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65. G.R. No.

147402 January 14, 2004 PAGCOR before the Civil Service Commission while its own charter expressly exempts it from the
ENGR. RANULFO C. FELICIANO vs. COMMISSION ON AUDIT coverage of the Civil Service Law x x x
FACTS: Issue:
A special audit team from COA Regional Office No. VIII audited the accounts of LMWD; subsequently, WON, the NLRC (under DOLE) has jurisdiction over employee-employer problems in the PAGCOR,
demanded payment of auditing fees from LMWD. Feliciano, as general manager, replied that the water district PCOC and PSSC.
could not pay the auditing fees. Petitioner cited as basis for his action section 6 and 20 of Presidential Decree Ruling:
no. 198 as well as section 18 of RA 6758. The COA Regional Office No. VIII Regional Director referred petitioner Under Article IX B, Section 2(1) of the Constitution that "the civil service embraces all branches,
to reply to the COA Chairman on October 18, 1999. subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled
Herein petitioner wrote COA through the Regional Director asking for refund of all auditing fees LMWD corporations with original charters." Conversely, it follows that government corporations created under an
previously paid to COA. On March 16, 2000, petitioner received COA Chairman Celso D. Gangans resolution original charter fall under the jurisdiction of the Civil Service Commission and not the Labor Department.
dated January 3, 2000 denying his requests. Petitioner filed a motion for reconsideration on March 31, 2000, Respondent corporations were created by an original charter, P.D. No. 1869 in relation to P.D. Nos.
which COA denied on January 30, 2001. 1067-A, 1067-C, 1399 and 1632.
ISSUE: Thus all corporations, including PCOC and PSSC, in accordance with the Constitution and
WON LMWD is a government owned and/or controlled corporation (GOCC) subject the audit jurisdiction of the jurisprudence, having original charter "fall under the jurisdiction of the Civil Service Commission and not the
COA? Labor Department." The Court stated further that P.D. 1869 exempts casino employees from the coverage of
HELD: Labor Code provisions and although the employees are empowered by the Constitution to form unions, these
Yes. LMWD is a GOCC subject to the audit jurisdiction of the COA. are "subject to the laws passed to regulate unions in offices and corporations governed by the Civil Service
The Constitution and existing laws mandate COA to audit all government agencies, including government- Law." Thus, in dismissing the petition, the earlier ruling was clear - - - it is the Civil Service Commission, and
owned and controlled corporations (“GOCCs”) with original charters. COA’s audit jurisdiction extends not only not the NLRC, that has jurisdiction over the employer-employee problems in PAGCOR, PCOC and PSSC.
to government “agencies or instrumentalities,” but also to “government-owned and controlled corporations with
original charters” as well as “other government-owned or controlled corporations” without original charters. The 67. Postigo vs. Philippine Tuberculosis Society
determining factor of COA’s audit jurisdiction is government ownership or control of the corporation. Facts:
A local water district is deemed as a GOCC with an original charter. They are not private corporations because Petitioner Dr. Perla A. Postigo, et al., were regular employees of Philippine Tuberculosis Society
they are not created under the Corporation Code. Moreover, they are not registered with the Securities and (PTS). They retired on the various dates from 1996-1998.
Exchange Commission. Section 14 of the Corporation Code states that “[A]ll corporations organized under this At the time petitioners retired, Article 287 of the Labor Code had been amended by RA 7641 granted
code shall file with the Securities and Exchange Commission articles of incorporation x x x.” LWDs have no retirement pay to qualified employees in the private sector, in the absence of any retirement plan or agreement
articles of incorporation, no incorporators and no stockholders or members. There are no stockholders or with the company. Since PTS did not have retirement plan for its employees, aside from its contribution to GSIS,
members to elect the board directors of LWDs as in the case of all corporations registered with the Securities petitioners claimed retirement benefits under RA 7641. However, PTS denied their claim on the ground that the
and Exchange Commission. The local mayor or the provincial governor appoints the directors of LWDs for a accommodation extended by the GSIS removed them from the coverage of the law.
fixed term of office. To claim that LWDs are private corporations with a special charter is to admit that their Petitioner then sought the opinion of the Bureau of Working Conditions of the DOLE but despite a
existence is constitutionally infirm. favorable opinion of the latter, PTS refused to pay them their retirement benefits. Hence, petitioner filed a
Indubitably, the government owns and controls LWDs. complaint before the Labor Arbiter.
The LA declared petitioner entitled to the said benefits except Dr. Finaflor C. Tan.
66. G.R. No. 141020 June 12, 2008 Upon appeal to the NLRC, the latter denied the same contending that it did not post the required bond
CASINO LABOR ASSOCIATION vs. COURT OF APPEALS, PHIL. CASINO OPERATORS equivalent to the amount of the award but instead filed a Motion to Reduce Bond on the ground of erroneous
CORPORATION (PCOC) and PHIL. SPECIAL SERVICES CORPORATION (PSSC), respondents. award.
Facts: Upon appeal to the CA, the latter reversed the decision of the NLRC ordering the latter to act on the
Petitioner labor union filed consolidated cases with the Arbitration Branch of the NLRC. The Labor motion to reduce bond.
Arbiter and NLRC en banc (on appeal) dismissed the consolidated cases for lack of jurisdiction over the Issue
PAGCOR and PCOC. WON Petitioners are entitled to the Retirement Pay Law
Said decision were later elevated to SC via rule 65. SC denied the petition with finality runling: Held
x x x any petitions brought against private companies will have to be brought before the Yes. Respondent is a private corporation and not a governmental corporation. The respondent was
appropriate agency or office of the Department of Labor and Employment. incorporated as non-profit, benevolent and Non-stock Corporation under the Corporation Code. Therefore
Petitioner considers the foregoing statement as a legal mandate warranting the remand of the petitioners are covered by the Labor Code.
consolidated labor cases to the Arbitration Branch of the NLRC for further proceedings against respondents Extant on the records is the respondent’s admission that although its employees are compulsory
PCOC and PSSC. It lamented that its complaint might be treated as a "pingpong ball" by the Department of members of the GSIS, said employees are not governed by the Civil Service Law. If the respondent is truly a
Labor and Employment and the Civil Service Commission. It argued: government-owned or controlled corporation, and petitioners are employees in the public sector, then, they
x x x the petitioner will now be in a dilemna for the reason, that the charter creating should have been covered by said law. The truth, however, is that, the respondent is a non-profit but private
PAGCOR expressly exempts it from the coverage of the Civil Service Laws and therefore the corporation organized under the Corporation Code, and the petitioners are covered by the Labor Code and not
petitioner, will now be in a quandary whether it will be allowed to prosecute its case against by the Civil Service Law. From the foregoing, it is clear to us that the petitioners are employees in the private
sector, hence entitled to the benefits of Rep. Act No. 7641.
In Juco v. NLRC, the Court clarified that employees of government-owned and controlled corporations The right to unionize is now explicitly recognized and granted to employees of both the governmental and
with special charters are covered under the Civil Service. On the other hand, employees of government-owned private sector.
and controlled corporations under the Corporation Code are governed by the provisions of the Labor Code. The There is, therefore, no impediment to the holding of a certification election among the workers for NHC for it is
Philippine Tuberculosis Society, Inc. (PTSI) belongs to the latter category and, therefore, covered by Rep. Act clear that they are covered by the Labor Code, NHC being the GOCC without an original charter. Statutory
No. 7641 which is an amendment to the Labor Code. The accommodation under Rep. Act No. 1820 extending implementation of the last cited section of the Constitution is found in Article 244 of the Labor Code as amended
GSIS coverage to PTSI employees did not take away from petitioners the beneficial coverage afforded by Rep. of by EO No. 211. Employees in the government corporations organized under the Corporation Code shall have
Act No. 7641. Hence, the retirement pay payable under Article 287 of the Labor Code as amended by Rep. Act the right to form associations for purposes not contrary to law. The records do not show that supervening factual
No. 7641 should be considered apart from the retirement benefit claimable by the petitioners under the social events have mooted the present action. It is meet, however, to also call attention to the fact that, insofar as
security law or, as in this case, the GSIS law. certification elections are concerned, subsequent statutory developments have rendered academic even the
distinction between two types of GOCCs and the laws governing employment relations therein, as hereinbefore
68. G.R. No. 129049 August 6, 1999 discussed. For whether, the employees of NHC are covered by the LC or by CS Laws, a certification may be
BALTAZAR CAMPORENDONDO v. NLRC conducted.
Facts: For employees in the Corporations and entities covered by Labor Code, the determination of the exclusive
Petitioner, a former chapter administrator of Philippine National Red Cross (PNRC) filed a complaint bargaining representative is particularly governed by Articles 255 to 259 of said code. Article 256 provides for
with NLRC for illegal dismissal and damages as he was forced to retire after he was required to restitute the procedure when there is a representation issue in organized establishments, while Article 257 covers
shortages and unremitted collections. PNRC filed a motion to dismiss the complaint for lack of the jurisdiction unorganized establishments. With respect to other civil servants, that is, employees of all branches,
over the subject matter because the PNRC is a government corporation whose employees are members of subdivisions, instrumentalities and agencies of the GOCCs with original charters and who are therefore,
GSIS and embraced within the Civil Service Law and regulations. Petitioner argued that there was between the covered by the CS Laws, the guidelines for the exercise of their right to organize is provided for under EO 180.
PNRC and its staff, an employer-employee relationship governed by the Labor Code. Labor Arbiter issued an The assailed resolution is annulled and set aside. The conduct of a certification election is accordance with the
order dismissing the complaint for lack of jurisdiction finding that PNRC is a government corporation with an rules is GRANTED.
original charter.
Issue: 70. G.R. No. 178762 June 16, 2010
Whether or not the PNRC is a GOCC or it has been impliedly converted to a private organization Luzviminda Ang vs. Philippine National Bank
subject to the jurisdiction of labor tribunals? Facts:
Ruling: The petitioner Luzviminda Ang was employed at the respondent Philippine National Bank (PNB), while
PNRC is a GOCC with an original charter under RA No. 95. The test to determine whether a the latter was still a government owned and controlled corporation (gocc). Eventually, PNB was privatized and
corporation is GOCC or private in nature is whether it is created by its own charter for the exercise of public all the employees were automatically retired. PNB computed Ang’s gratuity benefits, the monetary value of her
function, or by incorporation under the general corporation law. Those with special charters are government leave credits, and the other benefits due her and cleared her of any accountability.
corporations subject to its provisions and its employees are under the jurisdiction of the CSC, and are Ang was then immediately re-employed by the now private bank PNB. Few months later, PNB
compulsory members of the GSIS. Therefore, PNRC being a government corporation is not subject to the discovered Ang’s involvement on a scam called kiting operation which was committed while PNB was still a
jurisdiction of labor tribunals. gocc. Furthermore, several charges were found to be committed by Ang on the same tenure which constituted
serious misconduct and gross violation of bank rules and regulation.
69. TRADE UNION OF THE PHILIPPINES AND ALLIED SERVICES vs. NATIONAL HOUSING Ang was subsequently dismissed from service and her benefits from her previous employment with
AUTHORITY [G.R No. 49677] (May 4, 1989) PNB as gocc was withheld. Ang filed a complaint for illegal dismissal and non-payment of her retirement benefits
FACTS: with NLRC. The Labor Arbiter ruled in favor of Ang, and such decision was affirmed by NLRC. Upon petition for
National Housing Corporation (NHC) is a corporation organized in accordance with Executive Order No. 399, certiorari, CA reversed the decision and held that the dismissal was warranted. Hence, this petition before the
otherwise known as Uniform Charter of Government Corporations. Its shares of stocks are and have been Court.
100% owned by Government from its incorporation under Act 459, the former corporation law. Petitioner Trade Ang maintained that since the alleged violations were committed during her tenure with PNB as a
Union is a legitimate labor organization with a chapter of NHC. gocc, the rules of the Civil Service Commission should govern and that she was entitled to her retirement
Trade Union filed a petition for the conduct of a certification election with the regional office of DOLE in order to benefits.
determine the exclusive bargaining representative of the workers of NHC. The petition was dismissed by med Issue:
arbiter, holding that NHC, being a GOCC its employees/workers are prohibited to form, join, assist any labor Whether or not the violations committed by the petitioner is within the jurisdiction of NLRC.
organization for purposes of CBA pursuant to Sec. 1, Rule II, Book 5 of the rules and regulations implementing Held:
the Labor Code. On appeal, the Bureau of Labor Relations Director, reverses the dismissal and ordered the No. The violations committed by the petitioner is not within the jurisdiction of NLRC.
holding of the certification election. But, this was set aside by officer-in-charge in his resolution. Hence, this Based on the records, the acts of misconduct and violations of the rules and regulations were
petition seeking the reversal of said resolution and prays the certification election be held among the rank and committed during Ang’s employment with PNB as a gooc. Section 27 of Presidential Proclamation 50 provided
file employees of NHC. for the automatic termination of employer-employee relationship upon privatization of a government-owned and
ISSUE: controlled corporation. Thus, even if the employment seemed to be continuous, the employer-employee
WON employees of NHC is covered by Labor Code. relationship was already terminated when PNB was privatized. Ergo, Ang became a new employee of PNB.
RULING: The acts of misconduct and violation to rules and regulations were committed during the period PNB was not
YES. yet privatized, hence, Labor Code cannot be applied as basis for disciplinary action. It was under the jurisdiction
of the Civil Service Commission and the Civil Service Law shall apply because of being a government employee. 72. G.R. No. 108813 December 15, 1994
The Labor Code may be applied only from the period Ang was hired as employee of privatized PNB. JUSMAG PHILIPPINES vs. THE NATIONAL LABOR RELATIONS COMMISSION and FLORENCIO
The Court ruled that benefits shall be withheld only when there is a pending administrative charge. In SACRAMENTO, Union President, JPFCEA
the eyes of the law, her record as employee of the government-owned PNB was untarnished at the time of her  Florencio Sacramento (private respondent) was one of the 74 security assistance support
separation from it, thus, PNB should not withhold Ang’s benefits from the services rendered during her tenure personnel (SASP) working at the Joint United States Military Assistance Group to the
in PNB as gooc. Furthermore, the Labor Code shall only apply on possible charges committed from the moment Philippines (JUSMAG- Phils.).
she was re-hired by PNB.  He had been with JUSMAG from 1969-1992.
 When dismissed, he held the position of Illustrator 2 and incumbent Pres. of JUSMAG Phils.- Filipino
71. GR NO. 113191 Sept. 16,1996 Civilian Employees Assoc., a labor org. duly registered with DOLE.
PETITIONER DEPARTMENT OF FOREIGN AFFAIRS  His services were terminated allegedly due to the abolition of his position.
RESPONDENT NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER  Sacramento filed complaint w/ DOLE on the ground that he was illegally suspended and
NIEVES V. DE CASTRO and JOSE C. MAGNAYI dismissed from service by JUSMAG.
Facts:  He asked for reinstatement.
On 27 January 1993, private respondent Jose Magnayi (“Magnayi”) filed a complaint for his alleged illegal  JUSMAG filed Motion to Dismiss invoking immunity from suit.
dismissal by ADB and the latter's violation of the "labor-only" contracting law. Two summonses were served,  LA Ordered to dismiss the complaint "for want of jurisdiction".
one sent directly to the ADB and the other through the Department of Foreign Affairs ("DFA"), both with a copy  On appeal, NLRC reversed the ruling and held that petitioner had lost its right not to be sued because
of the complaint. Subsequently, the ADB and the DFA notified respondent Labor Arbiter that the ADB, as well (1) the principle of estoppel-that JUSMAG failed to refute the existence of employer-employee
as its President and Office, were covered by an immunity from legal process except for borrowings, guaranties relationship (2)JUSMAG has waived its right to immunity from suit when it hired the services of
or the sale of securities pursuant to Article 50(1) and Article 55 of the Agreement Establishing the Asian private respondent.
Development Bank (the "Charter") in relation to Section 5 and Section 44 of the Agreement Between The Bank  Hence, this petition.
And The Government Of The Philippines Regarding The Bank's Headquarters (the "Headquarters Agreement"). ISSUE: 1. W/N JUSMAG is immune from suit.
Labor arbiter, taking into cognizance of the complaint on the impression that the ADB waived its diplomatic 2. W/N there is er-ee relationship between JUSMAG and private respondent.
immunity, rules in favor of Magnayi. The ADB did not appeal the decision; instead, the DFA referred the matter 1. YES. In this jurisdiction, we recognize and adopt the generally accepted principles of international law as
to the NLRC seeking “formal vacation of the void judgment.” The case was then brought by the DFA before the part of the law of the land. Immunity of State from suit is one of these universally recognized principles. In
Supreme Court for a petition for certiorari after not receiving a favorable response from the NLRC. international law, "immunity" is commonly understood as an exemption of the state and its organs from the
Issue/s: judicial jurisdiction of another state. This is anchored on the principle of the sovereign equality of states under
1. Whether or not the ADB is immune from suit; which one state cannot assert jurisdiction over another in violation of the maxim par in parem non habet
2. Whether or not the DFA has a legal stand in filing for a petition in behalf of ADB; and, imperium (an equal has no power over an equal).
3. Whether or not the extraordinary remedy of certiorari is proper. However, we recognized an exception to the doctrine of immunity from suit by a state, thus:
Ruling: . . . . Nevertheless, if, where and when the state or its government enters into a
Yes. The decision of the labor arbiter is vacated for being null and void as the ADB is covered by diplomatic contract whereby mutual or reciprocal benefits accrue and rights and obligations arise
immunity. therefrom, and if the law granting the authority to enter into such contract does not provide
Ratio Decidendi: for or name the officer against whom action may be brought in the event of a breach thereof,
1. As provided for in the case Southeast Asian Fisheries Development Center vs. Acosta, being an the state itself may be sued, even without its consent, because by entering into a contract,
international organization that has been extended diplomatic status (such as the ADB in this case), makes the sovereign state has descended to the level of the citizen and its consent to be sued
it immune from local jurisdiction. Further, the stipulations in both the Charter and Headquarters Agreement is implied from the very act of entering into such contract.
establishes that the ADB indeed enjoys immunity from legal process of every form, except in the specified JUSMAG was created pursuant to the Military Assistance Agreement 10 dated March 21,
cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities. 1947, between the Government of the Republic of the Philippines and the Government of the United
The Court rules that the Charter and the Headquarters Agreement granting these immunities and privileges States of America. As agreed upon, JUSMAG shall consist of Air, Naval and Army group, and its
are treaty covenants and commitments voluntarily assumed by the Philippines government which must be primary task was to advise and assist the Philippines, on air force, army and naval matters.
respected. Conversely, if the contract was entered into in the discharge of its governmental functions,
2. The Court finds that the DFA, being the authorized highest executive department to act in the aspect of the the sovereign state cannot be deemed to have waived its immunity from suit. Such is the case at
international arena, is proper in filing the petition in behalf of the ADB. The Court notes that the DFA’s bench.
function includes, among its other mandates, the determination of persons and institutions covered by 2. NO. There is no ER-EE relationship between JUSMAG and Sacramento.
diplomatic immunities, a determination which, when challenge, entitles it to seek relief from the court so as We also hold that there appears to be no basis for public respondent to rule that JUSMAG is
not to seriously impair the conduct of the country's foreign relations. stopped from denying the existence of employer-employee relationship with private respondent. On
3. The Court deems the extraordinary remedy of certiorari proper as it has, under special circumstances, the contrary, in its Opposition before the public respondent, JUSMAG consistently contended that the
allows such petition when (a) the questioned order or decision is issued in excess of or without (74) SASP, including private respondent, working in JUSMAG, are employees of the Armed Forces of
jurisdiction, or (b) where the order or decision is a patent nullity, which, verily, are the circumstances that the Philippines. This can be gleaned from: (1) the Military Assistance Agreement, supra, (2) the
can be said to obtain in the present case. When an adjudicator is devoid of jurisdiction on a matter before exchange of notes between our Government, thru Department of Foreign Affairs, and the United
him, his action that assumes otherwise would be a clear nullity.
States, thru the US Embassy to the Philippines, and (3) the Agreement on May 21, 1991, supra the public uses its facilities with a fee and therefore it cannot be gainsaid that it is only used exclusively for the
between the Armed Forces of the Philippines and JUSMAG. enjoyment of military servicemen stationed in the Philippines.
Nonetheless, DFA can take the cudgel for private respondent and the other SASP working While suable, the petitioners are nevertheless not liable. The Court agrees that petitioners acted
for JUSMAG, pursuant to the Military Assistance Agreement. Petition granted. COST AGAINST quite properly in terminating the private respondent's employment for his unbelievably nauseating act. It is
FLORENCIO SACRAMENTO. surprising that he should still have the temerity to file his complaint for damages after committing his utterly
disgusting offense.
73. G.R. Nos. 97468-70 September 2, 1993
SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER (SEAFDEC) vs. DANILO ACOSTA 75. Ebro III vs. NLRC, G.R. No. 110187, Sept. 4, 1996,
FACTS: Facts
Herein private respondents filed two separate labor cases before Danilo Acosta, as Labor Arbiter of NLRC, Private respondent International Catholic Migration Commission (ICMC) is a non-profit agency
claiming that they were wrongfully terminated from their employment by the petitioner, SEAFDEC. engaged international humanitarian and voluntary works. ICMC employed petitioner Jose G. Ebro III to teach
SEAFDEC, claiming to be an international inter-government organization, filed a motion to dismiss, questioning English as a Second Language and Cultural Orientation Training program at the refugee processing.
the jurisdiction of NLRC over the said cases. The motion was denied by LA and NLRC), and also the subsequent After 6 months, ICMC notified petitioner that effective Dec. 21, 1985, the latter’s services were
motion for reconsideration. terminated for his failure to eet the requirements of: 1. Classroom performance…up to standard set in the Guide
Private respondents, allege that the petitioner is not immune from suit and assuming that if, indeed, it is an for Instruction; 2. Regular attendance in the mandated teacher training and in the scheduled team meetings,
international organization, it has, however, impliedly, if not expressly, waived its immunity by belatedly raising one on one conferences with the supervisor, etc.,; and 3. Compliance with ICMC and PRPC policies.
the issue of jurisdiction. Petitioner then filed a complaint for illegal dismissal, unfair labor practice, underpayment of wages,
Petitioner moved a motion for reconsideration, invoking that LA and the NLRC has no jurisdiction for it can accrued leave pay, damages, atty’s fees and expenses of litigation against ICMC et al..
enjoy immunity from suit. After the parties had formally offered their evidence, private respondent submitted their memorandum,
ISSUE: on which they invoked the ICMC’s diplomatic immunity on the basis of the Memorandum of Agreement signed
WON petitioner can enjoy immunity from suit? between Phil. Government and ICMC.
HELD: The LA held that petitioners legal immunity under the Memorandum could not be given retroactive
Yes. The SC ruled that SEAFDEC, in its capacity as international inter-government organization, can enjoy effect since [that would] deprive complainants property right without due process and impair the obligation of
immunity from suit. contract of employment. In addition, he expressed doubt about petitioners legal immunity on the ground that it
An inter-governmental agency enjoys functional independence and freedom from control of the state in whose was provided for by agreement and not through an act of Congress. Accordingly, the Labor Arbiter ordered
territory its office is located. Immunity from local jurisdiction is one of the immunities provided under Philippine ICMC to reinstate petitioner as regular teacher without loss of seniority rights and to pay him one year
laws. SEAFDEC, as an international inter-government organization evinced by the Agreement signed by South backwages, other benefits, and ten percent attorneys fees for a total sum of P70,944.85.
East Asian countries, is beyond the jurisdiction of public respondent NLRC. On appeal, NLRC ordered the case dismissed on the ground that under the Memorandum of
Anent the issue of waiver of immunity, suffice it to say at the moment that the petitioner has timely raised the Agreement, ICMC was immune from suit.
issue of jurisdiction. While the petitioner did not question the public respondent’s lack of jurisdiction at the early Petitioner moved for reconsideration alleging that it could not be given retroactive effect and that ICMC
stages of the proceedings, it, nevertheless, did so before it rested its case and certainly well before the had waived its immunity by consenting to be sued. DENIED
proceedings thereat had terminated. ISSUE
1. WON the MOA gave ICMC immunity from suit
74. G.R. No. 79470 February 26, 1990 2. WON ICMC can invoke its immunity
UNITED STATES OF AMERICA vs. HON. RODOLFO D. RODRIGO HELD
Facts: 1. Yes. Petitioners’ contention that the Memorandum of Agreement is not an act of Congress which is
Fabian Genove filed a complaint for damages against petitioners who are officers of the U.S. Air needed to repeal or supersede the provision of the Labor Code on the jurisdiction of the NLRC and of the Labor
Force stationed here for his dismissal as cook in the USAF Recreation Center at Camp John Hay. The Center Arbiter is untenable. The grant of immunity to ICMC is in virtue of the Convention on the Privileges and
is a complex of restaurants, bakery and various stores which caters to the general public. It had been Immunities of Specialized Agencies of the United Nations, adopted by the UN General Assembly on November
ascertained after investigation, that Genove had poured urine into the soup stock used in cooking the 21, 1947, and concurred in by the Philippine Senate on May 17, 1949. This Convention has the force and effect
vegetables served to the club customers. He was suspended and thereafter board of arbitrators found him of law, considering that under the Constitution, the Philippines adopts the generally accepted principles of
guilty and recommended his dismissal in accordance with the collective bargaining agreement between the international law as part of the law of the land. The Memorandum of Agreement in question merely carries out
Center and its employees. Petitioners invokes immunity and aver that they are military officers in relations the Philippine government’s obligation under the Convention. In International Catholic Migration Commission v.
with the acts done in their official capacity. Moreover, the suit was in effect against the US, which had not Calleja, this Court explained the grant of immunity to ICMC in this wise:
given its consent to be sued. The grant of immunity from local jurisdiction to ICMC . . . is clearly necessitated by their international character
Issue: and respective purposes. The objective is to avoid the danger of partiality and interference by the host country
Whether petitioners can invoke state immunity. in their internal workings. The exercise of jurisdiction by the Department of Labor in these instances would
Ruling: defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance
No. The operation of the Center (aka “ Open Mess Complex”), albeit operated by US, is in the with international practice, from political pressure or control by the host country to the prejudice of member
nature of an exercise of proprietary function (purely business) of US government and therefore not immune States of the organization, and to ensure the unhampered performance of their functions.
from any suit. Based from the facts, the Center is operated for the enjoyment of the general public, wherein
2. YES. It is contended that ICMC waived its immunity in any event. Art. III, 4 of the Convention on the ISSUES:
Privileges and Immunities of the Specialized Agencies of the United Nations requires, however, that the waiver 1) WON Galera is an employee or a corporate officer.
of the privilege must be express. There was no such waiver of immunity in this case. Nor can ICMC be estopped 2) WON Galera is illegally dismissed.
from claiming diplomatic immunity since estoppel does not operate to confer jurisdiction to a tribunal that has RULING:
none over a cause of action. 1) Galera is an employee.
Corporate officers are given such character either by the Corporation Code or by the corporation’s by laws.
76. G.R. No. 86773 February 14, 1992 Under Section 25 of the Corporation Code, the corporate officers are the president, secretary, treasurer, and
SEAFDEC-AQD v. NLRC such other officers, as may be provided by laws.Other officers are sometimes created by the Charter or bylaws
Facts: of a corporation or the BOD may be empowered under by laws of a corporation to create additional offices as
SEAFDEC-AQD is a department of an international organization organized through an agreement may be necessary. WPP’s by laws provide for only one VP, at the time of Galera’s appointment, WPP had
entered into in Bangkok by different governments including the Philippines. Private respondent Juvenal Lazaga already a VP which is Webster. Galera cannot be said to be a director of WPP also because all five directorship
was employed as Research Associate in a probationary basis then as Head of External Affairs Office with the positions provided in the by laws are already occupied.
same benefits. Petitioner sent a notice of termination informing him that due to the financial constraints being 2) YES. Galera was illegally dismissed
experienced by the department, his services shall be terminated and that he is entitled to separation benefits. The law further requires that the employer must furnish the worker sought to be dismissed with the two written
Petitioner failed to pay private respondent his separation pay. Private respondent filed a complaint against notices before termination of employment can be legally effected. (1) Notice which is apprises the employee of
petitioner for non-payment of separation benefits. the particular acts and omissions for which his dismissal is sought. (2)the subsequent notice which informs the
Petitioner alleged that NLRC has no jurisdiction over the case inasmuch as the SEAFDEC is an employee of the employer’s decision to dismiss him. Failure to comply with the requirements taints the dismissal
international organization and is immune from suit owing to its international character and the complaint is in with illegality. WPP’s acts clearly show that Galera’s dismissal did not comply with the two-notice rule.
effect a suit against the State which cannot be maintained without its consent. Moreover, private respondent
must first secure clearance from the proper departments for property or money accountability before any claim 78. G.R. No. 157802 October 13, 2010
for separation pay will be paid, and which clearances had not yet been obtained by the private respondent. Matling Industrial and Commercial Corporation, et. al. vs. Ricardo Coros
Issue: Facts:
WON NLRC has jurisdiction over labor cases involving international organization. The respondent Ricardo Coros, who was also a director, was dismissed by the petitioner Matling
Ruling: Industrial and Commercial Corporation as its Vice President for Finance and Administration. Coros filed a
Being an intergovernmental organization, SEAFDEC enjoys functional independence and freedom complaint for illegal dismissal with the NLRC. Matling moved for the dismissal of the complaint on the ground
from of the state in whose territory its office is located, hence beyond the jurisdiction of public respondent NLRC. that since Coros was a corporate officer for being a member of the Board of Directors, it is the SEC which has
One of the basic immunities of an international organization in immunity from local jurisdiction. It is the jurisdiction over his complaint for being an intra-corporate controversy. Coros defended that he was not a
immune from the legal writs and processes issued by the tribunals of the country whre it is found. The subjection corporate officer on the grounds that his position as member of the Board of Directors was doubtful, that there
of such an organization to the authority of the local courts would afford a convenient medium thru which the was no shares of stocks name under his name and he was removed as Vice President for Finance and
host government may interfere in their operations or even influence or control its policies and decisions of the Administration and not as Director. Respondent maintained that NLRC has the jurisdiction over him and his
organization. Subjection to local jurisdiction would impair the capacity of such body to discharge its complaint.
responsibilities impartially on behalf of its member-states. The entertainment of NLRC of the case would amount The Labor Arbiter dismissed the complaint affirming the contention of Matling. However, upon
to interference by the Philippine Government in the management decisions of SEAFDEC governing board and appeal, NLRC reversed the decision and remanded the case back to the Labor Arbiter. Matling elevated the
it could compromise the desired impartiality of the organization. case to the Court of Appeals (CA), but the latter upheld the decision of NLRC. Hence, this petition before the
Court.
77. WPP COMMUNICATIONS vs. GALERA {G.R. No. 169207} (March 25, 2010) Issue:
FACTS: Whether or not the respondent is a corporate officer.
Galera, an American Citizen who was recruited from the USA by WPP Worldwide, a corporation based in HK, Held:
China, to work in PH for WPP Marketing Communication Inc., a corporation registered under the Philippine No. The respondent is not a corporate officer but a mere employee of the petitioner.
Laws. Galera signed and employment contract as of the said corporation. Four months passed, when WPP Section 25 of the Corporation Code provides:
filed before the Bureau of Immigration an application for Galera to receive a working VISA as VP of WPP. Section 25. Corporate officers, quorum.--Immediately after their election, the directors of a corporation
Galera alleged that she was constrained to sign the application that she could remain in the Philippines and must formally organize by the election of a president, who shall be a director, a treasurer who may or may not
retain her employment. Then, Steedman (Chairman of WPP) notified her that her services had been terminated be a director, a secretary who shall be a resident and citizen of the Philippines, and such other officers as
by WPP. Galera filed a complaint for illegal dismissal, recovery of some fees and damages against WPP and may be provided for in the by-laws. Any two (2) or more positions may be held concurrently by the same
steedman. LA ruled in favor of Galera and held steedman and WPP for illegal dismissal and damages for failure person, except that no one shall act as president and secretary or as president and treasurer at the same time.
to observe due process and two notice rule. NLRC reversed the LA’s decision. NLRC stressed that Galera was Conformably with Section 25, a position must be expressly mentioned in the By-Laws in order to be
WPP’s VP and therefore corporate officer at the time she was removed by the Board of Directors. CA reversed considered as a corporate office. Thus, the creation of an office pursuant to or under a By-Law enabling
NLRC’s decision and ruled that the dismissal is not accord with the Jurisprudence. A person could be provision is not enough to make a position a corporate office. Guerrea v. Lezama, the first ruling on the matter,
considered a “Corporate Officer” only if appointed as such by a corporation’s BOD or pursuant to either Articles held that the only officers of a corporation were those given that character either by the Corporation Code or by
of Incorporation or By-Laws. Hence, this petition. the By-Laws; the rest of the corporate officers could be considered only as employees or subordinate officials.
