Jao v. BCC Products BCC Products Sales Inc. and its president, Terrance Ty, The control test, under which the person for whom the
Sales, Inc. employed Charlie Jao as comptroller. A month after, he was services are rendered reserves the right to direct not only the
barred from entering the premises of BCC. He filed a end to be achieved but also the means for reaching such end
CONTROL TEST compliant for illegal dismissal, reinstatement with full is generally relied on by the courts.
backwages.
The existence of an employer-employee relationship is a question of
SC: NO EER. Jao worked in BCC as representative of fact.
COMPTROLLER Sobien Food Corporation (SFC), major creditor and supplier
FOR ANOTHER of BCC. He acted for the benefit and in the interest of SFC GENERAL RULE: The Court is not a trier of facts; a re-examination
COMPANY
more than BCC. of factual findings cannot be done.
EXCEPTION: The Court may look into factual issues in labor cases
when the factual findings of the Labor Arbiter, the NLRC, and the CA
are conflicting.
Tenazas v. R. Villegas Tenazas, Francisco, and Endraca filed for illegal dismissal In labor cases (like administrative and quasi-judicial), the quantum
Taxi Transport against R. Villegas Taxi Transport and Romualdo Villegas. of proof necessary is substantial evidence.
QUANTUM OF Tenazas – his taxi unit was sideswiped by another vehicle. There is no hard and fast rule designed to establish elements of
EVIDENCE IN LABOR Upon reporting the incident, he was allegedly scolded and EER. Any competent and relevant evidence may be admitted (IDs,
CASES told to leave because he was fired. cash vouchers, SSS registration, appointment letters, payrolls,
employment contracts).
STRAINED Francisco – averred that his dismissal was brought about by
RELATIONS the company’s unfounded suspicion hat he was organizing a An illegally dismissed employee is entitled to two reliefs:
DOCTRINE labor union. BACKWAGES AND REINSTATEMENT. They are separate and
distinct. In instances where reinstatement is no longer feasible
Endraca – fired for not being able to meet his boundary for because of strained relations between the employee and the
the day. employer, separation pay is granted. An illegally dismissed
TAXI DRIVERS
employee is entitled to either reinstatement, if viable, or
R: Tenazas unit needs overhaul and was advised to wait until separation pay if reinstatement is no longer viable, and
further notice; Endraca was a spare driver; Francisco was not backwages.
their employee
The normal consequences of respondents’ illegal dismissal, then,
are reinstatement without loss of seniority rights, and payment of
Manila Hotel Corp. v. MHICL is a corporation duly organized and existing under the Under the rule forum non conveniens, a Philippine court or agency
NLRC laws of Hing Kong. MHC is an incorporator of MHICL, owning may assume jurisdiction over the case if it chooses to do so
50% of its capital stock. By virtue of a “management provided:
JURISDICTION OF agreement” with the Palace Hotel (Wang Fu Company 1) the Philippine court is one to which the parties may
NLRC and LA Limited), MHICL trained the personnel and staff of the Palace conveniently resort to
Hotel at Beijing, China. 2) the Philippine court is in a position to make an intelligent
FORUM NON decision as to the law and facts
CONVENIENS While employed in Mazoon Printing Press in Oman, Marcelo 3) the Philippine court has or is likely to have power to enforce
Santos received a letter from General Manage of Palace its decision
Hotel offering him same position as printer, with higher 4) All incidents of the case, from the time of the recruitment to
salary. June 4, 1988 employment contract stated that it will employment to dismissal occurred outside the Philippines.
commence in Sept. 1, 1988 for a period of 2 years. In 1989,
Santos was given 1-month notice of his release from Labor Arbiters have exclusive and original jurisdiction:
employment. 1) unfair labor practices
2) termination disputes
SC: NLRC has no jurisdiction. 3) if accompanied with claim for reinstatement, wages, pay
rates, hours of work, and other terms and conditions of
The main aspects of the case transpired in two foreign employment
jurisdictions and the case involves purely foreign elements. 4) claims for actual, moral, exemplary, and other forms of
MHICL not liable because it signed the employment contract damages arising from EER
as “mere witness.” NO EER between MHICL and Santos. 5) all other claims arising from EER, except compensation,
Palace hotel has EER with Santos. SSS, Medicare, and maternity benefits. NLRC shall have
exclusive appellate jurisdiction over cases decided by Labor
Arbiter.
*What if control test exists, but the three other elements are absent?
No EER. The Court said “most important,” not the “only important.”
*So who’s the real employer? The real employer is the one who
complies with all the four. If we go to the labor contracting, it’s the
one who controls. The security agency will just be agent of the
employer.
*Theoretical question of whether it can be split? NO.
Canlubang Security Canlubang Automotive Resources Corporation (CARCO) had RIGHT-OF-CONTROL TEST – where the person for whom the
Agency Corp v. NLRC a security service contract with Canlubang Security Agency services are performed reserves a right to control not only the end to
(CSA) whereby the latter agreed to secure, guard, and be achieved but also the means to be used in reaching such as end.
RIGHT OF CONTROL protect CARCO’s properties and interest. Arsenio Bartolay, Express stipulation between CSA and CARCO.
TEST et. al filed a complaint for illegal termination against CSA and
CARCO, but later on file an MTD against CSA. It is the agency that recruits, hires, and assigns the work of its
watchmen.
SC: Contract of security service between CSA and *Written agreements are only first layers of defense. It will not
CARCO provides that, “the guards are employees of the dismiss the case outright because the Court will look into its actual
agency and NOT that of the client company. implementation.
*There was a quitclaim in this case but SC said that it was
erroneous? It is a question of fact BUT it is also a question of law.
*CSA was still held liable because the quitclaim was an erroneous
presumption and thus void.
*Court frowns upon quitclaims in employment contracts/issues
*Control does not have to be actual. Even if it shitty, it’s still control.
Chavez v. NLRC Pedro Chavez is employed by Supreme Packaging WAGES – remuneration or earnings, however designated, capable
(manufacturing cartons and other packaging materials) as of being expressed in terms of money, whether fixed or ascertained
truck driver, delivering Supreme’s products from its factory in on a time, task, piece, or commission basis, or other method of
TRUCK DRIVER Mariveles to various customers in Manila. (He can only park calculating the same, which is payable by an employer to an
WITH SPECIFIC in Makati and Bataan) employee under a written or unwritten contract of employment for
INSTRUCTIONS ON work done or to be done, or for service rendered or to be rendered.
DELIVERY Chavez wanted to avail of the benefits that regular
AND employees were receiving (OT pay, nightshift differential, and Under the Rules Implementing the Labor Code, every employer is
th
13 -month). Later, he filed a complaint for regularization in required to pay his employees by means of payroll.
the Regional Arbitration, but he was terminated before case
could be heard. He filed for illegal dismissal, unfair labor INDEPENDENT CONTRACTOR – One who carries on a distinct
practice, and non-payment of overtime pay. Supreme and independent business and undertakes to perform the job, work,
averred that Chavez was an independent contractor. or service on its own account and under its own responsibility
according to its own manner and method, free from the control and
Francisco v. NLRC Angelina Francisco was hired by Kasei Corp during In addition to the standard of right-of-control, the existing economic
incorporation as Accountant and Corporate Secretary. She conditions prevailing between the parties, like the inclusion of the
TWO-TIERED TEST: was also designated as Liaison Officer to Makati City to employee in the payrolls, can help in determining the existence of
CONTROL TEST AND secure business permits, construction permits, and other EER.
ECONOMIC licenses for initial operation of company. Then designated as
DEPENDENCY TEST Acting Manager. She was replaced by Liza Fuentes and she There are instances when, aside from the employer’s power to
alleged that she was required to sign a prepared resolution control the employee with respect to the means and methods by
for her replacement but she was assured that she is still which the work is to be accomplished, economic realities of the
connected with Kasei; reduced her salary employment relations help provide a comprehensive analysis
of the true classification of the individual. The better approach
ACTING MANAGER Kasei said that she has no daily time record; never interfered would therefore be to adopt a two-tiered test involving:
REDUCED SALARY with her work; did not go through the usual procedure of 1) the putative employer’s power to control the employee with
selection. Her consultancy depended solely upon the will of respect to the means and methods by which the work is to
the management and her services as a “technical consultant” be accomplished
were only temporary and dependent on the needs of the 2) the underlying economic realities of the activity or
corp. relationship
Orozco v. Fifth PDI engaged the services of Wilhelmina Orozco for its The significant factor in determining the relationship of the parties is
Division CA weekly Lifestyle column. She religiously submitted her work, the presence or absence of supervisory authority to control the
except for her 6-month New York sting wherein she still sent method and the details of performance of the service being
EXTENT OF several articles. She was told that her column will not be rendered, and the degree to which the principal may intervene to
CONTROL published anymore because her column failed to improve exercise such control.
and superficially poorly written. She filed a complaint for
PHIL. DAILY illegal dismissal, backwages. The test is whether the employer controls or has reserved the
INQUIRER right to control the employee, not only as to the work done, but
COLUMNIST SC: NO EER. The terms of works were arbitrarily also as to the means and methods by which the same is
decided upon by PDI. accomplished.
SSS v. CA Margarita Tana, widow of the late Ignacio Tana, alleged that EMPLOYEE:
her husband was an employee of Conchita Ayalde as a - any person who performs services for an employer
DEFINITION OF farmhand in 2 sugarcane plantations she owned (La Carlota). - which either or both mental and physical efforts are used
EMPLOYEE He regularly received minimum wage, SSS contributions and and
medicare were deducted from his wages. SSS revealed that - who receives compensation for such services
neither Ayalde nor her administrator, Maghari, was registered
as members-employers of SSS. Ayalde belied Tana’s No particular form of evidence is required to prove the existence of
FARMHAND accusations and said that Tana was an IC, intermittently EER. Any competent and relevant evidence to prove the relationship
EMPLOYEE hired to plow, harrow, or burrow. may be admitted.
Tongko v. The 2008 SC decision: EER between Manulife and Gregorio Generally, the determinative element is the control exercised
Manufacturers Life Tongko and latter was illegally dismissed over the one rendering service. The employer controls the
Insurance Co. Inc. employee both in the results and in the means and manner of
(Manulife) 1977: Career Agent’s Agreement – “Agent is an achieving this result. The principal in agency relationship, on
independent contractor and no EER is created and ay be the other hand, also has the prerogative to exercise control
CONTROL IN EER v. terminated for any breach.” over the agent in undertaking the assigned task based on the
Singer Sewing Singer Sewing Machine Company-Singer Machine Collectors COLLECTION AGENCY AGREEMENT – defines the relationship
Machine Company v. Union Baguio filed a direct certification as the sole and between the Company and each of the union members who signed
Drilon exclusive bargaining agent of all collectors of the company. a contract.
