ALEJANDRO MARAGUINOT, JR.

and PAULINO ENERO vs NLRC GRN 120969 January 22, 1998

Facts: Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private respondents filming crew and was was
promoted to the rank of Electrician. Petitioner Paulino Enero, on his part, claims that private respondents employed him as a
member of the shooting crew . Petitioners' tasks consisted of loading, unloading and arranging movie equipment in the shooting
area as instructed by the cameraman, returning the equipment to Viva Films' warehouse, assisting in the "fixing" of the lighting
system, and performing other tasks that the cameraman and/or director may assign. Petitioners sought the assistance of their
supervisor, Mrs. Alejandria Cesario, to facilitate their request that private respondents adjust their salary in accordance with the
minimum wage law. Mrs. Cesario informed petitioners that Mr. Vic del Rosario would agree to increase their salary only if they
signed a blank employment contract. As petitioners refused to sign, private respondents forced Enero to go on leave, then
refused to take him back when he reported for work. Meanwhile, Maraguinot was again asked to sign a blank employment
contract, and when he still refused, private respondents terminated his services. Petitioners thus sued for illegal dismissal before
the Labor Arbiter. On the other hand, private respondents claim that Viva Films (hereafter VIVA) that it is primarily engaged in
the distribution and exhibition of movies - but not in the business of making movies; in the same vein, private respondent Vic del
Rosario is merely an executive producer, i.e., the financier who invests a certain sum of money for the production of movies
distributed and exhibited by VIVA. Private respondents assert that they contract persons called "producers" - also referred to as
"associate producers" to "produce" or make movies for private respondents; and contend that petitioners are project employees
of the associate producers who, in turn, act as independent contractors. As such, there is no employer-employee relationship
between petitioners and private respondents.

Issue: The determination of whether an employer-employee relationship existed between petitioners and private respondents or
any one of private respondents.

Held: All the circumstances indicate an employment relationship between petitioners and VIVA alone, thus the inevitable
conclusion is that petitioners are employees only of VIVA. In respect to the respondents allegation that the petitioners are
project employees, it is a settled rule that contracting out of labor is allowed only in case of job contracting. In the case at bar,
the associate producers cannot be considered as job contractors but only agents because they are not engaged in the business of
making motion pictures. The movie making equipment are supplied to the producers and owned by VIVA. In addition, the
associate producers cannot be considered as labor only contractors as they did not supply, recruit nor hire workers. It may not be
ignored, however, that private respondents expressly admitted that petitioners were part of a work pool; 31 and, while
petitioners were initially hired possibly as project employees, they had attained the status of regular employees in view of VIVA's
conduct. A project employee or a member of a work pool may acquire the status of a regular employee when the following
concur: 1) There is a continuous rehiring of project employees even after cessation of a project; 32 and 2) The tasks performed
by the alleged "project employee" are vital, necessary and indispensable to the usual business or trade of the employer. 33

DY KEH BENG, petitioner, vs. INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES,
ET AL., respondents. G.R. No. L-32245 May 25, 1979
FACTS: Petitioner, Dy Keh Beng, proprietor of basket factory, was charged with ULP for discriminatory acts defined under Sec
4(a), subparagraph (1 & 4), R.A. No. 875 by dismissing on September 28-29, 1960, respectively, Carlos N. Solano and Ricardo
Tudla for their union activities. After PI was conducted, a case was filed in the CIR for in behalf of the ILMUP and two of its
members, Solano and Tudla. Dy Keh Beng contended that he did not know Tudla and that Solano was not his employee because
the latter came to the establishment only when there was work which he did on pakiaw basis. According to Dy Keh Beng, Solano
was not his employee for the following reasons: (1) (2) (3) (4) Solano never stayed long enough at Dys establishment; Solano
had to leave as soon as he was through with the order given him by Dy; When there were no orders needing his services there
was nothing for him to do; When orders came to the shop that his regular workers could not fill it was then that Dy went to his
address in Caloocan and fetched him for these orders; and (5) Solano's work with Dy's establishment was not continuous.
According to petitioner, these facts show that respondents Solano and Tudla are only piece workers, not employees under
Republic Act 875, where an employee is referred to as shall include any employee and shag not be limited to the employee of a
particular employer unless the act explicitly states otherwise and shall include any individual whose work has ceased as a
consequence of, or in connection with any current labor dispute or because of any ulp and who has not obtained any other
substantially equivalent and regular employment. while an employer includes any person acting in the interest of an employer,
directly or indirectly but shall not include any labor organization (otherwise than when acting as an employer) or anyone acting in
the capacity of officer or agent of such labor organization. Petitioner also contends that the private respondents "did not meet
the control test in the fight of the ... definition of the terms employer and employee, because there was no evidence to show
that petitioner had the right to direct the manner and method of respondent's work. He points to the case of Madrigal Shipping
Co., Inc. v. Nieves Baens del Rosario, et al., L-13130, October 31, 1959, where the Court ruled that: The test ... of the existence of
employee and employer relationship is whether there is an understanding between the parties that one is to render personal
services to or for the benefit of the other and recognition by them of the right of one to order and control the other in the
performance of the work and to direct the manner and method of its performance. The CIR found that there existed an
employee-employer relationship between Dy Keh Beng and complainants Tudla and Solano, although Solano was admitted to
have worked on piece basis. Hence, this petition for certiorari.

