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Case Digest in Labor StandardsBy Rafael D. Pangilinan

BATONG BUHAY GOLD MINES, INC. v. DELA SERNAG.R. No. 86963. August 6, 1999URISIMA, !.

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Elsie Rosalinda Ty, Antonia Mendelebar, Ma. Concepcion O. Reyes and 1,247 others filed a complaint aainst !aton !"hay #old Mines,

$nc. for% &1' non(payment of their basic pay and allo)ances for the period of * +"ly 1- to / +"ly 1-40 &2' non(payment of their basic payand allo)ances for the period 1* +"ne 1-4 to / October0 &' non(payment of their salaries for the period 1* March 1-* to the present0 &4'non(payment of their 1th month pay for 1-/, 1-* and 1-70 &/' non(payment of their acation and sic leae, and the compensatoryleaes of mine site employees0 and &*' non(payment of the salaries of employees )ho )ere placed on forced leaes since 3oember, 1-/to the present, if this is not feasible, the affected employees be a)arded correspondin separation pay.

The abor 5tandards and 6elfare Officers s"bmitted their report )ith the follo)in recommendations%

68ERE9ORE, premises considered, this case is hereby s"bmitted )ith the recommendation that an Order of Compliance be iss"eddirectin respondent !aton !"hay #old Mines $nc. to pay complainants: Elsie Rosalina Ty, et al. ;4,-1-,74*.4< by )ay of "npaid salaries of

)orers from March 1*, 1-7 to present, "npaid and ECOA differentials "nder 6ae Order 3os. 2 and / "npaid 1th months pay for 1-/and 1-*, and "npaid acation=sic=compensatory leae benefits.>

The Reional ?irector adopted the recommendation of the 56Os. The complainants filed an e@(parte motion for the iss"ance of a )rit of e@ec"tion and appointment of special sheriff. The Reional ?irector iss"ed an Order directin the respondent to p"t "p a cash ors"rety bond other)ise a )rit of e@ec"tion )ill be iss"ed. 6hen the respondent failed to post a cash=s"rety bond, and "pon motion for theiss"ance of a )rit of e@ec"tion by the complainants, the Reional ?irector, on 14 5eptember 1-7 iss"ed a )rit of e@ec"tion appointin Mr.+ohn Espiridion Ramos as 5pecial 5heriff and directin him to do the follo)in% Bo" are to collect the aboe(stated amo"nt from therespondent and deposit the same )ith Cashier of this Office for appropriate disposition to herein complainants "nder the s"perision of theoffice of the ?irector. Other)ise, yo" are to e@ec"te this )rit by attachin the oods and chattels of the respondent not e@empt frome@ec"tion or in case of ins"fficiency thereof aainst the real or immoable property of the respondent.>

The 5pecial 5heriff proceeded to e@ec"te the appealed Order on 17 5eptember 1-7 and seied three &' "nits of ;eterb"ilt tr"csand then sold the same by p"blic a"ction. Dario"s materials and motor ehicles )ere also seied on different dates and sold at p"blica"ction by said sheriff.

The p"blic respondent iss"ed an order "pholdin the "risdiction of the Reional ?irector and ann"llin all the a"ction sales cond"cted

by 5pecial 5heriff +ohn Ramos. The decretal portion of the said Order r"led% the p"blic a"ction sales cond"cted by special sheriff +ohnRamos p"rs"ant to the )rit of e@ec"tion dated 14 5eptember 1-7 on 24 5eptember 2, 2<, 2, and 2 October 1-7 are all hereby declared3F A3? DO$?. 9"rthermore, the personal properties sold and the proceeds thereof )hich hae been t"rned oer to the complainants thr"their leal co"nsel are hereby ordered ret"rned to the c"stody of the respondent and the b"yers respectiely.>

Issu&s%

6O3 the Reional ?irector has "risdiction oer the complaint filed by the employees of !!#M$0 and

H&'(%

The s"bect labor standards case )as filed on 9ebr"ary /, 1-7 at )hich time Article 12- &b' read as follo)s%

Art. 12- &b' Visitorial and enforcement powers G &b' The Minister of abor or his d"ly a"thoried representatie shall hae the po)er toorder and administer, after d"e notice and hearin, compliance )ith the labor standards proisions of this Code based on the findins oflabor re"lation officers or ind"strial safety enineers made in the co"rse of inspection, and to iss"e )rits of e@ec"tion to the appropriatea"thority for the enforcement of their order, e@cept in cases )here the employer contests the findins of the labor re"lations officers andraises iss"es )hich cannot be resoled )itho"t considerin eidentiary matters that are not erifiable in the ordinary co"rse of inspection.>

Article 12- &b' reH"ires the conc"rrence of the follo)in elements in order to diest the Reional ?irector or his representaties of "risdiction, to )it% &a' that the petitioner &employer' contests the findins of the labor re"lations officer and raises iss"es thereon0 &b' that inorder to resole s"ch iss"es, there is a need to e@amine eidentiary matters0 and &c' that s"ch matters are not erifiable in the normal co"rseof inspection.

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Raisin lac of "risdiction in a Motion to ?ismiss is not the contest contemplated by the e@ception cla"se "nder Article 12-&b' of the aborCode )hich )o"ld tae the case o"t of the "risdiction of the Reional ?irector and brin it before the abor Arbiter.

;etitioner:s ref"sal to allo) the abor 5tandards and 6elfare Officers to cond"ct inspection in the premises of their head office in Maatiand the fail"re to file their position paper is eH"ialent to a )aier of its riht to contest the claims of the employees. This Co"rt had occasionto hold there is no iolation of d"e process )here the Reional ?irector merely reH"ired the s"bmission of position papers and resoled thecase s"mmarily thereafter.I1J 9"rthermore, the iss"ance of the compliance order )as )ell )ithin the "risdiction of the Reional ?irector, as

5ection 14 of the R"les on the ?isposition of abor 5tandards Cases proides%

S&$t)o* 1+. "#)'u& to A--&# G 6here the employer or the complainant fails or ref"ses to appear d"rin the inestiation, despiteproper notice, for t)o &2' consec"tie hearins )itho"t "stifiable reasons, the hearin officer may recommend to t& R&g)o*#' D)&$to t&)ssu#*$& o/ # $o0-')#*$& o(& #s&( o* t& &v)(&*$& #t #*( o #* o(& o/ ()s0)ss#' o/ t& $o0-'#)*t #s t& $#s& 0#2 & .&Emphasis s"pplied'

The po)er then of the Reional ?irector &"nder the present state of la)' to ad"dicate employees money claims is s"bect to theconc"rrence of all the reH"isites proided "nder 5ec. 2 of RA *71/, to )it%

&a' the claim is represented by an employer or person employed in domestic or ho"sehold serice, or ho"sehelper0&b' the claim arises from employer(employee relationship0&c' the claimant does not see reinstatement0 and

&d' the areate money claim of each employee or ho"sehelper does not e@ceed ;/,<<<.

The r"lin in Servando’s Inc. vs. Sec. of Labor and Employment and the Regional Director, Region VI, DLE , in effect, e@panded the "risdictional limitation proided for by RA *71/ as to incl"de labor standards cases "nder Article 12- &b' and no loner limited to ordinarymonetary claims "nder Article 12.

Rep"blic Act 77<, the la) oernin the isitorial and enforcement po)ers of the abor 5ecretary and his representaties reads%

Article 12- &b' Not)tst#*()*g t& -ov)s)o*s o/ At)$'&s 149 #*( 415 o/ t)s Co(& to the contrary, and in cases )here therelationship of employer(employee still e@ists, the 5ecretary of abor and Employment or his d"ly a"thoried representaties shall hae thepo)er to iss"e compliance orders to ie effect to the labor standards proisions of this Code and other labor leislation based on thefindins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The 5ecretary or hisd"ly a"thoried representatie shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of their orders, e@cept in cases

)here the employer contests the findins of the labor employment and enforcement officer and raises iss"es s"pported by doc"mentaryproofs )hich )ere not considered in the co"rse of inspection.

Do$t)*&s%

labor standards G refers to the minim"m reH"irements prescribed by e@istin la)s, r"les and re"lations relatin to )aes, ho"rs of )or,

cost of liin allo)ance and other monetary and )elfare benefits, incl"din occ"pational, safety and health standards

+"risdiction oer the s"bect matter is determined by the la) in force )hen the action )as commenced, "nless a s"bseH"ent stat"te

proides for its retroactie application, as )hen it is a c"ratie leislation.

C"ratie stat"tes are intended to s"pply defects, abride s"perfl"ities in e@istin la)s and c"rb certain eils. They are intended to enable

persons to carry into effect that )hich they hae desined and intended, b"t has failed of e@pected leal conseH"ence by reason of somestat"tory disability or irre"larity in their o)n action. They mae alid that )hich, before the enactment of the stat"te, )as inalid.

RUBI, ET AL. v. THE ROINCIAL BOARD O" MINDOROG.R. No. L71+58 M#$ 5, 1919MALCOLM, !.%

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On 9ebr"ary 1, 117, the proincial board of Mindoro adopted resol"tion 3o. 2/ )hich is as follo)s%

The proincial oernor, 8on. +"an Morente, +r., presented the follo)in resol"tion%

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6hereas seeral attempts and schemes hae been made for the adancement of the non(Christian people of Mindoro, )hich )ere all afail"re,

6hereas it has been fo"nd o"t and proed that "nless some other meas"re is taen for the Manyan )or of this proince, no s"ccessf"lres"lt )ill be obtained to)ard ed"catin these people.

6hereas it is deemed necessary to oblied them to lie in one place in order to mae a permanent settlement,

6hereas the proincial oernor of any proince in )hich non(Christian inhabitants are fo"nd is a"thoried, )hen s"ch a co"rse isdeemed necessary in the interest of la) and order, to direct s"ch inhabitants to tae "p their habitation on sites on "nocc"pied p"blic landsto be selected by him and approed by the proincial board.

6hereas the proincial oernor is of the opinion that the sitio of Tibao on ae 3a"an is a place most conenient for the Manyanes tolie on, 3o), therefore be it

Resolved , that "nder section 2<77 of the Administratie Code, -<< hectares of p"blic land in the sitio of Tibao on 3a"an ae beselected as a site for the permanent settlement of Manyanes in Mindoro s"bect to the approal of the 8onorable 5ecretary of the $nterior,and

Resolved f!rther , That Manyans may only solicit homesteads on this reseration proidin that said homestead applications arepreio"sly recommended by the proincial oernor.>

5aid resol"tion 3o. 2/ &series 117' of the proincial board of Mindoro )as approed by the 5ecretary of the $nterior.

On ?ecember 4, 117, the proincial oernor of Mindoro iss"ed e@ec"tie order 3o. 2 )hich says%

3o), therefore, $, +"an Morente, +r., proincial oernor of Mindoro, p"rs"ant to the proisions of section 214/ of the reisedAdministratie Code, do hereby direct that all the Manyans in the to)nships of 3a"an and ;ola and the Manyans east of the !aco Rierincl"din those in the districts of ?"lanan and R"bi:s place in Calapan, to tae "p their habitation on the site of Tibao, 3a"an ae, notlater than ?ecember 1, 117.

Any Manyan )ho shall ref"se to comply )ith this order shall "pon coniction be imprisoned not e@ceed in si@ty days, in accordance )ithsection 27/ of the reised Administratie Code.>

R"bi and other Man"ianes of the ;roince of Mindoro applied for the iss"ance of )rit of habeas corp!s. They alleed that the

Man"ianes are bein illeally depried of their liberty by the proincial officials of that proince. R"bi and his companions are said to beheld on the reseration established at Tibao, Mindoro, aainst their )ill, and one ?abalos is said to be held "nder the c"stody of theproincial sheriff in the prison at Calapan for hain r"n a)ay form the reseration.

ISSUE%

6O3 5ecs. 214/ and 27/ are "nla)f"l for bein "nd"e deleation of leislatie po)er0 discriminatory bet)een indiid"als beca"se oftheir reliio"s beliefs0 iolatie of d"e process of la) and eH"al protection of the la)0 and inalid e@ercise of police po)er

HELD%

5ection 214/ and 27/ of the Administratie Code of 117 reads as follo)s%

5EC. 214/. Establishment of non"#hristina !pon sites selected by provincial governor . K 6ith the prior approal of the ?epartment 8ead,the proincial oernor of any proince in )hich non(Christian inhabitants are fo"nd is a"thoried, )hen s"ch a co"rse is deemed necessaryin the interest of la) and order, to direct s"ch inhabitants to tae "p their habitation on sites on "nocc"pied p"blic lands to be selected by himan approed by the proincial board.

5EC. 27/. Ref!sal of a non"#hristian to ta$e !p appointed habitation. K Any non(Christian )ho shall ref"se to comply )ith the directionsla)f"lly ien by a proincial oernor, p"rs"ant to section t)o tho"sand one h"ndred and forty(fie of this Code, to tae "p habitation "pona site desinated by said oernor shall "pon coniction be imprisonment for a period not e@ceedin si@ty days.




The tr"e distinction therefore is bet)een the deleation of po)er to mae the la), )hich necessarily inoles a discretion as to )hat itshall be, and conferrin an a"thority or discretion as to its e@ec"tion, to be e@ercised "nder and in p"rs"ance of the la). The first cannot bedone0 to the later no alid obection can be made. ?iscretion may be committed by the eislat"re to an e@ec"tie department or official. Theeislat"re may mae decisions of e@ec"tie departments of s"bordinate official thereof, to )hom t has committed the e@ec"tion of certainacts, final on H"estions of fact.

An e@ception to the eneral r"le permits the central leislatie body to deleate leislatie po)ers to local a"thorities. The ;hilippine

eislat"re has here conferred a"thority "pon the ;roince of Mindoro, to be e@ercised by the proincial oernor and the proincial board.

6ho b"t the proincial oernor and the proincial board, as the official representaties of the proince, are better H"alified to "de )hens"ch as co"rse is deemed necessary in the interest of la) and orderL> As officials chared )ith the administration of the proince and theprotection of its inhabitants, )ho b"t they are better fitted to select sites )hich hae the conditions most faorable for improin the people

)ho hae the misfort"ne of bein in a bac)ard stateL5ection 214/ of the Administratie Code of 117 is not an "nla)f"l deleation of leislatie po)er by the ;hilippine eislat"re to

proincial official and a department head.

The term non(Christian> refers to naties of the ;hilippines $slands of a lo) rade of ciiliation, and that section 214/ of theAdministratie Code of 117, does not discriminate bet)een indiid"als an acco"nt of reliio"s differences.

civil liberty ( meas"re of freedom )hich may be enoyed in a ciilied comm"nity, consistently )ith the peacef"l enoyment of lie freedomin others0 incl"des the riht to e@ist and the riht to be free from arbitrary personal restraint or serit"de0 also incl"des the riht of the citiensto be free to "se his fac"lties in all la)f"l )ays0 to lie and )or )here he )ill0 to earn his lielihood by an la)f"l callin0 to p"rs"e anyocations, and for that p"rpose to enter into all contracts )hich may be proper, necessary, and essential to his carryin o"t these p"rposes toa s"ccessf"l concl"sion

d!e process of law ( eery citien shall hold his life, liberty, property, an imm"nities "nder the protection of the eneral r"les )hich oernsociety

To constit"te d"e process of la),> as has been often held, a "dicial proceedin is not al)ays necessary. $n some instances, een ahearin and notice are not reH"isite a r"le )hich is especially tr"e )here m"ch m"st be left to the discretion of the administratie officers inapplyin a la) to partic"lar cases. Any leal proceedin enforced by p"blic a"thority, )hether sanctioned by ae and c"stoms, or ne)lydeised in the discretion of the leislatie po)er, in f"rtherance of the p"blic ood, )hich reards and preseres these principles of libertyand "stice, m"st be held to be d"e process of la).

?"e process of la)> means simply first, that there shall be a la) prescribed in harmony )ith the eneral po)ers of the leislatiedepartment of the #oernment0 second, that this la) shall be reasonable in its operation0 third, that it shall be enforced accordin to there"lar methods of proced"re prescribed0 and fo"rth, that it shall be applicable alie to all the citiens of the state or to all of a class.

The plede that no person shall be denied the eH"al protection of the la)s is not infrined by a stat"te )hich is applicable to all of a class.The classification m"st hae a reasonable basis and cannot be p"rely arbitrary in nat"re.

The police po)er of the 5tate is a po)er coe@tensie )ith self(protection, and is not inaptly termed the la) of oerr"lin necessity.

The #oernment of the ;hilippine $slands has both on reason and a"thority the riht to e@ercise the soerein police po)er in thepromotion of the eneral )elfare and the p"blic interest. The police po)er of the ;hilippine #oernment belons to the eislat"re and thatthis po)er is limited only by the Acts of Conress and those f"ndamental principles )hich lie at the fo"ndation of all rep"blican forms ofoernment.

On the leislatie intent of 5ecs. 214/ and 27/ of the Administratie Code%

Accordin to then $nterior 5ec.% $t is not deemed )ise to abandon the present policy oer those )ho prefer to lie a nomadic life andeade the infl"ence of ciiliation. The #oernment )ill follo) its policy to oranie them into political comm"nities and to ed"cate theirchildren )ith the obect of main them "sef"l citiens of this co"ntry. To permit them to lie a )ayfarin life )ill "ltimately res"lt in a b"rdento the state and on acco"nt of their inorance, they )ill commit crimes and mae depredation, or if not they )ill be s"bect to inol"ntaryserit"de by those )ho may )ant to ab"se them.>

To attain the end desired, )or of a ciiliin infl"ence has been contin"ed amon the non(Christian people. These people are beinta"ht and "ided to improe their liin conditions in order that they may f"lly appreciate the benefits of ciiliation. Those of them )ho are

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still ien to nomadic habits are bein pers"aded to abandon their )ild habitat and settle in oranied settlements. They are bein made to"nderstand that it is the p"rpose of the #oernment to oranie them politically into fi@ed and permanent comm"nities, th"s brinin them"nder the control of the #oernment, to aid them to lie and )or, protect them from inol"ntary serit"de and ab"se, ed"cate their children,and sho) them the adantaes of leadin a ciilied life )ith their ciilied brothers. $n short, they are bein impressed )ith the p"rposesand obecties of the #oernment of leadin them to economic, social, and political eH"ality, and "nification )ith the more hihly ciiliedinhabitants of the co"ntry.>

Act 3o. 2*74 in reestablishin the !"rea" of non(Christian Tribes, defines the aim of the #oernment to)ards the non(Christian people inthe follo)in terms%

$t shall be the d"ty of the !"rea" of non(Christian Tribes to contin"e the )or for adancement and liberty in faor of the reion inhabitedby non(Christian 9ilipinos and foster by all adeH"ate means and in a systematical, rapid, and complete manner the moral, material,economic, social, and political deelopment of those reions, al)ays hain in ie) the aim of renderin permanent the m"t"al intelliencebet)een, and complete f"sion of, all the Christian and non(Christian elements pop"latin the proinces of the Archipelao.>

$nsofar as the Man"ianes themseles are concerned, the p"rpose of the #oernment is eident. 8ere, )e hae on the $sland of Mindoro,the Man"ianes, leadin a nomadic life, main depredations on their more fort"nate neihbors, "ned"cated in the )ays of ciiliation, anddoin nothin for the adancement of the ;hilippine $slands. 6hat the #oernment )ished to do by brinin than into a reseration )as toather toether the children for ed"cational p"rposes, and to improe the health and morals K )as in fine, to bein the process ofciiliation. this method )as termed in 5panish times, brinin "nder the bells.> The same idea adapted to the e@istin sit"ation, has beenfollo)ed )ith reference to the Man"ianes and other peoples of the same class, beca"se it reH"ired, if they are to be improed, that they beathered toether. On these fe) reserations there lie "nder restraint in some cases, and in other instances ol"ntarily, a fe) tho"sands ofthe "nciilied people. 5ereation really constit"tes protection for the Man"ianes.

Considered, therefore, p"rely as an e@ercise of the police po)er, the co"rts cannot fairly say that the eislat"re has e@ceeded its rihtf"la"thority. it is, indeed, an "n"s"al e@ercise of that po)er. !"t a reat malady reH"ires an eH"ally drastic remedy.

9"rther, one cannot hold that the liberty of the citien is "nd"ly interfered )itho"t )hen the deree of ciiliation of the Man"ianes isconsidered. They are restrained for their o)n ood and the eneral ood of the ;hilippines. 3or can one say that d"e process of la) has notbeen follo)ed. To o bac to o"r definition of d"e process of la) and eH"al protection of the la), there e@ists a la)0 the la) seems to bereasonable0 it is enforced accordin to the re"lar methods of proced"re prescribed0 and it applies alie to all of a class.

!MM ROMOTION AND MANAGEMENT, INC. v. CAG.R. No. 149. August , 1996

:AUNAN, !.

"#$ts%

9ollo)in the m"ch(p"blicied death of Maricris 5ioson in 11, former ;resident Coraon AH"ino ordered a total ban aainst thedeployment of performin artists to +apan and other forein destinations. The ban )as, ho)eer, rescinded after leaders of the oerseasemployment ind"stry promised to e@tend f"ll s"pport for a proram aimed at remoin ins in the system of deployment. $n its place, theoernment, thro"h the 5ecretary of abor and Employment, s"bseH"ently iss"ed ?epartment Order 3o. 2-, creatin the Entertainment$nd"stry Adisory Co"ncil &E$AC', )hich )as tased )ith iss"in "idelines on the trainin, testin certification and deployment of performinartists abroad.

;"rs"ant to the E$AC:s recommendations, I1J the 5ecretary of abor, on +an"ary *, 14, iss"ed ?epartment Order 3o. establishinario"s proced"res and reH"irements for screenin performin artists "nder a ne) system of trainin, testin, certification and deployment of

the former. ;erformin artists s"ccessf"lly h"rdlin the test, trainin and certification reH"irement )ere to be iss"ed an Artist:s Record !oo&AR!', a necessary prereH"isite to processin of any contract of employment by the ;OEA.

Thereafter, the ?epartment of abor, follo)in the E$AC:s recommendation, iss"ed a series of orders fine(t"nin and implementin thene) system. ;rominent amon these orders )ere the follo)in iss"ances%

1. ?epartment Order 3o. (A, proidin for additional "idelines on the trainin, testin, certification and deployment of performinartists.

2. ?epartment Order 3o. (!, pertainin to the Artist Record !oo &AR!' reH"irement, )hich co"ld be processed only after the artistco"ld sho) proof of academic and si lls trainin and has passed the reH"ired tests.

/







As to the other proisions of ?epartment Order 3o. H"estioned by petitioners, there is nothin )ron )ith the reH"irement for doc"mentand booin confirmation &?.O. (C', a minim"m salary scale &?.O. (E', or the reH"irement for reistration of ret"rnin performers. ThereH"irement for a en"e certificate or other doc"ments eidencin the place and nat"re of )or allo)s the oernment closer monitorin offorein employers and helps eep o"r entertainers a)ay from prostit"tion fronts and other )orsites associated )ith "nsaory, immoral,illeal or e@ploitatie practices. ;arenthetically, none of these iss"ances appear een remotely "nreasonable or arbitrary. They address afelt need of accordin reater protection for an oft(e@ploited sement of o"r OC6:s. They respond to the ind"stry:s demand for clearer and

more practicable r"les and "idelines. On the )hole, they are aimed at enhancin the safety and sec"rity of entertainers and artists bo"ndfor +apan and other destinations, )itho"t stiflin the ind"stry:s concerns for e@pansion and ro)th.

Apart from the 5tate:s police po)er, the Constit"tion itself mandates oernment to e@tend the f"llest protection to o"r oerseas )orers. The basic constit"tional statement on labor, embodied in 5ection 1- of Article $$ of the Constit"tion proides%

5ec. 1-. The 5tate affirms labor as a primary social economic force. $t shall protect the rihts of )orers and promote their )elfare.

More emphatically, the social "stice proision on labor of the 1-7 Constit"tion in its first pararaph states% The 5tate shall afford f"llprotection to labor, local and oerseas, oranied and "noranied and promote f"ll employment and eH"ality of employment opport"nitiesfor all.>

Fnder the )elfare and social "stice proisions of the Constit"tion, the promotion of f"ll employment, )hile desirable, cannot tae abacseat to the oernment:s constit"tional d"ty to proide mechanisms for the protection of o"r )orforce, local or oerseas.

A profession, trade or callin is a property riht )ithin the meanin of o"r constit"tional "arantees. One cannot be depried of the riht to )or and the riht to mae a l iin beca"se these rihts are property rihts, the arbitrary and "n)arranted depriation of )hich normallyconstit"tes an actionable )ron.I12J

3eertheless, no riht is absol"te, and the proper re"lation of a profession, callin, b"siness or trade has al)ays been "pheld as aleitimate s"bect of a alid e@ercise of the police po)er by the state partic"larly )hen their cond"ct affects either the e@ec"tion of leitimateoernmental f"nctions, the preseration of the 5tate, the p"blic health and )elfare and p"blic morals.

ASOCIACION DE AGRICULTORES DE TALISAY7SILAY, INC. v. TALISAY7SILAY MILLING CO., INC.G.R. No. L719935. "&u#2 19, 1959

REUBLIC v. "ERNANDE;

G. R. No. L7413+. "&u#2 19, 1959

$n a class s"it, plaintiffs ;A3TER5 and their laborer so"ht the benefits of the increased sharin participation prescribed by Rep"blic Act3o. -< &5"ar Act of 1/2' for crop year 1/2(1/ and for eery year thereafter, predicated on the claim that a maority of the ;A3TER5had no millin contracts )ith the CE3TRA0 or, in the alternatie, in the eent that the co"rt sho"ld r"le that the sharin proportionsprescribed by Rep"blic Act -< )as not applicable to the district, the increased sharin participation ranted by defendant CE3TRA incontracts entered into )ith eiht planters in 1/4 sho"ld be declared applicable to them startin from crop year 1/4(1// and eery yearthereafter p"rs"ant to the proisions of millin contracts bet)een ;A3TER5 and the CE3TRA since the year 12<(121 )herein theCE3TRA bo"nd itself to ie all planters hain contracts )ith it the hihest rate of participation it )o"ld eer ie to any planter &a sort of amost(faored planter cla"se'. After findin the 5"ar Act constit"tional and applicable to the plaintiffs and )itho"t passin "pon plaintiff:salternatie ca"se of action, the trial co"rt ranted the main reliefs prayed for in the complaint and denied all co"nterclaims of the defendantCE3TRA. The CE3TRA appealed. $t H"estioned the trial "de:s hain enaed the serices of the ;A3TER5: co"nsel as his o)nla)yer0 assailed the constit"tionality of Rep"blic Act -<0 and assined as errors the findins that a maority of the ;A3TER5 had millin

contracts )ith it and that Rep"blic Act -< )as applicable een to ;A3TER5 )ho had millin contracts.The 5"preme Co"rt held that it )ill not inalidate and set aside the trial "de:s "dment despite his hain enaed ;A3TER5: co"nselas his o)n la)yer, beca"se the records sho) that ;A3TER5: opponent for not been depried of a fair and impartial trial. The 8ih Trib"nal"pheld the constit"tionality of Rep"blic Act -< on the ro"nd that it )as a social "stice and police po)er meas"re for the promotion of laborconditions in s"ar plantations, hence, )hateer rational deree of constraint it e@erts on freedom of contract and e@istin contract"alobliations is constit"tionally permissible. $t f"rther fo"nd that maority of the ;A3TER5 had millin contracts )ith the CE3TRA, hence thesharin proportions prescribed in 5ection 1 of Rep"blic Act -< )as not applicable to them, b"t r"led that the hiher sharin participationranted by the CE3TRA to eiht planters in 1/4 )as applicable to plaintiffs ;A3TER5 p"rs"ant to the most(faored planter cla"secontained in millin contracts bet)een ;lanters and the Central since crop year 12<(121, and the reference point in determinin the ratioof sharin amon the CE3TRA, the ;A3TER5 and the latter:s laborers is the proision of 5ection of Rep"blic Act -< &)hich allots *<N

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of the proceeds of any increase in the participation ranted the planters aboe their present share', in con"nction )ith the effect of the most(faored planter cla"se.

ASUNCION BROS. < CO., INC. v. CIRG.R. No. L7391+. !u'2 45, 1988NARASA, !:

"#$ts%

As"ncion !ros. Co., $nc. and +ose As"ncion )ere chared )ith "nfair labor practice in the C.$.R. by the Co"rt ;rosec"tor, on complaintof certain of their employees and the latter:s labor oraniation, the As"ncion !ros. 6oodcraft Employees and aborers Fnion. Thecomplaint s"bstantially alleed that beca"se the indiid"al complainants had oranied a labor oraniation )hich later affiliated itself )iththe ;hilippine Transport and #eneral 6orers Oraniation &;T#6O' the company, thr" its eneral manaer, +ose As"ncion, had made themembers )or on rotation basis and eent"ally dismissed them on ario"s dates.

$n their ans)er, the petitioners denied the acc"sation0 they claimed that the rotation of )orers )as resorted to on acco"nt ofcirc"mstances beyond their control, not the least of )hich )as the systematic> acts of the complainants: absentin themseles at )ill,reportin late, and moonlihtin> )ith other firms.

The 8earin E@aminer fo"nd petitioners "ilty as chared and recommended that since respondent b"siness firm is only a small andro)in b"siness entity )hich may not be in a position to immediately implement a ret"rn to )or order of complainants, the reinstatementm"st be rad"al to minimie the idea of economic dislocation by interatin a labor force that it cannot possibly absorb. This may bearraned by, say, 2 complainants eery month, dependin on the need and e@iency of the b"siness. And considerin f"rther the precario"ssit"ation that may ens"e beca"se of anticipated a)ard of h"e amo"nt of damaes, )hich )ill eat "p the assets of the respondents b"sinessand since some of the complainants hae fo"nd cas"al or temporary employment else)here, the amo"nt of bac()aes be limited to aperiod of * months comp"ted at the rate of the employees )ere enoyin at the time of their dismissal.

Issu&%

6O3 the C.$.R. lost "risdiction of the case on prom"lation of the abor Code &;? 442' on May 1, 174

H&'(%

The iss"e is ro"nded on Article - of the Code proidin that All cases pendin before the Co"rt of $nd"strial Relations and the3ational abor Relations Commission established "nder ;residential ?ecree 3o. 21 at the time of the passage of this Code sho"ld betransferred to and processed by the 3ational abor Relations Commission created "nder this Code in accordance )ith the proced"re laiddo)n herein.> The petitioners set the passage of the Code at May 1, 174 and ar"e that the C.$.R. had already lost "risdiction by the time itrendered "dment on +"ne 27, 174. The point is not )ell taen.

6hile it is tr"e that the abor Code )as prom"lated on May 1, 174, it e@pressly proided that its effectiity )o"ld commence si@months thereafter, or on 3oember 1, 174. Moreoer, Article - relied "pon by the petitioners )as amended by ;? /7<(A by inter alia chanin the )or %passage% to %effectivity.% The amendment made the proision read as follo)s% All cases. pendin before the Co"rt of$nd"strial Relations and the 3ational abor Relations Commission established "nder ;residential ?ecree 3o. 21 on the date of effectivity ofthis Code shall be transferred to and processed by the correspondin labor relations diision of the reional labor office, the !"rea" of aborRelations or the 3ational abor Relations Commission created "nder this Code hain coniance of the same in accordance )ith theproced"re laid do)n herein, and implementin r"les and re"lations.>

And the date of effectiity of the Code, fi@ed at 3oember 1, 174, as aboe stated, )as reaffirmed by ;? /7<(A. 6There can be no do"btthat the abor Co"rt still had "risdiction of the case at the time it rendered its "dment on +"ne 27, 174.

The error of the abor Co"rt lies in its omission to tae acco"nt of releant eidence on record and the H"ite material fact that theemployees and their "nion had completely disrearded the rieance proced"re set forth in their collectie barainin areement )ith thepetitioner company.

The Co"rt a &!o inored the eidence ien by t)o impartial )itnesses% #ilbert T"mlos personnel manaer of ;ermaline and E"staH"ioPerr, manaer of Pa)ayan 6oodcraft, )ho both testified to the employment of a maority of the complainants in their respectie firms. Theirs)orn declarations are f"lly corroboratie and confirmatory of the testimony of the petitioners: )itnesses, as )ell as the doc"ments listin the

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names of those )orers )hose employment had been terminated, the specific infractions of company r"les constit"tin the respectieca"ses therefor, and the dates of the commission of said infractions. 3o reason is ien by the Co"rt for ref"sin to tae acco"nt of s"chmaterial proofs, and none in tr"th appears on record to "stify it. The eidence satisfactorily establishes the petitioners: claim that their

)oodcraft plant 44 operates "nder an interated assembly fine system &I)hereJ assinments Iare interated% e..J pattern, c"ttin, carin,lathe machine, disc sandin, spindle sandin, dr"m sandin, arnishin and finishin, pacin'. 9ail"re of one "nit or set of )orers toperform in time its assined f"nctions hampers the )hole operation and )ill ca"se stoppae of )or, to the damae and pre"dice of theenterprise, a small and b"ddin one at that.> The record th"s contains adeH"ate eidentiary fo"ndation for the dismissal of the complainants

from employment, a circ"mstance that at the time constit"tes pers"asie ref"tation of the theory that said complainants )ere fired simplybeca"se of their "nion actiities.

9"rther disclosed by the record is the disreard by the complainant employees and their "nion of the rieance proced"re prescribed intheir collectie barainin areement )ith the employer, dated 9ebr"ary 1, 1*. 11Article Q$$ of that areement states that K

$n the eent that rieances or differences arise bet)een the Fnion and the Company or bet)een a )orer or ro"p of )orers on the onehand and the Company on the other, as reards the application, implementation of this areement, or other differences )hich any of theparties desire to resole, the Company and the Fnion shall tae immediate steps to settle the difference in the follo)in manner%

1. A rieance committee composed of fo"r &4' members shall be created, t)o &2' of )hich shall come from the Company and theother t)o &2' from the Fnion. Any rieance shall be resoled by the said committee )ithin t)o &2' days after the rieance iss"bmitted to them.

2. $n case of disareement, parties aree to s"bmit the differences to the !"rea" of abor Relations, ?epartment of abor, forresol"tion.

. $f it cannot be resoled by the !"rea" of abor Relations, then the case may be s"bmitted to an arbitrator areed "pon by both theCompany and the Fnion )hose decision shall be final and "nappealable.

4. $f ho)eer the parties cannot aree to arbitration, then the same shall be considered as a labor disp"te.>

3o reason )hateer is ien by the Fnion and the other complainants for inorin this proced"re for the settlement of their rieancerelatin to their )or rotation )hich, as petitioners hae pointed o"t, co"ld hae been easily threshed o"t in the #rieance Committee, ortheir s"bseH"ent dismissal from their employment. There is nothin in the record )arrantin condemnation of the petitioners for "nfair laborpractice in hain terminated the employment of the complainants, s"ch termination of )or bein, on the contrary, "stified by the materialcirc"mstances.

NB v. CABANSAGG.R. No. 151. !u*& 41, 4ANGANIBAN, !.

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$n late 1-, 9lorence Cabansa arried in 5inapore as a to"rist. 5he applied for employment, )ith the 5inapore !ranch of the;hilippine 3ational !an, a priate banin corporation oranied and e@istin "nder the la)s of the ;hilippines, )ith principal offices at the;3! 9inancial Center, Ro@as !o"leard, Manila. At the time, the 5inapore ;3! !ranch )as "nder the helm of R"ben C. Tobias, a la)yer,as #eneral Manaer, )ith the ran of Dice(;resident of the !an. At the time, too, the !ranch Office had 2 types of employees% &a'e@patriates or the re"lar employees, hired in Manila and assined abroad incl"din 5inapore, and &b' locally &direct' hired. 5he applied foremployment as !ranch Credit Officer, at a total monthly pacae of 5#4,/<<.<<, effectie "pon ass"mption of d"ties after approal. R"benC. Tobias fo"nd her eminently H"alified and )rote on October 2*, 1-, a letter to the ;resident of the !an in Manila, recommendin theappointment of 9lorence O. Cabansa, for the position.

The ;resident of the !an )as impressed )ith the credentials of 9lorence O. Cabansa that he approed the recommendation of R"ben

C. Tobias. 5he then filed an Application,: )ith the Ministry of Manpo)er of the #oernment of 5inapore, for the iss"ance of an Employment;ass: as an employee of the 5inapore ;3! !ranch. 8er application )as approed for a period of 2 years.

R"ben C. Tobias )rote a letter to 9lorence O. Cabansa offerin her a temporary appointment, as Credit Officer, at a basic salary of5inapore ?ollars 4,/<<.<<, a month and, "pon her s"ccessf"l completion of her probation to be determined solely, by the !an, she may bee@tended at the discretion of the !an, a permanent appointment and that her temporary appointment )as s"bect to the follo)in terms andconditions%

1. Bo" )ill be on probation for a period of three &' consec"tie months from the date of yo"r ass"mption of d"ty.2. Bo" )ill obsere the !an:s r"les and re"lations and those that may be adopted from time to time.. Bo" )ill eep in strictest confidence all matters related to transactions bet)een the !an and its clients.4. Bo" )ill deote yo"r f"ll time d"rin b"siness ho"rs in promotin the b"siness and interest of the !an.




