SAN MIGUEL CORPORATION v. PROSPERO ABALLA G.R. No.
149011 machineries, work premises and other materials to qualify it as an
June 28, 2005
FACTS: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose
Cooperative (Sunflower) entered into a one-year Contract of Service and such
contract is renewed on a monthly basis until terminated. Pursuant to this,
respondent Prospero Aballa rendered services to SMC.
After one year of service, Aballa filed a complaint before NLRC praying that
they be declared as regular employees of SMC. On the other hand, SMC filed
before the DOLE a Notice of Closure due to serious business losses. Hence,
the labor arbiter dismissed the complaint and ruled in favor of SMC. Aballa
then appealed before the NLRC. The NLRC dismissed the appeal finding that
Sunflower is an independent contractor.
On appeal, the Court of Appeals reversed NLRCs decision on the ground that
the agreement between SMC and Sunflower showed a clear intent to abstain
from establishing an employer-employee relationship.
ISSUE: Whether or not Aballa and other employees of Sunflower are
employees of SMC?
HELD: The test to determine the existence of independent contractorship is
whether one claiming to be an independent contractor has contracted to do
the work according to his own methods and without being subject to the
control of the employer, except only as to the results of the work. In
legitimate labor contracting, the law creates an employer-employee
relationship for a limited purpose, to ensure that the employees are paid their
wages. The principal employer becomes jointly and severally liable with the
job contractor, only for the payment of the employees wages whenever the
contractor fails to pay the same. Other than that, the principal employer is
not responsible for any claim made by the employees. In labor-only
contracting, the statute creates an employer-employee relationship for a
comprehensive purpose: to prevent a circumvention of labor laws. The
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. The
Contract of Services between SMC and Sunflower shows that the parties
clearly disavowed the existence of an employer-employee relationship
between SMC and private respondents. The language of a contract is not,
however, determinative of the parties relationship; rather it is the totality of
the facts and surrounding circumstances of the case. A party cannot dictate,
by the mere expedient of a unilateral declaration in a contract, the character
of its business, whether as labor-only contractor or job contractor, it being
crucial that its character be measured in terms of and determined by the
criteria set by statute. What appears is that Sunflower does not have
substantial capitalization or investment in the form of tools, equipment,
independent contractor. On the other hand, it is gathered that the lot,
building, machineries and all other working tools utilized by Aballa et al. in
carrying out their tasks were owned and provided by SMC.
And from the job description provided by SMC itself, the work assigned to
Aballa et al. was directly related to the aquaculture operations of SMC. As for
janitorial and messengerial services, that they are considered directly related
to the principal business of the employer has been jurisprudentially
recognized. Furthermore, Sunflower did not carry on an independent business
or undertake the performance of its service contract according to its own
manner and method, free from the control and supervision of its principal,
SMC, its apparent role having been merely to recruit persons to work for SMC.
All the foregoing considerations affirm by more than substantial evidence the
existence of an employer- employee relationship between SMC and Aballa.
Since Aballa who were engaged in shrimp processing performed tasks usually
necessary or desirable in the aquaculture business of SMC, they should be
deemed regular employees of the latter and as such are entitled to all the
benefits and rights appurtenant to regular employment. They should thus be
awarded differential pay corresponding to the difference between the wages
and benefits given them and those accorded SMCs other regular employees.
INSULAR LIFE ASSURANCE CO., LTD. vs. NATIONAL LABOR RELATIONS
COMMISSION and MELECIO BASIAO, G.R. No. 84484 November
15, 1989
FACTS : Petitioner entered contract with Basiao for insurance policies and
annuities in accordance with the existing rules and regulations" of the
Company; he would receive "compensation, in the form of commissions ... as
provided in the Schedule of Commissions" of the contract to "constitute a
part of the consideration of ... (said) agreement;" and the "rules in ... (the
Company's) Rate Book and its Agent's Manual, as well as all its circulars ...
and those which may from time to time be promulgated by it.
Some four years later, in April 1972, the parties entered into another contract
an Agency Manager's Contract and to implement his end of it Basiao
organized an agency or office to which he gave the name M. Basiao and
Associates, while concurrently fulfilling his commitments under the first
contract with the Company. In May, 1979, the Company terminated the
Agency Manager's Contract. After vainly seeking a reconsideration, Basiao
sued the Company in a civil action and this, he was later to claim, prompted
the latter to terminate also his engagement under the first contract and to
stop payment of his commissions starting April 1, 1980. Basiao thereafter
filed with the then Ministry of Labor a complaint against the Company and its
president. Without contesting the termination of the first contract, the
complaint sought to recover commissions allegedly unpaid there under, plus
attorney's fees. The respondents disputed the Ministry's jurisdiction over
Basiao's claim, asserting that he was not the Company's employee, but an
independent contractor and that the Company had no obligation to him for
unpaid commissions under the terms and conditions of his contract.
The Labor Arbiter to whom the case was assigned found for Basiao. He ruled
that the underwriting agreement had established an employer-employee
relationship between him and the Company, and this conferred jurisdiction on
the Ministry of Labor to adjudicate his claim. Said official's decision directed
payment of his unpaid commissions "... equivalent to the balance of the first
year's premium remaining unpaid, at the time of his termination, of all the
insurance policies solicited by ... (him) in favor of the respondent
company ..." plus 10% attorney's fees. This decision was, on appeal by the
Company, affirmed by the National Labor Relations Commission. Hence, the
present petition for certiorari and prohibition
ISSUE:
Whether, as Basiao asserts, he had become the Company's employee
by virtue of the contract invoked by him, thereby placing his claim
for unpaid commissions within the original and exclusive jurisdiction
of the Labor Arbiter under the provisions of Section 217 of the Labor
Code, or, contrarily, as the Company would have it, that under said
contract Basiao's status was that of an independent contractor
whose claim was thus cognizable, not by the Labor Arbiter in a labor
case, but by the regular courts in an ordinary civil action.
HELD:
The Court, therefore, rules that under the contract invoked by him, Basiao
was not an employee of the petitioner, but a commission agent, an
independent contractor whose claim for unpaid commissions should have
been litigated in an ordinary civil action. The Labor Arbiter erred in taking
cognizance of, and adjudicating, said claim, being without jurisdiction to do
so, as did the respondent NLRC in affirming the Arbiter's decision. This
conclusion renders it unnecessary and premature to consider Basiao's claim
for commissions on its merits.
ST. MARTIN FUNERAL HOME vs. NATIONAL LABOR RELATIONS
COMMISSION and BIENVENIDO ARICAYOS, G.R. No. 130866
September 16, 1998
FACTS: Private respondent alleges that he started working as Operations
Manager of petitioner St. Martin Funeral Home on February 6, 1995. However,
there was no contract of employment executed between him and petitioner
nor was his name included in the semi-monthly payroll. On January 22, 1996,
he was dismissed from his employment for allegedly misappropriating
P38,000.00 which was intended for payment by petitioner of its value added
tax (VAT) to the Bureau of Internal Revenue (BIR).
Petitioner on the other hand claims that private respondent was not its
employee but only the uncle of Amelita Malabed, the owner of petitioner St.
Martins Funeral Home. Sometime in 1995, private respondent, who was
formerly working as an overseas contract worker, asked for financial
assistance from the mother of Amelita. Since then, as an indication of
gratitude, private respondent voluntarily helped the mother of Amelita in
overseeing the business.
January 1996, the mother of Amelita passed away, so the latter then took
over the management of the business. She then discovered that there were
arrears in the payment of taxes and other government fees, although the
records purported to show that the same were already paid. Amelita then
made some changes in the business operation and private respondent and
his wife were no longer allowed to participate in the management thereof. As
a consequence, the latter filed a complaint charging that petitioner had
illegally terminated his employment. the labor arbiter rendered a decision in
favor of petitioner on October 25, 1996 declaring that no employer-employee
relationship existed between the parties and, therefore, his office had no
jurisdiction over the case.
private respondent appealed to the NLRC. NLRC remanded the case to LA. MR
was filed by the petitioner which was denied.
RULING:
1) HISTORY: the legal history of the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions
were expressly declared to be appealable to the Secretary of Labor and,
ultimately, to the President of the Philippines.
May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the
same to take effect six months after its promulgation. 8 Created and
regulated therein is the present NLRC which was attached to the Department
of Labor and Employment for program and policy coordination only. 9 Initially,
Article 302 (now, Article 223) thereof also granted an aggrieved party the
remedy of appeal from the decision of the NLRC to the Secretary of Labor, but
P.D. No. 1391 subsequently amended said provision and abolished such
appeals. No appellate review has since then been provided for.
the argument that this Court has no jurisdiction to review the decisions of the
NLRC, and formerly of the Secretary of Labor, since there is no legal provision
for appellate review thereof, the Court nevertheless rejected that thesis. It
held that there is an underlying power of the courts to scrutinize the acts of
such agencies on questions of law and jurisdiction even though no right of
review is given by statute; that the purpose of judicial review is to keep the
administrative agency within its jurisdiction and protect the substantial rights
of the parties; and that it is that part of the checks and balances which
restricts the separation of powers and forestalls arbitrary and unjust
adjudications.
the remedy of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or subsequent remedy, 12
and then seasonably avail of the special civil action of certiorari under Rule
65, 13 for which said Rule has now fixed the reglementary period of sixty
days from notice of the decision. Curiously, although the 10-day period for
finality of the decision of the NLRC may already have lapsed as contemplated
in Section 223 of the Labor Code, it has been held that this Court may still
take cognizance of the petition for certiorari on jurisdictional and due process
considerations if filed within the reglementary period under Rule 65. The
Court is, therefore, of the considered opinion that ever since appeals from the
NLRC to the Supreme Court were eliminated, the legislative intendment was
that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of the word appeal in
relation thereto and in the instances we have noted could have been a lapsus
plumae because appeals by certiorari and the original action for certiorari are
both modes of judicial review addressed to the appellate courts. The
important distinction between them, however, and with which the Court is
particularly concerned here is that the special civil action of certiorari is
within the concurrent original jurisdiction of this Court and the Court of
Appeals; 23 whereas to indulge in the assumption that appeals by certiorari
to the Supreme Court are allowed would not subserve, but would subvert, the
intention of Congress as expressed in the sponsorship speech on Senate Bill
No. 1495.
2) Appeal.
-review of NLRC Decision is through Rule 65.
-jurisdiction: SC AND CA
-by way of hierarchy: the review shall be initially filed before CA.
JOSEFINA BENARES vs. JAIME PACHO, RODOLFO PANCHO JR,
JOSELITO MEDALLA, ET. AL April 29, 2005
FACTS:
On July 24, 1991, complainants thru counsel wrote the Regional Director of
the Department of Labor and Employment, Bacolod City for intercession
particularly in the matter of wages and other benefits mandated by law.
On September 24, 1991, a routine inspection was conducted by personnel of
the Bacolod District Office of the Department of Labor and Employment.
Accordingly, a report and recommendation was made, hence, the
endorsement by the Regional Director of the instant case to the Regional
Arbitration Branch, NLRC, Bacolod City for proper hearing and disposition.
On October 15, 1991, complainants alleged to have been terminated without
being paid termination benefits by respondent in retaliation to what they
have done in reporting to the Department of Labor and Employment their
working conditions viz-a-viz (sic) wages and other mandatory benefits.
