Labor Law Case Digest Compilation

UY VS CENTRO Petitioner: Jhorizaldy Uy Respondent: Centro Ceramica Corporation, Ramonita Y. Sy, and Milagro U. Garcia Citation: GR No. 174631 Date of Promulgation: October 19, 2011 Ponente: Villarama, J. FYI: FACTS 1. Jhorizaldy Uy was hired by Centro Ceramica Corporation. - as a full-time sales executive - hired on May 21, 1999, under probationary employment for 6 months - became a regular employee May 1, 2000 2. Milagros Garcia was rehired by the company in the last quarter of 2001 - petitioner alleged that this is when his predicament began 3. On February 19, 2002, he was informed by his superior, Richard Agcaoili, that he was to assume a new position in the marketing department. - he was warned by his friends to be careful saying "mainit ka kay Ms. Garcia". 4. On the same day, he was summoned by Milagros Garcia and Sy who informed him of the termination of his services due to insubordination. - Sy even commented "member ka pa naman ng Single for Christ pero napakatigas naman ng ulo mo." 5. Agcaoili informed Uy that the Sy spouses will give him all that is due him plus goodwill money to settle everything. 6. On February 21, 2002, Uy was again summoned by Sy, wherein Uy asked for his termination paper. - Sy told him "If that's what you want I will give it to you." And added, "Pag-isipan mo dahil kilala mo naman kami we are powerful." 7. Uy turned over all bis samples, accounts and receivables to Agcaoili on February 22, 2002. After which he did not report for work. 8. On March 6, 2002, Uy received a memorandum dated February 21, 2002, from the company stating: - that he has failed to meet the quota for sales executives, set fro the period from 1999 to 2001 (which was said to be a violation of his contract of employment) - that he has to explain in writing within 24 hours why the company should not terminate his contract. Uy was unable to reply because he did not receive the memo since he was already dismissed. However, he was surprised about the letter's content - because he was informed by Agcaoili that management was satisfied with his performance and he ranked second top performer for January 2002. 9. Uy received another memorandum on March 13, 2002. - the letter alleged that the company's records show that Uy has failed to report for work without informing his employer of the reason, and without securing proper leave (which was said to be in violation of his contract) - the letter also mentioned that Uy has refused to receive any of his monetary entitlements despite notice that they are available. - it asked for an explanation letter, within 24 hours, about why he should not be terminated. 10. Uy sought counsel who assisted him by replying to the memorandum. 11. Respondent denied dismissing petitioner and claimed he abandoned his job. - they claim that petitioner's poor performance did not improve even after regularization; - the possibility of him being transferred to a different department was due to his poor sales performance; - because he was aware of his problem and a possible termination, it was Uy's idea to voluntarily resign rather than be terminated;

- Uy angrily stated that the company should just terminate him and walked out after learning that he will receive the commissions of those sold but not yet delivered only upon their delivery; - it was Uy who had a grudge against Garcia, that the Uy was discourteous and abusive; 12. Centro Ceramica Corporation presented two affidavits to prove their claim. - Rommel Azarraga: 1. he was the one who told Uy to be careful 2. that Garcia did not harbour any ill feelings against Uy, nor did he know of any incident that may cause such; - Richard Agcaoili 1. denied Uy was terminated 2. denied that Uy was performing well and that he mentioned that management was satisfied with his performance - Arnulfo Merecido 1. claimed he has a fistfight with Uy because of the latter's insulting remarks against his (Merecido) family. 13. Labor Arbiter ruled in favor of the respondent basing on his finding that it was Uy who opted not to report for work after offering to resign. 14. NLRC reversed the Labor Arbiter's ruling. It found the dismissal of Uy questionable. - no sanction was imposed on Uy or any other employee for the supposed failure to meet the quota - Uy was being singled out notwithstanding that all sales personnel similarly could not meet the Php 1.5 million monthly quota. 15. CA reversed the NLRC's decision on account of the evidence on record. - Uy, by his own account, has admitted that it was he who asked for his dismissal. - the memorandums showed that the company has not yet terminated Uy's employment. ISSUE :Whether or not the dismissal was legal. HELD No. Dismissal was illegal. The petition for review on certiorari was granted. The SC set aside the decision of the CA and affirmed the decision of the NLRC. The SC found that the NLRC's finding of illegal dismissal is supported by the totality of evidence and more consistent with logic and ordinary human experience. - after declining his supposed transfer to another department per his supervisor's advise, it is hard to believe that he would just readily turn over his files and samples unless something critical had happened during his talk with Garcia and Sy - it is irrelevant whether he had earlier inquired from his supervisor what he will receive if he offers instead to resign--what matters is the action of Sy on his employment status - a crucial factor is the verbal order directly given by Sy for him to immediately turn over his accountabilities - it is his right to be furnished with a written notice in order to inform him of the real ground for his termination - the subsequent memorandums sent only reinforce the conclusion that the belated written notice of charge against him on having failed to meet the prescribed sales quota was an afterthought on the part of the company who may have realized that they failed to observe due process in terminating him - he was not given the chance to defend himself from whatever charges the management hurled against him - NLRC duly noted the discriminatory treatment accorder to petitioner when it declared that there is no evidence at all that other sales personnel who failed to meet the prescribed sales quota were similarly reprimanded The SC found the affidavits to be at best self-serving having been executed by employees beholden to their employer.

Fairness requires that dismissal, being the ultimate penalty that can be meted out to an employee must have a clear basis. Any ambiguity in the ground of termination of an employee should be interpreted against the employer, who ordained such ground in the first place. When there is no showing of a clear, valid and legal cause for the termination of employment, the law considers it a case of illegal dismissal. Furthermore, Article 4 of the Labor Code expresses the basic principle that all doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. - This principle has been extended by jurisprudence to cover doubts in the evidence presented by the employer and the employee. Thus we have held that if the evidence presented by the employer and the employee are in equipoise, the scales of justice must be tilted in favor of the latter. The award of back wages and separation pay in lieu of reinstatement should be modified. Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer viable or desirable. Under the facts established, petitioner is entitled to the payment of full back wages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the date of his dismissal on February 19, 2002 up to the finality of this decision, and separation pay in lieu of reinstatement equivalent to one month salary for every year of service, computed from the time of his engagement by respondents on March 21, 1999 up to the finality of this decision.

DE CASTRO vs LIBERTY BROADCASTING NETWORK Petitioner: Carlos C. De Castro Respondents: Liberty Broadcasting Network Inc, Edgardo Quiogue Citation: GR No. 165153 Date of Promulgation: September 23, 2008 Ponente: Brion FACTS:  Petition for Review on Certitorari – to annul, reverse and/or set aside the Decision dated May 25, 2004, and the Resolution dated August 30, 2004 of the Former Special Third Division of CA  FACTUAL BACKGROUND  Carlos De Castro: Building Administrator of Liberty Broadcasting. He started his employment on August 7, 1995  May 16, 1996: Bernard Mandap (HRM Senior Manager) sent a notice to Carlos requiring him to explain within 48 hours why he should not be made liable for violation of the Company Code of Conduct for acts constituting serious misconduct, fraud and willful breach of trust reposed in him as a managerial employee  De Castro’s ANSWER: denied the allegations against him in the Affidavits of Liberty’s witnesses: Vicente Niguidula and Gil Balais. He says such accusations are baseless and sham, designed to protect Niguidula and Balais who were the favorite boys of Edgardo Quiogue (EVP of Liberty Broadcasting)  At De Castro’s request, a formal hearing was scheduled at 2pm of May 28, 1996, but he thereafter sent a notice that he would not participate when he learned from his wife that estafa and qualified theft had been filed against him  He felt that the formal hearing would just be a more-more investigation  May 24, 1996: Liberty Broadcasting charged De Castro with Violation of Company Code of Conduct based on the Affidavits of Balais, Cristino Samarita and Jose Aying  May 31, 1996: Notice of Dismissal

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 Grounds for De Castro’s Dismissal 1. Soliciting and/or receiving money for his own benefit from suppliers/dealers/traders Aying and Samarita, representing commissions for job contracts involving the airconditioning units at the company, and the installation of fire exits at Technology Centre 2. Diversion of company funds by soliciting and receiving commissions amounting to a 14k from Aying for a job contract 3. Theft of company property involving the unauthorized removal of 1 gallon of Delo Oil from the storage room 4. Disrespect/discourtesy towards his co-employee, Niguidula 5. Disorderly behavior for challenging Niguidula for a fight during working hours 6. Threat and coercion against Niguidula and for coercing Balais to solicit money in his behalf from suppliers/contractors 7. Abuse of authority for instructing Balais to collect commissions from Aying and Samarita, and for requiring Raul Pacaldo to exact 2-5% of the price of contracts awarded to suppliers 8. Slander against Niguidula  De Castro then filed a Complaint for Illegal Dismissat at NLRC. During the Arbitration, he denied the offenses charged, stating that: 1. He was just new in the office and could not encourage solicitation of commission from suppliers 2. The accusations are belated for the imputed acts happened in 1995 3. The gallon of Delo Oul carted away was at the room of Balais that, which circumstance he relayed to Mandap 4. Affidavits of Niguidula and Balais are not reliable because they had altercations for De Castro reprimanded Balais for incurring unnecessary OT work 5. Niguidula verbally assaulted and challenged him to a fight which he reported to Quiogue and Makati Police Labor Arbiter Felipe Pati: rendered a decision on April 30, 1999, holding the respondent liable for illegal dismissal. He disbelieved the affidavits of the respondent’s witnesses in view of the circumstances prior to the execution. NLRC: reversed the LA’s decision and adopted the findings of Labor Arbiter Tamayo who reviewed the Appeal on NLRC’s instructions. It ruled that Arbited Pati erred in disregarding the Affidavits of the witnesses. MR by De Castro: NLRC granted it in a Resolution dated September 20, 2002. NLRC held the charges against De Castro were never substantiated other than by bare allegations of the company’s employees whom he had altercations with prior to the execution of Affidavits MR by Liberty Broadcasting: denied Certiorari at CA: granted the Petition in its Decision on May 25, 2004, confirming the validity of De Casto’s dismissal. NLRC abused its discretion when it disregarded the Affidavits of the witnesses

ISSUES: 1. W/N CA erred when it substituted its judgment for that of LA and NLRC who were the triers of facts who had the opportunity to review the evidence extensively HELD: 1. YES. CA erred in the appreciation of the evidence surrounding the petitioner’s termination from employment. The cited grounds are at best doubtful under the proven surrounding circumstances, and should have been interpreted in the petitioner’s favor pursuant to Article 4 of the Labor Code. 1. The petitioner had not stayed long in the company and had not even passed his probationary period when the acts charged allegedly took place. This fact carries several significant implications. First, being new, his natural motivation was to make an early positive impression on his employer. Thus, it is believable that as

building administrator, he diligently, zealously, and faithfully performed his tasks, working in excess of eight hours per day to maintain the company buildings and facilities in excellent shape; he even lent the company his personal tools and equipment to facilitate urgent repairs and maintenance work on company properties. Second, because of his natural motivation as a new employee and his lack of awareness of the dynamics of relationships within the company, he must have been telling the truth when he said that he objected to the way the contract for the installation of fire escapes was awarded to Samarita. Third, his being new somehow rendered doubtful the charge that he had already encouraged solicitation of commission from suppliers, especially if considered with the timing of the charges against him and the turnaround of witness Aying’s testimony. 2. The relationships within the company at the time the charges were filed showed that he was a stranger who might not have known the dynamics of company interrelationships and might have stepped on the wrong toes in the course of performing his duties. Respondent Quiogue was the Executive Vice-President of the company, a very powerful official with a lot of say in company operations. Since Samarita was doing the fabrication of steel balusters for Quiogue’s home in New Manila, Quezon City, there is a lot of hidden dynamics in their relationship and it is not surprising that Samarita testified against the petitioner. Both Samarita and Quioque have motives to resent the petitioner’s comments about the irregular award of a contract to Samarita. 3. Mandap, as Personnel Manager, is a subordinate of Quiogue. The proposal to secure commissions from company suppliers reportedly took place in a very public gathering—a drinking session—in his house. Why Mandap did not take immediate action when he knew of the alleged plan as early as December 1995 was never explained although the petitioner raised the issue squarely. The time gap—from December 1995 to May 1996—is an incredibly long time under the evidence available and can be accounted for only by the fact that there was no intention to terminate the services of the petitioner in December; the motivation and the scheme to do this came only sometime in April-May 1996. 3. The timing of the filing of charges was, as the petitioner pointed out, unusual. Indeed, if the proposal to solicit commissions had transpired in December, the charges were quite late when they came in May. All these considerations render the cited causes for the petitioner’s dismissal tenuous as the evidence supporting these grounds from suspect sources: they come either from people who harbor resentment; those whose positions have inherent conflict points with that of De Castro, or from business dealings with the company. Under the circumstances, we join the NLRC in concluding that the employer failed to prove a just cause for the termination of the petitioner’s employment—a burden the company, as employer, carries under the Labor Code31—and the CA erred when it saw grave abuse of discretion in the NLRC’s ruling. The evidentiary situation, at the very least, brings to the fore the dictum we stated in Prangan v. NLRC32 and in Nicario v. NLRC33 that “if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a timehonored rule in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the former’s favor

PEÑAFLOR V OUTDOOR PETITIONER: Manolo A. Peñaflor RESPONDENTS: OUTDOOR CLOTHING MFG CORP Nathaniel T. Syfu Medylene M. Demogena Paul U. Lee DOCKET NO.:G.R. No. 177114 PROMUL DATE: Jan. 21, 2010 PONENTE: Brion, J. FACTS  Peñaflor – hired Sept. 2, 1999 as HRD Mgr of Outdoor. As HRD head, he was expected to: o secure and maintain the right quality and quantity of people needed by the company o maintain the harmonious relationship between the employees and management in a role that supports organizational goals and individual aspirations o represent the company in labor cases or proceedings  His relationship with Outdoor went well during the first few months. Problems started when VP for Operations Edgar Lee left the company after a big fight between Lee and Chief Corporate Officer Nathaniel Syfu.  Outdoor began its alleged downsizing program due to negative business returns. o Retrenchment – Peñaflor’s two staffs were dismissed leaving only him in the HRD. He worked as a one-man department, carrying out all clerical, administrative and liaison work; he personally went to various government offices to process the company’s papers.  Employee Lynn Padilla suffered a bombing incident. Outdoor required Peñaflor to attend to his hospitalization needs. Working outside office. o As he was acting on the company’s orders, Peaflor considered himself to be ON OFFICIAL BUSSINESS, but was surprised when the company DEDUCTED SIX DAYS SALARY corresponding to the time he assisted Padilla. o Finance Mgr Medylene Demogena: he failed to submit his trip ticket, but Peñaflor belied this claim as a trip ticket was required only when a company vehicle was used and he did not use any company vehicle when he attended to his off-premises work.  Returned from field work on Mar 13, 2000 o While he was away, Nathaniel Syfu had appointed Nathaniel Buenaobra as the new HRD Mgr o Syfu’s memorandum dtd Mar 10, 2000: Buenaobra was the concurrent HRD and Acctg Mgr  Peñaflor was surprised by the news; he also felt betrayed and discouraged. He tried to talk to Syfu to clarify the matter, but was unable to do so. He had no option but to resign. Letter to Syfu declaring his irrevocable resignation from his employment with Outdoor effective at the close of office hours on Mar 15, 2000. o Filed a complaint for illegal dismissal with labor arbiter. Claim: constructively dismissed. Prayer: reinstatement, payment of backwages, illegally deducted salaries, damages, atty’s fees, etc.  Outdoor denied Peñaflor’s allegations: o Peñaflor had voluntarily resigned from work o Had continued working for the company until his resignation on Mar 15, 200, as evidenced by the security report that Peaflor himself prepared and signed on Mar 13, 2000 o Also denied making any illegal salary deductions. Those deductions were due to Peñaflor’s failure to report during work during the dates the company questioned. As a

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probationary employee, he was not yet entitled to any leave credit that would offset his absences. Aug 15, 2001 – Labor Arbiter’s decision finding Peñaflor had been illegally dismissed. Outdoor was ordered to: o reinstate Peñaflor to his former or to an equivalent position o pay him his illegally deducted salary for six days, proportionate 13th month pay, attorney’s fees, moral and exemplary damages Outdoor appealed w the NLRC. o Claimed that Peñaflor tendered his resignation on Mar 1, 2000 because he saw no future with the corporation due to its dire financial standing. o Syfu alleged that he was compelled to appoint Buenaobra as concurrent HRD Manager through a memorandum dated Mar 1, 2000 to cover the position that Peñaflor would soon vacate. o Peñaflor was given 2 notices (Mar 6 & 11) for his unauthorized absences. Peñaflor’s contentions: o Syfu’s Mar 1 memo, Buenaobra’s Mar 3 memo, and the AWOL memo – ALL FABRICATED and were never presented before the labor arbiter o Was never furnished with the AWOL Memo o he could not be on prolonged absence without official leave, as his residence was just a few meters away from the office. NLRC: o Peñaflor’s resignation was a response to the Outdoor Clothing’s downward financial spiral o Buenaobra’s appointment was made only after Peñaflor had submitted his resignation letter, and this was made to cover the vacancy Peñaflor’s resignation would create. o No malice likewise was present in the company’s decision to dismiss Peñaflor’s two staff members; the company simply exercised its management prerogative to address the financial problems it faced. o OVERTURNED LABOR ARBITER’S DECISION. CA: affirmed NLRC’s decision, stating that Peaflor failed to present sufficient evidence supporting his claim that he had been constructively dismissed. Dismissed certiorari petition against NLRC, and denied his MR as well. ISSUE: WON Peñaflor’s resignation was a voluntary or forced one, the latter making it a constructive dismissal equivalent to illegal dismissal HELD: YES. Peñaflor has been constructively dismissed. o The issue gives rise to the question of when was Peñaflor’s resignation letter submitted. o SC finds that letter was indeed submitted on March 15, 2000, proving that he had been constructively dismissed as his resignation was a response to the unacceptable appointment of another person to a position he still occupied.  Peñaflor was never informed of Syfu’s Mar. 1 memo and Buenaobra’s Mar. 3 memo, even though those were directly concerning him  Said memoranda were only presented to the NLRC for appeal, not before the labor arbiter.  The memorandum on Mar. 10 by Syfu informing the whole office about Buenaobra’s appointment was properly signed by at least 5 company officials, showing that indeed the appointment was only that day disclosed. o We find it highly unlikely that Peñaflor would resign on March 1, 2000 and would then simply leave given his undisputed record of having successfully worked within his probationary period. It does not appear sound and logical to us that an employee would tender his resignation on the very same day he was entitled by law to be considered a regular employee, especially when a downsizing was taking place and he could have availed of its benefits if he would be separated from the service as a regular employee.

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Another basic principle is that expressed in Article 4 of the Labor Code that all doubts in the interpretation and implementation of the Labor Code should be interpreted in favor of the workingman. As shown above, Peñaflor has, at very least, shown serious doubts about the merits of the company’s case, particularly in the appreciation of the clinching evidence on which the NLRC and CA decisions were based. REVERSED the decision of the CA, and REINSTATED the decision of the labor arbiter, with the MODIFICATION that, due to the strained relations between the parties, respondents are additionally ordered to pay separation pay equivalent to the petitioner’s one month’s salary.

