BITOY JAVIER (DANILO P. JAVIER), Petitioner, vs. FLY ACE
Ong contracted Javier roughly 5 to 6 times only in a
CORPORATION/FLORDELYN CASTILLO, Respondents.
G.R. No. 192558 * February 15, 2012
FACTS:
 In 2008, petitioner Javier filed a complaint before the NLRC
for underpayment of salaries and other labor standard
benefits.
 He alleged that he was an employee of respondent Fly Ace
since September 2007, performing various tasks at the
respondent’s warehouse such as cleaning and arranging the
canned items before their delivery to certain locations, except
in instances when he would be ordered to accompany the
company’s delivery vehicles, as pahinante.
 During his employment, he was not issued an identification
card and payslips by the company.
 On May 6, 2008, he reported for work but he was no longer
allowed to enter the company premises by the security guard
upon the instruction of Ruben Ong (Mr. Ong), his superior.
 Petitioner Javier contends that he was terminated from his
employment without notice; and that he was neither given the
opportunity to refute the cause/s of his dismissal from work.
 To support his allegations, petitioner Javier presented an
affidavit of one Bengie Valenzuela who alleged that Javier
was a stevedore or pahinante of Fly Ace from September
2007 to January 2008.
 Respondent Fly Ace averred that it was engaged in the
business of importation and sales of groceries.
 Sometime in December 2007, Javier was contracted by its
employee, Mr. Ong, as extra helper on a pakyaw basis at an
agreed rate of ₱ 300.00 per trip, which was later increased to
₱ 325.00 in January 2008.
 Mr.
month whenever the vehicle of its contracted hauler, Milmar
Hauling Services, was not available.
 On April 30, 2008, Fly Ace no longer needed the services of
Javier. Denying that he was their employee, Fly Ace insisted
that there was no illegal dismissal.
 Fly Ace submitted a copy of its agreement with Milmar
Hauling Services and copies of acknowledgment receipts
evidencing payment to Javier for his contracted services
bearing the words, "daily manpower (pakyaw/piece rate pay)"
and the latter’s signatures/initials.
 LABOR ARBTER’S DECISION: Dismissal of the complaint for
lack of merit
 NLRC DECISION: Reversed the dismissal of the Labor
Arbiter
 CA: Reversed the decision of NLRC
ISSUE: Whether petitioner Javier is a regular employee
RULING:
 NO. In sum, the rule of thumb remains: the onus probandi
falls on petitioner to establish or substantiate such claim by
the requisite quantum of evidence. "Whoever claims
entitlement to the benefits provided by law should establish
his or her right thereto x x x." Sadly, Javier failed to adduce
substantial evidence as basis for the grant of relief.
 All that Javier presented were his self-serving statements
purportedly showing his activities as an employee of Fly Ace.
Clearly, Javier failed to pass the substantiality requirement to
support his claim.
 The Court is of the considerable view that on Javier lies the
burden to pass the well-settled tests to determine the
existence of an employer-employee relationship, viz: (1) the
 selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the
power to control the employee’s conduct. Of these
elements, the most important criterion is whether the FIRST DIVISION
employer controls or has reserved the right to control the [G.R. No. 193493. June 13, 2013.]
employee not only as to the result of the work but also as to JAIME N. GAPAYAO, petitioner, vs.
the means and methods by which the result is to be ROSARIO FULO, SOCIAL SECURITY
accomplished. SYSTEM and SOCIAL SECURITY
 The Court’s decision does not contradict the settled rule that COMMISSION, respondents
"payment by the piece is just a method of compensation and FACTS:
does not define the essence of the relation." - Jaime Fulo (deceased) died of "acute renal failure
 Payment on a piece-rate basis does not negate regular secondary to 1st degree burn 70% secondary
employment. "The term ‘wage’ is broadly defined in Article electrocution" while doing repairs at the residence
97 of the Labor Code as remuneration or earnings, and business establishment of Gapayao located at
capable of being expressed in terms of money whether San Julian, Irosin, Sorsogon.
fixed or ascertained on a time, task, piece or commission - Gapayao petitioner extended some financial
basis. assistance to Rosario Fulo.
 Payment by the piece is just a method of compensation and
- 1997, Rosario Fulo executed an Affidavit of
does not define the essence of the relations. Nor does the
Desistance stating that she was not holding them
fact that the petitioner is not covered by the SSS affect the
liable for the death of her late husband, Jaime
employer-employee relationship.
Fulo, and was thereby waiving her right and
 While the Constitution is committed to the policy of social
desisting from filing any criminal or civil action
justice and the protection of the working class, it should not
against Gapayao.
be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its rights, - 1998, both parties executed a Compromise
which are entitled to respect and enforcement in the interest Agreement:
of simple fair play. Out of its concern for the less privileged in “agrees to pay the sum of FORTY
life, the Court has inclined, more often than not, toward the THOUSAND PESOS (P40,000.00) to the
worker and upheld his cause in his conflicts with the surviving spouse of JAIME POLO, an
employer. Such favoritism, however, has not blinded the employee who died of an accident”
Court to the rule that justice is in every case for the deserving, - Rosario filed a claim for social security benefits
to be dispensed in the light of the established facts and the with the Social Security System (SSS) —
applicable law and doctrine. Sorsogon Branch.
 - Upon verification and evaluation, it was
discovered that Jaime Fulo was not a
registered member of the SSS.