On July 14, 1992, notification and summons were served to the parties
wherein complainants were directed to file a formal complaint.
On July 28, 1992, a formal complaint was filed for illegal dismissal with money
claims. From the records, summons and notices of hearing were served to the
parties and apparently no amicable settlement was arrived, hence, the
parties were directed to file their respective position papers.
On January 22, 1993, complainant submitted their position paper, while
respondent filed its position paper on June 21, 1993.
On March 17, 1994, complainants filed their reply position paper and
affidavit. Correspondingly, a rejoinder was filed by respondent on May 16,
1994.
On August 17, 1994, from the Minutes of the scheduled hearing, respondent
failed to appear, and that the Office will evaluate the records of the case
whether to conduct a formal trial on the merits or not, and that the
corresponding order will be issued. On January 16, 1996, the Labor Arbiter
issued an order to the effect that the case is now deemed submitted for
resolution.
On April 30, 1998, the Labor Arbiter a quo issued the assailed decision
dismissing the complaint for lack of merit. On June 26, 1998, complainants
not satisfied with the aforecited ruling interposed the instant appeal before
the NLRC. The NLRC held that respondents attained the status of regular
seasonal workers of Hda. Maasin II having worked therein from 1964-1985. It
found that petitioner failed to discharge the burden of proving that the
termination of respondents was for a just or authorized cause. Hence,
respondents were illegally dismissed and should be awarded their money
claims. The Court of Appeals affirmed the NLRCs ruling, with the modification
that the backwages and other monetary benefits shall be computed from the
time compensation was withheld in accordance with Article 279 of the Labor
Code, as amended by Republic Act No. 6715.
ISSUE: W/N the petitioner is guilty of illegal dismissal with money claims.
HELD: YES, the Supreme Court dismissed the instant petition and affirmed
the Decision of the Court of Appeals base on the following premise:
Petitioner underscores the NLRC decisions mention of the payroll she
presented despite the fact that she allegedly presented 235 sets of payroll,
not just one payroll. This circumstance does not in itself evince any grave
abuse of discretion on the part of the NLRC as it could well have been just an
innocuous typographical error. Verily, the NLRCs decision, affirmed as it was
by the Court of Appeals, appears to have been arrived at after due
consideration of the evidence presented by both parties. The SC finds no
reason to disturb the finding that respondents were illegally terminated.
When there is no showing of clear, valid and legal cause for the termination
of employment, the law considers the matter a case of illegal dismissal and
the burden is on the employer to prove that the termination was for a just or
authorized cause.25 In this case, as found both by the NLRC and the Court of
Appeals, petitioner failed to prove any such cause for the dismissal of
respondents.
RAUL G. LOCSIN and EDDIE B. TOMAQUIN Vs. PHILIPPINE LONG
DISTANCE TELEPHONE COMPANY, G.R. No. 185251, October 2,
2009
Facts: On November 1, 1990, respondent Philippine Long Distance Telephone
Company (PLDT) and the Security and Safety Corporation of the
Philippines (SSCP) entered into a Security Services Agreement (Agreement)
whereby SSCP would provide armed security guards to PLDT to be
assigned to its various offices. Pursuant to such agreement,
petitioners Raul Locsin and Eddie Tomaquin, among other security
guards, were posted at a PLDT office. On August 30, 2001, respondent
issued a Letter dated August 30, 2001 terminating the Agreement
effective October 1, 2001. Despite the termination of the Agreement,
however, petitioners continued to secure the premises of their assigned
office. They were allegedly directed to remain at their post by
representatives of respondent. In support of their contention,
petitioners provided the Labor Arbiter with copies of petitioner
Locsins pay slips for the period of January to September 2002
Then, on September 30, 2002, petitioners services were terminated. Thus,
petitioners filed a complaint before the Labor Arbiter for illegal
dismissal and recovery of money claims such as overtime pay,
holiday pay, premium pay for holiday and rest day, service incentive leave
pay, Emergency Cost of Living Allowance, and moral and exemplary
damages against PLDT.
The Labor Arbiter rendered a Decision finding PLDT liable for illegal
dismissal. It was explained in the Decision that petitioners were found to
be employees of PLDT and not of SSCP. Such conclusion was
arrived at with the factual finding that petitioners continued to serve
as guards of PLDTs offices. As such employees, petitioners were entitled
to substantive and procedural due process before termination of
employment.
Issue: Is there employer-employee relationship?
Ruling: Yes. From the foregoing circumstances, reason dictates that
we conclude that petitioners remained at their post under the
instructions of respondent. We can further conclude that respondent
dictated upon petitioners that the latter perform their regular duties to
secure the premises during operating hours. This, to our mind and
under the circumstances, is sufficient to establish the existence of an
employer-employee relationship. To reiterate, while respondent and SSCP no
longer had any legal relationship with the termination of the Agreement,
petitioners remained at their post securing the premises of respondent
while receiving their salaries, allegedly from SSCP. Clearly, such a situation
makes no sense, and the denials proffered by respondent do not shed any
light to the situation. It is but reasonable to conclude that, with the behest
and, presumably, directive of respondent, petitioners continued with their
services. Evidently, such are indicia of control that respondent
exercised over petitioners.
Evidently, respondent having the power of control over petitioners
must be considered as petitioners employerfrom the termination of which are directly related to the principal business of the employer.Article
the Agreement onwardsas this was the only time that any
evidence of control was exhibited by respondent over petitioners and in light
of our ruling in Abella. Thus, as aptly declared by the NLRC,
petitioners were entitled to the rights and benefits of employees of
respondent, including due process requirements in the termination of their
services.
Both the Labor Arbiter and NLRC found that respondent did not
observe such due process requirements. Having failed to do so,
respondent is guilty of illegal dismissal.
Virginia G. Neri vs. National Labor Relations Commission, et al. [224
SCRA 717 July 23, 1993]
Facts:
Respondents are sued by two employees of Building Care Corporation, which
provides janitorial and other specific services to variousfirms, to compel Far
Bast Bank and Trust Company to recognize them as its regular employees
and be paid the same wages which its employeesreceive.Building Care
Corporation (BCC, for brevity), in the proceedings below, established that it
had substantial capitalization of P1 Millionor a stockholders equity of P1.5
Million. Thus the Labor Arbiter ruled that BCC was only job contracting and
that consequently its employeeswere not employees of Far East Bank and
Trust Company (FEBTC, for brevity). on appeal, this factual finding was
affirmed by respondentNational Labor Relations Commission (NLRC, for
brevity). Nevertheless, petitioners insist before us that BCC is engaged in
"labor-only"contracting hence, they conclude, they are employees
of respondent FEBTC.On 28 June 1989, petitioners instituted complaints
against FEBTC and BCC before Regional Arbitration Branch No. 10 of
theDepartment of Labor and Employment to compel the bank to accept them
as regular employees and for it to pay the differential between thewages
being paid them by BCC and those received by FEBTC employees with similar
length of service.
Issue:
Whether or not BCC is only a job contracting company, hence petitioners are
not regular employees of FEBTC.
SC Ruling:
We cannot sustain the petition.Respondent BCC need not prove that it made
investments in the form of tools, equipment, machineries, work premises,
among others,because it has established that it has sufficient capitalization.
The Labor Arbiter and the NLRC both determined that BCC had a capital stock
of P1 million fully subscribed and paid for. BCC is therefore a highly
capitalized venture and cannot be deemed engaged in "labor-
only"contracting.It is well-settled that there is "labor-only" contracting where:
(a) the person supplying workers to an employer does not have substantial
capital orinvestment in the form of tools, equipment, machineries, work
premises, among others;
and
, (b) the workers recruited and placed by such personare performing activities
106 of the Labor Code defines "labor-only" contracting thusArt. 106.
Contractor or subcontractor
. . . . There is "labor-only" contracting where the person supplying workers to
anemployer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises,among others, and the workers
recruited by such persons are performing activities which are directly related
to the principalbusiness of such employer . . . . (emphasis supplied).Based on
the foregoing, BCC cannot be considered a "labor-only" contractor because it
has substantial capital. While there may be noevidence that it has investment
in the form of tools, equipment, machineries, work premises, among others, it
is enough that it has substantialcapital, as was established before the Labor
Arbiter as well as the NLRC. In other words, the law does not require both
substantial capital andinvestment in the form of tools, equipment,
machineries, etc. This is clear from the use of the conjunction "or". If the
intention was to require thecontractor to prove that he has both capital and
the requisite investment, then the conjunction "and" should have been used.
But, havingestablished that it has substantial capital, it was no longer
necessary for BCC to further adduce evidence to prove that it does not fall
within thepurview of "labor-only" contracting. There is even no need for it to
refute petitioners' contention that the activities they perform are
directlyrelated to the principal business of respondent bank.Even assuming
ex argumenti that petitioners were performing activities directly related to
the principal business of the bank, under the"right of control" test they must
still be considered employees of BCC. In the case of petitioner Neri, it is
admitted that FEBTC issued a jobdescription which detailed her functions as a
radio/telex operator. However, a cursory reading of the job description shows
that what was soughtto be controlled by FEBTC was actually the end-result of
the task, eg., that the daily incoming and outgoing telegraphic transfer of
fundsreceived and relayed by her, respectively, tallies with that of the
register. The guidelines were laid down merely to ensure that the desired
end-result was achieved. It did not, however, tell Neri how the radio/telex
machine should be operated.More importantly, under the terms and
conditions of the contract, it was BCC alone which had the power to reassign
petitioners. Theirdeployment to FEBTC was not subject to the bank's
acceptance. Cabelin was promoted to messenger because the FEBTC branch
managerpromised BCC that two (2) additional janitors would be hired from
the company if the promotion was to be effected. Furthermore, BCC was to
bepaid in lump sum unlike in the situation in Philippine Bank of
Communications where the contractor, CESI, was to be paid at a daily rate on
a perperson basis. And, the contract therein stipulated that the CESI was
merely to provide manpower that would render temporary services. In
thecase at bar, Neri and Cabelin were to perform specific special services.
Consequently, petitioners cannot be held to be employees of FEBTC asBCC
"carries an independent business" and undertaken the performance of its
contract with various clients according to its "own manner andmethod, free
from the control and supervision" of its principals in all matters "except as to
the results thereof."The Petition for Certiorari is dismissed.
LEGEND HOTEL (MANILA), OLWNED BY TITANIUM CORPORATION
AND/OR, NELSON NAPUD, IN HIS CAPACITY AS THE PRESIDENT OF
PETITIONER CORPORATION, VS.
HERNANI S. REALUYO, ALSO KNOWN AS JOEY ROA, RESPONDENT.
G.R. No. 153511, July 18, 2012
FACTS:
- This labor case for illegal dismissal involves a pianist employed to
perform in the restaurant of a hotel.
- August 9, 1999: Realuyo, whose stage name was Joey R. Roa, filed a
complaint for alleged unfair labor practice, constructive illegal
dismissal, and the underpayment/nonpayment of his premium pay for
holidays, separation pay, service incentive leave pay, and 13 th month
pay. He prayed for attorneys fees, moral damages of P100,000.00
and exemplary damages for P100,000.00
- Roa averred that he had worked as a pianist at the Legend Hotels
Tanglaw Restaurant from September 1992 with an initial rate of
P400.00/night; and that it had increased to P750.00/night. During his
employment, he could not choose the time of performance, which
had been fixed from 7:00PM to 10:00pm for three to six times a week.
