Asian Steel vs WCC

Issues: Whether there is an ee-er relationshiop created when the ee was hired by a person not authorized by the
by-law to hire but by the manager of the factory where such ee is rendering supervision of such manager

Ruling: Yes. Employee rendered service and service was accepted (by the manager) by the company even if not
authorized by the authorized person. It does not have to be the employer to hire the employee as long as the
company accepts the service of the employer. Need not to be in writing.

The Commission found that Yu Kong Tiong was the president of the corporation and Sy Te the manager; but Yu
Kong Tiong was permitted actually to manage its affairs, (it being a "family" corporation) by remote control from
his office in Manila thru Kim who was "in charge" of the factory in Caloocan. It also declared that Kim was allowed
by Yu Kong Tiong to employ Carbajosa as apprentice.

it is undeniable that as president and manager Yu Kong Tiong could legally employ, by himself, manual laborers to
work in the factory[2]. And there is nothing to prevent him from employing Carbajosa, thru his agent Kim, as the
latter did. In fact it may even be held that in default of proof establishing Yu Kong Tiong's assent to the
employment, inasmuch as Kim the person actually in charge of the factory represented to Carbajosa that he was
authorized by the manager to engage his (Carbajosa's) services, there was apparent authority of Kim, sufficiently
ample to create the relationship of employer and employee for the purposes of the Workmen's Compensation
Law.

It may be stated as a general rule that an agent, who with authority express, implied, apparent or actual, employs
help for the benefit of his principal's business, thereby creates the relationship of employer and employee
between such help and his principal."

Needless to say, the existence of employer-employee relationship is the jurisdictional foundation without which an
indemnity is unauthorized. It is often difficult of determination, because purposely made so by employers bent on
evading liability under the Compensation Acts. Hence, if the object of the law is to be accomplished with a liberal
construction[3], the creation of the relationship should not be adjudged strictly in accordance with technical legal
rules, but rather according to the actualities and realities of industrial or business practice. A laborer is told to work
for the establishment by the person-in-charge, who in turn represented he had consulted with the manager. If the
by-laws of the corporation had provided that no laborer may be hired unless with the written consent of the board
of directors, would it be consonant with justice to deny such laborer compensation for injuries, upon the ground of
lack of written authority? If so, a loophole has thereby been created in the Workmen's Compensation Law. That is
perhaps the reason why apparent authority has been considered enough, what with the principles of estoppel
lending persuasive support.

Four-Fold Test // Managerial Prerogatives//Test to determine whether the person is an employer or not 1.
Selection and Engagement of the employee/ right to set qualifications (was A hired by Asian Steel= Yes)

2. Payment of Wages/Salaries (duty) OR right to determine how much to be paid-> (does A have the power to
determine how much to be paid to B )// limitation: minimum wage

3. Power to Dismiss-> (Does Asian Steel have the power to terminate the services of Carbajosa)
4. Power to Control -> (Does Asian Steel have the power to determine what Carbajosa should do and how
Carbajosa should do it)// WHAT to do and HOW to do

Iloilo vs fabrigar

Issue: May Fabrigar be considered as an employee of the Iloilo chinese school where he rendered his services
under the supervision of the said school but he was hired and paid by the Iloilo chamber of commerce as a
financial assistance to the said school?

Ruling: yes.

It is claimed that actually the deceased was not an employee of the petitioner, but by the Iloilo Chinese Chamber
of Commerce which was the one that furnished the janitor service in the premises of its buildings, including the
part thereof occupied by the petitioner; that the Chamber of Commerce paid the salaries of janitors, including the
deceased; that the petitioner could not afford to pay rentals of its premises and janitor due to limited finances
depended largely on funds raised among its Board of Directors, the Chinese Chamber of Commerce and Chinese
nationals who helped the school. In other words, it is pretended that the deceased was not an employee of the
school but of the Chinese Chamber of Commerce which should be the one responsible for the compensation of the
deceased. On one hand, according to the Commission, there is substantial proof to the effect that Fabrigar was
employed by and rendered service for the petitioner and was an employee within the purview of the Workmen's
Compensation Law. On the other hand, the most important test of employer-employee relation is the power to
control the employee's conduct. The records disclose that the person in charge (encargado) of the respondent
school supervised the deceased in his work and had control over the manner he performed the same.

Sevilla vs CA:

Issue: is Sevilla an employee of the tourist world services when she did not receive any salary and she also share
for the expenses of TWS and there is the understanding between them that Sevilla would be given the title of
branch manager for appearance's sake only

Ruling: The circumstances in the case is what will determine if there exists an ee-er relationship regardless of the
agreement of the parties/what is stipulated on the contract.

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." 10Subsequently, 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. 11

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 solidum as 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, 12 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.

The fact that Sevilla had been designated 'branch manager" does not make her, ergo, Tourist World's employee. As
we said, employment is determined by the right-of-control test and certain economic parameters. But titles are
weak indicators.

The parties may be bound by some other relation but not employment.

Makati vs Haberdashery

Issue: are the respondents, paid on a piece rate basis, considered as an employees of the habersashery and thus
they are entitled to money claims.

Ruling: Yes. As long as the control test is present, it would establish an ee-er relationship. The manner of
compensating does not determine existence of the ee-er rel.

The first issue which is the pivotal issue in this case is resolved in favor of private respondents. We have
repeatedly held in countless decisions that the test of employer-employee relationship is four-fold: (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 employee's conduct. It is the so-called "control test" that is the most important element. [8]

This simply means the determination of 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 method by which the same is to be
accomplished.[9]

The facts at bar indubitably reveal that the most important requisite of control is present. As gleaned from the
operations of petitioner, when a customer enters into a contract with the haberdashery or its proprietor, the
latter directs an employee who may be a tailor, pattern maker, sewer or "plantsadora" to take the customer's
measurements, and to sew the pants, coat or shirt as specified by the customer. Supervision is actively manifested
in all these aspects -- the manner and quality of cutting, sewing and ironing.

