| LABOR LAW SET 1 |

1. FRANCISCO v. NLRC
FACTS: Angelina Francisco was hired by Kasei Corporation during its incorporation stage. She was designated as
Accountant and Corporate Secretary and was assigned to handle all the accounting needs of the company. She was
also designated as Liaison Officer to the City of Makati to secure business permits, construction permits and other
licenses for the initial operation of the company.
In 1996, petitioner was designated Acting Manager. The corporation also hired Gerry Nino as accountant in lieu of
petitioner. As Acting Manager, petitioner was assigned to handle recruitment of all employees and perform
management administration functions; represent the company in all dealings with government agencies, especially
with the Bureau of Internal Revenue (BIR), Social Security System (SSS) and in the city government of Makati; and to
administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei
Corporation.
For five years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was P27,500.00
plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation.[8]
In January 2001, petitioner was replaced by Liza R. Fuentes as Manager. Petitioner alleged that she was required to
sign a prepared resolution for her replacement but she was assured that she would still be connected with Kasei
Corporation.
Thereafter, Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September 2001 for a
total reduction of P22,500.00 as of September 2001. Petitioner was not paid her mid-year bonus allegedly because the
company was not earning well. On October 2001, petitioner did not receive her salary from the company. She made
repeated follow-ups with the company cashier but she was advised that the company was not earning well.
On October 15, 2001, petitioner asked for her salary from Acedo and the rest of the officers but she was informed that
she is no longer connected with the company.
Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal
before the labor arbiter. The Labor Arbiter ruled in favor of petitioner but the CA reversed the said decision on appeal.
ISSUES:
(1) whether there was an employer-employee relationship between petitioner and private respondent Kasei
Corporation; and if in the affirmative,
(2) whether petitioner was illegally dismissed
RULING:
(1) YES. There was an employer-employee relationship between the parties.
In certain cases the control test is not sufficient to give a complete picture of the relationship between the
parties, owing to the complexity of such a relationship where several positions have been held by the worker.
There are instances when, aside from the employers power to control the employee with respect to the means
and methods by which the work is to be accomplished, economic realities of the employment relations help
provide a comprehensive analysis of the true classification of the individual, whether as employee,
independent contractor, corporate officer or some other capacity.
The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers
power to control the employee with respect to the means and methods by which the work is to be
accomplished; and (2) the underlying economic realities of the activity or relationship.
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.
ECONOMIC ACTIVITY:
The determination of the relationship between employer and employee depends upon the circumstances of the
whole economic activity, such as:
(1) the extent to which the services performed are an integral part of the employers business;
(2) the extent of the workers investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss;
(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise;
(6) the 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
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of business.
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. In the United States, the touchstone of economic reality in
analyzing possible employment relationships for purposes of the Federal Labor Standards Act is dependency.
By 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.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she
was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. She
reported for work regularly and served in various capacities as Accountant, Liaison Officer, Technical
Consultant, Acting Manager and Corporate Secretary, with substantially the same job functions, that is,
rendering accounting and tax services to the company and performing functions necessary and desirable for
the proper operation of the corporation such as securing business permits and other licenses over an indefinite
period of engagement.
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.
It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued
employment in the latters line of business.
(2) YES. Petitioner was illegally dismissed.
The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month from
January to September 2001. This amounts to an illegal termination of employment, where the petitioner is
entitled to full backwages. Since the position of petitioner as accountant is one of trust and confidence, and
under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of
reinstatement.
A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive
dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment
becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or
when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee.
2. SONZA v. ABS-CBN
FACTS: In 1994, ABS-CBN entered into an Agreement with Mel & Jay Management Devt Corp (MJMDC), represented by
its President, Mr. Sonza and Carmela Tiangco, treasurer. The parties agreed that Sonza would render services to ABSCBN as talent for radio and TV as co-hots for Mel and Jay Radio and TV program.
In 1996, Sonza wrote a letter to ABS-CBN expressing his intention to rescind the Agreement in view of certain acts of
ABS-CBN which he alleged as violative of the Agreement. Later on, Sonza filed a complaint against ABS-CBN before the
DOLE alleging that the latter did not pay his salaries, separation pay, service incentive leave, 13 th month pay, signing
bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP)
Meanwhile, ABS-CBN continued to remit directly to Sonza his monthly talent fees.
ISSUE: Whether or not there exists an employer-employee relationship between ABS-CBN and Sonza.
RULING: NO.
The elements of an employer-employee 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 employee on the means and
methods by which the work is accomplished.[18] The last element, the so-called control test, is the most important
element.
A. Selection and Engagement of Employee
The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. If SONZA did not possess such unique skills, talent and celebrity status, ABS-CBN
would not have entered into the Agreement with SONZA but would have hired him through its personnel
department just like any other employee.
In any event, the method of selecting and engaging SONZA does not conclusively determine his status. We
must consider all the circumstances of the relationship, with the control test being the most important
element.
B.

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Payment of Wages
Whatever benefits SONZA enjoyed arose from contract and not because of an employer-employee relationship.
The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of SONZA as an
independent contractor. The parties expressly agreed on such mode of payment. Under the Agreement, MJMDC
is the AGENT of SONZA, to whom MJMDC would have to turn over any talent fee accruing under the
Agreement.
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C. Power of Dismissal
SONZA failed to show that ABS-CBN could terminate his services on grounds other than breach of contract,
such as retrenchment to prevent losses as provided under labor laws.
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.
D.

Power of Control
Applying the control test to the present case, we find that SONZA is not an employee but an independent
contractor. The control test is the most important test our courts apply in distinguishing an employee from an
independent contractor. This test is based on the extent of control the hirer exercises over a worker.
To perform his work, SONZA only needed his skills and talent. How SONZA delivered his lines, appeared on
television, and sounded on radio were outside ABS-CBNs control. SONZA did not have to render eight hours of
work per day. The Agreement required SONZA to attend only rehearsals and tapings of the shows, as well as
pre- and post-production staff meetings. ABS-CBN could not dictate the contents of SONZAs script. However,
the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The clear implication is
that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its
interests.
SONZA claims that ABS-CBNs power not to broadcast his shows proves ABS-CBNs power over the means and
methods of the performance of his work. Although ABS-CBN did have the option not to broadcast SONZAs
show, ABS-CBN was still obligated to pay SONZAs talent fees. Thus, even if ABS-CBN was completely
dissatisfied with the means and methods of SONZAs performance of his work, or even with the quality or
product of his work, ABS-CBN could not dismiss or even discipline SONZA. All that ABS-CBN could do is not to
broadcast SONZAs show but ABS-CBN must still pay his talent fees in full.
A radio broadcast specialist who works under minimal supervision is an independent contractor. SONZAs work
as television and radio program host required special skills and talent, which SONZA admittedly possesses. The
records do not show that ABS-CBN exercised any supervision and control over how SONZA utilized his skills
and talent in his shows.

3. JAVIER v. FLY ACE CORPORATION

FACTS: In 2008, Javier filed a complaint before the NLRC for the underpayment of salaries and other labor standards
benefits. He alleged that he was an employee of Fly Ace since September 2007, performing various tasks at the
respondent's warehouse such as cleaning and arranging the canned items before their delivery to certain locations,
except in instances when he would be ordered to accompany the company's delivery vehicles, as a stevedore
(pahinante). During his employment, he was not issued an ID Card and payslips by the company.
He alleged that in May 2008, he reported for work but he was not allowed to enter by the company's security guard
pursuan to the order of Mr. Ong, his superior. When Javier asked Mr. Ong regarding the reason, the latter replied
Tanungin mo anak mo. Later on, Javier found out that said Mr. Ong was courting his daughter.
For its part, Fly Ace averred that it was engaged in the business of importation and sales of groceries. Sometime in
December 2007, Javier was contracted by its employee, Mr. Ong, as extra helper on a pakyaw basis at an agreed rate
of 300.00 per trip, which was later increased to 325.00 in January 2008. Mr. Ong contracted Javier roughly 5 to 6
times only in a month whenever the vehicle of its contracted hauler, Milmar Hauling Services, was not available. On
April 30, 2008, Fly Ace no longer needed the services of Javier. Denying that he was their employee, Fly Ace insisted
that there was no illegal dismissal. Fly Ace submitted a copy of its agreement with Milmar Hauling Services and copies
of acknowledgment receipts evidencing payment to Javier for his contracted services bearing the words, daily
manpower (pakyaw/piece rate pay)and the latters signatures/initials.
ISSUE: Whether or not Javier is considered as an employee of the respondent corporation.
RULING: No.
The Court is of the considerable view that on Javier lies the burden to pass the well-settled tests to determine the
existence of an employer-employee relationship, viz: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct. Of these elements,
the most important criterion is whether the employer controls or has reserved the right to control the employee not
only as to the result of the work but also as to the means and methods by which the result is to be accomplished.
In this case, Javier was not able to persuade the Court that the above elements exist in his case. He could not submit
competent proof that Fly Ace engaged his services as a regular employee; that Fly Ace paid his wages as an employee,
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or that Fly Ace could dictate what his conduct should be while at work. In other words, Javiers allegations did not
establish that his relationship with Fly Ace had the attributes of an employer-employee relationship on the basis of the
above-mentioned four-fold test. Worse, Javier was not able to refute Fly Aces assertion that it had an agreement with a
hauling company to undertake the delivery of its goods. It was also baffling to realize that Javier did not dispute Fly
Aces denial of his services exclusivity to the company. In short, all that Javier laid down were bare allegations without
corroborative proof. Fly Ace does not dispute having contracted Javier and paid him on a per trip rate as a stevedore,
albeit on a pakyaw basis. The Court cannot fail to note that Fly
Ace presented documentary proof that Javier was indeed paid on a pakyaw basis per the acknowledgment receipts
admitted as competent evidence by the LA. Unfortunately for Javier, his mere denial of the signatures affixed therein
cannot automatically sway us to ignore the documents because forgery cannot be presumed and must be proved by
clear, positive and convincing evidence and the burden of proof lies on the party alleging forgery.
The Courts decision does not contradict the settled rule that payment by the piece is just a method of compensation
and does not define the essence of the relation. Payment on a piece-rate basis does not negate regular employment.
The term wage is broadly defined in Article 97 of the Labor Code as
remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task,
piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of
the relations. Nor does the fact that the petitioner is not covered by the SSS affect the employer-employee
relationship. However, in determining whether the relationship is that of employer and employee or one of an
independent contractor, each case must be determined on its own facts and all the features of the relationship are to
be considered. Unfortunately for Javier, the attendant facts and circumstances of the instant case do not provide the
Court with sufficient reason to uphold his claimed status as employee of Fly Ace.
4. SMCEU v. JUDGE BERSAMIN
FACTS: Sometime in 1983 and 1984, SanMig entered into contracts for merchandising services with Lipercon and
D'Rite (Annexes K and I, SanMig's Comment, respectively). These companies are independent contractors duly
licensed by the Department of Labor and Employment (DOLE). SanMig entered into those contracts to maintain its
competitive position and in keeping with the imperatives of efficiency, business expansion and diversity of its
operation. In said contracts, it was expressly understood and agreed that the workers employed by the contractors
were to be paid by the latter and that none of them were to be deemed employees or agents of SanMig.
There was to be no employer-employee relation between the contractors and/or its workers, on the one hand, and
SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for brevity) is the duly authorized
representative of the monthly paid rank-and-file employees of SanMig with whom the latter executed a Collective
Bargaining Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's Comment). Section 1 of their
CBA specifically provides that "temporary, probationary, or contract employees and workers are excluded from the
bargaining unit and, therefore, outside the scope of this Agreement."
In a letter, the Union advised SanMig that some Lipercon and D'Rite workers had signed up for union membership and
sought the regularization of their employment with SMC. The Union alleged that this group of employees, while
appearing to be contractual workers supposedly independent contractors, have been continuously working for SanMig
for a period ranging from six (6) months to fifteen (15) years and that their work is neither casual nor seasonal as they
are performing work or activities necessary or desirable in the usual business or trade of SanMig. Thus, it was
contended that there exists a "labor-only" contracting situation. It was then demanded that the employment status of
these workers be regularized.
Series of pickets were staged by Lipercon and D'Rite workers in various SMC plants and offices. SMC filed a verified
Complaint for Injunction and Damages before respondent Court. In issuing the Injunction, respondent Court
rationalized that the absence of employer-employee relationship negates the existence of labor dispute.
ISSUE: Whether or not there must be an employer-employee relationship in order for a labor dispute to exist.
RULING: NO.
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning terms
and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and employee."
While it is SanMig's submission that no employer-employee relationship exists between itself, on the one hand, and the
contractual workers of Lipercon and D'Rite on the other, a labor dispute can nevertheless exist "regardless of whether
the disputants stand in the proximate relationship of employer and employee" (Article 212, Labor Code) provided the
controversy concerns, among others, the terms and conditions of employment or a "change" or "arrangement" thereof.
Put differently, and as defined by law, the existence of a labor dispute is not negative by the fact that the plaintiffs and
defendants do not stand in the proximate relation of employer and employee.
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That a labor dispute, as defined by the law, does exist herein is evident. At bottom, what the Union seeks is to
regularize the status of the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working relationship between said employees vis-a-vis
SanMig. Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved
bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those workers,
who have signed up for Union membership, for the purpose of collective bargaining. SanMig, for its part, resists that
Union demand on the ground that there is no employer-employee relationship between it and those workers and
because the demand violates the terms of their CBA. Obvious then is that representation and association, for the
purpose of negotiating the conditions of employment are also involved. In fact, the injunction sought by SanMig was
precisely also to prevent such representation. Again, the matter of representation falls within the scope of a labor
dispute.
5. LOCSIN V. PLDT
FACTS: On November 1, 1990, respondent Philippine Long Distance Telephone Company (PLDT) and the Security and
Safety Corporation of the Philippines (SSCP) entered into a Security Services Agreement (Agreement) whereby SSCP
would provide armed security guards to PLDT to be assigned to its various offices. Pursuant to such agreement,
petitioners Raul Locsin a nd Eddie Tomaquin, among
other security guards, were posted at a PLDT office.
On August 30, 2001, respondent issued a Letter dated August 30, 2001 terminating
the Agreement effective October 1, 2001.Despite the termination of the Agreement, however, petitioners continued to
secure the premises of their assigned office. They were allegedly directed to remain at their post by representatives of
respondent. In support of their contention,
petitioners provided the Labor Arbiter with copies of petitioner Locsins pay slips for the period of January to September
2002.
Then, on September 30, 2002, petitioners services were terminated.
Thus, petitioners filed a complaint before the Labor Arbiter for illegal dismissal and recovery of money claims such as
overtime pay, holiday pay, premium pay for holiday and rest day, service incentive leave pay, Emergency Cost of
Living Allowance, and moral and exemplary damages against PLDT.
ISSUE: Whether or not petitioners are considered employees of PLDT.
RULING: There was no employer-employee relationship between the petitioners and PLDT from the time of petitioners
first assignment to respondent by SSCP in 1988 until the alleged termination of the Agreement between respondent
and SSCP. Petitioners were among those declared to be employees of
their respective security agencies and not of PLDT. However, petitioners became employees of
respondent after the Agreement between SSCP and respondent was terminated.
The fact remains that petitioners remained at their post after the termination of the Agreement. Notably, in its
Comment datedMarch 10, 2009,respondent never denied that petitioners
remained at their post until September 30, 2002. While respondent denies the alleged circumstances stated by
petitioners, that they were told to remain at their post by respondents Security Department and that they were
informed by SSCP Operations Officer Eduardo Juliano that their salaries would be coursed through SSCP as per
arrangement with PLDT, it does not state why they were not made to
vacate their posts. Respondent said that it did not know why petitioners remained at their posts.
Reason dictates to conclude that petitioners remained at their post under the instructions of respondent. It can further
be concluded that respondent dictated upon petitioners that the latter perform
their regular duties to secure the premises during operating hours. This, to our mind and under the circumstances, is
sufficent to establish the existence of an employer-employee relationship. Certainly, the facts as narrated by
petitioners are more believable than the irrational denials made by respondent.
To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of the Agreement,
petitioners remained at their post securing the premises of respondent while receiving their salaries, allegedly from
SSCP. Clearly, such a situation makes no sense, and the denials proffered by respondent do not shed any light to the
situation. It is but reasonable to conclude that, with the
behest and, presumably, directive of respondent, petitioners continued with their services. Evidently, such areindicia of
control that respondent exercised over petitioners.
Such power of control has been explained as the right to control not only the end to be achieved but also the means
to be used in reaching such end. With the conclusion that respondent directed petitioners to remain at their posts and
continue with their duties, it is clear that respondent exercised the power of control over them; thus, the existence of
an employer-employee relationship.
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6. PEOPLES BROADCASTING SERVICE v. SECRETARY OF DOLE

FACTS: Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and
Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave,
13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages
and noncoverage of SSS, PAG-IBIG and
Philhealth.
After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional
Director found that private respondent was an employee of petitioner, and was entitled to his money claims. Petitioner
sought reconsideration of the Directors Order, but failed. The Acting
DOLE Secretary dismissed petitioners appeal on the ground that petitioner submitted a Deed of Assignment of Bank
Deposit instead of posting a cash or surety bond. When the matter was brought before the CA, where petitioner
claimed that it had been denied due process, it was held that petitioner was accorded due process as it had been
given the opportunity to be heard, and that the DOLE
Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on
the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730.
The Court found that there was no employer-employee relationship between petitioner and private respondent. It was
held that while the DOLE may make a determination of the existence of an employer-employee relationship, this
function could not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code,
as amended by RA 7730. The National Labor Relations Commission (NLRC) was held to be the primary agency in
determining the existence of an employer-employee relationship. This was the interpretation of the Court of the clause
in cases where the relationship of employer-employee still exists in Art. 128(b).
ISSUE: May the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to
what extent?
RULING: YES. The determination of the existence of an employer-employee relationship by the DOLE must be
respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered
nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship,
force the referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the
absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE
that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute
the existence of an employer-employee relationship.
If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the
matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee relationship
has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first
place.
The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of
competing conclusions between the DOLE and the NLRC. The prospect of competing conclusions could just as well
have been eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is
the more prudent course of action to take.
This is not to say that the determination by the DOLE is beyond question or review. Suffice it to say, there are judicial
remedies such as a petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the
findings of the DOLE.
It must also be remembered that the power of the DOLE to determine the existence of an employer-employee
relationship need not necessarily result in an affirmative finding. The DOLE may well make the determination that no
employer-employee relationship exists, thus divesting itself of jurisdiction over the case. It must not be precluded from
being able to reach its own conclusions, not by the parties, and certainly not by this Court.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination
as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power,
subject to judicial review, not review by the NLRC.
7. YMBONG v. ABS-CBN
FACTS: Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in
Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended to radio
when ABS-CBN Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner,
scriptwriter and public affairs program anchor.
Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and
scriptwriter for various radio programs aired over DYAB.
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Pursuant to a Policy issued by the ABS-CBN, Luzon, the Station Manager of DYAB, issued a Memorandum stating that
any employee/talent who wants to run for any position in the coming election will have to file a leave of absence the
moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the
entire campaign/election period.
Ymbong and Patalinghug ran in the May 1998 elections but they both lost. It was only Patalinghug who submitted a
resignation letter to ABS-CBN.
Ymbong and Patalinghug tried to come back to ABS-CBN but Luzon informed them that they cannot work there
anymore because of company policy. This was stressed even in subsequent meetings and they were told that the
company was not allowing any exceptions. Both of them filed a complaint for illegal dismissal.
ISSUES:
(1) Whether or not Ymbong and Patalinghug are considered as employees of ABS-CBN.
(2) Whether or not the Policy issued by the ABS-CBN is valid.
RULING:
(1) Yes. The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after applying
the provisions of Policy No. HR-ER-016 to him. It noted that said policy is entitled Policy on Employees Seeking
Public Office and the guidelines contained therein specifically pertain to employees and did not even mention
talents or independent contractors. It held that it is a complete turnaround on ABS-CBNs part to later argue
that Ymbong is only a radio talent or independent contractor and not its employee. By applying the subject
company policy on Ymbong, ABS-CBN had explicitly recognized him to be an employee and not merely an
independent contractor.
***Only the CAs Decision regarding this issue has been mentioned in the case. The SC did not reverse nor
even discuss this issue any further, which only implies that it upheld the CA on this matter.
(2) Yes. It has been consistently held that so long as a companys management prerogatives are exercised in good
faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the
rights of the employees under special laws or under valid agreements, this Court will uphold them. In the
instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is well within its rights to
ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so
that the confidence of the viewing and listening public in it will not be in any way eroded. Even as the law is
solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are
clearly management prerogatives. The free will of management to conduct its own business affairs to achieve
its purpose cannot be denied.
8. PROFESSIONAL SERVICES INC v. COURT OF APPEALS
FACTS: Natividad Agana was admitted at the Medical City General Hospital (Medical City) because of difficulty of
bowel movement and bloody anal discharge. Dr. Ampil diagnosed her to be suffering from cancer of the sigmoid. Dr.
Ampil, assisted by the medical staff of Medical City, performed an anterior resection surgery upon her. After the
surgery, it was found that there was a piece of gauze protruding from her vagina.
The gauze had badly infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive organ which
forced stool to excrete through the vagina. Another surgical operation was needed to remedy the situation. Thus, in
October 1984, Natividad underwent another surgery.
Natividad and her husband filed with the Regional Trial Court, Branch 96, Quezon City a complaint for damages against
PSI (owner of Medical City), Dr. Ampil and Dr. Fuentes.
ISSUE: Whether or not Dr. Ampil is considered as an employee of Medical City so as to make PSI (owner of Medical
City) solidarily liable with Dr. Ampil.
RULING: YES. An employer-employee relationship in effect exists between the Medical City and Dr.
Ampil.Consequently, both are jointly and severally liable to the Aganas.
While consultants are not, technically employees, a point which respondent hospital asserts in denying all
responsibility for the patients condition, the control exercised, the hiring, and the right to terminate consultants all
fulfill the important hallmarks of an employer-employee relationship, with the exception of the payment of wages. In
assessing whether such a relationship in fact exists, the control test is determining. Accordingly, on the basis of the
foregoing, we rule that for the purpose of allocating responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians.
The basis for holding an employer solidarily responsible for the negligence of its employee is found in Article 2180 of
the Civil Code which considers a person accountable not only for his own acts but also for those of others based on the
formers responsibility under a relationship of partia ptetas.
The Court considered the peculiar relationship between a hospital and its consultants on the bases of certain factors.
One such factor is the control test wherein the hospital exercises control in the hiring and firing of consultants, like Dr.
Ampil, and in the conduct of their work.
Even assuming that Dr. Ampil is not an employee of Medical City, but an independent contractor, still the said hospital
is liable to the Aganas. In general, a hospital is not liable for the negligence of an independent contractor-physician.
There is, however, an exception to this principle. The hospital may be liable if the physician is the ostensible agent of
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the hospital. This exception is also known as the doctrine of apparent authority. (Sometimes referred to as the
apparent or ostensible agency theory.
9. SOUTH EAST INTERNATIONAL RATTAN INC. (SEIRI ) V. JESUS COMING, MARCH 12, 2014
Jesus Coming, Control Test
FACTS: On November 3, 2003, respondent Jesus J. Coming filed a complaint for illegal dismissal, underpayment of
wages, non-payment of holiday pay, 13th month pay and service incentive leave pay, with prayer for reinstatement,
back wages, damages and attorneys fees.
Respondent alleged that he was hired by petitioners as Sizing Machine Operator. His work schedule is from 8:00 a.m.
to 5:00 p.m. Initially, his compensation was on "pakiao" basis but sometime in June 1984, it was fixed at P150.00 per
day which was paid weekly. Without any apparent reason, his employment was interrupted as he was told by
petitioners to resume work in two months time. Being an uneducated person, respondent was persuaded by the
management as well as his brother Vicente not to complain, as otherwise petitioners might decide not to call him back
for work. Nonetheless, after two months he reported back to work upon order of management and was again
dismissed on 2002 without lawful cause
J. Coming filed the complaint before the regional arbitration branch.
Petitioners denied having hired respondent asserting that:
1.

SEIRI was incorporated only in 1986, and that respondent actually worked for SEIRIs furniture suppliers
because when the company started in 1987 it was engaged purely in buying and exporting furniture and its
business operations were suspended from the last quarter of 1989 to August 1992.

2.

Respondent was not included in the list of employees submitted to the Social Security System (SSS) and he
was also not listed on the companys payroll.

3.

Respondents brother, Vicente Coming, executed an affidavit in support of petitioners position while Allan
Mayol and Faustino Apondar issued notarized certifications that respondent worked for them instead. With the
denial of petitioners that respondent was their employee, the latter submitted an affidavit signed by five
former co-workers stating that respondent was one of the pioneer employees who worked in SEIRI for almost
twenty years. In the affidavits submitted by the respondents witness, its shown that J. Coming only worked
only if he likes to- basis.

