Labor Law Review - Notes - FLJ - Gaw

I. Employment Relationship

Kinds of Employment

7 Constitutional Rights of Labor (WHOSE-CD) 1.  Right to receive a living Wage  2.  Right to work under Humane conditions  3.  Right to Organize themselves  4.  Right to enjoy Security of tenure  5.  Right to Engage in peaceful concerted activities, including to strike in accordance with law  6.  Right to conduct Collective bargaining and negotiate with management  7.  Right to participate in policy Decision making processes affecting their rights and benefits as may be provided by law

A. EER – FOUR -FOLD TEST  Four-Fold Test 1.  Power to engage or select; 2.  Power to dismiss;

3.  Payment of wages; & 4.  Power to control the means and method of performing the work, not only the end result.   In the four-fold test, the power of control has to be fully stated. Two-tiered Test 1.  Four-Fold Test: In particular, determine the existence of CONTROL 2.  Economic Dependency Test: used when the existence of the EER cannot be determined using the Four-Fold Test ⁃   Seven indicators used for the economic dependency test (Francisco v. NLRC): [PD2C-SInvIni] (PDC-Sinvini) *MEMORIZE  1)  Extent to which the Services performed by the worker are an integral part of the ER’s business   Extent of the worker’s Investment in equipment & facilities Nature & degree of Control exercised by the ER Worker’s opportunity for Profit & loss The amount of Initiative, skill, judgment, or foresight required 6)  Permanency & Duration of the relationship between the worker & the ER 7)  Degree of Dependency of the worker upon the ER for his continued employment in that line of business

2) 3)   4)  5) 

 Substantial  Substan tial Evidence Needed Needed

 

Substantial evidence, which is the quantum of proof required in labor cases, is “that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.”

No particular form of evidence is required to prove the existence of such EER. Any competent and relevant evidence to prove EER may be admitted. Hence, while no particular form of evidence is required, a finding that such relationship exists must still rest on some substantial evidence. Moreover, the substantiality substantiality of the evidence depends on its quantitative as well as its qualitative aspects. Evidence in Illegal Dismissal Cases While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is for a valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal dismissal..

CLASS DISCUSSION ON EVIDENTIARY REQUIREMENTS FOR EER Q: Who has the burden of proving EER? A: The EE. Q: What kind of evidence is needed? A: Substantial evidence Q: T/F. The moment that you how company ID bearing your name that alone will lead the courts to conclude you are the employee of the ER. A: F. The four elements of the four-fold test is not necessarily shown. Q: T/F. In all labor cases, the ER has the burden of proof. A: F. Valencia v. Classique Vinyl Facts: Valencia filed a case for underpayment of wages against Classique Vinyl (CV), which turned into an illegal dismissal case when he was scolded for filing the complaint. CV argued, however, that it was CMS that was the ER of Valencia, & that CMS only sent Valencia to CV to do some work in certain years, like in 2005, 2007, etc., limited to 3-4 months each year. It argued that CMS paid Valencia’s wages as well. CMS, on the other hand, argued that CV was the ER, & that the latter exercised full control o n Valencia. Who is Valencia’s ER?   Held: CMS. Applying the four-fold test –    Wages – CMS paid Valencia’s wages & gave CMS non -monetary benefits

as well Hiring – Valencia himself admitted that it was CMS that hired him  Control –  Valencia’s contract with CMS states that he must observe all rules & regulations of the company; they made statements that they would not take Valencia’s tardiness against him     Dismissal – CMS could fire him if his work fell below standards Further, the argument that CMS is a LOC is not tenable, since it was proven, through registration with DTI, etc. that CMS is a legitimate company, a private recruitment & placement agency (PRPA). This fact of registration prevents the

   

