Labor Standards Case Digest

DAVID vs. MACASIO G.R. No. 195466---- July 2, 2014 Petitioner: ARIEL Petitioner:  ARIEL L. DAVID, doing business under th e name and style "YIELS HOG DEALER," Respondent: JOHN G. MACASIO FACTS: Macasio filed before the LA a complaint against petitioner Ariel L. David, doing business under the name and style "Yiels Hog Dealer," for non-payment of overtime pay, holiday pay and 13th month pay. He also claimed payment for moral and exemplary damages and attorney’s fees.  Macasio also claimed payment for service incentive leave (SIL). David claimed that he started his hog dealer business in 2005 and that he only has ten employees. He 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 claims that Macasio 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: WON Macasio was engaged on pakyaw or task basis therefore entitling him to overtime, holiday, SIL and 13th month pay LA dismissed dismissed Macasio’s complaint for lack of merit. The LA gave credence to David’s claim that he engaged Macasio on "pakyaw" or task basis. The LA noted the following facts to support this finding: (1) Macasio received the fixed amount of ₱700.00 for every wor k wor k done, regardless of the number of hours that he spent in completing the task and of the volume or number of hogs that he had to chop per engagement; (2) Macasio usually worked for only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following following day; and (3) the ₱700.00 fixed wage far exceeds the then prevailing daily minimum wage of ₱382.00. The LA added that the nature of David’s business as hog dealer supports this "pakyaw" or task basis arrangement. The LA concluded that as Macasio was engaged on "pakyaw" or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay. The NLRC’s Ruling NLRC affirmed the LA ruling. The NLRC observed that David did not require Macasio to observe an eight hour work schedule to earn the fixed ₱700.00 ₱700 .00 wage; and that Macasio had been performing a non-time work, pointing out that Macasio was paid a fixed amount for the completion of the assigned task, irrespective of the time consumed in its performance. Since Macasio was paid by result and not in terms of the time that he spent in the workplace, Macasio is not covered by the Labor Standards laws on overtime, SIL and holiday pay, and 13th month pay under the Rules and Regulations Implementing the 13th month pay law.

Benigno vs ABS CBN Respondent ABS-CBN Corporation, employed respondents Amalia Villafuerte (Villafuerte) as Manager. Thru Villafuerte, ABS-CBN engaged the services of petitioners Nelson Begino and Gener Del Valle as Cameramen/Editors for TV Broadcasting. Petitioners Ma. Cristina Sumayao and Monina Avila-Llorin were likewise similarly engaged as reporters sometime in 1996 and 2002, respectively. With their services engaged by respondents thru Talent Contracts which, though regularly renewed over the years, provided terms ranging from three (3) months to one (1) year, petitioners were given Project Assignment Forms which detailed, among other matters, the duration of a particular project as well as the budget and the daily technical requirements thereof. In the aforesaid capacities, petitioners were tasked with coverage of news items for subsequent daily airings in respondents’ TV Patrol Bicol Program . Their Talent Contract specifically provides that nothing therein shall be deemed or construed to establish an employer-employee relationship between the parties. Claiming that they were regular employees of ABS-CBN, petitioners filed against respondents the complaint before the NLRC. In support of their claims for regularization, underpayment of overtime pay, holiday pay, 13th month pay, service incentive leave pay, damages and attorney's fees, petitioners alleged that they performed functions necessary and desirable in ABS-CBN's business. Mandated to wear company IDs and provided all the equipment they needed, petitioners averred that they worked under the direct control and supervision of Villafuerte and, at the end of each day, were informed about the news to be covered the following day, the routes they were to take and, whenever the subject of their news coverage is quite distant, even the start of their workday. Petitioners claimed that, under pain of immediate termination, they were bound by the company’s policy on, among others, attendance and punctuality.  Aside from the constant evaluation of their actions, petitioners were reportedly subjected to an annual competency assessment alongside other ABS-CBN employees, as condition for their continued employment. Although their work involved dealing with emergency situations at any time of the day or night, petitioners claimed that they were not paid the labor standard benefits the law extends to regular employees. To avoid paying what is due them, however, respondents purportedly resorted to the simple expedient of using said Talent Contracts and/or Project Assignment Forms which denominated petitioners as talents, despite the fact that they are not actors or TV hosts of special skills. Respondents insisted that, pursuant to their Talent Contracts and/or Project Assignment Forms, petitioners were hired as talents, to act as reporters and/or cameramen for TV Patrol Bicol for designated periods and rates. Although petitioners were inevitably subjected to some degree of control, the same was allegedly limited to the imposition of general guidelines on conduct and performance, simply for the purpose of upholding the standards of the company and the strictures of the industry.  Never subjected to any control or restrictions over the means and methods by which they performed or discharged the tasks for which their services were engaged, petitioners were, at most, briefed whenever necessary regarding the general requirements of the project to be executed. Having been terminated during the pendency of the case, Petitioners filed a second complaint against respondents, for regularization, payment of labor standard benefits, illegal dismissal and unfair labor practice. Upon respondents’ motion, this complaint was dismissed for violation of the rules against forum shopping. Labor Arbiter Quiñones resolved the case in favor of petitioners who, having rendered services necessary and related to ABS-CBN’s business for more than a year, were determined to be its regular employees and that the exclusivity clause and prohibitions under petitioners’ Talent Contracts evinced respondents’ control over them. NLRC: affirmed LA’s decision. Motion for reconsideration denied. Respondents filed the Rule 65 petition for certiorari, which, in addition to taking exceptions to the findings of the assailed decision, faulted petitioners for violating the rule against forum shopping. [16]

CA: rendered the herein assailed decision, reversing the findings of the Labor Arbiter and the NLRC. Petitioners’ motion for reconsideration of the foregoing decision was denied, hence, this petition. ISSUE: WON there is an employer-employee relationship between the parties HELD: Yes. To determine the existence of said relation, case law has consistently applied the four-fold test, to wit: (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 on the means and methods by which the work is accomplished. Of these criteria, the so-called “control test” is generally regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under this test, an employer-employee relationship is said to exist where the person for whom the services are performed reserves the right to control not only the end result but also the manner and means utilized to achieve the same.  Article 280 of the Labor Code of the Philippines also provides as follows:  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 pr eceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such actually exists. The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment Forms and the terms and condition embodied therein, petitioners are regular employees of ABS-CBN. Time and again, it has been ruled that the test to determine whether employment is regular or not is the reasonable connection between the activity performed by the employee in relation to the business or trade of the employer. As cameramen/editors and reporters, petitioners were undoubtedly performing functions necessary and essential to ABS-CBN’s business of broadcasting television and radio content. Aside from the fact that said program is a regular weekday fare of the ABS-CBN’s Regional Network Group in Naga City, the record shows that, from their initial engagement in the aforesaid capacities, petitioners were continuously re-hired by respondents over the years. To the mind of the Court, respondents’ repeated hiring of petitioners for its long-running news program positively indicates that the latter were ABS-CBN’s regular employees. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated or continuing performance as sufficient evidence of the necessity, if not indispensability of that activity in the business. The nature of the employment depends, after all, on the nature of the activities to be performed by the employee, considering the nature of the employer’s business, the duration and scope to be done, and, in some cases, even the length of time of the performance and its continued existence.  As cameramen/editors and reporters, it also appears that petitioners were subject to the control and

supervision of respondents which, first and foremost, provided them with the equipments essential for the discharge of their functions. Prepared at the instance of respondents, petitioners’ Talent Contracts tellingly provided that ABS-CBN retained “all creative, administrative, financial and legal control” of the program to which they were assigned. Aside from having the right to require petitioners “to attend and participate in all promotional or merchandising campaigns, activities or events for the Program,” ABSCBN required the former to perform their functions “at such locations and Performance/Exhibition Schedules” it provided or, subject to prior notice, as it chose determine, modify or change. Even if they were unable to comply with said schedule, petitioners were required to give advance notice, subject to respondents’ approval.[34] However obliquely worded, the Court finds the foregoing terms and conditions demonstrative of the control respondents exercised not only over the results of petitioners’ work but also the means employed to achieve the same. The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor. The Court will peruse beyond any such agreement to examine the facts that typify the parties’ actual relationship Rather than the project and/or independent contractors respondents claim them to be, it is evident from the foregoing disquisition that petitioners are regular employees of ABS-CBN. This conclusion is borne out by the ineluctable showing that petitioners perform functions necessary and essential to the business of ABS-CBN which repeatedly employed them for a long-running news program of its Regional Network Group in Naga City. In the course of said employment, petitioners were provided the equipments they needed, were required to comply with the Company's policies which entailed prior approval and evaluation of their performance. CHEVRON PHILS VS. GALIT G.R. No. 186114, October 07, 2015 Petitioner: CHEVRON (PHILS.), INC., Respondents: VITALIANO C GALIT, SJS AND SONS CONSTRUCTION CORPORATION AND MR. REYNALDO SALOMON FACTS: Respondent Galit  filed against petitioner a Complaint for illegal dismissal, underpayment/non-payment of 13th month pay, separation pay and emergency cost of living allowance. Galit alleged that: he is a regular and permanent employee of Chevron since 1982, having been assigned at the company's Pandacan depot; he is an "all-around employee" whose job consists of cleaning the premises of the depot, changing malfunctioning oil gaskets, transferring oil from containers and other tasks that management would assign to him; in the performance of his duties, he was directly under the control and supervision of Chevron supervisors; on January 15, 2005, he was verbally informed that his employment is terminated but was promised that he will be reinstated soon; for several months, he followed up his reinstatement but was not given back his job . SJS claimed that: it is a company which was established in 1993 and was engaged in the business of providing manpower to its clients on a "per project/contract" basis; Galit was hired by SJS in 1993 as a project employee and was assigned to Chevron, as a janitor, based on a contract between the two companies; contrary to Galit's allegation, he started working for SJS only in 1993; the manpower contract between SJS and Chevron eventually ended on November 30, 2004 which resulted in the severance of Galit's employment; SJS finally closed its business operations in December 2004; it retired from doing business in Manila on January 21, 2005; Galit was paid separation pay of P11,000.00. On the other hand, petitioner contended in its Position Paper with Motion to Dismiss that among others

that he was subject to the supervision, discipline and control of SJS; on November 30, 2004, the extended contract between petitioner and SJS expired; subsequently, a new contract for janitorial services was awarded by petitioner to another independent contractor; petitioner was surprised that Galit filed an action impleading it; despite several conferences, the parties were not able to arrive at an amicable settlement. Labor Arbiter dismissed the complaint against Chevron for lack of jurisdiction, and against respondents SJS and Reynaldo Salomon for lack of merit. Respondent filed an appeal with the NLRC which ordered SJS and Sons Construction Corporation is to pay the complainant, severance compensation, at the rate of one (1) month salary for every year of service. The NLRC affirmed the findings of the LA that SJS was a legitimate job contractor and that it was Galit's employer. However,"the NLRC found that Gal it was a regular, and not a project employee, of SJS, whose employment was effectively terminated when SJS ceased to operate. Motion for reconsideration denied. Respondent then filed a petition for certiorari  with the CA assailing the above NLRC Decision and Resolution. Contrary to the- findings of the LA and the NLRC, the CA held that SJS was a labor-only contractor, that petitioner is Galit's actual employer and that the latter was unjustly dismissed from his employment.

ISSUES: 1. WON there is an employer-employee relationship between the company and the respondent HELD: Yes. To ascertain the existence of an employer-employee relationship, jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct, or the so-called "control test." Of these four, the last one is the most important. The so-called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control 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. In the instant case, the true nature of Galit's employment is evident from the Job Contract between petitioner and SJS. The foregoing provisions of the Job Contract demonstrate that the latter possessed the following earmarks of an employer, to wit: (1) the power of selection and engagement of employees, (2) the payment of wages; (3) the power to discipline and dismiss, (4) the power to control the employee's conduct.  As to SJS' power of selection and engagem ent, Galit himself admitt ed in his own affidavit that it was SJS which assigned him to work at Chevron's Pandacan depot. As such, there is no question that it was SJS which selected and engaged Galit as its employee. 2. WON SJS is an independent contractor  An independent contractor carries on an i ndependent business and undertakes the contract work on his own account, under his own responsibility, according to his own manner and method, and free from the control and direction of his employer or principal in all matters connected with the performance of the

work except as to the results thereof. . This embodies what has long been jurisprudentially recognized as the control test, as discussed above. In the instant case, SJS presented evidence to show that it had an independent business by paying business taxes and fees and that it was registered as an employer with the Social Security System. Moreover, there was no evidence to show that SJS and its employees were ever subject to the control of petitioner. On the contrary, as shown above, SJS possessed the right to control its employees' manner and means of performing their work , including herein respondent Galit. WORLD’S BEST GAS INC vs. VITAL Petitioner: WORLD'S BEST GAS, INC., Respondents: HENRY VITAL, JOINED BY HIS WIFE FLOSERFINA VITAL FACTS: Vital was one of the incorporators of WBGI, holding P500,000.00 worth of shares of stocks therein. As a separate business venture, Vital and his wife sourced Liquefied Petroleum Gas (LPG) from WBGI and distributed the same through ERJ Enterprises owned by them. As of respondents' last statement of account, their outstanding balance with WBGI for unpaid LPG amounted to P923,843.59 Vital was appointed as Internal Auditor and Personnel Manager and continued to serve as such until his mandatory retirement. Upon his retirement Vital's retirement benefits was computed at P82,500.00 by multiplying his P15,000.00 monthly pay by 5.5 years, which was the number of years he served as Internal Auditor and Personnel Manager.  After offsetting the P500,00 0.00 due from WBGI's acquisition of his shares of stocks against ERJ Enterprises' P923,843.59 outstanding balance to WBGI, Vital claimed that the unpaid salaries and separation pay due him amounted to P845,000.00 and P250,000.00 , respectively, leaving a net amount of P671,156.41 payable to him. WBGI rejected Vital's claim and contended that after offsetting, Vital actually owed it P369,156.19. Vital filed a complaint before the NLRC for non-payment of separation and retirement benefits, underpayment of salaries/wages and 13 thmonth pay, illegal reduction of salary and benefits, and damages. WBGI averred that the Labor Arbiter (LA) had no jurisdiction over the complaint because Vital is not an employee, but a mere incorporator and stockholder of WBGI, hence, no employer-employee relationship exists between them. LA dismissed the case for lack of jurisdiction RTC declared that Vital was an employee of WBGI and thereby, upheld his claim of P845,000.00 and P250,000.00 in unpaid salaries and separation pay. CA dismissed the appeal ISSUE: WON the CA erred in ruling upon Vital's claim of P845,000.00 and P250,000.00 in unpaid salaries and separation pay. HELD: It was alleged that RTC's adjudication of the first cause of action with regards to Vital's claim for P845,000.00 and P250,000.00 in unpaid salaries and separation pay was improper since the same is one which arose from Vital and WBGI's employer-employee relations, involving an amount

exceeding P5,000.00, hence, belonging to the jurisdiction of the labor arbiters pursuant to Article 217 of the Labor Code: (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive  jurisdiction to hear and decide, within thirty (30) calendar da ys after the submission of t he case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: xxx 6. Except claims for Employees' Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)  regardless of whether accompanied with a claim for reinstatement. Having no subject matter jurisdiction to resolve claims arising from employer-employee relations, the RTC's ruling on Vital's claim of his unpaid salaries and separation pay is, thus, null and void, and therefore, cannot perpetuate even if affirmed on appeal, rendering the CA's ratiocination that it "has the eventual authority to review the labor courts' decision on the matter" direly infirm. As a result, WBGI's petition is meritorious on this score. However, since the dismissal is grounded on lack of jurisdiction, then the same should be considered as a dismissal without prejudice. As such, Vital may re-file the same claim, including those related thereto (e.g. , moral and exemplary damages, and attorney's fees) before the proper labor tribunal. Contrary to its lack of jurisdiction over claims arising from employer-employee relations, the RTC has: (a) general jurisdiction to adjudicate on the P923,843.59 in arrearages payable to WBGI from ERJ Enterprises, which was admitted by Vital but not claimed by WBGI;30 and (b) special jurisdiction, as a special commercial court, to adjudicate on Vital's claim of P500,000.00 from WBGI's acquisition of his shares of stocks.31 Indeed, even acting as a special commercial court, the RTC's general jurisdiction to adjudicate on the first-mentioned claim is retained.