cases for labor review

7/25/2019 Cases for Labor Review

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MANILA WATER COMPANY, INC.,petitioner, vs. HERMINIO D. PENA,ESTEBAN B. BALDOZA, JORGE D. CANONIGO, JR., IKE S.DELFIN, RIZALINO M. INTAL, REY T. MANLEGRO, JOHNL. MARTEJA, MARLON B. MORADA, ALLAN D. ESPINA,

EDUARDO ONG, AGNESIO D. QUEBRAL, EDMUNDO B. VICTA,VICTOR C. ZAFARALLA, EDILBERTO C. PINGUL and FEDERICOM. RIVERA, respondents.

D E C I S I O N

YNARESSANTIAGO, J.!

This petition assails the decision[1]of the Court of Appeals dated November29, 2002, in CA-!"! #$ No! %&1'(, )hich reversed the decision of theNational *abor "elations Commission and reinstated the decision of the *abor

Arbiter )ith modification!

$etitioner +anila ater Compan, .nc! is one of the t)o privateconcessionaires contracted b the +etropolitan ater)or/s and #e)erae#stem +## to manae the )ater distribution sstem in the 3ast 4one of+etro +anila, pursuant to "epublic Act No! 50(1, other)ise /no)n asthe National Water Crisis Act of 1995! 6nder the Concession Areement,petitioner undertoo/ to absorb former emploees of the +## )hose namesand positions )ere in the list furnished b the latter, )hile the emploment ofthose not in the list )as terminated on the da petitioner too/ over the

operation of the 3ast 4one, )hich )as on Auust 1, 199&! $rivaterespondents, bein contractual collectors of the +##, )ere amon the 121emploees not included in the list7 nevertheless, petitioner enaed theirservices )ithout )ritten contract from Auust 1, 199& to Auust '1,199&! Thereafter, on #eptember 1, 199&, the sined a three-month contractto perform collection services for eiht branches of petitioner in the 3ast 4one![2]

8efore the end of the three-month contract, the 121 collectorsincorporated the Association Collectors roup, .nc! AC.,['])hich )ascontracted b petitioner to collect chares for

the 8alara 8ranch! #ubseuentl, most of the 121 collectors )ere as/ed bthe petitioner to transfer to the :irst Classic Courier #ervices, a ne)lreistered corporation! ;nl private respondents herein remained)ith AC.! $etitioner continued to transact )ith AC. to do its collectionneeds until :ebruar 5, 1999, )hen petitioner terminated its contract)ith AC.![(]
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$rivate respondents filed a complaint for illeal dismissal and moneclaims aainst petitioner, contendin that the )ere petitioners emploees asall the methods and procedures of their collections )ere controlled b thelatter!

;n the other hand, petitioner asserts that private respondents )ereemploees of AC., an independent contractor! .t maintained that it had nocontrol and supervision over private respondents manner of performin their)or/ e


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Respondent [petitioner herein] is further directed to pay ten >(*?@ percent of the total

award as attorneys fee or the sum of &00,0)*%**%

+O OR$ERE$%[@]

8oth parties appealed to the N*"C, )hich reversed the decision of the*abor Arbiter and ruled that the documentar evidence, e.g., letters andmemoranda b the petitioner to AC. reardin the poor performance of thecollectors, did not constitute proof of control since these documents merelidentified the errin collectors7 the appropriate disciplinar actions )ere left tothe corporation to impose! [%]:urther, there )as no evidence sho)in that theincorporation of AC. )as irreular!

$rivate respondents filed a petition for certiorari)ith the Court of Appeals,contendin that the N*"C acted )ith rave abuse of discretion amountin to

lac/ or e3 $A"T ;: T>3 NAT.;NA**A8;" "3*AT.;N# C;++.##.;N >3N .T "3N3"3 T>3 3C.#.;N

A##A.*3 8B >3"3.N "3#$;N3NT#!

