PART 2 CASE DIGEST

SAN MIGUEL CORPORATION v. PROSPERO ABALLA G.R. No. 149011 June 28, 2005 Ponente: CARPIO-MORALES, J.: FACTS: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose Cooperative (Sunflower) entered into a one-year Contract of Service and such contract is renewed on a monthly basis until terminated. Pursuant to this, respondent Prospero Aballa rendered services to SMC. After one year of service, Aballa filed a complaint before NLRC praying that they be declared as regular employees of SMC. On the other hand, SMC filed before the DOLE a Notice of Closure due to serious business losses. Hence, the labor arbiter dismissed the complaint and ruled in favor of SMC. Aballa then appealed before the NLRC. The NLRC dismissed the appeal finding that Sunflower is an independent contractor. On appeal, the Court of Appeals reversed NLRC·s decision on the ground that the agreement between SMC and Sunflower showed a clear intent to abstain from establishing an employeremployee relationship. ISSUE: Whether or not Aballa and other employees of Sunflower are employees of SMC? HELD: The test to determine the existence of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being subject to the control of the employer, except only as to the results of the work. In legitimate labor contracting, the law creates an employer-employee relationship for a limited purpose, to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor, only for the payment of the employees wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees. In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The Contract of Services between SMC and Sunflower shows that the parties clearly disavowed the existence of an employer-employee relationship between SMC and private respondents. The language of a contract is not, however, determinative of the parties· relationship; rather it is the totality of the facts and surrounding circumstances of the case. A party cannot dictate, by the mere expedient of a unilateral declaration in a contract, the character of its business, whether as labor-only contractor or job contractor, it being crucial that its character be measured in terms of and determined by the criteria set by statute. What appears is that Sunflower does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises and other materials to qualify it as an independent contractor. On the other hand, it is gathered that the lot, building, machineries and all other working tools utilized by Aballa et al. in carrying out their tasks were owned and provided by SMC. And from the job description provided by SMC itself, the work assigned to Aballa et al. was directly related to the aquaculture operations of SMC. As for janitorial and messengerial services, that they are considered directly related to the principal business of the employer has been jurisprudentially recognized. Furthermore, Sunflower did not carry on an independent

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business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, SMC, its apparent role having been merely to recruit persons to work for SMC. All the foregoing considerations affirm by more than substantial evidence the existence of an employer- employee relationship between SMC and Aballa. Since Aballa who were engaged in shrimp processing performed tasks usually necessary or desirable in the aquaculture business of SMC, they should be deemed regular employees of the latter and as such are entitled to all the benefits and rights appurtenant to regular employment. They should thus be awarded differential pay corresponding to the difference between the wages and benefits given them and those accorded SMC·s other regular employees.

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Philippines Bank of Communications vs. NLRC {G.R. No. L-66598, December 19, 1986 Facts: Petitioner Philippine Bank of Communications and the Corporate Executive Search Inc. (CESI) entered into a letter agreement dated January 1976 under which (CESI) undertook to provide "Tempo[rary] Services" to petitioner Consisting of the "temporary services" of eleven (11) messengers. The contract period is described as being "from January 1976—." The petitioner in truth undertook to pay a "daily service rate of P18, " on a per person basis. Attached to the letter agreement was a "List of Messengers assigned at Philippine Bank of Communications" which list included, as item No. 5 thereof, the name of private respondent Ricardo Orpiada. Ricardo Orpiada was thus assigned to work with the petitioner bank. As such, he rendered services to the bank, within the premises of the bank and alongside other people also rendering services to the bank. There was some question as to when Ricardo Orpiada commenced rendering services to the bank. As noted above, the letter agreement was dated January 1976. However, the position paper submitted by (CESI) to the National Labor Relations Commission stated that (CESI) hired Ricardo Orpiada on 25 June 1975 as a Tempo Service employee, and assigned him to work with the petitioner bank "as evidenced by the appointment memo issued to him on 25 June 1975. " Be that as it may, on or about October 1976, the petitioner requested (CESI) to withdraw Orpiada's assignment because, in the allegation of the bank, Orpiada's services "were no longer needed." On 29 October 1976, Orpiada instituted a complaint in the Department of Labor (now Ministry of Labor and Employment) against the petitioner for illegal dismissal and failure to pay the 13th month pay provided for in Presidential Decree No. 851. This complaint was docketed as Case No. R04-1010184-76-E. After investigation, the Office of the Regional Director, Regional Office No. IV of the Department of Labor, issued an order dismissing Orpiada's complaint for failure of Mr. Orpiada to show the existence of an employer-employee relationship between the bank and himself. Accordingly, on 2 April 1984, the bank filed the present petition for certiorari with this Court seeking to annul and set aside (a) the decision of respondent Labor Arbiter Dogelio dated 12 September 1977 in Labor Case No. RB-IV-1118-77 and (b) the decision of the NLRC promulgated on 29 December 1983 affirming with some modifications the decision of the Labor Arbiter. This Court granted a temporary restraining order on 11 April 1984. The main issue as litigated by the parties in this case relates to whether or not an employer-employee relationship existed between the petitioner bank and private respondent Ricardo Orpiada. The petitioner bank maintains that no employer-employee relationship was established between itself and Ricardo Orpiada and that Ricardo Orpiada was an employee of (CESI) and not of the bank. Issue: Whether or not Orpiada is an employee of the bank or the Agency? Decision: Turning to the power to control Orpiada's conduct, it should be noted immediately that Orpiada performed his sections within the bank's premises, and not within the office premises of (CESI) As such, Orpiada must have been subject to at least the same control and supervision that the bank exercises over any other person physically within its premises and rendering services to or for the bank, in other words, any employee or staff member of the bank. It seems unreasonable to suppose that the bank would have allowed Orpiada and the other persons assigned to the bank by CE SI to remain within the bank's premises and there render services to the bank, without subjecting them to a substantial measure of control and

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supervision, whether in respect of the manner in which they discharged their functions, or in respect of the end results of their functions or activities, or both. Under the general rule set out in the first and second paragraphs of Article 106, an employer who enters into a contract with a contractor for the performance of work for the employer, does not thereby create an employer-employes relationship between himself and the employees of the contractor. Thus, the employees of the contractor remain the contractor's employees and his alone. Nonetheless when a contractor fails to pay the wages of his employees in accordance with the Labor Code, the employer who contracted out the job to the contractor becomes jointly and severally liable with his contractor to the employees of the latter "to the extent of the work performed under the contract" as such employer were the employer of the contractor's employees. The law itself, in other words, establishes an employer-employee relationship between the employer and the job contractor's employees for a limited purpose, i.e., in order to ensure that the latter get paid the wages due to them. The definition of "labor-only" contracting in Rule VIII, Book III of the Implementing Rules must be read in conjunction with the definition of job contracting given in Section 8 of the same Rules. The undertaking given by CESI in favor of the bank was not the performance of a specific — job for instance, the carriage and delivery of documents and parcels to the addresses thereof. There appear to be many companies today which perform this discrete service, companies with their own personnel who pick up documents and packages from the offices of a client or customer, and who deliver such materials utilizing their own delivery vans or motorcycles to the addresses. In the present case, the undertaking of (CESI) was to provide its client-thebank-with a certain number of persons able to carry out the work of messengers. Such undertaking of CESI was complied with when the requisite number of persons were assigned or seconded to the petitioner bank. Orpiada utilized the premises and office equipment of the bank and not those of (CESI) Messengerial work-the delivery of documents to designated persons whether within or without the bank premises — is of course directly related to the day-to-day operations of the bank. Section 9(2) quoted above does not require for its applicability that the petitioner must be engaged in the delivery of items as a distinct and separate line of business. WHEREFORE, the petition for certiorari is DENIED and the decision promulgated on 29 December 1983 of the National Labor Relations Commission is AFFIRMED. The Temporary Restraining Order issued by this Court on 11 April 1984 is hereby lifted. Costs against petitioner. SO ORDERED.

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Tabas et al VS. California Manufacturing Company G.R. No. L-80680 January 26, 1989 Facts: Petitioners filed a petition in the NLRC for reinstatement and payment of various benefits against California Manufacturing Company. The respondent company then denied the existence of an employer-employee relationship between the company and the petitioners. Pursuant to a manpower supply agreement, it appears that the petitioners prior their involvement with California Manufacturing Company were employees of Livi Manpower service, an independent contractor, which assigned them to work as "promotional merchandisers." The agreement provides that: California "has no control or supervisions whatsoever over [Livi's] workers with respect to how they accomplish their work or perform [Californias] obligation" It was further expressly stipulated that the assignment of workers to California shall be on a "seasonal and contractual basis"; that "[c]ost of living allowance and the 10 legal holidays will be charged directly to [California] at cost "; and that "[p]ayroll for the preceeding [sic] week [shall] be delivered by [Livi] at [California's] premises." Issue: Whether the petitioners are California's or Livi's employees? Held: There is no doubt that in the case at bar, Livi performs "manpower services", meaning to say, it contracts out labor in favor of clients. We hold that it is one notwithstanding its vehement claims to the contrary, and notwithstanding the provision of the contract that it is "an independent contractor." The nature of one's business is not determined by self-serving appellations one attaches thereto but by the tests provided by statute and prevailing case law. The bare fact that Livi maintains a separate line of business does not extinguish the equal fact that it has provided California with workers to pursue the latter's own business. In this connection, we do not agree that the petitioners had been made to perform activities 'which are not directly related to the general business of manufacturing," California's purported "principal operation activity. " The petitioner's had been charged with "merchandizing [sic] promotion or sale of the products of [California] in the different sales outlets in Metro Manila including task and occational [sic] price tagging," an activity that is doubtless, an integral part of the manufacturing business. It is not, then, as if Livi had served as its (California's) promotions or sales arm or agent, or otherwise, rendered a piece of work it (California) could not have itself done; Livi, as a placement agency, had simply supplied it with the manpower necessary to carry out its (California's) merchandising activities, using its (California's) premises and equipment. Neither Livi nor California can therefore escape liability, that is, assuming one exists. Petition granted.

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Mafinco Trading Corporation vs. Hon Blas F. Ople in his Capacity as Secretary of Labor , The National Labor Relations Commission, Rodrigo Repomanta and Rey Moralde G.R. No. L 37790, March 25, 1976 Facts: Rodrigo Repomanta and Mafinco Trading Corp. sole distributor of Cosmos Soft drinks , executed a peddling Contract whereby Repomanta agreed to buy and sell “ Cosmos Soft drinks, Rey Moralde entered into a similar Contract the Contracts Provide that such were to remain in force for one year unless sooner terminated by either party upon 5 days notice to the other. Pursuant to said Mafinco terminated the Peddling Contract . Repomanta and Moralde filed a complaint with the NLRC . Mafinco filed a Motion to dismiss on the ground that the NLRC had no jurisdiction because Repomanta and Moralde were not its employees but were independent Contractor. The NLRC sustained the Motion and dismissed the Complaint on Appeal to the Secretary of Labor the decision was reversed. Ruling: A Contract whereby one engage to purchase and sell soft drinks on trucks supplied by manufacturer but providing that the other party (peddler) shall have the right to employ his own workers. Shall post a bond to protect the manufacturer against losses, shall be responsible for damages caused to third person, shall obtain the necessary licenses and permits and bear the expenses incurred in the sale of soft drinks is not a contract employment. Issue: Whether the work is part of the employer’s general business supplier of soft drinks. Ruling: A Contract whereby one engage to purchase and sell soft drinks on trucks supplied by manufacturer but providing that the other party (peddler) shall have the right to employ his own workers. Shall post a bond to protect the manufacturer against losses, shall be responsible for damages caused to third person, shall obtain the necessary licenses and permits and bear the expenses incurred in the sale of soft drinks is not a contract employment. Decision: In the Mafinco Trading the court explain that an independent employment and contractor is one who exercise independent employment and contractor to do a price of work according to his methods without being subject to control of his employer except as to the result of work.

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INSULAR LIFE ASSURANCE CO., LTD. vs. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO, G.R. No. 84484 November 15, 1989 FACTS : Petitioner entered contract with Basiao for insurance policies and annuities in accordance with the existing rules and regulations" of the Company; he would receive "compensation, in the form of commissions ... as provided in the Schedule of Commissions" of the contract to "constitute a part of the consideration of ... (said) agreement;" and the "rules in ... (the Company's) Rate Book and its Agent's Manual, as well as all its circulars ... and those which may from time to time be promulgated by it. Some four years later, in April 1972, the parties entered into another contract — an Agency Manager's Contract — and to implement his end of it Basiao organized an agency or office to which he gave the name M. Basiao and Associates, while concurrently fulfilling his commitments under the first contract with the Company. In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seeking a reconsideration, Basiao sued the Company in a civil action and this, he was later to claim, prompted the latter to terminate also his engagement under the first contract and to stop payment of his commissions starting April 1, 1980. Basiao thereafter filed with the then Ministry of Labor a complaint against the Company and its president. Without contesting the termination of the first contract, the complaint sought to recover commissions allegedly unpaid there under, plus attorney's fees. The respondents disputed the Ministry's jurisdiction over Basiao's claim, asserting that he was not the Company's employee, but an independent contractor and that the Company had no obligation to him for unpaid commissions under the terms and conditions of his contract. The Labor Arbiter to whom the case was assigned found for Basiao. He ruled that the underwriting agreement had established an employer-employee relationship between him and the Company, and this conferred jurisdiction on the Ministry of Labor to adjudicate his claim. Said official's decision directed payment of his unpaid commissions "... equivalent to the balance of the first year's premium remaining unpaid, at the time of his termination, of all the insurance policies solicited by ... (him) in favor of the respondent company ..." plus 10% attorney's fees. This decision was, on appeal by the Company, affirmed by the National Labor Relations Commission. Hence, the present petition for certiorari and prohibition ISSUE: Whether, as Basiao asserts, he had become the Company's employee by virtue of the contract invoked by him, thereby placing his claim for unpaid commissions within the original and exclusive jurisdiction of the Labor Arbiter under the provisions of Section 217 of the Labor Code, or, contrarily, as the Company would have it, that under said contract Basiao's status was that of an independent contractor whose claim was thus cognizable, not by the Labor Arbiter in a labor case, but by the regular courts in an ordinary civil action. HELD: The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of, and adjudicating, said claim, being without jurisdiction to do so, as did the respondent NLRC in affirming the Arbiter's decision. This conclusion renders it unnecessary and premature to consider Basiao's claim for commissions on its merits.

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WHEREFORE, the appealed Resolution of the National Labor Relations Commission is set aside, and that complaint of private respondent Melecio T. Basiao in RAB Case No. VI0010-83 is dismissed. No pronouncement as to costs.

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G.R. No. 80039 April 18, 1989 ERNESTO M. APODACA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, JOSE M. MIRASOL and INTRANS PHILS., INC., respondents. FACTS : Petitioner was employed in respondent corporation. On August 28, 1985, respondent Jose M. Mirasol persuaded petitioner to subscribe to 1,500 shares of respondent corporation at P100.00 per share or a total of P150,000.00. He made an initial payment of P37,500.00. On September 1, 1975, petitioner was appointed President and General Manager of the respondent corporation. However, on January 2, 1986, he resigned. On December 19, 1986, petitioner instituted with the NLRC a complaint against private respondents for the payment of his unpaid wages, his cost of living allowance, the balance of his gasoline and representation expenses and his bonus compensation for 1986. Petitioner and private respondents submitted their position papers to the labor arbiter. Private respondents admitted that there is due to petitioner the amount of P17,060.07 but this was applied to the unpaid balance of his subscription in the amount of P95,439.93. Petitioner questioned the setoff alleging that there was no call or notice for the payment of the unpaid subscription and that, accordingly, the alleged obligation is not enforceable. In a decision dated April 28, 1987, the labor arbiter sustained the claim of petitioner for P17,060.07 on the ground that the employer has no right to withhold payment of wages already earned under Article 103 of the Labor Code. Upon the appeal of the private respondents to public respondent NLRC, the decision of the labor arbiter was reversed in a decision dated September 18, 1987. The NLRC held that a stockholder who fails to pay his unpaid subscription on call becomes a debtor of the corporation and that the set-off of said obligation against the wages and others due to petitioner is not contrary to law, morals and public policy. ISSUE : Does the National Labor Relations Commission (NLRC) have jurisdiction to resolve a claim for non-payment of stock subscriptions to a corporation? Assuming that it has, can an obligation arising therefrom be offset against a money claim of an employee against the employer? HELD : Firstly, the NLRC has no jurisdiction to determine such intra-corporate dispute between the stockholder and the corporation as in the matter of unpaid subscriptions. This controversy is within the exclusive jurisdiction of the Securities and Exchange Commission. 1 Secondly, assuming arguendo that the NLRC may exercise jurisdiction over the said subject matter under the circumstances of this case, the unpaid subscriptions are not due and payable until a call is made by the corporation for payment. 2 Private respondents have not presented a resolution of the board of directors of respondent corporation calling for the payment of the unpaid subscriptions. It does not even appear that a notice of such call has been sent to petitioner by the respondent corporation. What the records show is that the respondent corporation deducted the amount due to petitioner from the amount receivable from him for the unpaid subscriptions. 3 No doubt such set-off was without lawful basis, if not premature. As there was no notice or call for the payment of unpaid subscriptions, the same is not yet due and payable.

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Lastly, assuming further that there was a call for payment of the unpaid subscription, the NLRC cannot validly set it off against the wages and other benefits due petitioner. Article 113 of the Labor Code allows such a deduction from the wages of the employees by the employer, only in three instances, to wit: ART. 113. Wage Deduction. — No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except: (a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; (b) For union dues, in cases where the right of the worker or his union to checkoff has been recognized by the employer or authorized in writing by the individual worker concerned; and (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor. 4 WHEREFORE, the petition is GRANTED and the questioned decision of the NLRC dated September 18, 1987 is hereby set aside and another judgment is hereby rendered ordering private respondents to pay petitioner the amount of P17,060.07 plus legal interest computed from the time of the filing of the complaint on December 19, 1986, with costs against private respondents. An obligation arising from non-payment of stock subscriptions to a corporation cannot be offset against a money claim of an EE against an ER

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Metrobank Union vs NLRC G.R. No. 102636 VITUG, J.:p Facts: Metrobank entered into a CBA with Petitioner, granting a P900 increase in wages. Subsequently, a law was passed increasing the minimum wage. Metrobank classified employees into those receiving less than 100 per day and those receiving more. Those receiving more were not covered by the implementation of the new law but only the increase as agreed upon in the CBA. Petitioners argue that the method of implementation created a wage distortion within the employees of Metrobank because the differences in the salaries of the employee classifications were substantially reduced. Issue: Whether or not there was wage distortion? Held: There was wage distortion. Ratio Decidendi: Wage Distortion means a situation where an increase in prescribed wage rates results in the elimination or severe contradiction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.

