CAONG, JR. V.

AVELINO REGUALOS
GR No. 179428
January 26, 2011
FACTS:
Petitioners were hired by respondent under a boundary agreement, as
drivers of his jeepneys. Consequently, petitioners were barred him from
driving because of the deficiency in the boundary payment. They pleaded
with respondent but to no avail. During the mandatory conference,
respondent manifested that petitioners were not dismissed and that they
could drive his jeepneys once they paid their arrears. Petitioners, however,
refused to do so and averred that they were illegally dismissed by
respondent without just cause. They filed separate complaints for illegal
dismissal against respondent who barred them from driving the vehicles due
to deficiencies in their boundary payments. In his answer, respondent
alleged that petitioners were lessees of his vehicles and not his employees;
hence, the Labor Arbiter had no jurisdiction.

ISSUE:
Whether or not the policy of suspending drivers pending payment of arrears
in their boundary obligations reasonable?

HELD:
It is already settled that the relationship between jeepney owners/operators
and jeepney drivers under the boundary system is that of employer-
employee and not of lessor-lessee. The fact that the drivers do not receive
fixed wages but only get the amount in excess of the so called "boundary"
that they pay to the owner/operator is not sufficient to negate the
relationship between them as employer and employee.

R TRANSPORT CORPORATION,,
Petitioner, v. ROGELIO EJANDRA, Respondent.
FACTS: Private respondent Rogelio Ejandra worked as a bus driver of
petitioner bus corporation got almost six years. One day, he was
apprehended by an LTO officer for obstruction of traffic for which his license
was confiscated. Ejendra immediately reported the incident to his manager,
Mr. Oscar Pasquin, who gave him P500 to redeem his license but was able to
retrieve his license only after a week. Later on, when Ejandra informed his
manager that he was ready to report for work, he was told that the company
was still studying whether to allow him to drive again. Private respondent
was likewise accused of causing damage to the bus he used to drive.
Petitioner claimed that private respondent, a habitual absentee, abandoned
his job. Petitioner further argued that private respondent was not an
employee because theirs was a contract of lease and not of employment,
with petitioner being paid on commission basis.
ISSUES: 1.) WON respondent abandoned his work; WON petitioner was the
lessor of private respondent; that, as such, the termination of the contract of
lease of services did not require petitioner to respect private respondents
rights to notice and hearing?
HELD: Under Section 1, Rule 45 of the 1997 Rules of Civil Procedure, a
petition for review shall only raise questions of law considering that the
findings of fact of the Court of Appeals are, as a general rule, conclusive
upon and binding on this Court. This doctrine applies with greater force in
labor cases where the factual findings of the labor tribunals are affirmed by
the Court of Appeals. The reason is because labor officials are deemed to
have acquired expertise in matters within their jurisdiction and therefore,
their factual findings are generally accorded not only respect but also
finality, and are binding on this Court. In the case at bar, the labor
arbiter,the NLRC and the Court of Appeals were unanimous in finding that
private respondent worked as a driver of one of the buses of petitioner and
was paid on a 10% commission basis. After he was apprehended for a traffic
violation, his license was confiscated. When he informed petitioners general
manager of such fact, the latter gave him money to redeem his license. He
went to the LTO office everyday but it was only after a week that he was
able to get back his license. When he reported back to work, petitioners
manager told him to wait until his services were needed again. Considering
himself dismissed, private respondent filed a complaint for illegal dismissal
against petitioner. We have no reason to disturb all these factual findings
because they are amply supported by substantial evidence. Denying the
existence of an employer-employee relationship, petitioner insists that the
parties agreement was for a contract of lease of services. We disagree.
Petitioner is barred to negate the existence of an employer-employee
relationship. In its petition filed before this Court, petitioner invoked our
rulings on the right of an employer to dismiss an employee for just cause.
Petitioner maintained that private respondent was justifiably dismissed due
to abandonment of work. By adopting said rulings, petitioner impliedly
admitted that it was in fact the employer of private respondent. According to
the control test, the power to dismiss an employee is one of the indications
of an employer-employee relationship. Petitioners claim that private
respondent was legally dismissed for abandonment was in fact a negative
pregnant: an acknowledgement that there was no mutual termination of the
alleged contract of lease and that private respondent was its employee. The
fact that petitioner paid private respondent on commission basis did not rule
out the presence of an employee-employer relationship. Article 97(f) of the
Labor Code clearly provides that an employees wages can be in the form of
commissions.
2.) WON respondent was dismissed with just cause.
HELD: NO. According to petitioner, private respondent abandoned his job
and lied about the confiscation of his license. To constitute abandonment,
two elements must concur: (1) the failure to report for work or absence
without valid or justifiable reason and (2) a clear intention to sever the
employer-employee relationship. Of the two, the second element is the more
determinative factor and should be manifested by some overt acts. Mere
absence is not sufficient. It is the employer who has the burden of proof to
show a deliberate and unjustified refusal of the employee to resume his
employment without any intention of returning.[15 In the instant case,
petitioner fell short of proving the requisites. To begin with, petitioners
absence was justified because the LTO, Guadalupe Branch, did not release
his license until after a week. This was the unanimous factual finding of the
labor tribunals and the Court of Appeals. In addition to the fact that
petitioner had no valid cause to terminate private respondent from work, it
violated the latters right to procedural due process by not giving him the
required notice and hearing. Section 2, Rule XXIII, Book V of Department
Order No. 9 provides for the procedure for dismissal for just or authorized
cause: SEC. 2. Standards of due process; requirement of notice. In all cases
of termination of employment, the following standards of due process shall
be substantially observed: I. For termination of employment based on just
causes as defined in Article 282 of the Code: (a) A written notice served on
the employee specifying the ground or grounds for termination, and giving
to said employee reasonable opportunity within which to explain his side; (b)
A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut the evidence presented
against him; and (c ) A written notice of termination served on the employee
indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination. In case of termination, the
foregoing notices shall be served on the employees last known address. II.
For termination of employment as based on authorized causes defined in
Article 283 of the Code, the requirements of due process shall be deemed
complied with upon service of a written notice to the employee and the
appropriate Regional Office of the Department at least thirty days before the
effectivity of the termination, specifying the ground or grounds for
termination. III. If termination is brought about by the completion of the
contract or phase thereof, no prior notice is required. If the termination is
brought about by the failure of an employee to meet the standards of the
employer in case of probationary employment, it shall be sufficient that a
written notice is served the employee within a reasonable time from the
effective date of termination.

