Recruitment and placement refers to the act of; CECTUHRCP

1. canvassing,
2. enlisting,
3. contracting,
4. transporting,
5. utilizing,
6. hiring or procuring workers,
7. and includes referrals,
8. contract services,
9. promising or
10. advertising for employment,
locally or abroad, whether for profit or not. When a person or entity, in any manner, offers or
promises for a fee employment to two or more persons, that person or entity shall be deemed
engaged in recruitment and placement.[39]
Article 38(a) of the Labor Code, as amended, specifies that recruitment activities undertaken
by non-licensees or non-holders of authority are deemed illegal and punishable by law. And when the
illegal recruitment is committed against three or more persons, individually or as a group, then it is
deemed committed in large scale and carries with it stiffer penalties as the same is deemed a form
of economic sabotage.[40]

But to prove illegal recruitment, it must be shown that the accused,

1. without being duly authorized by law,
2. gave complainants the distinct impression that he had the power or ability to send them abroad
for work,
3. such that the latter were convinced to part with their money in order to be employed.[41]
It is important that there must at least be a promise or offer of an employment from the person
posing as a recruiter, whether locally or abroad

Indeed, employers have the prerogative to impose

1. productivity and
2. quality standards at work.
3. They may also impose reasonable rules to ensure that the employees comply with these
standards.59
Failure to comply may be a just cause for their dismissal.60 Certainly, employers cannot be
compelled to retain the services of an employee who is guilty of acts that are inimical to the
interest of the employer.61 While the law acknowledges the plight and vulnerability of workers, it
does not authorize the oppression or self-destruction of the employer.62 Management prerogative
is
recognized
in
law
and
in
our
jurisprudence.
This prerogative, however, should not be abused. It is tempered with the employees right to
security of tenure.63
Workers are entitled to;
1. substantive and

2. procedural due process before termination.

They may not be removed from employment without a valid or just cause as determined by law
and
without
going
through
the
proper
procedure.
Security

of

tenure

for

labor

is

guaranteed

by

our

Constitution. 64cralawred

1Employees are not stripped of their security of tenure when they move to work in a different
jurisdiction. With respect to the rights of overseas Filipino workers, we follow the principle of lex
loci
contractus.
First, established is the rule that;
lex loci contractus (the law of the place where the contract is made) governs in this
jurisdiction. There is no question that the contract of employment in this case was
perfected here in the Philippines. Therefore, the Labor Code, its implementing rules and
regulations, and other laws affecting labor apply in this case. Furthermore, settled is the rule
that the courts of the forum will not enforce any foreign claim obnoxious to the forums public
policy. Here in the Philippines, employment agreements are more than contractual in nature. The
Constitution itself, in Article 13 (XIII), Section 3, guarantees the special protection of workers, to
wit:chanRoblesvirtualLawlibrary
The State shall afford;
1.
2.
3.
4.

full protection to labor,

local and overseas, organized and unorganized, and
promote full employment and
equality of employment opportunities for all.

It shall guarantee the;

5. rights of all workers to self-organization,
6. collective bargaining and negotiations, and
7. peaceful concerted activities, including the right to strike in accordance with law.
They shall be entitled to;
8. security of tenure,
9. humane conditions of work, and
10. a living wage.
They shall also participate;
11. in policy and decision-making processes affecting their rights and benefits as may be provided
by law.
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized
cause and after compliance with procedural due process requirements.
Article 282 of the Labor Code enumerates the just causes of termination by the employer.
Thus:chanRoblesvirtualLawlibrary
Art. 282. Termination by employer. An employer may terminate an employment for any of the
following causes:cralawlawlibrary
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;chanroblesvirtuallawlibrary
(b) Gross and habitual neglect by the employee of his duties;chanroblesvirtuallawlibrary
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;chanroblesvirtuallawlibrary
(d) Commission of a crime or offense by the employee against the person of his employer or any

immediate member of his family or his duly authorized representatives;

andChanRoblesVirtualawlibrary
(e) Other causes analogous to the foregoing.
The burden of proving that there is just cause for termination is on the employer. The employer must
affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. 70Failure
to show that there was valid or just cause for termination would necessarily mean that the dismissal
was illegal.71cralawred
To show that dismissal resulting from inefficiency in work is valid, it must be shown that:
1) the employer has set standards of conduct and workmanship against which the employee will be
judged;
2) the standards of conduct and workmanship must have been communicated to the employee; and
3) the communication was made at a reasonable time prior to the employees performance
assessment.
This is similar to the law and jurisprudence on probationary employees, which allow termination of the
employee only when there is
1. just cause or
2. when [the probationary employee] fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his [or her]
engagement.72cralawred
However, we do not see why the application of that ruling should be limited to probationary
employment. That rule is basic to the idea of security of tenure and due process, which are
guaranteed to all employees, whether their employment is probationary or regular.