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presumption that CMS is a LOC from arising. Note: The presumption is that a contractor is a LOC unless such contractor

overcomes the burden of proving that it has substantial capital, investment, tools, & the like. FLJ: Note that DO 174-17 provides that legitimate contractors cannot simultaneouslyy engage in recruitment activities. Hence, the presumption in this simultaneousl case from the fact that CMS is a registered recruitment agency may be “trumped” by DO 174 -17. Diamond Farms v. Southern Philippines  Facts: DFI’s 800 -hectare banana plantation was turned over to qualified agrarian beneficiaries, the same farmers who were working in the original plantation who subsequently organized themselves into a multi-purpose cooperative named DARBMUPCO. DARBMUPCO entered into a banana production & purchase agreement (BPPA) with DFI where DFI took care of the labor costs. Since DARBMUPCO was hampered by lack of manpower, DFI engaged the services of Southern Philippine Federation of Labor who in turn recruited the workers. Southern filed a petition for certification election on behalf of 400 workers working in the plantation.  Both DARBMUPCO and DFI denied that they were the ERs. Southern later filed a case for underpayment of wages and DFI was later held as the statutory ER of the workers. Held: Southern Philippines is a LOC and thus, DFI shall be considered the principal employer. There is no evidence showing that respondentcontractors are independent contractors. The respondent-contractors, DFI, and DARBMUPCO did not offer any proof that respondent-contractors were not engaged in LOC. To support its argument that respondent-contractors are the ERs of respondent-workers, and not merely a LOC, DFI should have presented proof showing that respondent-contractors carry on an independent business and have sufficient capitalization. Respondents-contractors again admitted that they are a LOC commissioned and contracted by DFI to recruit farm workers. All farm tools were supplied by petitioner and respondents had no adequate capital to acquire such tools. Respondents were also directly supervised, controlled and managed by petitioner DFI farm managers and supervisors, specifically on work assignments and performance targets. DFI managers and supervisors, at their sole discretion and prerogative, could directly hire and terminate any or all. The records show that DFI hired the respondent contractors, who in turn hired their own men to work in the land of DARBMUPCO as well as in the managed area of the plantation. That DARBMUPCO owns the awarded plantation where the respondentcontractors and respondent-workers were working is immaterial. This does not change the situation of the parties.

CLASS DISCUSSION BASED ON THIS PART OF THE RULING: “A finding that a contractor is a LOC is equivalent to a declaration that there is an EER between the principal, & the workers of the LOC; the LOC is deemed only the agent of the principal. Thus, in this case, respondent-contractors are the LOCs and either DFI or DARBMUPCO is their principal. ”  Q: When a case is filed, there is a presumption regarding contracting arrangements. What is it? A: Contracting arrangement: The presumption is that the contract arrangement is that it is illegitimate (hence, that the contractor is a LOC) according to Valencia v. Classique Vinyl . Q: What is the consequence of being a LOC because of failure to rebut the presumption? Does this already make the principal the ER of the alleged EEs of the LOC? A: It is possible to say this, based on the ruling in Diamond Farms v. Southern Philippines. The LOC thus becomes the agent of the principal. However, you may answer in this way: (1) state the LOC presumption; and then, (2) apply the four-fold test to validate the EER between the principal & the EEs. This is the best way to attack the question. Note that SC has always held that the presumption of LOC will arise whether the LOC is such by reason of lack of substantial capital or control. Note further that if there are various, various facts about EER, then use the facts to determine who the true ER is, because anyway, the presumption of LOC will only apply. Bombo Radyo v. DOLE Secretary Facts: Juezan filed a complaint against Bombo Radyo, claimi claiming ng underpayment of benefits. DOLE conducted an inspection pursuant to its power to investigate violations of the Labor Code. Bombo Radyo denied the existence of EER, arguing that Juezan was hired on a per project basis, & was actually a drama talent, who was paid & supervised by directors & not Bombo Radyo. DOLE Regional Director ruled that Juezan was an EE, & was entitled to the benefits unpaid. DOLE Secretary affirmed. Before SC, Before this Court, Bombo Radyo argued that the NLRC, and not the DOLE Secretary, has jurisdiction over Juezan’s claim, in view of Arts. 217 & 128 1 of the Labor Code. Does DOLE have the power to determine the existence of EER?

