Anda di halaman 1dari 50

[G.R. NO.

170087 : August 31, 2006]


ANGELINA FRANCISCO, Petitioner, v. NATIONAL LABOR RELATIONS
COMMISSION, ASEI COR!ORATION, SEIIC"IRO TAA"AS"I, TIMOTEO
ACE#O, #ELFIN LI$A, IRENE BALLESTEROS, TRINI#A# LI$A %&' RAMON
ESC(ETA, Respondents.
# E C I S I O N
)NARES*SANTIAGO, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to
annul and set aside the Decision and Resolution of the Court of Appeals dated
October !, ""4
#
and October $, ""5,

respectivel%, in CA&'.R. (P )o. $*5#5


dis+issin, the co+plaint for constructive dis+issal filed b% herein petitioner
An,elina -rancisco. The appellate court reversed and set aside the Decision of the
)ational .abor Relations Co++ission /).RC0 dated April #5, ""1,
1
in ).RC )CR
CA )o. "1$22&" which affir+ed with +odification the decision of the .abor Arbiter
dated 3ul% 1#, "",
4
in ).RC&)CR Case )o. 1"&#"&"&4*!&"#, findin, that private
respondents were liable for constructive dis+issal.
4n #!!5, petitioner was hired b% 5asei Corporation durin, its incorporation sta,e.
(he was desi,nated as Accountant and Corporate (ecretar% and was assi,ned to
handle all the accountin, needs of the co+pan%. (he was also desi,nated as .iaison
Officer to the Cit% of 6akati to secure business per+its, construction per+its and
other licenses for the initial operation of the co+pan%.
5
Althou,h she was desi,nated as Corporate (ecretar%, she was not entrusted with
the corporate docu+ents7 neither did she attend an% board +eetin, nor re8uired to
do so. (he never prepared an% le,al docu+ent and never represented the co+pan%
as its Corporate (ecretar%. 9owever, on so+e occasions, she was prevailed upon to
si,n docu+entation for the co+pan%.
2
4n #!!2, petitioner was desi,nated Actin, 6ana,er. The corporation also hired 'err%
)ino as accountant in lieu of petitioner. As Actin, 6ana,er, petitioner was assi,ned
to handle recruit+ent of all e+plo%ees and perfor+ +ana,e+ent ad+inistration
functions7 represent the co+pan% in all dealin,s with ,overn+ent a,encies,
especiall% with the :ureau of 4nternal Revenue /:4R0, (ocial (ecurit% (%ste+ /(((0
and in the cit% ,overn+ent of 6akati7 and to ad+inister all other +atters pertainin,
to the operation of 5asei Restaurant which is owned and operated b% 5asei
Corporation.
$
-or five %ears, petitioner perfor+ed the duties of Actin, 6ana,er. As of Dece+ber
1#, """ her salar% was P$,5""."" plus P1,"""."" housin, allowance and a #";
share in the profit of 5asei Corporation.
*
4n 3anuar% ""#, petitioner was replaced b% .i<a R. -uentes as 6ana,er. Petitioner
alle,ed that she was re8uired to si,n a prepared resolution for her replace+ent but
she was assured that she would still be connected with 5asei Corporation. Ti+oteo
Acedo, the desi,nated Treasurer, convened a +eetin, of all e+plo%ees of 5asei
Corporation and announced that nothin, had chan,ed and that petitioner was still
connected with 5asei Corporation as Technical Assistant to (ei=i 5a+ura and in
char,e of all :4R +atters.
!
Thereafter, 5asei Corporation reduced her salar% b% P,5""."" a +onth be,innin,
3anuar% up to (epte+ber ""# for a total reduction of P,5""."" as of (epte+ber
""#. Petitioner was not paid her +id&%ear bonus alle,edl% because the co+pan%
was not earnin, well. On October ""#, petitioner did not receive her salar% fro+
the co+pan%. (he +ade repeated follow&ups with the co+pan% cashier but she was
advised that the co+pan% was not earnin, well.
#"
On October #5, ""#, petitioner asked for her salar% fro+ Acedo and the rest of the
officers but she was infor+ed that she is no lon,er connected with the co+pan%.
##
(ince she was no lon,er paid her salar%, petitioner did not report for work and filed
an action for constructive dis+issal before the labor arbiter.
Private respondents averred that petitioner is not an e+plo%ee of 5asei Corporation.
The% alle,ed that petitioner was hired in #!!5 as one of its technical consultants on
accountin, +atters and act concurrentl% as Corporate (ecretar%. As technical
consultant, petitioner perfor+ed her work at her own discretion without control and
supervision of 5asei Corporation. Petitioner had no dail% ti+e record and she ca+e
to the office an% ti+e she wanted. The co+pan% never interfered with her work
e>cept that fro+ ti+e to ti+e, the +ana,e+ent would ask her opinion on +atters
relatin, to her profession. Petitioner did not ,o throu,h the usual procedure of
selection of e+plo%ees, but her services were en,a,ed throu,h a :oard Resolution
desi,natin, her as technical consultant. The +one% received b% petitioner fro+ the
corporation was her professional fee sub=ect to the #"; e>panded withholdin, ta>
on professionals, and that she was not one of those reported to the :4R or ((( as
one of the co+pan%?s e+plo%ees.
#
Petitioner?s desi,nation as technical consultant depended solel% upon the will of
+ana,e+ent. As such, her consultanc% +a% be ter+inated an% ti+e considerin,
that her services were onl% te+porar% in nature and dependent on the needs of the
corporation.
To prove that petitioner was not an e+plo%ee of the corporation, private
respondents sub+itted a list of e+plo%ees for the %ears #!!! and """ dul%
received b% the :4R showin, that petitioner was not a+on, the e+plo%ees reported
to the :4R, as well as a list of pa%ees sub=ect to e>panded withholdin, ta> which
included petitioner. ((( records were also sub+itted showin, that petitioner?s latest
e+plo%er was (ei=i Corporation.
#1
The .abor Arbiter found that petitioner was ille,all% dis+issed, thus@
A9BRB-ORB, pre+ises considered, =ud,+ent is hereb% rendered as follows@
#. findin, co+plainant an e+plo%ee of respondent corporation7
. declarin, co+plainant?s dis+issal as ille,al7
1. orderin, respondents to reinstate co+plainant to her for+er position without loss
of seniorit% ri,hts and =ointl% and severall% pa% co+plainant her +one% clai+s in
accordance with the followin, co+putation@
A. :ackwa,es #"C""# & "$C"" $5,""".""
/$,5"" > #" +os.0
b. (alar% Differentials /"#C""# & "!C""#0 ,5"".""
c. 9ousin, Allowance /"#C""# & "$C""0 5$,""".""
d. 6id%ear :onus ""# $,5"".""
e. #1th 6onth Pa% $,5"".""
f. #"; share in the profits of 5asei
Corp. fro+ #!!2&""# 12#,#$5.""
,. 6oral and e>e+plar% da+a,es #"",""".""
h. #"; Attorne%?s fees *$,"$2.5"
P!5$,$4.5"
4f reinstate+ent is no lon,er feasible, respondents are ordered to pa% co+plainant
separation pa% with additional backwa,es that would accrue up to actual pa%+ent of
separation pa%.
(O ORDBRBD.
#4
On April #5, ""1, the ).RC affir+ed with +odification the Decision of the .abor
Arbiter, the dispositive portion of which reads@
PRB64(B( CO)(4DBRBD, the Decision of 3ul% 1#, "" is hereb% 6OD4-4BD as
follows@
#0 Respondents are directed to pa% co+plainant separation pa% co+puted at one
+onth per %ear of service in addition to full backwa,es fro+ October ""# to 3ul%
1#, ""7
0 The awards representin, +oral and e>e+plar% da+a,es and #"; share in profit
in the respective accounts of P#"","""."" and P12#,#$5."" are deleted7
10 The award of #"; attorne%?s fees shall be based on salar% differential award
onl%7
40 The awards representin, salar% differentials, housin, allowance, +id %ear bonus
and #1th +onth pa% are A--4R6BD.
(O ORDBRBD.
#5
On appeal, the Court of Appeals reversed the ).RC decision, thus@
A9BRB-ORB, the instant petition is hereb% 'RA)TBD. The decision of the )ational
.abor Relations Co++issions dated April #5, ""1 is hereb% RBDBR(BD and (BT
A(4DB and a new one is hereb% rendered dis+issin, the co+plaint filed b% private
respondent a,ainst 5asei Corporation, et al. for constructive dis+issal.
(O ORDBRBD.
#2
The appellate court denied petitioner?s +otion for reconsideration, hence, the
present recourse.
The core issues to be resolved in this case are /#0 whether there was an e+plo%er&
e+plo%ee relationship between petitioner and private respondent 5asei Corporation7
and if in the affir+ative, /0 whether petitioner was ille,all% dis+issed.
Considerin, the conflictin, findin,s b% the .abor Arbiter and the )ational .abor
Relations Co++ission on one hand, and the Court of Appeals on the other, there is
a need to ree>a+ine the records to deter+ine which of the propositions espoused
b% the contendin, parties is supported b% substantial evidence.
#$
Ae held in Sevilla v. Court of Appeals
#*
that in this =urisdiction, there has been no
unifor+ test to deter+ine the e>istence of an e+plo%er&e+plo%ee relation.
'enerall%, courts have relied on the so&called ri,ht of control test where the person
for who+ the services are perfor+ed reserves a ri,ht to control not onl% the end to
be achieved but also the +eans to be used in reachin, such end. 4n addition to the
standard of ri,ht&of&control, the e>istin, econo+ic conditions prevailin, between the
parties, like the inclusion of the e+plo%ee in the pa%rolls, can help in deter+inin,
the e>istence of an e+plo%er&e+plo%ee relationship.
9owever, in certain cases the control test is not sufficient to ,ive a co+plete picture
of the relationship between the parties, owin, to the co+ple>it% of such a
relationship where several positions have been held b% the worker. There are
instances when, aside fro+ the e+plo%er?s power to control the e+plo%ee with
respect to the +eans and +ethods b% which the work is to be acco+plished,
econo+ic realities of the e+plo%+ent relations help provide a co+prehensive
anal%sis of the true classification of the individual, whether as e+plo%ee,
independent contractor, corporate officer or so+e other capacit%.
The better approach would therefore be to adopt a two&tiered test involvin,@ /#0 the
putative e+plo%er?s power to control the e+plo%ee with respect to the +eans and
+ethods b% which the work is to be acco+plished7 and /0 the underl%in, econo+ic
realities of the activit% or relationship.
This two&tiered test would provide us with a fra+ework of anal%sis, which would
take into consideration the totalit% of circu+stances surroundin, the true nature of
the relationship between the parties. This is especiall% appropriate in this case
where there is no written a,ree+ent or ter+s of reference to base the relationship
on7 and due to the co+ple>it% of the relationship based on the various positions and
responsibilities ,iven to the worker over the period of the latter?s e+plo%+ent.
The control test initiall% found application in the case of Viaa v. Al-Lagadan and
Piga,
#!
and latel% in Leonardo v. Court of Appeals,
"
where we held that there is an
e+plo%er&e+plo%ee relationship when the person for who+ the services are
perfor+ed reserves the ri,ht to control not onl% the end achieved but also the
+anner and +eans used to achieve that end.
4n Sevilla v. Court of Appeals,
#
we observed the need to consider the e>istin,
econo+ic conditions prevailin, between the parties, in addition to the standard of
ri,ht&of&control like the inclusion of the e+plo%ee in the pa%rolls, to ,ive a clearer
picture in deter+inin, the e>istence of an e+plo%er&e+plo%ee relationship based on
an anal%sis of the totalit% of econo+ic circu+stances of the worker.
Thus, the deter+ination of the relationship between e+plo%er and e+plo%ee
depends upon the circu+stances of the whole econo+ic activit%,

such as@ /#0 the


e>tent to which the services perfor+ed are an inte,ral part of the e+plo%er?s
business7 /0 the e>tent of the worker?s invest+ent in e8uip+ent and facilities7 /10
the nature and de,ree of control e>ercised b% the e+plo%er7 /40 the worker?s
opportunit% for profit and loss7 /50 the a+ount of initiative, skill, =ud,+ent or
foresi,ht re8uired for the success of the clai+ed independent enterprise7 /20 the
per+anenc% and duration of the relationship between the worker and the e+plo%er7
and /$0 the de,ree of dependenc% of the worker upon the e+plo%er for his
continued e+plo%+ent in that line of business.
1
The proper standard of econo+ic dependence is whether the worker is dependent
on the alle,ed e+plo%er for his continued e+plo%+ent in that line of business.
4
4n
the Enited (tates, the touchstone of econo+ic realit% in anal%<in, possible
e+plo%+ent relationships for purposes of the -ederal .abor (tandards Act is
dependenc%.
5
:% analo,%, the bench+ark of econo+ic realit% in anal%<in, possible
e+plo%+ent relationships for purposes of the .abor Code ou,ht to be the econo+ic
dependence of the worker on his e+plo%er.
:% appl%in, the control test, there is no doubt that petitioner is an e+plo%ee of
5asei Corporation because she was under the direct control and supervision of (ei=i
5a+ura, the corporation?s Technical Consultant. (he reported for work re,ularl% and
served in various capacities as Accountant, .iaison Officer, Technical Consultant,
Actin, 6ana,er and Corporate (ecretar%, with substantiall% the sa+e =ob functions,
that is, renderin, accountin, and ta> services to the co+pan% and perfor+in,
functions necessar% and desirable for the proper operation of the corporation such
as securin, business per+its and other licenses over an indefinite period of
en,a,e+ent.
Ender the broader econo+ic realit% test, the petitioner can likewise be said to be an
e+plo%ee of respondent corporation because she had served the co+pan% for si>
%ears before her dis+issal, receivin, check vouchers indicatin, her salariesCwa,es,
benefits, #1th +onth pa%, bonuses and allowances, as well as deductions and (ocial
(ecurit% contributions fro+ Au,ust #, #!!! to Dece+ber #*, """.
2
Ahen
petitioner was desi,nated 'eneral 6ana,er, respondent corporation +ade a report
to the ((( si,ned b% 4rene :allesteros. Petitioner?s +e+bership in the ((( as
+anifested b% a cop% of the ((( speci+en si,nature card which was si,ned b% the
President of 5asei Corporation and the inclusion of her na+e in the on&line in8uir%
s%ste+ of the ((( evinces the e>istence of an e+plo%er&e+plo%ee relationship
between petitioner and respondent corporation.
$
4t is therefore apparent that petitioner is econo+icall% dependent on respondent
corporation for her continued e+plo%+ent in the latter?s line of business.
4n Domasig v. National Labor Relations Commission,
*
we held that in a business
establish+ent, an identification card is provided not onl% as a securit% +easure but
+ainl% to identif% the holder thereof as a bona fide e+plo%ee of the fir+ that issues
it. To,ether with the cash vouchers coverin, petitioner?s salaries for the +onths
stated therein, these +atters constitute substantial evidence ade8uate to support a
conclusion that petitioner was an e+plo%ee of private respondent.
Ae likewise ruled in lores v. Nuestro
!
that a corporation who re,isters its workers
with the ((( is proof that the latter were the for+er?s e+plo%ees. The covera,e of
(ocial (ecurit% .aw is predicated on the e>istence of an e+plo%er&e+plo%ee
relationship.
-urther+ore, the affidavit of (ei=i 5a+ura dated Dece+ber 5, ""# has clearl%
established that petitioner never acted as Corporate (ecretar% and that her
desi,nation as such was onl% for convenience. The actual nature of petitioner?s =ob
was as 5a+ura?s direct assistant with the dut% of actin, as .iaison Officer in
representin, the co+pan% to secure construction per+its, license to operate and
other re8uire+ents i+posed b% ,overn+ent a,encies. Petitioner was never
entrusted with corporate docu+ents of the co+pan%, nor re8uired to attend the
+eetin, of the corporation. (he was never priv% to the preparation of an% docu+ent
for the corporation, althou,h once in a while she was re8uired to si,n prepared
docu+entation for the co+pan%.
1"
The second affidavit of 5a+ura dated 6arch $, "" which repudiated the
Dece+ber 5, ""# affidavit has been alle,edl% withdrawn b% 5a+ura hi+self fro+
the records of the case.
1#
Re,ardless of this fact, we are convinced that the
alle,ations in the first affidavit are sufficient to establish that petitioner is an
e+plo%ee of 5asei Corporation.
'rantin, arguendo, that the second affidavit validl% repudiated the first one, courts
do not ,enerall% look with favor on an% retraction or recanted testi+on%, for it could
have been secured b% considerations other than to tell the truth and would +ake
sole+n trials a +ocker% and place the investi,ation of the truth at the +erc% of
unscrupulous witnesses.
1
A recantation does not necessaril% cancel an earlier
declaration, but like an% other testi+on% the sa+e is sub=ect to the test of credibilit%
and should be received with caution.
11
:ased on the fore,oin,, there can be no other conclusion that petitioner is an
e+plo%ee of respondent 5asei Corporation. (he was selected and en,a,ed b% the
co+pan% for co+pensation, and is econo+icall% dependent upon respondent for her
continued e+plo%+ent in that line of business. 9er +ain =ob function involved
accountin, and ta> services rendered to respondent corporation on a re,ular basis
over an indefinite period of en,a,e+ent. Respondent corporation hired and en,a,ed
petitioner for co+pensation, with the power to dis+iss her for cause. 6ore
i+portantl%, respondent corporation had the power to control petitioner with the
+eans and +ethods b% which the work is to be acco+plished.
The corporation constructivel% dis+issed petitioner when it reduced her salar% b%
P,5"" a +onth fro+ 3anuar% to (epte+ber ""#. This a+ounts to an ille,al
ter+ination of e+plo%+ent, where the petitioner is entitled to full backwa,es. (ince
the position of petitioner as accountant is one of trust and confidence, and under
the principle of strained relations, petitioner is further entitled to separation pa%, in
lieu of reinstate+ent.
14
A di+inution of pa% is pre=udicial to the e+plo%ee and a+ounts to constructive
dis+issal. Constructive dis+issal is an involuntar% resi,nation resultin, in cessation
of work resorted to when continued e+plo%+ent beco+es i+possible, unreasonable
or unlikel%7 when there is a de+otion in rank or a di+inution in pa%7 or when a clear
discri+ination, insensibilit% or disdain b% an e+plo%er beco+es unbearable to an
e+plo%ee.
15
4n !lobe "ele#om$ %n#. v. lorendo-lores,
12
we ruled that where an
e+plo%ee ceases to work due to a de+otion of rank or a di+inution of pa%, an
unreasonable situation arises which creates an adverse workin, environ+ent
renderin, it i+possible for such e+plo%ee to continue workin, for her e+plo%er.
9ence, her severance fro+ the co+pan% was not of her own +akin, and therefore
a+ounted to an ille,al ter+ination of e+plo%+ent.
4n affordin, full protection to labor, this Court +ust ensure e8ual work opportunities
re,ardless of se>, race or creed. Bven as we, in ever% case, atte+pt to carefull%
balance the fra,ile relationship between e+plo%ees and e+plo%ers, we are +indful
of the fact that the polic% of the law is to appl% the .abor Code to a ,reater nu+ber
of e+plo%ees. This would enable e+plo%ees to avail of the benefits accorded to
the+ b% law, in line with the constitutional +andate ,ivin, +a>i+u+ aid and
protection to labor, pro+otin, their welfare and reaffir+in, it as a pri+ar% social
econo+ic force in furtherance of social =ustice and national develop+ent.
+"EREFORE, the petition is GRANTE#. The Decision and Resolution of the Court
of Appeals dated October !, ""4 and October $, ""5, respectivel%, in CA&'.R. (P
)o. $*5#5 areANN(LLE# and SET ASI#E. The Decision of the )ational .abor
Relations Co++ission dated April #5, ""1 in ).RC )CR CA )o. "1$22&",
is REINSTATE#. The case is REMAN#E# to the .abor Arbiter for the
reco+putation of petitioner An,elina -rancisco?s full backwa,es fro+ the ti+e she
was ille,all% ter+inated until the date of finalit% of this decision, and separation pa%
representin, one&half +onth pa% for ever% %ear of service, where a fraction of at
least si> +onths shall be considered as one whole %ear.
SO OR#ERE#.
[G.R. NO. 1380,1 : -u&. 10, 200/]
-OSE ). SON$A, Petitioner, v. ABS*CBN BROA#CASTING
COR!ORATION, Respondent.
# E C I S I O N
CAR!IO, J.:
The Case
:efore this Court is a Petition for Review on Certiorari
#
assailin, the 2 6arch #!!!
Decision

of the Court of Appeals in CA&'.R. (P )o. 4!#!" dis+issin, the petition


filed b% 3ose F. (on<a /(O)GA0 .The Court of Appeals affir+ed the findin,s of the
)ational .abor Relations Co++ission /).RC0, which affir+ed the .abor Arbiters
dis+issal of the case for lack of =urisdiction.
The -acts
4n 6a% #!!4, respondent A:(&C:) :roastin, Corporation /A:(&C:)0 si,ned an
A,ree+ent /A,ree+ent0 with the 6el and 3a% 6ana,e+ent and Develop+ent
Corporation /636DC0 .A:(&C:) was represented b% its corporate officers while
636DC was represented b% (O)GA, as President and 'eneral 6ana,er, and Car+ela
Tian,co /T4A)'CO0, as BDP and Treasurer. Referred to in the A,ree+ent as A'B)T,
636DC a,reed to provide (O)GAs services e>clusivel% to A:(&C:) as talent for
radio and television.The A,ree+ent listed the services (O)GA would render to A:(&
C:), as follows@chanroblesvirtua#awlibrar%
A. Co&host for 6el H 3a% radio pro,ra+, *@"" to #"@"" a.+., 6onda%s to -rida%s7chanroblesvirtuallawlibrar%
b. Co&host for 6el H 3a% television pro,ra+, 5@1" to $@"" p.+., (unda%s.
1
cralawred
A:(&C:) a,reed to pa% for (O)GAs services a +onthl% talent fee of P1#",""" for
the first %ear and P1#$,""" for the second and third %ear of the A,ree+ent.A:(&
C:) would pa% the talent fees on the #"
th
and 5
th
da%s of the +onth.
On # April #!!2, (O)GA wrote a letter to A:(&C:)s President, Bu,enio .ope< 444,
which reads@chanroblesvirtua#awlibrar%
Dear 6r. .ope<,
Ae would like to call %our attention to the A,ree+ent dated 6a% #!!4 entered into
b% %our ,oodself on behalf of A:(&C:) with our co+pan% relative to our talent 3O(B
F. (O)GA.
As %ou are well aware, 6r. (on<a irrevocabl% resi,ned in view of recent events
concernin, his pro,ra+s and career.Ae consider these acts of the station violative
of the A,ree+ent and the station as in breach thereof.4n this connection, we hereb%
serve notice of rescission of said A,ree+ent at our instance effective as of date.
6r. (on<a infor+ed us that he is waivin, and renouncin, recover% of the re+ainin,
a+ount stipulated in para,raph $ of the A,ree+ent but reserves the ri,ht to seek
recover% of the other benefits under said A,ree+ent.
Thank %ou for %our attention.
Der% trul% %ours,
/(,d.0
3O(B F. (O)GA
President and 'en. 6ana,er
4
cralawred
On 1" April #!!2, (O)GA filed a co+plaint a,ainst A:(&C:) before the Depart+ent
of .abor and B+plo%+ent, )ational Capital Re,ion in Iue<on Cit%.(O)GA
co+plained that A:(&C:) did not pa% his salaries, separation pa%, service incentive
leave pa%, #1
th
+onth pa%, si,nin, bonus, travel allowance and a+ounts due under
the B+plo%ees (tock Option Plan /B(OP0.cralawlibrar%
On #" 3ul% #!!2, A:(&C:) filed a 6otion to Dis+iss on the ,round that no
e+plo%er&e+plo%ee relationship e>isted between the parties. (O)GA filed an
Opposition to the +otion on #! 3ul% #!!2.
6eanwhile, A:(&C:) continued to re+it (O)GAs +onthl% talent fees throu,h his
account at PC4:ank, Iue<on Avenue :ranch, Iue<on Cit%.4n 3ul% #!!2, A:(&C:)
opened a new account with the sa+e bank where A:(&C:) deposited (O)GAs
talent fees and other pa%+ents due hi+ under the A,ree+ent.
4n his Order dated Dece+ber #!!2, the .abor Arbiter
5
denied the +otion to
dis+iss and directed the parties to file their respective position papers.The .abor
Arbiter ruled@chanroblesvirtua#awlibrar%
4n this instant case, co+plainant for havin, invoked a clai+ that he was an
e+plo%ee of respondent co+pan% until April #5, #!!2 and that he was not paid
certain clai+s, it is sufficient enou,h as to confer =urisdiction over the instant case
in this Office.And as to whether or not such clai+ would entitle co+plainant to
recover upon the causes of action asserted is a +atter to be resolved onl% after and
as a result of a hearin,.Thus, the respondents plea of lack of e+plo%er&e+plo%ee
relationship +a% be pleaded onl% as a +atter of defense.4t behooves upon it the
dut% to prove that there reall% is no e+plo%er&e+plo%ee relationship between it and
the co+plainant.
The .abor Arbiter then considered the case sub+itted for resolution. The parties
sub+itted their position papers on 4 -ebruar% #!!$.
On ## 6arch #!!$, (O)GA filed a Repl% to Respondents Position Paper with 6otion
to B>pun,e Respondents Anne> 4 and Anne> 5 fro+ the Records.Anne>es 4 and 5
are affidavits of A:(&C:)s witnesses (occoro Didanes and Rolando D. Cru<. These
witnesses stated in their affidavits that the prevailin, practice in the television and
broast industr% is to treat talents like (O)GA as independent contractors.
The .abor Arbiter rendered his Decision dated * 3ul% #!!$ dis+issin, the co+plaint
for lack of =urisdiction.
2
The pertinent parts of the decision read as follows@
> > >
Ahile Philippine =urisprudence has not %et, with certaint%, touched on the true
nature of the contract of a talent, it stands to reason that a talent as above&
described cannot be considered as an e+plo%ee b% reason of the peculiar
circu+stances surroundin, the en,a,e+ent of his services. cra
4t +ust be noted that 01234%5&%&t 6%s .&g%g.' 78 9.s31&'.&t 78 9.%s1& 1:
;5s 3.0u45%9 s<544s %&' t%4.&t %s % T= ;1st %&' % 9%'51 791%st.9.(&45<. %&
19'5&%98 .23418.., ;. 6%s :9.. t1 3.9:192 t;. s.9>50.s ;. u&'.9t11< t1
9.&'.9 5& %0019'%&0. 65t; ;5s 16& st84..The benefits conferred to co+plainant
under the 6a% #!!4 A,ree+ent are certainl% ver% +uch hi,her than those ,enerall%
,iven to e+plo%ees.-or one, co+plainant (on<as +onthl% talent fees a+ount to a
sta,,erin,P1#$,""".6oreover, his en,a,e+ent as a talent was covered b% a specific
contract..ikewise, he was not bound to render ei,ht /*0 hours of work per da% as he
worked onl% for such nu+ber of hours as +a% be necessar%.
The fact that per the 6a% #!!4 A,ree+ent co+plainant was accorded so+e benefits
nor+all% ,iven to an e+plo%ee is inconse8uential.+;%t.>.9 7.&.:5ts
01234%5&%&t .&?18.' %91s. :912 s3.05:50 %g9..2.&t 78 t;. 3%9t5.s %&' &1t
78 9.%s1& 1: .23418.9*.23418.. 9.4%t51&s;53. As correctl% put b% the
respondent,All these benefits are +erel% talent fees and other contractual benefits
and should not be dee+ed as salaries, wa,es andCor other re+uneration accorded
to an e+plo%ee, notwithstandin, the no+enclature appended to these
benefits.Apropos to this is the rule that the ter+ or no+enclature ,iven to a
stipulated benefit is not controllin,, but the intent of the parties to the A,ree+ent
conferrin, such benefit.
T;. :%0t t;%t 01234%5&%&t 6%s 2%'. su7?.0t t1 9.s31&'.&ts Ru4.s %&'
R.gu4%t51&s, 45<.65s., '1.s &1t '.t9%0t :912 t;. %7s.&0. 1: .23418.9*
.23418.. 9.4%t51&s;53.As held b% the (upre+e Court, The line should be drawn
between rules that +erel% serve as ,uidelines towards the achieve+ent of the
+utuall% desired result without dictatin, the +eans or +ethods to be e+plo%ed in
attainin, it, and those that control or fi> the +ethodolo,% and bind or restrict the
part% hired to the use of such +eans.The first, which ai+ onl% to pro+ote the
result, create no e+plo%er&e+plo%ee relationship unlike the second, which address
both the result and the +eans to achieve it./4nsular .ife Assurance Co., .td. v.
).RC, et al., '.R. )o. *44*4, )ove+ber #5, #!*!0.
> > > /&mp'asis supplied0
$
cralawred
(O)GA appealed to the ).RC.On 4 -ebruar% #!!*, the ).RC rendered a Decision
affir+in, the .abor Arbiters decision.(O)GA filed a +otion for reconsideration,
which the ).RC denied in its Resolution dated 1 3ul% #!!*.
On 2 October #!!*, (O)GA filed a special civil action for #ertiorari before the Court
of Appeals assailin, the decision and resolution of the ).RC.On 2 6arch #!!!, the
Court of Appeals rendered a Decision dis+issin, the case.
*
cralawred
9ence, this petition.
The Rulin,s of the ).RC and Court of Appeals
The Court of Appeals affir+ed the ).RCs findin, that no e+plo%er&e+plo%ee
relationship e>isted between (O)GA and A:(&C:). Adoptin, the ).RCs decision,
the appellate court 8uoted the followin, findin,s of the ).RC@chanroblesvirtua#awlibrar%
> > > the 6a% #!!4 A,ree+ent will readil% reveal that 636DC entered into the
contract +erel% as an a,ent of co+plainant (on<a, the principal.:% all indication
and as the law puts it, the act of the a,ent is the act of the principal itself.This fact
is +ade particularl% true in this case, as ad+ittedl% 636DC is a +ana,e+ent
co+pan% devoted e>clusivel% to +ana,in, the careers of 6r. (on<a and his broast
partner, 6rs. Car+ela C. Tian,co./Opposition to 6otion to Dis+iss0
Clearl%, the relations of principal and a,ent onl% accrues between co+plainant
(on<a and 636DC, and not between A:(&C:) and 636DC.This is clear fro+ the
provisions of the 6a% #!!4 A,ree+ent which specificall% referred to 636DC as the
A'B)T.As a +atter of fact, when co+plainant herein unilaterall% rescinded said 6a%
#!!4 A,ree+ent, it was 636DC which issued the notice of rescission in behalf of 6r.
(on<a, who hi+self si,ned the sa+e in his capacit% as President.crvll
6oreover, previous contracts between 6r. (on<a and A:(&C:) reveal the fact that
historicall%, the parties to the said a,ree+ents are A:(&C:) and 6r. (on<a.And it is
onl% in the 6a% #!!4 A,ree+ent, which is the latest A,ree+ent e>ecuted between
A:(&C:) and 6r. (on<a, that 636DC fi,ured in the said A,ree+ent as the a,ent of
6r. (on<a.
Ae find it erroneous to assert that 636DC is a +ere labor&onl% contractor of A:(&
C:) such that there e>istJsK e+plo%er&e+plo%ee relationship between the latter and
6r. (on<a.On the contrar%, Ae find it indubitable, that 636DC is an a,ent, not of
A:(&C:), but of the talentCcontractor 6r. (on<a, as e>pressl% ad+itted b% the latter
and 636DC in the 6a% #!!4 A,ree+ent.
4t +a% not be a+iss to state that =urisdiction over the instant controvers% indeed
belon,s to the re,ular courts, the sa+e bein, in the nature of an action for alle,ed
breach of contractual obli,ation on the part of respondent&appellee.As s8uarel%
apparent fro+ co+plainant&appellants Position Paper, his clai+s for co+pensation
for services, #1
th
+onth pa%, si,nin, bonus and travel allowance a,ainst
respondent&appellee are not based on the .abor Code but rather on the provisions
of the 6a% #!!4 A,ree+ent, while his clai+s for proceeds under (tock Purchase
A,ree+ent are based on the latter.A portion of the Position Paper of co+plainant&
appellant bears perusal@chanroblesvirtua#awlibrar%
Ender Jthe 6a% #!!4 A,ree+entK with respondent A:(&C:), the latter contractuall%
bound itself to pa% co+plainant a si,nin, bonus consistin, of shares of stockswith
-4DB 9E)DRBD T9OE(A)D PB(O( /P5"",""".""0.
(i+ilarl%, co+plainant is also entitled to be paid #1
th
+onth pa% based on an
a+ount not lower than the a+ount he was receivin, prior to effectivit% of /the0
A,ree+ent.
Ender para,raph ! of /the 6a% #!!4 A,ree+ent0, co+plainant is entitled to a
co++utable travel benefit a+ountin, to at least One 9undred -ift% Thousand Pesos
/P#5",""".""0 per %ear.
Thus, it is precisel% because of co+plainant&appellants own reco,nition of the fact
that his contractual relations with A:(&C:) are founded on the )ew Civil Code,
rather than the .abor Code, that instead of +erel% resi,nin, fro+ A:(&C:),
co+plainant&appellant served upon the latter a notice of rescission of A,ree+ent
with the station, per his letter dated April #, #!!2, which asserted that instead of
referrin, to unpaid e+plo%ee benefits, he is waivin, and renouncin, recover% of the
re+ainin, a+ount stipulated in para,raph $ of the A,ree+ent but reserves the ri,ht
to such recover% of the other benefits under said A,ree+ent. /Anne> 1 of the
respondent A:(&C:)s 6otion to Dis+iss dated 3ul% #", #!!20.
Bvidentl%, it is precisel% b% reason of the alle,ed violation of the 6a% #!!4
A,ree+ent andCor the (tock Purchase A,ree+ent b% respondent&appellee that
co+plainant&appellant filed his co+plaint.Co+plainant&appellants clai+s bein,
anchored on the alle,ed breach of contract on the part of respondent&Appellee, the
sa+e can be resolved b% reference to civil law and not to labor law.Conse8uentl%,
the% are within the real+ of civil law and, thus, lie with the re,ular courts.As held in
the case of Dai&Chi Blectronics 6anufacturin, v. Dillara+a, 1* (CRA 2$, #
)ove+ber #!!4, %& %0t51& :19 79.%0; 1: 01&t9%0tu%4 1745g%t51& 5s 5&t95&s50%448
% 05>54 '5s3ut..
!
/&mp'asis supplied0cralawlibrar%
The Court of Appeals ruled that the e>istence of an e+plo%er&e+plo%ee relationship
between (O)GA and A:(&C:) is a factual 8uestion that is within the =urisdiction of
the ).RC to resolve.
#"
A special civil action for #ertiorari e>tends onl% to issues of
want or e>cess of =urisdiction of the ).RC.
##
(uch action cannot cover an in8uir%
into the correctness of the evaluation of the evidence which served as basis of the
).RCs conclusion.
#
The Court of Appeals added that it could not re&e>a+ine the
parties evidence and substitute the factual findin,s of the ).RC with its own.
#1
The 4ssue
4n assailin, the decision of the Court of Appeals, (O)GA contends that@chanroblesvirtua#awlibrar%
T9B COERT O- APPBA.( 'RADB.F BRRBD 4) A--4R64)' T9B ).RC( DBC4(4O)
A)D RB-E(4)' TO -4)D T9AT A) B6P.OFBR&B6P.OFBB RB.AT4O)(94P BL4(TBD
:BTABB) (O)GA A)D A:(&C:), DB(P4TB T9B AB4'9T O- CO)TRO..4)' .AA,
3ER4(PREDB)CB A)D BD4DB)CB TO (EPPORT (EC9 A -4)D4)'.
#4
The Courts Rulin,
Ae affir+ the assailed decision.
)o convincin, reason e>ists to warrant a reversal of the decision of the Court of
Appeals affir+in, the ).RC rulin, which upheld the .abor Arbiters dis+issal of the
case for lack of =urisdiction.
The present controvers% is one of first i+pression.Althou,h Philippine labor laws and
=urisprudence define clearl% the ele+ents of an e+plo%er&e+plo%ee relationship, this
is the first ti+e that the Court will resolve the nature of the relationship between a
television and radio station and one of its talents.There is no case law statin, that a
radio and television pro,ra+ host is an e+plo%ee of the broast station.
The instant case involves bi, na+es in the broast industr%, na+el% 3ose 3a% (on<a,
a known television and radio personalit%, and A:(&C:), one of the bi,,est television
and radio networks in the countr%.
(O)GA contends that the .abor Arbiter has =urisdiction over the case because he
was an e+plo%ee of A:(&C:). On the other hand, A:(&C:) insists that the .abor
Arbiter has no =urisdiction because (O)GA was an independent contractor.
&mplo(ee or %ndependent Contra#tor)
The e>istence of an e+plo%er&e+plo%ee relationship is a 8uestion of fact.Appellate
courts accord the factual findin,s of the .abor Arbiter and the ).RC not onl% respect
but also finalit% when supported b% substantial evidence.
#5
(ubstantial evidence
+eans such relevant evidence as a reasonable +ind +i,ht accept as ade8uate to
support a conclusion.
#2
A part% cannot prove the absence of substantial evidence b%
si+pl% pointin, out that there is contrar% evidence on record, direct or
circu+stantial.The Court does not substitute its own =ud,+ent for that of the
tribunal in deter+inin, where the wei,ht of evidence lies or what evidence is
credible.
#$
cralawred
(O)GA +aintains that all essential ele+ents of an e+plo%er&e+plo%ee relationship
are present in this case. Case law has consistentl% held that the ele+ents of an
e+plo%er&e+plo%ee relationship are@/a0 the selection and en,a,e+ent of the
e+plo%ee7 /b0 the pa%+ent of wa,es7 /c0 the power of dis+issal7 and /d0 the
e+plo%ers power to control the e+plo%ee on the +eans and +ethods b% which the
work is acco+plished.
#*
The last ele+ent, the so&called 01&t914 t.st, is the +ost
i+portant ele+ent.
#!
cralawred
A.Sele#tion and &ngagement of &mplo(ee
A:(&C:) en,a,ed (O)GAs services to co&host its television and radio pro,ra+s
because of (O)GAs peculiar skills, talent and celebrit% status.(O)GA contends that
the discretion used b% respondent in specificall% selectin, and hirin, co+plainant
over other broasters of possibl% si+ilar e>perience and 8ualification as co+plainant
belies respondents clai+ of independent contractorship.crvl#
4ndependent contractors often present the+selves to possess uni8ue skills,
e>pertise or talent to distin,uish the+ fro+ ordinar% e+plo%ees.The specific
selection and hirin, of (O)GA,because of his unique skills, talent and celebrity
status not possessed by ordinary employees, is a circu+stance indicative, but
not conclusive, of an independent contractual relationship.4f (O)GA did not possess
such uni8ue skills, talent and celebrit% status, A:(&C:) would not have entered into
the A,ree+ent with (O)GA but would have hired hi+ throu,h its personnel
depart+ent =ust like an% other e+plo%ee.
4n an% event, the +ethod of selectin, and en,a,in, (O)GA does not conclusivel%
deter+ine his status.Ae +ust consider all the circu+stances of the relationship,
with the control test bein, the +ost i+portant ele+ent.
*.Pa(ment of +ages
A:(&C:) directl% paid (O)GA his +onthl% talent fees with no part of his fees ,oin,
to 636DC. (O)GA asserts that this +ode of fee pa%+ent shows that he was an
e+plo%ee of A:(&C:).(O)GA also points out that A:(&C:) ,ranted hi+ benefits
and privile,es which he would not have en=o%ed if he were trul% the sub=ect of a
valid =ob contract.
All the talent fees and benefits paid to (O)GA were the result of ne,otiations that
led to the A,ree+ent. 4f (O)GA were A:(&C:)s e+plo%ee, there would be no need
for the parties to stipulate on benefits such as (((, 6edicare, > > > and #1
th
+onth
pa%
"
which the law auto+aticall% incorporates into ever% e+plo%er&e+plo%ee
contract.
#
Ahatever benefits (O)GA en=o%ed arose fro+ contract and not because
of an e+plo%er&e+plo%ee relationship.

