EMPLOYMENT RELATIONSHIP
essence of their relationship.
AS A CONDITION PRECEDENT
Brotherhood Labor Unity
Movement of the Philippines v
Zamora
Several employees who worked as “cargadores”
and “Pahinante” at San Miguel Parola Glass Factory
were dismissed; They alleged that they had joined
the Brotherhood Labor Unity Movement of the
Philippines in order to bargain benefits such as
overtime and holiday pay, increase in salaray etc.
Workers complain that because they joined BLUM
they were dismissed from work. San Miguel on the
other hand claims that they were dismissed due to
the shutdown of the manufacturing plant and that
they were not entitled to benefits because between
them there was no employer-employee relationship.
The Court held that that there was an employer
employee relationship because
1. the workers had worked in the factory for
over seven years;
2. and that they worked continuously and
exclusively for San Miguel Corp;
This only shows that they were engaged to perform
necessary and desirable activities in the usual
business or trade of San Miguel Corp;
The alleged independent contractor in Guaranteed
and Reliable Labor Contractors was held not to be
an independent contractor because
1. they neither had substantial capital nor
investment to qualify
2. moreover their supplies were owned by San
Miguel;
3. Moreover, as to the wages paid, the
Guaranteed and Reliable Labor Contractors
do not receive the salary of the employees
but directly receive a percentage of their total
earnings;
4. as to the payment to the employees on piece
basis the same is only a method of
compensation and does not define the
SMC, moreover had the power of control over the
employees; whereby it could impose disciplinary
measures upon them;
Anent the allegation of illegal dismissal, the Court
held that the alleged excuse of Factory shutdown
was unmeritorious because the factory was not
permanently shut down but was only temporarily
closed for furnace repairs; clearly the employees
were dismissed because SMC was agitated by their
plea for benefits and reforms;
Finally, there was no unfair labor practice as alleged
by the employees because SMC had an existing
collective bargaining agreement with IBM hence the
workers cannot merely join another union and
demand bargaining.
SMC was ordered to REINSTATE the workers.
Sevilla v CA
Lina Sevilla entered into an arrangement with
Tourist World Services Inc. Whereby she would sell
tickets for them with 4% commission on her part and
3% to TWS. She was assigned at their branch office,
to which she pays the rent and she conducts the
business herself. Later TWS learns that she was
connected with their rival firm Philippine Travel
Bureau hence they padlocked the premises of the
branch office keeping her from using it. Sevilla now
claims for damages; One of Sevilla’s contentions is
that she is NOT an employee of TWS and that they
had entered into a joint venture agreement; hence
their act of padlocking her away from her business
is a breach of their agreement making TWS liable for
damages; TWS on the other hand claims that she is
their designated manager and employee;
The Court held that here there is NO employer-
employee relationship;
Sevilla was NOT subject to the control of TWS;
1. she had bound herself in solidum for the
payment of the rent
 2. and the branch office was run by her without
the control of TWS.
3. Moreover, she was not included in the
company’s payroll instead she retained 4%
commission for herself and 3% for TWS
which means she does not earn in a fixed
salary;
4. Anent her title as designated branch
manager the same was held to be a weak
indicator as to the nature of their
relationship.
The Court however held that there was no joint
venture agreement because they never held
themselves out as partners. Rather there was a
contract of agency. Because Sevilla was a bona fide
travel agent and had acquired an interest in the
business entrusted to her as well as the equipment
pertaining in the office the conduct of TWS of
padlocking her out betrays their contract of agency
and is perceived to be disloyalty warranting
DAMAGES.
Domasig v NLRC
Eddie Domasig a Salesman of Cata Garments
Corporation was dismissed from work because CGC
found that he was being pirated by a rival
corporation. Hence, Domasig filed a complaint for
Illegal Dismissal; CGC claims that he is only a mere
commission agent and NOT an employee; Domasig
on the other hand contends that he is an employee;
The Court held that there is an employer-employee
relationship and that
1. the ID card and
2. salary/cash vouchers
presented by Domasig corroborate their
relationship. The fact that he has been employed for
over 1 year makes Domasig a regular employee;
Finally, the Court held that his DISMISSAL WAS
ILLEGAL.
Flores v Nuestra
Herminio Flores was hired as helper-utility man,
bookkeeper, embalmer, and cashier by Nuestra in
his Funeraria Nuestro Funeral Parlor.
1. They were paid 750 a month with 200
allowance monthly;
2. they were registered as his employees in the
SSS;
3. and were given living quarters inside the
compound of the funeral parlor.
When an altercation between Flores and Nuestra
evolved; Nuestra forced Flores and his family to
vacate their living quarters; Flores now files a case
for Illegal dismissal; Nuestra on the other hand
attempts to escape liability by claiming that Flores is
NOT his employee;
The Court, however, held that Flores is his employee
as shown by his act of registering Flores with the
Social Security System. This is for the reason that the
coverage of the SSS Law is predicated on the
existence of an employer-employee relationship.
Further, the Court held that here there can be no
abandonment on the part of Flores because he was
forced to leave his employment. Finally, here
because there was an illegal dismissal, the usual
procedure would be to order reinstatement but in
view of their strained relationship the court merely
ordered the PAYMENT OF 6 MONTHS
BACKWAGES in favor of Flores.
Equitable v NLRC
Ricardo Sadac was the Vice President for the Legal
Department of Equitable Banking Corporation and
was also designated as the bank’s General Counsel.
1. He was paid a monthly salary of 8,000 plus
4,500 allowance
2. and Christmas bonus equivalent to two
month salary.
Subsequently 9 lawyers from the company sent a
letter to the Chairman of the Board of Directors
claiming that Sadac is guilty of
1. abusive conduct,
2. inefficiency,
3. mismanagement,
4. ineffectiveness, and
 5. indecisiveness.
There were several investigations and hearings all
leading to the dismissal of Sadac. Hence, Sadac filed
