PRELIMINARY CONSIDERATIONS ON JURISDICTION AND PROCEDURE

1. Existence of E-ER Relationship; Factors in Determining E-ER Relationship

Selection and Engagement of Employee
Payment of Wages
Power of Dismissal
Right of Control
2. Cause of Action must be from ER-EE Relationship
Atty. Uy vs Bueno (2006)
Lacking this evidence, the act of petitioner Uy in dismissing respondent cannot be deemed an
act as an officer of the bank. Consequently, it cannot be held that there existed an employeremployee relationship between petitioner Uy and respondent Bueno when the former allegedly
dismissed the latter. This requirement of employer-employer relationship is jurisdictional for
the provisions of the Labor Code, specifically Book VI thereof, on Post-Employment, to
apply. Since the employer-employee relationship between petitioner Uy and respondent Bueno
was not established, the labor arbiter never acquired jurisdiction over petitioner Uy.
Consequently, whether petitioner Uy was properly served with summons is
immaterial. Likewise, that she terminated the services of respondent Bueno in bad faith and
with malice is of no moment. Her liability, if any, should be determined in another forum.
3. Reasonable Causal Connection Rule
If there is a reasonable causal connection between the claim asserted and the employeremployee relations, then the case is within the jurisdiction of our labor courts. In the absence of
such nexus, it is the regular courts that have jurisdiction
4. Power to Determine Existence of E-ER
Peoples Broadcasting vs Sec. of Labor and Employment (2012)
It can be assumed that the DOLE in the exercise of its visitorial and enforcement power
somehow has to make a determination of the existence of an employer-employee
relationship. Such prerogatival determination, however, cannot be coextensive with the
visitorial and enforcement power itself. Indeed, such determination is merely preliminary,
incidental and collateral to the DOLEs primary function of enforcing labor standards
provisions. The determination of the existence of employer-employee relationship is still
primarily lodged with the NLRC. This is the meaning of the clause in cases where the
relationship of employer-employee still exists in Art. 128 (b).
Bernarte vs PBA (2011)

 We agree with respondents that once in the playing court, the referees exercise their own
independent judgment, based on the rules of the game, as to when and how a call or decision is
to be made. The referees decide whether an infraction was committed, and the PBA cannot
overrule them once the decision is made on the playing court. The referees are the only,
absolute, and final authority on the playing court. Respondents or any of the PBA officers cannot
and do not determine which calls to make or not to make and cannot control the referee when
he blows the whistle because such authority exclusively belongs to the referees. The very nature
of petitioners job of officiating a professional basketball game undoubtedly calls for freedom of
control by respondents.
5. Labor Dispute Defined
Citibank vs CA (1998)
It "includes any controversy or matter concerning terms or conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the disputants stand
in the proximate relation of employer and employee." (Art. 212 (1))
If at all, the dispute between Citibank and El Toro security agency is one regarding the
termination or non-renewal of the contract of services. This is a civil dispute. El Toro was an
independent contractor. Thus, no employer-employee relationship existed between Citibank
and the security guard members of the union in the security agency who were assigned to
secure the bank's premises and property. Hence, there was no labor dispute and no right to
strike against the bank.
6. Labor Disputes, not subject to barangay conciliation
Montoya vs Escayo (1989)
The provisions of P.D. No. 1508 requiring the submission of disputes before the barangay
Lupong Tagapayapa prior to their filing with the court or other government offices are not
applicable to labor cases.
The declared concern of the Katarungan Pambarangay Law is "to help relieve the courts of such
docket congestion and thereby enhance the quality of justice dispensed by the courts."
7. Employee benefit: a labor dispute or a civil dispute?
Smart Communications vs Astorga (2008)
SMARTs demand for payment of the market value of the car or, in the alternative, the
surrender of the car, is not a labor, but a civil, dispute. It involves the relationship of debtor and
creditor rather than employee-employer relations. As such, the dispute falls within the
jurisdiction of the regular courts.