Furthermore, the presence of control is immediately evident in this memorandum issued by Assistant
Manager Cecilio B. Inocencio, Jr. dated May 30, 1981addressed to Topper's Makati Tailors which reads in part:

"4. Effective immediately, new procedures shall be followed:

"A. To follow instruction and orders from the undersigned, Roger Valderrama, Ruben Delos Reyes
and Ofel Bautista. Other than this person (sic) must ask permission to the above mentioned before giving orders
or instructions to the tailors.

"B. Before accepting the job orders tailors must check the materials, job orders, due dates and other things to
maximize the efficiency of our production. The materials should be check (sic) if it is match (sic) with the sample,
together with the number of the job order.

"C. Effective immediately all job orders must be finished one day before the due date. This can be done by
proper scheduling of job order and if you will cooperate with your supervisors. If you have many due dates for
certain day, advise Ruben or Ofel at once so that they can make necessary adjustment on due dates.

"D. Alteration - Before accepting alteration person attending on customs (sic) must ask first or must advise the
tailors regarding the due dates so that we can eliminate what we call 'Bitin'.
"E. If there is any problem regarding supervisors or co-tailor inside our shop, consult with me at once settle the
problem. Fighting inside the shop is strictly prohibited. Any tailor violating this memorandum will be subject to
disciplinary action.

"For strict compliance."[10]

From this memorandum alone, it is evident that petitioner has reserved the right to control its employees not only
as to the result but also the means and methods by which the same are to be accomplished. That
private respondents are regularemployees is further proven by the fact that they have to report for work regularly
from9:30 a.m. to 6:00 or 7:00 p.m. and are paid an additional allowance of P3.00 daily if they report for work
before 9:30 a.m. and which is forfeited when they arrive at or after9:30 a.m.[11]

Since private respondents are regular employees, necessarily the argument that they are independent contractors
must fail. As established in the preceding paragraphs, private respondents did not exercise independence in their
own methods, but on the contrary were subject to the control of petitioners from the beginning of their tasks to
their completion. Unlike independent contractors who generally rely on their own resources, the equipment,
tools, accessories and paraphernalia used by private respondents are supplied and owned by petitioners. Private
respondents are totally dependent on petitioners in all these aspects.

Labor Only Contractor v. Independent Contractor (importance: to determine the er-ee relationship)

Independent Contractor (Indicators)// Employer 1. Independent from the principal 2. Tools provided by the
contractor 3. They supervise employees

Labor Only// Agent

Liability

Independent Contractor Contractor // Principal (Subsidiary Only)

Labor Only Contractor is always liable, the difference is the liability of the principal Recourse to the principal
*(Philippine Education Company Inc. v. Union of Philippines) Er-ee relationship involves trust and confidence

Hijos vs NLRC

Issue: whether PIER 8 A&S as labor only contractor and Escao, the principal employer of the stevedores has an
ee-er rel existing with the latter and thus entitled to pay them for money claims and reinstatement.

Ruling: It is firmly settled that the existence or non-existence of the employer-employee relationship is commonly
to be determined by examination of certain factors or aspects of that relationship. These include: (a) the manner
of selection and engagement of the putative employee; (b) the mode of payment of wages; (c) the presence or
absence of the power of dismissal; and (d) the presence or absence of a power to control the putative employee's
conduct. 5

The Court is unable to agree with the conclusion reached by the Labor Arbiter, particularly that portion where the
Labor Arbiter supposed stevedoring to be an indispensable part of the business of Escao. Escao is a corporation
engaged in inter-island shipping business, being the operator of the Escao Shipping Lines. It was not alleged, nor
has it been shown, that Escao or any other shipping company is also engaged in Arrastre and stevedoring services.
Stevedoring is not ordinarily included in the business of transporting goods, it (stevedoring) being a special kind of
service which involves the loading unloading of cargo on or from a vessel on port. It consists of the handling of
cargo from the hold of the ship to the dock, in case of pier-side unloading, or to a barge, in case of unloading at
sea. The loading on a ship of outgoing cargo is also part of stevedoring work. 8 Arrastre, upon the other hand,
involves the handling of cargo deposited on the wharf or between the establishment of the consignee or shipper
and the ships tackle. 9 Considering that a shipping company is not normally or customarily engaged in stevedoring
and arrastre activities either for itself or other vessels, it contracts with other companies offering those services.
The employees, however, of the stevedoring and/or arrastre company should not be deemed the employees of the
shipping company, in the absence of any showing, that the arrastre and/or stevedoring company in fact acted as
an agent only of the shipping company. No such showing was made in this case.

Villuga vs nlrc

Issue: whether the exclusion of Villuga from the benefits claimed under Article 87 (overtime pay and premium pay
for holiday and rest day work), Article 94, (holiday pay), and Article 95 (service incentive leave pay) of the Labor
Code, on the ground that he is a managerial employee will suffice

Ruling: Under Rule 1, Section 2(c), Book III of the Implementing Rules of Labor Code, to be a member of a
managerial staff, the following elements must concur or co-exist, to wit: (1) that his primary duty consists of the
performance of work directly related to management policies; (2) that he customarily and regularly exercises
discretion and independent judgment in the performance of his functions; (3) that he regularly and directly assists
in the management of the establishment; and (4) that he does not devote his twenty per cent of his time to work
other than those described above.