a complaint for illegal dismissal against Equitable;
Equitable on its part contends that there exists no
employer-employee relationship and only a lawyer-
client relationship; Hence, there is no need for the
twin requirements of notice and hearing.
The Court held that there is an employer employee
relationship because;
1. Sadac was given a position as Vice President
of the Legal Department and General
Counsel
2. He was given a salary, allowance and
Christmas bonus
3. His duties were defined as a bank officer
working under the supervision of the
President and the Board of Directors
4. He was employed for over 8 years.
5. He received usual payslips to evidence
monthly gross compensation
6. He was even enrolled as an employee at the
SSS and Medicare programs
7. And he contributed to the bank’s Employee’s
Provident Fund.
Here the Court held that there was illegal dismissal
because Equitable has put aside the procedural
requirements for terminating one’s employment
which was supposed to be mandatory. Hence Sadac
is entitled to BACKWAGES and DAMAGES.
Fuji v NLRC
Fuji Xerox was supplied by Skillpower Inc with
workers to operate copier machines for its “Xerox
Copier Project.” One of the employees is PEDRO
GARADO who was assigned as key operator in one
of their branches. When Garado went on leave his
substitute caused the spoilage of 600 copies and to
cover this Garado tried to talk a service technician;
this matter came to the knowledge of Fuji Xerox
leading Skillpower to suspend Garado from work.
Garado then filed a complaint for illegal dismissal.
The Court held that Garado is the EMPLOYEE of
Fuji Xerox. Although Garado was supplied by
Skillpower
1. he had never been assigned to any other
company and
2. had worked for Fuji Xerox for 7 years.
3. Their agreement entitled “Appointment as
contract worker” was not controlling since it
was a crude attempt to circumvent the law
for their relations shall not be based on the
title that they give but based on the law;
4. Moreover, Fuji Xerox cannot claim that
Garado’s services were not directly related
or necessary to its business of selling or
leasing copier machines for his work
ultimately redounded to the benefit of Fuji
Xerox.
5. Further 2 letter from the legal counsel of Fuji
exercising control and discipline over
Garado contradict their claim that they did
not exercise the power of control over him.
Finally, Skillpower was not an independent
contractor for the reason that it does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises and other
materials necessary for the conduct of its business.
To Conclude, Garado is not the employee of
SkillShare BUT IS THE EMPLOYEE OF FUJI
XEROX and its dismissal without following the
mandatory procedure is illegal.
Great Pacific Life Assurance
Corporation v NLRC
Honorato Judico was a debit agent of Great Pacific
Life Assurance Corporation (GREPALIFE) he was
given an allowance of 200.00 and was even
promoted as Zone supervisor with additional 110
pesos allowance. Subsequently he was dismissed by
way of termination of his contract allegedly because
of his anemic performance. Because of this he files a
complaint for illegal dismissal.
GREPALIFE contends that there is no illegal
dismissal because he was not their employee; Judico
claims however that he was an employee because he
had a fixed salary and a definite place in the office to
work. He was even promoted only to be terminated
due to anemic performance.
The Court held that Honorato Judico is an employee
of GREPALIFE because of the presence of the
element of control by GREPALIFE.
1. Judico received a fixed weekly wage of 200
pesos
2. He was assigned a definite place in the the
office to work if he was not in the field and
burdened with the job of collection
3. He was required to make regular reports to
the company regarding his duties
4. He was even promoted to Zone supervisor
with an additional allowance
5. Furthermore his contract of services was not
for a piece of work but for a definite period.
Clearly, he was controlled by GREPALIFE and is a
regular employee entitled to protection by law from
illegal dismissal.
FEATI University v Bautista
The President of FEATI University Faculty Club-
PAFLU (Faculty Club) wrote a letter to the
University President Mrs. Araneta for the
organization of the Faculty Club as a registered
labor union. They sent a letter containing 26
demands from the President, to which such
demands were unheeded. Hence, they filed a notice
of strike by reason of the University’s refusal to
bargain collectively.
The University claims that
1. RA 875 which governs collective bargaining
by employees is not applicable to them.
2. In addition they claim that they are not an
employer but merely a lessee of the services
of the teachers.
3. Moreover, they claim that there is no
employer-employee relationship because
teachers are not employees, and even
assuming that they are; those teachers
involved here are not the employees of
FEATI.
The Court however held that RA 875 is applicable to
educational institutions who operate for profit and
declare dividends, since FEATI here declared
dividends and realizes profits it is included within
the scope of the said act.
Further anent its contention that FEATI is not an
employer the Court held that they come within the
definition of employer for employing the services of
the teachers as shown by how they engaged the
services of the teachers through a contract and
through payment of compensation.
Anent the contention that teachers are not
employees the same was rejected by the Court since
teachers are under contract to teach particular
courses and are paid for said services they are
considered within the definition of employees.
The Court further held that the teachers in this case
are NOT independent contractors, contrary to the
allegation of FEATI. FEATI here controls the work
of the teachers by:
1. Prescribing courses or subjects to teach
2. When and where to teach
3. There is a fixed duration
4. They are compensated for their services by
wages or salaries rather than by profits
5. They cannot substitute others to do their
work for them without the consent of the
university
6. They are laid off if their work is not
satisfactory
Because they are employees then it follows that they
have a right to form a union. Further the Court held
that since this case involves a controversy as to the
terms, tenure or condition of employment or
representation of the teachers this very well can be
within the definition of labor dispute.
Ultimately, the Court ruled against FEATI.
Citizens v Abbas