/. Bo" )ill not, )itho"t prior )ritten consent of the !an, be employed in any)ay for any p"rpose )hatsoeer o"tside b"siness ho"rsby any person, firm or company.

*. Termination of yo"r employment )ith the !an may be made by either party after notice of one &1' day in )ritin d"rin probation,one month notice "pon confirmation or the eH"ialent of one &1' day:s or month:s salary in lie" of notice.>

9lorence O. Cabansa accepted the position and ass"med office. !arely months in office, 9lorence O. Cabansa s"bmitted to R"ben C.Tobias, on March , 1, her initial ;erformance Report.: R"ben C. Tobias )as so impressed )ith the Report: that he made a notation and,

on said Report:% #OO? 6ORP.: 8o)eer, in the eenin of April 14, 1, )hile 9lorence O. Cabansa )as in the flat, )hich she andCecilia AH"ino, the Assistant Dice(;resident and ?ep"ty #eneral Manaer of the !ranch and Rosanna 5armiento, the Chief ?ealer of thesaid !ranch, rented, she )as told by the 2 that R"ben C. Tobias has ased them to tell 9lorence O. Cabansa to resin from her ob.9lorence O. Cabansa )as perple@ed at the s"dden t"rn of eents and the r"nabo"t )ay R"ben C. Tobias proc"red her resination from the!an. The ne@t day, 9lorence O. Cabansa taled to R"ben C. Tobias and inH"ired if )hat Cecilia AH"ino and Rosanna 5armiento had toldher )as tr"e. R"ben C. Tobias confirmed the eracity of the information, )ith the e@planation that her resination )as imperatie as a cost(c"ttin meas"re: of the !an. R"ben C. Tobias, lie)ise, told 9lorence O. Cabansa that the ;3! 5inapore !ranch )ill be sold ortransformed into a remittance office and that, in either )ay, 9lorence O. Cabansa had to resin from her employment. The more 9lorenceO. Cabansa )as perple@ed. 5he then ased R"ben C. Tobias that she be f"rnished )ith a 9ormal Adice: from the ;3! 8ead Office inManila. 8o)eer, R"ben C. Tobias flatly ref"sed. 9lorence O. Cabansa did not s"bmit any letter of resination.

R"ben C. Tobias aain s"mmoned 9lorence O. Cabansa to his office and demanded that she s"bmit her letter of resination, )ith theprete@t that he needed a Chinese(speain Credit Officer to penetrate the local maret, )ith the information that a Chinese(speain CreditOfficer had already been hired and )ill be reportin for )or soon. 5he )as )arned that, "nless she s"bmitted her letter of resination, heremployment record )ill be blemished )ith the notation ?$5M$55E?: spread thereon. 6itho"t iin any definitie ans)er, 9lorence O.Cabansa ased R"ben C. Tobias that she be ien s"fficient time to loo for another ob. R"ben C. Tobias told her that she sho"ld be o"t:of her employment by May 1/, 1.

8o)eer, on April 1, 1, R"ben C. Tobias aain s"mmoned 9lorence O. Cabansa and adamantly ordered her to s"bmit her letter ofresination. 5he ref"sed. On April 2<, 1, she receied a letter from R"ben C. Tobias terminatin her employment )ith the !an.

Issu&s%

1. 6O3 the arbitration branch of the 3RC in the 3ational Capital Reion has "risdiction oer the instant controersy02. 6O3 the arbitration of the 3RC in the 3ational Capital Reion is the most conenient en"e or for"m to hear and decide the

instant controersy0 and. 6O3 the respondent )as illeally dismissed, and therefore, entitled to recoer moral and e@emplary damaes and attorney:s fees

H&'(%

The "risdiction of labor arbiters and the 3RC is specified in Article 217 of the abor Code as follo)s%ART. 217. +"risdiction of abor Arbiters and the Commission. G &a' E@cept as other)ise proided "nder this Code the abor Arbiters shallhae oriinal and e@cl"sie "risdiction to hear and decide, )ithin thirty &<' calendar days after the s"bmission of the case by the parties fordecision )itho"t e@tension, een in the absence of stenoraphic notes, the follo)in cases inolin all )orers, )hether aric"lt"ral or non(aric"lt"ral%

1. Fnfair labor practice cases02. Termination disp"tes0. $f accompanied )ith a claim for reinstatement, those cases that )orers may file inolin )ae, rates of pay, ho"rs of )or and

other terms and conditions of employment4. Claims for act"al, moral, e@emplary and other forms of damaes arisin from the employer(employee relations0

/. Cases arisin from any iolation of Article 2*4 of this Code, incl"din H"estions inolin the leality of stries and loco"ts0 and*. E@cept claims for Employees Compensation, 5ocial 5ec"rity, Medicare and maternity benefits, all other claims, arisin from

employer(employee relations, incl"din those of persons in domestic or ho"sehold serice, inolin an amo"nt of e@ceedin fietho"sand pesos &;/,<<<.<<' reardless of )hether accompanied )ith a claim for reinstatement.

&b' The commission shall hae e@cl"sie appellate "risdiction oer all cases decided by abor Arbiters.

More specifically, 5ection 1< of RA -<42 reads in part%5ECT$O3 1<. 'oney #laims. K 3ot)ithstandin any proision of la) to the contrary, the abor Arbiters of the 3ational abor Relations

Commission &3RC' shall hae the oriinal and e@cl"sie "risdiction to hear and decide, )ithin ninety &<' calendar days after the filin ofthe complaint, the claims arisin o"t of an employer(employee relationship or by irt"e of any la) or contract inolin 9ilipino )orers foroerseas deployment incl"din claims for act"al, moral, e@emplary and other forms of damaes.

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labor arbiters clearly hae original and e(cl!sive "risdiction oer claims arisin from employer(employee relations, incl"din terminationdisp!tes inolin all )orers, amon )hom are oerseas 9ilipino )orers &O96'.

Respondent )as directly hired, )hile on a to"rist stat"s in 5inapore, by the ;3! branch in that city state. ;rior to employin respondent,petitioner had to obtain an employment pass for her from the 5inapore Ministry of Manpo)er. 5ec"rin the pass )as a re"latoryreH"irement p"rs"ant to the immiration re"lations of that co"ntry.

The ;hilippine oernment reH"ires non(9ilipinos )orin in the co"ntry to first obtain a local )or permit in order to be leally employedhere. That permit, ho)eer, does not a"tomatically mean that the non(citien is thereby bo"nd by local la)s only, as aerred by petitioner. $tdoes not at all imply a )aier of one:s national la)s on labor. Absent any clear and conincin eidence to the contrary, s"ch permit simplymeans that its holder has a leal stat"s as a )orer in the iss"in co"ntry.

a branch office in 5inapore. 5inificantly, respondent:s employment by the 5inapore branch office had to be approed by !enamin ;.;alma #il, the president of the ban )hose principal offices )ere in Manila. This circ"mstance militates aainst petitioner:s contention thatrespondent )as locally hired>0 and totally oerned by and s"bect to the la)s, common practices and c"stoms> of 5inapore, not of the;hilippines. $nstead, )ith more reason does this fact reinforce the pres"mption that respondent falls "nder the leal definition of migrant wor$er , in this case one deployed in 5inapore. 8ence, petitioner cannot escape the application of ;hilippine la)s or the "risdiction of the3RC and the labor arbiter.

6hether employed locally or oerseas, all 9ilipino )orers enoy the protectie mantle of ;hilippine labor and social leislation, contractstip"lations to the contrary not)ithstandin. This prono"ncement is in eepin )ith the basic p"blic policy of the 5tate to afford protection tolabor, promote f"ll employment, ens"re eH"al )or opport"nities reardless of se@, race or creed, and re"late the relations bet)een

)orers and employers.

5ection 1&a' of R"le $D of the 3RC R"les of ;roced"re reads%

5ection 1. Ven!e G &a' All cases )hich abor Arbiters hae a"thority to hear and decide may be filed in the Reional Arbitration !ranchhain "risdiction oer the )orplace of the complainant=petitioner0 ;roided, ho)eer that cases of Oerseas 9ilipino 6orer &O96' shallbe filed before the Reional Arbitration !ranch )here the complainant resides or )here the principal office of the respondent=employer issit"ated, at the option of the complainant.

9or p"rposes of en"e, )orplace shall be "nderstood as the place or locality )here the employee is re"larly assined )hen the ca"se ofaction arose. $t shall incl"de the place )here the employee is s"pposed to report bac after a temporary detail, assinment or trael. $n the

case of field employees, as )ell as amb"lant or itinerant )orers, their )orplace is )here they are re"larly assined, or )here they ares"pposed to re"larly receie their salaries=)aes or )or instr"ctions from, and report the res"lts of their assinment to their employers.>

Fnder the Mirant 6orers and Oerseas 9ilipinos Act of 1/> &RA -<42', a migrant wor$er >refers to a person )ho is to be enaed, isenaed or has been enaed in a rem"nerated actiity in a state of )hich he or she is not a leal resident0 to be "sed interchaneably )ithoerseas 9ilipino )orer.> Fndeniably, respondent )as employed by petitioner in its branch office in 5inapore. Admittedly, she is a 9ilipinoand not a leal resident of that state. 5he th"s falls )ithin the cateory of mirant )orer> or oerseas 9i lipino )orer.>

As s"ch, it is her option to choose the en"e of her Complaint aainst petitioner for illeal dismissal. The la) ies her t)o choices% &1' atthe Reional Arbitration !ranch &RA!' )here she resides or &2' at the RA! )here the principal office of her employer is sit"ated. 5ince herdismissal by petitioner, respondent has ret"rned to the ;hilippines (( specifically to her residence at 9ilinest $$, "eon City. Th"s, in filinher Complaint before the RA! office in "eon City, she has made a alid choice of proper en"e.

Respondent )as already a re"lar employee at the time of her dismissal, beca"se her three(month probationary period of employmenthad already ended. This r"lin is in accordance )ith Article 2-1 of the abor Code% An employee )ho is allo)ed to )or after a probationaryperiod shall be considered a re"lar employee.> $ndeed, petitioner reconied respondent as s"ch at the time it dismissed her, by iin herone month:s salary in lie" of a one(month notice, consistent )ith proision 3o. * of her employment Contract.

As a re"lar employee, respondent )as entitled to all rihts, benefits and priilees proided "nder o"r labor la)s. One of her f"ndamentalrihts is that she may not be dismissed )itho"t d"e process of la). The t)in reH"irements of notice and hearin constit"te the essentialelements of proced"ral d"e process, and neither of these elements can be eliminated )itho"t r"nnin afo"l of the constit"tional "arantee.

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$n dismissin employees, the employer m"st f"rnish them t)o )ritten notices% 1' one to apprise them of the partic"lar acts or omissions for )hich their dismissal is so"ht0 and 2' the other to inform them of the decision to dismiss them. As to the reH"irement of a hearin, itsessence lies simply in the opport"nity to be heard.

Respondent )as not notified of the specific act or omission for )hich her dismissal )as bein so"ht. 3either )as she ien any chanceto be heard, as reH"ired by la). At any rate, een if she )ere ien the opport"nity to be heard, she co"ld not hae defended herselfeffectiely, for she ne) no ca"se to ans)er to. All that petitioner tendered to respondent )as a notice of her employment termination

effectie the ery same day, toether )ith the eH"ialent of a one(month pay. This Co"rt has already held that nothin in the la) ies anemployer the option to s"bstit"te the reH"ired prior notice and opport"nity to be heard )ith the mere payment of < days: salary.

The employer shall be sanctioned for noncompliance )ith the reH"irements of, or for fail"re to obsere, d"e process that m"st beobsered in dismissin an employee.

Moreoer, Articles 2-2, 2- and 2-4 of the abor Code proide the alid ro"nds or ca"ses for an employee:s dismissal. The employerhas the b"rden of proin that it )as done for any of those "st or a"thoried ca"ses. The fail"re to dischare this b"rden means that thedismissal )as not "stified, and that the employee is entitled to reinstatement and bac )aes.

;etitioner has not asserted any of the ro"nds proided by la) as a alid reason for terminatin the employment of respondent. $t merelyinsists that her dismissal )as alidly effected p"rs"ant to the proisions of her employment Contract, )hich she had ol"ntarily areed to bebo"nd to.

GLOBE7MAC:AY CABLE AND RADIO COR. v. NLRCG.R. No. 8411. M#$ 3, 1994ROMERO, !.

"#$ts%

$n May 1-2, priate respondent )as employed by #lobe(Macay Cable and Radio Corporation &#MCR' as eneral systems analyst. Alsoemployed by petitioner as manaer for technical operations: s"pport )as ?elfin 5aldiar )ith )hom priate respondent )as alleedly eryclose.

5ometime in 1-4, petitioner #MCR, prompted by reports that company eH"ipment and spare parts )orth tho"sands of dollars "nder thec"stody of 5aldiar )ere missin, ca"sed the inestiation of the latter:s actiities. The report dated 5eptember 2/, 1-4 prepared by the

company:s internal a"ditor, Mr. A"stin Maramara, indicated that 5aldiar had entered into a partnership styled Concae Commercial and$nd"strial Company )ith Richard A. Bambao, o)ner and manaer of Elecon Enineerin 5erices &Elecon', a s"pplier of petitioner oftenrecommended by 5aldiar. The report also disclosed that 5aldiar had taen petitioner:s missin 9edders airconditionin "nit for his o)npersonal "se )itho"t a"thoriation and also connied )ith Bambao to defra"d petitioner of its property. The airconditioner )as recoeredonly after petitioner #MCR filed an action for replein aainst 5aldiar.

$t lie)ise appeared in the co"rse of Maramara:s inestiation that $melda 5alaar iolated company re"lations by inolin herself intransactions conflictin )ith the company:s interests. Eidence sho)ed that she sined as a )itness to the articles of partnership bet)eenBambao and 5aldiar. $t also appeared that she had f"ll no)lede of the loss and )hereabo"ts of the 9edders airconditioner b"t failed toinform her employer.

ConseH"ently, in a letter dated October -, 1-4, petitioner company placed priate respondent 5alaar "nder preentie s"spension for 1month, effectie October , 1-4, th"s iin her < days )ithin )hich to, e@plain her side. !"t instead of s"bmittin an e@planations days

later or on October 12, 1-4 priate respondent filed a complaint aainst petitioner for illeal s"spension, )hich she s"bseH"ently amendedto incl"de illeal dismissal, acation and sic leae benefits, 1th month pay and damaes, after petitioner notified her in )ritin that effectie3oember -, 1-4, she )as considered dismissed in ie) of her inability to ref"te and disproe these findins.

Issu&%

6O3 the abor Trib"nal for hain committed rae ab"se of discretion in holdin that the s"spension and s"bseH"ent dismissal ofpriate respondent )ere illeal and in orderin her reinstatement )ith 2 years: bac)aes

H&'(%

12




The inestiatie findins of Mr. Maramara, )hich pointed to ?elfin 5aldiar:s acts in conflict )ith his position as technical operationsmanaer, necessitated immediate and decisie action on any employee closely, associated )ith 5aldiar. The s"spension of 5alaar )asf"rther impelled by the discoery of the missin 9edders airconditionin "nit inside the apartment priate respondent shared )ith 5aldiar.Fnder s"ch circ"mstances, preentie s"spension )as the proper remedial reco"rse aailable to the company pendin 5alaar:sinestiation. !y itself, preentie s"spension does, not sinify that the company has ad"ded the employee "ilty of the chares she )asased to ans)er and e@plain. 5"ch disciplinary meas"re is resorted to for the protection of the company:s property pendin inestiation anyalleed malfeasance or misfeasance committed by the employee.

6hile the Co"rt areed )ith the propriety of 5alaar:s preentie s"spension, it held that her eent"al separation from employment )asnot for ca"se.

6hat is the remedy in la) to rectify an "nla)f"l dismissal so as to mae )hole> the ictim )ho has not merely lost her ob )hich, "ndersettled +"rispr"dence, is a property riht of )hich a person is not to be depried )itho"t d"e process, b"t also the compensation that sho"ldhae accr"ed to her d"rin the period )hen she )as "nemployedL

Art. 27 of the abor Code, as amended, proides%

Sec!rity of )en!re. K $n cases of re"lar employment, the employer shall not terminate the serices of an employee e@cept for a "stca"se or )hen a"thoried by this Title. An employee )ho is "n"stly dismissed from )or shall be entitled to reinstatement )itho"t loss ofseniority rihts and other priilees and to his f"ll bac)aes, incl"sie of allo)ances, and to his other benefits or their monetary eH"ialentcomp"ted from the time his compensation )as )ithheld from him "p to the time of his act"al reinstatement.

Corollary thereto are the follo)in proisions of the $mplementin R"les and Re"lations of the abor Code%

5ec. 2. Sec!rity of )en!re. K $n cases of re"lar employments, the employer shall not terminate the serices of an employee e@cept for a "st ca"se as proided in the abor Code or )hen a"thoried by e@istin la)s.

5ec. . Reinstatement . K An employee )ho is "n"stly dismissed from )or shall by entitled to reinstatement )itho"t loss of seniorityrihts and to bac)aes.>

There bein no eidence to sho) an a"thoried, m"ch less a leal, ca"se for the dismissal of priate respondent, she had eery riht, notonly to be entitled to reinstatement, b"t ay )ell, to f"ll bac)aes.

The intendment of the la) in prescribin the t)in remedies of reinstatement and payment of bac)aes is, in the former, to restore the

dismissed employee to her stat"s before she lost her ob.

The follo)in reasons hae been adanced by the Co"rt for denyin reinstatement "nder the facts of the case and the la) applicablethereto0 that reinstatement can no loner be effected in ie) of the lon passae of time &22 years of litiation' or beca"se of the realities ofthe sit"ation0 or that it )o"ld be inimical to the employer:s interest0 or that reinstatement may no loner be feasible0 or, that it )ill not serethe best interests of the parties inoled0 or that the company )o"ld be pre"diced by the )orers: contin"ed employment0 or that it )ill notsere any pr"dent p"rpose as )hen s"perenin facts hae transpired )hich mae e@ec"tion on that score "n"st or ineH"itable or, to anincreasin e@tent, d"e to the res"ltant atmosphere of antipathy and antaonism> or strained relations> or irretrieable estranement>bet)een the employer and the employee.

$n lie" of reinstatement, the Co"rt has ario"sly ordered the payment of bac)aes and separation pay or solely separation pay.

On strained relations bet)een the employer and the employee as a ro"nd% $t sho"ld be proed that the employee concerned occ"pies a

position )here he enoys the tr"st and confidence of his employer0 and that it is liely that if reinstated, an atmosphere of antipathy andantaonism may be enerated as to adersely affect the efficiency and prod"ctiity of the employee concerned.

8ere, it has not been proed that the position of priate respondent as systems analyst is one that may be characteried as a position oftr"st and confidence s"ch that if reinstated, it may )ell lead to strained relations bet)een employer and employee. 8ence, this does notconstit"te an e@ception to the eneral r"le mandatin reinstatement for an employee )ho has been "nla)f"lly dismissed.

;etitioner #MCR points o"t that as a matter of company policy, it prohibits its employees from inolin themseles )ith any company thathas b"siness dealins )ith #MCR. ConseH"ently, )hen priate respondent 5alaar sined as a )itness to the partnership papers ofConcae &a s"pplier of Fltra )hich in t"rn is also a s"pplier of #MCR', she )as deemed to hae placed. herself in an "ntenable position asfar as petitioner )as concerned.

1




As a systems analyst, 5alaar )as ery far remoed from operations inolin the proc"rement of s"pplies. 5alaar:s d"ties reoledaro"nd the deelopment of systems and analysis of desins on a contin"in basis. $n other )ords, 5alaar did not occ"py a position of tr"strelatie to the approal and p"rchase of s"pplies and company assets.

To rely on the Maramara report as a basis for 5alaar:s dismissal )o"ld be most iniH"ito"s beca"se the b"l of the findins centeredprincipally oh her friend:s alleed thieery and anomalo"s transactions as technical operations: s"pport manaer. 5aid report merely

insin"ated that in ie) of 5alaar:s special relationship )ith 5aldiar, 5alaar miht hae had direct no)lede of 5aldiar:s H"estionableactiities. ?irect eidence implicatin priate respondent is )antin from the records.

$t is also )orth emphasiin that the Maramara report came o"t after 5aldiar had already resined from #MCR on May 1, 1-4. 5ince5aldiar did not hae the opport"nity to ref"te manaement:s findins, the report remained obio"sly one(sided. 5ince the main eidenceobtained by petitioner dealt principally on the alleed c"lpability of 5aldiar, )itho"t his hain had a chance to oice his side in ie) of hisprior resination, strinent e@amination sho"ld hae been carried o"t to ascertain )hether or not there e@isted independent leal ro"nds tohold 5alaar ans)erable as )ell and, thereby, "stify her dismissal. 9indin none, from the records, the Co"rt fo"nd her to hae been"nla)f"lly dismissed.

SANTOS v. EMLOYEES= COMENSATION COMMISSIONG.R. No. 89444. A-)' 5, 1993NOCON, !.

"#$ts%

9rancisco 5antos )as employed as )elder at the ;hilippine 3ay and its 3aal 5hipyard as early as March 22, 1//. 8e spent the last 2years of his life in the oernment serice, the first year as a )elder helper and the last t)o years as shipyard assistant.

On ?ecember 2, 1-*, 9rancisco )as admitted at the 3aal 5tation 8ospital in Caite City, on complaint that he )as hain epiastricpain and been omitin blood 2 days prior to his hospitaliation. 8is case )as dianosed as bleedin ;eptic Flcer disease &;F?',cholelithiasis and diabetes mellit"s. On +an"ary 11, 1-7, he died, the ca"se of )hich as indicated in the ?eath Certificate )as liercirrhosis.

Mrs. Carmen A. 5antos filed a claim for the death benefit of her h"sband, 9rancisco, on +an"ary 2-, 1-7, p"rs"ant to ;residential ?ecree3o. *2*, as amended. 8o)eer, on a letter dated April <, 1-7, the #oernment 5erice $ns"rance 5ystem &#5$5', denied the claim on the

ro"nd that "pon proofs and eidence s"bmitted, 9rancisco:s ailment cannot be considered an occ"pational disease as contemplated "nder;.?. *2*, as amended.

Mrs. 5antos then so"ht the assistance of the Commander of 3A5COM, ;3, )ho in t"rn )rote the #5$5 reH"estin for a faorable actionon her claim. 5aid letter also s"bstantiated petitioner:s claim that her h"sband:s d"ties as 5enior 6elder, assined at the 5tr"ct"ral !ranchof the 3aal 5hipb"ildin 9acility, reH"ired him to perform delicate )eldin obs inside compartments of naal essels, lie compartmentationb"l heads0 C$C rooms0 officers and ;O:s H"arters0 f"el, l"be oil and fresh )ater tans, )here he )as e@posed to heat and inhalation ofb"rnin chemical s"bstances and as f"mes comin from b"rnin )eldin electrodes.

?espite s"ch endorsement, petitioner:s motion for reconsideration )as lie)ise denied, "pon claim of the #5$5 that 9rancisco:s ob as a )elder )o"ld instead ca"se l"n disease rather than lier cirrhosis.

Issu&%

$s lier cirrhosis an illness )hich is compensableL

H&'(%

The la) defines $o0-&*s#'& s)$>*&ss as any illness definitely accepted as occ"pational disease listed by the Commission, or anyillness ca"sed by employment s"bect to proof that the ris of contractin the same is increased by the )orin conditions. 9or sicness andthe res"ltin death of an employee to be compensable, the claimant m"st sho) either% &1' that it is a res"lt of an occ"pational disease listed"nder Anne@ A of the Amended R"les on Employees: Compensation )ith the conditions set therein satisfied0 or &2' if not so listed, that theris of contractin the disease is increased by the )orin conditions.

14




6here the claimant:s illness is not listed in the Table of Occ"pational ?iseases embodied in Anne@ A of the R"les of Employees:Compensation, said claimant m"st positiely proe that the ris of contractin the disease is increased by the )orin conditions.

Cirrhosis of the lier is not listed as an occ"pational disease. 3eertheless, in case of Librea v. Employees’ #ompensation #ommission ,the Co"rt too a liberal stand and based on the eidence presented, prono"nced the said sicness compensable. $n the cited case, a?iision ;hysical Ed"cation 5"perisor, )ho lie)ise spent the last 2 years of his life in p"blic serice )as ad"ded entitled to the benefitsof the ECC, "pon his death d"e to lier cirrhosis.

The ca"se of death of petitioner:s h"sband co"ld ery )ell be related to his preio"s )orin conditions. As a )elder, 9rancisco )ase@posed to heat, as f"mes and chemical s"bstances comin from the b"rnin electrodes ca"sed by )eldin. #enerally, the metal b"rned isiron. $n the co"rse thereof, other compo"nds and o@ides, s"ch as carbon mono@ide, carbon dio@ide, s"lf"r and phosphor"s, may be emittedin the process of )eldin, dependin on the ind of material "sed and e@tent of corrosion of the metal )ored on. These aporied metalsare inhaled by the )elder in the process and sinificantly in this case, 9rancisco had to do )eldin obs )ithin enclosed compartments.

Research sho)s that inestion or inhalation of small amo"nts of iron oer a n"mber of years may lead to siderosis. Ac"te poisonin brinsabo"t circ"latory collapse )hich may occ"r rapidly or be delayed to 4- ho"rs )ith lier fail"re. These are ind"strial haards to )hich9rancisco )as e@posed. And in the lon co"rse of time, 2 years at that, his contin"o"s e@pos"re to b"rned electrodes and chemicalsemitted therefrom )o"ld liely ca"se poisonin and malf"nction of the lier.

?octrine on compensability% The leadin doctrine on compensability is that laid do)n in the case of Raro v. Employees’ #ompensation#ommission, )here this co"rt said There is a )idespread misconception that the poor employee is still arrayed aainst the miht and po)erof his rich corporate employer. 8ence, he m"st be ien all inds of faorable pres"mptions. This is fallacio"s. $t is no) the tr"st f"nd and notthe employer )hich s"ffers if benefits are paid to claimants )ho are not entitled "nder the la). The employer oins the employee in tryin tohae their claims approed. The employer is spared the problem of proin a neatie proposition that the disease )as not ca"sed byemployment.

$t is no) the tr"st f"nd and not the employer )hich s"ffers if benefits are paid to claimants )ho are not entitled "nder the la). Theemployer oins the employee in tryin to hae their claims approed. The employer is spared the problem of proin a neatie propositionthat the disease )as not ca"sed by employment.

Reason behind the doctrine% The 3e) abor Code has abolished the pres"mption of compensability for illness contracted by a )orerd"rin employment. To be entitled to disability benefits, the claimant has to present eidence to proe that his ailment )as the res"lt of, orthe ris of contractin the same )ere araated by )orin conditions or the nat"re of his )or.

6hile the pres"mption of compensability and theory of araation "nder the 6ormen:s Compensation Act may hae been abandoned"nder the ne) abor Code, the liberality of the la) in eneral in faor of the )orin man still preails. The Employees: Compensation Act isbasically a social leislation desined to afford relief to the )orin man and )oman in o"r society.

NATIONAL SUGAR RE"INERIES COR. v. NLRC #*( NBSR SUERISORY UNION, ?ACI@U TUCG.R. No. 11561. M#$ 4+, 1993REGALADO, !.

"#$ts%

3ational 5"ar Refineries Corporation &3A5FRE9CO' operates s"ar refineries located at !"idnon, $loilo and !atanas. The !atanasrefinery )as priatied on April 11, 12 p"rs"ant to ;roclamation 3o. /<. 1 ;riate respondent "nion represents the former s"perisors of

the 3A5FRE9CO !atanas 5"ar Refinery.

;etitioner implemented a +ob Eal"ation &+E' ;roram affectin all employees, from ran(and(file to department heads. The +E ;roram )as desined to rationalied the d"ties and f"nctions of all positions, reestablish leels of responsibility, and reconie both )ae andoperational str"ct"res. +obs )ere raned accordin to effort, responsibility, trainin and )orin conditions and relatie )orth of the ob. As ares"lt, all positions )ere re(eal"ated, and all employees incl"din the members of respondent "nion )ere ranted salary ad"stments andincreases in benefits commens"rate to their act"al d"ties and f"nctions.

9or abo"t ten years prior to the +E ;roram, the members of respondent "nion )ere treated in the same manner as ran(and fileemployees. As s"ch, they "sed to be paid oertime, rest day and holiday pay p"rs"ant to the proisions of Articles -7, and 4 of the aborCode as amended. 6ith the implementation of the +E ;roram, the follo)in ad"stments )ere made% &1' the members of respondent "nion

1/




)ere re(classified "nder leels 5(/ to 5(- )hich are considered manaerial staff for p"rposes of compensation and benefits0 &2' there )as anincrease in basic pay of the aerae of /<N of their basic pay prior to the +E ;roram, )ith the "nion members no) enoyin a )ide ap&;1,2*.<< per month' in basic pay compared to the hihest paid ran(and(file employee0 &' loneity pay )as increased on top ofalinment ad"stments0 &4' they )ere entitled to increased company COA of ;22/.<< per month0 &/' there )as a rant of ;1<<.<<allo)ance for rest day=holiday )or.

T)o years after the implementation of the +E ;roram, specifically on +"ne 2<, 1<, the members of herein respondent "nion filed a

complainant )ith the e@ec"tie labor arbiter for non(payment of oertime, rest day and holiday pay alleedly in iolation of Article 1<< of theabor Code.

Issu&%

6O3 s"perisory employees, as defined in Article 212 &m', !oo D of the abor Code, sho"ld be considered as officers or members ofthe manaerial staff "nder Article -2, !oo $$$ of the same Code, and hence are not entitled to oertime rest day and holiday pay

H&'(%

$t is not disp"ted that the members of respondent "nion are s"perisory employees, as defined employees, as defined "nder Article212&m', !oo D of the abor Code on abor Relations, )hich reads%

&m' Manaerial employee: is one )ho is ested )ith po)ers or preroaties to lay do)n and e@ec"te manaement policies and=or to hire,transfer, s"spend, lay(off, recall, dischared, assin or discipline employees. 5"perisory employees are those )ho, in the interest of theemployer effectiely recommend s"ch manaerial actions if the e@ercise of s"ch a"thority is not merely ro"tinary or clerical in nat"re b"treH"ires the "se of independent "dment. All employees not fallin )ithin any of those aboe definitions are considered ran(and(fileemployees of this !oo.>

;etitioner, ho)eer, aers that for p"rposes of determinin )hether or not the members of respondent "nion are entitled to oertime, rest dayand holiday pay, said employees sho"ld be considered as officers or members of the manaerial staff> as defined "nder Article -2, !oo $$$of the abor Code on 6orin Conditions and Rest ;eriods> and amplified in 5ection 2, R"le $, !oo $$$ of the R"les to $mplement the aborCode, to )it%

Art. -2 #overage. K The proisions of this title shall apply to employees in all establishments and "ndertains )hether for profit or not,b"t not to oernment employees, manaerial employees, field personnel, members of the family of the employer )ho are dependent on himfor s"pport, domestic helpers, persons in the personal serice of another, and )orers )ho are paid by res"lts as determined by the

5ecretary of abor in Appropriate re"lations.>

M#*#g&)#' &0-'o2&&s refer to those )hose primary d"ty consists of the manaement of the establishment in )hich they are employedor of a department or s"bdiision thereof, and to other officers or members of the manaerial staff.

5ec. 2. E(emption. K The proisions of this r"le shall not apply to the follo)in persons if they H"alify for e@emption "nder the condition setforth herein%@@@ @@@ @@@

&b' Manaerial employees, if they meet all of the follo)in conditions, namely%

1. Their primary d"ty consists of the manaement of the establishment in )hich they are employed or of a department or s"bdiisionthereof%

2. They c"stomarily and re"larly direct the )or of t)o or more employees therein%. They hae the a"thority to hire or fire other employees of lo)er ran0 or their s"estions and recommendations as to the hirin

and firin and as to the promotion or any other chane of stat"s of other employees are ien partic"lar )eiht.

&c' Officers or members of a manaerial staff if they perform the follo)in d"ties and responsibilities%

1. The primary d"ty consists of the performance of )or directly related to manaement policies of their employer02. C"stomarily and re"larly e@ercise discretion and independent "dment0. &i' Re"larly and directly assist a proprietor or a manaerial employee )hose primary d"ty consists of the manaement of the

establishment in )hich he is employed or s"bdiision thereof0 or &ii' e@ec"te "nder eneral s"perision )or alon specialied or

1*




technical lines reH"irin special trainin, e@perience, or no)lede0 or &iii' e@ec"te "nder eneral s"perision special assinmentsand tass0 and

4. 6ho do not deote more 2< percent of their ho"rs )ored in a )or()ee to actiities )hich are not directly and closely related tothe performance of the )or described in pararaphs &1', &2', and aboe.>

The H"estion )hether a ien employee is e@empt from the benefits of the la) is a fact"al one dependent on the circ"mstances of thepartic"lar case, $n determinin )hether an employee is )ithin the terms of the stat"tes, the criterion is the character of the )or performed,

rather than the title of the employee:s position.

The +ob Dal"e Contrib"tion 5tatements 7 of the "nion members )ill sho) that these s"perisory employees are "nder the directs"perision of their respectie department s"perintendents and that enerally they assist the latter in plannin, oraniin, staffin, directin,controllin comm"nicatin and in main decisions in attainin the company:s set oals and obecties. These s"perisory employees arelie)ise responsible for the effectie and efficient operation of their respectie departments. More specifically, their d"ties and f"nctionsincl"de, amon others, the follo)in operations )hereby the employee%

1. assists the department s"perintendent in the follo)in%a. plannin of systems and proced"res relatie to department actiities0b. oraniin and sched"lin of )or actiities of the department, )hich incl"des employee shiftin sched"led and mannin

complement0c. decision main by proidin releant information data and other inp"ts0d. attainin the company:s set oals and obecties by iin his f"ll s"pport0e. selectin the appropriate man to handle the ob in the department0 andf. preparin ann"al departmental b"det02. obseres, follo)s and implements company policies at all times and recommends disciplinary action on errin s"bordinates0. trains and "ides s"bordinates on ho) to ass"me responsibilities and become more prod"ctie04. cond"cts semi(ann"al performance eal"ation of his s"bordinates and recommends necessary action for their

deelopment=adancement0/. represents the s"perintendent or the department )hen appointed and a"thoried by the former0*. coordinates and comm"nicates )ith other inter and intra department s"perisors )hen necessary07. recommends disciplinary actions=promotions0-. recommends meas"res to improe )or methods, eH"ipment performance, H"ality of serice and )orin conditions0. sees to it that safety r"les and re"lations and proced"re and are implemented and follo)ed by all 3A5FRE9CO employees,

recommends reisions or modifications to said r"les )hen deemed necessary, and initiates and prepares reports for any obseredabnormality )ithin the refinery0

1<. s"perises the actiities of all personnel "nder him and oes to it that instr"ctions to s"bordinates are properly implemented0 and

11. performs other related tass as may be assined by his immediate s"perior.

The members of respondent "nion dischare d"ties and responsibilities )hich inel"ctably H"alify them as officers or members of themanaerial staff, as defined in 5ection 2, R"le $ !oo $$$ of the aforestated R"les to $mplement the abor Code, i.% &1' their primary d"tyconsists of the performance of )or directly related to manaement policies of their employer0 &2' they c"stomarily and re"larly e@ercisediscretion and independent "dment0 &' they re"larly and directly assist the manaerial employee )hose primary d"ty consist of themanaement of a department of the establishment in )hich they are employed &4' they e@ec"te, "nder eneral s"perision, )or alonspecialied or technical lines reH"irin special trainin, e@perience, or no)lede0 &/' they e@ec"te, "nder eneral s"perision, specialassinments and tass0 and &*' they do not deote more than 2<N of their ho"rs )ored in a )or()ee to actiities )hich are not directlyand clearly related to the performance of their )or hereinbefore described.

The "nion members sho"ld be considered as officers and members of the manaerial staff and are, therefore, e@empt from the coeraeof Article -2. ;erforce, they are not entitled to oertime, rest day and holiday.

BONI"ACIO v. GOERNMENT SERICE INSURANCE SYSTEM M)*)st2 o/ E(u$#t)o* < Cu'tu& #*( EMLOYEES= COMENSATIONCOMMISSIONG.R. No. L76445. D&$&0& 1, 1986"ERNAN, !.

"#$ts%

17




The late o"rdes !onifacio )as a classroom teacher assined to the district of !aamanoc, ?iision of Catand"anes, Ministry ofEd"cation and C"lt"re from A""st, 1*/ "ntil she contracted carcinoma of the breast )ith metastases to the astrointestinal tract and l"ns

)hich ca"sed her death on October /, 17-.