Applying the above criteria to petitioner Elias Villuga's case, it is undisputed that his primary work or duty is to cut
or prepare patterns for items to be sewn, not to lay down or implement any of the management policies, as there
is a manager and an assistant manager who perform said functions. It is true that in the absence of the manager
the assistant manager, he distributes and assigns work to employees but such duty, though involving discretion, is
occasional and not regular or customary. He had also the authority to order the repair or resewing of defective
item but such authority is part and parcel of his function as cutter to see to it that the items cut are sewn correctly
lest the defective nature of the workmanship be attributed to his "poor cutting." Elias Villuga does not participate
in policy-making. Rather, the functions of his position involve execution of approved and established policies.
In Franklin Baker Company of the Philippines v. Trajano, 5 it was held that employees who do not participate in
policy-making but are given ready policies to execute and standard practices to observe are not managerial
employees. The test of "supervisory or managerial status" depends on whether a person possesses authority that
is not merely routinary or clerical in nature but one that requires use of independent judgment. In other words,
the functions of the position are not managerial in nature if they only execute approved and established policies
leaving little or no discretion at all whether to implement said policies or not. 6

Consequently, the exclusion of Villuga from the benefits claimed under Article 87 (overtime pay and premium pay
for holiday and rest day work), Article 94, (holiday pay), and Article 95 (service incentive leave pay) of the Labor
Code, on the ground that he is a managerial employee is unwarranted. He is definitely a rank and file employee
hired to perform the work of the cutter and not hired to perform supervisory or managerial functions. The fact
that he is uniformly paid by the month does not exclude him from the benefits of holiday pay as held in the case
of Insular Bank of America Employees Union v. Inciong. 7 He should therefore be paid in addition to the 13th month
pay, his overtime pay, holiday pay, premium pay for holiday and rest day, and service incentive leave pay.

As to the dismissal of the charge for unfair labor practices of private respondent consisting of termination of
employment of petitioners and acts of discrimination against members of the labor union, the respondent
Commission correctly held the absence of evidence that Mr. Zapanta was aware of petitioners' alleged union
membership on February 22, 1978 as the notice of union existence in the establishment with proposal for
recognition and collective bargaining negotiation was received by management only an March 3, 1978. Indeed,
self-serving allegations without concrete proof that the private respondent knew of their membership in the union
and accordingly reacted against their membership do not suffice.

Nor is private respondent's claim that petitioner Villuga abandoned his work acceptable. For abandonment to
constitute a valid cause for dismissal, there must be a deliberate and unjustified refusal of the employee to resume
his employment. Mere absence is not sufficient, it must be accompanied by overt acts unerringly pointing to the
fact that the employee simply does not want to work anymore. 8 At any rate, dismissal of an employee due to his
prolonged absence without leave by reason of illness duly established by the presentation of a medical certificate
is not justified. 9 In the case at bar, however, considering that petitioner Villuga absented himself for four (4) days
without leave and without submitting a medical certificate to support his claim of illness, the imposition of a
sanction is justified, but surely, not dismissal, in the light of the fact that this is petitioner's first offense. In lieu of
reinstatement, petitioner Villuga should be paid separation pay where reinstatement can no longer be effected in
view of the long passage of time or because of the realities of the situation. 10 But petitioner should not be granted
backwages in addition to reinstatement as the same is not just and equitable under the circumstances considering
that he was not entirely free from blame. 11

As to the other eleven petitioners, there is no clear showing that they were dismissed because the circumstances
surrounding their dismissal were not even alleged. However, we disagree with the finding of respondent
Commission that the eleven petitioners are independent contractors.

For an employer-employee relationship to exist, the following elements are generally considered: "(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 employee's conduct." 12

Noting that the herein petitioners were oftentimes allowed to perform their work at home and were paid wages
on a piece-rate basis, the respondent Commission apparently found the second and fourth elements lacking and
ruled that "there is no employer-employee relationship, for it is clear that respondents are interested only in the
result and not in the means and manner and how the result is obtained."

Respondent Commission is in error. The mere fact that petitioners were paid on a piece-rate basis is no argument
that herein petitioners were not employees. The term "wage" has been 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. . . ." The facts of this case indicate that payment by the piece is just a method of compensation and does not
define the essence of the
relation. 13 The petitioners were allowed to perform their work at home does not likewise imply absence of control
and supervision. The control test calls merely for the existence of a right to control the manner of doing the work,
not the actual exercise of the right. 14

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." 15Considering that petitioners who are either sewers, repairmen or ironer, have been in the employ of
private respondent as early as 1972 or at the latest in 1976, faithfully rendering services which are desirable or
necessary for the business of private respondent, and observing management's approved standards set for their
respective lines of work as well as the customers' specifications, petitioners should be considered employees, not
independent contractors.

Independent contractors are those who exercise independent employment, contracting to do a piece of work
according to their own methods and without being subjected to control of their employer except as to the result of
their work. By the nature of the different phases of work in a tailoring shop where the customers' specifications
must be followed to the letter, it is inconceivable that the workers therein would not be subjected to control.
In Rosario Brothers, Inc. v. Ople, 16 this Court ruled that tailors and similar workers hired in the tailoring
department, although paid weekly wages on piece work basis, are employees not independent contractors.
Accordingly, as regular employees, paid on a piece-rate basis, petitioners are not entitled to overtime pay, holiday
pay, premium pay for holiday/rest day and service incentive leave pay. Their claim for separation pay should also
be defined for lack of evidence that they were in fact dismissed by private respondent. They should be paid,
however, their 13th month pay under P.D. 851, since they are employees not independent contractors.

WHEREFORE, in view of the foregoing reasons, the assailed decision of respondent National Labor Relations
Commission is hereby MODIFIED by awarding

(a) in favor of petitioner Villuga, overtime pay, holiday pay, premium pay for holiday and rest day, service incentive
leave pay and separation pay, in addition to his 13th month pay; and

(b) in favor of the rest of the petitioners, their respective 13th month pay.

The case is hereby REMANDED to the National Labor Relations Commission for the computation of the claims
herein-above mentioned.