The pre-determined standards that the employer sets are the bases for determining the probationary
employees
1.
2.
3.
4.

fitness,
propriety,
efficiency, and
qualifications as a regular employee.

Due process requires that the probationary employee be informed of such standards at the time of
his or her engagement so he or she can adjust his or her character or workmanship accordingly.
Proper adjustment to fit the standards upon which the employees qualifications will be evaluated
will increase ones chances of being positively assessed for regularization by his or her employer.
Assessing an employees work performance does not stop after regularization. The employer, on
a regular basis, determines if an employee is still qualified and efficient, based on work standards.
Based on that determination, and after complying with the due process requirements of notice and
hearing, the employer may exercise its management prerogative of terminating the employee
found unqualified.
The regular employee must constantly attempt to prove to his or her employer that he or she
meets all the standards for employment. This time, however, the standards to be met are set for
the purpose of retaining employment or promotion. The employee cannot be expected to meet
any standard of character or workmanship if such standards were not communicated to him or
her. Courts should remain vigilant on allegations of the employers failure to communicate work
standards that would govern ones employment if [these are] to discharge in good faith [their] duty
to adjudicate.73cralawred
In this case, petitioner merely alleged that respondent failed to comply with her foreign employers
work requirements and was inefficient in her work. 74No evidence was shown to support such

allegations. Petitioner did not even bother to specify what requirements were not met, what
efficiency standards were violated, or what particular acts of respondent constituted inefficiency.
There was also no showing that respondent was sufficiently informed of the standards against
which her work efficiency and performance were judged. The parties conflict as to the position
held by respondent showed that even the matter as basic as the job title was not clear.
The bare allegations of petitioner are not sufficient to support a claim that there is just cause for
termination. There is no proof that respondent was legally terminated.
A valid dismissal requires both a valid cause and adherence to the valid procedure of
dismissal.75 The employer is required to give the charged employee at least two written notices
before termination.76One of the written notices must inform the employee of the particular acts that
may cause his or her dismissal.77 The other notice must [inform] the employee of the employers
decision.78 Aside from the notice requirement, the employee must also be given an opportunity to
be heard.79crala
wred
Section 10 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995, states that overseas workers who were terminated without just, valid, or
authorized cause shall be entitled to the full reimbursement of his placement fee with interest of
twelve (12%) per annum, plus his salaries for the unexpired portion of his employment contract or
for three (3) months for every year of the unexpired term, whichever is less.
Sec. 10. MONEY CLAIMS. Notwithstanding any provision of law to the contrary, the Labor Arbiters
of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction
to hear and decide, within ninety (90) calendar days after filing of the complaint, the claims arising out
of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral, exemplary and other forms of damages.
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. This provisions [sic] shall be incorporated in the contract
for overseas employment and shall be a condition precedent for its approval. The performance bond
to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the recruitment/placement agency
is a juridical being, the corporate officers and directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims
and damages.
Such liabilities shall continue during the entire period or duration of the employment contract and shall
not be affected by any substitution, amendment or modification made locally or in a foreign country of
the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages
under this section shall be paid within four (4) months from the approval of the settlement by the
appropriate authority.
In case of termination of overseas employment without just, valid or authorized cause as defined by
law or contract, the workers shall be entitled to the full reimbursement of his placement fee with
interest of twelve (12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever is less.
Section 15 of Republic Act No. 8042 states that repatriation of the worker and the transport of his [or
her] personal belongings shall be the primary responsibility of the agency which recruited or deployed
the worker overseas. The exception is when termination of employment is due solely to the fault of
the worker,80 which as we have established, is not the case. It reads:chanRoblesvirtualLawlibrary
SEC. 15. REPATRIATION OF WORKERS; EMERGENCY REPATRIATION FUND. The repatriation
of the worker and the transport of his personal belongings shall be the primary responsibility of the
agency which recruited or deployed the worker overseas. All costs attendant to repatriation shall be
borne by or charged to the agency concerned and/or its principal. Likewise, the repatriation of
remains and transport of the personal belongings of a deceased worker and all costs attendant
thereto shall be borne by the principal and/or local agency. However, in cases where the termination
of employment is due solely to the fault of the worker, the principal/employer or agency shall not in
any manner be responsible for the repatriation of the former and/or his belongings.

