Labor Case Digests

Midterm Case
Digest Compilation
2017
LLB 242N Labor
Standards Law
KIMBERLY E. URBIZTONDO
EH 401
8/14/2017
1.THE APPLICABLE LAWS
2.BASIC PRINCIPLES
CASES:
1. Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004
2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]
3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]
4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006
5. Francisco vs. NLRC, 500 SCRA 690 [06]
6. Nogales et al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006
7. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007
8. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008
9. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009
10. Tongko vs. Manufacturer Life Insurance Co. (Phils), Inc., et al., G.R. No. 167622, January 25, 2011, En Banc, see June
29, 2010 Main Decision
11. Semblante et al., vs. Court of Appeals, et al., G.R. No. 196426, August 15, 2011
12. Bernarte vs. Phil. Basketball Association et al., G.R. No. 192084, September 14, 2011
13. Lirio vs. Genovia, G.r. No. 169757, November 23, 2011
14. Jao vs. BCC Products Sales Inc. G.R. No. 163700, April 18, 2012
15. Legend Hotel (Manila) vs. Realuyo G.R. No. 153511, July 18, 2012
16. The New Philippine Skylanders, Inc., vs. Dakila, G.r. No. 199547, Sept. 24, 2012
17. Tesoro et al., vs. Metro Manila Retreaders Inc., et al., GR No. 171482, March 12, 2014
18. Royale Homes Marketing Corp., vs. Alcantara, GR No. 195190, July 28, 2014
19. Fuji Television Network Inc. vs. Espiritu, GR No. 204944-45, December 3, 2014
20. Cabaobas et al., vs. Pepsi Cola GR No.176908, March 25, 2015
21. Begino et al., vs. ABS-CBN Corp., GR No. 199166, April 20, 2015
22. Social Security System vs. Ubana, GR No. 200114, Aug 25, 2015
23. Century Properties Inc. vs. Babiano, et al., GR No. 220978, July 5, 2016
24. Lu vs. Enopia, GR No. 197899, March 6, 2017
3.HIRING OF EMPLOYEE
CASES:
1. PT&T vs. NLRC, 272 SCRA 596 [1997]
2. Duncan Asso. Of Detailman-PTGWO vs. Glaxo Wellcome Phils., G.R. No. 162994, Sept. 17, 2004
3. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006
4. Del Monte Phils vs. Velasco, G.R. No. 153477, March 6, 2007
5. Yrasuegui vs. Phil Air Lines, G.R. No. 168081, October 17, 2008
4.WAGES & WAGE RATIONALIZATION ACT
4.AVIOLATION OF WAGE ORDER
CASES:
1. S.I.P. Food House et al., vs. Batolina, GR No. 192473, Oct 11, 2010
2. SLL International Cables Specialist vs. NLRC, GR No. 172161, March 2, 2011
3. Vergara, Jr. vs. Coca-Cola Bottlers Phils Inc. G.R. No. 176985, April 1, 2013
4. Royal Plant Workers Union vs. Coca-Cola Bottlers Phils Inc. -Cebu Plant, G.R. No. 198783, April 15, 2013
5. The National Wages & Productivity Commission et al., vs. The Alliance of Progressive Labor et al., GR No. 150326,
March 12, 2014
6. David/Yiels Hog Dealer vs. Macasio, GR No. 195466, July 2, 2014
7. Our Haus Realty Development Corp., vs. Parian et al., GR No. 204651,
August 6, 2014
8. Milan et al., vs. NLRC GR No. 202961, February 4, 2015
9. Toyota Pasig Inc vs. De Peralta, GR No. 213488, Nov 7, 2016
5.WAGE ENFORCEMENT AND RECOVERY

CASES:
1. Tiger Construction and Development Corp vs. Abay et al., GR No. 164141, Feb. 26, 2010
2. Peoples Broadcasting (Bombo Radyo Phils) vs. Sec. of DOLE et al., GR No. 179652, March 6, 2012 Resolution on the
main Decision of May 8, 2009
3. Superior Packaging Corp., vs. Balagsay et al., G.R. No. 178909, October 10, 2012
6.WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES

CASES:
1. SHS Perforated Materials, Inc. et al., vs. Diaz, GR No. 185814, Oct. 13, 2010
2. Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo, G.R. No. 188169, November 28, 2011
3. Locsin II vs. Mekeni Food Corp., GR No. 192105, December 9, 2013
4. TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union, GR No. 191714, Feb 26, 2014
5. Wesleyan University-Phils., vs. Wesleyan University-Phils., Faculty & Staff Asso., GR No. 181806, March 12, 2014
6. Bluer Than Blue Joint Ventures Co., vs. Esteban, GR No. 192582, April 7, 2014, citing2011 Nina Jewelry Manufacturing
of Metal Arts Inc. vs. Montecillo
7. Netlink Computer Inc. vs. Delmo, GR No. 160827, June 18, 2014
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Labor Standards Law Midterms Case Digests 2017 Urbiztondo EH 401
8. PLDT vs. Estranero, GR No. 192518, October 15, 2014
9. Milan et al vs. NLRC, GR No. 202961, Feb. 4, 2015
10. Galang et al., vs. Boie Takeda Chemicals Inc. et al., GR No. 183934, July 20, 2016
7.PAYMENT OF WAGES
CASES:
1. Congson vs. NLRC, 243 SCRA 260 [1995]
2. North Davao Mining vs. NLRC, 254 SCRA 721 [1996]
3. Heirs of Sara Lee vs. Rey, G.R. No. 149013, Aug. 31, 2006
8.CONDITIONS OF EMPLOYMENT
CASES:
1. San Juan De Dios Hospital vs. NLRC, 282 SCRA 316 [1997]
2. Simedarby vs. NLRC, 289 SCRA 86 [1998]
3. Phil. Airlines vs. NLRC, 302 SCRA 582 [1999]
4. Linton Commercial Co., Inc., vs. Hellera et al., G.R. No. 163147, October 10, 2007
5. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, Oct. 15, 2008
6. Dasco et al., vs. Phiktranco Service Enterprise, GR No. 211141, June 29, 2016
7. HSY Marketing Ltd., Villatique, GR No. 219569, August 17, 2016
8. A. Nate Casket Maker et al., vs. Arango, et al., GR No. 192282, October 5, 2016
9.MINIMUM LABOR STANDARD BENEFITS

CASES:
1. San Miguel Corp., vs. CA, G.R. No. 146775, Jan. 30, 2002
2. Tan vs. Lagrama, G.R. No. 151228, August 15, 2002
3. Lambo vs. NLRC, 317 SCRA 420
4. R&E Transport vs. Latag, G.R. No. 155214, Feb. 13, 2004
5. Asian Transmission vs. CA, 425 SCRA 478 [2004]
6. Autobus Transport System vs. Bautista, G.R. No. 156364, May 16, 2005
7. San Miguel Corp., vs. Del Rosario, G.R. No. 168194, Dec. 13, 2005
8. Penaranda vs. Baganga Plywood Corp., G.R. No. 159577, May 3, 2006
9. Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No. 1577745, October 19, 2007, citing
Wellington Investment vs. Trajano, 245 SCRA 561 [1995], and Odango vs. NLRC, G.R. No. 147420, June 10, 2004
10. Bahia Shipping Services vs. Chua, G.R. No. 162195, April 8, 2008, citing Cagampan vs. NLRC, 195 SCRA 533 [1998]
11. PNCC Skyway Traffic Management and Security Division Workers Organization, GR No. 171231, Feb. 17, 2010
12. Radio Mindanao Network Inc. et al., vs. Ybarola, Jr. G.R. No. 198662, Sept. 12, 2012
13. Robina Farms Cebu vs. Villa, GR No. 175869, April 18, 2016
14. Dela Salle Araneta University vs. Bernardo, GR No. 190809, February 13, 2017
10.OTHER SPECIAL BENEFITS

CASES:
1. Reyes vs. NLRC et al., G.R. No. 160233, August 8, 2007, citing Boie Takeda Chemicals vs. Dela Serna, 228 SCRA 329
[1993] & Phil. Duplicators vs. NLRC, 241 SCRA 380 [1995]
2. Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU, G.R. No. 170734, May
14, 2008
3. Universal Robina Sugar Milling Corp. vs. Caballeda, G.R. No. 156644, July 28, 2008
4. Cercado vs. Uniprom, Inc. G.R. No. 188154, October 13, 2010
5. Radio Mindanao Network Inc, et al., vs. Ybarola, Jr. et al., G.R. No. 198662, September 12, 2012
6. Padillo vs. Rural bank of Nabunturan Inc. G.r. No. 199338, Jan. 21, 2013
7. Grace Christian High School vs. Lavandera, GR No. 177845, August 20, 2014
8. Goodyear Philippines Inc. vs. Angus, GR No. 185449, November 12, 2015
9. Banco De Oro Unibank vs.Sagaysay,GR No. 214961, Sept 16, 2015
10. Perez vs. Camparts Industries Inc. GR No. 197557, October 5, 2016
11. Catotocan vs. Lourdes School of Quezon City Gr No. 213486, April 26, 2017
12. Philippine Airlines vs. Hassaram, GR. No. 217730, June 5, 2017
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1. Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004
Principle: Hosts in tv and radio programs are independent contractors (talents) and not employees of the broadcasting company
because the element of control on their means, manner and method is only minimal
Facts: In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABS-
CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President and general manager, and
Tiangco as its EVP and treasurer. Referred to in the agreement as agent, MJMDC agreed to provide Sonzas services exclusively to
ABS-CBN as talent for radio and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and P317,
000 for the second and third year.
On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program
and career. After the said letter, Sonza filed with the Department of Labor and Employment a complaint alleging that ABS-CBN did
not pay his salaries, separation pay, service incentive pay,13th month pay, signing bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer relationship existed between the parties.
However, ABS-CBN continued to remit Sonzas monthly talent fees but opened another account for the same purpose.
The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC affirmed the decision
of the Labor Arbiter. CA also affirmed the decision of NLRC.
Issue: Whether or not there was employer-employee relationship between the parties.
Ruling: Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the
employee, the payment of wages, the power of dismissal and the employers power to control the employee on the means and
methods by which the work is accomplished. The last element, the so-called "control test", is the most important element.
Sonzas services to co-host its television and radio programs are because of his peculiar talents, skills and celebrity status.
Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary
employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by
ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. All the talent fees
and benefits paid to SONZA were the result of negotiations that led to the Agreement. For violation of any provision of the
Agreement, either party may terminate their relationship. Applying the control test to the present case, we find that SONZA is not an
employee but an independent contractor.
The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test
is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the
more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely
the worker is considered an independent contractor. To perform his work, SONZA only needed his skills and talent. How SONZA
delivered his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. ABS-CBN did not instruct SONZA
how to perform his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective
programming." ABS-CBNs sole concern was the quality of the shows and their standing in the ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonzas work. A radio broadcast specialist
who works under minimal supervision is an independent contractor. Sonzas work as television and radio program host required
special skills and talent, which SONZA admittedly possesses.
ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as
independent contractors. The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-
employee relationship under labor laws. 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.
2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]
Principle: employee-employer relationship is determined by the er-ee test especially with the control test
Different kinds of worker(whether task basis, commission basis, job basis, rate basis) and/or Working hours in a day are
not the factors that determines an ee-er relationship
Facts:
Private respondent Rosalina M. Laudato (Laudato) filed a petition before the SSC for social security coverage and remittance of
unpaid monthly social security contributions against her three (3) employers. Among the respondents was herein petitioner Angelito
L. Lazaro (Lazaro), proprietor of Royal Star Marketing (Royal Star), which is engaged in the business of selling home
appliances.[3]Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to
March of 1986, Lazaro had failed during the said period, to report her to the SSC for compulsory coverage or remit Laudatos social
security contributions.[4]
Lazaro denied that Laudato was a sales supervisor of Royal Star, averring instead that she was a mere sales agent whom he paid
purely on commission basis. Lazaro alsomaintained that Laudato was not subjected to
definite hours and conditions of work. As such, Laudato could not be deemed an employee of Royal Star.[5]
Issue: WON Lazaro is entitled for the social security contributions/ WON there is an employee-employer relationship
Ruling:
Yes. It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination of employer-
employee relationship warrants the application of the control test, that is, whether the employer controls or has reserved the right to
control the employee, not only as to the result of the work done, but also as to the means and methods by which the same is
accomplished. the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee
relationship. In Grepalife v. Judico,[17] the Court upheld the existence of an employer-employee relationship between the insurance
company and its agents, despite the fact that the compensation that the agents on commission received was not paid by the company
but by the investor or the person insured.[18] The relevant factor remains, as stated earlier, whether the "employer" controls or has
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reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished.[19]
Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. In Cosmopolitan
Funeral Homes, Inc. v. Maalat,[20] the employer similarly denied the existence of an employer-employee relationship, as the
claimant according to it, was a supervisor on commission basis who did not observe normal hours of work. This Court declared that
there was an employer-employee relationship, noting that [the] supervisor, although compensated on commission basis, [is] exempt
from the observance of normal hours of work for his compensation is measured by the number of sales he makes.[21]
Laudato was a sales supervisor and not a mere agent.[22] As such, Laudato oversaw and supervised the sales agents of the company,
and thus was subject to the control of management as to how she implements its policies and its end results. We are disinclined to
reverse this finding, in the absence of countervailing evidence from Lazaro and also in light of the fact that Laudatos calling cards
from Royal Star indicate that she is indeed a sales supervisor.
3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]
CONCEPT: Applying the four-fold test, it can be inferred that respondent was an independent contractor and not an employee of
petitioner.
FACTS: Dr. De Vera via a letter #1 offered his services to PhilCom, therein proposing his plan of works required of a practitioner in
industrial medicine (see Ruling). The parties agreed and formalized respondents 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 respondents "retainer fee" will be at P4,000.00 a
month. Said contract was renewed yearly.
Retainership agreement went on from 1981 until 1996, when De Veras services were terminated by PhilCom. Hence, the illegal
dismissal case.
ISSUE: W/N an employer-employee relationship exists between PhilCom and De Vera

RULING: NO.
Applying the four-fold test to this case, we initially find that it was respondent himself who sets the parameters of what his duties
would be in offering his services to petitioner. This is borne by no less than his letter #1 which reads:
x x x I shall have the time and effort for the position of Company physician with your corporation if you deemed
it necessary. I have the necessary qualifications, training and experience required by such position and I am confident that I can
serve the best interests of your employees, medically.
My plan of works and targets shall cover the duties and responsibilities required of a practitioner in industrial
medicine which includes the following:
1. Application of preventive medicine including periodic check-up of employees;
2. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for consultation services to
employees;
3. Management and treatment of employees that may necessitate hospitalization including emergency cases and
accidents;
4. Conduct pre-employment physical check-up of prospective employees with no additional medical fee;
5. Conduct home visits whenever necessary;
6. Attend to certain medical administrative functions such as accomplishing medical forms, evaluating conditions of
employees applying for sick leave of absence and subsequently issuing proper certification, and all matters referred which are
medical in nature.
On the subject of compensation for the services that I propose to render to the corporation, you may state an offer
based on your belief that I can very well qualify for the job having worked with your organization for some time now. x x x
The fact that respondent was not considered an employee was recognized by De vera himself in a signed letter #2 to the respondent:
To carry out your memo effectively and to provide a systematic and workable time schedule which will serve the best interests of
both the present and absent employee, may I propose an extended two-hour service (1:00-3:00 P.M.) during which period I can
devote ample time to both groups depending upon the urgency of the situation. I shall readjust my private schedule to be available
for the herein proposed extended hours, should you consider this proposal.
The tenor of this letter indicates that the complainant was proposing to extend his time with the respondent and seeking additional
compensation for said extension. This shows that the respondent PHILCOM did not have control over the schedule of the
complainant as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. This is proof that the
complainant understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. If he
were an employee he could not negotiate as to his hours of work.
SC highlighted this portion of LAs decision:
"xxx After more than ten years of services to PHILCOM, the complainant would have noticed that no SSS deductions
were made on his remuneration or that the respondent was deducting the 10% tax for his fees and he surely would
have complained about them if he had considered himself an employee of PHILCOM. But he never raised those issues. An
ordinary employee would consider the SSS payments important and thus make sure they would be paid. The
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complainant never bothered to ask the respondent to remit his SSS contributions. This clearly shows that the
complainant never considered himself an employee of PHILCOM and thus, respondent need not remit anything to
the SSS in favor of the complainant."
Clearly, the elements of an employer-employee relationship are wanting in this case. We may add that the records are replete with
evidence showing that respondent had to bill petitioner for his monthly professional fees. It simply runs against the grain of common
experience to imagine that an ordinary employee has yet to bill his employer to receive his salary.
Finally, remarkably absent from the parties arrangement is the element of control, whereby the employer has reserved the right to
control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be
accomplished.
Here, PhilCom had no control over the means and methods by which Dr. De Vera went about performing his work at the company
premises. He could even embark in the private practice of his profession, not to mention the fact that respondents work hours and
the additional compensation therefor were negotiated upon by the parties. In fine, the parties themselves practically agreed on every
terms and conditions of respondents engagement, which thereby negates the element of control in their relationship. For sure,
respondent has never cited even a single instance when petitioner interfered with his work.
Had only respondent read carefully the very statutory provision invoked by him, he would have noticed that in non-hazardous
workplaces, the employer may engage the services of a physician "on retained basis." As correctly observed by the petitioner, while
it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on
the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as
employees, adding that the law, as written, only requires the employer "to retain", not employ, a part-time physician who needed
to stay in the premises of the non-hazardous workplace for two (2) hours.
Respondent takes no issue on the fact that petitioners business of telecommunications is not hazardous in nature. As such, what
applies here is the last paragraph of Article 157 which, to stress, provides that the employer may engage the services of a physician
and dentist "on retained basis", subject to such regulations as the Secretary of Labor may prescribe. The successive "retainership"
agreements of the parties definitely hue to the very statutory provision relied upon by respondent.
4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006
CONCEPT: It is not the will or word of the employer which determines the nature of employment of an employee but the nature of
the activities performed by such employee in relation to the particular business or trade of the employer.
FACTS: ABS-CBN employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs). They were
assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly compensation of
P4,000. They were issued ABS-CBN employees IDs and were required to work for a minimum of eight hours a day, including
Sundays and holidays.
They were made to perform the following tasks and duties: xxx xxx xxx and they were under the control and supervision of the
Assistant Station Manager and the News Manager.
Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA). However, since petitioner
refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA.
Nazareno et al. filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay,
Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC.
Petitioner maintained that PAs, reporters, anchors and talents occasionally "sideline" for other programs they produce, such as
drama talents in other productions. As program employees, a PAs engagement is coterminous with the completion of the program,
and may be extended/renewed provided that the program is on-going; a PA may also be assigned to new programs upon the
cancellation of one program and the commencement of another. As such program employees, their compensation is computed on a
program basis, a fixed amount for performance services irrespective of the time consumed.
ISSUE: W/N respondents are talents, as claimed by ABS-CBN, and not regular employees
RULING: NO.
We agree with respondents contention that where a person has rendered at least one year of service, regardless of the nature of the
activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity
exists, the reason being that a customary appointment is not indispensable before one may be formally declared as having attained
regular status. (See Article 280 of the Labor Code)
Citing Universal Robina Corporation vs Catapang:
The primary standard, therefore, of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined
by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety.
Also, if the employee has been performing the job for at least a year, even if the performance is not continuous and
merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but
only with respect to such activity and while such activity exists.
Citing Magsalin vs National Organization of Working Men:
In determining whether an employment should be considered regular or non-regular, the applicable test is the
reasonable connection between the particular activity performed by the employee in relation to the usual business or trade
of the employer. The standard is whether the work undertaken is necessary or desirable in the usual business or trade of the
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employer.
It is of no moment that petitioner hired respondents as "talents." The fact that respondents received pre-agreed "talent fees" instead
of salaries, that they did not observe the required office hours, and that they were permitted to join other productions during their
free time are not conclusive of the nature of their employment. Respondents cannot be considered "talents" because they are not
actors or actresses or radio specialists or mere clerks or utility employees. They are regular employees who perform several different
duties under the control and direction of ABS-CBN executives and supervisors.
What determines whether a certain employment is regular or otherwise is not the will or word of the employer, to which the worker
oftentimes acquiesces, much less the procedure of hiring the employee or the manner of paying the salary or the actual time spent at
work. It is the character of the activities performed in relation to the particular trade or business taking into account all the
circumstances, and in some cases the length of time of its performance and its continued existence. It is obvious that one year after
they were employed by petitioner, respondents became regular employees by operation of law.
The principal test is whether or not the project employees were assigned to carry out a specific project or undertaking, the duration
and scope of which were specified at the time the employees were engaged for that project.
Here, it is undisputed that respondents had continuously performed the same activities for an average of five years. Their assigned
tasks are necessary or desirable in the usual business or trade of ABS-CBN. The persisting need for their services is sufficient evidence
of the necessity and indispensability of such services to petitioners business or trade. While length of time may not be a sole
controlling test for project employment, it can be a strong factor to determine whether the employee was hired for a specific
undertaking or in fact tasked to perform functions which are vital, necessary and indispensable to the usual trade or business of the
employer.
In proving the employer-employee relationship between petitioner and respondents:
1st. In the selection and engagement of respondents, no peculiar or unique skill, talent or celebrity status was required from them
because they were merely hired through petitioners personnel department just like any ordinary employee.
2nd. The so-called "talent fees" of respondents correspond to wages given as a result of an employer-employee relationship.
Respondents did not have the power to bargain for huge talent fees, a circumstance negating independent contractual relationship.
3rd. Petitioner could always discharge respondents should it find their work unsatisfactory, and respondents are highly dependent on
the petitioner for continued work.
4th. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation
that respondents are independent contractors.
The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative
to the employer, does not furnish an independent business or professional service, such work is a regular employment of such
employee and not an independent contractor.
It follows then that respondents are entitled to the benefits provided for in the existing CBA between petitioner and its rank-and-file
employees. As regular employees, respondents are entitled to the benefits granted to all other regular employees of petitioner under
the CBA.
5. Francisco vs. NLRC, 500 SCRA 690 [06]
CONCEPT:
Employer-Employee Relationship Two-tiered Test: (1) the putative employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished (Control Test); and (2) the underlying economic realities of the activity
or relationship (Economic Conditions).
Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes
impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to an employee.
FACTS:
Francisco was hired as Accountant and Corporate Secretary of Kasei Corp. and was assigned to handle all the accounting needs of the
company. She was also designated as Liaison Officer to the City of Makati to secure permits and other licenses for the initial
operation of the company. Although she was designated as Corporate Secretary, she was not entrusted with the corporate
documents; neither did she attend any board meeting nor required to do so.
After a year, she was then designated as the Acting Manager assigned to handle recruitment of all employees and perform
management administration functions; represent the company in all dealings with government agencies; and to administer all other
matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei Corporation.
After a few years, she was replaced by Fuentes as Manager. Thereafter, her salary was reduced by P2,500.00 a month until September.
She was not paid her salary on the following month because she is no longer connected with the company. Since she was no longer
paid her salary, she did not report for work and filed an action for constructive dismissal before the labor arbiter.
Corps Contentions:
Francisco is not its employee since she performed her work at her own discretion without control and supervision of Kasei
Corporation. Petitioner had no daily time record and she came to the office any time she wanted. The company never interfered
with her work except that from time to time, the management would ask her opinion on matters relating to her profession.
Petitioner's designation as technical consultant depended solely upon the will of management. As such, her consultancy may be
terminated any time considering that her services were only temporary in nature and dependent on the needs of the corporation.
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Petitioner was not among the employees reported to the BIR. SSS records were also submitted showing that petitioner's latest
employer was Seiji Corporation.
LA: Francisco was illegally dismissed.
NLRC: affirmed LA.
CA: reversed NLRC.
CA (motion for reconsideration): denied.
ISSUES:
1. WON there was an employer-employee relationship between petitioner and private respondent Kasei Corporation; and if in
the affirmative.
2. WON petitioner was illegally dismissed.
RULING:
1. Yes. In this jurisdiction, there has been no uniform test to determine the existence of an employer-employee relation.
Generally, courts have relied on the so-called right of control test where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to
the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the
employee in the payrolls, can help in determining the existence of an employer-employee relationship. 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. Thus, the better approach would be to
adopt a two-tiered test involving: (1) the putative employer's power to control the employee with respect to the means and
methods by which the work is to be accomplished (Control Test); and (2) the underlying economic realities of the activity or
relationship (Economic Conditions).
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the
direct control and supervision of Seiji Kamura, the corporation's Technical Consultant. She reported for work regularly and
served in various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary,
with substantially the same job functions, that is, rendering accounting and tax services to the company and performing
functions necessary and desirable for the proper operation of the corporation such as securing business permits and other
licenses over an indefinite period of engagement.
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. Under the broader economic reality test, the petitioner can likewise be said to be an
employee of respondent corporation because she had served the company for six years before her dismissal, receiving check
vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social
Security contributions from August 1, 1999 to December 18, 2000.
2. Yes, she was illegally dismissed. A diminution of pay, which happened when her salary was reduced to P2,500 per month, is
prejudicial to the employee and amounts to her constructive dismissal. Constructive dismissal is an involuntary resignation
resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when
there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to an employee.
6. Nogales et al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006
CONCEPT: For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent,
acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee
or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital
had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence.
FACTS:
Corazon Nogales, who was pregnant, was under the exclusive prenatal care of Dr. Estrada. While Corazon was on her last trimester of
pregnancy, Dr. Estrada noted an increase in her blood pressure and development of leg edema indicating preeclampsia, which is a
dangerous complication of pregnancy. When Nogales started to experience mild labor pains, she and her spouse prompted to see Dr.
Estrada at his home. After examining, he advised her immediate admission to the Capitol Medical Center (CMC). Upon admission
at the CMC, Rogelio Nogales, her husband, executed and signed the Consent on Admission and Agreement and Admission
Agreement. Corazon Nogales died after giving birth due to hemorrhage, post partum.
Petitioners filed a complaint for damages with the RTC of Manila against CMC, Dr. Estrada, and the rest of CMC medical staff for her
death. In their defense, CMC pointed out that Dr. Estrada was a consultant to be considered as an independent-contractor, and that
no employer-employee relationship existed between the former and the latter.
RTC: Dr. Estrada solely liable for damages.
CA: affirmed the RTCs ruling.
ISSUE:
WON CMC is vicariously liable for the negligence of Dr. Estrada even if he is an independent contractor.
RULING:
Yes.
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In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this
principle the "doctrine of apparent authority." Under this doctrine, a hospital can be held vicariously liable for the negligent acts of
a physician providing care at the hospital, regardless of whether the physician is an independent contractor, unless the patient
knows, or should have known, that the physician is an independent contractor. For a hospital to be liable under the said doctrine, a
plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the
individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the
appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and (3) the
plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence."
The doctrine of apparent authority essentially involves two factors to determine the liability of an independent-contractor physician.
The first factor focuses on the hospital's manifestations and is sometimes described as an inquiry whether the hospital acted in a
manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or
agent of the hospital. In this regard, the hospital need not make express representations to the patient that the treating physician is
an employee of the hospital; rather a representation may be general and implied.
In the instant case, CMC impliedly held out Dr. Estrada as a member of its medical staff. Through CMC's acts, CMC clothed Dr.
Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC.
First, CMC granted staff privileges to Dr. Estrada. It extended its medical staff and facilities to him. Upon his request for Corazon's
admission, CMC, through its personnel, readily accommodated Corazon and updated Dr. Estrada of her condition. Second, CMC
made Rogelio sign consent forms printed on CMC letterhead. Prior to Corazon's admission and supposed hysterectomy, CMC asked
Rogelio to sign release forms, the contents of which reinforced Rogelio's belief that Dr. Estrada was a member of CMC's medical staff.
The second factor focuses on the patient's reliance. It is sometimes characterized as an inquiry on whether the plaintiff acted in
reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence. In this case, Rogelio testified that
he and his wife specifically chose Dr. Estrada to handle Corazons delivery because of Dr. Estradas connection with a reputable
hospital, which is the CMC. In other words, Dr. Estradas relationship with CMC played a significant role in the spouses decision in
accepting Dr. Estradas services as the ob-gyne for Corazons delivery. Moreover, as earlier stated, there is no showing that before and
during Corazons confinement at CMC, the Spouses Nogales knew or should have known that Dr. Estrada was not an employee of
CMC. CMCs defense that all it did was to extend to Corazon its facilities is untenable. The Court cannot close its eyes to the reality
that hospitals, such as CMC, are in the business of treatment.
7. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007
CONCEPT: Four-fold test in determining employee-employer relationship; employers lack of control over the means and methods
by which the work is to be accomplished by the employee means there is no employee-employer relationship
FACTS:
Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca Cola Bottlers Phils., Inc. by virtue of a
Retainer Agreement which states that: the agreement is only for a period of 1 year beginning January 1, 1988 to December 31, 1988
(although can be renewed annually); compensation is fixed at P3,800.00 per month; respondent agrees to perform the duties and
obligations in the Comprehensive Medical Plan; respondent is directly responsible to the employee concerned for any injury on the
employee during the course of his examination, treatment, or consultation, if such injury was committed through professional
negligence or incompetence or due to the other valid causes for action; respondent shall observe clinic hours at the companys
premises from Monday to Saturday of a minimum of two (2) hours each day or a maximum of two (2) hours each day or treatment
from 7:30 a.m. to 8:30 a.m. and 3:00 p.m. to 4:00 p.m., and that he shall be on call at all times during the other workshifts to attend to
emergency case/s; and that no employee-employer relationship shall exist between the parties whilst this contract is in effect, and in
case of its termination, respondent shall be entitled only to such retainer fee as may be due him at the time of termination.
The Retainer Agreement, which began on January 1, 1988, was renewed annually. The last one expired on December 31, 1993. Despite
the non-renewal of the Retainer Agreement, respondent continued to perform his functions as company doctor to Coca-Cola until he
received a letter dated March 9, 1995 from petitioner company concluding their retainership agreement effective 30 days from receipt
thereof.
But as early as September 1992, respondent was already making inquiries about his status with the petitioner company. He first
submitted a letter to the Philippine College of Occupational Medicine which replied that respondent should be considered as a
regular part-time physician and must receive all benefits of an employee under the Labor Code. Petitioner company, however, did
not take action. Hence, respondent made another inquiry with the DOLE and SSS which both advised that respondent should be
considered an employee of the company. Thereafter, respondent inquired from the management of petitioner company whether it
was agreeable to recognizing him as a regular employee. The management refused to do so.
Respondent filed a complaint with the NLRC seeking recognition as a regular employee of petitioner company and prayed for the
payment of all benefits of a regular employee, including 13th Month Pay, Cost of Living Allowance, Holiday Pay, Service Incentive
Leave Pay, and Christmas Bonus. While the case was pending, he received the letter from the company concluding their retainership
agreement, which prompted him to file an illegal dismissal case with the NLRC.
LABOR ARBITER: First case dismissed. Petitioner company lacked the power of control over respondents performance of his duties,
and recognized as valid the Retainer Agreement between the parties. Second case likewise dismissed in view of the previous finding
of Labor Arbiter that respondent is not an employee of Coca-Cola Bottlers Phils., Inc.
NLRC: Dismissed respondents appeal for lack of merit.
CA: Granted respondents appeal. Employer-employee relationship existed between the parties.
ISSUE: Whether or not employer-employee relationship exists between the parties.
RULING: No.
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Four-fold test: (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, or the so-called control test, considered to be the most important element.
The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no employer-
employee relationship exists between the parties. The Labor Arbiter and the NLRC correctly found that petitioner company lacked
the power of control over the performance by respondent of his duties. The Labor Arbiter reasoned that the Comprehensive Medical
Plan, which contains the respondents objectives, duties and obligations, does not tell respondent how to conduct his physical
examination, how to immunize, or how to diagnose and treat his patients, employees of [petitioner] company, in each case.
Petitioner company, through the Comprehensive Medical Plan, provided guidelines merely to ensure that the end result was
achieved, but did not control the means and methods by which respondent performed his assigned tasks.
Because the company lacks the power of control that the contract provides that respondent shall be directly responsible to the
employee concerned and their dependents for any injury, harm or damage caused through professional negligence, incompetence or
other valid causes of action.
Respondent is not at all further required to just sit around in the premises and wait for an emergency to occur so as to enable him
from using such hours for his own benefit and advantage. In fact, complainant maintains his own private clinic attending to his
private practice in the city, where he services his patients, bills them accordingly and if it is an employee of respondent company
who is attended to by him for special treatment that needs hospitalization or operation, this is subject to a special billing.
An employee is required to stay in the employers workplace or proximately close thereto that he cannot utilize his time effectively
and gainfully for his own purpose. Such is not the prevailing situation here. Court finds that the schedule of work and the
requirement to be on call for emergency cases do not amount to such control, but are necessary incidents to the Retainership
Agreement.
The Court also notes that the Retainership Agreement granted to both parties the power to terminate their relationship upon giving
a 30-day notice. Hence, petitioner company did not wield the sole power of dismissal or termination.
Considering that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement,
which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent.
8. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008
CONCEPT: Four-fold test in determining employee-employer relationship; under the control test, an employment relationship exists
between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to
accomplish his task.
FACTS: Ronaldo Lanzanas and Merceditha Lanzanas are doctors employed by Calamba Medical Center, Inc. They are given a
retainers fee by the hospital as well as shares from fees obtained from patients.
One time, Ronaldo was overheard by Dr. Trinidad talking to another doctor about how low the admission rate to the hospital is. That
conversation was reported to Dr. Desipeda who was then the Medical Director of the hospital.
Eventually Ronaldo was suspended. Ronaldo filed a case for Illegal Suspension in March 1998. In the same month, the rank and file
employees organized a strike against the hospital for unfair labor practices. DOLE issued a return-to-work Order to the striking
union ofcers and employees of petitioner pending resolution of the labor dispute. Desipeda eventually fired Ronaldo for his failure to
report back to work despite the DOLE Order and his alleged participation in the strike, which is not allowed under the Labor Code
for he is a managerial employee. On the other hand, when Ronaldo was suspended, Desipeda did not give Merceditha, who was not
involved in the said incident, any work schedule. She was just later informed by the Human Resource Department (HRD) officer that
that was part of petitioner's cost cutting measures. Merceditha filed for Illegal Dismissal in the NLRC. Ronaldo amended his
complaint to Illegal Dismissal.
LABOR ARBITER: Dismissed the spouses complaints for want of jurisdiction upon a finding that there was no employer-employee
relationship between the parties, the fourth requisite or the "control test" in the determination of an employment bond being absent.
NLRC and CA: Reversed.
ISSUE: Whether or not there exists an employee-employer relationship between petitioner and private respondents.
RULING: Yes.
Under the control test, an employment relationship exists between a physician and a hospital if the hospital controls both the means
and the details of the process by which the physician is to accomplish his task.
In the present case, private respondents maintained specfic work-schedules, as determined by petitioner through its medical
director, Dr. Desipeda, which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed
under pain of administrative sanctions.
That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating
room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and
orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For
control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being
enough that it has the right to wield the power.
More importantly, petitioner itself provided incontrovertible proof of the employment status of respondents, namely, the
identification cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect their status as employees, and the
classification as "salary" of their remuneration. Moreover, it enrolled respondents in the SSS and Medicare (Philhealth) program. It
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bears noting at this juncture that mandatory coverage under the SSS Law is premised on the existence of an employer-employee
relationship. It would be preposterous for an employer to report certain persons as employees and pay their SSS premiums as well as
their wages if they are not its employees.
Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee relationship exists
between the resident physicians and the training hospitals, unless there is a training agreement between them, and the training
program is duly accredited or approved by the appropriate government agency. In respondents' case, they were not undergoing any
specialization training. They were considered non-training general practitioners, assigned at the emergency rooms and ward
sections.
In addition, the Court rules that there was Illegal Dismissal for both spouses. The termination notice sent to and received by Dr.
Lanzanas on April 25, 1998 was the first and only time that he was apprised of the reason for his dismissal. He was not afforded even
the slightest opportunity to explain his side. His was a "termination upon receipt" situation. While he was priorly made to explain on
his telephone conversation with Miscala, he was not with respect to his supposed participation in the strike and failure to heed the
return-to-work order.
As for the case of Dr. Merceditha, her dismissal was worse, it having been effected without any just or authorized cause and without
observance of due process. In fact, petitioner never proffered any valid cause for her dismissal except its view that "her marriage to
[Dr. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband; [and that when [Dr. Lanzanas] declared
that he was going to boycott the scheduling of their workload by the medical doctor, he was presumed to be speaking for himself
[and] for his wife Merceditha."
9. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009
CONCEPT: To establish an employer-employee relationship, there must be a showing that the employer has the power to control the
workers conduct.
FACTS: Petitioners Escasinas and Singco are registered nurses. They were engaged by respondent doctor Pepito in her clinic at
respondent Shangri-la of which she was a retained physician. Petitioners filed with the NLRC a complaint for regularization,
underpayment of wages, non-payment of holiday pay, night shift differentail and 13th month pay against respondent, claiming that
they are regular employees of Shangri-la. Shangri-la claimed however that petitioners were not its employees but of respondent
doctor. The labor arbiter declared petitioners to be regular employees of Shangri-la and ordered the latter to grant them the wages
and benefits due to them as regular employees. It further ruled that respondent doctor was only Shangri-las in-house physician,
hence, also and employee. Upon appeal to the NLRC, it ruled in favor of the respondents and dismissed the petitioners complaint for
finding that no employer-employee relationship exists between petitioners and Shangri-la. Petitioners brought the case to the CA,
however the court ruled against their favor. Motion for reconsideration was filed but denied, hence this petition.
Petitioners insist that under the Labor Code, Shangri-la is required to hire a full-time registered nurse, hence, their engagement
should be deemed as regular employment. That respondent doctor is a labor-only contractor for she has no license or business
permit and no business name registration, which is contrary to the rules on sub-contracting. Further, they added that respondent
doctor cannot be a legitimate independent contractor, lacking as she does in substantial capital and that the clinic is being run by the
Shangri-la.
ISSUE: WON petitioners are employees of Shangri-la.
RULING: No, but they are the employees of respondent doctor.
Contrary to the petitioners argument, the Labor Code does not require the engagement of full-time nurses as regular employees of a
company. At the very least, Shangri-la is only mandated to furnish its employees with services of a full-time registered nurse but not
necessarily to hire or employ. Any agreement may provide that one party shall render services for and in behalf of another, no matter
how necessary for the latters business, even without being hired as an employee. This set-up is precisely true in the case of an
independent contractorship as well as in an agency agreement.
Existence of an employer- employee relationship is established by the presence of the following determinants: (1) the selection and
engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the
worker's conduct, with the latter assuming primacy in the overall consideration.
The Court holds that respondent doctor is a legitimate independent contractor. That Shangri-la provides the clinic premises and
medical supplies for use of its employees and guests does not necessarily prove that respondent doctor lacks substantial capital and
investment. Besides, the maintenance of a clinic and provision of medical services to its employees is required under the Labor Code,
which are not directly related to Shangri-las principal business operation of hotels and restaurants. It is unlikely that respondent
doctor would report petitioners as workers, pay their SSS premium as well as their wages if they were not indeed her employees.
With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a document, "Clinic Policies and
Employee Manual" claimed to have been prepared by respondent doctor exists, to which petitioners gave their conformity and in
which they acknowledged their co-terminus employment status. It is thus presumed that said document, and not the employee
manual being followed by Shangri-las regular workers, governs how they perform their respective tasks and responsibilities.Contrary
to petitioners contention, the various office directives issued by Shangri-las officers do not imply that it is Shangri-las management
and not respondent doctor who exercises control over them or that Shangri-la has control over how the doctor and the nurses
perform their work. In fine, as Shangri-la does not control how the work should be performed by petitioners, it is not petitioners
employer.
Petition is denied.
10. Tongko vs. Manufacturer Life Insurance Co. (Phils), Inc., et al., G.R. No. 167622, January 25, 2011, En Banc, see June 29,
2010 Main Decision
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CONCEPT: In an agency relationship, the principal is allowed to have an element of control over his agent without
intruding to the labor law concept of control for purpose of employment.
FACTS: Tongko was initially an insurance agent of Manulife who was promotedto the role of a manager. The contractual
relationship between Tongko and Manulife had two basic phases. The first phase under a Career Agents Agreement provided that it
is understood and agreed that the Agent is an independent contractor and nothing contained therein shall be construed or
interpreted as creating an employer-employee relationship between the Company and the Agent. As an agent, his tasks were to
canvass for applications for insurance products and collect money due to the company. The second phase was when Tongko was
named Unit Manager. Later on, he became a Branch Manager and subsequently became a Regional Sales Manager. Manulife
instituted manpower development programs at the regional sales management levelT where he first step was to transfor Manulife
into a big league player and to increase the number of agents to at least 1,000 strong for a start. It was found out Tongkos region was
the lowest performer in terms of recruiting. He received several letters with respect to this concern. However, this Tongko still failed
to align his directions with Managements avowed agency growth policy. Hence, he was terminated. Tongko then filed an illegal
dismissal complaint alleging that he was an employee of Manulife, thus, an employer-employee relationship exist.
LABOR ARBITER: Ruled in favor of Manulife.
NLRC: In favor of Tongko. There was an existence of employer-employee relationship.
CA: Upheld the decision of Labor Arbiter.
ISSUE: WON there was an employer-employee relationship.
RULING: NONE.
By the Agreements express terms, Tongko served as an "insurance agent" for Manulife, not as an employee. From this perspective,
the provisions of the Insurance Code cannot be disregarded as this Code expressly envisions a principal-agent relationship between
the insurance company and the insurance agent in the sale of insurance to the public. For this reason, we can take judicial notice that
as a matter of Insurance Code-based business practice, an agency relationship prevails in the insurance industry for the purpose of
selling insurance.
Significantly, evidence shows that Tongkos role as an insurance agent never changed during his relationship with Manulife. If
changes occurred at all, the changes did not appear to be in the nature of their core relationship. Tongko essentially remained an
agent, but moved up in this role through Manulifes recognition that he could use other agents approved by Manulife, but operating
under his guidance and in whose commissions he had a share. Tongko lacks the evidence on record showing that Manulife ever
exercised means-and-manner control, even to a limited extent, over Tongko during his ascent in Manulifes sales ladder.
The Insurance Code imposes obligations on both the insurance company and its agents in the performance of their respective
obligations under the Code, particularly on licenses and their renewals, on the representations to be made to potential customers,
the collection of premiums, on the delivery of insurance policies, on the matter of compensation, and on measures to ensure ethical
business practice in the industry.
The general law on agency, on the other hand, expressly allows the principal an element of control over the agent in a manner
consistent with an agency relationship. In this sense, these control measures cannot be read as indicative of labor law control.
Foremost among these are the directives that the principal may impose on the agent to achieve the assigned tasks, to the extent that
they do not involve the means and manner of undertaking these tasks. The law likewise obligates the agent to render an account; in
this sense, the principal may impose on the agent specific instructions on how an account shall be made, particularly on the matter
of expenses and reimbursements. To these extents, control can be imposed through rules and regulations without intruding into the
labor law concept of control for purposes of employment.
From jurisprudence, an important lesson that the first Insular Life case teaches us is that a commitment to abide by the rules and
regulations of an insurance company does not ipso facto make the insurance agent an employee. Neither do guidelines somehow
restrictive of the insurance agents conduct necessarily indicate "control" as this term is defined in jurisprudence. Guidelines
indicative of labor law "control," as the first Insular Life case tells us, should not merely relate to the mutually desirable
result intended by the contractual relationship; they must have the nature of dictating the means or methods to be employed
in attaining the result, or of fixing the methodology and of binding or restricting the party hired to the use of these means.
The hallmarks of an employer-employee relationship in the management system established are: exclusivity of service, control of
assignments and removal of agents under the private respondents unit, and furnishing of company facilities and materials as well as
capital described as Unit Development Fund. All these are obviously absent in the present case.
11. Semblante et al., vs. Court of Appeals, et al., G.R. No. 196426, August 15, 2011
TOPIC: Existence of employer-employee relationship and application of four-fold test. Petitioners not employees of respondents.
Petitioners perform their duties through their expertise and knowledge free from direction and control of respondents.
FACTS: This is a petitioner for certiorari under Rule 45 assailing and seeking to set aside the decision and resolution dated May 29,
2009 and Feb 23, 2010, respectively, of the CA. CA affirmed the October 18, 2006 Resolution of the NLRC.
Petitioners Marticio Semblante and Dubrick Pilar assert that they were hired by respondents-spouses Vicente and Maria Luisa Loot,
the owners of Gallera de Mandaue, which is a cockpit, as the official masiador and sentenciador, respectively, of the cockpit sometime
in 1993.
The masiador Semblante calls and takes the bets from the gamecock owners and bettors and orders the start of the fight. He also
distributes the winnings after he deducts the arriba, or the commission of the cockpit. The sentenciador Pilar oversees the proper
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gaffing of fighting cocks, determines the physical condition of the cocks and the capabilities to continue the fight and declares result.
For their services as masiador and sentenciador, Semblante receives P2,000 per week or a total of P8,000 per month, while Pilar gets
P3,500 a week or P14,000 per month. They work every Tuesday, Wednesday, Saturday, and Sunday every week, excluding monthly
derbies and cockfights held on special holidays. Their working days start at 1pm until 12 midnight, or until the early hours of the
morning depending on the needs of the cockpit. Petitioners had both been issued employees ID cards that they wear when they
work. They alleged that they have never violated any rules of the cockpit.
November 14 2003, petitioners were denied entry to the cockpit upon instruction of respondents, and were informed of their
termination effective on that date. This prompted the petitioners to file a complaint for illegal dismissal.
Respondents denied that petitioners were their employees and alleged that they were associates of respondents independent
contractors Tomas Vega. Respondents claimed that petitioners dont have regular working hours and are free to decide if they report
for work or not. The ID cards were only given to them to indicate that they were free from normal entrance fee.
LABOR ARBITER: June 16, 2004, Labor Arbiter Julie Rendoque found petitioners to be regular employees of respondents as they
performed work that was necessary and indispensable to the business of respondents. She also ruled that they were illegally
dismissed therefore entitled to backwages and separation pay.
NLRC: Respondents counsel received the decision on Sept. 14 2004. Within the 10-day appeal period, he filed the appeal with the
NLRC on Sept 24 2004 BUT without posting a cash or surety bond equivalent to the monetary award. It was only on October 11 2004
that they filed the appeal bond. Hence, in a resolution, dated Aug. 25 2005. NLRC denied appeal for non-perfection. However, in a
motion for recon, NLRC reversed its resolution on the postulate that their appeal was meritorious and the filing of an appeal bond,
albeit belated, is a substantial compliance with the rules. NLRC held that there was no Employer-Employee relationship.
CA: Decided in favor of respondents. Petitioners are akin to independent contractors who possess unique skills and talents to
distinguish them from ordinary employees.
ISSUE: WON there is an employer-employee relationship
HELD: NO. Relationship of employer-employee fails to pass four-fold test of employment. Elements of the four-fold test are: (1) the
selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) power to control employees
conduct, which is the most important element.
As found both by the NLRC and the CA, respondents had no part in petitioners selection and management. Their
compensation was also paid out of the arriba, which is a percentage deducted from the bets, and not by the petitioners. Lastly, the
petitioners performed their functions masiador and sentenciador free from the direction and control of respondents.
Petitioners relied mainly on their expertise that is characteristic of the cockfight gambling. Respondents not being petitioners
employers, could never have dismissed, legally or illegally, petitioners, since respondents were without power or prerogative to do so.
As to the procedural aspect of none posting of appeal bond, the Court held that the procedural aspect should not defeat the
substantive rights of respondents to be free from unwarranted burden of answering for an illegal dismissal for which they
were never responsible.
12. Bernarte vs. Phil. Basketball Association et al., G.R. No. 192084, September 14, 2011
TOPIC: Distinction between independent contractor and employee. Repeated hiring does not prove EE relationship. What is
important is that there is control over the means and methods by which the hired party must perform his duty.
FACTS: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees. During the
leadership of Commissioner Emilio Bernardino, they were made to sign contracts on a year-to-year basis. During the term of
Commissioner Eala, however, changes were made on the terms of their employment.
Complainant Bernarte, for instance, was not made to sign a contract during the first conference of the All-Filipino Cup which was
from February 23, 2003 to June 2003. It was only during the second conference when he was made to sign a one-and-a-half-month
contract for the period July 1 to August 5, 2003.
On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising him that his contract would not be
renewed citing his unsatisfactory performance on and off the court. It was a total shock for Bernarte who was awarded Referee of the
year in 2003. He felt that the dismissal was caused by his refusal to fix a game upon order of Ernie De Leon.
On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of referees in February 2001. On March 1,
2001, he signed a contract as trainee. Beginning 2002, he signed a yearly contract as Regular Class C referee. On May 6, 2003,
respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of
referees officiating out-of-town games. Beginning February 2004, he was no longer made to sign a contract.
Respondents aver, on the other hand, that complainants entered into two contracts of retainer with the PBA in the year 2003. The
first contract was for the period January 1, 2003 to July 15, 2003; and the second was for September 1 to December 2003. After the
lapse of the latter period, PBA decided not to renew their contracts.
LABOR ARBITER & NLRC: Declared petitioner an employee whose dismissal was illegal. Ordered the reinstatement and payment
of backwages, moral, and exemplary damages and attorneys fees.
NLRC: Affirmed Labor Arbiters judgement.

