Great Pacific Life Assurance Corporation vs NLRC

Doctrine: Even if under the Insurance, they are called “insurance agents”, it does not follow that they are not
employees. The Insurance Code may govern the licensing requirements and other particular duties of insurance
agents, but it does not bar the application of the Labor Code with regard to labor standards and labor relations

Summary: Insurance agents were terminated by Grepalife because of misconduct. LA found just cause for
dismissal but nevertheless ordered reinstatement. NLRC modified by changing reinstatement to payment of
separation pay. Grepalife argues that there is no Er-Ee relationship because they are agents. SC affirmed
finding that Er-Ee relationship exists. Even if under the Insurance, they are called “insurance agents”, it does
not follow that they are not employees of Grepalife. The Insurance Code may govern the licensing
requirements and other particular duties of insurance agents, but it does not bar the application of the Labor
Code with regard to labor standards and labor relations. SC clarified that separation pay is actually sanction for
non-compliance of Grepalife to notice requirement.

Facts:
 Brothers Rodrigo and Ernesto Ruiz entered into individual agency agreements with Grepalife
 Ernesto was designated as district manager under a 3-year Agreement
 He was dismissed from service before the lapse of the period fixed in the contract, when upon audit
he was found to have delayed the remittance of premium collections in his possession and to have
appropriated for his own use a certain amount by remitting smaller amounts of premiums than that
actually paid by policy holders
 Grepalife then designated Rodrigo as officer-in charge to take over the functions of district manager
in the Butuan district, in addition to his responsibilities then as zone supervisor.
 Rodrigo instigated the other zone supervisors and debit agents of the Butuan district not to submit
their weekly reports of business and not to remit the premium collections
 This prompted Grepalife to terminate his employment effective March 5, 1984 in a letter dated March
8, 1984
 The brothers filed illegal dismissal cases
 LA: labor arbiter ordered their reinstatement without backwages o LA found that Rodrigo and
Ernesto: (1) were employees of Grepalife; (2) committed acts inimical to Grepalife's business; and (3)
were dismissed without first being afforded due process by way of a notice in writing of the grounds
for their dismissal.
 NLRC affirm but awarded separation pay for Grepalife’s failure to observe due process prior to their
termination from employment.

Issue:
Whether or not there was grave abuse of discretion on the part of public respondent in holding that Ernesto
and Rodrigo are employees of Grepalife (NO)

Ruling:
 Er-Ee relationship exists. 4-fold test (but ponencia did not discuss all, focused on control)
 Their work at the time of their dismissal as zone supervisor and district manager are necessary and
desirable to the usual business of the insurance company.
 A cursory reading of their respective functions as enumerated in their contracts reveals that the
company practically dictates the manner by which their jobs are to be carried out.
 Even if under the Insurance, they are called “insurance agents”, it does not follow that they are not
employees of Grepalife. The Insurance Code may govern the licensing requirements and other
particular duties of insurance agents, but it does not bar the application of the Labor Code with regard
to labor standards and labor relations.
Besa vs Trajano

Facts: Private respondent KAMPIL, a legitimate labor union, filed a petition for Certification Election to which
herein petitioner Besa opposed on the ground that no employer-employee relationship existed between him
and the petition’s signatories. The Med-Arbiter and BLR Director both ruled in favor of the union which
granted the holding of the certification election. Meanwhile, petitioner Besa filed actions before the Court and
with the Med-Arbiter contending that the 17 shoeshiners who are members of the union cannot be considered
employees and thus has no standing to vote in the certification election.

ISSUE: W/N ER-EE relationship exists betweem shoe shiners and Besa

HELD: No.
Shoe shiner is different from a piece worjer:

Piece Woker Shoe shiner

1. paid for work accomplished
2. the employer pays his wages
3. paid for work accomplished without concern
to the profit derived by employer
4. the employer supervises and controls his work
1. contributes anything to the capital of the
employer
2. paid directly by his customer
3. the proceeds derived from the trade are divided
share with respondent BESA
4. respondent does not exercise control

These shoe shiners are not employees of the company, but are partners instead. This is due to the fact
that the owner/manager does not exercise control and supervision over the shoe shiners. That the shiners have
their own customers from whom they charge the fee and divide the proceeds equally with the owner, which
make the owner categorized them as on purely commission basis. The attendant circumstances clearly show
that there is no employer-employee relationship existing.

Magsalin vs NOWM
Facts:
The private respondents worked as sales route helpers for the petitioner (Coca Cola) for 5 months and
thereafter they were hired on a daily basis. According to the petitioner, the respondents were merely hired as
substitutes for regular helpers when the latter were unavailable or due to shortage of manpower/high volume
of work. These workers would then wait every morning outside the gates and if hired, they would be paid their
wages at the end of the day.

The respondents asked the petitioner to make them regular but the latter refused. Hence, 23 of these temporary
workers filed a case for illegal dismissal.

Issue: W/N the respondents' work is deemed necessary and desirable in the usual business or trade of
the petitioner

RULING: Yes. The repeated hiring of the respondent workers and continuing need of their daily services
clearly attest to the necessity or desirability of their services in the regular conduct of the business/trade of
petitioner.

