Professional Documents
Culture Documents
Relations Commission which agreed with the Labor Arbiters decision. The
National Labor Relations Commission denied Santos motion for
reconsideration. This motivated Santos to file a petition before the Court
of Appeals which agrred with the Commissions decision. Thus, the
petitioners filed a petition before the Supreme Court.
Issue: Whether or not Santos was illegally dismissed by her employer on
the basis of her inability to secure a certificate of registration from the
Board of Radiologic Technology.
Held: No. Section 2 of R.A. 7431 states: It is the policy of the State to
upgrade the practice of radiologic technology in the Philippines for the
purpose of protecting the public from the hazards posed by radiation as
well as to ensure safe and proper diagnosis, treatment and research
through the application of machines and/or equipment using radiation.
One of the states inherent powers is police power. Through the states
police power, it can lay down some regulations in order to improve the
health, morals, educations, good order, safety or general welfare of the
people. The state is justified in prescribing the specific requirements for xray technicians and/or any other professions connected with the health
and safety of its citizens. Santos, being a practitioner in the medical field,
must follow the law and cannot come above the law and override public
interest.
Collective Bargaining Agreements (CBA)
DOLE Philippines vs. Pawis ng Makabayang Obrero
G.R. No. 146650
DOLE PHILIPPINES, INC., petitioner vs.
PAWIS NG MAKABAYANG OBRERO (PAMAO-NFL)
January 13, 2003
Facts: Dole Philippines Inc. and Pawis ng Makabayang Obrero entered into
a collective bargaining agreement which was supposed to last for five
years. The collective bargaining agreement provides that Dole will give its
employees a meal allowance of 10.00 pesos who will render actual
overtime work for at least 2 hours, not exceeding 25.00 pesos after 3
hours of actual overtime work.
Despite the agreement pertained in the collective bargaining agreement
, some of Doles departments granted free meals after exactly three
hours while other departments only give free meals after employees have
rendered more than 3 hours of actual overtime work. Both parties decided
2 | Labor Standards - Case Digests
and dismissed the appeal for lack of merit. Petitioner filed a Motion for
Reconsideration, but the same was denied. Hence, the present petition.
Issue: Whether or not private respondents are entitled to separation pay.
Held: Yes. Article 284 of the Labor Code, as amended by B.P. Blg. 130, is
the law applicable in this case. The purpose of Article 284, as amended, is
obvious the protection of the workers whose employment is terminated
because of the closure of establishment and reduction of personnel.
Without said law, employees like private respondents in the case at bar
will lose the benefits to which they are entitled for the thirty three years
of service in the case of Dionele, and fourteen years in the case of Quitco.
Although they were absorbed by the new management of the hacienda, in
the absence of any showing that the latter has assumed the
responsibilities of the former employer, they will be considered as new
employees and the years of service behind them would amount to
nothing.
It is well-settled that in the implementation and interpretation of the
provisions of the Labor Code and its implementing regulations, the
workingman's welfare should be the primordial and paramount
consideration. It is the kind of interpretation which gives meaning and
substance to the liberal and compassionate spirit of the law as provided
for in Article 4 of the New Labor Code which states that "all doubts in the
implementation and interpretation of the provisions of this Code including
its implementing rules and regulations shall be resolved in favor of labor."
The policy is to extend the applicability of the decree to a greater number
of employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and
protection to labor.
The instant petition is hereby dismissed and decision of the Labor Arbiter
and the resolution of the Ministry of Labor and Employment are hereby
affirmed.
Manaya vs. Alabang Country Club
G.R. No. 168988
FERNANDO G. MANAYA vs.
ALABANG COUNTRY CLUB INCORPORATED
June 19, 2007
work for the respondent until 22 August 1998 when the latter, through its
Engineering and Maintenance Department Manager, Engr. Ronnie B. de la
Cruz, informed him that his services were no longer required by the
company. Petitioner alleged that he was forcibly and illegally dismissed
without cause and without due process on August 22, 1998. Hence, he
filed a Complaint before the Labor Arbiter. He claimed that he had not
committed any infraction of company policies or rules and that he was not
paid his service incentive leave pay, holiday pay and 13th month pay. He
further asserted that with his more or less nine years of service with the
respondent, he had become a regular employee. He, therefore, demanded
his reinstatement without loss of seniority rights with full backwages and
all monetary benefits due him.
Respondent filed a Motion for Reconsideration, which the NLRC denied the
same. Respondent filed a Petition for Certiorari under Rule 65 of the Rules
of Court before the Court of Appeals. In a Decision, the Court of Appeals
granted the petition and ordered the NLRC to give due course to
respondents appeal of the Labor Arbiters Decision. Petitioner filed a
Motion for Reconsideration which was denied by the Court of Appeals in a
Resolution dated 21 July 2005. Not to be dissuaded, petitioner filed the
instant petition before this Court.
This Court has repeatedly ruled that delay in the settlement of labor cases
cannot be countenanced. Not only does it involve the survival of an
employee and his loved ones who are dependent on him for food, shelter,
clothing, medicine and education; it also wears down the meager
resources of the workers to the point that, not infrequently, they either
give up or compromise for less than what is due them. Without doubt, to
allow the appeal of the respondent as what the Court of Appeals had done
and remand the case to the NLRC would only result in delay to the
detriment of the petitioner.
8 | Labor Standards - Case Digests
Nothing is more settled in our jurisprudence than the rule that when the
conflicting interest of loan and capital are weighed on the scales of social
justice, the heavier influence of the latter must be counter-balanced by
the sympathy and compassion the law must accord the under-privileged
worker.
Clemente vs. GSIS
G.R. No. L-47521
CAROLINA CLEMENTE vs.
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), DEPARTMENT
OF HEALTH (DAGUPAN CITY) AND EMPLOYEES COMPENSATION
COMMISSION
July 31, 1987
Facts: Petitioners husband, Pedro Clemente, was for ten (10) years a
janitor in the Department of Health (Dagupan City), assigned at the Ilocos
Norte Skin Clinic, Laoag City. On November 14, 1976, Pedro Clemente died
of uremia due to nephritis. GSIS denied the claim of benefits because they
found the cause of death not an occupational disease. Petitioner
requested for reconsideration of the GSIS decision, contending that the
ailments of her husband were contracted in the course of his employment
and were aggravated by the nature of his work, as he was exposed to
persons suffering with different skin diseases. The Employees
Compensation Commission affirmed the GSIS decision stating that
Pedros ailments were not listed as an occupational disease. The GSIS
concurs with the views of the respondent Commission. However, it argues
that it should be dropped as a party respondent in this case.
Issue: Whether or not the petitioner can claim death benefits from GSIS.
Held: Yes. Carolina Clemente may claim benefits from the GSIS. The GSIS
maintains that Pedro had the diseases even before his employment with
the Department of Health. The fallacy in this theory lies in the failure to
explain how a sick person was able to enter the government service more
than ten years before he became too ill to work and at a time when
aggravation of a disease was compensable. There is no evidence that Mr.
Clemente was hired inspite of having and existing disease liable to
become worse. When there are two or more possible explanations
regarding an issue of compensability that which forms the claimant must
be chosen.
Colgate Palmolive Philippines, Inc. vs. Ople
G.R. No. 73681
COLGATE PALMOLIVE PHILIPPINES, INC. vs.
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out that her table, chair, and other belongings were moved to a corner of
their office, and she was replaced by Annie Roxas, daughter of petitioner
Adoracion Roxas. She tried to contact her employer but the latter could
not be found within the school premises.
On March 25, 1992, petitioners sent private respondent a letter by
registered mail, informing her that her contract, due to expire on March
31, 1992, would not be renewed. Prior thereto, or on March 3, 1992, to be
precise, the private respondent instituted NLRC NCR Case No. 00-0301481-92 against the herein petitioners for unfair labor practice based on
harassment, illegal dismissal, 13th month pay, allowances, removal of desk
and chair form place of work, and refusal to communicate, moral and
exemplary damages.
The Labor Arbiter rendered a decision declaring the complainants
dismissal from the service illegal. Petitioners appealed the aforesaid
decision to the NLRC whereby it reversed and set aside the Labor Arbiters
decision and rendered another decision declaring the separation of Esther
Reyes from service legal and valid.
Issue: Whether or not the employment contract is valid.
Held: Yes. Article 280 of the Labor Code does not proscribe or prohibit an
employment contract with a fixed period provided the same is entered
into by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstance
vitiating consent. It does not necessarily follow that where the duties of
the employee consist of activities usually necessary or desirable in the
usual business of the employer, the parties are forbidden from agreeing
on a period of time for the performance of such activities. There is thus
nothing essentially contradictory between a definite period of employment
and the nature of the employees duties. It goes without saying that
contracts of employment govern the relationship of the parties. In this
case, private respondents contract provided for a fixed term of nine (9)
months, from June 1, 1991 to March 31, 1992. Such stipulation, not being
contrary to law, morals, good customs, public order and public policy, is
valid, binding and must be respected.
Technical Rules Not Binding Labor Code Article 221
Bantolino, et al. vs. Coca Cola Bottlers Philippines
G.R. No. 153660
PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE
LADICA, ARMAN QUELING, ROLANDO NIETO, RICARDO
BARTOLOME, ELUVER GARCIA, EDUARDO GARCIA and NELSON
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MANALASTAS vs.
COCA-COLA BOTTLERS PHILS., INC.
June 10, 2003
Facts: On 15 February 1995 sixty-two (62) employees of respondent
Coca-Cola Bottlers, Inc., and its officers, Lipercon Services, Inc., Peoples
Specialist Services, Inc., and Interim Services, Inc., filed a complaint
against respondents for unfair labor practice through illegal dismissal,
violation of their security of tenure and the perpetuation of the Cabo
System. They thus prayed for reinstatement with full back wages, and the
declaration of their regular employment status. For failure to prosecute as
they failed to either attend the scheduled mandatory conferences or
submit their respective affidavits, the claims of fifty-two (52) complainantemployees were dismissed. Thereafter, Labor Arbiter Jose De Vera
conducted clarificatory hearings to elicit information from the ten (10)
remaining complainants (petitioners herein) relative to their alleged
employment with respondent firm.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision ordering
respondent company to reinstate complainants to their former positions
with all the rights, privileges and benefits due regular employees, and to
pay their full back wages which, with the exception of Prudencio Bantolino
whose back wages must be computed upon proof of his dismissal as of 31
May 1998, already amounted to an aggregate of P1,810,244.00.
On appeal, the NLRC sustained the finding of the Labor Arbiter that there
was indeed an employer-employee relationship between the complainants
and respondent company when it affirmed in toto the latters decision.
Respondent Coca-Cola Bottlers appealed to the Court of Appeals which,
although affirming the finding of the NLRC that an employer-employee
relationship existed between the contending parties, nonetheless agreed
with respondent that the affidavits of some of the complainants, namely,
Prudencio Bantolino, Nestor Romero, Nilo Espina, Ricardo Bartolome,
Eluver Garcia, Eduardo Garcia and Nelson Manalastas, should not have
been given probative value for their failure to affirm the contents thereof
and to undergo cross-examination. As a consequence, the appellate court
dismissed their complaints for lack of sufficient evidence. In the same
Decision however, complainants Eddie Ladica, Arman Queling and Rolando
Nieto were declared regular employees since they were the only ones
subjected to cross-examination.
Issue: Whether or not the Court of Appeals erred in giving weight to
respondents claim of failure to cross-examine the petitioners?
Held: Yes. Administrative bodies like the NLRC are not bound by the
technical niceties of law and procedure and the rules obtaining in courts of
law. Indeed, the Revised Rules of Court and prevailing jurisprudence may
14 | L a b o r S t a n d a r d s - C a s e D i g e s t s
Labor Arbiter Rhett Julius Plagata declared that respondent was illegally
dismissed and ordered Pfizer, Inc., to pay him back wages, separation pay,
thirteenth month pay, incentives and bonuses, reimbursement of
expenses
and
attorneys
fees.
Respondents
monetary
award
totalled P2,052,013.50. Petitioners appealed from the decision to the
NLRC in Cagayan de Oro City where it affirmed the decision of the Labor
Arbiter. Petitioners also filed with the Court of Appeals but was their
motion for reconsideration was denied. Hence, the petition.
Issue: Whether or not the Court of Appeals erred in dismissing the appeal
for being filed beyond the reglementary period.
Held: In Systems Factors Corporation v. NLRC, the Court declared that the
amendment introduced under A.M. No. 00-2-03-SC is procedural or
remedial in character, as it does not create new or remove vested rights,
but only operates in furtherance of the remedy or confirmation of rights
already existing. It is settled that procedural laws may be given
retroactive effect to actions pending and undetermined at the time of their
passage, there being no vested rights in the rules of procedure. Thus, the
said amendment may be given a retroactive effect.
Thus, by virtue of the retroactive effect of the amendment of Section 4,
Rule 65 of the 1997 Rules of Civil Procedure introduced by our Resolution
in A.M. No. 00-2-03-SC, which allows the filing of a petition
for certiorari within sixty days from notice of the denial of a motion for
reconsideration, the filing of petitioners petition before the Court of
Appeals was on time. Indeed, there is no dispute that their petition was
filed on the sixtieth day from notice of the denial of their motion for
reconsideration.
8. Rule Making Power Labor Code Article 5
Limitations
Sonza vs. ABS-CBN Broadcasting Corporation
G.R. No. 138051
JOSE Y. SONZA vs.
ABS-CBN BROADCASTING CORPORATION
June 10, 2004
Facts: In May 1994, respondent ABS-CBN Broadcasting Corporation (ABSCBN) signed an Agreement (Agreement) with the Mel and Jay
Management and Development Corporation (MJMDC). ABS-CBN was
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into the Agreement with SONZA but would have hired him through its
personnel department just like any other employee.
Payment of Wages
ABS-CBN agreed to pay SONZA such huge talent fees precisely because of
SONZAs unique skills, talent and celebrity status not possessed by
ordinary employees. Obviously, SONZA acting alone possessed enough
bargaining power to demand and receive such huge talent fees for his
services. The power to bargain talent fees way above the salary scales of
ordinary employees is a circumstance indicative, but not conclusive, of an
independent contractual relationship.
Power of Dismissal
During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent
fees as long as AGENT and Jay Sonza shall faithfully and completely
perform each condition of this Agreement. Even if it suffered severe
business losses, ABS-CBN could not retrench SONZA because ABS-CBN
remained obligated to pay SONZAs talent fees during the life of the
Agreement. This circumstance indicates an independent contractual
relationship between SONZA and ABS-CBN.
Power of Control
The hiring of exclusive talents is a widespread and accepted practice in
the entertainment industry This practice is not designed to control the
means and methods of work of the talent, but simply to protect the
investment of the broadcast station. The broadcast station normally
spends substantial amounts of money, time and effort in building up its
talents as well as the programs they appear in and thus expects that said
talents remain exclusive with the station for a commensurate period of
time.Normally, a much higher fee is paid to talents who agree to work
exclusively for a particular radio or television station. In short, the huge
talent fees partially compensates for exclusivity, as in the present case.
2. Applying the control test to the present case, the Court held that SONZA is
not an employee but an independent contractor. The control test is
the most important test our courts apply in distinguishing an employee
from an independent contractor. This test is based on the extent of control
the hirer exercises over a worker. The greater the supervision and control
the hirer exercises, the more likely the worker is deemed an employee.
The converse holds true as well the less control the hirer exercises, the
more likely the worker is considered an independent contractor. In any
event, not all rules imposed by the hiring party on the hired party indicate
that the latter is an employee of the former. In this case, SONZA failed to
show that these rules controlled his performance. The Court finds that
these general rules are merely guidelines towards the achievement of
the mutually desired result, which are top-rating television and radio
programs that comply with standards of the industry.
9. Applicability Labor Code Article 6
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date, Credo was placed on "Forced Leave" status for 1 5 days. Before the
expiration of said 15-day leave, Credo filed a complaint for placing her on
forced leave, without due process. She also filed a supplemental
complaint for illegal dismissal in alleging absence of just or authorized
cause for her dismissal and lack of opportunity to be heard.
The labor arbiter rendered a decision, dismissing Credo's complaint, and
directing NASECO to pay Credo separation pay equivalent to one half
month's pay for every year of service. Both parties appealed which was
denied by the NLRC. Hence, the present recourse.
Issue: Whether
reinstatement.
or
not
NLRC
has
jurisdiction
to
order
Credo's
Held: Under the 1973 Constitution, it was provided that: The civil service
embraces every branch, agency, subdivision, and instrumentality of the
Government,
including
every
government-owned
or
controlled
corporation. On the other hand, the 1987 Constitution provides that: The
civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government-owned or controlled
corporations with original charter. Thus, the situations sought to be
avoided by the 1973 Constitution and expressed by the Court in the
National Housing appear relegated to relative insignificance by the 1987
Constitutional provision that the Civil Service embraces governmentowned or controlled corporations with original charter; and, therefore, by
clear implication, the Civil Service does not include government-owned or
controlled corporations which are organized as subsidiaries of
government-owned or controlled corporations under the general
corporation law.
On the premise that it is the 1987 Constitution that governs the instant
case because it is the Constitution in place at the time of decision thereof,
the NLRC has jurisdiction to accord relief to the parties. As an admitted
subsidiary of the NIDC, in turn a subsidiary of the PNB, the NASECO is a
government-owned or controlled corporation without original charter.
Juco vs. NLRC and National Housing Corp.
G.R. No. 98107
BENJAMIN C. JUCO vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL
HOUSING CORPORATION
August 18, 1997
Facts: Juco was an employee of the NHA. He filed a complaint for illegal
dismissal w/ MOLE but his case was dismissed by the labor arbiter on the
20 | L a b o r S t a n d a r d s - C a s e D i g e s t s
ground that the NHA is a govt-owned corp. and jurisdiction over its
employees is vested in the CSC. On appeal, the NLRC reversed the
decision and remanded the case to the labor arbiter for further
proceedings. NHA in turn appealed to the SC.
Issue: Whether or not the employees of the National Housing
Corporation, a government-owned and/or controlled corporation without
original charter, covered by the Labor Code or by laws and regulations
governing the civil service.
Held: Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil
Service embraces every branch, agency, subdivision and instrumentality
of the Government, including every government owned and controlled
corporation. The inclusion of government-owned and/or controlled
corporation within the embrace of the civil service shows a deliberate
effort at the framers to plug an earlier loophole which allowed
government-owned and/or controlled corporation to avoid the full
consequences of the civil service system. All offices and firms of the
government are covered. This constitutional provision has been
implemented by statute PD 807 is unequivocal that personnel of
government-owned and/or controlled corporation belong to the civil
service and subject to civil service requirements. "Every" means each one
of a group, without exception. This case refers to a government-owned
and/or controlled corporation. It does not cover cases involving private
firms taken over by the government in foreclosure or similar proceedings.
For purposes of coverage in the Civil Service, employees of governmentowned and/or controlled corporation whether created by special law or
formed as subsidiaries are covered by the Civil Service Law, not the Labor
Code, and the fact that private corporations owned or controlled by the
government may be created by special charter does not mean that such
corps. not created by special law are not covered by the Civil Service.
The infirmity of the respondents position lies in its permitting the
circumvention or emasculation of Sec. 1, Art. XII-B [now Art IX, B, Sec. 2
(1)] of the Constitution. It would be possible for a regular ministry of
government to create a host of subsidiary corporation under the Corp.
Code funded by a willing legislature. A government-owned corp. could
create several subsidiary corps. These subsidiary corporations would
enjoy the best of two worlds. Their officials and employees would be
privileged individuals, free from the strict accountability required by the
Civil Service Dec. and the regulations of the COA. Their incomes would not
be subject to the competitive restraint in the open market nor to the
terms and conditions of civil service employment.
Conceivably, all government-owned and/or controlled corporations could
be created, no longer by special charters, but through incorporation under
the general law. The Constitutional amendment including such corporation
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(3) the payment of wages by whatever means; and (4) the power to
control the worker's conduct, with the latter assuming primacy in the
overall consideration. No particular form of proof is required to prove the
existence of an employer-employee relationship. Any competent and
relevant evidence may show the relationship.2
The above elements are present here. Petitioner PHCCI, through Mr.
Edilberto Lantaca, Jr., its Manager, hired private respondents to work for it.
They worked regularly on regular working hours, were assigned specific
duties, were paid regular wages and made to accomplish daily time
records just like any other regular employee. They worked under the
supervision of the cooperative manager. But unfortunately, they were
dismissed.
Chavez vs. NLRC
G.R. No. 146530
PEDRO CHAVEZ vs.
NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING,
INC. and ALVIN LEE, Plant Manager
January 17, 2005
Facts: The respondent company engaged the services of the petitioner,
Pedro Chavez, as truck driver on October 25, 1984. Sometime in 1992, the
petitioner expressed to respondent Alvin Lee, respondent companys plant
manager, his (the petitioners) desire to avail himself of the benefits that
the regular employees were receiving such as overtime pay, nightshift
differential pay, and 13th month pay, among others. Although he
promised to extend these benefits to the petitioner, respondent Lee failed
to actually do so.
On February 20, 1995, the petitioner filed a complaint for regularization
with the Regional Arbitration Branch No. III of the NLRC in San Fernando,
Pampanga. Before the case could be heard, respondent company
terminated the services of the petitioner. Consequently, on May 25, 1995,
the petitioner filed an amended complaint against the respondents for
illegal dismissal, unfair labor practice and non-payment of overtime pay,
nightshift differential pay, 13th month pay, among others. The case was
docketed as NLRC Case No. RAB-III-02-6181-95.
The respondents, for their part, denied the existence of an employeremployee relationship between the respondent company and the
petitioner. They averred that the petitioner was an independent contractor
as evidenced by the contract of service which he and the respondent
company entered into.
After the parties had filed their respective pleadings, the Labor Arbiter
rendered the Decision dated February 3, 1997, finding the respondents
guilty of illegal dismissal. The Labor Arbiter declared that the petitioner
was a regular employee of the respondent company as he was performing
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permanency and duration of the relationship between the worker and the
employer; and (7) the degree of dependency of the worker upon the
employer for his continued employment in that line of business. 23
The proper standard of economic dependence is whether the worker is
dependent on the alleged employer for his continued employment in that
line of business. 24 In the United States, the touchstone of economic
reality in analyzing possible employment relationships for purposes of the
Federal Labor Standards Act is dependency. 25By analogy, the benchmark
of economic reality in analyzing possible employment relationships for
purposes of the Labor Code ought to be the economic dependence of the
worker on his employer.
Under the broader economic reality test, the petitioner can likewise be
said to be an employee of respondent corporation because she had
served the company for six years before her dismissal, receiving check
vouchers indicating her salaries/wages, benefits, 13th month pay,
bonuses and allowances, as well as deductions and Social Security
contributions from August 1, 1999 to December 18, 2000. 26 When
petitioner was designated General Manager, respondent corporation made
a report to the SSS signed by Irene Ballesteros. Petitioners membership in
the SSS as manifested by a copy of the SSS specimen signature card
which was signed by the President of Kasei Corporation and the inclusion
of her name in the on-line inquiry system of the SSS evinces the existence
of an employer-employee relationship between petitioner and respondent
corporation. It is therefore apparent that petitioner is economically
dependent on respondent corporation for her continued employment in
the latters line of business.
Television and Production Exponents, Inc. vs. Servaa
G.R. No. 167648
TELEVISION AND PRODUCTION EXPONENTS, INC. and/or ANTONIO
P. TUVIERA vs.
ROBERTO C. SERVAA
January 28, 2008
Facts: He alleged that he was first connected with Agro-Commercial
Security Agency but was later on absorbed by TAPE as a regular company
guard. On 2 March 2000, respondent received a memorandum informing
him of his impending dismissal on account of TAPEs decision to contract
the services of a professional security agency. At the time of his
termination, respondent was receiving a monthly salary of P6,000.00.
In a motion to dismiss which was treated as its position paper, TAPE
countered that the labor arbiter had no jurisdiction over the case in the
absence of an employer-employee relationship between the parties. TAPE
made the following assertions: (1) that respondent was initially employed
as a security guard for Radio Philippines Network (RPN-9); (2) that he was
31 | L a b o r S t a n d a r d s - C a s e D i g e s t s
tasked to assist TAPE during its live productions, specifically, to control the
crowd; (3) that when RPN-9 severed its relationship with the security
agency, TAPE engaged respondents services, as part of the support group
and thus a talent, to provide security service to production staff, stars and
guests of "Eat Bulaga!" as well as to control the audience during the oneand-a-half hour noontime program; (4) that it was agreed that
complainant would render his services until such time that respondent
company shall have engaged the services of a professional security
agency; (5) that in 1995, when his contract with RPN-9 expired,
respondent was retained as a talent and a member of the support group,
until such time that TAPE shall have engaged the services of a
professional security agency; (6) that respondent was not prevented from
seeking other employment, whether or not related to security services,
before or after attending to his "Eat Bulaga!" functions; (7) that sometime
in late 1999, TAPE started negotiations for the engagement of a
professional security agency, the Sun Shield Security Agency; and (8) that
on 2 March 2000, TAPE issued memoranda to all talents, whose functions
would be rendered redundant by the engagement of the security agency,
informing them of the managements decision to terminate their services.
On 29 June 2001, Labor Arbiter Daisy G. Cauton-Barcelona declared
respondent to be a regular employee of TAPE. On appeal, the National
Labor Relations Commission (NLRC) in a Decision8 dated 22 April 2002
reversed the Labor Arbiter and considered respondent a mere program
employee. Reversing the decision of the NLRC, the Court of Appeals found
respondent to be a regular employee.
Issue: Whether or not employer-employee relationship exists between
petitioner an respondent.
Held: Yes, there is. Jurisprudence is abound with cases that recite the
factors to be considered in determining the existence of employeremployee relationship, namely: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer's power to control the employee with respect to the means
and method by which the work is to be accomplished. The most important
factor involves the control test. Under the control test, there is an
employer-employee relationship when the person for whom the services
are performed reserves the right to control not only the end achieved but
also the manner and means used to achieve that end.
In concluding that respondent was an employee of TAPE, the Court of
Appeals applied the "four-fold test" in this wise:
First. The selection and hiring of petitioner was done by private
respondents. In fact, private respondents themselves admitted
having engaged the services of petitioner only in 1995 after TAPE
severed its relations with RPN Channel 9.