Court of Appeals: Overturned decision of labor arbiter and NLRC. Respondents did not exercise any form of control over the
means and methods by which petitioner performed his work as a basketball referee.
ISSUE: WON petitioner is an employee of respondents
HELD: NO. The existence of an employer-employee relationship is ultimately a question of fact. As a general rule, factual issues
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are beyond the province of this Court. However, this rule admits of exceptions, one of which is where there are conflicting findings
of fact between the Court of Appeals, on one hand, and the NLRC and Labor Arbiter, on the other, such as in the present case.
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 employer's 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.
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 petitioner's job of officiating a professional basketball game undoubtedly calls for freedom of control
by respondents.
Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report
for work only when PBA games are scheduled, which is three times a week spread over an average of only 105 playing days a year,
and they officiate games at an average of two hours per game; and (2) the only deductions from the fees received by the referees
are withholding taxes.
In addition, the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the former. For
a hired party to be considered an employee, the hiring party must have control over the means and methods by which the
hired party is to perform his work, which is absent in this case. The continuous rehiring by PBA of petitioner simply signifies
the renewal of the contract between PBA and petitioner, and highlights the satisfactory services rendered by petitioner warranting
such contract renewal. Conversely, if PBA decides to discontinue petitioner's services at the end of the term fixed in the contract,
whether for unsatisfactory services, or violation of the terms and conditions of the contract, or for whatever other reason, the same
merely results in the non-renewal of the contract, as in the present case. The non-renewal of the contract between the parties
does not constitute illegal dismissal of petitioner by respondents.
13. Lirio vs. Genovia, G.r. No. 169757, November 23, 2011
Topic: 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 element 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.
Facts: Respondent Genovia was hired as studio manager by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio, to
manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective
clients. He was to receive a monthly salary of P7,000 and an additional commission of P100.00 per hour as recording technician. His
work was from Monday to Friday, 9am-6pm.
Later, Lirio approached Genovia to produce an album for his daughter, Celine Mei, a former talent of ABS-CBN Star Records. Lirio
asked Genovia to compose and arrange songs for Celine and promised that he would draft a contract to assure respondent of his
compensation for such services. The album was completed, and the carrier single Genovia composed and arranged was finally aired,
but he was denied his compensation by Lirio despite several demands.
Lirio then verbally dismissed Genovia from work. Genovia filed a complaint for illegal dismissal and prayed for his reinstatement
without loss of seniority rights, or, in the alternative, that he be paid separation pay, backwages and overtime pay; and that he be
awarded unpaid commission in the amount of P2,000.00 for services rendered as a studio technician as well as moral and exemplary
damages.
As a defense, Lirio insists that Genovia could not have been hired as a studio manager, since the recording studio has no personnel
except petitioner and that Genovia verbally agreed with petitioner to co-produce the album. Under the said agreement, Lirio was to
provide all the financing, equipment and recording studio and that they would share the net profits of the album sales. Additionally,
Genovia shall be entitled to draw advances of P7,000.00 a month, which shall be deductible from his share of the net profits and only
until such time that the album has been produced [this was his explanation for the alleged salary that Genovia received from him].
Accordingly, petitioner Lirio claims that their relationship was an informal partnership under Article 1767 of the Civil Code because
(1) they agreed to contribute money, property or industry to a common fund with the intention of dividing the profits among
themselves; and (2) he had no control over the time and manner by which respondent Genovia composed or arranged the songs,
except on the result thereof.
Labor Arbiter there was an employee-employer relationship and Genovia was illegally dismissed.
NLRC reversed the ruling of the LA for failure of respondent to prove with substantial evidence the four elements to determine
employee-employer relationship.
CA set aside the ruling of NLRC.
Issue: WON there is employee-employer relationship between petitioner and respondent.
Ruling: Yes, there is employee-employer relationship.
The doctrine that "if doubt exists between the evidence presented by the employer and the employee, the scales of justice must be
tilted in favor of the latter," was applied here. Respondent Genovia was able to prove the four elements of employee-employer
relationship through documentary evidence, i.e., he was able to provide a document denominated as "payroll" certified correct by
petitioner which showed that respondent received a monthly salary of P7,000 with the corresponding deductions due to absences
incurred by respondent; and copies of petty cash vouchers showing the amounts he received and signed for in the payrolls. [Note: no
particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and relevant
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evidence to prove the relationship may be admitted.]
Petitioner Lirio wielded the power to dismiss as respondent stated that he was verbally dismissed by petitioner, and respondent,
thereafter, filed an action for illegal dismissal against petitioner.
The power of control refers merely to the existence of the power. It is not essential for the employer to actually supervise the
performance of duties of the employee, as it is sufficient that the former has a right to wield the power. Lirio certainly had the power
to check on the progress and work of respondent as stated in his Position Paper and that it was agreed that he would help and teach
respondent how to use the studio equipment.
On the other hand, petitioner failed to prove that his relationship with respondent was one of partnership since such relationship
was not supported by any written agreement.
14. Jao vs. BCC Products Sales Inc. G.R. No. 163700, April 18,
Topic: In determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the
following incidents, 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 last
element, the so-called control test, is the most important element.
Facts: Petitioner Jao maintained that respondent BCC Product Sales, Inc. and its President, respondent Terrance Ty, employed him
as comptroller starting from September 1995 with a monthly salary of P20,000.00, to handle the financial aspect of BCCs business.
He alleged that on October 19, 1995, the security guards of BCC, acting upon the instruction of Ty, barred him from entering the
premises of BCC where he then worked; that his attempts to report to work in November and December 12, 1995 were frustrated
because he continued to be barred from entering the premises of BCC; and that he filed a complaint dated December 28, 1995 for
illegal dismissal, reinstatement with full backwages, non-payment of wages, damages and attorneys fees.
Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation (SFC), the major
creditor and supplier of BCC; and that SFC had posted him as its comptroller in BCC to oversee BCCs finances and business
operations and to look after SFCs interests or investments in BCC.; that their issuance of the ID to petitioner was only for the
purpose of facilitating his entry into the BCC premises in relation to his work of overseeing the financial operations of BCC for SFC;
that the ID should not be considered as evidence of petitioners employment in BCC; that petitioner executed an affidavit in March
1996, stating, among others, as follows:
1. I am a CPA (Certified Public Accountant) by profession but presently associated with, or employed by, Sobien Food
Corporation with the same business address as abovestated;
2. In the course of my association with, or employment by, Sobien Food Corporation (SFC, for short), I have been
entrusted by my employer to oversee and supervise collections on account of receivables due SFC from its customers or
clients; for instance, certain checks due and turned over by one of SFCs customers is BCC Product Sales, Inc., operated or
run by one Terrance L. Ty, (President and General manager).
Petitioner counters, however, that the affidavit did not establish the absence of an employer-employee relationship between him and
respondents because it had been executed in March 1996, or after his employment with respondents had been terminated on
December 12, 1995; and that the affidavit referred to his subsequent employment by SFC following the termination of his
employment by BCC.
LA dismissed petitioner's complaint for want of an employer-employee relationship between the parties.
NLRC reversed the LAs decision.
CA reversed NLRCs decision. No employer-employee relationship existed between petitioner BCC and the private respondent.
Issues: WON there is employer-employee relationship?
Ruling: No, there is no employer-employee relationship.
The Court looked for the four elements of employment in this case and found it wanting.
For one, the Court found it unusual for the petitioner, who was a highly educated professional, to not secure a written document of
the terms of his employment with BCC [Note: he was not able to present any employment contract before any of the tribunals].
The Court likewise noted of the confusion about the date of his alleged illegal dismissal which provides another indicium of the
insincerity of petitioners assertion of employment by BCC. Petitioners name also did not appear in the payroll of BCC despite him
having approved the payroll as comptroller.
It can also be deduced from the March 1996 affidavit of petitioner that BCC challenged his authority to deliver some 158 checks to
SFC. Considering that he contested respondents challenge by pointing to the existing arrangements between BCC and SFC, it should
be clear that respondents did not exercise the power of control over him, because he thereby acted for the benefit and in the interest of
SFC more than of BCC.
15. Legend Hotel (Manila) vs. Realuyo G.R. No. 153511, July 18, 2012
Concept: Application of the Four-Fold Test with regards to an employee hired as a Talent and Whether Talent Fees can be
considered as a wage under the definition of the Labor Code.
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Facts: Respondent in the name of Hernani S. Realuyo, also known by his stage name as Joey Roa worked as a pianist at the
Legend Hotels Tanglaw Restaurant. He was given an intial rate at 400 pesos a night and was later increased to 750 a night. His time
of performance was from 7:00 pm to 10:00pm for 3 to 6 times a week. However, he was notified by the management of the Hotel of
their cost-cutting met
hod as his services as a pianist would no longer be needed. One of the arguments raised by the Petitioner Hotel was that there was no
employer-employee relationship, insisting that he had only a talent engaged to provide live music for three hours/ a day on two days
each week.
Labor Arbiter and NLRC: Denied the complaint because of the absence of an Employer-Employee relationship.
Court of Appeals: Reversed the NLRC. Reasoned that the Power of Control is the most decisive which is present in the case at bar:
In this regard, public respondent failed to take into consideration that in petitioner's line of work, he was supervised and controlled by
respondent's restaurant manager who at certain times would require him to perform only tagalog songs or music, or wear barong
tagalog to conform with Filipiniana motif of the place and the time of his performance is fixed by the respondents from 7:00 pm to 10:00
pm, three to six times a week. Petitioner could not choose the time of his performance.|.
Issue Number 1: Whether or not Employer-Employee relationship existed between the parties
Ruling: YES,
1.) Power of Selection, evidenced by the express written recommendation for the increase of his remuneration.
2.) Petitioner could not seek refuge behind the service contract entered into with respondent. It is the law that defines and governs
an employment relationship, whose terms are not restricted to those fixed in the written contract, for other factors, like the nature of
the work the employee has been called upon to perform, are also considered. The law affords protection to an employee, and does
not countenance any attempt to subvert its spirit and intent. Any stipulation in writing can be ignored when the employer utilizes
the stipulation to deprive the employee of his security of tenure. The inequality that characterizes employer-employee relations
generally tips the scales in favor of the employer, such that the employee is often scarcely provided real and better options.
Issue Number 2: Whether or not Talent Fees are considered as wages under the Labor Code.
Ruling: YES.
1.) Respondent was paid P400.00 per three hours of performance from 7:00 pm to 10:00 pm, three to six nights a week. Such rate of
remuneration was later increased to P750.00 upon restaurant manager Velazco's recommendation. There is no denying that the
remuneration denominated as talent fees was fixed on the basis of his talent and skill and the quality of the music he played during
the hours of performance each night, taking into account the prevailing rate for similar talents in the entertainment industry.
2.) Respondent's remuneration, albeit denominated as talent fees, was still considered as included in the term wage in the sense and
context of the Labor Code, regardless of how petitioner chose to designate the remuneration. Anent this, Article 97 (f) of the Labor
Code clearly states:
. . . wage paid to any employee shall mean the remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis,
or other method of calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for services rendered
or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to the employee.
|||
Clearly, respondent received compensation for the services he rendered as a pianist in petitioner's hotel. Petitioner cannot use the
service contract to rid itself of the consequences of its employment of respondent. There is no denying that whatever amounts he
received for his performance, howsoever designated by petitioner, were his wages. STECD
Issue Number 3: Whether or Not Legend Hotel exercised the power to control.
Ruling: YES.
A review of the records shows, however, that respondent performed his work as a pianist under petitioner's supervision and control.
Specifically, petitioner's control of both the end achieved and the manner and means used to achieve that end was demonstrated by
the following, to wit:
a. He could not choose the time of his performance, which petitioners had fixed from 7:00 pm to 10:00 pm,
three to six times a week; IDEScC
b. He could not choose the place of his performance;
c. The restaurant's manager required him at certain times to perform only Tagalog songs or music, or to wear
barong Tagalog to conform to the Filipiniana motif; and
d. He was subjected to the rules on employees' representation check and chits, a privilege granted to other
employees.
Relevantly, it is worth remembering that the employer need not actually supervise the performance of duties by the
employee, for it sufficed that the employer has the right to wield that power
16. The New Philippine Skylanders, Inc., vs. Dakila, G.r. No. 199547, Sept. 24, 2012
Concept: To determine if there was an Illegal Dismissal is premised on the existence of an employer-employee relationship.
Facts: Respondent Dakila was employed by petitioner corporation as early as 1987 and terminated for cause in April 1997 when the
corporation was sold. In May 1997, he was rehired as consultant by the petitioners under a Contract for Consultancy Services dated
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April 30, 1997.
Thereafter, in a letter dated April 19, 2007, respondent Dakila informed petitioners of his compulsory retirement effective May 2,
2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. His request, however,
was not acted upon. Instead, he was terminated from service effective May 1, 2007.
Consequently, respondent Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement benefits, under/non-
payment of wages and other benefits of a regular employee, and damages against petitioners, The New Philippine Skylanders, Inc.
and its President and General Manager, Jennifer M. Eano-Bote, before the NLRC. He averred, among others, that the consultancy
contract was a scheme to deprive him of the benefits of regularization, claiming to have assumed tasks necessary and desirable in the
trade or business of petitioners and under their direct control and supervision. In support of his claim, he submitted, among others,
copies of his time cards, Official Business Itinerary Slips, Daily Attendance Sheets and other documents prescribing the manner in
which his tasks were to be accomplished under the control of the petitioners and acknowledging his status as a regular employee of
the corporation. aTcESI
On the other hand, petitioners, in their position paper, asserted that respondent Dakila was a consultant and not their regular
employee. The latter was not included in petitioners' payroll and paid a fixed amount under the consultancy contract. He was not
required to observe regular working hours and was free to adopt means and methods to accomplish his task except as to the results
of the work required of him. Hence, no employer-employee relationship existed between them. Moreover, respondent Dakila
terminated his contract in a letter dated April 19, 2007, thus, negating his dismissal.
Labor Arbiter: respondent Dakila was illegally dismissed and ordered his reinstatement with full backwages computed from the
time of his dismissal on May 1, 2007 until his actual reinstatement as well as the payment of his unpaid benefits under the Collective
Bargaining Agreement (CBA). He declared respondent Dakila to be a regular employee on the basis of the unrebutted documentary
evidence showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental
or usually desirable and necessary in the trade or business of Petitioner Corporation for a period of ten years.
NLRC and CA: Sustained the Labor Arbiter.
Issue: Whether or not there was an employer-employee relationship as basis for illegal dismissal.
Ruling: YES.
The issue of illegal dismissal is premised on the existence of an employer-employee relationship between the parties herein. It is
essentially a question of fact, beyond the ambit of a petition for review on certiorari under Rule 45 of the Rules of Court unless there
is a clear showing of palpable error or arbitrary disregard of evidence which does not obtain in this case. Records reveal that both the
LA and the NLRC, as affirmed by the CA, have found substantial evidence to show that respondent Dakila was a regular employee
who was dismissed without cause.
In other words, refer to the decision of the Labor Arbiter which is the basis for SCs decision.
17. Tesoro et al., vs. Metro Manila Retreaders Inc., et al., GR No. 171482, March 12, 2014
Doctrine: The test in determining employer employee relationship are: (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 with respect to the means and
methods by which the work is to be accomplished. The last is called the control test, the most important element. The important
factor to consider is still the element of control over how the work itself is done, not just its end result.
Facts: Petitioners Tesoro, et al used to work as salesmen for respondents Metro Manila Retreaders, Inc., et al, collectively called
Bandag, which offered repair and retread services for used tires. In 1998, Bandag developed a franchising scheme that would enable
others to operate tire and retreading businesses using its trade name and service systems. Petitioners quit their jobs as salesmen and
entered into separate Service Franchise Agreements (SFAs) with Bandag. Under the SFA, Bandag would provide funding support to
the petitioners subject to a regular or periodic liquidation of their revolving funds. The expenses out of these funds would be
deducted from petitioners sales to determine their incomes. However, after a length of time, petitioners began to default on their
obligation to submit periodic liquidation of their operational expenses, which consequently, led Bandag to terminate their respective
SFA.
Contention of Petitioners: File a complaint for constructive dismissal, non-payment of wages, incentive pay, 13th month pay and
damages against Bandag with the NLRC. Notwithstanding the execution of the SFA, they remained employees of Bandag, the SFAs
being but a circumvention of their status as regular employees.
Contention of Respondents: Petitioners freely resigned from their employment and decided to avail the opportunity to be
independent entrepreneurs under the franchise scheme, thus, no employer employee relationship existed between them and the
petitioners.
Labor Arbiter, NLRC and CA: Dismissed the complaint. No employer employee relationship existed between Bandag and
petitioners.
Issue: WON the petitioners remained to be Bandags employees (salesmen) under the franchise scheme it entered into with them.
Ruling: No.
Franchising is a business method of expansion that allows an individual or group of individuals to market a product or a service and
to use of the patent, trademark, trade name and they systems prescribed by the owner. Bandags SFAs created on their faces an
arrangement that gave petitioners the privilege to operate and maintain Bandag branches in the way of franchises with petitioners
earning profits based on the performance of their branches.
Control
Petitioners knew that when their agreement to operate Bandags franchise branches would substantially change their former
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relationship.
The test in determining employer employee relationship are: (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 with respect to the means and methods by
which the work is to be accomplished. The last is called the control test, the most important element.
Franchisee is required to follow a certain established system. Franchisors may impose guidelines that somehow restrict the
petitioners conduct which do not necessarily indicate control.
Though Bandag continued to exercise control over petitioners work, such control is not the control contemplated in employer
employee relationships. Control in such relationships addresses the details of the day to day work. The important factor to consider
is still the element of control over how the work itself is done, not just its end result.
Wages
Petitioner cannot use the revolving funds feature of the SFAs as evidence of their employer employee relationship with Bandag.
These funds to do not represent wages but are more in the nature of capital advances for operations. Petitioners income depended
on the profits they make.
Petition is DENIED.
18. Royale Homes Marketing Corp., vs. Alcantara, GR No. 195190, July 28, 2014
Doctrine: Not every form of control that a hiring party imposes on the hired party is indicative of employer employee relationship.
Rules and regulations that merely serve as guidelines towards the achievement of a mutually desired result without dictating the
means and methods of accomplishing it do not establish the employer employee relationship.
Facts: Petitioner Royale Homes appointed respondent Alcantara as its Marketing Director for a fixed period of one year. His work
consisted mainly of marketing petitioners real estate inventories on an exclusive basis. Respondent Alcantara was reappointed for
several consecutive years, the last covering the period of January 1 to December 31, 2003 as Division 5 Vice President of Sales.
Respondent: Filed a complaint for Illegal Dismissal. He alleged that he is a regular employee, is performing tasks that are necessary
and desirable to its business, and that the company gave him P1.2 million for the services he rendered to it. He alleged that the
executive officers of petitioner told him that they were wondering why he still had the gall to come to office and sit at his table,
which, according to him amounted to his dismissal from work without any valid or just cause and in gross disregard of the proper
procedure for dismissing employees. He prayed to be reinstated to his former position without loss of seniority right and other
privileges.
Petitioner: Denied that Alcantara was an employee. It argued that the appointment paper of respondent is clear that it engaged his
services as an independent sales contractor for a fixed term of one year only and that respondent never received any salary, 13th
month pay, overtime pay and holiday pay as he was paid purely on commission basis. In addition, petitioner had no control on how
respondent would accomplish his tasks and responsibilities as he was free to solicit sales at any time and by any manner which
he may deem appropriate and necessary. In a special management meeting, respondent announced publicly and openly that he
would leave the company and that he would no longer finish the unexpired term of his contract.
Labor Arbiter: Alcantara was an employee with a fixed term of employment period and that the pre-termination of his contract was
against the law.
NLRC: Alcantara is NOT an employee but a mere independent contractor. It based its ruling mainly on the contract which does not
require Alcantara to observe regular working hours and was also free to adopt the selling methods he deemed most effective and can
even recruit sales agents for assistance. NLRC also considered the fact that Alcantara was not receiving monthly salary but was being
paid on commission basis as stipulated in the contract.
Being an independent contractor, the NLRC concluded that Alcantaras complaint is cognizable by the regular courts. Complaint
dismissed for lack of jurisdiction.
CA: Reversed NLRC. Alcantara is an employee. Applying the four-fold test, petitioner exercised some degree of control over
Alcantara. Moreover, the exclusivity clause has made Alcantara economically dependent on the petitioner. CA remanded the case to
the Labor Arbiter.
Issue: WON Alcantara was an independent contractor or an employee of Royale Homes.
Ruling: Not an employee.
The juridical relationship of the parties based on their written contract
The primary evidence of the nature of the parties relationship in this case is the written contract that they signed and executed in
pursuance of their mutual agreement. While the existence of employer employee relationship is a matter of law, the
characterization made by the parties in their contract as to the nature of their juridical relationship cannot be simply ignored,
particularly in this case where the parties written contract equivocally states their intention at the time they entered into it.
In this case, the contract provides that no employer employee relationship exists between the parties. It is clear that they did not
want to be bound by employer employee relationship at the time of the signing of the contract. Since the terms of the contract are
clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations should control.
The juridical relationship of the parties based on Control Test
In determining the existence of an employer employee relationship, this Court has generally relied on 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
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control the employee with respect to the means and methods by which the work is to be accomplished. Among the four, the most
determinative factor in ascertaining the existence of employer employee relationship is the right of control test. It is deemed to be
such an important factor that the other requisites may even be disregarded.
For where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the
means by which such end is reached, employer employee relationship is deemed to exist.
Not every form of control in indicative of employer employee relationship. A person who performs work for another and is
subjected to its rules, regulations and code of ethics does not necessarily become an employee. As long as the level of control does
not interfere with the means and methods of accomplishing the assigned tasks, the rules imposed by the hiring party on the hired
party do not amount to the labor law concept of control that is indicative of employer employee relationship. In this case, Alcantara
was not required to observe definite hours of work. Petitioner did not assign other tasks to him and he had full control over the
means and methods of accomplishing his tasks.
As the party claiming the existence of employer employee relationship, Alcantara failed to prove the elements thereof, particularly
petitioners power of control over the means and method of accomplishing the work.
Payment of wages
The element of wages is also absent in this case. As provided in the contract, Alcantaras remunerations consist only of commission
override of 0.5%, etc. There is no proof that he received fixed monthly salary. No payslip or payroll was ever presented and there is no
proof that petitioner deducted from his supposed salary withholding tax or that it registered him with SSS, PhilHealth or Pag-Ibig.
Jurisdiction
Since Alcantara was not an employee of petitioner but a mere independent contractor, Labor Arbiter has no jurisdiction over the case
and that the same is cognizable by the regular courts.
Petition is GRANTED. Decision of CA is reversed and set aside.
19. Fuji Television Network Inc. vs. Espiritu, GR No. 204944-45, December 3, 2014
CONCEPT: It is the burden of the employer to prove that a person whose services it pays for is an independent contractor rather
than a regular employee with or without a fixed term. That a person has a disease does not per se entitle the employer to terminate
his or her services.
FACTS: In 2005, Arlene S. Espiritu ("Arlene") was engaged by Fuji Television Network, Inc. ("Fuji") as a news
correspondent/producer "tasked to report Philippine news to Fuji through its Manila Bureau field office." Arlene's employment
contract initially provided for a term of 1 year but was successively renewed on a yearly basis with salary adjustment upon every
renewal.
Sometime in January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her condition. In turn, the Chief of News
Agency of Fuji, Yoshiki Aoki, informed Arlene "that the company will have a problem renewing her contract" since it would be
difficult for her to perform her job. She "insisted that she was still fit to work as certified by her attending physician."
After several verbal and written communications, Arlene and Fuji signed a non-renewal contract on May 5, 2009 where it was
stipulated that her contract would no longer be renewed after its expiration. The contract also provided that the parties release each
other from liabilities and responsibilities under the employment contract.
In consideration of the non-renewal contract, Arlene "acknowledged receipt of the total amount of US$18,050.00 representing her
monthly salary from March 2009 to May 2009, year-end bonus, mid-year bonus, and separation pay." However, Arlene affixed her
signature on the non-renewal contract with the initials "U.P." for "under protest."
The day after Arlene signed the non-renewal contract, she filed a complaint for illegal dismissal with the NCR Arbitration Branch of
NLRC. Arlene claimed that she was left with no other recourse but to sign the non-renewal contract.
Labor Arbiter Corazon C. Borbolla dismissed Arlene's complaint saying that she was an independent contractor. The National Labor
Relations Commission reversed the Labor Arbiter's decision. It held that Arlene was a regular employee.
In the assailed decision, the CA affirmed the NLRC with the modification that Fuji immediately reinstate Arlene to her position as
News Producer without loss of seniority rights, and pay her backwages, 13th-month pay, mid-year and year-end bonuses, sick leave
and vacation leave with pay until reinstated, moral damages, exemplary damages, attorney's fees, and legal interest of 12% per annum
of the total monetary awards.
ISSUE: Whether Arlene was a regular employee and whether she was illegally dismissed or not.
RULING: Arlene is a regular employee and was illegally dismissed by Fuji.
Fuji alleges that Arlene was an independent contractor, citing Sonza v. ABS-CBN and relying on the following facts: (1) she was hired
because of her skills; (2) her salary was US$1,900.00, which is higher than the normal rate; (3) she had the power to bargain with her
employer; and (4) her contract was for a fixed term.
Arlene also argues that Sonza is not applicable because she was a plain reporter for Fuji, unlike Jay Sonza who was a news anchor,
talk show host, and who enjoyed a celebrity status.
Art 280 of Labor Code classifies employees into regular, project, seasonal, and casual. It further classifies regular employees into two
kinds: (1) those "engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer";
and (2) casual employees who have "rendered at least one year of service, whether such service is continuous or broken." Another
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classification of employees, i.e., employees with fixed-term contracts, was recognized in Brent School, Inc. v. Zamora.
Fuji's argument that Arlene was an independent contractor under a fixed-term contract is contradictory. Employees under fixed-
term contracts cannot be independent contractors because in fixed-term contracts, an employer-employee relationship exists. The
test in this kind of contract is not the necessity grid desirability of the employee's activities, "but the day certain agreed upon by the
parties for the commencement and termination of the employment relationship."
Application of the four-fold test
The Court of Appeals did not err when it relied on the ruling in Dumpit-Murillo and affirmed the ruling of the NLRC finding that
Arlene was a regular employee. Arlene was hired by Fuji as a news producer, but there was no showing that she was hired
because of unique skills that would distinguish her from ordinary employees. Neither was there any showing that she had a
celebrity status. Her monthly salary amounting to US$1,900.00 appears to be a substantial sum. However, wages should not be the
conclusive factor in determining whether one is an employee or an independent contractor.
Fuji had the power to dismiss Arlene, as provided for in her contract. Her contract also indicated that Fuji had control over her work
because she was required to work for 8 hours from Monday to Friday, although on flexible time.
On the power to control, Arlene alleged that Fuji gave her instructions on what to report. Even the mode of transportation in
carrying out her functions was controlled by Fuji. Thus, Arlene was not an independent contractor.
Arlene was a regular employee with a fixed-term contract
The test for determining regular employment is whether there is a reasonable connection between the employee's activities and the
usual business of the employer. Article 280 provides that the nature of work must be "necessary or desirable in the usual business or
trade of the employer" as the test for determining regular employment.
Arlene's tasks included monitoring and getting news stories, reporting interviewing subjects in front of a video camera," "the timely
submission of news and current events reports pertaining to the Philippines, and traveling to Fuji's regional office in Thailand." She
also had to report for work in Fuji's office in Manila from Mondays to Fridays, 8 hours per day. She had no equipment and had to use
the facilities of Fuji to accomplish her tasks.
That the successive renewals of Arlene's contract indicated the necessity and desirability of her work in the usual course of Fuji's
business. Because of this, Arlene had become a regular employee with the right to security of tenure.
Fuji also argues that Arlene's contract merely expired; hence, she was not illegally dismissed.
As a regular employee, Arlene was entitled to security of tenure. Thus, on the right to security of tenure, no employee shall be
dismissed, unless there are just or authorized causes and only after compliance with procedural and substantive due process is
conducted.
The expiration of Arlene's contract does not negate the finding of illegal dismissal by Fuji. The manner by which Fuji informed
Arlene that her contract would no longer be renewed is tantamount to constructive dismissal. To make matters worse, Arlene was
asked to sign a letter of resignation prepared by Fuji. Due process must still be observed in the pre-termination of fixed-term
contracts of employment.
In addition, the CA and the NLRC found that Arlene was dismissed because of her health condition.
For dismissal under Article 284 to be valid, two requirements must be complied with: (1) the employee's disease cannot be cured
within six (6) months and his "continued employment is prohibited by law or prejudicial to his health as well as to the health of his
co-employees"; and (2) certification issued by a competent public health authority that even with proper medical treatment, the
disease cannot be cured within six (6) months. The burden of proving compliance with these requisites is on the employer.
Non-compliance leads to the conclusion that the dismissal was illegal.
There is no evidence showing that Arlene was accorded due process. After informing her employer of her lung cancer, she was not
given the chance to present medical certificates. It did not ask her how her condition would affect her work. Worse, it did not
present any certificate from a competent public health authority. What Fuji did was to inform her that her contract would no longer
be renewed, and when she did not agree, her salary was withheld. For failure of Fuji to comply with due process, Arlene was illegally
dismissed
The Court of Appeals' modification of the National Labor Relations Commission's decision was proper because the law itself provides
that illegally dismissed employees are entitled to reinstatement, backwages including allowances, and all other benefits.
On reinstatement, the No evidence was presented by Fuji to prove that reinstatement was no longer feasible. Fuji did not allege that
it ceased operations or that Arlene's position, was no longer available. Nothing in the records shows that Arlene's reinstatement
would cause an atmosphere of antagonism in the workplace.
20. Cabaobas et al., vs. Pepsi Cola GR No.176908, March 25, 2015
CONCEPT: STARE DECESIS in labor cases
FACTS: Respondent PCPPI is a domestic corporation engaged in the manufacturing, bottling and distribution of soft drink products,
which operates plants all over the country, one of which is the Tanauan Plant in Tanauan, Leyte.
In 1999, PCPPI's Tanauan Plant allegedly incurred business losses in the total amount of P29,167,390.To avert further losses, PCPPI
implemented a company-wide retrenchment program denominated as Corporate-wide Rightsizing Program (CRP) from 1999 to
2000, and retrenched 47 employees of its Tanauan Plant on July 31, 1999.
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On Sept 24, 1999, 27 of said employees, Molon, et al., filed complaints for illegal dismissal before the NLRC "Molon, et al. v. Pepsi-Cola
Products, Philippines, Inc." (FIRST BATCH)
On Jan 15, 2000, petitioners, who are permanent and regular employees, was informed of the cessation of their employment on
February 15, 2000, pursuant to PCPPI's CRP. Petitioners then filed their respective complaints for illegal dismissal before the NLRC
RAB entitled "Kempis, et al. v. Pepsi-Cola Products, Philippines, Inc." (SECOND BATCH)
Petitioners alleged that PCPPI was not facing serious financial losses because after their termination. They also alleged that PCPPI's
CRP was just designed to prevent their union, Leyte Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), from
becoming the certified bargaining agent of PCPPI's rank-and-file employees.
In its Position Paper, PCPPI countered that petitioners were dismissed pursuant to its CRP to save the company from total
bankruptcy and collapse; thus, it sent notices of termination to them and to the Department of Labor and Employment. In support of
its argument that its CRP is a valid exercise of management prerogative, PCPPI submitted audited financial statements showing that
it suffered financial reverses in 1998 in the total amount of P700,000,000, P27,000,000 of which was allegedly incurred in the
Tanauan Plant in 1999.
On December 15, 2000, Labor Arbiter Vito C. Bose rendered a Decision finding the dismissal of petitioners as illegal and ordered
reinstatement. PCPPI appealed to the NLRC of Tacloban City.
On September 11, 2002, the NLRC rendered a Consolidated Decision declaring PCPPI not guilty of union busting/unfair labor practice
and dismissing LEPCEU-ALU's Notice of Strike. It also declared the retrenchment program of Pepsi Cola Products Phils., Inc.
pursuant to its CRP, a valid exercise of management prerogatives. CA Afirmed.
BUT during the pendency of the petition, this Court rendered a Decision dated February 18, 2013 in the related case of Pepsi-Cola
Products Philippines, Inc. v. Molon pertaining to the dismissal of the complaints for illegal dismissal filed by Molon, et al. On the issue
of whether the retrenchment of the petitioners' former co-employees was in accord with law, the Court ruled that PCPPI had
validly implemented its retrenchment program. (case from the first batch of employees)
ISSUE: The legality of their dismissal pursuant to PCPPI's retrenchment program.
RULING: The petition has no merit.
In view of the Court's ruling in Pepsi-Cola Products Philippines, Inc. v. Molon, PCPPI contends that the petition for review
on certiorari should be denied and the CA decision should be affirmed under the principle of stare decisis. In that case, the Court
observes that Pepsi had validly implemented its retrenchment program and complied with all the requirements.
The Court sustains PCPPI's contention. The principle of stare decisis et non quieta movere (to adhere to precedents and not to
unsettle things which are established) is well entrenched in Article 8 of the New Civil Code which states that judicial decisions
applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines.
Guided by the jurisprudence on stare decisis, the remaining question is whether the factual circumstances of this present case are
substantially the same as the Pepsi-Cola Products Philippines, Inc. v. Molon case.
The Court rules in the affirmative.
There is no dispute that the issues, subject matters and causes of action between the parties in Pepsi-Cola Products Philippines, Inc. v.
Molon and the present case are identical, namely, the validity of PCPPI's retrenchment program, and the legality of its employees'
termination. The only difference between the two cases is the date of the employees' termination, i.e., Molon, et al. belong to the first
batch of employees retrenched on July 31, 1999, while petitioners belong to the second batch retrenched on February 15, 2000. That
the validity of the same PCPPI retrenchment program had already been passed upon and, thereafter, sustained in the related case
of Pepsi-Cola Products Philippines, Inc. v. Molon, albeit involving different parties, impels the Court to accord a similar disposition
and uphold the legality of same program.
An abandonment of the ruling in Pepsi-Cola Products Philippines, Inc. v. Molon on the same issue of the validity of PCPPI's
retrenchment program must be based only on strong and compelling reasons. After a careful review of the records, the Court finds
no such reasons were shown to obtain in this case.
Even upon evaluation of petitioners' arguments on its supposed merits, the Court still finds no reason to disturb the CA ruling that
affirmed the NLRC. At any rate, the Court finds that the September 11, 2002 NLRC Decision has exhaustively discussed PCPPI's
compliance with the requirement that for a retrenchment to be valid, such must be reasonably necessary and likely to prevent
business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real.
After all, the settled rule in quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the
legality of an employer's dismissal of an employee, and not even a preponderance of evidence is necessary, as substantial evidence is
considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might
accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.
On petitioners' contention that the true motive of the retrenchment program was to prevent their union, LEPCEU-ALU, from
becoming the certified bargaining agent of all the rank-and-file employees of PCPPI, such issue of union-busting was duly resolved
by the NLRC and absent any perceived threat to LEPCEU-ALU's existence or a violation of respondents' right to self-organization
as demonstrated by the foregoing actuations Pepsi cannot be said to have committed union busting or ULP in this case.
21. Begino et al., vs. ABS-CBN Corp., GR No. 199166, April 20, 2015
Principle: the test to determine whether employment is regular or not is the reasonable connection between the activity performed
by the employee in relation to the business or trade of the employer
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Facts:
ABS-CBN is a television and radio broadcasting corporation engaged the services of the respondents as reporters sometime
in 1996 and 2002 which they regularly renewed over the years, provided terms are ranging from three (3) months to one (1) year,
petitioners were given Project Assignment Forms which detailed, among other matters, the duration of a particular project as well as
the budget and the daily technical requirements thereof.
Specifically providing that nothing in the Talent contract shall be deemed or construed to establish an employer-employee
relationship between the parties, the petitioners averred that they were under the direct control and supervision of ABS-CBN. They
filed a complaint before the NLRC claiming that they were regular employees and are subject to underpayment of overtime pay,
holiday pay, 13th month pay, service incentive leave pay, damages and attorney's fees, petitioners alleged that they performed
functions necessary and desirable in ABS-CBN's business.
Talent Contracts and/or Project Assignment Forms, petitioners were hired as talents, to act as reporters and/or
cameramen for TV Patrol Bicol for designated periods and rates. Fully aware that they were not considered or to consider
themselves as employees of a particular production or film outfit, petitioners were supposedly engaged on the basis of the
skills, knowledge or expertise they already possessed and, for said reason, required no further training from ABS-CBN. Although
petitioners were inevitably subjected to some degree of control, the same was allegedly limited to the imposition of general
guidelines on conduct and performance, simply for the purpose of upholding the standards of the company and the strictures of the
industry. Never subjected to any control or restrictions over the means and methods by which they performed or discharged the
tasks for which their services were engaged, petitioners were, at most, briefed whenever necessary regarding the general
requirements of the project to be executed.
Contention of ABS-CBN:
Talent Contracts and/or Project Assignment Forms, petitioners were hired as talents, to act as reporters and/or
cameramen for TV Patrol Bicol for designated periods and rates. Fully aware that they were not considered or to consider themselves
as employees of a particular production or film outfit, petitioners were supposedly engaged on the basis of the skills, knowledge or
expertise they already possessed and, for said reason, required no further training from ABS-CBN. Although petitioners were
inevitably subjected to some degree of control, the same was allegedly limited to the imposition of general guidelines on conduct and
performance, simply for the purpose of upholding the standards of the company and the strictures of the industry. Never subjected
to any control or restrictions over the means and methods by which they performed or discharged the tasks for which their services
were engaged, petitioners were, at most, briefed whenever necessary regarding the general requirements of the project to be
executed.
Issue: Whether they are to be considered as regular employees or not
Ruling: To determine the existence of an employee-employer 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 employer's
power to control the employee on the means and methods by which the work is accomplished. The "control test" is generally
regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under
this test, an employer-employee relationship is said to exist where the person for whom the services are performed reserves the right
to control not only the end result but also the manner and means utilized to achieve the same.
Time and again, it has been ruled that the test to determine whether employment is regular or not is the reasonable
connection between the activity performed by the employee in relation to the business or trade of the employer. As
cameramen/editors and reporters, petitioners were undoubtedly performing functions necessary and essential to ABS-CBN's business
of broadcasting television and radio content. It matters little that petitioners' services were engaged for specified periods for
TV Patrol Bicol and that they were paid according to the budget allocated therefor. Aside from the fact that said program is a
regular weekday fare of the ABS-CBN's Regional Network Group in Naga City, the record shows that, from their initial engagement in
the aforesaid capacities, petitioners were continuously re-hired by respondents over the years.
If the employee has been performing the job for at least one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated or continuing performance as sufficient evidence of the necessity, if not
indispensability of that activity in the business.
The nature of the employment depends, after all, on the nature of the activities to be performed by the employee,
considering the nature of the employer's business, the duration and scope to be done, and, in some cases, even the length of time of
the performance and its continued existence. In finding that petitioners were regular employees, the NLRC further ruled that the
exclusivity clause and prohibitions in their Talent Contracts and/or Project Assignment Forms were likewise indicative of
respondents' control over them. The employees perform functions necessary and essential to the business of ABS-CBN which
repeatedly employed them for a long-running news program of its Regional Network Group in Naga City. In the course of said
employment, petitioners were provided the equipments they needed, were required to comply with the Company's policies which
entailed prior approval and evaluation of their performance.
22. Social Security System vs. Ubana, GR No. 200114, Aug 25, 2015
Principle: Labor Code and Civil Service Commission cannot apply but is still liable under Civil Code
Facts:
Debbie Ubana filed a complaint, alleging that she applied for employment with the SSS. However, after passing the
examinations and accomplishing all the requirements for employment, she was instead referred to DBP Service Corporation for
"transitory employment." On May 28, 1996, she was made to sign a six-month Service Contract Agreement by DBP Service
Corporation with a daily wage of only P171.00. On December 16, 2001, she was transferred to the SSS Retirees Association as Processor
at the Membership Section until her resignation on August 26, 2002. As Processor, she was paid only P229.00 daily or P5,038.00
monthly, while a regular SSS Processor receives a monthly salary of P18,622.00 or P846.45 daily wage. Her May 28, 1996 Service
Contract Agreement with DBP Service Corporation was never renewed, but she was required to work for SSS continuously under
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different assignments with a maximum daily salary of only P229.00; at the same time, she was constantly assured of being absorbed
into the SSS plantilla. Because of the oppressive and prejudicial treatment by SSS, she was forced to resign on August 26, 2002 as she
could no longer stand being exploited, the agony of dissatisfaction, anxiety, demoralization, and injustice. She asserted that she
dedicated six years of her precious time faithfully serving SSS, foregoing more satisfying employment elsewhere, yet she was merely
exploited and given empty and false promises. (emphasis emphatically supplied)
SSSs contention (1) maintains that there is a direct causal connection between respondent's claims and her employment,
which brings the subject matter within the jurisdiction of the NLRC and (2) its existing manpower services agreements with DBP
Service Corporation and SSS Retirees Association are legitimate; and that some of respondent's claims may not be entertained since
these pertain to benefits enjoyed by government employees, not by employees contracted via legitimate manpower service providers.
Debbies contention (1) her case is predicated not on labor laws but on Articles 19 and 20 of the Civil Code for petitioner's
act of exploiting her and enriching itself at her expense by not paying her the correct salary commensurate to the position she held
within SSS.
Issue: whether or not regular courts have jurisdiction over the case
Ruling:
Since there is no employer-employee relationship between the parties herein, then there is no labor dispute cognizable by
the Labor Arbiters or the NLRC. There being no employer-employee relation or any other definite or direct contract between
respondent and petitioner, the latter being responsible to the former only for the proper payment of wages under Article 19 and 20 of
CC. The very broad Article 19 of the Civil Code requires every person, 'in the exercise of his rights and in the performance of his
duties, [to] act with justice, give everyone his due, and observe honesty and good faith'.
it is indeed unfair and unjust that as, Processor who has worked with petitioner for six long years, she was paid only
P5,038.00 monthly, or P229.00 daily, while a regular SSS employee with the same designation and who performs identical functions is
paid a monthly salary of P18,622.00, or P846.45 daily wage. Petitioner may not hide under its service contracts to deprive respondent
of what is justly due her. As a vital government entity charged with ensuring social security, it should lead in setting the example by
treating everyone with justice and fairness. If it cannot guarantee the security of those who work for it, it is doubtful that it can even
discharge its directive to promote the social security of its members in line with the fundamental mandate to promote social justice
and to insure the well-being and economic security of the Filipino people.
23. Century Properties Inc. vs. Babiano, et al., GR No. 220978, July 5, 2016
Doctrine:
The existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and
providing therein that the "employee" is an independent contractor when the terms of the agreement clearly show otherwise.
The Facts:
Babiano was hired by CPI as Director for Sales who eventually was promoted for VP for Sales. He is receiving a salary, allowance and
sales commission. His employment contract contains a clauses which bars him from disclosing confidential information to business
competing with CPI while he is employed and after 1 year from termination or resignation, otherwise his compensation will be
forfeited. Concepcion was hired as a Sales Agent who was promoted to Project Director. She signed a Contract of Agency for Project
Director and receives a monthly subsidy, commission and incentive. She signed two contracts and both stipulated that no employee
employer relationship exist. After receiving that Babiano provided a competitor with information and being AWOL for 5 days, CPI
sent a notice to explain why he should not be charged with disloyalty, conflict of interest and breach of trust. He tendered his
resignation but later he was terminated 8 days later. He revealed he was accepted as VP in a competitor company. 2 days before
Babiano tendered, Concepcion also tendered. Babiano and Concepcion filed before the NLRC for non-payment of commissions and
damages against CPI. CPI maintained that the they are just agents tasked with selling projects, there was due process and
termination was based on just cause.
The Labor Arbiter ruled in favor of CPI. On Appeal, the NLRC concurred with the Labor Arbtiter, that Babianos acts constituted just
cause for termination however forefeiture is confiscatory and unreasonable. CPI went to CA. while the CA affirmed the NLRC ruling,
it ruled that there is a proper money claim from employee-employer relationship. Hence this appeal.
The Issue Before the Court