Spouses Teofilo Geronimo and Emerita Mendez are
owners of auto-calesas which are rented daily by
herein complainants. The complainants through the
Citizen’s League of Freeworkers, a legitimate labor
organization, engaged in a strike against Sps
Geronimo and Mendez to recognize the drivers as
employees. The Spouses contend that they are not
employees but are only lessees.
The Court held that a driver of a jeep who operates
the same under a boundary system is considered an
employee within the meaning of the law and an
employer-employee relationship exists between the
owner of the jeepney and the drivers. Hence in this
case the drivers are employees of the spouses and
are entitled to bargain with it on that basis.
Makati v NLRC
Pelobello and Zapata along with other employees
worked as tailors, seamstress, sewers, basters and
plantsadoras for Makati Haberdashery Inc. That
Pelobello and Zapata were involved in a case where
the design of a barong was copied by them, when
Haberdashery requested them to explain they failed
to do so and were thus dismissed. They countered
by filing a complaint for illegal dismissal.
Haberdashery claims now that they are not their
employees.
The Court held here that Pelobello and Zapata are
employees of Haberdashery. Citing the four fold test
and enunciating that control existed in this case by
pointing out that
1. When a customer enters into a contract
Haberdashery directs and supervises them
in all aspects with respect to manner and
quality of cutting, sewing and ironing
2. Moreover Haberdashery issued a substantial capital investment to qualify as
memorandum providing for the new
procedure in accepting job orders,
altercations and consultation.
3. That they have to report to work regularly
from 9:30Am to 6 or 7 PM.
4. That they are given a daily allowance of 3
pesos if reported to work before 9:30
Further the Court held that as employees they are
entitled to minimum wages, claim of cost of living
allowance, 13th month pay; BUT NO claim of service
incentive leave pay and holiday pay because they
are piece rate workers being paid at a fixed amount
for the performance of their work. Finally, the Court
held that there was no illegal dismissal here because
Pelobello and Zapata were in blatant disregard of
the memorandum asking them to explain the
incident hence their dismissal was valid.
Caurdanetaan v Laguesma
92 members who worked as cargador at warehouse
and ricemills of Corfarm
1. loaded, unloaded and piled sacks of palay
from the warehouse to the cargo trucks to be
brought for delivery.
2. They were paid in a piece rate basis and were
employed
3. for over 10 years.
That when these employees organized a union to
elect a representative for collective bargaining the
Corfarm dismissed the members and placed
members with non-union to replace them. They filed
an illegal dismissal case before the Court; Corfarm
contends that there is no illegal dismissal since they
are not employees subject to the control of corfarm
for they are mere independent contractors.
The Court however held that there is an employer-
employee relationship; The employees have been
performing activities related to or desirable to the
business and trade of corfarm for the last 10 years;
The Court held that they are not independent
contractors because
1. there is no proof to show that they had
independent contractors
2. and the premises, tools, equipment were
supplied by Corfarm.
3. Well noted is the fact that they never offered
their services to other companies but only to
Corfarm.
4. In addition corfarm paid wages directly to
these workers without the intervention of
any third party independent contractor
 5. and the relationship between the parties is
not co-terminous with each loading and
unloading job.
Anent the allegation that some employees signed
affidavits admitting to the lack of Employer-
Employee relationship; the same failed to tip the
scales towards Corfarm; Records reveal that the
affidavits were identical in content and only three
workers executed them; this is ultimately defeated
by the fact that the employer-employee relationship
is proven by substantial evidence.
Therefore, Corfarm is deemed the direct employer
of the employees and are thus liable for all benefits
to which the workers are entitled.
Ruga v NLRC
Ruga et al are fishermen-crew members working for
De Guzman Fishing Enterprises; their tasks were
pilot, chief engineer, 2nd engineer, and fishermen.
They were paid on percentage commission basis in
cash 13% proceeds of the sale of fish catch if the
proceeds exceeded the cost of crude oil consumed
during the fishing trip otherwise it is 10%.
One day after fishing, they were directed to proceed
to the police station for allegedly having sold some
of their fish-catch at midsea; They were then not
allowed to return to work; Hence, they filed a
complaint for illegal dismissal; De Guzman Fishing
Enterprises contends that there is no employer-
employee relationship because there is only a “joint-
fishing venture” relationship.
The Court however held, applying the 4 fold test
and the power of control that there is an employer
employee relationship based from the following:
1. They were directly hired
2. They worked for a range of 8 to 15 years;
3. They were supervised and controlled in the
conduct of their fishing operations by
operations manager; by fixing their
schedules and direction of fishing and
volumes of tubes and fish catch
4. They were not allowed to join other vessels
without authority
5. They were compensated on percentage
commission
6. They have to follow company policies rules
and regulations
7. They were made to report their activities and
the number of tubes of fish catch in one day
8. They perform work which is necessary or
desirable in the usual business or trade of the
company.
Hence they are employees and their dismissal based
on mere suspicion without giving them the
opportunity to explain is illegal.
Argo v NLRC
Jimenez et al numbering 46 security guards or
janitors under individual contracts for Argo worked
for security and janitorial services. When their
service contracts were terminated due to
sequestration of the said offices by the Presidential
Commission on Good Government they were
placed in a floating status for 6 months. Because of
this they filed a complaint for Illegal dismissal. Argo
contends that there is NO employer-employee
relationship
The Court held that there is an employer-employee
relationship because Argo exercised control over
them;
1. Argo determined their monthly salary,
overtime or night differential pay, midyear