cralawred
(O)GAs talent fees, a+ountin, to P1#$,""" +onthl% in the second and third %ear,
are so hu,e and out of the ordinar% that the% indicate +ore an independent
contractual relationship rather than an e+plo%er&e+plo%ee relationship.A:(&C:)
a,reed to pa% (O)GA such hu,e talent fees precisel% because of (O)GAs uni8ue
skills, talent and celebrit% status not possessed b% ordinar% e+plo%ees. Obviousl%,
(O)GA actin, alone possessed enou,h bar,ainin, power to de+and and receive
such hu,e talent fees for his services.The power to bar,ain talent fees wa% above
the salar% scales of ordinar% e+plo%ees is a circu+stance indicative, but not
conclusive, of an independent contractual relationship.
The pa%+ent of talent fees directl% to (O)GA and not to 636DC does not ne,ate
the status of (O)GA as an independent contractor. The parties e>pressl% a,reed on
such +ode of pa%+ent.Ender the A,ree+ent, 636DC is the A'B)T of (O)GA, to
who+ 636DC would have to turn over an% talent fee accruin, under the
A,ree+ent.
C.Po,er of Dismissal
-or violation of an% provision of the A,ree+ent, either part% +a%ter+inate their
relationship.(O)GA failed to show that A:(&C:) could ter+inate his services on
,rounds other than breach of contract, such as retrench+ent to prevent losses as
provided under labor laws.
1
cralawred
Durin, the life of the A,ree+ent, A:(&C:) a,reed to pa% (O)GAs talent fees as
lon, as A'B)T and 3a% (on<a shall faithfull% and co+pletel% perfor+ each condition
of this A,ree+ent.
4
Bven if it suffered severe business losses, A:(&C:) could not
retrench (O)GA because A:(&C:) re+ained obli,ated to pa% (O)GAs talent fees
durin, the life of the A,ree+ent.This circu+stance indicates an independent
contractual relationship between (O)GA and A:(&C:).
(O)GA ad+its that even after A:(&C:) ceased broastin, his pro,ra+s, A:(&C:)
still paid hi+ his talent fees.Plainl%, A:(&C:) adhered to its undertakin, in the
A,ree+ent to continue pa%in, (O)GAs talent fees durin, the re+ainin, life of the
A,ree+ent even if A:(&C:) cancelled (O)GAs pro,ra+s throu,h no fault of
(O)GA.
5
cralawred
(O)GA assails the .abor Arbiters interpretation of his rescission of the A,ree+ent
as an ad+ission that he is not an e+plo%ee of A:(&C:).The .abor Arbiter stated
that if it were true that co+plainant was reall% an e+plo%ee, he would +erel%
resi,n, instead. (O)GA did actuall% resi,n fro+ A:(&C:) but he also, as president
of 636DC, rescinded the A,ree+ent.(O)GAs letter clearl% bears this
out.
2
9owever, the +anner b% which (O)GA ter+inated his relationship with A:(&
C:) is i++aterial.Ahether (O)GA rescinded the A,ree+ent or resi,ned fro+ work
does not deter+ine his status as e+plo%ee or independent contractor.
D.Po,er of Control
(ince there is no local precedent on whether a radio and television pro,ra+ host is
an e+plo%ee or an independent contractor, we refer to forei,n case law in anal%<in,
the present case. The Enited (tates Court of Appeals, -irst Circuit, recentl% held
in Alberty-Vlez v. Corporacin De uerto !ico ara "a Difusin blica
#$%!&
$
that a television pro,ra+ host is an independent contractor. Ae 8uote
the followin, findin,s of the E.(. court@chanroblesvirtua#awlibrar%
(everal factors favor classif%in, Albert% as an independent contractor.F59st, %
t.4.>5s51& %0t9.ss 5s % s<544.' 31s5t51& 9.@u595&g t%4.&t %&' t9%5&5&g &1t
%>%54%74. 1&*t;.*?17. > > > 4n this re,ard, Albert% possesses a +asters de,ree in
public co++unications and =ournalis+7 is trained in dance, sin,in,, and +odelin,7
tau,ht with the dra+a depart+ent at the Eniversit% of Puerto Rico7 and acted in
several theater and television productions prior to her affiliation with Desde 6i
Pueblo.S.01&', A47.9t8 391>5'.' t;. t114s %&' 5&st9u2.&t%45t5.s &.0.ss%98
:19 ;.9 t1 3.9:192.(pecificall%, she provided, or obtained sponsors to provide, the
costu+es, =ewelr%, and other i+a,e&related supplies and services necessar% for her
appearance.Albert% disputes that this factor favors independent contractor status
because A4PR provided the e8uip+ent necessar% to tape the show.Albert%s
ar,u+ent is +isplaced.The e8uip+ent necessar% for Albert% to conduct 'er -ob as
host of Desde 6i Pueblo related to her appearance on the show.Others provided
e8uip+ent for fil+in, and producin, the show, but these were not the pri+ar% tools
that Albert% used to perfor+ her particular function.4f we accepted this ar,u+ent,
independent contractors could never work on collaborative pro=ects because other
individuals often provide the e8uip+ent re8uired for different aspects of the
collaboration. > > >
T;59', +I!R 01u4' &1t %ss5g& A47.9t8 619< 5& %''5t51& t1 :5425&g #.s'. M5
!u.741.Albert%s contracts with A4PR specificall% provided that A4PR hired her
professional services as 9ostess for the Pro,ra+ Desde 6i Pueblo.There is no
evidence that A4PR assi,ned Albert% tasks in addition to work related to these
tapin,s.> > >
*
/&mp'asis supplied0cralawlibrar%
Appl%in, the 01&t914 t.st to the present case, we find that (O)GA is not an
e+plo%ee but an independent contractor.The control test is the 21st
52319t%&t test our courts appl% in distin,uishin, an e+plo%ee fro+ an independent
contractor.
!
This test is based on the e>tent of control the hirer e>ercises over a
worker.The ,reater the supervision and control the hirer e>ercises, the +ore likel%
the worker is dee+ed an e+plo%ee. The converse holds true as well the less control
the hirer e>ercises, the +ore likel% the worker is considered an independent
contractor.
1"
cralawred
irst, (O)GA contends that A:(&C:) e>ercised control over the +eans and
+ethods of his work.
(O)GAs ar,u+ent is +isplaced.A:(&C:) en,a,ed (O)GAs services specificall% to
co&host the 6el H 3a% pro,ra+s. A:(&C:) did not assi,n an% other work to
(O)GA.To perfor+ his work, (O)GA onl% needed his skills and talent. 9ow (O)GA
delivered his lines, appeared on television, and sounded on radio were outside A:(&
C:)s control.(O)GA did not have to render ei,ht hours of work per da%.The
A,ree+ent re8uired (O)GA to attend onl% rehearsals and tapin,s of the shows, as
well as pre& and post&production staff +eetin,s.
1#
A:(&C:) could not dictate the
contents of (O)GAs script.9owever, the A,ree+ent prohibited (O)GA fro+
critici<in, in his shows A:(&C:) or its interests.
1
The clear i+plication is that
(O)GA had a free hand on what to sa% or discuss in his shows provided he did not
attack A:(&C:) or its interests.
Ae find that A:(&C:) was not involved in the actual perfor+ance that produced the
finished product of (O)GAs work.
11
A:(&C:) did not instruct (O)GA how to
perfor+ his =ob.A:(&C:) +erel% reserved the ri,ht to +odif% the pro,ra+ for+at
and airti+e schedule for +ore effective pro,ra++in,.
14
A:(&C:)s sole concern was
the 8ualit% of the shows and their standin, in the ratin,s.Clearl%, A:(&C:) did not
e>ercise control over the +eans and +ethods of perfor+ance of (O)GAs work.
(O)GA clai+s that A:(&C:)s power not to broast his shows proves A:(&C:)s
power over the +eans and +ethods of the perfor+ance of his work.Althou,h A:(&
C:) did have the option not to broast (O)GAs show, A:(&C:) was still obli,ated to
pa% (O)GAs talent fees...Thus, even if A:(&C:) was co+pletel% dissatisfied with
the +eans and +ethods of (O)GAs perfor+ance of his work, or even with the
8ualit% or product of his work, A:(&C:) could not dis+iss or even discipline
(O)GA.All that A:(&C:) could do is not to broast (O)GAs show but A:(&C:) +ust
still pa% his talent fees in full.
15
cralawred
Clearl%, A:(&C:)s ri,ht not to broast (O)GAs show, burdened as it was b% the
obli,ation to continue pa%in, in full (O)GAs talent fees, did not a+ount to control
over the +eans and +ethods of the perfor+ance of (O)GAs work.A:(&C:) could
not ter+inate or discipline (O)GA even if the +eans and +ethods of perfor+ance
of his work & how he delivered his lines and appeared on television & did not +eet
A:(&C:)s approval.This proves that A:(&C:)s control was li+ited onl% to the result
of (O)GAs work, whether to broast the final product or not.4n either case, A:(&C:)
+ust still pa% (O)GAs talent fees in full until the e>pir% of the A,ree+ent.
4n Vau'han, et al. v. $arner, et al.,
12
the Enited (tates Circuit Court of Appeals
ruled that vaudeville perfor+ers were independent contractors althou,h the
+ana,e+ent reserved the ri,ht to delete ob=ectionable features in their shows.
(ince the +ana,e+ent did not have control over the +anner of perfor+ance of the
skills of the artists, it could onl% control the result of the work b% deletin,
ob=ectionable features.
1$
cralawred
(O)GA further contends that A:(&C:) e>ercised control over his work b% suppl%in,
all e8uip+ent and crew.)o doubt, A:(&C:) supplied the e8uip+ent, crew and
airti+e needed to broast the 6el H 3a% pro,ra+s.9owever, the e8uip+ent, crew and
airti+e are not the tools and instru+entalities (O)GA needed to perfor+ his =ob.
Ahat (O)GA principall% needed were his talent or skills and the costu+es necessar%
for his appearance.
1*
Bven thou,h A:(&C:) provided (O)GA with the place of work
and the necessar% e8uip+ent, (O)GA was still an independent contractor since
A:(&C:) did not supervise and control hiswork. A:(&C:)s sole concern was for
(O)GA to displa% his talent durin, the airin, of the pro,ra+s.
1!
cralawred
A radio broast specialist who works under +ini+al supervision is an independent
contractor.
4"
(O)GAs work as television and radio pro,ra+ host re8uired special
skills and talent, which (O)GA ad+ittedl% possesses.The records do not show that
A:(&C:) e>ercised an% supervision and control over how (O)GA utili<ed his skills
and talent in his shows.
Se#ond, (O)GA ur,es us to rule that he was A:(&C:)s e+plo%ee because A:(&C:)
sub=ected hi+ to its rules and standards of perfor+ance. (O)GA clai+s that this
indicates A:(&C:)s control not onl% JoverK his +anner of work but also the 8ualit%
of his work.
The A,ree+ent stipulates that (O)GA shall abide with the rules and standards of
perfor+ance01>.95&g t%4.&ts
4#
of A:(&C:). The A,ree+ent does not re8uire
(O)GA to co+pl% with the rules and standards of perfor+ance prescribed for
e+plo%ees of A:(&C:).The code of conduct i+posed on (O)GA under the
A,ree+ent refers to the Television and Radio Code of the 5apisanan n, +,a
:roaster sa Pilipinas /5:P0, which has been adopted b% the CO6PA)F /A:(&C:)0 as
its Code of Bthics.
4
The 5:P code applies to broasters, not to e+plo%ees of radio
and television stations.:roasters are not necessaril% e+plo%ees of radio and
television stations.Clearl%, the rules and standards of perfor+ance referred to in the
A,ree+ent are those applicable to talents and not to e+plo%ees of A:(&C:).
4n an% event, not all rules i+posed b% the hirin, part% on the hired part% indicate
that the latter is an e+plo%ee of the for+er.
41
4n this case, (O)GA failed to show
that these rules controlled his perfor+ance. Ae find that these ,eneral rules are
+erel% gu5'.45&.s towards the achieve+ent of the +utuall% desired result, which
are top&ratin, television and radio pro,ra+s that co+pl% with standards of the
industr%.Ae have ruled that@chanroblesvirtua#awlibrar%
-urther, not ever% for+ of control that a part% reserves to hi+self over the conduct
of the other part% in relation to the services bein, rendered +a% be accorded the
effect of establishin, an e+plo%er&e+plo%ee relationship. The facts of this case fall
s8uarel% with the case of 4nsular .ife Assurance Co., .td. v. ).RC. 4n said case, we
held that@
.o,icall%, the line should be drawn between rules that +erel% serve as ,uidelines
towards the achieve+ent of the +utuall% desired result without dictatin, the +eans
or +ethods to be e+plo%ed in attainin, it, and those that control or fi> the
+ethodolo,% and bind or restrict the part% hired to the use of such +eans. The first,
which ai+ onl% to pro+ote the result, create no e+plo%er&e+plo%ee relationship
unlike the second, which address both the result and the +eans used to achieve
it.
44
cralawred
The Vau'han case also held that one could still be an independent contractor
althou,h the hirer reserved certain supervision to insure the attain+ent of the
desired result.The hirer, however, +ust not deprive the one hired fro+ perfor+in,
his services accordin, to his own initiative.
45
cralawred
Lastl(, (O)GA insists that the e>clusivit% clause in the A,ree+ent is the +ost
e>tre+e for+ of control which A:(&C:) e>ercised over hi+.
This ar,u+ent is futile.:ein, an e>clusive talent does not b% itself +ean that (O)GA
is an e+plo%ee of A:(&C:). Bven an independent contractor can validl% provide his
services e>clusivel% to the hirin, part%. 4n the broast industr%, e>clusivit% is not
necessaril% the sa+e as control.
The hirin, of e>clusive talents is a widespread and accepted practice in the
entertain+ent industr%.
42
This practice is not desi,ned to control the +eans and
+ethods of work of the talent, but si+pl% to protect the invest+ent of the broast
station.The broast station nor+all% spends substantial a+ounts of +one%, ti+e and
effort in buildin, up its talents as well as the pro,ra+s the% appear in and thus
e>pects that said talents re+ain e>clusive with the station for a co++ensurate
period of ti+e.
4$
)or+all%, a +uch hi,her fee is paid to talents who a,ree to work
e>clusivel% for a particular radio or television station.4n short, the hu,e talent fees
partiall% co+pensates for e>clusivit%, as in the present case.
./.DC as Agent of S0N1A
(O)GA protests the .abor Arbiters findin, that he is a talent of 636DC, which
contracted out his services to A:(&C:). The .abor Arbiter ruled that as a talent of
636DC, (O)GA is not an e+plo%ee of A:(&C:).(O)GA insists that 636DC is a
labor&onl% contractor and A:(&C:) is his e+plo%er.
4n a labor&onl% contract, there are three parties involved@/#0 the labor&onl%
contractor7 /0 the e+plo%ee who is ostensibl% under the e+plo% of the labor&onl%
contractor7 and /10 the principal who is dee+ed the real e+plo%er.Ender this
sche+e, t;. 4%719*1&48 01&t9%0t19 5s t;. %g.&t 1: t;. 395&053%4.The law +akes
the principal responsible to the e+plo%ees of the labor&onl% contractor as if the
principal itself directl% hired or e+plo%ed the e+plo%ees.
4*
These circu+stances are
not present in this case.
There are essentiall% onl% two parties involved under the A,ree+ent, na+el%,
(O)GA and A:(&C:). 636DC +erel% acted as (O)GAs a,ent.The A,ree+ent
e>pressl% states that 636DC acted as the A'B)T of (O)GA. The records do not
show that 636DC acted as A:(&C:)s a,ent.636DC, which stands for 6el and 3a%
6ana,e+ent and Develop+ent Corporation, is a corporation or,ani<ed and owned
b% (O)GA and T4A)'CO.The President and 'eneral 6ana,er of 636DC is (O)GA
hi+self.4t is absurd to hold that 636DC, which is owned, controlled, headed and
+ana,ed b% (O)GA, acted as a,ent of A:(&C:) in enterin, into the A,ree+ent
with (O)GA, who hi+self is represented b% 636DC.That would +ake 636DC the
a,ent of both A:(&C:) and (O)GA.
As (O)GA ad+its, 636DC is a +ana,e+ent co+pan% devoted .A04us5>.48 to
+ana,in, the careers of (O)GA and his broast partner, T4A)'CO.636DC is not
en,a,ed in an% other business, not even =ob contractin,.636DC does not have an%
other function apart fro+ actin, as a,ent of (O)GA or T4A)'CO to pro+ote their
careers in the broast and television industr%.
4!
cralawred
Poli#( %nstru#tion No. 23
(O)GA ar,ues that Polic% 4nstruction )o. 4" issued b% then 6inister of .abor :las
Ople on * 3anuar% #!$! finall% settled the status of workers in the broast
industr%.Ender this polic%, the t%pes of e+plo%ees in the broast industr% are the
station and pro,ra+ e+plo%ees.
Polic% 4nstruction )o. 4" is a +ere e>ecutive issuance which does not have the force
and effect of law.There is no le,al presu+ption that Polic% 4nstruction )o. 4"
deter+ines (O)GAs status.A +ere e>ecutive issuance cannot e>clude independent
contractors fro+ the class of service providers to the broast industr%.The
classification of workers in the broast industr% into onl% two ,roups under Polic%
4nstruction )o. 4" is not bindin, on this Court, especiall% when the classification has
no basis either in law or in fact.
Affidavits of A*S-C*Ns +itnesses
(O)GA also faults the .abor Arbiter for ad+ittin, the affidavits of (ocorro Didanes
and Rolando Cru< without ,ivin, his counsel the opportunit% to cross&e>a+ine these
witnesses.(O)GA brands these witnesses as inco+petent to attest on the prevailin,
practice in the radio and television industr%.(O)GA views the affidavits of these
witnesses as +isleadin, and irrelevant.
Ahile (O)GA failed to cross&e>a+ine A:(&C:)s witnesses, he was never prevented
fro+ den%in, or refutin, the alle,ations in the affidavits.The .abor Arbiter has the
discretion whether to conduct a for+al /trial&t%pe0 hearin, after the sub+ission of
the position papers of the parties, thus@chanroblesvirtua#awlibrar%
(ection 1.(ub+ission of Position PapersC6e+orandu+
> > >
These verified position papers shall cover onl% those clai+s and causes of action
raised in the co+plaint e>cludin, those that +a% have been a+icabl% settled, and
shall be acco+panied b% all supportin, docu+ents includin, the affidavits of their
respective witnesses which shall take the place of the latters direct testi+on%.> > >
(ection 4.Deter+ination of )ecessit% of 9earin,. 4++ediatel% after the sub+ission
of the parties of their position papersC+e+orandu+, the .abor Arbiter shall +otu
propio deter+ine whether there is need for a for+al trial or hearin,.At this sta,e,
he +a%, at his discretion and for the purpose of +akin, such deter+ination, ask
clarificator% 8uestions to further elicit facts or infor+ation, includin, but not li+ited
to the subpoena of relevant docu+entar% evidence, if an% fro+ an% part% or
witness.
5"
cralawred
The .abor Arbiter can decide a case based solel% on the position papers and the
supportin, docu+ents without a for+al trial.
5#
The holdin, of a for+al hearin, or
trial is so+ethin, that the parties cannot de+and as a +atter of ri,ht.
5
4f the .abor
Arbiter is confident that he can rel% on the docu+ents before hi+, he cannot be
faulted for not conductin, a for+al trial, unless under the particular circu+stances
of the case, the docu+ents alone are insufficient.The proceedin,s before a .abor
Arbiter are non&liti,ious in nature.(ub=ect to the re8uire+ents of due process, the
technicalities of law and the rules obtainin, in the courts of law do not strictl% appl%
in proceedin,s before a .abor Arbiter.
"alents as %ndependent Contra#tors
A:(&C:) clai+s that there e>ists a prevailin, practice in the broast and
entertain+ent industries to treat talents like (O)GA as independent contractors.
(O)GA ar,ues that if such practice e>ists, it is void for violatin, the ri,ht of labor to
securit% of tenure.
The ri,ht of labor to securit% of tenure as ,uaranteed in the Constitution
51
arises
onl% if there is an e+plo%er&e+plo%ee relationship under labor laws.)ot ever%
perfor+ance of services for a fee creates an e+plo%er&e+plo%ee relationship.To hold
that ever% person who renders services to another for a fee is an e+plo%ee & to ,ive
+eanin, to the securit% of tenure clause & will lead to absurd results.
4ndividuals with special skills, e>pertise or talent en=o% the freedo+ to offer their
services as independent contractors.The ri,ht to life and livelihood ,uarantees this
freedo+ to contract as independent contractors.The ri,ht of labor to securit% of
tenure cannot operate to deprive an individual, possessed with special skills,
e>pertise and talent, of his ri,ht to contract as an independent contractor.An
individual like an artist or talent has a ri,ht to render his services without an% one
controllin, the +eans and +ethods b% which he perfor+s his art or craft.This Court
will not interpret the ri,ht of labor to securit% of tenure to co+pel artists and talents
to render their services onl% as e+plo%ees.4f radio and television pro,ra+ hosts can
render their services onl% as e+plo%ees, the station owners and +ana,ers can
dictate to the radio and television hosts what the% sa% in their shows.This is not
conducive to freedo+ of the press.
Different "a4 "reatment of "alents and *roasters
The )ational 4nternal Revenue Code/)4RC0
54
in relation to Republic Act )o.
$$#2,
55
as a+ended b% Republic Act )o. *4#,
52
treats talents, television and radio
broasters differentl%. Ender the )4RC, these professionals are sub=ect to the #";
value&added ta> /DAT0 on services the% render.B>e+pted fro+ the DAT are those
under an e+plo%er&e+plo%ee relationship.
5$
This different ta> treat+ent accorded to
talents and broasters bolters our conclusion that the% are independent contractors,
provided all the basic ele+ents of a contractual relationship are present as in this
case.
Nature of S0N1As Claims
(O)GA seeks the recover% of alle,edl% unpaid talent fees, #1
th
+onth pa%,
separation pa%, service incentive leave, si,nin, bonus, travel allowance, and
a+ounts due under the B+plo%ee (tock Option Plan. Ae a,ree with the findin,s of
the .abor Arbiter and the Court of Appeals that (O)GAs clai+s are %44 7%s.' 1&
t;. M%8 1BB/ Ag9..2.&t %&' st10< 13t51& 34%&, %&' &1t 1& t;. L%719
C1'.. Clearl%, the present case does not call for an application of the .abor Code
provisions but an interpretation and i+ple+entation of the 6a% #!!4 A,ree+ent. 4n
effect, (O)GAs cause of action is for breach of contract which is intrinsicall% a civil
dispute co,ni<able b% the re,ular courts.
5*
cralawred
+"EREFORE, we DB)F the petition.The assailed Decision of the Court of Appeals
dated 2 6arch #!!! in CA&'.R. (P )o. 4!#!" is A--4R6BD.Costs a,ainst petitioner.
SO OR#ERE#.
[G.R. N1. 1B2,,8 : F.79u%98 1,, 2012]
BITO) -A=IER C#ANILO !. -A=IERD, !ETITIONER, =S. FL) ACE
COR!ORATIONE FLOR#EL)N CASTILLO, RES!ON#ENTS.
# E C I S I O N
MEN#O$A, J.:
This is a petition under Rule 45 of the Rules of Civil Procedure assailin, the 6arch
#*, "#" Decision
J#K
of the Court of Appeals /CA0 and its 3une $, "#" Resolution,
JK
in CA&'.R. (P )o. #"!!$5, which reversed the 6a% *, ""! Decision
J1K
of the
)ational .abor Relations Co++ission /NLRC0 in the case entitled *ito( /avier v. l(
A#e5lordel(n Castillo,
J4K
holdin, that petitioner :ito% 3avier //avier0 was ille,all%
dis+issed fro+ e+plo%+ent and orderin, -l% Ace Corporation /-l% Ace0 to pa%
backwa,es and separation pa% in lieu of reinstate+ent.cralaw
A&t.0.'.&t F%0ts
On 6a% 1, ""*, 3avier filed a co+plaint before the ).RC for underpa%+ent of
salaries and other labor standard benefits. 9e alle,ed that he was an e+plo%ee of
-l% Ace since (epte+ber ""$, perfor+in, various tasks at the respondentMs
warehouse such as cleanin, and arran,in, the canned ite+s before their deliver% to
certain locations, e>cept in instances when he would be ordered to acco+pan% the
co+pan%Ms deliver% vehicles, as pa'inante7 that he reported for work fro+ 6onda%
to (aturda% fro+ $@"" oMclock in the +ornin, to 5@"" oMclock in the afternoon7 that
durin, his e+plo%+ent, he was not issued an identification card and pa%slips b% the
co+pan%7 that on 6a% 2, ""*, he reported for work but he was no lon,er allowed
to enter the co+pan% pre+ises b% the securit% ,uard upon the instruction of Ruben
On, /.r. 0ng0, his superior7
J5K
that after several +inutes of be,,in, to the ,uard to
allow hi+ to enter, he saw On, who+ he approached and asked wh% he was bein,
barred fro+ enterin, the pre+ises7 that On, replied b% sa%in,, N"anungin mo ana6
mo7O
J2K
that he then went ho+e and discussed the +atter with his fa+il%7 that he
discovered that On, had been courtin, his dau,hter Annal%n after the two +et at a
fiesta celebration in 6alabon Cit%7 that Annal%n tried to talk to On, and convince
hi+ to spare her father fro+ trouble but he refused to accede7 that thereafter,
3avier was ter+inated fro+ his e+plo%+ent without notice7 and that he was
neither ,iven the opportunit% to refute the causeCs of his dis+issal fro+ work.
To support his alle,ations, 3avier presented an affidavit of one :en,ie Dalen<uela
who alle,ed that 3avier was a stevedore or pa'inante of -l% Ace fro+ (epte+ber
""$ to 3anuar% ""*. The said affidavit was subscribed before the .abor Arbiter
/LA0.
J$K
-or its part, -l% Ace averred that it was en,a,ed in the business of i+portation and
sales of ,roceries. (o+eti+e in Dece+ber ""$, 3avier was contracted b% its
e+plo%ee, 6r. On,, as e>tra helper on a pa6(a, basis at an a,reed rate of P1"".""
per trip, which was later increased to P15."" in 3anuar% ""*. 6r. On, contracted
3avier rou,hl% 5 to 2 ti+es onl% in a +onth whenever the vehicle of its contracted
hauler, 6il+ar 9aulin, (ervices, was not available. On April 1", ""*, -l% Ace no
lon,er needed the services of 3avier. Den%in, that he was their e+plo%ee, -l% Ace
insisted that there was no ille,al dis+issal.
J*K
-l% Ace sub+itted a cop% of its
a,ree+ent with 6il+ar 9aulin, (ervices and copies of acknowled,+ent receipts
evidencin, pa%+ent to 3avier for his contracted services bearin, the words, Ndail%
+anpower /pa6(a,5pie#e rate pa(0O and the latterMs si,naturesCinitials.
Ru45&g 1: t;. L%719 A975t.9
On )ove+ber *, ""*, the .A dis+issed the co+plaint for lack of +erit on the
,round that 3avier failed to present proof that he was a re,ular e+plo%ee of -l%
Ace. 9e wrote@
Co+plainant has no e+plo%ee 4D showin, his e+plo%+ent with the Respondent nor
an% docu+ent showin, that he received the benefits accorded to re,ular e+plo%ees
of the Respondents. 9is contention that Respondent failed to ,ive hi+ said 4D and
pa%slips i+plies that indeed he was not a re,ular e+plo%ee of -l% Ace considerin,
that co+plainant was a helper and that Respondent co+pan% has contracted a
re,ular truckin, for the deliver% of its products.
Respondent -l% Ace is not en,a,ed in truckin, business but in the i+portation and
sales of ,roceries. (ince there is a re,ular hauler to deliver its products, we ,ive
credence to RespondentsM clai+ that co+plainant was contracted on NpakiaoO basis.
As to the clai+ for underpa%+ent of salaries, the pa%roll presented b% the
Respondents showin, salaries of workers on NpakiaoO basis has evidentiar% wei,ht
because althou,h the si,nature of the co+plainant appearin, thereon are not
unifor+, the% appeared to be his true si,nature.
> > > >
9ence, as co+plainant received the ri,htful salar% as shown b% the above described
pa%rolls, Respondents are not liable for salar% differentials.
J!K
Ru45&g 1: t;. NLRC
On appeal with the ).RC, 3avier was favored. 4t ruled that the .A skirted the
ar,u+ent of 3avier and i++ediatel% concluded that he was not a re,ular e+plo%ee
si+pl% because he failed to present proof. 4t was of the view that a pa6(a,&basis
arran,e+ent did not preclude the e>istence of e+plo%er&e+plo%ee relationship.
NPa%+ent b% result > > > is a +ethod of co+pensation and does not define the
essence of the relation. 4t is a +ere +ethod of co+putin, co+pensation, not a basis
for deter+inin, the e>istence or absence of an e+plo%er&e+plo%ee relationship.
J#"K
O
The ).RC further averred that it did not follow that a worker was a =ob contractor
and not an e+plo%ee, =ust because the work he was doin, was not directl% related
to the e+plo%erMs trade or business or the work +a% be considered as Ne>traO helper
as in this case7 and that the relationship of an e+plo%er and an e+plo%ee was
deter+ined b% law and the sa+e would prevail whatever the parties +a% call it. 4n
this case, the ).RC held that substantial evidence was sufficient basis for =ud,+ent
on the e>istence of the e+plo%er&e+plo%ee relationship. 3avier was a re,ular
e+plo%ee of -l% Ace because there was reasonable connection between the
particular activit% perfor+ed b% the e+plo%ee /as a 7pa'inante80 in relation to the
usual business or trade of the e+plo%er /i+portation, sales and deliver% of
,roceries0. 9e +a% not be considered as an independent contractor because he
could not e>ercise an% =ud,+ent in the deliver% of co+pan% products. 9e was onl%
en,a,ed as a Nhelper.O
-indin, 3avier to be a re,ular e+plo%ee, the ).RC ruled that he was entitled to a
securit% of tenure. -or failin, to present proof of a valid cause for his ter+ination,
-l% Ace was found to be liable for ille,al dis+issal of 3avier who was likewise entitled
to backwa,es and separation pa% in lieu of reinstate+ent. The ).RC thus ordered@
+"EREFORE, pre+ises considered, co+plainantMs appeal is partiall% 'RA)TBD. The
assailed Decision of the labor arbiter is DACATBD and a new one is hereb% entered
holdin, respondent -.F ACB CORPORAT4O) ,uilt% of ille,al dis+issal and non&
pa%+ent of #1th +onth pa%. Conse8uentl%, it is hereb% ordered to pa% co+plainant
DA)4.O N:ito%O 3AD4BR the followin,@
#. :ackwa,es &P45,$$".*1
. (eparation pa%, in lieu of reinstate+ent & *,45".""
3. Enpaid #1th +onth pa% /proportionate0 & 5,211.11
TOTA. & P5!,*54.#2
All other clai+s are dis+issed for lack of +erit.
SO OR#ERE#.
J##K
Ru45&g 1: t;. C1u9t 1: A33.%4s
On 6arch #*, "#", the CA annulled the ).RC findin,s that 3avier was indeed a
for+er e+plo%ee of -l% Ace and reinstated the dis+issal of 3avierMs co+plaint as
ordered b% the .A. The CA e>ercised its authorit% to +ake its own factual
deter+ination anent the issue of the e>istence of an e+plo%er&e+plo%ee
relationship between the parties. Accordin, to the CA@
> > >
4n an ille,al dis+issal case the onus probandi rests on the e+plo%er to prove that
its dis+issal was for a valid cause. 9owever, before a case for ille,al dis+issal can
prosper, an e+plo%er&e+plo%ee relationship +ust first be established. > > > it is
incu+bent upon private respondent to prove the e+plo%ee&e+plo%er relationship b%
substantial evidence.
> > >
4t is incu+bent upon private respondent to prove, b% substantial evidence, that he
is an e+plo%ee of petitioners, but he failed to dischar,e his burden. The non&
issuance of a co+pan%&issued identification card to private respondent supports
petitionersM contention that private respondent was not its e+plo%ee.
J#K
The CA likewise added that 3avierMs failure to present salar% vouchers, pa%slips, or
other pieces of evidence to bolster his contention, pointed to the inescapable
conclusion that he was not an e+plo%ee of -l% Ace. -urther, it found that 3avierMs
work was not necessar% and desirable to the business or trade of the co+pan%, as it
was onl% when there were scheduled deliveries, which a re,ular haulin, service
could not deliver, that -l% Ace would contract the services of 3avier as an e>tra
helper. .astl%, the CA declared that the facts alle,ed b% 3avier did not pass the
Ncontrol test.O
9e contracted work outside the co+pan% pre+ises7 he was not re8uired to observe
definite hours of work7 he was not re8uired to report dail%7 and he was free to
accept other work elsewhere as there was no e>clusivit% of his contracted service to
the co+pan%, the sa+e bein, co&ter+inous with the trip onl%.
J#1K
(ince no
substantial evidence was presented to establish an e+plo%er&e+plo%ee relationship,
the case for ille,al dis+issal could not prosper.
The petitioners +oved for reconsideration, but to no avail.
9ence, this appeal anchored on the followin, ,rounds@
I.
+"ET"ER T"E "ONORABLE CO(RT OF A!!EALS ERRE# IN "OL#ING T"AT
T"E !ETITIONER +AS NOT A REG(LAR EM!LO)EE OF FL) ACE.
II.
+"ET"ER T"E "ONORABLE CO(RT OF A!!EALS ERRE# IN "OL#ING T"AT
T"E !ETITIONER IS NOT ENTITLE# TO "IS MONETAR) CLAIMS.
J#4K
The petitioner contends that other than its bare alle,ations and self&servin,
affidavits of the other e+plo%ees, -l% Ace has nothin, to substantiate its clai+ that
3avier was en,a,ed on apa6(a, basis. Assu+in, that 3avier was indeed hired on
a pa6(a, basis, it does not preclude his re,ular e+plo%+ent with the co+pan%.
Bven the acknowled,+ent receipts bearin, his si,nature and the confir+in, receipt
of his salaries will not show the true nature of his e+plo%+ent as the% do not reflect
the necessar% details of the co++issioned task. :esides, 3avierMs tasks
as pa'inante are related, necessar% and desirable to the line of business b% -l% Ace
which is en,a,ed in the i+portation and sale of ,rocer% ite+s. NOn da%s when there
were no scheduled deliveries, he worked in petitionersM warehouse, arran,in, and
cleanin, the stored cans for deliver% to clients.O
J#5K
6ore i+portantl%, 3avier was
sub=ect to the control and supervision of the co+pan%, as he was +ade to report to
the office fro+ 6onda% to (aturda%, fro+ $@"" oMclock in the +ornin, until 5@""
oMclock in the afternoon. The list of deliverable ,oods, to,ether with the
correspondin, clients and their respective purchases and addresses, would
necessaril% have been prepared b% -l% Ace. Clearl%, he was sub=ected to co+pliance
with co+pan% rules and re,ulations as re,ards workin, hours, deliver% schedule and
output, and his other duties in the warehouse.
J#2K
The petitioner chiefl% relied on C'ave9 v. NLRC$
J#$K
where the Court ruled that
pa%+ent to a worker on a per trip basis is not si,nificant because Nthis is +erel% a
+ethod of co+putin, co+pensation and not a basis for deter+inin, the e>istence of
e+plo%er&e+plo%ee relationship.O 3avier likewise invokes the rule that, Nin
controversies between a laborer and his +aster, > > > doubts reasonabl% arisin,
fro+ the evidence should be resolved in the for+erMs favour. The polic% is reflected
is no less than the Constitution, .abor Code and Civil Code.O
J#*K
Clai+in, to be an e+plo%ee of -l% Ace, petitioner asserts that he was ille,all%
dis+issed b% the latterMs failure to observe substantive and procedural due process.
(ince his dis+issal was not based on an% of the causes reco,ni<ed b% law, and was
i+ple+ented without notice, 3avier is entitled to separation pa% and backwa,es.
4n its Co++ent,
J#!K
-l% Ace insists that there was no substantial evidence to prove
e+plo%er&e+plo%ee relationship. 9avin, a service contract with 6il+ar 9aulin,
(ervices for the purpose of transportin, and deliverin, co+pan% products to
custo+ers, -l% Ace contracted 3avier as an e>tra helper or pa'inante on a +ere Nper
trip basis.O 3avier, who was actuall% a loiterer in the area, onl% acco+panied and
assisted the co+pan% driver when 6il+ar could not deliver or when the e>i,enc% of
e>tra deliveries arises for rou,hl% five to si> ti+es a +onth. :efore +akin, a
deliver%, -l% Ace would turn over to the driver and 3avier the deliver% vehicle with its
loaded co+pan% products. Aith the vehicle and products in their custod%, the driver
and 3avier Nwould leave the co+pan% pre+ises usin, their own +eans, +ethod,
best =ud,+ent and discretion on how to deliver, ti+e to deliver, where and JwhenK
to start, and +anner of deliverin, the products.O
J"K
-l% Ace dis+isses 3avierMs clai+s of e+plo%+ent as baseless assertions. Aside fro+
his bare alle,ations, he presented nothin, to substantiate his status as an
e+plo%ee. N4t is a basic rule of evidence that each part% +ust prove his affir+ative
alle,ation. 4f he clai+s a ri,ht ,ranted b% law, he +ust prove his clai+ b%
co+petent evidence, rel%in, on the stren,th of his own evidence and not upon the
weakness of his opponent.O
J#K
4nvokin, the case of Lope9 v. *odega Cit(,
JK
-l% Ace
insists that in an ille,al dis+issal case, the burden of proof is upon the co+plainant
who clai+s to be an e+plo%ee. 4t is essential that an e+plo%er&e+plo%ee
relationship be proved b% substantial evidence. Thus, it cites@
4n an ille,al dis+issal case, the onus probandi rests on the e+plo%er to prove that
its dis+issal of an e+plo%ee was for a valid cause. 9owever, before a case for ille,al
dis+issal can prosper, an e+plo%er&e+plo%ee relationship +ust first be established.
-l% Ace points out that 3avier +erel% offers factual assertions that he was an
e+plo%ee of -l% Ace, Nwhich are unfortunatel% not supported b% proof, docu+entar%
or otherwise.O
J1K
3avier si+pl% assu+ed that he was an e+plo%ee of -l% Ace, absent
an% co+petent or relevant evidence to support it. N9e perfor+ed his contracted
work outside the pre+ises of the respondent7 he was not even re8uired to report to
work at re,ular hours7 he was not +ade to re,ister his ti+e in and ti+e out ever%
ti+e he was contracted to work7 he was not sub=ected to an% disciplinar% sanction
i+posed to other e+plo%ees for co+pan% violations7 he was not issued a co+pan%
4.D.7 he was not accorded the sa+e benefits ,iven to other e+plo%ees7 he was not
re,istered with the (ocial (ecurit% (%ste+ /SSS0 as petitionerMs e+plo%ee7 and, he
was free to leave, accept and en,a,e in other +eans of livelihood as there is no
e>clusivit% of his contracted services with the petitioner, his services bein, co&
ter+inus with the trip onl%. All these lead to the conclusion that petitioner is not an
e+plo%ee of the respondents.O
J4K
6oreover, -l% Ace clai+s that it had Nno ri,ht to control the result, +eans, +anner
and +ethods b% which 3avier would perfor+ his work or b% which the sa+e is to be
acco+plished.O
J5K
4n other words, 3avier and the co+pan% driver were ,iven a free
hand as to how the% would perfor+ their contracted services and neither were the%
sub=ected to definite hours or condition of work.
-l% Ace likewise clai+s that 3avierMs function as a pa'inante was not directl% related
or necessar% to its principal business of i+portation and sales of ,roceries. Bven
without 3avier, the business could operate its usual course as it did not involve the
business of inland transportation. .astl%, the acknowled,+ent receipts bearin,
3avierMs si,nature and words Npa6iao rate,O referrin, to his earned salaries on a per
trip basis, have evidentiar% wei,ht that the .A correctl% considered in arrivin, at the
conclusion that 3avier was not an e+plo%ee of the co+pan%.
The Court affir+s the assailed CA decision.
4t +ust be noted that the issue of 3avierMs alle,ed ille,al dis+issal is anchored on
the e>istence of an e+plo%er&e+plo%ee relationship between hi+ and -l% Ace. This
is essentiall% a 8uestion of fact. 'enerall%, the Court does not review errors that
raise factual 8uestions. 9owever, when there is conflict a+on, the factual findin,s
of the antecedent decidin, bodies like the .A, the ).RC and the CA, Nit is proper, in
the e>ercise of Our e8uit% =urisdiction, to review and re&evaluate the factual issues
and to look into the records of the case and re&e>a+ine the 8uestioned findin,s.O
J2K

