Maternity Childrens Hospital vs.

Secretary of Labor
G.R. No. 7899 !"ne #$ %989
&N '(NC) M&*+(L*&($ !.)
,acts)
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de
Oro Women's Club and Puericulture Center, headed by Mrs !ntera Dorado, as holdover
President "he hospital derives its finances from the club itself as #ell as from paying patients,
averaging $%& per month 't is also partly subsidi(ed by the Philippine Charity )#eepsta*es
Office and the Cagayan De Oro City government
Petitioner has forty-one +,$- employees !side from salary and living allo#ances, the employees
are given food, but the amount spent therefor is deducted from their respective salaries
On May .%, $/01, ten +$&- employees of the petitioner employed in different capacities2positions
filed a complaint #ith the Office of the 3egional Director of 4abor and 5mployment, 3egion 6,
for underpayment of their salaries and 5CO4!), #hich #as doc*eted as 3O6 Case 7o CW-
8$-01
On 9une $1, $/01, the 3egional Director directed t#o of his 4abor )tandard and Welfare
Officers to inspect the records of the petitioner to ascertain the truth of the allegations in the
complaints Based on their inspection report and recommendation, the 3egional Director issued
an Order dated !ugust ,, $/01, directing the payment of P8.%,000:0, representing
underpayment of #ages and 5CO4!s to all the petitioner's employees
Petitioner appealed from this Order to the Minister of 4abor and 5mployment, ;on !ugusto )
)anche(, #ho rendered a Decision on )eptember .,, $/01, modifying the said Order in that
deficiency #ages and 5CO4!s should be computed only from May .%, $/0% to May .%, $/01,
On October .,, $/01, the petitioner filed a motion for reconsideration #hich #as denied by the
)ecretary of 4abor in his Order dated May $%, $/08, for lac* of merit
+ss"e)
Whether or not the 3egional Director had <urisdiction over the case and if so, the e=tent of
coverage of any a#ard that should be forthcoming, arising from his visitorial and enforcement
po#ers under !rticle $.0 of the 4abor Code
Held)
"his is a labor standards case, and is governed by !rt $.0-b of the 4abor Code, as amended
by 5O 7o $$$ >nder the present rules, a 3egional Director e=ercises both visitorial and
enforcement po#er over labor standards cases, and is therefore empo#ered to ad<udicate
money claims, provided there still e=ists an employer-employee relationship, and the findings of
the regional office is not contested by the employer concerned
1
4abor standards refer to the minimum re?uirements prescribed by e=isting la#s, rules, and
regulations relating to #ages, hours of #or*, cost of living allo#ance and other monetary and
#elfare benefits, including occupational, safety, and health standards +)ection 8, 3ule ', 3ules
on the Disposition of 4abor )tandards Cases in the 3egional Office, dated )eptember $1,
$/08-
*ecision)
!CCO3D'7@4A, this petition should be dismissed, as it is hereby D')M'))5D, as regards all
persons still employed in the ;ospital at the time of the filing of the complaint, but @3!7"5D as
regards those employees no longer employed at that time )O O3D535D
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes,
Grio-Aquino and Regalado, JJ., concur
2
Calalan- vs. .illia/s
G.R. No. 078 1 *ece/ber %90
,+RS2 *+3+S+4N$ L(5R&L 6!7) 0 C4NC5R
,acts)
! resolution by the 7ational "raffice Commission that animal dra#n vehicles be prohibited from
passing along 3osario )treet e=tending from Pla(a Calderon de la Barca to DasmariBas )treet,
from 8C%& am to $.C%& pm and from $C%& pm to :C%& pmD and along 3i(al !venue e=tending
from the railroad crossing at !ntipolo )treet to 5chague )treet, from 8 am to $$ pm, for a
period of one year from the date of the opening of the Colgante Bridge to traffic #as approved
and adopted by the )ecretary of Public Wor*s and Communications upon indorsement by the
Director of Public Wor*s pursuant to Common#ealth !ct :,0 #ith modifications that 3osario
)treet and 3i(al !venue be closed to traffic of animal-dra#n vehicles, bet#een the points and
during the hours as indicated
"he Mayor of Manila and the !cting Chief of Police of Manila have enforced and caused to be
enforced the rules and regulations thus adopted Ma=imo Calalang, in his capacity as a private
citi(en and as a ta=payer of Manila, brought before the )upreme Court the petition for a #rit of
prohibition against ! D Williams, as Chairman of the 7ational "raffic CommissionD Eicente
Fragante, as Director of Public Wor*sD )ergio Bayan, as !cting )ecretary of Public Wor*s and
CommunicationsD 5ulogio 3odrigue(, as Mayor of the City of ManilaD and 9uan Domingue(, as
!cting Chief of Police of Manila
+ss"e)
Whether the rules and regulations promulgated by the Director of Public Wor*s infringe upon
the constitutional precept regarding the promotion of social <ustice to insure the #ell-being and
economic security of all the people
Held)
"he promotion of social <ustice is to be achieved not through a mista*en sympathy to#ards any
given group
)ocial <ustice is Gneither communism, nor despotism, nor atomism, nor anarchy,G but the
humani(ation of la#s and the e?uali(ation of social and economic forces by the )tate so that
<ustice in its rational and ob<ectively secular conception may at least be appro=imated )ocial
<ustice means the promotion of the #elfare of all the people, the adoption by the @overnment of
measures calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social e?uilibrium in the interrelations of the
members of the community, constitutionally, through the adoption of measures legally <ustifiable,
or e=tra-constitutionally, through the e=ercise of po#ers underlying the e=istence of all
governments on the time-honored principle of salus populi est suprema le=
)ocial <ustice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should
be e?ually and evenly e=tended to all groups as a combined force in our social and economic
life, consistent #ith the fundamental and paramount ob<ective of the state of promoting the
3
health, comfort, and ?uiet of all persons, and of bringing about Gthe greatest good to the
greatest numberG
*ecision)
'7 E'5W OF ";5 FO35@O'7@, the Writ of Prohibition Prayed for is hereby denied, #ith costs
against the petitioner )o ordered
Avancea, C.J., !"erial, #iaz and $orrilleno, JJ., concur.
4
8eople vs. 3era Reyes
G.R. No. L90:708 (pril :$ %9#9
&N '(NC$ +M8&R+(L$ !.)
,acts)
"he defendant #as charged in the Court of First 'nstance of Manila by the assistant city fiscal
#ith a violation of !ct 7o .:,/, as amended by !cts 7os %&0: and %/:0 "he information
alleged that from )eptember / to October .0, $/%1, and for the some time after, the accused, in
his capacity as president and general manager of the Consolidated Mines, having engaged the
services of )evera Eelasco de Eera as stenographer, at an agreed salary of P%: a month
#illfully and illegally refused to pay the salary of said stenographer corresponding to the above-
mentioned period of time, #hich #as long due and payable, in spite of her repeated demands
"he accused interposed a demurrer on the ground that the facts alleged in the information do
not constitute any offense, and that even if they did, the la#s penali(ing it are unconstitutional
!fter the hearing, the court sustained the demurrer, declaring unconstitutional the last part of
section $ of !ct 7o .:,/ as last amended by !ct 7o %/:0 for the reason that it violates the
constitutional prohibition against imprisonment for debt, and dismissed the case
"he last part of )ection $ of !ct 7o .:,/, as last amended by section $ of !ct 7o %/:0
considers as illegal the refusal of an employer to pay #hen he can do so, the salaries of
his employers or laborers on the $:th or last day of every month or on )aturday of every
#ee*, #ith only t#o days e=tension, and the non-payment of the salary #ithin the period
specified is considered as a violation of the la# "he same act e=empts from criminal
responsibility the employer #ho, having failed to pay the salary, should prove
satisfactorily that it #as impossible to ma*e such payment
"he fiscal appealed from said order 'n this appeal the )olicitor-@eneral contends that the court
erred in declaring !ct 7o %/:0 unconstitutional, and in dismissing the cause
+ss"e)
Whether or not the last part of )ec $ of !ct 7o .:/, as amended by !ct 7o %/:0 is
constitutional and valid
Held)
We hold that the last part of section $ of !ct 7o .:,/, as last amended by section $ of !ct 7o
%/:0, is valid We do not believe that this constitutional provision has been correctly applied in
this case ! close perusal of the last part of section $ of !ct 7o .:,/, as amended by section $
of !ct 7o %/:0, #ill sho# that its language refers only to the employer #ho, being able to ma*e
payment, shall abstain or refuse to do so, #ithout <ustification and to the pre<udice of the laborer
or employee !n employer so circumstanced is not unli*e a person #ho defrauds another, by
refusing to pay his <ust debt 'n both cases the deceit or fraud is the essential element
constituting the offense "he first case is a violation of !ct 7o %/:0, and the second is estafa
punished by the 3evised Penal Code 'n either case the offender cannot certainly invo*e the
constitutional prohibition against imprisonment for debt
5
Police po#er is the po#er inherent in a government to enact la#s, #ithin constitutional limits, to
promote the order, safety, health, morals, and general #elfare of society 'n the e=ercise of this
po#er the 4egislature has ample authority to approve the disputed portion of !ct 7o %/:0
#hich punishes the employer #ho, being able to do so, refuses to pay the salaries of his
laborers or employers in the specified periods of time >ndoubtedly, one of the purposes of the
la# is to suppress possible abuses on the part of employers #ho hire laborers or employees
#ithout paying them the salaries agreed upon for their services, thus causing them financial
difficulties Without this la#, the laborers and employees #ho earn meager salaries #ould be
compelled to institute civil actions #hich, in the ma<ority of cases, #ould cost them more than
that #hich they #ould receive in case of a decision in their favor
*ecision)
We hold that the last part of section $ of !ct 7o .:,/, as last amended by section $ of !ct 7o
%/:0, is valid, and #e reverse the appealed order #ith instructions to the lo#er court to proceed
#ith the trial of the criminal case until it is terminated, #ithout special pronouncement as to costs
in this instance )o ordered
Avancea, C. J., %illa-Real, #iaz, &aurel, Conce"cion, and 'oran, JJ., concur
6
8eople vs. 8o/ar
G.R. No. L9118 Nove/ber #$ %910
&N '(NC$ !4HNS4N$ !.)
,acts)
On the .1th day of October, $/.%, the prosecuting attorney of the City of Manila presented a
complaint in the Court of First 'nstance, accusing the defendant of a violation of section $% in
connection #ith section $: of !ct 7o %&8$ of the Philippine 4egislature "he complaint alleged
that the defendant being the manager and person in charge of 4a Flor de la 'sabela +a tobacco
factory- failed and refused to pay Macaria Fa<ardo +employed as cigar ma*er- the sum of P0& to
#hich she #as entitled as her regular #ages on time of delivery and confinement by reason of
pregnancy depite and over the demands to do so
"o said complaint, the defendant demurred, alleging that the facts therein contained did not
constitute an offense "he demurrer #as overruled, #hereupon the defendant ans#ered and
admitted at the trial all of the allegations contained in the complaint, and contended that the
provisions of said !ct 7o %&8$, upon #hich the complaint #as based #ere illegal,
unconstitutional and void
>pon a consideration of the facts charged in the complaint and admitted by the defendant, the
;onorable C ! 'mperial, <udge, found the defendant guilty of the alleged offense described in
the complaint, and sentenced him to pay a fine of P:&, in accordance #ith the provisions of
section $: of said !ct, to suffer subsidiary imprisonment in case of insolvency, and to pay the
costs From that sentence the defendant appealed
+ss"e)
Whether or not the provisions of sections $% and $: of !ct 7o %&8$ are a reasonable and la#ful
e=ercise of the police po#er of the state
Held)
"he provisions of section $%, of !ct 7o %&8$ of the Philippine 4egislature, are unconstitutional
and void, in that they violate and are contrary to the provisions of the first paragraph of section %
of the !ct of Congress of the >nited )tates of !ugust ./, $/$1
)aid section $% #as enacted by the 4egislature of the Philippine 'slands in the e=ercise of its
supposed police po#er, #ith the praise#orthy purpose of safeguarding the health of pregnant
#omen laborers in Gfactory, shop or place of labor of any description,G and of insuring to them, to
a certain e=tent, reasonable support for one month before and one month after their delivery 't
has been said that the particular statute before us is re?uired in the interest of social <ustice for
#hose end freedom of contract may la#fully be sub<ected to restraint
"he right to liberty includes the right to enter into contracts and to terminate contracts One
citi(en cannot be compelled to give employment to another citi(en, nor can anyone be
compelled to be employed against his #ill "he !ct of $0/%, no# under consideration, deprives
the employer of the right to terminate his contract #ith his employee Clearly, therefore, the la#
has deprived, every person, firm, or corporation o#ning or managing a factory, shop or place of
7
labor of any description #ithin the Philippine 'slands, of his right to enter into contracts of
employment upon such terms as he and the employee may agree upon "he la# creates a term
in every such contract, #ithout the consent of the parties )uch persons are, therefore, deprived
of their liberty to contract "he constitution of the Philippine 'slands guarantees to every citi(en
his liberty and one of his liberties is the liberty to contract
5very la# for the restraint and punishment of crimes, for the preservation of the public peace,
health, and morals, must come #ithin this category But the state, #hen providing by legislation
for the protection of the public health, the public morals, or the public safety, is sub<ect to and is
controlled by the paramount authority of the constitution of the state, and #ill not be permitted to
violate rights secured or guaranteed by that instrument or interfere #ith the e=ecution of the
po#ers and rights guaranteed to the people under their la# H the constitution
"he police po#er of the state is a gro#ing and e=panding po#er But that po#er cannot gro#
faster than the fundamental la# of the state, nor transcend or violate the e=press inhibition of
the people's la# H the constitution 'f the people desire to have the police po#er e=tended and
applied to conditions and things prohibited by the organic la#, they must first amend that la#
't #ill also be noted from an e=amination of said section $%, that it ta*es no account of contracts
for the employment of #omen by the day nor by the piece "he la# is e?ually applicable to each
case 't #ill hardly be contended that the person, firm or corporation o#ning or managing a
factory, shop or place of labor, #ho employs #omen by the day or by the piece, could be
compelled under the la# to pay for si=ty days during #hich no services #ere rendered
*ecision)
"he rule in this <urisdiction is, that the contracting parties may establish any agreements, terms,
and conditions they may deem advisable, provided they are not contrary to la#, morals or public
policy +!rt $.::, Civil Code-
"herefore, the sentence of the lo#er court is hereby revo*ed, the complaint is hereby
dismissed, and the defendant is hereby discharged from the custody of the la#, #ith costs de
oficio )o ordered
(treet, 'alcol!, Avancea, %illa!or, )strand and Ro!ualdez, JJ., concur
8
8hilippine (ssociation of Service &;pporters$ +nc. vs. *rilon
G.R. No. 8%9:8 !"ne #$ %988
&N '(NC$ S(RM+&N24$ !)
,acts)
"he petitioner, Philippine !ssociation of )ervice 5=porters, 'nc +P!)5'-, a firm Gengaged
principally in the recruitment of Filipino #or*ers for overseas placement,G challenges the
Constitutional validity of Department Order 7o $, )eries of $/00, of the Department of 4abor
and 5mployment, in the character of G@>'D54'75) @OE537'7@ ";5 "5MPO3!3A
)>)P57)'O7 OF D5P4OAM57" OF F'4'P'7O DOM5)"'C !7D ;O>)5;O4D WO3I53),G
and specifically assailed for Gdiscrimination against males or femalesDG
.
that it Gdoes not apply
to all Filipino #or*ers but only to domestic helpers and females #ith similar s*illsDG
%
and that it is
violative of the right to travel 't is held li*e#ise to be an invalid e=ercise of the la#ma*ing po#er,
police po#er being legislative, and not e=ecutive, in character
On May .:, $/00, the )olicitor @eneral, on behalf of the respondents )ecretary of 4abor
and !dministrator of the Philippine Overseas 5mployment !dministration, filed a Comment
informing the Court that on March 0, $/00, the respondent 4abor )ecretary lifted the
deployment ban in the states of 'ra?, 9ordan, Jatar, Canada, ;ong*ong, >nited )tates, 'taly,
7or#ay, !ustria, and )#it(erland 'n submitting the validity of the challenged Gguidelines,G the
)olicitor @eneral invo*es the police po#er of the Philippine )tate
+ss"e)
Whether the challenged Department Order is a valid regulation in the nature of a police po#er
measure under the Constitution
Held)
"he concept of police po#er is #ell-established in this <urisdiction 't has been defined as the
Gstate authority to enact legislation that may interfere #ith personal liberty or property in order to
promote the general #elfareG
:
!s defined, it consists of +$- an imposition of restraint upon
liberty or property, +.- in order to foster the common good 't is not capable of an e=act definition
but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace
'ts scope, ever-e=panding to meet the e=igencies of the times, even to anticipate the future
#here it could be done, provides enough room for an efficient and fle=ible response to
conditions and circumstances thus assuring the greatest benefits
't finds no specific Constitutional grant for the plain reason that it does not o#e its origin to the
Charter !long #ith the ta=ing po#er and eminent domain, it is inborn in the very fact of
statehood and sovereignty 't is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance "he police po#er of the )tate is a po#er
coe=tensive #ith self- protection 't may be said to be that inherent and plenary po#er in the
)tate #hich enables it to prohibit all things hurtful to the comfort, safety, and #elfare of society
!s a general rule, official acts en<oy a presumed validity
$%
'n the absence of clear and
convincing evidence to the contrary, the presumption logically stands
9
"he petitioner has sho#n no satisfactory reason #hy the contested measure should be nullified
"here is no ?uestion that Department Order 7o $ applies only to Gfemale contract #or*ers,G
$,

but it does not thereby ma*e an undue discrimination bet#een the se=es 't is #ell-settled that
Ge?uality before the la#G under the Constitution
$:
does not import a perfect 'dentity of rights
among all men and #omen
GProtection to laborG does not signify the promotion of employment alone What concerns the
Constitution more paramountly is that such an employment be above all, decent, <ust, and
humane >nder these circumstances, the @overnment is duty-bound to insure that our toiling
e=patriates have ade?uate protection, personally and economically, #hile a#ay from home 'n
this case, the @overnment has evidence, an evidence the petitioner cannot seriously dispute, of
the lac* or inade?uacy of such protection, and as part of its duty, it has precisely ordered an
indefinite ban on deployment
"his Court understands the grave implications the ?uestioned Order has on the business of
recruitment "he concern of the @overnment, ho#ever, is not necessarily to maintain profits of
business firms 'n the ordinary se?uence of events, it is profits that suffer as a result of
@overnment regulation "he interest of the )tate is to provide a decent living to its citi(ens
*ecision)
"he @overnment has convinced the Court in this case that this is its intent We do not find the
impugned Order to be tainted #ith a grave abuse of discretion to #arrant the e=traordinary relief
prayed for
W;535FO35, the petition is D')M'))5D 7o costs )O O3D535D
*a", C.J., Fernan, Narvasa, 'elencio-$errera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Cortes and Grio-Aquino, JJ., concur.
Gutierrez, Jr. and 'edialdea, JJ., are on leave
10
Cere<o vs. (tlantic G"lf = 8acific Co/pany
G.R. No. L9%%7 ,ebr"ary 0$ %9%>
&N '(NC) 2R&N2$ !.)
,acts)
9orge Ocumen +plaintiffKs son and only means of support- #as an employee of the defendant as
a day laborer on the 0th of 9uly, $/$%, assisting in laying gas pipes on Calle ;erran in the City of
Manila "he digging of the trench #as completed both #ays from the cross-trench in Calle Pa(,
and the pipes #ere laid therein up to that point "he men of the deceased's gang #ere filling the
#est end, and there #as no #or* in the progress at the east end of the trench )hortly after the
deceased entered the trench at the east end to ans#er a call of nature, the ban* caved in,
burying him to his nec* in dirt, #here he died before he could be released 't has not been
sho#n that the deceased had received orders from the defendant to enter the trench at this
pointD nor that the trench had been prepared by the defendant as a place to be used as a #ater-
closetD nor that the defendant ac?uiesced in the using of this place for these purposes !t the
time of the accident the place #here the deceased's duty of refilling the trench re?uired him to
be #as at the #est end "here is no contention that there #as any danger #hatever in the
refilling of the trench
"he plaintiff insists that the defendant #as negligent in failing to shore or brace the trench at the
place #here the accident occurred While, on the other hand, the defendant urges +$- that it #as
under no obligation, in so far as the deceased #as concerned, to brace the trench, in the
absence of a sho#ing that the soil #as of a loose character or the place itself #as dangerous,
and +.- that although the relation of master and servant may not have ceased, for the time
being, to e=ist, the defendant #as under no duty to the deceased e=cept to do him no intentional
in<ury, and to furnish him #ith a reasonably safe place to #or*
9udgment #as entered in a favor of the plaintiff for the sum of P$,.:&, together #ith interest and
costs Defendant appealed
+ss"e)
Whether or not the plaintiff has the right to recover based on the 5mployers' 4iability !ct +!ct
7o $08,- or the Civil Code
Held)
!ct 7o $08, is essentially a copy of the Massachusetts 5mployers' 4iability !ct, it having been
originally enacted in that <urisdiction in $008 "he Massachusetts statute #as Gcopied verbatim,
#ith some variations of detail, from the 5nglish statute
We agree #ith the )upreme Court of Massachusetts that the !ct should be liberally construed in
favor of employees "he main purpose of the !ct #as to e=tend the liability of employers and to
render them liable in damages for certain classes of personal in<uries for #hich it #as thought
they #ere liable under the la# prior to the passage of the !ct
We do not doubt that it #as, prior to the passage of !ct 7o $08, and still is, the duty of the
employer in this <urisdiction to perform those duties, in reference to providing reasonably safe
11
places, and safe and suitable #ays, #or*s, and machinary, etc, )o, to this e=tent, the first
subsection of section $ of the !ct is simply declaratory of the la# as it stood previous to the
enactment )tanding in this form, it is ?uite clear that it #as not intended that all rights to
compensation and of action against employers by in<ured employees or their representatives
must be brought under be governed by the !ct
!ssuming that the e=cavation for the gas pipe is #ithin the category of G#ays, #or*s, or
machinery connected #ith the used in the business of the defendant, G #e are of the opinion
that recovery cannot be had under the !ct for the reason that, as #e have indicated, the
deceased #as at a place #here he had no right to be at the time he met his death ;is #or* did
not call him there, nor is it sho#n that he #as permitted there tacitly or other#ise >nder the
!nglo-!merican la# the applicable to such a set of facts is that the master is not responsible,
under the 5mployers' 4iability !ct, for accidents to his employees #hen they are outside the
scope of their employment for purpose of their o#n
"he case under consideration does not fall #ithin the e=ceptions of !rt $$&: of the Civil code
Mentioned !fter providing a reasonably safe place in and about #hich the deceased #as
re?uired to #or*, the defendant's liability #as then limited to those events #hich could have
been foreseen !rticle $/&. provides that a person #ho, by an act or omission causes damage
to another #hen there is fault or negligence shall be obliged to repair the damage so done
!rticle $/&% after providing for the liability of principals for the acts of their employees, agents,
or these for #hom they are other#ise responsible, provides that such liability shall cease #hen
the persons mentioned therein prove that they employed all the diligence of a good father of a
family to avoid the damage We have then, on the one hand, nonliability of an employer for
events #hich could not be foreseen +article $$&:-, and #here he has e=ercised the care of a
good father of a family +article $/&%-, and, on the other hand, his liability #here fault or
negligence may be attributed to him +article $/&.-
"he cause of Ocumen's death #as not the #eight of the earth #hich fell upon him, but #as due
to suffocation "he accident #as of a most unusual character 5=perience and common sense
demonstrate that ordinarily no danger to employees is to be anticipated from such a trench as
that in ?uestion "he fact that the #alls had maintained themselves for a #ee*, #ithout
indication of their giving #ay, strongly indicates that the necessity for bracing or shoring the
trench #as remote "o re?uire the company to guard against such an accident as the one in
?uestion #ould virtually compel it to shore up every foot of the miles of trenches dug by it in the
city of Manila for the gas mains >pon a full consideration of the evidence, #e are clearly of the
opinion that ordinary care did not re?uire the shoring of the trench #alls at the place #here the
deceased met his death "he event properly comes #ithin the class of those #hich could not be
foreseenD and, therefore, the defendant is not liable under the Civil Code
5ffect upon the 4a# in this country
"he act #as not intended to curtail the any of the rights #hich an employee had under the pre-
e=isting la# >nder the act, the defense of contributory negligence #ould defeat an action for
damages
*ecision)
;aving reached the conclusions above set forth, it is unnecessary to in?uire into the right of the
plaintiff to bring and maintain this action
12
For the foregoing reasons the <udgment appealed from is reversed and the complaint dismissed,
#ithout costs )o ordered
Arellano, C.J., +orres, Jo,nson and Araullo, JJ., Concur
13
(bella vs. NLRC
G.R. No. 7%8%# !"ly 1$ %987
&N '(NC) 8(R(S 6!7$ %# C4NC5R
,acts)
3icardo Dionele, )r +private respondent- has been a regular farm #or*er since $/,/ in
;acienda Danao-3amona located in Ponteverde, 7egros Occidential )aid farm land #as
leased to 3osalina !bella +petitioner- for a period of ten +$&- years, rene#able for another ten
years
>pon the e=piration of her leasehold rights, petitioner dismissed 3icardo and another co-
employee
Private respondents filed a complaint against the petitioner at the Ministry of 4abor and
5mployment for overtime pay, illegal dismissal and reinstatement #ith bac*#ages !fter
presenting their respective evidence, the 4abor !rbiter ruled that the dismissal is #arranted by
the cessation of business, but granted the private respondentsK separation pay
Petitioner filed a motion for reconsideration but the same #as denied ;ence, the present
petition
+ss"e)
Whether or not private respondents are entitled to separation pay
Held)
"he petition is devoid of merit
!rticle .0, of the 4abor code provides that Lthe employer may also terminate the employment of
any employee due to the installation of labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or underta*ing
unless the closing is for the purpose of circumventing the provisions of this title, by serving a
#ritten notice on the #or*ers and the Ministry of 4abor and 5mployment at least month before
the intended date thereof 'n case of termination due to the installation of labor-saving devices
or redundancy, the #or*er affected thereby shall be entitled to a separation pay e?uivalent to at
least his one month pay or to at least one month pay for every year of service, #hichever is
higher 'n case of retrenchment to prevent losses and in cases of closure or cessation of
operations of establishment or underta*ing not due to serious business losses or financial
reverses, the separation pay shall be e?uivalent to one month pay or at least one-half month
pay for every year of service #hichever is higher ! fraction of at least si= months shall be
considered one #hole yearG
"he purpose of the said article is obviousC the protection of the #or*ers #hose employment is
terminated because of the closure of establishment and reduction of personnel Without said
la#, employees li*e private respondents in the case at bar #ill lose the benefits to #hich they
are entitled for the number of years served !lthough they #ere absorbed by the ne#
management of the hacienda, in the absence of any sho#ing that the latter has assumed the
responsibilities of the former employer, they #ill be considered as ne# employees and the years
14
of service behind them #ould amount to nothing
'n any event, it is #ell-settled that in the implementation and interpretation of the provisions of
the 4abor Code and its implementing regulations, the #or*ingmanKs #elfare should be the
primordial and paramount consideration
*ecision)
"he instant petition is hereby dismissed and the decision of the 4abor !rbiter and the 3esolution
of the Ministry of 4abor and 5mployment are hereby affirmed
15
&"ro9Linea 8hil$ +nc. vs. NLRC
G.R. No. 78781 *ece/ber %$ %987
,+RS2 *+3+S+4N$ 8(R(S$ 6!7)
,acts)
Petitioner 5uro-4inea Phil, 'nc hired private respondent Pastoral as shipping e=pediter on a
probationary basis for a period of si= months Prior to hiring by petitioner, Pastoral had been
employed by Fitscher Manufacturing Corporation also as shipping e=pediter On , February
$/0,, Pastoral received a memorandum terminating his probationary employment in vie# of his
failure Lto meet the performance standards set by the companyM Pastoral filed a complaint for
illegal dismissal against petitioner On $/ 9uly $/0:, the 4abor !rbiter found petitioner guilty of
illegal dismissal Petitioner appealed the decision to the 743C on : !ugust $/0: but the appeal
#as dismissed ;ence the petition for revie# see*ing to reverse and set aside the resolution of
public respondent 743C, affirming the decision of the 4abor !rbiter, #hich ordered the
reinstatement of complainant #ith si= months bac*#ages
+ss"e)
Whether or not the 7ational 4abor 3elations Commission acted #ith grave abuse of discretion
amounting to e=cess of <urisdiction in ruling against the dismissal of the respondent, a
temporary or probationary employee, by his employer
Held)
!lthough a probationary or temporary employee has a limited tenure, he still en<oys the
constitutional protection of security of tenure
Furthermore, #hat ma*es the dismissal highly suspicious is the fact that #hile petitioner claims
that respondent #as inefficient, it retained his services until the last remaining t#o #ee*s of the
si= months probationary employment 7o less important is the fact that private respondent had
been a shipping e=pediter for more than one and a half years before he #as absorbed by
petitioner 't therefore appears that the dismissal in ?uestion is #ithout sufficient <ustification
't must be emphasi(ed that the prerogative of management to dismiss or lay-off an employee
must be done #ithout abuse of discretion, for #hat is at sta*e is not only petitioner's position but
also his means of livelihood "he right of an employer to freely select or discharge his
employees is sub<ect to regulation by the )tate, basically in the e=ercise of its paramount police
po#er
*ecision)
'n the instant case, it is evident that the 743C correctly applied !rticle .0. in the light of the
foregoing and that its resolution is not tainted #ith unfairness or arbitrariness that #ould amount
to grave abuse of discretion or lac* of <urisdiction +3osario Brothers 'nc v Ople, $%$ )C3! 8%
N$/0,O-
P35M')5) CO7)'D535D, the petition is D')M'))5D for lac* of merit, and the resolution of
the 743C is affirmed )O O3D535D
16
Meralco vs. NLRC
G.R. No. 787> !"ly %1$%989
,+RS2 *+3+S+4N) M&*+(L*&($ !.)
,acts)
Private respondent )igno #as employed in petitioner company as supervisor-leadman since
9anuary $/1% up to the time #hen his services #ere terminated on May $0, $/0%
'n $/0$, a certain Fernando de 4ara filed an application #ith the petitioner company for
electrical services at his residence at PeBafrancia )ubdivision, Marcos ;igh#ay, !ntipolo, 3i(al
Private respondent )igno facilitated the processing as #ell as the re?uired documentation for
said application at the Municipality of !ntipolo, 3i(al 'n consideration thereof, private
respondent received from Fernando de 4ara the amount of P8,&&&&& )igno thereafter filed the
application for electric services #ith the Po#er )ales Division of the company
't #as established that the area #here the residence of de 4ara #as located is not yet #ithin the
serviceable point of Meralco But 'n order to e=pedite the electrical connections at de 4ara's
residence, certain employees of the company, including respondent )igno, made it appear in
the application that the sari-sari store located in the entrance to the subdivision, is applicant de
4ara's establishment, #hich, in reality is not o#ned by the latter
!s a result of this scheme, the electrical connections to de 4ara's residence #ere installed
;o#ever, due to the fault of the Po#er )ales Division of petitioner company, Fernando de 4ara
#as not billed for more than a year
Petitioner company conducted an investigation of the matter and found respondent )igno
responsible for the said irregularities in the installation "hus, the services of the latter #ere
terminated on May $0, $/0% #hich prompted him to file a complaint for illegal dismissal, unpaid
#ages, and separation pay
4abor !rbiter rendered a decision based on position papers submitted directing the petitioner to
reinstate private respondent to his former position #ithout bac*#ages Both parties appealed
from the decision to the respondent Commission but #ere dismissed for lac* of merit and #ho in
turn affirmed in toto the decision of the 4abor !rbiter ;ence, this petition
+ss"e)
Whether or not private respondentKs dismissal from petitioner company is valid on grounds of
serious misconduct and loss of trust and confidence
Held)
"his Court has held time and again, in a number of decisions, that not#ithstanding the e=istence
of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal
17
should not be imposed, as it is too severe a penalty if the latter has been employed for a
considerable length of time in the service of his employer
"he po#er to dismiss is the normal prerogative of the employer !n employer, generally, can
dismiss or lay-off an employee for <ust and authori(ed causes enumerated under !rticles .0.
and .0% of the 4abor Code ;o#ever, the right of an employer to freely discharge his employees
is sub<ect to regulation by the )tate
"here is no ?uestion that herein respondent )igno is guilty of breach of trust and violation of
company rules, the penalty for #hich ranges from reprimand to dismissal depending on the
gravity of the offense ;o#ever, as earlier stated, the respondent Commission and the 4abor
!rbiter found that dismissal should not be meted to respondent )igno considering his t#enty
+.&- years of service in the employ of petitioner, #ithout any previous derogatory record, in
addition to the fact that petitioner company had a#arded him in the past, t#o +.-
commendations for honesty 'f ever the petitioner suffered losses resulting from the unlisted
electric consumption of de 4ara, this #as found to be the fault of petitioner's Po#er )ales
Division
Further, in carrying out and interpreting the 4abor Code's provisions and its implementing
regulations, the #or*ingman's #elfare should be the primordial and paramount consideration
"his *ind of interpretation gives meaning and substance to the liberal and compassionate spirit
of the la# as provided for in !rticle , of the 7e# 4abor Code #hich states that Gall doubts in the
implementation and interpretation of the provisions of the 4abor Code including its implementing
rules and regulations shall be resolved in favor of laborG
*ecision)
'n vie# of the foregoing, reinstatement of respondent )igno is proper in the instant case, but
#ithout the a#ard of bac*#ages, considering the good faith of the employer in dismissing the
respondent
!CCO3D'7@4A, premises considered, the petition is hereby D')M'))5D and the assailed
decision of the 7ational 4abor 3elations Commission dated March $., $/08 is !FF'3M5D "he
temporary restraining order issued on !ugust %, $/08 is lifted )O O3D535D
Narvasa, Cruz, Gancayco and Grio-Aquino, JJ., concur
18
Sosito vs. (-"inaldo *evelop/ent Corp.
G.R. No. L90891> *ece/ber %0$ %987
,+RS2 *+3+S+4N) CR5?$ !.)
,acts)
Petitioner Manuel )osito #as employed in $/1, by the private respondent, a logging company,
and #as in charge of logging importation, #ith a monthly salary of P18:&&, $ #hen he #ent on
indefinite leave #ith the consent of the company on 9anuary $1, $/81
On 9uly .&, $/81, the private respondent, through its president, announced a retrenchment
program and offered separation pay to employees in the active service as of 9une %&, $/81,
#ho #ould tender their resignations not later than 9uly %$, $/81 "he petitioner decided to
accept this offer and so submitted his resignation on 9uly ./, $/81, Gto avail himself of the
gratuity benefitsG promised ;o#ever, his resignation #as not acted upon and he #as never
given the separation pay he e=pected "he petitioner complained to the Department of 4abor,
#here he #as sustained by the labor arbiter "he company #as ordered to pay )osito the sum
of P ,,%08:&, representing his salary for si= and a half months On appeal to the 7ational 4abor
3elations Commission, this decision #as reversed and it #as held that the petitioner #as not
covered by the retrenchment program
+ss"e)
Whether or not the petitioner is covered by the retrenchment program and thus entitled to
separation benefits
Held)
't is clear from the memorandum that the offer of separation pay #as e=tended only to those
#ho #ere in the active service of the company as of 9une %&, $/81 't is e?ually clear that the
petitioner #as not eligible for the promised gratuity as he #as not actually #or*ing #ith the
company as of the said date Being on indefinite leave, he #as not in the active service of the
private respondent although, if one #ere to be technical, he #as still in its employ 5ven so,
during the period of indefinite leave, he #as not entitled to receive any salary or to en<oy any
other benefits available to those in the active service
We note that under the la# then in force the private respondent could have validly reduced its
#or* force because of its financial reverses #ithout the obligation to grant separation pay "his
#as permitted under the original !rticle .8.+a-, of the 4abor Code, #hich #as in force at the
time "o its credit, ho#ever, the company voluntarily offered gratuities to those #ho #ould agree
to be phased out pursuant to the terms and conditions of its retrenchment program, in
recognition of their loyalty and to tide them over their o#n financial difficulties "he Court feels
that such compassionate measure deserves commendation and support but at the same time
rules that it should be available only to those #ho are ?ualified therefore We hold that the
petitioner is not one of them
While the Constitution is committed to the policy of social <ustice and the protection of the
#or*ing class, it should not be supposed that every labor dispute #ill be automatically decided
in favor of labor Management also has its o#n rights #hich, as such, are entitled to respect and
19
enforcement in the interest of simple fair play Out of its concern for those #ith less privileges in
life, this Court has inclined more often than not to#ard the #or*er and upheld his cause in his
conflicts #ith the employer )uch favoritism, ho#ever, has not blinded us to the rule that <ustice
is in every case for the deserving, to be dispensed in the light of the established facts and the
applicable la# and doctrine
*ecision)
W;535FO35, the petition is D')M'))5D and the challenged decision !FF'3M5D, #ith costs
against the petitioner )O O3D535D
+ee,an-ee, C.J., Narvasa, Paras and Gancayco, JJ., concur.
20
Col-ate 8al/olive 8hilippines$ +nc.$ vs. 4ple
G.R. No. 7#>8% !"ne #$ %988
S&C4N* *+3+S+4N) 8(R(S$ !.)
,acts)
On March $, $/0:, the respondent >nion filed a 7otice of )tri*e #ith the Bureau of 4abor
3elations +B43- on ground of unfair labor practice consisting of alleged refusal to bargain,
dismissal of union officers2membersD and coercing employees to retract their membership #ith
the union and restraining non-union members from <oining the union
!fter efforts at amicable settlement proved unavailing, the Office of the MO45, upon petition of
petitioner assumed <urisdiction over the dispute pursuant to !rticle .1, +g- of the 4abor Code
'n its position paper, the petitioner pointed out that the infractions committed by the three
salesmen fully convinced the company, after investigation of the e=istence of <ust cause for their
dismissal, that their dismissal #as carried out pursuant to the inherent right and prerogative of
management to disciplne erring employees Moreover, the petitioner refuted the unionKs charge
that the membership in union and refusal to retract precipitated their dismissal #as totally false
and amounted to malicious imputation of union busting "hre respondent union on hte other
hand assailed its ans#ers to the petitionerKs position paper
On !ugust /,$/0:, respondent Minister rendered a decision #hichfound no merit in the >nion's
Complaint for unfair labor practice allegedly committed by petitioner and that the the three
salesmen, Peregrino )ayson, )alvador 3eynante P Cornelio Me<ia, Gnot #ithout faultG hence
Gthe company has grounds to dismiss above named salesmenG
!t the same time respondent Minister directly certified the respondent >nion as the collective
bargaining agent for the sales force in petitioner company and ordered the reinstatement of the
three salesmen to the company on the ground that the employees #ere first offenders
Petitioner filed a Motion for 3econsideration #hich #as denied by respondent Minister in his
assailed Order, dated December .8, $/0: ;ence, this petition
+ss"e)
Whether the respondent Minister committed a grave abuse of discretion #hen, not#ithstanding
his very o#n finding that there #as <ust cause for the dismissal of the three +%- salesmen, he
nevertheless ordered their reinstatement
Held)
"he respondent Minister has the po#er to decide a labor dispute in a case assumed by him
under !rt .1, +g- of the 4abor Code
21
"he order of the respondent Minister to reinstate the employees despite a clear finding of guilt
on their part is not in conformity #ith la# 3einstatement is simply incompatible #ith a finding of
guilt Where the totality of the evidence #as sufficient to #arrant the dismissal of the employees
the la# #arrants their dismissal #ithout ma*ing any distinction bet#een a first offender and a
habitual delin?uent >nder the la#, respondent Minister is duly mandated to e?ually protect and
respect not only the labor or #or*ers' side but also the management and2or employers' side
"he la#, in protecting the rights of the laborer, authori(es neither oppression nor self-destruction
of the employer "o order the reinstatement of the erring employees #ould in effect encourage
une?ual protection of the la#s as a managerial employee of petitioner company involved in the
same incident #as already dismissed and #as not ordered to be reinstated !s stated by >s in
the case of )an Miguel Bre#ery vs 7ational 4abor >nion, Gan employer cannot legally be
compelled to continue #ith the employment of a person #ho admittedly #as guilty of
misfeasance or malfeasance to#ards his employer, and #hose continuance in the service of the
latter is patently inimical to his interestG
*ecision)
W;535FO35, <udgment is hereby rendered 35E53)'7@ and )5""'7@ !)'D5 the Order of
the respondent Minister, dated December .8, $/0: for grave abuse of discretion ;o#ever, in
vie# of the fact that the dismissed employees are first offenders, petitioner is hereby ordered to
give them separation pay "he temporary restraining order is hereby made permanent
)O O3D535D
*a", C.J., 'elencio-$errera, Padilla and (ar!iento, JJ., concur.
22
Mendo<a vs. R"ral 'an@ of L"cban
G.R. No. %::01% !"ly 7$ 10
,+RS2 *+3+S+4N) 8(NG(N+'(N$ !.)
,acts)
On !pril .:, $///, the Board of Directors of the 3ural Ban* of 4ucban, 'nc, issued Board
3esolution 7os //-:. and //-:%, providing that Lin line #ith the policy of the ban* to familiari(e
ban* employees #ith the various phases of ban* operations and further strengthen the e=isting
internal control system, all officers and employees are sub<ect to reshuffle of assignmentsM and
that thoseM affected branch employees are reshuffled to their ne# assignments #ithout changes
in their compensation and other benefitsM
On May %, $///, in an undated letter addressed to Daya, the Ban*Ks Board Chairman, petitioner
5lmer Mendo(a e=pressed his opinion on the reshuffle alleging that Ghis reshuffling is deemed
to be a demotion #ithout any legal basis and thus as*ing to be allo#ed to remain in his position
On May $&, $///, Daya replied reitirating that Lit #as never the intention +of the management- to
do#ngrade his position in the ban* considering that due compensation is maintained and no
future reduction #as intended 't #as further reiterated that the Lconduct of reshuffle is also a
prerogative of ban* managementG

On 9une 8, $///, petitioner submitted to the ban*'s "ayabas branch manager a letter in #hich
he applied for a leave of absence from #or*
On 9une .$, $///, petitioner again submitted a letter as*ing for another leave of absence for
t#enty days effective on the same date
On 9une .,, $///, #hile on his second leave of absence, petitioner filed a Complaint before
!rbitration Branch 7o 'E of the 7ational 4abor 3elations Commission +743C- "he Complaint --
for illegal dismissal, underpayment, separation pay and damages -- #as filed against the 3ural
Ban* of 4ucban and2or its president, !le<o B DayaD and its "ayabas branch manager, Briccio E
Cada "he case #as doc*eted as 743C Case )3!B-'E-1-:01.-//-J"he labor arbiter's 9une
$,, .&&& Decision upheld petitioner's claims
On appeal, the 743C reversed the labor arbiter 'n its 9uly $0, .&&$ 3esolution !fter the 743C
denied his Motion for 3econsideration, petitioner brought before the C! a Petition for Certiorari
assailing the foregoing 3esolution
Finding that no grave abuse of discretion could be attributed to the 743C, the C! Decision ruled
in favor of the private respondent rural ban*
+ss"e)
23
Whether or not the the petitioner #as constructively dismissed from employment and that the
reshuffling pursuant to Board 3es 7os //-:. and //-:% is a valid e=ercise of management
prerogative
Held)
"he Petition has no merit
Constructive dismissal is defined as an involuntary resignation resorted to #hen continued
employment is rendered impossible, unreasonable or unli*elyD #hen there is a demotion in ran*
or a diminution of payD or #hen a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee
9urisprudence recogni(es the e=ercise of management prerogatives For this reason, courts
often decline to interfere in legitimate business decisions of employers 'ndeed, labor la#s
discourage interference in employers' <udgments concerning the conduct of their business "he
la# must protect not only the #elfare of employees, but also the right of employers
'n the pursuit of its legitimate business interest, management has the prerogative to transfer or
assign employees from one office or area of operation to another -- provided there is no
demotion in ran* or diminution of salary, benefits, and other privilegesD and the action is not
motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
#ithout sufficient cause "his privilege is inherent in the right of employers to control and
manage their enterprise effectively "he right of employees to security of tenure does not give
them vested rights to their positions to the e=tent of depriving management of its prerogative to
change their assignments or to transfer them
Managerial prerogatives, ho#ever, are sub<ect to limitations provided by la#, collective
bargaining agreements, and general principles of fair play and <ustice
*ecision)
W;535FO35, this Petition is D57'5D, and the 9une $,, .&&. Decision and the )eptember .:,
.&&. 3esolution of the Court of !ppeals are !FF'3M5D Costs against petitioner )O
O3D535D
#avide, Jr., C.J., .C,air!an/, *nares-(antiago, Car"io, and Azcuna, JJ., concur.
24
Gel/art +nd"stries 8hils.$ +nc. vs. NLRC
G.R. No. 8:>>8 ("-"st %$ %989
,+RS2 *+3+S+4N) G(NC(AC4$ !.)
,acts)
Private respondent Feli= Francis started #or*ing as an auto-mechanic for petitioner @elmart
'ndustries Phils, 'nc +@54M!3"- sometime in $/8$ !s such, his #or* consisted of the repair
of engines and underchassis, as #ell as trouble shooting and overhauling of company vehicles
;e is li*e#ise entrusted #ith some tools and spare parts in furtherance of the #or* assigned to
him
On !pril $$, $/08, private respondent #as caught by the security guards ta*ing out of
@54M!3"'s premises one +$- plastic container filled #ith about $1 ounces of Gused' motor oil,
#ithout the necessary gate pass to cover the same as re?uired under @54M!3"'s rules and
regulations #hich provides that theft and2or pilferage of company property merits an outright
termination from employment By reason thereof, petitioner #as placed under preventive
suspension pending investigation for violation of company rules and regulations on !pril $%,
$/08
!fter due investigation, or on May .&, $/08, private respondent #as found guilty of theft of
company property !s a conse?uence, his services #ere severed
"hereafter, private respondent filed a complaint for illegal dismissal before the 743C 'n a
decision dated February .1, $/00, 4abor !rbiter Ceferina 9 Diosana ruled that private
respondent #as illegally dismissed and, accordingly, ordered the latter's reinstatement #ith full
bac*#ages from !pril $%, $/08 up to the time of actual reinstatement
From this decision, @54M!3" interposed an appeal #ith the 743C 'n its decision dated
October .$, $/00, the 743C affirmed #ith modification the ruling of 4abor !rbiter Diosana
On December $., $/00, @54M!3" filed before this Court a special civil action for certiorari #ith
a prayer for the issuance of a temporary restraining order
On 9anuary $0, $/0/, this Court, #ithout necessarily giving due course to the petition, issued a
temporary restraining order en<oining respondents from enforcing the assailed decision
+ss"e)
Whether or not the 743C committed a grave abuse of discretion for rendering a decision that is
contrary to la# and e=isting <urisprudence in ordering the reinstatement of private respondent to
his former position #ith payment of bac*#ages
Held)
We find no merit in this petition
25
Consistent #ith the policy of the )tate to bridge the gap bet#een the underprivileged
#or*ingmen and the more affluent employers, the 743C rightfully tilted the balance in favor of
the #or*ingmen H and this #as done #ithout being blind to the concomitant right of the
employer to the protection of his property
On the other hand, #ithout being too harsh to the employer, and naively liberal to labor, on the
other, the 743C correctly pointed out that private respondent cannot totally escape liability for
#hat is patently a violation of company rules and regulations
"o reiterate, be it of big or small commercial value, intended to be re-used or altogether
disposed of or #asted, the GusedG motor oil still remains, in legal contemplation, the property of
@54M!3" !s such, to ta*e the same out of @54M!3"'s premises #ithout the corresponding
gate pass is a violation of the company rule on theft and2or pilferage of company property
'n this score, it is very difficult for this Court to discern grave abuse of discretion on the part of
the 743C in modifying the appealed decision "he suspension imposed upon private
respondent is a sufficient penalty for the misdemeanor committed
Considering that private respondent herein has no previous derogatory record in his fifteen +$:-
years of service #ith petitioner @54M!3" the value of the property pilfered +$1 ounces of used
motor oil- is very minimal, plus the fact that petitioner failed to reasonably establish that non-
dismissal of private respondent #ould #or* undue pre<udice to the viability of their operation or
is patently inimical to the company's interest, it is more in consonance #ith the policy of the
)tate, as embodied in the Constitution, to resolve all doubts in favor of labor
"hus, the penalty of preventive suspension #as sufficient punishment for the violation under the
circumstance and that complainant-appelleeKs dismissal un#arranted
*ecision)
W;535FO35, in vie# of the foregoing, the petition is D')M'))5D for lac* of merit "he,
restraining order issued by this Court on 9anuary $0, $/0/ en<oining the enforcement of the
?uestioned decision of the 7ational 4abor 3elations Commission is hereby lifted 7o
pronouncement as to costs )O O3D535D
Narvasa, Cruz, Gri0o-Aquino and-in 'edialdea, JJ., concur.
26
La-atic vs. NLRC
G.R. No. %1%0 !an"ary 18$ %998
2H+R* *+3+S+4N) R4M&R4$ !.)
,acts)
Petitioner 3omeo 4agatic #as employed in May $/01 by Cityland !s a mar*eting specialist, he
#as tas*ed #ith soliciting sales for the company, #ith the corresponding duties of accepting call-
ins, referrals, and ma*ing client calls and cold calls +the practice of prospecting for clients
through the telephone directory- Cityland, believing that the same is an effective and cost-
efficient method of finding clients, re?uires all its mar*eting specialists to ma*e cold calls but
nonetheless re?uires submission of daily progress reports on the same in order to assess to
determine the results thereof
On 7ovember $//., petitioner #as suspended for three days for failing to submit cold call
reports on various dates of )eptember and October $//. not#ithstanding a #ritten reprimand
for infraction of the same committed a year earlier and a #arning that further non-compliance
#ould result to termination
7ot#ithstanding the aforesaid suspension and #arning, petitioner again failed to submit cold call
reports for five +:- days of February $//% ;e #as verbally reminded to submit the same and
#as even given up to February $8, $//% to do so 'nstead of complying #ith said directive,
Petitioner, on February $1, $//%, #rote a note, "O ;544 W'"; CO4D C!44)Q W;O C!35)R
and e=hibited the same to his co-employees "o #orsen matters, he left the same lying on his
des* #here everyone could see it
On February .%, $//%, petitioner received a memorandum re?uiring him to e=plain #hy Cityland
should not ma*e good its previous #arning for his failure to submit cold call reports, as #ell as
for issuing the #ritten statement aforementioned On February .,, $//%, he sent a letter-reply
alleging that his failure to submit cold call reports should not be deemed as gross
insubordination ;e denied any *no#ledge of the damaging statement, "O ;544 W'"; CO4D
C!44)Q
Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him
on February .1, $//% !ggrieved by such dismissal, petitioner filed a complaint against Cityland
for illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages and
attorneys fees "he labor arbiter dismissed the petition for lac* of merit On appeal, the same
#as affirmed by the 743CD hence the present recourse
+ss"e)
Whether or not the respondent 743C gravely abused its discretion in not finding the petitioner
illegally dismissed
Held)
"he petition lac*s merit
27
"o constitute a valid dismissal from employment, t#o re?uisites must be met, namelyC +$- the
employee must be afforded due process, and +.- the dismissal must be for a valid cause
Petitioner loses sight of the fact that e=cept as provided for, or limited by, special la#s, an
employer is free to regulate, according to his discretion and <udgment, all aspects of
employment 5mployers may, thus, ma*e reasonable rules and regulations for the government
of their employees, and #hen employees, #ith *no#ledge of an established rule, enter the
service, the rule becomes a part of the contract of employment 't is also generally recogni(ed
that company policies and regulations, unless sho#n to be grossly oppressive or contrary to
la#, are generally valid and binding on the parties and must be complied #ith
Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the company business !n employer cannot rationally be
e=pected to retain the employment of a person #hose = = = lac* of regard for his employers
rules = = = has so plainly and completely been bared Petitioners continued infraction of
company policy re?uiring cold call reports, as evidenced by the .0 instances of non-submission
of aforesaid reports, <ustifies his dismissal ;e cannot be allo#ed to arrogate unto himself the
privilege of setting company policy on the effectivity of solicitation methods "o do so #ould be
to sanction oppression and the self-destruction of the employer
More than that, his #ritten statement sho#s his open defiance and disobedience to la#ful rules
and regulations of the company 4i*e#ise, said company policy of re?uiring cold calls and the
concomitant reports thereon is clearly reasonable and la#ful, sufficiently *no#n to petitioner,
and in connection #ith the duties #hich he had been engaged to discharge "here is, thus, <ust
cause for his dismissal
*ecision)
W;535FO35, premises considered, the assailed 3esolution is !FF'3M5D and this petition is
hereby D')M'))5D for lac* of merit Costs against petitioner )O O3D535D
Narvasa, C.J., .C,air!an/, 'elo, Francisco, and Pangani1an, JJ., concur.
28
China 'an@in- Corp.$ vs. 'orro/eo
G.R. No. %:>:%: 4ctober %9$ 10
S&C4N* *+3+S+4N) C(LL&!4$ SR.$ !.)
,acts)
3espondent Mariano M Borromeo <oined the petitioner Ban* on 9une $, $/0/ as Manager
4evel $ assigned at the latterKs 3egional Office in Cebu City )ubse?uently, the respondent #as
laterally transferred to Cagayan de Oro City as Branch Manager of the petitioner Ban*Ks branch
thereat
For the years $/0/-$//: he #as promoted from Manager 4evel ' to )enior Manager 4evel ''
having consistently received a Ghighly satisfactoryG performance rating +$/0/-$//&- and a Gvery
goodG performance rating +$//$-$//:- Finally, in $//1, #ith a Ghighly satisfactoryG performance
rating, the respondent #as promoted to the position of !ssistant Eice-President, Branch
Ban*ing @roup for the Mindanao area effective October $1, $//1
;o#ever, prior to his last promotion and then un*no#n to the petitioner Ban*, the respondent,
#ithout authority from the 5=ecutive Committee or Board of Directors, approved several
D!>D2BP +Dra#n !gainst >ncollected Deposits2Bills Purchased- accommodations amounting
to P.,,,$,%8: in favor of certain 9oel Mani#an )uch chec*s, #hich are not sufficiently funded
by cash, are generally not honored by ban*s Further, such accommodations may be granted
only by a ban* officer upon e=press authority from its 5=ecutive Committee or Board of
Directors
>pon *no#ing of this by the ban* authorities, )amuel 4 Chiong, First Eice-President and ;ead-
Eisayas Mindanao Division of the petitioner ban* issued a memorandum see*ing clarification on
issues relative thereto 'n reply, the respondent ans#ered the ?ueries but nonetheless,
accepted full responsibility for committing an error in <udgment, lapses in control and abuse of
discretion ;o#ever, respondent vehemently denied benefiting therefrom !pology #as
accorded by the respondent in relation to this and subse?uently tendered his irrevocable
resignation effective May %$, $//8
;is acts having constituted a violation of the Ban*Ks Code of 5thics, respondent #as directed to
restitute the amount of P$,:&8,8%18/ representing /&S of the total loss of P$,18:,.1%$&
incurred by the petitioner Ban* ;o#ever, in vie# of his resignation and considering the years of
service in the petitioner Ban*, the management earmar*ed only P0%1,1%8&0 from the
respondentKs total separation benefits or pay "he said amount #ould be released upon
recovery of the sums demanded from Mani#an in a civil case
Conse?uently, the respondent, through counsel, made a demand on the petitioner Ban* for the
payment of his separation pay and other benefits but the petitioner Ban* maintained its position
to #ithhold the sum earmar*ed "hus, the respondent filed #ith the 7ational 4abor 3elations
Commission +743C-, the complaint for payment of separation pay, mid-year bonus, profit share
and damages against the petitioner Ban* "he 4abor !rbiter ruled in favor of the ban*
3espondent appealed to the 743C but it affirmed in toto the findings of the 4abor !rbiter
;o#ever, the C! upon petition set aside the 743C decision and alleged that repondent #as
denied his rights to due process ;ence, this petition
29
+ss"e)
Whether the ban* has the prerogative2right to impose the #ithholding of respondentKs benefits
as #hat it considered the appropriate penalty under the circumstances pursuant to its company
rules and regulations
Held)
"he petition is meritorious "he petitioner Ban* #as left #ith no other recourse but to impose the
ancillary penalty of restitution in vie# of his voluntary separation from the petitioner Ban* 't #as
certainly #ithin the petitioner Ban*Ks prerogative to impose on the respondent #hat it considered
the appropriate penalty under the circumstances pursuant to its company rules and regulations
't is #ell recogni(ed that company policies and regulations are, unless sho#n to be grossly
oppressive or contrary to la#, generally binding and valid on the parties and must be complied
#ith until finally revised or amended unilaterally or preferably through negotiation or by
competent authority Moreover, management has the prerogative to discipline its employees and
to impose appropriate penalties on erring #or*ers pursuant to company rules and regulations
"he petitioner Ban*Ks business is essentially imbued #ith public interest and o#es great fidelity
to the public it deals #ith

't is e=pected to e=ercise the highest degree of diligence in the
selection and supervision of their employees

!s a corollary, and li*e all other business
enterprises, its prerogative to discipline its employees and to impose appropriate penalties on
erring #or*ers pursuant to company rules and regulations must be respected "he la#, in
protecting the rights of labor, authori(ed neither oppression nor self-destruction of an employer
company #hich itself is possessed of rights that must be entitled to recognition and respect
)ignificantly, the respondent ids not #holly deprived of his separation benefits but #ere merely
#ithheld and #ill be released #ithout delay as soon as the ban* has satisfied a <udgment in the
civil case
*ecision)
W;535FO35, the petition is @3!7"5D "he Decision dated 9uly $/, .&&. of the Court of
!ppeals and its 3esolution dated 9anuary 1, .&&% in C!-@3 )P 7o :8%1: are 35E53)5D
!7D )5" !)'D5 "he 3esolution dated October .&, $/// of the 743C, affirming the Decision
dated February .1, $/// of the 4abor !rbiter, is 35'7)"!"5D )O O3D535D
Puno, Austria-'artinez, +inga, and C,ico-Nazario
2
, JJ., concur.
(ssociated .atch/en and Sec"rity 5nion 682.47 vs. Lantin-
30
G.R. No. L9%0%1 ,ebr"ary 19$ %9>
&N '(NC) L('R(*4R$ !.)
,acts)
"hree agencies +I "agle )hip Watchmen !gency, City Watchmen and )ecurity !gency and
3epublic )hips )ecurity !gency- #ere employed by certain shipping agencies in the City of
Manila and private respondent Macondray and Company 'nc, in guarding ships or vessels
arriving at the port of Manila and in discharging cargo on its piers "hirty-eight affiliates of the
3epublic )hips )ecurity !gency belong to the petitioner labor union
On or about February $0, $/:1, petitioner union and its members declared a stri*e against $/
shipping firms in the City of Manila !ttempts #ere made by the Court of 'ndustrial 3elations to
settle the stri*e
On !pril 1, $/:1, a petition #as filed before the Court of 'ndustrial 3elations as*ing for
reinstatement of ,8 stri*ers #ho belong to the petitioner !ssociated Watchmen and )ecurity
>nion +P"WO-
"he manager of respondent Macondray and Company, 'nc e=pressed #illingness to employ the
stri*ers belonging to the petitioner union under the condition that the agency to #hich they
belong file a bond in the sum of P:,&&& in favor of Macondray and Company, 'nc to respond for
any negligence, misfeasance or malfeasance of any of the #atchmen of petitioner "his
re?uirement of filing a bond #as also demanded of the other t#o security agencies, the I "agle
)hip Watchmen !gency and the City Watchmen and )ecurity !gency ;o#ever, the 3epublic
)hips )ecurity !gency, to #hich most of the members of the petitioner union belonged, failed to
comply #ith the demands of Macondray and Company, 'nc that they furnish such a bond
Because of the failure of the 3epublic )hips )ecurity !gency to furnish a bond, Macondray and
Company, 'nc refused to employ #atchmen from the said agency )ome of the members of the
agency transferred to the other t#o agencies that had furnished a bond and after having <oined
the said agencies they #ere employed as #atchmen by the respondent Macondray and
Company, 'nc
On 7ovember $:, $/:1, Macondray and Company, 'nc #as charged #ith unfair labor practice
Macondray and Company, 'nc ans#ered the complaint
"he <udge of the Court of 'ndustrial held that defendant-respondent is guilty of unfair labor
practice in vie# of the circumstances of the case and ordered the members of the union to be
reinstated #ith full bac* #ages from February $0, $/:1 up to their actual reinstatement and
prohibited the respondent from committing further acts of unfair labor practice "he respondent
appealed this decision to the court in banc On the appeal, three of the <udges of the court,
9udges 4anting, Martine( and "abigne, voted to reverse the decision of the trial <udge and to
dismiss the petition for lac* of merit "he other t#o <udges voted for the affirmance of the
decision
+ss"e)
31
Whether or not Macondray and Co Committed unfair labor practice for having dismissed and
refused to employ %0 members of the petitioner in relation to the failure of the 3epublic )hips
)ecurity !gency to furnish a bond re?uired by herein respondent
Held)
On the #hole, therefore, #e find that the ma<ority decision is fully supported by the evidence and
by the documents and papers on the record, insofar as it declares that respondent has not been
guilty of unfair labor practice
"he refusal of the respondent to employ guards affiliated #ith a security or #atchmen agency
that does not furnish bond can not constitute an unfair labor practice )uch refusal is merely the
e=ercise of respondent's legitimate right to protect its o#n interests, especially as the members
of the petitioner had abandoned a ship they #ere guarding #ithout previous notice and e=posed
the ship losses due to theft and pilferage 't is to be noted that the re?uirement of filing of a bond
#as not demanded from any of the labor unions, or from the petitioner union herein We cannot
conclude that because the respondent company refused to employ the guards affiliated #ith the
3epublic )hips )ecurity !gency, #hich affiliates are members of the petitioner union,
respondent committed an unfair labor practice or a discrimination against petitioner union
*ecision)
Wherefore, #e find no sufficient reasons for disturbing the findings of the ma<ority of the <udges
of the court belo# to the effect that the acts of the respondent Macondray and Company, 'nc do
not constitute an unfair labor practice, and #e, therefore, affirm the decision of the said ma<ority,
#ith costs against the petitioner herein
Bengzon, 'onte!ayor, Bautista Angelo, Conce"cion, J.B.&. Reyes, 3ndencia, and Gutierrez
#avid, JJ., Concur.
32
8a/pan-a '"s Co/pany$ +NC.$ vs. 8(M'5SC4 &/ployeesB 5nion$ +nc.
G.R. No. 0>7#9 Septe/ber 1#$ %9#9
&N '(NC) M4R(N$ !.)
,acts)
On May %$, $/%/, the Court of 'ndustrial 3elations issued an order, directing the petitioner
herein, Pampanga Bus Company, 'nc, to recruit from the respondent, Pambusco 5mployees'
>nion, 'nc, ne# employees or laborers it may need to replace members of the union #ho may
be dismissed from the service of the company, #ith the proviso that, if the union fails to provide
employees possessing the necessary ?ualifications, the company may employ any other
persons it may desire "his order, in substance and in effect, compels the company, against its
#ill, to employ preferentially, in its service, the members of the union
+ss"e)
Whether or not the said order issued by the C'3 valid and not violative of the right of the
employer to select employees
Held)
We hold that the court has no authority to issue such compulsory order
"he general right to ma*e a contract in relation to one's business is an essential part of the
liberty of the citi(ens protected by the due-process clause of the Constitution "he right of the
laborer to sell his labor to such person as he may choose is, in its essence, the same as the
right of an employer to purchase labor from any person #hom it chooses "he employer and the
employee have thus an e?uality of right guaranteed by the Constitution
)ection of Common#ealth !ct 7o .$% confers upon labor organi(ations the right Gto collective
bargaining #ith employers for the purpose of see*ing better #or*ing and living conditions, fair
#ages, and shorter #or*ing hours for laborers, and, in general, to promote the material, social
and moral #ell-being of their membersG "his provision in granting to labor unions merely the
right of collective bargaining, impliedly recogni(es the employer's liberty to enter or not into
collective agreements #ith them 'ndeed, #e *no# of no provision of the la# compelling such
agreements )uch a fundamental curtailment of freedom, if ever intended by la# upon grounds
of public policy, should be effected in a manner that is beyond all possibility of doubt "he
supreme mandates of the Constitution should not be loosely brushed aside !s held by the
)upreme Court of the >nited )tates in ;itchman Coal P Co vs Mitchell +.,: > ), ../D 1.
4a# ed, .1&, .81-C
*ecision)
"hus considered, the order appealed from is hereby reversed, #ith costs against the respondent
Pambusco 5mployees' >nion, 'nc
33
8a/pan-a '"s Co/pany$ +NC.$ vs. 8(M'5SC4 &/ployeesB 5nion$ +nc.
G.R. No. 0>7#9 Septe/ber 1#$ %9#9
&N '(NC) M4R(N$ !.)
,acts)
On May %$, $/%/, the Court of 'ndustrial 3elations issued an order, directing the petitioner
herein, Pampanga Bus Company, 'nc, to recruit from the respondent, Pambusco 5mployees'
>nion, 'nc, ne# employees or laborers it may need to replace members of the union #ho may
be dismissed from the service of the company, #ith the proviso that, if the union fails to provide
employees possessing the necessary ?ualifications, the company may employ any other
persons it may desire "his order, in substance and in effect, compels the company, against its
#ill, to employ preferentially, in its service, the members of the union
+ss"e)
Whether or not the said order issued by the C'3 valid and not violative of the right of the
employer to select employees
Held)
We hold that the court has no authority to issue such compulsory order
"he general right to ma*e a contract in relation to one's business is an essential part of the
liberty of the citi(ens protected by the due-process clause of the Constitution "he right of the
laborer to sell his labor to such person as he may choose is, in its essence, the same as the
right of an employer to purchase labor from any person #hom it chooses "he employer and the
employee have thus an e?uality of right guaranteed by the Constitution
)ection of Common#ealth !ct 7o .$% confers upon labor organi(ations the right Gto collective
bargaining #ith employers for the purpose of see*ing better #or*ing and living conditions, fair
#ages, and shorter #or*ing hours for laborers, and, in general, to promote the material, social
and moral #ell-being of their membersG "his provision in granting to labor unions merely the
right of collective bargaining, impliedly recogni(es the employer's liberty to enter or not into
collective agreements #ith them 'ndeed, #e *no# of no provision of the la# compelling such
agreements )uch a fundamental curtailment of freedom, if ever intended by la# upon grounds
of public policy, should be effected in a manner that is beyond all possibility of doubt "he
supreme mandates of the Constitution should not be loosely brushed aside !s held by the
)upreme Court of the >nited )tates in ;itchman Coal P Co vs Mitchell +.,: > ), ../D 1.
4a# ed, .1&, .81-C
*ecision)
"hus considered, the order appealed from is hereby reversed, #ith costs against the respondent
Pambusco 5mployees' >nion, 'nc
34
8eople v 8anis
%01 SCR( >>0 %98>
,acts)Four informations #ere filed on 9anuary /, $/0$, in the Court of First 'nstance of
Tambales and Olongapo City alleging that )erapio!bug, private respondent herein, G#ithout
first securing a license from the Ministry of 4abor as a holder of authority to operate a fee-
charging employment agency, did then and there #ilfully, unla#fully and criminally operate a
private fee-charging employment agency by charging fees and e=penses +from- and promising
employment in )audi !rabiaG to four separate individuals named therein, in violation of !rticle $1
in relation to !rticle %/ of the 4abor Code
!bug filed a motion to ?uash on the ground that the informations did not charge an offense
because he #as accused of illegally recruiting only one person in each of the four informations
>nder the proviso in !rticle $%+b-, he claimed, there #ould be illegal recruitment only G#henever
t#o or more persons are in any manner promised or offered any employment for a feeG
"he posture of the petitioner is that the private respondent is being prosecuted under !rticle %/
in relation to !rticle $1 of the 4abor CodeD hence, !rticle $%+b- is not applicable ;o#ever, as the
first t#o cited articles penali(e acts of recruitment and placement #ithout proper authority, #hich
is the charge embodied in the informations, application of the definition of recruitment and
placement in !rticle $%+b- is unavoidable
+ss"e)Whether or not the petitioner is guilty of violating !rticle $%+b- of P D ,,., other#ise
*no#n as the 4abor Code
Held)!rticle $%+b- of P D ,,., other#ise *no#n as the 4abor Code, states that, G+b-
'3ecruitment and placement' refers to any act of canvassing, 'enlisting, contracting, transporting,
hiring, or procuring #or*ers, and includes referrals, contract services, promising or advertising
for employment, locally or abroad, #hether for profit or notC Provided, "hat any person or entity
#hich, in any manner, offers or promises for a fee employment to t#o or more persons shall be
deemed engaged in recruitment and placementG
!s #e see it, the proviso #as intended neither to impose a condition on the basic rule nor to
provide an e=ception thereto but merely to create a presumption "he presumption is that the
individual or entity is engaged in recruitment and placement #henever he or it is dealing #ith
t#o or more persons to #hom, in consideration of a fee, an offer or promise of employment is
made in the course of the Gcanvassing, enlisting, contracting, transporting, utili(ing, hiring or
procuring +of- #or*ersG
!t any rate, the interpretation here adopted should give more force to the campaign against
illegal recruitment and placement, #hich has victimi(ed many Filipino #or*ers see*ing a better
life in a foreign land, and investing hard-earned savings or even borro#ed funds in pursuit of
their dream, only to be a#a*ened to the reality of a cynical deception at the hands of their o#n
countrymen
35
8eople vs Goce
GR No %%#%>% ("-"st 19$ %99:
8arties)
8&48L& 4, 2H& 8H+L+88+N&S$ plaintiff9appellee$
vs.
L4M( G4C& y 4L(L+($ *(N G4C& and N&LLA *. (G5S2+N$ acc"sed. N&LLA *.
(G5S2+N$acc"sed9appellant.

