable to lea1e for abroad. 5he )ent )ith her mother to the ho"se of the T"rdas )here they only met
appellant. They )ere told that Mila )ent some)here. Celina )anted to et her passport and money bac2 beca"se nothin happened to her
1isa application, b"t appellant told her that he )o"ld E"st relay the messae to his )ife. Celina ret"rned the follo)in day only to be told by
the spo"ses that her passport had been sent to her mother:s store and that their do)npayment of ;2/,<<<.<< co"ld be )ithdra)n from the
person to )hom they &T"rdas' a1e it. Celina )ent bac2 to the ho"se of appellant b"t she ne1er s"cceeded in tal2in to the spo"ses. They
)ere al)ays o"t. 8ence, she decided to chare the T"rda spo"ses )ith estafa and illeal recr"itment.
Issu&%
H&'(%
The pertinent portions of Art. .- of the 4abor Code, as amended by ;.?. 3o. 2<1-, read K
7Art. .-. Illegal recr!itment. K &a' Any recr"itment acti1ities, incl"din the prohibited practices en"merated "nder Article .4 of this Code, to
be "nderta2en by non(licensees or non(holders of a"thority shall be deemed illeal and p"nishable "nder Article ., of this code. The Ministry
of 4abor and Employment or any la) enforcement officer may initiate complaints "nder this Article.
hereof. $lleal recr"itment is deemed committed in lare scale if committed aainst three &.' or more persons indi1id"ally or as a ro"p.>
Article 1., par. &b', of the same Code defines ,&$,u)t0&*t as 7any act of can1assin, enlistin, contractin, transportin, "tiliCin, hirin or
proc"rin )or2ers, and incl"des referrals, contract ser1ices, promisin or ad1ertisin for employment, locally or abroad, )hether for profit or
not0 pro1ided, that any person or entity )hich, in any manner, offers or promises for a fee employment to t)o or more persons shall be
deemed enaed in recr"itment and placement.>
Appellant, his )ife, and Manera )ere conspirators in the illeal recr"itment b"siness by contrib"tin acts in p"rs"ance of the financial
s"ccess of their Eoint 1ent"re for their m"t"al benefit. All the complainants ha1e testified that in e1ery recr"itment transaction, appellant )as
al)ays present )ith the other acc"sed. 6ith respect to the recr"itment of Rosales and 5hirley Cabal", both testified that the three &.'
acc"sed )ent to their ho"se to ind"ce them to apply for o1erseas )or2 for a fee, and that appellant )as li2e)ise aro"nd )hen the amo"nt of
;7<,<<<.<< )as H"oted by the other acc"sed as the recr"itment ser1ice fee. 9or her part, complainant Celina Andan cateorically testified
that appellant and his )ife )ere toether )hen the latter )as paid the do)npayment in chec2 for her trip to Canada. Celina f"rther asserted
that the T"rdas )ere al)ays toether in their recr"itment transactions0 in fact, all the complainants confirmed that appellant e1en dro1e them
to the airport for the s"pposed trip abroad not only once b"t thrice.
The recr"itment of persons for o1erseas employment )itho"t the necessary recr"itin permit or a"thority from the ;OEA constit"tes illeal
recr"itment0 ho)e1er, )here some other crimes or felonies are committed in the process, con1iction "nder the 4abor Code does not precl"de
p"nishment "nder other stat"tes.
EOLE v. ROMERO
G.R. Nos. 183389788. !u'2 46, 1993
NOCON, !.
"#$ts%
//
5ometime in +an"ary of 1,-,, complainant ?oriCa ?apnit )ent to the residence of acc"sed(appellant Elma Romero at Esteban 5treet,
Mandal"yon, Metro(Manila accompanied by #enalie Cr"C, a co"sin of acc"sed(appellant. At s"ch meetin, complainant ?oriCa ?apnit told
acc"sed(appellant of her desire to )or2 abroad and the latter informed her that she can )or2 in Tai)an as a factory )or2er )ith a monthly
salary of F5M/,<<<.<<.
Thereafter, complainant ?oriCa ?apnit, relyin "pon the representation of the acc"sed(appellant that she can lea1e on April 1, 1,-, for
Tai)an as a factory )or2er, paid the placement fee chared by the latter as e1idenced by the receipts iss"ed by the acc"sed(appellant
totalin ;21,<<<.<< )hich )ere paid as follo)s% ;.,<<<.<< on +an"ary 24, 1,-,, ;1/,<<<.<< on 9ebr"ary 4, 1,-, and ;.,<<<.<< on
9ebr"ary 27, 1,-,. Complainant ?oriCa ?apnit also paid acc"sed(appellant the amo"nt of ;1,-<<.<< for the processin of her passport
)hich is not incl"ded in her claim as she )as iss"ed a passport.
6hen complainant ?oriCa ?apnit )as not able to lea1e on April 1, 1,-, for Tai)an, acc"sed(appellant told her, to )ait as her 1isa )as not
yet iss"ed. 8o)e1er, after spendin more than 2 months f"tilely follo)in "p her 1isa )ith the acc"sed(appellant, complainant ?oriCa ?apnit
)ent to the office of the ;hilippine O1erseas Employment Administration &;OEA' and fo"nd o"t that acc"sed(appellant is not a licensed
recr"iter as sho)n by the Certification iss"ed by the ;OEA.
Complainant ?oriCa ?apnit e@ec"ted an affida1it at the office of the ;OEA charin acc"sed(appellant for illeal recr"itment and=or estafa.
Complainant !ernardo 5alaCar testified that sometime in the middle of +an"ary 1,-,, he )ent to R5$ Enterprises located at 5ha)
!o"le1ard, Mandal"yon, Metro(Manila and met acc"sed(appellant )here he applied for a Eob in Tai)an. ?"rin said meetin, acc"sed(
appellant promised complainant !ernardo 5alaCar that he can lea1e for Tai)an on April 1, 1,-, as a factory )or2er )ith a monthly salary of
F5M*<<.<< as soon as he paid the placement fee.
After payin acc"sed(appellant the amo"nt of ;24,<<<.<< as placement fee )hich )ere e1idenced by the / receipts iss"ed by acc"sed(
appellant, complainant !ernardo 5alaCar )as not able to lea1e on April 1, 1,-, and acc"sed(appellant told him that his depart"re )as
delayed beca"se she is still )aitin for the iss"ance of his 1isa.
6hen acc"sed(appellant failed to send complainant !ernardo 5alaCar to Tai)an, the latter )ent to the Anti(illeal Recr"itment !ranch of
the ;OEA on +"ne .<, 1,-, and e@ec"ted an affida1it charin acc"sed(appellant for illeal recr"itment and=or estafa.
Issu&%
6O3 appellant is "ilty of illeal recr"itment and estafa
H&'(%
The elements of estafa in eneral are% &1' that the acc"sed defra"ded another &a' by ab"se of confidence, or &b' by means of deceit0 and
&2' that damae or preE"dice capable of pec"niary estimation is ca"sed to the offended party or third person.
$n the instant case, all the elements of estafa are present beca"se complainant ?oriCa ?apnit a1e the total amo"nt of ;21,<<<.<< to
acc"sed(appellant on the latter:s promise that she )ill be sent to Tai)an as a factory )or2er as soon as she paid the placement fee. $t )ill be
obser1ed that acc"sed(appellant a1e complainant the distinct impression that she had the po)er or ability to send people abroad for )or2
so that complainant )as con1inced to i1e her the money she demanded to enable her to be employed as a factory )or2er in Tai)an.
The contention of the acc"sed(appellant that she cannot be con1icted of lare(scale illeal recr"itment )hich reH"ires at least . persons to
be 1ictimiCed considerin that only one 1ictim testified aainst her )hile the other t)o complainants e@ec"ted a Eoint affida1it of desistance
)hich res"lted in the dismissal of their complaints aainst her is )itho"t merit.
The fact that complainants !ernardo 5alaCar and Richard R"illope e@ec"ted a +oint Affida1it of ?esistance does not ser1e to e@c"lpate
acc"sed(appellant from criminal liability insofar as the case for illeal recr"itment is concerned since the Co"rt loo2s )ith disfa1or the
droppin of criminal complaints "pon mere affida1it of desistance of the complainant, partic"larly )here the commission of the offense, as is
in this case, is d"ly s"pported by doc"mentary e1idence.
the Co"rt attaches no pers"asi1e 1al"e to affida1its of desistance, especially )hen it is e@ec"ted as an aftertho"ht. $t )o"ld be a
danero"s r"le for co"rts to reEect testimonies solemnly ta2en before the co"rts of E"stice simply beca"se the )itnesses )ho had i1en them,
later on, chaned their mind for one reason or another0 for s"ch r"le )o"ld ma2e solemn trial a moc2ery and place the in1estiation of tr"th
at the mercy of "nscr"p"lo"s )itness.
/*
7Art. 2<.4. There may be a compromise "pon the ci1il liability arisin from an offense0 b"t s"ch compromise shall not e@tin"ish the p"blic
action for the imposition of the leal penalty.>
ACI"IC CONSULTANTS INTERNATIONAL ASIA, INC. v. SCHON"ELD
G.R. No. 166948. "&1,u#,2 19, 4885
CALLE!O, SR., !.
"#$ts%
Respondent is a Canadian citiCen and )as a resident of 3e) 6estminster, !ritish Col"mbia, Canada. 8e had been a cons"ltant in the
field of en1ironmental enineerin and )ater s"pply and sanitation. ;acicon ;hilippines, $nc. &;;$' is a corporation d"ly established and
incorporated in accordance )ith the la)s of the ;hilippines. The primary p"rpose of ;;$ )as to enae in the b"siness of pro1idin specialty
and technical ser1ices both in and o"t of the ;hilippines. $t is a s"bsidiary of ;acific Cons"ltants $nternational of +apan &;C$+'. The president
of ;;$, +ens ;eter 8enrichsen, )ho )as also the director of ;C$+, )as based in To2yo, +apan. 8enrichsen comm"ted from +apan to Manila
and 1ice 1ersa, as )ell as in other co"ntries )here ;C$+ had b"siness.
$n 1,,7, ;C$+ decided to enae in cons"ltancy ser1ices for )ater and sanitation in the ;hilippines. $n October 1,,7, respondent )as
employed by ;C$+, thro"h 8enrichsen, as 5ector Manaer of ;;$ in its 6ater and 5anitation ?epartment. 8o)e1er, ;C$+ assined him as
;;$ sector manaer in the ;hilippines. 8is salary )as to be paid partly by ;;$ and ;C$+.
Respondent arri1ed in the ;hilippines and ass"med his position as ;;$ 5ector Manaer. 8e )as accorded the stat"s of a resident alien.
As reH"ired by R"le Q$D &Employment of Aliens' of the Omnib"s R"les $mplementin the 4abor Code, ;;$ applied for an Alien
Employment ;ermit &;ermit' for respondent before the ?epartment of 4abor and Employment &?O4E'. $t appended respondent:s contract of
employment to the application. The ?O4E ranted the application and iss"ed the ;ermit to respondent.
Respondent recei1ed his compensation from ;;$ for the follo)in periods% 9ebr"ary to +"ne 1,,-, 3o1ember to ?ecember 1,,-, and
+an"ary to A""st 1,,,. 8e )as also reimb"rsed by ;;$ for the e@penses he inc"rred in connection )ith his )or2 as sector manaer. 8e
reported for )or2 in Manila e@cept for occasional assinments abroad, and recei1ed instr"ctions from 8enrichsen.
On May /, 1,,,, respondent recei1ed a letter from 8enrichsen informin him that his employment had been terminated effecti1e A""st 4,
1,,, for the reason that ;C$+ and ;;$ had not been s"ccessf"l in the )ater and sanitation sector in the ;hilippines. 8o)e1er, on +"ly 24,
1,,,, 8enrichsen, by electronic mail, reH"ested respondent to stay p"t in his Eob after A""st /, 1,,,, "ntil s"ch time that he )o"ld be able
to report on certain proEects and disc"ss all the opport"nities he had de1eloped. Respondent contin"ed his )or2 )ith ;;$ "ntil the end of
b"siness ho"rs on October 1, 1,,,.
Respondent filed )ith ;;$ se1eral money claims, incl"din "npaid salary, lea1e pay, air fare from Manila to Canada, and cost of shipment
of oods to Canada. ;;$ partially settled some of his claims &F5M/,*./.,,', b"t ref"sed to pay the rest.
On ?ecember /, 2<<<, respondent filed a Complaint for $lleal ?ismissal aainst petitioners ;;$ and 8enrichsen )ith the 4abor Arbiter.
$n his Complaint, respondent alleed that he )as illeally dismissed0 ;;$ had not notified the ?O4E of its decision to close one of its
departments, )hich res"lted in his dismissal0 and they failed to notify him that his employment )as terminated after A""st 4, 1,,,.
Respondent also claimed for separation pay and other "npaid benefits.
Issu&%
6O3 an employment relationship e@isted bet)een petitioners and employment relationship e@isted bet)een petitioners and respondent0
6O3 the 4abor Arbiter a H"o has E"risdiction o1er respondent:s claim
H&'(%
The 4abor Arbiter and the 34RC inored the doc"mentary e1idence )hich respondent appended to his pleadins sho)in that he )as an
employee of petitioner ;;$0 they merely foc"sed on the +an"ary 7, 1,,- letter of employment and 5ection 21 of the #eneral Conditions of
Employment.
/7
;etitioner ;;$ applied for the iss"ance of an AE; to respondent before the ?O4E. $n said application, ;;$ a1erred that respondent is its
employee. To sho) that this )as the case, ;;$ appended a copy of respondent:s employment contract. The ?O4E then ranted the
application of ;;$ and iss"ed the permit.
Fnder the Omnib"s R"les $mplementin the 4abor Code, one of the reH"irements for the iss"ance of an employment permit is the
employment contract. 5ection /, R"le Q$D &Employment of Aliens' of the Omnib"s R"les pro1ides%
75ECT$O3 1. Co1erae. G This r"le shall apply to all aliens employed or see2in employment in the ;hilippines and the present or
prospecti1e employers.
75ECT$O3 2. 5"bmission of list. G All employers employin forein nationals, )hether resident or non(resident, shall s"bmit a list of
nationals to the !"rea" indicatin their names, citiCenship, forein and local address, nat"re of employment and stat"s of stay in the
;hilippines.
75ECT$O3 .. Reistration of resident aliens. G All employed resident aliens shall reister )ith the !"rea" "nder s"ch "idelines as may be
iss"ed by it.
75ECT$O3 4. Employment permit reH"ired for entry. G 3o alien see2in employment, )hether as a resident or non(resident, may enter the
;hilippines )itho"t first sec"rin an employment permit from the Ministry. $f an alien enters the co"ntry "nder a non()or2in 1isa and )ishes
to be employed thereafter, he may only be allo)ed to be employed "pon presentation of a d"ly appro1ed employment permit.
75ECT$O3 /. ReH"irements for employment permit applicants. G The application for an employment permit shall be accompanied by the
follo)in%
a. C"rric"l"m 1itae d"ly sined by the applicant indicatin his ed"cational bac2ro"nd, his )or2 e@perience and other data sho)in
that he possesses technical s2ills in his trade or profession.
b. Contract of employment bet)een the employer and the principal )hich shall embody the follo)in, amon others%
1. That the non(resident alien )or2er shall comply )ith all applicable la)s and r"les and re"lations of the ;hilippines0
2. That the non(resident alien )or2er and the employer shall bind themsel1es to train at least t)o &2' 9ilipino "nderst"dies for a
period to be determined by the Minister0 and
.. That he shall not enae in any ainf"l employment other than that for )hich he )as iss"ed a permit.
c. A desination by the employer of at least t)o &2' "nderst"dies for e1ery alien )or2er. 5"ch "nderst"dies m"st be the most ran2in
re"lar employees in the section or department for )hich the e@patriates are bein hired to ins"re the act"al transfer of technoloy.
Fnder 5ection * of the R"le, the ?O4E may iss"e an alien employment permit based only on the follo)in%
a. Compliance by the applicant and his employer )ith the reH"irements of 5ection 2 hereof0
b. Report of the !"rea" ?irector as to the a1ailability or non(a1ailability of any person in the ;hilippines )ho is competent and )illin
to do the Eob for )hich the ser1ices of the applicant are desired0
c. 8is assessment as to )hether or not the employment of the applicant )ill redo"nd to the national interest0
d. Admissibility of the alien as certified by the Commission on $mmiration and ?eportation0
e. The recommendation of the !oard of $n1estments or other appropriate o1ernment aencies if the applicant )ill be employed in
preferred areas of in1estments or in accordance )ith the imperati1e of economic de1elopment.
Th"s, as claimed by respondent, he had an employment contract )ith petitioner ;;$0 other)ise, petitioner ;;$ )o"ld not ha1e filed an
application for a ;ermit )ith the ?O4E. ;etitioners are th"s estopped from allein that the ;C$+, not petitioner ;;$, had been the employer
of respondent all alon.
There )as an employer(employee relationship bet)een petitioner ;;$ and respondent "sin the fo"r(fold test. +"rispr"dence is firmly
settled that )hene1er the e@istence of an employment relationship is in disp"te, fo"r elements constit"te the reliable yardstic2% &a' the
selection and enaement of the employee0 &b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to control
the employee:s cond"ct. $t is the so(called 7control test> )hich constit"tes the most important inde@ of the e@istence of the employer(
employee relationshipGthat is, )hether the employer controls or has reser1ed the riht to control the employee not only as to the res"lt of the
)or2 to be done b"t also as to the means and methods by )hich the same is to be accomplished. 5tated other)ise, an employer(employee
relationship e@ists )here the person for )hom the ser1ices are performed reser1es the riht to control not only the end to be achie1ed b"t
also the means to be "sed in reachin s"ch end.
/-
$n the case at bar, the po)er to control and s"per1ise petitioner:s )or2 performance de1ol1ed "pon the respondent company. 4i2e)ise,
the po)er to terminate the employment relationship )as e@ercised by the ;resident of the respondent company. $t is not the letterhead "sed
by the company in the termination letter )hich controls, b"t the person )ho e@ercised the po)er to terminate the employee. $t is also
inconseH"ential if the second letter of employment e@ec"ted in the ;hilippines )as not sined by the petitioner. An employer(employee
relationship may indeed e@ist e1en in the absence of a )ritten contract, so lon as the fo"r elements mentioned in the Mafinco case are all
present.
$f the intention of the parties )ere to restrict 1en"e, there m"st be accompanyin lan"ae clearly and cateorically e@pressin their
p"rpose and desin that actions bet)een them be litiated only at the place named by them. $n the instant case, no restricti1e )ords li2e
7only,> 7solely,> 7e@cl"si1ely in this co"rt,> 7in no other co"rt sa1e K,> 7partic"larly,> 7no)here else b"t=e@cept K,> or )ords of eH"al import
)ere stated in the contract. $t cannot be said that the co"rt of arbitration in 4ondon is an e@cl"si1e 1en"e to brin forth any complaint arisin
o"t of the employment contract.
;etitioners: insistence on the application of the principle of for"m non con1eniens m"st be reEected. The bare fact that respondent is a
Canadian citiCen and )as a repatriate does not )arrant the application of the principle for the follo)in reasons%
1. The 4abor Code of the ;hilippines does not incl"de for"m non con1eniens as a ro"nd for the dismissal of the complaint.
2. The propriety of dismissin a case based on this principle reH"ires a fact"al determination0 hence, it is properly considered as
defense.
.. $n 8an$ of /merica, *)9S/, !an2 of America $nternational, 4td. 1. Co"rt of Appeals, this Co"rt held that%
7;hilippine Co"rt may ass"me E"risdiction o1er the case if it chooses to do so0 pro1ided, that the follo)in reH"isites are met% &1' that the
;hilippine Co"rt is one to )hich the parties may con1eniently resort to0 &2' that the ;hilippine Co"rt is in a position to ma2e an intellient
decision as to the la) and the facts0 and, &.' that the ;hilippine Co"rt has or is li2ely to ha1e po)er to enforce its decision>
SERRANO v. G#''#*t MARITIME SER6ICES, INC.
G.R. No. 16561+. M#,$. 4+, 4889
AUSTRIA7MARTINE;, !.
"#$ts%
;etitioner )as hired by #allant Maritime 5er1ices, $nc. and Marlo) 3a1iation Co., 4td. &respondents' "nder a ;hilippine O1erseas
Employment Administration &;OEA'(appro1ed Contract of Employment.
On March 1,, 1,,-, the date of his depart"re, petitioner )as constrained to accept a do)nraded employment contract for the position of
5econd Officer )ith a monthly salary of F5M1,<<<.<<, "pon the ass"rance and representation of respondents that he )o"ld be made Chief
Officer by the end of April 1,,-.
Respondents did not deli1er on their promise to ma2e petitioner Chief Officer. 8ence, petitioner ref"sed to stay on as 5econd Officer and
)as repatriated to the ;hilippines on May 2*, 1,,-.
;etitioner:s employment contract )as for a period of 12 months or from March 1,, 1,,- "p to March 1,, 1,,,, b"t at the time of his
repatriation on May 2*, 1,,-, he had ser1ed only 2 months and 7 days of his contract, lea1in an "ne@pired portion of , months and 2.
days.
;etitioner filed )ith the 4abor Arbiter &4A' a Complaint aainst respondents for constr"cti1e dismissal and for payment of his money claims
in the total amo"nt of F5M2*,442.7..
Issu&%
6O3 5ec. 1< of R.A. -<42 1iolates 5ection 1, Article $$$ of the Constit"tion, and 5ection 1-, Article $$ and 5ection ., Article Q$$$ on labor as
a protected sector
H&'(%
Bes. $n 'arsaman 'anning /gency, Inc. v. *ational Labor Relations #ommission
7,
&5econd ?i1ision, 1,,,' that the Co"rt laid do)n the
follo)in r"les on the application of the periods prescribed "nder 5ection 1<&/' of R.A. 3o. -<4, to )it%
/,
A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract
worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (! months" salary for every year of
the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one
(1! year or more. #his is evident from the words $for every year of the unexpired term% which follows the words $salaries x x x for
three months.% To follo) petitioners: thin2in that pri1ate respondent is entitled to . months salary only simply beca"se it is the lesser
amo"nt is to completely disreard and o1erloo2 some )ords "sed in the stat"te )hile i1in effect to some. This is contrary to the )ell(
established r"le in leal hermene"tics that in interpretin a stat"te, care sho"ld be ta2en that e1ery part or )ord thereof be i1en effect since
the la)(ma2in body is pres"med to 2no) the meanin of the )ords employed in the stat"e and to ha1e "sed them ad1isedly. :t res magis
valeat &!am pereat.
Fnder 5ection 1< of R.A. 3o. -<42, a )or2er dismissed from o1erseas employment )itho"t E"st, 1alid or a"thoriCed ca"se is entitled to his
salary for the "ne@pired portion of his employment contract or for . months for e1ery year of the "ne@pired term, )hiche1er is less.
$n the case at bar, the "ne@pired portion of pri1ate respondent:s employment contract is - months. ;ri1ate respondent sho"ld therefore be
paid his basic salary correspondin to . months or a total of 5R.,*<<.
5ec. 1< of R.A. -<42 classifies O96s into t)o cateories. The first cateory incl"des O96s )ith fi@ed(period employment contracts of
less than one year0 in case of illeal dismissal, they are entitled to their salaries for the entire "ne@pired portion of their contract. The second
cateory consists of O96s )ith fi@ed(period employment contracts of one year or more0 in case of illeal dismissal, they are entitled to
monetary a)ard eH"i1alent to only . months of the "ne@pired portion of their contracts.
The disparity in the treatment of these t)o ro"ps cannot be disco"nted. $n S$ippers, the respondent O96 )or2ed for only 2 months o"t
of his *(month contract, b"t )as a)arded his salaries for the remainin 4 months. $n contrast, the respondent O96s
in riental and +#L )ho had also )or2ed for abo"t 2 months o"t of their 12(month contracts )ere a)arded their salaries for only . months
of the "ne@pired portion of their contracts. E1en the O96s in1ol1ed in )alidano and :nivan )ho had )or2ed for a loner period of . months
o"t of their 12(month contracts before bein illeally dismissed )ere a)arded their salaries for only . months.
$t is plain that prior to R.A. 3o. -<42, all O96s, reardless of contract periods or the "ne@pired portions thereof, )ere treated ali2e in
terms of the comp"tation of their monetary benefits in case of illeal dismissal. Their claims )ere s"bEected to a "niform r"le of comp"tation%
their basic salaries m"ltiplied by the entire "ne@pired portion of their employment contracts.
The enactment of the s"bEect cla"se in R.A. 3o. -<42 introd"ced a differentiated r"le of comp"tation of the money claims of illeally
dismissed O96s based on their employment periods, in the process singling out one cateory )hose contracts ha1e an "ne@pired portion
of one year or more and s"bEectin them to the pec"liar disad1antae of ha1in their monetary a)ards limited to their salaries for . months
or for the "ne@pired portion thereof, )hiche1er is less, b"t all the )hile sparin the other cateory from s"ch preE"dice, simply beca"se the
latter:s "ne@pired contracts fall short of one year.
The Co"rt notes that the s"bEect cla"se 7or for three &.' months for e1ery year of the "ne@pired term, )hiche1er is less> contains the
H"alifyin phrases 7e1ery year> and 7"ne@pired term.> !y its ordinary meanin, the )ord 7term> means a limited or definite e@tent of
time. Corollarily, that 7e1ery year> is b"t part of an 7"ne@pired term> is sinificant in many )ays% first, the "ne@pired term m"st be at least one
year, for if it were any shorter, there wo!ld be no occasion for s!ch !ne(pired term to be meas!red by every year 0 and second, the oriinal
term m"st be more than one year, for other)ise, )hate1er )o"ld be the "ne@pired term thereof )ill not reach e1en a year. ConseH"ently, the
more decisi1e factor in the determination of )hen the s"bEect cla"se 7for three &.' months for e1ery year of the "ne@pired term, )hiche1er is
less> shall apply is not the lenth of the oriinal contract period as held in 'arsaman, b"t the lenth of the "ne@pired portion of the contract
period (( the s"bEect cla"se applies in cases )hen the "ne@pired portion of the contract period is at least one year, )hich arithmetically
reH"ires that the oriinal contract period be more than one year.
Die)ed in that liht, the s"bEect cla"se creates a s"b(layer of discrimination amon O96s )hose contract periods are for more than one
year% those )ho are illeally dismissed )ith less than one year left in their contracts shall be entitled to their salaries for the entire "ne@pired
portion thereof, )hile those )ho are illeally dismissed )ith one year or more remainin in their contracts shall be co1ered by the s"bEect
cla"se, and their monetary benefits limited to their salaries for three months only.
#he &ourt concludes that the su'(ect clause contains a suspect classification in that, in the computation of the monetary
'enefits of fixed)term employees who are illegally discharged, it imposes a )month cap on the claim of *+,s with an unexpired
portion of one year or more in their contracts, 'ut none on the claims of other *+,s or local workers with fixed)term employment.
#he su'(ect clause singles out one classification of *+,s and 'urdens it with a peculiar disadvantage.
*<
There bein a s"spect classification in1ol1in a 1"lnerable sector protected by the Constit"tion, the Co"rt no) s"bEects the classification to
a strict E"dicial scr"tiny, and determines )hether it ser1es a compellin state interest thro"h the least restricti1e means.
6hat constit"tes compellin state interest is meas"red by the scale of rihts and po)ers arrayed in the Constit"tion and calibrated by
history. $t is a2in to the paramo"nt interest of the state for )hich some indi1id"al liberties m"st i1e )ay, s"ch as the p"blic interest in
safe"ardin health or maintainin medical standards, or in maintainin access to information on matters of p"blic concern.
$n this case, the #o1ernment has failed to dischare its b"rden of pro1in the e@istence of a compellin state interest that )o"ld E"stify the
perpet"ation of the discrimination aainst O96s "nder the s"bEect cla"se.
Ass"min that, as ad1anced by the O5#, the p"rpose of the s"bEect cla"se is to protect the employment of O96s by mitiatin the
solidary liability of placement aencies, s"ch callo"s and ca1alier rationale )ill ha1e to be reEected. There can ne1er be a E"stification for any
form of o1ernment action that alle1iates the b"rden of one sector, b"t imposes the same b"rden on another sector, especially )hen the
fa1ored sector is composed of pri1ate b"sinesses s"ch as placement aencies, )hile the disad1antaed sector is composed of O96s
)hose protection no less than the Constit"tion commands. The idea that pri1ate b"siness interest can be ele1ated to the le1el of a
compellin state interest is odio"s.
Moreo1er, e1en if the p"rpose of the s"bEect cla"se is to lessen the solidary liability of placement aencies vis"a"vis their forein principals,
there are mechanisms already in place that can be employed to achie1e that p"rpose )itho"t infrinin on the constit"tional rihts of O96s.
Th"s, the s"bEect cla"se in the /th pararaph of 5ection 1< of R.A. 3o. -<42 is 1iolati1e of the riht of petitioner and other O96s to eH"al
protection.
9"rther, there )o"ld be certain misi1ins if one is to approach the declaration of the "nconstit"tionality of the s"bEect cla"se from the lone
perspecti1e that the cla"se directly 1iolates state policy on labor "nder 5ection ., Article Q$$$ of the Constit"tion.
The Co"rt f"rther holds that the s"bEect cla"se 1iolates petitioner:s riht to s"bstanti1e d"e process, for it depri1es him of property,
consistin of monetary benefits, )itho"t any e@istin 1alid o1ernmental p"rpose.
The s"bEect cla"se does not state or imply any definiti1e o1ernmental p"rpose0 and it is for that precise reason that the cla"se 1iolates
not E"st petitioner:s riht to eH"al protection, b"t also her riht to s"bstanti1e d"e process "nder 5ection 1,
1.7
Article $$$ of the Constit"tion.
BALLADARES v. EA: 6ENTURES CORORATIONIEL TIGRE SECURITY AND IN6ESTIGATION AGENCY
G.R. No. 16159+. !u*& 16, 4889
NACHURA, !.
"#$ts%
;etitioners 3estor +. !alladares, Roldan 4. #"aniCo, Arn"lfo E. Merto, #eronimo #. #ob"yan, Edardo O. A1ila, and Ed"ard 9. Ramos, +r.
)ere employed by respondent ;ea2 Dent"res Corporation=El Tire 5ec"rity and $n1estiation Aency &;ea2 Dent"res' as sec"rity "ards
and )ere assined at the premises of respondent Banco Mar2et O)ners and Administrators Association &BMOAA'. They filed a complaint
for "nderpayment of )aes aainst their employer, ;ea2 Dent"res, )ith the ?epartment of 4abor and Employment &?O4E'.
Actin on the complaint, ?O4E cond"cted an inspection of ;ea2 Dent"res on March 4, 1,,,, and the follo)in 1iolations )ere noted%
( "nderpayment of the minim"m )ae and other a"@iliary benefits0
( pertinent employment records &payrolls, daily time records, contract of employment' )ere not a1ailable at the time of inspection.
A 3otice of $nspection Res"lt )as iss"ed to and recei1ed by the 8"man Reso"rce ?epartment Manaer, Ms. Cristina Dillacr"sis. ;ea2
Dent"res )as instr"cted to effect restit"tion and=or to file its obEections )ithin / )or2in days from receipt thereof.
Respondent failed to correct the 1iolations or contest the findins as reH"ired0 hence, the parties )ere s"mmoned for hearin. ?"rin the
sched"led hearin on March 2*, 1,,,, both complainants and ;ea2 Dent"res mo1ed to implead its client, BMOAA, represented by its
;resident, Ms. 4ao Ti 5io2 !ee, as party respondent. BMOAA opposed on the ro"nd that it )as not the employer of petitioners. On May 2/,
1,,,, ;ea2 Dent"res filed a Third(;arty Complaint and=or ;osition ;aper )ith lea1e of co"rt, allein that ;ea2 Dent"res )as entitled to
indemnity or s"broation from BMOAA in respect to the monetary claims of petitioners, beca"se the ca"se of the "nderpayment of )aes, if
*1
any, arose from the fail"re of the BMOAA to pay the sec"rity aency the correct amo"nt d"e petitioners as prescribed by 1ario"s 6ae
Orders.
Reional ?irector Ma@imo !a"yot 4im rendered E"dment in fa1or of petitioners and r"led that the contractor )as Eointly and se1erally
liable )ith the principal.
Issu&%
6O3 the ?O4E Reional ?irector has E"risdiction to ta2e coniCance of the case
H&'(%
;etitioners: complaint in1ol1ed "nderpayment of )aes and other benefits. $n order to 1erify the alleations in the complaint, ?O4E
cond"cted an inspection, )hich yielded proof of 1iolations of labor standards. !y the nat"re of the complaint and from the res"lt of the
inspection, the a"thority of the ?O4E, "nder Article 12-, came into play reardless of the monetary 1al"e of the claims in1ol1ed. The e@tent
of this a"thority and the po)ers flo)in therefrom are defined and set forth in Article 12- of the 4abor Code, as amended by R.A. 3o.
77.<, the pertinent portions of )hich read as follo)s%
7ART. 12-. Disitorial and enforcement po)er. G &a' The 5ecretary of 4abor or his d"ly a"thoriCed representati1es, incl"din labor re"lation
officers, shall ha1e access to employer:s records and premises at any time of the day or niht )hene1er )or2 is bein "nderta2en therein,
and the riht to copy therefrom, to H"estion any employee and in1estiate any fact, condition or matter )hich may be necessary to determine
1iolations or )hich may aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant
thereto.
7&b' 3ot)ithstandin the pro1isions of Articles 12, and 217 of this Code to the contrary, and in cases )here the relationship of employer(
employee still e@ists, the 5ecretary of 4abor and Employment or his d"ly a"thoriCed representati1es shall ha1e the po)er to iss"e
compliance orders to i1e effect to the labor standards pro1isions of this Code and other labor leislation based on the findins of labor
employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The 5ecretary or his d"ly a"thoriCed
representati1es shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of their orders, e@cept in cases )here the
employer contests the findin of the labor employment and enforcement officer and raises iss"es s"pported by doc"mentary proofs )hich
)ere not considered in the co"rse of inspection.
7An order iss"ed by the d"ly a"thoriCed representati1e of the 5ecretary of 4abor and Employment "nder this article may be appealed to the
latter. $n case said order in1ol1es a monetary a)ard, an appeal by the employer may be perfected only "pon the postin of a cash or s"rety
bond iss"ed by a rep"table bondin company d"ly accredited by the 5ecretary of 4abor and Employment in the amo"nt eH"i1alent to the
monetary a)ard in the order appealed from.>
The 5ecretary of 4abor or his d"ly a"thoriCed representati1es is empo)ered to hear and decide, in a s"mmary proceedin, any matter
in1ol1in the reco1ery of any amo"nt of )aes and other monetary claims arisin o"t of employer(employee relations at the time of the
inspection, e1en if the amo"nt of the money claim e@ceeds ;/,<<<.<<.
6hile it is tr"e that "nder Articles 12, and 217 of the 4abor Code, the 4abor Arbiter has E"risdiction to hear and decide cases )here the
areate money claims of each employee e@ceeds ;/,<<<.<<, said pro1isions of la) do not contemplate nor co1er the 1isitorial and
enforcement po)ers of the 5ecretary of 4abor or his d"ly a"thoriCed representati1es. Rather, said po)ers are defined and set forth in Article
12- of the 4abor Code.
The aforeH"oted pro1ision e@plicitly e@cl"des from its co1erae Articles 12, and 217 of the 4abor Code by the phrase 7&3'ot)ithstandin the
pro1isions of Articles 12, and 217 of this Code to the contrary @ @ @> thereby retainin and f"rther strenthenin the po)er of the 5ecretary of
4abor or his d"ly a"thoriCed representati1es to iss"e compliance orders to i1e effect to the labor standards pro1isions of said Code and
other labor leislation based on the findins of labor employment and enforcement officer or ind"strial safety enineer made in the co"rse of
inspection.
8o)e1er, if the labor standards case is co1ered by the e@ception cla"se in Article 12- &b' of the 4abor Code, then the Reional ?irector )ill
ha1e to endorse the case to the appropriate Arbitration !ranch of the 34RC. $n order to di1est the Reional ?irector or his representati1es of
E"risdiction, the follo)in elements m"st be present% &a' that the employer contests the findins of the labor re"lations officer and raises
iss"es thereon0 &b' that in order to resol1e s"ch iss"es, there is a need to e@amine e1identiary matters0 and &c' that s"ch matters are not
1erifiable in the normal co"rse of inspection. The r"les also pro1ide that the employer shall raise s"ch obEections d"rin the hearin of the
case or at any time after receipt of the notice of inspection res"lts.
*2
$n this case, the Reional ?irector 1alidly ass"med E"risdiction o1er the money claims of pri1ate respondents e1en if the claims
e@ceeded ;/,<<< beca"se s"ch E"risdiction )as e@ercised in accordance )ith Article 12-&b' of the 4abor Code and the case does not fall
"nder the e@ception cla"se.
METEORO v. CREATI6E CREATURES, INC.
G.R. No. 151459. !u'2 13, 4889
NACHURA, !.
"#$ts%
Respondent is a domestic corporation enaed in the b"siness of prod"cin, pro1idin, or proc"rin the prod"ction of set desins and set
constr"ction ser1ices for tele1ision e@hibitions, concerts, theatrical performances, motion pict"res and the li2e. $t primarily caters to the
prod"ction desin reH"irements of A!5(C!3 !roadcastin Corporation in Metro Manila and nation)ide. On the other hand, petitioners )ere
hired by respondent on 1ario"s dates as artists, carpenters and )elders. They )ere tas2ed to desin, create, assemble, set("p and
dismantle props, and pro1ide so"nd effects to respondent:s 1ario"s TD prorams and mo1ies.
5ometime in 9ebr"ary and March 1,,,, petitioners filed their respecti1e complaints for non(payment of niht shift differential pay, o1ertime
pay, holiday pay, 1.th month pay, premi"m pay for 5"ndays and=or rest days, ser1ice incenti1e lea1e pay, paternity lea1e pay, ed"cational
assistance, rice benefits, and illeal and=or "na"thoriCed ded"ctions from salaries aainst respondent, before the ?epartment of 4abor and
Employment &?O4E', 3ational Capital Reion &3CR'.
After the inspection cond"cted at respondent:s premises, the labor inspector noted that 7the records )ere not made a1ailable at the time of
the inspection0> that respondent claimed that petitioners )ere contract"al employees and=or independent talent )or2ers0 and that petitioners
)ere reH"ired to p"nch their cards.
Respondent ar"ed that the ?O4E(3CR had no E"risdiction o1er the complaint of the petitioners beca"se of the absence of an employer(
employee relationship. $t added that petitioners )ere free(lance indi1id"als, performin special ser1ices )ith s2ills and e@pertise inherently
e@cl"si1e to them li2e actors, actresses, directors, prod"cers, and script )riters, s"ch that they )ere treated as special types of )or2ers.
Mean)hile, petitioners filed a complaint for illeal dismissal aainst petitioner, )ith prayer for payment of o1ertime pay, premi"m pay for
holiday and rest day, holiday pay, ser1ice incenti1e lea1e pay, 1.th month pay and attorney:s fees before the 3ational 4abor Relations
Commission &34RC'.
Issu&%
6hich body=trib"nal has E"risdiction o1er petitioners: money claims ((( the ?O4E 5ecretary or his d"ly a"thoriCed representati1e, or the
34RCL
H&'(%
The instant case falls )ithin the e@cl"si1e E"risdiction of the 34RC.
The ?O4E 5ecretary and her a"thoriCed representati1es, s"ch as the ?O4E(3CR Reional ?irector, ha1e E"risdiction to enforce
compliance )ith labor standards la)s "nder the broad 1isitorial and enforcement po)ers conferred by Article 12- of the 4abor Code, and
e@panded by Rep"blic Act &R.A.' 3o. 77.<, to )it%
7Art. 12-. Disitorial and Enforcement ;o)er G
a. The 5ecretary of 4abor or his d"ly a"thoriCed representati1es, incl"din labor re"lation officers, shall ha1e access to employer:s
records and premises at anytime of the day or niht )hene1er )or2 is bein "nderta2en therein, and the riht to copy therefrom, to
H"estion any employee and in1estiate any fact, condition or matter )hich may be necessary to determine 1iolations or )hich may
aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant thereto.
b. 3ot)ithstandin the pro1isions of Article 12, and 217 of this Code to the contrary, and in cases )here the relationship of employer(
employee relation still e@ists, the 5ecretary of 4abor and Employment or his d"ly a"thoriCed representati1es shall ha1e the po)er
to iss"e compliance orders to i1e effect to the labor standards pro1isions of this Code and other labor leislation based on the
findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The
*.
5ecretary or his d"ly a"thoriCed representati1es shall iss"e )rits of e@ec"tion, to the appropriate a"thority for the enforcement of
their orders, e@cept in cases )here the employer contests the findins of the labor employment and enforcement officer and raises
iss"es s"pported by doc"mentary proofs )hich )ere not considered in the co"rse of inspection.
The 1isitorial and enforcement po)ers of the 5ecretary, e@ercised thro"h his representati1es, encompass compliance )ith all labor
standards la)s and other labor leislation, reardless of the amo"nt of the claims filed by )or2ers.
The 1isitorial and enforcement po)ers of the 5ecretary, e@ercised thro"h his representati1es, encompass compliance )ith all labor
standards la)s and other labor leislation, reardless of the amo"nt of the claims filed by )or2ers.
The so(called 7e@ception cla"se> has the follo)in elements, all of )hich m"st conc"r%
a. that the employer contests the findins of the labor re"lations officer and raises iss"es thereon0
b. that in order to resol1e s"ch iss"es, there is a need to e@amine e1identiary matters0 and
c. that s"ch matters are not 1erifiable in the normal co"rse of inspection.
$n the present case, the CA aptly applied the 7e@ception cla"se.> At the earliest opport"nity, respondent reistered its obEection to the
findins of the labor inspector. The labor inspector, in fact, noted in its report that 7respondent alleed that petitioners )ere contract"al
)or2ers and=or independent and talent )or2ers )itho"t control or s"per1ision and also s"pplied )ith tools and apparat"s pertainin to their
Eob.> $n its position paper, respondent aain insisted that petitioners )ere not its employees. $t then H"estioned the Reional ?irector:s
E"risdiction to entertain the matter before it, primarily beca"se of the absence of an employer(employee relationship. 9inally, it raised the
same ar"ments before the 5ecretary of 4abor and the appellate co"rt. $t is, therefore, clear that respondent contested and contin"es to
contest the findins and concl"sions of the labor inspector.
The follo)in elements constit"te the reliable yardstic2 to determine s"ch relationship% &a' the selection and enaement of the employee0
&b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to control the employee:s cond"ct. There is no hard and
fast r"le desined to establish the aforesaid elements. Any competent and rele1ant e1idence to pro1e the relationship may be admitted.
$dentification cards, cash 1o"chers, social sec"rity reistration, appointment letters or employment contracts, payrolls, oraniCation charts,
and personnel lists, ser1e as e1idence of employee stat"s. These pieces of e1idence are readily a1ailable, as they are in the possession of
either the employee or the employer0 and they may easily be loo2ed into by the labor inspector &in the co"rse of inspection' )hen confronted
)ith the H"estion of the e@istence or absence of an employer(employee relationship.
$o*t,o' t&st% )hether the employer controls or has reser1ed the riht to control the employee, not only as to the res"lt of the )or2 to be
done, b"t also as to the means and methods by )hich the same is to be accomplished
HILIINE LONG DISTANCE TELEHONE COMANY v. THE NATIONAL LABOR RELATIONS COMMISSION #*( MARILYN ABUCAY
"#$ts%
Marilyn Ab"cay, a traffic operator of the ;hilippine 4on ?istance Telephone Company, )as acc"sed by t)o complainants of ha1in
demanded and recei1ed from them the total amo"nt of ;.,-<<.<< in consideration of her promise to facilitate appro1al of their applications
for telephone installation.
1
$n1estiated and heard, she )as fo"nd "ilty as chared and accordinly separated from the ser1ice.
4
5he )ent
to the Ministry of 4abor and Employment claimin she had been illeally remo1ed. After consideration of the e1idence and ar"ments of the
parties, the company )as s"stained and the complaint )as dismissed for lac2 of merit. 3e1ertheless, the dispositi1e portion of labor arbiter:s
decision declared%
7Considerin that ?r. 8elen !anayan and Mrs. Consolacion MartineC are not totally blameless in the liht of the fact that the deal happened
o"thide the premises of respondent company and that their act of i1in ;.,-<<.<< )itho"t any receipt is tantamo"nt to corr"ption of p"blic
officers, complainant m"st be i1en one month pay for e1ery year of ser1ice as financial assistance.>
Issu&%
$s the a)ard of financial assistance to an employee )ho had been dismissed for ca"se as fo"nd by the p"blic respondent properL
H&'(%
3o. 5eparation pay shall be allo)ed as a meas"re of social E"stice only in those instances )here the employee is 1alidly dismissed for
ca"ses other than serio"s miscond"ct or those reflectin on his moral character. 6here the reason for the 1alid dismissal is, for e@ample,
habit"al into@ication or an offense in1ol1in moral t"rpit"de, li2e theft or illicit se@"al relations )ith a fello) )or2er, the employer may not be
*4
reH"ired to i1e the dismissed employee separation pay, or financial assistance, or )hate1er other name it is called, on the ro"nd of social
E"stice.
Applyin the abo1e considerations, the rant of separation pay in the case at bar is "nE"stified. The pri1ate respondent has been dismissed
for dishonesty, as fo"nd by the labor arbiter and affirmed by the 34RC and as she herself has impliedly admitted. The fact that she has
)or2ed )ith the ;4?T for more than a decade, if it is to be considered at all, sho"ld be ta2en aainst her as it reflects a rerettable lac2 of
loyalty that she sho"ld ha1e strenthened instead of betrayin d"rin all of her 1< years of ser1ice )ith the company. $f rearded as a
E"stification for moderatin the penalty of dismissal, it )ill act"ally become a priCe for disloyalty, per1ertin the meanin of social E"stice and
"nderminin the efforts of labor to cleanse its ran2s of all "ndesirables.
The separation pay, if fo"nd d"e "nder the circ"mstances of each case, sho"ld be comp"ted at the rate of one month salary for e1ery year of
ser1ice, ass"min the lenth of s"ch ser1ice is deemed material. This is )itho"t preE"dice to the application of special areements bet)een
the employer and the employee stip"latin a hiher rate of comp"tation and pro1idin for more benefits to the dischared employee.
IMELDA DAR6IN v. HON. COURT O" AEALS #*( EOLE O" THE HILIINES
G.R. No. 1498++ !u'2 13, 1998
"#$ts%
Macaria Toledo met acc"sed(appellant ?ar1in in the latter:s residence. $n said meetin, acc"sed(appellant alleedly con1inced Toledo that
by i1in her ;1/<,<<<.<<, the latter can immediately lea1e for the Fnited 5tates )itho"t any appearance before the F.5. embassy. Th"s,
Toledo a1e ?ar1in the amo"nt of ;1/<,<<<.<<, as e1idenced by a receipt statin that the 7amo"nt of ;1/<,<<<.<< )as for F.5. Disa and Air
fare.> After recei1in the money, ?ar1in ass"red Toledo that she can lea1e )ithin one )ee2. 8o)e1er, )hen after a )ee2, there )as no )ord
from ?ar1in, Toledo )ent to her residence to inH"ire abo"t any de1elopment, b"t co"ld not find ?ar1in. Thereafter, Toledo filed a complaint
)ith the !acoor ;olice 5tation aainst $melda ?ar1in. Fpon f"rther in1estiation, a certification )as iss"ed by the ;hilippine O1erseas
Employment Administration &;OEA' statin that $melda ?ar1in is neither licensed nor a"thoriCed to recr"it )or2ers for o1erseas employment.
Acc"sed(appellant )as then chared for estafa and illeal recr"itment by the Office of the ;ro1incial ;rosec"tor of Ca1ite.
Issu&%
)hether the acc"sed(appellant enaed in recr"itment acti1ities
H&'(%
3o. There is no s"fficient e1idence to pro1e that acc"sed(appellant offered a Eob to pri1ate respondent. $t is not clear that acc"sed a1e the
impression that she )as capable of pro1idin the pri1ate respondent )or2 abroad. 6hat is established, ho)e1er, is that the pri1ate
respondent a1e acc"sed(appellant ;1/<,<<<.<<. The claim of the acc"sed that the ;1/<,<<<.<< )as for payment of pri1ate respondent:s
air fare and F5 1isa and other e@penses cannot be inored beca"se the receipt for the ;1/<,<<<.<<, )hich )as presented by both parties
d"rin the trial of the case, stated that it )as 7for Air 9are and Disa to F5A.> 8ad the amo"nt been for somethin else in addition to air fare
and 1isa e@penses, s"ch as )or2 placement abroad, the receipt sho"ld ha1e so stated.
!y themsel1es, proc"rin a passport, airline tic2ets and forein 1isa for another indi1id"al, )itho"t more, can hardly H"alify as recr"itment
acti1ities. Aside from the testimony of pri1ate respondent, there is nothin to sho) that acc"sed(appellant enaed in recr"itment acti1ities.
6e also note that the prosec"tion did not present the testimonies of )itnesses )ho co"ld ha1e corroborated the chare of illeal recr"itment,
s"ch as 9lorencio Ri1era, and 4eonila Ri1era, )hen it had the opport"nity to do so. As it stands, the claim of pri1ate respondent that
acc"sed(appellant promised her employment abroad is "ncorroborated. All these, ta2en collecti1ely, cast reasonable do"bt on the "ilt of the
acc"sed.
STRONGHOLD INSURANCE COMANY, INC. v. HON. COURT O" AEALS #*( ADRIANO URTESUELA
G.R. No. 88898 !#*u#,2 38, 1994
"#$ts%
Actin on behalf of its forein principal, Ratar 3ational 9ishin Co., ;an Asian 4oistics and Tradin, a domestic recr"itin and placement
aency, hired Adriano Frtes"ela as captain of the 1essel M=D Ory@ for the stip"lated period of t)el1e months. The reH"ired s"rety bond, in
the amo"nt of ;/<,<<<.<<, )as s"bmitted by ;an Asian and 5tronhold $ns"rance Co., $nc., the herein petitioner, to ans)er for the liabilities
of the employer. Frtes"ela ass"med his d"ties on April 1-, 1,-2, b"t three months later his ser1ices )ere terminated and he )as repatriated
to Manila. 8e there"pon filed a complaint aainst ;an Asian and his former employer )ith the ;hilippine O1erseas Employment
Administration for breach of contract and damaes.
*/
The ;OEA rendered a decision in his fa1or for the amo"nt of ;*,.74.,4, representin his salaries for the "ne@pired portion of his contract
and the cash 1al"e of his "n"sed 1acation lea1e, pl"s attorney:s fees and costs, )hich the respondents )ere reH"ired to pay. The E"dment
e1ent"ally became final and e@ec"tory, not ha1in been appealed on time. ;"rs"ant thereto, a )rit of e@ec"tion )as iss"ed aainst ;an
Asian b"t co"ld be enforced only aainst its cash bond of ;1<,<<<.<<, the company ha1in ceased to operate. Frtes"ela then filed a
complaint )ith the $ns"rance Commission aainst 5tronhold on the basis of the aforementioned s"rety bond and prayed for the 1al"e
thereof pl"s attorney:s fees and litiation costs.
Fnder the bond, the petitioner and ;an Asian "ndertoo2 G
7To ans)er for all liabilities )hich the ;hilippine O1erseas Employment Administration may adE"de=impose aainst the ;rincipal in
connection )ith the recr"itment of 9ilipino seamen.
7$t is "nderstood that notice to the ;rincipal is notice to the s"rety.
768EREA5, the liability of the s"rety "nder this !ond shall in no case e@ceed the s"m of ;E5O5% 9$9TB T8OF5A3? O34B &;/<,<<<.<<'
;hilippine C"rrency.>
Issu&%
$s petitioner liable on a s"rety bond e@ec"ted for the protection of a 9ilipino seamanL
H&'(%
Bes. $n the s"rety bond, the petitioner "neH"i1ocally bo"nd itself to ans)er for all liabilities )hich the ;hilippine O1erseas Employment
Administration may adE"de=impose aainst the ;rincipal in connection )ith the recr"itment of 9ilipino seamen. 5trictly interpreted, this )o"ld
mean that the petitioner areed to ans)er for )hate1er decision miht be rendered aainst the principal, )hether or not the s"rety )as
impleaded in the complaint and had the opport"nity to defend itself. There is nothin in the stip"lation callin for a direct E"dment aainst
the s"rety as a co(defendant in an action aainst the principal. On the contrary, the petitioner areed 7to ans)er for all liabilities> that 7miht
be adE"ded or imposed by the ;OEA against the +rincipal.>
Do$t,)*&%
The s"rety bond reH"ired of recr"itment aencies is intended for the protection of o"r citiCens )ho are enaed for o1erseas employment by
forein companies. The p"rpose is to ins"re that if the rihts of these o1erseas )or2ers are 1iolated by their employers, reco"rse )o"ld still
be a1ailable to them aainst the local companies that recr"ited them for the forein principal. The forein principal is o"tside the E"risdiction
of o"r co"rts and )o"ld probably ha1e no properties in this co"ntry aainst )hich an ad1erse E"dment can be enforced. This diffic"lty is
corrected by the bond, )hich can be proceeded aainst to satisfy that E"dment.
HORTENCIA SALA;AR v. HON. TOMAS D. ACHACOSO, )* .)s $#-#$)t2 #s A(0)*)st,#to, o/ t.& .)')--)*& Ov&,s&#s E0-'o20&*t
A(0)*)st,#t)o*, #*( "ERDIE MARGUE;
G.R. No. 81918 M#,$. 1+, 1998
"#$ts%
On +an"ary 2*, 1,-*, he, Mr. Marcos, prom"lated ;residential ?ecree 3o. 2<1-, i1in the 4abor Minister search and seiC"re po)ers as
)ell%
7&c' The Minister of 4abor and Employment or his d"ly a"thoriCed representati1es shall ha1e the po)er to ca"se the arrest and detention of
s"ch non(licensee or non(holder of a"thority if after in1estiation it is determined that his acti1ities constit"te a daner to national sec"rity
and p"blic order or )ill lead to f"rther e@ploitation of Eob(see2ers. The Minister shall order the search of the office or premises and seiC"re of
doc"ments, paraphernalia, properties and other implements "sed in illeal recr"itment acti1ities and the clos"re of companies, establishment
and entities fo"nd to be enaed in the recr"itment of )or2ers for o1erseas employment, )itho"t ha1in been licensed or a"thoriCed to do
so.>
The abo1e has no) been etched as Article .-, pararaph &c' of the 4abor Code.
On the basis of the aforeH"oted pro1ision, the ;OEA iss"ed a search )arrant and seiCed some personal properties from the residence of
8orty 5alaCar, alleed to be enaed in illeal recr"itment.
Issu&%
**
May the ;hilippine O1erseas Employment Administration &or the 5ecretary of 4abor' 1alidly iss"e )arrants of search and seiC"re &or arrest'
"nder Article .- of the 4abor CodeL
H&'(%
3o. The 5ecretary of 4abor, not bein a E"de, may no loner iss"e search or arrest )arrants. 8ence, the a"thorities m"st o thro"h the
E"dicial process. To that e@tent, Article .-, pararaph &c', of the 4abor Code, is "nconstit"tional and of no force and effect.
The search and seiC"re order in H"estion, ass"min, e( gratia arg!menti, that it )as 1alidly iss"ed, is clearly in the nat"re of a eneral
)arrant%
7;"rs"ant to the po)ers 1ested in me "nder ;residential ?ecree 3o. 1,2< and E@ec"ti1e Order 3o. 1<22, $ hereby order the C4O5FRE of
yo"r recr"itment aency bein operated at 3o. *1/ R.O. 5antos 5t., Mandal"yon, Metro Manila and the seiC"re of the doc"ments and
paraphernalia bein "sed or intended to be "sed as the means of committin illeal recr"itment, it ha1in 1erified that yo" ha1e
&1' 3o 1alid license or a"thority from the ?epartment of 4abor and Employment to recr"it and deploy )or2ers for o1erseas
employment0
&2' Committed=are committin acts prohibited "nder Article .4 of the 3e) 4abor Code in relation to Article .- of the same code.>
A )arrant m"st identify clearly the thins to be seiCed, other)ise, it is n"ll and 1oid.
9or the "idance of the bench and the bar, the Co"rt reaffirmed the follo)in principles%
1. Fnder Article $$$, 5ection 2, of the l,-7 Constit"tion, it is only E"des, and no other, )ho may iss"e )arrants of arrest and search%
2. The e@ception is in cases of deportation of illeal and "ndesirable aliens, )hom the ;resident or the Commissioner of $mmiration
may order arrested, follo)in a final order of deportation, for the p"rpose of deportation.
MARITES BERNARDO v. NLRC #*( "AR EAST BAN: AND TRUST COMANY
G.R. No. 144915 !u'2 14, 1999
"#$ts%
Complainants n"mberin 4. are deaf(m"tes )ho )ere hired on 1ario"s periods from 1,-- to 1,,. by respondent 9ar East !an2 and Tr"st
Co. as Money 5orters and Co"nters thro"h a "niformly )orded areement called 7Employment Contract for 8andicapped 6or2ers>. The
employment contract, amon others, pro1ided for the follo)in stip"lations%
1. The !A3P arees to employ and train the EM;4OBEE, and the EM;4OBEE arees to diliently and faithf"lly )or2 )ith the !A3P,
as 'oney Sorter and #o!nter.
2. The EM;4OBEE shall perform amon others, the follo)in d"ties and responsibilities%
i. 5ort o"t bills accordin to color0
ii. Co"nt each denomination per h"ndred, either man"ally or )ith the aid of a co"ntin machine0
iii. 6rap and label bills per h"ndred0
i1. ;"t the )rapped bills into b"ndles0 and
1. 5"bmit b"ndled bills to the ban2 teller for 1erification.
.. The EM;4OBEE shall "ndero a trainin period of one &1' month, after )hich the !A3P shall determine )hether or not he=she
sho"ld be allo)ed to finish the remainin term of this Contract.
4. The EM;4OBEE shall be entitled to an initial compensation of ;11-.<< per day, s"bEect to adE"stment in the sole E"dment of the
!A3P, payable e1ery 1/th and end of the month
/. The re"lar )or2 sched"le of the EM;4OBEE shall be fi1e &/' days per )ee2, from Mondays thr" 9ridays, at eiht &-' ho"rs a day.
The EM;4OBEE may be reH"ired to perform o1ertime )or2 as circ"mstance may )arrant, for )hich o1ertime )or2 he=she IshallJ
be paid an additional compensation of 12/N of his daily rate if performed d"rin ordinary days and 1.<N if performed d"rin
5at"rday or IaJ rest day.
*. The EM;4OBEE shall li2e)ise be entitled to the follo)in benefits%
i. ;roportionate 1.th month pay based on his basic daily )ae.
ii. 9i1e &/' days incenti1e lea1e.
iii. 555 premi"m payment.>
$n 1,--, 2 deaf(m"tes )ere hired "nder this Areement0 in 1,-, another 20 in 1,,<, 1,0 in 1,,1 *0 in 1,,2, * and in 1,,., 21. Their
employments )ere rene)ed e1ery si@ months s"ch that by the time this case arose, there )ere /* deaf(m"tes )ho )ere employed by
*7
respondent "nder the said employment areement. The last one )as Thelma Malindoy )ho )as employed in 1,,2 and )hose contract
e@pired on +"ly 1,,..
Issu&%
)hether petitioners ha1e become re"lar employees
H&'(%
The facts, 1ie)ed in liht of the 4abor Code and the Mana Carta for ?isabled ;ersons, ind"bitably sho) that the petitioners, e@cept si@teen
of them, sho"ld be deemed re"lar employees. As s"ch, they ha1e acH"ired leal rihts that this Co"rt is d"ty(bo"nd to protect and "phold,
not as a matter of compassion b"t as a conseH"ence of la) and E"stice.
The "niform employment contracts of the petitioners stip"lated that they shall be trained for a period of one month, after )hich the employer
shall determine )hether or not they sho"ld be allo)ed to finish the *(month term of the contract. 9"rthermore, the employer may terminate
the contract at any time for a E"st and reasonable ca"se. Fnless rene)ed in )ritin by the employer, the contract shall a"tomatically e@pire at
the end of the term.
Accordin to pri1ate respondent, the employment contracts )ere prepared in accordance )ith Article -< of the 4abor code, )hich pro1ides%
7Art. -<. Employment areement. K Any employer )ho employs handicapped )or2ers shall enter into an employment areement )ith them,
)hich areement shall incl"de%
a. The names and addresses of the handicapped )or2ers to be employed0
b. The rate to be paid the handicapped )or2ers )hich shall be not less than se1enty fi1e &7/N' per cent of the applicable leal
minim"m )ae0
c. The d"ration of employment period0 and
d. The )or2 to be performed by handicapped )or2ers.
The employment areement shall be s"bEect to inspection by the 5ecretary of 4abor or his d"ly a"thoriCed representati1es.>
The stip"lations in the employment contracts ind"bitably conform )ith the aforecited pro1ision. 5"cceedin e1ents and the enactment of RA
3o. 7277 &the Mana Carta for ?isabled ;ersons', ho)e1er, E"stify the application of Article 2-< of the 4abor Code.
Respondent ban2 entered into the aforesaid contract )ith a total of /* handicapped )or2ers and rene)ed the contracts of .7 of them. $n
fact, t)o of them )or2ed from 1,-- to 1,,.. Derily, the rene)al of the contracts of the handicapped )or2ers and the hirin of others lead to
the concl"sion that their tas2s )ere beneficial and necessary to the ban2. More important, these facts sho) that they )ere H"alified to
perform the responsibilities of their positions. $n other )ords, their disability did not render them "nH"alified or "nfit for the tas2s assined to
them.
$n this liht, the Mana Carta for ?isabled ;ersons mandates that a H"alified disabled employee sho"ld be i1en the same terms and
conditions of employment as a H"alified able(bodied person. 5ection / of the Mana Carta pro1ides%
75ec. /. E&!al pport!nity for Employment. K 3o disabled person shall be denied access to opport"nities for s"itable employment. A
H"alified disabled employee shall be s"bEect to the same terms and conditions of employment and the same compensation, pri1ilees,
benefits, frine benefits, incenti1es or allo)ances as a H"alified able bodied person.>
The fact that the employees )ere H"alified disabled persons necessarily remo1es the employment contracts from the ambit of Article -<.
5ince the Mana Carta accords them the rihts of H"alified able(bodied persons, they are th"s co1ered by Article 2-< of the 4abor Code,
)hich pro1ides%
7Art. 2-<. Reg!lar and #as!al Employment. K The pro1isions of )ritten areement to the contrary not)ithstandin and reardless of the oral
areement of the parties, an employment shall be deemed to be re"lar )here the employee has been enaed to perform acti1ities )hich
are "s"ally necessary or desirable in the "s"al b"siness or trade of the employer, e@cept )here the employment has been fi@ed for a specific
proEect or "nderta2in the completion or termination of )hich has been determined at the time of the enaement of the employee or )here
the )or2 or ser1ices to be performed is seasonal in nat"re and the employment is for the d"ration of the season.
An employment shall be deemed to be cas"al if it is not co1ered by the precedin pararaph% ;ro1ided, That, any employee )ho has
rendered at least one year of ser1ice, )hether s"ch ser1ice is contin"o"s or bro2en, shall be considered as re"lar employee )ith respect to
the acti1ity in )hich he is employed and his employment shall contin"e )hile s"ch acti1ity e@ists.>
*-
The contract sined by petitioners is a2in to a probationary employment, d"rin )hich the ban2 determined the employees: fitness for the
Eob. 6hen the ban2 rene)ed the contract after the lapse of the si@(month probationary period, the employees thereby became re"lar
employees. 3o employer is allo)ed to determine indefinitely the fitness of its employees.
As re"lar employees, the t)enty(se1en petitioners are entitled to sec"rity of ten"re0 that is, their ser1ices may be terminated only for a E"st
or a"thoriCed ca"se. !eca"se respondent failed to sho) s"ch ca"se, these t)enty(se1en petitioners are deemed illeally dismissed and
therefore entitled to bac2 )aes and reinstatement )itho"t loss of seniority rihts and other pri1ilees. Considerin the alleation of
respondent that the Eob of money sortin is no loner a1ailable beca"se it has been assined bac2 to the tellers to )hom it oriinally
beloned, 1-petitioners are hereby a)arded separation pay in lie" of reinstatement.
!eca"se the other si@teen )or2ed only for si@ months, they are not deemed re"lar employees and hence not entitled to the same benefits.
SOCIAL SECURITY SYSTEM EMLOYEES ASSOCIATION ?SSSEAA v. CA
G.R. No. 89459 !u'2 48, 1989
CORTES, !.
"#$ts%
The 555 filed a complaint for damaes )ith a prayer for a )rit of preliminary inE"nction aainst petitioners, allein that on +"ne ,, 1,-7,
the officers and members of 555EA staed an illeal stri2e and barricaded the entrances to the 555 !"ildin, pre1entin non(stri2in
employees from reportin for )or2 and 555 members from transactin b"siness )ith the 5550 that the stri2e )as reported to the ;"blic
5ector 4abor ( Manaement Co"ncil, )hich ordered the stri2ers to ret"rn to )or20 that the stri2ers ref"sed to ret"rn to )or20 and that the 555
s"ffered damaes as a res"lt of the stri2e. The complaint prayed that a )rit of preliminary inE"nction be iss"ed to enEoin the stri2e and that
the stri2ers be ordered to ret"rn to )or20 that the petitioners be ordered to pay damaes0 and that the stri2e be declared illeal.
The 555EA )ent on stri2e after the 555 failed to act on the "nion:s demands, )hich incl"ded% implementation of the pro1isions of the old
555(555EA collecti1e barainin areement &C!A' on chec2(off of "nion d"es0 payment of accr"ed o1ertime pay, niht differential pay and
holiday pay0 con1ersion of temporary or contract"al employees )ith * months or more of ser1ice into re"lar and permanent employees and
their entitlement to the same salaries, allo)ances and benefits i1en to other re"lar employees of the 5550 and payment of the children:s
allo)ance of ;.<.<<, and after the 555 ded"cted certain amo"nts from the salaries of the employees and alleedly committed acts of
discrimination and "nfair labor practices.
The position of the petitioners is that the Reional Trial Co"rt had no E"risdiction to hear the case initiated by the 555 and to iss"e the
restrainin order and the )rit of preliminary inE"nction, as E"risdiction lay )ith the ?epartment of 4abor and Employment or the 3ational 4abor
Relations Commission, since the case in1ol1es a labor disp"te.
On the other hand, the 555 ad1ances the contrary 1ie), on the ro"nd that the employees of the 555 are co1ered by ci1il ser1ice la)s
and r"les and re"lations, not the 4abor Code, therefore they do not ha1e the riht to stri2e. 5ince neither the ?O4E nor the 34RC has
E"risdiction o1er the disp"te, the Reional Trial Co"rt may enEoin the employees from stri2in.