Norkis Union vs. Norkis Trading Petitioner: Independent Workers Union Respondent: Norkis Trading Company Citation: GR No. 157098 Date of Promulgation: June 30, 2005 Ponente: PANGANIBAN, J. FACTS: The instant case arose as a result of the issuance of Wage Order No. ROVII-06 by the Regional Tripartite Wages and Productivity Board (RTWPB) increasing the minimum daily wage by P10.00, effective October 1, 1998. Prior to said issuance, herein parties entered into a Collective Bargaining Agreement (CBA) effective from August 1, 1994 to July 31, 1999. Sec. 1. Salary Increase. The Company shall grant a FIFTEEN (P15.00) PESOS per day increase to all its regular or permanent employees effective August 1, 1994. Sec. 2. Minimum Wage Law Amendment. In the event that a law is enacted increasing minimum wage, an across-the-board increase shall be granted by the company according to the provisions of the law.On January 27, 1998, a re-negotiation of the CBA was terminated and pursuant to which a Memorandum of Agreement was forged between the parties. It was therein stated that petitioner shall grant a salary increase to all regular and permanent employees as follows: Ten (10) pesos per day increase effective August 1, 1997; Ten (10) pesos per day increase effective August 1, 1998. Pursuant to said Memorandum of Agreement, the employees received wage increases of P10.00 per day effective August 1, 1997 and P10.00 per day effective August 1, 1998. As a result, the agreed P10.00 re-negotiated salary increase effectively raised the daily wage of the employees to P165.00 retroactive August 1, 1997; and another increase of P10.00, effective August 1, 1998, raising the employees daily wage to P175.00. On March 10, 1998, the Regional Tripartite Wage Productivity Board (RTWPB) of Region VII issued Wage Order ROVII-06 which established the minimum wage of P165.00, by mandating a wage increase of five (P5.00) pesos per day beginning April 1, 1998, thereby raising the daily minimum wage to P160.00 and another increase of five (P5.00) pesos per day beginning October 1, 1998, thereby raising the daily minimum wage to P165.00 per day. In accordance with the Wage Order and Section 2, Article XII of the CBA, [petitioner] demanded an across-the-board increase. [Respondent], however, refused to implement the Wage Order, insisting that since it has been paying its workers the new minimum wage of P165.00 even before the issuance of the Wage Order, it cannot be made to comply with said Wage Order.

Thus, [respondent] argued that long before the passage of Wage Order ROVII-06 on March 10, 1998, and by virtue of the Memorandum of Agreement it entered with herein [petitioner], [respondent] was already paying its employees a daily wage of P165.00 per day retroactive on August 1, 1997, while the minimum wage at that time was still P155.00 per day. On August 1, 1998, [respondent] again granted an increase from P165.00 per day to P175.00, so that at the time of the effectivity of Wage Order No. 06 on October 1, 1998 prescribing the new minimum wage of P165.00 per day, [respondents] employees were already receiving P175.00 per day. CA ruled in favour of the respondent. ISSUE: WON respondent violated the CBA in its refusal to grant its employees an across-theboard increase as a result of the passage of Wage Order No. ROVII-06 HELD: No, we hold that the issue here is not about creditability, but the applicability of Wage Order No. ROVII-06 to respondents employees. The Wage Order was intended to fix a new minimum wage only, not to grant across-the-board wage increases to all employees in Region VII. The intent of the Order is indicated in its title, Establishing New Minimum Wage Rates, as well as in its preamble: the purpose, reason or justification for its enactment was to adjust the minimum wage of workers to cushion the impact brought about by the latest economic crisis not only in the Philippines but also in the Asian region. Parenthetically, there are two methods of adjusting the minimum wage. In Employers Confederation of the Phils. v. National Wages and Productivity Commission, these were identified as the floor wage and the salary-ceiling methods. The floor wage method involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates. On the other hand, in the salary-ceiling method, the wage adjustment was to be applied to employees receiving a certain denominated salary ceiling. In other words, workers already being paid more than the existing minimum wage (up to a certain amount stated in the Wage Order) are also to be given a wage increase. A cursory reading of the subject Wage Order convinces us that the intention of the Regional Board of Region VII was to prescribe a minimum or floor wage; not to determine a salary ceiling. Had the latter been its intention, the Board would have expressly provided accordingly. The text of Sections 2 and 3 of the Order states: Section 2. AMOUNT AND MANNER OF INCREASE. Upon the effectivity of this Order, the daily minimum wage rates for all the workers and employees in the private sector shall be increased by Ten Pesos (P10.00) per day to be given in the following manner: i. Five Pesos (P5.00) per day effective April 1, 1998, and ii. Additional Five Pesos (P5.00) per day effective October 1, 1998. Section 3. UNIFORM WAGE RATE PER AREA CLASSIFICATION. To effect a uniform wage rate pursuant to Section 1 hereof, the prescribed minimum wage after full implementation of this Order for each area classification shall be as follows: Area Classification Non-Agriculture Sector Agriculture Sector *Class A 165.00 150.00 *Class B 155.00 140.00Class *C 145.00 130.00 Class *D 135.00 120.00 At the risk of being repetitive, we stress that the employees are not entitled to the claimed salary increase, simply because they are not within the coverage of the Wage Order, as they were already receiving salaries greater than the minimum wage fixed by the Order. Concededly, there is an increase necessarily resulting from raising the minimum wage level, but not acrossthe-board. Indeed, a double burden cannot be imposed upon an employer except by clear provision of law. It would be unjust, therefore, to interpret Wage Order No. ROVII-06 to mean that respondent should grant an across-the-board increase.

In the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution: social justice and the protection of the working class. Social justice does not, however, mandate that every dispute should be automatically decided in favor of labor. In every case, justice is to be granted to the deserving and dispensed in the light of the established facts and the applicable law and doctrine. WHEREFORE, the Petition is DENIED, and the assailed Decision and Resolution AFFIRMED. SY v. PHILIPPINE TRANSMARINE COMPLAINANT: Susana R. Sy RESPONDENT: Philippine Transmarine Carriers, Inc., and/or SSC Ship Management Pte., Ltd. CITATION: G.R. No. 191740 DATE OF PROMULGATION: February 11, 2013 PONENTE: J. Peralta FACTS:  

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June 23, 2003 – Alfonso N. Sy (Sy) was hired by respondent Philippine Transmarine Carriers Incorporated for and in behalf of its foreign principal, co-respondent SSC Ship Management Pte. Ltd., as Able Seaman (AB) to work for ten months. The contract of Sy’s employment, called Philippine Overseas Employment Administration- Standard Employment Contract (POEA-SEC), incorporates a set of standard provisions established and implemented by POEA, called the Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels October 1, 2005 – The vessel was at the Port of Jakarta, Indonesia when Sy went on shore leave and left the vessel. A few hours later, the vessel’s agent from Jardine received an advice from local police that one of the vessel’s crew members died ashore. The vessel’s master, Capt. Norman C. Marquez went to the hospital and confirmed the cadaver to be that of Sy. The local police found that Sy was riding on a motorcycle when he stopped the driver to urinate at the riverside of the road; Sy had not returned for a while, so the driver went to look for him but he was nowhere to be found. A few hours later, his body was found. A forensic pathologist certified that the death was an accident due to drowning, and that there was 20% alcohol in his urine. October 8, 2005 – Sy’s body was repatriated to the Philippines. NBI’s post-mortem examination certified that the cause of death was Asphyxia by drowning. Petitioner Susana Sy, widow of Alfonso Sy, demanded from respondents the payment of her husband’s death benefits and compensation. Respondents denied such claim, since Sy’s death occurred while he was on shore leave, hence his death was not workrelated and therefore, not compensable.

LABOR ARBITER RULING: (August 28, 2007)  

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Respondent is ordered to pay complainant death benefits and burial expenses. Even if while he was on shore leave, he was still under the control and supervision of the master or captain of the vessel as it was provided under Section 13 of the Contract that the seafarer before taking a shore leave must secure the consent of the master of the vessel. Another indication that a seafarer is considered to be doing work-related functions even when on shore leave is found in subparagraph 4, paragraph B, section 1 of the Contract where the duties of the seafarer are not limited to his stay while on board, but extend to his stay ashore.

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Only a finding that his death was self-inflicted or attributable to him would bar the payment of death benefits. The Autopsy Report did not establish that the death was the result of Sy’s willful act on his own life; that there were traces of alcohol in his blood did not make him “intoxicated” as there was no proof that he was; and granting that he was intoxicated, such was accidental drowning and not an intentional taking of his life.

NLRC RULING: (October 17, 2008)  

Respondent’s appeal was dismissed for lack of merit; complainant’s entitled to attorney’s fees Affirmed the decision of Labor Arbiter but modified the monetary award

CA RULING: (September 17, 2009)   

Petition granted. NLRC’s decision and resolution ordering respondents to pay Mrs. Sy were reversed. Mrs. Sy was ordered to return to the respondents the monetary award she received. Sy’s death was not work-related. Under Section 20 (A) of POEA Memorandum Circular No. 9, series of 2000, it was not sufficient to establish that Sy’s death had occurred during the term of his contract, but there must be a causal connection between his death and the work for which he had been contracted. When he died, he was on shore leave and left the vessel, and his death neither occurred at his workplace nor while performing an act within the scope of his employment.

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Whether or not petitioner/complainant is entitled to death compensation benefits from respondents

SC RULING: (February 11, 2013) 

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The petition is devoid of merit, denied. To be entitled for death compensation benefits from the employer, the death of the seafarer (1) must be work-related; and (2) must happen during the term of the employment contract. The qualification that death must be work-related has made it necessary to show a causal connection between a seafarer’s work and his death to be compensable. Under the 2000 POEA Amended Employment Contract, work-related injury is defined as an injury(ies) resulting in disability or death arising out of and in the course of employment. Iloilo Dock & Engineering Co. v. Workmen’s Compensation Commission – the words “arising out of” refer to the origin or cause of the accident, while the words “in the course of” refer to the time, place, and circumstances under which the accident takes place. At the time of the accident, Sy was on shore leave and there was no showing that he was doing an act in relation to his duty as a seaman. Because of the 20% alcohol found in his urine, it can be presumed that he just came from a personal social function which was not related at all to his job as a seaman. His death could not be considered work-related to be compensable. Their contract clearly provides that it is not enough that death occurred during the term of the contract, but must be work-related to be compensable.

Hocheng vs. Farrales

Facts: On December 2, 2009, Hocheng Philippines Corporation (HPC) received a report that a motorcycle helmet was stolen at the parking lot within its premises. The theft was recorded in the company CCTV showing Antonio Farrales, an employee taking the missing helmet from a parked motorcycle. Farrales subsequently sent a notice to explain. According to him, he asked a co-worker named Eric Libutan if he could borrow his helmet and that since they reside in the same barangay Eric could pick it up from his house afterwards. In the parking lot, he asked Andy Lopega to hand him a yellow helmet hanging from a motorcycle parked next to him. Upon seeing Eric again, he asked why Eric did not get the helmet from his house to which he replied, “Hindi po sa akin yung nakuha nyong helmet.” Farrales then informed the HPC guard and upon finding out who owned the helmet, returned it and apologized saying it was an honest mistake. A hearing regarding the incident was consequently set by the company. On February 15, 2010, the company dismissed Farrales from service for violating the HPC Code of Discipline, which provides that “stealing from the company, its employees and officials, or from its contractors, visitors or clients,” is akin to serious misconduct and fraud which are just causes for termination of employment. On March 25, 2010, Farrales filed a complaint for illegal dismissal. The Labor Arbiter ruled in favor of Farrales, ordering HPC to pay Farrales. Upon appeal, the NLRC reversed the LA’s decision. However, the CA agreed with the LA that Farrales’ act of taking Reymar’s helmet did not amount to theft, since Eric did admit letting Farrales borrow his helmet, only Farrales mistook which helmet was his. Issue:

WON Farrales was validly dismissed

Held: To validly dismiss an employee, the law requires the employer to prove the existence of any of the valid or authorized causes, which, as enumerated in Article 282 of the Labor Code, are: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter’s representative in connection with his work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. Article 4 of the Labor Code mandates that all doubts in the implementation and interpretation of the provisions thereof shall be resolved in favor of labor. The Court previously held that “to be lawful, the cause for termination must be a serious and grave malfeasance to justify the deprivation of a means of livelihood.” Moreover, the penalty imposed on the erring employee ought to be proportionate to the offense, taking into account its nature and surrounding circumstances. The Court agrees with the CA that Farrales committed no serious or willful misconduct or disobedience to warrant his dismissal. Farrales lost no time in returning the helmet the moment he learned of his mistake and immediately admitted his error to the company guard and sought help to find the owner of the yellow helmet. Misconduct is willful in character, and implies wrongful intent and not mere error in judgment, and it must be in connection with the employee’s work to constitute just cause for his separation. But where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal. If doubts exist between the evidence presented by the employer and that of the employee, the scales of justice must be tilted in favor of the latter. Serrano vs Severino Santos Petitioner: Rodolfo Serrano Respondent: Severino Santos Transit/ Severino Santos Citation:627 SCRA 483

Date of Promulgation: August 9, 2010 Ponente: Carpio, J FACTS:  Rodolfo J. Serrano was hired on September 28, 1992 as bus conductor by Severino Santos transit, a bus company owned and operated by Severino Santos.  After 14 years of service or on July 14, 2006, petitioner applied for optional retirement from the company whose representative advised him that he must first sign the already prepared Quitclaim before his retirement pay could be released.  As petitioner’s request to first go over the computation of his retirement pay was denied, he signed the Quitclaim on which he wrote “U.P.” (under protest) after his signature, indicating his protest to the amount of P75,277.45 which he received, computed by the company at 15 days per year of service.  Petitioner soon after filed a complaint, alleging that the company erred in its computation since under Republic Act No. 7641, otherwise known as the Retirement Pay Law, his retirement pay should have been computed at 22.5 days per year of service to include the cash equivalent of the 5-day service incentive leave (SIL) and 1/12 of the 13th month pay which the company did not. Severino Santos Defense  The Quitclaim signed by petitioner barred his claim and, in any event, its computation was correct since petitioner was not entitled to the 5-day SIL and pro-rated 13th month pay for, as a bus conductor, he was paid on commission basis. ISSUE: Whether or not 22.5 days retirement pay per year of service is the correct formula. RULING: Republic Act No. 7641 which was enacted on December 9, 1992 amended Article 287 of the Labor Code by providing for retirement pay to qualified private sector employees in the absence of any retirement plan in the establishment. The pertinent provision of said law reads: Section 1. Article 287 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, is hereby amended to read as follows: In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Admittedly, petitioner worked for 14 years for the bus company which did not adopt any retirement scheme. Even if petitioner as bus conductor was paid on commission basis then, he falls within the coverage of R.A. 7641 and its implementing rules. As thus correctly ruled by the Labor Arbiter, petitioner’s retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th month pay. Autobus vs Bautista Petitioner: Autobus Transport Systems, Inc. Respondent: Antonio Bautista Citation: GR 156367

Date of Promulgation: May 16, 2005 Ponente: Chico- Nazaro, J FActs:  Antonio Bautista has been employed by Autobus, as driver-conductor and was paid oncommission basis, seven percent (7%) of the total gross income per travel, on a twice a monthbasis.  While Bautista was driving Autobus No. 114, he accidentally bumped the rear portion of Autobus No. 124.  Bautista averred that the accident happened because he was compelled by the management to go back to Roxas, Isabela, although he had not slept for almost 24 hours, as he had just arrived in Manila from Roxas, Isabela.  Furthermore, he alleged that he was not allowed to work until he fully paid 30% of the cost of repair of the damaged busesand that his pleas for reconsideration were ignored by management.  After a month, management sent him a letter of termination.  Thus, he instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leavepay.  Autobus maintained that Bautista’s employment was replete with offenses.  Furthermore,Autobus avers that in the exercise of its management prerogative, Bautista's employment was terminated only after the latter was provided with an opportunity to explain.  The Labor Arbiter dismissed the complaint but ordered Autobus to pay his 13th month pay fromthe date of his hiring to the date of his dismissal, as well as his service incentive leave pay for allthe years he had been in service.  Autobus appealed to the NLRC which deleted the award of 13thmonth pay based on the Rules and Regulations Implementing Presidential Decree No. 851,particularly Sec. 3 which exempts employers of those who are paid on purely commission,boundary, or task basis.  Records showed that Bautista, in his position paper, admitted that he was paid on a commission basis. The award of service incentive leave pay was maintained.  Thus, Autobus sought a reconsideration which was denied by NLRC.  CA affirmed the decisionof the NLRC ISSUE: Whether or not Bautista is entitled to Service Incentive Leave. RULING: What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is a field personnel. Field personnel is further elaborated in the Bureau of Working Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association[10] which states that: As a general rule, [field personnel] are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee Along the routes that are plied by these bus companies, there are its inspectors assigned at strategic places who board the bus and inspect the passengers, the punched tickets, and the conductor’s reports. There is also the mandatory once-a-week car barn or shop day, where the bus is regularly checked as to its mechanical, electrical, and hydraulic aspects, whether or nott here are problems thereon as reported by the driver and/or conductor. They too, must be at a specific place at a specified time, as they generally observe prompt departure and arrival from

their point of origin to their point of destination. In each and every depot, there is always the Dispatcher whose function is precisely to see to it that the bus and its crew leave the premisesat specific times and arrive at the estimated proper time. These, are present in the case at bar. The driver, the complainant herein, was therefore under constant supervision while in the performance of this work. He cannot be considered a field personnel. Therefore, Bautista is not a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of business of Autobus. Accordingly, Bautista is entitled to the grant of service incentive leave.

David vs Macasio Petitioner: Ariel David Respondent: John Macasio Citation: GR 195466 Date of Promulgation: July 2, 2014 Ponente: Brion, J FACTS: Macasio fled beore the Labor Arbiter a complaint against petitioner Ariel L. David for nonpayment of overtime pay, holiday pay, and 13th month pay.  Macasio had been working as a butcher for David since January 6, 1995. Macasio claimed that David exercised effective control and supervision over his work  David claimed that he started his hog dealer business in 2005 and alleged that he hired Macasio as a butcher or chopper on "pakyaw" or task basis who is, therefore, not entitled to overtime pay, holiday pay and 13th month pay pursuant to the provisions of the Implementing Rules and Regulations (IRR) of the Labor Code.  David pointed out that Macasio: a) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of the following day or earlier, depending on the volume of the delivered hogs; b) received the fixed amount of P700.00 per engagement, regardless of the actual number of hours that he spent chopping the delivered hogs; and c) was not engaged to report for work and, accordingly, did not receive any fee when no hogs were delivered. 

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Macasio disputed David’s allegations .He argued that, first, David did not start his business only in 2005. He pointed to the Certificate of Employment that David issued in his favor which placed the date of his employment, albeit erroneously, in January 2000. Second, he reported for work every day which the payroll or time record could have easily proved had David submitted them in evidence. Refuting Macasio’s submissions, David claims that Macasio was not his employee as he hired the latter on "pakyaw" or task basis. He also claimed that he issued the Certificate of Employment, upon Macasio’s request, only for overseas employment purposes.

ISSUE: Whether or not a worker paid in "pakyaw" basis is entitled to holiday pay m overtime pay, 13th month pay and Service Incentive Leave. RULING: SIL and Holiday Pay The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of SIL and holiday pay. They are exempted from the coverage of Title I (including the holiday and SIL pay) only if they qualify as "field personnel." The IRR therefore

validly qualifies and limits the general exclusion of "workers paid by results" found in Article 82 from the coverage of holiday and SIL pay. This is the only reasonable interpretation since the determination of excluded workers who are paid by results from the coverage of Title I is "determined by the Secretary of Labor in appropriate regulations. In short, in determining whether workers engaged on "pakyaw" or task basis" is entitled to holiday and SIL pay, the presence (or absence) of employer supervision as regards the worker’s time and performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94 (holiday pay) and Article95 (SIL pay) of the Labor Code. However, if the worker engaged on pakyaw or task basis also falls within the meaning of "field personnel" under the law, then he is not entitled to these monetary benefits. Macasio does not fall under the classification of "field personnel" 13th Month pay 13th month pay benefits generally cover all employees; an employee must be one of those expressly enumerated to be exempted. Section 3 of the Rules and Regulations Implementing P.D. No. 85154 enumerates the exemptions from the coverage of 13th month pay benefits. Under Section 3(e), "employers of those who are paid on xxx task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof"55 are exempted. Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No. 851 exempts employees "paid on task basis" without any reference to "field personnel." This could only mean that insofar as payment of the 13th month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement that the task worker be a "field personnel" at the same time. WHEREFORE, in light of these considerations, we hereby PARTIALLY GRANT the petition insofar as the payment of 13th month pay to respondent is concerned. In all other aspects, we AFFIRM the decision dated November 22, 2010 and the resolution dated January 31, 2011 of the Court of Appeals in CA-G.R. SP No. 116003.