Jimenez vs NLRC

Issue: whether the respondent Fredelito Juanatas was not an employee of the firm but was merely a helper of his
father Pedro and therefore no ee-er rel exists

Ruling: Fredelito Juanatas was not an employee.

ON THE COMMISSION: one who pleads payment has the burden of proving it. 9 Even where the plaintiff must
allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on
the plaintiff to prove non-payment.10 The debtor has the burden of showing with legal certainty that the obligation
has been discharged by payment.11
When the existence of a debt is fully established by the evidence contained in the record, the burden of proving
that it has been extinguished by payment devolves upon the debtor who offers such a defense to the claim of the
creditor.12 Where the debtor introduces some evidence of payment, the burden of going forward with the
evidence - as distinct from the general burden of proof - shifts to the creditor, who is then under a duty of
producing some evidence to show non-payment.13
for failure to present evidence to prove payment, petitioners defaulted in their defense and in effect admitted the
allegations of private respondents
We have consistently ruled that in determining the existence of an employer-employee relationship, the elements
that are generally considered are the following: (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, 18 with the
control test assuming primacy in the overall consideration.
In the case at bar, the aforementioned elements are not present. The agreement was between petitioner JJs
Trucking and respondent Pedro Juanatas. The hiring of a helper was discretionary on the part of Pedro. Under their
contract, should he employ a helper, he would be responsible for the latters compensation. With or without a
helper, respondent Pedro Juanatas was entitled to the same percentage of commission. Respondent Fredelito
Juanatas was hired by his father, Pedro, and the compensation he received was paid by his father out of the latters
commission. Further, Fredelito was not subject to the control and supervision of and dismissal by petitioners but of
and by his father.

MAM VS NLRC
ISSUE: won Balbastro is an employee of mam realty even if the latter alleged that he is only a service contractor,
subject to a monthly fee and Under the agreement, Balbastro was merely made to open and close on a daily basis
the water supply system of the different phases of the subdivision in accordance with its water rationing scheme.
He worked for only a maximum period of three hours a day, and he made use of his free time by offering plumbing
services to the residents of the subdivision. He was not at all subject to the control or supervision of MAM for, in
fact, his work could so also be done by another.

Ruling: Yes. Once again, the matter of ascertaining the existence of an employer-employee relationship is raised.
Repeatedly, we have said that this factual issue is determined by:

(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 with respect to the result of the work to be
done and to the means and methods by which the work is to be accomplished.

We see no grave abuse of discretion on the part of NLRC in finding a full satisfaction, in the case at bench, of
the criteria to establish that employer-employee relationship. The power of control, the most important feature of
that relationship and, here, a point of controversy, refers merely to the existence of the power and not to the
actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the
employee; it is enough that the former has a right to wield the power. 4 It is hard to accede to the contention of
petitioners that private respondent should be considered totally free from such control merely because the work
could equally and easily be done either by Mercado or by the subdivision's security guard. Not without any
significance is that private respondent's employment with MAM has been registered by petitioners with the Social
Security System.

in labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation
for the termination of employment of employees done with malice or in bad faith. 14

In the case at Bench, there is nothing substantial on record that can justify, prescinding from the foregoing,
petitioner Centeno's solidary liability with the corporation.
Insular vs NLRC
Issue: whether, as Basiao asserts, he had become the Company's employee by virtue of the contract entered into
by the parties thereby placing his claim for unpaid commissions, 8 or, contrarily, as the Company would have it,
that under said contract Basiao's status was that of an independent contractor
Ruling: Basio was not an employee. Basiao was not an employee of the petitioner, but a commission agent, an
independent contractor.
not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation
to the services rendered may be accorded the effect of establishing an employer-employee relationship between
them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction
between an employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare
contract of service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever
in his performance of the engagement.
The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the
business of insurance, and is on that account subject to regulation by the State with respect, not only to the
relations between insurer and insured but also to the internal affairs of the insurance company. 12 Rules and
regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the
Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of
rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it
requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be
insured, subject insurance applications to processing and approval by the Company, and also reserve to the
Company the determination of the premiums to be paid and the schedules of payment. None of these really
invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time
and convenience, hence cannot justifiably be said to establish an employer-employee relationship between him
and the company.
The respondents limit themselves to pointing out that Basiao's contract with the Company bound him to observe
and conform to such rules and regulations as the latter might from time to time prescribe. No showing has been
made that any such rules or regulations were in fact promulgated, much less that any rules existed or were issued
which effectively controlled or restricted his choice of methods or the methods themselves of selling
insurance. Absent such showing, the Court will not speculate that any exceptions or qualifications were imposed
on the express provision of the contract leaving Basiao "... free to exercise his own judgment as to the time, place
and means of soliciting insurance."

Superior vs balagsay

Issue: won the DOLE has the power to determine th rel. of an ee-er

at any rate, such argument lacks merit. The DOLE clearly acted within its authority when it determined the
existence of an employer-employee relationship between the petitioner and respondents as it falls within the
purview of its visitorial and enforcement power under Article 128(b) of the Labor Code, which provides:

Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the
relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of
this Code and other labor legislation based on the findings of labor employment and enforcement officers or
industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representative
shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases
where the employer contests the findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of inspection.
In Peoples Broadcasting (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor and
Employment,20rll the Court stated that it can be assumed that the DOLE in the exercise of its visitorial and
enforcement power somehow has to make a determination of the existence of an employer-employee
relationship. Such determination, however, is merely preliminary, incidental and collateral to the DOLEs primary
function of enforcing labor standards provisions. Such power was further explained recently by the Court in its
Resolution21rll dated March 6, 2012 issued in Peoples Broadcasting, viz:

The determination of the existence of an employer-employee relationship by the DOLE must be respected. The
expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the
alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the
referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the
absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the
DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully
refute the existence of an employer-employee relationship.

xxxx

x x x The power of the DOLE to determine the existence of an employer-employee relationship need not
necessarily result in an affirmative finding. The DOLE may well make the determination that no employer-
employee relationship exists, thus divesting itself of jurisdiction over the case. It must not be precluded from being
able to reach its own conclusions, not by the parties, and certainly not by this Court.

Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a
determination as to the existence of an employer-employee relationship in the exercise of its visitorial and
enforcement power, subject to judicial review, not review by the NLRC.22rll

Also, the existence of an employer-employee relationship is ultimately a question of fact. 23rll The
determination made in this case by the DOLE, albeit provisional, and as affirmed by the Secretary of DOLE and the
CA is beyond the ambit of a petition for review on certiorari.24rll

WON Lancer is not an indep. Contractor but a labor-only contractor and therefore, an indirect employer
of respondent and liable to the unpaid claims

At the time of the respondents employment in 1998, the applicable regulation was DOLE Department Order No.
10, Series of 1997.25rll Under said Department Order, labor-only contracting was defined as follows:

Sec. 9. Labor-only contracting. (a) Any person who undertakes to supply workers to an employer shall be deemed
to be engaged in labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises
and other materials; and

(2) The workers recruited and placed by such persons are performing activities which are directly related to the
principal business or operations of the employer in which workers are habitually employed.

Labor-only contracting is prohibited and the person acting as contractor shall be considered merely as an agent or
intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the
latter were directly employed by him.26rll
According to the CA, the totality of the facts and surrounding circumstances of this case point to such conclusion.
The Court agrees.

The ratio of Lancers authorized capital stock of P 400,000.00 as against its subscribed and paid-up capital stock
of P 25,000.00 shows the inadequacy of its capital investment necessary to maintain its day-to-day operations. And
while the Court does not set an absolute figure for what it considers substantial capital for an independent job
contractor, it measures the same against the type of work which the contractor is obligated to perform for the
principal.27rll Moreover, the nature of respondents work was directly related to the petitioners business. The
marked disparity between the petitioners actual capitalization (P 25,000.00) and the resources needed to maintain
its business, i.e., "to establish, operate and manage a personnel service company which will conduct and
undertake services for the use of offices, stores, commercial and industrial services of all kinds," supports the
finding that Lancer was, indeed, a labor-only contractor. Aside from these is the undisputed fact that the petitioner
failed to produce any written service contract that might serve as proof of its alleged agreement with
Lancer.28rll

Finally, a finding that a contractor is a "labor-only" contractor is equivalent to declaring that there is an employer-
employee relationship between the principal and the employees of the supposed contractor, and the "labor only"
contractor is considered as a mere agent of the principal, the real employer. 29rll The former becomes solidarily
liable for all the rightful claims of the employees.30rll The petitioner therefore, being the principal employer and
Lancer, being the labor-only contractor, are solidarily liable for respondents unpaid money claims.

Yes, Lancer is engaged in labor-only contracting. Hence, Superior is the indirect employer of the respondents.The
subscribed and paid-up capital stock of P 25,000.00 of Lancer shows the inadequacy of its capital investment
necessary to maintain its day-to-day operations. The marked disparity between the petitioners actual
capitalization and the resources needed to maintain its business supports the finding that Lancer was a labor-only
contractor.
When a contractor is found to be a "labor-only" contractor it is equivalent to declaring that there is an employer-
employee relationship between the principal and the employees of the supposed contractor, and the "labor only"
contractor is considered as a mere agent of the principal, the real employer. The former becomes solidarily liable
for all the rightful claims of the employees. The petitioner therefore, being the principal employer and Lancer,
being the labor-only contractor, are solidarily liable for respondents unpaid money claims.

Phil ed. Vs union

Issue: The question for determination is whether the acquittal of an employee, specially on the ground of
reasonable doubt, in a criminal case for theft involving articles and merchandise belonging to his employer, entitles
said employee to reinstatement.

Ruling: The relation of employer and employee, specially where the employee has access to the employers
property in the form of articles and merchandise for sale, necessarily involves trust and confidence. If said
merchandise are lost and said loss is reasonably attributed to said employee, and he is charged with theft, even if
he is acquitted of the charge on reasonable doubt, when the employer has lost its confidence in him, it would be
highly unfair to require said employer to continue employing him or to reinstate him, for in that case, the former
might find it necessary for its protection to employ another person to watch and keep an eye on him. In the
present case, Carpio was refused reinstatement not because of any union affiliation or activity or because the
company has been guilty of any unfair labor practice. As already stated, Carpio was convicted in the Municipal
Court and although he was acquitted on reasonable doubt in the Court of First Instance, the company had ample
reason to distrust him. Under the circumstances, we cannot in conscience require the company to reemploy or
reinstate him.
 The evidence required by law to establish guilt and to warrant conviction in a criminal case substantially differs
from the evidence necessary to establish responsibility or liability in a civil or non-criminal case. The difference is in
the amount and weight of evidence and also in degree. In a criminal case, the evidence or proof must be beyond
reasonable doubt while in a civil or non-criminal case it is merely preponderance of evidence. In further support of
this principle we may refer to Art. 29 of the New Civil Code (Rep. Act 386) which provides that when the accused in
a criminal case is acquitted on the ground of reasonable doubt a civil action for damages for the same act or
omission may be instituted where only a preponderance of evidence is necessary to establish liability. From all this
it is clear that the Court of Industrial Relations was justified in denying the petition of Rivas and Tolentino for
reinstatement in the cement company, because of their illegal possession of hand grenades intended by them for
purposes of sabotage in connection with the strike on March 16, 1952."cralaw virtua1aw librar

Pacific mills vs Alonzo

Issue: won an employee who appears to be of violent temper, caused trouble during office hours and even defied
his superiors as they tried to pacify him, should be rewarded with reemployment and back wages.