5he "nder)ent radical mastectomy for cancer of the breast in 17. $n 17*, )hen her ailment )as noted to hae metastasied to herabdomen, she s"bmitted herself to an operation no)n as e@ploratory laparotomy in March of the same year. On 5eptember 1, 17-, shecomplained of abdominal pain, abdominal enlarement, omitin, and fail"re to pass stools in spite of la@aties. Fpon operation it )as fo"nd

that her entire astrointestinal tract )as eneloped by carcinoma. ?espite chemotherapy, she died on October /, 17- from carcinoma of thebreast metastatic to astrointestinal tract and l"ns.

Issu&%

6O3 the deceased:s ca"se of death is compensable

H&'(%

3o. A $o0-&*s#'& s)$>*&ss means any illness definitely accepted as an occ"pational disease listed by the Employees CompensationCommission, or any illness ca"sed by employment s"bect to proof by the employee that the ris of contractin the same is increased by

)orin conditions. 9or this p"rpose, the Commission is empo)ered to determine and approe occ"pational diseases and )or(relatedillnesses that may be considered compensable based on pec"liar haards of employment.

Th"s, for the sicness or the res"ltin disability or death to be compensable, the sicness m"st be the res"lt of an accepted occ"pationaldisease fisted by the Employees Compensation Commission IAnne@ A> of the Amended R"les on Employees CompensationJ, or any othersicness ca"sed by employment s"bect to proof by claimant that the ris of contractin the same is increased by )orin conditions.

Carcinoma of the breast )ith metastases to the astrointestinal tract and l"ns is not listed by the Commission as an occ"pationaldisease. As to the metastases to the astrointestinal tract and l"ns the Commission lists s"ch disease as occ"pational only in the follo)inemployment%

cc!pational Diseases *at!re of Employment

1*. Cancer of stomach andother lymphatic and bloodformin essels0 nasalcaity and sin"ses

6ood)orers, )oodprod"cts ind"strycarpenters, loers andemployees in p"lp and

paper mills and ply)oodmills

17. Cancer of the l"ns,lier and brain.

Dinyl chloryde )orers,plastic )orers.

Fnder the 6ormen:s Compensation a), it is not necessary for the claimant to carry the b"rden of proof to establish his case to the pointof demonstration. $t is not necessary to proe that employment )as the sole ca"se of the death or in"ry s"ffered by the employee. $t iss"fficient to sho) that the employment had contrib"ted to the araation or acceleration of s"ch death or ailment. Once the disease hadbeen sho)n to hae arisen in the co"rse of employment, it is pres"med by la), in the absence of s"bstantial eidence to the contrary, that itarose o"t of it.

Fnder the present abor Code, the latit"dinarian or e@pansie application of the 6ormen:s Compensation a) in faor of the employeeor )orer> no loner preails as the b"rden of sho)in proof of ca"sation has shifted bac to the employee partic"larly in cases of sicness

or in"ries )hich are not accepted or listed as occ"pational by the Employees Compensation Commission.

TAADA v. TUERAG.R. No. L76391. A-)' 4+, 198ESCOLIN, !.

"#$ts%

$noin the riht of the people to be informed on matters of p"blic concern as )ell as the principle that la)s to be alid and enforceablem"st be p"blished in the Official #aette, petitioners filed for )rit of mandam"s to compel respondent p"blic officials to p"blish and=or ca"se

1-




to p"blish ario"s presidential decrees, letters of instr"ctions, eneral orders, proclamations, e@ec"tie orders, letters of implementations andadministratie orders.

The 5olicitor #eneral, representin the respondents, moed for the dismissal of the case, contendin that petitioners hae no lealpersonality to brin the instant petition.

Issu&%

6O3 p"blication in the Official #aette is reH"ired before any la) or stat"te becomes alid and enforceable.

H&'(%

Art. 2 of the Ciil Code does not precl"de the reH"irement of p"blication in the Official #aette, een if the la) itself proides for the dateof its effectiity. The clear obect of this proision is to ie the eneral p"blic adeH"ate notice of the ario"s la)s )hich are to re"late theiractions and cond"ct as citiens. 6itho"t s"ch notice and p"blication, there )o"ld be no basis for the application of the ma@im ignoratia legisnominem e(c!sat . $t )o"ld be the heiht of in"stice to p"nish or other)ise b"rden a citien for the transression of a la) )hich he had nonotice )hatsoeer, not een a constr"ctie one.

The ery first cla"se of 5ection 1 of CA *- reads% there shall be p"blished in the Official #aetteS. The )ord shall> therein imposes"pon respondent officials an imperatie d"ty. That d"ty m"st be enforced if the constit"tional riht of the people to be informed on matter ofp"blic concern is to be ien s"bstance and alidity.

The p"blication of presidential iss"ances of p"blic nat"re or of eneral applicability is a reH"irement of d"e process. $t is a r"le of la) thatbefore a person may be bo"nd by la), he m"st first be officially and specifically informed of its contents. The Co"rt declared that presidentialiss"ances of eneral application )hich hae not been p"blished hae no force and effect.

TAADA v. TUERAGR L76391, 49. D&$&0& 1986Cu, !.

"#$ts%

This is a motion for reconsideration of the decision prom"lated on April 24, 1-/. Respondent ar"ed that )hile p"blication )as

necessary as a r"le, it )as not so )hen it )as other)ise> as )hen the decrees themseles declared that they )ere to become effectieimmediately "pon their approal.

Issu&s%

6O3 a distinction be made bet)een la)s of eneral applicability and la)s )hich are not as to their p"blication0 6O3 a p"blication shallbe made in p"blications of eneral circ"lation.

H&'(%

The cla"se "nless it is other)ise proided> refers to the date of effectiity and not to the reH"irement of p"blication itself, )hich cannot inany eent be omitted. This cla"se does not mean that the leislat"re may mae the la) effectie immediately "pon approal, or in any otherdate, )itho"t its preio"s p"blication.

a)s> sho"ld refer to all la)s and not only to those of eneral application, for strictly speain, all la)s relate to the people in eneralalbeit there are some that do not apply to them directly. A la) )itho"t any bearin on the p"blic )o"ld be inalid as an intr"sion of priacy oras class leislation or as an !ltra vires act of the leislat"re. To be alid, the la) m"st inariably affect the p"blic interest ee if it miht bedirectly applicable only to one indiid"al, or some of the people only, and not to the p"blic as a )hole.

All stat"tes, incl"din those of local application and priate la)s, shall be p"blished as a condition for their effectiity, )hich shall bein 1/days after p"blication "nless a different effectiity date is fi@ed by the leislat"re.

;"blication m"st be in f"ll or it is no p"blication at all, since its p"rpose is to inform the p"blic of the content of the la).

1




Article 2 of the Ciil Code proides that p"blication of la)s m"st be made in the Official #aette, and not else)here, as a reH"irement fortheir effectiity. The 5"preme Co"rt is not called "pon to r"le "pon the )isdom of a la) or to repeal or modify it if it finds it impractical.

The p"blication m"st be made forth)ith, or at least as soon as possible.

C#'#'#*g vs. @)'')#0s

GR +58, 4 D&$&0& 19+L#u&', !%

"#$ts%

The 3ational Traffic Commission, in its resol"tion of 17 +"ly 14<, resoled to recommend to the ?irector of ;"blic 6ors and to the5ecretary of ;"blic 6ors and Comm"nications that animal(dra)n ehicles be prohibited from passin alon Rosario 5treet e@tendin from;laa Calderon de la !arca to ?asmarias 5treet, from 7%< a.m. to 12%< p.m. and from 1%< p.m. to /%< p.m.0 and alon Rial Aen"ee@tendin from the railroad crossin at Antipolo 5treet to Echa"e 5treet, from 7 a.m. to 11 p.m., from a period of one year from the date ofthe openin of the Colante !ride to traffic. The Chairman of the 3ational Traffic Commission, on 1- +"ly 14<, recommended to the?irector of ;"blic 6ors the adoption of the meas"re proposed in the resol"tion, in p"rs"ance of the proisions of Common)ealth Act /4-,

)hich a"thories said ?irector of ;"blic 6ors, )ith the approal of the 5ecretary of ;"blic 6ors and Comm"nications, to prom"late r"lesand re"lations to re"late and control the "se of and traffic on national roads. On 2 A""st 14<, the ?irector of ;"blic 6ors, in his firstindorsement to the 5ecretary of ;"blic 6ors and Comm"nications, recommended to the latter the approal of the recommendation madeby the Chairman of the 3ational Traffic Commission, )ith the modification that the closin of Rial Aen"e to traffic to animal(dra)n ehiclesbe limited to the portion thereof e@tendin from the railroad crossin at Antipolo 5treet to Acarraa 5treet. On 1< A""st 14<, the 5ecretaryof ;"blic 6ors and Comm"nications, in his second indorsement addressed to the ?irector of ;"blic 6ors, approed the recommendationof the latter that Rosario 5treet and Rial Aen"e be closed to traffic of animal(dra)n ehicles, bet)een the points and d"rin the ho"rs asindicated, for a period of 1 year from the date of the openin of the Colante !ride to traffic. The Mayor of Manila and the Actin Chief of;olice of Manila hae enforced and ca"sed to be enforced the r"les and re"lations th"s adopted. Ma@imo Calalan, in his capacity as apriate citien and as a ta@payer of Manila, bro"ht before the 5"preme co"rt the petition for a )rit of prohibition aainst A. ?. 6illiams, asChairman of the 3ational Traffic Commission0 Dicente 9raante, as ?irector of ;"blic 6ors0 5erio !ayan, as Actin 5ecretary of ;"blic6ors and Comm"nications0 E"loio Rodri"e, as Mayor of the City of Manila0 and +"an ?omin"e, as Actin Chief of ;olice of Manila.

Issu&%

6O3 the r"les and re"lations prom"lated by the ?irector of ;"blic 6ors infrine "pon the constit"tional precept reardin the

promotion of social "stice to ins"re the )ell(bein and economic sec"rity of all the people.

H&'(%

The promotion of social "stice is to be achieed not thro"h a mistaen sympathy to)ards any ien ro"p. 5ocial "stice is neithercomm"nism, nor despotism, nor atomism, nor anarchy,> b"t the h"maniation of la)s and the eH"aliation of social and economic forces bythe 5tate so that "stice in its rational and obectiely sec"lar conception may at least be appro@imated. 5ocial "stice means the promotionof the )elfare of all the people, the adoption by the #oernment of meas"res calc"lated to ins"re economic stability of all the competentelements of society, thro"h the maintenance of a proper economic and social eH"ilibri"m in the interrelations of the members of thecomm"nity, constit"tionally, thro"h the adoption of meas"res leally "stifiable, or e@tra(constit"tionally, thro"h the e@ercise of po)ers"nderlyin the e@istence of all oernments on the time(honored principle of sal!s pop!li est s!prema le( . 5ocial "stice, therefore, m"st befo"nded on the reconition of the necessity of interdependence amon diers and dierse "nits of a society and of the protection that sho"ldbe eH"ally and eenly e@tended to all ro"ps as a combined force in o"r social and economic life, consistent )ith the f"ndamental and

paramo"nt obectie of the state of promotin the health, comfort, and H"iet of all persons, and of brinin abo"t the reatest ood to thereatest n"mber.>

HILIINE ASSOCIATION O" SERICE EFORTERS, INC. ?ASEI v. TORRESG.R. No. 11459. August 6, 1994GRIO7AUINO, !.

"#$ts%

2<




helpers to 8onon. They are reasonable, alid and "stified "nder the eneral )elfare cla"se of the Constit"tion, since the recr"itment anddeployment b"siness, as it is cond"cted today, is affected )ith p"blic interest.

The alleed taeoer Iof the b"siness of recr"itin and placin 9ilipino domestic helpers in 8ononJ is merely a remedial meas"re, ande@pires after its p"rpose shall hae been attained. This is eident from the tenor of Administratie Order 3o. 1* that recr"itment of 9ilipinodomestic helpers oin to 8onon by priate employment aencies are hereby temporarily s"spended effectie +"ly 1, 11.> Thealleed taeoer is limited in scope, bein confined to recr"itment of domestic helpers oin to 8onon only.

The "stification for the taeoer of the processin and deployin of domestic helpers for 8onon res"ltin from the restriction of thescope of petitioner:s b"siness is confined solely to the "nscr"p"lo"s practice of priate employment aencies ictimiin applicants foremployment as domestic helpers for 8onon and not the )hole recr"itment b"siness in the ;hilippines.

The H"estioned circ"lars are therefore a alid e@ercise of the police po)er as deleated to the e@ec"tie branch of #oernment.

3eertheless, they are leally inalid, defectie and "nenforceable for lac of po)er p"blication and filin in the Office of the 3ationalAdministratie Reister as reH"ired in Article 2 of the Ciil Code, Article / of the abor Code and 5ections &1' and 4, Chapter 2, !oo D$$ ofthe Administratie Code of 1-7 )hich proide%

Art. 2. a)s shall tae effect after fifteen &1/' days follo)in the completion of their p"blication in the Official #aatte, "nless it is other)iseproided.

Art. /. R!les and Reg!lations. K The ?epartment of abor and other oernment aencies chared )ith the administration andenforcement of this Code or any of its parts shall prom"late the necessary implementin r"les and re"lations. 5"ch r"les and re"lationsshall become effectie fifteen &1/' days after anno"ncement of their adoption in ne)spapers of eneral circ"lation.

5ec. . iling. K &1' Eery aency shall file )ith the Fniersity of the ;hilippines a) Center, three &' certified copies of eery r"leadopted by it. R"les in force on the date of effectiity of this Code )hich are not filed )ithin three &' months shall not thereafter be the basisof any sanction aainst any party or persons.

5ec. 4. Effectiity. K $n addition to other r"le(main reH"irements proided by la) not inconsistent )ith this !oo, each r"le shall becomeeffectie fifteen &1/' days from the date of filin as aboe proided "nless a different date is fi@ed by la), or specified in the r"le in cases ofimminent daner to p"blic health, safety and )elfare, the e@istence of )hich m"st be e@pressed in a statement accompanyin the r"le. Theaency shall tae appropriate meas"res to mae emerency r"les no)n to persons )ho may be affected by them.

DELOS SANTOS v. !EBSEN MARITIME, INC.G.R. No. 1+18GARCIA, !.

"#$ts%

+ebsen Maritime, $nc., for and in behalf of Aboiti 5hippin Co. &Aboiti 5hippin, for short', hired petitioner:s h"sband, #il R. ?elos 5antos&hereinafter, ?elos 5antos' as third enineer of MD 6ild $ris. The correspondin contract of employment, as approed by the ;hilippineOerseas Employment Administration &;OEA', )as for a fi@ed period of 1 month and for a specific "ndertain of cond"ctin said essel toand from +apan. $t H"oted ?elos 5antos: basic monthly salary and other monetary benefits in F5 c"rrency. Fnder ;OEA r"les, allemployers and principals are reH"ired to adopt the ;OEA ( standard employment contract &;OEA(5EC' )itho"t pre"dice to their adoption ofterms and conditions oer and aboe the minim"m prescribed by that aency.

On the essel:s ret"rn to the ;hilippines a month after, ?elos 5antos remained on board, respondent hain opted to retain his serices )hile the essel "nder)ent repairs in Ceb". After its repair, MD 6ild $ris, this time renamed=reistered as MD 5"per RoRo 1<<, sailed )ithindomestic )aters, hain been mean)hile iss"ed by the Maritime $nd"stry A"thority a Certificate of Dessel Reistry and a permit to enae incoast)ise trade on the Manila(Ceb"(Manila(Uamboana(#eneral 5antos(Manila ro"te. ?"rin this period of employment, ?elos 5antos )aspaid by and receied from respondent his salary in ;hilippine peso thr" a payroll(deposit arranement )ith the ;hilippine Commercial $nd"strial !an.

5ome fie months into the essel:s inter(island oyaes, ?elos 5antos e@perienced episodes of chest pain, n"mbness and body )eaness )hich eent"ally left him temporarily paralyed. On 17 9ebr"ary 1*, he )as bro"ht to the Manila ?octor:s 8ospital G a d"ly

22




accredited hospital of respondent ( )here he "nder)ent a spinal col"mn operation. Respondent sho"ldered all operation(related e@penses,incl"sie of his post operation confinement.

As narrated in the assailed decision of the Co"rt of Appeals, the follo)in eents ne@t transpired% 1. After his dischare from the Manila ?octor:s, ?elos 5antos )as made to "ndero physical therapy sessions at the same hospital,

)hich compelled the !atanas(based ?elos 5antoses to rent a room near the hospital at ;,<<<.<< a month0

2. ?elos 5antos "nder)ent a second spinal operation at the non(accredited o"rdes 8ospital at the cost of ;11, /*.<<0 and

. After o"rdes, ?elos 5antos )as confined in a clinic in 5an +"an, !atanas )here ;2<,<<<.<< in hospitaliation e@penses )asinc"rred.

The spo"ses ?elos 5antos paid all the e@penses attendant the second spinal operation as )ell as for the s"bseH"ent medical treatment.

;etitioner:s demand for reimb"rsement of these e@penses )as reected by respondent for the reason that all the sicness benefits of ?elos5antos "nder the 5ocial 5ec"rity 5ystem &555' a) had already been paid.

Issu&%

)hich, bet)een the ;OEA(5EC and the abor Code, oerns the employer(employee relationship bet)een ?elos 5antos and respondentafter MD 6ild $ris, as later renamed 5"per RoRo 1<<, ret"rned to the co"ntry from its one(month cond"ction oyae to and from +apan

H&'(%

The fact that ?elos 5antos contin"ed to )or in the same essel )hich sailed )ithin ;hilippine )aters does not mean that the ;OEAstandard employment contract contin"es to be enforced bet)een the parties. The employment of ?elos 5antos is )ithin the ;hilippines, andnot on a forein shore. The proisions of the abor Code shall oern their employer(employee relationship.

;OEA )as created primarily to "ndertae a systematic proram for oerseas employment of 9ilipino )orers and to protect their rihts tofair and eH"itable employment practices. And to ens"re that oerseas )orers, incl"din seafarers on board ocean(oin essels, are amplyprotected, the ;OEA is a"thoried to form"late employment standards in accordance )ith )elfare obecties of the oerseas employmentproram. #ien this consideration, the Co"rt is at a loss to "nderstand )hy the ;OEA(5EC sho"ld be made to contin"e to apply to domesticemployment, as here, inolin a 9ilipino seaman on board an inter(island essel.

?elos 5antos: ;OEA(approed employment contract )as for a definite term of 1 month only. After the lapse of the said period, hisemployment "nder the ;OEA(approed contract may be deemed as f!nct!s oficio and ?elos 5antos: employment p"rs"ant theretoconsidered a"tomatically terminated, there bein no m"t"ally(areed rene)al or e@tension of the e@pired contract.

A seaman need not physically disembared from a essel at the e@piration of his employment contract to hae s"ch contract consideredterminated. And the repatriation aspect of the contract ass"mes sinificance only )here the essel remains in a forein port. 9or, repatriationpres"pposes a ret"rn to one:s co"ntry of oriin or citienship. $n the case at bar, ho)eer, there can be H"ibblin that MD 6ild $ris ret"rned tothe port of Ceb" )ith ?elos 5antos on board. ;arenthetically, )hile the parties are areed that their "nderlyin contract )as e@ec"ted in theco"ntry, the records do not indicate )hat city or proince of the ;hilippines is the specific point of hire. 6hile petitioner says it is Manila, shedid not bother to attach to her petition a copy of the contract of employment in H"estion.

;etitioner s"bmits, echoin the 3RC:s holdin, that the ;OEA(approed contract remained in f"ll force and effect een after thee@piry thereof o)in to the interplay of the follo)in circ"mstances% 1' ?elos 5antos, after s"ch contract e@piration, did not concl"de another

contract of employment )ith respondent, b"t )as ased to remain and )or on board the same essel "st the same0 and 2' $f the partiesintended their employer(employee relationship to be "nder the aeis of a ne) contract, s"ch intention sho"ld hae been embodied in a ne)areement.

The fact that respondent retained ?elos 5antos and allo)ed him to remain on board the essel cannot pla"sibly be interpreted, in conte@t,as eidencin an intention on its part to contin"e )ith the ;OEA(5EC. $n the practical ie)point, there co"ld hae been no sense inconsentin to rene)al since the rationale for the e@ec"tion of the ;OEA(approed contract had already been sered and achieed.

DUTY "REE HILIINES v. MO!ICAG.R. No. 16636. S&-t&0& 3, 4

2




YNARES7SANTIAGO, !.

"#$ts%

The ?iscipline Committee of ?"ty 9ree ;hilippines &?9;' rendered a decision findin 5toc Cler Rossano Moica "ilty of 3elect of ?"tyby ca"sin considerable damae to or loss of materials, assets and property of ?9;. Th"s, Moica )as considered forcibly resined from theserice )ith forfeit"re of all benefits e@cept his salary and the monetary al"e of the accr"ed leae credits.

Moica )as formally informed of his forced resination on +an"ary 14, 1-. There"pon, he filed a complaint for illeal dismissal )ithprayer for reinstatement, payment of f"ll bac )aes, damaes, and attorney:s fees, aainst ?9; before the 3ational abor RelationsCommission &3RC'.

Issu&%

6O3 the decision rendered by 3RC and affirmed by CA sho"ld be dismissed for lac of "risdiction

H&'(%

Bes. Respondent Moica is a ciil serice employee0 therefore, "risdiction is loded not )ith the 3RC, b"t )ith the Ciil 5ericeCommission.

?9; )as created "nder E@ec"tie Order &EO' 3o. 4*I-J on 5eptember 4, 1-* primarily to a"ment the serice facilities for to"rists and toenerate forein e@chane and reen"e for the oernment. $n order for the oernment to e@ercise direct and effectie control andre"lation oer the ta@ and d"ty free shops, their establishment and operation )as ested in the Ministry, no) ?epartment of To"rism &?OT',thro"h its implementin arm, the ;hilippine To"rism A"thority &;TA'.IJ All the net profits from the merchandisin operations of the shopsaccr"ed to the ?OT.

As proided "nder ;residential ?ecree &;?' 3o. /*4,I1<J ;TA is a corporate body attached to the ?OT. As an attached aency, therecr"itment, transfer, promotion and dismissal of all its personnel )as oerned by a merit system established in accordance )ith the ciilserice r"les. $n fact, all ;TA officials and employees are s"bect to the Ciil 5erice r"les and re"lations.

Accordinly, since ?9; is "nder the e@cl"sie a"thority of the ;TA, it follo)s that its officials and employees are lie)ise s"bect to theCiil 5erice r"les and re"lations. Clearly then, Moica:s reco"rse to the abor Arbiter )as not proper. 8e sho"ld hae follo)ed theproced"re laid do)n in ?9;:s merit system and the Ciil 5erice r"les and re"lations.

agency G any b"rea", office, commission, administration, board, committee, instit"te, corporation, )hether performin oernmental orproprietary f"nction, or any other "nit of the 3ational #oernment, as )ell as proincial, city or m"nicipal oernment, e@cept as other)iseproided

government employees G all employees of all branches, s"bdiisions, instr"mentalities, and aencies, of the #oernment, incl"dinoernment(o)ned or controlled corporations )ith oriinal charters.

EO 3o. 22 or )he /dministrative #ode of 0123 empo)ered the Ciil 5erice Commission to hear and decide administratie casesinstit"ted by or bro"ht before it directly or on appeal, incl"din contested appointments, and reie) decisions and actions of its offices andof the aencies attached to it.

The established r"le is that the hirin and firin of employees of oernment(o)ned and controlled corporations are oerned by

proisions of the Ciil 5erice a) and Ciil 5erice R"les and Re"lations. +"risdiction oer the strie and the dismissal of priaterespondents is therefore loded not )ith the 3RC b"t )ith the Ciil 5erice Commission.

EO 3o. 22 proided that ciil serice employees hae the riht to present their complaints or rieances to manaement and hae themad"dicated as e@peditio"sly as possible in the best interest of the aency, the oernment as a )hole, and the employee concerned. 5"chcomplaint or rieances shall be resoled at the lo)est possible leel in the department or aency, as the case may be, and the employeeshall hae the riht to appeal s"ch decision to hiher a"thorities. $n case any disp"te remains "nresoled after e@ha"stin all the aailableremedies "nder e@istin la)s and proced"re, the parties may ointly refer the disp"te in the ;"blic 5ector abor Manaement Co"ncil forappropriate action.

24




SOCIAL SECURITY SYSTEM EMLOYEES ASSOCIATION ?SSSEA v. CAG.R. No. 8459 !u'2 48, 1989CORTES, !.

"#$ts%

The 555 filed a complaint for damaes )ith a prayer for a )rit of preliminary in"nction aainst petitioners, allein that on +"ne , 1-7,

the officers and members of 555EA staed an illeal strie and barricaded the entrances to the 555 !"ildin, preentin non(striinemployees from reportin for )or and 555 members from transactin b"siness )ith the 5550 that the strie )as reported to the ;"blic5ector abor ( Manaement Co"ncil, )hich ordered the striers to ret"rn to )or0 that the striers ref"sed to ret"rn to )or0 and that the 555s"ffered damaes as a res"lt of the strie. The complaint prayed that a )rit of preliminary in"nction be iss"ed to enoin the strie and thatthe striers be ordered to ret"rn to )or0 that the petitioners be ordered to pay damaes0 and that the strie be declared illeal.

The 555EA )ent on strie after the 555 failed to act on the "nion:s demands, )hich incl"ded% implementation of the proisions of the old555(555EA collectie barainin areement &C!A' on chec(off of "nion d"es0 payment of accr"ed oertime pay, niht differential pay andholiday pay0 conersion of temporary or contract"al employees )ith * months or more of serice into re"lar and permanent employees andtheir entitlement to the same salaries, allo)ances and benefits ien to other re"lar employees of the 5550 and payment of the children:sallo)ance of ;<.<<, and after the 555 ded"cted certain amo"nts from the salaries of the employees and alleedly committed acts ofdiscrimination and "nfair labor practices.

The position of the petitioners is that the Reional Trial Co"rt had no "risdiction to hear the case initiated by the 555 and to iss"e therestrainin order and the )rit of preliminary in"nction, as "risdiction lay )ith the ?epartment of abor and Employment or the 3ational aborRelations Commission, since the case inoles a labor disp"te.

On the other hand, the 555 adances the contrary ie), on the ro"nd that the employees of the 555 are coered by ciil serice la)sand r"les and re"lations, not the abor Code, therefore they do not hae the riht to strie. 5ince neither the ?OE nor the 3RC has

"risdiction oer the disp"te, the Reional Trial Co"rt may enoin the employees from striin.

Issu&s%

1. ?o the employees of the 555 hae the riht to strieL2. ?oes the Reional Trial Co"rt hae "risdiction to hear the case initiated by the 555 and to enoin the striers from contin"in )ith the

strie and to order them to ret"rn to )orL

H&'(%

Considerin that "nder the 1-7 Constit"tion TJhe ciil serice embraces all branches, s"bdiisions, instr"mentalities, and aencies of the#oernment, incl"din oernment(o)ned or controlled corporations )ith oriinal charters> IArt. $Q&!', 5ec. .2&l' see also 5ec. 1 of E.O. 3o.1-< )here the employees in the ciil serice are denominated as oernment employees>J and that the 555 is one s"ch oernment(controlled corporation )ith an oriinal charter, hain been created "nder R.A. 3o. 11*1, its employees are part of the ciil serice and arecoered by the Ciil 5erice Commission:s memorand"m prohibitin stries. This bein the case, the strie staed by the employees of the555 )as illeal.

The eneral r"le is that the terms and conditions of employment in the #oernment, incl"din any political s"bdiision or instr"mentalitythereof are oerned by la). 5ince the terms and conditions of oernment employment are fi@ed by la), oernment )orers cannot "sethe same )eapons employed by )orers in the priate sector to sec"re concessions from their employers. The principle behind labor"nionism in priate ind"stry is that ind"strial peace cannot be sec"red thro"h comp"lsion by la). Relations bet)een priate employers and

their employees rest on an essentially ol"ntary basis. 5"bect to the minim"m reH"irements of )ae la)s and other labor and )elfareleislation, the terms and conditions of employment in the "nionied priate sector are settled thro"h the process of collectie barainin. $noernment employment, ho)eer, it is the leislat"re and, )here properly ien deleated po)er, the administratie heads of oernment

)hich fi@ the terms and conditions of employment. And this is effected thro"h stat"tes or administratie circ"lars, r"les, and re"lations, notthro"h collectie barainin areements.

E.O. 3o. 1-<, )hich proides "idelines for the e@ercise of the riht to oranie of oernment employees, )hile clinin to the samephilosophy, has, ho)eer, rela@ed the r"le to allo) neotiation )here the terms and conditions of employment inoled are not amon thosefi@ed by la). Th"s% 5ECT$O3 1. Terms and conditions of employment or improements thereof, e@cept those that are fi@ed by la), may bethe s"bect of neotiations bet)een d"ly reconied employees: oraniations and appropriate oernment a"thorities.>

2/




The same e@ec"tie order has also proided for the eneral mechanism for the settlement of labor disp"tes in the p"blic sector to )it%5ECT$O3 1*. The Ciil 5erice and labor la)s and proced"res, )heneer applicable, shall be follo)ed in the resol"tion of complaints,rieances and cases inolin oernment employees. $n case any disp"te remains "nresoled after e@ha"stin all the aailable remedies"nder e@istin la)s and proced"res, the parties may ointly refer the disp"te to the ;"blic 5ector abor( Manaement Co"ncil for appropriateaction.>

#oernment employees may, therefore, thro"h their "nions or associations, either petition the Conress for the betterment of the terms

and conditions of employment )hich are )ithin the ambit of leislation or neotiate )ith the appropriate oernment aencies for theimproement of those )hich are not fi@ed by la). $f there be any "nresoled rieances, the disp"te may be referred to the ;"blic 5ectorabor ( Manaement Co"ncil for appropriate action. !"t employees in the ciil serice may not resort to stries, )al(o"ts and othertemporary )or stoppaes, lie )orers in the priate sector, to press"re the #oernment to accede to their demands. As no) proided"nder 5ec. 4, R"le $$$ of the R"les and Re"lations to #oern the E@ercise of the Riht of #oernment( Employees to 5elf( Oraniation,

)hich too effect after the instant disp"te arose, ItJhe terms and conditions of employment in the oernment, incl"din any politicals"bdiision or instr"mentality thereof and oernment( o)ned and controlled corporations )ith oriinal charters are oerned by la) andemployees therein shall not strie for the p"rpose of sec"rin chanes thereof.>

The abor Code itself proides that terms and conditions of employment of oernment employees shall be oerned by the Ciil 5ericea), r"les and re"lations. More importantly, E.O. 3o. 1-< ests the ;"blic 5ector abor ( Manaement Co"ncil )ith "risdiction oer"nresoled labor disp"tes inolin oernment employees. Clearly, the 3RC has no "risdiction oer the disp"te.

This bein the case, the Reional Trial Co"rt )as not precl"ded, in the e@ercise of its eneral "risdiction "nder !.;. !l. 12, asamended, from ass"min "risdiction oer the 555:s complaint for damaes and iss"in the in"nctie )rit prayed for therein. Fnlie the3RC, the ;"blic 5ector abor ( Manaement Co"ncil has not been ranted by la) a"thority to iss"e )rits of in"nction in labor disp"tes

)ithin its "risdiction. Th"s, since it is the Co"ncil, and not the 3RC, that has "risdiction oer the instant labor disp"te, resort to the eneralco"rts of la) for the iss"ance of a )rit of in"nction to enoin the strie is appropriate.

LUMANTA v. NLRCG.R. No. 84819. "&u#2 8, 1989"ELICIANO, !.

"#$ts%

" "manta, oined by /4 other retrenched employees, filed a complaint for "npaid d retrenchment or separation pay aainst 9ood

Terminal, $nc. &9T$>' )ith the ?epartment of abor and Employment. The complaint )as later amended to incl"de chares of "nderpaymentof )aes and non(payment of emerency cost of liin allo)ances &ECOA'.

9T$ moed to dismiss the complaint on the ro"nd of lac of "risdiction. $t ar"ed that bein a oernment(o)ned and controlledcorporation, its employees are oerned by the Ciil 5erice a) not by the abor Code, and that claims arisin from employment fall )ithinthe "risdiction of the Ciil 5erice Commission and not the ?epartment of abor and Employment.

Issu&%

6O3 a labor la) claim aainst a oernment(o)ned and controlled corporation, s"ch as priate respondent 9T$, falls )ithin the "risdiction of the ?epartment of abor and Employment

H&'(%

gov&*0&*t7o*&( #*( $o*to''&( $o-o#t)o*s )t o)g)*#' $#t& G corporations chartered by special la) as distin"ished fromcorporations oranied "nder o"r eneral incorporation stat"te(the Corporation Code

+"risdiction is determined as of the time of the filin of the complaint. At the time the complaint aainst priate respondent 9T$ )as filed&i.e., 2< March 1-7', and at the time the decisions of the respondent abor Arbiter and 3ational abor Relations Commission )ere rendered&i.e., 1 A""st 1-7 and 1- March 1--, respectiely', the 1-7 Constit"tion had already come into effect. latter of $nstr"ction 3o. 1<1,dated 1 April 1-<, incl"ded 9ood Terminal, $nc. in the cateory of oernment(o)ned or controlled corporations.> 5 5ince then, 9T$ seredas the maretin arm of the 3ational #rains A"thority &no) no)n as the 3ational 9ood A"thority'. The pleadins sho) that 9T$ )aspreio"sly a priately o)ned enterprise, created and oranied "nder the eneral incorporation la), )ith the corporate name #reater Manila9ood Terminal Maret, $nc.> 8 The record does not indicate the precise amo"nt of the capital stoc of 9M that is o)ned by the oernment0

2*




the petitioners: claim, and this has not been disp"ted, that 9Tl is not h"ndred percent &1<<N' oernment(o)ned and that it has somepriate shareholders.

!eca"se respondent 9T$ is oernment(o)ned and controlled corporation )itho"t oriinal charter, it is the ?epartment of abor andEmployment, and not the Ciil 5erice Commission, )hich has "risdiction oer the disp"te arisin from employment of the petitioners )ithpriate respondent 9T$, and that conseH"ently, the terms and conditions of s"ch employment are oerned by the abor Code and not by theCiil 5erice R"les and Re"lations.

;"blic respondent 3ational abor Relations Commission acted )itho"t or in e@cess of its "risdiction in dismissin petitioner:s complaint.

SOUTHEAST ASIAN "ISHERIES DEELOMENT CENTER7AUACULTURE DEARTMENT ?SEA"DEC7AD v. NLRCG.R. No. 86553 "&u#2 1+, 1994NOCON, !.

"#$ts%

5EA9?EC(A? is a department of an international oraniation, the 5o"theast Asian 9isheries ?eelopment Center, oranied thro"han areement entered into in !ano, Thailand on ?ecember 2-, 1*7 by the oernments of Malaysia, 5inapore, Thailand, Dietnam,$ndonesia and the ;hilippines )ith +apan as the sponsorin co"ntry &Article 1, Areement Establishin the 5EA9?EC'.

On April 2<, 17/, priate respondent +"enal aaa )as employed as a Research Associate an a probationary basis by the 5EA9?EC(A? and )as appointed 5enior E@ternal Affairs Officer on +an"ary /, 1- )ith a monthly basic salary of ;-,<<<.<< and a monthlyallo)ance of ;4,<<<.<<. Thereafter, he )as appointed to the position of ;rofessional $$$ and desinated as 8ead of E@ternal Affairs Office

)ith the same pay and benefits.

On May -, 1-*, petitioner acanilao in his capacity as Chief of 5EA9?EC(A? sent a notice of termination to priate respondentinformin him that d"e to the financial constraints bein e@perienced by the department, his serices shall be terminated at the close of officeho"rs on May 1/, 1-* and that he is entitled to separation benefits eH"ialent to 1 month of his basic salary for eery year of serice pl"sother benefits.

Fpon petitioner 5EA9?EC(A?:s fail"re to pay priate respondent his separation pay, the latter filed on March 1-, 1-7 a complaintaainst petitioners for non(payment of separation benefits pl"s moral damaes and attorney:s fees )ith the Arbitration !ranch of the 3RC.

Issu&%

6O3 ;hilippine Co"rts hae "risdiction oer 5EA9?EC(A?

H&'(%

;etitioner 5o"theast Asian 9isheries ?eelopment Center(AH"ac"lt"re ?epartment &5EA9?EC(A?' is an international aency beyondthe "risdiction of p"blic respondent 3RC.

$t )as established by the #oernments of !"rma, Pindom of Cambodia, Rep"blic of $ndonesia, +apan, Pindom of aos, Malaysia.Rep"blic of the ;hilippines, Rep"blic of 5inapore, Pindom of Thailand and Rep"blic of Dietnam for the promotion of research inaH"ac"lt"re.

!ein an interoernmental oraniation, 5EA9?EC incl"din its ?epartments &A?', enoys f"nctional independence and freedom fromcontrol of the state in )hose territory its office is located.