- July 9, 1999: the management had notified him that as a cost-cutting
measure, his services as a pianist would no longer be required
effective July 30, 1999.
- In its defense, petitioner denied the existence of an employer-
employee relationship with Roa, insisting that he had been only a
talent engaged to provide live music at Legend Hotels Madison
Coffee Shop for three hours/day on two days each week; and stated
that the economic crisis that had hit the country constrained
management to dispense with his services.
- December 29,1999: the Labor Arbiter (LA) dismissed the complaint
for lack of merit upon finding that the parties had no employer-
employee relationship, because Roa was receiving talent fee and
not salary, which was reinforced by the fact that Roa received his
talent fee nightly, unlike the regular employees of the hotel who are
paid monthly.
- NLRC affirmed the LAs decision on May 31, 2001.
- CA set aside the decision of the NLRC, saying CA failed to take into
consideration that in Roas line of work, he was supervised and
controlled by the hotels restaurant manager who at certain times
would require him to perform only tagalong songs or music, or wear
barong tagalong to conform with the Filipinana motif of the place and
the time of his performance is fixed. As to the status of Roa, he is
considered a regular employee of the hotel since his job was in
furtherance of the restaurant business of the hotel. Granting
that Roa was initially a contractual employee, by the sheer length of
service he had rendered for the company, he had been converted
into a regular employee.
- CA held that the dismissal was due to retrenchment in order to avoid
or minimize business losses, which is recognized by law under Art.
283 of the Labor Code.

ISSUES:
- WON there was employer-employee relationship between the two,
and if so,
- WON Roa was validly terminated
RULING:
- YES. Employer-employee relationship existed between the
parties.
o Roa was undeniably employed as a pianist of the restaurant.
The hotel wielded the power of selection at the time it
entered into the service contract dated Sept. 1, 1992 with
Roa. The hotel could not seek refuge behind the service
contract entered into with Roa. It is the law that defines and
governs an employment relationship, whose terms are not
restricted to those fixed in the written contract, for other
factors, like the nature of the work the employee has been
called upon to perform, are also considered.
o The law affords protection to an employee, and does not
countenance any attempt to subvert its spirit and intent. Any
stipulation in writing can be ignored when the employer
utilizes the stipulation to deprive the employee of his security
of tenure. The inequality that characterizes employer-
employee relationship generally tips the scales in
favor of the employer, such that the employee is often
scarcely provided real and better options.
o The argument that Roa was receiving talent fee and not
salary is baseless. There is no denying that the remuneration
denominated as talent fees was fixed on the basis of his
talent, skill, and the quality of music he played during the
hours of his performance. Roas remuneration, albeit
denominated as talent fees, was still considered as included
in the term wage in the sense and context of the Labor Code,
regardless of how petitioner chose to designate the
remuneration, as per Article 97(f) of the Labor Code.
o The power of the employer to control the work of the
employee is considered the most significant determinant of
the existence of an employer-employee relationship. This is
the so-called control test, and is premised on whether the
person for whom the services are performed reserves the
right to control both the end achieved and the manner and
means used to achieve that end.
o Lastly, petitioner claims that it had no power to dismiss
respondent due to his not being even subject to its Code of
Discipline, and that the power to terminate the working
relationship was mutually vested in the parties, in that either
party might terminate at will, with or without cause. This
claim is contrary to the records. Indeed, the memorandum
informing respondent of the discountinuance of his service
because of the financial condition of petitioner showed the
latter had the power to dismiss him from employment.
Investment Planning v. SSS
FACTS:
Petitioner is a domestic corporation engaged in business
management and sale of securities. It has 2 classes of agents selling
investment plans: 1) salaried employees who have fixed hours of work under
the control of the company; 2) registered representatives are on commission
basis.
Petitioner applied to SSS for exemption of coverage of these
registered representatives. However, it was denied on the ground that these
registered employees are employees of the petitioner.
ISSUE: W/N petitioners registered representatives are employees
HELD:
No. These representatives are in reality commission agents. They are
not required to report for work anytime. They shoulder their own selling
expenses as well as transportation and they are paid with commission based
on a certain percentage of their sales.
Where there is no element of control and where a person who works
for another is not subject to definite hours of work and in turn compensated
according to the result of his efforts and not the amount thereof, there is no
employer-employee relationship.
BERNARD TENAZAS v. R. VILLEGAS TAXI TRANSPORT G.R. No. 192998
02 APRIL 2014
FACTS:
Bernard Tenazas, Jaime Francisco, and Isidro Endraca filed a complaint for
illegal dismissal against R. Villegas Taxi Transport, and/or Romualdo Villegas
and Andy Villegas. PETITIONERS CLAIM
TENAZAS - Taxi unit was sideswiped by another vehicle (damage = P500);
fired after reporting the incident, even threatened w/ physical harm if he was
seen on company premises. FRANCISCO - Dismissed because of the
unfounded suspicion that he was organizing a labor union EDRACA
Dismissed after falling short of the required boundary for his taxi unit; fell
short because of P700 spent on an urgent repair R. VILLEGAS TAXIS CLAIM
TENAZAS - Company admits that Tenazas is an employee regular driver.
Tenazas was never terminated; he failed to report back to work after being
told to wait for the release of his taxi (overhauled due to mechanical defects)
FRANCISCO - Company denies that Francisco is an employee ENDRACA -
Company admits that Endraca is an employee spare driver . Endraca could
not have been terminated in March 2006 because he stopped reporting for
work in July 2003 (but willing to accommodate him again as he was never
really dismissed) Tenazas, Francisco, and Endraca also filed a Motion to Admit
Additional Evidence: (a) Joint Affidavit of the petitioners; (b) Affidavit of Good
Faith of Aloney Rivera (co-driver); (c) pictures of the petitioners wearing
company shirts;
(d) Tenazas Certification/Record of Social Security System (SSS)
contributions.
LA: No illegal dismissal because no proof of an overt act of dismissal
committed by R. Villegas Taxi; Francisco failed to prove he was an employee
NLRC: Reversed LA; the additional evidence sufficiently established the
existence of employer-employee relationship and illegal dismissal (for all
three)
Issue: WON there was an Employer-employee relationship
Held: The burden of proof rests upon the party who asserts the affirmative of
an issue. As Francisco was claiming to be an employee of R. Villegas Taxi, it is
incumbent upon him to proffer evidence to prove the existence of the
relationship. There is no hard and fast rule to establish the elements of
employer-employee relationship. Any competent and relevant evidence may
be admitted, e.g., identification cards, cash vouchers, social security
registration, appointment letters or employment contracts, payrolls,
organization charts, personnel lists. Francisco failed to present substantial
evidence to establish the relationship. No documentary evidence submitted,
like an attendance logbook, payroll, SSS record, or any personnel file that
depicts his status as an
employee. He could also have at least presented his social security records
stating his contributions, name and address of employer (which Tenazas
presented). Another taxi operator, Emmanuel Villegas, also claimed to be
his employer a fact not denied or questioned by Francisco in any of his
pleadings. Petition DENIED. SC agreed with CAs order of reinstatement
instead of separation pay. (*Strained relations must be demonstrated as a
fact. In this case, no facts demonstrated that the relations were so strained
as to make reinstatement no longer a feasible action.
BITOY JAVIER (DANILO P. JAVIER), vs. FLY ACE
CORPORATION/FLORDELYN CASTILLO.
FACTS
On May 23, 2008, the petitioner Danilo (Bitoy) Javier filed a complaing against
the respondents (Fly Ace Corporation / Flordelyn Castillo) for underpayment
of salaries and other labor standard benefits. Javier worked for the
respondents company since September 2007 as an all around worker around
the respondents warehouse and a pahinante for the companys
deliveries. The petitioner claims that he worked for the respondent from 7:00
AM to 5:00 PM, Monday to Saturday during his time of employment but was
never issued a company ID nor any payslips like the other employees. On
May 6, 2008, the petitioner was barred from entering the companys
premises and despite repeated pleading to allow him to resume work he was
not allowed to. Petitioner further claims that when asked for a reason on why
he was being barred from working, his superior a certain Ruben Ong (Mr. Ong)
replied by telling him
Tanungin mo anak mo Petitioner claims that Mr. Ong had been courting his
daughter and apparently after being spurned had terminated Javier without a
chance to refute the cause/s of his dismissal. To support his allegations, the
petitioner presented an affidavit of one Bengie Valenzuela who alleged that
petitioner was a stevedore or pahinante of Fly Ace from September 2007 to
January 2008. The said affidavit was subscribed before the Labor Arbiter. Fly
Ace on the other hand claims that the petitioner was contracted by its
employee Mr. Ong as a pahinante on a pakyaw (or per work) basis at an
agreed rate of 300 per trip (later increased to 325 on January 2008). Mr. Ong
had contracted the petitioner only roughly 5 to 6 times per month whenever
their contracted hauler (Milmar Hauling Services) was not available. Fly Ace
submitted their contract with Milmar, and copies of acknowledgement
receipts evidencing the payment for the petitioners services with the words
daily manpower (pakyaw/piece rate pay) with the petitioners signature /
initials to try and prove that petitioner was not one of their employees. LA
dismissed the complaint for lack of merit, saying that the petitioner failed to
present proof of his regular employment with the company: Complainant has
no employee ID showing his employment with the Respondent nor any
document showing that he received the benefits accorded to regular
employees of the Respondents. His contention that Respondent failed to give
him said ID and payslips implies that indeed he was not a regular employee
of Fly Ace considering that complainant was a helper and that Respondent
company has contracted a regular trucking for the delivery of its products.
Respondent Fly Ace is not engaged in trucking business but in the
importation and sales of groceries. Since there is a regular hauler to deliver
its products, we give credence to Respondents claim that complainant was
contracted on "pakiao" basis. As to the claim for underpayment of salaries,
the payroll presented by the Respondents showing salaries of workers on
"pakiao" basis has evidentiary weight because although the signature of the
complainant appearing thereon are not uniform, they appeared to be his true
signature. On appeal at the NLRC, Javier was favored. It ruled that the LA
skirted the argument of Javier and immediately concluded that he was not a
regular employee simply because he failed to present proof. It was of the
view that a *pakyaw
-basis arrangement did not preclude the existence of employer-employee
relationship. On March 18, 2010, the CA annulled the NLRC findings that
Javier was indeed a former employee of Fly Ace and reinstated the dismissal
of Javiers complaint as ordered by the LA. In an illegal dismissal case the
onus probandi rests on the employer to prove that its dismissal was for a
valid cause. However, before a case for illegal dismissal can prosper, an
employer-employee relationship must first be established. x x x it is
incumbent upon private respondent to prove the employee-employer
relationship by substantial evidence. It is incumbent upon private respondent
to prove, by substantial evidence, that he is an employee of petitioners, but
he failed to discharge his burden. The non-issuance of a company-issued
identification card to private
respondent supports petitioners contention that private respondent was not
its employee. Case was elevated to the SC on appeal.