Ruling: NO. to do so, It may encourage him to do even worse and will render a mockery of the rules of discipline
that employees are required to observe.

While it is true that Pacific Mills, Inc. had not complied with the requirements of due process( imposed a sanction
for its failure to give a formal notice and conduct an investigation as required by law before dismissing
(respondent) from employment) prior to removing Zenaida Alonzo from employment, it is also true that
subsequently, in the proceedings before the Labor Arbiter in which Zenaida Alonzo had of course taken active part,
it had succeeded in satisfactorily proving the commission by Zenaida of many violations of company rules and
regulations justifying termination of her employment. Under the circumstances, it is clear that, as the Solicitor
General has pointed out, the continuance in the service of the latter is patently inimical to her employers interests
and that, citing San Miguel Corporation vs. NLRC,[11] the law, in protecting the rights of the laborer authorizes
neither oppression nor self-destruction of the employer. And it was oppressive and unjust in the premises to
require reinstatement of the employee.

Pal vs NLRC

On March 15, 1985, the Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately implemented, and some employees were forthwith
subjected to the disciplinary measures embodied therein. PALEA alleged that copies of the Code had
been circulated in limited numbers; that being penal in nature the Code must conform with the requirements of
sufficient publication, and that the Code was arbitrary, oppressive, and prejudicial to the rights of the employees.
It prayed that implementation of the Code
beh e l d i n a b e y a n c e ; t h a t P A L s h o u l d d i s c u s s t h e s u b s t a n c e o f t h e C o d e w i t h P A L E A ; t
h a t e m p l o y e e s dismissed under the Code be reinstated and their cases subjected to further
hearing; and that PAL be declared guilty of unfair labor practice and be ordered to pay damages

Issue:Whether or not PAL is guilty of unfair labor practice?

HELD

Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of
matters affecting their rights. Thus, even before Article 211 of the Labor Code (P.D. 442) was amended by
Republic Act No. 6715, it was already declared a policy of the State: "(d) To promote the
enlightenment of workers concerning their rights and obligations . . .as employees." This was, of course, amplified
by Republic Act No. 6715 when it decreed the "participation of workers in decision and policymaking processes
affecting their rights, duties and welfare." PAL's position that it cannot be saddled with the "obligation" of sharing
management prerogatives as during the formulation of the Code, Republic ActNo. 6715 had not yet been
enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be
sustained. While such "obligation" was not yet founded in law
w h e n t h e C o d e w a s f o r m u l a t e d , t h e attainment of a harmonious labor-management relationship and
the then already existing state policy
of e n l i g h t e n i n g w o r k e r s c o n c e r n i n g t h e i r r i g h t s a s e m p l o y e e s d e m a n d n o l e s s t h a n t h
e o b s e r v a n c e o f transparency in managerial moves affecting employees' rights.

Soriano vs offshore

Issue: Petitioner submits that public respondent (NLRC and offshore shipping) committed grave abuse of discretion
and/or acted without or in excess of jurisdiction by disregarding the alteration of the employment contract made
by private respondent. Petitioner claims that the alteration by private respondent of his salary and overtime rate
which is evidenced by the Crew Agreement and the exit pass constitutes a violation of Article 34 of the Labor Code
of the Philippines.

On the other hand, public respondent through the Solicitor General, contends that, as explained by the
POEA: "Although the employment contract seems to have corrections, it is in conformity with the Wage
Scale submitted to said office

Ruling: Apparently, petitioner emphasizes the materiality of the alleged unilateral alteration of the employment
contract as this is proscribed by the Labor Code while public respondent finds the same to be merely innocuous.
We take a closer look at the effects of these alterations upon petitioner's right to demand for his differential,
overtime pay and refund of his return airfare to Manila.

A careful examination of the records shows that there is in fact no alteration made in the Crew Agreement 8 or in
the Exit Pass. 9 As the original data appear, the figures US$800.00 fall under the column salary, while the word
"inclusive" is indicated under the column overtime rate. With the supposed alterations, the figures US$560.00
were handwritten above the figures US$800.00 while the figures US$240.00 were also written above the word
"inclusive".

As clearly explained by respondent NLRC, the correction was made only to specify the salary and the overtime pay
to which petitioner is entitled under the contract. It was a mere breakdown of the total amount into US$560.00 as
basic wage and US$240.00 as overtime pay. Otherwise stated, with or without the amendments the total
emolument that petitioner would receive under the agreement as approved by the POEA is US$800.00 monthly
with wage differentials or overtime pay included. 10

Moreover, the presence of petitioner's signature after said items renders improbable the possibility that petitioner
could have misunderstood the amount of compensation he will be receiving under the contract. Nor has petitioner
advanced any explanation for statements contrary or inconsistent with what appears in the records. Thus, he
claimed: [a] that private respondent extended the duration of the employment contract indefinitely, 11 but
admitted in his Reply that his employment contract was extended for another six (6) months by agreement
between private respondent and himself: 12 [b] that when petitioner demanded for his overtime pay, respondents
repatriated him 13 which again was discarded in his reply stating that he himself requested for his voluntary
repatriation because of the bad faith and insincerity of private respondent; 14 [c] that he was required to post a
cash bond in the amount of P20,000.00 but it was found that he deposited only the total amount of P15,000.00;
[d] that his salary for November 1985 was not paid when in truth and in fact it was petitioner who owes private
respondent US$285.83 for cash advances 15 and on November 27, 1985 the final pay slip was executed and
signed; 16 and [e] that he finished his contract when on the contrary, despite proddings that he continue working
until the renewed contract has expired, he adamantly insisted on his termination.

Verily, it is quite apparent that the whole conflict centers on the failure of respondent company to give the
petitioner the desired promotion which appears to be improbable at the moment because the M/V Knut Provider
continues to be laid off at Limassol for lack of charterers. 17

It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the very purpose for
which they were passed. This Court has in many cases involving the construction of statutes always cautioned
against narrowly interpreting a statute as to defeat the purpose of the legislator and stressed that it is of the
essence of judicial duty to construe statutes so as to avoid such a deplorable result (of injustice or absurdity) and
that therefore "a literal interpretation is to be rejected if it would be unjust or lead to absurd results." 18

There is no dispute that an alteration of the employment contract without the approval of the Department of
Labor is a serious violation of law.

Specifically, the law provides:

Article 34 paragraph (i) of the Labor Code reads:

Prohibited Practices. It shall be unlawful for any individual, entity, licensee, or holder of
authority:

xxxx

(i) To substitute or alter employment contracts approved and verified by the Department of
Labor from the time of actual signing thereof by the parties up to and including the period of
expiration of the same without the approval of the Department of Labor.

In the case at bar, both the Labor Arbiter and the National Labor Relations Commission correctly analyzed the
questioned annotations as not constituting an alteration of the original employment contract but only a
clarification thereof which by no stretch of the imagination can be considered a violation of the above-quoted law.
Under similar circumstances, this Court ruled that as a general proposition, exceptions from the coverage of a
statute are strictly construed. But such construction nevertheless must be at all times reasonable, sensible and fair.
Hence, to rule out from the exemption amendments set forth, although they did not materially change the terms
and conditions of the original letter of credit, was held to be unreasonable and unjust, and not in accord with the
declared purpose of the Margin Law. 19

The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both parties. In the instant
case, the alleged amendment served to clarify what was agreed upon by the parties and approved by the
Department of Labor. To rule otherwise would go beyond the bounds of reason and justice.

As recently laid down by this Court, the rule that there should be concern, sympathy and solicitude for the rights
and welfare of the working class, is meet and proper. That in controversies between a laborer and his master,
doubts reasonably arising from the evidence or in the interpretation of agreements and writings should be
resolved in the former's favor, is not an unreasonable or unfair rule. 20 But to disregard the employer's own rights
and interests solely on the basis of that concern and solicitude for labor is unjust and unacceptable.

Finally, it is well-settled that factual findings of quasi-judicial agencies like the National Labor Relations Commission
which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not
only respect but at times even finality if such findings are supported by substantial evidence. 2
Pambusco vs CIR

Issue: Whether petitioners were entitled of the benefits of back overtime pay granted by law when in fact they
specifically asked to be exempted from it

This is a petition for a writ of certiorari to review the decision of the Court of Industrial Relations promulgated on
January 14, 1939, denying the demands of the Pambusco Employees' Union, Inc.
The following are the pertinent facts which have given occasion to this industrial dispute: On March 26, 1938, the
Pambusco Employees' Union, Inc., addressed a thirteen-point petition to the management of the Pampanga Bus
Co. Upon the failure of the company officials to act upon the petition, a strike was declared by the workers on April
14, 1938. However, through the timely mediation of the Department of Labor, a provisional agreement was
reached, by virtue of which the strike was called off, eight demands were granted, and the remaining five were
submitted to the Court of Industrial Relations for settlement. One of these demands, in the language of the
petitioner, is that the respondent Pampanga Bus Co. "pay to all Company drivers affiliated with the Pambusco
Employees' Union, Inc., all the back overtime pay due them under the law." After trial on the disputed demands,
the Court of Industrial Relations decided inter alia that the claim for back overtime pay could not be allowed.

The pertinent portion of the decision of the respondent Court of Industrial Relations is as follows:

"The evidence is clear that even before the final approval of Act No. 4242 amending Act No. 4123, the Eight Hour
Labor Law, by extending the provisions of the latter to other class of laborers including drivers of public service
vehicles, a petition was addressed by 44 drivers of the company to the Governor-General asking him to veto the
bill amending the law extending it to drivers for the reasons stated in their petition (Exhibits 5 and 5-a). About the
6th day of September, 1935, a petition was again addressed by 97 drivers of the company to the Commissioner of
Labor requesting adjustment of working hours to permit them to retain their present status with the company as
nearly as possible under the law (Exhibits 4, 4-a, 4-b, 4-c, 4-d and 4-e). This petition was prepared after a meeting
of the employees was held and was drawn with the help of the manager of the respondent about the last days of
August, 1935. In September, 1937, about 347 employees of the different departments of the company again
addressed a petition to the Director of Labor expressing their satisfaction with the hours they work and the pay
they receive for their labor including the special bonuses and overtime pay they receive for extra work, and asking,
in view thereof, that the law be not applied to them (Exhibits 6, 6-ato 6-g).

"After the enactment of Act No. 4242 several transportation companies operating motor buses filed with the
Commissioner of Labor petitions for a readjustment of the hours of labor specified in section 1 of the Act on the
basis of maintaining the status quo as to the hours the drivers were required to be actually on duty in order to
enable them to make the prescribed hours daily that the exigencies of the service required. The petitions were
based on the impracticability of applying the provisions of the law to drivers of public service vehicles without
disrupting the public service and causing pecuniary loss to both employers and employees alike, and the resulting
difficulties on the part of the drivers. The testimony of Atty. Carlos Alvear on this point is uncontradicted. He
testified that in 1935, he was president of the Philippine Motor Association composed of bus operators operating
in the Philippines, of which the respondent is a member. Major Olson, who was at the time the executive secretary
of the association, and himself took up the matter with the Secretary of the Interior and the Secretary of Labor
after the passage of the Act extending the operation of the Eight Hour Labor Law to drivers. In their conference
with the Commissioner of Labor, they were told to take advantage of the provisions of the law in which they may
apply for the readjustment of the working hours, and in conformity with that suggestion, the executive secretary
of the association filed a formal petition, Exhibit 10, on September 5, 1935. When this was filed the Department of
Labor further suggested that the drivers of each company file and address a petition of similar nature designating
their representatives who will represent them in a conference that the Commissioner of Labor may call for the
purpose. With the filing of the petition, the conferees were assured by the Under-Secretary of Labor that the
enforcement of the Eight Hour Labor Law in so far as the drivers were concerned, will be held in abeyance until
such time as the meeting or investigations are held. It is not clear as to whether investigations and hearings were
finally made but the evidence indicates that the petition was never decided and the companies continued its
schedule of hours.