....
The Labor Code81 also entitles the employee to 10% of the amount of withheld wages as attorneys
fees when the withholding is unlawful.
103
A law that does not violate the equal protection clause prescribes a reasonable
classification.104cralawred
A reasonable classification (1) must rest on substantial distinctions; (2) must be germane to the
purposes of the law; (3) must not be limited to existing conditions only; and (4) must apply equally to
all members of the same class.105cralawred
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in
accordance with Section 10 of Republic Act No. 8042.
Republic Act No. 8042, the money claims of illegally terminated overseas and local workers with
fixed-term employment were computed in the same manner.112 Their money claims were computed
based on the unexpired portions of their contracts.

Lambo vs NLRC
. There are two categories of employees paid by results: (1) those whose time and performance
are supervised by the employer. (Here, there is an element of control and supervision over the
manner as to how the work is to be performed. A piece-rate worker belongs to this category
especially if he performs his work in the company premises.); and (2) those whose time and
performance are unsupervised. (Here, the employers control is over the result of the work. Workers
onpakyao and takay basis belong to this group.) Both classes of workers are paid per unit
accomplished. Piece-rate payment is generally practiced in garment factories where work is done in
the company premises, while payment onpakyao and takay basis is commonly observed in the
agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes
difficult to quantify.[4] Petitioners belong to the first category, i.e., supervised employees.
In determining the existence of an employer-employee relationship, the following elements must
be 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 employees conduct. [5] Of these elements, the
most important criterion is whether the employer controls or has reserved the right to control the
employee not only as to the result of the work but also as to the means and methods by which the
result is to be accomplished.[6]
In this case, private respondents exercised control over the work of petitioners. As tailors,
petitioners worked in the companys premises from 8:00 a.m. to 7:00 p.m. daily, including Sundays
and holidays. The mere fact that they were paid on a piece-rate basis does not negate their status as
regular employees of private respondents. The term wage is broadly defined in Art. 97 of the Labor
Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or
ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of
compensation and does not define the essence of the relations. [7] Nor does the fact that petitioners
are not covered by the SSS affect the employer-employee relationship.
Indeed, the following factors show that petitioners, although piece-rate workers, were regular
employees of private respondents: (1) within the contemplation of Art. 280 of the Labor Code, their
work as tailors was necessary or desirable in the usual business of private respondents, which is
engaged in the tailoring business; (2) petitioners worked for private respondents throughout the year,
their employment not being dependent on a specific project or season; and, (3) petitioners worked for
private respondents for more than one year.[8]
To justify a finding of abandonment of work, there must be proof of a deliberate and unjustified
refusal on the part of an employee to resume his employment. The burden of proof is on the employer
to show an unequivocal intent on the part of the employee to discontinue employment. [10] Mere

absence is not sufficient. It must be accompanied by manifest acts unerringly pointing to the fact that
the employee simply does not want to work anymore. [11]
[12]

Abandonment is a matter of intention; it cannot be inferred or presumed from equivocal acts. [13]

To be sure, not all quitclaims are per se invalid or against public policy. But those (1) where there is
clear proof that the waiver was wangled from an unsuspecting or gullible person or (2) where the
terms of settlement are unconscionable on their face are invalid. In these cases, the law will step in to
annul the questionable transaction.[15]
Thus, quitclaims, waivers or releases are looked upon with disfavor for being contrary to public
policy and are ineffective to bar claims for the full measure of the workers legal rights. [17] An employee
who is merely constrained to accept the wages paid to him is not precluded from recovering the
difference between the amount he actually received and that amount which he should have received.
As petitioners were illegally dismissed, they are entitled to reinstatement with backwages.
the Mercury Drug case,[19] according to which the recovery of backwages should be limited to
three years without qualifications or deductions. Any award in excess of three years is null and void
as to the excess.[20]
The Labor Arbiter correctly ordered private respondents to give separation pay. Considerable time
has lapsed since petitioners dismissal, so that reinstatement would now be impractical and hardly in
the best interest of the parties.In lieu of reinstatement, separation pay should be awarded to
petitioners at the rate of one month salary for every year of service, with a fraction of at least six (6)
months of service being considered as one (1) year.[21]
The awards for overtime pay, holiday pay and 13th month pay are in accordance with our finding
that petitioners are regular employees, although paid on a piece-rate basis. [22] These awards are
based on the following computation of the Labor Arbiter:
AVELINO LAMBO
I. BACKWAGES: Jan. 17/89 - Jan. 17/92 = 36 mos.
P 64.00/day x 26 days =
1,664.00/mo. x 36 mos. = P 59,904.00
13th Mo. Pay:
P 1,664.00/yr. x 3 yrs. = 4, 992.00 P64,896.00
II. OVERTIME PAY: Jan. 17/86 - Jan. 17/89
Jan. 17/86 - April 30/87 = 15 mos. & 12 days =
(15 mos. x 26 days + 12 days) = 402 days
*2 hours = 25%
402 days x 2 hrs./day = 804 hrs.
P 32.00/day 8 hrs. =
4.00/hr. x 25% =
1.00/hr. + P4.00/hr. =