The Company opposed the petition mainly on the ground that
EXTENT OF the union members are actually not employees but are IC as
CONTROL evidenced by the collection agency agreement, which they
signed.
UNION OF SC: NO EER.
COLLECTING
AGENTS
10
Mafinco Trading Corp. Cosmos Factoy (Malabon, Rizal) appointed Mafinco Trading FACTORS TO CONSIDER IN IC:
v. Ople Corp. as it sole distributor of Cosmos soft drinks in Manila – - whether contractor is carrying on an independent business
contract between Repomanta and Moralde and Mafinco to - work is part of employer’s business; nature & extent of work
PEDDLING “buy and sell.” Contract will remain in force for 1-yr unless - term and duration of relationship
CONTRACT sooner terminated by either party upon 5 days’ notice to the - right to assign performance of work
other. - power to terminate relationship
11
Besa v. Trajano Kaisahan ng Manggagawang Pilipino (KAMPIL), a legitimate It is important in the determination of who shall be included in a
labor union duly registered with DOLE filed a Petition for proposed bargaining unit because it was sine qua non. The
Certifiication Election. Besa (Besa’s Custombuilt Shoes) fundamental and essential condition that a bargaining unit be
SHOESHINER v. opposed and alleged that there is no EER. composed of employees. Failure to establish this juridical
PIECE WORKER relationship between the union members and the employer affects
If shoeshiners are not employees, the petition for certification the legality of the union itself.
election must be dismissed because of failure to comply with
mandatory requirement that 30% of employees must support The shoe shiner is distinct from a piece worker because while
the petition (must have majority valid votes) the latter is paid for work accomplished, he does not
contribute anything to the capital of the employer. The
SC: NO EER. Shoeshiners not employees. employer pays the wages of the piece worker. The shoeshiner
is paid directly by customer. The shoeshiner can take his share
of proceeds everyday if he wanted to or weekly.
Tan v. Lagrama Leovigildo Lagrama is a painter, making ad billboards and Payment by result is a method of compensation and does not define
murals for motion pictures shown at Empress, Supreme, and the essence of the relation. It is a method of computing
Crown Theatre for more than 10 yrs. Rolando Tan is the compensation, not a basis for determining the existence or absence
president of Supreme Theater Corp and GM of Crown and of EER.
Empire. Lagrama was summoned one day, scolded for
PAINTER OF
AD BILLBOARDS “urinating” in his work area and was fired. Lagrama filed a The primary standard for determining regular employment is
complaint for illegal dismissal. the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or
SC: EER. business of the employer.
- Tan engaged the services of Lagrama w/o
intervention of third party. Bureau of Working Conditions classifies workers paid by results:
- Performed his work under the control and 1) Those whose time and performance is supervised by the
supervision of Tan employer. Involves the element of control and supervisions
- There is reasonable relation to the job of Lagrama over the manner the work is to be performed.
painting billboards to let people know what movie is 2) Those whose time and performance is unsupervised by the
shown in the movie theater employer.
12
Kimberly-Clark v. KILUSAN-OLALIA is the new union. They challenged the Workers become regular employees, by operation of law,
DOLE Sec. incumbency of UKCEO by filing a petition for certification which is one year after they were employed. While the actual
election. The latter won by a margin of 20 votes so regularization entails mechanical act of issuing regular appointment
KILUSAN-OLALIA challenged the 64 ballots of allegedly papers, the status of regular employment attaches to the casual
REGULAR “casual workers.” Later on a MOLE Order was issued stating workers on the day immediately after the end of his first year of
EMPLOYEE BY that the casual workers, excluding janitorial, have attained service.
PERIOD regular status.
So the reckoning point is his hiring date.
What is the reckoning point in determining who among the
casual employees are entitled to regularization?
St. Mary’s University Marcelo Danelo was teaching in the school from 1992-1995. Full-time teachers who have satisfactorily completed their
v. CA He was not given a teaching assignment in 1999-2000. probationary period shall be considered regular or permanent. The
13
The school could not lawfully terminate a part-timer before the end
of the agreed period without just cause. But once the period,
semester, or term ends, there is no obligation on the part of the
school to renew the contract of employment for the next period,
semester, or term.
*Are the rules in the previous two cases not applicable in this case?
While there is a general test of whether necessary or desirable, it is
not applicable in the case of teachers, because what is applicable
here is the test of their load.
*Normally, employees claim regular employment and employers
deny. Why? Regular employees enjoy security of tenure.
*How do you reconcile? You don’t.
*First kind of regular employee – regular employee because of
nature of work (usually necessary or desirable); security of tenure
from the moment of hiring
Second kind – regular employee because of the length of time even
though work may only be incidental to the trade or business;
security of tenure only upon regularization.
*regular employee with respect to the activity? If the business is
barbershop, the regular employees are the barbers (usually
necessary or desirable); if the barbershop has a garden and
engaged the services of a gardener – casual employee, even if he is
14
Robinsons Galleria v. Ranchez was a probationary employee for 5 mos as a There is probationary employment when the employee upon his
Ranchez cashier. 2 weeks after, she reported loss of 20,000 in the engagement is made to undergo a trial period during which the
company locker. Although she owed the responsibility, an employer determines his fitness to qualify for regular employment
PROBATIONARY information for Qualified Theft was filed against her. She was based on reasonable standards made known to him at the time of
EMPLOYEE also strip-searched and stayed in jail for two weeks. She filed engagement.
a complaint for illegal dismissal and damages
A probationary employee, like a regular employee, enjoys security of
R: She wasn’t dismissed yet when she filed complaint. Strip tenure. However, in cases of probationary employment, aside from
PROBATIONARY search was just investigation. just or authorized causes of termination, an additional ground is
CASHIER provided under Article 281 of the Labor Code, i.e., the probationary
SC: Robinsons failed to accord her substantive and employee may also be terminated for failure to qualify as a regular
procedural due process. She was constructively dismissed It employee in accordance with reasonable standards made known by
was unreasonable to charge her with abandonment when the employer to the employee at the time of the engagement.
she didn’t return to work after being jailed.
Ranchez was a probationary employee at the time she was Valid dismissal:
constructively dismissed by petitioners, she is entitled to 1) just cause
separation pay and backwages. the backwages that should 2) authorized cause
be awarded to respondent shall be reckoned from the time of 3) fails to qualify as regular employee based on standards
her constructive dismissal until the date of the termination of known to her
her employment. The lapse of her probationary
employment without her appointment as a regular Where no standards are made known to an employee at the time,
employee of petitioner Supermarket effectively severed he shall be deemed as regular employee
the employer-employee relationship between the
parties. The due process requirements under the Labor Code are mandatory
and may not be supplanted by police investigation or court
proceedings. The criminal aspect of the case is considered
independent of the administrative aspect. They are mandated to
15
*The employer must prove that the employee agreed and justifiable
reasons.
*Can probationary period be extended? Yes, if employer wants to
give one more chance or longer period to prove himself or if
technical in nature and the nature of work requires specific set of
skills or training.
*4 self-descriptive – maid, cook, driver, messenger
*How do you count 1 year? It has to be 365 days (general). But
there are instances when SC said after such lapse of time, even if
sum is not 365 days, considered the individual regular?
Canadian Dalangin was hired as Immigration and Legal Manager, The essence of a probationary period of employment fundamentally
Opportunities v. screening clients’ applications for immigration to Canada to lies in the purpose or objective of both the employer and the
Dalangin Jr. ensure that they are in accordance with Canadian and PH employee during the period. While the employer observes the
laws. Just a month after, he was terminated for being “unfit: fitness, propriety and efficiency of a probationer to ascertain whether
PROBATIONARY and “unqualified” because of utter disregard to company he is qualified for permanent employment, the latter seeks to prove
PERIOD policies and lack of concern for company’s interest for failing to the former that he has the qualifications to meet the reasonable
to attend the required Values Formation Seminar. He filed for standards for permanent employment.
illegal dismissal claiming that he was not afforded a
reasonable time to defend himself before he was dismissed.
16
Carvajal v. Luzon Mylene Carvajal was employed as a trainee-teller by Luzon In all cases of probationary employment, the employer shall make
Development Bank Dev‘t Bank under a 6-month probationary employment. Later, known to the employee the standards under which she will qualify
Bank sent her a Memorandum directing her to explain in as a regular employee at the time of his engagement. Where no
REASONABLE writing why she should not be subjected to disciplinary action standards are made known to the employee at that time, he shall be
STANDARDS OF for “chronic tardiness” (8 times). She was later informed that deemed as regular employee.
COMMON her employment was terminated effective a month after
KNOWLEDGE employment for reasons: not an effective frontliner, A probationary employee, like a regular employee, enjoys a security
mistakenly cleared a check, tardiness, absenteeism, of tenure.
17
Abbott Laboratories v. Alcaraz was employed as Regulatory Affairs Manager on a An employer is deemed to have made known the standards that
Alcaraz (2013) probationary basis. With his organizational chart and job would qualify a probationary employee to be a regular employee
description of Alcaraz’s work. She was also briefed on her when it has exerted reasonable efforts to apprise the employee of
duties and responsibilities during orientation. She was also what he is expected to do or accomplish during the trial period of
sent an e-mail, which contained an explanation of procedure probation. The exception is when the job is self-descriptive in
for evaluating the performance of probationary employees. nature, or instance in the case of maids, cooks, drivers, or
The standard procedure of evaluation involves two reviews: messengers.
first on the third month and second on the fifth month from
date of employment. She was later called to a meeting and Adequate performance of one’s duties is, by and of itself, an
she was informed that she failed to meet the regularization inherent and implied standard for a probationary employee to be
standards for the position of Regulatory Affairs Manager. She regularized; assessment of adequate performance is in the nature of
was requested to tender her resignation, else they be forced management prerogative which when reasonably exercised, should
to terminate her services. be respected.
18
Abbott Laboratories v. There was no effort at all was ever made for the conduct of The performance standards to be met are the employer’s specific
Alcaraz (Brion, an assessment or evaluation of the respondent’s expectations of how the probationary employee should perform.
dissenting) performance. There was no evidence of any performance Knowledge of duties and responsibilities is different from the
standard furnished the respondent so that the ponencia could measure of how these duties and responsibilities should be
only deduce the existence of performance standards from its delivered. Not only must there be express performance standards,
assumptions and stretched realizations. there must be effective communication.