ISSUES
1. WON the CA erred in holding that the petitioner was not a regular
employee of FLY ACE (NO)
2. WON the CA erred in holding that the petitioner is not entitles to his
monetary claims (NO)
The Court affirms the assailed CA decision. It must be noted that the issue of
Javiers alleged illegal dismissal is anchored on the existence of an employer
-employee relationship between him and Fly Ace. This is essentially a
question of fact. Generally, the Court does not review errors that raise factual
questions
. However, when there is conflict among the factual findings of the
antecedent deciding bodies like the LA, the NLRC and the CA, "it is proper, in
the exercise of Our equity jurisdiction, to review and re-evaluate the factual
issues and to look into the records of the case and re-examine the questioned
findings." In dealing with factual issues in labor cases, "substantial evidence
that amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion is sufficient." As the records bear out, the
LA and the CA found Javiers claim of employment with Fly Ace as wanting
and deficient. The Court is constrained to agree. Although Section 10, Rule VII
of the New Rules of Procedure of the NLRC allows a relaxation of the rules of
procedure and evidence in labor cases, this rule of liberality does not mean a
complete dispensation of proof. In sum, the rule of thumb remains: the onus
probandi
falls on petitioner to establish or substantiate such claim by the requisite
quantum of evidence. "Whoever claims entitlement to the benefits provided
by law should establish his or her right thereto. Javier failed to adduce
substantial evidence as basis for the grant of relief. While Javier remains firm
in his position that as an employed stevedore of Fly Ace, he was made to
work in the company premises during weekdays arranging and cleaning
grocery items for delivery to clients , no other proof was submitted to fortify
his claim. The lone affidavit executed by one Bengie Valenzuela was
unsuccessful in strengthening Javiers cause. The Court cannot ignore the
inescapable conclusion that his mere presence at the workplace falls short in
proving employment therein. The supporting affidavit could have, to an
extent, bolstered Javiers claim of being tasked to clean grocery items when
there were no scheduled delivery trips, but no information was offered in this
subject simply because the witness had no personal knowledge of Javiers
employment. The Court is of the considerable view that on Javier lies the
burden to pass the well-settled tests to determine the existence of an
employer-employee relationship, viz : (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power to control the employees conduct. Of these elements, the most
important criterion is whether the employer controls or has reserved the right
to control the employee not only as to the result of the work but also as to
the means and methods by which the result is to be accomplished. In this
case, Javier was not able to persuade the Court that the above elements exist
in his case. Fly Ace does not dispute having contracted Javier and paid him on
a "per trip" rate as a stevedore, albeit on a pakyaw
basis. The Court cannot fail to note that Fly Ace presented documentary
proof that Javier was indeed paid on a pakyaw basis per the acknowledgment
receipts admitted as competent evidence by the LA. Unfortunately for Javier,
his mere denial of the signatures affixed therein cannot automatically sway
us to ignore the documents because "forgery cannot be presumed and must
be proved by clear, positive and convincing evidence and the burden of proof
lies on the party alleging forgery." Considering the above findings, the Court
does not see the necessity to resolve the second issue presented. The Courts
decision does not contradict the settled rule that "payment by the piece is
just a method of compensation and does not define the essence of the
relation." Payment on a piece-rate basis does not negate regular
employment. "The term wage is broadly defined in Article 97 of the Labor
Code as remuneration or earnings, capable of being expressed in terms of
money whether fixed or ascertained on a time, task, piece or commission
basis. Payment by the piece is just a method of compensation and does not
define the essence of the relations. Nor does the fact that the petitioner is not
covered by the SSS affect the employer-employee relationship. However , in
determining whether the relationship is that of employer and employee or
one of an independent contractor, each case must be determined on its own
facts and all the features of the relationship are to be considered. While the
Constitution is committed to the policy of social justice and the protection of
the working class, it should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has its rights which
are entitled to respect and enforcement in the interest of simple fair play. Out
of its concern for the less privileged in life, the Court has inclined, more often
than not, toward the worker and upheld his cause in his conflicts with the
employer. Such favoritism, however, has not blinded the Court to the rule
that justice is in every case for the deserving, to be dispensed in the light of
the established facts and the applicable law and doctrine.

Lirio v. Genovia November 2011)
Facts:
Resp. Genovia was hired as studio manager by petitioner Lirio, owner of
Celkor Ad Sonicmix Recording Studio(Celkor) particularly, to manage and
operate Celkor and to promote and sell the recording studio's services to
music enthusiasts and other prospective clients.
He was to receive a monthly salary of P7,000 and an additional commission
of P100.00 per hour as recording technician. His work was from Monday to
Friday, 9am-6pm. A few days after he started working as a studio manager,
petitioner approached him and told him about his project to produce an
album for his 15-year-old daughter, Celine Mei Lirio, a former talent of ABS-
CBN Star Records. Petitioner asked respondent to compose and arrange
songs for Celine and promised that he (Lirio)would draft a contract to assure
respondent of his compensation for such services.The album was completed
and the carrier single Genovia composed and arranged was finally aired but
he was denied his compensation by Lirio despite several demands. Lirio told
Genovia that:a.He was practically a nobody and had proven nothing yet in
the music industry, respondent did not deserve a high compensation, and he
should be thankful that he was given a job to feed his family.b.Genovia was
entitled only to 20% of the net profit, and not of the gross sales of the album,
and that thesalaries he received and would continue to receive as studio
manager of Celkor would be deducted from the said 20% net profit share Lirio
then verbally dismissed Genovia from work. Genovia filed a complaint for
illegal dismissal and prayed for his rein statement without loss of seniority
rights, or, in the alternative, that he be paid separation pay, backwages and
overtime pay; and that he be awarded unpaid commission in the amount of
P2,000.00 for services rendered as a studio technician as well as moral and
exemplary damages. Lirios defense: Respondent could not have been hired
as a studio manager, since the recording studio has no personnel except
petitioner. Respondent verbally agreed with petitioner to co-produce the
album based on the following terms and conditions: (1) petitioner shall
provide all the financing, equipment and recording studio; (2) Celine MeiLirio
shall sing all the songs; (3) respondent shall act as composer and arranger of
all the lyrics and the music of the five songs he already composed and the
revival songs; (4) petitioner shall have exclusive right to market the album;
(5) petitioner was entitled to 60% of the net profit, while respondent and
Celine Mei Lirio were each entitled to 20% of the net profit; and (6)
respondent shall be entitled to draw advances of P7,000.00 a month, which
shall be deductible from his share of the net profits and only until such time
that the album has been produced. Accordingly, their relationship was an
informal partnership under Article 1767 of the Civil Code because: They
agreed to contribute money, property or industry to a common fund with the
intention of dividing the profits among themselves Petitioner had no control
over the time and manner by which respondent composed or arranged the
songs, except on the result thereof. Labor Arbiter ruled that there was an
employee-employer relationship and not partnership and that Genovia wa
sillegally dismissed. NLRC reversed: Genovia failed to prove with substantial
evidence that he was selected and engaged by petitioner, that petitioner had
the power to dismiss him, and that they had the power to control him not
only as to the result of his work, but also as to the means and methods of
accomplishing his work. CA set aside the ruling of the NLRC.
ISSUE: Whether or not the relationship between Lirio and Genovia was an
informal partnership.
HELD: No. It was not partnership but an employer-employee relationship. CA
decision affirmed. The elements to determine the existence of an
employment relationship are: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer's power to control the employee's conduct. The most important
element is the employer's control of the employee's conduct, not only as to
the result of the work to be done, but also as to the means and methods to
accomplish it. All the aforesaid elements are present and was proven by
Genovia through documentary evidence:
(a) a document denominated as "payroll" (dated July 31, 2001 to March 15,
2002) certified correct by petitioner which showed that respondent received a
monthly salary of P7,000.00 (P3,500.00 every 15thof the month and another
P3,500.00 every 30th of the month) with the corresponding deductions due to
absences incurred by respondent; and (2) copies of petty cash vouchers,
showing the amounts he received and signed for in the payrolls. Petitioner
wielded the power to dismiss as respondent stated that he was verbally
dismissed by petitioner, and respondent, thereafter, filed an action for illegal
dismissal against petitioner. Petitioner certainly had the power to check on
the progress and work of respondent as stated in hisPosition Paper and that it
was agreed that he would help and teach respondent how to use the studio
equipment. Lirio failed to prove that his relationship with respondent was one
of partnership. Such claim was not supported by any written agreement: In
the payroll dated July 31, 2001 to March 15, 2002, there were deductions
from the wages of respondent for his absence from work, which negates
petitioner's claim that the wages paid were advances for respondents work
in the partnership. It is a well-settled doctrine, that if doubts exist between
the evidence presented by the employer and the employee, the scales of
justice must be tilted in favor of the latter. It is a time-honored rule that in
controversies between a laborer and his master, doubts reasonably arising
from the evidence or in the interpretation of agreements and writing should
be resolved in the formers favor.
LOLITA LOPEZ, PETITIONER, VS. BODEGA CITY (VIDEO-DISCO
KITCHENOF THE PHILIPPINES) AND/OR ANDRES C. TORRES-YAP,
RESPONDENTS.
FACTS
Respondent Bodega City (Bodega City) is a corporation, while respondent
Andres C.Torres-Yap (Yap) is its owner/ manager of Bodega City. Petitioner was
the "lady keeper"of Bodega City tasked with manning its ladies' comfort
room.2 Bodega alleged that Lopez have acted in a hostile manner against a
lady customer who informed the management that she saw petitioner
sleeping while on duty. Petitioner Lopez filed with NLRC, a complaint for illegal
dismissal contending that she was dismissed from her employment without
cause and due process. In their answer, respondents Bodega contended that
no employer-employee relationship by virtue of a concessionaire agreement
she entered into with respondents. The complaint was dismissed by the Labor
Arbiter for lack of merit. However, on appeal, the NLRC set aside the order of
dismissal and remanded the case for further proceedings. Upon remand, the
case was assigned to a different Labor Arbiter. Thereafter, hearings were
conducted and the parties were required to submit memoranda and other
supporting documents. The Judgment finds that Lopez was an employee of
respondents and that the latter illegally dismissed her. Respondents(Bodega)
filed an appeal with the NLRC. On March 22, 2001, the NLRC issued a
Resolution, the dispositive portion of which reads as follows: WHEREFORE,
premises duly considered, the Decision appealed from is hereby ordered SET
ASIDE and VACATED, and in its stead, a new one entered DISMISSING the
above-entitled case for lack of merit. Petitioner (LOPEZ_filed an MR of the
above-quoted NLRC Resolution, but the NLRC denied the same. Aggrieved,
petitioner filed a Petition for Certiorari with the CA. The CA promulgated the
presently assailed Decision dismissing her special civil action for certiorari.
Petitioner moved for reconsideration but her motion was denied. Hence,
herein petition based on the following grounds: (RULE 45)1.Petitioner
contends that it was wrong for the CA to conclude that even if she did not
sign the document evidencing the concessionaire agreement, she impliedly
accepted and thus bound herself to the terms and conditions contained in the
said agreement when she continued to perform the task which was allegedly
specified therein for a considerable length of time.2. Petitioner claims that
the concessionaire agreement was only offered to her during her tenth year
of service and after she organized a union and filed a complaint against
respondents. Prior to all these, petitioner asserts that her job as a "lady
keeper" was a task assigned to her as an employee of respondents.