The Labor Arbiter (Carreon) ruled in favour of respondent

Petitioners appealed to the National Labor Relations Commission (NLRC) where they submitted the alleged
documents showing that respondent was not their employee together with additional affidavits. NLRC reversed the
Labor Arbiters decision.
On Appeal in the CA, the court reversed the NLRC and ruled that there existed an employer-employee
relationship between petitioners and respondent who was dismissed without just and valid cause.
Hence, this petition.
ISSUE: Whether Employer-Employee Relationship exists between SEIRI and J. Coming.
RULING: YES.
To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to
the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) the power to control the employees conduct, or the so-called "control test. In
resolving the issue of whether such relationship exists in a given case, substantial evidence that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion is sufficient. Although no
particular form of evidence is required to prove the existence of the relationship, and any competent and relevant
evidence to prove the relationship may be admitted, a finding that the relationship exists must nonetheless rest on
substantial evidence.
In applying the said test, the Supreme Court ruled:
In his decision, Labor Arbiter Carreon found that respondents work as sizing machine operator is usually
necessary and desirable to the rattan furniture business of petitioners and their failure to include
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respondent in the employment report to SSS is not conclusive proof that respondent is not their
employee. As to the affidavit of Vicente Coming, Labor Arbiter Carreon did not give weight to his statement that
respondent is not petitioners employee but that of one Faustino Apondar.
x x x As to the "control test", the following facts indubitably reveal that respondents wielded control over the work
performance of petitioner, to wit: (1) they required him to work within the company premises; (2) they obliged
petitioner to report every day of the week and tasked him to usually perform the same job; (3) they enforced the
observance of definite hours of work from 8 oclock in the morning to 5 oclock in the afternoon; (4) the mode of
payment of petitioners salary was under their discretion, at first paying him on pakiao basis and thereafter, on daily
basis; (5) they implemented company rules and regulations; (6) [Estanislao] Agbay directly paid petitioners salaries
and controlled all aspects of his employment and (7) petitioner rendered work necessary and desirable in the business
of the respondent company.
In Tan v. Lagrama, the Court held that the fact that a worker was not reported as an employee to the SSS is not
conclusive proof of the absence of employer-employee relationship. Otherwise, an employer would be rewarded for his
failure or even neglect to perform his obligation.
Nor does the fact that respondents name does not appear in the payrolls and pay envelope records submitted by
petitioners negate the existence of employer-employee relationship. For a payroll to be utilized to disprove the
employment of a person, it must contain a true and complete list of the employee. In this case, the exhibits offered by
petitioners before the NLRC consisting of copies of payrolls and pay earnings records are only for the years 1999 and
2000; they do not cover the entire 18-year period during which respondent supposedly worked for SEIRI.
Even assuming that the respondents services were not regular and that he works only if he wants to, these do
not foreclose respondents regular or full-time employment with SEIRI. In effect, petitioners suggest that
respondent was employed by SEIRIs suppliers, Mayol and Apondar but no competent proof was presented as to the
latters status as independent contractors.
In any controversy between a laborer and his master, doubts reasonably arising from the evidence are
resolved in favor of the laborer.As a regular employee, respondent enjoys the right to security of tenure under
Article 279 of the Labor Code and may only be dismissed for a just43 or authorized44 cause, otherwise the dismissal
becomes illegal.
10. TENAZAS ET. AL. V. R. VILLEGAS TAXI TRANSPORT, APRIL 2, 2014.
FACTS: This case involves three complaints filed by Bernard A. Tenazas (Tenazas), Jaime M. Francisco
(Francisco) and Isidro G. Endraca (Endraca) for illegal dismissal against R. Villegas Taxi Transport and/or Romualdo
Villegas (Romualdo) and Andy Villegas (Andy) (respondents). The cases were subsequently consolidated.
The circumstances of the dismissal of the aforementioned complainants are as follows:
1.

Tenazas, a regular driver, boundary basis, hired on October 1997, dismissed July 3, 2007. The taxi unit
assigned to him was sideswiped by another vehicle, causing a dent on the left fender near the driver seat. The
cost of repair for the damage was estimated at P500.00. Upon reporting the incident to the company, he was
scolded by respondents Romualdo and Andy and was told to leave the garage for he is already fired.

2.

Francisco, hired on April 10, 2004, dismissed June 04, 2007. His dismissal was brought about by the
companys unfounded suspicion that he was organizing a labor union.

3.

Endraca, a spare driver, boundary basis, hired on April 2000, dismissed on March 06, 2006. His dismissal was
instigated by an occasion when he fell short of the required boundary for his taxi unit. He related that before
he was dismissed, he brought his taxi unit to an auto shop for an urgent repair. He was charged the amount of
P700.00 for the repair services and the replacement parts. As a result, he was not able to meet his boundary
for the day. Upon returning to the company garage and informing the management of the incident, his drivers
license was confiscated and was told to settle the deficiency in his boundary first before his license will be
returned to him.

The respondents denied the claim filed against them and averred:
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1.

Francisco was not an employee of the company.

2.

Tenazas was never terminated by the company. They claimed that on July 3, 2007, Tenazas went to the
company garage to get his taxi unit but was informed that it is due for overhaul because of some mechanical
defects and was advised to report back by the company;

3.

As regards Endraca, the respondents alleged that they hired him as a spare driver in February 2001. They
allow him to drive a taxi unit whenever their regular driver will not be able to report for work. In July 2003,
however, Endraca stopped reporting for work without informing the company of his reason. That they could
never have terminated Endraca in March 2006 since he already stopped reporting for work as early as July
2003.

On May 30, 2008, the Labor Arbiter (LA) rendered a Decision, which pertinently states, thus:
1.

In the case of complainant Francisco, respondents categorically denied the existence of an employeremployee relationship. In this situation, the burden of proof shifts to the complainant to prove the existence of
a regular employment. Complainant Francisco failed to present evidence of regular employment available to all
regular employees, such as an employment contract, company ID, SSS, withholding tax certificates, SSS
membership and the like.

2.

In the case of complainant Endraca, respondents claim that he was only an extra driver who stopped
reporting to queue for available taxi units which he could drive. In fact, respondents offered him in their
Position Paper on record, immediate reinstatement as extra taxi driver which offer he refused.

3.

In case of Tenazas, he was told to wait while his taxi was under repair but he did not report for work after the
taxi was repaired. Respondents[,] in their Position Paper, on record likewise, offered him immediate
reinstatement, which offer he refused.

We are therefore constrained to rule that there was no illegal dismissal in the case at bar.
On appeal in NLRC: NLRC reversed the appealed decision of the LA, holding that the additional pieces of evidence
belatedly submitted by the petitioners sufficed to establish the existence of employer-employee relationship and their
illegal dismissal
On appeal in the CA: The CA agreed with the NLRCs finding that Tenazas and Endraca were employees of the
company, but ruled otherwise in the case of Francisco for failing to establish his relationship with the company. At the
outset, the CA declared that respondent Francisco failed to prove that an employer-employee relationship exists
between him and R. Transport. If there is no employer-employee relationship in the first place, the duty of R. Transport
to adhere to the labor standards provisions of the Labor Code with respect to Francisco is questionable. Although
substantial evidence is not a function of quantity but rather of quality, the peculiar environmental circumstances of the
instant case demand that something more should have been proffered. Had there been other proofs of employment,
such as Franciscos inclusion in R.R. The CA ruled that Teneza and Endraca were only entitled to reinstatement by the
respondent company.
Hence this petition.
ISSUES: 1. Whether or not employer-employee relationship exists between respondent taxi corp and
Francisco.
2. Whether Teneza and Endraca are entitled to backwages AND reinstatement.
RULING:
1. NO. It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, "the
quantum of proof necessary is substantial evidence, or such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. "[T]he burden of proof rests upon the party
who asserts the affirmative of an issue." Corollarily, as Francisco was claiming to be an employee of the respondents, it
is incumbent upon him to proffer evidence to prove the existence of said relationship.
"[I]n determining the presence or absence of an employer-employee relationship, the Court has consistently looked for
the following incidents, to wit: (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 employee on the means and methods by which the
work is accomplished. The last element, the so-called control test, is the most important element."34
There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to
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prove the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment
letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee
status.
2. The CAs order of reinstatement of Tenazas and Endraca, instead of the payment of separation pay, is also well in
accordance with prevailing jurisprudence. In Macasero v. Southern Industrial Gases Philippines, the Court reiterated,
thus:
[A]n illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are
separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the
employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either
reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.
The normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.
Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year
of service should be awarded as an alternative. The payment of separation pay is in addition to payment of
backwages.
Thus, it was a prudent call for the CA to delete the award of separation pay and order for reinstatement instead, in
accordance with the general rule stated in Article 279 of the Labor Code.
11. TONGKO V. MANUFACTURERS LIFE INSURANCE CO (MANULIFE). , NOVEMBER 7, 2008
FACTS: Manulife is a domestic corporation engaged in life insurance business. De Dios was its President and Chief
Executive Officer.
Petitioner Tongko started his professional relationship with Manulife on July 1, 1977 by virtue of a Career Agent's
Agreement2 (Agreement) he executed with Manulife.
In the Agreement, it is provided that:
It is understood and agreed that the Agent is an independent contractor and nothing contained herein
shall be construed or interpreted as creating an employer-employee relationship between the
Company and the Agent.
Sometime in 2001, when Manulife instituted manpower development programs in the regional sales management
level. Relative thereto, De Dios addressed a letter to Tongko regarding an October 18, 2001 Metro North Sales
Managers Meeting. In the letter, De Dios stated:
At earlier meetings, Kevin had presented information where evidently, your Region was the lowest performer
(on a per Manager basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the
laggards in this area.
xxxx
1. You will hire at your expense a competent assistant who can unload you of much of the routine tasks which
can be easily delegated. x x x
2. Effective immediately, Kevin and the rest of the Agency Operations will deal with the North Star
Branch (NSB) in autonomous fashion. x x x
I have decided to make this change so as to reduce your span of control and allow you to concentrate more
fully on overseeing the remaining groups under Metro North, your Central Unit and the rest of the Sales
Managers in Metro North. I will hold you solely responsible for meeting the objectives of these remaining
groups.
Subsequently, De Dios termianted Tongko's services. This prompted Tongko to file a Complaint with the NLRC against
Manulife for illegal dismissal.
In the Complaint, Tongko, in a bid to establish an employer-employee relationship, alleged that De Dios gave him
specific directives on how to manage his area of responsibility in the latter's letter dated November 6, 2001. He further
claimed that Manulife exercised control over him (as shown in the quoted portion of the letter above).
Manulife alleged that Tongko is not its employee, and that it did not exercise "control" over him. Thus,
Manulife claimed that the NLRC has no jurisdiction over the case.
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The Labor Arbiter dismissed the case.

On NLRC: NLRC reversed the same and rendered a Decision dated September 27, 2004 finding Tongko to have been
illegally dismissed.
The NLRC's First Division, while finding an employer-employee relationship between Manulife and Tongko
applying the four-fold test, held Manulife liable for illegal dismissal. It further stated that Manulife exercised control
over Tongko as evidenced by the letter (as quoted above).
Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision, finding the absence of
an employer-employee relationship between the parties and deeming the NLRC with no jurisdiction over the case. The
CA arrived at this conclusion while again applying the four-fold test. The CA found that Manulife did not
exercise control over Tongko that would render the latter an employee of Manulife.
Hence this petition.
ISSUE: Whether an employer-employee relationship existed between Manulife and Tongko.
RULING: YES. Tongko Was An Employee of Manulife
In the determination of whether an employer-employee relationship exists between two parties, this Court applies the
four-fold test to determine the existence of the elements of such relationship. In Pacific Consultants International
Asia, Inc. v. Schonfeld, the Court set out the elements of an employer-employee relationship, thus:
Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four
elements constitute the reliable yardstick: (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's conduct. It is the
so-called "control test" which constitutes the most important index of the existence of the employer-employee
relationship that is, whether the employer controls or has reserved the right to control the employee not only
as to the result of the work to be done but also as to the means and methods by which the same is to be
accomplished. Stated otherwise, an employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end to be achieved but also the means to be
used in reaching such end.14
An impasse appears to have been reached between the CA and the NLRC on the sole issue of control over an
employee's conduct. It bears clarifying that such control not only applies to the work or goal to be done but
also to the means and methods to accomplish it. 16 In Sonza v. ABS-CBN Broadcasting Corporation, we explained
that not all forms of control would establish an employer-employee relationship, to wit:
Further, not every form of control that a party reserves to himself over the conduct of the other party in
relation to the services being rendered may be accorded the effect of establishing an employer-employee
relationship. The facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In
said case, we held that:
Logically, the line should be drawn between rules that merely serve as guidelines towards
the achievement of the mutually desired result without dictating the means or methods to
be employed in attaining it, and those that control or fix the methodology and bind or
restrict the party hired to the use of such means. The first, which aim only to promote the
result, create no employer-employee relationship unlike the second, which address both
the result and the means used to achieve it.17 (Emphasis supplied.)
In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several
factors contribute to this conclusion, these are:
1.

In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that:
The Agent hereby agrees to comply with all regulations and requirements of the Company as herein
provided as well as maintain a standard of knowledge and competency in the sale of the Company's
products which satisfies those set by the Company and sufficiently meets the volume of new business
required of Production Club membership.

2.

Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance with the
regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's
products that is satisfactory to the company; and (3) compliance with a quota of new businesses.

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3.

Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of
Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which
demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was obliged to
obey and comply with the codes of conduct was not disowned by respondents.

Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's
goals.
Note: This case was reversed, in the 2011 decision, the SC ruled:
Supreme Court placed heavy significance on the application of the Civil Code and Insurance provisions on
agency. The original Agreement of Tongko with the company dictates that he is an insurance agent. No other
documentary evidence was found to support subsequent stipulations as to their relationship that would negate the
agency, and not employment, relationship on the original agreement.
It was found by the Court that Tongko declared himself as business or self-employed person in his income tax
return. In a sense, an independent contractor. This bolsters the content of the Agreement mentioned above that he
was an insurance agent in the context of the Insurance Code and the Civil Code. To the Court, this aspect of the
evidence was not considered in its original decision, which had they been given importance, would have changed the
decision as it is an admission against interest on the part of Tongko.

12. TELEVISION AND PRODUCTION EXPONENTS, INC (TAPE INC.) V. SERVANA, JANUARY 28, 2008
FACTS: TAPE is a domestic corporation engaged in the production of television programs, such as the long-running
variety program, "Eat Bulaga!". Its president is Antonio P. Tuviera (Tuviera). Respondent Roberto C. Servaa had served
as a security guard for TAPE from March 1987 until he was terminated on 3 March 2000.
Respondent filed a complaint for illegal dismissal and nonpayment of benefits against TAPE. He alleged that he was
first connected with Agro-Commercial Security Agency but was later on absorbed by TAPE as a regular company guard.
He was detailed at Broadway Centrum in Quezon City where "Eat Bulaga!" regularly staged its productions.
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. He claimed that the holiday pay, unpaid vacation and sick leave benefits and
other monetary considerations were withheld from him. He further contended that his dismissal was undertaken
without due process and violative of existing labor laws, aggravated by nonpayment of separation pay. 3
In a motion to dismiss, TAPE countered that the labor arbiter had no jurisdiction over the case in the absence
of an employer-employee relationship between the parties. Amongst TAPEs assertion is that the respondent
was an independent contractor falling under the talent group category and was working under a special arrangement
which is recognized in the industry.

Respondent for his part insisted that he was a regular employee having been engaged to perform an activity that is
necessary and desirable to TAPEs business for thirteen (13) years.

On 29 June 2001, Labor Arbiter Cauton-Barcelona declared respondent to be a regular employee of TAPE. The Labor
Arbiter relied on the nature of the work of respondent, which is securing and maintaining order in the studio, as
necessary and desirable in the usual business activity of TAPE. The Labor Arbiter also ruled that the termination was
valid on the ground of redundancy, and ordered the payment of respondents separation pay equivalent to one (1)month pay for every year of service.

On appeal, the NLRC reversed the Labor Arbiter and considered respondent a mere program employee.

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On appeal in the CA, the Appellate court reversed NLRCs decision and proclaimed that respondent is a regular
employee.

Hence this petition.

ISSUE: Whether employer-employee relationship exists between TAPE and respondent.

RULING: YES. Jurisprudence is abound with cases that recite the factors to be considered in determining the
existence of employer-employee 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. 16 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.17

The Court further observed that these factors were present in the case.

1.

First, as to the selection and engagement of the employee:

Clearly, respondent was hired by TAPE. Respondent presented his identification card to prove
that he is indeed an employee of TAPE. It has been in held that in a business establishment, an
identification card is usually provided not just as a security measure but to mainly identify the holder
thereof as a bona fide employee of the firm who issues it.

2.

Second, as to the payment of wages:

Respondent claims to have been receiving P5,444.44 as his monthly salary while TAPE prefers to
designate such amount as talent fees. Wages, as defined in the Labor Code, are remuneration or
earnings, however designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece or commission basis, or other method of calculating the same, which
is payable by an employer to an employee under a written or unwritten contract of employment for
work done or to be done, or for service rendered or to be rendered. It is beyond dispute that
respondent received a fixed amount as monthly compensation for the services he rendered to TAPE.

3.

Thirdly, as to the power of dismissal:

The Memorandum informing respondent of the discontinuance of his service proves that TAPE had the
power to dismiss respondent.

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4.

And finally, as to the power of control, which is the most important test:

Control is manifested in the bundy cards submitted by respondent in evidence. He was required to
report daily and observe definite work hours.

What is significant are the concrete objects which for the Supreme Court served as pieces of evidence for the
existence of an employer-employee relationship between the parties, namely:

(1) The identification card;

(2) The fixed amount as monthly compensation;

(3) The Memorandum of discontinuance; and

(4) The bundy cards.

Where these or similar evidences are present the conclusion is well-nigh inevitable that an employer-employee
relationship exists
The court further ruled that they cannot subscribe to private respondents conflicting theories. The theory of private
respondents that petitioner is an independent contractor runs counter to their very own allegation that petitioner is a
talent or a program employee. An independent contractor is not an employee of the employer, while a talent or
program employee is an employee. The only difference between a talent or program employee and a regular employee
is the fact that a regular employee is entitled to all the benefits that are being prayed for. This is the reason why
private respondents try to seek refuge under the concept of an independent contractor theory. For if petitioner were
indeed an independent contractor, private respondents will not be liable to pay the benefits prayed for in petitioners
complaint.

13. Encyclopedia Britannica v NLRC & Benjamin Limjoco, November 4, 1996

FACTS: Benjamin Limjoco alleged that he was a Sales Division Manager of petitioner Encyclopaedia Britannica and
was in charge of selling petitioner's products through some sales representatives. As compensation, he received
commissions from the products sold by his agents. He was also allowed to use petitioner's name, goodwill and logo. It
was, however, agreed upon that office expenses would be deducted from his commissions. Petitioner would also be
informed about appointments, promotions, and transfers of employees in his district.

On June 14, 1974, Limjoco resigned from office to pursue his private business declaring that there would be conflict of
interests. He filed a complaint against petitioner Encyclopaedia Britannica with the DOLE, claiming for non-payment of
separation pay and other benefits, and also illegal deduction from his sales commissions.

Encyclopaedia Britannica alleged that Limjoco is not their employee but an independent dealer authorized to
promote and sell its products and in return, received commissions therefrom. Limjoco did not have any salary and his
income from the petitioner company was dependent on the volume of sales accomplished. He also had his own
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separate office, financed the business expenses, and maintained his own workforce. The salaries of his secretary,
utility man, and sales representatives were chargeable to his commissions. Thus, petitioner argued that it had no
control and supervision over the complainant as to the manner and means he conducted his business operations. The
latter did not even report to the office of the petitioner and did not observe fixed office hours. Thus, there was no
employer-employee relationship.

The Labor Arbiter ruled in Limjocos favour.

On appeal, the Third Division of the NLRC affirmed the assailed decision.

Dissatisfied with the outcome of the case, Encyclopaedia now comes to us in this petition.

ISSUE: Whether the relationship is that of employer-employee or one of independent contractor

RULING: INDEPENDENT CONTRACTOR.

The NLRC ruled that there existed an employer-employee relationship and petitioner failed to disprove this finding. We
do not agree.

In determining the existence of an employer-employee relationship the following elements must be present: 1)
selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; and 4) the power to control
the employee's conduct. Of the above, control of employee's conduct is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. 3 Under the control test, an
employer-employee relationship exists where the person for whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner and means to used in reaching that end.

The fact that petitioner issued memoranda to private respondents and to other division sales managers did not prove
that petitioner had actual control over them. The different memoranda were merely guidelines on company policies
which the sales managers follow and impose on their respective agents. It should be noted that in petitioner's business
of selling encyclopedias and books, the marketing of these products was done through dealership agreements. The
sales operations were primarily conducted by independent authorized agents who did not receive regular
compensations but only commissions based on the sales of the products.

Private respondent was not an employee of the petitioner company. While it was true that the petitioner had fixed the
prices of the products for reason of uniformity and private respondent could not alter them, the latter, nevertheless,
had free rein in the means and methods for conducting the marketing operations. He selected his own personnel and
the only reason why he had to notify the petitioner about such appointments was for purpose of deducting the
employees' salaries from his commissions.

In ascertaining whether the relationship is that of employer-employee or one of independent contractor,

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each case must be determined by its own facts and all features of the relationship are to be considered.The records of
the case at bar showed that there was no such employer-employee relationship.

As stated earlier, "the element of control is absent; where a person who works for another does so more or less at his
own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the
result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee
exists.

14. Atok Big Wedge Co. Inc. v. Gison, August 2011

FACTS: Jesus P. Gison, was engaged as part-time consultant of the petitioner, Atok Big Wedge Company thorugh its
then Asst. VP and Acting Resident Manager, Rutillo A. Torres. As a consultant on retainer basis, the former assisted
the petitioners retained legal counsel with matters pertaining to the prosecution of cases against illegal surface
occupants within the area covered by the companys mineral claims. He also tasked to perform liason work with
government agencies which he said his expertise. Respondent is not required to report to its office on a regular basis,
except when occassionally requested by the management to discuss the matters which needs of his expertise as a
consultant. He is paid a retainer fee of 3,000Php a month and delivered to him either in his residence or in a local
restaurant. They have also executed a retainer agreement however was misplaced and can no longer be found. This
kind of arrangement continued on for the next eleven years. Since respondent was getting old, he requested
petitioner to cause his registration with the Social Security System but petitioner did not accede to his request
considering the former only a retainer/consultant.