8! >3N .T +AN.:3#T*B ;D3"*;;E3 T>3 3D.3NC3 $"3#3NT3 8B T>3$3T.T.;N3" C;+$ANB AN "6*.N T>AT T>3 $3T.T.;N3"# 3:3N#3 ;:

*ACE ;: 3+$*;B3"-3+$*;B33 "3*AT.;N# .# .T>;6T +3".T!C! .N C;NC*6.N T>AT $3T.T.;N3" C;+$ANB "3F6."3 "3#$;N3NT#

T; .NC;"$;"AT3 T>3 A##;C.AT3 C;**3CT;"# ";6$, .NC! [AC.]N;T.T>#TAN.N A8#3NC3 ;: ANB #$3C.:.C 3D.3NC3 .N #6$$;"T ;:T>3 #A+3!

! .N :.N.N $3T.T.;N3" C;+$ANB 6.*TB ;: 8A :A.T>N;T.T>#TAN.N A8#3NC3 ;: ANB #$3C.:.C 3D.3NC3 .N #6$$;"T ;:
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T>3 #A+3, AN AA".N +;"A* AN 3G3+$*A"B A+A3# T; >3"3.N"3#$;N3NT#! [9]

The pivotal issue to be resolved in this petition is )hether or not theree


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free from the control and direction of his employer or principal in all matters

connected with the performance of the worA eBcept as to the results thereofC and 0@ the

contractor has substantial capital or inDestment in the form of tools, euipment,

machineries, worA premises, and other materials which are necessary in the conduct of

the business%

*abor-onl contractin as defined in Section 5, Department Order No. 1!"#, R$les %mplementing Articles 1"&!1"9 of t'e La(or Code [1(]refers to anarranement )here the contractor or subcontractor merel recruits, suppliesor places )or/ers to perform ob, )or/ or service for a principal, and an ofthe follo)in elements is present?

i The contractor or subcontractor does not have substantial capital or investment)hich relates to the ob, )or/ or service to be performed and the emploeesrecruited, supplied or placed b such contractor or subcontractor are performinactivities )hich are directl related to the main business of the principal7 or

ii The contractor does not eerminio ! $ea![1%]+oreover, in dealin )ith the consumers,private respondents used the receipts and identification cards issued bpetitioner![1&]

Second, the )or/ of the private respondents )as directl related to theprincipal business or operation of the petitioner! 8ein in the business of

providin )ater to the consumers in the 3ast 4one, the collection of thechares therefor b private respondents for the petitioner can onl becateoriHed as clearl related to, and in the pursuit of the latters business!

Lastl*,AC. did not carr on an independent business or underta/e theperformance of its service contract accordin to its o)n manner and method,free from the control and supervision of its principal, petitioner! $rior to privaterespondents alleed emploment )ithAC., the )ere alread )or/in for
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petitioner, subect to its rules and reulations in reard to the manner andmethod of performin their tas/s! This form of control and supervision neverchaned althouh the )ere alread under the seemin emploof AC.! $etitioner issued memoranda reardin the billin methods anddistribution of boo/s to the collectors7[15]it reuired private respondents toreport dail and to remit their collections on the same da to the branch officeor to deposit them )ith 8an/ of the $hilippine .slands7 it monitored strictl theirattendance as )hen a collector cannot perform his dail collection, he mustnotif petitioner or the branch office in the mornin of the da that he )ill beabsent7 and althouh it )as AC. )hich ultimatel disciplined privaterespondents, the penalt to be imposed )as dictated b petitioner as sho)n inthe letters it sent to AC. specifin the penalties to be meted on the errinprivate respondents![19]These are indications that AC. )as not left alone inthe supervision and control of its alleed emploees! Conseuentl, it can beconcluded that AC. )as not an independent contractor since it did not carra distinct business free from the control and supervision of petitioner!