ISSUES : Whether or not Lopez is an employee of respondents.
HELD: To ascertain the existence of an employer-employee relationship,
jurisprudence has invariably applied the four-fold test, namely: (1) the
manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or
absence of the power of control. Of these four, the last one is the most
important. The so-called "control test" is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an
employer-employee relationship. To prove the element of payment of wages,
petitioner presented a petty cash voucher showing that she received an
allowance for five (5) days. The CA did not err when it held that a solitary
petty cash voucher did not prove that petitioner had been receiving salary
from respondents or that she had been respondents' employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that length of
time, she should have been able to present salary vouchers or pay slips and
not just a single petty cash voucher. The Court agrees with respondents that
petitioner could have easily shown other pieces of evidence such as a
contract of employment, SSS or Medicare forms, or certificates of withholding
tax on compensation income; or she could have presented witnesses to prove
her contention that she was an employee of respondents. Petitioner failed to
do so. The only evidence presented by petitioner as proof of her alleged
employment are her ID card and one petty cash voucher for a five-day
allowance which were disputed by respondents. To prove the element of
control, there is nothing in the agreement which specifies the methods by
which petitioner should achieve these results. Thus, petitioner was not
dismissed by respondents. Instead, as shown by the letter of Yap to her
their contractual relationship was terminated by reason of respondents'
termination of the subject concessionaire agreement.
G & M (PHIL.), INC., v. WILLIE BATOMALAQUE
461 SCRA 111 (2005)
FACTS: Abdul Aziz Abdullah Al Muhaimid Najad Car Maintenance Association
(Abdul Aziz) hired Willie Batomalaque as car painter through a recruiter and
agent petitioner G & M Phil., Inc. (G&M). Their contract is for 2 years.
Batomalaque started working on March 10, 1992, but on June 7, 1994, he was
repatriated. He then filed a complaint against G&M, Abdul Aziz and Country
Empire Insurance Company for non-payment and underpayment of salaries
and damages with the Philippine Overseas Employment Administration
(POEA). The Labor Arbiter (LA) credited Batomalaques complaint for
underpayment of salaries during the first year of his contract but denied his
other claims, and ordered G&M and other defendants to pay Batomalaque.
On appeal, the National Labor Relations Commission affirmed the decision of
the LA.
ISSUE: Whether or not G&M has the obligation to prove that Batomalaque
was paid his salaries in full
HELD: Specifically with respect to labor cases, the burden of proving payment
of monetary claims rests on the employer, the rationale being that the
pertinent personnel files, payrolls, records, remittances and other similar
documents which will show that overtime, differentials, service incentive
leave and other claims of workers have been paid are not in the possession
of the worker but in the custody and absolute control of the employer.
Aside, however, from its bare allegation that its principal Abdul Aziz had fully
paid Batomalaques salaries, G&M did not present any evidence, e.g., payroll
or payslips, to support its defense of payment. G&M thus failed to discharge
the onus probandi. G&M, as the recruiter and agent of Abdul Aziz, is thus
solidarily liable with the latter for the unpaid wages of Batomalaque.
On repeated occasions, the Court ruled that the debtor has the burden of
showing with legal certainty that the obligation has been discharged by
payment. To discharge means to extinguish an obligation, and in contract law
discharge occurs either when the parties have performed their obligations in
the contract, or when an event the conduct of the parties, or the operation of
law releases the parties from performing. Thus, a party who alleges that an
obligation has been extinguished must prove facts or acts giving rise to the
extinction.
The fact of underpayment does not shift the burden of evidence to
Batomalaque because partial payment does not extinguish the obligation.
Only when the debtor introduces evidence that the obligation has been
extinguished does the burden of evidence shift to the creditor who is then
under a duty of producing evidence to show why payment does not
extinguish the obligation.
Auto Bus Transport Systems vs Bautista G.R. No. 156367 May
16, 2005
Facts:
Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May
1995. He was assigned to the Isabela-Manila route and he was paid by
commission (7% of gross income per travel for twice a month).In January
2000, while he was driving his bus he bumped another bus owned by Auto
Bus. He claimed that he bumped the he accidentally bumped the bus as he
was so tired and that he has not slept for more than 24 hours because Auto
Bus required him to return to Isabela immediately after arriving at Manila.
Damages were computed and 30% or P75,551.50 of it was being charged to
Bautista. Bautista refused payment.
Auto Bus terminated Bautista after due hearing as part of Auto Bus
management prerogative. Bautista sued Auto Bus for Illegal Dismissal. The
Labor Arbiter Monroe Tabingan dismissed Bautistas petition but ruled that
Bautista is entitled to P78,117.87 13th month pay payments and P13,788.05
for his unpaid service incentive leave pay. The case was appealed before the
National Labor Relations Commission. NLRC modified the LAs ruling. It
deleted the award for 13th Month pay. The court of Appeals affirmed the NLRC.
Auto Bus averred that Bautista is a commissioned employee and if that is not
reason enough that Bautista is also a field personnel hence he is not entitled
to a service incentive leave.
ISSUE: Whether or not Bautista is entitled to Service Incentive Leave. If he is,
Whether or not the three (3)-year prescriptive period provided under Article
291 of the Labor Code, as amended, is applicable to respondents claim of
service incentive leave pay.
HELD: Yes, Bautista is entitled to Service Incentive Leave. The Supreme
Court emphasized that it does not mean that just because an employee is
paid on commission basis he is already barred to receive service incentive
leave pay.
The question actually boils down to whether or not Bautista is a field
employee.
According to Article 82 of the Labor Code, field personnel shall refer to non-
agricultural employees who regularly perform their duties away from the
principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.
As a general rule, field personnel are those whose performance of their
job/service is not supervised by the employer or his representative, the
workplace being away from the principal office and whose hours and days of
work cannot be determined with reasonable certainty; hence, they are paid
specific amount for rendering specific service or performing specific work. If
required to be at specific places at specific times, employees including
drivers cannot be said to be field personnel despite the fact that they are
performing work away from the principal office of the employee. Certainly,
Bautista is not a field employee. He has a specific route to traverse as a bus
driver and that is a specific place that he needs to be at work. There are
inspectors hired by Auto Bus to constantly check him. There are inspectors in
bus stops who inspects the passengers, the punched tickets, and the driver.
Therefore he is definitely supervised though he is away from the Auto Bus
main office. On the other hand, the 3 year prescriptive period ran but
Bautista was able to file his suit in time before the prescriptive period
expired. It was only upon his filing of a complaint for illegal dismissal, one
month from the time of his dismissal, that Bautista demanded from his
former employer commutation of his accumulated leave credits. His cause of
action to claim the payment of his accumulated service incentive leave thus
accrued from the time when his employer dismissed him and failed to pay his
accumulated leave credits. Therefore, the prescriptive period with respect to
his claim for service incentive leave pay only commenced from the time the
employer failed to compensate his accumulated service incentive leave pay
at the time of his dismissal. Since Bautista had filed his money claim after
only one month from the time of his dismissal, necessarily, his money claim
was filed within the prescriptive period provided for by Article 291 of the
Labor Code.
HACIENDA BINO/HORTENCIA STARKE, INC. vs CUENCA et.al. [G.R. No.
150478. April 15, 2005]
FACTS: The 76 individual respondents were part of the workforce of Hacienda
Bino consisting of 220 workers, performing various works, such as cultivation,
planting of cane points, fertilization, watering, weeding, harvesting, and
loading of harvested sugarcanes to cargo trucks. On July 18, 1996, during the
off-milling season, petitioner Starke issued an Order or Notice which stated,
thus:
To all Hacienda Employees:
Please bear in mind that all those who signed in favor of CARP are expressing
their desire to get out of employment on their own volition. Wherefore,
beginning today, July 18, only those who did not sign for CARP will be given
employment by Hda. Bino. (Sgd.) Hortencia Starke
The respondents regarded such notice as a termination of their employment.
As a consequence, they filed a complaint for illegal dismissal, wage
differentials, 13th month pay, holiday pay and premium pay for holiday,
service incentive leave pay, and moral and exemplary damages with the
NLRC-RAB. The respondents alleged that they are regular and permanent
workers of the hacienda and that they were dismissed without just and lawful
cause. They further alleged that they were dismissed because they applied as
beneficiaries under the Comprehensive Agrarian Reform Program (CARP) over
the land owned by petitioner Starke. For her part, petitioner Starke recounted
that the companys Board of Directors petitioned the Sangguniang Bayan of
Kabankalan for authority to re-classify, from agricultural to industrial,
commercial and residential, the whole of Hacienda Bino, except the portion
earmarked for the CARP. She asserted that half of the workers supported the
re-classification but the others, which included the herein respondents, opted
to become beneficiaries of the land under the CARP. Petitioner Starke alleged
that in July 1996, there was little work in the plantation as it was off-season;
and so, on account of the seasonal nature of the work, she issued the order
giving preference to those who supported the re-classification. She pointed
out that when the milling season began in October 1996, the work was
plentiful again and she issued notices to all workers, including the
respondents, informing them of the availability of work. However, the
respondents refused to report back to work. With respect to the respondents
money claims, petitioner Starke submitted payrolls evidencing payment
thereof.
ISSUE: Whether or not respondents are seasonal employees.
HELD: The SC held that the primary standard for determining regular
employment is the reasonable connection between the particular activity
performed by the employee in Relation to the usual trade o business of the
employer. There is no doubt that the respondents were performing work
necessary and desirable in the usual trade or business of an employer. For
respondents to be excluded from those classified as regular employees, it is
not enough that they perform work or services that are seasonal in nature.
They must have been employed only for the duration of one (1) season. While
the records sufficiently show that the respondents work in the hacienda was
seasonal in nature, there was, however, no proof that they were hired for the
duration of one season. In fact, the payrolls submitted by the petitioners,
show that they availed the services of the respondents since 1991. Absent
any proof to the contrary, the general rule of regular employment should,
therefore, stand. It bears stressing that the employer has the burden of
proving the lawfulness of his employees dismissal. Petition is denied.
ST. LUKE'S MEDICAL CENTER, INCORPORATED, vs.
JENNIFER LYNNE C. FADRIGO G.R. No. 185933 November
25, 2009
Respondent Jennifer Lynne C. Fadrigo (respondent) was the Customer Affairs
Department Manager of petitioner SLMC. As such, respondent supervised the
Wellness Program Office (WPO), which administers SLMCs check up
packages.
On April 23, 2005, Dr. Charity Gorospe called up the WPO to refer a patient
for immediate check up. The call was answered by Michelle Rillo (Rillo), a
trainee at the front desk, who transferred the call to Hazel Tingzon (Tingzon),
a casual employee. Tingzon explained to Dr. Gorospe the mechanics of
undergoing a check up, which could not be administered immediately as Dr.
Gorospe wanted. Dr. Gorospe informed SLMCs Corporate President, Jose
Ledesma (Ledesma), of the incident. Ledesma then called the WPO to inquire
if it was its policy to reject patients, like what it did to Dr. Gorospes referral.