5.00/hr. x 804 hrs. = P 4,020.00

May 1/87-Sept. 30/87 = 4 mos. & 26 days =
(4 mos. x 26 days + 26 days) = 130 days
130 days x 2 hrs./day = 260 hrs.
P 41.00/day 8 hrs. =
5.12/hr. x 25% =
1.28/hr. + P5.12/hr. =
6.40/hr. x 260 hrs. = P 1,664.00
Oct. 1/87-Dec. 13/87 = 2 mos. & 11 days =
(2 mos. x 26 days + 11 days) = 63 days
63 days x 2 hrs./day = 126 hrs.
P 49.00/day 8 hrs. =
6.12/hr. x 25% =
1.53/hr. + P6.12/hr. =
7.65/hr. x 126 hrs. = P963.90
Dec. 14/87 - Jan. 17/89 = 13 mos. & 2 days =
(13 mos. x 26 days + 2 days) = 340 days
340 days x 2 hrs./day = 680 hrs.
P 64.00/day 8 hrs. =
8.00/hr. x 25% =
2.00/hr. + P8.00/hr. =
10.00/hr. x 680 hrs. = P6,800.00 P13,447.90
III. HOLIDAY PAY: Jan. 17/86 - Jan. 17/89
Jan. 17/86 - April 30/87 = 12 RHs; 8 SHs
P 32.00/day x 200% =
64.00/day x 12 days = P768.00
32.00/day x 12 days = (384.00) P384.00
32.00/day x 30% =
9.60/day x 8 days = 76.80 460.80
May 1/87 - Sept. 30/87 = 3 RHs; 3 SHs

P 41.00/day x 200% =
82.00/day x 3 days = P246.00
41.00/day x 3 days = (123.00) P123.00
41.00/day x 30% =
12.30/day x 3 days = 36.90 159.90
Oct. 1/87 - Dec. 13/87 = 1 RH
P 49.00/day x 200% =
98.00/day x 1 day = P98.00
49.00/day x 1 day = (49.00) 49.00
Dec. 14/87 - Jan. 17/89 = 9 RHs; 8 SHs
P 64.00/day x 200% =
128.00/day x 9 days = P1,152.00
64.00/day x 9 days = (576.00) P 576.00
64.00/day x 30% =
19.20/day x 8 days = 153.60 729.60 1,399.30
IV. 13TH MO. PAY: Jan. 17/86 - Jan. 17/89 = 3 yrs.
P 64.00/day x 26 days =
1,664.00/yr. x 3 yrs. = 4,992.00
V. SEPARATION PAY: Sept. 10/85 - Jan. 17/92 = 6 yrs.
1,664.00/mo. x 6 yrs. = 9,984.00
TOTAL AWARD OF AVELINO LAMBO P94,719.20
======
Sealanes digest
entitled to total permanent disability benefits.
Citing Articles 191 to 193 of the Labor Code, Section 2, Rule X of the AREC, the POEA SEC, the
parties CBA, and the employment contract between the parties.
It is expressly provided in Article 192(c)(1) of the Labor Code that a temporary total disability lasting
continuously for more than 120 days, except as otherwise provided in the Rules, shall be deemed total
and permanent. Section 2(b), Rule VII of the AREC, likewise provides that a disability is total and
permanent if as a result of the injury or sickness the employee is unable to perform any gainful
occupation for a continuous period exceeding 120 days, except as otherwise provided under Rule X
of these Rules.

As to sickness allowance, Section 2(a), Rule X of the AREC, referred to in Article 192(c)(1) of the
Labor Code, reads:chanRoblesvirtualLawlibra
Sec. 2. Period of Entitlement (a) The income benefit shall be paid beginning on the first day of
such disability. If caused by an injury or sickness it shall not be paid longer than 120 consecutive
days except where such injury or sickness still requires medical attendance beyond 120 days but not
to exceed 240 days from onset of disability in which case benefit for temporary total disability shall be
paid. However, the System may declare the total and permanent status at any time after 120 days of
continuous temporary total disability as may be warranted by the degree of actual loss or impairment
of physical or mental functions as determined by the System.