;"rs"ant to its bein a sinatory to the Areement, the Rep"blic of the ;hilippines areed to be represented by one ?irector in theoernin 5EA9?EC Co"ncil and that its national la)s and re"lations shall apply only insofar as its contrib"tion to 5EA9?EC of anareed amo"nt of money, moable and immoable property and serices necessary for the establishment and operation of the Center> areconcerned. $t e@pressly )aied the application of the ;hilippine la)s on the disb"rsement of f"nds of petitioner 5EA9?EC(A?.

;hilippine Co"rts hae no "risdiction oer 5EA9?EC(A?. One of the basic imm"nities of an international oraniation is imm"nity fromlocal "risdiction, i .e., that it is imm"ne from the leal )rits and processes iss"ed by the trib"nals of the co"ntry )here it is fo"nd.&See +ens, Id ., pp. 7(44' The obio"s reason for this is that the s"bection of s"ch an oraniation to the a"thority of the local co"rts )o"ld

27




afford a conenient medi"m thr" )hich the host oernment may interfere in there operations or een infl"ence or control its policies anddecisions of the oraniation0 besides, s"ch s"bection to local "risdiction )o"ld impair the capacity of s"ch body to dischare itsresponsibilities impartially on behalf of its member(states. $n the case at bar, for instance, the entertainment by the 3ational abor RelationsCommission of Mr. Madamba:s reinstatement cases )o"ld amo"nt to interference by the ;hilippine #oernment in the manaementdecisions of the 5EARCA oernin board0 een )orse, it co"ld compromise the desired impartiality of the oraniation since it )ill hae tos"it its act"ations to the reH"irements of ;hilippine la), )hich may not necessarily coincide )ith the interests of the other member(states. $tis precisely to forestall these possibilities that in cases )here the e@tent of the imm"nity is specified in the enablin instr"ments of

international oraniations, "risdictional imm"nity from the host co"ntry is inariably amon the first accorded.

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION v. CALLE!AG.R. No. 85. S&-t&0& 48, 199

:AISANAN NG MANGGAGA@A AT TAC SA IRRI7ORGANI;ED LABOR ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE v.SECRETARY O" LABOR AND EMLOYMENTG.R. No. 89331. S&-t&0& 48, 199MELENCIO7HERRERA, !.

"#$ts%

#.R. 3o. -/7/<%

As an aftermath of the Dietnam 6ar, the pliht of Dietnamese ref"ees fleein from 5o"th Dietnam:s comm"nist r"le confronted theinternational comm"nity.

$n response to this crisis, on 2 9ebr"ary 1-1, an Areement )as fored bet)een the ;hilippine #oernment and the Fnited 3ations8ih Commissioner for Ref"ees )hereby an operatin center for processin $ndo(Chinese ref"ees for eent"al resettlement to otherco"ntries )as to be established in !ataan.

$CMC )as one of those accredited by the ;hilippine #oernment to operate the ref"ee processin center in Moron, !ataan. $t )asincorporated in 3e) Bor, F5A, at the reH"est of the 8oly 5ee, as a non(profit aency inoled in international h"manitarian and ol"ntary

)or. $t is d"ly reistered )ith the Fnited 3ations Economic and 5ocial Co"ncil &ECO5OC' and enoys Cons"ltatie 5tat"s, Cateory $$. Asan international oraniation renderin ol"ntary and h"manitarian serices in the ;hilippines, its actiities are parallel to those of the$nternational Committee for Miration &$CM' and the $nternational Committee of the Red Cross &$CRC'.

On 14 +"ly 1-*, Trade Fnions of the ;hilippines and Allied 5erices &TF;A5' filed )ith the then Ministry of abor and Employment a;etition for Certification Election amon the ran and file members employed by $CMC The latter opposed the petition on the ro"nd that it isan international oraniation reistered )ith the Fnited 3ations and, hence, enoys diplomatic imm"nity.

On appeal by TF;A5, ?irector ;"ra Callea of the !"rea" of abor Relations &!R', reersed the Med(Arbiter:s ?ecision and ordered theimmediate cond"ct of a certification election. At that time, $CMC:s reH"est for reconition as a specialied aency )as still pendin )ith the?epartment of 9orein Affairs &?E9ORA9'.

5"bseH"ently, ho)eer, the ;hilippine #oernment, thro"h the ?E9ORA9, ranted $CMC the stat"s of a specialied aency )ithcorrespondin diplomatic priilees and imm"nities, as eidenced by a Memorand"m of Areement bet)een the #oernment and $CMC.

$CMC then so"ht the immediate dismissal of the TF;A5 ;etition for Certification Election inoin the imm"nity e@pressly ranted b"t the

same )as denied by respondent !R ?irector )ho, aain, ordered the immediate cond"ct of a pre(election conference. $CMC:s t)o Motionsfor Reconsideration )ere denied despite an opinion rendered by ?E9ORA9 that said !R Order iolated $CMC:s diplomatic imm"nity.

#.R. 3o. -1%

On ?ecember 1/, the ;hilippine #oernment and the 9ord and Rocefeller 9o"ndations sined a Memorand"m of Fnderstandinestablishin the $nternational Rice Research $nstit"te &$RR$' at os !aos, a"na. $t )as intended to be an a"tonomo"s, philanthropic, ta@(free, non(profit, non(stoc oraniation desined to carry o"t the principal obectie of cond"ctin basic research on the rice plant, on allphases of rice prod"ction, manaement, distrib"tion and "tiliation )ith a ie) to attainin n"tritie and economic adantae or benefit forthe people of Asia and other maor rice(ro)in areas thro"h improement in H"ality and H"antity of rice.>

2-




5tates. The theory behind all three propositions is said to be essentially instit"tional in character. $t is not concerned )ith the stat"s, dinityor priilees of indiid"als, b"t )ith the elements of f"nctional independence necessary to free international instit"tions from national controland to enable them to dischare their responsibilities impartially on behalf of all their members. The raison d’etre for these imm"nities is theass"rance of "nimpeded performance of their f"nctions by the aencies concerned.

The rant of imm"nity from local "risdiction to $CMC and $RR$ is clearly necessitated by their international character and respectiep"rposes. The obectie is to aoid the daner of partiality and interference by the host co"ntry in their internal )orins. The e@ercise of

"risdiction by the ?epartment of abor in these instances )o"ld defeat the ery p"rpose of imm"nity, )hich is to shield the affairs ofinternational oraniations, in accordance )ith international practice, from political press"re or control by the host co"ntry to the pre"dice ofmember 5tates of the oraniation, and to ens"re the "nhampered performance of their f"nctions.

$CMC:s and $RR$:s imm"nity from local "risdiction by no means depries labor of its basic rihts, )hich are "aranteed by Article $$,5ection 1-, Article $$$, 5ection -, and Article Q$$$, 5ection , of the 1-7 Constit"tion0 and implemented by Articles 24 and 24* of the aborCode, relied on by the !R ?irector and by Papisanan.

9or, $CMC employees are not )itho"t reco"rse )heneer there are disp"tes to be settled. 5ection 1 of the Conention on the ;riileesand $mm"nities of the 5pecialied Aencies of the Fnited 3ations 15 proides that each specialied aency shall mae proision forappropriate modes of settlement of% &a' disp"tes arisin o"t of contracts or other disp"tes of priate character to )hich the specialiedaency is a party.> Moreoer, p"rs"ant to Article $D of the Memorand"m of Areement bet)een $CMC the ;hilippine #oernment, )heneerthere is any ab"se of priilee by $CMC, the #oernment is free to )ithdra) the priilees and imm"nities accorded. Th"s%

Art. $D. #ooperation with 4overnment /!thorities. K 1. The Commission shall cooperate at all times )ith the appropriate a"thorities of the#oernment to ens"re the obserance of ;hilippine la)s, r"les and re"lations, facilitate the proper administration of "stice and preent theocc"rrences of any ab"se of the priilees and imm"nities ranted its officials and alien employees in Article $$$ of this Areement to theCommission.

2. $n the eent that the #oernment determines that there has been an ab"se of the priilees and imm"nities ranted "nder thisAreement, cons"ltations shall be held bet)een the #oernment and the Commission to determine )hether any s"ch ab"se has occ"rredand, if so, the #oernment shall )ithdra) the priilees and imm"nities ranted the Commission and its officials.>

3either are the employees of $RR$ )itho"t remedy in case of disp"te )ith manaement as, in fact, there had been oranied a for"m forbetter manaement(employee relationship as eidenced by the formation of the Co"ncil of $RR$ Employees and Manaement &C$EM'

)herein both manaement and employees )ere and still are represented for p"rposes of maintainin m"t"al and beneficial cooperationbet)een $RR$ and its employees.> The e@istence of this Fnion fact"ally and tellinly belies the ar"ment that ;res. ?ecree 3o. 1*2<, )hich

rants to $RR$ the stat"s, priilees and imm"nities of an international oraniation, depries its employees of the riht to self(oraniation.

GENERAL MILLING COR. v. TORRESG.R. No. 93666. A-)' 44, 1991"ELICIANO, !.

"#$ts%

The 3ational Capital Reion of the ?epartment of abor and Employment iss"ed an Alien Employment ;ermit in faor of petitioner EarlTimothy Cone, a Fnited 5tates citien, as sports cons"ltant and assistant coach for petitioner #eneral Millin Corporation &#MC'.

;etitioners #MC and Cone entered into a contract of employment )hereby the latter "ndertoo to coach #MC:s basetball team.

The !oard of 5pecial $nH"iry of the Commission on $mmiration and ?eportation approed petitioner Cone:s application for a chane ofadmission stat"s from temporary isitor to pre(arraned employee.

;etitioner #MC reH"ested rene)al of petitioner Cone:s alien employment permit. #MC also reH"ested that it be allo)ed to employ Cone asf"ll(fleded coach.

!asetball Coaches Association of the ;hilippines &!CA;>' appealed the iss"ance of said alien employment permit to the respondent5ecretary of abor )ho iss"ed a decision orderin cancellation of petitioner Cone:s employment permit on the ro"nd that there )as nosho)in that there is no person in the ;hilippines )ho is competent, able and )illin to perform the serices reH"ired nor that the hirin ofpetitioner Cone )o"ld redo"nd to the national interest.

<




Issu&s%

6O3 respondent 5ecretary of abor raely ab"sed his discretion )hen he reoed petitioner Cone:s alien employment permit0

6O3 5ection * &c', R"le Q$D, !oo $ of the Omnib"s R"les $mplementin the abor Code is n"ll and oid as it is in iolation of theenablin la) as the abor Code does not empo)er respondent 5ecretary to determine if the employment of an alien )o"ld redo"nd to

national interest

H&'(%

;etitioners: contention that respondent 5ecretary of abor sho"ld hae deferred to the findins of Commission on $mmiration and?eportation as to the necessity of employin petitioner Cone, is bereft of leal basis. The abor Code itself specifically empo)ersrespondent 5ecretary to mae a determination as to the aailability of the serices of a person in the ;hilippines )ho is competent, able and

)illin at the time of application to perform the serices for )hich an alien is desired. $n short, the ?epartment of abor is the aency ested )ith "risdiction to determine the H"estion of aailability of local )orers. The constit"tional alidity of leal proisions rantin s"ch "risdiction and a"thority and reH"irin proof of non(aailability of local nationals able to carry o"t the d"ties of the position inoled, cannotbe serio"sly H"estioned.

Article 4< of the abor Code reads as follo)s%

Art. 4<. Employment per !nit of non"resident aliens . GG Any alien seein admission to the ;hilippines for employment p"rposes and anydomestic or forein employer )ho desires to enae an alien for employment in the ;hilippines shall obtain an employment permit from the?epartment of abor.

)he employment permit may be iss!ed to a non"resident alien or to the applicant employer after a determination of the non(aailability of aperson in the ;hilippines )ho is competent, able and )illin at the time of application to perform the serices for )hich the alien is desired.

9or an enterprise reistered in preferred areas of inestments, said employment permit may be iss"ed "pon recommendation of theoernment aency chared )ith the s"perision of said reistered enterprise.> &Emphasis s"pplied'

EOLE v. GOCEG.R. No. 113161. August 49, 199

REGALADO, !.

"#$ts%

An information for illeal recr"itment committed by a syndicate and in lare scale, p"nishable "nder Articles - and of the abor Code&;residential ?ecree 3o. 442' as amended by 5ection 1&b' of ;residential ?ecree 3o. 2<1-, )as filed aainst spo"ses ?an and oma #oceand 3elly A"stin allein that the said acc"sed, conspirin and confederatin toether and helpin one another, representin themseles tohae the capacity to contract, enlist and transport 9ilipino )orers for employment abroad, did then and there )illf"lly and "nla)f"lly, for afee, recr"it and promise employment=ob placement abroad, to &1' Rolando ?alida, &2' Ernesto Alare, &' Roelio 5alado, &4' Ramona5alado, &/' ?ionisio Masaya, &*' ?ae Riera, &7' oreno Alare, and &-' 3elson Trinidad, )itho"t first hain sec"red the reH"ired licenseor a"thority from the ?epartment of abor.

9o"r of the complainants testified for the prosec"tion. Roelio 5alado )as the first to tae the )itness stand and he declared that

sometime in March or April, 1-7, he )as introd"ced by oreno Alare, his brother(in(la) and a co(applicant, to 3elly A"stin in the latter:sresidence at 9actor, ?onalo, ;araaH"e, Metro Manila. Representin herself as the manaer of the Cloer ;lacement Aency, A"stinsho)ed him a ob order as proof that he co"ld readily be deployed for oerseas employment. 5alado learned that he had to pay ;/,<<<.<<as processin fee, )hich amo"nt he ae sometime in April or May of the same year. 8e )as iss"ed the correspondin receipt. 9

Also in April or May, 1-7, 5alado, accompanied by fie other applicants )ho )ere his relaties, )ent to the office of the placementaency at 3apil 5treet, Ermita, Manila )here he sa) A"stin and met the spo"ses ?an and oma #oce, o)ners of the aency. 8es"bmitted his bio(data and learned from oma #oce that he had to ie ;12,<<<.<<, instead of the oriinal amo"nt of ;/,<<<.<< for theplacement fee. Altho"h s"rprised at the ne) and hiher s"m, they s"bseH"ently areed as lon as there )as an ass"rance that they co"ldleae for abroad.

1




Thereafter, a receipt )as iss"ed in the name of the Cloer ;lacement Aency sho)in that 5alado and his aforesaid co(applicants eachpaid ;2,<<<.<<, instead of the ;/,<<<.<< )hich each of them act"ally paid. 5eeral months passed b"t 5alado failed to leae for thepromised oerseas employment. 8ence, in October, 1-7, alon )ith the other recr"its, he decided to o to the ;hilippine OerseasEmployment Administration &;OEA' to erify the real stat"s of Cloer ;lacement Aency. They discoered that said aency )as not d"lylicensed to recr"it ob applicants. ater, "pon learnin that A"stin had been arrested, 5alado decided to see her and to demand the ret"rn ofthe money he had paid, b"t A"stin co"ld only ie him ;/<<.<<.

Ramona 5alado, the )ife of Roelio 5alado, came to no) thro"h her brother, oreno Alare, abo"t 3elly A"stin. Accompanied byher h"sband, Roelio, Ramona )ent to see A"stin at the latter:s residence. A"stin pers"aded her to apply as a c"tter=se)er in Oman sothat she co"ld oin her h"sband. Enco"raed by A"stin:s promise that she and her h"sband co"ld lie toether )hile )orin in Oman, sheinstr"cted her h"sband to ie A"stin ;2,<<<.<< for each of them as placement fee, or the total s"m of ;4,<<<.<<.

M"ch later, the 5alado co"ple receied a teleram from the placement aency reH"irin them to report to its office beca"se the 3OC>&isa' had alleedly arried. Aain, aro"nd 9ebr"ary, or March, 1-7, Roelio ae ;2,<<<.<< as payment for his and his )ife:s passports.?espite follo)("p of their papers t)ice a )ee from 9ebr"ary to +"ne, 1-7, he and his )ife failed to leae for abroad.

Complainant ?ionisio Masaya, accompanied by his brother(in(la), AH"iles Ortea, applied for a ob in Oman )ith the Cloer ;lacementAency at ;araaH"e, the aency:s former office address. There, Masaya met 3elly A"stin, )ho introd"ced herself as the manaer of theaency, and the #oce spo"ses, ?an and oma, as )ell as the latter:s da"hter. 8e s"bmitted seeral pertinent doc"ments, s"ch as his bio(data and school credentials.

$n May, 1-*, Masaya ae ?an #oce ;1,<<.<< as an initial do)npayment for the placement fee, and in 5eptember of that same year,he ae an additional ;1<,<<<.<<. 8e )as iss"ed receipts for said amo"nts and )as adised to o to the placement office once in a )hile tofollo) "p his application, )hich he faithf"lly did. M"ch to his dismay and charin, he failed to leae for abroad as promised. Accordinly, he

)as forced to demand that his money be ref"nded b"t oma #oce co"ld ie him bac only ;4,<<<.<< in installments.

As the prosec"tion:s fo"rth and last )itness, Ernesto Alare too the )itness stand on +"ne 7, 1. 8e testified that in 9ebr"ary, 1-7,he met appellant A"stin thro"h his co"sin, arry Alare, at her residence in ;araaH"e. 5he informed him that madalas siyangnagpapala$ad sa man> and offered him a ob as an amb"lance drier at the Royal 8ospital in Oman )ith a monthly salary of abo"t *<<.<<to 7<<.<<.

On March 1<, 1-7, Alare ae an initial amo"nt of ;,<<<.<< as processin fee to A"stin at the latter:s residence. $n the same month,he ae another ;,<<<.<<, this time in the office of the placement aency. A"stin ass"red him that he co"ld leae for abroad before theend of 1-7. 8e ret"rned seeral times to the placement aency:s office to follo) "p his application b"t to no aail. 9r"strated, he demanded

the ret"rn of the money he had paid, b"t A"stin co"ld only ie bac ;/<<.<<. Thereafter, he looed for A"stin abo"t eiht times, b"t heco"ld no loner find her.

The trial co"rt rendered "dment findin herein appellant 3elly A"stin "ilty as a principal in the crime of illeal recr"itment in larescale, and sentencin her to sere the penalty of life imprisonment, as )ell as to pay a fine of ;1<<,<<<.<<.

Issu&%

6O3 appellant is "ilty of illeal recr"itment

H&'(%

The testimonial eidence sho) that she indeed f"rther committed acts constit"tie of illeal recr"itment. All fo"r prosec"tion )itnesses

testified that it )as A"stin )hom they initially approached reardin their plans of )orin oerseas. $t )as from her that they learned abo"tthe fees they had to pay, as )ell as the papers that they had to s"bmit. $t )as after they had taled to her that they met the acc"sed spo"ses

)ho o)ned the placement aency.

!ein an employee of the #oces, it )as therefore loical for appellant to introd"ce the applicants to said spo"ses, they bein the o)nersof the aency. As s"ch, appellant )as act"ally main referrals to the aency of )hich she )as a part. 5he )as therefore enain inrecr"itment actiity.

?espite A"stin:s pretensions that she )as b"t a neihbor of the #oce co"ple, the testimonies of the prosec"tion )itnesses paint adifferent pict"re. Roelio 5alado and ?ionisio Masaya testified that appellant represented herself as the manaer of the Cloer ;lacementAency. Ramona 5alado )as offered a ob as a c"tter=se)er by A"stin the first time they met, )hile Ernesto Alare remembered that )hen

2




he first met A"stin, the latter represented herself as nagpapaalis pap!nta sa man.> $ndeed, A"stin played a piotal role in the operationsof the recr"itment aency, )orin toether )ith the #oce co"ple.

There is )''&g#' &$u)t0&*t )hen one ies the impression of hain the ability to send a )orer abroad. Appellant ae complainantsthe distinct impression that she had the po)er or ability to send people abroad for )or s"ch that the latter )ere coninced to ie her themoney she demanded in order to be so employed.

A"stin receied from complainants ario"s s"ms for p"rpose of their applications. 8er act of collectin from each of the complainantspayment for their respectie passports, trainin fees, placement fees, medical tests and other s"ndry e@penses "nH"estionably constit"tesan act of recr"itment )ithin the meanin of the la). $n fact, appellant demanded and receied from complainants amo"nts beyond theallo)able limit of ;/,<<<.<< "nder oernment re"lations. $t is tr"e that the mere act of a cashier in receiin money far e@ceedin theamo"nt allo)ed by la) )as not considered per se as recr"itment and placement> in contemplation of la), b"t that )as beca"se the recipienthad no other participation in the transactions and did not conspire )ith her co(acc"sed in defra"din the ictims. That is not the case here.

TRANS ACTION OERSEAS COR. v. SEC. O" LABORG.R. No. 1983. S&-t&0& , 1995ROMERO, !.

"#$ts%

9rom +"ly 24 to 5eptember , 1-7, petitioner Trans Action Oerseas Corporation, a priate fee(charin employment aency, sco"red$loilo City for possible recr"its for alleed ob acancies in 8onon. ;riate respondents so"ht employment as domestic helpers thro"hpetitioner:s employees, "iminda Araon, !en 8"r ?omincil and his )ife Cecille. The applicants paid placement fees ranin from;1,<<<.<< to ;14,<<<.<<, b"t petitioner failed to deploy them. Their demands for ref"nd proed "naailin0 th"s, they )ere constrained toinstit"te complaints aainst petitioner for iolation of Articles 2 and 4&a' of the abor Code, as amended

;OEA Reional E@tension Fnit Coordinator Edar 5omes testified that altho"h he )as a)are that petitioner collected fees fromrespondents, the latter insisted that they be allo)ed to mae the payments on the ass"mption that it co"ld hasten their deployment abroad.8e added that Mrs. 8onorata Manliclic, a representatie of petitioner tased to oersee the cond"ct of the interie)s, told him that she )asleain behind presined receipts to Araon as she cannot stay in $loilo City for the screenin of the applicants. Manliclic, ho)eer, deniedthis ersion and ar"ed that it )as 5omes )ho instr"cted her to leae the receipts behind as it )as perfectly alriht to collect fees.

Then abor Fndersecretary 3iees R. Confesor rendered the assailed order, the dispositie portion of )hich reads% Respondent aency

is liable for t)enty eiht &2-' co"nts of iolation of Article 2 and fie &/' co"nts of Article 4 &a' )ith a correspondin s"spension in theareate period of si@ty si@ &**' months. Considerin ho)eer, that "nder the sched"le of penalties, any s"spension amo"ntin to a periodof 12 months merits the imposition of the penalty of cancellation, the license of respondent TRA35 ACT$O3 ODER5EA5 COR;ORAT$O3 toparticipate in the oerseas placement and recr"itment of )orers is hereby ordered CA3CEE?, effectie immediately.>

;etitioner filed its Motion for Temporary iftin of Order of Cancellation allein, amon other thins, that to deny it the a"thority to enaein placement and recr"itment actiities )o"ld eopardie not only its contract"al relations )ith its forein principals, b"t also the )elfare,interests, and lielihood of recr"ited )orers sched"led to leae for their respectie assinments. 9inally, it manifested its )illinness to posta bond to ins"re payment of the claims to be a)arded, sho"ld its appeal or motion be denied.

9indin the motion to be )ell taen, Fndersecretary Confesor proisionally lifted the cancellation of petitioner:s license pendin resol"tionof its Motion for Reconsideration. 8o)eer, petitioner:s motion for reconsideration )as eent"ally denied for lac of merit0 th"s, orderreoin its license )as reinstated.

Issu&%

6O3 the 5ecretary of abor and Employment has "risdiction to cancel or reoe the license of a priate fee(charin employmentaency

H&'(%

Fnder E@ec"tie Order 3o. 77 &E.O. 3o. 77' and E@ec"tie Order 3o. 247 &E.O. 3o. 247', the ;OEA )as established and mandated toass"me the f"nctions of the Oerseas Employment ?eelopment !oard &OE?!', the 3ational 5eamen !oard &35!', and the oerseas




employment f"nction of the !"rea" of Employment 5erices &!E5'. ;etitioner theories that )hen ;OEA absorbed the po)ers of theseaencies, Article / of the abor Code, as amended, )as rendered ineffectie.

The po)er to s"spend or cancel any license or a"thority to recr"it employees for oerseas employment is ested "pon the 5ecretary ofabor and Employment. Article / of the abor Code, as amended, )hich proides%

Art. /. 5"spension and=or Cancellation of icense or A"thority K The Minister of abor shall hae the po)er to s"spend or cancel any

license or a"thority to recr"it employees for oerseas employment for iolation of r"les and re"lations iss"ed by the Ministry of abor, theOerseas Employment ?eelopment !oard, and the 3ational 5eamen !oard, or for iolation of the proisions of this and other applicablela)s, #eneral Orders and etters of $nstr"ctions.>

The po)er to s"spend or cancel any license or a"thority to recr"it employees for oerseas employment is conc"rrently ested )ith the;OEA and the 5ecretary of abor.

As reards petitioner:s alternatie ar"ment that the non(filin of the 1-7 ;OEA 5ched"le of ;enalties )ith the F; a) Center renderedit ineffectie and, hence, cannot be "tilied as basis for penaliin them, it m"st ne noted that the ;OEA Reised R"les on the 5ched"le of;enalties )as iss"ed p"rs"ant to Article 4 of the abor Code, as amended. The same merely amplified and partic"laried the ario"siolations of the r"les and re"lations of the ;OEA and clarified and specified the penalties therefor. $ndeed, the H"estioned sched"le ofpenalties contains only a listin of offenses. $t does not prescribe additional r"les and re"lations oernin oerseas employment b"t onlydetailed the administratie sanctions imposable by this Office for some en"merated prohibited acts. Th"s, it need not be filed )ith F; a)Center.

HILIINE7SINGAORE ORTS COR. ?SC v. NLRCG.R. No. 653. !#*u#2 49, 1993BIDIN, !.

"#$ts%

On 5eptember /, 177, ;5;C and +ardin entered into a contract of employment )herein the latter )as employed by the former as a )inchman=sinalman at the Commercial $slamic ;ort of +eddah in 5a"di Arabia for a t)o(year period commencin in +an"ary, 17-. On orabo"t October 1-, 17-, the ;5;C Medical ?irector recommended that +ardin be ien priority in the sched"le for rest and recreation &R andR' leae as he )as dianosed to be in need of a fist"lectomy d"e to fist"la in an".>

+ardin )as sent bac to the ;hilippines at ;5;C:s e@pense for medical treatment. At the #5$5 8ospital, "eon City )here he )astreated and confined, his ailment )as dianosed as pr"ritis ani d"e to ancylostomiasis.> On 3oember 4, 17-, +ardin )as certified as fit to

)or by his attendin physician at the said hospital. 6hen he reported to the ;5;C on the same day, ho)eer, he )as adised to file hisresination papers.

Th"s, +ardin filed )ith the then Ministry of abor, Reion $D, Manila, a complaint for illeal dismissal and recoery of bac)aes. The;5;C prayed for the dismissal of the complaint principally on the ro"nd that "nder Art. 1/ of the abor Code &;.?. 3o. 442', the !"rea" ofEmployment 5erices and not the abor Arbiter had "risdiction oer the case beca"se it inoled the oerseas employment of a 9ilipino

)orer.

Issu&%

6O3 the decision rendered by the 3RC sho"ld be dismissed for )ant of "risdiction

8eld%

6hen +ardin filed the complaint for illeal dismissal on +an"ary 1, 17, Art. 217 &/' of the abor Code proided that abor Arbiters and he3RC shall hae e@cl"sie "risdiction to hear and decide> all cases arisin from employer(employee relations "nless e@pressly e@cl"dedby this Code.> At that time, Art. 1/ of the same Code had been amended by ;.?. 3o. 1412 )hich too effect on +"ne , 17-. The pertinentproision of the said presidential decree states%

Art. 1/. !"rea" of Employment 5erices. K

&a' . . . . . .

4




&b' The !"rea" shall hae the oriinal and e@cl"sie "risdiction oer all matters or cases inolin employer(employee relations incl"dinmoney claims, arisin o"t of or by irt"e of any la) or contracts inolin 9ilipino )orers for oerseas employment, e@cept seamen. Thedecisions of the !"rea" shall be final and e@ec"tory s"bect to appeal to the 5ecretary of abor )hose decisions shall be final andinappealable.>

Considerin that priate respondent +ardin:s claims "ndeniably arose o"t of an employer(employee relationship )ith petitioner ;5;C and

that priate respondent )ored oerseas or in 5a"di Arabia, the !"rea" of Employment 5erices and not the abor Arbiter had "risdictionoer the case. Ov&s&#s &0-'o20&*t is defined by Art. 1&h' of the abor Code as employment of a )orer o"tside the ;hilippines. 5incethe definition does not mae a distinction reardin the nationality of the employer, 9ilipino employers )ho deploy their employees abroadsho"ld be deemed coered by the definition.

Art. 1/ )as f"rther amended by ;.?. 3o. 1*1 )hich too effect on May 1, 1<. 5"ch amendment H"alified the "risdiction of the !"rea" ofEmployment 5erices as follo)s%

&b' The reional offices of the Ministry of abor shall hae the oriinal and e@cl"sie "risdiction oer all matters or cases inolinemployer(employee relations incl"din money claims, arisin o"t of or by irt"e of any la) or contracts inolin 9ilipino )orers foroerseas employment e@cept seamen0 +rovided , That the !"rea" of Employment 5erices may, in the case of the 3ational Capital Reion,e@ercise s"ch po)er, )heneer the Minister of abor deems it appropriate. The decisions of the reional offices or the !"rea" ofEmployment 5erices if so a"thoried by the Minister of abor as proided in this Article, shall be appealable to the 3ational abor RelationsCommission "pon the same ro"nds proided in Article 22 hereof. The decisions of the 3ational abor Relations Commission shall be finaland inappealable.>

8ence, as f"rther amended, Art. 1/ proided for conc"rrent "risdiction bet)een the reional offices of the then Ministry of abor and the!"rea" of Employment 5erices in the case of the 3ational Capital Reion.>

The f"nctions of the !"rea" of Employment 5erices )ere s"bseH"ently ass"med by the ;hilippine Oerseas Employment Administration&;OEA' on May 1, 1-2 by irt"e of E@ec"tie Order 3o. 77 by rantin the ;OEA oriinal and e@cl"sie "risdiction oer all cases,incl"din money claims, inolin employer(employee relations arisin o"t of or by irt"e of any la) or contract inolin 9ilipino )orers foroerseas employment, incl"din seamen. This deelopment sho)ed the leislatie a"thority:s contin"in intent to e(cl!de from the aborArbiter:s "risdiction claims arisin from oerseas employment.

These amendments not)ithstandin, )hen the complaint for illeal dismissal )as filed on +an"ary 1, 17, "nder Art. 1/, as amended by;.?. 3o. 1412, it )as the !"rea" of Employment 5erices )hich had "risdiction oer the case and not the abor Arbiters. ;.?. 3o. 1*1

)hich ae the reional offices of the Ministry of abor conc"rrent "risdiction )ith the !"rea" of Employment 5erices, )as prom"latedmore than a year after the complaint )as filed.

At the time the abor Arbiter too coniance of the complaint for illeal dismissal, he )as deoid of "risdiction. ConseH"ently, the decisionprom"lated by him is n"ll and oid hain been rendered )itho"t "risdiction and may be str"c do)n any time K een on appeal to the5"preme Co"rt.

CHAE; v. BONTO7ERE;G.R. No. 1988. M#$ 1, 199UNO, !.

"#$ts%

;etitioner, an entertainment dancer, entered into a standard employment contract for oerseas 9ilipino artists and entertainers )ith ;lannin+apan Co., td., thro"h its ;hilippine representatie, priate respondent Centr"m ;lacement ;romotions Corporation. The contract had ad"ration of 2 to * months, and petitioner )as to be paid a monthly compensation of One Tho"sand 9ie 8"ndred ?ollars &F51,/<<<.<<'.On ?ecember /, 1---, the ;OEA approed the contract. 5"bseH"ently, petitioner e@ec"ted the follo)in side areement )ith her +apaneseemployer thro"h her local manaer, +a Talents ;romotion.

On ?ecember 1*, 1--, petitioner left for Osaa, +apan, )here she )ored for * months, "ntil +"ne 1<, 1-. 5he came bac to the;hilippines on +"ne 14, 1-.

/




;etitioner instit"ted the case at bench for "nderpayment of )aes )ith the ;OEA on 9ebr"ary 21, 11. 5he prayed for the payment of 5i@Tho"sand F.5. ?ollars &F5*,<<<.<<', representin the "npaid portion of her basic salary for si@ months. Chared in the case )ere priaterespondent Centr"m ;romotions and ;lacement Corporation, the ;hilippine representatie of ;lannin +apan, Co., $nc., its ins"rer, Times5"rety and $ns"rance Co., $nc., and +a Talents ;romotion.

The complaint )as dismissed by p"blic respondent ;OEA Administrator on the ro"nd of laches. 8e ratiocinated th"s% complainant&referrin to petitioner herein' )as satisfied and did not hae any complaint &abo"t' anythin reardin her employment in +apan "ntil after

almost t)o &2' years &)hen' she filed the instant complaint on 9ebr"ary 21, 11. The records sho) that after sinin the 5tandardEmployment Contract on ?ecember 1, 1--, she entered into a side areement )ith the +apanese employer thr" her local manaer, +aTalents ;romotion consentin to a monthly salary of F57/<.<< )hich she affirmed d"rin the conference of May 21, 11. Respondentaency had no no)lede nor participation in the said areement s"ch that it co"ld not be fa"lted for iolation of the 5tandard EmploymentContract reardin the stip"lated salary. 6e cannot tae coniance of s"ch iolation )hen one of the principal parties thereto opted toreceie a salary different from )hat has been stip"lated in their contract, especially so if the contractin party did not consent=participate ins"ch arranement. Complainant &petitioner' cannot no) demand from respondent aency to pay her the salary based &on' the processedEmployment Contract for she is no) considered in bad faith and hence, estopped from claimin thereto thr" her o)n act of consentin andareein to receie a salary not in accordance )ith her contract of employment. Moreoer, her self(imposed silence for a lon period of time

)ored to her o)n disadantae as she allo)ed laches to preail )hich barred respondent from doin somethin at the o"tset. 3ormally, if aperson:s riht &is' iolated, she=he )o"ld immediately react to protect her=his rihts )hich is not tr"e in the case at bar.> L#$&s has beendefined as one:s nelience or fail"re to assert his riht in d"e time or )ithin reasonable time from the accr"al of his ca"se of action, th"s,leadin another party to beliee that there is nothin )ron )ith his o)n claim. $t einces implied consent or acH"iescence to the iolation ofthe riht.

On appeal, the 3RC "pheld the decision of the ;OEA.

Issu&%

6O3 p"blic respondents committed rae ab"se of discretion in findin that she is "ilty of laches0 that she entered into a side contract on?ecember 1<, 1-- for the red"ction of her basic salary to F57/<.<< )hich s"perseded, n"llified and inalidated the standard employmentcontract she entered into on ?ecember 1, 1--0 and that ;lannin +apan Co., td. and priate respondents are not solidarily liable to her forF5*,<<<.<< in "npaid )aes

H&'(%

9irstly, the manaerial commission areement e@ec"ted by petitioner to a"thorie her +apanese Employer to ded"ct T)o 8"ndred 9ifty

F.5. ?ollars &F52/<.<<' from her monthly basic salary is oid beca"se it is aainst o"r e@istin la)s, morals and p"blic policy. $t cannots"persede the standard employment contract of ?ecember 1, 1-- approed by the ;OEA )ith the follo)in stip"lation appended thereto%

$t is "nderstood that the terms and conditions stated in this Employment Contract are in conformance )ith the 5tandard EmploymentContract for Entertainers prescribed by the ;OEA "nder Memorand"m Circ"lar 3o. 2, 5eries of 1-*. Any alterations or chanes made inany part of this contract )itho"t prior approal by the ;OEA shall be n"ll and oid.>

The stip"lation is in line )ith the proisions of R"le $$, !oo D and 5ection 2&f', R"le $, !oo D$ of the 11 R"les and Re"lations#oernin Oerseas Employment, th"s%

5ec. 1. Employment Standards. The Administration shall determine, form"late and reie) employment standards in accordance )ith themaret deelopment and )elfare obecties of the oerseas employment proram and the preailin maret conditions.

5ec. 2. 'inim!m +rovisions for #ontract . The follo)in shall be considered the minim"m reH"irements for contracts of employment%

a. #"aranteed )aes for re"lar )orin ho"rs and oertime pay for serices rendered beyond re"lar )orin ho"rs in accordance )ith the standards established by the Administration0

5ec. . Standard Employment #ontract . The administration shall "ndertae deelopment and=or periodic reie) of reion, co"ntry andsills specific employment contracts for landbased )orers and cond"ct re"lar reie) of standard employment contracts &5EC' forseafarers. These contracts shall proide for minim"m employment standards herein en"merated "nder 5ection 2, of this R"le and shallreconie the preailin labor and social leislations at the site of employment and international conentions. The 5EC shall set theminim"m terms and conditions of employment. All employers and principals shall adopt the 5EC in connection )ith the hirin of )orers

*




)itho"t pre"dice to their adoption of other terms and conditions of employment oer and aboe the minim"m standards of theAdministration.>

and !OOP D$, RFE $%

5ec. 2. 4ro!nds for s!spension5cancellation of license.

f. 5"bstit"tin or alterin employment contracts and other doc"ments approed and erified by the Administration from the time ofact"al sinin thereof by the parties "p to and incl"din the period of e@piration of the same )itho"t the Administration:s approal.

The basic salary of One Tho"sand 9ie 8"ndred F.5. ?ollars &F51,/<<.<<' "aranteed to petitioner "nder the parties: standardemployment contract is in accordance )ith the minim!m employment standards )ith respect to )aes set by the ;OEA, Th"s, the sideareement )hich red"ced petitioner:s basic )ae to 5een 8"ndred 9ifty F.5. ?ollars &F57/<.<<' is n"ll and oid for iolatin the ;OEA:sminim"m employment standards, and for not hain been approed by the ;OEA. $ndeed, this side areement is a scheme all too freH"entlyresorted to by "nscr"p"lo"s employers aainst o"r helpless oerseas )orers )ho are compelled to aree to satisfy their basic economicneeds.

5econdly. The doctrine of laches or stale demands> cannot be applied to petitioner. 9or petitioner filed her claim )ell )ithin the three(yearprescriptie period for the filin of money claims set forth in Article 21 of the abor Code.

Thirdly, priate respondents Centr"m and Times as )ell as ;lannin +apan Co., td. K the aency:s forein principal K are solidarilyliable to petitioner for her "npaid )aes. This is in accordance )ith stip"lation 1.7 of the parties: standard employment contract )hichproides%

1.7. The Employer &in this case, ;lannin +apan Co., td.' and its local aent=promoter=representatie &priate respondent Centr"m;romotions ;lacement Corporation' shall be -ointly and severally responsible for the proper implementation of the terms and conditions inthis Contract.

This solidary liability also arises from the proisions of 5ection 1<&a'&2', R"le D, !oo $ of the Omnib"s R"les $mplementin the aborCode, as amended, th"s%

5ec. 1<. Re&!irement before recr!itment . K !efore recr"itin any )orer, the priate employment aency shall s"bmit to the !"rea" thefollo)in doc"ments%

a. A formal appointment or aency contract e@ec"ted by a forein(based employer in faor of the license holder to recr"it and hirepersonnel for the former . . . . 5"ch formal appointment or recr"itment areement shall contain the follo)in proisions, amonothers%

@ @ @

2. +ower of the agency to s!e and be s!ed -ointly and solidarily with the principal or foreign based employer for any of theviolations of the recr!itment agreement and the contracts of employment .

MARSAMAN MANNING AGENCY, INC. v. NLRCG.R. No. 14519. August 4, 1999BELLOSILLO, !.

"#$ts%

;riate respondent 6ilfredo T. Caeras )as hired by petitioner MAR5AMA3, the local mannin aent of petitioner ?$AMA3T$?E5, as ChiefCoo 5te)ard on the 'V +rigipos, o)ned and operated by ?$AMA3T$?E5, for a contract period of 1< months )ith a monthly salary ofF5*<<.<<, eidenced by a contract bet)een the parties dated 1/ +"ne 1/. Caeras started )or on - A""st 1/ b"t less than 2months later, or on 2- 5eptember 1/, he )as repatriated to the ;hilippines alleedly by m"t"al consent.>

;riate respondent Caeras filed a complaint for illeal dismissal aainst petitioners )ith the 3RC 3ational Capital Reion Arbitration!ranch allein that he )as dismissed illeally, denyin that his repatriation )as by m"t"al consent, and asin for his "npaid )aes,oertime pay, damaes, and attorney:s fees. Caeras alleed that he )as assined not only as Chief Coo 5te)ard b"t also as assistant

7




coo and messman in addition to performin ario"s inentory and reH"isition obs. !eca"se of his additional assinments he bean to feelsic "st a little oer a month on the ob constrainin him to reH"est for medical attention.

Issu&%

6O3 priate respondent )as illeally dismissed

H&'(%

$n the Contract of Employment entered into )ith priate respondent, petitioners coenanted strict and faithf"l compliance )ith the terms andconditions of the 5tandard Employment Contract approed by the ;OEA=?OE )hich proides%

1. The employment of the seaman shall cease "pon e@piration of the contract period indicated in the Cre) Contract !nless the 'aster and the Seaman, by m!t!al consent , in writing agree to an early termination...>

Fnder the foreoin, the employment of a 9ilipino seaman may be terminated prior to the e@piration of the stip"lated period proided that themaster and the seaman &a' m!t!ally consent thereto and &b' red"ce their consent in writing.

;etitioners do not deny the fact that they hae fallen short of the reH"irement. 3o doc"ment e@ists )hereby Capt. Aleos and priaterespondent red"ced to )ritin their alleed m"t"al consent> to the termination of their employment contract. $nstead, petitioners presentedthe essel:s ?ec o )herein an entry !nilaterally made by Capt. Aleos p"rported to sho) that priate respondent himself ased for hisrepatriation. 8o)eer, the 3RC correctly dismissed its eidentiary al"e. 9or one thin, it is a "nilateral act )hich is ehemently denied bypriate respondent. 5econdly, the entry in no )ay satisfies the reH"irement of a bilateral doc"mentation to proe early termination of anoerseas employment contract by m"t"al consent reH"ired by the 5tandard Employment Contract. 8ence, since the latter sets the minim"mterms and conditions of employment for the protection of 9ilipino seamen s"bect only to the adoption of better terms and conditions over and above the minim"m standards, the 3RC co"ld not be acc"sed of rae ab"se of discretion in not acceptin any thin less.

The disp"ted entry in the ?ec o )as neither a"thenticated nor s"pported by credible eidence. Altho"h petitioners claim that Caerassined his 5eaman:s 5erice Record !oo to sinify his conformity to the repatriation, the 3RC fo"nd the alleation to be act"ally "ntr"esince no sinat"re of priate respondent appeared in the Record !oo.

3either co"ld the Medical Report> prepared by ?r. 8oed be considered corroboratie and concl"sie eidence that priate respondent )ass"fferin from paranoia> and other mental problems,> s"pposedly "st ca"ses for his repatriation. 9irstly, absol"tely no eidence, not eenan alleation, )as offered to enlihten the 3RC or this Co"rt as to ?r. 8oed:s H"alifications to dianose mental illnesses. 5econdly, the

Medical Report prepared by ?r. 8oed contained only a eneral statement that priate respondent )as s"fferin from paranoia> and othermental problems> )itho"t proidin the details on ho) the dianosis )as arried at or in )hat stae the illness )as. $f ?r. 8oed indeedcompetently e@amined priate respondent then he )o"ld hae been able to disc"ss at lenth the circ"mstances and precedents of hisdianosis. 9"rthermore, neither did petitioners proe that priate respondent )as incompetent or contin"o"sly incapacitated for the d"ties for

)hich he )as employed by reason of his alleed mental state. On the contrary his ability as Chief Coo 5te)ard, "p to the ery moment ofhis repatriation, )as rated Dery #ood> in his 5eaman:s 5erice Record !oo as correctly obsered by p"blic respondent.

astly, on the amo"nt of salaries d"e priate respondent, the r"le has al)ays been that an illeally dismissed )orer )hose employment isfor a fi@ed period is entitled to payment of his salaries correspondin to the "ne@pired portion of his employment. 8o)eer on 1/ +"ly 1/,RA -<42 other)ise no)n as the Mirant 6orers and Oerseas 9ilipinos Act of 1/> too effect, 5ec. 1< of )hich proides%

5ec. 1<. $n case of termination of oerseas employment )itho"t "st, alid or a"thoried ca"se as defined by la) or contract, the )orershall be entitled to the f"ll reimb"rsement of his placement fee )ith interest at t)ele percent &12N' per ann!m, pl!s his salaries for the

!ne(pired portion of the employment contract or for three &6' months for every year of the !ne(pired term whichever is less.>

The abor Arbiter, rationaliin that the aforesaid la) did not apply since it became effectie only one &1' month after respondent:s oerseasemployment contract )as entered into on 1/ +"ne 1/, simply a)arded priate respondent his salaries correspondin to the "ne@piredportion of his employment contract, i .e., for -.* months. The 3RC affirmed the a)ard and the Office of the 5olicitor #eneral &O5#' f"llyareed. !"t petitioners no) insist that 5ec. 1<, RA -<42 is applicable beca"se altho"h priate respondent:s contract of employment )asentered into before the la) became effectie his alleed ca"se of action, i .e., his repatriation on 2- 5eptember 1/ )itho"t "st, alid ora"thoried ca"se, occ"rred )hen the la) )as already in effect. ;etitioners: p"rpose in so ar"in is to inoe the la) in "stifyin a lessermonetary a)ard to priate respondent, i .e., salaries for months only p"rs"ant to the last portion of 5ec. 1< as opposed to the salaries for-.* months a)arded by the abor Arbiter and affirmed by the 3RC.

-




5ec. 1<, RA -<42, applies in the case of priate respondent and to all oerseas contract )orers dismissed on or after its effectiity on 1/+"ly 1/ in the same )ay that 5ec. 4, 2- RA *71/,2 is made applicable to locally employed )orers dismissed on or after 21 March1-.< 8o)eer, )e cannot s"bscribe to the ie) that priate respondent is entitled to three &' months: salary only. A plain readin of 5ec.1< clearly reeals that the choice of )hich amo"nt to a)ard an illeally dismissed oerseas contract )orer, i .e., )hether his salaries for the"ne@pired portion of his employment contract or three &' months: salary for eery year of the "ne@pired term, )hicheer is less, comes intoplay only )hen the employment contract concerned has a term of at least one &1' year or more. This is eident from the )ords for eeryyear of the "ne@pired term> )hich follo)s the )ords salaries . . . for three months.>

EOLE v. NAARRAG.R. No. 119361. "&u#2 19, 41ARDO, !.

"#$ts%

+ob and Rodolfo, alon )ith Rodolfo:s )ife2 Coraon, operated an aency )hich p"rported to hae the a"thority to recr"it and place )orers for employment in Tai)an. The aency )as named Rodolfo 3aarra:s Trael Cons"ltant and #eneral 5erices &R3TC#5>', )hichin the co"rse of its operation )as able to ictimie seeral hapless ictims )ho neer left ;hilippine soil, and in d"e time, filed complaints

)ith the ;hilippine Oerseas Employment Aency &;OEA' aainst acc"sed for illeal recr"itment.

3either R3TC#5 nor Rodolfo, Coraon or +ob in their personal capacities )ere licensed or a"thoried by the ;hilippine OerseasEmployment Administration to recr"it )orers for oerseas employment.

The trial co"rt s"mmaried the testimonies of complainants, th"s%

MER$E D$E5CA identified Rodolfo as the one )ith )hom she applied to for employment in Tai)an on May *, 12, at the R3TC#5office in 3oaliches, "eon City. As placement fee she paid fifteen tho"sand pesos &;1/,<<<.<<' to $nday ;ada)an &Rodolfo:s coo andla"ndry)oman, hereafter, $nday>', at Coraon and Rodolfo:s ho"se, and another fifteen tho"sand pesos &;1/,<<<.<<' on ?ecember 22,12. 5he identified +ob as the administratie officer of R3CT#5, )ho entertained her and the other applicants d"rin the times she isitedthe aency:s office to follo) "p her application.

#$CER$A MAR$3A5 sinled o"t +ob as the one )ho recr"ited her for employment in Tai)an as a factory )orer. 5he testified that she )as recr"ited by +ob on April 24, 12 at R3TC#5 )here she )as told that she and her co(applicants )o"ld leae for Tai)an t)o monthsafter they applied on April 24, 12. 5he ae +ob all the reH"irements the aency ased for incl"din her passport and birth certificate. 5he

)as also reH"ired to pay a placement fee of t)enty tho"sand pesos &;2<,<<<.<<', altho"h the receipt ien to her )as only for the amo"ntof fifteen tho"sand pesos &;1/,<<<.<<'. 5he ae her passport to +ob and she handed the placement fee to $nday )ho ae it to Coraon inher presence.

!E$3DE3$?A AMFTA3 testified that )hile in Rodolfo:s ho"se in 3oaliches, "eon City, on May 11, 12, Rodolfo promised her that she )o"ld be able to leae for Tai)an "pon payment of a t)enty tho"sand pesos &;2<,<<<.<<' placement fee. On April 11, 12, !einenidapaid the amo"nt to $nday )ho ae it to Coraon in !einenida:s presence. 5he neer had the chance to o to Tai)an. Fpon inestiation

)ith the ;OEA, she discoered that R3TC#5 )as not reistered.

ER3E5TO AMFTA3 testified that in April 12, he filed an application to )or at a factory in Tai)an before Coraon in the R3TC#5office. $t )as Coraon )ho interie)ed him and ased him to s"bmit some reH"irements. 6hile at the said office, he sa) Rodolfo there, )hoae him the ass"rance that he )o"ld be able to leae for Tai)an immediately. 8e )as neer deployed to Tai)an, despite payin aplacement fee of t)enty tho"sand pesos &;2<,<<<.<<'.

9OR$E RO5E RAMO5 testified that she applied )ith R3TC#5 as a factory )orer for Tai)an and that she paid a placement fee oft)enty fie tho"sand pesos &;2/,<<<.<<' and another payment of one tho"sand pesos &;1,<<<.<<' as medical fee. 5he )ent to R3TC#5d"rin the last )ees of 9ebr"ary, March and April 12 and )as interie)ed by +ob. 5he )as introd"ced to Rodolfo by her co(complainantEelyn lacas. 5he )as not able to leae for Tai)an, neither )as she able to retriee her payments from R3TC#5 for )hen she )ent to theoffice on ?ecember 2, 1, it had already been raided by the C$5 and ;OEA for recr"itin for oerseas employment )itho"t license ora"thority.

$6AB6AB CRFU testified that she isited Rodolfo and Coraon:s ho"se and came to no) that Rodolfo )as the ;resident of R3TC#5,an aency )hich deported itself to her as and aency p"rportin to hae a"thority to recr"it )orers for placement in Tai)an. That on April




1, she )ent to Rodolfo:s ho"se to inH"ire abo"t the processin of her papers for employment in Tai)an. There she )as ass"red byRodolfo that Coraon )as in Tai)an and )as already tain care of her application.

O$?A MACA5O testified that she came to no) Rodolfo )hen she isited $nday on ?ecember , 11, at Rodolfo:s ho"se and Rodolfoand Coraon recr"ited her to )or as a factory )orer in Tai)an. 9or this p"rpose she paid the spo"ses ten tho"sand pesos &;1<,<<<.<<'placement fee on +an"ary -, 12. 5he )as neer sent to Tai)an.

Issu&%

6O3 acc"sed(appellants are "ilty of illeal recr"itment

H&'(%

A *o*')$&*s&& or *o*o'(& of a"thority means any person, corporation or entity )itho"t a alid license or a"thority to enae inrecr"itment or placement from the 5ecretary of abor, or )hose license or a"thority has been s"spended, reoed or cancelled by the;hilippine Oerseas Employment Administration or the 5ecretary of abor. 2- Fnder Article 1&b' of the abor Code, &$u)t0&*t #*(-'#$&0&*t refer to%

... any act of canassin, enlistin, contractin, transportin, "tiliin, hirin or proc"rin )orers, and incl"des referrals, contractserices, promisin or adertisin for employment, locally or abroad, )hether for profit or not% ;roided, that any person or entity )hich inany manner, offers or promises for a fee employment to t)o or more persons shall be deemed enaed in recr"itment and placement.>

Acc"sed(appellants committed acts of recr"itment and placement, s"ch as promises to the complainants of profitable employment abroadand acceptance of placement fees. Acc"sed(appellants ae the impression that they had the po)er to send the complainants to Tai)an foremployment.

6ith the certification from the ?epartment of abor and Employment statin that R3TC#5 )as not a"thoried to recr"it )orers foroerseas employment, and promises by the acc"sed of employment abroad for complainants on payment of placements fees, the concl"sionis inescapable that acc"sed are liable for illeal recr"itment.

Article - &b' of the abor Code, as amended by ;. ?. 3o. 2<1- proides that illeal recr"itment shall be considered an offense inolineconomic sabotae if any of the follo)in H"alifyin circ"mstances e@ists% 9irst, )hen illeal recr"itment is committed by a syndicate. 9orp"rposes of the la), a s2*()$#t& e@ists )hen three or more persons conspire or confederate )ith one another in carryin o"t any "nla)f"l orilleal transaction, enterprise or scheme. 5econd, there is economic sabotae )hen illeal recr"itment is committed in a lare scale, as

)hen it is committed aainst three or more persons indiid"ally or as a ro"p.

The acts of acc"sed(appellants sho)ed "nity of p"rpose. All these acts establish a common criminal desin m"t"ally deliberated "pon andaccomplished thro"h coordinated moes.

Een ass"min that there )as no conspiracy, the record clearly sho)s illeal recr"itment committed in a lare scale, since at least *complainants )ere ictims, )hich is more than the minim"m n"mber of persons reH"ired by la) to constit"te illeal recr"itment in a larescale, res"ltin in economic sabotae.

EOLE v. GASACAOG.R. No. 168++. Nov&0& 11, 4YNARES7SANTIAGO, !.

"#$ts%

Appellant )as the Cre)in Manaer of #reat Eastern 5hippin Aency $nc., a licensed local mannin aency, )hile his nephe) and co(acc"sed, +ose #asacao, )as the ;resident. As the cre)in manaer, appellant:s d"ties incl"ded receiin ob applications, interie)in theapplicants and informin them of the aency:s reH"irement of payment of performance or cash bond prior to deployment.

On A""st 4, 2<<<, appellant and +ose #asacao )ere chared )ith are 5cale $lleal Recr"itment defined "nder 5ection *, pararaphs&a', &l' and &m' of Rep"blic Act &RA' 3o. -<42 or the Mirant 6orers and Oerseas 9ilipinos Act of 1/, and penalied "nder 5ection 7 &b'of the same la), before the RTC of "eon City.

4<




Issu&%

6O3 error attended the trial co"rt:s findins, as affirmed by the Co"rt of Appeals, that appellant )as "ilty beyond reasonable do"bt of thecrime of lare scale illeal recr"itment

8eld%

RA 3o. -<42 defines illeal recr"itment as follo)s%

5ec. *. ?E9$3$T$O35. G 9or p"rposes of this Act, illeal recr"itment shall mean any act of canassin, enlistin, contractin, transportin,"tiliin, hirin, proc"rin )orers and incl"des referrin, contract serices, promisin or adertisin for employment abroad, )hether forprofit or not, )hen "ndertaen by a non(licensee or non(holder of a"thority contemplated "nder Article 1&f' of ;residential ?ecree 3o. 442,as amended, other)ise no)n as the abor Code of the ;hilippines% ;roided, that s"ch non(licensee or non(holder )ho, in any manner,offers or promises for a fee employment abroad to t)o or more persons shall be deemed so enaed. $t shall lie)ise incl"de the follo)inacts, )hether committed by any persons, )hether a non(licensee, non(holder, licensee or holder of a"thority.

a. To chare or accept directly or indirectly any amo"nt reater than the specified in the sched"le of allo)able fees prescribed by the5ecretary of abor and Employment, or to mae a )orer pay any amo"nt reater than that act"ally receied by him as a loan or adance0

@ @ @

f. 9ail"re to act"ally deploy )itho"t alid reason as determined by the ?epartment of abor and Employment0 and

@ @ @

m. 9ail"re to reimb"rse e@penses inc"rred by the )orers in connection )ith his doc"mentation and processin for p"rposes of deployment,in cases )here the deployment does not act"ally tae place )itho"t the )orer:s fa"lt. $lleal recr"itment )hen committed by a syndicate orin lare scale shall be considered as offense inolin economic sabotae.

$lleal recr"itment is deemed committed by a syndicate carried o"t by a ro"p of three &' or more persons conspirin or confederatin )ithone another. $t is deemed committed in lare scale if committed aainst three &' or more persons indiid"ally or as a ro"p.>

A ')$&*s& is a doc"ment iss"ed by the ?epartment of abor and Employment &?OE' a"thoriin a person or entity to operate a priateemployment aency, )hile an #uto)t2 is a doc"ment iss"ed by the ?OE a"thoriin a person or association to enae in recr"itment and

placement actiities as a priate recr"itment entity. 8o)eer, it appears that een licensees or holders of a"thority can be held liable forilleal recr"itment sho"ld they commit any of the aboe(en"merated acts.

There is no merit in appellant:s contention that he co"ld not be held liable for illeal recr"itment since he )as a mere employee of themannin aency, p"rs"ant to 5ection * of RA 3o. -<42 )hich proides%

The persons criminally liable for the aboe offenses are the principals, accomplices and accessories. $n case of "ridical persons, theofficers hain control, manaement or direction of their b"siness shall be liable.>

Contrary to appellant:s claim, he is not a mere employee of the mannin aency b"t the cre)in manaer. As s"ch, he receies obapplications, interie)s applicants and informs them of the aency:s reH"irement of payment of performance or cash bond prior to theapplicant:s deployment. As the cre)in manaer, he )as at the forefront of the company:s recr"itment actiities.

To proe illeal recr"itment, it m"st be sho)n that appellant ae complainants the distinct impression that he had the po)er or ability tosend complainants abroad for )or s"ch that the latter )ere coninced to part )ith their money in order to be employed. I1<J Appellant:s act ofpromisin the priate complainants that they )ill be deployed abroad )ithin three months after they hae paid the cash bond clearly sho)sthat he is enaed in illeal recr"itment.

Een ass"min that appellant )as a mere employee, s"ch fact is not a shield aainst his coniction for lare scale illeal recr"itment. $n thecase of +eople v. #abais, the Co"rt held that an employee of a company or corporation enaed in illeal recr"itment may be held liable asprincipal, toether )ith his employer, if it is sho)n that he actiely and conscio"sly participated in the recr"itment process.

Appellant is "ilty beyond reasonable do"bt of lare scale illeal recr"itment. $t )as established that he promised oerseas employment tofie applicants, herein priate complainants. 8e interie)ed and reH"ired them to complete and s"bmit doc"ments p"rportedly needed for

41

http://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/168445.htm#_ftn12

http://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/168445.htm#_ftn12




their employment. Altho"h he informed them that it is optional, he collected cash bonds and promised their deployment not)ithstandin theproscription aainst its collection "nder 5ection *< of the Omnib"s R"les and Re"lations $mplementin R.A. 3o. -<42 )hich state that%

5EC. *<. o))t)o* o* Bo*(s #*( D&-os)ts. $n no case shall an employment aency reH"ire any bond or cash deposit from the )orer to "arantee performance "nder the contract or his=her repatriation.>

appellant failed to deploy the priate complainants )itho"t any alid reason, this not)ithstandin his promise to them that those )ho can pay

the cash bond )ill be deployed )ithin three months from payment of the same. 5"ch fail"re to deploy constit"tes a iolation of 5ection * &l'of RA 3o. -<42. 6orse, )hen it became clear that appellant cannot deploy the priate complainants )itho"t their fa"lt, he failed to ret"rn theamo"nt of the cash bond paid by them.

$lleal recr"itment is deemed committed in '#g& s$#'& if committed aainst three or more persons indiid"ally or as a ro"p. $n this case,fie complainants testified aainst appellant:s acts of illeal recr"itment, thereby renderin his acts tantamo"nt to economic sabotae. Fnder5ection 7 &b' of RA 3o. -<42, the penalty of life imprisonment and a fine of not less than ;/<<,<<<.<< nor more than ;1,<<<.<<<.<< shall beimposed if illeal recr"itment constit"tes economic sabotae.

EASTERN ASSURANCE < SURETY COR. ?EASCO v. SECRETARY O" LABORG.R. No. L759+367. !#*u#2 15, 199NARASA, !.

"#$ts%

9rom +"ne 1- to ?ecember 1-/ persons applied for oerseas employment )ith + ! Manpo)er 5pecialist, $nc. $n consideration ofpromised deployment, complainants paid respondent ario"s amo"nts for ario"s fees. Most of: the receipts iss"ed )ere sihed by Mrs.!aby !"ndalian, E@ec"tie Dice(;resident of + !.

!eca"se of non(deployment the applicants filed separate complaints )ith the icensin and Re"lation Office of ;OEA aainst + ! foriolation of Articles 2 and 4 &a' of the abor Code bet)een the months of April to October 1-/.

$n its separate Ans)er, EA5CO essentially disclaimed liability on the ro"nd that the claims )ere not e@pressly coered by the bond, that;OEA had no "risdiction to order forfeit"re of the bond, that some of the claims )ere paid beyond or prior to the period of effectiity of thebond.

The ;OEA Administrator iss"ed an Order in faor of complainants )hich contained the follo)in statement and direction th"s%Respondent )as s"spended on May 2, 1-/, +"ne 2*, 1-/ and +an"ary 17, 1-* all for illeal e@action. Considerin its trac record ofilleal e@action actiities and considerin f"rther the ross iolation of recr"itment r"les and re"lations established aainst it in the instantcases, and the e@piration of its license on 9ebr"ary 1/, 1-/, it is hereby foreer banned from participation in the oerseas employmentproram. $t is ordered to cease and desist from f"rther enain in recr"itment actiities other)ise Vit shall be prosec"ted for illealrecr"itment.> Respondent + ! Manpo)er 5pecialist is directed to ref"nd all complainants as listed in the Order of 5eptember -, 1-*.Respondent Eastern Ass"rance and 5"rety Corporation is hereby fo"nd ointly and seerally liable )ith respondent + ! Manpo)er5pecialist to ref"nd nineteen &1' complainants in the modified amo"nts.>

Issu&%

6O3 the ;OEA and 5ecretary of abor had no "risdiction oer the claims for ref"nd filed by non(employees0

H&'(%

The complaints are for iolation of Articles 2 and 4 a' of the abor Code. Article 2 and pararaph &a' of Article 4 read as follo)s%

Art. 2. ees to be paid by wor$ers.KAny person applyin )ith a priate fee(charin employment aency for employment assistanceshall not be chared any fee "ntil he has obtained employment thro"h its efforts or has act"ally commenced employment. 5"ch fee shall beal)ays coered )ith the approed receipt clearly sho)in the amo"nt paid. The 5ecretary of abor shall prom"late a sched"le of allo)ablefees.

Art. 4. +rohibited practices.K$t shall be "nla)f"l for any indiid"al, entity, licensee, or holder of a"thority%

42




a' To chare or accept, directly or indirectly, any amo"nt reater than that specified in the sched"le of allo)able fees prescribed bythe 5ecretary of abor, or to mae a )orer pay any amo"nt reater than act"ally receied by him as a loan or adance0>

The penalties of s"spension and cancellation of license or a"thority are prescribed for iolations of the aboe H"oted proisions, amonothers. And the 5ecretary of abor has the po)er "nder 5ection / of the la) to apply these sanctions, as )ell as the a"thority, conferred by5ection *, not only, to restrict and re"late the recr"itment and placement actiities of all aencies,> b"t also to prom"late r"les andre"lations to carry o"t the obecties and implement the proisions> oernin said actiities. ;"rs"ant to this r"le(main po)er th"s

ranted, the 5ecretary of abor ae the ;OEA >on its o)n initiatie or "pon filin of a complaint or report or "pon reH"est for inestiationby any arieed person, . . . &a"thority to' cond"ct the necessary proceedins for the s"spension or cancellation of the license or a"thorityof any aency or entity> for certain en"merated offenses incl"din K

1. the imposition or acceptance, directly or indirectly, of any amo"nt of money, oods or serices, or any fee or bond in e@cess of )hat is prescribed by the Administration, and

2. any other iolation of pertinent proisions of the abor Code and other releant la)s, r"les and re"lations.

$mplicit in these po)ers is the a)ard of appropriate relief to the ictims of the offenses committed by the respondent aency or contractor,specially the ref"nd or reimb"rsement of s"ch fees as may hae been fra"d"lently or other)ise illeally collected, or s"ch money, oods orserices imposed and accepted in e@cess of )hat is licitly prescribed.

SORIANO v. O""SHORE SHIING AND MANNING COR.G.R. No. 58+9. S&-t&0& 1+, 1989"ERNAN, C.!.

"#$ts%

;etitioner 3orberto 5oriano, a licensed 5econd Marine Enineer, so"ht employment and )as hired by priate respondent Pn"t Pn"tsenO.A.5. thro"h its a"thoried shippin aent in the ;hilippines, Offshore 5hippin and Mannin Corporation. As eidenced by the Cre)Areement, petitioner )as hired to )or as Third Marine Enineer on board Pn"t ;roider> )ith a salary of F5-<<.<< a month on acond"ction basis for a period of fifteen &1/' days. 8e admitted that the term of the contract )as e@tended to si@ &*' months by m"t"alareement on the promise of the employer to the petitioner that he )ill be promoted to 5econd Enineer. Th"s, )hile it appears thatpetitioner oined the aforesaid essel on +"ly 2, 1-/ he sined off on 3oember 27, 1-/ d"e to the alleed fail"re of priate respondent(employer to f"lfill its promise to promote petitioner to the position of 5econd Enineer and for the "nilateral decision to red"ce petitioner:sbasic salary from F5-<<.<< to F5/*<.<<. ;etitioner )as made to sho"lder his ret"rn airfare to Manila.

;etitioner filed )ith the ;hilippine Oerseas Employment Administration &;OEA for short', a complaint aainst priate respondent forpayment of salary differential, oertime pay, "npaid salary for 3oember, 1-/ and ref"nd of his ret"rn airfare and cash bond alleedly in theamo"nt of ;2<,<<<.<< contendin therein that priate respondent "nilaterally altered the employment contract by red"cin his salary ofF5-<<.<< per month to F5/*<.<<, ca"sin him to reH"est for his repatriation to the ;hilippines. Altho"h repatriated, he claims that hefailed to receie payment for the follo)in%

1. 5alary for 3oember )hich is eH"ialent to F5-<<.<<02. eae pay eH"ialent to his salary for 1*./ days in the s"m of F544<.<<0. 5alary differentials )hich is eH"ialent to F524<.<< a month for fo"r &4' months and one &1' )ee in the total s"m of

F51,<2<,<<04. 9i@ed oertime pay eH"ialent to F524<.<< a month for fo"r &4' months and one &1' )ee in the s"m of F51,<2<.<<0/. Oertime pay for 14 5"ndays eH"ialent to F54-4.0

*. Repatriation cost of F54/.4*07. ;etitioner:s cash bond of ;2<,<<<.<<.

Respondent ;OEA r"led as follo)s% D$E6E? $3 T8E $#8T O9 T8E 9ORE#O$3#, respondents are hereby ordered to paycomplainant, ointly and seerally )ithin ten &1<' days from receipt hereof the amo"nt of ;1/,<<<.<< representin the reimb"rsement of thecash bond deposited by complainant less F52-/.- &to be conerted to its peso eH"ialent at the time of act"al payment'.>

$ss"e%6O3 p"blic respondent committed rae ab"se of discretion and=or acted )itho"t or in e@cess of "risdiction by disreardin the alteration

of the employment contract made by priate respondent &;etitioner claims that the alteration by priate respondent of his salary and oertimerate )hich is eidenced by the Cre) Areement and the e@it pass constit"tes a iolation of Article 4 of the abor Code of the ;hilippines.'

4




H&'(%

There is no alteration made in the Cre) Areement or in the E@it ;ass. As the oriinal data appear, the fi"res F5-<<.<< fall "nder thecol"mn salary, )hile the )ord incl"sie> is indicated "nder the col"mn oertime rate. 6ith the s"pposed alterations, the fi"res F5/*<.<<

)ere hand)ritten aboe the fi"res F5-<<.<< )hile the fi"res F524<.<< )ere also )ritten aboe the )ord incl"sie>.

Moreoer, the presence of petitioner:s sinat"re after said items renders improbable the possibility that petitioner co"ld haemis"nderstood the amo"nt of compensation he )ill be receiin "nder the contract. 3or has petitioner adanced any e@planation forstatements contrary or inconsistent )ith )hat appears in the records. Th"s, he claimed% IaJ that priate respondent e@tended the d"ration ofthe employment contract indefinitely, b"t admitted in his Reply that his employment contract )as e@tended for another * months byareement bet)een priate respondent and himself% IbJ that )hen petitioner demanded for his oertime pay, respondents repatriatedhim )hich aain )as discarded in his reply statin that he himself reH"ested for his ol"ntary repatriation beca"se of the bad faith andinsincerity of priate respondent0 IcJ that he )as reH"ired to post a cash bond in the amo"nt of ;2<,<<<.<< b"t it )as fo"nd that he depositedonly the total amo"nt of ;1/,<<<.<<0 IdJ that his salary for 3oember 1-/ )as not paid )hen in tr"th and in fact it )as petitioner )ho o)espriate respondent F52-/.- for cash adances and on 3oember 27, 1-/ the final pay slip )as e@ec"ted and sined0 and IeJ that hefinished his contract )hen on the contrary, despite proddins that he contin"e )orin "ntil the rene)ed contract has e@pired, he adamantlyinsisted on his termination.

Article 4 pararaph &i' of the abor Code reads%

;rohibited ;ractices. K $t shall be "nla)f"l for any indiid"al, entity, licensee, or holder of a"thority%

@ @ @

&i' To s"bstit"te or alter employment contracts approed and erified by the ?epartment of abor from the time of act"al sinin thereof bythe parties "p to and incl"din the period of e@piration of the same )itho"t the approal of the ?epartment of abor.>

$n the case at bar, both the abor Arbiter and the 3ational abor Relations Commission correctly analyed the H"estioned annotations asnot constit"tin an alteration of the oriinal employment contract b"t only a clarification thereof )hich by no stretch of the imaination can beconsidered a iolation of the aboe(H"oted la). Fnder similar circ"mstances, this Co"rt r"led that as a eneral proposition, e@ceptions fromthe coerae of a stat"te are strictly constr"ed. !"t s"ch constr"ction neertheless m"st be at all times reasonable, sensible and fair. 8ence,to r"le o"t from the e@emption amendments set forth, altho"h they did not materially chane the terms and conditions of the oriinal letter ofcredit, )as held to be "nreasonable and "n"st, and not in accord )ith the declared p"rpose of the Marin a).

EOLE v. DIA;TORRES, !R., !.

"#$ts%

Mary Anne 3aarro )as 22 years old, sinle and a st"dent of the Fniersity of the $mmac"late Concepcion in 12, tain "p !achelor of5cience in M"sic, ?aao City.

Maria Theresa 9abricante )as 2 years old, sinle and obless in 12. 5he is accordinly a commerce rad"ate of the 3otre ?ameFniersity in Cotabato City.

Maria Elena Ramire )as 27 years old, married and a b"siness)oman in 12. 5he is accordinly a collee rad"ate of the Fniersity ofMindanao in ?aao City )here she finished the co"rse of !achelor of 5cience in Commerce, maor in manaement.

9rom the combined testimonies of these three complainants, the Co"rt has athered that this is )hat happened, )hich ae rise to thiscase%

$n +"ne 12 they )ere all enrolled at the 8enichi Techno E@chane C"lt"ral 9o"ndation in ?aao City, st"dyin 3ipono. Their teacher )as Mrs. Remedios Aplicador.

One day Mrs. Aplicador told them that if they )anted to o and )or abroad, partic"larly !r"nei )here they co"ld earn a salary of 7<<.<<for fo"r ho"rs daily )or,> she )o"ld refer them to Mr. ;a"lo im )ho ne) one Enr. Er)in ?ia )ho )as recr"itin applicants for !r"nei.

44




Accompanied by Mrs. Aplicador, the three complainants )ent to Mr. ;a"lo im )ho e@plained to them that he )as not the one recr"itin )orers b"t Enr. ?ia. Mr. im informed them that his children had already applied )ith Enr. ?ia and that the reH"irements )ere bio(data,passport, medical chec"p, $.?. and income ta@ ret"rn, and ;2,/<<.<< for processin of their papers. Tellin them that he ne) pretty )ellthe recr"iter> Enr. ?ia and that 6e don:t hae to )orry )e can really o abroad and as a matter of fact he said that his three children )ereapplyin &to o' to !r"nei,> he offered to accompany them to Enr. Er)in ?ia at the office of the C$5. They ased Mr. im )hen he )asaailable, and he said +"ly 1- &12', 5at"rday mornin.

On +"ly 1-, Mr. ;a"lo im and Mrs. Remedios Aplicador accompanied the three complainants to Enr. ?ia )ho )as then bein detainedin the C$5 ?etention Center in ?aao City and introd"ced them to him. The complainants ased Enr. ?ia )hy he )as inside the cell,> andhe e@plained that fo"r applicants had filed a case aainst him beca"se they co"ld not accept that they )ere sic of hepatitis and that theC$5 elements are "st main money o"t of it>. They ased him if he )as recr"itin applicants for !r"nei> and he said yes>0 they alsoinH"ired )hat )ere the reH"irements, and he said fo"r passport sie pict"res of each applicant, bio(data, income ta@ ret"rn, medicalcertificate, 3!$ clearance, passport, ;2,/<<.<< for processin of the papers of each applicant, and ;*/,<<<.<< as placement fee, b"t only;2<,<<<.<< for plane fare )as to be paid by each applicant, the balance of ;4/,<<<.<< )as to be paid by means of salary ded"ctions. The;2,/<<.<< for processin of their respectie applications )as to be paid at the ho"se of Enr. ?ia at 14 Aries 5treet, #5$5 8eihts, ?aaoCity.