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National Federation of Labor vs. NLRC G.R. No. 103586 July 21, 1994 THIRD DIVISION, FELICIANO, J.: Facts: Between 1 November 1983 and 1 November 1984, Wage Orders Nos. 3, 4, 5 and 6 were promulgated increasing the statutory minimum wages of workers with differing increases being specified for agricultural plantation and non-agricultural workers. As a result of the implementation of such wage orders and the increases brought about by the effectivity of the CBA, there was no more significant differential between regular and non-regular/newly regularized employees. Meantime, while the above wage developments were unfolding, the Company experienced a work output slow down. The Company directed some 205 workers to explain the reduction in their work output. The workers failed to comply and they were accordingly issued notices of dismissal by the Company. As a response to its decreasing productivity levels, the Company suspended operations on 16 August 1984. Operations were resumed on 14 September 1984; the Company, however, refused to take back the 205 dismissed employees. Petitioner Union then went on strike alleging a lock-out on the part of the Company and demanding rectification of the wage distortion. The case was certified by the Secretary of Labor to the National Labor Relations Commission ("NLRC") for compulsory conciliation. On 19 June 1985, the Union and the Company reached an agreement with respect to the lockout issue. The agreement, which was approved by the NLRC En Banc, granted the 205 employees "financial assistance" equivalent to thirty (30) days' separation pay. This left unresolved only the wage distortion issue. On 11 November 1987, the NLRC En Banc rendered a decision which in effect found the existence of wage distortion and required the Company to pay a P1.00 wage increase effective 1 May 1984: On motion for partial reconsideration filed by the Company, the above quoted portion of the NLRC En Banc's decision was reconsidered and set aside by the NLRC Fifth Division. 3 The Fifth Division of the NLRC in effect found that while a wage distortion did exist commencing 16 June 1984, the distortion persisted only for a total of fifteen (15) days and accordingly required private respondent company to pay "a wage increase of P2.00 per day to all regular workers effective June 16, 1984 up to June 30, 1984 or a total of fifteen (15) days." 4 The rest of the decision of 11 November 1987 was left untouched. Issue: Whether a wage distortion occur due to the implementation of Wage Orders? Held: We believe and so hold that the re-establishment of a significant gap or differential between regular employees and casual employees by operation of the CBA was more than substantial compliance with the requirements of the several Wage Orders (and of Article 124 of the Labor

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Code). That this re-establishment of a significant differential was the result of collective bargaining negotiations, rather than of a special grievance procedure, is not a legal basis for ignoring it. The NLRC En Banc was in serious error when it disregarded the differential of P3.60 which had been restored by 1 July 1985 upon the ground that such differential "represent[ed] negotiated wage increase[s] which should not be considered covered and in compliance with the Wage Orders." 11 The Wage Orders referred to above had provided for the crediting of increases in wages or allowances granted or paid by employers within a specified time against the statutorily prescribed increases in minimum wages. In relation, NLRC in its Resolution dated 11 November 1987, provided some elaboration of the notion of wage distortion: As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. 9 (Emphasis supplied) From the above quoted material, it will be seen that the concept of wage distortion assumes an existing grouping or classification of employees which establishes distinctions among such employees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the existing classes of employees. The wage distortion anticipated in Wage Orders Nos. 3, 4, 5 and 6 was a "distortion" (or "compression") which ensued from the impact of those Wage Orders upon the different wage rates of the several classes of employees. Thus distortion ensued where the result of implementation of one or another of the several Wage Orders was the total elimination or the severe reduction of the differential or gap existing between the wage rates of the differing classes of employees. Decision: We conclude that petitioner NFL has not shown any grave abuse of discretion amounting to lack of excess of jurisdiction on the part of the NLRC in rendering its decision (through its Fifth Division) dated 16 December 1991. WHEREFORE, the Petition for Certiorari is hereby DISMISSED for lack of merit. No pronouncement as to costs. SO ORDERED.

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G.R. No. 108556 November 19, 1996 MANILA MANDARIN EMPLOYEES UNION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, Second Division, and the MANILA MANDARIN HOTEL, respondents. ISSUE: On October 30, 1986, the Manila Mandarin Employees Union (hereafter UNION), as exclusive bargaining agent of the rank-and-file employees of the Manila Mandarin Hotel, Inc. (hereafter MANDARIN), filed with the NLRC Arbitration Branch a complaint in its members' behalf to compel MANDARIN to pay the salary differentials of the individual employees concerned because of wage distortions in their salary structure allegedly created by the upward revisions of the minimum wage pursuant to various Presidential Decrees and Wage Orders, and the failure of MANDARIN to implement the corresponding increases in the basic salary rate of newly-hired employees. The relevant Presidential Decrees and Wage Orders were invoked during the said trial. On January 15, 1987, the UNION filed its Position Paper amplifying the allegations of its complaint and setting forth the legal bases of its demands against MANDARIN; and on March 25, 1987, it filed an Amended Complaint presenting an additional claim for payment of salary differentials to the union members affected, allegedly resulting from underpayment of wages. The Labor Arbiter eventually ruled in favor of the UNION, however it was later reversed by the Commission, Hence this petition.

ISSUE: WHETHER OR NOT WAGE DISTORTION EXIST. HELD: There was no wage distortion that existed. Wage distortion is a situation where an increase in prescribed wage rates results in the elimination or severe contraction of Intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.A review of the records convinces this Court that respondent NLRC committed no grave abuse of discretion in holding that no wage distortion was demonstrated by the UNION.

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CAGAYAN SUGAR MILLING COMPANY, petitioner vs. SECRETARY OF LABOR AND EMPLOYMENT, DIRECTOR RICARDO S. MARTINEZ, SR., and CARSUMCO EMPLOYEES UNION, respondents. G.R. No. 128399 January 15, 1998 PUNO, J.: Facts: On September 12 and 13, 1994, labor inspectors from the DOLE Regional Office examined the books of petitioner to determine its compliance with the wage order. They found that petitioner violated the wage order as it did not implement an across the board increase in the salary of its employees. At the hearing at the DOLE Regional Office for the alleged violation, petitioner maintained that it complied with Wage Order No. RO2-02 as it paid the mandated increase in the minimum wage. In an Order dated December 16, 1994, public respondent Regional Director Ricardo S. Martinez, Sr. ruled that petitioner violated Wage Order RO2-02 by failing to implement an across the board increase in the salary of its employees. He ordered petitioner to pay the deficiency in the salary of its employees in the total amount of P555,133.41. On January 6, 1995, petitioner appealed to public respondent Labor Secretary Leonardo A. Quisumbing. On the same date, the Regional Wage Board issued Wage Order No. RO2-02-A, 2 amending the earlier wage order, On October 8, 1996, the Secretary of Labor dismissed petitioner's appeal and affirmed the Order of Regional Director Martinez, Sr. Petitioner's motion for reconsideration was likewise denied. 3 On February 12, 1997, private respondent CARSUMCO EMPLOYEES UNION moved for execution of the December 16, 1994 Order. Regional Director Martinet, Sr. granted the motion and issued the writ of execution. On March 4, 1997, petitioner moved for reconsideration to set aside the writ of execution. On March 5, the DOLE regional sheriff served on petitioner a notice of garnishment of its account with the Far East Bank and Trust Company. On March 10, the sheriff seized petitioner's dump truck and scheduled its public sale on March 20, 1997. Hence, this petition, with a prayer for the issuance of a temporary restraining order (TRO). On April 3, 1997, this Court issued a TRO enjoining respondents from enforcing the writ of execution. 4 On July 16, upon petitioner's motion, we amended the TRO by also enjoining respondents from enforcing the Decision of the Secretary of Labor and conducting further proceedings until further orders from this Court. 5 In the case at bar, petitioner contends that: Issue: WAGE ORDER RO2-02 IS NULL AND VOID FOR HAVING BEEN ISSUED IN VIOLATION OF

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THE PROCEDURE PROVIDED BY LAW AND IN VIOLATION OF PETITIONER'S RIGHT TO DUE PROCESS OF LAW. Art. 123. Wage Order. — Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts, and, based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage Order should be issued. Any such Wage Order shall take effect after (15) days from its complete publication in at least one (1) newspaper of general circulation in the region. The record shows that there was no prior public consultation or hearings and newspaper publication insofar as Wage Order No. RO2-02-A is concerned. In fact, these allegations were not denied by public respondents in their Comment. Public respondents' position is that there was no need to comply with the legal requirements of consultation and newspaper publication as Wage order No. RO2-02-A merely clarified the ambiguous provision of the original wage order. Public respondents insist that despite the wording of Wage Order RO2-02 providing for a statutory increase in minimum wage, the real intention of the Regional Board was to provide for an across the board increase. Hence, they urge that petitioner is liable for merely providing an increase in the statutory minimum wage rates of its employees. The contention is absurd. Petitioner clearly complied with Wage Order RO2-02 which provided for an increase in statutory minimum wage rates for employees in Region II. It is not just to expect petitioner to interpret Wage RO2-02 to mean that it granted an across the board increase as such interpretation is not sustained by its text. Indeed, the Regional Wage Board had to amend Wage Order RO2-02 to clarify this alleged intent. In sum, we hold that RO2-02-A is invalid for lack of public consultations and hearings and nonpublication in a newspaper of general circulation, in violation of Article 123 of the Labor Code. We likewise find that public respondent Secretary of Labor committed grave abuse of discretion in upholding the findings of Regional Director Ricardo S. Martinez, Sr. that petitioner violated Wage Order RO2-02. Held: the petition is GRANTED. The Decision of the Secretary of Labor, dated October 8, 1996, is set aside for lack of merit. SO ORDERED.

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ECOP vs. NWPC (G.R. No. 96169 September 24, 1991) Facts: On October 15, 1990, the Regional Board of the National Capital Region issued Wage Order No. NCR-01, increasing the minimum wage by P17.00 daily in the National Capital Region. The Trade Union Congress of the Philippines (TUCP) moved for reconsideration; so did the Personnel Management Association of the Philippines (PMAP). ECOP opposed. On October 23, 1990, the Board issued Wage Order No. NCR-01-A amending Wage Order No. NCR-01, as follows: Section 1. Upon the effectivity of this Wage Order, all workers and employees in the private sector in the National Capital Region already receiving wages above the statutory minimum wage rates up to one hundred and twenty-five pesos (P125.00) per day shall also receive an increase of seventeen pesos (P17.00) per day. ECOP appealed to the National Wages and Productivity Commission. On November 6, 1990, the Commission promulgated an Order, dismissing the appeal for lack of merit. On November 14, 1990, the Commission denied reconsideration. Issue: The Employers Confederation of the Philippines (ECOP) is questioning the validity of Wage Order No. NCR-01-A dated October 23, 1990 of the Regional Tripartite Wages and Productivity Board, National Capital Region, promulgated pursuant to the authority of Republic Act No. 6727. Held: The Commission noted that the increasing trend is toward the salary-cap method, which has reduced disputes arising from wage distortions (brought about, apparently, by the floor-wage method). Precisely, Republic Act No. 6727 was intended to rationalize wages, first, by providing for full-time boards to police wages round-the-clock, and second, by giving the boards enough powers to achieve this objective. The Court is of the opinion that Congress meant the boards to be creative in resolving the annual question of wages without labor and management knocking on the legislature's door at every turn. WHEREFORE, premises considered, the petition is DENIED. No pronouncement as to costs.

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MEYCAUAYAN COLLEGE, petitioner, vs. HONORABLE FRANKLIN M. DRILON, in his capacity as Secretary of the Department of Labor and Employment and MEYCAUYAN COLLEGE FACULTY AND PERSONNEL ASSOCIATION (MCFPA), respondents. FACTS: Petitioner is a private educational institution duly organized and existing under Philippine laws, and operating in Meycauayan, Bulacan. On January 16, 1987, its board of trustees recognized the Meycauayan College Faculty and Personnel Association as the employees union in the Meycauayan College. Prior to said recognition or on July 17, 1983, petitioner and the union, then headed by Mrs. Teresita V. Lim, entered into a collective bargaining agreement for 1983-1986. Article IV thereof provides: SALARY SCALE IV. 4.0 ANG ANTAS NG PAGPAPASUWELDO SA MGA GURO SA MATAAS NG PAARALAN AY UMAALINSUNOD SA PARAAN NG PAGRARANGGONG KALAKIP NITO BILANG "TAKDA" AT AYON PA RIN SA SUMUSUNOD NA HALAGA NG PAGPAPASUWELDO (IPATUTUPAD SA AÑO-ESCOLAR 19831986): PAGSUBOK A (1-3 TAON) P51.50 KLASE 1 (4-5 TAON) P52.00 (6-8 TAON) P53.00 KLASE II (9-12 TAON) P54.00 KLASE III (13-14 TAON) P57.00 KLASE IV (15-17 TAON) P60.00 KLASE V (18-21 TAON) P63.00 (22 PATAAS) P70.00 When the collective bargaining agreement was entered into, the following presidential decrees were in effect: (a) P.D No. 1389 dated May 29, 1978 adjusting the existing statutory minimum wages; (b) P.D. No. 1713 dated August 18, 1980 providing for an increase in the minimum daily wage rates and for additional mandatory living allowances, and ;

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(c) P.D. No. 1751 dated May 14, 1980 increasing the statutory daily minimum wage at all levels by P4.00 after integrating the mandatory emergency living allowance under P.D. Nos. 525 and 1123 into the basic pay of all covered workers. Wage Order No. 2 increasing the mandatory basic minimum wage and living allowance was also issued on July 6, 1983 just before the collective bargaining agreement herein involved was entered into. During the lifetime of the collective bargaining agreement, the following were issued: (a) Wage Order No. 3 dated November 7, 1983 increasing the minimum daily living allowance in the private sector; (b) Wage Order No. 4 dated May 1, 1984 integrating as of said date the emergency cost of living allowances under P.D. Nos. 1614, 1634 and 1713 into the basic pay of covered workers in the private sector; (c) Wage Order No. 5 dated June 11, 1984 increasing the cost of living allowance of workers in the private sector whose basic salary or wage is not more than P1,800 a month; and (d) Wage Order No. 6 dated October 26, 1984 increasing the daily living allowances. The union admits herein that its members were paid all these increases in pay mandated by law. It appears, however, that in 1987, shortly after union president Mrs. Teresita V. Lim, who held the managerial position of registrar of the college, had turned over the presidency of the union to Mrs. Fe Villarico, the latter unintentionally got a copy of the collective bargaining agreement and discovered that Article IV thereof had not been implemented by the petitioner. Consequently, on March 27, 1987, the union filed with the Department of Labor and Employment, Regional Office No. III in San Fernando, Pampanga, a notice of strike on the ground of unfair labor practice alleging therein violation of the collective bargaining agreement particularly the provisions of Article IV thereof on salary scale. ISSUE: 1. Whether increases in employees' salaries resulting from the implementation of presidential decrees and wage orders, which are over and above the agreed salary scale contracted for between the employer and the employees in a collective bargaining agreement, preclude the employees from claiming the difference between their old salaries and those provided for under said salary scale. RULING: "Non-compliance with the mandate of a standards law or decree may give rise to an ordinary action for recovery while violation of a collective bargaining agreement may even give rise to a criminal action for unfair labor practice. And while the relief sought for violation of a standards law or decree is primarily for restitution of (an) unpaid benefits, the relief sought for violating a CBA is ordinarily for compliance and desistance. Moreover, there is no provision in the aforecited Presidential Decrees providing that compliance thereto is sufficient compliance with a provision of a collective bargaining agreement and vice-versa." The dispositive portion of the Secretary's order of September 9, 1987 states:

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WHEREFORE, the Management of Meycauayan College is hereby ordered to: 1) Strictly effect the payment of salaries of the union members in accordance with the provisions of the collective bargaining agreement; 2) Pay the covered union members salary differential computed by subtracting the salary actually paid and received by them per period provided in the collective bargaining agreement for school years 1983-1984; 1984-1985 and 1985-1986 including the differential for the 13th month pay for the same period. 5 The petition has no merit. As correctly ruled by public respondent, a collective bargaining agreement is a contractual obligation. It is distinct from an obligation imposed by law. The terms and conditions of a collective bargaining contract constitute the law between the parties. Beneficiaries thereof are therefore, by right, entitled to the fulfillment of the obligation prescribed therein. Consequently, to deny binding force to the collective bargaining agreement would place a premium on a refusal by a party thereto to comply with the terms of the agreement. Such refusal would constitute an unfair labor practice. Nevertheless, as the key to the interpretation of contracts, including collective bargaining agreements, is the intention of the parties, we examined the record and found the undisputed allegation of private respondent that the collective bargaining agreement herein involved was entered into by the parties to improve the plight of the teachers by increasing their salary. The parties increased the teachers' salary or rate per period, by drafting a salary scale "based on the length of service" of the teachers and eventually came up with Article IV aforequoted. From this unrebutted allegation, it is clear that the parties wanted to attain one goal — increase the salaries of the teachers on the basis of their length of service. Hence, it is immaterial that the means by which said goal is achieved is through the alteration of the salary scale. On the issue of prescription, Article 291 (now Art. 290) of the Labor Code herein invoked by petitioner, provides: Offenses. — Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years. All unfair labor practices arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair labor practice; otherwise, they shall be forever barred. The one-year prescriptive period is inapplicable in this case because of peculiar factual circumstances which petitioner has not denied. Although the collective bargaining agreement covers school years 1983 to 1986, a copy of the agreement was only made available to the union in 1987. Immediately thereafter, the union sought its implementation. The union members might have been aware of the existence of the collective bargaining agreement but that fact that their president was actually a management employee being petitioner's registrar, they must have been deterred from demanding its implementation earlier. Hence, to apply the provisions of Article 290 (Art. 291) would be unfair and prejudicial to the union members particularly those who have served petitioner for a number of years who stand to benefit most from the salary scale.