3egalado, 9
FactsC
On 9anuary $., $/00, an information for illegal recruitment committed by a syndicate
and in large scale, punishable under !rticles %0 and %/ of the 4abor Code as amended by
)ection $+b- of Presidential Decree 7o .&$0, #as filed against spouses Dan and 4oma @oce
and herein accused-appellant 7elly !gustin in the 3egional "rial Court of Manila, Branch :
On 9anuary .$, $/08, a #arrant of arrest #as issued against the three accused but not
one of them #as arrested ;ence, on February ., $/0/, the trial court ordered the case archived
but it issued a standing #arrant of arrest against the accused"hereafter, on learning of the
#hereabouts of the accused, at around midday of February .1, $//%, 7elly !gustin #as
apprehended by the ParaBa?ue police
On 7ovember $/, $//%, the trial court rendered <udgment finding herein appellant guilty as a
principal in the crime of illegal recruitment in large scale, and sentencing her to serve the
penalty of life imprisonment, as #ell as to pay a fine of P$&&,&&&&&
'n her appeal, appellant !gustin raises the follo#ing argumentsC
+$- her act of introducing complainants to the @oce couple does not fall #ithin the
meaning of illegal recruitment and placement under !rticle $%+b- in relation to !rticle %,
of the 4abor CodeD
+.- there is no proof of conspiracy to commit illegal recruitment among appellant and the
@oce spousesD and
+%- there is no proof that appellant offered or promised overseas employment to the
complainants
!ppellant counsel agreed to stipulate that she #as neither licensed nor authori(ed to
recruit applicants for overseas employment !ppellant, ho#ever, denies that she #as in any #ay
guilty of illegal recruitment
't is appellant's defensive theory that all she did #as to introduce complainants to the
@oce spouses Being a neighbor of said couple, and o#ing to the fact that her son's overseas
<ob application #as processed and facilitated by them, the complainants as*ed her to introduce
them to said spouses !llegedly out of the goodness of her heart, she complied #ith their
re?uest
'ssuesC
Whether or not appellant !gustin actions in relation #ith the @oce couple constitute illegal
recruitment
;eldC
!ppellant is accused of violating !rticles %0 and %/ of the 4abor Code !rticle %0 of the 4abor
Code, as amended by Presidential Decree 7o .&$0, provides that any recruitment activity,
36
including the prohibited practices enumerated in !rticle %, of said Code, underta*en by non-
licensees or non-holders of authority shall be deemed illegal and punishable under !rticle %/
thereof "he same article further provides that illegal recruitment shall be considered an offense
involving economic sabotage if any of these ?ualifying circumstances e=ist, namely,
+a- #hen illegal recruitment is committed by a syndicate,ie, if it is carried out by a group
of three or more persons conspiring and2or confederating #ith one anotherD or
+b- #hen illegal recruitment is committed in large scale, ie, if it is committed against
three or more persons individually or as a group
3ecruitment and placement refers to any act of canvassing, enlisting, contracting, transporting,
utili(ing, hiring or procuring #or*ers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, #hether for profit or notD provided, that any
person or entity #hich, in any manner, offers or promises for a fee employment to t#o or more
persons shall be deemed engaged in recruitment and placement On the other hand, referral is
the act of passing along or for#arding of an applicant for employment after an initial intervie# of
a selected applicant for employment to a selected employer, placement officer or bureau
"here is illegal recruitment #hen one gives the impression of having the ability to send a #or*er
abroadG 't is undisputed that appellant gave complainants the distinct impression that she had
the po#er or ability to send people abroad for #or* such that the latter #ere convinced to give
her the money she demanded in order to be so employed
DecisionC
W;535FO35, the appealed <udgment of the court a ?uo is hereby !FF'3M5D in toto, #ith
costs against accused-appellant 7elly D !gustin
37
*arvin vs. C( and 8eople of the 8hilippines
G.R. No. %1:00$ !"ly %#$ %998
,(C2S)
Maria "oledo convinced by the petitioner that she has the authority to recruit #or*ers for
abroad and that she can facilitate the necessary papers, gave Darvin Php$:&,&&& for airfare
and >) visa ;o#ever, she #as not given a #or* permit to validly #or* in the >)
+ss"e)
Whether or not the petitioner is guilty of illegal recruitmentR
Held)
"here is lac* of evidence that accused offered "oledo a <ob Procuring of an airfare tic*et
and a >) visa does not ?ualify illegal recruitment
38
&astern Shippin- Lines vs. 84&( G.R. No. 7>>##$ 4ct. %8$ %988
,acts) Eitaliano )aco #as Chief Officer of the M2E 5astern Polaris #hen he #as *illed in an
accident in "o*yo, 9apan, March $:, $/0: ;is #ido# sued for damages under 5=ecutive Order
7o 8/8 and Memorandum Circular 7o . of the PO5! "he petitioner, as o#ner of the vessel,
argued that the complaint #as cogni(able not by the PO5! but by the )ocial )ecurity )ystem
and should have been filed against the )tate 'nsurance Fund "he PO5! nevertheless assumed
<urisdiction and after considering the position papers of the parties ruled in favor of the
complainant "he a#ard consisted of P$0&,&&&&& as death benefits and P$.,&&&&& for burial
e=penses
"he petitioner immediately came to this Court, prompting the )olicitor @eneral to move for
dismissal on the ground of non-e=haustion of administrative remedies
+ss"e) 's )aco an overseas #or*er or a domestic employeeR
*ecision) We see no reason to disturb the factual finding of the PO5! that Eitaliano )aco #as
an overseas employee of the petitioner at the time he met #ith the fatal accident in 9apan in
$/0:
>nder the $/0: 3ules and 3egulations on Overseas 5mployment, overseas employment is
defined as Gemployment of a #or*er outside the Philippines, including employment on board
vessels plying international #aters, covered by a valid contract ! contract #or*er is described
as Gany person #or*ing or #ho has #or*ed overseas under a valid employment contract and
shall include seamenG or Gany person #or*ing overseas or #ho has been employed by another
#hich may be a local employer, foreign employer, principal or partner under a valid employment
contract and shall include seamenG "hese definitions clearly apply to Eitaliano )aco for it is not
disputed that he died #hile under a contract of employment #ith the petitioner and alongside the
petitioner's vessel, the M2E 5astern Polaris, #hile berthed in a foreign country
't is #orth observing that the petitioner performed at least t#o acts #hich constitute implied or
tacit recognition of the nature of )aco's employment at the time of his death in $/0: "he first is
its submission of its shipping articles to the PO5! for processing, formali(ation and approval in
the e=ercise of its regulatory po#er over overseas employment under 5=ecutive Order 7O 8/8
"he second is its payment of the contributions mandated by la# and regulations to the Welfare
Fund for Overseas Wor*ers, #hich #as created by PD 7o $1/, Gfor the purpose of providing
social and #elfare services to Filipino overseas #or*ersG
W;535FO35, the petition is D')M'))5D, #ith costs against the petitioner "he temporary
restraining order dated December $&, $/01 is hereby 4'F"5D 't is so ordered
39
8H+LS( +N2&RN(2+4N(L 8L(C&M&N2 and S&R3+C&S C4R84R(2+4N$ E),
2H& H4N. S&CR&2(RA 4, L('4R (N* &M8L4AM&N2$ 3+3&NC+4 *& M&S($ R4*R+G4
M+C+N and C&*R+C L&AS4N
,(C2S)
Petitioner Philsa is a domestic corporation engaged in the recruitment of #or*ers for overseas
employment )ometime in 9anuary $/0:, private respondents, #ho #ere recruited by petitioner
for employment in )audi !rabia, #ere re?uired to pay placement fees in the amount of
P:,&&&&& for private respondent 3odrigo 4 Mi*in and P1,:&&&& each for private respondents
Eivencio ! de Mesa and Cedric P 4eyson
!fter the e=ecution of their respective #or* contracts, private respondents left for )audi !rabia
on 9anuary ./, $/0: "hey then began #or* for !l-;e<ailan Consultants !25, the foreign
principal of petitioner
While in )audi !rabia, private respondents #ere allegedly made to sign a second contract on
February ,, $/0: #hich changed some of the provisions of their original contract resulting in the
reduction of some of their benefits and privileges On !pril $, $/0:, their foreign employer
allegedly forced them to sign a third contract #hich increased their #or* hours from ,0 hours to
1& hours a #ee* #ithout any corresponding increase in their basic monthly salary When they
refused to sign this third contract, the services of private respondents #ere terminated by !l-
;e<ailan and they #ere repatriated to the Philippines
>pon their arrival in the Philippines, private respondents demanded from petitioner Philsa the
return of their placement fees and for the payment of their salaries for the une=pired portion of
their contract When petitioner refused, they filed a case before the PO5! against petitioner
Philsa and its foreign principal, !l-;e<ailan, #ith the follo#ing causes of actionC
$ 'llegal dismissalD
. Payment of salary differentialsD
% 'llegal deduction2#ithholding of salariesD
, 'llegal e=actions2refund of placement feesD and
: Contract substitution
)everal hearings #ere conducted before the PO5! ;earing Officer on the t#o aspects of
private respondents' complaint During these hearings, private respondents supported their
complaint #ith the presentation of both documentary and testimonial evidence When it #as its
turn to present its evidence, petitioner failed to do so and conse?uently, private respondents
filed a motion to decide the case on the basis of the evidence on record
'n line #ith this !ugust ./, $/00 Order, petitioner deposited the chec* e?uivalent to the claims of
private respondents and paid the corresponding fine under protest From the said Order,
petitioner filed a Motion for 3econsideration #hich #as subse?uently denied in an Order dated
October $&, $/0/
>nder the PO5! 3ules and 3egulations, the decision of the PO5! thru the 43O suspending or
canceling a license or authority to act as a recruitment agency may be appealed to the Ministry
+no# Department- of 4abor and 5mployment
$:
!ccordingly, after the denial of its motion for
reconsideration, petitioner appealed the !ugust .$, $/00 Order to the )ecretary of 4abor and
40
5mployment ;o#ever, in an Order dated )eptember $%, $//$,
$1
public respondent )ecretary of
4abor and 5mployment affirmed in toto the assailed Order Petitioner filed a Motion for
3econsideration but this #as li*e#ise denied in an Order dated 7ovember .:, $//$
+SS5&)
$ Whether or not petitioner charge private respondents placement fees in e=cess of that
allo#ed by la# andD
. Whether or not the public respondent committed grave abuse of discretion in holding
petitioner liable for illegal deductions2#ithholding of salaries considering that the
)upreme Court itself has already absolved petitioner from this charge
H&L*)
"o summari(e, petitioner should be absolved from the three +%- counts of illegal e=action as
PO5! !dministrative Circular 7o ., )eries of $/0% could not be the basis of administrative
sanctions against petitioner for lac* of publication ;o#ever, #e affirm the ruling of the PO5!
and the )ecretary of 4abor and 5mployment that petitioner should be held administratively liable
for t#o +.- counts of contract substitution and one +$- count of #ithholding or unla#ful deduction
of salary
>nder the applicable schedule of penalties imposed by the PO5!, the penalty for each count of
contract substitution is suspension of license for t#o +.- months or a fine of P$&,&&&&& #hile
the penalty for #ithholding or unla#ful deduction of salaries is suspension of license for t#o +.-
months or fine e?ual to the salary #ithheld but not less than P$&,&&&&& plus restitution of the
amount in both instances
%1
!pplying the said schedule on the instant case, the license of
petitioner should be suspended for si= +1- months or, in lieu thereof, it should be ordered to pay
fine in the amount of P%&,&&&&& Petitioner should li*e#ise pay the amount of )3$,&&&&& to
private respondent Eivencio ! de Mesa as restitution for the amount #ithheld from his salary
W;535FO35, premises considered, the )eptember $%, $//$ and 7ovember .:, $//$ Orders
of public respondent )ecretary of 4abor and 5mployment are hereby MOD'F'5D !s modified,
the license of private respondent Philsa 'nternational Placement and )ervices Corporation is
hereby suspended for si= +1- months or, in lieu thereof, it is hereby ordered to pay the amount of
P%&,&&&&& as fine Petitioner is li*e#ise ordered to pay the amount of )3$,&&&&& to private
respondent Eivencio ! d e Mesa !ll other monetary a#ards are deleted
41
*o"-las Millares and Ro-elio La-da
vs
National Labor Relations Co//ission$ 2rans9Global Mariti/e (-ency$ +nc. and &sso
+nternational Shippin- Co.$ L.td.
FactsC
Douglas Millares #as employed by 5))O 'nternational through its local manning
agency, "rans-@lobal, in $/10 as a machinist 'n $/8:, he #as promoted as Chief 5ngineer
#hich position he occupied until he opted to retire in $/0/
'n $/0/, petitioner Millares filed a leave of absence and applied for optional retirement
plan under the Consecutive 5nlistment 'ncentive Plan +C5'P- considering that he had already
rendered more than t#enty years of continuous service
5sso 'nternational denied MillaresK re?uest for optional retirement on the follo#ing
grounds, to #itC +$- he #as employed on a contractual basisD +.- his contract of enlistment
+CO5- did not provide for retirement before the age of si=ty yearsD and +%- he did not comply
#ith the re?uirement for claiming benefits under the C5'P, ie, to submit a #ritten advice to the
company of his intention to terminate his employment #ithin thirty days from his last
disembar*ation date
)ubse?uently, after failing to return to #or* after the e=piration of his leave of absence,
Millares #as dropped from the roster of cre# members effective )eptember $, $/0/
On the other hand, petitioner 4agda #as employed by 5sso 'nternational as #iper2oiler in
$/1/ ;e #as promoted as Chief 5ngineer in $/0&, a position he continued to occupy until his
last CO5 e=pired in $/0/
'n $/0/, 4agda li*e#ise filed a leave of absence and applied to avail of the optional early
retirement plan in vie# of his t#enty years continuous service in the company
"rans-global similarly denied 4agdaKs re?uest for availment of the optional early
retirement scheme on the same grounds upon #hich Millares re?uest #as denied
>nable to return for contractual sea service after his leave of absence e=pire, 4agda #as
also dropped from the roster of cre# members effective )eptember $, $/0/
Millares and 4agda filed a complaint-affidavit for illegal dismissal and non-payment
of employee benefits against private respondents 5sso 'nternational and "rans-@lobal before
the PO5!
"he PO5! rendered a decision dismissing the complaint for lac* of merit On appeal,
743C affirmed the decision of the PO5! dismissing the complaint
743C ratiocinated that Millares and 4agda, as seamen and overseas contract #or*ers
are not covered by the term Lregular employmentM as defined under !rticle .0& of the 4abor
Code "he PO5!, #hich is tas*ed #ith protecting the rights of the Filipino #or*ers for overseas
employment to fair and e?uitable recruitment and employment practices and to ensure their
42
#elfare, prescribes a standard employment contract for seamen on board ocean-going vessels
for a fi=ed period but in no case to e=ceed t#elve months
'ssueC
Whether or not seafarers are considered regular employees under !rticle .0& of the
4abor Code
3ulingC
"he court ruled that )eafarers are considered contractual employees "hey can not be
considered as regular employees under !rticle .0& of the 4abor Code "heir employment is
governed by the contracts they sign everytime they are rehired and their employment is
terminated #hen the contract e=pires "heir employment is contractually fi=ed for a certain
period of time "hey fall under the e=ception of !rticle .0& #hose employment has been fi=ed
for a specific pro<ect or underta*ing the completion or termination of #hich has been determined
at the time of engagement of the employee or #here the #or* or services to be performed is
seasonal in nature and the employment is for the duration of the season
43
2ierra +nternational Constr"ction Corporation vs NLRC$ 84&($ Man"el S. Cr"<$
Ray/"ndo G. Nepa and Rolando ,. Carino
!pril ., $//1 @3 7o $&$0.:, .:1 )C3! %1
Mendo(a, J.C
Facts
Private respondents Manuel Cru(, 3aymundo 7epa and 3olando Carino #ere recruited
by the petitioner "ierra 'nternational Construction to #or* as a transit mi=er, truc* driver and
batch plant operator Private respondents had barely started #or* in the foreign assignment
#hen they had a disagreement #ith the plant supervisor, 5ngr "errance Filby What e=actly they
had been ordered to do #hich they refused to e=ecute U #hether to dig and e=cavate canals
and to haul bags of cement, cement pipes, heavy plumbing e?uipments and large electric
cables, as they claimed, or only to do household chores consisting of *eeling the #or*place
clean, as the company alleges "he fact is that the private respondents refused to #or* as
ordered and for this, they #ere dismissed and sent bac* to the Philippines "he company
offered to pay the final fees representing their salaries but private respondents demanded as
#ell as the payment of their salaries corresponding to the balance of their employment
contracts Private respondents made their formal demand, claiming that, in violation of their
contract of employment, they had been re?uired to perform #or* not related to the <obs for
#hich they had been hired !s their demand #as denied, private respondents filed a complaint
for illegal dismissal #ith the PO5! "hey sought recovery of unpaid salaries and salaries
corresponding to the une=pired portion of their employment contracts Petitioners denied the
allegations of private respondents and claimed that the latterKs dismissal #as for a cause
Petitioners claimed that, private respondents #ere merely re?uested by the plant supervisor to
do house*eeping <ob since they #ere idle for the rest of the day
"he PO5! dismissed private respondentsK claim that they had been re?uired to do #or*
other than that for #hich they had been hired PO5! said no evidence had been presented to
support this allegation, but finding that private respondents had not been paid their salaries, it
order petitioners their salaries Private respondents appealed to the 743C and in its decision
found that the private respondents to have been illegally dismissed
'ssue
Whether private respondents #ere dismissed because they refuse to do #or* not
according to their <ob description, and #hether the 743C had <urisdiction over the case
;eld
"he private respondents are fully <ustified in refusing to do assignments not connected
#ith the nature of their engagements "he 743C had <urisdiction, therefore the basis for the
finding of the 743C that private respondents had been re?uired to dig canals, ma*e
e=cavations, and haul construction materials 't is not disputed that to ma*e them do this #ould
re?uire them to do #or* not connected to their employment as transit mi=er, truc* driver and
batch operator "hey #ere therefore fully <ustified in refusing to do the assignment
44
(N*R&S &. *+2(N$ petitioner$ vs. 8H+L+88+N& 43&RS&(S &M8L4AM&N2
(*M+N+S2R(2+4N (*M+N+S2R(24R$ N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$
(S+(.4RL* R&CR5+2M&N2$ +NC.$ (N*D4R +N2R(C4 S(L&S C4R84R(2+4N$
respondents.
G.R. No. 45678
#ece!1er 9, :558
,acts)
!ndres 5 Ditan #as recruited by private respondent 'ntraco )ales Corporation, through its local
agent, !sia World, the other private respondent, to #or* in !ngola as a #elding supervisor "he
contract #as for nine months, at a monthly salary of >)V$,$&&&& or >)V.8:&& #ee*ly, and
contained the re?uired standard stipulations for the protection of our overseas #or*ers
!rriving on 7ovember %&, $/0,, in 4uanda, capital of !ngola, the petitioner #as assigned as an
ordinary #elder in the '7"3!CO central maintenance shop from December . to .:, $/0, On
December .1, $/0,, he #as informed, to his distress that #ould be transferred to Iafunfo, some
%:& *ilometers east of 4uanda "his #as the place #here, earlier that year, the rebels had
attac*ed and *idnapped e=patriate #or*ers, *illing t#o Filipinos in the raid 7aturally, Ditan #as
reluctant to go ;o#ever, he #as assured by the '7"3!CO manager that Iafunfo #as safe and
ade?uately protected by government troopsD moreover H and this #as more persuasive H he
#as told he #ould be sent home if he refused the ne# assignment 'n the end, #ith much
misgiving, he relented and agreed
On December ./, $/0,, his fears #ere confirmed "he >nita rebels attac*ed the diamond
mining site #here Ditan #as #or*ing and too* him and si=teen other Filipino hostages, along
#ith other foreign #or*ers "he rebels and their captives #al*ed through <ungle terrain for %$
days to the >nita stronghold near the 7amibian border
"hey tre**ed for almost a thousand *ilometers "hey subsisted on meager fare )ome of them
had diarrhea "heir feet #ere blistered 't #as only on March $1, $/0:, that the hostages #ere
finally released after the intercession of their governments and the 'nternational 3ed Cross )i=
days later, Ditan and the other Filipino hostages #ere bac* in the Philippines
"he repatriated #or*ers had been assured by '7"3!CO that they #ould be given priority in re-
employment abroad, and eventually eleven of them #ere ta*en bac* Ditan having been
e=cluded, he filed in 9une $/0: a complaint against the private respondents for breach of
contract and various other claims )pecifically, he sought the amount of >)V,,18:&&,
representing his salaries for the une=pired $8 #ee*s of his contractD >)V.:,&&&&& as #ar ris*
bonusD >)V.,$/1:& as the value of his lost belongingsD >)V$,$&& for unpaid vacation leaveD
and moral and e=emplary damages in the sum of >)V:&,&&&&&, plus attorney's fees
!ll these claims #ere dismissed by PO5! !dministrator "omas D !chacoso in a decision dated
9anuary .8, $/08 . "his #as affirmed in toto by respondent 743C in a resolution dated 9uly $,,
$/08, % #hich is no# being challenged in this petition
+ss"e)
Whether or not Ditan is entitled to any relief and his case is under the <urisdiction of 743CR
Held)
45
Aes "he fact that stands out most prominently in the record is the ris* to #hich the petitioner
#as sub<ected #hen he #as assigned, after his reluctant consent, to the rebel-infested region of
Iafunfo "his #as a dangerous area
"he petitioner had gone to that foreign land in search of a better life that he could share #ith his
loved ones after his stint abroad "hat choice #ould have re?uired him to come home empty-
handed to the disappointment of an e=pectant family
't is not e=plained #hy the petitioner #as not paid for the une=pired portion of his contract #hich
had $8 more #ee*s to go "he hostages #ere immediately repatriated after their release,
presumably so they could recover from their ordeal "he promise of '7"3!CO #as that they
#ould be given priority in re-employment should their services be needed 'n the particular case
of the petitioner, the promise #as not fulfilled 't #ould seem that his #or* #as terminated, and
not again re?uired, because it #as really intended all along to assign him only to Iafunfo
"he private respondents stress that the contract Ditan entered into called for his employment in
!ngola, #ithout indication of any particular place of assignment in the country "his meant he
agreed to be assigned to #or* any#here in that country, including Iafunfo When '7"3!CO
assigned Ditan to that place in the regular course of its business, it #as merely e=ercising its
rights under the employment contract that Ditan had freely entered into ;ence, it is argued, he
cannot no# complain that there #as a breach of that contract for #hich he is entitled to
monetary redress
"he private respondents also re<ect the claim for #ar ris* bonus and point out that PO5!
Memorandum Circular 7o ,, issued pursuant to the mandatory #ar ris* coverage provision in
)ection ., 3ule E', of the PO5! 3ules and 3egulations on Overseas 5mployment, categori(ing
!ngola as a #ar ris* too* effect only on February 1, $/0:Gafter the petitioner's deployment to
!ngola on 7ovember .8, $/0,G Conse?uently, the stipulation could not be applied to the
petitioner as it #as not supposed to have a retroactive effect
"he paramount duty of this Court is to render <ustice through la# "he la# in this case allo#s
t#o opposite interpretations, one strictly in favor of the employers and the other liberally in favor
of the #or*er "he choice is obvious We find, considering the totality of the circumstances
attending this case, that the petitioner is entitled to relief "he petitioner #ent to !ngola prepared
to #or* as he had promised in accordance #ith the employment contract he had entered into in
good faith #ith the private respondents Over his ob<ection, he #as sent to a dangerous
assignment and as he feared #as ta*en hostage in a rebel attac* that prevented him from
fulfilling his contract #hile in captivity >pon his release, he #as immediately sent home and #as
not paid the salary corresponding to the une=pired portion of his contract ;e #as immediately
repatriated #ith the promise that he #ould be given priority in re-employment, #hich never
came "o rub salt on the #ound, many of his co-hostages #ere re-employed as promised "he
petitioner #as left only #ith a blea* e=perience and nothing to sho# for it e=cept dashed hopes
and a sense of re<ection
>nder the policy of social <ustice, the la# bends over bac*#ard to accommodate the interests of
the #or*ing class on the humane <ustification that those #ith less privileges in life should have
more privileges in la#
W;535FO35, the challenged resolution of the 743C is hereby MOD'F'5D "he private
respondents are hereby D'35C"5D <ointly and severally to pay the petitionerC a- the current
46
e?uivalent in Philippine pesos of >)V,,18:&&, representing his unpaid salaries for the balance
of the contract termD b- nominal damages in the amount of P.&,&&&&&D and c- $&S attorney's
fees 7o costs
)O O3D535D
47
3inta Mariti/e Co.$ +nc. vs. NLRC
6G.R. No. %%#9%% !an"ary 1#$ %9987
FactsC
On !pril .&, $/08, 4eonides C Basconcillo, herein private respondent, filed a complaint #ith the
Philippine Overseas 5mployment !dministration +PO5!- Wor*ers' !ssistance and !d<udication
Office for illegal dismissal against Einta Maritime Co, 'nc and 5l*ano )hip Management, 'nc,
herein petitioners 'n their ans#er, petitioners alleged that private respondent #as dismissed for
his gross negligence and incompetent performance as chief engineer of the M2E Boracay
March /, $//&, PO5! !dministrator "omas D !chacoso ruled that private respondent #as
illegally dismissed "he 743C affirmed the decision of the PO5!
'ssueC
Whether the Commission erred in affirming the decision of the PO5!
;eldC
>sing these legal criteria, #e hold that private respondent #as illegally dismissed 7o notice
#as ever given to him prior to his dismissal "his fact alone disproves petitioners' allegation that
Gprivate respondent #as given fair #arning and enough opportunity to e=plain his side
NregardingO the incidents that led to his dismissalG "hese re?uisites cannot be replaced as they
are not mere technicalities, but re?uirements of due process to #hich every employee is entitled
to ensure that the employer's prerogative to dismiss is not e=ercised arbitrarily
'llegally dismissed #or*ers are entitled to the payment of their salaries corresponding to the
une=pired portion of their employment #here the employment is for a definite period
Conformably, the administrator and the 3espondent Commission properly a#arded private
respondent salaries for the period beginning !pril /, $/08, the date of his illegal dismissal, until
February $0, $/00, the e=piration of his contract
W;535FO35, the petition is hereby D')M'))5D "he challenged Decision and 3esolution are
!FF'3M5D Costs against petitioners
)O O3D535D
48
M(RS(M(N M(NN+NG (G&NCA$ +NC. and *+(M(N2+*&S M(R+2+M&$ +NC.$ petitioners$
vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N and .+L,R&*4 2. C(!&R(S$
Respondents.
B544O)'44O, 9
M!3)!M!7 M!77'7@ !@57CA, '7C +M!3)!M!7- and its foreign principal D'!M!7"'D5)
M!3'"'M5, '7C +D'!M!7"'D5)- assail the Decision of public respondent 7ational 4abor
3elations Commission dated $1 )eptember $//1 as #ell as its 3esolution dated $. 7ovember
$//1 affirming the 4abor !rbiter's decision finding them guilty of illegal dismissal and ordering
them to pay respondent Wilfredo " Ca<eras salaries corresponding to the une=pired portion of
his employment contract, plus attorney's fees
Private respondent Wilfredo " Ca<eras #as hired by petitioner M!3)!M!7, the local manning
agent of petitioner D'!M!7"'D5), as Chief Coo* )te#ard on the ME Prigipos, o#ned and
operated by D'!M!7"'D5), for a contract period of ten +$&- months #ith a monthly salary of
>)V1&&&&, evidenced by a contract bet#een the parties dated $: 9une $//: Ca<eras started
#or* on 0 !ugust $//: but less than t#o +.- months later, or on .0 )eptember $//:, he #as
repatriated to the Philippines allegedly by mutual consent
On $8 7ovember $//: private respondent Ca<eras filed a complaint for illegal dismissal against
petitioners #ith the 743C 7ational Capital 3egion !rbitration Branch alleging that he #as
dismissed illegally, denying that his repatriation #as by mutual consent, and as*ing for his
unpaid #ages, overtime pay, damages, and attorneys feesN$O Ca<eras alleged that he #as
assigned not only as Chief Coo* )te#ard but also as assistant coo* and messman in addition to
performing various inventory and re?uisition <obs Because of his additional assignments he
began to feel sic* <ust a little over a month on the <ob constraining him to re?uest for medical
attention ;e #as refused at first by Capt Iouva*as !le*os, master of the ME Prigipos, #ho <ust
ordered him to continue #or*ing ;o#ever a day after the ships arrival at the port of 3otterdam,
;olland, on .1 )eptember $//: Capt !le*os relented and had him e=amined at the Medical
Center for )eamen ;o#ever, the e=amining physician, Dr Wden ;oed, neither apprised private
respondent about the diagnosis nor issued the re?uested medical certificate allegedly because
he himself #ould for#ard the results to private respondents superiors >pon returning to the
vessel, private respondent #as unceremoniously ordered to prepare for immediate repatriation
the follo#ing day as he #as said to be suffering from a disease of un*no#n origin
M!3)!M!7 and D'!M!7"'D5), on the other hand, denied the imputation of illegal dismissal
"hey alleged that Ca<eras approached Capt !le*os on .1 )eptember $//: and informed the
latter that he could not sleep at night because he felt something cra#ling over his body
Furthermore, Ca<eras reportedly declared that he could no longer perform his duties and
re?uested for repatriation "he follo#ing paragraph in the vessel's Dec* 4og #as allegedly
entered by Capt !le*os, to #itC
Private respondent #as then sent to the Medical Center for )eamen at 3otterdam #here he
#as e=amined by Dr Wden ;oed #hose diagnosis appeared in a Medical 3eport as paranoia
and other mental problemsN:O Conse?uently, upon Dr ;oeds recommendation, Ca<eras #as
repatriated to the Philippines on .0 )eptember $//:
49
W;535FO35, <udgment is hereby rendered declaring the repatriation and dismissal of
complaint Wilfredo " Ca<eras as illegal and ordering respondents Marsaman Manning !gency,
'nc and Diamantides Maritime, 'nc to <ointly and severally pay complainant the sum of >)D
:,$&&&& or its peso e?uivalent at the time of payment plus >)D :$&&& as $&S attorneys fees
it appearing that complainant had to engage the service of counsel to protect his interest in the
prosecution of this case
$ "he employment of the seaman shall cease upon e=piration of the contract period indicated
in the Cre# Contract unless the Master and the )eaman, by mutual consent, in #riting, agree to
an early termination = = = = +underscoring ours-
Clearly, under the foregoing, the employment of a Filipino seaman may be terminated prior to
the e=piration of the stipulated period provided that the master and the seaman +a- mutually
consent thereto and +b- reduce their consent in #riting
"he 4abor !rbiter, rationali(ing that the aforesaid la# did not apply since it became effective
only one +$- month after respondent's overseas employment contract #as entered into on $:
9une $//:, simply a#arded private respondent his salaries corresponding to the une=pired
portion of his employment contract, ie, for 01 months "he 743C affirmed the a#ard and the
Office of the )olicitor @eneral +O)@- fully agreed But petitioners no# insist that )ec $&, 3!
0&,. is applicable because although private respondents contract of employment #as entered
into before the la# became effective his alleged cause of action, ie, his repatriation on .0
)eptember $//: #ithout <ust, valid or authori(ed cause, occurred #hen the la# #as already in
effect Petitioners' purpose in so arguing is to invo*e the la# in <ustifying a lesser monetary
a#ard to private respondent, ie, salaries for three +%- months only pursuant to the last portion
of )ec $& as opposed to the salaries for 01 months a#arded by the 4abor !rbiter and affirmed
by the 743C
;54DC
the ?uestioned Decision and 3esolution dated $1 )eptember $//1 and $. 7ovember $//1,
respectively, of public respondent 7ational 4abor 3elations Commission are !FF'3M5D
Petitioners M!3)!M!7 M!77'7@ !@57CA, '7C, and D'!M!7"'D5) M!3'"'M5, '7C, are
ordered, <ointly and severally, to pay private respondent W'4F35DO " C!953!) his salaries
for the une=pired portion of his employment contract or >)DV:,$&&&&, reimburse the latter's
placement fee #ith t#elve percent +$.S- interest per annum conformably #ith )ec $& of 3!
0&,., as #ell as attorney's fees of ten percent +$&S- of the total monetary a#ard Costs against
petitioners
)O ordered
50
N@3 7o $%$1:1 October $., $//0O
(S+(N C&N2&R ,4R C(R&&R (N* &M8L4AM&N2 SAS2&M (N* S&R3+C&S$ +NC.
6(CC&SS7$ "etitioner, vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N and +'N4
M&*+(L&S$ res"ondents.
85N4$ J.)
F!C")C
Petitioner hired respondent 'B7O M5D'!45) to #or* as a mason in 9eddah, )audi !rabia,
#ith a monthly salary of $,.&& )audi 3iyals +)3- #ith a term of contract for t#o +.- years, from
February .0, $//: until February .0, $//8
On May .1, $//1, respondent applied #ith petitioner for vacation leave #ith pay #hich he
earned after #or*ing for more than a year ;is application for leave #as granted While en
route to the Philippines, his co-#or*ers informed him that he has been dismissed from service
"he information turned out to be true
On 9une $8, $//1, respondent filed a complaint #ith the labor arbiter for illegal dismissal,
non-payment of overtime pay, refund of transportation fare, illegal deductions, non-payment of
$%
th
month pay and salary for the une=pired portion of his employment contract
On March $8, $//8, the labor arbiter found petitioner guilty of illegal dismissal 'n the
dispositive portion or the fallo, the 4abor !rbiter ordered the respondent !CC5)) and2or
!BD>44!; 454'7! to pay the complainant the amount of )3 $%,.&& representing
complainantKs payment for the une=pired portion of his contract, refund of the illegality deducted
amount less P:,&&&&&, the legally allo#ed placement fee and attorneyKs fees e?uivalent to ten
percent +$&S- of the <udgment a#ard or the amount of )3 $,%.&
't is note#orthy, ho#ever, that in the body of his decision, the labor arbiter applied )ection
$& 3! 0&,.,
iN.O
the la# relative to the protection of Filipino overseas-#or*ers, and computed
private respondentKs salary for the une=pired portion of his contract as follo#sC )3$,.&& = %
months W )3%,1&&
On appeal by petitioner, the 743C affirmed the factual findings of the labor arbiter but
modified the appealed decision by D545"'7@ the order of refund of e=cessive placement fee
for lac* of <urisdiction
Petitioner moved for reconsideration #ith respect to the labor arbiterKs a#ard of )3$%,.&&
in the dispositive portion of the decision, representing respondentKs salary for the une=pired
portion of his contract invo*ing )ection $& 3! 0&,. Petitioner urged that its liability for
respondentKs salary is for only three +%- months Petitioner claimed that it should pay only )3
%1&& +)3 $,.&& = % months- for the une=pired portion of respondentKs employment and )3%1&
+$&S of )3%,1&&- for attorneyKs fees
"he 743C D57'5D petitionerKs motion 't ruled that 3! 0&,. does 7O" apply as
respondentKs employment #hich started in February $//: occurred prior to its effectivity on 9uly
$:, $//:
;ence, this petition for certiorari.
'))>5C
51
Whether or not 3! 0&,. applies to the case of the respondent and in case of conflict
bet#een the dispositive portion or the ;allo and the body of the decision, #hich one shall prevail
;54DC
!s a rule, <urisdiction is determined by the la# at the time of the commencement of the
action 'n the case at bar, private respondentKs cause of action did not accrue on the date of his
date of his employment or on February .0, $//: ;is cause of action arose only from the-time
he #as illegally dismissed by petitioner from service in 9une $//1, after his vacation leave
e=pired 't is thus clear that 3! 0&,. #hich too* effect a year earlier in 9uly $//: !PP4'5) to
the case at bar
>nder )ection $& of 3! 0&,., a #or*er dismissed from overseas employment #ithout <ust,
valid or authori(ed cause is entitled to his salary for the une=pired portion of his employment
contract or for three +%- months for every year of the une=pired term, #hichever is less
'n the case at bar, the une=pired portion of private respondentKs employment contract is
eight +0- months Private respondent should therefore be paid his basic salary corresponding to
three +%- months or a total of )3%,1&&, #hich is the same computation #as made by the labor
arbiter in the body of his decision Despite said computation in the body of the decision,
ho#ever, the labor arbiter a#arded higher sum +)3$%,.&&- in the dispositive portion
"he general rule is that #here there is a CO7F4'C" bet#een the dispositive portion or the
;allo and the body of the decision, the FA&&) CO7"3O4) "his rule rests on the theory that
the ;allo is the final order #hile the opinion in the body is merely a statement ordering nothing
;o#ever, #here the inevitable conclusion from the body of the decision is so clear as to
sho# that there #as a mista*e in the dispositive portion, the body of the decision #ill prevail !s
in this case, the labor arbiterKs a#ard of a higher amount in the dispositive portion #as clearly an
error for there is nothing in the te=t of the decision #hich support the a#ard of said higher
amount ;ence, the correct a#ard to private respondent for the une=pired portion of his
employment contract is )3%,1&&
"he decision of the public respondent 7ational 4abor 3elations Commission, dated October $,,
$//8, is !FF'3M5D #ith modificationsC petitioner is ordered to pay private respondent 'B7O
M5D'!45) the peso e?uivalent of the amounts of )3%,1&& for the une=pired portion of his
employment contract, and )3%1& for attorneyKs fees 7o costs
52
(2H&NN( +N2&RN(2+4N(L M(N84.&R S&R3+C&S$ +NC.$ petitioner$ vs. N4N+24
3+LL(N4S$ respondent.
G.R. No. 151303. April 15, 2005
R.A. 8042 Migrant Workers Act
Q!"M#!NG,J$
,acts)
"he petitioner is a domestic corporation engaged in recruitment and placement of #or*ers for
overseas employment 3espondent applied to #or* overseas as careta*er thru petitioner "he
petitioner as*ed for a placement fee amounting to P$&&,&&& but the respondent begged to
reduced the fee and it #as reduced to P/,,&&& #ith the petitioner paying only P%&,&&& and the
remaining #ill be paid through salary deductions >pon arrival on "ai#an, he #as assigned to a
mechanical shop, o#ned by ;sien, as a hydraulic installer2repairer for car lifters, instead of the
<ob for #hich he #as hired ;e did not, ho#ever, complain because he needed money to pay for
the debts he incurred bac* home Barely a month after his placement, he #as terminated by
;sien and received his salary and instructed for departure to the Philippines >pon arrival, the
respondent #ent to petitionerKs office and demanded for the reimbursement of P%&,&&& but
instead the petitioner gave him a summary of e=penses relating his deployment "he
respondent filed a complaint before !d<udication Office of the PO5! ;o#ever, because of
financial constraints, he had to go home to Polanco, Tamboanga del 7orte and filed a complaint
against petitioner for illegal dismissal, violation of contract, and recovery of unpaid salaries and
other benefits before the 743C )ub-3egional !rbitration Branch 7o /, Dipolog City 'n its
defense, petitioner alleged that under the employment contract, respondent #as to undergo a
probationary period of forty +,&- days ;o#ever, at the <ob site, respondent #as found to be unfit
for his #or*, thus he resigned from his employment and re?uested for his repatriation signing a
statement to that effect "he 4abor !rbiter rendered a Decision holding petitioner and Wei Au
;sien solidarily liable for the #ages representing the unserved portion of the employment
contract, the amount unla#fully deducted from respondentKs monthly #age, moral damages,
e=emplary damages and attorneyKs fees On appeal, the 743C reversed the 4abor !rbiter and
dismissed the complaint for lac* of merit 't found that respondent #as not at all dismissed,
much less illegally 3espondent seasonably filed a motion for reconsideration, #hich the 743C
denied in its second resolution respondent appealed to the Court of !ppeals and granted the
petition and reversing the ?uestioned resolutions of the 743C
+ss"e)
$ Did the respondent voluntarily resign or #as he illegally dismissedR
. !ssuming that the respondent #as illegally dismissed, #as it proper for the Court of !ppeals
to affirm in toto the monetary a#ards in the Decision of the 4abor !rbiterR
Held)
"he )C denied the petition and affirmed #ith modification the resolution by the Court of
!ppeals On the first issue, !n employee voluntarily resigns #hen he finds himself in a situation
#here he believes that personal reasons cannot be sacrificed in favor of the e=igency of the
serviceD thus, he has no other choice but to disassociate himself from his employment 'n this
53
case respondent avers that petitioner did not e=plain #hy he #as un?ualified nor inform of any
?ualifications needed for the <ob prior to his deployment as mandated by !rt .0$N/O of the 4abor
Code and failed to prove the legality of the dismissal, despite the fact that the burden of proof
lies on the employment and recruitment agency On the second issue, the )C declared the
petitioner solidarily liable #ith Wei Au ;sien to pay the une=pired portion based on )ec $& 3!
0&,. 4astly, because of the breach of contract and bad faith alleged against the employer and
the petitioner, #e must sustain the a#ard of P:&,&&& in moral damages and P:&,&&& as
e=emplary damages, in addition to attorneyKs fees of ten percent +$&S- of the aggregate
monetary a#ards
54
&(S2&RN SH+88+NG L+N&S$ +NC.$ vs 8H+L+88+N& 43&RS&(S &M8L4AM&N2
(*M+N+S2R(2+4N 684&(7
G.R. No. 7>>## 4ctober %8$ %988
,(C2S)
Eitaliano )aco #as Chief Officer of the M2E 5astern Polaris #hen he #as *illed in an accident in
"o*yo, 9apan ;is #ido# sued for damages under 5=ecutive Order 7o 8/8 and Memorandum
Circular 7o . of the PO5! "he petitioner, as o#ner of the vessel, argued that the complaint
#as cogni(able not by the PO5! but by the )ocial )ecurity )ystem and should have been filed
against the )tate 'nsurance Fund "he PO5! nevertheless assumed <urisdiction and after
considering the position papers of the parties ruled in favor of the complainant "he a#ard
consisted of P$0&,&&&&& as death benefits and P$.,&&&&& for burial e=penses
+SS5&)
Whether )aco #as an overseas #or*er or a domestic #or*er
R5L+NG)
We see no reason to disturb the factual finding of the PO5! that Eitaliano )aco #as an
overseas employee of the petitioner at the time he met #ith the fatal accident in 9apan in $/0:
>nder the $/0: 3ules and 3egulations on Overseas 5mployment, overseas employment is
defined as Gemployment of a #or*er outside the Philippines, including employment on board
vessels plying international #aters, covered by a valid contract ! contract #or*er is described
as Gany person #or*ing or #ho has #or*ed overseas under a valid employment contract and
shall include seamenG or Gany person #or*ing overseas or #ho has been employed by another
#hich may be a local employer, foreign employer, principal or partner under a valid employment
contract and shall include seamenG "hese definitions clearly apply to Eitaliano )aco for it is not
disputed that he died #hile under a contract of employment #ith the petitioner and alongside the
petitioner's vessel, the M2E 5astern Polaris, #hile berthed in a foreign country
't is #orth observing that the petitioner performed at least t#o acts #hich constitute implied or
tacit recognition of the nature of )aco's employment at the time of his death in $/0: "he first is
its submission of its shipping articles to the PO5! for processing, formali(ation and approval in
the e=ercise of its regulatory po#er over overseas employment under 5=ecutive Order 7O
8/8 "he second is its payment of the contributions mandated by la# and regulations to the
Welfare Fund for Overseas Wor*ers, #hich #as created by PD 7o $1/, Gfor the purpose of
providing social and #elfare services to Filipino overseas #or*ersG
't is not denied that the private respondent has been receiving a monthly death benefit pension
of P:$,,. since March $/0: and that she #as also paid a P$,&&&&& funeral benefit by the
)ocial )ecurity )ystem 'n addition, as already observed, she also received a P:,&&&&& burial
gratuity from the Welfare Fund for Overseas Wor*ers "hese payments #ill not preclude
55
allo#ance of the private respondent's claim against the petitioner because it is specifically
reserved in the standard contract of employment for Filipino seamen under Memorandum
Circular 7o ., )eries of $/0,
)aid provisions are manifestations of the concern of the )tate for the #or*ing class, consistently
#ith the social <ustice policy and the specific provisions in the Constitution for the protection of
the #or*ing class and the promotion of its interest
56
G.R. No. L9>#:#: May 17$ %98:
8H+L+88+N& +N2&RN(2+4N(L SH+88+NG C4R84R(2+4N$ petitioner,
vs
H4N4R('L& N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N (N* 'R+G+*4 S(MS4N$
represented by Eife$ N4RM( S. S(MS4N$ respondents
,(C2S
"he case at bar stems from a claim for disability compensation benefits and hospitali(ation
e=penses under employment contract, filed by private respondent herein, Brigido )amson,
against the petitioner before the 7ational )eaman's Board +7)B-
On !pril ., $/0$, a decision #as rendered on by the 5=ecutive Director of the 7)B, ordering
petitioner herein to pay >) V%,0&& for disability compensation benefits Petitioner argued that
there #as already a previous payment to satisfy such claims for a total of $0,&&& Php
'))>5C
W;5";53 O3 7O" ";535 W!) 533O3 '7 O3D53'7@ P!AM57" OF !W!3D FO3
D!M!@5) '7 DO44!3)
;54DC
While it is true that 3epublic !ct 7o :./ ma*es it unla#ful to re?uire payment of domestic
obligations in foreign currency, this particular statute is not applicable to the case at bar !
careful reading of the decision rendered by the 5=ecutive Director of the 7)B dated !pril .,
$/0$ and #hich led to the Writ of 5=ecution protested to by petitioner, #ill readily disclose that
the a#ard to the private respondent does not compel payment in dollar currency but in fact
e=pressly allo#s payment of <its equivalent in P,ili""ine currency< Moreover, as pointed out by
public respondent, #ithout any subse?uent controversion interposed by petitioner, the fi=ing of
the a#ard in dollars #as based on the parties employment contract, stipulating #ages and
benefits in dollars since private respondent #as engaged in an overseas seaman on board
petitioner's foreign vessel +Comment of respondent 743C to the Petition, pg $&, 3ollo, ,/-
57
3+R9!&N Shippin- and Marine Services$ +nc.$ vs. NLRC
G.R. No. L9:8%% = L9:8%1 Nove/ber %8$ %98#
&N '(NC$ G52+&RR&?$ !R.$ J.$
,acts)
Certain seamen entered into a contract of employment for a $.-month period )ome three
months after the commencement of their employment, the seamen demanded a :& S increase
of their salaries and benefits "he seamen demanded this increase #hile their vessel #as en
route to a port in !ustralia controlled by thye 'nternational "ransport Wor*ersK Federation +'"F-,
a militant international labor organi(ation #ith affiliates in different ports of the #orld, #hich
reputedly can tie a vessel in a port by preventing its loading and unloading unless it paid its
seamen their prescribed '"F rates
'n reply, the agent of the o#ner of the vessel agreed to pay a .:S increase, but #hen the
vessel arrived in 9apan shortly after#ards, the seamen #ere repatriated to Manila and their
contract terminated "here is no sho#ing that the )eamen #ere given the opportunity to at least
comment for the cancellation of their contracts, although they had served only three +%- out of
the t#elve +$.- months' duration of their contracts
"he private respondents filed a complaint for illegal dismissal and non-payment of earned
#ages #ith the 7ational )eamen Board +7)B- "he Eir-<en )hipping and Marine )ervices 'nc in
turn filed a complaint for breach of contract and recovery of e=cess salaries and overtime pay
against the private respondents On 9uly ., $/0&, the 7)B rendered a decision declaring that
the seamen breached their employment contracts #hen they demanded and received from Eir-
<en )hipping #ages over and above their contracted rates "he dismissal of the seamen #as
declared legal and the seamen #ere ordered suspended
"he seamen appealed the decision to the 743C #hich reversed the decision of the on the
ground that the termination of the contract by the petitioner #as #ithout valid cause ;ence, the
petition
+ss"e)
Whether or not the findings of the 7)B is more credible than the 743C that the seamen did not
violate their contract
Held)
"he decision sought to be reconsidered appears to be a deviation from the Court's decision,
spea*ing through the First Division, in =alle! (,i""ing, nc. v. $on. 'inister o; &a1or +$&.
)C3! 0%:- Faced #ith t#o seemingly conflicting resolutions of basically the same issue by its
t#o Divisions, the Court therefore, resolved to transfer the case to the Court en banc
We sustain the decision of the respondent 7ational labor 3elations Commission
"he contention that manning industries in the Philippines #ould not survive if the instant case is
not decided in favor of the petitioner is not supported by evidence "he Wallem case #as
decided on February .&, $/0$ "here have been no severe repercussions, no drying up of
58
employment opportunities for seamen, and none of the dire conse?uences repeatedly
emphasi(ed by the petitioner Why should Eir-<en be all e=ceptionR
Filipino seamen are admittedly as competent and reliable as seamen from any other country in
the #orld Other#ise, there #ould not be so many of them in the vessels sailing in every ocean
and sea on this globe 't is competence and reliability, not cheap labor that ma*es our seamen
so greatly in demand Filipino seamen have never demanded the same high salaries as seamen
from the >nited )tates, the >nited Iingdom, 9apan and other developed nations But certainly
they are entitled to government protection #hen they as* for fair and decent treatment by their
employer-, and #hen they e=ercise the right to petition for improved terms of employment,
especially #hen they feel that these are sub-standard or are capable of improvement according
to internationally accepted rules 'n the domestic scene, there are marginal employers #ho
prepare t#o sets of payrolls for their employees H one in *eeping #ith minimum #ages and the
other recording the sub-standard #ages that the employees really receive, "he reliable
employers, ho#ever, not only meet the minimums re?uired by fair labor standards legislation but
even go #ay above the minimums #hile earning reasonable profits and prospering "he same is
true of international employment "here is no reason #hy this Court and the Ministry of 4abor
and 5mployment or its agencies and commissions should come out #ith pronouncements
based on the standards and practices of unscrupulous or inefficient shipo#ners, #ho claim they
cannot survive #ithout resorting to tric*y and deceptive schemes, instead of @overnment
maintaining labor la# and <urisprudence according to the practices of honorable, competent,
and la#-abiding employers, domestic or foreign
Prescinding from the above, #e no# hold that neither the 7ational )eamen Board nor the
7ational 4abor 3elations Commission should, as a matter of official policy, legitimi(e and
enforce cubious arrangements #here shipo#ners and seamen enter into fictitious contracts
similar to the addendum agreements or side contracts in this case #hose purpose is to deceive
"he 3epublic of the Philippines and its ministries and agencies should present a more
honorable and proper posture in official acts to the #hole #orld, not#ithstanding our desire to
have as many <ob openings both here and abroad for our #or*ers !t the very least, such as
sensitive matter involving no less than our dignity as a people and the #elfare of our
#or*ingmen must proceed from the Batasang Pambansa in the form of policy legislation, not
from administrative rule ma*ing or ad<udication
*ecision)
W;535FO35, the motions for reconsideration are hereby @3!7"5D "he petition is
D')M'))5D for lac* of merit "he decision of the 7ational 4abor 3elations Commission is
!FF'3M5D 7o costs )O O3D535D
Fernando, C.J., Guerrero, A1ad (antos, Plana, 3scolin and Relova, JJ., concur.
59
S"<ara vs. 'enipayo
G.R. No. :7999 3S. NLRC
FactsC ! group of Filipino seamen entered into separate contracts of employment #ith
Magsaysay lines at specified salary rates When vessel reached Manila Magsaysay 4ines
demanded from )eamen over payment made to them in Canada the seamen demanded and
received additional #ages prescribed by the 'nternational "ransport #or*ers Federation +'"F- in
amounts over and above the rates appearing in their contract approved earlier by the 7ational
)eamen Board
'ssueC Whether the )eaman demanded and received additional #ages prescribes 'nternational
"ransport Wor*ers Federation
When the vessel doc*ed at 7agoya , an 7)B representative boarded the vessel ;e
called a meeting among seamen, an urged them to sign an agreement, #hich they did 't turned
out that in the agreement the follo#ing statement #as inserted the amounts #ere received and
held by cre# members in trust for ship o#ners #hen reached Manila Magsaysay 4ines
demanded from seamen the overpayments made to them in Canada When they refused, it filed
charges against them before the 7)B
7)B declared the seamen guilty of breach of their employment contracts suspended the
seamen for three years, prompting the #or*ers to bring the case up to the )upreme Court
3ulingC "he )upreme Court reversed and set aside the decision of 7)B-7ational seamen Board
and the 743C, it held that )eamen #ere not guilty of the offense for #hich they #ere charged
and order Magsaysay 4ines to pay the seamen their earned but unpaid #ages overtime pay
)pecial !greement that the parties entered into Eancouver "he criminal cases #ere ordered
dismissed "he Court reiterate the Eir-<en pronouncements
DecisionC "he )upreme Court By 9ustice @uittere(


60
CH(3&? 3S. '4N2498&R&?$ R(A(L( et (l.
G.R. No. %988
85N4$ J.$
FactsC
Petitioner entered into a standard employment contract for overseas employment as an
entertainer in 9apan "he contract, as approved by PO5!, had a duration of t#o to si= months
and the stipulated monthly compensation #as V$:&& ;o#ever, a side agreement #as entered
into by Petitioner #ith the foreign employer through her local manager )uch agreement
stipulated a lesser compensation and other deductions Petitioner pushed through #ith her
foreign employment and #or*ed for si= months "#o years upon her return, Petitioner filed a
complaint of underpayment of #ages
'ssueC
Whether or not the side agreement entered into by the petitioner superseded the
employment contract previously entered intoR
;eldC
't #as e=pressly stated in the employment contract that any changes or alterations made
to any part of said contract #ithout prior approval from the PO5! shall be null and void
not#ithstanding the fact the employee had agreed to said contract
61
,in/an General (ss"rance vs. +nnocencio
FG.R. No. 917#97:$ Nov. %:$ %989
F!C")C
Pan Pacific Overseas 3ecruiting )ervices, 'nc +GPan PacificG- is a private, fee-charging,
recruitment and employment agency 'n accordance #ith the re?uirements of )ection ,, 3ule '',
Boo* '' of the 3ules and 3egulations of the Philippine Overseas 5mployment !dministration
+PO5!-, Pan Pacific posted a surety bond issued by petitioner Finman @eneral !ssurance
Corporation +GFinmanG- and #as granted a license to operate by the PO5!
Private respondents William 'nocencio, Perfecto Palero, 9r, 5d#in Cardones and one 5d#in
;ernande( filed #ith the PO5! separate complaints against Pan Pacific for violation of !rticles
%. and %, +a- of the 4abor Code, as amended and for refund of placement fees paid to Pan
Pacific "he complainants alleged that Pan Pacific charged and collected such fees from them
but did not secure employment for them
!cting on the complaints, the PO5! !dministrator !otu"ro"rioimpleaded petitioner Finman as
party respondent in its capacity as surety for Pan Pacific )eparate summonses #ere served
upon Finman and Pan Pacific
Finman filed an ans#er denying liability and pleading, by #ay of special and affirmative
defenses, thatC +$- the PO5! had no G<urisdiction over surety bonds,G that <urisdiction being
vested in the 'nsurance Commission or the regular courtsD +.- it +Finman- had not violated
!rticles %. and %, +a- of the 4abor Code and complainants' claims had accrued during the
suspension of the principal obligor, Pan PacificD +%- complainants had no cause of action against
Finman, since it #as not privy to the transactions bet#een them and Pan Pacific and had not
received any moneys from themD and +,- the amounts claimed by complainants had been paid
by them as deposits and not as placement fees
'))>5C
Whether or not PO5! has <urisdiction over surety bonds
;54DC
Aes the PO5! has <urisdiction over surety bonds "he )upreme Court heldLWe believe and so
hold that to compel the PO5! and private respondents the beneficiaries of Finman's bond-to go
to the 'nsurance Commissioner or to a regular court of la# to enforce that bond, #ould be to
collide #ith the public policy #hich re?uires prompt resolution of claims against private
recruitment and placement agencies
62
&astern (ss"rance and S"rety Corp. vs Sec. of Labor
GR No L9790#>9: !an"ary %7$ %99
PartiesC
5!)"537 !))>3!7C5 P )>35"A CO3PO3!"'O7, petitioner,
vs
)5C35"!3A OF 4!BO3, P;'4'PP'75 OE53)5!) 5MP4OAM57" !DM'7')"3!"'O7,
54E'3! E57">3!, 5)"53 "3!7@>'44!7, et al, respondents
"an<uatco, Oreta, "an<uatco, Berenguer P )an Eicente for petitioner