The respondent was repatriated on August 4, 2010 and immediately underwent treatment and
rehabilitation at the company-designated facility, Marine Medical Services of the Metropolitan Medical
Center. It lasted until July 20, 2011, exceeding the 240 days allowed to declare him either fit to work
or permanently disabled. Although he was given a Grade 11 disability rating on March 10, 2011, the
assessment may be deemed tentative because he continued his physical therapy sessions beyond
240 days. Yet, despite his long treatment and rehabilitation, he was eventually unable to go back to
work as a seafarer, which fact entitled him under the Dutch CBA to maximum disability benefits.
Concerning the joint and solidary liability of the manning agency, Sealanes, its foreign principal,
Arklow Shipping Netherland, and Sealanes President Dumatol, Section 10 of Republic Act (R.A.) No.
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended by
Section 7 of R.A. No. 10022, reads:chanRoblesvirtualLawlibrary
SEC. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other forms of damage.
Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the
developments
in
the
global
services
industry.
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond to
[be] filed by the recruitment/placement agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers. If the recruitment/placement agency is a
juridical being, the corporate officers and directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims
and
damages.
Such liabilities shall continue during the entire period or duration of the employment contract and shall
not be affected by any substitution, amendment or modification made locally or in a foreign country of
the said contract
Manila water and co.
"Contracting" or "subcontracting" refers to an arrangement whereby a principal agrees to put out or
farm out with a contractor or subcontractor the performance or completion of a specific job, work, or
service within a definite or predetermined period, regardless of whether such job, work, or service is
to be performed or completed within or outside the premises of the principal. [28]
Job contracting is permissible only if the following conditions are met: 1) the contractor carries on an
independent business and undertakes the contract work on his own account under his own
responsibility according to his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of the work except as to the

results thereof; and 2) the contractor has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials which are necessary in the conduct of
the business.[31]
On the other hand, the Labor Code expressly prohibits labor-only contracting. Article 106 of the Code
provides that there is labor-only contracting where the person supplying workers to an employer does
not have substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such person are performing
activities which are directly related to the principal business of the employer. In such cases, the
person or intermediary shall be considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and to the same extent as if the latter were directly
employed by him.[32]
"Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements, machineries, and work premises, actually and directly
used by the contractor or subcontractor in the performance or completion of the job, work, or service
contracted out. The "right to control" refers to the right reserved to the person for whom the services
of the contractual workers are performed, to determine not only the end to be achieved, but also the
manner and means to be used in reaching that end. [34]
In the instant case, the CA found that FCCSI is a labor-only contractor. Based on the factual findings
of the CA, FCCSI does not have substantial capital or investment to qualify as an independent
contractor, viz.:
The only rational conclusion is that it is Manila Water that provides most if not all the logistics and
equipment including service vehicles in the performance of the contracted service, notwithstanding
that the contract between FCCSI and Manila Water states that it is the Contractor which shall furnish
at its own expense all materials, tools and equipment needed to perform the tasks of collectors.
Moreover, it must be emphasized that petitioners who are trained collectors performed tasks that
cannot be simply categorized as messengerial.
As correctly ruled by the CA, FCCSIs capitalization may not be considered substantial considering
that it had close to a hundred collectors covering the east zone service area of Manila Water
customers. The allegation in the position paper of FCCSI that it serves other companies courier
needs does not cure the fact that it has insufficient capitalization to qualify as independent contractor.
Neither did FCCSI prove its allegation by substantial evidence other than by their self-serving
declarations. What is evident is that it was Manila Water that provided the equipment and service
vehicles needed in the performance of the contracted service, even if the contract between FCCSI
and Manila Water stated that it was the Contractor which shall furnish at its own expense all
materials, tools, and equipment needed to perform the tasks of collectors.
Based on the four-fold test of employer-employee relationship, Manila Water emerges as the
employer of respondent collectors. The elements to determine the existence of an employment
relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer's power to control the employee's conduct. The most
important of these elements is the employer's control of the employee's conduct, not only as to the
result of the work to be done, but also as to the means and methods to accomplish it. [36]
It should be remembered that the control test merely calls for the existence of the right to control, and
not necessarily the exercise thereof. It is not essential that the employer actually supervises the
performance of duties of the employee. It is enough that the former has a right to wield the power. [40]