- Upon the insistence of Rosario that her late
husband (Jaime) had been employed by Gapayao
from January 1983 up to his untimely death on 4
November 1997, the SSS conducted a field
investigation to clarify his status of employment.
- SSS demanded that Gapayao remit the social
security contributions of the Jaime Fulo. When
petitioner denied that the deceased was his
employee, the SSS required Rosario Fulo to
present documentary and testimonial evidence to
refute Gapayao's allegations.
- Instead of presenting evidence, Rosari filed a
Petition before the SSC. In her Petition, she
sought social security coverage and payment of
contributions in order to avail herself of the
benefits accruing from the death of her husband.
PETITIONER’S CONTENTION:
Gapayao disclaiming any liability on the premise that the
deceased was not the his employee, but was rather
an independent contractor whose tasks were not
subject to his control and supervision.
Assuming arguendo that the Fulo was Gapayao's
employee, he was still not entitled to be paid his SSS
premiums for the intervening period when he was not at
work, as he was an "intermittent worker who [was] only
summoned every now and then as the need [arose]."
He insisted that he was under no obligation to report the
former's demise to the SSS for social security coverage.
- The SSS filed a Petition-in-Intervention before the
Social Security Commission (SSC), outlining the
factual circumstances of the case and praying that
judgment be rendered based on the evidence
adduced by the parties.
SSC: holds that Jaime Fulo, the late
husband of Rosario Fulo was employed by
respondent Jaime N. Gapayao from
January 1983 to November 4, 1997,
working for nine (9) months a year receiving
the minimum wage then prevailing.
- Gapayao file a Motion for Reconsideration,
which was denied.
- Gapayao appealed to the Court of Appeals.
CA: Public respondent SSC had sufficient
basis in concluding that private
respondent's husband was an employee of
petitioner and should, therefore, be entitled
to compulsory coverage under the Social
Security Law.
ISSUE: Whether there exists between the
deceased Jaime Fulo and Gapayao an employer-
employee relationship that would merit an award
of benefits in favor of Rosario Fulo under social
security laws.
HELD: 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.
Jurisprudence has identified the three types of
employees mentioned in the provision:
(1) regular employees or those who have been
engaged to perform activities that 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 their
engagement, or those whose work or service is
seasonal in nature and is performed for the
duration of the season; and
(3) casual employees or those who are neither
regular nor project employees.
Farm workers generally fall under the definition of
seasonal employees. WE HAVE CONSISTENTLY
HELD THAT SEASONAL EMPLOYEES MAY BE
CONSIDERED AS REGULAR EMPLOYEES.
Regular seasonal employees are those called to
work from time to time. The nature of their
relationship with the employer is such that during
the off season, they are temporarily laid off; but
reemployed during the summer season or when
their services may be needed. 57 THEY ARE IN
REGULAR EMPLOYMENT BECAUSE OF THE
NATURE OF THEIR JOB, AND NOT BECAUSE
OF THE LENGTH OF TIME THEY HAVE
WORKED
THE RULE, HOWEVER, IS NOT
ABSOLUTE. In Hacienda Fatima v.
National Federation of Sugarcane Workers-
Food & General Trade, The Court held that
SEASONAL WORKERS WHO HAVE
WORKED FOR ONE SEASON ONLY MAY
NOT BE CONSIDERED REGULAR
EMPLOYEES.
FOR REGULAR EMPLOYEES TO BE
CONSIDERED AS SUCH, the primary standard
used is the reasonable connection between the
particular activity they perform and the usual trade
or business of the employer.
It was held in in De Leon v. NLRC:
 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.
A reading of the records reveals that the deceased
was indeed a farm worker who was in the regular
employ of petitioner.
The most telling indicia of this relationship is
the Compromise Agreement executed by
petitioner and private respondent. It is a valid
agreement as long as the consideration is
reasonable and the employee signed the waiver
voluntarily, with a full understanding of what he or
she was entering into. 64 All that is required for
the compromise to be deemed voluntarily entered
into is personal and specific individual
consent. 65 Once executed by the workers or
employees and their employers to settle their
differences, and done in good faith, a Compromise
Agreement is deemed valid and binding among
the parties.
PETITIONER ENTERED INTO THE AGREEMENT
WITH FULL KNOWLEDGE THAT HE WAS
DESCRIBED AS THE EMPLOYER OF THE
DECEASED. 67 This knowledge cannot simply be
denied by a statement that petitioner was merely forced
or threatened into such an agreement. His belated
attempt to circumvent the agreement should not be given
any consideration or weight by this Court.
Pakyaw workers are regular employees,
provided they are subject to the control of
petitioner.
In this case, we agree with the CA that petitioner
wielded control over the deceased in the discharge of
his functions. Being the owner of the farm on Which the
latter worked, petitioner — on his own or through his
overseer — necessarily had the right to review the
quality of work produced by his laborers.
The right of an employee to be covered by the Social
Security Act is premised on the existence of an
employer-employee relationship. 73 That having been
established, the Court hereby rules in favor of private
respondent.
Pigcaulan vs Security and Credit Investigation
Topic: Computation of wages
G.R. No. L-31341
PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION (PALEA) and
PHILIPPINE AIR LINES SUPERVISORS' ASSOCIATION (PALSA),
petitioners,
vs.
PHILIPPINE AIR INES, INC., respondent.