and Christmas bonus 13th month pay
2. They were reported as employees for
purposes of social security coverage
3. Argo remitted their withholding taxes and
made monthly contributions to Pagibig fund
for their benefit
4. Argo determined their assignments
promotions and salary increases
5. Argo determined appropriate disciplinary
measures
Clearly they are regular employees who enjoy
security of tenure;
Furthermore, the Court held that a floating status is
valid for so long as it is within a reasonable time;
However here the floating status of over 6 months
was tantamount to an illegal dismissal; The Court
qualified that those which were found to have
accepted employment with other security agencies
violating the employment contract were dismissed
for just cause and those that did not were illegally
dismissed.
Maraguinot Jr v NLRC
AEJANDRO MARAGUINOT JR worked for VIVA
as:
1. (1989)Part of the Filming crew – 375 per
week
2. Assistant Electrician- 400 per week
3. Assistant Electrician – 450 per week
4. (1991) Electrician - 593 per week
PAULINO ENERO (1990) worked as member of the
shoowint crew with a salary of 375 per week which
was increased to 475 on 1991.
Their task included the loading, unloading, and
arranging of 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.
When Maraguinot and Enero asked their supervisor
to adjust their salary in accordance with the
minimum wage law, they were informed that Viva
would only do so if they signed a blank employment
contract, to which they refused. Because of their
refusal they were terminated from their work.
Hence, they filed a complaint for Illegal dismissal.
Viva contends that they hire “associate producers”
who make moview for them and employ project
employees (petitioners Maraguinot and Enero).
Hence these associate producers act as
“independent contractors” and there is no
employer-employee relationship between Viva and
Maraguinot and Enero; thus no illegal dismissal.
The Court held that Viva is the direct employer of
Maraguinot and Enero
1. The Associate producers are NOT job
contractors; they do not have tools,
equipment, machinery, work premises and
other materials necessary to make motion
pictures. The movie-making equipment are
supplied to the producers and are owned by
VIVA. Thus they merely lease the equipment
from VIVA.
2. Further these Associate producers are not
Labor-only contractors because they did not
supply, recruit nor hire Maraguinot and
Enero. It was shown that it was a Viva
employee (Juanita Cesario) who recruited
Maraguinot and Enero from an available
group of freelance workers
3. The relationship between Viva and its
producers or associate producers is that of an
“agency” As such the employement of
Maraguinot and Enero is one where Viva
acts as a direct employer.
The Court held that there is an employer-employee
relationship. Applying the 4 fold test; Viva’s control
over Maraguinot and Enero is apparent:
1. The end result of the film be “quality film
acceptable to the company” thus the mans
and methods to accomplish the result are
likewise controlled by VIVA
2. The movie project must be finished within
the scheduled time and without exceeding
the budget and additional expenses must be
justified
3. Certain scenes are subject to change to suit
the taste of the company
4. The Producers intervenes in the movie-
making process by assisting the associate
producer
Further the Court held that it is wrong to suppose
that Maraguinot and Enero are under only the
control of the Movie Directors; the Court held that
the director’s job is akin to a supervisor who merely
oversees the work of the employees who are
ultimately under the Control of Viva.
There is also the element of selection and
engagement; as reflected in the sample
appointment slip to prove that the members of the
shooting crew are project employees of the
Independent Producers.
Finally, the Court held that Enero and Maraguinot
are Regular employees since there is a continuous
rehiring of their services and they performed tasks
which are vital, necessary, and indispensable to the
usual business and trade of VIVA:
1. Enero was employed for a total of 2 years in
18 projects
2. Maraguinot was employes for 3 years in 23
projects
3. The work of loading, unloading and
arranging movie equipment in the shoting
area and returning the equipment in the Viva
warehouse are tasks which are vital
necessary and indispensable to the usual
business or trade of the employer.
Therefore, their dismissal was unwarranted. They
are entitled to backwages and reinstatement.
Sonza v ABS-CBN
ABS CBN signed an Agreement with Mel and Jay
Management and Development corporation for the
services of SONZA as talent for ratio and television.
ABS CBN agreed to pay Sonza monthly talent fees
of 310,000 for the 1st year and 317k for the 2nd and 3rd
year. Sonza then wrote a letter rescinding his
contract with ABS CBN and asking for the recovery
of other benefits as enumerated in their said
Agreement:
 Unpaid talent fees, 13th month pay,
separation pay, service incentive leave,
signing bonus, travel allowance and
amounts due under the Employee Stock
Option Plan
Because of the inaction of ABSCBN Sonza filed a
complaint before the DOLE; ABSCBN then counters
with a Motion to Dismiss on the ground that there is
NO Employer-Employee relationship.
The Court here used the 4 fold test and found that
there exists an Employer-Employee relationship.
First, as to selection and engagement; the specific
selection and hiring of Sonza because of his unique
skills, talent, and celebrity status not possessed by
ordinary employees is indicative but NOT
CONCLUSIVE of an independent contractor
relationship.
Second, as to Payment of wages; payment to Sonza
was a result of the negotiations of their Agreement;
if he was really an employee the parties would not
have thought it necessary to stipulate on the
contracts benefits such as SSS, Medicare etc which
the law automatically inforporates in every E to E
contract. Furthermore the power to bargain a 317k
monthly salary is so huge and out of the ordinary
which is indicative of an independent contractual
relationship. Note that payment of fees directly to
Sonza and not to MJMDC does NOT negate the
status of Sonza as Independent contractor.
Third, on the power of dismissal; ABSCBN has no
power of dismissal over Sonza they cound not
retrench Sonza because ABS-CBN remained
obligated to pay Sonza talent fees during the life of
their agreement. Note also that Sonza did not resign
but he RESCINDED their agreement.
Fourth, the Power of Control; ABS CBN exercised
NO CONTROL over Sonza because;