Abbott Laboratories v. SC Resolution: It is not the probationary employee’s job The employer cannot bear out in exacting detail at the beginning of
Alcaraz (2014) description but the adequate performance of his duties and the engagement what he deems as “quality work” especially since
responsibilities, which constitutes the inherent and implied the probationary employee has yet to submit the required output. In
EXCEPTION TO standard for regularization. The determination of “adequate the ultimate analysis, the communication of performance standards
STANDARDS performance” is not measurable by quantitative specification. should be perceived within the context of the nature of the
REQUIRED TO BE It is also hinged on the qualitative assessment of the probationary employee’s duties and responsibilities.
MADE KNOWN employee’s work; by its nature, this largely rests on the
reasonable exercise of the employer’s management *Abbott (exceptions): he is manager, and that you have informed
SELF-DESCRIPTIVE prerogative. him of his responsibilities
JOBS *General rules on reasonable standards: has to be given at the time
of engagement
REGULATORY *exception: self-descriptive, maid, cooks, driver, messengers
AFFAIRS
*Brion: Agrees that there is an exception. But this case is a manager
MANAGER
2nd Abbott: even managers, lawyers, artists, journalists
Filipinas Pre- Roger Puente was initially hired as an installer, then Without a valid cause, the employment of project employees cannot
fabricated v. Puente promoted to mobile crane operator. His work was not be terminated prior to expiration. Otherwise, they shall be entitled to
dependent on the completion or termination of any project; reinstatement with full back wages. However, if the project or work is
PROJECT continuous and without interruption for the past 10 yrs. He completed during the pendency of the ensuing suit for illegal
EMPLOYEE was then dismissed from his employment allegedly because dismissal, the employees shall be entitled only to full back wages
he was a project employee. from the date of the termination of their employment until the actual
10 YEARS completion.
PROJECT SC: The contracts of employment of Puente attest to the fact
EMPLOYEE
that he was hired for specific projects. His employment was Indicators of project employment (either one or more):
coterminous with the completion of the projects for which he 1) Duration of the specific/identified undertaking for which the
19
Gadia v. Sykes Asia Sykes Asia is a corporation engaged in BPO. In 2003, Alltel A project employee is assigned to a project which begins and ends
Communications contracted Sykes to accommodate the at determined or determinable times. The services of employees
PROJECT needs and demands of its clients for its postpaid and prepaid who are hired as “project-based employees” may be lawfully
EMPLOYEE v. services. Sykes Asia hired Gadia et. al as customer terminated at the completion of the project.
REGULAR representatives, team leaders, and trainers for Alltel Project.
EMPLOYEE When Alltel terminated its contract with Sykes, Sykes sent The principal test for determining whether particular employees are
end-of-life notices to Gadia et. al, informing them of their properly characterized as “project-based” as distinguished from
dismissal from employment due to termination of contract. “regular” is whether or not the employees were assigned to carry out
20
Omni Hauling Services Omni Hauling Services was awarded a 1-year service Employers claiming that their workers are project employees should
v. Bernardo Bon contract by the local government of Quezon City to provide not only prove that the duration and scope of the employment was
garbage hauling service. Omni hired respondents as garbage specified at the time they were engaged, but also that there was
truck drivers and paleros who were then paid on a per trip indeed a project.
basis. Thy were required to sign employment contracts which
provided that they will be “rehired” only for the duration of the Even though the absence of a written contract does not by itself
same period. However, respondents refused to sign, claiming grant regular status to respondents, such a contract is evidence that
that they were regular employees since they were engaged respondents were informed of the duration and scope of their work
to perform activities which were necessary and desirable to and their status as project employees; where no other evidence was
Omni’s usual business or trade. offered, the absence of the employment contracts raises a serious
question of whether the employees were properly informed of their
SC: Regular employees by operation of law. Records are employment status as project employees at the time of their
bereft of any evidence to show that respondents were engagement.
made to sign employment contracts explicitly stating
that they were going to be hired as project employees.
Neither is petitioners’ allegation that respondents were
duly apprised of the project-based nature of their
employment. The logical conclusion is that respondents
were not clearly and knowingly informed of their
employment status. The presumption of regular
employment should be accorded in their favor.
Hacienda Bino v. Hacienda Bino is a 236-hectare sugar plantation located at To be excluded from those classified as regular employees, it
Cuenca Brgy. Orong, Kabankalan City, Negros Occidental. 76 is not enough that they perform work or services that are
respondents were part of the workforce performing various seasonal in nature. They must have been employed only for
GENERAL RULE FOR works such as cultivation, planting, fertilization, weeding, the duration of the season.
SEASONAL harvesting. During off-milling season, they received a Notice
EMPLOYEES which says that all those who signed in favor of CARP are
expressing their desire to get out of employment on their own
volition. Regarded as termination of their employment, they
filed a case for illegal dismissal. Petitioner insists that they
are mere seasonal employees and stare decisis applies from
the case of Mercado.
21
*Mercado Sr. v. NLRC Mercado et al were agricultural workers utilized by Aurora The second paragraph of Art. 280 demarcates as “casual
Cruz in all the agricultural phases of work on 7 ½ hectares of employees,” all other employees who do not fall under the definition
EXCEPTION TO rice land and 10 hectares of sugar land. They were allegedly of the preceding paragraph. The proviso, in said second paragraph,
REGULAR illegally dismissed from employment. deems as regular employees those “casual employees” who have
SEASONAL rendered at least one year of service regardless of the fact that such
Cruz averred that she engaged their services but only to do a service may be continuous or broken.
particular phase of agricultural work necessary in rice
production and/or sugar can production, after which they The second paragraph in Art. 280 was not designed to stifle small-
would be free to render services to other farm owners who scale businesses nor to oppress agricultural land owners to further
need their services. the interest of laborers, agricultural or industrial. The provision is
applicable only to employees who are deemed “casuals” but not to
SC: They are only required to perform phases of agricultural “project” employees.
work for a definite period, after which their services are
available to any farm owner, such that the planting of rice
and sugar cane thereon could not possibly entail a whole
year operation. Although Cruz constantly availed herself of
the petitioners’ services from year to year, it was clear from
the facts therein that they were not in her regular employ.
Petitioners therein performed different phases of agricultural
work in a given year. However, during that period, they were
free to work for other farm owners, and in fact they did. In
other words, they worked for respondent, but were
nevertheless free to contract their services with other farm
owners.
22
Brent School v. Doroteo Alege was engaged as athletic director by Brent Article 302 of the Code of Commerce: “In cases in which the
Zamora School. The contract fixed a specific term for its existence for contract of employment does not have a fixed period, any of the
5 years. 3 months before expiration, Alegre was given a parties may terminate it, notifying the other one month in advance.
FIXED-TERM notice advising him of the termination of his services. The Civil Code provided that there was no prohibition against term- or
EMPLOYMENT stated ground for termination was “completion of contract, fixed-period employment.
expiration of the definite period of employment.” He filed for
illegal dismissal, alleging that although his contract did The decisive determinant in term employment should not be the
stipulate a fixed-term, his services were necessary and activities that the employee is called upon to perform, but the day
desirable in the usual business of his employer. certain agreed upon by the parties for the commencement and
termination of their employment relationship, a day certain being
SC: Stipulations for a term were explicitly recognized as valid understood to be “that which must necessarily come, although it
by this Court. may not be known when.”
23
Poseidon Fishing v. Poseidon Fishing (deep-sea fishing industry) employed If from the circumstances it is apparent that periods have been
NLRC Jimmy Estoquia as Chief Mate. Then Boat Captain to Radio imposed to preclude acquisition of tenurial security by the employee,
Operator. One day, he failed to record a 7:25 am call in one they should be disregarded for being contrary to public policy.
WHEN FIXED of the logbooks, but immediately corrected when he noticed
PERIOD IS USED TO it. He was scolded and was later discharged. He filed a The act of hiring and re-hiring in various capacities is a mere gambit
CIRCUMVENT THE complain for illegal dismissal. employed by petitioner to thwart the tenurial protection of employee.
LAW Such pattern of re-hiring and the recurring need for his services are
SC: the agreement has such an objective to frustrate the testament to the necessity and indispensability of services of
security of tenure of Eustoquia. He worked for 12 years and employee to Poseidon’s business or trade.
was repeatedly hired as part of the boat’s crew and acted in
different capacities.
Fonterra v. Largado Fonterra sent Zytron a letter terminating its promotions Fixed-term employment contracts are not limited, as they are under
contract. Fonterra then entered into an agreement for the present Labor Code, to those by nature seasonal or for specific
manpower supply with A.C. Sicat Marketing and Promotional projects with predetermined dates of completion; they also include
Services. Desirous of continuing their work as TMRs, those to which the parties by free choice have assigned a specific
respondents submitted their job applications with A.C. Sicat, date of termination. The determining factor of such contracts is not
which hired them for a term of five (5) months. When the duty of the employee but the day certain agreed upon by the
respondents’ 5-month contracts with A.C. Sicat were about to parties for the commencement and termination of the employment
expire, they allegedly sought renewal thereof, but were relationship.
24
OKS Design Tech OKS DesignTech, Inc. hired Mary Jane Caccam as an An employee is said to be under a fixed-term employment when he
accountant under a Contract of Employment for a Fixed is hired under a contract which specifies that the employment will
Period from January 21, 2008 to June 21, 2008. Thereafter, last only for a definite period.
the contract was renewed for the period June 22, 2008 to
June 21, 2009. On June 8, 2009, respondent received a The following are indicators under which fixed-term employment
letter dated June 6, 2009 signed by the Company Manager, could not be construed as a circumvention of the law on security of
informing her of the expiration of her contract on June 21, tenure:
2009. She filed a complaint for illegal dismissal. 1) The fixed period of employment was knowingly and
voluntarily agreed upon by the parties without any force,
SC: There is no showing that the subject contracts were used duress, or improper pressure being brought to bear upon
as subterfuge to deny respondent of her security of tenure. the employee and absent any other circumstances vitiating
There was no ambiguity in the said contracts when it his consent; or
stipulated that the employee may be terminated if he “fails to 2) It satisfactorily appears that the employer and the employee
meet the reasonable standards made known to him.” While dealt with each other on more or less equal terms with no
such provision would commonly appear in a probationary moral dominance exercised by the former or the latter.
contract pursuant to Article 295 of the Labor Code, its
inclusion in the fixed-period contracts in this case never gave Even if an employee is engaged to perform activities that are
rise to an implied probationary employment status, for which necessary or desirable in the usual trade or business of the
she was to be evaluated by the company under certain employer, the same does not preclude the fixing of employment for
regularization standards during a specified trial period, simply a definite period.
because respondent was never employed on a probationary
25
26
Fuji Television v. In 2005, Arlene S. Espiritu was engaged by Fuji Television That a person has a disease does not per se entitle the employer to
Espiritu Network, Inc. as a news correspondent/producer “tasked to terminate his or her services. Termination is the last resort. At the
report Philippine news to Fuji through its Manila Bureau field very least, a competent public health authority must certify that the
ANOTHER KIND OF office.” Arlene’s employment contract initially provided for a disease cannot be cured within six (6) months, even with
INDEPENDENT term of one (1) year but was successively renewed on a appropriate treatment.