Robina Farms vs Villa Petitioner: Robina Farms/ Universal Robina Corporatioj Respondent: Elizabeth Villa Citation: GR 175869 Date of Promulgation: April 18, 2016 Ponente: Bersamin, J FACTS:  Elizabeth Villa brought against the petitioner her complaint for illegal suspension, illegal dismissal, nonpayment of overtime pay, and nonpayment of service incentive leave pay  Villa averred that she had been employed by petitioner Robina Farms as sales clerk since August 1981; 1) that in the later part of 2001, the petitioner had enticed her to avail herself of the company's special retirement program; 2) that on March 2, 2002, she had received a memorandum from Lily Ngochua requiring her to explain her failure to issue invoices for unhatched eggs in the months of January to February 2002; 3) that she had explained that the invoices were not delivered on time because the delivery receipts were delayed and overlooked; 4) that despite her explanation, she had been suspended for 10 days from March 8, 2012 until March 19, 2002;

5) that upon reporting back to work, she had been advised to cease working because her application for retirement had already been approved; 6) that she had been subsequently informed that her application had been disapproved, and had then been advised to tender her resignation with a request for financial assistance; 7) that she had manifested her intention to return to work but the petitioner had confiscated her gate pass; 8) and that she had since then been prevented from entering the company premises and had been replaced by another employee. The petitioner admitted that Villa had been its sales clerk at Robina Farms. It stated that on December 12, 2001, she had applied for retirement under the special privilege program offered to its employees in Bulacan and Anti polo who had served for at least 10 years; 2) that in February 2002, her attention had been called by Anita Gabatan of the accounting department to explain her failure to issue invoices for the unhatched eggs for the month of February; 3) that she had explained that she had been busy; that Gabatan had referred the matter to Florabeth Zanoria who had in turn relayed the matter to Ngochua; 4) and that the latter had then given Villa the chance to explain, which she did. 

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The petitioner added that after the administrative hearing Villa was found to have violated the company rule on the timely issuance of the invoices that had resulted in delay in the payment of buyers considering that the payment had depended upon the receipt of the invoices She had been suspended from her employment as a consequence; that after serving the suspension, she had returned to work and had followed up her application for retirement with Lucina de Guzman, who had then informed her that the management did not approve the benefits equivalent to 86% of her salary rate applied for, but only Yz month for every year of service; and that disappointed with the outcome, she had then brought her complaint against the petitioners.

ISSUE: Whether or not Villa had been ilegally dismissed. RULING: Villa had not been dismissed from employment, holding thusly: Complainant's application, insofar the benefits are concerned, was not approved which means that while her application for retirement was considered, management was willing to give her retirement benefits equivalent only to half-month pay for every year of service and not 86% of her salary for every year of service as mentioned in her application. Mrs. De Guzman suggested that if she wanted to pursue her supposed retirement despite thereof, she should submit a resignation letter and include therein a request for financial assistance. We do not find anything illegal or violative in the suggestion made by Mrs. De Guzman. There was no compulsion since the choice was left entirely to the complainant whether to pursue it or not. Although ordering Villa's reinstatement, the Labor Arbiter denied her claim for backwages and overtime pay because she had not adduced evidence of the overtime work actually performed. The Labor Arbiter declared that Villa was entitled to service in MAXICARE VS CONTRERAS Petitioner: Maxicare PCIB Cigna Healthcare, Eric S. Nubla, M.D. and Ruth A. Asis, M.D. Respondent: Marian Brigitte A. Contreras, M.D. Citation: GR No. 194352 Date of Promulgation: January 30, 2013 Ponente: Velasco Jr., J.

FYI: Constructive Dismissal is an employer's act amounting to dismissal but made to appear as if it were not; a dismissal in disguise, i.e. an employee is allowed to continue to work but it is simply reassigned, or demoted, or his pay diminished without a valid reason to do so FACTS 1. Dr. Marian Contreras was hired by Maxicare as a retainer doctor at the Philippine National Bank Head Office sometime in March 2003. By virtue of a verbal agreement: - she would render medical services for one year at Php 250 per hour - her retainer fee would be paid every 15th and 30th of each month - her retainer fee would based on her work schedule which was every Tuesday, Thursday and Friday from 6am to 5pm 2. On July 3, 2003, Dr. Ruth Asis, Maxicare's medical specialist on Corporate Accounts, informed Dr. Contreras that she was going to be transferred to another account after a month. - Dr. Contreras agreed on the terms of the Service Agreement with Dr. Eric Nubla, Maxicare's VP for Medical Services; such was executed on August 4, 2003 1. regarding her transfer to Maybank Philippines for a period of 4 months (Aug 5 - Nov 29, 2003) 2. retainer fee of Php 168 per hour 3. Dr. Contreras reported to work for one day only. 4. On August 8, 2003, she filed a complaint before the Labor Arbiter claiming that she was constructively dismissed. - Maxicare insisted that there was no constructive dismissal 5. Labor Arbiter dismissed the complaint of Dr. Contreras for lack of merit. - if she was forced to sign the Service Agreement, she could have not reported to that assignment (Maybank) - her reporting to work for one day ratified the Service Agreement she signed and waived all her rights under the previous agreement (PNB) she is supposed to be entitled to reinforce - she should have ventilated the matter before signing and executing the questioned Service Agreement 6. NLRC reversed the Labor Arbiter's decision. - the Service Agreement's execution does not negate constructive dismissal arising from the termination of Dr. Contreras' PNB retainership without either just or authorized cause - she signed the Service Agreement but later repudiated it with a notice to Maxicare that she could not go on serving under such a disadvantageous situation (decrease of retainer fee) - the clear economic prejudice validated her claim of having reservation on the Service Agreement prior to her signature (she signed because it gave her no realistic chance to haggle for her job) 7. CA affirmed the conclusions of the NLRC - her transfer to Maybank resulting to the diminution of her salary was prejudicial to her interest and amounted to a constructive dismissal - Maxicare had the burden of proving that 1) the transfer made was valid or for legitimate grounds, 2) such transfer was not unreasonable, inconvenient or prejudicial. 8. Maxicare filed a petition before the SC. - there is no employer-employee relationship - Dr. Contreras was an independent contractor (she rendered services for a few hours a week, giving her free time to pursue her private practice) - terms of their agreement include that either party could terminate the arrangement upon one month's advance notice - Dr. Contreras is a highly educated person who freely, willingly, and voluntarily signed the new Medical Retainership Agreement. There is no truth that she was forced to sign the Service Agreement. ISSUE Whether or not there was an employee-employer relationship. HELD

Yes. Petition of Maxicare was denied. Maxicare is not unaware of Article 217 of the Labor Code which enumerates the cases where the Labor Arbiter has exclusive and original jurisdiction: cases only when there is an employeremployee relationship between the parties in dispute. - if Maxicare was at the position that there was no employer-employee relationship, it should questioned the jurisidiction of the Labor Arbiter right away - while it is true that the question of jurisdiction may be raised at any stage, it is also true that in the interest of fairness, questions challenging the jurisdiction of courts will not be tolerated if the party questioning such jurisdiction actively participates in the court proceedings and allows the court to pass judgement on the case. Review of labor cases is confined to questions of jurisdiction or grave abuse of discretion. The alleged absence of employer-employee relationship cannot be raised for the first time on appeal (Duty Free Philippines Services inc. v. Manolito Tria).

SEMBLANTE VS CA Petitioner: Marticio Semblante and Dubrick Pilar Respondent: Court of Appeals, Gallera De Mandaue/spouses Vicente and Maria Luisa Loot Citation: GR No. 196426 Date of Promulgation: August 15, 2011 Ponente: Velasco Jr., J. FYI: Four-fold Test refers to the usual test used to determine the existence of employeremployer relationship. FACTS 1. Marticio Semblante and Dubrick Pilar claim that they were hired by respondent-spouses Vicente and Maria Luisa Loot, owners of Gallera de Mandaue--a cockpit. - Semblante, as the official masiador, calls and takes bets from the gamecock owners and other bettors and orders the start of the cockfight; he also distributes the winnings after deducting the commission for the cockpit - Pilar, as the sentenciador, oversees the proper gaffing of fight cocks, determines the fighting cocks' physical condition and capabilities, and declares the result of the cockfight - Semblante receives Php 8,000 per month and Pilar receives Php 14,000 pero month. They work Tuesdays, Wednesdays, Saturdays and Sundays, excluding monthly derbies and special holidays. They work from 1pm-12mn or depending on the needs of the cockpit - Semblante and Pilar have been issued employee identification cards that they wear everytime they go to work - they allege not having incurred any infraction and/or violation 2. On November 14, 2003, petitioners were denied entry into the cockpit upon the instructions of the respondents. They were informed of the termination of their services effective that day. Petitioners then file a complaint for illegal dismissal. 3. Respondents denied that petitioners were their employees and claim that they were associates of respondents' independent contractor, Tomas Vega. - respondent are free to decide whether they will report to work or not - identification cards were given to them only to indicate that they were free from the normal entrance fee and to differentiate them from the general public 4. The Labor Arbiter found petitioners to be regular employees of the cockpit as they performed work that was necessary and indispensable to the usual trade or business of respondents for a number of year. 5. Respondents upon receiving the Labor Arbiter's decision dated September 14, 2004, filed an appeal with the NLRC on September 24, 2004.

- this was however without posting a cash or surety bond equivalent to the monetary award granted by the Labor Arbiter - it was only on Octobr 11, 2004 that respondents filed an appeal bond dated October 6, 2004. 6. In a Resolution dated August 25, 2005, the NLRC denied the appeal for non-perfection. - however, upon acting on respondents' Motion for Reconsideration, the NLRC reversed its Resolution on the ground that their appeal was meritorious 7. The NLRC, in a Resolution dated October 18, 2006, held that there was no employer-employee relationship between petitioners and respondents. - there was no separate individual contract with respondents was ever executed by petitioners 8. Petitioners went to the CA on a petition for certiorari. - they argued that the NLRC gravely abused its discretion in entertaining an appeal that was not perfected in the first place (the appeal bond being filed late) 9. The CA decided in favor of the respondents. - in some circumstances, the NLRC is allowed to be liberal in the interpretation of the rules in deciding labor cases. Although the appeal bond was filed late, an exceptional circumstance--the appeal being highly meritorious--in the case at bench warrants a relaxation of the bond requirement as a condition for perfecting the appeal - there is no employer-employee relationship 1. petitioners are akin to independent contractors who possess unique skills, expertise, and talent that distinguishes them from ordinary employees 2. they are not given salaries by the cockpit owners; their compensation is based on the arriba (commission) 3. respondents have no control over the means and methods of the manner by which petitioners should perform their work 4. petitioners are free to choose which cockpit arena to enter and offer their expertise 5. respondents did not supply petitioners with the tools and instrumentalities they need to perform their work 6. respondents only needed their talent and skills to be masiador and sentenciador. 10. Petitioners came to the SC arguing that the CA committed a reversible error in entertaining an appeal which was not perfected in the first place. ISSUE 1. Whether or not the CA committed reversible error in entertaining an appeal which was not perfected int he first place. 2. Whether or not there existed an employer-employee relationship. HELD No. The SC denied the petition for lack of merit. 1. Indeed, the posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the Decision of the Labor Arbiter. Article 223, Labor Code Appeal. Ñ Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: xxxx In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

The SC, time and again, has relaxed this rule on appeal bond when there are strong and compelling reasons for liberality, such as the prevention of miscarriage of justice extant in the case or the special circumstances in the case combined with its legal merits or the amount and the issue involved. - technical rules cannot prevent courts from exercising their duties to determine and settle, equitable and completely, the rights and obligations of the parties. 2. While the bond was filed late, it is evident that petitioners are not employees of respondents, since their relationship failed the four-fold test of employment. 1. the selection and engagement of the employee 2. the payment of wages 3. the power of dismissal 4. the power to control the employee's conduct (the most important element). As found by the NLRC and the CA: - the respondents had no part in petitioners' selection and management - petitioners were paid out of the arriba - petitioners performed their functions free from the direction and control of respondents - petitioners relied on their expertise and was never given by the respondents any tool needed for the performance of their work.

PSI VS CA Petitioner: Professional Services Inc. Respondent: Leonardo de Castro, Brion, Peraltam Bersamin, Del Castillo, Abad, Villarama Jr., Perez and Mendoza, JJ., the Court of Appeals, and Natividad and Enrique Agana Citation: GR No. 126297 Date of Promulgation: November 25, 2008 Ponente: Puno, J. FYI: Principle of Ostensible Agency/Doctrine of Apparent Authority imposes liability, not as the result of the reality of a contractual relationship, but rather because of the actions of a principal or an employer in somehow misleading the public into believing that the relationship or the authority exists; under the rule, the principal is bound by the acts of his agent with the apparent authority which he knowingly permits the agent to assume, or which he holds to the agent out to the public as possessing FACTS 1. Enrique and Natividad Agana (later substituted by her heirs) filed a complaint for damages against Dr. Miguel Ampil and Dr. Juan Fuentes when the two doctors neglected to remove from Natividad's body 2 gauzes. 2. The RTC, in a decision dated March 17, 1993, held PSI with Dr. Ampil and Dr. Fuentes liable for damages. 3. On appeal, the CA absolved Dr. Fuentes but affirmed the liability of PSI and Dr. Ampil, subject to the right of PSI to claim reimbursement from Dr. Ampil. 4. The SC affirmed the CA's decision in January 31, 2007. - PSI filed a Motion for Reconsideration but the Court denied it in a Resolution dated February 11, 2008. 5. The SC premised the direct liability of PSI to the Aganas incident on the following facts and law: a. There existed an emploter-employee relationship between PSI and Dr. Ampil. - as held in Ramos v CA, for purposes of allocating responsibility in medical negligence cases, an employer-employee relationship exists between hospitals and consultants

b. PSI's accreditation and advertisement of Dr. Ampil created the public impression that he was its agent. - Enrique testified that it was on account of PSI's accreditation of Dr. Ampil that he conferred with him about his wife's condition - when Enrique engaged the services of Dr. Ampil, at the back of his mind was that the doctor was a staff member of a prestigious hospital - under the doctrine of apparent authority applied in Nogales, et al v. Capitol Medical Center, et al, PSI was liable for the negligence of Dr. Ampil c. As operator of Medical City General hospital, PSI was bound by its duty to provide comprehensive medical services to Natividad Agana: 1) to exercise reasonable care to protect her from harm, 2) to oversee or supervise all persons who practiced medicine within its walls, and 3) to take active steps in fixing any form of negligence committed within its premises. - PSI committed a serious breach of its corporate duty when it failed to conduct an immediate investigation into the reported missing gauzes 6. PSI filed a second Motion for Reconsideration. Other hospitals, as intervenors, filed their petitions as well ISSUE Whether or not PSI should be held liable. HELD Yes. Petition was dismissed. The SC held that due to lack of evidence of an employment relationship with Dr. Ampil, the principle of respondeat superior cannot be applied. However, under the principle of ostensible agency, PSI is found liable. - there is ample evidence that the hospital (PSI) held out to the patient (Natividad) that the doctor (Dr. Ampil) was its agent. - present are the 2 factors that determine apparent authority: 1) the hospital's implied manifestation to the patient which led the latter to conclude that the doctor was the hospital's agent; 2) the patient's reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence. When Enrique was asked why he chose Dr. Ampil, he replied by stating that he has known Dr. Ampil to be a specialist as a surgeon, that he knows him as a staff member of the Medical City, and because he is a neighbor. - clearly, the decision made by Enrique to consult Dr. Ampil was significantly influenced by the impression that Dr. Ampil was a staff member of Medical City general hospital - Enrique looked upon Dr. Ampil not as an independent of but as integrally related to Medical City. Furthermore, PSI required a consent for hospital care to be signed preparatory to the surgery of Natividad. The form reads: Permission is hereby given to the medical, nursing and laboratory staff of the Medical City General Hospital to perform such diagnostic procedures and to administer such medications and treatments as may be deemed necessary or advisable by the physicians of this hospital for and during the confinement of xxx. And by such statement, PSI virtually reinforced the public impression that Dr. Ampil was a physician of its hospital, rather than one independently practicing; that the medications and treatments he prescribed were necessary and desirable; that the hospital staff was prepared to carry them out. This Court must therefore maintain the ruling that PSI is vicariously liable for the negligence of Dr. Ampil as its ostensible agent. It should be borne in mind that the corporate negligence ascribed to PSI is different from the medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those of

the doctor-consultant practicing within its premises in relation to the patient; hence, the failure of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the Aganas distinct from that of Dr. Ampil. All this notwithstanding, we make it clear that PSIs hospital liability based on ostensible agency and corporate negligence applies only to this case, pro hac vice. It is not intended to set a precedent and should not serve as a basis to hold hospitals liable for every form of negligence of their doctors-consultants under any and all circumstances. The ruling is unique to this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an admitted corporate duty to Natividad.

CALAMBA VS NLRC Petitionert: Calamba Medical Center Respondent: National Labor Relations Commission, Ronald Lanzanas and Merceditha Lanzanas Citation: GR No. 176484 Date of Promulgation: November 25, 2008 Ponente: Carpio Morales, J. FYI: Control Test, being part of the four-fold test as its most important element, refers to the employer’s power to control the employee’s conduct not only as to the result of the work to be done but also with respect to the means and methods by which the work is to be accomplished FACTS 1. Dr. Ronaldo Lanzanas and Dr. Merceditha Lanzanas was hired by the Calamba Medical Center as part of its team of resident physicians. - Dr. Lazanas on March 1992, paid Php 4,800 - Dr. Merceditha on August 1995, paid Php 4,800 - it appears that resident physicians were also given a percentage share out of fees charged for out-patient treatments, operating room assistance and discharge billings. - Dr. Raul Desipeda, the hospital's medical director, fixed the work schedules of the resident physicians - resident physicians are issued identification cards, enrolled in the SSS, and have income taxes withheld from them. 2. On March 7, 1998, Dr. Meluz Trinidad, another resident physician, overheard a telephone conversation between Dr. Lanzanas with Diosdado Miscala. - Dr. Lanzanas and Miscala were discussing about the low admission of patients to the hospital. - Dr. Trinidad called the attention of Dr. Desipeda regarding the issue. 3. Dr. Desipeda issued a memorandum against Dr. Lanzanas. - his conversation was alleged to be an act inimical to the interest of the hospital - he was given 24 hours to explain why no disciplinary action should be taken against him - he was placed under 30-days of preventive suspension pending the investigation of the case. 4. Dr. Desipeda did not give Dr. Merceditha, who was not involved in the issue, any work schedules after sending her husband the memorandum. She was not informed of the reason, but she was later informed by Human Resources that that was part of the hospital's cost-cutting measures. 5. Dr. Lanzanas responded to the memorandum and explained that his conversation with Miscala was taken out of context by Dr. Trinidad. 6. On March 14, 1998, rank-and-file employees union of the hospital went on strike due to unresolved grievances over terms and conditions of employment. 7. On March 20, 1998, Dr. Lanzanas filed a complaint for illegal suspension before the NLRC. Subsequently, Dr. Merceditha filed a complaint for illegal dismissal.