The WPO staff denied that they declined Dr. Gorospes request for immediate
admission of her patient, and added that the request for check up was
already being processed for scheduling.At around 5 oclock in the afternoon
of the same day, respondent, who was then at home enjoying her rest day,
received a phone call from SLMCs Associate Director for Corporate Affairs,
Marilen Lagniton (Lagniton), informing her what had transpired at the WPO on
that day; and directing respondent to instruct Tingzon and Rillo not to report
for duty the following day. Respondent immediately called the WPO. She was
able to talk to Gail Manalastas (Manalastas), a senior associate, who also
relayed to her what had happened in the office. Respondent, however, was
not able to talk to Tingzon and Rillo because the two already went home. She
tried to reach them through their cellular phones to inform them of Lagnitons
instruction not to report for work, but respondents efforts proved futile. Thus,
respondent instructed Manalastas to tell Tingzon and Rillo not to work the
following day and to wait for her at her office. In the morning of April 24,
2005, Lagniton called the WPO and found out that Tingzon and Rillo were in
the office. She talked to the two and instructed them to go home. Thus, when
respondent arrived in the office, Tingzon and Rillo had already gone home. 3
On April 27, 2005, respondent received a memorandum4 from Lagniton
requiring her to show cause why no disciplinary action should be taken
against her for insubordination, gross inefficiency and incompetence due to
the April 23 incident. The memorandum stated that respondent allowed a
trainee and a casual employee, Rillo and Tingzon, to man the WPO during
official business hours. Likewise, respondent allegedly failed to comply with
the management order to immediately pull out Rillo and Tingzon. On May 16,
2005, respondent received a memorandum 7 from Muit advising the former of
the COVED decision to terminate her employment effective May 18, 2005. In
the presence of several employees, respondent was subjected to a thorough
search by security officers, pursuant to SLMCs directive. Claiming
termination without cause, respondent filed with the Labor Arbiter a
complaint for illegal dismissal with prayer for reinstatement. SLMC and the
COVED members responded that there was a valid termination. They
asserted that respondent was dismissed for a just cause and with due
process. Respondent willfully breached her duty when she allowed a trainee
and a casual employee to man the WPO during official business hours; and
when she ignored the management directive to immediately pull out the
personnel involved in the incident, justifying the termination of her
employment. The Labor Arbiter rendered a decision9 finding respondents
dismissal illegal. On appeal, the National Labor Relations Commission (NLRC)
reversed the Labor Arbiter. Respondent then elevated the NLRC ruling via
certiorari to the CA, which rendered the now assailed Decision 13 reversing the
NLRC and reinstating, but with modification, the Labor Arbiters decision.
Issue: WON respondent was validly dismissed.
Ruling:
Undoubtedly, respondent cannot be dismissed for loss of confidence arising
from alleged gross inefficiency and insubordination. We are not unmindful of
the employers right to dismiss an employee based on fraud or willful breach
of trust. However, the loss of confidence must be based not on an ordinary
breach by the employee of the trust reposed in him by the employer, but, in
the language of Article 282(c) of the Labor Code, on a willful breach. A breach
is willful if it is done intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly,
heedlessly, or inadvertently. It must rest on substantial grounds and not on
the employers arbitrariness, whims, caprices or suspicion; otherwise, the
employee would eternally remain at the mercy of the employer. It should be
genuine and not simulated; nor should it appear as a mere afterthought to
justify an earlier action taken in bad faith or as a subterfuge for causes that
are improper, illegal or unjustified. It has never been intended to afford an
occasion for abuse because of its subjective nature. There must, therefore, be
an actual breach of duty committed by the employee, which must be
established by substantial evidence.23 In this case, SLMC utterly failed to
establish the requirements prescribed by law and jurisprudence for a valid
dismissal on the ground of breach of trust and confidence. The principle
echoed and reechoed in jurisprudence is that the onus of proving that the
employee was dismissed for a just cause rests on the employer, 24 and the
latters failure to discharge that burden would result in a finding that the
dismissal is unjustified.25 The CA, therefore, committed no reversible error in
not sustaining the legality of respondents dismissal.
Article 279 of the Labor Code mandates that an employee who was unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages, inclusive of
allowances, as well as to other benefits or their monetary equivalent,
computed from the time her compensation was withheld up to the time of
her actual reinstatement.26 Since the circumstances obtaining in this case do
not warrant respondents reinstatement due to her strained relations with
SLMC, the award by the CA of separation pay, in lieu of reinstatement, in
addition to full backwages, is in order.
Singer Sewing Machine vs. Drilon
FACTS:
The respondent union filed a petition for direct certification as the sole and
exclusive bargaining agent of all collectors of petitioner company. The
company opposed the petition on the ground that the union members are
actually not employees but are independent contractor based on the
collection agency agreement which they signed. The respondent asserted
that they perform the most desirable and necessary activities for the
continuous and effective operations of the business of the petitioner. They
contended that the collectors are employees because the agent shall utilize
only receipt forms authorized and issued by the company. Monthly collection
quota was also required by the company.
ISSUE:
W/N ER-EE relationship exists between petitioner and respondent
HELD:
Applying the control test, there is no ER-EE relationship exists. Hence, if the
union members are not employees, no right for purposes of bargaining, nor
to be certified as such bargaining agent can ever be recognized. Not all
collecting agents are employees and neither are all collecting agents
independent contractors. The requirement that collection agents utilize only
receipt forms and report forms issued by the company and reports shall be
submitted at least once a week is not necessarily an indication of control over
the means by which the job of collection is to be performed. The monthly
collection quota is a normal requirement. It is clear that the company and
each collecting agent intended that the company take control only over the
amount of collection, which is the result of the job performed. No such words
as to hire and employ are present. Moreover, the agreement did not fix an
amount for wages nor the required working hours. Compensation is earned
only on the basis of the tangible results produced such as the total collections
made. There is also nothing in the agreement which implies control by the
company over the means and methods in achieving the end. Since private
respondents are not employees of the company, they are not entitled to the
constitutional right to join or form a labor organization for purposes of
collective bargaining. Wherefore, the petition for certification election is
dismissed.
South Davao Development Co. vs Gamo (2009) G.R. 171814
Facts:
Petitioner South Davao Development Company is the operator of a coconut
and mango farm in San Isidro, Davao Oriental and
Inawayan/Baracatan, Davao del Sur. On 1963 petitioner hired respondent
Sergio L. Gamo (Gamo) as a foreman. Sometime in 1987, petitioner
appointed Gamo as a copra maker contractor. Respondents Ernesto Belleza,
Carlos Rojas, Maximo Malinao were all employees in petitioners coconut
farm, while respondents Felix Terona, Virgilio Cosep, Maximo Tolda, and
Nelson Bagaanwere assigned to petitioners mango farm. All of the
abovenamed respondents (copra workers) were later transferred by petitioner
to Gamo as the latters copraceros. From 1987 to 1999, Gamo and petitioner
entered into a profit-sharing agreement wherein 70% of the net proceeds of
the sale of copra went to petitioner and 30% to Gamo. The copra workers
were paid by Gamo from his 30% share. Petitioner wanted to standardize
payments to its "contractors" in its coconut farms. Petitioner proposed a
newpayment scheme to Gamo. The new scheme provided a specific price for
each copra making activity. Gamo submitted his counter proposal. Petitioner
did not accept Gamos counter proposal since it was higher by at least fifty
percent (50%) from its original offer. Without agreeing to the new
payment scheme, Gamo and his copra workers started to do harvesting work.
Petitioner told them to stop. Eventually, petitioner and Gamo agreed that the
latter may continue with the harvest provided that it would be his last
"contract" with petitioner. Gamo suggested to petitioner to look for a
new "contractor" since he was not amenable to the new payment scheme.
Gamo and petitioner failed to agree on a payment scheme, thus, petitioner
did not renew the "contract" of Gamo. Gamo and the copra workers alleged
that they were illegally dismissed.
Issue:
Whether or not a valid job contracting exist between petitioner and Gamo.
Ruling:
To establish the existence of an independent contractor, we apply the
following conditions: first, the contractor carries on an independent business
and undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the control
and direction of his employer or principal in all matters connected with the
performance of the work except to the result thereof; and second, the
contractor has substantial capital or investments in the form of tools,
equipment, machineries, work premises and other materials which are
necessary in the conduct of his business. Gamo and the copra workers did
not exercise independent judgment in the performance of their tasks. The
tools used by Gamo and his copra workers like the karit, bolo, pangbunot,
panglugit and pangtapok are not sufficient to enable them to complete the
job. Reliance on these primitive tools is not enough. In fact, the
accomplishment of their task required more expensive machineries and
equipment, like the trucks to haul the harvests and the drying facility, which
petitioner corporation owns. Thus between Gamo and the petitioner, there
exist a valid job contracting.
LEOPOLDO GUARIN and ONE HUNDRED TWENTY (120) OTHERS vs.
NLRC, LIPERCON SERVICES, INC., and/or NOVELTY PHILIPPINES, INC
G.R. No. 86010 October 3, 1989
Facts:
Novelty Philippines, Inc. is a domestic corporation that is engaged in the
garment manufacturing business. Lipercon Services, Inc. is also a domestic
corporation which is engaged in business as a service contractor providing
workers for other companies. On July 6, 1983, Novelty and Lipercon entered
into a "Contract of Services" in which Lipercon, and Novelty agreed among
others, that Lipercon will provide Novelty contractual
Laborers/Helpers/Janitors. In the contract of service, it was expressly
stipulated that no Employer-employee relationship shall exist between
employees provided by Lipercon, petitioners herein, and the Novelty.
Petitioners worked for Novelty for some three years. On December 31, 1986,
Novelty terminated its agreement with Lipercon, resulting in the dismissal of
the petitioners. On January 9, 1987, petitioners filed a complaint for illegal
dismissal against both Lipercon and Novelty. Labor Arbiter ruled that the
petitioners were regular employees of Novelty and declared their dismissal
illegal. Lipercon Services, Inc., on appeal, alleged that the decision was
contrary to the facts of the case and not in conformity with the evidence on
record and that the Executive Labor Arbiter gravely abused his discretion
when he ruled that Lipercon Services, Inc. merely acted as an agent of
Novelty Philippines, Inc. in the hiring and placement of the complainants. he
NLRC rendered a decision holding that Lipercon was an independent
contractor and that the petitioners were its employees.
Issue:
Whether or not Lipercon Services, Inc. is an independent contractor and that
petitioners are its employees.
Ruling:
Following the definition of Labor-only contract and Job contracting in Sections
8 and 9, Rule VIII, Book I of the Omnibus Rules implementing the Labor Code,
the "Contract of Services" between Lipercon and Novelty, Lipercon was a
"labor-only" contractor, hence, only an agent of Novelty to procure workers
for the latter, the real employer. The jobs assigned to the petitioners as
mechanics, janitors, gardeners, firemen and grasscutters were directly
related to the business of Novelty as a garment manufacturer. Novelty
contends that the services which are directly related to manufacturing
garments are sewing, textile cutting, designs, dying, quality control,
personnel, administration, accounting, finance, customs, delivery and similar
other activities; and that allegedly, "[i]t is only by stretching the imagination
that one may conclude that the services of janitors, janitresses, firemen,
grasscutters, mechanics and helpers are directly related to the business of
manufacturing garments". Not so, for the work of gardeners in maintaining
clean and well-kept grounds around the factory, mechanics to keep the
machines functioning properly, and firemen to look out for fires, are directly
related to the daily operations of a garment factory. That fact is confirmed by
Novelty's rehiring the workers or renewing the contract with Lipercon every
year from 1983 to 1986, a period of three (3) years. As Lipercon was a "labor-
only" contractor, the workers it supplied Novelty became regular employees
of the latter.