7arvasa, 9
FactsC
'n connection #ith the application #ith the Philippine Overseas 5mployment !dministration
+PO5!- of 9 P B Manpo#er )pecialist, 'nc for a license to engage in business as a recruitment
agency, a surety bond #as filed on 9anuary ., $/0: by the applicant and the 5astern !ssurance
and )urety Corporation, herein petitioner, in virtue of #hich they both held themselves H
firmly bound unto +said- Philippine Overseas 5mployment !dministration, Ministry of
4abor in the penal sum of P5)O) O75 ;>7D35D F'F"A ";O>)!7D O74A
+Pl:&,&&&&&- for the payment of #hich #ill and truly to be made, +they bound
themselves, their- heirs, e=ecutors, administrators, successors and assigns, <ointly and
severally
"he bond stipulated thatC
a- it #as Gconditioned upon the true and faithful performance and observance of the
principal +9 P B Manpo#er )pecialist, 'nc- of its duties and obligations in accordance
#ith all the rules and regulations promulgated by the Ministry of 4abor Philippine
Overseas 5mployment !dministration and #ith the terms and conditions stipulated in the
4icenseD
b- the liability of the )urety +petitioner- shall in no case e=ceed the sum of P5)O)
O75 ;>7D35D F'F"A ";O>)!7D +P$:&,&&&&&- O74A, P;'4'PP'75 C>3357CAD
c- notice to the Principal is also a notice to the )uretyD and
d- 4'!B'4'"A of the surety shall e=pire on 9!7>!3A &., $/01 and this bond shall be
automatically cancelled ten +$&- days after its e=piration and the surety shall not be liable
for any claim not discovered and presented to it in #riting #ithin said period of from
e=piration and the obligee hereby e=pressly #aives the rights to file any court action
against the )urety after termination of said period of above cited
'ssuesC
5!)CO essentially disclaimed liability on the ground that the claims #ere not e=pressly covered
by the bond, that PO5! had no <urisdiction to order forfeiture of the bond, that some of the
claims #ere paid beyond or prior to the period of effectivity of the bond
;eldC
5!)CO's liability for the refund, <ointly and severally #ith its principal, #as limited to $/
named complainants +in contrast to verdicts of the PO5! and the Deputy Minister #hich both
63
ordered payment to no less than %% complainants- and #as correspondingly reduced from
P%&0,8:$8: and >) V ,&&&& to the aggregate amount of P $,&,0$88:
"he penalties of suspension and cancellation of license or authority are prescribed for
violations of the above ?uoted provisions, among others !nd the )ecretary of 4abor has the
po#er under )ection %: of the la# to apply these sanctions, as #ell as the authority, conferred
by )ection %1, not only, to Grestrict and regulate the recruitment and placement activities of all
agencies,G but also to Gpromulgate rules and regulations to carry out the ob<ectives and
implement the provisionsG governing said activities Pursuant to this rule-ma*ing po#er thus
granted, the )ecretary of 4abor gave the PO5! Gon its o#n initiative or upon filing of a
complaint or report or upon re?uest for investigation by any aggrieved person, +authority to-
conduct the necessary proceedings for the suspension or cancellation of the license or authority
of any agency or entityG for certain enumerated offenses including H
$- the imposition or acceptance, directly or indirectly, of any amount of money, goods or
services, or any fee or bond in e=cess of #hat is prescribed by the !dministration, and
.- any other violation of pertinent provisions of the 4abor Code and other relevant la#s,
rules and regulations
"he !dministrator #as also given the po#er to Gorder the dismissal of the case or the
suspension of the license or authority of the respondent agency or contractor or recommend to
the Minister the cancellation thereofG
5!)CO's claim that it had not been properly served #ith summons as regards a fe# of the
complaints must be re<ected, the issue being factual, and the Court having been cited to no
grave error invalidating the respondent )ecretary's conclusion that summons had indeed been
duly served
5!)CO's half-hearted argument that its liability should be limited to the ma=imum amount set in
its surety bond, ie, P$:&,&&&&&, is palpably #ithout merit, since the aggregate liability imposed
on it, P$,&,0$88:, supra, does not in fact e=ceed that limit
DecisionC
W;535FO35, the petition is D')M'))5D for lac* of merit, and this decision is declared to be
immediately e=ecutory Costs against petitioner
64
Sala<ar vs. (chacoso and MarG"e<
G.R. No. 8%:%$ March %0$ %99
,(C2S)
! complaint against the petitioner )ala(ar #as filed for #ithholding the complainantKs
P5CC Card, it #as further alleged that )ala(ar did not posses a license to operate as a
recruitment agency PO5! through its Director on 4icensing and 3egulation, issued a #arrant of
arrest and sei(ure against the petitioner
+SS5&)
Whether or not the po#er of the )ecretary of 4abor to issue #arrants of arrest and
sei(ure is validR
H&L*)
>nder the ne# Constitution, Gno search #arrant or #arrant of arrest shall issue e=cept
upon probable cause to be determined personally by the <udge after e=amination under oath or
affirmation of the complainant and the #itnesses he may produce, and particularly describing
the place to be searched and the persons or things to be sei(ed 't is only a <udge #ho may
issue #arrants of search and arrestG Mayors may not e=ercise this po#er 7either may it be
done by a mere prosecuting body "he )ecretary of 4abor, not being a <udge, may no longer
issue search or arrest #arrants ;ence, the authorities must go through the <udicial process
65
Soriano vs. 4ffshore Shippin- and Mar@etin- Corp.
G.R. No. 7809$ Sept. %0$ %989
,acts) 'n search for better opportunities and higher income, petitioner 7orberto )oriano, a
licensed )econd Marine 5ngineer, sought employment and #as hired by private respondent
Inut Inutsen O!) through its authori(ed shipping agent in the Philippines, Offshore )hipping
and Manning Corporation !s evidenced by the Cre# !greement, petitioner #as hired to #or*
as "hird Marine 5ngineer on board Inut ProviderG #ith a salary of >)V0&&&& a month on a
conduction basis for a period of fifteen +$:- days ;e admitted that the term of the contract #as
e=tended to si= +1- months by mutual agreement on the promise of the employer to the
petitioner that he #ill be promoted to )econd 5ngineer "hus, #hile it appears that petitioner
<oined the aforesaid vessel on 9uly .%, $/0: he signed off on 7ovember .8, $/0: due to the
alleged failure of private respondent-employer to fulfill its promise to promote petitioner to the
position of )econd 5ngineer and for the unilateral decision to reduce petitioner's basic salary
from >)V0&&&& to >)V:1&&& Petitioner #as made to shoulder his return airfare to Manila
'n the Philippines, petitioner filed #ith the Philippine Overseas 5mployment !dministration
+PO5! for short-, a complaint against private respondent for payment of salary differential,
overtime pay, unpaid salary for 7ovember, $/0: and refund of his return airfare and cash bond
allegedly in the amount of P.&,&&&&& contending therein that private respondent unilaterally
altered the employment contract by reducing his salary of >)V0&&&& per month to >)V:1&&&,
causing him to re?uest for his repatriation to the Philippines
'n resolving aforesaid case, the Officer-in-Charge of the Philippine Overseas 5mployment
!dministration or PO5! found that petitioner-complainant's total monthly emolument is
>)V0&&&& inclusive of fi=ed overtime as sho#n and proved in the Wage )cale submitted to the
!ccreditation Department of its Office #hich #ould therefore not entitle petitioner to any salary
differentialD that the version of complainant that there #as in effect contract substitution has no
grain of truth because although the 5mployment Contract seems to have corrections on it, said
corrections or alterations are in conformity #ith the Wage )cale duly approved by the PO5!D
that the #ithholding of a certain amount due petitioner #as <ustified to ans#er for his repatriation
e=penses #hich repatriation #as found to have been re?uested by petitioner himself as sho#n
in the entry in his )eaman's Boo*D and that petitioner deposited a total amount of P$:,&&&&&
only instead of P.&,&&&&& cash bond

Dissatisfied, both parties appealed the aforementioned decision of the PO5! to the 7ational
4abor 3elations Commission Complainant-petitioner's appeal #as dismissed for lac* of merit
#hile respondents' appeal #as dismissed for having been filed out of time
Petitioner's motion for reconsideration #as li*e#ise denied ;ence this recourse
+ss"e) Whether or not PO5! acted in e=cess of its <urisdictionR
*ecision) !s clearly e=plained by respondent 743C, the correction #as made only to specify
the salary and the overtime pay to #hich petitioner is entitled under the contract 't #as a mere
brea*do#n of the total amount into >)V:1&&& as basic #age and >)V.,&&& as overtime pay
Other#ise stated, #ith or #ithout the amendments the total emolument that petitioner #ould
receive under the agreement as approved by the PO5! is >)V0&&&& monthly #ith #age
differentials or overtime pay included
66
Moreover, the presence of petitioner's signature after said items renders improbable the
possibility that petitioner could have misunderstood the amount of compensation he #ill be
receiving under the contract 7or has petitioner advanced any e=planation for statements
contrary or inconsistent #ith #hat appears in the records "he purpose of !rticle %,, paragraph
$ of the 4abor Code is clearly the protection of both parties 'n the instant case, the alleged
amendment served to clarify #hat #as agreed upon by the parties and approved by the
Department of 4abor "o rule other#ise #ould go beyond the bounds of reason and <ustice
Finally, it is #ell-settled that factual findings of ?uasi-<udicial agencies li*e the 7ational 4abor
3elations Commission #hich have ac?uired e=pertise because their <urisdiction is confined to
specific matters are generally accorded not only respect but at times even finality if such
findings are supported by substantial evidence

W;535FO35, the instant petition is D57'5D "he assailed decision of the 7ational 4abor
3elations Commission is !FF'3M5D in toto
)O O3D535D
67
N&RRA *. '(L(24NG(N$ N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N (N* 8H+L+88+N&
43&RS&(S &M8L4AM&N2 (*M+N+S2R(2+4N$
G.R. No. 811:1 ,ebr"ary 18$ %989
,(C2S)
On 7ovember ., $/0., a Gcre# !greementG #as entered into by private respondent 7erry D
Balatongan and Philimare )hipping and 5?uipment )upply +hereinafter called Philimare-
#hereby the latter employed the former as able seaman on board its vessel G)anta Cru(G
+renamed G"urtle BayG- #ith a monthly salary of >) V %&&&& )aid agreement #as processed
and approved by the 7ational )eaman's Board +7)B- on 7ovember %, $/0. While on board
said vessel the said parties entered into a supplementary contract of employment on December
1, $/0. #hich provides that the employer shall be obliged to insure the employee during his
engagement against death or permanent invalidity caused by accident on board up toC>) V
,&,&&& - for death caused by accident and >) V :&,&&& - for permanent total disability caused
by accident
Balatongan demanded payment for his claim for total disability insurance in the amount of >) V
:&,&&&&& as provided for in the contract of employment but his claim #as denied for having
been submitted to the insurers beyond the designated period for doing so
"hus, Balatongan filed on 9une .$, $/0: a complaint against Philimare and )eagull Maritime
Corporation +hereinafter called )eagull- in the Philippine Overseas 5mployment !dministration
+PO5!- for non-payment of his claim for permanent total disability #ith damages and attorney's
fees
!fter the parties submitted their respective position papers #ith the corresponding documentary
evidence, the officer-in-charge of the Wor*ers !ssistance and !d<udication Office of the PO5!
rendered a decision on May ., $/01, the dispositive part of #hich reads as follo#sC
)eagull and Philimare appealed said decision to the 7ational 4abor 3elations Commission
+743C- on 9une ,, $/01 Pending resolution of their appeal because of the alleged transfer of
the agency of )eagull to )outheast !sia )hipping Corporation, )eagull filed on !pril .0, $/08 a
Motion For )ubstitution2'nclusion of Party 3espondent #hich #as opposed by
Balatongan
:
"his #as follo#ed by an e>-"arte motion for leave to file third party complaint on
9une ,, $/08 by )eagull ! decision #as promulgated on December 8, $/08 denying both
motions and dismissing the appeal for lac* of merit
>
! motion for reconsideration of said
decision #as denied for lac* of merit in a resolution dated February .1, $/00
Petitioners stress that #hile public respondents upheld the applicability of said supplementary
contract insofar as it increased the benefits to private respondent, public respondents
considered the provision on the #aiver against all claims by private respondent to be contrary to
public policy
'n its ?uestioned decision dated December 8, $/08, the respondent 743C made the follo#ing
dis?uisitionC
"he focal issue for determination is the validity and enforceability of the second
contract of employment entered into by and bet#een complainant and
respondents on board the vessel #here the former had served as a member of
68
its complement despite the absence of 7)B verification or approval With respect
to the findings of facts in the appealed decision, We consider the same as duly
supported by substantial evidence and the admissions of the parties in their
pleadings
Much stress and emphasis are made by the respondents in their appeal that this
claim has no legal basis or footing inasmuch as the second contract of
employment containing a total disability insurance benefit of >) V :&,&&&&&,
much more than that embodied in the first contract of employment #hich #as
approved by the defunct 7)B, #as not verified or approved by the latter
!ccordingly, the respondents posit the argument that sub<ect claim may not
prosper pursuant to the provisions of !rt %,+i- of the 4abor Code, as amended,
#hich provides that it shall be unla#ful for any individual, entity, licensee, or
holder of authority '+"-o substitute or alter employment contracts approved and
verified by the Department of 4abor from the time of actual signing thereof by the
parties up to and including the period of e=piration of the same #ithout the
approval of the Department of 4abor
Did the PO5! commit a reversible error #hen it considered the second contract
of employment as validsans any verification or approval thereof by the 7)BR Our
ans#er to this ?uery is in the negative !pparently, the intention of the la# #hen
!rt %, of the 4abor Code #as enacted is to provide for the prohibited and
unla#ful practices relative to recruitment and placement !s sho#n in the
'5=planatory 7ote' of Parliamentary Bill 7o ,:%$, pertaining to !rt %, +supra-,
thusC
Many of the provisions are already e=isting and #ere simply restated )ome
ho#ever #ere restated #ith modifications and ne# ones #ere introduced to
reflect #hat in the past have been noted to be pernicious practices #hich tend
to "lace ?or-ers at a disadvantage.@
'n this case, the private respondent met the accident on October 1, $/0% )ince then, he #as
hospitali(ed at the )ue( Canal !uthority ;ospital and thereafter be #as repatriated to the
Philippines #herein he #as also hospitali(ed from October .., $/0% to March .8, $/0, 't #as
only on !ugust $/, $/0: that he #as issued a medical certificate describing his disability to be
permanent in nature 't #as not possible for private respondent to file a claim for permanent
disability #ith the insurance company #ithin the one-year period from the time of the in<ury, as
his disability #as ascertained to be permanent only thereafter Petitioners did not e=ert any
effort to assist private respondent to recover payment of his claim from the insurance company
"hey did not even care to dispute the finding of the insurer that the claim #as not flied on
time
%0
Petitioners must, therefore, be held responsible for its omission, if not negligence, by
re?uiring them to pay the claim of private respondent
+SS5&) Whether or not the public respondent commit a grave abuse of discretion in denying
petitioners, motion for leave to file third party complaint and substitution inclusion of party
respondent
H&L*)
69
"he Court finds that the respondent 743C did not commit a grave abuse of discretion in
denying petitioners, motion for leave to file third-party complaint and substitution inclusion of
party respondent )uch motion is largely addressed to the discretion of the said Commission
'nasmuch as the alleged transfer of interest too* place only after the PO5! had rendered its
decision, the denial of the motion so as to avoid further delay in the settlement of the claim of
private respondent #as #ell-ta*en !t any rate, petitioners may pursue their claim against their
alleged successor-in-interest in a separate suit
W;535FO35, the petition is hereby D')M'))5D for lac* of merit and the temporary restraining
order issued by this Court on March .$, $/00 is hereby 4'F"5D 7o costs "his decision is
immediately e=ecutory
70
Man"ela S. CatanDM.S. Catan 8lace/ent (-ency v. 2he NLRC and ,rancisco Reyes
G.R. No. 77179 (pril %:$ %988
8onente) Cortes. !.
F!C")C
Petitioner Catan, a duly licensed recruitment agency, as agent of !li and Fahd
)habo*shi @roup, a )audi !rabian firm recruited private respondent Francisco D 3eyes to #or*
in )audi !rabia "he term of contract is for one +$- year, ho#ever, the contract provided for
automatic rene#al
)aid contract #as automatically rene#ed #hen private respondent #as not repatriated
by hi )audi employer but instead #as assigned to #or* as a crusher plant operator
On March %&, $/0% #hile he #as #or*ing as a crusher plant operator, his an*le #as
crushed under the machine he #as operating
On May $:, $/0% after e=piration of rene#ed term, private respondent returned to the
Philippines ;is an*le #as operated on at the )ta Mesa ;eights Medical Center for #hich he
incurred e=penses
On )eptember /, $/0%, he returned to )audi and resume to his #or* and on May $:,
$/0,, he #as repatriated !nd upon his return, he had an*le treated for #hich he incurred
further e=penses
Private respondent filed a claim against Catan placement agency on the basis of the
provision in the employment contract that the employer shall compensate the employee if he is
in<ured or permanently disabled in the course of employment
PO5! rendered <udgment in favor of the complainant Ordering the respondent placement
agency to pay )5E57 ";O>)!7D 7'75 ;>7D35D 5'@;"A F'E5 and 1&2$&& +P8, /0:1&-,
"W57"A F'E5 ";O>)!7D 7'7"A )'6 .&2$&& +P./, &/1.&- and $&S for attorneyKs fees
On appeal, respondent 743C affirmed the decision of the PO5!
'))>5C
Whether or not the Placement !gency is liable for disability benefits to private
respondent, since the time he #as in<ured his original contract had already e=piredR
;54DC
Aes, Catan Placement !gency is liable for disability benefits to private respondent
Private respondents contract of employment can not be said to have e=pired on May $,, $/0.
as it #as automatically rene#ed since no notice of its termination #as given by either or both
parties at a month before its termination !s stipulated in their contract
M ) Catan !gency #as at the time of complainant's accident resulting in his permanent partial
disability #as +sic- no longer the accredited agent of its foreign principal, foreign respondent
herein, yet its responsibility over the proper implementation of complainant's
employment2service contract and the #elfare of complainant himself in the foreign <ob site, still
e=isted, the contract of employment in ?uestion not having e=pired yet +,is !ust 1e so,
1ecause t,e o1ligations covenanted in t,e recruit!ent agree!ent entered into 1y and 1et?een
t,e local agent and its ;oreign "rinci"al are not coter!inus ?it, t,e ter! o; suc, agree!ent so
t,at i; eit,er or 1ot, o; t,e "arties decide to end t,e agree!ent, t,e res"onsi1ilities o; suc,
"arties to?ards t,e contracted e!"loyees under t,e agree!ent do not at all end, 1ut t,e sa!e
e>tends u" to and until t,e e>"iration o; t,e e!"loy!ent contracts o; t,e e!"loyees recruited
and e!"loyed "ursuant to t,e said recruit!ent agree!ent. )t,er?ise, t,is ?ill render nugatory
t,e very "ur"ose ;or ?,ic, t,e la? governing t,e e!"loy!ent o; ?or-ers ;or ;oreign Ao1s a1road
?as enacted.
71
R4A(L CR4.N +N2&RN(2+4N(L&$ petitioner,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+N and 3+RG+L+4 8. N(C+4N(L&S$ respondents
FactsC
'n $/0%, petitioner, a duly licensed private employment agency, recruited and deployed private
respondent for employment #ith T!M54 as an architectural draftsman in )audi !rabia
On February $%, $/0,, T!M54 terminated the employment of private respondent on the ground
that his performance #as belo# par For three +%- successive days thereafter, he #as detained
at his ?uarters and #as not allo#ed to report to #or* until his e=it papers #ere ready On
February $1, $/0,, he #as made to board a plane bound for the Philippines
Private respondent then filed on !pril .%, $/0, a complaint for illegal termination against
petitioner and T!M54
Based on a finding that petitioner and T!M54 failed to establish that private respondent #as
terminated for <ust and valid cause, the Wor*ers' !ssistance and !d<udication Office of the
PO5! issued a decision ordering the former to pay, <ointly and severally, the complainant
Petitioner 3oyal Cro#n 'nternationale see*s the nullification of a resolution of the 7ational 4abor
3elations Commission +743C- #hich affirmed a decision of the Philippine Overseas
5mployment !dministration +PO5!- holding it liable to pay, <ointly and severally #ith Tamel-
"urbag 5ngineering and !rchitectural Consultant +T!M54-, private respondent Eirgilio P
7acionales' salary and vacation pay corresponding to the une=pired portion of his employment
contract #ith T!M54
'ssueC
' Whether or not petitioner as a private employment agency may be held <ointly
and severally liable #ith the foreign-based employer for any claim #hich may arise in
connection #ith the implementation of the employment contracts of the employees
recruited and deployed abroadD
'' Whether or not sufficient evidence #as presented by petitioner to establish the
termination of private respondent's employment for <ust and valid cause
3ulingC
' 'n applying for its license to operate a private employment agency for overseas
recruitment and placement, petitioner #as re?uired to submit, among others, a
document or verified underta*ing #hereby it assumed all responsibilities for the proper
use of its license and t,e i!"le!entation o; t,e contracts o; e!"loy!ent ?it, t,e
?or-ers it recruited and deployed for overseas employment N)ection .+e-, 3ule E, Boo*
$, 3ules to 'mplement the 4abor Code +$/81-O 't #as also re?uired to file #ith the
Bureau a formal appointment or agency contract e=ecuted by the foreign-based
employer in its favor to recruit and hire personnel for the former, #hich contained a
provision empo#ering it to sue and 1e sued Aointly and solidarily ?it, t,e ;oreign
"rinci"al ;or any o; t,e violations o; t,e recruit!ent agree!ent and t,e contracts o;
e!"loy!ent N)ection $& +a- +.-, 3ule E, Boo* ' of the 3ules to 'mplement the 4abor
Code +$/81-O
72
'' "he 743C upheld the PO5! finding that petitioner's evidence #as insufficient to
prove termination from employment for <ust and valid cause !nd a careful study of the
evidence thus far presented by petitioner reveals to this Court that there is legal basis for
public respondent's conclusion
"he Court holds, therefore, that the 743C committed no grave abuse of discretion amounting to
lac* or e=cess of <urisdiction in upholding the PO5!'s finding of insufficiency of evidence to
prove termination for <ust and valid cause
W;535FO35, the Court 3esolved to D')M')) the instant petition
,acilities Mana-e/ent Corporation$ !.S *reyer and !.3. Cat"ira vs. Leonardo *ela 4sa
73
March .1, $/8/ @3 4-%01,/
Ma*asiar, JC
Facts
4eonardo De 4a Osa sought his reinstatement, #ith full bac*#ages, as #ell as the
recovery of his overtime compensation, s#ing shift and graveyard shift differentials ;e alleged
that he #as employed by Facilities Management as a painter, a houseboy, and a cashier "he
respondents filed their letter-ans#er #ithout substantially denying the material allegations, but
interposed that Facilities Management and 9) Dreyer are domiciled in Wa*e 'sland #hich is
beyond territorial <urisdiction of the Philippine @overnment, and that 9E Catuira, though an
employee of Facilities presently stationed in Manila, is #ithout po#er and authority of legal
representation, and that the employment contract bet#een De 4a Osa and the Facilities carries
the approval of the Department of 4abor of the Philippines
'ssue
's the mere act by a non-resident foreign corporation of recruiting Filipino #or*ers for its
o#n use abroad, in la# doing business in the PhilippinesR !nd #hether or not the respondent
can sue the foreign corporation
;eld
! foreign corporation not doing business in the Philippines can be sued here for acts
done against persons in the Philippines 'f a foreign corporation, not engaged in business in the
Philippines, is not banned from see*ing redress from courts in the Philippines, a fortiori, that
same corporation cannot claim e=emption from being sued in Philippine courts for acts done
against a person or persons in the Philippines
74
8&48L& 4, 2H& 8H+L+88+N&S$ plaintiff-appellee,
vs
,R(NC+SC4 H&RN(N*&? 6at lar-e7$ C(RL R&+CHL$ and A4L(N*( G52+&RR&? *&
R&+CHL$ accused,
C(RL R&+CHL and A4L(N*( G52+&RR&? *& R&+CHL$ accused-appellants
85N4$ J.$
F!C")C
'n !pril $//%, eight +0- informations for syndicated and large scale illegal recruitment and
eight +0- informations for estafa #ere filed against accused-appellants, spouses Iarl and
Aolanda 3eichl, together #ith Francisco ;ernande( Only the 3eichl spouses #ere tried and
convicted by the trial court as Francisco ;ernande( remained at large:B?",i:.nCt
'))>5C
Whether or not the respondents are guilty of illegal recruitment
;54DC
'n the case at bar, the prosecution #as able to prove beyond reasonable doubt that
accused-appellants engaged in activities that fall #ithin the definition of recruitment and
placement under the 4abor Code "he evidence on record sho#s that they promised overseas
employment to private complainants and re?uired them to prepare the necessary documents
and to pay the placement fee, although they did not have any license to do so "here is illegal
recruitment #hen one #ho does not possess the necessary authority or license gives the
impression of having the ability to send a #or*er abroad
!ccused-appellants assert that they merely undertoo* to secure !ustrian visas for
private complainants, #hich act did not constitute illegal recruitment "hey cite the document
mar*ed at 5=hibit G9G stating that they promised to obtain !ustrian tourist visas for private
complainants We are not convinced Private complainants 7arcisa ;ernande(, 4eonora Pere(
and Charito Balmes categorically stated that Iarl and Aolanda 3eichl told them that they #ould
provide them overseas employment and promised them that they #ould be able to leave the
country on a specified date We do not see any reason to doubt the truthfulness of their
testimony "he defense has not sho#n any ill motive for these #itnesses to falsely testify against
accused-appellants if it #ere not true that they met #ith the 3eichl spouses and the latter
represented themselves to have the capacity to secure gainful employment for them abroad
"he minor lapses in the testimony of these #itnesses pointed out by accused-appellants in their
brief do not impair their credibility, especially since they corroborate each other on the material
points, i.e, that they met #ith the three accused several times, that the three accused promised
to give them overseas employment, and that they paid the corresponding placement fee but
#ere not able to leave the country 't has been held that truth-telling #itnesses are not al#ays
e=pected to give error-free testimonies considering the lapse of time and the treachery of
human memory Moreover, it #as sho#n that Iarl 3eichl signed a document mar*ed as 5=hibit
GCG #here he promised to refund the payments given by private complainants for the processing
75
of their papers We are not inclined to believe Mr 3eichl's claim that he #as forced by Francisco
;ernande( to sign said document "here is no sho#ing, #hether in his testimony or in that of his
#ife, that private complainants threatened to harm them if he did not sign the document Mr
3eichl is an educated man and it cannot be said that he did not understand the contents of the
paper he #as signing When he affi=ed his signature thereon, he in effect ac*no#ledged his
obligation to ensure the departure of private complainants and to provide them gainful
employment abroad )uch obligation arose from the promise of overseas placement made by
him and his co-accused to private complainants "he admission made by accused-appellants in
5=hibit G9G that they promised to obtain !ustrian visas for private complainants does not negate
the fact that they also promised to procure for them overseas employment 'n fact, in 5=hibit G9G,
accused-appellants admitted that each of the private complainants paid the amount
of P:&,&&&&& ;o#ever, in 5=hibit GCG, #hich #as e=ecuted on a later date, accused-appellants
promised to refund to each complainant an amount e=ceeding P$:&,&&&&& "his is an
ac*no#ledgment that accused-appellants received payments from the complainants not only for
securing visas but also for their placement abroad
!ccused-appellants' defense of denial and alibi fail to impress us "he acts of recruitment #ere
committed from 9une $//. until 9anuary $//% in Batangas City Iarl 3eichl #as in Manila from
9uly ./, $//. until )eptember $/, $//., and then he returned to the Philippines and stayed in
Batangas from October .$, $//. Aolanda 3eichl, on the other hand, claimed that he #as in
Manila on the dates alleged in the various informations 't is of <udicial notice that Batangas City
is only a fe# hours' drive from Manila "hus, even if the spouses #ere staying in Manila, it does
not prevent them from going to Batangas to engage in their recruitment business Furthermore,
it appears that the three accused #or*ed as a team and they conspired and cooperated #ith
each other in recruiting domestic helpers purportedly to be sent to 'taly Francisco ;ernande(
introduced Iarl and Aolanda 3eichl to the <ob applicants as his business partners Iarl and
Aolanda 3eichl themselves gave assurances to private complainants that they #ould see*
employment for them in 'taly Francisco ;ernande( remitted the payments given by the
applicants to the 3eichl spouses and the latter undertoo* to process the applicants' papers
"here being conspiracy, each of the accused shall be e?ually liable for the acts of his co-
accused even if he himself did not personally ta*e part in its e=ecution
76
G.R. Nos. %#80#%9#> Septe/ber %1$ 1%
2H& 8&48L& 4, 2H& 8H+L+88+N&S$ plaintiff9appellee$
vs.
*+4SC4R( M. (R('+( and ,R(NC+SC( L. 24M(S$ acc"sed9appellants
'))>5C
"his is an appeal from the decision
$
of the 3egional "rial Court of Jue(on City, Branch $&.,
finding accused-appellants Dioscora M !rabia and Francisca 4 "omas both guilty of illegal
recruitment in large scale and sentencing them to each suffer the penalty of life imprisonment
and to each pay a fine of P$&&,&&&&&D and five +:- counts each of estafa for #hich both #ere
sentenced to suffer an indeterminate prison term of one +$- year, eight +0- months and t#enty-
one +.$- days of prision correccional as minimum, to five +:- years, five +:- months and eleven
+$$- days of prision correccional as ma=imum for each of the four counts 'n another count of
estafa, they #ere each sentenced to suffer an indeterminate prison term of t#o +.- years, eleven
+$$- months and eleven +$$ - days of "rision correccional as minimum, to si= +1- years, eight +0-
months and t#enty-one +.$- days of "rision correccional as ma=imum "hey #ere further
ordered to solidarily pay the complainants the follo#ing amounts by #ay of actual damagesC +$-
P%,&&&&& to 3olando 3ustiaD +.- P$1,&&&&& to 7oel de la Cru(D +%- P$1,&&&&& to "eresita
9ulva 4oren(oD +,- P$1,&&&&& to Eioleta ) de la Cru(D and +:- P$1,&&&&& to 3emelyn 7ona
9acinto
!ppellants argued that receipts #ere never presented to prove the allegations against them
;ence this appeal
'))>5C
W;5";53 O3 7O" 4!3@5-)C!45 '445@!4 35C3>'"M57" 56')"
;54DC
4arge-scale illegal recruitment has the follo#ing essential elementsC
+$- "he accused undertoo* NaO recruitment activity defined under !rticle $% +b- or any
prohibited practice under !rt %, of the 4abor Code
+.- ;e did not have the license or the authority to la#fully engage in the recruitment and
placement of #or*ers
+%- ;e committed the same against three or more persons, individually or as a group
0
!rticle $% +b- of the 4abor Code defines recruitment and placement as follo#sC
77
G N!Ony act of canvassing, enlisting, contracting, transporting, utili(ing, hiring or
procuring #or*ers N#hichO includes referrals, contact services, promisNesO or advertising
for employment, locally or abroad, #hether for profit or notC Provided, "hat any person or
entity #hich, in any manner, offers or promises for a fee employment to t#o or more
persons shall be deemed engagement in recruitment and placementG
"here is no doubt as to accused-appellants' guilt for all the essential elements of the crime of
'llegal 3ecruitment in 4arge )cale have been established beyond reasonable doubt !ccused-
appellants recruited at least four persons, giving them the impression that they had the
capability to send them to "ai#an for employment "hey collected various amounts allegedly for
recruitment and placement fees #ithout license or authority to do so 't is settled that Gthe fact
that an accused in an illegal recruitment case did not issue the receipts for amounts received
from the complainants has no bearing on his culpability so long as complainants sho# through
their respective testimonies and affidavits that the accused #as involved in the prohibited
recruitment 't has also been held that Gthe )tatute of Frauds and the rules of evidence do not
re?uire the presentations of receipts in order to prove the e=istence of a recruitment agreement
and the procurement of fees in illegal recruitment cases "he amounts may conse?uently be
proved by the testimony of #itnessesG
78
8eople of the 8hilippines vs. &spanol
Cri/inal Case No. H988 0000
,acts)
'n or about February and !ugust $/00, at Jue(on City, accused 9 5spanol canvassed, enlisted,
contracted and promised employment to $, persons, e=acting a total of P.$,:&&&& as
recruitment fees, #ithout authority or license from the PO5! !ccused introduced himself to the
$, private complainants as one #ho had rich and influential relatives in California, >)! "he
positions promised #ere for a dressma*er, coo*, dish#asher, driver and housemaid, and
accused e=acted payments for processing of travel documents in amounts ranging from P$,&&&
U P%,&&&
On )eptember %, $/00, the birthday of accused, he informed the $, applicants that a certain
!tty Di(on, #ho #as #or*ing for their documents, #ould definitely be coming and #ould advise
them to their departure "he la#yer never appeared "he birthday turned out to be a grand
affair, applicants donating pigs, dogs, goats, and some other items !fter the party, complainants
became apprehensive
On several occasions, complainants tal*ed to the accused, #ho *ept promising that he could
send them abroad When the complainants sensed that they #ere deceived, they demanded
return of their money, but accused failed and started hiding "hey chanced on him and forcibly
too* him to the police station #here they gave their s#orn statements !ccusedKs defense #as
that he did not *no# the applicants e=cept one, that he had no brother or sister in California,
>)! and that the house #here he celebrated his birthday #as o#ned by one de la Pasion,
#ho shouldered all the e=penses
+ss"e)
Whether or not the accused committed illegal recruitment
Held)
"he accused is a dangerous member of society #ho feels happy and comfortable victimi(ing the
poor, innocent and the gullible, of their hard-earned money 5vidence #oven together proves
the pattern for illegal recruitment, hence, mere denial must necessarily fall
*ecision)
"he Court found the accused guilty beyond reasonable doubt of the crime charged and
sentenced him to suffer eight years imprisonment and to pay a fine of P:&,&&& and the costs
"he accused #as li*e#ise ordered to reimburse the amount of P.$,:&&&& to the $, private
complainants listed in the criminal information
79
8eople of the 8hilippine vs. Ro;as$ Cri/inal Case N. 879:1:8#63iolation of (rticle #1 of
8.*. No.001 $as a/ended7
FactsC !ccused FC 3o=as, doing business under the and style of Fc 3o=as Construction,
#ith office address at 3m .$. Manufacturer Building )ta Cru(, Manila #as a licensed private
recruitment entity +service contractor- #hose authority #as issued on February .&, $/0, and
e=pired on march .:, $/00, +a )ervice contractor acts as employer of its recruits #ith respect
to pro<ect it contracted to service abroad-
'ssueC Whether or not the accused is guilty beyond reasonable doubt of violation !rticle %. of
PD ,,. as amended
!s a service contractor, is not allo#ed to charge, directly or indirectly, any fee from the
#or*ers e=cept the authori(ed documentation fee of P$,:&&&&
During the period from 9anuary $/0, to 9uly $/01, the accused FC construction co
demanded and received from its applicants, herein private complainants numbering about ..,
various sums of money ranging from P$,:&&&& in e=cess of the limits set forth by la# "he
complainants, furthermore Were not able to #or* abroad, #ere not issued any travel
documents, and despite efforts, #ere not refunded the money paid to and received by the
accused
"he accused 3o=as did not deny the receipts covering the different sums of money
paid by private complainants ;e resorted out that the amounts paid to and received by him
#ere for pass-porting and tic*eting of the private complainants
3ulingC "he court found the e=cuse of accused to be highly un<ustified and definitely
unconvincing Besides, the accused has <umped bail !nd despite the issuance of a #arrant of
arrest, he has not been apprehended !s a matter of fact, he #as tried in absentia "he
fundamental rule that the plight of the accused is consistent #ith his guilt #as made applicable
in his case
!ccused 3o=as is guilty beyond reasonable doubt of violation of !rticle %. of PD 7o
,,.,as amended and its implanting rules and regulations, as charged in the information and #as
sentenced of suffer a penalty of imprisonment for a period of five years and to pay a fine of fifty
thousand pesos +P:&,&&&&&-
"he accused #as further ordered to refunded to the herein private complainants the
amounts paid by each of them plus legal enters of $.S per annum for the filing of this case until
the above amounts are paid in full, and also to pay the cost of this suit
DecisionC By 9udge 4oren(o B Eeneracion U3"C- 7C93 ,8 Manila !ugust 0, $/0/


80
8eople vs. Re/"llo
G.R. No. %1000# I #>
!. H"is"/bin-
FactsC
Petitioner falsely represented herself as an employee of a recruitment agency to have
the capacity and po#er to contract, enlist and recruit #or*ers for <ob placement abroad, and
#illfully, unla#fully, and feloniously collected fees, and promised employment abroad to multiple
+,- complainants Complainants paid sums of money to accused for the promise of employment
and scheduled flights abroad When complainants had their flights cancelled repeatedly, they
decided to in?uire their status to the recruitment agency allegedly being represented by
accused "here, complainants have been informed that accused #as not anymore an employee
and such role she handled did not authori(e her to recruit #or*ers and moreso accept payment
and other fees
'ssueC
Whether or not accused is guilty of large-scale illegal recruitmentR
;eldC
!ccused is guilty of large-scale illegal recruitment
3atio DecidendiC
"he elements of large scale illegal recruitment are as follo#sC +$- the accused #as
engaged in recruitment activity under !rticle $% b, or any prohibited practice under !rticle %, of
the 4abor CodeD +.- he or she lac*s the re?uisite license or authority to la#fully engage in the
recruitment and placement of #or*ersD and +%- he or she committed such acts against three or
more persons, individually or as a group 'n this case, such elements have been fulfilled in the
case of the accused
81
G.R. No. %#1#7>$ (pril %%$ 118&48L& 4, 2H& 8H+L+88+N&Svs. S(M+N( (NG&L&S
AC(LM(
F!C")C Maria "olosa)ardeBa #as #or*ing in )audi !rabia #hen she received a call from her
sister, Priscilla !goncillo, #ho #as in Paris, France Priscilla advised Maria to return to the
Philippines and a#ait the arrival of her friend, accused-appellant )amina !ngeles, #ho #ill
assist in processing her travel and employment documents to Paris, France
!nalynOlpindo met accused-appellant in Belgium !t that time, !nalyn #as #or*ing in Canada
but she #ent to Belgium to visit her in-la#s !fter meeting accused-appellant, !nalynOlpindo
called up her sister, PrecilaOlpindo, in the Philippines and told her to meet accused-appellant
upon the latterKs arrival in the Philippines because accused-appellant can help process her
documents for employment in Canada
'n both instance accused appellant promised to help process their papers for travel abroad but
never made a promise of employment
!ccused-appellant told PrecilaOlpindo and EilmaBrina that it #as easier to complete the
processing of their papers if they start from 9a*arta, 'ndonesia rather than from Manila
PrecilaOlpindo, EilmaBrina and accused-appellant fle# to 9a*arta, 'ndonesia ;o#ever,
accused-appellant returned to the Philippines after t#o days, leaving behind Precila and Eilma
"hey #aited for accused-appellant in 9a*arta but the latter never returned Precila and Eilma
eventually came home to the Philippines "hey started loo*ing for her but they could not reach
her
'))>5C Whether or not !ngeles is guilty of illegal recruitment
;54DC !ngeles #as ac?uitted for failure of the prosecution to prove illegal recruitment + he #as
ho#ever found guilty of , counts of fraud- since he did not offer any *ind of promise of #or*
only the processing of their travel documents "o prove illegal recruitment, it must be sho#n that
the accused-appellant gave complainants the distinct impression that he had the po#er or ability
to send complainants abroad for #or* such that the latter #ere convinced to part #ith their
money in order to be employed "o be engaged in the practice of recruitment and placement, it
is plain that there must at least be a promise or offer of an employment from the person posing
as a recruiter #hether locally or abroad
82
GR No %>0% !"ne %0$ %99#
8arties)
,(RL& 8. (LM4*+&L$ petitioner$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N 6,+RS2 *+3+S+4N7$ R(A2H&4N 8H+LS.$
+NC.$respondents.
(polinario Lo/abao$ !r. for petitioner.
3icente (. Cr"<$ !r.$ for private respondent.

7ocon, 9
FactsC
Petitioner Farle P !lmodiel is a certified public accountant #ho #as hired in October,
$/08 as Cost !ccounting Manager of respondent 3aytheon Philippines, 'nc through a reputable
placement firm, 9ohn Clements Consultants, 'nc #ith a starting monthly salary of P$0,&&&&&
Before said employment, he #as the accounts e=ecutive of 'ntegrated Microelectronics, 'nc for
several years ;e left his lucrative <ob therein in vie# of the promising career offered by
3aytheon ;e started as a probationary or temporary employee !s Cost !ccounting Manager,
his ma<or duties #ereC +$- plan, coordinate and carry out year and physical inventoryD +.-
formulate and issue out hard copies of )tandard Product costing and other cost2pricing analysis
if needed and re?uired and +%- set up the #ritten Cost !ccounting )ystem for the #hole
company !fter a fe# months, he #as given a regulari(ation increase of P$,1&&&& a month 7ot
long thereafter, his salary #as increased to P.$,1&&&& a month
On !ugust $8, $/00, he recommended and submitted a Cost !ccounting2Finance
3eorgani(ation, affecting the #hole finance group but the same #as disapproved by the
Controller ;o#ever, he #as assured by the Controller that should his position or department
#hich #as apparently a one-man department #ith no staff becomes untenable or unable to
deliver the needed service due to manpo#er constraint, he #ould be given a three +%- year
advance notice
'n the meantime, the standard cost accounting system #as installed and used at the 3aytheon
plants and subsidiaries #orld#ide 't #as li*e#ise adopted and installed in the Philippine
operations !s a conse?uence, the services of a Cost !ccounting Manager allegedly entailed
only the submission of periodic reports that #ould use computeri(ed forms prescribed and
designed by the international head office of the 3aytheon Company in California, >)!
On 9anuary .8, $/0/, petitioner #as summoned by his immediate boss and in the
presence of '3D Manager, Mr 3olando 5strada, he #as told of the abolition of his position on
the ground of redundancy ;e pleaded #ith management to defer its action or transfer him to
another department, but he #as told that the decision of management #as final and that the
same has been conveyed to the Department of 4abor and 5mployment "hus, he #as
constrained to file the complaint for illegal dismissal before the !rbitration Branch of the 7ational
Capital 3egion, 743C, Department of 4abor and 5mployment
'ssuesC
Whether the public respondent committed grave abuse of discretion amounting to +lac* of- or in
e=cess of <urisdiction in declaring as valid and <ustified the termination of petitioner on the
ground of redundancy in the face of clearly established finding that petitioner's termination #as
tainted #ith malice, bad faith and irregularity
Petitioner claims that the functions of his position #ere absorbed by the Payroll2Mis2Finance
Department under the management of Danny !ng "an Chai, a resident alien #ithout any
83
#or*ing permit from the Department of 4abor and 5mployment as re?uired by la# thus raising
the issue #hether bad faith, malice and irregularity crept in the abolition of petitioner's position
of Cost !ccounting Manager on the ground of redundancy
;eldC
Petitioner held a position #hich #as definitely managerial in character, 3aytheon had a broad
latitude of discretion in abolishing his position !n employer has a much #ider discretion in
terminating employment relationship of managerial personnel compared to ran* and file
employees "he reason obviously is that officers in such *ey positions perform not only
functions #hich by nature re?uire the employer's full trust and confidence but also functions that
spell the success or failure of an enterprise
"ermination of an employee's services because of redundancy is governed by !rticle .0% of the
4abor Code #hich provides as follo#sC
!rt .0% Closure of establishment and reduction of personnel H "he employer may
also terminate the employment of any employee due to installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or underta*ing unless the closing is for the purpose of
circumventing the provisions of this "itle, by serving a #ritten notice on the #or*er and
the Department of 4abor and 5mployment at least one +$- month before the intended
date thereof 'n case of termination due to installation of labor-saving devices or
redundancy, the #or*er affected thereby shall be entitled to a separation pay e?uivalent
to at least one +$- month pay for every year of service, #hichever is higher 'n case of
retrenchment to prevent losses and in cases of closure or cessation of operations of
establishment or underta*ing not due to serious business losses or financial reverses,
the separation pay shall be e?uivalent to at least one +$- month pay or at least one-half
+$2.- month pay for every year of service, #hichever is higher ! fraction of at least si=
+1- months shall be considered as one +$- #hole year
"here is no dispute that petitioner #as duly advised, one +$- month before, of the
termination of his employment on the ground of redundancy in a #ritten notice by his immediate
superior, Mrs Magdalena BD 4ope( sometime in the afternoon of 9anuary .8, $/0/ ;e #as
issued a chec* for P:,,01%&& representing separation pay but in vie# of his refusal to
ac*no#ledge the notice and the chec*, they #ere sent to him thru registered mail on 9anuary
%&, $/0/ "he Department of 4abor and 5mployment #as served a copy of the notice of
termination of petitioner in accordance #ith the pertinent provisions of the 4abor Code and the
implementing rules
Petitioner relies on the testimony of 3aytheon's #itness to the effect that corollary
functions appertaining to cost accounting #ere dispersed to other units in the Finance
Department !nd granting that his department has to be declared redundant, he claims that he
should have been the Manager of the Payroll2Mis2Finance Department #hich handled general
accounting, payroll and encoding !s a B ) !ccounting graduate, a CP! #ith MB! units, .$
years of #or* e=perience, and a natural born Filipino, he claims that he is better ?ualified than
!ng "an Chai, a B) 'ndustrial 5ngineer, hired merely as a )ystems !nalyst Programmer or its
e?uivalent in early $/08, promoted as M') Manager only during the middle part of $/00 and a
resident alien
3aytheon insists that petitioner's functions as Cost !ccounting Manager had not been absorbed
by !ng "an Chai, a permanent resident born in this country 't claims to have established belo#
that !ng "an Chai did not displace petitioner or absorb his functions and duties as they #ere
84
occupying entirely different and distinct positions re?uiring different sets of e=pertise or
?ualifications and discharging functions altogether different and foreign from that of petitioner's
abolished position
!n ob<ection founded on the ground that one has better credentials over the appointee is
fro#ned upon so long as the latter possesses the minimum ?ualifications for the position 'n the
case at bar, since petitioner does not allege that !ng "an Chai does not ?ualify for the position,
the Court cannot substitute its discretion and <udgment for that #hich is clearly and e=clusively
management prerogative "o do so #ould ta*e a#ay from the employer #hat rightly belongs to
him as aptly e=plained in 7ational Federation of 4abor >nions v 743C
DecisionC
Finding no grave abuse of discretion on the part of the 7ational 4abor 3elations Commission in
reversing and annulling the decision of the 4abor !rbiter and that on the contrary, the
termination of petitioner's employment #as anchored on a valid and authori(ed cause under
!rticle .0% of the 4abor Code, the instant petition for certiorari must fail
85
General Millin- Corporation vs. 2orres
G.R No. 9#>>$ (pril 11$ %99%
,(C2S)
5arl "imothy Cone is a >) citi(en, #ho #as hired by @eneral Milling as a sports
consultant and assistant coach ;e possessed an alien employment permit #hich #as changed
to pre-arranged employee by the Board of )pecial 'n?uiry of the Commission on 'mmigration
and Deportation @MC re?uested that ConeKs employment permit be changed to a full-fledged
coach, #hich #as contested by "he Bas*etball Coaches !ssociation of the Philippines !lleging
that @MC failed to sho# that there is no competent person in the Philippines to do the coaching
<ob )ecretary of 4abor cancelled ConeKs employment permit
+SS5&)
Whether or not the )ecretary of 4abor act #ith grave abuse of discretion in revo*ing
ConeKs !lien 5mployment PermitR
H&L*)
"he )ecretary of 4abor did not act #ith grave abuse of discretion in revo*ing ConeKs
!lien 5mployment Permit @MCKs claim that hiring of a foreign coach is an employerKs
prerogative has no legal basis >nder )ection ,& of the 4abor Code, an employer see*ing
employment of an alien must first obtain an employment permit from the Department of labor
@MCKs right to choose #hom to employ is limited by the statutory re?uirement of an
employment permit
"he 4abor Code empo#ers the 4abor )ecretary to determine as to the availability of the
services of a Lperson in the Philippines #ho is competent, able and #illing at the time of the
application to perform the services for #hich an alien is desiredM
86
N+224 &N2&R8R+S&S$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N and R4'&R24 C(8+L+$
G.R. No. %%0##7 Septe/ber 19$ %99:
,(C2S)
Petitioner 7itto 5nterprises, a company engaged in the sale of glass and aluminum products,
hired 3oberto Capili sometime in May $//& as an apprentice machinist, molder and core ma*er
as evidenced by an apprenticeship agreement for a period of si= +1- months from May .0, $//&
to 7ovember .0, $//& #ith a daily #age rate of P118: #hich #as 8:S of the applicable
minimum #age
!t around $C&& pm of !ugust ., $//&, 3oberto Capili #ho #as handling a piece of glass #hich
he #as #or*ing on, accidentally hit and in<ured the leg of an office secretary #ho #as treated at
a nearby hospital
4ater that same day, after office hours, private respondent entered a #or*shop #ithin the office
premises #hich #as not his #or* station "here, he operated one of the po#er press machines
#ithout authority and in the process in<ured his left thumb Petitioner spent the amount of
P$,&.%&, to cover the medication of private respondent On !ugust %, $//& private respondent
e=ecuted a Juitclaim and 3elease in favor of petitioner for and in consideration of the sum of
P$,/$.8/

"hree days after, or on !ugust 1, $//&, private respondent formally filed before the
743C !rbitration Branch, 7ational Capital 3egion a complaint for illegal dismissal and payment
of other monetary benefits On October /, $//$, the 4abor !rbiter rendered his decision finding
the termination of private respondent as valid and dismissing the money claim for lac* of merit
4abor !rbiter Patricio P 4ibo-on gave t#o reasons for ruling that the dismissal of 3oberto
Capilian #as valid First, private respondent #ho #as hired as an apprentice violated the terms
of their agreement #hen he acted #ith gross negligence resulting in the in<ury not only to
himself but also to his fello# #or*er )econd, private respondent had sho#n that Ghe does not
have the proper attitude in employment particularly the handling of machines #ithout authority
and proper training

On 9uly .1, $//%, the 743C issued an order reversing the decision of the 4abor !rbiter the
appealed decision is hereby set aside "he respondent is hereby directed to reinstate
complainant to his #or* last performed #ith bac*#ages computed from the time his #ages #ere
#ithheld up to the time he is actually reinstated "he !rbiter of origin is hereby directed to further
hear complainant's money claims and to dispose them on the basis of la# and evidence
obtaining
On 9anuary .0, $//,, 4abor !rbiter 4ibo-on called for a conference at #hich only private
respondent's representative #as present
On !pril .., $//,, a Writ of 5=ecution #as issued, finding merit in Nprivate respondent'sO Motion
for 'ssuance of the Writ, "he private respondent is being commanded to proceed to the
premises of NpetitionerO 7itto 5nterprises and 9ovy Foster located at 7o l 8, !raneta !venue,
Portero, Malabon, Metro Manila or at any other places #here their properties are located and
87
effect the reinstatement of herein Nprivate respondentO to his #or* last performed or at the option
of the respondent by payroll reinstatement
;e is also entitled to collect the amount of P$..,1/&0: representing his bac*#ages as called
for in the dispositive portion, and turn over such amount to this Office for proper
dispositionPetitioner filed a motion for reconsideration but the same #as denied
+SS5&)
$ W;5";53 O3 7O" P>B4'C 35)PO7D57" 743C COMM'""5D @3!E5 !B>)5 OF
D')C35"'O7 '7 ;O4D'7@ ";!" P3'E!"5 35)PO7D57" W!) 7O" !7
!PP357"'C5
. W;5";53 O3 7O" P>B4'C 35)PO7D57" 743C COMM'""5D @3!E5 !B>)5 OF
D')C35"'O7 '7 ;O4D'7@ ";!" P5"'"'O753 ;!D 7O" !D5J>!"54A P3OE57
";5 56')"57C5 OF ! E!4'D C!>)5 '7 "53M'7!"'7@ ";5 )53E'C5 OF P3'E!"5
35)PO7D57"
H&L*)
"here is an abundance of cases #herein the Court ruled that the t#in re?uirements of due
process, substantive and procedural, must be complied #ith, before valid dismissal
e=ists Without #hich, the dismissal becomes void
"he fact is private respondent filed a case of illegal dismissal #ith the 4abor !rbiter only three
days after he #as made to sign a Juitclaim, a clear indication that such resignation #as not
voluntary and deliberate
Private respondent averred that he #as actually employed by petitioner as a delivery boy
+G*argadorG or GpahinanteG-
;e further asserted that petitioner Gstrong-armedG him into signing the aforementioned
resignation letter and ?uitclaim #ithout e=plaining to him the contents thereof Petitioner made it
clear to him that any#ay, he did not have a choice
Petitioner cannot disguise the summary dismissal of private respondent by orchestrating the
latter's alleged resignation and subse?uent e=ecution of a Juitclaim and 3elease ! <udicious
e=amination of both events belies any spontaneity on private respondent's part
"he court finds no abuse of discretion committed by public respondent 7ational 4abor 3elations
Commission, the appealed decision is hereby !FF'3M5D
88
,+L(M&R CHR+S2+(N +NS2+252& v. +(C
G.R. No. 7:%%1 ("-"st %7$ %991
8onente) G52+&RR&?$ !R.$ J
,(C2S)
Funtecha is a part time <anitor and student, #hile !llan Masa is a driver Both employed
in Filamer Christian 'nstitute Funtecha having a student driverKs license re?uested !llan, and
#as allo#ed to ta*e over the vehicle #hile the latter in on his #ay home 7egotiating a sharp
dangerous curb, a fast moving truc* #ith glaring lights nearly hit them so that they have to
s#erve to the right to avoid the collision !s a result, Potenciano Iapunan #ho #as #al*ing in
his lane #as hit by the vehicle driven by Funtecha Iapunan died on the said accident "he
heirs of Iapunan instituted an action for damages "he lo#er court rendered <udgment in favor
of the heirs of Potenciano, ordering Filamer liable for the acts of Funtecha as their employee
"he 'ntermediate !ppellate Court affirmed the decision of the lo#er court
+SS5&)
Whether or not there e=ists an employer-employee relationship bet#een Funtecha #ho
#as a part time 9anitor of FilamerR
R5L+NG)
"he )upreme Court held that there e=ist an employer-employee relationship bet#een
Funtecha #ho #as a part time 9anitor of Filamer "he Fact that Funtecha #as not the school
driver or #as acting #ithin the scope of his <anitorial duties does not relieve the petitioner of the
burden of rebutting the presumption Juris tantu! that there #as negligence on its part either in
the selection of a servant or employee, or in the supervision over him
89
J'rotherhoodK Labor 5nity Move/ent of the 8hilippines vs. ?a/ora
G.R. No. 08>0:$ !an. 7$ %987
FactsC
Petitioners have been reporting as loaders for )an Miguel Parola @lass Factory under the
supervision of a certain Camahort 9ob orders for #or* came from Camahort and petitioners
#ere also supplied #ith tools and other e?uipment for the fulfillment of their duties With the <ob
orders being dependent on the volume of production of the factory, #or* #as not necessarily 0
hours but at times petitioners #ould be as*ed to #or* more than 0 hours and at times also on
)aturdays and )undays "hey #ere not paid for their overtime and rendered #or* during
)aturdays and )undays
Petitioners organi(ed and held union activities to push management to pay for their
overtime and holiday compensation as #ell as other grievances )ome members #ere then
dismissed from #or* due to their membership #ith the union Due to this, Petitioners filed a
notice of stri*e on the Bureau of 4abor 3elations and a meeting #as held bet#een the parties
#herein petitioners gave proposals for recognition and collective bargaining
)an Miguel refused to bargain #ith petitioners alleging that there #as no employer U
employee relationship
"he 743C heard the dispute and the arbiter decided in favor of the Petitioners to receive
one year salary >pon appeal of )MC, the )ecretary stressed upon the decision that there #as
no employer U employee relationship
"hus the appeal of the petitoners
'ssueC
Whether or not the employer U employee relationship e=ists bet#een the LBrotherhoodM
4abor >nion Movement and )an Miguel CorporationR
3ulingC
"he petition is granted )MC #as ordered to reinstate petitioners, #ith three +%- years
bac*#ages ;o#ever, if reinstatement is no longer possible, )MC is ordered to pay separation
pay e?uivalent to one +$- month pay for every year of service
3atioC
"he ?uestion of #hether an employer U employee relationship e=ists in a certain
situation continues to bedevil the courts )ome businessmen try to avoid the bringing about of
an employer U employee relationship in their enterprises because that <udicial relation spa#ns
obligations connected #ith #or*menKs compensation, social security, medicare, termination pay,
and unionism
90
2abas$ et.$ al$ vs. California Man"fact"rin- Co/pany +nc.$ et.$ al.
G.R. No. L98>8 !an"ary 1>$ %989
S&C4N* *+3+S+4N$ S(RM+&N24$ J.$
,acts)
On 9uly .$, .%, and .0, $/01, the petitioners petitioned the 743C for reinstatement and
payment of various benefits, including minimum #age, overtime pay, holiday pay, thirteen-month
pay, and emergency cost of living allo#ance pay, against the respondent
On October 8, $/01, after the cases had been consolidated, the respondent filed a motion to
dismiss as #ell as a position paper denying the e=istence of an employer-employee relation
bet#een the petitioners and the respondents and, conse?uently, any liability for payment of
money claims
't appears that the petitioners #ere, prior to their stint #ith respondents, employees of 4ivi,
#hich subse?uently assigned them to #or* as Gpromotional merchandisersG
%
for the former firm
pursuant to a manpo#er supply agreement "he petitioners #ere made to sign employment
contracts #ith durations of si= months, upon the e=piration of #hich they signed ne#
agreements #ith the same period, and so on "he petitioners no# allege that they had become
regular California employees and demand, as a conse?uence #hereof, similar benefits "hey
li*e#ise claim that pending further proceedings belo#, they #ere notified by California that they
#ould not be rehired !s a result, they filed an amended complaint charging California #ith
illegal dismissal
California admits having refused to accept the petitioners bac* to #or* but deny liability therefor
for the reason that it is not, to begin #ith, the petitioners' employer and that the GretrenchmentG
had been forced by business losses as #ell as e=piration of contracts
/

+ss"e)
Whether there e=ist an employer-employee relation bet#een the petitioners and the
respondents based on the manpo#er supply contract agreement bet#een repondent California
and 4ivi
Held)
"he e=istence of an employer-employees relation is a ?uestion of la# and being such, it cannot
be made the sub<ect of agreement ;ence, the fact that the manpo#er supply agreement
bet#een 4ivi and California had specifically designated the former as the petitioners' employer
and had absolved the latter from any liability as an employer, #ill not erase either party's
obligations as an employer, if an employer-employee relation other#ise e=ists bet#een the
#or*ers and either firm !t any rate, since the agreement #as bet#een 4ivi and California, they
alone are bound by it, and the petitioners cannot be made to suffer from its adverse
conse?uences
"his Court has consistently ruled that the determination of #hether or not there is an employer-
employee relation depends upon four standardsC
91
+$- the manner of selection and engagement of the putative employeeD
+.- the mode of payment of #agesD
+%- the presence or absence of a po#er of dismissalD and
+,- the presence or absence of a po#er to control the putative employee's conduct
$,

Of the four, the right-of-control test has been held to be the decisive factor
$:

"he Court need not therefore consider #hether it is 4ivi or California #hich e=ercises control
over the petitioner vis-a-vis the four barometers referred to earlier, since by fiction of la#, either
or both shoulder responsibility
"he records sho# that the petitioners bad been given an initial si=-month contract, rene#ed for
another si= months !ccordingly, under !rticle .0$ of the Code, they had become regular
employees-of-California-and had ac?uired a secure tenure ;ence, they cannot be separated
#ithout due process of la#
*ecision)
W;535FO35, the petition is @3!7"5D 9udgment is hereby 357D535DC +$-C )5""'7@
!)'D5 the decision, dated March .&, $/08, and the resolution, dated !ugust $/, $/08D +.-
O3D53'7@ the respondent, the California Manufacturing Company, to 35'7)"!"5 the
petitioners #ith full status and rights of regular employeesD and +%- O3D53'7@ the respondent,
the California Manufacturing Company, and the respondents, 4ivi Manpo#er )ervice, 'nc
and2or 4ily-Eictoria !(arcon, to P!A, <ointly and severally, unto the petitionersC +a- bac*#ages
and differential pays effective as and from the time they had ac?uired a regular status under the
second paragraph, of )ection .0$, of the 4abor Code, but not to e=ceed three +%- years, and +b-
all such other and further benefits as may be provided by e=isting collective bargaining
agreement+s- or other relations, or by la#, beginning such timeD and +,- O3D53'7@ the private
respondents to P!A unto the petitioners attorney's fees e?uivalent to ten +$&S- percent of all
money claims hereby a#arded, in addition to those money claims "he private respondents are
li*e#ise O3D535D to P!A the costs of this suit
92
G.R. No. L90%%819# (pril %>$ %988
*R. C(RL4S L. S&3+LL( and L+N( 4. S&3+LL($ petitioners9appellants$
vs.
2H& C45R2 4, (88&(LS$ 245R+S2 .4RL* S&R3+C&$ +NC.$ &L+S&4 S.C(N+L(4$ and
S&G5N*+N( N4G5&R($ respondents9appellees.
On the strength of a contract +5=hibit ! for the appellant 5=hibit . for the appellees- entered into
on Oct $/, $/1& by and bet#een Mrs )egundina 7oguera, party of the first partD the "ourist
World )ervice, 'nc, represented by Mr 5liseo Canilao as party of the second part, and
hereinafter referred to as appellants, the "ourist World )ervice, 'nc leased the premises
belonging to the party of the first part at Mabini )t, Manila for the former-s use as a branch
office 'n the said contract the party of the third part held herself solidarily liable #ith the party of
the part for the prompt payment of the monthly rental agreed on When the branch office #as
opened, the same #as run by the herein appellant >na & )evilla payable to "ourist World
)ervice 'nc by any airline for any fare brought in on the efforts of Mrs 4ina )evilla, ,S #as to
go to 4ina )evilla and %S #as to be #ithheld by the "ourist World )ervice, 'nc
On or about 7ovember .,, $/1$ +5=hibit $1- the "ourist World )ervice, 'nc appears to have
been informed that 4ina )evilla #as connected #ith a rival firm, the Philippine "ravel Bureau,
and, since the branch office #as anyho# losing, the "ourist World )ervice considered closing
do#n its office "his #as firmed up by t#o resolutions of the board of directors of "ourist World
)ervice, 'nc dated Dec ., $/1$ +5=hibits $. and $%-, the first abolishing the office of the
manager and vice-president of the "ourist World )ervice, 'nc, 5rmita Branch, and the
second,authori(ing the corporate secretary to receive the properties of the "ourist World )ervice
then located at the said branch office 't further appears that on 9an %, $/1., the contract #ith
the appellees for the use of the Branch Office premises #as terminated and #hile the effectivity
thereof #as 9an %$, $/1., the appellees no longer used it !s a matter of fact appellants used it
since 7ov $/1$ Because of this, and to comply #ith the mandate of the "ourist World )ervice,
the corporate secretary @abino Canilao #ent over to the branch office, and, finding the
premises loc*ed, and, being unable to contact 4ina )evilla, he padloc*ed the premises on 9une
,, $/1. to protect the interests of the "ourist World )ervice When neither the appellant 4ina
)evilla nor any of her employees could enter the loc*ed premises, a complaint #all filed by the
herein appellants against the appellees #ith a prayer for the issuance of mandatory preliminary
in<unction Both appellees ans#ered #ith counterclaims For apparent lac* of interest of the
parties therein, the trial court ordered the dismissal of the case #ithout pre<udice "rial court
ruled in favor of the respondent, hence this petition
'))>5C
W;5";53 O3 7O" ";535 ') !7 5MP4OA53-5MP4OA55 354!"'O7);'P 56')"
7o, there #as no employer-employee relationship "he records #ill sho# that the petitioner,
4ina )evilla, #as not sub<ect to control by the private respondent "ourist World )ervice, 'nc,
either as to the result of the enterprise or as to the means used in connection there#ith 'n the
first place, under the contract of lease covering the "ourist Worlds 5rmita office, she had bound
herself in solidu! as and for rental payments, an arrangement that #ould be li*e claims of a
93
master-servant relationship "rue the respondent Court #ould later minimi(e her participation in
the lease as one of mere guaranty, that does not ma*e her an employee of "ourist World, since
in any case, a true employee cannot be made to part #ith his o#n money in pursuance of his
employer's business, or other#ise, assume any liability thereof 'n that event, the parties must
be bound by some other relation, but certainly not employment
94
G.R. No. L90#81: May 9$ %988
C4N2+N&N2(L M(R'L& C4R8. and ,&L+8& *(3+*$ petitioner$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N 6NLRC7L (R'+2R(24R !4S& 2. C4LL(*4
and R4*+24 N(S(A(4$ respondents.
'enito 8. ,abie for petitioners.
Narciso C. 8arayno$ !r. for respondents.