1 Art. 128 (b). Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the EER still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the

enforcement of their orders, except in cases where the employer contests the findings of

 

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Held: Yes, but only in a limited way. DOLE’s power does not apply in two instances, namely: (a) where the EER has ceased (e.g., illegal dismissal cases); and (b) where EER never existed (e.g., where an EE alleges the existence of EER, but ER ER denies it). BUT DOLE in in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an EER. Such determination, however, cannot be coextensive with the visitorial and enforcement power itself. It is merely preliminary & incidental to the DOLE’s primary function of enforcing labor standards provisions. The

determination of the existence of EER is still primarily lodged with the NLRC. Thus, before the DOLE may exercise its powers under Article 128, two important questions must be resolved: (1) Does the EER still exist, or alternatively, was there ever an EER to speak of; and (2) Are there violations of the Labor Code or of any labor law? If yes to both, DOLE would have  jurisdiction, incidentally because of its enforc ement powers. The existence of an EER is a statutory prerequisite to and a limitation on the power of the Secretary of Labor. THUS: A mere assertion of absence of EER does not deprive the DOLE of  jurisdiction over the claim claim under Article 128 of the Labor Code. At least a prima facie showing of such absence of relationship, as in this case, is needed to preclude the DOLE from the exercise of its power. [CHECK FOR THE REVERSAL OF THIS CASE

ask Tin]

CLASS DISCUSSION ON NLRC V. DOLE JURISDICTION  Q: When will the NLRC have jurisdiction over a case filed by an EE? A: There must be two things proven in relation to jurisdiction (1) there is an EER, and (2) the issue is in relation to said EER. When it comes to the issue of NLRC jurisdiction, all you have to say is that even if there is a casual connection between EER relationship and the issue at hand, & the case is closely intertwined. Q: Does DOLE have jurisdiction to determine the existence of EER? A: Yes. The power to determine the existence of an EER is ancillary to the power to inspect, which is granted by DOLE. DOLE can rule on matters related to its powers of inspection. However, DOLE cannot immediately take up a quasi judicial matter. DOLE must first begin with its primary jurisdiction (e.g., its executive power) and then determine the EER in relation to that.

would have jurisdiction). DOLE only has jurisdiction if the EER is still alive. Grandteq Industrial Steel Products v. Edna Margallo Facts: Margallo was a salesman for Grandteq, & was granted by the latter a car loan program. Later, she was reprimanded following allegations of moonlighting, among others, & resigned. She filed a case before the labor arbiter seeking payments, & a reimbursement for car loan payments she already made. This was denied by the arbiter, because the loan stipulated that all payments made to the ER, following resignation of an EE, would be forfeited in favor of the ER. CA reversed, & found that Margallo had a right to be reimbursed her car loan payments, & the terms of the car loan agreement should not be applied for being highly prejudicial to the EE’s interest.  Was the CA correct? Held: Yes. SC held that the provisions in Margallo’s  contract providing that there would be a forfeiture of all payments made to the ER upon resignation, including those for the car loan, was void for being contrary to justice & fairness. Domondon v. NLRC Facts: Domondon used a car from his company, VMPI. He eventually fell into

bad relations with the new management, & filed a complaint for illegal dismissal before the NLRC. Aside from the issues on illegal dismissal, VPMI filed a counterclaim, also with the labor arbiter, & argued that that as per agreement, Domondon should have paid for the car. Does NLRC have  jurisdiction over the the counterclaim? Held: Yes. The records show that the initial agreement of the parties was that petitioner would be extended financial assistance in the amount of P300,000 on top of his accrued benefits at the time of the effectivity of his resignation. However, Domondon requested that he be allowed to keep the car assigned to him in lieu of the financial assistance. However, company policy prohibits transfer of ownership of property without valuable consideration. Thus, the parties agreed that petitioner shall still be extended the P300,000 financial support, which he shall use to pay for the subject car. VMPI deposited the agreed amount in petitioner’s account. Despite having regi stered the car in his name and repeated demands from private respondents, petitioner failed to pay for it as agreed upon. Petitioner did not also return the car. Without doubt, the transfer of the ownership of the company car to petitioner is connected with his