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Article 264(g), now Article 263(g) of the Labor Code is broad enough to give the Secretary of Labor the power to take jurisdiction over what appears at first blush to be an ordinary money claim. Claims for pay differentials may have that character but, as earlier stated, if they arise out of a violation of a collective bargaining agreement, they assume the character of an unfair labor practice and are, therefore, well within the ambit of the jurisdiction of the Secretary of Labor to decide.the decision of the Secretary of Labor is hereby AFFIRMED and the temporary restraining order of February 15,1989 is LIFTED. This decision is immediately executory. Costs against the petitioner.

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G.R. No. 982767 February 15, 1995 COCOFED (Kalamansig) and/or CRISPIN ROSETE, petitioner, vs. HON. CRESENCIANO B. TRAJANO, Undersecretary of the Department of Labor and Employment and HON. MELENCIO Q. BALANAG, Director IV, DOLE, Regional XII, Cotabato City, respondents. Facts: Philippine Coconut Producers Federation operates petitioner COCOFED (Kalamansig), a coconut plantation utilized as a demonstration farm for replanting and/or training area for coconut farmers, located in Kalamansig, Sultan Kudarat. On November 15, 1988, a complaint inspection was conducted by the Department of Labor and Employment, Region XII, Cotabato City in response to complaints filed by two of petitioner's employees, Alex Edicto and Delia Pahuwayan. The inspection revealed that petitioner was guilty of underpayment of wages, emergency cost of living allowance (ECOLA) and 13th month pay. Accordingly, notice of inspection results was issued: requiring petitioner to effect restitution or correction within five (5) days from notice. Summary Petitioner submitted its position paper claiming that it should be classified as an establishment with less than 30 employees and with a paid-up capital of P500,000.00 or less as evidenced by the assessment of the municipal treasurer. Moreover, complainants worked for less than eight hours, a minimum of four and maximum of six. . . . A three (3) year actual payrolls from March 1985 to February 1989 showing the daily actual payment made by the respondent to involved workers are substantial evidence against the mere memorandum issued by the respondents on the matter. Further, such payrolls submitted by respondents are not mere summaries of daily efforts of workers but these are daily records showing workers actual daily rate. Issue: Whether or not the petitioner was justified in paying an amount less than the statutory minimum wage. Held: Petitioner would have us overturn the factual finding of public respondents that its employees are daily paid workers. This we are unable to do for the payrolls submitted by it support the latters' position. Findings of administrative agencies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but finality. Moreover, there is absolutely nothing in the records which show that petitioner's employees worked for less than eight hours. Finally, there would have been no need for petitioner to make an offer increasing the wage to P45.00 per day if complainants were indeed piece rate workers, as it claimed and if their wages were not underpaid, as found by public respondents. WHEREFORE, the petition is DISMISSED

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G.R. No. 82849 August 2, 1989 CEBU OXYGEN & ACETYLENE CO., INC. (COACO) petitioner, vs. SECRETARY FRANKLIN M. DRILON OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, ASSISTANT REGIONAL DIRECTOR CANDIDO CUMBA OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7 AND CEBU OXYGEN-ACETYLENE & CENTRAL VISAYAS EMPLOYEES ASSOCIATION (COACVEA) respondents.. GANCAYCO, J.; FACTS: Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central Visayas Employees Association (COAVEA) entered into a collective bargaining agreement (CBA) covering the years 1986 to 1988. 1) For the first year which will be paid on January 14, 1986 — P200 to each covered employee. 2) For the second year which will be paid on January 16, 1987-P 200 to each covered employee. 3) 3) For the third year which will be paid on January 16, 1988 — P300 to each covered employee. On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, in sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary wage increases negotiated under a collective bargaining agreement against such wage increases mandated by Republic Act No. 6640. On February 22, 1988, a Labor and Employment Development Officer, pursuant to Inspection Authority No. 058-88, commenced a routine inspection of petitioner's establishment. Upon completion of the inspection on March 10, 1988, and based on payrolls and other records, he found that petitioner committed violations of the law as follows: 1. Under payment of Basic Wage per R.A. No. 6640 covering the period of two (2) months representing 208 employees who are not receiving wages above P100/day prior to the effectivity of R.A. No. 6640 in the aggregate amount of EIGHTY THREE THOUSAND AND TWO HUNDRED PESOS (P83,200.00); and 2. Under payment of 13th month pay for the year 1987, representing 208 employees who are not receiving wages above P 100/day prior to the effectivity of R.A. No. 6640 in the aggregate amount of FORTY EIGHT THOUSAND AND FORTY EIGHT PESOS (P48,048.00). ISSUE: The principal issue raised in this petition is whether or not an Implementing Order of the Secretary of Labor and Employment (DOLE) can provide for a prohibition not contemplated by the law it seeks to implement. HELD:

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As to the issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which prohibits the employer from crediting the anniversary wage increases provided in collective bargaining agreements, it is a fundamental rule that implementing rules cannot add or detract from the provisions of law it is designed to implement. The provisions of Republic Act No. 6640, do not prohibit the crediting of CBA anniversary wage increases for purposes of compliance with Republic Act No. 6640. The implementing rules cannot provide for such a prohibition not contemplated by the law. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. The law itself cannot be expanded by such regulations. An administrative agency cannot amend an act of Congress. 3 Thus petitioner's contention that the salary increases granted by it pursuant to the existing CBA including anniversary wage increases should be considered in determining compliance with the wage increase mandated by Republic Act No. 6640, is correct. However, the amount that should only be credited to petitioner is the wage increase for 1987 under the CBA when the law took effect. The wage increase for 1986 had already accrued in favor of the employees even before the said law was enacted. WHEREFORE, the petition is hereby GRANTED. Section 8 of the rules implementing Republic 6640, is hereby declared null and void in so far as it excludes the anniversary wage increases negotiated under collective bargaining agreements from being credited to the wage increase provided for under Republic Act No. 6440. This decision is immediately executory.

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ODIN SECURITY AGENCY vs. HON. DIONISIO C. DE LA SERNA, G.R. No. 87439 February 21, 1990 GRIÑO-AQUINO, J.: FACTS: On July 8, 1986, a complaint was filed by Sergio Apilado and fifty-five (55) others charging the petitioner Odin Security Agency (hereafter "OSA"), underpayment of wages, illegal deductions, non-payment of night shift differential, overtime pay, premium pay for holiday work, rest days and Sundays, service incentive leaves, vacation and sick leaves, and 13th-month pay. When conciliation efforts failed, the parties were required to submit their position papers. Private respondents alleged in their position paper that their latest monthly salary was P1,600; that from this amount, petitioner deducted P100 as administrative cost and P20 as bond; that they were not paid their premium pay and overtime pay for working on the eleven (11) legal holidays per year; and, that since private respondents were relieved or constructively dismissed, they must also be paid backwages. Petitioner, on the other hand, contended that on July 21, 1986, some 48 security guards threatened mass action against it. Alarmed by a possible abandonment of post by the guards and mindful of its contractual obligations to its clients/principals, petitioner relieved and reassigned the complaining guards to other posts in Metro Manila. Those relieved were ordered to report to the agency's main office for reassignment. Only few complied, so those who failed to comply were placed on "AWOL" status. Petitioner claimed it complied with the Labor Code provisions, and in support thereof, it submitted the "Quitclaim and Waiver" of thirty-four (34) complainants. It further alleged that complainants who rendered over-time work as shown by their time sheets were paid accordingly; that service incentive leaves not availed of, night shift differential, rest days, and holidays were paid in cash. Earlier, on October 21, 1986, seventeen (17) complainants repudiated their quitclaim and waiver. They alleged that management pressured them to sign documents which they were not allowed to read and that if such waiver existed, they did not have any intention of waiving their rights under the law. Petitioner in its reply argued that complainants were estopped from denying their quitclaims on the ground of equity; that being high school graduates, complainants fully understood the document they signed; and that complainant's allegation of coercion or threat was a mere afterthought. Later, six (6) of the seventeen (17) complainants who repudiated their quitclaims again executed quitclaims and waivers. ISSUE: Whether or not petitioner was denied due process? HELD: The petition has no merit. The petitioner was not denied due process for several hearings were in fact conducted by the hearing officer of the Regional Office of the DOLE and the parties submitted position papers upon which the Regional Director based his decision in the case. There is abundant jurisprudence to the effect that the requirements of due process are satisfied when the parties are given an opportunity to submit position papers Parel, 156 SCRA 768; Adamson & Adamson,

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Inc. vs. Amores, 152 SCRA 237). Since petitioner herein participated in the hearings, submitted a position paper, and filed a motion for reconsideration of the March 23, 1988 decision of the Labor Undersecretary, it was not denied due process. Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty. ... Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned. (p. 5, Decision.) WHEREFORE, the petition is dismissed and the orders dated March 23, 1988 and March 13, 1989 of the Undersecretary of Labor are hereby affirmed. The temporary restraining order earlier issued by this Court is lifted. No costs.

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URBANES VS. SEC OF LABOR FACTS: Petitioner Placido O. Urbanes, Jr., doing business under the name and style of Catalina Security Agency, entered into an agreement1 to provide security services to respondent Social Security System (SSS). petitioner, by letter of May 16, 1994, requested the SSS for the upward adjustment of their contract rate in view of Wage Order No. NCR-03 which was issued by the Regional Tripartite Wages and Productivity Board-NCR pursuant to Republic Act 6727 otherwise known as the Wage Rationalization Act On June 24, 1994, petitioner pulled out his agency’s services from the premises of the SSS and another security agency, Jaguar, took over. On June 29, 1994, petitioner filed a complaint with the DOLE-NCR against the SSS seeking the implementation of Wage Order No. NCR-03. In its position paper,7 the SSS prayed for the dismissal of the complaint on the ground that petitioner is not the real party in interest and has no legal capacity to file the same. In any event, it argued that if it had any obligation, it was to the security guards. The SSS moved to reconsider the September 16, 1994 Order of the Regional Director, praying that the computation be revised. By Order of December 9, 1994, the Regional Director modified his September 16, 1994 Order by reducing the amount payable by the SSS to petitioner. The Secretary of Labor, by Order of June 22, 1995, set aside the order of the Regional Director and remanded the records of the case "for recomputation of the wage differentials using P 5,281.00 as the basis of the wage adjustment." And the Secretary held petitioner’s security agency "JOINTLY AND SEVERALLY liable for wage differentials, the amount of which should be paid DIRECTLY to the security guards concerned." Petitioner’s Motion for Reconsideration of the DOLE Secretary’s Order of June 22, 1995 having been denied by Order of October 10, 1995, the present petition was filed, petitioner contending that the DOLE Secretary committed grave abuse of discretion Petitioner thus contends that as the appeal of SSS was filed with the wrong forum, it should have been dismissed. The SSS, on the other hand, contends that Article 128, not Article 129, is applicable to the case. Article 128 provides: ISSUE: Whether or not NLRC has jurisdiction over the said case. HELD:

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We agree with the respondent that the RTC has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists.

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ZIALCITA, et al. VS. PAL Case No. RO4-3-3398-76, February 20, 1977 (Office of the President Decision FACTS: Complainant Zialcita, an international flight stewardess of respondent, was discharge from the service on account of her marriage. In separating complainant Zialcita, respondent Philippine Air Lines invoked its policy or regulation as follows: “D. Flight Attendants.- Flight attendant applicant must be single. Flight attendants will be automatically separated from employment in the event they subsequently get married.. Which is allegedly in conformity with the following provision of law: “Art. 132. Facilities for women. – The Secretary of Labor shall establish standards that will insure the safety and health of women employees. In appropriate cases, he shall be regulations require any employer to xxx: “(d) determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like.” On the other hand, complainant questioned her termination on account of her marriage based on the policy above quoted, invoking Article 136 of the Labor Code, which reads: x x ISSUE: Whether the termination of the services of complainant on account of marriage is legal.

RULING: Of first impression is the incompatibility of the respondent’s policy or regulation with the codal provision of law. Respondent is resolute in its contention that Article 136 of the Labor Code applies only to women employed in ordinary occupations, like flight attendants, is fair and reasonable, considering the peculiarities of their chosen profession. We cannot subscribe to the line of reasoning pursued by respondents. All along, it knew that the converted policy has already met its doom as early as March 13, 1973 when Presidential Decree No. 148, otherwise known as the Women and Child Labor Law, was promulgated. But for the timidity of those affected or their labor in challenging the validity of the policy, the same was able to obtain a momentary reprieve. A close look at section 8 of said decree, which amended paragraph (c ) of Section 12 of Republic Act No. 679, reveals that it is exactly the same provision reproduced verbatim in Article 136 of the Labor Code, which was promulgated on May 1, 1974 to take effect six months later, or on November 1, 1974.

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It cannot be gainsaid that, with the reiteration of the same provision in the new Labor Code, all policies and acts against it are deemed illegal and therefore abrogated. True, Article 132 enjoins the Secretary of Labor to establish standards that will ensure the safety and health of women employees and in appropriate cases shall by regulation require employers to determine appropriate minimum standards for termination in special occupations, such as those of flight attendants. It is logical to presume that, in the absence of said standards or regulations which are as yet to be established, the policy of respondent against marriage is patently illegal.

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Olympia Gualberto, et al vs. Marinduque Mining Industrial Corporation CA G.R. No. 52753-R June 28, 1978 Facts: Plaintiff, while still single, was employed in 1971 by defendant as company dentist in its Surigao Nickel Project. In March 1972, she married Gualberto , an electrical engineer in the same project. In the same month, defendant her that it considered her resigned effective April 15, 1972, invoking a policy of the firm to consider ,due lack of facilities for married women ,female employees in the project at Nocnoc Island Surigao as separated the moment they get married. Defendant further claimed that plaintiff was employed in the project with oral understanding that her services would be terminated when she gets married. Plaintiff and her husband, who alleges he was forced to resign because of his wife’s illegal dismissal, claims moral , exemplary and other damages. Ruling: The assignments of error are subsumed in the simple question as to whether the termination of the employment of Olympia Recreo Gualberto by reason of her marriage was valid or not. The efforts of defendants distinguish between a verbal pre -employment agreement of the project engineer and the plaintiff on the other hand and Company policy on the other do not impress as at all, Whether pre employment agreement or company policy, the same is void. And supposed letter of resignation based on the same considerations as the pre-employment agreement is equally illegal and void.

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APEX MINING COMPANY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO, respondents. G.R. No. 94951 April 22, 1991 FACTS: Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month. On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and hit her back on a stone. She reported the accident to her immediate supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. De la Rosa offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade her to quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her on February 4, 1988. On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and Employment. After the parties submitted their position papers as required by the labor arbiter assigned to the case on August 24, 1988 the latter rendered a decision, ordering the respondent, Apex Mining Company, Inc., to pay the complainant a total amount of P55,161.42. Not satisfied therewith, petitioner appealed to NLRC. NLRC dismissed the appeal for lack of merit and affirmed the appealed decision. A subsequent motion for reconsideration was likewise denied. Hence, the herein petition for review by certiorari, with the main thrust that private respondent should be treated as a mere househelper or domestic servant and not as a regular employee of petitioner. ISSUE: Whether or not the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm. HELD: The petition is devoid of merit. Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined as follows:

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The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family. The foregoing definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and other similar househelps. Hence, the definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. Private respondent Candida is therefore, entitled to appropriate relief as a regular employee of petitioner. Inasmuch as private respondent appears not to be interested in returning to her work for valid reasons, the payment of separation pay to her is in order. WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby AFFIRMED. No pronouncement as to costs.

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PHILIPPINE GLOBAL COMMUNICATIONS, INC. vs. RICARDO DE VERA Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in the business of communication services and allied activities, while respondent Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. At the crux of the controversy is Dr. De Vera’s status vis a vis petitioner when the latter terminated his engagement. The parties agreed and formalized respondent’s proposal in a document denominated as Retainership Contract which will be for a period of one year subject to renewal, it being made clear therein that respondent will cover "the retainership the Company previously had with Dr. K. Eulau" and that respondent’s "retainer fee" will be at P4,000.00 a month. Said contract was renewed yearly. The retainership arrangement went on from 1981 to 1994 with changes in the retainer’s fee. However, for the years 1995 and 1996, renewal of the contract was only made verbally. The turning point in the parties’ relationship surfaced in December 1996 when Philcom, thru a letter bearing on the subject boldly written as "Termination – Retainership Contract", informed De Vera of its decision to discontinue the latter’s "retainer’s contract with the Company effective at the close of business hours of December 31, 1996" because management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. On 22 January 1997, De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC), alleging that that he had been actually employed by Philcom as its company physician since 1981 and was dismissed without due process. He averred that he was designated as a "company physician on retainer basis" for reasons allegedly known only to Philcom. He likewise professed that since he was not conversant with labor laws, he did not give much attention to the designation as anyway he worked on a full-time basis and was paid a basic monthly salary plus fringe benefits, like any other regular employees of Philcom. On 21 December 1998, Labor Arbiter Ramon Valentin C. Reyes came out with a decision dismissing De Vera’s complaint for lack of merit, on the rationale that as a "retained physician" under a valid contract mutually agreed upon by the parties, De Vera was an "independent contractor" and that he "was not dismissed but rather his contract with [PHILCOM] ended when said contract was not renewed after December 31, 1996". On De Vera’s appeal to the NLRC, the latter, in a decision dated 23 October 2000, reversed that of the Labor Arbiter, on a finding that De Vera is Philcom’s "regular employee" and accordingly directed the company to reinstate him to his former position without loss of seniority rights and privileges and with full backwages from the date of his dismissal until actual reinstatement. With its motion for reconsideration having been denied by the NLRC in its order of 27 February 2001,9 Philcom then went to the Court of Appeals on a petition for certiorari imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the NLRC. On 12 September 2002, the Court of Appeals rendered a decision, modifying that of the NLRC by deleting the award of traveling allowance, and ordering payment of separation pay to De Vera in lieu of reinstatement. Issue:

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Whether or not “retainership contracts” could be set as a defense by employees in protecting their right of security of tenure. Ruling: With the recognition of the fact that petitioner consistently engaged the services of respondent on a retainer basis, as shown by their various "retainership contracts", so can petitioner put an end, with or without cause, to their retainership agreement as therein provided.27 We note, however, that even as the contracts entered into by the parties invariably provide for a 60-day notice requirement prior to termination, the same was not complied with by petitioner when it terminated on 17 December 1996 the verbally-renewed retainership agreement, effective at the close of business hours of 31 December 1996. Be that as it may, the record shows, and this is admitted by both parties,28 that execution of the NLRC decision had already been made at the NLRC despite the pendency of the present recourse. For sure, accounts of petitioner had already been garnished and released to respondent despite the previous Status Quo Order29issued by this Court. To all intents and purposes, therefore, the 60-day notice requirement has become moot and academic if not waived by the respondent himself. WHEREFORE, the petition is GRANTED and the challenged decision of the Court of Appeals REVERSED and SET ASIDE. The 21 December 1998 decision of the labor arbiter is REINSTATED.