"Sections 3 and It of Act No. 4123 read as follows:

" 'Sec. 3. The Commissioner of Labor, with the advice of two representatives of the employers concerned,
designated by the latter, and of two representatives of the laborers concerned, designated by these, shall, at the
request of an interested party, decide in each case whether or not it is proper to increase or decrease the number
of hours of labor fixed in section one of this Act, either because the organization or nature of the work require it,
or because of lack or insufficiency of competent laborers for certain work in a locality, or because the relieving of
laborers must be done under certain conditions, or by reason of any other exceptional circumstances or conditions
of the work or industry concerned; but the number of hours of labor shall in no case exceed twelve daily or
seventy-two weekly,

" 'Sec. 4. Employees or laborers desiring an increase or decrease of the number of hours of labor shall address an
application to this effect to the Commissioner of Labor, stating their reasons. Upon receipt of an application of this
kind, the Commissioner of Labor shall call a meeting of the employers and laborers of the establishment or
industry concerned, for the designation of advisers as provided in the preceding section hereof. The Commissioner
of Labor or his authorized representative, together with the advisers, shall make an investigation of the facts,
giving special attention, in the first place, to the human aspect, and in the second place, to the economic aspect of
the matter, and he may for this purpose administer oaths, take affidavits, examine witnesses and documents and
issue subpoenas and subpoenas duces tecum. The decision of the Commissioner of Labor may be reconsidered by
him at any time.'

"It seems clear that the petitions of both employers and employees for the nonenforcement of the Eight Hour
Labor Law were made in accordance with these provisions of the law. Exhibit 9 of the respondent which is a
communication addressed by the Under-Secretary of Labor on September 6, 1935, to the A. L. Ammen
Transportation Company, Inc., defines the attitude taken by the Department of Labor in connection with those
petitions. It advises the company to submit an application under sections 3 and 4 of Act No. 4123 above-quoted for
an increase of working hours of such laborers as may fall under the amendment and that pending final solution of
said application, the Department of Labor will not make any attempt to enforce said amendment. As has already
been stated it is not clear whether final action or decision has been made on the applications with respect to the
drivers of the respondent; that it is undeniable fact that up "to the outbreak of the dispute, the law was not
observed nor enforced in the company; and that upon mutual agreement arrived at by the parties on April 14,
1938, the company worked out a schedule beginning May 1, 1938, placing all its employees under an eight-hour
schedule.

"In view of the foregoing facts, the court is of the opinion that the drivers are not entitled to the overtime pay
demanded for the whole period the law was not observed or enforced in the company. They are entitled to
payment of wages for hours worked in excess of the legal hours only beginning May 1, 1938."

On January 30, 1939, the petitioner filed a motion for reconsideration which was denied by the Court of Industrial
Relations, sitting in banc, with the following observations:

"We have reviewed carefully the evidence on record with regard to the claim for back overtime pay and we find
that it amply supports the findings and conclusions set forth in the decision. The arguments presented in this
regard in support of the motion for reconsideration are virtually a repetition of the reasons advanced in the
memorandum of the petitioner filed before the case was decided and were already discussed and considered in
the decision. The evidence permits no other conclusion than that the employees were not coerced nor
intimidated by the respondent on the repeated occasions they signed and presented to the Department of Labor
their petitions for nonenforcement of the Eight Hour Labor Law. The employees were indubitably aware of certain
hardships the enforcement of the law at that time would bring to them and these prompted their attitude of
preferring the continuation of the schedule of hours observed prior to the enactment of the legislation extending
the benefits of the Eight Hour Labor Law to drivers of motor vehicles in public utility enterprises. Whatever
pecuniary advantage they would have gained by the strict observance of the law by the company should they be
made to work more than eight hours a day was apparently waived or given up by them in exchange of their
personal convenience and of the additional monthly pay the respondent gave to those employees who were
assigned to routes where the daily working hours exceeded the maximum fixed by law. The evidence that the
company paid additional salaries not only to drivers but also to its conductors who were assigned to such routes
stands uncontradicted and no attempt even was made by the petitioner to deny it. Without need of passing on the
question as to whether the provisions of the law are mandatory or not, in the light of the above facts and applying
the rules of equity invoked by the union, we are constrained to hold that the petitioners are not rightly entitled to
the payment sought."

In Kapisanan ng mga Mangagawa sa Pantranco vs. Pangasinan Transportation Co. (39 Off. Gaz., 1217), we have
held that, to be entitled to the benefits of section 5 of Act No. 4123, fulfillment of the mandate of the law is
necessary, this being a matter of public interest. Where both parties, as in this case, have violated the law, this
court must decline to extend the strong arm of equity, as neither party is entitled to its aid. This is especially true in
view of the findings of fact made by the Court of Industrial Relations which we should not disturb.

We are not, to be sure, insensible to the argument that industrial disputes should be decided with an eye on the
welfare of the working class, who, in the interlay of economic forces, is said to find itself in the "end of the
stick." In the case at bar, however, we find no reason for disturbing the action taken by the respondent Court of
Industrial Relations, which is a special court enjoined to "act according to justice and equity and substantial merits
of the case, without regard to technicalities or legal forms and shall not be bound by any technical rules of legal
evidence but may inform its mind in such manner as it may deem just and equitable" (sec. 20, Commonwealth Act
No. 103).