4n dealin, with factual issues in labor cases, Nsubstantial evidence Q that a+ount of
relevant evidence which a reasonable +ind +i,ht accept as ade8uate to =ustif% a
conclusion Q is sufficient.O
J$K
As the records bear out, the .A and the CA found 3avierMs clai+ of e+plo%+ent with
-l% Ace as wantin, and deficient. The Court is constrained to a,ree. Althou,h
(ection #", Rule D44 of the )ew Rules of Procedure of the ).RC
J*K
allows a
rela>ation of the rules of procedure and evidence in labor cases, this rule of
liberalit% does not +ean a co+plete dispensation of proof. .abor officials are
en=oined to use reasonable +eans to ascertain the facts speedil% and ob=ectivel%
with little re,ard to technicalities or for+alities but nowhere in the rules are the%
provided a license to co+pletel% discount evidence, or the lack of it. The 8uantu+ of
proof re8uired, however, +ust still be satisfied. 9ence, Nwhen confronted with
conflictin, versions on factual +atters, it is for the+ in the e>ercise of discretion to
deter+ine which part% deserves credence on the basis of evidence received, sub=ect
onl% to the re8uire+ent that their decision +ust be supported b% substantial
evidence.O
J!K
Accordin,l%, the petitioner needs to show b% substantial evidence that
he was indeed an e+plo%ee of the co+pan% a,ainst which he clai+s ille,al
dis+issal.
B>pectedl%, opposin, parties would stand poles apart and proffer alle,ations as
different as chalk and cheese. 4t is, therefore, incu+bent upon the Court to
deter+ine whether the part% on who+ the burden to prove lies was able to hurdle
the sa+e. N)o particular for+ of evidence is re8uired to prove the e>istence of such
e+plo%er&e+plo%ee relationship. An% co+petent and relevant evidence to prove the
relationship +a% be ad+itted. 9ence, while no particular for+ of evidence is
re8uired, a findin, that such relationship e>ists +ust still rest on so+e substantial
evidence. 6oreover, the substantialit% of the evidence depends on its 8uantitative as
well as its :ualitativeaspects.O
J1"K
Althou,h substantial evidence is not a function of
8uantit% but rather of 8ualit%, the > > > circu+stances of the instant case de+and
that so+ethin, +ore should have been proffered. 9ad there been other proofs of
e+plo%+ent, such as > > > inclusion in petitionerMs pa%roll, or a clear e>ercise of
control, the Court would have affir+ed the findin, of e+plo%er&e+plo%ee
relationship.O
J1#K
4n su+, the rule of thu+b re+ains@ the onus probandi falls on petitioner to establish
or substantiate such clai+ b% the re8uisite 8uantu+ of evidence.
J1K
NAhoever
clai+s entitle+ent to the benefits provided b% law should establish his or her ri,ht
thereto > > >.O
J11K
(adl%, 3avier failed to adduce substantial evidence as basis for the
,rant of relief.
4n this case, the .A and the CA both concluded that 3avier failed to establish his
e+plo%+ent with -l% Ace. :% wa% of evidence on this point, all that 3avier presented
were his self&servin, state+ents purportedl% showin, his activities as an e+plo%ee
of -l% Ace. Clearl%, 3avier failed to pass the substantialit% re8uire+ent to support
his clai+. 9ence, the Court sees no reason to depart fro+ the findin,s of the CA.
Ahile 3avier re+ains fir+ in his position that as an e+plo%ed stevedore of -l% Ace,
he was +ade to work in the co+pan% pre+ises durin, weekda%s arran,in, and
cleanin, ,rocer% ite+s for deliver% to clients, no other proof was sub+itted to fortif%
his clai+. The lone affidavit e>ecuted b% one :en,ie Dalen<uela was unsuccessful in
stren,thenin, 3avierMs cause. 4n said docu+ent, all Dalen<uela attested to was that
he would fre8uentl% see 3avier at the workplace where the latter was also hired as
stevedore.
J14K
Certainl%, in ,au,in, the evidence presented b% 3avier, the Court
cannot i,nore the inescapable conclusion that his +ere presence at the workplace
falls short in provin, e+plo%+ent therein. The supportin, affidavit could have, to an
e>tent, bolstered 3avierMs clai+ of bein, tasked to clean ,rocer% ite+s when there
were no scheduled deliver% trips, but no infor+ation was offered in this sub=ect
si+pl% because the witness had no personal knowled,e of 3avierMs e+plo%+ent
status in the co+pan%. Deril%, the Court cannot accept 3avierMs state+ents, hook,
line and sinker.
The Court is of the considerable view that on 3avier lies the burden to pass the well&
settled tests to deter+ine the e>istence of an e+plo%er&e+plo%ee relationship, vi9@
/#0 the selection and en,a,e+ent of the e+plo%ee7 /0 the pa%+ent of wa,es7 /10
the power of dis+issal7 and /40 the power to control the e+plo%eeMs conduct. Of
these ele+ents, the +ost i+portant criterion is whether the e+plo%er controls or
has reserved the ri,ht to control the e+plo%ee not onl% as to the result of the work
but also as to the +eans and +ethods b% which the result is to be acco+plished.
J15K
4n this case, 3avier was not able to persuade the Court that the above ele+ents
e>ist in his case. 9e could not sub+it co+petent proof that -l% Ace en,a,ed his
services as a re,ular e+plo%ee7 that -l% Ace paid his wa,es as an e+plo%ee, or that
-l% Ace could dictate what his conduct should be while at work. 4n other words,
3avierMs alle,ations did not establish that his relationship with -l% Ace had the
attributes of an e+plo%er&e+plo%ee relationship on the basis of the above&
+entioned four&fold test. Aorse, 3avier was not able to refute -l% AceMs assertion
that it had an a,ree+ent with a haulin, co+pan% to undertake the deliver% of its
,oods. 4t was also bafflin, to reali<e that 3avier did not dispute -l% AceMs denial of
his servicesM e>clusivit% to the co+pan%. 4n short, all that 3avier laid down were bare
alle,ations without corroborative proof.
-l% Ace does not dispute havin, contracted 3avier and paid hi+ on a Nper tripO rate
as a stevedore, albeit on a pa6(a, basis. The Court cannot fail to note that -l% Ace
presented docu+entar% proof that 3avier was indeed paid on a pa6(a, basis per the
acknowled,+ent receipts ad+itted as co+petent evidence b% the .A. Enfortunatel%
for 3avier, his +ere denial of the si,natures affi>ed therein cannot auto+aticall%
swa% us to i,nore the docu+ents because Nfor,er% cannot be presu+ed and +ust
be proved b% clear, positive and convincin, evidence and the burden of proof lies on
the part% alle,in, for,er%.O
J12K
Considerin, the above findin,s, the Court does not see the necessit% to resolve the
second issue presented.
One final note. The CourtMs decision does not contradict the settled rule that
Npa%+ent b% the piece is =ust a +ethod of co+pensation and does not define the
essence of the relation.O
J1$K
Pa%+ent on a piece&rate basis does not ne,ate re,ular
e+plo%+ent. NThe ter+ Rwa,eM is broadl% defined in Article !$ of the .abor Code as
re+uneration or earnin,s, capable of bein, e>pressed in ter+s of +one% whether
fi>ed or ascertained on a ti+e, task, piece or co++ission basis. Pa%+ent b% the
piece is =ust a +ethod of co+pensation and does not define the essence of the
relations. )or does the fact that the petitioner is not covered b% the ((( affect the
e+plo%er&e+plo%ee relationship. 9owever, in deter+inin, whether the relationship
is that of e+plo%er and e+plo%ee or one of an independent contractor, each case
+ust be deter+ined on its own facts and all the features of the relationship are to
be considered.O
J1*K
Enfortunatel% for 3avier, the attendant facts and circu+stances of
the instant case do not provide the Court with sufficient reason to uphold his
clai+ed status as e+plo%ee of -l% Ace.
Ahile the Constitution is co++itted to the polic% of social =ustice and the protection
of the workin, class, it should not be supposed that ever% labor dispute will be
auto+aticall% decided in favor of labor. 6ana,e+ent also has its ri,hts which are
entitled to respect and enforce+ent in the interest of si+ple fair pla%. Out of its
concern for the less privile,ed in life, the Court has inclined, +ore often than not,
toward the worker and upheld his cause in his conflicts with the e+plo%er. (uch
favoritis+, however, has not blinded the Court to the rule that =ustice is in ever%
case for the deservin,, to be dispensed in the li,ht of the established facts and the
applicable law and doctrine.
J1!K
cralaw
+"EREFORE, the petition is #ENIE#. The 6arch #*, "#" Decision of the Court of
Appeals and its 3une $, "#" Resolution, in CA&'.R. (P )o. #"!!$5, are
hereb% AFFIRME#.
SO OR#ERE#.
[G.R. NO. 18,2,1 : O0t17.9 2, 200B]
RA(L G. LOCSIN %&' E##IE B. TOMAF(IN, Petitioners, v. !"ILI!!INE LONG
#ISTANCE TELE!"ONE COM!AN), Respondent.
# E C I S I O N
=ELASCO, -R., J.:
The Case
This Petition for Review on Certiorari under Rule 45 seeks the reversal of the 6a% 2,
""* Decision
#
and )ove+ber 4, ""* Resolution

of the Court of Appeals /CA0 in


CA&'.R. (P )o. !$1!*, entitled Philippine .on, Distance Telephone Co+pan% v.
)ational .abor Relations Co++ission, Raul '. .ocsin and Bddie :. To+a8uin. The
assailed decision set aside the Resolutions of the )ational .abor Relations
Co++ission /).RC0 dated October *, ""5 and Au,ust *, ""2 which in turn
affir+ed the Decision dated -ebruar% #1, ""4 of the .abor Arbiter. The assailed
resolution, on the other hand, denied petitioners? +otion for reconsideration of the
assailed decision.
The -acts
On )ove+ber #, #!!", respondent Philippine .on, Distance Telephone Co+pan%
/P.DT0 and the (ecurit% and (afet% Corporation of the Philippines /((CP0 entered
into a (ecurit% (ervices A,ree+ent
1
/A,ree+ent0 whereb% ((CP would provide
ar+ed securit% ,uards to P.DT to be assi,ned to its various offices.
Pursuant to such a,ree+ent, petitioners Raul .ocsin and Bddie To+a8uin, a+on,
other securit% ,uards, were posted at a P.DT office.
On Au,ust 1", ""#, respondent issued a .etter dated Au,ust 1", ""# ter+inatin,
the A,ree+ent effective October #, ""#.
4
Despite the ter+ination of the A,ree+ent, however, petitioners continued to secure
the pre+ises of their assi,ned office. The% were alle,edl% directed to re+ain at their
post b% representatives of respondent. 4n support of their contention, petitioners
provided the .abor Arbiter with copies of petitioner .ocsin?s pa% slips for the period
of 3anuar% to (epte+ber "".
5
Then, on (epte+ber 1", "", petitioners? services were ter+inated.
Thus, petitioners filed a co+plaint before the .abor Arbiter for ille,al dis+issal and
recover% of +one% clai+s such as overti+e pa%, holida% pa%, pre+iu+ pa% for
holida% and rest da%, service incentive leave pa%, B+er,enc% Cost of .ivin,
Allowance, and +oral and e>e+plar% da+a,es a,ainst P.DT.
The .abor Arbiter rendered a Decision findin, P.DT liable for ille,al dis+issal. 4t was
e>plained in the Decision that petitioners were found to be e+plo%ees of P.DT and
not of ((CP. (uch conclusion was arrived at with the factual findin, that petitioners
continued to serve as ,uards of P.DT?s offices. As such e+plo%ees, petitioners were
entitled to substantive and procedural due process before ter+ination of
e+plo%+ent. The .abor Arbiter held that respondent failed to observe such due
process re8uire+ents. The dispositive portion of the .abor Arbiter?s Decision reads@
A9BRB-ORB, pre+ises considered, =ud,+ent is hereb% rendered orderin,
respondent Philippine .on, Distance and Telephone Co+pan% /P.DT0 to pa%
co+plainants Raul B. .ocsin and Bddie To+a8uin their separation pa% and back
wa,es co+puted as follows@
)A6B (BPARAT4O) PAF :AC5AA'B(
#. Raul B. .ocsin P#$,5""."" P4",!54.2$
. Bddie :. To+a8uin P#$,5""."" P4",!54.2$
P$12,!"!.14
All other clai+s are D4(64((BD for want of factual basis.
.et the co+putation +ade b% the Co+putation and B>a+ination Enit for+ part of
this decision.
SO OR#ERE#.
P.DT appealed the above Decision to the ).RC which rendered a Resolution
affir+in, in toto the Arbiter?s Decision.
Thus, PD.T filed a 6otion for Reconsideration of the ).RC?s Resolution which was
also denied.
Conse8uentl%, P.DT filed a Petition for Certiorari with the CA askin, for the
nullification of the Resolution issued b% the ).RC as well as the .abor Arbiter?s
Decision. The CA rendered the assailed decision ,rantin, P.DT?s petition and
dis+issin, petitioners? co+plaint. The dispositive portion of the CA Decision
provides@
A9BRB-ORB, the instant Petition for Certiorari is 'RA)TBD. The Resolutions dated
October *, ""5 and Au,ust *, ""2 of the )ational .abor Relations Co++ission
are A))E..BD and (BT A(4DB. Private respondents? co+plaint a,ainst Philippine
.on, Distance Telephone Co+pan% is D4(64((BD.
SO OR#ERE#.
The CA applied the four&fold test in order to deter+ine the e>istence of an
e+plo%er&e+plo%ee relationship between the parties but did not find such
relationship. 4t deter+ined that ((CP was not a labor&onl% contractor and was an
independent contractor havin, substantial capital to operate and conduct its own
business. The CA further bolstered its decision b% citin, the A,ree+ent whereb% it
was stipulated that there shall be no e+plo%er&e+plo%ee relationship between the
securit% ,uards and P.DT.
Anent the pa% slips that were presented b% petitioners, the CA noted that those
were issued b% ((CP and not P.DT7 hence, ((CP continued to pa% the salaries of
petitioners after the A,ree+ent. This fact alle,edl% proved that petitioners
continued to be e+plo%ees of ((CP albeit perfor+in, their work at P.DT?s pre+ises.
-ro+ such assailed decision, petitioners filed a +otion for reconsideration which was
denied in the assailed resolution.
9ence, we have this petition.
T;. Issu.s
#. Ahether or not7 co+plainants e>tended services to the respondent for one /#0
%ear fro+ October #, ""#, the effectivit% of the ter+ination of the contract of
co+plainants a,enc% ((CP, up to (epte+ber 1", "", without a renewed contract,
constitutes an e+plo%er&e+plo%ee relationship between respondent and the
co+plainants.
. Ahether or not7 in accordance to the provision of the Article *" of the .abor
Code, co+plainants e>tended services to the respondent for another one /#0 %ear
without a contract be considered as contractual e+plo%+ent.
1. Ahether or not7 in accordance to the provision of the Article *" of the .abor
Code, does co+plainants thirteen /#10 %ears of service to the respondent with
+anifestation to the respondent thirteen /#10 %ears renewal of its securit% contract
with the co+plainant a,enc% ((CP, can be considered onl% as Sseasonal in natureS
or fi>ed as Jspecific pro=ectsK or undertakin,s and its co+pletion or ter+ination can
be dictated as JcontrolledK b% the respondent an%ti+e the% wanted to.
4. Ahether or not7 co+plainants fro+ bein, an alle,ed contractual e+plo%ees of the
respondent for thirteen /#10 %ears as the% were then covered b% a contract,
beco+es re,ular e+plo%ees of the respondent as the one /#0 %ear e>tended
services of the co+plainants were not covered b% a contract, and can be considered
as direct e+plo%+ent pursuant to the provision of the Article *" of the .abor Code.
5. Ahether or not7 the Court of Appeals co++itted ,rave abuse of discretion when
it set aside and JannulledK the labor Jarbiter?sK decision and of the ).RC?s resolution
declarin, the dis+issal of the co+plainant as ille,al.
2
The Court?s Rulin,
This petition is hereb% ,ranted.
An B+plo%er&B+plo%ee
Relationship B>isted :etween the Parties
4t is be%ond cavil that there was no e+plo%er&e+plo%ee relationship between the
parties fro+ the ti+e of petitioners? first assi,n+ent to respondent b% ((CP in #!**
until the alle,ed ter+ination of the A,ree+ent between respondent and ((CP. 4n
fact, this was the conclusion that was reached b% this Court in Abella v. Philippine
.on, Distance Telephone Co+pan%,
$
where we ruled that petitioners therein,
includin, herein petitioners, cannot be considered as e+plo%ees of P.DT. 4t bears
pointin, out that petitioners were a+on, those declared to be e+plo%ees of their
respective securit% a,encies and not of P.DT.
The onl% issue in this case is whether petitioners beca+e e+plo%ees of respondent
after the A,ree+ent between ((CP and respondent was ter+inated.
This +ust be answered in the affir+ative.
)otabl%, respondent does not den% the fact that petitioners re+ained in the
pre+ises of their offices even after the A,ree+ent was ter+inated. And it is this
fact that +ust be e>plained.
To recapitulate, the CA, in renderin, a decision in favor of respondent, found that@
/#0 petitioners failed to prove that ((CP was a labor&onl% contractor7 and /0
petitioners are e+plo%ees of ((CP and not of P.DT.
4n arrivin, at such conclusions, the CA relied on the provisions of the A,ree+ent,
wherein ((CP undertook to suppl% P.DT with the re8uired securit% ,uards, while
furnishin, P.DT with a perfor+ance bond in the a+ount of PhP $"$,""". 6oreover,
the CA ,ave wei,ht to the provision in the A,ree+ent that ((CP warranted that it
Scarr% on an independent business and has substantial capital or invest+ent in the
for+ of e8uip+ent, work pre+ises, and other +aterials which are necessar% in the
conduct of its business.S
-urther, in deter+inin, that no e+plo%er&e+plo%ee relationship e>isted between the
parties, the CA 8uoted the e>press provision of the A,ree+ent, statin, that no
e+plo%er&e+plo%ee relationship e>isted between the parties herein. The CA
disre,arded the pa% slips of .ocsin considerin, that the% were in fact issued b%
((CP and not b% P.DT.
-ro+ the fore,oin, e>planation of the CA, the fact re+ains that petitioners
re+ained at their post after the ter+ination of the A,ree+ent. )otabl%, in its
Co++ent dated 6arch #", ""!,
*
respondent never denied that petitioners re+ained
at their post until (epte+ber 1", "". Ahile respondent denies the alle,ed
circu+stances stated b% petitioners, that the% were told to re+ain at their post b%
respondent?s (ecurit% Depart+ent and that the% were infor+ed b% ((CP Operations
Officer Bduardo 3uliano that their salaries would be coursed throu,h ((CP as per
arran,e+ent with P.DT, it does not state wh% the% were not +ade to vacate their
posts. Respondent said that it did not know wh% petitioners re+ained at their posts.
Rule #1#, (ection 1/%0 of the Rules of Court provides@
(BC. 1. Disputable presumptions. The followin, presu+ptions are satisfactor% if
uncontradicted, but +a% be contradicted and overco+e b% other evidence@
> > >
/%0 That thin,s have happened accordin, to the ordinar% course of nature and the
ordinar% habits of life.
4n the ordinar% course of thin,s, responsible business owners or +ana,ers would
not allow securit% ,uards of an a,enc% with who+ the owners or +ana,ers have
severed ties with to continue to sta% within the business? pre+ises. This is because
upon the ter+ination of the owners? or +ana,ers? a,ree+ent with the securit%
a,enc%, the a,enc%?s undertakin, of liabilit% for an% da+a,e that the securit% ,uard
would cause has alread% been ter+inated. Thus, in the event of an accident or
otherwise da+a,e caused b% such securit% ,uards, it would be the business owners
andCor +ana,ers who would be liable and not the a,enc%. The business owners or
+ana,ers would, therefore, be openin, the+selves up to liabilit% for acts of securit%
,uards over who+ the owners or +ana,ers alle,edl% have no control.
At the ver% least, responsible business owners or +ana,ers would in8uire or learn
wh% such securit% ,uards were re+ainin, at their posts, and would have a clear
understandin, of the circu+stances of the ,uards? sta%. 4t is but lo,ical that
responsible business owners or +ana,ers would be aware of the situation in their
pre+ises.
Ae point out that with respondent?s h%pothesis, it would see+ that ((CP was
pa%in, petitioners? salaries while securin, respondent?s pre+ises despite the
ter+ination of their A,ree+ent. Obviousl%, it would onl% be respondent that would
benefit fro+ such a situation. And it is seriousl% doubtful that a securit% a,enc% that
was established for profit would allow its securit% ,uards to secure respondent?s
pre+ises when the A,ree+ent was alread% ter+inated.
-ro+ the fore,oin, circu+stances, reason dictates that we conclude that petitioners
re+ained at their post under the instructions of respondent. Ae can further
conclude that respondent dictated upon petitioners that the latter perfor+ their
re,ular duties to secure the pre+ises durin, operatin, hours. This, to our +ind and
under the circu+stances, is sufficient to establish the e>istence of an e+plo%er&
e+plo%ee relationship. Certainl%, the facts as narrated b% petitioners are +ore
believable than the irrational denials +ade b% respondent. Thus, we ruled in .ee
Bn, 9on, v. Court of Appeals@
!
Bvidence, to be believed, +ust not onl% proceed fro+ the +outh of a credible
witness, but it +ust be credible in itself & such as the co++on e>perience and
observation of +ankind can approve as probable under the circu+stances. Ae have
no test of the truth of hu+an testi+on%, e>cept its confor+it% to our knowled,e,
observation and e>perience. Ahatever is repu,nant to these belon,s to the
+iraculous and is outside =udicial co,ni<ance /CastaTares v. Court of Appeals, !
(CRA 52* J#!$!K0.
To reiterate, while respondent and ((CP no lon,er had an% le,al relationship with
the ter+ination of the A,ree+ent, petitioners re+ained at their post securin, the
pre+ises of respondent while receivin, their salaries, alle,edl% fro+ ((CP. Clearl%,
such a situation +akes no sense, and the denials proffered b% respondent do not
shed an% li,ht to the situation. 4t is but reasonable to conclude that, with the behest
and, presu+abl%, directive of respondent, petitioners continued with their services.
Bvidentl%, such are indi#ia of control that respondent e>ercised over petitioners.
(uch power of control has been e>plained as the Sri,ht to control not onl% the end
to be achieved but also the +eans to be used in reachin, such end.S
#"
Aith the
conclusion that respondent directed petitioners to re+ain at their posts and
continue with their duties, it is clear that respondent e>ercised the power of control
over the+7 thus, the e>istence of an e+plo%er&e+plo%ee relationship.
4n Ton,ko v. The 6anufacturers .ife 4nsurance Co. /Phils.0 4nc.,
##
we reiterated the
oft repeated rule that control is the +ost i+portant ele+ent in the deter+ination of
the e>istence of an e+plo%er&e+plo%ee relationship@
4n the deter+ination of whether an e+plo%er&e+plo%ee relationship e>ists between
two parties, this Court applies the four&fold test to deter+ine the e>istence of the
ele+ents of such relationship. 4n Pa#ifi# Consultants %nternational Asia$ %n#. v.
S#'onfeld, the Court set out the ele+ents of an e+plo%er&e+plo%ee relationship,
thus@
3urisprudence is fir+l% settled that whenever the e>istence of an e+plo%+ent
relationship is in dispute, four ele+ents constitute the reliable %ardstick@ /a0 the
selection and en,a,e+ent of the e+plo%ee7 /b0 the pa%+ent of wa,es7 /c0 the
power of dis+issal7 and /d0 the e+plo%er?s power to control the e+plo%ee?s
conduct. 4t is the so&called Scontrol testS which constitutes the +ost i+portant inde>
of the e>istence of the e+plo%er&e+plo%ee relationship that is, whether the
e+plo%er controls or has reserved the ri,ht to control the e+plo%ee not onl% as to
the result of the work to be done but also as to the +eans and +ethods b% which
the sa+e is to be acco+plished. (tated otherwise, an e+plo%er&e+plo%ee
relationship e>ists where the person for who+ the services are perfor+ed reserves
the ri,ht to control not onl% the end to be achieved but also the +eans to be used in
reachin, such end.
-urther+ore, Article #"2 of the .abor Code contains a provision on contractors, to
wit@
Art. #"2. Contractor or subcontractor. Ahenever an e+plo%er enters into a contract
with another person for the perfor+ance of the for+er?s work, the e+plo%ees of the
contractor and of the latter?s subcontractor, if an%, shall be paid in accordance with
the provisions of this Code.
4n the event that the contractor or subcontractor fails to pa% the wa,es of his
e+plo%ees in accordance with this Code, the e+plo%er shall be =ointl% and severall%
liable with his contractor or subcontractor to such e+plo%ees to the e>tent of the
work perfor+ed under the contract, in the sa+e +anner and e>tent that he is liable
to e+plo%ees directl% e+plo%ed b% hi+.
The (ecretar% of .abor and B+plo%+ent +a%, b% appropriate re,ulations, restrict or
prohibit the contractin,&out of labor to protect the ri,hts of workers established
under this Code. 4n so prohibitin, or restrictin,, he +a% +ake appropriate
distinctions between labor&onl% contractin, and =ob contractin, as well as
differentiations within these t%pes of contractin, and deter+ine who a+on, the
parties involved shall be considered the e+plo%er for purposes of this Code, to
prevent an% violation or circu+vention of an% provision of this Code.PPPTrPblPU
[G.R. N1. 17B6,2 : M%90; 06, 2012]
!EO!LEGS BROA#CASTING SER=ICE CBOMBO RA#)O !"ILS., INC.D,
!ETITIONER, =S. T"E SECRETAR) OF T"E #E!ARTMENT OF LABOR AN#
EM!LO)MENT, T"E REGIONAL #IRECTOR, #OLE REGION =II, AN#
-AN#ELEON -(E$AN, RES!ON#ENTS.
R E S O L ( T I O N
=ELASCO -R., J.:
4n a Petition for Certiorari under Rule 25, petitioner PeopleMs :roadcastin, (ervice,
4nc. /:o+bo Rad%o Phils., 4nc.0 8uestioned the Decision and Resolution of the Court
of Appeals /CA0 dated October 2, ""2 and 3une 2, ""$, respectivel%, in C.A.
'.R. CB:&(P )o. ""*55.cralaw
Private respondent 3andeleon 3ue<an filed a co+plaint a,ainst petitioner with the
Depart+ent of .abor and B+plo%+ent /DO.B0 Re,ional Office )o. D44, Cebu Cit%, for
ille,al deduction, nonpa%+ent of service incentive leave, #1th +onth pa%, pre+iu+
pa% for holida% and rest da% and ille,al di+inution of benefits, dela%ed pa%+ent of
wa,es and noncovera,e of (((, PA'&4:4' and Philhealth.
J#K
After the conduct of
su++ar% investi,ations, and after the parties sub+itted their position papers, the
DO.B Re,ional Director found that private respondent was an e+plo%ee of
petitioner, and was entitled to his +one% clai+s.
JK
Petitioner sou,ht reconsideration
of the DirectorMs Order, but failed. The Actin, DO.B (ecretar% dis+issed petitionerMs
appeal on the ,round that petitioner sub+itted a Deed of Assi,n+ent of :ank
Deposit instead of postin, a cash or suret% bond. Ahen the +atter was brou,ht
before the CA, where petitioner clai+ed that it had been denied due process, it was
held that petitioner was accorded due process as it had been ,iven the opportunit%
to be heard, and that the DO.B (ecretar% had =urisdiction over the +atter, as the
=urisdictional li+itation i+posed b% Article #! of the .abor Code on the power of
the DO.B (ecretar% under Art. #*/b0 of the Code had been repealed b% Republic
Act )o. /RA0 $$1".
J1K
4n the Decision of this Court, the CA Decision was reversed and set aside, and the
co+plaint a,ainst petitioner was dis+issed. The dispositive portion of the Decision
reads as follows@
+"EREFORE, the petition is GRANTE#. The Decision dated 2 October ""2 and
the Resolution dated 2 3une ""$ of the Court of Appeals in C.A. '.R. CB:&(P )o.
""*55 are RE=ERSE# and SET ASI#E. The Order of the then Actin, (ecretar% of
the Depart+ent of .abor and B+plo%+ent dated $ 3anuar% ""5 den%in,
petitionerMs appeal, and the Orders of the Director, DO.B Re,ional Office )o. D44,
dated 4 6a% ""4 and $ -ebruar% ""4, respectivel%, are ANN(LLE#. The
co+plaint a,ainst petitioner is #ISMISSE#.
J4K
The Court found that there was no e+plo%er&e+plo%ee relationship between
petitioner and private respondent. 4t was held that while the DO.B +a% +ake a
deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship, this function
could not be co&e>tensive with the visitorial and enforce+ent power provided in Art.
#*/b0 of the .abor Code, as a+ended b% RA $$1". The )ational .abor Relations
Co++ission /).RC0 was held to be the pri+ar% a,enc% in deter+inin, the e>istence
of an e+plo%er&e+plo%ee relationship. This was the interpretation of the Court of
the clause Nin cases where the relationship of e+plo%er&e+plo%ee still e>istsO in Art.
#*/b0.
J5K
-ro+ this Decision, the Public Attorne%Ms Office /PAO0 filed a 6otion for Clarification
of Decision /with .eave of Court0. The PAO sou,ht to clarif% as to when the
visitorial and enforce+ent power of the DO.B be not considered as co&e>tensive
with the power to deter+ine the e>istence of an e+plo%er&e+plo%ee relationship.
J2K

4n its Co++ent,
J$K
the DO.B sou,ht clarification as well, as to the e>tent of its
visitorial and enforce+ent power under the .abor Code, as a+ended.
The Court treated the 6otion for Clarification as a second +otion for
reconsideration, ,rantin, said +otion and reinstatin, the petition.
J*K
4t is apparent
that there is a need to delineate the =urisdiction of the DO.B (ecretar% vis&V&vis that
of the ).RC.
Ender Art. #! of the .abor Code, the power of the DO.B and its dul% authori<ed
hearin, officers to hear and decide an% +atter involvin, the recover% of wa,es and
other +onetar% clai+s and benefits was 8ualified b% the proviso that the co+plaint
not include a clai+ for reinstate+ent, or that the a,,re,ate +one% clai+s not
e>ceed PhP 5,""". RA $$1", or an A#t urt'er Strengt'ening t'e Visitorial and
&nfor#ement Po,ers of t'e Se#retar( of Labor, did awa% with the PhP 5,"""
li+itation, allowin, the DO.B (ecretar% to e>ercise its visitorial and enforce+ent
power for clai+s be%ond PhP 5,""". The onl% 8ualification to this e>panded power
of the DO.B was onl% that there still be an e>istin, e+plo%er&e+plo%ee relationship.
4t is conceded that if there is no e+plo%er&e+plo%ee relationship, whether it has
been ter+inated or it has not e>isted fro+ the start, the DO.B has no =urisdiction.
Ender Art. #*/b0 of the .abor Code, as a+ended b% RA $$1", the first sentence
reads, N)otwithstandin, the provisions of Articles #! and #$ of this Code to the
contrar%, and in cases where the relationship of e+plo%er&e+plo%ee still e>ists, the
(ecretar% of .abor and B+plo%+ent or his dul% authori<ed representatives shall
have the power to issue co+pliance orders to ,ive effect to the labor standards
provisions of this Code and other labor le,islation based on the findin,s of labor
e+plo%+ent and enforce+ent officers or industrial safet% en,ineers +ade in the
course of inspection.O 4t is clear and be%ond debate that an e+plo%er&e+plo%ee
relationship +ust e>ist for the e>ercise of the visitorial and enforce+ent power of
the DO.B. The 8uestion now arises, +a% the DO.B +ake a deter+ination of
whether or not an e+plo%er&e+plo%ee relationship e>ists, and if so, to what e>tentP
The first portion of the 8uestion +ust be answered in the affir+ative.
The prior decision of this Court in the present case accepts such answer, but places
a li+itation upon the power of the DO.B, that is, the deter+ination of the e>istence
of an e+plo%er&e+plo%ee relationship cannot be co&e>tensive with the visitorial and
enforce+ent power of the DO.B. :ut even in concedin, the power of the DO.B to
deter+ine the e>istence of an e+plo%er&e+plo%ee relationship, the Court held that
the deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship is still
pri+aril% within the power of the ).RC, that an% findin, b% the DO.B is +erel%
preli+inar%.
This conclusion +ust be revisited.
)o li+itation in the law was placed upon the power of the DO.B to deter+ine the
e>istence of an e+plo%er&e+plo%ee relationship. )o procedure was laid down
where the DO.B would onl% +ake a preli+inar% findin,, that the power was
pri+aril% held b% the ).RC. The law did not sa% that the DO.B would first seek the
).RCMs deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship, or that
should the e>istence of the e+plo%er&e+plo%ee relationship be disputed, the DO.B
would refer the +atter to the ).RC. The DO.B +ust have the power to deter+ine
whether or not an e+plo%er&e+plo%ee relationship e>ists, and fro+ there to decide
whether or not to issue co+pliance orders in accordance with Art. #*/b0 of the
.abor Code, as a+ended b% RA $$1".
The DO.B, in deter+inin, the e>istence of an e+plo%er&e+plo%ee relationship, has
a read% set of ,uidelines to follow, the sa+e ,uide the courts the+selves use. The
ele+ents to deter+ine the e>istence of an e+plo%+ent relationship are@ /#0 the
selection and en,a,e+ent of the e+plo%ee7 /0 the pa%+ent of wa,es7 /10 the
power of dis+issal7 /40 the e+plo%erMs power to control the e+plo%eeMs conduct.
J!K

The use of this test is not solel% li+ited to the ).RC. The DO.B (ecretar%, or his or
her representatives, can utili<e the sa+e test, even in the course of inspection,
+akin, use of the sa+e evidence that would have been presented before the ).RC.
The deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship b% the
DO.B +ust be respected. The e>panded visitorial and enforce+ent power of the
DO.B ,ranted b% RA $$1" would be rendered nu,ator% if the alle,ed e+plo%er
could, b% the si+ple e>pedient of disputin, the e+plo%er&e+plo%ee relationship,
force the referral of the +atter to the ).RC. The Court issued the declaration that
at least a pri+a facie showin, of the absence of an e+plo%er&e+plo%ee relationship
be +ade to oust the DO.B of =urisdiction. :ut it is precisel% the DO.B that will be
faced with that evidence, and it is the DO.B that will wei,h it, to see if the sa+e
does successfull% refute the e>istence of an e+plo%er&e+plo%ee relationship.
4f the DO.B +akes a findin, that there is an e>istin, e+plo%er&e+plo%ee
relationship, it takes co,ni<ance of the +atter, to the e>clusion of the ).RC. The
DO.B would have no =urisdiction onl% if the e+plo%er&e+plo%ee relationship has
alread% been ter+inated, or it appears, upon review, that no e+plo%er&e+plo%ee
relationship e>isted in the first place.
The Court, in li+itin, the power of the DO.B, ,ave the rationale that such li+itation
would eli+inate the prospect of co+petin, conclusions between the DO.B and the
).RC. The prospect of co+petin, conclusions could =ust as well have been
eli+inated b% accordin, respect to the DO.B findin,s, to the e>clusion of the ).RC,
and this Ae believe is the +ore prudent course of action to take.
This is not to sa% that the deter+ination b% the DO.B is be%ond 8uestion or review.
(uffice it to sa%, there are =udicial re+edies such as a petition for certiorari under
Rule 25 that +a% be availed of, should a part% wish to dispute the findin,s of the
DO.B.
4t +ust also be re+e+bered that the power of the DO.B to deter+ine the e>istence
of an e+plo%er&e+plo%ee relationship need not necessaril% result in an affir+ative
findin,. The DO.B +a% well +ake the deter+ination that no e+plo%er&e+plo%ee
relationship e>ists, thus divestin, itself of =urisdiction over the case. 4t +ust not be
precluded fro+ bein, able to reach its own conclusions, not b% the parties, and
certainl% not b% this Court.
Ender Art. #*/b0 of the .abor Code, as a+ended b% RA $$1", the DO.B is full%
e+powered to +ake a deter+ination as to the e>istence of an e+plo%er&e+plo%ee
relationship in the e>ercise of its visitorial and enforce+ent power, sub=ect to =udicial
review, not review b% the ).RC.
There is a view that despite Art. #*/b0 of the .abor Code, as a+ended b% RA $$1",
there is still a threshold a+ount set b% Arts. #! and #$ of the .abor Code when
+one% clai+s are involved, i.e., that if it is for PhP 5,""" and below, the =urisdiction
is with the re,ional director of the DO.B, under Art. #!, and if the a+ount involved
e>ceeds PhP 5,""", the =urisdiction is with the labor arbiter, under Art. #$. The
view states that despite the wordin, of Art. #*/b0, this would onl% appl% in the
course of re,ular inspections undertaken b% the DO.B, as differentiated fro+ cases
under Arts. #! and #$, which ori,inate fro+ co+plaints. There are several cases,
however, where the Court has ruled that Art. #*/b0 has been a+ended to e>pand
the powers of the DO.B (ecretar% and his dul% authori<ed representatives b% RA
$$1". 4n these cases, the Court resolved that the DO.B had the =urisdiction,
despite the a+ount of the +one% clai+s involved. -urther+ore, in these cases, the
inspection held b% the DO.B re,ional director was pro+pted specificall% b% a
co+plaint. Therefore, the initiation of a case throu,h a co+plaint does not divest
the DO.B (ecretar% or his dul% authori<ed representative of =urisdiction under Art.
#*/b0.
To recapitulate, if a co+plaint is brou,ht before the DO.B to ,ive effect to the labor
standards provisions of the .abor Code or other labor le,islation, and there is a
findin, b% the DO.B that there is an e>istin, e+plo%er&e+plo%ee relationship, the
DO.B e>ercises =urisdiction to the e>clusion of the ).RC. 4f the DO.B finds that
there is no e+plo%er&e+plo%ee relationship, the =urisdiction is properl% with the
).RC. 4f a co+plaint is filed with the DO.B, and it is acco+panied b% a clai+ for
reinstate+ent, the =urisdiction is properl% with the .abor Arbiter, under Art. #$/10
of the .abor Code, which provides that the .abor Arbiter has ori,inal and e>clusive
=urisdiction over those cases involvin, wa,es, rates of pa%, hours of work, and other
ter+s and conditions of e+plo%+ent, if acco+panied b% a clai+ for reinstate+ent.
4f a co+plaint is filed with the ).RC, and there is still an e>istin, e+plo%er&
e+plo%ee relationship, the =urisdiction is properl% with the DO.B. The findin,s of
the DO.B, however, +a% still be 8uestioned throu,h a petition for certiorari under
Rule 25 of the Rules of Court.
4n the present case, the findin, of the DO.B Re,ional Director that there was an
e+plo%er&e+plo%ee relationship has been sub=ected to review b% this Court, with
the findin, bein, that there was no e+plo%er&e+plo%ee relationship between
petitioner and private respondent, based on the evidence presented. Private
respondent presented self&servin, alle,ations as well as self&defeatin, evidence.
J#"K