March 31, 1976
G.R. No. L-31341-43
PHILIPPINE AIR LINES, INC., petitioner,
vs.
PHILIPPINE AIR LINES EMPLOYEES' ASSOCIATION, PHILIPPINE
AIR LINES SUPERVISORS' ASSOCIATION, and the COURT OF
INDUSTRIAL RELATIONS
March 31, 1976
In G.R. No. L-31341 (PALEA vs. PAL), petitioners question the
date of effectivity of the adjudicated pay differentials due to
the monthly-salaried employees of PAL.
In G.R. No. L-31343 (PAL vs. PALEA), petitioner assails the
reversal by the Court of Industrial Relations of its earlier
resolution on the method employed by PAL in computing the
basic daily and hourly rate of its monthly salaried employees.
FACTS: PALEA and PALSA commenced an action against PAL in
the Court of Industrial Relations, praying that PAL be ordered
to revise its method of computing the basic daily and hourly
rate of its monthly salaried employees, and necessarily, to pay
them their accrued salary differentials.
PAL's formula in computing wages of its employees:
o (Monthly salary x 12 )/ 365 (No. of calendar days in a year) = x (Basic
daily rate)
o x/8 = Basic hourly rate
The unions would like PAL to modify the above formula in this wise:
o (Monthly salary x 12)/No. of actual working days = x (Basic daily rate)
o x/8 = Basic hourly rate
CIR upheld PAL's formula and denied the petition of PALSA
and PALEA.
In their motion for reconsideration PALSA and PALEA
attributed error to PAL's wage formula, particularly in the use
of 365 days as divisor. The unions contended that the use of
365 days as divisor would necessarily include off-days which,
under the terms of the collective bargaining agreements
entered into between the parties, were not paid days. This is
so since for work done on an off-day, an employee was paid
100% plus 25%, or 100% plus 37-½ of his regular working hour
rate.
CIR ordered the reversal of its decision and sustained the
unions' method of wage computation.
CIR also held that since the issues involved were related to
PAL adoption of the 40-Hour Week Law (Rep. Act 1880) from
the date of its effectivity July 1, 1957, the pay differentials due
to the employees should be paid by the respondent also
beginning July 1, 1957.
Both parties appealed the CIR's decision.
ISSUE: WON PAL's formula for the computation of wages is
correct.
HELD: No. Off-days are not paid day and are rest days for the
worker. He is not required to work on such days. This finds
support not only in the basic principle in labor that the basis
of remuneration or compensation is actual service rendered,
but in the ever pervading labor spirit aimed at humanizing the
conditions of the working man.
Since during his off-days an employee is not compelled to
work he cannot, conversely, demand for his corresponding
pay. If, however, a worker works on his off-day, our welfare
laws duly reward him with a premium higher than what he
would receive when he works on his regular working day.
Such being the case, the divisor in computing an employee's
basic daily rate should be the actual working days in a year.
The number of off-days are not to be counted precisely
because on such off-days, an employee is not required to
work.
Simple common sense dictates that should an employee opt
not to work — which he can legally do — on an off-day, and
for such he gets no pay, he would be unduly robbed of a
portion of his legitimate pay if and when in computing his
basic daily and hourly rate, such off-day is deemed
subsumed by the divisor. For it is elementary in the
fundamental process of division that with a constant dividend,
the bigger your divisor is, the smaller our quotient will be.
PAL's formula of determining daily and hourly rate of pay has
been decided and adopted by it unilaterally without the
knowledge and express consent of the employees. It was only
later on that the employees came to know of the formula's
irregularity and its being violative of the collective bargaining
agreements previously executed by PAL and the unions. PALSA
immediately proposed that PAL use the correct method of
computation, which PAL chose to ignore. Clearly, therefore,
the alleged long-standing silence by the PAL employees is in
truth and in fact innocent silence, which cannot place a party
in estoppel. The unilateral adoption by PAL of an irregular
wage formula being an act against public policy, the doctrine
of estoppel cannot give validity to the same.
Appealed decision was sustained by the SC with a modification
that the pay differentials be paid effective February 14, 1953
because the claim for pay differentials is based on written
contracts — i.e., the collective bargaining agreements
between PAL and the employees' representative unions —
and under Article 1144(1) of the Civil Code, actions based on
written contracts prescribe in ten (10) years. This is contrary
to assertion of PAL that the action has already prescribed
because the Eight-Hour Labor Law expressly provides that
“any action shall be commenced within three years after the
cause of action accrued”. The three-year prescribed period
fixed in the Eight-Hour Labor Law (CA No. 444, as amended)
will apply, if the claim for differentials for overtime work is
solely based on said law, and not on a collective bargaining
agreement or any other contract.
5. PALEA v. PAL 137 SCRA 467 Joana Taclas
6. Coca Cola Bottlers v. Climaco Cha Cha
7. Consolidated Broadcasting v. Oberio Eva Pads
LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG
ALYANSA- PINAGBUKLOD NG MANGGAGAWANG
PROMO NG BURLINGAME (LIKHA-PMPB), petitioner, vs.
BURLINGAME CORPORATION, respondent.
briefed by: Liwag, Angelene L.
CHARACTERS:
- LIKHA-PMPB – a group sought to represent all rank-and-
file promo employees of BURLINGAME CORPORATION
(70 pax)
- Principal Employer -> BURLINGAME CORPORATION
- local manpower agency -> F. Garil
FACTS:
- Petitioner LIKHA-PMPB filed a petition for certification
election before the DOLE. LIKHA-PMPB sought to
represent all rank-and-file promo employees of
respondent. — The petitioner claimed that there was no
existing union in the aforementioned establishment
 representing the regular rank-and-file promo employees. It
prayed that it be voluntarily recognized by the respondent
to be the collective bargaining agent, or, in the alternative,
that a certification/consent election be held among said
regular rank-and-file promo employees. Petitioner
contends that there is employer-employee relationship
between the parties. F. Garil is NOT an independent
contractor.
- Burlingame Corporation filed a motion to dismiss the
petition. It argued that there exists no employer-
employee relationship between it and the petitioner's
members. It further alleged that the petitioner's
members are actually employees of F. Garil Manpower.
To prove such contention, respondent presented a copy of
its contract for manpower services with F. Garil.
Respondent contends that there is no employer-
employee relationship between the parties. F. Garil is
an independent contractor.
- Med-Arbiter Parungo dismissed the petition for lack of
employer-employee relationship - ruled in favor of
BURLINGAME CORPORATION.
- DOLE Secretary ordered the immediate conduct of a
certification election - ruled in favor of LIKHA-PMPB. F.
Garil is NOT an independent contractor.
- CA in favor of BURLINGAME CORPORATION.
ISSUE: Whether F. Garil manpower is an independent
contractor?
HELD:
No, F. Garil manpower is NOT an independent contractor.F.
Garil manpower is a labor-only contractor.
- Job contracting is permissible only if the following
conditions are met: 1) the contractor carries on an
independent business and undertakes the contract work
on his own account under his own responsibility according
to his own manner and method, free from the control and
direction of his employer or principal in all matters
connected with the performance of the work except as to
the results thereof; and 2) the contractor has substantial
capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are
necessary in the conduct of the business.
- Section 5 of DOLE Department Order No.: Prohibition
against labor-only contracting. — Labor-only contracting is
hereby declared prohibited. For this purpose, labor-only
contracting shall refer to an arrangement where the
contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a
principal, and any of the following elements are [is]
present:
The contractor or sub-contractor does not have substantial
capital or investment which relates to the job, work or
service to be performed and the employees recruited,
supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main
business of the principal; or
The contractor does not exercise the right to control over
the performance of the work of the contractual employee.
- "Substantial capital or investment" refers to capital stocks
and subscribed capitalization in the case of corporations,
tools, equipment, implements, machineries and work
premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job,
work or service contracted out.
- The "right to control" shall refer to the right reserved to the
person for whom the services of the contractual workers
are performed, to determine not only the end to be
achieved, but also the manner and means to be used in
reaching that end.
- First, F. Garil does not have substantial capitalization or
investment in the form of tools, equipment, machineries,
work premises, and other materials, to qualify as an
independent contractor. No proof was adduced to show F.
Garil's capitalization.
- Second, the work of the promo-girls was directly related to
the principal business or operation of Burlingame.
Marketing and selling of products is an essential activity to
the main business of the principal.
- Lastly, F. Garil did not carry on an independent business or
undertake the performance of its service contract
according to its own manner and method, free from the
control and supervision of its principal, Burlingame.
- The "four-fold test" will show that respondent is the
employer of petitioner's members. The elements to
determine the existence of an employment relationship
are: (a) the selection and engagement of the employee; (b)
the payment of wages; (c) the power of dismissal; and (d)
the employer's power to control the employee's conduct.
The most important element is the employer's control of
the employee's conduct, not only as to the result of the
work to be done, but also as to the means and methods to
accomplish it.
- It is patent that the involvement of F. Garil in the hiring
process was only with respect to the recruitment aspect,
i.e. the screening, testing and pre-selection of the
personnel it provided to Burlingame. The actual hiring itself
was done through the deployment of personnel to
establishments by Burlingame.
- The contract states that Burlingame would pay the workers
through F. Garil, stipulating that Burlingame shall pay F.
Garil a certain sum per worker on the basis of eight-hour
work every 15th and 30th of each calendar month. This
evinces the fact that F. Garil merely served as conduit in
the payment of wages to the deployed personnel. The
interpretation would have been different if the payment
was for the job, project, or services rendered during the
month and not on a per worker basis.
- Vinoya v. NLRC: The Court takes judicial notice of the
practice of employers who, in order to evade the liabilities
under the Labor Code, do not issue payslips directly to
their employees. Under the current practice, a third person,
usually the purported contractor (service or manpower
placement agency), assumes the act of paying the wage.
For this reason, the lowly worker is unable to show proof
that it was directly paid by the true employer. Nevertheless,
for the workers, it is enough that they actually receive their
pay, oblivious of the need for payslips, unaware of its legal
implications. Applying this principle to the case at bar, even
though the wages were coursed through PMCI, we note
that the funds actually came from the pockets of RFC.
Thus, in the end, RFC is still the one who paid the wages
of petitioner albeit indirectly.
- The contract also provides that "any personnel found to be
inefficient, troublesome, uncooperative and not observing
the rules and regulations set forth by Burlingame shall be
reported to F. Garil and may be replaced upon request."
Corollary to this circumstance would be the exercise of
control and supervision by Burlingame over workers
supplied by F. Garil in order to establish the inefficient,
troublesome, and uncooperative nature of undesirable
personnel. Also implied in the provision on replacement of
personnel carried upon request by Burlingame is the power
to fire personnel.
- These are indications that F. Garil was not left alone in the
supervision and control of its alleged employees.
Consequently, it can be concluded that F. Garil was not an
independent contractor since it did not carry a distinct
business free from the control and supervision of
Burlingame.
- The contractual stipulation on the nonexistence of an
 employer-employee relationship between Burlingame and
the personnel provided by F. Garil has no legal effect —
Law: While the parties may freely stipulate terms and
conditions of a contract, such contractual stipulations
should not be contrary to law, morals, good customs,
public order or public policy. A contractual stipulation to the
contrary cannot override factual circumstances firmly
establishing the legal existence of an employer- employee
relationship.
- no doubt that F. Garil was engaged in labor-only
contracting, and as such, is considered merely an agent of
Burlingame. In labor-only contracting, the law creates an
employer-employee relationship to prevent a circumvention
of labor laws. The contractor is considered merely an
agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor
as if such employees had been directly employed by the
principal employer. Since F. Garil is a labor-only
contractor, the workers it supplied should be considered as
employees of Burlingame in the eyes of the law.
=> CA’s decision reversed. DOLE Secretary’s order is
reinstated (holding of a certification election among the rank-
and- le promo employees).
FAR EAST AGRICULTURAL SUPPLY, INC. and/or
ALEXANDER UY, Petitioners,
vs.
JIMMY LEBATIQUE and THE HONORABLE COURT
OF APPEALS,Respondents.
G.R. No. 162813. February 12, 2007
QUISUMBING, J.:
FACTS:
Far East Agricultural Supply, Inc. (Far East) hired Jimmy
Lebatique (Jimmy) as truck driver on March 1996 with a daily
wage of P223.50. He delivered animal feeds to the company’s
clients.
On January 2000, Jimmy complained of nonpayment of
overtime work particularly, when he was required to make a
second delivery in Novaliches, Quezon City. That same day,
Manuel Uy, brother of Far East’s General Manager and
petitioner Alexander Uy, suspended Jimmy for illegal use of
company vehicle. Even so, he reported for work the next day
but was prohibited from entering the company premises.
Jimmy sought the assistance of the Department of Labor and
Employment (DOLE) concerning the nonpayment of his
overtime pay. According to Jimmy, two days later, he received
a telegram from petitioners requiring him to report for
work. When he did the next day, Alexander asked him why he
was claiming overtime pay. Jimmy explained that he had never
been paid for overtime work since he started working for the
company. He also told Alexander that Manuel had fired
him. After talking to Manuel, Alexander terminated and told
him to look for another job.
JImmy filed a complaint for illegal dismissal and nonpayment of
overtime pay. The Labor Arbiter found that Lebatique was
illegally dismissed, and ordered his reinstatement and the
payment of his full back wages, 13th month pay, service
incentive leave pay, and overtime pay. A total award of
P 196,659.72.
On appeal, the NLRC held that there was no dismissal to speak
of since Jimmy was merely suspended. Further, it found
that Jimmy was a field personnel, hence, not entitled to
overtime pay and service incentive leave pay. He sought
reconsideration but was denied.
The Court of Appeals, in reversing the NLRC decision,
reasoned that Jimmy was suspended on January 2000 but
was illegally dismissed when Alexander told him to look for
another job. It also found that he was not a field personnel
and therefore entitled to payment of overtime pay, service
incentive leave pay, and 13th month pay.
ISSUES:
(1) Whether Jimmy was illegally dismissed.
(2) Whether Jimmy was a field personnel, not entitled to
overtime pay.
HELD:
(1)Yes. Jimmy was illegally dismissed. In cases of illegal
dismissal, the burden is on the employer to prove that the
termination was for a valid cause. In this case, petitioners failed
to discharge such burden. Petitioners aver that Jimmy was
merely suspended for one day but he abandoned his work
thereafter. To constitute abandonment as a just cause for
dismissal, there must be: (a) absence without justifiable reason;
and (b) a clear intention, as manifested by some overt act, to
sever the employer-employee relationship.
Petitioners failed to prove that Jimmy abandoned his job. Nor
was there a showing of a clear intention on the part of Jimmy
to sever the employer-employee relationship. When Jimmy was
verbally told by Alexander Uy to look for another
job, Jimmy was in effect dismissed. Even assuming earlier he
was merely suspended for illegal use of company vehicle, the
records do not show that he was afforded the opportunity to
explain his side. It is clear also from the sequence of the events
leading to Jimmy’s dismissal that it was his complaint for
nonpayment of his overtime pay that provoked the
management to dismiss him, on the erroneous premise that a
truck driver is a field personnel not entitled to overtime pay.
(2) No. Jimmy is not a field personnel for the following
reasons: (1) company drivers, including Jimmy, are directed to
deliver the goods at a specified time and place; (2) they are not
given the discretion to solicit, select and contact prospective
clients; and (3) Far East issued a directive that company drivers
should stay at the clients premises during truck-ban hours
which is from 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m. Even
petitioners admit that the drivers can report early in the
morning, to make their deliveries, or in the afternoon,
depending on the production of animal feeds. Drivers,
like Jimmy, are under the control and supervision of
management officers. Therefore, he is a regular employee
whose tasks are usually necessary and desirable to the usual
trade and business of the company. Thus, he is entitled to the
benefits accorded to regular employees of Far East, including
overtime pay and service incentive leave pay.
Art. 82 of the Labor Code states who are referred to by the
term field personnel:
ART. 82. Coverage. - The provisions of
this title [Working Conditions and Rest Periods]
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.
Case # 10: Olongapo Maintenance Services In vs. Chantengco
Facts:
 OMSI is a corporation engaged in the business of providing
janitorial and maintenance services to various clients, including
GOCCs.
 On various dates beginning 1986, OMSI hired the respondents as
janitors, grass cutters, and degreasers, and assigned them at the
NAIA.
 In 1999, OMSI terminated their employment.
 Respondents filed a complaint for illegal dismissal,
underpayment of wages, and non-payment of holiday and
service incentive leave pays, with prayer for payment of
separation pay, against OMSI claiming that they were terminated
without just cause.
 OMSI denied the allegations in the complaint. It averred that
when MIAA awarded to OMSI the service contracts for the
airport, OMSI hired respondents as janitors, cleaners, and
degreasers to do the services under the contracts. OMSI
informed the respondents that they were hired for the MIAA
project and their employments were coterminous with the
contracts. As project employees, they were not dismissed from
work but their employments ceased when the MIAA contracts
were not renewed upon their expiration. The termination of
respondents' employment cannot, thus, be considered illegal.
Issue: Whether the employees are considered as regular employees
Held:
Yes they are regular employees.
Without question, respondents, as janitors, grass cutters, and
degreasers, performed work "necessary or desirable" in the
janitorial and maintenance service business of OMSI.
The principal test in determining whether an employee is a project
employee is whether he/she is assigned to carry out a “specific
project or undertaking,” the duration and scope of which are
specified at the time the employee is engaged in the project, or
where the work or service to be performed is seasonal in nature and
the employment is for the duration of the season. A true project
employee should be assigned to a project which begins and ends
at determined or determinable times, and be informed thereof at
the time of hiring.
In the instant case, the record is bereft of proof that the
respondents’ engagement as project employees has been
predetermined, as required by law. OMSI did not provide convincing
evidence that respondents were informed that they were to be
assigned to a “specific project or undertaking” when OMSI hired
them.
Notably, the employment contracts for the specific project signed
by the respondents were never presented. All that OMSI submitted
in the proceedings a quo are the service contracts between OMSI
and the MIAA.
Evidently cognizant of such neglect, OMSI attempted to
correct the situation by attaching copies of the application
forms 10 of the respondents to its motion for reconsideration
of the Court of Appeals' Decision. Such practice cannot be
tolerated. This practice of submitting evidence late is properly
rejected as it defeats the speedy administration of justice
involving poor workers. It is also unfair.
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.
RESOLUTION
BRION, J.:
 This resolves the Motion for Reconsideration1 dated
December 3, 2008 filed by respondent The Manufacturers
Life Insurance Co. (Phils.), Inc. (Manulife) to set aside our
Decision of November 7, 2008 which ruled that an employer-
employee relationship existed between Manulife and
petitioner Gregorio Tongko and ordered Manulife to pay
Tongko backwages and separation pay for illegal dismissal.
FACTS:
 The contractual relationship between Tongko and Manulife
had two basic phases. The first or initial phase, under a
Career Agent’s Agreement (Agreement) that provided:
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 (MANULIFE) and the Agent (TONGKO).
 In 1983 when Tongko was named Unit Manager in
Manulife’s Sales Agency Organization.
 In 1990, he became a Branch Manager. Six years later
Tongko became a Regional Sales Manager.4
 Tongko’s gross earnings consisted of commissions,
persistency income, and management overrides.
 Since the beginning, Tongko consistently declared
himself self-employed in his income tax returns. Thus,
under oath, he declared his gross business income and
deducted his business expenses to arrive at his taxable
business income. Manulife withheld the corresponding 10%
tax on Tongko’s earnings.5
 In 2001, Manulife instituted manpower development
programs at the regional sales management level.
 Respondent Renato Vergel de Dios wrote Tongko a letter.
De Dios wrote that Tongko’s Region was the lowest
performer (on a per Manager basis) in terms of recruiting in
2000 and continues to remain one of the laggards in this
area.
 As a result, the Company asked Tongko to hire at his
expense a competent assistant who can unload him of much
of the routine tasks which can be easily delegated.
 Subsequently, de Dios wrote Tongko another letter, dated
December 18, 2001, terminating Tongko’s services
 Tongko responded by filing an illegal dismissal complaint
with the National Labor Relations Commission (NLRC)
Arbitration Branch.
 He essentially alleged – despite the clear terms of the letter
terminating his Agency Agreement – that he was Manulife’s
employee before he was illegally dismissed.8
ISSUE ON THE FIRST DECISION:
Whether or not an employment relationship exists?

A. Tongko’s Case for Employment Relationship
 Tongko asserted that as Unit Manager, he was paid an
annual over-rider regardless of production levels attained
and exclusive of commissions and bonuses.
 He also claimed that as Regional Sales Manager, he was
given a travel and entertainment allowance per year in
addition to his overriding commissions;
 He was tasked with numerous administrative functions and
supervisory authority over Manulife’s employees, aside from
merely selling policies and recruiting agents for Manulife;
and he recommended and recruited insurance agents
subject to vetting and approval by Manulife.
 He further alleges that he was assigned a definite place in
the Manulife offices when he was not in the field – at the 3rd
Floor, Manulife Center, 108 Tordesillas corner Gallardo Sts.,
Salcedo Village, Makati City – for which he never paid any
rental.
B. Manulife’s Case – Agency Relationship with Tongko
 Manulife argues that Tongko had no fixed wage or salary.
 Under the Agreement, Tongko was paid commissions of
varying amounts, computed based on the premium paid in
full and actually received by Manulife on policies obtained
through an agent.
 Manulife also points out that it deducted and withheld a 10%
tax from all commissions Tongko received;
 Tongko even declared himself to be self-employed and
consistently paid taxes as such—i.e., he availed of tax
deductions such as ordinary and necessary trade, business
and professional expenses to which a business is entitled.
 Manulife asserts that the labor tribunals have no jurisdiction
over Tongko’s claim as he was not its employee as
characterized in the four-fold test and our ruling
in Carungcong v. National Labor Relations Commission.10
LA: No employer-employee relationship existed between the parties.
NLRC: reversed the labor arbiter’s decision on appeal;
CA: NLRC gravely abused its discretion in its ruling and reverted to
the labor arbiter’s decision that no employer-employee relationship
existed between Tongko and Manulife.
In our Decision of November 7, 2008, we reversed the CA and We
concluded that Tongko is Manulife’s employee for the following
reasons
The Motion for Reconsideration
ISSUE ON THE MR:
Whether an agency or an employment relationship exists
- AGENCY RELATIONSHIP
RULING:
A. The Insurance and the Civil Codes;
the Parties’ Intent and Established
Industry Practices
 Three sets of laws – namely, the Insurance Code, the Labor
Code and the Civil Code – have to be considered in looking
at the present case AND the Agreement (partly reproduced
on page 2 of this Dissent and which no one disputes) that
the parties adopted to govern their relationship for purposes
of selling the insurance the company offers.
 The principal cannot but also have his or her say in directing
the course of the principal-agent relationship, especially in
cases where the company-representative relationship in the
insurance industry is an agency.
 Under the Insurance Code, the agent must, as a matter of
qualification, be licensed and must also act within the
parameters of the authority granted under the license and
under the contract with the principal.
 Other than the need for a license, the agent is limited in the
way he offers and negotiates for the sale of the company’s
insurance products, in his collection activities, and in the
delivery of the insurance contract or policy.
 Rules regarding the desired results (e.g., the required
volume to continue to qualify as a company agent, rules to
check on the parameters on the authority given to the agent,
and rules to ensure that industry, legal and ethical rules are
followed) are built-in elements of control specific to an
insurance agency and should not and cannot be read as
elements of control that attend an employment relationship
governed by the Labor Code.
 On the other hand, the Civil Code defines an agent as a
"person [who] binds himself to render some service or to do
something in representation or on behalf of another, with the
consent or authority of the latter."16
 Generally, the determinative element is the control
exercised over the one rendering service.
 The employer controls the employee both in the results and
in the means and manner of achieving this result.
 The principal in an agency relationship, on the other hand,
also has the prerogative to exercise control over the agent
in undertaking the assigned task based on the parameters
outlined in the pertinent laws.
 In the present case, the Agreement fully serves as grant of
authority to Tongko as Manulife’s insurance agent.17
 This agreement is supplemented by the company’s agency
practices and usages, duly accepted by the agent in
carrying out the agency.18 By authority of the Insurance
Code, an insurance agency is for compensation,19 a matter
the Civil Code Rules on Agency presumes in the absence of
proof to the contrary.20
 A related article is Article 1891 of the Civil Code which binds
the agent to render an account of his transactions to the
principal.
 The primary evidence in the present case is the July 1, 1977
Agreement that governed and defined the parties’ relations
until the Agreement’s termination in 2001.
 This Agreement stood for more than two decades and,
based on the records of the case, was never modified or
novated.
 By the Agreement’s express terms, Tongko served as an
"insurance agent" for Manulife, not as an employee. ---
cannot be conclusive and binding on the courts BUT cannot
simply be brushed aside because it embodies their intent at
the time they entered the Agreement
 At the very least, the provision on the absence of employer-
employee relationship between the parties can be an aid in
considering the Agreement and its implementation, and in
appreciating the other evidence on record.
 Tongko’s role as an insurance agent never changed during
his relationship with Manulife.
 Tongko essentially remained an agent, but moved up in this
role through Manulife’s recognition that he could use other
agents approved by Manulife, but operating under his
guidance and in whose commissions he had a share.
 Tongko perhaps could be labeled as a "lead agent" who
guided under his wing other Manulife agents similarly
tasked with the selling of Manulife insurance.
 As an agent who was recruiting and guiding other insurance
agents, Tongko likewise moved up in terms of the
reimbursement of expenses he incurred in the course of his
lead agency, a prerogative he enjoyed pursuant to Article
1912 of the Civil Code.
 That Tongko assumed a leadership role but
nevertheless wholly remained an agent is the inevitable
conclusion that results from the reading of the
Agreement
 In applying such Labor Code tests, however, the
enforcement of the Agreement during the course of the
parties’ relationship should be noted. From 1977 until the
termination of the Agreement, Tongko’s occupation was to
sell Manulife’s insurance policies and products.
 Evidence indicates that Tongko consistently clung to the
view that he was an independent agent selling Manulife
 insurance products since he invariably declared himself a
business or self-employed person in his income tax returns.
 This consistency with, and action made pursuant to the
Agreement were pieces of evidence that were never
mentioned nor considered in our Decision of November
7, 2008.
 The extent of his annual income alone renders his
claimed employment status doubtful.27
 The present case must be distinguished from the second
Insular Life case that showed the hallmarks of an
employer-employee relationship in the management
system established.
 These were: exclusivity of service, control of assignments
and removal of agents under the private respondent’s unit,
and furnishing of company facilities and materials as well as
capital described as Unit Development Fund.
 All these are obviously absent in the present case. If there is
a commonality in these cases, it is in the collection of
premiums which is a basic authority that can be delegated to
agents under the Insurance Code.
 As previously discussed, what simply happened in
Tongko’s case was the grant of an expanded sales
agency role that recognized him as leader amongst
agents in an area that Manulife defined.
 The Court cannot conclusively find that the relationship
exists in the present case, even if such relationship only
refers to Tongko’s additional functions.
 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.
 The concept of a single person having the dual role of agent
and employee while doing the same task is a novel one in
our jurisprudence, which must be viewed with caution
especially when it is devoid of any jurisprudential support or
precedent.
Insurance Code vis-à-vis Labor Code
 The Insurance Code may govern the licensing requirements
and other particular duties of insurance agents, but it does
not bar the application of the Labor Code with regard to labor
standards and labor relations –
 When an insurance company has exercised control over its
agents so as to make them their employees, the relationship
between the parties, which was otherwise one for agency
governed by the Civil Code and the Insurance Code, will
now be governed by the Labor Code.
 The reason for this is simple – the contract of agency has
been transformed into an employer-employee relationship.
WHEREFORE, considering the foregoing discussion, we REVERSE
our Decision of November 7, 2008, GRANT Manulife’s motion for
reconsideration and, accordingly, DISMISS Tongko’s petition. No
costs.
SO ORDERED.
12. Tryco v. NLRC Cha Cha
13. Equipment Technical v. CA et al. Eva Pads
ARIEL L. DAVID, doing business under the name and style
"YIELS HOG DEALER", petitioner, vs. JOHN G. MACASIO,
respondent.
[G.R. No. 195466. July 2, 2014.]
FACTS:
 In January 2009, Macasio filed before the LA a complaint
against petitioner Ariel L. David, doing business under the
name and style "Yiels Hog Dealer," for non-payment of
overtime pay, holiday pay and 13th month pay.
 Macasio also claimed payment for service incentive leave
(SIL). Macasio alleged before the LA 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 ₱700.00, which was increased from
₱600.00 in 2007, ₱500.00 in 2006 and ₱400.00 in 2005; and
(3) approved and disapproved his leaves.
 Macasio added that David owned the hogs delivered for
chopping, as well as the work tools and implements; the latter
also rented the workplace. Macasio further claimed that David
employs about twenty-five (25) butchers and delivery drivers.
 In his defense, David claimed that he started his hog dealer
business in 2005 and that he only has ten employees. He
alleged that he hired Macasio as a butcher or chopper on
"pakyaw" or task basis who is, therefore, not entitled to
overtime pay, holiday pay and 13th month pay pursuant to the
provisions of the Implementing Rules and Regulations (IRR)
of the Labor Code.
 David pointed out that Macasio: (1) usually starts his work at
10:00 p.m. and ends at 2:00 a.m. of the following day or
earlier, depending on the volume of the delivered hogs; (2)
received the fixed amount of ₱700.00 per engagement,
regardless of the actual number of hours that he spent
chopping the delivered hogs; and (3) was not engaged to
report for work and, accordingly, did not receive any fee when
no hogs were delivered.
 The LA 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.\
 The CA states that Macasio is 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.”
 Hence, this petition.
ISSUE: Whether Macasio is entitled to overtime pay, holiday pay, 13th
month pay and payment for service incentive leave
RULING:
Yes, in so far as the Holiday and SIL pay is concern. To determine
whether workers engaged on “pakyaw” or “task basis” are entitled to
holiday and SIL pay, the presence (or absence) of employer
supervision as regards the worker’s time and performance is the key:
if the worker is simply engaged on pakyaw or task basis, then the
general rule is that he is entitled to a holiday pay and SIL pay unless
exempted from the exceptions specifically provided under Article 94
(holiday pay) and Article 95 (SIL pay) of the Labor Code. However, if
the worker engaged on pakyaw or task basis also falls within the
meaning of “field personnel” under the law, then he is not entitled to
these monetary benefits. CA that Macasio does not fall under the
definition of “field personnel.” The CA’s finding in this regard is
supported by the established facts of this case: first, Macasio regularly
performed his duties at David’s 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.
However, the governing law on 13th month pay is PD No. 851. As
with holiday and SIL pay, 13th month pay benefits generally cover all
employees; an employee must be one of those expressly enumerated
to be exempted. Section 3 of the Rules and Regulations Implementing
P.D. No. 851 enumerates the exemptions from the coverage of 13th
month pay benefits. Under Section 3(e), “employers of those who are
paid on 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 Rules and
Regulations Implementing PD No. 851exempts 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. Thus Macasio is not entitled to 13th month pay.

Wherefore, the petition was partially granted the petition insofar as the
payment of 13th month pay to respondent is concerned. But all other
aspect of the CA’s decision was affirmed.