By informing petitioner through the Memorandum dated 2 March
2000, that his services will be terminated as soon as the services of
32 | L a b o r S t a n d a r d s - C a s e D i g e s t s
Maliksi. Indeed, having served SMC for an aggregate period of more than
three (3) years through employment contracts with these two labor
contractors, Maliksi should be considered as SMCs regular employee. The
hard fact is that he was hired and re-hired by SMC to perform
administrative and clerical work that was necessary to SMCs business on
a daily basis. In Bustamante v. National Labor Relations Commission, we
ruled:
In the case at bar, petitioners were employed at various periods
from 1985 to 1989 for the same kind of work they were hired
to perform in September 1989. Both the labor arbiter and
the respondent NLRC agree that petitioners were employees
engaged to perform activities necessary in the usual
business of the employer. As laborers, harvesters or sprayers in
an agricultural establishment which produces high grade bananas,
petitioners tasks are indispensable to the year-round operations of
respondent company. This belies the theory of respondent company
that the employment of petitioners was terminated due to the
expiration of their probationary period in June 1990. If at all
significant, the contract for probationary employment was utilized
by respondent company as a chicanery to deny petitioners their
status as regular employees and to evade paying them the benefits
attached to such status. Some of the petitioners were hired as far
back as 1985, although the hiring was not continuous.They were
hired and re-hired in a span of from two to four years to do
the same type of work which conclusively shows the
necessity of petitioners service to the respondent
companys business. Petitioners have, therefore, become regular
employees after performing activities which are necessary in the
usual business of their employer. But, even assuming that the
activities of petitioners in respondent companys plantation were not
necessary or desirable to its business, we affirm the public
respondents finding that all of the complainants (petitioners) have
rendered non-continuous or broken service for more than one (1)
year and are consequently considered regular employees.
We do not sustain public respondents theory that private
respondent should not be made to compensate petitioners for
backwages because its termination of their employment was not
made in bad faith. The act of hiring and re-hiring the
petitioners over a period of time without considering them
as regular employees evidences bad faith on the part of
private respondent. The public respondent made a finding to this
effect when it stated that the subsequent re-hiring of petitioners on
a probationary status "clearly appears to be a convenient
subterfuge on the part of management to prevent complainants
(petitioners) from becoming regular employees." (Emphasis
supplied)
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44 | L a b o r S t a n d a r d s - C a s e D i g e s t s
The principal, on the other hand, is made the indirect employer of the
contractors employees for purposes of paying the employees their wages
should the contractor be unable to pay them. This joint and several
liability facilitates, if not guarantees, payment of the workers performance
of any work, task, job or project, thus giving the workers ample protection
as mandated by the 1987 Constitution
In the case at bar, it is beyond dispute that the security guards are the
employees of EAGLE. That they were assigned to guard the premises of
PTSI pursuant to the latters contract with EAGLE and that neither of these
two entities paid their wage and allowance increases under the subject
wage
orders
are
also
admitted.
Thus,
the
application
of
the aforecited provisions of the Labor Code on joint and several liability of
the principal and contractor is appropriate.
In view of the foregoing, the security guards should claim the amount of
the increases from EAGLE. Under the Labor Code, in case the agency fails
to pay them the amounts claimed, PTSI should be held solidarily liable
with EAGLE (Articles 106,107 and 109). Should EAGLE pay, it can claim an
adjustment from PTSI for an increase in consideration to cover the
increases payable to the security guards.
However, in the instant case, the contract for security services had
already expired without being amended consonant with the Wage Orders.
It is also apparent from a reading of a record that EAGLE does not now
demand from PTSI any adjustment in the contract price and its main
concern is freeing itself from liability. Given these peculiar
circumstances, if PTSI pays the security guards, it cannot claim
reimbursement from EAGLE. But in case it is EAGLE that pays them, the
latter can claim reimbursement from PTSI in lieu of an adjustment,
considering that the contract, had expired and had not been renewed.
For the security guards, the actual source of the payment of their wage
differentials and premium for holiday and rest day work does not matter
as
long
as
they
are
paid. This
is
the
import
of Eparwa and LDCUs solidary liability. Creditors, such as the security
guards, may collect from anyone of the solidary debtors. Solidary liability
does not mean that, as between themselves, two solidary debtors are
liable for only half of the payment.
LDCUs ultimate liability comes into play because of the expiration of the
Contract for Security Services. There is no privity of contract between the
security guards and LDCU, but LDCUs liability to the security guards
remains because of Articles 106, 107 and 109 of the Labor
Code. Eparwa is already precluded from asking LDCU for an adjustment in
the contract price because of the expiration of the contract,
but Eparwas liability to the security guards remains because of their
employer-employee relationship. In lieu of an adjustment in the contract
price, Eparwa may claim reimbursement from LDCU for any payment it
may make to the security guards. However, LDCU cannot claim any
46 | L a b o r S t a n d a r d s - C a s e D i g e s t s
reimbursement from Eparwa for any payment it may make to the security
guards.
47 | L a b o r S t a n d a r d s - C a s e D i g e s t s
joined petitioner union as members. When the union filed a petition for
certification election with the Labor Department, the company opposed
the petition. The company claims that the workers were project
employees and therefore not qualified to form part of the rank and file
collective bargaining unit. The petition for certification election was then
dismissed. After making an appeal, the Secretary of Labor and
Employment ruled in favour of the union and reversed the earlier decision
and ordered the immediate holding of a certification election.
Meanwhile, the national president of petitioner union sent a demand letter
to respondent company, seeking the payment of wage differentials to
some affected union members. Petitioner union and the concerned
workers filed a complaint for payment of wage differentials and other
benefits before the Department
of
Labor
and
Employment.
Subsequently, the workers, whose contracts have expred after the
completion of four projects, were terminated by the company. The
terminated employees, however, claim that their dismissal was due to
their participation in the union activities.
Both the Labor Arbiter and National Labor Relations Commission ruled that
the unions strike was illegal and their termination was valid. The aggrived
workers filed with the Regional Arbitration Branch of the National Labor
Relations Commission their individual complaints against private
respondent. The Labor Arbiter decided that there was indeed an illegal
dismissal, but was not entitled to the awards prayed for. Both parties
sought appeal to the National Labor Relations Commission which modified
the earlier decision. It held that the labor arbiter erred in not resolving the
issue of underpayment of wages because not all of the original
complainants filed the same money claims with the labor department.
Thus, it awarded monetary benefits to qualified workers
Issue: Whether or not petitioners are regular employees.
Held: No. Regular employees are those who have been engaged to
perform activities which are usually necessary or desirable in the usual
business or trade of the employer even if the parties enter into an
agreement stating otherwise. In contrast, project employees are those
whose employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time
of the engagement of the employee, or where the work or services to be
performed is seasonal in nature and the employment is for the duration of
the season.
The contracts of employment of the petitioners attest to the fact that they
had been hired for specific projects, and their employment was
coterminous with the completion of the project for which they had been
hired. Said contracts expressly provide that the workers' tenure of
employment would depend on the duration of any phase of the project or
the completion of the awarded government construction projects in any of
49 | L a b o r S t a n d a r d s - C a s e D i g e s t s
desirable in the usual trade of petitioner and not just its project
employees.
Issue: Whether or not respondents are regular employees of ABS-CBN.
Held: The respondents are regular employees of ABS-CBN. The fact that
respondents received pre-agreed talent fees instead of salaries, that
they did not observe the required office hours, and that they were
permitted to join other productions during their free time are not
conclusive of the nature of employment. Respondents cannot be
considered talents because they are not actors or actresses or radio
specialists or mere clerks or utility employees. They are regular
employees who perform several different duties under the control and
direction of ABS-CBN executives and supervisors.
In Universal Robina Corporation v. Catapang, the Court reiterated the test
in determining whether one is a regular employee: The primary standard,
therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether
the former is usually necessary or desirable in the usual business or trade
of the employer. The connection can be determined by considering the
nature of work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing
the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability
of that activity to the business. Hence, the employment is considered
regular, but only with respect to such activity and while such activity exist.
Brent School, Inc. vs. Zamora
G.R. No. L-48494
BRENT SCHOOL, INC., and REV. GABRIEL DIMACHE vs.
RONALDO ZAMORA, the Presidential Assistant for Legal Affairs,
Office of the President, and DOROTEO R. ALEGRE
February 5, 1990
Facts: Doroteo R. Alegre was engaged as athletic director by Brent
School, Inc. at a yearly compensation of P20,000.00. The contract fixed a
specific term for its existence, five years from July 18, 1971 to July 17,
1976. Subsequent subsidiary reiterated the same terms and conditions,
including the expiry date, as those contained in the original contract of
July 18, 1971. Some three months before the expiration of the stipulated
period, Alegre was given a copy of the report filed by Brent School with
the Department of Labor advising of the termination of his services
51 | L a b o r S t a n d a r d s - C a s e D i g e s t s
effective on July 16, 1976. The stated ground for the termination was
"completion of contract, expiration of the definite period of employment."
A month or so later, Alegre accepted the amount of P3,177.71, and signed
a receipt therefor containing the phrase, "in full payment of services for
the period May 16, to July 17, 1976 as full payment of contract." However,
at the investigation conducted by a Labor Conciliator of said report of
termination of his services, Alegre, protested the announced termination
of his employment. He argued that although his contract did stipulate that
the same would terminate on July 17, 1976, since his services were
necessary and desirable in the usual business of his employer, and his
employment had lasted for five years, he had acquired the status of a
regular employee and could not be removed except for valid cause. The
Regional Director considered Brent School's report as an application for
clearance to terminate employment (not a report of termination), and
accepting the recommendation of the Labor Conciliator, refused to give
such clearance and instead required the reinstatement of Alegre, as a
"permanent employee," to his former position without loss of seniority
rights and with full back wages. The Director pronounced "the ground
relied upon by the Brent in terminating the services of Alegre . . . (as) not
sanctioned by P.D. 442," as prohibited by Circular No. 8, series of 1969, of
the Bureau of Private Schools. Brent School filed a motion for
reconsideration. The Regional Director denied the motion and forwarded
the case to the Secretary of Labor for review. The latter sustained the
ruling of the Regional Director. Brent appealed to the Office of the
President but it was rebuffed. That Office dismissed its appeal for lack of
merit and affirmed the Labor Secretary's decision, ruling that Alegre was a
permanent employee who could not be dismissed except for just cause,
and expiration of the employment contract was not one of the just causes
provided in the Labor Code for termination of services. Hence this petition
by Brent.
Issue: Whether or not the termination of Alegres contract of employment
was valid.
Held: Alegres contract of employment was lawfully terminated by reason
of expiration of agreed term of period. Alegre's employment was
terminated upon the expiration of his last contract with Brent School on
July 16, 1976 without the necessity of any notice. The advance written
advice given the Department of Labor with copy to said petitioner was a
mere reminder of the impending expiration of his contract, not a letter of
termination, nor an application for clearance to terminate which needed
the approval of the Department of Labor to make the termination of his
services effective. In any case, such clearance should properly have been
given, not denied. When the employment contract was signed between
Brent School and Alegre on July18, 1971, it was perfectly legitimate for
them to include in it a stipulation fixing the duration thereof. Stipulations
for a term were explicitly recognized as valid by the SC. In Biboso v.
Victorias Milling Co., Inc., which involved teachers in a private school as
regards whom, the following pronouncement was made: "What is decisive
52 | L a b o r S t a n d a r d s - C a s e D i g e s t s
is that petitioners (teachers) were well aware all the time that their tenure
was for a limited duration. Upon its termination, both parties to the
employment relationship were free to renew it or to let it lapse."
The employment contract between Brent School and Alegre was executed
on July 18, 1971, at a time when the Labor Code of the Philippines (P.D.
442) had not yet been promulgated. Indeed, the Code did not come into
effect until November 1, 1974, some three years after the perfection of
the employment contract, and rights and obligations thereunder had
arisen and been mutually observed and enforced. At that time, i.e., before
the advent of the Labor Code, there was no doubt whatever about the
validity of term employment. It was impliedly but nonetheless clearly
recognized by the Termination Pay Law, R.A. 1052, as amended by R.A.
1787. Basically, this statute provided that in cases of employment,
without a definite period, in a commercial, industrial, or agricultural
establishment or enterprise, the employer or the employee may terminate
at any time the employment with just cause; or without just cause in the
case of an employee by serving written notice on the employer at least
one month in advance, or in the case of an employer, by serving such
notice to the employee at least one month in advance or one-half month
for every year of service of the employee, whichever is longer, a fraction
of at least six months being considered as one whole year.
The employer, upon whom no such notice was served in case of
termination of employment without just cause, may hold the employee
liable for damages.
The employee, upon whom no such notice was served in case of
termination of employment without just cause, shall be entitled to
compensation from the date of termination of his employment in an
amount equivalent to his salaries or wages corresponding to the required
period of notice.
Art. 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the
work or service to be performed is seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That any employee who has rendered at
least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such
activity exists.
53 | L a b o r S t a n d a r d s - C a s e D i g e s t s
There can of course be no quarrel with the proposition that where from the
circumstances it is apparent that periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck
down or disregarded as contrary to public policy, morals, etc. But where
no such intent to circumvent the law is shown, or stated otherwise, where
the reason for the law does not exist. Accordingly, and since the entire
purpose behind the development of legislation culminating in the present
Article 280 of the Labor Code clearly appears to have been, as already
observed, to prevent circumvention of the employee's right to be secure
in his tenure, the clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with the concept of
regular employment as defined therein should be construed to refer to the
substantive evil that the Code itself has singled out: agreements entered
into precisely to circumvent security of tenure.
It should have no application to instances where a fixed period of
employment was agreed upon knowingly and voluntarily by the parties,
without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter.
Columbus Philippines Bus Corp. vs. NLRC
G.R. Nos. 114858-59
COLUMBUS PHILIPPINES BUS CORPORATION vs.
NATIONAL LABOR RELATIONS COMMISSION, ZENAIDA DOMASIG
and ROMAN DOMASIG
September 7, 2001
Facts: Columbus Philippines Bus Corporation is engaged in the business
of operating passenger buses. Since the start of its operations in 1990, it
has maintained a list of drivers and conductors who rendered service in its
bus units allegedly on a first come first served basis and compensated
purely on commission. The drivers and conductors/conductress worked for
about ten (10) to fifteen (15) days a month and were allegedly not
required to work everyday.
Roman and Zenaida Domasig, were employed as a driver and a bus
conductress, respectively, under Columbus Bus Corporation. Due to poor
labor practice involving 19-20 hour shifts, illegal deductions, and issues
with security of tenure, petitioners started to encourage other workers to
sign a Sama-Samang Pahayag from the National Federation of Labor for
54 | L a b o r S t a n d a r d s - C a s e D i g e s t s
55 | L a b o r S t a n d a r d s - C a s e D i g e s t s
shall render services for and in behalf of another for a consideration (no
matter how necessary for the latter's business) even without being hired
as an employee. This is precisely true in the case of an independent
contractorship as well as in an agency agreement. The Court agrees with
the petitioner's argument that Article 280 is not the yardstick for
determining the existence of an employment relationship because it
merely distinguishes between two kinds of employees, i.e., regular
employees and casual employees, for purposes of determining the right of
an employee to certain benefits, to join or form a union, or to security of
tenure. Article 280 does not apply where the existence of an employment
relationship is in dispute.
Sonza vs. ABS-CBN Broadcasting Corp., G. R. No. 1380051 (June 10, 2004)
as against Dumpit Murillo vs. C.A., G.R. No. 164652 (June 8, 2007)
G.R. No. 164652
THELMA DUMPIT-MURILLO vs.
COURT OF APPEALS, ASSOCIATED BROADCASTING COMPANY, JOSE
JAVIER AND EDWARD TAN
June 8, 2007
Facts: Associated Broadcasting Company (ABC) hired petitioner Thelma
Dumpit Murillo as a newscaster and co-anchor for Balitang-Balita, an early
evening news program. The contract was for a period of three months. It
was renewed under various subsequent contracts. In addition, petitioners
services were engaged for the program Live on Five. After four years of
repeated renewals, petitioner talent contract expired. Two weeks after the
expiration of the last contract, petitioner sent a letter that she was still
interested in renewing her contract, subject to a salary increase.
Thereafter, petitioner stopped reporting for work. Subsequently, she sent
a demand letter to ABC for reinstatement to her former position and claim
for unpaid wages and other monetary benefits. ABC replied that a check
covering petitioners had been processed for the unpaid wages but refused
to pay the other claim. Petitioner filed a complaint for illegal constructive
dismissal, non-payment of salaries and other benefits and she also
demanded for damages. The Labor Arbiter dismissed the complaint.
On appeal the NLRC reversed the Labor Arbiters decision holding that an
employer-employee relationship existed between petitioners and ABC;
that the talent contract was void; that the petitioner was a regular
employee illegally dismissed. ABC filed a Motion for reconsideration but
was denied. ABC elevated the case to CA. CA ruled that NLRC committed
grave abuse of discretion, and reversed the decision of the NLRC, saying
57 | L a b o r S t a n d a r d s - C a s e D i g e s t s
that the petitioner was a fixed term employee and not a regular
employee.
Issue: Whether or not petitioner is a regular employee of ABC.
Held: Petitioner was a regular employee under contemplation of law. The
practice of having fixed term contracts in the industry does not make all
talent contracts valid and compliant with labor laws. The assertion that a
talent contract exists does not necessarily prevent a regular employment
status. Requisites for regularity of the performance of petitioners have
been met in the instant case. Petitioners work was necessary or desirable
in the usual business or trade of the employer. Further, the Sonza case is
not applicable. In Sonza, the television station did not instruct Sonza how
to perform his job. How Sonza delivered his lines, appeared on television,
and sounded on radio were outside the television stations control. Sonza
had a free hand on what to say or discuss in his shows provided he did not
attack the television station or its interests. Clearly, the television station
did not exercise control over the means and methods of the performance
of Sonzas work. In the case at bar, ABC had control over the performance
of petitioners work. Noteworthy too, is the comparatively low P28,000
monthly pay of petitioner vis the P300,000 a month salary of Sonza, that
all the more bolsters the conclusion that petitioner was not in the same
situation as Sonza.
In Manila Water Company, Inc. v. Pena, we said that the elements to
determine the existence of an employment relationship are: (a) the selection
and engagement of the employee, (b) the payment of wages, (c) the power
of dismissal, and (d) the employers power to control. The most important
element is the employers control of the employees conduct, not only as to
the result of the work to be done, but also as to the means and methods to
accomplish it. The duties of petitioner as enumerated in her employment
contract indicate that ABC had control over the work of petitioner. Aside
from control, ABC also dictated the work assignments and payment of
petitioners wages. ABC also had power to dismiss her. All these being
present, clearly, there existed an employment relationship between
petitioner and ABC.
Concerning regular employment, the law provides for two kinds of
employees, namely: (1) those who are engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the
employer; and (2) those who have rendered at least one year of service,
whether continuous or broken, with respect to the activity in which they
are employee. In other words, regular status arises from either the nature
of work of the employee or the duration of his employment. In Benares v.
Pancho, we very succinctly said
The primary standard for determining regular employment is
the reasonable connection between the particular activity
performed by the employee vis--vis the usual trade or
business of the employer. This connection can be determined
by considering the nature of the work performed and its
58 | L a b o r S t a n d a r d s - C a s e D i g e s t s
general guideline that the article should conform to the standards of the
newspaper and the general tone of the particular section. Where a person
who works for another performs his job more or less at his own pleasure,
in the manner he sees fit, not subject to definite hours or conditions of
work, and is compensated according to the result of his efforts and not the
amount thereof, no employer-employee relationship exists.
By Period of Service An employee is considered regular when an
employee has rendered at least one (1) year, whether continuous
or broken, on such activity in which he is employed and his
employment shall continue while such activity exists.
Audion Electric Co., Inc. vs. NLRC
G.R. No. 106648
AUDIO ELECTRIC CO., INC. vs.
NATIONAL LABOR RELATIONS COMMISSION and NICOLAS MADOLID
June 17, 1999
Facts: Private respondent, Nicolas Madolid, was employed for thirteen
(13) years by respondent Audion Electric Company (Audion) as
fabricator and continuously rendered service assigned in different offices
or projects as helper electrician, stockman and timekeeper. Sometime
later, Madolid received a letter informing him that he will be considered
terminated after the turnover of materials, including respondents' tools
and equipment. Complainant alleged that he was dismissed without
justifiable cause and due process and that his dismissal was done in bad
faith which renders the dismissal illegal. Thus, he claimed that he is
entitled to reinstatement with full back wages, moral and exemplary
damages, overtime pay, project allowance, minimum wage increase
adjustment, proportionate 13th month pay and attorney's fees.
Audion moved for the dismissal of the case on the ground that there was
no illegal dismissal, since the employment contract signed by complainant
with respondent is co-terminus with the project. The Labor Arbiter ruled in
favor of Madolid and ordered Audion to 1) reinstate Madolid to his former
position with full back wages from the date of his dismissal up to the
signing of the decision without loss of seniority rights; and 2) to pay
Madolids overtime, project allowances, minimum wage increase
adjustment, proportionate 13th month pay, moral and exemplary
damages, and attorney's fees equivalent to 10% of the total award of
complainant. Audion appealed to the NLRC, which dismissed the same.
The motion for reconsideration was also denied.
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30, 1999, after due proceedings, the Labor Arbiter declared that they have
been illegally dismissed. On November 22, 2000, the NLRC affirmed the
decision of the Labor Arbiter with the modification that the award of
attorneys fees was reduced to 10% of the total monetary award. On
August 21, 2003, the CA denied the petition for lack of merit. The CA held
that after rendering more than one year of continuous service, the
respondents became regular employees of the petitioners by operation of
law.
Issue: Whether or not the respondents were regularized by the lapse one
year from the date of their employment.
Held: Yes, they are. In any case, we find that the CA, the NLRC and the
Labor Arbiter correctly categorized the respondents as regular employees
of the petitioner company. In Abasolo v. National Labor Relations
Commission, the Court reiterated the test in determining whether one is a
regular employee:
The primary standard, therefore, of determining regular employment is
the reasonable connection between the particular activity performed by
the employee in relation to the usual trade or business of the employer.
The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can be
determined by considering the nature of work performed and its relation
to the scheme of the particular business or trade in its entirety. Also, if the
employee has been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the business. Hence,
the employment is considered regular, but only with respect to such
activity and while such activity exists
It is obvious that the said five-month contract of employment was used by
petitioners as a convenient subterfuge to prevent private respondents
from becoming regular employees. Such contractual arrangement should
be struck down or disregarded as contrary to public policy or morals. To
uphold the same would, in effect, permit petitioners to avoid hiring
permanent or regular employees by simply hiring them on a temporary or
casual basis, thereby violating the employees security of tenure in their
jobs. Petitioners act of repeatedly and continuously hiring private
respondents in a span of 3 to 5 years to do the same kind of work
negates their contention that private respondents were hired for a specific
project or undertaking only.
Abesco Construction and Development Corp. vs. Ramirez
G.R. No. 141168
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March 10, 1993 dismissing the same for lack of merit but ordered PFCCI to
reimburse her. On appeal, however, the said decision was reversed by the
National Labor Relations Commission (NLRC), which directs petitioner to
reinstate complainant to her position last held, or to an equivalent position
if such is no longer feasible, with full backwages.
Issue: Whether or not April is a regular employee.
Held: We find no merit in the petition. As defined in the case
ofInternational Catholic Migration v. NLRC, "a probationary employee is
one who is on trial by an employer during which the employer determines
whether or not he is qualified for permanent employment. A probationary
employment is made to afford the employer an opportunity to observe the
fitness of a probationer while at work, and to ascertain whether he will
become a proper and efficient employee." Probationary employees,
notwithstanding their limited tenure, are also entitled to security of
tenure. Thus, except for just cause as provided by law, or under the
employment contract, a probationary employee cannot be terminated.
The contention that respondent could either be classified as a casual or
contractual employee is utterly misplaced; thus, it is imperative for the
Court to elucidate on the kinds of employment recognized in this
jurisdiction. The pertinent provision of the Labor Code, as amended,
states:
Art. 280. Regular and casual employment. The provisions of
written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services to
be performed is seasonal in nature and the employment is for
the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph:Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while
such activity exists.
This provision of law comprehends three kinds of employees: (a) regular
employees or those whose work is necessary or desirable to the usual
business of the employer; (b) project employees or those whose
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did not abandon his employment, but was illegally dismissed, the Court of
Appeals ratiocinated:
xxx (P)etitioner Alfredo can not be said to have abandoned his
employment. The failure of Alfredo to report for work was justified
under the circumstances. The positive assertion of petitioner that
when he reported for work on January 20, 1996, he was told that his
services were already terminated is more convincing than the mere
denial of respondent Danilo Yap. Petitioner Alfredo's failure to inquire
from private respondent as to the cause of his dismissal should not
be taken against him. It should be noted that when the secretary of
respondent Danilo Yap conveyed the order of dismissal, Alfredo took
steps to verify the same from the company's Chief Maintenance
Officer Rolando Sibugan who confirmed said order. The filing of the
illegal dismissal case against CALS by petitioner Alfredo negates the
charge of abandonment. Private respondent failed to show that
Alfredo clearly and unequivocably performed overt acts to sever the
employer-employee relationship.
In the instant case, private respondent failed to present as evidence
such notice despite every company's standard policy to record and
file every transaction including notices of termination.
CALS' contention that the letter of Rolando Sibugan inquiring from
Alfredo whether he still had intention of resuming work is a
manifestation of its willingness to reinstate the latter to his former
position, thereby negating any intention on its part to dismiss
Alfredo, is not well-taken. The fact that the employer later made an
offer to re-employ Alfredo did not cure the vice of his earlier
arbitrary dismissal. The wrong had been committed and the harm
done. Notably, it was only after the complaint had been filed that
CALS, in a belated gesture of good will, sought to invite Alfredo back
to work. CALS' sincerity is suspect. Its offer of reinstatement is
doubtful since the same could not have been made if Alfredo had
not complained against it. Whether the offer was sincere or not, the
same could not correct the earlier illegal dismissal of Alfredo. It must
be borne in mind that CALS' offer to reinstate Alfredo was obviously
an attempt to escape liability from having illegally terminated the
latter's services. Hence, CALS incurred liability under the Labor Code
from the moment Alfredo was illegally dismissed, and the liability
was not abated as a result of CALS' offer to reinstate.
In ruling in favor of Candelaria Roco, the appellate court held that when
her employment was terminated on November 15, 1995 (she was hired on
May 16, 1995), it was four (4) days after she ceased to be a probationary
employee and became a regular employee within the ambit of Article 281
of the Labor Code, which provides:
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Contract
Fixing
the
Period
of
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On June 30, 2000, the Labor Arbiter rendered a Decision[ dismissing the
complaint, holding that respondent Visca was an independent contractor and
the other respondents were hired by him to help him with his contracted works
at the resort; that there was no illegal dismissal but completion of projects; that
respondents were project workers, not regular employees. Respondents filed an
appeal with the NLRC.
The NLRC rendered a Decision in favor of the respondents. Petitioners then filed
a Motion for Reconsideration, arguing that respondents were project employees.
The NLRC made a complete turnabout from its original decision and issued a
Resolution dismissing the complaint, holding that respondents were not regular
employees but project employees, hired for a short period of time to do some
repair jobs in petitioners' resort business.
Respondents then filed a Petition for Certiorari with the CA. The CA rendered its
assailed Decision where it that held respondents were regular employees, not
project workers, since in the years that petitioners repeatedly hired respondents'
services, the former failed to set, even once, specific periods when the
employment relationship would be terminated; that the repeated hiring of
respondents established that the services rendered by them were necessary and
desirable to petitioners' resort business; at the least, respondents were regular
seasonal employees, hired depending on the tourist season and when the need
arose in maintaining petitioners' resort for the benefit of guests.
Issue: Whether or not respondents regular employees or project
employees.
Held: A project employee is one whose "employment has been fixed for a
specific project or undertaking, the completion or termination of which has
been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season." Before an employee hired
on a per-project basis can be dismissed, a report must be made to the
nearest employment office, of the termination of the services of the
workers every time completes a project, pursuant to Policy Instruction No.
20.
In
the
present
case,
respondents
cannot
be
classified
as project employees, since they worked continuously for petitioners from
three to twelve years without any mention of a project to which they were
specifically assigned. While they had designations as foreman, carpenter
and mason, they performed work other than carpentry or masonry. They
were tasked with the maintenance and repair of the furniture, motor
boats, cottages, and windbreakers and other resort facilities. There is
likewise no evidence of the project employment contracts covering
respondents' alleged periods of employment. More importantly, there is
no evidence that petitioners reported the termination of respondents'
supposed project employment to the DOLE as project employees.
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Department Order No. 19, as well as the old Policy Instructions No. 20,
requires employers to submit a report of an employees termination to the
nearest public employment office every time his employment is
terminated due to a completion of a project. Petitioners' failure to file
termination reports is an indication that the respondents were
not project employees but regular employees.
The Employment contract is only signed by the president and the
manager but not the employee concerned.
Abesco Construction and Development Corp. vs. Ramirez
G.R. No. 141168
ABESCO CONSTRUCTION AND DEVELOPMENT CORPORATION and
MR. OSCAR BANZON, General Manager vs.
ALBERTO RAMIREZ, BERNARDO DIWA, MANUEL LOYOLA,
REYNALDO P. ACODESIN, ALEXANDER BAUTISTA, EDGAR TAJONERA
and GARY DISON
April 10, 2006
Facts: Petitioner company was engaged in a construction business where
respondents were hired on different dates from 1976 to 1992 either as
laborers, road roller operators, painters or drivers. In 1997, respondents
filed two separate complaints for illegal dismissal against the company
and its General Manager, Oscar Banzon, before the Labor Arbiter.
Petitioners allegedly dismissed them without a valid reason and without
due process of law. The complaints also included claims for non-payment
of the 13th month pay, five days service incentive leave pay, premium pay
for holidays and rest days, and moral and exemplary damages. The LA
later on ordered the consolidation of the two complaints.
After trial, the LA ruled in favor of the respondents. Petitioners appealed to
the National Labor Relations Commission (NLRC) which affirmed the LAs
decision. Subsequently, petitioners filed a petition for review in the Court
of Appeals (CA) arguing that they were not liable for illegal dismissal since
respondents services were merely put on hold until the resumption of their
business operations. They also averred that they had paid respondents
their full wages and benefits as provided by law, hence, the latter had no
more right to further benefits. The CA was not convinced and dismissed
petitioners appeal, hence, the petition.
Issue: Whether
employees.
respondents
were
project
employees
or
regular
Held: The Court ruled that respondents were regular employees. The
principal test for determining whether employees are project employees
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Article 320, dealing with "Probationary and fixed period employment," was
altered by eliminating the reference to persons "employed with a fixed
period," and was renumbered (becoming Article 271).
As it is evident that Article 280 of the Labor Code, under a narrow and
literal interpretation, not only fails to exhaust the gamut of employment
contracts to which the lack of a fixed period would be an anomaly, but
would also appear to restrict, without reasonable distinctions, the right of
an employee to freely stipulate with his employer the duration of his
engagement, it logically follows that such a literal interpretation should be
eschewed or avoided. The law must be given a reasonable interpretation,
to preclude absurdity in its application. Outlawing the whole concept of
term employment and subverting to boot the principle of freedom of
contract to remedy the evil of employer's using it as a means to prevent
their employees from obtaining security of tenure is like cutting off the
nose to spite the face or, more relevantly, curing a headache by lopping
off the head. Such interpretation puts the seal on Bibiso upon the effect of
the expiry of an agreed period of employment as still good rulea rule
reaffirmed in the recent case of Escudero vs. Office of the President (G.R.
No. 57822, April 26, 1989) where, in the fairly analogous case of a teacher
being served by her school a notice of termination following the expiration
of the last of three successive fixed-term employment contracts.
Paraphrasing Escudero, respondent Alegre's employment was terminated
upon
the
expiration of his last contract with Brent School on July 16, 1976 without
the necessity of any notice. The advance written advice given the
Department of Labor with copy to said petitioner was a mere reminder of
the impending expiration of his contract, not a letter of termination, nor
an application for clearance to terminate which needed the approval of
the Department of Labor to make the termination of his services effective.
In any case, such clearance should properly have been given, not denied.
Logically, the decisive determinant in term employment should not be the
activities that the employee is called upon to perform, but the day certain
agreed upon by the parties for the commencement and termination of
their employment relationship, a day certain being understood to be "that
which must necessarily come, although it may not be known when."
Seasonal employment, and employment for a particular project are merely
instances employment in which a period, where not expressly set down,
necessarily implied.
Absence of a provision in the contract of employment of specific
project or undertaking.
Price vs. Innodata Philippines/ Innodata Corp.
G.R. No. 178505
CHERRY J. PRICE, STEPHANIE G. DOMINGO, AND LOLITA ARBILERA
vs.
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prescribed by law and not by what the parties say it should be. Based on
Art. 280, the following employees are accorded regular status: (1) those
who are engaged to perform activities which are necessary or desirable in
the usual business or trade of the employer, regardless of the length of
their employment; and (2) those who were initially hired as casual
employees, but have rendered at least one year of service, whether
continuous or broken, with respect to the activity in which they are
employed. Petitioners belong to the first type. The applicable test to
determine whether an employment should be considered regular or nonregular is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of
the employee.
In this case, petitioners were employed as formatters while the primary
business of Innodata is encoding. The formatting of the data entered into
the computers is an essential part of the process of data encoding.
Formatting organizes the data encoded, making it easier to understand for
the clients and/or the intended users, and therefore necessary and
desirable in the business or trade of Innodata. However, it is also true that
while certain forms of employment require the performance of usual or
desirable functions and exceed one year, these do not necessarily result
in regular employment under Article 280 of the Labor Code. Under the
Civil Code, fixed-term employment contracts are not limited, as they are
under the present Labor Code, to those by nature seasonal or for
specific projects with predetermined dates of completion; they also
include those to which the parties by free choice have assigned a specific
date of termination. A fixed-term employment is valid only under certain
circumstances, and where, from the circumstances, it is apparent that the
period was imposed to preclude the acquisition of tenurial security by the
employee, then it should be struck down as being contrary to law, morals,
good customs, public order and public policy. The terms of the contracts of
employment of the petitioners were found to be meant only to circumvent
petitioners right of tenure and are therefore valid. This is supported by
the fact that the contracts were not only ambiguous but also appeared to
be tampered with.
Petitioners alleged and the contracts themselves state that the petitioners
were employed on February 17, 1999. However, respondents asserted
before the Labor Arbiter that the contracts were effective only on
September 6, 1999. While they submitted employment contracts with
September 6, 1999 as beginning of date of effectivity, in one of them, the
original date, February 16, 1999,was merely crossed out and replaced with
September 6. The alterations were very obvious and have not initialed by
the petitioners to indicate their assent to the same. If the contracts were
truly fixed-term contracts, then a change in the term or period agreed
upon is material and would already constitute a novation of the original
contract.
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act as independent contractors as that of Vic Del Rosario; and (c) As such,
there is no employee-employer relation between petitioners and private
respondents.
The Labor Arbiter held that the complainants are employees of the private
respondents. That the producers are not independent contractor but
should be considered as labor-only contractors and as such act as mere
agent of the real employer. Thus, the said employees are illegally
dismissed. The private respondents appealed to the NLRC which reversed
the decision of the Labor Arbiter declaring that the complainants were
project employees due to the ff. reasons: (a) Complainants were hired for
specific movie projects and their employment was co-terminus with each
movie project; (b) the work is dependent on the availability of projects. As
a result, the total working hours logged extremely varied; (c) The
extremely irregular working days and hours of complainants work explains
the lump sum payment for their service; and (d) the respondents alleged
that the complainants are not prohibited from working with other movie
companies whenever they are not working for the independent movie
producers engaged by the respondents. A motion for reconsideration was
filed by the complainants but was denied by NLRC. In effect, they filed an
instant petition claiming that NLRC committed a grave abuse of discretion
in: (a) Finding that petitioners were project employees; (b) Ruling that
petitioners were not illegally dismissed; and (c) Reversing the decision of
the Labor Arbiter. In the instant case, the petitioners allege that the NLRC
acted in total disregard of evidence material or decisive of the
controversy.
Issues: Whether or not the petitioners were illegally dismissed.
Held: Yes. Private respondents contend that petitioners were project
employees whose employment was automatically terminated with the
completion of their respective projects. Petitioners assert that they were
regular employees who were illegally dismissed. It may not be ignored,
however, that private respondents expressly admitted that petitioners
were part of a work pool, and while petitioners were initially hired possibly
as project employees, they had attained the status of regular employees
in view if VIVA's conduct.
A project employee or a member of a work pool may acquire the status of
a regular employee when the following concur:
1) There is a continuous rehiring of project employees even after
cessation of a project; and
2) The tasks performed by the alleged "project employee" are vital,
necessary and indispensable to the usual business or trade of the
employer.
However, the length of time during which the employee was continuously
re-hired is not controlling, but merely serves as a badge of regular
employment.
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beneficial to both the employer and employee for it prevents the unjust
situation of coddling labor at the expense of capital and at the same
time enables the workers to attain the status of regular employee.
Moreover, if private respondents were indeed employed as project
employees, petitioners should have submitted a report of termination to
the nearest public employment office every time their employment was
terminated due to completion of each construction project. Policy No. 20 is
explicit that the employers of project employees are exempted from the
clearance requirement but not from the submission of termination report.
It is one of the indicators of project employment according to Department
Order No. 19.
Application of work pool in the business of data encoding
Imbuido vs. NLRC
G.R. No. 114734
VIVIAN Y. IMBUIDO vs.
NATIONAL LABOR RELATIONS COMMISSION, INTERNATIONAL
INFORMATION SERVICES, INC., AND GABRIEL LIBRANDO
March 31, 2000
Facts: Petitioner was employed as a data encoder by private respondent
International Information Services, Inc., a domestic corporation engaged in
the business of data encoding and keypunching, from August 26, 1988
until October 18, 1991 when her services were terminated. From August
26, 1988 until October 18, 1991, petitioner entered into thirteen (13)
separate employment contracts with private respondent, each contract
lasting only for a period of three (3) months. Aside from the basic hourly
rate, specific job contract number and period of employment, each
contract contains the following terms and conditions: "a. This Contract is
for a specific project/job contract only and shall be effective for the period
covered as above-mentioned unless sooner terminated when the job
contract is completed earlier or withdrawn by client, or when employee is
dismissed for just and lawful causes provided by law. The happening of
any of these events will automatically terminate this contract of
employment.
In her position paper dated August 3, 1992 and filed before Labor Arbiter
Raul T. Aquino, petitioner alleged that her employment was terminated
not due to the alleged low volume of work but because she "signed a
petition for certification election among the rank and file employees of
respondents," thus charging private respondent with committing unfair
labor practices. Petitioner further complained of non-payment of service
incentive leave benefits and underpayment of 13th month pay.
On the other hand, private respondent, in its position paper filed on July
16, 1992, maintained that it had valid reasons to terminate petitioners
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term "specific project or undertaking" under Article 280 of the Labor Code
contemplates an activity which was commonly or habitually performed or
such type of work which is not done on a daily basis but only for a specific
duration of time or until the completion of the project. The services
employed are thus necessary or desirable in the employer's usual
business only for the period of time it takes to complete the project.
Without the performance of such services on a regular basis, the
employer's main business is not expected to grind to a halt.
In the case at bar, private respondents were assigned to do carpentry
work, packing and driving, activities which are usually necessary and
desirable in petitioners' usual business and which thus had to be done on
a regular basis. The fact that private respondents had rendered more than
one year of service at the time of their dismissal overturns the petitioner's
allegation that private respondents were hired for a specific or a fixed
undertaking for a limited period of time. The company-prepared master
employment contracts placed the private respondents at the mercy of
those who crafted the said contract. The work of the private respondents
is hardly "specific" or "seasonal." Such is one instance under the Code
"where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business." At any rate,
inasmuch as private respondents were engaged in the activities which are
usual and necessary in usual business or trade of petitioner company,
they are regular employees entitled to security of tenure, the provision of
the written agreement to the contrary notwithstanding. Their dismissal
without just cause in this case and without appropriate investigation is
certainly illegal.
The absence of a definite duration for the projects leads to no
other conclusion than that the employment is regular.
PNOC-Energy Development Corp. vs. NLRC
G.R. No. 169353
PNOC-ENERGY DEVELOPMENT CORPORATION, SOUTHERN NEGROS
GEOTHERMAL PROJECT vs.
NATIONAL LABOR RELATIONS COMMISSION, PNOC-EDC, SNGPEUASSOCIATED LABOR UNIONS TUCP, LEONORA A. TORRES,
ALEJANDRO B. TABAERA, JR., ARNEL T. AMOR, ROSELA S.
CALIMPONG, WILSON D. NUAY, AND ROBERTO S. RENZAL
April 13, 2007
Facts: Petitioner PNOC-Energy Development Corporation is a
government-owned and controlled corporation engaged in the exploration,
development, and utilization of energy. It undertakes several projects in
areas where geothermal energy has been discovered. To augment its
manpower requirement occasioned by the increased activities in the
development of PAL II, petitioner hired the respondent employees in the
Administration and Maintenance Section. The termination/expiration of
their respective employment were specified in their initial employment
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For its part, OMSI denied the allegations in the complaint. It averred that
when Manila International Airport Authority (MIAA) awarded to OMSI the
service contracts for the airport, OMSI hired respondents as janitors,
cleaners, and degreasers to do the services under the contracts. OMSI
informed the respondents that they were hired for the MIAA project and
their employments were coterminous with the contracts. As project
employees, they were not dismissed from work but their employments
ceased when the MIAA contracts were not renewed upon their expiration.
The termination of respondents employment cannot, thus, be considered
illegal. The Labor Arbiter dismissed the complaints. On the other hand, the
NLRC, upon appeal, modified the ruling, holding that the respondents were
regular and not project employees. OMSI sought reconsideration of the
ruling, but the NLRC denied the motion.
Petitioner went up to the Court of Appeals via a petition for certiorari,
imputing grave abuse of discretion to the NLRC for reversing the factual
findings and the decision of the Labor Arbiter. However, the Court of
Appeals dismissed the petition. The appellate court agreed with the NLRC
that the continuous rehiring of respondents, who performed tasks
necessary and desirable in the usual business of OMSI, was a clear
indication that they were regular, not project employees. The court added
that OMSI failed to establish that respondents employment had been
fixed for a specific project or undertaking, the completion or termination of
which had been determined at the time of their engagement or hiring.
Neither had it shown that respondents were informed of the duration and
scope of their work when they were hired. Furthermore, OMSI did not
submit to the Department of Labor and Employment (DOLE) reports of
termination of the respondents, thereby bolstering respondents claim of
regular employment. OMSI filed a motion for reconsideration, but the
Court of Appeals denied.
Issue: Whether or not the respondents were regular employees.
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workers and that the termination of one project does not mean the end of
their employment since they can be assigned to unfinished projects.
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The NLRC held that the complainants were project employees. The fact
that the complainants worked for the respondent under different project
employment contracts for so many years could not be made a basis to
consider them as regular employees for they remain project employees
regardless of the number of projects in which they have worked.
Issue: Whether or not they were regular employees.
Held: No. As an electrical contractor, the private respondent depends for
its business on the contracts it is able to obtain from real estate
developers and builders of buildings. Since its work depends on the
availability of such contracts or "projects," necessarily the duration of the
employment of its work force is not permanent but co-terminus with the
projects to which they are assigned and from whose payrolls they are
paid. It would be extremely burdensome for their employer who, like
them, depends on the availability of projects, if it would have to carry
them as permanent employees and pay them wages even if there are no
projects for them to work on. We hold, therefore, that the NLRC did not
abuse its discretion in finding, based on substantial evidence in the
records, that the petitioners are only project workers of the private
respondent.
Repeated rehiring of project to project employment
Samson vs. NLRC
G.R. No. 113166
ISMAEL SAMSON vs.
NATIONAL LABOR RELATIONS COMMISSION and ATLANTIC GULF
AND PACIFIC CO., MANILA, INC.
February 1, 1996
Facts:
Petitioner
has
been
employed
with
private
respondent Atlantic Gulf and Pacific Co., Manila, Inc. (AG & P) in the
latters various construction projects since April, 1965, in the course of
which employment he worked essentially as a rigger, from laborer to
rigger foreman. From 1977 up to 1985, he was assigned to overseas
projects of AG & P, particularly in Kuwait and Saudi Arabia.
On November 5, 1989, petitioner filed a complaint for the conversion of
his employment status from project employee to regular employee, which
complaint was later amended to include claims for underpayment, nonpayment of premium pay for holiday and rest day, refund of reserve fund,
and 10% thereof as attorneys fees. Petitioner alleged therein that on the
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the estimated one month period and that their services were still
necessary.
Rehiring of the employees on a project to project basis does not
ipso facto make their employment regular.
Cioco vs. C.E. Construction Corp.
G. R. No. 156748
ISAAC CIOCO, JR., REBIE A. MERCADO, BENITO V. GALVADORES,
CECILIO SOLVER, CARMELO
JUANZO, BENJAMIN BAYSA, and RODRIGO NAPOLES vs.
C. E. CONSTRUCTION CORPORATION and/or JOHNNY TAN
September 8, 2004
G.R. No. 156896
C. E. CONSTRUCTION CORPORATION vs.
ISAAC CIOCO, JR., REBIE A. MERCADO, BENITO V. GALVADORES,
CECILIO SOLVER, CARMELO JUANZO, BENJAMIN BAYSA, and
RODRIGO NAPOLES
September 8, 2004
Facts: Isaac Cioco, Jr., Rebie A. Mercado, Benito V. Galvadores, Cecilio
Solver, Carmelo Juanzo, Benjamin Baysa, and Rodrigo Napoles (WORKERS)
were hired by C.E. Construction Corporation (COMPANY), a domestic
corporation engaged in the construction business and managed by its
owner-president, Mr. Johnny Tan. They were hired as carpenters and
laborers in various construction projects from 1990 to 1999, the latest of
which was the GTI Tower in Makati. Prior to the start of every project, the
WORKERS signed individual employment contracts. Sometime in May and
June 1999, the WORKERS, along with sixty-six (66) others, were
terminated by the COMPANY on the ground of completion of the phases of
the GTI Tower project for which they had been hired. Alleging that they
were regular employees, the WORKERS filed complaints for illegal
dismissal with the Arbitration Branch of the NLRC. Claims for underpaid
wages and unpaid overtime pay, premium for holiday and rest days,
service incentive leave pay, night shift differential, and 13 thmonth pay
were likewise demanded.
On April 17, 2000, the Labor Arbiter rendered judgment in favor of the
COMPANY. The NLRC affirmed the Labor Arbiters decision on appeal.
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seasonal/project/term
Held: The fact that petitioners were constantly re-hired does not ipso
facto establish that they became regular employees. Their respective
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of
employment
contracts
make
the
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Held: While it may be allowed that in the instant case the workers were
initially hired for specific projects or undertakings of the company and
hence can be classified as project employees, the repeated re-hiring and
the continuing need for their services over a long span of time (the
shortest, at seven [7] years) have undeniably made them regular
employees. Thus, we held that where the employment of project
employees is extended long after the supposed project has been finished,
the employees are removed from the scope of project employees and
considered regular employees.
While length of time may not be a controlling test for project employment,
it can be a strong factor in determining whether the employee was hired
for a specific undertaking or in fact tasked to perform functions which are
vital, necessary and indispensable to the usual business or trade of the
employer. In the case at bar, private respondents had already gone
through the status of project employees. But their employments became
non-coterminous with specific projects when they started to be
continuously re-hired due to the demands of petitioners business and
were re-engaged for many more projects without interruption.
14. Seasonal Employment Labor Code Article 280; Section 5,
Rule I, Book IV, Implementing Rules
Seasonal workers do not become regular employees even after
one year of service.
Mercado vs. NLRC
G.R. No. 79869
FORTUNATO MERCADO, SR., ROSA MERCADO, FORTUNATO
MERCADO, JR., ANTONIO MERCADO, JOSE CABRAL, LUCIA
MERCADO, ASUNCION GUEVARA, ANITA MERCADO, MARINA
MERCADO, JULIANA CABRAL, GUADALUPE PAGUIO, BRIGIDA
ALCANTARA, EMERLITA MERCADO, ROMEO GUEVARA, ROMEO
MERCADO and LEON SANTILLAN vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), THIRD
DIVISION; LABOR ARBITER LUCIANO AQUINO, RAB-III; AURORA L.
CRUZ; SPOUSES FRANCISCO DE BORJA and LETICIA DE BORJA; and
STO. NIO REALTY, INCORPORATED
September 5, 1991
Facts: Petitioners alleged in their complaint that they were agricultural
workers utilized by private respondents in all the agricultural phases of
work on the 7 1/2 hectares of ace land and 10 hectares of sugar land
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owned by the latter; that Fortunato Mercado, Sr. and Leon Santillan
worked in the farm of private respondents since 1949, Fortunato Mercado,
Jr. and Antonio Mercado since 1972 and the rest of the petitioners since
1960 up to April 1979, when they were all allegedly dismissed from their
employment. Private respondent Aurora Cruz in her answer to petitioners'
complaint denied that said petitioners were her regular employees and
instead averred that she engaged their services, through Spouses
Fortunato Mercado, Sr. and Rosa Mercado, their "mandarols", that is,
persons who take charge in supplying the number of workers needed by
owners of various farms, but only to do a particular phase of agricultural
work necessary in rice production and/or sugar cane production, after
which they would be free to render services to other farm owners who
need their services. The other private respondents denied having any
relationship whatsoever with the petitioners and state that they were
merely registered owners of the land in question included as
correspondents in this case.
Issue: Whether or not petitioners are regular and permanent farm
workers.
Held: A project employee has been defined to be one whose employment
has been fixed for a specific project or undertaking, the completion or
termination of which has been determined at the time of the engagement
of the employee, or where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season as in the
present case.
The second paragraph of Art. 280 demarcates as "casual" employees, all
other employees who do not fan under the definition of the preceding
paragraph. The proviso, in said second paragraph, deems as regular
employees those "casual" employees who have rendered at least one year
of service regardless of the fact that such service may be continuous or
broken.
Clearly, therefore, petitioners being project employees, or, to use the
correct term, seasonal employees, their employment legally ends upon
completion of the project or the season. The termination of their
employment cannot and should not constitute an illegal dismissal.
Seasonal workers become regular employees after one year of
service.
Tacloban Sagkahan Rice and Corn Mills, Co. vs. NLRC
G.R. No. 73806
TACLOBAN SAGKAHAN RICE and CORN MILLS, CO., and/or TAN
CHENG PIAN (alias PIANA), Owner vs.
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Finally, considering the number of years that they have worked for
petitioners (the lowest is 6 years), private respondents have long attained
the status of regular employees as defined under Art. 280 of the Labor
Code.
Requisites in order that seasonal employment may be regular
employment
Hacienda Fatima vs. National Federation of Sugarcane Workers- Food and
General Trade
G.R. No. 149440
HACIENDA FATIMA and/or PATRICIO VILLEGAS, ALFONSO VILLEGAS
and CRISTINE SEGURA vs.
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Where there is no showing of clear, valid and legal cause for the
termination of employment, the law considers the matter a case of illegal
dismissal and the burden is on the employer to prove that the termination
was for a valid and authorized cause. In the case at bar, petitioners failed
to prove any such cause for the dismissal of respondents who, as
discussed above, are regular employees.
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employee has been performing the job for at least a year, even if the
performance is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the business. Hence,
the employment is considered regular, but only with respect to such
activity, and while such activity exists. Thus, the nature of ones
employment does not depend solely on the will or word of the employer.
Nor on the procedure for hiring and the manner of designating the
employee, but on the nature of the activities to be performed by the
employee, considering the employers nature of business and the duration
and scope of work to be done.
In the case at bar, while it may appear that the work of petitioners is
seasonal, inasmuch as petitioners have served the company for many
years, some for over 20 years, performing services necessary and
indispensable to LUTORCOs business, serve as badges of regular
employment. Moreover, the fact that petitioners do not work continuously
for one whole year but only for the duration of the tobacco season does
not detract from considering them in regular employment since in a litany
of cases this Court has already settled that seasonal workers who are
called to work from time to time and are temporarily laid off during offseason are not separated from service in said period, but are merely
considered on leave until re-employed.
15. Casual Employment Labor Code Article 280; Section 5(b),
Rule 1, Book IV (Amended by Article IV, D.O. No. 10 Series of
1997)
Casual employee needs no appointment paper to be a regular
employee after one year of service.
Kimberly Clark Philippines vs. Secretary of Labor
G.R. No. 156668
KIMBERLY-CLARK (PHILS.), INC. vs.
SECRETARY OF LABOR, AMBROCIO GRAVADOR, ENRICO PILI,
PAQUITO GILBUENA, ROBERTO DEL MUNDO, ALMARIO ROMINQUIT,
et al.
November 23, 2007
Facts: A Collective Bargaining Agreement was executed by and between
Kimberly-Clark (Phils.), Inc., (Kimberly), a Philippine-registered corporation
engaged in the manufacture, distribution, sale and exportation of paper
products, and United Kimberly-Clark Employees Union-Philippine Transport
and General Workers Organization (UKCEO-PTGWO) expired. The
KILUSAN-OLALIA, then a newly-formed labor organization, challenged the
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Held: No, they are not. Petitioners claim that the fixed contract of
employment which private respondent entered into was read, translated
to, comprehended and voluntarily accepted by him. No evidence was
presented to prove improper pressure or undue influence when he
entered, perfected and consummated said contract. And even if private
respondent's services were necessary and desirable in petitioner's
business, nevertheless private respondent's term was limited, citing as
authority Brent School v. Zamora. Much can be learned from the leading
case of Brent School v. Zamora, supra. In this case, the Court analyzed the
development of Article 280 from its first version as Article 319 and its
amendments under PD 850 and BP 130 and made the following
observation:
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As can be gleaned from the said case, the two guidelines, by which fixed
contracts of employments can be said NOT to circumvent security of
tenure, are either:
1. The fixed period of employment was knowingly and
voluntarily agreed upon by the parties, without any force,
duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his
consent; or:
2. It satisfactorily appears that the employer and employee
dealt with each other on more or less equal terms with no
moral dominance whatever being exercised by the former on
the latter.
shows that he indeed signed the same. 5 In fact petitioners claim that all
the previous employment contracts were also translated for the benefit of
private respondent, and it was only when he understood the same that he
signed said contracts. As per Guideline No. 1, given the circumstances
behind private respondent Mata's employment, private respondent is a
project employee. As explained by petitioners in their memorandum:
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the employee's right to be secure in his tenure, the clause in said article
indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein
should be construed to refer to the substantive evil that the Code itself
has singled out: agreements entered into precisely to circumvent security
of tenure. It should have no application to instances where a fixed period
of employment was agreed upon knowingly and voluntarily by the parties,
without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his
consent, or where it satisfactorily appears that the employer and
employee dealt with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the latter.
Unless, thus, limited in its purview, the law would be made to apply to
purposes other than those explicitly stated by its framers; it thus becomes
pointless and arbitrary, unjust in its effects and apt to lead to absurd and
unintended consequences.
The fact that respondent voluntarily accepted the employment, assumed
the position, and performed the functions of dean is clear indication that
he knowingly and voluntarily consented to the terms and conditions of the
appointment, including the fixed period of his deanship. Other than the
handwritten notes made in the letter of appointment, no evidence was
ever presented to show that respondents consent was vitiated, or that
respondent objected to the said appointment or to any of its conditions.
Furthermore, in his status as dean, there can be no valid inference that he
was shackled by any form of moral dominance exercised by AMA and the
rest of the petitioners.
Pantranco North Express, Inc. vs. NLRC
G.R. No. 106654
PANTRANCO NORTH EXPRESS, INC., and/or ABELARDO DE LEON vs.
NATIONAL LABOR RELATIONS COMMISSION, Second Division, and
RODOLFO PERONILA
December 16, 1994
Facts: It appears on the record that sometime in 1971, private
respondent Peronila was employed as a driver of Pantranco North Express,
Inc. In 1973, Peronila was administratively investigated by the corporation
for his absence from work of more than two and one-half months without
leave. According to an investigation report of petitioners' area manager,
dated March 10, 1973, Peronila claimed that he went on absence without
leave from his work from November 1, 1972 up to February 16, 1973
which was date of the investigation, or one hundred seven calendar days
continuously, because "he went to Cotabato, Mindanao to visit his dead
grandfather during the period of his unofficial absence."
In an order dated March 20, 1973, Mediator-Factfinder Loreto V. Poblete of
the National Relations Commission, Regional Office No. II in Tuguegarao,
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MGS and David countered that private respondents were hired for a
definite period of employment, the commencement and termination of
which were already known to them; that the two-year period stipulated in
the private respondents' contract with NPC had expired; that it was
the NPC which requested MGS and David for an extension on a monthly
basis of the employment of some of the private respondents; and that the
reason for the termination of private respondents' employment was the
termination itself of MGSs contract with NPC.
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Labor Arbiter Ariel C. Santos promulgated his decision finding that, by the
nature of their employment, private respondents were "usually
contractual employees." Nonetheless, he opined, in view of the length of
their service, that private respondents had attained the status of "regular
contractual employees" who, pursuant to Policy Instruction No. 20 issued
by then Labor Secretary Blas Ople, "cannot just be terminated after the
expiration of a contract in an area to where they are assigned without
paying them the corresponding separation pay from the time they have
served respondent's company. MGS and David appealed to the NLRC
which affirmed the LAs decision.
Issue: Whether or not employees allowed to work for more than 1 year
are considered regular employee.
Held: Its a well-settled rule that the yardstick in the determination of the
existence of an employer-employee relationship consists of these four (4)
elements: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal, and (4) the power to
control the employee's conduct. All these elements are present in this
case.
Private respondents were selected and hired by MGS which assigned them
to the NPC housing village in Bagac and Bataan. They drew their salaries
from MGS which eventually dismissed them. MGS's control over private
respondents was manifest in its power to assign and pull them out of
clients at its own discretion. It is enough that the former has the right to
wield the power.
Thus, in Baguio Country Club Corporation v. NLRC, the Court said: if the
employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the business. Hence,
the employment is also considered regular but only with respect to such
activity and while such activity exists.
Agusan del Norte Electric Coop., Inc. vs. Cagampang and Garzon
G.R. No. 167627
AGUSAN DEL NORTE ELECTRIC COOPERATIVE, INC. and HORACIO T.
SANTOS vs.
JOEL CAGAMPANG and GLENN GARZON
October 10, 2008
Facts: Respondents Joel Cagampang and Glenn Garzon started working as
linemen for petitioner Agusan del Norte Electric Cooperative, Inc. (ANECO)
on October 1, 1990, under an employment contract which was for a period
not exceeding three months.
They were both allegedly required to work eight hours a day and
sometimes on Sundays, getting a daily salary of P122.00. When the
contract expired, the two were laid-off for one to five days and then
ordered to report back to work but on the basis of job orders. After several
renewals of their job contracts in the form of job orders for similar
employment periods of about three months each, the said contracts
eventually expired on April 31, 1998 and July 30, 1999. Respondents'
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of
fixed
period
employment
contract
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Overseas Workers
Prohibited Business Agencies and Entities, Articles 16, 18, 25, 26;
2002 POEA Rules and Regulations, Part I, Rule II, Section 2
Hornales vs. NLRC
G.R. No. 118943
MARIO HORNALES vs.
THE NATIONAL LABOR RELATIONS COMMISSION, JOSE CAYANAN
AND JEAC INTERNATIONAL MANAGEMENT CONTRACTOR SERVICES
September 10, 2001
Facts: Mario Hornales filed with POEA a complaint for non-payment of
wages and recovery of damages against JEAC International Management
& Contractor Services (JEAC) and its owner, Jose Cayanan. As JEACs
surety, Country Bankers Insurance Corporation (Country Bankers) was
later on impleaded by Hornales. The complaint alleged that Cayanan
through JEAC sent Hornales, together with other Filipinos, to Singapore. At
their departure, they were advised that someone would meet them in
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Singapore. True enough, they were welcomed by Victor Lim, the owner of
Step-Up Employment Agency. He informed them that they would be
working as fishermen with a monthly salary of US $200.00
each. Thereafter, they boarded Ruey Horn #3, a vessel owned by Min Fu
Fishery Co. Ltd. of Taiwan.
On board the vessel, Hornales was subjected to inhumane work
conditions, like inadequate supply of food and water, maltreatment by the
ship captain, and lack of medical attendance. He was also required to
work for twenty-two hours a day without pay. Hornales, together with
other Filipino workers, left the vessel while it was docketed in Mauritius
Island because theyre unable to bear the situation. Hornales returned to
the Philippines. Upon his return, he asked Cayanan to pay his
salaries. Instead of doing so, they required him to surrender his passport
promising that they would procure another job for him. Later, Cayanan
gave him the amount of P500.00
Cayanan filed an answer claiming that, Hornales and Victor Lim and Min
Fee Fishery Co. Ltd are all total strangers to them. They even offered in
evidence the Joint Affidavit of 2 of Hornales co-workers in Singapore,
stating that while they were in Singapore, Hornales admitted to them that
he did not apply in any agency in the Philippines; that he came to
Singapore merely as a tourist; and that, he applied directly and personally
with Step-Up Agency to which such statements were corroborated through
a certification issued by Step-Up Agency.
Hornales filed a Supplemental Affidavit claiming that he was not a total
stranger to JEAC, and as a matter of fact, he knew Cayanan for a long time
already. The POEA rendered a decision in favor of Hornales. JEAC, Cayanan
and Travellers Insurance Corp. were ordered to jointly and severally pay
Hornales. On appeal, NLRC vacated the decision of the POEA and
dismissed Hornales complaint mainly on the ground that there was no
employer-employee relationship between the parties.
Hornales filed a petition for certiorari on the ground that the NLRC
committed a grave abuse of discretion in vacating the decision of the
POEA. He avers that Cayanan was the one who deployed him to Singapore
to work as fisherman and that, NLRCs conclusion that respondent JEAC
was a mere travel agency and petitioner, a mere tourist, has no basis in
fact and in law. JEAC maintained their position that the NLRC did not
commit grave abuse of discretion when it set aside the decision of the
POEA, since Hornales failed to show any POEA record or document to
prove that they deployed him to work in Singapore. Neither did he present
a Special Power of Attorney to prove that Step-Up Agency authorized JEAC
to recruit and deploy contract workers in its behalf. The Solicitor
General joins Hornales in assailing the decision of the NLRC as baseless
and erroneous.
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Issue: Whether or not JEAC violates the POEA Rules and can be held liable
against Hornales.
Held: Notwithstanding the foregoing, it must be emphasized that the
proceedings before the POEA is non-litigious in nature. The technicalities
of law and procedure and the rules obtaining in the courts of law shall not
strictly apply thereto and a hearing officer may avail himself of all
reasonable means to ascertain the facts of the case. The scale of evidence
must tilt in favor of petitioner.
We cannot give credence to Cayanans contentions that Hornales is a total
stranger to them and that MIN Fee Fishery Co. Ltd. is not its principal,
neither do we believe that Cayanan do not know Mr. Victor Lim who met
Hornales
in
Singapore. Cayanans
position
paper
belies
his
contentions. How could he write to a certain Step-Up Employment Agency
in Singapore, Hornales employer, when the latter is not even mentioned
in his complaint? We wonder where Cayanan got the name of this
employer if the same is really not known to them.
It is very unlikely for Hornales to proceed to Singapore as a tourist without
knowing anybody at the site and just to apply for work. Had there not
been previous arrangements with Cayanan, it is not all possible for
Hornales to land on a job in Singapore because he is only a tourist.
Cayanan had to resort to this misrepresentation of allowing its recruits to
leave as tourist because it is a service contractor and it is not authorized
to deploy fishermen.
Cayanan further argued that they cannot be held liable by Hornales
because no employment contract between him and Step-Up Agency had
been approved by the POEA. They also claim that the absence of a Special
Power of Attorney and an Affidavit of Responsibility, as required under
Sections 1 and 2, Rule 1, Book III of the POEA Rules and Regulations only
proves that they did not deploy Hornales to Singapore.
Their argument is far from persuasive. Surely, they cannot expect us to
utilize their non-compliance with the POEA Rules and Regulations as a
basis in absolving them. To do so would be tantamount to giving premium
to acts done in violation of established rules. At most, private respondents
act of deploying Hornales to Singapore without complying with the POEA
requirements only made them susceptible to cancellation or suspension of
license as provided by Section 2, Rule I, Book VI of POEA Rules and
Regulations:
Section 2. Grounds for suspension/cancellation of license.
m. Deploying workers whose employment and travel documents were not
processed by the Administration;
n. Deploying workers workers or seafarers to vessels or principals not
accredited by the Administration;
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Facts: Ramon Dujua, his mother Rose, his aunt, Editha Singh, and his
uncle, Guillermo Samson were charged with Illegal Recruitment in large
scale. Only Ramon was arrested. Four testified against Ramon Dujua. They
were also charged with separate counts of Estafa. In the alleged
information filed by the complainants against Dujua, et al, all of them said
that they were promised employment abroad upon payment of fees but
they were not actually deployed. Apparently, all of the complainants were
able to give Dujua money for placement fees and other fee asked from
them in exchange for the possibility to work abroad. Of the four accused,
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only Ramon Dujua was arrested and arraigned. His mother, aunt and uncle
remain at large. Ramon entered a plea of not guilty to each of the
charges, whereupon trial commenced. While the Information for illegal
recruitment named several persons as having been promised jobs by the
accused, only four of them testified.
Issue: Whether or not illegal recruitment in large scale was committed by
Ramon Dujua, et al.
Held: All three elements in committing Illegal Recruitment have been
established beyond reasonable doubt to wit: (1) the accused engages in
acts of recruitment and placement of workers defined under Article 13(b)
or in any prohibited activities under Art. 34 of the Labor Code; (2) the
accused has not complied with the guidelines issued by the Secretary of
Labor and Employment, particularly with respect to the securing of a
license or an authority to recruit and deploy workers, either locally or
overseas; and (3) the accused commits the unlawful acts against three or
more persons, individually or as a group.
Second, appellant did not have any license or authority to recruit persons
for overseas work, as shown by the Certification issued by the
POEA. Neither did his employer, the World Pack Travel and Tours, possess
such license or authority.
Nevertheless, it has been alleged and proven that appellant undertook the
recruitment of not less than three persons, namely, Cabus, Caluten and
Perlas.
People vs. Domingo
G.R. No. 181475
PEOPLE OF THE PHILIPPINES vs.
LARRY "LAURO" DOMINGO
April 7, 2009
Facts: Lauro Domingo was charged with the crime of illegal recruitment
pursuant to Article 38 in relation to Articles 34 and 39 of the Labor Code.
In the information filed against Domingo it was alleged that on or about
November 1999 to January 2000, Domingo, being a non-licensee or nonholder of authority from the DOLE to recruit and/ or place workers under
local or overseas employment, undertake illegal recruitment, placement
or deployment of the 23 complainants. In the informations for 23 counts of
Estafa, it was alleged that Domingo falsely represented himself that he
has power and capacity to recruit and employ workers in Saipan and could
facilitate necessary papers in connection therewith if given the necessary
amount, and by means of deceit inveigled Manzo to give P14, 000 (which
the latter gave and delivered to Domingo) which Domingo
misappropriated himself to the damage and prejudice of Manzo. It was
verified with the DOLE that Domingo wasnt a licensed recruiter. Out of
the 23 complainants, only 5 (Cambay, Ondra, Aguilar, Vivas, and Cabigao)
of them testified. Thereafter, Cabigao recanted his testimony averring that
the one who actually recruited him was Gimeno and not Domingo and that
they only agreed among themselves to file a case against Domingo
because Gimeno was nowhere to be found.
Domingo denied all accusations against him claiming that he was a driver
hired by Gimeno whom he met at a bus bound for Manila. It was Gimeno
who undertook the recruitment activities. Domingo likewise presented
complainants Espiritu and Castillo who corroborated his claim that it was
Gimeno who actually recruited them.
The trial court found Domingo guilty beyond reasonable doubt of Illegal
Recruitment (Large Scale) and of 2 counts of Estafa. On appeal to the CA,
Domingo maintained that the trial court erred in finding him guilty beyond
reasonable doubt on the basis that there were no receipts shown to prove
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payment and he faulted trial court for failing to give credit to Cabigaos
retraction.
Issue: Whether or not Domingo is guilty of Illegal Recruitment in Large
Scale and Estafa.
Held: The court affirmed the decision of the CA in finding Domingo guilty
of Illegal recruitment and Estafa. With respect to the receipts questioned
by Domingo, the court held that the non-presentation of the receipts had
no bearing on his culpability in light of the assertions of the witnesses that
it was Domingo who recruited them. As for Cabigaos recantation, the
court held that mere retraction by a prosecution witness doesnt
necessarily vitiate his original testimony and that, in any event, the
prosecution had proven beyond reasonable doubt that at least 3 were
illegally recruited by the accused.
The term recruitment is defined under Article 13 (b) of the Labor Code, it
refers to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring worker, and includes referrals, contract
services, promising or advertising for employment, locally or abroad,
whether for profit or not. Provided, that any person or entity which, in any
manner, offers or promises fir a fee employment to 2 or more persons
shall be deemed engage in recruitment and placement. On the other
hand, Article 38, paragraph (a) of the labor code provides:
Art. 38 Illegal Recruitment - (a) Any recruitment activities, including
the prohibited practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of this Code. The Ministry of Labor
(now DOLE) or any law enforcement officer may initiate complaints under
this Article. (b) Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving economic sabotage
and shall be penalized in accordance with Article 39 hereof.
Illegal Recruitment is deemed committed by a syndicate or in large scale if
carried out by a group of 3 or more persons conspiring and/or
confederating with one another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under the 1 st par. hereof. Illegal
Recruitment is deemed committed in large scale if committed against 3 or
more persons individually or as a group.
From the foregoing provisions, it is clear that any recruitment activities to
be undertaken by non-licensee or non-holder of authority shall be deemed
illegal and punishable under Article 39 of the Labor Code. The court finds
that the prosecution ably discharged its onus of proving guilt beyond
reasonable doubt of the crimes charged against Domingo.
People vs. Gallo
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months and 4 days. For the unexpired 2nd year, the court awarded 3
months of salary. With regard to the 11 months, and 4 days of the 1 st year,
the CA refused to apply the 3-month rule.
Issue: Whether or not Almanzor was illegally dismissed from employment
and if so, to determine the correct award of compensation due him.
Held: Section 10 of R.A. 8042 provides: In case of termination of overseas
employment without just, valid and authorized cause as defined by law or
contract, the worker shall be entitled to the full reimbursement of his
placement fee with interest at 12% per annum, plus his salaries for the
unexpired portion of his employment contract or for 3 months for every
year of the unexpired term, whichever is less.
The Court affirmed the decision of the CA with the modification that the
monetary award to be paid to Almanzor shall be the amount set forth by
the Labor Arbiter which was affirmed by the NLRC. It added that the
correct interpretation of the above-mentioned provision was settled in the
case of Marsaman Manning Agency Inc. v. NLRC where the court held 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 3 months salary for every year of the unexpired
term, whichever is less, comes into play when the employment contract
concerned has a term of at least 1 year or more. The employment
contract involved in the case covers a 2-year period but the overseas
contract worker actually worked for only 26 days prior to his illegal
dismissal. Thus, the 3-month rule applies. The SC didnt agree with the
CAs ruling that Almanzor should be paid his salaries for 14 months and 4
days. Record show that his actual employment lasted only for 26 days.
Considering the aforementioned provision, the contract covers a 2-year
period. Hence, Almanzor is entitled to 6 months salary.
Alien Employment Coverage, Exemption Labor Code Article 40;
D.O. No. 97-09, Sections 1,2
Almodiel vs. NLRC
G.R. No. 100641
FARLE P. ALMODIEL vs.
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION),
RAYTHEON PHILS., INC.
June 14, 1993
Facts: Farle Almodiel is a CPA who was hired by Raytheon Philippines, Inc.
as Cost Accounting Manager through John Clements Consultants, Inc. with
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Held: With regard to the first issue, the Court considers that petitioners
have failed to show any grave abuse of discretion or any act without or in
excess of jurisdiction on the part of respondent Secretary of Labor in
rendering his decision, revoking petitioner Cone's Alien Employment
Permit. Petitioner GMC's claim that hiring of a foreign coach is an
employer's prerogative has no legal basis at all. Under Article 40 of the
Labor Code, an employer seeking employment of an alien must first
obtain an employment permit from the Department of Labor. Petitioner
GMC's right to choose whom to employ is, of course, limited by the
statutory requirement of an alien employment permit.
The provisions of the Labor Code and its Implementing Rules and
Regulations requiring alien employment permits were in existence long
before petitioners entered into their contract of employment. It is firmly
settled that provisions of applicable laws, especially provisions relating to
matters affected with public policy, are deemed written into contracts.
Private parties cannot constitutionally contract away the otherwise
applicable provisions of law.
In short, the Department of Labor is the agency vested with jurisdiction to
determine the question of availability of local workers. The constitutional
validity of legal provisions granting such jurisdiction and authority and
requiring proof of non-availability of local nationals able to carry out the
duties of the position involved, cannot be seriously questioned. Petitioners
apparently also questioned the validity of the Implementing Rules and
Regulations, specifically Section 6 (c), Rule XIV, Book I of the
Implementing Rules, as imposing a condition not found in the Labor Code
itself. Section 6 (c), Rule XIV, Book I of the Implementing Rules, provides
as follows:
Section 6. Issuance of Employment Permit the Secretary of Labor may
issue an employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of
Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of
any person in the Philippines who is competent and willing to do the job
for which the services of the applicant are desired.
(c) His assessment as to whether or not the employment of the applicant
will redound to the national interest;
(d) Admissibility of the alien as certified by the Commission on
Immigration and Deportation;
(e) The recommendation of the Board of Investments or other appropriate
government agencies if the applicant will be employed in preferred areas
of investments or in accordance with the imperative of economic
development;
Article 40 of the Labor Code reads as follows:
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Art. 40. Employment per unit of non-resident aliens. Any alien seeking
admission to the Philippines for employment purposes and any domestic
or foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of
Labor.
The employment permit may be issued to a non-resident alien or to the
applicant employer after a determination of the non-availability of a
person in the Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said
employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered
enterprise.
e) To regulate the employment of aliens, including the establishment of a
registration and/or work permit system;
17.
Based on the evidence before us, petitioner did not comply with the
requirements of the law. It is mandated that apprenticeship agreements
entered into by the employer and apprentice shall be entered only in
accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment. Prior approval by the Department of
Labor and Employment of the proposed apprenticeship program is,
therefore, a condition sine quo non before an apprenticeship agreement
can be validly entered into. The act of filing the proposed apprenticeship
program with the Department of Labor and Employment is a preliminary
step towards its final approval and does not instantaneously give rise to
an employer-apprentice relationship. Article 57 of the Labor Code provides
that the State aims to "establish a national apprenticeship program
through the participation of employers, workers and government and nongovernment agencies" and "to establish apprenticeship standards for the
protection of apprentices." To translate such objectives into existence,
prior approval of the DOLE to any apprenticeship program has to be
secured as a condition sine qua non before any such apprenticeship
agreement can be fully enforced. The role of the DOLE in apprenticeship
programs and agreements cannot be debased. Hence, since the
apprenticeship agreement between petitioner and private respondent has
no force and effect in the absence of a valid apprenticeship program duly
approved by the DOLE, private respondent's assertion that he was hired
not as an apprentice but as a delivery boy ("kargador" or "pahinante")
deserves credence.
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respondent or in any other bank in the Philippines which deals with purely
counting and sorting of bills in banking operations.
The Labor Arbiter and, on appeal, the NLRC ruled against herein
petitioners. In affirming the ruling of the Labor Arbiter that herein
petitioners could not be deemed regular employees under Article 280 of
the Labor Code, as amended, Respondent Commission ratiocinated as
follows:
We agree that Art. 280 is not controlling herein. We give due credence to
the conclusion that complainants were hired as an accommodation to the
recommendation of civic oriented personalities whose employments were
covered by xxx Employment Contracts with special provisions on duration
of contract as specified under Art. 80. Hence, as correctly held by the
Labor Arbiter a quo, the terms of the contract shall be the law between
the parties.
Petitioners maintain that they should be considered regular employees,
because their task as money sorters and counters was necessary and
desirable to the business of respondent bank. They further allege that
their contracts served merely to preclude the application of Article 280
and to bar them from becoming regular employees. Private respondent,
on the other hand, submits that petitioners were hired only as special
workers and should not in any way be considered as part of the regular
complement of the Bank. Rather, they were special workers under Article
80 of the Labor Code. Private respondent contends that it never solicited
the services of petitioners, whose employment was merely an
accommodation in response to the requests of government officials and
civic-minded citizens. They were told from the start, with the assistance of
government representatives that they could not become regular
employees because there were no plantilla positions for money sorters,
whose task used to be performed by tellers. Their contracts were renewed
several times, not because of need but merely for humanitarian
reasons. Respondent submits that as of the present, the special position
that was created for the petitioners no longer exists in private respondent
bank, after the latter had decided not to renew anymore their special
employment contracts.
The NLRC also declared that the Magna Carta for Disabled Persons was
not applicable, considering the prevailing circumstances/milieu of the
case.
Issue: 1.) Whether or not the NLRC committed grave abuse of discretion
in holding that the petitioners - money sorters and counters working in a
bank - were not regular employees.
2.) Whether or not the NLRC committed grave abuse of discretion in
not applying the provisions of the Magna Carta for the Disabled (Republic
Act No. 7277), on proscription against discrimination against disabled
persons.
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The same, however, cannot be said of our male workers. In the first place,
there is no evidence that, except perhaps for isolated instances, our men
abroad have been afflicted with an Identical predicament. The petitioner
has proffered no argument that the Government should act similarly with
respect to male workers. The Court, of course, is not impressing some
male chauvinistic notion that men are superior to women. What the Court
is saying is that it was largely a matter of evidence (that women domestic
workers are being ill-treated abroad in massive instances) and not upon
some fanciful or arbitrary yardstick that the Government acted in this
case. It is evidence capable indeed of unquestionable demonstration and
evidence this Court accepts. The Court cannot, however, say the same
thing as far as men are concerned. There is simply no evidence to justify
such an inference. Suffice it to state, then, that insofar as classifications
are concerned, this Court is content that distinctions are borne by the
evidence. Discrimination in this case is justified.
There is likewise no doubt that such a classification is germane to the
purpose behind the measure. Unquestionably, it is the avowed objective
of Department Order No. 1 to "enhance the protection for Filipino female
overseas workers" this Court has no quarrel that in the midst of the
terrible mistreatment Filipina workers have suffered abroad, a ban on
deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is
intended to apply indefinitely so long as those conditions exist. This is
clear from the Order itself, meaning to say that should the authorities
arrive at a means impressed with a greater degree of permanency, the
ban shall be lifted. As a stop-gap measure, it is possessed of a necessary
malleability, depending on the circumstances of each case.
Neither is there merit in the contention that Department Order No. 1
constitutes an invalid exercise of legislative power. It is true that police
power is the domain of the legislature, but it does not mean that such an
authority may not be lawfully delegated. As we have mentioned, the Labor
Code itself vests the Department of Labor and Employment with
rulemaking powers in the enforcement whereof.
The petitioners's reliance on the Constitutional guaranty of worker
participation "in policy and decision-making processes affecting their
rights and benefits" is not well-taken. The right granted by this provision,
again, must submit to the demands and necessities of the State's power
of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
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In her reply letter dated January 17, 1992, private respondent stated that
she was not aware of PT&T's policy regarding married women at the time.
Private respondent was dismissed from the company effective January 29,
1992, which she readily contested by initiating a complaint for illegal
dismissal, coupled with a claim for non-payment of cost of living
allowances (COLA), before the Regional Arbitration Branch of the National
Labor Relations Commission in Baguio City.
On November 23, 1993, Labor Arbiter Irenarco R. Rimando handed down a
decision declaring that private respondent, who had already gained the
status of a regular employee, was illegally dismissed by petitioner. On
appeal to the National Labor Relations Commission (NLRC), said public
respondent upheld the labor arbiters decision dated April 29, 1994.
Issue: Whether or not ptitioners policy against marriage is valid.
Held: No, it is not valid. The Constitution, cognizant of the disparity in
rights between men and women in almost all phases of social and political
life, provides a gamut of protective provisions. To cite a few of the
primordial ones, Section 14, Article II on the Declaration of Principles and
State Policies, expressly recognizes the role of women in nation-building
and commands the State to ensure, at all times, the fundamental equality
before the law of women and men. Corollary thereto, Section 3 of Article
XIII (the progenitor whereof dates back to both the 1935 and 1973
Constitution) pointedly requires the State to afford full protection to labor
and to promote full employment and equality of employment
opportunities for all, including an assurance of entitlement to tenurial
security of all workers. Similarly, Section 14 of Article XIII mandates that
the State shall protect working women through provisions for
opportunities that would enable them to reach their full potential.
In the case at bar, petitioner's policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage runs
afoul of the test of, and the right against, discrimination, afforded all
women workers by our labor laws and by no less than the Constitution.
Contrary to petitioner's assertion that it dismissed private respondent
from employment on account of her dishonesty, the record discloses
clearly that her ties with the company were dissolved principally because
of the company's policy that married women are not qualified for
employment in PT & T, and not merely because of her supposed acts of
dishonesty.
That it was so can easily be seen from the memorandum sent to private
respondent by Delia M. Oficial, the branch supervisor of the company, with
the reminder, in the words of the latter, that "you're fully aware that the
company is not accepting married women employee (sic), as it was
verbally instructed to you." Again, in the termination notice sent to her by
the same branch supervisor, private respondent was made to understand
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that her severance from the service was not only by reason of her
concealment of her married status but, over and on top of that, was her
violation of the company's policy against marriage ("and even told you
that married women employees are not applicable [sic] or accepted in our
company.") Parenthetically, this seems to be the curious reason why it was
made to appear in the initiatory pleadings that petitioner was represented
in this case only by its said supervisor and not by its highest ranking
officers who would otherwise be solidarily liable with the corporation.
The government, to repeat, abhors any stipulation or policy in the nature
of that adopted by petitioner PT & T. The Labor Code state, in no uncertain
terms, as follows:
Art. 136. Stipulation against marriage. It shall be unlawful
for an employer to require as a condition of employment or
continuation of employment that a woman shall not get
married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of
marriage.
Further, it is not relevant that the rule is not directed against all women
but just against married women. And, where the employer discriminates
against married women, but not against married men, the variable is sex
and the discrimination is unlawful. Upon the other hand, a requirement
that a woman employee must remain unmarried could be justified as a
"bona fide occupational qualification," or BFOQ, where the particular
requirements of the job would justify the same, but not on the ground of a
general principle, such as the desirability of spreading work in the
workplace. A requirement of that nature would be valid provided it reflects
an inherent quality reasonably necessary for satisfactory job performance.
Thus, in one case, a no-marriage rule applicable to both male and female
flight attendants, was regarded as unlawful since the restriction was not
related to the job performance of the flight attendants.
Petitioner's policy is not only in derogation of the provisions of Article 136
of the Labor Code on the right of a woman to be free from any kind of
stipulation against marriage in connection with her employment, but it
likewise assaults good morals and public policy, tending as it does to
deprive a woman of the freedom to choose her status, a privilege that by
all accounts inheres in the individual as an intangible and inalienable
right. Hence, while it is true that the parties to a contract may establish
any agreements, terms, and conditions that they may deem convenient,
the same should not be contrary to law, morals, good customs, public
order, or public policy. Carried to its logical consequences, it may even be
said that petitioner's policy against legitimate marital bonds would
encourage illicit or common-law relations and subvert the sacrament of
marriage.
Stipulation Against Marriage Labor Code Article 136
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On May 19, 2003, the Court of Appeals promulgated its Decision denying
the Petition for Review.
Issue: Whether or not Glaxos policy prohibiting its employees from
marrying an employee of a competitor company is valid.
Held: Yes, it is valid. No reversible error can be ascribed to the Court of
Appeals when it ruled that Glaxos policy prohibiting an employee from
having a relationship with an employee of a competitor company is a valid
exercise of management prerogative.
Glaxo has a right to guard its trade secrets, manufacturing formulas,
marketing strategies and other confidential programs and information
from competitors, especially so that it and Astra are rival companies in the
highly competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees
of competitor companies upon Glaxos employees is reasonable under the
circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy,
Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of enterprises to
adopt and enforce such a policy to protect its right to reasonable returns
on investments and to expansion and growth. Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and the
protection of labor, it does not mean that every labor dispute will be
decided in favor of the workers. The law also recognizes that management
has rights which are also entitled to respect and enforcement in the
interest of fair play.
In any event, from the wordings of the contractual provision and the policy
in its employee handbook, it is clear that Glaxo does not impose an
absolute prohibition against relationships between its employees and
those of competitor companies. Its employees are free to cultivate
relationships with and marry persons of their own choosing. What the
company merely seeks to avoid is a conflict of interest between the
employee and the company that may arise out of such relationships. As
succinctly explained by the appellate court, thus:
The policy being questioned is not a policy against marriage. An
employee of the company remains free to marry anyone of his or
her choosing. The policy is not aimed at restricting a personal
prerogative that belongs only to the individual. However, an
employees personal decision does not detract the employer from
exercising management prerogatives to ensure maximum profit and
business success. . .
The Court of Appeals also correctly noted that the assailed company
policy which forms part of respondents Employee Code of Conduct and of
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its contracts with its employees, such as that signed by Tescon, was made
known to him prior to his employment. Tecson, therefore, was aware of
that restriction when he signed his employment contract and when he
entered into a relationship with Bettsy. Since Tecson knowingly and
voluntarily entered into a contract of employment with Glaxo, the
stipulations therein have the force of law between them and, thus, should
be complied with in good faith." He is therefore estopped from questioning
said policy.
Sexual Harassment R.A. No. 7877
Philippine Aelous Automotive United Corporation vs. NLRC
G.R. No. 124617
PHILIPPINE AEOLUS AUTO-MOTIVE UNITED CORPORATION and/or
FRANCIS CHUA vs.
NATIONAL LABOR RELATIONS COMMISSION and ROSALINDA C.
CORTEZ April 28, 2000
Facts: Petitioner Philippine Aeolus Automotive United Corporation
(PAAUC) is a corporation duly organized and existing under Philippine
laws, petitioner Francis Chua is its President while private respondent
Rosalinda C. Cortez was a company nurse1 of petitioner corporation until
her termination on 7 November 1994.
On 5 October 1994 a memorandum was a issued by Ms. Myrna Palomares,
Personnel Manager of petitioner corporation, addressed to private
respondent Rosalinda C. Cortez requiring her to explain within forty-eight
(48) hours why no disciplinary action should be taken against her (a) for
throwing a stapler at Plant Manager William Chua, her superior, and
uttering invectives against him on 2 August 1994; (b) for losing the
amount of P1,488.00 entrusted to her by Plant Manager Chua to be given
to Mr. Fang of the CLMC Department on 23 August 1994; and, (c) for
asking a co-employee to punch-in her time card thus making it appear
that she was in the office in the morning of 6 September 1944 when in
fact she was not. The memorandum however was refused by private
respondent although it was read to her and discussed with her by a coemployee. She did not also submit the required explanation, so that while
her case pending investigation the company placed her under preventive
suspension for thirty (30) days effective 9 October 1994 to 7 November
1994.
On 20 October 1994, while Cortez was still under preventive suspension,
another memorandum was issued by petitioner corporation giving her
seventy-two (72) hours to explain why no disciplinary action should be
taken against her for allegedly failing to process the ATM applications of
her nine (9) co-employees with the Allied Banking Corporation. On 21
October 1994 private respondent also refused to receive the second
memorandum although it was read to her by a co-employee. A copy of the
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Private respondent admittedly allowed four (4) years to pass before finally
coming out with her employer's sexual impositions. Not many women,
especially in this country, are made of the stuff that can endure the agony
and trauma of a public, even corporate, scandal. If petitioner corporation
had not issued the third memorandum that terminated the services of
private respondent, we could only speculate how much longer she would
keep her silence. Moreover, few persons are privileged indeed to transfer
from one employer to another. The dearth of quality employment has
become a daily "monster" roaming the streets that one may not be
expected to give up one's employment easily but to hang on to it, so to
speak, by all tolerable means. Perhaps, to private respondent's mind, for
as long as she could outwit her employer's ploys she would continue on
her job and consider them as mere occupational hazards. This uneasiness
in her place of work thrived in an atmosphere of tolerance for four (4)
years, and one could only imagine the prevailing anxiety and resentment,
if not bitterness, that beset her all that time. But William Chua faced
reality soon enough. Since he had no place in private respondent's heart,
so must she have no place in his office. So, he provoked her, harassed
her, and finally dislodged her; and for finally venting her pent-up anger for
years, he "found" the perfect reason to terminate her.
In determining entitlement to moral and exemplary damages, we restate
the bases therefor. In moral damages, it suffices to prove that the
claimant has suffered anxiety, sleepless nights, besmirched reputation
and social humiliation by reason of the act complained of. Exemplary
damages, on the other hand, are granted in addition to, inter alia, moral
damages "by way of example or correction for the public good" if the
employer ''acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner."
Anxiety was gradual in private respondent's five (5)-year employment. It
began when her plant manager showed an obvious partiality for her which
went out of hand when he started to make it clear that he would
terminate her services if she would not give in to his sexual advances.
Sexual harassment is an imposition of misplaced "superiority" which is
enough to dampen an employee's spirit in her capacity for advancement.
It affects her sense of judgment; it changes her life. If for this alone
private respondent should be adequately compensated. Thus, for the
anxiety, the seen and unseen hurt that she suffered, petitioners should
also be made to pay her moral damages, plus exemplary damages, for the
oppressive manner with which petitioners effected her dismissal from the
service, and to serve as a forewarning to lecherous officers and employers
who take undue advantage of their ascendancy over their employees.
Domingo vs. Rayala
G.R. No. 155831
MA. LOURDES T. DOMINGO vs.
ROGELIO I. RAYALA
February 18, 2008
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Held: Yes, Rayala committed the acts complained of and was guilty of
sexual harassment is, therefore, the common factual finding of not just
one, but three independent bodies: the Committee, the OP and the CA. It
should be remembered that when supported by substantial evidence,
factual findings made by quasi-judicial and administrative bodies are
accorded great respect and even finality by the courts. The principle,
therefore, dictates that such findings should bind us.
He insists, however, that these acts do not constitute sexual harassment,
because Domingo did not allege in her complaint that there was a
demand, request, or requirement of a sexual favor as a condition for her
continued employment or for her promotion to a higher position. Rayala
urges us to apply to his case our ruling in Aquino v. Acosta.
We find respondents insistence unconvincing. Basic in the law of public
officers is the three-fold liability rule, which states that the wrongful acts
or omissions of a public officer may give rise to civil, criminal and
administrative liability. An action for each can proceed independently of
the others. This rule applies with full force to sexual harassment.
The law penalizing sexual harassment in our jurisdiction is RA 7877.
Section 3 thereof defines work-related sexual harassment in this wise:
Sec. 3. Work, Education or Training-related Sexual Harassment
Defined. Work, education or training-related sexual harassment is
committed by an employer, manager, supervisor, agent of the
employer, teacher, instructor, professor, coach, trainor, or any other
person who, having authority, influence or moral ascendancy over
another in a work or training or education environment, demands,
requests or otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement for
submission is accepted by the object of said Act.
(a) In a work-related or employment environment, sexual
harassment is committed when:
(1) The sexual favor is made as a condition in the hiring or in the
employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the refusal to grant
the sexual favor results in limiting, segregating or classifying the
employee which in a way would discriminate, deprive or diminish
employment opportunities or otherwise adversely affect said
employee;
(2) The above acts would impair the employees rights or privileges
under existing labor laws; or
(3) The above acts would result in an intimidating, hostile, or
offensive environment for the employee.
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at its staff house located at Masara, Maco, Davao del Norte. In the
beginning, she was paid on a piece rate basis. However, on January 17,
1982, she was paid on a monthly basis at P250.00 a month which was
ultimately increased to P575.00 a month.
On December 18, 1987, while she was attending to her assigned task and
she was hanging her laundry, she accidentally slipped and hit her back on
a stone. She reported the accident to her immediate supervisor Mila de la
Rosa and to the personnel officer, Florendo D. Asirit. As a result of the
accident she was not able to continue with her work. She was permitted to
go on leave for medication. De la Rosa offered her the amount of P
2,000.00 which was eventually increased to P5,000.00 to persuade her to
quit her job, but she refused the offer and preferred to return to work.
Petitioner did not allow her to return to work and dismissed her on
February 4, 1988.
On March 11, 1988, private respondent filed a request for assistance with
the Department of Labor and Employment. After the parties submitted
their position papers as required by the labor arbiter assigned to the case
on August 24, 1988 the latter rendered a decision to direct petitioner to
pay total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND
42/100 (P55,161.42).
Not satisfied therewith, petitioner appealed to the public respondent
National Labor Relations Commission (NLRC), wherein in due course a
decision was rendered by the Fifth Division thereof on July 20, 1989
dismissing the appeal for lack of merit and affirming the appealed
decision. A motion for reconsideration thereof was denied in a resolution
of the NLRC dated June 29, 1990.
Issue: Whether or not a househelper in the staff houses of an industrial
company a domestic helper or a regular employee of the said firm.
Held: The household helper should be treated as a regular employee.
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the
terms "househelper" or "domestic servant" are defined as follows:
The term "househelper" as used herein is synonymous to the term
"domestic servant" and shall refer to any person, whether male or
female, who renders services in and about the employer's home and
which services are usually necessary or desirable for the
maintenance and enjoyment thereof, and ministers exclusively to
the personal comfort and enjoyment of the employer's family.
The foregoing definition clearly contemplates such househelper or
domestic servant who is employed in the employer's home to minister
exclusively to the personal comfort and enjoyment of the employer's
family. Such definition covers family drivers, domestic servants, laundry
women, yayas, gardeners, houseboys and other similar househelps.
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substitutions and additions, their salaries having been raised during the
month of February to P4 per day for the day shift and P6.25 per day for
the nightshift. On March 28, 1947, Dominador Jimenez, a member of the
Manila Terminal Relief and Mutual Aid Association, sent a letter to the
Department of Labor, requesting that the matter of overtime pay be
investigated, but nothing was done by the Department. On April 29, 1947,
Victorino Magno Cruz and five other employees, also member of the
Manila Transit Mutual Aid Association, filed a 5-point demand with the
Department of Labor, including overtime pay, but the Department again
filed to do anything about the matter. On May 27, 1947, the petitioner
instituted the system of strict eight-hour shifts. On June 19, 1947, the
Manila Port Terminal Police Association, not registered in accordance with
the provisions of Commonwealth Act No. 213, filed a petition with the
Court of Industrial Relations. On July 16, 1947, the Manila Terminal Relief
and Mutual Aid Association was organized for the first time, having been
granted certificate No. 375 by the Department of Labor. On July 28, 1947,
Manila Terminal Relief and Mutual Aid Association filed an amended
petition with the Court of Industrial Relations praying, among others, that
the petitioner be ordered to pay its watchmen or police force overtime pay
from the commencement of their employment. On May 9, 1949, by virtue
of Customs Administrative Order No. 81 and Executive Order No. 228 of
the President of the Philippines, the entire police force of the petitioner
was consolidated with the Manila Harvor Police of the Customs Patrol
Service, a Government agency under the exclusive control of the
Commissioner of Customs and the Secretary of Finance The Manila
Terminal Relief and Mutual Aid Association will hereafter be referred to as
the Association.
The Court of Industrial Relations rendered a decision dismissing other
demands of the Association for lack of jurisdiction but ordered the
petitioner to pay to its police force. The petitioner filed a motion for
reconsideration but was dismissed. Hence, the present petition.
Issue: Whether or not the agreement under which its police force were
paid certain specific wages for twelve-hour shifts, included overtime
compensation.
Held: Sections 3 and 5 of Commonwealth Act 444 expressly provides for
the payment of extra compensation in cases where overtime services are
required, with the result that the employees or laborers are entitled to
collect such extra compensation for past overtime work. To hold otherwise
would be to allow an employer to violate the law by simply, as in this
case, failing to provide for and pay overtime compensation.
The point is stressed that the payment of the claim of the Association for
overtime pay covering a period of almost two years may lead to the
financial ruin of the petitioner, to the detriment of its employees
themselves. It is significant, however, that not all the petitioner's
watchmen would receive back overtime pay for the whole period specified
203 | L a b o r S t a n d a r d s - C a s e D i g e s t s
in the appealed decision, since the record shows that the great majority of
the watchmen were admitted in 1946 and 1947, and even 1948 and 1949.
At any rate, we are constrained to sustain the claim of the Association as
a matter of simple justice, consistent with the spirit and purpose of the
Eight-Hour Labor Law. The petitioner, in the first place, was required to
comply with the law and should therefore be made liable for the
consequences of its violation.
It is high time that all employers were warned that the public is interested
in the strict enforcement of the Eight-Hour Labor Law. This was designed
not only to safeguard the health and welfare of the laborer or employee,
but in a way to minimize unemployment by forcing employers, in cases
where more than 8-hour operation is necessary, to utilize different shifts of
laborers or employees working only for eight hours each.
Managerial Employees Labor Code Article 82; Book III, Rule I,
Section 2(b,c)
Asia Pacific Christerning, Inc. vs. Farolan
G.R. No.151370
ASIA PACIFIC CHARTERING (PHILS.) INC. vs.
MARIA LINDA R. FAROLAN
December 4, 2002
Facts: Petitioner Asia Pacific Chartering (Phils.) Inc. is tasked with the
selling of passenger and cargo spaces for Scandinavian Airlines System.
Petitioner Asia, through its Vice President Catalino Bondoc, offered
Respondent Maria Linda R. Farolan the sales manager position to which
Farolan accepted. Upon Vice President Bondocs request, Farolan
submitted a detailed report attributing the drop of sales revenue to
market forces beyond her control. Consequently, Asia directed Roberto
Zozobrado to implement solutions. Zozobrado informally took over
Farolans marketing and sales responsibilities but she continued to receive
her salary. Asia claims that the increase in sales revenue was due to
Zozobrados management. Asia then sent a letter of termination to
Farolan on the ground of loss of confidence, forcing Farolan to file a
complaint for illegal dismissal. The Labor Arbiter found that the dismissal
was illegal for lack of just cause, however, such decision was reversed by
the National Labor Relations Commission stating that the termination of
employment due to loss of confidence is within management prerogative.
On appeal, the Court of Appeals upheld the labor arbiters decision.
Hence, the filing of this petition.
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Field Personnel Labor Code Article 82; Book III, Rule I, Section
2(l)
Merdicar Fishhing Corp. vs. NLRC
G.R. No. 112574
MERCIDAR FISHING CORPORATION represented by its President
DOMINGO B. NAVAL vs.
NATIONAL LABOR RELATIONS COMMISSION and FERMIN AGAO, JR.
October 8, 1998
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Facts: Private respondent alleged that he had been sick and thus allowed
to go on leave without pay for one month from April 28, 1990 but that
when he reported to work at the end of such period with a health
clearance, he was told to come back another time as he could not be
reinstated immediately. Thereafter, petitioner refused to give him
work. For this reason, private respondent asked for a certificate of
employment from petitioner on September 6, 1990. However, when he
came back for the certificate on September 10, petitioner refused to issue
the certificate unless he submitted his resignation. Since private
respondent refused to submit such letter unless he was given separation
pay, petitioner prevented him from entering the premises.
Petitioner, on the other hand, alleged that it was private respondent who
actually abandoned his work. It claimed that the latter failed to report for
work after his leave had expired and was, in fact, absent without leave for
three months until August 28, 1998. Petitioner further claims that,
nonetheless, it assigned private respondent to another vessel, but the
latter was left behind on September 1, 1990. Thereafter, private
respondent asked for a certificate of employment on September 6 on the
pretext that he was applying to another fishing company. On September
10, 1990, he refused to get the certificate and resign unless he was given
separation pay.
On February 18, 1992, Labor Arbiter Arthur L. Amansec rendered a
decision in favor of the private respondent. Petitioner appealed to the
NLRC which, on August 30, 1993, dismissed the appeal for lack of
merit. The NLRC dismissed petitioners claim that it cannot be held liable
for service incentive leave pay by fishermen in its employ as the latter
supposedly are field personnel and thus not entitled to such pay under the
Labor Code. The NLRC likewise denied petitioners motion for
reconsideration of its decision in its order dated October 25, 1993.
Hence, this petition.
Issue: Whether or not the fishing crew members, like Fermin Agao, Jr.,
cannot be classified as field personnel under Article 82 of the Labor Code.
Held: As provided by Art. 82 of the Labor Code, Field personnel shall refer
to non-agricultural employees who regularly perform their duties away
from the principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with
reasonable certainty.
Petitioner argues essentially that since the work of private respondent is
performed away from its principal place of business, it has no way of
verifying his actual hours of work on the vessel. It contends that private
respondent and other fishermen in its employ should be classified as field
personnel who have no statutory right to service incentive leave pay.
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The law requires that the actual hours of work in the field be reasonably
ascertained. The company has no way of determining whether or not
these sales personnel, even if they report to the office before 8:00 a.m.
prior to field work and come back at 4:30 p.m., really spend the hours in
between in actual field work.
In contrast, in the case at bar, during the entire course of their fishing
voyage, fishermen employed by petitioner have no choice but to remain
on board its vessel. Although they perform non-agricultural work away
from petitioners business offices, the fact remains that throughout the
duration of their work they are under the effective control and supervision
of petitioner through the vessels patron or master as the NLRC correctly
held.
Auto Bus Transport Systems, Inc. vs. Bautista
G.R. No. 156367
AUTO BUS TRANSPORT SYSTEMS, INC. vs.
ANTONIO BAUTISTA
May 16, 2005
and certified LCP as the sole and exclusive bargaining agent among the
rank-and-file employees of Empire Food Products for purposes of collective
bargaining with respect to wages, hours of work and other terms and
conditions of employment.
On January 23, 1991, petitioners filed a complaint. After the submission by
the parties of their respective position papers and presentation of
testimonial evidence, Labor Arbiter Ariel C. Santos absolved private
respondents of the charges of unfair labor practice, union busting,
violation of the memorandum of agreement, underpayment of wages and
denied petitioners prayer for actual, moral and exemplary damages. Labor
Arbiter Santos, however, directed the reinstatement of the individual
complainants.
On appeal, the National Labor Relations Commission vacated the Decision
dated April 14, 1972 [sic] and remanded the case to the Labor Arbiter for
further proceedings. On appeal, the NLRC, in its Resolution dated 29
March 1995, affirmed in toto the decision of Labor Arbiter Santos. Their
motion for reconsideration having been denied by the NLRC in its
Resolution of 31 October 1995, petitioners filed the instant special civil
action.
Issue: Whether or not piece rate workers are regular employees which
are entitled to benefits.
Held: No. Three (3) factors lead the Court to conclude that petitioners,
although piece-rate workers, were regular employees of private
respondents. First, as to the nature of petitioners tasks, their job of
repacking snack food was necessary or desirable in the usual business of
private respondents, who were engaged in the manufacture and selling of
such food products; second, petitioners worked for private respondents
throughout the year, their employment not having been dependent on a
specific project or season; and third, the length of time that petitioners
worked for private respondents. Thus, while petitioners mode of
compensation was on a per piece basis, the status and nature of their
employment was that of regular employees.
The Rules Implementing the Labor Code exclude certain employees from
receiving benefits such as nighttime pay, holiday pay, service incentive
leave and 13th month pay, inter alia, field personnel and other employees
whose time and performance is unsupervised by the employer, including
those who are engaged on task or contract basis, purely commission
basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof. Plainly,
petitioners as piece-rate workers do not fall within this group. As
mentioned earlier, not only did petitioners labor under the control of
private respondents as their employer, likewise did petitioners toil
throughout the year with the fulfillment of their quota as supposed basis
for compensation.
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The Revised Guidelines as well as the Rules and Regulations identify those
workers who fall under the piece-rate category as those who are paid a
standard amount for every piece or unit of work produced that is more or
less regularly replicated, without regard to the time spent in producing the
same.