The findin,s of the Re,ional Director were not based on substantial evidence, and
private respondent failed to prove the e>istence of an e+plo%er&e+plo%ee
relationship. The DO.B had no =urisdiction over the case, as there was no
e+plo%er&e+plo%ee relationship present. Thus, the dis+issal of the co+plaint
a,ainst petitioner is proper.cralaw
+"EREFORE, the Decision of this Court in '.R. )o. #$!25 is hereb% AFFIRME#,
with theMO#IFICATION that in the e>ercise of the DO.BMs visitorial and
enforce+ent power, the .abor (ecretar% or the latterMs authori<ed representative
shall have the power to deter+ine the e>istence of an e+plo%er&e+plo%ee
relationship, to the e>clusion of the ).RC.
SO OR#ERE#.
[G.R. N1. 18/88, : M%90; 07, 2012]
ERNESTO G. )MBONG, !ETITIONER, =S. ABS*CBN BROA#CASTING
COR!ORATION, =ENERAN#A S) AN# #ANTE L($ON, RES!ON#ENTS.
# E C I S I O N
=ILLARAMA, -R., J.:
:efore us is a Rule 45 Petition seekin, to set aside the Au,ust , ""$
Decision
J#K
and (epte+ber #*, ""* Resolution
JK
of the Court of Appeals /CA0 in CA&
'.R. (P )o. *2"2 declarin, petitioner to have resi,ned fro+ work and not ille,all%
dis+issed.cralaw
The antecedent facts follow@
Petitioner Brnesto '. F+bon, started workin, for A:(&C:) :roadcastin,
Corporation /A:(&C:)0 in #!!1 at its re,ional station in Cebu as a television talent,
co&anchorin, ;o( !ising and TD Patrol Cebu. 9is stint in A:(&C:) later e>tended to
radio when A:(&C:) Cebu launched its A6 station DFA: in #!!5 where he worked
as dra+a and voice talent, spinner, scriptwriter and public affairs pro,ra+ anchor.
.ike F+bon,, .eandro Patalin,hu, also worked for A:(&C:) Cebu. (tartin, #!!5,
he worked as talent, director and scriptwriter for various radio pro,ra+s aired over
DFA:.
On 3anuar% #, #!!2, the A:(&C:) 9ead Office in 6anila issued Polic% )o. 9R&BR&
"#2 or the NPolic% on B+plo%ees (eekin, Public Office.O The pertinent portions read@
#. A&8 .23418.. 6;1 5&t.&'s t1 9u& :19 %&8 3u7450 1::50. 31s5t51&,
2ust :54. ;5sE;.9 4.tt.9 1: 9.s5g&%t51&, at least thirt% /1"0 da%s prior to
the official filin, of the certificate of candidac% either for national or local
election.
> > > >
1. -urther, %&8 .23418.. 6;1 5&t.&'s t1 ?15& % 3145t50%4 g91u3E3%9t8 19
.>.& 65t; &1 3145t50%4 %::545%t51& 7ut 6;1 5&t.&'s t1 13.&48 %&'
%gg9.ss5>.48 0%23%5g& :19 % 0%&'5'%t. 19 g91u3 1: 0%&'5'%t.s /e.,.
publicl% speakin,Cendorsin, candidate, recruitin, ca+pai,n workers,
etc.0 2ust :54. % 9.@u.st :19 4.%>. 1: %7s.&0. su7?.0t t1
2%&%g.2.&tGs %3391>%4. -or this particular reason, the e+plo%ee should
file the leave re8uest at least thirt% /1"0 da%s prior to the start of the
planned leave period.
> > > >
J1K
JB+phasis and underscorin, supplied.K
:ecause of the i+pendin, 6a% #!!* elections and based on his i++ediate
recollection of the polic% at that ti+e, Dante .u<on, Assistant (tation 6ana,er of
DFA: issued the followin, +e+orandu+@
TO @ A.. CO)CBR)BD
-RO6 @ DA)TB .EGO)
DATB @ 6ARC9 5, #!!*
(E:3BCT @ A( (TATBD
Please be infor+ed that per co+pan% polic%, %&8 .23418..Et%4.&t 6;1 6%&ts t1
9u& :19 %&8 31s5t51& 5& t;. 0125&g .4.0t51& 6544 ;%>. t1 :54. % 4.%>. 1:
%7s.&0. t;. 212.&t ;.Es;. :54.s ;5sE;.9 0.9t5:50%t. 1: 0%&'5'%08.
The services rendered b% the concerned e+plo%eeCtalent to this co+pan% will then
be te+poraril% suspended for the entire ca+pai,nCelection period.
-or strict co+pliance.
J4K
JB+phasis and underscorin, supplied.K
.u<on, however, ad+itted that upon double&checkin, of the e>act te>t of the polic%
and subse8uent confir+ation with the A:(&C:) 9ead Office, he saw that the polic%
actuall% re8uired suspension for those who intend to ca+pai,n for a political part%
or candidate and resi,nation for those who will actuall% run in the elections.
J5K
After the issuance of the 6arch 5, #!!* 6e+orandu+, F+bon, ,ot in touch with
.u<on. .u<on clai+s that F+bon, approached hi+ and told hi+ that he would leave
radio for a couple of +onths because he will ca+pai,n for the ad+inistration ticket.
4t was onl% after the elections that the% found out that F+bon, actuall% ran for
public office hi+self at the eleventh hour. F+bon,, on the other hand, clai+s that
in accordance with the 6arch 5, #!!* 6e+orandu+, he infor+ed .u<on throu,h a
letter that he would take a few +onths leave of absence fro+ 6arch *, #!!* to 6a%
#*, #!!* since he was runnin, for councilor of .apu&.apu Cit%.
As re,ards Patalin,hu,, Patalin,hu, approached .u<on and advised hi+ that he will
run as councilor for )a,a, Cebu. Accordin, to .u<on, he clarified to Patalin,hu,
that he will be considered resi,ned and not =ust on leave once he files a certificate
of candidac%. Thus, Patalin,hu, wrote .u<on the followin, letter on April #1, #!!*@
Dear 6r. .u<on,
4M+ sub+ittin, to %ou +% letter of resi,nation as %our Dra+a Production Chief and
Talent due to %our co+pan%Ms polic% that ever% person connected to A:(&C:) that
should seek an elected position in the ,overn+ent will be forced to resi,ned /sic0
fro+ his position. (o herewith 4M+ sub+ittin, +% resi,nation with a hard heart.
:ut 4M+ still hopin, to be connected a,ain with %our presti,ious co+pan% after the
electionJsK should %ou feel that 4M+ still an asset to %our dra+a production
depart+ent. 4M+ lookin, forward to that da% and 4M+ ver% happ% and proud that 4
have served for two and a half %ears the +ost stable and the +ost presti,ious Radio
and TD )etwork in the Philippines.
As a friendJ,K wish +e luck and Pra% for +e. Thank %ou.
Der% Trul% Fours,
/(,d.0
.eandro N:o%O Patalin,hu,
J2K
Enfortunatel%, both F+bon, and Patalin,hu, lost in the 6a% #!!* elections.
.ater, F+bon, and Patalin,hu, both tried to co+e back to A:(&C:) Cebu.
Accordin, to .u<on, he infor+ed the+ that the% cannot work there an%+ore
because of co+pan% polic%. This was stressed even in subse8uent +eetin,s and
the% were told that the co+pan% was not allowin, an% e>ceptions. A:(&C:),
however, a,reed out of pure liberalit% to ,ive the+ a chance to wind up their
participation in the radio dra+a, Nagbabagang Langit, since it was ratin, well and to
avoid an abrupt endin,. The a,reed windin,&up, however, dra,,ed on for so lon,
pro+ptin, .u<on to issue to F+bon, the followin, +e+orandu+ dated (epte+ber
#4, #!!*@
TO @ )B(TOR F6:O)'
-RO6 @ DA)TB .EGO)
(E:3BCT @ A( (TATBD
DATB @ #4 (BPT. #!!*
Please be re+inded that %our services as dra+a talent had alread% been
auto+aticall% ter+inated when %ou ran for a local ,overn+ent position last election.
The 6ana,e+ent however ,ave %ou +ore than enou,h ti+e to end %our dra+a
participation and other involve+ent with the dra+a depart+ent.
4t has been decided therefore that all %our dra+a participation shall be ter+inated
effective i++ediatel%. 9owever, %our involve+ent as dra+a spinnerCnarrator of the
dra+a N)A':AJ:AK'A)' .A)'4TO continues until its writerCdirector 6r. .eandro
Patalin,hu, wraps it up one week upon receipt of a separate +e+o issued to hi+.
J$K
F+bon, in contrast contended that after the e>piration of his leave of absence, he
reported back to work as a re,ular talent and in fact continued to receive his
salar%. On (epte+ber #4, #!!*, he received a +e+orandu+ statin, that his
services are bein, ter+inated i++ediatel%, +uch to his surprise. Thus, he filed an
ille,al dis+issal co+plaint
J*K
a,ainst A:(&C:), .u<on and DFA: (tation 6ana,er
Deneranda (%. 9e ar,ued that the ,round cited b% A:(&C:) for his dis+issal was
not a+on, those enu+erated in the .abor Code, as a+ended. And even ,rantin,
without ad+ittin, the e>istence of the co+pan% polic% supposed to have been
violated, F+bon, averred that it was necessar% that the co+pan% polic% +eet
certain re8uire+ents before willful disobedience of the polic% +a% constitute a =ust
cause for ter+ination. F+bon, further ar,ued that the co+pan% polic% violates his
constitutional ri,ht to suffra,e.
J!K
Patalin,hu, likewise filed an ille,al dis+issal co+plaint
J#"K
a,ainst A:(&C:).
A:(&C:) pra%ed for the dis+issal of the co+plaints ar,uin, that there is no
e+plo%er&e+plo%ee relationship between the co+pan% and F+bon, and
Patalin,hu,. A:(&C:) contended that the% are not e+plo%ees but talents as
evidenced b% their talent contracts. 9owever, notwithstandin, their status, A:(&
C:) has a standin, polic% on persons connected with the co+pan% whenever the%
will run for public office.
J##K
On 3ul% #4, #!!!, the .abor Arbiter rendered a decision
J#K
findin, the dis+issal of
F+bon, and Patalin,hu, ille,al, thus@
A9BRB-ORB, in the li,ht of the fore,oin,, =ud,+ent is rendered findin, the
dis+issal of the two co+plainants ille,al. An order is issued directin, respondent
A:(J&KC:) to i++ediatel% reinstate co+plainants to their for+er positions without
loss of seniorit% ri,hts plus the pa%+ent of backwa,es in the a+ount of
P"","""."" to each co+plainant.
All other clai+s are dis+issed.
SO OR#ERE#.
[13]
The .abor Arbiter found that there e>ists an e+plo%er&e+plo%ee relationship
between A:(&C:) and F+bon, and Patalin,hu, considerin, the stipulations in their
appoint+ent lettersCtalent contracts. The .abor Arbiter noted particularl% that the
appoint+ent lettersCtalent contracts i+posed conditions in the perfor+ance of their
work, specificall% on attendance and punctualit%, which effectivel% placed the+
under the control of A:(&C:). The .abor Arbiter likewise ruled that althou,h the
sub=ect co+pan% polic% is reasonable and not contrar% to law, the sa+e was not
+ade known to F+bon, and Patalin,hu, and in fact was superseded b% another one
e+bodied in the 6arch 5, #!!* 6e+orandu+ issued b% .u<on. Thus, there is no
valid or authori<ed cause in ter+inatin, F+bon, and Patalin,hu, fro+ their
e+plo%+ent.
4n its +e+orandu+ of appeal
J#4K
before the )ational .abor Relations Co++ission
/).RC0, A:(&C:) contended that the .abor Arbiter has no =urisdiction over the case
because there is no e+plo%er&e+plo%ee relationship between the co+pan% and
F+bon, and Patalin,hu,, and that (% and .u<on +istakenl% assu+ed that
F+bon, and Patalin,hu, could =ust file a leave of absence since the% are onl%
talents and not e+plo%ees. 4n its (upple+ental Appeal,
J#5K
A:(&C:) insisted that
F+bon, and Patalin,hu, were en,a,ed as radio talents for DFA: dra+as and
personalit% pro,ra+s and their contract is one between a self&e+plo%ed contractor
and the hirin, part% which is a standard practice in the broadcastin, industr%. 4t
also ar,ued that the .abor Arbiter should not have +ade +uch of the provisions on
F+bon,Ms attendance and punctualit% since such re8uire+ent is a dictate of the
pro,ra++in, of the station, the slatin, of shows at re,ular ti+e slots, and
availabilit% of recordin, studios Q not an atte+pt to e>ercise control over the
+anner of his perfor+ance of the contracted anchor work within his scheduled spot
on air. As for the pronounce+ent that the co+pan% polic% has alread% been
superseded b% the 6arch 5, #!!* 6e+orandu+ issued b% .u<on, the latter alread%
clarified that it was the ver% polic% he sou,ht to enforce. This +atter was rela%ed
b% .u<on to Patalin,hu, when the latter disclosed his plans to =oin the #!!*
elections while F+bon, onl% infor+ed the co+pan% that he was ca+pai,nin, for the
ad+inistration ticket and the co+pan% had no inklin, that he will actuall% run until
the issue was alread% +oot and acade+ic. A:(&C:) further contended that
F+bon, and Patalin,hu,Ms Nreinstate+entO is le,all% and ph%sicall% i+possible as
the talent positions the% vacated no lon,er e>ist. )either is there basis for the
award of back wa,es since the% were not earnin, a +onthl% salar% but paid talent
fees on a per productionCper script basis. Attached to the (upple+ental Appeal is a
(worn (tate+ent
J#2K
of .u<on.
On 6arch *, ""4, the ).RC rendered a decision
J#$K
+odif%in, the labor arbiterMs
decision. Thefallo of the ).RC decision reads@
A9BRB-ORB, pre+ises considered, the decision of .abor Arbiter )icasio C. Aninon
dated #4 3ul% #!!! is 6OD4-4BD, to wit@
Orderin, respondent A:(&C:) to reinstate co+plainant Brnesto '. F+bon, and to
pa% his full backwa,es co+puted fro+ #5 (epte+ber #!!* up to the ti+e of his
actual reinstate+ent.
SO OR#ERE#.
[18]
The ).RC dis+issed A:(&C:)Ms (upple+ental Appeal for bein, filed out of ti+e.
The ).RC ruled that to entertain the sa+e would be to allow the parties to sub+it
their appeal on piece+eal basis, which is contrar% to the a,enc%Ms dut% to facilitate
speed% disposition of cases. The ).RC also held that A:(&C:) wielded the power of
control over F+bon, and Patalin,hu,, thereb% provin, the e>istence of an
e+plo%er&e+plo%ee relationship between the+.
As to the issue of whether the% were ille,all% dis+issed, the ).RC treated their
cases differentl%. 4n the case of Patalin,hu,, it found that he voluntaril% resi,ned
fro+ e+plo%+ent on April #, #!!* when he sub+itted his resi,nation letter. The
).RC noted that althou,h the tenor of the resi,nation letter is so+ewhat
involuntar%, he knew that it is the polic% of the co+pan% that ever% person
connected therewith should resi,n fro+ his e+plo%+ent if he seeks an elected
position in the ,overn+ent. As to F+bon,, however, the ).RC ruled otherwise. 4t
ruled that the 6arch 5, #!!* 6e+orandu+ +erel% states that an e+plo%ee who
seeks an% elected position in the ,overn+ent will onl% +erit the te+porar%
suspension of his services. 4t held that under the principle of social =ustice, the
6arch 5, #!!* 6e+orandu+ shall prevail and A:(&C:) is estopped fro+ enforcin,
the (epte+ber #4, #!!* +e+orandu+ issued to F+bon, statin, that his services
had been auto+aticall% ter+inated when he ran for an elective position.
A:(&C:) +oved to reconsider the ).RC decision, but the sa+e was denied in a
Resolution dated 3une #, ""4.
J#!K
4+putin, ,rave abuse of discretion on the ).RC, A:(&C:) filed a petition for
certiorari
J"K
before the CA alle,in, that@
4.
RB(PO)DB)T ).RC CO664TTBD A 'RADB A:E(B O- D4(CRBT4O) A)D (BR4OE(.F
64(APPRBC4ATBD T9B -ACT( 4) )OT 9O.D4)' T9AT RB(PO)DB)T F6:O)' 4( A
-RBB.A)CB RAD4O TA.B)T A)D 6BD4A PRACT4T4O)BRW)OT A NRB'E.AR
B6P.OFBBO O- PBT4T4O)BRWTO A9O6 CBRTA4) PRODECT4O) AOR5 9AD :BB)
OET(OERCBD :F A:(&C:) CB:E E)DBR A) 4)DBPB)DB)T CO)TRACTOR(94P
(4TEAT4O), T9E( RB)DBR4)' T9B .A:OR COERT( A4T9OET 3ER4(D4CT4O) ODBR
T9B CA(B 4) T9B A:(B)CB O- B6P.OF6B)T RB.AT4O)( :BTABB) T9B PART4B(.
44.
RB(PO)DB)T ).RC CO664TTBD A 'RADB A:E(B O- D4(CRBT4O) 4) DBC.AR4)'
RB(PO)DB)T F6:O)' TO :B A RB'E.AR B6P.OFBB O- PBT4T4O)BR A( TO
CRBATB A CO)TRACTEA. B6P.OF6B)T RB.AT4O) :BTABB) T9B6 A9B) )O)B
BL4(T( OR 9AD :BB) A'RBBD EPO) OR OT9BRA4(B 4)TB)DBD :F T9B PART4B(.
444.
BDB) A((E64)' T9B A..B'BD B6P.OF6B)T RB.AT4O) TO BL4(T -OR T9B (A5B
O- AR'E6B)T, RB(PO)DB)T ).RC 4) A)F CA(B CO664TTBD A 'RADB A:E(B O-
D4(CRBT4O) 4) )OT (464.AR.F EP9O.D4)' A)D APP.F4)' CO6PA)F PO.4CF )O.
9R&BR&"#2 4) T9B CA(B O- RB(PO)DB)T F6:O)' A)D DBB64)' 946 A(
RB(4')BD A)D D4(IEA.4-4BD -RO6 -ERT9BR B)'A'B6B)T A( A RAD4O TA.B)T
4) A:(&C:) CB:E A( A CO)(BIEB)CB O- 94( CA)D4DACF 4) T9B #!!*
B.BCT4O)(, A( RB(PO)DB)T ).RC 9AD DO)B 4) T9B CA(B O- PATA.4)'9E'.
4D.
RB(PO)DB)T ).RC CO664TTBD A 'RADB A:E(B O- D4(CRBT4O) A)D DB)4BD
DEB PROCB(( TO PBT4T4O)BR 4) RB-E(4)' TO CO)(4DBR 4T( (EPP.B6B)TA.
APPBA., DATBD OCTO:BR #*, #!!!, N-OR :B4)' -4.BD OET O- T46BO
CO)(4DBR4)' T9AT T9B -4.4)' O- (EC9 A P.BAD4)' 4( )OT 4) A)F CA(B
PRO(CR4:BD A)D RB(PO)DB)T ).RC 4( AET9OR4GBD TO CO)(4DBR ADD4T4O)A.
BD4DB)CB O) APPBA.7 6ORBODBR, TBC9)4CA. RE.B( O- BD4DB)CB DO )OT
APP.F 4) .A:OR CA(B(.
D.
RB(PO)DB)T ).RC CO664TTBD A 'RADB A:E(B O- D4(CRBT4O) 4) 'RA)T4)'
T9B RB.4B- O- RB4)(TATB6B)T A)D :AC5AA'B( TO RB(PO)DB)T F6:O)'
(4)CB 9B )BDBR OCCEP4BD A)F NRB'E.ARO PO(4T4O) 4) PBT4T4O)BR -RO6
A94C9 9B COE.D 9ADB :BB) N4..B'A..F D4(64((BD,O )OR ARB A)F O- T9B
RAD4O PRODECT4O)( 4) A94C9 9B 9AD DO)B TA.B)T AOR5 -OR PBT4T4O)BR
(T4.. BL4(T4)'. 4)DBBD, T9BRB 4( )O :A(4( A9AT(OBDBR -OR T9B AAARD O-
:AC5AA'B( TO RB(PO)DB)T F6:O)' 4) T9B A6OE)T O- P"",""".""
CO)(4DBR4)' T9AT, A( (9OA) :F T9B E)CO)TRODBRTBD BD4DB)CB, 9B AA(
)OT BAR)4)' A 6O)T9.F N(A.ARFO O- NP","""."",O A( 9B -A.(B.F C.A46(, :ET
AA( PA4D TA.B)T -BB( O) A NPBR PRODECT4O)CPBR (CR4PTO :A(4( A94C9
ADBRA'BD .B(( T9A) P#","""."" PBR 6O)T9 4) TA.B)T -BB( A.. 4) A...
J#K
On Au,ust , ""$, the CA rendered the assailed decision reversin, and settin,
aside the 6arch *, ""4 Decision and 3une #, ""4 Resolution of the ).RC. The
CA declared F+bon, resi,ned fro+ e+plo%+ent and not to have been ille,all%
dis+issed. The award of full back wa,es in his favor was deleted accordin,l%.
The CA ruled that A:(&C:) is estopped fro+ clai+in, that F+bon, was not its
e+plo%ee after appl%in, the provisions of Polic% )o. 9R&BR&"#2 to hi+. 4t noted
that said polic% is entitled NPolic% on B+plo%ees (eekin, Public OfficeO and the
,uidelines contained therein specificall% pertain to e+plo%ees and did not even
+ention talents or independent contractors. 4t held that it is a co+plete turnaround
on A:(&C:)Ms part to later ar,ue that F+bon, is onl% a radio talent or independent
contractor and not its e+plo%ee. :% appl%in, the sub=ect co+pan% polic% on
F+bon,, A:(&C:) had e>plicitl% reco,ni<ed hi+ to be an e+plo%ee and not +erel%
an independent contractor.
The CA likewise held that the sub=ect co+pan% polic% is the controllin, ,uideline and
therefore, F+bon, should be considered resi,ned fro+ A:(&C:). Ahile .u<on has
polic%&+akin, power as assistant radio +ana,er, he had no authorit% to issue a
+e+orandu+ that had the effect of repealin, or supersedin, a subsistin, polic%.
Contrar% to the findin,s of the .abor Arbiter, the sub=ect co+pan% polic% was
effective at that ti+e and continues to be valid and subsistin, up to the present.
The CA cited Patalin,hu,Ms resi,nation letter to buttress this conclusion, notin, that
Patalin,hu, openl% ad+itted in his letter that his resi,nation was in line with the
said co+pan% polic%. (ince A:(&C:) applied Polic% )o. 9R&BR&"#2 to Patalin,hu,,
there is no reason not to appl% the sa+e re,ulation to F+bon, who was on a si+ilar
situation as the for+er. Thus, the CA found that the ).RC overstepped its area of
discretion to a point of ,rave abuse in declarin, F+bon, to have been ille,all%
ter+inated. The CA concluded that there is no ille,al dis+issal to speak of in the
instant case as F+bon, is considered resi,ned when he ran for an elective post
pursuant to the sub=ect co+pan% polic%.
9ence, this petition.
Petitioner ar,ues that the CA ,ravel% erred@ /#0 in upholdin, Polic% )o. 9R&BR&"#27
/0 in upholdin, the validit% of the ter+ination of F+bon,Ms services7 and /10 when
it reversed the decision of the ).RC 4th Division of Cebu Cit% which affir+ed the
decision of .abor Arbiter )icasio C. AniTon.
JK
F+bon, ar,ues that the sub=ect co+pan% polic% is a clear interference and a ,ross
violation of an e+plo%eeMs ri,ht to suffra,e. 9e is surprised wh% it was eas% for the
CA to rule that .u<onMs +e+orandu+ ran counter to an e>istin, polic% while on the
other end, it did not see that it was in conflict with the constitutional ri,ht to
suffra,e. 9e also points out that the issuance of the 6arch 5, #!!* 6e+orandu+
was precisel% an e>ercise of the +ana,e+ent power to which an e+plo%ee like hi+
+ust respect7 otherwise, he will be sanctioned for disobedience or worse, even
ter+inated. 9e was not in a position to know which between the two issuances was
correct and as far as he is concerned, the 6arch 5, #!!* 6e+orandu+ superseded
the sub=ect co+pan% polic%. 6oreover, A:(&C:) cannot disown acts of its officers
+ost especiall% since it pre=udiced his propert% ri,hts.
J1K
As to the validit% of his dis+issal, F+bon, contends that the ,round relied upon b%
A:(&C:) is not a+on, the =ust and authori<ed causes provided in the .abor Code,
as a+ended. And even assu+in, the sub=ect co+pan% polic% passes the test of
validit% under the prete>t of the ri,ht of the +ana,e+ent to discipline and
ter+inate its e+plo%ees, the e>ercise of such ri,ht is not without bounds. F+bon,
avers that his auto+atic ter+ination was a blatant disre,ard of his ri,ht to due
process. 9e was never asked to e>plain wh% he did not tender his resi,nation
before he ran for public office as +andated b% the sub=ect co+pan% polic%.
J4K
F+bon, likewise asseverates that both the .abor Arbiter and the ).RC were
consistent in their findin,s that he was ille,all% dis+issed. 4t is settled that factual
findin,s of labor ad+inistrative officials, if supported b% substantial evidence, are
accorded not onl% ,reat respect but even finalit%.
J5K
A:(&C:), for its part, counters that the validit% of policies such as Polic% )o. 9R&BR&
"#2 has lon, been upheld b% this Court which has ruled that a +edia co+pan% has
a ri,ht to i+pose a polic% providin, that e+plo%ees who file their certificates of
candidac% in an% election shall be considered resi,ned.
J2K
6oreover, case law has
upheld the validit% of the e>ercise of +ana,e+ent prero,atives even if the% appear
to li+it the ri,hts of e+plo%ees as lon, as there is no showin, that +ana,e+ent
prero,atives were e>ercised in a +anner contrar% to law.
J$K
A:(&C:) contends that
bein, the lar,est +edia and entertain+ent co+pan% in the countr%, its reputation
ste+s not onl% fro+ its abilit% to deliver 8ualit% entertain+ent pro,ra+s but also
because of neutralit% and i+partialit% in deliverin, news.
J*K
A:(&C:) further ar,ues that nothin, in the co+pan% polic% prohibits its e+plo%ees
fro+ either acceptin, a public appointive position or fro+ runnin, for public office.
Thus, it cannot be considered as violative of the constitutional ri,ht of suffra,e.
6oreover, the (upre+e Court has reco,ni<ed the e+plo%erMs ri,ht to enforce
occupational 8ualifications as lon, as the e+plo%er is able to show the e>istence of
a reasonable business necessit% in i+posin, the 8uestioned polic%. 9ere, Polic% )o.
9R&BR&"#2 itself states that it was issued Nto protect the co+pan% fro+ an% public
+isconceptionsO and NJtKo preserve its ob=ectivit%, neutralit% and credibilit%.O Thus,
it cannot be denied that it is reasonable under the circu+stances.
J!K
A:(&C:) likewise opposes F+bon,Ms clai+ that he was ter+inated. A:(&C:) ar,ues
that on the contrar%, F+bon,Ms unilateral act of filin, his certificate of candidac% is
an overt act tanta+ount to voluntar% resi,nation on his part b% virtue of the clear
+andate found in Polic% )o. 9R&BR&"#2. F+bon,, however, failed to file his
resi,nation and in fact +isled his superiors b% +akin, the+ believe that he was
,oin, on leave to ca+pai,n for the ad+inistration candidates but in fact, he actuall%
ran for councilor. 9e also clai+s to have full% apprised .u<on throu,h a letter of his
intention to run for public office, but he failed to adduce a cop% of the sa+e.
J1"K
As to F+bon,Ms ar,u+ent that the CA should not have reversed the findin,s of the
.abor Arbiter and the ).RC, A:(&C:) asseverates that the CA is not precluded fro+
+akin, its own findin,s +ost especiall% if upon its own review of the case, it has
been revealed that the ).RC, in affir+in, the findin,s of the .abor Arbiter,
co++itted ,rave abuse of discretion a+ountin, to lack or e>cess of =urisdiction
when it failed to appl% the sub=ect co+pan% polic% in F+bon,Ms case when it readil%
applied the sa+e to Patalin,hu,.
J1#K
Bssentiall%, the issues to be resolved in the instant petition are@ /#0 whether Polic%
)o. 9R&BR&"#2 is valid7 /0 whether the 6arch 5, #!!* 6e+orandu+ issued b%
.u<on superseded Polic% )o. 9R&BR&"#27 and /10 whether F+bon,, b% seekin, an
elective post, is dee+ed to have resi,ned and not dis+issed b% A:(&C:).
olicy (o. )!-*!-+,- is valid.
This is not the first ti+e that this Court has dealt with a polic% si+ilar to Polic% )o.
9R&BR&"#2. 4n the case of .anila *road#asting Compan( v. NLRC,
J1K
this Court
ruled@
Ahat is involved in this case is an unwritten co+pan% polic% considerin, an%
e+plo%ee who files a certificate of candidac% for an% elective or local office as
resi,ned fro+ the co+pan%. Althou,h X##/b0 of R.A. )o. 2242 does not re8uire
+ass +edia co++entators and announcers such as private respondent to resi,n
fro+ their radio or TD stations but onl% to ,o on leave for the duration of the
ca+pai,n period, we think that the co+pan% +a% nevertheless validl% re8uire the+
to resi,n as a +atter of polic%. 4n this case, the polic% is =ustified on the followin,
,rounds@
Aorkin, for the ,overn+ent and the co+pan% at the sa+e ti+e is clearl%
disadvanta,eous and pre=udicial to the ri,hts and interest not onl% of the co+pan%
but the public as well. 4n the event an e+plo%ee wins in an election, he cannot full%
serve, as he is e>pected to do, the interest of his e+plo%er. The e+plo%ee has to
serve two /0 e+plo%ers, obviousl% detri+ental to the interest of both the
,overn+ent and the private e+plo%er.
4n the event the e+plo%ee loses in the election, the i+partialit% and cold neutralit%
of an e+plo%ee as broadcast personalit% is suspect, thus readil% erodin, and
adversel% affectin, the confidence and trust of the listenin, public to e+plo%erMs
station.
J11K
A:(&C:), like 6anila :roadcastin, Co+pan%, also had a valid =ustification for Polic%
)o. 9R&BR&"#2. 4ts rationale is e+bodied in the polic% itself, to wit@
Rationale@
ABS*CBN BROA#CASTING COR!ORATION stron,l% believes that it is to the best
interest of the co+pan% to continuousl% re+ain apolitical. +;54. 5t .&01u9%g.s
%&' su3319ts 5ts .23418..s t1 ;%>. g9.%t.9 3145t50%4 %6%9.&.ss %&' :19
t;.2 t1 .A.905s. t;.59 95g;t t1 su::9%g., t;. 0123%&8, ;16.>.9, 39.:.9s t1
9.2%5& 3145t50%448 5&'.3.&'.&t %&' u&%tt%0;.' t1 %&8 3145t50%4 5&'5>5'u%4 19
.&t5t8.
Therefore, .23418..s 6;1 [5&t.&'] t1 9u& :19 3u7450 1::50. 19 %00.3t 3145t50%4
%3315&t2.&t s;1u4' 9.s5g& :912 t;.59 31s5t51&s, 5& 19'.9 t1 391t.0t t;.
0123%&8 :912 %&8 3u7450 25s01&0.3t51&s. T1 39.s.9>. 5ts 17?.0t5>5t8,
&.ut9%45t8 %&' 09.'57545t8, the co+pan% reiterates the followin, polic% ,uidelines
for strict i+ple+entation.
> > > >
J14K
JB+phasis supplied.K
Ae have consistentl% held that so lon, as a co+pan%Ms +ana,e+ent prero,atives
are e>ercised in ,ood faith for the advance+ent of the e+plo%erMs interest and not
for the purpose of defeatin, or circu+ventin, the ri,hts of the e+plo%ees under
special laws or under valid a,ree+ents, this Court will uphold the+.
J15K
4n the
instant case, A:(&C:) validl% =ustified the i+ple+entation of Polic% )o. 9R&BR&"#2.
4t is well within its ri,hts to ensure that it +aintains its ob=ectivit% and credibilit%
and freein, itself fro+ an% appearance of i+partialit% so that the confidence of the
viewin, and listenin, public in it will not be in an% wa% eroded. Bven as the law is
solicitous of the welfare of the e+plo%ees, it +ust also protect the ri,ht of an
e+plo%er to e>ercise what are clearl% +ana,e+ent prero,atives. The free will of
+ana,e+ent to conduct its own business affairs to achieve its purpose cannot be
denied.
J12K
4t is worth notin, that such e>ercise of +ana,e+ent prero,ative has earned a
sta+p of approval fro+ no less than our Con,ress itself when on -ebruar% #, ""#,
it enacted Republic Act )o. !""2, otherwise known as the N-air Blection Act.O
(ection 2.2 thereof reads@
2.2. A&8 2%ss 2.'5% 014u2&5st, 0122.&t%t19, %&&1u&0.9, 9.319t.9, 1&*%59
0199.s31&'.&t 19 3.9s1&%45t8 6;1 5s % 0%&'5'%t. :19 %&8 .4.0t5>. 3u7450
1::50. 19 5s % 0%23%5g& >14u&t..9 :19 19 .23418.' 19 9.t%5&.' 5& %&8
0%3%05t8 78 %&8 0%&'5'%t. 19 3145t50%4 3%9t8 s;%44 7. '..2.' 9.s5g&.', 5: s1
9.@u59.' 78 t;.59 .23418.9, or shall take a leave of absence fro+ hisCher work as
such durin, the ca+pai,n period@ Provided, That an% +edia practitioner who is an
official of a political part% or a +e+ber of the ca+pai,n staff of a candidate or
political part% shall not use hisCher ti+e or space to favor an% candidate or political
part%. JB+phasis and underscorin, supplied.K
olicy (o. )!-*!-+,- .as not
superseded by the /arch 01, ,223
/emorandum
The CA correctl% ruled that thou,h .u<on, as Assistant (tation 6ana,er for Radio of
A:(&C:), has polic%&+akin, powers in relation to his principal task of ad+inisterin,
the networkMs radio station in the Cebu re,ion, the e>ercise of such power should be
in accord with the ,eneral rules and re,ulations i+posed b% the A:(&C:) 9ead
Office to its e+plo%ees. Clearl%, the 6arch 5, #!!* 6e+orandu+ issued b% .u<on
which onl% re8uires e+plo%ees to ,o on leave if the% intend to run for an% elective
position is in absolute contradiction with Polic% )o. 9R&BR&"#2 issued b% the A:(&
C:) 9ead Office in 6anila which re8uires the resi,nation, not onl% the filin, of a
leave of absence, of an% e+plo%ee who intends to run for public office. 9avin, been
issued be%ond the scope of his authorit%, the 6arch 5, #!!* 6e+orandu+ is
therefore void and did not supersede Polic% )o. 9R&BR&"#2.
Also worth notin, is that .u<on in his (worn (tate+ent ad+itted the inaccurac% of
his recollection of the co+pan% polic% when he issued the 6arch 5, #!!*
6e+orandu+ and stated therein that upon double&checkin, of the e>act te>t of the
polic% state+ent and subse8uent confir+ation with the A:(&C:) 9ead Office in
6anila, he learned that the polic% re8uired resi,nation for those who will actuall%
run in elections because the co+pan% wanted to +aintain its independence. (ince
the officer who hi+self issued the sub=ect +e+orandu+ acknowled,ed that it is not
in har+on% with the Polic% issued b% the upper +ana,e+ent, there is no reason for
it to be a source of ri,ht for F+bon,.
4mbon' is deemed resi'ned
.hen he ran for councilor.
As Polic% )o. 9R&BR&"#2 is the subsistin, co+pan% polic% and not .u<onMs 6arch 5,
#!!* 6e+orandu+, F+bon, is dee+ed resi,ned when he ran for councilor.
Ae find no +erit in F+bon,Ms ar,u+ent that NJhisK auto+atic ter+ination > > > was
a blatant Jdisre,ardK of JhisK ri,ht to due processO as he was Nnever asked to
e>plain wh% he did not tender his resi,nation before he ran for public office as
+andated b% Jthe sub=ect co+pan% polic%K.O
J1$K
F+bon,Ms overt act of runnin, for
councilor of .apu&.apu Cit% is tanta+ount to resi,nation on his part. 9e was
separated fro+ A:(&C:) not because he was dis+issed but because he resi,ned.
(ince there was no ter+ination to speak of, the re8uire+ent of due process in
dis+issal cases cannot be applied to F+bon,. Thus, A:(&C:) is not dut%&bound to
ask hi+ to e>plain wh% he did not tender his resi,nation before he ran for public
office as +andated b% the sub=ect co+pan% polic%.
4n addition, we do not subscribe to F+bon,Ms clai+ that he was not in a position to
know which of the two issuances was correct. F+bon, +ost likel% than not, is full%
aware that the subsistin, polic% is Polic% )o. 9R&BR&"#2 and not the 6arch 5, #!!*
6e+orandu+ and it was for this reason that, as stated b% .u<on in his (worn
(tate+ent, he onl% told the latter that he will onl% ca+pai,n for the ad+inistration
ticket and not actuall% run for an elective post. F+bon, clai+s he had full%
apprised .u<on b% letter of his plan to run and even filed a leave of absence but
records are bereft of an% proof of said clai+. F+bon, clai+s that the letter statin,
his intention to ,o on leave to run in the election is attached to his Position Paper as
Anne> NA,O a perusal of said pleadin, attached to his petition before this Court,
however, show that Anne> NAO was not his letter to .u<on but the (epte+ber #4,
#!!* 6e+orandu+ infor+in, F+bon, that his services had been auto+aticall%
ter+inated when he ran for a local ,overn+ent position.
6oreover, as pointed out b% A:(&C:), had F+bon, been truthful to his superiors,
the% would have been able to clarif% to hi+ the prevailin, co+pan% polic% and
infor+ hi+ of the conse8uences of his decision in case he decides to run, as .u<on
did in Patalin,hu,Ms case.cralaw
+"EREFORE, the petition for review on certiorari is #ENIE# for lack of +erit.
Aith costs a,ainst petitioner.
SO OR#ERE#.
[G.R. NO. 1262B7 : F.79u%98 11, 2008]
!ROFESSIONAL SER=ICES, INC., Petitioner, v. T"E CO(RT OF A!!EALS %&'
NATI=I#A# %&' ENRIF(E AGANA, Respondents,
[G.R. NO. 126/67 : F.79u%98 11, 2008]
NATI=I#A# CSu7st5tut.' 78 ;.9 0;54'9.& MARCELINO AGANA III, ENRIF(E
AGANA, -R., EMMA AGANA AN#A)A, -ES(S AGANA, %&' RA)M(N# AGANAD
%&' ENRIF(E AGANA, Petitioners, v.T"E CO(RT OF A!!EALS %&' -(AN
F(ENTES, Respondents,
[G.R. NO. 127,B0 : F.79u%98 11, 2008]
MIG(EL AM!IL, Petitioner, v. T"E CO(RT OF A!!EALS %&' NATI=I#A#
AGANA %&' ENRIF(E AGANA, Respondents.
R E S O L ( T I O N
SAN#O=AL*G(TIERRE$, J.:
As the hospital industr% chan,es, so +ust the laws and =urisprudence ,overnin,
hospital liabilit%. The i++unit% fro+ +edical +alpractice traditionall% accorded to
hospitals has to be eroded if we are to balance the interest of the patients and
hospitals under the present settin,.
:efore this Court is a +otion for reconsideration filed b% Professional (ervices, 4nc.
/P(40, petitioner in '.R. )o. #2!$, assailin, the Court?s -irst Division Decision
dated 3anuar% 1#, ""$, findin, P(4 and Dr. 6i,uel A+pil, petitioner in '.R. )o.
#$5!", =ointl% and severall% liable for +edical ne,li,ence.
A brief revisit of the antecedent facts is i+perative.
On April 4, #!*4, )atividad A,ana was ad+itted at the 6edical Cit% 'eneral 9ospital
/6edical Cit%0 because of difficult% of bowel +ove+ent and blood% anal dischar,e.
Dr. A+pil dia,nosed her to be sufferin, fro+ Scancer of the si,+oid.S Thus, on April
##, #!*4, Dr. A+pil, assisted b% the +edical staff
#
of 6edical Cit%, perfor+ed an
anterior resection sur,er% upon her. Durin, the sur,er%, he found that the
+ali,nanc% in her si,+oid area had spread to her left ovar%, necessitatin, the
re+oval of certain portions of it. Thus, Dr. A+pil obtained the consent of Att%.
Bnri8ue A,ana, )atividad?s husband, to per+it Dr. 3uan -uentes, respondent in '.R.
)o. #242$, to perfor+ h%sterecto+% upon )atividad.
Dr. -uentes perfor+ed and co+pleted the h%sterecto+%. Afterwards, Dr. A+pil took
over, co+pleted the operation and closed the incision. 9owever, the operation
appeared to be flawed. 4n the correspondin, Record of Operation dated April ##,
#!*4, the attendin, nurses entered these re+arks@
spon,e count lackin,
announced to sur,eon searched done /sic0 but to no avail continue for closure.
After a couple of da%s, )atividad co+plained of e>cruciatin, pain in her anal re,ion.
(he consulted both Dr. A+pil and Dr. -uentes about it. The% told her that the pain
was the natural conse8uence of the sur,ical operation perfor+ed upon her. Dr.
A+pil reco++ended that )atividad consult an oncolo,ist to treat the cancerous
nodes which were not re+oved durin, the operation.
On 6a% !, #!*4, )atividad, acco+panied b% her husband, went to the Enited (tates
to seek further treat+ent. After four /40 +onths of consultations and laborator%
e>a+inations, )atividad was told that she was free of cancer. 9ence, she was
advised to return to the Philippines.
On Au,ust 1#, #!*4, )atividad flew back to the Philippines, still sufferin, fro+
pains. Two /0 weeks thereafter, her dau,hter found a piece of ,au<e protrudin,
fro+ her va,ina. Dr. A+pil was i++ediatel% infor+ed. 9e proceeded to )atividad?s
house where he +ana,ed to e>tract b% hand a piece of ,au<e +easurin, #.5 inches
in width. Dr. A+pil then assured )atividad that the pains would soon vanish.
Despite Dr. A+pil?s assurance, the pains intensified, pro+ptin, )atividad to seek
treat+ent at the Pol%+edic 'eneral 9ospital. Ahile confined thereat, Dr. Ra+on
'utierre< detected the presence of a forei,n ob=ect in her va,ina & & a foul&s+ellin,
,au<e +easurin, #.5 inches in width. The ,au<e had badl% infected her va,inal
vault. A recto&va,inal fistula had for+ed in her reproductive or,an which forced
stool to e>crete throu,h the va,ina. Another sur,ical operation was needed to
re+ed% the situation. Thus, in October #!*4, )atividad underwent another sur,er%.
On )ove+ber #, #!*4, )atividad and her husband filed with the Re,ional Trial
Court, :ranch !2, Iue<on Cit% a co+plaint for da+a,es a,ainst P(4 /owner of
6edical Cit%0, Dr. A+pil and Dr. -uentes.
On -ebruar% #2, #!*2, pendin, the outco+e of the above case, )atividad died. (he
was dul% substituted b% her above&na+ed children /the A,anas0.
On 6arch #$, #!!1, the trial court rendered =ud,+ent in favor of spouses A,ana
findin, P(4, Dr. A+pil and Dr. -uentes =ointl% and severall% liable. On appeal, the
Court of Appeals, in its Decision dated (epte+ber 2, #!!2, affir+ed the assailed
=ud,+ent with +odification in the sense that the co+plaint a,ainst Dr. -uentes was
dis+issed.
P(4, Dr. A+pil and the A,anas filed with this Court separate Petitions for Review
on Certiorari. On 3anuar% 1#, ""$, the Court, throu,h its -irst Division, rendered a
Decision holdin, that P(4 is =ointl% and severall% liable with Dr. A+pil for the
followin, reasons@ first, there is an e+plo%er&e+plo%ee relationship between
6edical Cit% and Dr. A+pil. The Court relied on Ramos v. Court of Appeals,