6nder this factual milieu, there is no doubt that AC. )as enaed inlabor-onl contractin, and as such, is considered merel an aent of thepetitioner! .n labor-onl contractin, the statute creates an emploer-emploeerelationship for a comprehensive purpose? to prevent a circumvention of laborla)s! The contractor is considered merel an aent of the principal emploerand the latter is responsible to the emploees of the labor-onl contractor as ifsuch emploees had been directl emploed b the principal emploer![20]#ince AC.is onl a labor-onl contractor, the )or/ers it supplied should be

considered as emploees of the petitioner!

3ven the four-fold test )ill sho) that petitioner is the emploer of privaterespondents! The elements to determine the e


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accommodate their reuest to be absorbed since petitioner )as stillunderoin a transition period! .t )as onl )hen its business became settledthat petitioner emploed private respondents for a fi


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force, duress or improper pressure being brought upon the employee and absent any

circumstances Ditiating his consent, or where it satisfactorily appears that the

employer and employee dealt with each other on more or less terms with no moral

dominance whateDer being eBercised by the former oDer the latter% hat is the doctrine

inBrent School, Inc. v. Zamora, (( +3R' G*0% he indiDidual contracts in uestion

were prepared by !W3 in the form of the letter addressed to complainants% heletter=contract is dated+eptember (, (


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)arrant the rant of moral damaes under the Civil Code! The act of dismissalmust be attended )ith bad faith, or fraud, or )as oppressive to labor or donein a manner contrar to morals, ood customs or public polic and, of course,that social humiliation, )ounded feelins, or rave an


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6el#:

'e test to #ete+ine t'e e,istence o* in#e"en#ent contactos'i" is &'et'e oneclai+ing to be anin#e"en#ent contacto 'as contacte# to #o t'e &o acco#ing to

'is o&n +et'o#s an# &it'outbeing sub7ect to t'e contol o* t'e e+"lo%e- e,ce"t

onl% as to t'e esults o* t'e &o.

n legiti+ate labo contacting- t'e la& ceates an e+"lo%e$e+"lo%ee elations'i"

*o a li+ite#"u"ose- i.e.- to ensue t'at t'e e+"lo%ees ae "ai# t'ei &ages. 'e

"inci"al e+"lo%e beco+es 7ointl% an# seveall%

liable &it' t'e 7ob contacto- onl% *o t'e "a%+ent o* t'e e+"lo%ees/

&ages&'eneve t'e contacto *ails to "a% t'e sa+e.8t'e t'an t'at- t'e "inci"ale+"lo%e is not es"onsible *o an% clai+ +a#e b% t'e e+"lo%ees.

n labo$onl% contacting- t'e statute ceates an e+"lo%e$e+"lo%ee elations'i" *o

aco+"e'ensive "u"ose: to "event a cicu+vention o* labo la&s. 'e contacto

is consi#ee#+eel% an agent o* t'e "inci"al e+"lo%e an# t'e latte is es"onsible

to t'e e+"lo%ees o* t'elabo$onl% contacto as i* suc' e+"lo%ees 'a# been #iectl%

e+"lo%e# b% t'e "inci"al e+"lo%e.

'e *ollo&ing &oul# s'o& t'at suno&e is engage# in labo onl% contacting: 'at

a""eas is t'atSuno&e #oes not 'ave substantial ca"italiation o invest+ent in

t'e *o+ o* tools- eui"+ent-+ac'ineies- &o "e+ises an# ot'e +ateials to

uali*% it as an in#e"en#ent contacto. t isgat'ee# t'at t'e lot- buil#ing-

+ac'ineies an# all ot'e &oing tools utilie# b% "ivatees"on#ents in ca%ing

out t'ei tass &ee o&ne# an# "ovi#e# b% SM!.

Suno&e- #uing t'e e,istence o* its sevice contact &it' es"on#ent SM!- #i# not

o&n a single+ac'ine%- eui"+ent- o &oing tool use# in t'e "ocessing "lant.

;ve%t'ing &as o&ne# an#"ovi#e# b% es"on#ent SM!. 'e lot- t'e buil#ing- an#

&oing *acilities ae o&ne# b% es"on#entSM!.