Issu&s%
.. ?o the employees of the 555 ha1e the riht to stri2eL
4. ?oes the Reional Trial Co"rt ha1e E"risdiction to hear the case initiated by the 555 and to enEoin the stri2ers from contin"in )ith the
stri2e and to order them to ret"rn to )or2L
H&'(%
Considerin that "nder the 1,-7 Constit"tion 7TJhe ci1il ser1ice embraces all branches, s"bdi1isions, instr"mentalities, and aencies of the
#o1ernment, incl"din o1ernment(o)ned or controlled corporations )ith oriinal charters> IArt. $Q&!', 5ec. .2&l' see also 5ec. 1 of E.O. 3o.
1-< )here the employees in the ci1il ser1ice are denominated as 7o1ernment employees>J and that the 555 is one s"ch o1ernment(
controlled corporation )ith an oriinal charter, ha1in been created "nder R.A. 3o. 11*1, its employees are part of the ci1il ser1ice and are
co1ered by the Ci1il 5er1ice Commission:s memorand"m prohibitin stri2es. This bein the case, the stri2e staed by the employees of the
555 )as illeal.
*,
The eneral r"le is that the terms and conditions of employment in the #o1ernment, incl"din any political s"bdi1ision or instr"mentality
thereof are o1erned by la). 5ince the terms and conditions of o1ernment employment are fi@ed by la), o1ernment )or2ers cannot "se
the same )eapons employed by )or2ers in the pri1ate sector to sec"re concessions from their employers. The principle behind labor
"nionism in pri1ate ind"stry is that ind"strial peace cannot be sec"red thro"h comp"lsion by la). Relations bet)een pri1ate employers and
their employees rest on an essentially 1ol"ntary basis. 5"bEect to the minim"m reH"irements of )ae la)s and other labor and )elfare
leislation, the terms and conditions of employment in the "nioniCed pri1ate sector are settled thro"h the process of collecti1e barainin. $n
o1ernment employment, ho)e1er, it is the leislat"re and, )here properly i1en deleated po)er, the administrati1e heads of o1ernment
)hich fi@ the terms and conditions of employment. And this is effected thro"h stat"tes or administrati1e circ"lars, r"les, and re"lations, not
thro"h collecti1e barainin areements.
E.O. 3o. 1-<, )hich pro1ides "idelines for the e@ercise of the riht to oraniCe of o1ernment employees, )hile clinin to the same
philosophy, has, ho)e1er, rela@ed the r"le to allo) neotiation )here the terms and conditions of employment in1ol1ed are not amon those
fi@ed by la). Th"s% 75ECT$O3 1.. Terms and conditions of employment or impro1ements thereof, e@cept those that are fi@ed by la), may be
the s"bEect of neotiations bet)een d"ly reconiCed employees: oraniCations and appropriate o1ernment a"thorities.>
The same e@ec"ti1e order has also pro1ided for the eneral mechanism for the settlement of labor disp"tes in the p"blic sector to )it%
75ECT$O3 1*. The Ci1il 5er1ice and labor la)s and proced"res, )hene1er applicable, shall be follo)ed in the resol"tion of complaints,
rie1ances and cases in1ol1in o1ernment employees. $n case any disp"te remains "nresol1ed after e@ha"stin all the a1ailable remedies
"nder e@istin la)s and proced"res, the parties may Eointly refer the disp"te to the ;"blic 5ector 4abor( Manaement Co"ncil for appropriate
action.>
#o1ernment employees may, therefore, thro"h their "nions or associations, either petition the Conress for the betterment of the terms
and conditions of employment )hich are )ithin the ambit of leislation or neotiate )ith the appropriate o1ernment aencies for the
impro1ement of those )hich are not fi@ed by la). $f there be any "nresol1ed rie1ances, the disp"te may be referred to the ;"blic 5ector
4abor ( Manaement Co"ncil for appropriate action. !"t employees in the ci1il ser1ice may not resort to stri2es, )al2(o"ts and other
temporary )or2 stoppaes, li2e )or2ers in the pri1ate sector, to press"re the #o1ernment to accede to their demands. As no) pro1ided
"nder 5ec. 4, R"le $$$ of the R"les and Re"lations to #o1ern the E@ercise of the Riht of #o1ernment( Employees to 5elf( OraniCation,
)hich too2 effect after the instant disp"te arose, 7ItJhe terms and conditions of employment in the o1ernment, incl"din any political
s"bdi1ision or instr"mentality thereof and o1ernment( o)ned and controlled corporations )ith oriinal charters are o1erned by la) and
employees therein shall not stri2e for the p"rpose of sec"rin chanes thereof.>
The 4abor Code itself pro1ides that terms and conditions of employment of o1ernment employees shall be o1erned by the Ci1il 5er1ice
4a), r"les and re"lations. More importantly, E.O. 3o. 1-< 1ests the ;"blic 5ector 4abor ( Manaement Co"ncil )ith E"risdiction o1er
"nresol1ed labor disp"tes in1ol1in o1ernment employees. Clearly, the 34RC has no E"risdiction o1er the disp"te.
This bein the case, the Reional Trial Co"rt )as not precl"ded, in the e@ercise of its eneral E"risdiction "nder !.;. !l. 12,, as amended,
from ass"min E"risdiction o1er the 555:s complaint for damaes and iss"in the inE"ncti1e )rit prayed for therein. Fnli2e the 34RC, the
;"blic 5ector 4abor ( Manaement Co"ncil has not been ranted by la) a"thority to iss"e )rits of inE"nction in labor disp"tes )ithin its
E"risdiction. Th"s, since it is the Co"ncil, and not the 34RC, that has E"risdiction o1er the instant labor disp"te, resort to the eneral co"rts of
la) for the iss"ance of a )rit of inE"nction to enEoin the stri2e is appropriate.
AER INDUSTRIES CORORATION O" THE HILIINES v. HON. BIEN6ENIDO E. LAGUESMA, U*(&,s&$,&t#,2 o/ L#1o, #*(
E0-'o20&*t, HON. HENRY ABEL, D),&$to, o/ t.& D&-#,t0&*t o/ L#1o, #*( E0-'o20&*t R&g)o*#' O//)$& No. FI #*(Io, t.&
R&-,&s&*t#t)o* O//)$&, o/ t.& I*(ust,)#' R&'#t)o*s D)v)s)o* 3.o 3)'' #$t /o, #*( )* .)s 1&.#'/, CO7 BISLIG SUER6ISORY AND
TECHNICAL STA"" EMLOYEES UNION, ASSOCIATED LABOR UNION #*( "EDERATION O" "REE @OR:ERS
"#$ts%
;aper $nd"stries Corporation of the ;hilippines &;$CO;' is enaed in the man"fact"re of paper and timber prod"cts, )ith principal place of
operations at Tabon, !isli, 5"riao del 5"r. $t has o1er ,,<<<employees, ,44 of )hom are s"per1isory and technical staff employees. More
or less 4-7 of these s"per1isory and technical staff employees are sinatory members of the pri1ate respondent ;$CO;(!isli 5"per1isory
and Technical 5taff Employees Fnion &;!5T5EF'.
;!5T5EF instit"ted a ;etition
-
for Certification Election to determine the sole and e@cl"si1e barainin aent of the s"per1isory and
technical staff employees of ;$CO; for collecti1e barainin areement &C!A' p"rposes.
?"rin the pre(election conference, ;$CO; H"estioned and obEected to the incl"sion of some section heads and s"per1isors in the list of
1oters )hose positions it a1erred )ere reclassified as manaerial employees in the liht of the reoraniCation effected by it. Fnder the
7<
Re1ised OraniCational 5tr"ct"re of the ;$CO;, the company )as di1ided into fo"r &4' main b"siness ro"ps, namely% ;aper ;rod"cts
!"siness, Timber ;rod"cts !"siness, 9orest Reso"rce !"siness and 5"pport 5er1ices !"siness. A 1ice( president or assistant 1ice(
president heads each of these b"siness ro"ps. A di1ision manaer heads the di1isions comprisin each b"siness ro"p. A department
manaer heads the departments comprisin each di1ision. 5ection heads and s"per1isors, no) called section manaers and "nit manaers,
head the sections and independent "nits, respecti1ely, comprisin each department. ;$CO; ad1anced the 1ie) that considerin the alleed
present a"thority of these section manaers and "nit manaers to hire and fire, they are classified as manaerial employees, and hence,
ineliible to form or Eoin any labor oraniCation.
9ollo)in the s"bmission by the parties of their respecti1e position papers and e1idence on this iss"e, the Med(Arbiter iss"ed an order,
holdin that s"per1isors and section heads of the petitioner are manaerial employees and therefore e@cl"ded from the list of 1oters for
p"rposes of certification election.
Issu&%
)hether the s"per1isors and section heads of the petitioner are manaerial employees and therefore e@cl"ded from the list of 1oters for
p"rposes of certification election
H&'(% &3ote% This holdin is no loner controllin in liht of the later r"lin of the Co"rt that s"per1isors are officers and members of the
manaerial staff, and hence, fall "nder the term Amanaerial employees:.'
3o. Manaerial employees are ran2ed as Top Manaers, Middle Manaers and 9irst 4ine Manaers. Top and Middle Manaers ha1e the
a"thority to de1ise, implement and control strateic and operational policies )hile the tas2 of 9irst(4ine Manaers is simply to ens"re that
s"ch policies are carried o"t by the ran2(and( file employees of an oraniCation. Fnder this distinction, 7manaerial employees> therefore fall
in 2 cateories, namely, the 7manaers> per se composed of Top and Middle Manaers, and the 7s"per1isors> composed of 9irst(4ine
Manaers. Th"s, the mere fact that an employee is desinated 7manaer> does not ipso facto ma2e him one. ?esination sho"ld be
reconciled )ith the act"al Eob description of the employee, for it is the Eob description that determines the nat"re of employment.
$n this case, a thoro"h dissection of the Eob description of the concerned s"per1isory employees and section heads indisp"tably sho) that
they are not act"ally manaerial b"t only s"per1isory employees since they do not lay do)n company policies. ;$CO;:s contention that the
s"bEect section heads and "nit manaers e@ercise the a"thority to hire and fire
./
is ambi"o"s and H"ite misleadin for the reason that any
a"thority they e@ercise is not s"preme b"t merely ad1isory in character. Theirs is not a final determination of the company policies inasm"ch
as any action ta2en by them on matters relati1e to hirin, promotion, transfer, s"spension and termination of employees is still s"bEect to
confirmation and appro1al by their respecti1e s"perior. Th"s, )here s"ch po)er, )hich is in effect recommendatory in character, is s"bEect to
e1al"ation, re1ie) and final action by the department heads and other hiher e@ec"ti1es of the company, the same, altho"h present, is not
effecti1e and not an e@ercise of independent E"dment as reH"ired by la).
NATIONAL SUGAR RE"INERIES COR. v. NLRC #*( NBSR SUER6ISORY UNION, ?ACI@UA TUC
G.R. No. 181561. M#,$. 4+, 1993
REGALADO, !.
"#$ts%
3ational 5"ar Refineries Corporation &3A5FRE9CO' operates . s"ar refineries located at !"2idnon, $loilo and !atanas. The !atanas
refinery )as pri1atiCed on April 11, 1,,2 p"rs"ant to ;roclamation 3o. /<. 1 ;ri1ate respondent "nion represents the former s"per1isors of
the 3A5FRE9CO !atanas 5"ar Refinery.
;etitioner implemented a +ob E1al"ation &+E' ;roram affectin all employees, from ran2(and(file to department heads. The +E ;roram
)as desined to rationaliCed the d"ties and f"nctions of all positions, reestablish le1els of responsibility, and reconiCe both )ae and
operational str"ct"res. +obs )ere ran2ed accordin to effort, responsibility, trainin and )or2in conditions and relati1e )orth of the Eob. As a
res"lt, all positions )ere re(e1al"ated, and all employees incl"din the members of respondent "nion )ere ranted salary adE"stments and
increases in benefits commens"rate to their act"al d"ties and f"nctions.
9or abo"t ten years prior to the +E ;roram, the members of respondent "nion )ere treated in the same manner as ran2(and file
employees. As s"ch, they "sed to be paid o1ertime, rest day and holiday pay p"rs"ant to the pro1isions of Articles -7, ,. and ,4 of the 4abor
Code as amended. 6ith the implementation of the +E ;roram, the follo)in adE"stments )ere made% &1' the members of respondent "nion
)ere re(classified "nder le1els 5(/ to 5(- )hich are considered manaerial staff for p"rposes of compensation and benefits0 &2' there )as an
increase in basic pay of the a1erae of /<N of their basic pay prior to the +E ;roram, )ith the "nion members no) enEoyin a )ide ap
&;1,2*,.<< per month' in basic pay compared to the hihest paid ran2(and(file employee0 &.' lone1ity pay )as increased on top of
71
alinment adE"stments0 &4' they )ere entitled to increased company CO4A of ;22/.<< per month0 &/' there )as a rant of ;1<<.<<
allo)ance for rest day=holiday )or2.
T)o years after the implementation of the +E ;roram, specifically on +"ne 2<, 1,,<, the members of herein respondent "nion filed a
complainant )ith the e@ec"ti1e labor arbiter for non(payment of o1ertime, rest day and holiday pay alleedly in 1iolation of Article 1<< of the
4abor Code.
Issu&%
6O3 s"per1isory employees, as defined in Article 212 &m', !oo2 D of the 4abor Code, sho"ld be considered as officers or members of
the manaerial staff "nder Article -2, !oo2 $$$ of the same Code, and hence are not entitled to o1ertime rest day and holiday pay
H&'(%
$t is not disp"ted that the members of respondent "nion are s"per1isory employees, as defined employees, as defined "nder Article
212&m', !oo2 D of the 4abor Code on 4abor Relations, )hich reads%
7&m' AManaerial employee: is one )ho is 1ested )ith po)ers or preroati1es to lay do)n and e@ec"te manaement policies and=or to hire,
transfer, s"spend, lay(off, recall, dischared, assin or discipline employees. 5"per1isory employees are those )ho, in the interest of the
employer effecti1ely recommend s"ch manaerial actions if the e@ercise of s"ch a"thority is not merely ro"tinary or clerical in nat"re b"t
reH"ires the "se of independent E"dment. All employees not fallin )ithin any of those abo1e definitions are considered ran2(and(file
employees of this !oo2.>
;etitioner, ho)e1er, a1ers that for p"rposes of determinin )hether or not the members of respondent "nion are entitled to o1ertime, rest day
and holiday pay, said employees sho"ld be considered as 7officers or members of the manaerial staff> as defined "nder Article -2, !oo2 $$$
of the 4abor Code on 76or2in Conditions and Rest ;eriods> and amplified in 5ection 2, R"le $, !oo2 $$$ of the R"les to $mplement the 4abor
Code, to )it%
7Art. -2 #overage. K The pro1isions of this title shall apply to employees in all establishments and "nderta2ins )hether for profit or not,
b"t not to o1ernment employees, manaerial employees, field personnel, members of the family of the employer )ho are dependent on him
for s"pport, domestic helpers, persons in the personal ser1ice of another, and )or2ers )ho are paid by res"lts as determined by the
5ecretary of 4abor in Appropriate re"lations.>
M#*#g&,)#' &0-'o2&&s refer to those )hose primary d"ty consists of the manaement of the establishment in )hich they are employed
or of a department or s"bdi1ision thereof, and to other officers or members of the manaerial staff.
7A5ec. 2. E(emption. K The pro1isions of this r"le shall not apply to the follo)in persons if they H"alify for e@emption "nder the condition set
forth herein%
@@@ @@@ @@@
&b' Manaerial employees, if they meet all of the follo)in conditions, namely%
4. Their primary d"ty consists of the manaement of the establishment in )hich they are employed or of a department or s"bdi1ision
thereof%
/. They c"stomarily and re"larly direct the )or2 of t)o or more employees therein%
*. They ha1e the a"thority to hire or fire other employees of lo)er ran20 or their s"estions and recommendations as to the hirin
and firin and as to the promotion or any other chane of stat"s of other employees are i1en partic"lar )eiht.
&c' Officers or members of a manaerial staff if they perform the follo)in d"ties and responsibilities%
/. The primary d"ty consists of the performance of )or2 directly related to manaement policies of their employer0
*. C"stomarily and re"larly e@ercise discretion and independent E"dment0
7. &i' Re"larly and directly assist a proprietor or a manaerial employee )hose primary d"ty consists of the manaement of the
establishment in )hich he is employed or s"bdi1ision thereof0 or &ii' e@ec"te "nder eneral s"per1ision )or2 alon specialiCed or
technical lines reH"irin special trainin, e@perience, or 2no)lede0 or &iii' e@ec"te "nder eneral s"per1ision special assinments
and tas2s0 and
-. 6ho do not de1ote more 2< percent of their ho"rs )or2ed in a )or2()ee2 to acti1ities )hich are not directly and closely related to
the performance of the )or2 described in pararaphs &1', &2', and abo1e.>
72
The H"estion )hether a i1en employee is e@empt from the benefits of the la) is a fact"al one dependent on the circ"mstances of the
partic"lar case, $n determinin )hether an employee is )ithin the terms of the stat"tes, the criterion is the character of the )or2 performed,
rather than the title of the employee:s position.
The +ob Dal"e Contrib"tion 5tatements 7 of the "nion members )ill sho) that these s"per1isory employees are "nder the direct
s"per1ision of their respecti1e department s"perintendents and that enerally they assist the latter in plannin, oraniCin, staffin, directin,
controllin comm"nicatin and in ma2in decisions in attainin the company:s set oals and obEecti1es. These s"per1isory employees are
li2e)ise responsible for the effecti1e and efficient operation of their respecti1e departments. More specifically, their d"ties and f"nctions
incl"de, amon others, the follo)in operations )hereby the employee%
12. assists the department s"perintendent in the follo)in%
. plannin of systems and proced"res relati1e to department acti1ities0
h. oraniCin and sched"lin of )or2 acti1ities of the department, )hich incl"des employee shiftin sched"led and mannin
complement0
i. decision ma2in by pro1idin rele1ant information data and other inp"ts0
E. attainin the company:s set oals and obEecti1es by i1in his f"ll s"pport0
2. selectin the appropriate man to handle the Eob in the department0 and
l. preparin ann"al departmental b"det0
1.. obser1es, follo)s and implements company policies at all times and recommends disciplinary action on errin s"bordinates0
14. trains and "ides s"bordinates on ho) to ass"me responsibilities and become more prod"cti1e0
1/. cond"cts semi(ann"al performance e1al"ation of his s"bordinates and recommends necessary action for their
de1elopment=ad1ancement0
1*. represents the s"perintendent or the department )hen appointed and a"thoriCed by the former0
17. coordinates and comm"nicates )ith other inter and intra department s"per1isors )hen necessary0
1-. recommends disciplinary actions=promotions0
1,. recommends meas"res to impro1e )or2 methods, eH"ipment performance, H"ality of ser1ice and )or2in conditions0
2<. sees to it that safety r"les and re"lations and proced"re and are implemented and follo)ed by all 3A5FRE9CO employees,
recommends re1isions or modifications to said r"les )hen deemed necessary, and initiates and prepares reports for any obser1ed
abnormality )ithin the refinery0
21. s"per1ises the acti1ities of all personnel "nder him and oes to it that instr"ctions to s"bordinates are properly implemented0 and
22. performs other related tas2s as may be assined by his immediate s"perior.
The members of respondent "nion dischare d"ties and responsibilities )hich inel"ctably H"alify them as officers or members of the
manaerial staff, as defined in 5ection 2, R"le $ !oo2 $$$ of the aforestated R"les to $mplement the 4abor Code, 1iC.% &1' their primary d"ty
consists of the performance of )or2 directly related to manaement policies of their employer0 &2' they c"stomarily and re"larly e@ercise
discretion and independent E"dment0 &.' they re"larly and directly assist the manaerial employee )hose primary d"ty consist of the
manaement of a department of the establishment in )hich they are employed &4' they e@ec"te, "nder eneral s"per1ision, )or2 alon
specialiCed or technical lines reH"irin special trainin, e@perience, or 2no)lede0 &/' they e@ec"te, "nder eneral s"per1ision, special
assinments and tas2s0 and &*' they do not de1ote more than 2<N of their ho"rs )or2ed in a )or2()ee2 to acti1ities )hich are not directly
and clearly related to the performance of their )or2 hereinbefore described.
The "nion members sho"ld be considered as officers and members of the manaerial staff and are, therefore, e@empt from the co1erae of
Article -2. ;erforce, they are not entitled to o1ertime, rest day and holiday.
UNION O" "ILIRO EMLOYEES ?U"EA v. BENIGNO 6I6AR, !R., NATIONAL LABOR RELATIONS COMMISSION #*( NESTLJ
HILIINES, INC. ?/o,0&,'2 "ILIRO, INC.A
G.R. No. 59499 !#*u#,2 48, 1994
"#$ts%
9ilipro, $nc. &no) 3estle ;hilippines, $nc.' filed )ith the 3ational 4abor Relations Commission &34RC' a petition for declaratory relief see2in
a r"lin on its rihts and obliations respectin claims of its monthly paid employees for holiday pay in the liht of the Co"rt:s decision in
#hartered 8an$ Employees /ssociation v. ple.
Arbitrator Di1ar rendered a decision directin 9ilipro to pay its monthly paid employees holiday pay p"rs"ant to Article ,4 of the Code, s"bEect
only to the e@cl"sions and limitations specified in Article -2 and s"ch other leal restrictions as are pro1ided for in the Code.
7.
9ilipro filed a motion for clarification see2in &1' the limitation of the a)ard to three years, &2' the e@cl"sion of salesmen, sales
representati1es, tr"c2 dri1ers, merchandisers and medical representati1es &hereinafter referred to as sales personnel' from the a)ard of the
holiday pay, and &.' ded"ction from the holiday pay a)ard of o1erpayment for o1ertime, niht differential, 1acation and sic2 lea1e benefits
d"e to the "se of 2/1 di1isor.
;etitioner F9E ans)ered that the a)ard sho"ld be made effecti1e from the date of effecti1ity of the 4abor Code, that their sales personnel
are not field personnel and are therefore entitled to holiday pay, and that the "se of 2/1 as di1isor is an established employee benefit )hich
cannot be diminished.
The respondent arbitrator iss"ed an order declarin that the effecti1ity of the holiday pay a)ard shall retroact to 3o1ember 1, 1,74, the date
of effecti1ity of the 4abor Code. 8e adE"ded, ho)e1er, that the company:s sales personnel are field personnel and, as s"ch, are not entitled
to holiday pay. 8e li2e)ise r"led that )ith the rant of 1< days: holiday pay, the di1isor sho"ld be chaned from 2/1 to 2*1 and ordered the
reimb"rsement of o1erpayment for o1ertime, niht differential, 1acation and sic2 lea1e pay d"e to the "se of 2/1 days as di1isor.
Issu& K 1% 3hether or not 3estle:s sales personnel are entitled to holiday pay0 and
H&'( K 1%
The petitioner maintains that the period bet)een -%<< a.m. to 4%<< or 4%.< p.m. comprises the sales personnel:s )or2in ho"rs )hich can be
determined )ith reasonable certainty.
The Co"rt does not aree. The la) reH"ires that the act"al ho"rs of )or2 in the field be reasonably ascertained. The company has no )ay of
determinin )hether or not these sales personnel, e1en if they report to the office before -%<< a.m. prior to field )or2 and come bac2 at 4%.<
p.m, really spend the ho"rs in bet)een in act"al field )or2.
The petitioner asserts that the company:s sales personnel are strictly s"per1ised as sho)n by the 5O? &5"per1isor of the ?ay' sched"le and
the company circ"lar dated March 1/, 1,-4.
The 5O? sched"le ad1erted to by the petitioner does not in the least sinify that these sales personnel:s time and performance are
s"per1ised. The p"rpose of this sched"le is merely to ens"re that the sales personnel are o"t of the office not later than -%<< a.m. and are
bac2 in the office not earlier than 4%<< p.m.
4i2e)ise, the Co"rt fails to see ho) the company can monitor the n"mber of act"al ho"rs spent in field )or2 by an employee thro"h the
imposition of sanctions on absenteeism contained in the company circ"lar of March 1/, 1,-4.
The criteria for rantin incenti1e bon"s are% &1' attainin or e@ceedin sales 1ol"me based on sales taret0 &2' ood collection performance0
&.' proper compliance )ith ood mar2et hyiene0 &4' ood merchandisin )or20 &/' minimal mar2et ret"rns0 and &*' proper tr"c2
maintenance.
The abo1e criteria indicate that these sales personnel are i1en incenti1e bon"ses precisely beca"se of the diffic"lty in meas"rin their
act"al ho"rs of field )or2. These employees are e1al"ated by the res"lt of their )or2 and not by the act"al ho"rs of field )or2 )hich are
hardly s"sceptible to determination.
Issu& K 4%
)hether or not, concomitant )ith the a)ard of holiday pay, the di1isor sho"ld be chaned from 2/1 to 2*1 days and )hether or not the
pre1io"s "se of 2/1 as di1isor res"lted in o1erpayment for o1ertime, niht differential, 1acation and sic2 lea1e pay
H&'( K 4%
9ollo)in the criterion laid do)n in the #hartered 8an$ case, the "se of 2/1 days: di1isor by respondent 9ilipro indicates that holiday pay is
not yet incl"ded in the employee:s salary, other)ise the di1isor sho"ld ha1e been 2*1.
The respondent arbitrator:s order to chane the di1isor from 2/1 to 2*1 days )o"ld res"lt in a lo)er daily rate )hich is 1iolati1e of the
prohibition on non(dimin"tion of benefits fo"nd in Article 1<< of the 4abor Code. To maintain the same daily rate if the di1isor is adE"sted to
2*1 days, then the di1idend, )hich represents the employee:s ann"al salary, sho"ld correspondinly be increased to incorporate the holiday
pay. There is th"s no merit in respondent 3estle:s claim of o1erpayment of o1ertime and niht differential pay and sic2 and 1acation lea1e
benefits, the comp"tation of )hich are all based on the daily rate, since the daily rate is still the same before and after the rant of holiday
pay.
74
SAN MIGUEL BRE@ERY, INC., v. DEMOCRATIC LABOR ORGANI;ATION, ET AL.
G.R. No. L718393 !u'2 31, 1963
"#$ts%
After the mornin roll call, the employees lea1e the plant of the company to o on their respecti1e sales ro"tes either at 7%<< a.m. for soft
drin2s tr"c2s, or -%<< a.m. for beer tr"c2s. They do not ha1e a daily time record. The company ne1er reH"ire them to start their )or2 as
o"tside sales personnel earlier than the abo1e sched"le.
The sales ro"tes are so planned that they can be completed )ithin - ho"rs at most, or that the employees co"ld ma2e their sales on their
ro"tes )ithin s"ch n"mber of ho"rs 1ariable in the sense that sometimes they can be completed in less than - ho"rs, sometimes * to 7
ho"rs, or more. The moment these o"tside or field employees lea1e the plant and )hile in their sales ro"tes they are on their o)n, and often
times )hen the sales are completed, or )hen ma2in short trip deli1eries only, they o bac2 to the plant, load aain, and ma2e another
ro"nd of sales. These employees recei1e monthly salaries and sales commissions in 1ariable amo"nts. The amo"nt of compensation they
recei1e is "ncertain dependin "pon their indi1id"al efforts or ind"stry. !esides the monthly salary, they are paid sales commission that
rane from ;.<, ;4<, sometimes ;*<, ;7<, to sometimes ;,<, ;1<< and ;1<, a month, at the rate of ;<.<1 to ;<.<1(W per case.
$t is contended that since the employees concerned are paid a commission on the sales they ma2e o"tside of the reH"ired - ho"rs besides
the fi@ed salary that is paid to them, the Co"rt of $nd"strial Relations erred in orderin that they be paid an o1ertime compensation as
reH"ired by the Eiht(8o"r 4abor 4a) for the reason that the commission they are paid already ta2es the place of s"ch o1ertime
compensation. $ndeed, it is claimed, o1ertime compensation is an additional pay for )or2 or ser1ices rendered in e@cess of - ho"rs a day by
an employee, and if the employee is already i1en e@tra compensation for labor performed in e@cess of - ho"rs a day, he is not co1ered by
the la). 8is sit"ation, the company contends, can be li2ened to an employee )ho is paid on piece()or2, 7pa2iao>, or commission basis,
)hich is e@pressly e@cl"ded from the operation of the Eiht(8o"r 4abor 4a).
Issu&%
)hether or not members of the respondent "nion are entitled to o1ertime and niht(shift differential pay
H&'(%
3o. The Eiht(8o"r 4abor 4a) only has application )here an employee or laborer is paid on a monthly or daily basis, or is paid a monthly or
daily compensation, in )hich case, if he is made to )or2 beyond the reH"isite period of - ho"rs, he sho"ld be paid the additional
compensation prescribed by la). This la) has no application )hen the employee or laborer is paid on a piece()or2, 7pa2iao>, or commission
basis, reardless of the time employed. The philosophy behind this e@emption is that his earnins in the form of commission based on the
ross receipts of the day. 8is participation depends "pon his ind"stry so that the more ho"rs he employs in the )or2 the reater are his
ross ret"rns and the hiher his commission.
The reasons for e@cl"din an o"tside salesman are fairly apparent. 5"ch salesman, to a reater e@tent, )or2s indi1id"ally. There are no
restrictions respectin the time he shall )or2 and he can earn as m"ch or as little, )ithin the rane of his ability, as his ambition dictates. $n
lie" of o1ertime he ordinarily recei1es commissions as e@tra compensation. 8e )or2s a)ay from his employer:s place of b"siness, is not
s"bEect to the personal s"per1ision of his employer, and his employer has no )ay of 2no)in the n"mber of ho"rs he )or2s per day.
MERCIDAR "ISHING CORORATION ,&-,&s&*t&( 12 )ts ,&s)(&*t DOMINGO B. NA6AL v. NATIONAL LABOR RELATIONS
COMMISSION #*( "ERMIN AGAO, !R.
G.R. No. 11495+ O$to1&, 8, 1998
"#$ts%
This case oriinated from a complaint filed by pri1ate respondent 9ermin Aao, +r. aainst petitioner for illeal dismissal, 1iolation of ;.?. 3o.
-/1, and non(payment of fi1e days ser1ice incenti1e lea1e for 1,,<. ;ri1ate respondent had been employed as a 7bodeero> or ship:s
H"artermaster on 9ebr"ary 12, 1,--. 8e complained that he had been constr"cti1ely dismissed by petitioner )hen the latter ref"sed him
assinments aboard its boats after he had reported to )or2 on May 2-, 1,,<.
;ri1ate respondent alleed that he had been sic2 and th"s allo)ed to o on lea1e )itho"t pay for one month from April 2-, 1,,< b"t that
)hen he reported to )or2 at the end of s"ch period )ith a health clearance, he )as told to come bac2 another time as he co"ld not be
reinstated immediately. Thereafter, petitioner ref"sed to i1e him )or2. 9or this reason, pri1ate respondent as2ed for a certificate of
employment from petitioner on 5eptember *, 1,,<. 8o)e1er, )hen he came bac2 for the certificate on 5eptember 1<, petitioner ref"sed to
iss"e the certificate "nless he s"bmitted his resination. 5ince pri1ate respondent ref"sed to s"bmit s"ch letter "nless he )as i1en
separation pay, petitioner pre1ented him from enterin the premises.
7/
The 4abor Arbiter orderin petitioner to reinstate pri1ate respondent )ith bac2)aes, pay him his 1.th month pay and incenti1e lea1e pay for
1,,<. The 34RC, on appeal, "pheld the decision of the 4A. The 34RC dismissed petitioner:s claim that it cannot be held liable for ser1ice
incenti1e lea1e pay by fishermen in its employ as the latter s"pposedly are 7field personnel> and th"s not entitled to s"ch pay "nder the
4abor Code.
Issu&%
)hether fishin cre) members can be classified as field personnel
8eld%
3o. ?"rin the entire co"rse of their fishin 1oyae, fishermen employed by petitioner ha1e no choice b"t to remain on board its 1essel.
Altho"h they perform non(aric"lt"ral )or2 a)ay from petitioner:s b"siness offices, the fact remains that thro"ho"t the d"ration of their
)or2 they are "nder the effecti1e control and s"per1ision of petitioner thro"h the 1essel:s patron or master.
AUTO BUS TRANSORT SYSTEMS, INC. v. ANTONIO BAUTISTA
G.R. No. 196365 M#2 16, 4889
"#$ts%
5ince 24 May 1,,/, respondent Antonio !a"tista has been employed by petitioner A"to !"s Transport 5ystems, $nc. &A"tob"s', as dri1er(
cond"ctor )ith tra1el ro"tes Manila(T""earao 1ia !a"io, !a"io( T""earao 1ia Manila and Manila(Tab"2 1ia !a"io. Respondent )as
paid on commission basis, se1en percent &7N' of the total ross income per tra1el, on a t)ice a month basis.
Respondent )as paid on commission basis, se1en percent &7N' of the total ross income per tra1el, on a t)ice a month basis.
On <. +an"ary 2<<<, )hile respondent )as dri1in A"tob"s 3o. 114 alon 5ta. 9e, 3"e1a DiCcaya, the b"s he )as dri1in accidentally
b"mped the rear portion of A"tob"s 3o. 124, as the latter 1ehicle s"ddenly stopped at a sharp c"r1e )itho"t i1in any )arnin.
Respondent a1erred that the accident happened beca"se he )as compelled by the manaement to o bac2 to Ro@as, $sabela, altho"h he
had not slept for almost 24 ho"rs, as he had E"st arri1ed in Manila from Ro@as, $sabela. Respondent f"rther alleed that he )as not allo)ed
to )or2 "ntil he f"lly paid the amo"nt of ;7/,//1./<, representin thirty percent &.<N' of the cost of repair of the damaed b"ses and that
despite respondent:s pleas for reconsideration, the same )as inored by manaement. After a month, manaement sent him a letter of
termination.
Th"s, respondent instit"ted a Complaint for $lleal ?ismissal )ith Money Claims for nonpayment of 1.th month pay and ser1ice incenti1e
lea1e pay aainst A"tob"s.
Issu& K 1%
)hether or not respondent is entitled to ser1ice incenti1e lea1e "nder Art. ,/
H&'(% K1%
Bes. Respondent is not a field personnel b"t a re"lar employee )ho performs tas2s "s"ally necessary and desirable to the "s"al trade of
petitioner:s b"siness. Accordinly, respondent is entitled to the rant of ser1ice incenti1e lea1e.
$t is of E"dicial notice that alon the ro"tes that are plied by these b"s companies, there are its inspectors assined at strateic places )ho
board the b"s and inspect the passeners, the p"nched tic2ets, and the cond"ctor:s reports. There is also the mandatory once(a()ee2 car
barn or shop day, )here the b"s is re"larly chec2ed as to its mechanical, electrical, and hydra"lic aspects, )hether or not there are
problems thereon as reported by the dri1er and=or cond"ctor. They too, m"st be at specific place as IsicJ specified time, as they enerally
obser1e prompt depart"re and arri1al from their point of oriin to their point of destination. $n each and e1ery depot, there is al)ays the
?ispatcher )hose f"nction is precisely to see to it that the b"s and its cre) lea1e the premises at specific times and arri1e at the estimated
proper time. These, are present in the case at bar. The dri1er, the complainant herein, )as therefore "nder constant s"per1ision )hile in the
performance of this )or2. 8e cannot be considered a field personnel.
Issu& K 4%
)hether or not the .(year prescripti1e period pro1ided "nder Article 2,1 of the 4abor Code, as amended, is applicable to respondent:s claim
of ser1ice incenti1e lea1e pay
H&'( K 4%
7*
Article 2,1 of the 4abor Code states that all money claims arisin from employer(employee relationship shall be filed )ithin three &.' years
from the time the ca"se of action accr"ed0 other)ise, they shall be fore1er barred.
$n the application of this section of the 4abor Code, the pi1otal H"estion to be ans)ered is )hen does the ca"se of action for money claims
accr"e in order to determine the rec2onin date of the three(year prescripti1e period.
To properly constr"e Article 2,1 of the 4abor Code, it is essential to ascertain the time )hen the third element of a ca"se of action transpired.
5tated differently, in the comp"tation of the three(year prescripti1e period, a determination m"st be made as to the period )hen the act
constit"tin a 1iolation of the )or2ers: riht to the benefits bein claimed )as committed. 9or if the ca"se of action accr"ed more than .
years before the filin of the money claim, said ca"se of action has already prescribed in accordance )ith Article 2,1.
ConseH"ently, in cases of nonpayment of allo)ances and other monetary benefits, if it is established that the benefits bein claimed ha1e
been )ithheld from the employee for a period loner than . years, the amo"nt pertainin to the period beyond the three(year prescripti1e
period is therefore barred by prescription. The amo"nt that can only be demanded by the arie1ed employee shall be limited to the amo"nt
of the benefits )ithheld )ithin . years before the filin of the complaint.
The ca"se of action of an entitled employee to claim his ser1ice incenti1e lea1e pay accr"es from the moment the employer ref"ses to
rem"nerate its monetary eH"i1alent if the employee did not ma2e "se of said lea1e credits b"t instead chose to a1ail of its comm"tation.
Accordinly, if the employee )ishes to acc"m"late his lea1e credits and opts for its comm"tation "pon his resination or separation from
employment, his ca"se of action to claim the )hole amo"nt of his acc"m"lated ser1ice incenti1e lea1e shall arise )hen the employer fails to
pay s"ch amo"nt at the time of his resination or separation from employment.
Applyin Article 2,1 of the 4abor Code in liht of this pec"liarity of the ser1ice incenti1e lea1e, )e can concl"de that the three &.'(year
prescripti1e period commences, not at the end of the year )hen the employee becomes entitled to the comm"tation of his ser1ice incenti1e
lea1e, b"t from the time )hen the employer ref"ses to pay its monetary eH"i1alent after demand of comm"tation or "pon termination of the
employee:s ser1ices, as the case may be.
$n the case at bar, respondent had not made "se of his ser1ice incenti1e lea1e nor demanded for its comm"tation "ntil his employment )as
terminated by petitioner. 3either did petitioner compensate his acc"m"lated ser1ice incenti1e lea1e pay at the time of his dismissal. $t )as
only "pon his filin of a complaint for illeal dismissal, one month from the time of his dismissal, that respondent demanded from his former
employer comm"tation of his acc"m"lated lea1e credits. 8is ca"se of action to claim the payment of his acc"m"lated ser1ice incenti1e lea1e
th"s accr"ed from the time )hen his employer dismissed him and failed to pay his acc"m"lated lea1e credits.
Therefore, the prescripti1e period )ith respect to his claim for ser1ice incenti1e lea1e pay only commenced from the time the employer failed
to compensate his acc"m"lated ser1ice incenti1e lea1e pay at the time of his dismissal. 5ince respondent had filed his money claim after
only one month from the time of his dismissal, necessarily, his money claim )as filed )ithin the prescripti1e period pro1ided for by Article 2,1
of the 4abor Code.
ALE!ANDRO MARAGUINOT, !R. #*( AULINO ENERO v. NATIONAL LABOR RELATIONS COMMISSION ?SECOND DI6ISIONA
$o0-os&( o/ ,&s)()*g Co00)ss)o*&, RAUL T. AGUINO, Co00)ss)o*&, ROGELIO I. RAYALA #*( Co00)ss)o*&, 6ICTORIANO R.
CALAYCAY ?-onenteA, 6IC DEL ROSARIO #*( 6I6A "IMS
G.R. No. 148969 !#*u#,2 44, 1998
"#$ts%
AleEandro Mara"inot, +r. )as employed by pri1ate respondents on 1- +"ly 1,-, as part of the filmin cre) )ith a salary of ;.7/.<< per
)ee2. Abo"t fo"r months later, he )as desinated Assistant Electrician )ith a )ee2ly salary of ;4<<.<<, )hich )as increased to ;4/<.<< in
May 1,,<. $n +"ne 1,,1, he )as promoted to the ran2 of Electrician )ith a )ee2ly salary of ;47/.<<, )hich )as increased to ;/.,.<< in
5eptember 1,,1.
;a"lino Enero, on his part, claims that pri1ate respondents employed him in +"ne 1,,< as a member of the shootin cre) )ith a )ee2ly
salary of ;.7/.<<, )hich )as increased to ;42/.<< in May 1,,1, then to ;47/.<< on 21 ?ecember 1,,1.
;etitioners: tas2s consisted of loadin, "nloadin and arranin mo1ie eH"ipment in the shootin area as instr"cted by the cameraman,
ret"rnin the eH"ipment to Di1a 9ilms: )areho"se, assistin in the 7fi@in> of the lihtin system, and performin other tas2s that the
cameraman and=or director may assin.
77
5ometime in May 1,,2, petitioners so"ht the assistance of their s"per1isors, Mrs. AleEandria Cesario, to facilitate their reH"est that pri1ate
respondents adE"st their salary in accordance )ith the minim"m )ae la). Mrs. Cesario informed petitioners that Mr. Dic del Rosario )o"ld
aree to increase their salary only if they sined a blan2 employment contract. As petitioners ref"sed to sin, pri1ate respondents forced
Enero to o on lea1e in +"ne 1,,2, then ref"sed to ta2e him bac2 )hen he reported for )or2 on 2< +"ly 1,,2. Mean)hile, Mara"inot )as
dropped from the company payroll from - to 21 +"ne 1,,2, b"t )as ret"rned on 22 +"ne 1,,2. 8e )as aain as2ed to sin a blan2
employment contract, and )hen he still ref"sed, pri1ate respondents terminated his ser1ices on 2< +"ly 1,,2. ;etitioners th"s s"ed for illeal
dismissal before the 4abor Arbiter.
;ri1ate respondents assert that they contract persons called 7prod"cers> K also referred to as 7associate prod"cers> K to 7prod"ce> or ma2e
mo1ies for pri1ate respondents0 and contend that petitioners are proEect employees of the association prod"cers )ho, in t"rn, act as
independent contractors. As s"ch, there is no employer(employee relationship bet)een petitioners and pri1ate respondents.
;ri1ate respondents f"rther contend that it )as the associate prod"cer of the film 7'ahirap 'aging +ogi,> )ho hired petitioner Mara"inot.
The mo1ie shot from 2 +"ly "p to 22 +"ly 1,,2, and it )as only then that Mara"inot )as released "pon payment of his last salary, as his
ser1ices )ere no loner needed. Anent petitioner Enero, he )as hired for the mo1ie entitled 7 Sigaw ng +!so,> later re(tired 7*arito and
+!so.> 8e )ent on 1acation on - +"ne 1,,2, and by the time he reported for )or2 on 2< +"ly 1,,2, shootin for the mo1ie had already been
completed.
Issu& K 1%
)hether an employer(employee relationship e@isted bet)een petitioners and pri1ate respondents or any one of pri1ate respondents
H&'( K1%
The contractin o"t of labor is allo)ed only in case of Eob contractin. 5ection -, R"le D$$$, !oo2 $$$ of the Omnib"s R"les $mplementin the
4abor Code describes permissible Eob contractin in this )ise%
5ec. -. +ob contractin. K There is Eob contractin permissible "nder the Code if the follo)in conditions are met%
7&1' The contractor carries on an independent b"siness and "nderta2es the contract )or2 on his o)n acco"nt "nder his o)n responsibility
accordin to his o)n manner and method, free from the control and direction of his employer or principal in all matters connected )ith the
performance of the )or2 e@cept as to the res"lts thereof0 and
&2' The contractor has s"bstantial capital or in1estment in the form of tools, eH"ipment, machineries, )or2 premises, and other materials
)hich are necessary in the cond"ct of his b"siness.>
Ass"min that the associate prod"cers are Eob contractors, they m"st then be enaed in the b"siness of ma2in motion pict"res. As s"ch,
and to be a Eob contractor "nder the precedin description, associate prod"cers m"st ha1e tools, eH"ipment, machinery, )or2 premises, and
other materials necessary to ma2e motion pict"res. 8o)e1er, the associate prod"cers here ha1e none of these. ;ri1ate respondents:
e1idence re1eals that the mo1ie(ma2in eH"ipment are s"pplied to the prod"cers and o)ned by D$DA. These incl"de enerators, cables and
)ooden platforms, cameras and 7shootin eH"ipment0> in fact, D$DA li2e)ise o)ns the tr"c2s "sed to transport the eH"ipment. $t is th"s clear
that the associate prod"cer merely leases the eH"ipment from D$DA.
;ri1ate respondent f"rther narrated that D$DA:s enerators bro2e do)n d"rin petitioners: last mo1ie proEect, )hich forced the associate
prod"cer concerned to rent enerators, eH"ipment and cre) from another company. This only sho)s that the associate prod"cer did not
ha1e s"bstantial capital nor in1estment in the form of tools, eH"ipment and other materials necessary for ma2in a mo1ie. ;ri1ate
respondents in effect admit that their prod"cers, especially petitioners: last prod"cer, are not enaed in permissible Eob contractin.
$f pri1ate respondents insist that the associate prod"cers are labor contractors, then these prod"cers can only be 7labor(only> contractors,
defined by the 4abor Code as follo)s%
7Art. 1<*. Contractor or s"bcontractor. K
There is 7labor(only> contractin )here the person s"pplyin )or2ers to an employer does not ha1e s"bstantial capital or in1estment in the
form of tools, eH"ipment, machineries, )or2 premises, amon others, and the )or2ers recr"ited and placed by s"ch persons are performin
acti1ities )hich are directly related to the principal b"siness of s"ch employer. $n s"ch cases, the person or intermediary shall be considered
merely as an aent of the employer )ho shall be responsible to the )or2ers in the same manner and e@tent as if the latter )ere directly
employed by him.>
A more detailed description is pro1ided by 5ection ,, R"le D$$$, !oo2 $$$ of the Omnib"s R"les $mplementin the 4abor Code%
7-
75ec. ,. 4abor(only contractin. K &a' Any person )ho "nderta2es to s"pply )or2ers to an employer shall be deemed to be enaed in
labor(only contractin )here s"ch person%
&1' ?oes not ha1e s"bstantial capital or in1estment in the form of tools, eH"ipment, machineries, )or2 premises and other materials0
and
&2' The )or2ers recr"ited and placed by s"ch person are performin acti1ities )hich are directly related to the principal b"siness or
operations of the employer in )hich )or2ers are habit"ally employed.
&b' 4abor(only contractin as defined herein is hereby prohibited and the person actin as contractor shall be considered merely as
an aent or intermediary of the employer )ho shall be responsible to the )or2ers in the same manner and e@tent as if the latter
)ere directly employed by him.
&c' 9or cases not fallin "nder this Article, the 5ecretary of 4abor shall determine thro"h appropriate orders )hether or not the
contractin o"t of labor is permissible in the liht of the circ"mstances of each case and after considerin the operatin needs of
the employer and the rihts of the )or2ers in1ol1ed. $n s"ch case, he may prescribe conditions and restrictions to ins"re the
protection and )elfare of the )or2ers.
As labor(only contractin is prohibited, the la) considers the person or entity enaed in the same a mere aent or intermediary of the direct
employer. !"t e1en by the precedin standards, the associate prod"cers of D$DA cannot be considered labor(only contractors as they did not
s"pply, recr"it nor hire the )or2ers. $n the instant case, it )as +"anita Cesario, 5hootin Fnit 5"per1isor and an employee of D$DA, )ho
recr"ited cre) members from an 7a1ailable ro"p of free(lance )or2ers )hich incl"des the complainants Mara"inot and Enero.> 4+ And in
their Memorand"m, pri1ate respondents declared that the associate prod"cer 7 hires the ser1ices of . . . *' camera cre) )hich incl"des &a'
cameraman0 &b' the "tility cre)0 &c' the technical staff0 &d' enerator man and electrician0 &e' clapper0 etc. . . . .> This clearly sho)ed that the
associate prod"cers did not s"pply the )or2ers reH"ired by the mo1ie proEect.
The relationship bet)een D$DA and its prod"cers or associate prod"cers seems to be that of aency, as the latter ma2e mo1ies on behalf of
D$DA, )hose b"siness is to 7ma2e> mo1ies. As s"ch, the employment relationship bet)een petitioners and prod"cers is act"ally one bet)een
petitioners and D$DA, )ith the latter bein the direct employer.
The employer(employee relationship bet)een petitioners and D$DA can f"rther be established by the 7control test.> 6hile fo"r elements are
"s"ally considered in determinin the e@istence of an employment relationship, namely% &a' the selection and enaement of the employee0
&b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to control of the employee:s cond"ct, the most important
element is the employer:s control of the employee:s cond"ct, not only as to the res"lt of the )or2 to be done b"t also as to the means and
methods to accomplish the same. These fo"r elements are present here. $n their position paper s"bmitted to the 4abor Arbiter, pri1ate
respondents narrated the follo)in circ"mstances%
7The ;RO?FCER has to )or2 )ithin the limits of the b"det he is i1en by the company, for as lon as the "ltimate finished prod"ct is
acceptable to the company.
7The ens"re that H"alify films are prod"ced by the ;RO?FCER )ho is an independent contractor, the company li2e)ise employs a
5"per1isin ;RO?FCER, a ;roEect acco"ntant and a 5hootin "nit s"per1isor. The Company:s 5"per1isin ;RO?FCER is Mr. Eric C"atico,
the ;roEect acco"ntant 1aries from time to time, and the 5hootin Fnit 5"per1isor is Ms. AleEandria Cesario.
7The 5"per1isin ;RO?FCER acts as the eyes and ears of the company and of the E@ec"ti1e ;rod"cer to monitor the proress of the
;RO?FCER:s )or2 accomplishment. 8e is there "s"ally in the field doin the ro"nds of inspection to see if there is any problem that the
;RO?FCER is enco"nterin and to assist in threshin o"t the same so that the film proEect )ill be finished on sched"le. 8e s"per1ises
abo"t . to 7 mo1ie proEects sim"ltaneo"sly IatJ any i1en time by coordinatin )ith each film 7;RO?FCER>. The ;roEect Acco"ntant on the
other hand assists the ;RO?FCER in monitorin the act"al e@penses inc"rred beca"se the company )ants to ins"re that any additional
b"det reH"ested by the ;RO?FCER is really E"stified and )arranted especially )hen there is a chane of oriinal plans to s"it the tastIeJ of
the company on ho) a certain scene m"st be presented to ma2e the film more interestin and more commercially 1iable.>
D$DA:s control is e1ident in its mandate that the end res"lt m"st be a 7H"ality film acceptable to the company.> The means and methods to
accomplish the res"lt are li2e)ise controlled by D$DA, vi,., the mo1ie proEect m"st be finished )ithin sched"le )itho"t e@ceedin the b"det,
and additional e@penses m"st be E"stified0 certain scenes are s"bEect to chane to s"it the taste of the company0 and the 5"per1isin
;rod"cer, the 7eyes and ears> of D$DA and del Rosario, inter1enes in the mo1ie(ma2in process by assistin the associate prod"cer in
sol1in problems enco"ntered in ma2in the film.
$t may not be 1alidly ar"ed then that petitioners are act"ally s"bEect to the mo1ie director:s control, and not D$DA:s direction. The director
merely instr"cts petitioners on ho) to better comply )ith D$DA:s reH"irements to ens"re that a H"ality film is completed )ithin sched"le and
7,
)itho"t e@ceedin the b"det. At bottom, the director is a2in to a s"per1isor )ho merely o1ersees the acti1ities of ran2(and(file employees
)ith control "ltimately restin on the employer.
$t may not be 1alidly ar"ed then that petitioners are act"ally s"bEect to the mo1ie director:s control, and not D$DA:s direction. The director
merely instr"cts petitioners on ho) to better comply )ith D$DA:s reH"irements to ens"re that a H"ality film is completed )ithin sched"le and
)itho"t e@ceedin the b"det. At bottom, the director is a2in to a s"per1isor )ho merely o1ersees the acti1ities of ran2(and(file employees
)ith control "ltimately restin on the employer.
Moreo1er, appointment slips iss"ed to all cre) members state% 7?"rin the term of this appointment yo" shall comply )ith the d"ties and
responsibilities of yo"r position as )ell as obser1e the r"les and re"lations prom"lated by yo"r s"periors and by Top Manaement.:
Aside from control, the element of selection and enaement is li2e)ise present in the instant case and e@ercised by D$DA.
All the circ"mstances indicate an employment relationship bet)een petitioners and D$DA alone, th"s the ine1itable concl"sion is that
petitioners are employees only of D$DA.
Issu& K4%
)hether petitioners )ere "nE"stly dismissed
H&'( K4%
;ri1ate respondents e@pressly admitted that petitioners )ere part of a )or2 pool0 and, )hile petitioners )ere initially hired possibly as proEect
employees, they had attained the stat"s of re"lar employees in 1ie) if D$DA:s cond"ct.
A proEect employee or a member of a )or2 pool may acH"ire the stat"s of a re"lar employee )hen the follo)in conc"r%
1' There is a contin"o"s rehirin of proEect employees e1en after cessation of a proEect0 and
2' The tas2s performed by the alleed 7proEect employee> are 1ital, necessary and indispensable to the "s"al b"siness or trade of the
employer.
8o)e1er, the lenth of time d"rin )hich the employee )as contin"o"sly re(hired is not controllin, b"t merely ser1es as a bade of re"lar
employment.
$n the instant case, the e1idence on record sho)s that petitioner Enero )as employed for a total of 2 years and enaed in at least 1-
proEects, )hile petitioner Mara"inot )as employed for some . years and )or2ed on at least 2. proEects. Moreo1er, as petitioners: tas2s
in1ol1ed, amon other chores, the loadin, "nloadin and arranin of mo1ie eH"ipment in the shootin area as instr"cted by the
cameramen, ret"rnin the eH"ipment to the Di1a 9ilms: )areho"se, and assistin in the 7fi@in> of the lihtin system, it may not be ainsaid
that these tas2s )ere vital, necessary and indispensable to the !s!al b!siness or trade of the employer . As reards the "nderscored phrase,
it has been held that this is ascertained by considerin the nat"re of the )or2 performed and its relation to the scheme of the partic"lar
b"siness or trade in its entirety.
A )or2 pool may e@ist altho"h the )or2ers in the pool do not recei1e salaries and are free to see2 other employment d"rin temporary
brea2s in the b"siness, pro1ided that the )or2er shall be a1ailable )hen called to report for a proEect. Altho"h primarily applicable to re"lar
seasonal )or2ers, this set("p can 1li2e)ise be applied to proEect )or2ers insofar as the effect of temporary cessation of )or2 is concerned.
This is beneficial to both the employer and employee for it pre1ents the "nE"st sit"ation of 7coddlin labor at the e@pense of capital> and at
the same time enables the )or2ers to attain the stat"s of re"lar employees.
once a proEect or )or2 pool employee has been% &1' contin"o"sly, as opposed to intermittently, re(hired by the same employer for the same
tas2s or nat"re of tas2s0 and &2' these tas2s are 1ital, necessary and indispensable to the "s"al b"siness or trade of the employer, then the
employee m"st be deemed a re"lar employee, p"rs"ant to Article 2-< of the 4abor Code and E"rispr"dence.
As petitioners had already ained the stat"s of re"lar employees, their dismissal )as "n)arranted, for the ca"se in1o2ed by pri1ate
respondents for petitioners: dismissal, vi,.% completion of proEect, )as not, as to them, a 1alid ca"se for dismissal "nder Article 2-2 of the
4abor Code. As s"ch, petitioners are no) entitled to bac2 )aes and reinstatement, )itho"t loss of seniority rihts and other benefits that
may ha1e accr"ed. 3e1ertheless, follo)in the principles of 7s"spension of )or2> and 7no pay> bet)een the end of one proEect and the start
of a ne) one, in comp"tin petitioners: bac2 )aes, the amo"nts correspondin to )hat co"ld ha1e been earned d"rin the periods from the
date petitioners )ere dismissed "ntil their reinstatement )hen petitioners: respecti1e 5hootin Fnits )ere not "nderta2in any mo1ie
proEects, sho"ld be ded"cted.
-<
;etitioners )ere dismissed on 2< +"ly 1,,2, at a time )hen Rep"blic Act 3o. *71/ )as already in effect. ;"rs"ant to 5ection .4 thereof
)hich amended 5ection 27, of the 4abor Code of the ;hilippines and 8!stamante v. *LR#, petitioners are entitled to recei1e f"ll bac2
)aes from the date of their dismissal "p to the time of their reinstatement, )itho"t ded"ctin )hate1er earnins deri1ed else)here d"rin
the period of illeal dismissal, s"bEect ho)e1er, to the abo1e obser1ations.
ROLANDO Y. TAN v. LEO6IGILDO LAGRAMA #*( THE HONORABLE COURT O" AEALS
G.R. No. 191448 August 19, 4884
"#$ts%
;etitioner Rolando Tan is the president of 5"preme Theater Corporation and the eneral manaer of Cro)n and Empire Theaters in !"t"an
City. ;ri1ate respondent 4eo1iildo 4arama is a painter, ma2in ad billboards and m"rals for the motion pict"res sho)n at the Empress,
5"preme, and Cro)n Theaters for more than 1< years, from 5eptember 1, 1,-- to October 17, 1,,-.
On October 17, 1,,-, pri1ate respondent 4arama )as s"mmoned by Tan and "pbraided% 7Bo" aain "rinated inside yo"r )or2 area.> 6hen
4arama as2ed )hat Tan )as sayin, Tan told him, 7?on:t say anythin f"rther. $ don:t )ant yo" to dra) anymore. 9rom no) on, no more
dra)in. #et o"t.>
4arama denied the chare aainst him. 8e claimed that he )as not the only one )ho entered the dra)in area and that, e1en if the chare
)as tr"e, it )as a minor infraction to )arrant his dismissal. 8o)e1er, e1erytime he spo2e, Tan sho"ted 7#et o"t>, lea1in him )ith no other
choice b"t to lea1e the premises.
4arama filed a complaint. 8e alleed that he had been illeally dismissed and so"ht rein1estiation and payment of 1.th month pay,
ser1ice incenti1e lea1e pay, salary differential, and damaes.
;etitioner Tan denied that 4arama )as his employee. 8e asserted that 4arama )as an independent contractor )ho did his )or2 accordin
to his methods, )hile he &petitioner' )as only interested in the res"lt thereof. 8e cited the admission of 4arama d"rin the conferences
before the 4abor Arbiter that he )as paid on a fi@ed piece()or2 basis, i.e., that he )as paid for e1ery paintin t"rned o"t as ad billboard or
m"ral for the pict"res sho)n in the three theaters, on the basis of a 7no m"ral=billboard dra)n, no pay> policy. 8e s"bmitted the affida1its of
other cinema o)ners, an am"sement par2 o)ner, and those s"per1isin the constr"ction of a ch"rch to pro1e that the ser1ices of 4arama
)ere contracted by them. 8e denied ha1in dismissed 4arama and alleed that it )as the latter )ho ref"sed to paint for him after he )as
scolded for his habits.
Issu& K 1%
)hether or not an employer(employee relationship e@isted bet)een petitioner and pri1ate respondent
H&'( K1%
$n determinin )hether there is an employer(employee relationship, )e ha1e applied a 7fo"r(fold test,> to )it% &1' )hether the alleed
employer has the po)er of selection and enaement of employees0 &2' )hether he has control of the employee )ith respect to the means
and methods by )hich )or2 is to be accomplished0 &.' )hether he has the po)er to dismiss0 and &4' )hether the employee )as paid
)aes.7 These elements of the employer(employee relationship are present in this case.
.irst. The e@istence in this case of the first element is "ndisp"ted. $t )as petitioner )ho enaed the ser1ices of 4arama )itho"t the
inter1ention of a third party. $t is the e@istence of the second element, the po)er of control, that reH"ires disc"ssion here.
Of the fo"r elements of the employer(employee relationship, the 7control test> is the most important. Compared to an employee, an
independent contractor is one )ho carries on a distinct and independent b"siness and "nderta2es to perform the Eob, )or2, or ser1ice on its
o)n acco"nt and "nder its o)n responsibility accordin to its o)n manner and method, free from the control and direction of the principal in
all matters connected )ith the performance of the )or2 e@cept as to the res"lts thereof.- 8ence, )hile an independent contractor enEoys
independence and freedom from the control and s"per1ision of his principal, an employee is s"bEect to the employer:s po)er to control the
means and methods by )hich the employee:s )or2 is to be performed and accomplished.
$n the case at bar, albeit petitioner Tan claims that pri1ate respondent 4arama )as an independent contractor and ne1er his employee, the
e1idence sho)s that the latter performed his )or2 as painter "nder the s"per1ision and control of petitioner. 4arama )or2ed in a desinated
)or2 area inside the Cro)n Theater of petitioner, for the "se of )hich petitioner prescribed r"les. The r"les incl"ded the obser1ance of
cleanliness and hyiene and a prohibition aainst "rinatin in the )or2 area and any place other than the toilet or the rest rooms. ;etitioner:s
control o1er 4arama:s )or2 e@tended not only to the "se of the )or2 area, b"t also to the res"lt of 4arama:s )or2, and the manner and
means by )hich the )or2 )as to be accomplished.
-1
Moreo1er, it )o"ld appear that petitioner not only pro1ided the )or2place, b"t s"pplied as )ell the materials "sed for the paintins, beca"se
he admitted that he paid 4arama only for the latter:s ser1ices.
Second. That petitioner had the riht to hire and fire )as admitted by him in his position paper s"bmitted to the 34RC, the pertinent portions
of )hich stated%
7Complainant did not 2no) ho) to "se the a1ailable comfort rooms or toilets in and abo"t his )or2 premises. 8e )as "rinatin riht at the
place )here he )as )or2in )hen it )as so easy for him, as e1erybody else did and had he only )anted to, to o to the comfort rooms. !"t
no, the complainant had to ma2e a 1irt"al "rinal o"t of his )or2 placeX The place then st"n2 to hih hea1ens, nat"rally, to the consternation of
respondents and e1eryone )ho co"ld smell the malodor.
7#i1en s"ch circ"mstances, the respondents had e1ery riht, nay all the compellin reason, to fire him from his paintin Eob "pon disco1ery
and his admission of s"ch acts. 3onetheless, tho"h thoro"hly scolded, he )as not fired. $t )as he )ho stopped to paint for respondents.>
!y statin that he had the riht to fire 4arama, petitioner in effect ac2no)leded 4arama to be his employee. 9or the riht to hire and fire is
another important element of the employer(employee relationship.
)hird. ;ayment of )aes is one of the fo"r factors to be considered in determinin the e@istence of employer(employee relation. 6aes are
defined as 7rem"neration or earnins, ho)e1er desinated, capable of bein e@pressed in terms of money, )hether fi@ed or ascertained on a
time, tas2, piece, or commission basis, or other method of calc"latin the same, )hich is payable by an employer to an employee "nder a
)ritten or "n)ritten contract of employment for )or2 done or to be done, or for ser1ices rendered or to be rendered.> That 4arama )or2ed
for Tan on a fi@ed piece()or2 basis is of no moment. ;ayment by res"lt is a method of compensation and does not define the essence of the
relation. $t is a method of comp"tin compensation, not a basis for determinin the e@istence or absence of employer(employee relationship.
One may be paid on the basis of res"lts or time e@pended on the )or2, and may or may not acH"ire an employment stat"s, dependin on
)hether the elements of an employer(employee relationship are present or not.
The R"les $mplementin the 4abor Code reH"ire e1ery employer to pay his employees by means of payroll. The payroll sho"ld sho) amon
other thins, the employee:s rate of pay, ded"ctions made, and the amo"nt act"ally paid to the employee. $n the case at bar, petitioner did
not present the payroll to s"pport his claim that 4arama )as not his employee, raisin spec"lations )hether his fail"re to do so pro1es that
its presentation )o"ld be ad1erse to his case.
The primary standard for determinin re"lar employment is the reasonable connection bet)een the partic"lar acti1ity performed by the
employee in relation to the "s"al trade or b"siness of the employer. $n this case, there is s"ch a connection bet)een the Eob of 4arama
paintin billboards and m"rals and the b"siness of petitioner.
The fact that 4arama )as not reported as an employee to the 555 is not concl"si1e on the H"estion of )hether he )as an employee of
petitioner.
3either does the fact that 4arama painted for other persons affect or alter his employment relationship )ith petitioner. On the other hand,
5am"el Dillalba, for )hom 4arama had rendered ser1ice, admitted in a s)orn statement that he )as told by 4arama that the latter )or2ed
for petitioner.
4arama had been employed by petitioner since 1,--. Fnder the la), therefore, he is deemed a re"lar employee and is th"s entitled to
sec"rity of ten"re, as pro1ided in Art. 27, of 4abor Code%
7ART. 27,. Sec!rity of )en!re. K $n cases of re"lar employment, the employer shall not terminate the ser1ices of an employee e@cept for a
E"st ca"se or )hen a"thoriCed by this Title. An employee )ho is "nE"stly dismissed from )or2 shall be entitled to reinstatement )itho"t loss
of seniority rihts and other pri1ilees and to his f"ll bac2)aes, incl"si1e of allo)ances, and to his other benefits or their monetary
eH"i1alent comp"ted from the time his compensation )as )ithheld from him "p to the time of his act"al reinstatement.>
$f the employee has been performin the Eob for at least one year, e1en if not contin"o"sly b"t intermittently, the repeated and contin"in
need for its performance is s"fficient e1idence of the necessity, if not indispensability, of that acti1ity to the b"siness of his employer. 8ence,
the employment is also considered re"lar, altho"h )ith respect only to s"ch acti1ity, and )hile s"ch acti1ity e@ists.
$t is claimed that 4arama abandoned his )or2. There is no e1idence to sho) this. Abandonment reH"ires t)o elements% &1' the fail"re to
report for )or2 or absence )itho"t 1alid or E"stifiable reason, and &2' a clear intention to se1er the employer(employee relationship, )ith the
second element as the more determinati1e factor and bein manifested by some o1ert acts. Mere absence is not s"fficient. 6hat is more,
-2
the b"rden is on the employer to sho) a deliberate and "nE"stified ref"sal on the part of the employee to res"me his employment )itho"t any
intention of ret"rnin.
Issu& K 4%
)hether pri1ate respondent 4arama )as illeally dismissed
H&'( K 4%
Bes. $n this case, by his ref"sal to i1e 4arama )or2 to do and orderin 4arama to et o"t of his siht as the latter tried to e@plain his side,
petitioner made it plain that 4arama )as dismissed. Frinatin in a )or2 place other than the one desinated for the p"rpose by the
employer constit"tes 1iolation of reasonable re"lations intended to promote a healthy en1ironment "nder Art. 2-2&1' of the 4abor Code for
p"rposes of terminatin employment, b"t the same m"st be sho)n by e1idence. 8ere there is no e1idence that 4arama did "rinate in a
place other than a rest room in the premises of his )or2.
