Art.

82. Coverage. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit
or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who
are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.
"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.
Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with
a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week,
exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or
forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of
their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians,
nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.
Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a
prescribed workplace; and (b) all time during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours worked.

1.
2.

3.
4.
5.

Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60) minutes time-off for their regular meals.
Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his
regular wage for each hour of work performed between ten oclock in the evening and six oclock in the morning.
Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the
overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof.
Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of
the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.
Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any
other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from
paying the additional compensation required in this Chapter.
Art. 89. Emergency overtime work. Any employee may be required by the employer to perform overtime work in any of the
following cases:
When the country is at war or when any other national or local emergency has been declared by the National Assembly or
the Chief Executive;

When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or
impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other
disaster or calamity;

When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or
damage to the employer or some other cause of similar nature;

When the work is necessary to prevent loss or damage to perishable goods; and

Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the employer.
Any employee required to render overtime work under this Article shall be paid the additional compensation required in this
Chapter.

Antonio Bautista has been employed by Autobus, as driver-conductor and was paid on commission basis, seven percent (7%) of
the total gross income per travel, on a twice a month basis. One day, while Bautista was driving Autobus No. 114, he
accidentally bumped the rear portion of Autobus No. 124. Bautista 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 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 30% of the cost of
repair of the damaged buses and that his pleas for reconsideration were ignored by management. After a month, management
sent him a letter of termination. Thus, he instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th
month pay and service incentive leave pay. Autobus maintained that Bautistas employment was replete with offenses.
Furthermore, Autobus avers that in the exercise of its management prerogative, Bautista's employment was terminated only
after the latter was provided with an opportunity to explain.

The Labor Arbiter dismissed the complaint but ordered Autobus to pay his 13th month pay from the date of his hiring to the
date of his dismissal, as well as his service incentive leave pay for all the years he had been in service. Autobus appealed to the
th
NLRC which deleted the award of 13 month pay based on the Rules and Regulations Implementing Presidential Decree No.
851, particularly Sec. 3 which exempts employers of those who are paid on purely commission, boundary, or task basis. Records
showed that Bautista, in his position paper, admitted that he was paid on a commission basis. The award of service incentive
leave pay was maintained. Thus, Autobus sought a reconsideration which was denied by NLRC. CA affirmed the decision of the
NLRC.

ISSUE: Whether or not Bautista is entitled to service incentive leave.

HELD: The contention of Autobus that Bautista 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.

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 a specific place at a 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.

Therefore, Bautista is not a field personnel but a regular employee who performs tasks usually necessary and desirable to the
usual trade of business of Autobus. Accordingly, Bautista is entitled to the grant of service incentive leave.


DOCTRINE: COMPUTATION OF RETIREMENT PAY

A covered employee who retires pursuant to RA 7641 shall be entitled to retirement pay equivalent to at
least one-half (1/12) month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.
The law is explicit that one-half month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the
13th month pay and the cash equivalent of not more than five (5) days service incentive leaves unless the
parties provide for broader inclusions. Evidently, the law expanded the concept of one-half month salary
from the usual one-month salary divided by two.
The retirement pay is equal to half-months pay per year of service. But half-months pay is expanded because
it means not just the salary for 15 days but also one-twelfth of the 13th-month pay and the cash value of
five-day service incentive leave. THIS IS THE MINIMUM. The retirement pay package can be improved upon
by voluntary company policy, or particular agreement with the employee, or through a collective bargaining
agreement. (The Labor Code with Comments and Cases, C.A. Azcunea, Vol. II, page 765, Fifth Edition 2004).

FACTS: Petitioner Rodolfo J. Serrano was hired as bus conductor by respondent Severino Santos Transit, a bus company owned
and operated by its co-respondent Severino Santos.

After 14 years of service or on July 14, 2006, petitioner applied for optional retirement from the company. As
petitioners request to first go over the computation of his retirement pay was denied, he signed the Quitclaim on which he
wrote U.P. (under protest) after his signature, indicating his protest to the amount of P75,277.45 which he received, computed
by the company at 15 days per year of service.

Petitioner soon filed a complainthttp://sc.judiciary.gov.ph/jurisprudence/2010/august2010/187698.htm -
_ftn2 before the Labor Arbiter, alleging that the company erred in its computation since under Republic Act No. 7641,
otherwise known as the Retirement Pay Law, his retirement pay should have been computed at 22.5 days per year of service to
1
th
include the cash equivalent of the 5-day service incentive leave (SIL) and /12 of the 13 month pay which the company did not.

The company maintained, however, that the Quitclaim signed by petitioner barred his claim and, in any event, its
th
computation was correct since petitioner was not entitled to the 5-day SIL and pro-rated 13 month pay for, as a bus
conductor, he was paid on commission basis.

The Labor Arbiter (LA) ruled in favor of petitioner and awarded him P116,135.45 as his retirement pay differential.
On respondents appeal, the National Labor Relations Commission (NLRC) reversed the LAs decision but ordered the payment
of petitioners retirement differential in the P2,365.35. The NLRC held that since petitioner was paid on purely commission
th
1
th
basis, he was excluded from the coverage of the laws on 13 month pay and SIL pay, hence, the /12 of the 13 month pay and
the 5-day SIL should not be factored in the computation of his retirement pay.

th
ISSUE: Whether or not the 5-day SIL and pro-rated 13 month pay should be included in the computation of petitioners
retirement pay.