holdin,
that for the purpose of apportionin, responsibilit% in +edical ne,li,ence cases, an
e+plo%er&e+plo%ee relationship 5& .::.0t .A5sts between hospitals and their
attendin, and visitin, ph%sicians7 se#ond, P(4?s act of publicl% displa%in, in the
lobb% of the 6edical Cit% the na+es and speciali<ations of its accredited ph%sicians,
includin, Dr. A+pil, estopped it fro+ den%in, the e>istence of an e+plo%er&
e+plo%ee relationship between the+ under the '10t95&. 1: 1st.&s574. %g.&08 19
%g.&08 78 .st133.4H and t'ird, P(4?s failure to supervise Dr. A+pil and its resident
ph%sicians and nurses and to take an active step in order to re+ed% their ne,li,ence
rendered it directl% liable under the '10t95&. 1: 019319%t. &.g45g.&0..
4n its +otion for reconsideration, P(4 contends that the Court erred in findin, it
liable under Article #*" of the Civil Code, there bein, no e+plo%er&e+plo%ee
relationship between it and its consultant, Dr. A+pil. P(4 stressed that the Court?s
Decision in Ramos holdin, that San e+plo%er&e+plo%ee relationship 5& .::.0t e>ists
between hospitals and their attendin, and visitin, ph%sicians for the purpose of
apportionin, responsibilit%S had been reversed in a subse8uent Resolution.
1
-urther,
P(4 ar,ues that t;. '10t95&. 1: 1st.&s574. %g.&08 19 %g.&08 78
.st133.4 cannot appl% because spouses A,ana failed to establish one re8uisite of
the doctrine, i.e., that )atividad relied on the representation of the hospital in
en,a,in, the services of Dr. A+pil. And lastl%, P(4 +aintains that the '10t95&. 1:
019319%t. &.g45g.&0. is +isplaced because the pro>i+ate cause of )atividad?s
in=ur% was Dr. A+pil?s ne,li,ence.
The +otion lacks +erit.
As earlier +entioned, the -irst Division, in its assailed Decision, ruled that an
e+plo%er&e+plo%ee relationship I5& .::.0tI e>ists between the 6edical Cit% and Dr.
A+pil. Conse8uentl%, both are =ointl% and severall% liable to the A,anas. This rulin,
proceeds fro+ the followin, ratiocination in Ramos@
Ae now discuss the responsibilit% of the hospital in this particular incident. The
uni8ue practice /a+on, private hospitals0 of fillin, up specialist staff with attendin,
and visitin, Sconsultants,S who are alle,edl% not hospital e+plo%ees, presents
proble+s in apportionin, responsibilit% for ne,li,ence in +edical +alpractice
cases."16.>.9, t;. '5::50u4t8 5s 1&48 219. %33%9.&t t;%& 9.%4.
4n the first place, ;1s35t%4s .A.905s. s5g&5:50%&t 01&t914 5& t;. ;595&g %&' :595&g
1: 01&su4t%&ts %&' 5& t;. 01&'u0t 1: t;.59 619< 65t;5& t;. ;1s35t%4
39.25s.s. Doctors who appl% for SconsultantS slots, visitin, or attendin,, are
re8uired to sub+it proof of co+pletion of residenc%, their educational 8ualifications7
,enerall%, evidence of accreditation b% the appropriate board /diplo+ate0, evidence
of fellowship in +ost cases, and references. These re8uire+ents are carefull%
scrutini<ed b% +e+bers of the hospital ad+inistration or b% a review co++ittee set
up b% the hospital who either accept or re=ect the application. This is particularl%
true with respondent hospital.
A:t.9 % 3;8s505%& 5s %00.3t.', .5t;.9 %s % >5s5t5&g 19 %tt.&'5&g 01&su4t%&t,
;. 5s &192%448 9.@u59.' t1 %tt.&' 045&501*3%t;141g50%4 01&:.9.&0.s, 01&'u0t
7.'s5'. 91u&'s :19 04.9<s, 5&t.9&s %&' 9.s5'.&ts, 21'.9%t. g9%&' 91u&'s
%&' 3%t5.&t %u'5ts %&' 3.9:192 1t;.9 t%s<s %&' 9.s31&s57545t5.s, :19 t;.
395>54.g. 1: 7.5&g %74. t1 2%5&t%5& % 045&50 5& t;. ;1s35t%4, %&'E19 :19 t;.
395>54.g. 1: %'25tt5&g 3%t5.&ts 5&t1 t;. ;1s35t%4. 4n addition to these, t;.
3;8s505%&Js 3.9:192%&0. %s % s3.05%45st 5s g.&.9%448 .>%4u%t.' 78 % 3..9
9.>5.6 01225tt.. 1& t;. 7%s5s 1: 219t%45t8 %&' 21975'5t8 st%t5st50s, %&'
:..'7%0< :912 3%t5.&ts, &u9s.s, 5&t.9&s %&' 9.s5'.&ts. A 01&su4t%&t 9.25ss
5& ;5s 'ut5.s, 19 % 01&su4t%&t 6;1 9.gu4%948 :%44s s;19t 1: t;. 25&52u2
st%&'%9's %00.3t%74. t1 t;. ;1s35t%4 19 5ts 3..9 9.>5.6 01225tt.., 5s
&192%448 3145t.48 t.925&%t.'.
4n other words, private hospitals hire, fire and e>ercise real control over their
attendin, and visitin, SconsultantS staff. Ahile I01&su4t%&tsI %9. &1t, t.0;&50%448
.23418..s, % 315&t 6;50; 9.s31&'.&t ;1s35t%4 %ss.9ts 5& '.&85&g %44
9.s31&s57545t8 :19 t;. 3%t5.&tJs 01&'5t51&, t;. 01&t914 .A.905s.', t;. ;595&g,
%&' t;. 95g;t t1 t.925&%t. 01&su4t%&ts %44 :u4:544 t;. 52319t%&t ;%442%9<s 1:
%& .23418.9*.23418.. 9.4%t51&s;53, 65t; t;. .A0.3t51& 1: t;. 3%82.&t 1:
6%g.s. I& %ss.ss5&g 6;.t;.9 su0; % 9.4%t51&s;53 5& :%0t .A5sts, t;. 01&t914
t.st 5s '.t.925&5&g. A0019'5&g48, 1& t;. 7%s5s 1: t;. :19.g15&g, 6. 9u4. t;%t
:19 t;. 3u931s. 1: %4410%t5&g 9.s31&s57545t8 5& 2.'50%4 &.g45g.&0. 0%s.s, %&
.23418.9*.23418.. 9.4%t51&s;53 5& .::.0t .A5sts 7.t6..& ;1s35t%4s %&'
t;.59 %tt.&'5&g %&' >5s5t5&g 3;8s505%&s. This bein, the case, the 8uestion now
arises as to whether or not respondent hospital is solidaril% liable with respondent
doctors for petitioner?s condition.
The basis for holdin, an e+plo%er solidaril% responsible for the ne,li,ence of its
e+plo%ee is found in Article #*" of the Civil Code which considers a person
accountable not onl% for his own acts but also for those of others based on the
for+er?s responsibilit% under a relationship of partia ptetas.
Clearl%, in Ramos, the Court considered the peculiar relationship between a hospital
and its consultants on the bases of certain factors. One such factor is the Scontrol
testS wherein the hospital e>ercises control in the hirin, and firin, of consultants,
like Dr. A+pil, and in the conduct of their work.
Actuall%, contrar% to P(4?s contention, the Court did not reverse its rulin, in Ramos.
Ahat it clarified was that the De .os (antos 6edical Clinic did not e>ercise control
over its consultant, hence, there is no e+plo%er&e+plo%ee relationship between
the+. Thus, despite the ,rantin, of the said hospital?s +otion for reconsideration,
the doctrine in Ramos sta%s, i.e., for the purpose of allocatin, responsibilit% in
+edical ne,li,ence cases, an e+plo%er&e+plo%ee relationship e>ists between
hospitals and their consultants.
4n the instant cases, P(4 +erel% offered a g.&.9%4 '.&5%4 of responsibilit%,
+aintainin, that consultants, like Dr. A+pil, are Sindependent contractors,S not
e+plo%ees of the hospital. Bven assu+in, that Dr. A+pil is not an e+plo%ee of
6edical Cit%, but an independent contractor, still the said hospital is liable to the
A,anas.
4n Nograles$ et al. v. Capitol .edi#al Center$ et al.,
4
throu,h 6r. 3ustice Antonio T.
Carpio, the Court held@
The 8uestion now is whether C6C is auto+aticall% e>e+pt fro+ liabilit% considerin,
that Dr. Bstrada is an independent contractor&ph%sician.
4n ,eneral, a hospital is not liable for the ne,li,ence of an independent contractor&
ph%sician. There is, however, an e>ception to this principle. The hospital +a% be
liable if the ph%sician is the SostensibleS a,ent of the hospital. //ones v. P'ilpott,
$" -. (upp. ##" J#!**K0 This e>ception is also known as the Sdoctrine of apparent
authorit%.S /(o+eti+es referred to as the apparent or ostensible a,enc% theor%.
J<ing v. .it#'ell, 1# A.D.1
rd
!5*, *#! ).F. (.d #2! /""20K.
> > >
The doctrine of apparent authorit% essentiall% involves two factors to deter+ine the
liabilit% of an independent contractor&ph%sician.
The first factor focuses on the hospital?s +anifestations and is so+eti+es described
as an in8uir% whether the hospital acted in a +anner which would lead a reasonable
person to conclude that the individual who was alle,ed to be ne,li,ent was an
e+plo%ee or a,ent of the hospital. /Diggs v. Novant ;ealt'$ %n#., 2* (.B.d *5#
/""20 citin, ;(lton v. <oont9$ #1* ).C. App. 2! /"""0. I& t;5s 9.g%9', t;.
;1s35t%4 &..' &1t 2%<. .A39.ss 9.39.s.&t%t51&s t1 t;. 3%t5.&t t;%t t;.
t9.%t5&g 3;8s505%& 5s %& .23418.. 1: t;. ;1s35t%4H 9%t;.9 % 9.39.s.&t%t51&
2%8 7. g.&.9%4 %&' 52345.'. /%d.0
The doctrine of apparent authorit% is a specie of the doctrine of estoppel. Article
#41# of the Civil Code provides that SJtKhrou,h estoppel, an ad+ission or
representation is rendered conclusive upon the person +akin, it, and cannot be
denied or disproved as a,ainst the person rel%in, thereon.S Bstoppel rests on this
rule@ SAhether a part% has, b% his own declaration, act, or o+ission, intentionall%
and deliberatel% led another to believe a particular thin, true, and to act upon such
belief, he cannot, in an% liti,ation arisin, out of such declaration, act or o+ission, be
per+itted to falsif% it. /De Castro v. !inete, #1$ Phil. 451 J#!2!K, citin, (ec. 1, par.
A, Rule #1# of the Rules of Court. (ee also <ing v. .it#'ell, 1# A.D.1
rd
!5*, *#!
).F.(.d #2! J""2K0.
> > >
The second factor focuses on the patient?s reliance. 4t is so+eti+es characteri<ed as
an in8uir% on whether the plaintiff acted in reliance upon the conduct of the hospital
or its %g.&t, consistent with ordinar% care and prudence. /Diggs v. Novant ;ealt'$
%n#.0
P(4 ar,ues that the '10t95&. 1: %33%9.&t %ut;195t8 cannot appl% to these cases
because spouses A,ana failed to establish proof of their reliance on the
representation of 6edical Cit% that Dr. A+pil is its e+plo%ee.
The ar,u+ent lacks +erit.
Att%. A,ana cate,oricall% testified that one of the reasons wh% he chose Dr. A+pil
was that ;. <&.6 ;52 t1 7. % st%:: 2.27.9 1: M.'50%4 C5t8, % 39125&.&t %&'
<&16& ;1s35t%4.
I Aill %ou tell us what transpired in %our visit to Dr. A+pilPcralawred
A Aell, 4 saw Dr. A+pil at the 6edical Cit%, I <&16 ;52 t1 7. % st%:: 2.27.9
t;.9., and 4 told hi+ about the case of +% wife and he asked +e to brin, +% wife
over so she could be e>a+ined. Prior to that, 4 have known Dr. A+pil, first, he was
sta%in, in front of our house, he was a nei,hbor, second, +% dau,hter was his
student in the Eniversit% of the Bast (chool of 6edicine at Ra+on 6a,sa%sa%7 and
when +% dau,hter opted to establish a hospital or a clinic, Dr. A+pil was one of our
consultants on how to establish that hospital. And fro+ there, 4 have known that he
was a specialist when it co+es to that illness.
Att%. A,caoili
On that particular occasion, April , #!*4, what was %our reason for choosin, to
contact Dr. A+pil in connection with %our wife?s illnessPcralawred
A -irst, before that, 4 have known hi+ to be a specialist on that part of the bod% as
a sur,eon7 s.01&', I ;%>. <&16& ;52 t1 7. % st%:: 2.27.9 1: t;. M.'50%4
C5t8 6;50; 5s % 39125&.&t %&' <&16& ;1s35t%4. And third, because he is a
nei,hbor, 4 e>pect +ore than the usual +edical service to be ,iven to us, than his
ordinar% patients.
5
Clearl%, P(4 is estopped fro+ passin, the bla+e solel% to Dr. A+pil. 4ts act of
displa%in, his na+e and those of the other ph%sicians in the public director% at the
lobb% of the hospital a+ounts to holdin, out to the public that it offers 8ualit%
+edical service throu,h the listed ph%sicians. This =ustifies Att%. A,ana?s belief that
Dr. A+pil was a +e+ber of the hospital?s staff.It 2ust 7. st9.ss.' t;%t u&'.9
t;. '10t95&. 1: %33%9.&t %ut;195t8, t;. @u.st51& 5& .>.98 0%s. 5s 6;.t;.9
t;. 395&053%4 ;%s 78 ;5s >14u&t%98 %0t 34%0.' t;. %g.&t 5& su0; % s5tu%t51&
t;%t % 3.9s1& 1: 19'5&%98 39u'.&0., 01&>.9s%&t 65t; 7us5&.ss us%g.s %&'
t;. &%tu9. 1: t;. 3%9t50u4%9 7us5&.ss, 5s ?ust5:5.' 5& 39.su25&g t;%t su0;
%g.&t ;%s %ut;195t8 t1 3.9:192 t;. 3%9t50u4%9 %0t 5& @u.st51&.
2
4n these cases,
the circu+stances %ield a positive answer to the 8uestion.
The challen,ed Decision also anchors its rulin, on the '10t95&. 1: 019319%t.
9.s31&s57545t8.
$
The dut% of providin, 8ualit% +edical service is no lon,er the sole
prero,ative and responsibilit% of the ph%sician. This is because the +odern hospital
now tends to or,ani<e a ;5g;48*391:.ss51&%4 2.'50%4 st%:: whose co+petence
and perfor+ance need also to be +onitored b% the hospital co++ensurate with its
inherent responsibilit% to provide 8ualit% +edical care.
*
Su0; 9.s31&s57545t8
5&04u'.s t;. 3913.9 su3.9>5s51& 1: t;. 2.27.9s 1: 5ts 2.'50%4 st%::.
A0019'5&g48, t;. ;1s35t%4 ;%s t;. 'ut8 t1 2%<. % 9.%s1&%74. .::19t t1
21&5t19 %&' 1>.9s.. t;. t9.%t2.&t 39.s0957.' %&' %'25&5st.9.' 78 t;.
3;8s505%&s 39%0t505&g 5& 5ts 39.25s.s.
Enfortunatel%, P(4 had been re+iss in its dut%. 4t did not conduct an 522.'5%t.
5&>.st5g%t51& on the reported +issin, ,au<es to the ,reat pre=udice and a,on% of
its patient. Dr. 3ocson, a +e+ber of P(4?s +edical staff, who testified on whether
the hospital conducted an investi,ation, was evasive, thus@
F +. g1 7%0< t1 t;. 13.9%t5>. t.0;&5@u., t;5s 6%s s5g&.' 78 #9.
!u9ug%&%&, 6%s t;5s su725tt.' t1 t;. ;1s35t%4K09%4%69.'
A Fes, sir, this was sub+itted to the hospital with the record of the patient.
I Aas the hospital i++ediatel% infor+ed about the +issin, spon,esPcralawred
A That is the dut% of the sur,eon, sir.
I As a witness to an untoward incident in the operatin, roo+, was it not %our
obli,ation, Dr., to also report to the hospital because %ou are under the control and
direction of the hospitalPcralawred
A The hospital alread% had the record of the two O( +issin,, sir.
I 4f %ou place %ourself in the position of the hospital, how will %ou recover.
A Fou do not answer +% 8uestion with another 8uestion.
I Did the hospital do an%thin, about the +issin, ,au<esPcralawred
A The hospital left it up to the sur,eon who was doin, the operation, sir.
I Did the hospital investi,ate the sur,eon who did the operationPcralawred
A 4 a+ not in the position to answer that, sir.
I Fou never did hear the hospital investi,atin, the doctors involved in this case
of those +issin, spon,es, or did %ou hear so+ethin,Pcralawred
> > > > > >
A 4 think we alread% +ade a report b% =ust sa%in, that two spon,es were
+issin,, it is up to the hospital to +ake the +ove.
Att%. A,ana
Precisel%, 4 a+ askin, %ou if the hospital did a +ove, if the hospital did a +ove.
A 4 cannot answer that.
Court
:% that answer, would %ou +ean to tell the Court that %ou were aware if there was
such a +ove done b% the hospitalPcralawred
A 4 cannot answer that, %our honor, because 4 did not have an% +ore follow&up of
the case that happened until now.
!
The above testi+on% obviousl% shows Dr. 3ocson?s 4%0< 1: 01&0.9& :19 t;.
3%t5.&ts. Su0; 01&'u0t 5s 9.:4.0t5>. 1: t;. ;1s35t%4Js 2%&&.9 1: su3.9>5s51&.
N1t 1&48 '5' !SI 79.%0; 5ts 'ut8 t1 1>.9s.. 19 su3.9>5s. %44 3.9s1&s 6;1
39%0t50. 2.'505&. 65t;5& 5ts 6%44s, 5t %4s1 :%54.' t1 t%<. %& %0t5>. st.3 5&
:5A5&g t;. &.g45g.&0. 01225tt.'. This renders P(4, not onl% vicariousl% liable for
the ne,li,ence of Dr. A+pil under Article #*" of the Civil Code, but also '59.0t48
45%74. for its own ne,li,ence under Article #$2.
6oreover, there is +erit in the trial court?s findin, that the failure of P(4 to conduct
an investi,ation S.st%745s;.' !SIJs 3%9t 5& t;. '%9< 01&s359%08 1: s54.&0. %&'
01&0.%42.&t %71ut t;. g%uL.s.S The followin, testi+on% of Att%. A,ana supports
such findin,s, thus@
I Fou said %ou relied on the pro+ise of Dr. A+pil and despite the pro+ise %ou
were not able to obtain the said record. Did %ou ,o back to the record custodianPcralawred
A I '5' &1t 7.0%us. I 6%s t%4<5&g t1 #9. A2354. ". 39125s.' 2..
F A:t.9 81u9 t%4< t1 #9. A2354, 81u 6.&t t1 t;. 9.019' 0ust1'5%&K
A I 6.&t t1 t;. 9.019' 0ust1'5%& t1 g.t t;. 045&50%4 9.019' 1: 28 65:., %&'
I 6%s g5>.& % 319t51& 1: t;. 9.019's 01&s5st5&g 1: t;. :5&'5&gs, %21&g
t;.2, t;. .&t95.s 1: t;. '%t.s, 7ut &1t t;. 13.9%t5&g 3910.'u9. %&'
13.9%t5>. 9.319t.
#"
4n su+, we find no +erit in the +otion for reconsideration.
+"EREFORE, we #EN) P(4?s +otion for reconsideration 65t; :5&%45t8.
SO OR#ERE#.
[G.R. NO. 1,B,77 : M%8 3, 2006]
C"ARLITO !EMNARAN#A, Petitioner, v. BAGANGA !L)+OO# COR!ORATION
%&' "(#SON C"(A,Respondents.
# E C I S I O N
!ANGANIBAN, C.J.:
6ana,erial e+plo%ees and +e+bers of the +ana,erial staff are e>e+pted fro+ the
provisions of the .abor Code on labor standards. (ince petitioner belon,s to this
class of e+plo%ees, he is not entitled to overti+e pa% and pre+iu+ pa% for workin,
on rest da%s.
The Case
:efore us is a Petition for Review
#
under Rule 45 of the Rules of Court, assailin, the
3anuar% $, ""1

and 3ul% 4, ""1


1
Resolutions of the Court of Appeals /CA0 in CA&
'R (P )o. $415*. The earlier Resolution disposed as follows@
SA9BRB-ORB, pre+ises considered, the instant petition is hereb% #ISMISSE#.S
4
The latter Resolution denied reconsideration.
On the other hand, the Decision of the )ational .abor Relations Co++ission /).RC0
challen,ed in the CA disposed as follows@
SA9BRB-ORB, pre+ises considered, the decision of the .abor Arbiter below
awardin, overti+e pa% and pre+iu+ pa% for rest da% to co+plainant is hereb%
RBDBR(BD and (BT A(4DB, and the co+plaint in the above&entitled case dis+issed
for lack of +erit.
5
The -acts
(o+eti+e in 3une #!!!, Petitioner Charlito PeYZaranda was hired as an e+plo%ee
of :a,an,a Pl%wood Corporation /:PC0 to take char,e of the operations and
+aintenance of its stea+ plant boiler.
2
4n 6a% ""#, PeYZaranda filed a Co+plaint
for ille,al dis+issal with +one% clai+s a,ainst :PC and its ,eneral +ana,er, 9udson
Chua, before the ).RC.
$
After the parties failed to settle a+icabl%, the labor arbiter
*
directed the parties to
file their position papers and sub+it supportin, docu+ents.
!
Their respective
alle,ations are su++ari<ed b% the labor arbiter as follows@
SJPeYZarandaK throu,h counsel in his position paper alle,es that he was e+plo%ed
b% respondent J:a,an,aK on 6arch #5, #!!! with a +onthl% salar% of P5,"""."" as
-ore+anC:oiler 9eadC(hift Bn,ineer until he was ille,all% ter+inated on Dece+ber
#!, """. -urther, JheK alle,es that his services JwereK ter+inated without the
benefit of due process and valid ,rounds in accordance with law. -urther+ore, he
was not paid his overti+e pa%, pre+iu+ pa% for workin, durin, holida%sCrest da%s,
ni,ht shift differentials and finall% clai+s for pa%+ent of da+a,es and attorne%?s
fees havin, been forced to liti,ate the present co+plaint.
SEpon the other hand, respondent J:PCK is a do+estic corporation dul% or,ani<ed
and e>istin, under Philippine laws and is represented herein b% its 'eneral 6ana,er
9ED(O) C9EA, JtheK individual respondent. Respondents thru counsel alle,e that
co+plainant?s separation fro+ service was done pursuant to Art. *1 of the .abor
Code. The respondent J:PCK was on te+porar% closure due to repair and ,eneral
+aintenance and it applied for clearance with the Depart+ent of .abor and
B+plo%+ent, Re,ional Office )o. L4 to shut down and to dis+iss e+plo%ees /par.
position paper0. And due to the insistence of herein co+plainant he was paid his
separation benefits /Anne>es C and D, ibid0. Conse8uentl%, when respondent J:PCK
partiall% reopened in 3anuar% ""#, JPeYZarandaK failed to reappl%. 9ence, he was
not ter+inated fro+ e+plo%+ent +uch less ille,all%. 9e opted to severe
e+plo%+ent when he insisted pa%+ent of his separation benefits. -urther+ore,
bein, a +ana,erial e+plo%ee he is not entitled to overti+e pa% and if ever he
rendered services be%ond the nor+al hours of work, JthereK was no office orderCor
authori<ation for hi+ to do so. -inall%, respondents alle,e that the clai+ for
da+a,es has no le,al and factual basis and that the instant co+plaint +ust
necessaril% fail for lack of +erit.S
#"
The labor arbiter ruled that there was no ille,al dis+issal and that petitioner?s
Co+plaint was pre+ature because he was still e+plo%ed b% :PC.
##
The te+porar%
closure of :PC?s plant did not ter+inate his e+plo%+ent, hence, he need not
reappl% when the plant reopened.
Accordin, to the labor arbiter, petitioner?s +one% clai+s for ille,al dis+issal was
also weakened b% his 8uitclai+ and ad+ission durin, the clarificator% conference
that he accepted separation benefits, sick and vacation leave conversions and
thirteenth +onth pa%.
#
)evertheless, the labor arbiter found petitioner entitled to overti+e pa%, pre+iu+
pa% for workin, on rest da%s, and attorne%?s fees in the total a+ount
of P#,5$.!*.
#1
Rulin, of the ).RC
Respondents filed an appeal to the ).RC, which deleted the award of overti+e pa%
and pre+iu+ pa% for workin, on rest da%s. Accordin, to the Co++ission, petitioner
was not entitled to these awards because he was a +ana,erial e+plo%ee.
#4
Rulin, of the Court of Appeals
4n its Resolution dated 3anuar% $, ""1, the CA dis+issed PeYZaranda?s Petition
for Certiorari. The appellate court held that he failed to@ #0 attach copies of the
pleadin,s sub+itted before the labor arbiter and ).RC7 and 0 e>plain wh% the filin,
and service of the Petition was not done b% personal service.
#5
4n its later Resolution dated 3ul% 4, ""1, the CA denied reconsideration on the
,round that petitioner still failed to sub+it the pleadin,s filed before the ).RC.
#2
9ence this Petition.
#$
T;. Issu.s
Petitioner states the issues in this wise@
SThe J).RCK co++itted ,rave abuse of discretion a+ountin, to e>cess or lack of
=urisdiction when it entertained the APPBA. of the respondentJsK despite the lapse of
the +andator% period of TB) DAF(.[\]^]ZYZr]_bl]`ab ]c]dref [g]Zl l]Z[h l]dbr]ZrY_
SThe J).RCK co++itted ,rave abuse of discretion a+ountin, to an e>cess or lack of
=urisdiction when it rendered the assailed RB(O.ET4O)( dated 6a% *, "" and
AE'E(T #2, "" RBDBR(4)' A)D (BTT4)' A(4DB the -ACTEA. A)D .B'A.
-4)D4)'( of the Jlabor arbiterK with respect to the followin,@
S4. The findin, of the Jlabor arbiterK that JPeYZarandaK is a re,ular, co++on
e+plo%ee entitled to +onetar% benefits under Art. * Jof the .abor CodeK.
S44. The findin, that JPeYZarandaK is entitled to the pa%+ent of ODBRT46B PAF and
OT9BR 6O)BTARF :B)B-4T(.S
#*
The Court?s Rulin,
The Petition is not +eritorious.
Preli+inar% 4ssue@
Resolution on the 6erits
The CA dis+issed PeYZaranda?s Petition on purel% technical ,rounds, particularl%
with re,ard to the failure to sub+it supportin, docu+ents.
4n Atillo v. :o+ba%,
#!
the Court held that the crucial issue is whether the docu+ents
acco+pan%in, the petition before the CA sufficientl% supported the alle,ations
therein. Citin, this case, Pi,las&5a+ao v. ).RC
"
sta%ed the dis+issal of an appeal
in the e>ercise of its e8uit% =urisdiction to order the ad=udication on the +erits.
The Petition filed with the CA shows a prima fa#ie case. Petitioner attached his
evidence to challen,e the findin, that he was a +ana,erial e+plo%ee.
#
4n his
6otion for Reconsideration, petitioner also sub+itted the pleadin,s before the labor
arbiter in an atte+pt to co+pl% with the CA rules.

Bvidentl%, the CA could have


ruled on the Petition on the basis of these attach+ents. Petitioner should be
dee+ed in substantial co+pliance with the procedural re8uire+ents.
Ender these e>tenuatin, circu+stances, the Court does not hesitate to ,rant
liberalit% in favor of petitioner and to tackle his substantive ar,u+ents in the
present case. Rules of procedure +ust be adopted to help pro+ote, not frustrate,
substantial =ustice.
1
The Court frowns upon the practice of dis+issin, cases purel%
on procedural ,rounds.
4
Considerin, that there was substantial co+pliance,
5
a
liberal interpretation of procedural rules in this labor case is +ore in keepin, with
the constitutional +andate to secure social =ustice.
2
-irst 4ssue@
Ti+eliness of Appeal
Ender the Rules of Procedure of the ).RC, an appeal fro+ the decision of the labor
arbiter should be filed within #" da%s fro+ receipt thereof.
$
Petitioner?s clai+ that respondents filed their appeal be%ond the re8uired period is
not substantiated. 4n the pleadin,s before us, petitioner fails to indicate when
respondents received the Decision of the labor arbiter. )either did the petitioner
attach a cop% of the challen,ed appeal. Thus, this Court has no +eans to deter+ine
fro+ the records when the #"&da% period co++enced and ter+inated. (ince
petitioner utterl% failed to support his clai+ that respondents? appeal was filed out of
ti+e, we need not belabor that point. The parties alle,in, have the burden of
substantiatin, their alle,ations.
*
(econd 4ssue@
)ature of B+plo%+ent
Petitioner clai+s that he was not a +ana,erial e+plo%ee, and therefore, entitled to
the award ,ranted b% the labor arbiter.
Article * of the .abor Code e>e+pts +ana,erial e+plo%ees fro+ the covera,e of
labor standards. .abor standards provide the workin, conditions of e+plo%ees,
includin, entitle+ent to overti+e pa% and pre+iu+ pa% for workin, on rest
da%s.
!
Ender this provision, +ana,erial e+plo%ees are Sthose whose pri+ar% dut%
consists of the +ana,e+ent of the establish+ent in which the% are e+plo%ed or of
a depart+ent or subdivision.S
1"
The 4+ple+entin, Rules of the .abor Code state that +ana,erial e+plo%ees are
those who +eet the followin, conditions@
S/#0 Their pri+ar% dut% consists of the +ana,e+ent of the establish+ent in which
the% are e+plo%ed or of a depart+ent or subdivision thereof7
S/0 The% custo+aril% and re,ularl% direct the work of two or +ore e+plo%ees
therein7
S/10 The% have the authorit% to hire or fire other e+plo%ees of lower rank7 or their
su,,estions and reco++endations as to the hirin, and firin, and as to the
pro+otion or an% other chan,e of status of other e+plo%ees are ,iven particular
wei,ht.S
1#
The Court disa,rees with the ).RC?s findin, that petitioner was a +ana,erial
e+plo%ee. 9owever, petitioner was a +e+ber of the +ana,erial staff, which also
takes hi+ out of the covera,e of labor standards. .ike +ana,erial e+plo%ees,
officers and +e+bers of the +ana,erial staff are not entitled to the provisions of
law on labor standards.
1
The 4+ple+entin, Rules of the .abor Code define
+e+bers of a +ana,erial staff as those with the followin, duties and
responsibilities@
S/#0 The pri+ar% dut% consists of the perfor+ance of work directl% related to
+ana,e+ent policies of the e+plo%er7
S/0 Custo+aril% and re,ularl% e>ercise discretion and independent =ud,+ent7
S/10 /i0 Re,ularl% and directl% assist a proprietor or a +ana,erial e+plo%ee whose
pri+ar% dut% consists of the +ana,e+ent of the establish+ent in which he is
e+plo%ed or subdivision thereof7 or /ii0 e>ecute under ,eneral supervision work
alon, speciali<ed or technical lines re8uirin, special trainin,, e>perience, or
knowled,e7 or /iii0 e>ecute under ,eneral supervision special assi,n+ents and
tasks7 andcralawlibrar%
S/40 who do not devote +ore than " percent of their hours worked in a workweek
to activities which are not directl% and closel% related to the perfor+ance of the
work described in para,raphs /#0, /0, and /10 above.S
11
As shift en,ineer, petitioner?s duties and responsibilities were as follows@
S#. To suppl% the re8uired and continuous stea+ to all consu+in, units at +ini+u+
cost.
S. To supervise, check and +onitor +anpower work+anship as well as operation of
boiler and accessories.
S1. To evaluate perfor+ance of +achiner% and +anpower.
S4. To follow&up suppl% of waste and other +aterials for fuel.
S5. To train new e+plo%ees for effective and safet% while workin,.
S2. Reco++end parts and supplies purchases.
S$. To reco++end personnel actions such as@ pro+otion, or disciplinar% action.
S*. To check water fro+ the boiler, feedwater and softener, re,enerate softener if
be%ond hardness li+it.
S!. 4+ple+ent Che+ical Dosin,.
S#". Perfor+ other task as re8uired b% the superior fro+ ti+e to ti+e.S
14
The fore,oin, enu+eration, particularl% ite+s #, , 1, 5 and $ illustrates that
petitioner was a +e+ber of the +ana,erial staff. 9is duties and responsibilities
confor+ to the definition of a +e+ber of a +ana,erial staff under the 4+ple+entin,
Rules.
Petitioner supervised the en,ineerin, section of the stea+ plant boiler. 9is work
involved overseein, the operation of the +achines and the perfor+ance of the
workers in the en,ineerin, section. This work necessaril% re8uired the use of
discretion and independent =ud,+ent to ensure the proper functionin, of the stea+
plant boiler. As supervisor, petitioner is dee+ed a +e+ber of the +ana,erial staff.
15
)oteworth%, even petitioner ad+itted that he was a supervisor. 4n his Position Paper,
he stated that he was the fore+an responsible for the operation of the boiler.
12
The
ter+ fore+an i+plies that he was the representative of +ana,e+ent over the
workers and the operation of the depart+ent.
1$
Petitioner?s evidence also showed
that he was the supervisor of the stea+ plant.
1*
9is classification as supervisor is
further evident fro+ the +anner his salar% was paid. 9e belon,ed to the #"; of
respondent?s 154 e+plo%ees who were paid on a +onthl% basis7 the others were
paid onl% on a dail% basis.
1!
On the basis of the fore,oin,, the Court finds no =ustification to award overti+e pa%
and pre+iu+ pa% for rest da%s to petitioner.
A9BRB-ORB, the Petition is DB)4BD. Costs a,ainst petitioner.
SO OR#ERE#.
[G.R. N1. 16B717, M%90; 16 : 2011]
SAMA"ANG MANGGAGA+A SA C"ARTER C"EMICAL SOLI#ARIT) OF
(NIONS IN T"E !"ILI!!INES FOR EM!O+ERMENT AN# REFORMS CSMCC*
S(!ERD, $ACARRIAS -ERR) =ICTORIO * (NION !RESI#ENT,
!ETITIONER,=S. C"ARTER C"EMICAL AN# COATING COR!ORATION,
RES!ON#ENT.
# E C I S I O N
#EL CASTILLO, J.:
The ri,ht to file a petition for certification election is accorded to a labor
or,ani<ation provided that it co+plies with the re8uire+ents of law for proper
re,istration. The inclusion of supervisor% e+plo%ees in a labor or,ani<ation seekin,
to represent the bar,ainin, unit of rank&and&file e+plo%ees does not divest it of its
status as a le,iti+ate labor or,ani<ation. Ae appl% these principles to this case.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of
Appeal?s 6arch #5, ""5 Decision
J#K
in CA&'.R. (P )o. 5*"1, which annulled and
set aside the 3anuar% #1, """ Decision
JK
of the Depart+ent of .abor and
B+plo%+ent /DO.B0 in O(&A&2&51&!! /)CR&OD&6&!!"&"#!0 and the (epte+ber
#2, ""5 Resolution
J1K
den%in, petitioner union?s +otion for reconsideration.
5actual Antecedents
On -ebruar% #!, #!!!, Sama'ang .anggaga,a sa Charter Che+ical (olidarit% of
Enions in the Philippines for B+power+ent and Refor+s /petitioner union0 filed a
petition for certification election a+on, the re,ular rank&and&file e+plo%ees of
Charter Che+ical and Coatin, Corporation /respondent co+pan%0 with the
6ediation Arbitration Enit of the DO.B, )ational Capital Re,ion.
On April #4, #!!!, respondent co+pan% filed an Answer with 6otion to Dis+iss
J4K
on
the ,round that petitioner union is not a le,iti+ate labor or,ani<ation because of /#0
failure to co+pl% with the docu+entation re8uire+ents set b% law, and /0 the
inclusion of supervisor% e+plo%ees within petitioner union.
J5K
/ed-Arbiter6s !ulin'
On April 1", #!!!, 6ed&Arbiter To+as -. -alconitin issued a Decision
J2K
dis+issin,
the petition for certification election. The 6ed&Arbiter ruled that petitioner union is
not a le,iti+ate labor or,ani<ation because the Charter Certificate, SSama-samang
Pa'a(ag ng Pagsapi at Authori<ation,S and SLista'an ng mga Dumalo sa
Pang6ala'atang Pulong at mga Sumang-a(on at Nagratipi6a sa Saligang *atasS
were not e>ecuted under oath and certified b% the union secretar% and attested to
b% the union president as re8uired b% (ection 15 of the .abor Code
J$K
in relation to
(ection #, Rule D4 of Depart+ent Order /D.O.0 )o. !, series of #!!$. The union
re,istration was, thus, fatall% defective.
The 6ed&Arbiter further held that the list of +e+bership of petitioner union
consisted of # batch+an, +ill operator and lead+an who perfor+ed supervisor%
functions. Ender Article 45 of the .abor Code, said supervisor% e+plo%ees are
prohibited fro+ =oinin, petitioner union which seeks to represent the rank&and&file
e+plo%ees of respondent co+pan%.
As a result, not bein, a le,iti+ate labor or,ani<ation, petitioner union has no ri,ht
to file a petition for certification election for the purpose of collective bar,ainin,.
Department of "abor and *mployment6s !ulin'
On 3ul% #2, #!!!, the DO.B initiall% issued a Decision
J*K
in favor of respondent
co+pan% dis+issin, petitioner union?s appeal on the ,round that the latter?s petition
for certification election was filed out of ti+e. Althou,h the DO.B ruled, contrar% to
the findin,s of the 6ed&Arbiter, that the charter certificate need not be verified and
that there was no independent evidence presented to establish respondent
co+pan%?s clai+ that so+e +e+bers of petitioner union were holdin, supervisor%
positions, the DO.B sustained the dis+issal of the petition for certification after it
took =udicial notice that another union, i.e.$ Pinag-isang
La6as .anggaga,a saCharter Che+ical and Coatin, Corporation, previousl% filed a
petition for certification election on 3anuar% #2, #!!*. The Decision ,rantin, the
said petition beca+e final and e>ecutor% on (epte+ber #2, #!!* and was re+anded
for i++ediate i+ple+entation. Ender (ection $, Rule L4 of D.O. )o. !, series of
#!!$, a +otion for intervention involvin, a certification election in an unor,ani<ed
establish+ent should be filed prior to the finalit% of the decision callin, for a
certification election. Considerin, that petitioner union filed its petition onl% on
-ebruar% #4, #!!!, the sa+e was filed out of ti+e.
On +otion for reconsideration, however, the DO.B reversed its earlier rulin,. 4n its
3anuar% #1, """ Decision, the DO.B found that a review of the records indicates
that no certification election was previousl% conducted in respondent co+pan%. On
the contrar%, the prior certification election filed b% Pinag-isang La6as .anggaga,a
sa Charter Che+ical and Coatin, Corporation was, likewise, denied b% the 6ed&
Arbiter and, on appeal, was dis+issed b% the DO.B for bein, filed out of ti+e.
9ence, there was no obstacle to the ,rant of petitioner union?s petition for
certification election, vi9@
+"EREFORE, the +otion for reconsideration is hereb% GRANTE# and the decision
of this Office dated #2 3ul% #!!! is MO#IFIE# to allow the certification election
a+on, the re,ular rank&and&file e+plo%ees of Charter Che+ical and Coatin,
Corporation with the followin, choices@
#. (a+ahan, 6an,,a,awa sa Charter Che+ical&(olidarit% of Enions in the
Philippines for B+power+ent and Refor+ /(6CC&(EPBR07 and
. )o Enion.
.et the records of this case be re+anded to the Re,ional Office of ori,in for the
i++ediate conduct of a certification election, sub=ect to the usual pre&election
conference.
SO #ECI#E#.
J!K
Court of Appeal6s !ulin'
On 6arch #5, ""5, the CA pro+ul,ated the assailed Decision, vi9@
+"EREFORE, the petition is hereb% GRANTE#. The assailed Decision and
Resolution dated 3anuar% #1, """ and -ebruar% #$, """ are hereb% JANN(LLE#K
and SET ASI#E.
SO OR#ERE#.
J#"K
4n nullif%in, the decision of the DO.B, the appellate court ,ave credence to the
findin,s of the 6ed&Arbiter that petitioner union failed to co+pl% with the
docu+entation re8uire+ents under the .abor Code. 4t, likewise, upheld the 6ed&
Arbiter?s findin, that petitioner union consisted of both rank&and&file and
supervisor% e+plo%ees. 6oreover, the CA held that the issues as to the le,iti+ac%
of petitioner union +a% be attacked collaterall% in a petition for certification election
and the infir+it% in the +e+bership of petitioner union cannot be re+edied throu,h
the e>clusion&inclusion proceedin,s in a pre&election conference pursuant to the
rulin, in "o(ota .otor P'ilippines v. "o(ota .otor P'ilippines Corporation Labor
=nion.
J##K
Thus, considerin, that petitioner union is not a le,iti+ate labor
or,ani<ation, it has no le,al ri,ht to file a petition for certification election.
Issu.s
4
Ahether > > > the 9onorable Court of Appeals co++itted ,rave abuse of discretion
tanta+ount to lack of =urisdiction in ,rantin, the respondent Jco+pan%?sK petition
for #ertiorari /CA '.R. )o. (P )o. 5*"10 in spite of the fact that the issues sub=ect
of the respondent co+pan%J?sK petition was alread% settled with finalit% and barred
fro+ bein, re&liti,ated.
44
Ahether > > > the 9onorable Court of Appeals co++itted ,rave abuse of discretion
tanta+ount to lack of =urisdiction in holdin, that the alle,ed +i>ture of rank&and&file
and supervisor% e+plo%eeJsK of petitioner Junion?sK +e+bership is JaK ,round for
the cancellation of petitioner Junion?sK le,al personalit% and dis+issal of JtheK
petition for certification election.
444
Ahether > > > the 9onorable Court of Appeals co++itted ,rave abuse of discretion
tanta+ount to lack of =urisdiction in holdin, that the alle,ed failure to certif% under
oath the local charter certificate issued b% its +other federation and list of the union
+e+bership attendin, the or,ani<ational +eetin, Jis a ,roundK for the cancellation
of petitioner Junion?sK le,al personalit% as a labor or,ani<ation and for the dis+issal
of the petition for certification election.
J#K
etitioner 7nion6s Ar'uments
Petitioner union clai+s that the liti,ation of the issue as to its le,al personalit% to
file the sub=ect petition for certification election is barred b% the 3ul% #2, #!!!
Decision of the DO.B. 4n this decision, the DO.B ruled that petitioner union
co+plied with all the docu+entation re8uire+ents and that there was no
independent evidence presented to prove an ille,al +i>ture of supervisor% and rank&
and&file e+plo%ees in petitioner union. After the pro+ul,ation of this Decision,
respondent co+pan% did not +ove for reconsideration, thus, this issue +ust be
dee+ed settled.
Petitioner union further ar,ues that the lack of verification of its charter certificate
and the alle,ed ille,al co+position of its +e+bership are not ,rounds for the
dis+issal of a petition for certification election under (ection ##, Rule L4 of D.O. )o.
!, series of #!!$, as a+ended, nor are the% ,rounds for the cancellation of a
union?s re,istration under (ection 1, Rule D444 of said issuance. 4t contends that
what is re8uired to be certified under oath b% the local union?s secretar% or
treasurer and attested to b% the local union?s president are li+ited to the union?s
constitution and b%&laws, state+ent of the set of officers, and the books of
accounts.
-inall%, the le,al personalit% of petitioner union cannot be collaterall% attacked but
+a% be 8uestioned onl% in an independent petition for cancellation pursuant to
(ection 5, Rule D, :ook 4D of the Rules to 4+ple+ent the .abor Code and the
doctrine enunciated in "aga(ta( ;ig'lands %nternational !olf Club %n#oprorated v.
"aga(ta( ;ig'lands &mpo(ees =nion-P"!+0.
J#1K
!espondent Company6s Ar'uments
Respondent co+pan% asserts that it cannot be precluded fro+ challen,in, the 3ul%
#2, #!!! Decision of the DO.B. The said decision did not attain finalit% because the
DO.B subse8uentl% reversed its earlier rulin, and, fro+ this decision, respondent
co+pan% ti+el% filed its +otion for reconsideration.
On the issue of lack of verification of the charter certificate, respondent co+pan%
notes that Article 15 of the .abor Code and (ection #, Rule D4 of the 4+ple+entin,
Rules of :ook D, as a+ended b% D.O. )o. !, series of #!!$, e>pressl% re8uires that
the charter certificate be certified under oath.
4t also contends that petitioner union is not a le,iti+ate labor or,ani<ation because
its co+position is a +i>ture of supervisor% and rank&and&file e+plo%ees in violation
of Article 45 of the .abor Code. Respondent co+pan% +aintains that the rulin,
in "o(ota .otor P'ilippines vs. "o(ota .otor P'ilippines Labor =nion
J#4K
continues to
be ,ood case law. Thus, the ille,al co+position of petitioner union nullifies its le,al
personalit% to file the sub=ect petition for certification election and its le,al
personalit% +a% be collaterall% attacked in the proceedin,s for a petition for
certification election as was done here.
Ou9 Ru45&g
The petition is +eritorious.
"'e issue as to t'e legal personalit( of
petitioner union is not barred b( t'e
/ul( >?$ >@@@ De#ision of t'e D0L&.
A review of the records indicates that the issue as to petitioner union?s le,al
personalit% has been ti+el% and consistentl% raised b% respondent co+pan% before
the 6ed&Arbiter, DO.B, CA and now this Court. 4n its 3ul% #2, #!!! Decision, the
DO.B found that petitioner union co+plied with the docu+entation re8uire+ents of
the .abor Code and that the evidence was insufficient to establish that there was an
ille,al +i>ture of supervisor% and rank&and&file e+plo%ees in its +e+bership.
)onetheless, the petition for certification election was dis+issed on the ,round that
another union had previousl% filed a petition for certification election seekin, to
represent the sa+e bar,ainin, unit in respondent co+pan%.
Epon +otion for reconsideration b% petitioner union on 3anuar% #1, """, the DO.B
reversed its previous rulin,. 4t upheld the ri,ht of petitioner union to file the sub=ect
petition for certification election because its previous decision was based on a
+istaken appreciation of facts.
J#5K
-ro+ this adverse decision, respondent co+pan%
ti+el% +oved for reconsideration b% reiteratin, its previous ar,u+ents before the
6ed&Arbiter that petitioner union has no le,al personalit% to file the sub=ect petition
for certification election.
The 3ul% #2, #!!! Decision of the DO.B, therefore, never attained finalit% because
the parties ti+el% +oved for reconsideration. The issue then as to the le,al
personalit% of petitioner union to file the certification election was properl% raised
before the DO.B, the appellate court and now this Court.
"'e #'arter #ertifi#ate need not be
#ertified under oat' b( t'e lo#al unionAs
se#retar( or treasurer and attested to
b( its president.
Preli+inaril%, we +ust note that Con,ress enacted Republic Act /R.A.0 )o.
!4*#
J#2K
which took effect on 3une #4, ""$.
J#$K
This law introduced substantial
a+end+ents to the .abor Code. 9owever, since the operative facts in this case
occurred in #!!!, we shall decide the issues under the pertinent le,al provisions
then in force /i.e., R.A. )o. 2$#5,
J#*K
a+endin, :ook D of the .abor Code, and the
rules and re,ulations
J#!K
i+ple+entin, R.A. )o. 2$#5, as a+ended b% D.O. )o. !,
J"K
series of #!!$0 pursuant to our rulin, in Republi# v. <a,as'ima "e4tile .fg.$
P'ilippines$ %n#.
J#K
4n the +ain, the CA ruled that petitioner union failed to co+pl% with the re8uisite
docu+ents for re,istration under Article 15 of the .abor Code and its i+ple+entin,
rules. 4t a,reed with the 6ed&Arbiter that the Charter Certificate, Sama-samang
Pa'a(ag ng Pagsapi at Authori<ation$ andLista'an ng mga Dumalo sa
Pang6ala'atang Pulong at mga Sumang-a(on at Nagratipi6a sa Saligang *atas were
not e>ecuted under oath. Thus, petitioner union cannot be accorded the status of a
le,iti+ate labor or,ani<ation.
Ae disa,ree.
The then prevailin, (ection #, Rule D4 of the 4+ple+entin, Rules of :ook D, as
a+ended b% D.O. )o. !, series of #!!$, provides@
(ection #. C'artering and #reation of a lo#al #'apter && A dul% re,istered federation
or national union +a% directl% create a localCchapter b% sub+ittin, to the Re,ional
Office or to the :ureau two /0 copies of the followin,@
/a0 A charter certificate issued b% the federation or national union indicatin, the
creation or establish+ent of the localCchapter7
/b0 The na+es of the localCchapter?s officers, their addresses, and the principal
office of the localCchapter7 and
/c0 The localCchapter?s constitution and b%&laws provided that where the
localCchapter?s constitution and b%&laws JareK the sa+e as JthoseK of the federation
or national union, this fact shall be indicated accordin,l%.
All the fore,oin, supportin, re8uire+ents shall be certified under oath b% the
(ecretar% or the Treasurer of the localCchapter and attested to b% its President.
As readil% seen, the Sama-samang Pa'a(ag ng Pagsapi at Authori<ation
and Lista'an ng mga Dumalo sa Pang6ala'atang Pulong at mga Sumang-a(on at
Nagratipi6a sa Saligang *atas are not a+on, the docu+ents that need to be
sub+itted to the Re,ional Office or :ureau of .abor Relations in order to re,ister a
labor or,ani<ation. As to the charter certificate, the above&8uoted rule indicates that
it should be e>ecuted under oath. Petitioner union concedes and the records confir+
that its charter certificate was not e>ecuted under oath. 9owever, in San .iguel
Corporation B.andaue Pa#6aging Produ#ts PlantsC v. .andaue Pa#6ing Produ#ts
Plants-San .iguel Corporation .ont'lies Ran6-and-ile =nion-+ B.PPP-S.PP-
S.A.R=-+C,
JK
which was decided under the auspices of D.O. )o. !, (eries of
#!!$, we ruled &
4n San .iguel oods-Cebu *-.eg eed Plant v. ;on. Laguesma, 11# Phil. 152
/#!!20, the Court ruled that it was &1t &.0.ss%98 for the charter certificate to be
certified and attested b% the localCchapter officers. %d. +;54. t;5s 9u45&g 6%s
7%s.' 1& t;. 5&t.939.t%t51& 1: t;. 39.>51us I234.2.&t5&g Ru4.s 391>5s51&s
6;50; 6.9. su334%&t.' 78 t;. 1BB7 %2.&'2.&ts, we believe that t;. s%2.
'10t95&. 17t%5&s 5& t;5s 0%s.. Considerin, that the charter certificate is prepared
and issued b% the national union and not the localCchapter, 5t '1.s &1t 2%<.
s.&s. t1 ;%>. t;. 410%4E0;%3t.9Js 1::50.9s > > > 0.9t5:8 19 %tt.st t1 %
'10u2.&t 6;50; t;.8 ;%' &1 ;%&' 5& t;. 39.3%9%t51& 1:.
J1K
/B+phasis
supplied0
4n accordance with this rulin,, petitioner union?s charter certificate need not be
e>ecuted under oath. Conse8uentl%, it validl% ac8uired the status of a le,iti+ate
labor or,ani<ation upon sub+ission of /#0 its charter certificate,
J4K
/0 the na+es of
its officers, their addresses, and its principal office,
J5K
and /10 its constitution and
b%&laws
J2K
&& the last two re8uire+ents havin, been e>ecuted under oath b% the
proper union officials as borne out b% the records.
"'e mi4ture of ran6-and-file and supervisor(
emplo(ees in petitioner union does not
nullif( its legal personalit( as a legitimate
labor organi9ation.
The CA found that petitioner union has for its +e+bership both rank&and&file and
supervisor% e+plo%ees. 9owever, petitioner union sou,ht to represent the
bar,ainin, unit consistin, of rank&and&file e+plo%ees. Ender Article 45
J$K
of the
.abor Code, supervisor% e+plo%ees are not eli,ible for +e+bership in a labor
or,ani<ation of rank&and&file e+plo%ees. Thus, the appellate court ruled that
petitioner union cannot be considered a le,iti+ate labor or,ani<ation pursuant
to"o(ota .otor P'ilippines v. "o(ota .otor P'ilippines Corporation Labor
=nion
J*K
/hereinafter "o(ota0.
Preli+inaril%, we note that petitioner union 8uestions the factual findin,s of the
6ed&Arbiter, as upheld b% the appellate court, that # of its +e+bers, consistin, of
batch+an, +ill operator and lead+an, are supervisor% e+plo%ees. 9owever,
petitioner union failed to present an% rebuttal evidence in the proceedin,s below
after respondent co+pan% sub+itted in evidence the =ob descriptions
J!K
of the
aforesaid e+plo%ees. The =ob descriptions indicate that the aforesaid e+plo%ees
e>ercise reco++endator% +ana,erial actions which are not +erel% routinar% but
re8uire the use of independent =ud,+ent, hence, fallin, within the definition of
supervisor% e+plo%ees under Article #/+0
J1"K
of the .abor Code. -or this reason,
we are constrained to a,ree with the 6ed&Arbiter, as upheld b% the appellate court,
that petitioner union consisted of both rank&and&file and supervisor% e+plo%ees.
)onetheless, the inclusion of the aforesaid supervisor% e+plo%ees in petitioner
union does not divest it of its status as a le,iti+ate labor or,ani<ation. The
appellate court?s reliance on "o(otais +isplaced in view of this Court?s subse8uent
rulin, in Republi# v. <a,as'ima "e4tile .fg.$ P'ilippines$ %n#.
J1#K
/hereinafter <a,as'ima0. 4n <a,as'ima, we e>plained at len,th how and wh%
the "o(ota doctrine no lon,er holds swa% under the altered state of the law and
rules applicable to this case, vi9@
R.A. N1. 671, 125tt.' s3.05:85&g t;. .A%0t .::.0t %&8 >514%t51& 1: t;.
391;575t51& [1& t;. 01*25&g45&g 1: su3.9>5s198 %&' 9%&<*%&'*:54.
.23418..s] 61u4' 795&g %71ut 1& t;. 4.g5t52%08 1: % 4%719 19g%&5L%t51&.
4t was the Rules and Re,ulations 4+ple+entin, R.A. )o. 2$#5 /#!*! A+ended
O+nibus Rules0 which supplied the deficienc% b% introducin, the followin,
a+end+ent to Rule 44 /Re,istration of Enions0@
S(ec. #. +'o ma( -oin unions. & > > > Su3.9>5s198 .23418..s %&' s.0u95t8
gu%9's s;%44 &1t 7. .45g574. :19 2.27.9s;53 5& % 4%719 19g%&5L%t51& 1: t;.
9%&<*%&'*:54. .23418..s 7ut 2%8 ?15&, %ss5st 19 :192 s.3%9%t. 4%719
19g%&5L%t51&s 1: t;.59 16&7 Provided, that those supervisor% e+plo%ees who are
included in an e>istin, rank&and&file bar,ainin, unit, upon the effectivit% of Republic
Act )o. 2$#5, shall re+ain in that unit > > >. /B+phasis supplied0
and Rule D /Representation Cases and 4nternal&Enion Conflicts0 of the O+nibus
Rules, vi9@
S(ec. #. +'ere to file. & A petition for certification election +a% be filed with the
Re,ional Office which has =urisdiction over the principal office of the e+plo%er. The
petition shall be in writin, and under oath.
(ec. . +'o ma( file. & An% le,iti+ate labor or,ani<ation or the e+plo%er, when
re8uested to bar,ain collectivel%, +a% file the petition.
The petition, when filed b% a le,iti+ate labor or,ani<ation, shall contain, a+on,
others@
> > > >
C0D '.s0953t51& 1: t;. 7%9g%5&5&g u&5t 6;50; s;%44 7. t;. .23418.9 u&5t
u&4.ss 0590u2st%&0.s 1t;.965s. 9.@u59.H %&' 391>5'.' :u9t;.9, t;%t t;.
%3391395%t. 7%9g%5&5&g u&5t 1: t;. 9%&<*%&'*:54. .23418..s s;%44 &1t
5&04u'. su3.9>5s198 .23418..s %&'E19 s.0u95t8 gu%9's. /B+phasis supplied0
:% that provision, an% 8uestioned +in,lin, will prevent an otherwise le,iti+ate and
dul% re,istered labor or,ani<ation fro+ e>ercisin, its ri,ht to file a petition for
certification election.
Thus, when the issue of the effect of +in,lin, was brou,ht to the fore in "o(ota$ the
Court, citin, Article 45 of the .abor Code, as a+ended b% R.A. )o. 2$#5, held@
SClearl%, based on this provision, a labor or,ani<ation co+posed of both rank&and&
file and supervisor% e+plo%ees is no labor or,ani<ation at all. 4t cannot, for an%
,uise or purpose, be a le,iti+ate labor or,ani<ation. )ot bein, one, %&
19g%&5L%t51& 6;50; 0%995.s % 25Atu9. 1: 9%&<*%&'*:54. %&' su3.9>5s198
.23418..s 0%&&1t 31ss.ss %&8 1: t;. 95g;ts 1: % 4.g5t52%t. 4%719
19g%&5L%t51&, 5&04u'5&g t;. 95g;t t1 :54. % 3.t5t51& :19 0.9t5:50%t51& .4.0t51&
:19 t;. 3u931s. 1: 0144.0t5>. 7%9g%5&5&g. 4t beco+es necessar%,
therefore, %&t.9519 t1 t;. g9%&t5&g 1: %& 19'.9 %44165&g % 0.9t5:50%t51&
.4.0t51&, t1 5&@u59. 5&t1 t;. 01231s5t51& 1: %&8 4%719 19g%&5L%t51&
6;.&.>.9 t;. st%tus 1: t;. 4%719 19g%&5L%t51& 5s 0;%44.&g.' 1& t;. 7%s5s 1:
A9t504. 2/, 1: t;. L%719 C1'..
> > > >
4n the case at bar, as respondent union?s +e+bership list contains the na+es of at
least twent%&seven /$0 supervisor% e+plo%ees in .evel -ive positions, the union
could not, prior to pur,in, itself of its supervisor% e+plo%ee +e+bers, attain the
status of a le,iti+ate labor or,ani<ation. )ot bein, one, it cannot possess the
re8uisite personalit% to file a petition for certification election.S /B+phasis supplied0
4n Dunlop, in which the labor or,ani<ation that filed a petition for certification
election was one for supervisor% e+plo%ees, but in which the +e+bership included
rank&and&file e+plo%ees, the Court reiterated that such labor or,ani<ation had no
le,al ri,ht to file a certification election to represent a bar,ainin, unit co+posed of
supervisors for as lon, as it counted rank&and&file e+plo%ees a+on, its +e+bers.
4t should be e+phasi<ed that the petitions for certification election involved
in"o(ota and Dunlop were filed on )ove+ber 2, #!! and (epte+ber #5, #!!5,
respectivel%7 hence, the #!*! Rules was applied in both cases.
:ut then, on 3une #, #!!$, the #!*! A+ended O+nibus Rules was further
a+ended b% Depart+ent Order )o. !, series of #!!$ /#!!$ A+ended O+nibus
Rules0. (pecificall%, the re8uire+ent under (ec. /c0 of the #!*! A+ended O+nibus
Rules & that the petition for certification election indicate that the bar,ainin, unit of
rank&and&file e+plo%ees has not been +in,led with supervisor% e+plo%ees & was
re+oved. 4nstead, what the #!!$ A+ended O+nibus Rules re8uires is a plain
description of the bar,ainin, unit, thus@
Rule L4
Certification Blections
> > > >
(ec. 4. orms and #ontents of petition. & The petition shall be in writin, and under
oath and shall contain, a+on, others, the followin,@ > > > /c0 The description of the
bar,ainin, unit.
4n Pagpalain ;aulers$ %n#. v. "ra-ano$ the Court had occasion to uphold the validit%
of the #!!$ A+ended O+nibus Rules, althou,h the specific provision involved
therein was onl% (ec. #, Rule D4, to wit@
S(ection. #. C'artering and #reation of a lo#al5#'apter.& A dul% re,istered federation
or national union +a% directl% create a localCchapter b% sub+ittin, to the Re,ional
Office or to the :ureau two /0 copies of the followin,@ a0 a charter certificate
issued b% the federation or national union indicatin, the creation or establish+ent of
the localCchapter7 /b0 the na+es of the localCchapter?s officers, their addresses, and
the principal office of the localCchapter7 and /c0 the localC chapter?s constitution and
b%&laws7 provided that where the localCchapter?s constitution and b%&laws is the
sa+e as that of the federation or national union, this fact shall be indicated
accordin,l%.
All the fore,oin, supportin, re8uire+ents shall be certified under oath b% the
(ecretar% or the Treasurer of the localCchapter and attested to b% its President.S
which does not re8uire that, for its creation and re,istration, a local or chapter
sub+it a list of its +e+bers.
Then ca+e "aga(ta( ;ig'lands %ntAl. !olf Club$ %n#. v. "aga(ta( ;ig'lands
&mplo(ees =nion-P!"+0 in which the core issue was whether +in,lin, affects the
le,iti+ac% of a labor or,ani<ation and its ri,ht to file a petition for certification
election. This ti+e, ,iven the altered le,al +ilieu, the Court abandoned the view
in "o(ota andDunlop and reverted to its pronounce+ent in Lope9 that while there is
a prohibition a,ainst the +in,lin, of supervisor% and rank&and&file e+plo%ees in one
labor or,ani<ation, the .abor Code does not provide for the effects thereof. Thus,
the Court held that after a labor or,ani<ation has been re,istered, it +a% e>ercise
all the ri,hts and privile,es of a le,iti+ate labor or,ani<ation. An% +in,lin, between
supervisor% and rank&and&file e+plo%ees in its +e+bership cannot affect its
le,iti+ac% for that is not a+on, the ,rounds for cancellation of its re,istration,
unless such +in,lin, was brou,ht about b% +isrepresentation, false state+ent or
fraud under Article 1! of the .abor Code.
4n San .iguel Corp. B.andaue Pa#6aging Produ#ts PlantsC v. .andaue Pa#6ing
Produ#ts Plants-San .iguel Pa#6aging Produ#ts-San .iguel Corp. .ont'lies Ran6-
and-ile =nion-+$ the Court e>plained that since the #!!$ A+ended O+nibus
Rules does not re8uire a local or chapter to provide a list of its +e+bers, it would
be i+proper for the DO.B to den% reco,nition to said local or chapter on account of
an% 8uestion pertainin, to its individual +e+bers.
6ore to the point is Air P'ilippines Corporation v. *ureau of Labor Relations$

which
involved a petition for cancellation of union re,istration filed b% the e+plo%er in
#!!! a,ainst a rank&and&file labor or,ani<ation on the ,round of +i>ed
+e+bership@

the Court therein reiterated its rulin, in "aga(ta( ;ig'lands that the
inclusion in a union of dis8ualified e+plo%ees is not a+on, the ,rounds for
cancellation, unless such inclusion is due to +isrepresentation, false state+ent or
fraud under the circu+stances enu+erated in (ections /a0 and /c0 of Article 1! of
the .abor Code.
All said, while the latest issuance is R.A. )o. !4*#, the #!!$ A+ended O+nibus
Rules, as interpreted b% the Court in "aga(ta( ;ig'lands, San .iguel and Air
P'ilippines$ had alread% set the tone for it. "o(ota and Dunlop no lon,er hold swa%
in the present altered state of the law and the rules.
J1K
JEnderline suppliedK
The applicable law and rules in the instant case are the sa+e as those
in <a,as'ima because the present petition for certification election was filed in
#!!! when D.O. )o. !, series of #!!$, was still in effect. 9ence, <a,as'ima applies
with e8ual force here. As a result, petitioner union was not divested of its status as
a le,iti+ate labor or,ani<ation even if so+e of its +e+bers were supervisor%
e+plo%ees7 it had the ri,ht to file the sub=ect petition for certification election.
"'e legal personalit( of petitioner union
#annot be #ollaterall( atta#6ed b( respondent
#ompan( in t'e #ertifi#ation ele#tion pro#eedings.
Petitioner union correctl% ar,ues that its le,al personalit% cannot be collaterall%
attacked in the certification election proceedin,s. As we e>plained in <a,as'ima@
B>cept when it is re8uested to bar,ain collectivel%, an e+plo%er is a +ere b%stander
to an% petition for certification election7 such proceedin, is non&adversarial and
+erel% investi,ative, for the purpose thereof is to deter+ine which or,ani<ation will
represent the e+plo%ees in their collective bar,ainin, with the e+plo%er. The choice
of their representative is the e>clusive concern of the e+plo%ees7 the e+plo%er
cannot have an% partisan interest therein7 it cannot interfere with, +uch less
oppose, the process b% filin, a +otion to dis+iss or an appeal fro+ it7 not even a
+ere alle,ation that so+e e+plo%ees participatin, in a petition for certification
election are actuall% +ana,erial e+plo%ees will lend an e+plo%er le,al personalit%
to block the certification election. The e+plo%er?s onl% ri,ht in the proceedin, is to
be notified or infor+ed thereof.
The a+end+ents to the .abor Code and its i+ple+entin, rules have buttressed that
polic% even +ore.
J11K
+"EREFORE, the petition is GRANTE#. The 6arch #5, ""5 Decision and
(epte+ber #2, ""5 Resolution of the Court of Appeals in CA&'.R. (P )o. 5*"1
are RE=ERSE# %&' SET ASI#E. The 3anuar% #1, """ Decision of the Depart+ent
of .abor and B+plo%+ent in O(&A&2&51&!! /)CR&OD&6&!!"&"#!0
is REINSTATE#.
)o pronounce+ent as to costs.
SO OR#ERE#.
[G.R. N1. 187887 : S.3t.27.9 07, 2011]
!AMELA FLORENTINA !. -(M(A#, !ETITIONER, =S. "I*FL)ER FOO#, INC.
AN#EOR -ES(S R. MONTEMA)OR, RES!ON#ENTS.
# E C I S I O N
MEN#O$A, J.:
This is a petition for review on certiorari assailin, the April ", ""! Decision
J#K
of
the Court of Appeals BCAC in CA&'.R. (P )o. "1142, which reversed the Au,ust #",
""2 Decision
JK
and the )ove+ber !, ""$ Resolution
J1K
of the )ational .abor
Relations Co++ission, 4
th
DivisionBNLRCC, in ).RC Case )o. D&"""*#1&"2. The
).RC Decision and Resolution affir+ed in toto the Decision
J4K
of the .abor Arbiter
3ulie C. Rondu8ue BLAC in RA: Case )o. D44&#"&2!&"5 favorin, the petitioner.
T;. F%0ts@
On 6a% , #!!5, petitioner Pa+ela -lorentina P. 3u+uad B/umuadC be,an her
e+plo%+ent with respondent 9i&-l%er -ood, 4nc. B;i-l(erC, as +ana,e+ent trainee.
9i&-l%er is a corporation licensed to operate 5entuck% -ried
Chicken B<CC restaurants in the Philippines. :ased on her perfor+ance throu,h the
%ears, 3u+uad received several pro+otions until she beca+e the area +ana,er for
the entire Disa%as&6indanao # re,ion, co+prisin, the provinces of Cebu, :acolod,
4loilo and :ohol.
J5K
Aside fro+ bein, responsible in +onitorin, her subordinates, 3u+uad was tasked
to@ #0 be hi,hl% visible in the restaurants under her =urisdiction7 0 +onitor and
support da%&to&da% operations7 and 10 ensure that all the facilities and e8uip+ent at
the restaurant were properl% +aintained and serviced.
J2K
A+on, the branches under
her supervision were the 5-C branches in 'aisano 6all, Cebu Cit% B<C-!aisanoC7 in
Coco+all, Cebu Cit% B<C-Co#omallC7 and in 4sland Cit% 6all, :oholB<C-*o'olC.
As area +ana,er, 3u+uad was allowed to avail of 9i&-l%er?s car loan pro,ra+,
J$K
wherein fort%B23DC percent of the total loanable a+ount would be subsidi<ed b%
9i&-l%er and the re+ainin, si>t% B?3DC percent would be deducted fro+ her salar%.
4t was also a,reed that in the event that she would resi,n or would be ter+inated
prior to the pa%+ent in full of the said car loan, she could opt to surrender the car
to 9i&-l%er or to pa% the full balance of the loan.
J*K
4n =ust her first %ear as Area 6ana,er, 3u+uad ,ained distinction and was awarded
the 1
rd
top area +ana,er nationwide. (he was rewarded with a trip to (in,apore for
her e>cellent perfor+ance.
J!K
On October 4, ""4, 9i -l%er conducted a food safet%, service and sanitation audit
at 5-C&'aisano. The audit, deno+inated as C9A6P( B>cellence
Review BC&RC, revealed several sanitation violations, such as the presence of
rodents and the use of a defective chiller for the stora,e of food.
J#"K
Ahen asked to
e>plain, 3u+uad first pointed out that she had alread% taken steps to prevent the
further infestation of the branch. As to wh% the branch beca+e infested with
rodents, 3u+uad faulted +ana,e+ent?s decision to ter+inate the services of the
branch?s pest control pro,ra+ and to rel% solel% on the pest control pro,ra+ of the
+all. As for the defective chiller, she e>plained that it was under repair at the ti+e
of the CBR.
J##K
(oon thereafter, 9i&-l%er ordered the 5-C&'aisano branch closed.
Then, so+eti+e in 3une of ""5, 9i&-l%er audited the accounts of 5-C&:ohol a+id
reports that certain e+plo%ees were coverin, up cash shorta,es. As a result, the
followin, irre,ularities were discovered@ #0 cash shorta,e a+ountin, to P2,!".*57
0 dela% in the deposits of cash sales b% an avera,e of three da%s7 10 the presence
of two sealed cash&for&deposit envelopes containin, paper cut&outs instead of cash7
40 falsified entries in the deposit lo,book7 50 lapses in inventor% control7 and 20
+aterial product spoila,e.
J#K
4n her report re,ardin, the incident, 3u+uad
disclai+ed an% fault in the incident b% pointin, out that she was the one responsible
for the discover% of this irre,ularit%.
J#1K
On Au,ust $, ""5, 9i&-l%er conducted another CBR, this ti+e at its 5-C&Coco+all
branch. 'rout and leaks at the branch?s kitchen wall, dried up spills fro+ the
+arinator, as well as a live rat under post+i>, and si,ns of rodent
,nawin,Cinfestation were found.
J#4K
This ti+e, 3u+uad e>plained to +ana,e+ent
that she had been bus% conductin, +ana,e+ent tea+ +eetin,s at the other 5-C
branches and that, at the date the CBR was conducted, she had no scheduled visit
at the 5-C&Coco+all branch.
J#5K
(eekin, to hold 3u+uad accountable for the irre,ularities uncovered in the branches
under her supervision, 9i&-l%er sent 3u+uad an 4rre,ularities Report
J#2K
and )otice of
Char,es
J#$K
which she received on (epte+ber 5, ""5. On (epte+ber $, ""5
3u+uad sub+itted her written e>planation.
J#*K
On (epte+ber *, ""5, 9i&-l%er held
an ad+inistrative hearin, where 3u+uad appeared with counsel. Apparentl% not
satisfied with her e>planations, 9i&-l%er served her a )otice of Dis+issal
J#!K
dated
October #4, ""5, effectin, her ter+ination on October #$, ""5.
This pro+pted 3u+uad to file a co+plaint a,ainst 9i&-l%er andCor 3esus R.
6onte+a%orB.ontema(orC for ille,al dis+issal before the ).RC on October #$,
""5, pra%in, for reinstate+ent and pa%+ent of separation pa%, #1
th
+onth pa%,
service incentive leave, +oral and e>e+plar% da+a,es, and attorne%?s fees. 3u+uad
also sou,ht the rei+burse+ent of the a+ount e8uivalent to her fort% percent /4";0
contribution to 9i&-l%er?s subsidi<ed car loan pro,ra+.
Ahile the .A found that 3u+uad was not co+pletel% bla+eless for the ano+alies
discovered, she was of the view that the e+plo%er?s prero,ative to dis+iss or la%off
an e+plo%ee S+ust be e>ercised without abuse of discretionS and Sshould be
te+pered with co+passion and understandin,.S
J"K
Thus, the dis+issal was too
harsh considerin, the circu+stances. After findin, that no serious cause for
ter+ination e>isted, the .A ruled that 3u+uad was ille,all% dis+issed. The .A
disposed@
A9BRB-ORB, D4BABD -RO6 T9B -ORB'O4)' PRB64(B(, =ud,+ent is hereb%
rendered declarin, co+plainant?s dis+issal as 4..B'A.. Conse8uentl%,
reinstate+ent not bein, feasible, respondents 94&-.FBR -OOD, 4)C. A)D OR 3B(E(
R. 6O)TB6AFOR are hereb% ordered to pa%, =ointl% and severall%, co+plainant
PA6B.A -.ORB)T4)A P. 3E6EAD, the total a+ount of T9RBB 9E)DRBD T94RTF&(4L
T9OE(A)D -OER 9E)DRBD PB(O( /P112,4"".""0, Philippine currenc%,
representin, (eparation Pa%, within ten /#"0 da%s fro+ receipt hereof, throu,h the
Cashier of this Arbitration :ranch.
-urther, sa+e respondents are ordered to rei+burse co+plainant an a+ount
e8uivalent to 4"; of the value of her car loaned pursuant to the car loan
entitle+ent +e+orandu+.
Other clai+s are D4(64((BD for lack of +erit.
J#K
:oth 3u+uad and 9i&-l%er appealed to the ).RC. 3u+uad faulted the .A for not
awardin, backwa,es and da+a,es despite its findin, that she was ille,all%
dis+issed. 9i&-l%er and 6onte+a%or, on the other hand, assailed the findin, that
3u+uad was ille,all% dis+issed and that the% were solidaril% liable therefor. The%
also 8uestioned the orders of the .A that the% pa% separation pa% and rei+burse the
fort% percent /4";0 of the loan 3u+uad paid pursuant to 9i&-l%er?s car entitle+ent
pro,ra+.
Bchoin, the findin, of the .A that the dis+issal of 3u+uad was too harsh, the ).RC
affir+ed in toto the .A decision dated Au,ust #", ""2. 4n addition, the ).RC
noted that even before the 4rre,ularities Report and )otice of Char,es were ,iven to
3u+uad on (epte+ber 5, ""5, two /0 electronic +ails Be-mailsC between
6onte+a%or and officers of 9i&-l%er showed that 9i&-l%er was alread% deter+ined to
ter+inate 3u+uad. The first e&+ail
JK
read@
-ro+@ 3ess R. 6onte+a%or
(ent@ Tuesda%, Au,ust #2, ""5 5@5! P6
To@ bebe chaves7 6aria 3udith ). 6arcelo7 3ennifer Colo+a Ravela7 :ernard 3oseph
A. Delasco
Cc@ Od=ie :elar+ino7 3esse D. Cru<
(ub=ect@ RB@ "4! 5-C Coco+all & -ood (afet% RiskCProduct Iualit% Diolation
4 a,ree if the sanctions are li,ht we should chan,e the+. 4n the case of Pa+ela
however, the fact that Cebu Colon store had these violations is not the first ti+e this
incident has happened in her area. The :ohol case was also in her area and +a%be
these two incidents is enou,h ,rounds alread% for her to be ter+inated or +a%be
asked to resi,n instead of bein, ter+inated.
4 know if an% Ops person serves e>pired product this is ,round for ter+ination. 4
think servin, off specs products such as this lu+p% ,rav% in the case of Coco 6all
should be ,rounds for ter+ination. 9ow +an% custo+ers have we lost due to this
lu+p% clearl% out of specs ,rav%P " custo+ers +a%be.
-.ss.
The second e&+ail,
J1K
sent b% one :ebe Chaves of 9i&-l%er to 6onte+a%or and other
officers of 9i&-l%er, reads@
-ro+@ bebe chaves
(ent@ (at !C1C""5 1@45 A6
To@ 6aria 3udith ). 6arcelo
CC@ 3ennifer Colo+a Ravela7 'oodwin :elar+ino7 3ess R. 6onte+a%or
(ub=ect@ RB@ "4! 5-C Coco+all & -ood (afet% RiskCProduct Iualit% Diolation
-1?1,
3ust an update of our +eetin, %esterda% with 3ennifer. After havin, reviewed the
case and all e>istin, docu+ents, we have decided that there is enou,h ,round to
ter+inate her services. 4RC3ennifer are workin, hand in hand to service due notice
and close the case.
Accordin, to the ).RC, these e&+ails were proof that 3u+uad was denied due
process considerin, that no +atter how she would refute the char,es hurled a,ainst
her, the decision of 9i&-l%er to ter+inate her would not chan,e.
J4K
(ustainin, the order of the .A to rei+burse 3u+uad the a+ount e8uivalent to 4";
of the value of the car loan, the ).RC e>plained that 3u+uad en=o%ed this benefit
durin, her period of e+plo%+ent as Area 6ana,er and could have still en=o%ed the
sa+e if not for her ille,al dis+issal.
J5K
-inall%, the ).RC held that the active participation of 6onte+a%or in the ille,al
dis+issal of 3u+uad =ustified his solidar% liabilit% with 9i&-l%er.
:oth 3u+uad and 9i&-l%er sou,ht reconsideration of the ).RC Decision but their
respective +otions were denied on )ove+ber !, ""$.
J2K
Alle,in, ,rave abuse of discretion on the part of the ).RC, 9i&-l%er appealed the
case before the CA in Cebu Cit%.
On April ", ""!, the CA rendered the sub=ect decision reversin, the decision of
the labor tribunal. The appellate court disposed@
A9BRB-ORB, in view of the fore,oin,, the Petition is 'RA)TBD. The Decision of the
)ational .abor Relations Co++ission /4
th
Division0 dated * (epte+ber ""$ in
).RC Case )o. D&"""*#1&"2 /RA: Case )o. D44&#"&2!&"5, as well as the Decision
dated #" Au,ust ""2 of the 9onorable .abor Arbiter 3ulie C. Rondu8ue, and the !
)ove+ber ""2 Resolution of the ).RC den%in, petitioner?s 6otion for
Reconsideration dated "* )ove+ber ""$, are hereb% RBDBR(BD and (BT A(4DB.
)o pronounce+ent as to costs.
SO OR#ERE#.
J$K
Contrar% to the findin,s of the .A and the ).RC, the CA was of the opinion that the
re8uire+ents of substantive and procedural due process were co+plied with
affordin, 3u+uad an opportunit% to be heard first, when she sub+itted her written
e>planation and then, when she was infor+ed of the decision and the basis of her
ter+ination.
J*K
As for the e&+ail e>chan,es between 6onte+a%or and the officers
of 9i&-l%er, the CA opined that the% did not e8uate to a predeter+ination of
3u+uad?s ter+ination. 4t was of the view that the e&+ail e>chan,es were +ere
discussions between 6onte+a%or and other officers of 9i&-l%er on whether ,rounds
for disciplinar% action or ter+ination e>isted. To the +ind of the CA, the e&+ails =ust
showed that 9i&-l%er e>tensivel% deliberated the nature and cause of the char,es
a,ainst 3u+uad.
J!K
On the issue of loss of trust and confidence, the CA considered the deplorable
sanitar% conditions and the cash shorta,es uncovered at three of the seven 5-C
branches supervised b% 3u+uad as enou,h bases for 9i&-l%er to lose its trust and
confidence in her.
J1"K
Aith re,ard to the rei+burse+ent of the 4"; of the car loan as awarded b% the
labor tribunal, the CA opined that the ter+s of the car loan pro,ra+ did not provide
for rei+burse+ent in case an e+plo%ee was ter+inated for =ust cause and the%, in
fact, re8uired that the e+plo%ee should sta% with the co+pan% for at least three /10
%ears fro+ the date of the loan to obtain the full 4"; subsid%. The CA further
stated that the ri,hts and obli,ations of the parties should be liti,ated in a separate
civil action before the re,ular courts.
J1#K
The CA also e>culpated 6onte+a%or fro+ an% liabilit% since it considered 3u+uad?s
dis+issal with a =ust cause and it found no evidence that he acted with +alice and
bad faith.
J1K
9ence, this petition on the followin,
GRO(N#S@
T"E "ONORABLE CO(RT OF A!!EALS GRA=EL) ERRE# IN (!"OL#[ING] AS
=ALI# T"E TERMINATION OF !ETITIONERJS SER=ICES B) RES!ON#ENTS.
T"E "ONORABLE CO(RT OF A!!EALS GRA=EL) ERRE# +"EN IT RE=ERSE#
T"E #ECISION OF T"E NATIONAL LABOR RELATIONS COMMISSION
/
T"
#I=ISION OF CEB( CIT) +"IC" AFFIRME# T"E #ECISION OF LABOR
ARBITER -(L(E REN#OF(E.
T"E "ONORABLE CO(RT OF A!!EALS GRA=EL) ERRE# +"EN IT RE=ERSE#
T"E #ECISION OF T"E NATIONAL LABOR RELATIONS COMMISSION
/
T"
#I=ISION OF CEB( CIT) +"EN IT R(LE# T"AT !ETITIONER IS NOT
ENTITLE# TO REIMB(RSEMENT OF FORT) !ERCENT C/0OD OF T"E CAR
=AL(E BENEFITS.
4t is a hornbook rule that factual findin,s of ad+inistrative or 8uasi&=udicial bodies,
which are dee+ed to have ac8uired e>pertise in +atters within their respective
=urisdictions, are ,enerall% accorded not onl% respect but even finalit%, and bind the
Court when supported b% substantial evidence.
J11K
Ahile this rule is strictl% adhered
to in labor cases, the sa+e rule, however, ad+its e>ceptions. These include@ /#0
when there is ,rave abuse of discretion7 /0 when the findin,s are ,rounded on
speculation7 /10 when the inference +ade is +anifestl% +istaken7 /40 when the
=ud,+ent of the Court of Appeals is based on a +isapprehension of facts7 /50 when
the factual findin,s are conflictin,7 /20 when the Court of Appeals went be%ond the
issues of the case and its findin,s are contrar% to the ad+issions of the parties7 /$0
when the Court of Appeals overlooked undisputed facts which, if properl%
considered, would =ustif% a different conclusion7 /*0 when the facts set forth b% the
petitioner are not disputed b% the respondent7 and /!0 when the findin,s of the
Court of Appeals are pre+ised on the absence of evidence and are contradicted b%
the evidence on record.
J14K
4n the case at bench, the factual findin,s of the CA differ fro+ that of the .A and
the ).RC. This diver,ence of positions between the CA and the labor tribunal below
constrains the Court to review and evaluate assiduousl% the evidence on record.
The petition is without +erit.
On whether 3u+uad was ille,all% dis+issed, Article * of the .abor Code provides@
Art. *. "ermination b( &mplo(er. && An e+plo%er +a% ter+inate an e+plo%+ent
for an% of the followin, causes@
/a0 (erious +isconduct or willful disobedience b% the e+plo%ee of the lawful orders
of his e+plo%er or representative in connection with his work7
/b0 'ross and habitual ne,lect b% the e+plo%ee of his duties7
/c0 -raud or willful breach b% the e+plo%ee of the trust reposed in hi+ b% his
e+plo%er or dul% authori<ed representative7
/d0 Co++ission of a cri+e or offense b% the e+plo%ee a,ainst the person of his
e+plo%er or an% i++ediate +e+ber of his fa+il% or his dul% authori<ed
representative7 and
/e0 Other causes analo,ous to the fore,oin,.
3u+uad was ter+inated for ne,lect of dut% and breach of trust and confidence.
'ross ne,li,ence connotes want or absence of or failure to e>ercise sli,ht care or
dili,ence, or the entire absence of care. 4t evinces a thou,htless disre,ard of
conse8uences without e>ertin, an% effort to avoid the+. -raud and willful ne,lect of
duties i+pl% bad faith of the e+plo%ee in failin, to perfor+ his =ob, to the detri+ent
of the e+plo%er and the latter?s business. 9abitual ne,lect, on the other hand,
i+plies repeated failure to perfor+ one?s duties for a period of ti+e, dependin,
upon the circu+stances. 4t has been said that a sin,le or an isolated act of
ne,li,ence cannot constitute as a =ust cause for the dis+issal of an e+plo%ee.
J15K
To
be a ,round for re+oval, the ne,lect of dut% +ust be both gross and 'abitual.
J12K
On the other hand, breach of trust and confidence, as a =ust cause for ter+ination
of e+plo%+ent, is pre+ised on the fact that the e+plo%ee concerned holds a
position of trust and confidence, where ,reater trust is placed b% +ana,e+ent and
fro+ who+ ,reater fidelit% to dut% is correspondin,l% e>pected. The betra%al of this
trust is the essence of the offense for which an e+plo%ee is penali<ed.
J1$K
4t should be noted, however, that the findin, of ,uilt or innocence in a char,e of
,ross and habitual ne,lect of dut% does not preclude the findin, of ,uilt% or
innocence in a char,e of breach of trust and confidence. Bach of the char,es +ust
be treated separatel%, as the law itself has treated the+ separatel%. To repeat, to
warrant re+oval fro+ service for ,ross and habitual ne,lect of dut%, it +ust be
shown that the ne,li,ence should not +erel% be gross$ but also'abitual. 4n breach
of trust and confidence, so lon, as it is shown there is so+e basis for +ana,e+ent
to lose its trust and confidence and that the dis+issal was not used as an occasion
for abuse, as a subterfu,e for causes which are ille,al, i+proper, and un=ustified and
is ,enuine, that is, not a +ere afterthou,ht intended to =ustif% an earlier action
taken in bad faith, the free will of +ana,e+ent to conduct its own business affairs
to achieve its purpose cannot be denied.
After an assiduous review of the facts as contained in the records, the Court is
convinced that 3u+uad cannot be dis+issed on the ,round of ,ross and habitual
ne,lect of dut%. The Court notes the apparent ne,lect of 3u+uad of her dut% in
ensurin, that her subordinates were properl% +onitored and that she had dutifull%
done all that was e>pected of her to ensure the safet% of the consu+in, public who
continue to patroni<e the 5-C branches under her =ursidiction. 9ad 3u+uad
dischar,ed her duties to be hi,hl% visible in the restaurants under her =urisdiction,
+onitor and support the da% to da% operations of the branches and ensure that all
the facilities and e8uip+ent at the restaurant were properl% +aintained and
serviced, the deplorable conditions and irre,ularities at the various 5-C branches
under her =urisdiction would have been prevented.
Considerin,, however, that over a %ear had lapsed between the incidences at 5-C&
'aisano and 5-C&:ohol, and that the nature of the ano+alies uncovered were each
of a different nature, the Court finds that her acts or lack of action in the
perfor+ance of her duties is not born of habit.
Despite sa%in, this, it cannot be denied that 3u+uad willfull% breached her duties as
to be unworth% of the trust and confidence of 9i&-l%er. -irst, there is no den%in, that
3u+uad was a +ana,erial e+plo%ee. As correctl% noted b% the appellate court,
3u+uad e>ecuted +ana,e+ent policies and had the power to discipline the
e+plo%ees of 5-C branches in her area. (he reco++ended actions on e+plo%ees
to the head office. Pertinent is Article # /+0 of the .abor Code definin, a
+ana,erial e+plo%ee as one who is vested with powers or prero,atives to la% down
and e>ecute +ana,e+ent policies andCor hire, transfer, suspend, la% off, recall,
dischar,e, assi,n or discipline e+plo%ees.
:ased on established facts, the +ere e>istence of the ,rounds for the loss of trust
and confidence =ustifies petitioner?s dis+issal. Pursuant to the Court?s rulin, in Lima
Land$ %n#. v. Cuevas$
J1*K
as lon, as there is so+e basis for such loss of confidence,
such as when the e+plo%er has reasonable ,round to believe that the e+plo%ee
concerned is responsible for the purported +isconduct, and the nature of his
participation therein renders hi+ unworth% of the trust and confidence de+anded of
his position, a +ana,erial e+plo%ee +a% be dis+issed.
4n the present case, the CBR?s reports of 9i&-l%er show that there were ano+alies
co++itted in the branches +ana,ed b% 3u+uad. On the principle
of respondeat superior or co++and responsibilit% alone, 3u+uad +a% be held liable
for ne,li,ence in the perfor+ance of her +ana,erial duties. (he +a% not have been
directl% involved in causin, the cash shorta,es in 5-C&:ohol, but her involve+ent in
not perfor+in, her dut% +onitorin, and supportin, the da% to da% operations of the
branches and ensure that all the facilities and e8uip+ent at the restaurant were
properl% +aintained and serviced, could have trul% prevented the whole debacle
fro+ ever occurrin,.
6oreover, it is observed that rather than takin, proactive steps to prevent the
ano+alies at her branches, 3u+uad +erel% effected re+edial +easures. 4n the
restaurant business where the health and well&bein, of the consu+in, public is at
stake, this does not suffice. Thus, there is reasonable basis for 9i&-l%er to withdraw
its trust in her and dis+issin, her fro+ its service.
The dis8uisition of the appellate court on the +atter is also worth +entionin,@
4n this case, there is a+ple evidence that private respondent indeed co++itted acts
=ustif%in, loss of trust and confidence of 9i&-l%er, and eventuall%, which resulted to
her dis+issal fro+ service. Private respondent?s +is+ana,e+ent and ne,li,ence in
supervisin, the effective operation of 5-C branches in the span of less than a %ear,
resultin, in the closure of 5-C&'aisano due to deplorable sanitar% conditions, cash
shorta,es in 5-C&:ohol, in which the said branch, at the ti+e of discover%, was onl%
several +onths into operation, and the poor sanitation at 5-C&Coco+all. The ,larin,
fact that three /10 out of the seven /$0 branches under her area were ne,lected
cannot be ,lossed over b% private respondent?s e>planation that there was no
ne,li,ence on her part as the sanitation proble+ was structural, that she had been
usuall% bus% conductin, +ana,e+ent tea+ +eetin,s in several branches of 5-C in
her area or that she had no participation whatsoever in the alle,ed cash shorta,es.
> > >
4t bears stressin, that both the .abor Arbiter and the ).RC found that private
respondent was indeed la> in her duties. Thus, said the ).RC@ S>>> JiKt is Our
considered view that >>> co+plainant cannot totall% clai+ that she was not re+iss
in her duties >>>.
J1!K
As the e+plo%er, 9i&-l%er has the ri,ht to re,ulate, accordin, to its discretion and
best =ud,+ent, all aspects of e+plo%+ent, includin, work assi,n+ent, workin,
+ethods, processes to be followed, workin, re,ulations, transfer of e+plo%ees,
work supervision, la%&off of workers and the discipline, dis+issal and recall of
workers. 6ana,e+ent has the prero,ative to discipline its e+plo%ees and to i+pose
appropriate penalties on errin, workers pursuant to co+pan% rules and re,ulations.
J4"K
(o lon, as the% are e>ercised in ,ood faith for the advance+ent of the e+plo%er?s
interest and not for the purpose of defeatin, or circu+ventin, the ri,hts of the
e+plo%ees under special laws or under valid a,ree+ents, the e+plo%er?s e>ercise of
its +ana,e+ent prero,ative +ust be upheld.
J4#K
4n this case, 9i&-l%er e>ercised in ,ood faith its +ana,e+ent prero,ative as there is
no dispute that it has lost trust and confidence in her and her +ana,erial abilities,
to its da+a,e and pre=udice. 9er dis+issal, was therefore, =ustified.
As for 3u+uad?s clai+ for the rei+burse+ent of the 4"; of the value of the car loan
subsidi<ed b% 9i&-l%er under its car loan polic%, the sa+e +ust also be denied. The
ri,hts and obli,ations of the parties to a car loan a,ree+ent is not a proper issue in
a labor dispute but in a civil one.
J4K
4t involves the relationship of debtor and creditor
rather than e+plo%ee&e+plo%er relations.
J41K
3urisdiction, therefore, lies with the
re,ular courts in a separate civil action.
J44K
The law i+poses +an% obli,ations on the e+plo%er such as providin, =ust
co+pensation to workers, observance of the procedural re8uire+ents of notice and
hearin, in the ter+ination of e+plo%+ent. On the other hand, the law also
reco,ni<es the ri,ht of the e+plo%er to e>pect fro+ its workers not onl% ,ood
perfor+ance, ade8uate work and dili,ence, but also ,ood conduct and lo%alt%. The
e+plo%er +a% not be co+pelled to continue to e+plo% such persons whose
continuance in the service will patentl% be ini+ical to its interests.
J45K
+"EREFORE, the petition is #ENIE#.
SO OR#ERE#.
[G.R. N1. 17B6,2 : M%90; 06, 2012]
!EO!LEGS BROA#CASTING SER=ICE CBOMBO RA#)O !"ILS., INC.D,
!ETITIONER, =S. T"E SECRETAR) OF T"E #E!ARTMENT OF LABOR AN#
EM!LO)MENT, T"E REGIONAL #IRECTOR, #OLE REGION =II, AN#
-AN#ELEON -(E$AN, RES!ON#ENTS.
R E S O L ( T I O N
=ELASCO -R., J.:
4n a Petition for Certiorari under Rule 25, petitioner PeopleMs :roadcastin, (ervice,
4nc. /:o+bo Rad%o Phils., 4nc.0 8uestioned the Decision and Resolution of the Court
of Appeals /CA0 dated October 2, ""2 and 3une 2, ""$, respectivel%, in C.A.
'.R. CB:&(P )o. ""*55.cralaw
Private respondent 3andeleon 3ue<an filed a co+plaint a,ainst petitioner with the
Depart+ent of .abor and B+plo%+ent /DO.B0 Re,ional Office )o. D44, Cebu Cit%, for
ille,al deduction, nonpa%+ent of service incentive leave, #1th +onth pa%, pre+iu+
pa% for holida% and rest da% and ille,al di+inution of benefits, dela%ed pa%+ent of
wa,es and noncovera,e of (((, PA'&4:4' and Philhealth.
J#K
After the conduct of
su++ar% investi,ations, and after the parties sub+itted their position papers, the
DO.B Re,ional Director found that private respondent was an e+plo%ee of
petitioner, and was entitled to his +one% clai+s.
JK
Petitioner sou,ht reconsideration
of the DirectorMs Order, but failed. The Actin, DO.B (ecretar% dis+issed petitionerMs
appeal on the ,round that petitioner sub+itted a Deed of Assi,n+ent of :ank
Deposit instead of postin, a cash or suret% bond. Ahen the +atter was brou,ht
before the CA, where petitioner clai+ed that it had been denied due process, it was
held that petitioner was accorded due process as it had been ,iven the opportunit%
to be heard, and that the DO.B (ecretar% had =urisdiction over the +atter, as the
=urisdictional li+itation i+posed b% Article #! of the .abor Code on the power of
the DO.B (ecretar% under Art. #*/b0 of the Code had been repealed b% Republic
Act )o. /RA0 $$1".
J1K
4n the Decision of this Court, the CA Decision was reversed and set aside, and the
co+plaint a,ainst petitioner was dis+issed. The dispositive portion of the Decision
reads as follows@
+"EREFORE, the petition is GRANTE#. The Decision dated 2 October ""2 and
the Resolution dated 2 3une ""$ of the Court of Appeals in C.A. '.R. CB:&(P )o.
""*55 are RE=ERSE# and SET ASI#E. The Order of the then Actin, (ecretar% of
the Depart+ent of .abor and B+plo%+ent dated $ 3anuar% ""5 den%in,
petitionerMs appeal, and the Orders of the Director, DO.B Re,ional Office )o. D44,
dated 4 6a% ""4 and $ -ebruar% ""4, respectivel%, are ANN(LLE#. The
co+plaint a,ainst petitioner is #ISMISSE#.
J4K
The Court found that there was no e+plo%er&e+plo%ee relationship between
petitioner and private respondent. 4t was held that while the DO.B +a% +ake a
deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship, this function
could not be co&e>tensive with the visitorial and enforce+ent power provided in Art.
#*/b0 of the .abor Code, as a+ended b% RA $$1". The )ational .abor Relations
Co++ission /).RC0 was held to be the pri+ar% a,enc% in deter+inin, the e>istence
of an e+plo%er&e+plo%ee relationship. This was the interpretation of the Court of
the clause Nin cases where the relationship of e+plo%er&e+plo%ee still e>istsO in Art.
#*/b0.
J5K
-ro+ this Decision, the Public Attorne%Ms Office /PAO0 filed a 6otion for Clarification
of Decision /with .eave of Court0. The PAO sou,ht to clarif% as to when the
visitorial and enforce+ent power of the DO.B be not considered as co&e>tensive
with the power to deter+ine the e>istence of an e+plo%er&e+plo%ee relationship.
J2K

4n its Co++ent,
J$K
the DO.B sou,ht clarification as well, as to the e>tent of its
visitorial and enforce+ent power under the .abor Code, as a+ended.
The Court treated the 6otion for Clarification as a second +otion for
reconsideration, ,rantin, said +otion and reinstatin, the petition.
J*K
4t is apparent
that there is a need to delineate the =urisdiction of the DO.B (ecretar% vis&V&vis that
of the ).RC.
Ender Art. #! of the .abor Code, the power of the DO.B and its dul% authori<ed
hearin, officers to hear and decide an% +atter involvin, the recover% of wa,es and
other +onetar% clai+s and benefits was 8ualified b% the proviso that the co+plaint
not include a clai+ for reinstate+ent, or that the a,,re,ate +one% clai+s not
e>ceed PhP 5,""". RA $$1", or an A#t urt'er Strengt'ening t'e Visitorial and
&nfor#ement Po,ers of t'e Se#retar( of Labor, did awa% with the PhP 5,"""
li+itation, allowin, the DO.B (ecretar% to e>ercise its visitorial and enforce+ent
power for clai+s be%ond PhP 5,""". The onl% 8ualification to this e>panded power
of the DO.B was onl% that there still be an e>istin, e+plo%er&e+plo%ee relationship.
4t is conceded that if there is no e+plo%er&e+plo%ee relationship, whether it has
been ter+inated or it has not e>isted fro+ the start, the DO.B has no =urisdiction.
Ender Art. #*/b0 of the .abor Code, as a+ended b% RA $$1", the first sentence
reads, N)otwithstandin, the provisions of Articles #! and #$ of this Code to the
contrar%, and in cases where the relationship of e+plo%er&e+plo%ee still e>ists, the
(ecretar% of .abor and B+plo%+ent or his dul% authori<ed representatives shall
have the power to issue co+pliance orders to ,ive effect to the labor standards
provisions of this Code and other labor le,islation based on the findin,s of labor
e+plo%+ent and enforce+ent officers or industrial safet% en,ineers +ade in the
course of inspection.O 4t is clear and be%ond debate that an e+plo%er&e+plo%ee
relationship +ust e>ist for the e>ercise of the visitorial and enforce+ent power of
the DO.B. The 8uestion now arises, +a% the DO.B +ake a deter+ination of
whether or not an e+plo%er&e+plo%ee relationship e>ists, and if so, to what e>tentP
The first portion of the 8uestion +ust be answered in the affir+ative.
The prior decision of this Court in the present case accepts such answer, but places
a li+itation upon the power of the DO.B, that is, the deter+ination of the e>istence
of an e+plo%er&e+plo%ee relationship cannot be co&e>tensive with the visitorial and
enforce+ent power of the DO.B. :ut even in concedin, the power of the DO.B to
deter+ine the e>istence of an e+plo%er&e+plo%ee relationship, the Court held that
the deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship is still
pri+aril% within the power of the ).RC, that an% findin, b% the DO.B is +erel%
preli+inar%.
This conclusion +ust be revisited.
)o li+itation in the law was placed upon the power of the DO.B to deter+ine the
e>istence of an e+plo%er&e+plo%ee relationship. )o procedure was laid down
where the DO.B would onl% +ake a preli+inar% findin,, that the power was
pri+aril% held b% the ).RC. The law did not sa% that the DO.B would first seek the
).RCMs deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship, or that
should the e>istence of the e+plo%er&e+plo%ee relationship be disputed, the DO.B
would refer the +atter to the ).RC. The DO.B +ust have the power to deter+ine
whether or not an e+plo%er&e+plo%ee relationship e>ists, and fro+ there to decide
whether or not to issue co+pliance orders in accordance with Art. #*/b0 of the
.abor Code, as a+ended b% RA $$1".
The DO.B, in deter+inin, the e>istence of an e+plo%er&e+plo%ee relationship, has
a read% set of ,uidelines to follow, the sa+e ,uide the courts the+selves use. The
ele+ents to deter+ine the e>istence of an e+plo%+ent relationship are@ /#0 the
selection and en,a,e+ent of the e+plo%ee7 /0 the pa%+ent of wa,es7 /10 the
power of dis+issal7 /40 the e+plo%erMs power to control the e+plo%eeMs conduct.
J!K

The use of this test is not solel% li+ited to the ).RC. The DO.B (ecretar%, or his or
her representatives, can utili<e the sa+e test, even in the course of inspection,
+akin, use of the sa+e evidence that would have been presented before the ).RC.
The deter+ination of the e>istence of an e+plo%er&e+plo%ee relationship b% the
DO.B +ust be respected. The e>panded visitorial and enforce+ent power of the
DO.B ,ranted b% RA $$1" would be rendered nu,ator% if the alle,ed e+plo%er
could, b% the si+ple e>pedient of disputin, the e+plo%er&e+plo%ee relationship,
force the referral of the +atter to the ).RC. The Court issued the declaration that
at least a pri+a facie showin, of the absence of an e+plo%er&e+plo%ee relationship
be +ade to oust the DO.B of =urisdiction. :ut it is precisel% the DO.B that will be
faced with that evidence, and it is the DO.B that will wei,h it, to see if the sa+e
does successfull% refute the e>istence of an e+plo%er&e+plo%ee relationship.
4f the DO.B +akes a findin, that there is an e>istin, e+plo%er&e+plo%ee
relationship, it takes co,ni<ance of the +atter, to the e>clusion of the ).RC. The
DO.B would have no =urisdiction onl% if the e+plo%er&e+plo%ee relationship has
alread% been ter+inated, or it appears, upon review, that no e+plo%er&e+plo%ee
relationship e>isted in the first place.
The Court, in li+itin, the power of the DO.B, ,ave the rationale that such li+itation
would eli+inate the prospect of co+petin, conclusions between the DO.B and the
).RC. The prospect of co+petin, conclusions could =ust as well have been
eli+inated b% accordin, respect to the DO.B findin,s, to the e>clusion of the ).RC,
and this Ae believe is the +ore prudent course of action to take.
This is not to sa% that the deter+ination b% the DO.B is be%ond 8uestion or review.
(uffice it to sa%, there are =udicial re+edies such as a petition for certiorari under
Rule 25 that +a% be availed of, should a part% wish to dispute the findin,s of the
DO.B.
4t +ust also be re+e+bered that the power of the DO.B to deter+ine the e>istence
of an e+plo%er&e+plo%ee relationship need not necessaril% result in an affir+ative
findin,. The DO.B +a% well +ake the deter+ination that no e+plo%er&e+plo%ee
relationship e>ists, thus divestin, itself of =urisdiction over the case. 4t +ust not be
precluded fro+ bein, able to reach its own conclusions, not b% the parties, and
certainl% not b% this Court.
Ender Art. #*/b0 of the .abor Code, as a+ended b% RA $$1", the DO.B is full%
e+powered to +ake a deter+ination as to the e>istence of an e+plo%er&e+plo%ee
relationship in the e>ercise of its visitorial and enforce+ent power, sub=ect to =udicial
review, not review b% the ).RC.
There is a view that despite Art. #*/b0 of the .abor Code, as a+ended b% RA $$1",
there is still a threshold a+ount set b% Arts. #! and #$ of the .abor Code when
+one% clai+s are involved, i.e., that if it is for PhP 5,""" and below, the =urisdiction
is with the re,ional director of the DO.B, under Art. #!, and if the a+ount involved
e>ceeds PhP 5,""", the =urisdiction is with the labor arbiter, under Art. #$. The
view states that despite the wordin, of Art. #*/b0, this would onl% appl% in the
course of re,ular inspections undertaken b% the DO.B, as differentiated fro+ cases
under Arts. #! and #$, which ori,inate fro+ co+plaints. There are several cases,
however, where the Court has ruled that Art. #*/b0 has been a+ended to e>pand
the powers of the DO.B (ecretar% and his dul% authori<ed representatives b% RA
$$1". 4n these cases, the Court resolved that the DO.B had the =urisdiction,
despite the a+ount of the +one% clai+s involved. -urther+ore, in these cases, the
inspection held b% the DO.B re,ional director was pro+pted specificall% b% a
co+plaint. Therefore, the initiation of a case throu,h a co+plaint does not divest
the DO.B (ecretar% or his dul% authori<ed representative of =urisdiction under Art.
#*/b0.
To recapitulate, if a co+plaint is brou,ht before the DO.B to ,ive effect to the labor
standards provisions of the .abor Code or other labor le,islation, and there is a
findin, b% the DO.B that there is an e>istin, e+plo%er&e+plo%ee relationship, the
DO.B e>ercises =urisdiction to the e>clusion of the ).RC. 4f the DO.B finds that
there is no e+plo%er&e+plo%ee relationship, the =urisdiction is properl% with the
).RC. 4f a co+plaint is filed with the DO.B, and it is acco+panied b% a clai+ for
reinstate+ent, the =urisdiction is properl% with the .abor Arbiter, under Art. #$/10
of the .abor Code, which provides that the .abor Arbiter has ori,inal and e>clusive
=urisdiction over those cases involvin, wa,es, rates of pa%, hours of work, and other
ter+s and conditions of e+plo%+ent, if acco+panied b% a clai+ for reinstate+ent.
4f a co+plaint is filed with the ).RC, and there is still an e>istin, e+plo%er&
e+plo%ee relationship, the =urisdiction is properl% with the DO.B. The findin,s of
the DO.B, however, +a% still be 8uestioned throu,h a petition for certiorari under
Rule 25 of the Rules of Court.
4n the present case, the findin, of the DO.B Re,ional Director that there was an
e+plo%er&e+plo%ee relationship has been sub=ected to review b% this Court, with
the findin, bein, that there was no e+plo%er&e+plo%ee relationship between
petitioner and private respondent, based on the evidence presented. Private
respondent presented self&servin, alle,ations as well as self&defeatin, evidence.
J#"K

The findin,s of the Re,ional Director were not based on substantial evidence, and
private respondent failed to prove the e>istence of an e+plo%er&e+plo%ee
relationship. The DO.B had no =urisdiction over the case, as there was no
e+plo%er&e+plo%ee relationship present. Thus, the dis+issal of the co+plaint
a,ainst petitioner is proper.cralaw
+"EREFORE, the Decision of this Court in '.R. )o. #$!25 is hereb% AFFIRME#,
with theMO#IFICATION that in the e>ercise of the DO.BMs visitorial and
enforce+ent power, the .abor (ecretar% or the latterMs authori<ed representative
shall have the power to deter+ine the e>istence of an e+plo%er&e+plo%ee
relationship, to the e>clusion of the ).RC.
SO OR#ERE#.
[G.R. NO. 1,23B6 : N1>.27.9 20, 2007]
EP*BATAAN =ETERANS SEC(RIT) AGENC), INC., Petitioner, v. T"E
SECRETAR) OF LABOR BIEN=ENI#O E. LAG(ESMA, REGIONAL #IRECTOR
BREN#A A. =ILLAF(ERTE, ALEPAN#ER !OC#ING, FI#EL BALANGA),
B(AGEN CL)#E, #ENNIS E!I, #A=I# MEN#O$A, -R., GABRIEL TAM(LONG,
ANTON !E#RO, FRANCISCO !INE#A, GASTON #()AO, "(LLAR(B, NOLI
#IONE#A, ATONG CENON, -R., TOMM) BA(CAS, +ILLIAM !A!SONGA),
RIC) #ORIA, GEOFRE) MINO, ORLAN#O RILLASE, SIM!LICIO TELLO, M.
G. NOCES, R. #. ALE-O, %&' !. C. #INTAN,Respondents.
# E C I S I O N
CAR!IO, J.:
T;. C%s.
This is a Petition for Review
#
with pra%er for the issuance of a te+porar% restrainin,
order or writ of preli+inar% in=unction of the ! 6a% ""# Decision

and the 2
-ebruar% "" Resolution
1
of the Court of Appeals in CA&'.R. (P )o. 5$251. The !
6a% ""# Decision of the Court of Appeals affir+ed the 4 October #!!! Order of the
(ecretar% of .abor in O(&.(&"4&4&"!$&*". The 2 -ebruar% "" Resolution
denied the +otion for reconsideration.
T;. F%0ts
B>&:ataan Deterans (ecurit% A,enc%, 4nc. /B:D(A40 is in the business of providin,
securit% services while private respondents are B:D(A4?s e+plo%ees assi,ned to the
)ational Power Corporation at A+buklao 9%dro Blectric Plant, :okod, :en,uet
/A+buklao Plant0.
On " -ebruar% #!!2, private respondents led b% Ale>ander Pon, /Pon,0 instituted
a co+plaint
4
for underpa%+ent of wa,es a,ainst B:D(A4 before the Re,ional Office
of the Depart+ent of .abor and B+plo%+ent /DO.B0.
On $ 6arch #!!2, the Re,ional Office conducted a co+plaint inspection at the
A+buklao Plant where the followin, violations were noted@ /#0 non&presentation of
records7 /0 non&pa%+ent of holida% pa%7 /10 non&pa%+ent of rest da% pre+iu+7
/40 underpa%+ent of ni,ht shift differential pa%7 /50 non&pa%+ent of service
incentive leave7 /20 underpa%+ent of #1
th
+onth pa%7 /$0 no re,istration7 /*0 no
annual +edical report7 /!0 no annual work accidental report7 /#"0 no safet%
co++ittee7 and /##0 no trained first aider.
5
On the sa+e date, the Re,ional Office
issued a notice of hearin,
2
re8uirin, B:D(A4 and private respondents to attend the
hearin, on 6arch #!!2. Other hearin,s were set for * 6a% #!!2, $ 6a% #!!2
and #" 3une #!!2.
On #! Au,ust #!!2, the Director of the Re,ional Office /Re,ional Director0 issued an
Order, the dispositive portion of which reads@
+"EREFORE, pre+ises considered, respondent EP*BATAAN =ETERANS
SEC(RIT) AGENC) is hereb% OR#ERE# to pa% the co+puted deficiencies owin,
to the affected e+plo%ees in the total a+ount of SE=EN "(N#RE# SIPT) T"REE
T"O(SAN# NINE "(N#RE# NINET) SE=EN !ESOS %&' 8,E!ESOS within ten
/#"0 calendar da%s upon receipt hereof. Otherwise, a Arit of B>ecution shall be
issued to enforce co+pliance of this Order.
)A6B DB-4C4B)CF
#. A.BLA)DBR POCD4)' P 12,1*".*5
. -4DB. :A.A)'AF 12,1*".*5
1. :EA'B) C.FDB 12,1*".*5
4. DB))4( BP4 12,1*".*5
5. DAD4D 6B)DOGA, 3R. 12,1*".*5
2. 'A:R4B. TA6E.O)' 12,1*".*5
$. A)TO) PBDRO 12,1*".*5
*. -RA)C4(CO P4)BDA 12,1*".*5
!. 'A(TO) DEFAO 12,1*".*5
#". 9E..ARE: 12,1*".*5
##. )O.4 DJBOK)4DA 12,1*".*5
#. ATO)' CB)O), 3R. 12,1*".*5
#1. TO66F :AECA( 12,1*".*5
#4. A4.4A6 PAP(O)'AF 12,1*".*5
#5. R4C5F DOR4A 12,1*".*5
#2. 'BO-RBF 64)O 12,1*".*5
#$. OR.A)DO RJ4.K.A(B 12,1*".*5
#*. (46P.4CO TB..O 12,1*".*5
#!. )OCB(, 6.'. 12,1*".*5
". A.B3O, R.D. 12,1*".*5
#. DJ4K)TA), P.C. 12,1*".*5
TOTA. P $21,!!$.*5
> > >
SO OR#ERE#.
$
B:D(A4 filed a +otion for reconsideration
*
and alle,ed that the Re,ional Director
does not have =urisdiction over the sub=ect +atter of the case because the +one%
clai+ of each private respondent e>ceeded P5,""". B:D(A4 pointed out that the
Re,ional Director should have endorsed the case to the .abor Arbiter.
4n a supple+ental +otion for reconsideration,
!
B:D(A4 8uestioned the Re,ional
Director?s basis for the co+putation of the deficiencies due to each private
respondent.
4n an Order
#"
dated #2 3anuar% #!!$, the Re,ional Director denied B:D(A4?s +otion
for reconsideration and supple+ental +otion for reconsideration. The Re,ional
Director stated that, pursuant to Republic Act )o. $$1" /RA $$1"0,
##
the li+itations
under Articles #!
#
and #$/20
#1
of the .abor Code no lon,er appl% to the (ecretar%
of .abor?s visitorial and enforce+ent powers under Article #*/b0.
#4
The (ecretar% of
.abor or his dul% authori<ed representatives are now e+powered to hear and
decide, in a su++ar% proceedin,, an% +atter involvin, the recover% of an% a+ount
of wa,es and other +onetar% clai+s arisin, out of e+plo%er&e+plo%ee relations at
the ti+e of the inspection.
B:D(A4 appealed to the (ecretar% of .abor.
T;. Ru45&g 1: t;. S.09.t%98 1: L%719
4n an Order
#5
dated 4 October #!!!, the (ecretar% of .abor affir+ed with
+odification the Re,ional Director?s #! Au,ust #!!2 Order. The (ecretar% of .abor
ordered that the P#,""" received b% private respondents Ro+eo Ale=o, Aton,
Cenon, 3r., 'eofre% 6ino, Dennis Bpi, and Rick% Doria be deducted fro+ their
respective clai+s. The (ecretar% of .abor ruled that, pursuant to RA $$1", the
Court?s decision in the Servando
#2
case is no lon,er controllin, insofar as the
restrictive effect of Article #! on the visitorial and enforce+ent power of the
(ecretar% of .abor is concerned.
The (ecretar% of .abor also stated that there was no denial of due process because
B:D(A4 was accorded several opportunities to present its side but B:D(A4 failed to
present an% evidence to controvert the findin,s of the Re,ional Director. 6oreover,
the (ecretar% of .abor doubted the veracit% and authenticit% of B:D(A4?s
docu+entar% evidence. The (ecretar% of .abor noted that these docu+ents were
not presented at the initial sta,e of the hearin, and that the pa%roll docu+ents did
not indicate the periods covered b% B:D(A4?s alle,ed pa%+ents.
BD:(A4 filed a +otion for reconsideration which was denied b% the (ecretar% of
.abor in his 1 3anuar% """ Order.
#$
B:D(A4 filed a petition for #ertiorari before the Court of Appeals.
T;. Ru45&g 1: t;. C1u9t 1: A33.%4s
4n its ! 6a% ""# Decision, the Court of Appeals dis+issed the petition and
affir+ed the (ecretar% of .abor?s decision. The Court of Appeals adopted the
(ecretar% of .abor?s rulin, that RA $$1" repealed the =urisdictional li+itation
i+posed b% Article #! on Article #* of the .abor Code. The Court of Appeals also
a,reed with the (ecretar% of .abor?s findin, that B:D(A4 was accorded due process.
The Court of Appeals also denied B:D(A4?s +otion for reconsideration in its 2
-ebruar% "" Resolution.
9ence, this petition.
T;. Issu.s
This case raises the followin, issues@
#. Ahether the (ecretar% of .abor or his dul% authori<ed representatives ac8uired
=urisdiction over B:D(A47 andcralawlibrar%
. Ahether the (ecretar% of .abor or his dul% authori<ed representatives have
=urisdiction over the +one% clai+s of private respondents which e>ceed P5,""".
T;. Ru45&g 1: t;. C1u9t
The petition has no +erit.
8n the !e'ional Director6s Jurisdiction over *9V:A%
B:D(A4 clai+s that the Re,ional Director did not ac8uire =urisdiction over B:D(A4
because he failed to co+pl% with (ection ##, Rule #4 of the #!!$ Rules of Civil
Procedure.
#*
B:D(A4 points out that the notice of hearin, was served at the
A+buklao Plant, not at B:D(A4?s +ain office in 6akati, and that it was addressed to
.eonardo Castro, 3r., B:D(A4?s Dice&President.
The Rules on the Disposition of .abor (tandards Cases in the Re,ional
Offices
#!
/rules0 specificall% state that notices and copies of orders shall be served
on the parties or their dul% authori<ed representatives at their last known address
or, if the% are represented b% counsel, throu,h the latter.
"
The rules shall be
liberall% construed
#
and onl% in the absence of an% applicable provision will the
Rules of Court appl% in a suppletor% character.