1. To perform his work, Sonza only needed his skills and
talent. How Sonza delivered his lines, appeared on
television, and sounded on radio were outside ABS-
CBNs control.
2. Sonza did not have to render eight hours of work
per day. The Agreement required Sonza to attend only
rehearsals and tapings of the shows, as well as pre- and
post-production staff meetings.
3. ABS-CBN could not dictate the contents of Sonza’s
script. However, the Agreement prohibited Sonza from
criticizing in his shows ABS-CBN or its interests. The
clear implication is that Sonza had a free hand on what
to say or discuss in his shows provided he did not attack
ABS-CBN or its interests.
4. The Court finds that ABS-CBN was not involved in
the actual performance that produced the finished
product of Sonza’s work. ABS-CBN did not instruct
Sonza how to perform his job. ABS-CBN merely
reserved the right to modify the program format and
airtime schedule for more effective programming. ABS-
CBNs sole concern was the quality of the shows and
their standing in the ratings. Clearly, ABS-CBN did not
exercise control over the means and methods of
performance of Sonza’s work.
 5. ABS-CBN could not discipline Sonza; they could only
opt not to broadcast Sonza’s show; Although ABS-CBN
did have the option not to broadcast Sonza’s show,
ABS-CBN was still obligated to pay Sonza’s talent fees.
Thus, even if ABS-CBN was completely dissatisfied with
the means and methods of Sonza’s performance of his
work, or even with the quality or product of his work,
ABS-CBN could not dismiss or even discipline Sonza.
6. No doubt, ABS-CBN supplied the equipment, crew and
airtime needed to broadcast the Mel & Jay
programs. However, the equipment, crew and
airtime are not the tools and instrumentalities
Sonza needed to perform his job. What Sonza
principally needed were his talent or skills and the
costumes necessary for his appearance. Even though
ABS-CBN provided Sonza with the place of work and
the necessary equipment, Sonza was still an
independent contractor since ABS-CBN did not
supervise and control his work. ABS-CBN’s sole
concern was for Sonza to display his talent during the
airing of the programs.
7. ABS-CBN does not subject him to its rules and
standards of performance; the Code of Conduct
imposed upon him is the KBP, a code that applies to
broadcasters (who are not necessarily employees of
radio and television stations) and a code that merely
serves as guidelines
Anent the contention of Exclusivity; the Court held
that being an exclusive talent of ABSCBN does not
make Sonza an employee; Even an independent
contractor can validly provide his services
exclusively to the hiring party.
Anent the contention that MJMDC is a labor only
contractor such was rejected by the COurtholding
thtat there are only 2 parties involved under the
Agreement document namely Sonza and ABSCBN;
MJMDC only acted as Sonza’s Agent.
Since security of tenure is granted only to employees;
the Court held that this case does not call for the
application of the Labor code provisions on Illegal
Dismissal rather this involves an interpretation and
implementation of their contract “Agreement” and
Sonza’s Cause of action is properly for BREACH OF
CONTRACT.
ABS CBN Brooadcasting
corporation v Nazareno
ABS CBN Corporation hired the services of
Nazareno, Gerzon, Felparine and Lerasan
(Nazareno et.al) as Production Assistants (PAs) for
various procrams. ABS CBN and the ABS CBN
Rank-and-File Employees executed a Collective
Bargaining Agreement (CBA) but ABSCBN did not
recognize Nazareno et al claming that they were not
refular employees. Hence Nazareno et al filed for a
complaint for recognition of Regular Employment
Status, Underpayment of Overtime Pay, Holiday
Pay, Premium Pay, Service Incentive Pay, Sick Leave
Pay, and 13th month pay with damages before the
NLRC.
The Court held that there is an employer-employee
relationship and Nazareno et al are considered
regular employees.
1. In the selection and engagement of Nazareno
et al no peculiar skill talent or celebrity status
was required from them; they were merely
hired through ABS CBN’s personnel
department like any ordinary employee
2. Nazareno et al did not have the power to
bargain for huge talent fees which indicates
independent contractual relationship
3. Nazareno et al are highly dependent on ABS
CBN for continued work
4. The degree of control and supervision
exercised by ABS CBN negates the allegation
that they are independent contractors
As to whether they are REGULAR Employees; the
Court held that the test is:
1. Whether the activity performed is usually
necessary and desirable in the usual business
or trade of the employer
2. And if the employee has been performing
the hob for at least a year, even if the
performance is not continuous and merely
intermittent the law deems repeated and
continuing need for its performance as
sufficient evidence of the necessity if not
indispensability of that activity to the
business.
Hence, Nazareno et al are regular employees having
rendered ar least 1 year in service. They are therefore
entitled to benefits granted to all regular employees
of ABS CBN under the CBA.
Murillo v CA
On October 2, 1995, Thelma Dumpit-Murillo was
hired by Associated Broadcasting Company (ABC)
as a NEWSCASTER and CO-ANCHOR for Balitang
Balita. She was hired under a three month contract
which was repeatedly renewed for four years; On
September 30, 1999 Murillo’s talent contract expired;
When she expressed her desire to renew the contract
through a letter the same was not heeded. Hence,
Thelma filed a complaint against ABC for Illegal
contructive dismissal, nonpayment of salaries,
overtime pay, premium pay, separation pay,
holiday pay, service incentive leave pay,
vacation/sick leaves and 13th month pay. Basically,
Thelma claims that she is a regular employee, while
ABC claims that she is not an employee but was only
hired for a fixed term;
The Court held that she is a regular employee and
that there was no valid fixed term employment.
Note that a fixed term contract does not prevent a
regular employment status.
The Court compared this case with the previous case
of SONZA; holding that the case of Sonza is NOT
applicable in this case; the difference lies in the fact
that
1. ABC HAS CONTROL over the performance
of Murillo’s work and
2. Murillo had a comparatively low 28,000
monthly pay as compared to the 300k of
Sonza
3. Further here ABC has the power to dismiss
Murillo
The Court using the 4 fold test holds that there is an
employer-employee relationship:
1. The duties of murillo as enumerated in her