RULING: The Supreme Court reinstated the LAs previous decision and held that petitioners retirement pay should include the
1
th
cash equivalent of the 5-day SIL and /12 of the 13 month pay.

Republic Act No. 7641 amended Article 287 of the Labor Code by providing for retirement pay to qualified private
sector employees in the absence of any retirement plan in the establishment. Further, the Implementing Rules of said law
provide:

SECTION 1.
General Statement on Coverage. This Rule shall apply to all employees in the private sector, regardless of their position,
designation or status and irrespective of the method by which their wages are paid, except to those specifically exempted
under Section 2 hereof. As used herein, the term Act shall refer to Republic Act No. 7641 which took effect on January 7, 1993.
SECTION 5
Retirement Benefits.

5.1 In the absence of an applicable agreement or retirement plan, an employee who retires pursuant to the Act shall be entitled
to retirement pay equivalent to at least one-half () month salary for every year of service, a fraction of at least six (6) months
being considered as one whole year.

5.2 Components of One-half () Month Salary. For the purpose of determining the minimum retirement pay due an employee
under this Rule, the term one-half month salary shall include all of the following:

(a) Fifteen (15) days salary of the employee based on his latest salary rate. As used herein, the term salary includes all
remunerations paid by an employer to his employees for services rendered during normal working days and hours, whether
such payments are fixed or ascertained on a time, task, piece of commission basis, or other method of calculating the same,
and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of food, lodging or other
facilities customarily furnished by the employer to his employees. The term does not include cost of living allowances, profit-
sharing payments and other monetary benefits which are not considered as part of or integrated into the regular salary of the
employees.

(b) The cash equivalent of not more than five (5) days of service incentive leave;

(c) One-twelfth of the 13th month pay due the employee.

(d) All other benefits that the employer and employee may agree upon that should be included in the computation of the
employees retirement pay.

Admittedly, petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. Even if
petitioner as bus conductor was paid on commission basis then, he falls within the coverage of R.A. 7641 and its implementing
rules. It bears emphasis that under P.D. 851 or the SIL Law, the exclusion from its coverage of workers who are paid on a purely
commission basis is only with respect to field personnel.


Art. 82 Labor Code
Book III, Rule 1, Sec. 2 IRR (Labor Code)
The IRR therefore validly qualifies and limits the general exclusion of "workers paid by results" found in Article 82 from the
coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are
paid by results from the coverage of Title I is "determined by the Secretary of Labor in appropriate regulations."
Employee engaged in pakyaw basis is not excluded from the coverage of SIL or Holiday pay provided they are not field
personnel.
The governing law on 13th moth pay is PD No. 851.53 exempts employees paid on task basis without reference to field
personnel.
MACASIO, Respondent.
FACTS: Macasio filed before the LA a complaint against petitioner for non-payment of overtime pay, holiday pay and 13th
month pay. He also claimed payment for moral and exemplary damages and attorneys fees. And payment for service incentive
leave (SIL).
Macasio alleged 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
In his defense, David claimedThat 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 IRR of the Labor Code.
LABOR ARBITER - The LA gave credence to Davids claim that he engaged Macasio on "pakyaw" or task basis. The LA noted the
following facts to support this finding: (1) Macasio received the fixed amount of P700.00 for every work done, regardless of the
number of hours that he spent in completing the task and of the volume or number of hogs that he had to chop per
engagement; (2) Macasio usually worked for only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following day;
and (3) the P700.00 fixed wage far exceeds the then prevailing daily minimum wage of P382.00. The LA added that the nature
of Davids business as hog dealer supports this "pakyaw" or task basis arrangement. concluded that as Macasio was engaged on
"pakyaw" or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay.
NLRC affirmed the LA ruling. THUS, to the CA via a petition for certiorari.
CA 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 LA and 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.
The CA explained that 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. the CA awarded Macasios claim for holiday, SIL and 13th month pay for three years, with 10% attY. fees on the total
monetary award. The CA, however, denied Macasios claim for moral and exemplary damages for lack of basis.
ISSUES: (1) Whether there is employee employer relationship - YES
(2) Whether respondent Macasio engaged on PAKYAW or Task basis employee YES (3) Whether respondent Macasia is a
Field personnel - NO
(4) Whether respondent Macasio is entitled to 3th month pay NO
(5) Whether respondent Macasia is entitled to SIL, Holiday pay YES
RULING:
1.) Whether there is employee employer relationship YES
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 no. 1. 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. Also, Solano and Antonio
stated in their "Pinagsamang Sinumpaang Salaysay"40 that "[k]ami po ay nagtratrabaho sa Yiels xxx na pag-aari ni Ariel David
bilang butcher" and "kilalanamin si xxx Macasio na isa ring butcher xxx ni xxx David at kasama namin siya sa aming trabaho."
Second, David paid Macasios wages. 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. David could regulate Macasios work and could