CONCLUSION ON DOLE’S AUTHORITY TO DETERMINE EER BASED ON BOMBO R ADYO  The DOLE, through its Regional Directors, has the power to determine EER. This power is not only reserved to Labor Arbiters.

resignation and arose out of the parties’ EER. Accordingly, VMPI’s claim for

DOLE’s power to determine EER will be lost if the EER has already been

Cosare v. Broadcom Asia, Inc. Facts: Cosare was an EE of Broadcom who was there from the start of the company, & was even an incorporator & shareholder. However, he was eventually sent a show-cause notice stating that he would have to explain some accusations levied against him within 48 hours. He tried to do so but was

terminated (e.g., EE has already be dismissed, in which case, only the NLRC

the labor employment and enforcement officer and raises issues supported by

damages falls within the jurisdiction of the Labor Arbiter.

documentary proofs which were not considered in the course of inspection.

 

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barred entry from the premises of the company. He thus filed a case for constructive dismissal. Broadcom argued that (1) jurisdiction was with regular courts because what was involved was an intra-corporate controversy, (2) Cosare had resigned & was not dismissed. Are the company’s contentions tenable? Held: No. (1) When a dispute involves a charge of illegal dismissal, the action may fall under the jurisdiction of the LAs upon whose jurisdiction, as a rule, falls termination disputes and claims for damages arising from EER as provided in Art. 217. The mere fact that Cosare was a stockholder and an officer of Broadcom at the time the subject controversy developed failed to necessarily make the case an intra-corporate dispute. One must distinguish between a “regular employee” & a “corporate officer” for purposes of

establishing the true nature of a complaint for illegal dismissal and determining which body has jurisdiction over it. In the case of the regular employee, the LA has jurisdiction; otherwise, the RTC exercises the legal authority to adjudicate. In this case, the LA had the original jurisdiction over the complaint for illegal dismissal because Cosare, although an officer of Broadcom for being its AVP for Sales, was not a “corporate offic er.”  There are two circumstances which must concur for an individual to be considered a corporate officer, as against an ordinary EE or officer, namely: (1) the creation  of the position is under the corporation’s charter or by -laws; & (2) the election  of the officer is by the directors or stockholders. It is only when the officer claiming to have been illegally dismissed is classified as such corporate officer that the issue is deemed an intra-corporate dispute which falls within the jurisdiction of the trial courts. ALSO: An enabling clause in a corporation’s by -laws empowering its board of directors to create additional officers, even with the subsequent passage of a board resolution to that effect, cannot make such position a corporate office. The board has no power to create other corporate offices without first amending the corporate by-laws so as to include therein the newly created corporate office. ALSO: In determining the existence of an intra-corporate dispute, the (a) status or relationship of the parties and  (b) the nature of the question that is the subject of the controversy must be taken into account. Considering that the pending dispute particularly relates to Cosare’s rights and obligations as a

regular officer of Broadcom, instead of as a stockholder of the corporation, the controversy cannot be deemed intra-corporate. (2) Cosare was constructively & illegally dismissed. The test of constructive dismissal is whether a reasonable person in the EE’s position would have felt

compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal is therefore a dismissal in disguise. to be should contain –  *NOTE: The first written notice 

 