CONTINENTAL MARBLE CORP. and FELIPE DAVID

vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC); ARBITRATOR
JOSE T. COLLADO and RODITO NASAYAO
G.R. No. L-43825 May 9, 1988
Nature of the Case
A petition for mandamus, prohibition and certiorari with preliminary
injunction seeking to annul NLRC’s decision dismissing appeal of
petitioners.

Facts:
Nasayao claims to have been employed as plant manager with a
monthly income equivalent of P 3,000 or 25% net monthly income of
Continental Marble (Continental) [whichever is greater] which he
alleged to have failed his three months income sometime in 1974,
thus
sought from the NLRC recovery of such unpaid salary. Continental denies
such employment status and insists that the relationship is that of
a joint venture and clarified further that the agreement to pay Nasayao’s
share in the net income is limited if there is any income, and during
those three months, Continental had no such profits to speak of to
give Nasayao his share. When the matter was submitted for voluntary
arbitration, Continental challenged the capacity of the arbitrator, but
arbitrator refused and rendered judgment awarding money claims to
Nasayao. Petitioner appealed citing labor arbiter for grave abuse of
discretion and that the resulting judgment was not supported by
evidence. Nasayao filed a motion to dismiss citing that the Labor Arbiter’s
decision is final [subject to exhaustion of administrative remedies]
and thereafter filed a motion for writ of execution. NLRC dismissed the
appeal and ordered petitioners to comply with the earlier decision.

Issue(s)
(1). Can the Court review decisions of voluntary arbitrators?
(2). Is Nasayao an employee?

Held
(1). No, subject to exceptions.
The proper venue is through NLRC, except when a question of law
is involved or where a showing of abuse of authority or
discretion in their official acts is properly raised in petitions for certiorari.

On the other hand, Nasayao’s contention on exhausting administrative

remedies is inapplicable to the case. The Court may review
the decisions warrants jurisdiction or rendered with grave abuse of
discretion. Further, his contention that only questions of law and
not findings of fact are cognizable by the Court is unacceptable.

(2). No.
The Court accords respect and finality to the decisions of quasi-
judicial agencies, but when the same is not supported by
substantial evidence, the Court will intervene. In this case, the finding of
Nasayao as an employee of Continental by the Voluntary
Arbitrator is not supported by substantial evidence: (1) It was impossible for
Continental Marble to hire a plant manager on account
of its business reverses at the time; (2) he was not included in the payroll
nor in the list of employees submitted by the Continental
to SSS; (3) the element of control is wanting for: (a) Nasayao was free to
conduct performance of his work; (b) at his own time; (c)
was compensated as a result of his own efforts. And since there was no
employment relationship between Continental Marble and
Nasayao, there is no basis for the award of unpaid wages or salaries.

ABANTE vs LAMADRID BEARING & PARTS CO. Case Digest

EMPERMACO B. ABANTE, JR., petitioner, vs. LAMADRID BEARING &
PARTS CORP. and JOSE LAMADRID, President, respondents.
[G.R. No. 159890 May 28, 2004]

FACTS: Petitioner was a salesman of respondent company earning a

commission of 3% of the total paid up sales covering the whole area of
Mindanao. Aside from selling, he was also tasked with collection. Respondent
corporation through its president, often required Abante to report to a
particular area and occasionally required him to go to Manila to attend
conferences.

Later on, bad blood ensued between the parties due to some bad accounts
that Lamadrid forced petitioner to cover. Later petitioner found out that
respondent had informed his customers not to deal with petitioner since it no
longer recognized him as a commission salesman. Petitioner filed a
complaint for illegal dismissal with money claims against respondent
company and its president, Jose Lamadrid.

By way of defense, respondents countered that petitioner was not its

employee but a freelance salesman on commission basis.

ISSUE: Whether or not petitioner, as a commission salesman, is an

employee of respondent corporation.
HELD: To determine the existence of an employee-employer relationship,
we apply the four fold test: 1) the manner of selection and engagement; (2)
the payment of wages; (3) the presence or absence of the power of
dismissal; and (4) the presence or absence of the power of control.

Applying the aforementioned test, an employer-employee relationship is

notably absent in this case. It is true that he was paid in commission yet no
quota was imposed therefore a dismal performance would not warrant a
ground for dismissal. There was no specific office hours he was required to
observe. He was not designated to conduct services at a particular area or
time. He pursued his selling without interference or supervision from the
company. The company did not prescribe the manner of selling merchandise.
While he was sometimes required to report to Manila, these were only
intended to guide him. Moreover, petitioner was free to offer his services to
other companies.

Art. 280 is not a crucial factor because it only determines two kinds of
employees. It doen;t apply where there is no employer-employee
relationship. While the term commission under Article 96 of the LC was
construed as being included in the term “wage”, there is no categorical
pronouncement that the payment of commission is conclusive proof of the
existence of an employee-employer relationship.

The decision of the CA is affirmed.

Sevilla vs. CA
FACTS:
A contract by and between Noguera and Tourist World Service (TWS),
represented by Canilao, wherein TWS leased the premises belonging to
Noguera as branch office of TWS. When the branch office was opened, it was
run by appellant Sevilla payable to TWS by any airline for any fare brought
in on the efforts of Mrs. Sevilla, 4% was to go to Sevilla and 3% was to be
withheld by the TWS.
Later, TWS was informed that Sevilla was connected with rival firm,
and since the branch office was losing, TWS considered closing down its
office.
On January 3, 1962, the contract with appellee for the use of the
branch office premises was terminated and while the effectivity thereof was
January 31, 1962, the appellees no longer used it. Because of this, Canilao,
the secretary of TWS, went over to the branch office, and finding the
premises locked, he padlocked the premises. When neither appellant Sevilla
nor any of his employees could enter, a complaint was filed by the
appellants against the appellees.
TWS insisted that Sevilla was a mere employee, being the “branch
manager” of its branch office and that she had no say on the lease executed
with the private respondent, Noguera.

ISSUE: W/N ER-EE relationship exists between Sevilla and TWS

HELD:
The records show that petitioner, Sevilla, was not subject to control by
the private respondent TWS. In the first place, under the contract of lease,
she had bound herself in solidum as and for rental payments, an
arrangement that would belie claims of a master-servant relationship. That
does not make her an employee of TWS, since a true employee cannot be
made to part with his own money in pursuance of his employer’s business,
or otherwise, assume any liability thereof.
In the second place, when the branch office was opened, the same
was run by the appellant Sevilla payable to TWS by any airline for any fare
brought in on the effort of Sevilla. Thus, it cannot be said that Sevilla was
under the control of TWS. Sevilla in pursuing the business, relied on her own
capabilities.
It is further admitted that Sevilla was not in the company’s payroll. For
her efforts, she retained 4% in commissions from airline bookings, the
remaining 3% going to TWS. Unlike an employee, who earns a fixed salary,
she earned compensation in fluctuating amount depending on her booking
successes.
The fact that Sevilla had been designated “branch manager” does not
make her a TWS employee. It appears that Sevilla is a bona fide travel
agent herself, and she acquired an interest in the business entrusted to her.
She also had assumed personal obligation for the operation thereof, holding
herself solidary liable for the payment of rentals.
Wherefore, TWS and Canilao are jointly and severally liable to
indemnify the petitioner, Sevilla.
JOSE MEL BERNARTE, petitioner, vs. PHILIPPINE BASKETBALL
ASSOCIATION (PBA), JOSE EMMANUEL M. EALA, and PERRY
MARTINEZ, respondents.
G.R. No. 192084 September 14, 2011
CARPIO, J.

FACTS:
Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were
invited to join the PBA as referees. During the leadership of Commissioner
Emilio Bernardino, they were made to sign contracts on a year-to-year basis.
During the term of Commissioner Eala, however, changes were made on the
terms of their employment.

Complainant Bernarte, for instance, was not made to sign a contract during
the first conference of the All-Filipino Cup which was from February 23, 2003
to June 2003. It was only during the second conference when he was made
to sign a one and a half month contract for the period July 1 to August 5,
2003.

On January 15, 2004, Bernarte received a letter from the Office of the
Commissioner advising him that his contract would not be renewed citing his
unsatisfactory performance on and off the court. It was a total shock for
Bernarte who was awarded Referee of the year in 2003. He felt that the
dismissal was caused by his refusal to fix a game upon order of Ernie De
Leon.

On the other hand, complainant Guevarra alleges that he was invited to join
the PBA pool of referees in February 2001. On March 1, 2001, he signed a
contract as trainee. Beginning 2002, he signed a yearly contract as Regular
Class C referee. On May 6, 2003, respondent Martinez issued a
memorandum to Guevarra expressing dissatisfaction over his questioning on
the assignment of referees officiating out-of-town games. Beginning
February 2004, he was no longer made to sign a contract.

Respondents aver, on the other hand, that complainants entered into two
contracts of retainer with the PBA in the year 2003. The first contract was
for the period January 1, 2003 to July 15, 2003; and the second was for
September 1 to December 2003. After the lapse of the latter period, PBA
decided not to renew their contracts.

Complainants were not illegally dismissed because they were not employees
of the PBA. Their respective contracts of retainer were simply not renewed.
PBA had the prerogative of whether or not to renew their contracts, which
they knew were fixed.

In her 31 March 2005 Decision, the Labor Arbiter declared petitioner an

employee whose dismissal by respondents was illegal. Accordingly, the Labor
Arbiter ordered the reinstatement of petitioner and the payment of
backwages, moral and exemplary damages and attorney’s fees. The NLRC
affirmed the Labor Arbiter's judgment. Respondents filed a petition for
certiorari with the Court of Appeals, which overturned the decisions of the
NLRC and Labor Arbiter.

ISSUE: Whether petitioner is an employee of respondents, which in turn

determines whether petitioner was illegally dismissed

HELD:
NO, Petitioner is not an employee of the respondents. The SC DENIED the
petition and AFFIRMED the assailed decision of the Court of Appeals.
To determine the existence of an employer-employee relationship, case law
has consistently applied the four-fold test, to wit: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer’s power to control the employee on the
means and methods by which the work is accomplished. The so-called
“control test” is the most important indicator of the presence or absence of
an employer-employee relationship.19

In this case, PBA admits repeatedly engaging petitioner’s services, as shown

in the retainer contracts. PBA pays petitioner a retainer fee, exclusive of per
diem or allowances, as stipulated in the retainer contract. PBA can terminate
the retainer contract for petitioner’s violation of its terms and conditions.

However, respondents argue that the all-important element of control is

lacking in this case, making petitioner an independent contractor and not an
employee of respondents.The contractual stipulations do not pertain to,
much less dictate, how and when petitioner will blow the whistle and make
calls. On the contrary, they merely serve as rules of conduct or guidelines in
order to maintain the integrity of the professional basketball league. As
correctly observed by the Court of Appeals, “how could a skilled referee
perform his job without blowing a whistle and making calls? x x x [H]ow can
the PBA control the performance of work of a referee without controlling his
acts of blowing the whistle and making calls?”

We agree with respondents that once in the playing court, the referees
exercise their own independent judgment, based on the rules of the game,
as to when and how a call or decision is to be made. The referees decide
whether an infraction was committed, and the PBA cannot overrule them
once the decision is made on the playing court. The referees are the only,
absolute, and final authority on the playing court. Respondents or any of the
PBA officers cannot and do not determine which calls to make or not to
make and cannot control the referee when he blows the whistle because
such authority exclusively belongs to the referees. The very nature of
petitioner’s job of officiating a professional basketball game undoubtedly
calls for freedom of control by respondents.
Moreover, unlike regular employees who ordinarily report for work eight
hours per day for five days a week, petitioner is required to report for work
only when PBA games are scheduled or three times a week at two hours per
game. In addition, there are no deductions for contributions to the Social
Security System, Philhealth or Pag-Ibig, which are the usual deductions from
employees’ salaries. These undisputed circumstances buttress the fact that
petitioner is an independent contractor, and not an employee of
respondents.