$nstead of orderin his reinstatement as pro1ided in Art. 27, of the 4abor Code, the 4abor Arbiter fo"nd that the relationship bet)een the
employer and the employee has been so strained that the latter:s reinstatement )o"ld no loner ser1e any p"rpose. The parties do not
disp"te this findin. 8ence, the rant of separation pay in lie" of reinstatement is appropriate. This is of co"rse in addition to the payment of
bac2)aes sho"ld be comp"ted from the time of 4arama:s dismissal "p to the time of the finality of this decision, )itho"t any ded"ction or
H"alification.
The !"rea" of 6or2in Conditions classifies )or2ers paid by res"lts into t)o ro"ps, namely0 &1' those )hose time and performance is
s"per1ised by the employer, and &2' those )hose time and performance is "ns"per1ised by the employer. The first in1ol1es an element of
control and s"per1ision o1er the manner the )or2 is to be performed, )hile the second does not. $f a piece )or2er is s"per1ised, there is an
employer(employee relationship, as in this case. 8o)e1er, s"ch an employee is not entitled to ser1ice incenti1e lea1e pay since he is paid a
fi@ed amo"nt for )or2 done, reardless of the time he spent in accomplishin s"ch )or2.
EDRO CHA6E; v. NATIONAL LABOR RELATIONS COMMISSION, SUREME AC:AGING, INC. #*( AL6IN LEE, '#*t M#*#g&,
G.R. No. 1+6938 !#*u#,2 15, 4889
"#$ts%
The respondent company, 5"preme ;ac2ain, $nc., is in the b"siness of man"fact"rin cartons and other pac2ain materials for e@port
and distrib"tion. $t enaed the ser1ices of the petitioner, ;edro Cha1eC, as tr"c2 dri1er on October 2/, 1,-4. As s"ch, the petitioner )as
tas2ed to deli1er the respondent company:s prod"cts from its factory in Mari1eles, !ataan, to its 1ario"s c"stomers, mostly in Metro Manila.
The respondent company f"rnished the petitioner )ith a tr"c2. Most of the petitioner:s deli1ery trips )ere made at nihttime, commencin at
*%<< p.m. from Mari1eles, and ret"rnin thereto in the afternoon t)o or three days after. The deli1eries )ere made in accordance )ith the
ro"tin slips iss"ed by respondent company indicatin the order, time and "rency of deli1ery. $nitially, the petitioner )as paid the s"m of
;./<.<< per trip. This )as later adE"sted to ;4-<.<< per trip and, at the time of his alleed dismissal, the petitioner )as recei1in ;,<<.<<
per trip.
5ometime in 1,,2, the petitioner e@pressed to respondent Al1in 4ee, respondent company:s plant manaer, his &the petitioner:s' desire to
a1ail himself of the benefits that the re"lar employees )ere recei1in s"ch as o1ertime pay, nihtshift differential pay, and 1.th month pay,
amon others. Altho"h he promised to e@tend these benefits to the petitioner, respondent 4ee failed to act"ally do so.
The petitioner filed a complaint for re"lariCation. !efore the case co"ld be heard, respondent company terminated the ser1ices of the
petitioner. ConseH"ently, the petitioner filed an amended complaint aainst the respondents for illeal dismissal, "nfair labor practice and
non(payment of o1ertime pay, nihtshift differential pay, 1.th month pay, amon others.
The respondents, for their part, denied the e@istence of an employer(employee relationship bet)een the respondent company and the
petitioner. They a1erred that the petitioner )as an independent contractor as e1idenced by the contract of ser1ice )hich he and the
respondent company entered into.
Issu& K1%
)hether there e@isted an employer(employee relationship bet)een the respondent company and the petitioner
H&'( K1%
Bes. The elements to determine the e@istence of an employment relationship are% &1' the selection and enaement of the employee0 &2' the
payment of )aes0 &.' the po)er of dismissal0 and &4' the employer:s po)er to control the employee:s cond"ct. The most important element
-.
is the employer:s control of the employee:s cond"ct, not only as to the res"lt of the )or2 to be done, b"t also as to the means and methods
to accomplish it. All the fo"r elements are present in this case.
9irst. Fndeniably, it )as the respondents )ho enaed the ser1ices of the petitioner )itho"t the inter1ention of a third party.
5econd. 6aes are defined as 7rem"neration or earnins, ho)e1er desinated, capable of bein e@pressed in terms of money, )hether
fi@ed or ascertained on a time, tas2, piece or commission basis, or other method of calc"latin the same, )hich is payable by an employer to
an employee "nder a )ritten or "n)ritten contract of employment for )or2 done or to be done, or for ser1ice rendered or to be rendered.>
That the petitioner )as paid on a per trip basis is not sinificant. This is merely a method of comp"tin compensation and not a basis for
determinin the e@istence or absence of employer(employee relationship. One may be paid on the basis of res"lts or time e@pended on the
)or2, and may or may not acH"ire an employment stat"s, dependin on )hether the elements of an employer(employee relationship are
present or not.14 $n this case, it cannot be ainsaid that the petitioner recei1ed compensation from the respondent company for the ser1ices
that he rendered to the latter.
Third. The respondents: po)er to dismiss the petitioner )as inherent in the fact that they enaed the ser1ices of the petitioner as tr"c2
dri1er. They e@ercised this po)er by terminatin the petitioner:s ser1ices albeit in the "ise of 7se1erance of contract"al relation> d"e
alleedly to the latter:s breach of his contract"al obliation.
9o"rth. As earlier opined, of the fo"r elements of the employer(employee relationship, the 7control test> is the most important. Compared to
an employee, an independent contractor is one )ho carries on a distinct and independent b"siness and "nderta2es to perform the Eob, )or2,
or ser1ice on its o)n acco"nt and "nder its o)n responsibility accordin to its o)n manner and method, free from the control and direction of
the principal in all matters connected )ith the performance of the )or2 e@cept as to the res"lts thereof. 8ence, )hile an independent
contractor enEoys independence and freedom from the control and s"per1ision of his principal, an employee is s"bEect to the employer:s
po)er to control the means and methods by )hich the employee:s )or2 is to be performed and accomplished.
Altho"h the respondents denied that they e@ercised control o1er the manner and methods by )hich the petitioner accomplished his )or2, a
caref"l re1ie) of the records sho)s that the latter performed his )or2 as tr"c2 dri1er "nder the respondents: s"per1ision and control. Their
riht of control )as manifested by the follo)in attendant circ"mstances%
1. The tr"c2 dri1en by the petitioner beloned to respondent company0
2. There )as an e@press instr"ction from the respondents that the tr"c2 shall be "sed e@cl"si1ely to deli1er respondent company:s oods0
.. Respondents directed the petitioner, after completion of each deli1ery, to par2 the tr"c2 in either of t)o specific places only, to )it% at its
office in Metro Manila at 2.2< OsmeTa 5treet, Ma2ati City or at !E;U, Mari1eles, !ataan0
4. Respondents determined ho), )here and )hen the petitioner )o"ld perform his tas2 by iss"in to him ate passes and ro"tin slips.
a. The ro"tin slips indicated on the col"mn REMARP5, the chronoloical order and priority of deli1ery s"ch as 1st drop, 2nd drop,
.rd drop, etc. This meant that the petitioner had to deli1er the same accordin to the order of priority indicated therein.
b. The ro"tin slips, li2e)ise, sho)ed )hether the oods )ere to be deli1ered "rently or not by the )ord RF58 printed thereon.
c. The ro"tin slips also indicated the e@act time as to )hen the oods )ere to be deli1ered to the c"stomers as, for e@ample, the
)ords 7tomorro) mornin> )as )ritten on slip no. 277*.
These circ"mstances pro1e that the respondents e@ercised control o1er the means and methods by )hich the petitioner accomplished his
)or2 as tr"c2 dri1er of the respondent company.
Issu& K4%
)hether the respondents 1alidly dismissed the petitioner
H&'( K4%
Bes. As a r"le, the employer bears the b"rden to pro1e that the dismissal )as for a 1alid and E"st ca"se. $n this case, the respondents failed
to pro1e any s"ch ca"se for the petitioner:s dismissal. They insin"ated that the petitioner abandoned his Eob. To constit"te abandonment,
these t)o factors m"st conc"r% &1' the fail"re to report for )or2 or absence )itho"t 1alid or E"stifiable reason0 and &2' a clear intention to
se1er employer(employee relationship. Ob1io"sly, the petitioner did not intend to se1er his relationship )ith the respondent company for at
the time that he alleedly abandoned his Eob, the petitioner E"st filed a complaint for re"lariCation, )hich )as forth)ith amended to one for
illeal dismissal. A chare of abandonment is totally inconsistent )ith the immediate filin of a complaint for illeal dismissal, more so )hen it
incl"des a prayer for reinstatement.
-4
3either can the respondents: claim that the petitioner )as "ilty of ross nelience in the proper maintenance of the tr"c2 constit"te a 1alid
and E"st ca"se for his dismissal. #ross nelience implies a )ant or absence of or fail"re to e@ercise sliht care or dilience, or the entire
absence of care. $t e1inces a tho"htless disreard of conseH"ences )itho"t e@ertin any effort to a1oid them. The nelience, to )arrant
remo1al from ser1ice, sho"ld not merely be gross b"t also habit!al. The sinle and isolated act of the petitioner:s nelience in the proper
maintenance of the tr"c2 alleed by the respondents does not amo"nt to 7ross and habit"al nelect> )arrantin his dismissal.
Th"s, the lac2 of a 1alid and E"st ca"se in terminatin the ser1ices of the petitioner renders his dismissal illeal. Fnder Article 27, of the
4abor Code, an employee )ho is "nE"stly dismissed is entitled to reinstatement, )itho"t loss of seniority rihts and other pri1ilees, and to
the payment of f"ll bac2)aes, incl"si1e of allo)ances, and other benefits or their monetary eH"i1alent, comp"ted from the time his
compensation )as )ithheld from him "p to the time of his act"al reinstatement. 8o)e1er, as fo"nd by the 4abor Arbiter, the circ"mstances
obtainin in this case do not )arrant the petitioner:s reinstatement. A more eH"itable disposition, as held by the 4abor Arbiter, )o"ld be an
a)ard of separation pay eH"i1alent to one month for e1ery year of ser1ice from the time of his illeal dismissal "p to the finality of this
E"dment in addition to his f"ll bac2)aes, allo)ances and other benefits.
UNI6ERSITY O" ANGASINAN "ACULTY UNION v. NATIONAL LABOR RELATIONS COMMISSION #*( UNI6ERSITY O"
ANGASINAN
G.R. Nos. 6+841743 !#*u#,2 49, 1993
"#$ts%
;etitioner filed aainst the Fni1ersity of ;anasinan before the Arbitration !ranch of the 34RC in ?a"pan City complaints for nonpayment
of benefits "nder ;.?. 3o. 171. and emerency cost of li1in allo)ance &ecola' to teachers, and for prompt and acc"rate comp"tation of
benefits "nder ;.?. 3o. 4/1 and the payment of ecolas0 nonpayment of e@tra loads0 nonpayment of salary differentials for s"mmer "nder ;.?.
3o. 4/10 and 1iolation of 6ae Order 3o. 1 and delayed payment of salaries.
Issu&%
)hether petitioner is entitled to the benefits prayed for d"rin, amon others, s"mmer brea2s
H&'(%
Bes. The R"les $mplementin ;.?. 3o. 171. )hich too2 effect on A""st 1-, 1,-< pro1ide%
75ec. *. Allo)ances of f"ll(time and part(time employees. K Employees shall be paid in f"ll the monthly allo)ance on the basis of the scales
pro1ided in 5ection . hereof, reardless of the n"mber of their re"lar )or2in days if they inc"r no absences d"rin the month. $f they inc"r
absences )itho"t pay, the amo"nts correspondin to the absences may be ded"cted from the monthly allo)ance pro1ided that in
determinin the eH"i1alent daily allo)ance of s"ch ded"ction, the applicable monthly allo)ance shall be di1ided by thirty &.<' days.>
This 5ection, )hich is a 1irt"al reprod"ction of 5ection 12 of the old R"les $mplementin ;.?. 3o. 112., has been interpreted by this Co"rt as
reH"irin that the f"ll amo"nt of the cost of li1in allo)ance mandated by la) sho"ld be i1en monthly to each employee if the latter has
)or2ed contin"o"sly for each month, reardless of the n"mber of the re"lar )or2in days.
The 7*o wor$, no pay> principle does not apply in the instant case. The petitioner:s members recei1ed their re"lar salaries d"rin this
period. $t is clear from the . . . la) that it contemplates a 7no )or2> sit"ation )here the employees 1ol"ntarily absent themsel1es. ;etitioners,
in the case at bar, certainly do not, ad vol!ntatem absent themsel1es d"rin semestral brea2s. Rather, they are constrained to ta2e
mandatory lea1e from )or2. 9or this, they cannot be fa"lted nor can they be ber"ded that )hich is d"e them "nder the la). To a certain
e@tent, the pri1ate respondent can specify dates )hen no classes )o"ld be held. 5"rely, it )as not the intention of the framers of the la) to
allo) employers to )ithhold employee benefits by the simple e@pedient of "nilaterally imposin 7no )or2> days and conseH"ently a1oidin
compliance )ith the mandate of the la) for those days.
HILIINE AIRLINES, INC. v. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ROMULUS ROTACIO #*( DR.
HERMINIO A. "ABROS
G.R. No. 134889 "&1,u#,2 4, 1999
"#$ts%
;ri1ate respondent )as employed as fliht s"reon at petitioner company. 8e )as assined at the ;A4 Medical Clinic at 3ichols and )as on
d"ty from 4%<< in the afternoon "ntil 12%<< midniht.
-/
On 9ebr"ary 17, 1,,4, at aro"nd 7%<< in the e1enin, pri1ate respondent left the clinic to ha1e his dinner at his residence, )hich )as abo"t
fi1e(min"te dri1e a)ay. A fe) min"tes later, the clinic recei1ed an emerency call from the ;A4 Caro 5er1ices. One of its employees, Mr.
Man"el Acosta, had s"ffered a heart attac2. The n"rse on d"ty, Mr. Merlino E"sebio, called pri1ate respondent at home to inform him of the
emerency. The patient arri1ed at the clinic at 7%/< in the e1enin and Mr. E"sebio immediately r"shed him to the hospital. 6hen pri1ate
respondent reached the clinic at aro"nd 7%/1 in the e1enin, Mr. E"sebio had already left )ith the patient. Mr. Acosta died the follo)in day.
Fpon learnin abo"t the incident, ;A4 Medical ?irector ?r. #odofredo !. !anCon ordered the Chief 9liht 5"reon to cond"ct an
in1estiation. The Chief 9liht 5"reon, in t"rn, reH"ired pri1ate respondent to e@plain )hy no disciplinary sanction sho"ld be ta2en aainst
him.
$n his e@planation, pri1ate respondent asserted that he )as entitled to a thirty(min"te meal brea20 that he immediately left his residence "pon
bein informed by Mr. E"sebio abo"t the emerency and he arri1ed at the clinic a fe) min"tes later0 that Mr. E"sebio panic2ed and bro"ht
the patient to the hospital )itho"t )aitin for him.
9indin pri1ate respondent:s e@planation "nacceptable, the manaement chared pri1ate respondent )ith abandonment of post )hile on
d"ty. 8e )as i1en ten days to s"bmit a )ritten ans)er to the administrati1e chare.
After e1al"atin the chare as )ell as the ans)er of pri1ate respondent, petitioner company decided to s"spend pri1ate respondent for three
months effecti1e ?ecember 1*, 1,,4.
;ri1ate respondent filed a complaint for illeal s"spension aainst petitioner.
Issu&%
)hether pri1ate respondent )as illeally dismissed
H&'(%
Bes. As reards the leality of pri1ate respondent:s s"spension. The facts do not s"pport petitioner:s alleation that pri1ate respondent
abandoned his post on the e1enin of 9ebr"ary 17, 1,,4. ;ri1ate respondent left the clinic that niht only to ha1e his dinner at his ho"se,
)hich )as only a fe) min"tes: dri1e a)ay from the clinic. 8is )hereabo"ts )ere 2no)n to the n"rse on d"ty so that he co"ld be easily
reached in case of emerency. Fpon bein informed of Mr. Acosta:s condition, pri1ate respondent immediately left his home and ret"rned to
the clinic. These facts belie petitioner:s claim of abandonment.
The eiht(ho"r )or2 period does not incl"de the meal brea2. 3o)here in the la) may it be inferred that employees m"st ta2e their meals
)ithin the company premises. Employees are not prohibited from oin o"t of the premises as lon as they ret"rn to their posts on time.
;ri1ate respondent:s act, therefore, of oin home to ta2e his dinner does not constit"te abandonment.
HILIINES ENGINEERS= SYNDICATE, INC. v. HON. !OSE S. BAUTISTA, ARSENIO I. MARTINE;, BALTA;AR M. 6ILLANUE6A,
EMILIO C. TABIGNE #*( AMADO C. BUGAYONG, ,&s)()*g !u(g& #*( Asso$)#t& !u(g&s ,&s-&$t)v&'2 o/ t.& Cou,t o/ I*(ust,)#'
R&'#t)o*sL "EDERICO BENITE;, DE@EY BAYING, ANDRES ULAS, DEL"IN GALASGAS, GUE;ON BASORA, ET AL.
G.R. No. L716++8 "&1,u#,2 49, 196+
"#$ts%
On ?ecember 2-, 1,/-, respondent 9ederico !eniteC toether )ith *4 other employees of petitioner, a domestic corporation enaed in the
constr"ction b"siness, loded a complaint )ith respondent co"rt, allein that they had been employed by the firm in 1ario"s capacities0 that
they had rendered nihttime ser1ice d"rin certain periods at 1ario"s rates per ho"r0 that for Eobs of similar nat"re and cateory, petitioner
only paid them )aes eH"i1alent to those of )or2ers on the day shift, )itho"t any e@tra compensation for niht )or20 that for s"ch niht
)or2, they )ere entitled to additional compensation of /<N0 and that to prosec"te their claim, they )ere forced to hire co"nsel for an areed
fee of 1<N of s"ch claim. The complaint attached a sched"le of their names, bade n"mbers, rates of pay, n"mber of days, total daytime
compensation act"ally recei1ed and the e@pected /<N differential increment pay.
Issu&%
)hether or not "pon the enactment of Rep"blic Act -7/, the C$R lost its E"risdiction o1er claims for additional compensation for re"lar niht
)or2
H&'(%
The broad po)ers conferred by Common)ealth Act 1<. on the C$R ha1e been c"rtailed by Rep"blic Act -7/ )hich limited them to the fo"r
cateories therein e@pressed, in line )ith the p"blic policy of allo)in settlement of ind"strial disp"tes 1ia the collecti1e barainin process0
-*
b"t )e find no coent reason for concl"din that a s"it of this nat"re K for e@tra compensation for niht )or2 falls o"tside the domain of
ind"strial co"rt )ithal, the record does not sho) that employer(employee relation bet)een the */ respondents the petitioner had ceased.
After the passae of Rep"blic Act -7/, this Co"rt not only "pheld the ind"strial co"rts ass"mption of E"risdiction o1er cases for salary
differentials and o1ertime pay or for payment of additional compensation for rendered on 5"ndays and holidays and for niht )or2 b"t has
also s"pported s"ch co"rt r"lin that )or2 at niht sho"ld be paid more than )or2 done at daytime, and that if that )or2 is done beyond the
)or2er:s re"lar ho"rs of d"ty, he sho"ld also be paid additional compensation for o1ertime )or2.
CRISTONICO B. LEGAHI v. NATIONAL LABOR RELATIONS COMMISSION #*( UNITED HILIINE LINES, INC., NORTHSOUTH
SHI MGT., ?TEA, LTD., SINGAORE, GREGORIO 6. DE LIMA, !R., TOR :ARLSEN #*( IONEER INSURANCE < SURETY COR.
G.R. No. 1444+8 Nov&01&, 18, 1999
"#$ts%
$n a complaint filed )ith the ;hilippine O1erseas Employment Administration &;OEA', Cristonico !. 4eahi alleed that he )as hired as
7Chief Coo2> aboard M=D 79ederal 3ord> by the 3orthso"th 5hip Manaement &;TE', 4td., 5inapore and represented by its local aent
Fnited ;hilippine 4ines, $nc. &F;4$'.
The contract of employment stip"lated that his term of employment )as for ten months beinnin October ,, 1,,2 )ith a basic monthly
salary of F5M4/<.<< )ith 44 ho"rs )ee2ly as minim"m n"mber of ho"rs )or2ed )ith a fi@ed o1ertime pay &OT' of M1-/.<< and . days lea1e
)ith pay e1ery month.
5ometime in 3o1ember, 1,,2 petitioner )as as2ed by the 5hipmaster to prepare a 1ict"allin cost statement for the month of October, 1,,2.
After learnin that s"ch preparation in1ol1es mathematical s2ills, as it )o"ld reH"ire estimation of food cost, 1al"e of stoc2s, etc. he intimated
that he did not 2no) ho) to do s"ch )or2 as it )as not part of the d"ties of a chief coo2. 8e )as told that it )as not a diffic"lt Eob and that he
only needed to copy the pre1io"s forms. After m"ch rel"ctance, petitioner nonetheless prepared the statement in deference to the
5hipmaster.
$n ?ecember, petitioner )as reH"ested aain to prepare the 1ict"allin cost statement for the month of 3o1ember. 8e obeyed since he )as
afraid he )o"ld earn the ire of his s"periors if he ref"sed.
5ometime in +an"ary, 1,,., the 5hipmaster as2ed petitioner to do the 1ict"allin cost statement for ?ecember )hich he complied. On
+an"ary *, 1,,., the 5hipmaster reH"ested the petitioner to prepare a corrected 1ict"allin statement for the same month of ?ecember.
;etitioner as2ed the 5hipmaster if he co"ld defer the correction as he )as b"sy doin his chores. The response certainly did not sit )ell )ith
the 5hipmaster so he )as called for a meetin )hich petitioner did not attend.
On +an"ary 14, 1,,., a committee )as formed headed by the 5hipmaster himself )ith the Chief Officer, Chief Enineer and !os"n as
members.
$n this meetin, the 5hipmaster read to him the offenses he committed on board. 8e )as as2ed to ans)er the chares b"t petitioner opted to
remain silent. Thereafter, petitioner )as informed that he )as dismissed.
The ne@t day, petitioner )as repatriated to the ;hilippines thro"h the assistance of the ;hilippine Cons"late.
Fpon arri1al or on 9ebr"ary 1*, 1,,., petitioner filed )ith the ;OEA a complaint for illeal dismissal aainst pri1ate respondents. 8e so"ht
the payment of his salary correspondin to the "ne@pired portion of his contract, "npaid o1ertime pay, lea1e pay, salary differential and
damaes.
Issu&%
)hether petitioner:s dismissal from his employment is 1alid
H&'(%
3o. To constit"te a 1alid dismissal from employment, t)o &2' reH"isites m"st conc"r% &a' the dismissal m"st be for any of the ca"ses pro1ided
in Article 2-2 of the 4abor Code, and &b' the employee m"st be accorded d"e process, the elements of )hich are notice and the opport"nity
to be heard and to defend himself. ;roced"ral d"e process reH"ires that the employee m"st be apprised of the chares aainst him. 8e
m"st be i1en reasonable time to ans)er the chares, allo)ed ample opport"nity to be heard and defend himself, and assisted by a
representati1e if the employee so desires. T)o )ritten notices are reH"ired before termination of employment can be leally effected. They
are% &1' notice )hich apprises the employee of the partic"lar acts or omissions for )hich his dismissal is so"ht, and &2' the s"bseH"ent
-7
notice )hich informs the employee of the employer:s decision to dismiss him0 3 not to mention the opport"nity to ans)er and reb"t the
chares aainst him, in bet)een s"ch notices.
$n the case at bar, the e1idence on record belies pri1ate respondents: claim that petitioner )as afforded d"e process.
as early as +an"ary *, 1,,., the employer had already decided to dismiss petitioner and sent home for his alleed ref"sal to obey the orders
of his s"periors. On +an"ary 14, 1,,., the committee read to petitioner his alleed offenses )hich )ere his ref"sal to ta2e orders from his
s"perior on +an"ary * and his lea1in the 1essel )itho"t permission on +an"ary 1.. 6hen petitioner remained silent, the committee informed
him that he )as dismissed. 8e )as sent home that same day. ;etitioner )as not i1en reasonable time to ans)er the chares h"rled aainst
him or to defend himself. The notice apprisin him of the chares and the notice of dismissal )ere done in one mornin K all in the +an"ary
14 committee hearin. The s"bmission that the entry in the loboo2 made on +an"ary * )hich stated that for petitioner:s ref"sal 7to ta2e
orders from the master of the ship he )ill be sent home in first possible port> )as s"fficient compliance of the first notice reH"irement is not
)ell(ta2en. This is not the 2ind of notice that satisfies d"e process contemplated by la). $n s"ch a case )here there is a fail"re to comply
)ith the reH"irements of the la) as to the notice and hearin, the dismissal is certainly tainted )ith illeality.
On the s"bstanti1e iss"e, there is no E"st ca"se for petitioner:s dismissal. The 1ict"allin cost statement for the month of +an"ary )as not yet
d"e )hen he )as as2ed to prepare the same on +an"ary * of that month. A 1ict"allin cost statement )as necessary to sho) the food
e@pense inc"rred for the past month, not for the present month. Th"s, from the 1ict"allin statements s"bmitted for the month of October,
3o1ember and ?ecember, 1,,2, it can be seen that the period indicated therein bean on the first day of each month and ended on the last
day of said month. This means that the report for October )as made in 3o1ember, for 3o1ember in ?ecember, and that for ?ecember in
+an"ary. 5"ch bein the case, petitioner:s ref"sal to prepare the 1ict"allin statement of +an"ary )as E"stified since the 1ict"allin cost for
the month of +an"ary )as not yet d"e or necessary.
9or )illf"l disobedience to be considered as E"st ca"se for dismissal, the employee:s cond"ct m"st be )illf"l or intentional, the )illf"lness
bein characteriCed by a )ronf"l and per1erse attit"de and the order 1iolated m"st ha1e been reasonable, la)f"l, made 2no)n to the
employee and m"st pertain to the d"ties )hich he has been enaed to dischare.
$n the instant case, it )as act"ally not petitioner:s d"ty to prepare the 1ict"allin statement. The alleation that this )as part of his d"ty as
chief coo2 and the fact that he )as a)are of s"ch d"ty )hen he )as inter1ie)ed for the post is only self(ser1in and )itho"t basis. The
employment contract does not mention anythin that this )as part of his d"ty as chief coo2. E1en ass"min that petitioner ref"sed to obey
the order of his s"perior to prepare a corrected 1ict"allin cost statement for ?ecember, altho"h he maintained that he E"st as2ed for time to
do it, as he )as then b"sy performin his "s"al d"ty, )hich )e belie1e to be the case, his ref"sal cannot be considered as one bein
characteriCed by a 7)ronf"l and per1erse attit"de.> 9rom the beinnin, petitioner already intimated that he did not 2no) ho) to accomplish
the 1ict"al cost statement since it entailed some mathematical s2ills )hich he admittedly did not ha1e. $ndeed, to "se his o)n )ords, 7he
came aboard only to coo2.> 8is capability on man"al s2ill )as limited to coo2in and nothin more and for )hich reason he applied for the
Eob as chief coo2 and )as e1ent"ally hired as s"ch. The fact that he )as able to do the 1ict"allin cost statements for the past three months
)as an e@tra )or2 on his part. 8is fail"re or alleed ref"sal to o on )ith the )or2 did not merit the se1erest penalty of dismissal from the
ser1ice and his immediate repatriation )itho"t e1en affordin him d"e process of la).
;etitioner:s dismissal )itho"t a 1alid ca"se constit"te a breach of contract. ConseH"ently, he sho"ld only be paid the "ne@pired portion of his
employment contract. 8o)e1er, the payment of the o1ertime pay sho"ld be disallo)ed. $n the same 1ein, the claim for day:s lea1e pay for the
"ne@pired portion of the contract is "n)arranted since the same is i1en d"rin the act"al ser1ice of the seaman.
HILIINE NATIONAL BAN: v. HILIINE NATIONAL BAN: EMLOYEES ASSOCIATION ?EMAA #*( COURT O" INDUSTRIAL
RELATIONS
G.R. No. L738459 !u'2 38, 1984
"#$ts%
This case started on +an"ary 2-, 1,*/ in conseH"ence of the certification of the ;resident of the ;hilippines of an ind"strial disp"te bet)een
the ;hilippine 3ational !an2 Employees Association &;EMA, for short', on the one hand, and the ;hilippine 3ational !an2 &;3!, for short',
on the other, )hich arose from no more than the alleed fail"re of the ;3! to comply )ith its commitment of oraniCin a Committee on
;ersonnel Affairs to ta2e chare of screenin and deliberatin on the promotion of employees co1ered by the collecti1e barainin
areement then in force bet)een the said parties. On +an"ary 2-, 1,*/, the $nd"strial Co"rt iss"ed an order aimed at settlin the disp"te
temporarily bet)een the parties, )hich )as certified by the ;resident. ;ertinent portions of the order read th"s%
71. That in order to settle the stri2e and for the employees to ret"rn to )or2 immediately startin +an"ary 2,, 1,*/, the Committee on
;ersonnel Affairs is hereby created to start f"nctionin on 9ebr"ary 1, 1,*/0
--
7f. That in ret"rn for this concession, an inE"nction aainst f"t"re stri2es or loc2o"ts shall be iss"ed by the Co"rt to last for a period of si@
months b"t )hich shall terminate e1en before that period sho"ld all disp"tes of the parties be already resol1ed0>
;ri1ate respondent filed another pleadin s"bmittin to this Co"rt for determination certain matters )hich it claims cannot be resol1ed by the
parties, )hich are as follo)s%
a. $n a Resol"tion 3o. 11*2 dated 5eptember 1*, 1,/7, the Respondent:s !oard of ?irectors appro1ed a re1ision of the comp"tation
of o1ertime pay retroacti1e as of +"ly 1, 1,/4, and a"thoriCed a recomp"tation of the re"lar one( ho"r and e@tra o1ertime already
rendered by all officers and employees of the Respondent !an2.
b. 5ince the rant of the benefits in H"estion, the employees of the Respondent, represented by the petitioner, ha1e al)ays
considered them to be a part of their salaries and=or frine benefits0 ne1ertheless, the Respondent, in 1,*., )itho"t E"st ca"se,
)ithdre) said benefits and in spite of repeated demands ref"sed, and still ref"ses to reinstate the same "p to the present.
c. After the prom"lation of the ?ecision in 3ational 6ater)or2s and 5e)erae A"thority 1s. 3A6A5A Consolidated Fnions, et al.
#.R. 3o. 4(1-,.-, A". .1, 1,*4, the ;etitioner has repeatedly reH"ested Respondent that the cost of li1in allo)ance and
lone1ity pay be ta2en into acco"nt in the comp"tation of o1ertime pay, effecti1e as of the rant of said benefits on +an"ary 1,
1,/-, in accordance )ith the r"lin in said ?ecision of the 5"preme Co"rt.
d. Fntil no) Respondent has not ta2en any concrete steps to)ard the payment of the differential o1ertime and nihttime pays arisin
from the cost of li1in allo)ance and lone1ity pay.
Issu&%
)hether or not members of the respondent "nion are entitled to o1ertime pay, CO4A, lone1ity pay
H&'(%
Ov&,t)0& 3o,> is act"ally the lenthenin of ho"rs de1eloped to the interests of the employer and the reH"irements of his enterprise. $t
follo)s that the )ae or salary to be recei1ed m"st li2e)ise be increased, and more than that, a special additional amo"nt m"st be added to
ser1e either as enco"raement or ind"cement or to ma2e "p for the thins he loses )hich. And on this score, it m"st al)ays be borne in
mind that )ae is indisp"tably intended as payment for )or2 done or ser1ices rendered.
M@#g&= paid to any employee shall mean the rem"neration or earnins, ho)e1er desinated, capable of bein e@pressed in terms of money,
)hether fi@ed or ascertained on a time tas2, piece, commission basis or other method of calc"latin the same, )hich is payable by an
employer to an employee "nder a )ritten or "n)ritten contract of employment for wor$ done or to be done or for services rendered or to be
rendered and incl"des the fair and reasonable 1al"e as determined by the 5ecretary of 4abor, of board, lodin or other facilities c"stomarily
f"rnished by the employer to the employee.
5"pplements are e@tra rem"neration or benefits recei1ed by )ae earners from their employers and incl"de b"t are not restricted to pay for
1acation and holidays not )or2ed0 paid sic2 lea1e or maternity lea1e0 o1ertime rate in e@cess of )hat is reH"ired by la)0 pension, retirement,
and death benefits0 profit(sharin, family allo)ances0 Christmas, )ar ris2 and cost"of"living bon!ses; or other bon!ses other than those paid
as a reward for e(tra o!tp!t or time spent on the -ob.
$n order to meet the effects of "ncertain economic conditions affectin ad1ersely the li1in conditions of )ae earners, employers, )hene1er
the financial conditions of the enterprise permit, rant them )hat has been called as cost(of(li1in allo)ance.
$n the case at bar, the cost(of(li1in allo)ance bean to be ranted in 1,/- and the lone1ity pay in 1,-1. $n other )ords, they )ere ranted
by ;3! "pon realiCin the diffic"lt pliht of its labor force in the face of the "n"s"al inflationary sit"ation in the economy of the co"ntry, )hich,
ho)e1er ac"te, )as ne1ertheless e@pected to impro1e. There )as th"s e1ident an inherently continent character in said allo)ances. They
)ere not intended to be re"lar, m"ch less permanent additional part of the compensation of the employees and )or2ers.
M"ch less )ere they dependent on e@tra or special )or2 done or ser1ice rendered by the correspondin recipient. Rather, they )ere based
on the needs of their families as the conditions of the economy )arranted.
5o also )ith the lone1ity pay0 manifestly, this )as not based on the daily or monthly amo"nt of )or2 done or ser1ice rendered it )as more
of a rat"ity for their loyalty, or their ha1in been in the ban2:s employment for consideration periods of time. $ndeed, )ith partic"lar reference
to the lone1ity pay, the then e@istin collecti1e barainin contract e@pressly pro1ided% 7... That this benefit shall not form part of the basic
salaries of the officers so affected.>
-,
;EMA may contend that the e@press e@cl"sion of the lone1ity pay, means that the cost(of(li1in allo)ance )as not intended to be e@cl"ded.
Considerin, ho)e1er, the continent nat"re of the allo)ances and their lac2 of relation to )or2 done or ser1ice rendered, )hich in a sense
may be other)ise in respect to lone1ity pay ;EMA:s contention is "ntenable.
As far as lone1ity pay is concerned, it is beyond H"estion that the same cannot be incl"ded in the comp"tation of o1ertime pay for the 1ery
simple reason that the contrary is e@pressly stip"lated in the collecti1e barainin areement and, as sho"ld be the case, it is settled that the
terms and conditions of a collecti1e barainin areement constit"te the la) bet)een the parties.
The matter of the cost(of(li1in allo)ance has to be e@amined from another perspecti1e, namely, that )hile ;EMA had been al)ays
demandin for its interation into the basic pay, it ne1er s"cceeded in ettin the conformity of ;3! thereto, and so, all collecti1e barainin
areements entered into periodically by the said parties did not pro1ide therefor.
3ot)ithstandin the portions of the 3A6A5A:s opinion relied "pon by ;EMA, there is nothin in CA 444 that co"ld E"stify its post"re that
cost(of(li1in allo)ance sho"ld be added to the re"lar )ae in comp"tin o1ertime pay.
Tr"e, it is there stated that 7for p"rposes of comp"tin o1ertime compensation, re"lar )ae incl"des all payments )hich the parties ha1e
areed shall be recei1ed d"rin the )or2 )ee2, incl"din ( differential payments for )or2in at "ndesirable times, s"ch as at niht and the
board and lodin c"stomarily f"rnished the employee. ... The Are"lar rate: of pay also ordinarily incl"des incenti1e bon"s or profit(sharin
payments made in addition to the normal basic pay, and it )as also held that the hiher rate for niht, 5"nday and holiday )or2 is E"st as
m"ch a re"lar rate as the lo)er rate for daytime )or2. The hiher rate is merely an ind"cement to accept employment at times )hich are
not as desirable from a )or2men:s standpoint.
!"t no)here did 3A6A5A refer to e@tra, temporary and continent compensation "nrelated to )or2 done or ser1ice rendered, )hich as
e@plained earlier is the 1ery nat"re of cost(of( li1in allo)ance.
the basis of comp"tation of o1ertime pay beyond that reH"ired by CA 444 m"st be the collecti1e barainin areement, or, to reiterate O"r
post"lation therein and in !isi n Manaa)a, s!pra, it is not for the co"rt to impose "pon the parties anythin beyond )hat they ha1e
areed "pon )hich is not tainted )ith illeality. On the other hand, )here the parties fail to come to an areement, on a matter not leally
reH"ired, the co"rt ab"ses its discretion )hen it oblies any *f them to do more than )hat is leally oblied.
$n the absence of any specific pro1ision on the matter in a collecti1e barainin areement, )hat are decisi1e in determinin the basis for the
comp"tation of o1ertime pay are t)o 1ery ermane considerations, namely, &1' )hether or not the additional pay is for e@tra )or2 done or
ser1ice rendered and &2' )hether or not the same is intended to be permanent and re"lar, not continent nor temporary and i1en only to
remedy a sit"ation )hich can chane any time. 6e reiterate, o1ertime pay is for e@tra effort beyond that contemplated in the employment
contract, hence )hen additional pay is i1en for any other p"rpose, it is illoical to incl"de the same in the basis for the comp"tation of
o1ertime pay.
NATIONAL SEMICONDUCTOR ?H:A DISTRIBUTION, LTD. v. NATIONAL LABOR RELATIONS COMMISSION ?+TH DI6ISIONA #*(
EDGAR HILI C. SANTOS
G.R. No. 143948 !u*& 46, 1998
"#$ts%
;etitioner 3ational 5emicond"ctor &8P' ?istrib"tion, 4td. &35C for bre1ity', a forein corporation licensed to do b"siness in the ;hilippines,
man"fact"res and assembles electronic parts for e@port )ith principal office at the Mactan E@port ;rocessin Uone, Mactan, 4ap"(4ap" City.
;ri1ate respondent Edar ;hilip C. 5antos )as employed by 35C as a technician in its 5pecial ;rod"cts #ro"p )ith a monthly salary of
;/,/<1.<< assined to the ra1eyard shift startin at ten o: cloc2 in the e1enin "ntil si@ o: cloc2 in the mornin.
On - +an"ary 1,,. 5antos did not report for )or2 on his shift. 8e res"med his d"ties as niht shift Technician 5"pport only on , +an"ary
1,,.. 8o)e1er, at the end of his shift the follo)in mornin, he made 2 entries in his daily time record &?TR' to ma2e it appear that he
)or2ed on both the -th and ,th of +an"ary 1,,..
8is immediate s"per1isor, Mr. +oel 4imsiaco, "n2no)n to pri1ate respondent 5antos, recei1ed the report that there )as no technician in the
ra1eyard shift of - +an"ary 1,,.. Th"s, 4imsiaco chec2ed the ?TRs and fo"nd o"t that 5antos indeed did not report for )or2 on - +an"ary.
!"t )hen he chec2ed 5antos: ?TR aain in the mornin of , +an"ary 1,,. he fo"nd the entry made by 5antos for the day before.
$nformal in1estiations )ere cond"cted by manaement. 5antos )as reH"ired in a memorand"m to e@plain in )ritin )ithin 4- ho"rs from
notice )hy no disciplinary action sho"ld be ta2en aainst him for dishonesty, falsifyin daily time record &?TR' and 1iolation of company r"les
,<
and re"lations. On 11 +an"ary 1,,. 5antos s"bmitted his )ritten e@planation allein that he )as ill on the day he )as absent. As reards
the entry on - +an"ary, he alleed that it )as merely d"e to o1ersiht or carelessness on his part.
9indin 5antos: e@planation "nsatisfactory, 35C dismissed him on 14 +an"ary 1,,. on the ro"nd of falsification of his ?TR, )hich act )as
inimical to the company and constit"ted dishonesty and serio"s miscond"ct.
Issu&%
?id respondent 3ational 5emicond"ctor &8P' ?istrib"tion 4td. illeally dismiss complainant Edar ;hilip 5antosL
H&'(%
3o. ;ri1ate respondent has been in petitioner:s employ for fi1e &/' years K startin 1. +an"ary 1,-- )hen he )as hired to 14 +an"ary 1,,.
)hen his ser1ices )ere terminated K and petitioner ne1er denied that pri1ate respondent rendered niht shift )or2.
!y choosin not to f"lly and completely disclose information to pro1e that it had paid all the niht shift differentials d"e to pri1ate respondent,
petitioner failed to dischare the b"rden of proof.
$t is not disp"ted that complainant )as re"larly assined to a niht shift &1<%<< ;.M. to 7%<< A.M.'. Fnder 5ection 2, R"le $$, !oo2 Three of
the $mplementin R"les of the 4abor Code, complainant is entitled to an additional benefit of not less ten percent &1<N' of his re"lar )ae
for each ho"r of )or2 performed. The record is bereft of e1idence that respondent has paid complainant this benefit. The best e1idence for
respondent corporation )o"ld ha1e been the payrolls, 1o"chers, daily time records and the li2e )hich "nder 5ections *, 7, -, 11 and 12, R"le
Q, !oo2 $$$ of the $mplementin R"les it is oblied to 2eep. $ts fail"re i1es rise to the pres"mption that either it does not ha1e them or if it
does, their presentation is preE"dicial to its ca"se.
5antos )as accorded f"ll opport"nity to be heard before he )as dismissed. ;etitioner f"rnished pri1ate respondent notice as to the partic"lar
acts )hich constit"ted the ro"nd for his dismissal. !y reH"irin him to s"bmit a )ritten e@planation )ithin 4- ho"rs from receipt of the
notice, the company a1e him the opport"nity to be heard in his defense. ;ri1ate respondent a1ailed of this chance by s"bmittin a )ritten
e@planation.
That the in1estiations cond"cted by petitioner may not be considered formal or recorded hearins or in1estiations is immaterial. A formal or
trial type hearin is not all times and in all instances essential to d"e process, the reH"irements of )hich are satisfied )here the parties are
afforded fair and reasonable opport"nity to e@plain their side of the contro1ersy. $t is deemed s"fficient for the employer to follo) the nat"ral
seH"ence of notice, hearin and E"dment.
ROMEO LAGATIC v. NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DE6ELOMENT CORORATION, STEHEN ROFAS,
!ESUS GO, GRACE LIUSON, #*( ANDRE@ LIUSON
G.R. No. 14188+ !#*u#,2 48, 1998
"#$ts%
Romeo 4aatic )as employed in May 1,-* by Cityland, first as a probationary sales aent, and later on as a mar2etin specialist. 8e )as
tas2ed )ith solicitin sales for the company, )ith the correspondin d"ties of acceptin call(ins, referrals, and ma2in client calls and cold
calls. Co'( $#''s refer to the practice of prospectin for clients thro"h the telephone directory. Cityland, belie1in that the same is an
effecti1e and cost(efficient method of findin clients, reH"ires all its mar2etin specialists to ma2e cold calls. The n"mber of cold calls
depends on the sales enerated by each% more sales mean less cold calls. 4i2e)ise, in order to assess cold calls made by the sales staff, as
)ell as to determine the res"lts thereof, Cityland reH"ires the s"bmission of daily proress reports on the same.
Cityland iss"ed a )ritten reprimand to petitioner for his fail"re to s"bmit cold call reports for 5eptember 1<, October 1 and 1<, 1,,1. This
not)ithstandin, petitioner aain failed to s"bmit cold call reports for 5eptember 2, /, -, 1<, 11, 12, 1/, 17, 1-, 1,, 2<, 22, and 2-, as )ell as
for October *, -, ,, 1<, 12, 1. and 14, 1,,2. ;etitioner )as reH"ired to e@plain his inaction, )ith a )arnin that f"rther non(compliance )o"ld
res"lt in his termination from the company. $n a reply dated October 1-, 1,,2, petitioner claimed that the same )as an honest omission
bro"ht abo"t by his concentration on other aspects of his Eob. Cityland fo"nd said e@c"se inadeH"ate and, on 3o1ember ,, 1,,2,
s"spended him for three days, )ith a similar )arnin.
3ot)ithstandin the aforesaid s"spension and )arnin, petitioner aain failed to s"bmit cold call reports for 9ebr"ary /, *, -, 1< and 12,
1,,.. 8e )as 1erbally reminded to s"bmit the same and )as e1en i1en "p to 9ebr"ary 17, 1,,. to do so. $nstead of complyin )ith said
directi1e, petitioner )rote a note, 7TO 8E44 6$T8 CO4? CA445X 68O CARE5L> and e@hibited the same to his co(employees. To )orsen
matters, he left the same lyin on his des2 )here e1eryone co"ld see it.
,1
petitioner recei1ed a memorand"m reH"irin him to e@plain )hy Cityland sho"ld not ma2e ood its pre1io"s )arnin for his fail"re to s"bmit
cold call reports, as )ell as for iss"in the )ritten statement aforementioned. On 9ebr"ary 24, 1,,., he sent a letter(reply allein that his
fail"re to s"bmit cold call reports sho"ld trot be deemed as ross ins"bordination. 8e denied any 2no)lede of the damain statement, 7TO
8E44 6$T8 CO4? CA445X>
9indin petitioner "ilty of ross ins"bordination, Cityland ser1ed a notice of dismissal "pon him. Arie1ed by s"ch dismissal, petitioner filed
a complaint aainst Cityland for illeal dismissal, illeal ded"ction, "nderpayment, o1ertime and rest day pay, damaes and attorney:s fees.
Issu& K1%
)hether petitioner )as illeally dismissed
H&'( K1%
3o. To constit"te a 1alid dismissal from employment, t)o reH"isites m"st be met, namely% &1' the employee m"st be afforded d"e process,
and &2' the dismissal m"st be for a 1alid ca"se.
;etitioner is "ilty of )illf"l disobedience. @)''/u' ()so1&()&*$& reH"ires the conc"rrence of at least t)o reH"isites% the employee:s assailed
cond"ct m"st ha1e been )illf"l or intentional, the )illf"lness bein characteriCed by a )ronf"l and per1erse attit"de0 and the order 1iolated
m"st ha1e been reasonable, la)f"l, made 2no)n to the employee and m"st pertain to the d"ties )hich he had been enaed to dischare.
;etitioner:s fail"re to comply )ith Cityland:s policy of reH"irin cold call reports is clearly )illf"l, i1en the 2- instances of his fail"re to do so,
despite a pre1io"s reprimand and s"spension. More than that, his )ritten statement sho)s his open defiance and disobedience to la)f"l
r"les and re"lations of the company. 4i2e)ise, said company policy of reH"irin cold calls and the concomitant reports thereon is clearly
reasonable and la)f"l, s"fficiently 2no)n to petitioner, and in connection )ith the d"ties )hich he had been enaed to dischare.
On the proced"ral aspect, petitioner claims that he )as denied d"e process. 6ell settled is the dict!m that the t)in reH"irements of notice
and hearin constit"te the elements of d"e process in the dismissal of employees. Th"s, the employer m"st f"rnish the employee )ith t)o
)ritten notices before the termination of employment can be effected. The first apprises the employee of the partic"lar acts or omissions for
)hich his dismissal is so"ht0 the second informs him of the employer:s decision to dismiss him.
$n the case at bar, petitioner )as notified of the chares aainst him in a memorand"m dated 9ebr"ary 1,, 1,,., )hich he recei1ed on
9ebr"ary 2., 1,,.. 8e s"bmitted a letter(reply thereto on 9ebr"ary 24, 1,,., )herein he as2ed that his fail"re to s"bmit cold call reports be
not interpreted as ross ins"bordination. 8e )as i1en notice of his termination on 9ebr"ary 2*, 1,,.. This chronoloy of e1ents clearly
sho) that petitioner )as ser1ed )ith the reH"ired )ritten notices.
The reH"irement of a hearin is complied )ith as lon as there )as an opport"nity to be heard, and not necessarily that an act"al hearin be
cond"cted. ;etitioner had an opport"nity to be heard as he s"bmitted a letter(reply to the chare. 8e, ho)e1er, add"ced no other e1idence
on his behalf. $n fact, he admitted his fail"re to s"bmit cold call reports, prayin that the same be not considered as ross ins"bordination.
Issu& K4%
)hether petitioner is entitled to salary differentials, bac2)aes, separation pay, o1ertime pay, rest day pay and "npaid commissions
H&'( K4%
3o. 6hile it is tr"e that an increase in salary )o"ld ca"se an increase in AR, )ith the same bein ded"cted from credits earned, th"s
lessenin his commissions, the fact remains that petitioner still recei1es his basic salary )itho"t ded"ctions. ;etitioner:s ar"ment that he is
indebted to respondent by ;1,41<.<< is fallacio"s as his basic salary remains the same and he contin"es to recei1e the same, reardless of
his collections. The fail"re to attain a CE eH"i1alent to the AR of ;/,*4<.<< only means that the difference )o"ld be credited to his C3 for the
ne@t month. Clearly, the p"rpose of the same is to enco"rae sales personnel to accelerate their sales in order for them to earn
commissions.
Additionally, there is no la) )hich reH"ires employers to pay commissions, and )hen they do so, there is no la) )hich prescribes a method
for comp"tin commissions. The determination of the amo"nt of commissions is the res"lt of collecti1e barainin neotiations, indi1id"al
employment contracts or established employer practice. 5ince the form"la for the comp"tation of commissions )as presented to and
accepted by petitioner, s"ch prescribed form"la is in order. As to the alleation that said form"la diminishes the benefits bein recei1ed by
petitioner )hene1er there is a )ae increase, it m"st be noted that his commissions are not meant to be in a fi@ed amo"nt. $n fact, there )as
no ass"rance that he )o"ld recei1e any commission at all. No*7()0)*ut)o* o/ 1&*&/)ts, as applied here, merely means that the company
may not remo1e the privilege of sales personnel to earn a commission, not that they are entitled to a fi@ed amo"nt thereof.
,2
6ith respect to petitioner:s claims for o1ertime pay, rest day pay and holiday premi"ms, Cityland maintains that 5at"rday and 5"nday call(ins
)ere 1ol"ntary acti1ities on the part of sales personnel )ho )anted to realiCe more sales and thereby earn more commissions.
$n addition to the abo1e, the labor arbiter and the 34RC sanctioned respondent:s practice of offsettin rest day or holiday )or2 )ith
eH"i1alent time on re"lar )or2days on the ro"nd that the same is a"thoriCed by ?epartment Order 21, 5eries of 1,,<. As correctly pointed
o"t by petitioner, said ?.O. )as misapplied in this case. The ?.O. in1ol1es the shortenin of the )or2)ee2 from si@ days to fi1e days b"t )ith
proloned ho"rs on those fi1e days. Fnder this scheme, non(payment of o1ertime premi"ms )as allo)ed in e@chane for loner )ee2ends
for employees. $n the instant case, petitioner:s )or2)ee2 )as ne1er compressed. $nstead, he claims payment for )or2 o1er and abo1e his
normal / 1=2 days of )or2 in a )ee2. Applyin by analoy the principle that o1ertime cannot be offset by "ndertime, to allo) off(settin )o"ld
preE"dice the )or2er. 8e )o"ld be depri1ed of the additional pay for the rest day )or2 he has rendered and )hich is "tiliCed to offset his
eH"i1alent time off on re"lar )or2days. To allo) Cityland to do so )o"ld be to circ"m1ent the la) on payment of premi"ms for rest day and
holiday )or2.
3ot)ithstandin the foreoin disc"ssion, petitioner failed to sho) his entitlement to o1ertime and rest day pay d"e, to the lac2 of s"fficient
e1idence as to the n"mber of days and ho"rs )hen he rendered o1ertime and rest day )or2.
NATIONAL @ATER@OR:S < SE@ERAGE AUTHORITY v. N@SA CONSOLIDATED UNION, !ESUS CENTENO, ET AL., #*( THE
COURT O" INDUSTRIAL RELATIONS
G.R. No. L74689+796 "&1,u#,2 48, 1969
"#$ts%
$n *ational <aterwor$s 9 Sewerage /!thority v. *<S/ #onsolidated :nions, the Co"rt made clear beyond do"bt that employees of s"ch
o1ernment(o)ned and controlled corporation, )ho inter1ened therein, )ere entitled to the benefits not only of the Eiht(8o"r 4abor 4a) b"t
also to those arisin from any contract"al obliation that miht ha1e been inc"rred by it. 5"bseH"ently, on May 12, 1,*/, the aforesaid labor
"nion, actin for and in behalf of A"relio !. U"rbano, 9rancisco ;. ?omino and R"fo R. 9abreas, filed a motion allein that s"ch
indi1id"als )ere similarly sit"ated as they rendered )or2 in e@cess of the re"lar eiht(ho"r period, incl"din nihttime, ha1in performed
o1ertime ser1ices as )ell on 5"ndays and leal holidays and therefore entitled to a similar a)ard in accordance )ith the aforesaid decision.
The inter1enors in the first 3a)asa case decided by "s in 1,*4 )ere admittedly 7holdin positions of responsibility.> That )e d"ly noted, for
one of them )as the 5ecretary of the !oard of ?irectors, another )as the pri1ate secretary of the eneral manaer, a third, the p"blic
relations officer, )hile many )ere di1ision or section chiefs, incl"din s"per1isors and o1erseers. 3onetheless, the Co"rt of $nd"strial
Relations, as pointed o"t in s"ch decision, 7after e@aminin caref"lly their respecti1e f"nctions, d"ties and responsibilities fo"nd that their
primary d"ties do not bear any direct relation )ith the manaement of the 3a)asa, nor do they participate in the form"lation of its policies
nor in the hirin and firin of its employees. The chiefs of di1isions and sections are i1en ready policies to e@ec"te and standard practices to
obser1e for their e@ec"tion. 8ence, it concl"des, they ha1e little freedom of action, as their main f"nction is merely to carry o"t the
company:s orders, plans and policies.>
Issu&%
)hether U"rbano, ?omino and 9abreas are not manaerial employees and are entitled to o1ertime pay
H&'(%
Bes. The most ob1io"s distinction of a Amanaerial employee: is his participation in form"latin company policies. Another is his po)er to hire
or fire employees, and "nder Rep. Act 3o. 2.77, his e@emption from the riid obser1ance of re"lar office ho"rs. The Co"rt fails to find any
indication that their primary d"ties bear any direct relation )ith the 3a)asa manaement or that they help form"late its policies. 3either is
there any indication that the three mo1ants ha1e the po)er to hire or fire employees of the 3a)asa. On the contrary, the 1ery e@hibits
presented by the 3a)asa sho) that the po)er to hire and fire, and to form"late policies e@cl"si1ely belon to the !oard of ?irectors and the
#eneral Manaer. 6hat is more, all the three mo1ants )ere reH"ired to obser1e official time, so m"ch so that any "ndertime or absence
inc"rred by them )ere ded"cted from their accr"ed 1acation or sic2 lea1e. They had to accomplish their daily time records in Ci1il 5er1ice
9orm 3o. 4-, )herein they had to record their time of arri1als and depart"res, hence lac2 the freedom to come and o to their offices, or
mo1e abo"t at their o)n pleas"re, )hich is the "nmista2able mar2 of a Amanaerial employee:.
@ELLINGTON IN6ESTMENT AND MANU"ACTURING CORORATION v. CRESENCIANO B. TRA!ANO, U*(&,7S&$,&t#,2 o/ L#1o,
#*( E0-'o20&*t, ELMER ABADILLA, #*( 3+ ot.&,s
G.R. No. 11+698 !u'2 3, 1999
"#$ts%
,.
A ro"tine inspection cond"cted by a 4abor Enforcement Officer on A""st *, 1,,1 of the 6ellinton 9lo"r Mills, an establishment o)ned and
operated by petitioner 6ellinton $n1estment and Man"fact"rin Corporation &hereafter, simply 6ellinton'. The officer thereafter dre) "p a
report, a copy of )hich )as 7e@plained to and recei1ed by> 6ellinton:s personnel manaer, in )hich he set forth his findin of non(payment
of re"lar holidays fallin on a 5"nday for monthly(paid employees.
6ellinton so"ht reconsideration of the 4abor $nspector:s report. $t ar"ed that the monthly salary of the company:s monthly(salaried
employees already incl"des holiday pay for all re"lar holidays and hence there is no leal basis for the findin of alleed non(payment of
re"lar holidays fallin on a 5"nday. $t e@po"nded on this thesis in a position paper s"bseH"ently s"bmitted to the Reional ?irector,
assertin that it pays its monthly(paid employees a fi@ed monthly compensation "sin the .14 factor )hich "ndeniably co1ers and already
incl"des payment for all the )or2in days in a month as )ell as all the 1< "n)or2ed re"lar holidays )ithin a year.
Issu&%
)hether or not a monthly(paid employee, recei1in a fi@ed monthly compensation, is entitled to an additional pay aside from his "s"al holiday
pay, )hene1er a re"lar holiday falls on a 5"nday
H&'(%
3o. E1ery )or2er sho"ld, accordin to the 4abor Code, 7be paid his re"lar daily )ae d!ring reg!lar holidays, e@cept in retail and ser1ice
establishments re"larly employin less than ten &1<' )or2ers0> this, of co"rse, e1en if the )or2er does no )or2 on these holidays. The
re"lar holidays incl"de% 73e) Bear:s ?ay, Ma"ndy Th"rsday, #ood 9riday, the ninth of April, the first of May, the t)elfth of +"ne, the fo"rth of
+"ly, the thirtieth of 3o1ember, the t)enty(fifth of ?ecember, and the day desinated by la) for holdin a eneral election &or national
referend"m or plebiscite'.
;artic"larly as reards employees 7)ho are "niformly paid by the month, 7the monthly minim"m )ae shall not be less than the stat"tory
minim"m )ae m"ltiplied by .*/ days di1ided by t)el1e.> This monthly salary shall ser1e as compensation 7for all days in the month )hether
)or2ed or not,> and 7irrespecti1e of the n"mber of )or2in days therein.> $n other )ords, )hether the month is of thirty &.<' or thirty(one &.1'
days: d"ration, or t)enty(eiht &2-' or t)enty(nine &2,' &as in 9ebr"ary', the employee is entitled to recei1e the entire monthly salary. 5o, too,
in the e1ent of the declaration of any special holiday, or any fort"ito"s ca"se precl"din )or2 on any partic"lar day or days &s"ch as
transportation stri2es, riots, or typhoons or other nat"ral calamities', the employee is entitled to the salary for the entire month and the
employer has no riht to ded"ct the proportionate amo"nt correspondin to the days )hen no )or2 )as done. The monthly compensation is
e1idently intended precisely to a1oid comp"tations and adE"stments res"ltin from the continencies E"st mentioned )hich are ro"tinely
made in the case of )or2ers paid on daily basis.
$n 6ellinton:s case, at the time of the inspection cond"cted by the 4abor Enforcement Officer, it )as and had been payin its employees a
salary of not less than the stat"tory or established minim"m )ae, and that the monthly salary th"s paid )as not less than the stat"tory
minim"m )ae m"ltiplied by .*/ days di1ided by t)el1e.> There is, in other )ords, no iss"e that to this e@tent, 6ellinton complied )ith the
minim"m norm laid do)n by la).
Apparently the monthly salary )as fi@ed by 6ellinton to pro1ide for compensation for e1ery )or2in day of the year incl"din the holidays
specified by la) K and e@cl"din only 5"ndays. $n fi@in the salary, 6ellinton "sed )hat it calls the 760= factor0> that is to say, it simply
ded"cted /1 5"ndays from the .*/ days normally comprisin a year and "sed the difference, .14, as basis for determinin the monthly
salary. The monthly salary th"s fi@ed act"ally co1ers payment for .14 days of the year, incl!ding reg!lar and special holidays, as well as
days when no wor$ is done by reason of fort!ito!s ca!se, as above specified, or ca!ses not attrib!table to the employees.
The 4abor Officer )ho cond"cted the ro"tine inspection of 6ellinton disco1ered that in certain years, t)o or three re"lar holidays had
fallen on 5"ndays. 8e reasoned that this had precl"ded the enEoyment by the employees of a non()or2in day, and the employees had
conseH"ently had to )or2 an additional day for that month. This ratiocination recei1ed the appro1al of his Reional ?irector )ho opined that
)hen a re"lar holiday falls on a 5"nday, an e@tra or additional )or2in day is created and the employer has the obliation to pay its
employees for the e@tra day e@cept the last 5"nday of A""st since the payment for the said holiday is already incl"ded in the .14 factor.
The theory loses siht of the fact that the monthly salary in 6ellinton K )hich is based on the so(called 7.14 factor> K acco"nts for all .*/
days of a year0 i.e., 6ellinton:s 7.14 factor> lea1es no day "nacco"nted for0 it is payin for all the days of a year )ith the e@ception only of
/1 5"ndays.
The respondents: theory )o"ld ma2e each of the years in H"estion &1,--, 1,-,, 1,,<', a year of .*- days. ;"rs"ant to this theory, no
employer optin to pay his employees by the month )o"ld ha1e any definite basis to determine the n"mber of days in a year for )hich
compensation sho"ld be i1en to his )or2 force. 8e )o"ld ha1e to ascertain the n"mber of times leal holidays )o"ld fall on 5"ndays in all
the years of the e@pected or e@trapolated lifetime of his b"siness. Alternati1ely, he )o"ld be compelled to ma2e adE"stments in his
employees: monthly salaries e1ery year, dependin on the n"mber of times that a leal holiday fell on a 5"nday.
,4
There is no pro1ision of la) reH"irin any employer to ma2e s"ch adE"stments in the monthly salary rate set by him to ta2e acco"nt of leal
holidays fallin on 5"ndays in a i1en year, or, contrary to the leal pro1isions bearin on the point, other)ise to rec2on a year at more than
.*/ days. As earlier mentioned, )hat the la) reH"ires of employers optin to pay by the month is to ass"re that 7the monthly minim"m )ae
shall not be less than the stat"tory minim"m )ae m"ltiplied by .*/ days di1ided by t)el1e,> and to pay that salary 7for all days in the month
)hether )or2ed or not,> and 7irrespecti1e of the n"mber of )or2in days therein.> That salary is d"e and payable reardless of the
declaration of any special holiday in the entire co"ntry or a partic"lar place therein, or any fort"ito"s ca"se precl"din )or2 on any partic"lar
day or days &s"ch as transportation stri2es, riots, or typhoons or other nat"ral calamities', or ca"se not imp"table to the )or2er.
!OSE RI;AL COLLEGE v. NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE O" TEACHERSIO""ICE
@OR:ERS
G.R. No. L769+84 D&$&01&, 1, 1985
"#$ts%
;etitioner is a non(stoc2, non(profit ed"cational instit"tion d"ly oraniCed and e@istin "nder the la)s of the ;hilippines. $t has three ro"ps
of employees cateoriCed as follo)s% &a' personnel on monthly basis, )ho recei1e their monthly salary "niformly thro"ho"t the year,
irrespecti1e of the act"al n"mber of )or2in days in a month )itho"t ded"ction for holidays0 &b' personnel on daily basis )ho are paid on
act"al days )or2ed and they recei1e "n)or2ed holiday pay and &c' colleiate fac"lty )ho are paid on the basis of st"dent contract ho"r.
!efore the start of the semester they sin contracts )ith the collee "nderta2in to meet their classes as per sched"le.
Fnable to recei1e their correspondin holiday pay, as claimed, from 1,7/ to 1,77, pri1ate respondent 3ational Alliance of Teachers and
Office 6or2ers &3ATO6' in behalf of the fac"lty and personnel of +ose RiCal Collee filed )ith the Ministry of 4abor a complaint aainst the
collee for said alleed non(payment of holiday pay.
Issu&%
)hether or not the school fac"lty )ho accordin to their contracts are paid per lect"re ho"r are entitled to "n)or2ed holiday pay
H&'(%
5"bEect holiday pay is pro1ided for in the 4abor Code &;residential ?ecree 3o. 442, as amended', )hich reads%
7Art. ,4. Riht to holiday pay K &a' E1ery )or2er shall be paid his re"lar daily )ae d"rin re"lar holidays, e@cept in retail and ser1ice
establishments re"larly employin less than ten &1<' )or2ers0
&b' The employer may reH"ire an employee to )or2 on any holiday b"t s"ch employee shall be paid a compensation eH"i1alent to t)ice his
re"lar rate0 ...>
and in the $mplementin R"les and Re"lations, R"le $D, !oo2 $$$, )hich reads%
75EC. -. 7oliday pay of certain employees. K &a' ;ri1ate school teachers, incl"din fac"lty members of collees and "ni1ersities, may not
be paid for the re"lar holidays d"rin semestral 1acations. They shall, ho)e1er, be paid for the re"lar holidays d"rin Christmas 1acations.
...>
Fnder the foreoin pro1isions, apparently, the petitioner, altho"h a non(profit instit"tion is "nder obliation to i1e pay e1en on "n)or2ed
re"lar holidays to ho"rly paid fac"lty members s"bEect to the terms and conditions pro1ided for therein.
The Co"rt belie1es that the aforementioned implementin r"le is not E"stified by the pro1isions of the la) )hich after all is silent )ith respect
to fac"lty members paid by the ho"r )ho beca"se of their teachin contracts are oblied to )or2 and consent to be paid only for )or2
act"ally done &e@cept )hen an emerency or a fort"ito"s e1ent or a national need calls for the declaration of special holidays'. Re"lar
holidays specified as s"ch by la) are 2no)n to both school and fac"lty members as no class days0> certainly the latter do not e@pect
payment for said "n)or2ed days, and this )as clearly in their minds )hen they entered into the teachin contracts.
On the other hand, both the la) and the $mplementin R"les o1ernin holiday pay are silent as to payment on 5pecial ;"blic 8olidays.
$t is readily apparent that the declared p"rpose of the holiday pay )hich is the pre1ention of dimin"tion of the monthly income of the
employees on acco"nt of )or2 interr"ptions is defeated )hen a re"lar class day is cancelled on acco"nt of a special p"blic holiday and
class ho"rs are held on another )or2in day to ma2e "p for time lost in the school calendar. Other)ise stated, the fac"lty member, altho"h
forced to ta2e a rest, does not earn )hat he sho"ld earn on that day. !e it noted that )hen a special p"blic holiday is declared, the fac"lty
,/
member paid by the ho"r is depri1ed of e@pected income, and it does not matter that the school calendar is e@tended in 1ie) of the days or
ho"rs lost, for their income that co"ld be earned from other so"rces is lost d"rin the e@tended days. 5imilarly, )hen classes are called off or
shortened on acco"nt of typhoons, floods, rallies, and the li2e, these fac"lty members m"st li2e)ise be paid, )hether or not e@tensions are
ordered.