8. On April 21, 1998, Sec. Trajano of the DOLE certified the labor dispute to the NLRC for compulsory arbitration and issued a Return-to-Work Order to the striking union officers and employees pending the resolution of the labor dispute. 9. On April 22, 1998, Dr. Desipeda echoed the Return-to-Work Order of the Secretary of Labor directing all union officers and members to return to work on April 23, 1998, except those employees that were already terminated or are serving disciplinary action. 10. Calamba Medical Center sent a Notice of Termination to Dr. Lanzanas on April 25, 1998. - it indicated as grounds his supposed failure to report back to work despite the DOLE order and his supposed role in the striking union - Dr. Lanzanas then amended the information on his complaint to include illegal dismissal. 11. The Labor Arbiter dismissed the spouses' complaints for want of jurisdiction upon finding that there was no employer-employee relationship (the 4th requisite--control test-- being absent) 12. The NLRC, by a Decision dated May 3, 2002, reversed the Labor Arbiter's findings. 13. The CA, by a Decision dated June 30, 2004, initially granted Calamba Medical Center's petition and set aside the NLRC's ruling. - however, upon respondents' subsequent Motion for Reconsideration, the CA reinstated the NLRC decision in an Amended Decision dated September 26, 2006. - the CA found that there is in existence an employer-employee relationship 1. Medical Director still has direct supervision and control over respondents 2. Medical Director has to approve the schedule of duties of respondents 3. Medical Director issues instructions or orders to the respondents relating to the means and methods of performing their duties 4. Medical Director has the power to overrule, review or revise the decision of the resident physicians. - petitioner failed to prove that Dr. Lanzanas participated in the strike - petitioner's explanation that "her marriage to complainant Ronaldo has given rise to the presumption that her sympathies are likewise with her husband" as a ground for dismissal is unacceptable. Such is not a ground. ISSUES Whether or not there is an employer-employee relationship between petitioner and respondentspouses. HELD Yes. Decision of the CA is affirmed. Under the control test, there exist an employment relationship between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. - petitioner exercised control over respondents as proven from the fact that in the emergency room, operating room, or any department or ward for that matter, respondents' work is monitored through nursing supervisors, charge nurses and orderlies; without the petitioner's or the Medical Director's consent, no operations can be undertaken in such areas. - respondents were subject to the Code of Ethics of the hospital which cover administrative and disciplinary measures on negligence of duties, personnel conduct and behavior, and offenses against persons, property and the hospital's interest Proof of the respondents' employment status is the issuance of identification cards, the payslips and BIR W-2 (2316) Forms which reflect their status as employees, and the classification as "salary" of their remuneration. Moreover, it enrolled respondents in the SSS and Philhealth program. Furthermore, the issuance of the memorandum explicitly stating that respondent is "employed" and the termination letter indicating Lanzanas' employment status prove the employer-

employee relationship. Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee relationship exists between the resident physicians and the training hospitals, unless there is a training agreement between them, and the training program is duly accredited or approved by the appropriate government agency. Respondents were not undergoing any specialization training and were considered non-training general practitioners. Dr. Lanzanas claimed that after his 30-day preventive suspension, he was never given any work schedule. Petitioner did not even release any findings of its supposed investigation of Dr. Lanzanas' alleged inimical acts. Petitioner failed to observe two requirements before dismissal can be effected: 1) notice and 2) hearing, which constitute the essential elements of the statutory process. For the case of Dr. Merceditha, her dismissal was worse. It was without any just or authorized cause and without observance of due process. It was just her link to Dr. Lanzanas' that the petitioner found as a "valid cause for dismissal." The issue on respondents getting a share from hospital fees does not sever the employment tie between them and petitioner as this merely mirrors additional form of compensation or incentive similar to what commission-based employees receive as contemplated in Article 97 of the Labor Code. "Wage" paid to any employee shall mean the remuneration or earning, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. x x x

TONGKO vs MANUFACTURERS LIFE Petitioner: Gregorio V. Tongko Respondents: The Manufacturers Life Insurance Co. Inc, (Manulife) Renato Vergel De Dios Citation: GR No. 167622 Date of Promulgation: November 7, 2008 Ponente: Velasco FACTS:  Petition for Review on Certiorari: seeking the reversal of March 29, 2005 decision of CA, which set aside he Decision dated Sept. 27, 2004 and Resolution dated Dec. 16, 2004 rendered by NLRC  Manulife: engaged in the life insurance business. Renato Vergel de Dios was the President and CEO  Gregorio Tongko: started his professional relationship with Manulife on July 1, 1977 by a Career Agent’s Agreement (Please see yung naka-green sa next case. Ayun yung content nung Agreement. Same lang kasi)  1983: Tongko was named as Unit Manager in Manulife’s Sales Agency  1990: He became Branch Manager  Tongko’s gross earnings from his work, consisted of commission, persisteny income and management override

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2001: The problem started when Manulife instituted development programs in the Regional Sales Management Level. De Dios then sent Tongko a letter dated Nov. 6, 2001 stating his concerns over the latter’s ability to lead his group (Please see the whole case for the letter. Medyo mahaba eh, di ko na sinama) Dec. 18, 2001: De Dios terminated Tongko’s employment through a letter Tongko then filed a Complaint for Illegal Dismissal at NLRC. Such was raffled to LA Marita V. Padolina. Allegations of Tongko - In a bid to establish an E-E relationship, he alleged that De Dios gave him specific directives on how to manage his area of responsibility in the latter’s letter dated Nov. 6, 2001 - Manulife exercised control over him - He cited Insular Life Assurance Co Ltd v NLRAC and Great Pacific Life Insurance which he claimed to be similar to his case - His dismissal was without basis and he was not afforded with due process - His actions were said to be controlled by Manulife Code of Conduct Manulife filed a Position Paper with Motion to Dismiss. It alleged that Tongko is not its employee and that it did not exercise control over him, and NLRC has no jurisdiction DECISION dated April 15, 2004 by LA Padolina: no E-E relationship. The 4-fold test cant be applied NLRC: reversed LA’s decision. The NLRC’s First Division, while finding an E-E relationship applying the 4-fold test held Manulife liable for illegal dismissal. Further, Manulife has control over Tongko as evidenced by a letter dated Nov. 6, 2001 MR to NLRC by Manulife: denied CA: no E-E relationship

ISSUE: 1. W/N there exist E-E relationship between the parties 2. W/N Tongko was illegally dismissed HELD: 1. Yes. In the determination of whether an employer-employee relationship exists between two parties, this Court applies the four-fold test to determine the existence of the elements of such relationship. In Pacific Consultants International Asia, Inc. v. Schonfeld, the Court set out the elements of an employer-employee relationship, thus: Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee's conduct. It is the so-called "control test" which constitutes the most important index of the existence of the employer-employee relationship that is, whether the employer controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Stated otherwise, an employeremployee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end. The NLRC, for its part, applied the four-fold test and found the existence of all the elements and declared Tongko an employee of Manulife. The CA, on the other hand, found that the element of control as an indicator of the existence of an employer-employee relationship was lacking in this case. The NLRC and the CA based their rulings on the same findings of fact but differed in their interpretations.

The NLRC arrived at its conclusion, first, on the basis of the letter dated November 6, 2001 addressed by De Dios to Tongko. According to the NLRC, the letter contained "an abundance of directives or orders that are intended to directly affect complainant's authority and manner of carrying out his functions as Regional Sales Manager The NLRC further ruled that the different codes of conduct that were applicable to Tongko served as the foundations of the power of control wielded by Manulife over Tongko that is further manifested in the different administrative and other tasks that he was required to perform. The NLRC also found that Tongko was required to render exclusive service to Manulife, further bolstering the existence of an employer-employee relationship. Finally, the NLRC ruled that Tongko was integrated into a management structure over which Manulife exercised control, including the actions of its officers. The NLRC held that such integration added to the fact that Tongko did not have his own agency belied Manulife's claim that Tongko was an independent contractor. The CA, however, considered the finding of the existence of an employer-employee relationship by the NLRC as far too sweeping having as its only basis the letter dated November 6, 2001 of De Dios. The CA did not concur with the NLRC's ruling that the elements of control as pointed out by the NLRC are "sufficient indicia of control that negates independent contractorship and conclusively establish an employer-employee relationship between" 15 Tongko and Manulife. The CA ruled that there is no employer-employee relationship between Tongko and Manulife. An impasse appears to have been reached between the CA and the NLRC on the sole issue of control over an employee's conduct. It bears clarifying that such control not only applies to the work or goal to be done but also to the means and methods to accomplish it. In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the volume of new business required of Production Club membership. 21 Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established. Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's goals.

More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife. 2. Yes. In its Petition for Certiorari dated January 7, 2005 filed before the CA, Manulife argued that even if Tongko is considered as its employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of Manulife. Manulife stated: In the instant case, private respondent, despite the written reminder from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative of his willful disobedience of the lawful orders of his superior. x x x xxxx As private respondent has patently failed to perform a very fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is no illegal dismissal to speak of. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed. More importantly, Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the same to disobedience and neglect of duty. WHEREFORE, the petition is hereby GRANTED. The assailed March 29, 2005 Decision of the CA in CA-G.R. SP No. 88253 is REVERSED and SET ASIDE. The Decision dated September 27, 2004 of the NLRC is REINSTATED with the following modifications: Manulife shall pay Tongko the following: (1) Full backwages, inclusive of allowances and other benefits or their monetary equivalent from January 2, 2002 up to the finality of this Decision; (2) Separation pay of one (1) month salary for every year of service from 1977 up to 2001 amounting to PhP 12,435,474.24; (3) Nominal damages of PhP 30,000 as indemnity for violation of the due process requirements; and (4) Attorney's fees equivalent to ten percent (10%) of the aforementioned backwages and separation pay.

TONGKO vs MANUFACTURERS LIFE Petitioner: Gregorio V. Tongko Respondents: The Manufacturers Life Insurance Co. Inc, (Manulife) Renato Vergel De Dios

Citation: GR No. 167622 Date of Promulgation: June 29, 2010 Ponente: Brion FACTS:  Motion for Reconsideration dated Dec. 3, 2008: filed by the Respondent to set aside the DECISION of Nov. 7, 2008, finding that an employer-employee relationship existed between Tongko and Manulife, and ordered the latter to pay Tongko backwages and separation pay to pay for illegal dismissal  CONTENTS OF THE ASSAILED DECISION:  The contractual relationship between Tongko and Manulife had two basic phases. The first or initial phase began on July 1, 1977 under a Career Agent’s Agreement, that provided: - It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. xxxx a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and other products offered by the Company, and collect, in exchange for provisional receipts issued by the Agent, money due to or become due to the Company in respect of applications or policies obtained by or through the Agent or from policyholders allotted by the Company to the Agent for servicing, subject to subsequent confirmation of receipt of payment by the Company as evidenced by an Official Receipt issued by the Company directly to the policyholder. xxxx The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right under any provision of this Agreement Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15) days notice in writing.

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 The second phase started in 1983 when Tongko was named Unit Manager in Manulife’s Sales Agency Organization. In 1990, he became a Branch Manager. Six years later (or in 1996), Tongko became a Regional Sales Manager - Tongko’s gross earnings consisted of commissions, persistency income and management overrides - He declared himself self-employed in his income tax returns - Under oath, he de declared his gross business income and deducted his business expenses to arrive at his taxable business income. Manulife withheld the corresponding 10% tax on Tongko’s earnings 2001: Manulife instituted manpower development programs at the Regional Sales Management. RENATOR VERGEL DE DIOS wrote Tongko Letter: - The first step to transforming Manulife into a big league player has been very clear – to increase the number of agents to at least 1,000 strong for a start. This may seem diametrically opposed to the way Manulife was run when you first joined the organization. Since then, however, substantial changes have taken place in the organization, as these have been influenced by developments both from within and without the company. - Issue #2: "Some Managers are unhappy with their earnings and would want to revert to the position of agents."

Issue # 3: "Sales Managers are doing what the company asks them to do but, in the process, they earn less." December 18, 2001: De Dios wrote Tongko another letter terminating the latter’s services Tongko: Complaint for Illegal Dismissal at NLRC LA: no E-E relationship NLRC: reversed the LA’s decision CA: NLRC gravely abused its discretion in its ruling and reverted to LA’s decision that no E-E relationship existed. It applied the four-fold test for determining control and found the elements in this case to be lacking, basing its decision on the same facts used by the NLRC. It found that Manulife did not exert control over Tongko, there was no employer-employee relationship and thus the NLRC did not have jurisdiction over the case. SC (Nov. 7, 2008 decision): there is an E-E relationship SC (June 29, 2010 Resolution): reversed the Nov 7, 2008 decision Manulife then filed a Motion for Recon -

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ISSUE: W/N there exist an employer-employee relationshiop between Tongko and Manulife? HELD: NO. The Supreme Court finds no reason to reverse the June 29, 2010 decision. Control over the performance of the task of one providing service both with respect to the means and manner, and the results of the service is the primary element in determining whether an employment relationship exists. The Supreme Court ruled petitioners Motion against his favor since he failed to show that the control Manulife exercised over him was the control required to exist in an employer-employee relationship; Manulifes control fell short of this norm and carried only the characteristic of the relationship between an insurance company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code. In the Supreme Courts June 29, 2010 Resolution, they noted that there are built-in elements of control specific to an insurance agency, which do not amount to the elements of control that characterize an employment relationship governed by the Labor Code.The Insurance Code provides definite parameters in the way an agent negotiates for the sale of the companys insurance products, his collection activities and his delivery of the insurance contract or policy. They do not reach the level of control into the means and manner of doing an assigned task that invariably characterizes an employment relationship as defined by labor law. To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result. Tested by this norm, Manulifes instructions regarding the objectives and sales targets, in connection with the training and engagement of other agents, are among the directives that the principal may impose on the agent to achieve the assigned tasks.They are targeted results that Manulife wishes to attain through its agents. Manulifes codes of conduct, likewise, do not necessarily intrude into the insurance agents means and manner of conducting their sales. Codes of conduct are norms or standards of behavior rather than employer directives into how specific tasks are to be done. In sum, the Supreme Court found absolutely no evidence of labor law control.

BENARES v PANCHO Petitioner: Josefina Benares

Respondents: Jaime Pancho, Rodolfo Pancho, Jr., Joselito Medalla, Paquito Magallanes, Alicia Magallanes, Evelyn Magallanes, Violeta Villacampa, Maritess Pancho, Rogelio Pancho And Arnolfo Pancho Citation: GR No. 151827 Date of Promulgation: April 29, 2005 Ponente: Tinga FACTS:  Petition for Review on Certiorari: Decision of CA which affirmed the NLRC’s decision holding that respondents were illegally dismissed and ordering petitioner to pay respondents separation pay, backwages, 13th month pay, cost of living allowances, emergency relief allowance, salary differentials and attorney’s fee  Respondents alleged to have started working as sugar farm workers on various occasions in a sugar cane plantation (Had Maasin II) in Murcia, Negros Occidental owned and managed by Josefina Benares  July 24, 1991: Respondents thru counsel wrote the Regional Director of the Department of Labor and Employment, Bacolod City for intercession particularly in the matter of wages and other benefits mandated by law.  September 24, 1991: a routine inspection was conducted by personnel of the Bacolod District Office of the Department of Labor and Employment. Accordingly, a report and recommendation was made, hence, the endorsement by the Regional Director of the instant case to the Regional Arbitration Branch, NLRC, Bacolod City for proper hearing and disposition  October 15, 1991: Respondents alleged to have been terminated without being paid termination benefits by respondent in retaliation to what they have done in reporting to the Department of Labor and Employment their working conditions viz-a-viz (sic) wages and other mandatory benefits.  July 14, 1992: notification and summons were served to the parties wherein complainants were directed to file a formal complaint  July 28, 1992: a formal complaint was filed for illegal dismissal with money claims.  From the records, summons and notices of hearing were served to the parties and apparently no amicable settlement was arrived, hence, the parties were directed to file their respective position papers. 

January 22, 1993: complainant submitted their position paper, while respondent filed its position paper on June 21, 1993.

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March 17, 1994: complainants filed their reply position paper and affidavit. Correspondingly, a rejoinder was filed by respondent on May 16, 1994.

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August 17, 1994: from the Minutes of the scheduled hearing, respondent failed to appear, and that the Office will evaluate the records of the case whether to conduct a formal trial on the merits or not, and that the corresponding order will be issued.

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January 16, 1996, the Labor Arbiter issued an order to the effect that the case is now deemed submitted for resolution.

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April 30, 1998: the Labor Arbiter a quo issued the assailed decision dismissing the complaint for lack of merit.

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June 26, 1998: Appeal anchored on the ground that THE HONORABLE LABOR ARBITER GRAVELY ABUSED ITS DISCRETION AND SERIOUSLY ERRED IN HOLDING THAT THE

COMPLAINANTS FAILED TO DISCUSS THE FACTS AND CIRCUMSTANCES SURROUNDING THEIR DISMISSAL, HENCE, THERE IS NO DISMISSAL TO SPEAK OF AND THAT COMPLAINANTS FAILED TO ALLEGE AND PROVE THAT THEIR CLAIMS ARE VALID, HENCE THE DISMISSAL OF THEIR COMPLAINT WOULD CAUSE GRAVE AND IRREPARABLE DAMAGE TO HEREIN COMPLAINANTS 

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NLRC: respondents attained the status of seasonal workers of Had Maasin II having worked from 1964-1985. Petitioner failed to discharge the burden of proving that the termination was a just or authorized cause. Hence, respondents were illegally dismissed and should be awarded with money claims CA: affirmed NLRC’s decision with the modification that the backwages and other monetary benefits shall be computed from the time compensation was withheld in accordance with Article 279 of the Labor Code, as amended by Republic Act No. 6715.