1. WON there was a breach of contract?
2. WON the CPI would be liable for unpaid commissions?
Ruling of the Court:

1. Yes. The Confidentiality and Non-Compete Clause is not limited to acts done after the cessation of employer-employee
relationship. Babiano categorically admitted that he sought employment with a competitor before his formal resignation.
This is a glaring violation of the Confidentiality and Non-Compete Clause.
2. Yes. There exists an employer-employee relationship. This is proven by (a) CPI hired and promoted Concepcion (b) the
monthly "subsidy" and cash incentives that Concepcion was receiving from CPI are actually remuneration in the concept of
wages (c) CPI had the power to discipline or even dismiss Concepcion (d) CPI possessed the power of control because in
the performance of her duties as Project Director, she did not exercise independent discretion. While the employment
contract is denominated as "Contract of Agency for Project Director" the existence of employer-employee relations could
not be negated by the mere expedient of repudiating it in a contract. since there exists an employer-employee relationship
between Concepcion and CPI, thus the CA is correct in ruling that Labor Code, it nonetheless failed to include all of
respondents' earned commissions thus, necessitating the increase in award of unpaid commissions in Concepcion's favor.
Concepcion's right to her earned commissions is a substantive right which cannot be impaired by an erroneous
computation of what she really is entitled to.
WHEREFORE, the petition is PARTLY GRANTED
24. Lu vs. Enopia, GR No. 197899, March 6, 2017
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Doctrine: Existence of Employer-Employee Relationship is a question of fact; no particular form of evidence is required to prove the
existence of an employer-employee relationship; any competent and relevant evidence to prove the relationship may be admitted
Facts:
Enupia et al were hired by Lu, a sole proprietor of a tuna company, as crew members of a fishing motor boat. Enupia et al and Lu had
an income-sharing agreement with additional back incentive. They share for the expense of the maintenance and repair of the
mother boat and the purchase of nets, ropes and payaos. Lu proposed a joint venture agreement (JVA) between him and Enupia et al.
Lu alleged that Salili, the master fisherman had informed him that the respondents refused to sign the agreement and have decided
to return the vessel. Lu terminated them immediately. Enupia et al filed for illegal dismissal and monetary claims. The case was not
settled amicably. Enupia et al alleged that their refusal to sign the JVA is not a cause of action for termination. They asked for a
refund of the share taken from their income for the repair and maintenance of boat as well as the purchase of materials. Lu denied
dismissing Enupia et al, claiming that their relationship was one of a joint venture where he provides the vessel and other
paraphernalia while Enupia provides labor by fishing in the high seas, there was no employer-employee relationship. The Labor
Arbiter dismissed the petition for lack of merit, ruling no employer-employee relationship that exist. Enupia et al appealed before the
NLRC which affirmed the ruling of the Labor Arbiter. They then went to the CA which eventually reversed the ruling of the NLRC,
ruling that there was employer-employee relationship. Hence this petition.
Lu contends that the relationship was that of a joint venture partnership. It was the master fisherman who hires the employees.
While he admits that he maintains radio contact with the fisherman at sea, such is only for the monitoring of their requests.
Issue:
WON there was an employer-employee relationship that exist between Lu and Enupia et al?
Held:
Yes. It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. An inquiry in the Social Security System (SSS) that the
employer of Enupia et al is the company owned by Lu (MTGR). Thus, the fact that petitioner had registered the respondents with SSS
is proof that they were indeed his employees. The coverage of the Social Security Law is predicated on the existence of an employer-
employee relationship. It was established that petitioner exercised control over respondents. It should be remembered that the
control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. The payment of
respondents' wages based on the percentage share of the fish catch would not be sufficient to negate the employer-employee
relationship existing between them. Petitioner wielded the power of dismissal over respondents when he dismissed them after they
refused to sign the joint fishing venture agreement. As Enupia et al were Lus regular employees, they are entitled to security of
tenure under the Constitution. Under Art. 279 of the Labor Code, the right to security of tenure guarantees the right of employees to
continue in their employment absent a just cause for termination. The act of asking them to sign the joint fishing venture agreement
is violative of their security of tenure. And respondents' termination based on their refusal to sign the same, not being shown to be
one of those just causes for termination under Article 282, is therefore illegal.
3.HIRING OF EMPLOYEE
CASES:
1. PT&T vs. NLRC, 272 SCRA 596 [1997]
CONCEPT: The policy of not accepting or considering as disqualified from work any woman who contracts marriage is not only in
derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against
marriage in connection with her employment, but it likewise assaults good morals and public policy. Itdeprives a woman of the
freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and inalienable right.
FACTS:
Grace de Guzman was initially hired by petitioner as a reliever for a fixed period from November 21, 1990 until April 20, 1991 vice on
C.F. Tenorio who went on maternity leave. Under the Reliever Agreement which she signed with PT&T Company, her employment
was to be immediately terminated upon expiration of the agreed period. Thereafter, from June 10, 1991 to July 1, 1991, and from July 19,
1991 to August 8, 1991, private respondents services as reliever were again engaged by petitioner, this time in replacement of one
Erlinda F. Dizon who went on leave during both periods. After August 8, 1991, and pursuant to their Reliever Agreement, her services
were terminated. It now appears that private respondent had made the a representation that she was single even though she
contracted marriage months before, in the two successive reliever agreements which she signed on June 10, 1991 and July 8, 1991.
When petitioner supposedly learned about the same later, its branch supervisor sent to private respondent a memorandum requiring
her to explain the discrepancy. In that memorandum, she was reminded about the companys policy of not accepting married women
for employment. Private respondent was dismissed from the company effective January 29, 1992, which she readily contested by
initiating a complaint for illegal dismissal. Labor Arbiter handed down a decision declaring that private respondent, who had already
gained the status of a regular employee, was illegally dismissed by petitioner. On appeal to the National Labor Relations Commission
(NLRC), said public respondent upheld the labor arbiter and it ruled that private respondent had indeed been the subject of an
unjust and unlawful discrimination by her employer, PT&T.
ISSUE:
Whether or not discrimination merely by reason of the marriage of a female employee is expressly prohibited by Article 136.
RULING:
SC ruled that the stipulation is violative of Art. 136 of the Labor Code. An employer is free to regulate, according to his discretion and
best business judgment, all aspects of employment, from hiring to firing, except in cases of unlawful discrimination or those which
may be provided by law. Petitioners policy of not accepting or considering as disqualified from work any woman worker who
contracts marriage runs afoul of the test of, and the right against, discrimination, afforded all women workers by our labor laws and
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by no less than the Constitution.
Respondents act of concealing the true nature of her status from PT&T could not be properly characterized as willful or in bad faith
as she was moved to act the way she did mainly because she wanted to retain a permanent job in a stable company. In other words,
she was practically forced by that very same illegal company policy into misrepresenting her civil status for fear of being disqualified
from work. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT&T. Under
American jurisprudence, job requirements which establish employer preference or conditions relating to the marital status of an
employee are categorized as a sex-plusdiscrimination where it is imposed on one sex and not on the other. Further, the same should
be evenly applied and must not inflict adverse effects on a racial or sexual group which is protected by federal job discrimination
laws. Petitioners policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free
from any kind of stipulation against marriage in connection with her employment, but it likewise assaults good morals and public
policy, tending as it does to deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in the
individual as an intangible and inalienable right. Hence, while it is true that the parties to a contract may establish any agreements,
terms, and conditions that they may deem convenient, the same should not be contrary to law, morals, good customs, public order,
or public policy. Carried to its logical consequences, it may even be said that petitioners policy against legitimate marital bonds
would encourage illicit or common-law relations and subvert the sacrament of marriage.
2. Duncan Asso. Of Detailman-PTGWO vs. Glaxo Wellcome Phils., G.R. No. 162994, Sept. 17, 2004
FACTS:
Petitioner Pedro Tecson was hired by respondent Glaxo Wellcome Philppines(glaxo) as medical representative on Oct.24,1994
thereafter signed a contract of employment which stipulates among others that he agrees to study and abide existing company rules;
to disclose to management any existing of future relationship by consanguinity or affinity with co-employees or employees of
competing drug companies and if ever that such management find such conflict of interest,he must resign. The Employee Code of
Conduct of Glaxo similarly provides that an employee is expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies. If management perceives a conflict of
interest or a potential conflict between such relationship and the employees employment with the company, the management and
the employee will explore the possibility of a transfer to another department in a non-counterchecking position or preparation for
employment outside the company after six months.
Reminders from Tecsons district manager did not stop him from marrying.Tecson married Bettsy, an Astras Branch Coordinatior in
Albay. She supervised the district managers and medical representatives of her company and prepared marketing strategies for Astra
in that area. Tecson was reassigned to another place and was not given products that the Astra company has and he was not
included in products seminars and training. Tecson requested for time in complying said policy by asking for a transfer in the Glaxos
milk division in which the other company had no counterpart. Thereafter, he bought the matter to GrievanceCommittee but the
parties failed to resolve such issue, Glaxo offered Tecson a separation pay of one-half () month pay for every year of service, or a
total of P50,000.00 but he declined the offer. On November 15, 2000, the National Conciliation and Mediation Board (NCMB)
rendered its Decision declaring as valid Glaxos policy on relationships between its employees and persons employed with competitor
companies, and affirming Glaxos right to transfer Tecson to another sales territory. Tecson filed for a petition for review on the CA
and the CA promulgated that the NCMB did not err in rendering its decision. A recon was filed in appellate court but it was denied,
hence this petition for certiorari.
Petitioners contention it was violative of constitutional law which is the equal protection clause and he was constructively dismissed
while the respondents contention that it is a valid exercise of it s management prerogatives.
ISSUE: Whether or not the policy of a pharmaceutical company prohibiting its employees from marrying employees of another
pharmaceutical company is valid?
RULING:
This petition was denied.Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors, especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry. The prohibition against personal or marital relationships with employees of competitor companies upon
Glaxos employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the
company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests
cannot be denied. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its
right to reasonable returns on investments and to expansion and growth. The challenged company policy does not violate the equal
protection clause of the Constitution as petitioners erroneously suggest. It is a settled principle that the commands of the equal
protection clause are addressed only to the state or those acting under color of its authority.
From the wordings of the contractual provision and the policy in its employee handbook, it is clear that Glaxo does not impose an
absolute prohibition against relationships between its employees and those of competitor companies. Its employees are free to
cultivate relationships with and marry persons of their own choosing. What the company merely seeks to avoid is a conflict of
interest between the employee and the company that may arise out of such relationships. There was no merit in Tecsons contention
that he was constructively dismissed when he was transferred from the Camarines Norte-Camarines Sur sales area to the Butuan
City-Surigao City-Agusan del Sur sales area, and when he was excluded from attending the companys seminar on new products
which were directly competing with similar products manufactured by Astra. Constructive dismissal is defined as a quitting, an
involuntary resignation resorted to when continued employment becomes impossible, unreasonable, or unlikely; when there is a
demotion in rank or diminution in pay; or when a clear sdiscrimination, insensibility or disdain by an employer becomes unbearable
to the employee. The record does not show that Tecson was demoted or unduly discriminated upon by reason of such transfer.
3. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006
Similarly, in Star Paper Corporation v. Simbol,66 this Court held that in order to justify a BFOQ, the employer must prove that (1) the
employment qualification is reasonably related to the essential operation of the job involved; and (2) that there is factual basis for
believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.67
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The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In order to achieve this, it
must necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the aircraft. The weight
standards of PAL should be viewed as imposing strict norms of discipline upon its employees.
In other words, the primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety. It cannot be
gainsaid that cabin attendants must maintain agility at all times in order to inspire passenger confidence on their ability to care for
the passengers when something goes wrong. It is not farfetched to say that airline companies, just like all common carriers, thrive
due to public confidence on their safety records. People, especially the riding public, expect no less than that airline companies
transport their passengers to their respective destinations safely and soundly. A lesser performance is unacceptable.
The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and caprices of the passengers.
The most important activity of the cabin crew is to care for the safety of passengers and the evacuation of the aircraft when an
emergency occurs. Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines need cabin attendants who have
the necessary strength to open emergency doors, the agility to attend to passengers in cramped working conditions, and the stamina
to withstand grueling flight schedules.
On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in case of emergency. Aircrafts
have constricted cabin space, and narrow aisles and exit doors. Thus, the arguments of respondent that "[w]hether the airlines flight
attendants are overweight or not has no direct relation to its mission of transporting passengers to their destination"; and that the
weight standards "has nothing to do with airworthiness of respondents airlines," must fail.
In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ.68 BFOQ is valid "provided it reflects
an inherent quality reasonably necessary for satisfactory job performance."
Hence, the petitioner was legally dismissed. However, he is entitled to separation pay. Normally, a legally dismissed employee is not
entitled to separation pay. This may be deduced from the language of Article 279 of the Labor Code that "[a]n employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement." Luckily for petitioner, this is not an ironclad rule.
Exceptionally, separation pay is granted to a legally dismissed employee as an act "social justice,"101 or based on "equity."102 In both
instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the
employee.103
Here, We grant petitioner separation pay equivalent to one-half (1/2) months pay for every year of service.
4. Del Monte Phils vs. Velasco, G.R. No. 153477, March 6, 2007
CONCEPT: The company cannot dismiss a female employee if her frequent absences were due to illnesses as a consequence of her
pregnancy provided that such were justified.
FACTS: Lolita M. Velasco (respondent) started working with Del Monte Philippines (petitioner) on October 21, 1976 as a seasonal
employee and was regularized on May 1, 1977. Her latest assignment was as Field Laborer.
On June 16, 1987, respondent was warned in writing due to her absences. On May 4, 1991, respondent, thru a letter, was again warned
in writing by petitioner about her absences without permission and a forfeiture of her vacation leave entitlement for the year 1990-
1991 was imposed against her.
On September 14, 1992, another warning letter was sent to respondent regarding her absences without permission during the year
1991-1992. Her vacation entitlement for the said employment year affected was consequently forfeited.
In view of the said alleged absences without permission, on September 17, 1994, a notice of hearing was sent to respondent notifying
her of the charges filed against her for violating the Absence Without Official Leave rule: that is for excessive absence without
permission on August 15-18, 29-31 and September 1-10, 1994. The hearing was set on September 23, 1994. Respondent having failed to
appear on September 23, 1994 hearing, another notice of hearing was sent to her resetting the investigation on September 30, 1994. It
was again reset to October 5, 1994.
On January 10, 1995, after hearing, the petitioner terminated the services of respondent effective January 16, 1994 due to excessive
absences without permission.
Feeling aggrieved, respondent filed a case for illegal dismissal against petitioner asserting that her dismissal was illegal because she
was on the family way suffering from urinary tract infection, a pregnancy-borne, at the time she committed the alleged absences. She
explained that for her absence from work on August 15, 16, 17 & 18, 1994 she had sent an application for leave to her supervisor, Prima
Ybaez. Thereafter, she went to the company hospital for check-up and was advised accordingly to rest in quarters for four (4) days
or on August 27 to 30, 1994. Still not feeling well, she failed to work on September 1, 1994 and was again advised two days of rest in
quarters on September 2-3, 1994. Unable to recover, she went to see an outside doctor, Dr. Marilyn Casino, and the latter ordered her
to rest for another five (5) consecutive days, or from September 5 to 9, 1994. She declared she did not file the adequate leave of
absence because a medical certificate was already sufficient per company policy. On September 10, 1994 she failed to report to work
but sent an application for leave of absence to her supervisor, Prima Ybaez, which was not anymore accepted.
Labor Arbiter sided with Del Monte. However, NLRC and CA sided with Velasco.
ISSUE: Was Velasco illegally dismissed?

RULING: YES.
1. It is violative of Article 137 of the Labor Code.

Article 137 of the Labor Code provides that it shall be unlawful to (1) To deny any woman employee the benefits provided for in this
Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided
under this Code; (2) To discharge such woman on account of her pregnancy, while on leave or in confinement due to her pregnancy;
or(3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.
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In this case, by the measure of substantial evidence, what is controlling is the finding of the NLRC and the CA that respondent was
pregnant and suffered from related ailments. It would be unreasonable to isolate such condition strictly to the dates stated in the
Medical Certificate or the Discharge Summary. It can be safely assumed that the absences that are not covered by, but which
nonetheless approximate, the dates stated in the Discharge Summary and Medical Certificate, are due to the continuing condition of
pregnancy and related illnesses, and, hence, are justified absences. The petitioner admits these facts in its Petition for Review.8 And,
as the CA aptly held, it was no less than the company doctor who advised the respondent to have "rest-in-quarters" for four days on
account of a pregnancy-related sickness.
Medical and health reports abundantly disclose that during the first trimester of pregnancy, expectant mothers are plagued with
morning sickness, frequent urination, vomiting and fatigue all of which complainant was similarly plagued with.
The Filflex Industrial and Manufacturing Co. case is not applicable, principally because the nature and gravity of the illness involved
in that case chronic asthmatic bronchitis are different from the conditions that are present in the instant case, which is pregnancy
and its related illnesses.
The Court takes judicial notice of the fact that the condition of asthmatic bronchitis may be intermittent, in contrast to pregnancy
which is a continuing condition accompanied by various symptoms and related illnesses.
2. Velasco was able to subsequently justify her absences in accordance with company rules and policy.
The Court finds no cogent reason to disturb the findings of the NLRC and the CA that the respondent was able to subsequently
justify her absences in accordance with company rules and policy; that the respondent was pregnant at the time she incurred the
absences; that this fact of pregnancy and its related illnesses had been duly proven through substantial evidence; that the respondent
attempted to file leaves of absence but the petitioners supervisor refused to receive them; that she could not have filed prior leaves
due to her continuing condition; and that the petitioner, in the last analysis, dismissed the respondent on account of her pregnancy,
a prohibited act.
3. Petitioner cannot use her history of absences to lay down a pattern of absenteeism or habitual disregard of company rules
to justify the dismissal of respondent.
Petitioner puts much emphasis on respondents "long history" of unauthorized absences committed several years beforehand.
However, petitioner cannot use these previous infractions to lay down a pattern of absenteeism or habitual disregard of company
rules to justify the dismissal of respondent. The undeniable fact is that during her complained absences in 1994, respondent was
pregnant and suffered related illnesses.
In fine, the Court finds no cogent reason to disturb the findings of the CA and the NLRC.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated July 23, 2001 and the Resolution dated May 7, 2002 of the
Court of Appeals are AFFIRMED.
5. Yrasuegui vs. Phil Air Lines, G.R. No. 168081, October 17, 2008
CONCEPT: Failure to comply with the weight standards of flight companies is a ground for legal dismissal, it being under the
principle of bona fide occupational qualification. The Supreme Court cited Star Paper Corporation vs. Simbol.
FACTS:
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc. (PAL). He stands five feet and
eight inches (58") with a large body frame. The proper weight for a man of his height and body structure is from 147 to 166 pounds,
the ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual1 of PAL.
The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended vacation leave from
December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently, petitioner failed to meet the companys weight
standards, prompting another leave without pay from March 5, 1985 to November 1985. Despite the suggestion of the company to
consult their company physician and their requests to comply with the weight standards, Yrasuegui still failed to comply.
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, and considering the
utmost leniency extended to him which spanned a period covering a total of almost five (5) years, his services were considered
terminated effective immediately. Hence, the petitioner claimed that he was illegally dismissed.
Labor Arbiter and the NLRC ruled in favour of Yrasuegui. CA reversed the decision of NLRC.
ISSUE: Was the petitioner illegally dismissed?
RULING: NO.
Our Ruling
I. The obesity of petitioner is a ground for dismissal under Article 282(e) 44 of the Labor Code.
A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification of an
employee in order to keep the job. Tersely put, an employee may be dismissed the moment he is unable to comply with his ideal
weight as prescribed by the weight standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code.
As explained by the CA:
x x x [T]he standards violated in this case were not mere "orders" of the employer; they were the "prescribed weights" that a cabin
crew must maintain in order to qualify for and keep his or her position in the company. In other words, they were standards that
establish continuing qualifications for an employees position. In this sense, the failure to maintain these standards does not fall
under Article 282(a) whose express terms require the element of willfulness in order to be a ground for dismissal. The failure to meet
the employers qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d) and is therefore one that
falls under Article 282(e) the "other causes analogous to the foregoing."
in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia Government and Service Employees
Union (BCGSEU),63 the Supreme Court of Canada adopted the so-called "Meiorin Test" in determining whether an employment
policy is justified. Under this test, (1) the employer must show that it adopted the standard for a purpose rationally connected to the
performance of the job;64 (2) the employer must establish that the standard is reasonably necessary65 to the accomplishment of that
work-related purpose; and (3) the employer must establish that the standard is reasonably necessary in order to accomplish the
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legitimate work-related purpose.
4.WAGES & WAGE RATIONALIZATION ACT
4.AVIOLATION OF WAGE ORDER
CASES:
1. S.I.P. Food House et al., vs. Batolina, GR No. 192473, Oct 11, 2010
CONCEPT: REQUISITES TO ESTABLISH EMPLOYEE-EMPLOYER RELATIONSHIP; WHEN IS BOARD ANG LODGING

(FACILITIES) DEDUCTIBLE FROM WAGE
FACTS:
GSIS Multi-Purpose Cooperative (GMPC) is an entity organized by the employees of the Government Service Insurance
System (GSIS). GMPC wanted to operate a canteen in the new GSIS Building. Since it had no capability and expertise in said
business, it contracted the services of SIP, owned by Spouses Pablo. The respondents worked as waiters and waitresses in the
canteen. In Feb 2004, GMPC terminated SIPs concession contract. This termination led to the dismissal of the respondents, hence
they filed for illegal dismissal with money claims.
RESPONDENTS CONTENTION:
1) SIP did not implement Wage Orders 5 to 11 for the years of 1997 to 2004; 2) they did not receive overtime pay for work
rendered from 6:30 am to 5:30 pm; 3) other benefits (service incentive, maternity benefit of Flordeliza Matias, non-remittance of their
SSS contribution.
SIPS CONTENTION:
SIP claimed that the respondents were not its employees but of GMPCs, since it only operated the canteen in behalf of
GMPC. When the concession contract was terminated, GMPC already operated the canteen on its own.
LABOR ARBITERS DECISION:

Complaint was dismissed for lack of merit. LA found that respondents were GMPCs employees, and not SIPs as there
existed a labor-only contracting relationship between the two entities. Money claims were dismissed since SIP is not liable for unpaid
salaries because it had complied with the minimum statutory requirement and had extended better benefits than GMPC (free board
and lodging). No overtime pay as it was improbable that respondents regularly worked beyond 8 hours a day.
NLRC DECISION:
SIP was the respondents employer, but they were not illegally dismissed since the termination of the concession contract
constituted an authorized cause for the severance of employer-employee relations. Nevertheless, respondents were awarded with the
claimed benefits, except overtime pay (no evidence that they rendered 2 hours overtime work), because SIP failed to present proof of
compliance with the law of wage, 13th month pay and service incentive leave.
CA DECISION:
It affirmed the award. However, it found merit in SIPs objection that in a government agency (GSIS), there are only 20
official business days in a month and not 26. Nevertheless, it affirmed the NLRC decision finding that SIP is the employer of the
respondents. The motion for recon of SIP was denied, hence the petition.
ISSUE:
1) WON there is Employer-Employee relationship between respondents and SIP - YES
2) WON the furnished board and lodging can be deducted from the respondents wage - NO
RULING:
1. SIP WAS THE EMPLOYER OF RESPONDENTS. THERE IS E-E RELATIONSHIP.
When the concession was terminated, they were denied entrance to the premises. Thus, spouses Pablo, thru their counsel,
sent a protest letter to GMPC. In the letter, they admitted that the respondents in this case are their employees because said letter is
worded as follows, x x x you barred our clients and their employees/helpers from entering said premises x x x. Moreover, the
spouses did not deny that they paid the salary of the respondents.
In addition, there is E-E relationship between SIP and the respondents because the former exercised the essential
elements of an E-E relationship such as hiring, payment of wages and the power of control.
2. THE FURNISHED BOARD AND LODGING CANNOT BE SET-OFF FOR THE UNDERPAYMENT OF THE
RESPONDENTS WAGES
In Mabeza v NLRC, it was held that that the employer cannot simply deduct from the employees wages the value of the
board and lodging without satisfying the following requirements: (1) proof that such facilities are customarily furnished by the
trade; (2) voluntary acceptance in writing by the employees of the deductible facilities; and (3) proof of the fair and
reasonable value of the facilities charged. As the CA aptly noted, it is clear from the records that SIP failed to comply with these
requirements.
SC also said that there are only 20 days a month upon which the monetary award should be computed, since respondents
explicitly claim their salaries and benefits for the services rendered from Monday to Friday or 5 days a week.
PETITION HAS NO MERIT.
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2. SLL International Cables Specialist vs. NLRC, GR No. 172161, March 2, 2011
.
CONCEPT: FACILITIES WHEN DEDUCTIBLE; DISTINGUISHED FROM SUPPLEMENTS
FACTS:
Sometime in 1996 and 1997, respondents Roldan, Edgardo and Danilo were hired by Sonny (Manager of SLL) as trainee
cable/lineman. They were paid full minimum wage, but only reported to work as substitutes to regular workers, or when there is
needed extra workers. After training, the private respondents were engaged as project employees by Sonny in four different projects,
the significant one is that project in Camarin Caloocan City with Furukawa Corp as the general contractor. As the project was
ongoing, Furukawa delayed in the delivery of imported materials which led to the non-completion of the project on time. Faced with
economic problems, Sonny decided to cut down overtime work. When private respondents asked to work overtime, Sonny refused,
and said that if they insist, they would have to go home to Cebu at their own expense. True enough, they went home to Cebu.
Afterwards, they filed a complaint for illegal dismissal, non-payment of wages, holiday pay, 13th month, and service incentive leave.
As an answer, SLL and Sonny claimed that the private respondents were merely project employees. They allege that the
food allowance of P63 per day as well as allowance for lodging, transportation, electricity, water and snacks should be added to their
basic pay. With the allowances, they allegedly received higher wage rate than that prescribed in Rizal and Manila. Complaint should
also be dismissed because it should have been filed in Manila where the work was done.
LABOR ARBITER DECISION:

LA Belarmino decided that it had jurisdiction because workplace included the place where the employee was supposed to
report back after a temporary detail, assignment or travel, which in this case was Cebu. As to status of employment, said respondents
were regular employees because they were repeatedly hired by Sonny. Respondents were also underpaid because the allowances
given cannot be deducted from their wages because it was furnished without their consent. Nevertheless, it was ruled that petitioners
were not liable for illegal dismissal because the act of the respondents of going home was an act of indifference when petitioners
prohibited overtime work.
NLRC DECISION:
LA decision was affirmed. Motion for recon was denied. It also found that no project completion was filed with the nearest
Public Employment Office as required by DOLE.
CA DECISION:
It affirmed that the respondents were regular employees because they performed functions which were the regular and
usual business of petitioners. The failure to submit the project completion was also proof that the respondents were not project
employees but regular employees. Also, the allowances cannot be deducted because again, it was without respondents consent.
Nevertheless, there was no illegal dismissal because it was petitioners prerogative to deny any request for overtime work. Petitioners
appeal to SC.
ISSUE:
WON the facilities (the allowances) can be deducted from the wages of the private respondents - NO
RULING: PETITION HAS NO MERIT

As a general rule on payment of wages, the party who alleges payment as defense has the burden of proving it. In
labor cases, burden of proving monetary claims rests on the employer rationale of which is that the files, payrolls records and
similar documents are in the possession of the employer. In this case, petitioners, aside from bare allegations, failed to present
any evidence such as payroll or pay slips.
On whether the value of the facilities should be included in the computation of the "wages" received by private
respondents, Section 1 of DOLE Memorandum Circular No. 2 provides that an employer may provide subsidized meals and snacks to
his employees provided that the subsidy shall not be less that 30% of the fair and reasonable value of such facilities. In such cases,
the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks
enjoyed by the latter, provided that such deduction is with the written authorization of the employees concerned.
As defined, FACILITIES - are items of expense necessary for the laborer's and his family's existence and
subsistence so that by express provision of law (Sec. 2[g]), they form part of the wage and when furnished by the employer
are deductible therefrom. Moreover, before the value of facilities can be deducted from the employees wages, the following
requisites must all be attendant: 1) proof must be shown that such facilities are customarily furnished by the trade; 2) the
provision of deductible facilities must be voluntarily accepted in writing by the employee; and 3) facilities must be charged
at reasonable value. Mere availment is not sufficient to allow deductions from employees wages.
SUPPLEMENTS on the other hand is defined as constitute extra remuneration or special privileges or benefits given to or
received by the laborers over and above their ordinary earnings or wages. It is of the view that the food and lodging, or the
electricity and water allegedly consumed by private respondents in this case were not facilities but supplements.
TAKE NOTE - FOR WHOSE BENEFIT: if for EMPLOYEES DEDUCTIBLE; if for EMPLOYERS NON-DEDUCTIBLE.
In this case, the facilities were for the benefit of petitioners - for the purpose of maintaining the efficiency and health of its workers
while they were working at their respective projects.
PETITION DENIED.
3. Vergara, Jr. vs. Coca-Cola Bottlers Phils Inc. G.R. No. 176985, April 1, 2013
CONCEPT: PRINCIPLE OF NON-DIMINUTION OF BENEFITS; REGULAR COMPANY PRACTICE
FACTS:
Ricardo Vergara was an employee of Coca-Cola from May 1968 until Kan. 31, 2002, as a District Sales Supervisor (DSS) for
Las Pinas, Manila. As stipulated in Coca-Colas retirement plan, the Annual Performance Incentive Pay of RSMs, DSSs, and SSSs shall
be considered in the computation of retirement benefits, as follows: Basic Monthly Salary + Monthly Average Performance Incentive
(which is the total performance incentive earned during the year immediately preceding 12 months) No. of Years in Service.
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Ricardo filed a complaint before the NLRC claiming that he is entitled to an additional P474,600 as Salmes Management
Incentives and to the amount of P496,016.67 which Coca-Cola allegedly deducted illegally, representing the unpaid accounts of two
dealers within his jurisdiction.
LABOR ARBITER and NLRC DECISION:

LA directed Coca-Cola to reimburse the amount illegally deducted from petitioners retirement package and to integrate
therein his SMI privilege. On appeal to NLRC, the payment of SMI was deleted.
Pursuant to LA decision, Ricardo moved to partially execute the reimbursement of illegal deduction, which was paid and
then a Compromise agreement was afterwards executed affirming such payment, without prejudice to his appeal to the CA of the
NLRC decision which deleted the SMI payment.
DECISION OF CA.
Appeal and subsequent motion for reconsideration was denied. Hence the petition.
ISSUE:
WON the SMI should be included in the computation of petitioners retirement benefits on the ground of consistent
company practice. NO
RULING:
Employees have a vested right over existing benefits voluntarily granted to them by their employees by virtue of the
principle of non-diminution of benefits. There is diminution of benefits when: (1) the grant or benefit is founded on a policy
or has ripened into a practice over a long period of time; (2) the practice is consistent and deliberate; (3) the practice is not
due to error in the construction or application of a doubtful or difficult question of law; and (4) the diminution or
discontinuance is done unilaterally by the employer.
To be considered as a regular company practice, the employee must prove by substantial evidence that the giving of the
benefit is done over a long period of time, and that it has been made consistently and deliberately.
In this case, there is no substantial evidence to prove that the grant of SMI to all retired DSS had ripened into company
practice. Ricardo utterly failed to adduce proof to establish his allegation that SMI has been consistently, deliberately and voluntarily
granted to all retired DSS without any qualification or conditions. The only evidence he presented where the testimonies of formers
DSSs Renato Hidalgo and Ramon Velazquez, who claimed that the SMI were included in their retirement package.
These testimonies were sufficiently countered by Coca-Cola by presenting the affidavits of its witnesses, which pointed out
the various stop-gap measures undertaken by it beginning 1999 in order to arrest the deterioration of its accounts receivables
balance, which included the payment of SMI, where certain conditions were to be met in order to qualify. As established,
Ricardo failed to meet the collection qualifiers in order to be eligible to receive SMI as part of the retirement plan. Specifically,
he failed to meet the trade receivable qualifier.
PETITION DENIED.
4. Royal Plant Workers Union vs. Coca-Cola Bottlers Phils Inc. -Cebu Plant, G.R. No. 198783, April 15, 2013
Facts:
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation engaged in the manufacture, sale and distribution
of soft drink products. Under the employ of each bottling plant are bottling operators. In the case of the plant in Cebu City, there are
20 bottling operators who work for its Bottling Line 1 while there are 12-14 bottling operators who man its Bottling Line.
Prior to September 2008, the rotation is this: after two and a half (2 ) hours of work, the bottling operators are given a 30-minute
break and this goes on until the shift ends. In September 2008 and up to the present, the rotation has changed and bottling operators
are now given a 30-minute break after one and one half (1 ) hours of work.
In 1974, Bottling Operators in Bottling Line 2 were provided were chairs upon their request and in 1988 the Bottling Operators in
Bottling Line 1 followed suit and were granted the same. However, Sometime in September 2008, the chairs provided for the
operators were removed pursuant to a national directive of petitioner. This directive is in line with the "I Operate, I Maintain, I
Clean" program of petitioner for bottling operators, wherein every bottling operator is given the responsibility to keep the machinery
and equipment assigned to him clean and safe. With this task of moving constantly to check on the machinery and equipment
assigned to him, a bottling operator does not need a chair anymore, hence, petitioners directive to remove them. Further herein
respondent rationalized that it would prevent the bottling operators will now avoid sleeping thus would also prevent injuries.
The bottling operators took issue with the removal of chairs. They were represented by herein petitioners and initiated their
grievance system in accordance to their CBA. However a gridlock still transpired between both parties.
Arbitration then ensued where the Arbitration ruled for the employees. Appeal to the CA was made and the CA reversed the
decision.
Issue: WON the removal of the chairs violated the CBA, Labor Laws and the General Principles of Justice and Fair Play.
No. It did not violate.
Held:
Procedural Aspect: Rule 43 is the proper remedy to petition a review of a decision or award as granted by a voluntary arbitrator. Courts
justification is Jurisprudence and Sec.2 Rule 42 of the 1997 Rules of Civil Procedure
A Valid Exercise of Management Prerogative

The Court has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay-off of workers, and discipline, dismissal and recall of
workers.
In the present controversy, it cannot be denied that CCBPI removed the operators chairs pursuant to a national directive and in line
with its "I Operate, I Maintain, I Clean" program, launched to enable the Union to perform their duties and responsibilities more
efficiently. The chairs were not removed indiscriminately. They were carefully studied with due regard to the welfare of the members
of the Union.
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In short, the removal of the chairs was designed to increase work efficiency. Hence, CCBPIs exercise of its management prerogative
was made in good faith without doing any harm to the workers rights.
No Violation of Labor Laws

The rights of the Union under any labor law were not violated. There is no law that requires employers to provide chairs for bottling
operators. The CA correctly ruled that the Labor Code, only requires employers to provide seats for women. No similar requirement
is mandated for men or male workers. It must be stressed that all concerned bottling operators in this case are men.
There was no violation either of the Health, Safety and Social Welfare Benefit provisions under Book IV of the Labor Code of the
Philippines. As shown in the foregoing, the removal of the chairs was compensated by the reduction of the working hours and
increase in the rest period. The directive did not expose the bottling operators to safety and health hazards. The Union should not
complain too much about standing and moving about for one and one-half (1 ) hours because studies show that sitting in
workplaces for a long time is hazardous to ones health (there were different studies provided by the court in its decision to support
this claim)
No Violation of the CBA

The CBA15 between the Union and CCBPI contains no provision whatsoever requiring the management to provide chairs for
the operators in the production/manufacturing line while performing their duties and responsibilities.
Further the CBA provided, that benefits and/or privileges, not expressly given therein but which are presently being granted by the
company and enjoyed by the employees, shall be considered as purely voluntary acts by the management and that the continuance of
such benefits and/or privileges, no matter how long or how often, shall not be understood as establishing an obligation on the
companys part. Since the matter of the chairs is not expressly stated in the CBA, it is understood that it was a purely voluntary act on
the part of CCBPI and the long practice did not convert it into an obligation or a vested right in favor of the Union.
No Violation of the general principles of justice and fair play

The Court completely agrees with the CA ruling that the removal of the chairs did not violate the general principles of justice and fair
play because the bottling operators working time was considerably reduced from two and a half (2 ) hours to just one and a half (1
) hours and the break period, when they could sit down, was increased to 30 minutes between rotations. The bottling operators
new work schedule is certainly advantageous to them because it greatly increases their rest period and significantly decreases their
working time. A break time of thirty (30) minutes after working for only one and a half (1 ) hours is a just and fair work schedule.
No Violation of Article 100 of the Labor Code

The operators chairs cannot be considered as one of the employee benefits covered in Article 100 of the Labor Code. In the Courts
view, the term "benefits" mentioned in the non-diminution rule refers to monetary benefits or privileges given to the
employee with monetary equivalents. Such benefits or privileges form part of the employees wage, salary or compensation making
them enforceable obligations. This Court has already decided several cases regarding the non-diminution rule where the benefits or
privileges involved in those cases mainly concern monetary considerations or privileges with monetary equivalents
Petition is Denied
5. The National Wages & Productivity Commission et al., vs. The Alliance of Progressive Labor et al., GR No. 150326, March
12, 2014
Facts:
On June 9, 1989, Republic Act No. 6727 was enacted into law. In order to rationalize wages throughout the Philippines, Republic Act
No. 6727 created the NWPC and the RTWPBs of the different regions. Section 3 of Republic Act No. 6727, empowered the NWPC to
formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and
national levels; to prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at
the regional, provincial or industry levels; and to review regional wage levels set by the RTWPBs to determine whether the levels
were in accordance with the prescribed guidelines and national development plans, among others. Further, Section 3 of Republic Act
No. 6727, tasked the RTWPBs to determine and fix minimum wage rates applicable in their region, provinces or industries
therein; and to issue the corresponding wage orders, subject to the guidelines issued by the NWPC. The RTWPBs were also
mandated to receive, process and act on applications for exemption from the prescribed wage rates as may be provided by law or any
wage order.
On October 14 1999, RTWPB NCR issued Wage Order No. NCR 07 imposing an increase of P25.50/day on the wages of all private
sector workers and employees in the NCR and pegging the minimum wage rate in the NCR at P223.50/day. However, Section 2 and
Section 9 of Wage Order No. NCR-07 exempted certain sectors and industries from its coverage (Agricultural Workers, Workers
in Small Establishments employing less than 10 workers, Distressed Establishments, Exporters including indirect
exporters with at least 50% export sales and with forward contracts with their foreign buyers/principals)
Feeling aggrieved by their non-coverage by the wage adjustment, the Alliance of Progressive Labor (APL) and the Tunay na
Nagkakaisang Manggagawa sa Royal (TNMR) filed an appeal with the NWPC assailing Section 2(A) and Section 9(2) of
Wage Order No. NCR-07. They contended that neither the NWPC nor the RTWPB-NCR had the authority to expand the non-
coverage and exemptible categories under the wage order; hence, the assailed sections of the wage order should be voided. The
appeal was docketed as NWPC Case No. W.O.- 99-001.
(NWPC upheld the validity of Sec 2 and Sec 9 of the Wage Order. CA Reversed the decision of NWPC)
Issue: WON NWPC AND RTWPB has authority to expand the non-coverage and exemptible categories under the wage
order
Held:
The petition for review on certiorari is meritorious.
Indisputably, the NWPC had the authority to prescribe the rules and guidelines for the determination of the minimum wage and
productivity measures, and the RTWPB-NCR had the power to issue wage orders.
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The wage orders issued by the RTWPBs could be reviewed by the NWPC motu proprio or upon appeal. Any party aggrieved by the
wage order issued by the RTWPBs could appeal. Here, APL and TNMR appealed on October 26, 1999, submitting to the NWPC
precisely the issue of the validity of the Section 2(A) and Section 9(2) of Wage Order No. NCR-07. The NWPC, in arriving at its
decision, weighed the arguments of the parties and ruled that the RTWPB-NCR had substantial and justifiable reasons in exempting
the sectors and establishments enumerated in Section 2(A) and
Section 9(2) based on the public hearings and consultations, meetings, social-economic data and informations gathered prior to the
issuance of Wage Order No. NCR-07. The very fact that the validity of the assailed sections of Wage Order No. NCR-07 had been
already passed upon and upheld by the NWPC meant that the NWPC had already given the wage order its necessary legal
imprimatur. Accordingly, the requisite approval or review was complied with.
In creating the RTWPBs, Congress intended to rationalize wages, firstly, by establishing full time boards to police wages round-
the-clock, and secondly, by giving the boards enough powers to achieve this objective. In Employers Confederation of the
Phils. v. National Wages and Productivity Commission, this Court all too clearly pronounced that Congress meant the RTWPBs
to be creative in resolving the annual question of wages without Labor and Management knocking on the doors of
Congress at every turn. The RTWPBs are the thinking group of men and women guided by statutory standards and bound by the
rules and guidelines prescribed by the NWPC. In the nature of their functions, the RTWPBs investigate and study all the pertinent
facts to ascertain the conditions in their respective regions. Hence, they are logically vested with the competence to determine
the applicable minimum wages to be imposed as well as the industries and sectors to exempt from the coverage of their
wage orders.
Lastly, Wage Order No. NCR-07 is presumed to be regularly issued in the absence of any strong showing of grave abuse of discretion
on the part of RTWPB-NCR. The presumption of validity is made stronger by the fact that its validity was upheld by the NWPC upon
review
Petition is granted. CA Decision is set aside.
6. David/Yiels Hog Dealer vs. Macasio, GR No. 195466, July 2, 2014
CONCEPT: The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of Service
Incentive Leave (SIL) and holiday pay. In determining whether workers engaged on pakyaw or task basis is entitled to holiday and
Service Incentive Leave (SIL) pay, the presence (or absence) of employer supervision as regards the workers time and performance is the
key.
FACTS: Macasio filed before the Labor Arbiter a complaint against petitioner Ariel L. David, doing business under the name and style
Yiels Hog Dealer, for nonpayment of overtime pay, holiday pay, and 13th month pay. He also claimed payment for moral and
exemplary damages and attorneys fees; and for payment of service incentive leave (SIL).
Macasio alleged before the Labor Arbiter that he had been working as a butcher for David since January 6, 1995. Macasio
claimed that David exercised effective control and supervision over his work, pointing out that David:
(1) set the work day, reporting time and hogs to be chopped, as well as the manner by which he was to perform his
work;
(2) daily paid his salary of P700.00, which was increased from P600.00 in 2007, P500.00 in 2006 and P400.00 in 2005;
and
(3) approved and disapproved his leaves.
Macasio added that David owned the hogs delivered for chopping, as well as the work tools and implements; David also rented
the workplace. He further claimed that David employs about twenty-five (25) butchers and delivery drivers.
David claimed that he started his hog dealer business in 2005, and that he only has ten employees. He alleged that he hired
Macasio as a butcher or chopper on pakyaw or task basis who is, therefore, not entitled to overtime pay, holiday pay and 13th
month pay. David pointed out that Macasio:
(1) usually starts his work at 10:00 p.m. and ends at 2:00 a.m. of the following day or earlier, depending on the volume of
the delivered hogs;
(2) received the fixed amount of P700.00 per engagement, regardless of the actual number of hours that he spent chopping
the delivered hogs; and
(3) was not engaged to report for work and, accordingly, did not receive any fee when no hogs were delivered.
Macasio disputed Davids allegations. He argued that, first, David did not start his business only in 2005. He pointed to the
Certificate of Employment that David issued in his favor which placed the date of his employment, albeit erroneously, in January
2000.
Second, he reported for work every day which the payroll or time record could have easily proved had David submitted them in
evidence.David claimed that he issued the Certificate of Employment, upon Macasios request, only for overseas employment
purposes.
Labor Arbiter and NLRC: dismissed Macasios complaint for lack of merit. The Labor Arbiter gave credence to Davids claim that he
engaged Macasio on pakyaw or task basis.The LA concluded that since Macasio was engaged on pakyaw or task basis, he is not
entitled to overtime, holiday, SIL and 13th month pay.
CA: explained that as a task basis employee, Macasio is excluded from the coverage of holiday, SIL and 13th month pay only if he is
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likewise a field personnel.
ISSUE: (1) Whether or not a worker paid in "pakyaw" basis is entitled to holiday pay and Service?
(2) Whether or not A worker engaged in "pakyaw" basis is entitled to 13th month pay?
HELD:
(1) YES.
David confuses engagement on pakyaw or task basis with the lack of employment relationship. Impliedly, David asserts that
their pakyawan or task basis arrangement negates the existence of employment relationship. The Supreme Court reject this
assertion of the petitioner.
Engagement on pakyaw or task basis does not characterize the relationship that may exist between the parties, i.e., whether
one of employment or independent contractorship.To determine the existence of an employer-employee relationship, four elements
generally need to be 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.
These elements or indicators comprise the so-called four-fold test of employment relationship.
Macasios relationship with David satisfies this test. A distinguishing characteristic of pakyaw or task basis engagement, as
opposed to straight-hour wage payment, is the non-consideration of the time spent in working.The payment of an employee on task or
pakyaw basis alone is insufficient to exclude one from the coverage of Service Incentive Leave (SIL) and holiday pay. In determining
whether workers engaged on pakyaw or task basis is entitled to holiday and Service Incentive Leave (SIL) pay, the presence (or
absence) of employer supervision as regards the workers time and performance is the key.
The Supreme Court agree with the CA that Macasio does not fall under the definition of field personnel. The CAs finding in
this regard is supported by the established facts of this case:
first, Macasio regularly performed his duties at Davids principal place of business;
second, his actual hours of work could be determined with reasonable certainty; and
third, David supervised his time and performance of duties.
Since Macasio cannot be considered a field personnel, then he is not exempted from the grant of holiday, SIL pay even as he
was engaged on pakyaw or task basis.
(2) NO.
With respect to the payment of 13th month pay however, the Supreme Court find that the CA legally erred in finding that the
NLRC gravely abused its discretion in denying this benefit to Macasio.
The governing law on 13th month pay is PD 8 5 1. As with holiday and SIL pay, 13th month pay benefits generally cover all
employees; an employee must be one of those expressly enumerated to be exempted.
Section 3 of the Rules and Regulations Implementing P.D. 851 enumerates the exemptions from the coverage of 13th month pay
benefits. Under said law, employers of those who are paid on task basis, and those who are paid a fixed amount for performing a
specific work, irrespective of the time consumed in the performance thereof are exempted.
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD
851 exempts employees paid on task basis without any reference to field personnel. This could only mean that insofar as payment
of the 13th month pay is concerned, the law did not intend to qualify the exemption from its coverage with the requirement that the
task worker be a field personnel at the same time.
7. Our Haus Realty Development Corp., vs. Parian et al., GR No. 204651,
August 6, 2014
CONCEPT: There is no substantial distinction between deducting and charging a facilitys value from the employees wage
FACTS: Respondents Alexander Parian et,al were all laborers working for petitioner Our Haus Realty Development Corporation, a
company engaged in the construction business.
On May 2010, the petitioner company experienced financial distress and had to suspend some of its construction projects to
alleviate its condition. The respondents were among those who were affected who were asked to take vacation leaves.
Eventually, these laborers were asked to report back to work but instead of doing so, they filed with the LA a complaint for
underpayment of their daily wages claiming that except for Tenedero, their wages were below the minimum rates prescribed in the
following wage orders from 2007 to 2010. They also claimed that Our Haus failed to pay them their holiday, Service Incentive Leave
(SIL), 13th month and overtime pays.
LA: ruled in favor of Our Haus who claimed that the respondents wages complied with the laws minimum requirement because
aside from paying the monetary amount of the respondents wages, Our Haus also subsidized their meals (3 times a day), and gave
them free lodging near the construction project they were assigned to. In determining the total amount of the respondents daily
wages, the value of these benefits should be considered, in line with Article 97(f) of the Labor Code. LA did not give merit on the
laborers contention that that the value of their meals should not be considered in determining their wages total amount since the
requirements set under Section 413 of DOLE Memorandum Circular No. 215 were not complied with. Besides, Our Haus failed to
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present any proof that they agreed in writing to the inclusion of their meals value in their wages.
NLRC: Reversed the decision of LA. It ruled that that the laborers did not authorize Our Haus in writing to charge the values of their
board and lodging to their wages. Thus, the same cannot be credited and further ruled that they are entitled to their respective
proportionate 13th month payments for the year 2010 and SIL payments for at least three years, immediately preceding May 31, 2010,
the date when the respondents left Our Haus. However, it maintains LAs decision that they are not entitled to overtime pay since
the exact dates and times when they rendered overtime work had not been proven.
CA: affirmed the NLRC rulings finding that there is no distinction between deduction and charging and that the legal requirements
before any deduction or charging can be made, apply to both.
ISSUE: Whether or not the laborers are entitled to their respective proportionate 13th month payments for the year 2010 and SIL
payments for at least three years?
HELD: YES.
There is no substantial distinction between deducting and charging a facilitys value from the employees wage; the legal
requirements for creditability apply to both. Herein petitioners argument is a vain attempt to circumvent the minimum wage law by
trying to create a distinction where none exists because in reality, deduction and charging both operate to lessen the actual take-
home pay of an employee. Thus, the Court held that NLRC did not commit grave abuse of discretion in its rulings. It DENY this
petition and AFFIRMED CAs decision.
8. Milan et al., vs. NLRC GR No. 202961, February 4, 2015
Concept:
Claims arising from employer-employee relationship falling within the jurisdiction of NLRC is not only limited to claims by
an employee against the employer but also claims of an employer against the employee.
Jurisdiction of NLRC covers property rights as long as it is necessary to determine an issue related to rights or claims
arising from an employer-employee relationship and is connected to the labor issue.
A clearance procedure which is a procedure instituted to ensure that the properties, real or personal, belonging to the
employer but are in the possession of the separated employee, are returned to the employer before the employee's
departure is standard procedure among employers and is allowed under our laws as a valid exercise for withholding of
wages by virtue of a debt due.
A right to possess a property granted by employer to an employee by virtue of the formers liberality is not an employment
benefit but is rather considered a debt creating an obligation to return possession of such property back to the employer,
that is due, by the employee in favor of the employer when the employer decides to withdraw such, which can be a ground
for the employer to withhold wages and benefits due to the employees pending its return.
Facts: Petitioners consist of several employees of respondent corporation, Solid Mills. They were represented by their collective
bargaining agent which was the National Federation of Labor Unions. One of the agreements in the employment was that Solid Mills
will grant by way of goodwill and in the spirit of generosity financial assistance less accountabilities to members of the union.
Through such agreement, several employees were allowed by Solid Mills to occupy SMI village which was a property owned by Solid
Mills.
The issue arose when respondent Solid Mills declared that they will cease business operations due to serious business losses of which,
petitioners were properly informed. In consequence of this, the employees received notices to vacate SMI Village. Employees were
then made to sign a memorandum of agreement to effect that vacating the SMI Village is a pre-condition for the release of their
termination benefits and leave pay. Petitioners are among those who refused to vacate and who did not sign the agreement and
instead demanded their benefits and pay. Petitioners argued that Solid Mills cannot legally withhold their benefits because its
payment is based on company policy and practice and that their possession of the SMI property should not be considered within the
meaning of accountabilities in their agreement.
Labor Arbiter ruled in favor of petitioners ruling that there was illegal withholding of wages.
NLRC and CA ruled in favor of Solid Mills, ruling that Solid Mills act of letting employees dwell in SMI Village was merely an act of
liberality on its part which can be revoked at any time at its discretion. Hence, they were justified in withholding the benefits and
separation pay.
Issues:
1. Whether or not NLRC has jurisdiction.

2. Whether or not the withholding of the benefits and separation pay was proper.
Ruling:
1. Yes, NLRC has jurisdiction. Under Art. 217 (6) of the Labor Code, the NLRC has jurisdiction over claims arising from
employer-employee relationship with an amount exceeding 5,000 regardless of any claim for reinstatement except those
claims for employee compensation, Social Security, Medicare and Maternity benefits. The claims is not only limited to
claims by an employee but includes claims by an employer against its employee. Moreover, such jurisdiction covers rights
over a property when it is sufficiently connected to the labor issue such that it is necessary to determine an issue related to
rights or claims arising from an employer-employee relationship.
2. Yes, withholding was proper. While under Art. 116 and Art. 100 of the labor code, withholding of wages and diminution of
wages is prohibited, Art. 113 (3) of the labor code allows an employer to deduct when such employer is authorized by law or
regulations issued by the Secretary of Labor and Employment. Here, the act of Solid Mills falls within a clearance procedure
which is a procedure instituted to ensure that the properties, real or personal, belonging to the employer but are in the
possession of the separated employee, are returned to the employer before the employee's departure. Clearance procedure
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is a standard procedure among employers and is allowed under our laws.
Moreover, Art. 1706 of the new civil code allows withholding of wages for a debt due. Here, the term accountabilities was
construed in its ordinary sense which is essentially a debt or obligation. As long as accountabilities are incurred because of
employer-employee relationship, it can be a subject of a clearance procedure.
Since Solid Mills act of allowing petitioners to dwell in SMI Village was merely an act of liberality on its part, the property
can be demanded back at its will. Here, the return of the property became an obligation on the part of petitioners when the
employer-employee relationship ceased, as such was included in the term accountabilities, thus the withholding of the
wages and benefits was proper.
9. Toyota Pasig Inc vs. De Peralta, GR No. 213488, Nov 7, 2016
Concept:
Commissions are included in the definition of wages.
It is employer who has the burden of proof of payment even in cases where the employee alleges non-payment rather than
the employee having the burden of proving non-payment.
Facts: Respondent was an employee of petitioner corporation. She was initially hired as a cashier and attained the position of
Insurance sales executive due to her excellence in the work as was shown when she was awarded Best Sales Insurance Executive from
2007 to 2011. Issue came when her husband, who was also an employee of petitioner, organized a collective bargaining unit the
members of which, including her husband, were later dismissed from service. She also suffered the same fate, and according to
respondent, she was then accused of fraud in the processing of several insurance transactions in that she claimed commissions in
those transactions instead of considering such under the marketing departments new business accounts. With this, she was
preventively suspended and was later terminated upon her receipt of the notice of termination.
Respondent then filed a case claiming payment of her earned substantial commissions, tax rebates, and other benefits dating back
from July 2011 to January 2012, amounting to P617,248.08. Petitioner in defense, contended that respondent was terminated with just
cause and that the claims she is asking are unfounded and unsupported by documents and that such claims do not partake of unpaid
wages/salaries.
Labor Arbiter found respondent liable for the accusations against her and did not order the payment of the benefits claimed by
respondent, instead it merely required petitioner to pay the unpaid salary.
NLRC and CA agreed with LA that respondent is guilty of the accusations but it ordered petitioner to pay the claim of P617,248.08 of
respondent.
Issue:
1. Whether or not the claims of respondent is included in the definition of wages in the labor code.
2. Whether or not the claims will be discarded for failure of respondent to substantiate such claims.
Ruling:
1. Yes, respondents claims fall within the definition of wages. Under Art. 97 (f) of the labor code, wage paid to an
employee shall mean the remuneration of earnings, however designated, capable of being expressed in terms of money,
whether ascertained on a time, task, piece, or commission basis. The claims of commissions, tax rebates for achieved
monthly targets, and success share/profit sharing, are given to respondent as incentives or forms of encouragement in order
for her to put extra effort in performing her duties as an insurance sales executive are included in the term commission
which falls within the definition of wages under Art. 97(f) of the labor code. This is for the reason that the nature of the
work of a salesman is to stimulate growth in sales which can be achieved by encouraging such employees to put more
effort in their jobs through commissions. Hence, commissions are indubitably included in a sales employees wages.
2. No, the claims will not be discarded just because respondent was not able to produce supporting documents. Under law,
once an employee alleges non-payment of specific claims in his/her complaint with particularity, the one who pleads
payment has the burden of proving it and even if the employee alleges non-payment, it is still the employer who has to prove
payment rather than the employee to prove non-payment. Here, the petitioner did not allege payment of the claims or at
least allege that respondent is not entitled to such claims. Hence, since petitioner failed to overcome the burden, the claims
will not be discarded.
5.WAGE ENFORCEMENT AND RECOVERY
CASES:
1. Tiger Construction and Development Corp vs. Abay et al., GR No. 164141, Feb. 26, 2010
CONCEPT: The DOLE Secretary and her representatives, the regional directors, have jurisdiction over labor standards violations
based on findings made in the course of inspection of an employer's premises. The said jurisdiction is not affected by the amount of
claim involved pursuant to RA 7730.
FACTS: An inspection was conducted by DOLE officials at the premises of petitioner Tiger Construction and Development
Corporation (TCDC) based on a complaint filed by respondents Reynaldo Abay and fifty-nine (59) others before the Regional Office
of the DOLE. Several labor standard violations were noted. The case was then set for summary hearing. Before the hearing could take
place, the Director of Regional Office No. V, Ma. Glenda A. Manalo, issued an Order on July 25, 2002 stating that this case falls under
the original and exclusive jurisdiction of the National Labor Relations Commission (NLRC) on the ground that the aggregate money
claim of each worker exceeds the jurisdictional amount of the Office which is Five Thousand Pesos Only (P5,000.00) as provided
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under Article 217 of the Labor Code of the Philippines.
DOLE Secretary Patricia A. Sto. Tomas issued another inspection authority in the same case. DOLE officials conducted another
investigation of petitioner's premises and the same violations were discovered. They issued a Notice of Inspection Results to
petitioner directing it to rectify the violations within five days from notice. For failure to comply with the directive, the case was set
for summary hearing on August 19, 2002. Petitioner allegedly questioned the inspector's findings and argued that the proceedings
before the regional office had been rendered moot by the issuance of the July 25, 2002 Order endorsing the case to the NLRC.
Director Manalo issued an Order directing TCDC to pay P2,123,235.90 to its employees representing underpayment of salaries, 13th
month pay, and underpayment of service incentive leave pay and regular holiday pay. TCDC filed a Motion for Reconsideration and a
Supplemental Pleading to the Motion for Reconsideration reiterating the argument that Director Manalo had lost jurisdiction over
the matter. Convinced by the petitioners contention, Director Manalo again endorsed the case to the NLRC Regional Arbitration
Branch V (Legaspi City). The NLRC returned the entire records of the case to Director Manalo on the ground that the NLRC does not
have jurisdiction over the complaint.
Having the case in her office once more, Director Manalo finally issued an Order dated January 29, 2003 denying petitioner's motion
for reconsideration for lack of merit. TCDC did not interpose an appeal within the prescribed period, thus, Director Manalo issued a
Writ of Execution. TCDC filed an admittedly belated appeal with the DOLE Secretary saying that Director Manalo's actions
concerning the case are null and void for having been issued without jurisdiction. Secretary Sto. Tomas issued an Order and held that
jurisdiction over the case properly belongs with the regional director; hence, Director Manalo's endorsement to the NLRC was a clear
error. Such mistakes of its agents cannot bind the State, thus Director Manalo was not prevented from continuing to exercise
jurisdiction over the case.
CA dismissed the petition for certiorari and denied the motion for reconsideration.
ISSUE: Whether or not petitioner can still assail the January 29, 2003 Order of Director Manalo allegedly on the ground of lack of
jurisdiction, after said Order has attained finality and is already in the execution stage.
RULING: Under Article 128 (b) of the Labor Code, as amended by Republic Act (RA) No. 7730, 15 the DOLE Secretary and her
representatives, the regional directors, have jurisdiction over labor standards violations based on findings made in the course of
inspection of an employer's premises. The said jurisdiction is not affected by the amount of claim involved, as RA 7730 had effectively
removed the jurisdictional limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases, pursuant to the
visitorial and enforcement powers of the DOLE Secretary, are concerned.
Director Manalo's initial endorsement of the case to the NLRC, on the mistaken opinion that the claim was within the latter's
jurisdiction, did not oust or deprive her of jurisdiction over the case. She therefore retained the jurisdiction to decide the case when
it was eventually returned to her office by the DOLE Secretary.
It becomes apparent that petitioner is merely using the alleged lack of jurisdiction in a belated attempt to reverse or modify an order
or judgment that had already become final and executory.
Petition is denied.
2. Peoples Broadcasting (Bombo Radyo Phils) vs. Sec. of DOLE et al., GR No. 179652, March 6, 2012 Resolution on the main Decision
of May 8, 2009
CONCEPT: If a complaint is brought before the DOLE and there is a finding by the DOLE that there is an existing employer-
employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-
employee relationship, the jurisdiction is properly with the NLRC.
FACTS: Jandeleon Juezan filed a complaint against petitioner with the DOLE Regional Office No. VII, Cebu City, for illegal
deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth. The DOLE Regional Director found that
private respondent was an employee of petitioner, and was entitled to his money claims.
Petitioner sought reconsideration of the Director's Order, but failed on the ground that petitioner submitted a Deed of Assignment
of Bank Deposit instead of posting a cash or surety bond.
The matter was brought before the CA, where petitioner claimed that it had been denied due process. CA dismissed the petition on
the ground that it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter.
ISSUE: May the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to what extent?
RULING: Under Art. 128 (b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to
the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review,
not review by the NLRC. However, it cannot be co-extensive to its visitorial and enforcement power. The Court held that the
determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC, that any finding
by the DOLE is merely preliminary.
If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the
exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee relationship has already been
terminated, or it appears, upon review, that no employer-employee relationship existed in the first place. Furthermore, the DOLE
may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction over the case.
The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.
In this case the findings of the Regional Director were not based on substantial evidence, and private respondent failed to prove the
existence of an employer-employee relationship. The DOLE had no jurisdiction over the case, as there was no employer-employee
relationship present.
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3. Superior Packaging Corp., vs. Balagsay et al., G.R. No. 178909, October 10, 2012
CONCEPT: 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 determination, however, is merely preliminary, incidental and collateral to the DOLE's
primary function of enforcing labor standards provisions.
FACTS: The petitioner engaged the services of Lancer to provide reliever services to its business, which involves the manufacture and
sale of commercial and industrial corrugated boxes.
Pursuant to a complaint filed by the respondents against the petitioner and its President, Cesar Luz (Luz), for underpayment of
wages, non-payment of premium pay for worked rest, overtime pay and non-payment of salary, the Department of Labor and
Employment (DOLE) conducted an inspection of the petitioner's premises and found several violations. They filed a motion for
reconsideration on the ground that respondents are not its employees but of Lancer and that they pay Lancer in lump sum for the
services rendered.
The petitioner is now before the Court on petition for review under Rule 45 of the Rules of Court assailing among others the finding
that it is engaged in labor-only contracting and is consequently an indirect employer, considering that it is beyond the visitorial and
enforcement power of the DOLE to make such conclusion. According to the petitioner, such conclusion may be made only upon
consideration of evidentiary matters and cannot be determined solely through a labor inspection. The petitioner also refutes
respondents' alleged belated argument that the latter are its employees.
The DOLE, however, denied its motion in its Resolution. Their appeal to the Secretary of DOLE was dismissed. CA affirmed the
Secretary of DOLE's orders, with the modification in that Luz was absolved of any personal liability under the award.
ISSUE: Whether or not DOLE has the authority to make a finding of an employer-employee relationship concomitant to its visitorial
and enforcement power.
RULING: The DOLE clearly acted within its authority when it determined the existence of an employer-employee relationship
between the petitioner and respondents as it falls within the purview of its visitorial and enforcement power under Article 128 (b) of
the Labor Code as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-
employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC.
In addition, the court cited the case of People's Broadcasting (Bombo Radyo Phils., Inc.) v. Secretary of the Department of Labor and
Employment, stating that 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 determination, however, is merely preliminary,
incidental and collateral to the DOLE's primary function of enforcing labor standards provisions.
A finding that a contractor is a "labor-only" contractor is equivalent to declaring that there is an employer-employee relationship
between the principal and the employees of the supposed contractor. The petitioner therefore, being the principal employer and
Lancer, being the labor-only contractor, are solidarily liable for respondents' unpaid money claims.
The petition for review is denied.
6.WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES
CASES:
1. SHS Perforated Materials, Inc. et al., vs. Diaz, GR No. 185814, Oct. 13, 2010
FACTS:
SHS is a start-up corporation organized and existing under the Philippines and registered with the PEZA. Petitioner Hartmannshenn,
a German national, is its president, in which capacity he determines the administration and direction of the day-to-day business
affairs of SHS. Petitioner Schumacher, also a German national, is the treasurer and one of the board directors. As such, he is
authorized to pay all bills, payrolls, and other just debts of SHS of whatever nature upon maturity. Schumacher is also the EVP of the
European Chamber of Commerce of the Philippines (ECCP) which is a separate entity from SHS. Both entities have an
arrangement where ECCP handles the payroll requirements of SHS to simplify business operations and minimize operational
expenses. Thus, the wages of SHS employees are paid out by ECCP, through its Accounting Services Department headed by
Taguiang.
Respondent Diaz was hired by petitioner SHS as Manager for Business Development on probationary status from July 18, 2005
to January 18, 2006, with a monthly salary of P100,000.00. He was tasked to perform sales/marketing functions, represent the
company in its events, perform all functions, duties and responsibilities to be assigned by the employer in due course, among others.
In addition to the above-mentioned responsibilities, respondent was also instructed by Hartmannshenn to report to the SHS office
and plant at least two (2) days every work week to observe technical processes involved in the manufacturing of perforated materials,
and to learn about the products of the company, which respondent was hired to market and sell.
During respondents employment, Hartmannshenn was often abroad and, because of business exigencies, his instructions to
respondent were either sent by electronic mail or relayed through telephone or mobile phone. When he would be in the Philippines,
he and the respondent held meetings. As to respondents work, there was no close supervision by him. However, during meetings
with the respondent, Hartmannshenn expressed his dissatisfaction over respondents poor performance. Respondent allegedly
failed to make any concrete business proposal or implement any specific measure to improve the productivity of the SHS office. In
addition, respondent was said not to have returned Hartmannshenn's calls and e-mails, to which Diaz denied. Hartmannshenn
instructed Taguiang not to release respondents salary. Later that afternoon, respondent called and inquired about his salary.
Taguiang informed him that it was being withheld and that he had to immediately communicate with Hartmannshenn. The next
day, respondent served on SHS a demand letter and a resignation letter, citing illegal and unfair labor practices.
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Issue: * WON the temporary withholding of respondents salary/wages by petitioners was a valid exercise of management
prerogative.
*WON respondent voluntarily resigned.
Held:
THE RULING OF THE LABOR ARBITER - judgment is hereby rendered declaring complainant as having been illegally dismissed
and further ordering his immediate reinstatement without loss of seniority rights and benefits. It is also ordered that complainant be
deemed as a regular employee.
THE RULING OF THE NLRC - On appeal, the NLRC reversed the decision of the LA.
THE RULING OF THE COURT OF APPEALS - The CA reversed the NLRC
THE RULING OF THE SUPREME COURT AFFIRMED CA WITH MODIFICATION. The additional amount for 13th month pay is
deleted
We disagree with petitioners.
Management prerogative refers "to the right of an employer to regulate all aspects of employment, such as the freedom to prescribe
work assignments, working methods, processes to be followed, regulation regarding transfer of employees, supervision of their work,
lay-off and discipline, and dismissal and recall of work."12 Although management prerogative refers to "the right to regulate all
aspects of employment," it cannot be understood to include the right to temporarily withhold salary/wages without the consent of
the employee. To sanction such an interpretation would be contrary to Article 116 of the Labor Code, which provides:
ART. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any
amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any
other means whatsoever without the workers consent.
Any withholding of an employees wages by an employer may only be allowed in the form of wage deductions under the
circumstances provided in Article 113 of the Labor Code, as set forth below:
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 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 correctly pointed out by the LA, "absent a showing that the withholding of complainants wages falls under the exceptions
provided in Article 113, the withholding thereof is thus unlawful."13
The Court, however, agrees with the LA and the CA that respondent was forced to resign and was, thus, constructively dismissed
This Court has held that probationary employees who are unjustly dismissed during the probationary period are entitled to
reinstatement and payment of full back wages and other benefits and privileges from the time they were dismissed up to their actual
reinstatement.29 Respondent is, thus, entitled to reinstatement without loss of seniority rights and other privileges as well as to full
back wages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time his compensation was
withheld up to the time of actual reinstatement. Respondent, however, is not entitled to the additional amount for 13th month pay,
as it is clearly provided in respondents Probationary Contract of Employment that such is deemed included in his salary.
2. Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo, G.R. No. 188169, November 28, 2011
Facts: Respondents were employed as goldsmiths by the petitioner Nia Jewelry Manufacturing of Metal Arts, Inc. There were
incidents of theft involving goldsmiths in Nia Jewelry's employ. The petitioner imposed a policy for goldsmiths, which were
intended to answer for any loss or damage which Nia Jewelry may sustain by reason of the goldsmiths' fault or negligence in
handling the gold entrusted to them, requiring them to post cash bonds or deposits in varying amounts but in no case exceeding 15%
of the latter's salaries per week.
The petitioner alleged that the goldsmiths were given the option not to post deposits, but to sign authorizations allowing the former
to deduct from the latter's salaries amounts not exceeding 15% of their take home pay should it be found that they lost the gold
entrusted to them. The deposits shall be returned upon completion of the gold smiths' work and after an accounting of the
gold received. The respondents claimed otherwise insisting that petitioner left the goldsmiths with no option but to post the
deposits. The next day after the policy was imposed, the respondents no longer reported for work and signified their defiance against
the new policy which at that point had not even been implemented yet. The respondents alleged that they were constructively
dismissed by the petitioner as their continued employments were made dependent on their readiness to post the required deposits.
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The respondents then filed a complaint for illegal dismissal and for the award of separation pay against the petitioner, and later filed their amended
complaint which excluded their earlier prayer for separation pay but sought reinstatement and payment of back wages, attorney's fees and 13th
month pay.
Issues:
1) WON Nia Jewelry Manufacturing of Metal Arts, Inc. may impose the policy for their goldsmiths requiring them to post
cash bonds or deposits; and
2) WON there is constructive dismissal.
Held:
1) NO, the Nia Jewelry may not impose the policy. Articles 113 and 114 of the Labor Code are clear as to what are the exceptions to the general
prohibition against requiring deposits and effecting deductions from the employees' salaries.
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) (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) (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)(c)In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.
Article 114. Deposits for loss or damage No employer shall require his worker to make deposits from which deductions shall be
made for the reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer, except when the employer is
engaged in such trades, occupations or business where the practice of making deposits is a recognized one, or is necessary or desirable as
determined by the Secretary of Labor in appropriate rules and regulations.
The petitioners should first establish that the making of deductions from the salaries is authorized by law, or regulations issued by the Secretary of
Labor. The petitioners failed to prove that their imposition of the new policy upon the goldsmiths under Nia Jewelry's employ falls under
the exceptions specified in Articles 113 and 114 of the Labor Code.
2) There is NO constructive dismissal. Constructive dismissal occurs when there is c e s s a t i o n o f w o r k b e c a u s e