Respondent bill collectors are, therefore, employees of petitioner Manila Water. It cannot be denied
that the tasks performed by respondent bill collectors are directly related to the principal business or
trade of Manila Water. Payments made by the subscribers are the lifeblood of the company, and the
respondent bill collectors are the ones who collect these payments.
The primary standard of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual business or trade of the
employer. In this case, the connection is obvious when we consider the nature of the work performed
and its relation to the scheme of the particular business or trade in its entirety. Finally, the repeated
and continuing need for the performance of the job is sufficient evidence of the necessity, if not
indispensability of the activity to the business. [41]
SYCIP VS NLRC
To determine the existence of an employer-employee relationship, case law has consistently applied
the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employers power to control the employee on the
means and methods by which the work is accomplished. The so-called control test is the most
important indicator of the presence or absence of an employer-employee relationship. [12]
The retainer fees and privileges given to De Raedt are not commonly given to ordinary employees,
who receive basic monthly salaries and other benefits under labor laws.
This pre-termination with penalty clause in the parties agreement clearly negates the existence of an
employment relationship between the parties. If De Raedt were indeed SGVs employee, she should
have been able to resign for whatever professional or personal reason at anytime, even prior to the
end of the contract between the DA and TMI or between TMI and SGV, without incurring any liability
for such resignation.
In sum, there existed no employer-employee relationship between the parties. De Raedt is an
independent contractor, who was engaged by SGV to render services to SGVs client TMI, and
ultimately to DA on the CECAP project, regarding matters in the field of her special knowledge and
training for a specific period of time. Unlike an ordinary employee, De Raedt received retainer fees
and benefits such as housing and subsistence allowances and medical insurance. De Raedts
services could be terminated on the ground of end of contract between the DA and TMI, and not on
grounds under labor laws. Though the end of the contract between the DA and TMI was not the
ground for the withdrawal of De Raedt from the CECAP, De Raedt was disengaged from the project
upon the instruction of SGVs client, TMI. Most important of all, SGV did not exercise control over the
means and methods by which De Raedt performed her duties as Sociologist. SGV did impose rules
on De Raedt, but these were necessary to ensure SGVs faithful compliance with the terms and
conditions of the Sub-Consultancy Agreement it entered into with TMI.
Section 19(C) of POEA Memorandum Circular No. 055-96 [22] known as the Revised Standard
Employment Terms and Conditions Governing the Employment of Filipino Seafarers On Board
Ocean-Going Vessels as their alternative basis in terminating the employment of private
respondent. Said Section provides as follows:
Section 19. REPATRIATION
xxxx

C. If the vessel arrives at a convenient port within a period of three months

before the expiration of his contract, the master/ employer may repatriate the
seafarer from such port provided that the seafarer shall be paid all his earned
wages. In addition, the seafarer shall also be paid his leave pay for the entire
contract period plus a termination pay equivalent to one (1) month of his basic
pay, provided, however, that this mode of termination may only be exercised
by the master/employer if the original contract period of the seafarer is at
least ten (10) months; provided, further, that the conditions for this mode of
termination shall not apply to dismissal for cause.
SECTION H. TERMINATION OF EMPLOYMENT
xxxx
6. If the vessel arrives at a convenient port within a period of three (3) months
before the expiration of the Contract, the master/employer may repatriate the seaman
from such port provided that the seaman shall be paid all his earned wages. In addition,
the seaman shall also be paid his leave pay for the entire contract period plus a
termination pay equivalent to one (1) month of his basic pay, provided, however, that
this mode of termination may only be exercised by the master/employer if the original
contact period of the seaman is at least ten (10) months; provided, further, that the
conditions for this mode of termination shall not apply to dismissal for cause.
to Section 3, Rule I of the New Rules of Procedure of the NLRC [25], defenses which are not
raised either in a motion to dismiss or in the answer are deemed waived. [26]
Accordingly, as to the requirement of notice and hearing in the case of a seafarer, the Court
has already ruled in a number of cases that before a seaman can be dismissed and discharged from
the vessel, it is required that he be given a written notice regarding the charges against him and that
he be afforded a formal investigation where he could defend himself personally or through a
representative.[29] Hence, the employer should strictly comply with the twin requirements of notice and
hearing without regard to the nature and situs of employment or the nationality of the
employer. Petitioners failed to comply with these twin requirements.
Furthermore, Trycos decision to transfer its production activities to San Rafael, Bulacan,
regardless of whether it was made pursuant to the letter of the Bureau of Animal Industry, was within
the scope of its inherent right to control and manage its enterprise effectively. While the law is
solicitous of the welfare of employees, it must also protect the right of an employer to exercise what
are clearly management prerogatives. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied. [18]
This prerogative extends to the managements right to regulate, according to its own discretion
and judgment, all aspects of employment, including the freedom to transferand reassign employees
according to the requirements of its business. [19] Managements prerogative of transferring and
reassigning employees from one area of operation to another in order to meet the requirements of the
business is, therefore, generally not constitutive of constructive dismissal. [20] Thus, the consequent
transfer of Trycos personnel, assigned to the Production Department was well within the scope of its
management prerogative.
The Court has previously declared that mere incidental inconvenience is not sufficient to
warrant a claim of constructive dismissal.[23] Objection to a transfer that is grounded solely upon the
personal inconvenience or hardship that will be caused to the employee by reason of the transfer is
not a valid reason to disobey an order of transfer.[24]
D.O. No. 21 sanctions the waiver of overtime pay in consideration of the benefits that the
employees will derive from the adoption of a compressed workweek scheme, thus:

The compressed workweek scheme was originally conceived for establishments

wishing to save on energy costs, promote greater work efficiency and lower the rate of
employee absenteeism, among others. Workers favor the scheme considering that it
would mean savings on the increasing cost of transportation fares for at least one (1)
day a week; savings on meal and snack expenses; longer weekends, or an additional
52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studies
and other personal matters, and that it will spare them for at least another day in a week
from certain inconveniences that are the normal incidents of employment, such as
commuting to and from the workplace, travel time spent, exposure to dust and motor
vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generally
observed workweek of six (6) days is shortened to five (5) days but prolonging the
working hours from Monday to Friday without the employer being obliged for pay
overtime premium compensation for work performed in excess of eight (8) hours on
weekdays, in exchange for the benefits abovecited that will accrue to the employees.

Moreover, the adoption of a compressed workweek scheme in the company will help temper
any inconvenience that will be caused the petitioners by their transfer to a farther workplace.
Article 94 of the Labor Code provides, however, that
(a)

Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly
employing less than ten (10) workers;

(b)

The employer may require an employee to work on any holiday

but such employee shall be paid a compensation equivalent to twice his
regular rate[.]
The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday
implies that the provision entitling a worker to his regular rate on holidays applies even if he does not
work.
The petitioner is likewise entitled to service incentive leave under Article 95 of the Labor Code
which provides that
(a)

Every employee who has rendered at least one year of

service shall be entitled to a yearly service incentive leave of five
days with pay.

(b)

This provision shall not apply to those who are already

enjoying the benefit herein provided, those enjoying vacation leave
with pay of at least five days and those employed in establishments
regularly employing less than ten employees or in establishment
exempted from granting this benefit by the Secretary of Labor after
considering the viability or financial condition of such establishment.

x x x x,

and to 13th month pay under Presidential Decree No. 851. [23]
As for petitioners claims for overtime pay, it must be denied, for other than the uncorroborated
affidavits of her colleagues, there is no concrete proof that she is entitled thereto. [24] And so must her
claim for allowances, no proof to her entitlement thereto having been presented.
On the deduction of 10% tithe, Article 113 of the Labor Code instructs:

ART. 113. 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 check-off 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,

as does Rule VIII, Section 10 of the Rules Implementing Book III of the Labor Code reading:
SEC. 10. Deductions from the wages of the employees may be made by the
employer in any of the following cases:
(a)

When the deductions are authorized by law, including deductions for

the insurance premiums advanced by the employer in behalf of the
employee as well as union dues where the right to check-off has been
recognized by the employer or authorized in writing by the individual
employee himself;

(b)

When the deductions are with the written authorization of the

employees for payment to a third person and the employer agrees to do
so, provided that the latter does not receive any pecuniary benefit,
directly or indirectly, from the transaction. (Emphasis and underscoring
supplied)