Mary Anne 3aarro paid ;2,<<.<< to Enr. ?ia at his residence on +"ly 22, 12. There is no e@planation by her )hy she paid only;2,<<.<< and not ;2./<<.<<.

Maria Theresa 9abricante paid only ;2,<<<.<< to Enr. ?ia also on +"ly 22, 12. 5he paid only that amo"nt beca"se, accordin to hertestimony, she already had a passport and Enr. ?ia said she )as reH"ired to pay only ;2,<<<.<<.

Maria Elena Ramire paid to Enr. ?ia ;2,/<<.<< b"t she lost her receipt. 8o)eer, it )as ret"rned to her by Enr. ?ia on A""st 17,12.

After s"bmittin to the acc"sed all the reH"ired papers and "nderoin medical e@amination &before the ret"rn of said amo"nts to thecomplainants', they ased him )hen they co"ld leae. The acc"sed told them to )ait for three to fo"r )ees as his papers )ere still beinprocessed by the C$5. ?"rin this period )hen the acc"sed had already been released from detention, the complainants ept inH"irin fromhim )hen they )o"ld be leain for !r"nei, oin to his ho"se seeral times )here they sa) many other applicants lie them. !"t theacc"sed "st ept sayin that his papers )ere still )ith the C$5.

6hen he )as still detained, he told the complainants that the name of his aency is confidential b"t the o)ner thereof is Erlinda

Rom"alde> )ho "sed to be her &sic' mistress> ass"rin them that )e don:t hae to )orry abo"t it beca"se he said it is oernment proectand then he said he )ill escort "s to ;hilippine ;laa 8otel for briefin before leain for abroad and after the briefin at the ;hilippine ;laa8otel )e )ill proceed to ;OEA )here )e )ill sin a contract that is the time )e )ill ie him the amo"nt of ;2<,<<<.<< and then )e )illproceed to the residence of Erlinda Rom"alde )here )e )ill be stayin for three days>.

Issu&%


H&'(%

The crime of )''&g#' &$u)t0&*t, as defined "nder Articles - &a' in relation to Articles 1 &b' and 4 and penalied "nder Article of theabor Code, as amended by ;residential ?ecree 12< and ;residential ?ecree 2<1-, is any recr"itment actiity, incl"din the prohibited

practices en"merated "nder Article 4, "ndertaen by a non(licensee or non(holder of a"thority.

$n +eople v. #abacang, the Co"rt r"led that the crime of illeal recr"itment is committed )hen t)o elements conc"r, namely%

1. That the offender has no alid license or a"thority reH"ired by la) to enable one to la)f"lly enae in recr"itment and placement of )orers0 and,

2. That the offender "ndertaes either any actiity )ithin the meanin of recr"itment and placement defined "nder Article 1&b', orany prohibited practices en"merated "nder Article 4.

Article 1 &b' of the abor Code, proides for the stat"tory definition of recr"itment and placement,> as follo)s%

4/

http://www.chanrobles.com/scdecisions/jurisprudence1996/jul1996/112175.php#_edn5





R&$u)t0&*t #*( -'#$&0&*t refers to any act of canassin, enlistin, contractin, transportin, "tiliin, hirin or proc"rin )orers,and incl"des referrals, contract serices, promisin or adertisin for employment, locally or abroad, )hether for profit or not0 ;roided thatany person or entity )hich in any manner offers or promises for a fee employment to t)o or more persons shall be deemed enaed inrecr"itment and placement.>

any of the acts mentioned in Article 1&b' )ill constit"te recr"itment and placement een if only one prospectie )orer is inoled. Then"mber of persons dealt )ith is not an essential inredient of the act of recr"itment and placement.

Article -&a' clearly sho)s that illeal recr"itment is an offense )hich is essentially committed by a non(licensee or non(holder of a"thority.

A *o*7')$&*s&& or *o*7o'(& o/ #uto)t2 means any person, corporation or entity )hich has not been iss"ed a alid license ora"thority to enae in recr"itment and placement by the 5ecretary of abor, or )hose license or a"thority has been s"spended, reoed orcancelled by the ;OEA or the 5ecretary.

Moreoer, recr"itment and placement actiities of aents or representaties )hose appointments by a licensee or holder of a"thority )erenot preio"sly a"thoried by the ;OEA shall lie)ise constit"te illeal recr"itment.

The elements of the crime of )''&g#' &$u)t0&*t )* '#g& s$#'& are%

1. the offender is a non(licensee or non(holder of a"thority to enae in recr"itment and placement actiity,2. the offender "ndertaes recr"itment and placement actiity defined "nder Article 1&b', or any prohibited practices en"merated

"nder Article 4, and. illeal recr"itment is committed aainst three or more persons indiid"ally or as a ro"p.

The acts of the appellant, )hich )ere clearly described in the l"cid testimonies of the three ictims, s"ch as collectin from each of thecomplainants payment for passport, medical tests, placement fee, plane ticets and other s"ndry e@penses, promisin them employmentabroad, contractin and adertisin for employment, "nH"estionably constit"te acts of lare scale illeal recr"itment.

A person is "ilty of illeal recr"itment )hen he ies the impression that he has the po)er to send )orers abroad. Appellant ?iamanifestly ae that impression to the three complainants that he had the ability to send )orers abroad. Misrepresentin himself as arecr"iter of )orers for !r"nei, he promised them )or for a fee and coninced them to ie their money for the p"rpose of ettin anemployment oerseas.

EOLE v. GUTIERRE;G.R. No. 14++39. "&u#2 , 4+.T'NGA, !.

"#$ts%

On April 1-, 14, Rosemarie T"ade )ent to the ho"se of one Celia !a"tista, a recr"iter(aent> of the acc"sed, at !ry. !"lala, Dian,$locos 5"r. Celia told Rosemarie that she had to s"bmit the follo)in reH"irements for her application to )or in ?"bai as a domestic helper%;4,<<<.<< as placement fee, ;1,2<<.<< for passport, ;-/<.<< for medical,> si@ &*' 2@2 pict"res and her oriinal birth certificate.

The ne@t day, Rosemarie, toether )ith recr"iter(aent> Celia !a"tista and fello) applicant Eelyn Ramos, traeled to Manila to theho"se of one Esther #amilde, another of the acc"sed:s recr"iter(aents.> There, Rosemarie and Eelyn filled o"t their bio(data forms. Thet)o then "nder)ent a medical e@amination before hain their )hole(body pict"re taen. Esther told them that they )o"ld no) the res"lts

of their application from Celia.

T)o )ees later, Celia told Rosemarie that her application for ?"bai )as already approed and that she )ill be receiin 1/<.<<(dollarsper month. 9or the first months, ho)eer, there )ill be salary ded"ctions.

On A""st 27, 14, Rosemarie and Eelyn, alon )ith Celia and Esther, )ent to the acc"sed:s office at 5arif"din Manpo)er and #eneral5erices at E?5A E@tension, ;asay City. The acc"sed told Rosemarie that she needed to pay ;2,<<<.<< more. The acc"sed said she hadreceied all of Rosemarie:s doc"ments and the money paid to Celia. Tr"stin in Celia, Rosemarie did not demand a receipt from theacc"sed.

4*






;riate complainant Eelyn Ramos )as )ith Rosemarie )hen she )ent to Celia !a"tista:s ho"se on April 1, 14. Celia told Eelyn thatfor ;4,<<<.<< she co"ld leae for ?"bai to )or as a domestic helper. ie Rosemarie, Eelyn ae all her doc"ments and paid the fees toCelia, )ho in t"rn handed them to Esther #amilde in Tondo. On +"ne 1<, 14, Ramos ae !a"tista ;-,<<<.<<, )hich )as also t"rned oerto #amilde.

On A""st 22, 14, Celia told Eelyn that she only had to )ait one more )ee before she left for ?"bai. On A""st 27, 14, Estherbro"ht Eelyn to the acc"sed:s office, )here the acc"sed ased for an additional ;2,<<<.<< as processin fee for the ;hilippine Oerseas

Employment Aency &;OEA'. Eelyn paid the amo"nt on A""st 1, 14, incl"din a terminal fee of ;/<<.<<. ie Rosemarie, Eelyn )asnot able to leae the co"ntry despite the acc"sed:s promises.

Another complainant, Rosalyn 5"mayo, also applied for oerseas ob placement as a domestic helper in ?"bai. 8er e@perience )as moreaoniin. $n her case, it )as one Marilyn #arcia )ho assisted Rosalyn. 5he s"bmitted a copy of her birth certificate, * copies of 2 @ 2pict"res, 2 copies of her )hole(body pict"re, passport, and medical certificate. Marilyn also ased Rosalyn to pay% a processin fee of;7,/<<.<<, ;2,*2<.<< as f"ll ta@, ;/<<.<< as terminal fee, and ;,<<<.<< as serice chare.

All the doc"ments and money ien by Rosalyn to Marilyn )ere s"bseH"ently remitted to the acc"sed at her office on +"ne 2-, 14. Theacc"sed told Rosalyn that she )o"ld be leain anytime, b"t after three months, Rosalyn:s depart"re did not p"sh thro"h.

?espite the setbac, the acc"sed ept ass"rin Rosalyn that she )o"ld still be able to leae. One time, the acc"sed bro"ht her to theairport and instr"cted her to hide in the airport restroom. After fifteen min"tes, the acc"sed told her that they had to leae the airportbeca"se %mahigpit sa immigration.% On another occasion, the acc"sed directed Rosalyn to hide inside the Pay"mani Resta"rant for 1/min"tes. 3othin happened after, tho"h, and they )ent home.

On 3oember 14, 14, Rosalyn )as aain at the airport. The acc"sed )arned her, tho"h, that if the $mmiration Officer insisted onseein her papers, it )o"ld be better for her to leae. As directed, she left the airport )hen she )as ased to prod"ce her doc"ments.

E@asperated, Rosalyn )ent to the acc"sed:s ho"se and demanded the ret"rn of her money and her doc"ments. $nstead of accedin toRosalyn:s demands, the acc"sed sho"ted at her and )arned her that she had to pay a cancellation fee of <<.<<. Rosalyn )as not able toie the amo"nt so she stayed )ith the acc"sed, )ho ass"red her that she )o"ld still be able to leae the co"ntry and that she )o"ldreceie a monthly salary of 1/< to 2<<. These promises )ere neer f"lfilled. Rosalyn th"s )ent to the ;OEA, )here ;OEA Administrator9elicisimo +oson, +r. informed her that the acc"sed did not hae a license to recr"it.

#enerosa As"ncion s"ffered the same fate as her co(applicants. $n A""st 14, she applied for oerseas ob placement )ith one indaRabaino. #enerosa s"bmitted her passport, medical certificate, clearance from the 3ational !"rea" of $nestiation &3!$', birth certificate,

bio(data and pict"res. 5he also paid ;1/,<<<.<< in t)o installments on 5eptember and 12, 14,4< )hich payments )ere not receipted.

inda told #enerosa she )o"ld be leain on 5eptember 1, 14. 8o)eer, she )as not able to leae beca"se, accordin to inda, at2/, #enerosa )as "nder(aed. inda then referred #enerosa to the acc"sed in the latter:s office, )here inda t"rned oer #enerosa:sdoc"ments as )ell as the ;1/,<<< << to the acc"sed. The acc"sed promised that inda )o"ld be able to leae, b"t her depart"re neer tooplace.44 6hen #enerosa demanded the ret"rn of her money and her doc"ments, the acc"sed told her that she had to pay a cancellation feeof *<<.<<. 5t"nned, inda "st opted to a)ait the f"rther o"tcome of her application.4* 8er )aitin )as all for na"ht.

6ith the promises of obs abroad "nf"lfilled, complainants decided to erify if the acc"sed )as a l icensed recr"iter. Fpon learnin from the;OEA that she )as not so licensed, they proceeded to the ;hilippine Anti(Crime Commission &;ACC' to e@ec"te their respectie affidaits.

5;O4 +ohnny MarH"eta inestiated the )omen:s complaint. 8e confirmed )ith the ;OEA that the acc"sed )as not licensed ora"thoried to recr"it oerseas contract )orers. The fo"r complainants also informed him that the acc"sed )anted to meet )ith the ro"p on

+an"ary 2*, 1/./< 5;O4 MarH"eta th"s had their money, totalin ;2,<<<.<<, mared at the 3ational !"rea" of $nestiation &3!$'9orensic 5ection for their entrapment operation.

On +an"ary 2*, 1/, the acc"sed met )ith the fo"r complainants at +ollibee, Common)ealth Aen"e, "eon City. As soon as shefinished co"ntin the mared money and )rappin it in +ollibee napins, the acc"sed )as arrested.

$n her defense, the acc"sed claimed that as an employee> of a d"ly licensed aency )ho )as tased to recr"it and offer ob placementsabroad, she co"ld not be held liable for illeal recr"itment. 5he admitted that she had no a"thority to recr"it in her personal capacity, b"t thather a"thority emanated from a 5pecial ;o)er of Attorney &5;A' and a Certification iss"ed by a licensed aency.

Issu&%

47





H&'(%

I''&g#' &$u)t0&*t is committed )hen t)o elements conc"r, namely% &1' the offender has no alid license or a"thority reH"ired by la) toenable one to la)f"lly enae in recr"itment and placement of )orers0 and &2' he "ndertaes either any actiity )ithin the meanin of

recr"itment and placement> defined "nder Art. 1&b', or any of the prohibited practices en"merated "nder Art. 4 of the abor Code. Art.1&b' of the abor Code defines recr"itment and placement> as any act of canassin, enlistin, contractin, transportin, "tiliin, hirin, orproc"rin )orers, and incl"des referrals, contract serices, promisin or adertisin for employment, locally or abroad, )hether for profit ornot% ;roided, That any person or entity )hich, in any manner, offers or promises for a fee employment to t)o or more persons, shall bedeemed enaed in recr"itment and placement.>

The crime becomes I''&g#' R&$u)t0&*t )* L#g& S$#'& )hen the t)o elements conc"r, )ith the addition of a third element% the recr"itercommitted the same aainst three or more persons, indiid"ally or as a ro"p.

5ection 11, R"le $$, !oo $$ of the R"les and Re"lations #oernin Oerseas Employment reH"ires the prior approal of the ;OEA of theappointment of representaties or aents%

5ection 11. A--o)*t0&*t o/ R&-&s&*t#t)v&s. Eery appointment of representaties or aents of licensed aency shall be s"bect toprior approal or a"thority of the Administration.

The approal may be iss"ed "pon s"bmission of or compliance )ith the follo)in reH"irements%

a. ;roposed appointment or 5pecial ;o)er of Attorney0b. Clearances of the proposed representatie or aent from 3!$0c. A s)orn or erified statement by the desinatin or appointin person or company ass"min f"ll responsibility for all the acts of the

aent or representatie done in connection )ith the recr"itment and placement of )orers.>

Approal by the Administration of the appointment or desination does not a"thorie the aent or representatie to establish a branch ore@tension office of the licensed aency represented.

Any reocation or amendment in the appointment sho"ld be comm"nicated to the administration. Other)ise, the desination orappointment shall be deemed as not reoed or amended.

5ection 1, R"le Q of the same !oo, in t"rn, proides that recr"itment and placement actiities of aents or representaties appointed bya licensee, )hose appointments )ere not a"thoried by the Administration shall lie)ise constit"te illeal recr"itment.>

That appellant enaed in recr"itment and placement is beyond disp"te. The complainin )itnesses cateorically testified that theacc"sed promised them on seeral occasions that they )o"ld be leain for )or abroad. Appellant receied complainants: money anddoc"ments, a fact that the complainants themseles )itnessed and )hich the acc"sed acno)leded )hen she ret"rned the same to themafter the filin of the case aainst her. Appellant een bro"ht complainant Rosalyn 5"mayo to the airport three times, raisin here@pectations, b"t leain her hanin in mid(air. The acc"sed een had the a"dacity to demand cancellation fees from the complainants

)hen they ased for a ref"nd.

EOLE v. DE LEON

G.R. No. 11391. "&u#2 5, 1995ROMERO, !.

"#$ts%

Appellant ?olores de eon )as chared )ith iolation of Article - &a' of ;residential ?ecree 1412 in relation to Article 1/ &b' and &c' of theabor Code in an information )hich reads%

That in or abo"t and d"rin the period comprised bet)een +"ly *, 12 and 5eptember <, 12, incl"sie, in the City of Manila,;hilippines, the said acc"sed, representin herself to hae the capacity to contract, enlist and transport 9ilipino )orers for employment in+eddah=5a"di Arabia, did then and there )ilf"lly and "nla)f"lly for a fee, recr"it and promise employment=ob placement in said co"ntry to

4-




Roberto ;orio y 5ila, Ambrosio Miler y dela Cr", Rafael a"rente y EnriH"e, Olimpia #"illena y ?aliopac, Cipriano ;ere y !onoy,Charlene Tatlonhari y 5ota, Elira !anta y ;"no, ;"rita +oaH"in y 9lores, oreta Tatlonhari y Toboro, +oseph Chae y Cater, AnaliaTatlonhari y Toboro, +aime $ndaya y amboon, Man"el Cab"sao y ;ar"nao, Edardo Alaao y dela Cr", Raym"nda Mi"elles y !alaba,?esiree dela Cr" y aconsay, 9elicidad #ale y ?"c"sin, E@eH"iel Mi"elles y Cir"nay, Rosenda +ose y ;ere, #"illermo ampa yTans"eco, Edmar Alaao y dela Cr", Rommel oano y Corte, Rodante 5"nico y #ale and Romeo ;orio y 5ila, )itho"t first hainsec"red the reH"ired license or a"thority from the ?epartment of abor and Employment.>

The trial co"rt fo"nd aainst appellant.

Issu&%


H&'(%

$lleal recr"itment is defined in Article - of the abor Code, as amended, as follo)s%

Art. -. Illegal Recr!itment . K &a' Any recr"itment actiities, incl"din the prohibited practices en"merated "nder Article 4 of this Code,to be "ndertaen by non(licensees or non(holders of a"thority shall be deemed illeal and p"nishable "nder Article of this Code. TheMinistry of abor and Employment or any la) enforcement officer may initiate complaints "nder this Article.

&b' $lleal recr"itment )hen committed by a syndicate or in lare scale shall be considered an offense inolin economic sabotae andshall be penalied in accordance )ith Article hereof.

$lleal recr"itment is deemed committed by a syndicate if carried o"t by a ro"p of three &' or more persons conspirin and=orconfederatin )ith one another in carryin o"t any "nla)f"l or illeal transaction, enterprise or scheme defined "nder the first pararaphhereof. $lleal recr"itment is deemed committed in lare scale if committed aainst three &' or more persons indiid"ally or as a ro"p.>

Article 1&b' of the same Code defines recr"itment and placement> as% any act of canassin, enlistin, contractin, transportin,"tiliin, hirin or proc"rin )orers, and incl"des referrals, contract serices, promisin or adertisin for employment, locally or abroad,

)hether for profit or not% ;roided, that any person or entity )hich, in any manner, offers or promises for a fee employment to t)o or morepersons shall be deemed enaed in recr"itment and placement.

To proe illeal recr"itment, only t)o elements need be sho)n% &1' the person chared )ith the crime m"st hae "ndertaen recr"itment

actiities0 and &2' the said person does not hae a license or a"thority to do so.

A ')$&*s& is a doc"ment iss"ed by the ?epartment of abor and Employment &?OE' a"thoriin a person or entity to operate a priateemployment aency, )hile an a"thority is a doc"ment iss"ed by the ?OE a"thoriin a person or association to enae in recr"itment andplacement actiities as a priate recr"itment aency.

$n the instant case, appellant clearly committed lare scale illeal recr"itment as she recr"ited at least three persons, iin them theimpression that she had the capability of sendin them abroad for ass"red obs in 5a"di Arabia, and collectin ario"s amo"nts alleedly forprocessin and placement fees )itho"t license or a"thority to do so.

EOLE v. CALON;OG.R. Nos. 1117. S&-t&0& 45, 1996

BELLOSILLO, !.

"#$ts%

5ometime in 9ebr"ary 12 ?anilo de los Reyes and his brother(in(la) !elarmino Torrerosa met Reydante Calono in the ho"se oforeta Castaeda at 3o. 1< ;. !"ros 5treet, ;asi, Metro Manila. $n that meetin Calono lost no time in informin them that he co"ldproide them employment abroad, partic"larly $taly, for a fee. Calono )as lib and pers"asie that ?e los Reyes and Torrerosa )ereH"icly coninced to cast their lot )ith him. Fpon ret"rnin home they too stoc of their assets and reso"rces and came "p )ith the fi"ress"fficient for the processin of their applications for employment abroad. T)o months after their initial meetin, or on 1 April 12, ?e losReyes ae Calono ;/<,<<<.<<. 8e also pleded the 9ord 9iera of his brother(in(la) to Calono for ;7<,<<<.<< in order to come "p )iththe ;12<,<<<.<< processin fee imposed by Calono. The latter then informed ?e los Reyes of his sched"led> depart"re for $taly on 2 April

4




12. 8o)eer, despite the lapse of the period, ?e los Reyes and Torrerosa remained in the ;hilippines altho"h their recr"iter reiteratedhis promise to send them to $taly.

On 1 May 12, instead of sendin them to $taly, they )ere billeted at Aloha 8otel alon Ro@as !o"leard. The follo)in day, or on 2 May12, they boarded a plane that )as s"pposed to tae them to $taly. !"t Calono had another destination in mind. They landed in !anoinstead )here their isas for $taly, accordin to Calono, )o"ld be processed. They stayed at +.S. 4!est 7otel for one and a half months.6hile in !ano the acc"sed aain collected money from them p"rportedly to defray the e@penses for their isas. They also inc"rred

e@penses for food and accommodation, and for oerstayin, ?e los Reyes had to pay 2-<< bahts to the immiration a"thorities only todiscoer to their "tter dismay that Calono had already ret"rned to the ;hilippines.

$n their helplessness in a forein land they so"ht the help of oreta Castaeda by callin her "p in Manila. Castaeda promptly fetchedthem from !ano and bro"ht them bac to the ;hilippines. The day follo)in their arrial they )ent to the office of Calono on ;adre9a"ra. ?espite their fr"strations in !ano Calono still insisted that he )o"ld send them to $taly as he promised. $n their naiety )hich )asno match to the "nmitiated a"dacity of Calono, ?e los Reyes and Torrerosa still cl"n to the promises of Calono hopin aainst hopethat the latter )o"ld still f"lfill them. 8o)eer the promises remained "nf"lfilled so they looed aain for Calono. !"t this time their H"arryhad already absconded.

They erified from the ;OEA )hether Calono or his R. /.#. 8!siness /gency )as d"ly a"thoried and licensed to recr"it people foremployment abroad. The ;OEA certified that R.A.C. 8!siness /gency )as not licensed to recr"it )orers for oerseas employment.

On her part, 8ael de ;a"la testified that she first met appellant and the other complainants at the ho"se of oreta Castaeda at 3o. 1< ;.!"ros 5treet, ;asi, Metro Manila. Coninced that she )o"ld eent"ally be employed in $taly as a domestic helper she ae Calono;12<,<<<.<<. Fnlie the other complainin )itnesses, she )as not able to fly to !ano on 2 May 12 as her passport )as not yetaailable. 5he left only on * May 12 )here she )as met by Calono at the airport and bro"ht to the +.S. 4!est 7otel )here hercompanions )ho had arried earlier )ere already billeted. 5he said that )hile in !ano Calono ased money aain from her.

Elmer Clamor, a 2-(year old resident of #en. Trias, Caite, )as similarly sit"ated )ith 8ael de ;a"la. Clamor narrated that he aeCalono ;12<,<<<.<< for the latter:s commitment to send him to $taly, and in fact )hile in !ano he ae Calono F52/<.<< more.

!ernardo Miranda, a constr"ction )orer from Talisay, !atanas, )as another ictim of Calono. "red by the latter:s ass"rances that he )o"ld be sent to $taly, he ae Calono a total of ;12<,<<<.<< for the processin of his application for )or in $taly. !"t, lie all the rest ofthem, Miranda only reached !ano. The promised ob, his hard(earned money and Calono himself eent"ally disappeared.

5enior abor Employment Office 3enita Mercado of the ;OEA confirmed that neither Reydante Calono nor his R. /.#. 8!siness

/gency )as a"thoried to recr"it )orers for employment abroad.

Reydante Calono tells "s his o)n story. 8e admits bein enaed in the cons"ltancy b"siness thro"h his R. /.#. 8!siness /gency b"tdenies any inolement in recr"itment actiities. 8e admits no)in oreta Castaeda and eticia 5olis as the t)o hae so"ht hisassistance reardin their real estate b"siness. 8e denies no)in the complainin )itnesses e@cept ?anilo de los Reyes and !elarminoTorrerosa )ho once isited him in his office. 6hile he disclaims the receipts presented by the prosec"tion as official receipts ofhis R. /.#. 8!siness /gency he admits that the sinat"res thereon )ere similar to his.

Issu&%

6O3 appellant is "ilty of illeal recr"itment and estafa

H&'(%

Article 1, par. &b', of the abor Code defines recr"itment and placement as K

&A'ny act of canassin, enlistin, contractin, transportin, "tiliin, hirin or proc"rin )orers, and incl"des referrals, contract serices,promisin or adertisin for employment, locally or abroad, )hether for profit or not0 +rovided, that any person or entity )hich, in any manner,offers or promises for a fee employment to t)o or more persons shall be deemed enaed in recr"itment and placement.>

$lleal recr"itment is specifically defined in Art. - of the Code th"s K

&a' Any recr"itment actiities, incl"din the prohibited practices en"merated "nder Article 4 of this Code, to be "ndertaen by non(licensees or non(holders of a"thority shall be deemed illeal and p"nishable "nder Article of this Code.

/<





$lleal recr"itment is deemed committed by a syndicate if carried o"t by a ro"p of three &' or more persons conspirin and=orconfederatin )ith one another in carryin o"t any "nla)f"l or illeal transaction, enterprise or scheme defined "nder the first pararaphhereof. $lleal recr"itment is deemed committed in lare scale if committed aainst three &' or more persons indiid"ally or as a ro"p.

$lleal recr"itment in lare scale is committed )hen a person &a' "ndertaes any recr"itment actiity defined "nder Article 1&b' or anyprohibited practice en"merated "nder Article 4 of the abor Code0 &b' does not hae a license or a"thority to la)f"lly enae in therecr"itment and placement of )orers0 and &c' commits the same aainst three or more persons, indiid"ally or as a ro"p.> 3 The testimonyof complainants eidently sho)ed that Calono )as enaed in recr"itment actiities in lare scale. irstly , he del"ded complainants intobeliein that obs a)aited them in $taly by distinctly impressin "pon them that he had the facility to send them for )or abroad. 8e eensho)ed them his passport to lend credence to his claim. To top it all, he bro"ht them to !ano and not to $taly. 3either did he hae anyarranements in !ano for the transfer of his recr"its to $taly. Secondly , ;OEA lie)ise certified that neither Calono nor R. /.#. 8!siness

/gency )as licensed to recr"it )orers for employment abroad. Appellant admitted this fact himself. )hirdly , appellant recr"ited fie &/' )orers th"s main the crime illeal recr"itment in lare scale constit"tin economic sabotae.

As reards the coniction of Calono for estafa on / co"nts the Co"rt r"led in +eople v . )!rda that recr"itment of persons for oerseasemployment )itho"t the necessary recr"itin permit or a"thority from the ;OEA constit"tes illeal recr"itment0 ho)eer, )here some othercrimes or felonies are committed in the process, coniction "nder the abor Code does not precl"de p"nishment "nder other stat"tes.

Calono defra"ded complainants thro"h deceit. They )ere obio"sly misled into beliein that he co"ld proide them employment in$taly. As a res"lt, the / complainants )ho desperately )anted to a"ment their income and improe their lot parted )ith their hard(earnedmoney.

EOLE v. [email protected]. No. 1495578. "&u#2 1, 4UNO, !.

"#$ts%

!"l" Cho)d"ly and +osephine On )ere chared before the Reional Trial Co"rt of Manila )ith the crime of illegal recr!itment in large

scale committed as follo)s%

That sometime bet)een the period from A""st 14 to October 14 in the City of Manila, ;hilippines and )ithin the "risdiction of this8onorable Co"rt, the aboe(named acc"sed, representin themseles to hae the capacity to contract, enlist and transport )orers foremployment abroad, conspirin, confederatin and m"t"ally helpin one another, did then and there )illf"lly, "nla)f"lly and felonio"slyrecr"it the herein complainants% Estrella !. Callea, Melin C. Miranda and Aser 5. 5asis, indiid"ally or as a ro"p for employment in Porea

)itho"t first obtainin the reH"ired license and=or a"thority from the ;hilippine Oerseas Employment Administration.>

They )ere lie)ise chared )ith three co"nts of estafa committed aainst priate complainants. The 5tate ;rosec"tor, ho)eer, laterdismissed the estafa chares aainst Cho)d"ry and filed an amended information indictin only On for the offense.

The trial co"rt fo"nd Cho)d"ry "ilty beyond reasonable do"bt of the crime of illeal recr"itment in lare scale.

Issu&%

6O3 acc"sed(appellant no)inly and intentionally participated in the commission of the crime chared

H&'(%

3o.

The elements of illeal recr"itment in lare scale are%

/1




1. The acc"sed "ndertoo any recr"itment actiity defined "nder Article 1 &b' or any prohibited practice en"merated "nder Article 4of the abor Code0

2. 8e did not hae the license or a"thority to la)f"lly enae in the recr"itment and placement of )orers0 and. 8e committed the same aainst three or more persons, indiid"ally or as a ro"p.

The last pararaph of 5ection * of Rep"blic Act &RA' -<42 states who shall be held l iable for the offense, th"s%

The persons criminally liable for the aboe offenses are the principals, accomplices and accessories. In case of -!ridical persons, theofficers having control , management or direction of their b!siness shall be liable.>

An employee of a company or corporation enaed in illeal recr"itment may be held l iable as principal, toether )ith his employer, if it issho)n that he actively and conscio!sly participated in illeal recr"itment. 6here it is sho)n that the employee )as merely actin "nder thedirection of his s"periors and )as "na)are that his acts constit"ted a crime, he may not be held criminally liable for an act done for and inbehalf of his employer.

Acc"sed(appellant interie)ed priate complainants in the months of +"ne, A""st and 5eptember in 14 at Craftrade:s office. At thattime, he )as employed as interie)er of Craftrade )hich )as then operatin "nder a temporary a"thority ien by the ;OEA pendinrene)al of its license. The temporary license incl"ded the a"thority to recr"it )orers. 8e )as conicted based on the fact that he )as notreistered )ith the ;OEA as employee of Craftrade. 3either )as he, in his personal capacity, licensed to recr"it oerseas )orers. 5ection1< R"le $$ !oo $$ of the R"les and Re"lation #oernin Oerseas Employment &11' reH"ires that eery chane, terminationor appointment of officers, representaties and personnel of licensed aencies be reistered )ith the ;OEA. Aents or representatiesappointed by a licensed recr"itment aency )hose appointments are not preio"sly approed by the ;OEA are considered non(licensee> ornon(holder of a"thority> and therefore not a"thoried to enae in recr"itment actiity.

the prosec"tion failed to proe that acc"sed(appellant )as a)are of Craftrade:s fail"re to reister his name )ith the ;OEA and that heactiely enaed in recr"itment despite this no)lede. The obliation to reister its personnel )ith the ;OEA belons to the officers of theaency. A mere employee of the aency cannot be e@pected to no) the leal reH"irements for its operation. The eidence at hand sho)sthat acc"sed(appellant carried o"t his d"ties as interie)er of Craftrade beliein that the aency )as d"ly licensed by the ;OEA and he, int"rn, )as d"ly a"thoried by his aency to deal )ith the applicants in its behalf. Acc"sed(appellant in fact confined his actions to his obdescription. 8e merely interie)ed the applicants and informed them of the reH"irements for deployment b"t he neer receied money fromthem. Their payments )ere receied by the aency:s cashier, +osephine On. 9"rthermore, he performed his tass "nder the s"perision ofits president and manain director.

EFECUTIE SECRETARY v. CAG.R. No. 131519. M#2 4, 4+CALLE!O, SR., !.

"#$ts%

Rep"blic Act 3o. -<42, other)ise no)n as the Mirant 6orers and Oerseas 9ilipinos Act of 1/, too effect on +"ly 1/, 1/. TheOmnib"s R"les and Re"lations $mplementin the Mirant 6orers and Oerseas 9ilipino Act of 1/ )as, thereafter, p"blished in the April7, 1* iss"e of the Manila !"lletin. 8o)eer, een before the la) too effect, the Asian Recr"itment Co"ncil ;hilippine Chapter, $nc.&ARCO(;hil.' filed, on +"ly 17, 1/, a petition for declaratory relief "nder R"le * of the R"les of Co"rt )ith the Reional Trial Co"rt of"eon City to declare as "nconstit"tional 5ection 2, pararaph &', 5ection *, pararaphs &a' to &', &l' and &m', 5ection 7, pararaphs &a'and &b', and 5ections and 1< of the la), )ith a plea for the iss"ance of a temporary restrainin order and=or )rit of preliminary in"nctionenoinin the respondents therein from enforcin the assailed proisions of the la).

The ARCO(;hil. alleed that Rep. Act 3o. -<42 )as self(e@ec"tory and that no implementin r"les )ere needed. $t prayed that the co"rtiss"e a temporary restrainin order to enoin the enforcement of 5ection *, pararaphs &a' to &m' on illeal recr"itment, 5ection 7 onpenalties for illeal recr"itment, and 5ection on en"e of criminal actions for illeal recr"itments.

The trial co"rt iss"ed a temporary restrainin order. After the petitioners filed their comment on the petition, the ARCO(;hil. filed anamended petition, the amendments consistin in the incl"sion in the caption thereof 11 other corporations )hich it alleed )ere its membersand )hich it represented in the s"it, and a plea for a temporary restrainin order enoinin the respondents from enforcin 5ection *s"bsection &i', 5ection * s"bsection &' and pararaphs 1/ and 1* thereof, 5ection -, 5ection 1<, pararaphs 1 and 2, and 5ections 11 and4< of Rep. Act 3o. -<42. The respondent ARCO(;hil. assailed 5ection 2&' and &i', 5ection * s"bsection &a' to &m', 5ection 7&a' to &b', and5ection 1< pararaphs &1' and &2'.

/2




&see 5ecs. * to 11'

The respondent aerred that s"ch proisions of Rep. Act 3o. -<42 iolate 5ection 1, Article $$$ of the Constit"tion. Accordin to therespondent, 5ection *&' and &i' discriminated aainst "nsilled )orers and their families and, as s"ch, iolated the eH"al protection cla"se,as )ell as Article $$, 5ection 12 and Article QD, 5ections 1 and &' of the Constit"tion. As the la) enco"raed the deployment of silled9ilipino )orers, only oerseas silled )orers are ranted rihts. The respondent stressed that "nsilled )orers also hae the riht to see

employment abroad. Accordin to the respondent, the riht of "nsilled )orers to d"e process is iolated beca"se they are preented fromfindin employment and earnin a liin abroad. $t cannot be ar"ed that silled )orers are imm"ne from ab"ses by employers, )hile"nsilled )orers are merely prone to s"ch ab"ses. $t )as pointed o"t that both silled and "nsilled )orers are s"bected to ab"ses byforein employers. 9"rthermore, the prohibition of the deployment of "nsilled )orers abroad )o"ld only enco"rae fly(by(niht illealrecr"iters.

Accordin to the respondent, the rant of incenties to serice contractors and mannin aencies to the e@cl"sion of all other licensed anda"thoried recr"iters is an inalid classification. icensed and a"thoried recr"iters are th"s depried of their riht to property and d"eprocess and to the eH"ality of the person.> $t is "nderstandable for the la) to prohibit illeal recr"iters, b"t to discriminate aainst licensedand reistered recr"iters is "nconstit"tional.

The respondent, lie)ise, alleed that 5ection *, s"bsections &a' to &m' is "nconstit"tional beca"se licensed and a"thoried recr"itmentaencies are placed on eH"al footin )ith illeal recr"iters. $t contended that )hile the abor Code distin"ished bet)een recr"iters )ho areholders of licenses and non(holders thereof in the imposition of penalties, Rep. Act 3o. -<42 does not mae any distinction. The penalties in5ection 7&a' and &b' bein based on an inalid classification are, therefore, rep"nant to the eH"al protection cla"se, besides beine@cessie0 hence, s"ch penalties are iolatie of 5ection 1&1', Article $$$ of the Constit"tion. $t )as also pointed o"t that the penalty forofficers=officials=employees of recr"itment aencies )ho are fo"nd "ilty of economic sabotae or lare(scale illeal recr"itment "nder Rep.Act 3o. -<42 is life imprisonment. 5ince recr"itment aencies "s"ally operate )ith a manpo)er of more than three persons, s"ch aenciesare forced to sh"t do)n, lest their officers and=or employees be chared )ith lare scale illeal recr"itment or economic sabotae andsentenced to life imprisonment. Th"s, the penalty imposed by la), bein disproportionate to the prohibited acts, disco"raes the b"siness oflicensed and reistered recr"itment aencies.