even refuse to give him any assignment, thereby effectively dismissing him. 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.
2.) Whether respondent Macasio engaged on PAKYAW or Task basis employee YES
YES. 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.
3.) Whether respondent Macasia is a Field personnel NO
Based on the definition of field personnel under Article 82, we agree with the CA that Macasio does not fall under the definition
of "field personnel." The CAs finding in this regard is supported by the established facts of this case: first, Macasio regularly
performed his duties at Davids principal place of business; second, his actual hours of work could be determined with
reasonable certainty; and, third, David supervised his time and performance of duties. Since Macasio cannot be considered a
"field personnel," then he is not exempted from the grant of holiday, SIL pay even as he was engaged on "pakyaw" or task
basis.
4.) Whether respondent Macasio is entitled to 3th month pay NO
that the CA erred in finding that the NLRC gravely abused its discretion in denying this benefit to Macasio. The governing law on
13th month pay is PD No. 851.53
13th month pay benefits generally cover all employees; an employee must be one of those expressly enumerated to be
exempted. Section 3 of the IRR of 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 performance thereof" are exempted.
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the IRR ofPD 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
5.) Whether respondent Macasia is entitled to SIL, Holiday pay YES
The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday
pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as "field personnel."
The IRR therefore validly qualifies and limits the general exclusion of "workers paid by results" found in Article 82 from the
coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who
are paid by results from the coverage of Title I is "determined by the Secretary of Labor in appropriate regulations."
The Cebu Institute Technology ruling was reiterated in 2005 in Auto Bus Transport Systems, Inc., v. Bautista:
A careful perusal of said provisions of law will result in the conclusion that the grant of service incentive leave has been
delimited by the IRR 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.
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which the CA cited in support of granting Macasios
petition.
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."

__________________________________________________________________________
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.
REFERENCE:
Provisions governing SIL and holiday pay
Article 82 of the Labor Code provides the exclusions from the coverage of Title I, Book III of the Labor Code - provisions
governing working conditions and rest periods.
Art. 82. Coverage. The provisions of [Title I] shall apply to employees in all establishments and undertakings whether for
profit or not, but not to government employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers
who are paid by results as determined by the Secretary of Labor in appropriate regulations.
xxxx
"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
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.
The pertinent portion of Article 94 of the Labor Code and its corresponding provision in the IRR (Section 1, Rule IV of Book 3)
reads:
Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than (10) workers.
xxxx
SECTION 1. Coverage. This Rule shall apply to all employees except: xxxx
(e)Field personnel and other employees whose time and performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof.
On the other hand, Article 95 of the Labor Code and its corresponding provision in the IRR(Section 1, Rule V of Book 3)
pertinently provides:
Art. 95. Right to service incentive. (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.
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave
with pay of at least five days and those employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or
financial condition of such establishment.
xxxx
Section 1. Coverage. This rule shall apply to all employees except:
(e) 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 a fixed amount for performing work irrespective of
the time consumed in the performance thereof.

ROBINA FARMS CEBU VS VILLA

Facts: Respondent Elizabeth Villa brought against the petitioner her complaint for illegal suspension, illegal dismissal,
nonpayment of overtime pay, and nonpayment of service incentive leave pay in the Regional Arbitration Branch No. VII of the
NLRC in Cebu City. In her verified position paper, Villa averred that she had been employed by petitioner Robina Farms as sales
clerk since August 1981; that in the later part of 2001, the petitioner had enticed her to avail herself of the company's special
retirement program; that on March 2, 2002, she had received a memorandum from Lily Ngochua requiring her to explain her
failure to issue invoices for unhatched eggs in the months of January to February 2002; that she had explained that the invoices
were not delivered on time because the delivery receipts were delayed and overlooked; that despite her explanation, she had
been suspended for 10 days from March 8, 2012 until March 19, 2002; that upon reporting back to work, she had been advised
to cease working because her application for retirement had already been approved; that she had been subsequently informed
that her application had been disapproved, and had then been advised to tender her resignation with a request for financial
assistance; that she had manifested her intention to return to work but the petitioner had confiscated her gate pass; and that
she had since then been prevented from entering the company premises and had been replaced by another employee.
Robina admitted that Villa had been its sales clerk at Robina Farms. It stated that on December 12, 2001, she had applied for
retirement under the special privilege program offered to its employees in Bulacan and Antipolo who had served for at least 10
years; that in February 2002, her attention had been called by Anita Gabatan of the accounting department to explain her
failure to issue invoices for the unhatched eggs for the month of February; that she had explained that she had been busy.
The petitioner added that after the administrative hearing Villa was found to have violated the company rule on the timely
issuance of the invoices that had resulted in delay in the payment of buyers considering that the payment.
Robina added that after the administrative hearing Villa was found to have violated the company rule on the timely issuance of
the invoices that had resulted in delay in the payment of buyers considering that the payment had depended upon the receipt
of the invoices; that she had been suspended from her employment as a consequence; that after serving the suspension, she
had returned to work and had followed up her application for retirement with Lucina de Guzman, who had then informed her
that the management did not approve the benefits equivalent to 86% of her salary rate applied for, but only 1/2 month for
every year of service; and that disappointed with the outcome, she had then brought her complaint against the petitioners.
Labor Arbiter Ruling: Labor Arbiter Violeta Ortiz-Bantug rendered her decision 4 finding that Villa had not been dismissed from
employment. The Labor Arbiter declared that Villa was entitled to service incentive leave pay for the period of the last three
years counted from the filing of her complaint because the petitioner did not refute her claim thereon.
Judgment of the NLRC: The NLRC rendered its judgment dismissing the appeal by the petitioner but granting that of Villa. The
decision of the Labor Arbiter is REVERSED and SET ASIDE; and a new one ENTERED declaring complainant to have been illegally
dismissed.
Decision of CA: The CA promulgated its assailed decision dismissing the petition for certiorari, decreeing as follows:
WHEREFORE, premises considered, the instant petition is hereby ordered DISMISSED for lack of merit. The assailed
decision is AFFIRMED with MODIFICATION, in that petitioner Lily Ngochua should not be held liable with petitioner
corporation.
Issue: Whether or not Villa had been illegally dismissed?
Ruling: We note that the CA and the NLRC agreed on their finding that the petitioner did not admit Villa back to work after the
completion of her 10-day suspension.
Neither did Villa's application for early retirement manifest her intention to sever the employer-employee relationship.
Although she applied for early retirement, she did so upon the belief that she would receive a higher benefit based on the
petitioner's offer. As such, her consent to be retired could not be fairly deemed to have been knowingly and freely given.
The difficulty in the case of Villa arises from determining whether the retirement was voluntary or involuntary. The line
between the two is thin but it is one that the Court has drawn. On one hand, voluntary retirement cuts the employment ties
leaving no residual employer liability; on the other, involuntary retirement amounts to a discharge, rendering the employer
liable for termination without cause.
Under the circumstances, the CA did not err in declaring the petitioner guilty of illegal dismissal for violating Article 282 29 of
the Labor Code and the twin notice rule.
OVERTIME PAY AND SERVICE INCENTIVE LEAVE
The petitioner posits that the CA erroneously affirmed the giving of overtime pay and service incentive leave pay to Villa; that
she did not adduce proof of her having rendered actual overtime work; that she had not been authorized to render overtime
work; and that her availment of vacation and sick leaves that had been paid precluded her claiming the service incentive leave
pay. We partly agree with the petitioner's position. Firstly, entitlement to overtime pay must first be established by proof that
the overtime work was actually performed before the employee may properly claim the benefit. The burden of proving
entitlement to overtime pay rests on the employee because the benefit is not incurred in the normal course of business.
Failure to prove such actual performance transgresses the principles of fair play and equity.
And, secondly, the NLRC's reliance on the daily time records (DTRs) showing that Villa had stayed in the company's premises
beyond eight hours was misplaced. The DTRs did not substantially prove the actual performance of overtime work. The
petitioner correctly points out that any employee could render overtime work only when there was a prior authorization