CONTRACTOR yearly basis with salary adjustment upon every renewal.
In view of the “distinct and independent business” of independent
Arlene was diagnosed with lung cancer. She informed Fuji contractors, no employer-employee relationship exists between
about her condition. In turn, the Chief of News Agency of Fuji independent contractors and their principals.
informed Arlene “that the company will have a problem
renewing her contract” since it would be difficult for her to DO 18-A defines a contractor as having “an arrangement whereby a
perform her job. She “insisted that she was still fit to work as principal agrees to put out or farm out with a contractor the
certified by her attending physician.”Arlene and Fuji signed a performance or completion of a specific job, work or service within a
nonrenewal contract on May 5, 2009 where it was stipulated definite or predetermined period, regardless of whether such job,
that her contract would no longer be renewed after its work or service is to be performed or completed within or outside the
expiration on May 31, 2009. Arlene affixed her signature on premises of the principal.”
the nonrenewal contract with the initials “U.P.” for “under
protest.” She filed a complaint for illegal dismissal. This department order also states that there is a trilateral
relationship in legitimate job contracting and subcontracting
SC: She is a regular employee with a fixed-term contract. arrangements among the principal, contractor, and employees of the
She was not contracted on account of any peculiar ability, contractor. There is no employer-employee relationship between the
special talent, or skill. The fact that everything used by Arlene contractor and principal who engages the contractor’s services, but
in her work was owned by Fuji negated the idea of job there is an employer-employee relationship between the contractor
contracting. Her contract also indicated that Fuji had control and workers hired to accomplish the work for the principal.
over her work because she was required to work for eight (8)
27
TAPE v. Servaña Servaña was initially a security guard for RPN-9 and was Bundy cards are evident proofs of TAPE’s control; required to report
tasked to assist TAPE from 1987-2000. He used to be an for work during noontime program (definite work hours).
employee of Agro-Commercial Security, but when the latter
severed its relations with RPN 9, Servaña was absorbed by An identification card is usually provided not just as a security
TAPE and was detailed in Broadway Centrum for the Eat measure but to mainly identify the holder as a bona fide employee of
Bulaga show. the firm who issues it.
Semblante v. CA Semblante was hired as masiador (calls and takes bets rom Referees and bet-takers need to have the kind of expertise that is
gamecock owners and other bettors) and Pilar as characteristic of the game to interpret messages conveyed by mere
sentenciador (oversees the proper gadding of fighting cocks, gestures. They are akin to independent contractors who possess
determines the fighting cocks’ physical condition and unique skills, expertise, and talent to distinguish from ordinary
capabilities). Work starts at 1 pm and ends at 12mn or until employees.
early hours of the morning. They were issued ids. But one
day, they were prohibited to enter. Filed a complaint for *Talents – another class of independent contractors; the extent of
illegal dismissal. control is only to the result of their work. (Also, there is only bilateral
relationship).
28
Aliviado v. P&G Aliviado et. al all individually signed employment contracts Grave misconduct must be performed with wrongful intent. Loss of
with either Promm-Gem or SAPS for periods of more or less trust and confidence must be based on willful breach of trust –
five months a time. They were assigned at different outlets, intentionally, knowingly, and purposely without justifiable excuse.
supermarkets and stores where they handled all the products Moreover, the employee must hold a position invested with trust and
of P&G. They filed a complaint for regularization against confidence.
P&G. Later on, they were served termination letters for grave
misconduct and breach of trust for assailing the integrity and *True or False? If the contractor does not have substantial capital,
independence of the Company (Promm-Gem); alleged the arrangement is LOC? False. The contractor might have
employees were terminated verbally upon receipt of substantial investments (different from capital) AND must satisfy the
termination of Agreement with P&G (SAPS). element of performing activities directly related to the business of
principal.
SC: *Substantial investments – machinery, tools, equipment (as
Promm- Gem: independent contractor; ACS of 1M; PUC of opposed to 3M paid-up capital)
500,000; assets at combined 1.1M; has own warehouse and *Why was it important that there was only one client? It’s a badge of
office space LOC cause it looks like you don’t have an independent business and
your sole purpose is to supply workers.
SAPS: LOC; no substantial capital (31K); terminated *To be a legitimate contractor, do all elements in Section 4 need to
employees upon initiation of P&G; no other clients and has concur? The contractor or principal is only required to prove that
no intention to look for clients your are NOT a labor-only contractor.
Coca-Cola Bottlers v. Ricky Dela Cruz filed for regularization against Coca—Cola The contract between the principal and the contractor is not
Dela Cruz Bottles. They are route helpers assigned to work in Coca- the final word on how the contracted workers relate to the
Cola’s trucks. They go from sales offices or plants to principal and the purported contractor; the relationship must
customer outlets like sari-sari stores, restaurants, groceries, be tested on the basis of how they actually operate.
supermarkets. They were hired either directly by Coca-Cola
or its contractors (Peerless & Excellent Partners The nature of the work performed must be viewed from a
Cooperative), but no benefits and privileges like regular sales perspective of the business or trade in its entirety and not only in a
29
Petron v. Caberte Caberte et al were hired to work at Petron’s Bacolod Bulk The law presumes a contractor to be a labor-only contractor and the
Plant in San Patricio, Bacolod City, Negros Occidental as employees are not expected to prove the negative fact that the
LPG/Gasul fillers, maintenance crew, warehousemen, utility contractor is a labor-only contractor. Thus, it is not the employees
workers and tanker receiving crew of Petron. ABC entered but Petron which bears the burden of establishing that ABC is not a
into a Contract for Services and Contract for LPG Assistance labor-only contractor but legitimate independent contractor. Where
Services to provide utility and maintenance services to the principal is the one claiming that the contractor is a
Petron. They filed a complaint for illegal dismissal, legitimate contractor, the burden of proving the supposed
underpayment of wages and allowances. status of the contractor rests on the principal.
Temic v. Temic Union Warehouse department are divided into four sections – Contracting out of work is an employer proprietary right in the
receiving, raw materials warehouse, indirect warehouse, and exercise of its inherent management prerogative. It has a right to
finished goods. Their functions are interrelated. By practice, enter into the forwarding agreements, but these agreements should
Temic contracts out some of the work in the warehouse be limited to forwarding services; the petitioner failed to present
department to three independent contractors. clear and convincing proof of the delineation of functions and duties
30
New Golden City New Golden City Builders & Dev’t Corp – engaged in the The test to determine the existence of independent
Builders v. CA construction business – entered into a construction contract contractorship is whether one claiming to be an independent
with Prince David Dev’t Corp for the construction of a 17- contractor has contracted to do the work according to his own
store office and residential condominium building along methods and without being subject to the control of the
Katipunan Road. New Golden engaged he services of Nilo employer, except only to the results of the work.
Layno Builders to do the specialized “concrete works, form
works, and steel rebars works.” After the completion of the
phase for which Nilo Layno builders was contracted, the *Do you have to be registered with PCAB so DO 18-A won’t be
workers filed a complaint for unfair labor practice, illegal applied? Yes.
dismissal, etc.
Alilin v. Petron Corp Petron is a domestic corporation engaged in the oil business. While the jobs performed by petitioners may be menial and
It owns several bulk plants in the country for receiving, mechanical, they are nevertheless necessary and related to
31
ALPS Transportation Elpidio Rodriguez was previously employed as a bus For a dismissal to be valid, the rule is that the employer must
v. Rodriguez conductor. He entered into an employment contract with comply with both substantive and procedural due process
Contact Tours Manpower (Contact Tours) and was assigned requirements.
to work with petitioner bus company, ALPS Transportation.
Rodriguez was found to have committed irregularities when The presumption is that a contractor is a labor-only contractor
he had collected bus fares without issuing corresponding unless he overcomes the burden of proving that it has substantial
52
tickets to passengers. The report was annotated with the capital, investment, tools, and the like.” While ALPS Transportation
word “Terminate.” is not the contractor itself, since it is invoking Contact Tours’ status
Rodriguez without receiving any written notice of termination. as a legitimate job contractor in order to avoid liability, it bears the
He went back to the bus company a number of times, but it burden of proving that Contact Tours is an independent contractor.
refused to readmit him.
*It’s important to know who the supervisor and manager so they can
SC: Rodriguez was illegally dismissed. ALPS failed to prove communicate their instructions through them or the Service
that the dismissal was due to a just cause. Agreements should have KPIs (Key Performance Indicators) so the
principal need not give instructions to the employees.
Rosewood Processing All complainants were employed as security guards. They Should the contractor fail to pay the wages of its employees in
Inc v. NLRC filed a complaint for illegal dismissal was filed against accordance with law, the indirect employer (the petitioner in this
Veterans Philippines Scout Security Agency; Rosewood case), is jointly and severally liable with the contractor, but such
Processing was impleaded as third-party respondent. responsibility should be understood to be limited to the extent of the
work performed under the contract, in the same manner and extent
that he is liable to the employees directly employed by him. So long
32
Meralco Industrial MIESCOR is a client of Ofelia P. Landrito General Services Art. 109 provides that, “every employer or indirect employer shall be
Engineering Services (OPLGS), a business firm engaged in providing and held responsible with his contractor or subcontractor for any
Corp (MIESCOR) v. rendering general services, such as janitorial and violation of any provision of this Code.”
NLRC maintenance work to its clients. They executed a contract
whereby the latter would supply the petitioner janitorial Article 107 defines an indirect employer as “any person, partnership,
services, which include labor, materials, tools and equipment, association or corporation which, not being an employer, contracts
as well as supervision of its assigned employees, at with an independent contractor for the performance of any work,
petitioner’s Rockwell Thermal Plant in Makati City. The task, job or project.”
workers lodged a Complaint for illegal deduction, Article 106 provides that, “In the event that the contractor or
underpayment, etc., They were then pulled out from their subcontractor fails to pay the wages of his employees in accordance
work at the Thermal Plant so they amended their Complaint with this Code, the employer shall be jointly and severally liable with
to include the charge of illegal dismissal and impleaded his contractor or subcontractor to such employees to the extent of
33
Polyfoam-RGC v. Concepcion filed for a complaint for illegal dismissal. He Labor-only contracting, a prohibited act, is an arrangement where
Concepcion alleged that he was hired as a “packer” by Polyfoam as an the contractor or subcontractor merely recruits, supplies or places
“all-around” factory worker and served as such for almost six workers to perform a job, work or service for a principal.
years. Sometime in 2000, he allegedly discovered that his
time card was not in the rack and was later informed by the The test of independent contractorship is “whether one claiming to
security guard that he could no longer punch his time card. be an independent contractor has contracted to do the work
When he protested to his supervisor, the latter allegedly told according to his own methods and without being subject to the
him that the management decided to dismiss him due to an control of the employer, except only as to the results of the work.”
infraction of a company rule.