ISSUE: 1. W/N respondents are regular employees of Hacienda Maasin and thus entitled to their money claims? 2. W/N respondents were illegally terminated HELD: 1. This case presents a good opportunity to reiterate the Court’s rulings on the subject of seasonal employment. The Labor Code defines regular and casual employment, viz: Art. 280. REGULAR AND CASUAL EMPLOYMENT.—The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. The law provides for three kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular nor project employees. In this case, petitioner argues that respondents were not her regular employees as they were merely "pakiao" workers who did not work continuously in the sugar plantation. They performed such tasks as weeding, cutting and loading canes, planting cane points, fertilizing, cleaning the drainage, etc. These functions allegedly do not require respondents’ daily presence in the

sugarcane field as it is not everyday that one weeds, cuts canes or applies fertilizer. In support of her allegations, petitioner submitted "cultivo" and milling payrolls. The probative value of petitioner’s evidence, however, has been passed upon by the labor arbiter, the NLRC and the Court of Appeals. Although the labor arbiter dismissed respondents’ complaint because their "position paper is completely devoid of any discussion about their alleged dismissal, much less of the probative facts thereof," 20 the ground for the dismissal of the complaint implies a finding that respondents are regular employees. The NLRC was more unequivocal when it pronounced that respondents have acquired the status of regular seasonal employees having worked for more than one year, whether continuous or broken in petitioner’s hacienda. According to petitioner, however, the NLRC’s conclusion is highly suspect considering its own admission that there are "gray areas which requires (sic) clarification." She alleges that despite these gray areas, the NLRC "chose not to remand the case to the Labor Arbiter….as this would unduly prolong the agony of the complainants in particular." 21 Petitioner perhaps wittingly omitted mention that the NLRC "opted to appreciate the merits of the instant case based on available documents/pleadings." 22 That the NLRC chose not to remand the case to the labor arbiter for clarificatory proceedings and instead decided the case on the basis of the evidence then available to it is a judgment call this Court shall not interfere with in the absence of any showing that the NLRC abused its discretion in so doing. The Court of Appeals, in fact, found no such grave abuse of discretion on the part of the NLRC. Accordingly, it dismissed the petition for certiorari and affirmed with modification the findings of the NLRC. It is well to note at this point that in quasi-judicial proceedings, the quantum of evidence required to support the findings of the NLRC is only substantial evidence or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion The issue, therefore, of whether respondents were regular employees of petitioner has been adequately dealt with. The labor arbiter, the NLRC and the Court of Appeals have similarly held that respondents were regular employees of petitioner. Since it is a settled rule that the factual findings of quasi-judicial agencies which have acquired expertise in the matters entrusted to their jurisdiction are accorded by this Court not only respect but even finality, 24 we shall no longer disturb this finding. Petitioner next underscores the NLRC decision’s mention of the "payroll" she presented despite the fact that she allegedly presented 235 sets of payroll, not just one payroll. This circumstance does not in itself evince any grave abuse of discretion on the part of the NLRC as it could well have been just an innocuous typographical error. Verily, the NLRC’s decision, affirmed as it was by the Court of Appeals, appears to have been arrived at after due consideration of the evidence presented by both parties. 2. YES. We also find no reason to disturb the finding that respondents were illegally terminated. When there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a just or authorized cause. 25 In this case, as found both by the NLRC

and the Court of Appeals, petitioner failed to prove any such cause for the dismissal of respondents. REYES V GLAUCOMA RESEARCH PETITIONER: Jesus G. Reyes RESPONDENTS: Glaucoma Research Foundation, Inc., Eye Referral Center Manuel B. Agulto DOCKET NO.: G.R. No. 189255 DATE: June 17, 2015 PONENTE: Peralta, J FACTS   Reyes filed a complaint for illegal dismissal against the respondents with the NLRC, NCR, QC. o Aug 1 2003 – hired by Glaucoma Research Foundation, Inc as administrator of its Eye Referral Center (ERC). Continuously received his monthly salary of P20,000 until the end of Jan 2005 o Feb 2005 – Glaucoma withheld Reyes’ salary w/o notice but he still continued to report for work o Apr 11 2005 – Reyes wrote a letter to Manuel Agulto, Executive Director of Glaucoma, informing Agulto that he has not been receiving his salaries since Feb 2005 as well as his 14th month pay for 2004. No response. o Apr 21 2005 – Reyes was informed by the Asst to the Executive Director as well as the Asst Administrative Officer, that he is no longer the Administrator of the ERC. His office was padlocked and closed w/o notice. Still continued to report for work but on  o Apr 29 2005 – no longer allowed by the security guard on duty to enter the premises of the ERC   Respondents’ contentions: o Upon Reyes’ representation that he is an expert in corporate organizational structure and management affairs, they engaged his services as a consultant/adviser in the formulation of an updated organizational set-up and employees’ manual w/c is compatible w their present condition o Reyes’ claimed that there is a need for an administrator for the ERC, he later designated himself as such on a trial basis o No EE Relationship because respondents had no control over Reyes in terms of working hours as he reports for work anytime of the day and leaves as he pleases o Also no control as to the manner he performs his alleged duties as consultant o Reyes became overbearing and his relationship w the employees and the officers of the company soured leading to the filing of 3 complaints against him o Reyes was not dismissed as he was the one who voluntarily severed his relations w the respondents   Jan 30 2006 – the Labor Arbiter DISMISSED PETITIONER’S COMPLAINT. o Reyes failed to establish that the elements of an EE relationship existed b/w him and respondents, because he was unable to show that he was appointed as administrator of the ERC. And received salaries as such o Failed to deny that during his stint with the respondents, he was, at the same time, a consultant of various gov’t agencies (Manila Int’l Airport Authority, Manila Intercontinental Port Authority, Anti-Terrorist Task Force for Aviation and Air Transportation Sector) o His actions were neither supervised nor controlled by the management of the ERC o Did not observe working hours by reporting for work and leaving therefrom as he pleased

o He was receiving allowances, NOT SALARIES, as a consultant   NLRC: Set aside the Decision of the LA o Declared petitioner as illegally dismissed o Ordered respondents to reinstate him to his former position w/o loss of seniority rights and privileges w full backwages o It was incumbent for the respondent to discharge the burden of proving that petitioner’s dismissal was for cause and effected after due process was observed   Respondents filed an MR. Denied by the NLRC on its Decision dtd May 30 2008   Respondents filed a Petition for Certiorari w CA. CA: set aside the NLRC Decision and reinstated the LA Decision. o Under the control test and the economic reality test, no EE relationship existed b/w respondents and petitioner   Petitioner Reyes filed and MR but CA denied in its Reso dtd Aug 25 2009   ISSUE: WON CA erred and abused its discretion in ruling that NO EE RELATIONSHIP EXISTS B/W RESPONDENT AND PETITIONER  HELD: No. The CA did not err in said ruling because THERE EXISTS NO EE RELATIONSHIP B/W RESPONDENT AND PETITIONER. o In an illegal dismissal case, the burden of proof rests on the employer to prove that its dismissal of an employee was for a valid cause. However, an EE R must first be established. o The power of the employer to control the work of the employee is considered the most significant determinant of the existence of an EE R. o In the present case, petitioner showed as evidence of respondents’ supposed control over him, the organizational plans he has drawn were subject to the approval of respondent corporation’s Board of Trustees.  The SC, however, agreed with the CA on this matter that respondents’ power to approve or reject the organizational plans drawn by petitioner cannot be the control contemplated in the “control test”. o The SC also held that there is no EE R where the supposed employee is not subject to a set of rules and regulations governing the performance of his duties under the agreement w the company and is not required to report for work at any time, nor to devote his time exclusively to working for the company. o Further findings show that there are no deductions for SSS and withholding tax from his compensation, w/c are usual deductions from employees’ salaries. Thus the alleged pay slips he showed my not be treated as competent evidence of his claim that he is a respondents’ employee. o Additional evidence: affidavits of Roy Olivares (Medical Records Custodian) and Aurea Luz Esteva (Administrative Officer) stating that he was hired as a consultant and not as an employee of respondent corporation o Petitioner’s designation as an administrator neither disproves respondents’ contention that he was engaged ONLY AS A CONSULTANT. o PETITION DENIED. CA AFFIRMED. PAGUIO V NLRC PETITIONER: Efren P. Paguio RESPONDENT: National Labor Relations Commission Metromedia Times Corporation Robina Y. Gokongwei Liberato Gomez, Jr. Yolanda E. Aragon Frederick D. Go Alda Iglesia

DOCKET NO. G.R. No. 147816 PROMUL: May 9, 2003 PONENTE: Vitug, J FACTS  June 22, 1992 – Metromedia entered for the 5 th time into an agreement with Paguio, appointing Paguio to be the acct exec of the firm o Paguio was to solicit advertisements from “The Manila Times” (newspaper of gen. circ published by Metromedia) o Paguio was to receive compensation consisting of:  15% commission on direct advertisements less withholding tax  10% compensation on agency advertisements based on gross revenues less agency commission and the corresponding withholding tax  Commissions were to be released every 15 days of each month, to be given to Paguio only after the clients would have paid for the advertisements o Paguio was also entitled to a monthly allowance of P2,000 as long as he met the P30,000 monthly quota.  Contentious raised by the parties had something to do with the following stipulations of the agreement: o 12.) You are not an employee of the Metromedia Times Corporation nor does the company have any obligations towards anyone you may employ, nor any responsibility for your operating expenses or for any liability you may incur. The only rights and obligations between us are those set forth in this agreement. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties. o 13.) Either party may terminate this agreement at any time by giving written notice to the other, thirty (30) days prior to effectivity of termination.  Aug 15, 1992 (2 months after the renewal of the contract) – Paguio received the following notice from Metromedia: Dear Mr. Paguio, Please be advised of our decision to terminate your services as Account Executive of Manila Times effective September 30, 1992. 

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This is in accordance with our contract signed last July 1, 1992. Paguio was not given the opportunity to defend himself from the vague allegations of misconduct thrown at him: o Pirating clients from his co-executives o Failing to produce results Paguio filed a case before the labor arbiter asking: o that his dismissal be declared unlawful o reinstatement, with entitlement to backwages w/o loss of seniority rights o company officials be held accountable for acts of unfair labor practice, for P500,000 moral damages and for P200,000 exemplary damages Metromedia defense: it did not enter into any agreement with petitioner outside of the contract of services under Articles 1642 and 1644 of the Civil Code of the Philippines. Labor arbiter: o DECLARED THE DISMISSAL ILLEGAL o Ordered Metromedia and its officers to reinstate Paguio to his former position w/o loss of seniority rights, to pay him his commissions and other remuneration accruing from the date of dismissal on 15 August 1992 up until his reinstatement. o Also adjudged that Liberato I. Gomez, gen mngr of Metromedia, liable to Paguio for moral damages in the amount of P20,000 NLRC:

REVERSED THE LABOR ARBITER DECISION Declared the contractual relationship b/w the parties as being for a fixed-term employment, one which “lawful as long as it was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the worker and absent any other circumstances vitiating his consent.” CA: upheld the decision of the NLRC ISSUE: WON Paguio has been justly dismissed from service HELD: No. Paguio has been unjustly dismissed. RELATED LAW: o Art 280 LC: Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the proceeding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. RATIO: o The nature of the contractual relationship between petitioner and respondent company was of REGULAR EMPLOYMENT, as rightly taken into acct by the labor arbiter. Metromedia reserves not only of the right to control the results to be achieved but likewise the manner and the means used in reaching that end. o The petitioner performed activities which were necessary and desirable to the business of the employer, and that the same went on for more than a year, could hardly be denied. Petitioner was an account executive in soliciting advertisements, clearly necessary and desirable, for the survival and continued operation of the business of respondent corporation. Robina Gokongwei, its President, herself admitted that the income generated from paid advertisements was the lifeblood of the newspaper’s existence. Implicitly, respondent corporation recognized petitioner’s invaluable contribution to the business when it renewed, not just once but five times, its contract with petitioner. o A stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his security of tenure. o A lawful must be for a just or authorized cause and must comply with the rudimentary due process of notice and hearing. It is not shown that respondent company has fully bothered itself with either of these requirements in terminating the services of petitioner. The notice of termination recites no valid or just cause for the dismissal of petitioner nor does it appear that he has been given an opportunity to be heard in his defense. NLRC and CA decisions SET ASIDE. The decision of the Labor Arbiter is REINSTATED except with respect to the P20,000.00 moral damages adjudged against respondent Liberato I. Gomez which award is deleted. (The evidence, found by the appellate court is wanting that would indicate bad faith or malice on the part of respondents, particularly by respondent Liberato I. Gomez) o o

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CORPORAL V NLRC PETITIONERS:

Osias I. Corporal, Sr. Pedro Tolentino Manuel Caparas Elpidio Lacap Simplicio Pedelos Patricia Nas Teresita Flores RESPONDENTS: National Labor Relations Commission Lao Enteng Company, Inc. Trinidad Lao Ong DOCKET NO.: G.R. No. 129315 DATE: Oct. 2, 2000 PONENTE: Quisumbing, J FACTS:  Male petitioners, Corporal, Sr., Tolentino, Caparas, Lacap, Padelos – barbers; Female petitioners – Flores and Nas; at New Look Barber Shop (New Look) at 651 P. Paterno Street, Quiapo, Manila, owned by Lao Enteng Co. Inc.  Petitioners claim that at the start of their employment, New Look was a single proprietorship owned by Mr. Vicente Lao. Jan. 1982, children of Vicente organized a corporation w/c was registered w/ Securities and Exchange Commission (SEC) as Lao Enteng Co, Inc., with Trinidad Ong as president. Upon incorporation, Lao Enteng Co Inc took over the assets, equipment, and properties of the New Look and continued the business.  All petitioners were allowed to continue working w the new company until Apr 15, 1995, when Trinidad Ong informed them that the building wherein the New Look was located had been sold and that their services were no longer needed.  Apr 28 1995 – petitioners filed with the Arbitration Branch of NLRC: o A complaint of illegal dismissal, illegal deduction, separation pay, non-payment of 13month pay, salary differentials o Only Patricia Nas asked for payment of salary differentials as she alleged that she was paid a daily wage of P25.00 throughout her period of employment o Petitioners also sought the refund of the P1.00 that the respondent company collected from each of them daily as salary of the sweeper of the barber shop  Lao Enteng Company Inc in its position paper: o Petitioners were joint ventures of the company and were receiving 50% commission of the amount charged to customers, thus, there was no employer-employee relationship o Assuming there was EE relationship, still petitioners are not entitled to separation pay because the cessation of operations of the barber shop was due to serious business losses.  Trinidad Lao Ong in her affidavit dtd Sept 06 1995: o After the death of Lao Enteng, (siguro si Vicente Lao ito? Hindi kasi inindicate sa kaso tapos may grammatical error pa) petitioners were verbally informed time and again that the partnership may fold up anytime because nobody in the family had the time to be at the barber shop to look after their interest o Eventually, they were forced to close the barber shop because they continued to lose money while petitioners earned from it. o Trinidad avers that without any employee-employer relationship petitioner’s claim for 13th month pay and separation pay have no basis in fact and in law.  Labor Arbiter Potenciano S. Caizares, Jr. dtd Sept 28 1995 ORDERED THE DISMISSAL OF THE COMPLAINT on the basis of his findings that the complainants and the respondents were engaged in a joint venture and that there existed no employer-employee relation between them. Also found that the barber shop was closed due to serious business losses or financial

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reverses and consequently declared that the law does not compel the establishment to pay separation pay to whoever were its employees. NLRC affirmed the Labor Arbiter decision Petitioners filed the instant petition assigning that the NLRC committed grave abuse of discretion in: o Arbitrarily disregarding substantial evidence proving that petitioners were employees of respondent company in ruling that petitioners were independent contractors. o Not holding that petitioners were illegally dismissed and in not awarding their money claims Petitioners’ contentions: o Public respondent NLRC gravely erred in declaring that petitioners were independent contractors o They did not cut hair, manicure, and do their work in their own manner and method. They insist they were not free from the control and direction of private respondents in all matters, and their services were engaged by the respondent company to attend to its customers in its barber shop. o Petitioners also stated that, individually or collectively, they do not have substantial capital nor investments in tools, equipment, work premises and other materials necessary in the conduct of the barber shop. What the barbers owned were merely combs, scissors, and razors, while the manicurists owned only nail cutters, nail polishes, nippers and cuticle removers. o Petitioners fault the NLRC for arbitrarily disregarding substantial evidence on record showing that petitioners Pedro Tolentino, Manuel Caparas, Simplicio Pedelos, and Patricia Nas were registered with the Social Security System as regular employees of the respondent company. ISSUE: WON an employer-employee relationship (EER) existed between petitioners and Lao Enteng Co Inc HELD: (Explanation first) o The ff elements must be present for EER to exist:  the selection and engagement of the workers  power of dismissal  the payment of wages by whatever means  the power to control the worker’s conduct, with the latter assuming primacy in the overall consideration o In the ff facts, clearly, the first three elements exist in petitioners’ and private respondent’s working arrangements:  that the late Vicente Lao engaged the services of the petitioners to work as barbers and manicurists in the New Look Barber Shop  that in January 1982, his children organized a corporation which they registered with the Securities and Exchange Commission as Lao Enteng Company, Inc. and that upon its incorporation, it took over the assets, equipment, and properties of the New Look Barber Shop and continued the business  that the respondent company retained the services of all the petitioners and continuously paid their wages o As per THE POWER TO CONTROL, it refers to the existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield that power. o The ff facts indubitably reveal that respondent company wielded control over the work performance of petitioners:  they worked in the barber shop owned and operated by the respondents  they were required to report daily and observe definite hours of work

they were not free to accept other employment elsewhere but devoted their full time working in the New Look Barber Shop for all the 15 years they have worked until April 15, 1995  that some have worked with respondents as early as in the 1960’s  that petitioner Patricia Nas was instructed by the respondents to watch the other six (6) petitioners in their daily task Certainly, respondent company was clothed with the power to dismiss any or all of them for just and valid cause. Petitioners were unarguably performing work necessary and desirable in the business of the respondent company. Private respondent showed no proof to their claim that petitioners were the ones who solely paid all SSS contributions. It is unlikely that respondents would report certain persons as their workers, pay their SSS premium as well as their wages if it were not true that they were indeed their employees. (Ruling) We hold that THE SEVEN PETITIONERS ARE EMPLOYEES OF THE PRIVATE RESPONDENT COMPANY.  they are to be accorded the benefits provided under the Labor Code, specifically Article 283 which mandates the grant of separation pay in case of closure or cessation of employer’s business which is equivalent to 1 month pay for every year of service.  the separation pay due them may be computed on the basis of the minimum wage prevailing at the time their services were terminated by the respondent company.  The Revised Guidelines on the Implementation of the 13th Month Pay Law states that “all rank and file employees are now entitled to a 13th month pay regardless of the amount of basic salary that they receive in a month. Such employees are entitled to the benefit regardless of their designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one (1) month during a calendar year” and so all the seven (7) petitioners who were not paid their 13th month pay must be paid accordingly. PETITION IS GRANTED. NLRC decision is set aside. Private respondents are hereby ordered to pay, severally and jointly, the seven (7) petitioners their (1) 13th month pay and (2) separation pay equivalent to one month pay for every year of service, to be computed at the then prevailing minimum wage at the time of their actual termination which was April 15, 1995. 

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VILLAMARIA V CA PETITIONER:

Oscar Villamaria, Jr.

RESPONDENT: CA and Jerry Bustamante DOCKET NO.: G.R. No. 165881 DATE: Apr 19 2006 PONENTE: Callejo, Sr., J. FACTS  Oscar Villamaria, Jr. – owner of Villamaria Motors, sole proprietorship engaged in assembling passenger jeepneys with a public utility franchise to operate along Baclaran-Sucat road  1995 – Villamaria stopped assembling jeepneys, and retained only 9. 4 of which he operated by employing drivers on a boundary basis  One of the drivers – Bustamante. Drove PVU-660. Remitted P450/day as boundary and kept the residue as his daily earnings as compensation for driving the vehicle.  Aug 1997 – Villamaria VERBALLY agreed to sell the jeep to Bustamante under the BOUNDARYHULOG SCHEME.

Bustamante would remit to Villamaria P550/day for 4 years, after which he would become owner of jeep under Villamaria’s franchise o Bustamante would make a DP of P10,000 Aug 7, 1997 – Villamaria executed a contract “Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog” o Plate No. PVU-660 | Chassis No. EVER95-38168-C | Motor No. SL-26647 o If Bustamante failed to pay boundary-hulog for 3 days, Villamaria motors would hold on to the vehicle until Bustamante paid his arrears, inc. P50 penalty a day o Failure to remit the daily boundary-hulog for 1 week, the Kasunduan would cease to have legal effect, and Bustamante would have to return the vehicle to Villamaria Motors o Bustamante was authorized to operate the vehicle to transport passengers only and not for other purposes o Also required to display an ID in front of the windshield of the vehicle – failure would charge him any fine that may be imposed by the govt o Bustamante further obliged himself to pay the cost of replacing parts that would be lost or damaged due to his negligence o Not allowed to wear slippers, short pants, or undershirts while driving o Also obliged to notify VM in case the jeep was leased for 2 days or more o Also obliged to pay for the annual registration fees of the jeep, and the premium for the jeep’s comprehensive insurance 1999 – Bustamante and other drivers in the same scheme with VM failed to pay their boundary-hulog  Prompted Villamaria to serve a Paalala July 24 2004 – Villamaria took back the jeep of Bustamante and barred the latter from driving the vehicle Aug 15 2000 – Bustamante filed a complaint for illegal dismissal against Villamaria and his wife, Teresita. Under his position paper: o In July 2000 – he informed the VM that the surplus engine of the jeep needed to be replaced. However, he was later arrested and driver’s license confiscated because apparently, the replacement engine was taken from a stolen vehicle. o Jeep was not impounded and the VM took the jeep from him on Jul 24 2000 and was no longer allowed to drive the vehicle since unless he pd them P70,000 o In his prayer: 1. Reinstatement to his former position w/o loss of seniority rights and execute a Deed of Sale in favour of the complainant (PVU-660) 2. Backwages P400/day and other benefits computed from Jul 24 2000 up to the time of his actual reinstatement 3. Ordering respondents to return the amount of P10,000 and P180,000 for the expenses incurred by the complainant in the repair and maintenance of the jeep 4. Respondents to refund the amount of P100/day counted from Aug 7 1997 to June 2000 or a total of P91,200 5. Moral and exemplary damages not less than P200,000 6. Atty’s fees not less than 10% of the monetary award Villamaria’s position paper: o Bustamante failed to pay the P10,000 dp and the vehicle’s annual reg fees o Bustamante stopped making his remittances despite his daily trips and even brought the jeepney to the province w/o permission o The jeep figured in an accident and its license plate was confiscated o Bustamante abandoned the vehicle in a gas station in Sucat, Parañaque for 2 weeks. Teresita retrieved the vehicle from the gas stn, he tires were worn, the alternator was gone, and the battery was no longer working o Bustamante was not illegally dismissed because the Kasunduan transformed the EE R into that of a vendor-vendee o

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Bustamante’s Reply: The Kasunduan was presented to him and the other drivers on a blank piece of paper where they were mde to affix their signatures purporting to be an attendance sheet.  Mar 15 2002 – the LA decided in favour of the Villamaria spouses. ORDERED THE COMPLAINT BE DISMISSED.  Bustamante appealed to the NLRC insisting that the Kasunduan did not extinguish the EE R b/w him and Villamaria. NLRC: DISMISSED THE APPEAL FOR LACK OF MERIT. Vendor-vendee relationship not EE R. Bustamante filed an MR, NLRC also denied on May 30 2003   Elevated to CA thru petition for certiorari. CA: REVERSED AND SET ASIDE NLRC DECISION. Decided in favour of Bustamante. o Under the Kasunduan, the relationship b/w petitioner and respondent was dual: EE R and vendor-vendee  Villamaria filed an MR and CA denied in its Reso dtd Nov 2 2004  Villamaria sought relief from the SC by filing petition for review on Certiorari alleging that the CA committed grave abuse of its discretion amounting to excess or lack of jurisdiction in reversing the decision of the Labor Arbiter and the NLRC  ISSUE: WON an EE R exists between petitioner and respondent  HELD: o The SC agrees with the ruling of the CA that, under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of the parties extant before the execution of said deed. o The daily remittances had a dual purpose: that of petitioner’s boundary and respondent’s partial payment (hulog) for the vehicle. This dual purpose was expressly stated in the Kasunduan. The well-settled rule is that an obligation is not novated by an instrument that expressly recognizes the old one, changes only the terms of payment, and adds other obligations not incompatible with the old provisions or where the new contract merely supplements the previous one. The two obligations of the respondent to remit to petitioner the boundary-hulog can stand together. o Ang mga patakaran, kaugnay ng bilihang ito sa pamamagitan ng boundary hulog ay ang mga sumusunod: 1. Pangangalagaan at pag-iingatan ng TAUHAN NG IKALAWANG PANIG ang sasakyan ipinagkatiwala sa kanya ng TAUHAN NG UNANG PANIG. 2. Na ang sasakyan nabanggit ay gagamitin lamang ng TAUHAN NG IKALAWANG PANIG sa paghahanapbuhay bilang pampasada o pangangalakal sa malinis at maayos na pamamaraan. 3. Na ang sasakyan nabanggit ay hindi gagamitin ng TAUHAN NG IKALAWANG PANIG sa mga bagay na makapagdudulot ng kahihiyan, kasiraan o pananagutan sa TAUHAN NG UNANG PANIG. 4. Na hindi ito mamanehohin ng hindi awtorisado ng opisina ng UNANG PANIG. 5. Na ang TAUHAN NG IKALAWANG PANIG ay kinakailangang maglagay ng ID Card sa harap ng windshield upang sa pamamagitan nito ay madaliang malaman kung ang nagmamaneho ay awtorisado ng VILLAMARIA MOTORS o hindi. 6. Na sasagutin ng TAUHAN NG IKALAWANG PANIG ang [halaga ng] multa kung sakaling mahuli ang sasakyang ito na hindi nakakabit ang ID card sa wastong lugar o anuman kasalanan o kapabayaan. 7. Na sasagutin din ng TAUHAN NG IKALAWANG PANIG ang materyales o piyesa na papalitan ng nasira o nawala ito dahil sa kanyang kapabayaan. 8. Kailangan sa VILLAMARIA MOTORS pa rin ang garahe habang hinuhulugan pa rin ng TAUHAN NG IKALAWANG PANIG ang nasabing sasakyan. 9. Na kung magkaroon ng mabigat na kasiraan ang sasakyang ipinagkaloob ng TAUHAN NG UNANG PANIG, ang TAUHAN NG IKALAWANG PANIG ay obligadong

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itawag ito muna sa VILLAMARIA MOTORS bago ipagawa sa alin mang Motor Shop na awtorisado ng VILLAMARIA MOTORS. 10.Na hindi pahihintulutan ng TAUHAN NG IKALAWANG PANIG sa panahon ng pamamasada na ang nagmamaneho ay naka-tsinelas, naka short pants at nakasando lamang. Dapat ang nagmamaneho ay laging nasa maayos ang kasuotan upang igalang ng mga pasahero. 11.11. Na ang TAUHAN NG IKALAWANG PANIG o ang awtorisado niyang driver ay magpapakita ng magandang asal sa mga pasaheros at hindi dapat magsasalita ng masama kung sakali man may pasaherong pilosopo upang maiwasan ang anumang kaguluhan na maaaring kasangkutan. 12.Na kung sakaling hindi makapagbigay ng BOUNDARY HULOG ang TAUHAN NG IKALAWANG PANIG sa loob ng tatlong (3) araw ay ang opisina ng VILLAMARIA MOTORS ang may karapatang mangasiwa ng nasabing sasakyan hanggang matugunan ang lahat ng responsibilidad. Ang halagang dapat bayaran sa opisina ay may karagdagang multa ng P50.00 sa araw-araw na ito ay nasa pangangasiwa ng VILLAMARIA MOTORS. 13.Na kung ang TAUHAN NG IKALAWANG PANIG ay hindi makapagbigay ng BOUNDARY HULOG sa loob ng isang linggo ay nangangahulugan na ang kasunduang ito ay wala ng bisa at kusang ibabalik ng TAUHAN NG IKALAWANG PANIG ang nasabing sasakyan sa TAUHAN NG UNANG PANIG. 14.Sasagutin ng TAUHAN NG IKALAWANG PANIG ang bayad sa rehistro, comprehensive insurance taon-taon at kahit anong uri ng aksidente habang ito ay hinuhulugan pa sa TAUHAN NG UNANG PANIG. 15.Na ang TAUHAN NG IKALAWANG PANIG ay obligadong dumalo sa pangkalahatang pagpupulong ng VILLAMARIA MOTORS sa tuwing tatawag ang mga tagapangasiwa nito upang maipaabot ang anumang mungkahi sa ikasusulong ng samahan. 16.Na ang TAUHAN NG IKALAWANG PANIG ay makikiisa sa lahat ng mga patakaran na magkakaroon ng pagbabago o karagdagan sa mga darating na panahon at hindi magiging hadlang sa lahat ng mga balakin ng VILLAMARIA MOTORS sa lalo pang ipagtatagumpay at ikakatibay ng Samahan. 17.Na ang TAUHAN NG IKALAWANG PANIG ay hindi magiging buwaya sa pasahero upang hindi kainisan ng kapwa driver at maiwasan ang pagkakasangkot sa anumang gulo. 18.Ang nasabing sasakyan ay hindi kalilimutang siyasatin ang kalagayan lalo na sa umaga bago pumasada, at sa hapon o gabi naman ay sisikapin mapanatili ang kalinisan nito. 19.Na kung sakaling ang nasabing sasakyan ay maaarkila at aabutin ng dalawa o higit pang araw sa lalawigan ay dapat lamang na ipagbigay alam muna ito sa VILLAMARIA MOTORS upang maiwasan ang mga anumang suliranin. 20.Na ang TAUHAN NG IKALAWANG PANIG ay iiwasan ang pakikipag-unahan sa kaninumang sasakyan upang maiwasan ang aksidente. 21.Na kung ang TAUHAN NG IKALAWANG PANIG ay mayroon sasabihin sa VILLAMARIA MOTORS mabuti man or masama ay iparating agad ito sa kinauukulan at iwasan na iparating ito kung [kani-kanino] lamang upang maiwasan ang anumang usapin. Magsadya agad sa opisina ng VILLAMARIA MOTORS. 22.Ang mga nasasaad sa KASUNDUAN ito ay buong galang at puso kong sinasangayunan at buong sikap na pangangalagaan ng TAUHAN NG IKALAWANG PANIG ang nasabing sasakyan at gagamitin lamang ito sa paghahanapbuhay at wala nang iba pa. Petitioners claim that he opted not to terminate the employment of respondent because of magnanimity is negated by his (petitioners) own evidence that he took the jeepney from the respondent only on July 24, 2000.

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IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The decision of the Court of Appeals in CA-G.R. SP No. 78720 is AFFIRMED

FRANCISCO v NLRC Petitioner: Angelina Francisco Respondents: NLRC, KASEI CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO ACEDO, DELFIN LIZA, IRENE BALLESTEROS, TRINIDAD LIZA And RAMON ESCUETA Citation: GR No. 170087 Date of Promulgation: August 31, 2006 Ponente: Ynares-Santiago FACTS:  Angelina Francisco: hired by Kaeri Corporation during its incorporation stage as an Accountant and Corporate Secretary. She was assigned to handle all the accounting needs of the company, and was also designated as Liaison Officer in its office in Makati, to secure business permits, construction benefits and other licenses for the initial operation of the company  Although she was designated as Corporate Secretary, she was not entrusted with the corporate documents; neither did she attend any board meeting nor required to do so. She never prepared any legal document and never represented the company as its Corporate Secretary. However, on some occasions, she was prevailed upon to sign documentation for the company. 

In 1996, petitioner was designated Acting Manager. The corporation also hired Gerry Nino as accountant in lieu of petitioner. As Acting Manager, petitioner was assigned to handle recruitment of all employees and perform management administration functions; represent the company in all dealings with government agencies, especially with the Bureau of Internal Revenue (BIR), Social Security System (SSS) and in the city government of Makati; and to administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei Corporation.

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For five years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation. 8

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In January 2001, petitioner was replaced by Liza R. Fuentes as Manager. Petitioner alleged that she was required to sign a prepared resolution for her replacement but she was assured that she would still beconnected with Kasei Corporation. Timoteo Acedo, the designated Treasurer, convened a meeting of all employees of Kasei Corporation and announced that nothing had changed and that petitioner was still connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters.

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Thereafter, Kasei Corporation reduced her salary by P2,500.00 a month beginning January up to September 2001 for a total reduction of P22,500.00 as of September 2001. Petitioner was not paid her mid-year bonus allegedly because the company was not earning well. On October 2001, petitioner did not receive her salary from the company. She made repeated

follow-ups with the company cashier but she was advised that the company was not earning well. 10 

On October 15, 2001, petitioner asked for her salary from Acedo and the rest of the officers but she was informed that she is no longer connected with the company. 11

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Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter.

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Respondents contends that: 1) petitioner is not their employee; 2) As technical consultant, petitioner performed her work at her own discretion without control and supervision of Kasei Corporation; 3) Petitioner had no daily time record and she came to the office any time she wanted; 4) The company never interfered with her work except that from time to time, the management would ask her opinion on matters relating to her profession; 5) The money received by petitioner from the corporation was her professional fee subject to the 10% expanded withholding tax on professionals, and that she was not one of those reported to the BIR or SSS as one of the company’s employees; 6) Petitioner’s designation as technical consultant depended solely upon the will of management. As such, her consultancy may be terminated any time considering that her services were only temporary in nature and dependent on the needs of the corporation

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LA: illegally dismissed NLRC: affirmed LA’s decision with Modifications CA: reversed NLRC’s decision

ISSUES: W/N there was an employer-employee relationship between petitioner and private respondent Kasei Corporation HELD: Yes. The court held that in this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic conditions prevailing between the parties, in addition to the standard of right-of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of an employer-employee relationship based on an analysis of the totality of economic circumstances of the worker. Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the employer’s business; (2) the extent of the worker’s

investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business. By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporation’s Technical Consultant. It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latter’s line of business. There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation. She was selected and engaged by the company for compensation, and is economically dependent upon respondent for her continued employment in that line of business. Her main job function involved accounting and tax services rendered to Respondent Corporation on a regular basis over an indefinite period of engagement. Respondent Corporation hired and engaged petitioner for compensation, with the power to dismiss her for cause. More importantly, Respondent Corporation had the power to control petitioner with the means and methods by which the work is to be accomplished. JARDIN vs NLRC Petitioners: ANGEL JARDIN, DEMETRIO CALAGOS, URBANO MARCOS, ROSENDO MARCOS, LUIS DE LOS ANGELES, JOEL ORDENIZA and AMADO CENTENO Respondents: NATIONAL LABOR RELATIONS COMMISSION (NLRC) and GOODMAN TAXI (PHILJAMA INTERNATIONAL, INC.) Citation: GR No. 119268 Date of Promulgation: Feb. 23, 2000 Ponente: QUISUMBING, J. FACTS: Petitioners were drivers of Respondent (Philjama International Inc.) a domestic corporation engaged in the operation of “Goodman Taxi” under a boundary system. Believing that the deduction for the washing of taxi units in their daily earnings is illegal, Petitioners decided to form a labor union to protect their rights and interests. Upon learning about the plan of Petitioners, Respondent refused to let them drive their taxicabs when they reported for work, and on succeeding days. Aggrieved, Petitioners filed with the labor arbiter a complaint against Respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees. In a decision, the labor arbiter dismissed said complaint for lack of merit. On appeal, the NLRC reversed and set aside the judgment of the labor arbiter declaring that Petitioners are employees of Respondent, and, as such, their dismissal must be for just cause and after due process. Respondent’s first motion for reconsideration having been denied, another motion was filed and was granted by the NLRC, ruling that the relationship of the parties is not that of an employeremployee but that of leasehold and thus covered by the Civil Code rather than the Labor Code. NLRC denied Petitioner’s reconsideration, hence the instant petition. ISSUE: Whether or not there exists an employer-employee relationship between petitioner and private respondent.

HELD: YES. On the issue of whether or not employer-employee relationship exists, admitted is the fact that complainants are taxi drivers purely on the "boundary system". Under this system the driver takes out his unit and pays the owner/operator a fee commonly called "boundary" for the use of the unit. Now, in the determination the existence of employer-employee relationship, the Supreme Court in the case of Sara, et al., vs. Agarrado, et al. (G.R. No. 73199, 26 October 1988) has applied the following four-fold test: "(1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control the employees conduct." "Among the four (4) requisites", the Supreme Court stresses that "control is deemed the most important that the other requisites may even be disregarded". Under the control test, an employer-employee relationship exists if the "employer" has reserved the right to control the "employee" not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. Otherwise, no such relationship exists. Verily, all the foregoing attributes signify that the relationship of the parties is more of a leasehold or one that is covered by a charter agreement under the Civil Code rather than the Labor Code. However, in a number of cases decided by this Court, we ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. We explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the business is in the owner's hands. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. We have applied by analogy the abovestated doctrine to the relationships between bus owner/operator and bus conductor, auto-calesa owner/operator and driver and recently between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of their employer. As consistently held by this Court, termination of employment must be effected in accordance with law. The just and authorized causes for termination of employment are enumerated under Articles 282, 283 and 284 of the Labor Code. The requirement of notice and hearing is set-out in Article 277 (b) of the said Code. Hence, petitioners, being employees of private respondent, can be dismissed only for just and authorized cause, and after affording them notice and hearing prior to termination. In the instant case, private respondent had no valid cause to terminate the employment of petitioners. Neither were there two (2) written notices sent by private respondent informing each of the petitioners that they had been dismissed from work. These lacks of valid cause and failure on the part of private respondent to comply with the twin-notice requirement underscored the illegality surrounding petitioners' dismissal.

Under the law, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. With regard to the amount deducted daily by private respondent from petitioners for washing of the taxi units, we view the same as not illegal in the context of the law. We note that after a tour of duty, it is incumbent upon the driver to restore the unit he has driven to the same clean condition when he took it out. Car washing after a tour of duty is indeed a practice in the taxi industry and is in fact dictated by fair play. Hence, the drivers are not entitled to reimbursement of washing charges. WHEREFORE, the instant petition is GRANTED. The assailed DECISION of public respondent dated October 28, 1994, is hereby SET ASIDE. The DECISION of public respondent dated April 28, 1994, and its RESOLUTION dated December 13, 1994, are hereby REINSTATED subject to MODIFICATION. Private respondent is directed to reinstate petitioners to their positions held at the time of the complained dismissal. Private respondent is likewise ordered to pay petitioners their full backwages, to be computed from the date of dismissal until their actual reinstatement. However, the order of public respondent that petitioners be reimbursed the amount paid as washing charges is deleted. MARTINEZ vs. NLRC Petitioners: NELLY ACTA MARTINEZ Respondents: NATIONAL LABOR RELATIONS COMMISSION, DOMINADOR CORRO, PASTOR CORRO, CELESTINO CORRO, LUIS CORRO, EREBERTO CORRO, JAIME CRUZ, WENCESLAO DELVO, GREGORIO DELVO, HERMEJIAS COLIBAO, JOSE OGANA and ALONSO ALBAO Citation: GR No. 11745 Date of Promulgation: May 29, 1997 Ponente: BELLOSILLO, J. FACTS: RAUL MARTINEZ was operator of two (2) taxicab units under the business name PAMA TX and two (2) additional units under the name P. J. TIGER TX. Private respondents Dominador Corro, Pastor Corro, Celestino Corro, Luis Corro, Ereberto Corro, Jaime Cruz, Wenceslao Delvo, Gregorio Delvo, Hermejias Colibao, Jose Ogana and Alonso Albao worked for him as drivers. On 18 March 1992 Raul Martinez died leaving behind his mother, petitioner Nelly Acta Martinez, as his sole heir. On 14 July 1992 private respondents lodged a complaint against Raul Martinez and petitioner Nelly Acta Martinez before the Labor Arbiter for violation of P. D. 851 and illegal dismissal. They alleged that they have been regular drivers of Raul Martinez since 20 October 1989 earning no less than P400.00 per day driving twenty-four (24) hours every other day.For the duration of employment, not once did they receive a 13th month pay. After the death of Raul Martinez, petitioner took over the management and operation of the business. On or about 22 June 1992 she informed them that because of difficulty in maintaining the business, she was selling the units together with the corresponding franchises. However, petitioner did not proceed with her plan; instead, she assigned the units to other drivers.

Petitioner traversed the claim for 13th month pay by contending that it was personal and therefore did not survive the death of her son. Besides, private respondents were not entitled thereto as Sec. 3, par. (e), of the Rules and Regulations Implementing P. D. 851 is explicit that employers of those who are paid on purely boundary basis are not covered therein. The relationship between her son and private respondents was not that of employer-employee but of lessor-lessee. The operation of the business ceased upon the death of her son and that she did not continue the business because she did not know how to run it. On 30 August 1993 the Labor Arbiter dismissed the complaint on the following grounds: (a) private respondents' claims being personal were extinguished upon the death of Raul Martinez; (b) petitioner was a mere housewife who did not possess the required competence to manage the business; and, (c) private respondents were not entitled to 13th month pay because the existence of employer-employee relationship was doubtful on account of the boundary system adopted by the parties. However, respondent National Labor Relations Commission viewed the case differently. According to NLRC, (a) private respondents were regular drivers because payment of wages, which is one of the essential requisites for the existence of employment relation, may either be fixed, on commission, boundary, piece-rate or task basis; (b) the management of the business passed on to petitioner who even replaced private respondents with a new set of drivers; and, (c) the claims of private respondents survived the death of Raul Martinez considering that the business did not cease operation outright but continued presumably, in the absence of proof of sale, up to the moment. As regards the claim for 13th month pay, NLRC upheld the stand of petitioner based on the express provision of P. D. 851 as reiterated in the revised guidelines on the implementation thereof. On 28 January 1994 respondent NLRC thus set aside the appealed decision, and as alternative to reinstatement, ordered petitioner to grant respondents separation pay equivalent to one (1) month salary for every year of service a fraction of six (6) months being considered as one (1) whole year. On 30 September 1994 the motion for reconsideration was denied. Hence, this recourse of petitioner.

ISSUES: 1. Whether or not there exists an employer-employee relationship between drivers and the deceased Raul Martinez. 2. Whether or not there exists an employer-employee relationship between petitioner Nelly Acta Martinez and the respondents? HELD: 1. YES. As early as 3 March 1956, in National Labor Union v. Dinglasan, this Court ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. Therein we explained that in the lease of chattels the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. The doctrine is applicable by analogy to the present case. Thus, private respondents were employees of Raul Martinez because they had been engaged to perform activities which were usually necessary or desirable in the usual business or trade of the employer 2. NO. The above findings, however, were culled from mere allegations in private respondents' position paper. But mere allegation is not evidence. It is a basic rule in evidence that each party must prove his affirmative allegation. In Opulencia Ice Plant and Storage v. NLRC we ruled that

no particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant evidence to prove the relationship may be admitted. In that case, the relationship was sufficiently proved by testimonial evidence. In the present case, however, private respondents simply assumed the continuance of an employer-employee relationship between them and petitioner, when she took over the operation of the business after the death of her son Raul Martinez, without any supporting evidence. Consequently, we cannot sustain for lack of basis the factual finding of respondent NLRC on the existence of employer-employee relationship between petitioner and private respondents. Clearly, such finding emanates from grave abuse of discretion. With this conclusion, consideration of the issue on illegal dismissal becomes futile and irrelevant. WHEREFORE, the petition is GRANTED. The Decision of respondent National Labor Relations Commission dated 28 January 1994 ordering petitioner Nelly Acta Martinez to grant respondents separation pay as well as its Order of 30 September 1994 denying reconsideration is SET ASIDE. The Decision of the Labor Arbiter dated 30 August 1993 dismissing the complaint is REINSTATED. The temporary restraining order issued on 11 October 1995 is made PERMANENT. CALAMBA MEDICAL vs. NLRC Petitioners: CALAMBA MEDICAL CENTER, INC. Respondents: NATIONAL LABOR RELATIONS COMMISSION, RONALDO LANZANAS AND MERCEDITHA*LANZANAS Citation: GR No. 176484 Date of Promulgation: Nov. 25, 2008 Ponente: CARPIO MORALES, J. FACTS: Ronaldo Lanzanas and Merceditha Lanzanas are doctors employed by Calamba Medical Center, Inc. They are given a retainer’s fee by the hospital as well as shares from fees obtained from patients. One time, Ronaldo was overheard by Dr. Trinidad talking to another doctor about how low the admission rate to the hospital is. That conversation was reported to Dr. Desipeda who was then the Medical Director of the hospital. Eventually Ronaldo was suspended. Ronaldo filed a case for Illegal Suspension in March 1998. In the same month, the rank and file employees organized a strike against the hospital for unfair labor practices. Desipeda eventually fired Ronaldo for his alleged participation in the strike, which is not allowed under the Labor Code for he is a managerial employee. Desipeda also fired Merceditha on the ground that she is the wife of Ronaldo who naturally sympathizes with him. The Labor Arbiter ruled that there was no Illegal Suspension for there was no employeremployee relationship because the hospital has no control over Ronaldo as he is a doctor who even gets shares from the hospitals earnings. The National Labor Relations Commission as well as the Court of Appeals reversed the LA. ISSUE: Whether or not there is an employer-employee relationship?

HELD: Yes. Under the control test, an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. There is control in this case because of the fact that Desipeda schedules the hours of work for Ronaldo and his wife. The doctors are also registered by the hospital under the SSS which is premised on an employeremployee relationship. There is Illegal Dismissal committed against Rolando for there was no notice and hearing held. It was never shown that Rolando joined the strike. But even if he did, he has the right to do so for he is not a part of the managerial or supervisory employees. As a doctor, their decisions are still subject to revocation or revision by Desipeda. There is Illegal Dismissal committed against Merceditha for the ground therefor was not mentioned in Article 282 of the Labor Code. NOTE: When is Control (One of the Four Tests of Employer-Employee Relationship) Absent? Where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, the element of control is absent. SIP FOOD HOUSE vs. NLRC Petitioners: S.I.P. FOOD HOUSE and MR. and MRS. ALEJANDRO PABLO Respondents: RESTITUTO BATOLINA, ALMER CALUMPISAN, ARIES MALGAPO, ARMANDO MALGAPO, FLORDELIZA MATIAS, PERCIVAL MATIAS, ARWIN MIRANDA, LOPE MATIAS, RAMIL MATIAS, ALLAN STA. INES, Citation: GR No. 192473 Date of Promulgation: October 11, 2010 Ponente: BRION, J. FACTS: The GSIS Multi-Purpose Cooperative (GMPC) is an entity organized by the employees of the Government Service Insurance System (GSIS). Incidental to its purpose, GMPC wanted to operate a canteen in the new GSIS Building, but had no capability and expertise in this area. Thus, it engaged the services of the petitioner S.I.P. Food House (SIP), owned by the spouses Alejandro and Esther Pablo, as concessionaire. The respondents Restituto Batolina and nine (9) others (the respondents) worked as waiters and waitresses in the canteen. In February 2004, GMPC terminated SIPs contract as GMPC concessionaire, because of GMPCs decision to take direct investment in and management of the GMPC canteen; SIPs continued refusal to heed GMPCs directives for service improvement; and the alleged interference of the Pablos two sons with the operation of the canteen. [5] The termination of the concession contract caused the termination of the respondents employment, prompting them to file a complaint for illegal dismissal, with money claims, against SIP and the spouses Pablo.

The respondents alleged before the labor arbiter that they were SIP employees, who were illegally dismissed sometime in February and March 2004. SIP did not implement Wage Order Nos. 5 to 11 for the years 1997 to 2004. They did not receive overtime pay although they worked from 6:30 in the morning until 5:30 in the afternoon, or other employee benefits such as service incentive leave, and maternity benefit (for their co-employee Flordeliza Matias). Their employee contributions were also not remitted to the Social Security System.

To avoid liability, SIP argued that it operated the canteen in behalf of GMPC since it had no authority by itself to do so. The respondents were not its employees, but GMPCs, as shown by their identification cards. It claimed that GMPC terminated its concession and prevented it from having access to the canteen premises as GSIS personnel locked the place; GMPC then operated the canteen on its own, absorbing the respondents for the purpose and assigning them to the same positions they held with SIP. It maintained that the respondents were not dismissed, but were merely prevented by GMPC from performing their functions. For this reason, SIP posited that the legal obligations that would arise under the circumstances have to be shouldered by GMPC.

ISSUE: Whether or not there is an employer-employee relationship between the Petitioner SIP and Respondents HELD: YES. In its Decision promulgated on November 27, 2009, the CA granted the petition in part. While it affirmed the award, it found merit in SIPs objection to the NLRC computation and assumption that a month had twenty-six (26) working days, instead of twenty (20) working days. The CA recognized that in a government agency such as the GSIS, there are only 20 official business days in a month. It noted that the respondents presented no evidence that the employees worked even outside official business days and hours. It accordingly remanded the case for a recomputation of the award. Finding substantial evidence in the records supporting the NLRC conclusions, the CA brushed aside SIPs argument that it could not have been the employer of the respondents because it was a mere labor-only contractor of GMPC. It sustained the NLRCs findings that SIP was the respondents employer.

That complainants were employees of respondents is further bolstered by the fact that respondents do not deny that they were the ones who paid complainants salary. When complainants charged them of underpayment, respondents even interposed the defense of file (sic) board and lodging given to complainants. The CA ruled out SIPs claim that it was a labor-only contractor or a mere agent of GMPC. We agree with the CA; SIP and its proprietors could not be considered as mere agents of GMPC because they exercised the essential elements of an employment relationship with the respondents such as hiring, payment of wages and the power of control, not to mention that SIP operated the canteen on its own account as it paid a fee for the use of the building and for the privilege of running the canteen. The fact that the respondents applied with GMPC in February 2004 when it terminated its contract with SIP, is another clear indication that the two entities were separate and distinct from each other.

WHEREFORE, premises considered, we hereby DISMISS the petition for lack of merit. The assailed decision and resolution of the Court of Appeals in CA-G.R. SP No. 101651, are AFFIRMED.

LETRAN CALAMBA v. NLRC COMPLAINANT: Letran Calamba Faculty and Employees Association RESPONDENT: NLRC and Colegio De San Juan De Letran Calamba CITATION: G.R. No. 156225 DATE OF PROMULGATION: January 29, 2008 PONENTE: J. Austria-Martinez FACTS:  

Petition for Review on Certiorari under Rule 45 of ROC October 8, 1992 – Complainant/Petitioner filed with Regional Arbitration of NLRC a Complaint against Colegio De San Juan De Letran Calamba for collection of various claims due its members. They alleged that: 1. Respondent did not include in the computation of the thirteenth month pay of its academic personnel their compensation for overloads. 2. Respondent has not paid the wage increases required by Wage Order No. 5 to its employees. 3. Respondent has not followed the formula prescribed by DECS Memorandum Circular No.2 dated March 10, 1989 in the computation of the compensation per unit of excess load or overload of faculty members. 4. Respondent has not given the salary increases due the non-academic personnel as a result of job grading. 5. Respondent has not paid to its employees the balances of seventy (70%) percent of the tuition fee increases for the years 1990, 1991, and 1992. 6. Respondent has not also paid its employees the holiday pay for the ten (10) regular holidays as provided for in the Article 94 of the Labor Code.

 

Petitioner filed a separate complaint against the respondent for money claims with the Regional Office of DOLE. Respondent filed with Regional Arbitration of NLRC a petition to declare illegal the strike staged by petitioner in January 1994.

LABOR ARBITER RULING: (September 28, 1998)  

The money claims filed in DOLE and NLRC by the petitioners were dismissed for lack of merit. The petition to declare strike illegal was dismissed; the officers of the Union were reprimanded.

NLRC RULING: (July 28, 1999) 

Dismissed both the appeals of petitioner and respondent.

CA RULING: (May 14, 2002) 

Dismissed the petition for special civil action for certiorari filed by petitioner

PETITIONERS’ ARGUMENTS: A. 1. Under the Revised Guidelines on the Implementation of the 13 th Month Pay Law, the basic pay of an employee includes remunerations or earnings paid by his employer for services rendered, and that excluded therefrom are the cash equivalents of unused vacation and sick leave credits, overtime, premium, night differential, holiday pay and cost- of-living allowances. 2. Since the pay for excess loads or overloads does not fall under any of the enumerated exclusions and considering that overloads are being performed within the normal working period of eight hours a day, it only follows that the overloads should be included in the computation of the faculty members’ 13th month pay. B. 1.DOLE-DECS-CHED-TESDA Order No. 02, Series of 1996 (DOLE Order), which was relied upon by the LA and the NLRC in their decisions, cannot be applied to the case because the DOLE Order was issued long after the commencement of petitioners’ complaints for monetary claims. 2. To give retroactive application to the DOLE Order issued in 1996 is to deprive workers of benefits which have become vested and is a clear violation of the constitutional mandate on protection of labor; and that, in any case, all doubts in the implementation and interpretation of labor laws, including implementing rules and regulations, should be resolved in favor of labor. C. Citing Agustilo v. CA, in a special civil action for certiorari brought before the CA, the appellate court can review the factual findings and the legal conclusions of the NLRC D. In concluding that the NLRC Decision was supported by substantial evidence, the CA failed to specify what constituted said evidence. RESPONDENT’S ARGUMENTS: A. The ruling in Agustilo is an exception rather than the general rule. It is not applicable to the present case because in the former case, the findings of fact of the LA and NLRC are at variance with each other; while in the present case, the findings of fact and conclusions of law of the LA and the NLRC are the same. B. DOLE Order is an administrative regulation which interprets the 13 th Month Pay Law (P.D. No. 851 and, as such, it is mandatory for the LA to apply the same to the present case. C. Legal Services Office of DOLE issued an opinion dated March 4, 1992, that remunerations for teaching in excess of the regular load, which includes overload pay for work performed within an eight-hour work day, may not be included as part of the basic salary in the computation of the 13 th month pay unless this has been included by the company practice or policy. D. Prior to the issuance of the DOLE Order, the prevailing rule is to exclude excess teaching load, which is akin to overtime, in the computation of a teacher’s basic salary and, ultimately, in the computation of his 13th month pay. ISSUE: 

Whether or not the petitioners are entitled to various monetary claims from respondent (General)  Whether or not overload pay is included as basis for determining a teacher’s 13 th month pay (Specific) SC RULING:  CA’s decision affirmed. Petition was denied. A. Wage Order No. 5 The school settled its obligations to its employees, conformably with the agreement reached during the management-employees meeting of June 26, 1985 with respect to the

B.

C.

D.

E.

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alleged non-payment of benefits under Wage Order No. 5. The samples from the payroll journal of the school shows that the school paid its employees benefits under Wage Order No. 5 beginning June 16, 1985. Salary Differentials The claim of the Union for salary differentials due to the improper computation of compensation per unit of excess load cannot hold water for the simple reason that during the school year there were no classes from June 1-14 and October 17-31. Since extra load should be paid only when actually performed by the employees, no salary differentials are due to the Union members. Job Grading The non-academic members of the Union cannot legally insist on wage increases due to Job Grading. The system of Job Grading was initiated by the school in school year 19891990. In 1992, a new Job Grading process was initiated by the School. Since the Job Grading exercises of the school were neither consistent nor for a considerable period of time, the monetary claims attendant to an increase job grade are non-existent. Share of Tuition Fee Increases The claim was belied by the evidence presented by the school that shows that in school year 1989-1990, the school incurred a deficit of Php 445,942.25, while in school years 1990-1991 and 1991-1992, the school paid out 91% and 77% respectively, of the increments in the tuition fees collected. Holiday Pay The individual pay records of the employees shows that they are paid for all days worked in a year. Stated differently, the factor used in computing the salaries of the employees is 365, which indicates that their regular monthly salary includes payment of wages during all legal holidays. Overload Pay to be included in the 13th Month Pay Overload pay should be excluded from the computation of the 13 th month pay. According to the DOLE Order, any teaching load in excess of the normal or regular teaching load shall be considered as overload, and its compensation should be considered as an overload honorarium if performed within the 8-hour work and does not form part of the regular or basic pay. Even if overload is performed within 8-hour working day, it is still an additional or extra teaching work which is performed after the regular teaching load has been completed. Hence, any pay given as compensation for such additional work should be considered as extra and not deemed as part of the regular or basic salary.

R.B. MICHAEL PRESS v. GALIT COMPLAINANT: R.B. Michael Press and Annalene Reyes Escobia RESPONDENT: Nicasio C. Galit CITATION: G.R. No. 153510 DATE OF PROMULGATION: February 13, 2008 PONENTE: J. Velasco Jr. FACTS:  May 1, 1997 – respondent was employed by petitioner R.B. Michael Press as an offset machine operator  During his employment, Galit was tardy 190 times, totaling to 6, 117 minutes, and was absent without leave for total of nine and a half days.  February 22, 1999 – respondent was ordered to render overtime service in ordr to comply with job order deadline, but he refused to do so.  February 23, 1999 – respondent went to work but Escobia told him not to work, and to return later in the afternoon for a hearing. When he returned, a copy of Office Memorandum was served upon him.

  

February 24, 1999 – respondent was terminated from employment. Respondent filed a complaint for illegal dismissal and money claims before the NLRC. Petitioners aver that Galit was dismissed due to (1) tardiness constituting neglect of duty; (2) serious misconduct; and (3) insubordination or willful disobedience.

LABOR ARBITER RULING: (October 29, 1999)  

Petitioner was ordered to reinstate respondent to his former position without loss of seniority rights and other benefits, and be paid his full back-wages computed from the time he was illegally dismissed up to the time of his actual reimbursement. Petitioners cannot use respondent’s habitual tardiness and unauthorized absences to justify his dismissal since they had already deducted the corresponding amounts from his salary. Since respondent was not subjected to any admonition or penalty for tardiness, petitioners then had condoned the offense or that the infraction is not serious enough to merit any penalty.

NLRC RULING: (April 28, 2000) 

Dismissed the appeal for lack of merit.

CA RULING: (November 14, 2001)  



Petition was dismissed for lack of merit. It was not the tardiness and absences committed by respondent, but his refusal to render overtime work on February 22, 1999 which caused the termination of his employment. The time frame in which respondent was afforded procedural due process is dubitable; he could not have been afforded ample opportunity to explain his side and to adduce evidence on his behalf. For respondent’s absences, deductions from his salary were made and hence to allow petitioners to use said absences as ground for dismissal would amount to double jeopardy.

ISSUE: 

Whether or not the dismissal of respondent from employment was valid and legal.

SC RULING: 



YES. The ruling of LA and CA that there is no evidence that Galit was reprimanded by petitioners, therefore they cannot draw on former’s habitual tardiness to dismiss him, are incorrect. The mere fact that the numerous infractions of respondent have not been immediately subjected to sanctions cannot be interpreted as condonation of the offenses or waiver of the company to enforce company rules. The management prerogative to discipline employees and impose punishment is a legal right which cannot, as a general rule, be impliedly waived. It is incumbent upon the employee to adduce substantial evidence to demonstrate condonation or waiver on the part of management to forego the exercise of its right to impose sanctions for breach of company rules. Respondent did not adduce any evidence to show waiver or condonation on the part of petitioners. In the case of Filipio v. The Honorable Minister Blas F. Ople, the Court, quoting then Labor Minister Ople, ruled that past infractions for which the employee has suffered the corresponding penalty for each violation cannot be used as a justification for the employee’s dismissal for that would penalize him twice for the same offense. In contrast, the petitioners in the case at bar did not impose any punishment for the numerous absences and tardiness of respondent. Thus, said infractions can be used collectively by petitioners as a ground for dismissal.

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The habitual absences as ground for dismissal wound not amount to double jeopardy. Respondent is a daily wage earner. For said daily paid workers, the principle of a days pay for a days work is squarely applicable. Hence it cannot be construed in any wise that such nonpayment of the daily wage on the days he was absent constitutes a penalty. The charge of insubordination is meritorious. For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employees assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. The fact that respondent refused to provide overtime work despite his knowledge that there is a production deadline that needs to be met, and that without him, the offset machine operator, no further printing can be had, shows his wrongful and perverse mental attitude; thus, there is willfulness. Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. The undue haste in effecting respondents termination shows that the termination process was a mere simulation of the required notices were given, a hearing was even scheduled and held, but respondent was not really given a real opportunity to defend himself; and it seems that petitioners had already decided to dismiss respondent from service, even before the first notice had been given. Therefore, the termination of respondent was railroaded in serious breach of his right to due process.

CRUZ v. BPI COMPLAINANT: Rowena De Leon Cruz RESPONDENT: Bank of the Philippine Islands (BPI) CITATION: G.R. No. 173357 DATE OF PROMULGATION: February 13, 2013 PONENTE: J. Peralta FACTS:   

 

1989 – petitioner was hired by Far East Bank and Trust Company (FEBTC) April 2000 – FEBTC and BPI merged and petitioner automatically became an employee of respondent. Petitioner held the position of Assistant Branch Manager of the BPI Ayala Avenue Branch in Makati City, and she was in charge of the Trading Section. July 12, 2002 - Respondent terminated petitioner on grounds of gross negligence and breach of trust. Petitioner's dismissal was brought about by the fraud perpetrated against three depositors, namely, Geoffrey L. Uymatiao, Maybel Caluag and Evelyn G. Avila, in respondent's Ayala Avenue Branch. (Illegal Withdrawal and Pre-Termination of Accounts) April 19, 2002 - BPI Vice-President Edwin S. Ragos issued a memorandum directing petitioner to explain within 24 hours the aforementioned unauthorized preterminations/withdrawals of US dollar deposits at the BPI Ayala Avenue Branch. Petitioner averred that she followed the bank procedure/policy on pre-termination of accounts, opening of transitory accounts and reactivation of dormant accounts.

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May 22, 2002 - an administrative hearing was held to give petitioner an opportunity to explain her side of the controversy. July 10, 2002 - a notice of termination was issued informing petitioner of her dismissal effective July 12, 2002 on grounds of gross negligence and breach of trust for the following acts: (1) allowing the issuance of USD CDs under the bank's safekeeping to an impostor without valid consideration; (2) allowing USD CD pre-terminations based on such irregularly released certificates; and (3) allowing withdrawals by third parties from clients' accounts, which resulted in prejudice to the bank. Incidents of fraud resulted in the dismissal of three officers, including petitioner, one trader; the suspension of two officers and one trader, and the reprimand of one teller.

LABOR ARBITER RULING: (April 1, 2004) 

The dismissal of Cruz was illegal. Petitioner cannot be considered a managerial employee, and that her dismissal on grounds of gross negligence and breach of trust was unjustified.

NLRC RULING: (January 31, 2005)  

Reversed LA’s ruling. Dismissed Cruz’ complaint for lack of merit. Evidence showed that the pre-termination of the accounts of the depositors involved and the withdrawal of money from such accounts were with the approval of petitioner.

CA RULING: (April 27, 2006) 

Affirmed the NLRC’s ruling, petition was denied and dismissed. Petitioner is a managerial employee whose continuous employment is dependent on the trust and confidence reposed on her by respondent. After the incident wherein respondent lost thousands of U.S. dollars, it could not be expected that the trust and confidence petitioner was previously enjoying could still be extended by respondent.

ISSUE: 

Whether or not the dismissal of petitioner is valid and legal

SC RULING: 



Petitioner’s dismissal was for a valid cause. Respondent dismissed petitioner from her employment on grounds of gross negligence and breach of trust reposed on her by respondent under Article 282 (b) and (c) of the Labor Code. Respondent avers that petitioner held the position of Assistant Manager in its Ayala Avenue Branch. However, petitioner contends that her position was only Cash II Officer. The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Petitioner holds a managerial status since she is tasked to act in the interest of her employer as she exercises independent judgment when she approves pre-termination of USD CDs or the withdrawal of deposits. Petitioner was remiss in the performance of her duty to approve the pre-termination of certificates of deposits by legitimate depositors or their duly-authorized representatives, resulting in prejudice to the bank, which reimbursed the monetary loss suffered by the affected clients. Hence, respondent was justified in dismissing petitioner on the ground of breach of trust. As long as there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position, a managerial employee may be dismissed



Petition denied, CA’s decision affirmed.

SME v. GUZMAN COMPLAINANT: SME Bank Inc., Abelardo Samson, Olga Samson, and Aurelio Villaflor, Jr. RESPONDENT: Peregrin Guzman, Eduardo Agustin, Jr., Elicerio Gaspar, Ricardo Gaspar, Jr., Eufemia Rosete, Fidel Espiritu, Simeon Espiritu, Jr., and Liberato Mangoba CITATION: G.R. No. 184517 DATE OF PROMULGATION: October 8, 2013 PONENTE: CJ. Sereno FACTS: 

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Respondents Elicerio Gaspar (Elicerio), Ricardo Gaspar, Jr.(Ricardo), Eufemia Rosete (Eufemia), Fidel Espiritu (Fidel), Simeon Espiritu, Jr. (Simeon, Jr.), and Liberato Mangoba (Liberato) were employees of Small and Medium Enterprise Bank, Incorporated (SME Bank). June 2001 – SME Bank experienced financial difficulties. To remedy the situation, the bank officials proposed its sale to Abelardo Samson (Samson). Simeon Espiritu (Espiritu), then the general manager of SME Bank, held a meeting with all the employees of the head office and of the Talavera and Muñoz branches of SME Bank and persuaded them to tender their resignations, with the promise that they would be rehired upon reapplication. Relying on this representation, Elicerio, Ricardo, Fidel, Simeon, Jr., and Liberato tendered their resignations dated 27 August 2001. As for Eufemia, the records show that she first tendered a resignation letter dated 27 August 2001, and then a retirement letter dated September 2001. September 11, 2001 – Agustin and De Guzman (owners) signified their conformity to the Letter Agreements and sold 86.365% of the shares of stock of SME Bank to spouses Abelardo and Olga Samson. Spouses Samson then became the principal shareholders of SME Bank, while Aurelio Villaflor, Jr. was appointed bank president. As it turned out, respondent employees, except for Simeon, Jr., were not rehired. After a month in service, Simeon, Jr. again resigned on October 2001. Respondent-employees demanded the payment of their respective separation pays, but their requests were denied. They filed a complaint for unfair labor practice; illegal dismissal; illegal deductions; underpayment; and nonpayment of allowances, separation pay and 13th month pay.

LABOR ARBITER RULING: (October 27, 2004) 



The buyer of an enterprise is not bound to absorb its employees, unless there is an express stipulation to the contrary. However, he also found that respondent employees were illegally dismissed, because they had involuntarily executed their resignation letters after relying on representations that they would be given their separation benefits and rehired by the new management. Accordingly, the labor arbiter decided the case against Agustin and De Guzman, but dismissed the Complaint against the Samson Group. Ordered respondents Eduardo Agustin, Jr. and Peregrin De Guzman to pay complainants’ separation pay in the total amount of P339,403.00

NLRC RULING: 

There was only a mere transfer of shares – and therefore, a mere change of management – from Agustin and De Guzman to the Samson Group. As the change of management was not a valid ground to terminate respondent bank employees, ruled that they had indeed

been illegally dismissed. It further ruled that Agustin, De Guzman and the Samson Group should be held jointly and severally liable for the employees’ separation pay and back-wages. CA RULING: (January 15 & March 13, 2008) 

NLRC’s decision affirmed.

ISSUE:   

Whether or not the respondents were illegally dismissed Whether or not both parties are liable for the claims of the employees and the extent of the reliefs that may be awarded to these employees Whether or not respondents are entitled to separation pay, full back-wages, moral damages, exemplary damages and attorney’s fees

SC RULING: 

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YES. Respondent employees were illegally dismissed. While resignation letters containing words of gratitude may indicate that the employees were not coerced into resignation, this fact alone is not conclusive proof that they intelligently, freely and voluntarily resigned. In order to determine whether the employees truly intended to resign from their respective posts, we cannot merely rely on the tenor of the resignation letters, but must take into consideration the totality of circumstances in each particular case. Their reliance on the representation that they would be reemployed gives credence to their argument that they merely submitted courtesy resignation letters because it was demanded of them, and that they had no real intention of leaving their posts. The facts show that Eufemia’s retirement was not of her own volition. She could only choose between resignation and retirement, but was made to understand that she had no choice but to leave SME Bank. Involuntary retirement is tantamount to dismissal, as employees can only choose the means and methods of terminating their employment, but are powerless as to the status of their employment and have no choice but to leave the company. There are two types of corporate acquisitions: asset sales and stock sales. In this case the Letter Agreements show that their main object is the acquisition by the Samson Group of 86.365% of the shares of stock of SME Bank. Following the rule in stock sales, respondent employees may not be dismissed except for just or authorized causes under the Labor Code. YES. The fact that there was a change in the composition of its shareholders did not affect the employer-employee relationship between the employees and the corporation, because an equity transfer affects neither the existence nor the liabilities of a corporation. SME Bank continued to be the employer of respondent employees notwithstanding the equity change in the corporation. This outcome is in line with the rule that a corporation has a personality separate and distinct from that of its individual shareholders or members, such that a change in the composition of its shareholders or members would not affect its corporate liabilities. Both Agustin and De Guzman were corporate directors of SME Bank. An analysis of the facts likewise reveals that the dismissal of the employees was done in bad faith. Therefore, they are solidarily liable with SME Bank for the satisfaction of employee’s lawful claims. YES. The rule is that illegally dismissed employees are entitled to (1) either reinstatement, if viable, or separation pay if reinstatement is no longer viable; and (2) backwages.

LRTA vs Pili, et al. Facts: LRTA is a government-owned and controlled corporation. It entered into a ten-year operations and management agreement with Meralco Transit Organization, Inc. (MTOI). The Commission on Audit declared the Agreement as void. As a result, LRTA purchased all the shares of stock of MTOI and renamed MTOI to Metro Transit Organization, Inc. (Metro) and formally declared Metro as its wholly-owned subsidiary. The Agreement between LRTA and Metro expired on 8 June 1994, and was thereafter extended on a month-to-month basis. The Agreement expired when LRTA decided no longer to renew and on 30 September 2000, Metro ceased its operations. Respondents were employees of Metro who have been terminated upon the expiration of the Agreement. The rest of the respondents filed cases involving purely monetary claims in the form of separation pays, balances of separation pays, and other unpaid claims, while respondent Noel B. Pili, in addition to his monetary claims, alleged that he was illegally dismissed. Pili alleges that the mere fact of the expiration of the Agreement was not sufficient to justify his dismissal. The other respondents claim that LRTA contractually bound itself to shoulder and provide all "Operating Expenses" of Metro including salaries, wages and fringe benefits and that the LRTA bound itself solidarity liable with Metro. LRTA, on the other hand, argues that NLRC cannot exercise jurisdiction over it as it is a government-owned and controlled corporation, and that only the Civil Service Commission (CSC) can take cognizance of the matter. Further, LRTA maintains that it has a separate legal personality from Metro, and thus there can be no illegal dismissal and no basis for the monetary claims of the employees of Metro. The Labor Arbiter found that Pili was illegally dismissed and that LRTA was solidarity liable with Metro for the monetary claims. On 24 June 2008, the NLRC modified the decision and found that there was no illegal dismissal as Pili's dismissal was valid on account of the termination of the Agreement between Metro and LRTA. The CA subsequently reinstated the Labor Arbiter’s decision. Issue: WON the NLRC has jurisdiction over LRTA and if so, should LRTA be held liable for the monetary claims by Metro employees Held: All of the respondents allege that they were employed by Metro. Thus, there is no real issue as far as the employer-employee relationship is concerned - the respondents themselves do not claim to be employed by LRTA. The employees were employed solely by Metro as Metro and LRTA each maintained their separate juridical personalities. Nonetheless, the argument of LRTA that only the CSC may exercise jurisdiction over it - even for monetary claims, must necessarily fail. The NLRC acquired jurisdiction over LRTA not because of the employeremployee relationship of the respondents and LRTA (because there is none) but rather because LRTA expressly assumed the monetary obligations of Metro to its employees. In the Agreement, LRTA was obligated to reimburse Metro for the latter's Operating Expenses which included the salaries, wages and fringe benefits of certain employees of Metro. Moreover, the Board of Directors of LRTA issued Resolution No. 00-44 where again, LRTA assumed the monetary obligations of Metro more particularly to update the Metro Inc. Employees Retirement Fund and to ensure that it fully covers all the retirement benefits payable to the employees of Metro. However, as far as the claim of illegal dismissal is concerned, we find that NLRC cannot exercise jurisdiction over LRTA. Pili was an employee of Metro alone - the Labor Arbiter and NLRC could not have acquired jurisdiction over LRTA insofar as the illegal dismissal complaint is concerned. This Court has already resolved this very issue on the monetary claims of the employees of Metro as against LRTA in LRTA v. Mendoza. Accordingly, we find that the application of the

doctrine of stare decisis is in order. Thus, LRTA is liable for the monetary claims of the respondents therein. South Cotabato Comms vs Sto. Tomas Facts: DOLE conducted a Complaint Inspection at the premises of DXCP Radio Station, which is owned by petitioner South Cotabato Communications Corporation. The inspection yielded a finding of violation of labor standards provisions of the Labor Code involving the nine (9) private respondents, such as: 1. Underpayment of Wages 2. Underpayment of 13th Month Pay 3. Non-payment of the five (5) days Service Incentive Leave Pay 4. Non-payment of Rest Day Premium Pay 5. Non-payment of the Holiday Premium Pay 6. Non-remittance of SSS Contributions 7. Some employees are paid on commission basis aside from their allowances DOLE scheduled on March 3, 2004 a Summary Investigation at its Regional Office. However, petitioners failed to appear despite due notice. Petitioner’s counsel again failed to appear and requested a resetting, which the DOLE Hearing Officer denied. Thus, the DOLE Regional Director ordered petitioners to pay private respondents the total amount of P759,752, representing private respondents' claim for wage differentials, 13 th month pay differentials, service incentive leave pay, holiday premium pay, and rest day premium. The Secretary of Labor affirmed the findings of the DOLE Regional Director. The CA subsequently upheld the Secretary of Labor, holding that petitioners cannot claim denial of due process since their failure to present evidence is attributed to their negligence. Petitioners maintain that they were prevented from presenting evidence to prove that private respondents are not their employees. The lack of categorical finding on the existence of an employer-employee relationship between the parties is an element which petitioners insist is a prerequisite for the exercise of the DOLE'S jurisdiction. Issue: WON an employer-employee relationship had sufficiently been established between the parties as to warrant the assumption of jurisdiction by the DOLE Held: After a careful review of this case, the Court finds that the DOLE failed to establish its jurisdiction over the case. It must be emphasized that without an employer-employee relationship, or if one has already been terminated, the Secretary of Labor is without jurisdiction to determine if violations of labor standards provision had in fact been committed, and to direct employers to comply with their alleged violations of labor standards. In determining the existence of an employer-employee relationship, the case of Bombo Radyo specifies the guidelines or indicators used by courts, i.e. (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee's conduct.

Substantial evidence, such as proofs of employment, clear exercise of control, and the power to dismiss that prove such relationship and that petitioners committed the labor laws violations they were adjudged to have committed, are grossly absent in this case. The Court is not unmindful of the State's policy to zealously safeguard the rights of our workers, as no less than the Constitution itself mandates the State to afford full protection to labor. Nevertheless, it is equally true that the law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer. The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers.Certainly, an employer cannot be made to answer for claims that have neither been sufficiently proved nor substantiated. Valeroso vs Sky Cable Facts: Petitioners Antonio Valeroso and Allan Legatona alleged that they started working on November 1, 1998 and July 13, 1998, respectively, as account executives tasked to solicit cable subscriptions for respondent, Sky Cable. Sky Cable claims that they engaged petitioners as independent contractors under a Sales Agency Agreement. In 2007, respondents decided to streamline its operations and engaged the services of an independent contractor, Armada Resources & Marketing Solutions, Inc. As a result, petitioners' contracts were terminated but they, together with other sales account executives, were referred for transfer to Armada. Petitioners then became employees of Armada. Sky Cable Corporation and Armada entered into a Sales Agency Agreement, wherein petitioners were again tasked to solicit accounts/ generate sales for Sky Cable. They were informed that their commissions would be reduced. They subsequently informed their manager their intention to file a labor case with the NLRC. Their manager in turn informed them that they will be dropped from the roster of its account executives. Sky Cable claims that there was never an employer-employee relationship to begin with. Hence, there is no cause for illegal dismissal filed against them by petitioners. The Labor Arbiter’s decision provides that petitioners failed to establish by substantial evidence that respondent was their employer. The NLRC reversed the Labor Arbiter's ruling thus, declaring complainants to have been illegally dismissed. The CA on the other hand, sustained the Labor Arbiter's finding that there was no evidence to substantiate the bare allegation of employeremployee relationship between the parties. Issue: WON petitionerd were respondents regular employees, whose dismissal from employment was illegal Held: The court ruled that an employer-employee relationship is absent in this case. To prove the claim of an employer-employee relationship, the following should be established by competent evidence: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. Among the four, the most determinative factor in ascertaining the existence of employer-employee relationship is the "right of control test." Under this control test, the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the means by which such end is reached. In the present case, there is a written contract, i.e., the Sales Agency Agreement, which served as the primary evidence of the nature of the parties' relationship. In this duly executed and signed agreement, petitioners and respondent unequivocally agreed that petitioners' services were to be engaged on an agency basis as sales account executives and that no employeremployee relationship is created but an independent contractorship. While the existence

of employer-employee relationship is a matter of law, the characterization made by the parties in their contract as to the nature of their juridical relationship cannot be simply ignored, particularly in this case where the parties' written contract unequivocally states their intention. Evidently, the legal relation of petitioners as sales account executives to respondent can be that of an independent contractor. There was no showing that respondent had control with respect to the details of how petitioners must conduct their sales activity of soliciting cable subscriptions from the public. Century Properties vs Babiano Facts: On October 2, 2002, Edwin Babiano was hired by Century Properties Inc (CPI) as Director of Sales, and was eventually appointed as Vice President for Sales. His employment contract contained a "Confidentiality of Documents and Non-Compete Clause" which, among others, barred him from disclosing confidential information, and from working in any business enterprise that is in direct competition with CPI "while he is employed and for a period of one year from date of resignation or termination from CPI." Should Babiano breach any of the terms thereof, his "forms of compensation, including commissions and incentives will be forfeited." During the same period, Emma Concepcion was initially hired as Sales Agent by CPI and was eventually promoted as Project Director. It was stipulated in her contract that no employeremployee relationship exists between Concepcion and CPI. On February 25, 2009, Babiano tendered his resignation and revealed that he had been accepted as Vice President of First Global BYO Development Corporation (First Global), a competitor of CPI. On the other hand, Concepcion resigned as CPFs Project Director through a letter dated February 23, 2009, effective immediately. Respondents filed a complaint for non-payment of commissions and damages against CPI. The Labor Arbiter ruled in favor of CPI stating that Babiano violated the "Confidentiality of Documents and Non-Compete Clause" of his employment contract, thus, resulting in the forfeiture of his unpaid commissions. While in Concepcion’s case, it ruled that it did not have jurisdiction over her money claim as she was not an employee but a mere agent of CPI, as clearly stipulated in her engagement contract with the latter. However, the NLRC reversed the LA’s decision. The CA subsequently affirmed the NLRC ruling with modification increasing the award of unpaid commissions to Babiano and Concepcion. Issue:

WON CPI is liable for the unpaid commissions of respondents

Held: Article 1370 of the Civil Code provides that "if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control." The court ruled that Babiano violated the stipulations of the "Confidentiality of Documents and Non-Compete Clause", thus, justifying the forfeiture of his unpaid commissions. Based on case law, the presence of the following elements evince the existence of an employeremployee relationship: (a) the power to hire, i.e., the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee's conduct, or the so called "control test." The control test is commonly regarded as the most important indicator of the presence or absence of an employer-employee relationship. Under this test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end. The Court thus, finds that Concepcion was an employee of CPI. While the employment agreement of Concepcion was denominated as a "Contract of Agency for Project Director," it should be stressed that the existence of employer-employee relations could not be negated by the mere expedient of repudiating it in a contract. It was ruled that one's employment status is defined and prescribed by law, and not by what the parties say it should be.

In sum, the Court thus holds that the commissions of Babiano were properly forfeited for violating the "Confidentiality of Documents and Non-Compete Clause." On.the other hand, CPI remains liable for the unpaid commissions of Concepcion in the sum of P591,953.05.