Moreover, the Board of Directors of Matling could not validly delegate the power to create of jurisdiction as outlined in Article 223 of the Labor Code. The Court rules, however, that due to exceptional
a corporate office to the President, in light of Section 25 of the Corporation Code requiring the Board of circumstances in the present case and to avoid injustice to both parties, it should go beyond the procedural
Directors itself to elect the corporate officers. The office of Vice President for Finance and Administration rules and immediately look at the intrinsic merits of the case.
created by Matling’s President, pursuant to By-Laws No. V, was an ordinary, not a corporate, office. 2. The Court finds that Locsin was a corporate officer, not an employee, of the NCLPI. His role as an elected
Moreover, the other contention of Matling that since Coros was a Director, any case of Chairman and, even as Executive Vice-President/Treasurer makes him a corporate officer according to
involving the latter is an intra-corporate matter falling under the jurisdiction of SEC, not RTC. Section 25 of Batas Pambansa Blg. 69, or the Corporation Code of the Philippines (Corporation Code) and
In order that the SEC (now the regular courts) can take cognizance of a case, the controversy Article IV, Section 4 of Nissan’s By-laws, respectively. The Court emphasizes that, as in the case of Okol
must pertain to any of the following relationships: v. Slimmers World International, citing Tabang v. NLRC, an “employee” occupies no office and is employed
a) between the corporation, partnership or association and the public; not by an action of the directors/stockholders but by the managing officer of a corporation. More importantly,
b) between the corporation, partnership or association and its stockholders, Locsin failed to state any such "circumstance" by which the NCLPI "engaged his services" as corporate
partners, members or officers; officer that would make him an employee. Hence, Locsin’s status as a corporate officer negates the labor
c) between the corporation, partnership or association and the State as far as its arbiter and the NLRC’s jurisdiction over the legality of the termination of his relationship with the NCLPI.
franchise, permit or license to operate is concerned; and
d) among the stockholders, partners or associates themselves. 80. G.R. No. 168757 January 19, 2011
The fact that the parties involved in the controversy are all stockholders or that the parties involved RENATO REAL vs. SANGU PHILIPPINES, INC. and/ or KIICHI ABE
are the stockholders and the corporation does not necessarily place the dispute within the ambit of the FACTS:
jurisdiction of SEC. The better policy to be followed in determining jurisdiction over a case should be to  Petitioner Renato Real was the Manager of respondent corporation Sangu Philippines, Inc.-
consider concurrent factors such as the status or relationship of the parties or the nature of the question that engaged in the business of providing manpower to various clients.
is the subject of their controversy. In the absence of any one of these factors, the SEC will not have  In 2001, petitioner, together with 29 others all employed by respondent corporation, filed their
jurisdiction. Furthermore, it does not necessarily follow that every conflict between the corporation and its respective Complaints for illegal dismissal against the latter and respondent Kiichi Abe, the
stockholders would involve such corporate matters as only the SEC can resolve in the exercise of its corporation’s Vice-President and General Manager.
adjudicatory or quasi-judicial powers.  With regard to petitioner, he was removed from his position as Manager through Board
Resolution for the following reasons: (1) continuous absences at his post at Ogino Philippines
79. G.R. NO. 185567 OCTOBER 20, 2010 Inc. for several months which was detrimental to the corporation’s operation; (2) loss of trust
PETITIONER ARSENIO Z. LOCSIN and confidence; and, (3) to cut down operational expenses to reduce further losses being
RESPONDENTS NISSAN LEASE PHILS. INC. and LUIS BANSON experienced by respondent corporation.
Facts:  Respondents, on the other hand, refuted petitioner’s claim of illegal dismissal by alleging that
Petitioner Arsenio Z. Locsin (“Locsin”) was private respondent Nissan Lease Phils. Inc. (“NCLPI”)’s elected after petitioner was appointed Manager, he committed gross acts of misconduct detrimental
Executive Vice-President/Treasurer and, later, Chairman of its Board of Directors. However, on August 5, 2005, to the company since 2000.
he was neither re-elected Chairman nor reinstated as EVP/Treasurer. Aggrieved, he filed a complaint for illegal  The LA declared petitioner and his co-complainants as having been illegally dismissed and
dismissal as an employee against the NCLPI and its President Luis Banson. The Labor Arbiter asserts its ordered respondents to reinstate complainants.
jurisdiction holding that Locsin and NCLPI has an employee-employer relationship, and, denied private  SANGUE thus appealed to the NLRC and raised therein as one of the issues the lack of
respondents’ Motion to Dismiss, prompting the latter to elevate the matter to the CA. The CA reversed and set jurisdiction of the Labor Arbiter over petitioner’s complaint and claimed that petitioner is
aside the Labor Arbiter’s Order. Not satisfied with the CA’s decision, Locsin filed a petition before the Supreme both a stockholder and a corporate officer of respondent corporation, hence, his action
Court but to no avail. against respondents is an intra-corporate controversy over which the Labor Arbiter has
Issue/s: no jurisdiction.
1. Whether or not there was a procedural defect in the respondents’ action of elevating the matter to the CA  The NLRC ruled in favor of SANGU. CA affirmed the decision of NLRC.
after the Labor Arbiter denied its Motion to Dismiss; and, ISSUE: 1. W/N this case is whether petitioner’s complaint for illegal dismissal constitutes an intra-
2. Whether or not Locsin is a corporate officer making the case an intra-corporate controversy which is corporate controversy and thus, beyond the jurisdiction of the Labor Arbiter.
outside the jurisdiction of the Labor Arbiter. 2. W/N Petitioner was illegally dismissed.
Ruling: HELD: 1. NO. There is no intra-corporate relationship between the parties.
Yes. The Court merited the relaxation of the applicable rules of procedure and, ordered to dismiss Locsin’s To determine whether a case involves an intra-corporate controversy, and is to be heard and
petition in affirming the Decision of the Court of Appeals (CA) of having Locsin file his complaint involving intra- decided by the branches of the RTC specifically designated by the Court to try and decide such cases,
corporate dispute in the Regional Trial Court (“RTC”). two elements must concur: (a) the status or relationship of the parties, and (2) the nature of the
Ratio Decidendi: question that is the subject of their controversy.
1. The Court finds that the CA clearly erred in the application of the procedural rules by disregarding the The first element requires that the controversy must arise out of intra-corporate or:
relevant provisions of the NLRC Rules, as well as the requirements for a petition for certiorari under the a) between the corporation, partnership or association and the public;
Rules of Court. As in the case of Metro Drug v. Metro Drug Employees, the Order of the Labor Arbiter b) between the corporation, partnership or association and its stockholders, partners, members or
denying petitioners’ motion to dismiss is merely interlocutory which means it is not immediately appealable officers;
until final judgment or order is rendered. The proper remedy of an aggrieved party faced with the labor c) between the corporation, partnership or association and the State insofar as it concerns the
arbiter’s denial of his motion to dismiss is to submit his position paper and raise therein the supposed lack individual franchises
d) among the stockholders, partners or associates themselves. An intra-corporate controversy, which falls within the jurisdiction of regular courts, has been regarded in its
The second element requires that the dispute among the parties be intrinsically connected broad sense to pertain to disputes that involve any of the following relationships: (1) between the corporation,
with the regulation of the corporation. If the nature of the controversy involves matters that are purely partnership or association and the public; (2) between the corporation, partnership or association and the state
civil in character, necessarily, the case does not involve an intra-corporate controversy. in so far as its franchise, permit or license to operate is concerned; (3) between the corporation, partnership or
Guided by this recent jurisprudence, we thus find no merit in respondents’ contention that the association and its stockholders, partners, members or officers; and (4) among the stockholders, partners or
fact alone that petitioner is a stockholder and director of respondent corporation automatically associates, themselves.
classifies this case as an intra-corporate controversy. Petitioner’s status as a stockholder and director Under the law, to determine if there a case involves that of an intra-corporate dispute, the status or relationship
of respondent corporation is not disputed. As a corporate officer as alleged by SANGU, It has been of the parties and the nature of the question that is the subject of the controversy must be taken into account.
consistently held that an office is created by the charter of the corporation and the officer is elected (or This is consistent with the “controversy test” explained by the Court in Reyes v. Hon. RTC, Br. 142, 561 SCRA
appointed) by the directors or stockholders. Clearly here, respondents failed to prove that petitioner 593 (2008), to wit: Under the nature of the controversy test, the incidents of that relationship must also be
was appointed by the board of directors. Thus, we cannot subscribe to their claim that petitioner is a considered for the purpose of ascertaining whether the controversy itself is intra-corporate. The controversy
corporate officer. Having said this, we find that there is no intra-corporate relationship between the must not only be rooted in the existence of an intra-corporate relationship, but must as well pertain to the
parties insofar as petitioner’s complaint for illegal dismissal is concerned and that same does not enforcement of the parties’ correlative rights and obligations under the Corporation Code and the internal and
satisfy the relationship test. intra-corporate regulatory rules of the corporation. If the relationship and its incidents are merely incidental to
2. YES. Petitioner was illegally dismissed. the controversy or if there will still be conflict even if the relationship does not exist, then no intra-corporate
Being a Manager, not an officer, Renato Real is considered as employee when dismissed. controversy exists.
Petitioner’s dismissal was effected without due process of law. "The twin requirements of notice and Further, the SC pointed out that Corsane is not a corporate officer since the corporate by-laws was not amended
hearing constitute the essential elements of due process. The law requires the employer to furnish the to cater his appointment. The board of directors has no power to create other corporate offices without first
employee sought to be dismissed with two written notices before termination of employment can be amending the corporate by-laws so as to include therein the newly created corporate office. Corporate officers
legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which refer only to those mentioned in the Corporation Code and the by-laws; all other officers are not so mentioned
his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the are deemed employees.
assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the
employer’s decision to dismiss him. This procedure is mandatory and its absence taints the dismissal 82. G.R. No. 141093 February 20, 2001
with illegality. Since in this case, petitioner’s dismissal was effected through a board resolution and all PRUDENTIAL BANK and TRUST COMPANY vs. CLARITA T. REYES.
that petitioner received was a letter informing him of the board’s decision to terminate him, the Facts:
abovementioned procedure was clearly not complied with. Reyes held the position of Assistant Vice President in the foreign department of the Bank. She was
Petition granted.We affirm the Labor Arbiter’s judgment ordering petitioner’s reinstatement to dismissed after a bank audit finding which discovered that two checks in the amount of US$ 225K were not
his former position without loss of seniority rights and other privileges and awarding backwages from sent out for collection to Hongkong Shanghai Banking Corporation until the said checks became stale. Said
the time of his dismissal until actually reinstated. amount however was credited to the account of the banks client and later withdrawn to the prejudice of
Prudential.
81. G.R. No. 201298 February 5, 2014 Prudential informed Reyes of the audit finding and asked to explain her side. She was constrained
RAUL C. COSARE vs. BROADCOM ASIA, INC. and DANTE AREVALO. to make a general denial of any misfeasance or malfeasance on her part because Prudential did not furnisher
FACTS: her any pertinent documents and asked that a formal investigation be made.
On April 3, 2009, Cosare filed the subject labor complaint, claiming that he was constructively dismissed from Complainant failed to attend and participate in the formal investigation despite due notice. The
employment by the respondents. He further argued that he was illegally suspended, as he placed no serious investigation revealed, according to Ms. Joven (Reyes’ subordinate), that Reyes instructed her to hold on to
and imminent threat to the life or property of his employer and co-employees. the checks for the purpose of changing the addressee. When Joven was transferred to another department,
Respondents argued that Cosare was neither illegally suspended nor dismissed from employment. They also her duties were transferred to Castillo. Joven relayed to Castillo the earlier instruction of Reyes to hold on to
contended that Cosare committed acts that tantamount to just cause for suspension or dismissal. the checks. As a consequence, the checks become stale and dishonored by HSBC.
The LA dismissed Cosare’s complaint on the ground that he failed to substantiate documentary evidence for Prudential did not re-elect (tantamount to dismissal) to her AVP position Reyes for loss of trust and
his allegations of illegal suspension. The NLRC reversed LA’s decision, pointing out that there are confidence in connection to the acts of serious misconduct in the performance of her duties resulting in
inconsistencies in repondents’s claim such as the fact that Cosare opted to abandon his employment where in monetary loss to Prudential.
fact petitioner was suspended from using the assets of Broadcom. During the pendency of the CA appeal, the Reyes sued Prudential for illegal dismissal in the NLRC but LA and NLRC dismissed it holding that
respondents raised a new contention that for cases involving intra-corporate controversy is not within the Prudential is correct. Prudential now belatedly invokes lack of jurisdiction as it involves an intra-corporate
jurisdiction of the LA and NLRC, but of RTC’s jurisdiction. They argued that it is a case involved a complaint controversy for non-election of a corporate officer after the CA reversed the ruling of the lower courts.
against a corporation filed by a stockholder, who, at the same time, was a corporate officer. Issue:
CA granted respondents’ appeal; hence, this petition for review. WON the case is in intra-corporate controversy which involves the removal of a corporate officer.
ISSUE: Ruling:
WON the case involves an intra-company controversy? Ewan, parang hindi, di naman sinagot ng derecho.. Petitioner Bank can no longer raise the issue of
HELD: jurisdiction under the principle of estoppel. The Bank participated in the proceedings from start to finish. It filed
No. The case does not involve intra-company controversy; therefore, LA and NLRC has jurisdiction to decide its position paper with the Labor Arbiter. When the decision of the Labor Arbiter was adverse to it, the Bank
on the complaint. appealed to the NLRC. When the NLRC decided in its favor, the bank said nothing about jurisdiction. Even
before the Court of Appeals, it never questioned the proceedings on the ground of lack of jurisdiction. It was expiration of the contracts, private respondents received letters advising them that their services as flight
only when the Court of Appeals ruled in favor of private respondent did it raise the issue of jurisdiction. The stewardess would be terminated. Private respondents instituted a complaint for illegal dismissal and non-
Bank actively participated in the proceedings before the Labor Arbiter, the NLRC and the Court of Appeals. payment of company benefits and bonuses with Ministry of Labor and Employment.
While it is true that jurisdiction over the subject matter of a case may be raised at any time of the proceedings, Regional Director ordered reinstatement with full backwages or payment of the amounts equivalent to
this rule presupposes that laches or estoppel has not supervened. their salaries for the remainder of the fixed 3-year period of their employment contracts. Order stated that private
Undeterred, the Bank also contends that estoppel cannot lie considering that "from the beginning, respondents had attained the status of regular employees after they had rendered more than a year of continued
petitioner Bank has consistently asserted in all its pleadings at all stages of the proceedings that respondent service; that the stipulation limiting the period of the employment contract to three (3) years was null and void
held the position of Assistant Vice President, an elective position which she held by virtue of her having been as violative of the provisions of the Labor Code and its implementing rules and regulations on regular and casual
elected as such by the Board of Directors." As far as the records before this Court reveal however, such an employment; and that dismissal without the proper clearance with MOLE, was illegal and entitled private
assertion was made only in the appeal to the NLRC and raised again before the Court of Appeals, not for respondents to reinstatement with full backwages.
purposes of questioning jurisdiction but to establish that private respondent's tenure was subject to the Petitioner PIA invokes that the contract of employment with private respondents states that its
discretion of the Board of Directors and that her non-reelection was a mere expiration of her term. The Bank relationship with them was governed by the provisions of its contract rather than by the general provisions of
insists that private respondent was elected Assistant Vice President sometime in 1990 to serve as such for the Labor Code.
only one year. This argument will not do either and must be rejected. Issue:
Whether or not private respondents were illegally dismissed.
83. Rural Band of Coron (Palawan) Inc vs Cortes Ruling:
Facts Yes, private respondents were illegally dismissed. Article 278 of the Labor Code forbade the
Virgilio Garcia, founder of petitioner corporations, hired respondent, Annalisa Cortes, as clerks of the termination of the services of employees with at least one (1) year of service without prior clearance from the
Rural Bank of Coron (RBC). After Virgilio died, his son Victor took over the management of the corporations. DOLE. Dismissal without prior clearance shall be conclusively presumed to be termination of employment
Anita Cortes, wife of Victor, was also involved in the management of the corp. Later, Annalisa married without cause.
Anita’s brother, Eduardo Cortes. Principle of Party Autonomy
Annalisa later became the Financial Assistant, Personnel Officer and Corporate Secretary of the RBC, A contract freely entered into should, of course, be respected, since a contract is the law between the
Personnel Officer of Citizens Development Incorporated, and also Personnel Officer and Disbursing Officer of parties. The principle of party autonomy in contracts is not, however, an absolute principle. Article 1306, of our
the Epire Cold Storage Development Corporation (ECSDC. Civil Code is that the contracting parties may establish such stipulations as they may deem convenient, provided
Sandra Garcia Escat, daughter of Virgilio, upon examination of the financial books of the Corp, found they are not contrary to law, morals, good customs, public order, or public policy. Thus counter- balancing the
out that respondent was involved in several anomalies, drawing petitioners to terminate respondent’s services. principle of autonomy of contracting parties is the equally general rule that provisions of applicable law,
On a letter, respondent’s counsel conveyed the respondent’s willingness to abide by the decision to especially provisions relating to matters affected with public policy, are deemed written into the contract. In
terminate her but reminded them that she was entitled to separation pay as well as to the other benefits provided short, parties may not contract away applicable provisions of law especially preemptory provisions dealing with
by law. Hence, she demands for the payment. matters heavily impressed with public interest.
As the demand remained unheeded, respondent filed a complaint on the NLRC, for illegal dismissal The law relating to labor and employment is clearly such an area and parties are not at liberty to
and non-payment of salaries and other benefits. insulate themselves and their relationship from the impact of labor laws and regulations by simply contracting
Petitioner moved to dismiss the case on the ground of lack of jurisdiction since the case was an intra- with each other. It is thus necessary to appraise the contractual provisions invoked by petitioner PIA in terms
corporate controversy, reoval of corporate officer, hence cognizable by the SEC. of their consistency with applicable Philippine law and regulations.
LA decided in favor of respondent contending that the latter was also a Financial assistant and
Personnel of all petitioner, hence not a corporate officer of petitioner’s corp. and under the jurisdiction of NLRC. 85. PACIFIC CONSULTANTS INTERNATIONAL ASIA,INC. Vs. SCHONFELD {G.R. No. 166920} (February
ISSUE 19, 2007)
WON the Labor Arbiter has jurisdiction over the case FACTS:
HELD Schonfeld is a Canadian Citizen and was a resident of British Columbia, Canada. Pacicon Philippines, Inc.
Yes. While indeed, respondent was the Corporate Secretary of the Rural Bank of Coron, she was also (PPI) is a corporation organized under the Philippine Law. It is a subsidiary of Pacific Consultants International
its Financial Assistant and the Personnel Officer of the two other petitioner’s corporation. In the case of Mainland of Japan (PCIJ). Schonfeld was employed as a Sector Manager of PPI in its Water and Sanitation Department
Construction Co., Inc. v Movilla, it instructs that a corporation can engage its corporate officers to perform in the Philippines. His salary was to be paid partly by PPI and PCIJ. Schonfeld arrived in the Philippines and
services under a circumstance which would make them employees. Hence, the Labor Arbiter has jurisdiction assume his position as PPI Sector Manager. He was accorded the status of a resident alien. DOLE granted the
over respondent’s complaint. employment application and issued the permit to the respondent. Respondent received a letter from the
President of PPI terminating his employment effective August 4, 1999, for the reason that PCIJ and PPI has
84. G.R. No. 61594 September 28, 1990 not been successful in the water and sanitation sector in the Philippines. Respondent received another letter
PAKISTAN INTERNATIONAL AIRLINES (PIA) v. OPLE from the President to continue with his work, until such time that he would be able to report certain projects.
Facts: Schonfeld then continued his work until October 1, 1999. Respondent filed an illegal dismissal against PPI and
PIA is a foreign corporation licensed to do business in the Philippines. It executed 2 separate contracts its president, on the ground that PPI had not notified the DOLE of its decision to close on of its departments
in Manila with private respondents Farrales and Mamasig. Respondents then commenced training in Pakistan which result in his dismissal and they failed to notify him that his employment has been terminated. LA
and started discharging their job functions as flight attendants, with base station in Manila and flying dismissed the complaint on the ground that the contract of employment between respondents and PCIJ was
assignments to different parts of the Middle East and Europe. One (1) year and four (4) months prior to the controlling and PCIJ remained respondent’s employer despite having been sent to the Philippines and since
the parties agreed that regarding the employer-employee relationship should be submitted to the court of conveniently resort to; (2) that the Philippine court is in a position to make an intelligent decision as to the law
arbitration which is in London. This agreement was controlling. NLRC affirmed LA’s decision. CA reversed the and the facts; and (3) that the Philippine court has or is likely to have power to enforce its decision.
decision of LA and NLRC. Hence, this petition. The Court held circumstances of the case failed to prove that NLRC is a convenient forum given that
ISSUE: all the incidents of the case — from the time of recruitment, to employment to dismissal occurred outside the
WON the London has exclusive jurisdiction over the employer-employee dispute. Philippines. The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and
RULING: MHICL are not nationals of the Philippines. Neither are they doing business in the Philippines. Likewise, the
NO. Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, main witnesses, Mr. Shmidt and Mr. Henk are non-residents of the Philippines. Neither can an intelligent
four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the decision be made as to the law governing the employment contract as such was perfected outside the country
payment of wages; (c) the power of dismissal; (d) the employer’s power to control the employee’s conduct. It is and the principle of lex loci contractus, the law of the place where the contract was made, shall be applied.
a so called “Control Test” which constitutes the most important index of the existence of the employer-employee Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of
relationship, that is, whether the employer controls or has reserved the right to control the employee not only took place in Beijing, China. NLRC has no authority to determine the truthfulness and effect of the employer’s
as to the result of the work to be done but also to the means and methods by which the same is to be alleged cause of business reversal. More importantly, even assuming that a proper decision may be rendered
accomplished. Stated otherwise, an employer-employee relationship exists where the person for whom the by NLRC, such would not be binding to the foreign corporations since jurisdiction over the person was not
services are performed reserves the right to control not only the end to be achieved but also the means to be acquired. It is evidently clear that NLRC is not the proper and convenient forum.
used in reaching such end. Thus, there was an employer-employee relationship between PPI and respondent.
The settled rule regarding the venue, according to Jurisprudence, is that while they are considered valid and 87. G.R. NO. 157010 JUNE 21, 2005
enforceable, venue stipulations in a contract do not, as a rule, supersede the general rule set forth in Rule 4 of PETITIONER PHILIPPINE NATIONAL BANK
the Revised Rules of Court in the absence of qualifying or restrictive words. They should be considered merely RESPONDENT FLORENCE O. CABANSAG
as an agreement or additional forum, not as limiting venue to the specified place. They are not exclusive but, Facts:
rather permissive. If the intention of the parties were to restrict venue, there must be accompanying language Respondent Florence O. Cabansag (“Cabansag”) applied for employment as Credit Officer in the Singapore
clearly and categorically expressing theur purpose and design that actions between them be litigated only at branch of the Philippine National Bank (PNB) as a tourist. Having been found eminently qualified for the position
place named by them. In the instant case, there is no restrictive words. It cannot be said that the court of by the Bank, she secured an Employment Pass from the Ministry of Manpower of the Government of Singapore
arbitration in London is an exclusive venue to bring forth any complaint arising out of the employment contract. and assumed office in the Bank on December 7, 1998. On March 8, 1999, she secured an Overseas
Petitioner’s insistence on the application of the principle of “Forum Non Conveniens” must be rejected. The Employment Certificate from the POEA certifying that she was a bona fide contract worker for Singapore.
bare fact that respondent is a Canadian citizen and was a repartriate does not warrant the application of the Sometime in April 1999, General Manager Ruben Tobias (“Tobias”) asked Cabansag to resign from her position
principle for the following reasons: (1) The Labor Code of PH does not include forum non conveniens as a explaining that it was a ‘cost-cutting measure’ of the Bank with a pretext that he needed a Chinese-speaking
ground for the dismissal of the complaint,(2) Such principle requires a factual determination. Officer to penetrate the local market. When Cabansag asked for a ‘Formal Advice’ from the PNB Head Office
Petition is denied. CA’s decision is affirmed. in Manila, Tobias flatly refused. Cabansag did not submit any letter of resignation until she received a letter
terminating her employment from Tobias on April 20, 1999. The labor arbiter, the NLRC, and the CA,
86. G.R. No. 120077 October 13, 2000 unanimously ruled in favor of Cabansag. Hence, this petition.
The Manila Hotel Corp. and Manila Hotel International Company Ltd. vs. National Labor Relations Issue/s:
Commission, et. al. 1. Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction and is the
Facts: most convenient venue to hear and decide the instant controversy; and,
The private respondent Marcelo Santos, an overseas Filipino worker, was directly hired by Palace 2. Whether or not the respondent was illegally dismissed, and therefore, entitled to recover moral and
Hotel in Beijing, China. However, only couple of years has passed when Santos received a letter terminating exemplary damages and attorney’s fees.
his employment with Palace Hotel due to business reverses. Ruling:
Santos subsequently filed a complaint for Illegal Dismissal with the NLRC against MHC, MHICL, the The Court ruled the petition no merit. Respondent is covered by the Philippine labor laws and was found illegally
Palace Hotel and Executive Secretary Mr. Shmidt. Petitioners opposed the complaint on the ground that it dismissed by petitioner, entitling her to moral and exemplary damages and attorney’s fees.
was POEA, and not NLRC who shall have the jurisdiction over the complaint of illegal dismissal. NLRC Ratio Decidendi:
upheld its jurisdiction and ruled in favor of Santos, ordering the petitioners to pay Santos’ on the award given 1. Labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee
by the said court. Hence, this petition before the Court, relations, including termination disputes involving all workers, among whom are overseas Filipino workers
Issue: (OFW), such as in this case, as per Article 217 of the Labor Code and Section 10 of R.A. 8042, otherwise
Whether or not NLRC is a convenient forum for the case at bar. known as the “Migrant Workers and Overseas Filipino Act of 1995.” Respondent’s status of being a “direct
Held: hire” and having an employment pass issued by the Singapore Ministry of Manpower does not at all imply
No. NLRC is not a convenient forum for the case at bar. a waiver of her national laws on labor, such permit simply means that its holder has a legal status as a
The records show that all the aspects of the case have transpired not here in the Philippines. The worker in the issuing country. Even if she was considered at the start of her employment as a "direct hire"
only link that the Philippines has with the case is that Santos is a Filipino citizen. The Palace Hotel and governed by and subject to the laws, common practices and customs prevailing in Singapore, she
MHICL are foreign corporations. subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies
Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over upon securing her employment certification from the POEA at the time her employment was illegally
the case if it chooses to do so provided: (1) that the Philippine court is one to which the parties may terminated. Hence, petitioner cannot escape the application of Philippine laws or the jurisdiction of the
NLRC and the labor arbiter. Respondent, as a “migrant worker” or “overseas Filipino worker”, have two
choices for proper venue according to Section 1(a) of Rule IV: (1) at the Regional Arbitration Branch (RAB) illness to entitle him to the benefits provided for. It is enough that his employment contributed,
where she resides or (2) at the RAB where the principal office of her employer is situated. Since her even if to a small degree, to the development of the disease.
dismissal, petitioner returned to her residence at Filinvest II, Quezon City. Thus, she made a valid choice In this case, the chain of causation that led to the peptic ulcer is too obvious to be disregarded.
of proper venue when she filed a complaint before the RAB office in Quezon City. The pressures of Francisco’s work – constant, continuing and consistent at his level of responsibility
2. Respondent was dismissed with no due process and valid cause. All that petitioner tendered to respondent – inevitably manifested their physical effects on Francisco’s health and body; the initial and most
was a notice of her employment termination effective the very same day, together with the equivalent of a obvious were the hypertension and coronary artery disease that the GSIS itself recognized.
one-month pay. In Serrano v. NLRC, 387 Phil. 345, May 4, 2000, this Court has already held that nothing Understandably, the GSIS may accuse us of leniency in the grant of compensation benefits
in the law gives an employer the option to substitute the required prior notice and opportunity to be heard in light of the jurisprudential trends in this area of law. Our leniency, however, is not due to our
with the mere payment of 30 days’ salary. The Court deems it worthy to note that petitioner has not asserted individual predilections or liberal leanings; it proceeds mainly from the character of P.D. 626 as a
any of the grounds provided by law as a valid reason for terminating the employment of respondent and social legislation whose primordial purpose is to provide meaningful protection to the working
merely insists that her dismissal was validly effected pursuant to the provisions of their agreed employment class against the hazards of disability, illness, and other contingencies resulting in loss of
Contract. However, the Court finds that petitioner overlooks the qualification that those terms and income. In employee compensation, persons charged by law to carry out the Constitution’s
conditions agreed upon must not be contrary to law, morals, customs, public policy or public order. Hence, social justice objectives should adopt a liberal attitude in deciding compensability claims and
in said employment Contract governed by Philippine labor laws, the stipulations, clauses, and terms and should not hesitate to grant compensability where a reasonable measure of work-connection
conditions therein must not contravene our labor law provisions. can be inferred. Only this kind of interpretation can give meaning and substance to the law’s
As for the justification of Cabansag’s awars for damages, as provided for in Cruz v. NLRC, citing in Asia compassionate spirit as expressed in Article 4 of the Labor Code – that all doubts in the
Pacific Chartering (Phils.), Inc. v. Farolan: “awards for moral and exemplary damages would be proper if implementation and interpretation of the provisions of the Labor Code, including their
the employee was harassed and arbitrarily dismissed by the employer.” The Court also justifies the grant implementing rules and regulations, should be resolved in favor of labor. When the
of attorney’s fees as Cabansag was forced to litigate and consequently incur expenses to protect her rights implementors fail to reach up to these standards, this Court, as guardian of the Constitution,
and interests. necessarily has to take up the slack and order what we must, to ensure that the constitutional
objectives are achieved. Petition denied.
88. G.R. No. 157038 December 23, 2009
GOVERNMENT SERVICE INSURANCE SYSTEM vs. JEAN E. RAOET, 89. G.R. No. 170734 May 14, 2008
FACTS: ARCO METAL PRODUCTS CO., INC. and MRS. SALVADOR UY vs. SAMAHAN NG MGA
The respondent’s husband, Francisco M. Raoet (Francisco), was an engineer at the National Irrigation MANGGAGAWA SA ARCO METAL-NAFLU (SAMARM-NAFLU)
Administration (NIA). FACTS:
In 2000, Francisco was diagnosed with Hypertension, Severe, Stage III, Coronary Artery Disease, and Herein petitioner Arco Metal Products Co., Inc. (Arco for brevity) is engaged in the manufacturing of metal
he was confined. products. Respondent is the union established for its rank-and-file employees. In 2003, Arco paid the 13th
As the GSIS considered this a work-related condition, Francisco was awarded 30 days Temporary month pay, bonus, and leave encashment of three union members prorated to their actual service rendered.
Total Disability benefits, plus reimbursement of medical expenses incurred during treatment. Respondent union protested on such payment scheme, invoking that such scheme were used by petitioner for
On May 5, 2001, Francisco was rushed to the and was pronounced dead on arrival at the hospital. multiple times (1992, 1993, 1994, 1996, 1999, 2003, and 2004) and such it violates the rule against diminution
His death certificate listed the causes of his death as follows: of benefits under Article 100 of the Labor Code.
CAUSES OF DEATH (1) Immediate cause: Cardiac Arrest; (2) Antecedent cause: Acute Massive The National Conciliation and Mediation Board (NCMB) Arbiter ruled in favor of SAMARM-NAFLU, interpreted
Hemorrhage the phrase “for each year of service” found in the pertinent CBA provisions to mean that an employee must
(3) Underlying cause: T/C Bleeding Peptic Ulcer Disease. have rendered one year of service in order to be entitled to the full benefits provided in the CBA, thus the
The respondent filed with the GSIS a claim for income benefits accruing from the death of her employees entitled to benefits for a complete year. CA affirmed this decision.
husband, pursuant to Presidential Decree No. 626 (P.D. 626), as amended but was denied on the ISSUE:
ground that the respondent did not submit any supporting documents to show that Francisco’s death WON the payment of the prorated benefits constitute diminution of benefits under the Labor Code?
was due to peptic ulcer. HELD:
On appeal, the ECC affirmed the findings of the GSIS. Yes. The payment of pro-rated benefits is diminution of benefits under the Labor Code.
The CA reversed the ECC decision. Hence, this petition. Any benefit and supplement being enjoyed by employees cannot be reduced, diminished, discontinued or
ISSUE: W/N respondent is entitled to benefits based on the interpretation of PD 626. eliminated by the employer. The principle of non-diminution of benefits is founded on the Constitutional mandate
HELD: YES. Raoet is entitled to claimed benefits. to “protect the rights of workers and promote their welfare,” and “to afford labor full protection.” Said mandate
It is well-settled that the degree of proof required under P.D. No. 626 is merely substantial in turn is the basis of Article 4 of the Labor Code which states that “all doubts in the implementation and
evidence, which means, "such relevant evidence as a reasonable mind might accept as adequate to interpretation of this Code, including its implementing rules and regulations shall be rendered in favor of labor.”
support a conclusion." What the law requires is a reasonable work-connection and not a direct Jurisprudence is replete with cases which recognize the right of employees to benefits which were voluntarily
causal relation. It is enough that the hypothesis on which the workman’s claim is based is probable. given by the employer and which ripened into company practice
Medical opinion to the contrary can be disregarded especially where there is some basis in the facts In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely, voluntarily and
for inferring a work-connection. Probability, not certainty, is the touchstone. It is not required that consistently granting full benefits to its employees regardless of the length of service rendered. True, there were
the employment be the sole factor in the growth, development or acceleration of a claimant’s only a total of seven employees who benefited from such a practice, but it was an established practice
nonetheless. Jurisprudence has not laid down any rule specifying a minimum number of years within which a
company practice must be exercised in order to constitute voluntary company practice. Thus, it can be six (6) incentive leaves with claims for oral and exemplary damages and atty ‘s fees against Hilario Ramirez. Valcueba
years, three (3) years, or even as short as two (2) years. claimed that Hilario hired him as mechanic on May 28, 1999. That on Feb 27, 2006, Josephine Torres, secretary
In cases involving money claims of employees, the employer has the burden of proving that the employees did of Ramirez, informed Valcueba that he would not be allowed to return to work unless he agreed to work on
receive the wages and benefits and that the same were paid in accordance with law. pakyaw basis.
Ramirez, on the other hand, presented a different version of facts, asserting that Valcueba was first
90. G.R. No. 177114 April 13, 2010 hired as construction worker, then as a helper of the mechanic, and eventually as mechanic. Valcueba belonged
MANOLO A. PEÑAFLOR vs. OUTDOOR CLOTHING MANUFACTURING CORPORATION to those who were classified as rescue/emergency/rescue mechanic. On February 26, 2006, while Valcueba
Facts: was assigned at the Babag Station, Ramirez directed him to proceed to Calawosan, Lapu-lapu, as a unit had
Peñaflor was hired as probationary HRD Manager of Outdoor Clothing. More than six months from developed a engine trouble and the mechanic assigned thereat was absent. Valcueba, however, did not report
the time he was hired, Peñaflor learned that Outdoor President, Syfu, appointed Buenaobra as the concurrent to the Calawisan station. In fact he did not report to work anymore, as he allegedly intended to return to
HRD and Accounting Manager. After enduring what he claimed as discriminatory treatment at work, Peñaflor Mindanao. Ramirez insisted that Valcueba was never terminated but it was the latter who abandoned his job.
considered the appointment of Buenaobra to his position as the last straw, and thus filed his irrevocable LA rendered decision finding that there is neither dismissal nor abandonment involved in this case,
resignation from Outdoor. He thereafter filed an illegal dismissal complaint with the labor arbiter claiming that thus it is best that the parties should restore to their previous employment relations. LA ordered Ramirez to pay
he had been constructively dismissed. Outdoor avers Peñaflor’s resignation was voluntary without any force. a total award of P45,825.98.