4n this case, B:D(A4 does not den% havin, received the notices of hearin,. 4n fact,
on ! 6arch and #1 3une #!!2, Danilo :ur,os and Bdwina 6anao, detach+ent
co++ander and bookkeeper of B:D(A4, respectivel%, appeared before the Re,ional
Director. The% clai+ed that the 6arch #!!2 notice of hearin, was received late
and +anifested that the notices should be sent to the 6anila office. Thereafter, the
notices of hearin, were sent to the 6anila office. The% were also infor+ed of
B:D(A4?s violations and were asked to present the e+plo%+ent records of the
private respondents for verification. The% were, +oreover, asked to sub+it, within
#" da%s, proof of co+pliance or their position paper. The Re,ional Director validl%
ac8uired =urisdiction over B:D(A4. B:D(A4 can no lon,er 8uestion the =urisdiction of
the Re,ional Director after receivin, the notices of hearin, and after appearin,
before the Re,ional Director.
8n the !e'ional Director6s Jurisdiction over the /oney Claims
B:D(A4 +aintains that under Articles #! and #$/20 of the .abor Code, the .abor
Arbiter, not the Re,ional Director, has e>clusive and ori,inal =urisdiction over the
case because the individual +onetar% clai+ of private respondents e>ceeds P5,""".
B:D(A4 also ar,ues that the case falls under the e>ception clause in Article #*/b0
of the .abor Code. B:D(A4 asserts that the Re,ional Director should have certified
the case to the Arbitration :ranch of the )ational .abor Relations Co++ission
/).RC0 for a full&blown hearin, on the +erits.
4n Allied %nvestigation *ureau$ %n#. v. Se#. of Labor, we ruled that@
Ahile it is true that under Articles #! and #$ of the .abor Code, the .abor Arbiter
has =urisdiction to hear and decide cases where the a,,re,ate +one% clai+s of each
e+plo%ee e>ceeds P5,"""."", said provisions of law do not conte+plate nor cover
the visitorial and enforce+ent powers of the (ecretar% of .abor or his dul%
authori<ed representatives.
Rather, said powers are defined and set forth in Article #* of the .abor Code /as
a+ended b% R.A. )o. $$1"0 thus@
Art. #* Disitorial and enforce+ent power. & & & > > >
/b0 Not,it'standing t'e provisions of Arti#leEsF >G@ and G>H of t'is Code to t'e
#ontrar($ and in #ases ,'ere t'e relations'ip of emplo(er-emplo(ee still e4ists$ t'e
Se#retar( of Labor and &mplo(ment or 'is dul( aut'ori9ed representatives s'all
'ave t'e po,er to issue #omplian#e orders to give effe#t to Et'e labor standards
provisions of t'is Code and ot'erF labor legislation based on t'e findings of labor
emplo(ment and enfor#ement offi#ers or industrial safet( engineers made in t'e
#ourse of inspe#tion.The (ecretar% or his dul% authori<ed representatives shall issue
writs of e>ecution to the appropriate authorit% for the enforce+ent of their orders,
e>cept in cases where the e+plo%er contests the findin,s of the labor e+plo%+ent
and enforce+ent officer and raises issues supported b% docu+entar% proofs which
were not considered in the course of inspection.
> > >
The afore8uoted provision e>plicitl% e>cludes fro+ its covera,e Articles #! and #$
of the .abor Code b% the phrase S/)0otwithstandin, the provisions of Articles #!
and #$of this Code to the contrar% > > >S thereb% retainin, and further
stren,thenin, the power of the (ecretar% of .abor or his dul% authori<ed
representatives to issue co+pliance orders to ,ive effect to the labor standards
provisions of said Code and other labor le,islation based on the findin,s of labor
e+plo%+ent and enforce+ent officer or industrial safet% en,ineer +ade in the
course of inspection.
1
/4talics in the ori,inal0
This was further affir+ed in our rulin, in Cirineo *o,ling Pla9a$ %n#. v.
Sensing$
4
where we sustained the =urisdiction of the DO.B Re,ional Director and
held that St;. >5s5t195%4 %&' .&:190.2.&t 316.9s 1: t;. #OLE R.g51&%4
#59.0t19 t1 19'.9 %&' .&:190. 012345%&0. 65t; 4%719 st%&'%9' 4%6s 0%& 7.
.A.905s.' .>.& 6;.9. t;. 5&'5>5'u%4 04%52 .A0..'s !,,000.S
9owever, if the labor standards case is covered b% the e>ception clause in Article
#*/b0 of the .abor Code, then the Re,ional Director will have to endorse the case
to the appropriate Arbitration :ranch of the ).RC. 4n order to divest the Re,ional
Director or his representatives of =urisdiction, the followin, ele+ents +ust be
present@ /a0 that the e+plo%er contests the findin,s of the labor re,ulations officer
and raises issues thereon7 /b0 that in order to resolve such issues, there is a need
to e>a+ine evidentiar% +atters7 and /c0 that such +atters are not verifiable in the
nor+al course of inspection.
5
The rules also provide that the e+plo%er shall raise
such ob=ections durin, the hearin, of the case or at an% ti+e after receipt of the
notice of inspection results.
2
4n this case, the Re,ional Director validl% assu+ed =urisdiction over the +one%
clai+s of private respondents even if the clai+s e>ceeded P5,""" because such
=urisdiction was e>ercised in accordance with Article #*/b0 of the .abor Code and
the case does not fall under the e>ception clause.
The Court notes that B:D(A4 did not contest the findin,s of the labor re,ulations
officer durin, the hearin, or after receipt of the notice of inspection results. 4t was
onl% in its supple+ental +otion for reconsideration before the Re,ional Director that
B:D(A4 8uestioned the findin,s of the labor re,ulations officer and presented
docu+entar% evidence to controvert the clai+s of private respondents. :ut even if
this was the case, the Re,ional Director and the (ecretar% of .abor still looked into
and considered B:D(A4?s docu+entar% evidence and found that such did not
warrant the reversal of the Re,ional Director?s order. The (ecretar% of .abor also
doubted the veracit% and authenticit% of B:D(A4?s docu+entar% evidence. 6oreover,
the pieces of evidence presented b% B:D(A4 were verifiable in the nor+al course of
inspection because all e+plo%+ent records of the e+plo%ees should be kept and
+aintained in or about the pre+ises of the workplace, which in this case is in
A+buklao Plant, the establish+ent where private respondents were re,ularl%
assi,ned.
$
+"EREFORE, we #EN) the petition. Ae AFFIRM the ! 6a% ""# Decision and
the 2 -ebruar% "" Resolution of the Court of Appeals in CA&'.R. (P )o. 5$251.
SO OR#ERE#.
G.R. N1. 18,,67 : O0t17.9 20, 2010
ARSENIO $. LOCSIN, Petitioner, v. NISSAN LEASE !"ILS. INC. %&' L(IS
BANSON, Respondents.cralaw
# E C I S I O N
BRION, J.;
Throu,h a petition for review on certiorari,
#
cra#aw petitioner Arsenio G. .ocsin /.ocsin0
seeks the reversal of the Decision

cra#aw of the Court of Appeals /CA0 dated Au,ust *,


""*,
1
cra#aw in NArsenio G. .ocsin v. )issan Car .ease Phils., 4nc. and .uis :anson,O
docketed as CA&'.R. (P )o. #"1$" and the Resolution dated Dece+ber !,
""*,
4
cra#aw den%in, .ocsinMs 6otion for Reconsideration. The assailed rulin, of the CA
reversed and set aside the Decision
5
cra#aw of the 9on. .abor Arbiter Thel+a Concepcion
/.abor Arbiter Concepcion0 which denied )issan .ease Phils. 4nc.Ms /)C.P40 and .uis
T. :ansonMs /:anson0 6otion to Dis+iss.
T"E FACT(AL ANTECE#ENTS
On 3anuar% #, #!!, .ocsin was elected B>ecutive Dice President and Treasurer
/BDPCTreasurer0 of )C.P4. As BDPCTreasurer, his duties and responsibilities included@
/#0 the +ana,e+ent of the finances of the co+pan%7 /0 carr%in, out the directions
of the President andCor the :oard of Directors re,ardin, financial +ana,e+ent7 and
/10 the preparation of financial reports to advise the officers and directors of the
financial condition of )C.P4.
2
cra#aw .ocsin held this position for #1 %ears, havin, been re&
elected ever% %ear since #!!, until 3anuar% #, ""5, when he was no+inated and
elected Chair+an of )C.P4Ms :oard of Directors.
$
chanroblesvirtuallawlibrar%
On Au,ust 5, ""5, a little over seven /$0 +onths after his election as Chair+an of
the :oard, the )C.P4 :oard held a special +eetin, at the 6anila Polo Club. One of
the ite+s of the a,enda was the election of a new set of officers. Enfortunatel%,
.ocsin was neither re&elected Chair+an nor reinstated to his previous position as
BDPCTreasurer.
*
chanroblesvirtuallawlibrar%
A,,rieved, on 3une #!, ""$, .ocsin filed a co+plaint for ille,al dis+issal with
pra%er for reinstate+ent, pa%+ent of backwa,es, da+a,es and attorne%Ms fees
before the .abor Arbiter a,ainst )C.P4 and :anson, who was then President of
)C.P4.
!
chanroblesvirtuallawlibrar%
<he Compulsory Arbitration roceedin's before the "abor Arbiter.
On 3ul% ##, ""$, instead of filin, their position paper, )C.P4 and :anson filed a
6otion to Dis+iss,
#"
cra#aw on the ,round that the .abor Arbiter did not have =urisdiction
over the case since the issue of .ocsinMs re+oval as BDPCTreasurer involves an intra&
corporate dispute.
On Au,ust #2, ""$, .ocsin sub+itted his opposition to the +otion to dis+iss,
+aintainin, his position that he is an e+plo%ee of )C.P4.
On 6arch #", ""*, .abor Arbiter Concepcion issued an Order den%in, the 6otion to
Dis+iss, holdin, that her office ac8uired N=urisdiction to arbitrate andCor decide the
instant co+plaint findin, e>tant in the case an e+plo%er&e+plo%ee
relationship.O
##
chanroblesvirtuallawlibrar%
)C.P4, on 3une 1, ""*, elevated the case to the CA throu,h a Petition
for Certiorari under Rule ?I of t'e Rules of Court.
#
cra#aw NCLP% raised t'e issue on
,'et'er t'e Labor Arbiter #ommitted grave abuse of dis#retion b( den(ing t'e
.otion to Dismiss and 'olding t'at 'er offi#e 'ad -urisdi#tion over t'e dispute.cralaw
T;. CA #.05s51& * L10s5& 6%s % 019319%t. 1::50.9H t;. 5ssu. 1: ;5s 9.21>%4
%s E=!ET9.%su9.9 5s %& 5&t9%*019319%t. '5s3ut. u&'.9 t;. RTCGs ?u95s'50t51&.
On Au,ust *, ""*,
#1
cra#aw the CA reversed and set aside the .abor ArbiterMs Order
den%in, the 6otion to Dis+iss and ruled that .ocsin was a corporate officer.
Citin, PD !"&A, the CA defined Ncorporate officers as those officers of a corporation
who are ,iven that character either b% the Corporation Code or b% the corporationsM
b%&laws.O 4n this re,ard, the CA held@chanroblesvirtualawlibrar%
(crutini<in, the records, Ae hold that petitioners successfull% dischar,ed their onus
of establis'ing t'at private respondent ,as a #orporate offi#er ,'o 'eld t'e position
of &4e#utive Vi#e-President5"reasurer as provided in t'e b(-la,s of petitioner
#orporation and t'at 'e 'eld su#' position b( virtue of ele#tion b( t'e *oard of
Dire#tors.cralaw
That private respondent is a corporate officer cannot be disputed. The position of
B>ecutive Dice&PresidentCTreasurer is specificall% included in the roster of officers
provided for b% the /A+ended0 :%&.aws of petitioner corporation, his duties and
responsibilities, as well as co+pensation as such officer are likewise set forth
therein.
#4
chanroblesvirtuallawlibrar%
Article *" of the .abor Code, the receipt of salaries b% .ocsin, ((( deductions on
that salar%, and the ele+ent of control in the perfor+ance of work duties Q indicia
used b% the .abor Arbiter to conclude that .ocsin was a re,ular e+plo%ee Q were
held inapplicable b% the CA.
#5
cra#aw The CA noted the .abor ArbiterMs failure to address
the fact that the position of BDPCTreasurer is specificall% enu+erated as an NofficeO
in the corporationMs b%&laws.
#2
chanroblesvirtuallawlibrar%
-urther, the CA pointed out .ocsinMs failure to Nstate an% circu+stance b% which
)C.P4 en,a,ed his services as a corporate officer that would +ake hi+ an
e+plo%ee.O The CA found, in this re,ard, that .ocsinMs assu+ption and retention as
BDPCTreasurer was based on his election and subse8uent re&elections fro+ #!!
until ""5. -urther, he perfor+ed onl% those functions that were Nspecificall% set
forth in the :%&.aws or re8uired of hi+ b% the :oard of Directors.
#$
cra#aw O
Aith respect to the suit .ocsin filed with the .abor Arbiter, the CA held that@chanroblesvirtualawlibrar%
Private respondent, in belatedl% filin, this suit before the .abor Arbiter, 8uestioned
the le,alit% of his Ndis+issalO 7ut 5& .ss.&0., ;. 9%5s.s t;. 5ssu. 1: 6;.t;.9 19
&1t t;. B1%9' 1: #59.0t19s ;%' t;. %ut;195t8 t1 9.21>. ;52 :912 t;.
019319%t. 1::50. t1 6;50; ;. 6%s .4.0t.' 3u9su%&t t1 t;. B8*L%6s 1: t;.
3.t5t51&.9 019319%t51&. 4ndeed, had private respondent been an ordinar%
e+plo%ee, an election conducted b% the :oard of Directors would not have been
necessar% to re+ove hi+ as B>ecutive Dice&PresidentCTreasurer. 9owever, in an
obvious atte+pt to preclude the application of settled =urisprudence that corporate
officers whose position is provided in the b%&laws, their election, re+oval or
dis+issal is sub=ect to (ection 5 of P.D. )o. !"&A /now R.A. )o. *$!!0, private
respondent would even clai+ in his Position Paper, that since his responsibilities
were akin to that of the co+pan%Ms B>ecutive Dice&PresidentCTreasurer, he was
Nhired under the prete>t that he was bein, RelectedM into said post.
#*
cra#awJB+phasis
supplied.Kchanroblesvirtuallawlibrar%
As a conse8uence, the CA concluded that .ocsin does not have an% recourse with
the .abor Arbiter or the ).RC since the re+oval of a corporate officer, whether
elected or appointed, is an intra&corporate controvers% over which the ).RC has no
=urisdiction.
#!
cra#aw 4nstead, accordin, to the CA, .ocsinMs co+plaint for Nille,al dis+issalO
should have been filed in the Re,ional Trial Court /R"CC, pursuant to Rule 2 of the
4nteri+ Rules of Procedure 'overnin, 4ntra&Corporate Controversies.
"
chanroblesvirtuallawlibrar%
-inall%, the CA addressed .ocsinMs invocation of Article 4 of the .abor Code.
Dis+issin, the application of the provision, the CA cited Dean Cesar Dillanueva of
the Ateneo (chool of .aw, as follows@chanroblesvirtualawlibrar%
> > > the &1&*01>.9%g. 1: 019319%t. 1::50.9s :912 t;. s.0u95t8 1: t.&u9.
04%us. u&'.9 t;. C1&st5tut51& 5s &16 6.44*.st%745s;.' 395&0534. b% nu+erous
decisions upholdin, such doctrine under the ae,is of the #!*$ Constitution in the
face of conte+porar% decisions of the sa+e (upre+e Court likewise confir+in, that
securit% of tenure covers all e+plo%ees or workers includin, +ana,erial
e+plo%ees.
#
chanroblesvirtuallawlibrar%
T"E !ETITIONERGS ARG(MENTS
-ailin, to obtain a reconsideration of the CAMs decision, .ocsin filed the present
petition on 3anuar% *, ""!, raisin, the followin, procedural and substantive
issues@chanroblesvirtualawlibrar%
/#0 Ahether the CA has ori,inal =urisdiction to review decision of the .abor Arbiter
under Rule 25P
/0 Ahether he is a re,ular e+plo%ee of )C.P4 under the definition of Article *"
of the .abor CodeP and
/10 Ahether .ocsinMs position as B>ecutive Dice&PresidentCTreasurer +akes hi+ a
corporate officer thereb% e>cludin, hi+ fro+ the covera,e of the .abor CodeP
Procedurall%, .ocsin essentiall% sub+its that )C.P4 wron,full% filed a petition for
certiorari before the CA, as the latterMs re+ed% is to proceed with the arbitration,
and to appeal to the ).RC after the .abor Arbiter shall have ruled on the +erits of
the case. .ocsin cites, in this re,ard, Rule D, (ection 2 of the Revised Rules of the
)ational .abor Relations Co++ission /).RC Rules0, which provides that a denial of
a +otion to dis+iss b% the .abor Arbiter is not sub=ect to an appeal. .ocsin also
ar,ues that even if the .abor Arbiter co++itted ,rave abuse of discretion in den%in,
the )C.P4 +otion, a special civil action for certiorari, filed with the CA was not the
appropriate re+ed%, since this was a breach of the doctrine of e>haustion of
ad+inistrative re+edies.
(ubstantivel%, .ocsin sub+its that he is a re,ular e+plo%ee of )C.P4 since & as he
ar,ued before the .abor Arbiter and the CA & his relationship with the co+pan%
+eets the Nfour&fold test.O
-irst, .ocsin contends that )C.P4 had the power to en,a,e his services as
BDPCTreasurer. (econd, he received re,ular wa,es fro+ )C.P4, fro+ which his (((
and Philhealth contributions, as well as his withholdin, ta>es were deducted. Third,
)C.P4 had the power to ter+inate his e+plo%+ent.

cra#aw .astl%, )issan had control


over the +anner of the perfor+ance of his functions as BDPCTreasurer, as shown b%
the #1 %ears of faithful e>ecution of his =ob, which he carried out in accordance with
the standards and e>pectations set b% )C.P4.
1
cra#aw-urther, .ocsin +aintains that even
after his election as Chair+an, he essentiall% perfor+ed the functions of
BDPCTreasurer Q handlin, the financial and ad+inistrative operations of the
Corporation Q thus +akin, hi+ a re,ular e+plo%ee.
4
chanroblesvirtuallawlibrar%
Ender these clai+ed facts, .ocsin concludes that the .abor Arbiter and the ).RC Q
not the RTC /as )C.P4 posits0 Q has =urisdiction to decide the controvers%.
Parentheticall%, .ocsin clarifies that he does not dispute the validit% of his election as
Chair+an of the :oard on 3anuar% #, ""5. 4nstead, he theori<es that he never lost
his position as BDPCTreasurer havin, continuousl% perfor+ed the functions
appurtenant thereto.
5
cra#aw Thus, he 8uestions his Nuncere+onious re+ovalO as
BDPCTreasurer durin, the Au,ust 5, ""5 special :oard +eetin,.
T"E RES!ON#ENTGS ARG(MENTS
4t its April #$, ""! Co++ent,
2
cra#aw )issan pra%s for the denial of the petition for lack
of +erit. )issan sub+its that the CA correctl% ruled that the .abor Arbiter does not
have =urisdiction over .ocsinMs co+plaint for ille,al dis+issal. 4n support, )issan
+aintains that .ocsin is a corporate officer and not an e+plo%ee. 4n addressin, the
procedural defect .ocsin raised, )issan brushes the issue aside, statin, that /#0 this
issue was belatedl% raised in the 6otion for Reconsideration, and that /0 in an%
case, Rule D4, (ection /#0 of the ).RC does not appl% since onl% appealable
de#isions$ resolutions and orders are #overed under t'e rule.cralaw
T"E CO(RTGS R(LING
+. 9.s14>. t1 '.&8 t;. 3.t5t51& :19 4%0< 1: 2.95t.
At the outset, we stress that there are two /0 i+portant considerations in the final
deter+ination of this case. On the one hand, .ocsin raises a procedural issue that, if
proven correct, will re8uire the Court to dis+iss the instant petition for usin, an
i+proper re+ed%. On the other hand, there is the substantive issue that will be
disre,arded if a strict i+ple+entation of the rules of procedure is upheld.
Prefatoril%, we a,ree with .ocsinMs sub+ission that the )C.P4 incorrectl% elevated
the .abor ArbiterMs denial of the 6otion to Dis+iss to the CA. .ocsin is correct in
positin, that the denial of a +otion to dis+iss is unappealable. As a ,eneral rule, an
a,,rieved part%Ms proper recourse to the denial is to file his position paper, interpose
the ,rounds relied upon in the +otion to dis+iss before the labor arbiter, and
activel% participate in the proceedin,s. Thereafter, the labor arbiterMs decision can be
appealed to the ).RC, not to the CA.
As a rule, we strictl% adhere to the rules of procedure and do ever%thin, we can, to
the point of penali<in, violators, to encoura,e respect for these rules. Ae take
e>ception to this ,eneral rule, however, when a strict i+ple+entation of these rules
would cause substantial in=ustice to the parties.
Ae see it appropriate to appl% the e>ception to this case for the reasons discussed
below7 hence, we are co+pelled to ,o be%ond procedure and rule on the +erits of
the case. 4n the conte>t of this case, we see sufficient =ustification to rule on the
e+plo%er&e+plo%ee relationship issue raised b% )C.P4, even thou,h the .abor
ArbiterMs interlocutor% order was in#orre#tl( broug't to t'e CA under Rule ?I.cralaw
T;. NLRC Ru4.s %9. 04.%9: t;. '.&5%4 78 t;. 4%719 %975t.9 1: t;. 21t51& t1
'5s25ss 5s &1t %33.%4%74. 7.0%us. t;. '.&5%4 5s 2.9.48 %& 5&t.9410ut198
19'.9.
%n 6etro Dru, v. 6etro Dru, B+plo%ees,
$
cra#aw we definitivel% stated that the denial of a
+otion to dis+iss b% a labor arbiter is not i++ediatel% appealable.
*
chanroblesvirtuallawlibrar%
Ae si+ilarl% ruled in Te>on 6anufacturin, v. 6illena,
!
cra#aw in (i+e Darb% B+plo%ees
Association v. )ational .abor Relations Co++ission
1"
cra#aw and in Aest+ont
Phar+aceuticals v. (a+anie,o.
1#
cra#aw 4n Te>on, we specificall% said@chanroblesvirtualawlibrar%
The Order of the .abor Arbiter den%in, petitionersM +otion to dis+iss is
interlocutor%. 4t is well&settled that a '.&5%4 1: % 21t51& t1 '5s25ss % 01234%5&t
5s %& 5&t.9410ut198 19'.9 and hence, 0%&&1t 7. %33.%4.', until a final =ud,+ent
on the +erits of the case is rendered. JB+phasis supplied.Kcra#aw
1
chanroblesvirtuallawlibrar%
and indicated the appropriate recourse in 6etro Dru,, as follows@
11
chanroblesvirtuallawlibrar%
> > > The ).RC rule proscribin, appeal fro+ a denial of a +otion to dis+iss is
si+ilar to the ,eneral rule observed in civil procedure that an order den%in, a
+otion to dis+iss is interlocutor% and, hence, not appealable until final =ud,+ent or
order is rendere . The re+ed% of the a,,rieved part% in case of denial of the +otion
to dis+iss is to :54. %& %&s6.9 %&' 5&t.931s., %s % '.:.&s. 19 '.:.&s.s, t;.
g91u&' 19 g91u&'s 9.45.' u31& 5& t;. 21t51& t1 '5s25ss, 3910..' t1 t95%4
%&', 5& 0%s. 1: %'>.9s. ?u'g2.&t, t1 .4.>%t. t;. .&t59. 0%s. 78 %33.%4 5&
'u. 01u9s. J6endo<a v. Court of Appeals, '.R. )o. *#!"!, (epte+ber 5, #!!#,
"# (CRA 141cra#aw . 4n order to avail of the e>traordinar% writ of certiorari, it is
incu+bent upon petitioner to establish that the denial of the +otion to dis+iss was
tainted with ,rave abuse of discretion. J6acawiwili 'old 6inin, and Develop+ent
Co., 4nc. v. Court of Appeals, '.R. )o. ##5#"4, October #, #!!*, !$ (CRA 2"chanroblesvirtuallawlibrar%
4n so citin, -eria and )oche, the Court was referrin, to (ec. # /b0, Rule 4# of the
Rules of Court, which specificall% enu+erates 5&t.9410ut198 19'.9s as one of the
court actions that cannot be appealed. 4n the sa+e rule, as a+ended b% A.6. )o.
"$&$&#&(C, the a,,rieved part% is allowed to file an appropriate special civil action
under Rule 25. The latter rule, however, also contains li+itations for its application,
clearl% outlined in its (ection # which provides@chanroblesvirtualawlibrar%
(ection #. Petition for certiorari.
Ahen an% tribunal, board or officer e>ercisin, =udicial or 8uasi&=udicial functions has
acted without or in e>cess of its or his =urisdiction, or with ,rave abuse of discretion
a+ountin, to lack or e>cess of =urisdiction, and t;.9. 5s &1 %33.%4, 19 %&8 34%5&,
s3..'8, %&' %'.@u%t. 9.2.'8 5& t;. 19'5&%98 01u9s. 1: 4%6, % 3.9s1&
%gg95.>.' t;.9.78 2%8 :54. % >.95:5.' 3.t5t51& 5& t;. 3913.9 01u9t, %44.g5&g
t;. :%0ts 65t; 0.9t%5&t8 %&' 39%85&g t;%t ?u'g2.&t 7. 9.&'.9.' %&&u445&g
19 21'5:85&g t;. 3910..'5&gs 1: su0; t957u&%4, 71%9' 19 1::50.9, %&'
g9%&t5&g su0; 5&05'.&t%4 9.45.:s %s 4%6 %&' ?ust50. 2%8 9.@u59..
4n the labor law settin,, a plain, speed% and ade8uate re+ed% is still open to the
a,,rieved part% when a labor arbiter denies a +otion to dis+iss. This is Article 1
of Presidential Decree )o. 44, as a+ended /.abor Code0,
14
cra#aw which states@chanroblesvirtualawlibrar%
ART. 223. A!!EAL
Decisions, awards, or orders of the .abor Arbiter are final and e>ecutor%
unless %33.%4.' t1 t;. C1225ss51& 78 %&8 19 71t; 3%9t5.s 65t;5& t.& C10D
0%4.&'%9 '%8s :912 9.0.53t 1: su0; '.05s51&s, %6%9's, 19 19'.9s. (uch
appeal +a% be entertained onl% on an% of the followin, ,rounds@chanroblesvirtualawlibrar%
/a0 4f there is 3952% :%05. .>5'.&0. 1: %7us. 1: '5s09.t51& 1& t;. 3%9t 1: t;.
L%719 A975t.9H A A A [E23;%s5s su3345.'.]09%1%6
Pursuant to this Article, we held in 6etro Dru, /citin, Air (ervices Cooperative, et
al. v. Court of Appeals
15
cra#aw 0 that the ).RC is clothed with sufficient authorit% to
correct an% clai+ed Nerroneous assu+ption of =urisdictionO b% labor arbiters@chanroblesvirtualawlibrar%
4n Air (ervices Cooperative, et al. v. The Court of Appeals, et al., a case where the
=urisdiction of the labor arbiter was put in issue and was assailed throu,h a petition
for certiorari, prohibition and annul+ent of =ud,+ent before a re,ional trial court,
this Court had the opportunit% to e>pound on the nature of appeal as e+bodied in
Article 1 of the .abor Code, thus@chanroblesvirtualawlibrar%
> > > Also, while the title of the Article 1 see+s to provide onl% for the re+ed% of
appeal as that ter+ is understood in procedural law and as distin,uished fro+ the
office of certiorari, nonetheless, a closer readin, thereof reveals that it is not as
li+ited as understood b% the petitioners > > >.
A7us. 1: '5s09.t51& 5s %'25tt.'48 65t;5& t;. %275t 1: 0.9t519%95 %&' 5ts g9%&t
1: 9.>5.6 t;.9.1: t1 t;. NLRC indicates the law+akersM intention to broaden the
+eanin, of appeal as that ter+ is used in the Code. -or this reason, 3.t5t51&.9s
0%&&1t %9gu. &16 t;%t t;. NLRC 5s '.>15' 1: %&8 0199.0t5>. 316.9 t1 9.0t5:8
% su331s.' .991&.1us %ssu23t51& 1: ?u95s'50t51& 78 t;. L%719 A975t.9 A A A.
[A59 S.9>50.s C113.9%t5>., .t %4. >. T;. C1u9t 1: A33.%4s, .t %4. G.R. N1.
1186B3, 23 -u48 1BB8, 2B3 SCRA 10109%1%6
(ince the le,islature had clothed the ).RC with the appellate authorit% to correct a
clai+ed Nerroneous assu+ption of =urisdictionO on the part of the labor arbiter Q a
case of ,rave abuse of discretion & the9.2.'8 %>%54.' 1: 78 3.t5t51&.9 5& t;5s
0%s. 5s 3%t.&t48 .991&.1us %s 9.01u9s. 5& t;5s 0%s. 5s 41'g.', u&'.9 t;. 4%6,
65t; t;. NLRC.
4n 6etro Dru,, as in the present case, the defect i+puted throu,h the ).CP4 6otion
to Dis+iss is the labor arbiterMs lack of =urisdiction since .ocsin is alle,ed to be a
corporate officer, not an e+plo%ee. Parallelis+s between the two cases is
undeniable, as the% are si+ilar on the followin, points@ /#0 in 6etro Dru,, as in this
case, the .abor Arbiter issued an Order den%in, the 6otion to Dis+iss b% one of the
parties7 /0 the basis of the 6otion to Dis+iss is also the alle,ed lack of =urisdiction
b% the .abor Arbiter to settle the dispute7 and /10 dissatisfied with the Order of the
.abor Arbiter, the a,,rieved part% likewise elevated the case to the CA via Rule 25.
The si+ilarities end there, however. Enlike in the present case, the CA denied the
petition for certiorari and the subse8uent 6otion for Reconsideration in 6etro Dru,7
the CA correctl% found that the proper appellate +echanis+ was an appeal to the
).RC and not a petition for certiorari under Rule 25. 4n the present case, the CA
took a different position despite our clear rulin, in 6etro Dru,, and allowed, not
onl% the use of Rule 25, but also ruled on the +erits.
-ro+ this perspective, the CA clearl% erred in the application of the procedural rules
b% disre,ardin, the relevant provisions of the ).RC Rules, as well as the
re8uire+ents for a petition for certiorari under the Rules of Court. To reiterate, the
proper action of an a,,rieved part% faced with the labor arbiterMs denial of his
+otion to dis+iss is to sub+it his position paper and raise therein the supposed lack
of =urisdiction. The a,,rieved part% cannot i++ediatel% appeal the denial since it is
an interlocutor% order7 the appropriate re+edial recourse is the procedure outlined
in Article 1 of the .abor Code, not a petition for certiorari under Rule 25.
A st950t 5234.2.&t%t51& 1: t;. NLRC Ru4.s %&' t;. Ru4.s 1: C1u9t 61u4'
0%us. 5&?ust50. t1 t;. 3%9t5.s 7.0%us. t;. L%719 A975t.9 04.%948 ;%s &1
?u95s'50t51& 1>.9 t;. 39.s.&t 5&t9%*019319%t. '5s3ut..
Our rulin, in 6e=illano v. .ucillo
12
cra#aw stands for the proposition that we should strictl%
appl% the rules of procedure. Ae said@chanroblesvirtualawlibrar%
Ti+e and a,ain, we have ruled that procedural rules do not e>ist for the
convenience of the liti,ants. Rules of Procedure e>ist for a purpose, and to
disre,ard such rules in the ,uise of liberal construction would be to defeat such
purpose. !910.'u9%4 9u4.s 6.9. .st%745s;.' 3952%9548 t1 391>5'. 19'.9 t1
%&' .&;%&0. t;. .::505.&08 1: 1u9 ?u'505%4 s8st.2.JB+phasis supplied.K
An e>ception to this rule is our rulin, in .a<aro v. Court of Appeals
1$
cra#aw where we held
that the strict enforce+ent of the rules of procedure +a% be rela>ed in e>ceptionall%
+eritorious cases@chanroblesvirtualawlibrar%
> > > !910.'u9%4 9u4.s %9. &1t t1 7. 7.45tt4.' 19 '5s25ss.' s52348 7.0%us.
t;.59 &1&*17s.9>%&0. 2%8 ;%>. 9.su4t.' 5& 39.?u'50. t1 % 3%9t8Js
su7st%&t5>. 95g;ts. .ike all rules, t;.8 %9. 9.@u59.' t1 7. :14416.' e>cept onl%
for the +ost persuasive of reasons when the% +a% be rela>ed to relieve a liti,ant of
an in=ustice not co++ensurate with the de,ree of his thou,htlessness in not
co+pl%in, with the procedure prescribed. The Court reiterates that rules of
procedure, especiall% those prescribin, the ti+e within which certain acts +ust be
done, Shave oft been held as absolutel% indispensable to the prevention of needless
dela%s and to the orderl% and speed% dischar,e of business. > > > The reason for
rules of this nature is because the dispatch of business b% courts would be
i+possible, and intolerable dela%s would result, without rules ,overnin, practice > >
>. (uch rules are a necessar% incident to the proper, efficient and orderl% dischar,e
of =udicial functions.S 4ndeed, in no uncertain ter+s, the Court held that the said
rules 2%8 7. 9.4%A.' 1&48 5& .A0.3t51&%448 2.95t1951us 0%s.s.JB+phasis
supplied.K
Ahether a case involves an e>ceptionall% +eritorious circu+stance can be tested
under the ,uidelines we established in (anche< v. Court of Appeals,
1*
cra#aw as follows@chanroblesvirtualawlibrar%
Aside fro+ 2%tt.9s 1: 45:., 457.9t8, ;1&19 19 3913.9t8 which would warrant the
suspension of the Rules of the +ost +andator% character and an e>a+ination and
review b% the appellate court of the lower courtMs findin,s of fact, the other
ele+ents that should be considered are the followin,@ /a0 t;. .A5st.&0. 1: s3.05%4
19 0123.445&g 0590u2st%&0.s, C7D t;. 2.95ts 1: t;. 0%s., C0D % 0%us. &1t
.&t59.48 %tt957ut%74. t1 t;. :%u4t 19 &.g45g.&0. 1: t;. 3%9t8 :%>19.' 78 t;.
sus3.&s51& 1: t;. 9u4.s, C'D % 4%0< 1: %&8 s;165&g t;%t t;. 9.>5.6 s1ug;t 5s
2.9.48 :95>141us %&' '54%t198, %&' C.D t;. 1t;.9 3%9t8 6544 &1t 7. u&?ust48
39.?u'50.' t;.9.78.JB+phasis supplied.Kcra#aw K
Ender these standards, we hold that e>ceptional circu+stances e>ist in the present
case to +erit the rela>ation of the applicable rules of procedure.
#u. t1 .A5st5&g .A0.3t51&%4 0590u2st%&0.s, t;. 9u45&g 1& t;. 2.95ts t;%t
L10s5& 5s %& 1::50.9 %&' &1t %& .23418.. 1: N5ss%& 2ust t%<. 39.0.'.&0.
1>.9 3910.'u9%4 01&s5'.9%t51&s.
Ae arrived at the conclusion that we should ,o be%ond the procedural rules and
i++ediatel% take a look at the intrinsic +erits of the case based on several
considerations.
-irst, the parties have sufficientl% ventilated their positions on the disputed
e+plo%er&e+plo%ee relationship and have, in fact, sub+itted the +atter for the CAMs
consideration.
(econd, the CA correctl% ruled that no e+plo%er&e+plo%ee relationship e>ists
between .ocsin and )issan.
.ocsin was undeniabl% Chair+an and President, and was elected to these positions
b% the )issan board pursuant to its :%&laws.
1!
cra#aw As such, he was a corporate officer,
not an e+plo%ee. The CA reached this conclusion b% rel%in, on the sub+itted facts
and on Presidential Decree !"&A, which defines corporate officers as Nthose officers
of a corporation who are ,iven that character either b% the Corporation Code or b%
the corporationMs b%&laws.O .ikewise, (ection 5 of :atas Pa+bansa :l,. 2!, or the
Corporation Code of the Philippines /Corporation Code0 provides that corporate
officers are the 39.s5'.&t, s.09.t%98, t9.%su9.9%&' su0; 1t;.9 1::50.9s %s 2%8
7. 391>5'.' :19 5& t;. 78*4%6s.
Third. Bven as B>ecutive Dice&PresidentCTreasurer, .ocsin alread% acted as a
corporate officer because the position of B>ecutive Dice&PresidentCTreasurer is
provided for in )issanMs :%&.aws. Article 4D, (ection 4 of these :%&.aws specificall%
provides for this position, as follows@chanroblesvirtualawlibrar%
ART4C.B 4D
Officers
(ection #. Blection and Appoint+ent Q The :oard of Directors at their first +eetin,,
annuall% thereafter, shall elect as officers of the Corporation a Chair+an of the
:oard, a President, %& EA.0ut5>. =50.*!9.s5'.&tET9.%su9.9, % =50.*
!9.s5'.&tEG.&.9%4 M%&%g.9 %&' % C19319%t. S.09.t%98. T;. 1t;.9 S.&519
O3.9%t5&g O::50.9s 1: t;. C19319%t51& s;%44 7. %3315&t.' 78 t;. B1%9' u31&
t;. 9.0122.&'%t51& 1: t;. !9.s5'.&t.
> > > >
(ection 4. B>ecutive Dice&PresidentCTreasurer Q The B>ecutive Dice&
PresidentCTreasurer shall have such powers and perfor+ such duties as are
prescribed b% these :%&.aws, and as +a% be re8uired of hi+ b% the :oard of
Directors. As the concurrent Treasurer of the Corporation, he shall have the char,e
of the funds, securities, receipts, and disburse+ents of the Corporation. 9e shall
deposit, or cause to be deposited, the credit of the Corporation in such banks or
trust co+panies, or with such banks of other depositories, as the :oard of Directors
+a% fro+ ti+e to ti+e desi,nate. 9e shall tender to the President or to the :oard of
Directors whenever re8uired an account of the financial condition of the corporation
and of all his transactions as Treasurer. As soon as practicable after the close of
each fiscal %ear, he shall +ake and sub+it to the :oard of Directors a like report of
such fiscal %ear. 9e shall keep correct books of account of all the business and
transactions of the Corporation.
4n Okol v. (li++ers Aorld 4nternational,
4"
cra#aw citin, Taban, v. )ational .abor Relations
Co++ission,
4#
cra#aw we held that Q
> > > an NofficeO is 09.%t.' 78 t;. 0;%9t.9 1: t;. 019319%t51& %&' t;. 1::50.9 5s
.4.0t.' 78 t;. '59.0t19s 19 st10<;14'.9s. O& t;. 1t;.9 ;%&', %& Q.23418..R
usu%448 100u35.s &1 1::50. %&' g.&.9%448 5s .23418.' &1t 78 %0t51& 1: t;.
'59.0t19s 19 st10<;14'.9s 7ut 78 t;. 2%&%g5&g 1::50.9 1: t;. 019319%t51&
6;1 %4s1 '.t.925&.s t;. 0123.&s%t51& t1 7. 3%5' t1 su0; .23418...
[E23;%s5s su3345.'.]09%1%6
4n this case, .ocsin was .4.0t.' b% the )C.P4 :oard, in accordance with
the A2.&'.' B8*L%6s of the corporation. The followin, factual deter+ination b%
the CA is elucidatin,@chanroblesvirtualawlibrar%
6ore i+portant, private respondent failed to state an% such Ncircu+stanceO b% which
the petitioner corporation Nen,a,ed his servicesO as corporate officer that would
+ake hi+ an e+plo%ee. 4n the first place, the Dice&PresidentCTreasurer was elected
on an annual basis as provided in the :%&.aws, and no duties and responsibilities
were stated b% private respondent which he dischar,ed while occup%in, said
position other than those specificall% set forth in the :%&.aws or re8uired of hi+ b%
the :oard of Directors. The unrebutted fact re+ains that private respondent held
the position of B>ecutive Dice&PresidentCTreasurer of petitioner corporation, a
position provided for in the latterMs b%&laws, b% virtue of election b% the :oard of
Directors, and has functioned as such B>ecutive Dice&PresidentCTreasurer pursuant
to the provisions of the said :%&.aws. Private respondent knew ver% well that he
was si+pl% not re&elected to the said position durin, the Au,ust 5, ""5 board
+eetin,, but he had ob=ected to the election of a new set of officers held at the ti+e
upon the advice of his law%er that he cannot be Nter+inatedO or replaced as
B>ecutive Dice&PresidentCTreasurer as he had attained tenurial securit%.
4
chanroblesvirtuallawlibrar%
Ae full% a,ree with this factual deter+ination which we find to be sufficientl%
supported b% evidence. Ae likewise rule, based on law and established
=urisprudence, that L10s5&, at the ti+e of his severance fro+ )C.P4, was the
latterMs 019319%t. 1::50.9.
%. The Iuestion of 3urisdiction
'iven .ocsinMs status as a corporate officer, the RTC, not the .abor Arbiter or the
).RC, has =urisdiction to hear the le,alit% of the ter+ination of his relationship with
)issan. As we also held in Okol, a corporate officerMs dis+issal fro+ service is an
intra&corporate dispute@chanroblesvirtualawlibrar%
4n a nu+ber of cases JBstrada v. )ational .abor Relations Co++ission, '.R. )o.
#"2$, 4 October #!!2, 2 (CRA $"!7 .o<on v. )ational .abor Relations
Co++ission, 1#" Phil. # /#!!507 Bspino v. )ational .abor Relations Co++ission,
1#" Phil. 2# /#!!507 -ortune Ce+ent Corporation v. )ational .abor Relations
Co++ission, '.R. )o. $!$2, 4 3anuar% #!!#, #!1 (CRA 5*cra#aw , we have held that
a019319%t. 1::50.9Gs '5s25ss%4 5s %46%8s % 019319%t. %0t, or an 5&t9%*
019319%t. 01&t91>.9s8 which arises between a stockholder and a
corporation.
41
cra#aw JB+phasis supplied.Kchanroblesvirtuallawlibrar%
so that the RTC should e>ercise =urisdiction based on the followin, le,al
reasonin,@chanroblesvirtualawlibrar%
Prior to its a+end+ent, (ection 5/c0 of Presidential Decree )o. !"&A /PD !"&A0
provided that intra&corporate disputes fall within the =urisdiction of the (ecurities
and B>chan,e Co++ission /(BC0@chanroblesvirtualawlibrar%
(ec. 5. 4n addition to the re,ulator% and ad=udicative functions of the (ecurities and
B>chan,e Co++ission over corporations, partnerships and other for+s of
associations re,istered with it as e>pressl% ,ranted under e>istin, laws and decrees,
it shall have ori,inal and e>clusive =urisdiction to hear and decide cases
involvin,@chanroblesvirtualawlibrar%
> > > >
c0 Controversies in the election or appoint+ents of directors, trustees, officers or
+ana,ers of such corporations, partnerships or associations.
(ubsection 5., (ection 5 of Republic Act )o. *$!!, which took effect on * Au,ust
""", transferred to re,ional trial courts the (BCMs =urisdiction over all cases listed
in (ection 5 of PD !"&A@chanroblesvirtualawlibrar%
5.. The Co++issionMs =urisdiction over all cases enu+erated under (ection 5 of
Presidential Decree )o. !"&A is hereb% transferred to the Courts of ,eneral
=urisdiction or the appropriate R.g51&%4 T95%4 C1u9t. JB+phasis supplied.Kchanroblesvirtuallawlibrar%
7. Precedence of (ubstantive 6erits7
!952%08 1: E4.2.&t 1: -u95s'50t51&
:ased on the above =urisdictional considerations, we would be forced to re+and the
case to the .abor Arbiter for further proceedin,s if we were to dis+iss the petition
outri,ht due to the wron,ful use of Rule 25.
44
cra#aw Ae cannot close our e%es, however,
to the factual and le,al realit%, established b% evidence alread% on record, that
.ocsin is a corporate officer whose ter+ination of relationship is outside a labor
arbiterMs =urisdiction to rule upon.
Ender these circu+stances, we have to ,ive precedence to the +erits of the case,
and pri+ac% to the ele+ent of =urisdiction. 3urisdiction is the power to hear and rule
on a case and is the threshold ele+ent that +ust e>ist before an% 8uasi&=udicial
officer can act. 4n the conte>t of the present case, the .abor Arbiter does not have
=urisdiction over the ter+ination dispute .ocsin brou,ht, and should not be allowed
to continue to act on the case after the absence of =urisdiction has beco+e obvious,
based on the records and the law. 4n +ore practical ter+s, a contrar% rulin, will
onl% cause substantial dela% and inconvenience as well as unnecessar% e>penses, to
the point of in=ustice, to the parties. This conclusion, of course, does not ,o into the
+erits of ter+ination of relationship and is without pre=udice to the filin, of an intra&
corporate dispute on this point before the appropriate RTC.
+"EREFORE, we D4(64(( the petitionerMs petition for review on certiorari, and
A--4R6 the Decision of the Court of Appeals, in CA&'.R. (P )o. #"1$",
pro+ul,ated on Au,ust *, ""*, as well as its Resolution of Dece+ber !, ""*,
which reversed and set aside the 6arch #", ""* Order of .abor Arbiter Concepcion
in ).RC )CR Case )o. ""&"2&"2#25&"$. This Decision is without pre=udice to
petitioner .ocsinMs available recourse for relief throu,h the appropriate re+ed% in
the proper foru+.
)o pronounce+ent as to costs.
SO OR#ERE#.