34
Vigilla v. Philippine PCCr is a non-stock educational institution, while the In legitimate job contracting, the law creates an employer-employee
College of Criminology petitioners were janitors, janitresses and supervisor under relationship for a limited purpose, i.e., to ensure that the employees
the supervision and control of Atty. Florante A. Seril, PCCr’s are paid their wages. The principal employer becomes jointly and
WHEN QUITCLAIMS Senior Vice President for Administration. The petitioners severally liable with the job contractor only for the payment of the
ARE VALID were made to understand, upon application with respondent employees’ wages whenever the contractor fails to pay the same.
school, that they were under MBMSI where Atty. Seril is also Other than that, the principal employer is not responsible for any
the President and General Manager. claim made by the employees.
Sometime in 2008, PCCr discovered that the Certificate of On the other hand, in labor-only contracting, the statute creates an
Incorporation of MBMSI had been revoked so it terminated employer-employee relationship for a comprehensive purpose: to
the school’s relationship with MBMSI, resulting in the prevent a circumvention of labor laws. The contractor is considered
dismissal of the employees or maintenance personnel under merely an agent of the principal employer and the latter is
MBMSI. The dismissed employees, led by their supervisor, responsible to the employees of the labor-only contractor as if such
Benigno Vigilla filed their respective complaints for illegal employees had been directly employed by the principal employer.
dismissal. They alleged that PCCr is their real employer The principal employer therefore becomes solidarily liable with the
because it had direct control over MBMSI’s operations and labor-only contractor for all the rightful claims of the employees.
there was really no contract between the two, selection and
hiring of employees were undertaken by PCCr.
35
Diamond Farms v. DFI owns an 800-hectare banana plantation in Davao. RA As a general rule, a contract is presumed to be a labor-only
SPFL, DARBMUPCO, 6657 mandates that commercial farms be subject to contractor, unless such contractor overcomes the burden of proving
Volter Lopez, et. al compulsory acquisition and distribution. DAR granted DFI a that it has the substantial capital, investment, tolls, and the like.
deferment privilege to continue agricultural operations until
1998. Because of adverse marketing problems, DFI recalled SC: DFI is the principal. It hired the individual contractors who in turn
DFI’s deferment privilege. DFI then offered to give up its hired their own men to work in the 698.88 hectares land of
rights and interest in the original plantation by Voluntary Offer DARBMUPCO as well as in the managed area in the plantation.
to Sell. Out of 800 hectares, DAR approved disposition of
689.88 hectares, the remaining 200 hectares were retained DARBMUPCO did not have anything to do with the hiring,
by DFI. Awarded plantation was turned over to qualified supervision and payment of the wages of the workers-respondents
36
SC: No document exist whereby Capt. Alekos and Cajeras Whether his salaries for the unexpired portion of his employment
reduced to writing their alleged “mutual consent” to the contract or three (3) months’ salary for every year of the unexpired
termination of their employment contract. Instead, petitioners term, whichever is less, comes into play only when the employment
presented the vessel’s Deck Log wherein an entry contract concerned has a term of at least one (1) year or more. This
unilaterally made by Capt. Alekos purported to show that is evident from the words “for every year of the unexpired term.”
private respondent himself asked for his repatriation. The
entry in no way satisfies the requirement of a bilateral
documentation to prove early termination of an overseas
employment contract by mutual consent required by the
Standard Employment Contract.
37
38
Skippers United Seafarers of MV Wisdom Stars Doza et. al filed a labor case Procedural due process in dismissal cases consists of the twin
Pacific v. Doza against local manning agency Skippers United Pacific, Inc. requirements of notice and hearing.
and its foreign principal, Skippers Maritime Services, Inc.,
Ltd. for unremitted home allotment for the month of The employer must furnish the employee with two written notices
December 1998, salaries for the unexpired portion of their before the termination of employment can be effected:
employment contracts, moral damages, exemplary damages, 1) the first notice apprises the employee of the particular acts
and attorney’s fees. Skippers, on the other hand, answered or omissions for which his dismissal is sought; and
with a claim for reimbursement of De Gracia, Aprosta and 2) the second notice informs the employee of the employer’s
Lata’s repatriation expenses, as well as award of moral decision to dismiss him. Before the issuance of the second
39
*Sameer Overseas Responding to an ad Sameer Overseas Placement Agency, Employers have the prerogative to impose productivity and quality
Placement Agency v. Inc., published, Joy C. Cabiles, submitted her application for standards at work. They may also impose reasonable rules to
Cabiles a quality control job in Taiwan.Joy’s application was ensure that the employees comply with these standards. Failure to
accepted. Joy was later asked to sign a one-year comply may be a just cause for their dismissal.
employment contract for a monthly salary of NT$15,360.00.
She alleged that Sameer Overseas Agency required her to Management prerogative is recognized in law and in our
pay a placement fee of P70,000.00 when she signed the jurisprudence. This prerogative, however, should not be abused. It is
employment contract; agreeing to work as quality control for “tempered with the employee’s right to security of tenure.”
one year. But she ended up as a cutter in Taiwan. One day, Employees are not stripped of their security of tenure when they
Mr. Huwang from Wacoal informed Joy, without prior notice, move to work in a different jurisdiction. With respect to the rights of
that she was terminated and that “she should immediately overseas Filipino workers, we follow the principle of lex loci
report to their office to get her salary and passport.” She was contractus - the law of the place where the contract is made
asked to “prepare for immediate repatriation. She then filed
for illegal dismissal against Sameer and Wacoal, its principal. The burden of proving that there is just cause for termination is on
the employer. Failure to show that there was valid or just cause for
40
Cadalin v. POEA Complainant-claimants allege that they were recruited by The applicable law in this jurisdiction is that of Philippine law. To
Administrator respondent-appellant AIBC for its accredited foreign enforce the one-year prescriptive period of the Amiri Decree No. 23
principal, Brown & Root, on various dates from 1975 to 1983. of 1976 as regards the claims in question would contravene the
They were all deployed at various projects undertaken by public policy on the protection to labor.
Brown & Root in several countriessuch as Saudi Arabia, 1) The overseas-employment contracts, which were prepared
Libya, United Arab Emirates and Bahrain, and in Indonesia by AIBC and BRII themselves, provided that the laws of the
41
42
De la Cruz v. Maersk Elite Shipping A.S. hired petitioner Dante D. de la Cruz as Section 17 of the POEA Revised Standard Employment Terms and
Filipinas third engineer for the vessel M/S Arktis Morning through its Conditions laid down disciplinary measures:
local agency in the Philippines, co-respondent Maersk
Filipinas Crewing Inc. for a period of 9 mos and basic salary The Master shall comply with the following disciplinary procedures
of $1004/mo. He was deployed to Jebel Ali, UAE. In a against an erring seafarer:
logbook entry dated June 18, 1999, chief engineer Normann A. The Master shall furnish the seafarer with a written
Per Nielsen expressed his dissatisfaction over petitioner’s notice containing the following:
43
GBMLT Manpower Victoria Malinao applied to petitioner for a job as teacher for Either party may terminate a contract even without cause are
Service v. Malinao deployment abroad. She was edorsed as an accounting legitimate if exercised in good faith. Thus, while either party has the
teacher. She then signed a POEA-approved Contract of right to terminate the contract at will, it cannot not act purposely to
Employment for Foreign Academic Personnel. Upon her injure the other.
arrival in Ethiopia, she was informed by the Vice Minister of
the Ministry of Education that her credential would have to be Where a person executing a waiver or quitclaim has done so
re-evaluated because she did not have master’s degree. She voluntarily with a full understanding of its terms and conditions,
was assigned to Alemaya University but she unilaterally coupled with the other person’s payment of credible and reasonable
decided to discontinue teaching the course in cooperative consideration, we have no choice on the matter but to uphold the
accounting that had been assigned to her. She said that transaction as valid and binding.
auditing, not accounting, was her specialization.
“Dire necessity” is an acceptable ground to nullify quitclaims only if
44
People v. Panis Four informations were filed on January 9, 1981, in the Court The number of persons dealt with is not an essential ingredient of
of First Instance of Zambales and Olongapo City alleging that the act of recruitment and placement of workers. Any of the acts
Serapio Abug, private respondent herein, “without first mentioned in the basic rule in Article 13(b) will constitute recruitment
securing a license from the Ministry of Labor as a holder of and placement even if only one prospective worker is involved.
45
People v. Goce An information for illegal recruitment committed by a Any recruitment activity, including the prohibited practices
syndicate and in large scale, punishable under Articles 38 enumerated in Article 34 of said Code, undertaken by non-licensees
ECONOMIC and 39 of the Labor Code as amended by Section 1(b) of or non-holders of authority shall be deemed illegal and punishable
SABOTAGE Presidential Decree No. 2018, was filed against spouses Dan under Article 39 thereof.
and Loma Goce and Nelly Agustin.
The same article further provides that illegal recruitment shall be
Complainants have the same story. They met Agustin who considered an offense involving economic sabotage if any of these
told them to go to the office of the placement agency at qualifying circumstances exist:
Nakpil Street, Ermita, Manila where he saw Agustin and met 1) when illegal recruitment is committed by a syndicate, i.e., if
the spouses Dan and Loma Goce, owners of the Clover it is carried out by a group of three or more persons
Placement Agency. They all paid processing fee to Agustin. conspiring and/or confederating with one another; or
46
Darvin v. CA Macaria Toledo met a Imelda Darvin in the latter’s residence Two elements of simple illegal recruitment:
through the introduction of their common friends. She 1) the person charged with the crime must have undertaken
convinced Toledo that by giving her P150,000.00 (US Visa recruitment activities; and
and airfare), the latter can immediately leave for the United 2) the said person does not have a license or authority to do
states within a week without any appearance before the U.S. so
embassy. After a week, however, she couldn’t find Darvin in
her residence anymore. POEA issued certification stating Procuring a passport, airline tickets and foreign visa for another
that Darvin is neither licensed nor authorized. Agustin claims individual, without more, can hardly qualify as recruitment activities.
that she used to be connected to Dale travel Agency and she Aside from the testimony of private respondent, there is nothing to
was assisting individuals in their passports, visas, and airline show that accused-appellant engaged in recruitment activities.
tickets.