LA ruled in favor of Peñaflor. NLRC reversed LA upon presentation of three memoranda by Ramirez then filed a MR and/or Memorandum of appeal with urgent motion to reduce appeal bond
respondent to show that it was only after Peñaflor’s resignation that Buenaobra was appointed belying the before the NLRC.
former’s basis for constructive dismissal. NLRC dismissed the appeal for non-perfection due to want of an appeal bond.
Issue: On appeal, CA dismissed the petition for failure to properly verify his petition and to state material
WON there was a constructive dismissal. dates.
Ruling: ISSUE
Yes. The Court considered suspicious Outdoor’s memoranda because these were only presented to WON the appeal was perfected
the NLRC on appeal, but not before the labor arbiter. They were not even mentioned in Outdoor’s position Held
paper filed with the labor arbiter. The failure to present them and to justify this failure are significant No. Under the Rules, appeals involving monetary award are perfected only upon compliance with the
considering that these are clinching pieces of evidence that allowed the NLRC to justify the reversal of the following mandatory requisites, namely: 1) payment of the appeal fees; 2) filing of the memorandum of appeal;
labor arbiter’s decision. and 3) payment of the required cash or surety bond. Nothing in the Labor Code or the NLRC Rules of Procedure
The surrounding circumstances of the issuance of these memoranda also cast doubts on their authorizes the posting of a bond that is less than the monetary award in the judgment, or deems such insufficient
authenticity. Peñaflor was never informed of their contents nor given copies. There were no marks on the posting as sufficient to perfect an appeal.
memoranda indicating that their intended recipients actually received them on the date they were issued. The The filing of the bond is not mandatory but also a jurisdictional requirement that must be complied with
Court also considered the timeliness of Peñaflor’s resignation. It was highly unlikely for Peñaflor to resign, as in order to confer jurisdiction upon the NLRC. Non-compliance with the requirements renders the decision of
claimed by Outdoor, considering that he would have become a regular employee by that time. It did not the LA final and executor. This requirements is intended to assure the workers that if they prevail in the case,
appear logical that an employee would tender his resignation on the very same day he was entitled by law to they will receive the money judgment in their favor upon the dismissal of the employer’s appeal.
be considered a regular employee, especially when downsizing was taking place and he could have availed Furthermore, a motion to reduce appeal bond is subject to the conditions that: 1) the motion to reduce
of its benefits if separated from the services as a regular employee. the bond shall be based on meritorious grounds; and 2) a reasonable amount in relation to the monetary award
While the letter states that Peñaflor’s resignation was irrevocable, it does not necessarily signify that is posted by the appellant. However, an employer who files a motion to reduce the appeal bond is still required
it was also voluntarily executed. Precisely because of the attendant hostile and discriminatory working to post the full amount of cash or surety bond within the ten-day reglementary period even pending resolution
environment, Peñaflor decided to permanently sever his ties with Outdoor. This falls squarely within the of his motion.
concept of constructive dismissal that jurisprudence defines, among others, as involuntarily resignation due to In the case at bar, although Ramirez posted an appeal bond, the same was insufficient, as it was not
the harsh, hostile, and unfavorable conditions set by the employer. It arises when a clear discrimination, equivalent to the monetary award of the LA. Moreover, when Ramirez sought a reduction of the bond, he merely
insensibility, or disdain by an employer exists and has become unbearable to the employee. The gauge for said that the bond was excessive and baseless without amplifying why he considered it as such. Hence, the
constructive dismissal is whether a reasonable person in the employee’s position would feel compelled to give appeal was not perfected and the decision of the Labor Arbiter is already final and executory.
up his employment under the prevailing circumstances. With the appointment of Buenaobra to the position he
then still occupied, Peñaflor felt that he was being eased out and this perception made him decide to leave 92. G.R. No. 160302 September 27, 2010
the company. OLISA v. ESCARIO
Whatever doubts that remain in the minds of the justices on the credibility of the parties’ evidence Facts:
should, by the law’s dictate, be settled in favor of the working man. The ruling that Peñaflor was constructively Petitioners were among the regular employees of respondent Pinakamasarap Corporation (PINA)
dismissed from his employment with Outdoor Clothing therefore stands. engaged in manufacturing and selling food seasoning. They were members of the Union. On March 13, 1993,
all the officers and some 200 members of the Union walked out and proceeded to barangay office to show
91. Ramirez vs CA support for Juanito Canete, an officer of the Union charged with oral defamation by PINA’s personnel manager.
Facts The proceedings resulted in a settlement and the officers and members of the Union all returned to work
Respondent Mario Valcueba filed a complaint for illegal dismissal and non-payment of wage thereafter.
differential, 13th month pay differential, holiday pay, premium pay for holidays and rest days, and service
As a result of the walkout, PINA preventively suspended all officers and terminated them after a month. conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier influence
PINA filed a complaint for unfair labor practice (ULP) and damages. Labor Arbiter ruled that the incident was of the latter should be counterbalanced by the sympathy and compassion the law must accord the
an illegal walkout constituting ULP thus all the Union’s officers had thereby lost their employment. NLRC ruled underprivileged worker.
to reinstate respondents to their former positions but without backwages. 94. G.R. No. 79004-08 October 4, 1991
Issue: Franklin Baguio, et. al. vs. National Labor Relations Commission, et. al.
Whether or not the Union Officers who were reinstated are entitled with full backwages. Facts:
Ruling: The private respondent Feliciano Lupo, a building contractor, entered into a contract of with private
Petitioners are not entitled to backwages despite their reinstatement. Employees dismissed for joining respondent General Milling Corporation (GMC), a flour and feeds manufacturer, on the construction of annex
an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of building inside the latter’s plant. The petitioners were hired as laborers, carpenters and masons.
their being merely members of the striking union who did not commit any illegal act during the strike. Subsequently, Lupo terminated the petitioners in different dates. Petitioners then filed a complaint
As a general rule, backwages are granted to indemnify a dismissed employee for his loss of earnings against Lupo and GMC and prayed for the payment of wages, etc. The Labor Arbiter held the private
during the whole period that he is out of his job. Considering that an illegally dismissed employee is not deemed respondent’s solidarily liable to the petitioners. Upon appeal, GMC was absolved from the liability on the
to have left his employment, he is entitled to all the rights and privileges that accrue to him from the employment. ground that petitioners are contracted by Lupo for the construction and not for employment. Hence, this
The grant of backwages to him is in furtherance and effectuation of the public objectives of the Labor Code, present petition. Petitioners alleged that Lupo and GMC shall be solidarily liable pursuant to Article 106 of the
and is in the nature of a command to the employer to make a public reparation for his illegal dismissal of the Labor Code.
employee of the violation of the Labor Code. That backwages are not granted to employees participating in an Issue:
illegal strike simply accords with the reality that they do not render work for the employer during the period of Whether or not there is an employer-employee relationship between the petitioners and GMC.
the illegal strike. Held:
Article 264 of the Labor Code, as amended, provides that the union officers who knowingly participate No. There is no employer-employee relationship between petitioners and GMC.
in the illegal strike may be declared to have lost their employment status. However, mere participation of a It is true that Article 106 does not apply in the case at bar because it refers to labor-only contracting.
union member in the illegal strike does not mean loss of employment status unless he participates in the A person is deemed to be engaged in labor only contracting where (1) the person supplying workers to an
commission of illegal acts during the strike. Article 264 explains that the only instance when a dismissed employer does not have substantial capital or investment in the form of tools, equipment, machineries, work
employee would be reinstated with full backwages to employees is when he was dismissed by reason of illegal premises, among others; and (2) the workers recruited and placed by such person are performing activities
lockout. which are directly related to the principal business of such employer. Such requisites are not present in the
case at bar.
93. PHILIPPINE TELEGRAM AND TELEPHONE CORPORATION vs. NLRC AND BOBBY TORIBIANO The applicable labor provision is the Article 107 which refers to job contracting. The circumstances
{G.R. No. 80600} (March 21, 1990) provide that GMC is an indirect employer. GMC entered into a contract with Lupo and the construction of the
FACTS: annex building is not related to the business of GMC. In job contracting, no employer-employee relationship
Toribiano is an employee of the petitioner first as a collector, then a counter-clerk and long distance operator. exists between the owner and the employees of his contractor. The owner of the project is not the direct
The respondent was terminated for tampering the Vodex Receipt by writing the amount 41.15 as appearing in employer but merely an indirect employer, by operation of law, of his contractor's employees. The civil liability
the duplicate while the original copy issued to the customer was 113.25. Respondent explained that the of an indirect contractor shall be in accordance with the Article 109, similar to solidary liability of an indirect
discrepancy of the amounts reflected was without malicious interest to defraud the petitioner. Toribiano filed an contractor. Moreover, GMC failed to require Lupo to post a bond. Thus GMC must answer for whatever
illegal dismissal. LA rendered the decision in favor of respondent and ordered respondent’s reinstatement. liabilities LUPO may have incurred to his employees. This is without prejudice to its seeking reimbursement
NLRC affirmed the decision. Hence, this petition. from LUPO for whatever amount it will have to pay petitioners.
ISSUE:
WON Toribiano’s dismissal is proper. 95. G.R. Nos. 100376-77 June 17, 1994
RULING: PETITIONER DEVELOPMENT BANK OF THE PHILIPPINES
NO. The LA made a finding that respondent was indeed alone in the office on July 26, 1985 busily performing RESPONDENTS NATIONAL LABOR RELATIONS COMMISSION, GODOFREDO
his duties as counter-clerk and long distance operator at the same time, the functions of which dual positions MORILLO, JR., SUNDAY BACEA, ALFREDO COS and ROGELIO
precisely caused him to commit a mistake in the entry receipt through negligence. Further, it was found that VILLANUEVA
private respondent had repeatedly brought to the attention of the petitioner his predicament of having to singly Facts:
perform manifold duties but the same were ignored by the latter. Considering all the attendant circumstances, Private respondents were hired as security guards by Confidential Investigation and Security Corporation
even assuming that there may have been a valid ground for dismissal, the imposition of such supreme penalty (“CISCOR”) and were deployed to secure one of its clients, herein petitioner Development Bank of the
would certainly be very harsh and disapportionnate to the infraction committed by respondent’s first offense Philippines (DBP), which, in turn, assigned them to secure one of its properties or assets, the Riverside Mills
after having faithfully rendered seven long years of satisfactory service. These, and the fact that the imputed Corporation. Sometime in August 1987, private respondents filed their resignation and claimed for their cash
defalcation involved the sum of only 72.10, bolster the credibility of respondent’s explanation in his defense. benefits. For failure of CISCOR to comply, private respondents claimed violations committed by CISCOR and
While an employer has its own interests to protect and pursuant thereto, it may terminate an employee for a its President/Manager specifically, the non-payment of their 13th month pay, five (5) day service incentive leave
just cause, such prerogative to dismiss or lay off an employee must not be abusively exercised. Such power pay from the date of employment to the time of their separation, non-refund of their cash bond, non-payment of
should be tempered with compassion and understanding. The employer should bear in mind that in the legal holiday pay and rest day pay. On 10 March 1988, CISCOR filed a motion with leave to implead petitioner
execution of said prerogative, what is at stake is not only the employer’s position but his livelihood as well. This bank and averred therein that the latter is an indispensable party to the case citing that under the Labor Code,
ruling is in keeping with the constitutional mandate for the state to afford full protection to labor such that, when they are jointly and severally liable to pay the salaries and other statutory benefits due the private respondents.
Both the labor arbiter and the NLRC ordered its decision in favor of private respondents holding CISCOR and equipment, machineries, work premises, among others; and, (b) the workers recruited and placed by such
DBP jointly and severally liable. The case was then brought to the Supreme Court by the DBP, but to no avail. person are performing activities which are directly related to the principal business of the employer.
Issue/s: Based on the foregoing, BCC cannot be considered a "labor-only" contractor because it has substantial capital.
1. Whether or not the DBP is really liable for any of the claims of private respondents; While there may be no evidence that it has investment in the form of tools, equipment, machineries, work
2. Whether or not the NLRC (or the Labor Arbiter) correctly applied Article 106 of the Labor Code; and, premises, among others, it is enough that it has substantial capital, as was established before the Labor Arbiter
3. Whether or not the wage differential, rest day and legal holiday pay could and should be adjudicated in this as well as the NLRC. In other words, the law does not require both substantial capital and investment in the
case. form of tools, equipment, machineries, etc. This is clear from the use of the conjunction "or". If the intention was
Ruling: to require the contractor to prove that he has both capital and the requisite investment, then the conjunction
Yes, the Court ruled that petitioner DBP is in joint and several liability with CISCOR, in accordance to the Labor "and" should have been used.
Code’s Article 107 and 109 related to Article 106, to pay for the private respondents’ claims, however not Be that as it may, the Court has already taken judicial notice of the general practice adopted in several
including wage differentials. government and private institutions and industries of hiring independent contractors to perform special
Ratio Decidendi: 1-2. The statutory basis for the joint and several liability between DBP and CISCOR is set services.These services range from janitorial, security and even technical or other specific services such as
forth in the Labor Code’s Article 107 and 109 in relation to Article 106. The petitioner’s interpretation of Art. those performed by petitioners Neri and Cabelin. While these services may be considered directly related to
106 that insolvency or unwillingness to pay by the contractor as a requisite for such liability is misplaced. The the principal business of the employer, nevertheless, they are not necessary in the conduct of the principal
petitioner is, no doubt, liable to pay such benefits because the law mandates the joint and several liability of business of the employer.
the principal and the contractor for the protection of labor. As provided for in Eagle Security Agency, Inc. vs Besides, petitioners do not deny that they were selected and hired by BCC before being assigned to work in
NLRC, this Court held: “The contractor is made liable by virtue of his status as direct employer. The principal, the Cagayan de Oro Branch of FFBTC. BCC likewise acknowledges that petitioners are its employees. The
on the other hand, is made the indirect employer of the contractor’s employees for purposes of paying the record is replete with evidence disclosing that BCC maintained supervision and control over petitioners through
employees their wages should the contractor be unable to pay them.” The Court agrees with respondent its Housekeeping and Special Services Division: petitioners reported for work wearing the prescribed uniform
Commission’s holding that, even if DBP argues not being properly impleaded by private respondents, it is of BCC; leaves of absence were filed directly with BCC; and, salaries were drawn only from BCC. Petition
made liable through “Third-Party Complaint” since Rule I, Section 3 of our 1986 Revised NLRC Rules adopts denied.
suppletorily the Rules of Court "in the interest of expeditious labor justice and whenever practicable and
convenient" with the Security Agency’s impleading the Bank for indemnity and subrogation considering that 97. No. L-12582 January 28, 1961
the complainants worked with the Bank "to safeguard their premises, properties and their person". LVN PICTURES, INC vs. PHILIPPINE MUSICIANS GUILD (FFW)
3. The Court agrees with the respondent Commission’s observance that private respondents prayed for relief FACTS:
of rest and holiday pay, significally with no mention of wage differentials, in their position paper submitted before Petitioner companies are corporations, duly organized under the Philippine laws, engaged in the making of
the labor arbiter. Thus, aside from the refund of their cash bond and the payment of their 13th month pay and motion pictures and in the processing and distribution thereof. They employ musicians for the purpose of making
service incentive leave pay for 1989, they are also deemed entitled to rest day and holiday pay. music recordings for title music, background music, musical numbers, finale music and other incidental music,
without which a motion picture is incomplete. Ninety-five (95%) percent of all the musicians playing for the
96. G.R. Nos. 97008-09 July 23, 1993 musical recordings of said companies are members of the Respondent Philippine Musicians Guild (FFW), a
VIRGINIA G. NERI vs. NATIONAL LABOR RELATIONS COMMISSION FAR EAST BANK & TRUST duly registered legitimate labor organization (also known as the Guild). he Guild prayed that it be certified as
COMPANY (FEBTC) and BUILDING CARE CORPORATION, the sole and exclusive bargaining agency for all musicians working in the aforementioned companies.
FACTS: The film companies denied that they have any musicians as employees, and alleged that the musical numbers
Petitioners Virginia G. Neri and Jose Cabelin were hired by, respondent BCC, a corporation engaged in in the filing of the companies are furnished by independent contractors. The lower court sustained the Guild’s
providing services to its clientele. theory, that he guild members are definitely employed by the film companies. A reconsideration of the order
They were assigned to work in the Cagayan de Oro City Branch of respondent FEBT, respectively, Neri an complained of having been denied by the Court en banc, LVN Pictures, inc., and Sampaguita Pictures, Inc.,
radio/telex operator and Cabelin as janitor, before being promoted to messenger. Petitioners instituted filed these petitions for review for certiorari.
complaints against FEBTC and BCC before the Department of Labor and Employment to compel the bank to ISSUE:
accept them as regular employees and for it to pay the differential between the wages being paid them by BCC WON there is ER-EE relationship between the musicians and the petitioner-companies?
and those received by FEBTC employees with similar length of service. HELD:
LA dismissed the complaint for lack of merit. Respondent BCC was considered an independent contractor Yes. ER-EE relationship do exist between the musicians and the film companies.
because it proved it had substantial capital. NLRC affirmed the decision on appeal prompting petitioners to seek Musicians, who supply the musical background for movie productions, are employees of film companies under
redress from this Court. the facts stated in the decision. They work under the supervision of the movie director who is an employee of
Petitioners vehemently contend that BCC in engaged in "labor-only" contracting because it failed to adduce the film company. The right of control of the film company over the musicians is shown (1) by calling the
evidence purporting to show that it invested in the form of tools, equipment, machineries, work premises and musicians through 'call slips' in the name of the company; (2) by arranging schedules in its studio for recording
other materials which are necessary in the conduct of its business. Moreover, petitioners argue that they sessions; (3) by furnishing transportation and meals to musicians; and (4) by supervising and directing in detail,
perform duties which are directly related to the principal business or operation of FEBTC. through the motion picture director, the performance of the musicians before the camera, in order to suit the
ISSUE: W/ N the working relation of BBC and petitioners are labors only, thus, they are employees of FEBTC. music they are playing to the picture which is being flashed on the screen.
HELD: No. The petitioners are employee of BBC. An employer-employee relationship exists where the person for whom the services are performed reserves a
It is well-settled in Article 106 of the Labor Code that there is "labor-only" contracting where: (a) the person right to control not only the end to be achieved but also the means to be used in reaching such end. It may exist
supplying workers to an employer does not have substantial capital or investment in the form of tools, notwithstanding the intervention of an alleged independent contractor who may hire and fire the workers.
The SC ruled that the work of the musical director and musicians is a functional and integral part of the POEA issued an order finding CFS guilty of violation of Article 34(k) of the Labor Code, which make it
enterprise performed at the same studio substantially under the direction and control of the company. unlawful for an entity to withhold or deny travel documents from applicant workers before departure for monetary
or financial considerations other than those authorized under the Code and its implementing rules and
98. G.R. No. 87700 June 13, 1990 regulations. POEA likewise declare that it has no jurisdiction to adjudicate the monetary claims of the
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO vs. respondents.
HON. JESUS G. BERSAMIRA and SAN MIGUEL CORPORATION March 10, 1995, respondents filed a complaint for breach of contract and damages against CFS and
Facts: its surety before RTC.
SanMig entered into contracts for merchandising services with independent contractors Lipercon and After trial, RTC ruled that there was a violation of the contract since CFS failed to deploy and release
D'Rite. In said contracts, it was expressly understood and agreed that the workers employed by the the papers of the respondents, hence they are entitled to damages.
contractors were to be paid by the latter and that none of them were to be deemed employees or agents of On appeal, CFS raise the issue that RTC has no jurisdiction over the case pursuant to Section 4(a) of
SanMig. There was to be no employer-employee relation between the contractors and/or its workers, on the EO 797 which vests upon POEA the jurisdiction of all cases including money claims, arising out of or by virtue
one hand, and SanMig on the other. of any contract involving workers for overseas employment. CFS further averred that the perfection and
San Miguel Corporation Employees Union-PTWGO (Union) advised SanMig that some Lipercon and effectivity of the contract of employment depend upon the actual deployment of the respondents.
D'Rite workers had signed up for union membership and sought the regularization of their employment with CA upheld the jurisdiction of RTC by estoppel, since CFS actively participated in the proceedings
SanMig. Union alleged that this group of employees, while appearing to be contractual workers supposedly before the trial court. CA further upheld that since there is no perfected employment contract, it is under RTC
independent contractors, have been continuously working for SanMig for a period ranging from six (6) months jurisdiction.
to fifteen (15) years and that their work is neither casual nor seasonal as they are performing work or activities ISSUE
necessary or desirable in the usual business or trade of SanMig. Thus, it was contended that there exists a WON there is a perfected employment contract.
"labor-only" contracting situation. It was then demanded that the employment status of these workers be HELD
regularized. Yes. Contracts undergo three distinct stages, to wit: negotiation; perfection or birth; and
When union failed to get a favorable response, it staged a strike in 13 of SanMig’s plants. The latter consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in
filed for an injunction with the courts took cognizance. Union opposes and maintains that the respondent court the contract and ends at the moment of agreement of the parties. Perfection or birth of the contract takes place
has no jurisdiction over it by reason that it is in the nature of a labor dispute. On the other hand, San Mig when the parties agree upon the essential elements of the contract. Consummation occurs when the parties
assert that there is no EER between it and the contractual employees thus there is no labor dispute. fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof.
Issue: Under Article 1315 of the Civil Code, a contract is perfected by mere consent and from the moment
WON the present case is a labor dispute. the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the
Ruling: consequences, which according to their nature, maybe in keeping with good faith, usage and law.
Yes it is. A "labor dispute" under Article 212 includes "any controversy or matter concerning terms An employment contract, like any other contract, is perfected at the moment (1) the parties come to
and conditions of employment or the association or representation of persons in negotiating, fixing, agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties,
maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the (b) object certain which is the subject matter of the contract and (c) cause of the obligation.
disputants stand in the proximate relation of employer and employee. In the case at bar, By the contract, C.F. Sharp, on behalf of its principal, International Shipping
The existence of a labor dispute is not negative by the fact that the plaintiffs and defendants do not Management, Inc., hired respondents as Sandblaster/Painter for a 3-month contract, with a basic monthly salary
stand in the proximate relation of employer and employee. What the Union seeks is to regularize the status of of US$450.00. Thus, the object of the contract is the service to be rendered by respondents on board the vessel
the employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the working unit of while the cause of the contract is the monthly compensation they expect to receive. These terms were embodied
SanMig. This matter definitely dwells on the working relationship between said employees and SanMig. in the Contract of Employment which was executed by the parties. The agreement upon the terms of the
Terms, tenure and conditions of their employment and the arrangement of those terms are thus involved contract was manifested by the consent freely given by both parties through their signatures in the contract.
bringing the matter within the purview of a labor dispute. Further, the Union also seeks to represent those Neither parties disavow the consent they both voluntarily gave. Thus, there is a perfected contract of
workers, who have signed up for Union membership, for the purpose of collective bargaining. Obvious then is employment.
that representation and association, for the purpose of negotiating the conditions of employment are also Further, the commencement of an employer-employee relationship must be treated separately from
involved. In fact, the injunction sought by SanMig was precisely also to prevent such representation. Again, the perfection of an employment contract. The perfection of the contract, which in this case coincided with the
the matter of representation falls within the scope of a labor dispute. date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as
well as the rest of the terms and conditions therein. The commencement of the employer-employee relationship,
99. C.F. Sharp & Co. Inc. vs. Pioneer Insurance & Surety Corporation as earlier discussed, would have taken place had petitioner been actually deployed from the point of hire. Thus,
Facts even before the start of any employer-employee relationship, contemporaneous with the perfection of the
Respondent Wilfredo C. Agustin and Hernando G. Minimo applied with C.F. Sharp for sandblasters employment contract was the birth of certain rights and obligations, the breach of which may give rise to a
and painters in Libya. After interview they were required to submit some requirements. Upon submission, a cause of action against the erring party.
Contract of Employment was executed between respondents and the CFS. They were then advised to prepare Despite the fact that the employer-employee relationship has not commenced due to the failure to
for immediate deployment and to report to CFS to ascertain the schedule of their deployment. deploy respondents in this case, respondents are entitled to rights arising from the perfected Contract of
After a month, respondents were yet to be deployed, prompting them to request for the release of the Employment, such as the right to demand performance by C.F. Sharp of its obligation under the contract.
documents they had submitted to CFS. However, the latter allegedly refused to surrender the documents.
Hence, respondents filed a complaint before the POEA against CFS.
100. G.R. No. L-53590 July 31, 1984 altogether. Realistically, it would be a rare contract of service that gives untrammeled freedom to the party hired
ROSARIO BROTHERS v. OPLE and eschews any intervention whatsoever in his performance of the engagement.
Facts: Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of
Private respondents are tailors, pressers, stitchers and similar workers hired by petitioner in its tailoring the mutually desired result without dictating the means or methods to be employed in attaining it, and those that
department. They were paid weekly wages on piece-work basis. They were registered with SSS as employees control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim
of petitioner and premiums were deducted from their wages. They were also members of the Union which has only to promote the result, create no employer-employee relationship unlike the second, which address both
a CBA with the company. They were required to report from work from Monday to Saturday and to stay in the the result and the means used to achieve it.
tailoring shop for no less than eight (8) hours a day unless no job order was given. Attendance is recorded In the present case, the power to control is missing. Pamana tasked Consulta to organize, develop, manage,
through a bundy clock. A master clutter distributes job orders equally, supervises the work and sees to it that and maintain a sales division, submit a number of enrollments and revenue attainments in accordance with
they were finished as soon as possible. company policies and guidelines, and to recruit, train and direct her Supervising Associates and Health
Private respondents filed a labor complain for violation of PD 851 (13 th Month pay) and PD 1123 Consultants.[12] However, the manner in which Consulta was to pursue these activities was not subject to the
(Emergency Living Allowance) against petitioner. control of Pamana. Consulta failed to show that she had to report for work at definite hours. The amount of time
Issue: she devoted to soliciting clients was left entirely to her discretion. The means and methods of recruiting and
Whether an employer – employee relationship exists between petitioner and private respondents. training her sales associates, as well as the development, management and maintenance of her sales division,
Ruling: were left to her sound judgment.
Yes, there is an employer – employee relationship. Pamana paid Consulta not for labor she performed but only for the results of her labor.[16] Without results,
The existence of employer – employee relationship is determined by the following elements: Consultas labor was her own burden and loss. Her right to compensation, or to commission, depended on the
1. Selection and engagement of the employee; tangible results of her work - whether she brought in paying recruits.
2. The payment of wages; Since there was no employer-employee relationship between Pamana and Consulta, the Labor Arbiter should
3. The power of dismissal; and have dismissed Consultas claim for unpaid commission. Consulta’s remedy is to file an ordinary civil action to
4. The power to control employees conduct. litigate her claim.
In the case at bar, selection and hiring were done by petitioner through the master cutter. Private Petition is dismissed.
respondents received their weekly wages from petitioner on piece-work basis. Petitioner had the power to
dismiss private respondents showed by various memoranda issued for strict compliance. Private 102. G.R. No. 72409 December 29, 1986
respondents’ conduct in the performance of their work was controlled by petitioner. Private respondents Mamerto Besa dbu Besa’s Custombuilt Shoes vs. Cresenciano Trajano, et. Al.
were allowed to register with SSS as employees of petitioner. Facts:
Private respondent Kaisahan ng Mangagawang Pilipino (KAMPIL), a legitimate labor union, filed a
101. CONSULTA VS. CA [145443] (March 18, 2005) Petition for Certification Election for the shoeshiners of Besa’s Custombuilt Shoes owned by Mamerto Besa.
FACTS: The latter opposed the petition, alleging one ground that Besa and the shoeshiners have no employer-
Pamana Philippines (Pamana) is engaged in health care business. Consulta was a managing associate of employee relationship. The Med-Arbiter issued an order declaring that there was an employer-employee
Pamana. Sometime in 1987, Consulta negotiated with the Federation of Filipino Civilian Employees Association relationship between the parties and directed that an election be conducted. Appeal was denied, thus,
(FFCEA) working at the United States Subic Naval Base for a Health Care Plan for the FFCEA members. KAMPIL continued to hold the election.
Pamana issued Consulta a Certification to negotiate for and in behalf of PAMANA with the Federation of Filipino The Court initially denied the petition of Besa, but was reconsidered upon motion. One of the
Civilian Employees Association covering all U.S. facilities in the Philippines, the coverage of FFCEA members arguments raised by the petitioner is that there is no employer-employee relationship between him and the
under the Pamana Golden Care Health Plans. Pamana and the U.S. Naval Supply Depot signed the FFCEA shoeshiners.
account. Consulta, claiming that Pamana did not pay her commission for the FFCEA account, filed a complaint Issue:
for unpaid wages or commission against Pamana. LA ruled in favor of Consulta which ordered the payment of Whether or not there is an employer-employee relationship between the petitioner and the
her unpaid commission. NLRC affirmed such decision. CA reversed the NLRC’s decision because Consulta shoeshiners.
was a commission agent not an employee of Pamana. Hence, this petition. Held:
ISSUE: No. There is no employer-employee relationship existing in the case at bar.
WON Consulta was an employee of Pamana. In the case of Rosario Brothers Inc. vs. Ople, the Court held that existence of employer-employee
RULING: relationship is determined by the following elements, namely, a] selection and engagement of the employee;
NO. The four elements of an employer-employee relationship, which have since been adopted in subsequent b] payment of wages; c] powers of dismissal; and d] power to control the employee's conduct.
jurisprudence,[10] are (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the As correctly pointed out by the CIR in the same parties’ complaint of unfair labor practices, the shoe
power to control. The power to control is the most important of the four elements. shiner does not contribute anything to the capital of the employer other than his service. The shoe shiner in
In Insular Life Assurance Co., Ltd. v. NLRC, the Court explained the scope of the power to control, thus: this instance is paid directly by his customer. In the case of the shoe shiners, the proceeds derived from the
x x x It should, however, be obvious that not every form of control that the hiring party reserves to himself over trade are always divided share and share alike with Besa. The petitioner does not exercise any degree of
the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an control or supervision over their person and their work. The shoe shiners in this instance who, in relation to
employer-employee relationship between them in the legal or technical sense of the term. A line must be drawn Besa, are a partner in the trade and the latter is not an employer.
somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish Reason for the necessity of answering said question. The question of employer-employee relationship
became a primordial consideration in resolving whether or not the subject shoeshiners have the juridical
personality and standing to present a petition for certification election as well as to vote i therein. It is the under the law. Further, with all the premises, tools, equipment, and paraphernalia admittedly all supplied by
position of petitioner that if the shoeshiners are not considered as employees of Besa's the basic petition for respondent company suggests the existence of a “labor only” contracting scheme prohibited by law (Article 106,
certification election must necessarily be dismissed for failure to comply with the mandatory requirements of 109 of the Labor Code; Section 9(b), Rule VIII, Book III, Implementing Rules and Regulations of the Labor
the Labor Code, as amended, that at least thirty (30%) percent of the employees must support the petition for Code). Moreover, the Court emphasizes that, as provided for in Social Security System v. Court of Appeals (39
certification election and that in order to be certified as the sole and exclusive bargaining agent, the union SCRA 629, 635), in a truly independent contractor-contractee relationship, the fees are paid directly to the
must be obtained a majority of the valid votes cast by eligible voters. In the instant case, if the 17 shoeshiners manpower agency in lump sum without implying that the basis of which is the salary per worker multiplied by
are declared ineligible and their votes are consequently nullified the result of the certification election would the number of workers assigned to the company. However, herein alleged contractor instead receives a
be 16 "Yes" votes (33 minus 17) and 16 "No" votes, which is a tie. Since the respondent union did not obtain percentage from the total earnings of all the workers plus an additional amount corresponding to a percentage
a clear majority for the "Yes" votes as required under Rule IV Sec. 8(f) of the Omnibus Rules of the Labor of the earnings of each individual worker, which, perhaps, accounts for the petitioners' charge of unauthorized
Code, it necessarily follows that the respondent union cannot be certified as the sole and exclusive bargaining deductions from their salaries by the respondents. The payment of the workers’ wages is also deemed a critical
agent of the workers of Besa's. factor in determining the actuality of the employer-employee relationship between the petitioner workers and
the respondent company. Unlike respondent company, there exists no evidence to show that the alleged labor
103. G.R. NO. L-48645 JANUARY 7, 1987 contractor had right or control or much less supervise or deal with the petitioners.
PETITIONERS "BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES
104. G.R. No. L-72654-61 January 22, 1990
RESPONDENTS HON. RONALDO B. ZAMORA ALIPIO R. RUGA vs. NLRC
Facts: FACTS:
Petitioner “Brotherhood” Labor Unity of the Philippines (“BLUM”), previously working exclusively as Petitioners were the fishermen-crew members of 7/B Sandyman II, vessels owned and operated by private
“cargadores” and “pahinante” to herein respondent company, San Miguel Corporation, filed a complaint respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and
charging the latter, and the following officers: Enrique Camahort, Federico Ofiate Feliciano Arceo, Melencio office at Camaligan, Camarines Sur. Petitioners rendered service aboard said fishing vessel in various
Eugenia Jr., Ernesto Villanueva, Antonio Bocaling and Godofredo Cueto of unfair labor practice as set forth in capacities, as follows: Alipio Ruga and Jose Parma patron/pilot; Eladio Calderon, chief engineer; Laurente
Section 4 (a), sub-sections (1) and (4) of Republic Act No. 875 and of illegal dismissal. It was alleged that Bautu, second engineer; Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip
respondents ordered the individual complainants to disaffiliate from the complainant union; and that Cervantes and Eleuterio Barbin, fishermen.
management dismissed the individual complainants when they insisted on their union membership. The For services rendered in the conduct of private respondent's regular business of "trawl" fishing, petitioners were
respondent company asserts that the petitioners are not their employees as they are in an independent paid on percentage commission basis in cash. 13% of the proceeds of the sale of the fish-catch if the total
contractor relationship with Guaranteed and Reliable Labor. On February 20, 1969, all the petitioners were proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent
dismissed from their jobs and, thereafter, denied entrance to respondent company's glass factory despite their (10%) of the total proceeds of the sale.
regularly reporting for work. A complaint for illegal dismissal and unfair labor practice was filed by the petitioners. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while
Issue/s: the assistant engineer, second fisherman, and fisherman-winchman received a minimum income of P260.00
Whether or not an employer-employee relationship exists between petitioners-members of the "Brotherhood per week.