In determining whether employment is regular or not, the applicable test is the reasonable connection between
a particular activity performed in relation to the usual business or trade of the employer. The nature of work
must be viewed from the perspective of the business in its entirety and not confined scope.

Hacienda Fatima Inc. vs National Fed. Of Sugar Cane Workers

Facts:
When complainant union (respondents) was certified as the collective bargaining representative, petitioners
refused to sit down w/ the union for the purpose of entering into a CBA. The workers including complainants
were not given work for more than 1 month. In protest, they staged a strike w/c was however settled upon the
signing of a MOA. Subsequently, alleging that complainants failed to load some wagons, petitioners reneged
on its commitment to bargain collectively & employed all means including the use of private armed guards to
prevent the organizers from entering the premises. No work assignments were given to complainants w/c
forced the union to stage a strike. Due to conciliation efforts by the DOLE, another MOA was signed by the
parties & they met in a conciliation meeting. When petitioners again reneged on its commitment, complainants
filed a complaint. Petitioner accused respondents of refusing to work & being choosy in the kind of work they
have to perform.

The NLRC ruled that petitioners were guilty of ULP & that the respondents were illegally dismissed. The CA
affirmed that while the work of respondents was seasonal in nature, they were considered to be merely on leave
during the off-season & were therefore still employed by petitioners.

Issue:
Whether the CA erred in holding that respondents, admittedly seasonal workers, were regular employees,
contrary to the clear provisions of Article 280 of the Labor Code, which categorically state that seasonal
employees are not covered by the definition of regular employees under paragraph 1, nor covered under
paragraph 2 which refers exclusively to casual employees who have served for at least one year

Held:
No. For respondents to be excluded from those classified as regular employees, it is not enough that they
perform work or services that are seasonal in nature. They must have also been employed only for the duration
of one season. The evidence proves the existence of the first, but not of the second, condition. The fact that
respondents repeatedly worked as sugarcane workers for petitioners for several years is not denied by the latter.
Evidently, petitioners employed respondents for more than one season. Therefore, the general rule of regular
employment is applicable.

If the employee has been performing the job for at least a year, even if the performance is not continuous &
merely intermittent, the law deems the repeated & continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the business. Hence, the employment is considered
regular, but only w/ respect to such activity & while such activity exists. Seasonal workers who are called to
work from time to time & are temporarily laid off during off-season are not separated from service in said
period, but merely considered on leave until re-employed (De Leon v. NLRC)

Respondents, having performed the same tasks for petitioners every season for several years, are considered the
latter's regular employees for their respective tasks. Petitioners' eventual refusal to use their services — even if
they were ready, able and willing to perform their usual duties whenever these were available — and hiring of
other workers to perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.

The Court finds no reason to disturb the CA's dismissal of what petitioners claim was their valid exercise of a
management prerogative. The sudden changes in work assignments reeked of bad faith. These changes were
implemented immediately after respondents had organized themselves into a union and started demanding
collective bargaining. Those who were union members were effectively deprived of their jobs. Petitioners'
move actually amounted to unjustified dismissal of respondents, in violation of the Labor Code.

Ricardo Fernandez vs NLRC

FACTS: Fernandez was hired by DM Consunji as a laborer (November 1974). He worked for the latter until
March 1936, when his employment was terminated on the ground that the project to which he was assigned
was already completed. He thus filed a complaint for illegal dismissal with the Labor Arbiter.

The Labor Arbiter (May 1988) found that Fernandez worked continuously in various projects ranging from 5
to 20 years and belonged to a workpool (i.e. his dismissal was illegal). DM Consunji appealed, on the ground
that Fernandez was a project employee hired on a project-to-project basis, depending on the availability of
projects. It pointed to the gaps in Fernandez’ employment history to show that he was hired on an “off-and-
on” basis.

The NLRC (September 1989), in view of (1) lack of evidence to prove the continuous employment of
Fernandez, and (2) the intermittent nature of their work as shown by project contracts, ruled that Fernandez
was a project employee. Fernandez interposed a MFR which was denied for lack of merit (July 1991). The
NLRC also noted that the MFR was filed only on January 29, 1990, which was beyond the 10d reglementary
period from date of receipt of decision (November 13, 1989).

Without mentioning the denial of the MFR, Ricardo Fernandez filed a petition before the SC, assailing the
NLRC Decision, arguing that it is more in keeping with the intent and spirit of the law to consider him as
regular employees.

ISSUE: W/N the NLRC acted with GAD in reversing the Labor Arbiter’s decision by dismissing the
complaint for illegal dismissal on the finding that they were project employees. NO.

RULING:

DM Consunji presented material documents (covering November 5, 1974 - March 23, 1986) showing that
Fernandez was hired as a project employee with the specific dates of hiring, duration of hiring, dates of his lay-
offs, and the termination reports submitted to the Minister of Labor. Such documents clearly showed gaps of
month/s between the hiring of Fernandez in numerous projects where he was assigned. Thus, he is governed
by Policy Instruction No. 20:

Project employees are those employed in connection with a particular construction

project. They are not entitled to termination pay if they are terminated as a result of the
completion of the project or any phase thereof in which they are employed, regardless of the
number of projects in which they have been employed by a particular construction company.