People v. Gallo Gallo, Pacardo, Manta, Mrtir, and 9 others allegedly recruited To commit syndicated illegal recruitment, three elements must be
many people as factory workers in Korea. They charged and established:
SYNDICATED accepted directly or indirectly amounts as placement fees in 1) the offender undertakes either any activity within the
ILLEGAL connection with their overseas employment, which amounts meaning of “recruitment and placement” defined under
RECRUITMENT are in excess of or greater than those specified in the Article 13(b), or any of the prohibited practices enumerated
47
SC: All elements of syndicated illegal recruitment AND estafa The elements of estafa in general are:
were established. 1) that the accused defrauded another
a. by abuse of confidence, or
MPM Agency was never licensed by POEA to recruit workers b. by means of deceit; and
for overseas employment. Gallo made false 2) that damage or prejudice capable of pecuniary estimation is
misrepresentations and promises in assuring them that after caused to the offended party or third person.
they paid the placement fee, jobs in Korea as factory workers
were waiting for them and that they would be deployed soon. Deceit is the false representation of a matter of fact, whether by
words or conduct, by false or misleading allegations, or by
The active involvement of each in the recruitment scam was concealment of that which should have been disclosed; and which
directed at one single purpose – to divest complainants with deceives or is intended to deceive another so that he shall act upon
their money on the pretext of guaranteed employment it, to his legal injury.
abroad.
48
All three accused conspired and confederated with one “Authority” means a document issued by the Department of Labor
another to illegally recruit Lolita to become a prostitute in authorizing a person or association to engage in recruitment and
Malaysia, it follows that they are also guilty beyond placement activities as a private recruitment entity.
reasonable doubt of the crime of Qualified Trafficking in
Persons committed by a syndicate under RA 9208 because Such act of referral, in connivance with someone without the
the crime of recruitment for prostitution also constitutes requisite authority or POEA license, constitutes illegal recruitment. In
trafficking. its simplest terms, illegal recruitment is committed by persons who,
without authority from the government, give the impression that they
have the power to send workers abroad for employment purposes.
49
People v. Ocden Complainants went to Ocden’s house in Baguio City to apply Article 13(f) of the Labor Code provides that:
for work as factory workers in Italy with monthly salaries of It shall likewise include the following acts, whether committed by any
US$1,200.00. They were required by Ocden to submit their person, whether a non-licensee, non-holder, licensee or holder of
bio-data and passports, pay the placement fee of authority:
P70,000.00, and to undergo medical examination. In
preparation for their flight to Italy, the three proceeded to (m) Failure to reimburse expenses incurred by the worker in
Manila. In Manila, they were introduced by Ocden to Erlinda connection with his documentation and processing for purposes of
Ramos. Ocden and Ramos then accompanied Ferrer, deployment, in cases where the deployment does not actually take
Jennilyn, and Alipio to the airport where they took a flight to place without the worker’s fault. Illegal recruitment when committed
Zamboanga. Ocden explained to Ferrer, Jennilyn, and Alipio by a syndicate or in large scale shall be considered an offense
that they would be transported to Malaysia where their visa involving economic sabotage.
application for Italy would be processed. Sensing that they
were being fooled, Ferrer and Jennilyn decided to get a To prove illegal recruitment, it must be shown that appellant gave
refund of their money, but Ocden was nowhere to be found. complainants the distinct impression that he had the power or ability
They learned later that Ocden was not a licensed recruiter. to send complainants abroad for work such that the latter were
Golidan and her sons were only able to get 60,000 out of the convinced to part with their money in order to be employed.
140,000 that they paid to Ocden. They filed a complaint of
illegal recruitment in large scale and three counts of estafa. The offense of illegal recruitment is malum prohibitum where the
50
People v. Ong Noel Bascanot is an optometrist; he met Benzon Ong and REFERRAL - the act of passing along or forwarding of an applicant
told the former that he had contacts in Taiwan who were for employment after an initial interview of a selected applicant for
looking for workers. He was recruited as a factory worker for employment to a selected employer, placement officer or bureau.
ELEMENTS OF six monhs. He was charged for placement and processing
CRIME OF ILLEGAL fee He never got to Taiwan. When he and other
RECRUITMENT IN complainants sought to inquire about their application, they Illegal recruitment is considered an offense involving economic
LARGE SCALE discovered that Benz Ong no longer held office at the place sabotage if any of these qualifying circumstances exist, namely,
in Session Road. when illegal recruitment is committed by a syndicate, i.e., if it is
carried out by a group of three or more persons conspiring and/or
Benz Ong claims that he merely suggested to them the confederating with one another; or,
opportunity to work overseas but that he never advertised when illegal recruitment is committed in large scale, i.e., if it is
himself as a recruiter. committed against three or more persons individually or as a group.
SC: Benz Ong represented himself to complainants as one The essential elements of the crime of illegal recruitment in
capable of deploying workers abroad and even quoted the large scale are:
alleged salary rates of factory and construction workers in 1) the accused engages in acts of recruitment and placement
Taiwan. He advised Bacasnot to accept a job as a factory of workers defined under Art. 13(b) or in any prohibited
worker first because it would be then easier for him to activities under Art. 34 of the Labor Code;
transfer jobs once he got to Taiwan. Bacasnot paid accused- 2) the accused has not complied with the guidelines issued by
appellant an initial placement fee agreeing to pay the balance the Secretary of Labor and Employment, particularly with
through salary deductions once he was employed. These respect to the securing of a license or an authority to recruit
51
52
53
David v. Macasio Macasio had been working as a butcher for David since Art. 97(6). WAGES – remuneration or earnings, however
1995. He claimed that David exercised effective control and designated, capable of being expressed in terms of money, whether
BUTCHER supervision over his work, pointing out that David: (1) set the fixed or ascertained on a time, task, piece, or commission basis, or
work day, reporting time and hogs to be chopped, as well as other method of calculating the same, which is payable by an
EMPLOYEE PAID BY the manner by which he was to perform his work; (2) daily employer to an employee under a written or unwritten contract of
RESULT paid his salary of P700.00, which was increased from employment for work done or to be done, or for services rendered or
P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005; and to be rendered.
(3) approved and disapproved his leaves. In January 2009,
Macasio filed before a complaint against petitioner Ariel L. GENERAL RULE: Holiday and SIL pay provisions cover all
David, doing business under the name and style “Yiels Hog employees. To be excluded from their coverage, an employee must
Dealer,” for nonpayment of overtime pay, holiday pay and be one of those that these provisions expressly exempt, strictly in
13th month pay. He also claimed payment for service accordance with the exemption.
incentive leave (SIL).
EXEMPTION under IRR: Field personnel and other employees
David’s defense was he hired Macasio as a butcher or whose time and performance is unsupervised by the employer
chopper on “pakyaw” or task basis who is, therefore, not including those who are engaged on task or contract basis. Unlike
entitled to overtime pay, holiday pay and 13th month pay Article 82 of the Labor Code, the IRR on holiday and SIL pay do
pursuant to the IRR. not exclude employees “engaged on task basis” as a separate and
distinct category from employees classified as “field personnel.”
SC: Macasio is an employee of David. Regardless of the total Rather, these employees are altogether merged into one
hours that he spent at the workplace or of the total number of classification of exempted employees.
the hogs assigned to him for chopping, Macasio would
receive the fixed amount of P700.00 once he had completed The payment of an employee on task or pakyaw basis alone is
his task. Engagement on “pakyaw” or task basis does not insufficient to exclude one from the coverage of SIL and
determine the parties’ relationship as it is simply a method of holiday pay. They are exempted from the coverage of Title I
pay computation. (including the holiday and SIL pay) only if they qualify as “field
personnel.” The IRR therefore validly qualifies and limits the general
54
Labor Congress of the The 99 persons named as petitioners in this proceeding were PIECE-RATE WORKERS - Those workers who fall under the piece-
PH v. NLRC rank-and-file employees of respondent Empire Food rate category as those who are paid a standard amount for every
Products; they filed against private respondents a complaint piece or unit of work produced that is more or less regularly
for payment of money claims and for violation of labor replicated, without regard to the time spent in producing the same.
standards laws. They entered into a MOA with Empire Food
Products, agreeing, among others that Management of the As to the other benefits, namely, holiday pay, premium pay, 13th
Empire Food Products shall make the proper adjustment of month pay and service incentive leave which the labor arbiter failed
the Employees Wages within fifteen (15) days from the to rule on but which petitioners prayed for in their complaint,
signing of this Agreement and further agreed to register all petitioners are so entitled to these benefits. Although piece-rate
the employees with the SSS. After the submission, LA workers, were regular employees of private respondents.
absolved Empire of the charges of unfair labor practice, 1) Their job of repacking snack food was necessary or
union busting, violation of MOA, underpayment of wages. desirable in the usual business of private respondents, who
However, he later on directed the reinstatement of the were engaged in the manufacture and selling of such food
complaints for violation of not maintaining payroll subject to products;
inspection and visitation of DOLE. 2) They worked for private respondents throughout the year,
their employment not having been dependent on a specific
Empire’s defense was that the complainant workers refused project or season;
and failed to report for work, hence guilty of abandoning their
post without permission from respondents. As a result of
complainants’ failure to report for work, the cheese curls
55
SC: The failure to work for one day, which resulted in the
spoilage of cheese curls does not amount to abandonment of
work. In fact two (2) days after the reported abandonment of
work or on January 23, 1991, petitioners filed a complaint for,
among others, unfair labor practice, illegal lockout and/or
illegal dismissal. Therefore, entitled with full backwages.
PAL v. NLRC Dr. Herminio Fabros was employed as flight surgeon. He was The eight-hour work period does not include the meal break.
assigned at the PAL Medical Clinic at Nichols and was on Nowhere in the law may it be inferred that employees must take
duty from 4:00 in the afternoon until 12:00 midnight. On their meals within the company premises. Employees are not
February 17, 1994, at around 7:00 in the evening, private prohibited from going out of the premises as long as they return to
respondent left the clinic to have his dinner at his residence, their posts on time.
which was about five-minute drive away. A few minutes later,
the clinic received an emergency call from the PAL Cargo
Services. One of its employees, Mr. Manuel Acosta, had
suffered a heart attack. The nurse on duty, Mr. Merlino
Eusebio, called private respondent at home to inform him of
the emergency. The patient arrived at the clinic at 7:50 in the
evening and Mr. Eusebio immediately rushed him to the
hospital. When Fabros reached the clinic at around 7:51 in
the evening, Mr. Eusebio had already left with the patient. Mr.