Labor Unit Movement of the Philippines" (BLUM) and respondent San Miguel Corporation? On September 11, 1983, petitioners were told to proceed to the police station at for investigation on the report
Ruling: that they sold some of their fish-catch at midsea to the prejudice of private respondent.
Yes, the Court rules that there are evidence strongly indicating the existence of an employee-employer Petitioners denied the charge claiming that the same was a countermove to their having formed a labor union
relationship between petitioner workers and respondent San Miguel Corporation. Hence, the latter is ordered and becoming members of their Union.
to reinstate herein petitioners with three (3) years of backwages; however, where reinstatement is no longer Private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same
possible, the respondent SMC is ordered to pay the petitioners separation pay equivalent to one (1) month pay day, September 11, 1983.
for every year of service. Petitioners individually filed their complaints for illegal dismissal and non-payment of 13th month pay,
Ratio Decidendi: emergency cost of living allowance and service incentive pay.
The Court, noting the elements generally considered in determining the existence of an employee-employer Respondent submitted its position paper denying the employer-employee relationship between private
relationship, emphasizes that the “control test” or the element wherein the employer’s power to control the respondent and petitioners on the theory that private respondent and petitioners were engaged in a joint
employee with respect to the means and methods by which the work is accomplished, as present in this case, venture.
is considered the most important element.This is proven with documentary evidence presented by the LA dismissed the complaint. NLRC affirmed the decision of LA. Hence, this petition.
petitioners establishing respondent SMC's control or right to impose disciplinary measures for violations or ISSUE: W/N there is ER-EE relationship between the petitioners and respondent.
infractions of its rules and regulations as well as its right to recommend transfers and dismissals of the piece HELD: YES.
workers. Furthermore, the exclusive length of time or continuity and habituality of petitioners’ work with the We have consistently ruled that in determining the existence of an employer-employee relationship, the
respondent company bolsters their claim for employee status with the latter as it justifies to conclude that they elements that are generally considered are the following (a) the selection and engagement of the employee;
perform necessary activities desirable in the usual business of the respondent (Phil. Fishing Boat Officers and (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee
Engineers Union v. Court of Industrial Relations, 112 SCRA 159 and RJL Martinez Fishing Corporation v. with respect to the means and methods by which the work is to be accomplished. The employment relation
National Labor Relations Commission, 127 SCRA 454). arises from contract of hire, express or implied. In the absence of hiring, no actual employer-employee relation
Respondent SMC also fails to prove the existence of an independent contractor relationship with the could exist.
Guaranteed and Reliable Labor to assert that the petitioner workers are the latter’s employees instead. The
Court finds that the same has neither substantial capital nor investment to qualify as an independent contractor
From the four (4) elements mentioned, We have generally relied on the so-called right-of-control test where the Private respondents averred that petitioner is not an employee of Kasei Corporation. They alleged that petitioner
person for whom the services are performed reserves a right to control not only the end to be achieved but also was hired in 1995 as one of its technical consultants on accounting matters and act concurrently as Corporate
the means to be used in reaching such end. The test calls merely for the existence of the right to control the Secretary. As technical consultant, petitioner performed her work at her own discretion without control and
manner of doing the work, not the actual exercise of the right. supervision of Kasei Corporation. Petitioner had no daily time record and she came to the office any time she
The conduct of the fishing operations was indisputably shown by the testimony of Alipio Ruga, the patron/pilot wanted. The company never interfered with her work except that from time to time, the management would ask
of 7/B Sandyman II, to be under the control and supervision of private respondent's operations manager. her opinion on matters relating to her profession. Her designation depended solely upon the will of management.
Matters dealing on the fixing of the schedule of the fishing trip and the time to return to the fishing port were As such, her consultancy may be terminated any time considering that her services were only temporary in
shown to be the prerogative of private respondent. While performing the fishing operations, petitioners received nature and dependent on the needs of the corporation.
instructions via a single-side band radio from private respondent's operations manager who called the ISSUE:
patron/pilot in the morning. They are told to report their activities, their position, and the number of tubes of fish- WON there is ER-EE relationship?
catch in one day. Clearly thus, the conduct of the fishing operations was monitored by private respondent thru HELD:
the patron/pilot of 7/B Sandyman II who is responsible for disseminating the instructions to the crew members. Yes. The SC ruled that the petitioner is an employee of respondent Kasei Corporation. She was selected and
While tenure or length of employment is not considered as the test of employment, nevertheless the hiring of engaged by the company for compensation, and is economically dependent upon respondent for her continued
petitioners to perform work which is necessary or desirable in the usual business or trade of private respondent employment in that line of business.
for a period of 8-15 years since 1968 qualify them as regular employees within the meaning of Article 281 of The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power
the Labor Code as they were indeed engaged to perform activities usually necessary or desirable in the usual to control the employee with respect to the means and methods by which the work is to be accomplished; and
fishing business or occupation of private respondent. (2) the underlying economic realities of the activity or relationship. This two-tiered test would provide us with a
Aside from performing activities usually necessary and desirable in the business of private respondent, it must framework of analysis, which would take into consideration the totality of circumstances surrounding the true
be noted that petitioners received compensation on a percentage commission based on the gross sale of the nature of the relationship between the parties. This is especially appropriate in this case where there is no
fish-catch i.e. 13% of the proceeds of the sale if the total proceeds exceeded the cost of the crude oil consumed written agreement or terms of reference to base the relationship on; and due to the complexity of the relationship
during the fishing trip, otherwise only 10% of the proceeds of the sale. Such compensation falls within the scope based on the various positions and responsibilities given to the worker over the period of the latter’s
and meaning of the term "wage" as defined under Article 97(f) of the Labor Code, thus: employment.
(f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of The determination of the relationship between employer and employee depends upon the circumstances of the
being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, whole economic activity, such as: (1) the extent to which the services performed are an integral part of the
or other method of calculating the same, which is payable by an employer to an employee under a written or employer’s business; (2) the extent of the worker’s investment in equipment and facilities; (3) the nature and
unwritten contract of employment for work done or to be done, or for services rendered or to be rendered, and degree of control exercised by the employer; (4) the worker’s opportunity for profit and loss; (5) the amount of
included the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the
facilities customarily furnished by the employer to the employee. . . . permanency and duration of the relationship between the worker and the employer; and (7) the degree of
The claim of private respondent, which was given credence by public respondent, that petitioners get paid in dependency of the worker upon the employer for his continued employment in that line of business.
the form of share in the fish-catch which the patron/pilot as head of the team distributes to his crew members
in accordance with their own understanding is not supported by recorded evidence. Except that such claim 106. G.R. No. L-66394 February 5, 1990
appears as an allegation in private respondent's position paper, there is nothing in the records showing such a PARADISE SAUNA, MASSAGE CORPORATION and JUANITO UY vs. ALEJANDRO NG
sharing scheme as preferred by private respondent. Facts:
Petitioners agreed to lease in favor of the private respondent their business called "Paradise Sauna
105. G.R. No. 170087 August 31, 2006 and Massage Corporation" and that they entered into a contract whereby the latter shall have full control and
ANGELINA FRANCISCO vs. NATIONAL LABOR RELATIONS COMMISSION management of the said business; that as lessee of the said business with full and sole control thereof,
FACTS: private respondent's principal obligation consists of only paying the petitioners the sum of eight thousand
Petitioner was hired by Kasei Corporation during its incorporation stage. She was designated as Accountant pesos (P8,000.00 ) not later than the first five (5) days of each month as rentals and remitting to the latter the
and Corporate Secretary and was assigned to handle all the accounting needs of the company. She was also sum of sixteen thousand pesos ( P16,000.00 ) as guarantee bond; that as such lessee, the respondent
designated as Liaison Officer to the City of Makati to secure business permits, construction permits and other assumed control and management of the petitioner's business, hired and paid personnel to beef up its
licenses for the initial operation of the company. operations and tried religiously to comply with his obligations like paying for his account all government
Although she was designated as Corporate Secretary, she was not entrusted with the corporate documents; licenses, permits, utilities and services in the premises such as water, gas, electricity and telephone; that the
neither did she attend any board meeting nor required to do so. She never prepared any legal document and private respondent paid all the monthly rentals due the petitioners until December 1976; that the petitioner
never represented the company as its Corporate Secretary. However, on some occasions, she was prevailed refused to accept the rental for January 1977 and asked the private respondent to vacate and leave the
upon to sign documentation for the company. In 1996, petitioner was designated Acting Manager, and premises instead thereby terminating his services and forfeiting his guarantee bond of sixteen thousand
consequently perform acts of management. In January 2001, petitioner was replaced by Liza R. Fuentes as pesos ( P16,000.00 ); that petitioners, assisted by Metrocom soldiers, entered the private respondent's office
Manager. Petitioner alleged that she was required to sign a prepared resolution for her replacement but she and through intimidations, forcibly ejected him from the premises, assumed full control and supervision of the
was assured that she would still be connected with Kasei Corporation. On October 15, 2001, petitioner asked business and put another person in his place.
for her salary from Acedo and the rest of the officers but she was informed that she is no longer connected with Petitioner argues he employment of Ng is warranted for his failure to pay the utility bills and salaries
the company. Since she was no longer paid her salary, petitioner did not report for work and filed an action for of the employees, failure to supply the provisions necessary for the conduct of the petitioners' sauna and
constructive dismissal before the labor arbiter.
massage business like lotion, towels and blankets, failure to perform efficiently as manager-administrator of The Court held that Sonza in an independent contractor and not an employee due to the following
the petitioner corporation. reasons: First, independent contractors often present themselves to possess unique skills, expertise or talent
Issue: to distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique
WON the contract between the parties is a management contract. skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not
Ruling: conclusive, of an independent contractual relationship. Second, whatever benefits SONZA enjoyed arose from
No. The claim of the petitioners that respondent Ng is their manager-administrator is untenable since contract and not because of an employer-employee relationship. Third, SONZA’s talent fees, amounting to
it fails to pass the control test pertinent to the existence of an employer-employee relationship. Such control P317,000 monthly in the second and third year, are so huge and out of the ordinary that they indicate more an
by the petitioners over respondent Ng is lacking. The purported management contract is indeed a lease independent contractual relationship rather than an employer-employee relationship. And Fourth, the greater
contract. The reasons given are: the supervision and control the hirer exercises, the more likely the worker is deemed an employee; The less
(1) The respondent paid the petitioners a fixed P8,000.00 monthly even when the business suffers a control the hirer exercises, the more likely the worker is considered an independent contractor. ABS-CBN did
loss. The P8,000.00 was paid at the start of the month with no attention paid to operating expenses, not exercise control over the means and methods of performance of SONZA’s work.
profits, and losses. Applying the control test, SONZA is not an employee but an independent contractor.
(2) The monthly receipts received by the petitioners from Alejandro Ng state that they were given for In the case at bar, SONZA contends that ABS-CBN exercise over the means and method of his work.
rentals from January to October 1976. The receipts for November and December substitute the word The Court ruled in the negative. The Court find that ABS-CBN was not involved in the actual performance that
"commission" for "rental". The respondent explained the change by stating that petitioner Uy produced the finished product of SONZA’s work. ABS-CBN did not instruct SONZA how to perform his job.
changed the receipt as he realized that subleasing the premises to Ng was a violation of the contract ABS-CBN merely reserved the right to modify the program format and airtime schedule “for more effective
with the owner and the latter might discover the violation. The receipts were prepared by the programming.” ABS-CBN’s sole concern was the quality of the shows and their standing in the ratings. Clearly,
petitioners but signed in the presence of the respondent when payment was made. ABS-CBN did not exercise control over the means and methods of performance of SONZA’s work.
(3) The respondent was responsible for all licenses, permits, utilities and services, including the Further, a radio broadcast specialist who works under minimal supervision is an independent
installation and repair of all equipment such as airconditioning units. He had sole control and contractor. SONZA’s work as television and radio program host required special skills and talent, which SONZA
management and did not report to anybody. admittedly possesses. The records do not show that ABS-CBN exercised any supervision and control over how
SONZA utilized his skills and talent in his shows.
107. JOSE Y. SONZA, petitioner, vs. ABS-CBN BROADCASTING CORPORATION Sonza also insists the exclusivity clause in the agreement. The court ruled that it is futile. Being an
Facts exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent
In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity
Corporation (MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented by is not necessarily the same as control.
Sonza, as President and general manager, and Tiangco as its EVP and treasurer. Referred to in the agreement
as agent, MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as talent for radio and television. 108. G.R. No. 155207 August 13, 2008
ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and P317, 000 for the second WILHELMINA OROZCO v. CA
and third year. Facts:
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent Orozco was engaged as a columnist of Philippine Daily Inquirer (PDI), however PDI decided to stop
events concerning his program and career. Mr. Sonza informed that he is waiving and renouncing recovery of her column. Orozco filed a complaint for illegal dismissal, underpayment and non-payment of other benefits.
the remaining amount stipulated in paragraph 7 of the Agreement but reserves the right to seek recovery of the PDI raised the claim that Orozco was not an employee of the newspaper. Petitioner claims that she was under
other benefits under said Agreement. the control of PDI as to the contents of the column, the time or deadlines, the control of space of the article, and
Thereafter, Sonza filed with the Department of Labor and Employment a complaint against ABS-CBN as to discipline.
alleging that the latter did not pay his salaries, separation pay, service incentive pay,13th month pay, signing Issue:
bonus, travel allowance and amounts under the Employees Stock Option Plan (ESOP). Whether or not petitioner, a newspaper columnist is an employee of private respondent PDI, the
ABS-CBN filed a motion to dismiss contending that no employee-employer relationship existed newspaper which publishers the columns and whether or not she was illegally dismissed.
between the parties. However, ABS-CBN continued to remit Sonza’s monthly talent fees but opened another Ruling:
account for the same purpose. That complainant was engaged by respondent by reason of his peculiar skills No. Petitioner is not an employee of PDI, hence not illegally dismissed.
and talent as a TV host and a radio broadcaster. Unlike an ordinary employee, he was free to perform the The Court has constantly adhered to the “four-fold test” to determine whether there exists an employer-
services he undertook to render in accordance with his own style. That whatever benefits complainant enjoyed employee relationship between the parties. These are (a) selection and engagement of the employee; (b)
arose from specific agreement by the parties and not by reason of employer-employee relationship. And that payment of wages; (c) power of dismissal; and (d) the employer’s power to control the employees conduct. Of
the fact that complainant was made subject to respondent’s Rules and Regulations, likewise, does not detract these four elements, it is the power of control which is the most crucial and determinative factor. The presence
from the absence of employer-employee relationship. Thus, there was no employer-employee relationship. or absence of supervisory authority to control the method and the details of performance of the service being
NLRC affirmed the decision of the Labor Arbiter. CA also affirmed the decision of NLRC. rendered and the degree to which the principal may intervene to exercise such control is the significant factor
Issue to determine the existence of employer-employee relationship. In other words, the test is whether the employer
WON there is an employer-employee relationship existed between Sonza and ABS-CBN. controls or has reserved the right to control the employee, not only as to the work done, but also as to the
HELD No. Case law has consistently held that the elements of an employer-employee relationship are: (a) means and methods by which the same is accomplished.
the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) Rules which serve as general guidelines towards the achievement of the mutually desired result are
the employer’s power to control the employee on the means and methods by which the work is accomplished. not indicative of the power of control. Petitioner has misconstrued the “control test”. The main determinant
therefore is whether the rules sset by the employer are meant to contrl not just the results of the work but also 110. G.R. No. 183810 January 21, 2010
the means and method to be used by the hired party in order to achieve such results. The so called control as Farley Fuleche, et. al. vs. ABS-CBN Broadcasting Corporation
to time, space and discipline are dictated by the very nature of the newspaper business itself. Facts:
The Court also applied the “economic reality test”. The economic realities prevailing within the activity The petitioners filed two separate complaints for regularization, unfair labor practice and several
or between the parties are examined, taking into consideration the totality of the circumstances surrounding the money claims against the respondent ABS-CBN Broadcasting Corporation on the ground that a collective
true nature of the relationship between the parties. In this case, there was no written agreement or contract on bargaining agreement (CBA) was executed effective December 11, 1999 to December 10, 2002 but they had
which to base the relationship. In our jurisdiction, the benchmark of economic reality in analyzing possible been excluded from its coverage as ABS-CBN considered them temporary and not regular employees, in
employment relationships for purposes of applying the Labor Code ought to be the economic dependence of violation of the Labor Code. ABS-CBN alleged that the petitioners’ services were contracted on various dates
the worker on his employer. as independent contractors/off camera talents, and they were not entitled to regularization in these capacities.
Petitioner’s main occupation was not a columnist but a women’s right advocate working in various The Labor Arbiter ruled that the petitioners are regular employees of the respondent, thus, entitled to
women’s organizations. Petitioner was not an employee but an independent contractor, engaged to do the benefits and privileges of regular employees. The respondent appealed the case to NLRC. At the same
independent work. time, ABS-CBN terminated the petitioners on the reason of redundancy of job. As a result, petitioners filed a
Petitioner was engaged as a columnist for her talent, skill, experience and her unique viewpoint as a case for illegal dismissal. The Labor Arbiter ruled in favor of ABS-CBN but awarded the petitioners separation
feminist advocate. Respondent was not involved in the actual performance that produced the finished product. PAY. ABS-CBN appealed on the said decision with the NLRC. NLRC issued a joint decision which upheld the
It only reserved the right to shorten petitioner’s articles based on the newspapers capacity to accommodate the existence of employer-employee relationship and that the petitioners were illegally dismissed. CA affirmed the
same. Petitioner, being and individual contractor and not an employee, PDI cannot be held guilty of illegal decision, hence, this petition before the Court.
dismissal. Issue:
Whether or not the petitioners are regular employees.
109. DUMPIT MURILLO vs. CA [G.R. No. 164652] (June 8, 2007) Held:
FACTS: Yes. The petitioners are regular employees.
Respondent, Associated Broadcasting Company hired Petitioner, Murillo, as a newscaster and co-anchor for From the Labor Arbiter up to the CA, all affirmed that the petitioners were regular employees and not
Balitang-Balita, an early evening news program. The contract was a period of 3 mos. Petitioner’s contract was independent contractors as what the respondent alleged. Since petitioners were regular employees, they are
renewed 4 times, after 4 years of repeated renewals, petitioner’s talent contract was expired. Two weeks, after covered by the CBA, thus entitled for the benefits and privileges. Below is the pertinent provision of the CBA,
the expiration of the contract, petitioner wrote a letter to VP of News and Public Affairs, informing the latter that Section 1. APPROPRIATE BARGAINING UNIT. – The parties agree that the appropriate bargaining unit shall
she was still interested with renewing her contract subject to salary increase. Thereafter, petitioner stopped be regular rank-and-file employees of ABS-CBN BROADCASTING CORPORATION but shall not include:
reporting to a work. After a month, petitioner sent a demand letter to ABC, demanding reinstatement and a) Personnel classified as Supervisor and Confidential employees;
payment of unpaid wages. LA dismissed the complaint. NLRC reversed the decision of LA and held that b) Personnel who are on "casual" or "probationary" status as defined in Section 2 hereof;
employer-employee relationship existed between petitioner and ABC and that petitioner was illegally dismissed c) Personnel who are on "contract" status or who are paid for specified units of work such as writer-
being a regular employee. CA dismissed the decision of NLRC and held that the petitioner was a fixed-term producers, talent-artists, and singers.
employee. Hence, this petition. The inclusion or exclusion of new job classifications into the bargaining unit shall be subject of discussion
ISSUE: between the COMPANY and the UNION. [Emphasis supplied]
WON there is an employer-employee relationship between petitioner and ABC. Under these terms, the petitioners are members of the appropriate bargaining unit because they are
RULING: regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in
YES. The Court of Appeals committed reversible error when it held that petitioner was a fixed-term employee. the records shows that they are supervisory or confidential employees; neither are they casual nor
Petitioner was a regular employee under contemplation of law. The practice of having fixed-term contracts in probationary employees. Most importantly, the labor arbiter’s decision of January 17, 2002 – affirmed all the
the industry does not automatically make all talent contracts valid and compliant with labor law. The assertion way up to the CA level – ruled against ABS-CBN’s submission that they are independent contractors. Thus,
that a talent contract exists does not necessarily prevent a regular employment status. as regular rank-and-file employees, they fall within CBA coverage under the CBA’s express terms and are
The elements to determine the existence of an employment relationship are: (a) the selection and engagement entitled to its benefits.
of the employee, (b) the payment of wages, (c) the power of dismissal, and (d) the employers power to control. Moreover, when ABS-CBN terminated the petitioners’ employment in the ground of redundancy, it
The most important element is the employers control of the employees conduct, not only as to the result of the impliedly admitted that the petitioners were regular employees whose services, by law, can only be
work to be done, but also as to the means and methods to accomplish. In the case at bar, ABC had control over terminated for the just and authorized causes defined under the Labor Code.
the performance of petitioners work. The duties of petitioner as enumerated in her employment contract indicate
that ABC had control over the work of petitioner. Aside from control, ABC also dictated the work assignments 111. G.R. NO. 184885 MARCH 7, 2012
and payment of petitioners wages. ABC also had power to dismiss her. All these being present, clearly, there PETITIONER ERNESTO G. YMBONG
existed an employment relationship between petitioner and ABC. RESPONDENTS ABS-CBN BROADCASTING CORPORATION
In our view, the requisites for regularity of employment have been met in the instant case. Gleaned from the Facts:
description of the scope of services aforementioned, petitioners work was necessary or desirable in the usual Petitioner Ernesto G. Ymbong (“Ymbong”) filed a complaint for illegal dismissal against respondents ABS-CBN
business or trade of the employer which includes, as a pre-condition for its enfranchisement, its participation in Broadcasting Corporation and its Assistant Station Manager for Radio Dante Luzon (“Luzon”), and AM station
the government's news and public information dissemination. In addition, her work was continuous for a period DYAB Station Manager Veneranda Sy. After Luzon’s issuance of the March 25, 1998 Memorandum asking all
of four years. This repeated engagement under contract of hire is indicative of the necessity and desirability of employees/talents who wants to run for any position in the election to file a leave of absence which he later
the petitioners work in private respondent ABCs business. admits wrong as the company’s policy requires them for resignation, Ymbong told Luzon he will leave radio for
a couple of months because he will campaign for the administration ticket. After the election, however, DOLE Regional Director ruled that respondent is an employee of petitioner, and that the former is
respondents found that Ymbong ran for public office as councilor of Lapu-Lapu City and lost. Ymbong tried to entitled to his money claims amounting to P203, 726.30. Petitioner sought reconsideration of the Order,
come back to ABS CBN Cebu; ABS CBN only agreed so out of pure liberality to give him a chance to wind up claiming that the Regional Director gave credence to the documents offered by respondent without examining
his participation in the well rating radio drama. On September 14, 1998, Luzon issued him a memorandum the originals, but at the same time he missed or failed to consider petitioner’s evidence. On appeal to the DOLE
terminating his services. Both the labor arbiter and the NLRC ruled in favor of petitioner; however, on an appeal, Secretary, petitioner denied once more the existence of employer-employee relationship. Petitioner maintained
the CA reversed and set aside the Decision and Resolution of the NLRC. Hence, this petition. that there is no employer-employee relationship had ever existed between it and respondent because it was
Issue/s: the drama directors and producers who paid, supervised and disciplined respondent. It also added that the case
(1) Whether or not Policy No. HR-ER-016 is valid; was beyond the jurisdiction of the DOLE and should have been considered by the labor arbiter
(2) Whether or not the March 25, 1998 Memorandum issued by Luzon superseded Policy No. HR-ER-016; because respondent’s claim exceeded P5,000.00.
and, Issue: Does the Secretary of Labor have the power to determine the existence of an employer-employee
(3) Whether or not Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by relationship?
ABS-CBN. HELD: NO. To resolve this pivotal issue, one must look into the extent of the visitorial and enforcement power
Ruling: of the DOLE found in Article 128 (b) of the Labor Code, as amended by Republic Act 7730. It reads:
The Court denied the petition for lack of merit. The Court finds that Policy No. HR-ER-016 is valid and not Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the
superseded by the March 25, 1998 Memorandum issued by Luzon. Ymbong is deemed resigned when he ran contrary, and in cases where the relationship of employer-employee still exists, the
for councilor. Secretary of Labor and Employment or his duly authorized representatives shall have the
Ratio Decidendi: power to issue compliance orders to give effect to the labor standards provisions of this Code
1. As provided for in the case of Manila Broadcasting Company v. NLRC: “Although §11(b) of R.A. No. 6646 and other labor legislation based on the findings of labor employment and enforcement
does not require mass media commentators and announcers such as private respondent to resign from officers or industrial safety engineers made in the course of inspection xxx
their radio or TV stations but only to go on leave for the duration of the campaign period, this Court ruled The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into play
that the company may nevertheless validly require them to resign as a matter of policy.” ABS-CBN, like only “in cases when the relationship of employer-employee still exists.” Of course, a person’s entitlement
Manila Broadcasting Company, also had a valid justification for Policy No. HR-ER-016. Its rationale is to labor standard benefits under the labor laws presupposes the existence of employer-employee relationship
embodied in the policy itself - employees who [intend] to run for public office or accept political appointment in the first place. The clause signifies that the employer-employee relationship must have existed even
should resign from their positions, in order to protect the company from any public misconceptions and, to before the emergence of the controversy. Necessarily, the DOLE’s power does not apply in two
preserve its objectivity, neutrality and credibility, the company reiterates the following policy guidelines for instances, namely: (a) where the employer-employee relationship has ceased; and (b) where no such
strict implementation. relationship has ever existed.
2. Having been issued beyond the scope of Luzon’s authority as Assistant Station Manager for Radio of ABS In the instant case, save for respondents self-serving allegations and self-defeating evidence, there is
CBN, the March 25, 1998 Memorandum is void and did not supersede Policy No. HR-ER-016. Further, no substantial basis to warrant the Regional Directors finding that respondent is an employee of petitioner.
since Luzon himself who issued the subject memorandum acknowledged that it is not in harmony with the Interestingly, the Order of the Secretary of Labor denying petitioners appeal, as well as the decision of the Court
Policy issued by the upper management, there is no reason for it to be a source of right for Ymbong. of Appeals dismissing the petition for certiorari, are silent on the issue of the existence of an employer-employee
3. As Policy No. HR-ER-016 is the subsisting company policy and not Luzon’s March 25, 1998 Memorandum, relationship, which further suggests that no real and proper determination the existence of such relationship
Ymbong is deemed resigned when he ran for councilor. Since there was no termination to speak of, the was ever made by these tribunals. Even the dissent skirted away from the issue of the existence of employer-
requirement of due process in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty- employee relationship and conveniently ignored the dearth of evidence presented by respondent.
bound to ask him to explain why he did not tender his resignation before he ran for public office as The first situation is categorically covered by Sec. 3, Rule 11 of the Rules on the Disposition of Labor
mandated by the subject company policy. The Court agrees that as pointed out by ABS-CBN, had Ymbong Standards Cases15 issued by the DOLE Secretary. It reads:
been truthful to his superiors, they would have been able to clarify to him the prevailing company policy Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE INSPECTION
and inform him of the consequences of his decision in case he decides to run, as Luzon did in Patalinghug’s Sec. 3. Complaints where no employer-employee relationship actually exists. Where employer-
case. employee relationship no longer exists by reason of the fact that it has already been severed, claims
for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters.
112. G.R. No. 179652 May 8, 2009 Accordingly, if on the face of the complaint, it can be ascertained that employer-employee relationship no longer
PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE exists, the case, whether accompanied by an allegation of illegal dismissal, shall immediately be endorsed by
DEPARTMENT OF LABOR AND EMPLOYMENT and JANDELEON JUEZAN, the Regional Director to the appropriate branch of the National Labor Relations Commission (NLRC).
Facts: Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee
Jandeleon Juezan (respondent) filed a complaint against People’s Broadcasting Service, Inc. (Bombo relationship has terminated or such relationship has not arisen at all. The reason is obvious. In the second
Radyo Phils., Inc) (petitioner) for illegal deduction, non-payment of service incentive leave, 13th month pay, situation especially, the existence of an employer-employee relationship is a matter which is not easily
premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and non- determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are not
coverage of SSS, PAG-IBIG and Philhealth before the Department of Labor and Employment (DOLE) verifiable from a mere ocular examination. The determination of which should be comprehensive and intensive
Regional Office No. VII,Cebu City. and therefore best left to the specialized quasi-judicial body that is the NLRC.
On the basis of the complaint, the DOLE conducted an inspection. Summary investigations were
conducted, with the parties eventually ordered to submit their respective position papers.
113. G.R. Nos. 204944-45 December 3, 2014 service incentive leave pay, damages and attorney's fees, petitioners alleged that they performed functions
FUJI TELEVISION NETWORK, INC. vs. ARLENE S. ESPIRITU necessary and desirable in ABS-CBN's business. Mandated to wear company IDs and provided all the
FACTS: equipment they needed, petitioners averred that they worked under the direct control and supervision of ABC
Petitioner was engaged by Fuji Television Network, Inc. (“Fuji”) as a news correspondent/producer “tasked to CBN and, at the end of each day, were informed about the news to be covered the following day, the routes
report Philippine news to Fuji through its Manila Bureau field office.” Arlene’s employment contract initially they were to take and, whenever the subject of their news coverage is quite distant, even the start of their
provided for a term of one (1) year but was successively renewed on a yearly basis with salary adjustment upon workday. Due to the importance of the news items they covered and the necessity of their completion for the
every renewal. In 2009, Arlene was diagnosed with lung cancer. Fuji wanted not to renew Arlene’s contract. success of the program, petitioners claimed that, under pain of immediate termination, they were bound by
On May 6, 2009, the day after Arlene signed the non-renewal contract, she filed a complaint for illegal dismissal the company’s policy on, among others, attendance and punctuality.
and attorney’s fees with the National Capital Region Arbitration Branch of the National Labor Relations Respondents insisted that, pursuant to their Talent Contracts, petitioners were hired as talents, to act
Commission. She alleged that she was forced to sign the non-renewal contract when Fuji came to know of her as reporters and/or cameramen for designated periods and rates. Fully aware that they were not considered
illness and that Fuji withheld her salaries and other benefits for March and April 2009 when she refused to sign. or to consider themselves as employees of a particular production or film outfit, petitioners were supposedly
Labor Arbiter Corazon C. Borbolla dismissed Arlene’s complaint. Citing Sonza v. ABS-CBN and applying the engaged on the basis of the skills, knowledge or expertise they already possessed and, for said reason,
four-fold test, the Labor Arbiter (LA) held that Arlene was not Fuji’s employee but an independent contractor. required no further training from ABS-CBN. Although petitioners were inevitably subjected to some degree of
Arlene appealed before the National Labor Relations Commission (NLRC). In its decision dated March 5, 2010, control, the same was allegedly limited to the imposition of general guidelines on conduct and performance,
the NLRC reversed the Labor Arbiter’s decision. CA affirmed the decision of NLRC. simply for the purpose of upholding the standards of the company and the strictures of the industry. Never
ISSUE: subjected to any control or restrictions over the means and methods by which they performed or discharged
WON Espiritu has EE-ER relationship with Fuji Television Network? the tasks for which their services were engaged, petitioners were, at most, briefed whenever necessary
HELD: regarding the general requirements of the project to be executed.
Yes. Espiritu is an employee of Fuji Television Network. Issue:
To determine the existence of an employer-employee relationship, the “control test” shall be applied. Under the WON petitioners can be considered as regular employees of ABS.
four-fold test, the “control test” is the most important. As to how the elements in the four-fold test are proven, Ruling:
this court has discussed that: [t]here is no hard and fast rule designed to establish the aforesaid elements. Any Yes, by the application of control test as there is the presence of reasonable connection between the
competent and relevant evidence to prove the relationship may be admitted. Identification cards, cash vouchers, activity performed by the employee in relation to the business or trade of the employer.
social security registration, appointment letters or employment contracts, payrolls, organization charts, and As cameramen/editors and reporters, petitioners were undoubtedly performing functions necessary
personnel lists, serve as evidence of employee status. and essential to ABS-CBN’s business of broadcasting television and radio content. It matters little that
Arlene was hired by Fuji as a news producer, but there was no showing that she was hired because of unique petitioners’ services were engaged for specified periods TV Patrol Bicol and that they were paid according to
skills that would distinguish her from ordinary employees. Neither was there any showing that she had a the budget allocated therefor. Aside from the fact that said program is a regular weekday fare of the ABS-
celebrity status. Her monthly salary amounting to US$1,900.00 appears to be a substantial sum. Her contract CBN’s Regional Network Group in Naga City, the record shows that, from their initial engagement in the
also indicated that Fuji had control over her work because she was required to work for eight (8) hours from aforesaid capacities, petitioners were continuously re-hired by respondents over the years. To the mind of the
Monday to Friday, although on flexible time. As compared to Sonza case and to Dumpit-Murillo case, Sonza Court, respondents’ repeated hiring of petitioners for its long-running news program positively indicates that
was not required to work for eight (8) hours, while Dumpit-Murillo had to be in ABC to do both on-air and off-air the latter were ABS-CBN’s regular employees. It also appears that petitioners were subject to the control and
tasks. Fuji gave her instructions on what to report. Even the mode of transportation in carrying out her functions supervision of respondents which, first and foremost, provided them with the equipments essential for the
was controlled by Fuji. discharge of their functions. Prepared at the instance of respondents, petitioners’ Talent Contracts tellingly
Arlene was a regular employee with a fixed-term contract. The test for determining regular employment is provided that ABS-CBN retained “all creative, administrative, financial and legal control” of the program to
whether there is a reasonable connection between the employee’s activities and the usual business of the which they were assigned. Aside from having the right to require petitioners “to attend and participate in all
employer. Article 280 provides that the nature of work must be "necessary or desirable in the usual business or promotional or merchandising campaigns, activities or events for the Program,” ABS-CBN required the former
trade of the employer" as the test for determining regular employment. Arlene’s services is necessary in the to perform their functions “at such locations and Performance/Exhibition Schedules” it provided or, subject to
usual business or trade of Fuji. In addition, the repeated engagement under contract of hire is indicative of the prior notice, as it chose determine, modify or change.
necessity and desirability of the petitioner’s work in private respondent. Difference with the Sonza case: (added info, baka tanungin)
The following distinctions were significantly observed between employees like petitioners and television or
114. Begino, et. Al vs. ABS-CBN radio personalities like Sonza, to wit:
Facts:
ABS-CBN engaged the services of petitioners Begino and Del Valle (Del Valle) as First. In the selection and engagement of petitioners, no peculiar or unique skill, talent or celebrity status was
Cameramen/Editors while Sumayao and Llorin as Reporters for TV Broadcasting. With their services required from them because they were merely hired through petitioner’s personnel department just like any
engaged by respondents thru Talent Contracts which specifically providing that nothing therein shall be ordinary employee.
deemed or construed to establish an employer-employee relationship between the parties, though regularly
renewed repeatedly over the years, provided terms ranging from three (3) months to one (1) year, petitioners Second. The so-called "talent fees" of petitioners correspond to wages given as a result of an employer-
were given Project Assignment Forms which detailed, the duration of a particular project as well as the budget employee relationship. Petitioners did not have the power to bargain for huge talent fees, a circumstance
and the daily technical requirements thereof. negating independent contractual relationship.