The NLRC correctly observed that Fernandez failed to consider the requirement in Policy Instruction No. 20
that to qualify as a member of a work pool, the worker must still be considered an employee of the
construction company while in the work pool. There must be proof to the effect that Fernandez was under an
obligation to be always available on call of DM Consunji and that he was not free to offer his services to other
employers. However, Fernandez failed to introduce such evidence during the times when there were no
projects.

Thus, it is clear that Fernandez does not belong to the workpool from which DM Consunji would draw
workers for assignment to other projects at its discretion.

BRENT SCHOOL vs. ZAMORA (G.R. No. L-48494 - February 5, 1990)

FACTS:
Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. The contract was fixed for five (5)
years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Three months before
the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was given a copy of the
report filed by Brent School advising of the termination of his services effective on July 16, 1976. The stated
ground for the termination was "completion of contract, expiration of the definite period of employment."

Alegre protested and argued that although his contract did stipulate that the same would terminate on July 17,
1976, since his services were necessary and desirable in the usual business of his employer, and his employment
had lasted for five years, he had acquired the status of a regular employee and could not be removed except for
valid cause. 6 The Regional Director considered Brent School's report as anapplication for clearance to
terminate employment (not a report of termination), and accepting the recommendation of the Labor
Conciliator, refused to give such clearance and instead required the reinstatement of Alegre, as a "permanent
employee," to his former position without loss of seniority rights and with full back wages.

Brent School filed a motion for reconsideration but was denied. The School is now before this Court in a last
attempt at vindication. That it will get here.

ISSUE:
WON the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or
employment for a term.

RULING:
On one hand, there is the gradual and progressive elimination of references to term or fixed-period
employment in the Labor Code, and the specific statement of the rule that:

Regular and Casual Employment.— The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the
employee has been engaged to perform activities which are usually necessary or desirable in the usual business
or trade of the employer except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the employee or
where the work or service to be employed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: provided, that,
any employee who has rendered at least one year of service, whether such service is continuous or broken, shall
be considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such actually exists.

On the other hand, the Civil Code, which has always recognized, and continues to recognize, the validity and
propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on the freedom
of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services, except the
general admonition against stipulations contrary to law, morals, good customs, public order or public
policy. 26Under the Civil Code, therefore, and as a general proposition, fixed-term employment contracts are
not limited, as they are under the present Labor Code, to those by nature seasonal or for specific projects with
pre-determined dates of completion; they also include those to which the parties by free choice have assigned a
specific date of termination.

Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the gamut of
employment contracts to which the lack of a fixed period would be an anomaly, but would also appear to
restrict, without reasonable distinctions, the right of an employee to freely stipulate with his employer the
duration of his engagement, it logically follows that such a literal interpretation should be eschewed or avoided.
The law must be given a reasonable interpretation, to preclude absurdity in its application. Outlawing the whole
concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of
employer's using it as a means to prevent their employees from obtaining security of tenure is like cutting off
the nose to spite the face or, more relevantly, curing a headache by lopping off the head.

Accordingly, the clause in said article indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein should be construed to refer to the
substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears
that the employer and employee dealt with each other on more or less equal terms with no moral dominance
whatever being exercised by the former over the latter.

Alegre's employment was terminated upon the expiration of his last contract with Brent School on July 16,
1976 without the necessity of any notice. The advance written advice given the Department of Labor with copy
to said petitioner was a mere reminder of the impending expiration of his contract, not a letter of termination,
nor an application for clearance to terminate which needed the approval of the Department of Labor to make
the termination of his services effective

AM Oreta vs NLRC
FACTS:
Private respondent Grulla was engaged by Engineering Construction and Industrial Development
Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its projects in Jeddah, Saudi Arabia.
The contract of employment, which was entered into June 11, 1980 was for a period of twelve (12) months.

On October 9, 1980, he received a notice of termination of his employment. He filed a complaint for
illegal dismissal. Petitioner contends that the respondent Grulla was validly dismissed because the latter was
still a probationary employee; and that his dismissal was justified on the basis of his unsatisfactory performance
of his job during the probationary period.

ISSUES:

Whether respondent Grulla was illegaly terminated by the petitioner?

HELD:

Yes. A perusal of the employment contract reveals that although the period of employment of respondent
Grulla is twelve (12) months, the contract is renewable subject to future agreements of the parties. It is clear
from the employment contract that the respondent Grulla was hired by the company as a regular employee and
not just mere probationary employee. Also, nowhere in the employment contract executed between petitioner
company and respondent Grulla is there a stipulation that the latter shall undergo a probationary period for
three months before he can qualify as a regular employee.

Respondent Grulla was not, in any manner, notified of the charges against him before he was outrightly
dismissed. Neither was any hearing or investigation conducted by the company to give the respondent a chance
to be heard concerning the alleged unsatisfactory performance of his work.