Regular Meal Period (One Hour) Labor Code Article 85; Book III,
Rule I, Section 7, Paragraph 1
Philippine Airlines, Inc. vs. NLRC
G.R. No. 132805
PHILIPPINE AIRLINES, INC. vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER
ROMULUS PROTACIO and DR. HERMINIO A. FABROS
February 2, 1999
Facts: Private respondent was employed as flight surgeon at petitioner
company. He was assigned at the PAL Medical Clinic at Nichols and was on
duty from 4:00 in the afternoon until 12:00 midnight.
On February 17, 1994, at around 7:00 in the evening, private respondent
left the clinic to have his dinner at his residence, which was about fiveminute drive away. A few minutes later, the clinic received an emergency
call from the PAL Cargo Services. One of its employees, Mr. Manuel Acosta,
had suffered a heart attack. The nurse on duty, Mr. Merlino Eusebio, called
private respondent at home to inform him of the emergency. The patient
arrived at the clinic at 7:50 in the evening and Mr. Eusebio immediately
rushed him to the hospital. When private respondent reached the clinic at
around 7:51 in the evening, Mr. Eusebio had already left with the
patient. Mr. Acosta died the following day. Upon learning about the
incident, PAL Medical Director Dr. Godofredo B. Banzon ordered the Chief
Flight Surgeon to conduct an investigation. The Chief Flight Surgeon, in
turn, required private respondent to explain why no disciplinary sanction
should be taken against him.
In his explanation, private respondent asserted that he was entitled to a
thirty-minute meal break; that he immediately left his residence upon
being informed by Mr. Eusebio about the emergency and he arrived at the
clinic a few minutes later; that Mr. Eusebio panicked and brought the
patient to the hospital without waiting for him. Finding private
respondents explanation unacceptable, the management charged private
respondent with abandonment of post while on duty. He was given ten
days to submit a written answer to the administrative charge. Private
respondent filed a complaint for illegal suspension against petitioner.
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cannot be considered as absences within the meaning of the law for which
deductions may be made from monthly allowances. The "No work, no pay"
principle does not apply in the instant case. The petitioners members
received their regular salaries during this period. It is clear from the
aforequoted provision of law that it contemplates a "no work" situation
where the employees voluntarily absent themselves. Petitioners, in the
case at bar, certainly do not, ad voluntatem, absent themselves during
semestral breaks. Rather, they are constrained to take mandatory leave
from work. For this they cannot be faulted nor can they be begrudged that
which is due them under the law. To a certain extent, the private
respondent can specify dates when no classes would be held. Surely, it
was not the intention of the framers of the law to allow employers to
withhold employee benefits by the simple expedient of unilaterally
imposing "no work" days and consequently avoiding compliance with the
mandate
of
the
law
for
those
days.
Respondents contention that "the fact of receiving a salary alone should
not be the basis of receiving ECOLA", is, likewise, without merit. Particular
attention is brought to the Implementing Rules and Regulations of Wage
Order
No.
1
to
wit.
SECTION
5.
Allowance
for
Unworked
Days.
"a) All covered employees whether paid on a monthly or daily basis shall
be entitled to their daily living allowance when they are paid their basic
wage."
This provision, at once refutes the above contention. It is evident that the
intention of the law is to grant ECOLA upon the payment of basic wages.
Hence, we have the principle of "No pay, no ECOLA" the converse of which
finds application in the case at bar. Petitioners cannot be considered to be
on leave without pay so as not to be entitled to ECOLA, for, as earlier
stated, the petitioners were paid their wages in full for the months of
November and December of 1981, notwithstanding the intervening
semestral break. This, in itself, is a tacit recognition of the rather unusual
state of affairs in which teachers find themselves. Although said to be on
forced leave, professors and teachers are, nevertheless, burdened with
the task of working during a period of time supposedly available for rest
and private matters. There are papers to correct, students to evaluate,
deadlines to meet, and periods within which to submit grading reports.
Although they may be considered by the respondent to be on leave, the
semestral break could not be used effectively for the teachers own
purposes for the nature of a teachers job imposes upon him further duties
which must be done during the said period of time. Learning is a never
ending process. Teachers and professors must keep abreast of
developments all the time. Teachers cannot also wait for the opening of
the next semester to begin their work. Arduous preparation is necessary
for the delicate task of educating our children. Teaching involves not only
an application of skill and an imparting of knowledge, but a responsibility
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which entails self-dedication and sacrifice. The task of teaching ends not
with the perceptible efforts of the petitioners members but goes beyond
the classroom: a continuum where only the visible labor is relieved by
academic intermissions. It would be most unfair for the private respondent
to consider these teachers as employees on leave without pay to suit its
purposes and, yet, in the meantime, continue availing of their services as
they prepare for the next semester or complete all of the last semesters
requirements. Furthermore, we may also by analogy apply the principle
enunciated in the Omnibus Rules Implementing the Labor Code to wit:
1aw
library
Sec. 4. Principles in Determining Hours Worked. The following general
principles shall govern in determining whether the time spent by an
employee is considered hours worked for purposes of this Rule:
"(d) The time during which an employee is inactive by reason of
interruptions in his work beyond his control shall be considered time either
if the imminence of the resumption of work requires the employees
presence at the place of work or if the interval is too brief to be utilized
effectively and gainfully in the employees own interest."
The petitioners members in the case at bar, are exactly in such a
situation. The semestral break scheduled is an interruption beyond
petitioners control and it cannot be used "effectively nor gainfully in the
employees interest. Thus, the semestral break may also be considered
as "hours worked." For this, the teachers are paid regular salaries and, for
this, they should be entitled to ECOLA. Not only do the teachers continue
to work during this short recess but much less do they cease to live for
which the cost of living allowance is intended. The legal principles of "No
work, no pay; No pay, no ECOLA" must necessarily give way to the
purpose of the law to augment the income of employees to enable them
to cope with the harsh living conditions brought about by inflation; and to
protect employees and their wages against the ravages brought by these
conditions. Significantly, it is the commitment of the State to protect labor
and to provide means by which the difficulties faced by the working force
may best be alleviated. To submit to the respondents interpretation of the
no work, no pay policy is to defeat this noble purpose. The Constitution
and the law mandate otherwise.
Travel Time
Rada vs. NLRC
G.R. No. 96078
HILARIO RADA vs.
NATIONAL LABOR RELATIONS COMMISSION AND PHILNOR
CONSULTANTS AND PLANNERS, INC.
January 9, 1992
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The Social Security Commission finds that the late Ignacio Tana was
employed by respondent Conchita Ayalde from January 1961 to March
1979 with a salary based on the Minimum Wage prevailing during his
employment. Not having reported the petitioners husband for coverage
with the SSS, respondent Conchita Ayalde is, therefore, liable for the
218 | L a b o r S t a n d a r d s - C a s e D i g e s t s
Held: The mandatory coverage under the SSS Law (Republic Act No.
1161, as amended by PD 1202 and PD 1636) is premised on the existence
of an employer-employee relationship, and Section 8(d) defines an
"employee" as "any person who performs services for an employer in
which either or both mental and physical efforts are used and who
receives compensation for such services where there is an employeremployee relationship." Claimant Margarita Tana and her corroborating
witnesses testified that her husband was paid daily wages "per quincena"
as well as on "pakyaw" basis. Ayalde, on the other hand, insists that Tana
was paid solely on "pakyaw" basis. To support her claim, she presented
payrolls covering the period January of 1974 to January of 1976; and
November of 1978 to May of 1979. A careful perusal of the records readily
show that the exhibits offered are not complete, and are but a mere
sampling of payrolls. While the names of the supposed laborers appear
therein, their signatures are nowhere to be found. In light of her
incomplete documentary evidence, Ayaldes denial that Tana was her
employee in Hda. B-70 or Hda. B-15-M must fail. The witnesses did not
waver in their assertion that while Tana was hired by Ayalde as an
"arador" on "pakyaw" basis, he was also paid a daily wage which Ayaldes
overseer disbursed every fifteen (15) days. It is also undisputed that they
were made to acknowledge receipt of their wages by signing on sheets of
ruled paper, which are different from those presented by Ayalde as
documentary evidence. In fine, we find that the testimonies of Margarita
219 | L a b o r S t a n d a r d s - C a s e D i g e s t s
Tana, Agaton Libawas and Aurelio Tana prevail over the incomplete and
inconsistent documentary evidence of Ayalde. The testimonial evidence of
the claimant and her witnesses constitute positive and credible evidence
of the existence of an employer-employee relationship between Tana and
Ayalde. As the employer, the latter is duty-bound to keep faithful and
complete records of her business affairs, not the least of which would be
the salaries of the workers. And yet, the documents presented have been
selective, few and incomplete in substance and content. Consequently,
Ayalde has failed to convince us that, indeed, Tana was not her employee.
compensation) pay for work rendered beyond 8 hours, and such cases do
not include the work at night.
NLU argues decision of the CIR is part of its broad and effective powers as
granted by Commonwealth Act No. 103 the charter of the Industrial
Relations Court, and the Act No. 444 has no Application to this case
because it is referring only to particular and maximum working day
permitted I industrial establishments the 8-hour day.
Issue: Whether or not those who work at night are entitled to 50%
additional compensation.
Held: Yes. The Court discussed a lot of issues about the pernicious effect
of working at night justifying the award of additional 50% to the
compensation of affected workers, affirming the decision of CIR. The case
against nightwork, then, may be said to rest upon several grounds. In the
first place, there are the remotely injurious effects of permanent
nightwork manifested in the later years of the workers life. Of more
immediate importance to the average worker is the disarrangement of his
social life, including the recreational activities of his leisure hours and the
ordinary associations of normal family relations. From and economic point
of view, nightwork is to be discouraged because of its adverse effect upon
efficiency and output. A moral argument against nightwork in the case of
women is that the night shift forces the workers to go to and from the
factory in darkness. Recent experiences of industrial nations have added
much to the evidence against the continuation of nightwork, except in
extraordinary circumstances and avoidable emergencies. The immediate
prohibition of nightwork for all laborers is hardly practicable; its
discontinuance in the case of women employees is unquestionably
desirable. The night was made for rest and sleep and not for work is a
common saying among wage-earning people, and many of them dream of
an industrial order in which there will be no night shift.
Holidays Coverage/Exclusion Labor Code Article 94 (a)
Mantrade/FMMC Division Employees and Workers Union vs. Bacungan
G.R. No. L-48437
MANTRADE/FMMC DIVISION EMPLOYEES AND WORKERS UNION,
REPRESENTED BY PHILIPPINE SOCIAL SECURITY LABOR UNION
TUCP vs.
ARBITRATOR
FROILAN
M.
BACUNGAN
AND
MANTRADE
DEVELOPMENT CORPORATION
September 30, 1986
Facts: This is a petition for Certiorari and Mandamus filed by petitioner
against arbitrator Froilan M. Bacungan and Mantrade Development
Corporation arising from the decision of respondent arbitrator, ruling that
Mantrade Development Corporation is not under legal obligation to pay
221 | L a b o r S t a n d a r d s - C a s e D i g e s t s
holiday pay (as provided for in Article 94 of the Labor Code in the third
official Department of Labor edition) to its monthly paid employees who
are uniformly paid by the month, irrespective of the number of working
days therein, with a salary of not less than the statutory or established
minimum wage, and this rule is applicable not only as of March 2, 1976
but as of November 1, 1974. Petitioner questions the validity of the
pertinent section of the Rules and Regulations Implementing the Labor
Code as amended on which respondent arbitrator based his decision.
In denying petitioners claim for holiday pay, respondent arbitrator stated
that although monthly salaried employees are not among those excluded
from receiving such additional pay under Article 94 of the Labor Code of
the Philippines, they appear to be excluded under Sec. 2, Rule IV, Book III
of the Rules and Regulations which states Employees who are uniformly
paid by the month, irrespective of the number of working days therein,
with a salary of not less than the statutory or established minimum wage
shall be presumed to be paid for all days in the month whether worked or
not. Respondent arbitrator further opined that respondent corporation
does not have any legal obligation to grant its monthly salaried
employees holiday pay, unless it is argued that the pertinent section of
the Rules and Regulations implementing Section 94 of the Labor Code is
not in conformity with the law, and thus, without force and effect.
Issue: Whether or not Mantrade Development Corporation is not under
legal obligation to pay holiday pay to its monthly paid employees.
Held: No. Section 2, Rule IV, Book III of the implementing rules and Policy
Instruction No. 9, issued by the then Secretary of Labor are null and void
since in the guise of clarifying the Labor Codes provisions on holiday pay,
they in effect amended them by enlarging the scope of their exclusion.
The questioned Sec. 2, Rule IV, Book III of the Integrated Rules and the
Secretarys Policy Instruction No. 9 add another excluded group, namely
employees who are uniformly paid by the month. While the additional
exclusion is only in the form of a presumption that all monthly paid
employees have already been paid holiday pay, it constitutes a taking
away or a deprivation which must be in the law if it is to be valid. An
administrative interpretation which diminishes the benefits of labor more
than what the statute delimits or withholds is obviously ultra vires.
Therefore, respondent corporation is ordered to grant holiday pay to its
monthly salaried employees.
Divisor as Factor
Trans-Asia Philippines Employees Association vs. NLRC
G.R. No. 118289
TRANS-ASIA PHILIPPINES EMPLOYEES ASSOCIATION (TAPEA) AND
ARNEL GALVEZ vs.
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NATIONAL
LABOR
RELATIONS
COMMISSION,
(PHILIPPINES) AND ERNESTO S. DE CASTRO
December 13, 1999
TRANS-ASIA
In their Position Paper, petitioners contended that their claim for holiday
pay in arrears is based on the non-inclusion of the same in their monthly
pay. With regard to the pre-condition for the payment of holiday pay
stated in the Employees' Manual and the absence of a stipulation on
holiday pay in the employees' appointment papers, Trans-Asia asserted
that the above circumstances are not indicative of its non-payment of
holiday pay since it has always honored the labor law provisions on
holiday pay by incorporating the same in the payment of the monthly
salaries of its employees. In support of this claim, Trans-Asia pointed out
that it has long been the standing practice of the company to use the
divisor of "286" days in computing for its employees' overtime pay and
daily rate deductions for absences.
Trans-Asia further clarified that the "286" days divisor already takes into
account the ten (10) regular holidays in a year since it only subtracts from
the 365 calendar days the unworked and unpaid 52 Sundays and 26
Saturdays (employees are required to work half-day during Saturdays).
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The Labor Arbiter held a decision against the petitioners, finding that in
the absence of such agreement, the Supreme Court in said Chartered
Bank Case took into consideration existing practices in the bank in
resolving the issue, such as employment by the bank of a divisor of 251
days which is the result of subtracting all Saturdays, Sundays and the ten
(10) legal holidays from the total number of calendar days in a year.
Further, the Court took note of the fact that the bank used conflicting or
different divisors in computing salary-related benefits as well as the
employees' absence from work. In the case at bar, not only did the CBA
between the complainants and respondents herein provides (sic) that the
ten (10) legal holidays are recognized by the Company as full holiday with
pay. What is more, there can be no doubt that since 1977 up to the
execution of the CBA, the Trans-Asia, unlike that obtaining in the
Chartered Bank Case, never used conflicting or different divisors but
consistently employed the divisor of 286 days, which as earlier pointed
out, was arrived at by subtracting only the unworked 52 Sundays and the
26 half-day-worked Saturdays from the total number of days in a year. The
consistency in the established practice of the Trans-Asia, which
incidentally is not disputed by complainants, did not give rise to any doubt
which could have been resolved in favor of complainants. The NLRC
dismissed the petitioners appeal as well as the motion for
reconsideration, affirming the decision of the Labor Arbiter.
Issue: Whether or not the NLRC erred in ruling for Trans-Asia in using the
286 days divisor.
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SMC appealed to the DOLE main office in Manila but its appeal was
dismissed for having been filed late. The dismissal of the appeal for late
filing was later on reconsidered in the order of 17 July 1998 after it was
found that the appeal was filed within the reglementary period. However,
the appeal was still dismissed for lack of merit and the order of Director
Macaraya was affirmed.
SMC went to this Court for relief via a petition for certiorari, which this
Court referred to the Court of Appeals. The CA modified the payment of
Muslim holiday pay from 200% to 150% of the employers salary. Hence,
this petition.
Held: No. Art. 170. Provinces and cities where officially observed. - (1)
Muslim holidays shall be officially observed in the Provinces of Basilan,
Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan,
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Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday
but such employee shall be paid a compensation equivalent to twice
his regular rate; x x x.
At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that
"x x x nothing herein shall be construed to operate to the prejudice of a
non-Muslim." In addition, the 1999 Handbook on Workers Statutory
Benefits, approved by then DOLE Secretary Bienvenido E. Laguesma on 14
December 1999 categorically stated:
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The Labor Arbiter found the Haberdashery to have violated the decrees on
the cost of living allowance, service incentive leave pay and the 13th
Month Pay. In view thereof, the economic analyst of the Commission is
directed to compute the monetary awards due each complainant based on
the available records of the respondents retroactive as of three years prior
to the filing of the instant case. The NLRC affirmed the Labor Arbiters
decision.
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Issue: Whether or not the Client should pay back wages, separation pay
and service incentive leave pay.
Held: For back wages and separation pay, no. For service incentive leave
pay, yes. The Client was not responsible for the illegal dismissal of the
complainants and, thus, not liable for the payment of back wages and
separation pay. However, the Decision did not completely exonerate the
Client which, as an indirect employer, is solidarily liable with Petitioner
Agency for the complainants' unpaid service incentive leave, pursuant to
Articles 106, 107 and 109 of the Code. As clarified by the Court in
Rosewood: Under these cited provisions of the Labor Code should the
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contractor fail to pay the wages of its employees in accordance with law,
the indirect employer (the petitioner in this case), is jointly and severally
liable with the contractor, but such responsibility should be understood to
be limited to the extent of the work performed under the contract, in the
same manner and extent that he is liable to the employees directly
employed by him. This liability of petitioner covers the payment of the
workers' performance of any work, task, job or project. So long as the
work, task, job or project has been performed for petitioner's benefit or on
its behalf, the liability accrues for such period even if, later on, the
employees are eventually transferred or reassigned elsewhere.
Auto Bus Transport Systems, Inc. vs. Bautista
G.R. No. 156367
AUTO BUS TRANSPORT SYSTEMS, INC. vs.
ANTONIO BAUTISTA
May 16, 2005
Facts: Antonio Bautista was employed by Auto Bus Transport Systems,
Inc. in May 1995. He was assigned to the Isabela-Manila route and he was
paid by commission (7% of gross income per travel for twice a month). In
January 2000, while he was driving his bus, he bumped another bus
owned by Auto Bus. He claimed he accidentally bumped the bus as he
was so tired and that he has not slept for more than 24 hours because
Auto Bus required him to return to Isabela immediately after arriving at
Manila. Damages were computed and 30% or P75,551.50 of it was being
charged
to
Bautista.
Bautista
refused
payment.
Auto Bus terminated Bautista after due hearing as part of Auto Bus
management prerogative. Bautista sued Auto Bus for illegal dismissal. The
Labor Arbiter Monroe Tabingan dismissed Bautistas petition but ruled that
Bautista is entitled to P78,1117.87 13th month pay payments and
P13,788.05 for his unpaid service incentive leave pay. The case was
appealed before the National Labor Relations Commission. NLRC modified
the LAs ruling. It deleted the award for 13th Month pay. The Court of
Appeals affirmed the NLRC. Auto Bus averred that Bautista is a
commissioned employee and if that is not reason enough that Bautista is
also a field personnel, hence, he is not entitled to a service incentive
leave. They invoke Booki III, Rule V of the Implementing Rules which
provides for the coverage of service incentive leave pay and which
excludes Field personnel and other employees whose performance is
unsupervised by the employer including those who are engaged on task or
contract basis, purely commission basis, or those who are paid in a fixed
amount for performing work irrespective of the time consumed in the
performance
thereof.
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Applying Article 291 of the Labor Code in light of this peculiarity of the
service incentive leave, we can conclude that the three (3)-year
prescriptive period commences, not at the end of the year when the
employee becomes entitled to the commutation of his service incentive
leave, but from the time when the employer refuses to pay its monetary
equivalent after demand of commutation or upon termination of the
employees services, as the case may be.
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Coverage Labor Code Article 97 (b,c,e), 98; Book III, Rule VII,
Section 3
Philippine Fisheries Development Authority vs NLRC
G.R. No. 94825
PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY vs.
NATIONAL LABOR RELATIONS COMMISSION, ODIN SECURITY
AGENCY, AS REPRESENTATIVE OF ITS SECURITY GUARDS
September 04, 1992
Facts: The petitioner is a government-owned or controlled corporation
created by P.D. No. 977. On November 11, 1985, it entered into a contract
with the Odin Security Agency for security services of its Iloilo Fishing Port
Complex in Iloilo City. The contract provides that the schedule of
compensation includes among others, the minimum wage (Wage Order
No.5), rest day pay, night differential, incentive leave pay, 13 th month pay,
emergency cost of living allowance, 4% contractors tax, operational
expenses and overhead. On October 24, 1987, and during the effectivity
of the said Security Agreement, the private respondent requested the
petitioner to adjust the contract rate in view of the implementation of
Wage Order No. 6 which took effect on November 1, 1984. Requests for
adjustment of the contract price were reiterated on January 14, 1988 and
February 19, 1988 but were ignored by the petitioner.
Thus on June 7, 1988, the private respondent filed with the Office of the
Sub-Regional Arbitrator in Region VI, Iloilo City a complaint for unpaid
amount of re-adjustment rate under Wage Order No. 6 together with wage
salary differentials arising from the integration of the cost of living
allowance under Wage Order No. 1, 2, 3 and 5 pursuant to Executive
Order No. 178 plus the amount of P25,000.00 as attorneys fees and cost
of litigation.
The Labor Arbiter dismissed the complaint stating that the petitioners
being a government-owned or controlled corporation would place it under
the scope and jurisdiction of the Civil Service Commission and not within
the ambit of the NLRC. Upon appeal, the NLRC set aside the order and
granted reliefs to private respondent. A motion for reconsideration was
filed but was denied.
Issue: Whether or not the NLRC erred in setting aside the decision of the
Labor Arbiter which states that the case is not within NLRCs jurisdiction.
Held: No. The petitioner is a government-owned or controlled corporation
with a special charter. This places it under the scope of the civil service.
However, the guards are not employees of the petitioner. The contract of
services explicitly states that the security guards are not considered
employees of the petitioner. There being no employer-employee
relationship between the petitioner and the security guards, the
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The Labor Arbiter found the respondents guilty of illegal dismissal because
the petitioner was a regular employee of the respondent company as he
was performing a service that was necessary and desirable to the latters
business. Moreover, it was noted that the petitioner had discharged his
duties as truck driver for the respondent company for a continuous and
uninterrupted period of more than ten years. The respondents were
ordered to pay backwages, separation pay, 13 th month pay and service
incentive leave pay. The respondents appealed to NLRC but it was
dismissed as the Commission affirmed the decision of the Labor Arbiter.
However, upon motion for reconsideration, the NLRC reversed its earlier
decision holding that no employer-employee relationship existed between
the respondent and petitioner. Upon appeal, the CA upheld the Labor
Arbiters decision. But on motion for reconsideration by the respondents,
the CA made a compelete turn-around, upholding the contract of service
between the petitioner and the respondent company. The fact that the
petitioner had been with the respondent company for more than ten years
was, according to the CA, of no moment because his status was
determined not by the length of service but by the contract of service.
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Labor Arbiter dismissed the complaints. NLRC reversed and set aside the
Labor Arbiters decision and ruling that private respondents are entitled to
unpaid wages.
Held: Yes. We hold that public respondent erred in merely relying on the
computations of compensable services submitted by private respondents.
There must be competent proof such as time cards or office records to
show that they actually rendered compensable service during the stated
period to entitle them to wages. It has been established that the
petitioner's business office was transferred to Kalibo and all its
equipments, records and facilities were transferred thereat and that it
conducted its official business in Kalibo during the period in question. It
was incumbent upon private respondents to prove that they indeed
rendered services for petitioner, which they failed to do.
The age-old rule governing the relation between labor and capital, or
management and employee of a "fair day's wage for a fair day's labor"
remains as the basic factor in determining employees' wages. If there is
no work performed by the employee there can be no wage or pay unless,
of course, the laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed, or otherwise illegally prevented from
working, a situation which we find is not present in the instant case. It
would neither be fair nor just to allow private respondents to recover
something they have not earned and could not have earned because they
did not render services at the Kalibo office during the stated period.
Sugue vs. Triumph International
G.R. No. 164804
VIRGINIA A. SUGUE AND THE HEIRS OF RENATO S. VALDERRAMA
vs.
TRIUMPH INTERNATIONAL (PHILS.), INC.
January 30, 2009
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Aggrieved, Triumph filed an appeal with the NLRC, which granted the
appeal and reversed the ruling of Labor Arbiter Nambi. Not satisfied with
the NLRC decision, Sugue and Valderrama elevated the matter to the CA
by way of a petition for certiorari. While the matter was pending with the
CA, Valderrama passed away and notice of his death was filed by his
counsel. The CA set aside the decision of the NLRC and reinstated the
Labor Arbiters decision. Triumphs subsequent motion for reconsideration
as well as the motion for partial reconsideration filed by Sugue and the
heirs of Valderrama were both denied by the appellate court. Hence, the
parties filed the present consolidated petitions.
Issue: Whether or not Triumph correctly deducted their half-day absence
attending the NLRC hearing on June 19, 2000 from their vacation leave
credit.
between foreign hires and local hires, the former enjoying only a limited
tenure, having no amenities of their own in the Philippines and have to be
given a good compensation package in order to attract them to join the
teaching faculty of the School. The union appealed to the Supreme Court.
The petitioner called the hiring system discriminatory and racist. The
school alleged that some local hires were in fact of foreign origin. They
were paid local salaries.
Issue: Whether or not the Schools system of compensation is violative of
the principle of equal pay for equal work.
Held: Yes. The Constitution also directs the State to promote "equality of
employment opportunities for all." Similarly, the Labor Code provides that
the State shall "ensure equal work opportunities regardless of sex, race or
creed. Article 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage
membership in any labor organization. In this jurisdiction, there is the
term equal pay for equal work, pertaining to persons being paid with
equal salaries and have similar skills and similar conditions. There was no
evidence here that foreign-hires perform 25% more efficiently or
effectively than the local-hires. For the same reason, the "dislocation
factor" and the foreign-hires' limited tenure also cannot serve as valid
bases for the distinction in salary rates. The dislocation factor and limited
tenure affecting foreign-hires are adequately compensated by certain
benefits accorded them which are not enjoyed by local-hires, such as
housing, transportation, shipping costs, taxes and home leave travel
allowances.