Claiming that they were regular employees of ABS-CBN, petitioners filed against respondents a
complain before the NLRC for regularization, underpayment of overtime pay, holiday pay, 13th month pay, Third. ABS could always discharge petitioners should it find their work unsatisfactory, and petitioners are
highly dependent on the petitioner for continued work. it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means.
The first, which aim only to promote the result, create no employer-employee relationship unlike the second,
Fourth. The degree of control and supervision exercised by ABS over petitioners through its supervisors which address both the result and the means used to achieve it.
negates the allegation that petitioners are independent contractors Based on the foregoing cases, if the specific rules and regulations that are enforced against insurance
agents or managers are such that would directly affect the means and methods by which such agents or
115. Tongko vs. Manulife managers would achieve the objectives set by the insurance company, they are employees of the insurance
Facts company. In the instant case, Manulife had the power of control over Tongko that would make him its employee.
Manufacturers Life Insurance Co. (Phils) (Manulife) is a domestic corporation engaged in life insurance Several factors contribute to this conclusion.
business, where Renato A. Vergel De Dios, was the President and Executive Officer. Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance
Petitioner, Gregorio V. Tongko, started his professional relationship with Manulife by virtue of a Career with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the
Agent’s Agreement. Under the agreement, it is agreed that Agent is an independent contractor and cannot be company’s products that is satisfactory to the company; and (3) compliance with a quota of new businesses.
interpreted as creating an employer-employee relationship between the Company and the agent. Later in 1990, Among the company regulations of Manulife are the different codes of conduct such as the Agent
he became a branch manager. Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement,
Sometime on 2001, Manulife instituted manpower development programs in the regional sales which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was
management level. On a letter addressed to Tongko, De dios stated that on the Metro North Sales meeting, it obliged to obey and comply with the codes of conduct was not disowned by respondents.
was found out that the region of Tongko was the lowest performer(on a per Manager basis) and continues to Thus, with the company regulations and requirements alone, the fact that Tongko was an employee
remain one of the laggards on the area. Because of this De Dios ordered him to hire at his expense a competent of Manulife may already be established. Certainly, these requirements controlled the means and methods by
assistant who can unload much of the routine tasks which can be easily delegated. This assistant should be so which Tongko was to achieve the company’s goals.
chosen as to complement Tongko’s skills and help in the areas where he feel “may not be your cup of tea.” More importantly, Manulife’s evidence establishes the fact that Tongko was tasked to perform
Also, Effective immediately, Kevin and the rest of the Agency Operations will deal with the North Star Branch administrative duties that establishes his employment with Manulife.
(NSB) in autonomous fashion. De Dios decided to make this change so as to reduce Tongkos span of control
and allow to concentrate more fully on overseeing the remaining groups under Metro North, his Central Unit 116. G.R. No. 84484 November 15, 1989
and the rest of the Sales Managers in Metro North. INSULAR LIFE v. NLRC
Thereafter, also on a letter, De Dios terminates the services of Tongko, that despite the series of Facts:
meeting and communications, all these efforts failed in helping Tongko’s direction with Management’s avowed Insular Life Assusrance Co. and Melecio Basiao entered into a contract by which Basiao was
agency growth policy. authorized to solicit within the Philippines applications for insurance and receive compensation in the form of
Therefrom, Tongko filed a complaint with the NLRC against Manulife for illegal dismissal. Tongko commissions. The contract also contained provisions governing the relations of the parties, the duties of the
alleged that there is employer-employee relationship when De Dios gave him specific directives on how to Agent, the acts prohibited to him, and the modes of termination of the agreement. Four years later, parties
manage his area of responsibility. He further claimed that Manulife exercised control over him. entered into another contract – an Agency Manager’s Contract – and to implement his end of it, Basiao
LA dismissed the complaint for lack of employer-employee relationship. organized an agency or office to which he gave the name M. Basiao and Associates, while currently fulfilling
NLRC reversed the same and finding that there is an illegal dismissal. his commitments under the first contract with the company.
On appeal, ca reversed the latter decision, finding the absence of an employer-employee relationship, The company terminated the Agency Manager’s Contract. Basiao sued the company for civil action
such that NLRC has no jurisdiction over the case. CA found that Manulife did not exercise control over Tongko which he claims prompted the termination of his first contract and to stop payment of his commissions.
that would render the latter an employee of Manulife. Complainant sought to recover the unpaid commissions. Respondent asserts that Basiao is not an employee
ISSUE of the company but an independent contractor and the company had no obligation to him for unpaid
WON there is er-e relationship commissions under the terms and conditions of his contract.
HELD Issue:
YES. In the determination of whether an employer-employee relationship exists between two parties, Whether or not respondent Basiao is an employee or independent contractor of Insular Life.
this Court applies the four-fold test to determine the existence of the elements of such relationship. In Pacific Ruling:
Consultants International Asia, Inc. v. Schonfeld, 516 SCRA 209, 228 (2007), the Court set out the elements of Basiao was not and employee of petitioner, but an independent contractor.
an employer-employee relationship, thus: Jurisprudence is firmly settled that whenever the existence of an The critical feature in distinguishing the status of an employee from that of an independent contractor
employment relationship is in dispute, four elements constitute the reliable yardstick: (a) the selection and is control, that is, whether or not the party who engages the services of another has the power to control the
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s latter’s conduct in rendering such services. However, not every form of control that the hiring party reserves to
power to control the employee’s conduct. It is the so-called “control test” which constitutes the most important himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of
index of the existence of the employer-employee relationship that is, whether the employer controls or has establishing an employer-employee relationship between them in the legal or technical sense of the term.
reserved the right to control the employee not only as to the result of the work to be done but also as to the The rules in the contract served merely as guidelines towards the achievement of the mutually desired
means and methods by which the same is to be accomplished. Stated otherwise, an employer-employee result without dictating the means or methods to be employed in attaining it, and those that control or fix the
relationship exists where the person for whom the services are performed reserves the right to control not only methodology and bind or restrict the party hired to the use of such means.
the end to be achieved but also the means to be used in reaching such end. Basiao was a commission agent, an independent contractor whose claim for unpaid commissions
Logically, the line should be drawn between rules that merely serve as guidelines towards the should have been litigated in an ordinary civil action.
achievement of the mutually desired result without dictating the means or methods to be employed in attaining
117. VINOYA vs. NLRC [G.R. No. 126586] (February 2, 2000) 118. G.R. No. L-55674 July 25, 1983
FACTS: La suerte cigar and cigarette factory vs. Director of the bureau of labor relations
Petitioner Vinoya worked with the Regent Food Corporation (RFC) as sales representative untile his services Facts:
were terminated. Petitioner was under the direct control and supervision of plant manager and senior salesman The La Suerte Cigar and Cigarette Factory Provincial (Luzon) and Metro Manila Sales Force
of RFC. Thereafter, he was transferred by RFC to Peninsula Manpower Company (PMCI), an agency which Association (herein referred to as the local union) applied for and was granted chapter status by the National
provides RFC with additional contractual workers pursuant to “Contract of Service”. After his transfer to PMCI, Association of Trade Unions (hereinafter referred to as NATU). Some thirty-one (31) local union members
petitioner was reassigned to RFC as sales representative. Subsequently, the personal manager of RFC signed a joint letter withdrawing their membership from NATU. Nonetheless, the local union and NATU filed a
informed the petitioner that his services were terminated. He was told that the dismissal was due to expiration petition for direct certification or certification election which alleged among others, that 48 of the 60 sales
of Contract of Service. RFC maintained that no employer-employee relationship existed between petitioner and personnel of the Company were members of the local union; that the petition is supported by no less than
itself. It insisted that the petitioner was an employee of PMCI, an independent contractor, which had contract of 75% of the sales force; that there is no existing recognized labor union in the Company representing the said
service with RFC. RFC presented an employment contract signed by petitioner which appeared that PMCI was sales personnel; that there is likewise no existing collecting bargaining agreement; and that there had been
his employer. Petitioner filed a complaint for illegal dismissal. LA ruled in favor of petitioner. LA concluded that no certification election in the last 12 months preceding the filing of the petition.
RFC was the true employer of petitioner and PMCI is engaged only in labor-only contracting. NLRC reversed The Company then filed a motion to dismiss the petition on the ground that it is not supported by at
the decision. NLRC opined that PMCI is an independent contractor because it has substantial capital and as least 30% of the members of the proposed bargaining unit because (a) of the alleged 48 members of the local
such it was the true employer of petitioner. Hence, this petition. union, 31 had withdrawn prior to the filing of the petition; and (b) 14 of the alleged members of the union were
ISSUE: not employees of the Company but were independent contractors. NATU and the local union opposed the
WON petitioner is an employee of RFC. Company's motion to dismiss alleging that the 14 dealers are actually employees of the Company because
RULING: they are subject to its control and supervision. The Labor Arbiter dismissed the petition on the ground
YES. Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely that the 14 dealers were independent contractors. The Director of Bureau of Labor Relations reversed said
recruits, supplies, or places workers to perform a job, work, or service for a principal. In labor only contracting, decision and upheld that the said dealers were employees.
the following elements are present: (a) The contractor or subcontractor does not have substantial capital or The Company stands that the 14 dealers were independent contractors based on the dealership
investment to actually perform the job, work, or service under its own account and responsibility; (b) The agreement.
employees recruited, supplied or places by such contractor or subcontractor are performing activities which are Issue:
directly related to the main business of the principal. Whether or not the 14 dealers are employees or independent contractors.
On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal Held:
agrees to put or farm out with a contractor or subcontractor the performance or completion of a specific job, The 14 dealers are independent contractors pursuant to their dealership contract.
work or service within a definite or predetermined period, regardless of whether such job, work or service is to The Court followed the rule in Mafinco case wherein the determination of the status of employment
be performed or completed within or outside the premises of the principal. A person is considered engaged in lies in the contract between the employer and employee or independent contractor. The Court is inclined that
legitimate job contracting or subcontracting if the following conditions occur: based on the dealership contract, that the status thereby created is one of independent contractorship,
(a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform pursuant to the first rule in the interpretation of contracts that the literal meaning of the stipulations shall
the job, work or service on its own account and under its own responsibility according to its own manner and control.
method, and free from the control and direction of the principal in all matters connected with the performance The following are the pertinent provisions of the dealership contract which upholds the absence of
od the work except as to the results thereof; employer-employee relationship: that the dealer shall handle the products in accordance with existing laws
(b) The contractor or subcontractor has substantial capital or investment; and regulations of the government; that the dealer shall send his orders to the factory plant in cash in any
(c) The agreement between the principal and contractor or subcontractor assures the contractual employees amount or on credit up to the amount of not more than P10,000.00 only at any given time; that the factory
entitlement to all labor and occupational safety and health standards, free exercise of the right to self- shall supply the dealer with a truck or a panel delivery and all expenses for repairs shall be borne by the
organization, security of tenure, and social and welfare benefits. factory; that the dealer shall not receive any commission but shall be given a discount for all sales and said
It is not enough to show substantial capitalization or investment in the form of tools, equipment, machineries discount shall be decided by the factory from time to time; that the dealer alone shall be responsible for any
and work premises, among others, to be considered as an independent contractor. In fact, jurisprudential violation of any law; that the dealer shall sell the products at the price to be agreed upon between the parties;
holding are to the effect that in determining the existence of an independent contractor relationship. PMCI does and that the dealer shall post a surety bond of not less than P10,000.00 to guarantee and secure complete
not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises, and faithful performance; the either party may terminate the contract without cause by giving 15 day notice in
among others, to qualify as an independent contractor. While its has an authorized capital stock of 1M, only writing, however, in the event of breach or failure to comply with any of the conditions, the factory may
75k is actually paid-in, which, to our mind, cannot be considered as substantial capitalization. PMCI was not terminate or rescind the contract immediately.
engaged to perform a specific and special or service, which is one of the strong indicators that an entity is an There are no provisions of the contract that as regards to the wages of the dealers. The fact that the
independent contractor. As stated in the Contract of Service, the sole undertaking of PMCI was to provide RFC 14 local union members voluntarily executed with La Suerte formal dealership agreements which indicate the
with a temporary workforce ab;e to carry out whatever service may be required by it. Such venture was complied distribution and sale of La Suerte cigarettes signifies that they were acting as independent businessmen.
with tby PMCI when the required personnel were actually assigned to RFC. Moreover, the Company has no control over the supervision of the dealers. The dealer on his own
Even using the four fold test to ascertain whether RFC is the true employer of petitioner. In determining the account sells the cigarettes in any manner he deems best without constraint as to time. The dealers do not
existence of employer-employee relationship the following elements of the four-fold test are generally devote their full time in selling company products. They are likewise engaged in other livelihood and
considered. (a) The selection and engagement of the employee or the power to hire; (b) The payment of wages; businesses while selling cigarettes manufactured by the company.
(c) The power to dismiss; (d) the power to control the employee. Petition is granted.
Therefore, the 14 dealers are independent contractors, and as a result, the required at least 30%
jurisdictional requirement necessary to support the petition for certification election was not met. 120. G.R. No. 102467 June 13, 1997
EQUITABLE BANKING CORPORATION vs. HON. NATIONAL LABOR RELATIONS COMMISSION, First
119. G.R. NO. 121605 JANUARY 2, 2000 Division, and RICARDO L. SADAC
PETITIONERS PAZ MARTIN JO and CESAR JO FACTS:
RESPONDENTS NATIONAL LABOR RELATIONS COMMISSION and PETER MEJILA Private respondent Atty. Sadac was appointed as Vice-President for the Legal Department and
Facts: General Counsel of petitioner bank by its President, with a monthly salary of P8,000.00, plus allowances and
In November 1992, Peter Mejila (“Mejila”) had an altercation with a co-barber in the petitioners’ barbershop bonuses.
where he worked as caretaker-barber, and subsequently reported the matter to Atty. Macaraya of the labor The turning point in the relationship among the parties surfaced, when, nine lawyers of the bank's
department. After summonses and investigation, it was found that the dispute was between Mejila and his co- Legal Department, who were all under private respondent, addressed a letter-petition accusing private
barber, and not with the petitioner. During a mediation meeting, Mejila demanded payment for separation pay respondent of abusive conduct, inefficiency, mismanagement, ineffectiveness and indecisiveness.
and monetary benefits despite the assurance that he was not being driven out from his work. Thereafter, Mejila Convinced that reconciliation was out of the question, the bank issued a memorandum to the private
did not attend another conference with them. Then, sometime in January 1993, he abruptly stopped reporting respondent stating among others, that it has chosen the more compassionate option of waiting for your
at work and began as a regular barber at another barbershop. He then filed a complaint for illegal dismissal voluntary resignation from your employ with the Bank.
with prayer for separation pay, monetary benefits, attorney’s fees, and damages, significantly without relief of Private respondent again made requests for a full hearing with the board but was unheeded. This
reinstatement, against petitioners. The labor arbiter ruled against Mejila with findings that the latter left his job prompt the private respondent to file with the Manila arbitration branch of the NLRC, a complaint, against herein
voluntarily. On an appeal, The NLRC ruled in favor of Mejila for failure of the petitioners to observe due process petitioners for illegal dismissal and damages.
before dismissing the complainant. Hence, this petition. LA RULING: The Labor Arbiter was convinced that the relationship between petitioner bank and private
Issue/s: respondent was one of lawyer-client based on the functions of the latter which "only a lawyer with highly trained
1. Whether or not there exists an employee-employee relationship between petitioners and private legal mind, can effectively discharge.
respondent; and NLRC RULING: It ruled that private respondent was denied the right to due process with the bank's failure to
2. Whether or not private respondent was dismissed from or had abandoned his employment. observe the twin requirements of notice and hearing.
Ruling: ISSUE: W/N there is an ER-EE relationship between Equitable bank and respondent Sadac.
Yes, the Court rules that there is no doubt private respondent was employed by petitioners absent a showing HELD: YES. In determining the existence of an employer-employee relationship, the following elements
that both did not have clear intent to pursue a relationship of industrial partnership. The court ruled sustaining are considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
the Labor Arbiter’s findings while noting that the NLRC clearly erred in its discretion. dismissal, and (4) the power to control the employee's conduct, with the control test generally assuming primacy
Ratio Decidendi: in the overall consideration. The power of control refers to the existence of the power and not necessarily to the
1. The following elements are considered in determining the existence of an employer-employee relationship: actual exercise thereof. It is not essential, in other words, for the employer to actually supervise the performance
(1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by of duties of the employee; it is enough that the former has the right to wield the power.
whatever means; and (4) the power to control the worker's conduct, with the latter assuming primacy in the The NLRC, in the instant case, based its finding that there existed an employer-employee relationship
overall consideration. between petitioner bank and private respondent on these factual settings:
The petitioners undoubtedly employed private respondent as caretaker-barber. First, private respondent He was not hired as lawyer on a retainership basis but as an officer of the bank.
was paid wages by petitioners. Secondly, petitioners have primacy over final decisions as private In addition to his duties as Vice President of the bank, the complainant's duties and responsibilities
respondent can only recommend in hiring of barbers. Finally, the petitioners have clear control over the were so defined as to prove that he was a bank officer working under the supervision of the President and
private respondent’s work performance as the latter’s duties are complied accordingly upon the instructions the Board of Directors of the respondent bank.
of herein petitioners. The complainant was given the usual payslips to evidence his monthly gross compensation. The respondent
2. To constitute abandonment, there must be deliberate and unjustified refusal to resume employment and a bank, as employer, withheld taxes due to the Bureau of Internal Revenue from the complainant's salary as
clear intention to sever the employer-employee relationship on the part of the employee. The Court finds employee.
that private respondent clearly intended to sever ties with the petitioners for the following circumstances: In sum, the treatment with Atty. Sadac is not different from the bank’s employees and officers.
(1) his former co-workers’ affidavits show that private respondent bragged about his plan on quitting his As held in Hydro Resources case:
job; (2) he surrendered the shop’s keys and took away all his things from the shop; (3) he did not report A lawyer, like any other professional, may very well be an employee of a private corporation or even
anymore to the shop without giving any valid and justifiable reason for his absence; (4) he immediately of the government. It is not unusual for a big corporation to hire a staff of lawyers as its in-house counsel, pay
sought a regular employment in another barbershop, despite previous assurance that he could remain in them regular salaries, rank them in its table of organization, and otherwise treat them like its other officers and
petitioners' employ; and, (5) he filed a complaint for illegal dismissal without praying for reinstatement. employees.
The Court notes that the prayer for separation pay as alternative remedy to reinstatement contradicts As NLRC ruled, private respondent was denied the right to due process with the bank's failure to
private respondent’s stance that he was illegally dismissed. The rule that abandonment of work is observe the twin requirements of notice and hearing. The memorandum could not have been a substitute for
inconsistent with the filing of a complainant for illegal dismissal is not applicable in this case. Such has no notice because it did not manifest petitioners' intention to dismiss him from employment, and neither the meeting
corollary application where the complainant does not pray for reinstatement and just asks for separation between private respondent nor the complaining lawyers nor those held between private respondent and
pay instead as in the present case. petitioner Banico could be considered the "investigations" which private respondent had consistently sought.
Decision of NLRC is AFFIRMED with the following MODIFICATIONS: That private respondent shall
be entitled to backwages from termination of employment until turning sixty (60) years of age.
121. G.R. No. 176484 November 25, 2008 which was from February 23, 2003 to June 2003. It was only during the second conference when he was
CALAMBA MEDICAL CENTER, INC. vs. NATIONAL LABOR RELATIONS COMMISSION, RONALDO made to sign a one and a half month contract for the period July 1 to August 5, 2003.
LANZANAS AND MERCEDITHA LANZANAS Bernarte received a letter from the Office of the Commissioner advising him that his contract would
SYCIP, GORRES, VELAYO & COMPANY, petitioner, vs. CAROL DE RAEDT not be renewed citing his unsatisfactory performance on and off the court. It was a total shock for Bernarte
FACTS: who was awarded Referee of the year in 2003. He felt that the dismissal was caused by his refusal to fix a
In 1989, the Central Cordillera Agricultural Programme (CECAP) project was launched to be implemented by game upon order of Ernie De Leon.
the Department of Agriculture (DA). The DA contracted Travers Morgan International Ltd. (TMI) to provide the PBA contends that he not illegally dismissed because they was not an employees. His contract of
required technical assistance services for CECAP. retainer were simply not renewed. PBA had the prerogative of not renewing the contract.
On 1 July 1989, TMI and SGV entered into a Sub-Consultancy Agreement for the latter to undertake part of the LA and NLRC ruled that Bernarte is an employee which was illegally dismissed by the PBA. CA
technical assistance services requirements of the CECAP. SGV would provide for the Technical Assistance reversed the decision holding Bernarte is an independent contractor since respondents did not exercise any
Services. Hence, SGV proposed qualified consultants as defined by the Terms of Reference. form of control over the means and methods by which petitioner performed his work as a basketball referee.
The acceptance and appointment of the proposed consultants to the project were subject to the unanimous Issue:
approval of the TMI, the DA and the Commission. WON is an employee of the PBA.
DA advised SGV that De Raedt’s nomination, among others, had been approved by the Commission. In Ruling:
addition, Martin Tull (Tull) of TMI replied to Gimenez that TMI would consider De Raedt for the sociologist No. To determine the existence of an employer-employee relationship, case law has consistently
position. applied the four-fold test, to wit:
De Raedt signed the consultancy contract on 14 July 1989 but her start-up date with the CECAP was moved (a) the selection and engagement of the employee;
to 15 August 1989 with the approval of the DA because she was in Thailand to finish an assignment. While the (b) the payment of wages;
CECAP was in progress, TMI confirmed that De Raedt’s retention would be counter-productive to the progress (c) the power of dismissal; and
of the project because a number of project staff found it difficult to work with her. Thus, the TMI directed SGV (d) the employer’s power to control the employee on the means and methods by which the work is
to withdraw De Raedt from the CECAP. accomplished (control test).
De Raedt filed a case against SGV for illegal dismissal and damages before the Arbitration Branch of the NLRC. The so-called "control test" is lacking in this case. The Court agrees with respondents that once in
The Labor Arbiter rendered a decision in favor of De Raedt. NLRC ruled in favor of SGV. But CA subsequently the playing court, the referees exercise their own independent judgment, based on the rules of the game, as
reversed NLRC’s decision. The CA found that De Raedt was removed from the project because of personality to when and how a call or decision is to be made. The referees decide whether an infraction was committed,
differences, which is not one of the grounds for a valid dismissal of an employee and the PBA cannot overrule them once the decision is made on the playing court. The referees are the only,
ISSUE: absolute, and final authority on the playing court. Respondents or any of the PBA officers cannot and do not
WON EE-ER relationship exist in this case? determine which calls to make or not to make and cannot control the referee when he blows the whistle
HELD: because such authority exclusively belongs to the referees. The very nature of petitioner’s job of officiating a
No. De Readt is not an employee of SGV. professional basketball game undoubtedly calls for freedom of control by respondents.
To determine the existence of an employer-employee relationship, case law has consistently applied the four- Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the
fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of referees are required to report for work only when PBA games are scheduled, which is three times a week
dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work spread over an average of only 105 playing days a year, and they officiate games at an average of two hours
is accomplished. The so-called “control test” is the most important indicator of the presence or absence of an per game; and (2) the only deductions from the fees received by the referees are withholding taxes. Unlike
employer-employee relationship. regular employees who ordinarily report for work eight hours per day for five days a week, petitioner is
De Raedt is an independent contractor, who was engaged by SGV to render services to SGV’s client TMI, and required to report for work only when PBA games are scheduled or three times a week at two hours per
ultimately to DA on the CECAP project, regarding matters in the field of her special knowledge and training for game. In addition, there are no deductions for contributions to the Social Security System, Philhealth or Pag-
a specific period of time. Unlike an ordinary employee, De Raedt received retainer fees and benefits such as Ibig, which are the usual deductions from employees’ salaries. These undisputed circumstances buttress the
housing and subsistence allowances and medical insurance. De Raedt’s services could be terminated on the fact that petitioner is an independent contractor, and not an employee of respondents.
ground of end of contract between the DA and TMI, and not on grounds under labor laws. Though the end of Furthermore, the applicable foreign case law declares that a referee is an independent contractor: In,
the contract between the DA and TMI was not the ground for the withdrawal of De Raedt from the CECAP, De Yonan v. United States Soccer Federation, Inc., a soccer referee is an independent contractor; In McInturff v.
Raedt was disengaged from the project upon the instruction of SGV’s client, TMI. Most important of all, SGV Battle Ground Academy of Franklin, baseball umpires are independent contractors.
did not exercise control over the means and methods by which De Raedt performed her duties as Sociologist.
SGV did impose rules on De Raedt, but these were necessary to ensure SGV’s faithful compliance with the 123. South East International Rattan Inc vs Coming
terms and conditions of the Sub-Consultancy Agreement it entered into with TMI. Facts
Petitioner South East International Rattan, Inc. (SEIRI) is a domestic corporation engaged in the
122. G.R. No. 192084 September 14, 2011 business of manufacturing and exporting furniture to various countries, while petitioner Estanislao Agbay, as
JOSE MEL BERNARTE vs. PHILIPPINE BASKETBALL ASSOCIATION (PBA), JOSE EMMANUEL M. per records, is the President and General Manager of SEIRI.
EALA, and PERRY MARTINEZ Respondent Jesus J. Coming alleged that he was hired by petitioner as Sizing Machine operator. His
Facts: work schedule is from 8:am to 5:00, which is initially on a pakiao basis. Later on, it was fixed at P150 per day.
Bernarte avers that they were invited to join the PBA as referee and made to sign contract on a year- In 1990, without any apparent reason, his employment was interrupted as he was told to resume work in two
to-year basis. However, was not made to sign a contract during the first conference of the All-Filipino Cup months.
Despite being an employee, with his work performance never questioned, he was dismissed on leave. David claims that Macasio was not his emplyoyee because hired Macasio as butcher on pakyaw or task
January 1, 2002 without lawful cause. He was told that the company was not doing well financially, that they basis who is therefore, not entitled to overtime pay, holiday pay and 13 month pay, pursuant to the implementing
will just call him when the company needs him. Coming waited for almost a year but petitioner did not call him. rules and regulations of the Labor code. LA and NLRC ruled that Macasio is not entitled to his monetary claims.
Hence, Coming filed a complaint for illegal dismissal, underpayment of wages, nonpayment of holiday pay, 13th CA however partly granted Macasio’s certiorari petition. It explains that although Macasio was a task basis
month pay and service incentive leave pay, with prayer for reinstatement, back wages, damages and attorney’s employee, he is still entitled to his monetary claims. He is only excluded if he is a likewise a “field personnel”
fees. who performs the work away from the office or place of work and whose regular work cannot be determined
On their part, petitioner denied having hired respondent. with reasonable certainty.
LA ruled that respondent is a regular employee of SEIRI and that the termination was illegal. Issue:
NLRC reversed the decision of the LA. Whether or not Macasio is an employee of David, thus entitled to his monetary claims.
On appeal, CA reversed the decision of the NLRC, finding that there is employer-employee Held:
relationship between respondent and petitioner and that the dismissal was without just and valid cause. David;s claim that no employer-employee relationship exists is baseless. The Court employed the
ISSUE control test or the so-called “four-fold” test of employment relationship and held that Macasio’s relationship with
WON there is employer-employee relationship David satisfies the test. Moreover, the Court said that payment of an employee on task or pakyaw basis alone
Held is insufficient to exclude on from the coverage of SIL and holiday pay.
Yes. To ascertain the existence of an employer-employee relationship jurisprudence has invariably In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and SIL pay,
adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of the presence (or absence) of employer supervision as regards the worker’s time and performance is the key; if
wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control the worker is simply engaged on pakyaw or task basis, then the general rule is that he is entitled to a holiday
test.” In resolving the issue of whether such relationship exists in a given case, substantial evidence — that pay and SIL pay unless exempted or if the worker is a field personnel.
amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion — is
sufficient. Although no particular form of evidence is required to prove the existence of the relationship, and any 125. LOCSIN vs. PLDT {G.R. No. 185251} (October 02, 2009)
competent and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists FACTS:
must nonetheless rest on substantial evidence. Respondent PLDT and Security and Safety Corporation of the Philippines (SSCP) entered into an Security
To support their claim petitioner averred that: a)Complainant’s name does not appear in the list of Services Agreement, whereby SSCP would provide armed security guards to PLDT to be assigned to its various
employees reported to the SSS; b) His name does not also appear in the sample payrolls of respondents’ offices. Pursuant to such agreement, Raul Locsin and other petitioner were posted at a PLDT office.
employees; c) The certification of Allan Mayol and Faustino Apondar[,] supplier of finished rattan products[,] Respondent issued a letter terminating the agreement effective October 01, 2001. Despite the termination of
that complainant had at one time or another worked with them; and d) The Affidavit of Vicente Coming, the agreement, petitioners continued to secure the premises of their assigned office. They were allegedly
complainant’s full brother[,] attesting that complainant had never been an employee of respondent. The only directed by the representative of the respondent to remain in their post. Petitioners’ services were terminated
connection was that their employer Faustino Apondar supplies finished rattan products to respondents. on September 30, 2002. Thus, petitioners filed a complaint for illegal dismissal and unpaid backwages. LA
The Court held in Tan v. Lagrama, 387 SCRA 393 (2002), that the fact that a worker was not reported rendered a decision finding PLDT liable for illegal dismissal. LA found that the petitioners were employees of
as an employee to the SSS is not conclusive proof of the absence of employer-employee relationship. PLDT and not SSCP. NLRC affirmed the decision of LA. CA assailed the decision of LA and NLRC. It
Otherwise, an employer would be rewarded for his failure or even neglect to perform his obligation. Nor does determined that SSCP was not a labor-only contractor and not was an independent contractor having
the fact that respondent’s name does not appear in the payrolls and pay envelope records submitted by substantial capital to operate and conduct of its own business. Hence,this petition.
petitioners negate the existence of employer-employee relationship. For a payroll to be utilized to disprove the ISSUE:
employment of a person, it must contain a true and complete list of the employee. In this case, the exhibits WON petitioners are employee of PLDT.
offered by petitioners before the NLRC consisting of copies of payrolls and pay earnings records are only for RULING:
the years 1999 and 2000; they do not cover the entire 18-year period during which respondent supposedly YES. In the ordinary course of things, responsible business owners or managers would not allow security
worked for SEIRI. guards of an agency with whom the owners or managers would not allow security guards of an agency with
In any controversy between a laborer and his master, doubts reasonably arising from the evidence are whom the owners or managers have severed ties with to continue to stay within the business’ premises. This
resolved in favor of the laborer. As a regular employee, respondent enjoys the right to security of tenure under is because upon the termination of the owners’ or managers’ agreement with the security agency, the agency’s
Article 279 of the Labor Code and may only be dismissed for a just or authorized cause, otherwise the dismissal undertaking of liablity for any damage that the security guard would cause has already been terminated. Thus,
becomes illegal. in the event of an accident or otherwise damage caused by such security guards, it would be the business
owners or managers who will be liable and not the agency.
124. G.R. No. 195466 July 4, 2014 It can be concluded that respondent dictated upon petitioners that the latter perform their regular duties to
DAVID v. MACASIO secure the premises during the operating hours. This is sufficient to establish the existence of an employer-
Facts: employee relationship.
Macasio had been working as a butcher for David. He claims that David exercised effective control In Tongko vs. The Manufacturerer, SC reiterated the oft repeated rule that control is the most important element
and supervision over his work, pointing out that David: (1) set the work day, reporting time and hogs to be in the determination of the existence of an employer-employee relationship. To determine the four-fold test, the
chopped as well at the manner by which he was to perform his work; (2) daily paid his salary; and (3) approved existence of the following elements must be established. (a) selection and engagement of the employee, (b)
and disapproved his leaves. Macasio added that David owned the hogs delivered for chopping as well as the payment of wages, (c) power of dismissal, (d) employer’s power to control the employee’s conduct. Stated
work tools and implements. David also rented the workplace. Macasio filed a complaint against petitioner for otherwise, an employer-employee relationship exists where the persom for whom the services are performed
non-payment of overtime pay, holiday pay and 13, month pay. He also claims payment for service incentive reserves the right to control not only the end to be achieved but also the means to be used in reaching such
end. Evidently, respondent having the power of control over the petitioners established the employer-employee brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he has
relationship. authored considering that it should take much weightier proof to invalidate a written instrument.
Petition is granted. Here, Francisco simply relied on his allegation that he was an employee of the company without any
other evidence supporting his claim. Unfortunately for him, a mere allegation in the position paper is not
126. G.R. No. 192998 April 2, 2014 tantamount to evidence. Bereft of any evidence, the CA correctly ruled that Francisco could not be considered
BERNARD A. TENAZAS, et. Al. vs. R. VILLEGAS TAXI TRANSPORT, et. Al. an employee of the respondents.