An# *o+ t'e 7ob #esci"tion "ovi#e# b% SM! itsel*- t'e &o assigne# to "ivate

es"on#ents &as#iectl% elate# to t'e auacultue o"eations o* SM!.


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t'e natue o* t'e &o"e*o+e# b% "ivate es"on#ents in s'i+" 'avesting-

eceiving an# "acing *o+e# an integal"at o* t'e s'i+" "ocessing o"eations o*

SM!.

G.R. N". #$%&'&% Ma()* $, '+$+

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,vs!HON. LABOR ARBITER ARIEL C. SANTOS, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONSPAFLURMC CHAPTER- and /0 12132(0, MICHAEL PENALOSA, ET AL., SAMAHANG DIWANGMANGGAGAWA SA RMCFFW CHAPTER, and /0 12132(0, JAIME ARADA, ET AL., respondents!

+'e C'ief Legal Co$nsel for petitioner D-.

-a(lo . Castillon for private respondents.

Re*naldo . Aralar Associates for t'e Arada respondents.

Sisenando R. /illal$0, r. for individ$al respondents.

GUTIERREZ, JR.,J.:

This petition calls for the interpretation of Article 110 of the *abor Code )hich ives the )or/ers preferences asreards )aes in case of liuidation or ban/ruptc of an emploerIs business! $etitioner evelopment 8an/ ofthe $hilippines 8$ maintains the Article 110 does not appl )here there has been an e


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+ean)hile in the other development )hich led to this case, petitioner 8$ obtained a )rit of possession on=une &, 195@ from the "eional Trial Court "TC of $asi of all the properties of "+C after havin eon! Arbiter Teodorico oelio should be immediatel enforced aainst 8$ )ho is herebdirected to pa all the monetar claims of complainants )ho )ere former emploees ofrespondent "+C!

Anent the Arada case, 8$ is hereb directed to pa all the amounts as indicated oppositethe names of complainants listed from pae . to pae @ of Anne< JAJ of complainantsIcomplaint provided that their names are not amon those listed in the $enalosa case!

.t is hereb also declared that former emploees )hose names are not listed in thecomplainantsI position papers but can prove that the )ere former emploees of "+C prior toits ban/ruptc, should also be paid the same monetar benefits bein ranted to hereincomplainants!

:inall, 8$ is hereb ordered to deposit )ith the National *abor "elations Commission theproceeds of the sale of the assets of "+C bet)een 8$ on one hand and eneral Te


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>ence, this petition!

$etitioner 8$ maintains that the public respondent misinterpreted Article 110 of the *abor Code and #ection10, "ule D..., 8oo/ ... of the "evised "ules and "eulations .mplementin the *abor Code in that the saidrespondent upheld the e


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There )as no issue of udicial vis-a-vis e


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>3"3:;"3, the petition is hereb "ANT3! The uestioned decision of the public respondent isANN6**3 and #3T A#.3! The Temporar "estrainin ;rder )e issued on +a 20, 195& enoinin theenforcement of the uestioned decision is made $3"+AN3NT! No costs!

#; ;"3"3!

4G.R. N". '%56+%. Ma()* '7, '++#8

TRADERS ROYAL BANK EMPLOYEES UNIONINDEPENDENT,petitioner, vs. NATIONAL LABOR RELATIONSCOMMISSION and EMMANUEL NOEL A. CRUZ, respondents.

D E C I S I O N

REGALADO, J.!