P!D'44!, 9C
FactsC
On $0 March $/81, 3odito 7asayao filed a motion to dismiss the appeal on the ground that the
decision of the voluntary arbitrator is final, unappealable, and immediately e=ecutoryD % and, on
.% March $/81, he filed a motion for the issuance of a #rit of e=ecution ,
!cting on the motions, the respondent Commission, in a resolution dated 8 May $/81,
dismissed the appeal on the ground that the decision appealed from is final, unappealable and
immediately e=ecutory, and ordered the herein petitioners to comply #ith the decision of the
voluntary arbitrator #ithin $& days from receipt of the resolution :
"he petitioners are before the Court in the present recourse !s prayed for, the Court issued a
temporary restraining order, restraining herein respondents from enforcing and2or carrying out
the ?uestioned decision and resolution 1
'ssueC
for resolution is #hether or not the private respondent 3odito 7asayao #as employed as plant
manager of petitioner Continental Marble Corporation #ith a monthly salary of P%,&&&&& or
.:S of its monthly income, #hichever is greater, as claimed by said respondent, or entitled to
receive only an amount e?uivalent to .:S of net profits, if any, that the company #ould reali(e,
as contended by the petitioners
"he respondent arbitrator found that the agreement bet#een the parties #as for the petitioner
company to pay the private respondent, 3odito 7asayao, a monthly salary of P%,&&&&&, and,
conse?uently, ordered the company to pay 3odito 7asayao the amount of P/,&&&&& covering a
period of three +%- months, that is, May, 9une and 9uly $/8,
"he petitioners, upon the other hand, maintain that G#here there is patent and manifest abuse of
discretion, the rule on unappealability of a#ards of a voluntary arbitrator becomes fle=ible and it
is the inherent po#er of the Courts to maintain the people's faith in the administration of <usticeG
"he ?uestion of the finality and unappealability of a decision and2or a#ard of a voluntary
arbitrator had been laid to rest in Oceanic Bic Division +FFW- vs 3omero, 8 and reiterated in
Mantrade FMMC Division 5mployees and Wor*ers >nion vs Bacungan 0 "he Court therein
ruled that it can revie# the decisions of voluntary arbitrators, thus-
95
We agree #ith the petitioner that the decisions of voluntary arbitrators must be given the highest
respect and as a general rule must be accorded a certain measure of finality "his is especially
true #here the arbitrator chosen by the parties en<oys the first rate credentials of Professor
Flerida 3uth Pineda 3omero, Director of the >P 4a# Center and an academician of
un?uestioned e=pertise in the field of 4abor 4a# 't is not correct, ho#ever, that this respect
precludes the e=ercise of <udicial revie# over their decisions !rticle .1. of the 4abor Code
ma*ing voluntary arbitration a#ards final, inappealable, and e=ecutory e=cept #here the money
claims e=ceed P l &&,&&&&& or ,&S of paid-up capital of the employer or #here there is abuse
of discretion or gross incompetence refers to appeals to the 7ational 4abor 3elations
Commission and not to <udicial revie#
'nspite of statutory provisions ma*ing 'final' the decisions of certain administrative agencies, #e
have ta*en cogni(ance of petitions ?uestioning these decisions #here #ant of <urisdiction, grave
abuse of discretion, violation of due process, denial of substantial <ustice, or erroneous
interpretation of the la# #ere brought to our attention "here is no provision for appeal in the
statute creating the )andiganbayan but this has not precluded us from e=amining decisions of
this special court brought to us in proper petitions
While the Court has accorded great respect for, and finality to, findings of fact of a voluntary
arbitrator $$ and administrative agencies #hich have ac?uired e=pertise in their respective
fields, li*e the 4abor Department and the 7ational 4abor 3elations Commission, $. their
findings of fact and the conclusions dra#n therefrom have to be supported by substantial
evidence ln that instant case, the finding of the voluntary arbitrator that 3odito 7asayao #as an
employee of the petitioner corporation is not supported by the evidence or by the la#
'n determining the e=istence of an employer-employee relationship, the elements that are
generally considered are the follo#ingC +a- the selection and engagement of the employeeD +b-
the payment of #agesD +c- the po#er of dismissalD and +d- the employer's po#er to control the
employee #ith respect to the means and methods by #hich the #or* is to be accomplished 't is
the so-called Gcontrol testG that is the most important element +'nvestment Planning Corp of the
Phils vs "he )ocial )ecurity )ystem, .$ )C3! /.,D Mafinco "rading Corp v Ople, supra, and
3osario Brothers, 'nc v Ople, $%$ )C3! 8.-
!bsent the po#er to control the employee #ith respect to the means and methods by #hich his
#or* #as to be accomplished, there #as no employer-employee relationship bet#een the
parties ;ence, there is no basis for an a#ard of unpaid salaries or #ages to 3odito 7asayao
W;535FO35, the decision rendered by the respondent 9ose " Collado in 743C Case 7o 43-
1$:$, entitledC G3odito 7asayao, complainant, versus Continental Marble Corp and Felipe
David, respondents,G on ./ December $/8:, and the resolution issued by the respondent
7ational 4abor 3elations Commission in said case on 8 May $/81, are 35E53)5D and )5"
!)'D5 and another one entered D')M'))'7@ private respondent's complaints "he temporary
restraning order heretofore isued by the Court is made permanent Without costs
96
*y Ceh 'en- vs. +nternational Labor and Marine 5nion et. (l.
L9#110:$ May 1:$ %979
,(C2S)
! charge of unfair labor practice #as filed against Dy Ieh Beng, proprietor of a bas*et factory,
for discriminatory acts #ithin the meaning of )ection ,+a-, sub-paragraph +$- and +,- 3epublic
!ct 7o 08:,
#
by dismissing on )eptember .0 and ./, $/1&, respectively, Carlos 7 )olano and
3icardo "udla for their union activities !fter preliminary investigation #as conducted, a case
#as filed in the Court of 'ndustrial 3elations for in behalf of the 'nternational 4abor and Marine
>nion of the Philippines and t#o of its members, )olano and "udla 'n his ans#er, Dy Ieh Beng
contended that he did not *no# "udla and that )olano #as not his employee because the latter
came to the establishment only #hen there #as #or* #hich he did on "a-ia? basis, each piece
of #or* being done under a separate contract Moreover, Dy Ieh Beng countered #ith a special
defense of simple e=tortion committed by the head of the labor union, Bienvenido Onayan
!fter trial, the ;earing 5=aminer prepared a report #hich #as subse?uently adopted in toto by
the Court of 'ndustrial 3elations !n employee-employer relationship #as found to have e=isted
bet#een Dy Ieh Beng and complainants "udla and )olano, although )olano #as admitted to
have #or*ed on piece basis
!ccording to the ;earing 5=aminer, the evidence for the complainant >nion tended to sho# that
)olano and "udla became employees of Dy Ieh Beng from May ., $/:% and 9uly $:, $/::,
:
respectively, and that e=cept in the event of illness, their #or* #ith the establishment #as
continuous although their services #ere compensated on piece basis 5vidence li*e#ise
sho#ed that at times the establishment had eight +0- #or*ers and never less than five +:-D
including the complainants, and that complainants used to receive P:&& a day sometimes less
!ccording to Dy Ieh Beng, ho#ever, )olano #as not his employee for the follo#ing reasonsC
+$- )olano never stayed long enought at Dy's establishmentD
+.- )olano had to leave as soon as he #as through #ith the order given him by DyD
+%- When there #ere no orders needing his services there #as nothing for him to doD
+,- When orders came to the shop that his regular #or*ers could not fill it #as then that
Dy #ent to his address in Caloocan and fetched him for these ordersD and
+:- )olano's #or* #ith Dy's establishment #as not continuous ,
!ccording to petitioner, these facts sho# that respondents )olano and "udla are only piece
#or*ers, not employees under 3epublic !ct 08:, #here an employee
8
is referred to as shall
include any employee and shag not be limited to the employee of a particular employer unless
the !ct e=plicitly states other#ise and shall include any individual #hose #or* has ceased as a
conse?uence of, or in connection #ith any current labor dispute or because of any unfair labor
practice and #ho has not obtained any other substantially e?uivalent and regular employment
97
#hile an employer includes any person acting in the interest of an employer, directly or indirectly
but shall not include any labor organi(ation +other#ise than #hen acting as an employer- or
anyone acting in the capacity of officer or agent of such labor organi(ation
Petitioner really anchors his contention of the non-e=istence of employee-employer relationship
on the control test ;e points to the case of 'adrigal (,i""ing Co., nc. v. Nieves Baens del
Rosario, et al., 4-$%$%&, October %$, $/:/, #here the Court ruled thatC
"he test of the e=istence of employee and employer relationship is #hether there is an
understanding bet#een the parties that one is to render personal services to or for the benefit of
the other and recognition by them of the right of one to order and control the other in the
performance of the #or* and to direct the manner and method of its performance
+SS5&)

$ Whether there e=isted an employee employer relation bet#een petitioner Dy Ieh Beng
and the respondents )olano and "udla
R5L+NG)
While this Court upholds the control test under #hich an employer-employee relationship e=ists
G#here the person for #hom the services are performed reserves a right to control not only the
end to be achieved but also the means to be used in reaching such end, G it finds no merit #ith
petitioner's arguments as stated above 't should be borne in mind that the control test calls
merely for the e=istence of the right to control the manner of doing the #or*, not the actual
e=ercise of the right Considering the finding by the ;earing 5=aminer that the establishment of
Dy Ieh Beng is Gengaged in the manufacture of bas*ets *no#n as -aing, it is natural to e=pect
that those #or*ing under Dy #ould have to observe, among others, Dy's re?uirements of si(e
and ?uality of the -aing )ome control #ould necessarily be e=ercised by Dy as the ma*ing of
the -aing #ould be sub<ect to Dy's specifications Parenthetically, since the #or* on the bas*ets
is done at Dy's establishments, it can be inferred that the proprietor Dy could easily e=ercise
control on the men he employed
7evertheless, considering that about eighteen +$0- years have already elapsed from the time
the complainants #ere dismissed, and that the decision being appealed ordered the payment of
bac*#ages to the employees from their respective dates of dismissal until finally reinstated, it is
fitting to apply in this connection the formula for bac*#ages #or*ed out by 9ustice Claudio
"eehan*ee in Gcases not terminated soonerG "he formula cans for fi=ing the a#ard of
bac*#ages #ithout ?ualification and deduction to three years, Gsub<ect to deduction #here there
are mitigating circumstances in favor of the employer but sub<ect to increase by #ay of
e=emplary damages #here there are aggravating circumstances Considering there are no such
circumstances in this case, there is no reason #hy the Court should not apply the
abovementioned formula in this instance
W;535FO35D the a#ard of bac*#ages granted by the Court of 'ndustrial 3elations is herein
modified to an a#ard of bac*#ages for three years #ithout ?ualification and deduction at the
respective rates of compensation the employees concerned #ere receiving at the time of
dismissal "he e=ecution of this a#ard is entrusted to the 7ational 4abor 3elations Commission
Costs against petitioner
98
GR No %>>: ,ebr"ary %#$ %99:
8arties)
?(N422& SH4&SDL&4N(R*4 L4R&N?4$ petitioners$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$ H4N. '&N+GN4 C. 3+LL(R&N2&$ !R.$
!4S&8H LL5?$ L4L+24 LL5?$ N4&L (*(R(A(N$ R4G&L+4 S+R($ 3+RG+N+( H&R&S(N4$
G&N&L+24 H&R&S(N4 and C(RM&L+2( *& *+4S$ respondents.
Eitug, 9
FactsC
Private respondents filed a complaint for illegal dismissal and for various monetary
claims, including the recovery of damages and attorney's fees, against petitioners 'n their
supplemental position paper, the complainants subse?uently confined themselves to the illegal
dismissal charge and abandoned the monetary claims
Private respondents averred that they #or*ed for a minimum of t#elve hours daily,
including )undays and holidays #hen neededD that they #ere paid on piece-#or* basisD that it
GangeredG petitioner 4oren(o #hen they re?uested to be made members of the )ocial )ecurity
)ystem +G)))G-D and that, #hen they demanded an increase in their pay rates, they #ere
prevented +starting ., October $/00- from entering the #or* premises
Petitioners, in turn, claimed that their business operations #ere only seasonal, normally
t#ice a year, one in 9une +coinciding #ith the opening of school classes- and another in
December +during the Christmas holidays-, #hen heavy <ob orders #ould come in Private
respondents, according to petitioners, #ere engaged on purely contractual basis and paid the
rates conformably #ith their respective agreements
'ssuesC
Whether the employer-employee relationship e=ists bet#een petitioner and respondents
and #hether there is illegal dismissal or abandonment #arranting separation pay
;eldC
"he #or* of private respondents is clearly related to, and in the pursuit of, the principal
business activity of petitioners "he indicia used for determining the e=istence of an employer-
employee relationship, all e=tant in the case at bench, include
+a- the selection and engagement of the employeeD
+b- the payment of #agesD
+c- the po#er of dismissalD and
+d- the employer's po#er to control the employee #ith respect to the result of the #or* to
be done and to the means and methods by #hich the #or* to be done and to the means
and methods by #hich the #or* is to be accomplished
"he 4abor !rbiter, sustained by the 743C concluded that during the conciliation stage,
petitioner had repeatedly indicated that they #ere #illing to accept bac* all complainants aside
from denying complainants allegation 't is clear that there #as no dismissal to tal* about in the
first place #hich #ould have to be determined #hether legal or not !lso in consideration of
complainants' desire to be given separation pay instead of being ordered bac* to #or*, all these
factors the 4abor !rbiter rule that there #as neither dismissal nor abandonment but
complainants are simply out of <ob for reasons not attributable to either party
99
Petitioners have repeatedly indicated their #illingness to accept private respondents but
the latter have steadfastly refused the offer For being #ithout any clear legal basis, the a#ard of
separation pay must be set aside "here is nothing, ho#ever, that prevents petitioners from
voluntarily giving private respondents some amounts on e= gratia basis
DecisionC
W;535FO35, the ?uestioned findings and resolutions of respondents 4abor !rbiter and 743C
are MOD'F'5D by deleting the a#ard of separation pay and the corresponding attorney's fees
7o costs
100
G.R. No. %%%87 !"ne #$ %990
(+R M(2&R+(L .+NG S(3+NGS (N* L4(N (SS4C+(2+4N$ +NC.$ petitioner,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$ et al.$ respondents
Jerry #. Banares ;or "etitioner.
Perdrelito D. Aquino ;or "rivate res"ondent.
CR5?$ J.$
,acts) Private respondent 4uis ) )alas #as appointed Gnotarial and legal counselG for the
petitioner "he appointment #as rene#ed for three years
"he petitioner issued an order reminding )alas of the approaching termination of his legal
services under their contract "his prompted )alas to lodge a complaint against !MW)4!' for
separation pay, vacation and sic* leave benefits, cost of living allo#ances, refund of )))
premiums, moral and e=emplary damages, payment of notarial services, and attorney's fees
!MW)4!' moved to dismiss for lac* of <urisdiction 't averred that there #as no employer-
employee relationship bet#een it and )alas and that his monetary claims properly fell #ithin the
<urisdiction of the regular courts
't #as there held that )alas #as not illegally dismissed and so not entitled to collect separation
benefits ;is claims #ere re<ected on the ground that he #as a managerial employee ;e #as
also denied moral and e=emplary damages for lac* of evidence of bad faith on the part of
!MW)4!' 7either #as he allo#ed to collect his notarial fees because the claim therefor had
already prescribed ;o#ever, the petitioner #as ordered to pay )alas his notarial fees, and
attorney's fee e?uivalent to $&S of the <udgment a#ard
On appeal, the decision #as affirmed in toto by the respondent Commission
+ss"e) Whether or not )alas can be considered an employee of the petitioner company
Held) We have held in a long line of decisions that the elements of an employer-employee
relationship areC +$- selection and engagement of the employeeD +.- payment of #agesD +%-
po#er of dismissalD and +,- employer's o#n po#er to control employee's conduct
#
"he e=istence of such a relationship is essentially a factual ?uestion
"he terms and conditions set out in the letter-contract entered into by the parties on, clearly
sho# that )alas #as an employee of the petitioner ;is selection as the company counsel #as
done by the board of directors in one of its regular meetings "he petitioner paid him a monthly
compensation2retainer's fee for his services "hough his appointment #as for a fi=ed term of
three years, the petitioner reserved its po#er of dismissal for cause or as it might deem
necessary for its interest and protection 7o less importantly, !MW)4!' also e=ercised its po#er
of control over )alas by defining his duties and
101
We hold, therefore, that the public respondent committed no grave abuse of discretion in ruling
that an employer-employee relationship e=isted bet#een the petitioner and the private
respondent
"he public respondents agreed that )alas #as entitled to collect notarial fees from $/08 to $//&
by virtue of his having been assigned as notarial officer We feel, ho#ever, that there is no
substantial evidence to support this finding
"he letter-contract, does not contain any stipulation for the separate payment of notarial fees to
)alas in addition to his basic salary On the contrary, it #ould appear that his notarial services
#ere part of his regular functions and #ere thus already covered by his monthly compensation
't is true that the notarial fees #ere paid by members-borro#ers of the petitioner for its o#n
account and not of )alas ;o#ever, this is not a sufficient basis for his claim to such fees in the
absence of any agreement to that effect
!CCO3D'7@4A, the appealed <udgment of the 743C is !FF'3M5D, #ith the modification that
the a#ard of notarial fees and attorney's fees is disallo#ed 't is so ordered
102
HA*R4 R&S45RC&S C4N2R(C24RS C4R8. 3s. 8(G(L+L(5(N and NLRC
G.R. No. L9>199 (pril %8$ %989
G52+&RR&?$ !R.$ !.)
F!C")C On October .,, $/80, petitioner corporation hired the private respondent !ban as
its G4egal !ssistantG ;e received a basic monthly salary of Pl,:&&&& plus an initial living
allo#ance of P:&&& #hich gradually increased to P%.&&&On )eptember ,, $/0&, !ban
received a letter from the corporation informing him that he #ould be considered terminated
effective October ,, $/0& because of his alleged failure to perform his duties #ellOn October 1,
$/0&, !ban filed a complaint against the petitioner for illegal dismissal "he labor arbiter ruled
that !ban #as illegally dismissed "his ruling #as affirmed by the 743C on appeal
"he petitioner ?uestions the <urisdiction of the public respondents considering the
alleged absence of an employer-employee relationship "he petitioner contends that its
relationship #ith !ban is that of a client #ith his la#yer 't is its position that G+a- la#yer as long
as he is acting as such, as long as he is performing acts constituting practice of la#, can never
be considered an employee ;is relationship #ith those to #hom he renders services, as such
la#yer, can never be governed by the labor la#s For a la#yer to so argue is not only
demeaning to himself +sic-, but also his profession and to his brothers in the professionG "hus,
the petitioner argues that the labor arbiter and 743C have no <urisdiction over the instant case
;ence, this present petition
'))>5C Whether or not there #as an employer-employee relationship bet#een the petitioner
corporation and !banR
;54DC ! la#yer, li*e any other professional, may very #ell be an employee of a private
corporation or even of the government 't is not unusual for a big corporation to hire a staff of
la#yers as its in-house counsel, pay them regular salaries, ran* them in its table of organi(ation,
and other#ise treat them li*e its other officers and employees !t the same time, it may also
contract #ith a la# firm to act as outside counsel on a retainer basis "he t#o classes of la#yers
often #or* closely together but one group is made up of employees #hile the other is not !
similar arrangement may e=ist as to doctors, nurses, dentists, public relations practitioners, and
other professionals
"his Court has consistently ruled that the determination of #hether or not there is an
employer-employee relation depends upon four standardsC +$- the manner of selection and
engagement of the putative employeeD +.- the mode of payment of #agesD +%- the presence or
absence of a po#er of dismissalD and +,- the presence or absence of a po#er to control the
putative employee's conduct Of the four, the right-of-control test has been held to be the
decisive factor
!ban #as employed by the petitioner to be its 4egal !ssistant as evidenced by his appointment
paper "he petitioner paid him a basic salary plus living allo#ance "hereafter, !ban #as
dismissed on his alleged failure to perform his duties #ell !ban #or*ed solely for the petitioner
and dealt only #ith legal matters involving the said corporation and its employees ;e also
assisted the Personnel Officer in processing appointment papers of employees "his latter duty
is not an act of a la#yer in the e=ercise of his profession but rather a duty for the benefit of the
corporation
W;535FO35, the petition is hereby D')M'))5D for lac* of merit
103
(NG&L+N( ,R(NC+SC4$ 8etitioner$ vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$
C(S&+ C4R84R(2+4N$ S&++CH+R4 2(C(H(SH+$ 2+M42&4 (C&*4$ *&L,+N L+?($ +R&N&
'(LL&S2&R4S$ 2R+N+*(* L+?( and R(M4N &SC5&2($ Respondents.
AN(R&S9S(N2+(G4$ !.)
,(C2S) 'n $//:, petitioner #as hired by Iasei Corporation during its incorporation stage
)he #as designated as !ccountant and Corporate )ecretary and #as assigned to handle all the
accounting needs of the company )he #as also designated as 4iaison Officer to the City of
Ma*ati to secure business permits, construction permits and other licenses for the initial
operation of the company :
!lthough she #as designated as Corporate )ecretary, she #as not entrusted #ith the corporate
documentsD neither did she attend any board meeting nor re?uired to do so )he never prepared
any legal document and never represented the company as its Corporate )ecretary ;o#ever,
on some occasions, she #as prevailed upon to sign documentation for the company 1
'n $//1, petitioner #as designated !cting Manager "he corporation also hired @erry 7ino as
accountant in lieu of petitioner !s !cting Manager, petitioner #as assigned to handle
recruitment of all employees and perform management administration functionsD represent the
company in all dealings #ith government agencies, especially #ith the Bureau of 'nternal
3evenue +B'3-, )ocial )ecurity )ystem +)))- and in the city government of Ma*atiD and to
administer all other matters pertaining to the operation of Iasei 3estaurant #hich is o#ned and
operated by Iasei Corporation 8
For five years, petitioner performed the duties of !cting Manager !s of December %$, .&&& her
salary #as P.8,:&&&& plus P%,&&&&& housing allo#ance and a $&S share in the profit of Iasei
Corporation 0
'n 9anuary .&&$, petitioner #as replaced by 4i(a 3 Fuentes as Manager Petitioner alleged that
she #as re?uired to sign a prepared resolution for her replacement but she #as assured that
she #ould still be connected #ith Iasei Corporation "imoteo !cedo, the designated "reasurer,
convened a meeting of all employees of Iasei Corporation and announced that nothing had
changed and that petitioner #as still connected #ith Iasei Corporation as "echnical !ssistant to
)ei<i Iamura and in charge of all B'3 matters /
"hereafter, Iasei Corporation reduced her salary by P.,:&&&& a month beginning 9anuary up
to )eptember .&&$ for a total reduction of P..,:&&&& as of )eptember .&&$ Petitioner #as not
paid her mid-year bonus allegedly because the company #as not earning #ell On October
.&&$, petitioner did not receive her salary from the company )he made repeated follo#-ups
#ith the company cashier but she #as advised that the company #as not earning #ell $&
On October $:, .&&$, petitioner as*ed for her salary from !cedo and the rest of the officers but
she #as informed that she is no longer connected #ith the company $$
)ince she #as no longer paid her salary, petitioner did not report for #or* and filed an action for
constructive dismissal before the labor arbiter
Private respondents averred that petitioner is not an employee of Iasei Corporation "hey
alleged that petitioner #as hired in $//: as one of its technical consultants on accounting
matters and act concurrently as Corporate )ecretary !s technical consultant, petitioner
performed her #or* at her o#n discretion #ithout control and supervision of Iasei Corporation
Petitioner had no daily time record and she came to the office any time she #anted "he
104
company never interfered #ith her #or* e=cept that from time to time, the management #ould
as* her opinion on matters relating to her profession Petitioner did not go through the usual
procedure of selection of employees, but her services #ere engaged through a Board
3esolution designating her as technical consultant "he money received by petitioner from the
corporation #as her professional fee sub<ect to the $&S e=panded #ithholding ta= on
professionals, and that she #as not one of those reported to the B'3 or ))) as one of the
companyKs employees $.
PetitionerKs designation as technical consultant depended solely upon the #ill of management
!s such, her consultancy may be terminated any time considering that her services #ere only
temporary in nature and dependent on the needs of the corporation
"o prove that petitioner #as not an employee of the corporation, private respondents submitted
a list of employees for the years $/// and .&&& duly received by the B'3 sho#ing that petitioner
#as not among the employees reported to the B'3, as #ell as a list of payees sub<ect to
e=panded #ithholding ta= #hich included petitioner ))) records #ere also submitted sho#ing
that petitionerKs latest employer #as )ei<i Corporation $%
"he 4abor !rbiter found that petitioner #as illegally dismissed, thusC
W;535FO35, premises considered, <udgment is hereby rendered as follo#sC
$ finding complainant an employee of respondent corporationD
. declaring complainantKs dismissal as illegalD
% ordering respondents to reinstate complainant to her former position #ithout loss of seniority
rights and <ointly and severally pay complainant her money claims in accordance #ith the
follo#ing computationC
a Bac*#ages $&2.&&$ U &82.&&. .8:,&&&&&
+.8,:&& = $& mos-
b )alary Differentials +&$2.&&$ U &/2.&&$- ..,:&&&&
c ;ousing !llo#ance +&$2.&&$ U &82.&&.- :8,&&&&&
d Midyear Bonus .&&$ .8,:&&&&
e $%th Month Pay .8,:&&&&
f $&S share in the profits of Iasei
Corp from $//1-.&&$ %1$,$8:&&
g Moral and e=emplary damages $&&,&&&&&
h $&S !ttorneyKs fees 08,&81:&
P/:8,8,.:&
On appeal, the Court of !ppeals reversed the 743C decision, thusC
W;535FO35, the instant petition is hereby @3!7"5D "he decision of the 7ational 4abor
3elations Commissions dated !pril $:, .&&% is hereby 35E53)5D and )5" !)'D5 and a ne#
one is hereby rendered dismissing the complaint filed by private respondent against Iasei
Corporation, et al for constructive dismissal
)O O3D535D $1
"he appellate court denied petitionerKs motion for reconsideration, hence, the present recourse
+SS5&S)
+$- #hether there #as an employer-employee relationship bet#een petitioner and private
respondent Iasei CorporationD and if in the affirmative, +.- #hether petitioner #as illegally
dismissed
Considering the conflicting findings by the 4abor !rbiter and the 7ational 4abor 3elations
Commission on one hand, and the Court of !ppeals on the other, there is a need to ree=amine
the records to determine #hich of the propositions espoused by the contending parties is
supported by substantial evidence $8
105
We held in )evilla v Court of !ppeals $0 that in this <urisdiction, there has been no uniform test
to determine the e=istence of an employer-employee relation @enerally, courts have relied on
the so-called right of control test #here the person for #hom the services are performed
reserves a right to control not only the end to be achieved but also the means to be used in
reaching such end 'n addition to the standard of right-of-control, the e=isting economic
conditions prevailing bet#een the parties, li*e the inclusion of the employee in the payrolls, can
help in determining the e=istence of an employer-employee relationship
;o#ever, in certain cases the control test is not sufficient to give a complete picture of the
relationship bet#een the parties, o#ing to the comple=ity of such a relationship #here several
positions have been held by the #or*er "here are instances #hen, aside from the employerKs
po#er to control the employee #ith respect to the means and methods by #hich the #or* is to
be accomplished, economic realities of the employment relations help provide a comprehensive
analysis of the true classification of the individual, #hether as employee, independent
contractor, corporate officer or some other capacity
"he better approach #ould therefore be to adopt a t#o-tiered test involvingC +$- the putative
employerKs po#er to control the employee #ith respect to the means and methods by #hich the
#or* is to be accomplishedD and +.- the underlying economic realities of the activity or
relationship
"his t#o-tiered test #ould provide us #ith a frame#or* of analysis, #hich #ould ta*e into
consideration the totality of circumstances surrounding the true nature of the relationship
bet#een the parties "his is especially appropriate in this case #here there is no #ritten
agreement or terms of reference to base the relationship onD and due to the comple=ity of the
relationship based on the various positions and responsibilities given to the #or*er over the
period of the latterKs employment
"he control test initially
"hus, the determination of the relationship bet#een employer and employee depends upon the
circumstances of the #hole economic activity, .. such asC +$- the e=tent to #hich the services
performed are an integral part of the employerKs businessD +.- the e=tent of the #or*erKs
investment in e?uipment and facilitiesD +%- the nature and degree of control e=ercised by the
employerD +,- the #or*erKs opportunity for profit and lossD +:- the amount of initiative, s*ill,
<udgment or foresight re?uired for the success of the claimed independent enterpriseD +1- the
permanency and duration of the relationship bet#een the #or*er and the employerD and +8- the
degree of dependency of the #or*er upon the employer for his continued employment in that
line of business .%
"he proper standard of economic dependence is #hether the #or*er is dependent on the
alleged employer for his continued employment in that line of business ., 'n the >nited )tates,
the touchstone of economic reality in analy(ing possible employment relationships for purposes
of the Federal 4abor )tandards !ct is dependency .: By analogy, the benchmar* of economic
reality in analy(ing possible employment relationships for purposes of the 4abor Code ought to
be the economic dependence of the #or*er on his employer
Held)
By applying the control test, there is no doubt that petitioner is an employee of Iasei
Corporation because she #as under the direct control and supervision of )ei<i Iamura, the
corporationKs "echnical Consultant )he reported for #or* regularly and served in various
capacities as !ccountant, 4iaison Officer, "echnical Consultant, !cting Manager and Corporate
)ecretary, #ith substantially the same <ob functions, that is, rendering accounting and ta=
services to the company and performing functions necessary and desirable for the proper
operation of the corporation such as securing business permits and other licenses over an
indefinite period of engagement
106
>nder the broader economic reality test, the petitioner can li*e#ise be said to be an employee
of respondent corporation because she had served the company for si= years before her
dismissal, receiving chec* vouchers indicating her salaries2#ages, benefits, $%th month pay,
bonuses and allo#ances, as #ell as deductions and )ocial )ecurity contributions from !ugust $,
$/// to December $0, .&&& .1 When petitioner #as designated @eneral Manager, respondent
corporation made a report to the ))) signed by 'rene Ballesteros PetitionerKs membership in
the ))) as manifested by a copy of the ))) specimen signature card #hich #as signed by the
President of Iasei Corporation and the inclusion of her name in the on-line in?uiry system of the
))) evinces the e=istence of an employer-employee relationship bet#een petitioner and
respondent corporation .8
't is therefore apparent that petitioner is economically dependent on respondent corporation for
her continued employment in the latterKs line of business
Based on the foregoing, there can be no other conclusion that petitioner is an employee of
respondent Iasei Corporation )he #as selected and engaged by the company for
compensation, and is economically dependent upon respondent for her continued employment
in that line of business ;er main <ob function involved accounting and ta= services rendered to
respondent corporation on a regular basis over an indefinite period of engagement 3espondent
corporation hired and engaged petitioner for compensation, #ith the po#er to dismiss her for
cause More importantly, respondent corporation had the po#er to control petitioner #ith the
means and methods by #hich the #or* is to be accomplished
"he corporation constructively dismissed petitioner #hen it reduced her salary by P.,:&& a
month from 9anuary to )eptember .&&$ "his amounts to an illegal termination of employment,
#here the petitioner is entitled to full bac*#ages )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 pay, in lieu of reinstatement %,
'n affording full protection to labor, this Court must ensure e?ual #or* opportunities regardless
of se=, race or creed 5ven as #e, in every case, attempt to carefully balance the fragile
relationship bet#een employees and employers, #e are mindful of the fact that the policy of the
la# is to apply the 4abor Code to a greater number of employees "his #ould enable employees
to avail of the benefits accorded to them by la#, in line #ith the constitutional mandate giving
ma=imum aid and protection to labor, promoting their #elfare and reaffirming it as a primary
social economic force in furtherance of social <ustice and national development
W;535FO35, the petition is @3!7"5D "he Decision and 3esolution of the Court of !ppeals
dated October ./, .&&, and October 8, .&&:, respectively, in C!-@3 )P 7o 80:$: are
!77>445D and )5" !)'D5 "he Decision of the 7ational 4abor 3elations Commission dated
!pril $:, .&&% in 743C 7C3 C! 7o &%.811-&., is 35'7)"!"5D "he case is 35M!7D5D to
the 4abor !rbiter for the recomputation of petitioner !ngelina FranciscoKs full bac*#ages from
the time she #as illegally terminated until the date of finality of this decision, and separation pay
representing one-half month pay for every year of service, #here a fraction of at least si=
months shall be considered as one #hole year
107
485L&NC+( +C& 8L(N2 (N* S24R(G& (N*D4R *R. M&LCH4R 485L&NC+($ vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N 62H+R* *+3+S+4N7$ L('4R (R'+2&R
N5M&R+(N4 3+LL&N( (N* M(N5&L 8. &S+2($
G.R. No. L998#>8 *ece/ber %:$ %99#
,(C2S)
M!7>54 P 5)'"! #as hired as compressor operator-mechanic for the ice plants of petitioner
Dr Melchor Opulencia located in "anauan, Batangas, and Calamba, 4aguna 'nitially assigned
at the ice plant in "anauan, 5sita #ould #or* from seven o'cloc* in the morning to five o'cloc* in
the afternoon receiving a daily #age of P%:&& 'n $/01, 5sita #as transferred to the ice plant in
Calamba, #hich #as then undergoing overhauling For less than a month, 5sita helped in the
construction-remodeling of Dr Opulencia's house
For demanding the correct amount of #ages due him, 5sita #as dismissed from service
Conse?uently, he filed a complaint for illegal dismissal, underpayment, non-payment for
overtime, legal holiday, premium for holiday and rest day, $%th month, separation2retirement pay
and allo#ances against petitioners
Petitioners deny that 5sita is an employee "hey claim that 5sita could not have been employed
in $/0& because the "anauan ice plant #as not in operation due to lo# voltage of electricity and
that 5sita #as merely a helperE"eon of one of the contractors they had engaged to do ma<or
repairs and renovation of the "anauan ice plant in $/01 Petitioners further allege that #hen
they had the Calamba ice plant repaired and e=panded, 5sita li*e#ise rendered services in a
similar capacity, and thus admitting that he #or*ed as a helperE"eon in the repair or remodeling
of Dr Opulencia's residence in "anauan
4abor !rbiter rendered a decision finding the e=istence of an employer-employee relationship
bet#een petitioners and 5sita and accordingly directed them to pay him P%%,:$0&.
representing separation pay, underpayment of #ages, allo#ances, $%th month, holiday,
premium for holiday, and rest day pays
+SS5&) Whether there e=ists employer-employee relation bet#een the petitioners and the
private respondent 5sita
R5L+NG)
7o particular form of evidence is re?uired to prove the e=istence of an employer-employee
relationship !ny competent and relevant evidence to prove the relationship may be admitted
For, if only documentary evidence #ould be re?uired to sho# that relationship, no scheming
employer #ould ever be brought before the bar of <ustice, as no employer #ould #ish to come
out #ith any trace of the illegality he has authored considering that it should ta*e much #eightier
proof to invalidate a #ritten instrument "hus, as in this case #here the employer-employee
relationship bet#een petitioners and 5sita #as sufficiently proved by testimonial evidence, the
absence of time sheet, time record or payroll has become inconse?uential
"he petitioners' reliance on (evilla v Court o; A""eals is misplaced 'n that case, #e did not
consider the inclusion of employer's name in the payroll as an independently crucial evidence to
108
prove an employer-employee relation Moreover, for a payroll to be utili(ed to disprove the
employment of a person, it must contain a true and complete list of the employees But, in this
case, the testimonies of petitioners' #itnesses admit that not all the names of the employees
#ere reflected in the payroll
'n their Consolidated 3eply, petitioners assert that Gemployees #ho #ere absent #ere naturally
not included in the #ee*ly payrollsG But this simply emphasi(es the obvious Petitioners'
payrolls do not contain the complete list of the employees, so that the payroll slips cannot be an
accurate basis in determining #ho are and are not their employees 'n addition, as the )olicitor
@eneral observesC G the payroll slips submitted by petitioners do not cover the entire period
of nine years during #hich private respondent claims to have been employed by them, but only
the periods from 7ovember . to 7ovember ./, $/01 and !pril .1 to May %&, $/08 't should
be noted that petitioners repeatedly failed or refused to submit all payroll slips covering the
period during #hich private respondent claims to have been employed by them despite
repeated directives from the 4abor !rbiter G 'n this regard, #e can aptly apply the disputable
presumption that evidence #illfully suppressed #ould be adverse if produced

Petitioners further contend that the claim of 5sita that he #or*ed from seven o'cloc* in the
morning to five o'cloc* in the afternoon, #hich is presumed to be continuous, is hardly credible
because other#ise he #ould not have had the time to tend his crops !s against this positive
assertion of 5sita, it behooves petitioners to prove the contrary 't is not enough that they raise
the issue of probability, nay, improbability, of the conclusions of public respondents based on the
facts bared before them, for in case of doubt, the factual findings of the tribunal #hich had the
opportunity to peruse the conflicting pieces of evidence should be sustained
"he petitioners point out that even granting arguendo that 5sita #as indeed a mechanic, he
could never be a regular employee because his presence #ould be re?uired only #hen there
#as a need for repair We cannot sustain this argument "his circumstance cannot affect the
regular status of employment of 5sita !n employee #ho is re?uired to remain on call in the
employer's premises or so close thereto that he cannot use the time effectively and gainfully for
his o#n purpose shall be considered as #or*ing #hile on call
'n sum, the determination of regular and casual employment is not affected by the fact that the
employee's regular presence in the place of #or* is not re?uired, the more significant
consideration being that the #or* of the employee is usually necessary or desirable in the
business of the employer More importantly, 5sita #or*ed for / years and, under the 4abor
Code, Gany employee #ho has rendered at least one year of service, #hether such service is
continuous or bro*en, shall be considered a regular employee #ith respect to that activity in
#hich he is employed G
"he petitioners #ould give the impression that the repair of the ice plant and the renovation of
the residence of Dr Opulencia #ere voluntarily e=tended by 5sita because GNrOespondent did it
on their +sic- o#nG >nfortunately for petitioners, #e cannot permit these baseless assertions to
prevail against the factual findings of public respondents #hich #ent through the saniti(ing
process of a public hearing "he same observation may be made of the alleged inconsistencies
in 5sita's testimonies Moreover, on the claim that 5sita's construction #or* could not ripen into
a regular employment in the ice plant because the construction #or* #as only temporary and
unrelated to the ice-ma*ing business, needless to say, the one month spent by 5sita in
construction is insignificant compared to his nine-year service as compressor operator in
109
determining the status of his employment as such, and considering further that it #as Dr
Opulencia #ho re?uested 5sita to #or* in the construction of his house
'n allo#ing 5sita to stay in the premises of the ice plant and permitting him to cultivate crops to
augment his income, there is no doubt that petitioners should be commendedD ho#ever, in vie#
of the e=istence of an employer-employee relationship as found by public respondents, #e
cannot treat humanitarian reasons as <ustification for emasculating or ta*ing a#ay the rights and
privileges of employees granted by la# Benevolence, it is said, does not operate as a license to
circumvent labor la#s 'f petitioners #ere genuinely altruistic in e=tending to their employees
privileges that are not even re?uired by la#, then there is no reason #hy they should not be
re?uired to give their employees #hat they are entitled to receive Moreover, as found by public
respondents, 5sita #as en<oying the same privileges granted to the other employees of
petitioners, so that in thus treating 5sita, he cannot be considered any less than a legitimate
employee of petitioners
W;535FO35, there being no grave abuse of discretion on the part of public respondents, the
instant petition is D')M'))5D !ccordingly, the restraining order #e issued on $% May $//$ is
4'F"5D
)O O3D535D
110
*o/asi- vs. NLRC
6G.R. No %%8%%$ Septe/ber %>$ %99>7
FactsC "he Complaint #as instituted by 5ddie Domasig against respondent Cata @arments
Corporation, !ccompany engaged in garments business and its o#ner2 Manager Otto Ong
and Catalina Co for 'llegal dismissal, unpaid commission and other monetary claims
Complaint alleged that he started #or*ing #ith the respondent on 9uly 1, $/01 as
)alesman #hen the company #as still named Cata @arments Corporation, that three +% years
ago, because of complaint against respondent by its #or*ers, it changed its name to Cata
@arments Corporation, and that on !ugust ./, $//., he #as dismissed #hen respondent
learned that he #as being pirated by rival corporation #hich offer he refused Prior to his
dismissal complaint alleged that he #as receiving a salary of P$, :&& a month plus commission
'ssueC #hether or not complaint #as commission agent #as not fully resolved in the assailed
decision
;eldC "he 4abor arbiter held that complainant #as illegally dismissed and entitled to
reinstatement and bac* #ages as #ell as under payment of salary $%
th
month pay service
incentive leave and legal holiday "he arbiter also a#arded complainant his claim for unpaid
commission in the amount of P$,%, /::
Decision C Bellosillo, Eitug, Iapunan and ;ermosisisima, 9r, 99,concur 3esolution set aside,
<udgment of 4abor !rbiter reinstated and affirmed #ith modification
111
&fren 8. 8a-"io v. NLRC$ Metro/edia 2i/es Corporation$ Robina A. Go@on-Eei$ Liberto
Go/e<$ !r.$ Aolanda &. (ra-on$ ,rederic@ *. Go$ and (lda +-lesia
May /, .&&% @3 7o $,80$1
Eitug, J.C
FactsC
On .. 9une, $//., respondent Metro Media "imes Corporation entered into an
agreement #ith petitioner, 5fren P Paguio, appointing the latter to be an account e=ecutive of
the firm "he petitioner #as to solicit advertisements for the LManila "imesM, a ne#spaper
published by the respondent company
On $: !ugust, $//., barely t#o months after the rene#al of his contract, petitioner
received a notice of termination from the respondent firm "here #as no given definite cause for
the petitionerKs termination !ggrieved, Paguio filed a case before the labor arbiter, as*ing that
his dismissal be declared unla#ful and prayed that respondent company officials be held
accountable for acts of unfair labor practices, P:&&,&&&& moral damages, and for P.&,&&&&
e=emplary damages
"he 4abor arbiter found for petitioner and declared his dismissal illegal "he arbiter
ordered respondent company and its officers to reinstate Paguio to his former position and to
pay him his commissions and other remunerations ;e li*e#ise ad<udged that the general
manager of the respondent corporation be held liable to Paguio for moral damages in the
amount of P.&,&&&&
On appeal, 743C reversed the ruling of the labor arbiter and declared the contractual
relationship bet#een the parties as a fi=ed-term employment
Petitioner Paguio appealed the ruling of the 743C before the Court of !ppeals
'ssuesC
Whether or not there is an employer-employee relationship, petitionerKs contract #ith
private respondent company is for a fi=ed period and #hether or not petitionerKs dismissal is
legal
;eldC
!s defined in !rticle .0& of the 4abor Code, a regular employee is one #ho is engaged
to perform activities #hich are necessary and desirable in the usual business or trade of the
employer as against those #hich are underta*en for a specific pro<ect or are seasonal 5ven in
these latter cases, #here such person has rendered at least one year of service, regardless of
the nature of the activity performed or of #hether it is continuous or intermittent, the employment
is considered regular as long as the activity e=ists, it not being indispensable that he be first
issued a regular appointment or be formally declared as such before ac?uiring a regular status
"he la# in defining their contractual relationship, does not necessarily or e=clusively
upon the terms of their #ritten or oral contract, but also on the basis of the nature of the #or*
petitioner has been called upon to perform
! la#ful dismissal must meet both substantive and procedural re?uirementsD in fine, the
dismissal must be for a <ust or authori(ed cause and must comply #ith the rudimentary due
process of notice and hearing 't is not sho#n that respondent company has fully bothered itself
#ith either of these re?uirements in terminating the services of petitioner "he notice of
termination recites no valid or <ust cause for the dismissal of petitioner nor does it appear that
he has been given an opportunity to be heard in his defense
112
GR&(2 8(C+,+C L+,& (SS5R(NC& v. !5*+C4
G.R. No. 7#887 *ece/ber 1%$ %989
8onente) 8(R(S. J
,(C2S)
;onorato 9udico filed a complaint against @repalife insurance for a#ard of money claims
consisting of separation pay, unpaid salary and $%
th
month pay
9udico entered into an agreement of agency #ith @repalife to become a debit agent attached to
the 'ndustrial 4ife !gency in Cebu City ;e had definite #or* assignments including but not
limited to collection of premiums from policy holders and selling insurance to prospective clients
;e received a definite minimum amount per #ee* as his #age *no#n as L)ales 3eserveM
#herein the failure to maintain the same #ould bring him bac* to the beginnerKs employment
#ith fi=ed #ee*ly #age of P.&& for $% #ee*s regardless of production ;e #as assigned a
definite a definite place in the office to #or* on #hen he is not in the fieldD and in addition to his
canvassing #or* he #as burdened #ith the <ob collection 'n both cases he #as re?uired to
ma*e a regular report to the company regarding their duties ;e #as then promoted to Tone
)upervisor #ith additional allo#ance On 9une .0, $/0. he #as dismissed by #ay of
"ermination of his agency contract
'))>5C
Whether or not there is an employer-employee relationship bet#een insurance agents
and their principalR
;54DC
Aes, there is an employer-employee relationship bet#een @repalife and 9udico because
the element of control by @repalife over 9udico is Present
"he facts sho#s that 9udico #as controlled by @repalife insurance company not only as to the
*ind of #or*D that amount of results, the *ind of performance but also the po#er of dismissal
9udico by nature and his position and #or* has been a regular employee and therefore entitled
to the protection of the la# and not to be terminated #ithout valid and <ustifiable cause
113
,eati 5niversity v. 'a"tista$ %8 SCR( %%9% M%9>>N
,acts)
On 9anuary $,, $/1%, the President of the respondent Feati >niversity Faculty Club-
P!F4> H hereinafter referred to as Faculty Club H #rote a letter to Mrs Eictoria 4 !raneta,
President of petitioner Feati >niversity H hereinafter referred to as >niversity H informing her
of the organi(ation of the Faculty Club into a registered labor union "he Faculty Club is
composed of members #ho are professors and2or instructors of the >niversity On 9anuary ..,
$/1%, the President of the Faculty Club sent another letter containing t#enty-si= demands that
have connection #ith the employment of the members of the Faculty Club by the >niversity, and
re?uesting an ans#er #ithin ten days from receipt thereof "he President of the >niversity
ans#ered the t#o letters, re?uesting that she be given at least thirty days to study thoroughly
the different phases of the demands Mean#hile counsel for the >niversity, to #hom the
demands #ere referred, #rote a letter to the President of the Faculty Club demanding proof of
its ma<ority status and designation as a bargaining representative On February $, $/1%, the
President of the Faculty Club again #rote the President of the >niversity re<ecting the latter's
re?uest for e=tension of time, and on the same day he filed a notice of stri*e #ith the Bureau of
4abor alleging as reason therefor the refusal of the >niversity to bargain collectively "he parties
#ere called to conferences at the Conciliation Division of the Bureau of 4abor but efforts to
conciliate them failed On February $0, $/1%, the members of the Faculty Club declared a stri*e
and established pic*et lines in the premises of the >niversity, resulting in the disruption of
classes in the >niversity Despite further efforts of the officials from the Department of 4abor to
effect a settlement of the differences bet#een the management of the >niversity and the stri*ing
faculty members no satisfactory agreement #as arrived at On March .$, $/1%, the President of
the Philippines certified to the Court of 'ndustrial 3elations the dispute bet#een the
management of the >niversity and the Faculty Club pursuant to the provisions of )ection $& of
3epublic !ct 7o 08: F5!"' >niversity Faculty Club held a stri*e against F5!"' >niversity upon
the latterKs failure to comply #ith its demands )ince they #ere not able to settle, the case #as
brought to the Court of 'ndustrial 3elations +C'3- #hich ordered the faculty members to return to
#or* F5!"' filed a motion to dismiss maintaining that the C'3 Did not have <urisdiction over the
case because +$- the 'ndustrial Peace !ct is not applicable to the >niversity, it being an
educational institution, nor to the members of the Faculty Club, they being independent
contractorsD +.- the presidential certification is violative of )ection $& of the 'ndustrial Peace
!ct, as the >niversity is not an industrial establishment, and there #as no industrial dispute
#hich could be certified to the C'3D and +%- that since it is not an industrial establishment,
hence, it is not an LemployerM in contemplation of the 'ndustrial Peace !ct
+ss"e) Whether F5!"' >niversity is not an employer and the members of the Faculty Club, are
not employers #ithin the purvie# of the 'ndustrial Peace !ct
*ecision) "he Court of 'ndustrial 3elations has <urisdiction over unfair labor practice charges
against educational institutions that are organi(ed, operated and maintained for profit 'ndustrial
Peace !ct is applicable to any organi(ation or entity H #hatever may its purpose #hen it #as
created H that is operated for profit or gain Congress, in the 'ndustrial Peace !ct, did not
intend to give a complete definition of LemployerM, but rather that the definition in )ection . +c- of
the la# to be complementary to #hat is commonly understood as employer
5ducational institutions, that are operated for profit, are included #ithin the term
LemployerM as contemplated in the 'ndustrial Peace !ct, since they are not among the
seceptions metioned in )ection . +c- of the la# !n employer is one #ho employs the services of
othersD one for #hom employees #or* and #ho pays their #ages or salaries ! >niversity that
114
engaged the services of the professors, provided them #or*, and paid them compensation or
salary for their services, even if it considers itself as a mere LlesseeM of services under a
contract bet#een it and the members of said professors For the purposes of the 'ndustrial
Peace !ct the >niversity is an industrial establishment because it is operated for profit and it
employs persons #ho #or* to earn a living "he term LindustryM, for the purposes of the
application of our labor la#s should be given a broad meaning so as to cover all enterprises
#hich are operated for profit and #hich engage the services of persons #ho #or* to earn a
living Professors and instructors, #ho are under contract to teach particular courses and are
paid for their services, are employees under the 'ndustrial Peace !ct )tri*ing professors and2or
instructors of the >niversity are employees because stri*ing employees retain their status as
employees Professors and instructors are not independent contractors "he Court ta*es <udicial
notice that a university controls the #or* of the members of its facultyD that a university
prescribes the courses or sub<ects that professors teach, and #hen and #here to teachD that the
professorsK #or* is characteri(ed by regularity and continuity for a fi=ed durationD that professors
are compensated for their services by #ages and salaries, rather than by profitsD that the
professors and2or instructors cannot substitute others to do their #or* #ithout the consent of the
universityD and that the professors can be laid off if their #or* is found not satisfactory
'7 E'5W OF ";5 FO35@O'7@, the petition for certiorari and prohibition #ith preliminary
in<unction in Case @3 7o 4-.$.80 is dismissed and the #rits prayed for therein are denied
"he #rit of preliminary in<unction issued in Case @3 7o 4-.$.80 is dissolved "he orders and
resolutions appealed from, in Cases 7os 4-.$,1. and 4-.$:&&, are affirmed, #ith costs in
these three cases against the petitioner-appellant Feati >niversity 't is so ordered
115
3illa/aria vs. C( and '"sta/ante
G.R. No. %>:88%$ (pril %9$ 1>
C(LL&!4$ SR.$ !.)
FactsC
Petitioner Eillamaria and respondent Bustamante e=ecuted a contract entitled
LIasunduan ng Bilihan ng )asa*yan sa Pamamagitan ng Boundary-;ulogM
>nder the LIasunduanM, respondent #as re?uired to remit P::& daily to petitioner, #ith
the amount representing the LboundaryM and the partial payment for the purchase of the
<eepney !ny e=cess #ould be *ept by the driver as his daily #age >nder the LIasunduanM, the
petitioner retained o#nership #ith the material possession vested in the driver !lso in the
LIasunduanM if the driver failed to remit P::& for a #ee*, the agreement #ould be of no force
and effect #ith the driver to return the <eepney to the o#ner 'f still allo#ed to drive, o#ner and
driver #ould revert to a daily P::& Boundary only
)ometime in $///, petitioner issued a LPaalalaM to all their drivers reminding them about
the LIasunduanM
9uly .,, .&&&, respondent Bustamante #as barred by petitioner to drive the vehicle that
#as already ta*en bac*
3espondent filed an illegal dismissal complaint Eillamaria countered that there #as no
dismissal because the LIasunduanM transformed the employer U employee relationship to that of
a buyer U seller
"he 4abor !rbiter decided in favor of petitioner #ith the reason that the LIasunduanM
#as in effect bet#een the parties and #ith the LPaalalaM it #as sho#n that respondent had
violated the terms of the contract and is not entitled to damages
3espondent appealed to 743C #hich then #as then dismissed not because of the
arbiterKs decision but because of <urisdictional issues pertaining to the LIasunduanM #hich gives
#ay to the <uridical relationship as vendor U vendee meaning that the 4abor !rbiter had no
<urisdiction over the case 3espondentKs motion for reconsideration #as also denied
'ssueC
Whether or not the employer U employee relationship e=ists even #ith the LIasunduanMR
3ulingC
"he <uridical relationship of employer U employee #as not negated by the LIasunduanM,
considering that the petitioner retained control of respondentKs conduct as driver of the vehicle
116
Sy et. (l. vs C45R2 4, (88&(LS
G.R. No. %0119# ,ebr"ary 17$ 1#
S&C4N* *+3+S+4N$ H5+S5M'+NG$ J.$
,acts)
)ometime in $/:0, private respondent 9aime )ahot: started #or*ing as a truc* helper for
petitionersK family-o#ned truc*ing business 'n $/1:, he became a truc* driver of the same
family business "hroughout all for %1 years, private respondent continuously served the
truc*ing business of petitioners ;o#ever, starting in !pril $//,, )ahot had been incurring
absences as he #as suffering from various ailments #hich greatly affected the performance of
his tas* as a driver ;e in?uired about his medical and retirement benefits #ith the )ocial
)ecurity )ystem +)))- on !pril .:, $//,, but discovered that his premium payments had not
been remitted by his employer !nd due to his absences, he #as dismissed from #or*
On )eptember $%, $//,, )ahot filed #ith the 743C 7C3 !rbitration Branch, a complaint for
illegal dismissal praying for the recovery of separation pay and attorneys fees against herein
petitioners
For their part, petitioners admitted they had a truc*ing business in the $/:&s but denied
employing helpers and drivers "hey contend that private respondent #as not illegally dismissed
as a driver because he #as in fact petitionerKs industrial partner "hey add that it #as not until
the year $//,, #hen )B" "ruc*ing Corporation #as established, and only then did respondent
)ahot become an employee of the company, #ith a monthly salary that reached P,,$1&&& at
the time of his separation
+ss"e) Whether an employer-employee relationship e=isted bet#een petitioners and private
respondent )ahot
Held)
We agree #ith complainant that there #as error committed by the 4abor !rbiter #hen he
concluded that complainant #as an industrial partner prior to $//, ! computation of the age of
complainant sho#s that he #as only t#enty-three +.%- years #hen he started #or*ing #ith
respondent as truc* helper ;o# can #e entertain in our mind that a t#enty-three +.%- year old
man, #or*ing as a truc* helper, be considered an industrial partner ;ence #e rule that
complainant #as only an employee, not a partner of respondents from the time complainant
started #or*ing for respondent$8
"he elements to determine the e=istence of an employment relationship areC +a- the selection
and engagement of the employeeD +b- the payment of #agesD +c- the po#er of dismissalD and +d-
the employerKs po#er to control the employeeKs conduct "he most important element is the
employerKs control of the employeeKs conduct, not only as to the result of the #or* to be done,
but also as to the means and methods to accomplish it$/
!s found by the appellate court, petitioners o#ned and operated a truc*ing business since the
$/:&s and by their o#n allegations, they determined private respondentKs #ages and rest
day.& 3ecords of the case sho# that private respondent actually engaged in #or* as an
117
employee During the entire course of his employment he did not have the freedom to determine
#here he #ould go, #hat he #ould do, and ho# he #ould do it ;e merely follo#ed instructions
of petitioners and #as content to do so, as long as he #as paid his #ages 'ndeed, said the C!,
private respondent had #or*ed as a truc* helper and driver of petitioners not for his o#n
pleasure but under the latterKs control
"ime and again this Court has said that Gif doubt e=ists bet#een the evidence presented by the
employer and the employee, the scales of <ustice must be tilted in favor of the latterG.: ;ere,
#e entertain no doubt Private respondent since the beginning #as an employee of, not an
industrial partner in, the truc*ing business
*ecision)
.H&R&,4R&, the petition is D57'5D and the decision of the Court of !ppeals dated February
./, .&&& is !FF'3M5D Petitioners must pay private respondent 9aime )ahot his separation
pay for %1 years of service at the rate of one-half monthly pay for every year of service,
amounting to P8,,00&&&, #ith interest of si= per centum +1S- per annum from finality of this
decision until fully paid
Costs against petitioners )O O3D535D
Bellosillo, .C,air!an/, 'endoza, and CalleAo, (r., JJ., concur.
Austria-'artinez, J., no "art.
118
G.R. Nos. 8##898% Nove/ber %:$ %989
M(C(2+ H('&R*(SH&RA$ +NC.$ !4RG& L&*&SM( and C&C+L+4 G. +N4C&NC+4$
petitioners,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$ C&,&R+N( !. *+4S(N( 6Labor (rbiter$
*epart/ent of Labor and &/ploy/ent$ National Capital Re-ion7$ S(N*+G(N NG
M(NGG(G(.(NG 8+L+8+N4 6S(N*+G(N7925C8 and its /e/bers$ !(C+N24 G(RC+(N4$
(L,R&*4 C. '(SC4$ 3+C24R+4 A. L(5R&24$ &S2&R N(R3(&?$ &5G&N+4 L. R4'L&S$
'&L&N N. 3+S2($ (L&!(N*R4 (. &S2R('4$ 3&3&NC+4 2+R4$ C(S+M+R4 ?(8(2($
GL4R+( &S2R('4$ L&4N4R( M&N*4?($ M(C(R+( G. *+M8(S$ M&R+LAN (. 3+R(A$ L+LA
48+N($ !(N&2 S(NG*(NG$ !4S&,+N( (LC4C&'( and M(R+( (NG&L&S$ respondents
'ndividual complainants, private respondents herein, have been #or*ing for petitioner Ma*ati
;aberdashery, 'nc as tailors, seamstress, se#ers, basters +manlililip- and GplantsadorasG "hey
are paid on a piece-rate basis e=cept Maria !ngeles and 4eonila )erafina #ho are paid on a
monthly basis 'n addition to their piece-rate, they are given a daily allo#ance of three +P %&&-
pesos provided they report for #or* before /C%& am everyday
Private respondents are re?uired to #or* from or before /C%& am up to 1C&& or 8C&& pm from
Monday to )aturday and during pea* periods even on )undays and holidays
On 9uly .&, $/0,, the )andigan ng Manggaga#ang Pilipino, a labor organi(ation of the
respondent #or*ers, filed a complaint doc*eted as 743C 7C3 Case 7o 8-.1&%-0, for +a-
underpayment of the basic #ageD +b- underpayment of living allo#anceD +c- non-payment of
overtime #or*D +d- non-payment of holiday payD +e- non-payment of service incentive payD +f-
$%th month payD and +g- benefits provided for under Wage Orders 7os $, ., %, , and :
%
'))>5C
W;5";53 O3 7O" 5MP4OA53 5MP4OA55 354!"'O7);'P 56')"
Aes there #as employer-employee relationship that e=isted "he first issue #hich is the pivotal
issue in this case is resolved in favor of private respondents "he test of employer-employee
relationship is four-foldC +$- the selection and engagement of the employeeD +.- the payment of
#agesD +%- the po#er of dismissalD and +,- the po#er to control the employee's conduct 't is the
so called Gcontrol testG that is the most important element "his simply means the determination
of #hether the employer controls or has reserved the right to control the employee not only as to
the result of the #or* but also as to the means and method by #hich the same is to be
accomplished
"he facts at bar indubitably reveal that the most important re?uisite of control is present !s
gleaned from the operations of petitioner, #hen a customer enters into a contract #ith the
haberdashery or its proprietor, the latter directs an employee #ho may be a tailor, pattern
ma*er, se#er or GplantsadoraG to ta*e the customer's measurements, and to se# the pants, coat
or shirt as specified by the customer )upervision is actively manifested in all these aspects H
the manner and ?uality of cutting, se#ing and ironing
119
C(5R*(N&2((N 8+&C& .4RC&RS 5N+4N$ represented by !5(N+24 8. C4S2(L&S$ !R.
in his capacity as "nion president$ petitioner$ vs. 5N*&RS&CR&2(RA '+&N3&N+*4 &.
L(G5&SM( and C4R,(RM GR(+NS$ +NC.$ respondents.
MG.R. No. %%09%%. ,ebr"ary 10$ %998N
C(5R*(N&2((N 8+&C& .4RC&RS (SS4C+(2+4N as represented by !5(N+24 8.
C4S2(L&S$ !R.$ president$ petitioner$ vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$
C4R,(RM GR(+NS$ +NC. andDor 2&4*A C. R(8+S4R( and H&RM+N+4 R('(NG$
respondents.
D 5 C ' ) ' O 7
P!7@!7'B!7, 9C
"he Facts
'n his Consolidated Memorandum, the solicitor general recited the follo#ing pertinent facts,
#hich #e find amply supported by the recordsCN$&O
LPetitioner union has ninety-t#o +/.- members #ho #or*ed as XcargadorK at the #arehouse and
ricemills of private respondent Nreferring to 3espondent CorfarmO at >mingan, Pangasinan since
$/0. !s cargadores, they loaded, unloaded and piled sac*s of palay from the #arehouse to
the cargo truc*s and those brought by cargo truc*s for delivery to different places "hey #ere
paid by private respondent on a piece rate basis When private respondent denied some
benefits to these cargadores, the latter organi(ed petitioner union >pon learning of its
formation, private respondent barred its members from #or*ing #ith them and replaced NthemO
#ith non-members of the union sometime in the middle of $//.
On 9uly /, $//., petitioner filed Na petitionO for certification election before the 3egional Office
7o ' of the Department of 4abor and 5mployment, )an Fernando, 4a >nion doc*eted as
3O$&&-/.&8-3>-&&$
While this petition for certification election #as pending, petitioner also filed on 7ovember $1,
$//., a complaint for illegal dismissal, unfair labor practice, refund of illegal deductions,
payment of #age differentials, various pecuniary benefits provided by la#s, damages, legal
interest, reinstatement and attorneyKs fees, against private respondent before the 3egional
!rbitration Branch 7o $ of Dagupan City, doc*eted as 743C 3!B Case 7o &$-$$8-&$0,-/.
On 7ovember .,, $//., 4abor !rbiter 3icardo Olaire( in 743C Case 7o )ub-3ab &$-$$8-
&$0,-/., directed the parties to submit position paper on or before December $,, $//., and to
appear for hearing on the said date Only the complainant petitioner submitted its position
paper on December %, $//.
4i*e#ise in the scheduled hearing on December $,, $//., private respondent did not appearNDO
thus 4abor !rbiter Olaire( allo#ed the president of petitioner union 9uanito Costales to testify
and present its evidence e=-parte
"he 'ssues
120
'n its Consolidated Memorandum dated )eptember $/, $//: filed before us, petitioner raises
the follo#ing LgroundsM in support of its petitionCN$8O

issues are as follo#sC
$ Whether 3espondent 4aguesma acted #ith grave abuse of discretion in ordering the
dismissal of the petition for certification election
. Whether 3espondent 743C acted #ith grave abuse of discretion in remanding the illegal
dismissal case to the labor arbiter for further proceedings
"he present controversy hinges on #hether an employer-employee relationship bet#een the
CPW> members and 3espondent Corfarm has been established by substantial evidence
"he CourtKs 3uling
"he t#o petitions are meritorious
Main 'ssueC 5mployer-5mployee 3elationship
First CaseC Certification 5lection
Petitioner contends that 3espondent 4aguesma committed grave abuse of discretion in
dismissing the petition for certification election by relying on private respondentKs bare
allegation, in its motion for reconsideration, of lac* of employer-employee relationshipN$0O
!ccording to petitioner, 3espondent 4aguesma cannot reverse his Decision in the absence of a
concomitant change in his factual findingsN$/O Petitioner insists that all its members #ere
employees of private respondent, vi(CN.&O
L"he /. #or*ers, #ho are all union members of petitioner herein, have been rendering actual
manual services as XcargadoresK in the #arehouse and rice mills of private respondent,
performing activities usually related to or desirable by NsicO the business or trade of private
respondent #ho is engaged in the buy and sell of palay as #ell as #arehousing of said
commodity and milling the same for sale to customers in the form of milled rice "he /. #or*ers
have performed their activities for the last ten +$&- years prior to their having been illegally
dismissed from employment on 9une $0, $//. or thereaboutsM
Petitioner adds that many of its members received Christmas bonuses from private respondent
N.$O
On the other hand, 3espondent Corfarm describes the contentions of petitioner as
Loff-tangent, if not irrelevant --
First, the authority of the DO45 )ecretary to decide appeals in representation cases is
undeniable +see eg, )ections / and $& of 3ule E, Boo* E, of the 'mplementing 3ules and
3egulations of the 4abor CodeD also !rt .:/, appeal from certification election orders, labor
code- )econd, petitioner completely misses the point that the granting and denial of a motion
for reconsideration involves the e=ercise of discretion !s submitted by the Public 3espondent
in its Comment, Xamong the ends to #hich a Motion for 3econsideration is addressed, one is
121
precisely to convince the court that its ruling is erroneous and improper, contrary to la# or the
evidenceK, = = =M +5mphasis found in the original-
Corfarm insists that the challenged Order of 3espondent 4aguesma dated 9anuary ,, $//,
rests on Lsolid findings of factM #hich should be accorded respect and finalityN..O 't attac*s the
petitionerKs allegation -- that it has L/.M #or*ers #ho #or*ed as LcargadorM at its #arehouses --
as Lgratuitous and not supported by any evidence = = = NbecauseO as late as this time of day in
the litigation of this case, #ho e=actly are those /. #or*ers cannot be *no#n from the
recordsMN.%O +5mphasis in original-
Private respondent further argues that 394 Martine( Fishing Corp vs 743C,N.,O cited by the
solicitor general, has a factual situation different from the case at bar LWaiting time,M unli*e that
in 394 Martine( Fishing Corp, does not obtain hereN.:O 4i*e#ise allegedly inapplicable are the
rulings in Eillavilla vs Court of !ppealsN.1O and in Brotherhood 4abor >nity Movement vs
TamoraN.8O
3espondent Corfarm denies that it had the po#er of control, rationali(ing that petitionerKs
members L#ere Xstreet-hiredK #or*ers engaged from time to time to do loading and unloading
#or* = = =NDO NtOhere N#asO no superintendent-in-charge = = = to give orders = = =NDO NandO there
N#ereO no gate passes issued, nor tools, e?uipment and paraphernalia issued by Corfarm for
loading2unloading = = =MN.0O 't attributes error to the solicitor generalKs reliance on !rticle
.0&N./O of the 4abor Code Citing Brent )chool, 'nc vs Tamora,N%&O private respondent asserts
that a literal application of such article #ill result in Labsurdity,M #here petitionerKs members #ill
be regular employees not only of respondents but also of several other rice mills, #here they
#ere allegedly also under service Finally, Corfarm submits that the O)@Ks position is negated
by the fact that LpetitionerKs members contracted for loading and unloading services #ith
respondent company #hen such #or* #as available and #hen they felt li*e it = = =MN%$O
"o determine the e=istence of an employer-employee relation, this Court has consistently
applied the Lfour-foldM test #hich has the follo#ing elementsC +$- the po#er to hire, +.- the
payment of #ages, +%- the po#er to dismiss, and +,- the po#er to control -- the last being the
most important elementN%0O
Procedural Due Process Observed
Private respondent had been duly informed of the pendency of the illegal dismissal case, but it
chose not to participate therein #ithout any *no#n <ustifiable cause "he labor arbiter sent
notices of hearing or arbitration to the parties, re?uiring them to submit position papers at $C%&
pm on 7ovember $,, $//.N1&O 3espondent Corfarm did not attend the hearing !ccording to
3espondent 743C, there #as no proof that 3espondent Corfarm received such notice 'n any
case, petitioner filed a Motion to !dmit !mended Complaint on December .%, $//. !gain,
another notice for hearing or arbitration on 9anuary 8, $//% #as sent to the partiesN1$O "his
#as received by petitionerKs counsel as evidenced by the registry return receipt duly signed by
private respondentKs counsel, !tty !lfonso Bince, 9r 't #as only on 9anuary .0, $//%, ho#ever,
that !tty Bince entered his appearance as counsel for 3espondent CorfarmN1.O On May $&,
$//%, Corfarm #as again given a ne# period of ten +$&- days #ithin #hich to submit its position
paper and documentary evidenceD Lother#ise, Nthe labor arbiterO #ill be constrained to resolve
122
this case based on available evidence on recordMN1%O !s evidenced by a registry return receipt,
a copy of said directive #as received by respondentKs counsel on May .:, $//% )till and all,
Corfarm failed to file its position paper Clearly, private respondent #as given an opportunity to
present its evidence, but it failed or refused to avail itself of this opportunity #ithout any legal
reason Due process is not violated #here a person is given the opportunity to be heard, but
chooses not to give his side of the caseN1,O
4abor !rbiterKs Decision Based
on Credible, Competent and )ubstantial 5vidence
Contrary to the conclusions of the 743C and the arguments of private respondent, the findings
of the labor arbiter on the ?uestion of illegal dismissal #ere based on credible, competent and
substantial evidence
't is to be borne in mind that proceedings before labor agencies merely re?uire the parties to
submit their respective affidavits and position papers !dversarial trial is addressed to the
sound discretion of the labor arbiter "o establish a cause of action, only substantial evidence is
necessary, ie, such relevant evidence as a reasonable mind might accept as ade?uate to
support a conclusion, even if other minds e?ually reasonable might conceivably opine
other#iseN1:O !s ruled in Manalo vs 3oldan-ConfesorCN11O
LClear and convincing proof is X= = = more than mere preponderance, but not to e=tent of such
certainty as is re?uired beyond reasonable doubt as in criminal cases = = =K +fnC Blac*Ks 4a#
Dictionary, :th 5d, p ..8, citing Fred C Wal*er !gency, 'nc v 4ucas, .$: Ea :%:, .$$ )5 .d
00, /.- #hile substantial evidence X= = = consists of more than a mere scintilla of evidence but
may be some#hat less than a preponderance = = = =K +fnC 'bid, p $.0$, citing Mar*er v Finch,
DC Del, %.. F )upp /&:, /$&- Conse?uently, in the hierarchy of evidentiary values, We find
proof beyond reasonable doubt at the highest level, follo#ed by clear and convincing evidence,
preponderance of evidence, and substantial evidence, in that orderM
5vidence to determine the validity of petitionerKs claims, #hich the labor arbiter relied upon, #as
available to 3espondent 743C "hese pieces of evidence are in the case records, as aptly
pointed out by the solicitor generalCN18O
't must be stressed that labor la#s mandate the speedy administration of <ustice, #ith least
attention to technicalities but #ithout sacrificing the fundamental re?uisites of due process 'n
this light, the 743C, li*e the labor arbiter, is authori(ed to decide cases based on the position
papers and other documents submitted, #ithout resorting to the technical rules of evidenceN10O
Eerily, 3espondent 743C noted several documentary evidence sufficient to arrive at a <ust
decision 'ndeed, the evidence on record clearly supports the conclusion of the labor arbiter
that the petitioners #ere employees of respondent, and that they #ere illegally dismissedN1/O
L"he last issueC 'nstead of sitting do#n #ith the individual complainants or the union officers to
discuss their demands, respondents resorted to mass lay-off of all the members of the union
and replaced them #ith outsiders "his is clearly a case of union busting #hich !rt .,0 of the
4abor Code prohibits !rt .,0 provides that X't shall be unla#ful for an employer to commit any
of the follo#ing unfair labor practice +a- "o interfere #ith, restrain or coerce employees in the
123
e=ercise of their right to self-organi(ationD +b- = = = +c- "o contract out service or functions being
performed by union members #hen such #ill interfere #ith, restrain or coerce employees in the
e=ercise of their rights to self-organi(ationKM
W;535FO35, both petitions are @3!7"5D 'n @3 7o $$%:,., 3espondent 4aguesmaKs
Orders dated 9anuary ,, $//, and 9anuary .8, $//, are 35E53)5D and )5" !)'D5D #hereas
his Order dated )eptember 8, $//% is 35'7)"!"5D 'n @3 7o $$,/$$, 3espondent 743CKs
3esolutions promulgated on February $1, $//, and March .0, $//, are li*e#ise 35E53)5D
!7D )5" !)'D5 "he 4abor !rbiterKs decision dated )eptember $,, $//% is reinstated #ith
MOD'F'C!"'O7) as set out in this Decision 3espondent 743C is O3D535D to COMP>"5
the monetary benefits a#arded in accordance #ith this Decision and to submit its compliance
thereon #ithin thirty days from notice of this Decision
)O O3D535D
124
R"-a et. (l. vs. NLRC 6G.R. No. L971>:09>% !an"ary 11$ %997
FactsC
3ecords sho# that the petitioners #ere the fishermen-cre# members of 82B )andyman '', one
of several fishing vessels o#ned and operated by private respondent De @u(man Fishing
5nterprises #hich is primarily engaged in the fishing business #ith port and office at Camaligan,
Camarines )ur
For services rendered in the conduct of private respondent's regular business of Gtra#lG fishing,
petitioners #ere paid on percentage commission basis in cash by one Mrs Pilar de @u(man,
cashier of private respondent
On )eptember $$, $/0% upon arrival at the fishing port, petitioners #ere told by 9orge de
@u(man, president of private respondent, to proceed to the police station at Camaligan,
Camarines )ur, for investigation on the report that they sold some of their fish-catch at midsea
to the pre<udice of private respondent Petitioners denied the charge claiming that the same #as
a countermove to their having formed a labor union and becoming members of Defender of
'ndustrial !gricultural 4abor Organi(ations and @eneral Wor*ers >nion +D'!4O@W>- on
)eptember %, $/0%
On March %$, $/0,, after the case #as submitted for resolution, 4abor !rbiter !sisclo )
Coralde rendered a <oint decision dismissing all the complaints of petitioners on a finding that a
G<oint fishing ventureG and not one of employer-employee relationship e=isted bet#een private
respondent and petitioners
'ssueC
"he issue to be resolved in the instant case is #hether or not the fishermen-cre# members of
the tra#l fishing vessel 82B )andyman '' are employees of its o#ner-operator, De @u(man
Fishing 5nterprises, and if so, #hether or not they #ere illegally dismissed from their
employment
;eldC
Fishermen cre# members #ho #ere recruited by one master fisherman locally *no#n as
GmaestroG in charge of recruiting others to complete the cre# members are considered
employees, not industrial partners, of the boat-o#ners !lso, there e=isted an employer-
employee relationship bet#een the boat-o#ner and the fishermen cre# members not only
because they #or*ed for and in the interest of the business of the boat-o#ner but also because
they #ere sub<ect to the control, supervision and dismissal of the boat-o#ner
W;535FO35, in vie# of the foregoing, the petition is @3!7"5D "he ?uestioned resolution of
the 7ational 4abor 3elations Commission dated May %&,$/0: is hereby 35E53)5D and )5"
!)'D5 Private respondent is ordered to reinstate petitioners to their former positions or any
e?uivalent positions #ith %-year bac*#ages and other monetary benefits under the la# 7o
pronouncement as to costs
125
(L&!(N*R4 M(R(G5+N42$ !R. and 8(5L+N4 &N&R4$ petitioners,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N 6S&C4N* *+3+S+4N7 co/posed of
8residin- Co//issioner R(5L 2. (H5+N4$ Co//issioner R4G&L+4 +. R(A(L( and
Co//issioner 3+C24R+(N4 R. C(L(AC(A 6%onente7$ 3+C *&L R4S(R+4 and 3+3( ,+MS$
respondents
,(C2S)
"he parties present conflicting sets of facts
Petitioner !le<andro Maraguinot, 9r maintains that he #as employed by private respondents on
$0 9uly $/0/ as part of the filming cre# #ith a salary of P%8:&& per #ee* !bout four months
later, he #as designated !ssistant 5lectrician #ith a #ee*ly salary of P,&&&&, #hich #as
increased to P,:&&& in May $//& 'n 9une $//$, he #as promoted to the ran* of 5lectrician
#ith a #ee*ly salary of P,8:&&, #hich #as increased to P:%/&& in )eptember $//$
Petitioner Paulino 5nero, on his part, claims that private respondents employed him in 9une
$//& as a member of the shooting cre# #ith a #ee*ly salary of P%8:&&, #hich #as increased
to P,.:&& in May $//$, then to P,8:&& on .$ December $//$
Petitioners' tas*s consisted of loading, unloading and arranging movie e?uipment in the
shooting area as instructed by the cameraman, returning the e?uipment to Eiva Films'
#arehouse, assisting in the Gfi=ingG of the lighting system, and performing other tas*s that the
cameraman and2or director may assign
)ometime in May $//., petitioners sought the assistance of their supervisors, Mrs !le<andria
Cesario, to facilitate their re?uest that private respondents ad<ust their salary in accordance #ith
the minimum #age la# 'n 9une $//., Mrs Cesario informed petitioners that Mr Eic del 3osario
#ould agree to increase their salary only if they signed a blan* employment contract !s
petitioners refused to sign, private respondents forced 5nero to go on leave in 9une $//., then
refused to ta*e him bac* #hen he reported for #or* on .& 9uly $//. Mean#hile, Maraguinot
#as dropped from the company payroll from 0 to .$ 9une $//., but #as returned on .. 9une
$//. ;e #as again as*ed to sign a blan* employment contract, and #hen he still refused,
private respondents terminated his services on .& 9uly $//. Petitioners thus sued for illegal
dismissal before the 4abor !rbiter
;ence, the 4abor !rbiter, in his decision of .& December $//%, decreed as follo#sC
W;535FO35, <udgment is hereby rendered declaring that complainants #ere illegally
dismissed
3espondents are hereby ordered to reinstate complainant to their former positions #ithout loss
NofO seniority rights and pay their bac*#ages starting 9uly .$, $//. to December %$, $//%
temporarily computed in the amount of P%0,&&&&& for complainant Paulino 5nero and
P,1,&&&&& for complainant !le<andro Maraguinot, 9r and thereafter until actually reinstated
3espondents are ordered to pay also attorney's fees e?uivalent to ten +$&S- and2or P0,,&&&&
on top of the a#ard
126
Private respondents appealed to the 743C +doc*eted as 743C 7C3-C! 7o &&1$/:-/,- 'n its
decision of $& February $//:, the 743C found the follo#ing circumstances of petitioners' #or*
Gclearly establishedCG
$ Complainants Npetitioners hereinO #ere hired for specific movie pro<ects
and their employment #as co-ter!inus #ith each movie pro<ect the
completion2termination of #hich are pre-determined, such fact being
made *no#n to complainants at the time of their engagement
=== === ===
. 5ach shooting unit #or*s on one movie pro<ect at a time !nd the #or*
of the shooting units, #hich #or* independently from each other, are not
continuous in nature but depends on the availability of movie pro<ects
% !s a conse?uence of the non-continuous #or* of the shooting units,
the total #or*ing hours logged by complainants in a month sho# e=treme
variations For instance, complainant Maraguinot #or*ed for only :F6
hours in 9une $//$ but logged a total of :G9H6 hours in 9anuary $//.
Complainant 5nero logged a total of only 9:64 hours in )eptember $//$
but #or*ed for :G996 hours the ne=t month, October $//$
, Further sho#n by respondents is the irregular #or* schedule of
complainants on a daily basis Complainant Maraguinot #as supposed to
report on &: !ugust $//$ but reported only on %& !ugust $//$, or a gap
of .: days Complainant 5nero #or*ed on $& )eptember $//$ and his
ne=t scheduled #or*ing day #as .0 )eptember $//$, a gap of $0 days
: "he e=tremely irregular #or*ing days and hours of complainants' #or*
e=plain the lump sum payment for complainants' services for each movie
pro<ect ;ence, complainants #ere paid a standard #ee*ly salary
regardless of the number of #or*ing days and hours they logged in
Other#ise, if the principle of Gno #or* no payG #as strictly applied,
complainants' earnings for certain #ee*s #ould be very negligible
1 3espondents also alleged that complainants #ere not prohibited from
#or*ing #ith such movie companies li*e 3egal, )ei*o and FP9
Productions #henever they are not #or*ing for the independent movie
producers engaged by respondents "his allegation #as never
rebutted by complainants and should be deemed admitted
"he 743C, in reversing the 4abor !rbiter, then concluded that these circumstances, ta*en
together, indicated that complainants +herein petitioners- #ere Gpro<ect employeesG
!fter their motion for reconsideration #as denied by the 743C in its 3esolution of 1 !pril $//:,
petitioners filed the instant petition, claiming that the 743C committed grave abuse of discretion
amounting to lac* or e=cess of <urisdiction inC +$- finding that petitioners #ere pro<ect employeesD
+.- ruling that petitioners #ere not illegally dismissedD and +%- reversing the decision of the 4abor
!rbiter
127
"o support their claim that they #ere regular +and not pro<ect- employees of private
respondents, petitioners cited their performance of activities that #ere necessary or desirable in
the usual trade or business of private respondents and added that their #or* #as continuous,
ie, after one pro<ect #as completed they #ere assigned to another pro<ect Petitioners thus
considered themselves part of a #or* pool from #hich private respondents dre# #or*ers for
assignment to different pro<ects Petitioners lamented that there #as no basis for the 743C's
conclusion that they #ere pro<ect employees, #hile the associate producers #ere independent
contractorsD and thus reasoned that as regular employees, their dismissal #as illegal since the
same #as premised on a Gfalse cause,G namely, the completion of a pro<ect, #hich #as not
among the causes for dismissal allo#ed by the 4abor Code
Private respondents reiterate their version of the facts and stress that their evidence supports
the vie# that petitioners are pro<ect employeesD point to petitioners' irregular #or* load and #or*
scheduleD emphasi(e the 743C's finding that petitioners never controverted the allegation that
they #ere not prohibited from #or*ing #ith other movie companiesD and as* that the facts be
vie#ed in the conte=t of the peculiar characteristics of the movie industry
"he Office of the )olicitor @eneral +O)@- is convinced that this petition is improper since
petitioners raise ?uestions of fact, particularly, the 743C's finding that petitioners #ere pro<ect
employees, a finding supported by substantial evidenceD and submits that petitioners' reliance
on !rticle .0& of the 4abor Code to support their contention that they should be deemed regular
employees is misplaced, as said section Gmerely distinguishes bet#een t#o types of
employees, ie, regular employees and casual employees, for purposes of determining the right
of an employee to certain benefitsG
"he O)@ li*e#ise re<ects petitioners' contention that since they #ere hired not for one pro<ect,
but for a series of pro<ects, they should be deemed regular employees Citing 'a!ansag v
N&RC, the O)@ asserts that #hat matters is that there #as a time-frame for each movie pro<ect
made *no#n to petitioners at the time of their hiring 'n closing, the O)@ disagrees #ith
petitioners' claim that the 743C's classification of the movie producers as independent
contractors had no basis in fact and in la#, since, on the contrary, the 743C Gtoo* pains in
e=plaining its basisG for its decision
!s regards the propriety of this action, #hich the Office of the )olicitor @eneral ta*es issue #ith,
#e rule that a special civil action for certiorari under 3ule 1: of the 3ules of Court is the proper
remedy for one #ho complains that the 743C acted in total disregard of evidence material to or
decisive of the controversy
%:
'n the instant case, petitioners allege that the 743C's conclusions
have no basis in fact and in la#, hence the petition may not be dismissed on procedural or
<urisdictional grounds
+SS5&)
$ Whether an employer-employee relationship e=isted bet#een petitioners and private
respondents or any one of private respondents
. Whether petitioners #ere illegally dismissed
R5L+NG)
"he Court's ruling here is meant precisely to give life to the constitutional policy of strengthening
the labor sector, but, #e stress, not at the e=pense of management 4est it be misunderstood,
128
this ruling does not mean that simply because an employee is a pro<ect or #or* pool employee
even outside the construction industry, he is deemed, i"so Aure, a regular employee !ll that #e
hold today is that once a pro<ect or #or* pool employee has beenC
+$- continuously, as opposed to intermittently, re-hired by the same employer for the same
tas*s or nature of tas*sD and
+.- these tas*s are vital, necessary and indispensable to the usual business or trade of the
employer, then the employee must be deemed a regular employee,pursuant to !rticle .0& of the
4abor Code and <urisprudence
"o rule other#ise #ould allo# circumvention of labor la#s in industries not falling #ithin the
ambit of Policy 'nstruction 7o .&2Department Order 7o $/, hence allo#ing the prevention of
ac?uisition of tenurial security by pro<ect or #or* pool employees #ho have already gained the
status of regular employees by the employer's conduct
'n closing then, as petitioners had already gained the status of regular employees, their
dismissal #as un#arranted, for the cause invo*ed by private respondents for petitioners'
dismissal, vizC completion of pro<ect, #as not, as to them, a valid cause for dismissal under
!rticle .0. of the 4abor Code !s such, petitioners are no# entitled to bac* #ages and
reinstatement, #ithout loss of seniority rights and other benefits that may have accrued
7evertheless, follo#ing the principles of Gsuspension of #or*G and Gno payG bet#een the end of
one pro<ect and the start of a ne# one, in computing petitioners' bac* #ages, the amounts
corresponding to #hat could have been earned during the periods from the date petitioners
#ere dismissed until their reinstatement #hen petitioners' respective )hooting >nits #ere not
underta*ing any movie pro<ects, should be deducted
Petitioners #ere dismissed on .& 9uly $//., at a time #hen 3epublic !ct 7o 18$: #as already
in effect Pursuant to )ection %, thereof #hich amended )ection .8/ of the 4abor Code of the
Philippines and Busta!ante v N&RC, petitioners are entitled to receive full bac* #ages from the
date of their dismissal up to the time of their reinstatement, #ithout deducting #hatever earnings
derived else#here during the period of illegal dismissal, sub<ect ho#ever, to the above
observations
W;535FO35, the instant petition is @3!7"5D "he assailed decision of the 7ational 4abor
3elations Commission in 743C 7C3 C! 7o &&1$/:-/, dated &$ February $//:, as #ell as its
3esolution dated 1 !pril $//:, are hereby !77>445D and )5" !)'D5 for having been
rendered #ith grave abuse of discretion, and the decision of the 4abor !rbiter in 743C 7C3
Case 7o &&-&8-&%//,-/. is 35'7)"!"5D, sub<ect, ho#ever, to the modification above
mentioned in the computation of bac* #ages7o pronouncement as to costs
129
4rlando ,ar/ Groves (ssociation vs NLRC
.// )C3! %1,
@3 7o $./&81 7ovember .:, $//0
PartiesC
O34!7DO F!3M) @3OW53) !))OC'!"'O72@4'C53'O !YOE53, petitioner,
vs
";5 ;O7O3!B45 7!"'O7!4 4!BO3 354!"'O7) COMM'))'O7 +F'F"; D'E')'O7-,
!7"O7'O P!J>'", 5)";53 BO7@@O", F3!7C')CO B!>@, 45OC!D'O O3DO7O,
35B5CC! MO357, M!3C54'7! ;O7"'E53O), M!3"'7 O3DO7O, "'"O O3DO7O, F5
O3DO7O, 537'5 CO4O7, 5>)"'J>'O @54DO, D!77A )!M, 9O54 P'!MO7"5, F5D53'CO
P!)"O453O, E'3@'7'! B>)!7O, 5D'4M'3O !4D'O7, 5>@57'O B5"'C!7, 93 and
B537!3DO OP53'O, respondents
3omero, 9
FactsC
Petitioner Orlando Farms @ro#ers !ssociation, #ith co-petitioner @licerio !Bover as its
President, is an association of lando#ners engaged in the production of e=port ?uality bananas
located in Iinamayan, )to "omas, Davao del 7orte, established for the sole purpose of dealing
collectively #ith )tanfilco on matters concerning technical services, canal maintenance,
irrigation and pest control, among others 3espondents, on the other hand, #ere hired as farm
#or*ers by several member-lando#ners butD nonetheless, #ere made to perform functions as
pac*ers and harvesters in the plantation of petitioner association
!fter respondents #ere dismissed on various dates from 9anuary 0, $//% to 9uly %&,
$//,, several complaints #ere filed against petitioner for illegal dismissal and monetary
benefits
'ssuesC
Petitioner alleged that the 743C erred in finding that respondents #ere its employees
and not of the individual lando#ners #hich fact can easily be deduced from the payments made
by the latter of respondent's )ocial )ecurity )ystem +)))- contributions Moreover, it could
have never e=ercised the po#er of control over them #ith regard to the manner and method by
#hich the #or* #as to be accomplished, #hich authority remain vested #ith the lando#ners
despite becoming members thereof
;eldC
;eld in the case of Filipinas Broadcasting 7et#or*, 'nc v 743C, % the follo#ing are generally
considered in the determination of the e=istence of an employer-employee relationshipD
+$- the manner of selection and engagementD
+.- the payment of #agesD
+%- the presence or absence of the po#er of dismissalD
+,- the presence or absence of the po#er of controlD
During the subsistence of the association, several circulars and memoranda #ere issued
concerning, among other things, absences #ithout formal re?uest, loitering in the #or* area and
disciplinary measures #ith #hich every #or*er is en<oined to comply Furthermore, the
employees #ere issued identification cards #hich the Court, in the case of Domasig v
130
743C, construed, not only as a security measure but mainly to identify the holder as a bonafide
employee of the firm ;o#ever, #hat ma*es the relationship e=plicit is the po#er of the
petitioner to enter into compromise agreements involving money claims filed by three of its
employees, namelyC 4orna Pa?uit, 4ovella Dorlones and 9asmine 5spanola
'n spite of the over#helming evidence sufficient to <ustify a conclusion that respondents
#ere indeed employees of petitioner, the latter, nevertheless, maintain the preposterous claim
that the 'D card, circulars and memoranda #ere issued merely to facilitate the efficient use of
common resources, as #ell as to promote uniform rules in the #or* establishment
"he observations made by the 743C #hen it ruled that, #hile the original purpose of the
formation of the association #as merely to provide the lando#ners a unified voice in dealing
#ith )tanfilco, petitioner ho#ever e=ceeded its avo#ed intentions #hen its subse?uent actions
reenforced only too clearly its admitted role of employer
Factual findings of the 743C, particularly #hen they coincide #ith those of the 4abor
!rbiter, are accorded respect, even finality, and #ill not be disturbed for as long as such findings
are supported by substantial evidence
't is settled that in termination disputes, the employer bears the burden of proving that
the dismissal is for <ust cause, failing #hich it #ould mean that the dismissal is not <ustified and
the employer is entitled to reinstatement "he dismissal of employees must be made #ithin the
parameters of the la# and pursuant to the basic tenets of e?uity, <ustice and fair play 'n Brahm
'ndustries, 'nc v 743C, the Court e=plained that there are t#o +.- facets of valid termination of
employmentD
+a- the legality of the act of dismissal, ie, the dismissal must be under any of the <ust
causes provided under !rt .0. of the 4abor CodeD and
+b- the legality of the manner of dismissal, #hich means that there must be observance
of the re?uirements of due process, other#ise *no#n as the t#o-notice rule
"hus, Gthe employer is re?uired to furnish the employee #ith a #ritten notice containing a
statement of the cause for termination and to afford said employee ample opportunity to be
heard and to defend himself #ith the assistance of his representative, if he so desires "he
employer is also re?uired to notify the #or*er in #riting of the decision to dismiss him, stating
clearly the reasons thereforeG
DecisionC
W;535FO35, in vie# of the foregoing, the petition is hereby D')M'))5D and the decision of
the 7ational 4abor 3elations Commission dated )eptember 1, $//: is !FF'3M5D sub<ect to the
deletion of the a#ard of moral damages and attorney's fees "he Court, ho#ever, is remanding
this case to 4abor !rbiter 7e#ton 3 )ancho to specify in the dispositive portion of his decision
the names of the respondents and the amount that each is entitled to
131
G.R. No. %%7>%. March 10$ %99#.
N(2+4N(L S5G(R R&,+N&R+&S C4R84R(2+4N$ petitioner$ vs. N(2+4N(L L('4R
R&L(2+4NS C4MM+SS+4N and N'SR S58&R3+S4RA 5N+4N$ 68(C+.57 25C8$
respondents.
9ose Mario C Bunag for petitioner
"he )olicitor @eneral and the Chief 4egal Officer, 743C, for public respondent
Toilo E de la Cru( for private respondent
D 5 C ' ) ' O 7
35@!4!DO, 9 pC
,acts) Petitioner 7ational )ugar 3efineries Corporation, a corporation #hich is fully o#ned and
controlled by the @overnment, operates three +%- sugar refineries located at Bu*idnon, 'loilo and
Batangas "he Batangas refinery #as privati(ed on !pril $$, $//. pursuant to Proclamation 7o
:&
On 9une $, $/00, petitioner implemented a 9ob 5valuation +95- Program affecting all
employees, from ran*-and-file to department heads !s a result, all positions #ere re-evaluated,
and all employees including the members of respondent union #ere granted salary ad<ustments
and increases in benefits commensurate to their actual duties and functions
We glean from the records that for about ten years prior to the 95 Program, the members of
respondent union #ere treated in the same manner as ran*-and file employees !s such, they
used to be paid overtime, rest day and holiday pay With the implementation of the 95 Program,
the follo#ing ad<ustments #ere madeC +$- the members of respondent union #ere re-classified
under levels )-: to )-0 #hich are considered managerial staff for purposes of compensation
and benefitsD +.- there #as an increase in basic pay of the average of :&S of their basic pay
prior to the 95 Program, #ith the union members no# en<oying a #ide gap +P$,.1/&& per
month- in basic pay compared to the highest paid ran*-and-file employeeD +%- longevity pay #as
increased on top of alignment ad<ustmentsD +,- they #ere entitled to increased company CO4!
of P..:&& per monthD +:- there #as a grant of P$&&&& allo#ance for rest day2holiday #or*
"#o years after the implementation of the 95 Program, the members of herein respondent union
filed a complainant #ith the e=ecutive labor arbiter for non-payment of overtime, rest day and
holiday pay allegedly in violation of !rticle $&& of the 4abor Code
5=ecutive 4abor !rbiter decided in favour of labor
3espondent 7ational 4abor 3elations Commission +743C- affirmed the decision of the labor
arbiter on the ground that the members of respondent union are not managerial employees, as
defined under !rticle .$. +m- of the 4abor Code and, therefore, they are entitled to overtime,
rest day and holiday pay 3espondent 743C declared that these supervisory employees are
merely e=ercising recommendatory po#ers sub<ect to the evaluation, revie# and final action by
132
their department headsD their responsibilities do not re?uire the e=ercise of discretion and
independent <udgmentD they do not participate in the formulation of management policies nor in
the hiring or firing of employeesD and their main function is to carry out the ready policies and
plans of the corporation
+ss"e) Whether supervisory employees, should be considered as officers or members of the
managerial staff, and hence are not entitled to overtime rest day and holiday pay
Held) 't is not disputed that the members of respondent union are supervisory employees, as
defined employees, as defined under !rticle .$.+m-, Boo* E of the 4abor Code on 4abor
3elations, #hich readsC
G+m- 'Managerial employee' is one #ho is vested #ith po#ers or prerogatives to lay do#n and
e=ecute management policies and2or to hire, transfer, suspend, lay-off, recall, discharged,
assign or discipline employees )upervisory employees are those #ho, in the interest of the
employer effectively recommend such managerial actions if the e=ercise of such authority is not
merely routinary or clerical in nature but re?uires the use of independent <udgment !ll
employees not falling #ithin any of those above definitions are considered ran*-and-file
employees of this Boo*G
3espondent 743C, in holding that the union members are entitled to overtime, rest day and
holiday pay, and in ruling that the latter are not managerial employees, adopted the definition
stated in the afore?uoted statutory provision
Petitioner, ho#ever, avers that for purposes of determining #hether or not the members of
respondent union are entitled to overtime, rest day and holiday pay, said employees should be
considered as Gofficers or members of the managerial staffG as defined under !rticle 0., Boo* '''
of the 4abor Code on GWor*ing Conditions and 3est PeriodsG and amplified in )ection ., 3ule ',
Boo* ''' of the 3ules to 'mplement the 4abor Code, to #itC
G!rt 0. Coverage H "he provisions of this title shall apply to employees in all establishments
and underta*ings #hether for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer #ho are dependent on him
for support, domestic helpers, persons in the personal service of another, and #or*ers #ho are
paid by results as determined by the )ecretary of 4abor in !ppropriate regulations
G!s used herein, 'managerial employees' refer to those #hose primary duty consists of the
management of the establishment in #hich they are employed or of a department or subdivision
thereof, and to other officers or members of the managerial staffG +5mphasis supplied-
=== === ===
')ec . 5=emption H "he provisions of this rule shall not apply to the follo#ing persons if they
?ualify for e=emption under the condition set forth hereinC
=== === ===
+b- Managerial employees, if they meet all of the follo#ing conditions, namelyC
133
+$- "heir primary duty consists of the management of the establishment in #hich they are
employed or of a department or subdivision thereofC
+.- "hey customarily and regularly direct the #or* of t#o or more employees thereinC
+%- "hey have the authority to hire or fire other employees of lo#er ran*D or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any other change of
status of other employees are given particular #eight
+c- Officers or members of a managerial staff if they perform the follo#ing duties and
responsibilitiesC
+$- "he primary duty consists of the performance of #or* directly related to management
policies of their employerD
+.- Customarily and regularly e=ercise discretion and independent <udgmentD
+%- +i- 3egularly and directly assist a proprietor or a managerial employee #hose primary duty
consists of the management of the establishment in #hich he is employed or subdivision
thereofD or +ii- e=ecute under general supervision #or* along speciali(ed or technical lines
re?uiring special training, e=perience, or *no#ledgeD or +iii- e=ecute under general supervision
special assignments and tas*sD and
+,- Who do not devote more .& percent of their hours #or*ed in a #or*-#ee* to activities #hich
are not directly and closely related to the performance of the #or* described in paragraphs +$-,
+.-, and aboveG
't is the submission of petitioner that #hile the members of respondent union, as supervisors,
may not be occupying managerial positions, they are clearly officers or members of the
managerial staff because they meet all the conditions prescribed by la# and, hence, they are
not entitled to overtime, rest day and supervisory employees 'n other #ords, for purposes of
forming and <oining unions, certification elections, collective bargaining, and so forth, the union
members are supervisory employees 'n terms of #or*ing conditions and rest periods and
entitlement to the ?uestioned benefits, ho#ever, they are officers or members of the managerial
staff, hence they are not entitled thereto
While the Constitution is committed to the policy of social <ustice and the protection of the
#or*ing class, it should not be supposed that every labor dispute #ill be automatically decided
in favor of labor Management also has its o#n rights #hich, as such, are entitled to respect and
enforcement in the interest of simple fair play Out of its concern for those #ith less privileges in
life, this Court has inclined more often than not to#ard the #or*er and upheld his cause in his
conflicts #ith the employer )uch favoritism, ho#ever, has not blinded us to the rule that <ustice
is in every case for the deserving, to be dispensed in the light of the established facts and the
applicable la# and doctrine :
"he ?uestion #hether a given employee is e=empt from the benefits of the la# is a factual one
dependent on the circumstances of the particular case, 'n determining #hether an employee is
#ithin the terms of the statutes, the criterion is the character of the #or* performed, rather than
the title of the employee's position
134
! cursory perusal of the 9ob Ealue Contribution )tatements 8 of the union members #ill readily
sho# that these supervisory employees are under the direct supervision of their respective
department superintendents and that generally they assist the latter in planning, organi(ing,
staffing, directing, controlling communicating and in ma*ing decisions in attaining the company's
set goals and ob<ectives "hese supervisory employees are li*e#ise responsible for the effective
and efficient operation of their respective departments More specifically, their duties and
functions include, among others, the follo#ing operations #hereby the employeeC
$- assists the department superintendent in the follo#ingC
a- planning of systems and procedures relative to department activitiesD
b- organi(ing and scheduling of #or* activities of the department, #hich includes employee
shifting scheduled and manning complementD
c- decision ma*ing by providing relevant information data and other inputsD
d- attaining the company's set goals and ob<ectives by giving his full supportD
e- selecting the appropriate man to handle the <ob in the departmentD and
f- preparing annual departmental budgetD
.- observes, follo#s and implements company policies at all times and recommends disciplinary
action on erring subordinatesD
%- trains and guides subordinates on ho# to assume responsibilities and become more
productiveD
,- conducts semi-annual performance evaluation of his subordinates and recommends
necessary action for their development2advancementD
:- represents the superintendent or the department #hen appointed and authori(ed by the
formerD
1- coordinates and communicates #ith other inter and intra department supervisors #hen
necessaryD
8- recommends disciplinary actions2promotionsD
0- recommends measures to improve #or* methods, e?uipment performance, ?uality of service
and #or*ing conditionsD
/- sees to it that safety rules and regulations and procedure and are implemented and follo#ed
by all 7!)>35FCO employees, recommends revisions or modifications to said rules #hen
deemed necessary, and initiates and prepares reports for any observed abnormality #ithin the
refineryD
135
$&- supervises the activities of all personnel under him and goes to it that instructions to
subordinates are properly implementedD and
$$- performs other related tas*s as may be assigned by his immediate superior
From the foregoing, it is apparent that the members of respondent union discharge duties and
responsibilities #hich ineluctably ?ualify them as officers or members of the managerial staff, as
defined in )ection ., 3ule ' Boo* ''' of the aforestated 3ules to 'mplement the 4abor Code
>nder the facts obtaining in this case, #e are constrained to agree #ith petitioner that the union
members should be considered as officers and members of the managerial staff and are,
therefore, e=empt from the coverage of !rticle 0. Perforce, they are not entitled to overtime,
rest day and holiday
W;535FO35, the impugned decision and resolution of respondent 7ational 4abor 3elations
Commission, are hereby !77>445D and )5" !)'D5 for having been rendered and adopted
#ith grave abuse of discretion, and the basic complaint of private respondent union is
D')M'))5D
136
(524 '5S 2R(NS84R2 SAS2&MS$ +NC. vs. (N24N+4 '(52+S2(
G.R. No. %:>#>7 May %>$ 1:
,actsC 3espondent !ntonio Bautista has been employed by petitioner !uto Bus "ransport
)ystems, 'nc +!utobus-, as driver-conductor #ith travel routes Manila-"uguegarao via Baguio,
Baguio- "uguegarao via Manila and Manila-"abu* via Baguio 3espondent #as paid on
commission basis, 8S of the total gross income per travel, on a t#ice a month basis While he
#as driving he accidentally bumped the rear portion of !utobus 7o $., 3espondent averred
that the accident happened because he #as compelled by the management to go bac* to
3o=as, 'sabela, although he had not slept for almost ., hours, as he had <ust arrived in Manila
from 3o=as, 'sabela 3espondent further alleged that he #as not allo#ed to #or* until he fully
paid the amount of P8:,::$:&, representing thirty percent +%&S- of the cost of repair of the
damaged buses and that despite respondentKs pleas for reconsideration, the same #as ignored
by management !fter a month, management sent him a letter of termination Bautista instituted
a Complaint for 'llegal Dismissal #ith Money Claims for nonpayment of $%
th
month pay and
service incentive leave pay against !utobus
+ss"e) Whether or not Bautista, #ho is paid on purely commission basis, is entitled to the grant
of service incentive leave pay
HeldC 5mployees engaged on tas* or contract basis or purely commission basis are not
automatically e=empted from the grant of service incentive leave, unless, they fall under the
classification of field personnel
LField "ersonnelG is not merely concerned #ith the location #here the employee regularly
performs his duties but also #ith the fact that the employeeKs performance is unsupervised by
the employer "hey are those #ho regularly perform their duties a#ay from the principal place
of business of the employer and #hose actual hours of #or* in the field cannot be determined
#ith reasonable certainty "hus, in order to conclude #hether an employee is a field employee,
it is also necessary to ascertain if actual hours of #or* in the field can be determined #ith
reasonable certainty by the employer 'n so doing, an in?uiry must be made as to #hether or not
the employeeKs time and performance are constantly supervised by the employer
"he respondent is not a field personnel but a regular employee #ho performs tas*s
usually necessary and desirable to the usual trade of petitionerKs business !ccordingly,
respondent is entitled to the grant of service incentive leave 't is of <udicial notice that along the
routes that are plied by these bus companies, there are its inspectors assigned at strategic
places #ho board the bus and inspect the passengers, ==== "here is also the mandatory once-
a-#ee* car barn or shop day, #here the bus is regularly chec*ed as to its mechanical, electrical
=== "hey too, must be at specific place at specified time, as they generally observe prompt
departure and arrival from their point of origin to their point of destination 'n each and every
depot, there is al#ays the Dispatcher #hose function is precisely to see to it that the bus and its
cre# leave the premises at specific times and arrive at the estimated proper time "hese, are
present in the case at bar "he driver, the complainant herein, #as therefore under constant
supervision #hile in the performance of this #or* ;e cannot be considered a field personnel
137
5N+4N 4, ,+L+8R4 &M8L4A&&S vs '&N+GN4 3+3(R$ !R.
G.R. No. 791:: !an"ary 1$ %991
,acts) On 7ovember 0, $/0:, respondent Filipro, 'nc +no# 7estle Philippines, 'nc- filed #ith
the 7ational 4abor 3elations Commission +743C- a petition for declaratory relief see*ing a
ruling on its rights and obligations respecting claims of its monthly paid employees for holiday
pay in the light of the Court's decision in C,artered Ban- 3!"loyees Association v )"le
Both Filipro and the >nion of Filipino 5mployees +>F5- agreed to submit the case for
voluntary arbitration and appointed respondent Benigno Eivar, 9r as voluntary arbitrator On
9anuary ., $/0&, !rbitrator Eivar rendered a decision directing Filipro to pay its monthly paid
employees holiday pay pursuant to !rticle /, of the Code, sub<ect only to the e=clusions and
limitations specified in !rticle 0. and such other legal restrictions as are provided for in the
Code
Filipro filed a motion for clarification see*ing +$- the limitation of the a#ard to three years,
+.- the e=clusion of salesmen, sales representatives, truc* drivers, merchandisers and medical
representatives from the a#ard of the holiday pay, and +%- deduction from the holiday pay a#ard
of overpayment for overtime, night differential, vacation and sic* leave benefits due to the use of
.:$ divisor Petitioner >F5 ans#ered that the a#ard should be made effective from the date of
effectivity of the 4abor Code, that their sales personnel are not field personnel and are therefore
entitled to holiday pay, and that the use of .:$ as divisor is an established employee benefit
#hich cannot be diminished
On 9anuary $,, $/01, the respondent arbitrator issued an order declaring that the
effectivity of the holiday pay a#ard shall retroact to 7ovember $, $/8,, the date of effectivity of
the 4abor Code ;e ad<udged, ho#ever, that the company's sales personnel are field personnel
and, as such, are not entitled to holiday pay ;e li*e#ise ruled that #ith the grant of $& days'
holiday pay, the divisor should be changed from .:$ to .1$ and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sic* leave pay due to the use of .:$
days as divisor
Both 7estle and >F5 filed their respective motions for partial reconsideration
3espondent !rbitrator treated the t#o motions as appeals and for#arded the case to the 743C
#hich issued a resolution remanding the case to the respondent arbitrator on the ground that it
has no <urisdiction to revie# decisions in voluntary arbitration cases pursuant to !rticle .1% of
the 4abor Code ;o#ever, in a letter the respondent arbitrator refused to ta*e cogni(ance of the
case reasoning that he had no more <urisdiction to continue as arbitrator because he had
resigned from service
+ss"e) Whether or not 7estle's sales personnel are entitled to holiday pay
Held) >nder !rticle 0., field personnel are not entitled to holiday pay )aid article defines field
personnel as Gnon-agritultural employees #ho regularly perform their duties a#ay from the
principal place of business or branch office of the employer and #hose actual hours of #or* in
the field cannot be determined #ith reasonable certaintyG
"he Court finds that the clause G#hose time and performance is unsupervised by the
employerG did not amplify but merely interpreted and e=pounded the clause G#hose actual hours
of #or* in the field cannot be determined #ith reasonable certaintyG "he former clause is still
138
#ithin the scope and purvie# of !rticle 0. #hich defines field personnel ;ence, in deciding
#hether or not an employee's actual #or*ing hours in the field can be determined #ith
reasonable certainty, ?uery must be made as to #hether or not such employee's time and
performance is constantly supervised by the employer
"he respondent arbitrator's order to change the divisor from .:$ to .1$ days #ould
result in a lo#er daily rate #hich is violative of the prohibition on non-diminution of benefits
found in !rticle $&& of the 4abor Code "o maintain the same daily rate if the divisor is ad<usted
to .1$ days, then the dividend, #hich represents the employee's annual salary, should
correspondingly be increased to incorporate the holiday pay "here is thus no merit in
respondent 7estle's claim of overpayment of overtime and night differential pay and sic* and
vacation leave benefits, the computation of #hich are all based on the daily rate, since the daily
rate is still the same before and after the grant of holiday pay
3espondent 7estle's invocation of solutio inde1iti, or payment by mista*e, due to its use
of .:$ days as divisor must fail in light of the 4abor Code mandate that Gall doubts in the
implementation and interpretation of this Code, including its implementing rules and regulations,
shall be resolved in favor of laborG +!rticle ,- 7evertheless, in order to fully settle the issues,
the Court resolved to ta*e up the matter of effectivity of the holiday pay a#ard raised by 7estle
!pplying the Loperative factMaforementioned doctrine to the case at bar, it is not far-
fetched that 7estle, relying on the implicit validity of the implementing rule and policy instruction
before this Court nullified them, and thin*ing that it #as not obliged to give holiday pay benefits
to its monthly paid employees, may have been moved to grant other concessions to its
employees, especially in the collective bargaining agreement "his possibility is bolstered by the
fact that respondent 7estle's employees are among the highest paid in the industry With this
consideration, it #ould be unfair to impose additional burdens on 7estle #hen the non-payment
of the holiday benefits up to $/0, #as not in any #ay attributed to 7estle's fault
"he Court thereby resolves that the grant of holiday pay be effective, not from the date
of promulgation of the Chartered Ban* case nor from the date of effectivity of the 4abor Code,
but from the date of promulgation of the 'B!! case
139
S(N M+G5&L 'R&.&RA$ +NC.$ vs *&M4CR(2+C L('4R 4RG(N+?(2+4N$ &2 (L.$
G.R. No. L9%8#:# !"ly #%$ %9>#
,(C2S)
Where after the morning roll call the outside or field sales personnel leave the plant of the
company to go on their respective sales routes and they do not have a daily time record but the
sales routes are so planned that they can be completed #ithin 0 hours at most, and they
received monthly salaries and sales commissions in variable amounts, so they are made to
#or* beyond the re?uired eight hours similar to piece-rate #or*, pa*iao, or commission basis
regardless of the time employed, and the employees participation depends on their industry, it is
held that the 5ight ;our 4abor 4a# has no application to said outside or field sales personnel
and that they are not entitled to overtime compensation
+SS5&)
Whether the 5ight ;our 4abor 4a# has application to Outside or Field )ales Personnel and
#hether they are entitled to overtime compensation
R5L+NG)
"he 5ight-;our 4abor 4a# only has application #here an employee or laborer is paid on a
monthly or daily basis, or is paid a monthly or daily compensation, in #hich case, if he is made
to #or* beyond the re?uisite period of 0 hours, he should be paid the additional compensation
prescribed by la# "his la# has no application #hen the employee or laborer is paid on a piece-
#or*, Gpa*iaoG, or commission basis, regardless of the time employed "he philosophy behind
this e=emption is that his earnings in the form of commission based on the gross receipts of the
day ;is participation depends upon his industry so that the more hours he employs in the #or*
the greater are his gross returns and the higher his commission "his philosophy is better
e=plained in 9e#el "ea Co v Williams, CC! O*la, $$0 F .d .&., as follo#sC
"he reasons for e=cluding an outside salesman are fairly apparent )uch salesman, to a
greater e=tent, #or*s individually "here are no restrictions respecting the time he shall
#or* and he can earn as much or as little, #ithin the range of his ability, as his ambition
dictates 'n lieu of overtime he ordinarily receives commissions as e=tra compensation
;e #or*s a#ay from his employer's place of business, is not sub<ect to the personal
supervision of his employer, and his employer has no #ay of *no#ing the number of
hours he #or*s per day
140
Man"el L. Lara$ et al. vs 8etronilo *el Rosario$ !r.
!pril .&, $/:, @3 7o 4-1%%/
Montemayor, 9C
On $/:&, Petronilo Del 3osario 9r, defendant, o#ner of the t#enty five ta=i cabs,
operated a ta=i business, of #hich he employed three mechanics and ,/ chauffeurs On
)eptember ,, $/:&, #ithout giving the said mechanics and chauffeurs %& days advance notice,
Del 3osario sold his .: cabs to another transportation company #hich resulted to
unemployment to the three mechanics and ,/ chauffeurs "hey brought this action against Del
3osario to recover compensation for overtime #or* rendered beyond eight and on )undays and
legal holidays, and one month salary )ubse?uently, the three mechanics #ithdre# their claims,
so only the ,/ chauffeurs remained as plaintiffs "he defendant filed a motion for dismissal of
the complaint on the ground that it stated no cause of action and the trial court for the time being
denied the motion saying that it #ill be considered #hen the case #as heard on the merits !fter
trial the complaint #as dismissed Plaintiffs appealed from the order of dismissal to the Court of
!ppeals
"he parties are agreed that the plaintiffs as chauffeurs received no fi=ed compensation
based on the hours or the period of time that they #or*ed 3ather, they #ere paid on the
commission basis, that is to say, each driver received .& per cent of the gross returns or
earnings from the operation of his ta=i cab Plaintiffs claim that as a rule, each drive operated a
ta=i $. hours a day #ith gross earnings ranging from P.& to P.:, receiving therefrom the
corresponding .& per cent share ranging from P, to P:, and that in some cases, especially
during )aturdays, )undays, and holidays #hen a driver #or*ed ., hours a day he grossed from
P,& to P:&, thereby receiving a share of from P0 to P$& for the period of t#enty-four hours
"he reason given by the trial court in dismissing the complaint is that the defendant
being engaged in the ta=i or transportation business #hich is a public utility, came under the
e=ception provided by the 5ight-;our 4abor 4a# +Common#ealth !ct 7o ,,,-D and because
plaintiffs did not #or* on a salary basis, that is to say, they had no fi=ed or regular salary or
remuneration other than the .& per cent of their gross earnings Gtheir situation #as therefore
practically similar to piece #or*ers
!s to the month pay +mesada- under article %&. of the Code of Commerce, article ..8&
of the ne# Civil Code +3epublic !ct %01- appears to have repealed said !rticle %&. #hen it
repealed the provisions of the Code of Commerce governing !gency "his repeal too* place on
!ugust %&, $/:&, #hen the ne# Civil Code #ent into effect, that is, one year after its publication
in the Official @a(ette "he alleged termination of services of the plaintiffs by the defendant too*
place according to the complaint on )eptember ,, $/:&, that is to say, after the repeal of !rticle
%&. #hich they invo*e Moreover, said !rticle %&. of the Code of Commerce, assuming that it
#ere still in force spea*s of Gsalary corresponding to said monthG commonly *no#n as
GmesadaG 'f the plaintiffs herein had no fi=ed salary either by the day, #ee* or month, then
computation of the month's salary payable #ould be impossible !rticle %&. refers to employees
receiving a fi=ed salary Dr !rturo M "olentino in his boo* entitled GCommentaries and
9urisprudence on the Commercial 4a#s of the Philippines,G Eol $, ,th edition, p $1&, says that
article %&. is not applicable to employees #ithout fi=ed salary
141
M(N+L( 2&RM+N(L C4. +NC. v. C+R
G.R. No. L90%08 !"ly %>$ %9:1
8onente) 8(R(S$ &. J.)
,(C2S) Manila "erminal Company, 'nc undertoo* the arrastre service in some of the piers in
Manila's Port !rea at the re?uest and under the control of the >nited )tates !rmy "he petitioner
hired some thirty men as #atchmen on t#elve-hour shifts at a compensation of P% per day for
the day shift and P1 per day for the night shift
"he #atchmen of the petitioner continued in the service #ith a number of substitutions and
additions, their salaries having been raised during the month of February to P, per day for the
day shift and P1.: per day for the nightshift "he private respondent sent a letter to Department
of 4abor re?uesting that the matter of overtime pay be investigated But nothing #as done by
the Dept of 4abor
4ater on, the petitioner instituted the system of strict eight-hour shifts
"he private respondent filed an amended petition #ith the C'3 praying, among others, that the
petitioner be ordered to pay its #atchmen or police force overtime pay from the commencement
of their employment
By virtue of Customs !dministrative Order 7o 0$ and 5=ecutive Order 7o ..0 of the President
of the Philippines, the entire police force of the petitioner #as consolidated #ith the Manila
;arbor Police of the Customs Patrol )ervice, a @overnment agency under the e=clusive control
of the Commissioner of Customs and the )ecretary of Finance "he Manila "erminal 3elief and
Mutual !id !ssociation #ill hereafter be referred to as the !ssociation
9udge E 9imene( Aanson of the C'3 in his decision ordered the petitioner to pay to its police
force but regards to overtime service after the #atchmen had been integrated into the Manila
;arbor Police, the has no <urisdiction because it affects the Bureau of Customs, an
instrumentality of the @overnment having no independent personality and #hich cannot be sued
#ithout the consent of the )tate
"he petitioner filed a motion for reconsideration "he !ssociation also filed a motion for
reconsideration in so far its other demands #ere dismissed Both resolutions #ere denied
"he public respondent decision #as to pay the private respondents their overtime on regular
days at the regular rate and additional amount of .: percent, overtime on )undays and legal
holidays at the regular rate only, and #atchmen are not entitled to night differential pay for past
services "he petitioner has filed a present petition for certiorari
+SS5&S) %.7 Whether or not the C'3 has no <urisdiction to render a money <udgment involving
obligation in arrearsR
.- Whether or not the agreement under #hich its police force #ere paid certain
specific #ages for t#elve-hour shifts, included overtime compensation
%- Whether or not the nullity or invalidity of the employment contract precludes any
recovery by the !ssociation
142
,- Whether or not the Common#ealth !ct 7o ,,,, does not authori(e recovery of
bac* overtime pay
H&L*) "he )upreme Court affirmed the appealed decision that the petitioner's #atchmen is
entitled to e=tra compensation only from the dates they respectively entered the service of the
petitioner, hereafter to be duly determined by the Court of 'ndustrial 3elations
$- "he Court of 'ndustrial 3elations has no <urisdiction to a#ard a money <udgment #as already
overruled by this Court on the case of Detective P protective Bureau, 'nc vs Court of 'ndustrial
3elations and >nited 5mployees Welfare !ssociation that under Common#ealth !ct 7o $&%
the Court is empo#ered to ma*e the order for the purpose of settling disputes bet#een the
employer and employee
.- Based on the case of Detective P Protective Bureau, 'nc vs Court of 'ndustrial 3elations
and >nited 5mployees Welfare !ssociation, the la# gives them the right to e=tra compensation
!nd they could not be held to have impliedly #aived such e=tra compensation, since it can not
e=pressly be #aived
%- "he employee in rendering e=tra service at the re?uest of his employer has a right to
assume that the latter has complied #ith the re?uirement of the la#, and therefore has obtained
the re?uired permission from the Department of 4abor "his #as based on the case of @otamo
4umber Co vs Court of 'ndustrial 3elations, #herein both parties are in pari delicto Moreover,
the 5ight-;our 4a#, in providing that Gany agreement or contract bet#een the employer and the
laborer or employee contrary to the provisions of this !ct shall be null avoid ab initioM
,- Based on Fair 4abor )tandards !ct of the >nited )tates #hich provides that Gany employer
#ho violates the provisions of section .&1 and section .&8 of this title shall be liable to the
employee or employees affected in the amount of their unpaid minimum #ages or their unpaid
overtime compensation as the case may be,G H a provision not incorporated in Common#ealth
!ct 7o ,,,, our 5ight-;our 4abor 4a#
We cannot agree to the proposition, because sections % and : of Common#ealth !ct ,,,
e=pressly provides for the payment of e=tra compensation in cases #here overtime services are
re?uired, #ith the result that the employees or laborers are entitled to collect such e=tra
compensation for past overtime #or* "o hold other#ise #ould be to allo# an employer to
violate the la# by simply, as in this case, failing to provide for and pay overtime compensation
143
+nterphil Laboratories &/ployees 5nion9 ,,.$ et. al vs. +nterphil Laboratories
FG.R. No. %01810$ *ece/ber %9$ 1%
,acts) 'nterphil 4aboratories 5mployees >nion-FFW is the sole and e=clusive bargaining agent
of the ran*-and-file employees of 'nterphil 4aboratories, 'nc, a company engaged in the
business of manufacturing and pac*aging pharmaceutical products "hey had a Collective
Bargaining !greement +CB!- effective from &$ !ugust $//& to %$ 9uly $//%
Prior to the e=piration of the CB! or sometime in February $//%, !llesandro @ )ala(ar,
$
Eice-
President-;uman 3esources Department of respondent company, #as approached by 7estor
Ocampo, the union president, and ;ernando Clemente, a union director "he t#o union officers
in?uired about the stand of the company regarding the duration of the CB! #hich #as set to
e=pire in a fe# months )ala(ar told the union officers that the matter could be best discussed
during the formal negotiations #hich #ould start soon
'n March $//%, Ocampo and Clemente again approached )ala(ar "hey in?uired once more
about the CB! status and received the same reply from )ala(ar 'n !pril $//%, Ocampo
re?uested for a meeting to discuss the duration and effectivity of the CB! )ala(ar acceded and
a meeting #as held on $: !pril $//% #here the union officers as*ed #hether )ala(ar #ould be
amenable to ma*e the ne# CB! effective for t#o +.- years, starting &$ !ugust $//% )ala(ar,
ho#ever, declared that it #ould still be premature to discuss the matter and that the company
could not ma*e a decision at the moment "he very ne=t day, or on $1 !pril $//%, all the ran*-
and-file employees of the company refused to follo# their regular t#o-shift #or* schedule of
from 1C&& am to 1C&& pm, and from 1C&& pm to 1C&& am !t .C&& pm and .C&& am,
respectively, the employees stopped #or*ing and left their #or*place ?it,out sealing t,e
containers and securing t,e ra? !aterials t,ey ?ere ?or-ing on When )ala(ar in?uired about
the reason for their refusal to follo# their normal #or* schedule, the employees told him to Gas*
the union officersG "o minimi(e the damage the overtime boycott #as causing the company,
)ala(ar immediately as*ed for a meeting #ith the union officers 'n the meeting, 5nrico
@on(ales, a union director, told )ala(ar that the employees #ould only return to their normal
#or* schedule if the company #ould agree to their demands as to the effectivity and duration of
the ne# CB! )ala(ar again told the union officers that the matter could be better discussed
during the formal renegotiations of the CB! )ince the union #as apparently unsatisfied #ith the
ans#er of the company, the overtime boycott continued 'n addition, the employees started to
engage in a #or* slo#do#n campaign during the time they #ere #or*ing, thus substantially
delaying the production of the company
.
On $, May $//%, petitioner union submitted #ith respondent company its CB! proposal, and
the latter filed its counter-proposal
On &% )eptember $//%, respondent company filed #ith the 7ational 4abor 3elations
Commission +743C- a petition to declare illegal petitioner union's Govertime boycottG and G#or*
slo#do#nG #hich, according to respondent company, amounted to illegal stri*e "he case,
doc*eted 743C-7C3 Case 7o &&-&/-&::./-/%, #as assigned to 4abor !rbiter Manuel 3
Caday
On .. October $//%, respondent company filed #ith the 7ational Conciliation and Mediation
Board +7CMB- an urgent re?uest for preventive mediation aimed to help the parties in their CB!
negotiations
%
"he parties, ho#ever, failed to arrive at an agreement and on $: 7ovember
$//%, respondent company filed #ith the Office of the )ecretary of 4abor and 5mployment a
petition for assumption of <urisdiction
144
On ., 9anuary $//,, petitioner union filed #ith the 7CMB a 7otice of )tri*e citing unfair labor
practice allegedly committed by respondent company On $. February $//,, the union staged a
stri*e
On $, February $//,, )ecretary of 4abor 7ieves Confesor issued an assumption order
,
over
the labor dispute On &. March $//,, )ecretary Confesor issued an order directing respondent
company to Gimmediately accept all stri*ing #or*ers, including the fifty-three +:%- terminated
union officers, shop ste#ards and union members bac* to #or* under the same terms and
conditions prevailing prior to the stri*e, and to pay all the unpaid accrued year end benefits of its
employees in $//%G
On &: )eptember $//:, 4abor !rbiter Caday submitted his recommendation to the then
)ecretary of 4abor 4eonardo ! Juisumbing
0
"hen )ecretary Juisumbing approved and
adopted the report in his Order, dated $% !ugust $//8
;ence, the present recourse #here petitioner alleged
+ss"e) Whether or not the ;onorable Fifth Division of Court of !ppeals committed grave abuseR
*ecision) On the matter of the authority and <urisdiction of the )ecretary of 4abor and
5mployment to rule on the illegal stri*e committed by petitioner union, it is undisputed that the
petition to declare the stri*e illegal before 4abor !rbiter Caday #as filed long before the
)ecretary of 4abor and 5mployment issued the assumption order on $, February $//,
;o#ever, it cannot be denied that the issues of Govertime boycottG and G#or* slo#do#nG
amounting to illegal stri*e before 4abor !rbiter Caday are intert#ined #ith the labor dispute
before the 4abor )ecretary 'n fact, on $1 March $//,, petitioner union even as*ed 4abor !rbiter
Caday to suspend the proceedings before him and consolidate the same #ith the case before
the )ecretary of 4abor
"he appellate court also correctly held that the ?uestion of the )ecretary of 4abor and
5mployment's <urisdiction over labor and labor-related disputes #as already settled in
nternational P,ar!aceutical, nc. vs. $on. (ecretary o; &a1or and Associated &a1or Inion
+!4>-
!nent the alleged misappreciation of the evidence proffered by the parties, it is a=iomatic that
the factual findings of the 4abor !rbiter, #hen sufficiently supported by the evidence on record,
must be accorded due respect by the )upreme Court
$.
;ere, the report and recommendation
of 4abor !rbiter Caday #as not only adopted by then )ecretary of 4abor Juisumbing but #as
li*e#ise affirmed by the Court of !ppeals We see no reason to depart from their findings
W;535FO35, the petition is D57'5D D>5 CO>3)5 and the ./ December $/// decision of
the Court of !ppeals is !FF'3M5D
)O O3D535D
145
8an (/erican .orld (irEays Syste/ 3s. 8an (/erican &/ployees (ssociation
G.R. No. L9%>17: ,ebr"ary 1#$ %9>%
,acts)
"he employees of Pan !merican World !ir#ays )ystem alleges that the company does
not provide them of a one-hour brea* period "he employees #ere as*ed to #ait in case of any
emergencies #hile having their brea* or they #ill be reprimanded, thus the petition of the
employees to as* the court for a proper compensation from the employers "he employees
allege that the said one-hour brea* actually constitutes #or*ing over time
+ss"e)
Whether or not the time given to the employees for brea* is considered an over timeR
Held)
"he 'ndustrial Court's order for permanent adoption of a straight 0-hour shift including
the meal period #as but a conse?uence of its finding that the meal hour #as not one of
complete rest, but #as actually a #or* hour, since for its duration, the laborers had to be on
ready call Of course, if the Company practices in this regard should be modified to afford the
mechanics a real rest during that hour +f e=, by installing an entirely different emergency cre#,
or any similar arrangement-, then the modification of this part of the decision may be sought
from the Court belo# !s things no# stand, #e see no #arrant for altering the decision
"he <udgment appealed from is affirmed Costs against appellant
146
5niversity of 8an-asinan ,ac"lty 5nion vs. 5niversity of 8an-asinan
G.R. No. L9>#%11 ,eb"r"ary 1$ %980
,acts)
"he petitionerKs members are full time professors, instructors, and teachers of the respondent
>niversity "he teachers in the college level teach for a normal duration of ten +$&- months in a
school year, divided into t#o +.- semesters of five months each, e=cluding the t#o-month
summer vacation "hese teachers are paid their salaries on a regular monthly basis
'n 7ovember and December, $/0$, the petitionerKs members #ere fully paid their regular
monthly salaries ;o#ever, from 7ovember 8 to December :, during the semestral brea*, they
#ere not paid their emergency cost of living allo#ance+5CO4!- "he >niversity claims that the
teachers are not entitled thereto because the semestral brea* is not an integral part of the
school year and there being no actual services rendered by the teachers during said period, the
principle of L7o #or*, no payM appllies
+ss"e)
Whether or not petitioner members are not entitled to 5CO4! under L7o #or*, no payM principle
Held)
"he L7o #or*, no payM does not apply in the instant case "he petitionerKs members received
their regular salaries during this period 't is clear from the afore?outed provision of the la# that
it contemplates a Lno #or*M situation #here the employees voluntarily absent themselves
Petitioners, in the case at bar certainly do not, ad voluntate!, absent themselves during
semestral brea*s 3ather, they are constrained to ta*e mandatory leave from #or* For this,
they cannot be faulted nor can they be begrudged that #hich is due them under the la# "o a
certain e=tent, the private respondent can specify dates #hen no classes #ould be held )urely,
it #as no the intention of the framers of the la# to allo# employers to #ithhold employee
benefits by simple e=pedient of unilaterally imposing Lno #or*M days and conse?uently avoiding
compliance #ith the mandate of the la# for these days
"hus, the legal principles of L7o #or*, no payD 7o pay, no 5CO4!M must necessarily give #ay to
the purpose of the la# to augment the income of the employees to enable them to cope #ith the
harsh living conditions brought about by inflationD and to protect employees and their #ages
against the ravages brought by these conditions
147
G.R. No. L991>: (pril 19$ %9:7
L5?4N S2&3&*4R+NG C4.$ +NC.$ petitioner,
vs
L5?4N M(R+N& *&8(R2M&N2 5N+4N and 2H& H4N. M4*&S24 C(S2+LL4$ 2H& H4N.
!4S& S. '(52+S2($ 2H& H4N. 3. !+M&N&? A(NS4N and 2H& H4N. !5(N L. L(N2+NG$
!"d-es of the Co"rt of +nd"strial Relations$ respondents
F!C")C
On 9une .$, $/,0, herein respondent 4u(on Marine Department >nion filed a petition #ith the
Court of 'ndustrial 3elations containing several demands against herein petitioner 4u(on
)tevedoring Co, 'nc, among #hich #ere the petition for full recognition of the right of
CO445C"'E5 bargaining, close shop and chec* off ;o#ever, on 9uly $0, $/,0, #hile the case
#as still pending #ith the C'3, said labor union declared a stri*e #hich #as ruled do#n as illegal
by this Court in @3 7o 4-.11& promulgated on May %&, $/:&
!fter the parties had submitted e=haustive memoranda, the trial 9udge rendered a decision on
February $&, $/::, finding that the company gave said employees % free meals every day and
about .& minutes rest after each mealtimeD that they #or*ed from 1C&& am to 1C&& pm every
day including )undays and holidays, and for #or* performed in e=cess of 0 hours, the officers,
patrons and radio operators #ere given overtime pay in the amount of P, each and P. each for
the rest of the cre# up to March, $/,8, and after said date, these payments #ere increased to
P: and P.:&, respectively, until the time of their separation or the stri*e of 9uly $/, $/,0D that
#hen the tugboats under#ent repairs, their personnel #or*ed only 0 hours a day e=cluding
)undays and holidaysD that although there #as an effort on the part of claimants to sho# that
some had #or*ed beyond 1C&& pm, the evidence #as uncertain and indefinite and that
demand #as, therefore, deniedD that respondent Company, by the nature of its business and as
defined by la# +)ection $0-b of Common#ealth !ct as amended- is considered a public service
operator by the Public )ervice Commission in its decision in case 7o %&%:-C entitled
GPhilippine )hipo#ners !ssociation vs 4u(on )tevedoring Co, 'nc, et alG+5=h .%-, and,
therefore, e=empt from paying additional remuneration or compensation for #or* performed on
)undays and legal holidays, pursuant to the provisions of section , of Common#ealth !ct 7o
,,, +Manila 5lectric Co vs Public >tilities 5mployees !ssociation, 8/ Phil, ,&0 ,, Off @a(,
$81&-D and ruled thatC
"he 4u(on Marine Department >nion, through counsel, therefore, filed a motion for
reconsideration praying that the decision of February $&, $/::, be modified so as to declare and
rule that the members of the >nion #ho had rendered services from 1C&& am to 1C&& pm #ere
entitled to , hours' overtime payD that allotted to the ta*ing of their meals should not be
deducted from the , hours of overtime rendered by said employees, that the amounts of P% and
P. set aside for the daily meals of the employees be considered as part of their actual
compensation in determining the amount due to said employees separated from the service
#ithout <ust cause be paid their unearned #ages and salaries from the date of their separation
up to the time the decision in case 4-.11& became finalD and for such other relief as may be <ust
and e?uitable in the premises
148
4u(on )tevedoring Co, 'nc also sought for the reconsideration of the decision only in so far as
it interpreted that the period during #hich a seaman is aboard a tugboat shall be considered as
G#or*ing timeG for the purpose of the 5ight-;our-4abor 4a#
'n pursuance of )ection $ of Common#ealth !ct 7o $&%, as amended by Common#ealth !ct
7o .:, and further amended by Common#ealth !ct 7o ::/, the motions for reconsideration
#ere passed upon by the Court en 1anc, and on 9une 1, $/::, a resolution modifying the
decision of February $&, $/::, #as issued, in the sense that the , hours of overtime #or*
included in the regular daily schedule of #or* from 1C&& am to 1C&& pm should be paid
independently of the so-called Gcoffee-moneyG, after ma*ing a finding that said e=tra amounts
#ere given to cre# members of some tugboats for #or* performed beyond 1C&& pm over a
period of some $1 #ee*s "he Company's motion for reconsideration #as denied
From this resolution, the 4u(on )tevedoring Co, 'nc filed the present petition for certiorari and
#hen the Court of 'ndustrial 3elations, acting upon said Company's motion for clarification,
ruled that the .& minutes' rest given the claimants after mealtime should not be deducted from
the , hours of overtime #or*ed performed by said claimants, petitioner filed a supplemental
petition for certiorari dated )eptember :, $/::, and both petitions #ere given due course by this
Court
'))>5C
W;5";53 O3 7O" "'M5 )P57" BA ! )5!M!7 O7 ";5 );'P );!44 B5 CO7)'D535D
;O>3) WO3I5D
"he rule is that a seaman is not re?uired to leave the premises of the boat in order of period of
rest shall not be counted, it being enough that he ceases to #or*, mar rest completely and leave
at his #ill the spot #here he actually stas #hile #or*ing, go some#here else, #hether #ithin or
outside the premises of said boat 'f these re?uisites are complied #ith, the period of rest shall
not be counted
149
G.R. No. Nos. 8:%11910 March 11$ %99%
!5L+4 N. C(G(M8(N$ S+L3+N4 C. 3+C&R($ !4RG& C. *& C(S2R4$ !5(N+24 R. *&
!&S5S$ (RN4L* !. M+R(N*($ $ M(O+M4 4. R4S&LL4 (N+C&24 L. '&2(N($ 8etitioners$
vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$ (C& M(R+2+M& (G&NC+&S$ +NC.$
Respondents.
P!3!), 9C
FatcsC
Petitioners #ere deployed on May 8, $/0:, and discharged on 9uly .1,$/01
"hereafter, petitioners collectively and2or individually filed complaints for non-payment of
overtime pay, vacation pay and terminal pay against private respondent 'n addition, they
claimed that they #ere made to sign their contracts in blan* 4i*e#ise, petitioners averred that
although they agreed to render services on board the vessel 3io Colorado managed by @olden
4ight Ocean "ransport, 4td, the vessel they actually boarded #as ME G)O'C 'G managed by
Columbus 7avigation "#o +.- petitioners, 9orge de Castro and 9uanito de 9esus, charged that
although they #ere employed as ordinary seamen +O)-, they actually performed the #or* and
duties of !ble )eamen +!B-
Private respondent #as furnished #ith copies of petitioners' complaints and summons, but it
failed to file its ans#er #ithin the reglementary period "hus, on 9anuary $., $/08, an Order #as
issued declaring that private respondent has #aived its right to present evidence in its behalf
and that the cases are submitted for decision
'7 E'5W OF ";5 FO35@O'7@, <udgment is hereby rendered ordering respondent +private
respondent- !ce Maritime !gencies, 'nc to pay the follo#ing complainants +petitioners- in the
amounts opposite their namesC
Private respondent appealed from the PO5!'s Decision to the 743C on !ugust .,, $/08 On
March $1, $/00, the 743C promulgated a Decision, the dispositive portion of #hich readsC
W;535FO35, premises considered, the appealed decision is hereby 35E53)5D and )5"
!)'D5 and another one entered dismissing these cases for lac* of merit +p $,,, 3ecords-
On May 0, $/00, petitioners filed an >rgent Motion for 3econsideration of the 743C's Decision
+p .$&, 3ecords-, but the same #as denied by the 743C for lac* of merit in its 3esolution
dated )eptember $., $/00 +p .$., 3ecords-
$ 3espondent 743C overloo*ed the fact that private respondent company had repeatedly
failed and refused to file its ans#er to petitioners' complaints #ith their comments
. 3espondent Commission erred in reversing and setting aside the PO5! decision and
correspondingly dismissing the appeal of petitioners, allegedly in contravention of la# and
<urisprudence
Private respondent maritime company disclaims the aforesaid allegations of petitioners through
these argumentsC
150
$ !s borne out by the records, its former counsel attended all the hearings before the PO5!
#herein he raised the basis ob<ection that the complaint of petitioners #as so generally couched
that a more detailed pleading #ith supporting documents #as repeatedly re?uested for the latter

. "he 743C never abused its discretion in arriving at assailed decision considering that the
same #as based on the Memorandum on !ppeal dated !ugust $,, $/08 filed
% 'n the hearings conducted by respondent Commission, all the arguments of both parties #ere
properly ventilated and considered by said Commission in rendering its decision
, "he 4abor Code basically provides that the rules of evidence prevailing in courts of la# or
e?uity shall not be controlling and it is the spirit and intention of the Code that the Commission
and its members and 4abor !rbiters should use every and an reasonable means to ascertain
the facts in each case speedily and ob<ectively and #ithout regard to technicalities of la# and
procedure, all in the interest of due processchanroblesvirtualla#library chanrobles virtual la#
library
: Petitioners' motion for reconsideration of the 743C decision did not invo*e the merits of the
case but merely raised purely technical and procedural matters 5ven assuming that private
respondent, technically spea*ing, #aived the presentation of evidence, its appeal to the 743C
#as valid since it involved merely a correct interpretation and clarification of certain provisions of
the contract the validity of #hich has never ?uestioned
"he )olicitor @eneral, arguing for public respondent 743C, contendsC
$ Petitioners' assumption that a party #ho is declared to have #aived his right to present
evidence also loses his right to appeal from an adverse <udgment made against him is a falsity
for, although the technical rules of evidence prevailing in the courts of la# or e?uity do not bind
labor tribunals, even the 3ules of Court allo#s a party declared in default to appeal from said
<udgment by attaching the propriety of the relief a#arded thereinl
. "he 743C did not abuse its discretion in the rendition of sub<ect decision because the
evidence presented by petitioners in support of their complaint is by itself sufficient to bac* up
the decision "he issue of the disallo#ance of overtime pay stems from an interpretation of
particular provisions
Petitioners' manifest pursuit of their claims before the PO5! in the absence of the ans#er
produced the effect of condoning the failure of private respondent to submit the said ans#er
"heir submission to the PO5!'s authority #ithout ?uestioning its <urisdiction to continue the
hearings further strengthens the fact that the alleged technical defect had already been cured
7otably, it #as only #hen private respondent appealed the 743C decision to this Court that
petitioners suddenly unearth the issue of private respondent's default in the PO5! case ;ad
the decision favoring them not been reversed by the 743C, petitioners could have <ust clammed
up "hey resorted to bringing up a technical, not a substantial, defect in their desperate attempt
to s#ay the Court's decision in their favor
151
'ssueC
#hether or not petitioners should be entitled to terminal pay, We sustain the finding of
respondent 743C that petitioners #ere actually paid more than the amounts fi=ed in their
employment contracts "he pertinent portion of the 743C decision reads as follo#s
On this a#ard for leave pay to the complainants +petitioners-, the +private- respondent maintains
that the actually they #ere paid much more than #hat they #ere legally entitled to under their
contract "his fact has not been disputed by the complainants +petitioners- "hus, as mentioned
in +private- respondent's Memorandum on !ppeal dated $, !ugust $/08, their overpayment is
more than enough and sufficient to offset #hatever claims for leave pay they filed in this case
and for #hich the PO5! favorably considered in their favor For complainant +petitioner- !niceto
Betana, it appears that under the cre# contract his monthly salary #as >)V,&& #hile he #as
overpaid by >)V$&& as he actually received >)V:&& 'n fine, Betana had received at least
>)$,,&& e=cess salary for a period of fourteen +$,- months #hich #as the period of his
employment 'n the case of complainant +petitioner- 9orge C de Castro his stipulated monthly
pay #as >)V$1& but he actually received a monthly pay of >)V.&& or an overpayment of
>)V:1& for the same period of service For complainant +petitioner- 9uanito 3 de 9esus, his
overpayment is >)V$$.& Complainant +petitioner- !rnold 9 Miranda has also the same amount
of e=cess payment as de 9esus 'ndeed, We cannot simply ignore this material fact 't is our
duty to prevent a miscarriage of <ustice for if We sustain the a#ard for leave pay in the face of
undisputed facts that the complainants +petitioners- #ere even paid much more than #hat they
should receive by #ay of leave pay, then they #ould be enriching themselves at the e=pense of
others !ccordingly, <ustice and e?uity compel >s to deny this a#ard
We can not agree #ith the Court belo# that respondent Malondras should be paid overtime
compensation for every hour in e=cess of the regular #or*ing hours that he #as on board his
vessel or barge each day, irrespective of #hether or not he actually put in #or* during those
hours )eamen are re?uired to stay on board their vessels by the very nature of their duties, and
it is for this reason that, in addition to their regular compensation, they are given free living
?uarters and subsistence allo#ances #hen re?uired to be on board
"he afore?uoted ruling is a reiteration of Our resolution in 4u(on )tevedoring Co, 'nc vs 4u(on
Marine Department >nion, et al +@3 7o /.1:, !pril ./, $/:8-
W;535FO35, the decision of the 743C is hereby !FF'3M5D #ith the modification that
petitioners Cagampan and Eicera are a#arded their leave pay according to the terms of the
contract
)O O3D535D
Melencio-;errera, Padilla, )armiento and 3egalado, 99, concur
152
National *evelop/ent Co/pany vs. C+R
6G.R. No. L9%:011. Nove/ber #$ %9>17
FactsC
!t the 7ational Development Co, a government-o#ned and controlled corporation, there #ere
four shifts of #or* One shift #as from 0 am to , pm, #hile the three other shifts #ere from 1
am to . pmD then from . pm to $& pm and, finally, from $& pm to 1 am 'n each shift, there
#as a one-hour mealtime period, to #itC From +$- $$ am to $. noon for those #or*ing bet#een
1 am and . pm and from +.- 8 pm to 0 pm for those #or*ing bet#een . pm and $& pm
"he records disclose that although there #as a one-hour mealtime, petitioner nevertheless
credited the #or*ers #ith eight hours of #or* for each shift and paid them for the same number
of hours ;o#ever, since $/:%, #henever #or*ers in one shift #ere re?uired to continue #or*ing
until the ne=t shift, petitioner instead of crediting them #ith eight hours of overtime #or*, has
been paying them for si= hours only, petitioner that the t#o hours corresponding to the mealtime
periods should not be included in computing compensation
!fter hearing, 9udge !rsenio ' Martine( of the C'3 issued an order dated March $/, $/:/,
holding that mealtime should be counted in the determination of overtime #or* and accordingly
ordered petitioner to pay P$&$,,&8/1 by #ay of overtime compensation Petitioner filed a
motion for reconsideration but the same #as dismissed by the C'3 en 1anc on the ground that
petitioner failed to furnish the union a copy of its motion
'ssueC
Whether the C'3 have <urisdiction and correct in deciding the case
;eldC
"he C'3 correctly concluded that #or* in petitioner company #as continuous and therefore the
mealtime brea*s should be counted as #or*ing time for purposes of overtime compensation
!lso, petitioner's motion for reconsideration having been dismissed for its failure to serve a copy
of the same on the union, there is no decision of the C'3 en 1anc that petitioner can bring to this
Court for revie#
W;535FO35, the order of March $/, $/:/ and the resolution of !pril .8, $/:/ are hereby
affirmed and the appeal is dismissed, #ithout pronouncement as to costs
153
S+M& *(R'A 8+L+8+N(S$ +NC. petitioner,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N 61N* *+3+S+4N7 and S+M& *(R'A
S(L(R+&* &M8L4A&&S (SS4C+(2+4N 6(L5925C87$ respondents
,(C2S)
On $, !ugust $//. petitioner issued a memorandum to all factory-based employees advising all
its monthly salaried employees in its Mari*ina "ire Plant, e=cept those in the Warehouse and
Juality !ssurance Department #or*ing on shifts, a change in #or* schedule effective $,
)eptember $//. thus H
"OC !44 F!C"O3A-B!)5D 5MP4OA55)
35C 75W WO3I )C;5D>45
5ffective Monday, )eptember $,, $//., the ne# #or* schedule of the factory office #ill
be as follo#sC
8C,: !M H ,C,: PM +Monday to Friday-
8C,: !M H $$C,: !M +)aturday-
Coffee brea* time #ill be ten minutes only anytime bet#eenC
/C%& !M H $&C%& !M and
.C%& PM H %C%& PM
4unch brea* #ill be bet#eenC
$.C&& 77 H $C&& PM +Monday to Friday-
5=cluded from the above schedule are the Warehouse and J! employees #ho are on
shifting "heir #or* and brea* time schedules #ill be maintained as it is no#

)ince private respondent felt affected adversely by the change in the #or* schedule and
discontinuance of the %&-minute paid Gon callG lunch brea*, it filed on behalf of its members a
complaint #ith the 4abor !rbiter for unfair labor practice, discrimination and evasion of liability
pursuant to the resolution of this Court in (i!e #ar1y nternational +ire Co, nc v N&RC.
;o#ever, the 4abor !rbiter dismissed the complaint on the ground that the change in the #or*
schedule and the elimination of the %&-minute paid lunch brea* of the factory #or*ers
constituted a valid e=ercise of management prerogative and that the ne# #or* schedule, brea*
time and one-hour lunch brea* did not have the effect of diminishing the benefits granted to
factory #or*ers as the #or*ing time did not e=ceed eight +0- hours
"he 4abor !rbiter further held that the factory #or*ers #ould be un<ustly enriched if they
continued to be paid during their lunch brea* even if they #ere no longer Gon callG or re?uired to
154
#or* during the brea* ;e also ruled that the decision in the earlier )ime Darby case #as not
applicable to the instant case because the former involved discrimination of certain employees
#ho #ere not paid for their %&-minute lunch brea* #hile the rest of the factory #or*ers #ere
paidD hence, this Court ordered that the discriminated employees be similarly paid the additional
compensation for their lunch brea*
Private respondent appealed to respondent 7ational 4abor 3elations Commission +743C-
#hich sustained the 4abor !rbiter and dismissed the appeal

;o#ever, upon motion for
reconsideration by private respondent, the 743C, this time #ith t#o +.- ne# commissioners
replacing those #ho earlier retired, reversed its earlier decision of .& !pril $//, as #ell as the
decision of the 4abor !rbiter "he 743C considered the decision of this Court in the )ime Darby
case of $//& as the la# of the case #herein petitioner #as ordered to pay Gthe money value of
these covered employees deprived of lunch and2or #or*ing time brea*sG "he public respondent
declared that the ne# #or* schedule deprived the employees of the benefits of a time-honored
company practice of providing its employees a %&-minute paid lunch brea* resulting in an un<ust
diminution of company privileges prohibited by !rt $&& of the 4abor Code, as amended ;ence,
this petition alleging that public respondent committed grave abuse of discretion amounting to
lac* or e=cess of <urisdictionC +a- in ruling that petitioner committed unfair labor practice in the
implementation of the change in the #or* schedule of its employees from 8C,: am H %C,: pm
to 8C,: am H ,C,: pm #ith one-hour lunch brea* from $.C&& nn to $C&& pmD +b- in holding
that there #as diminution of benefits #hen the %&-minute paid lunch brea* #as eliminatedD +c- in
failing to consider that in the earlier )ime Darby case affirming the decision of the 743C,
petitioner #as authori(ed to discontinue the practice of having a %&-minute paid lunch brea*
should it decide to do soD and, +d- in ignoring petitioner's inherent management prerogative of
determining and fi=ing the #or* schedule of its employees #hich is e=pressly recogni(ed in the
collective bargaining agreement bet#een petitioner and private respondent
"he Office of the )olicitor @eneral filed in a lieu of comment a manifestation and motion
recommending that the petitioner be granted, alleging that the $, !ugust $//. memorandum
#hich contained the ne# #or* schedule #as not discriminatory of the union members nor did it
constitute unfair labor practice on the part of petitioner
+SS5&)
$ Whether the change of #or* schedule, #hich management deems necessary to
increase production, constitutes unfair labor practice
R5L+NG)
5very business enterprise endeavors to increase its profits 'n the process, it may devise means
to attain that goal 5ven as the la# is solicitous of the #elfare of the employees, it must also
protect the right of an employer to e=ercise #hat are clearly management prerogatives

"hus,
management is free to regulate, according to its o#n discretion and <udgment, all aspects of
employment, including hiring, #or* assignments, #or*ing methods, time, place and manner of
#or*, processes to be follo#ed, supervision of #or*ers, #or*ing regulations, transfer of
employees, #or* supervision, lay off of #or*ers and discipline, dismissal and recall of #or*ers
Further, management retains the prerogative, #henever e=igencies of the service so re?uire, to
change the #or*ing hours of its employees )o long as such prerogative is e=ercised in good
faith for the advancement of the employer's interest and not for the purpose of defeating or
155
circumventing the rights of the employees under special la#s or under valid agreements, this
Court #ill uphold such e=ercise
W;535FO35, the Petition is @3!7"5D "he 3esolution of the 7ational 4abor 3elations
Commission dated ./ 7ovember $//, is )5" !)'D5 and the decision of the 4abor !rbiter
dated .1 7ovember $//% dismissing the complaint against petitioner for unfair labor practice is
!FF'3M5D
156
GR No L9#0:1 Septe/ber #$ %981
8arties)
M&RC5RA *R5G C4.$ +NC.$ petitioner$
vs.
N(R*4 *(A(4$ &2 (L.$ respondents$
Caparas = +la-an for petitioner.
Gerardo 8. Cabo Chan and &lias 'an<ali for respondents
@utierre(, 9r, 9
FactsC
'ssuesC
;eldC
!fter the passage of 3epublic !ct 08:, this Court has not only upheld the industrial court's
assumption of <urisdiction over cases for salary differentials and overtime pay NChua Wor*ers
>nion +74>- vs City !utomotive Co, et al, @3 7o 4- $$1::, !pril ./, $/:/D Prisco vs C'3, et
al, @3 7o 4-$%0&1, May .%, $/1&O or for payment of additional compensation for #or*
rendered on )undays and holidays and for night #or* N7assco vs !lmin, et al, @3 7o 4/&::,
7ovember .0, $/:0D Detective P Protective Bureau, 'nc vs Felipe @uevara, et al, @3 7o 4-
08%0, May %$, $/:8O but has also supported such court's ruling that #or* performed at night
should be paid more than #or* done at daytime, and that if that #or* is done beyond the
#or*er's regular hours of duty, he should also be paid additional compensation for overtime
#or* N7aric vs 7aric Wor*ers' >nion et al, @ 3 7o 4-$.&8:, May ./, $/:/, citing )hell Co
vs 7ational 4abor >nion, 0$ Phil %$:O Besides, to hold that this case for e=tra compensation
no# falls beyond the po#ers of the industrial court to decide, #ould amount to a further
curtailment of the <urisdiction of said court to an e=tent #hich may defeat the purpose of the
Magna Carta to the pre<udice of labor' N4uis 3ecato Dy, et al v-/ C'3, @3 7o 4-$8800, May
.:,$/1.OG
"he petitioner's contention that its employees fully understood #hat they signed #hen they
entered into the contracts of employment and that they should be bound by their voluntary
commitments is anachronistic in this time and age
"he Mercury Drug Co, 'nc, maintains a chain of drugstores that are open every day of the
#ee* and, for some stores, up to very late at night because of the nature of the pharmaceutical
retail business "he respondents *ne# that they had to #or* )undays and holidays and at night,
not as e=ceptions to the rule but as part of the regular course of employment Presented #ith
contracts setting their compensation on an annual basis #ith an e=press #aiver of e=tra
compensation for #or* on )undays and holidays, the #or*ers did not have much choice "he
private respondents #ere at a disadvantage insofar as the contractual relationship #as
concerned Wor*ers in our country do not have the lu=ury or freedom of declining <ob openings
or filing resignations even #hen some terms and conditions of employment are not only onerous
and ine?uitous but illegal 't is precisely because of this situation that the framers of the
Constitution embodied the provisions on social <ustice +)ection 1, !rticle $$- and protection to
labor +)ection /, !rticle ' '- in the Declaration of Principles and )tate Policies
157
't is pursuant to these constitutional mandates that the courts are ever vigilant to protect the
rights of #or*ers #ho are placed in contractually disadvantageous positions and #ho sign
#aivers or provisions contrary to la# and public policy
DecisionC
W;535FO35, the petition is hereby dismissed "he decision and resolution appealed from are
affirmed #ith costs against the petitioner
158
G.R. No. L9%7>8 *ece/ber #$ %9>%
N(2+4N(L SH+8A(R*S (N* S2&&L C4R84R(2+4N$ Petitioner, vs C45R2 4,
+N*5S2R+(L R&L(2+4NS and *4M+N(*4R M(L4N*R(S$ Res"ondents
R&A&S$ !.'.L.$ J.$
"he petitioner 7!))CO, a government-o#ned and controlled corporation, is the o#ner of
several barges and tugboats used in the transportation of cargoes and personnel in connection
#ith its business of shipbuilding and repair 'n order that its bargeman could immediately be
called to duty #henever their services are needed, they are re?uired to stay in their respective
barges, for #hich reason they are given living ?uarters therein as #ell as subsistence allo#ance
of P$:& per day during the time they are on board ;o#ever, upon prior authority of their
superior officers, they may leave their barges #hen said barges are idle
"he %/ cre# members of petitioner's tugboat service, including therein respondent Dominador
Malondras, filed a complaint for the payment of overtime compensation 'n the course of the
proceeding, the parties entered into a stipulation of facts #herein the 7!))CO recogni(ed and
admitted -
, "hat to meet the e=igencies of the service in the performance of the above #or*,
petitioners have to #or* #hen so re?uired in e=cess of eight +0- hours a day and2or
during )undays and legal holidays +actual overtime service is sub<ect to determination
on the basis of the logboo* of the vessels, time sheets and other pertinent records of the
respondent-
1 "he petitioners are paid by the respondent their regular salaries and subsistence
allo#ance, #ithout additional compensation for overtime #or*D
On February .&, $/1&, the Court ordered the e=aminer to ma*e a re-e=amination of the records
#ith a vie# to determining Malondras' overtime service from 9anuary $, $/:, to December %$,
$/:1, and from 9anuary $, $/:8 to !pril %&, $/:8, but #ithout deducting from the compensation
to be paid to him his subsistence allo#ance "he e=aminer, on !pril .%, $/1&, submitted a report
giving Malondras an average of si=teen +$1- overtime hours a day, on the basis of his time
sheets, and recommending the payment to him of the total amount of P$:,.,.$: as overtime
compensation during the periods covered by the report
'ssueC Whether or not Malondras is entitled to the $1 hours overtime as a #or*er in a barge
;eldC "he only matter to be determined here is, the number of hours of overtime for #hich
Malondras should be paid for the periods 9anuary $, $/:, to December %$, $/:1, and from
9anuary to !pril %&, $/:8 3espondents urge that this is a ?uestion of fact and not sub<ect to
revie# by this Court, there being sufficient evidence to support the 'ndustrial Court's ruling on
this point 't appears, ho#ever, that in crediting Malondras #ith $1 hours of overtime service
daily for the periods in ?uestion, the court e=aminer relied only on his daily time sheets #hich,
although approved by petitioner's officers in charge and its auditors, do not sho# the actual
number of hours of #or* rendered by him each day
159
We can not agree #ith the Court belo# that respondent Malondras should be paid overtime
compensation for every hour in e=cess of the regular #or*ing hours that he #as on board his
vessel or barge each day, irrespective of #hether or not he actually put in #or* during those
hours )eamen are re?uired to stay on board their vessels by the very nature of their duties, and
it is for this reason that, in addition to their regular compensation, they are given free living
?uarters and subsistence allo#ances #hen re?uired to be on board 't could not have been the
purpose of our la# to re?uire their employers to pay them overtime even #hen they are not
actually #or*ingD other#ise, every sailor on board a vessel #ould be entitled to overtime for
si=teen hours each day, even if he had spent all those hours resting or sleeping in his bun*,
after his regular tour of duty "he correct criterion in determining #hether or not sailors are
entitled to overtime pay is not, therefore, #hether they #ere on board and can not leave ship
beyond the regular eight #or*ing hours a day, but #hether they actually rendered service in
e=cess of said number of hours
While Malondras' daily time sheets do not sho# his actual #or*ing hours, nevertheless,
petitioner has already admitted in the )tipulation of Facts in this case that Malondras and his co-
claimants did render service beyond eight +0- hours a day #hen so re?uired by the e=igencies of
the serviceD and in fact, Malondras #as credited and already paid for five +:- hours daily
overtime #or* during the period from May $ to December %$, $/:8, under the e=aminer's first
report )ince Malondras has been at the same <ob since $/:,, it can be reasonably inferred that
the overtime service he put in #henever he #as re?uired to be aboard his barge all day from
$/:, to $/:8 #ould be more or less consistent
W;535FO35, the order appealed from is modified in the sense that respondent Malondras
should be credited five +:- overtime hours instead of si=teen +$1- hours a day for the periods
covered by the e=aminer's report
160
'+S+G NG M(NGG(G(.( NG 8H+L+88+N& R&,+N+NG C4.$ +NC vs.
8H+L+88+N& R&,+N+NG C4.$ +NC.$
G.R. No. L9177>% Septe/ber #$ %98%
('(* S(N24S$ !.)
F!C")C On !pril $:,$/11, the Bisig ng Manggaga#a ng Philippine 3efining Company,
'nc, as the representative union of the ran* and file employees of the Philippine 3efining Co,
'nc, filed #ith the Court of First 'nstance of Manila a petition for declaratory relief praying,
among others H "hat a declaratory <udgment be rendered declaring and ad<udicating the e
rights and duties of petitioner and respondent under the above ?uoted provision of their
Collective $% - agreements and further declaring that the Christmas bonus of one month or thirty
days pay and other de determinable benefits should be included for the purpose of computation
of the overtime pay spread throughout the t#elve months period of each year from !ugust, $/1%
up to the present and subse?uently hereafterD and that respondent be therefore directed to pay
such differential in the overtime pay of all the employees of the herein respondent D
Petitioner union contended that the respondent company #as under obligation to include
the employees' Christmas bonus and other fringe benefits in the computation of their overtime
pay by virtue of the ruling of this Court in the case of 7!W!)! vs 7!W!)! Consolidated
>nions
On May %, $/11, the Philippine 3efining Co 'nc filed its ans#er to the petition alleging,
among others, that never did the parties intend, in the $/1: collective bargaining agreement and
in prior agreements, to include the employees' Christmas bonus and other fringe benefits in the
computation of the overtime pay and that the company precisely agreed to a rate of :&S, #hich
is much higher than the .:S re?uired by the 5ight-;our 4abor 4a# +Common#ealth !ct 7o
,,,, as amended-, on the condition that in computing the overtime pay only the Gregular base
payG #ould be considered Furthermore, respondent company contended that the ruling of this
Court in the 7!W!)! case relative to the computation of overtime compensation could not be
applied to its employees since it #as a private corporation and not a government-o#ned or
controlled corporation li*e the 7!W!)!
Court of First 'nstance of Manila rendered a decision declaring that the term Gregular
base payG in )ection 1, !rarticle E' of 5=hibit ! refers only to Gregular base payG and does not
include Christmas bonus and other fringe benefits '"held that #hile the 7!W!)! ruling
concerning the meaning of the phrase Gregular payG of the 5ight-;our 4abor 4a# could be
applied to employees of private corporations li*e the Philippine 3efining Company, the same
#as, nevertheless, inapplicable to the case at bar #hich involved the interpretation of the phrase
Gregular base pay #hich #as different from Gregular payG 't declared that Gregular base payG
referred only to the basic or monthly pay e=clusive of Christmas bonus and other fringe benefits
Furthermore, the validity of the provision of the $/1: collective bargaining agreement
concerning the computation of the employees' overtime pay on the basis of their Gregular base
payG #as upheld by the court for the reason that the same #as even higher than the overtime
pay prescribed by la# "he court emphasi(ed that contracts are binding on the parties insofar as
they are not contrary to la#, morals and public order
"his is an appeal from the decision of the Court of First 'nstance of Manila dated
December 0, $/11, in Civil Case 7o 1:&0., holding that Christmas bonus and other fringe
benefits are e=cluded in the computation of the overtime pay of the members of the appellant
union under )ection 1, !rticle E' of the $/1: collective bargaining agreement #hich reads as
follo#sC Overtime pay at the rate of regular base pay plus :&S thereof shag be paid for
161
all #or* performed in e=cess of eight hours on ordinary days #ithin the #or* #ee* +that is to
say, Monday to Friday-
'))>5C Whether or not the phrase Gregular base payG as used in the above-?uoted
provision of the $/1: CB! includes Christmas bonus and other fringe benefitsR
;54DC
7O "he phrase Gregular base payG is clear, une?uivocal and re?uires no interpretation 't
means regular basic pay and necessarily e=cludes money received in different concepts such
as Christmas bonus and other fringe benefits 'n this connection it is necessary to remember
that in the enforcement of previous collective bargaining agreements containing the same
provision of overtime pay at the rate of regular base pay plus :&Z'c thereofG, the overtime
compensation #as invariably based only on the regular basic pay, e=clusive of Christmas bonus
and other tinge benefits !ppellant union *ne# all the #hile of such interpretation and precisely
attempted to negotiate for a provision in the sub<ect collective bargaining agreement that #ould
include the Christmas bonus and other fringe benefits in the computation of the overtime pay
)ignificantly, the appellee company did not agree to change the phrase Gregular base payG as it
could not consent to the inclusion of the fringe benefits in the computation of the overtime pay
;ence, the appellant union could not ?uestion the intended definition of the phrase but could
only claim that the same violated the 7a#asa doctrine and insist that the phrase should be
redefined to conform to said doctrine
'n the case at bar, it is admitted that the contractual formula of Gregular base pay plus :&S
thereofG yields an overtime compensation #hich is higher than the result in applying the
statutory formula as elaborated in the 7a#asa case Conse?uently, its validity is upheld and the
parties are en<oined to accord due respect to it
Decision appealed from is hereby affirmed in all respects
162
8N' vs. 8H+L+88+N& N(2+4N(L '(NC &M8L4A&&S (SS4C+(2+4N
G.R. No. L9#179 !"ly #$ %981
'(RR&*4$ !.)
FactsC
"he case involves a .: year dispute P7B assails the decision of the Court of 'ndustrial
3elations pursuant to a <urisprudence +7!W!)! vs 7!W!)! Consolidated >nions- that in the
computation of overtime pay the cost of living pay and longevity pay be ta*en into account P7B
?uestions the ruling doctrine as #ell as as*s the court for the correct interpretation of C! ,,, or
the eight hour la# in the determination of the overtime pay
'ssueC
Whether or not the cost of living allo#ance and longevity pay be included in the computation of
overtime pay
;eldC
"he cost-of-living allo#ance began to be granted in $/:0 and the longevity pay in $/0$ 'n other
#ords, they #ere granted by P7B upon reali(ing the difficult plight of its labor force in the face of
the unusual inflationary situation in the economy of the country, #hich, ho#ever acute, #as
nevertheless e=pected to improve "here #as thus evident an inherently contingent character in
said allo#ances "hey #ere not intended to be regular, much less permanent additional part of
the compensation of the employees and #or*ers !lso #ith the longevity payD manifestly, this
#as not based on the daily or monthly amount of #or* done or service rendered it #as more of
a gratuity for their loyalty, or their having been in the ban*'s employment for consideration
periods of time What are decisive in determining the basis for the computation of overtime pay
are t#o very germane considerations, namely, +$- #hether or not the additional pay is for e=tra
#or* done or service rendered and +.- #hether or not the same is intended to be permanent
and regular, not contingent nor temporary and given only to remedy a situation #hich can
change any time Overtime pay is for e=tra effort beyond that contemplated in the employment
contract, hence #hen additional pay is given for any other purpose, it is illogical to include the
same in the basis for the computation of overtime pay "his holding supersedes 7!W!)!
163
G.R. No. L9%#%78 March 1:$ %9>%
8(M8(NG( S5G(R *&3&L48M&N2 C4M8(NA$ petitioner$
vs.2H& C45R2 4, +N*5S2R+(L R&L(2+4NS$ &2 (L.$ respondents.
'(52+S2( (NG&L4$ !.)
FactsC "his is a petition to set aside an order entered by respondent court on 9uly /, $/:8
assuming <urisdiction to ta*e cogni(ance of the labor dispute certified to it by the President of
the Philippines bet#een the Pampanga )ugar Development Corporation and its employees
under )ection $& of 3epublic !ct 08:
't appears that previous to such certification a voluntary certification election #as conducted by
the Department of 4abor #herein the P!)>D5CO Wor*ers >nion #as chosen as the e=clusive
bargaining representative of all the employees of the company as against another union named
)ugar Wor*ers !ssociation )ubse?uently, a collective bargaining agreement #ith respect to the
terms and conditions of employment #as entered into bet#een the #inning union and the
Pampanga )ugar Development Corporation, #hich agreement as #ell as the certification of the
P!)>D5CO Wor*ers >nion as the e=clusive bargaining representative #as approved by the
Court of 'ndustrial 3elations
During the $/::-$/:1 milling season the members of the )ugar Wor*ers !ssociation, the union
that lost in the election, declared a stri*e at the sugar mill of the company at )an Fernando,
Pampanga, as a result of the refusal of said company to entertain the demands submitted to it
by said union !nd having been advised of said dispute #hich remained unsettled for sometime
and affected the sugar industry, the President of the Philippines, on 7ovember .%, $/:1 #rote
respondent court stating that, pursuant to section $& of 3epublic !ct 7o 08:, he certifies to said
court Gthe labor dispute bet#een the management of the Pasudeco and its employees, and
re?uires the Court to ta*e immediate steps in the e=ercise of its po#ers granted by la#G
On December 8, $/:1, the P!)>D5CO re?uested the court not to assume <urisdiction over the
dispute as thus certified contending that since the )ugar Wor*ers !ssociation is merely a
minority union #hich lost in the certification election it has no right to represent the employees of
the company nor to present the demands it has submitted on December $,, $/:: and as such it
cannot create a labor dispute that may give <urisdiction to the industrial court even if the same is
certified by the President of the Philippines 3espondent court, ho#ever, declared itself #ith
<urisdiction to act on the dispute regardless of the collective bargaining agreement entered into
bet#een the P!)>D5CO Wor*ers >nion and the Pampanga )ugar Development Corporation
;ence, the present petition for certiorari
't appears that the )ugar Wor*ers !ssociation, a minority union, submitted to the management
of the Pampanga )ugar Development Corporation a set of demands #hich eventually reached
the industrial court involving, among others, payment for past overtime service, a general #age
increase retroactive to December $, $/:,, reinstatement of all laid-off employees, retirement
plan due to long service, old age and disability, termination of pay, and recognition of union
chec* off, and because they #ere not heeded due perhaps to the fact that said union #as not
the collective bargaining representative, its members #ent on stri*e !s the stri*e coincided #ith
the milling season of $/::-$/:1 and affected an industry #hich is important to our national
economy, the President certified the dispute to the Court of 'ndustrial 3elations for settlement
pursuant to )ection $& of 3epublic !ct 7o 08:, #hich #e copy here under or referenceC
When in the opinion of the President of the Philippines there e=ists a labor dispute in an industry
indispensable to the national interest and #hen such labor dispute is certified by the President
to the Court of 'ndustrial 3elations, said Court may cause to be issued a restraining order
forbidding the employees to stri*e or the employer to loc*out the employees, pending an
investigation by the Court, and if no other solution to the dispute is found, the Court may issue
an order fi=ing the terms and conditions of employment
164
't thus appears that #hen in the opinion of the President a labor dispute e=ists in an industry
indispensable to national interest and he certifies it to the Court of 'ndustrial 3elations the latter
ac?uires <urisdiction to act thereon in the manner provided for by la# "hus the court may ta*e
either of the follo#ing coursesC it may issue an order forbidding the employees to stri*e or the
employer to loc*out its employees, or, failing in this, it may issue an order fi=ing the terms and
conditions of employment 't has no other alternative 't cannot thro# the case out on the
assumption that the certification #as erroneous
"his is the situation that obtains herein ! stri*e #as declared by a good number of employees
and #or*ers of the P!)>D5CO coincidental #ith the milling season #hich threatens to impair
an industry important to our national economy and considering the dispute as one that involves
national interest he certified it to the industrial court for ad<udication 7ote that the certification
only ma*es reference to a labor dispute bet#een the company and its employees 't does not
state that the dispute #as caused by a ma<or or a minor union 't is obvious that respondent
court has ac?uired <urisdiction over the dispute and, contrary to petitioner's contention, it acted
properly in declaring itself competent to act thereon$
't is true, as petitioner contends, that the )ugar Wor*ers !ssociation is a minor union #hich lost
in the certification election conducted by the Department of 4abor #herein another union #as
chosen as the e=clusive representative of all the employees of the company and that, under the
la#, the union thus selected is deemed to be the e=clusive representative of said employees for
the purpose of collective bargaining in respect to rates of pay, #ages, hours of employment, or
other conditions of employment. "he fact, ho#ever, is that because of the stri*e declared by
the members of the minority union #hich threatens a ma<or industry the President deemed it
#ise to certify the controversy to the Court of 'ndustrial 3elations for ad<udication "his is a
po#er that the la# gives to the President the propriety of its e=ercise being a matter that only
devolves upon him "he same is not the concern of the industrial court What matters is that by
virtue of the certification made by the President the case #as placed under the <urisdiction of
said court
'))>5C #hether a minority union may create a labor dispute cogni(able by the Court of
'ndustrial 3elations in disregard of the representative chosen in a certification election and of
the collective bargaining agreement entered into by said representative and the company is a
legal matter that does not affect the <urisdiction of the court
;54DC "his is an issue that the court should determine once the dispute is submitted for
decision ;ere may come in many other matters that are #orth loo*ing into, such as the right of
a minority to be protected against the abuses of the ma<ority, failure on the part of the union
representative to secure the best terms and conditions of employment as the circumstances
may demand, or #hether the time has come to order a ne# certification election !s a matter of
fact, there is an intimation by the government counsel that the collective bargaining agreement
concluded bet#een the company and P!)>D5CO Wor*ers >nion already e=pired on
December $, $/:8 thereby implying that ne# terms and conditions of employment may be the
sub<ect of ne# negotiations "hese are matters that come #ithin the <urisdiction of the court
W;535FO35, petition is denied, #ithout pronouncement as to costs
165
N(2+4N(L .(2&R.4RCS and S&.&R(G& (52H4R+2A vs N.S( C4NS4L+*(2&*
5N+4NS$ &2 (L.$
G.R. No. L9%89#9 ("-"st #%$ %9>0
,(C2S)
Petitioner and respondent unions submitted a <oint stipulation of facts on the issues concerning
the ,&-;our Wee* 4a#, Gdistress pay,G minimum #age, filling of vacancies, night compensation,
and salary ad<ustments, reserving the right to present evidence on matters not covered therein
On December ,, $/:8, respondent intervenors filed a petition in intervention on the issue for
additional compensation for night #or* 4ater, ho#ever, they amended their petition by including
a ne# demand for overtime pay in favor of 9esus Centeno, Cesar Cabrera, Feliciano Duiguan,
Cecilio 3emotigue, and other employees receiving P,,.&&&& per annum or more
On February :, $/:0, petitioner filed a motion to dismiss the claim for overtime pay alleging that
respondent Court of 'ndustrial 3elations #as #ithout <urisdiction to pass upon the same
because, as mere intervenors, the latter cannot raise ne# issues not litigated in the principal
case, the same not being the lis !ota therein involved "o this motion the intervenors filed an
opposition "hereafter, respondent court issued an order allo#ing the issue to be litigated
Petitioner's motion to reconsider having been denied, it filed its ans#er to the petition for
intervention
+SS5&)
Whether undertime #or* shall be offset by overtime #or*
R5L+NG)
Where a #or*er incurs undertime hours during his regular daily #or*, said undertime hours
should not be offset against the overtime hours 'f it #ere other#ise, the unfairness #ould be
evident from the fact that the undertime hours represent only the employeesK hourly rate of pay
#hile the overtime hours reflect both the employeesK hourly rate of pay and the appropriate
premium such that, not being of e?ual value, offsetting the undertime hours against the overtime
hours #ould result in the undue deprivation of the employeesK overtime premium "he situation
is even more acceptable #here the undertime hours are not only offset against the overtime
hours but are also charged against the accrued leave of the employee, for under this method
the employee is made to pay t#ice the for his undertime hours #ith #or* beyond the regular
#or*ing hours "he proper method should be to deduct the undertime hours from the accrued
leave but to pay the employee the overtime compensation to #hich he is entitled Where the
employee has e=hausted his leave credits, his undertime hours may simply be deducted from
his dayKs #age, but he should still be paid his overtime compensation for #or* in e=cess of eight
hours a day
166
G.R. No. L91>800 Septe/ber #$ %9>9
,&L+8& *& L&4N$ '(L*4M&R4 S(L3(*4R$ M(R2+N+(N4 &3(NG&L+S2($ 3+C&N2&
8(NL(H5+$ C(S24R 25(S4N$ ,R(NC+SC4 G4N?(L4$ &NR+H5& 8(GC5$ CL(5*+4
S+CH4N$ &S2(N+SL(4 S+CH4N$ R5'&N +C'(N$ ('4N*+N4 +S+8$ L5+S 8. +S+8$ *+4S*(*4
8. G4N?(L&S$ M(O+M4 8(5L&$ ,(5S2+N4 *+M(25L(C$ M(2&4 '(52+S2($ .+L,R&*4
(AC(R*4$ H4R(C+4 4C(M84$ ,('+(N M&N&S&S$ ,L4R&N2+N4 G(RC+( and !4S& *.
G(L(NG$ petitioners,
vs
8(M8(NG( S5G(R *&3&L48M&N2 C4M8(NA$ +NC.$ respondent
Juan C. &i!in ;or "etitioners.
Carlos, 'adarang, Car1allo and %aldez ;or res"ondent.
C(S2R4$ J.$
,(C2S)
"he respondent Pampanga )ugar Development Company +P!)>D5CO- operates a
sugar central at )an Fernando, Pampanga "he petitioners #ere its security guards re?uired to
#or* eight hours a day, seven days a #ee*
On 7ovember .0, $/1$ the petitioners filed #ith the C'3 a complaint see*ing payment to
them of premium or differential pay in the total amount P,/,:0$8/, plus attorney's fees of
P%,&&& and costs of suit >pon the finding that the Gpetitioners #ere paid their monthly salaries
plus .:S additional compensation for #or* on )undays and ;olidays as provided for by la#
and that #or* on said days is one of the terms and conditions of their employment as security
guardsG C'3 9udge 9oa?uin M )alvador dismissed the case !cting on the petitioners' motion
for reconsideration, the court en 1anc affirmed 9udge )alvador's order
;ence this appeal
+SS5&)
Whether or not the petitioners' are entitled to +$- regular remuneration, or $&&SD and +.-
an additional sum of at least .:S of the regular remuneration, for #or* on )undays and
;olidays
H&L*)
"he import of the la# for #or* on )undays and legal holidays, the employer must pay
the employeeC +$- his regular remuneration, or $&&SD and +.- an additional sum of at least .:S
of the regular remuneration, #hich is called the Ppre/i"/ pay.P 'n other #ords, the pay for
)undays and legal holidays is $.:S of the pay for ordinary days, but only the e=cess of .:S is
premium pay With respect to employees paid on a monthly basis, the first $&&S +of the $.:S-,
corresponding to the regular remuneration, may or may not be included in the monthly salary 'f
it is, then the employee is entitled to collect only the premium of .:S 'f it is not, then the
employee has a right to receive the entire $.:S
167
)ince the security guards of P!)>D5CO are paid on a monthly basis, the first $&&S +of
the $.:S-, corresponding to the regular remuneration, is already included in the monthly salary
!ccordingly, the employees are entitled to collect only the premium of .:S
"he only ?uestion remaining is #hether the .:S premium pay has also been paid 'n the
order of 9udge )alvador, affirmed by the court en 1anc, there is a finding that the Gpetitioners
#ere paid their monthly salaries plus .:S additional compensation for #or* on )undays and
holidaysG "he factual findings of the trial <udge, unaltered or unmodified by the court en 1anc,
cannot be revie#ed by this Court "he findings of fact of the C'3 are conclusive on this Court,
#here they are supported by substantial evidence, and the lo#er court has not acted #ith grave
abuse of discretion in reaching them
:
!CCO3D'7@4A, the <udgment a quo dismissing the complaint is affirmed 7o
pronouncement as to costs
168
G.R. No. L9>:081 *ece/ber %$ %987
!4S& R+?(L C4LL&G&$ vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N (N*
N(2+4N(L (LL+(NC& 4, 2&(CH&RSD4,,+C& .4RC&RS$ respondents.
F!C")C Petitioner is a non-stoc*, non-profit educational institution duly organi(ed and e=isting
under the la#s of the Philippines 't has three groups of employees categori(ed as follo#sC +a-
personnel on monthly basis, #ho receive their monthly salary uniformly throughout the year,
irrespective of the actual number of #or*ing days in a month #ithout deduction for holidaysD +b-
personnel on daily basis #ho are paid on actual days #or*ed and they receive un#or*ed
holiday pay and +c- collegiate faculty #ho are paid on the basis of student contract hour Before
the start of the semester they sign contracts #ith the college underta*ing to meet their classes
as per schedule
>nable to receive their corresponding holiday pay, as claimed, from $/8: to $/88, private
respondent 7ational !lliance of "eachers and Office Wor*ers +7!"OW- in behalf of the faculty
and personnel of 9ose 3i(al College filed #ith the Ministry of 4abor a complaint against the
college for said alleged non-payment of holiday pay, doc*eted as Case 7o 3&,-$&-0$-8. Due
to the failure of the parties to settle their differences on conciliation, the case #as certified for
compulsory arbitration #here it #as doc*eted as 3B-'E-.%&%8-80
'))>5C Whether or not the school faculty #ho according to their contracts are paid per lecture
hour are entitled to un#or*ed holiday pay
;54DC !fter the parties had submitted their respective position papers, the 4abor !rbiter [[
rendered a decision on February :, $/8/, the dispositive portion of #hich readsC
W;535FO35, <udgment is hereby rendered as follo#sC
$ "he faculty and personnel of the respondent 9ose 3i(al College #ho are paid their salary by
the month uniformly in a school year, irrespective of the number of #or*ing days in a month,
#ithout deduction for holidays, are presumed to be already paid the $& paid legal holidays and
are no longer entitled to separate payment for the said regular holidaysD
. "he personnel of the respondent 9ose 3i(al College #ho are paid their #ages daily are
entitled to be paid the $& un#or*ed regular holidays according to the pertinent provisions of the
3ules and 3egulations 'mplementing the 4abor CodeD
% Collegiate faculty of the respondent 9ose 3i(al College #ho by contract are paid
compensation per student contract hour are not entitled to un#or*ed regular holiday pay
considering that these regular holidays have been e=cluded in the programming of the student
contact hours +3ollo pp .1-.8-
On appeal, respondent 7ational 4abor 3elations Commission in a decision promulgated on
9une ., $/0., modified the decision appealed from, in the sense that teaching personnel paid by
the hour are declared to be entitled to holiday pay +3ollo p %%-
;ence, this petition
"he decision of the 743C #as set aside and a ne# one #as rendered to #itC
+a- e=empting petitioner from paying hourly paid faculty members their pay for regular holidays,
#hether the same be during the regular semesters of the school year or during semestral,
Christmas, or ;oly Wee* vacationsD
+b- but ordering petitioner to pay said faculty members their regular hourly rate on days declared
as special holidays or for some reason classes are called off or shortened for the hours they are
supposed to have taught, #hether e=tensions of class days be ordered or notD in case of
e=tensions said faculty members shall li*e#ise be paid their hourly rates should they teach
during said e=tensions
169
San Mi-"el Corporation vs. Co"rt of (ppeals
9anuary %&, .&&. %8: )C3! %$$ @3 7o $,188:
Facts
't #as October $8, $//., the Department of 4abor and 5mployment, 'lliigan district
office, conducted a routine inspection in )an Miguel Corporation in 'lligan city DO45 discovered
that there #as an underpayment by )MC of regular Muslim holiday pay to its employees )MC
contested the findings and DO45 conducted summary hearings )MC failed to submit proof that
it #as paying regular Muslim holiday pay to its employees DO45 issued a compliance order to
consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim
employees a holiday pay #ithin %& days from the receipt of the order )MC appealed to the
DO45 main office in Manila, but its appeal #as dismissed for lac* of merit )MC, then, #ent to
the Court of !ppeals for a relief via a petition for certiorari
'ssue
Whether or not there is a distinction bet#een Muslims and non-Muslims as regards to
the payment of benefits for Muslim holidays
;eld
Muslim holidays are legally observed #ithin the area of <urisdiction of the !3MM 't is
only upon presidential proclamations that Muslim holidays may be officially observed outside the
!3MM and generally e=tends to Muslims to enable them to observe the said holidays
"here must be no distinction bet#een Muslims and non-Muslims as regards payment of
benefits for Muslim holidaysD #ages and other emoluments are laid do#n by la# and not based
on faith or religion
170
+NS5L(R '(NC 4, (S+( and (M&R+C(N &M8L4A&&S 5N+4N v. Hon. (M(*4 +NC+4NG
G.R. No. L9 :10%: 4ctober 1#$ %980
8onente) M(C(S+(R$ J'1
,(C2S) On 9une .&, $/8:, the >nion filed a complaint against the ban* for the payment of
holiday pay before the then Department of 4abor, 743C, 3egional Office 'E in Manila
Conciliation having failed, and upon the re?uest of both parties, the case #as certified for
arbitration on 9uly 8, $/8: On !ugust .:, $/8:, 4abor !rbiter 3icarte " )oriano rendered a
decision granting petitionerKs complaint for payment of holiday pay 3espondent ban* did not
appeal from the said decision 'nstead, it complied #ith the order of the 4abor !rbiter by paying
their holiday pay up to and including 9anuary $/81
PD 0:& #as promulgated amending the provisions of the 4abor Code on the right to holiday
pay !ccordingly by authority of !rticle : of the 4abor Code, the Department of 4abor +no#
Ministry of 4abor- promulgated the rules and regulations for the implementation of holidays #ith
pay
"he section readsC L)tatus of employees paid by the month H 5mployees #ho are uniformly
paid by the month, irrespective of the number of #or*ing days therein, #ith a salary of not less
than the statutory or established minimum #age shall be presumed to be paid for all days in the
month #hether #or*ed or notM Policy 'nstruction / #as issued by the then )ecretary of 4abor
on !pril .%,$/81, interpreting the said rule "he ban*, by reason of the ruling laid do#n by the
rule implementing !rticle /, of the 4abor Code and by Policy 'nstruction /, stopped the payment
of holiday pay to an its employees
On !ugust %&,$/81, the >nion filed a motion for a #rit of e=ecution to enforce the arbiterKs
decision dated !ugust $/8:, #hich the ban* opposed On October $0,$/81, the 4abor !rbiter,
instead of issuing a #rit of e=ecution, issued an order en<oining the ban* to continue paying its
employees their regular holiday pay On 7ovember $8, $/81, the ban* appealed from the
order of the 4abor !rbiter to the 743C On .& 9une $/80, the 743C promulgated its resolution
dismissing the ban*Ks appeal, and ordering the issuance of the proper #rit of e=ecution On
February .$,$/8/, the ban* filed #ith the Office of the Minister of 4abor a motion for
reconsideration2appeal #ith urgent prayer to stay e=ecution On !ugust $%,$/8/ the 743C
issued an order directing the Chief of 3esearch and 'nformation of the Commission to compute
the holiday pay of the 'B!! employees from !pril $/81 to the present in accordance #ith the
4abor !rbiter dated !ugust .:,$/8:
On 7ovember $&, $/8/, the Office of the Minister of 4abor, through Deputy Minister !mado
'nciong, issued an order setting aside the resolution of the 743C dated 9une .&, $/80, and
dismissing the case for lac* of merit
+ss"e) Whether or not the Ministry of 4abor is correct in determining that monthly paid
employees are e=cluded from the benefits of holiday payR
Held) From !rticle /. of the 4abor Code, as amended by Presidential Decree 0:&, and !rticle
0. of the same Code, it is clear that monthly paid employees are not e=cluded from the benefits
of holiday pay ;o#ever, the implementing rules on holiday pay promulgated by the then
)ecretary of 4abor e=cludes monthly paid employees from the said benefits by inserting, under
171
3ule 'E, Boo* 'll of the implementing rules, )ection ., #hich provides thatC Lemployees #ho are
uniformly paid by the month, irrespective of the number of #or*ing days therein, #ith a salary of
not less than the statutory or established minimum #age shall be presumed to be paid for all
days in the month #hether #or*ed or notM 5ven if contemporaneous construction placed upon a
statute by e=ecutive officers #hose duty is to enforce it is given great #eight by the courts, still if
such construction is so erroneous, the same must be declared as null and void )o long, as the
regulations relate solely to carrying into effect the provisions of the la#, they are valid Where an
administrative order betrays inconsistency or repugnancy to the provisions of the !ct, the
mandate of the !ct must prevail and must be follo#ed ! rule is binding on the Courts so long as
the procedure fi=ed for its promulgation is follo#ed and its scope is #ithin the statutory authority
granted by the legislature, even if the courts are not in agreement #ith the policy stated therein
or its innate #isdom Further, administrative interpretation of the la# is at best merely advisory,
for it is the courts that finally determine #hat the la# means
"he )upreme Court granted the petition, set aside the order of the Deputy Minister of 4abor,
and reinstated the decision of the 4abor !rbiter 3icarte " )oriano
172
CH(R2&R&* 'an@ &/ployees (ssociation vs. NLRC
,acts) On May .&, $/8:, the Chartered Ban* 5mployees !ssociation, in representation of its
monthly paid employees2members, instituted a complaint #ith the 3egional Office 7o 'E,
Department of 4abor, no# Ministry of 4abor and 5mployment +MO45- against private
respondent Chartered Ban*, for the payment of ten +$&- un#or*ed legal holidays, as #ell as for
premium and overtime differentials for #or*ed legal holidays from 7ovember $, $/8,
On the bases of the foregoing facts, both the arbitrator and the 7ational 4abor 3elations
Commission +743C- ruled in favor of the petitioners ordering the respondent ban* to pay its
monthly paid employees, holiday pay for the ten +$&- legal holidays effective 7ovember $, $/8,
and to pay premium or overtime pay differentials to all employees #ho rendered #or* during
said legal holidays On appeal, the Minister of 4abor set aside the decision of the 743C and
dismissed the petitioner's claim for lac* of merit basing its decision on )ection ., 3ule 'E, Boo*
'll of the 'ntegrated 3ules and Policy 'nstruction 7o /, #hich respectively provideC
)ec . )tatus of employees paid by the month 5mployees #ho are uniformly
paid by the month, irrespective of the number of #or*ing days therein, #ith a
salary of not less than the statutory or established minimum #age shall be
presumed to be paid for all days in the month #hether #or*ed or not
PO4'CA '7)"3>C"'O7 7O /
"OC !ll 3egional Directors
)>B95C"C P!'D 45@!4 ;O4'D!A)
"he rules implementing PD 0:& have clarified the policy in the implementation of
the ten +$&- paid legal holidays Before PD 0:&, the number of #or*ing days a
year in a firm #as considered important in determining entitlement to the benefit
"hus, #here an employee #as #or*ing for at least %$% days, he #as considered
definitely already paid 'f he #as #or*ing for less than %$%, there #as no certainty
#hether the ten +$&- paid legal holidays #ere already paid to him or not
"he ten +$&- paid legal holidays la#, to start #ith, is intended to benefit principally
daily employees 'n the case of monthly, only those #hose monthly salary did not
yet include payment for the ten +$&- paid legal holidays are entitled to the benefit
>nder the rules implementing PD 0:&, this policy has been fully clarified to
eliminate controversies on the entitlement of monthly paid employees "he ne#
determining rule is thisC ''f the monthly paid employee is receiving not less than
P.,&, the ma=imum monthly minimum #age, and his monthly pay is uniform from
9anuary to December, he is presumed to be already paid the ten +$&- paid legal
holidays ;o#ever, if deductions are made from his monthly salary on account of
holidays in months #here they occur, then he is still entitled to the ten +$&- paid
legal holidays
"hese ne# interpretations must be uniformly and consistently upheld
"his issuance shall ta*e effect immediately
'ssuesC Whether or not the )ecretary of 4abor erred and acted contrary to la# in promulgating
)ec ., 3ule 'E, Boo* ''' of the 'ntegrated 3ules and Policy 'nstruction 7o / R
173
DecisionC While it is true that the contemporaneous construction placed upon a statute by
e=ecutive officers #hose duty is to enforce it should be given great #eight by the courts, still if
such construction is so erroneous, as in the instant case, the same must be declared as null
and void 't is the role of the 9udiciary to refine and, #hen necessary correct constitutional
+and2or statutory- interpretation, in the conte=t of the interactions of the three branches of the
government, almost al#ays in situations #here some agency of the )tate has engaged in action
that stems ultimately from some legitimate area of governmental po#er +"he )upreme Court in
Modern 3ole, CB )#isher $/:0, p %1-
)ince the private respondent premises its action on the invalidated rule and policy instruction, it
is clear that the employees belonging to the petitioner association are entitled to the payment of
ten +$&- legal holidays under !rticles 0. and /, of the 4abor Code, aside from their monthly
salary "hey are not among those e=cluded by la# from the benefits of such holiday pay
Presidential Decree 7o 0:& states #ho are e=cluded from the holiday provisions of that la# 't
statesC
!3" 0. Coverage "he provision of this "itle shall apply to employees in all
establishments and underta*ings, #hether for profit or not, 1ut not to govern!ent
e!"loyees, !anagerial e!"loyees, ;ield "ersonnel !e!1ers o; t,e ;a!ily o; t,e
e!"loyer ?,o are de"endent on ,i! ;or su""ort, do!estic ,el"ers, "ersons in
t,e "ersonal service o; anot,er, and ?or-ers ?,o are "aid 1y results as
deter!ined 1y t,e (ecretary o; &a1or in a""ro"riate regulations. +5mphasis
supplied-
"he ?uestioned )ection ., 3ule 'E, Boo* ''' of the 'ntegrated 3ules and the )ecretary's Policy
'nstruction 7o / add another e=cluded group, namely, Gemployees #ho are uniformly paid by
the monthG While the additional e=clusion is only in the form of a presumption that all monthly
paid employees have already been paid holiday pay, it constitutes a ta*ing a#ay or a
deprivation #hich must be in the la# if it is to be valid !n administrative interpretation #hich
diminishes the benefits of labor more than #hat the statute delimits or #ithholds is obviously
ultra vires
One strong argument in favor of the petitioner's stand is the fact that the Chartered Ban*, in
computing overtime compensation for its employees, employs a GdivisorG of .:$ days "he .:$
#or*ing days divisor is the result of subtracting all )aturdays, )undays and the ten +$&- legal
holidays from the total number of calendar days in a year 'f the employees are already paid for
all non-#or*ing days, the divisor should be %1: and not .:$
W;535FO35, the )eptember 8, $/81 order of the public respondent is hereby 35E53)5D
and )5" !)'D5 "he March .,, $/81 decision of the 7ational 4abor 3elations Commission
#hich affirmed the October %&, $/8: resolution of the 4abor !rbiter but deleted interest
payments is 35'7)"!"5D
)O O3D535D
174
4ban-o 3S NLRC and (ntiG"e &lectric Cooperative +nc.
G.R. No. L9%0701 !"ne %$ 10
,acts)
Petitioners argue that monthly-paid employees are considered paid for all days of the
month including un-#or*ed days Petitioners assert that they should be paid for all the %1: days
in a year "hey argue that since in the computation of leave credits, !7"5CO uses a divisor of
%&,, !7"5CO is not paying them 1$ days every year Petitioners base their claim on )ection .,
3ule 'E of Boo* ''' of the Omnibus 3ules 'mplementing the 4abor Code

On ./ 7ovember $//1, the 4abor !rbiter rendered a Decision in favor of petitioners
granting them #age differentials amounting to P$,&$8,:&88% and attorneyKs fees of $&S
!7"5CO appealed the Decision to the 743C on ., December $//1 On .8 7ovember $//8,
the 743C reversed the 4abor !rbiterKs Decision
+ss"e)
Whether or not petitioners are entitled to their money claimR
Held)
PetitionersK claim is #ithout basis
)ection ., 3ule 'E, Boo* ''' of the 'mplementing 3ules and Policy 'nstructions 7o /
issued by the )ecretary +then Minister- of 4abor are null and void since in the guise of clarifying
the 4abor CodeKs provisions on holiday pay, they in effect amended them by enlarging the scope
of their e=clusion
"he 4abor Code is clear that monthly-paid employees are not e=cluded from the benefits
of holiday pay ;o#ever, the implementing rules on holiday pay promulgated by the then
)ecretary of 4abor e=cludes monthly-paid employees from the said benefits by inserting, under
3ule 'E, Boo* ''' of the implementing rules, )ection . #hich provides that monthly-paid
employees are presumed to be paid for all days in the month #hether #or*ed or not
"hus, )ection . cannot serve as basis of any right or claim !bsent any other legal basis,
petitionersK claim for #age differentials must fail
"he basic rule in this <urisdiction is Gno #or*, no payG "he right to be paid for un-#or*ed
days is generally limited to the ten legal holidays in a year
175
5nion of ,ilipro &/ployees vs 'eni-no 3ivar.$ !r.$ NLRC and Nestle 8hils. +nc.
G.R. No. 791::$ !an. 1$ %991
FactsC
Petitioner union assails the ruling of the arbitrator that, in the a#ard of holiday pay, the
divisor should be changed from .:$ to .1$ days to include additional $& holidays and that the
employees should reimburse the amounts overpaid by Filipro due to the use of .:$ days divisor
>pon the payment of the ordered payment of holidays by Filipro +7estle-, it #as then
established that the divisor for the computation of daily pay is no longer .:$ but .1$ because of
the inclusion of $& paid holidays "hus, the retaining of .:$ as divisor #ould accelerate the
basis of conversion and computation by $& days Filipro #ould have been overpaying the
Petitioner members and thus the members #ere re?uired to reimburse the same under the
concept of Lsolution indebitiM
'ssueC
Whether or not 5mployer can be reimbursed of overpayment because of the .:$ day
divisorR
3ulingC
"here is no merit to claim for overpayment of overtime and night differential pay and sic*
and vacation leave benefits, #hich all computation is based on the daily rate "he daily rate is
still the same since the change in the divisor #ould also lead to a change to the dividend that
#ill be used "he daily rate is still the same before and after the grant of holiday pay
176
.ellin-ton +nvest/ent and Man"fact"rin- Corp.$ vs 2raQano
G.R. No. %%0>98 !"ly #$ %99:
S&C4N* *+3+S+4N$ N(R3(S($ &.J.$
,acts)
"he case arose from a routine inspection conducted by a 4abor 5nforcement Officer on !ugust
1, $//$ of the Wellington Flour Mills, an establishment o#ned and operated by petitioner
Wellington 'nvestment and Manufacturing Corporation +hereafter, simply Wellington- "he officer
thereafter dre# up a report, a copy of #hich #as Ge=plained to and received byG Wellington's
personnel manager, in #hich he set forth his finding of G+n-on-payment of regular holidays falling
on a )unday for monthly-paid employeesG
%
Wellington sought reconsideration of the 4abor 'nspector's report, by letter dated !ugust $&,
$//$ ;o#ever, respondentKs arguments failed to persuade the 3egional Director #ho, in an
Order issued on 9uly .0, $//., ruled and accordingly directed Wellington to pay its employees
compensation corresponding to four +,- e=tra #or*ing days
0
Wellington timely filed a motion for
reconsideration of this Order of !ugust $&, $//.
:
'ts motion #as treated as an appeal and #as
acted on by respondent >ndersecretary By Order dated )eptember .., the latter affirmed the
challenged order of the 3egional DirectorG
>
!gain, Wellington moved for reconsideration,
7
and
again #as rebuffed
8
Wellington then instituted the special civil action of certiorari at bar in an attempt to nullify the
orders above mentioned By 3esolution dated 9uly ,, $//,, this Court authori(ed the issuance
of a temporary restraining order en<oining the respondents from enforcing the ?uestioned
orders
9
+ss"e)
Whether a monthly-paid employee, receiving a fi=ed monthly compensation, is entitled to an
additional pay aside from his usual holiday pay, #henever a regular holiday falls on a )unday
Held)
5very #or*er should, according to the 4abor Code,
%
Gbe paid his regular daily #age during
regular ,olidays, e=cept in retail and service establishments regularly employing less than ten
+$&- #or*ersDG this, of course, even if the #or*er does no #or* on these holidays Particularly as
regards employees G#ho are uniformly paid by the month, Gthe monthly minimum #age shall not
be less than the statutory minimum #age multiplied by %1: days divided by t#elveG
%1
"his
monthly salary shall serve as compensation Gfor all days in the month #hether #or*ed or not,G
and Girrespective of the number of #or*ing days thereinG
%#
)o, too, in the event of the
declaration of any special holiday, or any fortuitous cause precluding #or* on any particular day
or days +such as transportation stri*es, riots, or typhoons or other natural calamities-, the
employee is entitled to the salary for the entire month and the employer has no right to deduct
the proportionate amount corresponding to the days #hen no #or* #as done "he monthly
compensation is evidently intended precisely to avoid computations and ad<ustments resulting
from the contingencies <ust mentioned #hich are routinely made in the case of #or*ers paid on
daily basis
177
'n Wellington's case, no issue that to this e=tent, it complied #ith the minimum norm laid do#n
by la# !pparently the monthly salary #as fi=ed by Wellington to provide for compensation for
every #or*ing day of the year including the holidays specified by la# H and e=cluding only
)undays 'n fi=ing the salary, Wellington used #hat it calls the G9:F ;actorDG that is to say, it
simply deducted :$ )undays from the %1: days normally comprising a year and used the
difference, %$,, as basis for determining the monthly salary "he monthly salary thus fi=ed
actually covers payment for %$, days of the year, including regular and s"ecial ,olidays, as ?ell
as days ?,en no ?or- is done 1y reason o; ;ortuitous cause, as a1ove s"eci;ied, or causes not
attri1uta1le to t,e e!"loyees.
"here is no provision of la# re?uiring any employer to ma*e such ad<ustments in the monthly
salary rate set by him to ta*e account of legal holidays falling on )undays in a given year, or,
contrary to the legal provisions bearing on the point, other#ise to rec*on a year at more than
%1: days !s earlier mentioned, #hat the la# re?uires of employers opting to pay by the month
is to assure that Gthe monthly minimum #age shall not be less than the statutory minimum #age
multiplied by %1: days divided by t#elve,G
%7
and to pay that salary Gfor all days in the month
#hether #or*ed or not,G and Girrespective of the number of #or*ing days thereinG
%8
"hat salary
is due and payable regardless of the declaration of any special holiday in the entire country or a
particular place therein, or any fortuitous cause precluding #or* on any particular day or days
+such as transportation stri*es, riots, or typhoons or other natural calamities-, or cause not
imputable to the #or*er !nd as also earlier pointed out, the legal provisions governing monthly
compensation are evidently intended precisely to avoid re-computations and alterations in
salary on account of the contingencies <ust mentioned, #hich, by the #ay, are routinely made
bet#een employer and employees #hen the #ages are paid on daily basis
*ecision)
'n promulgating the orders complained of the public respondents have attempted to legislate, or
interpret legal provisions in such a manner as to create obligations #here none are intended
"hey have acted #ithout authority, or at the very least, #ith grave abuse of their discretion "heir
acts must be nullified and set aside
W;535FO35, the orders complained of, namelyC that of the respondent >ndersecretary dated
)eptember .., $//%, and that of the 3egional Director dated 9uly %&, $//., are 7>44'F'5D
!7D )5" !)'D5, and the proceeding against petitioner D')M'))5D )O O3D535D
Regalado, Puno and 'endoza, JJ., concur
178
G.R. No. L91#7> ,ebr"ary 17$ %9>9
N+C(N4R M. '(L2(?(R$ plaintiff9appellee$
vs.
S(N M+G5&L 'R&.&RA$ +NC.$ defendant9appellant.
!ose 8. 4sorio for plaintiff9appellee.
8once &nrile$ Si-"ion Reyna$ Montecillo and 'elo for defendant9appellant.
*+?4N$ !.)

FatcsC
On October /, $/:1 si=teen regular #or*ers at appellant's Dagupan #arehouse #ent on a
stri*e For the purpose of relieving the tension prevailing at the place H because it #as alleged
that the unfair treatment dispensed to the employees by Balta(ar #as the cause of the stri*e H
Balta(ar #as recalled to appellant's Manila office on October $% of the same year upon
recommendation of its sales supervisor and industrial relations officer, #ho found out, after a
personal investigation, that the employees' grievance #as #ell founded "he day follo#ing
Balta(ar's recall to Manila the stri*ers returned to #or* voluntarily
When Balta(ar reported at appellant's main office in Manila on October $:, $/:1, the
latter's sales supervisor informed him that he #as not to return to Dagupan anymore "hereafter,
he reported for #or* at the main office aforesaid from October $1, $/:1 until 7ovember . of the
same year, apparently #ithout being given any specific #or* or assignment From 7ovember %,
$/:1 up to December $/ of the same year, or a period of more than one and one-half months,
he absented himself from #or* #ithout prior authority from his superiors and #ithout advising
them or anybody else of the reason for his prolonged absence For this reason, pursuant firstly,
to e=isting rules and regulations considering ten une=cused or unauthori(ed absences #ithin a
calendar year as sufficient ground for an outright dismissal from employment, and secondly, the
provisions of appellant's health, #elfare and retirement plan re?uiring that sic* leave, to be
considered authori(ed or e=cusable, must be certified to by the company physician, appellant,
by a letter dated December %$, $/:1, informed Balta(ar that he #as dismissed for cause
effective 7ovember %& of the same year
Four months later, or more specifically on May ., $/:8, Balta(ar commenced the present
action !fter trial upon the issues arising from the parties' pleadings, the trial court ruled that
Balta(ar's dismissal #as <ustified, and, as a conse?uence, dismissed his complaint For
insufficiency of evidence, the court also dismissed appellant's counterclaim But despite the
dismissal of Balta(ar's complaint and the finding that his dismissal from employment #as for
cause, the trial court ordered appellant to pay him one month separation pay, plus the cash
value of si= months accumulated sic* leave )o We are no# urged to reverse this portion of the
decision upon the follo#ing groundsC
' "he trial court erred in re?uiring the defendant appellant to pay separation pay after
having found and declared as an established fact that the dismissal of plaintiff-appellee #as fully
<ustified
'' "he trial court erred in a#arding plaintiff-appellee the money e?uivalent of an
Gaccumulated sic* leave of si= +1- months as terminal leaveG despite its e=press findings to the
effect that +$- sic* leave benefits under defendant-appellant's health, #elfare and retirement
179
plan may be en<oyed only if and #hen the sic*ness is certified to by the company physician H a
re?uirement #hich #as admittedly not complied #ith, and +.- said benefits are Gnon-
commutative and may not therefore be commuted to cashGla#phi$n\t
"he trial court found that appellee's absence for forty-eight successive days #as #ithout
permission or authority of his superiors and, as a result, ruled that it #as sufficient cause for his
dismissal in accordance #ith the rules and regulations of his employer "his must be deemed
final, because Balta(ar did not appeal
't is settled in this <urisdiction that one not employed for a definite period is not entitled to
one-month notice or to one-month salary in lieu thereof if his dismissal #as for cause +3epublic
!ct 7o $&:.D Marcaida vs Philippine 5ducation Company, :% O@ 7o .%, p 0::/- 'n the
Marcaida case this Court, spea*ing through the no# Chief 9ustice 3oberto Concepcion, said the
follo#ingC
'ssueC #hether or not 3epublic !ct 7o $&:. ma*es reference to termination of
employment, instead of dismissal, precisely to e=clude employees separated from the service
for causes attributable to their o#n fault
We rule therefore that appellee is not entitled to one month separation pay

;eldC the appealed decision is hereby reversed, #ithout special pronouncement as to costs 't
is so ordered
180
*avao +nte-rated 8ort Stevedorin- Services vs. (barG"e<
6G.R. No. %1%#1.7
FactsC
Petitioner Davao 'ntegrated Port )tevedoring )ervices +petitioner-company- and private
respondent !">-">CP +>nion-, the e=clusive collective bargaining agent of the ran* and file
#or*ers of petitioner-company, entered into a collective bargaining agreement +CB!- on
October $1, $/0: #hich, under )ections $ and %, !rticle E''' thereof, provide for sic* leave #ith
pay benefits each year to its employees #ho have rendered at least one +$- year of service #ith
the company,
"he commutation of the unen<oyed portion of the sic* leave #ith pay benefits of the intermittent
#or*ers or its conversion to cash #as, ho#ever, discontinued or #ithdra#n #hen petitioner-
company under a ne# assistant manager, Mr Ben<amin Mar(o +#ho replaced Mr Cecilio
Beltran, 9r upon the latter's resignation in 9une $/0/-, stopped the payment of its cash
e?uivalent on the ground that they are not entitled to the said benefits under )ections $ and % of
the $/0/ CB!
"he public respondent favored the commutation of unen<oyed sic* leave #ith pay benefits
'ssueC
Whether the public respondent erred in interpreting )ections $ and %
;eldC
Moreover, petitioner-company's ob<ection to the authority of the Eoluntary !rbitrator to direct the
commutation of the unen<oyed portion of the sic* leave #ith pay benefits of intermittent #or*ers
in his decision is misplaced !rticle .1$ of the 4abor Code is clear "he ?uestioned directive of
the herein public respondent is the necessary conse?uence of the e=ercise of his arbitral po#er
as Eoluntary !rbitrator under !rticle .1$ of the 4abor Code Gto hear and decide all unresolved
grievances arising from the interpretation or implementation of the Collective Bargaining
!greementG We, therefore, find that no grave abuse of discretion #as committed by public
respondent in issuing the a#ard +decision- Moreover, his interpretation of )ections $ and %,
!rticle E''' of the $/0/ CB! cannot be faulted #ith and is absolutely correct
W;535FO35, in vie# of the foregoing, the petition is D')M'))5D "he a#ard +decision- of
public respondent dated )eptember $&, $//$ is hereby !FF'3M5D 7o costs
)O O3D535D
181
*4N(L* C.4C$ %etitioner, (s. P;'4'PP'75 C(R8&2 M(N5,(C25R+NG
CO3PO3!"'O7$ respon)ent.
,(C2S)
'n $/1:, petitioner Donald I#o* and his father-in-la# Patricio 4 4im, along #ith some other
stoc*holders, established a corporation, the respondent Philippine Carpet Manufacturing
Corporation +PCMC- "he petitioner became its general manager, e=ecutive vice-president and
chief operations officer 4im, on the other hand, #as its president and chairman of the board of
directors When the petitioner retired %1 years later or on October %$, $//1, he #as receiving a
monthly salary of P$1&,&&&&& ;e demanded the cash e?uivalent of #hat he believed to be his
accumulated vacation and sic* leave credits during the entire length of his service #ith the
respondent corporation, ie, from 7ovember $1, $/1: to October %$, $//1, in the total amount
of P8,&0&,:,1&& plus interest ;o#ever, the respondent corporation refused to accede to the
petitioner's demands, claiming that the latter #as not entitled thereto
"he petitioner filed a complaint against the respondent corporation for the payment of his
accumulated vacation and sic* leave credits before the 743C ;e claimed that 4im made a
verbal promise to give him unlimited sic* leave and vacation leave benefits and its cash
conversion upon his retirement or resignation #ithout the need for any application therefor 'n
addition, 4im also promised to grant him other benefits, such as golf and country club
membershipD the privilege to charge the respondent corporation's accountD 1S profit-sharing in
the net income of the respondent corporation +#hile 4im got ,S-D and other corporate
per?uisites !ccording to the petitioner, all of these promises #ere complied #ith, e=cept for the
grant of the cash e?uivalent of his accumulated vacation and sic* leave credits upon his
retirement
"he respondent corporation denied all these, claiming that upon the petitioner's retirement, he
received the amount of P1,/&.,%08$/ representing all the benefits due him Despite this, the
petitioner again demanded P8,&0&,:,1&&, #hich demand #as #ithout factual and legal basis
"he respondent corporation asserted that the chairman of its board of directors and its
president2vice-president had unlimited discretion in the use of their time, and had never been
re?uired to file applications for vacation and sic* leavesD as such, the said officers #ere not
entitled to vacation and sic* leave benefits
+SS5&)
$ Whether or not the petitioner is entitled, based on the documentary and testimonial evidence
on record, to the cash value of his vacation and sic* leave credits in the total amount of
P8,&0&,:,1&&D
H&L*)
On 7ovember ./, $///, the 743C, by ma<ority vote, rendered <udgment granting the
appeal, reversing and setting aside the decision of the 4abor !rbiter "he 743C ordered the
dismissal of the complaint
182
On February .0, .&&$, the C! rendered <udgment affirming the decision of the 743C and
dismissing the petition "he petitioner's motion for reconsideration thereof #as denied by the
appellate court, per its 3esolution dated 9uly $8, .&&$
"he petitioner, thus, filed the instant petition for revie# on certiorari #ith this Court, but the
same has not been granted
Moreover, the petitioner is not covered by the Memorandum dated 7ovember 1, $/0$ because
he had unlimited leave creditsD hence, it cannot be gainsaid that he still had unused leave
credits to be converted !ccording to the respondent corporation, the petitioner himself admitted
that he #as not included in the Memorandum dated 7ovember 1, $/0$D and even assuming that
he #as covered by the said memorandum, the fact that his complaint #as filed only in $//1
precludes him from claiming the cash conversion of such leave credits for the years $/11 to
$//%
"he petitioner #as burdened to prove not only the e=istence of such benefits but also that he is
entitled to the same, especially considering that such privileges are not inherent to the positions
occupied by the petitioner in the respondent corporation, son-in-la# of its president or not
"he general rule is that, in the absence of authority from the board of directors, no
person, not even its officers, can validly bind a corporation ! corporation is a <uridical
person, separate and distinct from its stoc*holders and members, 'having === po#ers,
attributes and properties e=pressly authori(ed by la# or incident to its e=istence
the po#er and the responsibility to decide #hether the corporation should enter into a
contract that #ill bind the corporation is lodged in the board, sub<ect to the articles of
incorporation, by-la#s, or relevant provisions of la#
+N L+GH2 4, (LL 2H& ,4R&G4+NG, the petition is D57'5D for lac* of merit Costs against
the petitioner
183
R"-a vs. NLRC
!an. 11$ %99
FactsC
Petitioners #ere the fishermen cre# members of one of several fishing vessels o#ned
by respondent De @usman Fishing 5nterprises Petitioners rendered service aboard the fishing
vessel in various capacities When for same unproved charges, their services #ere terminated,
the fishermen filed illegal dismissed complaint "he vessel o#ners contended that they #ere not
employees at all
'ssueC
Whether or not there is an employee-employer relationship
3ulingC
!ccording to !lipio 3uga, he is under the control and supervision of private respondent's
operations manager Matters dealing on the fi=ing of the schedule of the fishing trip and the time
to return to the fishing port #ere sho#n to be the prerogative of private respondent While
performing the fishing operations, petitioners received instructions via a single-side band radio
from private respondent's operations manager #ho called the patron2pilot in the morning "hey
are told to report their activities, their position, and the number of tubes of fish-catch in one day
While tenure or length of employment is not considered as the test of employment,
nevertheless the hiring of petitioners to perform #or* #hich is necessary or desirable in the
usual business or trade of private respondent for a period of 0-$: years since $/10 ?ualify them
as regular employees
184
G.R. No. L9%1000 ,ebr"ary 18$ %9>#
S2(2&S M(R+N& C4R84R(2+4N and R4A(L L+N&$ +NC.$ petitioners$
vs.
C&'5 S&(M&NBS (SS4C+(2+4N$ +NC.$ respondent.
P!35D5), 9C
,acts)
Petitioners #ere engaged in the business of marine coast#ise transportation, employing therein
several steamships of Philippine registry !fter the Minimum Wage 4a# had ta*en effect, the
petitioners re?uired their employees on board their vessels, to pay the sum of P,& for every
meal, #hile the masters and officers #ere not re?uired to pay their meals
"he petitioners' shipping companies, ans#ering, averred that in enacting 3ep !ct 7o 1&.
+Minimum Wage 4a#-, the Congress had in mind that the amount of P,& per meal, furnished
the employees should be deducted from the daily #ages
+ss"e) WO7 meals or food in ?uestion are facilities or supplements
Held)
We hold that such deductions are not authori(ed 'n the coast#ise business of transportation of
passengers and freight, the men #ho compose the complement of a vessel are provided #ith
free meals by the shipo#ners, operators or agents, because they hold on to their #or* and
duties, regardless of Gthe stress and strain concomitant of a bad #eather, unmindful of the
dangers that lur* ahead in the midst of the high seasG
'f there are no supplements given, #ithin the meaning and contemplation of section $/, but
merely facilities, section %+f- governs "here is no conflictD the t#o provisions could, as they
should be harmoni(ed !nd even if there is such a conflict, the respondent C'3 should resolve
the same in favor of the safety and decent living laborers +!rt $8&., ne# Civil Code-
"he benefit or privilege given to the employee #hich constitutes an e=tra remuneration above
and over his basic or ordinary earning or #age, is supplementD and #hen said benefit or
privilege is part of the laborers' basic #ages, it is a facility "he criterion is not so much #ith the
*ind of the benefit or item +food, lodging, bonus or sic* leave- given, but its purpose
Considering, therefore, as definitely found by the respondent court that the meals #ere freely
given to cre# members prior to !ugust ,, $/:$, #hile they #ere on the high seas Gnot as part of
their #ages but as a necessary matter in the maintenance of the health and efficiency of the
cre# personnel during the voyageG, the deductions therein made for the meals given after
!ugust ,, $/:$, should be returned to them, and the operator of the coast#ise vessels affected
should continue giving the same benefit
't has been found and held that the meals or food in ?uestion are not facilities but supplements
"he petition is dismissed
185
8H+L+88+N& (+RL+N&S$ +NC.$ vs. N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N
G.R. No. %%:78: ("-"st 0$ 1
8(R*4$ !.
F!C")C On 9une %&, $/8:, Philippine !irlines hired respondent 3aul Diamante as
'ntegrated "ic*et 3epresentative for Bacolod City station
On !pril 0, $/00, 5dgardo Pineda, 3i(alino Cabarloc, 5rnesto )ubia and 3olando Eelasco #ent
to Bacolod !irport to have their tic*ets boo*ed for their flight to Manila on !pril / and $&, $/00
3omeo Eista, a former officemate of 5dgardo Pineda, #as their contact person !t the airport,
4eticia Eista, #ife of 3omeo Eista, introduced 3aul Diamante to 5dgardo Pineda as the person
#ho could help in the boo*ing of his tic*et Pineda re?uested Diamante if he could boo* their
tic*ets for the !pril 0, $/00 flight, particularly )ubia, #ho had to attend an important meeting in
Manila Diamante ans#ered that all flights for the #ee* #ere fully boo*ed ;e suggested that he
leave #ith him their tic*ets Pineda gave four +,- tic*ets to Diamante together #ith the amount of
+P$,&&&&&- then Diamante assured them that they #ill be accommodated )ubia #as boo*ed
for the !pril 0, $/00 flight to Manila #hile Pineda, Eelasco and Cabarloc #ere boo*ed for the
!pril $&, $/00 flight When )ubia failed to ta*e the flight due to illness, Diamante returned
)ubia's tic*et to Eista the follo#ing day since it #as Diamante's day off 'n order to facilitate
)ubia's re-boo*ing, Eista as*ed for the help of her friend 7elia Ca#aling, a neighbor of P!4
)tation !gent 3odolfo Puentebella With the help of Ca#aling and Puentebella, )ubia #as able
to ta*e the !pril /, $/00 flight to Manila
>pon their arrival in Manila, on 9une .&, $/00, Pineda e=ecuted an affidavit charging Diamante
#ith bribery2corruption On 9uly &0, $/00 petitioner's Bacolod Branch Manager re?uired
Diamante to comment on the affidavit On 9uly $%, $/00, Diamante submitted his s#orn
statement denying the allegations against him
On 9uly .8, $/00, after evaluation of the complaint and finding the e=planation of Diamante
insufficient, petitioner's manager charged Diamante administratively #ith bribery2e=tortion and
violation of P!4's Code of Discipline, particularly !rticle E''', )ection $, paragraph . thereof,
#hich providesC
G!ny employee #ho directly or indirectly re?uests or receives any consideration, share,
percentage or commission for himself or for another person in connection #ith the performance
of his dutiesG
"hereafter, petitioner convened an ad-hoc Committee on !dministrative 'nvestigation and
conducted an investigation On October %, $/00 at a clarificatory hearing of the committee
Diamante appeared and #as investigated #ith the assistance of his counsel, !tty !llan Tamora,
and P!45! representative Mario Cornelio During the hearing, it #as agreed to reset the
hearing on October .,, $/00, to give Diamante a chance to confront Pineda !fter several
postponements, there #as never a confrontation 7o confrontation occurred due to the fact that
the committee unilaterally set the confrontation on 7ovember $$, $/00, at "uguegarao !irport,
Cagayan, despite the previous agreement of the parties and respondent counsel's re?uest to
reset it on 7ovember .., $/00, in Manila "he Committee, after deliberation, resolved the case
on the basis of the evidence on record
186
On December $,, $/00, Diamante received a notice of his dismissal from the service by an
office memorandum, dated 7ovember ./, $/00 Diamante filed #ith the 7ational 4abor
3elations Commission for illegal dismissal, reinstatement #ith bac*#ages and damages 4abor
!rbiter rendered a decision declaring the dismissal legal and valid Diamante appealed the
decision to the 7ational 4abor 3elations Commission +743C- 743C rendered a decision
granting Diamante's appeal and setting aside the 4abor !rbiter's decision and ordering the
reinstatement of Diamante #ith three years bac*#ages Petitioner filed a motion for
reconsideration #hich the 743C denied in a resolution ;ence, this petition1
'))>5C Whether respondent #as illegally dismissed #hich #ould entitle him to
reinstatement #ith bac*#agesR
;54DC 3egarding the legality of respondent's dismissal, #e note that respondent #as
found to have violated the Company Code of Discipline We recogni(e the right of an employer
to regulate all aspects of employment "his right, aptly called management prerogative, gives
employers the freedom to regulate, according to their discretion and best <udgment, all aspects
of employment, including #or* assignment, #or*ing methods, processes to be follo#ed, #or*ing
regulations transfer of employees, #or* supervision, lay-off of #or*ers and the discipline,
dismissal and recall of #or*ers 'n general, management has the prerogative to discipline its
employees and to impose appropriate penalties on erring #or*ers pursuant to company rules
and regulations
)ince private respondent's dismissal #as for <ust and valid cause, the order of public
respondent for the reinstatement of private respondent #ith a#ard of bac*#ages has no factual
and legal basis
W;535FO35, the petition is hereby @3!7"5D "he challenged decision and resolution of the
7ational 4abor 3elations Commission are )5" !)'D5 'n lieu thereof, the decision of the 4abor
!rbiter dated October .0, $//., is !FF'3M5D
187
+N2&RN(2+4N(L SCH44L (LL+(NC& 4, &*5C(24RS vs. H"is"/bin-
G.R. No. %1880: !"ne %$ 1
,(C2S)
Private respondent 'nternational )chool, 'nc is a domestic educational institution established
primarily for dependents of foreign diplomatic personnel and other temporary residents
!ccordingly, the )chool hires both foreign and local teachers as members of its faculty,
classifying the same into t#oC +$- foreign-hires and +.- local-hires "he )chool employs four
tests to determine #hether a faculty member should be classified as a foreign-hire or a local
hireC
a What is one's domicileR b Where is one's home economyR c "o #hich country does one o#e
economic allegianceR
d Was the individual hired abroad specifically to #or* in the )chool and #as the )chool
responsible for bringing that individual to the PhilippinesR
1
"he )chool grants foreign-hires certain benefits not accorded local-hires "hese include
housing, transportation, shipping costs, ta=es, and home leave travel allo#ance Foreign-hires
are also paid a salary rate t#enty-five percent +.:S- more than local-hires "he )chool <ustifies
the difference on t#o Gsignificant economic disadvantagesG foreign-hires have to endure,
namelyC +a- the Gdislocation factorG and +b- limited tenure
When negotiations for a ne# collective bargaining agreement #ere held on 9une $//:,
petitioner 'nternational )chool !lliance of 5ducators, Ga legitimate labor union and the collective
bargaining representative of all faculty membersG
0
of the )chool, contested the difference in
salary rates bet#een foreign and local-hires
On )eptember 8, $//:, petitioner filed a notice of stri*e "he failure of the 7ational Conciliation
and Mediation Board to bring the parties to a compromise prompted the Department of 4abor
and 5mployment +DO45- to assume <urisdiction over the dispute On 9une $&, $//1, the DO45
!cting )ecretary, Crescenciano B "ra<ano, issued an Order resolving the parity and
representation issues in favor of the )chool "hen DO45 )ecretary 4eonardo ! Juisumbing
subse?uently denied petitioner's motion for reconsideration in an Order dated March $/, $//8
Petitioner claims that the point-of-hire classification employed by the )chool is discriminatory to
Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination
"he )chool disputes these claims and gives a brea*do#n of its faculty members, numbering %0
in all, #ith nationalities other than Filipino, #ho have been hired locally and classified as local
hires
:
"he !cting )ecretary of 4abor found that these non-Filipino local-hires received the
same benefits as the Filipino local-hires
'))>5C Whether or not there #as an e?ual pay for an e?ual #or*
;54DC
We cannot agree "he foregoing provisions impregnably institutionali(e in this <urisdiction the
long honored legal truism of Ge?ual pay for e?ual #or*G Persons #ho #or* #ith substantially
e?ual ?ualifications, s*ill, effort and responsibility, under similar conditions, should be paid
similar salaries
11
"his rule applies to the )chool, its Ginternational characterG not#ithstanding
188
'f an employer accords employees the same position and ran*, the presumption is that these
employees perform e?ual #or* "his presumption is borne by logic and human e=perience 'f
the employer pays one employee less than the rest, it is not for that employee to e=plain #hy he
receives less or #hy the others receive more "hat #ould be adding insult to in<ury "he
employer has discriminated against that employeeD it is for the employer to e=plain #hy the
employee is treated unfairly
"he local-hires perform the same services as foreign-hires and they ought to be paid the same
salaries as the latter For the same reason, the Gdislocation factorG and the foreign-hires' limited
tenure also cannot serve as valid bases for the distinction in salary rates "he dislocation factor
and limited tenure affecting foreign-hires are ade?uately compensated by certain benefits
accorded them #hich are not en<oyed by local-hires, such as housing, transportation, shipping
costs, ta=es and home leave travel allo#ances
'n this case, #e find the point-of-hire classification employed by respondent )chool to <ustify the
distinction in the salary rates of foreign-hires and local hires to be an invalid classification "here
is no reasonable distinction bet#een the services rendered by foreign-hires and local-hires "he
practice of the )chool of according higher salaries to foreign-hires contravenes public policy
and, certainly, does not deserve the sympathy of this Court
189
(24C9'+G .&*G& M+N+NG C4.$ +NC.$ vs (24C9'+G .&*G& M525(L '&N&,+2
(SS4C+(2+4N$
G.R. No. L9:17> March #$ %9:#
,(C2S)
Demand #as submitted to petitioner by respondent union through its officers for various
concession, among #hich #ere +a- an increase of P&:& in #ages, +b- commutation of sic* and
vacation leave if not en<oyed during the year, +c- various privileges, such as free medical care,
medicine, and hospitali(ation, +d- right to a closed shop, chec* off, etc, +e- no dismissal #ithout
prior <ust cause and #ith a prior investigation, etc )ome of the demands, #ere granted by the
petitioner, and the other #ere re<ected, and so hearings #ere held and evidence submitted on
the latter !fter the hearing the respondent court rendered a decision, the most important
provisions of #hich #ere those fi=ing the minimum #age for the laborers at P%.&, declaring that
additional compensation representing efficiency bonus should not be included as part of the
#age, and ma*ing the a#ard effective from )eptember ,, $/:& 't is against these portion of the
decision that this appeal is ta*en
On the issue of the #age, it is contended by petitioner that as the respondent court found that
the laborer and his family at least need the amount of P.:0 for food, this should be the basis
for the determination of his #age, not #hat he actually spendsD that it is not <ustifiable to fi= a
#age higher than that provided by 3epublic !ct 7o 1&.D and that respondent union made the
demand in accordance #ith a pernicious practice of claiming more after an original demand is
granted "he respondent court found that P.:0 is the !ini!u! a!ount actually needed by the
laborer and his family
+SS5&)
What #ill be the basis to determine the minimum #age
R5L+NG)
! person's needs increase as his means increase "his is true not only as to food but as to
everything else H education, clothing, entertainment, etc "he la# guarantees the laborer a ;air
and Aust ?age "he minimum must be fair and <ust "he Gminimum #ageG can by no means imply
only the actual minimum )ome margin or lee#ay must be provided, over and above the
minimum, to ta*e care of contingencies such as increase of prices of commodities and desirable
improvement in his mode of living
190
@3 7o $,,1$/ 7ovember $$, .&&:
C. 8L(N(S C4MM&RC+(L andDor Marcial Coh"$ petitioners,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N 6Second *ivision7$ *+4L&24 M4R&N2&$
(L,R&*4 4,+(L*($ and R5*A (LL(5+G(N$ respondents


!>)"3'!-M!3"'75T, J.J
,(C2S)
Before us is a petition for revieE on certiorari filed by C Planas Commercial and2or
Marcial Cohu, +petitioners- assailing the Decision of the Court of !ppeals +C!- dated 9anuary
$/, .&&& #hich affirmed in toto the decision of the 7ational 4abor 3elations Commission
+743C- and the 3esolution dated !ugust $:, .&&& denying petitionersK motion for
reconsideration
On )eptember $,, $//%, Dioleto Morente, 3udy !llauigan and !lfredo Ofialda +private
respondents- together #ith : others filed a complaint for underpayment of #ages, nonpayment
of overtime pay, holiday pay, service incentive leave pay and premium pay for holiday and rest
day and night shift differential against petitioners #ith the !rbitration Branch of the 743C
'n their position paper, private respondents alleged that petitioner Cohu, o#ner of C
Planas Commercial, is engaged in #holesale of plastic products and fruits of different *inds #ith
more than ., employeesD that private respondents #ere hired by petitioners on 9anuary $,,
$//&, May $,, $//& and 9uly $, $//$, respectively, as helpers2laborersD that they #ere paid
belo# the minimum #age la# for the past % yearsD that they #ere re?uired to #or* for more than
0 hours a day #ithout overtime payD that they never en<oyed holiday pay and did not have a rest
day as they #or*ed for 8 days a #ee*D and they #ere not paid service incentive leave pay
although they had been #or*ing for more than one year Private respondent Ofialda as*ed for
night shift differential as he had #or*ed from 0 pm to 0 am the follo#ing day for more than
one year
On December 1, $//,, a decision #as rendered by the 4abor !rbiter dismissing private
respondentsK money claims for lac* of factual and legal basisD complainants failed to
substantiate their claim that the respondent establishment regularly employs t#enty +.,-
#or*ers !ccordingly, #e have no factual basis to grant salary differentials to complainants 'n
the same conte=t, under )ec $ +b-, 3ule 'E and )ec $+g-, 3ule E of the 'mplementing 3ules of
the 4abor Code, complainants are not entitled to legal holiday pay and service incentive leave
pay "here is no sufficient factual basis to a#ard overtime pay and premium pay for holiday and
rest day because complainants failed to substantiate that they rendered overtime and during
rest days
On )eptember %&, $//8, the 743C modified 4abor !rbiterKs decision by directing C
Planas Commercial to pay !lfredo Ofialda, Diolito Morente and 3udy !llauigan the total amount
of )eventy-Five "housand One ;undred "#enty Five Pesos +P8:,$.:&&- representing their
combined salary differentials, holiday pay, and service incentive leave pay On claims for
underpayment2non-payment of legally mandated #ages and fringe benefits #here e=emption
from coverage of the minimum #age la# is put up as a defense, he #ho invo*es such an
e=emption +usually the employer- has the burden of sho#ing the basis for the e=emption li*e for
instance the fact of employing regularly less than ten #or*ers 'n the instant case, complainants
alleged that despite employing more than t#enty-four +.,- #or*ers in his establishment, hence
covered by the minimum #age la#, nevertheless the individual respondent did not pay his
#or*ers the legal rates and benefits due them since their employment By #ay of ans#er,
191
respondents countered that they employ less than ten +$&- persons, hence the money claims of
complainants lac* factual and legal basis With respect to the other claims, ie, overtime pay
and premium pay for holiday and rest day, "here is no reason to disturb the 4abor !rbiterKs
ruling thereon, that there is no sufficient factual basis to a#ard the claims because complainants
failed to substantiate that they rendered overtime and during rest days "hese claims, unli*e
claims for underpayment and non-payment of fringe benefits mandated by la#, need to be
proven by the claimants

Petitioners filed a petition for certiorari #ith prayer for temporary restraining order and
preliminary in<unction to the )upreme Court on 7ovember .1, $//8 'n a 3esolution dated 9une
.0, $///, the petition #as referred to the C! #hich denied the petition for lac* of merit and
affirmed in toto the 743C decision '

;ence, the instant petition for revie# on certiorari filed by petitioners

+SS5&)
Whether or not private respondents are entitled to the money claims and #hether or not
C Planas Commercial is a retail establishment principally engaged in the sale of plastic
products and fruits regularly employing not more than ten +$&- #or*ers, thus e=empted
from the application of the minimum #age la#
H&L*)
3! 7o 18.8 *no#n as the =age Rationalization Act provides for the statutory
minimum #age rate of all #or*ers and employees in the private sector )ection , of the !ct
provides for e=emption from the coverage, thusC

)ec ,

+c- 5=empted from the provisions of this !ct are household or domestic
helpers and persons employed in the personal service of another, including
family drivers
3etail2service establishments regularly employing not more than ten +$&-
#or*ers may be e=empted from the applicability of this !ct upon application #ith
and as determined by the appropriate 3egional Board in accordance #ith the
applicable rules and regulations issued by the Commission Whenever an
application for e=emption has been duly filed #ith the appropriate 3egional
Board, action on any complaint for alleged non-compliance #ith this !ct shall be
deferred pending resolution of the application for e=emption by the appropriate
3egional Board

'n the event that applications for e=emptions are not granted, employees
shall receive the appropriate compensation due them as provided for by this !ct
plus interest of one percent +$S- per month retroactive to the effectivity of this
!ct


192
Clearly, for a retail2service establishment to be e=empted from the coverage of the
minimum #age la#, it must be sho#n that the establishment is regularly employing not more
than ten +$&- #or*ers and had applied for e=emptions #ith and as determined by the
appropriate 3egional Board in accordance #ith the applicable rules and regulations issued by
the Commission PetitionersK main defense in controverting private respondentsK claim for
underpayment of #ages is that they are e=empted from the application of the minimum #age
la#, thus the burden of proving such e=emption rests on petitioners Petitioners had not sho#n
any evidence to sho# that they had applied for such e=emption and if they had applied, the
same #as granted

"he petition is 8(R2LA GR(N2&* "he Decision of the Court of !ppeals dated 9anuary
$/, .&&& and its 3esolution dated !ugust $:, .&&& are (,,+RM&* #ith M4*+,+C(2+4N that
petitioners are ordered to pay private respondent !lfredo Ofialda the total amount of P$0,,81&&
and the monetary a#ards in favor of private respondents 3udy !llauigan and Dioleto Morente
are *&L&2&*

193
G.R. No. %1%#1. March %9$ %99#.
*(3(4 +N2&GR(2&* 84R2 S2&3&*4R+NG S&R3+C&S vs. R5'&N 3. ('(RH5&?$ in his
capacity as an accredited 3ol"ntary (rbitrator and 2H& (SS4C+(2+4N 4, 2R(*&
5N+4NS 6(25925C87$
F!C")C
Petitioner Davao 'ntegrated Port )tevedoring )ervices +petitioner-company- and private
respondent !">-">CP +>nion-, the e=clusive collective bargaining agent of the ran* and file
#or*ers of petitioner-company, entered into a collective bargaining agreement +CB!- on
October $1, $/0: #hich, under )ections $ and %, !rticle E''' thereof, provide for sic* leave #ith
pay benefits each year to its employees #ho have rendered at least one +$- year of service #ith
the company
During the effectivity of the CB! of October $1, $/0: until three +%- months after its rene#al on
!pril $:, $/0/, or until 9uly $/0/ +a total of three +%- years and nine +/- months-, all the field
#or*ers of petitioner #ho are members of the regular labor pool and the present regular e=tra
labor pool #ho had rendered at least 8:& hours up to $,:&& hours #ere e=tended sic* leave
#ith pay benefits !ny unen<oyed portion thereof at the end of the current year #as converted to
cash and paid at the end of the said one-year period pursuant to )ections $ and %, !rticle E''' of
the CB! "he number of days of their sic* leave per year depends on the number of hours of
service per calendar year in accordance #ith the schedule provided in )ection %, !rticle E''' of
the CB!
"he commutation of the unen<oyed portion of the sic* leave #ith pay benefits of the intermittent
#or*ers or its conversion to cash #as, ho#ever, discontinued or #ithdra#n #hen petitioner-
company under a ne# assistant manager, Mr Ben<amin Mar(o +#ho replaced Mr Cecilio
Beltran, 9r upon the latter's resignation in 9une $/0/-, stopped the payment of its cash
e?uivalent on the ground that they are not entitled to the said benefits under )ections $ and % of
the $/0/ CB!
"he >nion ob<ected to the said discontinuance of commutation or conversion to cash of the
unen<oyed sic* leave #ith pay benefits of petitioner's intermittent #or*ers contending that it is a
deviation from the true intent of the parties that negotiated the CB!D that it #ould violate the
principle in labor la#s that benefits already e=tended shall not be ta*en a#ay and that it #ould
result in discrimination bet#een the non-intermittent and the intermittent #or*ers of the
petitioner-company
!fter the parties had filed their respective position papers, . public respondent 3uben !bar?ue(,
9r issued on )eptember $&, $//$ an !#ard in favor of the >nion ruling that the regular
intermittent #or*ers are entitled to commutation of their unen<oyed sic* leave #ith pay benefits
under )ections $ and % of the $/0/ CB!
Petitioner-company disagreed #ith the aforementioned ruling of public respondent, hence, the
instant petition
Petitioner-company argued that it is clear from the language and intent of the last sentence of
)ection $, !rticle E''' of the $/0/ CB! that only the regular #or*ers #hose #or* are not
intermittent are entitled to the benefit of conversion to cash of the unen<oyed portion of sic*
leave, thusC G !nd provided, ho#ever, that only those regular #or*ers of the Company #hose
#or* are not intermittent are entitled to the herein sic* leave privilegeG
'))>5C
194
Whether or not benefits granted pursuant to company practice or policy can peremptorily be
#ithdra#n
;54DC
)ic* leave benefits, li*e other economic benefits stipulated in the CB! such as maternity leave
and vacation leave benefits, among others, are by their nature, intended to be replacements for
regular income #hich other#ise #ould not be earned because an employee is not #or*ing
during the period of said leaves "hey are non-contributory in nature, in the sense that the
employees contribute nothing to the operation of the benefits By their nature, upon agreement
of the parties, they are intended to alleviate the economic condition of the #or*ers
Whatever doubt there may have been early on #as clearly obliterated #hen petitioner-company
recogni(ed the said privilege and paid its intermittent #or*ers the cash e?uivalent of the
unen<oyed portion of their sic* leave #ith pay benefits during the lifetime of the CB! of October
$1, $/0: until three +%- months from its rene#al on !pril $:, $/0/ Well-settled is it that the said
privilege of commutation or conversion to cash, being an e=isting benefit, the petitioner-
company may not unilaterally #ithdra#, or diminish such benefits 't is a fact that petitioner-
company had, on several instances in the past, granted and paid the cash e?uivalent of the
unen<oyed portion of the sic* leave benefits of some intermittent #or*ers >nder the
circumstances, these may be deemed to have ripened into company practice or policy #hich
cannot be peremptorily #ithdra#n
195
N&S2L& 8H+L+88+N&S$ +NC. v. NLRC and 5,&
G.R. No. 9%1#% ,ebr"ary 0$ %99%
8onente) GR+R49 (H5+N4) J
,(C2S) >F5 #as certified as the sole and e=clusive bargaining agent for all regular ran*-and-
file employees of 7estle Phils Cagayan de oro factory as #ell as its Cebu2Davao )ales office
While the parties negotiating their CB!, the employees of Cabuyao resorted to a Lslo# do#nM
and L#al*-outsM prompting the petitioner to shut do#n the factory, subse?uently, the )ec of
4abor assumed <urisdiction and issued a return to #or* order, in spite of the order, the union
struc* #ithout notice "he company retaliated by dismissing the union officers and members of
negotiating panel #ho participated in the illegal stri*e >F5 declared a bargaining deadloc*
"hereafter, the union filed a notice of stri*e and filed a case of unfair labor practice against the
company !fter conciliation efforts the 7CMB yielded negative results, the dispute #as certified
to the 743C by the )ec of 4abor
"he 743C issued a resolution that the company shall continue implementing its retirement Plan
modified as follo#sD
$- For $: years of service or less- an amount e?ual to $&&S of the employeesK monthly
salary for every year of serviceD
.- For more that $: but not less than .& years in service U $.:S of the employees monthly
salary for every year of service
%- For ./ years or more U $:&S of the employeesK monthly salary for every year of service
+SS5&C Whether or not the employees have not vested demandable right to a contributory
retirement planR
H&L*) "he )upreme Court held that the employees have vested and demandable right over
e=isting benefits Eoluntary granted to them by their employer "he employer may not unilaterally
#ithdra#, eliminate or diminish such benefits
"he 743C correctly observed that the inclusion of the retirement plan in the CB! as part of the
pac*age of economic benefit e=tended by the company to its employees to provide them a
measure of financial security after they shall have ceased to be employed in the company,
re#ard their loyalty, boost their morale and efficiency and promote industrial peace, gives
Lconsensual characterM to the plan so that it may not be terminated or modified at the #ill by
either party
"he fact that the retirement plan is non-contributory, the employees contribute nothing to the
operation of the plan, does not ma*e it a non-issue in the CB! U )alary increases, rice
allo#ances, mid-year bonuses, $%
th
and $,
th
month pay, seniority pay, medical and
hospitali(ation plans, health and dental services, vacation, sic* and other 4eaves #ith pay U are
non-contributory benefits )ince the retirement plan has been an integral part of the CB!
"he decision of the 743C is not vitiated by abuse of discretion "he benefits and concessions
given to the employees #ere based on the 743CKs evaluation of the unionsK demand, the
evidence adduced by the parties, the financial capacity of the company to grant such demands,
its long-term viability, the economic conditions prevailing in the country as they affect the
purchasing po#er of the employees as #ell as it concomitant effect on the other factors of
production, the recent trends in the industry to #hich it belongs
196
R. 2ian-co and 3. 2ian-co vs. Hon. 3icente Leo-ardo$ !r.
FG.R. No. L9:7>#>$ May %>$ %98#
,acts) 3eynaldo "iangco, is a fishing operator #ho o#ns the 3eynaldo "iangco Fishing
Company and a fleet of fishing vessels engaged in deep-sea fishing #hich operates from
7avotas, 3i(al ;is business is capitali(ed at P.,&&&,&&&&&, #hile the petitioner, Eictoria
"iangco, is a fish bro*er #hose business is capitali(ed at P$&&,&&&&&


"he private respondents, !urelio 'lustrisimo, Pepito @ilbuena, 3ogelio Carabio, !braham
@ilbuena, 3ustom Of?ueria, 5rnesto Diong, 9esus @ilbuena, Clemente +5merenciano- Eillaruel,
Dominador 4acerna, and @raciano Durana, are 1atillos engaged by the petitioner 3eynaldo
"iangco to unload the fish catch from the vessels and ta*e them to the Fish )tall of the
petitioner Eictoria "iangco "he private respondents, 5ddie Batobalanos, !guedo Marabe,
@regorio 4aylay, Fruto @ihapon, )olomon Clarin, Pepito Batoy, 9ose Of?ueria, Daniel Cabrera,
9uan Castro, !lcafone 5sgana, "omas Capalar, !ntonio @ilbuena, 5rnesto Batoy, )erafio
Aada#on, 9uan @ihapon, 5lias 5scaran and 3oberto Bayon-on, #ere batillos engaged by
Eictoria "iangco
#
"he #or* of these batillos #ere limited to days of arrival of the fishing
vessels and their #or*ing days in a month are comparatively fe# "heir #or*ing hours average
four +,- hours a day
On !pril 0, $/0&, the private respondents filed a complaint against the petitioners #ith the
Ministry of 4abor and 5mployment for non-payment of their legal holiday pay and service
incentive leave pay, as #ell as underpayment of their emergency cost of living allo#ances #hich
used to be paid in full irrespective of their #or*ing days, but #hich #ere reduced effective
February, $/0&, in contravention of !rticle $&& of the ne# 4abor Code #hich prohibits the
elimination or diminution of e=isting benefits
"he petitioners denied the laborers' contention, claiming that the laborers #ere all given, in
addition to their regular daily #age, a daily e=tra pay in amounts ranging from %& centavos to $&
pesos #hich are sufficient to offset the laborers' claim for service incentive leave and legal
holiday pay !s regards the claim for emergency allo#ance differentials, the petitioners admitted
that they discontinued their practice of paying their employees a fi=ed monthly allo#ance, and
effective February, $/0&, they no longer paid allo#ances for non-#or*ing days "hey argued,
ho#ever, that no la# #as violated as their refusal to pay allo#ances for non-#or*ing days is in
consonance #ith the principle of Gno #or*, no allo#anceGD and that they could not pay private
respondents a fi=ed monthly allo#ance #ithout ris*ing the viability of their business
3esolving the case, the Director of the 7ational Capitol 3egion of the Ministry of 4abor and
5mployment ruled that the daily e=tra pay given to private respondents #as a ,'production
incentive benefitG, separate and distinct from the service incentive leave pay and legal holiday
pay, payment of #hich cannot be used to offset a benefit provided by la#, and ordered the
petitioners to pay the private respondents their service incentive leave pay and legal holiday
pay ;o#ever, he denied the laborers' claim for differentials in the emergency cost of living
allo#ance for the reason that the emergency cost of living allo#ance accrues only #hen the
laborers actually #or* follo#ing the principle of Gno #or*, no pay,G and private respondents are
not entitled to a fi=ed monthly allo#ance since they #or* on a part time basis #hich average
only four +,- days a #ee* "he private respondents should not be paid their allo#ances during
non-#or*ing days
From this order, both parties appealed
On May .., $/0$, the respondent Deputy Minister of 4abor and 5mployment modified the order
and directed the petitioners to restore and pay the individual respondents their fi=ed monthly
197
allo#ance from March, $/0& and to pay them the amount of P:0,01&&&, as underpayment of
their living allo#ance from May, $/88 to February .$, $/0&
+ss"e) Whether or not the Deputy Minister of 4abor and 5mployment acted in e=cess of his
<urisdictionR
*ecision) We find no merit in the contention ;o#ever, a revision of the amount due the private
respondents is in order for the reason that the respondent Deputy Minister of 4abor and
5mployment failed to ta*e into consideration, in computing the amount due each #or*er, the
fact that the private respondents are employed by t#o different individuals #hose businesses
are divergent and capitali(ed at various amounts, contrary to the provisions of PD :.: and
subse?uent amendatory decrees, #herein the amount of the emergency cost of living allo#ance
to be paid to a #or*er is made to depend upon the capitali(ation of the business of his employer
or its total assets, #hichever is higher
;ence, for the period from 7ovember, $/81 to !pril %&, $/88, the petitioner Eictoria "iangco
should pay her #or*ers a fi=ed monthly allo#ance of P %&&&, #hile the #or*ers of the petitioner
3eynaldo "iangco #ere entitled to a fi=ed monthly allo#ance of P:&&&, each "he record
sho#s that during this period, the petitioner Eictoria "iangco #as paying her #or*ers a monthly
allo#ance of P%&&& each !ccordingly, there #as no underpayment for this period insofar as
her 1atillos are concerned "he petitioner 3eynaldo "iangco, ho#ever, paid his employees
P%&&&, instead of P:&&&, as mandated by la# "herefore, there #as an underpayment of
P.&&& a month for each 1atillo under his employ For the 1-month period, he should pay his
#or*ers differentials in the amount of P$.&&& each
For the period from May, $/88 to March $/8/, the #or*ers of the petitioner Eictoria "iangco
#ere entitled to a fi=ed monthly allo#ance of P/&&& in vie# of the promulgation of PD $$.%
#hich granted an across-the-board increase of P1&&& a month in their allo#ances For this
period, ho#ever, the said petitioner paid her #or*ers only P1&&& a month, or a difference of
P%&&& a month "here #as, therefore, an underpayment of P1/&&& for every 1atillo under her
employ for the .%-month period
With the addition of P1&&& across-the-board increase in their allo#ances, the #or*ers of the
petitioner 3eynaldo "iangco #ere entitled to receive a fi=ed monthly allo#ance of P$$&&&
;o#ever, the record sho#s that his #or*ers #ere only paid P1&&& a month, or a difference of
P:&&& a month Conse?uently, each 1atillo hired by him should be paid a differential of
P$,$:&&& for the .%-month period
For the period from !pril, $/8/ to !ugust, $/8/, the employees of the petitioner Eictoria "iangco
#ere entitled to a fi=ed monthly allo#ance of P$:&&& #hile the #or*ers employed by the
petitioner 3eynaldo "iangco #ere entitled to an allo#ance of P$8&&&, pursuant to PD $1$,
"he record sho#s, ho#ever, that both petitioners paid their #or*ers only P$.&&& a month
"here #as a difference of P%&&& a month in the case of the petitioner Eictoria "iangco, and
P:&&&, a month, in the case of the petitioner 3eynaldo "iangco ;ence, for this period, the
petitioner Eictoria "iangco should pay the amount of P$:&&& to each 1atillo in her employ, #hile
the petitioner 3eynaldo "iangco should pay the amount of P.:&&&, as differentials in the cost of
living allo#ances of the #or*ers under his employ
With this modification, the <udgment appealed from is !FF'3M5D in all other respects With
costs against the petitioners
198
G.R. No. 70%:> !"ne 19$ %988
GL4'& M(CC(A C('L& (N* R(*+4 C4R84R(2+4N$ ,R&*&R+CC .H+2& and !&S5S
S(N2+(G4$petitioners$ vs.N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$ ,,.9GL4'&
M(CC(A &M8L4A&&S 5N+4N and &*( C4NC&8C+4N$ respondents.
,acts)
On October %&, $/0, Wage Order 7o 1 mandated an increased in the cost-of-living
allo#ance of non-agricultural #or*ers in the private sector for P%&& "he order #as complied by
the petitioner Corporation by multiplying the same by .. days, e?uivalent to the number of
#or*ing days in the company
3espondent union alleges that instead of multiplying the CO4! by .. it should be
multiplied by %& representing the number of days in a month, as #hat the corporation's normal
practice prior to the said Wage Order "hus the union filed a complaint against the Corporation
for for illegal deduction, underpayment, unpaid allo#ances, and violation of Wage Order 7o 1
+ss"e)
Whether or not CO4! under Wage Order 7o 1 should be multiplied by .. or %&
representing the number of #or*ing days in a month
Held)
4abor !rbiter !delaido F Martine( sustained the position of Petitioner Corporation by
holding that since the individual petitioners acted in their corporate capacity they should not
have been impleadedD and that the monthly CO4! should be computed on the basis of t#enty
t#o +..- days, since the evidence sho#ed that there are only .. paid days in a month for
monthly-paid employees in the company ;is reasoning, inter alia, #as as follo#sC
"o compel the respondent company to use %& days in a month to compute the allo#ance
and retain .. days for vacation and sic* leave, overtime pay and other benefits is inconsistent
and palpably un<ust 'f %& days is used as divisor, then it must be used for the computation of all
benefits, not <ust the allo#ance But this is not fair to complainants, not to mention that it #ill
contravene the provision of the parties' CB!
)ection : of the 3ules 'mplementing Wage Orders 7os ., %, : and 1 uniformly read as follo#sC
)ection : !llo#ance for >n#or*ed Days
!ll covered employees shall be entitled to their daily living allo#ance during t,e days t,at t,ey
are "aid t,eir 1asic ?age, even i; un?or-ed. +5mphasis supplied-
it is evident that the intention of the la# is to grant 5CO4! upon the payment of basic #ages
;ence, #e have the principle of '7o Pay, 7o 5CO4!
199
G.R. No. %>>>07 March #%$ 1>
8(G9(S( S2&&L .4RCS$ +NC.$ Petitioner,
vs
C45R2 4, (88&(LS$ ,4RM&R S+O2H *+3+S+4N and 8(G9(S( S2&&L .4RC&RS 5N+4N
68S.57$ 3espondent
,(C2S) Petitioner Pag-!sa )teel Wor*s, 'nc is a corporation duly organi(ed and e=isting under
Philippine la#s and is engaged in the manufacture of steel bars and #ire rods Pag-!sa )teel
Wor*ers >nion is the duly authori(ed bargaining agent of the ran*-and-file employees of
petitioner
On 9anuary 0, $//0, the 3egional "ripartite Wages and Productivity Board +Wage Board- of the
7ational Capital 3egion +7C3- issued Wage Order 7o 7C3-&1 't provided for an increase of
P$%&& per day in the salaries of employees receiving the minimum #age, and a conse?uent
increase in the minimum #age rate to P$/0&& per day Petitioner and the >nion negotiated on
ho# to go about the #age ad<ustments Petitioner for#arded a letter

dated March $&, $//0 to
the >nion #ith the list of the salary ad<ustments of the ran*-and-file employees after the
implementation of Wage Order 7o 7C3-&1, and the notation that said Gad<ustments N#ereO in
accordance #ith the formula NtheyO have discussed and N#ereO designed so as no distortion shall
result from the implementation of Wage Order 7o 7C3-&1G
On )eptember .%, $///, petitioner and the >nion entered into a Collective Bargaining
!greement +CB!-, effective 9uly $, $/// until 9uly $, .&&, to grant all #or*ers the increase
ho#ever if no #age increase given by the Wage Board #ithin si= +1- month the management is
#illing to give increase On October $,, $///, Wage Order 7o 7C3-&8

#as issued, and on
October .1, $///, its 'mplementing 3ules and 3egulations 't provided for a P.::& per day
increase in the salary of employees receiving the minimum #age and increased the minimum
#age to P..%:& per day Petitioner paid the P.::& per day increase to all of its ran*-and-file
employees
On 9uly $, .&&&, the ran*-and-file employees #ere granted the second year increase provided
in the CB! in the amount of P.:&& per day
On 7ovember $, .&&&, Wage Order 7o 7C3-&0 too* effect "hereby setting the minimum #age
rate at +P.:&&&- per day On 9uly $, .&&&, the ran*-and-file employees #ere granted the
second year increase provided in the CB! in the amount of P.:&& per day "hen >nion
president 4ucenio Brin re?uested petitioner to implement the increase under Wage Order 7o
7C3-&0 in favor of the companyKs ran*-and-file employees Petitioner re<ected the re?uest, the
>nion elevated the matter to the 7ational Conciliation and Mediation Board When the parties
failed to settle, they agreed to refer the case to voluntary arbitration
On 9une 1, .&&$, the E! rendered <udgment in favor of the company and ordered the case
dismissed "he >nion filed a petition for revie# #ith the C!, they diverted the issue #hether or
not the increase of +P.1:& - must be paid in the union members as a matter of practice and
parol evidence can be resorted to in proving or e=plaining the e=istence of a collateral
agreement despite that the employees are receiving #age above the minimum #age and
#hether #age distortion e=ist On )eptember .%, .&&,, the C! rendered <udgment in favor of
200
the >nion and reversed that of the E! Petitioner filed a motion for reconsideration #hich the C!
denied for lac* of merit on 9anuary $$, .&&:
+SS5&C Whether or not the company #as obliged to grant the #age increase under Wage
Order 7o 7C3-&0 as a matter of practiceR
H&L*C Petitioner is not obliged to grant the #age increase under Wage Order 7o 7C3-&0
either by virtue of the CB!, or as a matter of company practice "here is no legal basis to
implement the same across-the board ! perusal of the record sho#s that the lo#est paid
employee before the implementation of Wage Order ]0 is P.:&&&2day and none #as receiving
belo# P..%:& minimum "his could only mean that the union can no longer demand for any
#age distortion ad<ustment
201
Le;al Laboratories andDor !ose (n-eles vs National Che/ical +nd"stries .or@ers 5nion9
8(,L5 and the Co"rt of +nd"strial Relations
FactsC
"he Court of 'ndustrial 3elations +C'3- decided to reinstate @uillermo Ponseca, a dismissed
employee, to his former position #ith full bac* #ages from the day of his dismissal up to the
time he is reinstated #ithout loss of his seniority rights and of such other rights and privileges
en<oyed by him prior to his lay-off Ponseca #as entitled to bac* #ages from the day he ceased
reporting for #or*, to a day prior to his reinstatement Petitioners ob<ected to the inclusion of
P,&& "er die! in the computation of PonsecaKs bac* #ages because he did not spend for his
meals and lodgings for he #as all the time in Manila, his station C'3 stated that "er die!s
should be paid as part of the bac* #ages because they #ere Lpaid to him regularlyM
Per die! is intended to cover the cost of lodging and subsistence of officers and employees
#hen the latter are on duty outside of their permanent station Ponseca, during the period
involved, did not leave Manila )ince he spent nothing for meals and lodging outside of Manila,
there is nothing to be reimbursed )ince "er die! is in the nature of reimbursement, Ponseca
should not be entitled to "er die!s
'ssueC
Whether "er die!s are included in bac*pay
3ulingC
9udgement is hereby rendered ordering petitioner 4e=al 4aboratories to pay @uillermo Ponseca,
by #ay of net bac*pay, the sum of P.,1/8&&
202
G.R. No. %%%700 Septe/ber 8$ %99:
L45R*&S G. M(RC4S$ (L&!(N*R4 2. (N*R(*($ '(L2(?(R( !. L48&? (N* 3+LM( L.
CR5?$ petitioners$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N and +NS5L(R L+,& (SS5R(NC& C4.$
L2*.$ respondents.

35@!4!DO, 9C
,acts)
Petitioners #ere regular employees of private respondent 'nsular 4ife !ssurance CoC, 4td, but
they #ere dismissed #hen their positions #ere declared redundant ! special redundancy
benefit #as paid to them, #hich included payment of accrued vacation leave and fifty percent
+:&S- of unused current sic* leave, special redundancy benefit, e?uivalent to three +%- months
salary for every year of serviceD and additional cash benefits, in lieu of other benefits provided
by the company or re?uired by la#
%
Before the termination of their services, petitioner Marcos had been in the employ of private
respondent for more than t#enty +.&- yearsD petitioner !ndrada, more than t#enty-five +.:-
yearsD petitioner 4ope(, e=actly thirty +%&- yearsD and petitioner Cru(, more than t#enty +.&-
years

Petitioners, particularly Balta(ara 9 4ope(, sent a letter dated October .%, $//& to respondent
company ?uestioning the redundancy pac*age, )he claimed that they should receive their
respective service a#ards and other prorated bonuses #hich they had earned at the time they
#ere dismissed 'n addition, 4ope( argued that Gthe cash service a#ards have already been
budgeted in a fund distinct and apart from redundancy fund
:
"hereafter, private respondent re?uired petitioners to e=ecute a G3elease and Juitclaim,G
1
and
petitioners complied but #ith a #ritten protest reiterating their previous demand that they #ere
nonetheless entitled to receive their service a#ards
Mean#hile, in the same year, private respondent celebrated its 0&th anniversary #herein the
management approved the grant of an anniversary bonus e?uivalent to one +$- month salary
only to permanent and probationary employees as of 7ovember $:, $//&
/
On March .1, $//$, respondent company announced the grant of performance bonus to both
ran* and file employees and supervisory specialist grade and managerial staff e?uivalent to t#o
+.- months salary and .8: basic salary, respectively, as of December %&, $//& "he
performance bonus, ho#ever, #ould be given only to permanent employees as of March %&,
$//$
$&
203
'n a decision dated October 0, $//., the labor arbiter ordered respondent company to pay
petitioners their service a#ards, anniversary bonuses and prorated performance bonuses,
including ten percent +$&S- thereof as attorney's fees
+ss"e) WO7 respondent 743C committed reversible error or grave abuse of discretion in
affirming the validity of the G3elease and JuitclaimG and, conse?uently, that petitioners are not
entitled to payment of service a#ards and other bonuses
Held)
>nder prevailing <urisprudence, the fact that an employee has signed a satisfaction receipt for
his claims does not necessarily result in the #aiver thereof "he la# does not consider as valid
any agreement #hereby a #or*er agrees to receive less compensation than #hat he is entitled
to recover ! deed of release or ?uitclaim cannot bar an employee from demanding benefits to
#hich he is legally entitled
Furthermore, in the instant case, it is an undisputed fact that #hen petitioners signed the
instrument of release and ?uitclaim, they made a #ritten manifestation reserving their right to
demand the payment of their service a#ards "he element of total voluntariness in e=ecuting
that instrument is negated by the fact that they e=pressly stated therein their claim for the
service a#ards, a manifestation e?uivalent to a protest and a disavo#al of any #aiver thereof
"he grant of service a#ards in favor of petitioners is more importantly underscored in the
precedent case of 'nsular 4ife !ssurance Co, 4td, et al vs 743C, et al,
.,
#here this Court
ruled that Gas to the service a#ard differentials claimed by some respondent union members,
the company policy shall li*e#ise prevail, the same being based on the employment contracts
or collective bargaining agreements bet#een the parties !s the petitioners had e=plained,
pursuant to their policies on the matter, the service a#ard differential is given at the end of the
year to an employee #ho has completed years of service divisible by :
! bonus is not a gift or gratuity, but is paid for some services or consideration and is in addition
to #hat #ould ordinarily be given
.:
"he term GbonusG as used in employment contracts, also
conveys an idea of something #hich is gratuitous, or #hich may be claimed to be gratuitous,
over and above the prescribed #age #hich the employer agrees to pay
While there is a conflict of opinion as to the validity of an agreement to pay additional sums for
the performance of that #hich the promisee is already under obligation to perform, so as to give
the latter the right to enforce such promise after performance, the authorities hold that if one
enters into a contract of employment under an agreement that he shall be paid a certain salary
by the #ee* or some other stated period and, in addition, a bonus, in case he serves for a
specified length of time, there is no reason for refusing to enforce the promise to pay the bonus,
if the employee has served during the stipulated time, on the ground that it #as a promise of a
mere gratuity
"his is true if the contract contemplates a continuance of the employment for a definite term,
and the promise of the bonus is made at the time the contract is entered into 'f no time is fi=ed
for the duration of the contract of employment, but the employee enters upon or continues in
service under an offer of a bonus if he remains therein for a certain time, his service, in case he
remains for the re?uired time, constitutes an acceptance of the offer of the employer to pay the
204
bonus and, after that acceptance, the offer cannot be #ithdra#n, but can be enforced by the
employee
"he #eight of authority in !merican <urisprudence, #ith #hich #e are persuaded to agree, is that
after the acceptance of a promise by an employer to pay the bonus, the same cannot be
#ithdra#n, but may be enforced by the employee ;o#ever, in the case at bar, e?uity demands
that the performance and anniversary bonuses should be prorated to the number of months that
petitioners actually served respondent company in the year $//& "his observation should be
ta*en into account in the computation of the amounts to be a#arded to petitioners
W;535FO35 the decision of 4abor !rbiter !le= !rcadio 4ope( is upheld
205
2raders Royal 'an@ vs NLRC and 2raders Royal 'an@ &/ployees 5nion
GR No. 88%>8
GR+R49(H5+N4$ J.$
FactsC
^ 3espondent "raders 3oyal Ban* 5mployees >nion filed a complaint to the 743C on the
account of diminution of their benefits by the petitioner )aid diminution #as effected throughD
mid-year bonus, from t#o +.- months gross pay to t#o +.- months basic and year-end bonus
from three +%- months gross to only t#o +.- months
743C rendered a decision in favor of the 5mployees union and ordered "raders 3oyal
Ban* to pay to employees the mid-year bonus differential representing the difference bet#een
t#o +.- months gross pay and t#o +.- months basic pay and end-year bonus differential of one
+$- month gross pay for $/01
"he motion for reconsideration of "raders 3oyal Ban* #as then denied
"hus the petition for certiorari
'ssueC
Whether or not the reduction in bonuses is tantamount to diminution of benefitsR
;eldC
"he petition for Certiorari #as granted
3atioC
! bonus is a Lgratuity or act of liberality of the giver #hich the recipient has no right to
demand as a matter of rightM "he discretion of giving bonuses rests upon the management and
the income of the operations of the past year
't has been claimed that the income of the petitioner has indeed decreased yet the ban*
still gave out the usual bonuses !ny claim that the receipt of the employees of bonuses has
been a company tradition and cannot be ad<usted to its fiscal position is #ithout merit "he
company cannot be forced to give bonuses #hich it can no longer afford and in effect, be
penali(ed for its past generosity Bonuses are not part of labor standards li*e salaries, cost of
living allo#ances, and leave benefits, #hich are provided by the 4abor Code
206
National ,ederation of S"-ar .or@ers vs 4veQera
G.R. No. L9:970# May #% %981
&N '(NC$ 8L(N($ J$
,acts)
7ational Federation of )ugar Wor*ers +7F)W- has been the bargaining agent of C57"3!4
!T>C!353! D5 4! C!34O"! +C!C- ran* and file employees and has concluded #ith C!C a
collective bargaining agreement stipulating a provision regarding the grant of bonuses
On 7ovember .0, $/0$, 7F)W struc* allegedly to compel the payment of the $%th month pay
under PD 0:$, in addition to the Christmas, milling and amelioration bonuses being en<oyed by
C!C #or*ers
"o settle the stri*e, a compromise agreement #as concluded bet#een C!C and 7F)W on
7ovember stipulating that the parties agree to abide by the final decision of the )upreme Court
in any case involving the $%th Month Pay 4a# if it is clearly held that the employer is liable to
pay a $%th month pay separate and distinct from the bonuses already given
Mean#hile, a motion for reconsideration on the case of Marcopper Mining Corp vs Blas Ople
et al +@3 7o :$.:,- for the payment of $%th month pay under PD 0:$ #as denied and an
entry of <udgment #as made in favor of the >nion !fter the 'arco""er decision had become
final, 7F)W rene#ed its demand that C!C give the $%th month pay C!C refused ! notice of
stri*e #as filed #ith the Ministry of 4abor and 5mployment and #as subse?uently commenced
based on the non-payment of the $%th month pay
+ss"e)
Whether under PD 0:$, C!C is obliged to give its #or*ers a $%th month salary in addition to
Christmas, milling and amelioration bonuses stipulated in a collective bargaining agreement
amounting to more than a month's pay
Held)
"he evident intention of the la#, as revealed by the la# itself, #as to grant an additional income
in the form of a $%th month pay to employees not already receiving the same Other#ise put,
the intention #as to grant some relief H not to all #or*ers H but only to the unfortunate ones
not actually paid a $%th month salary or #hat amounts to it, by #hatever name calledD but it #as
not envisioned that a double burden #ould be imposed on the employer already paying his
employees a $%th month pay or its e?uivalent H #hether out of pure generosity or on the basis
of a binding agreement and, in the latter ease, regardless of the conditional character of the
grant +such as ma*ing the payment dependent on profit-, so long as there is actual payment
Other#ise, #hat #as conceived to be a $%th month salary #ould in effect become a $,th or
possibly $:th month pay "his vie# is <ustified by the la# itself #hich ma*es no distinction in the
grant of e=emptionC G5mployers already "aying their employees a :9t, !ont, "ay or its
equivalent are not covered by this DecreeG +PD 0:$-
207
"o re?uire employers +already giving their employees a $%th month salary or its e?uivalent- to
give a second $%th month pay #ould be unfair and productive of undesirable results "o the
employer #ho had acceded and is already bound to give bonuses to his employees, the
additional burden of a $%th month pay #ould amount to a penalty for his munificence or
liberality "he probable reaction of one so circumstance #ould be to #ithdra# the bonuses or
resist further voluntary grants for fear that if and #hen a la# is passed giving the same benefits,
his prior concessions might not be given due creditD and this negative attitude #ould have an
adverse impact on the employees
*ecision)
!t any rate, in vie# of the rulings made herein, 7F)W cannot insist on its claim that its
members are entitled to a $%th month pay in addition to the bonuses already paid by C!C
W;535FO35, the petition is dismissed for lac* of merit 7o costs )O O3D535D
208
G.R. No. L9>##7 ("-"st 1%$ %987
5N+3&RS(L C4RN 8R4*5C2S 6( *+3+S+4N 4, 5N+3&RS(L R4'+N( C4R84R(2+4N7$
petitioner,
vs
2H& N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N et. al
S(RM+&N24$ J.$
)ometime in May, $/8., the petitioner and the >niversal Corn Products Wor*ers >nion entered
into a collective bargaining agreement in #hich it #as provided, among other things, thatC
=== === ===
"he COMP!7A agrees to grant all regular #or*ers #ithin the bargaining unit #ith
at least one +$- year of continuous service, a Christmas bonus e?uivalent to the
regular #ages for seven +8- #or*ing days, effective December, $/8. "he bonus
shall be given to the #or*ers on the second #ee* of December
'n the event that the service of a #or*er is not continuous due to factory
shutdo#n, machine brea*do#n or prolonged absences or leaves, the Christmas
bonus shall be prorated in accordance #ith the length of services that #or*er
concerned has served during the year
=== === ===
"he agreement had a duration of three years, effective 9une $, $/8$, or until 9une $, $/8,
On account ho#ever of differences bet#een the parties #ith respect to certain economic issues,
the collective bargaining agreement in ?uestion e=pired #ithout being rene#ed On 9une $,
$/8/, the parties entered into an GaddendumG stipulating certain #age increases covering the
years from $/8, to $/88 )imultaneously, they entered into a collective bargaining agreement
for the years from $/8/ to $/0$ 4i*e the Gaddendum,G the ne# collective bargaining agreement
did not refer to the GChristmas bonusG theretofore paid but dealt only #ith salary ad<ustments
!ccording to the petitioner, the ne# agreements deliberately e=cluded the grant of Christmas
bonus #ith the enactment of Presidential Decree 7o 0:$ on December $1, $/8: 't further
claims that since $/8:, it had been paying its employees $%th-month pay pursuant to the
Decree
For failure of the petitioner to pay the seven-day Christmas bonus for $/8: to $/80 inclusive, in
accordance #ith the $/8. CB!, the union #ent to the labor arbiter for relief 'n his decision, the
labor arbiter ruled that the payment of the $%th month pay precluded the payment of further
Christmas bonus "he union appealed to the 7ational 4abor 3elations Commission +743C-
"he 743C set aside the decision of the labor arbiter appealed from and entered another one,
Gdirecting respondent company Nno# the petitionerO to pay the members concerned of
complainants NsicO union their 8-day #age bonus in accordance #ith the $/8. CB! from $/8: to
$/80
209

'))>5C
W;5";53 O3 7O" !DD'"'O7!4 BO7>)5) );!44 CO7)"'">"5 $%
";
MO7"; P!A
B575F'")
;54DC
7o, the seven-day bonus here demanded Gto be in addition to the legal re?uirementG !lthough
unli*e the %alenzuela CB!, #hich too* effect after the promulgation of Presidential Decree 7o
0:$ in $/8:, the sub<ect agreement #as entered into as early as $/8., that is no bar to our
application of %alenzuela. What is significant for us is the fact that, li*e the %alenzuela,
agreement, the Christmas bonus provided in the collective bargaining agreement accords a
re#ard, in this case, for loyalty, to certain employees "his is evident from the stipulation
granting the bonus in ?uestion to #or*ers G#ith at least one +$- year of continuous serviceG !s
#e said in Ealen(uelaG this is Ga purpose not found in PD 0:$
210
G.R. No. %%018 !"ly 1>$ %99>
8H+L+88+N& (+RL+N&S$ +NC. 68(L7$ petitioner$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N and (+RL+N& 8+L42S (SS4C+(2+4N 4,
2H& 8H+L+88+N&S 6(L8(87$ respondents.
G.R. No. %%:110 !"ly 1>$ %99>
(+RL+N& 8+L42S (SS4C+(2+4N 4, 2H& 8H+L+88+N&S 6(L8(87$ petitioner$
vs.
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N and 8H+L+88+N& (+RL+N&S$ +NC. 68(L7$
respondents.

FactsC
!4P!P filed its complaint . on )eptember, $//$, charging P!4 of violating Presidential Decree
7o 0:$, its 'mplementing 3ules and 3egulations and Memorandum Order 7o .0 issued by
then President Cora(on C !?uino, for unla#fully refusing and failing to pay the pilots their
thirteenth month pay from $/00 to $//& !side from their accumulated thirteenth month pay,
!4P!P prayed for an a#ard of P:&&,&&&&& as moral damages and P$&&,&&&&& as e=emplary
damages to each of their pilots, plus attorney's fees e?uivalent to ten percent +$&S- of the total
a#ards ad<udged )ubse?uently, ho#ever, !4P!P e=panded the coverage of its claim from
$/01 to $//& upon filing its position paper %
'n ans#er to the complaint, P!4 denied any liability to !4P!P and maintained that it #as not
obliged to give its pilots a thirteenth month pay under PD 0:$ as it #as already paying said
employees the e?uivalent of a thirteenth month pay in the form of a year-end bonus P!4
invo*es that under )ection . of PD 0:$ and its 'mplementing 3ules and 3egulations,
Gemployers already paying their employees a $%th month pay or more in a calendar year or its
e?uivalent at the time of this issuance,G are not covered by PD 0:$ , !dditionally, P!4 contends
that there is no demandable obligation in the absence of any contractual stipulation or a legal
provision re?uiring it to give its pilots a thirteenth month pay as aside from a year-end bonus
that the latter are already receiving :
W;535FO35, <udgment is hereby rendered in this case, declaring respondent Philippine
!irlines +P!4- guilty of non-payment of the thirteenth month pay 3espondent is therefore
ordered to pay members of the complainant !irlines Pilots !ssociation of the Philippines
+!4P!P- the follo#ing sums of moneyC
$%th month pay P 1/,$18,.,,&&
Moral and 5=emplary
damages 1,/,0,&&&&&
!ttorney's fees 8,1$$,:,.&&
HHHHHHH
@rand "otal P0%,8.1,810&&
211
!ll other claims are denied for lac* of legal or factual basis 8
'n the aforecited decision, the 4abor !rbiter discarded P!4's contentions and too* note of the
fact that the payment of the year-end bonus is conditional and uncertain P!4's argument that is
e=empted from the coverage of PD 0:$ #as ruled out because it #as sho#n that e=cept for the
pilots, all other employees of P!4 #ere receiving both the thirteenth moth pay and the year-end
bonus ;o#ever, the coverage of the a#ard for thirteenth month pay #as confined to $/00 until
$//&, e=cluding those from $/01 and $/08, due to !4P!P's failure to amend its complaint
7ot satisfied, both parties appealed to the 743C #hich in turn promulgated the assailed
resolution on 7ovember .%, $//% 0 and ruled in this #iseC
W;535FO35, premises considered, the decision of +sic- dated ./, May $//. is hereby
!FF'3M5D #ith the modification that the respondent P!4 also pay the $%th month pay to the
!4P!P pilots for the years $/01 and $/08D the dismissal of the claim for moral and e=emplary
damagesD the payment of P!4 of legal interest form the dates the $%th month pay of the !4P!P
pilots accrued up to the time of actual paymentD and the payment of attorney's fees of $&S of
the total a#ard
)O O3D535D /
)till dissatisfied, the parties sought reconsideration #hich, ho#ever, #ere both denied by the
743C in this resolution dated February .0, $//, $& "he 743C also reduced the a#ard of
attorney's fees to five percent +:S- and deleted the payment of legal interest for lac* of basis
$$
;ence, these petitions
"he pivotal issue in this petition is #hether or not the 743C committed grave abuse of
discretion in holding P!4 liable to the members of !4P!P for non-payment of their thirteenth
month pay from $/00 to $//&, not #ithstanding that, as claimed by P!4, there is no legal basis
for the said finding
P!4's contention is premised on the follo#ing argumentsC
$- Payment of the thirteenth month pay under PD 0:$ and Memorandum Order 7o .0 covers
only ran* and file employees Pilots are e=cluded from the coverage because they are not ran*
and file employees but rather supervisory employees ;ence, they are not entitled to any
thirteenth month pay
.- "here is no contractual obligation to pay the pilots any thirteenth month pay in the absence of
any provision in their CB! !nd even assuming that they are entitled to a thirteenth month pay,
the payment of a year-end bonus is already e?uivalent to a thirteenth month pay
!nent the first argument, P!4 cites Memorandum Order 7o .0 #hich provides as follo#sC
)ec $ of Presidential Decree 7o 0:$ is hereby modified to the e=tent that all employers are
hereby re?uired to pay all their ran* and file employees a $%th month pay not later than
December ., of every year
212
'ssueC
Whether or not pilots cannot be classified as ran* and file employees since the nature of their
<ob includes the e=ercise of supervision over the cabin cre# and the po#er to recommend
disciplinary actions over the latter $.
'nterestingly, ho#ever, the contention #as raised by P!4 rather belatedly and invo*ed for the
first time on appeal Worse, this issue #as not even discussed in P!4's original Memorandum
and #as raised only much later #hen P!4 filed a )upplemental Memorandum on !ppeal
through a ne# counsel 'n fact, in denying P!4's appeal, the 743C did not even bother to
consider the ne# issue raised by P!4 "his precludes us from ta*ing cogni(ance of and
resolving the aforementioned issue #ith respect to the employment status of the pilots as it
#ould be violative of the proscription against the presentation of ne# issues on appeal "he rule
is #ell-settled that points of la#, theories, issues and arguments not ade?uately brought to the
attention of the trial court need not be, and ordinarily #ill not be considered by a revie#ing court
as they cannot be raised for the first time on appeal $% because this #ould be offensive to the
basic rules of fair play, <ustice and due process $, By invo*ing the alleged supervisory status of
the pilots during the pendency of its appeal and raising the issue only later in their )upplemental
Memorandum, it #as evident that this #as a last ditch effort to shift to a ne# theory and raise a
ne# matter in the hope of a favorable result "his, ho#ever, is the pernicious practice that has
consistently been re<ected "hus, P!4 is no# barred from claiming that their pilots are not ran*
and file employees
"he other argument of P!4 is that there is no provision in the CB! of !4P!P #hich obligates the
former to pay the members of the latter any thirteenth month pay P!4 contends that it is of no
moment that its other employees, namely, the flight attendants belonging to the Flight
!ttendants' and )te#ards' !ssociation of the Philippines +F!)!P- and the other ran* and file
employees belonging to Philippine !irlines 5mployees' !ssociation +P!45!-, are being granted
both the thirteenth month pay and the year-end bonus because the payment of the said benefits
#ere the result of contractual negotiations in their respective CB!'s the absence of such
contractual grant to the members of !4P!P only sho#s that there #as no intention to give the
pilots the same benefits Furthermore, P!4 argues that even assuming that the pilots are legally
entitled to a thirteenth month pay, the la# e=empts them from compliance #ith the same
because the payment of a year-end2Christmas bonus is already e?uivalent to the thirteenth
month pay "o bolster this claim, P!4 relies on the doctrine laid do#n by this Court in the cases
of 7ational Federation of )ugar Wor*ers +7F)W- vs Ove<era, N$$, )C3! %:, +$/0.-O, Dole
Philippines, 'nc vs 4eogardo, 9r N$$8 )C3! /%0 +$/0.-O and Bro*enshire Memorial ;ospital
vs 743C N$,% )C3! :1, +$/01-O, #hich #as crystalli(ed as follo#sC
"he absence of an e=press provision in the CB! bet#een P!4 and !4P!P obligating the former
to pay the members of the latter a thirteenth month pay is immaterial 't cannot be disputed that
the tenor of PD 0:$ as amended by Memorandum Order 7o .0 is mandatory in so providing
that Gall employers are hereby re?uired to pay all their ran* and file employees a thirteenth
month pay not later than December ., of every yearG
"he term GbonusG #as in turn interpreted to meanC
GN!O bonus is an amount granted and paid to an employee for his industry and loyalty #hich
contributed to the success of the employer's business and made possible the reali(ation of
profits 't is an act of generosity of the employer it is also granted by an enlightened
213
employer to spur the employee to greater efforts for the success of the business and reali(ation
of bigger profits $/
"he a#ard of attorney's fees on the basis of ?uantum meruit at the rate of five percent +:S- of
the total monetary a#ard is reasonable in this case considering the e=plicit provisions laid out in
!rticle ''' of the 4abor Code and in 3ule E''', )ec '', Boo* ''' of the Omnibus 3ules
'mplementing the 4abor Code, .8 to #itC
!rt ''' !ttorney's fees H +a- in cases of unla#ful #ithholding of #ages the culpable party may
be assessed attorney's fees e?uivalent to ten percent of the amount #ages recovered
=== === ===
)ec $$, !ttorney's fees H !ttorney's fees in any <udicial or administrative proceedings for the
recovery of #ages shall not e=ceed $&S of the amount a#arded "he fees may be deducted
from the total amount due the #inning party
W;535FO35, finding no merit in the petitions, the same are hereby D57'5D and the
3esolutions of public respondent 743C promulgated on 7ovember .%, $//% and February .0,
$//, are hereby !FF'3M5D
)O O3D535D
214
,ra/anlis ,ar/s +nc. vs. Minister of Labor 6G.R. No. 71>%>9%7 March 8$ %9897
FactsC
'n !pril $/0&, eighteen +$0- employees of the petitioners filed against their employer, and the
other petitioners t#o labor standard cases #hich #ere doc*eted in the 3egional Office of the
Ministry of 4abor in Bacolod City as F!D Cases 7os $8/$0& and &8/.-0& +GP!F4>
)5P"5MB53 CO7E57"'O7 E) F3!M!74') F!3M)G-, alleging that in $/88 to $/8/ they
#ere not paid emergency cost of living allo#ance +5CO4!- minimum #age, $%th month pay,
holiday pay, and service incentive leave pay
"he Deputy Minister of 4abor favored the employees of the petitioner
'ssueC
Framanlis Farms, 'nc alleged that the Deputy Minister erredC
$ in a#arding pay differentials, holiday and service incentive leave for pa*ya# #or*ers #ho are
not regular employees but are merely paid on piece-rate, contrary to !rt 0. of the 4abor CodeD
. in re?uiring the petitioners to pay $%th month pay despite the fact that they +petitioners- had
substantially complied #ith the re?uirement by e=tending yearly bonuses and other benefits in
*ind and in cash to the complainants, pursuant to )ection %+c- of PD 0:$ #hich e=empts the
employer from paying $%th month pay #hen its e?uivalent has already been givenD and
% in not precisely stating #ho among the private respondents are pa*ya# and non-pa*ya#
#or*ers
;eldC
"he respondent Minister did not err in re?uiring the petitioners to pay #age differentials to their
pa*ya# #or*ers With regard to the $%th month pay, petitioners admitted that they failed to pay
their #or*ers $%th month pay in $/80 and $/8/ Benefits in the form of food or free electricity,
assuming they #ere given, #ere not a proper substitute for the $%th month pay re?uired by la#
7either may year-end re#ards for loyalty and service be considered in lieu of $%th month pay
"he failure of the Minister's decision to identify the pa*ya# and non-pa*ya# #or*ers does not
render said decision invalid "he #or*ers may be identified or determined in the proceedings for
e=ecution of the <udgment
W;535FO35, the petition for certiorari is dismissed #ith costs against the petitioners
215
S(N M+G5&L C4R84R(2+4N 6C(G(A(N C4C(9C4L( 8L(N27$ petitioner,
vs
Hon. (M(*4 G. +NC+4NG$ *ep"ty Minister of Labor and C(G(A(N C4C(9C4L( ,R&&
.4RC&RS 5N+4N$ respondents
,(C2S)
On 9anuary %, $/88, Cagayan Coca-Cola Free Wor*ers >nion, private respondent herein, filed
a complaint against )an Miguel Corporation +Cagayan Coca-Cola Plant-, petitioner herein,
alleging failure or refusal of the latter to include in the computation of $%th- month pay such
items as sic*, vacation or maternity leaves, premium for #or* done on rest days and special
holidays, including pay for regular holidays and night differentials
!n Order dated February $:, $/88 #as issued by 3egional Office 7o 6 #here the complaint
#as filed re?uiring herein petitioner )an Miguel Corporation +Cagayan Coca-Cola Plant- Gto pay
the difference of #hatever earnings and the amount actually received as $%th month pay
e=cluding overtime premium and emergency cost of living allo#anceG
;erein petitioner appealed from that Order to the Minister of 4abor in #hose behalf the Deputy
Minister of 4abor !mado @ 'nciong issued an Order dated 9une 8, $/80 affirming the Order of
3egional Office 7o 6 and dismissing the appeal for lac* of merit Petitioner's motion for
reconsideration having been denied, it filed the instant petition
On February $,, $/8/, this Court issued a "emporary 3estraining Order en<oining respondents
from enforcing the Order dated December $/, $/80
Public respondent's consistent stand on the matter since the effectivity of Presidential Decree
0:$ is that Gpayments for sic* leave, vacation leave, and maternity benefits, as #ell as salaries
paid to employees for #or* performed on rest days, special and regular holidays are included in
the computation of the $%th-month pay On its part, private respondent cited innumerable past
rulings, opinions and decisions rendered by then !cting 4abor )ecretary !mado @ 'nciong to
the effect that, Gin computing the mandatory bonus, the basis is the total gross basic salary paid
by the employer during the calendar year )uch gross basic salary includesC +$- regular salary or
#ageD +.- payments for sic*, vacation and maternity leavesD +%- premium for #or* performed on
rest days or holidaysC +,- holiday pay for #or*ed or un#or*ed regular holidayD and +:-
emergency allo#ance if given in the form of a #age ad<ustmentG
Petitioner, on the other hand, assails as erroneous the aforesaid order, ruling and opinions,
vigorously contends that Presidential Decree 0:$ spea*s only of 1asic salary as basis for the
determination of the $%th-month payD submits that payments for sic*, vacation, or maternity
leaves, night differential pay, as #ell as premium paid for #or* performed on rest days, special
and regular holidays do not form part of the basic salaryD and concludes that the inclusion of
those payments in the computation of the $%th-month pay is clearly not sanctioned by
Presidential Decree 0:$
+SS5&)
$ Whether or not in the computation of the $%th-month pay under Presidential Decree 0:$,
payments for sic*, vacation or maternity leaves, premium for #or* done on rest days and
216
special holidays, including pay for regular holidays and night differentials should be
considered
H&L*)
"he Court finds petitioner's contention meritorious
"he provision in dispute is )ection $ of Presidential Decree 0:$ and providesC
!ll employers are hereby re?uired to pay all their employees receiving a basic salary of not
more than Pl,&&& a month, regardless of the nature of the employment, a $%th-month pay not
later than December ., of every year
)ection . of the 3ules and 3egulations for the implementation of Presidential Decree 0:$
providesC
a- "hirteenth-month pay shall mean one t#elfth +$2$.- of the basic salary of an employee
#ithin a calendar year
b- Basic salary shall include all remunerations on earnings paid by an employer to an
employee for services rendered but may not include cost-of-living allo#ances granted
pursuant to Presidential Decree 7o :.: or 4etter of 'nstructions 7o $8,, profit sharing
payments and all allo#ances and monetary benefits #hich are not considered or
integrated as part of the regular or basic salary of the employee at the time of the
promulgation of the Decree on December $1, $/8:
>nder Presidential Decree 0:$ and its implementing rules, the 1asic salary of an
employee is used as the basis in the determination of his $%th-month pay !ny
compensations or remunerations #hich are deemed not part of the basic pay is e=cluded
as basis in the computation of the mandatory bonus
>nder the 3ules and 3egulations 'mplementing Presidential Decree 0:$, the follo#ing
compensations are deemed not part of the basic salaryC
a- Cost-of-living allo#ances granted pursuant to Presidential Decree :.: and 4etter of
'nstructions 7o $8,D
b- Profit sharing paymentsD
c- !ll allo#ances and monetary benefits #hich are not considered or integrated as part
of the regular basic salary of the employee at the time of the promulgation of the Decree
on December $1, $/8:
>nder a later set of )upplementary 3ules and 3egulations 'mplementing Presidential
Decree 0:$ issued by the then 4abor )ecretary Blas Ople, overti!e "ay, earnings and
ot,er re!unerations are e=cluded as part of the basic salary and in the computation of
the $%th-month pay
217
!ll e=clusionary phrase Gall allo#ances and monetary benefits #hich are not considered
or integrated as part of the basic salaryG sho#s also the intention to strip basic salary of
any and all additions #hich may be in the form of allo#ances or GfringeG benefits
Moreover, the )upplementary 3ules and 3egulations 'mplementing Presidential Decree
0:$ is even more emphatic in declaring that earnings and other remunerations #hich are
not part of the basic salary shall not be included in the computation of the $%th-month
pay
While doubt may have been created by the prior 3ules and 3egulations 'mplementing
Presidential Decree 0:$ #hich defines basic salary to include all re!unerations or
earnings paid by an employer to an employee, this cloud is dissipated in the later and
more controlling )upplementary 3ules and 3egulations #hich categorically, e=clude
from the definition of basic salary earnings and other remunerations paid by employer to
an employee
"he all-embracing phrase Gearnings and other remunerationG #hich are deemed not part
of the basic salary includes #ithin its meaning payments for sic*, vacation, or maternity
leaves Maternity premium for #or*s performed on rest days and special holidays pays
for regular holidays and night differentials !s such they are deemed not part of the basic
salary and shall not be considered in the computation of the $%th-month pay they, #ere
not so e=cluded, it is hard to find any Gearnings and other remunerationsG e=pressly
e=cluded in the computation of the $%th-month pay "hen the e=clusionary provision
#ould prove to be 'dle and #ith no purpose
"his conclusion finds strong support under the 4abor Code of the Philippines "o cite a
fe# provisionsC
!rt 08 H overti!e ?or- Wor* may be performed beyond eight hours a day provided
#hat the employee is paid for the overtime #or*, additional compensation e?uivalent to
his regular #age plus at least t#enty-five +.:S- percent thereof
't is clear that overtime pay is an additional co!"ensation other than and added to the
regular #age or basic salary, for reason of #hich such is categorically e=cluded from the
definition of basic salary under the )upplementary 3ules and 3egulations 'mplementing
Presidential Decree 0:$
'n !rticle /% of the same Code, paragraph
c- #or* performed on any special holiday shall be paid an additional compensation of at
least thirty percent +%&S- of the regular #age of the employee
't is li*e#ise clear that premium for special holiday #hich is at least %&S of the regular
#age is an additional compensation other than and added to the regular #age or basic
salary For similar reason it shall not be considered in the computation of the $%th-
month pay
W;535FO35, the Orders of the Deputy 4abor Minister dated 9une 8, $/80 and December $/,
$/80 are hereby set aside and a ne# one entered as above indicated "he "emporary
218
3estraining Order issued by this Court on February $,, $/8/ is hereby made permanent 7o
pronouncement as to costs
219
G.R. No. %%>7 March 1$ %99:
+S(L(M( M(CH+N& .4RCS C4R84R(2+4N$ petitioner,
vs
H4N. L('4R R&L(2+4NS C4MM+SS+4N$ ,+,2H *+3+S+4N and +S(L(M( M(CH+N&
.4RCS C4R84R(2+4N L('4R 5N+4N9.4RC&RS (LL+(NC& 2R(*& 5N+4N (N*D4R
H&NRA '(AG(N$ N(2H(N 85R(C(N$ GR&G4R+4 L(AS4N$ !R.$ N(N*A 3+R25*(?4$
!+MMA S(CR4$ CH(R+24 &S2R&R($ *&N+S4N (M'4(A&N$ '+&N3&N+*4 C('+L$
M&LCH4R M(R2+N&?$ ,L4R+*(N '+L(R$ N4&L L(AS4N$ &*+S4N (LM4R(*&S$ M(.
C&L&S2+N( CL&M&N$ L&4NC+4 C5+?4N$ 3&NN+& 484R24$ R4*4L,4 +GN(C+4 and
(LM+R(N2& ?(G(*4$ respondents

3+25G$ J.$
FactsC
'salama Machine Wor*s Corporation and private respondent 'salama Machine Wor*s
Corporation 4abor >nion-Wor*ers !lliance "rade >nion entered into a collective bargaining
agreement +GCB!G- , ie, to furnish the #or*ers #ith safety shoes and free company laminated
'Ds and, in general, to improve the employees' #or*ing conditions
On .$ December $/08, the corporation paid the #or*ers the $%th month pay based on the
average number of days actually #or*ed during the year "he union, through its president,
private respondent ;enry Baygan, demanded that the $%th month pay should, instead, be made
on the basis of a full one month basic salary "he corporation countered that its o#n
computation of the $%th month pay accorded #ith the CB! provisions and Presidential Decree
7o 0:$
On &: 9anuary $/00, the union filed a notice of stri*e #ith the Department of 4abor and
5mployment, 3egion 6, Cagayan de Oro, alleging the commission of unfair labor practice and
CB! violation by the corporation !fter several conferences, the 7ational Conciliation and
Mediation Board +G7CMBG- succeeded in having the dispute amicably settled e=cept for the $%th
month pay differential #hich remained in contention "he union insisted that the failure of the
corporation to implement fully the $%th month pay provision of the CB! amounted to unfair labor
practice "he corporation argued that the $%th month pay #as a mere money claim and
therefore not a Gstri*eable issueG "he case #as ultimately indorsed to the 743C for compulsory
arbitration
'ssueC Whether or not the $%
th
month pay can be a basis for stri*e
;eldC
'n this case, the real reason for the stri*e is clearly traceable to the unresolved dispute bet#een
the parties on $%th month pay di;;erentials under Presidential Decree 7o 0:$, ie, the proper
manner of its application and computation "he Court does not see this issue, given the
afore?uoted provisions of the la# and its implementing rules, to be constitutive of unfair labor
practice )ection / of 3ules and 3egulations 'mplementing Presidential Decree 7o 0:$, in fact,
220
specifically states that G+n-onpayment of the thirteenth-month pay provided by the Decree and
+the- rules shall be treated as !oney clai!s cases and shall be processed in accordance #ith
the 3ules 'mplementing the 4abor Code of the Philippines and the 3ules of the 7ational 4abor
3elations CommissionG
221
G.R. No. L9>0# ("-"st #$ %98#
(LL+(NC& 4, G43&RNM&N2 .4RC&RS 6(G.7L 8N'9,&M( '(NC &M8L4A&&S
(SS4C+(2+4N 6(G.7L C(+S(H(N (2 C(8(2+R(N NG MG( M(NG(G(.( (2 C(.(N+
NG M.SS 6(G.7L '(L(R( &M8L4A&&S (SS4C+(2+4N 6(G.7L GS+S .4RC&RS
(SS4C+(2+4N 6(G.7L SSS &M8L4A&&S (SS4C+(2+4N 6(G.7L 832( &M8L4A&&S
(SS4C+(2+4N 6(G.7L N(2+4N(L (LL+(NC& 4, 2&(CH&RS (N* 4,,+C& .4RC&RS
6(G.7L $ petitioners$
vs.
2H& H4N4R('L& M+N+S2&R 4, L('4R and &M8L4AM&N2$ 8H+L+88+N& N(2+4N(L
'(NC 68N'7L M&2R484L+2(N .(2&R.4RCS and S&.&R(G& SAS2&M 6M.SS7L
G43&RNM&N2 S&R3+C& +NS5R(NC& SAS2&M 6GS+S7L S4C+(L S&C5R+2A SAS2&M
6SSS7L 8H+L+88+N& 3+RG+N+( 24'(CC4 (*M+N+S2R(2+4N 6832(7 8H+L+88+N& N4RM(L
C4LL&G& 68NC7L 84LA2&CHN+C 5N+3&RS+2A 4, 2H& 8H+L+88+N&S 68587$ respondents.

@>"'5335T, 93, 9C
,acts)
!ccording to the petitioners, PD 7o 0:$ re?uires all employers to pay the $%th-month pay to
their employees #ith one sole e=ception found in )ection . #hich states that G+5-mployers
already paying their employees a $%th month pay or its e?uivalent are not covered by this
Decree G "he petitioners contend that )ection % of the 3ules and 3egulations 'mplementing
Presidential Decree 7o 0:$ included other types of employers not e=empted by the decree
"hey state that no#here in the decree is the secretary, no# Minister of 4abor and 5mployment,
authori(ed to e=empt other types of employers from the re?uirement
)ection % of the 3ules and 3egulations 'mplementing Presidential Decree 7o 0:$ providesC
)ection % 5mployers covered H "he Decree shall apply to all employers e=cept
toC
a- Distressed employers, such as +$- those #hich are currently incurring
substantial losses or $$.- in the case of non-profit institutions and organi(ations,
#here their income, #hether from donations, contributions, grants and other
earnings from any source, has consistently declined by more than forty +,&S- per
cent of their normal income for the last t#o +.- -years, sub<ect to the provision of
)ection 8 of this issuance
b- "he @overnment and any of its political subdivisions, including government-
o#ned and controlled corporations, e=cept-t those corporation, operating
essentially as private, ,subsidiaries of the governmentD
c- 5mployers already paying their employees $%th-month pay or more in a
calendar year or its e?uivalent at the of this issuanceD
d- 5mployers of household helpers and persons in the personal service of
another in relation to such #or*ersC and
222
e- 5mployers of those #ho are paid on purely commission, boundary, or tas*
basis and those #ho are paid a fi=ed for performing a specific #or*, irrespective
of the time consumed in the performance thereof, e=cept #here the #or*ers are
paid an piece- rate basis in #hich case the employer shall be covered by this
issuance Cinsofar ab such #or*ers are concerned
"he petitioners assail this rule as ultra vires and void Citing Philippine !pparel Wor*ers'>nion v
7'3C et al, +$&1 )C3! ,,,-D "eo=on v Members of the Board of' !dministators +%% )C3! :0:-D
)antos u ;on 5sten(o et al, +$&/ Phil ,$/-D ;ilado u Collector of 'nternal 3evenue +$&& Phil
.00-, and Olsen P Co 'nc v !ldanese and "rinidad +,% Phil .:/-, the petitioners argue that
regulations adopted under legislative authority must be in harmony #ith the provisions of the la#
and for the sole purpose of carrying into effect its general provisions "hey state that a
legislative act cannot be amended by a rule and an administrative officer cannot change the la#
)ection % is challenged as a substantial modification by rule of a Presidential Decree and an
unla#ful e=ercise of legislative po#er
+ss"e) WO7 the branches, agencies, subdivisions, and instrumentalities of the @overnment,
including government o#ned or controlled corporations included among the , GemployersGG
under Presidential Decree 7o 0:$ #hich are re?uired to pay an their employees receiving a
basic salary of not more than P$,&&&&& a month, a thirteenth +$%th- month pay not later than
December ., of every year
Held)
"he )olicitor @eneral statesC
GPresidential Decree 7o 0:$ is a labor standard la# #hich re?uires covered employers to pay
their employees receiving not more than P$,&&&&& a month an additional thirteenth-month pay
'ts purpose is to increase the real #age of the #or*er +Marcopper Mining Corp v Ople, $&:
)C3! 8:D and 7ational Federation of )ugar Wor*ers v Ove<era, @3 7o :/8,%, May %$,
$/0.- as e=plained in the'#hereas'clause #hich readC
W;535!), it is necessary to further protect the level of real
#ages from the ravage of #orld-#ide inflationD
W;535!), there has been no increase in the legal minimum
#age rates since $/8&D $$
W;535!), the Christmas season is an opportune time for
society to sho# its concern for the plight of the #or*ing masses so
they may celebrate the Christmas and 7e# Aear
=== === ===
What the PD 7o 0:$ intended to cover, as e=plained in the prefatory statement
of the Decree, are only those in the private sector #hose real #ages re?uire
protection from #orld-#ide inflation "his is emphasi(ed by the G#hereasG clause
#hich states that 'there has been no increase in the legal minimum #age rates
since $/8&' "his could only refer to the private sector, and not to those in the
government service because at the time of the enactment of Presidential Decree
223
7o 0:$ in $/8:, only the employees in the private sector had not been given any
increase in their minimum #age "he employees in the government service had
already been granted in $/8, a ten percent across-the-board increase on their
salaries as stated in PD 7o :.:, )ection ,
Moreover, #here employees in the government service #ere to benefit from labor
standard la#s, their coverage is e=plicitly stated in the statute or presidential
enactment "his is evident in +a- Presidential Decree 7o %/&, )ec $ #hich
granted emergency cost of living allo#ance to employees in the national
governmentD +b- 3epublic !ct 7o 1$$$, )ec $& on medicare benefitsD +c-
Presidential Decree 7o -,,., "itle '', !rticle /8 on the applicable minimum #age
ratesD +d- Presidential Decree 7o ,,., "itle $$, !rticle $18 +g- on #or*men's
compensationD +e- Presidential Decree 7o $$.% #hich provides for increases in
emergency allo#ance to employees in the private sector and in salary to
government employees in )ection . thereofD and +f- 5=ecutive Order 7o 8:.
granting government employees a year-end bonus e?uivalent to one #ee*'s pay
"hus, had the intention been to include government employees under the
coverage of Presidential Decree 7o 0:$, said Decree should have e=pressly so
provided and there should have been accompanying yearly appropriation
measures to implement the same "hat no such e=press provision #as provided
and no accompanying appropriation measure to #as passed clearly sho# the
intent to e=clude government employees from the coverage of P D 7o 0: $
We agree
't is an old rule of statutory construction that restrictive statutes and acts #hich impose burdens
on the public treasury or #hich diminish rights and interests, no matter ho# broad their terms do
not embrace the )overeign, unless the )overeign is specifically mentioned +)ee Dollar )avings
Ban* v >nited )tates, $/ Wall +>)- ..8D >nited )tates v >nited Mine Wor*ers of !merica,
%%& >) .1:- "he 3epublic of the Philippines, as sovereign, cannot be covered by a general
term li*e GemployerG unless the language used in the la# is clear and specific to that effect
W;535FO35, the petition is hereby D')M'))5D for lac* of merit
224
R4L(N*4 A. 2(N vs. L&43+G+L*4 L(GR(M($ &2 (L.
G.R. No. %:%118 ("-"st %:$ 11
M&N*4?($ !.)
F!C")C Petitioner 3olando "an is the president of )upreme "heater Corporation and the
general manager of Cro#n and 5mpire "heaters in Butuan City Private respondent 4eovigildo
4agrama is a painter, ma*ing ad billboards and murals for the motion pictures sho#n at the
5mpress, )upreme, and Cro#n "heaters for more than $& years, from )eptember $, $/00 to
October $8, $//0
On October $8, $//0, private respondent 4agrama #as summoned by "an and upbraidedC
G7angihi na naman *a sulod sa imong dra#ingananG +GAou again urinated inside your #or*
areaG- When 4agrama as*ed #hat "an #as saying, "an told him, G!ya# daghang estorya Dili
*o gusto nga mo-dra#ing *a pa @ui*an *aron, #ala nay dra#ing @a#asG +GDon't say anything
further ' don't #ant you to dra# anymore From no# on, no more dra#ing @et outG-
4agrama denied the charge against him ;e claimed that he #as not the only one #ho entered
the dra#ing area and that, even if the charge #as true, it #as a minor infraction to #arrant his
dismissal ;o#ever, everytime he spo*e, "an shouted G@a#asG +G@et outG-, leaving him #ith no
other choice but to leave the premises
4agrama filed a complaint #ith the )ub-3egional !rbitration Branch 7o 6 of the 7ational 4abor
3elations Commission +743C- in Butuan City ;e alleged that he had been illegally dismissed
and sought reinvestigation and payment of $%th month pay, service incentive leave pay, salary
differential, and damages
Petitioner "an denied that 4agrama #as his employee ;e asserted that 4agrama #as an
independent contractor #ho did his #or* according to his methods, #hile he +petitioner- #as
only interested in the result thereof ;e cited the admission of 4agrama during the conferences
before the 4abor !rbiter that he #as paid on a fi=ed piece-#or* basis, ie, that he #as paid for
every painting turned out as ad billboard or mural for the pictures sho#n in the three theaters,
on the basis of a Gno mural2billboard dra#n, no payG policy ;e submitted the affidavits of other
cinema o#ners, an amusement par* o#ner, and those supervising the construction of a church
to prove that the services of 4agrama #ere contracted by them ;e denied having dismissed
4agrama and alleged that it #as the latter #ho refused to paint for him after he #as scolded for
his habits
'))>5C Whether or not an employer-employee relationship e=isted bet#een
petitioner and private respondent, and #hether petitioner is guilty of illegally dismissing private
respondentR
;54DC'n determining #hether there is an employer-employee relationship, #e have applied a
Gfour-fold test,G to #itC +$- #hether the alleged employer has the po#er of selection and
engagement of employeesD +.- #hether he has control of the employee #ith respect to the
means and methods by #hich #or* is to be accomplishedD +%- #hether he has the po#er to
dismissD and +,- #hether the employee #as paid #ages "hese elements of the employer-
employee relationship are present in this case
"he e=istence in this case of the first element is undisputed 't #as petitioner #ho engaged the
services of 4agrama #ithout the intervention of a third party 't is the e=istence of the second
element, the po#er of control, that re?uires discussion here
225
Of the four elements of the employer-employee relationship, the Gcontrol testG is the most
important Compared to an employee, an independent contractor is one #ho carries on a
distinct and independent business and underta*es to perform the <ob, #or*, or service on its
o#n account and under its o#n responsibility according to its o#n manner and method, free
from the control and direction of the principal in all matters connected #ith the performance of
the #or* e=cept as to the results thereof ;ence, #hile an independent contractor en<oys
independence and freedom from the control and supervision of his principal, an employee is
sub<ect to the employer's po#er to control the means and methods by #hich the employee's
#or* is to be performed and accomplished
'n the case at bar, albeit petitioner "an claims that private respondent 4agrama #as an
independent contractor and never his employee, the evidence sho#s that the latter performed
his #or* as painter under the supervision and control of petitioner 4agrama #or*ed in a
designated #or* area inside the Cro#n "heater of petitioner, for the use of #hich petitioner
prescribed rules "he rules included the observance of cleanliness and hygiene and a
prohibition against urinating in the #or* area and any place other than the toilet or the rest
rooms/ Petitioner's control over 4agrama's #or* e=tended not only to the use of the #or* area,
but also to the result of 4agrama's #or*, and the manner and means by #hich the #or* #as to
be accomplished
Moreover, it #ould appear that petitioner not only provided the #or*place, but supplied as #ell
the materials used for the paintings, because he admitted that he paid 4agrama only for the
latter's services$&
W;535FO35, based on the foregoing, the petition is D57'5D for lac* of sho#ing that the
Court of !ppeals committed any reversible error
226
La/bo vs. NLRC
G.R. No. %%%01 4ctober 1>$ %999
F!C")C
Petitioners !velino 4ambo and Eicente Belocura #ere employed as tailors by private
respondents 9C "ailor )hop and2or 9ohnny Co on )eptember $&, $/0: and March %, $/0:,
respectively "hey #or*ed from 0C&& am to 8C&& pm daily, including )undays and holidays !s
in the case of the other $&& employees of private respondents, petitioners #ere paid on a piece-
#or* basis, according to the style of suits they made 3egardless of the number of pieces they
finished in a day, they #ere each given a daily pay of at least P1,&&
On 9anuary $8, $/0/, petitioners filed a complaint against private respondents for illegal
dismissal and sought recovery of overtime pay, holiday pay, premium pay on holiday and rest
day, service incentive leave pay, separation pay, $%th month pay, and attorneyKs fees
!fter hearing, 4abor !rbiter 9ose @ @utierre( found private respondents guilty of illegal
dismissal and accordingly ordered them to pay petitionersK claims
On appeal by private respondents, the 743C reversed the decision of the 4abor !rbiter 't found
that petitioners had not been dismissed from employment but merely threatened #ith a closure
of the business if they insisted on their demand for a Gstraight payment of their minimum #age,G
after petitioners, on 9anuary $8, $/0/, #al*ed out of a meeting #ith private respondents and
other employees !ccording to the 743C, during that meeting, the employees voted to maintain
the company policy of paying them according to the volume of #or* finished at the rate of
P$0&& per do(en of tailored clothing materials Only petitioners allegedly insisted that they be
paid the minimum #age and other benefits "he 743C held petitioners guilty of abandonment of
#or* and accordingly dismissed their claims e=cept that for $%th month pay
Petitioners allege that they #ere dismissed by private respondents as they #ere about to file a
petition #ith the Department of 4abor and 5mployment +DO45- for the payment of benefits such
as )ocial )ecurity )ystem +)))- coverage, sic* leave and vacation leave "hey deny that they
abandoned their #or*
'))>5C Whether or not the petitioner may validly claim payment by result
;54DC
"he petition is meritorious
'n this case, private respondents e=ercised control over the #or* of petitioners !s tailors,
petitioners #or*ed in the companyKs premises from 0C&& am to 8C&& pm daily, including
)undays and holidays "he mere fact that they #ere paid on a piece-rate basis does not negate
their status as regular employees of private respondents "he term G#ageG is broadly defined in
!rt /8 of the 4abor Code as remuneration or earnings, capable of being e=pressed in terms of
money #hether fi=ed or ascertained on a time, tas*, piece or commission basis Payment by the
piece is <ust a method of compensation and does not define the essence of the relations
7
7or
does the fact that petitioners are not covered by the ))) affect the employer-employee
relationship
227
the decision of the 7ational 4abor 3elations Commission is )5" !)'D5 and another one is
357D535D ordering private respondents to pay petitioners the total amount of One ;undred
5ighty-One "housand One ;undred "#o Pesos and ,&2$&& +P$0$,$&.,&-, as computed above
228
M(C(2+ H('&R*(SH&RA$ +NC.$ vs N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N
G.R. Nos. 8##898% Nove/ber %:$ %989
,(C2S)
'ndividual complainants have been #or*ing for petitioner Ma*ati ;aberdashery, 'nc as tailors,
seamstress, se#ers, basters +manlililip- and GplantsadorasG "hey are paid on a piece-rate basis
e=cept Maria !ngeles and 4eonila )erafina #ho are paid on a monthly basis 'n addition to their
piece-rate, they are given a daily allo#ance of three +P %&&- pesos provided they report for
#or* before /C%& am everyday Private respondents are re?uired to #or* from or before /C%&
am up to 1C&& or 8C&& pm from Monday to )aturday and during pea* periods even on
)undays and holidays
"he )andigan ng Manggaga#ang Pilipino, a labor organi(ation of the respondent #or*ers, filed
a complaint for +a- underpayment of the basic #ageD +b- underpayment of living allo#anceD +c-
non-payment of overtime #or*D +d- non-payment of holiday payD +e- non-payment of service
incentive payD +f- $%th month payD and +g- benefits provided for under Wage Orders 7os $, ., %,
, and :

4abor !rbiter rendered <udgment in favor of complainants "he 743C affirmed the arbiterKs
decision
Petitioner urged that the 743C erred in concluding that an employer-emplyee relationship
e=isted bet#een petitioner and the #or*ers
+SS5&) Whether employees paid on piece-rate basis are entitled to service incentive pay
R5L+NG)
"he facts at bar indubitably reveal that the most important re?uisite of control is present !s
gleaned from the operations of petitioner, #hen a customer enters into a contract #ith the
haberdashery or its proprietor, the latter directs an employee #ho may be a tailor, pattern
ma*er, se#er or GplantsadoraG to ta*e the customer's measurements, and to se# the pants, coat
or shirt as specified by the customer )upervision is actively manifested in all these aspects H
the manner and ?uality of cutting, se#ing and ironing
Petitioner has reserved the right to control its employees not only as to the result but also the
means and methods by #hich the same are to be accomplished "hat private respondents are
regular employees is further proven by the fact that they have to report for #or* regularly from
/C%& am to 1C&& or 8C&& pm and are paid an additional allo#ance of P %&& daily if they report
for #or* before /C%& am and #hich is forfeited #hen they arrive at or after /C%& am
229
"he #or*ers did not e=ercise independence in their o#n methods, but on the contrary #ere
sub<ect to the control of petitioners from the beginning of their tas*s to their completion >nli*e
independent contractors #ho generally rely on their o#n resources, the e?uipment, tools,
accessories, and paraphernalia used by private respondents are supplied and o#ned by
petitioners Private respondents are totally dependent on petitioners in all these aspects
"he piece-rate #or*ers in the case at bar are employees #hich fall under e=ceptions set forth in
the implementing rules and therefore not entitled to service incentive leave and holiday pay
230
L('4R C4NGR&SS 4, 2H& 8H+L+88+N&S 3 N(2+4N(L L('4R R&L(2+4NS
C4MM+SS+4N$
F!C")C
"he // persons named as petitioners in this proceeding #ere ran*-and-file employees of
respondent 5mpire Food Products, #hich hired them on various dates Petitioners filed against
private respondents a complaint for payment of money claimNsO and for violation of labor
standardNsO la#s
On 9anuary .%, $//$, petitioners filed a complaint doc*eted as 743C Case 7o 3!B-'''-&$-
$/1,-/$ against private respondents forC
!fter the submission by the parties of their respective position papers and presentation of
testimonial evidence, 4abor !rbiter !riel C )antos absolved private respondents of the charges
of unfair labor practice, union busting, violation of the memorandum of agreement,
underpayment of #ages and denied petitioners' prayer for actual, moral and e=emplary
damages 4abor !rbiter )antos, ho#ever, directed the reinstatement of the individual
complainantsC
'))>5C
Whether or not the petitioners are Lpa*yaoM or per piece #or*ers and therefore not entitled to
benefits as that of a regular employee
;54DC
!s to the other benefits, namely, holiday pay, premium pay, $%th month pay and service
incentive leave #hich the labor arbiter failed to rule on but #hich petitioners prayed for in their
complaint,
%:
#e hold that petitioners are so entitled to these benefits "hree +%- factors lead us
to conclude that petitioners, although piece-rate #or*ers, #ere regular employees of private
respondents First, as to the nature of petitioners' tas*s, their <ob of repac*ing snac* food #as
necessary or desirable in the usual business of private respondents, #ho #ere engaged in the
manufacture and selling of such food productsD second, petitioners #or*ed for private
respondents throughout the year, their employment not having been dependent on a specific
pro<ect or seasonD and third, the length of time
%>
that petitioners #or*ed for private respondents
"hus, #hile petitioners' mode of compensation #as on a Gper piece basis,G the status and nature
of their employment #as that of regular employees
"he 3ules 'mplementing the 4abor Code e=clude certain employees from receiving benefits
such as nighttime pay, holiday pay, service incentive leave
%7
and $%th month pay,
%8
inter alia,
Gfield personnel and other employees #hose time and performance is unsupervised by the
employer, including those #ho are engaged on tas* or contract basis, purely commission basis,
or those #ho are paid a fi=ed amount for performing #or* irrespective of the time consumed in
the performance thereofG Plainly, petitioners as piece-rate #or*ers do not fall #ithin this group
!s mentioned earlier, not only did petitioners labor under the control of private respondents as
their employer, li*e#ise did petitioners toil throughout the year #ith the fulfillment of their ?uota
231
as supposed basis for compensation Further, in )ection 0 +b-, 3ule 'E, Boo* ''' #hich #e ?uote
hereunder, piece #or*ers are specifically mentioned as being entitled to holiday pay
)ec 0 $oliday "ay o; certain e!"loyees H
+b- Where a covered employee is paid by
results or output, such as payment on piece
#or*, his holiday pay shall not be less than
his average daily earnings for the last seven
+8- actual #or*ing days preceding the
regular holidayC Provided, ,o?ever, that in
no case shall the holiday pay be less than
the applicable statutory minimum #age rate
"he )upreme Court in its decision heldC D5C4!3'7@ petitioners to have been illegally
dismissed by private respondents, thus entitled to full bac* #ages and other privileges, and
separation pay in lieu of reinstatement at the rate of one month's salary for every year of service
#ith a fraction of si= months of service considered as one year
232
G.R. No. %%>9> (pril 1$ %99>
'&RN(R*4 !+M&N&? and !4S& !+M&N&?$ as Operators of 99's "3>CI'7@, petitioners,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N$ 8&*R4 !5(N(2(S and ,R&*&L+24
!5(N(2(S$ respondents
R&G(L(*4$ J.$
,(C2S)
On 9une ./, $//&, private respondents Pedro and Fredelito 9uanatas, father and son, filed a
claim for unpaid #ages2commissions, separation pay and damages against 99's "ruc*ing and2or
Dr Bernardo 9imene( )aid respondents, as complainants therein, alleged that in December,
$/08, they #ere hired by herein petitioner Bernardo 9imene( as driver2mechanic and helper,
respectively, in his truc*ing firm, 99 "ruc*ing "hey #ere assigned to a ten-#heeler truc* to haul
soft drin*s of Coca-Cola Bottling Company and paid on commission basis, initially fi=ed at $8S
but later increased to .&S in $/00
Private respondents further alleged that for the years $/00 and $/0/ they received only a partial
commission of P0,,&&&&& from petitioners' total gross income of almost P$,&&&,&&&&& for the
said t#o years Conse?uently, #ith their commission for that period being computed at .&S of
said income, there #as an unpaid balance to them of P$&1,.$$01D that until March, $//& #hen
their services #ere illegally terminated, they #ere further entitled to P0,&:&&& #hich added up
to a grand total of P$$,,.1$01 due and payable to them
Disputing the complaint, petitioners contend that respondent Fredelito 9uanatas #as not an
employee of the firm but #as merely a helper of his father PedroD that all commissions for $/00
and $/0/, as #ell as those up to March, $//&, #ere duly paidD and that the truc* driven by
respondent Pedro 9uanatas #as sold to one Winston Flores in $//$ and, therefore, private
respondents #ere not illegally dismissed
.
!fter hearings duly conducted, and #ith the submission of the parties' position2supporting
papers, 4abor !rbiter 3ogue B de @u(man rendered a decision ordering respondents 99's
"ruc*ing and2or Dr Bernardo 9imene( to pay <ointly and severally complainant Pedro 9uanatas
a separation pay of P$:,&:&&&, plus attorney's fee e?uivalent to $&S of the a#ard "he
complaint of Fredelito 9uanatas is hereby dismissed for lac* of merit
On appeal filed by private respondents, the 743C modified the decision of the labor arbiter
declaring Fredelito 9uanatas as respondents' employee and shares in the commission and
separation pay a#arded to complainant Pedro 9uanatas, his father Further, respondent 99's
"ruc*ing and Dr Bernardo 9imene( are <ointly and severally liable to pay complainants their
unpaid commissions in the total amount of P0,,%08&:
;ence, this petition for certiorari, see*ing the annulment of the decision of respondent 743C
denying petitioners' motion for reconsideration

+SS5&)
233
=,et,er or not res"ondent N&RC co!!itted grave a1use o; discretion in ruling .a/ t,at "rivate
res"ondents ?ere not "aid t,eir co!!issions in ;ull, and .1/ t,at res"ondent Fredelito Juanatas
?as an e!"loyee o; JJ@s +ruc-ing.
H&L*)
On the first issue, there is no reason to disturb the findings of respondent 743C that the entire
amount of commissions #as not paid, because of the evident failure of petitioners to present
evidence that ;ull payment thereof has been made
!s a general rule, one #ho pleads payment has the burden of proving it 5ven #here the
"lainti;; .,erein "rivate res"ondent/ must allege non-payment, the burden of evidence rests on
the defendant +herein petitioners- to prove payment, rather than on the plaintiff to prove non-
payment


'n the instant case, the right of respondent Pedro 9uanatas to be paid a commission e?uivalent
to $8S, later increased to .&S, of the gross income is not disputed by petitioners !lthough
private respondents admit receipt of partial payment, petitioners still have to present proof of full
payment
"he testimony of petitioners #hich merely denied the claim of private respondents, unsupported
by documentary evidence, is not sufficient to establish payment !lthough petitioners submitted
a noteboo* sho#ing the alleged vales of private respondents for the year $//&,
$:
the same is
inadmissible and cannot be given probative value considering that it is not properly
accomplished, is undated and unsigned, and is thus uncertain as to its origin and authenticity
$1
;ence, for failure to present evidence to prove payment, petitioners defaulted in their defense
and in effect admitted the allegations of private respondents
With respect to the second issue, 743C erred in holding that the son, Fredelito, #as an
employee of petitioners 'n the case at bar, the elements of an employer-employee relationship,
are not present "he agreement #as bet#een petitioner 99's "ruc*ing and respondent Pedro
9uanatas "he hiring of a helper #as discretionary on the part of Pedro $ence, Fredelito #as
not an employee of petitioners
W;535FO35, the <udgment of respondent 7ational 4abor 3elations Commission is
(,,+RM&*$ #ith the M4*+,+C(2+4N that declaring Fredelito 9uanatas is not an employee of
petitioners and not entitled to share in the a#ard for commission and separation pay
234
3+RG+N+( G. N&R+ and !4S& C('&L+N$ petitioners,
vs
N(2+4N(L L('4R R&L(2+4NS C4MM+SS+4N ,(R &(S2 '(NC = 2R5S2 C4M8(NA
6,&'2C7 and '5+L*+NG C(R& C4R84R(2+4N$ respondents
F!C")C
Building Care Corporation +BCC, for brevity-, in the proceedings belo#, established that it had
substantial capitali(ation of P$ Million or a stoc*holders e?uity of P$: Million "hus the 4abor
!rbiter ruled that BCC #as only <ob contracting and that conse?uently its employees #ere not
employees of Far 5ast Ban* and "rust Company +F5B"C, for brevity- on appeal, this factual
finding #as affirmed by respondent 7ational 4abor 3elations Commission +743C, for brevity-
7evertheless, petitioners insist before us that BCC is engaged in Glabor-onlyG contracting hence,
they conclude, they are employees of respondent F5B"C
Petitioners Eirginia @ 7eri and 9ose Cabelin applied for positions #ith, and #ere hired by,
respondent BCC, a corporation engaged in providing technical, maintenance, engineering,
house*eeping, security and other specific services to its clientele "hey #ere assigned to #or*
in the Cagayan de Oro City Branch of respondent F5B"C on $ May $/8/ and $ !ugust $/0&,
respectively, 7eri an radio2tele= operator and Cabelin as <anitor, before being promoted to
messenger on $ !pril $/0/
On .0 9une $/0/, petitioners instituted complaints against F5B"C and BCC before 3egional
!rbitration Branch 7o $& of the Department of 4abor and 5mployment to compel the ban* to
accept them as regular employees and for it to pay the differential bet#een the #ages being
paid them by BCC and those received by F5B"C employees #ith similar length of service
On $1 7ovember $/0/, the 4abor !rbiter dismissed the complaint for lac* of merit

3espondent
BCC #as considered an independent contractor because it proved it had substantial capital
"hus, petitioners #ere held to be regular employees of BCC, not F5B"C "he dismissal #as
appealed to 743C #hich on .0 )eptember $//& affirmed the decision on appeal

On ..
October $//&, 743C denied reconsideration of its affirmance,

prompting petitioners to see*
redress from this Court
Petitioners vehemently contend that BCC in engaged in Glabor-onlyG contracting because it
failed to adduce evidence purporting to sho# that it invested in the form of tools, e?uipment,
machineries, #or* premises and other materials #hich are necessary in the conduct of its
business Moreover, petitioners argue that they perform duties #hich are directly related to the
principal business or operation of F5B"C 'f the definition of Glabor-onlyG contracting

is to be
read in con<unction #ith <ob contracting,

then the only logical conclusion is that BCC is a Glabor
onlyG contractor Conse?uently, they must be deemed employees of respondent ban* by
operation of la# since BCC is merely an agent of F5B"C follo#ing the doctrine laid do#n in
P,ili""ine Ban- o; Co!!unications v. National &a1or Relations Co!!ission

#here #e ruled
that #here Glabor-onlyG contracting e=ists, the 4abor Code itself establishes an employer-
employee relationship bet#een the employer and the employees of the Glabor-onlyG contractorD
hence, F5B"C should be considered the employer of petitioners #ho are deemed its employees
through its agent, Glabor-onlyG contractor BCC
'))>5C
235
Whether or not F5B"C should be considered the employer of petitioners #ho are deemed its
employees through its agent, Llabor-onlyM BCC
;54DC
!rticle $&1 of the 4abor Code defines Glabor-onlyG contracting thus H
!rt $&1 Contractor or su1contractor H "here is Glabor-onlyG contracting
#here the person supplying #or*ers to an employer does not have substantial
capital or investment in the form of tools, e?uipment, machineries, #or*
premises, among others, and the #or*ers recruited by such persons are
performing activities #hich are directly related to the principal business of such
employer +emphasis supplied-
Based on the foregoing, BCC cannot be considered a Glabor-onlyG contractor because it has
substantial capital While there may be no evidence that it has investment in the form of tools,
e?uipment, machineries, #or* premises, among others, it is enough that it has substantial
capital, as #as established before the 4abor !rbiter as #ell as the 743C
5ven assuming e> argu!enti that petitioners #ere performing activities directly related to the
principal business of the ban*, under the Gright of controlG test they must still be considered
employees of BCC 'n the case of petitioner 7eri, it is admitted that F5B"C issued a <ob
description #hich detailed her functions as a radio2tele= operator ;o#ever, a cursory reading of
the <ob description sho#s that #hat #as sought to be controlled by F5B"C #as actually the
end-result of the tas*, eg, that the daily incoming and outgoing telegraphic transfer of funds
received and relayed by her, respectively, tallies #ith that of the register "he guidelines #ere
laid do#n merely to ensure that the desired end-result #as achieved 't did not, ho#ever, tell
7eri ho# the radio2tele= machine should be operated
Besides, petitioners do not deny that they #ere selected and hired by BCC before being
assigned to #or* in the Cagayan de Oro Branch of FFB"C BCC li*e#ise ac*no#ledges that
petitioners are its employees "he record is replete #ith evidence disclosing that BCC
maintained supervision and control over petitioners through its ;ouse*eeping and )pecial
)ervices DivisionC petitioners reported for #or* #earing the prescribed uniform of BCCD leaves
of absence #ere filed directly #ith BCCD and, salaries #ere dra#n only from BCC
"he determination of employer-employee relationship involves factual findings !bsent any
grave abuse of discretion, and #e find none in the case before us, #e are bound by the findings
of the 4abor !rbiter as affirmed by respondent 743C
236
Manila .ater Co/pany vs Her/inio *. 8ena$ et al.
9uly 0, .&&, @3 7o $:0.::
Anares-)antiago, J,C
Facts
On !ugust $, $//8, under the concession agreement, petitioner, Manila Water Company,
undertoo* to absorb former employees of the Metropolitan Water#or*s and )e#erage )ystem
+MW))- and positions #ere in the list furnished by the latter, #hile the employment of those not
in the list #as terminated on that day
Private respondents #ho #ere contractual collectors of the MW)), #ere among the $.$
employees not included in the list, but still the petitioner engaged their services #ithout #ritten
contract On )eptember $, $//8, they signed a three-month contract to perform collection
services for eight branches of petitioner in the 5ast Tone Before the end of the three month
contract, the $.$ collectors incorporated the !ssociation Collectors @roup, 'nc +!C@'- #hich
#as contracted by the Petitioner to collect charges for the Balara Branch Most of the $.$
collectors #ere as*ed by the petitioner to transfer to the First Class Courier )ervices, a ne#ly
registered corporation Only private respondents herein remained #ith !C@' Petitioner
continued to transact #ith !C@' to do its collection needs until February 0, $///, #hen
petitioner terminated its contract #ith !C@'
Private respondents filed a complaint for illegal dismissal and money claims against the
petitioner
'ssue
Whether or not the employment of the respondents #as labor-only contracting
;eld
L4abor-Only ContractingM refers to an arrangement #here the contractor or subcontractor
merely recruits, supplies or places #or*ers to perform <ob, #or* or service for a principal, and
any of the follo#ing elements are presentC +$- "he contractor or the subcontractor does not have
substantial capital or investments #hich relates to the <ob, #or* or service to be performed and
the employees recruited, supplied or placed by such contractor or subcontractor are performing
activities #hich are directly related to the main business of the principalD or +.- the contractor
does not e=ercise the right to control over the performance of the #or* of the contractual
employee "here is no doubt that !C@' #as engaged in labor-only contracting, and as such, is
considered merely an agent of the petitioner 'n labor-only contracting, the statute creates an
employer-employee relationship for a comprehensive purposeC to prevent a circumvention of
labor la#s "he contractor is considered merely an agent of the principal employer and the latter
is responsible to the employees of the labor-only contractor as if such employees had been
directly employed by the principal employer )ince !C@' is only a labor-only contractor, the
#or*ers it supplied should be considered as employees of the petitioner !s private
respondentsK employer, petitioner has the burden of proving that the dismissal #as for a cause
allo#ed under the la# and that they #ere afforded procedural due process Petitioner failed to
discharge this burden by substantial evidence as it maintained the defense that it #as not the
employer of private respondents ;aving established that the schemes employed by petitioner
#ere devious attempts to defeat the tenurial rights of private respondents and that it failed to
comply #ith the re?uirements of termination under the 4abor Code, the dismissal of the private
respondent is tainted #ith illegality
237
i