The respondent also posited that 5ection *&m' and pararaphs &1/' and &1*', 5ections -, and 1<, pararaph 2 of the la) iolate 5ection22, Article $$$ of the Constit"tion prohibitin e@(post facto la)s and bills of attainder. This is beca"se the proisions pres"me that a licensedand reistered recr"itment aency is "ilty of illeal recr"itment inolin economic sabotae, "pon a findin that it committed any of theprohibited acts "nder the la). 9"rthermore, officials, employees and their relaties are pres"med "ilty of illeal recr"itment inolineconomic sabotae "pon s"ch findin that they committed any of the said prohibited acts.

Issu&%

6O3 )hether or not the trial co"rt committed rae ab"se of its discretion amo"ntin to e@cess or lac of "risdiction in iss"in theassailed order and the )rit of preliminary in"nction on a bond of only;/<,<<< and )hether or not the appellate co"rt erred in affirmin thetrial co"rt:s order and the )rit of preliminary in"nction iss"ed by it

H&'(%

The alidity of 5ection * of R.A. 3o. -<42 )hich proides that employees of recr"itment aencies may be criminally liable for illealrecr"itment has been "pheld in +eople v. #howd!ry %

As stated in the first sentence of 5ection * of RA -<42, the persons )ho may be held liable for illeal recr"itment are the principals,

accomplices and accessories. An employee of a company or corporation enaed in illeal recr"itment may be held liable as principal,toether )ith his employer, if it is sho)n that he actiely and conscio"sly participated in illeal recr"itment. $t has been held that thee@istence of the corporate entity does not shield from prosec"tion the corporate aent )ho no)inly and intentionally ca"ses thecorporation to commit a crime. The corporation obio"sly acts, and can act, only by and thro"h its h"man aents, and it is their cond"ct

)hich the la) m"st deter. The employee or aent of a corporation enaed in "nla)f"l b"siness nat"rally aids and abets in the carryin on ofs"ch b"siness and )ill be prosec"ted as principal if, )ith no)lede of the b"siness, its p"rpose and effect, he conscio"sly contrib"tes hisefforts to its cond"ct and promotion, ho)eer sliht his contrib"tion may be.>

To be entitled to a preliminary in"nction to enoin the enforcement of a la) assailed to be "nconstit"tional, the party m"st establish that it )ill s"ffer irreparable harm in the absence of in"nctie relief and m"st demonstrate that it is liely to s"cceed on the merits, or that there ares"fficiently serio"s H"estions oin to the merits and the balance of hardships tips decidedly in its faor.

/




The possibility that the officers and employees of the recr"itment aencies, )hich are members of the respondent, and their relaties )hoare employed in the oernment aencies chared in the enforcement of the la), )o"ld be indicted for illeal recr"itment and, if conictedsentenced to life imprisonment for lare scale illeal recr"itment, absent proof of irreparable in"ry, is not s"fficient on )hich to base theiss"ance of a )rit of preliminary in"nction to s"spend the enforcement of the penal proisions of Rep. Act 3o. -<42 and aert anyindictments "nder the la). The normal co"rse of criminal prosec"tions cannot be bloced on the basis of alleations )hich amo"nt tospec"lations abo"t the f"t"re.

There is no alleation in the amended petition or eidence add"ced by the respondent that the officers and=or employees of its membershad been threatened )ith any indictments for iolations of the penal proisions of Rep. Act 3o. -<42. 3either is there any alleation thereinthat any of its members and=or their officers and employees committed any of the acts en"merated in 5ection *&a' to &m' of the la) for )hichthey co"ld be indicted. 3either did the respondent add"ce any eidence in the RTC that any or all of its members or a reat n"mber of otherd"ly licensed and reistered recr"itment aencies had to stop their b"siness operations beca"se of fear of indictments "nder 5ections * and7 of Rep. Act 3o. -<42. The respondent merely spec"lated and s"rmised that licensed and reistered recr"itment aencies )o"ld closeshop and stop b"siness operations beca"se of the assailed penal proisions of the la). A )rit of preliminary in"nction to enoin theenforcement of penal la)s cannot be based on s"ch conect"res or spec"lations. The Co"rt cannot tae "dicial notice that the processin ofdeployment papers of oerseas )orers hae come to a irt"al standstill at the ;OEA beca"se of the assailed proisions of Rep. Act 3o.-<42. The respondent m"st add"ce eidence to proe its alleation, and the petitioners accorded a chance to add"ce controertineidence.

The respondent een failed to add"ce any eidence to proe irreparable in"ry beca"se of the enforcement of 5ection 1<&1'&2' of Rep. Act3o. -<42. $ts fear or apprehension that, beca"se of time constraints, its members )o"ld hae to defend forein employees in cases beforethe abor Arbiter is based on spec"lations. Een if tr"e, s"ch inconenience or diffic"lty is hardly irreparable in"ry.

EOLE v. TURDAG.R. Nos. 95++7+6. !u'2 6, 199+BELLOSILLO, !.

"#$ts%

#E3ER TFR?A alias !oy> &a..a. #"adal"pe T"rda, +r.' toether )ith his )ife Milaros T"rda and Carmen Manera, )as chared )ithilleal recr"itment and 2 co"nts of estafa. 8o)eer, Milaros T"rda and Carmen Manera )ere neer apprehended so that only #ener T"rdaco"ld be arrained and tried.

$n the first )ee of A""st 1-*, appellant #ener T"rda, his )ife Milaros T"rda nicnamed Mila,> and Carmen Manera )ent to the ho"seof complainant 9lorante Rosales at 2- $locos 5"r 5t., !ao !antay, "eon City, to conince his family that the former co"ld sec"re anoerseas ob for 9lorante in $taly and another for his sister 5hirley Cabal" in 9rance for a fee. 9lorante and 5hirley accepted the offer andtheir father, Roberto Rosales, paid ;7<,<<<.<< for both. 8o)eer, he did not as for a receipt beca"se of his tr"st in appellant and his )ife

)ho )ere 5hirley:s compadre> and comadre> for the 17 years.

The spo"ses #ener and Mila, toether )ith Carmen Manera, bro"ht 9lorante and 5hirley to the airport for their s"pposed depart"re forabroad at fie o:cloc that afternoon. The T"rdas "sed their Dols)aen in brinin their 2 recr"its> to the airport for the c"stomary send(off.> After a lon )ait, appellant and his co(acc"sed told 9lorante and 5hirley that their passports had not been released and that theirdepart"re had to be resched"led, )ith the ass"rance ho)eer that they co"ld leae as soon as their papers )ere released.

?espite seeral promises, 9lorante and 5hirley )ere still "nable to leae. They isited the T"rdas seeral times at their ho"se b"t the

former )ere ien more promises instead. 9lorante een )ent to the aency of acc"sed Carmen Manera, the $nternational 9riendship and#eneral 5erices, at Mabini 5t., Ermita, Manila, b"t )as "nable to tal to her beca"se at that time there )ere many applicants inside theoffice. Complainant and his sister finally demanded the ret"rn of their money, b"t the T"rdas failed to ie their money bac. ConseH"ently,9lorante Rosales )ent to the Office of the City 9iscal of "eon City to file the correspondin complaint.

5ometime before 5eptember 1-7, another complainant, Celina Andan, learned that her application for an immirant isa )ith theCanadian Embassy )as denied. 6hile her application )as pendin, Celina:s mother, Milaros Andan, )as pers"aded by Milaros T"rda toentr"st to her the processin of Celina:s papers since she &Milaros T"rda' had already been abroad and had one thro"h the applicationprocess preio"sly. The Andans and the T"rdas had no)n each other for more than 1< years as their stores )hich sold rice and ;#,respectiely, )ere near each other.

/4




After the denial of Celina Andan:s application, #ener and Mila "ndertoo the processin of Celina:s trael papers for )hich they )ereien a do)npayment of ;2/,<<<.<< )ith the promise to ref"nd the amo"nt if she )o"ld not be able to leae for Canada )ithin 4/ days.8o)eer, sho"ld they s"cceed, Celina )o"ld hae to pay them an additional amo"nt of ;/,<<<.<< "pon deliery to her of her isa.

On 14 5eptember 1-7, the mother of Celina ae a chec in her store for ;14,/<<.<< and cash of ;/<<.<< to Mila T"rda for )hich thelatter ae a receipt in the presence of appellant #ener. On 22 5eptember 1-7, Celina:s mother aain ae a chec to the T"rdas in theamo"nt of ;1<,<<<.<< for )hich a receipt )as lie)ise iss"ed by Milaros T"rda.

After 4/ days, Celina Andan )as still "nable to leae for abroad. 5he )ent )ith her mother to the ho"se of the T"rdas )here they only metappellant. They )ere told that Mila )ent some)here. Celina )anted to et her passport and money bac beca"se nothin happened to herisa application, b"t appellant told her that he )o"ld "st relay the messae to his )ife. Celina ret"rned the follo)in day only to be told bythe spo"ses that her passport had been sent to her mother:s store and that their do)npayment of ;2/,<<<.<< co"ld be )ithdra)n from theperson to )hom they &T"rdas' ae it. Celina )ent bac to the ho"se of appellant b"t she neer s"cceeded in talin to the spo"ses. They

)ere al)ays o"t. 8ence, she decided to chare the T"rda spo"ses )ith estafa and illeal recr"itment.

Issu&%


H&'(%

The pertinent portions of Art. - of the abor Code, as amended by ;.?. 3o. 2<1-, read K

Art. -. Illegal recr!itment . K &a' Any recr"itment actiities, incl"din the prohibited practices en"merated "nder Article 4 of this Code, tobe "ndertaen by non(licensees or non(holders of a"thority shall be deemed illeal and p"nishable "nder Article of this code. The Ministryof abor and Employment or any la) enforcement officer may initiate complaints "nder this Article.


$lleal recr"itment is deemed committed by a syndicate if carried o"t by a ro"p of three &' or more persons conspirin and=orconfederatin )ith one another in carryin o"t any "nla)f"l or illeal transaction, enterprise or scheme defined "nder the first pararaphhereof. $lleal recr"itment is deemed committed in lare scale if committed aainst three &' or more persons indiid"ally or as a ro"p.>

Article 1, par. &b', of the same Code defines &$u)t0&*t as any act of canassin, enlistin, contractin, transportin, "tiliin, hirin orproc"rin )orers, and incl"des referrals, contract serices, promisin or adertisin for employment, locally or abroad, )hether for profit ornot0 proided, that any person or entity )hich, in any manner, offers or promises for a fee employment to t)o or more persons shall bedeemed enaed in recr"itment and placement.>

Appellant, his )ife, and Manera )ere conspirators in the illeal recr"itment b"siness by contrib"tin acts in p"rs"ance of the financials"ccess of their oint ent"re for their m"t"al benefit. All the complainants hae testified that in eery recr"itment transaction, appellant )asal)ays present )ith the other acc"sed. 6ith respect to the recr"itment of Rosales and 5hirley Cabal", both testified that the three &'acc"sed )ent to their ho"se to ind"ce them to apply for oerseas )or for a fee, and that appellant )as lie)ise aro"nd )hen the amo"nt of;7<,<<<.<< )as H"oted by the other acc"sed as the recr"itment serice fee. 9or her part, complainant Celina Andan cateorically testifiedthat appellant and his )ife )ere toether )hen the latter )as paid the do)npayment in chec for her trip to Canada. Celina f"rther assertedthat the T"rdas )ere al)ays toether in their recr"itment transactions0 in fact, all the complainants confirmed that appellant een droe themto the airport for the s"pposed trip abroad not only once b"t thrice.

The recr"itment of persons for oerseas employment )itho"t the necessary recr"itin permit or a"thority from the ;OEA constit"tes illealrecr"itment0 ho)eer, )here some other crimes or felonies are committed in the process, coniction "nder the abor Code does not precl"dep"nishment "nder other stat"tes.

EOLE v. ROMEROG.R. Nos. 1338788. !u'2 46, 1993NOCON, !.

"#$ts%

//




5ometime in +an"ary of 1-, complainant ?oria ?apnit )ent to the residence of acc"sed(appellant Elma Romero at Esteban 5treet,Mandal"yon, Metro(Manila accompanied by #enalie Cr", a co"sin of acc"sed(appellant. At s"ch meetin, complainant ?oria ?apnit toldacc"sed(appellant of her desire to )or abroad and the latter informed her that she can )or in Tai)an as a factory )orer )ith a monthlysalary of F5/,<<<.<<.

Thereafter, complainant ?oria ?apnit, relyin "pon the representation of the acc"sed(appellant that she can leae on April 1, 1- for

Tai)an as a factory )orer, paid the placement fee chared by the latter as eidenced by the receipts iss"ed by the acc"sed(appellanttotalin ;21,<<<.<< )hich )ere paid as follo)s% ;,<<<.<< on +an"ary 24, 1-, ;1/,<<<.<< on 9ebr"ary 4, 1- and ;,<<<.<< on9ebr"ary 27, 1-. Complainant ?oria ?apnit also paid acc"sed(appellant the amo"nt of ;1,-<<.<< for the processin of her passport

)hich is not incl"ded in her claim as she )as iss"ed a passport.

6hen complainant ?oria ?apnit )as not able to leae on April 1, 1- for Tai)an, acc"sed(appellant told her, to )ait as her isa )as notyet iss"ed. 8o)eer, after spendin more than 2 months f"tilely follo)in "p her isa )ith the acc"sed(appellant, complainant ?oria ?apnit

)ent to the office of the ;hilippine Oerseas Employment Administration &;OEA' and fo"nd o"t that acc"sed(appellant is not a licensedrecr"iter as sho)n by the Certification iss"ed by the ;OEA.

Complainant ?oria ?apnit e@ec"ted an affidait at the office of the ;OEA charin acc"sed(appellant for illeal recr"itment and=or estafa.

Complainant !ernardo 5alaar testified that sometime in the middle of +an"ary 1-, he )ent to R5$ Enterprises located at 5ha)

!o"leard, Mandal"yon, Metro(Manila and met acc"sed(appellant )here he applied for a ob in Tai)an. ?"rin said meetin, acc"sed(appellant promised complainant !ernardo 5alaar that he can leae for Tai)an on April 1, 1- as a factory )orer )ith a monthly salary ofF5*<<.<< as soon as he paid the placement fee.

After payin acc"sed(appellant the amo"nt of ;24,<<<.<< as placement fee )hich )ere eidenced by the / receipts iss"ed by acc"sed(appellant, complainant !ernardo 5alaar )as not able to leae on April 1, 1- and acc"sed(appellant told him that his depart"re )asdelayed beca"se she is still )aitin for the iss"ance of his isa.

6hen acc"sed(appellant failed to send complainant !ernardo 5alaar to Tai)an, the latter )ent to the Anti(illeal Recr"itment !ranch ofthe ;OEA on +"ne <, 1- and e@ec"ted an affidait charin acc"sed(appellant for il leal recr"itment and=or estafa.

Issu&%

6O3 appellant is "ilty of illeal recr"itment and estafa

H&'(%

The elements of estafa in eneral are% &1' that the acc"sed defra"ded another &a' by ab"se of confidence, or &b' by means of deceit0 and&2' that damae or pre"dice capable of pec"niary estimation is ca"sed to the offended party or third person.

$n the instant case, all the elements of estafa are present beca"se complainant ?oria ?apnit ae the total amo"nt of ;21,<<<.<< toacc"sed(appellant on the latter:s promise that she )ill be sent to Tai)an as a factory )orer as soon as she paid the placement fee. $t )ill beobsered that acc"sed(appellant ae complainant the distinct impression that she had the po)er or ability to send people abroad for )orso that complainant )as coninced to ie her the money she demanded to enable her to be employed as a factory )orer in Tai)an.

The contention of the acc"sed(appellant that she cannot be conicted of lare(scale il leal recr"itment )hich reH"ires at least persons tobe ictimied considerin that only one ictim testified aainst her )hile the other t)o complainants e@ec"ted a oint affidait of desistance

)hich res"lted in the dismissal of their complaints aainst her is )itho"t merit.

The fact that complainants !ernardo 5alaar and Richard "illope e@ec"ted a +oint Affidait of ?esistance does not sere to e@c"lpateacc"sed(appellant from criminal liability insofar as the case for illeal recr"itment is concerned since the Co"rt loos )ith disfaor thedroppin of criminal complaints "pon mere affidait of desistance of the complainant, partic"larly )here the commission of the offense, as isin this case, is d"ly s"pported by doc"mentary eidence.

the Co"rt attaches no pers"asie al"e to affidaits of desistance, especially )hen it is e@ec"ted as an aftertho"ht. $t )o"ld be adanero"s r"le for co"rts to reect testimonies solemnly taen before the co"rts of "stice simply beca"se the )itnesses )ho had ien them,later on, chaned their mind for one reason or another0 for s"ch r"le )o"ld mae solemn trial a mocery and place the inestiation of tr"that the mercy of "nscr"p"lo"s )itness.

/*




Art. 2<4. There may be a compromise "pon the cii l liability arisin from an offense0 b"t s"ch compromise shall not e@tin"ish the p"blicaction for the imposition of the leal penalty.>

ACI"IC CONSULTANTS INTERNATIONAL ASIA, INC. v. SCHON"ELDG.R. No. 16694. "&u#2 19, 45

CALLE!O, SR., !.

"#$ts%

Respondent is a Canadian citien and )as a resident of 3e) 6estminster, !ritish Col"mbia, Canada. 8e had been a cons"ltant in thefield of enironmental enineerin and )ater s"pply and sanitation. ;acicon ;hilippines, $nc. &;;$' is a corporation d"ly established andincorporated in accordance )ith the la)s of the ;hilippines. The primary p"rpose of ;;$ )as to enae in the b"siness of proidin specialtyand technical serices both in and o"t of the ;hilippines. $t is a s"bsidiary of ;acific Cons"ltants $nternational of +apan &;C$+'. The presidentof ;;$, +ens ;eter 8enrichsen, )ho )as also the director of ;C$+, )as based in Toyo, +apan. 8enrichsen comm"ted from +apan to Manilaand ice ersa, as )ell as in other co"ntries )here ;C$+ had b"siness.

$n 17, ;C$+ decided to enae in cons"ltancy serices for )ater and sanitation in the ;hilippines. $n October 17, respondent )asemployed by ;C$+, thro"h 8enrichsen, as 5ector Manaer of ;;$ in its 6ater and 5anitation ?epartment. 8o)eer, ;C$+ assined him as;;$ sector manaer in the ;hilippines. 8is salary )as to be paid partly by ;;$ and ;C$+.

Respondent arried in the ;hilippines and ass"med his position as ;;$ 5ector Manaer. 8e )as accorded the stat"s of a resident alien.

As reH"ired by R"le Q$D &Employment of Aliens' of the Omnib"s R"les $mplementin the abor Code, ;;$ applied for an AlienEmployment ;ermit &;ermit' for respondent before the ?epartment of abor and Employment &?OE'. $t appended respondent:s contract ofemployment to the application. The ?OE ranted the application and iss"ed the ;ermit to respondent.

Respondent receied his compensation from ;;$ for the follo)in periods% 9ebr"ary to +"ne 1-, 3oember to ?ecember 1-, and+an"ary to A""st 1. 8e )as also reimb"rsed by ;;$ for the e@penses he inc"rred in connection )ith his )or as sector manaer. 8ereported for )or in Manila e@cept for occasional assinments abroad, and receied instr"ctions from 8enrichsen.

On May /, 1, respondent receied a letter from 8enrichsen informin him that his employment had been terminated effectie A""st 4,1 for the reason that ;C$+ and ;;$ had not been s"ccessf"l in the )ater and sanitation sector in the ;hilippines. 8o)eer, on +"ly 24,

1, 8enrichsen, by electronic mail, reH"ested respondent to stay p"t in his ob after A""st /, 1, "ntil s"ch time that he )o"ld be ableto report on certain proects and disc"ss all the opport"nities he had deeloped. Respondent contin"ed his )or )ith ;;$ "ntil the end ofb"siness ho"rs on October 1, 1.

Respondent filed )ith ;;$ seeral money claims, incl"din "npaid salary, leae pay, air fare from Manila to Canada, and cost of shipmentof oods to Canada. ;;$ partially settled some of his claims &F5/,*/.', b"t ref"sed to pay the rest.

On ?ecember /, 2<<<, respondent filed a Complaint for $lleal ?ismissal aainst petitioners ;;$ and 8enrichsen )ith the abor Arbiter.

$n his Complaint, respondent alleed that he )as illeally dismissed0 ;;$ had not notified the ?OE of its decision to close one of itsdepartments, )hich res"lted in his dismissal0 and they failed to notify him that his employment )as terminated after A""st 4, 1.Respondent also claimed for separation pay and other "npaid benefits.

Issu&%

6O3 an employment relationship e@isted bet)een petitioners and employment relationship e@isted bet)een petitioners and respondent0

6O3 the abor Arbiter a H"o has "risdiction oer respondent:s claim

H&'(%

The abor Arbiter and the 3RC inored the doc"mentary eidence )hich respondent appended to his pleadins sho)in that he )as anemployee of petitioner ;;$0 they merely foc"sed on the +an"ary 7, 1- letter of employment and 5ection 21 of the #eneral Conditions ofEmployment.

/7




;etitioner ;;$ applied for the iss"ance of an AE; to respondent before the ?OE. $n said application, ;;$ aerred that respondent is itsemployee. To sho) that this )as the case, ;;$ appended a copy of respondent:s employment contract. The ?OE then ranted theapplication of ;;$ and iss"ed the permit.

Fnder the Omnib"s R"les $mplementin the abor Code, one of the reH"irements for the iss"ance of an employment permit is theemployment contract. 5ection /, R"le Q$D &Employment of Aliens' of the Omnib"s R"les proides%

5ECT$O3 1. Coerae. G This r"le shall apply to all aliens employed or seein employment in the ;hilippines and the present orprospectie employers.

5ECT$O3 2. 5"bmission of list. G All employers employin forein nationals, )hether resident or non(resident, shall s"bmit a list ofnationals to the !"rea" indicatin their names, citienship, forein and local address, nat"re of employment and stat"s of stay in the;hilippines.

5ECT$O3 . Reistration of resident aliens. G All employed resident aliens shall reister )ith the !"rea" "nder s"ch "idelines as may beiss"ed by it.

5ECT$O3 4. Employment permit reH"ired for entry. G 3o alien seein employment, )hether as a resident or non(resident, may enter the;hilippines )itho"t first sec"rin an employment permit from the Ministry. $f an alien enters the co"ntry "nder a non()orin isa and )ishesto be employed thereafter, he may only be allo)ed to be employed "pon presentation of a d"ly approed employment permit.

5ECT$O3 /. ReH"irements for employment permit applicants. G The application for an employment permit shall be accompanied by thefollo)in%

a. C"rric"l"m itae d"ly sined by the applicant indicatin his ed"cational bacro"nd, his )or e@perience and other data sho)inthat he possesses technical sills in his trade or profession.

b. Contract of employment bet)een the employer and the principal )hich shall embody the follo)in, amon others%1. That the non(resident alien )orer shall comply )ith all applicable la)s and r"les and re"lations of the ;hilippines02. That the non(resident alien )orer and the employer shall bind themseles to train at least t)o &2' 9ilipino "nderst"dies for a

period to be determined by the Minister0 and. That he shall not enae in any ainf"l employment other than that for )hich he )as iss"ed a permit.

c. A desination by the employer of at least t)o &2' "nderst"dies for eery alien )orer. 5"ch "nderst"dies m"st be the most raninre"lar employees in the section or department for )hich the e@patriates are bein hired to ins"re the act"al transfer of technoloy.

Fnder 5ection * of the R"le, the ?OE may iss"e an alien employment permit based only on the follo)in%

a. Compliance by the applicant and his employer )ith the reH"irements of 5ection 2 hereof0b. Report of the !"rea" ?irector as to the aailability or non(aailability of any person in the ;hilippines )ho is competent and )illin

to do the ob for )hich the serices of the applicant are desired0c. 8is assessment as to )hether or not the employment of the applicant )ill redo"nd to the national interest0d. Admissibility of the alien as certified by the Commission on $mmiration and ?eportation0e. The recommendation of the !oard of $nestments or other appropriate oernment aencies if the applicant )ill be employed in

preferred areas of inestments or in accordance )ith the imperatie of economic deelopment.

Th"s, as claimed by respondent, he had an employment contract )ith petitioner ;;$0 other)ise, petitioner ;;$ )o"ld not hae filed anapplication for a ;ermit )ith the ?OE. ;etitioners are th"s estopped from allein that the ;C$+, not petitioner ;;$, had been the employer

of respondent all alon.

There )as an employer(employee relationship bet)een petitioner ;;$ and respondent "sin the fo"r(fold test. +"rispr"dence is firmlysettled that )heneer the e@istence of an employment relationship is in disp"te, fo"r elements constit"te the reliable yardstic% &a' theselection and enaement of the employee0 &b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to controlthe employee:s cond"ct. $t is the so(called control test> )hich constit"tes the most important inde@ of the e@istence of the employer(employee relationshipGthat is, )hether the employer controls or has resered the riht to control the employee not only as to the res"lt of the

)or to be done b"t also as to the means and methods by )hich the same is to be accomplished. 5tated other)ise, an employer(employeerelationship e@ists )here the person for )hom the serices are performed reseres the riht to control not only the end to be achieed b"talso the means to be "sed in reachin s"ch end.

/-




$n the case at bar, the po)er to control and s"perise petitioner:s )or performance deoled "pon the respondent company. ie)ise,the po)er to terminate the employment relationship )as e@ercised by the ;resident of the respondent company. $t is not the letterhead "sedby the company in the termination letter )hich controls, b"t the person )ho e@ercised the po)er to terminate the employee. $t is alsoinconseH"ential if the second letter of employment e@ec"ted in the ;hilippines )as not sined by the petitioner. An employer(employeerelationship may indeed e@ist een in the absence of a )ritten contract, so lon as the fo"r elements mentioned in the Mafinco case are allpresent.

$f the intention of the parties )ere to restrict en"e, there m"st be accompanyin lan"ae clearly and cateorically e@pressin theirp"rpose and desin that actions bet)een them be litiated only at the place named by them. $n the instant case, no restrictie )ords lieonly,> solely,> e@cl"siely in this co"rt,> in no other co"rt sae K,> partic"larly,> no)here else b"t=e@cept K,> or )ords of eH"al import

)ere stated in the contract. $t cannot be said that the co"rt of arbitration in ondon is an e@cl"sie en"e to brin forth any complaint arisino"t of the employment contract.

;etitioners: insistence on the application of the principle of for"m non coneniens m"st be reected. The bare fact that respondent is aCanadian citien and )as a repatriate does not )arrant the application of the principle for the follo)in reasons%

1. The abor Code of the ;hilippines does not incl"de for"m non coneniens as a ro"nd for the dismissal of the complaint.2. The propriety of dismissin a case based on this principle reH"ires a fact"al determination0 hence, it is properly considered as

defense.. $n 8an$ of /merica, *)9S/, !an of America $nternational, td. . Co"rt of Appeals, this Co"rt held that%

;hilippine Co"rt may ass"me "risdiction oer the case if it chooses to do so0 proided, that the follo)in reH"isites are met% &1' that the;hilippine Co"rt is one to )hich the parties may coneniently resort to0 &2' that the ;hilippine Co"rt is in a position to mae an intellientdecision as to the la) and the facts0 and, &' that the ;hilippine Co"rt has or is liely to hae po)er to enforce its decision>

SERRANO v. G#''#*t MARITIME SERICES, INC.G.R. No. 16561+. M#$ 4+, 49AUSTRIA7MARTINE;, !.

"#$ts%

;etitioner )as hired by #allant Maritime 5erices, $nc. and Marlo) 3aiation Co., td. &respondents' "nder a ;hilippine OerseasEmployment Administration &;OEA'(approed Contract of Employment.

On March 1, 1-, the date of his depart"re, petitioner )as constrained to accept a do)nraded employment contract for the position of5econd Officer )ith a monthly salary of F51,<<<.<<, "pon the ass"rance and representation of respondents that he )o"ld be made ChiefOfficer by the end of April 1-.

Respondents did not delier on their promise to mae petitioner Chief Officer. 8ence, petitioner ref"sed to stay on as 5econd Officer and )as repatriated to the ;hilippines on May 2*, 1-.

;etitioner:s employment contract )as for a period of 12 months or from March 1, 1- "p to March 1, 1, b"t at the time of hisrepatriation on May 2*, 1-, he had sered only 2 months and 7 days of his contract, leain an "ne@pired portion of months and 2days.

;etitioner filed )ith the abor Arbiter &A' a Complaint aainst respondents for constr"ctie dismissal and for payment of his money claims

in the total amo"nt of F52*,442.7.

Issu&%

6O3 5ec. 1< of R.A. -<42 iolates 5ection 1, Article $$$ of the Constit"tion, and 5ection 1-, Article $$ and 5ection , Article Q$$$ on labor asa protected sector

H&'(%

Bes. $n 'arsaman 'anning /gency, Inc. v. *ational Labor Relations #ommission7 &5econd ?iision, 1' that the Co"rt laid do)n thefollo)in r"les on the application of the periods prescribed "nder 5ection 1<&/' of R.A. 3o. -<4, to )it%

/

http://www.lawphil.net/judjuris/juri2009/mar2009/gr_167614_2009.html#fnt79





A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (! months" salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one(1! year or more. #his is evident from the words $for every year of the unexpired term% which follows the words $salaries x x x for three months.% To follo) petitioners: thinin that priate respondent is entitled to months salary only simply beca"se it is the lesseramo"nt is to completely disreard and oerloo some )ords "sed in the stat"te )hile iin effect to some. This is contrary to the )ell(

established r"le in leal hermene"tics that in interpretin a stat"te, care sho"ld be taen that eery part or )ord thereof be ien effect sincethe la)(main body is pres"med to no) the meanin of the )ords employed in the stat"e and to hae "sed them adisedly. :t res magisvaleat &!am pereat .

Fnder 5ection 1< of R.A. 3o. -<42, a )orer dismissed from oerseas employment )itho"t "st, alid or a"thoried ca"se is entitled to hissalary for the "ne@pired portion of his employment contract or for months for eery year of the "ne@pired term, )hicheer is less.

$n the case at bar, the "ne@pired portion of priate respondent:s employment contract is - months. ;riate respondent sho"ld therefore bepaid his basic salary correspondin to months or a total of 5R,*<<.

5ec. 1< of R.A. -<42 classifies O96s into t)o cateories. The first cateory incl"des O96s )ith fi@ed(period employment contracts ofless than one year0 in case of illeal dismissal, they are entitled to their salaries for the entire "ne@pired portion of their contract. The secondcateory consists of O96s )ith fi@ed(period employment contracts of one year or more0 in case of illeal dismissal, they are entitled tomonetary a)ard eH"ialent to only months of the "ne@pired portion of their contracts.

The disparity in the treatment of these t)o ro"ps cannot be disco"nted. $n S$ippers, the respondent O96 )ored for only 2 months o"tof his *(month contract, b"t )as a)arded his salaries for the remainin 4 months. $n contrast, the respondent O96sin riental and +#L )ho had also )ored for abo"t 2 months o"t of their 12(month contracts )ere a)arded their salaries for only monthsof the "ne@pired portion of their contracts. Een the O96s inoled in )alidano and :nivan )ho had )ored for a loner period of monthso"t of their 12(month contracts before bein illeally dismissed )ere a)arded their salaries for only months.

$t is plain that prior to R.A. 3o. -<42, all O96s, reardless of contract periods or the "ne@pired portions thereof, )ere treated alie interms of the comp"tation of their monetary benefits in case of illeal dismissal. Their claims )ere s"bected to a "niform r"le of comp"tation%their basic salaries m"ltiplied by the entire "ne@pired portion of their employment contracts.

The enactment of the s"bect cla"se in R.A. 3o. -<42 introd"ced a differentiated r"le of comp"tation of the money claims of illeallydismissed O96s based on their employment periods, in the process singling out one cateory )hose contracts hae an "ne@pired portion

of one year or more and s"bectin them to the pec"liar disadantae of hain their monetary a)ards limited to their salaries for monthsor for the "ne@pired portion thereof, )hicheer is less, b"t all the )hile sparin the other cateory from s"ch pre"dice, simply beca"se thelatter:s "ne@pired contracts fall short of one year.

The Co"rt notes that the s"bect cla"se or for three &' months for eery year of the "ne@pired term, )hicheer is less> contains theH"alifyin phrases eery year> and "ne@pired term.> !y its ordinary meanin, the )ord term> means a limited or definite e@tent oftime. Corollarily, that eery year> is b"t part of an "ne@pired term> is sinificant in many )ays% first, the "ne@pired term m"st be at least oneyear, for if it were any shorter, there wo!ld be no occasion for s!ch !ne(pired term to be meas!red by every year 0 and second, the oriinalterm m"st be more than one year, for other)ise, )hateer )o"ld be the "ne@pired term thereof )ill not reach een a year. ConseH"ently, themore decisie factor in the determination of )hen the s"bect cla"se for three &' months for eery year of the "ne@pired term, )hicheer isless> shall apply is not the lenth of the oriinal contract period as held in 'arsaman, b"t the lenth of the "ne@pired portion of the contractperiod (( the s"bect cla"se applies in cases )hen the "ne@pired portion of the contract period is at least one year, )hich arithmeticallyreH"ires that the oriinal contract period be more than one year.

Die)ed in that liht, the s"bect cla"se creates a s"b(layer of discrimination amon O96s )hose contract periods are for more than oneyear% those )ho are illeally dismissed )ith less than one year left in their contracts shall be entitled to their salaries for the entire "ne@piredportion thereof, )hile those )ho are illeally dismissed )ith one year or more remainin in their contracts shall be coered by the s"bectcla"se, and their monetary benefits limited to their salaries for three months only.

#he &ourt concludes that the su'ect clause contains a suspect classification in that, in the computation of the monetary 'enefits of fixed)term employees who are illegally discharged, it imposes a )month cap on the claim of *+s with an unexpired

portion of one year or more in their contracts, 'ut none on the claims of other *+s or local workers with fixed)term employment.#he su'ect clause singles out one classification of *+s and 'urdens it with a peculiar disadvantage.

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There bein a s"spect classification inolin a "lnerable sector protected by the Constit"tion, the Co"rt no) s"bects the classification toa strict "dicial scr"tiny, and determines )hether it seres a compellin state interest thro"h the least restrictie means.

6hat constit"tes compellin state interest is meas"red by the scale of rihts and po)ers arrayed in the Constit"tion and calibrated byhistory. $t is ain to the paramo"nt interest of the state for )hich some indiid"al liberties m"st ie )ay, s"ch as the p"blic interest insafe"ardin health or maintainin medical standards, or in maintainin access to information on matters of p"blic concern.

$n this case, the #oernment has failed to dischare its b"rden of proin the e@istence of a compellin state interest that )o"ld "stify theperpet"ation of the discrimination aainst O96s "nder the s"bect cla"se.

Ass"min that, as adanced by the O5#, the p"rpose of the s"bect cla"se is to protect the employment of O96s by mitiatin thesolidary liability of placement aencies, s"ch callo"s and caalier rationale )ill hae to be reected. There can neer be a "stification for anyform of oernment action that alleiates the b"rden of one sector, b"t imposes the same b"rden on another sector, especially )hen thefaored sector is composed of priate b"sinesses s"ch as placement aencies, )hile the disadantaed sector is composed of O96s

)hose protection no less than the Constit"tion commands. The idea that priate b"siness interest can be eleated to the leel of acompellin state interest is odio"s.

Moreoer, een if the p"rpose of the s"bect cla"se is to lessen the solidary liability of placement aencies vis"a"vis their forein principals,there are mechanisms already in place that can be employed to achiee that p"rpose )itho"t infrinin on the constit"tional rihts of O96s.

Th"s, the s"bect cla"se in the /th pararaph of 5ection 1< of R.A. 3o. -<42 is iolatie of the riht of petitioner and other O96s to eH"alprotection.

9"rther, there )o"ld be certain misiins if one is to approach the declaration of the "nconstit"tionality of the s"bect cla"se from the loneperspectie that the cla"se directly iolates state policy on labor "nder 5ection , Article Q$$$ of the Constit"tion.

The Co"rt f"rther holds that the s"bect cla"se iolates petitioner:s riht to s"bstantie d"e process, for it depries him of property,consistin of monetary benefits, )itho"t any e@istin alid oernmental p"rpose.