Facts:
These are consolidated cases filed by the petitioners Tenazas, Francisco and Endraca against the 127. G.R. NO. 148508 MAY 20, 2004
respondent R. Villegas Taxi Transport and/or Romualdo Villegas for the alleged illegal dismissal. Tenazas PETITIONER R TRANSPORT CORPORATION
alleged that he was fired by the respondents Romualdo and Andy because the taxi unit assigned to him was RESPONDENT ROGELIO EJANDRA
sideswiped by another vehicle which caused dent. Francisco alleged that he was terminated without due Facts:
process due to unfounded belief by respondents that he was organizing a union. Endraca was also Private respondent Rogelio Ejandra (“Ejandra”) worked as a bus driver earning in commissions for petitioner
terminated by the respondent allegedly on the ground that he fell short of his required boundary because the until his license was confiscated on January 31, 1996 by an officer of the Land Transportation Office (LTO),
taxi unit assigned to him needed and urgent repair, thus, using some of the earnings he made for that day. Guadalupe Branch. Ejandra’s manager gave him P500.00 to redeem his license upon his immediate report of
Respondents contended that was a former regular driver and Endraca as spare driver, but Francisco the incident only to retrieve his license after a week because the officer who apprehended him had not yet
was never an employee or a driver of the company. Respondents alleged that Tenazas and Endraca were not turned over it to LTO, Guadaluper Branch. However, upon his return to report at work on February 8, 1996, he
terminated, but instead he did not report for work. was told by the company to rest with no definitive time while also accusing him of causing damage to the bus
The labor arbiter dismissed the complaint and affirmed the defense raised by the respondents. The he used to drive. Ejandra filed a complaint for illegal dismissal against petitioner. The petitioner denied and
alleged termination was not supported by any formal investigations, show cause memos, suspension memos claimed that Ejandra abandoned his job and was not an employee because their contract was of lease and not
or termination memos. Moreover, the respondents expressed intention to employ Tenazas and Endraca, but of employment, with petitioner being paid on commission basis. Unanimously, the labor arbiter, the NLRC, and
the two denied the offer. The NLRC, upon appeal, also reversed the decision of Labor Arbiter based on the the CA ruled in favor of private respondent. The case was then brought by herein petitioner before the Supreme
newly presented evidence that was unable to reach the arbiter before the decision was promulgated such as Court but to no avail.
(1) joint affidavit of the three (3) complainants; (2) affidavit of Aloney Rivera y Aldo; and (3) 3 pictures referred Issue/s:
to by the complainant in their joint affidavit showing them wearing t-shirts bearing the name and logo of the 1. Whether or not the relationship in law occurring between the petitioner and the private respondent was in
respondent’s company; and (4) Tenazas’ Certification/Record of Social Security System (SSS) contributions. a nature of “lessor and lessee” and thus, negates the existence of employer-employee relationship
It ruled that Tenazas and Endraca were illegally dismissed but Francisco was held to be not an employee for between the two; and
lack of evidence presented. Said decision was affirmed by CA but with modification, deleting the award of 2. Whether or not the private respondent’s dismissal for reason of abandonment was valid.
separation pay and instead ordered for reinstatement. Ruling:
Issue: No, the Court sustained the unanimous findings of the labor arbiter, the NLRC, and the CA that private
Whether or not there exist employer-employee relationship between Francisco and respondents. respondent worked as a bus driver employee for the petitioner. The Court found that petitioner had no valid
Held: cause to terminate private respondent from work and, in addition, violated the latter’s right to procedural due
No. There is an employer-employee relationship between Francisco and the respondents. process in termination.
Pivotal to the resolution of the instant case is the determination of the existence of employer- Ratio Decidendi:
employee relationship and whether there was an illegal dismissal. With the admission of the respondents, 1. In its petition, the petitioner’s invocation of its right to dismiss an employee for just cause, that being
there is no longer any question regarding the status of both Tenazas and Endraca being employees of the abandonment of work on the part of private respondent, is a clear admittance that it was in fact the latter’s
company. employer. In the same vein it acknowledges that there was no mutual termination of the alleged contract
But, such is not the case for Francisco. Francisco failed to present any proof substantial enough to of lease and that private respondent was indeed its employee. Article 97 (f) of the Labor Code provides
establish his relationship with the respondents. He failed to present documentary evidence like attendance that an employee’s wages can be in the form of commissions which means that petitioner cannot argue
logbook, payroll, SSS record or any personnel file that could somehow depict his status as an employee. that the fact of doing so rules out the presence of an employer-employee relationship between them.
Anent his claim that he was not issued with employment records, he could have, at least, produced his social
security records which state his contributions, name and address of his employer, as his co-petitioner
2. The Court notes that abandonment is constituted of two elements concurring: (1) the failure to report for
work or absence without valid or justifiable reason; and, (2) a clear intention to sever the employer-
Tenazas did. He could have also presented testimonial evidence showing the respondents’ exercise of control
employee relationship. The Court rules that petitioner fell short of proving the requisites. First, private
over the means and methods by which he undertakes his work. This is imperative in light of the respondents’
respondent’s absence was justified because the LTO, Guadalupe Branch, did not release his license until
denial of his employment and the claim of another taxi operator, Emmanuel Villegas (Emmanuel), that he was
after a week. Second, private respondent had no intent to sever his employment as he reported for work
his employer. Specifically, in his Affidavit,36 Emmanuel alleged that Francisco was employed as a spare driver
as soon as he got his license back. Third, as correctly observed by the labor arbiter which is in accordance
in his taxi garage from January 2006 to December 2006, a fact that the latter failed to deny or question in any
with Section 7, Rule XXIII, Book V of Department Order No. 9, series of 199716 (Rules Implementing Book
of the pleadings attached to the records of this case.
V of the Labor Code), the alleged abandonment of work committed by the private respondent, if true, was
In Opulencia Ice Plant and Storage v. NLRC, this Court emphasized, thus:
not reported by the petitioner to the nearest Regional Office of the Department of Labor and Employment.
No particular form of evidence is required to prove the existence of an employer-employee
The Court adds that the petitioner also violated the latter’s right to procedural due process by not giving
relationship. Any competent and relevant evidence to prove the relationship may be admitted. For, if only
him the required notice and hearing as provided for in Section 2, Rule XXIII, Book V of Department Order
documentary evidence would be required to show that relationship, no scheming employer would ever be
No. 9.
128. G.R. No. 119500. August 28, 1998 The work schedules of the members of the team of resident physicians were fixed by petitioner’s medical
PAGUIO TRANSPORT CORPORATION vs. NLRC and WILFREDO MELCHOR director Dr. Raul Desipeda. They were issued identification cards by petitioner and were enrolled in the Social
FACTS: Security System (SSS); and income taxes were withheld from them.
Private Respondent Wilfredo Melchor was hired by respondent company as a taxi driver under the boundary The rank-and-file employees of herein petitioner held a strike due to unresolved grievances over terms and
system on a 24-hour schedule per trip every two (2) days. conditions of employment. It was alleged that Lanzanas was involved in that strike. The Department of Labor
After Melchor allegedly met a vehicular accident along Quirino Avenue, he was advised to stop working and and Employment (DOLE) issued a return-to-work order for the union officers and members. Desipeda
have a rest. terminated Lanzanas for the ground of failure to report back to the hospital despite the order by DOLE. The
After several days, he allegedly reported for work only to be told that his service was no longer needed. National Labor Relations Commission (NLRC) and the Court of Appeals ruled that the Spouses Lanzanas were
Hence, the complaint for illegal dismissal, among others. illegally dismissed, and employer-employee relationship existed between the petitioner-hospital and private
Paguio for their part maintained that complainant was not illegally dismissed, there being in the first place no respondents.
employer-employee relationship between them on the ground that the element of control lacking and the ISSUE:
element of the payment of compensation. Respondents then argued that even if an employer-employee WON EE-ER relationship exist in this case?
relationship were to be presumed as present, still complainants termination arose out of a valid cause and after HELD:
he refused to articulate his stand on the investigation being conducted on him and being involved in Yes. The SC ruled that Spouses Lanzanas were employees of Calamba Health Center, Inc.
compounded accidents which the respondents had to shoulder on account of the supposed reckless driving of Applying the “control test”, an employment relationship exists between a physician and a hospital if the hospital
the complainant. controls both the means and the details of the process by which the physician is to accomplish his task. Where
NLRC ruled in favor of private respondent Melchor. Hence this petition. a person who works for another does so more or less at his own pleasure and is not subject to definite hours
ISSUE: W/N there is an ER-EE relationship between a taxi operator and the taxi driver. or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, the
HELD: YES. element of control is absent. As previously stated, private respondents maintained specific work-schedules, as
Under the boundary system, private respondent was engaged to drive petitioner’s taxi unit on a 24-hour determined by petitioner’s medical director, which consisted of 24-hour shifts totaling forty-eight hours each
schedule every two days. On each such trip, private respondent remitted to petitioner a boundary of week and which were strictly to be observed under pain of administrative sanctions.
P650. Whatever he earned in excess of that amount was considered his income. Also, petitioner exercised control over respondents when respondents’ work was monitored through its nursing
Petitioner argues that under said arrangement, he had no control over the number of hour’s private supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director,
respondent had to work and the routes he had to take. Therefore, he concludes that the employer-employee no operations can be undertaken in those areas. For control test to apply, it is not essential for the employer to
relationship cannot be deemed to exist. actually supervise the performance of duties of the employee, it being enough that it has the right to wield the
Petitioner’s contention is not novel. In Martinez v. National Labor Relations Commission, this Court power. Petitioner, itself, provided proof of the employment status of respondents such as the identification cards
already ruled that the relationship of taxi owners and taxi drivers is the same as that between jeepney owners it issued them, the payslips and income tax withheld, and the classification as “salary” of their remuneration.
and jeepney drivers under the boundary system. In both cases, the employer-employee relationship was Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. It would be preposterous for
deemed to exist, viz.: an employer to report certain persons as employees and pay their SSS premiums as well as their wages if they
The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the are not its employees.
boundary system is that of employer-employee and not of lessor-lessee. x x x In the lease of chattels[,] the Under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee
lessor loses complete control over the chattel leased x x x. In the case of jeepney owners/operators and jeepney relationship exists between the resident physicians and the training hospitals, unless there is a training
drivers, the former exercise supervision and control over the latter. The fact that the drivers do not receive fixed agreement between them, and the training program is duly accredited or approved by the appropriate
wages but get only the excess of that so-called boundary they pay to the owner/operator is not sufficient to government agency. In respondents’ case, they were not undergoing any specialization training. They were
withdraw the relationship between them from that of employer and employee. The doctrine is applicable in the considered non-training general practitioners, assigned at the emergency rooms and ward sections.
present case. Thus, private respondents were employees x x x because they had been engaged to perform
activities which were usually necessary or desirable in the usual trade or business of the employer. 130. G.R. No. 192558 February 15, 2012
Having failed to observe the twin requirements of notice and hearing as essential elements of due BITOY JAVIER (DANILO P. JAVIER) vs. FLY ACE CORPORATION/FLORDELYN CASTILLO
process, private respondent was illegally dismissed. Paguio Transport Corp is ordered to reinstate the Facts:
complainant with full backwages from the time his salaries were withheld from him until his actual reinstatement. Javier filed a complaint before the NLRC for underpayment of salaries and other labor standard
benefits by his supposed employer, the respondent. He alleged that he was performing various tasks at the
129. G.R. No. 176484 November 25, 2008 respondent’s warehouse such as cleaning and arranging the canned items before their delivery to certain
CALAMBA MEDICAL CENTER, INC. vs. NLRC, RONALDO LANZANAS AND MERCEDITHA LANZANAS locations, except in instances when he would be ordered to accompany the company’s delivery vehicles,
FACTS: as pahinante; that he reported for work from Monday to Saturday from 7:00 o’clock in the morning to 5:00
The Calamba Medical Center, Inc. engaged the services of medical doctors-spouses Ronaldo Lanzanas and o’clock in the afternoon; that during his employment, he was not issued an identification card and payslips by
Merceditha Lanzanas in March 1992 and August 1995, respectively, as part of its team of resident physicians. the company; until the day when we was barred to enter the company premises. He surmises that when his
Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were paid a monthly “retainer” daughter rejected respondent Ong’s (Fly Ace President) courtship, the latter, out of vengeful retaliation,
of P4,800.00 each. It appears that resident physicians were also given a percentage share out of fees charged dismissed him from the company.
for out-patient treatments, operating room assistance and discharge billings, in addition to their fixed monthly On the other, hand Fly Ace averred that it was engaged in the business of importation and sales of
retainer. groceries. It contracted the petitioner on “pakyaw basis”. Petitioner was only contacted when the need
arises, more or less, 6 occasions in a month whenever it contracted hauler is not available. He was not Later on, TWS was informed that Sevilla was connected with a rival firm, the Philippines Travel Bureau,
required to observe definite hours of work; he was not required to report daily; and he was free to accept and since the branch office was losing, TWS considered closing its office.
other work elsewhere as there was no exclusivity of his contracted service to the company, the same being On January 3, 1962, the contract with appellee for the use of the branch office premises was
co-terminous with the trip only. terminated and while the effectivity thereof was January 31, 1962, the appellees no longer used it. Because of
NLRC reversed LA’s ruling which held that a pakyaw-basis arrangement did not preclude the this, Canilao, the secretary of TWS, went over to the branch office, and finding the premises locked, he
existence of employer-employee relationship and there is a sufficient substantial evidence basis for judgment padlocked the premises. When neither appellant Sevilla nor any of his employees could enter, a complaint was
on the existence of the employer-employee relationship. Further, Javier was a regular employee because filed by the appellants against the appellees.
there was reasonable connection between the particular activity performed by the employee (as a ISSUE
"pahinante") in relation to the usual business or trade of the employer (importation, sales and delivery of WON employer-employee relationship exists
groceries). He may not be considered as an independent contractor because he could not exercise any HELD
judgment in the delivery of company products. He was only engaged as a "helper. NO. In this jurisdiction, there has been no uniform test to determine the existence of an employer-
CA also annuled NLRC’s decision. It held the for an illegal dismissal case to prosper, there must employee relation. In general, we have relied on the so-called right of control test, “where the person for whom
exist an EER. And the burden ships to the employee to prove that he is an employee, Javier failed this the services are performed reserves a right to control not only the end to be achieved but also the means to be
because he had no company ID nor cannot present any vouchers/paylips. He did not pass the control test used in reaching such end.” Subsequently, however, we have considered, in addition to the standard or right-
based on Fly Ace’s allegations above. of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee
Issue: in the payrolls, in determining the existence of an employer-employee relationship.
WON Javier is a regular employee. The records will show that the petitioner, Lina Sevilla, was not subject to control by the private
Ruling: respondent Tourist World Service, Inc., either as to the result of the enterprise or as to the means used in
No. Javier failed to discharge the burden to pass the well-settled tests to determine the existence of connection therewith.
an employer-employee relationship, In the first place, under the contract of lease covering the Tourist World’s Ermita office, she had bound
(1) the selection and engagement of the employee; herself in solidum as and for rental payments, an arrangement that would belie claims of a master-servant
(2) the payment of wages; relationship. True, the respondent Court would later minimize her participation in the lease as one of mere
(3) the power of dismissal; and guaranty, that does not make her an employee of Toiirist World, since in any case, a true employee cannot be
(4) the power to control the employee’s conduct. Of these elements, the most important criterion is made to part with his own money in pursuance of his employer’s business, or otherwise, assume any liability
whether the employer controls or has reserved the right to control the employee not only as to the result of the thereof. In that event, the parties must be bound by some other relation, but certainly not employment.
work but also as to the means and methods by which the result is to be accomplished. In the second place, and as found by the Appellate Court, "[w]hen the branch office was opened, the
Moreover, he could not submit competent proof that Fly Ace engaged his services as a regular same was run by the herein appellant Lina O. Sevilla payable to Tourist World Service, Inc. by any airline for
employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should any fare brought in on the eSbrt of Mrs. Lina Sevilla." Under these circumstances, it cannot be said that Sevilla
be while at work. In other words, Javier’s allegations did not establish that his relationship with Fly Ace had was under the control of Tourist World Service, Inc. “as to the means used.” Sevilla in pursuing the business,
the attributes of an employer-employee relationship on the basis of the above-mentioned four-fold test. obviously relied on her own gifts and capabilities.
Worse, Javier was not able to refute Fly Ace’s assertion that it had an agreement with a hauling company to It is further admitted that Sevilla was not in the company’s payroll. For her efforts, she retained 4%
undertake the delivery of its goods. It was also baffling to realize that Javier did not dispute Fly Ace’s denial of incommissions from airline bookings, the remaining 3% going to TWS. Unlike an employee, who earns a fixed
his services’ exclusivity to the company. In short, all that Javier laid down were bare allegations without salary,she earned compensation in fluctuating amount depending on her booking successes.
corroborative proof. The fact that Sevilla had been designated “branch manager” does not make her a TWS employee. It
One final note. The Court’s decision does not contradict the settled rule that "payment by the piece is appears that Sevilla is a bona fide travel agent herself, and she acquired an interest in the business entrusted
just a method of compensation and does not define the essence of the relation."37 Payment on a piece-rate to her. She also had assumed personal obligation for the operation thereof, holding herself solidary liable for
basis does not negate regular employment. "The term ‘wage’ is broadly defined in Article 97 of the Labor the payment of rentals.
Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or
ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of 132. G.R. No. 170087 August 21, 2006
compensation and does not define the essence of the relations. Nor does the fact that the petitioner is not FRANCISCO v. NLRC
covered by the SSS affect the employer-employee relationship. However, in determining whether the Facts:
relationship is that of employer and employee or one of an independent contractor, each case must be Petitioner was hired by Kasei Corp. during its incorporation stage. She was designated as accountant
determined on its own facts and all the features of the relationship are to be considered." and corporate secretary. She was also designated as liason officer assigned to secure permits and other
licenses. In 1996, petitioner was designated as Acting Manager. She found out that the corporation hired an
131. Sevilla vs Court of Appeals accountant in lieu of petitioner. She was replaced as a manager. She was however, assured that she would still
Facts be connected with Kasei Corporation. However, Kasei Corp. reduced her salary, she did not pay her of bonus
This case is about a contract between Mrs. Segundina Noguera and Tourist World Service Inc., and eventually did not receive her salary. She filed for constructive dismissal. Private respondent averred that
represented by Mr. Canilao, wherein the TWS leased the premises belonging to Noguera for its branch office. petitioner is not an employee of Kasei Corporation. She was not even included on the reports in BIR and SSS.
When the branch office the same was run by the herein appellant Lina O. Sevilla payable to Tourist World Issue:
Service Inc. by any airline for any fare brought in on the efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla Whether or not petitioner is an employee of the corporation and whether or not she is illegally
and 3% was to be withheld by the Tourist World Service, Inc. dismissed.
Held: hiring party reserves to himself over the conduct of the hired party in relation to the services rendered may be
Yes, petitioner is an employee of the Kasei corporation. accorded the effect of establishing an employer-employee relationship between them in the legal or technical
Court adopted the two-tiered test involving: (1) the putative employer’s power to control the employee sense of the term. A line must be drawn somewhere. The newspaper’s power to approve or reject publication
with respect to the means and methods by which the work is to be accomplished; and (2) the underlying of any specific article she wrote for her column cannot be the control contemplated in the “control test as it is
economic realities of the activity or relationship. but logical that one who commissions another to do a piece of work should have the right to accept or reject
In addition to the standard of right-of-control, the existing economic conditions prevailing between the the product. The important factor to consider in the “control test” is still the element of control over how the work
parties like the inclusion of the employee in the payrolls, can help determine the existence of employer- itself is done, not just the end result thereof. Where a person who works for another performs his job more or
employee relationship. less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is
The determination of the relationship depends upon the circumstances of the whole economic activity compensated according to the result of his efforts and not the amount thereof, no employer-employee
such as: relationship exists.
1. Extent to which services performed are an integral part of the employer’s business; Aside from the control test, this court has also used the ECONOMIC REALITY TEST. The economic realities
2. Extent of the worker’s investment in equipment and facilities; prevailing within the activity or between the parties are examined, taking into consideration the totality of
3. Nature and degree of control exercised by the employer; circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate
4. The workers opportunity for profit and loss; when, as in this case, there is no written agreement of contract on which to base the relationship. In our
5. The amount of initiative, skill, judgment or foresight required for the success; jurisdiction, the benchmark of economic reality in analyzing possible employment relationships for purposes of
6. The permnanency and duration of the relationship between employer and employee; and applying the LC ought to be the economic dependence of the worker on his employer.
7. Degree of dependency of the worker upon the employer for his continued employment in that line Petitioner’s main occupation is not as a columnist for respondent but as a women’s rights advocate working in
of business. various women’s organizations. Likewise she herself admits that she also contributes articles to other
The proper standart of economic dependence is whether the worker is dependent on the alleged publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
employer for his continued employment in that line of business. In short, economic dependence of the worker employment in respondent’s line of business. The conclusion is that petitioner was not employee but an
on his employer. independent contractor, engaged to do independent work. Petition is dismissed.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation
because she was under direct control and supervision of Seiji Kamura. She was selected and engaged by the 134. G.R. No. 170054 January 21, 2013
company and is economically dependent upon respondent for her continued employment. The corporation GOYA, INC. vs. GOYA, INC. EMPLOYEES UNION-FFW
constructively dismissed petitioner when it reduced her salary. This amounts to illegal termination, hence, she Facts:
is entitled with full backwages. Since the posisiton of petitioner is one of trust and confidence, under the principle Petitioner Goya, Inc. (Company) hired contractual employees from PESO Resources Development
of strained relations, petitioner is futher entitled to separation pay, in lieu of reinstatement. Corporation (PESO) to perform temporary and occasional services in its factory in Marikina City. This
prompted respondent Goya, Inc. Employees Union–FFW (Union) to request for a grievance conference on
133. OROZCO vs.CA [G.R. No. 155207] (August 13, 2007) the ground that the contractual workers do not belong to the categories of employees stipulated in the existing
FACTS: Collective Bargaining Agreement (CBA). When the matter remained unresolved, the grievance was referred to
Philippine Daily Inquirer engaged the services of petitioner to write a weekly column for its Lifestyle Section. the National Conciliation and Mediation Board (NCMB) for voluntary arbitration.
She religiously submitted her articles every week. Petitioner’s column appeared in the PDI for the last time. Her The Union asserted that the hiring of contractual employees from PESO is not a management
editor told her that PDI editor-in-chief wanted to stop the publishing her column for no reason at all. She was prerogative and in gross violation of the CBA tantamount to unfair labor practice on the ground that the hiring
informed that the Lifestyle section had many columnists. PDI claims that they decided to cut down the number of contractual employees prejudiced the casual employees in filling up regular vacant positions and Company
of columnists by keeping only those whose columns were well-writtenm with regular feedback. Petitioner filed may merely import employees during strike. The Company, on the other hand, argued that CBA merely
a complaint for illegal dismissal. LA rendered a decision in favor of Petitioner. LA exercised full and complete provides for the definition of the categories of employees and does not put a limitation on the Company’s right
control over the means and method by which complainant’s work had to be accomplished. NLRC affirmed LA’s to engage the services of job contractors or its management prerogative to address temporary/occasional
decision. CA set aside the decision of NLRC and dismissed the petitioner’s complaint. Hence, this petition, needs in its operation.
ISSUE: The Voluntary Arbitrator (VA) dismissed the petition and held that the foregoing agreement between
WON employer-employee relationship exists between Petitioner and Respondent. the parties did not eliminate management’s prerogative of outsourcing parts of its operations, it serves as a
RULING: limitation on such prerogative particularly if it involves functions or duties specified under the agreement. The
NO. CA affirmed the decision. Thus, this petition before the Court.
This court has constantly adhered to the “four-fold test” to determine whether there exists an employer- Issue:
employee relationship between parties The four element of an employment relationship are (a) selection and Whether or not the hiring of contractual employees is a management prerogative.
engagement of the employee, (b) payment of wages, (c) the power of dismissal, (d) employer’s power to control Held:
the employee’s conduct. Of these four element, it is the power of the control is the most crucial and most Yes. The hiring of contractual employees by the petitioner is a management prerogative.
determinative factor, so important, in fact, that the other elements may even be disregarded. The Company kept on harping that both the VA and the CA conceded that its engagement of
Petitioner has misconstrued the “control test”, as did the Labor Arbiter and the NLRC. Not all rules imposed by contractual workers from PESO was a valid exercise of management prerogative. The Court emphasize,
the hiring party on the hired party indicate that the latter is an employee of the former. Rules which serve as a declaring that a particular act falls within the concept of management prerogative is significantly different from
general guidelines toward the achievement of the mutually desired result are not indicative of the power of acknowledging that such act is a valid exercise thereof. What the VA and the CA correctly ruled was that the
control. Thus, this court has explained. It should, however, be obvious that not every form of control that the Company’s act of contracting out/outsourcing is within the purview of management prerogative. Both did not
say, however, that such act is a valid exercise thereof. Obviously, this is due to the recognition that the CBA
provisions agreed upon by the Company and the Union delimit the free exercise of management prerogative ii) The contractor does not exercise the right to control over the performance of the work of the
pertaining to the hiring of contractual employees. Indeed, the VA opined that the right of the management to contractual-employee.”
outsource parts of its operations is not totally eliminated but is merely limited by the CBA, while the CA held The “right to control” refers to the prerogative of a party to determine, not only the end result sought to be
that this management prerogative of contracting out services, however, is not without limitation. These achieved, but also the means and manner to be used to achieve this end.
categories of employees particularly with respect to casual employees serve as limitation to the Company’s The Court held that the contracted personnel were under the Coca-Cola’s supervision and control since sales
prerogative to outsource parts of its operations especially when hiring contractual employees. and distribution were in fact not the Peerless and Excellent independent, discrete and separable activities, but
were component parts of sales and distribution operations that the Coca-Cola controlled in its softdrinks
135. G.R. NO. 184977 December 7, 2009 business.
PETITIONER/S COCA-COLA BOTTLERS PHILIPPINES, INC. Hence, Peerless and Excellent were mere suppliers of labor who had no sufficient capitalization and equipment
RESPONDENT/S RICKY E. DELA CRUZ ET AL to undertake sales and distribution of softdrinks as independent activities separate from the manufacture of
Facts: softdrinks, and who had no control and supervision over the contracted personnel. They are therefore labor-
Respondents route helpers assigned by Peerless and Excellent Partners Cooperative, Inc. to work in Coca- only contractors. Consequently, the contracted personnel, engaged in component functions in the main
Cola Bottlers’ trucks filed complaints for regularization with money claims against the latter. Coca-Cola entered business of the company under the latter’s supervision and control, cannot but be regular company employees.
into contracts of services with Peerless and Excellent for the provision of allied services, as those of going from
the Coca-Cola sales offices or plants to customer outlets such as sari-sari stores, restaurants, groceries, 136. G.R. No. 186965 December 23, 2009
supermarkets and similar establishments for delivery of the Coca-Cola’s products. TEMIC AUTOMOTIVE PHILIPPINES, INC., vs. TEMIC AUTOMOTIVE PHILIPPINES, INC. EMPLOYEES
Labor Arbiter Joel S. Lustria dismissed the complaint for lack of jurisdiction after finding that the respondents UNION-FFW,
were the employees of either Peerless or Excellent and not of Coca-Cola. He brushed aside for lack of evidence FACTS:
the respondents’ claim that Coca-Cola personnel supervised and controlled their work. NLRC affirmed LA. The petitioner is a corporation engaged in the manufacture of electronic brake systems and comfort
On appeal, the CA examined the contractual arrangements between Peerless and Excellent and Coca-Cola, body electronics for automotive vehicles while respondent union is the exclusive bargaining agent of the
and found that Peerless and Excellent were engaged in labor-only contracting, a prohibited undertaking. The petitioner's rank-and-file employees.
CA explained that the contractors simply supplied Coca-Cola with manpower, and that the sale and distribution By practice established since 1998, the petitioner contracts out some of the work in the warehouse
of the Coca-Cola’s products are necessary and desirable functions in the Coca-Cola’s business. Further, the department, specifically those in the receiving and finished goods sections, to three independent service
CA found no proof that Peerless and Excellent has substantial capital investment, and tools to undertake the providers or forwarders (forwarders). These forwarders also have their own employees who hold the positions
contract, arriving at the presumption that Peerless and Excellent were engaged in “labor-only” contracting. of clerk, material handler, system encoder and general clerk.
Hence, the present petition. The regular employees of the petitioner and those of the forwarders share the same work area and use the
Issue/s: same equipment, tools and computers all belonging to the petitioner.
Whether Peerless and Excellent are engaged in labor-only contracting. This outsourcing arrangement gave rise to a union grievance on the issue of the scope and coverage
Ruling: of the collective bargaining unit specifically to the question of whether or not the functions of the forwarders
Yes, Peerless and Excellent are engaged in labor-only contracting. employees are functions being performed by the regular rank-and-file employees covered by the bargaining
Ratio Decidendi: unit. The union thus demanded that the forwarders' employees be absorbed into the petitioner's regular
The directly applicable provision of the Labor Code on contracting and subcontracting is Article 106 which employee force and be given positions within the bargaining unit.
provides: The petitioner, on the other hand, on the premise that the contracting arrangement with the forwarders is a valid
“xxx exercise of its management prerogative, posited that the union's position is a violation of its management
There is “labor-only” contracting where the person supplying workers to an employer does not have substantial prerogative to determine who to hire and what to contract out, and that the regular rank-and-file employees and
capital or investment in the form of tools, equipment, machineries, work premises, among others, and the their forwarders employees serving as its clerks, material handlers, system encoders and general clerks do not
workers recruited and placed by such persons are performing activities which are directly related to the principal have the same functions as regular company employees.
business of such employer. In such cases, the person or intermediary shall be considered merely as an agent The LA found that the outsourcing of forwarding work is expressly allowed by the rules implementing the Labor
of the employer who shall be responsible to the workers in the same manner and extent as if the alter were Code, however, the voluntary arbitrator found that the petitioner went beyond the limits of the legally allowable
directly employed by him.” contracting out because the forwarders' employees encroached upon the functions of the petitioner's regular
The Department of Labor and Employment implements this Labor Code provision through its Department Order rank-and-file workers. He opined that the forwarders' personnel serving as clerks, material handlers, system
No. 18-02 (D.O. 18-02). On the matter of labor-only contracting, Section 5 thereof provides: encoders and general clerks perform "functions that are being performed by regular rank-and-file employees
“Prohibition against labor-only contracting.—Labor-only contracting is hereby declared prohibited x x covered by the bargaining unit.". This was affirmed by the CA. Hence this petition.
x labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely ISSUE: W/N the company can validly contracted out or outsourced the services involving forwarding, packing,
recruits, supplies or places workers to perform a job, work or service for a principal, and any of the loading and clerical activities related thereto.
following elements are present: HELD: YES.
i) The contractor or subcontractor does not have sufficient capital or investment which relates to The forwarding arrangement has been in place since 1998 and no evidence has been presented
the job, work or service to be performed and the employees recruited, supplied or placed by such showing that any regular employee has been dismissed or displaced by the forwarders’ employees since then.
contractor or subcontractor are performing activities which are directly related to the main No evidence likewise stands before us showing that the outsourcing has resulted in a reduction of work hours
business of the principal; or or the splitting of the bargaining unit – effects that under the implementing rules of Article 106 of the Labor Code
can make a contracting arrangement illegal. The other requirements of Article 106, on the other hand, are contractor or subcontractor are performing activities which are directly related to the main business of
simply not material to the present petition. Thus, on the whole, we see no evidence or argument effectively the principal; or
showing that the outsourcing of the forwarding activities violate our labor laws, regulations, and the parties’ b. The contractor does not exercise the right to control over the performance of the work of the contractual
CBA, specifically that it interfered with, restrained or coerced employees in the exercise of their rights to self- employee.
organization as provided in Section 6, par. (f) of the implementing rules. The only exception, of course, is what The Labor Code itself establishes an employer-employee relationship between the employer and the
the union now submits as a voluntary arbitration issue – i.e., the failure to recognize certain forwarder employees of the ‘labor-only” contractor. The contractor is considered merely an agent of the principal employer
employees as regular company employees and the effect of this failure on the CBA’s scope of coverage – which and the latter is responsible to the employees of the labor-only contractor as if such employees had been
issue we fully discuss below. directly employed by the principal employer. The relationship established for a comprehensive purpose – to
However, the Court disagree with CA on ruling that the outsourced forwarders while performing prevent a circumvention of labor laws.
functions that are being performed by regular rank-and-file employees covered by the bargaining unit. It is in Given the foregoing facts, PROMM-GEM exercises control over the petitioners; thus, under the law, they are
the appreciation of these forwarder services as one whole package of inter-related services that we discern a recognized as the employer of petitioners, and in relation to P&G, an independent contractor.
basic misunderstanding that results in the error of equating the functions of the forwarders’ employees with
those of regular rank-and-file employees of the company. A clerical job, for example, may similarly involve 138. G.R. No. 208451
typing and paper pushing activities and may be done on the same company products that the forwarders’ MANILA MEMORIAL PARK CEMETERY, INC. (MMP) vs. EZARD D. LLUZ, Et Al.
employees and company employees may work on, but these similarities do not necessarily mean that all these Facts:
employees work for the company. The regular company employees, to be sure, work for the company under its MMP entered into a Contract of Services with respondent Ward Trading. The Contract of Services
supervision and control, but forwarder employees work for the forwarder in the forwarder’s own operation that provided that Ward Trading, as an independent contractor, will render interment and exhumation services and
is itself a contracted work from the company. The company controls its employees in the means, method and other related work to Manila Memorial in order to supplement operations at Manila Memorial Park, Parañaque
results of their work, in the same manner that the forwarder controls its own employees in the means, manner City. Among those assigned by Ward Trading to perform services at the Manila Memorial Park were the
and results of their work. Complications and confusion result because the company at the same time controls respondents. They worked six days a week for eight hours daily and were paid P250 per day.
the forwarder in the results of the latter’s work, without controlling however the means and manner of the Respondents asked Manila Memorial to consider them as regular workers within the appropriate
forwarder employees’ work. This interaction is best exemplified by the adduced evidence, particularly the bargaining unit established in the collective bargaining agreement by Manila Memorial and its union, the
affidavits of petitioner’s warehouse manager. Petition granted. Decision of CA is nullify and set aside. Manila Memorial Park Free Workers Union (MMP Union). Manila Memorial refused the request since
respondents were employed by Ward Trading, an independent labor contractor. Thereafter, respondents
137. G.R. No. 160506 March 9, 2010 joined the MMP Union. The MMP Union, on behalf of respondents, sought their regularization which Manila
JOEB M. ALIVIADO, et al. vs. PROCTER & GAMBLE PHILS., INC., and PROMM-GEM INC. Memorial again declined. Respondents then filed the complaint. Subsequently, respondents were dismissed
FACTS: by Manila Memorial. Thus, respondents filed a complaint illegal dismissal, underpayment of 13th month pay,
They all individually signed employment contracts with either Promm-Gem or SAPS for periods of more or less and payment of attorney’s fees.
five months at a time. They were assigned at different outlets, supermarkets and stores where they handled all Manila Memorial sought the dismissal of the complaint for lack of jurisdiction since there was no
the products of P&G. They received their wages from Promm-Gem or SAPS. SAPS and Promm-Gem imposed employer-employee relationship. Manila Memorial argued that respondents were the employees of Ward
disciplinary measures on erring merchandisers for reasons such as habitual absenteeism, dishonesty or Trading.
changing day-off without prior notice. LA dismissed the complaint finding no EER exist. NLRC reversed LA’s decision holding that EER
Proctor and Gamble Phils. Inc.(P&G) entered into contracts with Promm-Gem and SAPS for the promotion and exist because Ward Trading was a labor-only contractor and an agent of Manila Memorial.
merchandising of its products. In December 1991, petitioners filed a complaint against P&G for regularization, Issue:
service incentive leave pay and other benefits with damages. The complaint was later amended to include the WON EER exist between MMP and the respondents.
matter of their subsequent dismissal. P&G Ruling:
LA dismissed the case, ruling that no employer-employee relationship existed between the petitioners and P&G, Yes. Article 106 provides the existence of EER relevant to the instant case:
and that PROMM-Gem is an independent contractor. The NLRC and CA affirmed the LA’s decision. Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another
ISSUE: person for the performance of the former’s work, the employees of the contractor and of the latter’s
WON P&G is the employer of herein petitioners? subcontractor, if any, shall be paid in accordance with the provisions of this Code.