Respondent herein, filed a complaint with SSS against petitioners refusal to cause his registration with the SSS. The
Resident Manager of the petitioner issued then a Memorandum advising respondent that within 30 days from receipt
thereof, petitioners services as a retainer/consultant will be terminated since his services are no longer necessary. As
a result, respondent filed a complaint for illegal dismissal, unfair labor practice, underpayment of wages, non-payment
of 13th Month pay, vacation pay and sick leave with the NLRC, Regional Arbitration Branch and Cordillera
Administrative Region against the petitioner.
The Labor Arbiter rendered a decision in favor of the petitioner ruling that there is no employer-employee
relationship and dismissed the complaint for lack of merit. An appeal was made before the NLRC but same was
dismissed and affirmed the decision of the Labor Arbiter.
Thus, a petition for review was filed under Rule 65 before the Court of Appeals. The Court of Appeals annuled and
has set aside the decision of NLRC. The CA opined that, both the Labor Arbiter and NLRC overlooked Article 280 of
the Labor Code, which distinguishes between the two kinds of employees, i.e., regular and casual employees. The
respondent is deemed a regular employee of the petitioner after the lapse of one year from his employment.
Considering also that the respondent had been performing services for the petitioner for the last 11 years entitling him
to the rights and privileges of a regular employee. The CA added that although there was an agreement between the
parties that the employment of the respondent will be only temporary, it clearly disregarded the same by repeatedly
giving petitioner several tasks to perform. Moreover, although the respondent may have waived his right to attain a
regular status when he agreed to perform these tasks on a temporary employment status, still it was the law that
recognized and considered him a regular employee after his first year of rendering service to petitioner. As such, the
waiver is ineffective.
Petitioner herein posits that CA erred in applying Article 280 of the Labor Code in determining whether there exists an
employer-employee relationship. Petitioner contends that where the existence of an employer-employee relationship is
in dispute, Article 280 of the Labor Code is inapplicable. The said article only set the distinction between a casual
employee from a regular employee for purposes of determining the rights of an employee to be entitled to certain
benefits.
ISSUE: Whether there exists an employer-employee relationship.
RULING: NO. Petition is meritorious.
Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a question of fact
and that the findings thereon by the Labor Arbiter and the NLRC shall be accorded not only respect but even finality
when supported by substantial evidence. Being a question of fact, the determination whether such a relationship exists
between petitioner and respondent was well within the province of the Labor Arbiter and the NLRC. Being supported by
substantial evidence, such determination should have been accorded great weight by the CA in resolving the issue. To
ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the four-fold
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test, to wit: (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, or the so-called "control test." The so-called "control test" is
commonly regarded as the most crucial and determinative indicator of the presence or absence of an employeremployee relationship
Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at bar. Among
other things, respondent was not required to report everyday during regular office hours of petitioner. Respondent's
monthly retainer fees were paid to him either at his residence or a local restaurant. More importantly, petitioner did
not prescribe the manner in which respondent would accomplish any of the tasks in which his expertise as a liaison
officer was needed; respondent was left alone and given the freedom to accomplish the tasks using his own means
and method. Respondent was assigned tasks to perform, but petitioner did not control the manner and methods by
which respondent performed these tasks. Verily, the absence of the element of control on the part of the petitioner
engenders a conclusion that he is not an employee of the petitioner. Moreover, the absence of the parties' retainership
agreement notwithstanding, respondent clearly admitted that petitioner hired him in a limited capacity only and that
there will be no employer-employee relationship between them.
Respondent was well aware of the agreement that he was hired merely as a liaison or consultant of the petitioner and
he agreed to perform tasks for the petitioner on a temporary employment status only. However, respondent anchors
his claim that he became a regular employee of the petitioner based on his contention that the "temporary" aspect of
his job and its "limited" nature could not have lasted for eleven years unless some time during that period, he became
a regular employee of the petitioner by continually performing services for the company.
Respondent is not an employee, much more a regular employee of petitioner. The appellate court's premise that
regular employees are those who perform activities which are desirable and necessary for the business of the
employer is not determinative in this case. In fact, any agreement may provide that one party shall render services for
and in behalf of another, no matter how necessary for the latter's business, even without being hired as an employee.
Hence,respondent's length of service and petitioner's repeated act of assigning respondent some tasks to be
performed did not result to respondent's entitlement to the rights and privileges of a regular employee.
Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still cannot
be considered as a regular employee of petitioner. Article 280 of the Labor Code, in which the lower court used to
buttress its findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar.
Indeed, the Court has ruled that said provision 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; it does not apply where the existence of an employment relationship is in dispute.It is, therefore,
erroneous on the part of the Court of Appeals to rely on Article 280 in determining whether an employer-employee
relationship exists between respondent and the petitioner.
15. DUMPIT MURILLO V. CA
FACTS: The private respondent Associated Broadcasting Company (ABC) hired petitioner Thelma Dumpit-Murillo as a
newscaster and co-anchor for Balitang-Balita, an early evening news program. Originally, the Talent Contract was for a
period of three months but it was renewed repeatedly for four years. After the expiration of the last contract, the
petitioner wrote to Mr. Javier, the Vice President of the ABC, informing him that she wants to renew her contract
subject to salary increase, but to no avail. Since then, she stopped reporting for work. A month later, petitioner sent a
demand letter to ABC demanding reinstatement to her position, payment of unpaid wages, 13 th month pay,
vacation/sick/service incentive leaves and other monetary benefits she allegedly deserves as a regular employee. ABC
replied that a check has already been processed but it will only cover the unpaid wages, excluding other claims of the
petitioner.
Petitioner filed a complaint against the ABC for illegal dismissal and non-payment of salaries but the Labor Arbiter
dismissed the same. On appeal, the NLRC reversed the previous decision and ruled in favor of the petitioner. The ABC
then elevated the case to the Court of Appeals and held that the NLRC committed grave abuse of discretion and
reversed its Decision. Hence, this petition.
ISSUE: Whether or not an employer-employee relationship was created between the petitioner and the ABC.
HELD: YES. The Court agreed with the petitioner that an employer-employee relationship was created when ABC
started to merely renew the contracts repeatedly fifteen times or for four consecutive years. The Court also reiterated
in this case the following elements in order to determine the existence of an employment relationship: (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.
In the present case, 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.
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Moreover, the Court held the Court of Appeals committed reversible error when it held that the petitioner was only a
fixed-term employee, when in fact, she is a regular employee under contemplation of law.
16. BERNARTE V. PBA
FACTS: Complainants were both invited to join the PBA as referees. First, they were made to sign contracts on a yearto-year basis, but later, changes were made on the terms of their employment. Both complainants alleged that they
were illegally dismissed because they were not allowed to renew their contract. On the other hand, respondents aver
that the complainants entered into two contracts of retainer with the PBA during year 2003. The first contract was from
January to July and the second one was for September to December. After the lapse of the said period, PBA decided not
to renew their contracts, as it has the prerogative of whether or not to renew retainer contracts.
The Labor Arbiter declared the complainants as employees of the PBA and held that they were illegally dismissed from
their work as referees. It was affirmed by the NLRC. Respondents appeal the case with the Court of Appeals, which
overturned the Decisions of both Labor Arbiter and NLRC. Hence, this petition.
ISSUE: Whether or not there was an employer-employee relationship between the complainants and the respondents.
HELD: NONE. In order to determine the existence or absence of an employer-employee relationship in this case, the
Court resorted to the element of "control test" as the most important element. The Court also made a line between
rules that merely serves as guidelines in performing ones work and those rules that control or fix the methodology
and restrict the person to the use of such means.
In the present case, once the complainants are in the playing court, they exercise their own independent judgments
based on the rules of the game, as to when and how a call or decision is to be made. The referees decide whether an
infraction was committed, and the PBA cannot overrule them once the decision is made on the playing court. The
referees are the only, absolute, and final authority on the playing court. Respondents or any of the PBA officers cannot
and do not determine which calls to make or not to make and cannot control the referee when he blows the whistle
because such authority exclusively belongs to the referees. The very nature of complainants job of officiating a
professional basketball game undoubtedly calls for freedom of control by respondents.
In addition, the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the
former. For a hired party to be considered an employee, the hiring party must have control over the means and
methods by which the hired party is to perform his work, which is absent in this case. CASE DISMISSED.
17. JARDIN V. NLRC
FACTS: Herein petitioners are taxi drivers of private respondent, Philjama International Inc., a domestic corporation
engaged in the operation of "Goodman Taxi." Petitioners used to drive the respondents taxicabs under the boundary
system in which they earned an average of P400.00 daily, with P30.00 deduction for the washing of taxicabs. Believing
that said deduction was illegal, petitioners decided to form a labor union to protect their rights and interests. Upon
learning about the petitioners plan, private respondent refused to let them drive taxicabs.
Petitioners filed a Complaint with the Labor Arbiter for unfair labor practice, illegal dismissal and illegal deduction of
washing fees, but it was dismissed for lack of merit. Upon appeal with the NLRC, it ruled in favor of the petitioners and
declared them as employees, and as such, their dismissal must be for just cause and after due process. With that, the
private respondent filed its motion for reconsideration, which was granted and held that it lacks jurisdiction over the
case as petitioners and private respondent have no employer-employee relationship. It held that the relationship of the
parties is leasehold which is covered by the Civil Code rather than the Labor Code.
ISSUE: Whether or not the relationship between taxicab owners/operators and taxicab driver under the boundary
system is that of employer-employee relationship.
HELD: YES. In a number of cases decided by the Court, it ruled that the relationship between jeepney
owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employeremployee and not of lessor-lessee. The Court explained that in the lease of chattels, the lessor loses complete control
over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible
for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise
supervision and control over the latter. The management of the business is in the owner's hands. The owner as holder
of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising
authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages
but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. We have applied by analogy the abovestated doctrine
to the relationships between bus owner/operator and bus conductor, auto-calesa owner/operator and driver, and
recently between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of private
respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual
business or trade of their employer.
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21. CHAVEZ V. NLRC