c o n t i n u e d e m p l o y m e n t i s r e n d e r e d i m p o s s i b l e , unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.
The petitioners did not whimsically or arbitrarily impose the policy to post cash bonds or make deductions from the workers'
salaries. As attested to by the respondents' fellow goldsmiths in their Joint Affidavit, the workers were convened and informed of the
reason behind the implementation of the new policy. Instead of airing their concerns, the respondents just promptly stopped reporting for work
3. Locsin II vs. Mekeni Food Corp., GR No. 192105, December 9, 2013
Facts:
March 2004, Respondent Mekeni food corporation hired Petitioner Antonio Locsin II as the Regional Sales Manager in
Makenis National Capital Region Supermarket and South Luzon operations. Mekeni furnished a Honda civic worth Two-hundred
eighty thousand pesos, this was in addition to the benefits and compensation. The 50% of the said car plan was to be paid by Mekeni
and the other 50% is to be paid by Locsin through salary deduction of Five thousand pesos each month.
On February 2004 Locsin resigned and by that time a total of one hundred twelve thousand and five hundred pesos has
already been deducted from his monthly salary and was applied as the employees share for the car plan. Upon said resignation Locsin
offered that he be allowed to purchase the said service vehicle by paying the outstanding balance thereon, but upon negotiation the
parties have not reached any compromis which led to the return of the car by Locsin to the company on May of 2006.
Subsequently Locsin made personal and written follow-ups for the unpaidm salaries and commissions, benefits and offer
to purchase the service vehicle. However, the company replied that said car benefit only applies to those employees who rendered
service for a total of 5 yrs. This prompted the petitioner to file a case against Mekeni and/or its President Prudencio S. Garcia.
LABOR ARBITER:
Decision was rendered in favor of the complainant Locsin, ordering respondent Mekeni to turnover the disputed vehicle
upon the payment of one hundred thousand pesos and four hundred thirty-five pesos and eighty four centavos. This was appealed to
the NLRC.
NLRC:
NLRC reversed the decision and ordered Mekeni to pay the unpaid compensation and benefits, as well as the amortization
payments on the service vehicle, if not unjust enrichment would occur since the vehicle was still in the possession of Mekeni. Mekeni
is also ordered to pay the employees part in the car plan since it would form part of the benefits of the said employee.
Court of Appeals
The Court of Appeals modified the NLRC decision and deleted the portion wherein Mekeni is ordered to reimburse
Locsins payment under the car plan and all other else are affirmed. CA justified the said decision stating that said payments by
Locsin are to be treated as rentals since there was no stipulation stating otherwise applying the Elisco Tool Manufacturing
Corporation v. Court of Appeals. Recovery by Locsin of the purchase price of the vehicle would lead to unjust enrichment.
Issue:
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Whether or Not the petitioner is entitled for the reimbursement of the amounts paid to purchase the said service vehicle
under the car plan.
Held:
The reliance of the Court of Appeals in the Elisco tools ruling is of no avail. Theruling involves an agreement wherein it
was stipulated that said payments would constitute as rentals but in the present, one cannot find any other stipulation stating that if
petitioner failed to completely cover one-half of the cost of the vehicle then all the deductions will be treated as rentals.
Second point, the vehicle did not fully benefited the employee but it was more beneficial on the part of the employer. The
said vehicle was material for the petitioner to cover the vast sales territory assigned to him and sales or marketing of Mekenis
products could not have been booked or made fast enought ot move Mekenis inventory.
Any benefit or privilege enjoyed by the petitioner while using the said car was merely incidental since it was under
Mekenis control and supervision. Free disposal of such vehicle is only given after the full payment, clearly it was Mekeni who was
reaping the full benefits in the use thereof.
Under Article 22 of the Civil Code, every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to
him. Article 2142 of the same Code likewise clarifies that there are certain lawful, voluntary and unilateral acts which give rise to the
juridical relation of quasi-contract, to the end that no one shall be unjustly enriched or benefited at the expense of another. In the
absence of specific terms and conditions governing the car plan arrangement between the petitioner and Mekeni, a quasi-contractual
relation was created between them. To point out the said car was used and has clearly depreciated, Mekeni may not enrich itself by
charging petitioner for the use of the vehicle which was absolutely necessary to the full and effective promotion of its business.
Petitioner cannot also recover the other half paid by Mekeni as it will also lead to unjust enrichment since it was not part of his
compensation package. Thus, petition is GRANTED IN PART.
4. TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union, GR No. 191714, Feb 26, 2014
Doctrine:
A certification election is the sole concern of the workers, save when the employer itself has to filethe petition, bu t
even after such filing , its rol e in the certification proc ess ceases and became s merely a bystander.
Facts:
On September 7, 2004 herein respondents T&H Shopfitters Union filed a complaint for Unfail Labor Practice by way of
Union Busting and Illegal Lockout against herein petitioner T&H Shopfitters Corp before the Labor Arbiter.
In their desire to improve the working conditions, respondents and other employees of the petitioner held their first
formal meeting. The next day seventeen employees were barred to enter the the petitioners factory premises and was ordered to
transfer to another T&H warehouse because of its expansion. Afterwards the said seventeen employees were repeatedly ordered to go
on forced leave due to inavailability of work.
In their contention respondents stated that the affected employees were not given regular work assignments, while
subcontractors were continuously hired to perform their functions. Which prompted herein respondents to seek the assistance of the
National Conciliation and Mediation Board wherein they were able to arrive into a certain compromise, but respondents alleged that
petitioners never complied with their agreement.
Subsequently, the union filed a petition for certification election. An order was issued to hold the certification elections in
both T&H Shopfitters and Gin Queen. A day before the scheduled election, petitioners sponsored a field trip for its employees. The
officers and members of the T&H Union were purportedly excluded from the said trip. On the evening of the field trip a sales officer
of petitioners campaigned against the union in the forthcoming certification election.
The following day, the employees were escorted from the field trip to the polling center in Zambales to cast their votes.
Due to the heavy pressure exerted by petitioners, the votes for no union prevailed. This prompted herein respondent union to file
its protest with respect to the certification election proceedings.
Labor Arbiter:
Dismissed respondent Unions complaint and all their money claims due to lack of merit.
NLRC:
Reversed and ruled in favor of respondents. Stating that said respondents (herein petitioner) committed Unfair Labor
Practices acts consisting in interfering with the exercise of the employees right to self- organization (specifically, through the
sponsored field trip on the day preceding the certification election, warning of employees of dire consequences should the union prevail
and escorting them to the polling center) and discriminating in regard to conditions of employment in order to discourage union
membership (assigning union officers and active union members as grass cutters on rotation basis).
Court of Appeals:
Dismissed the appeal and affirmed the decision of NLRC.
Issue:
Whether or not Unfair Labor Practice was committed by petitioners against respondents.
Supreme Court:
Supreme Court decided in the affirmative that said company committed ULP against the respondents. The petitioners are
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being accused of violations of paragraphs (a), (c), and (e) of Article 257 (formerly Article 248) of the Labor Code,13 to wit:
Article 257. Unfair labor practices of employers.It shall be unlawful for an employer to commit any of the following unfair
labor practices:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
xxxx
To contract out services or functions being performed by union members when such will interfere with, restrain, or coerce
employees in the exercise of their right to self-organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or
discourage membership in any labor organization. x x x
The test of whether an employer has interfered with and coerced employees in the exercise of their right to self
organization was laid down in the case of Insular Life Assurance Co., ltd Employees Association NATU vs. Insular Life Co. Ltd. ,that
is, whether the employer has engaged in conduct which, it may reasonably be said, tends to interfere with the free exercise of the
employees rights; and that it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is reasonable inference that anti-union conduct of the employer does have an adverse
effect on self organization and collective bargaining.
The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its employees, to the exclusion of
union members, before the scheduled certification election; 2) the active campaign by the sales officer of petitioners against the
union prevailing as a bargaining agent during the field trip; 3) escorting its employees after the field trip to the polling centre; 4) the
continuous hiring of subcontractors performing respondents functions; 5) assigning union members to the Cabangan site to work as
grass cutters; and 6) the enforcement of work on a rotational basis for union members, taken together, reasonably support an
inference that, indeed, such were all orchestrated to restrict respondents free exercise of their right to self-organization.
Petitioners have no business persuading and/or assisting its employees in their legally protected independent process of
selecting their exclusive bargaining representative. Wherefore the decision of the Court of Appeals is AFFIRMED.
5. Wesleyan University-Phils., vs. Wesleyan University-Phils., Faculty & Staff Asso., GR No. 181806, March 12, 2014
Doctrine: A Collective Bargaining Agreement is a contract entered into by an employer and a legitimate labor organization concerning
the terms and conditions of employment. Unilateral changes or suspensions in the implementation of the provisions of the CBA cannot
be allowed without the consent of both parties.
Facts: Petitioner Wesleyan University-Philippines (WUP) is a non-stock, non-profit educational institution duly organized and
existing under the laws of the Philippines while respondent WUP Faculty and Staff Association is a duly registered labor organization
acting as the sole and exclusive bargaining agent of all rank-and-file faculty and staff employees of petitioner. The parties signed a 5-
year CBA effective June 1, 2003 until May 31, 2008.
Petitioner issued a Memorandum providing guidelines on the implementation of vacation and sick leave credits as well as vacation
leave commutation. But respondent is not amenable to the unilateral changes made by petitioner because the guidelines are violative
of existing practices and the CBA. The CBA provides that all covered employees are entitled to 15 days sick leave and 15 days vacation
leave with pay every year and that after the second year of service, all unused vacation leave shall be converted to cash and paid to
the employee at the end of each school year, not later than August 30 of each year. The Memorandum, however, states that vacation
and sick leave credits are not automatic as leave credits would be earned on a month-to-month basis. Petitioner also announced its
plan of implementing a one-retirement policy, which was unacceptable to respondent. Respondent argued that there is an
established practice of giving two retirement benefits, one from the Private Education Retirement Annuity Association (PERAA) Plan
and another from the CBA Retirement Plan.
Voluntary Arbitrator- The one-retirement policy and the Memorandum are contrary to law.
Court of Appeals- Affirmed the nullification of the one-retirement policy and the Memorandum.
Issue: Whether the petitioner's unilateral acts violated the rule on non-diminution of benefits.
Ruling: Yes. Article 100 of the Labor Code explicitly prohibits employers from eliminating or reducing the benefits received by their
employees. This rule, however, applies only if the benefit is based on an express policy, a written contract, or has ripened into a
practice. To be considered a practice, it must be consistently and deliberately made by the employer over a long period of time. An
exception to the rule is when the practice is due to error in the construction or application of a doubtful or difficult question of law.
The error, however, must be corrected immediately after its discovery; otherwise, the rule on Non-Diminution of Benefits would still
apply.
In the case, the practice of giving two retirement benefits to petitioners employees is supported by substantial evidence. The two-
retirement policy is a practice. The CBA Retirement Plan and the PERAA Plan are not the same. There is nothing in the CBA to
indicate or even suggest that the "Plan" referred to in the CBA is the PERAA Plan. Besides, any doubt in the interpretation of the
provisions of the CBA should be resolved in favor of respondent.
While petitioner contends that such practice is illegal or unauthorized and that the benefits were erroneously given by the previous
administration, no evidence was presented by petitioner to substantiate its allegations. Petitioner cannot, without the consent of
respondent, eliminate the two-retirement policy and implement a one-retirement policy as this would violate the rule on non-
diminution of benefits. Moreover, the Memorandum issued imposes a limitation not agreed upon by the parties nor stated in the
CBA. When the provision of the CBA is clear, leaving no doubt on the intention of the parties, the literal meaning of the stipulation
shall govem. However, if there is doubt in its interpretation, it should be resolved in favor of labor, as this is mandated by no less
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than the Constitution.
6. Bluer Than Blue Joint Ventures Company/Mary Ann Dela Vega vs. Glyza Esteban G.R. No. 192582 April 7, 2014
Doctrine: No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except
in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.
Facts: Respondent was employed as Sales Clerk. The petitioner received a report that several employees have access to its point-of-
sale (POS) system through a universal password given by Flores. Upon investigation, it was discovered that it was respondent who
gave Flores the password. The petitioner sent a letter memorandum to respondent asking her to explain in writing why she should
not be disciplinary dealt with for tampering with the companys POS system through the use of an unauthorized password.
Respondent was also placed under preventive suspension for ten days. In her explanation, respondent admitted that she used the
universal password three times on the same day in 2005, after she learned of it from two other employees.
Respondents preventive suspension was lifted, but a notice of termination was sent to her, finding her explanation unsatisfactory
and terminating her employment immediately on the ground of loss of trust and confidence. Respondent was given her final pay,
including benefits and bonuses, less inventory variances incurred by the store amounting to 8,304.93. The petitioner justified the
deduction on the basis of alleged trade practice and that it is allowed by the Labor Code. Respondent signed a quitclaim and release
in favor of the petitioner. Subsequently, respondent filed a complaint for illegal dismissal, illegal suspension, holiday pay, rest day
and separation pay.
Labor Arbiter- Respondent was illegally dismissed and awarded her separation pay, backwages, unpaid salary during her preventive
suspension and attorneys fees.
NLRC- Reversed the decision of the LA and dismissed the case for illegal dismissal. Petitioners are ordered to refund to respondent
the amount of P 8,304.93 which was illegally deducted from her salary.
Court of Appeals- Set aside the decision of NLRC. Decision of the Labor Arbiter is REINSTATED with MODIFICATION, that the
award of separation pay is computed from January 2, 2004, and not from November 25, 2003.
Issues:
(1) Whether respondents act constitutes just cause to terminate her employment with the company on the ground of loss of trust
and confidence.
(2) Whether the petitioner illegally deducted the stores negative variance for the year 2005 to 2006 from the respondent's salary.
Ruling: (1) No. The acts committed by the respondent do not amount to a wilful breach of trust. She did so, however, out of curiosity
and without any obvious intention of defrauding the petitioner. There must be a showing that her acts were done with "moral
perverseness" that would justify the claimed loss of trust and confidence attendant to her job. While respondent's position was
denominated as sales clerk, the nature of her work included inventory and cashiering, a function that clearly falls within the sphere
of rank-and-file positions imbued with trust and confidence. Her duties were more than that of a sales clerk. Aside from attending to
customers and tending to the shop, respondent also assumed cashiering duties. As consistently ruled by the Court, it is not the job
title but the actual work that the employee performs that determines whether he or she occupies a position of trust and confidence.
Given that respondent had in her care and custody the stores property and funds, she is considered as a rank-and-file employee
occupying a position of trust and confidence.
(2) Yes. Article 113 of the Labor Code provides that no employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except in cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment, among others. The Omnibus Rules Implementing the Labor Code, meanwhile, provides:
SECTION 14. Deduction for loss or damage. Where the employer is engaged in a trade, occupation or business where the practice of
making deductions or requiring deposits is recognized to answer for the reimbursement of loss or damage to tools, materials, or
equipment supplied by the employer to the employee, the employer may make wage deductions or require the employees to make
deposits from which deductions shall be made, subject to the following conditions:
(a) That the employee concerned is clearly shown to be responsible for the loss or damage;
(b) That the employee is given reasonable opportunity to show cause why deduction should not be made;
(c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and
(d) That the deduction from the wages of the employee does not exceed 20 percent of the employees wages in a week.
Petitioner failed to sufficiently establish that respondent was responsible for the negative variance it had in its sales for the year 2005
to 2006 and that respondent was given the opportunity to show cause why deduction from her last salary should not be made.
7. Netlink Computer Inc. vs. Delmo, GR No. 160827, June 18, 2014
Concept: In the absence of a written agreement between the employer and the employee that sales commissions shall be paid in a
foreign currency, the latter has the right to be paid in such foreign currency once the same has become an established practice
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of the former. The rate of exchange at the time of payment, not the rate of exchange at the time of the sales, controls. Otherwise
would result to diminution of benefits.
Facts:
On November 3, 1991, Netlink Computer, Inc. Products and Services (Netlink)hired Eric S. Delmo (Delmo) as account
manager tasked to canvass and source clients and convince them to purchase the products and services of Netlink. Delmo
worked in the field most of the time. He was not required to accomplish time cards to record his personal
presence.
He was able to generate sales worth P35,000,000.00, more or less, from which he earned commissions amounting to
P993,558.89 and US$7,588.30.
He then requested payment of his commissions, but Netlink refused and only gave him partial cash advances chargeable to
his commissions. Later on, Netlink began to nitpick and fault find, like stressing his supposed absences and tardiness. In
order to force him to resign, the company issued a memoranda detailing his supposed infractions of the
companys attendance policy.
1996, Delmo was refused entry to the company premises by the security guard pursuant to memorandum.
Delmo filed a complaint for illegal dismissal.
NETLINK countered that that there were guidelines regarding company working time and its utilization and how the
employees' time would be recorded. Allegedly, all personnel were required to use the bundy clock to punch in and out in
the morning, and in and out in the afternoon. Excepted from the rules were the company officers, and the authorized
personnel in the field project assignments. Netlink claimed that it would be losing on the business transactions closed by
Delmo due to the high costs of equipment, and in fact his biggest client (ALCATEL) had not yet paid Netlink asserted that
warning, reprimand, and suspension memoranda were given to employees who violated company rules and regulations,
but such actions were considered as a necessary management tool to instill discipline.
1998, LA decision: favoring Delmo declared that the latter was illegally dismissed and ordered
Netlink to reinstate, and pay Delmo backwages and 13th month pay from 1996-1998 and the unpaid
commissions (as above stated).
NLRC: modified the LA decision because of the existence of valid and just causes for Delmos
termination and ordered netlink to pay Delmo the amount awarded by LA except for the
backwages.
MR denied.
CA affirmed subject to modification: since the payment of the commission is made to depend on
the future and uncertain event which is the payment of the accounts by the persons who have
transacted business with the petitioner. The evidence on record shows that the ALCATEL, private
respondent's biggest client has not paid fully the amount it owes to the petitioner as of March 10,
1998. The obligation therefore to pay commission has not yet arisen. However, petitioner failed to
refute by evidence that respondent is not entitled to the said commission, petitioner has paid the
respondent in the amount of P216,799.45 in the form of advance payment. Said amount
should therefore be deducted Delmo is not entitled to 13th month pay since the termination was
valid although deprived of his right to due process.
Sebuguero vs. National Labor Relations Commission where it was ruled that "where
the dismissal of an employee is in fact for a just and valid cause and is so proven to be but he is not
accorded his right to due process, i.e., he was not furnished the twin requirements of notice and the
opportunity to be heard, thedismissal shall be upheld but the employer must be sanctioned for
noncompliance with the requirements of or for failure to observe due process."
Petitioner also failed to refute by evidence that Delmo is not entitle to commissions
payable in US dollar, also the petitioners contention that the computation of these
commissions should be based on the value of peso in relation to a dollar at the time of sale
is untenable. the devaluation of the peso cannot be used as a shield against the
complainant because that should have been the lookout of the respondent company in
providing for such a clause that in case of devaluation, the price agreed upon should be at
the exchange rate when the contract of sale had been consummated the complainant
should not be made to suffer.
Issue: WON payment of commissions should be made in US dollars.
Ruling: YES
As a general rule, all obligations shall be paid in Philippine currency unless there is stipulation to the contrary. There was
no written contract between Netlink and Delmo stipulating that the latter's commissions would be paid in US dollars. The
absence of the contractual stipulation notwithstanding, Netlink was still liable to pay Delmo in US dollars because the
practice of paying its sales agents in US dollars for their US dollar denominated sales had become a company policy. This
was impliedly admitted by Netlink when it did not refute the allegation that the commissions earned by Delmo and its
other sales agents had been paid in US dollars. Instead of denying the allegation, Netlink only sought a declaration that the
US dollar commissions be paid using the exchange rate at the time of sale.
The principle of non-diminution of benefits, which has been incorporated in Article 100 of the Labor Code, forbade Netlink
from unilaterally reducing, diminishing, discontinuing or eliminating the practice. Verily, the phrase "supplements, or
other employee benefits" in Article 100 is construed to mean the compensation and privileges received by an employee
aside from regular salaries or wages.
With the payment of US dollar commissions having ripened into a company practice, there is no way that the commissions
due to Delmo were to be paid in US dollars or their equivalent in Philippine currency determined at the time of the sales.
To rule otherwise would be to cause an unjust diminution of the commissions due and owing to Delmo.
DENIED.
8. PLDT vs. Estranero, GR No. 192518, October 15, 2014
Concept: Set-off of employees loan against the latters separation pay by the employer cannot be validly made unless there is
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consent obtained from the employee in writing.
Facts:
On July 1, 1995, PLDT employed the respondent as an Auto-Mechanic/Electrician Helper, Job Grade 3 with a monthly
salary of P15,000.00 at the time of his separation from the service in 2003.
In the year 1995, PLDT adopted a company-wide Manpower Reduction Program (MRP), aimed at reducing its work force.
PLDT offered the affected employees an attractive redundancy pay consisting of 100% of their basic monthly
salary for every year of service, in addition to their retirement benefits, if entitled. For those who were not
qualified to the retirement benefits, they were offered separation Or redundancy package of 200% of their basic
monthly salary for every year of service.
Consequently, the respondent's position was included in those declared as redundant.
Attracted by the separation pay offered by the company, the respondent expressed his conformity to his inclusion in the
MRP. In the inter-office Memorandum dated April 21, 2003, the respondent declared that he has no objection to being
included in the redundancy program of PLDT.
Notice of Separation Due to Redundancy was submitted to the Department of Labor and Employment on April 25, 2003.
He was then made to sign a deed denominated as a Receipt, Release and Quitclaim for his severance from employment,
thus availed of the offered personnel reduction program.
Respondents length of service was 8 years therefor he was not qualified for a retirement pay which requires that the
employee have worked for at least 15 years. The respondent was nonetheless entitled to 200% of his basic monthly salary
for every year of service by way of redundancy pay or equivalent to P240,000.00. He was also entitled to other benefits (13th,
SIL, Bonus,etc) amounted to 27k+.
However, the respondent had outstanding liabilities arising from various loans he obtained from different entities which
summed to P267,028.37 (the same total amount of his redundancy pay). Thus, PLDT deducted the said amount from the
payment that the respondent was supposed to receive as his redundancy pay.
This prompted the respondent to retract his availment of the separation pay. However, the respondent was no longer
allowed to report to work.
Resp. filed a complaint for illegal dismissal with claim for reinstatement before the NLRC.
LA DECISION: favored resp. ordered PLDT to pay the redundancy pay in full and declared that the
set-off made to resp. outstanding loan against sep. pay invoked by PLDT was dismissed for lack of
jurisdiction.
PLDTs contention as to the set-off made by them, which LA claimed that they had no jurisdiction because the same did
not arise from E-E relationship may only be brought through a special civil action in regular courts.
NLRC affirmed. Agreed with LA that it is not a labor dispute but one arising from debtor-creditor
relation where PLDT stands as collecting agent
MR denied.
CA affirmed and ruled there must be proof that there is a personal written authorization from
respondent authorizing petitioners to deduct from his terminal pay his outstanding loans from said
entities. Petitioners failed to present convincing evidence that, indeed respondent, has knowledge and
consented to these deductions. On the contrary respondent maintains that petitioners unilaterally
made the application of deductions without his knowledge, much less consent. Thus, it is the burden
of petitioners to present proof of the validity of the deductions. Proof insufficient.
MR denied.
ISSUE: Whether or not the petitioners can validly deduct the respondent's outstanding loan obligation from his
redundancy pay.
HELD: NO. PLDT CANNOT VALIDLY DEDUCT THE LOANS FROM RESP. REDUNDANCY PAY.
The instant case is not about jurisdiction to determine the validity of the set-off but more of the petitioner's authority to
deduct from the redundancy pay of the respondent his outstanding loans obtained from different entities.
It is clear in Article 113 15 of the Labor Code that no employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except in cases where the employer is authorized by law or regulations issued
by the Secretary of Labor and Employment, among others. The IRR of LC meanwhile, provides that deductions from the
wages of the employees may be made by the employer when such deductions are authorized by law, or when the
deductions are with the written authorization of the employees for payment to a third person.
Article 116 17 of the Labor Code clearly provides that it is unlawful for any person, directly or indirectly, to withhold any
amount from the wages of a worker without the worker's consent.
The deductions made to the respondent's redundancy pay do not fall under any of the circumstances provided under
Article 113, nor was it established with certainty that the respondent has consented to the said deductions or that the
petitioners had authority to make such deductions.
PLDT has no legal right to withhold the respondent's redundancy pay and other benefits to recompense for his
outstanding loan obligations to different entities. The respondent's entitlement to his redundancy pay is mandated by law
which the petitioners cannot unjustly deny.
CAs decision affirmed.
9. Milan et al vs. NLRC, GR No. 202961, Feb. 4, 2015
CONCEPT: An employer is allowed to withhold terminal pay and benefits pending the employees return of the employers
properties.
As Solid Mills employees, petitioners and their families were allowed to occupy SMI Village, a property owned by Respondent Solid
Mills. According to Solid Mills, this was out of liberality and for the convenience of its employees, and on the condition that the
employees, would vacate the premises anytime the Company deems fit. Due to serious business losses, petitioners were informed
that Solid Mills will cease its operations. Solid Mills filed its Department of Labor and Employment termination report and later,
Solid Mills sent to petitioners individual notices to vacate SMI Village.
After, petitioners were no longer allowed to report for work. They were required to sign a memorandum of agreement with release
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and quitclaim before their vacation and sick leave benefits, 13th month pay, and separation pay would be released. Employees who
signed the memorandum of agreement were considered to have agreed to vacate SMI Village, and to the demolition of the
constructed houses inside as condition for the release of their termination benefits and separation pay. Petitioners refused to sign the
documents and demanded to be paid their benefits and separation pay.
Hence, petitioners filed complaints before the Labor Arbiter for alleged non-payment of separation pay, accrued sick and vacation
leaves, and 13th month pay. They argued that their accrued benefits and separation pay should not be withheld because their
payment is based on company policy and practice. Also, Petitioners argue that respondent Solid Mills and NAFLU (employees labor
union) memorandum of agreement has no provision stating that benefits shall be paid only upon return of the possession of
respondent Solid Mills property; that said agreement only provides that the benefits shall be less accountabilities, which should
not be interpreted to include such possession.
On the other hand, Solid Mills argued that petitioners complaint was premature because they had not vacated its property.
Respondents Solid Mills argue that petitioners failure to turn over respondent Solid Mills property constituted an unsatisfied
accountability for which reason petitioners benefits could rightfully be withheld.
Labor Arbiter, NLRC, and CA: The Labor Arbiter ruled in favor of petitioners. According to the Labor Arbiter, Solid Mills illegally
withheld petitioners benefits and separation pay. NLRC reversed the Labor Arbiters ruling and NLRCs ruling was affirmed by the
CA.
ISSUE:
Can respondent solid mills withhold the employees terminal pay and other benefits of the employees if the employees have not
returned the property belonging to solid mills?
RULING:
YES.
Requiring clearance before the release of last payments to the employee is a standard procedure among employers, whether public or
private. Clearance procedures are instituted to ensure that the properties, real or personal, belonging to the employer but are in the
possession of the separated employee, are returned to the employer before the employees departure.
As a general rule, employers are prohibited from withholding wages from employees as provided in the art. 100 and 116 of the Labor
Code.
HOWEVER, OUR LAW SUPPORTS THE EMPLOYERS INSTITUTION OF CLEARANCE PROCEDURES BEFORE THE RELEASE OF
WAGES. As an exception to the general rule that wages may not be withheld and benefits may not be diminished, the Labor Code
provides:
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:
1. 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;chanrobleslaw
2. 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
3. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. (Emphasis
supplied)
THE CIVIL CODE PROVIDES THAT THE EMPLOYER IS AUTHORIZED TO WITHHOLD WAGES FOR DEBTS DUE:
Article 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.cralawred
Debt in this case refers to any obligation due from the employee to the employer. It includes any accountability that the employee
may have to the employer. There is no reason to limit its scope to uniforms and equipment, as petitioners would argue.
The return of the propertys possession became an obligation or liability on the part of the employees when the employer-employee
relationship ceased. Thus, respondent Solid Mills has the right to withhold petitioners wages and benefits because of this existing
debt or liability.
Withholding of payment by the employer does not mean that the employer may renege on its obligation to pay employees their
wages, termination payments, and due benefits. The employees benefits are also not being reduced. It is only subjected to the
condition that the employees return properties properly belonging to the employer. This is only consistent with the equitable
principle that no one shall be unjustly enriched or benefited at the expense of another.
10. Galang et al., vs. Boie Takeda Chemicals Inc. et al., GR No. 183934, July 20, 2016
Concept: To be considered as a regular company practice the employee must prove by substantial evidence that the giving of the
benefit is done over a long period of time, and that it has been made consistently and deliberately
Facts: Respondent Boie Takeda Chemicals, Inc. (BTCI) hired petitioners Ernesto Galang and Ma. Olga Jasmin Chan. Petitioners rose
from the ranks and were promoted to Regional Sales Managers. As Regional Sales Managers, they belong to the sales department of
BTCI. When the National Sales Director position became vacant, the General Manager, Kazuhiko Nomura (Nomura), asked
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petitioners to apply for the position of National Sales Director. Later, however, petitioners were informed that BTCI, instead of the
petitioners, promoted Edwin Villanueva as National Sales Director. Petitioners believed that Villanueva did not apply for the
position, and has only three years of experience in sales.
Aggrieved of not being the one promoted, petitioners inquired if they could avail of early retirement package due to health reasons.
Specifically, they requested Nomura if they could avail of the early retirement package of 150% plus 120% of monthly salary for every
year of service tax free, and full ownership of service vehicle tax free. They claimed that this is the same retirement package given to
previous retirees namely, former Regional Sales Director Jose Sarmiento, Jr. (Sarmiento), and former National Sales Director Melchor
Barretto.
Nomura, however, insisted that such retirement package does not exist and Sarmiento's case was exceptional since he was just a few
years shy from the normal retirement age. Then, petitioners intimated their intention to retire. Thereafter, petitioners received their
retirement package and other monetary pay from BTCI. Upon petitioners' retirement, the positions of Regional Sales Manager were
abolished, and a new position of Operations Manager was created.
The Arguments
Petitioners argue that they were constructively dismissed because of the acts of BTCI 's General Manager Nomura. They claim that
they were forced into resigning because instead of promoting them to the position of National Sales Directors, BTCI hired Villanueva
who only had three years of service in the company, who has no background or experience in sales to speak of.
Petitioners also argue that the retirement package given to them is lower compared to others who were holding the similar position
at the time of their retirement. Petitioners cite the case of one Sarmiento, who was promoted with them to the same position, and
who opted for early retirement in 2001. Sarmiento allegedly received a more generous package compared to what petitioners
received.
For its part, BCTI claims that the complaint is only an attempt to extort additional benefits from the company. BTCI argues that no
constructive dismissal can occur because there was no movement or transfer of position or diminution of salaries or benefits. Neither
was there any circumstance that would make petitioners' continued employment unreasonable or impossible, and that the
appointment of Villanueva was within the management prerogative.
As to the payment of retirement benefits, BTCI insists that petitioners have been paid according to the Collective Bargaining
Agreement (CBA) between BTCI and BTCI Supervisory Union. Although petitioners are managers (and are not covered by the CBA),
BTCI by practice grants the same retirement benefits to managers. BTCI admits that it gave Sarmiento additional financial assistance
because of serious health problems, and because he was merely three years away from normal retirement. Other employees cited by
petitioners all received retirement benefits computed on the CBA provisions.
Labor Arbiter, NLRC, and CA: The labor arbiter ruled that the petitioner was constructively dismissed, but it was reversed by the
NLRC for failure to prove that they were indeed constructively dismissed. CA affirmed NLRCs decision.
Issues: I. Whether petitioners were constructively dismissed from service; and
II. Whether petitioners are entitled to a higher retirement package.
Ruling:
I. No. Petitioners were not constructively dismissed from service
Constructive dismissal has often been defined as a "dismissal in disguise" or "an act amounting to dismissal but made to appear as if
it were not." It exists where there is cessation of work because continued employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in pay. In some cases, while no demotion in rank or diminution
in pay may be attendant, constructive dismissal may still exist when continued employment has become so unbearable because of
acts of clear discrimination, insensibility or disdain by the employer, that the employee has no choice but to resign. Under these two
definitions, what is essentially lacking is the voluntariness in the employee's separation from employment.
In this case, petitioners were neither demoted nor did they receive a diminution in pay and benefits. Petitioners also failed to show
that employment is rendered impossible, unreasonable or unlikely. Petitioners admitted that they have previously intended to retire
and were actually the ones who requested to avail of an early retirement. Our labor laws respect the employer's inherent right to
control and manage effectively its enterprise and do not normally allow interference with the employer's judgment in the conduct of
his business. The promotion of employees to managerial or executive positions rests upon the discretion of management.
II. No. Petitioners were not discriminated against in terms of their retirement package.
The entitlement of employees to retirement benefits must specifically be granted under existing laws, a collective bargaining
agreement or employment contract, or an established employer policy. Based on both parties' evidence, petitioners arc not covered
by any agreement. There is also no dispute that petitioners received more than what is mandated by Article 287 of the Labor Code.
Petitioners, however, claim that they should have received a larger pay because BTCI has given more than what they received to
previous retirees, and that it has already become a company practice.
The burden of proof that the benefit has ripened into company practice rests with the employee: To be considered as a regular
company practice the employee must prove by substantial evidence that the giving of the benefit is done over a long period
of time, and that it has been made consistently and deliberately.
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Petitioners presented evidence showing that Anita Ducay, Rolando Arada, Marcielo Rafael, and Sarmiento, received significantly
larger retirement benefits. However, the cases of Ducay, Arada, and Rafael cannot be used as precedents to prove this specific
company practice because these employees were not shown to be similarly situated in terms of rank, nor are the applicable
retirement packages corresponding to their ranks alike. Also, these employees, including Sarmiento, all retired in the same year. A
year cannot be considered long enough to constitute the grant of retirement benefits to these employees as company practice.
7.PAYMENT OF WAGES
CASES:
1. Congson vs. NLRC, 243 SCRA 260 [1995]
FACTS:
Private respondents were regular piece-rate workers of petitioner, the registered owner of Southern Fishing Industries. Private
respondents were uniformly paid at a rate of P1.00 per tuna per movement (3 movements from fishing boat to truck; truck to cold
storage; from cold storage to vessel for shipment).
During the first week of June 1990, petitioner notified his workers of his proposal to reduce the rate-per-tuna movement due to the
scarcity of tuna. Private respondents resisted the proposed rate reduction. When they reported for work the next day, they were
informed that they had been replaced by a new set of workers. They were instructed to wait for further notice but were in vain.
On 15 June 1990, private respondents filed a case before NLRC for underpayment of wages and non-payment of overtime pay, 13th
month pay, holiday pay, rest day pay, and five (5)-day service incentive leave pay; and for constructive dismissal. On 2 July 1990,
private respondents filed another case against petitioner, containing an additional claim for separation pay should their complaint
for constructive dismissal be upheld.
Conciliation conferences were scheduled but there did not reach an agreement. Therefore, Labor Arbiter directed the parties to
submit their position papers.
Labor Arbiter & NLRC ruled in favor of respondents, ordering petitioner to pay for the differential wage pay, 13 th month pay, SIL and
separation pay. Holiday pay, rest day and SIL were not granted for lack of evidence presented.
Petitioner argued:
Re: Wage differential pay:
The value of the tuna intestine and liver should be computed in arriving at the daily wage of herein complainants because the very
essence of the agreement between complainants and respondent is: complainants shall be paid only P1.00 per tuna per movement
BUT the intestines and liver of the tuna delivered shall go to the herein complainants. It should be noted that tuna intestines and
liver are easily disposed of in any public market.
Re: Separation pay:

Under existing laws and jurisprudence, whenever there is a finding of illegal dismissal, the available and logical remedy is
reinstatement. As a permissible exception to the general rule, separation pay may be awarded to the employee in lieu of
reinstatement, by reason of strained relationship between the employer and employee.
Since there was no finding or even allegation of strained relationship between petitioner and private respondents, respondent NLRC
should have deleted, according to petitioner, the award of separation pay in Labor Arbiter Aponesto's decision.
ISSUES:
1. WON the value of the tuna intestine and liver should be computed in arriving at the daily wage, as it was the agreement
between the parties in the employment contract.
2. WON reinstatement should be granted in lieu of separation pay.
RULING:
1. No. Labor Code only allow wage to be paid in legal tender. The agreement made by the party even expressly requested by
the worker will not shield the prohibition.
"ARTICLE 102. Forms of Payment. No employer shall pay the wages of an employee by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the
employee.
Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of
effectivity of this Code, or is necessary because as specified in appropriate regulations to be issued by the Secretary of Labor
or as stipulated in a collective bargaining agreement." (Emphasis supplied)
Undoubtedly, petitioner's practice of paying the private respondents the minimum wage by means of legal tender combined with
tuna liver and intestines runs counter to the abovecited provision of the Labor Code. The fact that said method of paying the
minimum wage was not only agreed upon by both parties in the employment agreement but even expressly requested by
private respondents, does not shield petitioner. Article 102 of the Labor Code is clear. Wages shall be paid only by means of legal
tender. The only instance when an employer is permitted to pay wages in forms other than legal tender, that is, by checks or money
order, is when the circumstances prescribed in the second paragraph of Article 102 are present.
2. No. There exist a strained relationship.
Firstly, petitioner consistently refused to re-admit private respondents in his establishment. Petitioner even replaced private
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respondents with a new set of workers to perform the tasks of private respondents.
In the case of Felix Esmalin vs. National Labor Relations Commission (3rd Division) and CARE Philippines, we held that
strained relationship is fairly established if the records of the case showed consistent refusal of the employer to
accept the dismissed employee.
And secondly, private respondents themselves, from the very start, had already indicated their aversion to their continued
employment in petitioner's establishment. The very filing of their second case before Labor Arbiter specially for separation pay is
conclusive of private respondents' intention to sever their working ties with petitioner.
In the case of Arturo Lagniton, Sr. vs. National Labor Relations Commission, et al. , we ruled that the refusal of the dismissed
employee to be re-admitted is constitutive of strained relations.
2.North Davao Mining vs. NLRC, 254 SCRA 721 [1996] FACTS:
Petitioner, North Davao Mining Corporation (North Davao) was incorporated in 1974 as a 100% privately-owned company. Later, the
Philippine National Bank (PNB) became part owner thereof as a result of a conversion into equity of a portion of loans obtained by
North Davao from said bank. On June 30, 1986, PNB transferred all its loans to and equity in North Davao in favor of the national
government, later turned them over to petitioner Asset Privatization Trust (APT).
On May 31, 1992, petitioner North Davao completely ceased operations due to serious business reverses. From 1988 until its closure in
1992, North Davao suffered net losses averaging three billion pesos (P3,000,000,000.00) per year, for each of the five years prior to its
closure.
When it ceased operations, its remaining employees were separated and given the equivalent of 12.5 days' pay for every year of
service, computed on their basic monthly pay, in addition to the commutation to cash of their unused vacation and sick leaves.
However, it appears that, during the life of the petitioner corporation, from the beginning of its operations in 1981 until its closure in
1992, it had been giving separation pay equivalent to thirty (30) days' pay for every year of service. Moreover, as the region
where North Davao operated was plagued by insurgency and other peace and order problems, the employees had to collect their
salaries at a bank in Tagum, DavaoDel Norte, some 58 kilometers from their workplace and about 2 1/2 hours' travel time by public
transportation; this arrangement lasted from 1981 up to 1990.
ISSUE:
1. WON the reduction in payment of separation pay on the day of closure due to serious financial loss is discriminatory to
the separated employees.
2. WON North Davao Mining violated the Labor Code regarding place of payment of wages.
RULING:
1. No. Where the closure was due to business losses the Labor Code does not impose any obligation upon the employer to
pay separation benefits.
"Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for
every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business losses or financial reverses,
the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year
of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year."
(emphasis supplied)
The underscored portion of Art. 283 governs the grant of separation benefits "in case of closures or cessation of operation" of
business establishments "NOT due to serious business losses or financial reverses . . .". Where, however, the closure was due to
business losses as in the instant case, in which the aggregate losses amounted to over P20 billion the Labor Code does not
impose any obligation upon the employer to pay separation benefits, for obvious reasons. Therefore, the fact that less separation
benefits were granted when the company finally met its business death cannot be characterized as discrimination. Such action was
dictated not by a discriminatory management option but by its complete inability to continue its business life due to accumulated
losses. Indeed, one cannot squeeze blood out of a dry stone. Nor water out of parched land.
"(t)he law, in protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer."
2. Yes. Violation of Section 4, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code.
'From the evidence on record, we find that the hours spend by complainants in collecting salaries at a bank in Tagum, Davao del
Norte shall be considered compensable hours worked. Considering further the distance between Amacan, Maco to Tagum which is 2
1/2 hours by travel and the risks in commuting all the time in collecting complainants' salaries, would justify the granting of
backwages equivalent to two (2) days in a month as prayed for.
'Corollary to the above findings, and for equitable reasons, we likewise hold respondents liable for the transportation expenses
incurred by complainants at P40.00 round trip fare during pay days.'
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3. Heirs of Sara Lee vs. Rey, G.R. No. 149013, Aug. 31, 2006
FACTS:
The House of Sara Lee (petitioner) is engaged in the direct selling of a variety of product lines for men and women with dealers to
sell the aforementioned merchandise. These dealers, known either as "Independent Business Managers" (IBMs) or "Independent
Group Supervisors" (IGSs), would obtain at discounted rates the merchandise on credit and then sell the same products to their own
customers at fixed prices. In turn, the dealers are paid "Services Fees," the amount of which depends on the volume and value of
their sales. Under existing company policy, the dealers must remit the proceeds of their sales within a designated credit period,
which would either be 38 days for IGSs or 52 days for IBMs.
Cynthia Rey (respondent), held the position of Credit Administration Supervisor or CAS at the Cagayan de Oro City branch of the
petitioner. The primary duty of the CAS is to strictly monitor each of these deadlines, to supervise the credit and collection of
payments and outstanding accounts due to the petitioner from its independent dealers and various customers, and to screen
prospective IBMs.
Respondent in many instances change the credit terms of certain IBMs from the 52-day limit to an "unauthorized" term ranging from
60 days or 90 days, thus, resulting to higher service fee to be paid to IBMs. The Total Service Fee discrepancy as a result of credit
term adjustment amounts to P211,000.00.
Petitioner then suspended respondent however, respondent requested instead that a formal investigation be conducted. Both agreed
and in the meantime, respondent's suspension was lifted, but without prejudice to the outcome of the administrative investigation.
Meanwhile, on April 15, 1996, Branch Office Manager, Villagracia resigned. Upon his resignation, respondent managed the Cagayan
de Oro branch for three months pending the appointment of a new BOM.
The petitioner, on June 25, 1996, formally dismissed the respondent for breach of trust and confidence.
Respondent argued that she was illegally dismissed and further argued that the loss of trust and confidence advanced by the
petitioner is negated by the fact that respondent, after Villagracia's resignation, was allowed to manage the Cagayan de Oro City
branch and by the fact that she was commended for her good performance.
ISSUE:
1. WON respondent was validly terminated.
RULING:
1. Yes. On the ground of loss of trust and confidence.
Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence.
More so, in the case of supervisors or personnel occupying positions of responsibility, loss of trust justifies termination. Loss of
confidence as a just cause for dismissal is premised on the fact that an employee concerned holds a position of trust and confidence.
This situation applies where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and
protection of the employer's property. But, in order to constitute a just cause for dismissal, the act complained of must be "work-
related," such that the employee concerned is unfit to continue working for the employer.
The degree of proof required in labor cases is not as stringent as in other types of cases. It must be noted, however, that recent
decisions of this Court have distinguished the treatment of managerial employees from that of rank-and-file personnel in the
application of the doctrine of loss of trust and confidence. With respect to rank-and-file personnel, loss of trust and confidence as
ground for valid dismissal requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions
and accusations by the employer will not be sufficient. But as to a managerial employee, the mere existence of a basis for believing
that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not required; it is sufficient that there is some basis for the loss of confidence, as when
the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the
nature of his participation therein renders him unworthy of the trust and confidence demanded by his position.
The nature of her work requires a substantial amount of trust and confidence on the part of the employer. Being the Credit
Administration Supervisor of the Cagayan de Oro and Butuan City branches of the petitioner, respondent occupied a highly sensitive
and critical position and may thus be dismissed on the ground of loss of trust and confidence.
Even in light of this "promotion," the petitioner still has the right to legally terminate respondent if the former has belief that the
latter cannot be trusted.
8.CONDITIONS OF EMPLOYMENT
CASES:
1. San Juan De Dios Hospital vs. NLRC, 282 SCRA 316 [1997]
Facts: Petitioners sent a written request for the expeditious implementation and payment by respondent, San Juan de Dios Hospital,
of the "40-Hours/5-Day workweek" with compensable weekly two days off as provided for by Republic Act 5901 as clarified for
enforcement by the Secretary of Labor's Policy Instructions No. 54 dated April 12, 1988. Respondent hospital failed to give a favorable
response; thus, petitioners filed a complaint regarding their "claims for statutory benefits under the above-cited law and policy
issuance." The Labor Arbiter, however, dismissed the complaint. Petitioners appealed before public respondent National Labor
Relations Commission (NLRC), which affirmed the Labor Arbiter's decision. Hence, this petition, ascribing grave abuse of discretion
on the part of NLRC in concluding that Policy Instructions No. 54 "proceeds from a wrong interpretation of RA 5901" and Article 83
of the Labor Code.
Issue: WON Policy Instructions No. 54 is valid or not.
Ruling: No. There is nothing in the law (Article 83 of the Labor Code) that supports then Secretary of Labor's assertion that
"personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-
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day workweek in any given workweek". Needless to say, the Secretary of Labor exceeded his authority by including two days off with
pay in contravention of the clear mandate of the statute. A perusal of Republic Act No. 5901 reveals nothing therein that gives two
days off with pay for health personnel who complete a 40-hour work or 5-day workweek. The Explanatory Note of House Bill No.
16630 (later passed into law as Republic Act No. 5901) explicitly states that the bill's sole purpose is to shorten the working hours of
health personnel and not to dole out a two days off with pay.
2. Simedarby vs. NLRC, 289 SCRA 86 [1998]
Facts: Sime Darby Salaried Employees Association, an association of monthly salaried employees, filed a complaint against Sime
Darby Pilipinas. It alleged that the change in work schedule as well as the removal of the 30-minute paid on call lunch break of the
monthly salaried employees constitute unfair labor practice and is discriminatory. The LA and the NLRC dismissed the complaint as
this was a valid exercise of management prerogative. Upon Motion for Reconsideration, the NLRC reversed its decision because it
deprived the workers of benefits resulting in an unjust diminution of company privileges.
Issue: WON there was an unjust diminution of company privileges
Ruling: No. The SC held that the change in work schedule is a valid exercise of management prerogative. It complies with the 8-hour
work period provided for in the Code and even gave the employees 1 full hour of break without interruption by the employer.
Further, it applied to all employees similarly situated. The SC also stated that so long as such prerogative is exercised in good faith by
the employer, the same will be upheld by the Courts.
3.Phil. Airlines vs. NLRC
FACTS
Private respondent Dr. Herminio A. Fabros (Fabros) was employed as flight surgeon at Philippine Airlines (PAL). He was assigned at
PAL Medical Clinic at Nichols and whose work schedule is from 4:00 in the afternoon until 12:00 midnight.
Around 7 oclock pm of February 17, 1994, Fabros left the clinic to have his dinner at his residence, a five-minute drive from the clinic.
A few minutes later, the clinic received an emergency call from the PAL Cargo Services. That One of its employees had suffered a
heart attack. Upon receiving the call the nurse on duty, Merlino Eusebio (Eugenio), called private respondent at home to inform him
of the emergency. The patient arrived at the clinic at 7:50 in the evening and was rushed by Eusebio to the hospital. Private
respondent reached the clinic at around 7:51 in the evening however, Eusebio had already left with the patient. On the following day
the patient died.
Upon learning about the incident, PAL Medical Director Dr. Banzon ordered the Chief Flight Surgeon to conduct an investigation.
The Chief Flight Surgeon, in turn, required private Fabros to explain why no disciplinary sanction should be taken against him.
In his explanation, Fabros averred that he was entitled to a thirty-minute meal break and that he immediately left his residence upon
being informed by. Eusebio about the emergency and he arrived at the clinic a few minutes later and that Eusebio panicked and
brought the patient to the hospital without waiting for him.
The management charged Fabros with abandonment of post while on duty because according to them his explanation was
unacceptable.
Fabros argues that being a full-time employee, private respondent is obliged to stay in the company premises for not less than eight
hours. Therefore, he may not leave the company premises during such time, even to take his meals.
ISSUE
1.) Whether or not full-time employees are obliged to stay in the company premises for not less than eight (8) hours and may not
leave the companys premises during meals.
2.) Whether or not all employees illegally dismissed are entitled for moral damages.
COURTS RULING
1.) NO. Employees are not prohibited from going out of the premises as long as they return to their post on time.
Articles 83 and 85 of the Labor Code read:
Art. 83. Normal hours of work.the normal hours of work of any employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a
bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive
of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48)
hours, in which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for
work on the sixth day. For purposes of this Article, health personnel shall include: resident physicians, nurses, nutritionists,
dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnel.
Art. 85. Meal periods.Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to
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give his employees not less than sixty (60) minutes time-off for their regular meals.
Section 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code further states:
Sec. 7. Meal and Rest Periods.Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for
regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the employee;
(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;
(b) Where the establishment regularly operates not less than sixteen hours a day;
(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or
installations to avoid serious loss which the employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.
Therefore, the eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must
take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return
to their posts on time. Private Fabros act, therefore, of going home to take his dinner does not constitute abandonment.
2.) NO. Not every employee who is illegally dismissed or suspended is entitled to damages.
The Court held that as a rule moral damages are recoverable only where the dismissal or suspension of the employee was attended by
bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public
policy. Bad faith does not simply mean negligence or bad judgment. It involves a state of mind dominated by ill will or motive. It
implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity.
The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always
presumes good faith.
In the case at bar, there is no showing that the management of Petitioner Company was moved by some evil motive in suspending
private respondent. It suspended private respondent on an honest, albeit erroneous, belief that private respondent's act of leaving the
company premises to take his meal at home constituted abandonment of post which warrants the penalty of suspension. Also, it is
evident from the facts that PAL gave Fabros all the opportunity to refute the charge against him and to defend himself. These negate
the existence of bad faith on the part of PAL.
4. Linton Commercial Co., Inc., vs. Hellera et al., G.R. No. 163147, October 10, 2007
FACTS
Linton, on December 17, 1997, issued a memorandum ;informing its employees about the company's decision to suspend its
operations from December 18, 1997 to January 5, 1998 due to the currency crisis that affected its business operations. Linton then
submitted an establishment termination report to the Department of Labor and Employment (DOLE) regarding the temporary
closure of the establishment. The company's operation was to resume on January 6, 1998. Linton issued another memorandum on
January 7, 1997 informing the workers that effective January 12, 1998, it would implement a new compressed workweek of three (3)
days on a rotation basis. This means that each worker would be working on a rotation basis for three working days only instead of six
days a week. On the same day, Linton submitted an establishment termination report concerning the rotation of its workers. Linton
proceeded with the implementation of the new policy without the approval by DOLE. Aggrieved, sixty-eight workers filed a
Complaint for illegal reduction of workdays.
ISSUE
Whether there was an illegal reduction of work when Linton implemented a compressed workweek by reducing from six to three the
number of working days with the employees working on a rotation basis.
COURTS RULING
YES. The compressed workweek arrangement was unjustified and illegal.
Citing the case of Philippine Graphic Arts, Inc. v. NLRC, where the Court upheld for the validity of the reduction of working hours,
taking into consideration the following: 1. the arrangement was temporary, 2. it was a more humane solution instead of a
retrenchment of personnel, 3. there was notice and consultations with the workers and supervisors, 4. a consensus were reached on
how to deal with deteriorating economic conditions and 5. It was sufficiently proven that the company was suffering from losses.
Further the Bureau of Working Conditions of the DOLE, released a bulletin in determining when an employer can validly reduce
the regular number of working days. The bulletin states that a reduction of the number of regular working days is valid where the
arrangement is resorted to by the employer to prevent serious losses due to causes beyond his control, such as when there is a
substantial slump in the demand for his goods or services or when there is lack of raw materials. Although the bulletin
stands more as a set of directory guidelines than a binding set of implementing rules, it has one main consideration, consistent with
the ruling in Philippine Graphic Arts Inc., in determining the validity of reduction of working hours that the company was
suffering from losses.
However upon close examination of petitioners' financial reports for 1997-1998 shows that, while the company suffered a loss of
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P3,645,422.00 in 1997, it retained a considerable amount of earnings and operating income.
And while Linton had suffered from losses for that year, there remained enough earnings to sufficiently sustain its operations. A year
of financial losses would not warrant the immolation of the welfare of the employees, which in this case was done through a reduced
workweek that resulted in an unsettling diminution of the periodic pay for a protracted period. Permitting reduction of work and pay
at the slightest indication of losses would be contrary to the State's policy to afford protection to labor and provide full employment.
The court has ruled that while it is true that the management has the prerogative to come up with measures to ensure profitability or
loss minimization. However, such privilege is not absolute. Management prerogative must be exercised in good faith and with due
regard to the rights of labor. As previously stated, financial losses must be shown before a company can validly opt to reduce the
work hours of its employees. However, to date, no definite guidelines have yet been set to determine whether the alleged losses are
sufficient to justify the reduction of work hours.
If the standards set in determining the justifiability of financial losses under Article 283 (i.e., retrenchment) or Article 286 (i.e.,
suspension of work) of the Labor Code were to be considered, petitioners would end up failing to meet the standards. On the one
hand, Article 286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a
period not exceeding six (6) months.
Records show that Linton continued its business operations during the effectivity of the compressed workweek, which spanned more
than the maximum period. On the other hand, for retrenchment to be justified, any claim of actual or potential business losses must
satisfy the following standards: (1) the losses incurred are substantial and not de minimis; (2) the losses are actual or reasonably
imminent; (3) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (4) the
alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient and convincing
evidence. Linton failed to comply with these standards.
5. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, Oct. 15, 2008
Principle : A regular employee is entitled for overtime pay for rendering work after 8 hours as a general rule, as an EXCEPTION, a
regular employee may validly waive his right of overtime pay after rendering work beyond 8 hours if he has entered into a
Compressed Work Week (CWW).
Facts: Petitioners are employers of Tryco Pharma in which they were employed as helpers, and factory workers. Subsequently, they
entered into a memorandum of agreement with their employer in which they entered into a Compressed Work Week schedule in
which it provided that their regular working hours will be 8:00 am to 6:12 pm from Monday to Friday and that they expressly waive
their right to overtime pay . Subsequently, petitioners filed for non-payment of overtime pay representing the work theyve rendered
from 5:00 to 6:12 pm.
Issue: WON petitioners are entitled for overtime payment in lieu of the agreement
Held: NO. Petitioners are not entitled for the overtime payment. Under D.O. No. 21, waiver of overtime pay shall be valid provided
that the agreement has been entered into by the parties voluntarily. Further, the Memorandum of Agreement was validly entered
since there was no diminution of benefits as they were entitled to the same wage as if they had a regular work week schedule.
6. Dasco et al., vs. Phiktranco Service Enterprise, GR No. 211141, June 29, 2016
Principle: Field personnel as a GENERAL RULE are not entitled for Overtime Pay and Service Incentive Leave (SIL), as an
EXCEPTION, Field personnel maybe considered as A Regular Employee if they are subjected to the supervision of the employer and
such hours of work they have rendered maybe determined and thus they may be entitled of Overtime Pay and Service Incentive
Leave.
Facts: Petitioners are DRIVERS of respondent who drive buses 2-3 days per round trip. However, they were only paid 404.00 pesos
per round trip without overtime pay and below minimum wage. This prompted petitioner to file a complaint against respondent to
claim for their overtime pay. Respondent contended that petitioners are not entitled for overtime pay since they were bus drivers and
thus can be considered field personnel.
Issue: WON Petitioners are entiled for overtime pay being bus drivers
Held: Yes. Petitioners are entitled for overtime pay notwithstanding that they are bus driver who perform work outside of the office
or workplace of their employer. They are not considered as field personnel since they were under control of the employer in which
they are tasked to be at a specific place in a specific time. They were also monitored by checkers and dispatchers. Further their actual
work could be determined with reasonable certainty. Thus they should be considered as regular employees and therefore entitled for
Overtime Pay and Service Incentive Leave.
7. HSY Marketing Ltd., Villatique, GR No. 219569, August 17, 2016
DOCTRINE:
The liability for the payment of separation pay is but a legal consequence of illegal dismissal where reinstatement is no
longer feasible. Moreover, as there is no reinstatement to speak of, respondent cannot invoke the doctrine of strained relations to
support his prayer for the award of separation pay.
FACTS:
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In 2003, petitioner hired respondent as a field driver for Fabulous Jeans & Shirt & General Merchandise. In 2011,
respondent, while driving, bumped into a pedestrian, Ryan Dorataryo. Fabulous Jeans shouldered the hospitalization and medical
expenses of Dorataryo, which respondent was asked to reimburse, but to no avail. On February 24, 2011, when respondent was
allegedly required to sign a resignation letter, which he refused to do, his salary was withheld, as a result. Convinced that he was
already terminated, he filed a complaint for illegal dismissal with money claims against Fabulous Jeans, and its owner, Alexander G.
Arqueza et al. before the NLRC. In their defense, petitioner, et al. contended that after they paid for Dorataryo's hospitalization and
medical expenses, respondent went on absence without leave, presumably to evade liability for his recklessness. Since respondent
was the one who refused to report for work, he should be considered as having voluntarily severed his own employment. Thus, his
money claims cannot prosper as he was not terminated.
LA, NLRC and CA Ruling: dismissed the charge of illegal dismissal, but found petitioner to be respondents employer;
directed petitioner to pay separation pay and the equivalent of the service incentive leave pay
ISSUES:
1. WON employer-employee relationship exists between the parties

2. WON respondent has been illegally dismissed
3. WON respondent is entitled to separation pay and service incentive leave pay
RULING:
1. YES. Respondent was shown to have been hired by petitioner and required to report for work at its store. The Court had
already exposed the practice of setting up "distributors" or "dealers" which are, in reality, dummy companies that allow the
mother company to avoid employer-employee relations and, consequently, shield the latter from liability from employee
claims in case of illegal dismissal, closure, unfair labor practices, and the like. In this case it was shown in respondents
unrebutted Affidavit that HSY Marketing was the mother-company.
2. NO. The Court upholds the unanimous conclusion that respondent had not been dismissed at all nor is he considered to
have voluntarily resigned from work. No substantial evidence was presented to show that he was indeed dismissed or was
prevented from returning to his work or that there was a deliberate refusal of respondent to resume his employment
without any intention of returning. The appropriate course of action is to reinstate employee without payment of
backwages. If respondent voluntarily chooses not to return to work, then he must be considered to have resigned.
3. NO (to separation pay) YES (to service incentive leave pay). The liability for the payment of separation pay is but a legal
consequence of illegal dismissal where reinstatement is no longer feasible. This is because an employee who had not been
dismissed, much less illegally dismissed, cannot be reinstated. Moreover, as there is no reinstatement to speak of,
respondent cannot invoke the doctrine of strained relations to support his prayer for the award of separation pay.
However, respondent is entitled to service incentive leave pay as the respondent was a regular employee of the petitioner.
Company drivers who are under the control and supervision of management officers are regular employees entitled to such
benefits.
8. A. Nate Casket Maker et al., vs. Arango, et al., GR No. 192282, October 5, 2016
DOCTRINE:
As regular employees, respondents were entitled to security of tenure and could be dismissed only for just or authorized
causes and after the observance of due process. Under Article 279 of the Labor Code as aforestated, an employee unjustly dismissed
from work is entitled to reinstatement and backwages, among others.
FACTS:
Petitioners Armando and Anely Nate are the owners of A. Nate Casket Maker. They employed respondents in their casket-
making business from 1998 until their alleged termination in March 2007. In 2007, they met with respondents in order to present a
proposed employment agreement which would change the existing pakyaw system to "contractual basis" and would provide for
vacation leave and sick leave pay and other benefits given to regular employees. However, respondents allege that they were made to
sign a Contract of Employment dated February 3, 2007, which stated that during the period of employment, respondents would not
be eligible to earn or receive any sick leave pay, vacation leave pay, or any other benefits given to refular employees such as 13th
month pay and bonuses. When they refused to sign, petitioners told them to go home because their employment had been
terminated. Respondents then filed a Complaint for illegal dismissal, non-payment of separation pay, claims of underpayment, and
non-payment of overtime pay, holiday pay, service incentive leave and 13th month pay against petitioners.
LA and NLRC Ruling: dismissed complaint

CA Ruling: reversed LA and NLRC; declared respondents illegal dismissal and entitlement to monetary benefits required
by law
ISSUES:
1. WON respondents were illegally dismissed

2. WON respondents who are pakyaw workers are entitled to overtime pay, holiday pay, service incentive leave pay and 13 th
month pay
RULING:
1. YES. Petitioners agreed that respondents are regular employees. Pakyaw workers are considered regular employees for as
long as their employers exercise control over them. Thus, while respondents mode of compensation was on a per-piece
basis, the status and nature of their employment was that of regular employees. As regular employees, respondents were
entitled to security of tenure and could be dismissed only for just or authorized causes and after the observance of due
process. Petitioners are found to have violated the respondents rights to security of tenure and constitutional right to due
process in not even serving them with a written notice of termination which would recite any valid or just cause for their
dismissal, as required in Sec. 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code. Under Article 279
of the Labor Code as aforestated, an employee unjustly dismissed from work is entitled to reinstatement and backwages,
among others. Reinstatement restores the employee who was unjustly dismissed to the position from which he was
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removed, while the grant of backwages allows the same employee to recover from the employer that which he had lost by
way of wages as a result of his dismissal. Respondents are entitled to reinstatement, but they could receive instead
separation pay in lieu of reinstatement if such is no longer practicable.
2. YES (except to 13th month pay). Since respondents cannot be considered as "field personnel," then they are not exempted
from the grant of holiday and SIL pay even as they were engaged on pakyaw or task basis. However, they are not entitled to
13th month pay. PD 851, the governing law on 13th month pay provides in Sec 3(e) that employees paid on a task basis and
those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance
thereof, are exempted.
9.MINIMUM LABOR STANDARD BENEFITS
CASES:
1. San Miguel Corp., vs. CA, G.R. No. 146775, Jan. 30, 2002
Facts:
On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine inspection in the
premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. It was discovered that there was underpayment by SMC of
regular Muslim holiday pay to its employees. DOLE sent a copy of the inspection result to SMC and it was received by and explained
to its personnel officer Elena dela Puerta. SMC contested the findings and DOLE conducted summary hearings on 19 November 1992,
28 May 1993 and 4 and 5 October 1993. Still, SMC failed to submit proof that it was paying regular Muslim holiday pay to its
employees. Hence, Alan M. Macaraya, Director IV of DOLE Iligan District Office issued a compliance order, dated 17 December 1993,
directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay
within thirty (30) days from the receipt of the order.
SMC appealed to the DOLE main office in Manila. However, the appeal was dismissed for lack of merit and the order of Director
Macaraya was affirmed. SMC went to SC for relief via a petition for certiorari, which the Court referred to the Court of Appeals. The
appellate court modified the order with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic
salary. Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before the SC.
Issues:
1. Whether or not public respondents seriously erred and committed grave abuse of discretion when they granted Muslim Holiday
Pay to non-Muslim employees of SMC.
2. Whether or not SMC was not accorded with due process of law in the issuance of the compliance order.
3. Whether or not regional director Macaraya, undersecretary Trajano and undersecretary Espanol have jurisdiction in issuing the
assailed compliance orders.
Ruling:
The court ruled the issues in negative. Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential
Decree No. 1083, otherwise known as the Code of Muslim Personal Laws, which states:
Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:
a) Amun Jadd (New Year), which falls on the first day of the first lunar month of Muharram;
b) Maulid-un-Nab (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal;
c) Lailatul Isr Wal Mirj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh day of
the seventh lunar month of Rajab;
d) d-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the
fasting season; and
e) d-l-Adh (Hari Raya Haji), which falls on the tenth day of the twelfth lunar month of Dhl-Hijja.
Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in the Provinces of Basilan,
Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such other Muslim
provinces and cities as may hereafter be created; (2) Upon proclamation by the President of the Philippines, Muslim holidays may
also be officially observed in other provinces and cities.
The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:
Art. 94. Right to holiday pay.
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.
Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that "the provisions of this Code shall be applicable only
to Muslims." However, there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim
holidays. Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by
laws and certainly not on the basis of the workers faith or religion. In addition, the 1999 Handbook on Workers Statutory Benefits,
categorically stated: Considering that all private corporations, offices, agencies, and entities or establishments operating within the
designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the
Muslim areas may not report for work on the days designated by law as Muslim holidays.
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On the question regarding the jurisdiction of the Regional Director Allan M. Macaraya, Article 128, Section B of the Labor Code, as
amended by Republic Act No. 7730, provides: Article 128. Visitorial and enforcement power.
(b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power
to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the
findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. The
Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of inspection.
In the case before us, Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and
Employment and it was within his power to issue the compliance order to SMC. In addition, the Court agrees with the Solicitor
General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. Indeed, petitioner
merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. Hence, the issue could be resolved even
without documentary proofs. In any case, there was no indication that Regional Director Macaraya failed to consider any
documentary proof presented by SMC in the course of the inspection.
Anent the allegation that petitioner was not accorded due process, the court finds that SMC was furnished a copy of the inspection
order and it was received by and explained to its Personnel Officer. Further, a series of summary hearings were conducted by DOLE
on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Thus, SMC could not claim that it was not given an opportunity to
defend itself.
2. Tan vs. Lagrama, G.R. No. 151228, August 15, 2002
Facts:
Petitioner Rolando Tan is the president of Supreme Theater Corporation and the general manager of Crown and Empire Theaters in
Butuan City. Private respondent Leovigildo Lagrama is a painter, making ad billboards and murals for the motion pictures shown at
the Empress, Supreme, and Crown Theaters for more than 10 years, from September 1, 1988 to October 17, 1998.
On October 17, 1998, private respondent Lagrama was summoned by Tan and upbraided: "Nangihi na naman ka sulod sa imong
drawinganan." ("You again urinated inside your work area.") When Lagrama asked what Tan was saying, Tan told him, "Ayaw
daghang estorya. Dili ko gusto nga mo-drawing ka pa. Guikan karon, wala nay drawing. Gawas." ("Don't say anything further. I don't
want you to draw anymore. From now on, no more drawing. Get out.")
Lagrama denied the charge against him. He claimed that he was not the only one who entered the drawing area and that, even if the
charge was true, it was a minor infraction to warrant his dismissal. However, everytime he spoke, Tan shouted "Gawas" ("Get out"),
leaving him with no other choice but to leave the premises. Lagrama filed a complaint with the National Labor Relations Commission
(NLRC) in Butuan City. He alleged that he had been illegally dismissed and sought reinvestigation and payment of 13th month pay,
service incentive leave pay, salary differential, and damages.
As no amicable settlement had been reached, Labor Arbiter Rogelio P. Legaspi directed the parties to file their position papers. It
declared that the dismissal illegal and order the payment of monetary benefits. Tan appealed to the NLRC and reversing the decision
of the Labor Arbiter.
Issue:
Whether or not the respondent was illegally dismissed and thus entitled to payment of benefits provided by law.
Ruling:
The respondent was illegally dismissed and entitled to benefits. The Implementing Rules of the Labor Code provide that no worker
shall be dismissed except for a just or authorized cause provided by law and after due process. This provision has two aspects: (1) the
legality of the act of dismissal, that is, dismissal under the grounds provided for under Article 282 of the Labor Code and (2) the
legality in the manner of dismissal. The illegality of the act of dismissal constitutes discharge without just cause, while illegality in
the manner of dismissal is dismissal without due process.
In this case, by his refusal to give Lagrama work to do and ordering Lagrama to get out of his sight as the latter tried to explain his
side, petitioner made it plain that Lagrama was dismissed. Urinating in a work place other than the one designated for the purpose
by the employer constitutes violation of reasonable regulations intended to promote a healthy environment under Art. 282(1) of the
Labor Code for purposes of terminating employment, but the same must be shown by evidence. Here there is no evidence that
Lagrama did urinate in a place other than a rest room in the premises of his work.
Instead of ordering his reinstatement as provided in Art. 279 of the Labor Code, the Labor Arbiter found that the relationship
between the employer and employee has been so strained that the latter's reinstatement would no longer serve any purpose. The
parties do not dispute this finding. Hence, the grant of separation pay in lieu of reinstatement is appropriate.
This is of course in addition to the payment of back wages which, in accordance with the ruling in Bustamante v. NLRC should be
computed from the time of Lagrama's dismissal up to the time of the finality of this decision, without any deduction or qualification.
The Bureau of Working Conditions 32 classifies workers paid by results into two groups, namely; (1) those whose time and
performance is supervised by the employer, and (2) those whose time and performance is unsupervised by the employer. The first
involves an element of control and supervision over the manner the work is to be performed, while the second does not. If a piece
worker is supervised, there is an employer-employee relationship, as in this case. However, such an employee is not entitled to
service incentive leave pay since, as pointed out in Makati Haberdashery v. NLRC 33 and Mark Roche International v. NLRC, 34 he is
paid a fixed amount for work done, and regardless of the time he spent in accomplishing such work.
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3. Lambo vs. NLRC, 317 SCRA 420
CONCEPT:
FACT:
Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents J.C. Tailor Shop and/or
Johnny Co on September 10, 1985 and March 3, 1985, respectively. As in the case of the other 100 employees of private respondents,
petitioners were paid on a piece-work basis, according to the style of suits they made. Regardless of the number of pieces they
finished in a day, they were each given a daily pay of at least P64.00.
On January 17, 1989, petitioners filed a complaint against private respondents for illegal
dismissal and sought recovery of overtime pay, holiday pay, premium pay on holiday and rest day, service incentive leave pay,
separation pay, 13th month pay, and attorney's fees.
After hearing, Labor Arbiter Jose G. Gutierrez found private respondents guilty of illegal dismissal and accordingly ordered
them to pay petitioners' claims of Backwages, Overtime pay, Holiday pay, 13th month pay, and separation pay amounting P94,719.20
for Lambo, P96,383.20 for Belocura, and additional 10% Attorneys Fees 19,110.24 or a total aggregate amount of Two Hundred Ten
Thousand Two Hundred Twelve And 64/100 (P210,212.64).
NLRC revised the decision of the Labor Arbiter. It found that petitioner had not been dismissed from employment but
merely threatened with a closure of the business if they insisted on their demand for a "straight payment of their minimum wage,"
after petitioners, on January 17, 1989, walked out of a meeting with private respondents and other employees. According to the NLRC,
during that meeting, the employees voted to maintain the company policy of paying them according to the volume of work finished
at the rate of P18.00 per dozen of tailored clothing materials. Only petitioners allegedly insisted that they be paid the minimum wage
and other benefits. The NLRC held petitioners guilty of abandonment of work and accordingly dismissed their claims except that for
13th month pay.
ISSUE:
Whether or not Avelino and Belocura are entitled to receive benefits such as Backwages, Overtime pay, Holiday
pay, 13th month pay, and separation pay.
HELD:
Yes. Since the petitioners were illegally dismissed, they are entitled to reinstatement with backwages. Backwages should be
limited to three years without qualifications and deductions. Considering that reinstatement would be impractical and hardly in the
best interest of the parties. It is correct to order to give separation pay 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.
The awards for overtime pay, holiday pay and 13th month pay are in accordance with the finding that petitioners are
regular employees, although paid on a piece-rate basis. With regard to petitioner Avelino Lambo, the amount of P10,000.00 paid to
him under the compromise agreement should be deducted from the total award of P94,719.20. Except for the award of attorney's fees
in the amount of P19,110.24, the above computation is affirmed.
AVELINO LAMBO VICENTE BELOCURA
I. BACKWAGES P64,896.00 P64,896.00
II. OVERTIME PAY 13,447.90 13,447.90
III. HOLIDAY PAY 1,399.30 1,399.30
IV. 13TH MO. PAY 4,992.00 4,992.00
V. SEPARATION PAY 9,984.00 11,648.00
P 94,719.20
Less 10,000.00
TOTAL P 84,719.20 P 96,383.20
GRAND TOTAL P 181,102.40
5. Asian Transmission vs. CA, 425 SCRA 478 [2004]