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Jose B. Sarmiento vs. Employees’ Compensation Commission & Government Service Insurance System (National Power Corporation) May 11, 1988 GR No. L-65680 Gutierrez, Jr., J.: Facts The late Flordeliza Sarmiento was employed by the National Power Corporation in Quezon City as accounting clerk in May 1974. At the time of her death on August 12, 1981 she was manager of the budget division. The deceased’s illness was a cancer known as “differential squarrous cell carcinoma”, and sought treatment in various hospitals. And on August 12, 1981, she succumbed to cardiorespiratory arrest due to parotid carcinoma, and she was 20 years old. Believing that the deceased’s fatal illness having been contracted during her employment was service-connected, Jose B. Sarmiento filed a claim for death benefits under PD 626. On September 9, 1982, the GSIS, through its Medical Services Center, denied the claim. It was pointed out that the illness of Flordeliza was not caused by employment and employment conditions. Dissatisfied with the respondent’s decision of denial, Jose Sarmiento wrote a letter to the GSIS requesting that the records of the claim be elevated to the Employees’ Compensation Commission for review pursuant to the law and the Amended Rules on Employees’ Compensation. The respondent Commission affirmed the GSIS’ decision, it found that the deceased’s death is not compensable because she did not contract nor suffer from the same reason of her work but by reason of embryonic rests and epithelial growth. Issue Whether or not the deceased’s illness under PD 626, compensable? Held Under PD 626, a compensable illness means illness accepted as an occupational disease and listed by the Employees’ Compensation Commission, or any illness caused by employment subject to proof by the employee that the risk of contracting the same is increased by working conditions.

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G.R. No. L-58445 April 27, 1989 ZAIDA G. RARO, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM (Bureau of Mines and Geo-Sciences), respondents. GUTIERREZ, JR., J.: Facts: The petitioner states that she was in perfect health when employed as a clerk by the Bureau of Mines and Geo-Sciences at its Daet, Camarines Norte regional office on March 17, 1975. About four years later, she began suffering from severe and recurrent headaches coupled with blurring of vision. Forced to take sick leaves every now and then, she sought medical treatment in Manila. The petitioner was diagnosed at the Makati Medical Center to be suffering from brain tumor. By that time, her memory, sense of time, vision, and reasoning power had been lost. A claim for disability benefits filed by her husband with the Government Service Insurance System (GSIS) was denied. A motion for reconsideration was similarly denied. An appeal to the Employees' Compensation Commission resulted in the Commission's affirming the GSIS decision. On January 1, 1975, the Workmen's Compensation Act was replaced by a novel scheme under the new Labor Code. The new law discarded, among others, the concepts of "presumption of compensability" and "aggravation" and substituted a system based on social security principles. The present system is also administered by social insurance agencies — the Government Service Insurance System and Social Security System — under the Employees' Compensation Commission. The intent was to restore a sensible equilibrium between the employer's obligation to pay workmen's compensation and the employee's right to receive reparation for workconnected death or disability. Instead of an adversarial contest by the worker or his family against the employer, we now have a social insurance scheme where regular premiums are paid by employers to a trust fund and claims are paid from the trust fund to those who can prove entitlement The list of occupational diseases prepared by the Commission includes some cancers as compensable, namely —Occupational Diseases Nature of Employment 16. Cancer of stomach and other Woodworkers, wood products lymphatic and blood forming vessels; industry carpenters, nasal cavity and sinuses and employees in pulp and paper mills and plywood mills. 17. Cancer of the lungs, liver Vinyl chloride workers, and brain plastic workers. Issues: 1. Whether brain tumor which causes are unknown but contracted during employment is compensable under the present compensation laws. 2. Whether the presumption of compensability is absolutely inapplicable under the present compensation laws when a disease is not listed as occupational disease. Held: The Court saw no arbitrariness in the Commission's allowing vinyl chloride workers or plastic workers to be compensated for brain cancer. What the law requires for others is proof.

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The law, as it now stands requires the claimant to prove a positive thing – the illness was caused by employment and the risk of contracting the disease is increased by the working conditions. To say that since the proof is not available, therefore, the trust fund has the obligation to pay is contrary to the legal requirement that proof must be adduced. The existence of otherwise non-existent proof cannot be presumed .The Court has recognized the validity of the present law and has granted and rejected claims according to its provisions. We find in it no infringement of the worker's constitutional rights. WHEREFORE, the petition is hereby DISMISSED The questioned decision of the public respondents is AFFIRMED. SO ORDERED.

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[G.R. No. 128524. April 20, 1999] GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner, vs. THE HONORABLE COURT OF APPEALS and FELONILA ALEGRE, respondents. ROMERO, J.: FACTS: Private respondent Felonila Alegre’s deceased husband, SPO2 Florencio A. Alegre, was a police officer assigned to the Philippine National Police station in the town of Vigan, Ilocos Sur. On December 6, 1994, he was driving his tricycle and ferrying passengers within the vicinity of Imelda Commercial Complex when SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the Police Assistance Center located at said complex, confronted him regarding his tour of duty. SPO2 Alegre allegedly snubbed SPO4 Tenorio and even directed curse words upon the latter. A verbal tussle then ensued between the two which led to the fatal shooting of the deceased police officer. On account of her husband’s death, private respondent seasonably filed a claim for death benefits with petitioner Government Service Insurance System (GSIS) pursuant to Presidential Decree No. 626. In its decision on August 7, 1995, the GSIS, denied the claim on the ground that at the time of SPO2 Alegre’s death, he was performing a personal activity which was not work-connected which was later on affirmed by the Employees’ Compensation Commission (ECC. Private respondent finally obtained a favorable ruling in the Court of Appeals when it reversed the ECC’s decision and ruled that SPO2 Alegre’s death was work-connected and, therefore, compensable. Hence; GSIS filed a petition for review on certiorari to the Supreme Court; reiterating its position that SPO2 Alegre’s death lacks the requisite element of compensability which is, that the activity being performed at the time of death must be work-connected. ISSUE: Whether or not the SPO2 Alegre’s death is compensable pursuant to the applicable laws and regulations. HELD: Taking together existing jurisprudence and the pertinent guidelines of the ECC with respect to claims for death benefits, namely: (a) that the employee must be at the place where his work requires him to be; (b) that the employee must have been performing his official functions; and (c) that if the injury is sustained elsewhere, the employee must have been executing an order for the employer, it is not difficult to understand then why SPO2 Alegre’s widow should be denied the claims otherwise due her. Obviously, the matter SPO2 Alegre was attending to at the time he met his death, that of ferrying passengers for a fee, was intrinsically private and unofficial in nature proceeding as it did from no particular directive or permission of his superior officer. That he may be called upon at any time to render police work as he is considered to be on a round-the-clock duty and was not on an approved vacation leave will not change the conclusion arrived at considering that he was not placed in a situation where he was required to exercise his authority and duty as a policeman. In fact, he was refusing to render one pointing out that he already complied with the duty detail. At any rate, the 24-hour duty doctrine, as

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applied to policemen and soldiers, serves more as an after-the-fact validation of their acts to place them within the scope of the guidelines rather than a blanket license to benefit them in all situations that may give rise to their deaths. In other words, the 24-hour duty doctrine should not be sweepingly applied to all acts and circumstances causing the death of a police officer but only to those which, although not on official line of duty, are nonetheless basically police service in character.

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G.R. No. 136200 June 8, 2000 CELERINO VALERIANO, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM, respondents. PANGANIBAN, J.: The Facts: Celerino S. Valeriano was employed as a fire truck driver assigned at the San Juan Fire Station. Sometime on the evening of July 3, 1985, petitioner was standing along Santolan Road, Quezon City, when he met a friend by the name of Alexander Agawin. They decided to proceed to Bonanza Restaurant in EDSA, Quezon City, for dinner. On their way home at around 9:30 PM, the owner-type jeepney they were riding in figured in a head-on collision with another vehicle at the intersection of N. Domingo and Broadway streets in Quezon City. Due to the strong impact of the collision, petitioner was thrown out of the vehicle and was severely injured. As a result of the mishap, petitioner was brought to several hospitals for treatment. On September 16, 1985, he filed a claim for income benefits under PD 626, with the Government Security Insurance Service. His claim for benefits was opposed on the ground that the injuries he sustained did not directly arise or result from the nature of his work. Under the present compensation law, injury and the resulting disability or death is compensable if the injury resulted from an accident arising out of and in the course of employment. It means that the injury or death must be sustained while the employee is in the performance of his official duty; that the injury is sustained at the place where his work requires him to be; and if the injury is sustained elsewhere, that the employee is executing an order for the employer. The aforementioned conditions are found wanting in the instant case. The accident that the appellant met in the instant case occurred outside of his time and place of work. Neither was appellant performing his official duties as a fireman at the time of the accident. In fact, appellant just left the Bonanza Restaurant where he and his friends had dinner. Apparently, the injuries appellant sustained from the accident did not arise out of [and] in the course of his employment. Considering therefore the absence of a causal link between the contingency for which income benefits [are] being claimed and his occupation as fireman, his claim under PD 626, as amended, cannot be given due course. The Issues: In his Petition, Petitioner Celerino Valeriano urges the Court to resolve the following questions: WHETHER PETITIONER'S INJURIES ARE WORK-CONNECTED. HELD: Injuries and Resulting Disability Disability benefits are granted an employee who sustains an injury or contracts a sickness resulting in temporary total, permanent total, or permanent partial, disability. 10 For the injury and the resulting disability to be compensable, they must have necessarily resulted from an accident arising out of and in the course of employment. Were Petitioner's Injuries Work-Connected? The two components of the coverage formula — "arising out of" and "in the course of employment" — are said to be separate tests which must be independently satisfied; however, it

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should not be forgotten that the basic concept of compensation coverage is unitary, not dual, and is best expressed in the word, "work-connection, because an uncompromising insistence on an independent application of each of the two portions of the test can, in certain cases, exclude clearly work-connected injuries. The words "arising out of" refer to the origin or cause of the accident, and are descriptive of its character, while the words "in the course of" refer to the time, place and circumstances under which the accident takes place. As a matter of general proposition, an injury or accident is said to arise "in the course of employment" when it takes place within the period of the employment, at a place where the employee may reasonably . . . be, and while he is fulfilling his duties or is engaged in doing something incidental thereto. Thus, for injury to be compensable, the standard of "work connection" must be substantially satisfied. The injury and the resulting disability sustained by reason of employment are compensable regardless of the place where the injured occurred, if it can be proven that at the time of the injury, the employee was acting within the purview of his or her employment and performing an act reasonably necessary or incidental thereto. Petitioner Valeriano was not able to demonstrate solidly how his job as a firetruck driver was related to the injuries he had suffered. That he sustained the injuries after pursuing a purely personal and social function — having dinner with some friends — is clear from the records of the case. His injuries were not acquired at his work place; nor were they sustained while he was performing an act within the scope of his employment or in pursuit of an order of his superior. Thus, we agree with the conclusion reached by the appellate court that his injuries and consequent disability were not work-connected and thus not compensable. WHEREFORE, the Petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED. No pronouncement as to costs.

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ILOILO DOCK & ENGINEERING CO., vs. WORKMEN'S COMPENSATION G.R. No. L-26341

November 27, 1968

FACTS: At about 5:02 o'clock in the afternoon of January 29, 1960, Pablo, who was employed as a mechanic of the IDECO, while walking on his way home, was shot to death in front of, and about 20 meters away from, the main IDECO gate, on a private road commonly called the IDECO road. The slayer, Martin Cordero, was not heard to say anything before or after the killing. The motive for the crime was and still is unknown as Cordero was himself killed before he could be tried for Pablo's death. At the time of the killing, Pablo's companion was Rodolfo Galopez, another employee, who, like Pablo, had finished overtime work at 5:00 p.m. and was going home. From the main IDECO gate to the spot where Pablo was killed, there were four "carinderias" on the left side of the road and two "carinderias" and a residential house on the right side. The entire length of the road is nowhere stated in the record. According to the IDECO, the Commission erred (1) in holding that Pablo's death occurred in the course of employment and in presuming that it arose out of the employment; (2) in applying the "proximity rule;" and (3) in holding that Pablo's death was an accident within the purview of the Workmen's Compensation Act. ISSUE: Whether the injuries are "in the course of" and not "out of" the employment. RULING: The general rule in workmen's compensation law known as the "going & coming rule," simply stated, is that "in the absence of special circumstances, an employee injured in, going to, or coming from his place of work is excluded from the benefits of workmen's compensation acts."7 This rule, however, admits of four well-recognized exceptions, to wit: (1) where the employee is proceeding to or from his work on the premises of his employer; (2) where the employee is about to enter or about to leave the premises of his employer by way of the exclusive or customary means of ingress and egress; (3) where the employee is charged, while on his way to or from his place of employment or at his home, or during his employment, with some duty or special errand connected with his employment; and (4) where the employer, as an incident of the employment, provides the means of transportation to and from the place of employment.8 We address ourselves particularly to an examination and consideration of the second exception, i.e., injuries sustained off the premises of the employer, but while using a customary means of ingress and egress. Some of our states refuse to extend this definition of "in the course of" to include these injuries. Most of the states will protect the employee from the moment his foot or person reaches the employer's premises, whether he arrives early or late. These states find something sacred about the employment premises and define "premises" very broadly, not only to include premises owned by the employer, but also premises leased, hired, supplied or used by him,

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even private alleyways merely used by the employer. Adjacent private premises are protected by many states, and a few protect the employee even on adjacent public sidewalks and streets. Where a city or any employer owns or controls an island, all its streets are protected premises. There is no reason in principle why states should not protect employees for a reasonable period of time prior to or after working hours and for a reasonable distance before reaching or after leaving the employer's premises. The Supreme Court of the United States has declared that it will not overturn any state decision that so enlarges the scope of its act. Hence, a deaf worker, trespassing on railroad tracks adjacent to his employer's brick-making premises (but shown by his superintendent the specific short crossing over the track), and killed by a train, was held to be in the course of his employment when hit by an oncoming train fifteen minutes before his day would have begun. So long as causal relation to the employment is discernible, no federal question arises. The narrow rule that a worker is not in the course of his employment until he crosses the employment threshold is itself subject to many exceptions. Off-premises injuries to or from work, in both liberal and narrow states, are compensable (1) if the employee is on the way to or from work in a vehicle owned or supplied by the employer, whether in a public (e.g., the employer's street car) or private conveyance; (2) if the employee is subject to call at all hours or at the moment of injury; (3) if the employee is travelling for the employer, i.e., travelling workers; (4) if the employer pays for the employee's time from the moment he leaves his home to his return home; (5) if the employee is on his way to do further work at home, even though on a fixed salary; (6) where the employee is required to bring his automobile to his place of business for use there. Other exceptions undoubtedly are equally justified, dependent on their own peculiar circumstances.

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ALANO vs. EMPLOYEES' COMPENSATION COMMISSION G.R. No. L-48594 March 16, 1988 FACTS: Dedicacion de Vera, a government employee during her lifetime, worked as principal of Salinap Community School in San Carlos City, Pangasinan. Her tour of duty was from 7:30 a.m. to 5:30 p.m. On November 29, 1976, at 7:00 A.M., while she was waiting for a ride at Plaza Jaycee in San Carlos City on her way to the school, she was bumped and run over by a speeding Toyota mini-bus which resulted in her instantaneous death. She is survived by her four sons and a daughter. On June 27, 1977, Generoso C. Alano, brother of the deceased, filed the instant claim for in come benefit with the GSIS for and in behalf of the decedent's children. The claim was, however, denied on the same date on the ground that the "injury upon which compensation is being claimed is not an employment accident satisfying all the conditions prescribed by law." On July 19, 1977 appellant requested for a reconsideration of the system's decision, but the same was denied and the records of the case were elevated to this Commission for review. (Rollo, p. 12) ISSUE: Whether or not the death of Dedicacion de Vera can be compensable. HELD: In this case, it is not disputed that the deceased died while going to her place of work. She was at the place where, as the petitioner puts it, her job necessarily required her to be if she was to reach her place of work on time. There was nothing private or personal about the school principal's being at the place of the accident. She was there because her employment required her to be there. As to the Government Service Insurance System's manifestation, we hold that it is not fatal to this case that it was not impleaded as a party respondent. As early as the case of La O v. Employees' Compensation Commission, (97 SCRA 782) up to Cabanero v. Employees' Compensation Commission (111 SCRA 413) and recently, Clemente v. Government Service Insurance System (G.R. No. L-47521, August 31,1987), this Court has ruled that the Government Service Insurance System is a proper party in employees' compensation cases as the ultimate implementing agency of the Employees' Compensation Commission. We held in the aforecited cases that "the law and the rules refer to the said System in all aspects of employee compensation including enforcement of decisions (Article 182 of Implementing Rules)."

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SALVADOR LAZO vs. EMPLOYEES' COMPENSATION COMMISSION & GOVERNMENT SERVICE INSURANCE SYSTEM G.R. No. 78617 June 18, 1990 PADILLA, J.: FACTS: Salvador Lazo, is a security guard of the Central Bank of the Philippines assigned to its main office in Malate, Manila. His regular tour of duty is from 2:00 o'clock in the afternoon to 10:00 o'clock in the evening. On 18 June 1986, the petitioner rendered duty from 2:00 o'clock in the afternoon to 10:00 o'clock in the evening. But, as the security guard who was to relieve him failed to arrive, the petitioner rendered overtime duty up to 5:00 o'clock in the morning of 19 June 1986, when he asked permission from his superior to leave early in order to take home to Binangonan, Rizal, his sack of rice. On his way home, at about 6:00 o'clock in the morning of 19 June 1986, the passenger jeepney the petitioner was riding on turned turtle due to slippery road. As a result, he sustained injuries and was taken to the Angono Emergency Hospital for treatment. He was later transferred to the National Orthopedic Hospital where he was confined until 25 July 1986. For the injuries he sustained, petitioner filed a claim for disability benefits under PD 626, as amended. His claim, however, was denied by the GSIS for the reason that — It appears that after performing your regular duties as Security Guard from 2:00 P.M. to 10:00 P.M. on June 18, 1986, you rendered overtime duty from 10:00 P.M. to 5:06 A.M. of the following day; that at about 5:06 A.M. after asking permission from your superior you were allowed to leave the Office to do certain personal matter — that of bringing home a sack of rice and that, while on your way home, you met a vehicular accident that resulted to (sic) your injuries. From the foregoing informations, it is evident that you were not at your work place performing your duties when the incident occurred. 1 It was held that the condition for compensability had not been satisfied. Upon review of the case, the respondent Employees Compensation Commission affirmed the decision since the accident which involved the petitioner occurred far from his work place and while he was attending to a personal matter. Hence, the present recourse. ISSUE: Whether petitioner's injury comes within the meaning of and intendment of the phrase 'arising out of and in the course of employment? HELD: We held that 'where an employee, after working hours, attempted to ride on the platform of a service truck of the company near his place of work, and, while thus attempting, slipped and fell to the ground and was run over by the truck, resulting in his death, the accident may be said to have arisen out of or in the course of employment, for which reason his death is compensable. The fact standing alone, that the truck was in motion when the employee boarded, is insufficient to justify the conclusion that he had been notoriously negligent, where it does not appear that the truck was running at a great speed.'And, in a later case, Iloilo Dock & Engineering Co. vs. Workmen's Compensation Commission, 26 SCRA 102, 103, We ruled that '(e)mployment includes not only the actual doing of the work, but a reasonable margin of time and space necessary to be used in passing to and from the place where the work is to be done. If the employee be injured while passing, with the express or implied consent of the employer, to

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or from his work by a way over the employer's premises, or over those of another in such proximity and relation as to be in practical effect a part of the employer's premises, the injury is one arising out of and in the course of the employment as much as though it had happened while the employee was engaged in his work at the place of its performance. (Emphasis supplied) In the case at bar, it can be seen that petitioner left his station at the Central Bank several hours after his regular time off, because the reliever did not arrive, and so petitioner was asked to go on overtime. After permission to leave was given, he went home. There is no evidence on record that petitioner deviated from his usual, regular homeward route or that interruptions occurred in the journey. There is no reason, in principle, why employees should not be protected for a reasonable period of time prior to or after working hours and for a reasonable distance before reaching or after leaving the employer's premises. WHEREFORE, the decision appealed from is REVERSED and SET ASIDE. Let the case be remanded to the ECC and the GSIS for disposition in accordance with this decision.

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G.R. No. L-48488 April 25, 1980 GLORIA D. MENEZ, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION, GOVERNMENT SERVICE INSURANCE SYSTEM (DEPARTMENT OF EDUCATION & CULTURE), respondents. MAKASIAR, J.: FACTS: Petition for review on certiorari from the decision en banc dated March 1, 1978 of the Employees' Compensation Commission in ECC Case No. 0462, affirming the denial by the Government Service Insurance System of the claim of petitioner for benefits under Presidential Decree No. 626 (now Title II the New Labor Code) and dismissing said claim. Petitioner Gloria D. Menez was employed by the Department (now Ministry) of Education & Culture as a school teacher. She retired on August 31, 1975 under the disability retirement plan at the age of 54 years after 32 years of teaching, due to rheumatoid arthritis and pneumonitis. Before her retirement, she was assigned at Raja Soliman High School in TondoBinondo, Manila near a dirty creek. On October 21, 1976, petitioner filed a claim for disability benefits under Presidential Decree No. 626, as amended, with respondent Government Service Insurance System. On October 25, 1976, respondent GSIS denied said claim on the ground that petitioner's ailments, rheumatoid arthritis and pneumonitis, are not occupational diseases taking into consideration the nature of her particular work. In denying aforesaid claim, respondent GSIS thus resolved: Upon evaluation based on general accepted medical authorities, your ailments are found to be the least causally related to your duties and conditions of work. We believe that your ailments are principally traceable to factors which are definitely not work-connected. Moreover, the evidences you have, submitted have not shown that the said ailments directly resulted from your occupation as Teacher IV of Raja Soliman High School, Manila ISSUE: Whether or not the petitioner’s ailments are causally related to her duties and conditions of work, hence, she is entitled to disability benefit from the GSIS.

HELD: Republic Act 4670, otherwise known as the Magna Charta for Public School Teachers, recognized the enervating effects of these factors (duties and activities of a school teacher certainly involve physical, mental and emotional stresses) on the health of school teachers when it directed in one of its provisions that "Teachers shall be protected against the consequences of employment injury in accordance with existing laws. The effects of the

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physical and nervous strain on the teachers's health shall be recognized as compensable occupational diseases in accordance with laws" (Pantoja vs. Republic, et al.. L-43317, December 29, 1978). WHEREFORE, THE DECISION OF THE EMPLOYEES' COMPENSATION COMMISSION IS HEREBY SET ASIDE AND THE MINISTRY OF EDUCATION AND CULTURE IS HEREBY ORDERED 1) TO PAY PETITIONER THE SUM OF SIX THOUSAND [P 6,000.00] PESOS AS DISABILITY INCOME BENEFITS; AND 2) TO REIMBURSE PETITIONER'S MEDICAL AND HOSPITAL EXPENSES DULY SUPPORTED BY RECEIPTS.

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G.R. No. 94167 January 21, 1991 MABUHAY SHIPPING SERVICES, INC. AND SKIPPERS MARITIME CO., LTD., petitioners, vs. HON. NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION) AND CECILIA SENTINA, respondents. FACTS: Romulo Sentina was hired as a 4th Engineer by petitioner Mabuhay Shipping Services, Inc. (MSSI) for and in behalf of co-petitioner, Skippers Maritime Co., Ltd. to work aboard the M/V Harmony I for a period of one year. He reported for duty aboard said vessel on July 13, 1987. On January 16, 1988 at about 3 p.m., while the vessel was docked alongside Drapetona Pier, Piraeus, Greece, Sentina arrived aboard the ship from shore leave visibly drunk. He went to the messhall and took a fire axe and challenged those eating therein. He was pacified by his shipmates who led him to his cabin. However, later he went out of his cabin and proceeded to the messhall. He became violent. He smashed and threw a cup towards the head of an oiler Emmanuel Ero, who was then eating. Ero touched his head and noticed blood. This infuriated Ero which led to a fight between the two. After the shipmates broke the fight, Sentina was taken to the hospital where he passed away on January 17, 1988. Ero was arrested by the Greek authorities and was jailed in Piraeus. On October 26, 1988, private respondents filed a complaint against petitioners with the Philippine Overseas Employment Administration (POEA) for payment of death benefits, burial expenses, unpaid salaries on board and overtime pay with damages docketed as POEA Case No. (M) 88-10-896. POEA rendered a decision favoring Sentina. A motion for reconsideration and/or appeal was filed by petitioners which the respondent First Division of the National Labor Relations Commission (NLRC) disposed of in a resolution dated March 31, 1990 dismissing the appeal and affirming the appealed decision. Hence, this petition. ISSUE: WHETHER OR NOT AN EMPLOYER IS REQUIRED TO PAY DEATH BENEFITS TO AN EMPLOYEE WHO RAN AMUCK THAT RESULTED TO HIS DEATH. HELD: The mere death of the seaman during the term of his employment does not automatically give rise to compensation. The circumstances which led to the death as well as the provisions of the contract, and the right and obligation of the employer and seaman must be taken into consideration, in consonance with the due process and equal protection clauses of the Constitution. There are limitations to the liability to pay death benefits.

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When the death of the seaman resulted from a deliberate or willful act on his own life, and it is directly attributable to the seaman, such death is not compensable. No doubt a case of suicide is covered by this provision. By the same token, when as in this case the seaman, in a state of intoxication, ran amuck, or committed an unlawful aggression against another, inflicting injury on the latter, so that in his own defense the latter fought back and in the process killed the seaman, the circumstances of the death of the seaman could be categorized as a deliberate and willful act on his own life directly attributable to him. First he challenged everyone to a fight with an axe. Thereafter, he returned to the messhall picked up and broke a cup and hurled it at an oiler Ero who suffered injury. Thus provoked, the oiler fought back The death of seaman Sentina is attributable to his unlawful aggression and thus is not compensable.

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G.R. No. 115497 September 16, 1996 INTERORIENT MARITIME ENTERPRISES, INC., FIRCROFT SHIPPING CORPORATION and TIMES SURETY & INSURANCE CO., INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and CONSTANCIA PINEDA, respondents. PANGANIBAN, J.: FACTS: The proceedings below originated as a claim for death compensation benefits filed by Constancia Pineda as heir of her deceased son, seaman Jeremias Pineda, against Interorient Maritime Enterprises, Inc. and its foreign principal, Fircroft Shipping Corporation and the Times Surety and Insurance Co., Inc. The following facts were found by the POEA Administrator: As can be gathered from the records of the case, it was alleged that deceased seaman, Jeremias Pineda was contracted to work as Oiler on board the vessels, "MV Amazonia", owned and operated by its foreign principal, Fircroft Shipping Corporation for a period of nine (9) months with additional three (3) months upon mutual consent of both parties with a monthly basic salary of US$276.00 plus fixed overtime rate of US$83.00 and a leave pay of 2 1/2 days per month; that on October 2, 1989, he met his death when he was shot by a Thai Policeman in Bangkok, Thailand; that considering that the deceased seaman was suffering from mental disorders aggravated by threats on his life by his fellow seamen, the Ship Captain should not have allowed him to travel alone. The instant petition seeks the reversal and/or modification of the Resolution dated March 30, 1994 of public respondent National Labor Relations Commission dismissing the appeals of petitioners and affirming the decision dated November 16, 1992 of Philippine Overseas Employment Administration (POEA) Administrator Felicisimo C. Joson, which ordered that. WHEREFORE, in view of the foregoing consideration, respondents are hereby jointly and severally held liable to pay the complainant the following amounts: 1. P130,000.00 as death compensation benefits. 2. P18,000.00 as burial expenses. ISSUE: Are the local crewing or manning agent and its foreign principal (the shipowner) liable for the death of a Filipino seaman-employee who, after having been discharged, was killed in transit while being repatriated home? HELD: Petitioner's reliance on De Jesus is misplaced, as the death and burial benefits being claimed in this case are not payable by the Employee's Compensation Commission and chargeable against the State Insurance Fund. These claims arose from the responsibility of the foreign employer together with the local agency for the safety of the employee during his repatriation and until his arrival in this country, i.e., the point of hire. Through the termination of

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the employment contract was duly effected in Dubai, still, the responsibility of the foreign employer to see to it that Pineda was duly repatriated to the point of hiring subsisted. Section 4, Rule VIII of the Rules and Regulations Governing Overseas Employment clearly provides for the duration of the mandatory personal accident and life insurance covering accident death, dismemberment and disability of overseas workers: Sec. 4. Duration of Insurance Coverage. — The minimum coverage shall take effect upon payment of the premium and shall be extended worldwide, on and off the job, for the duration of the worker's contract plus sixty (60) calendar days after termination of the contract of employment; provided that in no case shall the duration of the insurance coverage be less than one year. (Emphasis supplied) The foreign employer may not have been obligated by its contract to provide a companion for a returning employee, but it cannot deny that it was expressly tasked by its agreement to assure the safe return of said worker. The uncaring attitude displayed by petitioners who, knowing fully well that its employee had been suffering from some mental disorder, nevertheless still allowed him to travel home alone, is appalling to say the least. Such attitude harks back to another time when the landed gentry practically owned the serfs, and disposed of them when the latter had grown old, sick or otherwise lost their usefulness. WHEREFORE, premises considered, the petition is hereby DISMISSED and the Decision assailed in this petition is AFFIRMED. Costs against petitioners.

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NAESS Shipping Philippines, Inc., vs. NLRC G.R. No. 73441 September 4, 1987 FIRST DIVISION, NARVASA, J.: Facts: On the night of September 3, 1983, while the vessel M/V DYVI PACIFIC was plying the seas enroute from Santos, Brazil to Port Said, Egypt, Pablo Dublin the vessel's chief steward, fatally stabbed the second cook, Rodolfo Fernandez, during a quarrel, then ran to the deck from which he jumped or fell overboard. An alarm was immediately raised, and the vessel turned to comb the surrounding area for Dublin. After some time his floating body was briefly sighted, but it disappeared from view even as preparations to retrieve it were being made, and was never seen again although the search went on through the night and was called off only at 6:00 o'clock the next morning. Under a Special Agreement in the employment contract, between the International Workers Federation (ITF) and NAESS Shipping, NAESS is bound to pay cash benefits for loss of life the of workers enrolled therein. For the death of Dublin his widow Zenaida, by whom he had one child, Ivy, born January 22, 1971, collected the amount of P75,000.00 under Clause A of the ITF Collective Bargaining Agreement. 3 She also filed with the Philippine Overseas Employment Administration (POEA) a complaint against NAESS 4 for payment of death benefits to US$74,512.00 under both paragraph 17 of the cited Special Agreement and what she claimed to be the also applicable Singapore Workmens' Compensation Ordinance. The POEA rendered judgment for the complainant, holding Dublin's death compensable under said Special Agreement and ordering NAESS to pay complainant and her child compensation benefits totalling US$31,962.00 and her attorneys of record fees amounting to US$3,196.00, the equivalents of said sums in Philippine pesos at prevailing rates of exchange. NAESS filed a motion for reconsideration but was dismissed by the NLRC for lack of merit, with an express affirmance of the POEA decision. Hence, this appeal. Issue: Whether or not the POEA and the NLRC acted with grave abuse of discretion amounting to lack or excess of jurisdiction in adjudging that death by suicide is compensable. Held: It makes no difference whether Dublin intentionally took his own life, or he killed himself in a moment of temporary aberration triggered by remorse over the killing of the second cook, or he accidentally fell overboard while trying to flee from imagined pursuit, which last possibility cannot be ruled out considering the state of the evidence. There is no question that NAESS freely bound itself to a contract which on its face makes it unqualifiedly liable to pay compensation benefits for Dublin's death while in its service,

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regardless of whether or not it intended to make itself the insurer, in the legal sense, of Dublin's life. No law or rule has been cited which would make it illegal for an employer to assume such obligation in favor of his or its employee in their contract of employment. Thus, contract, ... which are the private laws of the contracting parties, should be fulfilled according to the literal sense of their stipulations, if their terms are clear and leave no room for doubt as to the intention of the contracting parties, for contracts are obligatory, no matter what their form may be, whenever the essential requisites for their validity are present. To compel payment of death benefits in this case would amount not only to rewarding the act of murder or homicide, but also inequitably to placing on NAESS the twin burdens of compensating both the killer and his victim, who allegedly had also been employed under a contract with a similar death benefits clause. This argument, in confusing the legal implications and effects of two distinct and independent agreements, carries within itself the seeds of its own refutation. On Dublin's part, entitlement to death benefits resulted from his death while serving out his contract of employment; it was not a consequence of his killing of the second cook, Rodolfo Fernandez. If the latter's death is also compensable, that is due to the solitary fact of his death while covered by a similar contract, not precisely to the fact that he met death at the hands of Dublin That both deaths may be related by cause and effect and NAESS is the single obligor liable for compensation in both cases must, insofar as the factual and legal bases of such liability is concerned, be regarded as purely accidental circumstances. Decision: WHEREFORE, modified only to set aside and vacate the award of US$3,196.00 for attorney's fees made in the decision of the POEA and affirmed in the Resolution of the National Labor Relations Commission herein complained of, said Resolution is affirmed, with costs against petitioner NAESS. SO ORDERED.

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Vicente vs Employees Compensation Commission G.R. No. 85024 SARMIENTO, J.:p Facts: Petitioner was formerly employed. At the age of forty-five, he applied for an optional retirement giving as reason his inability to continue working is due to his physical disability. Upon his medical examination with Veterans Medical Center, he was diagnosed as having permanent total disability. He claimed for income benefits from GSIS. His request was granted but only for permanent partial disability. Upon further requests of petitioner, extensions were given but no grant was made as to his permanent total disability claims. Issue: Whether or not petitioner was suffering from permanent total disability. Held: Petitioner was suffering from permanent total disability. Ratio Decidendi: Petitioner availed of optional retirement which requires the proof that one is physically incapacitated to render sound and efficient service. Permanent total disability does not mean a state of absolute helplessness, but means the disablement of the employee to earn wages in the same kind of work, or a work of similar nature, that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. Considering that the petitioner has already availed of benefits for already twenty-three months shows that he was unable to perform any gainful occupation for more than 120 days.

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G.R. No. 85024 January 23, 1991 Parties: DOMINGO VICENTE, petitioner, vs. EMPLOYEES' COMPENSATION COMMISSION, respondent. Olandesca Law Offices for petitioner. Sarmiento, J. Facts: The petitioner, Domingo Vicente, was formerly employed as a nursing attendant at the Veterans Memorial Medical Center in Quezon City. On August 5, 1981, at the age of forty-five, and after having rendered more than twenty-five years of government service, he applied for optional retirement (effective August 16, 1981) under the provisions of Section 12(c) of Republic Act No. 1616, giving as reason therefor his inability to continue working as a result of his physical disability. The petitioner likewise filed with the Government Service Insurance System (GSIS) an application for "income benefits claim for payment" under Presidential Decree (PD) No. 626, as amended. Both applications were accompanied by the necessary supporting papers, among them being a "Physician's Certification" issued by the petitioner's attending doctor at the Veterans Memorial Medical Center, Dr. Avelino A. Lopez, M.D., F.P.C.S., ** F.I.C.S. *** (Section Chief, General, Thoracic & Peripheral Surgery, Surgical Department, Veterans Medical Center, Hilaga Avenue, Quezon City), who had diagnosed the petitioner as suffering from: Osteoarthritis, multiple; Hypertensive Cardiovascular Disease; Cardiomegaly; and Left Ventricular Hypertrophy; and classified him as being under "permanent total disability." The petitioner's application for income benefits claim payment was granted but only for permanent partial disability (PPD) compensation or for a period of nineteen months starting from August 16, 1981 up to March 1983. On March 14, 1983, the petitioner requested the General Manager of the GSIS to reconsider the award given him and prayed that the same be extended beyond nineteen months invoking the findings of his attending physician, as indicated in the latter's Certification. As a consequence of his motion for reconsideration, and on the basis of the "Summary of Findings and Recommendation" of the Medical Services Center of the GSIS, the petitioner was granted the equivalent of an additional four (4) months benefits. Still unsatisfied, the petitioner again sent a letter to the GSIS Disability Compensation Department Manager on November 6, 1986, insisting that he (petitioner) should be compensated no less than for "permanent total disability." On June 30, 1987, the said manager informed the petitioner that his request had been denied. Undaunted, the petitioner sought reconsideration and as a result of which, on September 10, 1987, his case was elevated to the respondent Employees Compensation Commission (ECC). Later, or on October 1, 1987, the petitioner notified the respondent Commission that he was confined at the Veterans Memorial Medical Center for "CVA probably thrombosis of the left middle cerebral artery."

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On August 24, 1988, the respondent rendered a decision affirming the ruling of the GSIS Employees' Disability Compensation and dismissed the petitioner's appeal. Issues: The respondent Commission argues that the petitioner only suffers from "permanent partial disability" and not from "permanent total disability." The findings of the petitioner's attending physician is not binding on the GSIS, nor on the Commission, as the proper evaluation of an employee's degree of disability exclusively belongs to the GSIS medical experts who have specialized on the subject. Held: Considering that the petitioner was only 45 years old when he retired and still entitled, under good behavior, to 20 more years in service, the approval of his optional retirement application proves that he was no longer fit to continue in his employment. For optional retirement is allowed only upon proof that the employee-applicant is already physically incapacitated to render sound and efficient service. Further, the appropriate physicians of the petitioner's employer, the Veterans Memorial Medical Center, categorically certified that the petitioner was classified under permanent total disability. On this score, "the doctor's certification as to the nature of the claimant's disability may be given credence as he normally would not make a false certification." And, "[N]o physician in his right mind and who is aware of the far-reaching and serious effect that his statements would cause on a money claim filed with a government agency, would issue certifications indiscriminately without even minding his own interests and protection." The fact that the petitioner was granted benefits amounting to the equivalent of twenty-three months shows that the petitioner was unable to perform any gainful occupation for a continuous period exceeding 120 days. This kind of disability is precisely covered by Section 2(b), Rule VII of the Amended Rules on Employees' Compensability. There being no showing that the petitioner's disability is "temporary total" as defined by the law, the inescapable conclusion is that he suffers from permanent total disability. Decision: WHEREFORE, the decision of the respondent Employees' Compensation Commission is SET ASIDE and another one is hereby ENTERED declaring the petitioner to be suffering from permanent total disability. Respondent Employees' Compensation Commission is accordingly ORDERED to award the petitioner the benefits corresponding to his permanent total disability.

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GSIS vs. Court of Appeals and R. Balais G.R. No. 117572, January 29, 1998 FACTS: Private respondent Rosa Balais an employee of National Housing Authority suffered from Subarachnoid Hemorrhage Secondary to Ruptured Aneurysm, because of this she can no longer perform efficiently. For this reason, she retired and filed for disability benefits. GSIS granted her application for temporary total disability and later was changed to permanent partial disability. She again filed with GSIS an application for permanent total disability, which GSIS denied on the ground that her condition does not qualify for permanent total disability. ISSUE: Whether or not respondent Rosa Balais is entitled of her permanent total disability? HELD: “A person’s disability may not manifest fully at one precise moment in time but rather over a period of time. It is possible that an injury which at first was considered to be temporary may later on become permanent or one suffers a partial disability becomes totally and permanently disabled from the same cause” (GSIS vs. CA. G.R. No. 116015, July 31, 1996) In the case at bar, the denial of the claim for permanent total disability benefit of private respondent who, for 38 long years during her prime had rendered her best service with an unblemished record and who was compelled to retire on account of her worsening conditioning would indeed subvert the salutary intentions of the law in favor of the worker. The court, therefore, affirms the decision of the respondent Court of Appeals decreeing conversion of private respondent’s disability from permanent partial disability to permanent total disability.

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EMPLOYEES’ COMPENSATION COMMISSION (SSS) vs. EDMUND SANICO G.R. No. 134028. December 17, 1999 Ponente: Kapunan, J. FACTS: Private respondent Edmund Sanico was a former employee of John Gotamco and sons as a wood filler from 1986 until he was separated from employment on December 31, 1991 due to his illness. According to his medical evaluation report he was suffering from pulmonary tuberculosis PTB. On November 9, 1994, private respondent filed with the Social Security System (SSS) a claim on the ground of prescription. The SSS ruled that under Article 201 of the Labor Code, a claim for compensation shall be given due course only when the same is filed with System three (3) years for the time the cause of action accrued. According to SSS the three (3) year prescriptive period on 21 September 1991 when his PTB first became manifest. When he filed his claim on November 9, 1994, the claim had allegedly already prescribed. On appeal, petitioner ECC affirmed the decision of the SSS. Private respondent then elevated the case to the CA, which reversed petitioner’s decision and granted private respondent’s claim for compensation benefits. In ruling that the private respondent’s claim was filed well within the prescriptive period under the law the CA reconciled Art. 201 of the Labor Code with Article 1144 (2) of the Civil Code. That “an action upon an obligation must be filed within ten (10) years from the time the cause of action accrues and that private respondent’s filing of his compensation claim on November 9,1994 was within, even long before, The prescriptive period. ISSUE: Whether or not private respondent’s claim for compensation benefit had already prescribed when he filed his claim on November 9, 1994? HELD: The Supreme Court ruled in favor of Private respondent Sanico. The prescriptive period for filing compensation claims should be reckoned from the time the employees lost his earning capacity, terminated from employment, due to his illness and not when the same first became manifest. In this case the private respondent’s was terminated on December 31, 1991 due to his illness, he filed his claim for compensation benefits on Nov. 9, 1994, accordingly, private respondent’s claim was filed within the three-year prescriptive period under Article 201 of the Labor Code. “Disability should not be understood more on its medical significance but on the loss of earning capacity.” Permanent disability means disablement of an employee to earn wages in the same kind of work, or work similar nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one’s earning capacity. P.D. No. 626, as amended, is a social legislation whose purpose is to provide meaningful protection to the working class against the hazards of disability, illness and other contingencies resulting in the loss of income.

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ROSARIO VDA. DE SUANES, petitioner, vs. THE WORKMEN'S COMPENSATION COMMISSION and THE REPUBLIC OF THE PHILIPPINES (Bureau of Public Highways), respondents. Facts: Artemio Suanes was a construction capataz of the Bureau of Public Highways (BPH), Batangas Provincial Office. His Service Record further shows that thereafter, from 1 July 1970 up to the time of his death on 21 June 1973. Artemio Suanes was a construction capataz in the Office of the Provincial Engineer, Batangas Province. The certificate of death issued by Dr. Salvacion Altamira of the Magsino General Hospital in Lipa City, Batangas, attributed Artemio's demise to 'Cardio-respiratory Arrest due to Cerebrovascular Accident'. On 5 March 1975, petitioner, as surviving spouse of Artemio Suanes, filed with Regional Office No. IV of the Workmen's Compensation Unit (WCU), Department of Labor, a claim for compensation under the applicable provisions of the Workmen's Compensation Act (Act No. 3428, as amended). In this claim, the decedent's illness was described as "Internal Hemorrhage due to Hypertension. 3 Petitioner's claim was referred by the WCU to the BPH which, however, controverted the claim of petitioner. In a letter dated 26 June 1975, BPH asserted that there was "[l]ack of causative relation of the illness alleged in [petitioner's] claim with the nature of the decedent's employment" and that petitioner had failed to comply with the requirements of Section 24, Act No. 3428, as amended, regarding the giving of notice and subsequent filing of claim. BPH, further, asked the WCU Regional Officeto dismiss petitioner's claim upon the ground that claim had been filed against the wrong party, Artemio's employer at the time of his death being the Provincial Engineer's Office of the Provincial Government of Batangas, rather than the BPH. The petitioner asks the Court to review and set aside the decision dated 31 December 1975 of the Workmen's Compensation Commission (WCC) Issue: Whether or not petitioner's Motion to Set Aside the Order of Dismissal issued by the WCC Referee was properly denied simply upon the ground that it had not been accompanied by an affidavit of merits. Ruling: It is well settled that, under the Workmen's Compensation Act, petitioner is accordingly relieved of the burden of proving causation between the illness and the employment in view of the legal presumption that said illness arose out of the decedent's employment. The burden of proving non-compensability of the cause of death is shifted to the employer. Respondent Batangas Provincial Engineer had failed to discharge this burden. Indeed, none of the respondents even attempted to present any evidence to rebut the presumption of compensability; all of them chose to rely upon the formal defenses discussed above. But those defenses do not constitute evidence to overthrow the statutory presumption. In legal effect, no evidence was introduced by the respondents to offset that legal presumption. The Court, therefore, is left with no alternative but to rule in favor of petitioner's claim.

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INTERORIENT MARITIME ENTERPRISES, INC. vs. NATIONAL LABOR RELATIONS COMMISSION G.R. No. 115497 September 16, 1996 FACTS: Deceased seaman, Jeremias Pineda was contracted to work as Oiler on board the vessels, "MV Amazonia", owned and operated by its foreign principal, Fircroft Shipping Corporation for a period of nine (9) months with additional three (3) months upon mutual consent of both parties. On September 28, 1989, he finished his contract and was discharged from the port of Dubai for repatriation to Manila. His flight schedule from Dubai to the Philippines necessitated a stopover at Bangkok, Thailand, and during said stopover he disembarked on and failed to join the connecting flight to Hongkong with final destination to Manila. Thereafter, Jeremias Pineda was shot by a Thai Officer on duty on October 2, 1989 at around 4:00 P.M.; According to the Thai police, Pineda approached and tried to stab the police sergeant with a knife and that therefore he was forced to pull out his gun and shot Pineda. The heirs of Pineda filed a claim for death benefits against herein petitioners. The POEA Administrator rendered his decision holding petitioners liable for death compensation benefits and burial expenses. Petitioners appealed the POEA decision to the public respondent. In a Decision dated March 30, 1994, public respondent upheld the POEA. Thus, this recourse to this Court by way of a special civil action for certiorari. ISSUE: Whether or not the heirs of Pineda can claim death benefits and compensation against the employer. HELD: Yes, the employer should pay compensation and death benefits of Pineda to his heirs. According to the Supreme Court, attacked the Thai policeman when he was no longer in complete control of his mental faculties, the aforequoted provision of the Standard Format Contract of Employment exemption the employer from liability should not apply in the instant case. Firstly, the fact that the deceased suffered from mental disorder at the time of his repatriation means that he must have been deprived of the full use of his reason, and that thereby, his will must have been impaired, at the very least. Thus, his attack on the policeman can in no wise be characterized as a deliberate, willful or voluntary act on his part. Secondly, and apart from that, we also agree that in light of the deceased's mental condition, petitioners "should have observed some precautionary measures and should not have allowed said seaman to travel home alone", and their failure to do so rendered them liable for the death of Pineda. Indeed, "the obligations and liabilities of the (herein petitioners) do not end upon the expiration of the contracted period as (petitioners are) duty bound to repatriate the seaman to the point of hire to effectively terminate the contract of employment.”

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NORSE MANAGEMENT CO. vs. NATIONAL SEAMEN BOARD, G.R. No. L-54204 September 30, 1982 RELOVA, J.: FACTS: Napoleon B. Abordo, the deceased husband of private respondent Restituta , was the 2nd Engr. of M.T. "Cherry Earl" when he died from an apoplectic stroke in the course of his employment with petitioner . The M.T. "Cherry Earl" is a vessel of Singaporean Registry. He was receiving a monthly salary of US$850.00 at the time of his death. In her complaint for "death compensation benefits, accrued leave pay and time-off allowances, funeral expenses, attorney's fees and other benefits and reliefs available in connection with the death of Napoleon B. Abordo," filed before the National Seamen Board, Restituta C. Abordo alleged that the amount of compensation due her from petitioners Norse Management Co. (PTE) and Pacific Seamen Services, Inc., principal and agent, respectively, should be based on the law where the vessel is registered. On the other hand, petitioners contend that the law of Singapore should not be applied in this case because the National Seamen Board cannot take judicial notice of the Workmen's Insurance Law of Singapore. As an alternative, they offered to pay private respondent Restituta C. Abordo the sum of P30,000.00 as death benefits based on the Board's Memorandum Circular No. 25 which they claim should apply in this case. Ministry of Labor and Employment, after hearing the case, rendered judgment on June 20, 1979, ordering herein petitioners "to pay jointly and severally the following: I. US$30,600 (the 36-month salary of the decreased)) or its equivalent in Philippine currency as death compensation benefits; II. US$500.00 or its equivalent in Philippine currency as funeral expenses; III. US$3,110 or 10% of the total amount recovered as attorney's fees. It is also ordered that payment must be made thru the National Seamen Board within ten (10) days from receipt of this decision. Petitioners appealed to the Ministry of Labor. On December 11, 1979, the Ministry rendered its decision in this case as follows: The facts in the main are not disputed. The deceased, husband of complainant herein, was employed as a Second Engineer by respondents and served as such in the vessel "M.T. Cherry Earl" until that fatal day in May 1978 when, while at sea, he suffered an apoplectic stroke and died four days later or on 29 May 1978. In her complaint filed before this Board, Abordo argued that the amount of compensation due her should be based on the law where the vessel is registered, which is Singapore law. Agreeing with said argument, this Board issued the questioned Order. Hence, this Motion for Reconsideration. In their motion for reconsideration, respondents strongly argue that the law of Singapore should not be applied ISSUE: Whether or not the law of Singapore ought to be applied in this case? HELD: We rule in the affirmative. It is true that the law of Singapore was not alleged and proved in the course of the hearing. And following Supreme Court decisions in a long line of cases that a foreign law, being a matter of evidence, must be alleged and proved, the law of Singapore ought not to be recognized in this case. But it is our considered opinion that the jurisprudence on this matter was never meant to apply to cases before administrative or quasi-judicial bodies such as the National Seamen Board. For well-settled also is the rule that administrative and

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quasi-judicial bodies are not bound strictly by technical rules. It has always been the policy of this Board, as enunciated in a long line of cases, that in cases of valid claims for benefits on account of injury or death while in the course of employment, the law of the country in which the vessel is registered shall be considered. We see no reason to deviate from this well-considered policy. Certainly not on technical grounds as movants herein would like us to. WHEREFORE, the motion for reconsideration is hereby denied and the Order of tills Board dated 20 June 1979 affirmed. Let execution issue immediately. In the event of illness or injury to Employee arising out of and in the course of his employment and not due to his own willful misconduct and occurring whilst on board any vessel to which he may be assigned, but not any other time, the EMPLOYER win provide employee with free medical attention, including hospital treatment, also essential medical treatment in the course of repatriation and until EMPLOYEE's arrival at his point of origin. If such illness or injury incapacitates the EMPLOYEE to the extent the EMPLOYEE's services must be terminated as determined by a qualified physician designated by the EMPLOYER and provided such illness or injury was not due in part or whole to his willful act, neglect or misconduct compensation shall be paid to employee in accordance with and subject to the limitations of the Workmen's Compensation Act of the Republic of the Philippines or the Workmen's Insurance Law of registry of the vessel whichever is greater. (Emphasis supplied) In the aforementioned "Employment Agreement" between petitioners and the late Napoleon B. Abordo, it is clear that compensation shall be paid under Philippine Law or the law of registry of petitioners' vessel, whichever is greater. Since private respondent Restituta C. Abordo was offered P30,000.00 only by the petitioners, Singapore law was properly applied in this case. The "Employment Agreement" is attached to the Supplemental Complaint of Restituta C. Abordo and, therefore, it forms part thereof. As it is familiar with Singapore Law, the National Seamen Board is justified in taking judicial notice of and in applying that law. Furthermore, Article 20, Labor Code of the Philippines, provides that the National Seamen Board has original and exclusive jurisdiction over all matters or cases including money claims, involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen for overseas employment. Thus, it is safe to assume that the Board is familiar with pertinent Singapore maritime laws relative to workmen's compensation. Moreover, the Board may apply the rule on judicial notice and, "in administrative proceedings, the technical rules of procedure — particularly of evidence — applied in judicial trials, do not strictly apply." (Oromeca Lumber Co. Inc. vs. Social Security Commission, 4 SCRA 1188). Finally, Article IV of the Labor Code provides that "all doubts in the implementation and interpretation of the provisions of this code, including its implementing rules and resolved in favor of labor. For lack of merit, this petition is DENIED.