$etitioner Traders "oal 8an/ 3mploees 6nion and private respondentAtt! 3mmanuel Noel A! CruH, head of the 3!N!A! CruH and Associates la)firm, entered into a retainer areement on :ebruar 2%, 195& )hereb theformer obliated itself to pa the latter a monthl retainer fee of $',000!00 inconsideration of the la) firms underta/in to render the services enumeratedin their contract![1]$arentheticall, said retainer areement )as terminated b

the union on April (, 1990![2]

urin the e


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Court, in its decision promulated on Auust '0, 1990, [%]modified the decisionof the N*"C b deletin the a)ard of mid-ear and ear-end bonusdifferentials )hile affirmin the a)ard of holida pa differential![&]

The ban/ voluntaril complied )ith such final udment and determined

the holida pa differential to be in the amount of $1&@,&9(!'2! $etitionernever contested the amount thus found b T"8![5]The latter dul paid itsconcerned emploees their respective entitlement in said sum throuh theirparoll![9]

After private respondent received the above decision of the #upremeCourt on #eptember 15, 1990,[10]he notified the petitioner union, the T"8manaement and the N*"C of his riht to e


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$etitioner maintains that the N*"C committed rave abuse of discretionamountin to lac/ of urisdiction in upholdin the a)ard of attornes fees inthe amount of $1&,@&(!(', or ten percent 10M of the $1&@,&9(!'2 rantedas holida pa differential to its members, in violation of the retainerareement7 and that the challened resolution of the N*"C is null and void,[19]for the reasons hereunder stated!

Althouh petitioner union concedes that the N*"C has urisdiction todecide claims for attornes fees, it contends that the a)ard for attornes feesshould have been incorporated in the main case and not after the #upremeCourt had alread revie)ed and passed upon the decision of the N*"C! #incethe claim for attornes fees b private respondent )as neither ta/en up norapproved b the #upreme Court, no attornes fees should have been allo)edb the N*"C!

Thus, petitioner posits that the N*"C acted )ithout urisdiction in ma/inthe a)ard of attornes fees, as said act constituted a modification of a finaland e


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services he has rendered to the latter! The basis of this compensation is thefact of his emploment b and his areement )ith the client!

.n its e


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of the court! The issue over attornes fees onl arises )hen somethin hasbeen recovered from )hich the fee is to be paid![2']

hile a claim for attornes fees ma be filed before the udment isrendered, the determination as to the propriet of the fees or as to the amount

thereof )ill have to be held in abeance until the main case from )hich thela)ers claim for attornes fees ma arise has become final! ;ther)ise, thedetermination to be made b the courts )ill be premature! [2(];f course, apetition for attornes fees ma be filed before the udment in favor of theclient is satisfied or the proceeds thereof delivered to the client! [2@]

.t is apparent from the foreoin discussion that a la)er has t)o optionsas to )hen to file his claim for professional fees! >ence, private respondent)as )ell )ithin his rihts )hen he made his claim and )aited for the finalit ofthe udment for holida pa differential, instead of filin it ahead of thea)ards complete resolution! To declare that a la)er ma file a claim for feesin the same action onl before the udment is revie)ed b a hiher tribunal)ould deprive him of his aforestated options and render ineffective theforeoin pronouncements of this Court!

Assailin the rulins of the labor arbiter and the N*"C, petitioner unioninsists that it is not uilt of unust enrichment because all attornes fees dueto private respondent )ere covered b the retainer fee of $',000!00 )hich ithas been reularl pain to private respondent under their retainerareement! To be entitled to the additional attornes fees as provided in $art #pecial 8illins of the areement, it avers that there must be a separate

mutual areement bet)een the union and the la) firm prior to theperformance of the additional services b the latter! #ince there )as noareement as to the pament of the additional attornes fees, then it isconsidered )aived!

2n contra, private respondent contends that a retainer fee is not theattornes fees contemplated for and commensurate to the services herendered to petitioner! >e asserts that althouh there )as no e


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this uncture, to determine if private respondent is entitled to an additionalremuneration under the retainer areement[2&]entered into b him andpetitioner!

The parties subscribed therein to the follo)in stipulations?

< < (*?@ per

cent attorneys fees is supplemented by +ec% (((, Rule :""", -ooA """ of the Omnibus

Rules "mplementing the .abor 3ode, as amended%

<

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