HELD: In the event that the contractor or subcontractor fails to pay the wages of his employees in
No. SC ruled P&G is not the employer of the petitioners. PROMM-GEM is not a “labor-only” contractor but an accordance with this Code, the employer shall be jointly and severally liable with his contractor or
independent contractor; thus, the petitioners’ employee. subcontractor to such employees to the extent of the work performed under the contract, in the same manner
The law allows contracting arrangements for the performance of specific jobs, works or services. It is and extent that he is liable to employees directly employed by him.
management prerogative to farm out any of its activities, regardless of whether such activity is peripheral or The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the
core in nature. However, in order for such outsourcing to be valid, it must be made to an independent contractor contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or
because the current labor rules expressly prohibit labor-only contracting. To emphasize, there is labor-only restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well
contracting when the contractor or sub-contractor merely recruits, supplies or places workers to perform a job, as differentiations within these types of contracting and determine who among the parties involved shall be
work or service for a principal and any of the following elements are present: considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision
a. The contractor or subcontractor does not have substantial capital or investment which relates to the of this Code.
job, work or service to be performed and the employees recruited, supplied or placed by such
Labor-only contracting exists when the contractor or subcontractor merely recruits, supplies or When the service contract was terminated, complainants claimed that SMC stopped them from
places workers to perform a job, work or service for a principal and any of the following elements are present: performing their jobs; that this was tantamount to their being illegally dismissed by SMC who was their real
1) The contractor or subcontractor does not have substantial capital or investment which relates to employer as their activities were directly related, necessary and desirable to the main business of SMC; and,
the job, work or service to be performed and the employees recruited, supplied or placed by such that MAERC was merely made a tool or a shield by SMC to avoid its liability under the Labor Code.
contractor or subcontractor are performing activities which are directly related to the main business MAERC admitted that it recruited the complainants and placed them in the bottle segregation project
of the principal; or of SMC but maintained that it was only conveniently used by SMC as an intermediary in operating the project.
2) The contractor does not exercise the right to control the performance of the work of the Labor Arbiter rendered a decision holding that MAERC was an independent contractor. He dismissed
contractual employee. the complaints for illegal dismissal but ordered MAERC to pay complainants’ separation benefits. MAERC and
A closer look at the Contract of Services reveals that Ward Trading does not have substantial capital SMC was also ordered to jointly and severally pay complainants of their wages differential.
or investment in the form of tools, equipment, machinery, work premises and other materials since it is Manila The National Labor Relations Commission (NLRC) ruled in its decision that MAERC was a labor-only
Memorial which owns the equipment used in the performance of work needed for interment and exhumation contractor and that complainants were employees of SMC. The NLRC also held that whether MAERC was a
services. job contractor or a labor-only contractor, SMC was still solidarity liable with MAERC for the latter’s unpaid
A perusal of the Service Contract would reveal that respondent Ward is still subject to petitioner’s obligations, citing Art. 109 of the Labor Code. On appeal, CA affirmed NLRC.
control as it specifically provides that although Ward shall be in charge of the supervision over individual ISSUE
respondents, the exercise of its supervisory function is heavily dependent upon the needs of petitioner 1. WON complainants are employees of petitioner SMC or of respondent MAERC.
Memorial Park, particularly: 2. WON MAERC is a labor-only contractor
a) The CONTRACTOR’s supervisor will conduct a regular inspection of grave sites/areas being dug 3. WON SMC is solidarily liable with MAERC
to ensure compliance with the COMPANY’s interment schedules and other related ceremonies. HELD
b) The CONTRACTOR will provide enough manpower during peak interment days including 1. Employees are those of SMC. In ascertaining an employer-employee relationship, the following
Sundays and Holidays. factors are considered: (a) the selection and engagement of employee; (b) the payment of wages; (c) the power
c) The CONTRACTOR shall schedule off-days for its workers in coordination with the COMPANY’s of dismissal; and, (d) the power to control an employee's conduct.
schedule of interment operation. Evidence discloses that petitioner played a large and indispensable part in the hiring of MAERC's
d) The CONTRACTOR shall be responsible for any damage done to lawn/s and/or structure/s workers. It also appears that majority of the complainants had already been working for SMC long before the
resulting from its operation, which must be restored to its/their original condition without delay and at signing of the service contract between SMC and MAERC in 1988.
the expense of CONTRACTOR." In the case, the incorporators of MAERC admitted having supplied and recruited workers for SMC
It is obvious that the aforementioned provision leaves respondent Ward at the mercy of petitioner even before MAERC was created. The NLRC also found that when MAERC was organized into a corporation
Memorial Park as the contract states that the latter may take over if it finds any part of the services to be in February 1988, the complainants who were then already working for SMC were made to go through the
below its expectations, including the manner of its performance. motion of applying for work with Ms. Olga Ouano, President and General Manager of MAERC.
MMP failed to adduce evidence to prove that Ward Trading had any substantial capital, investment As for the payment of workers' wages, SMC assumed the responsibility of paying for the mandated
or assets to perform the work contracted for. Thus, the presumption that Ward Trading is a labor-only overtime, holiday and rest day pays of the MAERC workers. SMC also paid the employer's share of the SSS
contractor stands. Consequently, Manila Memorial is deemed the employer of respondents. As regular and Medicare contributions, the 13th month pay, incentive leave pay and maternity benefits. These lend
employees of Manila Memorial, respondents are entitled to their claims for wages and other benefits as credence to the complaining workers' assertion that while MAERC paid the wages of the complainants, it merely
awarded by the NLRC and affirmed by the CA. acted as an agent of SMC.
SMC maintained a constant presence in the workplace through its own checkers. The responsibility of
139. San Miguel Corp v. MAERC Integrated Systems watching over the MAERC workers by MAERC personnel became superfluous with the presence of additional
Facts checkers from SMC. Control of the premises in which the contractor's work was performed was also viewed as
291 workers filed their complaint against San Miguel Corporation, petitioner, and MAERC Integrated another phase of control over the work, and this strongly tended to disprove the independence of the contractor.
Services, respondent, for illegal dismissal, underpayment of wages, non-payment of service incentive leave But the most telling evidence is a letter by Mr. Antonio Ouano, Vice-President of MAERC addressed
pays and other labor standards benefits and for separation pay from June 25 to October 24 of the year 1991. to Francisco Eizmendi, SMC President and Chief Executive Officer, asking the latter to reconsider the phasing
The complainants alleged that they were hired by San Miguel Corporation (SMC) through its agent or out of SMC's segregation activities in Mandaue City. The letter attested to an arrangement entered into by the
intermediary Maerc Integrated Services, Inc. (MAERC) to work in 2 designated workplaces in Mandaue City. two (2) parties which was not reflected in the Contract of Services. A peculiar relationship mutually beneficial
They washed and segregated various kinds of empty bottles used by SMC to sell and distribute its beer for a time but nonetheless ended in dispute when SMC decided to prematurely end the contract leaving MAERC
beverages to the consuming public. They were paid on a per piece or pakiao basis except for a few who worked to shoulder all the obligations to the workers.
as checkers and were paid on daily wage basis. 2. YES. Petitioner alleged that the appellate court and the NLRC erred when they declared MAERC a
SMC denied liability for the claims and averred that the complainants were not its employees but of labor-only contractor despite the finding that MAERC had investments amounting to P4,608,080.00 consisting
MAERC, an independent contractor whose primary corporate purpose was to engage in the business of of buildings, machinery and equipment.
cleaning, receiving, sorting, classifying, etc., glass and metal containers. It appears that SMC entered into a However, in Vinoya v. NLRC, the Court clarified that it was not enough to show substantial
Contract of Services with MAERC engaging its services on a non-exclusive basis. capitalization or investment in the form of tools, equipment, machinery and work premises, etc., to be
In a letter dated 15 May 1991, SMC informed MAERC of the termination of their service contract by considered an independent contractor. In fact, jurisprudential holdings were to the effect that in determining the
the end of June 1991. SMC cited its plans to phase out its segregation activities starting 1 June 1991 due to existence of an independent contractor relationship, several factors may be considered, such as, but not
the installation of labor and cost-saving devices. necessarily confined to, whether the contractor was carrying on an independent business; the nature and extent
of the work; the skill required; the term and duration of the relationship; the right to assign the performance of The Court notes that Product Image was issued by the DOLE a certificate of registration. The DOLE
specified pieces of work; the control and supervision of the workers; the power of the employer with respect to certificate having been issued by a public officer, it carries with it the presumption that it was issued in the
the hiring, firing and payment of the workers of the contractor; the control of the premises; the duty to supply regular performance of official duty. Further, the DOLE is the agency primarily responsible for regulating the
premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. business of independent job contractors, the Court can presume, the absence of evidence to the contrary, that
The Court held that MAERC is a labor-only contractor. While MAERC's investments in the form of it had thoroughly evaluated the requirements submitted by Product Image before issuing the Certificate of
buildings, tools and equipment amounted to more than P4 Million, one cannot disregard the fact that it was the Registration.
SMC which required MAERC to undertake such investments under the understanding that the business Therefore, Product Image is the employer of petitioner. Respecting the issue of illegal dismissal, the
relationship between petitioner and MAERC would be on a long term basis. The Court also do not believe Court appreciates that no evidence that petitioner was dismissed. Petitioner was found to unilaterally stopped
MAERC to have an independent business. Lastly, the Court was convinced that MAERC was created solely for reporting for work before filing a complaint for illegal dismissal based on his belief that someone had spread
the needs of SMC. rumors about him.
3. YES. In legitimate job contracting, the law creates an employer-employee relationship for a limited While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is for
purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and a valid or authorized cause, the employee must first establish by substantial evidence the fact of the dismissal.
severally liable with the job contractor only for the payment of the employees’ wages whenever the contractor
fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the 141. GARDEN OF MEMORIES MEMORIAL PARK vs. NLRC [G.R No. 160278] (February 8, 2012)
employees. On the other hand, in labor-only contracting, the statute creates an employer-employee relationship FACTS:
for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an Respondent Cruz worked at the Garden of Memories Memorial Park as a utility worker until her termination.
agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if One time, Cruz had a misunderstanding with a co-worker regarding the use of a garden water hose. When it
such employees had been directly employed by the principal employer. The principal employer therefore came to the knowledge of Requino, the latter instructed them to go home and not to return anymore. After 3
becomes solidarity liable with the labor-only contractor for all the rightful claims of the employees. days, Cruz reported to work but she was told that she had been replaced by another worker. Garden of
This distinction between job contractor and labor-only contractor, however, will not discharge SMC Memories, on the other hand denied liability for the claims of Cruz and asserted that she was not its employee
from paying the separation benefits of the workers, inasmuch as MAERC was shown to be a labor-only but that of Requino, its independent service contractor. It insisted that no employer employee relationship
contractor; in which case, petitioner’s liability is that of a direct employer and thus solidarity liable with MAERC. existed between them because she was employed by its service contractor. Cruz filed a complaint for illegal
dismissal and underpayment of wages. LA ruled that Requino was not an independent contractor but a labor-
140. G.R. No. 179807 July 31, 2009 only contractor. NLRC affirmed the ruling of LA, stating that Requino had no substantial capital or investments
RAMY GALLEGO v. BAYER PHILIPPINES in the form of tools, equipment, machineries, and work premises, for her to qualify as an independent contractor.
Facts: CA affirmed the decision of LA and NLRC. Hence, this petition.
Ramy Gallego was contracted by Bayer Philippines as crop protection technician to promote and ISSUE:
market BAYER products. Petitioner’s employment with BAYER came to a halt, prompting him to seek WON Cruz is an employee of Garden Memories.
employment from another company. BAYER eventually reemployed petitioner through Product Image and RULING:
Marketing Services to promote BAYER products. YES. There is “Labor-only” contracting where the person supplying workers to an employer does not have
Petitioner claimed that he was directed by the newly assigned BAYER sales representative to submit substantial capital or investment in the form of tools, equipment, machineries, work premises, among others,
a resignation letter but he refused. He was summoned by his immediate supervisors and was ordered to quit and the workers recruited and placed by such persons are performing activities which are directly related to the
his employment and was ordered to return all the equipment issued to him. principal of business of such employer. In such cases, the person or intermediary shall be considered merely
Believing that his employment was terminated petitioner lodged a complaint for illegal as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the
dismissal with the NLRC claiming for reinstatement and other monetary claims. Respondent BAYER however latter were directly employed by him. Labor-only contracting is expressly prohibited under Sec. 5 of Rule VIII-A
denied the existence of an employer-employee relationship between BAYER and petitioner, explaining that of the omnibus Rules Implementing the Labor Code.
petitioner’s work at BAYER was simply occasioned by the Contract of Promotional Service that BAYER had Generally, the presumption is that the contractor is a labor-only contracting unless such contractor overcomes
executed with Product Image whereby Product Image would promote and market BAYER products on its own the burden of proving that it has substantial capital, investment, tools and the like, In the present case, though
account and its own manner and method. They added that the independent contractor Product Image retained Garden of Memories is not the contractor, it has the burden of proving that Requino has sufficient capital or
the exclusive power of control over petitioner. investment since it is claiming that supposed status of Requino as independent contractor. However, it failed to
Product Image admitted that it hired petitioner on a contractual basis and that petitioner was a field to adduce evidence purporting to show that Requino had sufficient capitalization. Neither did it show that she
worker who had no fixed hours and worked under minimal supervision. invested in the form of tools, equipment, machineries, work premises and other materials which are necessary
Issue: in the completion of the service contract.
Whether or not Product image is a labor-only contractor and BAYER should be deemed petitioner’s The requirement of the law in determining the existence of independent contractorship is that the contractor
principal employer and whether or not petitioner was illegally dismissed from his employment. should undertake the work on his own account, under his own responsibility, according to his own manner and
Held: method, free from the control and direction of the employer except as to the results thereof. In this case,
Product Image is a legitimate job contractor. The Permissible job contracting of subcontracting refers however, the Service of Contract Agreement clearly indicated that Requino has no discretion to determine the
to an arrangement whereby a principal agrees to farm out with contractor or subcontractor the performance of means and manner by which the work is performed. Rather, the work should be in strict compliance with, and
a specific job, work, or service within a definite or predetermined period regardless of whether such job, work subject to, all requirements and standards of Garden of Memories. Under these, there is no doubt that Requino
or service is to be performed or completed within or outside the premises of the principal. is engaged in labor-only contracting, and is considered merely as an agent of Garden Memories. As such, the
workers she supplies should be considered as employees of Garden Memories. Consequently, the latter, as
prinicpal employer, is responsible to the employees of the labor-only contraxtor as if such employees have been In September 2003, Petitioners filed with the Labor Arbiter (LA) a complaint for regularization against LSC
directly employed by it. Petition is denied. and BMSI. On October 1, 2003, LSC terminated the Agreement. Consequently, Petitioners lost their
employment.
142. G.R. No. 196426 August 15, 2011 After due proceedings, the LA rendered a decision dismissing Petitioners’ complaint. The LA found that
MARTICIO SEMBLANTE and DUBRICK PILAR vs. COURT OF APPEALS, et. Al. Petitioners were employees of BMSI. It was BMSI which hired Petitioners, paid their wages, and exercised
Facts: control over them.
Petitioners Marticio Semblante and Dubrick Pilar asserted that they were hired by respondents- The NLRC reversed LA’s decision contending that BMSI is not engaged in legitimate job contracting since it
spouses Vicente and Maria Luisa Loot, the owners of Gallera de Mandaue (the cockpit), as the official lacked substantial capital and investment to enable it to discharge its obligations under the Agreement. It
masiador and sentenciador, respectively, of the cockpit. They alleged that they were employees with regular ordered for solidary liability among BMSI and LSC for backwages, etc.
working time and day schedule. However, petitioners were denied of entry into the cockpit upon the CA reversed NLRC’s decision holding that BMSI was an independent contractor, the CA relied on the provisions
instructions of respondents, and were informed of the termination of their services effective that day. This of the Agreement, wherein BMSI warranted that it is an independent contractor, with adequate capital, expertise,
prompted petitioners to file a complaint for illegal dismissal against respondents. knowledge, equipment, and personnel necessary for the services rendered to LSC. It also held that BMSI’s
Respondents alleged that petitioners were not their employees, but rather associates of the Certificate of Registration as an independent contractor was sufficient proof that it was an independent
independent contractor Tomas Vega. Petitioners have no regular working time and day and the id was issue contractor. Hence, this petition.
merely to indicate they were free from normal entrance fee. Issue/s:
The Labor Arbiter ruled in favor of the petitioners and held that they were employees of respondents, Whether LSC was engaged in labor-only contracting to defeat Petitioners’ right to security of tenure.
thus, illegally dismissed. Conversely, the NLRC held in its Resolution that there was no employer-employee Ruling:
relationship between petitioners and respondents, respondents having no part in the selection and Yes, LSC was engaged in labor-only contracting to defeat Petitioners’ right to security of tenure.
engagement of petitioners, and that no separate individual contract with respondents was ever executed by Ratio Decidendi:
petitioners. Upon appeal, CA upheld the NLRC’s decision on the ground that petitioners are akin to Jurisprudence provides that the character of the business, i.e., whether as labor-only contractor or as job
independent contractors who possess unique skills, expertise, and talent to distinguish them from ordinary contractor, should be measured in terms of, and determined by, the criteria set by statute. The language of a
employees. Furthermore, CA claimed that private respondents did not supply petitioners with the tools and contract is neither determinative nor conclusive of the relationship between the parties.
instrumentalities they needed to perform their work. Petitioners only needed their talent and skills to be a Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely
"masiador" and "sentenciador". Hence, this petition. recruits, supplies, or places workers to perform a job, work, or service for a principal. In labor-only contracting,
Issue: the following elements are present:
Whether or not the petitioners are employees of the respondents. (a) the contractor or subcontractor does not have substantial capital or investment to actually perform the
Held: job, work, or service under its own account and responsibility; and
No. The petitioners are independent contractors and not employees of the respondents. (b) the employees recruited, supplied, or placed by such contractor or subcontractor perform activities
The Court ruled in favor of the respondents. Petitioners are not employees of respondents, since which are directly related to the main business of the principal.
their relationship fails to pass muster the four-fold test of employment the Court have repeatedly mentioned in On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal
countless decisions: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the agrees to put out or farm out with the contractor or subcontractor the performance or completion of a specific
power of dismissal; and (4) the power to control the employee’s conduct, which is the most important element. job, work, or service within a definite or predetermined period, regardless of whether such job, work, or service
As found by both the NLRC and the CA, respondents had no part in petitioners’ selection and is to be performed or completed within or outside the premises of the principal. A person is considered engaged
management; petitioners’ compensation was paid out of the arriba (which is a percentage deducted from the in legitimate job contracting or subcontracting if the following conditions concur:
total bets), not by petitioners; and petitioners performed their functions as masiador and sentenciador free (a) The contractor carries on a distinct and independent business and undertakes the contract work on
from the direction and control of respondents; petitioners relied mainly on their expertise that is characteristic his account under his own responsibility according to his own manner and method, free from the control
of the cockfight gambling; and were never given by respondents any tool needed for the performance of their and direction of his employer or principal in all matters connected with the performance of his work except
work. Respondents, not being petitioners’ employers, could never have dismissed, legally or illegally, as to the results thereof;
petitioners, since respondents were without power or prerogative to do so in the first place. (b) The contractor has substantial capital or investment; and
(c) The agreement between the principal and the contractor or subcontractor assures the contractual
143. G.R. NO. 186091 December 15, 2010 employees’ entitlement to all labor and occupational safety and health standards, free exercise of the right
PETITIONER EMMANUEL BABAS ET AL to self-organization, security of tenure, and social welfare benefits
RESPONDENT LORENZO SHIPPING CORPORATION Based on the foregoing, BMSI is engaged in labor-only contracting, as evidence by the following:
PONENTE NACHURA First, petitioners worked at LSC’s premises, and nowhere else. There was absolute lack of evidence that BMSI
Facts: exercised control over Petitioners or their work. Second, LSC was unable to present proof that BMSI had
Lorenzo Shipping Corp (LSC) executed a General Equipment Maintenance Repair and Management Services substantial capital. The law casts the burden on the contractor to prove that it has substantial capital,
Agreement (Agreement) with Best Manpower Services, Inc. (BMSI) where BMSI undertook to provide investment, tools, etc. Third, petitioners performed activities which were directly related to the main business of
maintenance and repair services to LSC’s container vans, heavy equipment, trailer chassis, and generator sets. LSC. The work of petitioners as checkers, welders, utility men, drivers, and mechanics could only be
BMSI then hired Petitioners to work at LSC as checkers, welders, utility men, clerks, forklift operators, motor characterized as part of, or at least clearly related to, and in the pursuit of, LSC’s business. Lastly, as found by
pool and machine shop workers, technicians, trailer drivers, and mechanics. the NLRC, BMSI had no other client except for LSC.
Further, the CA erred in taking as sufficient proof of being an independent contractor the Certificate of Judgment of NLRC is reversed and California is ordered to reinstate the petitioners. California and Livi
Registration issued by the Department of Labor and Employment to BMSI. It is not conclusive evidence of such are to pay, jointly and severally, the petitioners of their backwages.
status. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from
arising. 145. No. L-80774 May 31, 1988
Thus, Petitioners became regular employees of LSC and are entitled to security of tenure and could only be SAN MIGUEL CORPORATION vs. NLRC and RUSTICO VEGA
dismissed for just or authorized causes and after they had been accorded due process. FACTS:
San Miguel Corporation’s (SMC) Innovation Program is an employee incentive scheme offered and opened
144. G.R. No. L-80680 January 26, 1989 only to employees of petitioner Corporation, more specifically to employees below the rank of manager. Rustico
DANILO B. TABAS, et. Al vs. CALIFORNIA MANUFACTURING COMPANY, INC et. al. Vega (Vega), an employee of the corporation for 13 years holding the position of mechanic in the Bottling
FACTS: Department of the SMC Plant Brewery, submitted an innovation proposal.
Petitioners were the employees of Livi Manpower Services. They were assigned to the respondent Vega filed a petition for money claims before the Labor Arbiter (LA). Vega invoked that his proposal had been
pursuant to a manpower supply agreement as “promotional merchandisers”. accepted by the methods analyst and implemented by the Corporation; entitled to the cash award under the
It was provided in the agreement that: 1) California would have no control or supervision over the Innovation Program. However, SMC denied to ever having approved or adopted Mr. Vega’s proposal. It was
workers as to how they perform or accomplish their work, 2) Livi is an independent contractor and that it has turned down by the company “for lack of originality” and that the same, “even if implemented [could not] achieve
the sole responsibility of complying with all the existing as well as future laws, rules and regulations pertinent the desired result.” Petitioner further alleged that the LA had no jurisdiction. Mr. Vega having improperly
to employment of labor, 3) the assignment to California was “seasonal and contractual”, and 4) payroll, including bypassed the grievance machinery procedure prescribed under a then existing collective bargaining agreement
COLA and holiday pay shall be delivered Livi at California’s premises. between management and employees, and available administrative remedies provided under the rules of the
Petitioners were made to sign 6-month employment contracts which were renewed for the same Innovation Program.
period. Unlike regular employees of California, they did not receive fringe benefits and bonuses and were paid The LA dismissed the complaint for lack of jurisdiction; however, ordered the corporation to pay Vega the sum
only a daily allowance. of P2,000 as financial assistance, as a gesture of “compassion and to show the government’s concern for the
Petitioners contend that they have become regular employees of California. Subsequent to their claim workingman”. NLRC ruled also in favor of Vega.
for regularization, California no longer re-hired them. Livi, on the other hand, claims the workers as its ISSUE:
employees and that it is an independent contractor. WON LA and NLRC can exercise jurisdiction over the case of money claim of private respondent Vega?
Labor Arbiter found that no employer-employee relationship existed. The NLRC affirmed the ruling. HELD:
ISSUE: W/N the existence of an employer-employee relation cannot be made the subject of an agreement. No. They cannot exercise jurisdiction over the case. The jurisdiction of LA and NLRC is stated in Art. 217 of the
HELD: NO. Labor Code, as follows:
The existence of an employer-employees relation is a question of law and being such, it cannot be “Art. 217. Jurisdiction of Labor Arbiters and the Commission.—(a) The Labor Arbiters shall have
made the subject of agreement. Hence, the fact that the manpower supply agreement between Livi and exclusive jurisdiction to hear and decide the following cases involving all workers, whether
California had specifically designated the former as the petitioners' employer and had absolved the latter from agricultural or non-agricultural:
any liability as an employer, will not erase either party's obligations as an employer, if an employer-employee (1) Unfair labor practice cases;
relation otherwise exists between the workers and either firm. At any rate, since the agreement was between (2) Unresolved issues in collective bargaining including those which involve wages, hours of work,
Livi and California, they alone are bound by it, and the petitioners cannot be made to suffer from its adverse and other terms and conditions of employment duly indorsed by the Bureau in accordance with the
consequences. provisions of this Code;
This Court has consistently ruled that the determination of whether or not there is an employer- (3) All money claims of workers involving non-payment or underpayment of wages, overtime or
employee relation depends upon four standards: (1) the manner of selection and engagement of the putative premium compensation. maternity or service incentive leave, separation pay and other money
employee; (2) the mode of payment of wages; (3) the presence or absence of a power of dismissal; and (4) the claims arising from employer-employee relation, except claims for employee’s compensation, social
presence or absence of a power to control the putative employee's conduct. Of the four, the right-of-control test security and medicare benefits and as otherwise provided in Article 128 of this Code;
has been held to be the decisive factor. (4) Cases involving household services; and
The fact that the petitioners have allegedly admitted being Livi's "direct employees" 26 in their (5)All other cases arising from employer-employee relation unless expressly excluded by this Code.
complaints is nothing conclusive. For one thing, the fact that the petitioners were (are), will not absolve California (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
since liability has been imposed by legal operation. For another, and as we indicated, the relations of parties Arbiters, compulsory arbitrators, and voluntary arbitrators in appropriate cases provided in Article
must be judged from case to case and the decree of law, and not by declarations of parties. 263 of this Code.” (Italics supplied)
The fact that the petitioners have been hired on a "temporary or seasonal" basis merely is no argument Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor
either. As we held in Philippine Bank of Communications v. NLRC, a temporary or casual employee, under relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the
Article 218 of the Labor Code, becomes regular after service of one year, unless he has been contracted for a dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such situations,
specific project. And we cannot say that merchandising is a specific project for the obvious reason that it is an resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other
activity related to the day-to-day operations of California. terms and conditions of employment, but rather in the application of the general civil law. The money claims of
In the case at bar, Livi is admittedly an "independent contractor providing temporary services of workers which now fall within the original and exclusive jurisdiction of Labor Arbiters are those money claims
manpower to its client.” When it thus provided California with manpower, it supplied California with personnel, which have some reasonable causal connection with the employer-employee relationship.
as if such personnel had been directly hired by California. SMC’s Innovation Program, though unilateral in origin, could nonetheless ripen into an enforceable contractual
(facio ut des) obligation on the part of petitioner Corporation under certain circumstances. Thus, WON an
enforceable contract, albeit implied and innominate, had arisen between petitioner Corporation and private slandered the plaintiffs in the presence of their subordinate employees although this could have been done in
respondent Vega in the circumstances of this case, and if so, whether or not it had been breached, are pre- private; that the defendants dismissed the plaintiffs because of an alleged delay in the use of promotional
eminently legal questions, questions not to be resolved by referring to labor legislation and having nothing to crowns when such delay was true with respect to the other Plants, which is therefore demonstrative of the fact
do with wages or other terms and conditions of employment, but rather by having recourse to our law on that Cosme de Aboitiz did not really have a strong reason for publicly humiliating the plaintiffs by dismissing
contracts. them on the spot; That the defendants were moved by evil motives and an anti-social attitude in dismissing the
The case was dismissed for lack of jurisdiction without prejudice to the right of private respondent Vega to file plaintiffs.
a suit before the proper court. Hence, plaintiffs prayed for the following:
1. Unrealized income in such sum as will be established during the trial;
146. G.R. No. 89621 September 24, 1991 2. P300,000.00 as moral damages;
PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, vs. HON. LOLITA O. GAL-LANG 3. P100,000.00 by way of exemplary damages;
Facts: 4. P5,000.00 as litigation expenses;
Pepsi filed a criminal complaint for falsification of private documents against the respondent- 5. P10,000.00 and P200.00 per appearance as and for attorney’s fees; and
employees who were suspected of complicity in the irregular disposition of empty Pepsi Cola bottles but later 6. Costs of this suit
on dismissed by the Provincial Prosecutor after conducting a PI. Meantime, allegedly after an administrative Defendants file a motion to dismiss on the ground of lack of jurisdiction but the trial court dismissed
investigation, the private respondents were dismissed by Pepsi. Respondents lodged a complaint for illegal the same. Trial Court ruled that mere asking for reinstatement does not remove from the CFI jurisdiction over
dismissal and decisions manded reinstatement with damages. In addition, they instituted in the RTC, a the damages. The case must involve unfair labor practices to bring it within the jurisdiction of the CIR (now
separate civil complaint against the petitioners for damages arising from what they claimed to be their NLRC).
malicious prosecution. While the trial was underway, the defendants filed a second motion to dismiss the complaint because
The petitioners moved to dismiss the civil complaint on the ground that the trial court had no of amendments to the Labor Code immediately prior thereto. The trial Court ruled in favor of the defendant. The
jurisdiction over the case because it involved EER that were exclusively cognizable by the labor arbiter. It Court agrees with defendants that the complaint alleges unfair labor practices which under Art. 217 of the Labor
also invoke Article 217 of the Labor Code and a number of decisions of this Court to support their position that Code, as amended by P.D. 1691, has vested original and exclusive jurisdiction to Labor Arbiters, and Art. 248,
the private respondents civil complaint for damages falls under the jurisdiction of the labor arbiter. However, thereof . . . ‘which may include claims for damages and other affirmative reliefs.’ The Court also cited the alleged
the respondent judge counters it was "distinct from the labor case for damages now pending before the labor defamatory remarks made by defendant Cosme de Aboitiz were said to plaintiffs in the course of their
courts" and therefore RTC has jurisdiction. employment, and the latter were dismissed from such employment. Hence, the case arose from such employer-
Issue: employee relationship which under the new Presidential Decree 1691 are under the exclusive, original
WON RTC has jurisdiction over complaints for damages arising out of a separate action for jurisdiction of the labor arbiters.
malicious prosecution between the parties having a EER. ISSUE
Ruling: WON CFI has jurisdiction over the case
Yes. It does not appear that there is a "reasonable causal connection" between the complaint and HELD
the relations of the parties as employer and employees. The complaint did not arise from such relations and in Yes. It is obvious from the complaint that the plaintiffs have not alleged any unfair labor practice. Theirs
fact could have arisen independently of an employment relationship between the parties. No such relationship is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case,
or any unfair labor practice is asserted. What the employees are alleging is that the petitioners acted with bad the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based
faith when they filed the criminal complaint which the Municipal Trial Court said was intended "to harass the on a wrong premise. WHEREFORE, the petition is granted; the respondent judge is hereby ordered to reinstate
poor employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to Civil Case No. 33150 and render a decision on the merits. Costs against the private respondents.
establish even a slightest probability that all the respondents herein have committed the crime imputed
against them." This is a matter which the labor arbiter has no competence to resolve as the applicable law is 148. G.R. No. 121439 January 25, 2000
not the Labor Code but the Revised Penal Code. AKLAN ELECTRIC COOP. INC. (AKELCO) v. NLRC
Facts:
147. Medina vs. Castro Bartolome It was alleged that prior to the temporary transfer of the office of AKELCO from Lezo, Aklan to Kalibo,
Facts Aklan, the employees were continuously performing their task and were duly paid their salaries at the main
This is a civil case filed by by Ernesto Medina and Jose G. Ong before the CFI against Cosme de office at Lezo, Aklan. By way of a Board Resoulution, it allowed temporary transfer of office on the ground that
Aboitiz and Pepsi-Cola Bottling Co. of the Philippines, Inc. On the complaint, the petitioner averred the Lezo was dangerous and unsafe. However, majority of the employees continued to report to Lezo instead.
following: that on or about 1:00 o’clock in the afternoon of December 20, 1977, defendant Cosme de Aboitiz, There were lawful orders and other issuances of the General Manger for the employees to report to their
acting in his capacity as President and Chief Executive Officer of the defendant Pepsi-Cola Bottling Company temporary office, but they defied such orders. Eventually, the company stopped paying salaries to those who
of the Philippines, Inc., went to the Pepsi-Cola Plant in Muntinlupa, Metro Manila, and without any provocation, do not report to the temporary office. Hence this consolidated cases/complaints for non-payment of salaries
shouted and maliciously humiliated the plaintiffs with the use of the following slanderous language and other and other monetary claims.
words of similar import uttered in the presence of the plaintiffs’ subordinate employees, thus— Issue:
‘GOD DAMN IT YOU FUCKED ME UP X X X. YOU SHUT UP! FUCK YOU! YOU ARE BOTH SHIT TO ME! Whether or not the refusal to work under lawful orders of AKELCO management are covered with the
YOU ARE FIRED (referring to Ernesto Medina). YOU TOO ARE FIRED! ’ (referring to Jose Ong); that “no work, no pay” principle.
employment record of the plaintiffs show their track performance and impeccable qualification; that despite this Held: Yes. The age-old rule governing the relation between labor and capital, or management and employee
consideration the defendant corporation, acting through its President, Cosme de Aboitiz, dismissed and of a “fair day’s wage for a fair day’s labor” remains st the basic factor in determining employee’s wages. If there
is no work performed by the employee, there can be no wage or pay unless unless, of course, the laborer was purposes of collective bargaining. It alleged that the mentioned personnel were excluded in the CBA of the
able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally current union of the petitioner, National Mines and Allied Workers Union (NAMAWU-MIF).
prevented from working, a situation which is not found in the present instant case. It would neither be fair not The Labor Arbiter dismissed the petition and ordered that all other personnel eligible to be a member
just to allow private respondents to recover something they have not earned and could not have earned because of the existing union be admitted. KASAMA KO appealed to the Bureau of Labor Relations (BLR) which the
they did not render services at the Kalibo office during the stated period. latter denied. Hence, KASAMO KO prayed before the Court a temporary restraining order retraining the BLR
to execute the said decision.