Virginia G. Neri vs. National Labor Relations Commission, et al.
Facts:
Respondents are sued by two employees of Building Care Corporation, which
provides janitorial and other specific services to various firms, to compel Far
Bast Bank and Trust Company to recognize them as its regular employees
and be paid the same wages which its employees receive. Building Care
Corporation (BCC, for brevity), in the proceedings below, established that it
had
substantial capitalization of P1 Million or a stockholders equity of P1.5 Million.
Thus the Labor Arbiter ruled that BCC was only job contracting and that
consequently its employees were not employees of Far East Bank and Trust
Company (FEBTC, for brevity). on appeal, this factual finding was affirmed by
respondent National Labor Relations Commission (NLRC, for brevity).
Nevertheless, petitioners insist before us that BCC is engaged in "labor-only"
contracting hence,
they conclude, they are employees of respondent FEBTC. On 28 June 1989,
petitioners instituted complaints against FEBTC and BCC before Regional
Arbitration Branch No. 10 of the Department of Labor and Employment to
compel the bank to accept them as regular employees and for it to pay the
differential between the wages being paid them by BCC and those received
by FEBTC employees with similar length of service.
Issue:
Whether or not BCC is only a job contracting company, hence petitioners are
not regular employees of FEBTC.
SC Ruling:
We cannot sustain the petition. Respondent BCC need not prove that it made
investments in the form of tools, equipment, machineries, work premises,
among others, because it has established that it has sufficient capitalization.
The Labor Arbiter and the NLRC both determined that BCC had a capital stock
of
P1 million fully subscribed and paid for. BCC is therefore a highly capitalized
venture and cannot be deemed engaged in "labor-only" contracting.
It is well-settled that there is "labor-only" contracting where: (a) the person
supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises,
among others; and, (b) the workers recruited and placed by such person are
performing activities which are directly related to the principal business of
the employer.
Article 106 of the Labor Code defines "labor-only" contracting
Based on the foregoing, BCC cannot be considered a "labor-only" contractor
because it has substantial capital. While there may be no evidence that it has
investment in the form of tools, equipment, machineries, work premises,
among others, it is enough that it has substantial capital, as was established
before the Labor Arbiter as well as the NLRC. In other words, the law does not
require both substantial capital and investment in the form of tools,
equipment, machineries, etc. This is clear from the use of the conjunction
"or". If the intention was to require the contractor to prove that he has both
capital and the requisite investment, then the conjunction "and" should have
been used. But, having established that it has substantial capital, it was no
longer necessary for BCC to further adduce evidence to prove that it does not
fall within the purview of "labor-only" contracting. There is even no need for it
to refute petitioners'
contention that the activities they perform are directly related to the principal
business of respondent bank.
De Ocampo vs. NLRC G.R. No. 101539 September 4, 199
Facts: Cecile de Ocampo and the other petitioners are employees of the
Baliwag Mahogany Corporation. They are either officers or members of the
Baliwag Mahogany Corporation Union-CFW, the existing collective bargaining
agent of the rank and file employees in the company. In 1988, the company
and the union entered into a CBA containing, among other things, provisions
on conversion into cash of unused vacation and sick leaves; grievance
machinery procedure; and the right of the company to schedule work on
Sundays and holidays. In November, 1989, the union made several requests
from the company.The company ruled to allow payment of unused vacation
and sick leaves for the period of 1987-1988 but disallowed cash conversion of
the 1988-1989 unused leaves. The company suspended 20 employees for a
period of 3 days because of failure to render overtime work. On the same
day, the union filed a notice of strike on the grounds of ULP particularly the
violation of the CBA provisions on non-payment of unused leaves and illegal
dismissal of seven (7) employees. Later on, the company issued a notice of
termination to three employees or union members including Cecile de
Ocampo allegedly to effect cost reduction and redundancy. The members of
the union conducted a picket at the main gate of the company. On the same
day, the company filed a petition to declare the strike illegal with prayer for
injunction against the union.
During the election of union officers, Cecile de Ocampo was elected as
president. During the conciliation meeting held at NCMB, the issue pertaining
to the legality of the termination of three union members was raised by the
union. But both parties agreed to discuss it separately. The union requested
for the presence of a NCMB representative during a strike vote held by the
union. The strike vote resulted in favor of the strike. The union staged a
strike. Afterwards, the company filed a petition to assume jurisdiction with
the DOLE. The company also filed an amended petition, praying among other
things, that the strike staged by the union be declared illegal, there being no
genuine strikeable issue and the violation of the no-strike clause of the
existing CBA between the parties.
The Secretary of Labor in an order, certified the entire labor dispute to the
respondent Commission for compulsory arbitration and directed all striking
workers including the dismissed employees to return to work and the
management to accept them back. The sheriff, with the assistance of the
policemen removed the barricades and opened the main gate of the
company. Criminal complaints for illegal assembly, grave threats, and grave
coercion werefiled against the petitioners. The union, through its President
Cecile de Ocampo, requested the Regional Director of DOLE, to intervene in
the existing dispute with management. The respondent Commission rendered
a decision declaring the strikes staged illegal.
Issue: Whether or not there is a legal basis for declaring the loss of
employment status by petitioners on account of the strike in respondent
Company.
Held: Yes. The Solicitor General claims that it is undisputed that the union
resorted to illegal acts during the strike arguing that private respondents
personnel manager specifically identified the union officers and members
who committed the prohibited acts and actively participated therein.
Ratio: The law on the matter is Article 264 (a) of the Labor Code, to wit:
Article 264. (a) Prohibited activities. (a)
No strike or lockout shall be declared after assumption of jurisdiction by the
President or the Minister or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases
involving the same grounds for the strike or lockout.
Any worker whose employment has been terminated as a consequence of an
unlawful lockout shall be entitled to reinstatement with full backwages. Any
union officer who knowingly participates in an illegal strike and any worker or
union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status
The Solicitor General maintains that the illegality of the strike likewise stems
from the failure of the petitioners to honor the certification order and heed
the return-to-work order issued by the Secretary of Labor.
Unrebutted evidence shows that the individual petitioners defied the return-
to-work order of the Secretary of Labor. Hence, the termination of the
services of the individual petitioners is justified on this ground alone.
Dispositive: The petition is DISMISSED for lack of merit and the resolution of
the respondent Commission is hereby AFFIRMED.
Phil Bank v NLRC
FACTS:
Petitioner and CESI entered into a letter agreement wherein CESI will provide
Temporary Services to petitioner. Attached to the letter was a list of
passengers, assigned to work with the petitioner, including respondent
Orpiada. Orpiada rendered services within the premises of the bank. On
October 1976, petitioner requested CESI to withdraw Orpiadas assignment
because Orpiadas services were no longer needed. Thus, Orpiada filed a
complaint against petitioner for illegal dismissal and failure to pay the 13 th
month pay.
ISSUE:
W/N an ER-EE relationship existed between the bank and respondent
HELD:
Yes. In the case at bar, Orpiada is not previously selected by the bank but
was assigned to work by CESI. The selection of Orpiada by CESI, was however
subject to the acceptance of the bank. With respect to the payment of
Orpiadas wages, the bank remitted to CESI the daily rate or Orpiada and
CESI pays the latter his wages. He was also listed in the payroll of CESI with
SSS deduction. In respect of the power of dismissal, the bank requested CESI
to withdraw Orpiadas assignment, which resulted to the latters termination.
With regards to power of control, Orpiada performed his functions within the
banks premises and not in CESA/Payment of wages and power of dismissal
exist between CESI and Orpiada. However, selection and control exist
between Orpiada and the bank. Thus, it is necessary to determine the
relationship between the bank and CESI, whether the latter is a job
(independent) contactor or a labor-only contracting. In the present case, the
undertaking of CESI in favor of the bank was not the performance of a
specific job, but to produce its client the bank with a certain number of
persons to work as messengers. Thus, Orpiada utilized the premises and
office equipment of the bank and not of CESI. Orpiada worked in the bank for
a period of 16 months. Under the Labor Code, any employee who has
rendered at least 1 year, whether continuous or not, shall be considered as a
regular employee. Therefore, CESI was only engaged in a labor-only
contracting with petitioner and Orpiada. As a result, petitioner is liable to
Opiada as if Opiada had been directly employer by the bank. Wherefore,
petition of certiorari is denied.

Maraguinot v. NLRC
FACTS:
Petitioner maintains that he was employed by respondents as part of the
filming crew. He was later promoted as an electrician. Petitioners tasks
contained of loading movie equipment in the shoothing area. Petitioners
sought the assistance of their supervisor, Cesario, to facilitate their request
that respondents adjust their salary in accordance with the minimum wage
law. Mrs. Cesario informed petitioners that del Rosario would agree to
increase their salary only if they signed a blank employment contract. As
petitioner refused to sign, respondents forced Enero (the other petitioner who
worked as a crew member) to go on leave. However, when he reported to
work, respondent refused to take him back. Maraguinot was dropped from the
company payroll but when he returned, he was again asked to sign a blank
employment contract, and when he still refused, respondents terminated his
services. Petitioners thus sued for illegal dismissal. Private respondents assert
that they contract persons called producers to produce or make movies for
private respondents and contend that petitioners are project employees of
the associate producers, who act as independent contractors. Thus, there is
no ER-EE relationship. However, petitioners cited that their performance of
activities is necessary in the usual trade or business of respondents and their
work in continuous.
ISSUE:
W/N ER-EE relationship exists
HELD:
Yes.With regards to VIVAs contention that it does not make movies but
merely distributes motion pictures, there is no sufficient proof to prove this
contention. In respect to respondents allegation that petitioners are project
employees, it is a settled rule that the contracting out of labor is allowed only
in case of job contracting. However, assuming that the associate producers
are job contactors, they must then be engaged in the business of making
motion pictures. Associate producers must have tools necessary to make
motion pictures. However, the associate producers in this case have none
of these. The movie-making equipment are supplied to the producers and
owned by VIVA. Thus, it is clear that the associate producer merely leases the
equipment from VIVA. In addition, the associate producers of VIVA cannot be
considered labor-only contractors as they did not supply, recruit nor hire the
workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew
members. Thus, the relationship between VIVA and its producers or associate
producers seems to be that of agency. With regards to the issue of illegal
dismissal, petitioners assert that they were regular employees who were
illegally dismissed. Petitioners in this case had already attained the status of
regular employees in view of VIVAs conduct. Thus, petitioners are entitled to
back wages. A project employee or a member of a work pool may acquire the
status of a regular employee when: a. there is a continuous rehiring of project
employees even after a cessation of project b. the tasks performed by the
alleged project employee are vital and necessary to the business
of employer The tasks of petitioners in loading movie equipment and
returning it to VIVAs warehouse and fixing the lighting system were vital,
necessary and indispensable to the usual business or trade of the employer.