Persons who work with substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should paid similar salaries. If an
employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This
presumption is borne by logic and human experience. If the employer has
discriminated against an employee, it is for the employer to explain why
the employee is treated unfairly. This rule applies to the School,
notwithstanding its international character.
Form Agreement for Compensation of Services Labor Code
Article 97(f)
Arms Taxi vs. NLRC
G.R. No. 104523
ARMS TAXI AND/OR DOROTHEA TANONGON vs.
NATIONAL LABOR RELATIONS, AND LUDIVICO CULLA
March 08, 1993
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Issue: Whether or not the payment to him of P5,000 a month for his
service was in partial fulfillment of Tanongons promise to pay him a 15%
commission, removing said requirement from coverage of the Statue of
Frauds.
Held: No. Cullas reference to the Statute of Frauds under Article 1403,
paragraph 2 of the Civil Code is misplaced. An agreement for
compensation of service rendered is not one of the contracts mentioned in
1403 which must be in writing to be enforceable by action. The payment
of a P5,000 monthly salary to the petitioner for his services may not be
considered as partial compliance by his employers with the alleged
agreement to pay him a commission or percentage of the daily earnings of
their taxi business because, as correctly pointed out by the Solicitor
General, a salary is different from a commission. While a salary is a fixed
compensation for regular work or for continuous service rendered over a
period of time, a commission is a percentage or allowance made to a
factor or agent for transacting business for another. Thus, before invoking
the exception to the Statute of Frauds, petitioner should have proven that
he had received a commission, or a part of it, in the past.
Furthermore, as aptly noted by the NLRC, if it were true that there had
been an agreement regarding the payment of a 15% commission to him,
the petitioner would not have waited almost 6 years to claim it.
Considerable delay in asserting ones right is strongly persuasive of the
lack of merit of ones own claim.
Determination of Compliance with Minimum Wage
Iran vs. NLRC
G.R. No. 121927
ANTONIO W. IRAN (doing business under the name and style of
Tones Iran Enterprises) vs.
NATIONAL LABOR RELATIONS COMMISSION (Fourth Division),
GODOFREDO O. PETRALBA, MORENO CADALSO, PEPITO TECSON,
APOLINARIO GOTHONG GEMINA, JESUS BANDILAO, EDWIN
MARTIN, CELSO LABIAGA, DIOSDADO GONZALGO, FERNANDO M.
COLINA
April 22, 1998
Facts: Petitioner Antonio Iran is engaged in softdrinks merchandising and
distribution in Mandaue City, Cebu, employing truck drivers who double as
salesmen, truck helpers, and non-field personnel in pursuit
thereof. Petitioner hired private respondents Godofredo Petralba, Moreno
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Applying Art.,97, par. (f), of the Labor Code which defines if wage," the
Executive Labor Arbiter opined that the subject allowances, being
customarily furnished by respondent PICOP and regularly received by
petitioners, formed part of the latter's wages. Resolving the controversy
from another angle, on the strength of the ruling in Santos v. NLRC and
Soriano v. NLRC that in the computation of separation pay account should
be taken not just of the basic salary but also of the regular allowances
that the employee had been receiving, he concluded that the allowances
should be included in petitioners' base pay. Thus respondent PICOP was
ordered on 28 April 1994 to pay petitioners Four Million Four Hundred
Eighty-One Thousand Pesos (P4,481,000.00) representing separation pay
differentials plus ten per cent (10%) thereof as attorney's fees.
The National Labor Relations did not share the view of the Executive Labor
Arbiter. On 7 October 1994 it set aside the assailed decision by decreeing
that the allowances did not form part of the salary base used in computing
separation pay.
Issue: Whether or not petitioners allowances are included in the
definition of "facilities" in Article 97, par. (f), of the Labor Code.
Held: "Customary" is founded on long-established and constant
practice connoting regularity. The receipt of an allowance on a monthly
basis does not ipso facto characterize it as regular and forming part of
salary because the nature of the grant is a factor worth considering. On
the other hand, the transportation allowance is in the form of advances for
actual transportation expenses subject to liquidation x x x given only to
employees who have personal cars.
The Bislig allowance is given to Division Managers and corporate officers
assigned in Bislig, Surigao del Norte. Once the officer is transferred
outside Bislig, the allowance stops. The Court added that in the availment
of the transportation allowance, respondent PICOP set another
requirement that the personal cars be used by the employees in the
performance of their duties. When the conditions for availment ceased to
exist, the allowance reached the cutoff point. The finding of the NLRC
along the same line likewise merits concurrence, i.e., petitioners'
continuous enjoyment of the disputed allowances was based on
contingencies the occurrence of which wrote finis to such enjoyment.
Although it is quite easy to comprehend "board" and "lodging," it is not so
with "facilities." Thus Sec. 5, Rule VII, Book III, of the Rules Implementing
the Labor Code gives meaning to the term as including articles or services
for the benefit of the employee or his family but excluding tools of the
trade or articles or service primarily for the benefit of the employer or
necessary to the conduct of the employer's business. The Staff /Manager's
allowance may fall under "lodging" but the transportation and Bislig
allowances are not embraced in "facilities" on the main consideration that
they are granted as well as the Staff/Manager's allowance for respondent
248 | L a b o r S t a n d a r d s - C a s e D i g e s t s
petitioner but
allowances."
also
of
her
transportation
and
emergency
living
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leave benefits, etc., which are covered by the Labor Code. Nowhere has it
ever been stated that gratuity pay should be based on the actual number
of days worked over the period of years forming its basis. We see no point
in counting the number of days worked over a ten-year period to
determine the meaning of "two and one- half months' gratuity."
The Civil Code also provides that when months are not designated by
name, a month is understood to be thirty (30) days. The provision applies
under the circumstances of this case.
Effect on Benefits
Davao Fruits Corporation vs. Associated Labor Union
G.R. No. 85073
DAVAO FRUITS CORPORATION vs.
ASSOCIATED LABOR UNIONS (ALU) for in behalf of all the rankand-file workers/employees of DAVAO FRUITS CORPORATION and
NATIONAL LABOR RELATIONS COMMISSION
August 24, 1993
Facts: On December 28, 1982 respondent Associated Labor Unions (ALU),
for and in behalf of all the rank-and-file workers and employees of
petitioner, filed a complaint (NLRC Case No. 1791-MC-XI-82) before the
Ministry of Labor and Employment, Regional Arbitration Branch XI, Davao
City, against petitioner, for "Payment of the Thirteenth-Month Pay
Differentials." Respondent ALU sought to recover from petitioner the
thirteenth month pay differential for 1982 of its rank-and-file employees,
equivalent to their sick, vacation and maternity leaves, premium for work
done on rest days and special holidays, and pay for regular holidays which
petitioner, allegedly in disregard of company practice since 1975,
excluded from the computation of the thirteenth month pay for 1982.
A decision was rendered on March 7, 1984 by Labor Arbiter Pedro C.
Ramos, in favor of respondent ALU. Petitioner appealed the decision of the
Labor Arbiter to the NLRC, which affirmed the said decision accordingly
dismissed the appeal for lack of merit. Hence, the present petition.
Issue: Whether or not in the computation of the thirteenth month pay
given by employers to their employees under P.D. No. 851, payments for
sick, vacation and maternity leaves, premiums for work done on rest days
and special holidays, and pay for regular holidays may be excluded in the
computation and payment thereof, regardless of long-standing company
practice.
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Facts: On October 15, 1990, the Regional Board of the National Capital
Region issued Wage Order No. NCR-01, increasing the minimum wage by
P17.00 daily in the National Capital Region. The Trade Union Congress of
the Philippines (TUCP) moved for reconsideration; so did the Personnel
Management Association of the Philippines (PMAP). 5ECOP opposed.
On October 23, 1990, the Board issued Wage Order No. NCR-01-A
amending Wage Order No. NCR-01; ECOP appealed to the National Wages
and Productivity Commission. On November 6, 1990, the Commission
promulgated an Order, dismissing the appeal for lack of merit. On
November 14, 1990, the Commission denied reconsideration.
Issue: Whether or not Wage Order No. NCR-01-A providing for new wage
rates, as well as authorizing various Regional Tripartite Wages and
Productivity Boards to prescribe minimum wage rates for all workers in the
various regions, and for a National Wages and Productivity Commission to
review, among other functions, wage levels determined by the boards is
valid.
Held: The Supreme Court held that Republic Act No. 6727 was intended to
rationalize wages, first, by providing for full-time boards to police wages
round-the-clock, and second, by giving the boards enough powers to
achieve this objective. The Court is of the opinion that Congress meant
the boards to be creative in resolving the annual question of wages
without labor and management knocking on the legislature's door at every
turn.
The Court's opinion is that if Republic No. 6727 intended the boards alone
to set floor wages, the Act would have no need for a board but an
accountant to keep track of the latest consumer price index, or better,
would have Congress done it as the need arises, as the legislature, prior to
the Act, has done so for years. The fact of the matter is that the Act
sought a "thinking" group of men and women bound by statutory
standards. The Court is not convinced that the Regional Board of the
National Capital Region, in decreeing an across-the-board hike, performed
an unlawful act of legislation. It is true that wage-firing, like rate-fixing,
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rates, (2) a significant change in the salary rate of a lower pay class
without a concomitant increase in the salary rate of a higher one, (3) the
elimination of the distinction between the two levels and (4) the existence
of the distortion in the same region of the country.
In this case, the employees of Bankard have been historically classified
into levels (I-V), and not on the basis of their length of service. New
employees are automatically placed under any of these levels upon their
entry. This is the wage structure formulated by Bankard, a recognized
management prerogative which Bankard Union may not encroach upon by
creating their own independent classification (ie, based on newly hired
and old employees) to use as a basis for demanding an across-the-board
salary increase. According to established jurisprudence, the formulation of
a wage structure through the classification of employees is a matter of
management judgment and discretion. Based on the wage structure, there
is no hierarchy of positions between the newly hired and regular
employees of Bankard since it is a structure which is based on level, not
seniority. The first element of wage distortion is therefore lacking. Second,
the third element of wage distortion i.e. the elimination of the distinction
between the two levels is also missing. Even if there was indeed a
resulting decrease in the wage gap between the salary of the old and new
employees, the gap was held to be insignificant as to result in severe
contraction of the intentional quantitative differences in the salary rates
between the employee group as the classification under the wage
structure is based on rank, and not seniority.
Form of Payment Labor Code Article 102; Civil Code Article 1705;
Book III, Rule VIII, Sections 1,2
Congson vs. NLRC
G.R. No. 114250
DOMINICO C. CONGSON vs.
NATIONAL LABOR RELATIONS COMMISSION, NOE BARGO, ROGER
HIMENO, RAYMUNDO BADAGOS, PATRICIO SALVADOR, SR., NEHIL
BARGO, JOEL MENDOZA, and EMMANUEL CALIXIHAN
April 5, 1995
Facts: Petitioner is the registered owner of Southern Fishing Industry.
Private respondents were hired on various dates by petition'er as regular
piece-rate workers. They were uniformly paid at a rate of P1.00 per tuna
weighing thirty (30) to eighty (80) kilos per movement, that is from the
fishing boats down to petitioner's storage plant at a load/unload cycle of
work until the tuna catch reached its final shipment/destination. They did
the work of unloading tuna from fishing boats to truck haulers; unloading
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them again at petitioner's cold storage plant for filing, storing, cleaning,
and maintenance; and finally loading the processed tuna for shipment.
They worked seven (7) days a week.
During the first week of June 1990, petitioner notified his workers of his
proposal to reduce the rate-per-tuna movement due to the scarcity of
tuna. Private respondents resisted petitioner's proposed rate reduction.
When they reported for work the next day, they were informed that they
had been replaced by a new set of workers, When they requested for a
dialogue with the management, they were instructed to wait for further
notice. They waited for the notice of dialogue for a full week but in vain.
On 15 June 1990, private respondents filed a case against petitioner
before the NLRC Sub-Regional Arbitration. On 2 July 1990, private
respondents filed another case against petitioner, containing an additional
claim for separation pay should their complaint for constructive dismissal
be upheld. Labor Arbiter held that petitioner indeed constructively
dismissed the respondents. On appeal, NLRC ruled that the petitioner was
guilty of illegal dismissal. Hence this petition.
Issue: Whether or not the mode of payment used by the petitioner is
accepted and what the law mandates.
Held: Article 102 of the Labor Code provides that: No employer shall pay
the wages of an employee by means of, promissory notes, vouchers,
coupons, tokens tickets, chits, or any object other than legal tender,even
when expressly requested by the employee. Payment of wages by check
or money order shall be allowed when such manner of payment is
customary on the date of effectivity of this Code, or is necessary as
specified in appropriate regulations to be issued by the Secretary of Labor
or as stipulated in a collective bargaining agreement.
Undoubtedly, petitioner's practice of paying the private respondents the
minimum wage by means of legal tender combined with tuna liver and
intestines runs counter to the above cited provision of the Labor Code.
The fact that said method of paying the minimum wage was not only
agreed upon by both parties in the employment agreement but even
expressly requested by private respondents, does not shield petitioner.
Article 102 of the Labor Code is clear. Wages shall be paid only by means
of legal tender. The only instance when an employer is permitted to pay
wages informs other than legal tender, that is, by checks or money order,
is when the circumstances prescribed in the second paragraph of Article
102 are present
Direct Payment of Wages Labor Code Article 105, Sections 5, 6
Bermiso vs. Escao Inc.
G.R. No. L-11606
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Wage Deduction Labor Code Article 113; Book III, Rule VIII,
Section 10
Apodaca vs. NLRC
G.R. No. 80039
ERNESTO M. APODACA vs.
NATIONAL LABOR RELATIONS COMMISSION, JOSE M. MIRASOL and
INTRANS PHILS., INC.
April 18, 1989
Facts: Petitioner was employed in respondent corporation. On August 28,
1985, respondent Jose M. Mirasol persuaded petitioner to subscribe to
1,500 shares of respondent corporation at P100.00 per share or a total of
P150,000.00. He made an initial payment of P37,500.00. On September 1,
1975, petitioner was appointed President and General Manager of the
respondent corporation. However, on January 2, 1986, he resigned.
On December 19, 1986, petitioner instituted with the NLRC a complaint
against private respondents for the payment of his unpaid wages, his cost
of living allowance, the balance of his gasoline and representation
expenses and his bonus compensation for 1986. Petitioner and private
respondents submitted their position papers to the labor arbiter. Private
respondents admitted that there is due to petitioner the amount of
P17,060.07 but this was applied to the unpaid balance of his subscription
in the amount of P95,439.93. Petitioner questioned the set-off alleging
that there was no call or notice for the payment of the unpaid subscription
and that, accordingly, the alleged obligation is not enforceable.
In a decision dated April 28, 1987, the labor arbiter sustained the claim of
petitioner for P17,060.07 on the ground that the employer has no right to
withhold payment of wages already earned under Article 103 of the Labor
Code. Upon the appeal of the private respondents to public respondent
NLRC, the decision of the labor arbiter was reversed in a decision dated
September 18, 1987. The NLRC held that a stockholder who fails to pay
his unpaid subscription on call becomes a debtor of the corporation and
that the set-off of said obligation against the wages and others due to
petitioner is not contrary to law, morals and public policy.
Issue: Whether or not an obligation arising therefrom be offset against a
money claim of an employee against the employer.
Held: No, it cannot be used to offset the obligation. Assuming arguendo
that the NLRC may exercise jurisdiction over the said subject matter under
the circumstances of this case, the unpaid subscriptions are not due and
payable until a call is made by the corporation for payment. Private
respondents have not presented a resolution of the board of directors of
respondent corporation calling for the payment of the unpaid
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subscriptions. It does not even appear that a notice of such call has been
sent to petitioner by the respondent corporation.
What the records show is that the respondent corporation deducted the
amount due to petitioner from the amount receivable from him for the
unpaid subscriptions. 3 No doubt such set-off was without lawful basis, if
not premature. As there was no notice or call for the payment of unpaid
subscriptions, the same is not yet due and payable.
Lastly, assuming further that there was a call for payment of the unpaid
subscription, the NLRC cannot validly set it off against the wages and
other benefits due petitioner. Article 113 of the Labor Code allows such a
deduction from the wages of the employees by the employer, only in
three instances, to wit:
ART. 113. Wage Deduction. No employer, in his own behalf
or in behalf of any person, shall make any deduction from the
wages of his employees, except:
(a) In cases where the worker is insured with his consent by
the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the
insurance;
(b) For union dues, in cases where the right of the worker or
his union to checkoff has been recognized by the employer or
authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor.
Genesis Transport Service, Inc. vs. UMMGT & Taroy
G.R. No. 182114
GENESIS TRANSPORT SERVICE, INC. and RELY L. JALBUNA vs.
UNYON NG MALAYANG MANGGAGAWA NG GENESIS TRANSPORT
(UMMGT), and JUAN TAROY
April 5, 2010
Facts: Respondent Juan Taroy was hired on February 2, 1992 by petitioner
Genesis Transport Service, Inc. (Genesis Transport) as driver on
commission basis at 9% of the gross revenue per trip. On May 10, 2002,
Taroy was, after due notice and hearing, terminated from employment
after an accident on April 20, 2002 where he was deemed to have been
driving recklessly.
Taroy thus filed on June 7, 2002 a complaint 1 for illegal dismissal and
payment of service incentive leave pay, claiming that he was singled out
for termination because of his union activities, other drivers who had met
accidents not having been dismissed from employment.
Taroy later amended2 his complaint to implead his herein co-respondent
Unyon ng Malayang Manggagawa ng Genesis Transport (the union) as
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Held: Yes, they are. The refund of the cash bond filed by the private
respondents is in order. Article 114 of the Labor Code prohibits an
employer from requiting his employees to file a cash bond or to make
deposits, subject to certain exceptions, to witArt. 114. Deposits for loss or damage.- No employer shall
require his worker to make deposits from which deductions
shall be made for the reimbursement of loss of or damage to
tools, materials, or equipment supplied by the employer,
except when the employer is engaged in such trades,
occupations or business where the practice of making
deductions or requiring deposits is a recognized one, or is
necessary or desirable as determined by the Secretary of
Labor in appropriate rules and regulations.
The petitioners have not satisfactorily disputed the applicability of this
provision of the Labor Code to the case at bar. Considering further that the
petitioners failed to show that the company is authorized by law to require
the private respondents to file the cash bond in question, the refund
thereof is in order.
The allegation of the petitioners to the effect that the proceeds of the cash
bond had already been given to a certain carinderia to pay for the
accounts of the private respondents therein does not merit serious
consideration. As correctly observed by the Solicitor General, no evidence
or receipt has been shown to prove such payment.
Accordingly, the Court is not convinced that the respondent National Labor
Relations Commission committed a grave abuse of discretion amounting
to loss of jurisdiction in affirming the Decision of the labor arbiter.
Five J Taxi vs. NLRC
G.R. No. 111474
FIVE J TAXI and/or JUAN S. ARMAMENTO vs.
NATIONAL LABOR RELATIONS COMMISSION, DOMINGO MALDIGAN
and GILBERTO SABSALON
August 22, 1994
Facts: Private respondents Domingo Maldigan and Gilberto Sabsalon were
hired by the petitioners as taxi drivers 2 and, as such, they worked for 4
days weekly on a 24-hour shifting schedule. Aside from the daily
"boundary" of P700.00 for air-conditioned taxi or P450.00 for non-airconditioned taxi, they were also required to pay P20.00 for car washing,
and to further make a P15.00 deposit to answer for any deficiency in their
"boundary," for every actual working day.
In less than 4 months after Maldigan was hired as an extra driver by the
petitioners, he already failed to report for work for unknown reasons.
Later, petitioners learned that he was working for "Mine of Gold" Taxi
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the alleged voluminous records it had to locate and its desire to submit a
memorandum regarding complainants' claims.
On 7 March 1983, the assigned Labor Regulation Officers submitted an
Inspection Report on the basis of which an Order dated 14 April 1983 was
issued by Labor Officer Domingo Reyes directing SOUTH MOTORISTS to
pay Tosoc, et als., the total amount of One Hundred Eighty Four Thousand
Six Hundred Eighty Nine and 12/100 Pesos (P184,689.12) representing the
latter's corresponding emergency cost of living allowances.
SOUTH MOTORISTS moved for reconsideration of the Order, which was
denied. On 11 July 1988, the Secretary of Labor and Employment affirmed
the appealed Order. On 28 July 1988, SOUTH MOTORISTS moved for
reconsideration but this proved unsuccessful. A Second Motion for
Reconsideration was filed, which was likewise denied in an Order dated 7
March 1989.
Issue: Whether or not the Secretary of Labor and Employment erred in
affirming the award based on a mere Inspection Report
Held: No, he did not err. We see no reason for SOUTH MOTORISTS to
complain as it was afforded ample opportunity to present its side. It failed
to present employment records giving as an excuse that they were sent to
the main office in Manila, in violation of Section 11 of Rule X, Book II of the
Omnibus Rules Implementing the Labor Code providing that:
All employment records of the employees of the employer
shall be kept and maintained in or about the premises of the
workplace. The premises of a workplace shall be understood
to mean the main or branch office or establishment, if any,
depending., upon where the employees are regularly
assigned. The keeping of the employee's records in another
place is prohibited.
Garnishment/ Execution Civil Code Article 1708
Gaa vs. Court of Appeals, 140 SCRA 304 (1985)
G.R. No. L-44169
ROSARIO A. GAA vs.
THE HONORABLE COURT OF APPEALS, EUROPHIL INDUSTRIES
CORPORATION, and CESAR R. ROXAS, Deputy Sheriff of Manila
December 3, 1985
Facts: It appears that respondent Europhil Industries Corporation was
formerly one of the tenants in Trinity Building at T.M. Kalaw Street, Manila,
while petitioner Rosario A. Gaa was then the building administrator. On
December 12, 1973, Europhil Industries commenced an action (Civil Case
No. 92744) in the Court of First Instance of Manila for damages against
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said that taxes are the very lifeblood of government. The effective
collection of taxes is a task of highest importance for the sovereign. It is
critical indeed for its own survival. It follows that language of a much
higher degree of specificity than that exhibited in Article 110 of the Labor
Code is necessary to set aside the intent and purpose of the legislator that
shines through the precisely crafted provisions of the Civil Code. It cannot
be assumed simpliciter that the legislative authority, by using in Article
110 the words "first preference" and "any provision of law to the contrary
notwithstanding" intended to disrupt the elaborate and symmetrical
structure set up in the Civil Code. Neither can it be assumed casually that
Article 110 intended to subsume the sovereign itself within the term
"other creditors" in stating that "unpaid wages shall be paid in full before
other creditors may establish any claim to a share in the assets of
employer." Insistent considerations of public policy prevent us from giving
to "other creditors" a linguistically unlimited scope that would embrace
the universe of creditors save only unpaid employees.
We, however, do not believe that Article 110 has had no impact at all
upon the provisions of the Civil Code. Bearing in mind the overriding
precedence given to taxes, duties and fees by the Civil Code and the fact
that the Labor Code does not impress any lien on the property of an
employer, the use of the phrase "first preference" in Article 110 indicates
that what Article 110 intended to modify is the order of preference found
in Article 2244, which order relates, as we have seen, to property of the
Insolvent that is not burdened with the liens or encumbrances created or
recognized by Articles 2241 and 2242. We have noted that Article 2244,
number 2, establishes second priority for claims for wages for services
rendered by employees or laborers of the Insolvent "for one year
preceding the commencement of the proceedings in insolvency." Article
110 of the Labor Code establishes "first preference" for services rendered
"during the period prior to the bankruptcy or liquidation, " a period not
limited to the year immediately prior to the bankruptcy or liquidation.
Thus, very substantial effect may be given to the provisions of Article 110
without grievously distorting the framework established in the Civil Code
by holding, as we so hold, that Article 110 of the Labor Code has modified
Article 2244 of the Civil Code in two respects: (a) firstly, by removing the
one year limitation found in Article 2244, number 2; and (b) secondly, by
moving up claims for unpaid wages of laborers or workers of the Insolvent
from second priority to first priority in the order of preference established I
by Article 2244.
Manila Banking Corporation vs. NLRC
G.R. No. 107487
THE MANILA BANKING CORPORATION ("Manilabank") and
ARNULFO B. AURELLANO in his capacity as Statutory Receiver of
Manilabank
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, VICTOR L.
MENDOZA, ET. AL.
September 29, 1997
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Issue: Whether or not the employees enjoy the first preference in the
event of bankruptcy.
Held: Yes, they do. With respect to G.R No. 107487, the same is
dismissed, the issues raised therein having been rendered moot and
academic by the foregoing disquisitions and disposition. Besides, it is
beyond dispute that employees indeed enjoy first preference in the event
of bankruptcy or liquidation of an employer's business.
Art. 110. Worker preference in case of bankruptcy. In the
event of bankruptcy or liquidation of an employer's business,
his workers shall enjoy first preference as regards their wages
and other monetary claims, any provisions of law to the
contrary notwithstanding. Such unpaid wages and monetary
claims shall be paid in full before claims of the government
and other creditors may be paid.
The implications of the amendment were explained in great detail
by the Court in Development Bank of the Philippines vs. National
Labor Relations Commission, 1 viz:
The amendment expands worker preference to cover not only
unpaid wages but also other monetary claims to which even
claims of the Government must be deemed subordinate.
Notably, the terms "declaration" of bankruptcy or "judicial"
liquidation have been eliminated. Does this mean then that
liquidation proceedings have been done away with?
We opine in the negative, upon the following considerations:
1. Because of its impact on the entire system of credit, Article
110 of the Labor Code cannot be viewed in isolation but must
be read in relation to the Civil Code scheme on classification
and preference of credits.
2. In the same way that the Civil Code provisions on
classification of credits and the Insolvency Law have been
brought into harmony, so also must the kindred provisions of
the Labor Law be made to harmonize with those laws.
3. In the event of insolvency, a principal objective should be to
effect an equitable distribution of the insolvent's property
among his creditors. To accomplish this there must first be
some proceeding where notice to all of the insolvents's
creditors may be given and where the claims of preferred
creditors may be bindingly adjudicated (De Barretto vs.