SSUE: Whether or not an employee employer relation existed between petitioner Dy Keh Beng and the respondents Solano and
Tudla.

HELD: The SC also noted the decision of Justice Paras in the case of Sunrise Coconut Products Co. Vs. CIR (83 Phil 518, 523) that
judicial notice of the fact that the so-called "pakyaw" system mentioned in this case as generally practiced in our country, is, in
fact, a labor contract -between employers and employees, between capitalists and laborers. With regard to the control test the
SC said that It should be borne in mind that the control test calls merely for the existence of the right to control the manner of
doing the work, not the actual exercise of the right. Considering the finding by the Hearing Examiner that the establishment of
Dy Keh Beng is "engaged in the manufacture of baskets known as kaing, it is natural to expect that those working under Dy would
have to observe, among others, Dy's requirements of size and quality of the kaing. Some control would necessarily be exercised
by Dy as the making of the kaing would be subject to Dy's specifications. Parenthetically, since the work on the baskets is done at
Dy's establishments, it can be inferred that the proprietor Dy could easily exercise control on the men he employed. The petition
was dismissed. The Court affirmed the decision of the CIR

Tan vs. Lagrama

G.R. No. 151228, August 15, 2002

Facts

Lagrama works for Tan as painter of billboards and murals for the motion pictures shown at the theaters managed by Tan for
more than 10years

Lagrama worls for tan as a painter for billboard murals managed by tan

dismissed for having urinated in his working area

Lagrama filed a complaint for illegal dismissal and non payment of benefits

Tan asserted that Lagrama was an independent contractor as he was paid in piece-work basis

Issue

W/N Lagrama is an independent contractor or an employee of Tan?

Ruling

Lagrama is an employee not an independent contractor in Applying Four Fold Test

A. Power of Control - Evidence shows that the Lagrama performed his work as painter and under the supervision and control of
Tan.

Lagrama worked in a designated work area inside the theater of Tan for the use of which petitioner prescribed rules, which rules
included the observance of cleanliness and hygeine and prohibition against urinating in the work area and any other place other
than rest rooms and

Tan's control over Lagrama's work extended not only the use of work area but also the result of Lagrama;s work and the manner
and means by which the work was to be accomplished
Lagrama is not an independent contractor because he did not enjoy independence and freedom from the control and supervision
of Tan and he was subjected to Tan's control over the means and methods by which his work is to be performed and
accomplished

B. Payment of Wages

Lagrama worked for Tan on a fixed piece work basis is of no moment. Payment by result is a method of compensation and does
not define the essence of the relation.

Tat Lagrama was not reported as an employee to the SSS is not conclusive, on the question whether he was an employee,
otherwise Tan would be rewarded for his failure or even neglect to perform his obligation.

C. Power of Dismissal by Tan stating that he had the right to fire Lagrama, Tan in effect acknowledged Lagrama to be his
employee

D. Power of Selection and Engagement of Employees Tan engaged the services of Lagrama without the intervention of third
party

Economic Test

SEVILLA v. CA | Sarmiento, J.

G.R. No. L-41182-3 | April 16, 1988

Petitioner: Dr. Carlos Sevilla and Lina Sevilla

Respondent: CA, Tourism World Service, Inc.

