Lyceum of the Philippines University College of Law
ILLEGAL RECRUITMENT
A. ESSENTIAL ELEMENTS IN ILLEGAL
RECRUITMENT
People v. Angeles
G.R. No. 132376 | April 11, 2002
J. YNARES-SANTIAGO
Complainants Maria and Marceliano were
overseas workers who received calls from their
relatives in the Philippines. They were asked by
their relatives to return to the Philippines and
await the arrival of Angeles, who was to assist
them in the processing of travel and employment
documents to Paris, France. The two
subsequently paid out large sums of money for
the same.
The others were likewise convinced that Angeles
could help process documents for employment in
Canada, and paid significant amounts. However,
Angeles disappeared with the money she
managed to collect, prompting the complainants
to bring the matter to the POEA. It was found that
Angeles was not duly licensed to recruit workers
here and abroad.
Angeles, on the other hand, claimed that she
never represented that she could provide the
complainants with work abroad.
Q: Is Angeles guilty of the crime of Illegal
Recruitment.
A: No, she is not guilty of the crime of Illegal
Recruitment.
Article 13(b) of the Labor Code reads as follows:
(b) Recruitment and
placement refers to any act of
canvassing, enlisting,
contracting, transporting,
utilizing, hiring or procuring
workers, and includes
referrals, contract services,
promising or advertising for
employment locally or abroad,
whether for profit or
not: Provided, that any person
or entity which, in any manner,
offers or promises for a fee
employment to two or more
persons shall be deemed
Labor Law 1
engaged in recruitment and
placement.
To prove illegal recruitment, it must be shown that
the alleged recruiter gave the recruited persons
the distinct impression that he had the power
or ability to send them abroad for work such
that the latter were convinced to part with
their money in order to be employed. There
must at least be a promise or offer of an
employment from the person posing as a recruiter
whether locally or abroad.
In the case at bar, Angeles alleged that she never
promised or offered any job to the complainants.
The Court AGREED with this assessment.
The complainants consistently recounted in their
testimonies that it was their relatives that contact
them and urged them to meet Angeles who would
assist them in processing travel documents.
There no promises actually made by accused
Angeles, as those promises actually came from
relatives of the complainants. Thus, it cannot be
said that Angeles was in the performance of
illegal recruitment.
B. ILLEGAL RECRUITMENT v. ESTAFA
People v. Calonzo
G.R. No. 115150 | September 27, 1996
J. BELLOSILLO
Sometime in February 1992 Danilo de los Reyes
and his brother-in-law Belarmino Torregrosa met
Reydante Calonzo in the house of Loreta
Castaeda at No. 10 P. Burgos Street, Pasig,
Metro Manila. In that meeting Calonzo lost no
time in informing them that he could provide them
employment abroad, particularly Italy, for a fee.
Calonzo was so glib and persuasive that De los
Reyes and Torregrosa were quickly convinced to
cast their lot with him. Upon returning home they
took stock of their assets and resources and
came up with the figures sufficient for the
processing of their applications for employment
abroad. Two months after their initial meeting, De
los Reyes gave Calonzo P50,000.00. He also
pledged the Ford Fiera of his brother-in-law to
Calonzo for P70,000.00 in order to come up with
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the P120,000.00 processing fee imposed by
Calonzo. The latter then informed De los Reyes
of his "scheduled" departure for Italy on 29 April
1992. However, despite the lapse of the period,
De los Reyes and Torregrosa remained in the
Philippines although their recruiter reiterated his
promise to send them to Italy.
Hazel de Paula testified that she first met
appellant and the other complainants at the
house of Loreta Castaeda at Pasig, Metro Manila.
Convinced that she would eventually be
employed in Italy as a domestic helper she gave
Calonzo P120,000.00. Unlike the other
complaining witnesses, she was not able to fly to
Bangkok on 2 May 1992 as her passport was not
yet available. She left only on 6 May 1992 where
she was met by Calonzo at the airport and
brought to the P.S. Guest Hotel where her
companions who had arrived earlier were already
billeted. She said that while in Bangkok Calonzo
asked money again from her.
Elmer Clamor, a 28-year old resident of Gen.
Trias, Cavite, was similarly situated with Hazel de
Paula. Clamor narrated that he gave Calonzo
P120,000.00 for the latter's commitment to send
him to Italy, and in fact while in Bangkok he gave
Calonzo US$250.00 more.
Bernardo Miranda, a construction worker from
Talisay, Batangas, was another victim of
Calonzo. Lured by the latter's assurances that he
would be sent to Italy, he gave Calonzo a total of
P120,000.00 for the processing of his application
for work in Italy. But, like all the rest of them,
Miranda only reached Bangkok.
Aggrieved, the complainants verified with the
POEA whether or not Calonzo or his business,
R.A.C Business Agency, was duly authorized or
licensed to recruit people for employment abroad.
The POEA certified that they were not.
Calonzo, on the other hand, alleges that while he
was engaged in the consultancy business
through his Agency, he denied any involvement
in recruitment activities. He also denies knowing
the complaining witnesses, except those that he
alleged that he met only once at his office. He
also disclaimed the official receipts issued to the
complainants from R.A.C Business Agency.
Labor Law 2
Q: Is the conviction of the accused proper as
under Illegal Recruitment in Large Scale, as
well as Estafa.
A: Yes, both charges are proper.
It is clear that, under the Labor Code, Article 38(b)
defines Illegal Recruitment in Large Scaleas
follows:
(b) Illegal recruitment when
committed by a syndicate or in
large scale shall be considered
an offense involving economic
sabotage and shall be
penalized in accordance with
Article 39 hereof.
Illegal recruitment is deemed
committed by a syndicate if
carried out by a group of three
(3) or more persons conspiring
and/or confederating with one
another in carrying out
any unlawful or illegal
transaction, enterprise or
scheme defined under the first
paragraph hereof. Illegal
recruitment is deemed
committed in large scale if
committed against three (3)
or more persons individually
or as a group.
Illegal recruitment in large scale is committed
when a person "(a) undertakes any recruitment
activity defined under Article 13(b) or any
prohibited practice enumerated under Article
34 of the Labor Code; (b) does not have a
license or authority to lawfully engage in the
recruitment and placement of workers; and (
c) commits the same against three or more
persons, individually or as a group."
It is clear from the facts that indeed, Calonzo was
engaged in recruitment activities in large scale.
He had deluded the complainants into believing
that he could secure jobs for them in Italy, and it
was clear that neither Calonzo himself nor his
company were licensed to recruit workers for
abroad, and he had recruited five (5) persons.
Furthermore, as to Calonzo’s conviction for
estafa, it was found in earlier jurisprudence that
recruitment of persons for overseas employment
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without the necessary recruiting permit or
authority from POEA constitutes illegal
recruitment; HOWEVER, there some other
crimes or felonies are committed in the process,
conviction under the Labor Code does not
preclude punishment under other statutes.
The elements of estafa are as follows: (a) that
the accused defrauded another by abuse of
confidence or by means of deceit, and (b) that
damage or prejudice capable of pecuniary
estimation is caused to the offended party or
third person.
Thus, Calonzo may be charged with both.
PRE-TERMINATION OF CONTRACT OF
MIGRANT WORKER
Serrano v Gallant Maritime Services
G.R. No. 167614 | March 24, 2009
J. AUSTRIA-MARTINEZ
Petitioner Serrano was hired by Gallant Maritime
Services and Marlow Navigation Co., under a
Philippine Overseas Employment Administration
(POEA)-approved Contract of Employment as a
Chief Officer.
However, on the date of his departure, the
petitioner was constrained to accept a
downgraded employment contract, which
included a lower position as Second Officer and
a lower salary. He accepted, on the strength of
the claim that he would made Chief Officer by the
end of April 1998. However, the respondents did
not deliver on this promise, Serrano refused to
stay on as Second Officer. Thus, he was
repatriated to the Philippines.
The contract was for a period of twelve (12)
months, and Serrano served only for a period of
two months and seven days.
Q: Did the Court of Appeals and the labor
tribunals err in ruling that the petitioner was
to receive three (3) months back wages
instead of the amount equal to the unexpired
portion of his contract of employment.
A: Yes, the Court of Appeals and the labor
tribunals erred.
Labor Law 3
Prior jurisprudence classified OFWs into two
categories, those being: OFWs with fixed-period
employment contracts of less than one year, who
in cases of illegal dismissal, are entitled to their
salaries for the entire unexpired portion of their
contract. On the other hand, the second category
consists of OFWs with fixed-period employment
contracts with terms of one year or more, who in
cases of illegal dismissal, are entitled to an award
equivalent to only three (3) months of the
unexpired portion of their contract.
This disparity in the treatment of these groups is
untenable, especially when one takes into
account the fact that prior to the effectivity of R.A.
No. 8042, illegally dismissed OFWs, no matter
how long the period of their employment
contracts, were entitled to their salaries for the
entire unexpired portions of their contracts.
In sum, prior to the effectivity of R.A. No. 8042,
OFWs and local workers with fixed-term
employment who were illegally dismissed were
treated alike in terms of the computation of their
money claims. They were uniformly entitled to
their salaries for the entire unexpired portions of
their contracts.
The Supreme Court concludes that the subject
clause which imposes a 3-month cap on the
claims of OFWs with claim with an unexpired
portion of one year or more on their contracts,
as unconstitutional. The subject clause singles
out one classification of OFWs and burdens it
with a peculiar disadvantage. This is in clear
contravention of the equal protection clause.
Thus, Petitioner should be awarded his salaries
for the entire unexpired portion of his contract.
CONTRACTUAL NATURE OF OVERSEAS
EMPLOYMENT
Millares v. NLRC
Millares v NLRC
G.R. No. 110524 | July 29, 2002
J. KAPUNAN
Petitioner Millares was employed by private
respondent ESSO International Shipping
Company LTD through a local manning agency
as a machinist. Subsequently, he was promoted
to Chief Engineer, until he opted to retire in 1989.
On June 13, 1989, the petitioner applied for a
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leave of absence spanning from July 9 to August
7 which was granted. Subsequently, Millares
informed the Operations Manager that he
intended to avail of the optional retirement plan
under the Consecutive Enlistment Incentive
Place as he had rendered more than twenty years
of service.
This was, however, denied as Millares was
merely employed on a contractual basis, and his
contract of enlistment did not provide for
retirement before the age of sixty (60), and he
failed to comply with the requirement for claiming
benefits.
On August 9, 1989, Millares requested for an
extension of his leave, but later on received a
letter wherein it was held that due to his absence
without leave, which was equivalent to
abandonment, he had been dropped from the
roster of crew members.
Petitioner Lagda similarly asked to take a leave
of absence, and expressed his intention of
availing of the optional early retirement plan. The
latter was not granted, on the same grounds that
Millares’ request was denied. Similarly, Lagda
was also dropped from the roster of crew
members due to his unavailability for contract sea
service.
Q: Whether or not the petitioners were regular
employees, and thus, dismissed without just
cause.
A: No, the petitioners were not regular
employees.
The employment contract that the petitioners
signed were clearly of the nature of fixed-term
employment, which is not prohibited by the Labor
Code. Previous jurisprudence has held that a
seafarer is not a regular employee and is not
entitled to separation pay. They cannot be
considered as regular employees under Article
280 of the Labor Code, as they fall under the
exception to the same article. Their employment
is 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.
Despite their insistence that their services were
usually necessary and desirable to the business
of their employer, and that they rendered more
than twenty (20) years of service, the petitioners
Labor Law 4
cannot be considered as regular employees.
Overseas workers do not attain regular
employment status, as their employment falls
under the type which are governed by the mutual
agreement of the parties.
Santiago vs. CF Sharp
G.R. No. 162419 | July 10, 2007
J. TINGA
Petitioner Santiago had worked with Smith Bell
Management as a seafarer for about five (5)
years. Sometime in February 3, 1998, he signed
a new contract of employment with the
respondent for a period of nine (9) months. The
following day, the contract was approved by the
POEA. Santiago was to be deployed on board the
MSV Seaspread which was scheduled leave for
Canada on February 13, 1998.
However, a week prior the scheduled date of
departure, Capt. Fernandez, the Vice President
of respondent corporations, sent a message to
the captain of MSV Seaspread wherein it was
said that petitioner Santiago was likely to jump
Ship like his brother in Canada.
Thus, the captain of the ship informed the
petitioner that he would not be leaving for Canada
anymore. However, he was reassured that he
might be considered for deployment on some
future date.
Q: Was an employer-employee created
between Santiago and Smith Bell?
A: No. There is no question that the parties
entered into an employment contract on 3
February 1998, whereby petitioner was
contracted by respondent to render services on
board MSV Seaspread for the consideration of
US$515.00 per month for nine (9) months, plus
overtime pay. However, respondent failed to
deploy petitioner from
the port of Manila to Canada. Considering that
petitioner was not able to depart from the airport
or seaport in the point of hire, the employment
contract did not commence, and no employer-
employee relationship was created between the
parties.
Q: Is the case cognizable by the labor arbiters
of the NLRC?
A: Yes. Despite the absence of an employer-
employee relationship between petitioner and
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respondent, the Court rules that the NLRC has
jurisdiction over petitioners complaint. The
jurisdiction of labor arbiters is not limited to
claims arising from employer-employee
relationships. Section 10 of R.A. No. 8042
(Migrant Workers Act), provides that:
Sec. 10. Money Claims.
Notwithstanding any provision of
law to the contrary, the Labor
Arbiters of the National Labor
Relations Commission (NLRC)
shall have the original and
exclusive jurisdiction to hear and
decide, within ninety (90) calendar
days after the filing of the complaint,
the claims arising out of an
employer-employee relationship or
by virtue of any law or contract
involving Filipino workers for
overseas deployment including
claims for actual, moral,
exemplary and other forms of
damages. x x x [Emphasis
supplied]
Since the present petition involves the
employment contract entered into by petitioner
for overseas employment, his claims are
cognizable by the labor arbiters of the NLRC.
SEAFARERS ARE CONSIDERED
CONTRACTUAL EMPLOYEES AND CANNOT
BE CONSIDERED AS REGULAR EMPLOYEES
UNDER THE LABOR CODE.
REPATRIATION OF WORKERS
Equi Asia Placement Inc., vs DFA and
DOLE G.R. 152214 | September 19,
2006
J. CHICO-NAZARIO
Manny dela Rosa Razon, an overseas Filipino
worker, died of acute cardiac arrest while asleep
at the dormitory of Samsong Textile Processing
Factory in South Korea. It was discovered that
Razon was recruited and deployed by petitioner
Equi Asia. OWWA sent a telegram-directive to
the President/General Manager of the petitioner
which directed them to provide for the repatriation
of the remains and belongings of the OFW.
Labor Law 5
Petitioner claimed that Razon had violated his
employment contracts by unlawfully escaping
from his company assignment without prior
authorization, and thus, they were no longer
responsible for the repatriation of his remains.
The WEO-POEA sent to the petitioner a second
assailed letter-directive, where it held that the
repatriation of an OFT’s remains and the
transport of his personal effects is the primary
responsibility of the principal or agency and to
immediately advance the cost of plane fare
without prior determination of the cause of
worker’s repatriation.
Q: Whether R.A. 8042 imposes on a
recruitment agency the primary responsibility
for the repatriation of a deceased OFW?
A: Yes. While R.A. 8042 does not expressly state
that the petitioner shall be primarily obligated to
transport back here to the Philippines the remains
of the deceased Razon, such duty imposed upon
him as the statute clearly dictates that the
repatriation of remains and transport of the
personal belongings of a deceased worker
and all costs attendant thereto shall be borne
by the principal and/or the local agency.
The mandatory nature nature of the obligation is
apparent in the manner by which the statute was
worded. That the concerned government
agencies opted to demand the performance of
said responsibility upon the petitioner does
not make said directives invalid as the law
plainly obliges a local placement agency such
as herein petitioner to bear the burden of
repatriating the remains of a deceased OFW
with or without recourse to the principal
abroad.
In the case of Section 53, it is clear that in case
of the severance of the employment being due
the OFW’s own doing; it is only fair that he should
shoulder the cost of their homecoming. However,
such needs to be determined in an appropriate
proceeding. But, as it would take time, it is only
proper that an OFW be brought back here in
our country in the soonest possible time lest
he remain stranded in a foreign land during
the whole time the recruitment agency
contests its liability for repatriation.
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EMPLOYER-EMPLOYEE RELATIONSHIP
A. FOUR-FOLD TEST
Republic of the Philippines vs.
Asiapro and SSS
G.R. No. 172101 | November 23, 2007
J. CHICO-NAZARIO
Private respondent Asiapro, as a cooperative, is
composed of owner-members. According to their
by-laws, owner-members are of two categories:
regular members who are entitled to all the rights
and privileges of membership; and associate
members, who had no right to vote or be voted
upon, and only entitled to such rights and
privileges provided in its by-laws.
The primary objectives of Asiapro are to provide
savings and credit facilities and to develop other
livelihood services for its owner-members. The
cooperative entered into several Service
Contracts with Stanfilco –a division of DOLE
Philippines. The owner-members did not receive
compensation or wages from the respondent
cooperative, receiving instead a share in the
service surplus which the cooperative earns from
different areas of trade it engaged in.
In order to enjoy the benefits under the SSS Law,
the owner-members of the respondent
cooperative who were assigned to Stanfilco
requested the services of the latter to register
them with SSS as self-employed and to remit
their contributions as such.
SSS filed a petition before the SSS against
Asiapro and Stanfilco, praying that the
respondent cooperative or Stanfilco be directed
to register as an employer and report the
cooperative owner-members as covered
employees under the compulsory coverage of the
SSS and remit the necessary contributions. The
cooperative filed a motion to dismiss and alleged
that no employer-employee relationship exists
between it and its owner-members, and thus SSC
has no jurisdiction over the respondent
cooperative.
Q: Is there an employer-employee
relationship between Asiapro and its owner-
members exists?
A: Yes, an employer-employee relationship
between them exists.
Labor Law 6
In the determination of the existence of an
employer-employee relationship, the following
elements are considered: a) the selection and
engagement of the workers; b) the payment of
wages by whatever means; c) the power of
dismissal; and d) the power to control the
workers’ conduct with the later assuming
primacy in the overall consideration.
The most important element is the employer’s
control of the employees’ conduct, not only as to
the result of the work to be done, but also as to
the means and method to accomplish. The
power of control refers to the existence of the
power, and not necessarily to the actual
exercise thereof.
It was clear in the Service Contracts that it is
Asiapro which had the exclusive discretion in the
selection and engagement of the owner-
members as well as the team leaders to be
assigned at Stanfilco.
Secondly, the weekly stipends or the so-called
shares in the service surplus given by the
cooperative to its owner-members were
considered to be wages under the ambit of the
second element.
Thirdly, the Service Contracts also showed that
the cooperative has the power to investigate,
discipline and remove the owner-members and
its team leaders rendering services at Stanfilco.
Lastly, it is the respondent cooperative which has
the sole control over the manner and means of
performing the services under the Service
Contracts with Stanfilco as well as the means and
methods of work.
Thus, an employer-employee contract clearly
exists between Asiapro and its owner-
members. The existence of an employer-
employee relationship cannot be negated by
expressly repudiating it in a contract, when
the terms and surrounding circumstances
show otherwise.
The employment status of a person is defined
and prescribed by law and not by what the
parties say it should be.
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B. ECONOMIC REALITY TEST
Orozco vs. Court of Appeals and
Philippine Daily Inquirer
G.R. No. 155207 | August 13, 2008
J. NACHURA
Philippine Daily Inquirer (PDI) engaged the
services of petitioner Orozco to write a weekly
column for its Lifestyle section. She submitted her
articles weekly except for a six-month period
where she was staying in New York, when she
nevertheless sent several articles through mail.
On November 7, 1992, Orozco’s column
appeared in the PDI for the last time. Petitioner
alleged that her then editor told her that the Editor
in Chief wanted to stop publishing her column and
advised her to talk to the Chief herself. The PDI
Chairperson allegedly asked to stop the
publication of her column due to the number of
columnists already writing for the Lifestyle
section. PDI had had a discussion on how to
improve the section. It was agreed that the
number of columnists would be cut, and only
those whose columns were well-written, with
regular feedback and following, would remain.
It was found by PDI that petitioner’s column was
poorly written and did not meet the high
standards of the newspaper, hence the need to
terminate said column.
Q: Whether or not Orozco was an employee of
PDI.
A: No, Orozco was not an employee of PDI.
This court has constantly adhered to the four-fold
test to determine whether an employer-employee
relationship existed between parties. The four
elements of an employment relationship are: a)
the selection and engagement of the workers;
b) the payment of wages by whatever means;
c) the power of dismissal; and d) the power to
control the workers’ conduct with the later
assuming primacy in the overall
consideration.
Of those four elements, it is the power of control
which is most crucial. Clearly, the petitioner
misconstrued the ‘control test’. Not all rules
imposed by the hiring party on the hired party
indicate that the latter is an employee of the
former. Rules which serve as general
guidelines towards the achievement of the
Labor Law 7
mutually desired result are not indicative of
the power of control.
Petitioner failed to show that PDI, acting through
its editors, dictated how she was to write her
articles each week. Although petitioner had a
weekly deadline to meet, petitioner is not
precluded from submitting her column ahead of
time or from submitting columns to be published
at a later time. More importantly, respondents did
not dictate upon the petitioner the subject matter
of the columns, but rather, only imposed the
general guidelines that the article should conform
to.
When a person who works for another performs
his job more or less at his own pleasure, in the
manner he sees fit, not subject to definite hours
or conditions of work, and is compensated
according to the result of his efforts and not the
amount thereof, no employer-employee
relationship exists.
Aside from the control test, the Supreme Court
has also made use of the Economic Reality test.
The economic realities prevailing within the
activity or between the parties are examined,
taking into consideration the totality of
circumstances surrounding the true nature of
the relationship between the parties.
In the case at bar, Orozco’s main occupation is
not as a columnist for PDI, but as a women’s right
advocate. She herself admitted that she
contributed articles to other publications. Thus, it
cannot be said that she was dependent on PDI
for her continued employment in respondent’s
line of business.
C. OTHER FORMS OF RELATIONSHIP
1. INDEPENDENT CONTRACTOR/ JOB
CONTRACTORS
Singer Sewing Machine vs. Drilon
G.R. No. 91307 | January 24, 1991
J. GUTIERREZ, JR
The respondent union filed a petition for direct
certification as the sole and exclusive bargaining
agent for all collectors of the Singer Sewing
Machine Baguio, Baguio branch. The Company,
however, opposed the same on the ground that
the union members were actually not employees,
but rather, were independent contractors as
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evidenced by the collection agency agreement
that they had signed.
The Collection Agency Agreement which defines
the relationship between the Company and each
of the union members state that a collector is
designated as a collecting agent who is to be
considered at all times as an independent
contractor and not employee of the Company.
Meanwhile, the respondents rely on other
features to strengthen their position that the
collectors are employees. They quote paragraph
2 which states that an agent shall utilize only
receipt forms authorized and issued by the
Company. They also note paragraph 3 which
states that an agent has to submit and deliver at
least once a week or as often as required a report
of all collections made using report forms
furnished by the Company. Paragraph 4 on the
monthly collection quota required by the
Company is deemed by respondents as a control
measure over the means by which an agent is to
perform his services.
Q: Whether the union members are
employees?
A: No. The most important element of the control
test is not satisfied by the terms and condition of
the contracts. There is nothing in the contracts
between the Company and the private
respondents that implies control by the Company
over the means and method of achieving the
results. The Agreement confirms the status of the
collecting agent in this case as an independent
contractor not only because he is explicitly
described as such but also because the
provisions permit him to perform collection
services for the company without being subject to
the control of the latter except only as to the result
of his work.
The requirement that collection agents utilize only
receipt forms and report forms issued by the
Company and that reports shall be submitted at
least once a week is not necessarily an indication
of control over the means by which the job of
collection is to be performed. The agreement
itself specifically explains that receipt forms shall
be used for the purpose of avoiding a co-mingling
of personal funds of the agent with the money
collected on behalf of the Company. Likewise, the
use of standard report forms as well as the
regular time within which to submit a report of
collection are intended to facilitate order in office
Labor Law 8
procedures. Even if the report requirements are
to be called control measures, any control is only
with respect to the end result of the collection
since the requirements regulate the things to be
done after the performance of the collection job
or the rendition of the service.
The monthly collection quota is a normal
requirement found in similar contractual
agreements and is so stipulated to encourage a
collecting agent to report at least the minimum
amount of proceeds. In fact, paragraph 5, section
b gives a bonus, aside from the regular
commission every time the quota is reached. As
a requirement for the fulfillment of the contract, it
is subject to agreement by both parties. Hence, if
the other contracting party does not accede to it,
he can choose not to sign it. From the records, it
is clear that the Company and each collecting
agent intended that the former take control only
over the amount of collection, which is a result of
the job performed.
Sonza vs ABS CBN
GR No. 138051 (2004) 431 SCRA 583
J. CARPIO, J.
Respondent ABS-CBN signed an Agreement
with the Mel and Jay Management Development
Corporation where the latter agreed to provide
petitioner Sonza’s services exclusively to ABS-
CBN as talent for radio and television. Later,
Sonza tendered a letter rescinding their
agreement and filed a complaint before the DOLE
for payment of his labor standard benefits. ABS-
CBN contends on the ground that no employer-
employee relationship existed between the
parties. The Labor Arbiter found for respondent
citing that Sonza as a ‘talent’ cannot be
considered an employee of petitioner. Both NLRC
and CA affirmed.
Q: Whether or not an employer-employee
relationship existed between SONZA and
ABS-CBN.
A: No. The control test is the most important test
our courts apply in distinguishing an employee
from an independent contractor. This test is
based on the extent of control the hirer exercises
over a worker. The greater the supervision and
control the hirer exercises, the more likely the
worker is deemed an employee. The converse
holds true as well – the less control the hirer
8
Lyceum of the Philippines University College of Law
exercises, the more likely the worker is
considered an independent contractor.
ABS-CBN was not involved in the actual
performance that produced the finished product
of SONZA’s work. ABS-CBN did not instruct
SONZA how to perform his job. ABS-CBN merely
reserved the right to modify the program format
and airtime schedule "for more effective
programming.” ABS-CBN’s sole concern was the
quality of the shows and their standing in the
ratings. Clearly, ABS-CBN did not exercise
control over the means and methods of
performance of SONZA’s work.
Ushio Marketing vs NLRC
GR No. 124551 | August 28, 1998
J. DAVIDE, JR
Private respondent Severino Antonio was an
electrician who worked within the premises of
petitioner Ushio's car accessory shop in Banawe,
Quezon City. On August 22, 1994, private
respondent filed a complaint for illegal dismissal.
In Petitioner's Motion to Dismiss, she alleged that
it was a single proprietorship engaged in the
business of selling automobile spare parts and
accessories. Petitioner claimed that private
respondent was not among her employees but a
free lance operator. LA dismissed the case but
NLRC reversed and held that Antonio was
illegally dismissed.
Q: Whether or not Antonio is an employee or
an independent contractor.
A: Antonio is an Independent Contractor. The so-
called "control test" is commonly regarded as the
most crucial and determinative indicator of the
presence or absence of an employer-employee
relationship. 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 achieved, but also
the manner and means to be used in reaching
that end. Here, the power to control the
employee's conduct is absent. The conduct of
Antonio was not subject to the control and
supervision of petitioner or any of its personnel.
There was no allegation of this, nor was evidence
presented to prove it other than the bare
allegation of private respondent that he could not
leave the work premises without permission from
petitioner. He himself decided how he would
render electrical services to customers. If it is true
Labor Law 9
that private respondent was hired as an
electrician, petitioner would have exercised
supervision and control over the, means and
manner he performed his electrical services for,
otherwise, if private respondent's work was
unsatisfactory, it would reflect on the business of
petitioner. It is clear that petitioner did not have
the power to control private respondent with
respect to the means and methods by which his
work was to be accomplished.
Categories and Classifications of
employment and workers
Regular employment
Magsalin vs. NOWM
GR No. 148492 | May 9, 2003
J. VITUG
Petitioner Coca-Cola Bottlers Phils., Inc.,
engaged the services of respondent workers as
"sales route helpers" for a limited period of five
months. After five months, respondent workers
were employed by petitioner company on a day-
to-day basis. The workers were hired to substitute
for regular sales route helpers whenever the latter
would be unavailable or when there would be an
unexpected shortage of manpower in any of its
work places or an unusually high volume of work.
Ultimately, respondent workers asked petitioner
company to extend to them regular appointments.
Petitioner company refused. The respondents
filed with the NLRC a complaint for the
regularization of their employment with petitioner
company. The Voluntary Arbitrator dismissed the
complaint but the CA reversed and ruled that
respondents were illegally dismissed are were
regular employees.
Q: Whether or not the nature of work of
respondents in the company qualify them to
be regular employees.
A: Yes. Respondents, when hired, would go with
route salesmen on board delivery trucks and
undertake the laborious task of loading and
unloading softdrink products of petitioner
company to its various delivery points.
In determining whether an employment should be
considered regular or non-regular, the applicable
test is the reasonable connection between the
9
Lyceum of the Philippines University College of Law
particular activity performed by the employee in
relation to the usual business or trade of the
employer. The standard, supplied by the law
itself, is whether the work undertaken is
necessary or desirable in the usual business or
trade of the employer, a fact that can be assessed
by looking into the nature of the services
rendered and its relation to the general scheme
under which the business or trade is pursued in
the usual course. The repeated rehiring of
respondent workers and the continuing need for
their services clearly attest to the necessity or
desirability of their services in the regular conduct
of the business or trade of petitioner company.
Casual Employment
Capule vs. NLRC 191 SCRA 374 |
November 12, 1990
J. GANCAYCO
Petitioners were hired to cut cogon grass and
weeds at the back of the factory building used by
private respondents. They were not required to
work on fixed schedule and they worked on any
day of the week on their own discretion and
convenience. The services of the petitioners were
terminated by the private respondent on July 13,
1987. Petitioners filed a complaint for illegal
dismissal with the NLRC. LA held that the
dismissal of the petitioners to be illegal and
requiring the private respondent to reinstate them
immediately to their former position with full
backwages and without loss of seniority rights.
But NLRC reversed said decision.
Q: Whether or not casual or temporary
employees may be dismissed by the employer
before the expiration of the one-year period of
employment.
A: Yes. "Article 280. Regular and Casual
Employment. - The provisions of written
agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties,
an employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has
been fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
performed is seasonal in nature and the
employment is for the duration of the season.
Labor Law 10
An employment shall be deemed to be casual if it
is not covered by the preceding paragraph:
Provided, That, any employee who has rendered
at least one year of service, whether such service
is continuous or broken, shall be considered a
regular employee with respect to the activity in
which he is employed and his employment shall
continue while such actually exists.” Thus,
petitioners are casual employees who cannot be
considered regular employees under the
aforestated provision of the Labor Code.
Seasonal Employment
Gapayao vs. Fulo & SSS
GR No. 193493 | 13 June 2013
CJ. SERENO
Jaime Fulo had been working in a farm owned by
Jaime Gapayao since 1983. In November 1997,
Jaime Fulo was electrocuted while working in the
said farm. Jaime Fulo died. Thereafter, Rosario
Fulo, the widow of Jaime Fulo, filed a claim for
death benefits before the SSS (Social Security
System). It turned out however that Jaime Fulo
was never registered with the SSS. Eventually,
SSS ordered Gapayao, as the employer, to pay
the SSS contributions due with penalty.
Gapayao averred he cannot be made liable to
pay the SSS contributions because according to
him there was no employer-employee
relationship between him and Jaime Fulo. He
argued, among others, that Jaime Fulo was not
his employee but was rather an independent
contractor whose tasks were not subject to
petitioner’s control and supervision.
Q: Whether or not there exists between the
deceased Jaime Fulo and petitioner an
employer-employee relationship.
A: Yes. Fulo was a regular employee and was
thus entitled to receive SSS benefits, among
others. The primary standard, therefore, of
determining a regular employment is the
reasonable connection between the particular
activity performed by the employee in relation to
the usual business or trade of the employer. The
test is whether the former is usually necessary or
desirable in the usual business or trade of the
employer. The connection can be determined by
considering the nature of the work performed and
its relation to the scheme of the particular
business or trade in its entirety. Also if the
10
Lyceum of the Philippines University College of Law
employee has been performing the job for at least
one year, even if the performance is not
continuous or merely intermittent, the law deems
the repeated and continuing need for its
performance as sufficient evidence of the
necessity if not indispensability of that activity to
the business. Hence, the employment is also
considered regular, but only with respect to such
activity and while such activity exists.
Gapayao is considered a pakyaw worker.
Pakyaw workers are considered regular
employees for as long as their employers have
control over them. The power of the employer to
control the work of the employee is considered
the most significant determinant of the existence
of an employer-employee relationship. This is the
so-called control test and is premised on whether
the person for whom the services are performed
reserves the right to control both the end
achieved and the manner and means used to
achieve that end.” It should be remembered that
the control test merely calls for the existence of
the right to control, and not necessarily the
exercise thereof. It is not essential that the
employer actually supervises the performance of
duties by the employee. It is enough that the
former has a right to wield the power.
Project Employment
DM Consunji vs. Jamin GR No. 192514
| 18 April 2012
J. BRION
Petitioner D.M. Consunji, Inc. (DMCI) hired
respondent Estelito L. Jamin as a laborer. He
became a helper carpenter. Since his initial
hiring, Jamins employment contract had been
renewed a number of times. On March 20, 1999,
his work at DMCI was terminated due to the
completion of the SM Manila project. This
termination marked the end of his employment
with DMCI as he was not rehired again. Jamin
filed a complaint for illegal dismissal, with several
money claims against DMCI. Jamin alleged that
DMCI terminated his employment without a just
and authorized cause at a time when he was
already 55 years old and had no independent
source of livelihood. He claimed that he rendered
service to DMCI continuously for almost 31 years.
DMCI argued that it hired Jamin on a project-to-
project basis, from the start of his engagement in
1968 until the completion of its SM Manila project
on March 20, 1999 where Jamin last worked.
Labor Law 11
With the completion of the project, it terminated
Jamins employment. The LA dismissed the
complaint for lack of merit and NLRC affirmed.
CA reversed the NLRC decision and ruled that
Jamin was a regular employee.
Q: Whether or not Jamin is a regular
employee
A: Yes. The CA's findings were based on: (1)
Jamin's repeated and successive engagements
in DMCI's construction projects, and (2) Jamin's
performance of activities necessary or desirable
in DMCI's usual trade or business. The Court
noted that while the contracts indeed show that
Jamin had been engaged as a project employee,
there was an almost unbroken string of Jamin's
rehiring from December 17, 1968 up to the
termination of his employment on March 20,
1999. While the history of Jamin's employment
(schedule of projects) relied upon by DMCI shows
a gap of almost four years in his employment for
the period between July 28, 1980 and June 13,
1984, the gap was caused by the company's
omission of the three projects above mentioned.
To reiterate, Jamin's employment history with
DMCI stands out for his continuous, repeated and
successive rehiring in the company's construction
projects. In all the 38 projects where DMCI
engaged Jamin's services, the tasks he
performed as a carpenter were indisputably
necessary and desirable in DMCI's construction
business. He might not have been a member of a
work pool as DMCI insisted that it does not
maintain a work pool, but his continuous rehiring
and the nature of his work unmistakably made
him a regular employee.
Aurora Land
Projects Corp
vs. NLRC 266
SCRA 48
Jan 2, 1997
J. HERMOSISIMA, JR.
Respondent DAGUI was hired by AURORA
Tanjangco in 1953 to take charge of the
maintenance and repair of the Tanjangco
apartments and residential buildings. He was to
perform carpentry, plumbing, electrical and
masonry work.
Upon the death of AURORA, her daughter,
petitioner Teresita Tanjangco Quazon, took over
the administration of all the Tanjangco properties.
11
Lyceum of the Philippines University College of Law
On June 8, 1991, Mrs. Quazon suddenly told
DAGUI: "Wala ka nang trabaho mula ngayon," on
the alleged ground that his work was
unsatisfactory. On August 29, 1991, private
respondent, who was then already sixty-two (62)
years old, filed a complaint for illegal dismissal
with the Labor Arbiter.
Petitioners contends that private respondent
Dagui was an independent contractor,
particularly a job contractor, and not an employee
of Aurora Plaza.
Q: (1) Whether or not private respondent
Honorio Dagui was an employee of
petitioners; and
(2) If he were, whether or not he was
illegally dismissed.
A: DAGUI is not a job contractor because he has
no substantial capital (Please see Job contracting
vs labor only contracting). And there is an
employer-employee relationship (four fold test
SWDC)
(1) DAGUI is a regular employee.
Throughout the duration of private
respondent's employment as maintenance man,
there should have been filed as many reports of
termination as there were projects actually
finished, if it were true that private respondent
was only a project worker. Failure of the
petitioners to comply with this simple, but
nonetheless compulsory, requirement is proof
that Dagui is not a project employee.
Petitioners should have submitted a report of
termination to the nearest public employment
office everytime his employment is terminated
due to completion of each project, as required by
Policy Instruction No. 20, which provides:
"Project employees are not entitled to termination
pay if they are terminated as a result of the
completion of the project or any phase thereof in
which they are employed, regardless of the
number of project in which they have been
employed by a particular construction company.
Moreover, the company is not required to obtain
a clearance from the Secretary of Labor in
connection with such termination. What is
required of the company is a report to the nearest
Labor Law 12
Public Employment Office for statistical
purposes.
NOTE: Based on the Hanjin case (2008), a project
employee will become a regular employee if the
following are not present:
1. The duration is determined at the time of
engagement
2. Employee is informed at the time of hiring
3. The work to be performed is in connection
with the project
4. The employee, while not employed, is free
to offer his services to another
5. Submission of Termination reports to
DOLE
6. Undertaking in the employment contract by
the employer to pay completion bonus
(2) Illegal dismissal
Jurisprudence abound as to the rule that the twin
requirements of due process, substantive and
procedural, must be complied with, before a valid
dismissal exists. These mandatory requirements
were undeniably absent in the case at bar.
Contractual
employees/
Fixed period
employment
Brent School vs.
Zamora 181
SCRA 702 |
Feb 5, 1990
J. NARVASA
Private respondent Doroteo R. Alegre was
engaged as athletic director by petitioner Brent
School, Inc. The contract fixed a specific term for
its existence, five (5) years, i.e., from July 18,
1971, the date of execution of the agreement, to
July 17, 1976.
On April 20,1976, Alegre was given a copy of the
report filed by Brent School with the Department
of Labor advising of the termination of his
services effective on July 16, 1976. The stated
ground for the termination was "completion of
contract, expiration of the definite period of
employment." Although protesting the announced
termination stating that his services were
necessary and desirable in the usual business of
his employer, and his employment lasted for 5
years - therefore he had acquired the status of
regular employee - Alegre accepted the amount
12
Lyceum of the Philippines University College of Law
of P3,177.71, and signed a receipt therefor
containing the phrase, "in full payment of services
for the period May 16, to July 17, 1976 as full
payment of contract."
The Regional Director considered Brent School's
report as an application for clearance to terminate
employment (not a report of termination), and
accepting the recommendation of the Labor
Conciliator, refused to give such clearance and
instead required the reinstatement of Alegre, as a
"permanent employee," to his former position
without loss of seniority rights and with full back
wages.
Q: Whether or not the provisions of the Labor
Code, as amended, have anathematized
"fixed period employment" or employment for
a term.
A: Respondent Alegre's contract of employment
with Brent School having lawfully terminated with
and by reason of the expiration of the agreed term
of period thereof, he is declared not entitled to
reinstatement.
The employment contract between Brent School
and Alegre was executed on July 18, 1971, at a
time when the Labor Code of the Philippines (P.D.
442) had not yet been promulgated. At that time,
the validity of term employment was impliedly
recognized by the Termination Pay Law, R.A.
1052, as amended by R.A. 1787. Prior, thereto, it
was the Code of Commerce (Article 302) which
governed employment without a fixed period, and
also implicitly acknowledged the propriety of
employment with a fixed period. The Civil Code of
the Philippines, which was approved on June 18,
1949 and became effective on August 30,1950,
itself deals with obligations with a period. No
prohibition against term-or fixed-period
employment is contained in any of its articles or is
otherwise deducible therefrom.
It is plain then that when the employment contract
was signed between Brent School and Alegre, it
was perfectly legitimate for them to include in it a
stipulation fixing the duration thereof Stipulations
for a term were explicitly recognized as valid by
this Court.
Article 320 originally stated that the "termination of
employment of probationary employees and those
employed WITH A FIXED PERIOD shall be
subject to such regulations as the Secretary of
Labor may prescribe." Article 321 prescribed the
Labor Law 13
just causes for which an employer could terminate
"an employment without a definite period." And
Article 319 undertook to define "employment
without a fixed period" in the following manner:
…where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be
performed is seasonal in nature and the
employment is for the duration of the season.
Subsequently, the foregoing articles regarding
employment with "a definite period" and "regular"
employment were amended by Presidential
Decree No. 850, effective December 16, 1975.
As it is evident that Article 280 of the Labor Code,
under a narrow and literal interpretation, not only
fails to exhaust the gamut of employment
contracts to which the lack of a fixed period would
be an anomaly, but would also appear to restrict,
without reasonable distinctions, the right of an
employee to freely stipulate with his employer the
duration of his engagement, it logically follows that
such a literal interpretation should be eschewed or
avoided. The law must be given a reasonable
interpretation, to preclude absurdity in its
application.
Paraphrasing Escudero, respondent Alegre's
employment was terminated upon the expiration of
his last contract with Brent School on July 16, 1976
without the necessity of any notice. The advance
written advice given the Department of Labor with
copy to said petitioner was a mere reminder of the
impending expiration of his contract, not a letter of
termination, nor an application for clearance to
terminate which needed the approval of the
Department of Labor to make the termination of his
services effective. In any case, such clearance
should properly have been given, not denied.
Probation
ary
employme
nt
Holiday Inn Manila vs.
NLRC 226 SCRA 417
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Lyceum of the Philippines University College of Law
Sept 14, 1993
J. CRUZ
Elena Honasan applied for employment with the
Holiday Inn and was on April 15, 1991, accepted
for "on-the-job training" as a telephone operator for
a period of three weeks. For her services, she
received food and transportation allowance.
On May 13, 1992, after completing her training,
she was employed on a "probationary basis" for a
period of six months ending November 12, 1991.
Her employment contract stipulated that the Hotel
could terminate her probationary employment at
any time prior to the expiration of the six-month
period in the event of her failure (a) to learn or
progress in her job; (b) to faithfully observe and
comply with the hotel rules and the instructions
and orders of her superiors; or (c) to perform her
duties according to hotel standards.
On November 8, 1991, four days before the
expiration of the stipulated deadline, Holiday Inn
notified her of her dismissal, on the ground that her
performance had not come up to the standards of
the Hotel.
Q: Is Elena a regular employee of Holiday Inn?
A: YES. Elena had become a regular employee
and cannot be dismissed as a probationer.
Probation is the period during which the
employer may determine if the employee is
qualified for possible inclusion in the regular force.
In the case at bar, the period was for three
weeks, during Honasan's on-the-job training.
When her services were continued after this
training, the petitioners in effect recognized that
she had passed probation and was qualified to
be a regular employee. Honasan was certainly
under observation during her three-week on-the-
job training. If her services proved
unsatisfactory then, she could have been
dropped as early as during that period. But she
was not. On the contrary, her services were
continued, presumably because they were
acceptable, although she was formally placed this
time on probation.
Even if it be supposed that the probation did not
end with the three-week period of on-the-job
training, there is still no reason why that period
should not be included in the stipulated six-month
period of probation. Honasan was accepted for
on-the-job training on April 15, 1991. Assuming
Labor Law 14
that her probation could be extended beyond
that date, it nevertheless could continue only up
to October 15, 1991, after the end of six months
from the earlier date. Under this more lenient
approach, she had become a regular employee
of Holiday Inn and acquired full security of tenure
as of October 15, 1991. The consequence is that
she could no longer be summarily separated on
the ground invoked by the petitioners. As a regular
employee, she had acquired the protection of
Article 279 of the Labor Code stating as follows:
Art. 279. Security of Tenure — In cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause
or when authorized by this Title. An employee
who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority
rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.
Phil Daily Inquirer vs.
Magtibay
528 SCRA 355 |
July 24, 2007
J. GARCIA
The Philippine Daily Inquirer (PDI) hired
Magtibay, on contractual basis, to assist, for a
period of 5 months, the regular phone operator.
After the expiration of Magtibay’s contractual
employment, PDI announced the creation and
availability of a new position for a 2nd
telephone operator who would undergo
probationary employment. After the usual
interview for the 2nd telephone operator slot,
PDI chose to hire Magtibay on a probationary
basis for a period of 6 months. The signing of
a written contract of employment followed.
A week before the end the agreed 6-month
probationary period,a PDI officer handed
Magtibay his termination paper, grounded on
his alleged failure to meet company standards.
Aggrieved, Magtibay immediately filed a
complaint for illegal dismissal and damages
before the LA.
Q: Was there illegal dismissal?
A: No. Magtibay was a probationary employee
14
Lyceum of the Philippines University College of Law
and was dismissed due to failure to meet the
reasonable standards of the company.
It is undisputed that PDI apprised Magtibay of
the ground of his termination, i.e., he failed to
qualify as a regular employee in accordance
with reasonable standards made known to him
at the time of engagement, only a week before
the expiration of the six-month probationary
period. Given this perspective, does this make
his termination unlawful for being violative of his
right to due process of law? It does not.
By the very nature of a probationary
employment, the employee knows from the
very start that he will be under close
observation and his performance of his
assigned duties and functions would be under
continuous scrutiny by his superiors. It is in
apprising him of the standards against which
his performance shall be continuously
assessed where due process regarding the
second ground lies, and not in notice and
hearing as in the case of the first ground.
Even if perhaps he wanted to, Magtibay cannot
deny as he has not denied PDIs assertion that
he was duly apprised of the employment
standards expected of him at the time of his
probationary employment when he underwent
a one-on-one orientation with PDIs personnel
assistant, Ms. Rachel Isip-Cuzio. Neither has
he denied nor rebutted PDIs further claim that
his direct superior, Benita del Rosario, briefed
him regarding his responsibilities in PDI.
Lest it be overlooked, Magtibay had previously
worked for PDI as telephone operator from
February 7, 1995 to July 31, 1995 as a
contractual employee. Thus, the Court
entertains no doubt that when PDI took him in
on September 21, 1995, Magtibay was already
very much aware of the level of competency
and professionalism PDI wanted out of him for
the entire duration of his probationary
employment.
PDI was only exercising its statutory hiring
prerogative when it refused to hire Magtibay on
a permanent basis upon the expiration of the
six-month probationary period. This was
established during the proceedings before the
labor arbiter and borne out by the records and
the pleadings before the Court. When the
NLRC disregarded the substantial evidence
establishing the legal termination of Magtibays
Labor Law 15
probationary employment and rendered
judgment grossly and directly contradicting
such clear evidence, the NLRC commits grave
abuse of discretion amounting to lack or excess
of jurisdiction. It was, therefore, reversible error
on the part of the appellate court not to annul
and set aside such void judgment of the NLRC.
Mercado vs. AMA
Computer College
618 SCRA 218 |
April 13, 2010
J. BRION
One of AMACCs biggest schools in the country is
its branch at Paranaque City. The petitioners
were faculty members who started teaching at
AMACC on May 25, 1998. The petitioners
executed individual Teachers Contracts for each
of the trimesters that they were engaged to teach.
For the school year 2000-2001, AMACC
implemented new faculty screening guidelines
regarding salary increase.
The petitioners failed to obtain a passing rating
based on the performance standards; hence
AMACC did not give them any salary increase.
Because of AMACCs action on the salary
increases, the petitioners filed a complaint with
the Arbitration Branch of the NLRC.
On September 7, 2000, the petitioners
individually received a memorandum from
AMACC, through Human Resources Supervisor
Mary Grace Beronia, informing them that with the
expiration of their contract to teach, their contract
would no longer be renewed.
The petitioners amended their labor arbitration
complaint to include the charge of illegal
dismissal against AMACC.
AMACC contended in response that the
petitioners worked under a contracted term under
a non-tenured appointment and were still within
the three-year probationary period for teachers.
Their contracts were not renewed for the
following term because they failed to pass the
Performance Appraisal System for Teachers
(PAST) while others failed to comply with the
other requirements for regularization, promotion,
or increase in salary. This move, according to
AMACC, was justified since the school has to
maintain its high academic standards.
15
Lyceum of the Philippines University College of Law
Q: Was there a valid dismissal?
A: NO. The employees were illegally dismissed.
a. Rule on Employment
on Probationary Status
A reality we have to face in the
consideration of employment on probationary
status of teaching personnel is that they are not
governed purely by the Labor Code. The Labor
Code is supplemented with respect to the period
of probation by special rules found in the Manual
of Regulations for Private Schools.
(the probationary period for academic
personnel shall not be more than three (3)
consecutive years of satisfactory service for
those in the elementary and secondary levels, six
(6) consecutive regular semesters of satisfactory
service for those in the tertiary level, and nine (9)
consecutive trimesters of satisfactory service for
those in the tertiary level where collegiate
courses are offered on a trimester basis.)
May the probationary teacher be validly
dismissed for expiration of the contract to teach?
Answer: NO! Termination of a probationary
employee must be for his/her failure to comply
with the reasonable standards for regular
employment made known at the time of the
engagement, and NOT simply because the
probationary period has expired.
The Supreme Court stated that nothing is
illegitimate in defining the school teacher on fixed
term basis. HOWEVER, the school should not
forget that its system of fixed term contract is
a system that operates during the
probationary period and for this reason is
subject to the terms of Article 281 of the Labor
Code. Unless this reconciliation is made, the
requirements of this Article on probationary status
would be fully negated as the school may freely
choose not to renew contracts simply because
their terms have expired.
Given the clear constitutional and statutory
intents, the SC concluded that in a situation
where the probationary status overlaps with a
fixed term contract not specifically used for the
fixed term it offers, Article 281 should assume
primacy and the fixed period character
Apprentic
es/Learner
s compliance with labor provisions on working
Labor Law 16
Filamer Christian
Institute vs Court of
Appeals
GR No. 75112,
October 16, 1990
CJ. FERNAN
Daniel Funtecha was a working student at the
Filamer Christian Institute. He was assigned as
the school janitor to clean the school 2 hours
every morning. Allan Masa was the son of the
school president and at the same time he was
the school’s jeepney service driver. After driving
the students to their homes, Masa returned to
the school to report and thereafter have to go
home with the jeep so that he could fetch the
students early in the morning. Masa and
Funtecha live in the same place so they usually
go home together. Funtecha had a student
driver’s license so Masa let him take the driver’s
seat. While Funtecha was driving, he
accidentally hit an elderly Kapunan which led to
his hospitalization for 20 days. Kapunan filed a
criminal case and an independent civil action
based on Article 2180 against Funtecha.
In the independent civil action, the lower court
ruled that Filamer is subsidiarily liable for the
tortious act of Funcheta and was compelled to
pay for damages based on Article 2180 which
provides that employers shall be liable for the
damages caused by their employees and
household helpers acting within the scope of
their assigned tasks. Filamer assailed the
decision and it argued that under Section 14,
Rule X, Book III of the Labor Code IRR, working
scholars are excluded from the employment
coverage hence there is no employer-employee
relations between Filamer and Funcheta; that
the negligent act of Funcheta was due to
negligence only attributable to him alone as it is
outside his assigned task of being the school
janitor. The CA denied Filamer’s appeal but the
Supreme Court agreed with Filamer. Kapunan
filed for a motion for reconsideration.
Q: Whether or not Filamer should be held
subsidiarily liable.
A: Yes. This time, the SC ruled in favor of
Kapunan (actually his heirs cause by this time
Kapunan was already dead). The provisions of
Section 14, Rule X, Book III of the Labor Code
IRR was only meant to provide guidelines as
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Lyceum of the Philippines University College of Law
conditions, rest periods, and wages is
concerned. This does not in any way affect the
provisions of any other laws like the civil code.
The IRR cannot defeat the provisions of the Civil
Code. In other words, Rule X is merely a guide
to the enforcement of the substantive law on
labor. There is a distinction hence Section 14,
Rule X, Book III of the Rules is not the decisive
law in a civil suit for damages instituted by an
injured person during a vehicular accident
against a working student of a school and
against the school itself.
The present case does not deal with a labor
dispute on conditions of employment between
an alleged employee and an alleged employer.
It invokes a claim brought by one for damages
for injury caused by the patently negligent acts
of a person, against both doer-employee and his
employer. Hence, the reliance on the
implementing rule on labor to disregard the
primary liability of an employer under Article
2180 of the Civil Code is misplaced. An
implementing rule on labor cannot be used by an
employer as a shield to void liability under the
substantive provisions of the Civil Code.
Funtecha is an employee of Filamer. He need not
have an official appointment for a driver’s position
in order that Filamer may be held responsible for
his grossly negligent act, it being sufficient that
the act of driving at the time of the incident was
for the benefit of Filamer (the act of driving the
jeep from the school to Masa’s house is beneficial
to the school because this enables Masa to do a
timely school transportation service in the
morning). Hence, the fact that Funtecha was not
the school driver or was not acting with the scope
of his janitorial duties does not relieve Filamer of
the burden of rebutting the presumption juris
tantum that there was negligence on its part
either in the selection of a servant or employee,
or in the supervision over him. Filamer has failed
to show proof of its having exercised the required
diligence of a good father of a family over its
employees Funtecha and Allan.
Handicapped
workers
Bernardo vs. NLRC &
Far East Bank
GR No. 122917 |
Labor Law 17
July 12, 1999
J. PANGANIBAN,
Far East Bank (Respondent) entered into
employment contracts with deaf-mutes, who
were hired as money sorters under uniform
“Employment Contracts for Handicapped
Workers.” Every 6 months, these workers
renewed their employment contracts. The
complainants here complain that they were
regular employees and that they have been
illegally dismissed.
Respondent argued that complainants were not
regular employees, but a special class of workers
who were hired because of political and civic
accommodation. And that the Bank’s corporate
philosophy does not allow the hiring and
regularizing handicapped workers unless it was
on a special arrangement basis. The Labor
Arbiter ruled in favor of respondent bank workers.
NLRC affirmed.
Q: Whether or not petitioner workers are
regular employees.
A: YES, petitioners are regular employees. The
fact that after the expiry of their 6 month contract,
respondent bank renewed their contracts shows
that these workers were qualified to perform the
responsibilities of their positions.
The Magna Carta for Disabled Persons mandates
that a qualified disabled employee should be
given the same terms of employment as a
qualified able-bodied person. This being so,
petitioners are thus covered by Art. 286 of the
Labor Code which defines regular employment to
be that the employee has been engaged to
perform activities usually necessary or desirable
in the usual business or trade of the employer.
The task of counting and sorting bills is necessary
to the business of respondent bank. Except for
sixteen of them, the petitioners performed these
tasks for more than six months. Therefore, the
27 petitioners should be deemed regular
employees entitled to security of tenure. Their
services may only be terminated for a just and
authorized cause. Because respondents failed to
show such cause, these 27 petitioners are
deemed illegally dismissed and hence entitled to
backwages and separation pay.
In rendering this Decision, the Court
emphasizes not only the constitutional bias in
favor of the working class, but also the concern of
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Lyceum of the Philippines University College of Law Labor Law 18

the State for the plight of the disabled. The noble

objectives of Magna Carta for Disabled Persons
are not based merely on charity or
accommodation, but on justice and the equal
treatment of qualified persons, disabled or not. In
the present case, the handicap of petitioners
(deaf-mutes) is not a hindrance to their work. The
eloquent proof of this statement is the repeated
renewal of their employment contracts. Why then
should they be dismissed, simply because they
are physically impaired? The Court believes, that,
after showing their fitness for the work assigned
to them, they should be treated and granted the
same rights like any other regular employees.

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