Concept: Holiday pay is a statutory benefit demandable under the law. The fact that two holidays fall on the same date should not
operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.
Facts:
DOLE issued an Explanatory Bulletin clarifying that employees are entitled to 200% of their basic wage on April 9, 1993, whether
unworked, which apart from being Good Friday, is also Araw ng Kagitingan. In 1998, the bulletin was reproduced, this time April 9,
1998 was both Maundy Thursday and Araw ng Kagitingan. Despite the explanatory bulletin, Petitioner ASIAN TRANSMISSION
CORPORATION opted to pay only 100% of the basic pay. Respondent Bisig ng Asian Transmission Labor Union protested. In
accordance with the grievance procedure in their CBA, the controversy was submitted for voluntary arbitration. The Voluntary
Arbiter decided in favor of the Labor Union directing the employer to pay 200%.
Issue:
Whether or not two holidays falling in the same date would reduce to nine the ten holiday pay benefits a worker is entitled to receive
Ruling: NO
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.| Its
purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. Although the
worker is forced to take a rest, he earns what he should earn, that is, his holiday pay.
Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, and
not under management prerogative, regardless of whether an employee is paid on a monthly or daily basis. Holiday pay is a statutory
benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays
fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. There is
nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two
holidays fall on the same day. Under the rules of statutory construction, that when the language of the law is clear and unequivocal,
the law must be taken to mean exactly what it says.
Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its
55 | P a g e
implementing rules and regulations, shall be resolved in favor oflabor. For the working man's welfare should be the primordial and
paramount consideration.
Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the rules shall
justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays as provided in
existing individual or collective agreement or employer practice or policy.
Lastly, provisions in their CBA showed that the petitioner had obligated itself to pay for the legal holidays as required by law.
6. Autobus Transport System vs. Bautista, G.R. No. 156364, May 16, 2005
Concept: Definition of field personnel in Book III, Rule V: SERVICE INCENTIVE LEAVE, should be interpreted with the definition of
field personnel in Art. 82 of the Labor Code.
Facts:
Since 24 May 1995, respondent Bautista has been employed by Auto Bus Transport Systems. Inc as driver-conductor paid by
commission basis, 7% of the total gross income per travel. On January 3, 2000, he accidentally bumped the rear portion of another
bus owned by petitioner Autobus. Bautista further alleged that he was not allowed to work until he fully paid the amount of
P75,551.50, representing thirty percent (30%) of the cost of repair of the damaged buses and that despite respondent's pleas for
reconsideration, the same was ignored by management. After a month, management sent him a letter of termination.
On, February 2, 2000, Bautista instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay
and service incentive leave pay against Autobus. Autobus allege that Bautista's employment was replete with offenses involving
reckless imprudence, gross negligence, and dishonesty. Autobus presented copies of letters, memos, irregularity reports, and
warrants of arrest pertaining to several incidents wherein Bautista was involved. Furthermore, Autobus avers that in the exercise of
its management prerogative, Bautista's employment was terminated only after the latter was provided with an opportunity to explain
his side regarding the accident on January 3, 2000. The Labor Arbiter found that the complaint for illegal dismissal has no leg to
stand on but ordered Autobus to pay 13th month pay worth P78,1187 and service incentive leave computed at P13,788. NLRC upon
appeal, modified the decision of the Labor Arbiter by deleting the award of 13th month pay by virtue of The Rules and Regulations
Implementing PD 851 stating that employees who are paid on purely commission are one of the exceptions of employees to be paid a
13th month pay. Autobus not satisfied with the partial grant brought a petition with the CA, which was dismissed.
Issues:
1. Whether or not Bautista's employment as driver-conductor of Autobus can be classified as field personnel (one of the exceptions to
the employees entitled to service incentive leave)
Ruling: NO
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. This rule shall apply to all employees except:
(d) Field personnel and other employees whose performance is unsupervised by the employer
including those who are engaged on task or contract basis, purely commission basis, or
those who are paid in a fixed amount for performing work irrespective of the time
consumed in the performance thereof
The phrase "other employees whose performance is unsupervised by the employer" and "those who are engaged on task or
contract basis, purely commission basis" must not be understood as a separate classification of employees to which service
incentive leave shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of field personnel
under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable certainty".
The rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow
should be applied. Hence, employees engaged on task or contract basis or paid on purely commission basis are not automatically
exempted from the grant of service incentive leave, unless, they fall under the classification of field personnel.
Art. 82 of the Labor Code:
"field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of work in the field cannot be determined with
reasonable certainty.
It is necessary to stress that the definition of a "field personnel" is not merely concerned with the location where the employee
regularly performs his duties but also with the fact that the employee's performance is unsupervised by the employer. In order to
conclude whether an employee is a field employee, it is necessary to ascertain if actual hours of work in the field can be
determined with reasonable certainty by the employer.
According to the observations by the Labor Arbiter,
Along the routes that are plied by these bus companies, there are its inspectors assigned at strategic places who board the bus and
inspect the passengers, the punched tickets, and the conductor's reports. There is also the mandatory once-a-week car barn or shop day,
where the bus is regularly checked as to its mechanical, electrical, and hydraulic aspects, whether or not there are problems thereon as
reported by the driver and/or conductor. They too, must be at a specific place at a specified time, as they generally observe prompt
departure and arrival from their point of origin to their point of destination. In each and every depot, there is always the Dispatcher
whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper
time. These, are present in the case at bar. The driver, was therefore under constant supervision while in the performance of this work.
Therefore, respondent is not a field personnel but a regular employee who performs tasks usually necessary and desirable
to the usual trade of petitioner's business. Bautista is entitled to the grant of service incentive leave
2. Whether or not the money claim is now barred by prescription
56 | P a g e
Ruling: NO
Article 291 of the Labor Code states that all money claims arising from employer-employee relationship shall be filed within three (3)
years from the time the cause of action accrued; otherwise, they shall be forever barred.
It is settled jurisprudence that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff by whatever means and
under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right;
and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of
the obligation of the defendant to the plaintiff.
In the case of service incentive leave, the employee may choose to either use his leave credits or commute it to its monetary
equivalent if not exhausted at the end of the year. Furthermore, if the employee entitled to service incentive leave does not use or
commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive
leave. The cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer
refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its
commutation. Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation
or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive leave
shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment.
The three (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the
commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after
demand of commutation or upon termination of the employee's services. This construal, is in keeping with the rudimentary principle
that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the
workingman's welfare should be the primordial and paramount consideration.
Bautista had filed his money claim after only one month from the time of his dismissal. Therefore, his money claim was
filed within the prescriptive period provided for by Article 291 of the Labor Code.
7. San Miguel Corp., vs. Del Rosario, G.R. No. 168194, Dec. 13, 2005
Facts: Respondent was employed by petitioners as key account specialist. Petitioner informed respondent that her probationary
employment will be severed at the close of the business hours of March 12, 2001. On March 13,2001, respondent was refused entry to
petitioners premises.
Respondent: Filed a complaint against petitioner for illegal dismissal and underpayment/non-payment of monetary benefits.
Respondent alleged that petitioner feigned an excess in manpower because after her dismissal, it hired new recruits, namely, Jerome
Sanchez and Marilou Marfil and re-employed two of her batch mates, Rosendo To and Ruel Rocha.
Petitioner: Claimed that respondent was a probationary employee whose services were terminated as a result of the excess
manpower that could no longer be accommodated by the company.
Labor Arbiter: Declared respondent a regular employee because her employer exceeded 6 months and holding that she was illegally
dismissed as there was no authorize cause to terminate her employment.
NLRC: Modified the decision of LA, holding that respondent is a regular employee whose termination from employment was valid
but ineffectual for petitioners failure to comply with the 30-day notice to the employee and DOLE.
CA: Reinstated the decision of LA, finding her to be an illegally dismissed regular employee, but deleted the award for holiday pay for
lack of basis.
Issues: 1) WON respondent is a regular employee of petitioner; 2) WON respondent was illegally dismissed; 3) If so, WON is entitled
to any monetary benefit
Ruling:
1. Respondent is a regular employee.
The burden of proving the circumstances that would justify the employees dismissal rests with the employer. The best proof that
petitioner should have presented to prove the probationary status of respondent is her employment contract. Having none, the
continuous employment of respondent as an account specialist for almost 11 months means that she was a regular employee and not
a temporary reliever or a probationary employee.
2. Respondent was illegally dismissed.
Having ruled that respondent is a regular employee, her termination from employment must be for a just or authorized cause,
otherwise, her dismissal would be illegal. Redundancy, for purposes of the Labor Code, exists where the services of an employee are
in excess of what is reasonably demanded by the actual requirements of the enterprise. In the case at bar, petitioner presented an
affidavit of its Sales Manager and a memorandum of the company both to the effect that there is a need to redeploy its regular
employees and terminate the employment of temporary employees, in view of an excess in manpower. These documents, however,
do not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion.
3. Respondent entitled not only to reinstatement but also to backwages.
Considering that respondent was illegally dismissed, she is entitled not only to reinstatement but also to payment of full backwages,
computed from the time her compensation was actually withheld up to her actual reinstatement. As a regular employee, she is
likewise entitled to other benefits, such as service incentive leave pay and 13th month pay computed from such date up to her actual
reinstatement. She is however not entitled to holiday pay because records reveal that she is a monthly paid regular employee. Under
Section 2, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code, employees who are uniformly paid by the month,
irrespective of the number of working days therein, shall be presumed to be paid for all the days in the month whether worked or
not.
57 | P a g e
8. Penaranda vs. Baganga Plywood Corp., G.R. No. 159577, May 3, 2006
Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards.
Since petitioner belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.
Facts: Sometime in June 1999, petitioner Charlito Pearanda (Foreman/Bouler Head/Shift Engineer) was hired as an employee of
BPC to take charge of the operations and maintenance of its steam plant boiler. In May 2001, Pearanda filed a Complaint for illegal
dismissal with money claims against BPC and its general manager, Hudson Chua, before NLRC. After the parties failed to settle
amicably, the labor arbiter directed the parties to file their opposition papers and submit supporting documents.
Contention of Pearanda: Alleged that his services were terminated without the benefit of due process and valid grounds in
accordance with law. Furthermore, he was not paid his overtime pay, premium pay for working during holidays/rest days, night shift
differentials and finally claimed for payment of damages and attorneys fees having been forced to litigate the present complaint.
Contention of BPC: Complainants separation from service was done pursuant to Art. 283 of the Labor Code. BPC was on temporary
closure due to repair and general maintenance and it applied for clearend with DOLE-RO XI to shut down and to dismiss employees.
Due to the insistence of complainant, he was paid his separation benefits. However, when BPC partially reopened, complainant failed
to reapply. Hence, he was, not terminated from employment much less illegally. He opted to sever employment when he insisted
payment of his separation benefits. Furthermore, being a managerial employee he is not entitled to overtime pay and if ever he
rendered services beyond the normal hours of work, there was no office order/or authorization for him to do so.
Labor Arbiter: There was no illegal dismissal and that complaint was premature because he was still employed by BPC. Temporary
closure of BPC did not terminate his employment, hence he need not reapply when BPC reopened.
NLRC: Deleted the award of overtime pay and premium pay for working on rest days, saying that petitioner was not entitled to these
awards because he was a managerial employee
CA: Denied reconsideration on the ground that petitioner still failed to submit the pleadings filed before the NLRC
Issue: 1) WON Penaranda is a regular, common, employee entitled to monetary benefits under Art. 82; 2) WON Penaranda is
entitled to the payment of Overtime Pay and Other Monetary Benefits
Ruling: Petition is not meritorious.
1. Managerial employees are those whose primary duty consists of the management of the establishment in which they are employed
or of a department or subdivision (Art. 82).
The IRR of the Labor Code states that managerial employees are those who meet the following conditions:
a. their primary duty consists of the management of the establishment in which they are employed or of a department or
subdivision thereof;
b. they customarily and regularly direct the work of two or more employees therein;
c. they have the authority to hire or Dre other employees of lower rank; or their suggestions and recommendations as to the
hiring and firing and as to the promotion or any other change of status of other employees are given particular weight
In line with this, petitioner was a managerial employee. However, he was a member of the managerial staff, which also takes him out
of the coverage of labor standards. Managerial staff members are not entitled to the provisions in on the law on labor standards. A
managerial staff has the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies of the employer;
(2) Customarily and regularly exercise discretion and independent judgment;
(3) (a) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or (b) execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge; or (c) execute under general supervision special assignments and
tasks; and
(4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely
related to the performance of the work described in paragraphs (1), (2), and (3) above."
1. To supply the required and continuous steam to all consuming units at minimum cost.
2. To supervise, check and monitor manpower workmanship as well as operation of boiler and accessories.
3. To evaluate performance of machinery and manpower.
4. To follow-up supply of waste and other materials for fuel.
5. To train new employees for effective and safety white working.
6. Recommend parts and suppliers purchases.
7. To recommend personnel actions such as: promotion, or disciplinary action.
8. To check water from the boiler, feedwater and softener, regenerate softener if beyond hardness limit.
9. Implement Chemical Dosing.
10. Perform other task as required by the superior from time to time.
2. On the basis of the foregoing, the Court finds no justification to award overtime pay and premium pay for rest days to petitioner.
9. Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No. 1577745, October 19, 2007, citing
Wellington Investment vs. Trajano, 245 SCRA 561 [1995], and Odango vs. NLRC, G.R. No. 147420, June 10, 2004
58 | P a g e
The proper remedy from decisions of voluntary arbitrators is a petition for review under Rule 43 of the Rules of Court.
Facts: On April 6, 1998, petitioner and respondent entered into a CBA, covering petitioner rank-and-file employees, for a period of 5
years effective Jan. 1, 1998. Respondent, through Regional VP Vicente Casilan, sent a letter to petitioner demanding holiday pay for all
employees, as provided for in the CBA. Petitioner, through its legal counsel, sent a reply to Casilan, explaining that after pursuing all
available pay slips, it found that it had paid all employees all the holiday pays enumerated in the CBA.
After exhausting the procedures of the grievance machinery, the parties agreed to submit the issue of the interpretation and
implementation of the CBA on the payment of holiday pay, for arbitration of the NCMB RO-VIII.
Contention of Respondent: Alleged that it is not prevented from making separate demands for the payment of regular holidays
concomitant with the provisions of the CBA, with its supporting documents consisting of a letter demanding payment of holiday pay,
petitioners reply thereto and respondents rejoinder, a computation in the amount of 1,054,393, for the unpaid legal holidays, and
several pay slips.
Contention of Petitioner: Insisted payment of the holiday pay in compliance with the CBA provisions, stating that payment was
presumed since the formula used in determining the daily rate of pay of the covered employees is Basic Monthly Salary divided by 30
days or Basic Monthly Salary multiplied by 12 divided by 360 days, thus with said formula, the employees are already paid their
regular and special days, the days when no work is done, the 51 unworked Sundays and the 51 unworked Saturdays.
Voluntary Arbitrator: Decided in favor of respondent, reasoning that petitioner failed to show that it complied with the CBA
mandate that holiday pay be reflected during any payroll period of occurrence since the payroll slips did not reflect any payment of
the paid holidays.
CA: Dismissed petitioners petition, reasoning that the recourse from a Voluntary Arbitrator is a petition for review under Rule 43 of
the 1997 Rules of Procedure, hence, the present petition for certiorari under Rule 65 should be rejected, as such a petition cannot be a
substitute for a lost appeal.
Issues: WON the CA erred in rejecting the petition for certiorari under Rule 65 of the Rules of Court filed by petitioner to assail the
Decision of the Voluntary Arbitrator.
Ruling: The general rule is that the proper remedy from decisions of voluntary arbitrators is a petition for review under Rule 43 of
the Rules of Court. This ruling has been repeatedly reiterated in subsequent cases and continues to be the controlling doctrine.
In the case of Luzon Development Bank, a voluntary arbitrator enjoys a status of a quasi-judicial agency. Hence, his decisions and
awards are appealable to the CA. Therefore, the proper remedy from an award of a voluntary arbitrator is a petition for review to the
CA, which provided for a uniform procedure for appellate review of all adjudications of quasi-judicial entities, which is embedded in
Section 1, or Rule 43 of the Rules of Civil Procedure.
Nonetheless, a special civil action for certiorari under Rule 65 of the Rules of Court is the proper remedy for one who complains that
the tribunal, board or officer exercising judicial or quasi-judicial functions acted in total disregard of evidence material to or decisive
of the controversy.
The Voluntary Arbitrator gravely abused its discretion in giving a strict or literal interpretation of the CBA provisions that the holiday
pay be reflected in the payroll slips. Such literal interpretation ignores the admission of respondent in its Position Paper that the
employees were paid all the days of the month even if not worked.
Thus, the Voluntary Arbitrator should not have simply brushed aside petitioner's divisor formula. In granting respondent's claim of
non-payment of holiday pay, a "double burden" was imposed upon petitioner because it was being made to pay twice for its
employees' holiday pay when payment thereof had already been included in the computation of their monthly salaries. Moreover, it
is absurd to grant respondent's claim of non-payment when they in fact admitted that they were being paid all of the days of the
month even if not worked. By granting respondent's claim, the Voluntary Arbitrator sanctioned unjust enrichment in favor of the
respondent and caused unjust financial burden to the petitioner. Obviously, the Court cannot allow this.
10.Bahia Shipping Services vs. Chua, G.R. No. 162195, April 8, 2008, citing Cagampan vs. NLRC, 195 SCRA 533 [1998]
Doctrine: Although an employment contract may guarantee the right to overtime pay, entitlement to such benefit must first be
established, otherwise the same cannot be allowed.
Facts: Respondent Reynaldo Chua was hired by the petitioner shipping company, Bahia Shipping Services, Inc., as a restaurant
waiter on board a luxury cruise ship liner for a period of nine (9) months from October 18, 1996 to July 17, 1997.
On February 15, 1997, the respondent reported for his working station one and one-half hours late. 2 days thereafter, the
master of the vessel served to the respondent an official warning-termination form pertaining to the said incident. On March 8, 1997,
the vessel's master conducted an inquisitorial hearing to investigate the said incident. The next day, respondent was dismissed from
the service on the strength of an unsigned and undated notice of dismissal.
On March 24, 1997, the respondent filed a complaint for illegal dismissal and other monetary claims, which case was
assigned to a Labor Arbiter (LA). The LA rendered a decision holding petitioner liable to respondent for illegal dismissal and
unauthorized deductions. Petitioner and its foreign principal were directed to pay jointly and severally, respondent Reynaldo Chua
the sum of US$1,230 representing his salary for the unexpired portion of the contract of employment limited to 3 months under RA
8042.
Petitioner appealed to the NLRC but it affirmed the decision of the LA with modifications. Petitioner then went to the CA
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which rendered a decision affirming the NRLCs decision hence the current petition.
Issue: Whether respondent is entitled to overtime pay which was incorporated in his award for the unexpired portion of the contract
despite the fact that he did not render overtime work.
Argument of Petitioner: Petitioner contends that there is no factual or legal basis for the inclusion of said amount because, after
respondent's repatriation, he could not have rendered any overtime work.
Ruling: NO. Respondent is not entitled to overtime pay which was incorporated in his award for the unexpired portion of the
contract.
Although an overseas employment contract may guarantee the right to overtime pay, entitlement to such benefit must
first be established, otherwise the same cannot be allowed.
Hence, it being improbable that respondent rendered overtime work during the unexpired term of his contract, the
inclusion of his "guaranteed overtime" pay into his monthly salary as basis in the computation of his salaries for the entire unexpired
period of his contract has no factual or legal basis and the same should have been disallowed.
11. PNCC Skyway Traffic Management and Security Division Workers Organization, GR No. 171231, Feb. 17, 2010
Doctrine: Where the language of a CBA is plain and unambiguous, its meaning should be determined without reference to extrinsic
facts or aids; in the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the
entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of
management.
Facts: Petitioner PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO) is a
labor union duly registered with the DOLE. Respondent PNCC Skyway Corporation is a corporation duly organized and operating
under and by virtue of the laws of the Philippines.
On November 15, 2002, petitioner and respondent entered into a CBA incorporating the terms and conditions of their
agreement which included vacation leave and expenses for security license provisions. One of the provisions contained therein
provides that: The Company shall schedule the vacation leave of employees during the year taking into consideration the
request of preference of the employees.
In a Memorandum dated December 29, 2003, respondent's Head of the Traffic Management and Security Department
(TMSD) published the scheduled vacation leave of its personnel for the year 2004. Petitioner objected to the implementation of the
said memorandum. It insisted that the individual members of the union have the right to schedule their vacation leave. However, the
respondent did not accede to petitioner's demands and stood firm on its decision to schedule all the vacation leave of petitioner's
members. Due to the disagreement between the parties, petitioner elevated the matter to the DOLE-NCMB for preventive mediation.
For failure to settle the issue amicably, the parties agreed to submit the issue before the voluntary arbitrator.
Voluntary Arbitrator (VA) rendered a decision, thus: The scheduling of all vacation leaves shall be under the discretion of
the union members entitled thereto. Aggrieved, respondent appealed to the CA which annulled the decision of the VA hence the
current petition.
Issue: Whether it is the prerogative of respondent PNCC to schedule the vacation leave of its employees
Ruling: YES. It is the prerogative of PNCC to schedule the vacation leave of its employees. The rule is that where the language of a
contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or aids.
In the case at bar, the contested provision of the CBA is clear and unequivocal. The CBA categorically provides that the
scheduling of vacation leave shall be under the option of the employer. The preference requested by the employees is not controlling
because respondent retains its power and prerogative to consider or to ignore said request.
Thus, if the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties, the literal meaning
of its stipulation shall prevail. In fine, the CBA must be strictly adhered to and respected if its ends have to be achieved, being the law
between the parties.
In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the
entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of
management. It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee. Thus, it is
well within the power and authority of an employer to impose certain conditions, as it deems fit, on the grant of vacation leaves, s
12. Radio Mindanao Network Inc. et al., vs. Ybarola, Jr. G.R. No. 198662, Sept. 12, 2012
CONCEPT: Commissions based on actual market transactions attributable to an employees actions forms part of that employees
separation pay.
FACTS: RMN hired Ybarola and Rivera on June 15, 1977 and June 1, 1983, respectively. On September 15, 2002, their employment was
terminated due to the reorganization of the company. At the time, their average salary rates as account managers were P60,000 and
P40,000 respectively. They were given separation pay of only P631,250 and P481,250. Ybarola and Rivera executed release/quitclaim
affidavits a few months after. They later filed cases for illegal dismissal with money claims. RMN alleged that Ybarola and Rivera each
received a monthly salary of P9,177 as shown by the payrolls. Their commissions were merely profit-sharing bonuses. Furthermore,
RMN argued that Ybarola and Rivera signed the release/quitclaim affidavits voluntarily.
NLRC: The Labor Arbiter ordered the payment of additional separation pay. However, the National Labor Relations Commission
(NLRC) dismissed the complaint for lack of merit. It ruled that bonuses are not included in the computation of separation pay.
CA: The CA set aside the assailed NLRC disposition. It pointed out that, in the instant case, the commissions were earned by actual
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market transactions attributable to the Ybarola and Rivera. Thus, they form a part of their salaries and separation pay.
ISSUE:
1. W/N employees' commissions were profit-sharing bonuses
2. W/N employees who signed release/quitclaim affidavits may still recover
RULING:
1. NO. Profit-sharing bonuses are usually distributed equally. Yet, Ybarola and Rivera received different amounts depending on the
number of transactions they were able to accomplish. This variance supports the finding that, though they received a guaranteed
P9,177, most of their pay comes from commissions. These commissions form part of their wages and should be included in the
computation of separation pay.
2. YES. A release/quitclaim affidavit is only valid when the employee is not shortchanged and no essential unfairness took place.
Ybarola and Rivera were given only half of the amount they were legally entitled to. Considering their lengths of service 25 years
and 19 years, respectivelythis is unconscionable.
13. Robina Farms Cebu vs. Villa, GR No. 175869, April 18, 2016
CONCEPT: For early retirement to be valid, the offer of increased benefits must be certain while the acceptance to be retired should
be absolute.
FACTS: Villa worked for Robina Farms since August 1981. In 2001, the company enticed her to avail of a special retirement program
with higher benefits. After she applied for the program, Villa received a memo inquiring on her failure to issue invoices for
unhatched eggs in January to February 2002. She explained that the delivery receipts were not given to her on time and were
overlooked. Yet, she was suspended from March 8 to March 19, 2002. Upon returning, she was informed that her application had
been denied and was advised to tender a resignation with a request for financial assistance. Despite her intention to continue work,
Robina Farms prevented her from doing so, prompting this case for illegal dismissal. Robina Farms argued that Villa was merely
angry because her application for the special retirement program was denied.
NLRC: The Labor Arbiter ordered Villas reinstatement, but denied her monetary claims. This was modified by the NLRC, which
ordered the payment of backwages, service incentive leave pay (SILP) and overtime pay. The latter was computed based on daily time
records (DTRs).
CA: The CA dismissed Robina Farmss appeal. It deemed the advice given to Villathat is, to tender a resignation letteras
constructive dismissal.
ISSUES:
1. W/N Villa had been illegally dismissed.
2. W/N Villas application for the special program shows her intention to retire early.
3. W/N Villa is entitled to her overtime pay.
4. W/N Villa is entitled to SILP.
RULING:
1. YES. Robina Farms did not admit Villa back to work after her suspension. In fact, several company officers advised her to tender a
resignation letter with request for financial assistance. These acts are strong indication that petitioners wanted to sever the
employer-employee relationship.
2. NO. Although Villa applied for early retirement, she did so upon the belief that she would receive a higher benefit based on Robina
Farmss offer. Retirement is the result of a bilateral act of both the employer and the employee based on their voluntary agreement.
The offer of benefits must be certain while the acceptance to be retired should be absolute. Otherwise, the retirement is involuntary
and renders the employer liable for termination without cause.
3. NO. The burden of proving entitlement to overtime pay rests on the employee. Reliance on daily time records is misplaced, since
as employee can render overtime work only when there was a prior authorization therefor by the management.
4. YES. The employer is still obliged to prove that it fully paid the accrued service incentive leave pay to the employee. This evidence
should be presented in the proceedings before the Labor Arbiter, not during appeal.
14. Dela Salle Araneta University vs. Bernardo, GR No. 190809, February 13, 2017
CONCEPT: Part-time employees receive retirement benefits.
FACTS: Bernardo taught as a part-time professional lecturer at DLS-AU since 1974. On November 8, 2003, DLS-AU informed him
that he could not teach anymore due to the retirement age limit. Bernardo was 75 years old at the time and was being paid P246.50
per hour. DOLE informed him that he was entitled to receive benefits under RA 7641, also known as the "New Retirement Law.
When the school refused to pay, Bernardo filed a complaint for non-payment of retirement benefits and damages. DLS-AU argued
that Bernardo was not covered by the law since he was a part-time employee. The school further averred that Bernardos employment
bond was severed when he reached the mandatory retirement age of 65. 10 years have passed since then. His claim for retirement
benefits should have prescribed, because under Article 291 of the Labor Code, all money claims shall be filed within three years from
the time the cause of action accrues.
NLRC: The Labor Arbiter dismissed Bernardos complaint on the ground of prescription. This was reversed by the NLRC. It held that
the school is estopped from claiming prescription because it permitted Bernardo to work beyond the mandatory retirement age.
Furthermore, part-time employees are covered under RA 7641.
CA: The CA affirmed in toto the NLRC judgment.
ISSUE:
1. W/N part-time employees receive retirement benefits despite a lack of CBA
2. W/N Bernardos claim has prescribed
3. W/N the doctrine of equitable estoppel applies
RULING:
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1. YES. Based on RA 7641, its Implementing Rules, and the October 24, 1996 Labor Advisory, the only employees exempted from
retirement pay are: (1) those of the National Government and its political subdivisions, including government-owned and/or
controlled corporations, if they are covered by the Civil Service Law and its regulations; and (2) those of retail, service and
agricultural establishments or operations regularly employing not more than 10 employees. Under expressio unius est exclusio
alterius, Since part-time employees are not among those specifically exempted, Bernardos claim stands.
2. NO. A cause of action has three elements: (a) a right in favor of the plaintiff; (b) an obligation on the part of the defendant to
respect or not to violate such right; and (c) an act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff. The third element occurred when DLS-AU refused to pay
Bernardo's retirement benefits. Only then did the period of prescription begin to run.
3. YES. For the principle of equitable estoppel to apply, there must be (a) conduct amounting to false representation or concealment
of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which
the party subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least
influenced by the other party; and (c) knowledge, actual or constructive, of the actual facts. In this case, DLS-AU, kept its silence that
Bernardo had already reached the compulsory retirement age of 65 years old. It even continuously offered him contracts of
employment for the next 10 years. It should not be allowed to escape its obligation to pay Bernardo's retirement benefits.
10.OTHER SPECIAL BENEFITS
CASES:
1. Reyes vs. NLRC et al., G.R. No. 160233, August 8, 2007, citing Boie Takeda Chemicals vs. Dela Serna, 228 SCRA 329 [1993] &
Phil. Duplicators vs. NLRC, 241 SCRA 380 [1995]
CONCEPT: Computation of Retirement Pay
FACTS:
Reyes was a salesman at Universal Robinas Grocery Division in Davao City. He became unit manager of Sales
Department-South Mindanao and remained such until his retirement.
Reyes disagreed with the manner the company computed his separation pay. Insisting that his retirement
benefits and 13thmonth pay must be based on the average monthly salary which consists of basic salary and average
monthly commission, he refused to accept payment. Instead he filed a case for recovery of these monetary claims.
Labor Arbiter: Sales commission is part of the basic salary of a unit manager
NLRC: Modified the decision of the Labor Arbiter by excluding the overriding commission in the computation of the
retirement benefits and 13th month pay
ISSUE: Should the overriding commission be included in the computation of the retirement benefits and 13th month pay?
RULING:
NO. The court distinguished its conflicting decisions between Philippine Duplicators Case and Boie-Takeda Case.
In Philippine Duplicators Case, the salesmens commissions, comprising a predetermined percentage of the
selling price of the goods sold by each salesman, were properly included in the term basic salary for purposes of computing
the 13th month pay. The salesmens commission are not overtime payments, nor profit-sharing payments nor any other
fringe benefit, but a portion of the salary structure which represents an automatic increment to the monetary value
initially assigned to each unit of work rendered by a salesman.
In Boie-Takeda Case, the so-called commissions paid to or received by medical representatives of Boie-Takeda
Chemicals or by the rank and file employees of Philippine Fuji Xerox Co., were excluded from the term basic salary
because these were paid to the medical representatives and rank-and-file employees as productivity bonuses, which are
generally tied to the productivity, or capacity for revenue production, of a corporation and such bonuses closely resemble
profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done by each
individual employee. Further, commissions paid by the Boie-Takeda Company to its medical representatives could not
have been sales commissionsin the same sense that Philippine Duplicators paid the salesmen their sales commissions.
Medical representatives are not salesmen; they do not effect any sale of any article at all.
In this case, SC ruled that commissions should be excluded.
Petitioner filed for optional retirement upon reaching the age of 60. However, the basis in computing his
retirement benefits is his latest salary rate as the commissions he received are in the form of profit-sharing payments
specifically excluded by Section 5 of Rule II of the Rules Implementing the New Retirement Law.
Aside from the fact that as unit manager petitioner did not enter into actual sale transactions, but merely
supervised the salesmen under his control, the disputed commissions were not regularly received by him. Only when the
salesmen were able to collect from the sale transactions can petitioner receive the commissions. Conversely, if no
collections were made by the salesmen, then petitioner would receive no commissions at all. In fine, the commissions
which petitioner received were not part of his salary structure but were profit-sharing payments and had no clear, direct or
necessary relation to the amount of work he actually performed. The collection made by the salesmen from the sale
transactions was the profit of private respondent from which petitioner had a share in the form of a commission.
2. Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU, G.R. No. 170734, May 14,
2008
CONCEPT: Company practice of giving full benefits (13th month pay, Vacation Leave, and sick leave) regardless of actual service they
rendered within a year; Nondiminution of Benefits
FACTS:
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Petitioner is a company engaged in the manufacture of metal products, whereas respondent is the labor union of
petitioners rank and file employees. Sometime in December 2003, petitioner paid the 13th month pay, bonus, and leave
encashment of three union members in amounts proportional to the service they actually rendered in a year, which is less
than a full twelve (12) months. Respondent protested the prorated scheme, claiming that on several occasions petitioner
did not prorate the payment of the same benefits to seven (7) employees who had not served for the full 12 months.
According to respondent, the prorated payment violates the rule against diminution of benefits under Article 100 of the
Labor Code. Thus, they filed a complaint before the National Conciliation and Mediation Board (NCMB). The parties
submitted the case for voluntary arbitration.
VOLUNTARY ARBITRATOR: Ruled in favor of petitioner. The giving of benefits irrespective of the actual service has not
ripened into a practice.
CA: Petitioner had an existing voluntary practice of paying such benefits in full to its employees. Ordered petitioner to pay
benefits in full irrespective of actual services rendered within a year.
ISSUE: Whether or not the prorated payment of the benefits constitute a violation under Art. 100 of the Labor Code.
RULING:
YES. SC ruled in favor of the respondents. The voluntary grant of the benefits has been an established company
practice. It has been a company practice which grants full benefits to its employees regardless of the length of service
rendered.
From a reading of the Collective Bargaining Agreement (CBA), there is no doubt that in order to be entitled to
the full monetization of sixteen (16) days of vacation and sick leave, one must have rendered at least one year of service.
The other benefits were also to be computed in proportion to the length of service of the employee.
However Arco, in the past years, had made payments to some employees who did not render one year service
without pro-rating. In those years, it had adopted a policy of freely, voluntarily and consistently granting full benefits to its
employees regardless of the length of service rendered. True, there were only a total of seven employees who benefited
from such a practice, but it was an established practice nonetheless. Jurisprudence has not laid down any rule specifying a
minimum number of years within which a company practice must be exercised in order to constitute voluntary company
practice.
Indeed, if it wants to prove that it merely erred in giving full benefits, it could have easily presented other
proofs, such as the names of other employees who did not fully serve for one year and thus were given prorated benefits.
The principle of non-diminution of benefits is founded on the Constitutional mandate to "protect the rights of
workers and promote their welfare, and to afford labor full protection. Said mandate in turn is the basis of Article 4 of
the Labor Code which states that all doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations shall be rendered in favor of labor.
3. Universal Robina Sugar Milling Corp. vs. Caballeda, G.R. No. 156644, July 28, 2008
CONCEPT: Compulsory and voluntary retirement

FACTS:
Respondent Agripino Caballeda worked as welder for Universal Robina Sugar Milling Corporation (URSUMCO)
from March 1989 until June 23, 1997 while respondent Alejandro Cadalin worked for URSUMCO as crane operation from
1976 up to June 15, 1997.
John Gokongwei, Jr. President of URSUMCO issued a memorandum establishing the company policy on
Compulsory Retirement. All employees corporate-wide who attain 60 years of age on or before April 30, 1991 shall be
considered retired on May 31, 1991. Subsequently, on December 9, 1992, Republic Act No. 7641 was enacted into law and it
took effect on January 7, 1993, amending Article 287 of the Labor Code.
In 1993, the company and NFL (bargaining agent) entered into a CBA, under which the retirement benefits of
the members of the collective bargaining unit shall be in accordance with law.
Meanwhile, Caballeda and Cadalin, having reached the age of 60, were allegedly forced to retire pursuant to the
company Memorandum earlier issued. They both accepted their retirement benefits. Later on, Agripino filed a complaint
for illegal dismissal because his compulsory retirement was in violation of the provisions of RA 7641 and, was in effect, a
form of illegal dismissal.
LABOR ARBITER: Declared URSUMCO guilty of illegal dismissal.
NLRC: Reversed and held that Alejandro voluntarily retired because he submitted his application. Dismissed the
complaint for illegal dismissal.
CA: Declared that URSUMCO illegally dismissed the respondents since the Memorandum unilaterally imposed upon the
respondents compulsory retirement at the age of 60. Found that there is no existing CBA or employment contract between
the parties that provides for early compulsory retirement.
ISSUES:
1. Whether RA 7641 can be given retroactive effect? YES
2. Whether or not Agripino Caballeda and Alejandro Cadalin voluntarily retired from the service? NO
RULING:
First issue: RA 7641, as a social legislation, has retroactive effect.
RA 7641 is undoubtedly a social legislation. The law has been enacted as a labor protection measure and as a
curative statute that absent a retirement plan devised by, an agreement with, or a voluntary grant from, an employer can
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respond, in part at least, to the financial wellbeing of workers during their twilight years soon following their life of labor.
There should be little doubt about the fact that the law can apply to labor contracts still existing at the time the
statute has taken effect, and that its benefits can be reckoned not only from the date of the law's enactment but
retroactively to the time said employment contracts have started.
The Court imposed two (2) essential requisites in order that R.A. 7641 may be given retroactive effect: (1) the
claimant for retirement benefits was still in the employ of the employer at the time the statute took effect; and (2) the
claimant had complied with the requirements for eligibility for such retirement benefits under the statute.
It is evident from the records that when respondents were compulsorily retired from the service, R.A. 7641 was
already in full force and effect. The petitioners failed to prove that the respondents did not comply with the requirements
for eligibility under the law for such retirement benefits. In sum, the aforementioned requisites were adequately satisfied,
thus, warranting the retroactive application of R.A. 7641 in this case.
Second Issue: Respondents were compulsorily retired.
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former. The age
of retirement is primarily determined by the existing agreement between the employer and the employees. However, in
the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287 of the Labor Code as amended, the
legally mandated age for compulsory retirement is 65 years, while the set minimum age for optional retirement is 60 years.
The age of retirement is primarily determined by the existing agreement between the employer and the
employees. However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287 of the
Labor Code as amended, the legally mandated age for compulsory retirement is 65 years, while the set minimum age for
optional retirement is 60 years. That prerogative is exclusively lodged in the employee.
In this case, it may be stressed that the CBA does not per se specifically provide for the compulsory retirement
age nor does it provide for an optional retirement plan. It merely provides that the retirement benefits accorded to an
employee shall be in accordance with law. Thus, we must apply Art. 287 of the Labor Code which provides for two types of
retirement:
(a) compulsory (65); and
(b) optional (CBA, employment contract, retirement plan; 60 years or more, but not beyond 65
years, provided he has served at least five years in the establishment concerned. NB: That
prerogative is exclusively lodged in the employee)
Generally, the law looks with disfavor on quitclaims and releases by employees who have been inveigled or
pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just
claims of employees. In this case, petitioners failed to establish all the requisites that would render a quitclaim valid.
Furthermore, petitioners have the burden of proof that the quitclaim was voluntarily entered to.
Absent any convincing proof of voluntariness in the submission of the documentary requirements and the
execution of the quitclaim, we cannot simply assume that respondents were not subjected to the very same pressure.
Respondents vigorously pursued this case all the way up to the Supreme Court. Without doubt, this is a manifestation that
respondents had no intention of relinquishing their employment, wholly incompatible to petitioners' assertion that
respondents voluntarily retired. Respondents did not voluntarily retire but were forced to retire, tantamount to illegal
dismissal.
To be precise, only Alejandro was able to claim a partial amount of his retirement benefit. Thus, it is clear from
the decisions of the LA, NLRC and CA that petitioners are still liable to pay Alejandro the differential on his retirement
benefits. On the other hand, Agripino was actually and totally deprived of his retirement benefit.
The court finds no reversible error and, thus, sustain the ruling of the CA that respondents did not voluntarily
retire but were rather forced to retire, tantamount to illegal dismissal.
4. Cercado vs. Uniprom, Inc. G.R. No. 188154, October 13, 2010
Facts:
Petitioner Lourdes A. Cercado (Cercado) started working for respondent UNIPROM, Inc. (UNIPROM) on December 15, 1978 as a
ticket seller assigned at Fiesta Carnival, Araneta Center, Quezon City. Later on, she was promoted as cashier and then as clerk typist.
On April 1, 1980, UNIPROM instituted an Employees Non-Contributory Retirement Plan4 which provides that any participant with
twenty (20) years of service, regardless of age, may be retired at his option or at the option of the company.
On January 1, 2001, UNIPROM amended the retirement plan in compliance with Republic Act (R.A.) No. 7641.5 Under the revised
retirement plan,6 UNIPROM reserved the option to retire employees who were qualified to retire under the program.
Sometime in December 2000, UNIPROM implemented a company-wide early retirement program for its 41 employees, including
herein petitioner, who, at that time, was 47 years old, with 22 years of continuous service to the company. She was offered an early
retirement package amounting to 171,982.90, but she rejected the same.
Labor Arbiters decision:

The petitioner was illegally dismissed. Respondent company was ordered to reinstate her with payment of full backwages.
NLRC Decision:
The National Labor Relations commission affiremd the LA decision.
Court of Appeal:
CA set aside the decision of the LA and NLRC.
Issues:
1) WON UNIPROM has a bona fide retirement plan; and WON petitioner was validly retired pursuant thereto.
Ruling:
No, petitioner was not yet retired because she did not consented to the said agreement.
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the
latter, after reaching a certain age, agrees to sever his or her employment with the former.12
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Article 287 of the Labor Code, as amended by R.A. No. 7641,13 pegs the age for compulsory retirement at 65 years, while the
minimum age for optional retirement is set at 60 years. An employer is, however, free to impose a retirement age earlier than the
foregoing mandates. This has been upheld in numerous cases14 as a valid exercise of management prerogative.
We reiterate the well-established meaning of retirement in this jurisdiction: Retirement is the result of a bilateral act of the parties, a
voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or
her employment with the former.20
Acceptance by the employees of an early retirement age option must be explicit, voluntary, free, and uncompelled. While an
employer may unilaterally retire an employee earlier than the legally permissible ages under the Labor Code, this prerogative must be
exercised pursuant to a mutually instituted early
retirement plan. In other words, only the implementation and execution of the option may be unilateral, but not the adoption and
institution of the retirement plan containing such option. For the option to be valid, the retirement plan containing it must be
voluntarily assented to by the employees or at least by a majority of them through a bargaining representative.
UNIPROM is guilty of illegal dismissal. Petitioner is thus entitled to reinstatement without loss of seniority rights and to full
backwages computed from the time of her illegal dismissal in February 16, 2001 until the actual date of her reinstatement. If
reinstatement is no longer possible because the position that petitioner held no longer exists, UNIPROM shall pay backwages as
computed above, plus, in lieu of reinstatement, separation pay equivalent to one-month pay for every year of service. This is
consistent with the preponderance of jurisprudence24 relative to the award of separation pay in case reinstatement is no longer
feasible.
5. Radio Mindanao Network Inc, et al., vs. Ybarola, Jr. et al., G.R. No. 198662, September 12, 2012
Facts:
Respondents Domingo Z. Ybarola, Jr. and Alfonso E. Rivera, Jr. were hired on June 15, 1977 and June 1, 1983, respectively, by RMN.
They eventually became account managers, soliciting advertisements and servicing various clients of RMN.
On September 15, 2002, the respondents services were terminated as a result of RMNs reorganization/restructuring; they were given
their separation pay
631,250.00 for Ybarola, and 481,250.00 for Rivera. Sometime in December 2002, they executed release/quitclaim affidavits.
Dissatisfied with their separation pay, the respondents filed separate complaints (which were later consolidated) against RMN and its
President, Eric S. Canoy, for illegal dismissal with several money claims, including attorneys fees. They indicated that their monthly
salary rates were 60,000.00 for Ybarola and 40,000.00 for Rivera.
On July 18, 2007, Labor Arbiter Patricio Libo-on dismissed the illegal dismissal complaint, but ordered the payment of additional
separation pay to the respondents
490,066.00 for Ybarola and 429,517.55 for Rivera. The labor arbiter adjusted the separation pay award based on the respondents
Certificates of Compensation Payment/Tax Withheld showing that Ybarola and Rivera were receiving an annual salary of 482,477.61
and 697,303.00, respectively.
NLRC ruling:
The NLRC set aside the labor arbiters decision and dismissed the complaint for lack of merit.
CA Ruling:
The CA set aside the NLRC disposition. It reinstated the Labor Arbiters decision.
Issue:
WON Domingo Ybarola and Alfonzo Rivera are entitled for additional separation pay.
Ruling:
Yes, they are entitled for the additional separation pay.
We find the motion for reconsideration unmeritorious. The motion raises substantially the same arguments presented in the petition
and we find no compelling justification to grant the reconsideration prayed for.
The petitioners insist that the respondents commissions were not part of their salaries, because they failed to present proof that
they earned the commission due to actual market transactions attributable to them. They submit that the commissions are profit-
sharing payments which do not form part of their salaries. We are not convinced. If these commissions had been really profit-
sharing bonuses to the respondents, they should have received the same amounts, yet, as the NLRC itself noted, Ybarola
and Rivera received 372,173.11 and 586,998.50 commissions, respectively, in 2002. The variance in amounts the respondents
received as commissions supports the CAs finding that the salary structure of the respondents was such that they only received a
minimal amount as guaranteed wage; a greater part of their income was derived from the commissions they get from soliciting
advertisements; these advertisements are the "products" they sell. As the CA aptly noted, this kind of salary structure does not
detract from the character of the commissions being part of the salary or wage paid to the employees for services rendered to the
company.
In this case, as the CA noted, the separation pay the respondents each received was deficient by at least 400,000.00; thus, they were
given only half of the amount they were legally entitled to. To be sure, a settlement under these terms is not and cannot be a
reasonable one, given especially the respondents length of service 25 years for Ybarola and 19 years for Rivera.
6. Padillo vs. Rural bank of Nabunturan Inc. G.r. No. 199338, Jan. 21, 2013
Concepts:
1. Article 297 of the Labor Code clearly presupposes that it is the employer who terminates the services of the employee found to be
suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the
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health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties.
2.The age and tenure requirements under Article 300 of the Labor Code are cumulative and non-compliance with one negates the
employee's entitlement to the retirement benefits under Article 300 of the Labor Code altogether.
Facts
The late Padillo, was employed by respondent Rural Bank of Nabunturan, Inc. as its SA Bookkeeper. Due to liquidity problems which
arose sometime in 2003, the Bank took out retirement/insurance plans with Philippine American Life and General Insurance
Company (Philam Life) for all its employees in anticipation of its possible closure and the concomitant severance of its personnel. In
this regard, the Bank procured Philam Plan Certificate of Full Payment No. 88204, Plan Type 02FP10SC, Agreement No. PP98013771
(Philam Life Plan) in favor of Padillo for a benefit amount of P100,000.00 and which was set to mature on July 11, 2009.
During the latter part of 2007, Padillo suffered a mild stroke due to hypertension which consequently impaired his ability to
effectively pursue his work. In particular, he was diagnosed with Hypertension S/P CVA (Cerebrovascular Accident) with short term
memory loss, the nature of which had been classified as a total disability. He wrote a letter addressed to respondent Oropeza
expressing his intention to avail of an early retirement package. Despite several follow-ups, his request remained unheeded.
On October 3, 2007, Padillo was separated from employment due to his poor and failing health as reflected in a Certification dated
December 4, 2007 issued by the Bank. Not having received his claimed retirement benefits, Padillo a complaint for the recovery of
unpaid retirement benefits.
LA dismissed Padillo's complaint but directed the Bank to pay him the amount of P100,000.00 as financial assistance, treated as an
advance from the amounts receivable under the Philam Life Plan. LA found Padillo disqualified to receive any benefits under Article
300 . Dissatisfied with the LA's ruling, Padillo elevated the matter to the NLRC.
NLRC's Fifth Division reversed and set aside the LA's ruling and ordered respondents to pay Padillo the amount of P164,903.70 as
separation pay, on top of the P100,000.00 Philam Life Plan benefit. Relying on the case of Abaquin Security and Detective Agency, it
applied the Labor Code provision on termination on the ground of disease particularly, Article 297 holding that while Padillo
did resign, he did so only because of his poor health condition. Respondents moved for reconsideration but the same was denied by
the NLRC in its Resolution dated March 31, 2010. Aggrieved, respondents filed a petition for certiorari with the CA.
CA rendered a decision setting aside the Resolutions, thereby reinstating the Decision but with modification. It directed the
respondents to pay Padillo the amount of P50,000.00 as financial assistance exclusive of the P100,000.00 Philam Life Plan benefit
which already matured on July 11, 2009.
The CA held that Padillo could not, absent any agreement with the Bank, receive any retirement benefits pursuant to Article 300
of the Labor Code considering that he was only fifty-five (55) years old when he retired. It likewise found the evidence insufficient to
prove that the Bank has an existing company policy of granting retirement benefits to its aging employees. It pronounced that
separation pay on the ground of disease under Article 297 of the Labor Code should not be given to Padillo because he was the one
who initiated the severance of his employment and that even before September 10, 2007, he already stopped working due to his poor
and failing health
Issues
1.Whether or not The Labor Code provision on termination on the ground of disease under Article 297 apply in this case.
2.Whether or not PADILLO is qualified to receive any retirement benefits under Article 300
Ruling
1.No. Article 297 does not apply in this case, considering that it was the petitioner and not the Bank who severed the employment
relations. As borne from the records, the clear import of Padillo's September 10, 2007 letter and the fact that he stopped working
before the foregoing date and never reported for work even thereafter show that it was Padillo who voluntarily retired and that he
was not terminated by the Bank.
A plain reading of the [Article 297 of the Labor Code] clearly presupposes that it is the employer who terminates the services
of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is
prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the
employee who severs his or her employment ties. Thus, given the inapplicability of Article 297 of the Labor Code to the case at
bar, it necessarily follows that petitioners' claim for separation pay anchored on such provision must be denied.
NLRC's application of Abaquin was gravely misplaced considering its dissimilar factual milieu with the present case. In Abaquin, that
the Court merely awarded termination pay on the ground of disease in favor of security guard Antonio Jose because he belonged to a
"special class of employees . . . deprived of the right to ventilate demands collectively. In this case, it cannot be said that Padillo
belonged to the same class of employees prohibited to self-organize. Therefore, absent this equitable peculiarity, termination pay on
the ground of disease under Article 297 of the Labor Code and the Court's ruling in Abaquin should not be applied.
2. No. Art 300 of LC provides that in the absence of any applicable agreement, an employee must (1) retire when he is at least sixty
(60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half (1/2)
month salary for every year of service, with a fraction of at least six (6) months being considered as one whole year. Notably, these
age and tenure requirements are cumulative and non-compliance with one negates the employee's entitlement to the
retirement benefits under Article 300 of the Labor Code altogether.
All told, in the absence of any applicable contract or any evolved company policy, Padillo should have met the age and tenure
requirements set forth under Article 300 of LC to be entitled to the retirement benefits provided therein. Unfortunately, while Padillo
was able to comply with the five (5) year tenure requirement as he served for twenty-nine (29) years he, however, fell short with
respect to the sixty (60) year age requirement given that he was only fifty-five (55) years old when he retired.
Nevertheless, the Court concurs with the CA that financial assistance should be awarded but at an increased amount. With a
veritable understanding that the award of financial assistance is usually the final refuge of the laborer, considering as well the
supervening length of time which had sadly overtaken the point of Padillo's death an employee who had devoted twenty-nine (29)
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years of dedicated service to the Bank the Court, in light of the dictates of social justice, holds that the CA's financial assistance
award should be increased from P50,000.00 to P75,000.00, still exclusive of the P100,000.00 benefit receivable by the petitioners
under the Philam Life Plan which remains undisputed.
7. Grace Christian High School vs. Lavandera, GR No. 177845, August 20, 2014
Concept: ONE-HALF (1/2) MONTH SALARY means 22.5 days: 15 days plus 2.5 days representing one-twelfth (1/12) of the 13th
month pay and the remaining 5 days for [SIL].
Facts
Filipinas was employed by (GCHS) as high school teacher since June 1977, with a monthly salary of P18,662.00 as of May 31, 2001.
On August 30, 2001, Filipinas filed a complaint for illegal (constructive) dismissal, non-payment of service incentive leave (SIL) pay,
separation pay, service allowance, damages, and attorney's fees against GCHS and/or its principal, Dr. James Tan. She alleged that
on May 11, 2001, she was informed that her services were to be terminated effective May 31, 2001, pursuant to GCHS' retirement plan
which gives the school the option to retire a teacher who has rendered at least 20 years of service, regardless of age, with a retirement
pay of one-half (1/2) month for every year of service. At that time, Filipinas was only 58 years old and still physically fit to work. She
pleaded with GCHS to allow her to continue teaching but her services were terminated, contrary to the provisions of Republic Act
No. (RA) 7641, otherwise known as the "Retirement Pay Law."
GCHS denied that they illegally dismissed Filipinas. They asserted that the latter was considered retired on May 31, 1997 after having
rendered 20 years of service pursuant to GCHS' retirement plan and that she was duly advised that her retirement benefits in the
amount of P136,210.00 based on her salary at the time of retirement, i.e., P13,621.00, had been deposited to the trustee-bank in her
name. Nonetheless, her services were retained on a yearly basis until May 11, 2001 when she was informed that her year-to-year
contract would no longer be renewed.
Labor Arbiter (LA) dismissed the illegal dismissal complaint for lack of merit. The LA found that GCHS has a retirement plan.
Nonetheless, the LA found the retirement benefits payable under GCHS retirement plan to be deficient vis--vis those provided
under RA 7641, and, accordingly, awarded Filipinas retirement pay differentials based on her latest salary as follows: P18,662.00/30 =
P622.06/day
P622.06 x 22.5 = P13,996.35 x 20 = P279,927.00 - Amount deposited in trust P136,210.00 = Retirement benefits
differential P143,717.00
The LA, however, denied Filipinas' claims for service allowance, salary increase, and damages for lack of sufficient bases, but awarded
her attorney's fees equivalent to five percent (5%) of the total award, or the amount of P7,185.85.
NLRC set aside the LA's award, and ruled that Filipinas' retirement pay should be computed based on her monthly salary at the time
of her retirement on May 31, 1997, i.e., P13,621.00. Moreover, it held that under Article 287 of the Labor Code,as amended by RA 7641,
the retirement package consists of 15 days salary, plus 13th month pay and SIL pay pro-rated to their one-twelfth (1/12)
equivalent. NLRC awarded Filipinas retirement pay differentials in the amount of P27,057.20.
CA affirmed with modification the NLRC's Decision. It held that "one-half month salary" equates it to "22.5 days" which is "arrived
at after adding 15 days plus 2.5 days representing one-twelfth of the 13th month pay, plus 5 days of [SIL]. Accordingly, it computed
Filipinas' retirement benefits differential as follows: Monthly salary P13,624.00 30 days = 454.13 x 22.5 days = P10,218.00 x 20 years =
P204,360.00 - Amount deposited in trust 136,210.00 = Retirement benefits differential P68,150.00
Issue
Whether or not the CA committed reversible error in using the multiplier "22.5. days" in computing the retirement pay differentials
of Filipinas.
Ruling
NO. RA 7641, which was enacted on December 9, 1992, amended Article 287 of the Labor Code, states that "an employee's retirement
benefits under any collective bargaining [agreement (CBA)] and other agreements shall not be less than those provided" under the
same that is, at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as
one whole year and that "[u]nless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean
fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service
incentive leaves."
GCHS computed Filipinas' retirement pay without including one-twelfth (1/12) of her 13th month pay and the cash equivalent of her
five (5) days SIL, both the NLRC and the CA correctly ruled that Filipinas' retirement benefits should be computed in accordance
with Article 287 of the Labor Code,as amended by RA 7641, being the more beneficent retirement scheme. They differ, however, in
the resulting benefit differentials due to divergent interpretations of the term "one-half (1/2) month salary" as used under the law.
The Court, in the case of Elegir v. Philippine Airlines, Inc has recently affirmed that "one-half (1/2) month salary means 22.5 days: 15
days plus 2.5 days representing one-twelfth (1/12) of the 13th month pay and the remaining 5 days for [SIL]." The Court sees
no reason to depart from this interpretation.
Section 5.2, Rule II of the Implementing Rules of Book VI of the Labor Code,as amended, promulgated to implement RA 7641,
further clarifies what comprises the "1/2 month salary" due a retiring employee.
5.2 Components of One-half (1/2) Month Salary. For the purpose of determining the minimum retirement pay due an
employee under this Rule, the term "one-half month salary" shall include all the following:
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(b) The cash equivalent of not more than five (5) days of service incentive leave
The rules are, thus, clear that the whole 5 days of SIL are included in the computation of a retiring employees' pay.
8. Goodyear Philippines Inc. vs. Angus, GR No. 185449, November 12, 2015
DOCTRINE: Retirement Pay and Separation Pay are not mutually exclusive in the absence of a specific prohibition in the Retirement
Plan or the Collecting Bargaining Agreement.
FACTS:
Angus was employed by Goodyear as Secretary to the Manager of Quality and Technology from 1966-2001. Goodyear
implemented cost-saving measures which included the streamlining of its workforce. On September 9, 2001, Angus received a letter
from Goodyear through Ramos, the Human Resource Director, stating that the position he is holding is already redundant and is no
longer necessary. The letter also provides that as company practice, termination due to redundancy or retrenchment is paid at 45
days pay per year of service. Moreover, considering that Angus has rendered 34.92 years of service to the company and have reached
the minimum age of 55 to qualify early retirement, the management has decided to grant Angus early retirement benefit at 47 days
per year of service. Goodyear, in summarizing the benefits of Angus, stated that he will receive 47 days pay per year of service (which
will come form the Pension Fund), fractions of 13th and 14th months pay, longevity pay, emergency leave and any earned and unused
vacation or sick leave.
Angus responded to their letter, requesting that although he agrees with Managements decision for Angus to avail the
early retirement benefit, he asks for an additional 3 days for every year of service which will total to 50 days. An Establishment
Termination Report was filed by Goodyear with the Department of Labor and Employment. Angus accepted the checks which
covered only 47 days pay per year of service and other company benefits. However, he annotated on the acknowledgement receipt
that he received the same under protest and acceptance will be on the condition that she will be given an additional 3 days pay per
year of service. Since Angus refused to sign the Release and Quitclaim, Goodyear took back the checks.
Ramos wrote a letter to Angus, stating among others that the company has already offered her the most favorable
separation benefits due to redundancy. On January 17, 2002, Angus finally accepted the check amounting to P1,958,927.89 and
likewise executed a Release and Quitclaim. Angus filed before the Labor Arbiter a complaint for illegal dismissal with claims of
separation pay, damages, and attorneys fees. The Labor Arbiter upheld the validity of Angus termination and declared that it was
already a payment of separation due to redundancy. The National Labor Relations Commission affirmed the decision of the Labor
Arbiter.
The Court of Appeals partially granted Angus petition, saying that she is entitled to separation pay in addition to the
retirement pay.
ISSUE: Whether Angus is entitled both separation pay and early retirement benefit
RULING:
Yes. Retirement pay and separation pay are not mutually exclusive. Retirement benefits are a form of reward to the
employees loyalty and service to the employer and are earned under existing laws, CBA, or company policies. Separation pay is the
amount given to the employee to provide during the period that he is looking for another employment and is recoverable only in
instances enumerated in Article 298 and 299 of the Labor Code or in illegal dismissal when reinstatement is not feasible. One of the
grounds in Article 298 is when the employee is terminated due to redundancy, therefore she is entitled to separation pay.
The Court held in several cases that an employee is entitled to recover both separation pay and retirement benefits in the
absence of a specific prohibition in the Retirement Plan of CBA. An employees right to receive separation pay in addition to
reitrement benefits depends upon the provisions of the companys Retirement Plan and/or CBA.
The provision in Goodyears CBA, The parties finally agree that an employee shall be entitled to only one (1) benefit,
whichever is higher is not substantial evidence of the prohibition because it does not appear to be a substantial part of the CBA.
Assuming that it is, there was no proof that the CBA Goodyear presented as evidence is the same CBA material to the case. Upon
examination of the 2001-2004 CBA, there was no prohibition of restriction on the availment of benefits under the companys
Retirement Plan and separation pay.
Lastly, a quitclaim cannot bar an employee from demanding benefits he is legally entitled.
9. Banco De Oro Unibank vs.Sagaysay,GR No. 214961, Sept 16, 2015
DOCTRINE: A retirement plan based on a company policy implemented prior to the hiring of an employee is deemed to have been
accepted upon employment
FACTS:
On May 16, 2006, Guillermo Sagasyay was hired by Banco De Oro (BDO) as Senior Accounting Assistant as a result of a
merger with united Overseas Bank with BDO as the surviving bank. Guillermo was employed in UOB for two years and in Metrobank
for twenty-eight (28) years.
On January 8, 2010, BDO informed Sagaysay that he will be formally retired on September 1, 2010 pursuant to the
companys retirement plan which mandates its retirement age at sixty (60) years old. Since he had an outstanding loan and his
children were still in college, Sagaysay requested that his services be extended up to May 16, 2011 so that he could render at least five
(5) years of employment which would consequently entitle him to 50% of his basic pay for every year of service upon his retirement.
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BDO did not grant his wishes. As of his last day of work, he was earning a monthly salary of P28,048.00. Sagaysay signed a
Release, Waiver and Quitclaim for an in consideration of P98,376.14. The quitclaim stated that in consideration of the amount given
to him, he released and discharged the bank, its affiliates and subsidiaries from any action, suit, claim, or demand in connection with
his employment.
Sagaysay filed a complaint for illegal dismissal with reinstatement and payment of backwages, moral damages, exemplary
damages, and attorneys fee against BDO before the Labor Arbiter. He claimed that his family suffered damages amounting to
P2,225,403.00, the amount which he would have received if he was made to retire at the age of sixty-five (65). BDO on its part said
that he was already paid the amount of P98,376.14 and stressed that Sagaysay was not dismissed but retired from service.
The Labor Arbiter (LA) stressed that Sagaysay was illegally dismissed and that he was forced to avail of an optional
retirement age of sixty (60) which was contrary to the provisions of Article 287 of the Labor Code. In addition, the LA said that he did
not freely assent to the retirement plan and he was only made to sign a quitclaim in exchange for a small consideration.
BDO appealed to the NLRC arguing that Sagaysay freely assented to its retirement plan. The NLRC reversed the ruing of
the LA and explained that BDOs retirement plan was effecting as early as June 1, 1994. When Sagaysay was employed on May 16,
2006, the retirement plan was already in full force and effect. NLRC concluded that when Sagaysay accepted his employment with
BDO, he assented to the provisions of the retirement plan. NLRC found it difficult to believe that Sagaysay did not famliarize the
retirement policy of the bank, considering that he has previously worked for two other banks.
The Court of Appeals reversed the ruling of NLRC, saying that there was no negotiation between BDO and Sagaysay and
therefore there was no mutual agreement. It stated that Sagaysay was forced to participate in the retirement plan.
ISSUE: Whether the June 1, 1994 retirement plan is valid and effective against Sagaysay.
RULING:
Yes. According to Article 287 of the Labor Code, The provisions will only be applied in absence of a retirement plan or
agreement providing for retirement benefits of employees in the establishment. The Labor Code permits the employers and
employees to fix applicable retirement age, provided that the benefits under the Collective Bargaining Agreement or any other
agreements shall not be less than those provided by the Code.
In the previous Cases decided by the Court, the retirement plans were adopted after the employees were hired by their
employer. Therefore they may contest to the validity of the same unless they consented to its implementation. However, in the
present case, the retirement plan came before the hiring of Sagaysay.
Sagaysay was sufficiently informed of the retirement plan. It has been twelve (12) years from the inception of the
retirement plan, which was prior to the hiring of Sagaysay, up to the present, no employee questioned the retirement plan. Further,
by accepting the employment offer of BDO, Sagaysay was deemed to have assented to all existing rules, regulations and policy of the
bank, including the retirement plan. BDO also issued a memorandum on June 1, 2009 regarding the implementation of its retirement
program, reiterating that the normal retirement date was the first day of the month following the employees sixtieth (60th) birthday,
this memorandum was addressed to all employees and officers. Having knowledge of the retirement plant, he had every opportunity
to question the same, but he did not. Lastly, the most convincing detail that Sagaysay assented to the retirement plan was his e-
mails to the bank. In those e-mails, he did not contest to the validity of the retirement plan and even recognized its provisions, he
even requested that his services be extended.
The Cercado Case, which was heavily relied upon by the Court of Appeals is inapplicable. In the Cercado case, the
petitioner was employed two years before the adoption of the employers retirement plan, logically, her employment contract did not
include the retirement plan. The Court in the Cercado case held that because of the automatic application of the retirement plan to
the current employees without they voluntary consent, the employee was forced to participate. Further, in the case relied upon by
the CA, the employee refused the early retiremet package provided by the employer, from the beginning she was adamant that she
did not consent to the retirement plan of her employer. In the case at bar, Sagaysay signed a quitclaim and received at amount of
P98,376.14.
Given that Sagaysay is a seasoned banker, spending 34 years of his life working in different banking establishments, it
cannot be said that he was naive in dealing with his employer and that he failed to exercise his free and voluntary will when faced
with the documents relating to his retirement.
10. Perez vs. Camparts Industries Inc. GR No. 197557, October 5, 2016
DOCTRINE: (1) Termination of employment by the employee does not entitle the employee to separation pay. (2) Unilateral act of
retirement by the employee does not bind the employer with the provision of the companys Retirement Plan.
FACTS:
Perez started her employment with Comparts Industries Inc. (CII) on July 16, 1988, she was eventually appointed as
Marketing Manager and held that position from 1998 up to January 2009, the date she resigned form work. Prior to the resignation of
Perez, she manifested her intention to avail of the optional retirement program since she was already qualified to retire under it. Her
application was denied. While vacationing to the United States, she again filed for optional retirement to take advantage of a job
offered to her in the States, but her application was denied.
CII defended their denial saying that in the Retirement Plan, CII has the option to grant or deny the application for
optional retirement and considering that it is experience financial crisis, it has no choice but to disallow her intention. Her request
for reconsideration was likewise denied. Perez had to go to the United States to attend to her mother who suffered a mild stroke, so
she applied for optional retirement again. CII informed her that they could only give her P100,000 as gratuity for her twenty years of
service as this was the only amount they could afford.
Perez received a letter from CII stating their acceptance of resignation, the same letter contained their deinal of Perez
claim for optional retirement benefits, stating that CII has no policy or rules on optional retirement benefits and that it has been
affected by global crisis. Another reason for their denial was that the Labor Code does not grant separation pay to voluntary resigning
employees. Further, they content that CII cannot invoke the provisions of the CBA because the CBA containing optional retirement
benefits is only for the rank-and-file employees.
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Perez filed a complaint before the NLRC-RAB No. VII for discrimination, moral damages, and attorneys fees and further
prayed for separation pay in the form of optional retirement benefits either under the Retirement Plan for CII officers or under the
CBA for rank-and-file employees. The NLRC-RAB No. VII ruled in favor of Perez. The NLRC ordered CII to pay Perez the amount of
P100,000. Perez appealed before the Court of Appeals, who also dismissed her appeal and affirmed the ruling of the NLRC.
ISSUES: (1) Whether Perez is entitled to separation pay

(2) Whether Perez is entitled to the optional retirement benefits
RULING:
1. No. Termination of employment by the employee, as in this instance, does not entitle the employee to separation pay.
Separation pay is the amount which an employee receives at the time of his severance from employment, designed to provide
the employee with the wherewithal during the period that he is looking for another employment and is recoverable only in
instances enumeration under Articles 298 and 299 of the Labor Code or in illegal dismissal cases when reinstatement is not
feasible.
2. No. Being a managerial employee, she is covered only by the Retirement Plan of CII Officers which provides for a normal
retirement benefit and also an optional or early retirement. This normal retirement benefit shall be sum equal to 22.5 days Pay
for every year of Credited Service in accordance with the Collective Bargaining Agreement, whichever is greater. The Retirement
Plan of CII Officers also provides for an optional/early retirement benefit. However, in this provision, it was provided that it
should be with the consent of the company. As the CA correctly ruled, a Retirement Plan in a company partakes the nature of a
contract. Consequently, CII has to give consent for the optional retorement to operate. in this case, Perez application was
denied several times since CII still needed her services. Her unilateral act of retiring without the consent of CII does not bind
the latter with the provisions of the retirement plan. Therefore, CII is not liable to give Perez the optional retirement benefits
provided therein.
11. Catotocan vs. Lourdes School of Quezon City Gr No. 213486, April 26, 2017
Facts:
In 1971, Editha Catotocan as music teacher in Lourdes School of Quezon. By the school year 2005-2006, she had already served for
thirty-five (35) years. LSQC has a retirement plan providing for retirement at sixty (60) years old, or separation pay depending on the
number of years of service.
On November 25, 2003, LSQC issued an addendum on its retirement policy which adds that normal retirement will commence after
completing 30 years of service to the school.
On March 23, 2004, Catotocan opposed to the new retirement policy. LSQC retired Catotocan sometime in June 2006 after
completing 35 years of service. Full retirement benefits were given to her. Catotocan's retirement, effective June 2006, was
communicated to her on January 27, 2006. In the same letter, Catotocan was told that if she desires, she may signify in writing her
intent to continue serving the school on a contractual basis. She responded by submitting a "Letter of Intent" on February 14,
2006.
On May 11, 2006, LSQC appointed Catotocan as a Grade School Guidance Counselor for the school year 2006-2007 under a
contractual status effective June 1, 2006 until March 31, 2007.
On August 16, 2006, Catotocan, together with other "retirees" who were re-hired, wrote the LSQC Rector to request that they be
included in the Valucare Health Maintenance Plan of the school, under the scheme that they will shoulder the cost of the health plan
through salary deduction. The Rector, Fr. Acuin, granted the request.
Again, on February 15, 2008, Catotocan re-applied as Guidance Counselor for school year 2008-2009. On April 9, 2008, LSQC
appointed her to the same post effective May 12, 2008 until April 3, 2009.
In a Letter dated January 29, 2009, Catotocan at age 59 re-applied for the position of GS Guidance Counselor, but LSQC no longer
considered her application for the position.
On June 25, 2009, Catotocan file a complaint for illegal dismissal and monetary claims before the LA. LA,NLRC and CA ruled that
the respondents acts constituted implied consent to the schools retirement policy and therefore barred from questioning its legality.
Catotocan asserts that her acceptance of retirement benefits will not stop her from pursuing an illegal dismissal complaint against
LSQC
Issue:
Whether or not the illegal dismissal complaint of Catotocan will prosper.
Ruling:
NO. Catotocan is already estopped from questioning the legality of the new retirement policy. Her voluntary acts and enjoyment of
the monetary benefits with the new retirement plan cannot be considered that she was illegally dismissed or have been forced to
retire. Her filing of illegal dismissal case was just an afterthought subsequent to LSQCs denial of her fourth re-application for the
Guidance Counselor position.
1. Retirement plan allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 yrs are not
per se void.
Only in the absence of such an agreement shall the retirement age be fixed by law, which provides for a compulsory
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retirement age at 65 years, while the minimum age for optional retirement is set at 60 years. Thus, retirement plans, as in LSQC's
retirement plan, allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are
not per se repugnant to the constitutional guaranty of security of tenure. The Labor Code permits employers and employees to fix the
applicable retirement age at 60 years or below subject to the consent of employees, provided that the employees' retirement benefits
under any CBA and other agreements shall not be less than those provided therein.
2.Notice of the employers decision to retire an employee is sufficient.
Indeed, acceptance by the employees of an early retirement age option must be explicit, voluntary, free, and
uncompelled. However, We already had the occasion to strike down the added requirement that an employer must first consult its
employee prior to retiring him, as this requirement unduly constricts the exercise by management of its option to retire the said
employee. Due process only requires that notice of the employer's decision to retire an employee be given to the employee.
3. Her voluntary acts constitutes implied consent to the new retirement policy
While it may be true that Catotocan was initially opposed to the idea of her retirement at an age below 60 years, it must be
stressed that Catotocan's subsequent actions after her "retirement" are actually tantamount to her consent to the addendum to the
LSQC's retirement policy to wit:
(1) her repeated application and availment of re-hiring program
(2) she received all of her retirement benefits
(3) upon acceptance of the retirement benefits, there was no notation that she is accepting the retirement benefits under protest or
without prejudice to the filing of an illegal dismissal case.||
12. Philippine Airlines vs. Hassaram, GR. No. 217730, June 5, 2017
Concept: The determination factor in choosing which retirement scheme to apply is the one which has superior benefits.
Facts:
Hassaram a former pilot of PAL filed for illegal dismissal against PAL and the payment of retirement benefits. He claimed that he had
applied for retirement from PAL in August 200 after rendering 24 years of service as a pilot, but that his application was denied.
Labor Arbiter ruled that Article 287 of the Labor Code should be applied, since the statute provided better benefits than the PAL-
ALPAP.
NLRC ruled in favor of PAL on account of Hassarams receipt of retirement benefits under the plan was sufficient to discharge his
claim for retirement pay.
CA ruled in favor of Hassaram that he is entitled to receive retirement benefits pursuant to Article 287 of the Labor Code.PAL asserts
that its own company retirement plans both the PAL Pilots Retirement Benefit Plan and the 1967 PAL-ALPAP Retirement Plan
should have formed part of Hassarams retirement pay, because the Plan was a retirement fund wholly financed by the company.
Hassaram insists that the amount he received from the Plan represented only a return of his share in a distinct and separate
provident fund established for PAL Pilots.
Issue:
Whether the amount received by Hassaram under the Plan should be deemed part of his retirement pay.
Whether Hassaram is entitled to receive retirement benefits under Article 287 of the Labor Code.
Ruling:
Plan must be considered part of his retirement pay, combined with the retirement benefits under the CBA between PAL
and ALPAP, this scheme would allow Hassaram to receive superior retirement benefits, thereby rendering Article 287 of the Labor
Code inapplicable.
1.) Yes, it is deemed part of his retirement pay.
The provisions of the plan clearly provides that it is the company that contributes to a retirement fund for the account of
the pilots. These contributions comprise benefits received by the latter upon retirement, separation from service, or disability.
2.) No, Article 287 is not applicable.
Art 287 is applicable only to a situation where (1) there is no CBA or other applicable employment contract providing for
retirement benefits for an employee. Or (2) there is a CBA or other applicable employment contract providing for a retirement
benefits for an employee, but is below the requirement set by law.
Comparing the benefits under the two (2) retirement schemes, it can readily be perceived that the 22.5 days worth of salary
for every year of service provided under Article 287 of the Labor Code cannot match the 240% of salary or almost two and a half
worth of monthly salary per year of service provided under the PAL Pilots' Retirement Benefit Plan, which will be further added to
the P125,000.00 to which the petitioner is entitled under the PAL-ALPAP Retirement Plan. Therefore, it is to the petitioner's
advantage that PAL's retirement plans were applied in the computation of his retirement benefits.
71 | P a g e
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72 | P a g e

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Midterm Case

5.WAGE ENFORCEMENT AND RECOVERY

6.WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES

9.MINIMUM LABOR STANDARD BENEFITS

10.OTHER SPECIAL BENEFITS

2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]

3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]

ISSUE: W/N an employer-employee relationship exists between PhilCom and De Vera

1. Application of preventive medicine including periodic check-up of employees;

5. Conduct home visits whenever necessary;

SC highlighted this portion of LAs decision:

4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006

Citing Universal Robina Corporation vs Catapang:

Citing Magsalin vs National Organization of Working Men:

In proving the employer-employee relationship between petitioner and respondents:

5. Francisco vs. NLRC, 500 SCRA 690 [06]

RTC: Dr. Estrada solely liable for damages.

CA: affirmed the RTCs ruling.

NLRC: Dismissed respondents appeal for lack of merit.

ISSUE: Whether or not employer-employee relationship exists between the parties.

NLRC and CA: Reversed.

ISSUE: WON petitioners are employees of Shangri-la.

RULING: No, but they are the employees of respondent doctor.

LABOR ARBITER: Ruled in favor of Manulife.

NLRC: In favor of Tongko. There was an existence of employer-employee relationship.

CA: Upheld the decision of Labor Arbiter.

ISSUE: WON there was an employer-employee relationship.

ISSUE: WON there is an employer-employee relationship

NLRC: Affirmed Labor Arbiters judgement.

CA set aside the ruling of NLRC.

Issue: WON there is employee-employer relationship between petitioner and respondent.

Ruling: Yes, there is employee-employer relationship.

NLRC reversed the LAs decision.

Issues: WON there is employer-employee relationship?

Ruling: No, there is no employer-employee relationship.

b. He could not choose the place of his performance;

NLRC and CA: Sustained the Labor Arbiter.

Issue: WON Alcantara was an independent contractor or an employee of Royale Homes.

Ruling: Not an employee.

The juridical relationship of the parties based on their written contract

The juridical relationship of the parties based on Control Test

Petition is GRANTED. Decision of CA is reversed and set aside.

RULING: Arlene is a regular employee and was illegally dismissed by Fuji.

Application of the four-fold test

Arlene was a regular employee with a fixed-term contract

CONCEPT: STARE DECESIS in labor cases

ISSUE: The legality of their dismissal pursuant to PCPPI's retrenchment program.

RULING: The petition has no merit.

The Court rules in the affirmative.

Issue: Whether they are to be considered as regular employees or not

The Issue Before the Court

Ruling of the Court:

WHEREFORE, the petition is PARTLY GRANTED

24. Lu vs. Enopia, GR No. 197899, March 6, 2017

1. PT&T vs. NLRC, 272 SCRA 596 [1997]

ISSUE: Was Velasco illegally dismissed?

1. It is violative of Article 137 of the Labor Code.

4.WAGES & WAGE RATIONALIZATION ACT

4.AVIOLATION OF WAGE ORDER

CONCEPT: REQUISITES TO ESTABLISH EMPLOYEE-EMPLOYER RELATIONSHIP; WHEN IS BOARD ANG LODGING

LABOR ARBITERS DECISION:

PETITION HAS NO MERIT.

LABOR ARBITER DECISION: