Orozco vs CA and Philippine Daily Inquirer

Facts: In March 1990, Wilhelmina Orozco was hired as a writer by the Philippine Daily Inquirer (PDI). She
was the columnist of “Feminist Reflections” under the Lifestyle section ofthe publication. She writes on a
weekly basis and on a per article basis (P250-300/article).In 1991, Leticia Magsanoc as the editor-in-chief
sought to improve the Lifestyle section of the paper. She said there were too many Lifestyle writers and
that it was time to reduce the number of writers. Orozco’s column was eventually dropped.

Orozco filed for a case for Illegal Dismissal against PDI and Magsanoc. Orozco won in the Labor Arbiter
where the arbiter ruled that there exists an employer-employee relationship between PDI and Orozco. The
case eventually reached the Court of Appeals where the CA ruled that there is no such relationship. Orozco
insists that by applying the four-fold test, it can be seen that she is an employee of PDI; Orozco insists that
PDI had been exercising the power of control over her because: a) PDI provides the guidelines as to what
her article content should be; b) PDI sets deadlines as to when Orozco must submit her article/s; c) PDI
controls the number of articles to be submitted by Orozco; d) PDI requires a certain discipline from
their writers so as to maintain their readership

Issue: WON Orozco is an employee of PDI

Ruling: NO. The type of control being argued by Orozco is not the type of control contemplated under the
four fold test principle in labor law. The main determinant to test control is whether the rules set by the
employer are meant to control not just the results of the work but also the means and method to be used
by the hired party in order to achieve such results.

Not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the
former. Rules which serve as general guidelines towards the achievement of the mutually desired result
are not indicative of the power of control.

Petitioner has not shown that PDI, acting through its editors, dictated how she was to write or produce her
articles each week. Aside from the constraints presented by the space allocation of her column, there were
no restraints on her creativity; petitioner was free to write her column in the manner and style she was
accustomed to and to use whatever research method she deemed suitable for her purpose. The apparent
limitation that she had to write only on subjects that befitted the Lifestyle section did not translate to control,
but was simply a logical consequence of the fact that her column appeared in that section and therefore
had to cater to the preference of the readers of that section.

The newspapers power to approve or reject publication of any specific article she wrote for her column
cannot be the control contemplated in the control test, as it is but logical that one who commissions another
to do a piece of work should have the right to accept or reject the product. The important factor to consider
in the control test is still the element of control over how the work itself is done, not just the end result
thereof.

Where a person who works for another performs his job more or less at his own pleasure, in the manner
he sees fit, not subject to definite hours or conditions of work, and is compensated according to the result
of his efforts and not the amount thereof, no employer-employee relationship exists

Aside from the control test, this Court has also used the economic reality test. The economic realities
prevailing within the activity or between the parties are examined, taking into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties
Petitioners main occupation is not as a columnist for respondent but as a womens rights advocate working
in various womens organizations. Likewise, she herself admits that she also contributes articles to other
publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
employment in respondents line of business.

The inevitable conclusion is that petitioner was not respondent PDIs employee but an independent
contractor, engaged to do independent work.

Sonza vs ABS CBN

Facts: Respondent ABS-CBN signed an Agreement with the Mel and Jay Management Development
Corporation where the latter agreed to provide petitioner Sonza’s services exclusively to ABS-CBN as talent
for radio and television. Later, Sonza tendered a letter rescinding their agreement and filed a complaint
before the DOLE for payment of his labor standard benefits. ABS-CBN contends on the ground that no
employer-employee relationship existed between the parties. The Labor Arbiter found for respondent citing
that Sonza as a ‘talent’ cannot be considered an employee of petitioner. Both NLRC and CA affirmed.

Issue: Whether or not employer-employee relationship existed between petitioner and ABS-CBN.

Ruling: NO. Applying the control test to the present case, we find that SONZA is not an employee but an
independent contractor. The control test is the most important test our courts apply in distinguishing an
employee from an independent Contractor. This test is based on the extent of control the hirer exercises
over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is
deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely
the worker is considered an independent contractor.

We find that ABS-CBN was not involved in the actual performance that produced the finished product of
SONZA’s work. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the
right to modify the program format and airtime schedule “for more effective programming.” ABS-CBN’s sole
concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise
control over the means and methods of performance of SONZA’s work.

In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an
employee of the former. In this case, SONZA failed to show that these rules controlled his performance.
We find that these general rules are merely guidelines towards the achievement of the mutually desired
result, which are top-rating television and radio programs that comply with standards of the industry.
Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an
independent contractor can validly provide his services exclusively to the hiring party. In the broadcast
industry, exclusivity is not necessarily the same as control.