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PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FRANCISCO HERNANDEZ (at large), KARL REICHL, and YOLANDA GUTIERREZ DE REICHL, accused, KARL REICHL and YOLANDA GUTIERREZ DE REICHL, accused-appellants PUNO, J.: FACTS: In April 1993, eight (8) informations for syndicated and large scale illegal recruitment and eight (8) informations for estafa were filed against accused-appellants, spouses Karl and Yolanda Reichl, together with Francisco Hernandez. Only the Reichl spouses were tried and convicted by the trial court as Francisco Hernandez remained at large.1âwphi1.nêt ISSUE: Whether or not the respondents are guilty of illegal recruitment. HELD: In the case at bar, the prosecution was able to prove beyond reasonable doubt that accused-appellants engaged in activities that fall within the definition of recruitment and placement under the Labor Code. The evidence on record shows that they promised overseas employment to private complainants and required them to prepare the necessary documents and to pay the placement fee, although they did not have any license to do so. There is illegal recruitment when one who does not possess the necessary authority or license gives the impression of having the ability to send a worker abroad. Accused-appellants assert that they merely undertook to secure Austrian visas for private complainants, which act did not constitute illegal recruitment. They cite the document marked at Exhibit "J" stating that they promised to obtain Austrian tourist visas for private complainants. We are not convinced. Private complainants Narcisa Hernandez, Leonora Perez and Charito Balmes categorically stated that Karl and Yolanda Reichl told them that they would provide them overseas employment and promised them that they would be able to leave the country on a specified date. We do not see any reason to doubt the truthfulness of their testimony. The defense has not shown any ill motive for these witnesses to falsely testify against accused-appellants if it were not true that they met with the Reichl spouses and the latter represented themselves to have the capacity to secure gainful employment for them abroad. The minor lapses in the testimony of these witnesses pointed out by accusedappellants in their brief do not impair their credibility, especially since they corroborate each other on the material points, i.e., that they met with the three accused several times, that the three accused promised to give them overseas employment, and that they paid the corresponding placement fee but were not able to leave the country. It has been held that truthtelling witnesses are not always expected to give error-free testimonies considering the lapse of time and the treachery of human memory. Moreover, it was shown that Karl Reichl signed a document marked as Exhibit "C" where he promised to refund the payments given by private complainants for the processing of their papers. We are not inclined to believe Mr. Reichl's claim that he was forced by Francisco Hernandez to sign said document. There is no showing, whether in his testimony or in that of his wife, that private complainants threatened to harm them

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if he did not sign the document. Mr. Reichl is an educated man and it cannot be said that he did not understand the contents of the paper he was signing. When he affixed his signature thereon, he in effect acknowledged his obligation to ensure the departure of private complainants and to provide them gainful employment abroad. Such obligation arose from the promise of overseas placement made by him and his co-accused to private complainants. The admission made by accused-appellants in Exhibit "J" that they promised to obtain Austrian visas for private complainants does not negate the fact that they also promised to procure for them overseas employment. In fact, in Exhibit "J", accused-appellants admitted that each of the private complainants paid the amount of P50,000.00. However, in Exhibit "C", which was executed on a later date, accused-appellants promised to refund to each complainant an amount exceeding P150,000.00. This is an acknowledgment that accused-appellants received payments from the complainants not only for securing visas but also for their placement abroad. Accused-appellants' defense of denial and alibi fail to impress us. The acts of recruitment were committed from June 1992 until January 1993 in Batangas City. Karl Reichl was in Manila from July 29, 1992 until September 19, 1992, and then he returned to the Philippines and stayed in Batangas from October 21, 1992. Yolanda Reichl, on the other hand, claimed that he was in Manila on the dates alleged in the various informations. It is of judicial notice that Batangas City is only a few hours' drive from Manila. Thus, even if the spouses were staying in Manila, it does not prevent them from going to Batangas to engage in their recruitment business. Furthermore, it appears that the three accused worked as a team and they conspired and cooperated with each other in recruiting domestic helpers purportedly to be sent to Italy. Francisco Hernandez introduced Karl and Yolanda Reichl to the job applicants as his business partners. Karl and Yolanda Reichl themselves gave assurances to private complainants that they would seek employment for them in Italy. Francisco Hernandez remitted the payments given by the applicants to the Reichl spouses and the latter undertook to process the applicants' papers. There being conspiracy, each of the accused shall be equally liable for the acts of his coaccused even if he himself did not personally take part in its execution.

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 129577-80

February 15, 2000

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BULU CHOWDURY, accused-appellant. Facts: The accused worked as an interviewer at Cartrade Agency from 1990 until 1994, that from the period of August 1994 to October 1994, he recruited the complainants: Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis, for employment in Korea without first obtaining the required license and/or authority from the Philippine Overseas Employment Administration. They were likewise charged with three counts of estafa committed against private complainants. The State Prosecutor, however, later dismissed the estafa charges against Chowdury and filed an amended information indicting only Ong for the offense. Chowdury was arraigned on April 16, 1996 while Ong remained at large. He pleaded "not guilty" to the charge of illegal recruitment in large scale. The prosecution presented four witnesses: private complainants Aser Sasis, Estrella Calleja and Melvin Miranda, and Labor Employment Officer Abbelyn Caguitla. The trial court found Chowdury guilty beyond reasonable doubt of the crime of illegal recruitment in large scale. Chowdury appealed.

Issue is whether accused-appellant knowingly and intentionally participated in the commission of the crime charged. Held: Evidence shows that accused-appellant interviewed private complainants in the months of June, August and September in 1994 at Craftrade's office. At that time, he was employed as interviewer of Craftrade which was then operating under a temporary authority given by the POEA pending renewal of its license. He was convicted based on the fact that he was not registered with the POEA as employee of Craftrade. Neither was he, in his personal capacity, licensed to recruit overseas workers. Upon examination of the records, the prosecution failed to prove that accused-appellant was aware of Craftrade's failure to register his name with the POEA and that he actively engaged in recruitment despite this knowledge. The obligation to register its personnel with the POEA belongs to the officers of the agency.32 A mere employee of the agency cannot be expected to know the legal requirements for its operation. The evidence at hand shows that accused-appellant carried out his duties as interviewer of Craftrade believing that the agency was duly licensed by the POEA and he, in turn, was duly authorized by his agency to deal with the applicants in its behalf. Accused-appellant in fact confined his actions to his job description. He merely interviewed the applicants and informed them of the requirements for deployment but he never received money from them. Their payments were received by the agency's cashier, Josephine 304

Ong. Furthermore, he performed his tasks under the supervision of its president and managing director. Hence, we hold that the prosecution failed to prove beyond reasonable doubt accusedappellant's conscious and active participation in the commission of the crime of illegal recruitment. His conviction, therefore, is without basis. IN VIEW WHEREOF, the assailed decision of the Regional Trial Court is REVERSED and SET ASIDE. Accused-appellant is hereby ACQUITTED. The Director of the Bureau of Corrections is ordered to RELEASE accused-appellant unless he is being held for some other cause, and to REPORT to this Court compliance with this order within ten (10) days from receipt of this decision.

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People of the Philippines vs. Cabais (G.R. No. 129070 March 16, 2001) Facts: Sometime in February 1994, complainant Joan Merante, 37 years old, met accused Nellie Cabais in Maharlika, Baguio City. Accused Cabais informed her that she was connected with Red Sea Employment Agency (RSEA), a Manila-based agency which was licensed to recruit overseas contract workers. She also talked to the other complainants who have shown their positive interest to the employment in Korea. Accused Cabais talked to complainants several times during the period of February 1994 up to May 1994, persuading them to be contract workers in South Korea. In subsequent meetings, accused Cabais introduced accused Anita Forneas as her boss and the owner of RSEA. Accused Cabais and Forneas tried to convince them to submit their applications so that RSEA could process them. Later on, accused Cabais introduced to them a certain Korean named Harm Yo Hong who managed to persuade the complainants to apply as contract workers in South Korea. Issue: Accused-appellant Nellie Cabais contends that she is not liable for illegal recruitment and estafa considering that she was merely an employee of Red Sea Employment Agency and did not actually recruit applicants. Held: An employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. All of the complainants testified that they personally met accused-appellant and transacted with her regarding the overseas job placement offers. Thus, accused-appellant actively participated in the recruitment of the complainants. WHEREFORE, the Court AFFIRMS the decision of the Regional Trial Court, Baguio City, Branch 6, convicting accused-appellant Nellie Cabais y Gamuelan of illegal recruitment in a large scale by a syndicate, and sentencing her to life imprisonment and to pay a fine of one hundred thousand (P100,000.00) pesos, and costs; SO ORDERED.

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PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LUZ GONZALES-FLORES, accusedappellant. G.R. Nos. 138535-38. April 19, 2001 MENDOZA, J.: Facts: That on or about the month of August, 1994, in Quezon City, Philippines, the said accused, conspiring together, confederating with several persons whose true names and true identities have not as yet been ascertained, and helping one another, did then and there wilfully, unlawfully and feloniously defraud FELIXBERTO LEONGSON, JR. y CASTAÑEDA in the following manner, to wit: the said accused, by means of false manifestations and fraudulent representation which she made to said complainant to the effect that they had the power and capacity to recruit and employ complainant abroad .

after requiring them to submit certain documentary requirements and exacting from them the total amount of P128,000.00, Philippine Currency, as recruitment fees, such recruitment activities being done without the required license or authority from the Department of Labor. Two days later, Baloran and Domingo went to the compound where Felixberto and accusedappellant were residing and called Felixberto, Cloyd, and Jojo to a meeting. Domingo told the applicants that he was the chief engineer of the luxury ocean liner where they would embark and repeated to them the salaries and other benefits which they would receive. He told them not to get impatient. Accused-appellant later saw complainant to collect the balance of P35,000.00. Complainant was told to give the money to accused-appellant at Wendy’s in Cubao, Quezon City on August 12, 1994. At the appointed date and place, complainant and his wife delivered the amount to accusedappellant who, in turn, handed it to Baloran. No receipt was, however, issued to Felixberto. Another meeting was held on August 16, 1994 at the Mandarin Hotel in Makati City by accusedappellant, Domingo, Baloran, Mendoza, the Leongson spouses, the Malgapo spouses, and Jojo Bumatay. The applicants were told by Domingo that they would be employed as waiters and attendants in the luxury liner and asked them again to wait a while. On August 18, 1994, accused-appellant saw complainant again to collect the P25,000.00 balance. Felixberto paid the amount to accused-appellant four days later. As in the case of the first two payments, no receipt was given for the P25,000.00. Accused-appellant told him that she would turn over the amount to Baloran. Although complainant regularly followed up his application with accused-appellant, he was told each time to have patience and to just wait for the call from Domingo or from Baloran. But Felixberto never heard from either one of these two. Accused-appellant was investigated by the Baler Police Station 2 on November 11, 1994 as a result of the complaints filed against her by Felixberto, Ronald, and Larry. Thereafter, she was detained.[17]

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On November 24, 1994, she appeared before the NBI accompanied by a policewoman to comply with the subpoena issued regarding her complaint. According to NBI Agent Jesus Manapat, accused-appellant’s complaint was dismissed for lack of merit. Based on the evidence presented, the trial court rendered its assailed decision on November 23, 1998, the dispositive portion of which reads: Issue: Whether or not the accused guilty of illegal recruitment in large scale?

Held: WHEREFORE, the guilt of the accused for illegal recruitment in large scale and estafa in three (3) counts having been proved beyond reasonable doubt, she is hereby convicted of said crimes and is sentenced: SO ORDERED. Hence, this appeal. Accused-appellant contends thatI. THE LOWER COURT ERRED IN RELYING UPON THE JURISPRUDENCE AND AUTHORITIES CITED, I.E., PEOPLE VS. COMIA, PEOPLE VS. MANOZCA, PEOPLE VS. HONRADA, PEOPLE VS. TAN TIONG MENG, PEOPLE VS. VILLAS AND PEOPLE VS. SENDON BECAUSE, WITH DUE RESPECT, THE FACTS AND CIRCUMSTANCES AVAILING IN SAID CASES ARE DIFFERENT AS IN THE PRESENT CASE; AND II. [THE LOWER COURT] ERRED IN HOLDING THE ACCUSED GUILTY BEYOND REASONABLE DOUBT ON THE BASIS OF THE EVIDENCE ADDUCED BY THE PROSECUTION TAKEN IN THE LIGHT OF THE UNREBUTTED EVIDENCE OF THE ACCUSED ON VERY MATERIAL POINTS.[21] The contentions are without merit. In Criminal Case No. Q-94-59473, accused-appellant was charged with illegal recruitment in large scale, the essential elements of which are: (1) that the accused engages in acts of recruitment and placement of workers defined under Art. 13 (b) or in any of the prohibited activities under Art. 34 of the Labor Code; (2) that the accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, either locally or overseas; and (3) that the accused commits the unlawful acts against three or more persons, individually or as a group.[22] In these cases, according to the certification of the POEA, accused-appellant had no license or authority to engage in any recruitment activities.[23] In fact, this was stipulated at the trial.[24] Accused-appellant claims, however, that she herself was a victim of illegal recruitment and that she simply told complainants about job opportunities abroad. The allegation is untenable. Art. 13 (b) of the Labor Code defines “recruitment and placement” as referring to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for

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employment, locally or abroad, whether for profit or not. The same article further states that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.[25] The evidence for the prosecution shows that accused-appellant sought out complainants and promised them overseas employment. Despite their initial reluctance because they lacked the technical skills required of seamen, complainants were led to believe by accused-appellant that she could do something so that their applications would be approved. Thus, because of accused-appellant’s misrepresentations, complainants gave her their moneys. Accusedappellant’s companions, Domingo, Baloran, and Mendoza, made her ploy even more plausible. Accused-appellant contends that all she did was to refer complainants to Domingo, Baloran, and Mendoza. However, under Art. 13 (b) of the Labor Code, recruitment includes “referral,” which is defined as the act of passing along or forwarding an applicant for employment after initial interview of a selected applicant for employment to a selected employer, placement officer, or bureau.[26] In these cases, accused-appellant did more than just make referrals. She actively and directly enlisted complainants for supposed employment abroad, even promising them jobs as seamen, and collected moneys from them. The failure of complainants to present receipts to evidence payments made to accusedappellant is not fatal to the prosecution case. The presentation of the receipts of payments is not necessary for the conviction of accused-appellant. As long as the prosecution is able to establish through credible testimonies and affidavits that the accused-appellant was involved in the prohibited recruitment, a conviction for the offense can very well be justified.[27] In these cases, complainants could not present receipts for their payment because accused-appellant assured them she would take care of their money. More importantly, accused-appellant’s defense is uncorroborated. Not one of the persons she included in her complaint to the NBI was ever presented in her defense in these cases. Nor did she present Domingo, Baloran, or Mendoza to corroborate her statements. It is probable that had she presented any of these persons, their testimonies would have been adverse to accused-appellant.[34]

In sum, we are of the opinion that the trial court correctly found accused-appellant guilty of illegal recruitment in large scale. The imposition on accused-appellant of the penalty of life imprisonment and a fine of P100,000.00 is thus justified. Accused-appellant was likewise found guilty of estafa under Art. 315 (2) (a) of the Revised Penal Code committed By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud: (a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits. Both elements of the crime were established in these cases, namely, (a) accused-appellant defrauded complainant by abuse of confidence or by means of deceit and (b) complainant

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suffered damage or prejudice capable of pecuniary estimation as a result.[37] Complainants parted with their money upon the prodding and enticement of accused-appellant on the false pretense that she had the capacity to deploy them for employment abroad. In the end, complainants were neither able to leave for work overseas nor did they get their money back, thus causing them damage and prejudice.[38] The issues that misappropriation on the part of accused-appellant of the money paid by complainants and their demand for the same were not sufficiently established are immaterial and irrelevant, conversion and demand not being elements of estafa under Art. 315 (2) (a) of the Revised Penal Code. In accordance with the ruling in People v. Mercado,[40] the fact that no receipts were presented to prove the amounts paid by complainants to accused-appellant does not prevent an award of actual damages in view of the fact that complainants were able to prove by their respective testimonies and affidavits that accused-appellant was involved in the recruitment process and succeeded in inveigling them to give their money to her. The award of moral damages should likewise be upheld as it was shown to have factual basis. Held: the decision of the Regional Trial Court, Branch 77, Quezon City, finding accused-appellant guilty of illegal recruitment in large scale and estafa against complainants Felixberto Leongson, Jr., Ronald Frederizo, and Larry Tibor is AFFIRMED, with the MODIFICATIONS that, in the cases for estafa, accused-appellant is sentenced: (1) In Criminal Case No. Q-94-59470, to suffer a prison term ranging from four (4) years and two (2) months of prision correccional, as minimum, to ten (10) years of prision mayor, as maximum; (2) In Criminal Case No. Q-94-59471, to suffer a prison term ranging from four (4) years and two (2) months of prision correccional, as minimum, to 10 years of prision mayor, as maximum; and (3) In Criminal Case No. Q-94-59472, to suffer a prison term ranging from four (4) years and two (2) months of prision correccional, as minimum, to nine (9) years of prision mayor, as maximum. SO ORDERED.

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[G.R. Nos. 124671-75. September 29, 2000] PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LINDA SAGAYDO, accusedappellant. PARDO, J.: FACTS: On December 15, 1992, Baguio City Prosecutor II Estrellita P. Bernabe filed with the Regional Trial Court, Baguio City, Branch 59, separate informations charging accused Linda Sagaydo with one (1) case of illegal recruitment in large scale, and four (4) cases of estafa. Upon arraignment on August 18, 1993, accused pleaded not guilty to all the five (5) charges against her. Thus, trial ensued. The complainants recounted their respective experience with accused Linda Sagaydo. The accused denied having recruited any of the private complainants. She claimed that they came to her voluntarily after being informed that she was able to send her three (3) sons to Korea. While accused admitted having received money from complainants Gina Cleto and Naty Pita, she said she used their money to buy their plane tickets. Gina and Naty were not able to leave because the Korean government imposed a visa requirement beginning January, 1992. When asked why she was not able to return the money of Gina and Naty, accused said that she returned the plane tickets to the Tour Master travel Agency for refund but said agency did not make reimbursements. With respect to complainants Jessie Bolinao and Rogelio Tibeb, the accused denied having received any money from them. The trial court gave credence to the testimonies of the complainants and rejected the denial of accused. Thus, on October 25, 1995, the trial court rendered a decision convicting her of the charges of illegal recruitment and estafa, the decretal portion of which is quoted in the opening paragraph of this opinion. Hence, this appeal.

ISSUE: Whether or not the accused, Sagaydo is guilty of one (1) case of illegal recruitment in large scale and four (4) cases of estafa.

HELD: “Illegal recruitment has been defined to include the act of engaging in any of the activities mentioned in Article 13 (b) of the Labor Code without the required license or authority from the POEA. Under the aforesaid provision, any of the following activities would constitute recruitment and placement: canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, including referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. Article 13 (b) further provides that any person or entity which, in any manner, offers or promises for a fee employment to two (2) or more persons shall be deemed engaged in recruitment and placement. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons, individually or as a group.” “This crime requires proof that the accused: (1) engaged in the recruitment and placement of workers defined under Article 13 or in any of the prohibited activities under Article 34 of the Labor Code; (2) does not have a license or authority to lawfully engage in the recruitment and placement of workers; and (3) committed the infraction against three or more persons, individually or as a group.” All the aforementioned requisites were present in this case. The accused-appellant made representations to each of the private complainants that she could send them to Korea to work as factory workers, constituting a promise of employment which amounted to recruitment as defined under Article 13 (b) of the Labor Code. From the testimonies of the private complainants that the trial court found to be

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credible and untainted with improper motives, there is no denying that accused-appellant gave the complainants the distinct impression that she had the power or ability to send them abroad for work such that the latter were convinced to part with their money in order to be employed. As against the positive and categorical testimonies of the complainants, mere denial of accused-appellant cannot prevail. As to the license requirement, the record showed that accused-appellant did not have the authority to recruit for employment abroad, per certification issued by the POEA Regional Extension Unit in Baguio City. The conviction of accused-appellant LINDA SAGAYDO for illegal recruitment and estafa was sustained subject to the MODIFICATION on the penalties.