therefor by the management. Without the prior authorization, therefore, Villa could not validly claim having performed work
beyond the normal hours of work.
We uphold the grant of service incentive leave pay.
Although the grant of vacation or sick leave with pay of at least five days could be credited as compliance with the duty to pay
service incentive leave, the employer is still obliged to prove that it fully paid the accrued service incentive leave pay to the
employee.
WHEREFORE, the Court DENIES the petition for review on certiorari for lack of merit; AFFIRMS the decision promulgated on
September 27, 2006 by the Court of Appeals, with the MODIFICATION that the award of overtime pay in favor of respondent
Elizabeth Villa is DELETED; and ORDERS the petitioner to pay the costs of suit.

Maxicare vs Contreras (G.R. No. 194352; Mendoza; Jan. 30, 2013)

Parties: Maxicare Healthcare, Eric Nubla, Jr., and Ruth Asis, petitioners

Marian Brigitte Contreras, respondent

Facts:

Sometime in March 2003, Maxicare hired Dr. Marian Brigitte Contreras as a retainer doctor at the PNB Head Office,
Macapagal Avenue, Manila. Under their verbal agreement, Dr. Contreras would render medical services for one year
at P250 per hour. Her retainer fee would be paid every 15th and 30th of each month based on her work schedule
which was every Tuesday, Thursday and Friday from 6am to 5pm.

On July 3, 2003, Dr. Ruth Asis, Maxicares medical specialist on Corporate Accounts, informed Dr. Contreras that she
was going to be transferred to another account after a month. On Aug. 4, 2003, the Service Agreement between Dr.
Contreras and Dr. Eric Nubla, Maxicares Vice-President for Medical Services, was executed, effecting the transfer of
the former to Maybank for 4 months, from Aug. 5, 2003 to Nov. 29, 2003, with a retainer fee of P168 per hour.

Dr. Contreras reported to Maybank for 1 day only. On Aug. 8, 2003, she filed a complaint before the Labor Arbiter
claiming that she was constructively dismissed. Maxicare, on the other hand, insisted that there was no constructive
dismissal.

LA dismissed the complaint for lack of merit. Upon appeal, the NLRC reversed and set aside the LAs decision. It
declared that Dr. Contreras was illegally dismissed and ordered her reinstatement with payment of backwages. Upon
the denial of its motion for reconsideration, Maxicare elevated its case to the CA raising the issue of jurisdiction for
the first time. CA affirmed the NLRC.

Issue/Held: W/N the lack/ absence of jurisdiction can be raised for the first time on appeal. | NO.

Ratio:

Maxicare is already estopped from belatedly raising the issue of lack of jurisdiction considering that it has actively
participated in the proceedings before the LA and the NLRC. While jurisdiction may be assailed at any stage, a partys
active participation in the proceedings before a court without jurisdiction will estop such party from assailing the lack
of it. It is an undesirable practice of a party to participate in the proceedings, submit his case for decision and then
accept the judgment, if favorable, but attack it for lack of jurisdiction, when adverse.

Maxicare never questioned the LAs jurisdiction from the very beginning and never raised the issue of employer-
employee relationship throughout the LA proceedings.

Maxicare had 2 chances of raising the issue of jurisdiction: first, in the LA level and second, in the NLRC level.
Unfortunately, it remained silent on the issue of jurisdiction while actively participating in both tribunals. It was
definitely too late for Maxicare to open up the issue of jurisdiction in the CA.

Maxicare: there is no employer-employee relationship.

SC: A party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court, will
not be permitted to change theory on appeal. Points of law, theories, issues and arguments not brought to the
attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot
be raised for the first time at such late stage. It would be unfair to the adverse party who would have no opportunity
to present further evidence material to the new theory. To permit Maxicare in this case to change its theory on
appeal would thus be unfair to Dr. Contreras, and would offend the basic rules of fair play, justice and due process.

The review of labor cases is confined to questions of jurisdiction or grave abuse of discretion. The alleged absence of
employer-employee relationship cannot be raised for the first time on appeal. The resolution of this issue requires the
admission and calibration of evidence and the LA and the NLRC did not pass upon it in their decisions.

Petitioner had insisted that respondent was dismissed from employment for cause and after the observance of the
proper procedure for termination. Consequently, petitioner cannot now deny that respondent is its employee. While
jurisdiction cannot be conferred by acts or omission of the parties, petitioner's belated denial that it is the employer
of respondent is obviously an afterthought, a devise to defeat the law and evade its obligations.

Higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the
proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal. Petitioner is
bound by its submissions that respondent is its employee and it should not be permitted to change its theory. Such
change of theory cannot be tolerated on appeal, not due to the strict application of procedural rules, but as a matter
of fairness.

Dispositive: Petition denied.

Calamba Medical Center vs NLRC (2008) G.R. 176484

Facts:
Calamba Medical Center, engaged the services of medical doctors-spouses Dr. Ronaldo and Dr. Merceditha Lanzanas as part of
its team of resident physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were paid a
monthly "retainer" of P4,800.00 each. Also resident physicians were also given a percentage share out of fees charged for out-
patient treatments, operating room assistance and discharge billings, in addition to their fixed monthly retainer.
The work schedules of the members of the team of resident physicians were fixed by petitioner's medical director Dr. Desipeda,
and they were issued ID, enrolled in the SSS and withheld tax from them.
After an incident where Dr. Trinidad overheard a phone conversation between Dr. Ronaldo and a fellow employee Diosdado
Miscala, the former was given a preventive suspension and his wife Dr. Merceditha was not given any schedule after sending
the Memorandum. On March 1998, Dr. Ronaldo filed a complaint for illegal suspension and Dr. Merceditha for illegal dismissal.
Issue: WON there exists an employer-employee relationship between petitioner and the spouses-respondents?
Held: Drs. Lanzanas are declared employee by the petitioner hospital.
Under the "control test," an employment relationship exists between a physician and a hospital if the hospital controls both
the means and the details of the process by which the physician is to accomplish his task.
That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the
operating room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors,
charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be
undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the performance of
duties of the employee, it being enough that it has the right to wield the power.
With respect to respondents' sharing in some hospital fees, this scheme does not sever the employment tie between them and
petitioner as this merely mirrors additional form or another form of compensation or incentive similar to what commission-
based employees receive as contemplated in Article 97 (f) of the Labor Code.
Moreover, respondents were made subject to petitioner-hospital's Code of Ethics, the provisions of which cover administrative
and disciplinary measures on negligence of duties, personnel conduct and behavior, and offenses against persons, property and
the hospital's interest.
More importantly, petitioner itself provided incontrovertible proof of the employment status of respondents, namely, the
identification cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect their status as employees, and the
classification as "salary" of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth)
program. It bears noting at this juncture that mandatory coverage under the SSS Law is premised on the existence of an
employer-employee relationship, except in cases of compulsory coverage of the self-employed.


MARTICIO SEMBLANTE AND DUBRICK PILAR, Petitioner, v. COURT OF APPEALS, Respondent.

VELASCO, JR.,J.:

FACTS:

Petitioners Marticio Semblante (Semblante) and Dubrick Pilar (Pilar) assert that they were hired by respondents-spouses
Vicente and Maria Luisa Loot, the owners of Gallera de Mandaue(the cockpit), as the official masiadorand sentenciador,
respectively, of the cockpit sometime in 1993.

As themasiador, Semblante calls and takes the bets from the gamecock owners and other bettors and orders the start of the
cockfight. He also distributes the winnings after deducting thearriba, or the commission for the cockpit. Meanwhile, as the
sentenciador, Pilar oversees the proper gaffing of fighting cocks, determines the fighting cocks physical condition and
capabilities to continue the cockfight, and eventually declares the result of the cockfight.

On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of respondents, and
were informed of the termination of their services effective that date. This prompted petitioners to file a complaint for illegal
dismissal against respondents.

In answer, respondents denied that petitioners were their employees and alleged that they were associates of respondents
independent contractor, Tomas Vega. Respondents claimed that petitioners have no regular working time or day and they are
free to decide for themselves whether to report for work or not on any cockfighting day. In times when there are few cockfights
inGallera de Mandaue, petitioners go to other cockpits in the vicinity. Lastly, petitioners, so respondents assert, were only
issued identification cards to indicate that they were free from the normal entrance fee and to differentiate them from the
general public.

Labor Arbiter Julie C. Rendoque found petitioners to be regular employees of respondents as they performed work that was
necessary and indispensable to the usual trade or business of respondents for a number of years. The Labor Arbiter also ruled
that petitioners were illegally dismissed, and so ordered respondents to pay petitioners their backwages and separation pay.

Respondents counsel received the Labor Arbiters Decision on September 14, 2004. And within the 10-day appeal period, he
filed the respondents appeal with the NLRC on September 24, 2004, but without posting a cash or surety bond equivalent to
the monetary award granted by the Labor Arbiter. It was only on October 11, 2004 that respondents filed an appeal bond dated
October 6, 2004. Hence, in a Resolution dated August 25, 2005, the NLRC denied the appeal for its non-perfection.

Subsequently, however, the NLRC, acting on respondents Motion for Reconsideration, reversed its Resolution on the postulate
that their appeal was meritorious and the filing of an appeal bond, albeit belated, is a substantial compliance with the rules.The
NLRC held in its Resolution of October 18, 2006 that there was no employer-employee relationship between petitioners and
respondents, respondents having no part in the selection and engagement of petitioners, and that no separate individual
contract with respondents was ever executed by petitioners.

The appellate court found for respondents, noting that referees and bet-takers in a cockfight need to have the kind of expertise
that is characteristic of the game to interpret messages conveyed by mere gestures. Hence, petitioners are akin to independent
contractors who possess unique skills, expertise, and talent to distinguish them from ordinary employees.

The CA refused to reconsider its Decision. Hence, petitioners came to this Court, arguing in the main that the CA committed a
reversible error in entertaining an appeal, which was not perfected in the first place.

ISSUE: Whether the CA erred in entertaining an appeal which was not perfected.

HELD:

LABOR LAW

Indeed, the posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the
Decision of the Labor Arbiter. Article 223 of the Labor Code provides:

Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both partieswithin ten (10) calendar days from receipt of such decisions, awards, or orders.Such appeal
may be entertained only on any of the following grounds:

x x x x

In case of a judgment involving a monetary award,an appeal by the employer may be perfected only upon the posting of a cash
or surety bondissued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.

Time and again, however, this Court, considering the substantial merits of the case, has relaxed this rule on, and excused the
late posting of, the appeal bond when there are strong and compelling reasons for the liberality, such as the prevention of
miscarriage of justice extant in the caseor the special circumstances in the case combined with its legal merits or the amount
and the issue involved.After all, technical rules cannot prevent courts from exercising their duties to determine and settle,
equitably and completely, the rights and obligations of the parties. This is one case where the exception to the general rule lies.

While respondents had failed to post their bond within the 10-day period provided above, it is evident, on the other hand, that
petitioners are NOT employees of respondents, since their relationship fails to pass muster the four-fold test of employment
We have repeatedly mentioned in countless decisions:
(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, which is the most important element.
As found by both the NLRC and the CA, respondents had no part in petitioners selection and management;petitioners
compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners;and
petitioners performed their functions asmasiadorandsentenciadorfree from the direction and control of respondents. In the
conduct of their work, petitioners relied mainly on their expertise that is characteristic of the cockfight gambling, and were
never given by respondents any tool needed for the performance of their work.

Respondents, not being petitioners employers, could never have dismissed, legally or Respondents, not being petitioners
employers, could never have dismissed, legally or illegally, petitioners, since respondents were without power or prerogative to
do so in the first place. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to be free
from an unwarranted burden of answering for an illegal dismissal for which they were never responsible.

Strict implementation of the rules on appeals must give way to the factual and legal reality that is evident from the records of
this case.After all, the primary objective of our laws is to dispense justice and equity, not the contrary.

DENIED.


GREGORIO V. TONGKO, petitioner, vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE
DIOS, respondents.

BRION, J.:

FACTS:

Taking from the November 2008 decision, the facts are as follows:

Manufacturers Life Insurance, Co. is a domestic corporation engaged in life insurance business. De Dios was its President and
Chief Executive Officer. Petitioner Tongko started his relationship with Manulife in 1977 by virtue of a Career Agent's
Agreement.

Pertinent provisions of the agreement state 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.

a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and other products offered by the
Company, and collect, in exchange for provisional receipts issued by the Agent, money due or to become due to the Company
in respect of applications or policies obtained by or through the Agent or from policyholders allotted by the Company to the
Agent for servicing, subject to subsequent confirmation of receipt of payment by the Company as evidenced by an Official
Receipt issued by the Company directly to the policyholder.

b) The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by
giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. No waiver,
extinguishment, abandonment, withdrawal or cancellation of the right to terminate this Agreement by the Company shall be
construed for any previous failure to exercise its right under any provision of this Agreement.

c) Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party
fifteen (15) days notice in writing.

Sometime in 2001, De Dios addressed a letter to Tongko, then one of the Metro North Managers, regarding meetings wherein
De Dios found Tongko's views and comments to be unaligned with the directions the company was taking. De Dios also
expressed his concern regarding the Metro North Managers' interpretation of the company's goals. He maintains that Tongko's
allegations are unfounded. Some allegations state that some Managers are unhappy with their earnings, that they're earning
less than what they deserve and that these are the reasons why Tonko's division is unable to meet agency development
objectives. However, not a single Manager came forth to confirm these allegations. Finally, De Dios related his worries about
Tongko's inability to push for company development and growth.

De Dios subsequently sent Tongko a letter of termination in accordance with Tongko's Agents Contract. Tongko filed a
complaint with the NLRC against Manulife for illegal dismissal, alleging that he had an employer-employee relationship with De
Dios instead of a revocable agency by pointing out that the latter exercised control over him through directives regarding how
to manage his area of responsibility and setting objectives for him relating to the business. Tongko also claimed that his
dismissal was without basis and he was not afforded due process. The NLRC ruled that there was an employer-employee
relationship as evidenced by De Dios's letter which contained the manner and means by which Tongko should do his work. The
NLRC ruled in favor of Tongko, affirming the existence of the employer-employee relationship.

The Court of Appeals, however, set aside the NLRC's ruling. It applied the four-fold test for determining control and found the
elements in this case to be lacking, basing its decision on the same facts used by the NLRC. It found that Manulife did not exert
control over Tongko, there was no employer-employee relationship and thus the NLRC did not have jurisdiction over the case.

The Supreme Court reversed the ruling of the Court of Appeals and ruled in favor of Tongko. However, the Supreme Court
issued another Resolution dated June 29, 2010, reversing its decision. Tongko filed a motion for reconsideration, which is now
the subject of the instant case.

ISSUE: Whether the Supreme Court erred in issuing the June 29, 2010 resolution, reversing its earlier decision that an employer-

employee relationship existed.

HELD: The petition is unmeritorious.

LABOR LAW Agency; Employer-employee relationships

The Supreme Court finds no reason to reverse the June 29, 2010 decision. Control over the performance of the task of one
providing service both with respect to the means and manner, and the results of the service is the primary element in
determining whether an employment relationship exists. The Supreme Court ruled petitioners Motion against his favor since he
failed to show that the control Manulife exercised over him was the control required to exist in an employer-employee
relationship; Manulifes control fell short of this norm and carried only the characteristic of the relationship between an
insurance company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code.

In the Supreme Courts June 29, 2010 Resolution, they noted that there are built-in elements of control specific to an insurance
agency, which do not amount to the elements of control that characterize an employment relationship governed by the Labor
Code.The Insurance Code provides definite parameters in the way an agent negotiates for the sale of the companys insurance
products, his collection activities and his delivery of the insurance contract or policy. They do not reach the level of control into
the means and manner of doing an assigned task that invariably characterizes an employment relationship as defined by labor
law.

To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result intended by the
contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result.
Tested by this norm, Manulifes instructions regarding the objectives and sales targets, in connection with the training and
engagement of other agents, are among the directives that the principal may impose on the agent to achieve the assigned
tasks.They are targeted results that Manulife wishes to attain through its agents. Manulifes codes of conduct, likewise, do not
necessarily intrude into the insurance agents means and manner of conducting their sales. Codes of conduct are norms or
standards of behavior rather than employer directives into how specific tasks are to be done.

In sum, the Supreme Court found absolutely no evidence of labor law control.

Petition is DENIED.

G.R. No. 167622 June 29, 2010

GREGORIO V. TONGKO, Petitioner,
vs.
THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS,Respondents.
FACTS:
Petitioner Gregorio Tongko entered into a Career Agents Agreement with respondent Manulife. As an agent, his duties
consisted of, among others, canvassing for applications for group policies and other products of the company. Subsequently,
Tongko was named unit manager, branch manager, and regional sales manager. But when he failed to comply with policies of
Manulife, his Agency Agreement was terminated.
Tongko filed a complaint with the NLRC Arbitration Branch. He essentially alleged despite the clear terms of the letter
terminating his Agency Agreement that he was Manulifes employee before he was illegally dismissed. The labor arbiter
decreed that no employer-employee relationship existed between the parties. However, the NLRC reversed the labor arbiters
decision on appeal. When the case went to the CA, it sustained the labor Arbiters decision. Manulife asserts that the labor
tribunals have no jurisdiction over Tongkos claim as he was not its employee as characterized in the four-fold test.
ISSUE:
Has the labor arbiter jurisdiction over his complaint for illegal dismissal?
HELD:
No. Given the anemic state of the evidence, particularly on the requisite confluence of the factors that would show an
employer-employee relationship, the court cannot conclusively find that the relationship exists in the present case, even if such
relationship only refers to Tongkos additional functions. While a rough deduction can be made, the answer will not be fully
supported by the substantial evidence needed.Under this legal situation, the only conclusion that can be made is that the
absence of evidence showing Manulifes control over Tongkos contractual duties points to the absence of any employer-
employee relationship between Tongko and Manulife.
In the context of the established evidence, Tongko remained an agent all along; although his subsequent duties made him a
lead agent with leadership role, he was nevertheless only an agent whose basic contract yields no evidence of means-and-
manner control.
In the case, it is a matter that the labor tribunals cannot rule upon in the absence of an employer-employee relationship.
Jurisdiction over the matter belongs to the courts applying the laws of insurance, agency and contracts.

FACTS:
Complainants alleged to have started working as sugar farm workers on various dates, to wit:
Respondent Hda. Maasin II is a sugar cane plantation located in Murcia, Negros Occidental with an area of 12-24 has. planted,
owned and managed by Josefina Benares, individual co-respondent.

Complainants thru counsel wrote a letter to the Regional Director of the DOLE Bacolod for intercession particularly in the
matter of wages and other benefits mandated by law. After a routine inspection was made, a report and recommendation
was submitted endorsing the case to the Regional Arbitration Branch NLRC Bacolod for proper hearing and disposition.

Complainants alleged to have been terminated without being paid termination benefits by Benares in retaliation to what they
have done in reporting to the DOLE their working conditions vis--vis wages and other mandatory benefits. A formal
complaint for illegal dismissal with money claims was filed before the NLRC. After submission of their position papers, the
Labor Arbiter issued an order to the effect that the case is submitted for resolution.

The Labor Arbiter a quo issued the assailed decision dismissing the complaint for lack of merit. Upon appeal to the NLRC, the
decision was reversed. The NLRC held that respondents attained the status of regular seasonal workers of Had. Maasin II
having worked therein from 1964-1985. It found that petitioner failed to discharge the burden of proving that the termination
of respondents was for a just or authorized cause. Motion for reconsideration was denied.
The Court of Appeals affirmed the NLRCs decision with the modification that the backwages and other monetary benefits
shall be computed from the time the compensation was withheld in accordance with Article 279 of the labor Code, as
amended by R.A. No. 6715. Motion for reconsideration denied.

ISSUE(S):

1.
2.

WON respondents are regular employees of Hacienda Maasin II and thus entitled to monetary claims.

WON respondents were illegally dismissed.

HELD:
1. YES,
2. YES.
RATIO:
The law provides for three kinds of employees: (1) 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; (2) 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 or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular nor
project employees.

The court compared two decisions it made both on April 2005:
Mercado v NLRC
Hda Fatima v National Fed of Sugarcane Workers-Food and
General Trade
Facts: The workers were engaged to do a particular phase Facts: Respondents performed same tasks for petitioners
of agricultural work necessary for rice and/or sugarcane every season for several years.
production, after which they would be free to render
services to other farm workers in need of their services.
Ruling: They were considered the petitioners regular

employees for their respective tasks. The fact that they do
Ruling: Seasonal workers do not become regular employees not work continuously for one whole year but only for the
by the mere fact that they have rendered at least one year duration of the season does not detract from considering
of service, whether continuous or broken, because the them in regular employment since in a litany of cases this
nd
proviso in the 2 paragraph of Article 280 demarcates Court has already settled that seasonal workers who are
casual employees, all other employees who do not fall called to work from time to time and are temporarily laid
under the definition of the preceding paragraph. It deems off during off-season are not separated from service in that
as regular employees those casual employees who have period, but merely considered on leave until re-employed.
rendered at least one year of service regardless of the fact
that such service may be continuous or broken.

Citing jurisprudence, the Court, in Hacienda Fatima, condensed the rule that the primary standard for determining regular
employment is the reasonable connection between the particular activity performed by the employee vis-a-vis the usual trade
or business of the employer. This connection can be determined by considering the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety. If the employee has been performing the job for at

least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need
for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity exists.
The issue, therefore, of whether respondents were regular employees of petitioner has been adequately dealt with. The labor
arbiter, the NLRC and the Court of Appeals have similarly held that respondents were regular employees of petitioner. Since it
is a settled rule that the factual findings of quasi-judicial agencies which have acquired expertise in the matters entrusted to
their jurisdiction are accorded by this Court not only respect but even finality, we shall no longer disturb this finding.
We also find no reason to disturb the finding that respondents were illegally terminated. When there is no showing of
clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the
burden is on the employer to prove that the termination was for a just or authorized cause. In this case, as found both by the
NLRC and the Court of Appeals, petitioner failed to prove any such cause for the dismissal of respondents.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals respectively
dated June 29, 2001 and November 28, 2001 are hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
DISSENTING/CONCURRING OPINION(S):
CASE LAW/ DOCTRINE:
A seasonal employee is considered a regular employee when the employee has been performing the job for at least a year,
even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity and while such activity exists.

Test for determining regular employment: The reasonable connection between the particular activities performed by the
employee vis--vis the usual trade or business of the employer. This connection can be determined by the nature of the work
performed in relation to the scheme of the particular business.
FRANCISCO vs. NLRC
[GR. No.170087 Aug. 31, 2006]
Angelina Francisco has held several positions in Kasei Corporation, to wit: (1) Accountant and Corporate Secretary; (2) Liaison
Officer to the City of Makati; (3) Corporate Secretary; and (4)Acting Manager.
She performed the work of Acting Manager for five years but later she was replaced by Liza R. Fuentes as Manager. Then, Kasei
Corporation reduced her salary and was not paid her mid-year bonus allegedly because the company was not earning well. She
made repeated follow-ups with the company cashier but she was advised that the company was not earning well. Ultimately,
she did not report for work and filed an action for constructive dismissal before the labor arbiter.
Held:
Issue:
Was Francisco an employee of Kasei Corporation?
In certain cases where 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.
This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case
where there is no written agreement or terms of reference to base the relationship on; and due to the complexity of the
relationship based on the various positions and responsibilities given to the worker over the period of the latters employment.
Thus, 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 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.
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, 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.
There can be no other conclusion that she is an employee of respondent Kasei Corporation. She was selected and engaged by
the company for compensation, and is economically dependent upon respondent for her continued employment in that line of
business. Her main job function involved accounting and tax services rendered to the corporation on a regular basis over an
indefinite period of engagement. The corporation hired and engaged her for compensation, with the power to dismiss for
cause. More importantly, the corporation had the power to control her with the means and methods by which the work is to be
accomplished.