Villanueva, No. L-14938, December 29, 1962, 6 SCRA 928).
The rationale therefore has been expressed in the recent case
of DBP vs. Secretary of Labor (G.R. No. 79351, 28 November
1989)
4. A distinction should be made between a preference of credit
and a lien. A preference applies only to claims which do no
attach to specific properties. A lien creates a charge on a
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On September 12, 1996, DOLE issued its Order stating among others:
Records show that respondent, Luisito Cirineo and his representative
appeared before this Office during the summary investigation of this
instant case but they never once mentioned the issue of separate juridical
personalities. Respondent had always been bent on settling the respective
claims of all thirteen (13) concerned employees. In the process, however,
he acknowledged being their employer. He cannot at this juncture
therefore say, that some of the awardees in our ORDER are employees of
another business entity. This being the case, we cannot grant his request
for indorsement to the NLRC.
On October 21, 1996, DOLE Regional Director Maximo B. Lim issued a writ
of execution. However, on March 30, 1999, DOLE Undersecretary Jose
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Espaol dismissed the appeal and affirmed the order dated February 7,
1997 of the DOLE Regional Director.
Petitioners motion for reconsideration was denied in a Resolution dated
April 18, 2000.
Petitioner filed a petition for certiorari with prayer for the issuance of
temporary restraining order with the CA.
On August 31, 2000, the CA dismissed the petition for failure of petitioner
to (1) attach a copy of the letter complaint filed by petitioners employees
and the Order dated February 7, 1997 of the DOLE Regional Director and
(2) state the material date when the assailed Orders/Resolutions were
received pursuant to Section 1 of Rule 65 and Section 3 of Rule 46 of the
1997 Rules of Civil Procedure. Petitioner filed a motion for reconsideration
which was also denied by the CA on November 10, 2000, copy of which
was received by petitioner on November 24, 2000.
Issue: Whether or not the instant case falls within the jurisdiction of the
Regional Director.
bases of the aforesaid findings (which petitioner did not contest), that
respondent Regional Director issued the assailed Order for petitioner to
pay private respondents the respective wage differentials due them.
Issue: Whether or not the instant case falls within the jurisdiction of the
Regional Director.
Held: We uphold the jurisdiction of the DOLE Regional Director. It should
be noted that petitioners complaint involved underpayment of wages and
other benefits. In order to verify the allegations in the complaint, DOLE
conducted an inspection, which yielded proof of violations of labor
standards. By the nature of the complaint and from the result of the
inspection, the authority of the DOLE, under Article 128, came into play
regardless of the monetary value of the claims involved. The extent of this
authority and the powers flowing therefrom are defined and set forth in
Article 128 of the Labor Code, as amended by R.A. No. 7730.
However, if the labor standards case is covered by the exception
clause in Article 128 (b) of the Labor Code, then the Regional
Director will have to endorse the case to the appropriate Arbitration
Branch of the NLRC. In order to divest the Regional Director or his
representatives of jurisdiction, the following elements must be
present: (a) that the employer contests the findings of the labor
regulations officer and raises issues thereon; (b) that in order to
resolve such issues, there is a need to examine evidentiary matters;
and (c) that such matters are not verifiable in the normal course of
inspection. The rules also provide that the employer shall raise such
objections during the hearing of the case or at any time after receipt
of the notice of inspection results.
In this case, the Regional Director validly assumed
jurisdiction over the money claims of private respondents
even if the claims exceeded P5,000 because such jurisdiction
was exercised in accordance with Article 128(b) of the Labor
Code and the case does not fall under the exception clause.
Accordingly, we find no sufficient reason to warrant the certification of the
instant case to the Labor Arbiter and divest the Regional Director of
jurisdiction. Respondent did not contest the findings of the labor
regulations officer. Even during the hearing, respondent never denied that
petitioners were not paid correct wages and benefits. This was, in fact,
even admitted by respondent in its petition filed before the CA. In its
defense, respondent tried to pass the buck to YMOAA, which failed to pay
the correct wages pursuant to the wage orders. Considering that the
liability of the principal and the contractor is joint and solidary, respondent
thereby prayed for a re-computation of the awards it claimed to be quite
excessive. In the motion for reconsideration filed before the Regional
Director, respondent submitted its own computation of the salary
adjustment due petitioners in the amount of P533,220.33 as wage
differentials, deducting further the amount of P39,371.52, which was
already allegedly received by petitioners, as shown in petitioners sample
pay slips and earning cards.
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Issue: Whether or not said case is within the jurisdiction of the Regional
Director.
Held: We sustain the appellate courts conclusion that the instant case
falls within the exclusive jurisdiction of the NLRC. As it is now worded, and
as consistently held in a number of cases, the visitorial and enforcement
powers of the Secretary, exercised through his representatives,
encompass compliance with all labor standards laws and other labor
legislation, regardless of the amount of the claims filed by workers.
In order to do away with the jurisdictional limitations imposed by the
Servando ruling and to finally settle any lingering doubts on the extent of
the visitorial and enforcement powers of the Secretary of Labor and
Employment, R.A. 7730 was enacted, amending Article 128 (b) to its
present formulation, so as to free it from the jurisdictional restrictions
found in Articles 129 and 217.
This notwithstanding, the power of the Regional Director to hear and
decide the monetary claims of employees is not absolute. The last
sentence of Article 128 (b) of the Labor Code, otherwise known as the
exception clause, provides an instance when the Regional Director or his
representatives may be divested of jurisdiction over a labor standards
case.
Under prevailing jurisprudence, the so-called exception clause has
the following elements, all of which must concur:
(a) that the employer contests the findings of the labor
regulations officer and raises issues thereon;
(b) that in order to resolve such issues, there is a need to
examine evidentiary matters; and
(c) that such matters are not verifiable in the normal course of
inspection.
In the present case, the CA aptly applied the exception clause. At the
earliest opportunity, respondent registered its objection to the findings of
the labor inspector. The labor inspector, in fact, noted in its report that
respondent alleged that petitioners were contractual workers and/or
independent and talent workers without control or supervision and also
supplied with tools and apparatus pertaining to their job. In its position
paper, respondent again insisted that petitioners were not its employees.
It then questioned the Regional Directors jurisdiction to entertain the
matter before it, primarily because of the absence of an employeremployee relationship.
23.
only. If the employer does not exercise this option, it must forthwith admit
the employee back to work, otherwise it may be punished for contempt.
Ultra Villa Food Haus vs. Geniston
G.R. No. 120473
Ultra Villa Food Haus, and/or Rosie Tio vs.
Renato Geniston and National Labor Relations Commission
June 23, 1999
Facts: Geniston alleged that he was employed as a do it all guy acting
as waiter, driver and maintenance man in Ultra Villa Food Haus. His
employment spanned from March 1, 1989 until he was dismissed on May
13, 1992. During the elections of May 11, 1992, Geniston acted as a poll
watcher for the National Union of Christian Democrats. The counting of
votes lasted until 3 p.m. the next day, May 12. He did not report from
work on both days on account of his poll-watching. Upon arriving home,
Geniston discovered that Tio had phoned his mother that morning and
informed the latter that he was dismissed from work.
Geniston prayed that the Labor Arbiter order petitioner Tio to pay him
overtime pay, premium pay, holiday pay, service incentive leave pay,
salary differential, and 13th month pay, as well as damages, and to
reinstate him plus backwages. Tio maintained that Geniston was her
personal driver, not an employee of the Ultra Villa Food Haus. He was
likewise given free meals as well as 13th month pay at the end of the year.
The Labor Arbiter found that Genistoon was indeed Tios personal driver
for if it were true that he was made to perform these functions as a waiter,
it would be incongruous with the position of a driver. Therefore, he was
not entitled to overtime pay, premium pay, service incentive leave pay
and 13th month pay. Upon appeal, the NLRC reversed the decision and
ordered petitioner to reinstate Geniston and to pay him backwages,
overtime pay, premium pay for holiday and rest days, 13 th month pay, and
service incentive leave pay. The NLRC also denied petitioners motion,
reiterating its earlier ruling that private respondent was an employee of
the Ultra Villa Food Haus.
Issue: Whether or not private respondent was an employee of Ultra Villa
Food Haus and entitled to 13th month pay.
Held: No but he is entitled to 13 th month pay. He failed to show evidence
that he was employed in the Ultra Villa Food Haus, therefore the Labor
Arbiter correctly ruled that he was only Tios personal driver. Though his
employment is governed by Article 141 of the Labor Code which includes
family drivers in its coverage, it was, however, silent on the grant of
overtime pay, holiday pay, premium pay and service incentive leave to
those engaged in the domestic or household service. In addition, Article
82 excludes domestic helpers from the coverage of Book III, Title I of the
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REGULAR salary." It pointed out that, "If no sales is (sic) made under the
effort of a particular representative, there is no commission during the
period when no sale was transacted, so that commissions are not and
cannot be legally defined as regular in nature." A similar Routine
Inspection was conducted in the premises of Philippine Fuji Xerox Corp. on
September 7, 1989 pursuant to Routine Inspection Authority No. NCRLSED-RI-494-89. In his Notice of Inspection Results, 6 addressed to the
Manager, Mr. Nicolas O. Katigbak, Senior Labor and Employment Officer
Nicanor M. Torres noted the following violation committed by Philippine
Fuji Xerox Corp., to wit: "Underpayment of 13th month pay of 62
employees, more or less pursuant to Revised Guidelines on the
Implementation of the 13th month pay law for the period covering 1986,
1987 and 1988. Philippine Fuji Xerox was requested to effect rectification
and/or restitution of the noted violation within five (5) working days from
notice. In their almost identically-worded petitions, petitioners, through
common counsel, attribute grave abuse of discretion to respondent labor
officials Hon. Dionisiodela Serna and Undersecretary Cresenciano B.
Trajano in issuing the questioned Orders of January 17, 1990 and October
10, 1991, respectively. They maintain that under P. D. 851, the 13th
month pay is based solely on basic salary. As defined by the law itself and
clarified by the Implementing and Supplementary Rules as well as by the
Supreme Court in a long line of decisions, remunerations which do not
form part of the basic or regular salary of an employee, such as
commissions, should not be considered in the computation of the 13th
month pay.
Issue: Whether or not commissions form part of basic salary used in the
computation of 13th month pay.
Held: No, in remunerative schemes consisting of a fixed or guaranteed
wage plus commission, the fixed or guaranteed wage is patently the
"basic salary" for this is what the employee receives for a standard work
period. Commissions are given for extra efforts exerted in consummating
sales or other related transactions. They are, as such, additional pay,
which this Court has made clear do not form part of the "basic salary." In
including commissions in the computation of the 13th month pay, the
second paragraph of Section 5 (a) of the Revised Guidelines on the
Implementation of the 13th Month Pay Law unduly expanded the concept
of "basic salary" as defined in P.D. 851. It is a fundamental rule that
implementing rules cannot add to or detract from the provisions of the law
it is designed to implement. Administrative regulations adopted under
legislative authority by a particular department must be in harmony with
the provisions of the law they are intended to carry into effect. They
cannot widen its scope. An administrative agency cannot amend an act of
Congress. The consolidated petitions are hereby GRANTED. The second
paragraph of Section 5(a) of the Revised Guidelines on the
Implementation of the 13th Month Pay Law issued on November 16, 1987
by then Labor Secretary Franklin M. Drilon is declared null and void as
being violative of the law said Guidelines were issued to implement.
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Held: Commissions are included. The definition in Art 97(f) of the Labor
Code explicitly includes commissions as part of wages. While commissions
are, indeed, incentives or forms of encouragement to inspire employees to
put a little more industry on the jobs particularly assigned to them, still
these commissions are direct remunerations for services rendered. In fact,
commissions have been defined as the recompense, compensation or
reward of an agent, salesman, executor, trustee, receiver, factor, broker or
bailee, when the same is calculated as a percentage on the amount of his
transactions or on the profit to the principal. The nature of the work of a
salesman and the reason for such type of remuneration for services
rendered demonstrate clearly that commissions are part of a salesman's
wage or salary. Likewise, there is no law mandating that commissions be
paid only after the minimum wage has been paid to the employee. Verily,
the establishment of a minimum wage only sets a floor below which an
employee's remuneration cannot fall, not that commissions are excluded
from wages in determining compliance with the minimum wage law.
Honda Philippines, Inc. vs. Samahang Malayang Manggagawa sa Honda
G.R. No. 145561
HONDA PHILS., INC. vs.
SAMAHAN NG MALAYANG MANGGAGAWA SA HONDA
June 15, 2005
Facts: The Collective Bargaining Agreement (CBA) between petitioner
Honda Philippines, Inc. and respondent union Samahan ng Malayang
Manggagawa sa Honda containing provisions on the payment of 13th
month and 14th month pay is effective until year 2000. In the latter part
of 1998, the parties started renegotiations for the fourth and fifth years of
their CBA. When the talks between the parties bogged down, respondent
union filed a Notice of Strike on the ground of bargaining deadlock.
Thereafter, Honda filed a Notice of Lockout. On May 11, 1999, respondent
union filed a second Notice of Strike on the ground of unfair labor practice
alleging that Honda illegally contracted out work to the detriment of the
workers. Respondent union went on strike and picketed the premises of
Honda on May 19, 1999. On November 22, 1999, the management of
Honda issued a memorandum announcing its new computation of the
13th and 14th month pay to be granted to all its employees whereby the
thirty-one (31)-day long strike shall be considered unworked days for
purposes of computing said benefits. As per the companys new formula,
the amount equivalent to 1/12 of the employees basic salary shall be
deducted from these bonuses, with a commitment however that in the
event that the strike is declared legal, Honda shall pay the amount
deducted. Respondent union opposed the pro-rated computation of the
bonuses in a letter dated November 25, 1999. This issue was submitted
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March 8, 1989
Facts: In April 1980, eighteen (18) employees of the petitioners filed
against their employer, and the other petitioners two labor standard cases
which were docketed in the Regional Office of the Ministry of Labor in
Bacolod City as FAD Cases Nos. 179180 and 0792-80 ("PAFLU SEPTEMBER
CONVENTION VS. FRAMANLIS FARMS"), alleging that in 1977 to 1979 they
were not paid emergency cost of living allowance (ECOLA) minimum
wage, 13th month pay, holiday pay, and service incentive leave. The
Deputy Minister of Labor Vicente Leogardo, Jr., on January 18, 1983
ordered the employer to pay, among others 13th month pay for the years
1978 and 1979 for all complainants. However, the claims for 13th month
pay for 1977, as well as for ECOLA under PD Nos. 525 and 1123 shall,
pending outcome of respondent's application for exemption therefrom, be
held in abeyance." Petitioners admitted that they failed to pay their
workers 13th month pay in 1978 and 1979. However, they argued that
they substantially complied with the law by giving their workers a yearly
bonus and other nonmonetary benefits amounting to not less than 1/12th
of their basic salary, in the form of: 1. a weekly subsidy of choice pork
meat for only P9.00 per kilo and later increased to P11 per kilo in March
1980, instead of the market price of P10 to P15 per kilo; 2. free choice
pork meat in May and December of every year; and 3. free light or
electricity. 4. all of which were allegedly "the equivalent" of the 13th
month pay.
Issue: Whether or not petitioner is exempted from the payment of 13th
month pay as it had substantially complied with the requirement by
extending yearly bonuses and other benefits in kind and in cash to the
complainants, pursuant to Section 3(c) of PD 851 which exempts the
employer from paying 13th month pay when its equivalent has already
been given.
Held: No, the petitioner is not exempted from the payment of 13th month
pay as yearly bonus and other nonmonetary benefits are not valid
substitute for the payment of 13th month pay. Under Section 3 of PD No.
851, such benefits in the form of food or free electricity, assuming they
were given, were not a proper substitute for the 13th month pay required
by law. PD 851 provides: Section 3. Employees covered - The Decree shall
apply to all employees except to: x xx. x xxxxx The term 'its equivalent' as
used in paragraph (c) hereof shall include Christmas bonus, mid-year
bonus, profit-sharing payments and other cash bonuses amounting to not
less than 1/12 of the basic salary but shall not include cash and stock
dividends, cost of living allowances and all other allowances regularly
enjoyed by the employee, as well as non-monetary benefits. Where an
employer pays less than 1/12 of the employee's basic salary, the
employer shall pay the difference." Neither may year-end rewards for
loyalty and service be considered in lieu of 13th month pay. Section 10 of
the Rules and Regulations Implementing Presidential Decree No. 851
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Facts: Respondent Memia Quiambao with thirty others who are members
of private respondent Federation of Free Workers (FFW) were employed by
petitioner as hotel crew. On the basis of the profitability of the company's
business operations, management granted a 14th month pay to its
employees starting in 1979. In January 1982, operations ceased to give
way to the hotel's conversion into a training center for Libyan scholars.
However, due to technical and financing problems, the Libyans preterminated the program on July 7, 1982, and petitioner allegedly suffered
losses amounting to P2 million and in the end totally closed its business.
Private respondent Federation of Free Workers (FFW), filed with the
Ministry of Labor and Employment a complaint against petitioner for
illegal suspension, violation of the CBA and non-payment of the 14th
month pay. Records however show that the case was submitted for
submission on the sole issue of alleged non-payment of the 14th month
pay in the year 1982. Labor Arbiter ordered petitioner to pay the 14th
month pay to respondents for the year 1982. NLRC affirmed the decision.
Issue: Whether or not the 14th Month Pay can be withdrawn without
violating article 100 of the Labor Code.
Held: It is patently obvious that Article 100 is clearly without applicability.
The date of effectivity of the Labor Code is May 1, 1974. In the case at
bar, petitioner extended its 14th month pay beginning 1979 until 1981.
What is demanded is payment of the 14th month pay for 1982.
Indubitably from these facts alone, Article 100 of the Labor Code cannot
apply. Moreover, there is no law that mandates the payment of 14th
month pay. This is emphasized in the grant of exemption under
Presidential Decree 851 (13th Month Pay Law) which states: "Employers
already paying their employees a 13th month pay or its equivalent are not
covered by this Decree." Necessarily then, only the 13th month pay is
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basic salary of an employee within a calendar year. (b) "Basic Salary" shall
include all renumerations or earnings paid by an employer to an employee
for services rendered but may not include cost of living allowances, profitsharing payments, and all allowances and monetary benefits which are
not considered or integrated as part of the regular or basic salary of the
employee at the time of the promulgation of the Decree on December 16,
1975. It follows therefore, that payments for sick, vacation and maternity
leaves, premium for work done on rest days special holidays, as well as
pay for regular holidays, are likewise excluded in computing the basic
salary for the purpose of determining the thirteen month pay. However
petitioner computed and paid the thirteenth month pay, without excluding
the subject items therein until 1981. From 1975 to 1981, petitioner had
freely, voluntarily and continuously included in the computation of its
employees' thirteenth month pay, the payments for sick, vacation and
maternity leaves, premiums for work done on rest days and special
holidays, and pay for regular holidays. The considerable length of time the
questioned items had been included by petitioner indicates a unilateral
and voluntary act on its part, sufficient in itself to negate any claim of
mistake. Company practice favorable to the employees had indeed been
established and the payments made pursuant thereto, ripened into
benefits enjoyed by them. And any benefit and supplement being enjoyed
by the employees cannot be reduced, diminished, discontinued or
eliminated by the employer, by virtue of Section 10 of the Rules and
Regulations Implementing P.D. No. 851, and Article 100 of the labor of the
Philippines, which prohibit the diminution or elimination by the employer
of the employees' existing benefits.
24.
Bonus
Nature
Philippine Duplicators Inc. vs. NLRC
G.R. No. 110068
PHILIPPINE DUPLICATORS, INC. vs.
NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE
DUPLICATORS EMPLOYEES UNION-TUPAS
February 15, 1995
petitioners, the decision in the latter directly opposes the decision in the
former. Because of this, Philippine Duplicators filed for another motion for
reconsideration, this time anchoring their assertions to the recently
concluded case of Boie-Takeda Chemicals.
Issue: Whether or not sales commission shall be considered in the
computation of 13th month pay
Held: The sales commission earned by the salesmen who make or close a
sale of duplicating machines distributed by petitioner corporation,
constitute part of the compensation or remuneration paid to salesmen for
serving as salesmen, and hence as part of the "wage" or salary of
petitioner's salesmen. Indeed, it appears that petitioner pays its salesmen
a small fixed or guaranteed wage; the greater part of the salesmen's
wages or salaries being composed of the sales or incentive commissions
earned on actual sales closed by them. No doubt this particular galary
structure was intended for the benefit of the petitioner corporation, on the
apparent assumption that thereby its salesmen would be moved to
greater enterprise and diligence and close more sales in the expectation
of increasing their sales commissions. This, however, does not detract
from the character of such commissions as part of the salary or wage paid
to each of its salesmen for rendering services to petitioner corporation. In
other words, the sales commissions received for every duplicating
machine sold constituted part of the basic compensation or remuneration
of the salesmen of Philippine Duplicators for doing their job. The portion of
the salary structure representing commissions simply comprised an
automatic increment to the monetary value initially assigned to each unit
of work rendered by a salesman. Especially significant here also is the fact
that the fixed or guaranteed portion of the wages paid to the Philippine
Duplicators' salesmen represented only 15%-30% of an employee's total
earnings in a year. Sales commissions, such as those paid in Duplicators,
are intimately related to or directly proportional to the extent or energy of
an employee's endeavors. Commissions are paid upon the specific results
achieved by a salesman-employee. It is a percentage of the sales closed
by a salesman and operates as an integral part of such salesman's basic
pay.
Definition; When Demandable
Marcos vs. NLRC
G.R. No. 111744
LOURDES G. MARCOS, ALEJANDRO T. ANDRADA, BALTAZARA J.
LOPEZ AND VILMA L. CRUZ vs.
NATIONAL LABOR RELATIONS COMMISSION and INSULAR LIFE
ASSURANCE CO., LTD.
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September 8, 1995
Facts: Petitioners were under the employ of insular life assurance co for
more than 20 years, but were dismissed because their positions were
declared redundant. They were given benefits upon dismissal, all were
either provided by the company or required by the law. Petitioners are
claiming that they are entitled to receive their service awards. In the same
year of the petitioners dismissal, private respondent celebrated its 80th
anniversary and granted anniversary bonus equivalent to one (1) month
salary only to permanent and probationary employees as of November 15,
1990. On March 26, 1991, respondent company announced the grant of
performance bonus to both rank and file employees and supervisory
specialist grade and managerial staff equivalent to two (2) months salary
and 2.75 basic salary, respectively, as of December 30, 1990. The
performance bonus, however, would be given only to permanent
employees as of March 30, 1991. Petitioners contended that they are
likewise entitled to the performance and anniversary bonuses because, at
the time the performance bonus was announced to be given, they were
only short of two (2) months service to be entitled to the full amount
thereof as they had already served the company for ten (10) months prior
to the declaration of the grant of said benefit. Also, they lacked only
fifteen (15) days to be entitled to the full amount of the anniversary bonus
when it was announced to be given to employees as of November 15,
1990. In a decision dated October 8, 1992, the Labor Arbiter ordered
respondent company to pay petitioners their service awards, anniversary
bonuses and prorated performance bonuses, including ten percent (10%)
thereof as attorney's fees. Respondent company appealed to public
respondent NLRC claiming grave abuse of discretion committed by the
labor arbiter in holding it liable to pay said service award, performance
and anniversary bonuses, and in not finding that petitioners were
estopped from claiming the same as said benefits had already been given
to them and the petitioners have already signed a quitclaim.
Issue: Whether or not the petitioners are entitled to the bonuses that
they are claiming
Held: Under prevailing jurisprudence, the fact that an employee has
signed a satisfaction receipt for his claims does not necessarily result in
the waiver thereof. A deed of release or quitclaim cannot bar an employee
from demanding benefits to which he is legally entitled. A bonus is not a
gift or gratuity, but is paid for some services or consideration and is in
addition to what would ordinarily be given. The term "bonus" as used in
employment contracts, also conveys an idea of something which is
gratuitous, or which may be claimed to be gratuitous, over and above the
prescribed wage which the employer agrees to pay. While there is a
conflict of opinion as to the validity of an agreement to pay additional
sums for the performance of that which the promisee is already under
obligation to perform, so as to give the latter the right to enforce such
promise after performance, the authorities hold that if one enters into a
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Facts: BSSI was engaged in the manufacture and sale of computer forms.
Due to financial reverses, its creditors, the Development Bank of the
Philippines (DBP) and the Asset Privatization Trust (APT), took possession
of its assets, including a manufacturing plant in Marilao, Bulacan. As a
retrenchment measure, some plant employees, including the private
respondents, were laid off and were paid separation pay equivalent to
one-half (1/2) month pay for every year of service. Upon receipt of their
separation pay, the private respondents signed individual releases and
quitclaims in favor of BSSI. BSSI retained some employees but after two
months discharged them as well but their separation pay is equivalent to
a full month's salary for every year of service plus mid-year bonus.
Protesting against the discrimination in the payment of their separation
benefits, the twenty-seven (27) private respondents filed three (3)
separate complaints against the BSSI and Raul Locsin. Petitioner of course
denied the unlawful discrimination in the payment of separation benefits.
They argued that the first batch of employees was paid "retrenchment"
benefits mandated by law, while the remaining employees were granted
higher "separation" benefits because their termination was on account of
the closure of the business. LaborArbirter ruled in favor of private
respondents ordering the petitioner to pay the respondents their
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separation pay differentials and their mid-year bonus. NLRC, upon appeal
by petitioner affirmed the Labor Arbiters decision.
Issue: Whether or not petitioner should also give the mid-year bonuses to
their employees.
Held: It is settled doctrine that the grant of a bonus is a prerogative, not
an obligation, of the employer (Traders Royal Bank vs. NLRC, 189 SCRA
274). The matter of giving a bonus over and above the worker's lawful
salaries and allowances is entirely dependent on the financial capability of
the employer to give it. The fact that the company's business was no
longer profitable (it was in fact moribund) plus the fact that the private
respondents did not work up to the middle of the year (they were
discharged in May 1988) were valid reasons for not granting them a midyear bonus. Requiring the company to pay a mid-year bonus to them also
would in effect penalize the company for its generosity to those workers
who remained with the company till the end" of its days. (Traders Royal
Bank vs. NLRC, supra.) The award must therefore be deleted.
25.
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