FACTS: The respondent company, Supreme Packaging, Inc., is in the business of manufacturing cartons and other
packaging materials for export and distribution. In 1984, it engaged the services of the petitioner, Pedro Chavez, as
truck driver. As such, the company furnished him with a truck and was tasked to deliver the companys products from
its factory in Bataan to its customers, mostly around Metro Manila. Said deliveries were made in accordance with a
routing slip issued by the company. Initially, the petitioner was paid the sum of P350.00 per trip and was later adjusted
to P480.00 to P900.00. In 1992, the petitioner expressed to respondent Alvin Lee, the companys plant manager, his
desire to avail himself of the benefits that the regular employee were receiving such as overtime pay, nightshift
differential pay, 13th month pay and others, but to no avail. The petitioner then filed a Complaint for Regularization
with the Regional Arbitration of the NLRC, but before the case could be heard, the company terminated the services of
the petitioner. With that, the petitioner filed his amended complaint alleging that he was illegally dismissed, and that
there was an unfair labor practice and non-payment of overtime pay, nightshift differential pay, 13 th month pay, among
others. The respondents, on the other hand, merely denied the existence of an employer-employee relationship
between it and the petitioner and averred that the latter was an independent contractor, as evidenced by its Contract
of Service.
The Labor Arbiter rendered its Decision finding the company guilty of illegal dismissal and held that the petitioner was
a regular employee, it further declared the Contract of Service null and void as it constituted a circumvention of the
constitutional provision affording full protection to labor and security of tenure. The company interposed an appeal
with the NLRC which affirmed in toto the Decision of the Labor Arbiter. However, the company sought another
reconsideration with the NLRC and by this time, it reversed its decision and held that no employer-employee
relationship existed between the company and the petitioner.
ISSUE: Whether there existed an employer-employee relationship between the respondent company and the
petitioner
HELD: YES. The Court ruled that all the elements in order to determine the existence of an employment relationship
are present in this case.
First, undeniably, it was the respondents who engaged the services of the petitioner without the intervention of a third
party. Second, as to payment of wages, it is not significant if the petitioner is being paid on a per trip basis, it is merely
a method of computing compensation and not a basis for determining the existence or absence of employer-employee
relationship. Interestingly, the respondents did not present the payroll to support their claim that the petitioner was
not their employee, raising speculations whether this omission proves that its presentation would be adverse to their
case. Third, the respondents power to dismiss the petitioner was inherent in the fact that they engaged the services of
the petitioner as truck driver. And lastly, as the most important element, a careful review of the records showed that
the petitioner performed his work as a truck driver under the respondents supervision and control. The companys
right of control was manifested by these attending circumstances: (1) The truck driven by the petitioner belonged to
respondent company; (2) There was an express instruction from the respondents that the truck shall be used
exclusively to deliver respondent companys goods; (3) Respondents directed the petitioner, after completion of each
delivery, to park the truck in either of two specific places only (at its office in Metro Manila at 2320 Osmea Street,
Makati City or at BEPZ, Mariveles, Bataan); and (4) Respondents determined how, where and when the petitioner
would perform his task by issuing to him gate passes and routing slips. These circumstances, to the Courts mind,
prove that the respondents exercised control over the means and methods by which the petitioner accomplished his
work as truck driver of the respondent company.
Notwithstanding the Contract of Service, it was established that an employer-employee relationship between the
respondent company and the petitioner existed. It bears stressing that its existence cannot be negated by expressly
repudiating it in a contract and providing therein that the employee is an independent contractor when, as in this case,
the facts clearly show otherwise.
22. COCA-COLA BOTTLERS INC V. CLIMACO
FACTS: Respondent is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc. by virtue of a
Retainer Agreement which started in 1988 and was renewed annually until 1993. Before the expiration of the
Agreement, respondent was already making inquiries regarding his employment status with the company. He even
inquired from the management of the company whether it was agreeable to recognize him as a regular employee but
the management refused to do so. The respondent then filed a Complaint before the NLRC seeking recognition as a
regular employee and prayed for the payment of all benefits of a regular employee. While the complaint was pending,
the respondent received a letter from the petitioner concluding their Retainership Agreement effective thirty (30) days
from receipt thereof. This prompted respondent to file a complaint for illegal dismissal against the company.
In its Decision, the Labor Arbiter found that the company lacked the power of control over respondents performance of
his duties, and recognized as valid the Retainer Agreement between the parties. Respondent appealed the said
Decision with the NLRC but it was dismissed for lack of merit. Respondent then filed a petition for review with the Court
of Appeals, which ruled in favor to him. Hence, this petition.
ISSUE: Whether or not an employer-employee relationship existed between the parties
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HELD: NO. The Court, in adhering to the four-fold test, agreed with the finding of the Labor Arbiter and the NLRC that
the circumstances of this case show that no employer-employee relationship existed between the parties.
The Court found that the company lacks the power of control over the performance by respondent of his duties. The
Comprehensive Medical Plan, which contains the respondents objectives, duties and obligations, does not tell
respondent "how to conduct his physical examination, how to immunize, or how to diagnose and treat his patients,
employees of company, in each case." In effect, this Plan only provides guidelines in order to ensure that the end
result was achieved, but it does not control the means and methods by which respondent performs his assigned tasks.
Moreover, it is also held that the provision in the Retainer Agreement that respondent was on call during emergency
cases does not make him a regular employee. Respondent does not dispute the fact that outside of the two (2) hours
that he is required to be at companys premises, he is not at all further required to just sit around in the premises and
wait for an emergency to occur so as to enable him from using such hours for his own benefit and advantage. The
schedule of work and the requirement to be on call for emergency cases do not amount to such control, but are
necessary incidents to the Retainership Agreement.
The Court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the employment of respondent
as a retained physician of petitionercompany and upholds the validity of the Retainership Agreement which clearly
stated that no employer-employee relationship existed between the parties.
23. GABRIEL V. BILON
FACTS: Respondents were regular drivers of Gabriel Jeepney, owned by the late Melencio Gabriel. Respondents are
driving their respective units under a boundary system of P400.00. However, they are required to pay additional
P55.00 per day for police protection fee, washing fee, deposit and garage fee. Respondents aver that on 30 April 1995,
the petitioner did not allow them to drive jeepney units. This prompted them to file their separate complaints with the
NLRC for illegal dismissal, illegal deductions, and separation pay against petitioner.
ISSUE: Whether or not an employer-employee relationship existed between the parties
HELD: NO. The Court reiterated its own Decision held in the case of Martinez v. National Labor Relations Commission,
citing National Labor Union v. Dinglasan, where it ruled that:
The relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of
employer-employee and not of lessor-lessee because in the lease of chattels the lessor loses complete control over the
chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the
damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercises supervision
and control over the latter. The fact that the drivers do not receive fixed wages but get only that in excess of the socalled "boundarythat they pay to the owner/operator is not sufficient to withdraw the relationship between them from
that of employer and employee. Thus, private respondents were employees because they had been engaged to
perform activities which were usually necessary or desirable in the usual business or trade of the employer.
24. Felix v. Buenaseda, January 7, 1995
FACTS: After passing the Physician's Licensure Examinations given by the Professional Regulation Commission in June
of 1979, petitioner, Dr. Alfredo B. Felix, joined the National Center for Mental Health (then the National Mental Hospital)
on May 26, 1980 as a Resident Physician. In August of 1983, he was promoted to the position of Senior Resident
Physician 6 a position he held until the Ministry of Health reorganized the National Center for Mental Health (NCMH) in
January of 1988, pursuant to Executive Order No. 119. Under the reorganization, petitioner was appointed to the
position of Senior Resident Physician in a temporary capacity immediately after he and other employees of the NCMH
allegedly tendered their courtesy resignations to the Secretary of Health. 7 In August of 1988, petitioner was promoted
to the position of Medical Specialist I (Temporary Status), which position was renewed the following year
In 1988, the Department of Health issued Department Order No. 347. Specifically, Department Order No. 347 provided
that specialists working in various hospitals and branches of the Department of Health be recognized as "Fellows" of
their respective specialty societies and/or "Diplomates" of their specialty boards or both. The Order was issued for the
purpose of upgrading the quality of specialties in DOH hospitals by requiring them to pass rigorous theoretical and
clinical (bedside) examinations given by recognized specialty boards, in keeping up with international standards of
medical practice. Secretary of Health Alfredo Bengzon issued Department Order No. 347 providing for an extension of
appointments of Medical Specialist positions in cases where the termination of medical specialist who failed to meet
the requirement for board certification might result in the disruption of hospital services.
Petitioner was one of the hundreds of government medical specialist who would have been adversely affected by
Department Order No. 347 since he was not yet accredited by the Psychiatry Specialty Board. . On August 20, 1991,
after reviewing petitioner's service record and performance, the Medical Credentials Committee of the National Center
for Mental Health recommended non-renewal of his appointment as Medical Specialist I, informing him of its decision
on August 22, 1991. He was, however, allowed to continue in the service, and receive his salary, allowances and other
benefits even after being informed of the termination of his appointment.
An emergency meeting of the Chiefs of Service was held to discuss, among other matters, the petitioner's case. In the
said meeting Dr. Vismindo de Grecia, petitioner's immediate supervisor, pointed out petitioner's poor performance,
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frequent tardiness and inflexibility as among the factors responsible for the recommendation not to renew his
appointment. There was and the overwhelming concensus was for non-renewal. Consequently, in a memorandum
dated March 25, 1992 petitioner was advised by hospital authorities to vacate his cottage since he was no longer with
said memorandum petitioner filed a petition with the Merit System Protection Board (MSPB) complaining about the
alleged harassment by respondents and questioning the non-renewal of his appointment.
The Board finds as baseless complainant's allegation of harassment. It should be noted that the subsistence, quarters
and laundry benefits provided to the Complainant were in connection with his employment with the NCMH. Now that
his employment ties with the said agency are severed, he eventually loses his right to the said benefits. Hence, the
Hospital Management has the right to take steps to prevent him from the continuous enjoyment thereof, including the
occupancy of the said cottage, after his cessation form office. In sum, the actuations of Dr. Buenaseda and Lt. Col.
Balez are not shown to have been tainted with any legal infirmity, thus rendering as baseless, this instant complaint.
ISSUE: Whether or not the petitioner's temporary appointment after the reorganization pursuant to E.O. No. 119 were
valid and did not violate his constitutional right of security of tenure
RULING: YES.
A residency or resident physician position in a medical specialty is never a permanent one. Residency connotes
training and temporary status. It is the step taken by a physician right after post-graduate internship (and after
hurdling the Medical Licensure Examinations) prior to his recognition as a specialist or sub-specialist in a given field.
A physician who desires to specialize in Cardiology takes a required three-year accredited residency in Internal
Medicine (four years in DOH hospitals) and moves on to a two or three-year fellowship or residency in Cardiology
before he is allowed to take the specialty examinations given by the appropriate accrediting college. In a similar
manner, the accredited Psychiatrist goes through the same stepladder process which culminates in his recognition as a
fellow or diplomate (or both) of the Psychiatry Specialty Board. This upward movement from residency to specialist
rank, institutionalized in the residency training process, guarantees minimum standards and skills and ensures that the
physician claiming to be a specialist will not be set loose on the community without the basic knowledge and skills of
his specialty. Because acceptance and promotion requirements are stringent, competitive, and based on merit.
acceptance to a first year residency program is no guaranty that the physician will complete the program. Attribution
rates are high. Some programs are pyramidal. Promotion to the next post-graduate year is based on merit and
performance determined by periodic evaluations and examinations of knowledge, skills and bedside manner. Under
this system, residents, specialty those in university teaching hospitals 18 enjoy their right to security of tenure only to
the extent that they periodically make the grade, making the situation quite unique as far as physicians undergoing
post-graduate residencies and fellowships are concerned. While physicians (or consultants) of specialist rank are not
subject to the same stringent evaluation procedures, specialty societies require continuing education as a requirement
for accreditation for good standing, in addition to peer review processes based on performance, mortality and
morbidity audits, feedback from residents, interns and medical students and research output. The nature of the
contracts of resident physicians meet traditional tests for determining employer-employee relationships, but because
the focus of residency is training, they are neither here nor there. Moreover, stringent standards and requirements for
renewal of specialist-rank positions or for promotion to the next post-graduate residency year are necessary because
lives are ultimately at stake. Petitioner's insistence on being reverted back to the status quo prior to the
reorganizations made pursuant to Executive Order No. 119 would therefore be akin to a college student asking to be
sent back to high school and staying there. From the position of senior resident physician, which he held at the time of
the government reorganization, the next logical step in the stepladder process was obviously his promotion to the rank
of Medical Specialist I, a position which he apparently accepted not only because of the increase in salary and rank but
because of the prestige and status which the promotion conferred upon him in the medical community. It bears
emphasis that at the time of petitioner's promotion to the position of Medical Specialist I (temporary) in August of
1988, no objection was raised by him about the change of position or the temporary nature of designation.
We lay stress to the fact that petitioner made no attempt to oppose earlier renewals of his temporary Specialist I
contracts in 1989 and 1990, clearly demonstrating his acquiescence to if not his unqualified acceptance of the
promotion (albeit of a temporary nature) made in 1988. Whatever objections petitioner had against the earlier change
from the status of permanent senior resident physician to temporary senior physician were neither pursued nor
mentioned at or after his designation as Medical Specialist I (Temporary). He is therefore estopped from insisting upon
a right or claim which he had plainly abandoned when he, from all indications, enthusiastically accepted the
promotion. His negligence to assert his claim within a reasonable time, coupled with his failure to repudiate his
promotion to a temporary position, warrants a presumption, in the words of this Court in Tijam vs. Sibonghanoy, that
he "either abandoned (his claim) or declined to assert it."
25. Autobus Transport v. Bautista
FACTS: Since 24 May 1995, respondent Antonio Bautista has been employed by petitioner Auto Bus Transport
Systems, Inc. (Autobus), as driver-conductor. He was paid on commission basis, seven percent (7%) of the total gross
income per travel, on a twice a month basis.
On 03 January 2000, while respondent was driving Autobus No. 114, he driving accidentally bumped the rear portion of
Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving any warning. Respondent
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averred that the accident happened because he was compelled by the management to go back to Roxas, Isabela,
although he had not slept for almost twenty-four (24) hours, as he had just arrived in Manila from Roxas, Isabela. He
further alleged that he was not allowed to work until he fully paid the amount of P75,551.50, representing thirty
percent (30%) of the cost of repair of the damaged buses and that despite respondents pleas for reconsideration, the
same was ignored by management. After a month, management sent him a letter of termination. Thus, respondent
instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13 th month pay and service incentive
leave pay against Autobus. Petitioner, on the other hand, maintained that respondents employment was replete with
offenses involving reckless imprudence, gross negligence, and dishonesty.
Labor Arbiter Monroe C. Tabingan promulgated a Decision which dismissed such complaint but it ordered Autobus to
pay Bautista his 13th month pay and SIL. When appealed, the NLRC rendered its decision basing on the RRI
implementing PD851, Sec 3. It modified the LAs decision by deleting the award of 13 th month pay and by maintaining
the award of the SIL pay. Upon appeal by the Petitioner to the CA, the latter affirmed the NLRC decision.
ISSUES: [KABIT-KABIT TALAGA MGA ISSUES NITO. SORRY, GUYS]
1.

2.

Whether or not respondent is entitled to service incentive leave

a.

resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is a
field personnel.

b.

whether or not the employees time and performance are constantly supervised by the employer.;

Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code, as amended, is
applicable to respondents claim of service incentive leave pay
a.

when does the cause of action for money claims accrue in order to determine the reckoning date of the
three-year prescriptive period..

RULING:
1. YES. The disposition of the first issue revolves around the proper interpretation of Article 95 of the Labor Code vis-vis Section 1(D), Rule V, Book III of the Implementing Rules and Regulations of the Labor Code, which provides:
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE: (a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of five days with pay.
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. This rule shall apply to all employees except:

(d) 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; . . .
The grant of service incentive leave has been delimited by the Implementing Rules and Regulations of the Labor Code
to apply only to those employees not explicitly excluded by Section 1 of Rule V. According to the Implementing Rules,
Service Incentive Leave shall not apply to employees classified as "field personnel." The phrase "other employees
whose performance is unsupervised by the employer" must not be understood as a separate classification of
employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the
field cannot be determined with reasonable certainty." The same is true with respect to the phrase "those who are
engaged on task or contract basis, purely commission basis." Said phrase should be related with "field personnel,"
applying the rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular
terms that they follow.9 Hence, employees engaged on task or contract basis or paid on purely commission basis are
not automatically exempted from the grant of service incentive leave, unless, they fall under the classification of field
personnel. Therefore, petitioners contention that respondent is not entitled to the grant of service incentive leave just
because he was paid on purely commission basis is misplaced.
What must be ascertained in order to resolve the issue of propriety of the grant of service incentive
leave to respondent is whether or not he is a field personnel.
According to Article 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. As a general rule, [field personnel] are those
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whose performance of their job/service is not supervised by the employer or his representative, the workplace being
away from the principal office and whose hours and days of work cannot be determined with reasonable certainty;
hence, they are paid specific amount for rendering specific service or performing specific work. If required to be at
specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that
they are performing work away from the principal office of the employee. [Emphasis ours]
As discussed above, field personnel are those who regularly perform their duties away from the principal place of
business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.
Thus, in order to conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of
work in the field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made
as to whether or not the employees time and performance are constantly supervised by the employer.
As observed by the Labor Arbiter and concurred in by the Court of Appeals: It is of judicial notice that along the routes
that are plied by these bus companies, there are its inspectors assigned at strategic places who board the bus and
inspect the passengers, the punched tickets, and the conductors reports. There is also the mandatory once-a-week
car barn or shop day, where the bus is regularly checked as to its mechanical, electrical, and hydraulic aspects,
whether or not there are problems thereon as reported by the driver and/or conductor. They too, must be at specific
place as [sic] specified time, as they generally observe prompt departure and arrival from their point of origin to their
point of destination. In each and every depot, there is always the Dispatcher whose function is precisely to see to it
that the bus and its crew leave the premises at specific times and arrive at the estimated proper time. These, are
present in the case at bar. The driver, the complainant herein, was therefore under constant supervision while in the
performance of this work. He cannot be considered a field personnel.
2. Article 291 of the Labor Code states that all money claims arising from employer-employee relationship shall be
filed within three (3) years from the time the cause of action accrued; otherwise, they shall be forever barred.
In the application of this section of the Labor Code, the pivotal question to be answered is when does the cause of
action for money claims accrue in order to determine the reckoning date of the three-year prescriptive
period. To properly construe Article 291 of the Labor Code, it is essential to ascertain the time when the third element
of a cause of action transpired. Stated differently, in the computation of the three-year prescriptive period, a
determination must be made as to the period when the act constituting a violation of the workers right to the benefits
being claimed was committed. For if the cause of action accrued more than three (3) years before the filing of the
money claim, said cause of action has already prescribed in accordance with Article 291.
Consequently, in cases of nonpayment of allowances and other monetary benefits, if it is established that the benefits
being claimed have been withheld from the employee for a period longer than three (3) years, the amount pertaining
to the period beyond the three-year prescriptive period is therefore barred by prescription. The amount that can only
be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years
before the filing of the complaint. It is essential at this point, however, to recognize that the service incentive leave is a
curious animal in relation to other benefits granted by the law to every employee. In the case of service incentive
leave, the employee may choose to either use his leave credits or commute it to its monetary equivalent if not
exhausted at the end of the year.15 Furthermore, if the employee entitled to service incentive leave does not use or
commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued
service incentive leave.
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. The
above construal of Art. 291, vis--vis the rules on service incentive leave, is in keeping with the rudimentary principle
that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the
workingmans welfare should be the primordial and paramount consideration
In the case at bar, respondent had not made use of his service incentive leave nor demanded for its commutation until
his employment was terminated by petitioner. Neither did petitioner compensate his accumulated service incentive
leave pay at the time of his dismissal. It was only upon his filing of a complaint for illegal dismissal, one month from
the time of his dismissal, that respondent demanded from his former employer commutation of his accumulated leave
credits. His cause of action to claim the payment of his accumulated service incentive leave thus accrued from the
time when his employer dismissed him and failed to pay his accumulated leave credits. Therefore, the prescriptive
period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to
compensate his accumulated service incentive leave pay at the time of his dismissal. Since respondent had filed his
money claim after only one month from the time of his dismissal, necessarily, his money claim was filed within the
prescriptive period provided for by Article 291 of the Labor Code.
26. David v. Macasio, July 4, 2014.
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FACTS: In January 2009, Macasio filed before the LA a complaint7 against petitioner Ariel L. David, doing business
under the name and style "Yiels Hog Dealer," for non-payment of overtime pay, holiday pay and 13th month pay. He
alleged that that he had been working as a butcher for David since January 6, 1995. Macasio claimed that David
exercised effective control and supervision over his work, pointing out that David: (1) set the work day, reporting time
and hogs to be chopped, as well as the manner by which he was to perform his work; (2) daily paid his salary of
P700.00, which was increased from P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005; and (3) approved and
disapproved his leaves. Macasio added that David owned the hogs delivered for chopping, as well as the work tools
and implements; the latter also rented the workplace. Macasio further claimed that David employs about twenty-five
(25) butchers and delivery drivers.
In his defense,10 David claimed that he started his hog dealer business in 2005 and that he only has ten employees.
He alleged that he hired Macasio as a butcher or chopper on "pakyaw" or task basis who is, therefore, not entitled to
overtime pay, holiday pay and 13th month pay pursuant to the provisions of the Implementing Rules and Regulations
(IRR) of the Labor Code. David pointed out that Macasio: (1) usually starts his work at 10:00 p.m. and ends at 2:00
a.m. of the following day or earlier, depending on the volume of the delivered hogs; (2) received the fixed amount of
P700.00 per engagement, regardless of the actual number of hours that he spent chopping the delivered hogs; and (3)
was not engaged to report for work and, accordingly, did not receive any fee when no hogs were delivered.
In the April 30, 2009 decision,15 the LA dismissed Macasios complaint for lack of merit. The LA gave credence to
Davids claim that he engaged Macasio on "pakyaw" or task basis. It concluded that that as Macasio was engaged on
"pakyaw" or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay. Upon appeal, the NLRC
affirmed the LA ruling. When Macasio appealed to the CA, the said court partly granted Macasios certiorari petition
and reversed the NLRCs ruling for having been rendered with grave abuse of discretion.
While the CA agreed with the LAand the NLRC that Macasio was a task basis employee, it nevertheless found Macasio
entitled to his monetary claims following the doctrine laid down in Serrano v. Severino Santos Transit. It explained that
as as a task basis employee, Macasio is excluded from the coverage of holiday, SIL and 13th month pay only if he is
likewise a "field personnel." As defined by the Labor Code, a "field personnel" is one who performs the work away from
the office or place of work and whose regular work hours cannot be determined with reasonable certainty. In Macasios
case, the elements that characterize a "field personnel" are evidently lacking as he had been working as a butcher at
Davids "Yiels Hog Dealer" business in Sta. Mesa, Manila under Davids supervision and control, and for a fixed working
schedule that starts at 10:00 p.m. Accordingly, the CA awarded Macasios claim for holiday, SIL and 13th month pay
for three years, with 10% attorneys fees on the total monetary award.
ISSUE:
1.

Whether or not the presence of employer-employee relationship between David and Macasio exists
a.

Whether or not, Macasio, a worker who is engaged on pakyaw or task basis is entitled to holiday, SIL
and 13th month pay

RULING: YES. Engagement on "pakyaw" or task basis does not characterize the relationship that may exist between
the parties. Employing the control test, we find that such a relationship exist in the present case. Even a factual review
shows that Macasio is Davids employee.
To determine the existence of an employer-employee relationship, four elements generally need to be considered,
namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and
(4) the power to control the employees conduct. These elements or indicators comprise the so-called "four-fold" test
of employment relationship. Macasios relationship with David satisfies this test.
First, David engaged the services of Macasio, thus satisfying the element of "selection and engagement of the
employee." David categorically confirmed this fact when, in his "Sinumpaang Salaysay," he stated that "nag apply po
siya sa akin at kinuha ko siya na chopper[.]" Second, David paid Macasios wages.Both David and Macasio
categorically stated in their respective pleadings before the lower tribunals and even before this Court that the former
had been paying the latter P700.00 each day after the latter had finished the days task. Third, David had been
setting the day and time when Macasio should report for work. This power to determine the work schedule obviously
implies power of control. And fourth, David had the right and power to control and supervise Macasios work as to the
means and methods of performing it. In addition to setting the day and time when Macasio should report for work, the
established facts show that David rents the place where Macasio had been performing his tasks. Moreover, Macasio
would leave the workplace only after he had finished chopping all of the hog meats given to him for the days task.
Under this overall setup, all those working for David, including Macasio, could naturally be expected to observe certain
rules and requirements and David would necessarily exercise some degree of control as the chopping of the hog meats
would be subject to his specifications. Also, since Macasio performed his tasks at Davids workplace, David could easily
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exercise control and supervision over the former. Accordingly, whether or not David actually exercised this right or
power to control is beside the point as the law simply requires the existence of this power to control 4243 or, as in this
case, the existence of the right and opportunity to control and supervise Macasio. In sum, the totality of the
surrounding circumstances of the present case sufficiently points to an employer-employee relationship existing
between David and Macasio.
YES. Macasio is engaged on "pakyaw" or task basis, and is entitled to holiday, 13 th month and SIL pay.
PAKYAW OR TASK BASIS ISSUE: A distinguishing characteristic of "pakyaw" or task basis engagement, as opposed
to straight-hour wage payment, is the non-consideration of the time spent in working. In a task-basis work, the
emphasis is on the task itself, in the sense that payment is reckoned in terms of completion of the work, not in terms
of the number of time spent in the completion of work.45 Once the work or task is completed, the worker receives a
fixed amount as wage, without regard to the standard measurements of time generally used in pay computation.
In Macasios case, the established facts show that he would usually start his work at 10:00 p.m. Thereafter, regardless
of the total hours that he spent at the workplace or of the total number of the hogs assigned to him for chopping,
Macasio would receive the fixed amount of P700.00 once he had completed his task. Clearly, these circumstances
show a "pakyaw" or task basis engagement that all three tribunals uniformly found. In sum, the existence of
employment relationship between the parties is determined by applying the "four-fold" test; engagement on "pakyaw"
or task basis does not determine the parties relationship as it is simply a method of pay computation. Accordingly,
Macasio is Davids employee, albeit engaged on "pakyaw" or task basis.
ENTITLEMENT TO 13TH MONTH, HOLIDAY, AND SIL PAY ISSUE: To resolve these issues, we need tore-visit the
provisions involved.
Provisions governing SIL and holiday pay: Among the Title I provisions are the provisions on holiday pay (under
Article 94 of the Labor Code) and SIL pay (under Article 95 of the Labor Code). Under Article 82,"field personnel" on
one hand and "workers who are paid by results" on the other hand, are not covered by the Title I provisions. The
wordings of Article82 of the Labor Code additionally categorize workers "paid by results" and "field personnel" as
separate and distinct types of employees who are exempted from the Title I provisions of the Labor Code.
Under these provisions, the general rule is that holiday and SIL pay provisions cover all employees. To be excluded
from their coverage, an employee must be one of those that these provisions expressly exempt, strictly in accordance
with the exemption. Under the IRR, exemption from the coverage of holiday and SIL pay refer to "field personnel and
other employees whose time and performance is unsupervised by the employer including those who are engaged on
task or contract basis[.]" Note that unlike Article 82 of the Labor Code, the IRR on holiday and SIL pay do not exclude
employees "engaged on task basis" as a separate and distinct category from employees classified as "field personnel."
Rather, these employees are altogether merged into one classification of exempted employees. Because of this
difference, it may be argued that the Labor Code may be interpreted to mean that those who are engaged on task
basis, per se, are excluded from the SIL and holiday payment since this is what the Labor Code provisions, in contrast
with the IRR, strongly suggest.
In Serrano, the Court, applying the rule on ejusdem generis50 declared that "employees engaged on task or contract
basis xxx are not automatically exempted from the grant of service incentive leave, unless, they fall under the
classification of field personnel."51 The Court explained that the phrase "including those who are engaged on task or
contract basis, purely commission basis" found in Section 1(d), Rule V of Book III of the IRR should not be understood
as a separate classification of employees to which SIL shall not be granted. Rather, as with its preceding phrase "other employees whose performance is unsupervised by the employer" - the phrase "including those who are
engaged on task or contract basis" serves to amplify the interpretation of the Labor Code definition of "field personnel"
as those "whose actual hours of work in the field cannot be determined with reasonable certainty."
Entitlement to holiday pay: In short, in determining whether workers engaged on "pakyaw" or task basis" is entitled
to holiday and SIL pay, the presence (or absence) of employer supervision as regards the workers time and
performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is
entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94
(holiday pay) and Article95 (SIL pay) of the Labor Code. However, if the worker engaged on pakyaw or task basis also
falls within the meaning of "field personnel" under the law, then he is not entitled to these monetary benefits.
Macasio does not fall under the classification of "field personnel"
Entitlement to 13th month pay: The governing law on 13th month pay is PD No. 851. As with holiday and SIL pay,
13th month pay benefits generally cover all employees; an employee must be one of those expressly enumerated to
be exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 851 enumerates the exemptions from the
coverage of 13th month pay benefits. Under Section 3(e), "employers of those who are paid on xxx task basis, and
those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the
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performance thereof" are exempted. Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of
the Rules and Regulations Implementing PD No. 851 exempts employees "paid on task basis" without any reference to
"field personnel." This could only mean that insofar as payment of the 13th month pay is concerned, the law did not
intend to qualify the exemption from its coverage with the requirement that the task worker be a "field personnel" at
the same time.
28. Tenazas et. al. v. R. Villegas Taxi Transport, April 2, 2014.
FACTS: Bernard A. Tenazas (Tenazas) and Jaime M. Francisco (Francisco) filed a complaint for illegal dismissal against
R. Villegas Taxi Transport and/or Romualdo Villegas (Romualdo) and Andy Villegas (Andy), respondents. At that time, a
similar case had already been filed by Isidro G. Endraca (Endraca) against the same respondents. The two (2) cases
were subsequently consolidated.
Tenazas alleged that on July 1, 2007, the taxi unit assigned to him was sideswiped by another vehicle, causing a dent
on the left fender near the driver seat. Upon reporting the incident to the company, he was scolded by respondents
Romualdo and Andy and was told to leave the garage for he is already fired. Despite the warning, Tenazas reported for
work on the following day but was told that he can no longer drive any of the companys units as he is already fired.
Francisco, on the other hand, averred that his dismissal was brought about by the companys unfounded suspicion
that he was organizing a labor union. He was instantaneously terminated, without the benefit of procedural due
process. Endraca, for his part, alleged that his dismissal was instigated by an occasion when he fell short of the
required boundary for his taxi unit. He related that before he was dismissed, he brought his taxi unit to an auto shop
for an urgent repair. He was charged the amount of P700.00 for the repair services and the replacement parts. As a
result, he was not able to meet his boundary for the day. Upon returning to the company garage and informing the
management of the incident, his drivers license was confiscated and was told to settle the deficiency in his boundary
first before his license will be returned to him. He was no longer allowed to drive a taxi unit despite his persistent
pleas.
For their part, the respondents admitted that Tenazas and Endraca were employees of the company, the former being
a regular driver and the latter a spare driver. The respondents, however, denied that Francisco was an employee of the
company or that he was able to drive one of the companys units at any point in time.
LAs RULING: DISMISSED FOR LACK OF MERIT.
In the case of complainant Jaime Francisco, respondents categorically denied the existence of an employer-employee
relationship. In this situation, the burden of proof shifts to the complainant to prove the existence of a regular
employment. Complainant Francisco failed to present evidence of regular employment available to all regular
employees, such as an employment contract, company ID, SSS, withholding tax certificates, SSS membership and the
like.
In the case of complainant Isidro Endraca, respondents claim that he was only an extra driver who stopped reporting
to queue for available taxi units which he could drive. In fact, respondents offered him in their Position Paper on record,
immediate reinstatement as extra taxi driver which offer he refused.
In case of Bernard Tenazas, he was told to wait while his taxi was under repair but he did not report for work after
the taxi was repaired. Respondents[,] in their Position Paper, on record likewise, offered him immediate reinstatement,
which offer he refused.
NLRCs RULING: REVERSED LAs DECISION
The NLRC rendered a Decision, reversing the appealed decision of the LA, holding that the additional pieces of
evidence belatedly submitted by the petitioners sufficed to establish the existence of employer-employee relationship
and their illegal dismissal.
CAs RULING: AFFIRMED WITH MODIFICATION THE NLRSS DECISION
The CA rendered a Decision, affirming with modification the Decision of the NLRC. The CA agreed with the NLRCs
finding that Tenazas and Endraca were employees of the company, but ruled otherwise in the case of Francisco for
failing to establish his relationship with the company. It also deleted the award of separation pay and ordered for
reinstatement of Tenazas and Endraca.
ISSUE:
1. Whether or not there exists an employer employee relationship
2. Whether or not there was an illegal dismissal
RULING:
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1. Yes as to Tenazas and Endraca, but No as to Francisco. Since it was admitted by the respondents that
Tenazas and Endraca were their employees. However, as regards to Francisco, the SC ruled that:
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, "the quantum of
proof necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion." "[T]he burden of proof rests upon the party who asserts the affirmative of an
issue." Corollarily, as Francisco was claiming to be an employee of the respondents, it is incumbent upon him to proffer
evidence to prove the existence of said relationship.
"[I]n determining the presence or absence of an employer-employee relationship, the Court has consistently looked for
the following incidents, to wit: (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 employee on the means and methods by which the
work is accomplished. The last element, the so-called control test, is the most important element."34 There is no hard
and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to prove the
relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or
employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status.35
In this case, however, Francisco failed to present any proof substantial enough to establish his relationship with the
respondents. He failed to present documentary evidence like attendance logbook, payroll, SSS record or any personnel
file that could somehow depict his status as an employee. Anent his claim that he was not issued with employment
records, he could have, at least, produced his social security records which state his contributions, name and address
of his employer, as his co-petitioner Tenazas did. He could have also presented testimonial evidence showing the
respondents exercise of control over the means and methods by which he undertakes his work. Here, Francisco simply
relied on his allegation that he was an employee of the company without any other evidence supporting his claim.
Unfortunately for him, a mere allegation in the position paper is not tantamount to evidence. Bereft of any evidence,
the CA correctly ruled that Francisco could not be considered an employee of the respondents.
2. NO, as to Tenazas and Endraca, NO as to Francisco. Since Francisco is not considered an employee of the
respondents. However, as to Tenazas and Endraca, the SC ruled that:
In Macasero v. Southern Industrial Gases Philippines,40 the Court reiterated, thus:
[A]n illegally dismissed employee is entitled to two reliefs: backwages and reinstatement.1wphi1 The two reliefs
provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations
between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is
entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. The
normal consequences of respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual reinstatement.
Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year
of service should be awarded as an alternative. The payment of separation pay is in addition to payment of
backwages.41 (Emphasis supplied)
Clearly, it is only when reinstatement is no longer feasible that the payment of separation pay is ordered in lieu
thereof. For instance, if reinstatement would only exacerbate the tension and strained relations between the parties, or
where the relationship between the employer and the employee has been unduly strained by reason of their
irreconcilable differences, it would be more prudent to order payment of separation pay instead of reinstatement. This
doctrine of strained relations, however, should not be used recklessly or applied loosely43 nor be based on impression
alone. "It bears to stress that reinstatement is the rule and, for the exception of strained relations to apply, it should be
proved that it is likely that if reinstated, an atmosphere of antipathy and antagonism would be generated as to
adversely affect the efficiency and productivity of the employee concerned." Strained relations must be demonstrated
as a fact, however, to be adequately supported by evidencesubstantial evidence to show that the relationship
between the employer and the employee is indeed strained as a necessary consequence of the judicial controversy.
The Supreme Court failed to find the factual basis of the award of separation pay to the petitioners. The NLRC decision
did not state the facts which demonstrate that reinstatement is no longer a feasible option that could have justified the
alternative relief of granting separation pay instead. The petitioners themselves likewise overlooked to allege
circumstances which may have rendered their reinstatement unlikely or unwise and even prayed for reinstatement
alongside the payment of separation pay in their position paper. A bare claim of strained relations by reason of
termination is insufficient to warrant the granting of separation pay. Likewise, the filing of the complaint by the
petitioners does not necessarily translate to strained relations between the parties. As a rule, no strained relations
should arise from a valid and legal act asserting ones right.48 Although litigation may also engender a certain degree
of hostility, the understandable strain in the parties relation would not necessarily rule out reinstatement which would,
otherwise, become the rule rather the exception in illegal dismissal cases.