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G.R. No. 119594 January 18, 2000 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BENZON ONG y SATE alias "BENZ ONG," accused-appellant. MENDOZA, J.: Facts: The information for illegal recruitment in large scale2 alleged — That sometime during and between the period from November, 1993 to January, 1994, in the City of Baguio, Philippines, the above-named accused, representing himself to have the capacity. contract, enlist, hire and transport Filipino workers for employment abroad, did then and there willfully, unlawfully and feloniously, for a fee, recruit and promise employment/job placement of 9 persons in Taiwan, without first obtaining or securing license or authority from the proper governmental agency. For his defense, accused-appellant testified that when complainants sought his help, he advised them to go to the POEA but complainants claimed that they do not know anyone at said office. He then offered to scout for a recruitment agency in Manila. Accused-appellant accompanied complainants to Steadfast Recruitment Agency in Manila. Issue: WON COURT ERRED IN FINDING THE ACCUSED-APPELLANT GUILTY OF ILLEGAL RECRUITMENT Held: Accused-appellant claims the when complainants filled out their respective bio-data, application forms and other documents for employment in Taiwan, they knew that they were applying for employment abroad through the Steadfast Recruitment Agency. He claims that he merely suggested to them the opportunity to work overseas but that he never advertised himself as a recruiter. The contention has no merit. Accused-appellant is charged with violation of Art. 38 of the Labor Code, as amended by Presidential Decree No. 2018, which provides that any recruitment activity, including the prohibited practices enumerated in Art. 34 of said Code, undertaken by persons who have no license or authority to engage in recruitment for overseas employments is illegal and punishable under Art. 39. Under Art. 13(b) of the Labor Code, "recruitment and placement" refer to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not; provided, that any person or entity which, in any manner, offers or promises for a fee employment to two or more persons, is considered engaged in recruitment and placement. On the other hand, "referral" is employment as the act of passing along or forwarding of an applicant for employment after initial interview of a selected applicant for employment to a selected employer, placement officer or bureau.27 On the other hand, illegal recruitment is considered an offense involving economic sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is committed by a syndicate, i.e., if it is carried out by a group of three or more persons conspiring and/or confederating with one another; or, (b) when

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illegal recruitment is committed in large scale, i.e., if it is committed against three or more persons individually or as a group. The essential elements of the crime of illegal recruitment in large scale are: (1) the accused engages in acts of recruitment and placement of workers defined under Art. 13(b) or in any prohibited activities under Art. 34 of the Labor Code; (2) the accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, either locally or overseas; and (3) the accused commits the unlawful acts against three or more persons, individually or as a group. Moreover, it is settled that a person who is convicted of illegal recruitment may, in addition, be convicted of estafa under Art. 315(2)(a) of the Revised Penal Code. There is no problem of double jeopardy because illegal recruitment is malum prohibitum, in which the criminal intent is not necessary, whereas estafa is malum in se in which the criminal intent of the accused is necessary.35 WHEREFORE, the decision appealed from is AFFIRMED.

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PEOPLE OF THE PHILIPPINES vs. REYDANTE CALONZO Y AMBROSIO G.R. Nos. 115150-55 September 27, 1996

FACTS: REYDANTE CALONZO Y AMBROSIO was charged with Illegal Recruitment in Large Scale and five (5) counts of Estafa. The Regional Trial Court found the accused guilty as charged. accused-appellant contends that the court a quo erred in giving credence to the testimonies of prosecution witnesses considering that the amounts claimed to have been collected by him did not correspond to the amounts indicated in the receipts presented by the complaining witnesses.

ISSUE: Whether the person convicted for illegal recruitment under the Labor Code can be convicted for violation of the Revised Penal Code provisions on estafa.

RULING: The Court reiterated the rule that the person convicted for illegal recruitment under the Labor Code can be convicted for violation of the Revised Penal Code provisions on estafa provided the elements of the crime are present. . In People v. Romero we said that the elements of estafa were: (a) that the accused defrauded another abuse of confidence or by means of deceit, and (b) that damage or prejudice capable of pecuniary estimation is caused to the offended party or third person

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Dee C. Chuan and Sons vs. Court of Industrial Relations 85 Phil 431, January 31, 1950 Facts: Dee C. Chuan & Sons, Inc. assails the validity of an order of the Court of Industrial Relations. The order made upon petitioner's request for authority to hire" about twelve(12) more laborers from time to time and on a temporary basis," contains the proviso that "the majority of the laborers to be employed should be native." The petition was filed pending settlement by the court of a labor dispute between the petitioner and Kaisahan Ng Mga Manggagawa sa Kahoy sa Pilipinas. At the outset, the appellant takes exception to the finding of the court below that Dee C. Chuan & Sons, Inc. is capitalized with foreign descent.

Issue: Can the the Court of Industrial Relations intervene in questions of selection of employees and workers so as to impose unconstitutional restrictions? Decision: The employer's right to hire labor is not absolute has to be admitted. "This privilege of hiring and firing ad libitum is, of course, being subjected to restraints today." Statutes are cutting in on it. And so does Commonwealth Act No. 103. The regulations of the hours of labor of employees and of the employment of women and children are familiar examples of the limitation of the employer's right in this regard. The petitioner's request for permission to employ additional; laborers is an implicit recognition of the correctness of the proposition. The power of the legislature to make regulations is subject only to the condition that they should be affected with public interest and reasonable under the circumstances. The power may be exercised directly by the law-making body or delegated by appropriate rules to the courts or administrative agencies. We are of the opinion that the order under consideration meets the test of reasonableness and public interest. The passage of Commonwealth Act No. 103 was "in conformity with the constitutional objective and . . . the historical fact that industrial and agricultural disputes have given rise to disquietude, bloodshed and revolution in our country." (Antamok Goldfields Mining Co. vs. Court of Industrial Relations, 40 Off. Gaz., 8th Supp., 173.)1 "Commonwealth Act No. 103 has precisely vested the Court of Industrial Relations with authority to intervene in all disputes between employees or strikes arising from the difference as regards wages, compensation, and other labor conditions which it may take cognizance of." (Central Azucarera de Tarlac vs. Court of Industrial Relations, 40 Off. Gaz., 3rd Supp., 319, 324.)2 Thus it has jurisdiction to determine the number of men to be laid off during off-seasons. By the same token, the court may specify that a certain proportion of the additional laborers to be employed should be Filipinos, if such condition, in the court's opinion, "is necessary or expedient for the purpose of settling disputes or doing justice to the parties."

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Encyclopaedia Britannica Inc. vs. NLRC (G.R. No. 87098 November 4, 1996) Facts: Private respondent Benjamin Limjoco was a Sales Division Manager of petitioner Encyclopaedia Britannica and was in charge of selling petitioner's products through some sales representatives. As compensation, private respondent received commissions from the products sold by his agents. He was also allowed to use petitioner's name, goodwill and logo. It was, however, agreed upon that office expenses would be deducted from private respondent's commissions. Petitioner would also be informed about appointments, promotions, and transfers of employees in private respondent's district. On June 14, 1974, private respondent Limjoco resigned from office to pursue his private business. Then on October 30, 1975, he filed a complaint against petitioner Encyclopaedia Britannica with the Department of Labor and Employment, claiming for non-payment of separation pay and other benefits, and also illegal deduction from his sales commissions. Issue: Whether respondent Limjoco is indeed an employee of the petitioner. Held: Private respondent was not an employee of the petitioner company. He had free rein in the means and methods for conducting the marketing operations. He selected his own personnel and the only reason why he had to notify the petitioner about such appointments was for purpose of deducting the employees' salaries from his commissions. Private respondent was merely an agent or an independent dealer of the petitioner. He was free to conduct his work and he was free to engage in other means of livelihood. As stated earlier, "the element of control is 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 in turn is compensated according to the result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee exists. In fine, there is nothing in the records to show or would "indicate that complainant was under the control of the petitioner" in respect of the means and methods in the performance of complainant's work. Consequently, private respondent is not entitled to the benefits prayed for. In view of the foregoing premises, the petition is hereby GRANTED, and the decision of the NLRC is hereby REVERSED AND SET ASIDE. SO ORDERED.

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INSULAR LIFE ASSURANCE CO., LTD., vs. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO, G.R. No. 84484 November 15, 1989 NARVASA, J.: FACTS : Pettitioner entered contract with Basiao for insurance policies and annuities in accordance with the existing rules and regulations" of the Company; he would receive "compensation, in the form of commissions ... as provided in the Schedule of Commissions" of the contract to "constitute a part of the consideration of ... (said) agreement;" and the "rules in ... (the Company's) Rate Book and its Agent's Manual, as well as all its circulars ... and those which may from time to time be promulgated by it, ..." were made part of said contract. Either party may terminate this contract by giving to the other notice in writing to that effect. It shall become ipso facto cancelled if the Insurance Commissioner should revoke a Certificate of Authority previously issued or should the Agent fail to renew his existing Certificate of Authority upon its expiration. The Agent shall not have any right to any commission on renewal of premiums that may be paid after the termination of this agreement for any cause whatsoever, except when the termination is due to disability or death in line of service. As to commission corresponding to any balance of the first year's premiums remaining unpaid at the termination of this agreement, the Agent shall be entitled to it if the balance of the first year premium is paid, less actual cost of collection, unless the termination is due to a violation of this contract, involving criminal liability or breach of trust Some four years later, in April 1972, the parties entered into another contract — an Agency Manager's Contract — and to implement his end of it Basiao organized an agency or office to which he gave the name M. Basiao and Associates, while concurrently fulfilling his commitments under the first contract with the Company. In May, 1979, the Company terminated the Agency Manager's Contract. After vainly seeking a reconsideration, Basiao sued the Company in a civil action and this, he was later to claim, prompted the latter to terminate also his engagement under the first contract and to stop payment of his commissions starting April 1, 1980. Basiao thereafter filed with the then Ministry of Labor a complaint 4 against the Company and its president. Without contesting the termination of the first contract, the complaint sought to recover commissions allegedly unpaid thereunder, plus attorney's fees. The respondents disputed the Ministry's jurisdiction over Basiao's claim, asserting that he was not the Company's employee, but an independent contractor and that the Company had no obligation to him for unpaid commissions under the terms and conditions of his contract. The Labor Arbiter to whom the case was assigned found for Basiao. He ruled that the underwriting agreement had established an employer-employee relationship between him and the Company, and this conferred jurisdiction on the Ministry of Labor to adjudicate his claim. Said official's decision directed payment of his unpaid commissions "... equivalent to the balance of the first year's premium remaining unpaid, at the time of his termination, of all the insurance policies solicited by ... (him) in favor of the respondent company ..." plus 10% attorney's fees. This decision was, on appeal by the Company, affirmed by the National Labor Relations Commission. Hence, the present petition for certiorari and prohibition ISSUE: Whether or not there exist an employer-employee relationship? 318

HELD: The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of, and adjudicating, said claim, being without jurisdiction to do so, as did the respondent NLRC in affirming the Arbiter's decision. This conclusion renders it unnecessary and premature to consider Basiao's claim for commissions on its merits. The Company's thesis, that no employer-employee relation in the legal and generally accepted sense existed between it and Basiao, is drawn from the terms of the contract they had entered into, which, either expressly or by necessary implication, made Basiao the master of his own time and selling methods, left to his judgment the time, place and means of soliciting insurance, set no accomplishment quotas and compensated him on the basis of results obtained. He was not bound to observe any schedule of working hours or report to any regular station; he could seek and work on his prospects anywhere and at anytime he chose to, and was free to adopt the selling methods he deemed most effective. ... In determining the existence of employer-employee relationship, the following elements are generally considered, namely: (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 employees' conduct — although the latter is the most important element (35 Am. Jur. 445). ... There is no dearth of authority holding persons similarly placed as respondent Basiao to be independent contractors, instead of employees of the parties for whom they workedThe Labor Arbiter's decision makes reference to Basiao's claim of having been connected with the Company for twenty-five years. Whatever this is meant to imply, the obvious reply would be that what is germane here is Basiao's status under the contract of July 2, 1968, not the length of his relationship with the Company.

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G.R. No. 102467 June 13, 1997 EQUITABLE BANKING CORPORATION, Chairman MANUEL L. MORALES, President & Director GEORGE L. GO, Vice-Chairman & Director RICARDO J. ROMULO, Vice-Chairman & Director JOHN C.B. GO, Director HERMINIO B. BANICO, Director FRANCISCO C. CHUA, Director PETER GO PAILIAN, Director RICARDO C. LEONG, Director JULIUS T. LIMPE and Director PEDRO A. ORTIZ, petitioners, vs. HON. NATIONAL LABOR RELATIONS COMMISSION, First Division, and RICARDO L. SADAC, respondents. VITUG, J.: FACTS: On 26 June 1989, nine lawyers of the bank's Legal Department addressed a "letter-petition" to the Chairman of the Board of Directors, accusing private respondent Sadac of abusive conduct, inefficiency, mismanagement, ineffectiveness and indecisiveness. Private respondent Sadac is the General Counsel and Vice-President for the Legal Department of petitioner bank with a monthly salary of P8, 000.00, plus an allowance of P4, 500.00 and a Christmas bonus equivalent to a two-month salary. Private respondent promptly responded and manifested an intention to file criminal, civil and administrative charges against the nine lawyers. Petitioner Morales as well as petitioner Banico, met with the complaining nine lawyers in an attempt to resolve their differences. However they were warned that if private respondent were to be retained in his position, the lawyers would resign en masse. Convinced that reconciliation was out of the question, Mr. Banico submitted a report to the Board of Directors with the findings that the specific charges against Sadac are each proven and/or established by the same nature of evidence. Two days later, Mr. Morales issued a memorandum to Sadac stating that due to the circumstances it has chosen the more compassionate option of waiting for his voluntary resignation from his employ with the Bank and that Atty. Veto has already been instructed and authorized by the Board to take over from him the functions that he is now performing in the Legal Department.. Private respondent responded with a letter addressed to Board Chairman Morales, furnishing the other members of the Board, stating that the report of Mr. Banico contained libelous statements and its implementation would lead to an illegal dismissal. He then requested for a full hearing by the Board of Directors so that he could clear his name. On 31 August 1989, Mr. Romulo wrote back expressing that the charge where he have been constructively dismissed is likewise without basis because he is free to remain in the employ of the bank if he so wish, even if the bank were to incur the tremendous expense of continuing to pay him his high salary just so it can continue to adhere to its compassionate policy of avoiding ruining the future of any of its officers by a possible dismissal for cause which is certainly bound to leak to the public. Undaunted, private respondent, in his memorandum of 07 September 1989 to the individual members of the Board of Directors, persisted in his request for a formal investigation. Having been unheeded, private respondent, on 09 November 1989, filed with the Manila arbitration branch of the NLRC, a complaint, docketed NLRC Case No. 00-11-05252-89, against herein petitioners for illegal dismissal and damages. After learning of the filing of the complaint, the Board of Directors, on 21 November 1989, adopted Resolution No. 5803 terminating the services of private respondent "in view of his belligerence" and the Board's "honest belief that the relationship" between private respondent and petitioner bank was one of "client and lawyer." Private respondent was removed from his office occupancy in the bank and ordered disentitled, starting 10 August 1989, to any compensation and other benefits. The Board instructed management to take the necessary steps to "defend itself and all the members of the Board of Directors" from private respondent's complaint. Pursuing their stand that the association between the bank and private respondent was one of a clientlawyer relationship, herein petitioners filed a motion to dismiss the complaint with the NLRC on the ground of lack of jurisdiction. Private respondent, opposing the motion, insisted on the existence of an employer-employee relationship between them. In their reply, petitioners added another ground for seeking a dismissal of the complaint, that the rule governing the duration of private respondent's term was provided for by the Rules of Court and not by the Labor Code. ISSUE:

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Whether or not there exists an employer-employee relationship between the petitioners and the private respondent. HELD: Following an exchange of position papers and other pleadings, Labor Arbiter Jovencio Ll. Mayor, Jr., on 02 October 1990, rendered a decision dismissing the complaint for lack of merit. The Labor Arbiter was convinced that the relationship between petitioner bank and private respondent was one of lawyer-client based on the functions of the latter which "only a lawyer with highly trained legal mind, can effectively discharge." The Labor Arbiter concluded that the complaint stated no cause of action because a lawyer-client relationship should instead be governed by Section 26, Rule 138, of the Rules of Court. However, on appeal, the NLRC concluded differently. It rendered a resolution reversing the decision of the Labor Arbiter. It held that private respondent was an employee of petitioner bank. In determining the existence of an employer-employee relationship, the following elements are considered: (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, with the control test generally assuming primacy in the overall consideration. The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. It is not essential, in other words, for the employer to actually supervise the performance of duties of the employee; it is enough that the former has the right to wield the power. The NLRC, in the instant case, based its finding that there existed an employer-employee relationship between petitioner bank and private respondent on these factual settings: 4) 5) 6)

In his more than eight years employment with the respondent bank, the complainant was given the usual payslips to evidence his monthly gross compensation. The respondent bank, as employer, withheld taxes due to the Bureau of Internal Revenue from the complainant's salary as employee. Moreover, the bank enrolled the complainant as its employee under the Social Security System and Medicare programs. The complainant contributed to the bank Employees' Provident Fund.

The existence of an employer-employee relationship, between the bank and private respondent brings the case within the coverage of the Labor Code. Under the Code, an employee may be validly dismissed if these requisites are attendant: (1) the dismissal is grounded on any of the causes stated in Article 282 of Labor Code, and (2) the employee has been notified in writing and given the opportunity to be heard and to defend himself as so required by Section 2 and Section 5, Rule XIV, Book V, of the Implementing Rules of the Labor Code. Article 282(c) of the Labor Code provides that "willful breach by the employee of the trust reposed in him by his employer" is a cause for the termination of employment by an employer. Ordinary breach of trust will not suffice, it must be willful and without justifiable excuse. This ground must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may fairly be made to rest; otherwise, the dismissal will be rendered illegal. WHEREFORE, the questioned Resolution of the NLRC is AFFIRMED with the following MODIFICATIONS: That private respondent shall be entitled to backwages from termination of employment until turning sixty (60) years of age (in 1995) and, thereupon, to retirement benefits in accordance with law; that private respondent shall be paid an additional amount of P5,000.00; that the award of moral and exemplary damages are deleted; and that the liability herein pronounced shall be due from petitioner bank alone, the other petitioners being absolved from solidary liability. No costs.

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