8. Car Loan Agreement with Forfeiture clause in case of resignation

Grandteq Industrial Steel Products vs Edna Margallo (2009)
Although not strictly a labor contract, the car loan agreement herein involves a benefit extended
by the employers, Grandteq and Gonzales, to their employee, Margallo. It should benefit, and
not unduly burden, Margallo. The Court cannot, in any way, uphold a car loan agreement that
threatens the employee with the forfeiture of all the car loan payments he/she had previously
made, plus loss of the possession of the car, should the employee wish to resign; otherwise, said
agreement can then be used by the employer as an instrument to either hold said employee
hostage to the job or punish him/her for resigning.
Note: check the principal relief, replevin (Smart) vs illegal termination case (margallo)
9. Test/Factors in Determining E-ER relationship, pre-requisite for exercise of jurisdiction
General Rule: E-ER must exist between the party litigants
Fransisco vs NLRC (2006)
However, in certain cases the control test is not sufficient to give a complete picture of the
relationship between the parties, owing to the complexity of such a relationship where several
positions have been held by the worker.
The better approach would therefore be to adopt a two-tiered test involving: (1) the putative
employers power to control the employee with respect to the means and methods by which
the work is to be accomplished; and (2) the underlying economic realities of the activity or
relationship.
The proper standard of economic dependence is whether the worker is dependent on the
alleged employer for his continued employment in that line of business.
Sonza vs ABS-CBN Corporation (2004)
Individuals with special skills, expertise or talent enjoy the freedom to offer their services as
independent contractors. The right to life and livelihood guarantees this freedom to contract as
independent contractors. The right of labor to security of tenure cannot operate to deprive an
individual, possessed with special skills, expertise and talent, of his right to contract as an
independent contractor. An individual like an artist or talent has a right to render his services
without any one controlling the means and methods by which he performs his art or craft. This
Court will not interpret the right of labor to security of tenure to compel artists and talents to
render their services only as employees.
Farley Fulache et al vs ABS-CBN (2010)
This declaration unequivocally settled the petitioners employment status: they are ABS-CBNs
regular employees entitled to the benefits and privileges of regular employees. These benefits

and privileges arise from entitlements under the law (specifically, the Labor Code and its related
laws), and from their employment contract as regular ABS-CBN employees, part of which is the
CBA if they fall within the coverage of this agreement.
Javier vs Flyace Corporation (2012)
In this case, Javier was not able to persuade the Court that the above elements exist in his
case. He could not submit competent proof that Fly Ace engaged his services as a regular
employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what his
conduct should be while at work. In other words, Javiers allegations did not establish that his
relationship with Fly Ace had the attributes of an employer-employee relationship on the basis
of the above-mentioned four-fold test.
Banez vs Hon. Valdevilla (2000)
Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original
and exclusive jurisdiction over claims for damages arising from employer-employee relations
in other words, the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor
laws, but also damages governed by the Civil Code
Exception: 212(i)
SMCEU-PTGWO vs Bersamina (1990)
While it is SanMig's submission that no employer-employee relationship exists between itself,
on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor
dispute can nevertheless exist "regardless of whether the disputants stand in the proximate
relationship of employer and employee" (Article 212 [1], Labor Code) provided the controversy
concerns, among others, the terms and conditions of employment or a "change" or
"arrangement" thereof (ibid). Put differently, and as defined by law, the existence of a labor
dispute is not negative by the fact that the plaintiffs and defendants do not stand in the
proximate relation of employer and employee.
Note: If a labor dispute exists as defined by law, even if in reality, there exists no employeremployee relationship between the contending parties, the case could still fall under exclusive
and original jurisdiction of LA
Seafarer can claim damages for non-deployment, Stolt Nielsen Transportation Group, Inc. et al vs
Medequillo, Jr. (2012)
Thus, even if by the standard contract employment commences only upon actual departure of
the seafarer, this does not mean that the seafarer has no remedy in case of non-deployment
without any valid reason. The perfection of the contract, which in this case coincided with the
date of execution thereof, occurred when petitioner and respondent agreed on the object and
the cause, as well as the rest of the terms and conditions therein. The commencement of the
employer-employee relationship, as earlier discussed, would have taken place had petitioner

been actually deployed from the point of hire. Thus, even before the start of any employeremployee relationship, contemporaneous with the perfection of the employment contract was
the birth of certain rights and obligations, the breach of which may give rise to a cause of action
against the erring party. Thus, if the reverse had happened, that is the seafarer failed or refused
to be deployed as agreed upon, he would be liable for damages
I.

Labor Arbiter

Relevant Provisions: Art. 217, 124, 128 (b), 129, 233, 241, 247 LC, 262 (a), 277 Sec. 10; RA8042 as
amended by RA 10022; 2011 NLRC Rules and Procedure
1. Labor Arbiter Defined (Art. 217, now Art. 224)
NLRCs representative in a RAB
Adjudicates cases in behalf of the NLRC
Clothed with authority to conduct compulsory arbitration on cases involving termination
disputes and other cases under Art. 224
2. Powers of the Labor Arbiter (218/225)
Rule-making (Commission)
Issue compulsory processes
Investigate and hear disputes within its jurisdiction
Contempt (218), conduct ocular inspection (219)
Adjudicatory power: original and appellate
Grant of injunctive power limited to Commission, LA excluded statutorily
Injunction: mandatory or prohibitory may require, forbid, or stop the doing of an act
3. SSS authority to determine E-ER
Republic vs Asiapro Cooperative (2007)

4.