Acosta died the following day.
56
Arica v. NLRC Petitioner workers filed a complaint for assembly time from The thirty (30)-minute assembly time long practiced and
5:30 to 6:00 to be considered as waiting time or work time institutionalized by mutual consent of the parties under Article IV,
and should be compensable since these preliminary activities Section 3, of the Collective Bargaining Agreement cannot be
are necessarily and primarily for the company’s benefit. considered as ‘waiting time’ within the purview of Section 5, Rule
I, Book III of the Rules and Regulations Implementing the Labor
These preliminary activities of the workers are as follows: Code. Furthermore, the thirty (30)-minute assembly is a deeply-
(a)
First there is the roll call. This is followed by getting rooted, routinary practice of the employees, and the proceedings
their individual work assignments from the foreman. attendant thereto are not infected with complexities as to deprive the
(b) Thereafter, they are individually required to workers the time to attend to other personal pursuits.
accomplish the Laborer’s Daily Accomplishment
Report during which they are often made to explain The thirty (30)-minute assembly time was not primarily intended for
about their reported accomplishment the following the interests of the employer, but ultimately for the employees to
day. indicate their availability or non-availability for work during every
(c) Then they go to the stockroom to get the working working day.
materials, tools and equipment.
(d) Lastly, they travel to the field bringing with them their *Note that in the dissenting opinion, when the time cannot be used
tools, equipment and materials. to pursue personal things, the time should be considered
compensable.
Rada v. NLRC Hilario Rada’s initial employment as a driver with Philnor AS TO ENTITLEMENT TO OVERTIME COMPENSATION:
under a 'Contract of Employment for a Definite Period' dated
July 7, 1977. The contract provides that the employer does He picks up employees of Philnor at certain specified points along
not have a continuing need for the services of the Employee EDSA in going to the project site and drops them off at the same
beyond the termination date of this contract and that the points on his way back from the field office going home to Marikina,
Employee's services shall automatically, and without notice, Metro Manila is not merely incidental to petitioner's job as a driver.
terminate upon the completion of the above specified phase His transportation arrangement had been adopted primarily for the
of the project; and that it is further understood that the benefit of the employer. Proof thereof is the undisputed fact that
engagement of his/her services is co-terminus with the same when petitioner is absent, another driver is supposed to replace him
and not with the whole project or other phases thereof. and drive the vehicle and likewise pick up and/or drop off the other
employees at the designated points on EDSA. If driving these
The project was not ye finished when the first contract of employees to and from the project site is not really part of
employment expired in 1979 so it was extended beyond the petitioner's job, then there would have been no need to find a
original period of 2.3 years. A second contract of employment replacement driver to fetch these employees.
w/ definite period of 10 months but the project was then
57
R.B. Michael Press v. Nicasio Galit was employed by petitioner R.B. Michael Press WAIVER - a voluntary and intentional relinquishment or
Galit as an offset machine operator, whose work schedule was abandonment of a known legal right or privilege; to be valid and
from 8:00 a.m. to 5:00 p.m., Mondays to Saturdays, and he effective must be couched in clear and unequivocal terms which
was paid PhP 230 a day. During his employment, Galit was leave no doubt as to the intention of a party to give up a right or
tardy for a total of 190 times, totaling to 6,117 minutes, and benefit which legally pertains to him.
was absent without leave for a total of nine and a half days.
One day, he was ordered to render overtime service in order For willful disobedience to be a valid cause for dismissal, these two
to comply with a job order deadline, but he refused to do so. elements must concur:
When he was asked to report in the afternoon, he received a 1) The employee’s assailed conduct must have been willful,
memorandum for a warning for dismissal/notice of hearing. that is, characterized by a wrongful and perverse attitude;
He was then terminated from employment, given his two-day and
salary and termination letter. He subsequently filed a 2) The order violated must have been reasonable, lawful,
complaint for illegal dismissal and money claims. made known to the employee, and must pertain to the
duties which he had been engaged to discharge.
SC: Galit’s habitual tardiness cannot be considered
condoned. The management prerogative to discipline
58
Caltex Regular MACLU entered into a CBA with Caltex effective midnight of Overtime work consists of hours worked on a given day in excess of
Employees at Manila December 21, 1988. Sometime in August 1986, the Union the applicable work period, which here is eight (8) hours. It is not
Office v. Caltex called Caltex’s attention to alleged violations by Caltex of enough that the hours worked fall on disagreeable or inconvenient
Philippines Inc. Annex “B” of the 1985 CBA, e.g. non-payment of night-shift hours. In order that work may be considered as overtime work, the
differential, non-payment of overtime pay and non-payment hours worked must be in excess of and in addition to the eight (8)
at “first day-off rates” for work performed on a Saturday. hours worked during the prescribed daily work period, or the forty
Caltex’s Industrial Relations manager immediately evaluated (40) hours worked during the regular work week Monday thru Friday.
petitioner’s claims and accordingly informed petitioner Union
that differential payments would be timely implemented. In Under the CBA, hours worked on a Saturday do not, by that fact
the implementation of the re-computed claims, however, no alone, necessarily constitute overtime work compensable at
differential payment was made with respect to work premium rates of pay, contrary to petitioner’s assertion. It is only
performed on the first 2 1/2 hours on a Saturday. The Union when an employee has been required on a Saturday to render work
instituted a complaint for unfair labor practice against Caltex in excess of the forty (40) hours which constitute the regular work
alleging violation of CBA and short-changing its employees week that such employee may be considered as performing
when Caltex compensated work performed on the first 2 1/2 overtime work on that Saturday. The statutory prohibition against
hours of Saturday, an employees’ day of rest, at regular offsetting undertime one day with overtime another day has no
rates, when it should be paying at “day of rest” or “day off” application in the case at bar.
rates.
*FLJ said to note rule on offsetting overtime.
Caltex’s defense was Saturday was never designated as a
day of rest, much less a “dayoff”. It maintained that the 1985
59
Union of Filpro Filipro filed a motion for clarification seeking: In deciding whether or not an employee's actual working hours in
Employees v. Vivar Jr. (1) the limitation of the award to three years, the field can be determined with reasonable certainty, query must
(2) the exclusion of salesmen, sales representatives, be made as to whether or not such employee's time and
truck drivers, merchandisers and medical performance is constantly supervised by the employer.
representatives (referred to as sales personnel)
from the award of the holiday pay; and The criteria for granting incentive bonus are:
(3) deduction from the holiday pay award of (1) attaining or exceeding sales volume based on sales
overpayment for overtime, night differential, target;
vacation and sick leave benefits due to the change (2) good collection performance;
of the divisor in the computation benefits from 251 (3) proper compliance with good market hygiene;
to 261 days. (4) good merchandising work;
(5) minimal market returns and
SC: Sales personnel are field personnel. The law requires (6) proper truck maintenance.
that the actual hours of work in the field be reasonably
ascertained. The company has no way of determining The above criteria indicate that these sales personnel are given
whether or not these sales personnel, even if they report to incentive bonuses precisely because of the difficulty in measuring
the office before 8:00 a.m. prior to field work and come back their actual hours of field work. These employees are evaluated by
at 4:30 p.m., really spend the hours in between in actual field the result of their work and not by the actual hours of field work
work. The clause "whose time and performance is which are hardly susceptible to determination.
unsupervised by the employer" did not amplify but merely
interpreted and expounded the clause "whose actual hours of
60
Trans-Asia Phils TAPEA entered into a CBA effective April 1, 1988 up to SC: Trans-Asia’s inclusion of holiday pay in petitioner’s monthly
Employees March 31, 1991. with Trans-Asia providing payment of salary is clearly established by its consistent use of the divisor of
Association v. NLRC holiday pay with a stipulation that if an employee is permitted “286” days in the computation of its employees’ benefits and
to work on a legal holiday, the said employee will receive a deductions. The ten (10) legal holidays in a year are already
salary equivalent to 200% of the regular daily wage plus a accounted for with the use of the said divisor.
60% premium pay. The issue was on the payment of holiday
from January 1985 to December 1987.
PNCC Workers’ PSTMSDWO and PNCC Skyway Corp. entered into a In the grant of vacation leave privileges to an employee, the
Organization v. PNCC Collective Bargaining Agreement (CBA) incorporating the employer is given the leeway to impose conditions on the
Skyway Corporation terms and conditions of their agreement which included entitlement to and commutation of the same, as the grant of
vacation leave and expenses for security license provisions. vacation leave is not a standard of law, but a prerogative of
61
Phil. Hoteliers Inc v. NOV 2001 - Wage Order no. 9 of the NCR took effect, which SC: The increased salaries of the employees should be used as
National Union of grants 30php ECOLA to employees receiving daily wage bases for determining whether they were entitled to ECOLA under
Workers in Hotel, rates from 260-290. The Union then sent to the DOLE a letter W.O. No. 9. Hence, workers and employees receiving daily wages
Restaurant and Allied reporting the non-compliance of Dusit Hotel, while there was of more than Php290 were no longer entitled to ECOLA. As to
Industries. an on-going compulsory arbitration before NLRC due to a receipt of service charges, they cannot constitute substantial
bargaining deadlock between the Union and Dusit Hotel. compliance with the prescribed payment in ECOLA. Hotel
employees have a right to their share in the service charges
22 OCT 2002 – DOLE ordered Dusit to pay 144 employees collected by Dusit Thani.
to pay ECOLA accdg to W.O. 9.
62
SC: Yes, allowances and sales commission are included. Art. Salary means a recompense or consideration made to a person for
97(f) by itself is explicit that commission is included in the his pains or industry in another man’s business. Commission is the
definition of the term “wage.” Art. 283 (pay or salary) and Art. recompense, compensation or reward of an agent, salesman,
97 (wage) generally refer to one and the same thing – reward executor, trustees, receiver, factor, broker, or bailee, when the
or recompense for services performed. same is calculated as a percentage on the amount of his
transactions on the profit of the principal.
As to commissions, they were in the form of incentives or
encouragement, so that the petitioners would be inspired to
put a little more industry on the jobs particularly assigned to
them, still these commissions are direct remunerations for
services rendered. The commissions in this case were
earned by actual market transactions attributable to
petitioners.