In the absence then of petitioners written conformity to the deduction of the 10% tithe from her salary,
the deduction made by Forest Hills was illegal.
Nonetheless, Vergara was promulgated on October 6, 2008, or more than two (2) years from the
time Munar filed his complaint and observance of the principle of prospectivity dictates
that Vergara should not operate to strip Munar of his cause of action for total and permanent disability
that had already accrued as a result of his continued inability to perform his customary work and the
failure of the company-designated physician to issue a final assessment.
Thus, based on Kestrel, if the maritime, if the maritime compensation complaint was filed prior
to 6 October 2008, the 120-day rule applies; if, on the other hand, the complaint was filed from
6 October 2008 onwards, the 240-day rule applies.
Montierro filed his Complaint on 3 December 2010, which was after the promulgation ofVergara on 6
October 2008. Hence, it is the 240-day rule that applies to this case, and not the 120-day rule.
Company doctor vs. personal doctor
Vergara also definitively settled the question how a conflict between two disability assessments
the assessment of the company-designated physician and that of the seafarers chosen
physician should be resolved.33 In that case, the Court held that there is a procedure to be followed
regarding the determination of liability for work-related death, illness or injury in the case of overseas
Filipino seafarers. The procedure is spelled out in the 2000 POEA-SEC, the execution of which is
a sine qua non requirement in deployments for overseas work. 34
The procedure is as follows: when a seafarer sustains a work-related illness or injury while on board
the vessel, his fitness for work shall be determined by the company-designated physician. The
physician has 120 days, or 240 days, if validly extended, to make the assessment. If the physician
appointed by the seafarer disagrees with the assessment of the company-designated physician, the

opinion of a third doctor may be agreed jointly between the employer and the seafarer, whose
decision shall be final and binding on them. 35
In this case, Montierro and Rickmers are covered by the provisions of the same 2000 POEA-SEC. It
is the law between them. Hence, they are bound by the mechanism for determining liability for a
disability benefits claim. Montierro, however, preempted the procedure when he filed on 3 December
2010 a Complaint for permanent disability benefits based on his chosen physicians assessment,
which was made one month before the company-designated doctor issued the final disability grading
on 3 January 2011, the 213th day of Montierros treatment.
Hence, for failure of Montierro to observe the procedure provided by the POEA-SEC, the assessment
of the company doctor should prevail.
Moreover, Rickmers exerted real efforts to provide Montierro with medical assistance. The companydesignated physician monitored Montierros case from beginning to end. Upon the formers
recommendation, Montierro even underwent arthroscopic partial medical meniscectomy of his right
knee. The company-doctor likewise gave him physical therapy. Lastly, he issued his certification on
the basis of the medical records available and the results obtained.
Further, a juxtaposition of the two conflicting assessments reveals that the certification of Montierros
doctor of choice pales in comparison with that of the company-designated physician. Fitting is the
following discussion of the CA:chanroblesvirtuallawlibrary
To contest the company-designated physician's disability assessment of Grade 10, Montierro relied
on the total permanent disability assessment of his physician of choice. In contrast to his physician's
assessment embodied in a one-page medical certificate dated December 3, 2010 which did not
even indicate any test or procedure that may have been performed or conducted when he
examined and determined Montierro's disability, however, the company-designated physician's
finding is entitled to greater weight and respect because it was arrived at after Montierro was regularly
examined in coordination with other doctors, prescribed with medications, and given physical therapy
and rehabilitation sessions from June 4, 2010 until January 3, 2011. In the face of these well-defined
facts, We find it only reasonable, if not logical, to give credence to the company physician's finding
rather than that of Montierro's physician of choice.
Having extensive personal knowledge of the seafarer's actual medical condition, and having closely,
meticulously and regularly monitored and treated his injury for an extended period, the companydesignated physician is certainly in a better position to give a more accurate evaluation of Montierro's
health condition. The disability grading given by him should therefore be given more weight than the
assessment of Montierro's physician of choice.37
Attorneys fees
On the premise that there was no showing of bad faith on the part of the employer, forcing Montierro
to litigate, the CA dropped the award of attorneys fees. We arrive at the same conclusion by using
another route.
Indeed, the general rule is that attorney's fees may not be awarded where there is no sufficient
showing of bad faith in a party's persistence in a case other than an erroneous conviction of the
righteousness of ones cause.38 The rule, however, takes a turn when it comes to labor cases.
The established rule in labor law is that the withholding of wages need not be coupled with malice or
bad faith to warrant the grant of attorneys fees under Article 111 of the Labor Code. 39 All that is
required is that lawful wages be not paid without justification, thus compelling the employee to
litigate.40
The CA thus relied on a wrong consideration in resolving the issue of attorneys fees. Be that as it
may, Montierro is not entitled to attorneys fees, even if we apply the correct rule to this case.
Montierro, as earlier mentioned, jumped the gun when he filed his complaint one month before the
company-designated doctor issued the final disability grading. Hence, there was no unlawful
withholding of benefits to speak of. Precisely because Montierro was still under treatment and
awaiting the final assessment of the company-designated physician, the formers act was premature.