1.  The specific causes or grounds for termination against the   The notice should contain a detailed narration of the facts & circumstances that will serve as basis for the charge against the EEs. A general description of the charge will not suffice   The notice should specifically mention which company rules, if any, violated &/or which among the grounds under Art. 282 is beingare charged 2.  A directive that the EEs are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity”  - every kind of assistance that   management must accord to the EEs to enable them to prepare adequately for their defense.   A period of at least 5 calendar days from receipt of the notice to give the EEs an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint B. KINDS OF EMPLOYEES Regular EE   Two Types: o  By nature - whereby the EE has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the ER   First, ask: Necessary or desirable?   Second, ask: Is it usual trade or business? o  By length of time - casual employment arrangement when the casual EE's engagement has lasted for at least 1 year, regardless of the engagement's continuity; EE is considered regular with respect to the activity in which he is employed & his employment shall continue while such activity exists (this is called “casual regular” employment)    Regular EEs are entitled to indefinite security of tenure and all the benefits of a regular EE o  Can only be dismissed for just cause or authorized cause. o  Entitled to 2 notices before dismissal: The first gives him reasonable time to explain himself, etc. before termination, & the second notice is of actual termination 

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FLJ: Never apply the test for regular employment before first determining the existence of EER. This is fatal. Apply tests first for determining existence of EER, & then ask about the nature of the employment. FLJ: Janitorial services provided by an EE are usually regular EEs. It is just that  janitorial services services may be validly contracted. contracted.

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status” in which the EE may seek employment elsewhere, but the ER may

Seasonal EE   Elements: 1.  EE must be performing work or services that are seasonal in nature; & 2.  He had been employed for the duration of the season   Involves work or service that is seasonal in nature or lasting for the duration of the season   NOTE: There is such a thing as a “regular” seasonal EE  - when the "seasonal" workers are continuously & repeatedly hired to perform the same tasks or activities for several seasons o  Elements: i.  The seasonal EE should perform work or services that are seasonal in nature; & ii.  They must have also been employed for more than 1 season (FLJ: Hence, EE must be hired at least twice to become a regular seasonal EE)  EE)  FLJ: This is not just agricultural work; it can also be, for example, “seasons” in a

mall. Project EE   Elements: 1.  Designation of a specific project or undertaking for which the EE is hired o  Specific project – should not be a continuing affair or project 2.  Clear determination of the completion or termination of the project at the time of the EE's engagement o  FLJ: Notice of termination should be sent to the field office of the DOLE; failure to notify gives rise to the presumption that the EE is regular, & not a project EE    Their services are legally & automatically terminated upon the completion of the project, as the EE's services are coterminous with the project   Length of time is not controlling – but this may be a badge that the EE is actually regular

require the EE to be employed under him as soon as a project comes up. BUT: If the floating status lasts more than 6 months, then that is past the period required by law & ER must pay separation pay to the EE already. Casual EE   Employment that is not considered regular, project, or seasonal   Incidental FLJ: Note that the distinction between regular and casual EEs does not really modify the entitlement of an EE to benefits under labor standard laws. It only generally affects the question of TERMINATION. Fixed-Term EE   Governed by the Civil Code, rather than the Labor Code   Usually involves directors, employers, etc.   In one case, a chicken dresser was considered a fixed-term EE o  FLJ: They probably had a bad lawyer though.

 

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Applicable 1.  The when: fixed period of employment was agreed upon knowingly & voluntarily by the parties, absent any circumstances vitiating EE’s consent; & 2.  The facts satisfactorily show that the EE & ER dealt with each other on more or less equal terms (i.e., same bargaining position).

Probationary EE   Requisites for validity: 1.  EE should be informed that he is probationary 2.  EE should be informed of the reasonable standards that need to be met for regularization; these standards must have be given atExceptions the time that EE was hired o  to standards from jurisprudence:

a)   Abbott Laboratories  case: If the work is selfdescriptive, there is no need for the ER to give the reasonable standards from day one   Note the peculiarity of this case, because the case did provide the

FLJ: Note that project EEs can perform work that is usually necessary or desirable to the usual trade or business of the ER. Hence, the strict requirements of the law must be complied with.

“standards” for employment; despite

 

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FLJ: There is no such thing as a regular project EE. If there is a work pool from which an ER repeatedly hires a set of EEs in between projects, the EE is just a regular EE. In between projects, the ER has the right to give the EE a “floating

 

this, this is still the doctrinal pronouncement in Abbott   Ex. of self-descriptive jobs: driver, maid, cook, lawyer, doctor, journalist

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