149. International School of Alliance of Educators (ISAE) vs. Quisumbing {G.R. No. 128845} (June 1, Issue:
2000) Whether or not the petitioner may have more than one union to represent the employees.
FACTS: Held:
International School pursuant to P.D. 732, is a domestic educational institution established primarily for No. Only one union should represent the employees of one company.
dependents of foreign diplomatic personnel and other temporary residents. To enable the School to continue Section 11 of Rule II, Book V of the Omnibus Rules implementing the Labor Code did away with
carrying out its educational program and improve its standard of instruction, Section 2(c) of the same decree existing supervisors' unions classifying the members either as managerial or rank and file employees
authorizes the School to employ its own teaching and management personnel selected by it either locally or depending on the work they perform. If they discharge managerial functions, supervisors are prohibited from
abroad, from Philippine or other nationalities such personnel being exempt from otherwise applicable laws and forming or joining any labor organization. If they do not perform managerial work, they may join the rank and
regulations attending their employment, except laws that have been or will be enacted for the protection of file union and if none exists, they may form one such rank and file organization. It, therefore, follows that the
employees. Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying employees the KASAMA KO claimed to represent, who are professional, technical, administrative and
the same into two: (1) Foreign-hires and (2) Local hires. The School grants foreign hires certain benefits not confidential personnel of petitioner performing managerial functions are not qualified to join, much less form a
accorded local hires. These include housing, transportation, shipping costs, taxes, and home leave travel union. This rationalizes the exclusion of managers and confidential employees exercising managerial
allowance. Foreign hires are also paid a salary rate 25% more than local hires. The School justifies the functions from the ambit of the collective bargaining unit.
difference on two significant economic disadvantages (a) the dislocation factor, (b) limited tenure. ISAE The Court is constrained to disallow a formation of another union to represent employees of the
contested the difference in salary rated between foreign and local hires. Petitioner files a notice of strike. DOLE petitioner. The Department of Labor and Employment enforces a one-union one company policy. In one of its
issued an order in favor of School. Acting Secretary upheld the point-of-hire classification for the classification decisions, the Court ruled that the proliferation of unions in an employer unit is discouraged as a matter of
for the distinction in salary rates and that the principle “equal pay for equal work “does not apply in the present policy unless there are compelling reasons which would deny a certain class of employees the right to self-
case. Hence, this petition. organization for purposes of collective bargaining.
ISSUE:
WON principle of “Equal pay for Equal Work” does apply in the present case. 151. G.R. NOS. 113204–05 September 16,1996
RULING: PETITIONER BARBIZON PHILIPPINES, INC.
YES. RESPONDENT NAGKAKAISANG SUPERVISOR NG BARBIZON PHILIPPINES, INC
The Constitution directs the State to promote “equality of employment opportunites for all”. Similarly, the Labor PONENTE KAPUNAN
Code provides that the State shall ensure “equal work opportunities regardless of sex, race or creed.” Facts:
Discrimination particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, A petition for certification election among its rank-and-file employees was filed by Barbizon Philippines, Inc.
prohibits and penalizes the payment of lesser compensation to a female employees as against a male employee (Barbizon) (formerly Philippine Lingerie Corporation) where between PHILIPPINE LINGERIE WORKERS
for work of equal value. Article 248 declares it an unfair labor practice for an employer ito discriminate in regard UNION-ALAB and BUKLOD NG MANGGAGAWA NG PHILIPPINE LINGERIE CORPORATION, BUKLOD
to wages in order to encourage or discourage membership in any labor organization. emerged as the sole and exclusive bargaining representative.
The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of During the effectivity of the CBA executed between Barbizon and BUKLOD, several employees organized
foreign hires. The court finds this argument a little cavalier. If an employer accords employees the same position themselves into the Nagkakaisang Supervisors Ng Barbizon Philippines, Inc. (NSBPI) and the Nagkakaisang
and rank, the presumption is that these employees perform equal work. This presumption is borne by logic and Excluded Monthly Paid Employees Ng Barbizon, Philippines, Inc. (NEMPEBPI) allegedly because they were
human experience. If the employer pays one employee less than the rest, it is not for that employee to explain excluded from the coverage of the existing CBA between Barbizon and BUKLOD. Both filed separate petitions
why he receives less or why the others receive more, That would be adding insult to injury. The employer has for certification election which was GRANTED by the Office of the Secretary of
discriminated against the employee; it is for the employer to explain why the employee is treated unfairly. Labor, through herein public respondent.
The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires Having denied their Motion for Reconsideration, Barbizon filed this instant petition.
performs 25% more efficiently or effectively than the local-hires. Both groups have similar functions and Issue/s:
responsibilities, which they perform under similar working conditions. Whether the members of the respondent NAGKAKAISANG SUPERVISOR NG BARBIZON PHILIPPINES, INC.
local union belong to the employer-wide unit of rank-and-file employees which already has a certified bargaining
150. G.R. No. 85343 June 28, 1989 agent: BUKLOD and therefore constitutes as a bar to its certification election.
PHILTRANCO SERVICE ENTERPRISES vs. BUREAU OF LABOR RELATIONS et. Al. Ruling:
Facts: No, despite having been considered as rank-and-file employees, members of the NAGKAKAISANG
The Kapisanan ng mgaKawani, Assistant, Manggagawa at Konpidensyal sa Philtranco (KASAMA SUPERVISOR NG BARBIZON PHILIPPINES, INC. cannot be barred from forming their own collective
KO), a registered labor organization filed a petition for certification election with the Department of Labor and bargaining unit.
Employment, on the ground that it desires to represent all professional, technical, administrative, and Ratio Decidendi: Barbizon obstinately believes that NSBPI’s petition for certification election was granted
confidential employees personnel of petitioner at its establishments in Luzon, Visayas and Mindanao for because the employees carrying the appellation “supervisor” were deemed supervisory employees. The status
of the subject employees, however, is not the issue in the case at bar. The decision of the BLR has settled with The all-embracing phrase earnings and other remunerations which are deemed not part of the basic
finality that said employees are merely rank-and-file employees. salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works
NSBPI’s petition for certification election was granted because the subject employees were expressly excluded performed on rest days and special holidays, pay for regular holidays and night differentials. As such they are
from the bargaining unit and from the coverage of the CBA executed between Barbizon and BUKLOD. deemed not part of the basic salary and shall not be considered in the computation of the 13th-month pay.
If they were not so excluded, it is hard to find any earnings and other remunerations expressly excluded
The exclusion of petitioner’s “supervisors” from the bargaining unit of the rank-and-file employees in the computation of the 13th-month pay. Then the exclusionary provision would prove to be idle and with
indiscriminately curtailed the right of these employees to self-organization and representation for purposes of no purpose.
collective bargaining, a right explicitly mandated by our labor laws and “accorded the highest consideration." In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the
Barbizon relied on the “one union-one company” policy. However, this rule is not without exception. The construction or application of the law. When petitioner Sevilla Trading still included over the years non-
exclusion of the subject employees from the rank-and-file bargaining unit and the CBA is definitely a “compelling basic benefits of its employees, such as maternity leave pay, cash equivalent of unused vacation and sick
reason” for it completely deprived them of the chance to bargain collectively with petition Barbizon er and are leave, among others in the computation of the 13th-month pay, this may only be construed as a voluntary
thus left with no recourse but to group themselves into a separate and distinct bargaining unit and form their act on its part. Putting the blame on the petitioners payroll personnel is inexcusable.
own organization. This is a fundamental right of labor that derives its existence from the Constitution. In Davao Fruits Corporation vs. Associated Labor Unions, we likewise held that:
Finally, we take this opportunity to reiterate the standing rule that a certification election is the sole concern of The Supplementary Rules and Regulations Implementing P.D. No. 851 which put to rest all doubts in the
the workers, hence, an employer lacks the personality to dispute the same. The general rule is that an employer computation of the thirteenth month pay, was issued by the Secretary of Labor as early as January 16, 1976,
has no standing to question a certification election since this is the sole concern of the workers. Law and policy barely one month after the effectivity of P.D. No. 851 and its Implementing Rules. And yet, petitioner
demand that employers take a strict, hands-off stance in certification elections. computed and paid the thirteenth month pay, without excluding the subject items therein until 1981.
From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the
152. G.R. No. 152456 : April 28, 2004 computation of its employees thirteenth month pay, without the payments for sick, vacation and maternity
SEVILLA TRADING COMPANY vs. A.V.A. TOMAS E. SEMANA, SEVILLA TRADING WORKERS leave, premium for work done on rest days and special holidays, and pay for regular holidays. The
UNIONSUPER considerable length of time the questioned items had been included by petitioner indicates a unilateral
FACTS: and voluntary act on its part, sufficient in itself to negate any claim of mistake.
For two to three years prior to 1999, petitioner Sevilla Trading Company (Petitioner), a domestic A company practice favorable to the employees had indeed been established and the payments made pursuant
corporation added to the base figure, in its computation of the 13th-month pay of its employees, the amount of thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the
other benefits received by the employees which are beyond the basic pay. employees cannot be reduced, diminished, discontinued or eliminated by the employer, by virtue of Sec. 10 of
Petitioner claimed that it allegedly discovered the error of including non-basic pay or other benefits in the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor Code of the Philippines which
the base figure used in the computation of the 13th-month pay of its employees. prohibit the diminution or elimination by the employer of the employees existing benefits. Petition denied.
It cited the Rules and Regulations Implementing P.D. No. 851 which stated:
“Basic salary shall include all remunerations or earnings paid by an employer to an employee for services 153. G.R. No. 109002 April 12, 2000
rendered but may not include cost-of-living allowances granted pursuant to P.D. No. 525 or Letter of DELA SALLE UNIVERSITY vs. DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and
Instruction No. 174, profit-sharing payments, and all allowances and monetary benefits which are not BUENAVENTURA MAGSALIN
considered or integrated as part of the regular or basic salary of the employee at the time of the promulgation FACTS:
of the Decree on December 16, 1975.” On December 1986, Dela Salle University (University) and Dela Salle University Employees Association-
Petitioner then effected a change in the computation of the thirteenth month pay that resulted to the reduction National Federation of Teachers and Employees Union (DLSUEANAFTEU), which is composed of regular non
of the employees thirteenth month pay. -academic rank and file employees, (hereinafter referred to as UNION) entered into a collective bargaining
The daily piece-rate workers represented by private respondent Sevilla Trading Workers Union agreement with a life span of three (3) years, that is, from December 23, 1986 to December 22, 1989.
contested the new computation and reduction of their thirteenth month pay. The Union alleged that petitioner During the freedom period, or 60 days before the expiration of the said collective bargaining agreement, the
violated the rule prohibiting the elimination or diminution of employees benefits as provided for in Art. 100 of Union initiated negotiations with the University for a new collective bargaining agreement which, however,
the Labor Code, as amended. They claimed that paid leaves, like sick leave, vacation leave, paternity leave, turned out to be unsuccessful, hence, the Union filed a Notice of Strike with the National Conciliation and
union leave, bereavement leave, holiday pay and other leaves with pay in the CBA should be included in the Mediation Board, National Capital Region.
base figure in the computation of their 13th-month pay. After several conciliation-mediation meetings, the University and Union executed another partial collective
ISSUE: W/N there is a violation of the non-diminution of benefit rule. bargaining agreement. However, one of the unresolved issues is that of “security of tenure”. The Union
HELD: YES. recommended to the University the use of the “last-in-first-out’’ (seniority) method in case of retrenchment and
Under Presidential Decree 851 and its implementing rules, the basic salary of an employee is used as transfer to other schools or units.
the basis in the determination of his 13th-month pay. Any compensations or remunerations which are deemed On this issue, the voluntary arbitrator upheld the “…elementary right and prerogative of the management of the
not part of the basic pay is excluded as basis in the computation of the mandatory bonus such as COLA; profit University to select and/or choose its employees, a right equally recognized by the Constitution and the law.
sharing payments; and all allowances and monetary benefits. The employer, in the exercise of this right, can adopt valid and equitable grounds as basis for lay-off or
Under a later set of Supplementary Rules and Regulations Implementing PD 851 issued by the then separation, like performance, qualifications, competence, etc. Similarly, the right to transfer or reassign an
Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are excluded as part of the basic employee is an employer’s exclusive right and prerogative.”
salary and in the computation of the 13th-month pay. ISSUE: WON grave abuse of discretion was committed by the voluntary arbitrator when he denied the union’s
proposal for the “last-in-first-out’ method of lay-off in cases of retrenchment?
HELD: Gurango engaged in a fistfight. Cordero, Pablis, and another security guard, Fredrick Lañada, arrived and
No. The Arbitrator did not commit grave abuse of discretion in denying the Union’s proposal to use the “last-in- stopped the fight.
first-out’ method of lay-off in cases of retrenchment. BCPI dismissed Gurango after its investigation and deliberation on the answer of denial by Gurango
In the Union’s proposal for the use of “last-in-first-out” method in case of lay-off, termination due to retrenchment after issuing an two inquiry-letters. Its basis was gross misconduct for engaging in the fistfight and violation of
and transfer of employees, it relies on social justice and equity to support its proposition. The Union further the above memorandum.
submits that the University’s prerogative to select and/or choose the employees it will hire is limited, either by LA and NLRC ruled in favor of Gurango after filing a dismissal case. CA reversed the ruling on the
law or agreement, especially where the exercise of this prerogative might result in the loss of employment. The ground that Gurango engaged in the fistfight constituting gross misconduct.
Union further insists that its proposal is “…in keeping with the avowed State policy ‘(q) To ensure the Gurango raised the issue on appeal that BCPI failed to prove that he engaged in a fistfight.
participation of workers in decision and policy-making processes affecting their rights, duties and welfare’ (Art. Issue:
211, Labor Code, as amended)” WON BCPI substantially proved its allegations to warrant Gurango’s dismissal.
On the other hand, the University asserts its management prerogative and counters that “[w]hile it is recognized Ruling:
that this right of employees and workers to ‘participate in policy and decision-making processes affecting their No. In termination cases, the employer has the burden of proving, by substantial evidence, that the
rights and benefits as may be provided by law’ has been enshrined in the Constitution, said participation, dismissal is for just cause. If the employer fails to discharge the burden of proof, the dismissal is deemed
however, does not automatically entitle the Union to dictate as to how an employer should choose the illegal.
employees to be affected by a retrenchment program. The employer still retains the prerogative to determine In the present case, aside from Albao’s statement, BCPI did not present any evidence to show that
the reasonable basis for selecting such employees.” Gurango engaged in a fistfight. Moreover, there is no showing that Gurango’s actions were performed with
The Court agreed with the voluntary arbitrator that as an exercise of management prerogative, the University wrongful intent (National Labor Relations Commission v. Salgarino).
has the right to adopt valid and equitable grounds as basis for terminating or transferring employees. As ruled The surrounding circumstances show that Gurango did not engage in a fistfight: (1) in his 9 May
in the case of Autobus Workers’ Union (AWU) and Ricardo Escanlar vs. National Labor Relations Commission, 2003 letter to BCPI, Juanitas corroborated Gurango’s version of the facts; (2) nobody corroborated Albao’s
“[a] valid exercise of management prerogative is one which, among others, covers: work assignment, working version of the facts; (3) in his medical report, Dr. Aguinaldo found that Gurango suffered physical injuries; (4)
methods, time, supervision of workers, transfer of employees, work supervision, and the discipline, dismissal Gurango filed with the MCTC a complaint against Albao, Cordero and Pablis for slight physical injury; (5) the
and recall of workers. Except as provided for, or limited by special laws, an employer is free to regulate, Labor Arbiter found Gurango’s statement credible and unblemished; (6) the Labor Arbiter found Albao’s
according to his own discretion and judgment, all aspects of employment.” (emphasis supplied) statement contradictory; (7) the Labor Arbiter stated, "I am convinced Albao lied in his statement"; (8) the
(Additional Info) NLRC found that Gurango did not start a fight; (9) the NLRC found Albao’s statement unbelievable and
The “last in first out“(LIFO) rule indicates that as between two or more employees affected by a retrenchment exaggerated; and (10) the Court of Appeals’ reversal of the findings of fact of the Labor Arbiter and the NLRC
program, the last one employed will be the first to go; seniority of the ones hired earlier therefore prevails. Such is baseless.
rule has its merits but its observance is not a statutory duty of the employer.
155. Labadan v. Forest Hills Academy et al
154. G.R. No. 174593 August 25, 2010 Facts
ALEX GURANGO vs. BEST CHEMICALS AND PLASTICS INC. (BCPI) Lilian L. Labadan (Labadan) was hired by Forest Hills Mission Academy (Forest Hills) as an elementary
Facts: school teacher in 1989. After one year of employment, she was made registrar and secondary school teacher.
In a memorandum BCPI prohibited its empoyees from bringing personal items to their work area. In 2003, Labadan filed a complaint against Forest Hills for illegal dismissal, non-payment of overtime pay,
Erring employees would be suspended for six days. BCPI stated that: holiday pay, allowances, 13th month pay, service incentive leave, illegal deductions, and damages. She alleged
Please be reminded of the following existing rules and regulations that all employees are expected to strictly that she was allowed to go on leave, and albeit she had exceeded her approved leave period, its extension was
observe and adhere to: impliedly approved by the school principal because Labadan received no warning or reprimand, and was in fact
xxxx retained in the payroll. Labadan further alleged that since 1990, tithes to the Seventh Day Adventist church, of
Bringing in to work station/area of personal belongings other than those required in the performance which she was a member, have been illegally deducted from her salary; and she was not paid overtime pay for
of one’s duty which disrupt/obstruct Company’s services and operations, except those authorized by overtime service, 13th month pay, five days service incentive leave pay, and holiday pay; and that her SSS
higher authorities. This offense shall include the following items [sic]: radios, walkman, discman, contributions have not been remitted.
make-up kits, ladies’ bags, workers’ knapsacks and the like which must be left behind and safe kept Forest Hills claims that Labadan was permitted to go on leave for two weeks but did not return for work
[sic] in the employees’ respective lockers. This being a Serious Offense, the penalty of which is six after the expiration of the period granted. Because of Labadan’s failure to report to work despite promises to
(6) days suspension from work without pay. do so, Forest Hills hired a temporary employee to accomplish the needed reports. When Labadan did return for
According to Gurango, at 4 a.m., he performed his routine check-up inside the production area. He work, classes for the school year were already underway. With regard to the charge for illegal deduction, Forest
had in his pocket a camera without film. On his way out of the production area, he saw Albao standing near Hills claimed that the Seventh Day Adventist church requires its members to pay tithes equivalent to 10% of
the bundy clock. Albao pulled him, grabbed his pocket, and tried to confiscate the camera. Gurango refused their salaries, and that Labadan never questioned the deduction of the tithe from her salary. As regards the
to give the camera because there was no reason to surrender it. After which Albao and two other guards non-payment of overtime pay, holiday pay, and allowances, Forest Hills noted that petitioner proffered no
ganged on him. This was witnessed by Gurango’s co-worker, Juanitas. After this incident Gurango filed a evidence to support the same.
physical injury case versus Albao and others. The Labor Arbiter decided in favor of Labadan, and found that she was illegally dismissed, and
Albao, on the other hand, alleged that he was on duty at the main entrance of the production area dismissed her claims for overtime pay, holiday pay, allowances, 13th month pay, service incentive leave. The
when Gurango tried to enter the production area bringing a camera. Albao told Gurango that he could not National Labor Relations Commission (NLRC) reversed and set aside the Labor Arbiter’s decision with regard
bring the camera inside the production area. Gurango got mad and tried to grab Albao’s gun. Albao and
to the finding of illegal dismissal. Labadan then filed a Petition for Certiorari with the Court of Appeals, which 157. ROYAL PLANT WORKER’S UNION vs. COCA-COLA BOTTLERS PHILS [G.R. No. 198783] (April 15,
was dismissed by the same. Hence, this Petition for Review on Certiorari. 2013)
ISSUE: WON Labadan was illegally dismissed by Forest Hills FACTS:
Held Coca-cola has several bottling plants all over the country, one which is located in Cebu City. Under the employ
No. While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is of each bottling plant are bottling operators. There are 20 bottling operators who work for its Bottling Line 1
for a valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal. while there are 12-14 bottling operators who man its Bottling Line 2. All of them are male and they are members
The records do not show that petitioner was dismissed from the service. They in fact show that despite of Royal Plants Workers Union (Union).
petitioner’s absence from July 2001 to March 2002 which, by her own admission, exceeded her approved leave, The bottling operators work in two shifts. The first shift is from 8am to 5 pm and the second shfit is from 5pm
she was still considered a member of the Forest Hills faculty which retained her in its payroll. until the production operations is finished. Each shift has rotations of work time and break time. The bottling
Labadan argues, however, that she was constructively dismissed when Forest Hills merged her class operators of Bottling 2 were provided with chairs upon their request. The bottling operators of then bottling 1
with another “so much that when she reported back to work, she has no more claims to hold and no more work asked to be also provided with chairs. However, the chairs provided were removed pursuant to a national
to do.” Labadan, however, failed to refute Forest Hills’ claim that when she expressed her intention to resume directive of petitioner. This directive is in line with the “I operate, I maintain, I clean” program of petitioner for
teaching, classes were already ongoing for School Year 2002-2003. It bears noting that petitioner bottling operators, wherein every bottling operator is given the responsibiliy to keep the machinery and
simultaneously held the positions of secondary school teacher and registrar and, as the NLRC noted, she could equipment assigned to him clean and safe. Hence, a bottling operate does not need a chair anymore.
have resumed her work as registrar had she really wanted to continue working with Forest Hills. The bottling operators initiated the grievance of machinery regarding the removal of chairs. However, Coca-
Labadan’s affidavit and those of her former colleagues, which she attached to her Position Paper, Cola still insisted on the removal of chair. Hence, they failed to arrive at an amicable settlement. Thus, the
merely attested that she was dismissed from her job without valid cause, but gave no particulars on when and process of arbitration continued. The arbitration commitee rendered a decision in favor of the Union, and that
how she was dismissed. the use of chairs by the operators had been a company practice for 34 years. CA reversed the arbitration’s
decision stating that the removal of chairs from the manufacturing/production lines by Coca-cola is within its
156. G.R. No. 183129 May 30, 2016 management prerogative. Hence, this petition.
COCOPLANS, INC. vs. MA. SOCORRO P. VILLAPANDO ISSUE:
Facts: WON the removal of chairs in the production area is within the company’s management prerogative.
Respondent began working as financial advisor for petitioner Cocoplans as Senior Sales Manager. RULING:
Her employment was terminated by Cocoplans on the alleged ground that she was deliberately influencing YES.
people to transfer to another company thereby breaching the trust and losing the confidence given to her by The court has held that management is free to regulate, according to its own discretion and judgment, all
Cocoplans. Villapando filed an action for illegal dismissal alleging that she was dismissed without just cause. aspects of employement, including hiring, work assignments, working methods, time, place, and manner of
Petitioner used a joint affidavit as the evidence proving the loss of trust and confidence. work, processes to be followed, supervision of workers, working regulations, transfer of employees, work
Issue: supervision, lay-off of workers, and discipline, dismissal and recall of workers. The exercise of management
Whether or not Villapando was illegally dismissed. prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of
Held: labor.
The dismissal is not valid. Settled is the ruled that to constitute valid dismissal from employment, 2 The rights of the union under any law were not violated. There is no law that requires employers to provide
requisites must concur; 1. Employee must be afforded due process; 2. Dismissal must be for a valid cause, chairs for bottling operators. The CA correctly ruled that the LC, specifically requires employers to provide seats
which are both present in this case. Art. 282 (c) of the LC, an employer may terminate an employment for fraud for women. No similar requirement is mandated for men or male workers. It must be stressed that all concerned
or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. bottling operators in this case are men. There was no violation either of the Health, Safety, and Social Welfare
Lost of trust and confidence is a just cause, as just cause is premised on the fact that an employee concerned Benefit provided in the LC. The operators’s chair cannot be considered as one of the employee benefits covered
holds a position where greater trust is placed. in Article 100 of the LC. In the court’s view, the term benefits mentioned in the dimunition rule refers to monetary
It must be noted also that the burden of proving just and valid cause for dismissing an employee from benefits or priveleges given to the employee with monetary equivalents. Such benefits or priveleges form part
his employment rests upon the employer. Failure by the employer to discharge this burden shall result in the of the employees’ wage, salary or compensation making them enforceable obligations.
finding that the dismissal is unjustified. In justifying dismissal due to loss of trust and confidence, there must be Jurisprudence recognizes the exercise of management prerogatives. Labor laws also discourage interference
an actual breach of duty committed by the employee, established by substantial evidence. with an employer’s judgment in the conduct of its business. For this reason, this court often declines to interfere
The employer was not able to provide the court with convincing proof, apart from a joint affidavit that in legitimate business decisions of employers. The law must protect not only the welfare of the employees, but
Villapando influenced her subordinates to transfer. This is not substantial. While an employer may terminate also the right of the employers.
managerial employees for just cause to protect its own interest, such prerogative must be exercise with
compassion and understanding bearing in mind that, in the execution of said prerogative, what is at stake is not 158. G.R. No. 184885 March 7, 2012
only employee’s position, but his very livelihood. As such, when there is doubt between the evidence submitted ERNESTO G. YMBONG vs. ABS-CBN BROADCASTING CORPORATION, et. Al.
by the employer and that submitted by the employee, the scales of justice must be tilted in favor of the employee. Facts:
This is with the ruled that an employer’s cause could only succeed on the strength of its own evidence and not The respondent ABS-CBN issued a memorandum ordering their employees to tender resignation if
on the weakness of the employees. they are going to run for public office on the upcoming election or file leave of absence in the entire campaign
period if they are going to support a candidate. However, the Assistant Station Manager where petitioner
Ernesto Ymbong where he was assigned, mistakenly posted a memorandum that only leave of absence
should be filed if any employee shall be running for public office in the upcoming election. Ymbong filed a
leave of absence for the entire campaign with the reason that he will support a candidate. However, Ymbong 160. G.R. No. 156515
later on run for the public position. Unfortunately, Ymbong lost the election. He then returned to work only to CHINA BANKING CORPORATION v MARIANO M. BORROMEO
find out that his employment was terminated pursuant to the ABS-CBN Memorandum. Ymbong was FACTS:
dismissed from work but continued to be radio announcer for a certain radio program only until the program Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking Group of China
ends. Banking Corporation for the Mindanao Area.
Ymbong claimed that he had returned from work after the election and received salary for such until Without authority from the Executive Committee or Board of Directors of the bank, he approved several
he received a memorandum terminating his employment immediately. Thus, he filed a complaint for illegal DAUD/BP (Drawn Against Uncollected Deposits/Bills Purhcased) accommodations amounting to P2,441,375
dismissal. He argued that the ground cited by ABS-CBN for his dismissal was not among those enumerated in favour of Joel Maniwan. Such checks, which are not sufficiently funded by cash, are generally not honoured
in the Labor Code, as amended. And even granting without admitting the existence of the company policy by banks. This came to the knowledge of the bank authorities. A memorandum was issued to the Mariano
supposed to have been violated, Ymbong averred that it was necessary that the company policy meet certain seeking clarification relative to the matter. The respondent accepted full responsibility for committing an error
requirements before willful disobedience of the policy may constitute a just cause for termination. Ymbong in judgment and abuse of discretion.
further argued that the company policy violates his constitutional right to suffrage. Mariano resigned from the Bank and apologized “for all the trouble I have caused because of the
ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee Maniwan case.” The respondent, however, vehemently denied benefitting therefrom.
relationship between the company and Ymbong and Patalinghug. ABS-CBN contended that they are not His acts having constituted violation of the Bank’s Code of Ethics, the respondent was directed to
employees but talents as evidenced by their talent contracts. However, notwithstanding their status, ABS- restitute the amount of P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred by the Bank.
CBN has a standing policy on persons connected with the company whenever they will run for public office. However, in view of his resignation and considering the years of service in the Bank, the management
The Labor Arbiter ruled in favor of petitioner. The NLRC affirmed the said decision with modification, earmarked only P836,637.08 from the respondent’s total separation benefits or pay. The said amount would be
ordering the reinstatement of the petitioner because he was illegally dismissed. The latter’s awareness about released upon recovery of the sums demanded from Maniwan in a civil case filed against him by the bank with
the company policy was only temporary suspension and not resignation or dismissal. Upon appeal, CA the RTC in Cagayan de Oro City.
reversed the decision on the ground that the existing policy of ABS-CBN is to resign if running for election. The respondent made a demand on the bank for the payment of his separation pay and other benefits,
The memorandum issued by the Assistant Station Manager did not supersede the company policy. Hence, but the bank maintained its position to withhold the sum of P836,637.08. Thus, Mariano filed with the NLRC a
this petition. complaint for payment of separation pay, mid-year bonus, profit share and damages against the bank.
Issue: The Labor Arbiter ruled in favour of the bank. Respondent appealed to the NLRC but it affirmed in toto
Whether or not the petitioner was validly terminated. the findings of the Labor Arbiter. The CA, however, alleging that respondent was denied his right to due process,
Held: set aside the NLRC decision and ordered that the records of the case be remanded to the Labor Arbiter for
Yes. Petitioner was validly terminated. further hearings on the factual issues involved.
ABS-CBN posed the rationale for issuing such company policy: The bank filed a motion for reconsidered but denied the same. Hence, this petition.
ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the company ISSUE: W/N the bank has the prerogative/right to impose on the respondent what it considered the appropriate
to continuously remain apolitical. While it encourages and supports its employees to have greater political penalty under the circumstances pursuant to its company rules and regulations.
awareness and for them to exercise their right to suffrage, the company, however, prefers to remain politically HELD:
independent and unattached to any political individual or entity. YES.
Therefore, employees who [intend] to run for public office or accept political appointment should resign from It is well recognized that company policies and regulations are, unless shown to be grossly oppressive
their positions, in order to protect the company from any public misconceptions. To preserve its objectivity, or contrary to law, generally binding and valid on the parties and must be complied with until finally revised or
neutrality and credibility, the company reiterates the following policy guidelines for strict implementation. amended unilaterally or preferably through negotiation or by competent authority.
The Court have consistently held that so long as a company’s management prerogatives are Moreover, management has the prerogative to discipline its employees and to impose appropriate
exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or penalties on erring workers pursuant to company rules and regulations. With more reason should these truisms
circumventing the rights of the employees under special laws or under valid agreements, this Court will apply to the respondent, who, by reason of his position, was required to act judiciously and to exercise his
uphold them. In the instant case, ABS-CBN validly justified the implementation of the subject policy. It is well authority in harmony with company policies.
within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance Contrary to the respondents contention that the petitioner Bank could not properly impose the
of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded. accessory penalty of restitution on him without imposing the principal penalty of Written Reprimand/Suspension,
Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to the latters Code of Ethics expressly sanctions the imposition of restitution/forfeiture of benefits apart from or
exercise what are clearly management prerogatives. The free will of management to conduct its own business independent of the other penalties. Obviously, in view of his voluntary separation from the petitioner Bank, the
affairs to achieve its purpose cannot be denied. imposition of the penalty of reprimand or suspension would be futile. The petitioner Bank was left with no other
It is worth noting that such exercise of management prerogative has earned a stamp of approval recourse but to impose the ancillary penalty of restitution. It was certainly within the petitioner Banks prerogative
from no less than our Congress itself when on February 12, 2001, it enacted Republic Act No. 9006, to impose on the respondent what it considered the appropriate penalty under the circumstances pursuant to
otherwise known as the "Fair Election Act." its company rules and regulations.
The CA was correct in finding that the memorandum issued by the Assistant Station Manager did not Petitioner Banks business is essentially imbued with public interest and owes great fidelity to the public
supersede the policy released by ABS-CBN due to lack of power. Moreover, if Ymbong had been truthful to it deals with. It is expected to exercise the highest degree of diligence in the selection and supervision of their
his real intention in the election, the error made by the Assistant Station Manager would have been corrected. employees. As a corollary, and like all other business enterprises, its prerogative to discipline its employees
and to impose appropriate penalties on erring workers pursuant to company rules and regulations must be
159. (ANA)
respected. The law, in protecting the rights of labor, authorized neither oppression nor self-destruction of an
employer company which itself is possessed of rights that must be entitled to recognition and respect.
Petition granted. LA decision reinstated upholding that the petitioner Banks act of withholding the benefits due
the respondent was justified under its Code of Ethics.

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