employment contract indicate that ABC had
control over the work she performs
2. ABC also dictated her work assignments and
payment of her wages
3. ABC also had the power to dismiss her
Anent the existence of regular employment; the
Court held that Because Murillo’s work was
necessary or desirable in the usual business of ABC
and because her service was continuous for a period
of 4 years as evidenced by the repeated renewal of
her contract is indicative of the necessity and
desirability of Murillo’s work in ABC.
Finally, the Court held that there is no valid fixed
term employment for the reason that ABC and
Murillo did not deal with each other in more or less
equal terms. Murillo could not object to the terms of
her employment contract and she was forced to sign
multiple renewals to keep her job. Further the Court
held that ABC’s practice of repeatedly extending
Murillo’s 3 month contract for four years is a
circumvention of the acquisition of regular status.
Hence, there was no valid fixed-term employment.
As a regular employee Murillo was illegally
dismissed when ABC did not observe due process in
constructively dismissing her.
Atok v Gizon
JESUS GIZON was engaged as a part-time
consultant on retainer basis by ATOK BIG WEDGE
COMPANY; Gizon’s work involves assisting on
ATOK’s retained legal counsel with matters
pertaining to the prosecution of cases such as illegal
surface occupants; Moreover, Gizaon was also hired
to perform liaison work with several government
agencies;
Gizon was not required to report to the office on a
regular basis; he was paid a retainer fee of 3,000 per
month which was delivered to his residence or
restaurant; and this arrangement continued for
eleven years; Subsequently, Gizon sent a letter to
ATOK that he be registered with the SSS as their
employee; but ATOK refused and instead informed
him that his services will be terminated. Thus, Gizon
filed a complaint for Illegal dismissal, unfair labor
practice, underpayment of wages, non-payment of
13th month pay, vacation pay, and sick leave pay
with the NLRC.
The Court however held that there is NO
EMPLOYER-EMPLOYEE relationship as based
from the following:
1. Gizon was not required to report everyday
during the regular office hours of Atok
2. Gizon’s monthly retainer fees were paid to
him either at his residence or local restaurant
 3. Atok did not prescribe the manner in which
Gizon would accomplish any tasks; Gizon
was left alone and given the freedom to
accomplish the tasks using his own means
and methods; Atok had no control over these
tasks;
4. Gizon was well aware of the agreement that
he was hired merely as a liaison or
consultant and he agreed to perform tasks on
a TEMPORARY employment status only.
The Court held that the fact that he was hired for
over 11 years cannot be conclusive that he is a
regular employee in view of the attendant
circumstances. Further the question as to whether he
is a casual or regular employee is irrelevant if in the
first place he is NOT an employee;
Considering the foregoing, the termination of his
work with due notice did not constitute to illegal
dismissal.
Royale Homes v Alcantara
Fidel Alcantara was hired as a Marketing Director of
Royale Homes Marketing Corporation. His work
consisted in the marketing of Royale Homes’ real
estate inventories on an exclusive basis. He was
hired on 1994 and there were repeated renewals of
his contract until 2003; Subsequently Alcantara
claims that he was a regular employee and that he
was illegally dismissed by Royale Homes; Royale
Homes on the other hand contends that it is clear in
their agreement that his services were engaged only
as an independent sales contractor for a fixed term
of one year and further that he was the one who
decided to leave the company since his wife had
started her own brokerage business.
The Court here held that there was no Employer-
Employee relationship. The Court relied on the
written contract signed and executed by the parties
which clearly provided their unequivocal intention
that no employer-employee relationship exists;
Further, the Court, using the Four-Fold test, held
that No control was exercised by Royale Homes;
1. Alcantara was no required to observe
definite working hours
2. He was not assigned other tasks by Royale
3. Alcantara had full control over the means
and methods of accomplishing his tasks as
he can solicit sales at any time and by any
many which he may deem appropriate and
necessary
4. He performed his tasks on his own account
fee from control and direction
The Court emphasized that the fact that Alcantara
was subjected to some rules, regulations, and code
of ethics is not indicative of control for so long as it
does not interfere with the means and methods of
accomplishing assigned tasks.
Anent the contention that his contract was
repeatedly renewed; the Court held that this simply
signifies the renewal of his contract by virtue of his
satisfactory services warranting such renewal.
Anent the payment of his wages, the same further
buttressed the fact that there was no E to E
relationship; there was no proof that he received a
fixed monthly salary; No payslip or payroll was ever
presented nor was there proof that Roayle Homes
deducted from his salary withholding tax nor was
there showing that he was registered as an employee
at the SSS or PhilHealth.
Fuji Television Network v Espiritu
ARLENE ESPIRITU was engaged by FUJI
TELEVISION NETOWRK as News
correspondent/producer tasked to report
Philippine news to Fuji through its Manila Bureau
Field office; Here contract was for a one year term
which was successively renewed on a yearly basis
with a salary adjustment on every renewal.
Arlene was subsequently diagnosed with cancer;
and she was subsequently informed tat her contract
will no longer be renewed; when she asked for the
payment of her salaries and other benefits, Fuji
refused to give these benefits to her unless she sign
a “non-renewal contract” providing that she agrees
that her contract will no longer be renewed, and that
she accepts 18, 050 dollars as payment releasing Fuji
from other liabilities and responsibilities; Arlene
signed this with the initials “UP” under protest; she
did so only to receive money for her needs; The next
day from the contract signing she filed a complaint
for illegal dismissal before the NLRC;
Finally, the Court held that there was iillegal
dismissal in Fuji’s failure of according Arlene due
process and a chance to present her medical
certificates; They immediately concluded that she
could no longer perform her duties and withheld
her salary.