;REM$5E5 CO35$?ERE?, the decision of respondent 3ational 4abor Relations Commission is hereby set aside, and a ne) one is hereby
RE3?ERE?%
&a' e(empting petitioner from payin ho"rly paid fac"lty members their pay for re"lar holidays, )hether the same be d"rin the reg!lar
semesters of the school year or d"rin semestral, Christmas, or 8oly 6ee2 1acations0
&b' b"t orderin petitioner to pay said fac"lty members their re"lar ho"rly rate on days declared as special holidays or for some reason
classes are called off or shortened for the ho"rs they are s"pposed to ha1e ta"ht, )hether e@tensions of class days be ordered or not0 in
case of e@tensions said fac"lty members shall li2e)ise be paid their ho"rly rates sho"ld they teach d"rin said e@tensions.
INTERNATIONAL SCHOOL ALLIANCE O" EDUCATORS ?ISAEA v. HON. LEONARDO A. GUISUMBING )* .)s $#-#$)t2 #s t.&
S&$,&t#,2 o/ L#1o, #*( E0-'o20&*tL HON. CRESENCIANO B. TRA!ANO )* .)s $#-#$)t2 #s t.& A$t)*g S&$,&t#,2 o/ L#1o, #*(
E0-'o20&*tL DR. BRIAN MACCAULEY )* .)s $#-#$)t2 #s t.& Su-&,)*t&*(&*t o/ I*t&,*#t)o*#' S$.oo'7M#*)'#L #*( INTERNATIONAL
SCHOOL, INC.
G.R. No. 1488+9 !u*& 1, 4888
"#$ts%
;ri1ate respondent $nternational 5chool, $nc. &the 5chool, for short', p"rs"ant to ;residential ?ecree 7.2, is a domestic ed"cational
instit"tion established primarily for dependents of forein diplomatic personnel and other temporary residents.
The 5chool hires both forein and local teachers as members of its fac"lty, classifyin the same into t)o% &1' forein(hires and &2' local(hires.
The 5chool employs fo"r tests to determine )hether a fac"lty member sho"ld be classified as a forein(hire or a local hire%
a. 6hat is one:s domicileL
b. 6here is one:s home economyL
c. To )hich co"ntry does one o)e economic alleianceL
d. 6as the indi1id"al hired abroad specifically to )or2 in the 5chool and )as the 5chool responsible for brinin that indi1id"al to the
;hilippinesL
5ho"ld the ans)er to any of these H"eries point to the ;hilippines, the fac"lty member is classified as a local hire0 other)ise, he or she is
deemed a forein(hire.
The 5chool rants forein(hires certain benefits not accorded local(hires. These incl"de ho"sin, transportation, shippin costs, ta@es, and
home lea1e tra1el allo)ance. 9orein(hires are also paid a salary rate t)enty(fi1e percent &2/N' more than local(hires. The 5chool E"stifies
the difference on t)o 7sinificant economic disad1antaes> forein(hires ha1e to end"re, namely% &a' the 7dislocation factor> and &b' limited
ten"re.
Issu&%
)hether the point(of(hire classification employed by the 5chool is discriminatory to 9ilipinos and that the rant of hiher salaries to forein(
hires constit"tes racial discrimination
H&'(%
Bes. The employer in this case has failed to dischare this b"rden. There is no e1idence here that forein(hires perform 2/N more efficiently
or effecti1ely than the local(hires. !oth ro"ps ha1e similar f"nctions and responsibilities, )hich they perform "nder similar )or2in
conditions. The 5chool cannot in1o2e the need to entice forein(hires to lea1e their domicile to rationaliCe the distinction in salary rates
)itho"t 1iolatin the principle of eH"al )or2 for eH"al pay.
6hile the Co"rt reconiCes the need of the 5chool to attract forein(hires, salaries sho"ld not be "sed as an enticement to the preE"dice of
local(hires. The local(hires perform the same ser1ices as forein(hires and they o"ht to be paid the same salaries as the latter. 9or the
same reason, the 7dislocation factor> and the forein(hires: limited ten"re also cannot ser1e as 1alid bases for the distinction in salary rates.
The dislocation factor and limited ten"re affectin forein(hires are adeH"ately compensated by certain benefits accorded them )hich are not
enEoyed by local(hires, s"ch as ho"sin, transportation, shippin costs, ta@es and home lea1e tra1el allo)ances.
,*
ATO:7BIG @EDGE MINING CO., INC. v. ATO:7BIG @EDGE MUTUAL BENE"IT ASSOCIATION
G.R. No. L79456 M#,$. 3, 1993
"#$ts%
?emand )as s"bmitted to petitioner by respondent "nion thro"h its officers for 1ario"s concession, amon )hich )ere &a' an increase of
;<./< in )aes, &b' comm"tation of sic2 and 1acation lea1e if not enEoyed d"rin the year, &c' 1ario"s pri1ilees, s"ch as free medical care,
medicine, and hospitaliCation, &d' riht to a closed shop, chec2 off, etc., &e' no dismissal )itho"t prior E"st ca"se and )ith a prior
in1estiation, etc. 5ome of the demands, )ere ranted by the petitioner, and the other )ere reEected, and so hearins )ere held and
e1idence s"bmitted on the latter. After the hearin the respondent co"rt rendered a decision, the most important pro1isions of )hich )ere
those fi@in the minim"m )ae for the laborers at ;..2<, declarin that additional compensation representin efficiency bon"s sho"ld not be
incl"ded as part of the )ae, and ma2in the a)ard effecti1e from 5eptember 4, 1,/<.
Issu&%
)hether the efficiency bon"s paid the laborer sho"ld ha1e been incl"ded in his )ae
8eld%
3o. 6hether or not bon"s forms part of )aes depends "pon the circ"mstances or condition for its payment. $f it is an additional
compensation )hich the employer promised and areed to i1e )itho"t any conditions imposed for its payment, s"ch as s"ccess of b"siness
or reater prod"ction or o"tp"t, then it is part of the )ae. !"t if it is paid only if profits are realiCed or a certain amo"nt of prod"cti1ity
achie1ed, it cannot be considered part of the )aes. $n the case at bar, it is not payable to all b"t to laborers only. $t is also paid on the basis
of act"al prod"ction or act"al )or2 accomplished. $f the desired oal of prod"ction is not obtained or the amo"nt of act"al )or2
accomplished, the bon"s does not accr"e. $t is e1idence that "nder the circ"mstances it is paid only )hen the labor becomes more efficient
or more prod"cti1e. $t is only an ind"cement for efficiency, a priCe therefor, not a part of the )ae.
RODUCERS BAN: O" THE HILIINES v. NATIONAL LABOR RELATIONS COMMISSION #*( RODUCERS BAN: EMLOYEES
ASSOCIATION
G.R. No. 188581 M#,$. 48, 4881
"#$ts%
;rod"cers !an2 of the ;hilippines, a ban2in instit"tion, has been pro1idin se1eral benefits to its employees since 1,71 )hen it started its
operation. Amon the benefits it had been re"larly i1in is a mid(year bon"s eH"i1alent to an employee:s one(month basic pay and a
Christmas bon"s eH"i1alent to an employee:s one )hole month salary &basic pay pl"s allo)ance'.
6hen ;.?. -/1, the la) rantin a 1.th month pay, too2 effect, the basic pay pre1io"sly bein i1en as part of the Christmas bon"s )as
applied as compliance to it &;.?. -/1', the allo)ances remained as Christmas bon"s.
9rom 1,-1 "p to 1,-., the ban2 contin"ed i1in one month basic pay as mid(year bon"s, one month basic pay as 1.th month pay b"t the
Christmas bon"s )as no loner based on the allo)ance b"t on the basic pay of the employees )hich is hiher.
$n the early part of 1,-4, the ban2 )as placed "nder conser1atorship b"t it still pro1ided the traditional mid(year bon"s.
!y 1irt"e of an alleed Monetary !oard Resol"tion 3o. 1/**, ban2 only a1e a one(half &1=2' month basic pay as compliance of the 1.th
month pay and none for the Christmas bon"s.
;ri1ate respondent ar"es that the mid(year and Christmas bon"ses, by reason of their ha1in been i1en for thirteen consec"ti1e years,
ha1e ripened into a 1ested riht and, as s"ch, can no loner be "nilaterally )ithdra)n by petitioner )itho"t 1iolatin Article 1<< of
;residential ?ecree 3o. 442, )hich prohibits the dimin"tion or elimination of benefits already bein enEoyed by the employees. Altho"h
pri1ate respondent concedes that the rant of a bon"s is discretionary on the part of the employer, it ar"es that, by reason of its lon and
re"lar concession, it may become part of the employee:s re"lar compensation.
On the other hand, petitioner asserts that it cannot be compelled to pay the alleed bon"s differentials d"e to its depressed financial
condition, as e1idenced by the fact that in 1,-4 it )as placed "nder conser1atorship by the Monetary !oard. Accordin to petitioner, it
s"stained losses in the millions of pesos from 1,-4 to 1,--, an assertion )hich )as affirmed by the labor arbiter. Moreo1er, petitioner points
o"t that the collecti1e barainin areement of the parties does not pro1ide for the payment of any mid(year or Christmas bon"s.
,7
Issu& K 1%
)hether pri1ate respondent is entitled to the bon"ses pay prayed for
H&'( K1%
3o. A 1o*us is an amo"nt ranted and paid to an employee for his ind"stry and loyalty )hich contrib"ted to the s"ccess of the employer:s
b"siness and made possible the realiCation of profits. $t is an act of enerosity ranted by an enlihtened employer to sp"r the employee to
reater efforts for the s"ccess of the b"siness and realiCation of bier profits. The rantin of a bon"s is a manaement preroati1e,
somethin i1en in addition to )hat is ordinarily recei1ed by or strictly d"e the recipient. Th"s, a bon"s is not a demandable and enforceable
obliation, e@cept )hen it is made part of the )ae, salary or compensation of the employee.
8o)e1er, an employer cannot be forced to distrib"te bon"ses )hich it can no loner afford to pay. To hold other)ise )o"ld be to penaliCe the
employer for his past enerosity.
Issu& K4%
)hether pri1ate respondent is entitled to 1.th month pay
H&'( K4%
3o. ;? -/1 reH"ires all employers to pay their employees recei1in a basic salary of not more than ; 1,<<< a month, reardless of the
nat"re of the employment, a 1.th month pay, not later than ?ecember 24 of e1ery year. 8o)e1er, employers already payin their employees
a 1.th month pay or its eH"i1alent are not co1ered by the la). Fnder the Re1ised #"idelines on the $mplementation of the 1.th Month ;ay
4a), the term 7eH"i1alent> shall be constr"ed to incl"de Christmas bon"s, mid(year bon"s, cash bon"ses and other payments amo"ntin to
not less than 1=12 of the basic salary. The intention of the la) )as to rant some relief ( not to all )or2ers ( b"t only to those not act"ally paid
a 1.thmonth salary or )hat amo"nts to it, by )hate1er name called. $t )as not en1isioned that a do"ble b"rden )o"ld be imposed on the
employer already payin his employees a 1.th month pay or its eH"i1alent )hether o"t of p"re enerosity or on the basis of a bindin
areement. To impose "pon an employer already i1in his employees the eH"i1alent of a 1.th month pay )o"ld be to penaliCe him for his
liberality and in all probability, the employer )o"ld react by )ithdra)in the bon"ses or resist f"rther 1ol"ntary rants for fear that if and )hen
a la) is passed i1in the same benefits, his prior concessions miht not be i1en d"e credit.
$n the case at bar, e1en ass"min the tr"th of pri1ate respondent:s claims reardin the payments recei1ed by its members in the form of
1.th month pay, mid(year bon"s and Christmas bon"s, it is noted that, for each and e1ery year in1ol1ed, the total amo"nt i1en by petitioner
)o"ld still e@ceed, or at least be eH"al to, one month basic salary and th"s, may be considered as an 7eH"i1alent> of the 1.thmonth pay
mandated by ;? -/1.
Issu& K 3%
)hether pri1ate respondent is entitled to holiday pay
H&'( K3%
3o. The red"ction of the di1isor to .<. &from .14' )as done for the sole p"rpose of increasin the employees: o1ertime pay, and )as not
meant to e@cl"de holiday pay from the monthly salary of petitioner:s employees. $n fact, it )as e@pressly stated in the inter(office
memorand"m ( also referred to by pri1ate respondent in its pleadins ( that the di1isor of .14 )ill still be "sed in the comp"tation for cash
con1ersion and in the determination of the daily rate. Th"s, based on the records of this case and the parties: o)n admissions, the Co"rt
holds that petitioner has complied )ith the reH"irements of Article ,4 of the 4abor Code.
HILIINE AGRICULTURAL COMMERCIAL AND INDUSTRIAL @OR:ERS UNION ?ACI@UA7TUC v. NATIONAL LABOR
RELATIONS COMMISSION AND 6ALLACAR TRANSIT, INC.
G.R. No. 18599+ August 1+, 1999
"#$ts%
;etitioner ;hilippine Aric"lt"ral Commercial and Aric"lt"ral 6or2ers Fnion K TFC; is the e@cl"si1e barainin aent of the ran2 and file
employees of respondent Dallacar Transit, $nc. ;etitioner "nion instit"ted a complaint )ith 34RC Reional Arbitration !ranch for payment of
1.th month pay in behalf of the dri1ers and cond"ctors of respondent company:s Disayan operation on the ro"nd that altho"h said dri1ers
and cond"ctors are compensated on a 7p"rely commission> basis as described in their Collecti1e !arainin Areement &C!A', they are
a"tomatically entitled to the basic minim"m pay mandated by la) sho"ld said commission be less than their basic minim"m for - ho"rs )or2.
Issu&%
)hether or not the b"s dri1ers and cond"ctors of respondent Dallacar Transit, $nc. are entitled to 1.th month pay
,-
H&'(%
Bes. On ?ecember 1*, 1,7/, ;.?. -/1, other)ise 2no)n as the 71.th Month ;ay> 4a), )as prom"lated. The same prescribed payment of
1.th month pay in the follo)in terms%
75ec. 1. All employers are hereby reH"ired to pay all their employees recei1in a basic salary of not more than ;1,<<<.<< a month,
reardless of the nat"re of the employment, a 1.th month pay not later than ?ecember 24 of e1ery year.
75ec. 2. Employers already payin their employees a 1.th month pay or its eH"i1alent are not co1ered by this ?ecree.>
The R"les and Re"lations $mplementin ;.?. 3o. -/1, iss"ed by the then 5ecretary of 4abor and Employment on ?ecember 22, 1,7/,
defined the follo)in basic terms%
7&a' 1.th month pay shall mean one(t)elfth &1=12' of the basic salary of an employee )ithin a calendar year0
7&b' basic salary shall incl!de all rem!nerations or earnings paid by an employer to an employer for services rendered, b"t may not incl"de
cost of li1in allo)ances ranted p"rs"ant to ;residential ?ecree 3o. /2/ or 4etter of $nstr"ctions 3o. 174, profit(sharin payments, and all
allo)ances and monetary benefits )hich are not considered or interated as part of the re"lar or basic salary of the employee at the time of
the prom"lation of the ?ecree on ?ecember 1*, 1,7/.>
;resident CoraCon C. AH"ino, e@ercisin both e@ec"ti1e and leislati1e a"thority, iss"ed Memorand"m Order 3o. 2- )hich pro1ided as
follo)s%
75ec.1. of ;residential ?ecree 3o. -/1 is hereby modified to the e@tent that all employers are hereby reH"ired to pay all their ran2(and(file
employees a 1.th month pay not later than ?ecember 24 of e1ery year.>
$n connection )ith and in implementation of Memorand"m Order 3o. 2-, the then Minister of 4abor and Employment iss"ed MO4E
E@planatory !"lletin 3o. -*(12 on 3o1ember 24, 1,-*. $tem 3o. / &a' of the said iss"ance read%
7Employees )ho are paid a fi@ed or g!aranteed wage pl"s commission are also entitled to the mandated 1.th month pay, based on their
total earnin&s' d"rin the calendar year, i.e., on both their fi@ed and "aranteed )ae and commission.>
9rom the foreoin, it is clear that e1ery employee recei1in a commission in addition to a fi@ed or "aranteed )ae or salary, is entitled to a
1.th month pay. 9or p"rposes of entitlin ran2 and file employees a 1.th month pay, it is immaterial )hether the employees concerned are
paid a "aranteed )ae pl"s commission or a commission )ith "aranteed )ae inasm"ch as the bottom line is that they recei1e a
"aranteed )ae.
$n the case at bench, )hile the b"s dri1ers and cond"ctors of respondent company are considered by the latter as bein compensated on a
commission basis, they are not paid p!rely by )hat they recei1e as commission. As admitted by respondent company, the said b"s dri1ers
and cond"ctors are a"tomatically entitled to the basic minim"m pay mandated by la) in case the commissions they earned be less than their
basic minim"m for - ho"rs )or2. E1idently therefore, the commissions form part of the )ae or salary of the b"s dri1ers and cond"ctors.
Co00)ss)o* is the recompense, compensation, re)ard of an employee, aent, salesman, e@ec"tor, tr"stee, recei1er, factor, bro2er or
bailee, )hen the same is calc"lated as a percentae on the amo"nt of his transactions or on the profit of the principal. 6hile said
commissions may be in the form of incenti1es or enco"raement to inspire said b"s dri1ers and cond"ctors to p"t a little more Ceal and
ind"stry on their Eobs, still, it is safe to say that the same are direct rem"nerations for ser1ices rendered, i1en the small rem"neration they
recei1e for the ser1ices they render, )hich is precisely the reason )hy pri1ate respondent allo)ed the dri1ers and cond"ctors a "aranteed
minim"m )ae.
STATES MARINE CORORATION #*( ROYAL LINE, INC. v. CEBU SEAMEN=S ASSOCIATION, INC.
G.R. No. L714+++ "&1,u#,2 48, 1963
"#$ts%
;etitioners 5tates Marine Corporation and Royal 4ine, $nc. )ere enaed in the b"siness of marine coast)ise transportation, employin
therein se1eral steamships of ;hilippine reistry. They had a collecti1e barainin contract )ith the respondent Ceb" 5eamen:s Association,
$nc. the respondent "nion filed )ith the Co"rt of $nd"strial Relations &C$R', a petition aainst the 5tates Marine Corporation. The Fnion
alleed that the officers and men )or2in on board the petitioners: 1essels ha1e not been paid their sic2 lea1e, 1acation lea1e and o1ertime
pay0 that the petitioners threatened or coerced them to accept a red"ction of salaries, obser1ed by other shipo)ners0 that after the Minim"m
,,
6ae 4a) had ta2en effect, the petitioners reH"ired their employees on board their 1essels, to pay the s"m of ;.4< for e1ery meal, )hile the
masters and officers )ere not reH"ired to pay their meals and that beca"se Captain Carlos Asensi had ref"sed to yield to the eneral
red"ction of salaries, the petitioners dismissed said captain )ho no) claims for reinstatement and the payment of bac2 )aes from
?ecember 2/, 1,/2, at the rate of ;/4<.<<, monthly.
5ince the beinnin of the operation of the petitioner:s b"siness, all the cre) of their 1essels ha1e been sinin 7shippin articles> in )hich
are stated opposite their names, the salaries or )aes they )o"ld recei1e. All seamen, )hether members of the cre) or dec2 officers or
enineers, ha1e been f"rnished free meals by the ship o)ners or operators. All the shippin articles sined by the master and the cre)
members, contained, amon others, a stip"lation, that in consideration of )hich ser1ices to be d"ly performed, the said master hereby
arees to pay to the said cre), as )aes, the s"ms aainst their names respecti1ely e@pressed in the contract0 and to s"pply them )ith
pro1isions, and d"rin the d"ration of the contract 7the master of the 1essel )ill pro1ide each member of the cre) s"ch daily s"bsistence as
shall be m"t"ally areed daily "pon bet)een said master and cre)0 or, in lie" of s"ch s"bsistence the cre) may reser1e the riht to demand
at the time of e@ec"tion of these articles that adeH"ate daily rations be f"rnished each member of the cre). $t is, therefore, apparent that,
aside from the payment of the respecti1e salaries or )aes, set opposite the names of the cre) members, the petitioners bo"nd themsel1es
to s"pply the cre) )ith ship:s pro1isions, daily s"bsistence or daily rations, )hich incl"de food.
This )as the sit"ation before A""st 4, 1,/1, )hen the Minim"m 6ae 4a) became effecti1e. After this date, ho)e1er, the companies
bean ded"ctin the cost of meals from the )aes or salaries of cre) members0 b"t no s"ch ded"ctions )ere made from the salaries of the
dec2 officers and enineers in all the boats of the petitioners.
Issu&%
)hether s"ch ded"ctions are leal
H&'(%
3o. 5"ch ded"ctions are not a"thoriCed. $n the coast)ise b"siness of transportation of passeners and freiht, the men )ho compose the
complement of a 1essel are pro1ided )ith free meals by the shipo)ners, operators or aents, beca"se they hold on to their )or2 and d"ties,
reardless of 7the stress and strain concomitant of a bad )eather, "nmindf"l of the daners that l"r2 ahead in the midst of the hih seas.>
$t is ar"ed that the food or meals i1en to the dec2 officers, marine enineers and "nlicensed cre) members in H"estion, )ere mere
7facilities> )hich sho"ld be ded"cted from )aes, and not 7s"pplements> )hich sho"ld not be ded"cted from s"ch )aes.
Su--'&0&*ts, therefore, constit"te e@tra rem"neration or special pri1ilees or benefits i1en to or recei1ed by the laborers o1er and abo1e
their ordinary earnins or )aes. "#$)')t)&s, on the other hand, are items of e@pense necessary for the laborer:s and his family:s e@istence
and s"bsistence so that by e@press pro1ision of la), they form part of the )ae and )hen f"rnished by the employer are ded"ctible
therefrom, since if they are not so f"rnished, the laborer )o"ld spend and pay for them E"st the same
$n short, the benefit or pri1ilee i1en to the employee )hich constit"tes an e@tra rem"neration abo1e and o1er his basic or ordinary earnin
or )ae, is s"pplement0 and )hen said benefit or pri1ilee is part of the laborers: basic )aes, it is a facility. The criterion is not so m"ch )ith
the 2ind of the benefit or item &food, lodin, bon"s or sic2 lea1e' i1en, b"t its p"rpose. Considerin, therefore, that the meals )ere freely
i1en to cre) members prior to A""st 4, 1,/1, )hile they )ere on the hih seas 7not as part of their )aes b"t as a necessary matter in the
maintenance of the health and efficiency of the cre) personnel d"rin the 1oyae>, the ded"ctions therein made for the meals i1en after
A""st 4, 1,/1, sho"ld be ret"rned to them, and the operator of the coast)ise 1essels affected sho"ld contin"e i1in the same benefit.
NORMA MABE;A v. NATIONAL LABOR RELATIONS COMMISSION, ETER NGIHOTEL SUREME
G.R. No. 118986 A-,)' 18, 1995
"#$ts%
3orma MabeCa contends that aro"nd the first )ee2 of May, 1,,1, she and her co(employees at the 8otel 5"preme in !a"io City )ere
as2ed by the hotel:s manaement to sin an instr"ment attestin to the latter:s compliance )ith minim"m )ae and other labor standard
pro1isions of la).
;etitioner sined the affida1it b"t ref"sed to o to the City ;rosec"tor:s Office to s)ear to the 1eracity and contents of the affida1it as
instr"cted by manaement. The affida1it )as ne1ertheless s"bmitted on the same day to the Reional Office of the ?epartment of 4abor and
Employment in !a"io City.
As leaned from the affida1it, the same )as dra)n by manaement for the sole p"rpose of ref"tin findins of the 4abor $nspector of ?O4E
&in an inspection of respondent:s establishment on 9ebr"ary 2, 1,,1' apparently ad1erse to the pri1ate respondent.
1<<
After she ref"sed to proceed to the City ;rosec"tor:s Office K on the same day the affida1it )as s"bmitted to the Cordillera Reional Office
of ?O4E K petitioner a1ers that she )as ordered by the hotel manaement to t"rn o1er the 2eys to her li1in H"arters and to remo1e her
belonins from the hotel premises. Accordin to her, respondent stronly chided her for ref"sin to proceed to the City ;rosec"tor:s Office
to attest to the affida1it. 5he thereafter rel"ctantly filed a lea1e of absence from her Eob )hich )as denied by manaement. 6hen she
attempted to ret"rn to )or2 on May 1<, 1,,1, the hotel:s cashier, Mararita Choy, informed her that she sho"ld not report to )or2 and,
instead, contin"e )ith her "nofficial lea1e of absence. ConseH"ently, on May 1., 1,,1, three days after her attempt to ret"rn to )or2,
petitioner filed a complaint for illeal dismissal before the Arbitration !ranch of the 3ational 4abor Relations Commission.
Issu& K1%
)hether petitioner )as illeally dismissed
H&'( K1%
Bes. The circ"mstances "pon )hich pri1ate respondent anchored his claim that petitioner 7abandoned> her Eob )ere not eno"h to constit"te
E"st ca"se to sanction the termination of her ser1ices "nder Article 2-. of the 4abor Code. 9or abandonment to arise, there m"st be
conc"rrence of t)o thins% 1' lac2 of intention to )or20 and 2' the presence of o1ert acts sinifyin the employee:s intention not to )or2.
Respondent does not disp"te the fact that petitioner tried to file a lea1e of absence )hen she learned that the hotel manaement )as
displeased )ith her ref"sal to attest to the affida1it. The fact that she made this attempt clearly indicates not an intention to abandon b"t an
intention to ret"rn to )or2 after the period of her lea1e of absence, had it been ranted, shall ha1e e@pired.
9"rthermore, )hile absence from )or2 for a proloned period may s"est abandonment in certain instances, mere absence of one or t)o
days )o"ld not be eno"h to s"stain s"ch a claim. The o1ert act &absence' o"ht to "nerrinly point to the fact that the employee has no
intention to ret"rn to )or2, 18 )hich is patently not the case here. $n fact, se1eral days after she had been ad1ised to ta2e an informal lea1e,
petitioner tried to res"me )or2in )ith the hotel, to no a1ail. $t )as only after she had been repeatedly reb"ffed that she filed a case for illeal
dismissal. These acts militate aainst the pri1ate respondent:s claim that petitioner abandoned her Eob.
Loss o/ $o*/)(&*$& sho"ld ideally apply only to cases in1ol1in employees occ"pyin positions of tr"st and confidence or to those
sit"ations )here the employee is ro"tinely chared )ith the care and c"stody of the employer:s money or property. To the first class belon
manaerial employees, i.e., those 1ested )ith the po)ers or preroati1es to lay do)n manaement policies and=or to hire, transfer, s"spend,
lay(off, recall, dischare, assin or discipline employees or effecti1ely recommend s"ch manaerial actions0 and to the second class belon
cashiers, a"ditors, property c"stodians, etc., or those )ho, in the normal and ro"tine e@ercise of their f"nctions, re"larly handle sinificant
amo"nts of money or property.
$n the case at bar, the s"spicio"s delay in pri1ate respondent:s filin of H"alified theft chares aainst petitioner lon after the latter e@posed
the hotel:s scheme &to a1oid its obliations as employer "nder the 4abor Code' by her act of filin illeal dismissal chares aainst the
pri1ate respondent )o"ld hardly )arrant serio"s consideration of loss of confidence as a 1alid ro"nd for dismissal.
Issu& K4%
)hether or not the dismissal by the pri1ate respondent of petitioner constit"tes an "nfair labor practice
H&'( K4%
Bes. The pi1otal H"estion in any case )here "nfair labor practice on the part of the employer is alleed is )hether or not the employer has
e@erted press"re, in the form of restraint, interference or coercion, aainst his employee:s riht to instit"te concerted action for better terms
and conditions of employment. 6itho"t do"bt, the act of compellin employees to sin an instr"ment indicatin that the employer obser1ed
labor standards pro1isions of la) )hen he miht ha1e not, toether )ith the act of terminatin or coercin those )ho ref"se to cooperate
)ith the employer:s scheme constit"tes "nfair labor practice. The first act clearly preempts the riht of the hotel:s )or2ers to see2 better
terms and conditions of employment thro"h concerted action.
;araraph &f' of Article 24- of the 4abor Code distinctly ma2es it an "nfair labor practice 7to dismiss, dischare or other)ise preE"dice or
discriminate aainst an employee for ha1in i1en or bein abo"t to i1e testimony.> 9or in not i1in positi1e testimony in fa1or of her
employer, petitioner had reser1ed not only her riht to disp"te the claim and proffer e1idence in s"pport thereof b"t also to )or2 for better
terms and conditions of employment.
The labor arbiter accepted pri1ate respondent:s bare claim that the reason the monetary benefits recei1ed by petitioner bet)een 1,-1 to
1,-7 )ere less than minim"m )ae )as beca"se petitioner did not factor in the meals, lodin, electric cons"mption and )ater she recei1ed
d"rin the period in her comp"tations. #rantin that meals and lodin )ere pro1ided and indeed constit"ted facilities, s"ch facilities co"ld
not be ded"cted )itho"t the employer complyin first )ith certain leal reH"irements. 6itho"t satisfyin these reH"irements, the employer
1<1
simply cannot ded"ct the 1al"e from the employee:s aes. 9irst, proof m"st be sho)n that s"ch facilities are c"stomarily f"rnished by the
trade. 5econd, the pro1ision of ded"ctible facilities m"st be 1ol"ntarily accepted in )ritin by the employee. 9inally, facilities m"st be chared
at fair and reasonable 1al"e.
These reH"irements )ere not met in the instant case. ;ri1ate respondent failed to present any company policy or "ideline to sho) that the
meal and lodin are part of the salary0 he failed to pro1ide proof of the employee:s )ritten a"thoriCation0 and, he failed to sho) ho) he
arri1ed at the 1al"ations.
More sinificantly, the food and lodin, or the electricity and )ater cons"med by the petitioner )ere not facilities b"t s"pplements. A benefit
or pri1ilee ranted to an employee for the con1enience of the employer is not a facility. The criterion in ma2in a distinction bet)een the t)o
not so m"ch lies in the 2ind &food, lodin' b"t the p"rpose. Considerin, therefore, that hotel )or2ers are reH"ired to )or2 different shifts
and are e@pected to be a1ailable at 1ario"s odd ho"rs, their ready a1ailability is a necessary matter in the operations of a small hotel, s"ch
as the pri1ate respondent:s hotel.
$t is therefore e1ident that petitioner is entitled to the payment of the deficiency in her )aes eH"i1alent to the f"ll )ae applicable from May
1., 1,-- "p to the date of her illeal dismissal.
Additionally, petitioner is entitled to payment of ser1ice incenti1e lea1e pay, emerency cost of li1in allo)ance, niht differential pay, and
1.th month pay for the periods alleed by the petitioner as the pri1ate respondent has ne1er been able to add"ce proof that petitioner )as
paid the aforestated benefits.
MAYON HOTEL < RESTAURANT, ACITA O. O #*(Io, !OSE"A O LAM v. ROLANDO ADANA, CHONA BUMALAY, ROGER BURCE,
EDUARDO ALAMARES, AMADO ALAMARES, EDGARDO TORRE"RANCA, LOURDES CAMIGLA, TEODORO LAURENARIA,
@ENE"REDO LO6ERES, LUIS GUADES, AMADO MACANDOG, ATERNO LLARENA, GREGORIO NICERIO, !OSE ATRACTI6O,
MIGUEL TORRE"RANCA, #*( SANTOS BRODOLA
G.R. No. 19563+ M#2 16, 4889
"#$ts%
;etitioner Mayon 8otel O Resta"rant is a sinle proprietor b"siness reistered in the name of petitioner ;acita O. ;o, )hose mother,
petitioner +osefa ;o 4am, manaes the establishment. The hotel and resta"rant employed abo"t 1* employees.
?"e to the e@piration and non(rene)al of the lease contract for the rented space occ"pied by the said hotel and resta"rant at RiCal 5treet,
the hotel operations of the b"siness )ere s"spended on March .1, 1,,7. The operation of the resta"rant )as contin"ed in its ne) location at
EliCondo 5treet, 4eaCpi City, )hile )aitin for the constr"ction of a ne) Mayon 8otel O Resta"rant at ;eTaranda 5treet, 4eaCpi City. Only
, of the 1* employees contin"ed )or2in in the Mayon Resta"rant at its ne) site.
The 1* employees filed complaints for "nderpayment of )aes and other money claims aainst petitioners.
Issu& K1%
6ere respondents 4o1eres, #"ades, Macando, Atracti1o, 4larena and 3icerio illeally dismissedL
H&'( K1%
Bes. 6hile the $'osu,& of the hotel operations in April of 1,,7 may ha1e been temporary, )e hold that the e1idence on record belie any
claim of petitioners that the '#27o// of respondents on that same date )as merely temporary. On the contrary, )e find s"bstantial e1idence
that petitioners intended the termination to be permanent. "),st, respondents 4o1eres, Macando, 4larena, #"ades, 3icerio and Alamares
filed the complaint for illeal dismissal )00&()#t&'2 #/t&, the clos"re of the hotel operations in RiCal 5treet, not)ithstandin the alleed
temporary nat"re of the clos"re of the hotel operations, and petitioners: alleations that the employees assined to the hotel operations 2ne)
abo"t this beforehand. S&$o*(, in their position paper s"bmitted to the 4abor Arbiter, petitioners in1o2ed Article 2-* of the 4abor Code to
assert that the employer(employee relationship )as merely s"spended, and therefore the claim for separation pay )as premat"re and
)itho"t leal or fact"al basis. But t.&2 0#(& *o 0&*t)o* o/ #*2 )*t&*t to ,&$#'' t.&s& ,&s-o*(&*ts to 3o,> u-o* $o0-'&t)o* o/ t.&
*&3 -,&0)s&s. T.),(, the 1ario"s pleadins on record sho) that petitioners held respondents, partic"larly 4o1eres, as responsible for
mismanaement of the establishment and for ab"se of tr"st and confidence. ;etitioner +osefa ;o 4am:s affida1it on +"ly 21, 1,,-, for
e@ample, sH"arely blamed respondents, specifically 4o1eres, !"malay and Camila, for ab"sin her leniency and ca"sin petitioner Mayon
8otel O Resta"rant to s"stain 7contin"o"s losses "ntil it is closed.> 5he then asserts that respondents 7are not entitled to separation pay for
they )ere not terminated and if e1er the b"siness ceased to operate it )as beca"se of losses.> Aain, petitioners ma2e the same alleation
in their memorand"m on appeal )ith the 34RC, )here they alleed that . years prior to the e@piration of the lease in 1,,7, the operation of
the 8otel had been s"stainin consistent losses, and these )ere solely attrib"ted to respondents, b"t most especially d"e to 4o1eres:s
1<2
mismanaement and ab"se of petitioners: tr"st and confidence. E1en the petition filed in this co"rt made reference to the separation of the
respondents d"e to 7se1ere financial losses and re1erses,> aain imp"tin it to respondents: mismanaement. The 1ehemence of petitioners:
acc"sation of mismanaement aainst respondents, especially aainst 4o1eres, is inconsistent )ith the desire to recall them to )or2.
"ou,t., petitioners: memorand"m on appeal also a1erred that the case )as filed 7not beca"se of the b"siness bein operated by them or
that they )ere s"pposedly not recei1in benefits from the 4abor Code )hich is tr"e, b"t beca"se of the fact that t.& sou,$& o/ t.&),
')v&').oo(, 3.&t.&, '&g#' o, )00o,#', 3#s sto--&( o* M#,$. 31, 1995, )hen the o)ner of the b"ildin terminated the 4ease Contract.>
9ifth, petitioners had inconsistencies in their pleadins &)ith the 34RC, CA and )ith this Co"rt' in referrin to the clos"re, i.e., in the petition
filed )ith this co"rt, they assert that there is no illeal dismissal beca"se there )as 7only a temporary cessation or s"spension of operations
of the hotel and resta"rant d"e to circ"mstances beyond the control of petitioners, and that is, the non(rene)al of the lease contract...> And
yet, in the same petition, they also assert that% &a' the separation of respondents )as d"e to se1ere financial losses and re1erses leadin to
t.& $'osu,& o/ t.& 1us)*&ss0 and &b' -&t)t)o*&, ;acita ;o .#( to $'os& s.o- and )as ban2r"pt and has no liH"idity to p"t "p her o)n
b"ildin to ho"se Mayon 8otel O Resta"rant. S)Nt., and finally, the "ncontro1erted findin of the 4abor Arbiter that petitioners terminated all
the other respondents, by not employin them )hen the 8otel and Resta"rant transferred to its ne) site on ;eTaranda 5treet. $ndeed, in this
same memorand"m, petitioners referred to all respondents as 7former employees of Mayon 8otel O Resta"rant.
These factors may be inconcl"si1e indi1id"ally, b"t )hen ta2en toether, they lead "s to concl"de that petitioners really intended to dismiss
all respondents and merely "sed the termination of the lease &on RiCal 5treet premises' as a means by )hich they co"ld terminate their
employees.
The Co"rt )as not impressed by petitioners: claim that se1ere b"siness losses E"stified their fail"re to reinstate respondents. The e1idence to
pro1e this fact is inconcl"si1e. !"t more important, serio"s b"siness losses do not e@c"se the employer from complyin )ith the clearance or
report reH"ired "nder Article 2-. of the 4abor Code and its implementin r"les before terminatin the employment of its )or2ers. $n the
absence of E"stifyin circ"mstances, the fail"re of petitioners to obser1e the proced"ral reH"irements set o"t "nder Article 2-4, taints their
act"ations )ith bad faith, especially since they claimed that they ha1e been e@periencin losses in the three years before 1,,7. To say the
least, if it )ere tr"e that the lay(off )as temporary b"t then serio"s b"siness losses pre1ented the reinstatement of respondents, then
petitioners sho"ld ha1e complied )ith the reH"irements of )ritten notice. The reH"irement of la) mandatin the i1in of notices )as
intended not only to enable the employees to loo2 for another employment and therefore ease the impact of the loss of their Eobs and the
correspondin income, b"t more importantly, to i1e the ?epartment of 4abor and Employment &?O4E' the opport"nity to ascertain the 1erity
of the alleed a"thoriCed ca"se of termination.
6hile the Co"rt reconiCes the riht of the employer to terminate the ser1ices of an employee for a E"st or a"thoriCed ca"se, the dismissal of
employees m"st be made )ithin the parameters of la) and p"rs"ant to the tenets of fair play. And in termination disp"tes, the b"rden of
proof is al)ays on the employer to pro1e that the dismissal )as for a E"st or a"thoriCed ca"se. 6here there is no sho)in of a clear, 1alid
and leal ca"se for termination of employment, the la) considers the case a matter of illeal dismissal.
The Co"rt therefore reinstate the 4abor Arbiter:s decision )ith the follo)in modifications%
&a' 5eparation pay for the illeal dismissal of respondents 4o1eres, Macando and 4larena0 &5antos !roTola cannot be ranted
separation pay as he made no s"ch claim'0
&b' ' Retirement pay for respondents #"ades, 3icerio, and Alamares, )ho at the time of dismissal )ere entitled to their retirement
benefits p"rs"ant to Article 2-7 of the 4abor Code as amended0 and
&c' ?amaes for respondents 4o1eres, Macando, 4larena, #"ades, 3icerio, Atracti1o, and !roTola.
Issu& K4%
Are respondents entitled to their money claims d"e to "nderpayment of )aes, and nonpayment of holiday pay, rest day premi"m, 5$4;,
CO4A, o1ertime pay, and niht shift differential payL
H&'( K4%
Bes. Respondents ha1e set o"t )ith partic"larity in their complaint, position paper, affida1its and other doc"ments the labor standard benefits
they are entitled to, and )hich they alleed that petitioners ha1e failed to pay them. $t )as therefore petitioners: b"rden to pro1e that they
ha1e paid these money claims.
The doc"ments petitioners s"bmitted, i.e., affida1its e@ec"ted by some of respondents d"rin an oc"lar inspection cond"cted by an inspector
of the ?O4E0 notices of inspection res"lt and 9acility E1al"ation Orders iss"ed by ?O4E, are not s"fficient to pro1e payment. ?espite
repeated orders from the 4abor Arbiter, petitioners failed to s"bmit the pertinent employee files, payrolls, records, remittances and other
similar doc"ments )hich )o"ld sho) that respondents rendered )or2 entitlin them to payment for o1ertime )or2, niht shift differential,
premi"m pay for )or2 on holidays and rest day, and payment of these as )ell as the CO4A and the 5$4; G doc"ments )hich are not in
respondents: possession b"t in the c"stody and absol"te control of petitioners !y choosin not to f"lly and completely disclose information
1<.
and present the necessary doc"ments to pro1e payment of labor standard benefits d"e to respondents, petitioners failed to dischare the
b"rden of proof. $ndeed, petitioners: fail"re to s"bmit the necessary doc"ments )hich as employers are in their possession, in spite of orders
to do so, i1es rise to the pres"mption that their presentation is preE"dicial to its ca"se.
;etitioners ne@t claim that the cost of the food and snac2s pro1ided to respondents as facilities sho"ld ha1e been incl"ded in rec2onin the
payment of respondents: )aes. They state that altho"h on the s"rface respondents appeared to recei1e minimal )aes, petitioners had
ranted respondents other benefits )hich are considered part and parcel of their )aes and are allo)ed "nder e@istin la)s. They claim that
these benefits ma2e "p for )hate1er inadeH"acies there may be in compensation.
The cost of meals and snac2s p"rportedly pro1ided to respondents cannot be ded"cted as part of respondents: minim"m )ae.
E1en rantin that meals and snac2s )ere pro1ided and indeed constit"ted facilities, s"ch facilities co"ld not be ded"cted )itho"t
compliance )ith certain leal reH"irements. As stated in M#1&E# v. NLRC, the employer simply cannot ded"ct the 1al"e from the employee:s
)aes )itho"t satisfyin the follo)in% &a' proof that s"ch facilities are c"stomarily f"rnished by the trade0 &b' the pro1ision of ded"ctible
facilities is 1ol"ntarily accepted in )ritin by the employee0 and &c' the facilities are chared at fair and reasonable 1al"e. The records are
clear that petitioners failed to comply )ith these reH"irements. There )as no proof of respondents: )ritten a"thoriCation. $ndeed, the 4abor
Arbiter fo"nd that )hile the respondents admitted that they )ere i1en meals and merienda, the H"ality of food ser1ed to them )as not )hat
)as pro1ided for in the 9acility E1al"ation Orders and it )as only )hen they filed the cases that they came to 2no) of this s"pposed 9acility
E1al"ation Orders. ;etitioner +osefa ;o 4am herself #(0)tt&( that she did not inform the respondents of the facilities she had applied for.
More important, )e note the "ncontro1erted testimony of respondents on record that they )ere reH"ired to eat in the hotel and resta"rant so
that they )ill not o home and there is no interr"ption in the ser1ices of Mayon 8otel O Resta"rant. As r"led in M#1&E#, food or snac2s or
other con1enience pro1ided by the employers are deemed as s"pplements if they are ranted for the con1enience of the employer. The
criterion in ma2in a distinction bet)een a s"pplement and a facility does not so m"ch lie in the 2ind &food, lodin' b"t the p"rpose.
Considerin, therefore, that hotel )or2ers are reH"ired to )or2 different shifts and are e@pected to be a1ailable at 1ario"s odd ho"rs, their
ready a1ailability is a necessary matter in the operations of a small hotel, s"ch as petitioners: b"siness. The ded"ction of the cost of meals
from respondents: )aes, therefore, sho"ld be remo1ed.
SE6ILLA TRADING COMANY v. A.6.A. TOMAS E. SEMANA, SE6ILLA TRADING @OR:ERS UNIONHSUER
G.R. No. 194+96 A-,)' 48, 488+
"#$ts%
9or t)o to three years prior to 1,,,, petitioner 5e1illa Tradin Company &5e1illa Tradin, for short', a domestic corporation enaed in
tradin b"siness, oraniCed and e@istin "nder ;hilippine la)s, added to the base fi"re, in its comp"tation of the 1.th(month pay of its
employees, the amo"nt of other benefits recei1ed by the employees )hich are beyond the basic pay. These benefits incl"ded%
&a' O1ertime premi"m for re"lar o1ertime, leal and special holidays0
&b' 4eal holiday pay, premi"m pay for special holidays0
&c' 3iht premi"m0
&d' !erea1ement lea1e pay0
&e' Fnion lea1e pay0
&f' Maternity lea1e pay0
&' ;aternity lea1e pay0
&h' Company 1acation and sic2 lea1e pay0 and
&i' Cash con1ersion of "n"sed company 1acation and sic2 lea1e
;etitioner then effected a chane in the comp"tation of the thirteenth month pay, as follo)s%
1.th(month pay Y net basic pay
12 months
)here%
net basic pay Y ross pay G &non(basic pay or other benefits'
3o) e@cl"ded from the base fi"re "sed in the comp"tation of the thirteenth month pay are the follo)in%
a' O1ertime premi"m for re"lar o1ertime, leal and special holidays0
b' 4eal holiday pay, premi"m pay for special holidays0
c' 3iht premi"m0
1<4
d' !erea1ement lea1e pay0
e' Fnion lea1e pay0
f' Maternity lea1e pay0
' ;aternity lea1e pay0
h' Company 1acation and sic2 lea1e pay0 and
i' Cash con1ersion of "n"sed 1acation=sic2 lea1e.
8ence, the ne) comp"tation red"ced the employees: thirteenth month pay. The daily piece(rate )or2ers represented by pri1ate respondent
5e1illa Tradin 6or2ers Fnion G 5F;ER &Fnion, for short', a d"ly oraniCed and reistered "nion, thro"h the #rie1ance Machinery in their
Collecti1e !arainin Areement, contested the ne) comp"tation and red"ction of their thirteenth month pay.
Issu&%
)hether or not the e@cl"sion of lea1es and other related benefits in the comp"tation of 1.th(month pay is 1alid
H&'(%
3o. Fnder ;residential ?ecree -/1 and its implementin r"les, the basic salary of an employee is "sed as the basis in the determination of
his 1.th(month pay. Any compensations or rem"nerations )hich are deemed not part of the basic pay is e@cl"ded as basis in the
comp"tation of the mandatory bon"s.
Fnder the R"les and Re"lations $mplementin ;residential ?ecree -/1, the follo)in compensations are deemed not part of the basic
salary%
a' Cost(of(li1in allo)ances ranted p"rs"ant to ;residential ?ecree /2/ and 4etter of $nstr"ction 3o. 1740
b' ;rofit sharin payments0
c' All allo)ances and monetary benefits )hich are not considered or interated as part of the re"lar basic salary of the employee at
the time of the prom"lation of the ?ecree on ?ecember 1*, 1,7/.
Fnder a later set of 5"pplementary R"les and Re"lations $mplementin ;residential ?ecree -/1 iss"ed by the then 4abor 5ecretary !las
Ople, overtime pay, earnings and other rem!nerations are e@cl"ded as part of the basic salary and in the comp"tation of the 1.th(month pay.
The e@cl"sion of cost(of(li1in allo)ances "nder ;residential ?ecree /2/ and 4etter of $nstr"ction 3o. 174 and profit sharin payments
indicate the intention to strip basic salary of other payments )hich are properly considered as 7frine> benefits. 4i2e)ise, the catch(all
e@cl"sionary phrase 7all allo)ances and monetary benefits )hich are not considered or interated as part of the basic salary> sho)s also the
intention to strip basic salary of any and all additions )hich may be in the form of allo)ances or 7frine> benefits.
Moreo1er, the 5"pplementary R"les and Re"lations $mplementin ;residential ?ecree -/1 is e1en more empathic in declarin that
earnins and other rem"nerations )hich are not part of the basic salary shall not be incl"ded in the comp"tation of the 1.th(month pay.
9rom 1,7/ to 1,-1, petitioner had freely, 1ol"ntarily and contin"o"sly incl"ded in the comp"tation of its employees: thirteenth month pay,
)itho"t the payments for sic2, 1acation and maternity lea1e, premi"m for )or2 done on rest days and special holidays, and pay for re"lar
holidays. The considerable lenth of time the H"estioned items had been incl"ded by petitioner indicates a "nilateral and 1ol"ntary act on its
part, s"fficient in itself to neate any claim of mista2e.
A company practice fa1orable to the employees had indeed been established and the payments made p"rs"ant thereto, ripened into benefits
enEoyed by them. And any benefit and s"pplement bein enEoyed by the employees cannot be red"ced, diminished, discontin"ed or
eliminated by the employer, by 1irt"e of 5ec. 1< of the R"les and Re"lations $mplementin ;.?. 3o. -/1, and Art. 1<< of the 4abor Code of
the ;hilippines )hich prohibit the dimin"tion or elimination by the employer of the employees: e@istin benefits.
$n the case at bar, -&t)t)o*&, S&v)''# T,#()*g >&-t t.& -,#$t)$& o/ )*$'u()*g *o*71#s)$ 1&*&/)ts su$. #s -#)( '&#v&s /o, u*us&( s)$>
'&#v& #*( v#$#t)o* '&#v& )* t.& $o0-ut#t)o* o/ t.&), 13t.70o*t. -#2 /o, #t 4 2&#,s. T.)s, 3& ,u'& ')>&3)s& $o*st)tut&s vo'u*t#,2
&0-'o2&, -,#$t)$& 3.)$. $#**ot 1& u*)'#t&,#''2 3)t.(,#3* 12 t.& &0-'o2&, 3)t.out v)o'#t)*g A,t. 188 o/ t.& L#1o, Co(&%
A,t. 188. -rohi'ition against elimination or diminution of 'enefits. H Not.)*g )* t.)s Boo> s.#'' 1& $o*st,u&( to &')0)*#t& o, )* #*2
3#2 ()0)*)s. su--'&0&*ts, o, ot.&, &0-'o2&& 1&*&/)ts 1&)*g &*Oo2&( #t t.& t)0& o/ -,o0u'g#t)o* o/ t.)s Co(&.
AG7ASA STEEL @OR:S, INC. v. COURT O" AEALS, "ORMER SIFTH DI6ISION #*( AG7ASA STEEL @OR:ERS UNION ?S@UA
G.R. No. 1666+5 M#,$. 31, 4886
1</
"#$ts%
;etitioner ;a(Asa 5teel 6or2s, $nc. is a corporation d"ly oraniCed and e@istin "nder ;hilippine la)s and is enaed in the man"fact"re of
steel bars and )ire rods. ;a(Asa 5teel 6or2ers Fnion is the d"ly a"thoriCed barainin aent of the ran2(and(file employees of petitioner.
On +an"ary -, 1,,-, the Reional Tripartite 6aes and ;rod"cti1ity !oard &6ae !oard' of the 3ational Capital Reion &3CR' iss"ed 6ae
Order 3o. 3CR(<*.2 $t pro1ided for an increase of ;1..<< per day in the salaries of employees recei1in the minim"m )ae, and a
conseH"ent increase in the minim"m )ae rate to ;1,-.<< per day. ;etitioner and the Fnion neotiated on ho) to o abo"t the )ae
adE"stments. ;etitioner for)arded a letter to the Fnion )ith the list of the salary adE"stments of the ran2(and(file employees after the
implementation of 6ae Order 3o. 3CR(<*, and the notation that said 7adE"stments )ere in accordance )ith the form"la ItheyJ ha1e
disc"ssed and )ere desined so as no distortion shall res"lt from the implementation of 6ae Order 3o. 3CR(<*.>
On 5eptember 2., 1,,,, petitioner and the Fnion entered into a Collecti1e !arainin Areement &C!A', effecti1e +"ly 1, 1,,, "ntil +"ly 1,
2<<4. 5ection 1, Article D$ &5alaries and 6ae' of said C!A pro1ides%
75ection 1. 6A#E A?+F5TME3T ( The COM;A3B arees to rant all the )or2ers, )ho are already re"lar and co1ered by this
A#REEME3T at the effecti1ity of this A#REEME3T, a eneral )ae increase as follo)s%
+"ly 1, 1,,, . . . . . . . . . . . ;1/.<< per day per employee
+"ly 1, 2<<< . . . . . . . . . . . ;2/.<< per day per employee
+"ly 1, 2<<1 . . . . . . . . . . . ;.<.<< per day per employee.>
The aforesaid )ae increase shall be implemented across the board. Any 6ae Order to be implemented by the Reional Tripartite 6ae
and ;rod"cti1ity !oard shall be in addition to the )ae increase ad1erted to abo1e. 8o)e1er, if no )ae increase is i1en by the 6ae
!oard )ithin si@ &*' months from the sinin of this A#REEME3T, the Manaement is )illin to i1e the follo)in increases, to )it%
+"ly 1, 1,,, . . . . . . . . . . . ;2<.<< per day per employee
+"ly 1, 2<<< . . . . . . . . . . . ;2/.<< per day per employee
+"ly 1, 2<<1 . . . . . . . . . . . ;.<.<< per day per employee
On October 14, 1,,,, 6ae Order 3o. 3CR(<77 )as iss"ed, and on October 2*, 1,,,, its $mplementin R"les and Re"lations. $t pro1ided
for a ;2/./< per day increase in the salary of employees recei1in the minim"m )ae and increased the minim"m )ae to;22../< per day.
;etitioner paid the ;2/./< per day increase to all of its ran2(and(file employees.
On +"ly 1, 2<<<, the ran2(and(file employees )ere ranted the second year increase pro1ided in the C!A in the amo"nt of ;2/.<< per day.
On 3o1ember 1, 2<<<, 6ae Order 3o. 3CR(<-, too2 effect. 5ection 1 thereof pro1ides%
75ection 1. Fpon the effecti1ity of this 6ae Order, pri1ate sector )or2ers and employees in the 3ational Capital Reion recei1in the
prescribed daily minim"m )ae rate of ;22../< shall recei1e an increase of T6E3TB 5$Q ;E5O5 and 9$9TB CE3TADO5 &;2*./<' per day,
thereby settin the ne) minim"m )ae rate in the 3ational Capital Reion at T6O 8F3?RE? 9$9TB ;E5O5 &;2/<.<<' per day.>
Then Fnion president 4"cenio !rin reH"ested petitioner to implement the increase "nder 6ae Order 3o. 3CR(<- in fa1or of the company:s
ran2(and(file employees. ;etitioner reEected the reH"est, claimin that since none of the employees )ere recei1in a daily salary rate lo)er
than ;2/<.<< and there )as no )ae distortion, it )as not oblied to rant the )ae increase.
Issu&%
)hether or not the company )as oblied to rant the )ae increase "nder 6ae Order 3o. 3CR(<- as a matter of practice
H&'(%
3o. ;etitioner is not oblied to rant the )ae increase "nder 6ae Order 3o. 3CR(<- either by 1irt"e of the C!A, or as a matter of
company practice.
6ae Order 3o. 3CR(<- specifically pro1ides that only those in the pri1ate sector in the 3CR recei1in the prescribed daily minim"m )ae
rate of ;22..<< per day )o"ld recei1e an increase of ;2*./< a day, thereby settin the ne) minim"m )ae rate in said reion to ;2/<.<<
per day. There is no disp"te that, )hen the order )as iss"ed, the lo)est paid employee of petitioner )as recei1in a )ae hiher than
;2/<.<< a day. As s"ch, its employees had no riht to demand for an increase "nder said order.
1<*
Employers &"nless e@empt' in Metro Manila &incl"din the petitioner' are mandated to implement the said )ae order b"t limited to those
entitled thereto. There is no leal basis to implement the same across(the(board. A per"sal of the record sho)s that the lo)est paid
employee before the implementation of 6ae Order Z- is ;2/<.<<=day and none )as recei1in belo) ;22../< minim"m. This co"ld only
mean that the "nion can no loner demand for any )ae distortion adE"stment. 3either co"ld they insist for an adE"stment of ;2*./<
increase "nder 6ae Order Z-. The pro1ision of )ae order Z- and its implementin r"les are 1ery clear as to )ho are entitled to the
;2*./<=day increase, i.e., 7pri1ate sector )or2ers and employees in the 3ational Capital Reion recei1in the prescribed daily minim"m
)ae rate of ;22../< shall recei1e an increase of ;2*./< per day,> and since the lo)est paid is ;2/<.<<=day the company is not oblied to
adE"st the )aes of the )or2ers.
The Co"rt finds no e1idence to pro1e that the rant of a )ae(order(mandated increase to all the employees reardless of their salary rates
on an areement collateral to the C!A had ripened into company practice before the effecti1ity of 6ae Order 3o. 3CR(<-. Respondent
Fnion failed to add"ce proof on the salaries of the employees prior to the iss"ance of each )ae order to establish its alleation that, e1en if
the employees )ere recei1in salaries abo1e the minim"m )ae and there )as no )ae distortion, they )ere still ranted salary increase.
Only the follo)in lists of salaries of respondent Fnion:s members )ere presented in e1idence% &1' before 6ae Order 3o. 3CR(<* )as
iss"ed0 &2' after 6ae Order 3o. 3CR(<* )as implemented0 &.' after the rant of the first year increase "nder the C!A0 &4' after 6ae Order
3o. 3CR(<7 )as implemented0 and &/' after the second year increase in the C!A )as implemented.
MANILA !OC:EY CLUB EMLOYEES LABOR UNION7TG@O v. MANILA !OC:EY CLUB, INC.
G.R. No. 165568 M#,$. 5, 4885
"#$ts%
;etitioner Manila +oc2ey Cl"b Employees 4abor Fnion(;T#6O and respondent Manila +oc2ey Cl"b, $nc., a corporation )ith a leislati1e
franchise to cond"ct, operate and maintain horse races, entered into a Collecti1e !arainin Areement &C!A' effecti1e +an"ary 1, 1,,* to
?ecember .1, 2<<<. The C!A o1erned the economic rihts and obliations of respondent:s re"lar monthly paid ran2(and(file employees.
$n the C!A, the parties areed to a 7(ho"r )or2 sched"le from ,%<< a.m. to 12%<< noon and from 1%<< p.m. to /%<< p.m. on a )or2 )ee2 of
Monday to 5at"rday, as contained "nder 5ection 1, Article $D, of the same C!A, to )it%
75ection 1. !oth parties to this Areement aree to obser1e the se1en(ho"r )or2 sched"le here)ith sched"led to be from ,%<< a.m. to 12%<<
noon and 1%<< p.m. to / p.m. on )or2 )ee2 of Monday to 5at"rday. All )or2 performed in e@cess of se1en &7' ho"rs )or2 sched"le and on
days not incl"ded )ithin the )or2 )ee2 shall be considered o1ertime and paid as s"ch. E@cept those monthly compensation )hich incl"des
)or2 performed d"rin 5at"rday, 5"nday, and 8oliday )hen races are held at the Cl"b.>
Accordinly, o1ertime on an ordinary )or2in day shall be rem"nerated in an amo"nt eH"i1alent to the )or2er:s re"lar basic )ae pl"s
t)enty fi1e percent &2/N' thereof. 6here the employee is permitted or s"ffered to )or2 on leally mandated holidays or on his desinated
rest day )hich is not a leally mandated holiday, thirty percent &.<N' shall be added to his basic )ae for a se1en ho"r )or20 )hile )or2
rendered in e@cess of se1en ho"rs on leally mandated holidays and rest days not fallin )ithin the aforestated cateories day shall be
additionally compensated for the o1ertime )or2 eH"i1alent to his rate for the first se1en ho"rs on a leally mandated holiday or rest day pl"s
thirty percent &.<N' thereof.
The C!A li2e)ise reser1ed in respondent certain manaement preroati1es, incl"din the determination of the )or2 sched"le, as pro1ided
"nder 5ection 2, Article Q$%
75ection 2. The COM;A3B shall ha1e e@cl"si1e control in the manaement of the offices and direction of the employees. This shall incl"de,
b"t shall not be limited to, the riht to plan, direct and control office operations, to hire, assin and transfer employees from one Eob to
another or from one department to another0 to promote, demote, discipline, s"spend, dischare or terminate employees for proper ca"se
and=or in accordance )ith la), to relie1e employees from d"ty beca"se of lac2 of )or2 or for other leitimate reasons0 or to introd"ce ne) or
impro1ed methods or facilities0 or to chane e@istin methods or facilities to chane the sched"les of )or20 and to ma2e and enforce r"les
and re"lations to carry o"t the f"nctions of manaement, pro1ided, ho)e1er, that the COM;A3B )ill not "se these rihts for the p"rpose of
discrimination aainst any employee beca"se of his membership in the F3$O3. ;ro1ided, f"rther, that the preroati1es pro1ided for "nder
this 5ection shall be s"bEect to, and in accordance )ith pertinent directi1es, proclamations and their implementin r"les and re"lations.>
On April ., 1,,,, respondent iss"ed an inter(office memorand"m declarin that, effecti1e April 2<, 1,,,, the ho"rs of )or2 of re"lar
monthly(paid employees shall be from 1%<< p.m. to -%<< p.m. )hen horse races are held, that is, e1ery T"esday and Th"rsday. The
memorand"m, ho)e1er, maintained the ,%<< a.m. to /%<< p.m. sched"le for non(race days.
;etitioner H"estioned the abo1e office memorand"m as 1iolati1e of the prohibition aainst non(dimin"tion of )aes and benefits "aranteed
"nder 5ection 1, Article $D, of the C!A )hich specified the )or2 sched"le of respondent:s employees to be from ,%<< a.m. to /%<< p.m.
1<7
;etitioner claimed that as a res"lt of the memorand"m, the employees are precl"ded from renderin their "s"al o1ertime )or2 from /%<<
p.m. to ,%<< p.m.
Issu&%
)hether petitioner 1iolated the non(dimin"tion pro1ision contained in Art. 1<< of the 4abor Code
H&'(%
3o. Respondent, as employer, cites the chane in the proram of horse races as reason for the adE"stment of the employees: )or2
sched"le. $t rationaliCes that )hen the C!A )as sined, the horse races started at 1<%<< a.m. 6hen the races )ere mo1ed to 2%<< p.m.,
there )as no other choice for manaement b"t to chane the employees: )or2 sched"le as there )as no )or2 to be done in the mornin.
E1idently, the adE"stment in the )or2 sched"le of the employees is E"stified.
6hile it is tr"e that 5ection 1, Article $D of the C!A pro1ides for a 7(ho"r )or2 sched"le from ,%<< a.m. to 12%<< noon and from 1%<< p.m. to
/%<< p.m. from Mondays to 5at"rdays, 5ection 2, Article Q$, ho)e1er, e@pressly reser1es on respondent the preroati1e to chane e@istin
methods or facilities to chane the sched"les of )or2.
;etitioner:s ar"ment, therefore, that the chane in )or2 sched"le 1iolates Article 1<< of the 4abor Code beca"se it res"lted in the
dimin"tion of the benefit enEoyed by re"lar monthly(paid employees of renderin o1ertime )or2 )ith pay, is "ntenable. 5ection 1, Article $D,
of the C!A does not "arantee o1ertime )or2 for all the employees b"t merely pro1ides that 7all )or2 performed in e@cess of se1en &7' ho"rs
)or2 sched"le and on days not incl"ded )ithin the )or2 )ee2 shall be considered o1ertime and paid as s"ch.>
T.& ov&,t)0& -#2 3#s *ot g)v&* to &#$. &0-'o2&& $o*s)st&*t'2, (&')1&,#t&'2 #*( u*$o*()t)o*#''2, 1ut #s # $o0-&*s#t)o* /o,
#(()t)o*#' s&,v)$&s ,&*(&,&(. T.us, ov&,t)0& -#2 (o&s *ot /#'' 3)t.)* t.& (&/)*)t)o* o/ 1&*&/)ts u*(&, A,t)$'& 188 o/ t.& L#1o, Co(&
o* -,o.)1)t)o* #g#)*st &')0)*#t)o* o, ()0)*ut)o* o/ 1&*&/)ts.
DOMINICO C. CONGSON v. NATIONAL LABOR RELATIONS COMMISSION, NOE BARGO, ROGER HIMENO, RAYMUNDO BADAGOS,
ATRICIO SAL6ADOR, SR., NEHIL BARGO, !OEL MENDO;A, #*( EMMANUEL CALIFIHAN
G.R. No. 11+498 A-,)' 9, 1999
"#$ts%
;etitioner is the reistered o)ner of 5o"thern 9ishin $nd"stry. ;ri1ate respondents )ere hired on 1ario"s dates by petitioner as re"lar
piece(rate )or2ers. They )ere "niformly paid at a rate of ;1.<< per t"na )eihin .< to -< 2ilos per mo1ement, that is K from the fishin
boats do)n to petitioner:s storae plant at a load="nload cycle of )or2 "ntil the t"na catch reached its final shipment=destination. They did the
)or2 of "nloadin t"na from fishin boats to tr"c2 ha"lers0 "nloadin them aain at petitioner:s cold storae plant for filin, storin, cleanin,
and maintenance0 and finally loadin the processed t"na for shipment. They )or2ed 7 days a )ee2.
?"rin the first )ee2 of +"ne 1,,<, petitioner notified his )or2ers of his proposal to red"ce the rate(per(t"na mo1ement d"e to the scarcity of
t"na. ;ri1ate respondents resisted petitioner:s proposed rate red"ction. 6hen they reported for )or2 the ne@t day, they )ere informed that
they had been replaced by a ne) set of )or2ers, 6hen they reH"ested for a dialo"e )ith the manaement, they )ere instr"cted to )ait for
f"rther notice. They )aited for the notice of dialo"e for a f"ll )ee2 b"t in 1ain.
;ri1ate respondents filed a case aainst petitioner before the 34RC 5"b(Reional Arbitration !ranch for "nderpayment of )aes &non(
compliance )ith Rep. Act 3os. **4< and *727' and non(payment of o1ertime pay, 1.th month pay, holiday pay, rest day pay, and /(day
ser1ice incenti1e lea1e pay0 and for constr"cti1e dismissal. 6ith respect to their monetary claims, pri1ate respondents chared petitioner )ith
1iolation of the minim"m )ae la), allein that )ith petitioner:s rates and the scarcity of t"na catches, pri1ate respondents: a1erae
monthly earnins each did not e@ceed ;1,<<<.<<.
Issu& K1%
)hether petitioner 1iolated Art. 1<2 of the 4abor Code
H&'( K1%
Bes. ;etitioner:s practice of payin the pri1ate respondents the minim"m )ae by means of leal tender combined )ith t"na li1er and
intestines r"ns co"nter to the abo1e cited pro1ision of the 4abor Code. The fact that said method of payin the minim"m )ae )as not only
areed "pon by both parties in the employment areement b"t e1en e@pressly reH"ested by pri1ate respondents, does not shield petitioner.
Article 1<2 of the 4abor Code is clear. 6aes shall be paid only by means of leal tender. The only instance )hen an employer is permitted
to pay )aes informs other than leal tender, that is, by chec2s or money order, is )hen the circ"mstances prescribed in the second
pararaph of Article 1<2 are present.
1<-
Issu& K4%
)hether the comp"tation rantin pri1ate respondents their salary differentials is correct
H&'( K4%
Bes. $n his s"pplemental motion for reconsideration, petitioner ar"ed, th"s%
7$n the ?ecision rendered, the Arbiter a)arded )ae differential on the premise that complainants monthly a1erae income is only ;1,
<<<.<< as alleed in their position paper. This is erroneo"s. 8ere is )hy%
78erein complainants )ere employed by respondents on a load("nload cycle of ha"lin 7bariles> from the fishin boats to the tr"c2 ha"ler of
the respondents0 then from the tr"c2 ha"ler do)n to the cold storae0 the herein complainants )ere paid ; 1.<< per mo1ement t0 that is, from
the fishin boat to the cold storae, the herein complainants act"ally recei1ed the amo"nt of ;2.<<, 1 peso per mo1ement0 that there are 2
mo1ements from the fishin boat to the cold storae, hence complainants are act"ally recei1in ;2.<< per piece of t"na. The Arbiter m"st
ha1e been on the impression that there is only 1 mo1ement from the fishin boat to the cold storae. This is erroneo"s.
7That finally, )hen the t"na is ready for e@port, the same is to be transferred from the cold storae to the ocean oin 1essel berthed at
respondents )harf at Talisay, #eneral 5antos City, this time herein complainants are paid ;..<< per piece of t"na from the cold storae to
the ocean oin 1essel as sho)n in the here)ith attached Anne@es.
7$n fine, all in all, there are . mo1ements from the time the t"na is "nloaded from the fishin boat to the fish car then to the cold storae0 and,
finally from the cold storae to the 1essel.
7$n addition to the amo"nt of ;1.<< per Abariles: per mo1ement herein complainants et the intestines and li1er of the t"na as part of their
salary. That for e1ery t"na deli1ered, herein complainants e@tract at least . 2ilos of intestines and li1er. That the minim"m pre1ailin price of
t"na intestine and li1er in 1,-* to 1,,< rane from ;1/.<< to ;2<.<<=2ilo. The 1al"e of the t"na intestine and li1er sho"ld be comp"ted in
arri1in at the daily )ae of herein complainants beca"se the 1ery essence of the areement bet)een complainants and respondent is%
complainants shall be paid only ;1.<< per t"na per mo1ement !FT the intestines and li1er of the t"na deli1ered shall o to the herein
complainants. $t sho"ld be noted that t"na intestines and li1er are easily disposed of in any p"blic mar2et. Complainants themsel1es )o"ld
not ha1e areed and )o"ld not ha1e ser1ed respondent that lon period of time if they are only paid ;1.<< per t"na mo1ement. 6hat they
are after, in tr"th and in fact is the t"na intestines and li1er )hich they can easily con1ert into cash.>
;etitioner:s practice of payin the pri1ate respondents the minim"m )ae by means of leal tender combined )ith t"na li1er and intestines
r"ns co"nter to the abo1e cited pro1ision of the 4abor Code. The fact that said method of payin the minim"m )ae )as not only areed
"pon by both parties in the employment areement b"t e1en e@pressly reH"ested by pri1ate respondents, does not shield petitioner. Article
1<2 of the 4abor Code is clear. 6aes shall be paid only by means of leal tender. The only instance )hen an employer is permitted to pay
)aes informs other than leal tender, that is, by chec2s or money order, is )hen the circ"mstances prescribed in the second pararaph of
Article 1<2 are present.
UL AND AER, INC. v. NATIONAL LABOR RELATIONS COMMISSION AND EI"ANIA ANTONIO
G.R. No. 116993 S&-t&01&, 4+, 1995
"#$ts%
A case of illeal dismissal and "nderpayment of )aes )as filed by M5. E;$9A3$A A3TO3$O aainst ;F4; A3? ;A;ER ?$5TR$!FTOR5
$3C. ;ri1ate respondent in her position paper allees that she )as a re"lar employee of the corporation ha1in ser1ed thereat as 6rapper
sometime in 5eptember 1,7/. On 3o1ember 2,, 1,,1, for "n2no)n reasons, she )as ad1ised 1erbally of her termination and )as i1en a
prepared form of R"itclaim and Release )hich she ref"sed to sin. $nstead she bro"ht the present complaint for illeal dismissal.
$n charin petitioner of "nderpayment of )aes, complainant in the same position paper allees that, rarely d"rin her employment )ith the
respondent she recei1ed her salary, a salary )hich )as in accordance )ith the minim"m )ae la). 5he )as not paid o1ertime pay, holiday
pay and fi1e(day ser1ice incenti1e lea1e pay, hence she is claimin for payments thereof by instit"tin the present case.
Issu& K1%
$s a )or2er, )ho )as terminated for lac2 of )or2, entitled to separation pay at the rate of one(month:s pay for e1ery year of ser1iceL
H&'( K1%
1<,
L#27o// is a temporary termination initiated by the employer, b"t )itho"t preE"dice to the reinstatement or recall of the )or2ers )ho ha1e
been temporarily separated. The reasons for layin off employees are 1aried% lac2 of )or2, sh"tdo)n for repairs, b"siness re1erses, and the
li2e. Al)ays, ho)e1er, there is the e@pectation that the employees )ho ha1e been laid off )ill be recalled or rehired. This sit"ation is
o1erned by R"le $, 5ection 12, of !oo2 D$ of the $mplementin R"les and Re"lations of the 4abor Code, )hich pro1ides%
75ec. 12. 5"spension of Relationship. K The employer(employee relationship shall be deemed s"spended in case of s"spension of
operation of the b"siness or "nderta2in of the employer for a period not e@ceedin si@ &*' months. ...>
9rom +"ne 2,, 1,,1 "p to the time the complainant(appellee filed her complaint on +an"ary 21, 1,,2, there )as more than * months that
already elapsed and yet, the appellant failed to recall the appellee to let her res"me )or2in. $f the appellant )as not yet in a possession to
recall or reinstate the appellee after * months, "p to )hen shall appellant let her 2eep in )aitin. Of co"rse, she cannot be allo)ed to )ait
interminably. That is the reason )hy the la) imposes a period of * months )ithin )hich the res"mption of employer(employee relationship
m"st be res"med in temporary lay(offs.
$n the absence of )ae rates based on time and motion st"dies determined by the labor secretary or s"bmitted by the employer to the labor
secretary for his appro1al, )ae rates of piece(rate )or2ers m"st be based on the applicable daily minim"m )ae determined by the
Reional Tripartite 6aes and ;rod"cti1ity Commission. To ens"re the payment of fair and reasonable )ae rates, Article 1<1 of the 4abor
Code pro1ides that 7the 5ecretary of 4abor shall re"late the payment of )aes by res"lts, incl"din pa$yao, piece)or2 and other nontime
)or2.> The same stat"tory pro1ision also states that the )ae rates sho"ld be based, preferably, on time and motion st"dies, or those arri1ed
at in cons"ltation )ith representati1es of )or2ers: and employers: oraniCations. $n the absence of s"ch prescribed )ae rates for piece(rate
)or2ers, the ordinary minim"m )ae rates prescribed by the Reional Tripartite 6aes and ;rod"cti1ity !oards sho"ld apply. This is in
compliance )ith 5ection - of the R"les $mplementin 6ae Order 3os. 3CR(<2 and 3CR(<2(A K the pre1ailin )ae order at the time of
dismissal of pri1ate respondent, 1iC%
75ec. -. <or$ers +aid by Res!lts. K a' All )or2ers paid by res"lts incl"din those )ho are paid on piece )or2, ta2ay, pa2ya), or tas2 basis,
shall recei1e not less than the applicable minim"m )ae rates prescribed "nder the Order for the normal )or2in ho"rs )hich shall not
e@ceed - ho"rs )or2 a day, or a proportion thereof for )or2 of less than the normal )or2in ho"rs.
The adE"sted minim"m )ae rates for )or2ers paid by res"lts shall be comp"ted in accordance )ith the follo)in steps%
1' /mo!nt of increase in /'< ( 0>> Y N increase ;re1io"s AM6
2' E@istin rate=piece @ N increase Y increase in rate=piece0
.' E@istin rate=piece [ increase in rate=piece Y adE"sted rate=piece.
b' The )ae rates of )or2ers )ho are paid by res"lts shall contin"e to be established in accordance )ith Art. 1<1 of the 4abor Code, as
amended and its implementin re"lations.>
On 3o1ember 2,, 1,,1, pri1ate respondent )as orally informed of the termination of her employment. 6ae Order 3o. 3CR(<2, in effect at
the time, set the minim"m daily )ae for non(aric"lt"ral )or2ers li2e pri1ate respondent at ;11-.<<. This )as the rate "sed by the labor
arbiter in comp"tin the separation pay of pri1ate respondent.
Moreo1er, since petitioner employed piece(rate )or2ers, it sho"ld ha1e inH"ired from the secretary of labor abo"t their prescribed specific
)ae rates. $n any e1ent, there bein no s"ch prescribed rates, petitioner, after cons"ltation )ith its )or2ers, sho"ld ha1e s"bmitted for the
labor secretary:s appro1al time and motion st"dies as basis for the )ae rates of its employees. This responsibility of the employer is clear
"nder 5ection -, R"le D$$, !oo2 $$$ of the Omnib"s R"les $mplementin the 4abor Code%
75ec. -. +ayment by res!lt. &a' On petition of any interested party, or "pon its initiati1e, the ?epartment of 4abor shall "se all a1ailable
de1ices, incl"din the "se of time and motion st"dies and cons"ltations )ith representati1es of employers: and )or2ers: oraniCations, to
determine )hether the employees in any ind"stry or enterprise are bein compensated in accordance )ith the minim"m )ae reH"irements
of this R"le.
7&b' The basis for the establishment of rates for piece, o"tp"t or contract )or2 shall be the performance of an ordinary )or2er of minim"m
s2ill or ability.
7&c' An ordinary )or2er of minim"m s2ill or ability is the a1erae )or2er of the lo)est prod"cin ro"p representin /<N of the total n"mber
of employees enaed in similar employment in a partic"lar establishment, e@cl"din learners, apprentices and handicapped )or2ers
employed therein.
11<
7&d' 6here the o"tp"t rates established by the employer do not conform )ith the standards prescribed herein, or )ith the rates prescribed by
the ?epartment of 4abor in an appropriate order, the employees shall be entitled to the difference bet)een the amo"nt to )hich they are
entitled to recei1e "nder s"ch prescribed standards or rates and that act"ally paid them by employer.>
$n the present case, petitioner as the employer "nH"estionably failed to dischare the foreoin responsibility. ;etitioner did not s"bmit to the
secretary of labor a proposed )ae rate K based on time and motion st"dies and reached after cons"ltation )ith the representati1es from
both )or2ers: and employers: oraniCation K )hich )o"ld ha1e applied to its piece(rate )or2ers. 6itho"t those s"bmissions, the labor
arbiter had the d"ty to "se the daily minim"m )ae rate for non(aric"lt"ral )or2ers pre1ailin at the time of pri1ate respondent:s dismissal,
as prescribed by the Reional Tripartite 6aes and ;rod"cti1ity !oards.
$t is clear, therefore, that the applicable minim"m )ae for an eiht(ho"r )or2in day is the basis for the comp"tation of the separation pay of
piece(rate )or2ers li2e pri1ate respondent. Th"s, the labor arbiter correctly "sed the f"ll amo"nt of ;11-.<< per day in comp"tin pri1ate
respondent:s separation pay. The Co"rt arees )ith the follo)in comp"tation%
7Considerin therefore that complainant had been laid(off for more than si@ &*' months no), )e stronly feel that it is already reasonable for
the respondent to pay the complainant her separation pay of one month for e1ery year of ser1ice, a fraction of si@ &*' months to be
considered as one )hole year. 5eparation pay sho"ld be comp"ted based on her minim"m salary as )ill be determined here"nder.
5eparation pay 1 month Y 1* years
;11-.<< @ 2* @ 1* years Y ;4,,<--.<<.
The amo"nt 7;11-.<<> represents the applicable daily minim"m )ae per 6ae Order 3os. 3CR(<2 and 3CR(<2(A0 72*>, the n"mber of
)or2in days in a month after e@cl"din the fo"r 5"ndays )hich are deemed rest days0 71*>, the total n"mber of years spent by pri1ate
respondent in the employ of petitioner.
Issu& K4%
8o) sho"ld the separation pay be comp"tedL
H&'( K4%
;etitioner H"estions not only the basis for comp"tin pri1ate respondent:s monthly )ae0 it also contends that pri1ate respondent:s
separation pay sho"ld not ha1e been comp"ted at one month:s pay for e1ery year of ser1ice. !eca"se pri1ate respondent sho"ld be
considered retrenched, the separation pay sho"ld be 7one month:s pay or at least one=half &1=2' month pay for e1ery year of ser1ice,
)hiche1er is hiher, and not one &1' month:s pay for e1ery year of ser1ice as p"blic respondent had r"led.>
$n this case, p"blic respondent held that pri1ate respondent )as constr"cti1ely dismissed, p"rs"ant to Article 2-* of the 4abor Code )hich
reads%
7Art. 2-*. 6hen employment not deemed terminated. K The bonafide s"spension of the operation of a b"siness or "nderta2in for a period
not e@ceedin si@ &*' months, or the f"lfillment by the employee of a military or ci1ic d"ty shall not terminate employment. $n all s"ch cases,
the employer shall reinstate the employee to his former position )itho"t loss of seniority rihts if he indicates his desire to res"me his )or2
not later that one &1' month from his res"mption of operations of his employer or from his relief from the military or ci1ic d"ty.>
;ri1ate respondent, ho)e1er, neither as2ed for reinstatement nor appealed from the labor arbiter:s findin that she )as not illeally
dismissed0 she merely prayed for the rant of her monetary claims. Th"s, )e s"stain the a)ard of separation pay made by p"blic
respondent, for employees constr"cti1ely dismissed are entitled to separation pay.
9"rthermore, the Co"rt cannot s"stain petitioner:s claim that pri1ate respondent )as retrenched. 9or retrenchment to be considered a
ro"nd for termination, the employer m"st ser1e a )ritten notice on the )or2ers and the ?epartment of 4abor and Employment at least one
month before the intended date thereof. ;etitioner did not comply )ith this reH"irement.
"RAN:LIN BAGUIO AND 19 OTHERS, BONI"ACIO IGOT AND 6 OTHERS, ROY MAGALLANES AND + OTHERS, CLAUDIO BONGO,
EDUARDO ANDALES #*( + OTHERS v. NATIONAL LABOR RELATIONS COMMISSION ?3,( DI6ISIONA, GENERAL MILLING
CORORATION #*(Io, "ELICIANO LUO
G.R. No. 5988+788 O$to1&, +, 1991
"#$ts%
111
;ri1ate respondent 9eliciano 4F;O, a b"ildin contractor, entered into a contract )ith #MC, a domestic corporation enaed in flo"r and
feeds man"fact"rin, for the constr"ction of an anne@ b"ildin inside the latter:s plant in Ceb" City. $n connection )ith the aforesaid contract,
4F;O hired herein petitioners either as carpenters, masons or laborers.
4F;O terminated petitioners: ser1ices, on different dates. As a res"lt, petitioners filed Complaints aainst 4F;O and #MC before the 34RC
Reional Arbitration !ranch for "npaid )aes, CO4A differentials, bon"s and o1ertime pay.
Issu&%
6hat is liability of an employer in Eob contractinL
H&'(%
The Co"rt "pholds the solidary liability of #MC and 4F;O for the latter:s liabilities in fa1or of employees )hom he had earlier employed and
dismissed. Reco1ery, ho)e1er, sho"ld not be based on Article 1<* of the 4abor Code. This pro1ision treats specifically of 7labor(only>
contractin, )hich is not the set("p bet)een #MC and 4F;O. Article 1<* pro1ides%
7Art. 1<*. #ontractor or s!bcontractor. K 6hene1er an employer enters into a contract )ith another person for the performance of the
former:s )or2, the employees of the contractor and of the latter:s s"bcontractor, if any, shall be paid in accordance )ith the pro1isions of this
Code.
7$n the e1ent that the contractor or s"bcontractor fails to pay the )aes of his employees in accordance )ith this Code, the employer shall be
Eointly and se1erally liable )ith his contractor or s"bcontractor to s"ch employees to the e@tent of the )or2 performed "nder the contract, in
the same manner and e@tent that he is liable to employees directly employed by him.
7There is 7labor(only> contractin )here the person s"pplyin )or2ers to an employer does not ha1e s"bstantial capital or in1estment in the
form of tools, eH"ipment, machineries, )or2 premises, amon others, and the )or2ers recr"ited and placed by s"ch persons are performin
acti1ities )hich are directly related to the principal b"siness of s"ch employer. $n s"ch cases, the person or intermediary shall be considered
merely as an aent of the employer )ho shall be responsible to the )or2ers in the same manner and e@tent as if the latter )ere directly
employed by him.>
A person is deemed to be enaed in P'#1o, o*'2Q $o*t,#$t)*g )here &1' the person s"pplyin )or2ers to an employer does not ha1e
s"bstantial capital or in1estment in the form of tools, eH"ipment, machineries, )or2 premises, amon others0 and &2' the )or2ers recr"ited
and placed by s"ch person are performin acti1ities )hich are directly related to the principal b"siness of s"ch employer.
5ince the constr"ction of an anne@ b"ildin inside the company plant has no relation )hatsoe1er )ith the employer:s b"siness of flo"r and
feeds man"fact"rin, 7labor(only> contractin does not e@ist. Article 1<* is th"s inapplicable.
$nstead, it is 7Eob contractin,> co1ered by Article 1<7, )hich is in1ol1ed, readin%
7Art. 1<7. Indirect Employer. K The pro1isions of the immediately precedin Article shall li2e)ise apply to any person, partnership,
association or corporation )hich, not bein an employer, contracts )ith an independent contractor for the performance of any )or2, tas2, Eob
or proEect.>
There is POo1 $o*t,#$t)*gQ )here &1' the contractor carries on an independent b"siness and "nderta2es the contract )or2 on his o)n
acco"nt "nder his o)n responsibility accordin to his o)n manner and method, free from the control and direction of his employer or
principal in all matters connected )ith the performance of the )or2 e@cept as to the res"lts thereof0 and &2' the contractor has s"bstantial
capital or in1estment in the form of tools, eH"ipment, machineries, )or2 premises, and other materials )hich are necessary in the cond"ct of
his b"siness. $t may be that 4F;O s"bseH"ently ran o"t of capital and )as "nable to satisfy the a)ard to petitioners. That )as an after(the(
fact de1elopment, ho)e1er, and does not detract from his stat"s as an independent contractor.
#MC H"alifies as an 7indirect employer.> $t entered into a contract )ith an independent contractor, 4F;O, for the constr"ction of an anne@
b"ildin, a )or2, tas2, Eob or proEect not directly related to #MC:s b"siness of flo"r and feeds man"fact"rin. !ein an 7indirect employer,>
#MC is solidarily liable )ith 4F;O for any 1iolation of the 4abor Code p"rs"ant to Article 1<, thereof, readin%
7Art. 1<,. Solidary Liability. ? The pro1isions of e@istin la)s to the contrary not)ithstandin, e1ery employer or indirect employer shall be
held responsible )ith a contractor or s"bcontractor for any 1iolation of any pro1ision of this Code. 9or p"rposes of determinin the e@tent of
their ci1il liability "nder this Chapter, they shall be considered as direct employers.>
112
The pro1ision of e@istin la) referred to is Article 172- of the Ci1il Code, )hich states, amon others, that 7the contractor is liable for all the
claims of laborers and others employed by him ...>
The distinction bet)een Articles 1<* and 1<7 )as in the fact that Article 1<* deals )ith 7labor(only> contractin. 8ere, by operation of la), the
contractor is merely considered as an aent of the employer, )ho is deemed 7responsible to the )or2ers to the same e@tent as if the latter
)ere directly employed by him.> On the other hand, Article 1<7 deals )ith @-ob contracting.% $n the latter sit"ation, )hile the contractor himself
is the direct employer of the employees, the employer is deemed, by operation of la), as an indirect employer.
A findin that a contractor is a 7labor(only> contractor is eH"i1alent to declarin that there is an employer(employee relationship bet)een the
o)ner of the proEect and the employees of the 7labor(only> contractor. This is e1idently beca"se, as heretofore stated, the 7labor(only>
contractor is considered as a mere aent of an employer. $n contrast, in 7Eob contractin,> no employer(employee relationship e@ists bet)een
the o)ner and the employees of his contractor. The o)ner of the proEect is not the direct employer b"t merely an indirect employer, by
operation of la), of his contractor:s employees. This is beca"se the 7labor(only> contractor is considered as a mere aent of an employer. $n
contrast, in 7Eob contractin,> no employer(employee relationship e@ists bet)een the o)ner and the employees of his contractor. The o)ner
of the proEect is not the direct employer b"t merely an indirect employer, by operation of la), of his contractor:s employees.
As an indirect employer, and for p"rposes of determinin the e@tent of its ci1il liability, #MC is deemed a 7direct employee> of his contractor:s
employees p"rs"ant to the last sentence of Article 1<, of the 4abor Code. As a conseH"ence, #MC can not escape its Eoint and solidary
liability to petitioners.
9"rther, Article 1<- of the 4abor Code reH"ires the postin of a bond to ans)er for )aes that a contractor fails to pay, th"s%
7Article 1<-. +osting of 8ond. K An employer or indirect employer may reH"ire the contractor or s"bcontractor to f"rnish a bond eH"al to the
cost of labor "nder contract, on condition that the bond )ill ans)er for the )aes d"e the employees sho)ed the contractor or s"bcontractor,
as the case may be, fails to pay the same.>
8a1in failed to reH"ire 4F;O to post s"ch a bond, #MC m"st ans)er for )hate1er liabilities 4F;O may ha1e inc"rred to his employees.
This is )itho"t preE"dice to its see2in reimb"rsement from 4F;O for )hate1er amo"nt it )ill ha1e to pay petitioners.
"ILIINAS SYNTHETIC "IBER CORORATION ?"ILSYNA v. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
6OLTAIRE A. BALITAAN, "ELIE LOTERTE #*( DE LIMA TRADING < GENERAL SER6ICES
G.R. No. 1133+5 !u*& 1+, 1996
"#$ts%
9$45B3, a domestic corporation enaed in the man"fact"re of polyester fiber, contracted )ith ?e 4ima Tradin and #eneral 5er1ices &?E
4$MA' for the performance of specific Eanitorial ser1ices at the former:s plant in !ry. ?on +ose, 5ta. Rosa, 4a"na. ;"rs"ant to the
areement 9elipe 4oterte, amon others, )as deployed at 9$45B3 to ta2e care of the plants and maintain eneral cleanliness aro"nd the
premises.
4oterte s"ed 9$45B3 and ?E 4$MA as alternati1e defendants for illeal dismissal, "nderpayment of )aes, non(payment of leal holiday pay,
ser1ice incenti1e lea1e pay and 1.th month pay allein that he )as first assined to perform Eanitorial )or2 at 9$45B3 in 1,-1 by the 4a
5aa #eneral 5er1ices0 that the 4a 5aa )as chaned to ?E 4$MA on A""st 1,,10 that )hen a mo1ement to demand increased )aes and
1.th month pay arose amon the )or2ers on ?ecember 1,,1 he )as acc"sed by a certain ?odie 4a 9lores of ha1in posted in the b"lletin
board at 9$45B3 an article attrib"tin to manaement a secret "nderstandin to bloc2 the demand0 and, for denyin responsibility, his ate
pass )as "nceremonio"sly cancelled on * 9ebr"ary 1,,2 and he )as s"bseH"ently dismissed.
Issu&%
)hether there e@ists an employer(employee relationship bet)een 9$45B3 and pri1ate respondent 9elipe 4oterte
8eld%
Bes. There is s"fficient e1idence to sho) that pri1ate respondent ?E 4$MA is an )*(&-&*(&*t Oo1 $o*t,#$to,, not a mere labor(only
contractor. Fnder the 4abor Code, 2 elements m"st e@ist for a findin of labor(only contractin% &a' the person s"pplyin )or2ers to an
employer does not ha1e s"bstantial capital or in1estment in the form of tools, eH"ipment, machineries, )or2 premises, amon others, and &b'
the )or2ers recr"ited and placed by s"ch persons are performin acti1ities directly related to the principal b"siness of s"ch employer.
These 2 elements do not e@ist in the instant case. As pointed o"t by petitioner, pri1ate respondent ?E 4$MA is a oin concern d"ly
reistered )ith the 5ec"rities and E@chane Commission )ith s"bstantial capitaliCation of ;1,*<<,<<<.<<, ;4<<,<<<.<< of )hich is act"ally
11.
s"bscribed. 8ence, it cannot be considered as enaed in labor(only contractin bein a hihly capitaliCed 1ent"re. Moreo1er, )hile the
Eanitorial ser1ices performed by 9elipe 4oterte p"rs"ant to the areement bet)een 9$45B3 and ?E 4$MA may be considered directly related
to the principal b"siness of 9$45B3 )hich is the man"fact"re of polyester fiber, ne1ertheless, they are not necessary in its operation. On the
contrary, they are merely incidental thereto, as opposed to bein interal, )itho"t )hich prod"ction and company sales )ill not s"ffer.
+"dicial notice has already been ta2en of the eneral practice in pri1ate as )ell as in o1ernment instit"tions and ind"stries of hirin Eanitorial
ser1ices on an independent contractor basis. ConseH"ently, ?E 4$MA bein an independent Eob contractor, no direct employer(employee
relationship e@ists bet)een petitioner 9$45B3 and pri1ate respondent 9elipe 4oterte.
6ith respect to its liability, ho)e1er, petitioner cannot totally e@c"lpate itself from the fact that respondent ?E 4$MA is an independent Eob
contractor. 6e aree )ith the 5olicitor #eneral that not)ithstandin the lac2 of a direct employer(employee relationship bet)een 9$45B3
and 9elipe 4oterte, the former is still Eointly and se1erally liable )ith respondent ?E 4$MA for 4oterte:s monetary claims "nder Art. 1<, of the
4abor Code )hich e@plicitly pro1ides G
7The pro1isions of e@istin la)s to the contrary not)ithstandin, e1ery employer or indirect employer shall be held responsible )ith his
contractor or s"bcontractor for any 1iolation of any pro1ision of this Code. 9or p"rposes of determinin the e@tent of their ci1il liability "nder
this Chapter, they shall be considered as direct employers>
!OSE Y. SON;A v. ABS7CBN BROADCASTING CORORATION
G.R. No. 138891 !u*& 18, 488+
"#$ts%
Respondent A!5(C!3 !roadcastin Corporation &7A!5(C!3>' sined an Areement &7Areement>' )ith the Mel and +ay Manaement and
?e1elopment Corporation &7M+M?C>'. A!5(C!3 )as represented by its corporate officers )hile M+M?C )as represented by 5O3UA, as
;resident and #eneral Manaer, and Carmela Tianco &7T$A3#CO>', as ED; and Treas"rer. The Areement listed the ser1ices 5O3UA
)o"ld render to A!5(C!3, as follo)s%
a. Co(host for Mel O +ay radio proram, -%<< to 1<%<< a.m., Mondays to 9ridays0
b. Co(host for Mel O +ay tele1ision proram, /%.< to 7%<< p.m., 5"ndays.
A!5(C!3 areed to pay for 5O3UA:s ser1ices a monthly talent fee of ;.1<,<<< for the first year and ;.17,<<< for the second and third year
of the Areement. A!5(C!3 )o"ld pay the talent fees on the 1<th and 2/th days of the month.
5O3UA filed a complaint aainst A!5(C!3 before the ?epartment of 4abor and Employment, 3ational Capital Reion in R"eCon City.
5O3UA complained that A!5(C!3 did not pay his salaries, separation pay, ser1ice incenti1e lea1e pay, 1.th month pay, sinin bon"s,
tra1el allo)ance and amo"nts d"e "nder the Employees 5toc2 Option ;lan &7E5O;>'.
A!5(C!3 filed a Motion to ?ismiss on the ro"nd that no employer(employee relationship e@isted bet)een the parties.
Mean)hile, A!5(C!3 contin"ed to remit 5O3UA:s monthly talent fees thro"h his acco"nt at ;C$ !an2.
Issu&%
)hether an employer(employee relationship e@isted bet)een 5onCa and A!5(C!3
8eld%
3o. 5onCa is an independent contractor.
Case la) has consistently held that the elements of an employer(employee relationship are% &a' the selection and enaement of the
employee0 &b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to control the employee on the means and
methods by )hich the )or2 is accomplished. The last element, the so(called 7$o*t,o' t&st>, is the most important element.
A!5(C!3 enaed 5O3UA:s ser1ices to co(host its tele1ision and radio prorams beca"se of 5O3UA:s pec"liar s2ills, talent and celebrity
stat"s. 5O3UA contends that the 7discretion "sed by respondent in specifically selectin and hirin complainant o1er other broadcasters of
possibly similar e@perience and H"alification as complainant belies respondent:s claim of independent contractorship.>
$ndependent contractors often present themsel1es to possess "niH"e s2ills, e@pertise or talent to distin"ish them from ordinary employees.
The specific selection and hirin of 5O3UA, 'ecause of his uni.ue skills, talent and cele'rity status not possessed 'y ordinary
employees, is a circ"mstance indicati1e, b"t not concl"si1e, of an independent contract"al relationship. $f 5O3UA did not possess s"ch
114
"niH"e s2ills, talent and celebrity stat"s, A!5(C!3 )o"ld not ha1e entered into the Areement )ith 5O3UA b"t )o"ld ha1e hired him
thro"h its personnel department E"st li2e any other employee.
A!5(C!3 directly paid 5O3UA his monthly talent fees )ith no part of his fees oin to M+M?C. 5O3UA asserts that this mode of fee
payment sho)s that he )as an employee of A!5(C!3. 5O3UA also points o"t that A!5(C!3 ranted him benefits and pri1ilees 7)hich he
)o"ld not ha1e enEoyed if he )ere tr"ly the s"bEect of a 1alid Eob contract.>
All the talent fees and benefits paid to 5O3UA )ere the res"lt of neotiations that led to the Areement. $f 5O3UA )ere A!5(C!3:s
employee, there )o"ld be no need for the parties to stip"late on benefits s"ch as 7555, Medicare, @ @ @ and 1.th month pay> )hich the la)
a"tomatically incorporates into e1ery employer(employee contract. 6hate1er benefits 5O3UA enEoyed arose from contract and not beca"se
of an employer(employee relationship.
5O3UA:s talent fees, amo"ntin to ;.17,<<< monthly in the second and third year, are so h"e and o"t of the ordinary that they indicate
more an independent contract"al relationship rather than an employer(employee relationship. A!5(C!3 areed to pay 5O3UA s"ch h"e
talent fees precisely beca"se of 5O3UA:s "niH"e s2ills, talent and celebrity stat"s not possessed by ordinary employees. Ob1io"sly, 5O3UA
actin alone possessed eno"h barainin po)er to demand and recei1e s"ch h"e talent fees for his ser1ices. The po)er to barain talent
fees )ay abo1e the salary scales of ordinary employees is a circ"mstance indicati1e, b"t not concl"si1e, of an independent contract"al
relationship.
9or 1iolation of any pro1ision of the Areement, either party may terminate their relationship. 5O3UA failed to sho) that A!5(C!3 co"ld
terminate his ser1ices on ro"nds other than breach of contract, s"ch as retrenchment to pre1ent losses as pro1ided "nder labor la)s.
?"rin the life of the Areement, A!5(C!3 areed to pay 5O3UA:s talent fees as lon as 7A#E3T and +ay 5onCa shall faithf"lly and
completely perform each condition of this Areement.> E1en if it s"ffered se1ere b"siness losses, A!5(C!3 co"ld not retrench 5O3UA
beca"se A!5(C!3 remained obliated to pay 5O3UA:s talent fees d"rin the life of the Areement. This circ"mstance indicates an
independent contract"al relationship bet)een 5O3UA and A!5(C!3.
5O3UA admits that e1en after A!5(C!3 ceased broadcastin his prorams, A!5(C!3 still paid him his talent fees. ;lainly, A!5(C!3
adhered to its "nderta2in in the Areement to contin"e payin 5O3UA:s talent fees d"rin the remainin life of the Areement e1en if A!5(
C!3 cancelled 5O3UA:s prorams thro"h no fa"lt of 5O3UA.
5O3UA assails the 4abor Arbiter:s interpretation of his rescission of the Areement as an admission that he is not an employee of A!5(C!3.
The 4abor Arbiter stated that 7if it )ere tr"e that complainant )as really an employee, he )o"ld merely resin, instead.> 5O3UA did act"ally
resin from A!5(C!3 b"t he also, as president of M+M?C, rescinded the Areement. 5O3UA:s letter clearly bears this o"t. 8o)e1er, the
manner by )hich 5O3UA terminated his relationship )ith A!5(C!3 is immaterial. 6hether 5O3UA rescinded the Areement or resined
from )or2 does not determine his stat"s as employee or independent contractor.
Applyin the $o*t,o' t&st to the present case, the Co"rt finds that 5O3UA is not an employee b"t an independent contractor. The control test
is the most important test o"r co"rts apply in distin"ishin an employee from an independent contractor. This test is based on the e@tent of
control the hirer e@ercises o1er a )or2er. The reater the s"per1ision and control the hirer e@ercises, the more li2ely the )or2er is deemed
an employee. The con1erse holds tr"e as )ell G the less control the hirer e@ercises, the more li2ely the )or2er is considered an independent
contractor.
5O3UA contends that A!5(C!3 e@ercised control o1er the means and methods of his )or2.
5O3UA:s ar"ment is misplaced. A!5(C!3 enaed 5O3UA:s ser1ices specifically to co(host the 7Mel O +ay> prorams. A!5(C!3 did not
assin any other )or2 to 5O3UA. To perform his )or2, 5O3UA only needed his s2ills and talent. 8o) 5O3UA deli1ered his lines, appeared
on tele1ision, and so"nded on radio )ere o"tside A!5(C!3:s control. 5O3UA did not ha1e to render eiht ho"rs of )or2 per day. The
Areement reH"ired 5O3UA to attend only rehearsals and tapins of the sho)s, as )ell as pre( and post(prod"ction staff meetins. A!5(
C!3 co"ld not dictate the contents of 5O3UA:s script. 8o)e1er, the Areement prohibited 5O3UA from criticiCin in his sho)s A!5(C!3 or
its interests. The clear implication is that 5O3UA had a free hand on )hat to say or disc"ss in his sho)s pro1ided he did not attac2 A!5(C!3
or its interests.
A!5(C!3 did not instr"ct 5O3UA ho) to perform his Eob. A!5(C!3 merely reser1ed the riht to modify the proram format and airtime
sched"le 7for more effecti1e prorammin.> A!5(C!3:s sole concern )as the H"ality of the sho)s and their standin in the ratins. Clearly,
A!5(C!3 did not e@ercise control o1er the means and methods of performance of 5O3UA:s )or2.
11/
5O3UA claims that A!5(C!3:s po)er not to broadcast his sho)s pro1es A!5(C!3:s po)er o1er the means and methods of the
performance of his )or2. Altho"h A!5(C!3 did ha1e the option not to broadcast 5O3UA:s sho), A!5(C!3 )as still obliated to pay
5O3UA:s talent fees. Th"s, e1en if A!5(C!3 )as completely dissatisfied )ith the means and methods of 5O3UA:s performance of his )or2,
or e1en )ith the H"ality or prod"ct of his )or2, A!5(C!3 co"ld not dismiss or e1en discipline 5O3UA. All that A!5(C!3 co"ld do is not to
broadcast 5O3UA:s sho) b"t A!5(C!3 m"st still pay his talent fees in f"ll.
5O3UA f"rther contends that A!5(C!3 e@ercised control o1er his )or2 by s"pplyin all eH"ipment and cre). 3o do"bt, A!5(C!3 s"pplied
the eH"ipment, cre) and airtime needed to broadcast the 7Mel O +ay> prorams. 8o)e1er, the eH"ipment, cre) and airtime are not the 7tools
and instr"mentalities> 5O3UA needed to perform his Eob. 6hat 5O3UA principally needed )ere his talent or s2ills and the cost"mes
necessary for his appearance..-E1en tho"h A!5(C!3 pro1ided 5O3UA )ith the place of )or2 and the necessary eH"ipment, 5O3UA )as
still an independent contractor since A!5(C!3 did not s"per1ise and control his )or2. A!5(C!3:s sole concern )as for 5O3UA to display
his talent d"rin the airin of the prorams.
A radio broadcast specialist )ho )or2s "nder minimal s"per1ision is an independent contractor. 5O3UA:s )or2 as tele1ision and radio
proram host reH"ired special s2ills and talent, )hich 5O3UA admittedly possesses. The records do not sho) that A!5(C!3 e@ercised any
s"per1ision and control o1er ho) 5O3UA "tiliCed his s2ills and talent in his sho)s.
5O3UA "res the Co"rt to r"le that he )as A!5(C!3:s employee beca"se A!5(C!3 s"bEected him to its r"les and standards of
performance. 5O3UA claims that this indicates A!5(C!3:s control 7not only Io1erJ his manner of )or2 b"t also the H"ality of his )or2.>
The Areement stip"lates that 5O3UA shall abide )ith the r"les and standards of performance 7 $ov&,)*g t#'&*ts> of A!5(C!3. The
Areement does not reH"ire 5O3UA to comply )ith the r"les and standards of performance prescribed for employees of A!5(C!3. The
code of cond"ct imposed on 5O3UA "nder the Areement refers to the 7Tele1ision and Radio Code of the Papisanan n ma !roadcaster sa
;ilipinas &P!;'.
4astly, 5O3UA insists that the 7e@cl"si1ity cla"se> in the Areement is the most e@treme form of control )hich A!5(C!3 e@ercised o1er him.
This ar"ment is f"tile. !ein an e@cl"si1e talent does not by itself mean that 5O3UA is an employee of A!5(C!3. E1en an independent
contractor can 1alidly pro1ide his ser1ices e@cl"si1ely to the hirin party. $n the broadcast ind"stry, e@cl"si1ity is not necessarily the same as
control.
The hirin of e@cl"si1e talents is a )idespread and accepted practice in the entertainment ind"stry. This practice is not desined to control
the means and methods of )or2 of the talent, b"t simply to protect the in1estment of the broadcast station. The broadcast station normally
spends s"bstantial amo"nts of money, time and effort 7in b"ildin "p its talents as )ell as the prorams they appear in and th"s e@pects that
said talents remain e@cl"si1e )ith the station for a commens"rate period of time.> 3ormally, a m"ch hiher fee is paid to talents )ho aree to
)or2 e@cl"si1ely for a partic"lar radio or tele1ision station. $n short, the h"e talent fees partially compensates for e@cl"si1ity, as in the
present case.
$n a labor(only contract, there are three parties in1ol1ed% &1' the 7labor(only> contractor0 &2' the employee )ho is ostensibly "nder the employ
of the 7labor(only> contractor0 and &.' the principal )ho is deemed the real employer. Fnder this scheme, t.& P'#1o,7o*'2Q $o*t,#$to, )s t.&
#g&*t o/ t.& -,)*$)-#'. The la) ma2es the principal responsible to the employees of the 7labor(only contractor> as if the principal itself
directly hired or employed the employees. These circ"mstances are not present in this case.
There are essentially only t)o parties in1ol1ed "nder the Areement, namely, 5O3UA and A!5(C!3. M+M?C merely acted as 5O3UA:s
aent. The Areement e@pressly states that M+M?C acted as the 7A#E3T> of 5O3UA. The records do not sho) that M+M?C acted as A!5(
C!3:s aent. M+M?C, )hich stands for Mel and +ay Manaement and ?e1elopment Corporation, is a corporation oraniCed and o)ned by
5O3UA and T$A3#CO. The ;resident and #eneral Manaer of M+M?C is 5O3UA himself. $t is abs"rd to hold that M+M?C, )hich is o)ned,
controlled, headed and manaed by 5O3UA, acted as aent of A!5(C!3 in enterin into the Areement )ith 5O3UA, )ho himself is
represented by M+M?C. That )o"ld ma2e M+M?C the aent of both A!5(C!3 and 5O3UA.
As 5O3UA admits, M+M?C is a manaement company de1oted &N$'us)v&'2 to manain the careers of 5O3UA and his broadcast partner,
T$A3#CO. M+M?C is not enaed in any other b"siness, not e1en Eob contractin. M+M?C does not ha1e any other f"nction apart from
actin as aent of 5O3UA or T$A3#CO to promote their careers in the broadcast and tele1ision ind"stry.
The riht of labor to s&$u,)t2 o/ t&*u,& as "aranteed in the Constit"tion arises only if there is an employer(employee relationship "nder
labor la)s. 3ot e1ery performance of ser1ices for a fee creates an employer(employee relationship.
11*
5O3UA see2s the reco1ery of alleedly "npaid talent fees, 1.th month pay, separation pay, ser1ice incenti1e lea1e, sinin bon"s, tra1el
allo)ance, and amo"nts d"e "nder the Employee 5toc2 Option ;lan. The Co"rt arees )ith the findins of the 4abor Arbiter and the Co"rt of
Appeals that 5O3UA:s claims are #'' 1#s&( o* t.& M#2 199+ Ag,&&0&*t #*( sto$> o-t)o* -'#*, #*( *ot o* t.& L#1o, Co(&. Clearly, the
present case does not call for an application of the 4abor Code pro1isions b"t an interpretation and implementation of the May 1,,4
Areement. $n effect, 5O3UA:s ca"se of action is for breach of contract )hich is intrinsically a ci1il disp"te coniCable by the re"lar co"rts.
"EATI UNI6ERSITY v. HON. !OSE S. BAUTISTA, ,&s)()*g !u(g& o/ t.& Cou,t o/ I*(ust,)#' R&'#t)o*s #*( "EATI UNI6ERSITY
"ACULTY CLUB7A"LU
G.R. No. L741458 D&$&01&, 45, 1966
"#$ts%
The ;resident of the respondent 9eati Fni1ersity 9ac"lty Cl"b &;A94F' )rote a letter to Mrs. Dictoria 4. Araneta, ;resident of petitioner 9eati
Fni1ersity informin her of the oraniCation of the 9ac"lty Cl"b into a reistered labor "nion. The 9ac"lty Cl"b is composed of members )ho
are professors and=or instr"ctors of the Fni1ersity. The ;resident of the 9ac"lty Cl"b sent another letter containin t)enty(si@ demands that
ha1e connection )ith the employment of the members of the 9ac"lty Cl"b by the Fni1ersity, and reH"estin an ans)er )ithin ten days from
receipt thereof. The ;resident of the Fni1ersity ans)ered the t)o letters, reH"estin that she be i1en at least thirty days to st"dy thoro"hly
the different phases of the demands. Mean)hile co"nsel for the Fni1ersity, to )hom the demands )ere referred, )rote a letter to the
;resident of the 9ac"lty Cl"b demandin proof of its maEority stat"s and desination as a barainin representati1e. The parties )ere called
to conferences at the Conciliation ?i1ision of the !"rea" of 4abor b"t efforts to conciliate them failed. On 9ebr"ary 1-, 1,*., the members of
the 9ac"lty Cl"b declared a stri2e and established pic2et lines in the premises of the Fni1ersity, res"ltin in the disr"ption of classes in the
Fni1ersity. ?espite f"rther efforts of the officials from the ?epartment of 4abor to effect a settlement of the differences bet)een the
manaement of the Fni1ersity and the stri2in fac"lty members no satisfactory areement )as arri1ed at.
Issu& K1%
)hether or not professors and=or instr"ctors are independent contractors
H&'( K1%
3o. The Co"rt ta2es E"dicial notice that a "ni1ersity controls the )or2 of the members of its fac"lty0 that a "ni1ersity prescribes the co"rses or
s"bEects that professors teach, and )hen and )here to teach0 that the professors: )or2 is characteriCed by re"larity and contin"ity for a
fi@ed d"ration0 that professors are compensated for their ser1ices by )aes and salaries, rather than by profits0 that the professors and=or
instr"ctors cannot s"bstit"te others to do their )or2 )itho"t the consent of the "ni1ersity0 and that the professors can be laid off if their )or2
is fo"nd not satisfactory. All these indicate that the "ni1ersity has control o1er their )or20 and professors are, therefore, employees and not
independent contractors.
$t ha1in been sho)n that the members of the 9ac"lty Cl"b are employees, it follo)s that they ha1e a riht to "nioniCe in accordance )ith the
pro1isions of 5ection . of the Mana Carta of 4abor &Rep"blic Act 3o. -7/' )hich pro1ides as follo)s%
75ec. .. Employees right to self"organi,ation.KEmployees shall ha1e the riht to self(oraniCation and to form, Eoin or assist labor
oraniCations of their o)n choosin for the p"rpose of collecti1e barainin thro"h representati1es of their o)n choosin and to enae in
concerted acti1ities for the p"rpose of collecti1e barainin and other m"t"al aid or protection. ...>
The riht of employees to self(oraniCation is "aranteed by the Constit"tion, that said riht )o"ld e@ist e1en if Rep"blic Act 3o. -7/ is
repealed, and that reardless of )hether their employers are enaed in commerce or not. The members of the fac"lty or teachin staff of
pri1ate "ni1ersities, collees, and schools in the ;hilippines, reardless of )hether the "ni1ersity, collee or school is r"n for profit or not, are
incl"ded in the term 7employees> as contemplated in Rep"blic Act 3o. -7/ and as s"ch they may oraniCe themsel1es p"rs"ant to the
abo1e(H"oted pro1ision of 5ection . of said Act. Certainly, professors, instr"ctors or teachers of pri1ate ed"cational instit"tions )ho teach to
earn a li1in are entitled to the protection of o"r labor la)s K and one s"ch la) is Rep"blic Act 3o. -7/.
Issu& K4%
)hether the ;residential certification is 1alid
H&'( K4%
Bes. The Fni1ersity contends that "nder 5ection 1< of Rep"blic Act 3o. -7/ the po)er of the ;resident of the ;hilippines to certify is s"bEect
to the follo)in conditions, namely% &1' that here is a labor disp"te, and &2' that said labor disp"te e@ists in an ind"stry that is 1ital to the
national interest. The Fni1ersity maintains that those conditions do not obtain in the instant case. This contention has also no merit.
117
The Fni1ersity is an establishment or enterprise that is incl"ded in the term 7ind"stry> and is co1ered by the pro1isions of Rep"blic Act 3o.
-7/. 3o), )as there a labor disp"te bet)een the Fni1ersity and the 9ac"lty Cl"bL
Rep"blic Act 3o. -7/ defines a labor disp"te as follo)s%
7The term P'#1o, ()s-ut&Q incl"des any contro1ersy concernin terms, ten"re or conditions of employment, or concernin the association or
representation of persons in neotiatin, fi@in, maintainin, chanin, or see2in to arrane terms or conditions of employment reardless
of )hether the disp"tants stand in pro@imate relation of employer and employees.>
The test of )hether a contro1ersy comes )ithin the definition of 7labor disp"te> depends on )hether the contro1ersy in1ol1es or concerns
7terms, ten"re or condition of employment> or 7representation.> $t is admitted by the Fni1ersity, in the instant case, that on +an"ary 14, 1,*.
the ;resident of the 9ac"lty Cl"b )rote to the ;resident of the Fni1ersity a letter informin the latter of the oraniCation of the 9ac"lty Cl"b as
a labor "nion, d"ly reistered )ith the !"rea" of 4abor Relations0 that aain on +an"ary 22, 1,*. another letter )as sent, to )hich )as
attached a list of demands consistin of 2* items, and as2in the ;resident of the Fni1ersity to ans)er )ithin ten days from date of receipt
thereof0 that the Fni1ersity H"estioned the riht of the 9ac"lty Cl"b to be the e@cl"si1e representati1e of the maEority of the employees and
as2ed proof that the 9ac"lty Cl"b had been desinated or selected as e@cl"si1e representati1e by the 1ote of the maEority of said employees0
that on 9ebr"ary 1, 1,*. the 9ac"lty Cl"b filed )ith the !"rea" of 4abor Relations a notice of stri2e allein as reason therefor the ref"sal of
the Fni1ersity to barain collecti1ely )ith the representati1e of the fac"lty members0 that on 9ebr"ary 1-, 1,*. the members of the 9ac"lty
Cl"b )ent on stri2e and established pic2et lines in the premises of the Fni1ersity, thereby disr"ptin the sched"le of classes0 that on March
1, 1,*. the 9ac"lty Cl"b filed Case 3o. .***(F4; for "nfair labor practice aainst the Fni1ersity, b"t )hich )as later dismissed &on April 2,
1,*. after Case 41($;A )as certified to the C$R'0 and that on March 7, 1,*. a petition for certification election, Case 3o. 11-.(MC, )as filed
by the 9ac"lty Cl"b in the C$R. All these admitted facts sho) that the contro1ersy bet)een the Fni1ersity and the 9ac"lty Cl"b in1ol1ed
terms and conditions of employment, and the H"estion of representation. 8ence, there )as a labor disp"te bet)een the Fni1ersity and the
9ac"lty Cl"b, as contemplated by Rep"blic Act 3o. -7/. $t ha1in been sho)n that the Fni1ersity is an instit"tion operated for profit, that is
an employer, and that there is an employer(employee relationship, bet)een the Fni1ersity and the members of the 9ac"lty Cl"b, and it
ha1in been sho)n that a labor disp"te e@isted bet)een the Fni1ersity and the 9ac"lty Cl"b, the contention of the Fni1ersity, that the
certification made by the ;resident is not only not a"thoriCed by 5ection 1< of Rep"blic Act -7/ b"t is 1iolati1e thereof, is ro"ndless.
5ection 1< of Rep"blic Act 3o. -7/ pro1ides%
76hen in the opinion of the ;resident of the ;hilippines there e@ists a labor disp"te in an ind"stry indispensable to the national interest and
)hen s"ch labor disp"te is certified by the ;resident to the Co"rt of $nd"strial Relations, said Co"rt may ca"se to be iss"ed a restrainin
order forbiddin the employees to stri2e or the employer to loc2o"t the employees, and if no other sol"tion to the disp"te is fo"nd, the Co"rt
may iss"e an order fi@in the terms and conditions of employment.>
To certify a labor disp"te to the C$R is the preroati1e of the ;resident "nder the la), and this Co"rt )ill not interfere in, m"ch less c"rtail, the
e@ercise of that preroati1e. The E"risdiction of the C$R in a certified case is e@cl"si1e. Once the E"risdiction is acH"ired p"rs"ant to the
presidential certification, the C$R may e@ercise its broad po)ers as pro1ided in Common)ealth Act 1<.. All phases of the labor disp"te and
the employer(employee relationship may be threshed o"t before the C$R, and the C$R may iss"e s"ch order or orders as may be necessary
to ma2e effecti1e the e@ercise of its E"risdiction. The parties in1ol1ed in the case may appeal to the 5"preme Co"rt from the order or orders
th"s iss"ed by the C$R.
Issu& K3%
)hether the ret"rn(to()or2 order and the order implementin the same is 1alid
H&'( K3%
Bes. The Fni1ersity allees that the orders are illeal "pon the ro"nds% &1' that Rep"blic Act 3o. -7/, s"pplementin Common)ealth Act
3o. 1<., has )ithdra)n from the C$R the po)er to iss"e a ret"rn(to()or2 order0 &2' that the only po)er ranted by 5ection 1< of Rep"blic Act
3o. -7/ to the C$R is to iss"e an order forbiddin the employees to stri2e or forbiddin the employer to loc2o"t the employees, as the case
may be, before either continency had become a fait accompli0 &.' that the ta2in in by the Fni1ersity of replacement professors )as 1alid,
and the ret"rn(to()or2 order of March .<, 1,*. constit"ted impairment of the obliation of contracts0 and &4' the C$R co"ld not iss"e said
order )itho"t ha1in pre1io"sly determined the leality or illeality of the stri2e.
The contention of the Fni1ersity that Rep"blic Act 3o. -7/ has )ithdra)n the po)er of the Co"rt of $nd"strial Relations to iss"e a ret"rn(to(
)or2 order e@ercised by it "nder Common)ealth Act 3o. 1<. can not be s"stained. 6hen a case is certified by the ;resident to the Co"rt of
$nd"strial Relations, the case thereby comes "nder the operation of Common)ealth Act 3o. 1<., and the Co"rt may e@ercise the broad
po)ers and E"risdiction ranted to it by said Act. 5ection 1< of Rep"blic Act 3o. -7/ empo)ers the Co"rt of $nd"strial Relations to iss"e an
order 7fi@in the terms of employment.> This cla"se is broad eno"h to a"thoriCe the Co"rt to order the stri2ers to ret"rn to )or2 and the
employer to readmit them.
11-
6hen a case is certified to the C$R by the ;resident of the ;hilippines p"rs"ant to 5ection 1< of Rep"blic Act 3o. -7/, the C$R is ranted
a"thority to find a sol"tion to the ind"strial disp"te0 and the sol"tion )hich the C$R has fo"nd "nder the a"thority of the presidential
certification and conformable thereto cannot be H"estioned.
Fntenable also is the claim of the Fni1ersity that the C$R cannot iss"e a ret"rn(to()or2 order after stri2e has been declared, it bein
contended that "nder 5ection 1< of Rep"blic Act 3o. -7/ the C$R can only pre1ent a stri2e or a loc2o"t K )hen either of this sit"ation had
not yet occ"rred.
There is no reason or ro"nd for the contention that ;residential certification of labor disp"te to the C$R is limited to the pre1ention of stri2es
and loc2o"ts. E1en after a stri2e has been declared )here the ;resident belie1es that p"blic interest demands arbitration and conciliation,
the ;resident may certify the ease for that p"rpose. The practice has been for the Co"rt of $nd"strial Relations to order the stri2ers to )or2,
pending the determination of the !nion demands that impelled the stri$e. There is nothin in the la) to indicate that this practice is
abolished.>
4i2e)ise "ntenable is the contention of the Fni1ersity that the ta2in in by it of replacements )as 1alid and the ret"rn(to()or2 order )o"ld be
an impairment of its contract )ith the replacements. As stated by the C$R in its order of March .<, 1,*., it )as areed before the hearin of
Case 41($;A on March 2., 1,*. that the stri2ers )o"ld ret"rn to )or2 "nder the stat!s &!o arranement and the Fni1ersity )o"ld readmit
them, and the ret"rn(to()or2 order )as a confirmation of that areement. This is a declaration of fact by the C$R )hich )e cannot disreard.
The fac"lty members, by stri2in, ha1e not abandoned their employment b"t, rather, they ha1e only ceased from their labor. The stri2in
fac"lty members ha1e not lost their riht to o bac2 to their positions, beca"se the declaration of a stri2e is not a ren"nciation of their
employment and their employee relationship )ith the Fni1ersity. The employment of replacements )as not a"thoriCed by the C$R. The
employment of replacements by the Fni1ersity prior to the iss"ance of the order of March .<, 1,*. did not 1est in the replacements a
permanent riht to the positions they held. 3either co"ld s"ch temporary employment bind the Fni1ersity to retain permanently the
replacements.
The ret"rn(to()or2 order cannot be considered as an impairment of the contract entered into by petitioner )ith the replacements.
The Fni1ersity also maintains that there )as no more basis for the claim of the members of the 9ac"lty Cl"b to ret"rn to their )or2, as their
indi1id"al contracts for teachin had e@pired on March 2/ or .1, 1,*., as the case may be, and conseH"ently, there )as also no basis for
the ret"rn(to()or2 order of the C$R beca"se the contract"al relationships ha1in ceased there )ere no positions to )hich the members of the
9ac"lty Cl"b co"ld ret"rn to. This contention is not )ell ta2en. This ar"ment loses siht of the fact that )hen the professors and instr"ctors
str"c2 on 9ebr"ary 1-, 1,*., they contin"ed to be employees of the Fni1ersity for the p"rposes of the labor contro1ersy not)ithstandin the
s"bseH"ent termination of their teachin contracts, for 5ection 2&d' of the $nd"strial ;eace Act incl"des amon employees 7any indi1id"al
)hose )or2 has ceased a conseH"ence of, or in connection )ith, any c"rrent labor disp"te or of any "nfair labor practice and )ho has not
obtained any other s"bstantially eH"i1alent and re"lar employment.>
HILIINE AIRLINES, INC. v. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER CORNELIO LINSANGAN,
UNICORN SECURITY SER6ICES, INC., #*( "RED BAUTISTA, &t #'.
G.R. No. 148986 O$to1&, 48, 1996
"#$ts%
;ri1ate respondent Fnicorn 5ec"rity 5er1ices, $nc. &F55$' and petitioner ;hilippine Airlines, $nc. &;A4' e@ec"ted a sec"rity ser1ice
areement. F55$ )as desinated therein as the CO3TRACTOR. Amon the pertinent terms and conditions of the areement are as follo)s%
7&4' T8E CO3TRACTOR shall assin to ;A4 an initial force of EI47)A *E B20C bodies . . . )hich may be decreased or increased by
areement in )ritin . . . . $t is, of co"rse, "nderstood that the CO3TRACTOR "nderta2es to pay the )aes or salaries and cost of li1in
allo)ance of the "ards in accordance )ith the pro1isions of the 4abor Code, as amended, the different ;resident ?ecrees, Orders and )ith
the r"les and re"lations prom"lated by competent a"thorities implementin said acts, ass"min all responsibilities therefor.
@ @ @
7&*' 6itho"t any e@pense on the part of ;A4, CO3TRACTOR shall see to it that the "ards assined to ;A4 . . . are pro1ided, at the e@pense
of CO3TRACTOR, )ith the necessary firearms, amm"nitions and facilities needed for the rendition of the sec"rity ser1ices as aforesaid0
7&7' CO3TRACTOR shall select, enae and dischare the "ards, employees, or aents, and shall other)ise direct and control their
ser1ices herein pro1ided or heretofore to be set forth or prescribed. The determination of )aes, salaries and compensation of the "ards or
11,
employees of the CO3TRACTOR shall be )ithin its f"ll control b"t shall in no )ay contra1ene e@istin la)s on the matter. $t is f"rther
"nderstood that CO3TRACTOR as the employer of the sec"rity "ards arees to comply )ith all rele1ant la)s and re"lations, incl"din
comp"lsory co1erae "nder the 5ocial 5ec"rity Act, 4abor Code, as amended and the Medical Care Act, in its operations. Altho"h it is
"nderstood areed bet)een parties hereto that CO3TRACTOR in the performance of its obliations "nder this Areement, is s"bEect to the
control and direction of ;A4 merely as to the res"lt as to be accomplished by the )or2 or ser1ices herein specified, and not as to the means
and methods for accomplishin s"ch res"lt, CO3TRACTOR hereby )arrants that it )ill perform s"ch )or2 or ser1ices in s"ch manner as )ill
achie1e the res"lt herein desired by ;A4.
7&-' ?iscipline and administration of the sec"rity "ards shall be the sole responsibility of the CO3TRACTOR to the end that CO3TRACTOR
shall be able to render the desired sec"rity ser1ice reH"irements of ;A4 CO3TRACTOR, therefore, shall conform to s"ch r"les and
re"lations that may be iss"ed by ;A4. 9or this p"rpose, Anne@ 7A>, )hich forms part of this Areement, contains s"ch r"les and re"lations
and CO3TRACTOR is e@pected to comply )ith them. At its discretion, +/L may, ho)e1er, )or2 o"t )ith CO3TRACTOR s"ch r"les and
re"lations before their implementation.
7&,' 5ho"ld ;A4 at any time ha1e any E"stifiable obEection to the presence in its premises of any of CO3TRACTOR:s officer, "ard or aent
"nder this Areement, it shall send s"ch obEection in )ritin to CO3TRACTOR and the latter shall immediately ta2e proper action.
7&1<' The sec"rity "ards employed by CO3TRACTOR in performin this Areement shall be paid by the CO3TRACTOR and it is distinctly
"nderstood that there is no employee(employer relations bet)een CO3TRACTOR and=or his "ards on the one hand, and ;A4 on the other.
CO3TRACTOR shall ha1e entire chare, control and s"per1ision of the )or2 and ser1ices herein areed "pon, and ;A4 shall in no manner
be ans)erable or acco"ntable for any accident or inE"ry of any 2ind )hich may occ"r to any "ard or "ards of the CO3TRACTOR in the
co"rse of, or as a conseH"ence of, their performance of )or2 and ser1ices "nder this Areement, or for any inE"ry, loss or damae arisin
from the nelience of or carelessness of the "ards of the CO3TRACTOR or of anyone of its employ to any person to persons or to its or
their property )hether in the premises of ;A4 or else)here0 and the CO3TRACTOR hereby co1enants and arees to ass"me, as it does
hereby ass"me, any and all liability or on acco"nt of any s"ch inE"ry, loss or damae, and shall indemnify ;A4 for any liability or e@pense it
may inc"r by reason thereof and to hold ;A4 free and harmless from any s"ch liability.
@ @ @
7&1.' 9or and in consideration of the ser1ices to be rendered by CO3TRACTOR "nder these presents, ;A4 shall pay CO3TRACTOR the
amo"nt of ;E5O5 *I*E 9 =>50>> #)VS B+1.=>C +ER 7:R m!ltiplied by 1>D ho!rs e&!ivalent to +ESS )< 7:*DRED SEVE*)A
.IVE )7:S/*D *I*E 7:*DRED *I*E 9 D250>> #)VS, ;hilippine c"rrency, K &;27/,,<,./-' the basis of eiht &-' )or2in ho"rs per
office="ard a day, 5"ndays and holidays incl"ded, the same to be payable on or before the 1/th of each month for ser1ices on the first half
of the month and on or before the end of the month for ser1ices for the 2nd half of the month.
73othin herein contained shall pre1ent the parties from meetin for a re1ie) of the rates sho"ld circ"mstances )arrant.
@ @ @
7&2<' This Areement shall ta2e effect on >E December 0123 and shall be in force for a period of SIF BEC '*)7S ? >D G:*E 0122
thereafter it shall contin"e indefinitely "nless sooner terminated "pon thirty &.<' days notice ser1ed "pon by one party to the other, e@cept as
pro1ided for in Articles 1*, 17 O 1- hereof.>
5ometime in A""st of 1,--, ;A4 reH"ested 1* additional sec"rity "ards. F55$ pro1ided )hat )as reH"ested0 ho)e1er, ;A4 insisted that
)hat F55$ did )as merely to pic2 o"t 1* "ards from the -* already assined by it and directed them to render o1ertime d"ty.
On 1* 9ebr"ary 1,,<, ;A4 terminated the sec"rity ser1ice areement )ith F55$ )itho"t i1in the latter the .<(day prior notice reH"ired in
pararaph 2< thereof. $nstead, ;A4 paid each of the sec"rity "ards act"ally assined at the time of the termination of the areement an
amo"nt eH"i1alent to their one(month salary to compensate for the lac2 of notice.
F55$ filed )ith the 34RC Arbitration !ranch a complaint 4 aainst ;A4 for the reco1ery of ;7/,*<<.<< representin termination pay benefit
d"e the alleed 1* additional sec"rity "ards, )hich ;A4 failed and ref"sed to pay despite demands. $t f"rther as2ed for an a)ard of not less
than ;1/,<<<.<< for each of the 1* "ards as damaes for the delay in the performance of ;A4:s obliation, and also for attorney:s fees in an
amo"nt eH"i1alent to 1<N of )hate1er miht be reco1ered.
Issu&%
)hether employer(employee relationship e@isted bet)een ;A4 and the sec"rity "ards pro1ided by F55$ "nder the sec"rity ser1ice
areement
12<
H&'(%
3o. $n determinin the e@istence of an employer(employee relationship, the follo)in elements are enerally considered% &1' the selection
and enaement of the employee0 &2' the payment of )aes0 &.' the po)er to dismiss0 and &4' the po)er to control the employee:s cond"ct.
$t )as F55$ )hich &a' selected, enaed or hired and dischared the sec"rity "ards0 &b' assined them to ;A4 accordin to the n"mber
areed "pon0 &c' pro1ided, at its o)n e@pense, the sec"rity "ards )ith firearms and amm"nitions0 &d' disciplined and s"per1ised them or
controlled their cond"ct0 and &e' determined their )aes, salaries, and compensation0 and &f' paid them salaries or )aes. E1en if )e
disreard the e@plicit co1enant in said areement that 7there e@ists no employer(employee relationship bet)een CO3TRACTOR and=or his
"ards on the one hand, and ;A4 on the other> all other considerations confirm the fact that ;A4 )as not the sec"rity "ards: employer.
Considerin then that no employer(employee relationship e@isted bet)een ;A4 and the sec"rity "ards, the 4abor Arbiter had no E"risdiction
o1er the claim. Article 217 of the 4abor Code &;.?. 3o. 442', as amended, 1ests "pon 4abor Arbiters e@cl"si1e oriinal E"risdiction only o1er
the follo)in%
1. Fnfair labor practice cases0
2. Termination disp"tes0
.. $f accompanied )ith a claim for reinstatement, those cases that )or2ers may file in1ol1in )aes, rates of pay, ho"rs of )or2 and
other terms and conditions of employment0
4. Claims for act"al, moral, e@emplary and other forms of damaes arisin from employer(employee relations0
/. Cases arisin from any 1iolation of Article 2*/ of this Code, incl"din H"estions in1ol1in leality of stri2es and loc2o"ts0 and
*. E@cept claims for Employees Compensation, 5ocial 5ec"rity, Medicare and maternity benefits, all other claims, arisin from
employer(employee relations, incl"din those of persons in domestic or ho"sehold ser1ice, in1ol1in an amo"nt e@ceedin fi1e
tho"sand pesos &;/,<<<.<<' reardless of )hether accompanied )ith a claim for reinstatement.
$n all these cases, an employer(employee relationship is an indispensable E"risdictional reH"isite.
The 4abor Arbiter cannot a1oid the E"risdictional iss"e or E"stify his ass"mption of E"risdiction on the prete@t that ;A4 )as the indirect
employer of the sec"rity "ards "nder Article 1<7 in relation to Articles 1<* and 1<, of the 4abor Code and, therefore, it is solidarily liable
)ith F55$. these Articles are inapplicable to ;A4 "nder the facts of this case. Article 1<7 pro1ides%
7Art. 1<7. Indirect employer. K The pro1isions of the immediately precedin Article shall li2e)ise apply to any person, partnership,
or proEect.>
The precedin Article referred to, )hich is Article 1<*, partly reads as follo)s%
7Art. 1<*. #ontractor or s!bcontractor. K 6hene1er an employer enters into a contract )ith another person for the performance of the
former:s )or2, the employees of the contractor and of the latter:s s"bcontractor, if any, shall be paid in accordance )ith the pro1isions of this
Code.
7$n the e1ent that the contractor or s"bcontractor fails to pay the wages of his employees in accordance )ith this Code, the employer shall be
the same manner and e@tent that he is liable to employees directly employed by him.:
6hile F55$ is an independent contractor "nder the sec"rity ser1ice areement and ;A4 may be considered an indirect employer, that stat"s
did not ma2e ;A4 the employer to the sec"rity "ards in e1ery respect. ;A4 may be considered an indirect employer only for p"rposes of
"npaid )aes since Article 1<*, )hich is applicable to the sit"ation contemplated in 5ection 1<7, spea2s of wages. The concept of indirect
employer only relates or refers to the liability for !npaid wages. Read toether, Articles 1<* and 1<, simply mean that the party )ith )hom an
independent contractor deals is solidarily liable )ith the latter for "npaid )aes, and only to that e@tent and for that p"rpose that the latter is
considered a direct employer.
3o 1alid claim for )aes or separation pay can arise from the sec"rity ser1ice areement in H"estion by reason of its termination at the
instance of ;A4. The areement contains no pro1ision for separation pay. A breach thereof co"ld only i1e rise to damaes "nder the Ci1il
Code, )hich is coniCable by the appropriate re"lar co"rt of E"stice. !esides, there is no s"bstantial proof that F55$ in fact pro1ided 1*
additional "ards. On the contrary, ;A4 )as able to pro1e in the anne@es attached to its s"pplemental motion to dismiss that the 1* "ards
)ere act"ally pic2ed o"t from the oriinal ro"p and )ere E"st reH"ired to render o1ertime ser1ice.
121
ASSOCIATED ANGLO7AMERICAN TOBACCO CORORATION v. HON. !ACOBO C. CLA6E, )* .)s $#-#$)t2 #s ,&s)(&*t)#' EN&$ut)v&
Ass)st#*t, ASSOCIATED "EDERATION O" LABOR ?A"LA #*( )ts 0&01&,s, *#0&'2 AMADOR GUARINO, 6ICENTE MARGUE;,
AL"REDO ENRIGUE; #*( NICASIO SAN !UAN
G.R. No. 98919 August 38, 1998
"#$ts%
;etitioner corporation entered into separate b"t $dentical contracts of promotional dealership )ith Epifanio Cabillan, 5ofronio ;erdion and
6alfrido Al1ereC for the p"rpose of
of ciarettes and defrayed all e@penses for repairs thereof, f"el and toll payments. There )as, f"rthermore, no e1idence add"ced by
petitioner corporation to sho) that the dealers had s"bstantial capital in1estment in sellin petitioner:s ciarettes or that they carried on their
o)n b"siness operations separate and distinct from that enaed in by petitioner corporation. The )or2 carried o"t by the dealers and the
latter:s dri1ers )as performed d"rin re"lar )or2in ho"rs si@ &*' days a )ee2, )hich circ"mstance made it impossible for them to carry on
any additional and independent b"siness o"tside the premises of petitioner. Clearly, the promotional dealers )ere only enaed in 7labor(
only sellin the ciarettes man"fact"red by petitioner.
These dealers hired pri1ate respondents as dri1ers or helpers b"t s"bseH"ently dismissed them. Respondent #"arino )as for 4 months by
dealer Epifanio Cabillan0 respondent Dicente MarH"eC )as employed for . months by dealer 5ofronio ;erdion0 respondent Alfredo EnriH"eC
)as for / and respondent 3icasio 5an +"an for 1 1=2 months by dealer 6alfrido Al1ereC.
The 3ational ;resident of respondent Associated 9ederation of 4abor &A94', for and in behalf of respondents filed a complaint )ith the 4abor
Arbiter aainst petitioner corporation and its promotional dealers, for "nfair labor practice in dismissin respondent employees and for
1iolation of ;.?. 3o. 21, the Minim"m 6ae 4a) and the Eiht 8o"r 4abor 4a).
Issu&%
)hether or not pri1ate respondents, )ho )ere hired by the promotional dealers of the corporation, sho"ld be considered as employees of the
corporation itself
H&'(%
Bes. The fo"r(fold test to determine the e@istence of an employer(employee relationship are% 1' the selection and enaement of the
employee0 2' the payment of )aes0 .' the po)er of dismissal0 and 4' the po)er to control the employee:s cond"ct.
The dealers and pri1ate respondents )ere reH"ired not only to 2eep re"lar )or2in ho"rs b"t to abide by petitioner:s re"lations and
policies as )ell. $n other )ords, these dealers and the latter:s )or2ers )ere "nder the direct control and s"per1ision of petitioner corporation
from the 1ery moment they entered the )or2 premises at the beinnin of the )or2in day "ntil closin time.
The contracts of dealership e@pressly directed the dealers to hire cha"ffe"rs and=or helpers. ;etitioner s"pplied the necessary 1ehicles for
the sellin contractin.
A findin that a contractor )as a 7labor(only> contractor is eH"i1alent to a findin that an employer(employee relationship e@isted bet)een the
o)ner and the 7labor(only> contractor incl"din the latter:s )or2ers, that relationship bein attrib"ted by the la) itself. &see 5ection - and , of
R"le D$$$, !oo2 $$ of the Omnib"s R"les $mplementin the 4abor Code'
INDUSTRIAL TIMBER CORORATION #*( LOREN;O TANGSOC v. NATIONAL LABOR RELATIONS COMMISSION, CONCORDIA
DOS UEBLOS #*( LOLITA SANCHE;
G.R. No. 83616 !#*u#,2 48, 1989
"#$ts%
A )ritten contract )as entered into by and bet)een petitioner $nd"strial Timber Corporation &$TC' and Enineer ACarias ?. ?osdos )ho
represented A?? Technical and 4abor 5er1ice Cons"ltancy. $n said areement, A?? Technical and 4abor 5er1ice Cons"ltancy, )hich )as
enaed in technical as )ell as labor ser1ices, assented to r"n and man the ply)ood plant of petitioner $TC in A"san ;eH"eno, !"t"an City
for a period of one year, from +"ly .1, 1,-/.
A""st, 1,-/, pri1ate respondent Concordia ?os ;"eblos and 4olita 5ancheC )ere employed as Acco"ntin= ;ayroll Cler2 and
555=Medicare Cler2(Cashier, respecti1ely, by petitioner.
122
On April 2<, 1,-*, the )or2ers and employees of $TC staed a stri2e. The stri2e )as amicably settled on April 2*, 1,-* by 1irt"e of a
Memorand"m of Areement entered into bet)een 4orenCo Tansoc, as o)ner and operator of petitioner $TC and of both 5tanply ;lant and
the !"t"an 4os, $nc. ;lant, and the stri2in )or2ers=employees of 5tanply and !"t"an 4os, $nc., )herein the pri1ate respondents )ere
amon those employed by 5tanply.
;"rs"ant to the aforementioned Memorand"m of Areement, petitioners admitted almost all of the stri2in )or2ers, bac2 to )or2, e@cept
pri1ate respondents. 8ence, pri1ate respondents )ere forced to plead for their reinstatement. 8o)e1er, the same pro1ed f"tile e1en after the
lapse of 7 months of )aitin and incessant follo)("ps.
;ri1ate respondents filed )ith the Arbitration !ranch of the 3ational 4abor Relations Commission &34RC' a complaint for illeal dismiss and
reinstatement )ith bac2)aes aainst petitioner $TC.
Issu&%
)hether or not pri1ate respondents )ere employees of petitioners
H&'(%
Bes. 5ection ,, R"le D$$$, !oo2 $$$ of the Omnib"s R"les. $mplementin the 4abor Code in the follo)in terms%
75ec. ,. Labor"only contracting. K &a' Any person )ho "nderta2es to s"pply )or2ers to an employer shall be deemed to be enaed in
labor(only contractin )here s"ch person%
7&1' ?oes not ha1e s"bstantial capital or in1estment in the form of tools, eH"ipment, machineries, )or2 premises and other materials0 and
7&2' The )or2ers recr"ited and placed by s"ch person are performin acti1ities )hich are directly related to the principal b"siness or
operations of the employer in )hich )or2ers are habit"ally employed.
7&b' 4abor(only contractin as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an
agent or intermediary of the employer )ho shall be responsible to the )or2er in the same manner and e@tent as if the latter )ere directly
employed by him.>
The labor(only: contractor i.e., Athe person or intermediary is considered Amerely as an aent of the employer.: The employer is made by the
stat"te responsible to the employees of the labor(only: contractor as if s!ch employees had been directly employed by the employer. Th"s,
)here Alabor(only: contractin e@ists in a i1en case, the stat"te itself implies or establishes an employer(employee relationship bet)een the
employer &the o)ner of the proEect' and the employees of the Alabor(only: contractor, this time for a comprehensive p"rpose% Aemployer for
p"rposes of this #ode, to prevent any violation or circ!mvention of any provision of this #ode. The la) in effect holds both the employer and
the Alabor(only: contractor responsible to the latter:s employees for the more effecti1e safe"ardin of the employees: rihts "nder the 4abor
Code.:
8ence, a findin that a contractor is a 7labor(only> contractor is eH"i1alent to a findin that there e@ists an employer(employee relationship
bet)een the o)ner of the proEect and the employees of the Alabor only contractor since that relationship is defined and prescribed by the la)
itself.
UNITED SECIAL @ATCHMAN AGENCY v. THE HONORABLE COURT O" AEALS, CESAR AMA, BEN!AMIN ERE;, !OSE
ABRIAD, EDUARDO ALARBA, ANTONIO A6ILA, OSCAR BERNARDO, !AIME COLUMBRES, MARIO COLUMBRES, RONNIE
DESCUTODO, CONDORDIO EMINO, NOEL "LA6IA, ANDRES GEDUCOS, AN"ILO IHALAS, !UAN MI!ARES, MARCELO MI!ARES,
CANESIO OMBA!IN, ANTONIO AMA, CRISULO AMA, !R., DANILO AMA, ESTA"ANO AMA, EITO AMA, !R., ROMY
AMOSA, !ESUS ANIALES, DOMING ANI;ALES, ARNALDO ERE;, "IDEL ILOTON, CONCORDIO DE LOS REYES, 6ICENTE
ROBLES, ALE!ANDRO ROTAO, GERARDO SUMANGHID, NOEL SULIDO, MONICO TIEMO, AL"REDO 6ELEN;UELA, ARTURO
6ALEN;UELA, ROMY 6ELARDE, ELISEO 6ILLA"LOR
G.R. No. 194+56 !u'2 8, 4883
"#$ts%
A complaint for illeal dismissal and payment of money claims )as filed by respondent employees aainst F56A and !anco 9ilipino 5a1ins
and Mortae !an2 &7!9>'. $t stemmed from the termination of the Contract for 5ec"rity 5er1ices entered into bet)een F56A and !9. The
parties areed that 7the party terminatin the CO3TRACT shall i1e &a' T8$RTB &.<'(day notice prior to the date of termination to the other
party.>
The contract too2 effect on 1 +"ne 1,,4. 8o)e1er, on . +"ne 1,,4, or t)o &2' days later, !9 terminated the contract. The termination letter
dated . +"ne 1,,4, b"t recei1ed on +"ne 17, ad1ised F56A of the termination to ta2e effect .< days from receipt thereof.
12.
F56A alleed that, "pon receipt of the letter, Mr. Anel !ali)a, its Operations Manaer, immediately notified all the affected employees
stationed at the !9 branches abo"t the termination of their contract. 8e ad1ised them to report to the office for reassinment. Only thirty &.<'
o"t of the si@ty(se1en &*7' "ards reported and they )ere i1en ne) assinments. O"t of the remainin thirty(se1en &.7', t)enty(one &21'
filed, on 4 A""st 1,,4, a complaint for illeal dismissal and payment of money claims aainst F56A and !9 )ith the Reional Arbitration
!ranch of the 3ational 4abor Relations Commission &734RC>'.
The employees claimed that they )ere p"t on a floatin stat"s. They denied that F56A, represented by Mr. !ali)a, notified them of the
standin offer of the aency to reassin them to other clients after the termination of the contract )ith !9. ?"e to their dismissal, they prayed
for separation pay.
Issu&%
)hether respondents )ere illeally dismissed
H&'(%
Bes. $t is the contention of F56A that the respondents )ere not illeally dismissed, b"t that they ref"sed to report to the office after the
termination of the contract )ith !9. Alleedly, it )as the fa"lt of the respondents that they did not ha1e any )or2 assinment. There bein no
illeal dismissal, they ar"e that the 34RC erred in a)ardin separation pay to the employees.
$t )as established that the respondents )ere p"t on a temporary off(detail, )hich e@ceeded the allo)able period of * months, amo"ntin to
constr"cti1e dismissal. There is th"s no f"rther need to d)ell on the H"estions of fact raised in this petition.
;"rs"ant to a leitimate Eob contractin, F56A and !9 are Eointly and se1erally liable in the payment of the )aes of the employees, and for
1iolation of any pro1ision of the 4abor Code. 6e note that a compromise areement of the employees )as e@ec"ted bet)een !9 and the
employees. 8o)e1er, the compromise areement dealt only )ith salary differential. $t did not incl"de nor does it precl"de the a)ard of
separation pay. $n liht of the illeal dismissal of the respondents, F56A is liable to pay the respondents separation pay eH"i1alent to 1
month pay for e1ery year of ser1ice.
ABUNDIO BARAYOGA #*( BISUDECO7HILSUCOR
COR"ARM @OR:ERS UNION ?ACI@U CHA7TCA v. ASSET RI6ATI;ATION ,o0u'g#t&(%
TRUST
G.R. No. 168853 O$to1&, 4+, 4889
"#$ts%
!is"deco(;hils"cor Corfarm 6or2ers Fnion is composed of )or2ers of !icolandia 5"ar ?e1elopment Corporation &!$5F?ECO', a s"ar
plantation mill located in 8imaao, ;ili, Camarines 5"r.
Asset ;ri1atiCation Tr"st &A;T', a p"blic tr"st )as created "nder ;roclamation 3o. /<, as amended, mandated to ta2e title to and possession
of, conser1e, pro1isionally manae and dispose of non(performin assets of the ;hilippine o1ernment identified for pri1atiCation or
disposition.
;"rs"ant to 5ection 2. of ;roclamation 3o. /<, former ;resident CoraCon AH"ino iss"ed Administrati1e Order 3o. 14 identifyin certain
assets of o1ernment instit"tions that )ere to be transferred to the 3ational #o1ernment. Amon the assets transferred )as the financial
claim of the ;hilippine 3ational !an2 aainst !$5F?ECO in the form of a sec"red loan. AConseH"ently, by 1irt"e of a Tr"st Areement
e@ec"ted bet)een the 3ational #o1ernment and A;T on 9ebr"ary 27, 1,-7, A;T )as constit"ted as tr"stee o1er !$5F?ECO:s acco"nt )ith
the ;3!.
5ometime later, !$5F?ECO contracted the ser1ices of ;hilippine 5"ar Corporation &;hils"cor' to ta2e o1er the manaement of the s"ar
plantation and millin operations "ntil A""st .1, 1,,2.
Mean)hile, beca"se of the contin"ed fail"re of !$5F?ECO to pay its o"tstandin loan )ith ;3!, its mortaed properties )ere foreclosed
and s"bseH"ently sold in a p"blic a"ction to A;T, as the sole bidder. On April 2, 1,,1, A;T )as iss"ed a 5heriff:s Certificate of 5ale.
The "nion filed a complaint for "nfair labor practice, illeal dismissal, illeal ded"ction and "nderpayment of )aes and other labor standard
benefits pl"s damaes.
124
$n the meantime, A;T:s !oard of Tr"stees iss"ed a resol"tion acceptin the offer of !icol(Aro($nd"strial Cooperati1e &!A;C$' to b"y the
s"ar plantation and mill. Aain, on 5eptember 2., 1,,2, the board passed another resol"tion a"thoriCin the payment of separation benefits
to !$5F?ECO:s employees in the e1ent of the company:s pri1atiCation. Then, on October .<, 1,,2, !A;C$ p"rchased the foreclosed assets
of !$5F?ECO from A;T and too2 o1er its s"ar millin operations "nder the trade name ;eafrancia 5"ar Mill &;ens"mil'.
The "nion alleed that )hen ;hils"cor initially too2 o1er the operations of the company, it retained !$5F?ECO:s e@istin personnel "nder the
same terms and conditions of employment. 3onetheless, at the start of the season sometime in May 1,,1, ;hils"cor started recallin
)or2ers bac2 to )or2, to the e@ception of the "nion members. Manaement told them that they )ill be re(hired only if they resin from the
"nion. +"st the same, thereafter, the company started to employ the ser1ices of o"tsiders "nder the Apa2ya) system.
Issu&%
)hether A;T is liable to pay petitioners: monetary claims, incl"din bac2 )aes from May 1, 1,,1, to October .<, 1,,2 &the date of the sale
of !$5F?ECO assets to !A;C$'
H&'(%
3o. ;"rs"ant to Administrati1e Order 3o. 14, 5eries of 1,-7, ;3!:s assets, loans and recei1ables from its borro)ers )ere transferred to A;T
as tr"stee of the national o1ernment. Amon the liabilities transferred to A;T )as ;3!:s financial claim aainst !$5F?ECO, not the latter:s
assets and chattel. !$5F?ECO remained the o)ner of the mortaed properties in A""st 1,--, )hen the ;hilippine 5"ar Corporation
&;hils"cor' "ndertoo2 the operation and manaement of the s"ar plantation "ntil A""st .1, 1,,2, "nder a so(called Contract of 4ease
bet)een the t)o corporations. AAt the time, A;T )as merely a sec"red creditor of !$5F?ECO.
$t )as only in April 1,,1 that A;T foreclosed the assets and chattels of !$5F?ECO beca"se of the latter:s contin"ed fail"re to pay
o"tstandin loan obliations to ;3!=A;T. The properties )ere sold at p"blic a"ction to A;T, the hihest bidder, as indicated in the 5heriff:s
Certificate of 5ale iss"ed on April 2, 1,,1. $t )as only in 5eptember 1,,2 &after the e@piration of the lease=manaement Contract )ith
;hils"cor in A""st 1,,2', ho)e1er, )hen A;T too2 o1er !$5F?ECO assets, preparatory to the latter:s pri1atiCation.
$n the present case, petitioner("nion:s members )ho )ere not recalled to )or2 by ;hils"cor in May 1,,1 see2 to hold A;T liable for their
monetary claims and alleedly illeal dismissal. 5inificantly, prior to the act"al sale of !$5F?ECO assets to !A;C$ on October .<, 1,,2,
the A;T board of tr"stees had appro1ed a Resol"tion. The Resol"tion a"thoriCed the payment of separation benefits to the employees of the
corporation in the e1ent of its pri1atiCation. 3ot incl"ded in the Resol"tion, tho"h, )ere petitioner("nion:s members )ho had not been
recalled to )or2 in May 1,,1.
The d"ties and liabilities of !$5F?ECO, incl"din its monetary liabilities to its employees, )ere not all a"tomatically ass"med by A;T as
p"rchaser of the foreclosed properties at the a"ction sale. Any ass"mption of liability m"st be specifically and cateorically areed "pon.
Fnless e@pressly ass"med, labor contracts li2e collecti1e barainin areements are not enforceable aainst the transferee of an enterprise.
3o s"ccession of employment rihts and obliations can be said to ha1e ta2en place bet)een the t)o. !et)een the employees of
!$5F?ECO and A;T, there is no pri1ity of contract that )o"ld ma2e the latter a s"bstit"te employer that sho"ld be b"rdened )ith the
obliations of the corporation.
9"rthermore, "nder the -,)*$)-'& o/ #1so,-t)o*, a bona fide b"yer or transferee of all, or s"bstantially all, the properties of the seller or
transferor is not oblied to absorb the latter:s employees. The most that the p"rchasin company may do, for reasons of p"blic policy and
social E"stice, is to i1e preference of reemployment to the sellin company:s H"alified separated employees, )ho in its E"dment are
necessary to the contin"ed operation of the b"siness establishment.
$n any e1ent, the national o1ernment &in )hose tr"st A;T pre1io"sly held the mortae credits of !$5F?ECO' is not the employer of
petitioner("nion:s members, )ho had been dismissed sometime in May 1,,1, e1en before A;T too2 o1er the assets of the corporation.
8ence, "nder e@istin la) and E"rispr"dence, there is no reason to e@pect any 2ind of bailo"t by the national o1ernment. E1en the 34RC
fo"nd that no employer(employee relationship e@isted bet)een A;T and petitioners.
The liabilities of the pre1io"s o)ner to its employees are not enforceable aainst the b"yer or transferee, "nless &1' the latter "neH"i1ocally
ass"mes them0 or &2' the sale or transfer )as made in bad faith. Th"s, A;T cannot be held responsible for the monetary claims of petitioners
)ho had been dismissed e1en before it act"ally too2 o1er !$5F?ECO:s assets.
Moreo1er, it sho"ld be remembered that A;T merely became a transferee of !$5F?ECO:s assets for p"rposes of conser1ation beca"se of
its lien on those assets (( a lien it ass"med as assinee of the loan sec"red by the corporation from ;3!. 5"bseH"ently, A;T, as the hihest
bidder in the a"ction sale, acH"ired o)nership of the foreclosed properties.
12/
Rele1ant to this transfer of assets is Article 11< of the 4abor Code, as amended by Rep"blic Act 3o. *71/, )hich reads%
7Article 11<. <or$ers preference in case of ban$r!ptcy. H $n the e1ent of ban2r"ptcy or liH"idation of the employer:s b"siness, his )or2ers
shall enEoy first preference as reards their "npaid )aes and other monetary claims shall be paid in f"ll before the claims of the
4overnment and other creditors may be paid.>
Fnder Articles 2241 and 2242 of the Ci1il Code, a mortae credit is a special preferred credit that enEoys preference )ith respect to a
specific=determinate property of the debtor. On the other hand, the )or2er:s preference "nder Article 11< of the 4abor Code is an ordinary
preferred credit. 6hile this pro1ision raises the )or2er:s money claim to first priority in the order of preference established "nder Article 2244
of the Ci1il Code, the claim has no preference o1er special preferred credits.
6or2ers: claims for "npaid )aes and monetary benefits cannot be paid o"tside of a ban2r"ptcy or E"dicial liH"idation proceedins aainst
the employer. The application of Article 11< of the 4abor Code is continent "pon the instit"tion of those proceedins, d"rin )hich all
creditors are con1ened, their claims ascertained and in1entoried, and their preferences determined.
TRADERS ROYAL BAN: EMLOYEES UNION7INDEENDENT v. NATIONAL LABOR RELATIONS COMMISSION #*( EMMANUEL
NOEL A. CRU;
G.R. No. 148994 M#,$. 1+, 1995
"#$ts%
;etitioner Traders Royal !an2 Employees Fnion and pri1ate respondent Atty. Emman"el 3oel A. Cr"C, head of the E.3.A. Cr"C and
Associates la) firm, entered into a retainer areement on 9ebr"ary 2*, 1,-7 )hereby the former obliated itself to pay the latter a monthly
retainer fee of ;.,<<<.<< in consideration of the la) firm:s "nderta2in to render the ser1ices en"merated in their contract. ;arenthetically,
said retainer areement )as terminated by the "nion on April 4, 1,,<.
?"rin the e@istence of that areement, petitioner "nion referred to pri1ate respondent the claims of its members for holiday, mid(year and
year(end bon"ses aainst their employer, Traders Royal !an2 &TR!'. After the appropriate complaint )as filed by pri1ate respondent, the
case )as certified by the 5ecretary of 4abor to the 34RC.
The 34RC rendered a decision in the foreoin case in fa1or of the employees, a)ardin them holiday pay differential, mid(year bon"s
differential, and year(end bon"s differential.
;endin the hearin of the application for the )rit of e@ec"tion, TR! challened the decision of the 34RC before the 5"preme Co"rt. The
Co"rt, in its decision prom"lated on A""st .<, 1,,<, 6 modified the decision of the 34RC by deletin the a)ard of mid(year and year(end
bon"s differentials )hile affirmin the a)ard of holiday pay differential.
The ban2 1ol"ntarily complied )ith s"ch final E"dment and determined the holiday pay differential to be in the amo"nt of ;17/,7,4..2.
;etitioner ne1er contested the amo"nt th"s fo"nd by TR!. The latter d"ly paid its concerned employees their respecti1e entitlement in said
s"m thro"h their payroll.
After pri1ate respondent recei1ed the abo1e decision of the 5"preme Co"rt, he notified the petitioner "nion, the TR! manaement and the
34RC of his riht to e@ercise and enforce his attorney:s lien o1er the a)ard of holiday pay differential.
;ri1ate respondent filed a motion before 4abor Arbiter 4orenCo for the determination of his attorney:s fees, prayin that ten percent &1<N' of
the total a)ard for holiday pay differential comp"ted by TR! at ;17/,7,4..2, or the amo"nt of ;17,/7,.4., be declared as his attorney:s
fees, and that petitioner "nion be ordered to pay and remit said amo"nt to him.
Issu&%
)hether 34RC committed ra1e ab"se of discretion amo"ntin to lac2 of E"risdiction in "pholdin the a)ard of attorney:s fees in the amo"nt
of ;17,/74.4., or ten percent &1<N' of the ;17/,7,4..2 ranted as holiday pay differential to its members, in 1iolation of the retainer
areement
H&'(%
3o. There are t)o commonly accepted concepts of attorney:s fees, the so(called o,()*#,2 and &Nt,#o,()*#,2. $n its ordinary concept, an
attorney:s fee is the reasonable compensation paid to a la)yer by his client for the leal ser1ices he has rendered to the latter. The basis of
this compensation is the fact of his employment by and his areement )ith the client.
12*
$n its &Nt,#o,()*#,2 concept, an attorney:s fee is an indemnity for damaes ordered by the co"rt to be paid by the losin party in a litiation.
The basis of this is any of the cases pro1ided by la) )here s"ch a)ard can be made, s"ch as those a"thoriCed in Article 22<-, Ci1il Code,
and is payable not to the la)yer b"t to the client, "nless they ha1e areed that the a)ard shall pertain to the la)yer as additional
compensation or as part thereof.
$t is the first type of attorney:s fees )hich pri1ate respondent demanded before the labor arbiter.
3o claim for attorney:s fees )as filed by pri1ate respondent before the 34RC )hen it acted on the money claims of petitioner, nor before the
5"preme Co"rt )hen it re1ie)ed the decision of the 34RC. $t )as only after the 8ih Trib"nal modified the E"dment of the 34RC a)ardin
the differentials that pri1ate respondent filed his claim before the 34RC for a percentae thereof as attorney:s fees.
$t )o"ld ob1io"sly ha1e been impossible, if not improper, for the 34RC in the first instance and for the 5"preme Co"rt thereafter to ma2e an
a)ard for attorney:s fees )hen no claim therefor )as pendin before them. Co"rts enerally r"le only on iss"es and claims presented to
them for adE"dication. Accordinly, )hen the labor arbiter ordered the payment of attorney:s fees, he did not in any )ay modify the E"dment
of the 5"preme Co"rt.
As an adE"ncti1e episode of the action for the reco1ery of bon"s differentials, pri1ate respondent:s present claim for attorney:s fees may be
filed before the 34RC e1en tho"h or, better stated, especially after its earlier decision had been re1ie)ed and partially affirmed. $t is )ell
settled that a claim for attorney:s fees may be asserted either in the 1ery action in )hich the ser1ices of a la)yer had been rendered or in a
separate action.
6hile a claim for attorney:s fees may be filed before the E"dment is rendered, the determination as to the propriety of the fees or as to the
amo"nt thereof )ill ha1e to be held in abeyance "ntil the main case from )hich the la)yer:s claim for attorney:s fees may arise has become
final. Other)ise, the determination to be made by the co"rts )ill be premat"re. Of co"rse, a petition for attorney:s fees may be filed before
the E"dment in fa1or of the client is satisfied or the proceeds thereof deli1ered to the client.
A la)yer has t)o options as to )hen to file his claim for professional fees. 8ence, pri1ate respondent )as )ell )ithin his rihts )hen he
made his claim and )aited for the finality of the E"dment for holiday pay differential, instead of filin it ahead of the a)ard:s complete
resol"tion. To declare that a la)yer may file a claim for fees in the same action only before the E"dment is re1ie)ed by a hiher trib"nal
)o"ld depri1e him of his aforestated options and render ineffecti1e the foreoin prono"ncements of this Co"rt.
The ;.,<<<.<< )hich petitioner pays monthly to pri1ate respondent does not co1er the ser1ices the latter act"ally rendered before the labor
arbiter and the 34RC in behalf of the former. As stip"lated in ;art C of the areement, the monthly fee is intended merely as a consideration
for the la) firm:s commitment to render the ser1ices en"merated in ;art A &#eneral 5er1ices' and ;art ! &5pecial 4eal 5er1ices' of the
retainer areement.
The difference bet)een a compensation for a commitment to render leal ser1ices and a rem"neration for leal ser1ices act"ally rendered
can better be appreciated )ith a disc"ssion of the t)o 2inds of retainer fees a client may pay his la)yer. These are a eneral retainer, or a
retainin fee, and a special retainer.
A g&*&,#' ,&t#)*&,, or retainin fee, is the fee paid to a la)yer to sec"re his f"t"re ser1ices as eneral co"nsel for any ordinary leal
problem that may arise in the ro"tinary b"siness of the client and referred to him for leal action. The f"t"re ser1ices of the la)yer are
sec"red and committed to the retainin client. 9or this, the client pays the la)yer a fi@ed retainer fee )hich co"ld be monthly or other)ise,
dependin "pon their arranement. The fees are paid )hether or not there are cases referred to the la)yer. The reason for the rem"neration
is that the la)yer is depri1ed of the opport"nity of renderin ser1ices for a fee to the opposin party or other parties. $n fine, it is a
compensation for lost opport"nities.
A s-&$)#' ,&t#)*&, is a fee for a specific case handled or special ser1ice rendered by the la)yer for a client. A client may ha1e se1eral cases
demandin special or indi1id"al attention. $f for e1ery case there is a separate and independent contract for attorney:s fees, each fee is
considered a special retainer.
The ;.,<<<.<< monthly fee pro1ided in the retainer areement bet)een the "nion and the la) firm refers to a eneral retainer, or a retainin
fee, as said monthly fee co1ers only the la) firm:s plede, or as e@pressly stated therein, its 7commitment to render the leal ser1ices
en"merated.> The fee is not payment for pri1ate respondent:s e@ec"tion or performance of the ser1ices listed in the contract, s"bEect to some
partic"lar H"alifications or perm"tations stated there.
127
#enerally spea2in, )here the employment of an attorney is "nder an e@press 1alid contract fi@in the compensation for the attorney, s"ch
contract is concl"si1e as to the amo"nt of compensation. The Co"rt cannot, ho)e1er, apply the foreoin r"le in the instant petition and treat
the fi@ed fee of ;.,<<<.<< as f"ll and s"fficient consideration for pri1ate respondent:s ser1ices, as petitioner )o"ld ha1e it.
The ;.,<<<.<< is independent and different from the compensation )hich pri1ate respondent sho"ld recei1e in payment for his ser1ices.
6hile petitioner and pri1ate respondent )ere able to fi@ a fee for the latter:s promise to e@tend ser1ices, they )ere not able to come into
areement as to the la) firm:s act"al performance of ser1ices in fa1or of the "nion. 8ence, the retainer areement cannot control the
meas"re of rem"neration for pri1ate respondent:s ser1ices.
;ri1ate respondent is entitled to an additional rem"neration for p"rs"in leal action in the interest of petitioner before the labor arbiter and
the 34RC, on top of the ;.,<<<.<< retainer fee he recei1ed monthly from petitioner. The la) firm:s ser1ices are decidedly )orth more than
s"ch basic fee in the retainer areement. Th"s, in ;art C thereof on 79ee 5tr"ct"re,> it is e1en pro1ided that all attorney:s fees collected from
the ad1erse party by 1irt"e of a s"ccessf"l litiation shall belon e@cl"si1ely to pri1ate respondent, aside from petitioner:s liability for
appearance fees and reimb"rsement of the items of costs and e@penses en"merated therein.
The 1al"e of pri1ate respondent:s leal ser1ices sho"ld not be established on the basis of Article 111 of the 4abor Code alone. 5aid article
pro1ides%
7Art. 111. Attorney:s fees. K &a' $n cases of "nla)f"l )ithholdin of )aes the c"lpable party may be assessed attorney:s fees eH"i1alent to
ten percent of the amo"nt of the )aes reco1ered.>
The implementin pro1ision 38 of the foreoin article f"rther states%
75ec. 11. /ttorneys fees. K Attorney:s fees in any E"dicial or administrati1e proceedins for the reco1ery of )aes shall not e@ceed 1<N of
the amo"nt a)arded. The fees may be ded"cted from the total amo"nt d"e the )innin party.>
$n the first place, the fees mentioned here are the e@traordinary attorney:s fees reco1erable as indemnity for damaes s"stained by and
payable to the pre1ailin part. $n the second place, the ten percent &1<N' attorney:s fees pro1ided for in Article 111 of the 4abor Code and
5ection 11, R"le D$$$, !oo2 $$$ of the $mplementin R"les is the ma@im"m of the a)ard that may th"s be ranted. Article 111 th"s fi@es only
the limit on the amo"nt of attorney:s fees the 1ictorio"s party may reco1er in any E"dicial or administrati1e proceedins and it does not e1en
pre1ent the 34RC from fi@in an amo"nt lo)er than the ten percent &1<N' ceilin prescribed by the article )hen circ"mstances )arrant it.
The meas"re of compensation for pri1ate respondent:s ser1ices as aainst his client sho"ld properly be addressed by the r"le of &!ant!m
mer!it lon adopted in this E"risdiction. /uantum meruit, meanin 7as m"ch as he deser1es,> is "sed as the basis for determinin the
la)yer:s professional fees in the absence of a contract, +1b"t reco1erable by him from his client.
5o as not to needlessly prolon the resol"tion of a comparati1ely simple contro1ersy, the Co"rt deem it E"st and eH"itable to fi@ in the present
reco"rse a reasonable amo"nt of attorney:s fees in fa1or of pri1ate respondent. The Co"rt holds that the amo"nt of ;1<,<<<.<< is a
reasonable and fair compensation for the leal ser1ices rendered by pri1ate respondent to petitioner before the labor arbiter and the 34RC.
CARLOS . GAL6ADORES, ET AL. v. CRESENCIANO B. TRA!ANO, D),&$to, o/ t.& Bu,&#u o/ L#1o, R&'#t)o*s, MANGGAGA@A NG
:OMUNI:ASYON SA ILIINAS ?"I@UA, HILIINE LONG DISTANCE COMANY ?LDTA, #*( !OSE C. ESINAS
G.R. No. 58865 S&-t&01&, 19, 1986
"#$ts%
Respondent Co"nsel has been the leal co"nsel of respondent Fnion since 1,*4. 9or his ser1ices, he )as hired on a case to case
continent fee basis. On 5eptember 7, 1,-., he recei1ed a letter from the Fnion ;resident readin%
7The 9ree Telephone 6or2ers Fnion once aain reH"est yo" to appear as co"nsel in the on oin labor disp"te at ;4?T. $n consideration of
yo"r ser1ices therein, the "nion binds itself to compensate yo" for yo"r fees and e@penses therein on a continent basis. The amo"nt shall
be 1<N of any impro1ement, )ith retroacti1e effect, of the ;4?T:s last offer to the deadloc2 in C!A neotiations )hich )e 2no) )ill res"lt in
a comp"lsory arbitration. A s"pportin board resol"tion )ill later confirm the letter.>
;4?T:s 7last offer> referred to on the )ae increases )as% ;2.< for the first year of the proposed C!A0 ;1<< for the second year0 and ;,<
for the third year.
12-
The Minister of 4abor and Employment ass"med E"risdiction o1er all "nresol1ed iss"es in the barainin deadloc2 bet)een ;4?T and the
Fnion.
The Minister of 4abor a)arded across(the(board )ae increases of ; ..<=month effecti1e 3o1ember ,, 1,-20 ;1//=month effecti1e
3o1ember ,, 1,-., and ;1//=month effecti1e 3o1ember ,, 1,-4, in addition to the Christmas bon"s of 1=2 month pay per employee
effecti1e ?ecember, 1,-., and other frine benefits.
The E@ec"ti1e !oard of the Fnion passed a resol"tion reH"estin ;4?T to ded"ct ;11/.<< per employee for the leal ser1ices e@tended to
the Fnion by respondent Co"nsel.
;etitioners initially n"mberin *<< and finally /,2/-, filed a letter(complaint before the MO4E thro"h their a"thoriCed representati1e,
petitioner Carlos #al1adores assailin the imposition of ;1.<.<< &later corrected to ;1//.<<' per employee as attorney:s fees of respondents
co"nsel. ;etitioners too2 the position that the attorney:s fees of respondent co"nsel )ere not only "nreasonable b"t also 1iolati1e of Article
242&o' of the 4abor Code0 and that he ded"ctions cannot i1en leal effect by a mere !oard resol"tion b"t needs the ratification by the
eneral membership of the Fnion.
Respondents Fnion and Co"nsel, on the other hand, proffered the ar"ment that the attorney s fees bein e@acted pertained to his ser1ices
d"rin comp"lsory arbitration proceedins and cannot be considered as neotiation fees or attorney:s fees )ithin the conte@t of Article 242&o'
of the 4abor Code and that contrary to petitioners: claim that Respondent Co"nsel s"rfaced only as la)yer of the Fnion )hen the employees
themsel1es enaed in mass action to force a sol"tion to the deadloc2 in their neotiations, he appeared contin"o"sly from 5eptember -,
1,-. "ntil the decision in the case )as rendered on October 2., 1,-.. ;etitioners proposed a sol"tion offerin to pay ;1<.<< per employee,
b"t Respondent Co"nsel ref"sed.
Issu&%
)hether attorney:s fees may be chared aainst indi1id"al members of respondent Fnion
H&'(%
3o. Article 222&b' of the 4abor Code pro1ides%
7Article 222. Appearance and 9ees.
@ @ @
7&b' 3o attorney:s fees, neotiation fees or similar chares of any 2ind arisin from any collecti1e barainin neotiations or concl"sion of the
collecti1e barainin areement shall be imposed on any indi1id"al member of the contractin "nion0 ;ro1ided, ho)e1er, that attorney:s fees
may be chared aainst "nion f"nds in an amo"nt to be areed "pon by the parties. Any contract, areement or arranement of any sort to
the contrary shall be n"ll and 1oid.>
6hile Article 242 of the same Code reads%
7Art. 242. Rihts and conditions of membership in a labor oraniCation. The follo)in are the rihts and conditions of membership in a labor
oraniCation%
@ @ @
7&o' Other than for mandatory acti1ities "nder the Code, no special assessment, attorney:s fees, neotiation fees or any other e@traordinary
fees may be chec2ed off 7from any amo"nt d"e an employee )itho"t indi1id"al )ritten a"thoriCation d"ly sined by the employee. The
a"thoriCation sho"ld specifically state the amo"nt, p"rpose and beneficiary of the ded"ction.>
The Omnib"s R"les $mplementin the 4abor Code also pro1ide that ded"ctions from )aes of the employees may only be made by the
employer in cases a"thoriCed by la), incl"din ded"ctions for ins"rance premi"ms ad1anced by the employer on behalf of the employees as
)ell as "nion d"es )here the riht to chec2(off is a"thoriCed in )ritin by the indi1id"al employee himself.
3o chec2(offs from any amo"nts d"e employees may be effected )itho"t indi1id"al )ritten a"thoriCations d"ly sined by the employee
specifically statin the amo"nt, p"rpose and beneficiary of the ded"ction. The reH"ired indi1id"al a"thoriCations in this case are )antin. $n
fact, petitioner employees are 1ioro"sly obEectin.
12,
MERCURY DRUG CO., INC. v. NARDO DAYAO, ET AL.
G.R. No. L738+94 S&-t&01&, 38, 1984
"#$ts%
A 1erified petition )as filed by 3ardo ?ayao and 7< others aainst Merc"ry ?r" Co., $nc., and=or Mariano R"e, ;resident O #eneral
Manaer, and Merc"ry ?r" Co., $nc., Employees Association prayin, )ith respect to respondent corporation and its president and eneral
manaer% 1' payment of their "npaid bac2 )aes for )or2 done on 5"ndays and leal holidays pl"s 2/c=c additional compensation from date
of their employment "p to +"ne .<, 1,*20 2' payment of e@tra compensation on )or2 done at niht0 .' reinstatement of +an"ario Referente
and Oscar Echalar to their former positions )ith bac2 salaries0 and, as aainst the respondent "nion, for its disestablishment and the ref"nd
of all monies it had collected from petitioners.
Issu& K1%
)hether C$R erred in s"stainin pri1ate respondents: claims for 2/N 5"nday and leal holiday premi"ms
H&'( K1%
3o. The Co"rt is not impressed by the ar"ment that "nder the contracts of employment the petitioners are not entitled to s"ch claim for the
reason that the same are contrary to la). ;ayment of e@tra or additional pay for ser1ices rendered d"rin 5"ndays and leal holidays is
mandated by la). E1en ass"min that the petitioners had areed to )or2 on 5"ndays and leal holidays )itho"t any f"rther consideration
than their monthly salaries, they are not barred ne1ertheless from claimin )hat is d"e them, beca"se s"ch areement is contrary to p"blic
policy and is declared n"n and 1oid by la).
Issu& K4%
)hether C$R erred in s"stainin pri1ate respondents: claims for nihttime )or2 premi"ms
H&'( K4%
3o. 6itnesses for petitioners declared they )or2ed on re"lar days and on e1ery other 5"nday and also d"rin all holidays0 that for ser1ices
rendered on 5"ndays and holidays they )ere not paid for the first 4 ho"rs and )hat they only recei1ed )as the o1ertime compensation
correspondin to the n"mber of ho"rs after or in e@cess of the first fo"r ho"rs0 and that s"ch payment is bein indicated in the o1ertime pay
for )or2 done in e@cess of eiht ho"rs on re"lar )or2in days. $t is also claimed that their nihttime ser1ices co"ld )ell be seen on their
respecti1e daily time records.
The respondent co"rt:s r"lin on additional compensation for )or2 done at niht is, therefore, not )itho"t e1idence. Moreo1er, the petitioner(
company did not deny that the pri1ate respondents rendered nihttime )or2. T.& P3#)v&, ,u'&Q is not applicable in the case at bar.
Additional compensation for nihttime )or2 is fo"nded on p"blic policy, hence the same cannot be )ai1ed.
COMMANDO SECURITY AGENCY v. NATIONAL LABOR RELATIONS COMMISSION #*( NEMESIO DECIERDO
G.R. No. 998++ !u'2 48, 1994
"#$ts%
;ri1ate respondent 3emesio ?ecierdo )as a sec"rity "ard of the petitioner since 9ebr"ary 1,-1. $n April 1,-7, petitioner entered into a
contract to pro1ide "ardin ser1ices to the Alsons ?e1elopment and $n1estment Corporation &A45O35 for bre1ity' for a period of one year,
i.e., from April 11, 1,-7 to April 1<, 1,--, "nless rene)ed "nder s"ch terms and conditions as may be m"t"ally acceptable. The n"mber of
"ards to be assined by the petitioner )o"ld depend on A45O3:s demand, sometimes 2 "ards on a daily shift, and sometimes 4 "ards.
?ecierdo )as one of the "ards assined to the Alde1inco !"ildin by the petitioner.
Maria Mila ?. 5amonte, ;roperties Administration 8ead of A45O35, reH"ested the petitioner for a 7periodic resh"fflin> of "ards. ;"rs"ant
to that reH"est of its client, petitioner ser1ed a recall order on ?ecierdo.
A ?etail Order )as iss"ed to ?ecierdo assinin him to the ;acific Oil Company in !"na)an, ?a1ao City, )ith instr"ction to report to the
manaer, b"t ?ecierdo ref"sed to accept the assinment.
On the effecti1e date of the detail order, ?ecierdo filed a complaint for illeal dismissal, "nfair labor practice, "nderpayment of )aes,
o1ertime pay, niht premi"m, 1.th month pay, holiday pay, rest day pay and incenti1e lea1e pay.
Issu& K1%
)hether ?ecierdo had abandoned his employment
1.<
H&'( K1%
3o. The first ro"nd of the petition is not )ell ta2en for the 34RC did find that ?ecierdo had i1en "p his Eob and chose separation pay in lie"
of reinstatement. As a res"lt, the 34RC dismissed the chare of illeal dismissal and "nfair labor practice aainst the petitioner and denied
?ecierdo:s claim for separation pay.
Issu& K4%
)hether petitioner )as denied d"e process of la)
H&'( K4%
3o. ;roced"ral d"e process merely reH"ires notice and opport"nity to be heard )hich the petitioner )as i1en then it filed its position paper.
The petitioner )as properly notified and e1en too2 part in the conciliation conference for the amicable settlement of the case. $t )as made
a)are of the nat"re and specifics of the chares aainst it b"t failed to ref"te them e@pectin that a hearin )o"ld be called. 8o)e1er, the
4abor Arbiter proceeded to decide the case based on the parties: position papers, the records s"bmitted by petitioner, and the report and the
comp"tations made by the Corporate A"ditin E@aminer reardin the s"ms )hich ?ecierdo )as entitled to reco1er. That proced"re
complied )ith the Re1ised R"les of the 34RC, partic"larly 5ections 2 and ., )hich pro1ide%
75ec. 2. S!bmission of position papers. K ?"rin the initial conference=hearin, or immediately thereafter. the 4abor Arbiter shall reH"ire the
parties to sim"ltaneo"sly s!bmit to him their respective verified position papers, which shall cover only the iss!es raised in the complaint,
accompanied by all s!pporting doc!ments then available to them and the affidavits of their witnesses which shall ta$e the place of their
direct testimony. The parties shall thereafter not be allo)ed to allee, or present e1idence to pro1e, facts not referred to and any ca"se or
ca"ses of action not incl"ded in their complaint or position papers, affida1its and other doc"ments. The parties shall f"rnish each other )ith
copies of the position papers, toether )ith the s"pportin affida1its and doc"ments s"bmitted by them.
75ec. .. Determination of necessity of hearing. K $mmediately after the s"bmission by the parties of their position papers and s"pportin
proofs, the Labor /rbiter shall determine whether there is a need for a formal hearing or investigation. At this state, he may, in his discretion,
and for the p"rpose of ma2in s"ch determination, elicit pertinent facts or information, incl"din doc"mentary e1idence, if any, from any party
or )itness to complete, as far as possible, the facts of the case. 9acts or information so elicited may ser1e as basis for his clarification or
simplication and limitation of the iss"es in the case, enco"rain for this p"rpose the s"bmission by the parties of admissions and
stip"lations of fact to abbre1iate the proceedins. 8e shall participate acti1ely in the preparation of s"ch stip"lations, ma2in s"estions on
)hat facts the parties need not pro1e.>
The 4abor Arbiter may, in his so"nd discretion, dispense )ith a hearin and reH"ire, instead, the parties to file their respecti1e position
papers toether )ith all the s"pportin proofs all that respondent had to do )as present its payrolls and other records )hich it is reH"ired to
2eep and maintain and it co"ld already be determined on the face thereof if complainant:s monetary claims had act"ally been paid or not
complainant:s entitlements )ere comp"ted by the Corporate A"ditin E@aminer on the basis of respondent:s records )hich )as sec"red by
1irt"e of a s!bpoena d!ces tec!m.
Issu& K3%
)hether ?ecierdo is in estoppel
H&'( K3%
3o. ;etitioner:s contention that ?ecierdo is estopped from complainin abo"t the 2/N ded"ction from his salary representin petitioner:s
share in proc"rin Eob placement for him, is not )ell ta2en. That pro1ision of the employment contract )as illeal and iniH"ito"s, hence, n"ll
and 1oid.
"I6E ! TAFI #*(Io, !UAN S. ARMAMENTO v. NATIONAL LABOR RELATIONS COMMISSION, DOMINGO MALDIGAN #*( GILBERTO
SABSALON
G.R. No. 111+5+ August 44, 199+
"#$ts%
;ri1ate respondents ?omino Maldian and #ilberto 5absalon )ere hired by the petitioners as ta@i dri1ers and, as s"ch, they )or2ed for 4
days )ee2ly on a 24(ho"r shiftin sched"le. Aside from the daily 7bo"ndary> of ;7<<.<< for air(conditioned ta@i or ;4/<.<< for non(air(
conditioned ta@i, they )ere also reH"ired to pay ;2<.<< for car )ashin, and to f"rther ma2e a ;1/.<< deposit to ans)er for any deficiency in
their 7bo"ndary,> for e1ery act"al )or2in day.
$n less than 4 months after Maldian )as hired as an e@tra dri1er by the petitioners, he already failed to report for )or2 for "n2no)n reasons.
4ater, petitioners learned that he )as )or2in for 7Mine of #old> Ta@i Company. 6ith respect to 5absalon, )hile dri1in a ta@icab of
1.1
petitioners on 5eptember *, 1,-., he )as held "p by his armed passener )ho too2 all his money and thereafter stabbed him. 8e )as
hospitaliCed and after his dischare, he )ent to his home pro1ince to rec"perate.
$n +an"ary, 1,-7, 5absalon )as re(admitted by petitioners as a ta@i dri1er "nder the same terms and conditions as )hen he )as first
employed, b"t his )or2in sched"le )as made on an 7alternati1e basis,> that is, he dro1e only e1ery other day. 8o)e1er, on se1eral
occasions, he failed to report for )or2 d"rin his sched"le.
5absalon failed to remit his 7bo"ndary> of ;7<<.<< for the pre1io"s day. Also, he abandoned his ta@icab in Ma2ati )itho"t f"el refill )orth
;.<<.<<. ?espite repeated reH"ests of petitioners for him to report for )or2, he adamantly ref"sed. After)ards it )as re1ealed that he )as
dri1in a ta@i for 7!"la2la2 Company.>
5ometime in 1,-,, Maldian reH"ested petitioners for the reimb"rsement of his daily cash deposits for 2 years, b"t herein petitioners told
him that not a sinle centa1o )as left of his deposits as these )ere not e1en eno"h to co1er the amo"nt spent for the repairs of the ta@i he
)as dri1in. This )as alleedly the practice adopted by petitioners to reco"p the e@penses inc"rred in the repair of their ta@icab "nits. 6hen
Maldian insisted on the ref"nd of his deposit, petitioners terminated his ser1ices. 5absalon, on his part, claimed that his termination from
employment )as effected )hen he ref"sed to pay for the )ashin of his ta@i seat co1ers.
;ri1ate respondents filed a complaint )ith the Manila Arbitration Office of the 3ational 4abor Relations Commission charin petitioners )ith
illeal dismissal and illeal ded"ctions.
Respondent 34RC held that the ;1/.<< daily deposits made by respondents to defray any shortae in their 7bo"ndary> is co1ered by the
eneral prohibition in Article 114 of the 4abor Code aainst reH"irin employees to ma2e deposits, and that there is no sho)in that the
5ecretary of 4abor has reconiCed the same as a 7practice> in the ta@i ind"stry. ConseH"ently, the deposits made )ere illeal and the
respondents m"st be ref"nded therefor.
Issu&%
)hether petitioner is liable for illeal ded"ctions
H&'(%
Bes. Article 114 of the 4abor Code pro1ides as follo)s%
7Art. 114. Deposits for loss or damage. K 3o employer shall reH"ire his )or2er to ma2e deposits from )hich ded"ctions shall be made for
the reimb"rsement of loss of or damae to tools, materials, or eH"ipment s"pplied by the employer, e@cept )hen the employer is enaed in
s"ch trades, occ"pations or b"siness )here the practice of ma2in deposits is a reconiCed one, or is necessary or desirable as determined
by the 5ecretary of 4abor in appropriate r"les and re"lations.>
Clearly, the same does not apply to or permit deposits to defray any deficiency )hich the ta@i dri1er may inc"r in the remittance of his
7bo"ndary.> Also, )hen pri1ate respondents stopped )or2in for petitioners, the alleed p"rpose for )hich petitioners reH"ired s"ch
"na"thoriCed deposits no loner e@isted. $n other case, any balance d"e to pri1ate respondents after proper acco"ntin m"st be ret"rned to
them )ith leal interest.
9rom 1,-7(1,,1, 5absalon )as able to )ithdra) his deposits thro"h vales or he inc"rred shortaes, s"ch that he is e1en indebted to
petitioners in the amo"nt of ;.,44-.<<. 6ith respect to Maldian:s deposits, nothin )as mentioned H"estionin the same e1en in the
present petition. 5ince the e1idence sho)s that he had not )ithdra)n the same, he sho"ld be reimb"rsed the amo"nt of his acc"m"lated
cash deposits.
On the matter of the car )ash payments, the labor arbiter had this to say in his decision% 7Anent the iss"e of illeal ded"ctions, there is no
disp"te that as a matter of practice in the ta@i ind"stry, after a to"r of d"ty, it is inc"mbent "pon the dri1er to restore the "nit he has dri1en to
the same clean condition )hen he too2 it o"t, and as claimed by the petitioners, pri1ate respondents )ere made to sho"lder the e@penses
for )ashin, the amo"nt doled o"t )as paid directly to the person )ho )ashed the "nit, th"s )e find nothin illeal in this practice, m"ch
more to consider the amo"nt paid by the dri1er as illeal ded"ction in the conte@t of the la).>
ConseH"ently, pri1ate respondents are not entitled to the ref"nd of the ;2<.<< car )ash payments they made. $t )ill be noted that there )as
nothin to pre1ent pri1ate respondents from cleanin the ta@i "nits themsel1es, if they )anted to sa1e their ;2<.<<.
On the last iss"e of attorney:s fees or ser1ice fees for pri1ate respondents: a"thoriCed representati1e, Article 222 of the 4abor Code, as
amended by 5ection . of ;residential ?ecree 3o. 1*,1, states that non(la)yers may appear before the 34RC or any labor arbiter only &1' if
they represent themsel1es, or &2' if they represent their oraniCation or the members thereof. 6hile it may be tr"e that #"illermo 8. ;"lia
1.2
)as the a"thoriCed representati1e of pri1ate respondents, he )as a non(la)yer )ho did not fall in either of the foreoin cateories. 8ence,
by clear mandate of the la), he is not entitled to attorney:s fees.
SECIAL STEEL RODUCTS, INC. v. LUTGARDO 6ILLAREAL AND "REDERIC: SO
G.R. No. 1+338+ !u'2 8, 488+
"#$ts%
5pecial 5teel ;rod"cts, $nc., petitioner, is a domestic corporation enaed in the principal b"siness of importation, sale, and mar2etin of
!O84ER steel prod"cts. 4"tardo C. Dillareal and 9rederic2 #. 5o, respondents, )or2ed for petitioner as assistant sales manaer and
salesman, respecti1ely.
5ometime in May 1,,., respondent Dillareal obtained a car loan from the !an2 of Commerce, )ith petitioner as s"rety, as sho)n by a
7contin"in s"retyship areement> and 7promissory note> )herein they Eointly and se1erally areed to pay the ban2 ;7-*,*11.*< in 72
monthly installments.
5ometime in A""st 1,,4, petitioner 7sponsored> respondent 9rederic2 5o to attend a trainin co"rse in Papfenber, A"stria cond"cted by
!O84ER, petitioner:s principal company. This trainin )as a re)ard for respondent 5o:s o"tstandin sales performance. 6hen respondent
ret"rned , months thereafter, petitioner directed him to sin a memorand"m pro1idin that !O84ER reH"ires trainees from Papfenber to
contin"e )or2in )ith petitioner for a period of . years after the trainin. Other)ise, each trainee shall ref"nd to !O84ER M*,<<<.<< &F5
dollars' by )ay of set(off or compensation. On +an"ary 1*, 1,,7 or 2 years and 4 months after attendin the trainin, respondent resined
from petitioner.
$mmediately, petitioner ordered respondents to render an acco"ntin of its 1ario"s Christmas i1ea)ays. they recei1ed. These )ere
intended for distrib"tion to petitioner:s c"stomers.
$n protest, respondents demanded from petitioner payment of their separation benefits, commissions, 1acation and sic2 lea1e benefits, and
proportionate 1.th month pay. !"t petitioner ref"sed and instead, )ithheld their 1.thmonth pay and other benefits.
Respondents filed )ith the 4abor Arbiter a complaint for payment of their monetary benefits aainst petitioner and its president, A""sto
;ardo.
Issu&%
May an employer )ithhold its employees: )aes and benefits as lien to protect its interest as a s"rety in the latter:s car loan and for
e@penses inc"rred in a trainin abroadL
H&'(%
3o. Article 11* of the 4abor Code, as amended, pro1ides%
7ART. 11*. <ithholding of wages and $ic$bac$s prohibited. G It s.#'' 1& u*'#3/u' /o, #*2 -&,so*, (),&$t'2 o, )*(),&$t'2, to 3)t..o'( #*2
#0ou*t /,o0 t.& 3#g&s ?#*( 1&*&/)tsA o/ # 3o,>&, or ind"ce him to i1e "p any part of his )aes by force, stealth, intimidation, threat or
by any other means )hatsoe1er 3)t.out t.& 3o,>&,=s $o*s&*t.>
;etitioner has no leal a"thority to )ithhold respondents: 1.th month pay and other benefits. 6hat an employee has )or2ed for, his
employer m"st pay. Th"s, an employer cannot simply ref"se to pay the )aes or benefits of its employee beca"se he has either defa"lted in
payin a loan "aranteed by his employer0 or 1iolated their memorand"m of areement0 or failed to render an acco"ntin of his employer:s
property.
The contract e@ec"ted by petitioner and respondent Dillareal &in fa1or of the !an2 of Commerce' is a $o*t,#$t o/ su,&t2. $n fact, it is
denominated as a 7contin"in s"retyship areement.> 8ence, petitioner co"ld not E"st "nilaterally )ithhold respondent:s )aes or benefits as
a preliminary remedy "nder Article 2<71. $t m"st file an action aainst respondent Dillareal.
As to respondent 5o, petitioner maintains that there can be a set(off or leal compensation bet)een them. ConseH"ently, it can )ithhold his
1.th month pay and other benefits.
9or leal compensation to ta2e place, the reH"irements set forth in Articles 127- and 127, of the Ci1il Code, H"oted belo), m"st be present.
7ART$C4E 127-. Compensation shall ta2e place )hen t)o persons, in their o)n riht, are creditors and debtors of each other.
1..
7ART$C4E 127,. $n order that compensation may be proper, it is necessary%
&1' That each one of the obliors be bo"nd principally, and that he be at the same time a principal creditor of the other0
&2' That both debts consist in a s"m of money, or if the thins d"e are cons"mable, they be of the same 2ind, and also of the same
H"ality if the latter has been stated0:
&.' That the t)o debts be d"e0
&4' That they be liH"idated and demandable0
&/' That o1er neither of them there be any retention or contro1ersy, commenced by third persons and comm"nicated in d"e time to the
debtor.>
$n the present case, set(off or leal compensation cannot ta2e place bet)een petitioner and respondent 5o beca"se they are not m"t"ally
creditor and debtor of each other.
A caref"l readin of the Memorand"m re1eals that the 7l"mp s"m compensation of not less than F5 M*,<<<.<< )ill ha1e to be ref"nded> by
each trainee to !O84ER, not to petitioner.
METROOLITAN BAN: < TRUST COMANY EMLOYEES UNION7ALU7TUC #*( ANTONIO 6. BALINANG v. NATIONAL LABOR
RELATIONS COMMISSION ?4*( D)v)s)o*A #*( METROOLITAN BAN: #*( TRUST COMANY
G.R. No. 184636 S&-t&01&, 18, 1993
"#$ts%
On 2/ May 1,-,, the ban2 entered into a collecti1e barainin areement )ith the M!TCEF, rantin a monthly ;,<< )ae increase
effecti1e <1 +an"ary 1,-,, ;*<< )ae increase <1 +an"ary 1,,<, and ;2<< )ae increase effecti1e <1 +an"ary 1,,1. The M!TCEF had
also barained for the incl"sion of probationary employees in the list of employees )ho )o"ld benefit from the first ;,<< increase b"t the
ban2 had adamantly ref"sed to accede thereto. ConseH"ently, only re"lar employees as of <1 +an"ary 1,-, )ere i1en the increase to the
e@cl"sion of probationary employees.
!arely a month later, Rep"blic Act *727 too2 effect. $ts pro1isions, pertinent to this case, state%
75ec. 4. &a' Fpon the effecti1ity of this Act, the stat"tory minim"m )ae rates of all )or2ers and employees in the pri1ate sector, )hether
aric"lt"ral or non(aric"lt"ral, shall be increased by t)enty(fi1e pesos &;2/' per day, ...% +rovided, That those already recei1in abo1e the
minim"m )ae rates "p to one h"ndred pesos &;1<<.<<' shall also recei1e an increase of t)enty(fi1e pesos &;2/.<<' per day ...
@ @ @
7&d' $f e@pressly pro1ided for and areed "pon in the collecti1e barainin areements, all increase in the daily basic )ae rates ranted by
the employers three &.' months before the effecti1ity of this Act shall be credited as compliance )ith the increases in the )ae rates
prescribed herein, provided that, )here s"ch increases are less than the prescribed increases in the )ae rates "nder this Act, the employer
shall pay the difference. 5"ch increase shall not incl"de anni1ersary )ae increases, merit )ae increase and those res"ltin from the
re"lariCation or promotion of employees.
76here the application of the increases in the )ae rates "nder this 5ection res"lts in distortions as defined "nder e@istin la)s in the )ae
str"ct"re )ithin an establishment and i1es rise to a disp"te therein, s"ch disp"te shall first be settled 1ol"ntarily bet)een the parties and in
the e1ent of a deadloc2, the same shall be finally resol1ed thro"h comp"lsory arbitration by the reional branches of the 3ational 4abor
Relations Commission &34RC' ha1in E"risdiction o1er the )or2place.
7$t shall be mandatory for the 34RC to cond"ct contin"o"s hearins and decide any disp"te arisin "nder this 5ection )ithin t)enty &2<'
calendar days from the time said disp"te is formally s"bmitted to it for arbitration. The pendency of a disp"te arisin from a )ae distortion
shall not in any )ay delay the applicability of the increase in the )ae rates prescribed "nder this 5ection.>
;"rs"ant to the abo1e pro1isions, the ban2 a1e the ;2/ increase per day, or ;7/< a month, to its probationary employees and to those )ho
had been promoted to re"lar or permanent stat"s before <1 +"ly 1,-, b"t )hose daily rate )as ;1<< and belo). The ban2 ref"sed to i1e
the same increase to its re"lar employees )ho )ere recei1in more than ;1<< per day and recipients of the ;,<< C!A increase.
Contendin that the ban2:s implementation of Rep"blic Act *727 res"lted in the cateoriCation of the employees into &a' the probationary
employees as of .< +"ne 1,-, and re"lar employees recei1in ;1<< or less a day )ho had been promoted to permanent or re"lar stat"s
1.4
before <1 +"ly 1,-,, and &b' the re"lar employees as of <1 +"ly 1,-,, )hose pay )as o1er ;1<< a day, and that, bet)een the t)o ro"ps,
there emered a s"bstantially red"ced salary ap, the M!TCEF so"ht from the ban2 the correction of the alleed distortion in pay.
Issu&%
)hether or not the implementation by the Metropolitan !an2 and Tr"st Company of Rep"blic Act 3o. *727, mandatin an increase in pay of
;2/ per day for certain employees in the pri1ate sector, created a distortion that )o"ld reH"ire an adE"stment "nder said la) in the )aes of
the latter:s other 1ario"s ro"ps of employees
H&'(%
Bes. @#g& ()sto,t)o* means a sit"ation )here an increase in prescribed )ae rates res"lts in the elimination or se1ere contradiction of
intentional H"antitati1e differences in )ae or salary rates bet)een and amon employee ro"ps in an establishment as to effecti1ely
obliterate the distinctions embodied in s"ch )ae str"ct"re based on s2ills, lenth of ser1ice, or other loical bases of differentiation.
6ae distortion can so e@ist )hen, as a res"lt of an increase in the prescribed )ae rate, an 7elimination or se1ere contraction of intentional
H"antitati1e differences in )ae or salary rates> )o"ld occ"r 7bet)een and amon employee ro"ps in an establishment as to effecti1ely
obliterate the distinctions embodied in s"ch )ae str"ct"re based on s2ills, lenth of ser1ice, or other loical bases of differentiation.> $n
mandatin an adE"stment, the la) did not reH"ire that there be an elimination or total abroation of H"antitati1e )ae or salary differences0 a
se1ere contraction thereof is eno"h. The contraction bet)een personnel ro"pins comes close to eihty(three &-.N', )hich cannot, by
any stretch of imaination, be considered less than se1ere.
The 7intentional H"antitati1e differences> in )ae amon employees of the ban2 has been set by the C!A to abo"t ;,<< per month as of <1
+an"ary 1,-,. $t is intentional as it has been arri1ed at thro"h the collecti1e barainin process to )hich the parties are thereby concl"ded.
The intention of the parties, )hether the benefits "nder a collecti1e barainin areement sho"ld be eH"ated )ith those ranted by la) or
not, "nless there are compellin reasons other)ise, m"st pre1ail and be i1en effect.
The Co"rt finds the form"la s"ested then by Commissioner !onto(;ereC to )ell be the appropriate meas"re to balance the respecti1e
contentions of the parties in this instance. 5"ch form"la is as follo)s%
Minim"m 6ae Y N @ ;rescribed Y ?istortion AdE"stment
Act"al 5alary
ILA@ AT BU:LOD NG MANGGAGA@A ?IBMA v. NATIONAL LABOR RELATIONS COMMISSION ?"),st D)v)s)o*A, HON. CARMEN
TALUSAN #*( SAN MIGUEL CORORATION
G.R. No. 91988 !u*& 45, 1991
"#$ts%
Fpon the effecti1ity of the Rep"blic Act 3o. *727, other)ise 2no)n as the 6ae RationaliCation Act, on +"ne /, 1,-,, the "nion 2no)n as
7Ilaw at 8!$lod *g 'anggagawa BI8'C> K said to represent 4,/<< employees of 5an Mi"el Corporation K presented to the company a
demand for correction of the sinificant distortion in the )or2ers: )aes. $n that demand, the Fnion e@plicitly in1o2ed 5ection 4 &d' of RA
*727. !"t the Fnion claims that demand )as inored.
The Fnion:s position )as that the )or2ers: ref"se 7to )or2 beyond - ho"rs e1eryday startin October 1*, 1,-,> as a leitimate means of
compellin 5MC to correct 7the distortion in their )aes bro"ht abo"t by the implementation of the said la)s &R.A. **4< and R.A. *727' to
ne)ly(hired employees. That decision to obser1e the eiht ho"rs )or2 shift )as implemented on October 1*, 1,-, by 7some -<< daily(paid
)or2ers at the ;olo ;lant:s prod"ction line &of 5an Mi"el Corporation Ihereafter, simply 5MCJ' Eoined by others at statistical H"ality control
and )areho"se, all members of $!M.
This abandonment of the lon(standin sched"le of )or2 and the re1ersion to the eiht(ho"r shift apparently ca"sed s"bstantial losses to
5MC. $ts claim is that there ens"ed )or2 disr"ption and lo)er efficiency res"ltin in t"rn, in lost prod"ction of 2,<<4,1</ cases of beer0 that in
money terms, 5MC lost ;174,*/7,/,- in sales and ;4-,,<4,.11 in re1en"es and the #o1ernment lost e@cise ta@ re1en"e of ;42 million,
comp"ted at the rate of ;21 per case collectible at the plant.
5MC filed )ith the Arbitration !ranch of the 3ational 4abor Relations Commission a complaint aainst the Fnion and its members to declare
the stri2e or slo)do)n illeal and to terminate the employment of the "nion officers and shop ste)ards.
Issu&%
1./
)hether the stri2e or slo)do)n )as illeal
H&'(%
Bes. $n the partic"lar instance of distortions of the )ae str"ct"re )ithin an establishment> res"ltin from 7the application of any prescribed
)ae increase by 1irt"e of a la) or )ae order, 5ection . of Rep"blic Act 3o. *727 prescribes a specific, detailed and comprehensi1e
proced"re for the correction thereof, thereby implicitly e@cl"din stri2es or loc2o"ts or other concerted acti1ities as modes of settlement of the
iss"e. The pro1ision states that%
7the employer and the "nion shall negotiate to correct the distort(ions. Any disp"te arisin from )ae distortions shall be resol1ed thro"h the
grievance proced!re !nder their collective bargaining agreement and, if it remains "nresol1ed, thro"h vol!ntary arbitration. Fnless
other)ise areed by the parties in )ritin, s"ch disp"te shall be decided by the 1ol"ntary arbitrator or panel of 1ol"ntary arbitrators )ithin ten
&1<' calendar days from the time said disp"te )as referred to 1ol"ntary arbitration.
7$n cases )here there are no collecti1e areements or reconiCed labor "nions, the employers and )or2ers shall endea1or to correct s"ch
distortions. Any disp"te arisin therefrom shall be settled thro!gh the *ational #onciliation and 'ediation 8oard and, if it remains "nresol1ed
after ten &1<' calendar days of conciliation, shall be referred to the appropriate branch of the *ational Labor Relations #ommission B*LR#C .
$t shall be mandatory for the 34RC to cond"ct contin"o"s hearins and decide the disp"te )ithin t)enty &2<' calendar days from the time
said disp"te is s"bmitted for comp"lsory arbitration.
7The pendency of a disp"te arisin from a )ae distortion shall not in any way delay the applicability of any increase in prescribed wage
rates p"rs"ant to the pro1isions of la) or 6ae Order.>
5ection 1*, Chapter $ of r"les implementin RA *727, after reiteratin the policy that )ae distortions be first settled 1ol"ntarily by the parties
and e1ent"ally by comp"lsory arbitration, declares that, 7/ny iss!e involving wage distortion shall not be a gro!nd for a stri$e5loc$o!t.>
Moreo1er, the collecti1e barainin areement bet)een the 5MC and the Fnion also prescribes a similar esche)al of stri2es or other similar
or related concerted acti1ities as a mode of resol1in disp"tes or contro1ersies, enerally, said areement clearly statin that settlement of
7all disp"tes, disareements the stip"lated rie1ance proced"re and "ltimately by arbitration. The pro1isions are as follo)s%
75ection 1. Any and all disp"tes, disareements and contro1ersies of any 2ind bet)een the COM;A3B and the F3$O3 and=or the )or2ers
in1ol1in or relatin to )aes, ho"rs of )or2, conditions of employment and=or employer(employee relations arisin d"rin the effecti1ity of
this Areement or any rene)al thereof, shall be settled by arbitration in accordance )ith the proced"re set o"t in this Article. 3o disp"te,
disareement or contro1ersy )hich may be s"bmitted to the rie1ance proced"re in Article $Q shall be presented for arbitration "nless all the
steps of the rie1ance proced"re are e@ha"sted &Article D K Arbitration'.
75ection 1. The F3$O3 arees that there shall be no stri2es, )al2o"ts, stoppae or slo)do)n of )or2, boycotts, secondary boycotts, ref"sal
to handle any merchandise, pic2etin, sit(do)n stri2es of any 2ind, sympathetic or eneral stri2es, or any other interference )ith any of the
operations of the COM;A3B d"rin the terms of this areement &Article D$'.>
The Fnion )as th"s prohibited to declare and hold a stri2e or other)ise enae in non(peacef"l concerted acti1ities for the settlement of its
contro1ersy )ith 5MC in respect of )ae distortions, or for that matter0 any other iss"e 7in1ol1in or relatin to )aes, ho"rs of )or2,
conditions of employment and=or employer(employee relations.> The partial stri2e or concerted ref"sal by the Fnion members to follo) the
fi1e(year(old )or2 sched"le )hich they had therefore been obser1in, resorted to as a means of coercin correction of 7)ae distortions,>
)as therefore forbidden by la) and contract and, on this acco"nt, illeal.
MANILA MANDARIN EMLOYEES UNION v. NATIONAL LABOR RELATIONS COMMISSION, S&$o*( D)v)s)o*, #*( t.& MANILA
MANDARIN HOTEL
G.R. No. 188996 Nov&01&, 19, 1996
"#$ts%
The Manila Mandarin Employees Fnion &hereafter F3$O3', as e@cl"si1e barainin aent of the ran2(and(file employees of the Manila
Mandarin 8otel, $nc. &hereafter MA3?AR$3', filed )ith the 34RC Arbitration !ranch a complaint in its members: behalf to compel
MA3?AR$3 to pay the salary differentials of the indi1id"al employees concerned beca"se of )ae distortions in their salary str"ct"re
alleedly created by the "p)ard re1isions of the minim"m )ae p"rs"ant to 1ario"s ;residential ?ecrees and 6ae Orders, and the fail"re
of MA3?AR$3 to implement the correspondin increases in the basic salary rate of ne)ly(hired employees.
The rele1ant ;residential ?ecrees and 6ae Orders )ere specified by the F3$O3 as follo)s%
1.*
7a. ;? 1.-,, amendin ;? ,2-, mandatin an increase in the stat"tory minim"m )ae by ;..<< spread o"t o1er a period of three years, as
follo)s% ;1.<< startin +"ly 1, 1,7-0 ;1.<< startin May 1, 1,7,0 and ;1.<< startin May 1, 1,-<.
7b. ;? 1*14, pro1idin that )or2ers co1ered by ;? 1.-,, )hether aric"lt"ral or non(aric"lt"ral, sho"ld recei1e an increase of ;2.<< in
their stat"tory minim"m )ae effecti1e April 1, 1,7,, the same representin an acceleration of the remainin increases "nder ;? 1.-,0 and
that all non(aric"lt"ral )or2ers in Metro Manila shall recei1e a minim"m )ae of ;12.<<0
7c. ;? 171., iss"ed on A""st 1-, 1,-<, pro1idin an increase in the minim"m daily )ae rates and for additional allo)ance0 increasin the
minim"m daily )ae rates by ;1.<<, and pro1idin that all pri1ate employers shall pay their employees )ith )aes or salaries not e@ceedin
;1,/<<.<< a month, an additional mandatory li1in allo)ance of ;*<.<< a month for non(aric"lt"ral )or2ers, ;4/.<< for plantation )or2ers
and ;.<.<< a month for aric"lt"ral non(plantation )or2ers0
7d. ;? 17/1, iss"ed on ?ecember 14, 1,-<, increasin the stat"tory daily minim"m )aes by interatin the ;4.<< mandatory allo)ance
"nder ;? /2/ and ;? 112. into the basic pay of all co1ered )or2ers0
7e. 6ae Order 3o. 1, iss"ed on March 2*, 1,-1, increasin the mandatory emerency li1in allo)ance of all )or2ers )ith salaries or )aes
of ;1,/<<.<< a month by ;2.<< a day for non(aric"lt"ral )or2ers, ;1./< a day for aric"lt"ral plantation )or2ers, ;1.<< a day for aric"lt"ral
non(plantation )or2ers, effecti1e March 22, 1,-10
7f. 6ae Order 3o. 2 iss"ed on +"ly *, 1,-. increasin the mandatory basic minim"m )ae and. li1in allo)ance for non(aric"lt"ral and
aric"lt"ral )or2ers in the follo)in manner>
1' 9or non(aric"lt"ral employees, recei1in not more than ;1,-<<.<< monthly, ;1.<< a day as minim"m )ae and ;1./< a day as
cost of li1in allo)ance0
2' 9or plantation aric"lt"ral employees, ;1.<< a day as minim"m )ae and ;<./< a day as cost of li1in allo)ance s"bEect to the
same salary ceilin pro1ided in the immediately precedin section0 and
.' 9or non(plantation aric"lt"ral employees, ;1.<< a day as minim"m )ae0 and
also, pro1idin that effecti1e October 1, 1,-., the li1in allo)ance rates as adE"sted in the precedin section shall be f"rther increased
s"bEect to the same salary ceilin, for non(aric"lt"ral employees, by ;1.<<.
7. 6ae Order 3o. . iss"ed 3o1ember 7, 1,-. increasin the stat"tory minim"m )ae rates for )or2ers in the pri1ate sector by ;1.<< per
day effecti1e 3o1ember 1, 1,-., and also increasin the stat"tory )ae rates by ;1.<< per day, effecti1e ?ecember 1, 1,-.0
7h. 6ae Order 3o. 4 iss"ed on May 1, 1,-4 increasin the stat"tory daily minim"m )aes, after interatin the mandatory li1in allo)ance
"nder ;?s 1*14, 1*.4, 1*7- and 171. into the basic pay of all co1ered employees, effecti1e May 1, 1,-40 K after the interation, the
minim"m daily )ae rate )as increased by ;11.<< for non(aric"lt"ral )or2ers.
7i. 6ae Order 3o. / iss"ed on +"ne 11, 1,-4 increasin the stat"tory daily minim"m )ae rates and li1in allo)ances of )or2ers in the
pri1ate sector by ;..<< effecti1e +"ne 1*, 1,-4 K the minim"m daily )ae rates became ;./.<< for Metro Manila and ;.4.<< for o"tside
Metro Manila0 and
7E. 6ae order 3o. *, effecti1e 3o1ember 1, 1,-4, increasin the stat"tory minim"m )ae rate by ;2.<< per day.>
Issu&%
)hether or not a )ae distortion e@ists as a conseH"ence of the rant of a )ae increase to certain employees
H&'(%
3o. The clear mandate of those iss"ances )as merely to increase the pre1ailin minim"m )aes of partic"lar employee ro"ps. There )ere
no across(the(board increases to all employees0 increases )ere reH"ired only as reards those specified therein. $t )as therefore incorrect
for the F3$O3 to claim that all its members became a"tomatically entitled to across(the(board increases "pon the effecti1ity of the ?ecrees
and 6ae Orders in H"estion. And e1en if there )ere )ae distortions, )hich is not the case here, the appropriate remedy there"nder
prescribed is for the employer and the "nion to 7neotiate> to correct them0 or, if the disp"te be not thereby resol1ed, to thresh o"t the
contro1ersy thro"h the rie1ance proced"re in the collecti1e barainin areement, or thro"h conciliation or arbitration.
The F3$O3:5 $nternal Dice(;resident that there )ere more or less 1. persons fo"nd to ha1e s"ffered )ae distortion, and the F3$O3
pointed o"t that )hile these thirteen employees occ"pied similar positions, they )ere recei1in different rates of salary.
1.7
Respondent Commission ho)e1er fo"nd that as e@plained by pri1ate respondents, s"ch disparity )as d"e simply to the fact that the
employees mentioned had been hired on different dates and )ere th"s recei1in different salaries0 or that an employee )as hired initially at
a position le1el carryin a hirin rate hiher than the others0 or that an employee failed to meet the c"t(off date in the rant of yearly C!A
increase0 or that the "nion did not et the correct data on salaries.
The Co"rt arees that the claimed )ae distortion )as act"ally a res"lt of the F3$O3:5 fail"re to appreciate 1ario"s circ"mstances relatin
to the employment of the thirteen employees. 9or instance, )hile some of these employees occ"pied the same or similar positions, they
)ere hired by the 8otel on different dates and at different salaries.
Respondent Commission correctly concl"ded that these did not represent cases of )ae distortion contemplated by the la) &Article 124,
4abor Code, as amended', i.e., a 7sit"ation )here an increase in prescribed )ae rates res"lts in the elimination or se1ere contraction of
intentional H"antitati1e differences in )ae or salary rates bet)een and amon employees ro"ps in an establishment as to effecti1ely
obliterate the distinctions embodied in s"ch )ae str"ct"re based on s2ills, lenth of ser1ice, or other loical basis of differentiation.>
9inally, the matter of )ae distortion, act"al or imp"ted "nder the 1ario"s iss"ances "p to 6ae Order 3o. *, had been settled by the parties
thro"h the e@ec"tion of a Compromise Areement.
The 4abor Code reconiCes the concl"si1eness of compromises as a means to settle and end labor disp"tes. Article 227 pro1ides that 7any
compromise settlement, incl"din those in1ol1in labor standard la)s, 1ol"ntarily areed "pon by the parties )ith the assistance of the
!"rea" or the reional office of the ?epartment of 4abor, shall be final and bindin "pon the parties. The 3ational 4abor Relations
Commission or any co"rt shall not ass"me E"risdiction o1er iss"es in1ol1ed therein e@cept in case of non(compliance thereof or if there is
prima facie e1idence that the settlement )as obtained thro"h fra"d, misrepresentation or coercion.>
Th"s, and aain ass"min arg!endo the e@istence of a )ae distortion, this )as corrected "nder the 7f"lly implemented> Compromise
Areement0 2/ and s"ch correction ha1in been e@plicitly ac2no)leded by the F3$O3, it is no) estopped from claimin that a distortion still
s"bsists. $n the same manner, )hen the F3$O3 entered into a ne) collecti1e barainin areement )ith MA3?AR$3, pro1idin for )ae
increases in 1,-7, it is deemed to ha1e thereby settled any remainin H"estion of )ae distortion, since the s"bEect of )aes and )ae
distortions )ere plainly and "na1oidably an economic iss"e and the proper s"bEect of collecti1e barainin.
RUBAN:ERS ASSOCIATION v. RUDENTIAL BAN: < TRUST COMANY
G.R. No. 1314+5 !#*u#,2 49, 1999
"#$ts%
The Reional Tripartite 6aes and ;rod"cti1ity !oard of Reion D iss"ed 6ae Order 3o. R! </(<. )hich pro1ided for a CO4A to )or2ers
in the pri1ate sector )ho haIdJ rendered ser1ice for at least . months before its effecti1ity, and for the same period ItJhereafter, in the
follo)in cateories% ;17./< in the cities of 3aa and 4easpi0 ;1/./< in the m"nicipalities of Tabaco, ?araa, ;ili and the city of $ria0 and
;1<.<< for all other areas in the !icol Reion.
5"bseH"ently, the Reional Tripartite 6aes and ;rod"cti1ity !oard of Reion D$$ iss"ed 6ae Order 3o. R! D$$(<., )hich directed the
interation of the CO4A mandated p"rs"ant to 6ae Order 3o. RO D$$(<2(A into the basic pay of all )or2ers. $t also established an increase
in the minim"m )ae rates for all )or2ers and employees in the pri1ate sector as follo)s% by ;1<.<< in the cities of Ceb", Manda"e and
4ap"lap"0 ;/.<< in the m"nicipalities of Compostela, 4iloan, Consolacion, Cordo1a, Talisay, Minlanilla, 3aa and the cities of ?a1ao,
Toledo, ?"ma"ete, !ais, Canlaon and Tabilaran.
The petitioner then ranted a CO4A of ;17./< to its employees at its 3aa !ranch, the only branch co1ered by 6ae Order 3o. R! /(<.,
and interated the ;1/<.<< per month CO4A into the basic pay of its ran2(and(file employees at its Ceb", Mabolo and ;. del Rosario
branches, the branches co1ered by 6ae Order 3o. R! D$$(<..
Issu&%
)hether or not a )ae distortion res"lted from respondent:s implementation of the aforecited 6ae Orders
H&'(%
3o. The stat"tory definition of )ae distortion is fo"nd in Article 124 of the 4abor Code, as amended by Rep"blic Act 3o. *727, )hich reads%
7Art. 124. 5tandards=Criteria for Minim"m 6ae 9i@in K
1.-
7As "sed herein, a )ae distortion shall mean a sit"ation )here an increase in prescribed )ae res"lts in the elimination of se1ere
contraction of intentional H"antitati1e differences in )ae or salary rates bet)een and amon employee ro"ps in an establishment as to
effecti1ely obliterate the distinctions embodied in s"ch )ae str"ct"re based on s2ills, lenth of ser1ice, or other loical bases of
differentiation.>
6ae distortion pres"pposes a classification of positions and ran2in of these positions at 1ario"s le1els. One 1is"aliCes a hierarchy of
positions )ith correspondin ran2s basically in terms of )aes and other emol"ments. 6here a sinificant chane occ"rs at the lo)est le1el
of positions in terms of basic )ae )itho"t a correspondin chane in the other le1el in the hierarchy of positions, neatin as a res"lt
thereof the distinction bet)een one le1el of position from the ne@t hiher le1el, and res"ltin in a parity bet)een the lo)est le1el and the ne@t
hiher le1el or ran2, bet)een ne) entrants and old hires, there e@ists a )ae distortion. The concept of a )ae distortion ass"mes an
e@istin ro"pin or classification of employees )hich establishes distinctions amon s"ch employees on some rele1ant or leitimate basis.
This classification is reflected in a differin )ae rate for each of the e@istin classes of employees.
6ae distortion in1ol1es fo"r elements%
1. An e@istin hierarchy of positions )ith correspondin salary rates0
2. A sinificant chane in the salary rate of a lo)er pay class )itho"t a concomitant increase in the salary rate of a hiher one0
.. The elimination of the distinction bet)een the t)o le1els0
4. The e@istence of the distortion in the same reion of the co"ntry.
$n the present case, it is clear that no )ae distortion res"lted )hen respondent implemented the s"bEect 6ae Orders in the co1ered
branches. $n the said branches, there )as an increase in the salary rates of all pay classes. 9"rthermore, the hierarchy of positions based on
s2ills, lenth of ser1ice and other loical bases of differentiation )as preser1ed. $n other )ords, the H"antitati1e difference in compensation
bet)een different pay classes remained the same in all branches in the affected reion. ;"t differently, the distinction bet)een ;ay Class 1
and ;ay Class 2, for e@ample, )as not eliminated as a res"lt of the implementation of the t)o 6ae Orders in the said reion. 8ence, it
cannot be said that there )as a )ae distortion.
;etitioner:s claim of )ae distortion m"st also be denied for one other reason. The difference in )aes bet)een employees in the same pay
scale in different reions is not the mischief so"ht to be banished by the la). $n fact, Rep"blic Act 3o. *727 &the 6ae RationaliCation Act',
reconiCes 7e@istin reional disparities in the cost of li1in.> 5ection 2 of said la) pro1ides%
75ec 2. $t is hereby declared the policy of the 5tate to rationaliCe the fi@in of minim"m )aes and to promote prod"cti1ity(impro1ement and
ain(sharin meas"res to ens"re a decent standard of li1in for the )or2ers and their families0 to "arantee the rihts of labor to its E"st
share in the fr"its of prod"ction0 to enhance employment eneration in the co"ntryside thro"h ind"stry dispersal0 and to allo) b"siness and
ind"stry reasonable ret"rns on in1estment, e@pansion and ro)th.
7The 5tate shall promote collecti1e barainin as the primary mode of settlin )aes and other terms and conditions of employment0 and
)hene1er necessary, the minim"m )ae rates shall be adE"sted in a fair and eH"itable manner, considerin e@istin reional disparities in
the cost of li1in and other socio(economic factors and the national economic and social de1elopment plans.>
RA *727 also amended Article 124 of the 4abor Code, th"s%
7Art. 124. 5tandards=Criteria for Minim"m 6ae 9i@in. K The reional minim"m )aes to be established by the Reional !oard shall be as
nearly adeH"ate as is economically feasible to maintain the minim"m standards of li1in necessary for the health, efficiency and eneral
)ell(bein of the employees )ithin the frame )or2 of the national economic and social de1elopment proram. $n the determination of s"ch
reional minim"m )aes, the Reional !oard shall, amon other rele1ant factors, consider the follo)in%
a. The demand for li1in )aes0
b. 6ae adE"stment vis"a"vis the cons"mer price inde@0
c. The cost of li1in and chanes or increases therein0
d. The needs of )or2ers and their families0
e. The need to ind"ce ind"stries to in1est in the co"ntryside0
f. $mpro1ements in standards of li1in0
. The pre1ailin )ae le1els0
h. 9air ret"rn of the capital in1ested and capacity to pay of employers0
i. Effects on employment eneration and family income0 and
E. The eH"itable distrib"tion of income and )ealth alon the imperati1es of social and economic de1elopment.
1.,
9rom the abo1e(H"oted rationale of the la), as )ell as the criteria en"merated, a disparity in )aes bet)een employees )ith similar
positions in different reions is necessarily e@pected. $n insistin that the employees of the same pay class in different reions sho"ld recei1e
the same compensation, petitioner has apparently mis"nderstood both the meanin of wage distortion and the intent of the la) to reionaliCe
)ae rates.
Daryin in each reion of the co"ntry are controllin factors s"ch as the cost of li1in0 s"pply and demand of basic oods, ser1ices and
necessities0 and the p"rchasin po)er of the peso. Other considerations "nderscore the necessity of the la). 6aes in some areas may be
increased in order to pre1ent miration to the 3ational Capital Reion and, hence, to deconest the metropolis.
AEF MINING COMANY, INC. v. NATIONAL LABOR RELATIONS COMMISSION #*( SANDIGAN NG MANGGAGA@ANG ILIINO,
,&-,&s&*t&( 12 RANUL"O EDRERA, ,&s)(&*t
G.R. No. 86488 "&1,u#,2 49, 1994
"#$ts%
Respondent Sandigan ng 'anggagawang +ilipino &7Sandigan>' filed before the 4abor Arbiter a claim for Emerency Cost of 4i1in Allo)ance
&7ECO4A>' differential aainst petitioner Ape@ Minin Company, $nc. &7Ape@>' allein that Ape@ had paid its employees in its Maco, ?a1ao
del 3orte operations, bet)een 1 3o1ember 1,/4 "ntil 2- March 1,-/, an areate c"m"lati1e daily ECO4A of only ;1/.<< )hich )as
;2.<< belo) the c"m"lati1e minim"m ECO4A of ;17.<< &for non(aric"lt"ral )or2ers' established "nder 6ae Order 3o. *0 and that
petitioner had belatedly ranted the additional ;2.<< startin on 2, March 1,-/ only.
Ape@ denied ha1in failed to comply )ith 6ae Order 3o. *, contendin that it had, by pre1io"s areement, incorporated the alleed ;2.<<
deficiency into the basic salary of its employees. $n t"rn, Sandigan denies that s"ch an areement had been made, b"t conceded that a
;2.<< increase in basic salary had been made by Ape@, in compliance )ith a pro1ision of the Collecti1e !arainin Areement &7C!A>' then
in force bet)een Ape@ and Sandigan, and not in f"lfillment of Ape@:s obliation "nder 6ae Order 3o. *. 5andigan pointed o"t that 6ae
Order 3o. * had ta2en effect on 1 3o1ember 1,-4, se1eral months after the ;2.<< had been interated by Ape@ into the basic salary of its
employees.
$n a s"pplemental memorand"m, Ape@ reiterated that the daily salary increase of ;2.<< pro1ided for in the then c"rrent C!A, to ta2e effect
on 1 9ebr"ary 1,-4, had been s"bseH"ently credited as partial compliance )ith the ;/.<< increment mandated by 6ae Order *o. D &)hich
too2 effect on 1* +"ne 1,-4'. Th"s, Ape@, in compliance )ith 6ae Order 3o. /, accordinly increased the daily ECO4A of its )or2ers by
;..<< only &from ;,.<< to ;12.<<', or ;2.<< less than the leislated ECO4A increase of ;/.<< &)hich )o"ld ha1e increased the total daily
ECO4A from ;,.<< to ;14.<<'. ;etitioner Ape@ added that the interation of ;2.<< allo)ance into the basic salary pro1ided for in the C!A
had been conformed to by Dicente Arnieo, 3ational ;resident of Sandigan, and that in any e1ent, 6ae Order 3o. / had itself a"thoriCed
s"ch interation. 5ince petitioner Ape@ had interated ;2.<< &o"t of the ;/.<<' ECO4A pro1ided for in 6ae Order 3o. /, )hen Ape@
complied )ith the additional ECO4A increase mandated by 6ae Order 3o. *, the res"ltin fi"re for the total or c"m"lati1e ECO4A paid by
Ape@ appeared to be only ;1/.<<, "ntil one too2 into acco"nt the ;2.<< &o"t of the ;/.<< ECO4A increase mandated by 6ae Order 3o. /'
interated into the employees: basic salary. 9inally, petitioner Ape@ e@plained, it had ranted members of Sandigan an additional ;2.<<
effecti1e 2, March 1,-/ not as an admission that it had pre1io"sly failed to pay somethin leally d"e, b"t only as a meas"re to diff"se the
tense atmosphere bet)een manaement and the "nion created by the mis"nderstandin o1er the ostensible &as distin"ished from the real'
total increase paid by petitioner Ape@ to its employees.
Issu&%
)hether or not Ape@ complied )ith the increases mandated by 6ae Orders 3os. / and *
Co,o''#,2 )ssu&%
)hether or not the ;2.<< per day increase in basic salary effecti1e startin on 1 9ebr"ary 1,-4 ranted by petitioner Ape@ p"rs"ant to the
C!A, )as la)f"lly credited to)ards compliance )ith increases in ECO4A reH"ired "nder 6ae Orders 3os. / and *
H&'(%
Bes. The ;2.<< increase interated in the basic salary of Ape@:s, employees, effecti1e on and after 1 9ebr"ary 1,-4, )as concededly i1en
"nder the pro1isions of the C!A. 5ection 4 of Article D$ of the C!A pro1ided as follo)s%
7$t is "nderstood that the rant of these eneral increases shall be as part of any increase in basic pay and=or allo)ance that may hereafter
be decreed or imposed by la).>
14<
!oth 6ae Order 3o. / and 6ae Order 3o. * e@pressly allo)ed the creditin of increases in )aes or allo)ances ranted "nder collecti1e
barainin areements to)ards compliance )ith increases in ECO4A reH"irements prescribed by those 6ae Orders. 5ection 7 o f 6ae
Order 3o. / pro1ided as follo)s%
7/ll increases in wages and5or allowances granted by employers between .ebr!ary 0, 012= and the effectivity of this order I0E G!ne 012=J
shall be credited as compliance )ith the minim"m wage and allowance ad-!stments prescribed herein . . .
75"ch increases shall not incl"de anni1ersary )ae increases pro1ided in collecti1e barainin areements "nless the areements e@pressly
pro1ide other)ise.>
5ection 4 of 6ae Order 3o. * had 1ery similar lan"ae%
7/ll increases in wages and5or allowances granted by employers between G!ne 03, 012= and the effectivity of this order I*ovember 0, 012=J
shall be credited as compliance )ith the minim"m wage and allowance ad-!stments prescribed herein, pro1ided that )here the increases are
less than the applicable amo"nt pro1ided in this order, the employer shall pay the difference. 5"ch increases shall not incl"de anni1ersary
)ae increases pro1ided in collecti1e barainin areements "nless the areements e@pressly pro1ide other)ise.
7This 5ection shall not apply to merit )ae increases and those res"ltin from the re"lariCation or promotion of employees.> &Emphasis and
brac2ets s"pplied'
The creditability pro1isions in 6ae Orders 3os. / and * &as )ell as the parallel pro1isions in 6ae Orders 3os. 2, . and 4' are ro"nded in
an important p"blic policy. That p"blic policy may be seen to be the enco!ragement of employers to rant )ae and allo)ance increases to
their employees higher than the minim!m rates of increases prescribed by stat!te or administrative reg!lation.
Sandigan, ho)e1er, ar"es that to consider the ;2.<< increase in basic salary effecti1e 1 9ebr"ary 1,-4 pro1ided by the C!A as compliance
)ith the reH"irements of 6ae Orders 3os. / and *, )o"ld be to 1iolate Article 1<< of the 4abor Code as )ell as 5ection * of the R"les
$mplementin 6ae Order 3o. *. These pro1isions read, respecti1ely%
7Art. 1<<. +rohibition against elimination or dimin!tion of benefits K 3othin in &!oo2 Three K Conditions of Employment' shall be
constr"ed to eliminate or in any )ay diminish s!pplements, or other employee benefits being en-oyed at the time of prom!lgation of this
#ode.>
75ec. *. *on"dimin!tion of benefits. K The stat"tory minim"m )ae rates shall be e@cl"si1e of )hate1er s!pplements and other benefits the
)or2ers are en-oying witho!t cost at the time of the effectivity of this rder.>
The prohibition aainst elimination or dimin"tion of benefits set o"t in Article 1<< of the 4abor Code is specifically concerned )ith benefits
already enEoyed at the time of the prom"lation of the 4abor Code. Article 1<< does not, in other )ords, p"rport to apply to sit"ations arisin
after the prom"lation date of the 4abor Code. 5ection * of the R"les $mplementin 6ae Order 3o. * relates to 7s"pplements and other
benefits> )hich employees are already 7enEoyin witho!t cost at the time of the effecti1ity of 6ae Order 3o. *.> 5"ch benefits )hich
employees are already enEoyin 7)itho"t cost> co"ld not, "nder 5ection *, s"ddenly be ascribed monetary 1al"e so as to offset or diminish
increases in the minim"m )ae rates prescribed by stat"te. Clearly, once more, 5ection * does not relate to the problem at hand.
Sandigan f"rther contends that the 1 9ebr"ary 1,-4 ;2.<< increase in basic salary )as act"ally an 7anni1ersary )ae increase,> and
therefore not creditable "nder 5ection 7 of 6ae Order 3o. / and "nder 5ection 4 of 6ae Order 3o. *.
The ;2.<< increase )as i1en by petitioner Ape@ "nder 5ection ., R"le D$ of the C!A )hich reads as follo)s%
75ec. .. The COM;A3B arees to rant general wage increases to all employees )ithin barainin "nit as follo)s%
a' T)o ;esos &;2.<<' general increase per day "pon the effecti1ity of this Areement &9ebr"ary 1, 1,-4'0
b' One ;eso and 9ifty Centa1os &;1./<' general increase per day effective on the first anniversary date of this /greement &9ebr"ary
1, 1,-/'0
c' One ;eso and 9ifty Centa1os &;1./<' general increase per day effective on the second anniversary date of this /greement
&9ebr"ary 1, 1,-*'.
The ;2.<< increase effecti1e on 1 9ebr"ary 1,-4 )as distin"ishable from the 2 increases of ;1./< each, the first bein effecti1e on the first
anni1ersary date of the C!A &1 9ebr"ary 1,-/' and the second bein effecti1e on the second anni1ersary date &1 9ebr"ary 1,-*'. $n other
)ords, the 2 increases of 1./< each, one bein effecti1e on 1 9ebr"ary 1,-/ and the second effecti1e on 1 9ebr"ary 1,-*, )ere precisely
141
the non(creditable 7anni1ersary )ae increases.> E1en if it be ass"med, ho)e1er, that the 1 9ebr"ary 1,-4 ;2.<< increase )ere rearded
&improperly' as an 7anni1ersary )ae increase> still that ;2.<< increase )o"ld be creditable to)ards the stat"torily mandated increases. 9or
6ae Orders 3os. / and * themsel1es allo)ed creditin of 7anni1ersary )ae increases> stip"lated in a C!A to)ards stat"tory increases, if
the C!A itself &as here' e@pressly allo)ed s"ch creditin. 5ection 4, Article D$ of the C!A, H"oted earlier, a"thoriCed the creditin of 7eneral
increases> to)ards stat"torily mandated increases in basic pay or allo)ance. At the same time, 5ection . of Article D$ of the C!A, H"oted
abo1e, described the 2 anni1ersary )ae increases of ;1./< each, and the one(time ;2.<< increase, as each constit"tin a 7eneral
increase.>
$n respect of 6ae Order 3o. /, Ape@ credited the ;2.<< increase in basic salary, effecti1e 1 9ebr"ary 1,-4, to)ards compliance )ith the
stat"torily prescribed ECO4A increase of ;/.<<. Th"s, the apparent c"m"lated increase in E#L/, as sho)n in Ape@:s boo2s, )as only
;12.<<. 8o)e1er, the act"al increases K the composite of basic salary and E#L/ K areated ;14.<<. 5ince s"ch creditin )as
e@pressly allo)ed "nder 6ae Order 3o. /, it follo)s that petitioner Ape@ )as in compliance )ith 6ae Order 3o. /. 3o differential )as
therefore d"e there"nder.
6hen 6ae Order 3o. * )as prom"lated, it prescribed an increase of ;..<< in ECO4A. Ape@ paid this mandatory increase and
denominated all of it as ECO4A. Th"s, the apparent c"m"lated increase )as ;1/.<<. 5ince, ho)e1er, Ape@ had pre1io"sly increased the
basic salary by ;2.<< effecti1e 1 9ebr"ary 1,-4, the aggregate act!al increase Bin basic salary pl!s E#L/C )as +03.>>, the same total or
c"m"lated increase contemplated by 6ae Orders 3os. / and *. Th"s, aain, Ape@ )as act"ally in compliance )ith the reH"irements of
6ae Order 3o. *, )ith the res"lt that no differential )as act"ally d"e from it.
$t remains only to note that 5ection 7 of 6ae Order 3o. / and section 4 of 6ae Order 3o. * e@pressly a"thoriCed the creditin of all the
increases 7in )aes> or 7allo)ances.> Th"s, the fact that Ape@ had denominated the ;2.<< increase effecti1e 1 9ebr"ary 1,-4, as an
increase in basic salary, rather than in ECO4A, made no leal difference so far as concerns the creditability of s"ch increase. $ndeed,
interation of the ;2.<< into the basic salary of the employees )as more beneficial to them than rantin the ;2.<< as part of their ECO4A%
the interation increased the base )ae for p"rposes of comp"tation of s"ch items as o1ertime and premi"m pay, frine benefits and
maternity pay. $n fact, the $mplementin R"les of 6ae Order 3o. /, and 6ae Order 3o. * itself, e@pressly a"thoriCed increases in basic
salary in lie" of increases in ECO4A, pro1ided the amo"nts thereof )ere not less than the amo"nts reH"ired by the 6ae Orders.
Ape@ ha1in la)f"lly credited the ;2.<< increase in basic salary to)ards compliance of the increase in ECO4A prescribed by 6ae Orders
3os. / and *, it follo)s that respondent Sandigan:s claim to a differential in ECO4A lac2s basis in fact and in la).
MEYCAUAYAN COLLEGE v. HONORABLE "RAN:LIN M. DRILON, )* .)s $#-#$)t2 #s S&$,&t#,2 o/ t.& D&-#,t0&*t o/ L#1o, #*(
E0-'o20&*t #*( MEYCAUAYAN COLLEGE "ACULTY AND ERSONNEL ASSOCIATION ?MC"AA
G.R. No. 811++ M#2 5, 1998
"#$ts%
The board of tr"stees of petitioner reconiCed the Meyca"ayan Collee 9ac"lty and ;ersonnel Association as the employees: "nion in the
Meyca"ayan Collee.
;rior to said reconition, petitioner and the "nion, then headed by Mrs. Teresita 4im, entered into a collecti1e barainin areement for 1,-.(
1,-*.
6hen the collecti1e barainin areement )as entered into, the follo)in presidential decrees )ere in effect% &a' ;.? 3o. 1.-, dated May
2,, 1,7- adE"stin the e@istin stat"tory minim"m )aes0 &b' ;.?. 3o. 171. dated A""st 1-, 1,-< pro1idin for an increase in the minim"m
daily )ae rates and for additional mandatory li1in allo)ances, and &c' ;.?. 3o. 17/1 dated May 14, 1,-< increasin the stat"tory daily
minim"m )ae at all le1els by ;4.<< after interatin the mandatory emerency li1in allo)ance "nder ;.?. 3os. /2/ and 112. into the
basic pay of all co1ered )or2ers. 6ae Order 3o. 2 increasin the mandatory basic minim"m )ae and li1in allo)ance )as also iss"ed on
+"ly *, 1,-. E"st before the collecti1e barainin areement herein in1ol1ed )as entered into.
?"rin the lifetime of the collecti1e barainin areement, the follo)in )ere iss"ed% &a' 6ae Order 3o. . dated 3o1ember 7, 1,-.
increasin the minim"m daily li1in allo)ance in the pri1ate sector0 &b' 6ae Order 3o. 4 dated May 1, 1,-4 interatin as of said date the
emerency cost of li1in allo)ances "nder ;.?. 3os. 1*14, 1*.4 and 171. into the basic pay of co1ered )or2ers in the pri1ate sector0 &c'
6ae Order 3o. / dated +"ne 11, 1,-4 increasin the cost of li1in allo)ance of )or2ers in the pri1ate sector )hose basic salary or )ae is
not more than ;1,-<< a month0 and &d' 6ae Order 3o. * dated October 2*, 1,-4 increasin the daily li1in allo)ances.
The "nion admits herein that its members )ere paid all these increases in pay mandated by la). $t appears, ho)e1er, that in 1,-7, shortly
after "nion president Mrs. Teresita D. 4im, )ho held the manaerial position of reistrar of the collee, had t"rned o1er the presidency of the
142
"nion to Mrs. 9e Dillarico, the latter "nintentionally ot a copy of the collecti1e barainin areement and disco1ered that Article $D thereof
had not been implemented by the petitioner.
Issu&%
)hether increases in employees: salaries res"ltin from the implementation of presidential decrees and )ae orders, )hich are o1er and
abo1e the areed salary scale contracted for bet)een the employer and the employees in a collecti1e barainin areement, precl"de the
employees from claimin the difference bet)een their old salaries and those pro1ided for "nder said salary scale
3o. A collecti1e barainin areement is a contract"al obliation. $t is distinct from an obliation imposed by la). The terms and conditions of
a collecti1e barainin contract constit"te the la) bet)een the parties.
Th"s, ha1in entered into an areement )ith its employees, an employer may not be allo)ed to renee on its obliation "nder a collecti1e
barainin areement sho"ld, at the same time, the la) rant the employees the same or better terms and conditions of employment.
Employee benefits deri1ed from la) are e@cl"si1e of benefits arri1ed at thro"h neotiation and areement "nless other)ise pro1ided by the
areement itself or by la).
BATONG BUHAY GOLD MINES, INC. v. DELA SERNA
G.R. No. 86963. August 6, 1999
URISIMA, !.
"#$ts%
Elsie Rosalinda Ty, Antonia Mendelebar, Ma. Concepcion O. Reyes and 1,247 others filed a complaint aainst !aton !"hay #old Mines,
$nc. for% &1' non(payment of their basic pay and allo)ances for the period of * +"ly 1,-. to / +"ly 1,-40 &2' non(payment of their basic pay
and allo)ances for the period 1* +"ne 1,-4 to / October0 &.' non(payment of their salaries for the period 1* March 1,-* to the present0 &4'
non(payment of their 1.th month pay for 1,-/, 1,-* and 1,-70 &/' non(payment of their 1acation and sic2 lea1e, and the compensatory
lea1es of mine site employees0 and &*' non(payment of the salaries of employees )ho )ere placed on forced lea1es since 3o1ember, 1,-/
to the present, if this is not feasible, the affected employees be a)arded correspondin separation pay.
The 4abor 5tandards and 6elfare Officers s"bmitted their report )ith the follo)in recommendations%
768ERE9ORE, premises considered, this case is hereby s"bmitted )ith the recommendation that an Order of Compliance be iss"ed
directin respondent !aton !"hay #old Mines $nc. to pay complainants: Elsie Rosalina Ty, et al. ;4,-1-,74*.4< by )ay of "npaid salaries of
)or2ers from March 1*, 1,-7 to present, "npaid and ECO4A differentials "nder 6ae Order 3os. 2 and / "npaid 1.th months pay for 1,-/
and 1,-*, and "npaid 1acation=sic2=compensatory lea1e benefits.>
The Reional ?irector adopted the recommendation of the 456Os. The complainants filed an e@(parte motion for the iss"ance of a )rit of
e@ec"tion and appointment of special sheriff. The Reional ?irector iss"ed an Order directin the respondent to p"t "p a cash or s"rety bond
other)ise a )rit of e@ec"tion )ill be iss"ed. 6hen the respondent failed to post a cash=s"rety bond, and "pon motion for the iss"ance of a
)rit of e@ec"tion by the complainants, the Reional ?irector, on 14 5eptember 1,-7 iss"ed a )rit of e@ec"tion appointin Mr. +ohn Espiridion
Ramos as 5pecial 5heriff and directin him to do the follo)in% 7ABo" are to collect the abo1e(stated amo"nt from the respondent and deposit
the same )ith Cashier of this Office for appropriate disposition to herein complainants "nder the s"per1ision of the office of the ?irector.
Other)ise, yo" are to e@ec"te this )rit by attachin the oods and chattels of the respondent not e@empt from e@ec"tion or in case of
ins"fficiency thereof aainst the real or immo1able property of the respondent.>
The 5pecial 5heriff proceeded to e@ec"te the appealed Order on 17 5eptember 1,-7 and seiCed three &.' "nits of ;eterb"ilt tr"c2s and then
sold the same by p"blic a"ction. Dario"s materials and motor 1ehicles )ere also seiCed on different dates and sold at p"blic a"ction by said
sheriff.
The p"blic respondent iss"ed an order "pholdin the E"risdiction of the Reional ?irector and ann"llin all the a"ction sales cond"cted by
5pecial 5heriff +ohn Ramos. The decretal portion of the said Order r"led% 7the p"blic a"ction sales cond"cted by special sheriff +ohn Ramos
p"rs"ant to the )rit of e@ec"tion dated 14 5eptember 1,-7 on 24 5eptember 2, 2<, 2., and 2, October 1,-7 are all hereby declared 3F44
A3? DO$?. 9"rthermore, the personal properties sold and the proceeds thereof )hich ha1e been t"rned o1er to the complainants thr" their
leal co"nsel are hereby ordered ret"rned to the c"stody of the respondent and the b"yers respecti1ely.>
Issu&s%
14.
)hether the Reional ?irector has E"risdiction o1er the complaint filed by the employees of !!#M$
H&'(%
The s"bEect labor standards case )as filed on 9ebr"ary /, 1,-7 at )hich time Article 12- &b' read as follo)s%
7Art. 12- &b' Visitorial and enforcement powers G 7&b' The Minister of 4abor or his d"ly a"thoriCed representati1e shall ha1e the po)er to
order and administer, after d"e notice and hearin, compliance )ith the labor standards pro1isions of this Code based on the findins of
labor re"lation officers or ind"strial safety enineers made in the co"rse of inspection, and to iss"e )rits of e@ec"tion to the appropriate
a"thority for the enforcement of their order, e@cept in cases )here the employer contests the findins of the labor re"lations officers and
raises iss"es )hich cannot be resol1ed )itho"t considerin e1identiary matters that are not 1erifiable in the ordinary co"rse of inspection.>
Article 12- &b' reH"ires the conc"rrence of the follo)in elements in order to di1est the Reional ?irector or his representati1es of
E"risdiction, to )it% &a' that the petitioner &employer' contests the findins of the labor re"lations officer and raises iss"es thereon0 &b' that in
order to resol1e s"ch iss"es, there is a need to e@amine e1identiary matters0 and &c' that s"ch matters are not 1erifiable in the normal co"rse
of inspection.
Raisin lac2 of E"risdiction in a Motion to ?ismiss is not the contest contemplated by the e@ception cla"se "nder Article 12-&b' of the 4abor
Code )hich )o"ld ta2e the case o"t of the E"risdiction of the Reional ?irector and brin it before the 4abor Arbiter.
;etitioner:s ref"sal to allo) the 4abor 5tandards and 6elfare Officers to cond"ct inspection in the premises of their head office in Ma2ati and
the fail"re to file their position paper is eH"i1alent to a )ai1er of its riht to contest the claims of the employees. This Co"rt had occasion to
hold there is no 1iolation of d"e process )here the Reional ?irector merely reH"ired the s"bmission of position papers and resol1ed the
case s"mmarily thereafter.I1.J 9"rthermore, the iss"ance of the compliance order )as )ell )ithin the E"risdiction of the Reional ?irector, as
5ection 14 of the R"les on the ?isposition of 4abor 5tandards Cases pro1ides%
S&$t)o* 1+. "#)'u,& to A--&#, G 6here the employer or the complainant fails or ref"ses to appear d"rin the in1estiation, despite proper
notice, for t)o &2' consec"ti1e hearins )itho"t E"stifiable reasons, the hearin officer may recommend to t.& R&g)o*#' D),&$to, t.&
)ssu#*$& o/ # $o0-')#*$& o,(&, 1#s&( o* t.& &v)(&*$& #t .#*( o, #* o,(&, o/ ()s0)ss#' o/ t.& $o0-'#)*t #s t.& $#s& 0#2 1&.
The po)er then of the Reional ?irector &"nder the present state of la)' to adE"dicate employees money claims is s"bEect to the conc"rrence
of all the reH"isites pro1ided "nder 5ec. 2 of RA *71/, to )it%
&a' the claim is represented by an employer or person employed in domestic or ho"sehold ser1ice, or ho"sehelper0
&b' the claim arises from employer(employee relationship0
&c' the claimant does not see2 reinstatement0 and
&d' the areate money claim of each employee or ho"sehelper does not e@ceed ;/,<<<.
The r"lin in Servandos Inc. vs. Sec. of Labor and Employment and the Regional Director, Region VI, DLE, in effect, e@panded the
E"risdictional limitation pro1ided for by RA *71/ as to incl"de labor standards cases "nder Article 12- &b' and no loner limited to ordinary
monetary claims "nder Article 12,.
Rep"blic Act 77.<, the la) o1ernin the 1isitorial and enforcement po)ers of the 4abor 5ecretary and his representati1es reads%
7Article 12- &b' Not3)t.st#*()*g t.& -,ov)s)o*s o/ A,t)$'&s 149 #*( 415 o/ t.)s Co(& to the contrary, and in cases )here the relationship
of employer(employee still e@ists, the 5ecretary of 4abor and Employment or his d"ly a"thoriCed representati1es shall ha1e the po)er to
iss"e compliance orders to i1e effect to the labor standards pro1isions of this Code and other labor leislation based on the findins of labor
employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The 5ecretary or his d"ly a"thoriCed
representati1e shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of their orders, e@cept in cases )here the
employer contests the findins of the labor employment and enforcement officer and raises iss"es s"pported by doc"mentary proofs )hich
)ere not considered in the co"rse of inspection.
LAGUNA CAT6 NET@OR:, INC. v. HON. ALEF E. MARAAN, R&g)o*#' D),&$to,, R&g)o* I6, D&-t. o/ L#1o, #*( E0-'o20&*t ?DOLEA,
ENRICO SAGMIT, A$t)*g D&-ut2 S.&,)//, DOLE R&g)o* I6, EDRO IGNACIO, DIOMEDES CASTRO, "E ESERAN;A CANDILLA,
RUBEN LAMINA, !R., !OEL ERSIUNCULA, AL6INO RUDENTE, !OEL RAYMUNDO, REGIE ROCERO, LINDA RODRIGUE;, !OHN
SELUDO, ALBERTO REYES, #*( ANACLETA 6ALOIS
G.R. No. 139+94 Nov&01&, 19, 4884
144
"#$ts%
;ri1ate respondents filed their separate complaints p"rs"ant to Article 12- of the 4abor Code, as amended by Rep"blic Act 3o. 77.<, )hich
pro1ides%
7Article 12-. Disitorial and enforcement po)ers. ( &a' The 5ecretary of 4abor or his d"ly a"thoriCed representati1es, incl"din labor re"lation
officers, shall ha1e access to employer:s records and premises at any time of the day or niht )hene1er )or2 is bein "nderta2en therein,
and the riht to copy therefrom, to H"estion any employee and in1estiate any fact, condition or matter )hich may be necessary to determine
1iolations or )hich may aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant
thereto.
7&b' @ @ @
latter. $n case said order in1ol1es a monetary a)ard, an appeal by the employer may be perfected only "pon the postin of a cash or s"rety
?O4E Reion $D cond"cted an inspection )ithin the premises of 4a"na CATD and fo"nd that the latter 1iolated the la)s on payment of
)aes and other benefits. There"pon, ?O4E Reion $D reH"ested 4a"na CATD to correct its 1iolations b"t the latter ref"sed, promptin the
Reional ?irector to set the case for s"mmary in1estiation. Thereafter, he iss"ed an Order dated A""st 1,, 1,,-
4
directin 4a"na CATD
to pay the concerned employees the s"m of ;2*1,<<,.1, representin their "npaid claims, )ithin 1< days from notice, and to s"bmit proof of
payment )ithin the same period.
$n 1ie) of 4a"na CATD:s fail"re to comply )ith the Order directin it to pay the "npaid claims of its employees, the ?O4E Reional ?irector
iss"ed a )rit of e@ec"tion on +an"ary 2,, 1,,, orderin the sheriff to collect in cash from 4a"na CATD the amo"nt specified in the )rit or, in
lie" thereof, to attach its oods and chattels or those of its o)ner, ?r. !ernardino !ailon.
4a"na CATD and ?r. !ailon, in his personal capacity, filed a motion to H"ash the )rit of e@ec"tion, notice of le1y and sale on e@ec"tion and
arnishment of ban2 deposits, b"t the motion )as denied by the RTC. $nstead of appealin to the 5ecretary of 4abor, 4a"na CATD filed
)ith the Co"rt of Appeals a motion for e@tension of time to file a petition for re1ie). The Co"rt of Appeals iss"ed a Resol"tion denyin
4a"na CATD:s motion for e@tension and dismissin the case.
Issu&%
)hether the Co"rt of Appeals erred in denyin its motion for e@tension and in dismissin the case
H&'(%
3o. The Co"rt of Appeals )as correct in holdin that petitioner failed to e@ha"st all administrati1e remedies. As pro1ided "nder Article 12- of
the 4abor Code, as amended, earlier H"oted, an order iss"ed by the d"ly a"thoriCed representati1e of the 5ecretary of 4abor may be
appealed to the latter. Th"s, petitioner sho"ld ha1e first appealed to the 5ecretary of 4abor instead of filin )ith the Co"rt of Appeals a
motion for e@tension of time to file a petition for re1ie).
CIRINEO BO@LING LA;A, INC. v. GERRY SENSING, BELEN "ERNANDE;, MIRASOL DIA;, MARGARITA ABRIL, DARIO BENITE;,
MANUEL BENITE;, RONILLO TANDOC, EDGAR DI;ON, !O6ELYN GUINTO, :AREN REMORAN, !ENI""ER RINGOR, DEARTMENT
O" LABOR AND EMLOYMENT #*( COURT o/ AEALS
G.R. No. 1+6954 !#*u#,2 1+, 4889
"#$ts%
Eliio ;aolo, +r., an employee of petitioner, filed a letter complaint )ith the ?O4E, ?a"pan ?istrict Office, ?a"pan City, reH"estin for the
inspection=in1estiation of petitioner for 1ario"s labor la) 1iolations li2e "nderpayment of )aes, 1.th month pay, non(payment of rest day
pay, o1ertime pay, holiday pay and ser1ice incenti1e lea1e pay. ;"rs"ant to the 1isitorial and enforcement po)ers of the 5ecretary of 4abor
and Employment, his d"ly a"thoriCed representati1e "nder Article 12- of the 4abor Code, as amended, cond"cted inspections on petitioner:s
establishment the follo)in day. $n his inspection report, a 4abor and Employment Officer fo"nd that petitioner has thirteen/employees and
had committed the follo)in 1iolations% "nderpayment of minim"m )ae, 1.th month pay, holiday premi"ms, o1ertime premi"ms, and non(
payment of rest day.
4"isito Cirineo and a certain 9e Cirineo Octa1iano, o)ner of EsperanCa 5eafoods Pitchenette stationed in petitioner:s establishment, )rote
?O4E a letter reH"estin that the case be endorsed to the 3ational 4abor Relations Commission since the resol"tion of the case reH"ired
14/
e1identiary matters not disclosed or 1erified in the normal co"rse of inspection. They also s"bmitted doc"ments to sho) that petitioner and
EsperanCa 5eafoods Pitchenette are separate and distinct b"siness entities and that some of the employees(a)ardees are act"ally
employees of the EsperanCa 5eafoods Pitchenette.
?O4E iss"ed its Order- statin amon others%
7Records sho) that respondent, 4"isito Cirineo and his representati1e appeared before this Office d"rin the s"mmary in1estiation of this
instant case b"t they ne1er once mentioned the iss"e of separate E"ridical personalities. R&s-o*(&*t .#( #'3#2s 1&&* 1&*t o* s&tt')*g
t.& ,&s-&$t)v& $'#)0s o/ #'' t.),t&&* ?13A $o*$&,*&( &0-'o2&&s. I* t.& -,o$&ss, .o3&v&,, .& #$>*o3'&(g&( 1&)*g t.&), &0-'o2&,. H&
$#**ot #t t.)s Ou*$tu,& t.&,&/o,& s#2, t.#t so0& o/ t.& #3#,(&&s )* ou, ORDER #,& &0-'o2&&s o/ #*ot.&, 1us)*&ss &*t)t2. This bein
the case, )e cannot rant his reH"est for indorsement to the 34RC.>
Issu&%
)hether the 4abor Arbiter has E"risdiction o1er the instant case
H&'(%
3o. ;etitioner ar"es that the po)er to adE"dicate money claims belons to the 4abor Arbiter )ho has e@cl"si1e E"risdiction o1er employees:
claims )here the areate amo"nt of the claims of each employee e@ceeds;/,<<<.<<0 and, that the 4abor Arbiter has E"risdiction o1er all
other claims arisin from employer(employee relations, incl"din those of persons in domestic or ho"sehold ser1ice, in1ol1in an amo"nt
e@ceedin ;/,<<<.<<, )hether or not accompanied )ith a claim for reinstatement.
6hile it is tr"e that "nder Articles 12, and 217 of the 4abor Code, the 4abor Arbiter has E"risdiction to hear and decide cases )here the
enforcement po)ers of the 5ecretary of 4abor or his d"ly a"thoriCed representati1es.
Rather, said po)ers are defined and set forth in Article 12- of the 4abor Code &as amended by R.A. 3o. 77.<' th"s%
7Art. 12-. Disitorial and enforcement po)er. G
&a' The 5ecretary of 4abor or his d"ly a"thoriCed representati1es, incl"din labor re"lation officers, shall ha1e access to employer:s
records and premises at any time of the day or niht )hene1er )or2 is bein "nderta2en therein, and the riht to copy therefrom,
to H"estion any employee and in1estiate any fact, condition or matter )hich may be necessary to determine 1iolations or )hich
may aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant thereto.
&b' 3ot)ithstandin the pro1isions of Articles 12, and 217 of this Code to the contrary, and in cases )here the relationship of
employer(employee e@ists, the 5ecretary of 4abor and Employment or his d"ly a"thoriCed representati1es shall ha1e the po)er to
iss"e compliance orders to i1e effect to the labor standards pro1isions of this Code and other labor leislation based on the
findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The
5ecretary or his d"ly a"thoriCed representati1es shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of
their orders, e@cept in cases )here the employer contests the findin of the labor employment and enforcement officer and raises
latter. $n case said order in1ol1ed a monetary a)ard, an appeal by the employer may be perfected only "pon the postin of a cash or s"rety
pro1isions of Articles 12, and 217 of this Code to the contrary . . .> thereby retainin and f"rther strenthenin the po)er of the 5ecretary of
4abor or his d"ly a"thoriCed representati1e to iss"e compliance orders to i1e effect to the labor standards pro1isions of said Code and other
labor leislation based on the findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of
inspection.
$n the case at bar, the Office of respondent Reional ?irector cond"cted inspection 1isits at petitioner:s establishment on 9ebr"ary , and 14,
1,,/ in accordance )ith the abo1e(mentioned pro1ision of la). $n the co"rse of said inspection, se1eral 1iolations of the labor standard
pro1isions of the 4abor Code )ere disco1ered and reported by 5enior 4abor Enforcement Officer Ed"1iis A. Acero in his 3otice of
$nspection Res"lts. $t )as on the bases of the aforesaid findins &)hich petitioner did not contest', that respondent Reional ?irector iss"ed
the assailed Order for petitioner to pay pri1ate respondents the respecti1e )ae differentials d"e them.
14*
Clearly, as the d"ly a"thoriCed representati1e of respondent 5ecretary of 4abor, and in the la)f"l e@ercise of the 5ecretary:s 1isitorial and
enforcement po)ers "nder Article 12- of the 4abor Code, respondent Reional ?irector had E"risdiction to iss"e his imp"ned Order.
BRO:ENSHIRE MEMORIAL HOSITAL, INC. 6. THE HONORABLE MINISTER O" LABOR < EMLOYMENT AND BRO:ENSHIRE
MEMORIAL HOSITAL EMLOYEES AND @OR:ER=S UNION7""@ R&-,&s&*t&( 12 EDUARDO A. A"UAN
G.R. No. 5+641 "&1,u#,2 5, 1998
"#$ts%
;ri1ate respondents filed a complaint aainst petitioner )ith the Reional Office of the ?O4E. After d"e healin the Reional ?irector
rendered a decision n fa1or of pri1ate respondents. +"dment ha1in become final and e@ec"tory, the Reional ?irector iss"ed a 6rit of
E@ec"tion )hereby some mo1able properties of the hospital &petitioner herein' )ere le1ied "pon and its operatin e@penses 2ept )ith the
ban2 )ere arnished. The le1y and arnishment )ere lifted )hen petitioner hospital paid the claim of the pri1ate respondents &2-1 hospital
employees' directly.
After ma2in said payment, petitioner hospital failed to contin"e to comply )ith 6ae Order 3o. / and li2e)ise, failed to comply )ith the ne)
6ae Order 3o. *, promptin pri1ate respondents to file aainst petitioner another complaint.
Issu&%
)hether or not the Reional ?irector has E"risdiction o1er money claims of )or2ers conc"rrent )ith the 4abor Arbiter
H&'(%
The 4abor Arbiter has e@cl"si1e oriinal E"risdiction in the instant case. RA *71/ amended Art. 12, and Art. 217 of the 4abor Code, to read
as follo)s%
7ART. 12,. Recovery of wages, simple money claims and other benefits.KFpon complaint of any interested party, the Reional ?irector of
the ?epartment of 4abor and Employment or any of the d"ly a"thoriCed hearin officers of the ?epartment is empo)ered, thro"h s!mmary
proceeding and after d"e notice, to hear and decide any matter in1ol1in the reco1ery of )aes and other monetary claims and benefits,
incl"din leal interest, o)in to an employee or person employed in domestic or ho"sehold ser1ice or ho"sehelper "nder this code, arisin
from employer(employee relations, ;ro1ided, That s"ch complaint does not incl"de a claim for reinstatement0 ;ro1ided, f"rther, That the
areate money claims of each employee or ho"sehelper do not e@ceed fi1e tho"sand pesos &;/,<<<.<<'. The Reional ?irector or hearin
officer shall decide or resol1e the complaint )ithin thirty &.<' calendar days from the date of the filin of the same . . .
7Any decision or resol"tion of the Reional ?irector or hearin officer p"rs"ant to this pro1ision may be appealed on the same ro"nds
pro1ided in Article 22. of this Code, )ithin fi1e &/' calendar days from 11 receipt of a copy of said decision or resol"tion, to the 3ational
4abor Relations Commission )hich shall resol1e the appeal )ithin ten &1<' calendar days from the s"bmission of the last pleadin reH"ired
or allo)ed "nder its r"les.
7ART. 217. G!risdiction of Labor /rbiters and the #ommission. KE@cept as other)ise pro1ided "nder this code, the 4abor Arbiters shall ha1e
oriinal and e@cl"si1e E"risdiction to hear and decide, )ithin thirty &.<' calendar days after the s"bmission of the case by the parties for
decision )itho"t e@tension, e1en in the absence of steno raphic notes, the follo)in cases in1ol1in all )or2ers, )hether aric"lt"ral or non(
aric"lt"ral%
&1' Fnfair labor practice cases0
&2' Termination disp"tes0
&.' $f accompanied )ith a claim of reinstatement, those cases that )or2ers may file in1ol1in )aes, rates of pay, ho"rs of )or2 and
other terms and conditions of employment0
&4' Claims for act"al, moral, e@emplary and other forms of damaes arisin from the employer(employee relation0
&/' Cases arisin from any 1iolation of Article 2*4 of this Code, incl"din H"estions in1ol1in the leality of stri2es and loc2o"ts0 and
&*' E@cept claims for employees compensation, social sec"rity, medicare and maternity benefits, all other claims arisin from
employer(employee relations, incl"din those of persons in domestic or ho"sehold ser1ice, in1ol1in an amo"nt not e@ceedin fi1e
tho"sand pesos &;/,<<<.<<', )hether or not accompanied )ith a claim for reinstatement.
$t )ill be obser1ed that )hat in fact conferred "pon Reional ?irectors and other hearin officers of the ?epartment of 4abor &aside from the
4abor Arbiters' adE"dicati1e po)ers, i.e., the po)er to try and decide, or hear and determine any claim bro"ht before them for reco1ery of
)aes, simple money claims, and other benefits, is Rep"blic Act *71/, pro1ided that the follo)in reH"isites conc"r, to )it%
1' The claim is presented by an employee or person employed in domestic or ho"sehold ser1ice, or ho"sehelper "nder the code0
147
2' The claimant, no loner bein employed, does not see2 reinstatement0 and
.' The areate money claim of the employee or ho"sehelper does not e@ceed fi1e tho"sand pesos &;/,<<<.<<'.
$n the absence of any of the . reH"isites, the 4abor Arbiters ha1e e@cl"si1e oriinal E"risdiction o1er all claims arisin from employer(
employee relations, other than claims for employee:s compensation, social sec"rity, medicare and maternity benefits.
ALLIED IN6ESTIGATION BUREAU, INC. v. HON. SECRETARY O" LABOR < EMLOYMENT, #$t)*g t.,oug. U*(&,s&$,&t#,2
CRESENCIANO B. TRA!ANO
G.R. No. 144886 Nov&01&, 4+, 1999
"#$ts%
;etitioner Allied $n1estiation !"rea", $nc. is a sec"rity aency. $t entered into a sec"rity contract )ith 3o1elty ;hilippines, $nc. &3;$, for
bre1ity' )hereby it obliated itself to pro1ide sec"rity ser1ices to the latter.
;ri1ate respondents Mel1in ;elayo and 5am"el 5"canel, t)o of the sec"rity "ards assined by petitioner to 3;$, filed a complaint )ith the
Office of respondent Reional ?irector charin petitioner )ith non(compliance )ith 6ae Order 3o. 3CR(<., )hich increased the minim"m
daily pay of )or2ers by ;17.<<, or from ;11-.<< to ;1./.<< effecti1e ?ecember 1*, 1,,.0 and f"rther, by ;1<.<<, or from ;1./.<< to
;14/.<< daily beinnin April 1, 1,,4. ;ri1ate respondents, li2e)ise, so"ht the reco1ery of )ae differentials.
The Office of Reional ?irector cond"cted inspection 1isits at petitioner:s establishment. The 5enior 4abor Enforcement Officer iss"ed a
3otice of $nspection Res"lts findin )ith non(implementation "nder 6.O. Z 3CR(<., non(remittance of 555 ;remi"ms, and K E@cessi1e
ded"ction or !ayanihan 5ystem &;2<.<<' e1ery pay day instead of ;/.<< only.
Issu& K 1%
)hether or not respondent Reional ?irector acted )itho"t E"risdiction in adE"dicatin the pri1ate respondents: money claims )here the
areate money claim of each of them e@ceeds ;/, <<<.<<
H&'( K1%
3o. 6hile it is tr"e that "nder Articles 12, and 217 of the 4abor Code, the 4abor Arbiter has E"risdiction to hear and decide cases )here the
enforcement po)ers of the 5ecretary of 4abor or his d"ly a"thoriCed representati1es.
Rather, said po)ers are defined and set forth in Article 12- of the 4abor Code &as amended by R.A. 3o. 77.<' th"s%
7Art. 12-. Visitorial and enforcement power. K
(a) The 5ecretary of 4abor or his d"ly a"thoriCed representati1es, incl"din labor re"lation officers, shall ha1e access to employer:s
records and premises at any time of the day or niht )hene1er )or2 is bein "nderta2en therein, and the riht to copy therefrom,
to H"estion any employee and in1estiate any fact, condition or matter )hich may be necessary to determine 1iolations or )hich
may aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant thereto.
(b) *otwithstanding the provisions of /rticles 0K1 and K03 of this #ode to the contrary, and in cases where the relationship of
employer"employee e(ists, the Secretary of Labor and Employment or his d!ly a!thori,ed representatives shall have the power to
iss!e compliance orders to give effect to the labor standards provisions of this #ode and other labor legislation based on the
findings of labor employment and enforcement officers or ind!strial safety engineers made in the co!rse of inspection. The
5ecretary or his d"ly a"thoriCed representati1es shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of
their orders, e@cept in cases )here the employer contests the findins of the labor employment and enforcement officer and raises
An order iss"ed by the d"ly a"thoriCed representati1e of the 5ecretary of 4abor and Employment "nder this article may be
appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only !pon the
posting of a cash or s!rety bond iss!ed by a rep!table bonding company d!ly accredited by the Secretary of Labor and
Employment in the amo!nt e&!ivalent to the monetary award in the order appealed from.
pro1isions of Articles 12, and 217 of this Code to the contrary . . . 7 thereby retainin and f"rther strenthenin the po)er of the 5ecretary of
4abor or his d"ly a"thoriCed representati1e to iss"e compliance orders to i1e effect to the labor standards pro1isions of said Code and other
14-
labor leislation based on the findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of
inspection.
$n the case at bar, the Office of respondent Reional ?irector cond"cted inspection 1isits at petitioner:s establishment on 9ebr"ary , and 14,
1,,/ in accordance )ith the abo1e(mentioned pro1ision of la). $n the co"rse of said inspection, se1eral 1iolations of the labor standard
pro1isions of the 4abor Code )ere disco1ered and reported by 5enior 4abor Enforcement Officer Ed"1iis A. Acero in his 3otice of
$nspection Res"lts. $t )as on the bases of the aforesaid findins &)hich petitioner did not contest', that respondent Reional ?irector iss"ed
the assailed Order for petitioner to pay pri1ate respondents the respecti1e )ae differentials d"e them.
Clearly, as the d"ly a"thoriCed representati1e of respondent 5ecretary of 4abor, and in the la)f"l e@ercise of the 5ecretary:s 1isitorial and
enforcement po)ers "nder Article 12- of the 4abor Code, respondent Reional ?irector had E"risdiction to iss"e his imp"ned Order.
Issu& K4%
)hether or not respondent 5ecretary of 4abor O Employment, actin thro"h Fndersecretary Cresenciano !. TraEano, acted )ith ra1e
ab"se of discretion in dismissin herein petitioner:s appeal attac2in the E"risdiction of respondent Reional ?irector in adE"dicatin s"bEect
money claims of pri1ate respondents
H&'( K4%
3o. Art. 12- of the 4abor Code li2e)ise e@plicitly pro1ides that in case an order iss"ed by the d"ly a"thoriCed representati1e of the 5ecretary
of 4abor and Employment in1ol1es a monetary a)ard, an appeal by the employer may be perfected only "pon postin of a cash or s"rety
bond in an amo"nt eH"i1alent to the monetary a)ard in the order appealed from.
5ince the Order appealed from in1ol1es a monetary a)ard, an appeal by petitioner may be perfected only "pon postin of a cash or s"rety
bond iss"ed by a rep"table bondin company d"ly accredited by respondent 5ecretary of 4abor in the amo"nt eH"i1alent to the monetary
a)ard in the Order appealed from.
;etitioner herein did not post a cash or s"rety bond )hen it filed its appeal )ith the Office of respondent 5ecretary of 4abor. ConseH"ently,
petitioner failed to perfect its appeal on time and the Order of respondent Reional ?irector became final and e@ec"tory. Th"s, the 5ecretary
of 4abor and Employment thr" Fndersecretary Cresenciano !. TraEano correctly dismissed petitioner:s appeal.
LACIDO O. URBANES, !R., (o)*g 1us)*&ss u*(&, t.& *#0& < st2'& o/ CATALINA SECURITY AGENCY v. THE HONORABLE
SECRETARY O" LABOR AND EMLOYMENT #*( SOCIAL SECURITY SYSTEM
G.R. No. 144591 "&1,u#,2 19, 4883
"#$ts%
;lacido O. Frbanes, +r., doin b"siness "nder the name and style of Catalina 5ec"rity Aency, entered into an areement 1 to pro1ide
sec"rity ser1ices to respondent 555.
?"rin the effecti1ity of the areement, petitioner reH"ested the 555 for the "p)ard adE"stment of their contract rate in 1ie) of 6ae Order
3o. 3CR(<. )hich )as iss"ed by the Reional Tripartite 6aes and ;rod"cti1ity !oard(3CR p"rs"ant to Rep"blic Act *727 other)ise
2no)n as the 6ae RationaliCation Act, the pertinent pro1ision of )hich )ae order reads%
75ection ,. I* t.& $#s& o/ $o*t,#$ts for constr"ction proEects and /o, s&$u,)t2, Eanitorial and similar ser1ices, t.& -,&s$,)1&( #0ou*t s&t
/o,t. .&,&)* /o, $ov&,&( 3o,>&,s s.#'' 1& 1o,*& 12 t.& -,)*$)-#'s o, t.& $')&*ts of the constr"ction=ser1ice contractors #*( t.&
$o*t,#$t s.#'' 1& (&&0&( #0&*(&( #$$o,()*g'2. I* t.& &v&*t, .o3&v&,, t.#t t.& -,)*$)-#' o, $')&*t /#)'&( to -#2 t.& -,&s$,)1&(
)*$,&#s&, t.& $o*st,u$t)o*Is&,v)$& $o*t,#$to,s s.#'' 1& Oo)*t'2 #*( s&v&,#''2 ')#1'& 3)t. t.& -,)*$)-#' o, $')&*t .>
;etitioner filed a complaint )ith the ?O4E(3CR aainst the 555 see2in the implementation of 6ae Order 3o. 3CR(<..
Issu&%
)hether the 5ecretary of 4abor has E"risdiction to re1ie) appeals from decisions of the Reional ?irectors in complaints filed "nder Article
12, of the 4abor Code
H&'(%
3o. $t is the RTC that has E"risdiction o1er the s"bEect matter of the present case. It )s 3&'' s&tt'&( )* '#3 #*( Ou,)s-,u(&*$& t.#t 3.&,& *o
&0-'o2&,7&0-'o2&& ,&'#t)o*s.)- &N)sts 1&t3&&* t.& -#,t)&s #*( *o )ssu& )s )*vo'v&( 3.)$. 0#2 1& ,&so'v&( 12 ,&/&,&*$& to t.&
L#1o, Co(&, ot.&, '#1o, st#tut&s o, #*2 $o''&$t)v& 1#,g#)*)*g #g,&&0&*t, )t )s t.& R&g)o*#' T,)#' Cou,t t.#t .#s Ou,)s()$t)o*. I* )ts
14,
$o0-'#)*t, -,)v#t& ,&s-o*(&*t )s *ot s&&>)*g #*2 ,&')&/ u*(&, t.& L#1o, Co(& 1ut s&&>s -#20&*t o/ # su0 o/ 0o*&2 #*( (#0#g&s
o* #$$ou*t o/ -&t)t)o*&,=s #''&g&( 1,&#$. o/ )ts o1')g#t)o* u*(&, t.&), Gu#,( S&,v)$& Co*t,#$t. T.& #$t)o* )s 3)t.)* t.& ,&#'0 o/ $)v)'
'#3 .&*$& Ou,)s()$t)o* ov&, t.& $#s& 1&'o*gs to t.& ,&gu'#, $ou,ts. @.)'& t.& ,&so'ut)o* o/ t.& )ssu& )*vo'v&s t.& #--')$#t)o* o/
'#1o, '#3s, ,&/&,&*$& to t.& '#1o, $o(& 3#s o*'2 /o, t.& (&t&,0)*#t)o* o/ t.& so')(#,2 ')#1)')t2 o/ t.& -&t)t)o*&, to t.& ,&s-o*(&*t
3.&,& *o &0-'o2&,7&0-'o2&& ,&'#t)o* &N)sts.
$n the case at bar, e1en if petitioner filed the complaint on his and also on behalf of the sec"rity "ards, the relief so"ht has to do )ith the
enforcement of the contract bet)een him and the 555 )hich )as deemed amended by 1irt"e of 6ae Order 3o. 3CR(<.. The contro1ersy
s"bEect of the case at bar is th"s a ci1il disp"te, the proper for"m for the resol"tion of )hich is the ci1il co"rts.
!"t e1en ass"min arg!endo that petitioner:s complaint )ere filed )ith the proper for"m, for lac2 of ca"se of action it m"st be dismissed.
Articles 1<*, 1<7 and 1<, of the 4abor Code pro1ide%
7ART. 1<*. CO3TRACTOR OR 5F!CO3TRACTOR. G 6hene1er an employer enters into contract )ith another person for the performance
of the former:s )or2, the employees of the contractor and of the latter:s s"bcontractor, if any, shall be paid in accordance )ith the pro1isions
of this Code.
7$n the e1ent that the contractor or s"bcontractor fails to pay the )ae of his employees in accordance )ith this Code, the employer shall be
the same manner and e@tent that he is liable to employees directly employed by him.
7ART. 1<7 $3?$RECT EM;4OBER. G The pro1isions of the immediately precedin Article shall li2e)ise apply to any person, partnership,
or proEect.
7ART. 1<,. 5O4$?ARB 4$A!$4TB. G The pro1isions of e@istin la)s to the contrary not)ithstandin, e1ery employer or indirect employer shall
be held responsible )ith his contractor or s"bcontractor for any 1iolation of any pro1ision of this Code. 9or p"rposes of determinin the
e@tent of their ci1il liability "nder this Chapter, they shall be considered as direct employers.>
$t is only )hen ItheJ contractor pays the increases mandated that it can claim an adE"stment from the principal to co1er the increases payable
to the sec"rity "ards. T.& $o*$'us)o* t.#t t.& ,)g.t o/ t.& $o*t,#$to, ?#s -,)*$)-#' (&1to,A to ,&$ov&, /,o0 t.& -,)*$)-#' ?#s so')(#,2
$o7(&1to,A #,)s&s o*'2 )/ .& .#s -#)( t.& #0ou*ts /o, 3.)$. 1ot. o/ t.&0 #,& Oo)*t'2 #*( s&v&,#''2 ')#1'& )s )* ')*& 3)t. A,t)$'& 1415
o/ t.& C)v)' Co(& )hich pro1ides%
7Art. 1217. ;ayment made by one the solidary debtors e@tin"ishes the obliation. $f t)o or more solidary debtors offer to pay, the creditor
may choose )hich offer to accept.
78e )ho made payment ma2e claim from his co(debtors only the share )hich corresponds to each, )ith interest for the payment already
made. $f the payment is made before the debt is d"e, no interest for the inter1enin period may be demanded.>
$n fine, the liability of the 555 to reimb"rse petitioner arises only if and )hen petitioner pays his employee(sec"rity "ards 7the increases>
mandated by 6ae Order 3o. 3CR(<..
The records do not sho) that petitioner has paid the mandated increases to the sec"rity "ards. The sec"rity "ards in fact ha1e filed a
complaint )ith the 34RC aainst petitioner relati1e to, amon other thins, "nderpayment of )aes.
HILIINE TELEGRAH AND TELEHONE COMANY v. NATIONAL LABOR RELATIONS COMMISSION #*( GRACE DE GU;MAN
G.R. No. 118958 M#2 43, 1995
"#$ts%
#race de #"Cman )as initially hired by petitioner as a relie1er, specifically as a 75"pern"merary ;roEect 6or2er,> for a fi@ed period from
3o1ember 21, 1,,< "ntil April 2<, 1,,1 1ice one C.9. Tenorio )ho )ent on maternity lea1e. Fnder the Relie1er Areement )hich she sined
)ith petitioner company, her employment )as to be immediately terminated "pon e@piration of the areed period. Thereafter, from +"ne 1<,
1,,1 to +"ly 1, 1,,1, and from +"ly 1,, 1,,1 to A""st -, 1,,1, pri1ate respondent:s ser1ices as relie1er )ere aain enaed by petitioner,
this time in replacement of one Erlinda 9. ?iCon )ho )ent on lea1e d"rin both periods. After A""st -, 1,,1, and p"rs"ant to their Relie1er
Areement, her ser1ices )ere terminated.
1/<
On 5eptember 2, 1,,1, pri1ate respondent )as once more as2ed to Eoin petitioner company as a probationary employee, the probationary
period to co1er 1/< days. $n the Eob application form that )as f"rnished her to be filled "p for the p"rpose, she indicated in the portion for ci1il
stat"s therein that she )as sinle altho"h she had contracted marriae a fe) months earlier, that is, on May 2*, 1,,1.
$t appears that pri1ate respondent had made the same representation in the t)o s"ccessi1e relie1er areements. 6hen petitioner
s"pposedly learned abo"t the same later, its branch s"per1isor in !a"io City, ?elia M. Oficial, sent to pri1ate respondent a memorand"m
reH"irin her to e@plain the discrepancy. $n that memorand"m, she )as reminded abo"t the company:s policy of not acceptin married
)omen for employment.
$n her reply letter, pri1ate respondent stated that she )as not a)are of ;TOT:s policy reardin married )omen at the time, and that all alon
she had not deliberately hidden her tr"e ci1il stat"s. ;etitioner nonetheless remained "ncon1inced by her e@planations. ;ri1ate respondent
)as dismissed from the company effecti1e +an"ary 2,, 1,,2, )hich she readily contested by initiatin a complaint for illeal dismissal,
co"pled )ith a claim for non(payment of CO4A, before the Reional Arbitration !ranch of the 3ational 4abor Relations Commission in
!a"io City.
Issu&%
)hether concealment of ci1il stat"s )arrants dismissal from employment
H&'(%
3o. 5"spension for . months is appropriate.
$n the case at bar, petitioner:s policy of not acceptin or considerin as disH"alified from )or2 any )oman )or2er )ho contracts marriae
r"ns afo"l of the test of, and the riht aainst, discrimination, afforded all )omen )or2ers by o"r labor la)s and by no less than the
Constit"tion. Contrary to petitioner:s assertion that it dismissed pri1ate respondent from employment on acco"nt of her dishonesty, the record
discloses clearly that her ties )ith the company )ere dissol1ed principally beca"se of the company:s policy that married )omen are not
H"alified for employment in ;T O T, and not merely beca"se of her s"pposed acts of dishonesty.
;etitioner:s policy is not only in deroation of the pro1isions of Article 1.* of the 4abor Code on the riht of a )oman to be free from any 2ind
of stip"lation aainst marriae in connection )ith her employment, b"t it li2e)ise assa"lts ood morals and p"blic policy, tendin as it does
to depri1e a )oman of the freedom to choose her stat"s, a pri1ilee that by all acco"nts inheres in the indi1id"al as an intanible and
inalienable riht. 8ence, )hile it is tr"e that the parties to a contract may establish any areements, terms, and conditions that they may
deem con1enient, the same sho"ld not be contrary to la), morals, ood c"stoms, p"blic order, or p"blic policy. Carried to its loical
conseH"ences, it may e1en be said that petitioner:s policy aainst leitimate marital bonds )o"ld enco"rae illicit or common(la) relations
and s"b1ert the sacrament of marriae.
DEL"IN G. 6ILLARAMA v. NATIONAL LABOR RELATIONS COMMISSION AND GOLDEN DONUTS, INC.
G.R. No. 1863+1 S&-t&01&, 4, 199+
"#$ts%
?E49$3 D$44ARAMA )as employed by pri1ate respondent #O4?E3 ?O3FT5, $3C., as its Materials Manaer. 8is startin salary )as
;*,/<<.<< per month, later increased to ;-,/<<.<<.
Dillarama )as chared )ith se@"al harassment by ?i1ina #onCaa, a cler2(typist assined in his department. The h"miliatin e@perience
compelled her to resin from )or2. 8er letter(resination, dated +"ly 1/, 1,-,, reads%
7?ear 5ir%
7$ )o"ld li2e to tender my resination from my post as Cler2 Typist of Materials ?epartment effecti1e immediately.
7$t is really my reret to lea1e this company )hich has i1en me all the opport"nity $ lon desired. My / months stay in the company ha1e
been 1ery ratifyin professionally and financially and $ )o"ld not entertain the idea of resinin e@cept for the most shoc2in e@perience $
ha1e had in my )hole life.
74ast 9riday, +"ly 7, 1,-,, Mr. ?elfin Dillarama and Mr. +ess de +es"s in1ited all the irls of Materials ?epartment for a dinner )hen in &sic'
the last min"te the other . irls decided not to Eoin the ro"p anymore. $ do &sic' not ha1e second tho"ht&s' in acceptin their in1itation for
they are my collea"es and $ had nothin in mind that )o"ld in any manner prompt me to ref"se to )hat appeared to me as a simple and
cordial in1itation. 6e )ent to a resta"rant alon Ma2ati A1en"e )here )e ate o"r dinner. Mr. Dillarama, Mr. Olaybar and Mr. +ess de +es"s
)ere drin2in )hile )e )ere eatin and they e1en offered me a fe) drin2s and )hen )e )ere finished, they decided to brin me home.
6hile on my )ay, $ fo"nd o"t that Mr. Dillarama )as not dri1in the )ay to my ho"se. $ )as )onderin )hy )e )ere ta2in the )ron )ay
"ntil $ fo"nd o"t that )e )ere enterin a motel. $ )as really shoc2ed. $ did not e@pect that a some)hat rep"table person li2e Mr. Dillarama
1/1
co"ld do s"ch a thin to any of his s"bordinates. $ sho"ld ha1e left the company )itho"t any )ord b"t $ feel that $ )o"ld be "nfair to those
)ho miht be similarly sit"ated. $ hope that yo" )o"ld find time to in1estiate the 1eracity of my alleations and ma2e each responsible for is
o)n deed.
The letter prompted the president of #olden ?on"ts, $nc., to call petitioner to a meetin. ;etitioner )as then reH"ired to e@plain the letter
aainst him. $t appears that petitioner areed to tender his resination. ;ri1ate respondent mo1ed s)iftly to separate petitioner. Th"s, pri1ate
respondent appro1ed petitioner:s application for lea1e of absence )ith pay from A""st /(2-, 1,-,. $t also iss"ed an inter(office
memorand"m all concerned> that petitioner )as no loner connected )ith the company effecti1e A""st /, 1,-,. T)o days later, Mr. ;rieto
sent a letter to petitioner confirmin their areement that petitioner )o"ld be officially separated from the pri1ate respondent.
$n the interim, petitioner had a chane of mind as he )rote a letter see2in reconsideration of the manaement:s decision to terminate him.
9or his fail"re to tender his resination, petitioner )as dismissed by pri1ate respondent. 9eelin arie1ed, petitioner filed an illeal dismissal
case aainst pri1ate respondent.
Issu&%
)hether there )as 1alid ca"se to terminate petitioner
H&'(%
Bes. 4oss of tr"st and confidence is a ood ro"nd for dismissin a manaerial employee. As a manaerial employee, petitioner is bo"nd by
a more e@actin )or2 ethics. 8e failed to li1e "p to this hiher standard of responsibility )hen he s"cc"mbed to his moral per1ersity. And
)hen s"ch moral per1ersity is perpetrated aainst his s"bordinate, he pro1ides E"stifiable ro"nd for his dismissal for lac2 of tr"st and
confidence. $t is the riht, nay, the d"ty of e1ery employer to protect its employees from o1er se@ed s"periors.
To be s"re, employers are i1en )ider latit"de of discretion in terminatin the employment of manaerial employees on the ro"nd of lac2 of
tr"st and confidence.
DIOSCORO ". BACSIN v. EDUARDO O. @AHIMAN
G.R. No. 1+6893
"#$ts%
;etitioner is a p"blic school teacher of ;andan Elementary 5chool, ;andan, MambaEao, Cami"in ;ro1ince. Respondent Ed"ardo O.
6ahiman is the father of AAA, an elementary school st"dent of the petitioner.
AAA claimed that petitioner as2ed her to be at his office to do an errand. Once inside, she sa) him et a folder from one of the cartons on
the floor near his table, and place it on his table. 8e then as2ed her to come closer, and )hen she did, held her hand, then to"ched and
fondled her breast. 5he stated that he fondled her breast fi1e times, and that she felt afraid. A classmate of hers, one Dincent !. 5orrabas,
claimin to ha1e )itnessed the incident, testified that the fondlin incident did happen E"st as AAA related it
;etitioner )as chared )ith Miscond"ct in a 9ormal Chare by a Reional ?irector of the C5C. $n his defense, petitioner claimed that the
to"chin incident happened by accident, E"st as he )as handin AAA a lesson boo2. 8e f"rther stated that the incident happened in abo"t
t)o or three seconds, and that the irl left his office )itho"t any complaint.
Issu& K 1%
)hether or not the petitioner co"ld be "ilty of acts of se@"al harassment, ra1e miscond"ct, )hich )as different from or an offense not
alleed in the formal chare filed aainst him at the inception of the administrati1e case
H&'( K 1%
;etitioner )as s"fficiently informed of the basis of the chare aainst him, )hich )as his act of improperly to"chin one of his st"dents. Th"s
informed, he defended himself from s"ch chare. The fail"re to desinate the offense specifically and )ith precision is of no moment in this
administrati1e case.
The formal chare, )hile not specifically mentionin RA 7-77, The Anti(5e@"al 8arassment Act of 1,,/, imp"tes on the petitioner acts
co1ered and penaliCed by said la). Contrary to the ar"ment of petitioner, the demand of a se@"al fa1or need not be e@plicit or stated. "nder
5ection . &b' &4' of RA 7-77, se@"al harassment in an ed"cation or trainin en1ironment is committed )hen the se@"al ad1ances res"lt in an
intimidatin, hostile or offensi1e en1ironment for the st"dent, trainee or apprentice. AAA e1en testified that she felt fear at the time petitioner
to"ched her.
1/2
Issu& K 4%
)hether or not petitioner is indeed "ilty, as fo"nd by the CA and C5C, of #ra1e Miscond"ct, as distin"ished from 5imple Miscond"ct
H&'( K 4%
$n ra1e miscond"ct, the elements of corr"ption, clear intent to 1iolate the la), or flarant disreard of established r"le m"st be manifest.I14J
The act of petitioner of fondlin one of his st"dents is aainst a la), RA 7-77, and is do"btless ine@c"sable. The partic"lar act of petitioner
cannot in any )ay be constr"ed as a case of simple miscond"ct. 5e@"ally molestin a child is, by any norm, a re1oltin act that it cannot b"t
be cateoriCed as a ra1e offense. ;arents entr"st the care and moldin of their children to teachers, and e@pect them to be their "ardians
)hile in school. ;etitioner has 1iolated that tr"st. The chare of ra1e miscond"ct pro1en aainst petitioner demonstrates his "nfitness to
remain as a teacher and contin"e to dischare the f"nctions of his office.
Fnder R"le $D, 5ection /2 of the C5C Fniform R"les on Administrati1e Cases, #ra1e Miscond"ct carries )ith it the penalty of dismissal for
the first offense. Th"s, the penalty imposed on petitioner is in accordance )ith the R"les.
ATTY. SUSAN M. AGUINO v. HON. ERNESTO D. ACOSTA, ,&s)()*g !u(g&, Cou,t o/ T#N A--&#'s
A.M. No. CTA78171 A-,)' 4, 4884
"#$ts%
An administrati1e case )as filed by Atty. 5"san M. AH"ino, Chief of the 4eal and Technical 5taff of the Co"rt of Ta@ Appeals &CTA', charin
+"de Ernesto Acosta, ;residin +"de of the same co"rt, )ith se@"al harassment "nder R.A. 7-77 and 1iolation of the Canons of +"dicial
Ethics and Code of ;rofessional Responsibility.
On 3o1ember 21, 2<<<, she reported for )or2 after her 1acation in the Fnited 5tates, brinin ifts for the three E"des of the CTA, incl"din
respondent. $n the afternoon of the same day, he entered her room and reeted her by sha2in her hand. 5"ddenly, he p"lled her to)ards
him and 2issed her on her chee2.
On ?ecember 2-, 2<<<, )hile respondent )as on official lea1e, he called complainant by phone, sayin he )ill et somethin in her office.
5hortly thereafter, he entered her room, shoo2 her hand and reeted her, 7Merry Christmas.> There"pon, he embraced her and 2issed her.
5he )as able to free herself by slihtly p"shin him a)ay.
On the first )or2in day in +an"ary, 2<<1, respondent phoned complainant, as2in if she co"ld see him in his chambers in order to disc"ss
some matters. 6hen complainant arri1ed there, respondent tried to 2iss her b"t she )as able to e1ade his se@"al attempt. 5he then resol1ed
not to enter his chambers alone.
6ee2s later, after the 5enate appro1ed the proposed bill e@pandin the E"risdiction of the CTA, )hile complainant and her companions )ere
conrat"latin and 2issin each other, respondent s"ddenly placed his arms aro"nd her sho"lders and 2issed her.
The last incident happened the ne@t day. At aro"nd -%.< a.m., respondent called complainant and as2ed her to see him in his office to
disc"ss the 5enate bill on the CTA. 5he aain reH"ested R"by to accompany her. The latter areed b"t s"ested that they sho"ld act as if
they met by accident in respondent:s office. R"by then approached the secretary:s table )hich )as separated from respondent:s office by a
transparent lass. 9or her part, complainant sat in front of respondent:s table and as2ed him )hat he )anted to 2no) abo"t the 5enate bill.
Respondent seemed to be at a loss for )ords and 2ept lancin at R"by )ho )as searchin for somethin at the secretary:s des2. 9orth)ith,
respondent approached R"by, as2ed her )hat she )as loo2in for and stepped o"t of the office. 6hen he ret"rned, R"by said she fo"nd
)hat she )as loo2in for and left. Respondent then approached complainant sayin, 7me "sto a2on a)in sa iyo 2ahapon pa.>
There"pon, he tried to 7rab> her. Complainant instincti1ely raised her hands to protect herself b"t respondent held her arms tihtly, p"lled
her to)ards him and 2issed her. 5he p"shed him a)ay, then sl"mped on a chair tremblin. Meantime, respondent sat on his chair and
co1ered his face )ith his hands. Thereafter, complainant left cryin and loc2ed herself inside a comfort room. After that incident, respondent
)ent to her office and tossed a note. statin, 7sorry, it )on:t happen aain.>
Issu&%
)hether the respondent +"de is "ilty of the chares aainst him
H&'(%
3o. no con1incin e1idence to s"stain complainant:s chares. 6hat )e percei1e to ha1e been committed by respondent E"de are cas"al
est"res of friendship and camaraderie, nothin more, nothin less. $n 2issin complainant, )e find no indication that respondent )as
1/.
moti1ated by malice or le)d desin. E1idently, she mis"nderstood his act"ations and constr"ed them as )or2(related se@"al harassment
"nder R.A. 7-77.
A mere cas"al b"ss on the chee2 is not a se@"al cond"ct or fa1or and does not fall )ithin the p"r1ie) of se@"al harassment "nder R.A. 3o.
7-77. 5ection . &a' thereof pro1ides, to )it%
7 5ec. .. 6or2, Ed"cation or Trainin ( related 5e@"al 8arassment ?efined. ( 6or2, ed"cation or trainin(related se@"al harassment is
committed by an employer, employee, manaer, s"per1isor, aent of the employer, teacher, instr"ctor, professor, coach, trainor, or any other
person )ho, ha1in a"thority, infl"ence or moral ascendancy o1er another in a )or2 or trainin or ed"cation en1ironment, demands,
reH"ests or other)ise reH"ires any se@"al fa1or from the other, reardless of )hether the demand, reH"est or reH"irement for s"bmission is
accepted by the obEect of said Act.
a' $n a )or2(related or employment en1ironment, se@"al harassment is committed )hen%
1' The se@"al fa1or is made as a condition in the hirin or in the employment, re(employment or contin"ed employment of said
indi1id"al, or in rantin said indi1id"al fa1orable compensation, terms, conditions, promotions or pri1ilees0 or the ref"sal to rant
se@"al fa1or res"lts in limitin, sereatin or classifyin the employee )hich in any)ay )o"ld discriminate, depri1e or diminish
employment opport"nities or other)ise ad1ersely affect said employees0
2' The abo1e acts )o"ld impair the employee:s riht or pri1ilees "nder e@istin labor la)s0 or
.' The abo1e acts )o"ld res"lt in an intimidatin, hostile, or offensi1e en1ironment for the employee.>
The elements of se@"al harassment are as follo)s%
1' The employer, employee, manaer, s"per1isor, aent of the employer, teacher, instr"ctor, professor, coach, trainor, or any other
person has a"thority, infl"ence or moral ascendancy o1er another0
2' The a"thority, infl"ence or moral ascendancy e@ists in a )or2in en1ironment0
.' The employer, employee, manaer, s"per1isor, aent of the employer, teacher, instr"ctor, professor, coach, or any other person
ha1in a"thority, infl"ence or moral ascendancy ma2es a demand, reH"est or reH"irement of a se@"al fa1or.
$ndeed, from the records on hand, there is no sho)in that respondent E"de demanded, reH"ested or reH"ired any se@"al fa1or from
complainant in e@chane for 7fa1orable compensation, terms, conditions, promotion or pri1ilees> specified "nder 5ection . of R.A. 7-77.
3or did he, by his act"ations, 1iolate the Canons of +"dicial Ethics or the Code of ;rofessional Responsibility.
STAR AER CORORATION, !OSEHINE ONGSITCO < SEBASTIAN CHUA v. RONALDO D. SIMBOL, @IL"REDA N. COMIA <
LORNA E. ESTRELLA
G.R. No. 16+55+ A-,)' 14, 4886
"#$ts%
;etitioner 5tar ;aper Corporation is a corporation enaed in tradin G principally of paper prod"cts. +osephine Onsitco is its Manaer of
the ;ersonnel and Administration ?epartment )hile 5ebastian Ch"a is its Manain ?irector.
Respondents Ronaldo ?. 5imbol, 6ilfreda 3. Comia and 4orna E. Estrella )ere all re"lar employees of the company.
5imbol )as employed by the company. 8e met Alma ?ayrit, also an employee of the company, )hom he married. ;rior to the marriae,
Onsitco ad1ised the co"ple that sho"ld they decide to et married, one of them sho"ld resin p"rs"ant to a company policy, 1iC.%
1. 3e) applicants )ill not be allo)ed to be hired if in case he=she has IaJ relati1e, "p to ItheJ .rd deree of relationship, already
employed by the company.
2. $n case of t)o of o"r employees &both sinles IsicJ, one male and another female' de1eloped a friendly relationship d"rin the
co"rse of their employment and then decided to et married, one of them sho"ld resin to preser1e the policy stated abo1e.
5imbol resined p"rs"ant to the company policy.
Comia )as hired by the company. 5he met 8o)ard Comia, a co(employee, )hom she married. Onsitco li2e)ise reminded them that
p"rs"ant to company policy, one m"st resin sho"ld they decide to et married. Comia resined.
1/4
Estrella )as hired. 5he met 4"isito U"Tia. also a co()or2er. ;etitioners stated that U"Tia, a married man, ot Estrella prenant. The
company alleedly co"ld ha1e terminated her ser1ices d"e to immorality b"t she opted to resin
Respondents offer a different 1ersion of their dismissal. 5imbol and Comia allee that they did not resin 1ol"ntarily0 they )ere compelled to
resin in 1ie) of an illeal company policy. As to respondent Estrella, she allees that she had a relationship )ith co()or2er U"Tia )ho
misrepresented himself as a married b"t separated man. After he ot her prenant, she disco1ered that he )as not separated. Th"s, she
se1ered her relationship )ith him to a1oid dismissal d"e to the company policy. On 3o1ember .<, 1,,,, she met an accident and )as
ad1ised by the doctor at the Orthopedic 8ospital to rec"perate for 21 days. 5he ret"rned to )or2 on ?ecember 21, 1,,, b"t she fo"nd o"t
that her name )as on(hold at the ate. 5he )as denied entry. 5he )as directed to proceed to the personnel office )here one of the staff
handed her a memorand"m. The memorand"m stated that she )as bein dismissed for immoral cond"ct. 5he ref"sed to sin the
memorand"m beca"se she )as on lea1e for 21 days and has not been i1en a chance to e@plain. The manaement as2ed her to )rite an
e@planation. 8o)e1er, after s"bmission of the e@planation, she )as nonetheless dismissed by the company. ?"e to her "rent need for
money, she later s"bmitted a letter of resination in e@chane for her thirteenth month pay.
Issu&%
)hether the policy of the employer bannin spo"ses from )or2in in the same company 1iolates the rihts of the employee "nder the
Constit"tion and the 4abor Code or is a 1alid e@ercise of manaement preroati1e
H&'(%
Bes. A reH"irement that a )oman employee m"st remain "nmarried co"ld be E"stified as a 7bona fide occ"pational H"alification,> or !9OR,
)here the partic"lar reH"irements of the Eob )o"ld E"stify the same, b"t not on the ro"nd of a eneral principle, s"ch as the desirability of
spreadin )or2 in the )or2place. A reH"irement of that nat"re )o"ld be 1alid pro1ided it reflects an inherent H"ality reasonably necessary for
satisfactory Eob performance.
There is no reasonable b"siness necessity in the case at bar. Respondents )ere hired after they )ere fo"nd fit for the Eob, b"t )ere as2ed to
resin )hen they married a co(employee. ;etitioners failed to sho) ho) the marriae of 5imbol, then a 5heetin Machine Operator, to Alma
?ayrit, then an employee of the Repac2in 5ection, co"ld be detrimental to its b"siness operations. 3either did petitioners e@plain ho) this
detriment )ill happen in the case of 6ilfreda Comia, then a ;rod"ction 8elper in the 5electin ?epartment, )ho married 8o)ard Comia,
then a helper in the c"tter(machine. The policy is premised on the mere fear that employees married to each other )ill be less efficient. $f )e
"phold the H"estioned r"le )itho"t 1alid E"stification, the employer can create policies based on an "npro1en pres"mption of a percei1ed
daner at the e@pense of an employee:s riht to sec"rity of ten"re.
DUNCAN ASSOCIATION O" DETAILMAN7TG@O #*( EDRO A. TECSON v. GLAFO @ELLCOME HILIINES, INC.
G.R. No. 16499+ S&-t&01&, 15, 488+
"#$ts%
;edro A. Tecson )as hired by respondent #la@o 6ellcome ;hilippines, $nc. as medical representati1e. Tecson sined a contract of
employment )hich stip"lates, amon others, that he arees to st"dy and abide by e@istin company r"les0 to disclose to manaement any
e@istin or f"t"re relationship by consan"inity or affinity )ith co(employees or employees of competin dr" companies and sho"ld
manaement find that s"ch relationship poses a possible conflict of interest, to resin from the company.
$f manaement percei1es a conflict of interest or a potential conflict bet)een s"ch relationship and the employee:s employment )ith the
company, the manaement and the employee )ill e@plore the possibility of a 7transfer to another department in a non(co"nterchec2in
position> or preparation for employment o"tside the company after si@ months.
5"bseH"ently, Tecson entered into a romantic relationship )ith !ettsy, an employee of Astra ;harmace"ticals, a competitor of #la@o. !ettsy
)as Astra:s !ranch Coordinator in Albay. 5he s"per1ised the district manaers and medical representati1es of her company and prepared
mar2etin strateies for Astra in that area.
E1en before they ot married, Tecson recei1ed se1eral reminders from his ?istrict Manaer reardin the conflict of interest )hich his
relationship )ith !ettsy miht enender. 5till, lo1e pre1ailed, and Tecson married !ettsy in 5eptember 1,,-.
$n +an"ary 1,,,, Tecson:s s"periors informed him that his marriae to !ettsy a1e rise to a conflict of interest. Tecson:s s"periors reminded
him that he and !ettsy sho"ld decide )hich one of them )o"ld resin from their Eobs, altho"h they told him that they )anted to retain him
as m"ch as possible beca"se he )as performin his Eob )ell.
1//
Tecson reH"ested for time to comply )ith the company policy aainst enterin into a relationship )ith an employee of a competitor company.
8e e@plained that Astra, !ettsy:s employer, )as plannin to mere )ith Ueneca, another dr" company0 and !ettsy )as plannin to a1ail of
the red"ndancy pac2ae to be offered by Astra. 6ith !ettsy:s separation from her company, the potential conflict of interest )o"ld be
eliminated. At the same time, they )o"ld be able to a1ail of the attracti1e red"ndancy pac2ae from Astra.
$n A""st 1,,,, Tecson aain reH"ested for more time resol1e the problem. $n 5eptember 1,,,, Tecson applied for a transfer in #la@o:s mil2
di1ision, thin2in that since Astra did not ha1e a mil2 di1ision, the potential conflict of interest )o"ld be eliminated. 8is application )as denied
in 1ie) of #la@o:s 7least(mo1ement(possible> policy.
$n 3o1ember 1,,,, #la@o transferred Tecson to the !"t"an City(5"riao City(A"san del 5"r sales area. Tecson as2ed #la@o to reconsider
its decision, b"t his reH"est )as denied.
Tecson defied the transfer order and contin"ed actin as medical representati1e in the Camarines 5"r(Camarines 3orte sales area. ?"rin
the pendency of the rie1ance proceedins, Tecson )as paid his salary, b"t )as not iss"ed samples of prod"cts )hich )ere competin )ith
similar prod"cts
Issu&%
)hether #la@o:s policy aainst its employees marryin employees from competitor companies is 1alid
H&'(%
Bes. #la@o has a riht to "ard its trade secrets, man"fact"rin form"las, mar2etin strateies and other confidential prorams and
information from competitors, especially so that it and Astra are ri1al companies in the hihly competiti1e pharmace"tical ind"stry.
The prohibition aainst personal or marital relationships )ith employees of competitor companies "pon #la@o:s employees is reasonable
"nder the circ"mstances beca"se relationships of that nat"re miht compromise the interests of the company. $n layin do)n the assailed
company policy, #la@o only aims to protect its interests aainst the possibility that a competitor company )ill ain access to its secrets and
proced"res.
The challened company policy does not 1iolate the eH"al protection cla"se of the Constit"tion as petitioners erroneo"sly s"est. $t is a
settled principle that the commands of the eH"al protection cla"se are addressed only to the state or those actin "nder color of its a"thority.
The eH"al protection cla"se erects no shield aainst merely pri1ate cond"ct, ho)e1er, discriminatory or )ronf"l. The only e@ception occ"rs
)hen the state in any of its manifestations or actions has been fo"nd to ha1e become ent)ined or in1ol1ed in the )ronf"l pri1ate cond"ct.
Ob1io"sly, ho)e1er, the e@ception is not present in this case. 5inificantly, the company act"ally enforced the policy after repeated reH"ests
to the employee to comply )ith the policy. $ndeed, the application of the policy )as made in an impartial and e1en(handed manner, )ith d"e
reard for the lot of the employee.
$n any e1ent, from the )ordins of the contract"al pro1ision and the policy in its employee handboo2, it is clear that #la@o does not impose
an absol"te prohibition aainst relationships bet)een its employees and those of competitor companies. $ts employees are free to c"lti1ate
relationships )ith and marry persons of their o)n choosin. 6hat the company merely see2s to a1oid is a conflict of interest bet)een the
employee and the company that may arise o"t of s"ch relationships. As s"ccinctly e@plained by the appellate co"rt, th"s%
7The policy bein H"estioned is not a policy aainst marriae. An employee of the company remains free to marry anyone of his or her
choosin. The policy is not aimed at restrictin a personal preroati1e that belons only to the indi1id"al. 8o)e1er, an employee:s personal
decision does not detract the employer from e@ercisin manaement preroati1es to ens"re ma@im"m profit and b"siness s"ccess.>
The assailed company policy )hich forms part of respondent:s Employee Code of Cond"ct and of its contracts )ith its employees, s"ch as
that sined by Tecson, )as made 2no)n to him prior to his employment. Tecson, therefore, )as a)are of that restriction )hen he sined his
employment contract and )hen he entered into a relationship )ith !ettsy. 5ince Tecson 2no)inly and 1ol"ntarily entered into a contract of
employment )ith #la@o, the stip"lations therein ha1e the force of la) bet)een them and, th"s, sho"ld be complied )ith in ood faith.> 8e is
therefore estopped from H"estionin said policy.
ULTRA 6ILLA "OOD HAUS, #*(Io, ROSIE TIO v. RENATO GENISTON, NATIONAL LABOR RELATIONS COMMISSION RESIDING
COMMISSIONER ?+TH DI6ISIONA
G.R. No. 148+53 !u*& 43, 1999
"#$ts%
1/*
;ri1ate respondent alleed that he )as employed as a 7do it all "y.> actin as )aiter, dri1er, and maintenance man, in said resta"rant. 8is
employment therein spanned from March 1, 1,-, "ntil he )as dismissed on May 1., 1,,2. 9or his ser1ices, pri1ate respondent )as paid
;*<.<< in 1,-,, ;7<.<< in 1,,<, ;-<.<< in 1,,1 and ;,<.<< )hen he )as dismissed in 1,,2.
?"rin the elections of May 11, 1,,2, pri1ate respondent acted as a ;oll 6atcher for the 3ational Fnion of Christian ?emocrats. The
co"ntin of 1otes lasted "ntil .%<< p.m. the ne@t day, May 12. ;ri1ate respondent did not report for )or2 on both days on acco"nt of his poll(
)atchin.
Fpon arri1in home on May 12, pri1ate respondent disco1ered that Tio had phoned his mother that mornin. Tio alleedly a1e his mother
7an inscr"table 1erbal lashin,> and informed the latter that pri1ate respondent )as dismissed from )or2. On May 1., 1,,2, pri1ate
respondent )ent to Tio:s residence to plead his case only to be s"bEected to a 7bro) beatin> by Tio )ho e1en attempted to force him to sin
a resination letter.
;ri1ate respondent prayed that the 4abor Arbiter order petitioner Tio to pay him o1ertime pay, premi"m pay, holiday pay, ser1ice incenti1e
lea1e pay, salary differential and 1.th month pay. 8e li2e)ise prayed for reinstatement pl"s bac2)aes or, in the alternati1e, separation pay,
as )ell as moral damaes, e@emplary damaes and attorney:s fees.
Tho"h )ell a)are that May 12, 1,,2 )as a holiday, petitioner called "p pri1ate respondent that day to as2 him to report for )or2 as she had
some important matters to attend to. ;ri1ate respondent:s )ife, ho)e1er, coldly told petitioner that pri1ate respondent )as helpin in the
co"ntin of ballots. ;etitioner )as th"s forced to hire another dri1er to replace pri1ate respondent. ;ri1ate respondent came bac2 a )ee2
after b"t only to collect his salary.
Issu& K1%
)hether pri1ate respondent )as an employee of the Fltra Dilla 9ood 8a"s or the personal dri1er of petitioner and )hether pri1ate respondent
)as illeally dismissed from employment
H&'( K1%
Bes. ;ri1ate respondent )as indeed the personal dri1er of petitioner, and not an employee of the Fltra Dilla 9ood 8a"s. Accordinly, the
terms and conditions of pri1ate respondent:s employment are o1erned by Chapter $$$, Title $$$, !oo2 $$$ of the 4abor Code as )ell as by the
pertinent pro1isions of the Ci1il Code.
Chapter $$$, Title $$$, !oo2 $$$, ho)e1er, is silent on the rant of o1ertime pay, holiday pay, premi"m pay and ser1ice incenti1e lea1e to those
enaed in the domestic or ho"sehold ser1ice.
Moreo1er, the specific pro1isions mandatin these benefits are fo"nd in !oo2 $$$, Title $ of the 4abor Code, and Article -2, )hich defines the
scope of the application of these pro1isions, e@pressly e@cl"des domestic helpers from its co1erae. Clearly then, petitioner is not oblied by
la) to rant pri1ate respondent any of these benefits.
$t )o"ld seem that pri1ate respondent is not entitled to 1.th month pay. 3e1ertheless, the Co"rt deemed it E"st to a)ard pri1ate respondent
1.th month pay in 1ie) of petitioner:s practice of accordin pri1ate respondent s"ch benefit. $ndeed, petitioner admitted that she a1e pri1ate
respondent 1.th month pay e1ery ?ecember.
$ss"e Z2%
)hether pri1ate respondent abandoned his Eob
H&'( K4%
3o. To constit"te abandonment, t)o reH"isites m"st conc"r% &1' the fail"re to report to )or2 or absence )itho"t 1alid or E"stifiable reason,
and &2' a clear intention to se1er the employer(employee relationship as manifested by some o1er acts, )ith the second reH"isites as the
more determinati1e factor. The b"rden of pro1in abandonment as a E"st ca"se for dismissal is on the employer.
$t is H"ite "nbelie1able that pri1ate respondent )o"ld lea1e a stable and relati1ely )ell payin Eob as petitioner:s family dri1er to )or2 as an
election )atcher. Tho"h the latter may pay more in a day, elections in this co"ntry are so far in bet)een that it is "nli2ely that any person
)o"ld abandon his Eob to embar2 on a career as an election )atcher, the f"nctions of )hich are seasonal and temporary in nat"re.
ConseH"ently, )e do not find pri1ate respondent to ha1e abandoned his Eob. 8is dismissal from petitioner:s employ bein "nE"st, petitioner is
entitled to an indemnity "nder Article 14, of the 4abor Code%
1/7
7Art. 14,. $ndemnity for "nE"st termination of ser1ices. K $f the period of ho"sehold ser1ice is fi@ed, neither the employer nor the ho"sehelper
may terminate the contract before the e@piration of the term, e@cept for a E"st ca"se. $f the ho"sehelper is "nE"stly dismissed, he or she shall
be paid the compensation already earned pl"s that for fifteen &1/' days by )ay of indemnity.
$f the ho"sehelper lea1es )itho"t E"stifiable reason he or she shall forfeit any "npaid salary d"e him or her not e@ceedin fifteen &1/' days.>
MENANDRO B. LAUREANO v. COURT O" AEALS AND SINGAORE AIRLINES LIMITED
G.R. No. 11+556 "&1,u#,2 4, 4888
"#$ts%
Menandro !. 4a"reano, then ?irector of 9liht Operations and Chief ;ilot of Air Manila, applied for employment )ith pri1ate respondent
thro"h its Area Manaer in Manila. After the "s"al personal inter1ie), defendant )rote to plaintiff, offerin a contract of employment as an
e@patriate !(7<7 captain for an oriinal period of 2 years commencin on +an"ary 21, 1,7-. ;etitioner accepted the offer and commenced
)or2in on +an"ary 2<, 1,7,. After passin the si@(month probation period, petitioner:s appointment )as confirmed effecti1e +"ly 21, 1,7,.
;ri1ate respondent offered petitioner an e@tension of his t)o(year contract to / years effecti1e +an"ary 21, 1,7, to +an"ary 2<, 1,-4 s"bEect
to the terms and conditions set forth in the contract of employment, )hich the latter accepted.
5ometime in 1,-2, ;ri1ate respondent hit by a recession, initiated cost(c"ttin meas"res. 17 e@patriate captains in the Airb"s fleet )ere
fo"nd in e@cess of the pri1ate respondent:s reH"irement. ConseH"ently, pri1ate respondent informed its e@patriate pilots incl"din plaintiff of
the sit"ation and ad1ised them to ta2e ad1ance lea1es. RealiCin that the recession )o"ld not be for a short time, pri1ate respondent
decided to terminate its e@cess personnel. $t did not, ho)e1er, immediately terminate it:s A(.<< pilots. $t re1ie)ed their H"alifications for
possible promotion to the !(747 fleet. Amon the 17 e@cess Airb"s pilots re1ie)ed, t)el1e )ere fo"nd H"alified. Fnfort"nately, petitioner )as
not one of the t)el1e.
;ri1ate respondent informed petitioner of his termination effecti1e 3o1ember 1, 1,-2 and that he )ill be paid . months salary in lie" of three
months notice. !eca"se he co"ld not "proot his family on s"ch short notice, petitioner reH"ested a three(month notice to afford him time to
e@ha"st all possible a1en"es for reconsideration and retention. ;etitioner a1e only 2 months notice and 1 month salary. Arie1ed, plaintiff
on +"ne 2,, 1,-., instit"ted a case for illeal dismissal before the 4abor Arbiter. ;etitioner mo1ed to dismiss on E"risdiction ro"nds. !efore
said motion )as resol1ed, the complaint )as )ithdra)n. Thereafter, petitioner filed the instant case for damaes d"e to illeal termination of
contract of ser1ices before the co"rt a &!o
Issu& K1%
$s the present action based on contract )hich prescribes in 1< years "nder Art. 1144 of the 3CC or one for damaes arisin from an inE"ry to
the rihts of the petitioner )hich prescribes in 4 years "nder Art. 114* of the 3CCL
H&'( K1%
3either Article 1144
7
nor Article 114*
-
of the Ci1il Code is here pertinent. 6hat is applicable is Article 2,1 of the 4abor Code, vi,%
7Art. 2,1. 'oney claims. K All money claims arisin from employee(employer relations accr"in d"rin the effecti1ity of this Code shall be
filed )ithin three &.' years from the time the ca"se of action accr"ed0 other)ise they shall be fore1er barred.>
$n illeal dismissal, it is settled, that the ten(year prescripti1e period fi@ed in Article 1144 of the Ci1il Code may not be in1o2ed by petitioners,
for the Ci1il Code is a la) of eneral application, )hile the prescripti1e period fi@ed in Article 2,2 of the 4abor Code Ino) Article 2,1J is a
5;EC$A4 4A6 applicable to claims arisin from employee(employer relations.
$n the liht of Article 2,1, aforecited, )e aree )ith the appellate co"rt:s concl"sion that petitioner:s action for damages d!e to illegal
termination filed aain on +an"ary -, 1,-7 or more than fo"r &4' years after the effecti1e date of his dismissal on 3o1ember 1, 1,-2 has
already prescribed.
Issu& K4%
)hether petitioner:s separation from the company d"e to retrenchment )as 1alid
H&'( K4%
Bes. The employment contract of petitioner allo)ed for pre(termination of employment. Contracts ha1e the force of la) bet)een the parties.
1/-
HIL. INTEGRATED LABOR ASSISTANCE CORORATION v. NATIONAL LABOR RELATIONS COMMISSION AND LEONORA L.
DAYAG
G.R. No. 14339+ Nov&01&, 19, 1996
"#$ts%
?issatisfied )ith her income as a ?56? social )or2er, 4eonora ?aya applied )ith petitioner ;hilippine $nterated 4abor Assistance
Corporation &;8$4AC' for employment abroad. After complyin )ith the reH"irements for o1erseas employment, ?aya paid a placement fee
of ;22,/<< on fi1e different occasions. ;8$4AC, ho)e1er, did not iss"e complete receipts co1erin s"ch payments informin ?aya that
s"ch receipts are 7"nnecessary> beca"se the payments )ere recorded in a lo boo2.
?aya sined an employment contract )ith ;8$4AC pro1idin for a fi@ed t)o(year term as a domestic helper=babysitter in 8on2on )ith a
monthly salary of 8PM.,2<< and an allo)ance of 8PM2<=day. 5he left for 8on2on on May 7, 1,,2 and started )or2in the follo)in day as
the domestic helper of Roer Chan Chan 8on:s family. On the se1enth day of her )or2, ?aya )as s"ddenly told by Mr. 8on:s )ife to
7pac2("p> and 7lea1e> at once. 5he )as i1en 8PM7/< for the ser1ices rendered. Fpon her ret"rn, ?aya filed a complaint for illeal
dismissal, illeal e@action for non(iss"ance of receipts and payment of 8PM7*,<<< &salary and allo)ance' for the "ne@pired portion of the
contract )ith the ;hilippine O1erseas Employment Aency &;OEA'. ;8$4AC co"ntered that ?aya:s dismissal )as for ca"se d"e to
7dishonesty> and 7misrepresentation> in her application that she )as pre1io"sly employed as a ho"sehelper and that she is an e@perienced
baby sitter thereby alleedly e@posin Mr. 8on:s baby to ris2s.
Issu&%
)hether petitioner:s liability is limited only to a 1/(day salary of the employee "nder Article 14, of the 4abor Code and not to the salary
correspondin to the "ne@pired portion of the employment contract
H&'(%
3o. &see Art. 14,' The 1/(day salary is a)arded in the form of an indemnity d"e to "nE"st dismissal, i.e., dismissal )itho"t E"st ca"se and
notice and before the lapse of the contract term. The amo"nt is in addition to and not a s"bstit"te for the ho"sehelper:s salary for the
"ne@pired portion of the contract. The 5alary for the "ne@pired portion of the contract, as a settled r"le, is a)arded as a res"lt of the 1iolation
of her sec"rity of ten"re "nder the contract term.
;etitioner, as the recr"iter and aent of the forein employer, is solidarily liable )ith the latter for s"ch 1iolations and for the correspondin
a)ard. 8o)e1er, considerin that ?aya failed to appeal the monetary a)ard i1en by the ;OEA, )e cannot therefore rant her the
additional affirmati1e relief constit"tin the 1/(day indemnity a)ard )hich the ;OEA and the 34RC failed to rant.
NATIONAL SUGAR RE"INERIES CORORATION, ARSENIO B. YULO, #*( CONRADO 6IADAD v. NATIONAL LABOR RELATIONS
COMMISSION, BEN!AMIN L. GUIMBA, #*( !ENNY LAGRANA ?)* ,&-,&s&*t#t)o* o/ .&, '#t& .us1#*( MONICO LAGRANAA
G. R. No. 114939 7 !u*& 41, 1999
"#$ts%
$n 1,*,, respondent R"imba )as detailed as a )areho"seman in the Calino 4amb"nao 5"armill, $nc., a sister corporation of petitioner
3ational 5"ar Refineries Corporation &3A5FRE9CO', "ntil his transfer to petitioner corporation ten years later. On the other hand,
respondent 4arana started )or2in for 3A5FRE9CO in 1,7, as s"ar c"t(in con1eyor tender. Thro"h the years the t)o )ere promoted
"ntil R"imba became the s"ar )areho"se s"perintendent and 4arana, the s"ar )areho"se s"per1isor. These )ere the positions they
)ere holdin )hen they )ere dismissed 1,-,. At that time, R"imba had ser1ed the company and its sister corporation for 2< years and 1<
months, )hile 4arana had ser1ed 3A5FRE9CO for 1< years and 4 months.
5ometime in A""st 1,--, 3A5FRE9CO held a biddin for the sale of "sed E"te bas. +el Mar2etin )on the riht to p"rchase 1<<,<<<
pieces of class C bas. The manaement committee in chare of the disposal of the bas, of )hich respondent R"imba )as a member,
desinated the latter to s"per1ise the )ithdra)al of the sac2s from the 3A5FRE9CO compo"nd. As the class C bas )ere mi@ed )ith the
more e@pensi1e types &classes A and !', it )as areed that the b"yer, +el Mar2etin, )o"ld send its o)n personnel to 3A5FRE9CO for the
sortin, co"ntin, and b"ndlin &5C!' of the 1<<,<<< bas into b"ndles of *<<. +el Mar2etin )as to )ithdra) /<,<<< bas in October 1,--
b"t only 4-,<<< )ere sereated from the stoc2pile. 6hen its )or2ers tried to sort and b"ndle the remainin 2,<<< bas, pri1ate respondents
did not allo) them as some bas )ere mi@ed )ith class A ones./ As a res"lt, +el Mar2etin )as only able to )ithdra) 4-,<<< bas. 6hen
the )or2ers came bac2 on 3o1ember 12, 1,-- for the remainin bas, respondent R"imba directed respondent 4arana to ha1e Rodolfo
4ilia, a "tility man on floatin stat"s, s"per1ise the sortin and b"ndlin of bas, )hich lasted "ntil 3o1ember 17, 1,--.
On 3o1ember 2., 1,--, +el Mar2etin sent t)o tr"c2s to petitioner:s Calino plant to pic2 "p the sac2s. The ate pass co1erin the bas
)as sined by respondent R"imba, ;aH"ito Rebote, representin +el Mar2etin, and E@pedito !"ena, representin 3A5FRE9CO:s eneral
1/,
manaer, Conrado Diadad. Fpon inspection of the tr"c2s: caro at the ate, the "ard disco1ered that the b"ndles )ere padded. A reco"nt
sho)ed an e@cess of 2<,/<< bas )orth ;124,7-7./<.
$n his report on the same day to respondent R"imba, respondent 4arana e@plained that d"e to the assinment of )or2ers in the retrie1al of
b"rnt sac2s and liH"idation of ra) s"ar, )as able to assin only one person, 4ilia, to )atch the sortin of the bas. 8e added that on 4ilia:s
day off on 3o1ember 17, 1,--, he assined three other )or2ers to the Eob. $n another report, dated 3o1ember 2/, 1,--, 4arana
recommended the s"spension of 4ilia for thirty days for nelect of d"ty. $n t"rn, R"imba s"bmitted a report of the incident to Arsenio del
Rosario, the administrati1e manaer of 3A5FRE9CO, attachin 4arana:s first report.
$n the third H"arter of 1,-,, the manaement noted a shortae of -,72- pic"ls of ra) s"ar from its stoc2. The matter )as promptly reported
to 3A5FRE9CO:s head office in Manila. Actin on the report, the board of directors of 3A5FRE9CO created a committee to in1estiate not
only the reported s"ar losses b"t also the attempted theft of "sed bas earlier.
On A""st 1<, 1,-,, pri1ate respondents )ere placed on a .<(day pre1enti1e s"spension. 4ilia )as s"spended for .< days, effecti1e A""st
,, 1,-,, for nelect of d"ty in connection )ith the sortin and b"ndlin of the "sed bas in 3o1ember 1,--. On 5eptember *, 1,-,, pri1ate
respondents: s"spensions )ere e@tended for another .< days pendin the in1estiation by the committee. $n addition, they )ere reH"ired to
e@plain in )ritin )hy they sho"ld not be dismissed for ross nelience sortin and b"ndlin and breach of tr"st. $n d"e time, both
s"bmitted their )ritten e@planations.
;ri1ate respondents R"imba and 4arana recei1ed memoranda informin them of their dismissal, effecti1e 3o1ember 1<, 1,-,, for ross
nelience and loss of tr"st in connection )ith the )ithdra)al of the "sed bas. ;ri1ate respondents R"imba and 4arana recei1ed
memoranda informin them of their dismissal.
Issu&%
)hether pri1ate respondents )ere illeally dismissed
H&'(%
Bes. ;ri1ate respondents )ere "ilty of nelience in connection )ith the )ithdra)al of "sed bas by +el Mar2etin. 8o)e1er, their
nelience )as neither ross nor habit"al so as to )arrant their dismissal from employment.
Respondents )ere remiss in their s"per1ision of the )ithdra)al of the sac2s by the b"yer +el Mar2etin. $t is "ncontro1erted that +el
Mar2etin )as s"pposed to )ithdra) /<,<<< class C bas from the 3A5FRE9CO compo"nd in October 1,--. 8o)e1er, the b"yer )as able
to ta2e o"t only 4-,<<< sac2s. $n his report to administrati1e manaer del Rosario on 3o1ember 1/, 1,,-, respondent R"imba e@plained,
amon others%
7At abo"t .%.< ;.M., Mr. !enEamin R"imba, the 5"ar 6areho"se 5"perintendent, came to me and told me to )atch o1er the b"ndlin of
empty bas beca"se nobody )as )atchin o1er that )or2. The area )here the b"ndlin of empty bas )as bein done )as near the place
)here $ )as )or2in beca"se it )as E"st beside the Ra) 5"ar 6areho"se. $mmediately after Mr. R"imba a1e me that assinment, $ )ent
to the area )here the b"ndlin of empty bas )as bein done b"t )hen $ arri1ed there $ fo"nd that the b"ndlin )as already completed so
that $ immediately ret"rned to my pre1io"s )or2 of scrapin s"ar.>
Respondent R"imba himself admitted to Arsenio del Rosario, the administrati1e manaer, that one man alone co"ld not s"per1ise the )ee2(
lon sortin, co"ntin, and b"ndlin of 42,<<< sac2s. 9"rthermore, as earlier mentioned, respondent R"imba, in a memorand"m, dated
3o1ember 2/, 1,--, e1en reH"ired respondent 4arana to e@plain, )ithin 4- ho"rs, )hy he sho"ld not be s"spended for nelect of d"ty in
the s"per1ision of the )ee2(lon sortin, co"ntin, and b"ndlin of the "sed bas.
Respondent R"imba co"ld ha1e pre1ented the attempted pilferae of the enormo"s n"mber of e@cess bas by orderin a final chec2 of the
b"ndles before iss"in the ate pass to ;aH"ito Rebote, the representati1e of +el Mar2etin. $t )as sho)n d"rin the hearin that the pass,
)hich )o"ld ha1e been eno"h for the tr"c2s to lea1e the compo"nd, )as prepared by the )areho"se department )hich respondent
R"imba heads. $t )as dated 3o1ember 2., 1,--, the day of the bas: )ithdra)al, and sined by respondent R"imba, ;aH"ito Rebote, and
E@pedito !"ena. Pno)in that sac2s )orth ;,*,*<<.<< )ere abo"t to be ta2en o"t of the compo"nd by 1irt"e of the ate pass, the least that
respondent R"imba co"ld ha1e done )as to ha1e a b"ndle do"ble(chec2ed before sinin the pass.
Respondent R"imba testified that the iss"ance of the ate pass is ro"tine "pon payment of the bas. E1en so, this does not e@c"se his
fail"re to order a do"ble(chec2 considerin that the bas )ere sorted, co"nted, and b"ndled for fi1e days by people hired by the b"yer )ith
only one 3A5FRE9CO personnel to )atch them, not to mention the fact that the b"yer had earlier been in1ol1ed in irre"larities in
connection )ith the first )ithdra)al of bas in October 1,--.
1*<
There are, ho)e1er, a n"mber of factors )hich mitiate pri1ate respondents: shortcomins. 9irstly, this is their first offense. Fnder Art. 2-2
par. &b' of the 4abor Code, habit"ally, that is, repetition of similar acts, is an indispensable element for dismissals d"e to ross nelience.
;etitioners ar"e that this condition )as met beca"se the sortin of the bas too2 place from 3o1ember 12 to 17, 1,--, th"s, pri1ate
respondents )ere alleedly nelient on more than one occasion. The reasonin is fla)ed. The entire sortin and b"ndlin of the sac2s
constit"tes a sinle operation and sho"ld not be di1ided into parts.
Moreo1er, pri1ate respondents did not really ha1e m"ch choice in assinin only one man to )atch the sortin and b"ndlin of the sac2s as it
is "ncontro1erted that )hen +el Mar2etin )or2ers came bac2 on 3o1ember 12, 1,--, the )areho"se department )as b"sy )ith other
acti1ities.
5econdly, petitioners ha1e not presented e1idence to s"pport their claim of loss of confidence in pri1ate respondents. Art. 2-2 par. &c' of the
4abor Code pro1ides%
7Art. 2-2. Termination by employer ( An employer may terminate an employee for any of the follo)in ca"ses%
@ @ @
7&c' . . . )illf"l breach by the employee of the tr"st reposed in him employer.>
$n )i! v. *ational Labor Relations #ommission, it )as e@plained%
7$n the lan"ae of the aforeH"oted Article 2-I2J &c' of the 4abor Code, the Iloss of confidenceJ m"st be based on the )illf"l breach of the
tr"st reposed in the employee by his employer. Ordinary breach )ill not s"ffice0 it m"st be )illf"l. 5"ch breach is )illf"l if it is done
intentionally, 2no)inly, and p"rposely, )itho"t E"stifiable e@c"se, as distin"ished from an act done carelessly, tho"htlessly or
inad1ertently. I9"rthermoreJ, it m"st be based on s"bstantial e1idence.>
Clearly, pri1ate respondents: nelient acts cannot fall "nder this cateory.
Thirdly, petitioners themsel1es are not )itho"t blame. As noted by the 4abor Arbiter, it )as "n"s"al for 3A5FRE9CO to s"spend pri1ate
respondents only on 5eptember *, 1,-,, nearly ten months after the letter )ere first in1estiated for the attempted theft of the "sed sac2s.
;etitioners e@plain that this )as necessary for the 7E"dicio"s appraisal and deliberation on the merits of the chares aainst Ipri1ate
respondentJ.
The contention is "ntenable beca"se d"rin the interim, petitioner practically dropped the matter as pri1ate respondents )ere ne1er
reprimanded and no mention )as e1er made of the incident. $t )o"ld appear that petitioners did not really lose confidence in pri1ate
respondents beca"se of this incident. $t )as only after the iss"e on the p"rported s"ar losses came o"t that they re1i1ed this matter.
8o)e1er, petitioners, in this appeal, ha1e abandoned their claim that pri1ate respondents are responsible for the latter. This co"ld only mean
that they ha1e accepted pri1ate respondents: e@planation that the alleed losses )ere act"ally ca"sed by the "nderstatement of )eihts in
the 8opper scale. $t is, therefore, no) late for petitioners to con1ince the Co"rt of somethin &that they ha1e lost confidence in pri1ate
respondents' )hich in the first place they themsel1es did not belie1e in.
DA6AO "RUITS CORORATION v. ASSOCIATED LABOR UNIONS ?ALUA /o, )* 1&.#'/ o/ #'' t.& ,#*>7#*(7/)'& 3o,>&,sI&0-'o2&&s o/
DA6AO "RUITS CORORATION #*( NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 89853 August 4+, 1993
"#$ts%
Respondent Associated 4abor Fnions &A4F', for and in behalf of all the ran2(and(file )or2ers and employees of petitioner, filed a complaint
before the Ministry of 4abor and Employment, Reional Arbitration !ranch, aainst petitioner, for V;ayment of the Thirteenth(Month ;ay
?ifferentials.V Respondent A4F so"ht to reco1er from petitioner the thirteenth month pay differential for 1,-2 of its ran2(and(file employees,
eH"i1alent to their sic2, 1acation and maternity lea1es, premi"m for )or2 done on rest days and special holidays, and pay for re"lar
holidays )hich petitioner, alleedly in disreard of company practice since 1,7/, e@cl"ded from the comp"tation of the thirteenth month pay
for 1,-2.
$n its ans)er, petitioner claimed that it erroneo"sly incl"ded items s"bEect of the complaint in the comp"tation of the thirteenth month pay for
the years prior to 1,-2, "pon a do"btf"l and diffic"lt H"estion of la).
Issu&%
1*1
)hether in the comp"tation of the thirteenth month pay i1en by employers to their employees "nder ;.?. 3o. -/1, payments for sic2,
1acation and maternity lea1es, premi"ms for )or2 done on rest days and special holidays, and pay for re"lar holidays may be e@cl"ded in
the comp"tation and payment thereof, reardless of lon(standin company practice
H&'(%
Bes. ;residential ?ecree 3o. -/1, prom"lated on ?ecember 1*, 1,7/, mandates all employers to pay their employees a thirteenth month
pay. 8o) this pay shall be comp"ted is set forth in 5ection 2 of the VR"les and Re"lations $mplementin ;residential ?ecree 3o. -/1,V th"s%
75ECT$O3 2. . . .
7&a' VThirteenth month payV shall mean one t)elfth &1=12' of the basic salary of an employee )ithin a calendar year.
7&b' V!asic 5alaryV shall incl"de all rem"nerations or earnins paid by an employer to an employee for ser1ices rendered b"t may not incl"de
cost of li1in allo)ances ranted p"rs"ant to ;residential ?ecree 3o. /2/ or 4etter of $nstr"ctions 3o. 174, profit(sharin payments, and all
allo)ances and monetary benefits )hich are not considered or interated as part of the re"lar or basic salary of the employee at the time of
the prom"lation of the ?ecree on ?ecember 1*, 1,7/.>
The ?epartment of 4abor and Employment iss"ed on +an"ary 1*, 1,7* the V5"pplementary R"les and Re"lations $mplementin ;.?. 3o.
-/1V )hich in pararaph 4 thereof f"rther defines the term Vbasic salary,V th"s%
74. O1ertime pay, earnins and other rem"nerations )hich are not part of the basic salary shall not be incl"ded in the comp"tation of the 1.th
month pay.>
Clearly, the term Vbasic salaryV incl"des rem"nerations or earnins paid by the employer to employee, b"t e@cl"des cost(of(li1in allo)ances,
profit(sharin payments, and all allo)ances and monetary benefits )hich ha1e not been considered as part of the basic salary of the
employee as of ?ecember 1*, 1,7/. The e@cl"sion of cost(of(li1in allo)ances and profit sharin payments sho)s the intention to strip
Vbasic salaryV of payments )hich are other)ise considered as VfrineV benefits. This intention is emphasiCed in the catch all phrase Vall
allo)ances and monetary benefits )hich are not considered or interated as part of the basic salary.V !asic salary, therefore does not merely
e@cl"de the benefits e@pressly mentioned b"t all payments )hich may be in the form of VfrineV benefits or allo)ances. O1ertime pay,
earnins and other rem"nerations shall be e@cl"ded in comp"tin the thirteenth month pay.
$n other )ords, )hate1er compensation an employee recei1es for an eiht(ho"r )or2 daily or the daily )ae rate in the basic salary. Any
compensation or rem"neration other than the daily )ae rate is e@cl"ded. $t follo)s therefore, that payments for sic2, 1acation and maternity
lea1es, premi"m for )or2 done on rest days special holidays, as )ell as pay for re"lar holidays, are li2e)ise e@cl"ded in comp"tin the
basic salary for the p"rpose of determinin the thirteen month pay.
8o)e1er, in the case at bar, from 1,7/ to 1,-1, petitioner had freely, 1ol"ntarily and contin"o"sly incl"ded in the comp"tation of its
employees\ thirteenth month pay, the payments for sic2, 1acation and maternity lea1es, premi"ms for )or2 done on rest days and special
holidays, and pay for re"lar holidays. A company practice fa1orable to the employees had indeed been established and the payments made
p"rs"ant thereto, ripened into benefits enEoyed by them. And any benefit and s"pplement bein enEoyed by the employees cannot be
red"ced, diminished, discontin"ed or eliminated by the employer, by 1irt"e of 5ection 1< of the R"les and Re"lations $mplementin ;.?. 3o.
-/1, and Article 1<< of the labor of the ;hilippines, )hich prohibit the dimin"tion or elimination by the employer of the employees\ e@istin
benefits.
1*2

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