KIMBERLYINDEPENDENTLABORUNIONV DRILON
185SCRA190REGALADO; May 9, 1990
FACTS: Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three-year collective bargaining
agreement (CBA) with (UKCEUPTGW O) which expired on June 30,1986. W ithin the 60-day
freedom period prior to the expiration of and during the negotiations for the renewal of the
aforementioned CBA, some members of the bargaining unit formed another union called "Kimberly. KILUSAN
OLALIA filed a petition for certification election. KIMBERLY and UKCEU-PTGWO did not object to the
holding of a certification election but objected to the inclusion of the so-called contractual workers whose
employment with KIMBERLY was coursed through an independent contractor, Rank Manpower Company, as
among the qualified voters. On June 2, 1986, Med-Arbiter Bonifacio I. Marasigan, who was handling the
certification election case issued an order declaring the following as eligible to vote in the certification election, thus: 1) regular
rank-and-file laborers/employees of the respondent employees respondent company; 2) casuals who have worked at least six
(6) months; 3) Contractual employees who are allegedly in the employ of an independent contractor and who have also
worked for at least six (6) months. During the pre-election conference, 64 casual workers were challenged by KIMBERLY and
UKCEU-PTGWO on the ground that they are not employees of KIMBERLY but of RANK. It was agreed
by all the parties that the 64voters shall be allowed to cast their votes but that their ballots shall be segregated and
subject to challenge proceedings. After the elections, UKCEU-PTGWO won over KILUSAN OLALIA by 20 votes. This count
considered the votes of the 64 employees as separate .In a case regarding the statu s of the 64 employees in relation
to the certification election, it was held by med-arbiter Sanchez that 2) The other causal employees not performing
janitorial and yard maintenance services were deemed labor-only contractual and since labor only contracting is prohibited, such
employees were held to have attained the status of regular employees, the regularization being effective as of the date of the
decision; 3. UKCEU-PTGW O, having garnered more votes than KILUSAN-OLALIA, was certified as
the exclusive bargaining representative of KIMBERLY’s employees. Since the members were only
considered regular at the time of the decision, their votes were not re-considered as regards the election.
Winning union and company executed a CBA- KIMBERLY-OLALIA filed for a TRO on the CBAand included the question of
the status of the64 members in question.

ISSUE: WON the 64 employees were regular employees at the time of the certification election

HELD: YES Article 280 of LC provides for two kinds of regular employees: (1) those who are engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer
and (2) those who have rendered at least one year of service, whether continuous or broken, with respect
to the activity in which they are employed.

The individual petitioners herein who have been adjudged to be regular employees (bylaw) fall under the second
category. These are the mechanics, electricians, machinists, machine shop helpers, warehouse helpers, painters, carpenters,
pipefitters and masons. It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at
the time of the filing of the petition for certification election by KILUSAN OLALIA. While the actual regularization of these
employees entails the mechanical act of issuing regular appointment papers and compliance with such other operating
procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the
status of regular employment attached to the casual worker on the day immediately after the end of his first
year of service.

The law is explicit. As long as the employee has rendered at least one year of service, he becomes a
regular employee with respect to the activity in which he is employed. The law does not provide the
qualification or must first be issued a regular appointment or must first be formally declared as such before
he can acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn.

On the basis of the foregoing circumstances and as a consequence of their status as regular employees, those workers not
perforce janitorial and yard maintenance service were performance entitled to the payment of salary differential, cost of living
allowance, 13th month pay and such their benefits extended to regular employees under the CBA, from the day
immediately following their first year of service in the company. These regular employees are likewise entitled to vote in the
certification election held in July 1, 1986. Consequently, the votes cast by those employees not performing janitorial and yard
maintenance service, which forms part of the 64 challenged votes, should be opened, counted and considered for the
purpose of determining the certified bargaining representative.

Gaco vs NLRC
Facts: Petitioner Zenaida Gaco (seasonal regular employee) was hired by private respondent Orient Leaf
Tobacco Corporation on April 17, 1974 for the position of Picker. In 1975, after a year of service, she was
promoted to the position of Production Recorder. She held this position for a period of fourteen (14) years
until the end of private respondent's working season in 1989. In April, 1990, when petitioner reported for
work at the start of the working season for that year, she found out that her position was already occupied
by another employee and that she was being demoted to the position of Picker.
Petitioner refused to report for work and filed a complaint before the Labor Arbiter for payment of separation
pay. Private respondent raised the defense that the demotion of petitioner was effected on a valid ground,
that is, gross inefficiency. Petitioner’s work is to record correctly and accurately weights on tags placed
inside tobacco containers as against the Production Reports which she accomplishes and she manifested
said gross inefficiency, committing the same mistakes frequently in spite of her attention being called
repeatedly and advised to take the necessary corrective measures.
On July 31, 1991, the Labor Arbiter rendered judgment favourable to petitioner. On appeal before public
respondent National Labor Relations Commission by private respondent, the aforementioned decision was
modified wherein deleting the award of backwages. The Office of the Solicitor General supports entirely the
decision of respondent NLRC. It maintains that petitioner is not entitled to backwages since private
respondent did not terminate her services. Rather, it was petitioner who terminated her employment by
refusing to report for work despite several demands made upon her by private respondent to do so.
Issue: WON NLRC erred in deleting the backwages.
Ruling: YES. Constructive dismissal as a quitting because continued employment is rendered impossible,
unreasonable or unlikely; as, an offer involving a demotion in rank and a diminution in pay.
In this case, petitioner was constructively dismissed hence she is entitled to her full backwages, inclusive
of allowances, and other benefits or their monetary equivalent computed from the time her compensation
was withheld from her up to the time of her actual reinstatement.
However, we shall not follow Article 279 of the Labor Code to the letter regarding the period of backwages
in view of the peculiar circumstances of the present case, namely, "there is now a strained relationship
between (petitioner) and (private respondent) and (petitioner) prays for payment of separation pay in lieu
of reinstatement." Instead, the period thereof shall be reckoned from the time her compensation was
withheld from her, or in April, 1990 up to the finality of our decision.
Under the foregoing circumstances, complainant should be reinstated without backwages; however, since
she already manifested her desire not to work for respondent anymore, she should instead be granted
separation pay in lieu of reinstatement, further taking into consideration her long service with respondent.
It appearing that the work at the respondent's company is seasonal in nature, the separation pay should be
computed on the basis of one-half (1/2) month pay for every twelve (12) months of service, or a total of
eleven (11) constructive years.

Again, we sustain the ruling of the Labor Arbiter granting separation pay in the amount of one (1) month
pay for every year of service. This has been our consistent ruling in numerous decisions awarding
separation pay to an illegally dismissed employee in lieu of reinstatement.
DMConsunji vs Jarmin

Facts: Petitioner D.M. Consunji, Inc. (DMCI), a construction company, hired respondent Estelito L. Jamin
as a laborer. Sometime in 1975, Jamin became a helper carpenter. Since his initial hiring, Jamins
employment contract had been renewed a number of times. On March 20, 1999, his work at DMCI was
terminated due to the completion of the SM Manila project. This termination marked the end of his
employment withDMCI as he was not rehired again. Jamin filed a complaint for illegal dismissal, with several
money claims (including attorneys fees), against DMCI and its President/General Manager, David
M.Consunji. Jamin alleged that DMCI terminated his employment without a just and authorized cause at a
time when he was already 55 years old and had no independent source of livelihood. He claimed that he
rendered service to DMCI continuously for almost 31 years. DMCI denied liability. It argued that it hired
Jamin on a project-to-project basis, from the start of his engagement in 1968 until the completion of its SM
Manila project on March 20, 1999 where Jamin last worked. With the completion of the project, Jamins
employment was terminated. The LA dismissed the complaint for lack of merit. On appeal, the NLRC
affirmed the decision of the LA. On further appeal, the CA reversed the NLRC decision and ruled that Jamin
was a regular employee. Hence, DMCI seeks a reversal of the CA rulings on the ground that the appellate
court committed a grave error in annulling the decisions of the labor arbiter and the NLRC.

Issue: Whether or not Jamin is a regular employee

Ruling: Yes. Once a project or work pool employee has been: (1) continuously, as opposed to intermittently,
rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary
and indispensable to the usual business or trade of the employer, then the employee must be deemed a
regular employee. While the contracts indeed show that Jamin had been engaged as a project employee,
there was an almost unbroken string of Jamins rehiring from December17, 1968 up to the termination of
his employment on March 20, 1999. While the history of Jamins employment (schedule of projects) [42] relied
upon by DMCI shows a gap of almost four years in his employment for the period between July 28, 1980
(the supposed completion date of the Midtown Plaza project) and June 13, 1984 (the start of the IRRI Dorm
IV project), the gap was caused by the company’s omission of the three projects above mentioned.

For not disclosing that there had been other projects where DMCI engaged his services, Jamin accuses
the company of suppressing vital evidence that supports his contention that he rendered service in the
company’s construction projects continuously and repeatedly for more than three decades. The non-
disclosure might not have constituted suppression of evidence it could just have been overlooked by the
company but the oversight is unfair to Jamin as the non-inclusion of the three projects gives the impression
that there were substantial gaps not only of several months but years in his employment with DMCI.

Thus, as Jamin explains, the Ritz Tower Project (July 29, 1980 to June 12, 1982) and the New Istana
Project (June 23, 1982 to February 16, 1984) would explain the gap between the Midtown Plaza project
(September 3, 1979 to July 28, 1980) and the IRRI Dorm IV project (June 13, 1984 to March 12, 1985) and
the other New Istana Project (January 24, 1986 to May 25, 1986) would explain the gap between P. 516
Hanger (September 13, 1985 to January 23, 1986) and P. 516 Maint (May 26, 1986 to November 18, 1987).

To reiterate, Jamins employment history with DMCI stands out for his continuous, repeated and successive
rehiring in the company’s construction projects. In all the 38 projects where DMCI engaged Jamins services,
the tasks he performed as a carpenter were indisputably necessary and desirable in DMCIs construction
business. He might not have been a member of a work pool as DMCI insisted that it does not maintain a
work pool, but his continuous rehiring and the nature of his work unmistakably made him a regular
employee. Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital
in determining if the employee was hired for a specific undertaking or tasked to perform functions vital,
necessary and indispensable to the usual business or trade of the employer. Here, [private] respondent
had been a project employee several times over. His employment ceased to be coterminous with specific
projects when he was repeatedly re-hired due to the demands of petitioners business

Gaco vs NLRC

G.R. No. 74246 January 26, 1989

MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO vs.LEOGARDO, JR.,

Facts: Joaquin A. Dequila (or Dequilla) was hired on probation by Mariwasa Manufacturing, Inc. as a
general utility worker on January 10, 1979. After 6 months, he was informed that his work was unsatisfactory
and had failed to meet the required standards. To give him another chance, and with Dequila’s written
consent, Mariwasa extended Dequila’s probationary period for another three months: from July 10 to
October 9, 1979. Dequila’s performance, however, did not improve and Mariwasa terminated his
employment at the end of the extended period. Dequila filed a complaint for illegal dismissal against
Mariwasa and its VP for Administration, Angel T. Dazo, and violation of Presidential Decrees Nos. 928 and
1389. DIRECTOR OF MINISTRY OF LABOR: Complaint is dismissed. Termination is justified. Thus,
Dequila appeals to the Minister of Labor.
MINISTER OF LABOR: Deputy Minister Vicente Leogardo, Jr. held that Dequila was already a regular
employee at the time of his dismissal, thus, he was illegally dismissed. (Initial order: Reinstatement with full
backwages. Later amended to direct payment of Dequila’s backwages from the date of his dismissal to
December 20, 1982 only.)

Issue: WON employer and employee may, by agreement, extend the probationary period of employment
beyond the six months prescribed in Art. 282 of the Labor Code?

Ruling: YES, agreements stipulating longer probationary periods may constitute lawful exceptions to the
statutory prescription limiting such periods to six months. The SC in its decision in Buiser vs. Leogardo, Jr.
(1984) said that “Generally, the probationary period of employment is limited to six (6) months. The
exception to this general rule is when the parties to an employment contract may agree otherwise, such as
when the same is established by company policy or when the same is required by the nature of work to be
performed by the employee. In the latter case, there is recognition of the exercise of managerial
prerogatives in requiring a longer period of probationary employment, such as in the present case where
the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive,
especially where the employee must learn a particular kind of work such as selling, or when the job requires
certain qualifications, skills experience or training.”

In this case, the extension given to Dequila could not have been pre-arranged to avoid the legal
consequences of a probationary period satisfactorily completed. In fact, it was ex gratia, an act of liberality
on the part of his employer affording him a second chance to make good after having initially failed to prove
his worth as an employee. Such an act cannot now unjustly be turned against said employer’s account to
compel it to keep on its payroll one who could not perform according to its work standards.

By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit
attaching to the completion of said period if he still failed to make the grade during the period of extension.
By reasonably extending the period of probation, the questioned agreement actually improved the
probationary employee’s prospects of demonstrating his fitness for regular employment.

Filamer vs IAC
Facts: Private respondent Potenciano Kapunan, Sr., an eighty-two-year old retired schoolteacher (now
deceased), was struck by the Pinoy jeep owned by petitioner Filamer and driven by its alleged employee,
Funtecha, as Kapunan, Sr. was walking along Roxas Avenue, Roxas City at 6:30 in the evening of October
20, 1977. As a result of the accident, Kapunan, Sr. suffered multiple injuries for which he was hospitalized
for a total of twenty (20) days.

Evidence showed that at the precise time of the vehicular accident, only one headlight of the jeep was
functioning. Funtecha, who only had a student driver’s permit, was driving after having persuaded Allan
Masa, the authorized driver, to turn over the wheels to him.

Thereafter, Kapunan, Sr. instituted a criminal case against Funtecha alone in the City Court of Roxas City
for serious physical injuries through reckless imprudence. Kapunan, Sr. reserved his right to file an
independent civil action. The inferior court found Funtecha guilty as charged and on appeal, his conviction
was affirmed by the then Court of First Instance of Capiz.

Pursuant to his reservation, Kapunan, Sr. commenced a civil case for damages before the RTC of Roxas
City. Named defendants in the complaint were petitioner Filamer and Funtecha. Also included was Agustin
Masa, the director and president of Filamer Christian Institute, in his personal capacity "in that he personally
authorized and allowed said Daniel Funtecha who was his houseboy at the time of the incident, to drive the
vehicle in question despite his knowledge and awareness that the latter did not have the necessary license
or permit to drive said vehicle. His son, Allan Masa, who was with Funtecha at the time of the accident, was
not impleaded as a co-defendant. On December 14, 1983, the trial court rendered judgment finding not only
petitioner Filamer and Funtecha to be at fault but also Allan Masa, a non-party

Only petitioner Filamer and third-party defendant Zenith Insurance Corporation appealed the lower court’s
judgment to the Court of Appeals and as a consequence, said lower court’s decision became final as to
Funtecha. For failure of the insurance firm to pay the docket fees, its appeal was dismissed on September
18, 1984. On December 17, 1985, the Appellate Court rendered the assailed judgment affirming the trial
court’s decision in toto.

Issue: WON Funtecha is an employee of Filamer.

Ruling: NO. The SC ruled that the petitioner Filamer’s cannot be held responsible for the tortious act of
Funtecha on the ground that there is no existing employer-employee relationship between them.

In disclaiming liability, petitioner Filamer has invoked the provisions of the Labor Code, 7 specifically Section
14, Rule X of Book III which reads: "Sec. 14. Working scholars. — There is no employer-employee
relationship between students on the one hand, and schools, colleges or universities on the other, where
students work for the latter in exchange for the privilege to study free of charge; provided the students are
given real opportunity, including such facilities as may be reasonable, necessary to finish their chosen
courses under such arrangement."

It is manifest that under the just-quoted provision of law, petitioner Filamer cannot be considered as
Funtecha’s employer. Funtecha belongs to that special category of students who render service to the
school in exchange for free tuition. Funtecha worked for petitioner for two hours daily for five days a week.
He was assigned to clean the school passageways from 4:00 a.m. to 6:00 a.m. with sufficient time to
prepare for his 7:30 a.m. classes. As admitted by Agustin Masa in open court, Funtecha was not included
in the company payroll.

The wording of Section 14 is clear and explicit and leaves no room for equivocation. The provision of Section
14 is obviously intended to eliminate an erstwhile gray area in labor relations and seeks to define in
categorical terms the precise status of working scholars in relation to the learning institutions in which they
work for the privilege of a free education.

But even if we were to concede the status of an employee on Funtecha, still the primary responsibility for
his wrongdoing cannot be imputed to petitioner Filamer for the plain reason that at the time of the accident,
it has been satisfactorily shown that Funtecha was not acting within the scope of his supposed employment.
His duty was to sweep the school passages for two hours every morning before his regular classes. Taking
the wheels of the Pinoy jeep from the authorized driver at 6:30 in the evening and then driving the vehicle
in a reckless manner resulting in multiple injuries to a third person were certainly not within the ambit of his
assigned tasks. In other words, at the time of the injury, Funtecha was not engaged in the execution of the
janitorial services for which he was employed, but for some purpose of his own. It is but fair therefore that
Funtecha should bear the full brunt of his tortious negligence. Petitioner Filamer cannot be made liable for
the damages he had caused.