Quick Summary:

Sevilla and Tourism World Service (TWS) entered into a contract involving the management of a branch office of the latter. The
issue here is the nature of the relationship between the parties. This stems from the unilateral disconnection of phone lines and
padlocking of the said offices by TWS, wherein Sevilla feeling aggrieved, filed a complaint under Articles 19, 20 and 21 of the Civil
Code.

In this case the petitioner Lina Sevilla claims that a joint business venture was entered into by and between her and Tourist
World Service with offices at the Ermita branch office and that she was not an employee of the TWS to the end that her
relationship with TWS was one of a joint business venture. TWS contends that she is an employee, and therefore bound by the
acts of TWS, the employer.

The Court held, using the Economic test, that she is not an employee: (USING the existing economic conditions prevailing
between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-employee
relationship)

a true employee cannot be made to part with his own money in pursuance of his employer's business (Sevilla bound
herself in solidumas and for rental payments of the said office)

unlike an employee then, who earns a fixed salary usually, she earned compensation in fluctuating amounts depending
on her booking successes.BUT, also held that it is not a joint venture but a contract of agency, thus the unilateral rescission of
TWS made it liable for damages.

Facts:

Sevilla and TWS entered into a contract in relation to the management of a branch office of the latter.

TWS appears to have been informed that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau, and,
since the branch office was anyhow losing, the Tourist World Service considered closing down its office.

TWS indeed, closed down the premises. Hence Sevillas action for damages.
 Lina Sevilla claims that a joint business venture was entered into by and between her and appellee TWS with offices at
the Ermita branch office and that she was not an employee of the TWS to the end that her relationship with TWS was one of a
joint business venture. TWS contend that the appellant was an employee of the appellee Tourist World Service, Inc. and as such
was designated manager.

RTC: TWS, being the true lessee, it was within its prerogative to terminate the lease and padlock the premises. It
likewise found the petitioner, Lina Sevilla, to be a mere employee of said Tourist World Service, Inc. and as such, she was bound
by the acts of her employer

Hence this appeal

Issue: WON employee-employer relationship exist (important in the matter of jurisdiction)

Held/ Ratio: NO. It is a Contract of Agency, thus lower court has jurisdiction. Court awarded damages to Sevilla. In this
jurisdiction, there has been no uniform test to determine the evidence of an employer-employee relation. In general, we have
relied on the so-called right of control test, "where the person for whom the services are performed reserves a right to control
not only the end to be achieved but also the means to be used in reaching such end."

Subsequently, however, we have considered, in addition to the standard of right-of control, the existing economic conditions
prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the existence of an employer-
employee relationship.

The records will show that the petitioner, Lina Sevilla, was not subject to control by the private respondent Tourist World
Service, Inc., either as to the result of the enterprise or as to the means used in connection therewith. In the first place, under
the contract of lease covering the Tourist Worlds Ermita office, she had bound herself in solidumas and for rental payments, an
arrangement that would be like claims of a master-servant relationship.

True the respondent Court would later minimize her participation in the lease as one of mere guaranty, that does not make her
an employee of Tourist World, since in any case, a true employee cannot be made to part with his own money in pursuance of his
employer's business, or otherwise, assume any liability thereof. In that event, the parties must be bound by some other relation,
but certainly not employment.

In the second place, and as found by the Appellate Court, '[w]hen the branch office was opened, the same was run by the herein
appellant Lina O. Sevilla payable to Tourist World Service, Inc. by any airline for any fare brought in on the effort of Mrs. Lina
Sevilla. Under these circumstances, it cannot be said that Sevilla was under the control of Tourist World Service, Inc. "as to the
means used." Sevilla in pursuing the business, obviously relied on her own gifts and capabilities.

It is further admitted that Sevilla was not in the company's payroll. For her efforts, she retained 4% in commissions from airline
bookings, the remaining 3% going to Tourist World. Unlike an employee then, who earns a fixed salary usually, she earned
compensation in fluctuating amounts depending on her booking successes.

ANGELINA FRANCISCO vs. NLRC

Facts: Petitoner was hired by Kasei Corporation during the incorporation stage. She was designated as accountant and corporate
secretary and was assigned to handle all the accounting needs of the company. She was also designated as Liason Officer to the
City of Manila to secure permits for the operation of the company.

In 1996, Petitioner was designated as Acting Manager. She was assigned to handle recruitment of all employees and perform
management administration functions. In 2001, she was replaced by Liza Fuentes as Manager. Kasei Corporation reduced her
salary to P2,500 per month which was until September. She asked for her salary but was informed that she was no longer
connected to the company. She did not anymore report to work since she was not paid for her salary. She filed an action for
constructive dismissal with the Labor Arbiter.

The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed the decision while CA reversed it.

Issue: Whether or not there was an employer-employee relationship.

Ruling: The court held that in this jurisdiction, there has been no uniform test to determine the existence of an employer-
employee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are
performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In
addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of
the employee in the payrolls, can help in determining the existence of an employer-employee relationship.

The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers power to control the
employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic
realities of the activity or relationship.

In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic conditions prevailing between the
parties, in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture
in determining the existence of an employer-employee relationship based on an analysis of the totality of economic
circumstances of the worker.

Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole
economic activity, such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the
extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4)
the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of
the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer;
and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The
proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued
employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the
direct control and supervision of Seiji Kamura, the corporations Technical Consultant. It is therefore apparent that petitioner is
economically dependent on respondent corporation for her continued employment in the latters line of business.

There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged
by the company for compensation, and is economically dependent upon respondent for her continued employment in that line
of business. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis
over an indefinite period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the
power to dismiss her for cause. More importantly, Respondent Corporation had the power to control petitioner with the means
and methods by which the work is to be accomplished.

DOMASIG v. NLRC

Doctrine: Substantial evidence is enough to prove the existence of an employer-employee relationship. Substantial evidence
defined below.

Facts:

Eddie Domasig said he started working for Cata Garments Corporation even when its name was still Cato Garments
Corporation

The management of the said corporation dismissed him when they learned that he was being pirated by a rival
corporation which had an offer he refused.

Domasig went to the Labor Arbiter which ruled in favor of him. Management appealed to the NLRC and the NLRC ruled
in favor of the management.

The Labor Arbiter found the identification card issued by Cata as well as the salary vouchers of Domasig as sufficient
evidence to prove that there was an employer-employee relationship between them.

The NLRC on the other hand, said that the Labor Arbiter acted arbitrarily on ruling in favor of Domasig since Cata was
asserting that Domasig was merely a commissions agent evidenced by the list of sales collections which included the
commissions due, expenses incurred and cash advances received.

Issue: Whether or not there enough/sufficient/substantial evidence as to establish the employee-employer relationship between
Domasig and Cata Garments.
Held: There was enough evidence to establish the employer-employee relationship.

It has long been established that substantial evidence is enough to prove the existence of an employer-employee relationship.
Substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial, for the
appellate court cannot substitute its own judgment or criterion for that of the trial court in determining wherein lies the weight
of evidence or what evidence is entitled to belief.

It was wrong for the NLRC to be not convinced with the uncontested issuance of the identification card which petitioners
submitted to prove that there was evidence of an employer-employee relationship. Also, Domasig was employed for more than
one year and under the law, he is considered to be a regular employee. Domasig was reinstated in this case.

FLORES V. NUESTRO160 SCRA 568YAP, J.

FACTS1.The petitioner, Herminio Flores and his wife, worked for respondent, FortunatoNuestro in his funeral parlor since June
1976 as helper-utility man and asbookkeeper and cahier respectively.2.On October 7, 1980, respondent registered the petitioner
spouses with the SSS, ashis employee. Thereafter, the spouses received an increase in their respectivesalaries.3.On October 30,
1982, Herminio and Nuestro had an altercation, during which thelatter physically assaulted the former.4.Herminio then filed a
complaint for physical injuries against Nuestro.5.As a result of the incident, the Flores family had to leave their quarters at the
funeralparlor and seek protection from the Pilar, Bataan Police.6.Thereafter, petitioners filed illegal dismissal charges against
respondent. On the partof the respondent, he denied the existence of employer-employee relationship, andfurther alleged that
petitioners were the ones to voluntarily abandon their workISSUE

Was there an employee-employer relationship in this case?

HELDYES. There was an employee-employer relationship. That the respondent registered thepetitioners with the Social Security
System is proof that they were indeed his employees.The coverage of the Social Security Law is predicated on the existence of an
employer-employee relationship

SSS Employee Asso. v CA 175 SCRA 686 (July 28, 1989)

Facts: The petitioners went on strike after the SSS failed to act upon the unions demands concerning the implementation of their
CBA. SSS filed before the court action for damages with prayer for writ of preliminary injunction against petitioners for staging an
illegal strike. The court issued a temporary restraining order pending the resolution of the application for preliminary injunction
while petitioners filed a motion to dismiss alleging the courts lack of jurisdiction over the subject matter. Petitioners contend
that the court made reversible error in taking cognizance on the subject matter since the jurisdiction lies on the DOLE or the
National Labor Relations Commission as the case involves a labor dispute. The SSS contends on one hand that the petitioners are
covered by the Civil Service laws, rules and regulation thus have no right to strike. They are not covered by the NLRC or DOLE
therefore the court may enjoin the petitioners from striking.

Issue: Whether or not SSS employers have the right to strike

Whether or not the CA erred in taking jurisdiction over the subject matter.

Held: The Constitutional provisions enshrined on Human Rights and Social Justice provides guarantee among workers with the
right to organize and conduct peaceful concerted activities such as strikes. On one hand, Section 14 of E.O No. 180 provides that
the Civil Service law and rules governing concerted activities and strikes in the government service shall be observed,

subject to any legislation that may be enacted by Congress referring to Memorandum Circular No. 6, s. 1987 of the Civil Service
Commission which states that prior to the enactment by Congress of applicable laws concerning strike by government
employees enjoins under pain of administrative sanctions, all government officers and employees from staging strikes,
demonstrations, mass leaves, walk-outs and other forms of mass action which will result in temporary stoppage or disruption of
public service. Therefore in the absence of any legislation allowing govt. employees to strike they are prohibited from doing so.

In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated as government employees and that the SSS is one
such government-controlled corporation with an original charter, having been created under R.A. No. 1161, its employees are
part of the civil service and are covered by the Civil Service Commissions memorandum prohibiting strikes.
Neither the DOLE nor the NLRC has jurisdiction over the subject matter but instead it is the Public Sector Labor-Management
Council which is not granted by law authority to issue writ of injunction in labor disputes within its jurisdiction thus the resort of
SSS before the general court for the issuance of a writ of injunction to enjoin the strike is appropriate.

Auto Bus Transport vs Bautista

G.R. No. 156367. May 16, 2005

Facts:

Bautista, a driver-conductor of the Autobus transport, was dismissed after his failure to pay an amount demanded by the
company for the repair of the bus damaged in an accident caused by him.

He receives compensation by way of commission per travel.

Bautista complained for illegal dismissal with money claims for nonpayment of 13th month pay and service incentive leave pay
against Autobus.

Auto Bus Defenses:

Bautistas employment was replete with offenses involving reckless imprudence, gross negligence, and dishonesty supported
with copies of letters, memos, irregularity reports, warrants of arrest;

In the exercise of management prerogative, Bautista was terminated only after providing for an opportunity to explain:

Labor Arbiter dismissed the complaint however awarded Bautista his 13th month pay and service incentive leave pay.

Auto Bus appealed. NLRC deleted the 13th month pay award. In the CA, NLRCs decision was affirmed.

Issue: Whether or not respondent is entitled to service incentive leave pay.

Held: Yes.

Under Article 95 of the Labor Code, every employee who has rendered at least one year or service shall be entitled to a yearly
service incentive leave of five days with pay. In Section 1, Rule V, Book III of the Implementing Rules and Regulations of the Labor
Code, the rule shall apply to all, except (d) Field personnel and other employees whose performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed
amount for performing work irrespective of the time consumed in the performance thereof.

Petitioners contention that Bautista is not entitled to service incentive leave because he is paid on a purely commission basis
must fail. The phrase following Field personnel should not be construed as a separate classification of employees but is merely
an amplification of the definition of field personnel defined under the Labor Code.

Bautista neither falls under the category field personnel. As defined, field personnel are those whose performance of service is
unsupervised by the employer, the workplace being away from the principal place of business and whose hours and days of work
cannot be determined with reasonable certainty. Bus companies have ways of determining the hours worked by their drivers and
conductors with reasonable certainty. The courts have taken judicial notice of the following:

Along the routes traveled, there are inspectors assigned at strategic places who board the bus to inspect the passengers, the
punched tickets, and the conductors reports;

There is a mandatory once-a week car barn or shop day, where the bus is regularly checked;

The drivers and conductors must be at specified place and time, as they observe prompt departure and arrival;

At every depot, there is always a dispatcher whose function is to see to it that the bus and crew leaves and arrives at the
estimated proper time.

By these reasons, drivers and conductors are therefore under constant supervision while in the performance of their work.

G.R. No. 79255 January 20, 1992

UNION OF FILIPRO EMPLOYEES (UFE), petitioner,vs.BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION and NESTL
PHILIPPINES, INC. (formerly FILIPRO, INC.), respondents.

Facts:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the National Labor Relations Commission
(NLRC) a petition for claims of its monthly paid employees for holiday pay.

Abitrator Vivar: Filipro to pay its monthly paid employees holiday pay pursuant to Art 94 of Labor Code, subject to exclusions and
limitations in Art 82.

Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the exclusion of salesmen, sales
representatives, truck drivers, merchandisers and medical representatives (hereinafter referred to as sales personnel) from the
award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for overtime, night differential, vacation
and sick leave benefits due to the use of 251 divisor.

Petitioner UFE answered that the award should be made effective from the date of effectivity of the Labor Code, that their sales
personnel are not field personnel and are therefore entitled to holiday pay, and that the use of 251 as divisor is an established
employee benefit which cannot be diminished.

Arbitrator Vivar: On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the holiday pay
award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He adjudged, however, that the companys
sales personnel are field personnel and, as such, are not entitled to holiday pay. He likewise ruled that with the grant of 10 days
holiday pay, the divisor should be changed from 251 to 261 and ordered the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251 days as divisor.

Issues:

1) Whether or not Nestles sales personnel are entitled to holiday pay; and

2) Whether or not, concomitant with the award of holiday pay, the divisor should be changed from 251 to 261 days and whether
or not the previous use of 251 as divisor resulted in overpayment for overtime, night differential, vacation and sick leave pay.

Held:

1. Sales personnel are not entitled to holiday pay.

Under Article 82, field personnel are not entitled to holiday pay. Said article defines field personnel as non-agritultural
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.

The law requires that the actual hours of work in the field be reasonably ascertained. The company has no way of determining
whether or not these sales personnel, even if they report to the office before 8:00 a.m. prior to field work and come back at 4:30
p.m, really spend the hours in between in actual field work.

Moreover, the requirement that actual hours of work in the field cannot be determined with reasonable certainty must be read
in conjunction with Rule IV, Book III of the Implementing Rules which provides:

Rule IV Holidays with Pay

Sec. 1. Coverage This rule shall apply to all employees except:

xxx xxx xxx

(e) Field personnel and other employees whose time and performance is unsupervised by the employer . . . (Emphasis supplied)

Hence, in deciding whether or not an employees actual working hours in the field can be determined with reasonable certainty,
query must be made as to whether or not such employees time and performance is constantly supervised by the employer.
2. The divisor in computing the award of holiday pay should still be 251 days.

While in that case the issue was whether or not salesmen were entitled to overtime pay, the same rationale for their exclusion as
field personnel from holiday pay benefits also applies.

The petitioner union also assails the respondent arbitrators ruling that, concomitant with the award of holiday pay, the divisor
should be changed from 251 to 261 days to include the additional 10 holidays and the employees should reimburse the amounts
overpaid by Filipro due to the use of 251 days divisor.

The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total
number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not
251.

In the petitioners case, its computation of daily ratio since September 1, 1980, is as follows:

monthly rate x 12 months / 251 days

The use of 251 days divisor by respondent Filipro indicates that holiday pay is not yet included in the employees salary,
otherwise the divisor should have been 261.

It must be stressed that the daily rate, assuming there are no intervening salary increases, is a constant figure for the purpose of
computing overtime and night differential pay and commutation of sick and vacation leave credits. Necessarily, the daily rate
should also be the same basis for computing the 10 unpaid holidays.

The respondent arbitrators order to change the divisor from 251 to 261 days would result in a lower daily rate which is violative
of the prohibition on non-diminution of benefits found in Article 100 of the Labor Code. To maintain the same daily rate if the
divisor is adjusted to 261 days, then the dividend, which represents the employees annual salary, should correspondingly be
increased to incorporate the holiday pay.

To illustrate, if prior to the grant of holiday pay, the employees annual salary is P25,100, then dividing such figure by 251 days,
his daily rate is P100.00 After the payment of 10 days holiday pay, his annual salary already includes holiday pay and totals
P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still P100.00. There is thus no merit in respondent Nestles
claim of overpayment of overtime and night differential pay and sick and vacation leave benefits, the computation of which are
all based on the daily rate, since the daily rate is still the same before and after the grant of holiday pay.

SC Decision:

The Court thereby resolves that the grant of holiday pay be effective, not from the date of promulgation of the Chartered Bank
case nor from the date of effectivity of the Labor Code, but from October 23, 1984, the date of promulgation of the IBAA case
(Insular Bank of Asia and America Employees Union (IBAAEU) v. Inciong, where the court declared that Sec 2, Rule IV, Book III of
IRR which excluded monthly paid employees from holiday pay benefits, are null and void).

WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED. The divisor to be used in computing holiday pay shall be
251 days. The holiday pay as above directed shall be computed from October 23, 1984. In all other respects, the order of the
respondent arbitrator is hereby AFFIRMED.

Mercidar Fishing Corporation vs. NLRC & Fermin Agao, Jr.

FACTS:

This case originated from a complaint filed on September 20, 1990 by private respondent FerminAgao, Jr. against petitioner for
illegal dismissal, violation of P.D. No. 851, and non-payment of five days service incentive leave for 1990. Private respondent had
been employed as a "bodegero" or ship's quartermaster on February 12, 1988. He complained that he had been constructively
dismissed by petitioner when the latter refused him assignments aboard its boats after he had reported to work on May 28,
1990. Private respondent alleged that he had been sick and thus allowed to go on leave without pay for one month from April 28,
1990 but that when he reported to work at the end of such period with a health clearance, he was told to come back another
time as he could not be reinstated immediately. Thereafter, petitioner refused to give him work. For this reason, private
respondent asked for a certificate of employment from petitioner on September 6, 1990. However, when he came back for the
certificate on September 10, petitioner refused to issue the certificate unless he submitted his resignation. Since private
respondent refused to submit such letter unless he was given separation pay, petitioner prevented him from entering the
premises. Petitioner, on the other hand, alleged that it was private respondent who actually abandoned his work.

ISSUE:

Whether or not the fishing crew members are considered field personnel as classified in Art. 82 of the Labor Code.

HELD:

Art. 82 of the Labor Code provides: The provisions of this title [Working Conditions and Rest Periods] shall apply to employees in
all establishments and undertakings whether for profit or not, but not to government employees, field personnel, members of
the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another,
and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. "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. In contrast, in the
case at bar, during the entire course of their fishing voyage, fishermen employed by petitioner have no choice but to remain on
board its vessel. Although they perform non-agricultural work away from petitioner's business offices, the fact remains that
throughout the duration of their work they are under the effective control and supervision of petitioner through the vessel's
patron or master.

PAN AMERICAN WORLD AIRWAYS SYSTEM V. PAN AMERICAN EMPLOYEESASSOCIATION1 SCRA 527REYES, JBL

FACTS1.Petitioner herein claims that the one hour meal period should not be considered asovertime work, because the evidence
showed that complainants could restcompletely, and were not in any manner under the control of the company during
thatperiod.2.The court below found, on the contrary, that during the so-called meal period, themechanics were required to stand
by for emergency work; that if they happened notto be available when called, they were reprimanded by the lead man; that as in
fact ithappened on many occasions, the mechanics had been called from their meals ortold to hurry up eating to perform work
during this period.ISSUE

Whether or not the 1 hour meal period of the mechanics is considered working time.

HELDYes. The Industrial Courts order for permanent adoption of a straight 8-hour shift includingthe meal period was but a
consequence of its finding that the meal hour was not one ofcomplete rest but was actually a work hour, since for its duration,
the laborers had to be onready call.