Wherefore, petition is granted.
EMPERMACO B. ABANTE, JR., petitioner, vs. LAMADRID BEARING &
PARTS CORP. and JOSE LAMADRID, President, respondents.
[G.R. No. 159890 May 28, 2004]
FACTS: Petitioner was a salesman of respondent company earning a
commission of 3% of the total paid up sales covering the whole area of
Mindanao. Aside from selling, he was also tasked with collection. Respondent
corporation through its president, often required Abante to report to a
particular area and occasionally required him to go to Manila to attend
conferences. Later on, bad blood ensued between the parties due to some
bad accounts that Lamadrid forced petitioner to cover. Later petitioner found
out that respondent had informed his customers not to deal with petitioner
since it no longer recognized him as a commission salesman. Petitioner filed a
complaint for illegal dismissal with money claims against respondent
company and its president, Jose Lamadrid. By way of defense, respondents
countered that petitioner was not its employee but a freelance salesman on
commission basis.
ISSUE: Whether or not petitioner, as a commission salesman, is an employee
of respondent corporation.
HELD: To determine the existence of an employee-employer relationship, we
apply the four fold test: 1) the manner of selection and engagement; (2) the
payment of wages; (3) the presence or absence of the power of dismissal;
and (4) the presence or absence of the power of control. Applying the
aforementioned test, an employer-employee relationship is notably absent in
this case. It is true that he was paid in commission yet no quota was imposed
therefore a dismal performance would not warrant a ground for dismissal.
There was no specific office hours he was required to observe. He was not
designated to conduct services at a particular area or time. He pursued his
selling without interference or supervision from the company. The company
did not prescribe the manner of selling merchandise. While he was
sometimes required to report to Manila, these were only intended to guide
him. Moreover, petitioner was free to offer his services to other companies.
Art. 280 is not a crucial factor because it only determines two kinds of
employees. It doen;t apply where there is no employer-employee relationship.
While the term commission under Article 96 of the LC was construed as being
included in the term wage, there is no categorical pronouncement that the
payment of commission is conclusive proof of the existence of an employee-
employer relationship. The decision of the CA is affirmed.
 GREGORIO V. TONGKO, vs. THE MANUFACTURERS LIFE INSURANCE
CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS G.R. No. 167622
June 29, 2010
FACTS:
Petitioner Gregorio Tongko entered into a Career Agents Agreement with
respondent Manulife. As an agent, his duties consisted of, among others,
canvassing for applications for group policies and other products of the
company. Subsequently, Tongko was named unit manager, branch manager,
and regional sales manager. But when he failed to comply with policies of
Manulife, his Agency Agreement was terminated. Tongko filed a complaint
with the NLRC Arbitration Branch. He essentially alleged despite the clear
terms of the letter terminating his Agency Agreement that he was Manulifes
employee before he was illegally dismissed. The labor arbiter decreed that no
employer-employee relationship existed between the parties. However, the
NLRC reversed the labor arbiters decision on appeal. When the case went to
the CA, it
sustained the labor Arbiters decision. Manulife asserts that the labor
tribunals have no jurisdiction over Tongkos claim as he was not its employee
as characterized in the four-fold test.
ISSUE:
Has the labor arbiter jurisdiction over his complaint for illegal dismissal?
HELD:
No. Given the anemic state of the evidence, particularly on the requisite
confluence of the factors that would show an employer-employee
relationship, the court cannot conclusively find that the relationship exists in
the present case, even if such relationship only refers to Tongkos additional
functions. While a rough deduction can be made, the answer will not be fully
supported by the substantial evidence needed. Under this legal situation, the
only conclusion that can be made is that the absence of evidence showing
Manulifes control over Tongkos contractual duties points to the absence of
any employer-employee relationship between Tongko and Manulife. In the
context of the established evidence, Tongko remained an agent all along;
although his subsequent duties made him a lead agent with leadership role,
he was nevertheless only an agent whose basic contract yields no evidence
of means-and-manner control. In the case, it is a matter that the labor
tribunals cannot rule upon in the absence of an employer-employee
relationship. Jurisdiction over the matter belongs to the courts applying the
laws of insurance, agency and contracts.
DEALCO FARMS, INC. vs. NATIONAL LABOR RELATIONS COMMISSION
(5th DIVISION), CHIQUITO BASTIDA, and ALBERT CABAN
GR No. 153192 January 30, 2009
FACTS:
Petitioner Dealco Farms is a corporation engaged in the business of
importation, production, fattening and distribution of live cattle for sale to
meat dealers, meat traders, meat processors, canned good manufacturers
and other dealers in Mindanao and in Metro Manila. Petitioner imports cattle
by the boatload from Australia into the ports of General Santos City, Subic,
Batangas, or Manila. In turn, these imported cattle are transported to, and
housed in, petitioners farms in Polomolok, South Cotabato, or in Magalang,
Pampanga, for fattening until the cattle individually reach the market weight
of 430 to 450 kilograms.Respondents Albert Caban and Chiquito Bastida were
hired by petitioner on June 25, 1993 and October 29, 1994, respectively, as
escorts or "comboys" for the transit of live cattle from General Santos City to
Manila. Respondents work entailed tending to the cattle during
transportation. It included feeding and frequently showering the cattle to
prevent dehydration and to develop heat resistance. On the whole,
respondents ensured that the cattle would be safe from harm or death
caused by a cattle fight or any such similar incident. Upon arrival in Manila,
the cattle are turned over to and received by the duly acknowledged buyers
or customers of petitioner, at which point, respondents work ceases. For
every round trip travel which lasted an average of 12 days, respondents were
each paid P1,500.00. The 12-day period is occasionally extended when
petitioners customers are delayed in receiving the cattle. In a month,
respondents usually made two trips. On August 19, 1999, respondents were
told by Dealcos hepe de viaje that their replacement had been effected
immediately, but no reason was given for their replacement. Respondents
attempted to meet with petitioner but failed. Petitioner denies the existence
of an employer-employee relationship with respondents, claiming that: (a)
respondents are independent contractors who offer "comboy" services to
various shippers and traders of cattle, not only to petitioner; (b) in the
performance of work on board the ship, respondents are free from the control
and supervision of the cattle owner since the latter is interested only in the
result thereof; (c) in the alternative, respondents can only be considered as
casual employees performing work not necessary and desirable to the usual
business or trade of petitioner, i.e., cattle fattening to market weight and
production; and (d) respondents likewise failed to complete the one-year
service period, whether continuous or broken, set forth in Article 280 of the
Labor Code, as petitioners shipments were substantially reduced in 1998-
1999, thereby limiting the escort or "comboy" activity for which respondents
were employed.
ISSUE:
Whether or not an employer-employee relationship existed between
petitioner and respondents and therefore the latters termination was illegal.
HELD:
Complainants task of escorting the livestock shipped to Manila, taking care
of the livestock in transit, is an activity which is necessary and desirable in
the usual business or trade of respondent. It is of judicial notice that the bulk
of the market for livestock of big livestock raisers such as respondent is in
Manila. Hogs do not swim, they are shipped. The caretaker is a component of
the business, a part of the scheme of the operation. More, it also appears that
respondents had rendered service for more than one year doing the same
task repeatedly, thus, even assuming they were casual employees they may
be considered regular employees with respect to the activity in which they
were employed and their employment shall continue while such activity
exists (last par. of Art. 280). The presence of the four (4) elements in the
determination of an employer-employee relationship has been clearly
established by the facts and evidence on record, starting with the admissions
of petitioner who acknowledged the engagement of respondents as escorts of
their cattles shipped from General Santos to Manila, and the compensation of
the latter at a fee of P1,500.00 per trip. The element of control,
jurisprudentially considered the most essential element of the four, has not
been demolished by any evidence to the contrary. The branch has noticed
that the preparation of the shipment of cattle, manning and feeding them
while in transit, and making a report upon their return to General Santos that
the cattle shipped and which reached Manila actually tallied were all
indicators of instructions, supervision and control by [petitioner] on
[respondents] performance of work as escorts for which they were hired. This
we agree on all fours. The livestock shipment would cost thousands of pesos
and the certainty of it reaching its destination would be the only thing any
operator would consider at all time and under all circumstances. It is illogical
for [petitioner] to argue that the shipment was not necessary or desirable to
their business, as their business was mainly livestock production, because
they were undeniably the owners of the cattle escorted by respondents.
Should losses of a shipment occur due to respondents neglect these would
still be petitioners loss, and nobody elses.
LAZARO vs. SOCIAL SECURITY COMMISSION Case Digest
ANGELITO LAZARO vs. SOCIAL SECURITY COMMISSION
435 SCRA 472 (2004)
Facts: Respondent Rosalina M. Laudato filed a petition before the SSC for
social security coverage and remittance of unpaid monthly social security
contributions against her three (3) employers. Among the respondents was
herein petitioner Angelito L. Lazaro, proprietor of Royal Star Marketing (Royal
Star), which is engaged in the business of selling home appliances.
Lazaro denied that Laudato was an employee but instead claimed that she
was an agent of the company. Lazaro also maintained that she was not
mandated to work of definite work hours and thus not deemed to be a regular
employee of Royal Star Marketing, the company of Lazaro.
SSC promulgated a decision rendering that Laudato is a regular employee of
Royal Star Marketing and entitled to social security contributions. Lazaro filed
a petition for review before the CA where CA ruled that Laudato was an
employee of Royal Star Marketing. This petition before the Court assails same
arguments raised by Lazaro in SSC. She raised that Laudato was not an
employee of Royal Star Marketing since Royal Star had no control over the
activities of Laudato.
Issue: Whether or not Laudato was a regular employee of Royal Star
Marketing and thus, entitled to social security contributions.
Ruling: It is an accepted doctrine that for the purposes of coverage under
the Social Security Act, the determination of employer-employee relationship
warrants the application of the control test, that is, whether the employer
controls or has reserved the right to control the employee, not only as to the
result of the work done, but also as to the means and methods by which the
same is accomplished.
The SSC, applying the control test found that Laudato was an employee of
Royal Star. The Court agrees with the findings of the SSC and the CA. The fact
that Laudato was paid by way of commission does not preclude the
establishment of an employer-employee relationship.
In the case of Grepalife v. Judico, the Court upheld the existence of an
employer-employee relationship between the insurance company and its
agents, despite the fact that the compensation that the agents on
commission received was not paid by the company but by the investor or the
person insured. The relevant factor remains, as stated earlier, whether the
"employer" controls or has reserved the right to control the "employee" not
only as to the result of the work to be done but also as to the means and
methods by which the same is to be accomplished.
Neither does it follow that a person who does not observe normal hours of
work cannot be deemed an employee.
In the case of Cosmopolitan Funeral Homes, Inc. v. Maalat, the employer
similarly denied the existence of an employer-employee relationship, as the
claimant according to it, was a supervisor on commission basis who did not
observe normal hours of work. This Court declared that there was an
employer-employee relationship, noting that [the] supervisor, although
compensated on commission basis, [is] exempt from the observance of
normal hours of work for his compensation is measured by the number of
sales he makes.