Arlene contends that she was forced to sign the

contract otherwise she would not receive anything;
On the other hand Fuji contends that she was hired
only as an independent contractor under a fixed
term contract;

The Court before going to the main ruling noted that

Fuji’s argument that Arlene was an independent
contractor under a fixed term contract is
contradictory; since employees under fixed term
contract are not independent contractors; for in a
fixed term contract there is an employer-employee
relationship;

Going to the main course of this case; The Court held

that there was an employer-employee relationship
in this case; Fuji exercised control over Arlene:
1. Fuji had the power to dismiss Arlene
2. Arlene’s contract indicated that Fuji had
control over her work because she was
required to work for 8 hours from Monday
to Friday
3. Fuji gave her instructions on what to report
4. Fuji controlled the mode of transportation in
carrying out her functions
5. She had no equipment and had to use the
facilities of Fuji to accomplish her tasks;
Clearly Fuji exercised control over her;

Further, the Court held that Arlene is a Regular

Employee as evidenced by the successive renewals
of her contracts; such indicated the necessity and
desirability of her work in the usual course of Fuji’s
business;

Anent the allegation that she was under “A fixed

term contract” the same was not given credence by
the Court for it is not the how the definition given
by the parties that controls but that the employment
status of a person is defined and prescribed by law.
 EXCLUDED EMPLOYEES
SECTION 1. General statement on coverage. — The
provisions of this Rule shall apply to all employees
in all establishments and undertakings, whether
operated for profit or not, except to those specifically
exempted under Section 2 hereof.
SECTION 2. Exemption. — The provisions of this
Rule shall not apply to the following persons if they
qualify for exemption under the conditions set forth
herein:
(a) Government employees whether employed by
the National Government or any of its political
subdivision, including those employed in
government-owned and/or controlled
corporations;
(b) Managerial employees, if they meet all of the
following conditions:
(1) Their primary duty consists of the
management of the establishment in which
they are employed or of a department or sub-
division thereof.
(2) They customarily and regularly direct the
work of two or more employees therein.
(3) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as to
hiring and firing and as to the promotion or
any other change of status of other
employees, are given particular weight.
(c) Officers or members of a managerial staff if they
perform the following duties and responsibilities:
(1) The primary duty consists of the
performance of work directly related to
management policies of their employer;
(2) Customarily and regularly exercise
discretion and independent judgment; and
(3)
(i) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the
management of the establishment in
which he is employed or subdivision
thereof; or
(ii) execute under general
supervision work along specialized
or technical lines requiring special
training, experience, or knowledge;
or
(iii) execute, under general
supervision, special assignments and
tasks; and
(4) Who do not devote more than 20 percent
of their hours worked in a work week to
activities which are not directly and closely
related to the performance of the work
described in paragraphs (1), (2) and (3)
above.
(d) Domestic servants and persons in the personal
service of another if they perform such services in
the employer's home which are usually necessary
or desirable for the maintenance and enjoyment
thereof, or minister to the personal comfort,
convenience, or safety of the employer as well as
the members of his employer's household.
(e) Workers who are paid by results, including
those who are paid on piece-work, "takay,"
"pakiao" or task basis, and other non-time work if
their output rates are in accordance with the
standards prescribed under Section 8, Rule VII,
Book Three of these regulations, or where such rates
have been fixed by the Secretary of Labor and
Employment in accordance with the aforesaid
Section.
(f) Non-agricultural field personnel if they
regularly perform their duties away from the
principal or branch office or place of business of the
employer and whose actual hours of work in the
field cannot be determined with reasonable
certainty.
Bautista v Inciong and
Associated Labor Unions
REYLNALDO BAUTISTA was employed by
ASSOCIATED LABOR UNIONS (ALU) as
Organizer in 1972 with a 250 salary; Bautista went
on a ten day sick leave and on March 16, 1979 his
SSS Sickness benefit application form was given to
ALU for submission to the SSS. He was later
informed by ALU that his services was already
terminated on March 15, 1979 and ALU filed a
clearance application to terminate complainant’s
services on the ground of abandonment of work.
Bautista filed a case for Illegal Dismissal and ALU
claims that he was merely accommodated by
respondent union after he was dismissed by former
employer. There is really no employer-employee
relationship even if ALU paid his SSS premiums
The Court held that there was an employer-
employee relationship; the mere fact that ALU is a
laborunion does not mean that it cannot be
considered an employer of the persons who work
for it. Much less should it be exempted from the very
labor laws which it espouses as a labor organization.
1. Bautista was an employee as shown in
a. Hi individual payroll sheets
b. His membership in the SSS
c. And ALU’s share of remittances in
his favor
2. Filing of a clearance application to terminate
his services is indicative of an E to E
relationship
3. Bautista was selected and hired by the union
4. He was paid wages by the union
5. The ALU had the power to dismiss him as it
indeed dismissed him.
6. ALU tightly controlled the work of bautista
as one of its organizers.
The Court ordered Severance pay.
San Miguel v Ople
A collective bargaining agreement (effective on May
1, 1978 until January 31, 1981) was entered into by
petitioner San Miguel Corporation Sales Force
Union (PTGWO), and the private respondent, San
Miguel Corporation. Whereby Art. IV, Section 1.
Provides that Employees within the appropriate
bargaining unit shall be entitled to a basic monthly
compensation plus commission based on their
respective sales;
Subsequently, company introduced a marketing
scheme known as the "Complementary Distribution
System" (CDS) whereby its beer products were
offered for sale directly to wholesalers through San
Miguel's sales offices.
The labor union (herein petitioner) filed a complaint
for unfair labor practice in the Ministry of Labor,
with a notice of strike on the ground that the CDS
was contrary to the existing marketing scheme
whereby the Route Salesmen were assigned specific
territories within which to sell their stocks of beer,
and wholesalers had to buy beer products from
them, not from the company.
The Court however held that CDS is a valid exercise
of management prerogatives. Except as limited by
special laws, an employer is free to regulate,
according to his own discretion and judgment, all
aspects of employment, including hiring, work
assignments, working methods, time, place and
manner of work, tools to be used, processes to be
followed, supervision of workers, working
regulations, transfer of employees, work
supervision, lay-off of workers and the discipline,
dismissal and recall of work. Every business
enterprise endeavors to increase its profits. In the
process, it may adopt or devise means designed
towards that goal. So long as a company's
management prerogatives are exercised in good
faith for the advancement of the employer's interest
and not for the purpose of defeating or
circumventing the rights of the employees under
special laws or under valid agreements, this Court
will uphold them.
Further, it is to be noted that SMC offered o
compensate the members of its sales force who will
be adversely affected by the implementation of the
CDS by paying them a so-called "back adjustment
commission" to make up for the commissions they
might lose as a result of the CDS proves the
company's good faith and lack of intention to bust
their union.
Finally, the Court held that the employees here have
actually been promoted by virtue of the increase in
their rank and salary; and if they so wish to continue
receiving their overtime rest day and holiday pay
they could have refused their promotion; The Court

National Sugar v NBSR here enunciated that they cannot have their cake
and eat it too or they count not as a simple matter
of law get the best of both worlds; There is no
National Sugar Refineries Corporation showing that the JE Program was done in bad faith
NASURFECO implemented a Job Evaluation hence they are clearly officers or members of the
Program (JE PROGRAM) which affected all managerial staff exempted from the coverage of
employees from rank-and-file to department heads. Article 82.
All positions were re-evaluated and all employees
were granted salary adjustments and increases in
benefits commensurate to their actual duties and
functions. Some members of the NASURFECO
Union were promoted received an increase in their
salary and benefits this is in line of their
reclassification as supervisory employees ; Because
of this, they were no longer entitled to overtime rest
day and holiday pay because managerial employees
are included in those exempted from the Coverage
of Article 82 of the Labor Code.

The main issue here is whether or not supervisory

employees should be considered as officers and
members of the managerial staff under Article 82
and hence are not entitled to overtime, rest day and
holiday pay.

The Court held that based from the (11) duties of

these supervisory employees (outlined in the digest)
such duties qualify them as officers or members of
the managerial staff as defined in Section 2 Rule I
Book III of the Rules to Implement the Labor Code.
Because of this, they are not entitled to overtime rest
day and holiday pay.

Anent the allegation that because of the fact that

before the JE Program they had received overtime
rest day and holiday pay, such practice has become
a voluntary employer practice and has ripened into
a contractual obligation; the same was not given
credence by the Court because the test for such to
apply is that there is an indubitable showing that the
employer continued to give benefits knowing fully
well that said employees are not covered by the
law requiring payment therefor.