Millares v. NLRC Aper Industries Corp. of the Phil (PICOP) undertook a Art. 97(6). WAGES – remuneration or earnings, however
retrenchment program and terminated the services of 116 designated, capable of being expressed in terms of money, whether
ALLOWANCES petitioners all occupying positions of technical staff, section fixed or ascertained on a time, task, piece, or commission basis, or
SHOULD BE manager, department manager, division manager, and vice other method of calculating the same, which is payable by an
REGULARLY GIVEN president. They received received separation pay computed employer to an employee under a written or unwritten contract of
TO BE CONSIDERED at the rate of one (1) month basic pay for every year of employment for work done or to be done, or for services rendered or
PART OF THE service. Believing however that the allowances they allegedly to be rendered and includes the fair and reasonable value, as
WAGES regularly received on a monthly basis during their determined by the Secretary of Labor, of board, lodging, or other
employment should have been included in the computation facilities customarily furnished by the employer to the employee.
thereof they lodged a complaint for separation pay
differentials. FACILITIES - articles or services for the benefit of the employee or
his family but excluding tools of the trade or articles or service
1. Staff/ manager’s Allowance – free housing facilities primarily for the benefit of the employer or necessary to the conduct
to supervisory and managerial employees assigned of the employer’s business.
63
SLL Int’l Cables v. Lopez, Cañete, and Zuñiga were hired as apprentice or GENERAL RULE: A party who alleges payment of wages as a
NLRC trainee cable/linemen. They were then engaged as project defense has the burden of proving it. The burden of proving
employees 4 times, the last project not being completed due payment of monetary claims rests on the employer who has the
FACILITIES v. to economic problems. The company was constrained to cut pertinent personnel files, payrolls, records, remittances, and other
SUPPLEMENTS down the overtime work of the workers even after their similar documents – which will show that overtime, differentials,
insistence . This prompted them to leave work and went service incentive leave and other claims of workers have been paid
home, then they filed a complaint for illegal dismissal, non- – are not in the possession of the worker but in the custody and
payment of wages., and other money claims. absolute control of the employer.
Defense claims hat they were not illegally dismissed because An employer may provide subsidized meals and snacks to his
they were merely project employees. They further alleged employees provided that the subsidy shall not be less than 30%
that food allowance of Php63/day as well as allowance for of the fair and reasonable value of such facilities. The employer
lodging, transpo, electricity, water, and snacks should be may deduct from the wages of the employees not more than 70%
added to their basic pay and hence results to a higher wage of the value of the meals and sacks enjoyed by the latter,
than the minimum prescribed in Rizal & Manila. provided that such deduction is with the written authorization of the
employees concerned.
SC: They were regular employees but they were not illegally
dismissed; they abandoned work. They are underpaid. They Before the value of the facilities can be deducted from the
are entitled to minimum wage whether or not they are regular employees’ wages, the following requisites must all concur:
employees. SLL failed to present any company policy or 1) Proof must be shown that such facilities are customarily
guideline showing that provisions fro meals and lodging were furnished by the trade
64
Our Haus Realty v. Our Haus – a construction company – experienced financial Before the value of the facilities can be deducted from the
Parian distress. To alleviate its condition, Our Haus suspended employees’ wages, the following requisites must all concur:
some of its construction projects and asked the affected 1) Proof must be shown that such facilities are
workers, including the respondents, to take vacation leaves. customarily furnished by the trade
Eventually, the respondents were asked to report back to a) The existence of a company policy or guideline showing
work but instead of doing so, they filed with the LA a that provisions for a facility were designated as part of
complaint for underpayment of their daily wages. In addition, the employees’ salaries.
they allege tat Our Haus never presented proof that they b) The existence of an industry-wide practice of furnishing
agreed in writing with deductions of facilities, and instead of the benefits in question among enterprises engaged in
deducting the allowed maximum of 70% of the facilities, they the same line of business.
withheld the full value. 2) The provisions of deductible facilities must be
voluntarily accepted in writing by the employee – A
Our Haus’ defense was that aside from paying the monetary facility may only be deducted from the wage if the employer
51
amount of the respondents’ wages, Our Haus also was authorized in writing by the concerned employee. As
subsidized their meals (3 times a day), and gave them free it diminishes the take-home pay of an employee, the
lodging near the construction project they were assigned to. deduction must be with his express consent.
3) Facilities must be charged at fair and reasonable value.
SC: Deduction and charging both operate to lessen the - The valuation of a facility must be supported by relevant
actual take-home pay of an employee. documents such as receipts and company records for it to
1. Records reveal that the board and lodging were be considered as fair and reasonable.
given on a per project basis and not consistently
enjoyed by the rest of Our Haus’ employees. PURPOSE TEST – If a benefit or privilege granted to the employee
Moreover, peculiar to the construction business are is clearly for the employer’s convenience, it will not be considered as
65
American Wire American Wire Employees Union (Monthly paid and Daily BONUS – An amount granted and paid to an employee for his
Employees Union v. paid) filed an action for voluntary arbitration because industry and loyalty which contributed to the success of the
American Union American Wire, without valid cause, suddenly and unilaterally employer’s business and made possible the realization of profits. It
withdrew and denied certain benefits and entitlements which is an act of generosity granted by an enlightened employer to spur
they have long enjoyed: Service Award, 35% premium pay the employee to greater efforts for the success of the business and
for work rendered on Holy Monday, Holy Tuesday, Holy realization of bigger profits. The granting of a bonus is a
Wednesday, and December 23, 26, 27 and 29; Christmas management prerogative, something given in addition to what is
Party; and Promotional Increase. ordinarily received by or strictly due the recipient. Thus, a bonus is
not a demandable and enforceable obligation, except when it is
SC: The benefits/entitlements subjects of the instant case are made part of the wage, salary or compensation of the
all bonuses which were given by the private respondent out employee.
of its generosity and munificence. The additional 35%
premium pay for work done during selected days of the Holy For a bonus to be enforceable, it must have been promised by the
Week and Christmas season, the holding of Christmas employer and expressly agreed upon by the parties, or it must have
parties with raffle, and the cash incentives given together had a fixed amount and had been a long and regular practice on the
with the service awards are all in excess of what the law part of the employer. To be considered a “regular practice,” the
requires each employer to give its employees. To hold that giving of the bonus should have been done over a long period
an employer should be forced to distribute bonuses which it of time, and must be shown to have been consistent and
granted out of kindness is to penalize him for his past deliberate.
generosity.
*Note that for some, when a bonus has been given for 2 years, it’s
already considered as regular practice.
TSPIC Corp v. TSPIC 1999 – TSPIC and Union entered into a CBA for years 2000 Diminution of benefits is the unilateral withdrawal by the employer of
Employees’ Union to 2004. The CBA included a provision on yearly salary benefits already enjoyed by the employees.
increases starting January 2000 until January 20002.
DIMINUTION OF 1) Effective January 1, 2000 – all employees on regular There is diminution of benefits when it is shown that:
BENEFITS status on or before such date - 10% 1) the grant or benefit is founded on a policy or has ripened
2) Effective January 1, 2001 – all employees on regular into a practice over a long period;
66
67
SC: The wage/salary increases for the years 2001 and 2002
shall be deemed inclusive of the mandated minimum wage
increases under future wage orders, that may be issued after
WO No. 7, and shall be considered as correction of the wage
distortions that may be brought about by the said future wage
orders. TSPIC granted the salary increases under the
condition that any wage order that may be subsequently
issued shall be credited against the previously granted
increase.
Lepanto Ceramics v. In December 1998, Lepanto Ceramic gave a Php3,000 BONUS - gratuity or act of liberality of the giver. It is something
Lepanto Ceramic bonus to its employees. In 1999, the company and the Union given in addition to what is ordinarily received by or strictly due the
Employees Union entered into a CBA. The Christmas bonus was one of the recipient. A bonus is granted and paid to an employee for his
enumerated “existing benefit, practice of traditional rights” industry and loyalty which contributed to the success of the
WHEN DOES BONUS which “shall remain in full force and effect.” In the succeeding employer’s business and made possible the realization of profits.
BECOME AN years, 1999, 2000 and 2001, the bonus was not in cash.
OBLIGATION Instead, petitioner gave each of the members of respondent GENERAL RULE: A bonus is not a demandable and enforceable
Association Tile Redemption Certificates equivalent to obligation. For a bonus to be enforceable, it must have been
P3,000.00. In 2002, Lepanto Ceramics gave a year-end cash promised by the employer and expressly agreed upon by the
benefit of Six Hundred Pesos (P600.00) and offered a cash parties.
advance to interested employees equivalent to one (1) month
salary payable in one year. The respondent Association Business losses are a feeble ground for to repudiate obligation
objected to the P600.00 cash benefit and argued that this under the CBA. The rule is settled that any benefit and supplement
was in violation of the CBA it executed with the petitioner. being enjoyed by the employees cannot be reduced, diminished,
Lepanto contends that the complaint for nonpayment of the discontinued or eliminated by the employer. The principle of non-
2002 Christmas bonus had no basis as the same was not a diminution of benefits is founded on the constitutional mandate to
demandable and enforceable obligation. It argued that the protect the rights of workers and to promote their welfare and to
giving of extra compensation was based on the company’s afford labor full protection.
available resources for a given year and the workers are not
entitled to a bonus if the company does not make profits.
68
Eastern The company plans to defer payment of the 2003 14th, 15th GENERAL RULE: The grant of a bonus is basically a management
Telecommunications and 16th month bonuses sometime in April 2004. The prerogative which cannot be forced upon the employer who may not
v. Easter Telecom company’s main ground in postponing the payment of be obliged to assume the onerous burden of granting bonuses or
Employees Union bonuses is due to allege continuing deterioration of other benefits aside from the employee’s basic salaries or wages. A
company’s financial position which started in the year 2000. bonus is a gratuity or act of liberality of the giver which the recipient
However, ETPI while postponing payment of bonuses has no right to demand as a matter of right.
sometime in April 2004, such payment would also be subject
to availability of funds. EXCEPTION: A bonus becomes a demandable or enforceable
obligation when it is made part of the wage or salary or
ETEU alleges that ETPI had consistently and voluntarily compensation of the employee.
been giving out 14th month bonus during the month of April,
and 15th and 16th month bonuses every December of each To be considered a “regular practice,” however, the giving of the
year to its employees from 1975 to 2002, even when it did bonus should have been done over a long period of time, and must
not realize any net profits; that the payment of these be shown to have been consistent and deliberate. The test or
monetary benefits had ripened into a company practice which rationale of this rule on long practice requires an indubitable
could no longer be unilaterally withdrawn by ETPI. showing that the employer agreed to continue giving the benefits
knowing fully well that said employees are not covered by the law
SC: A reading of the above provision reveals that the same requiring payment thereof.
provides for the giving of 14th, 15th and 16th month bonuses
without qualification. There were no conditions specified in
the CBA Side Agreements for the grant of the benefits
contrary to the claim of ETPI that the same is justified only
when there are profits earned by the company. Payment of
the bonuses was not related to the profitability of business
operations.
69