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29. Begino v. Abs-Cbn, April 20, 2015.

FACTS: Respondent ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation) is a television and radio
broadcasting corporation which, for its Regional Network Group in Naga City, employed respondent Amalia Villafuerte
(Villafuerte) as Manager. There is no dispute regarding the fact that, thru Villafuerte, ABS-CBN engaged the services of
petitioners Nelson Begino (Begino) and Gener Del Valle (Del Valle) sometime in 1996 as Cameramen/Editors for TV
Broadcasting. Petitioners Ma. Cristina Sumayao (Sumayao) and Monina Avila-Llorin (Llorin) were likewise similarly
engaged as reporters sometime in 1996 and 2002, respectively. With their services engaged by respondents thru
Talent Contracts which, though regularly renewed over the years, provided terms ranging from three (3) months to one
(1) year, petitioners were given Project Assignment Forms which detailed, among other matters, the duration of a
particular project as well as the budget and the daily technical requirements thereof. In the aforesaid capacities,
petitioners were tasked with coverage of news items for subsequent daily airings in respondents TV Patrol Bicol
Program.
Claiming that they were regular employees of ABS-CBN, petitioners filed against respondents a complaint before the
National Labor Relations Commissions (NLRC) Sub-Regional Arbitration in Naga City. In support of their claims for
regularization, underpayment of overtime pay, holiday pay, 13th month pay, service incentive leave pay, damages
and attorney's fees, petitioners alleged that they performed functions necessary and desirable in ABS-CBN's business.
Mandated to wear company IDs and provided all the equipment they needed, petitioners averred that they worked
under the direct control and supervision of Villafuerte and, at the end of each day, were informed about the news to be
covered the following day, the routes they were to take and, whenever the subject of their news coverage is quite
distant, even the start of their workday. Due to the importance of the news items they covered and the necessity of
their completion for the success of the program, petitioners claimed that, under pain of immediate termination, they
were bound by the companys policy on, among others, attendance and punctuality.
On the otherhand, Respondents insisted that, pursuant to their Talent Contracts and/or Project Assignment Forms,
petitioners were hired as talents, to act as reporters and/or cameramen for TV Patrol Bicol for designated periods and
rates. Fully aware that they were not considered or to consider themselves as employees of a particular production or
film outfit, petitioners were supposedly engaged on the basis of the skills, knowledge or expertise they already
possessed and, for said reason, required no further training from ABS-CBN. Although petitioners were inevitably
subjected to some degree of control, the same was allegedly limited to the imposition of general guidelines on conduct
and performance, simply for the purpose of upholding the standards of the company and the strictures of the industry.
ISSUE: Whether or not there exists an employer-employee relationship between the parties
RULING: YES.
To determine the existence of said relation, case law has consistently applied the four-fold test, to wit: (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 on the means and methods by which the work is accomplished.23 Of these criteria, the socalled "control test" is generally regarded as the most crucial and determinative indicator of the presence or absence
of an employer-employee relationship. Under this test, an employer-employee relationship is said to exist where the
person for whom the services are performed reserves the right to control not only the end result but also the manner
and means utilized to achieve the same
It has been ruled that the foregoing provision contemplates four kinds of employees, namely: (a) regular employees or those who
have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (b)
project employees or 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; (c) seasonal employees or those who work or perform
services which are seasonal in nature, and the employment is for the duration of the season; and (d) casual employees or those who
are not regular, project, or seasonal employees.26 To the foregoing classification of employee, jurisprudence has added that of
contractual or fixed term employee which, if not for the fixed term, would fall under the category of regular employment in view of
the nature of the employees engagement, which is to perform activity usually necessary or desirable in the employers business.27
The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment Forms and the terms and
condition embodied therein, petitioners are regular employees of ABS-CBN. Time and again, it has been ruled that the test to
determine whether employment is regular or not is the reasonable connection between the activity performed by the employee in
relation to the business or trade of the employer.28 As cameramen/editors and reporters, petitioners were undoubtedly performing
functions necessary and essential to ABS-CBNs business of broadcasting television and radio content. It matters little that
petitioners services were engaged for specified periods for TV Patrol Bicol and that they were paid according to the budget allocated
therefor. Aside from the fact that said program is a regular weekday fare of the ABS-CBNs Regional Network Group in Naga City, the
record shows that, from their initial engagement in the aforesaid capacities, petitioners were continuously re-hired by respondents
over the years. To the mind of the Court, respondents repeated hiring of petitioners for its long-running news program positively
indicates that the latter were ABS-CBNs regular employees.
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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 or continuing performance as sufficient evidence of the necessity, if not indispensability of that activity in
the business.29 Indeed, an employment stops being co-terminous with specific projects where the employee is continuously re-hired
due to the demands of the employers business. The nature of the employment depends, after all, on the nature of the activities to be
performed by the employee, considering the nature of the employers business, the duration and scope to be done, and, in some
cases, even the length of time of the performance and its continued existence.32 In the same manner that the practice of having
fixed-term contracts in the industry does not automatically make all talent contracts valid and compliant with labor law, it has,
consequently, been ruled that the assertion that a talent contract exists does not necessarily prevent a regular employment status.
As cameramen/editors and reporters, it also appears that petitioners were subject to the control and supervision of respondents
which, first and foremost, provided them with the equipments essential for the discharge of their functions. Petitioners Talent
Contracts tellingly provided that ABS-CBN retained "all creative, administrative, financial and legal control" of the program to which
they were assigned. Aside from having the right to require petitioners "to attend and participate in all promotional or merchandising
campaigns, activities or events for the Program," ABS-CBN required the former to perform their functions "at such locations and
Performance/Exhibition Schedules" it provided or, subject to prior notice, as it chose determine, modify or change. Even if they were
unable to comply with said schedule, petitioners were required to give advance notice, subject to respondents approval.34 However
obliquely worded, the Court finds the foregoing terms and conditions demonstrative of the control respondents exercised not only
over the results of petitioners work but also the means employed to achieve the same.
The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative
to the employer, does not furnish an independent business or professional service, such work is a regular employment of such
employee and not an independent contractor. The Court will peruse beyond any such agreement to examine the facts that typify the
parties actual relationship.38 (Emphasis omitted) Rather than the project and/or independent contractors respondents claim them to
be, it is evident from the foregoing disquisition that petitioners are regular employees of ABS-CBN. This conclusion is borne out by the
ineluctable showing that petitioners perform functions necessary and essential to the business of ABS-CBN which repeatedly
employed them for a long-running news program of its Regional Network Group in Naga City.

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