The s"bect cla"se does not state or imply any definitie oernmental p"rpose0 and it is for that precise reason that the cla"se iolatesnot "st petitioner:s riht to eH"al protection, b"t also her riht to s"bstantie d"e process "nder 5ection 1, 17 Article $$$ of the Constit"tion.

BALLADARES v. EA: ENTURES CORORATIONEL TIGRE SECURITY AND INESTIGATION AGENCY

G.R. No. 16159+. !u*& 16, 49NACHURA, !.

"#$ts%

;etitioners 3estor +. !alladares, Roldan . #"anio, Arn"lfo E. Merto, #eronimo #. #ob"yan, Edardo O. Aila, and Ed"ard 9. Ramos, +r. )ere employed by respondent ;ea Dent"res Corporation=El Tire 5ec"rity and $nestiation Aency &;ea Dent"res' as sec"rity "ardsand )ere assined at the premises of respondent Banco Maret O)ners and Administrators Association &BMOAA'. They filed a complaintfor "nderpayment of )aes aainst their employer, ;ea Dent"res, )ith the ?epartment of abor and Employment &?OE'.

Actin on the complaint, ?OE cond"cted an inspection of ;ea Dent"res on March 4, 1, and the follo)in iolations )ere noted%

( "nderpayment of the minim"m )ae and other a"@iliary benefits0

( pertinent employment records &payrolls, daily time records, contract of employment' )ere not aailable at the time of inspection.

A 3otice of $nspection Res"lt )as iss"ed to and receied by the 8"man Reso"rce ?epartment Manaer, Ms. Cristina Dillacr"sis. ;eaDent"res )as instr"cted to effect restit"tion and=or to file its obections )ithin / )orin days from receipt thereof.

Respondent failed to correct the iolations or contest the findins as reH"ired0 hence, the parties )ere s"mmoned for hearin. ?"rin thesched"led hearin on March 2*, 1, both complainants and ;ea Dent"res moed to implead its client, BMOAA, represented by its;resident, Ms. ao Ti 5io !ee, as party respondent. BMOAA opposed on the ro"nd that it )as not the employer of petitioners. On May 2/,1, ;ea Dent"res filed a Third(;arty Complaint and=or ;osition ;aper )ith leae of co"rt, allein that ;ea Dent"res )as entitled toindemnity or s"broation from BMOAA in respect to the monetary claims of petitioners, beca"se the ca"se of the "nderpayment of )aes, if

*1







any, arose from the fail"re of the BMOAA to pay the sec"rity aency the correct amo"nt d"e petitioners as prescribed by ario"s 6aeOrders.

Reional ?irector Ma@imo !a"yot im rendered "dment in faor of petitioners and r"led that the contractor )as ointly and seerallyliable )ith the principal.

Issu&%

6O3 the ?OE Reional ?irector has "risdiction to tae coniance of the case

H&'(%

;etitioners: complaint inoled "nderpayment of )aes and other benefits. $n order to erify the alleations in the complaint, ?OEcond"cted an inspection, )hich yielded proof of iolations of labor standards. !y the nat"re of the complaint and from the res"lt of theinspection, the a"thority of the ?OE, "nder Article 12-, came into play reardless of the monetary al"e of the claims inoled. The e@tentof this a"thority and the po)ers flo)in therefrom are defined and set forth in Article 12- of the abor Code, as amended by R.A. 3o.77<, the pertinent portions of )hich read as follo)s%

ART. 12-. Disitorial and enforcement po)er. G &a' The 5ecretary of abor or his d"ly a"thoried representaties, incl"din labor re"lationofficers, shall hae access to employer:s records and premises at any time of the day or niht )heneer )or is bein "ndertaen therein,and the riht to copy therefrom, to H"estion any employee and inestiate any fact, condition or matter )hich may be necessary to determineiolations or )hich may aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"antthereto.

&b' 3ot)ithstandin the proisions of Articles 12 and 217 of this Code to the contrary, and in cases )here the relationship of employer(employee still e@ists, the 5ecretary of abor and Employment or his d"ly a"thoried representaties shall hae the po)er to iss"ecompliance orders to ie effect to the labor standards proisions of this Code and other labor leislation based on the findins of laboremployment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The 5ecretary or his d"ly a"thoriedrepresentaties shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of their orders, e@cept in cases )here theemployer contests the findin of the labor employment and enforcement officer and raises iss"es s"pported by doc"mentary proofs )hich

)ere not considered in the co"rse of inspection.

An order iss"ed by the d"ly a"thoried representatie of the 5ecretary of abor and Employment "nder this article may be appealed to thelatter. $n case said order inoles a monetary a)ard, an appeal by the employer may be perfected only "pon the postin of a cash or s"rety

bond iss"ed by a rep"table bondin company d"ly accredited by the 5ecretary of abor and Employment in the amo"nt eH"ialent to themonetary a)ard in the order appealed from.>

The 5ecretary of abor or his d"ly a"thoried representaties is empo)ered to hear and decide, in a s"mmary proceedin, any matterinolin the recoery of any amo"nt of )aes and other monetary claims arisin o"t of employer(employee relations at the time of theinspection, een if the amo"nt of the money claim e@ceeds ;/,<<<.<<.

6hile it is tr"e that "nder Articles 12 and 217 of the abor Code, the abor Arbiter has "risdiction to hear and decide cases )here theareate money claims of each employee e@ceeds ;/,<<<.<<, said proisions of la) do not contemplate nor coer the isitorial andenforcement po)ers of the 5ecretary of abor or his d"ly a"thoried representaties. Rather, said po)ers are defined and set forth in Article12- of the abor Code.

The aforeH"oted proision e@plicitly e@cl"des from its coerae Articles 12 and 217 of the abor Code by the phrase &3'ot)ithstandin the

proisions of Articles 12 and 217 of this Code to the contrary @ @ @> thereby retainin and f"rther strenthenin the po)er of the 5ecretary ofabor or his d"ly a"thoried representaties to iss"e compliance orders to ie effect to the labor standards proisions of said Code andother labor leislation based on the findins of labor employment and enforcement officer or ind"strial safety enineer made in the co"rse ofinspection.

8o)eer, if the labor standards case is coered by the e@ception cla"se in Article 12- &b' of the abor Code, then the Reional ?irector )illhae to endorse the case to the appropriate Arbitration !ranch of the 3RC. $n order to diest the Reional ?irector or his representaties of

"risdiction, the follo)in elements m"st be present% &a' that the employer contests the findins of the labor re"lations officer and raisesiss"es thereon0 &b' that in order to resole s"ch iss"es, there is a need to e@amine eidentiary matters0 and &c' that s"ch matters are noterifiable in the normal co"rse of inspection. The r"les also proide that the employer shall raise s"ch obections d"rin the hearin of thecase or at any time after receipt of the notice of inspection res"lts.

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$n this case, the Reional ?irector alidly ass"med "risdiction oer the money claims of priate respondents een if the claimse@ceeded ;/,<<< beca"se s"ch "risdiction )as e@ercised in accordance )ith Article 12-&b' of the abor Code and the case does not fall"nder the e@ception cla"se.

METEORO v. CREATIE CREATURES, INC.

G.R. No. 15145. !u'2 13, 49NACHURA, !.

"#$ts%

Respondent is a domestic corporation enaed in the b"siness of prod"cin, proidin, or proc"rin the prod"ction of set desins and setconstr"ction serices for teleision e@hibitions, concerts, theatrical performances, motion pict"res and the lie. $t primarily caters to theprod"ction desin reH"irements of A!5(C!3 !roadcastin Corporation in Metro Manila and nation)ide. On the other hand, petitioners )erehired by respondent on ario"s dates as artists, carpenters and )elders. They )ere tased to desin, create, assemble, set("p anddismantle props, and proide so"nd effects to respondent:s ario"s TD prorams and moies.

5ometime in 9ebr"ary and March 1, petitioners filed their respectie complaints for non(payment of niht shift differential pay, oertimepay, holiday pay, 1th month pay, premi"m pay for 5"ndays and=or rest days, serice incentie leae pay, paternity leae pay, ed"cationalassistance, rice benefits, and illeal and=or "na"thoried ded"ctions from salaries aainst respondent, before the ?epartment of abor andEmployment &?OE', 3ational Capital Reion &3CR'.

After the inspection cond"cted at respondent:s premises, the labor inspector noted that the records )ere not made aailable at the time ofthe inspection0> that respondent claimed that petitioners )ere contract"al employees and=or independent talent )orers0 and that petitioners

)ere reH"ired to p"nch their cards.

Respondent ar"ed that the ?OE(3CR had no "risdiction oer the complaint of the petitioners beca"se of the absence of an employer(employee relationship. $t added that petitioners )ere free(lance indiid"als, performin special serices )ith sills and e@pertise inherentlye@cl"sie to them lie actors, actresses, directors, prod"cers, and script )riters, s"ch that they )ere treated as special types of )orers.

Mean)hile, petitioners filed a complaint for illeal dismissal aainst petitioner, )ith prayer for payment of oertime pay, premi"m pay forholiday and rest day, holiday pay, serice incentie leae pay, 1th month pay and attorney:s fees before the 3ational abor RelationsCommission &3RC'.

Issu&%

6hich body=trib"nal has "risdiction oer petitioners: money claims ((( the ?OE 5ecretary or his d"ly a"thoried representatie, or the3RCL

H&'(%

The instant case falls )ithin the e@cl"sie "risdiction of the 3RC.

The ?OE 5ecretary and her a"thoried representaties, s"ch as the ?OE(3CR Reional ?irector, hae "risdiction to enforcecompliance )ith labor standards la)s "nder the broad isitorial and enforcement po)ers conferred by Article 12- of the abor Code, ande@panded by Rep"blic Act &R.A.' 3o. 77<, to )it%

Art. 12-. Disitorial and Enforcement ;o)er G

a. The 5ecretary of abor or his d"ly a"thoried representaties, incl"din labor re"lation officers, shall hae access to employer:srecords and premises at anytime of the day or niht )heneer )or is bein "ndertaen therein, and the riht to copy therefrom, toH"estion any employee and inestiate any fact, condition or matter )hich may be necessary to determine iolations or )hich mayaid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant thereto.

b. 3ot)ithstandin the proisions of Article 12 and 217 of this Code to the contrary, and in cases )here the relationship of employer(employee relation still e@ists, the 5ecretary of abor and Employment or his d"ly a"thoried representaties shall hae the po)erto iss"e compliance orders to ie effect to the labor standards proisions of this Code and other labor leislation based on thefindins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The

*




5ecretary or his d"ly a"thoried representaties shall iss"e )rits of e@ec"tion, to the appropriate a"thority for the enforcement oftheir orders, e@cept in cases )here the employer contests the findins of the labor employment and enforcement officer and raisesiss"es s"pported by doc"mentary proofs )hich )ere not considered in the co"rse of inspection.

The isitorial and enforcement po)ers of the 5ecretary, e@ercised thro"h his representaties, encompass compliance )ith all laborstandards la)s and other labor leislation, reardless of the amo"nt of the claims filed by )orers.

The isitorial and enforcement po)ers of the 5ecretary, e@ercised thro"h his representaties, encompass compliance )ith all laborstandards la)s and other labor leislation, reardless of the amo"nt of the claims filed by )orers.

The so(called e@ception cla"se> has the follo)in elements, all of )hich m"st conc"r%

a. that the employer contests the findins of the labor re"lations officer and raises iss"es thereon0b. that in order to resole s"ch iss"es, there is a need to e@amine eidentiary matters0 andc. that s"ch matters are not erifiable in the normal co"rse of inspection.

$n the present case, the CA aptly applied the e@ception cla"se.> At the earliest opport"nity, respondent reistered its obection to thefindins of the labor inspector. The labor inspector, in fact, noted in its report that respondent alleed that petitioners )ere contract"al

)orers and=or independent and talent )orers )itho"t control or s"perision and also s"pplied )ith tools and apparat"s pertainin to their ob.> $n its position paper, respondent aain insisted that petitioners )ere not its employees. $t then H"estioned the Reional ?irector:s "risdiction to entertain the matter before it, primarily beca"se of the absence of an employer(employee relationship. 9inally, it raised thesame ar"ments before the 5ecretary of abor and the appellate co"rt. $t is, therefore, clear that respondent contested and contin"es tocontest the findins and concl"sions of the labor inspector.

The follo)in elements constit"te the reliable yardstic to determine s"ch relationship% &a' the selection and enaement of the employee0&b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to control the employee:s cond"ct. There is no hard andfast r"le desined to establish the aforesaid elements. Any competent and releant eidence to proe the relationship may be admitted.$dentification cards, cash o"chers, social sec"rity reistration, appointment letters or employment contracts, payrolls, oraniation charts,and personnel lists, sere as eidence of employee stat"s. These pieces of eidence are readily aailable, as they are in the possession ofeither the employee or the employer0 and they may easily be looed into by the labor inspector &in the co"rse of inspection' )hen confronted

)ith the H"estion of the e@istence or absence of an employer(employee relationship.

$o*to' t&st% )hether the employer controls or has resered the riht to control the employee, not only as to the res"lt of the )or to bedone, b"t also as to the means and methods by )hich the same is to be accomplished

HILIINE LONG DISTANCE TELEHONE COMANY v. THE NATIONAL LABOR RELATIONS COMMISSION #*( MARILYN ABUCAY

"#$ts%Marilyn Ab"cay, a traffic operator of the ;hilippine on ?istance Telephone Company, )as acc"sed by t)o complainants of haindemanded and receied from them the total amo"nt of ;,-<<.<< in consideration of her promise to facilitate approal of their applicationsfor telephone installation. 1 $nestiated and heard, she )as fo"nd "ilty as chared and accordinly separated from the serice. 45he )entto the Ministry of abor and Employment claimin she had been illeally remoed. After consideration of the eidence and ar"ments of theparties, the company )as s"stained and the complaint )as dismissed for lac of merit. 3eertheless, the dispositie portion of labor arbiter:sdecision declared%

Considerin that ?r. 8elen !anayan and Mrs. Consolacion Martine are not totally blameless in the liht of the fact that the deal happened

o"thide the premises of respondent company and that their act of iin ;,-<<.<< )itho"t any receipt is tantamo"nt to corr"ption of p"blicofficers, complainant m"st be ien one month pay for eery year of serice as financial assistance.>

Issu&%$s the a)ard of financial assistance to an employee )ho had been dismissed for ca"se as fo"nd by the p"blic respondent properL

H&'(%3o. 5eparation pay shall be allo)ed as a meas"re of social "stice only in those instances )here the employee is alidly dismissed forca"ses other than serio"s miscond"ct or those reflectin on his moral character. 6here the reason for the alid dismissal is, for e@ample,habit"al into@ication or an offense inolin moral t"rpit"de, lie theft or illicit se@"al relations )ith a fello) )orer, the employer may not be

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reH"ired to ie the dismissed employee separation pay, or financial assistance, or )hateer other name it is called, on the ro"nd of social "stice.

Applyin the aboe considerations, the rant of separation pay in the case at bar is "n"stified. The priate respondent has been dismissedfor dishonesty, as fo"nd by the labor arbiter and affirmed by the 3RC and as she herself has impliedly admitted. The fact that she has

)ored )ith the ;?T for more than a decade, if it is to be considered at all, sho"ld be taen aainst her as it reflects a rerettable lac ofloyalty that she sho"ld hae strenthened instead of betrayin d"rin all of her 1< years of serice )ith the company. $f rearded as a

"stification for moderatin the penalty of dismissal, it )ill act"ally become a prie for disloyalty, perertin the meanin of social "stice and"nderminin the efforts of labor to cleanse its rans of all "ndesirables.

The separation pay, if fo"nd d"e "nder the circ"mstances of each case, sho"ld be comp"ted at the rate of one month salary for eery year ofserice, ass"min the lenth of s"ch serice is deemed material. This is )itho"t pre"dice to the application of special areements bet)eenthe employer and the employee stip"latin a hiher rate of comp"tation and proidin for more benefits to the dischared employee.

IMELDA DARIN v. HON. COURT O" AEALS #*( EOLE O" THE HILIINESG.R. No. 14++ !u'2 13, 1998

"#$ts%Macaria Toledo met acc"sed(appellant ?arin in the latter:s residence. $n said meetin, acc"sed(appellant alleedly coninced Toledo thatby iin her ;1/<,<<<.<<, the latter can immediately leae for the Fnited 5tates )itho"t any appearance before the F.5. embassy. Th"s,Toledo ae ?arin the amo"nt of ;1/<,<<<.<<, as eidenced by a receipt statin that the amo"nt of ;1/<,<<<.<< )as for F.5. Disa and Airfare.> After receiin the money, ?arin ass"red Toledo that she can leae )ithin one )ee. 8o)eer, )hen after a )ee, there )as no )ordfrom ?arin, Toledo )ent to her residence to inH"ire abo"t any deelopment, b"t co"ld not find ?arin. Thereafter, Toledo filed a complaint

)ith the !acoor ;olice 5tation aainst $melda ?arin. Fpon f"rther inestiation, a certification )as iss"ed by the ;hilippine OerseasEmployment Administration &;OEA' statin that $melda ?arin is neither licensed nor a"thoried to recr"it )orers for oerseas employment.Acc"sed(appellant )as then chared for estafa and illeal recr"itment by the Office of the ;roincial ;rosec"tor of Caite.

Issu&% )hether the acc"sed(appellant enaed in recr"itment actiities

H&'(%3o. There is no s"fficient eidence to proe that acc"sed(appellant offered a ob to priate respondent. $t is not clear that acc"sed ae theimpression that she )as capable of proidin the priate respondent )or abroad. 6hat is established, ho)eer, is that the priate

respondent ae acc"sed(appellant ;1/<,<<<.<<. The claim of the acc"sed that the ;1/<,<<<.<< )as for payment of priate respondent:sair fare and F5 isa and other e@penses cannot be inored beca"se the receipt for the ;1/<,<<<.<<, )hich )as presented by both partiesd"rin the trial of the case, stated that it )as for Air 9are and Disa to F5A.> 8ad the amo"nt been for somethin else in addition to air fareand isa e@penses, s"ch as )or placement abroad, the receipt sho"ld hae so stated.

!y themseles, proc"rin a passport, airline ticets and forein isa for another indiid"al, )itho"t more, can hardly H"alify as recr"itmentactiities. Aside from the testimony of priate respondent, there is nothin to sho) that acc"sed(appellant enaed in recr"itment actiities.6e also note that the prosec"tion did not present the testimonies of )itnesses )ho co"ld hae corroborated the chare of il leal recr"itment,s"ch as 9lorencio Riera, and eonila Riera, )hen it had the opport"nity to do so. As it stands, the claim of priate respondent thatacc"sed(appellant promised her employment abroad is "ncorroborated. All these, taen collectiely, cast reasonable do"bt on the "ilt of theacc"sed.

STRONGHOLD INSURANCE COMANY, INC. v. HON. COURT O" AEALS #*( ADRIANO URTESUELAG.R. No. 88 !#*u#2 3, 1994

"#$ts%Actin on behalf of its forein principal, atar 3ational 9ishin Co., ;an Asian oistics and Tradin, a domestic recr"itin and placementaency, hired Adriano Frtes"ela as captain of the essel M=D Ory@ for the stip"lated period of t)ele months. The reH"ired s"rety bond, inthe amo"nt of ;/<,<<<.<<, )as s"bmitted by ;an Asian and 5tronhold $ns"rance Co., $nc., the herein petitioner, to ans)er for the liabilitiesof the employer. Frtes"ela ass"med his d"ties on April 1-, 1-2, b"t three months later his serices )ere terminated and he )as repatriatedto Manila. 8e there"pon filed a complaint aainst ;an Asian and his former employer )ith the ;hilippine Oerseas EmploymentAdministration for breach of contract and damaes.

*/




The ;OEA rendered a decision in his faor for the amo"nt of ;*,74.4, representin his salaries for the "ne@pired portion of his contractand the cash al"e of his "n"sed acation leae, pl"s attorney:s fees and costs, )hich the respondents )ere reH"ired to pay. The "dmenteent"ally became final and e@ec"tory, not hain been appealed on time. ;"rs"ant thereto, a )rit of e@ec"tion )as iss"ed aainst ;anAsian b"t co"ld be enforced only aainst its cash bond of ;1<,<<<.<<, the company hain ceased to operate. Frtes"ela then filed acomplaint )ith the $ns"rance Commission aainst 5tronhold on the basis of the aforementioned s"rety bond and prayed for the al"ethereof pl"s attorney:s fees and litiation costs.

Fnder the bond, the petitioner and ;an Asian "ndertoo G

To ans)er for all liabilities )hich the ;hilippine Oerseas Employment Administration may ad"de=impose aainst the ;rincipal inconnection )ith the recr"itment of 9ilipino seamen.

$t is "nderstood that notice to the ;rincipal is notice to the s"rety.

68EREA5, the liability of the s"rety "nder this !ond shall in no case e@ceed the s"m of ;E5O5% 9$9TB T8OF5A3? O3B &;/<,<<<.<<';hilippine C"rrency.>

Issu&%$s petitioner liable on a s"rety bond e@ec"ted for the protection of a 9ilipino seamanL

H&'(%Bes. $n the s"rety bond, the petitioner "neH"iocally bo"nd itself to ans)er for all liabilities )hich the ;hilippine Oerseas EmploymentAdministration may ad"de=impose aainst the ;rincipal in connection )ith the recr"itment of 9ilipino seamen. 5trictly interpreted, this )o"ldmean that the petitioner areed to ans)er for )hateer decision miht be rendered aainst the principal, )hether or not the s"rety )asimpleaded in the complaint and had the opport"nity to defend itself. There is nothin in the stip"lation callin for a direct "dment aainstthe s"rety as a co(defendant in an action aainst the principal. On the contrary, the petitioner areed to ans)er for all liabilities> that mihtbe ad"ded or imposed by the ;OEA against the +rincipal .>

Do$t)*&%The s"rety bond reH"ired of recr"itment aencies is intended for the protection of o"r citiens )ho are enaed for oerseas employment byforein companies. The p"rpose is to ins"re that if the rihts of these oerseas )orers are iolated by their employers, reco"rse )o"ld stillbe aailable to them aainst the local companies that recr"ited them for the forein principal. The forein principal is o"tside the "risdictionof o"r co"rts and )o"ld probably hae no properties in this co"ntry aainst )hich an aderse "dment can be enforced. This diffic"lty iscorrected by the bond, )hich can be proceeded aainst to satisfy that "dment.

HORTENCIA SALA;AR v. HON. TOMAS D. ACHACOSO, )* )s $#-#$)t2 #s A(0)*)st#to o/ t& )')--)*& Ov&s&#s E0-'o20&*tA(0)*)st#t)o*, #*( "ERDIE MARUE;G.R. No. 811 M#$ 1+, 199

"#$ts%On +an"ary 2*, 1-*, he, Mr. Marcos, prom"lated ;residential ?ecree 3o. 2<1-, iin the abor Minister search and sei"re po)ers as

)ell%

&c' The Minister of abor and Employment or his d"ly a"thoried representaties shall hae the po)er to ca"se the arrest and detention ofs"ch non(licensee or non(holder of a"thority if after inestiation it is determined that his actiities constit"te a daner to national sec"rityand p"blic order or )ill lead to f"rther e@ploitation of ob(seeers. The Minister shall order the search of the office or premises and sei"re of

doc"ments, paraphernalia, properties and other implements "sed in illeal recr"itment actiities and the clos"re of companies, establishmentand entities fo"nd to be enaed in the recr"itment of )orers for oerseas employment, )itho"t hain been licensed or a"thoried to doso.>

The aboe has no) been etched as Article -, pararaph &c' of the abor Code.

On the basis of the aforeH"oted proision, the ;OEA iss"ed a search )arrant and seied some personal properties from the residence of8orty 5alaar, alleed to be enaed in illeal recr"itment.

Issu&%

**




May the ;hilippine Oerseas Employment Administration &or the 5ecretary of abor' alidly iss"e )arrants of search and sei"re &or arrest'"nder Article - of the abor CodeL

H&'(%3o. The 5ecretary of abor, not bein a "de, may no loner iss"e search or arrest )arrants. 8ence, the a"thorities m"st o thro"h the

"dicial process. To that e@tent, Article -, pararaph &c', of the abor Code, is "nconstit"tional and of no force and effect.

The search and sei"re order in H"estion, ass"min, e( gratia arg!menti , that it )as alidly iss"ed, is clearly in the nat"re of a eneral )arrant%

;"rs"ant to the po)ers ested in me "nder ;residential ?ecree 3o. 12< and E@ec"tie Order 3o. 1<22, $ hereby order the CO5FRE ofyo"r recr"itment aency bein operated at 3o. *1/ R.O. 5antos 5t., Mandal"yon, Metro Manila and the sei"re of the doc"ments andparaphernalia bein "sed or intended to be "sed as the means of committin illeal recr"itment, i t hain erified that yo" hae

&1' 3o alid license or a"thority from the ?epartment of abor and Employment to recr"it and deploy )orers for oerseasemployment0

&2' Committed=are committin acts prohibited "nder Article 4 of the 3e) abor Code in relation to Article - of the same code.>

A )arrant m"st identify clearly the thins to be seied, other)ise, it is n"ll and oid.

9or the "idance of the bench and the bar, the Co"rt reaffirmed the follo)in principles%1. Fnder Article $$$, 5ection 2, of the l-7 Constit"tion, it is only "des, and no other, )ho may iss"e )arrants of arrest and search%2. The e@ception is in cases of deportation of illeal and "ndesirable aliens, )hom the ;resident or the Commissioner of $mmiration

may order arrested, follo)in a final order of deportation, for the p"rpose of deportation.

MARITES BERNARDO v. NLRC #*( "AR EAST BAN: AND TRUST COMANYG.R. No. 144915 !u'2 14, 1999

"#$ts%

Complainants n"mberin 4 are deaf(m"tes )ho )ere hired on ario"s periods from 1-- to 1 by respondent 9ar East !an and Tr"stCo. as Money 5orters and Co"nters thro"h a "niformly )orded areement called Employment Contract for 8andicapped 6orers>. Theemployment contract, amon others, proided for the follo)in stip"lations%

1. The !A3P arees to employ and train the EM;OBEE, and the EM;OBEE arees to diliently and faithf"lly )or )ith the !A3P,as 'oney Sorter and #o!nter .

2. The EM;OBEE shall perform amon others, the follo)in d"ties and responsibilities%i. 5ort o"t bills accordin to color0ii. Co"nt each denomination per h"ndred, either man"ally or )ith the aid of a co"ntin machine0iii. 6rap and label bills per h"ndred0i. ;"t the )rapped bills into b"ndles0 and. 5"bmit b"ndled bills to the ban teller for erification.

. The EM;OBEE shall "ndero a trainin period of one &1' month, after )hich the !A3P shall determine )hether or not he=shesho"ld be allo)ed to finish the remainin term of this Contract.

4. The EM;OBEE shall be entitled to an initial compensation of ;11-.<< per day, s"bect to ad"stment in the sole "dment of the!A3P, payable eery 1/th and end of the month

/. The re"lar )or sched"le of the EM;OBEE shall be fie &/' days per )ee, from Mondays thr" 9ridays, at eiht &-' ho"rs a day.The EM;OBEE may be reH"ired to perform oertime )or as circ"mstance may )arrant, for )hich oertime )or he=she IshallJbe paid an additional compensation of 12/N of his daily rate if performed d"rin ordinary days and 1<N if performed d"rin5at"rday or IaJ rest day.

*. The EM;OBEE shall lie)ise be entitled to the follo)in benefits%i. ;roportionate 1th month pay based on his basic daily )ae.ii. 9ie &/' days incentie leae.iii . 555 premi"m payment.>

$n 1--, 2 deaf(m"tes )ere hired "nder this Areement0 in 1- another 20 in 1<, 10 in 11 *0 in 12, * and in 1, 21. Theiremployments )ere rene)ed eery si@ months s"ch that by the time this case arose, there )ere /* deaf(m"tes )ho )ere employed by

*7




respondent "nder the said employment areement. The last one )as Thelma Malindoy )ho )as employed in 12 and )hose contracte@pired on +"ly 1.

Issu&% )hether petitioners hae become re"lar employees

H&'(%

The facts, ie)ed in liht of the abor Code and the Mana Carta for ?isabled ;ersons, ind"bitably sho) that the petitioners, e@cept si@teenof them, sho"ld be deemed re"lar employees. As s"ch, they hae acH"ired leal rihts that this Co"rt is d"ty(bo"nd to protect and "phold,not as a matter of compassion b"t as a conseH"ence of la) and "stice.

The "niform employment contracts of the petitioners stip"lated that they shall be trained for a period of one month, after )hich the employershall determine )hether or not they sho"ld be allo)ed to finish the *(month term of the contract. 9"rthermore, the employer may terminatethe contract at any time for a "st and reasonable ca"se. Fnless rene)ed in )ritin by the employer, the contract shall a"tomatically e@pire atthe end of the term.

Accordin to priate respondent, the employment contracts )ere prepared in accordance )ith Article -< of the abor code, )hich proides%

Art. -<. Employment areement. K Any employer )ho employs handicapped )orers shall enter into an employment areement )ith them, )hich areement shall incl"de%

a. The names and addresses of the handicapped )orers to be employed0b. The rate to be paid the handicapped )orers )hich shall be not less than seenty fie &7/N' per cent of the applicable leal

minim"m )ae0c. The d"ration of employment period0 andd. The )or to be performed by handicapped )orers.

The employment areement shall be s"bect to inspection by the 5ecretary of abor or his d"ly a"thoried representaties.>

The stip"lations in the employment contracts ind"bitably conform )ith the aforecited proision. 5"cceedin eents and the enactment of RA3o. 7277 &the Mana Carta for ?isabled ;ersons', ho)eer, "stify the application of Article 2-< of the abor Code.

Respondent ban entered into the aforesaid contract )ith a total of /* handicapped )orers and rene)ed the contracts of 7 of them. $nfact, t)o of them )ored from 1-- to 1. Derily, the rene)al of the contracts of the handicapped )orers and the hirin of others lead to

the concl"sion that their tass )ere beneficial and necessary to the ban. More important, these facts sho) that they )ere H"alified toperform the responsibilities of their positions. $n other )ords, their disability did not render them "nH"alified or "nfit for the tass assined tothem.

$n this liht, the Mana Carta for ?isabled ;ersons mandates that a H"alified disabled employee sho"ld be ien the same terms andconditions of employment as a H"alified able(bodied person. 5ection / of the Mana Carta proides%

5ec. /. E&!al pport!nity for Employment . K 3o disabled person shall be denied access to opport"nities for s"itable employment. AH"alified disabled employee shall be s"bect to the same terms and conditions of employment and the same compensation, priilees,benefits, frine benefits, incenties or allo)ances as a H"alified able bodied person.>

The fact that the employees )ere H"alified disabled persons necessarily remoes the employment contracts from the ambit of Article -<.5ince the Mana Carta accords them the rihts of H"alified able(bodied persons, they are th"s coered by Article 2-< of the abor Code,

)hich proides%

Art. 2-<. Reg!lar and #as!al Employment . K The proisions of )ritten areement to the contrary not)ithstandin and reardless of the oralareement of the parties, an employment shall be deemed to be re"lar )here the employee has been enaed to perform actiities )hichare "s"ally necessary or desirable in the "s"al b"siness or trade of the employer, e@cept )here the employment has been fi@ed for a specificproect or "ndertain the completion or termination of )hich has been determined at the time of the enaement of the employee or )herethe )or or serices to be performed is seasonal in nat"re and the employment is for the d"ration of the season.

An employment shall be deemed to be cas"al if it is not coered by the precedin pararaph% ;roided, That, any employee )ho hasrendered at least one year of serice, )hether s"ch serice is contin"o"s or broen, shall be considered as re"lar employee )ith respect tothe actiity in )hich he is employed and his employment shall contin"e )hile s"ch actiity e@ists.>

*-




The contract sined by petitioners is ain to a probationary employment, d"rin )hich the ban determined the employees: fitness for the ob. 6hen the ban rene)ed the contract after the lapse of the si@(month probationary period, the employees thereby became re"laremployees. 3o employer is allo)ed to determine indefinitely the fitness of its employees.

As re"lar employees, the t)enty(seen petitioners are entitled to sec"rity of ten"re0 that is, their serices may be terminated only for a "stor a"thoried ca"se. !eca"se respondent failed to sho) s"ch ca"se, these t)enty(seen petitioners are deemed illeally dismissed and

therefore entitled to bac )aes and reinstatement )itho"t loss of seniority rihts and other priilees. Considerin the alleation ofrespondent that the ob of money sortin is no loner aailable beca"se it has been assined bac to the tellers to )hom it oriinallybeloned, 1-petitioners are hereby a)arded separation pay in lie" of reinstatement.

!eca"se the other si@teen )ored only for si@ months, they are not deemed re"lar employees and hence not entitled to the same benefits.

SOCIAL SECURITY SYSTEM EMLOYEES ASSOCIATION ?SSSEA v. CAG.R. No. 8459 !u'2 48, 1989CORTES, !.

"#$ts%

The 555 filed a complaint for damaes )ith a prayer for a )rit of preliminary in"nction aainst petitioners, allein that on +"ne , 1-7,the officers and members of 555EA staed an illeal strie and barricaded the entrances to the 555 !"ildin, preentin non(striinemployees from reportin for )or and 555 members from transactin b"siness )ith the 5550 that the strie )as reported to the ;"blic5ector abor ( Manaement Co"ncil, )hich ordered the striers to ret"rn to )or0 that the striers ref"sed to ret"rn to )or0 and that the 555s"ffered damaes as a res"lt of the strie. The complaint prayed that a )rit of preliminary in"nction be iss"ed to enoin the strie and thatthe striers be ordered to ret"rn to )or0 that the petitioners be ordered to pay damaes0 and that the strie be declared illeal.

The 555EA )ent on strie after the 555 failed to act on the "nion:s demands, )hich incl"ded% implementation of the proisions of the old555(555EA collectie barainin areement &C!A' on chec(off of "nion d"es0 payment of accr"ed oertime pay, niht differential pay andholiday pay0 conersion of temporary or contract"al employees )ith * months or more of serice into re"lar and permanent employees andtheir entitlement to the same salaries, allo)ances and benefits ien to other re"lar employees of the 5550 and payment of the children:sallo)ance of ;<.<<, and after the 555 ded"cted certain amo"nts from the salaries of the employees and alleedly committed acts ofdiscrimination and "nfair labor practices.

The position of the petitioners is that the Reional Trial Co"rt had no "risdiction to hear the case initiated by the 555 and to iss"e therestrainin order and the )rit of preliminary in"nction, as "risdiction lay )ith the ?epartment of abor and Employment or the 3ational aborRelations Commission, since the case inoles a labor disp"te.

On the other hand, the 555 adances the contrary ie), on the ro"nd that the employees of the 555 are coered by ciil serice la)sand r"les and re"lations, not the abor Code, therefore they do not hae the riht to strie. 5ince neither the ?OE nor the 3RC has

"risdiction oer the disp"te, the Reional Trial Co"rt may enoin the employees from striin.

Issu&s%

. ?o the employees of the 555 hae the riht to strieL4. ?oes the Reional Trial Co"rt hae "risdiction to hear the case initiated by the 555 and to enoin the striers from contin"in )ith the

strie and to order them to ret"rn to )orL

H&'(%

Considerin that "nder the 1-7 Constit"tion TJhe ciil serice embraces all branches, s"bdiisions, instr"mentalities, and aencies of the#oernment, incl"din oernment(o)ned or controlled corporations )ith oriinal charters> IArt. $Q&!', 5ec. .2&l' see also 5ec. 1 of E.O. 3o.1-< )here the employees in the ciil serice are denominated as oernment employees>J and that the 555 is one s"ch oernment(controlled corporation )ith an oriinal charter, hain been created "nder R.A. 3o. 11*1, its employees are part of the ciil serice and arecoered by the Ciil 5erice Commission:s memorand"m prohibitin stries. This bein the case, the strie staed by the employees of the555 )as illeal.

*




The eneral r"le is that the terms and conditions of employment in the #oernment, incl"din any political s"bdiision or instr"mentalitythereof are oerned by la). 5ince the terms and conditions of oernment employment are fi@ed by la), oernment )orers cannot "sethe same )eapons employed by )orers in the priate sector to sec"re concessions from their employers. The principle behind labor"nionism in priate ind"stry is that ind"strial peace cannot be sec"red thro"h comp"lsion by la). Relations bet)een priate employers andtheir employees rest on an essentially ol"ntary basis. 5"bect to the minim"m reH"irements of )ae la)s and other labor and )elfareleislation, the terms and conditions of employment in the "nionied priate sector are settled thro"h the process of collectie barainin. $noernment employment, ho)eer, it is the leislat"re and, )here properly ien deleated po)er, the administratie heads of oernment

)hich fi@ the terms and conditions of employment. And this is effected thro"h stat"tes or administratie circ"lars, r"les, and re"lations, notthro"h collectie barainin areements.

E.O. 3o. 1-<, )hich proides "idelines for the e@ercise of the riht to oranie of oernment employees, )hile clinin to the samephilosophy, has, ho)eer, rela@ed the r"le to allo) neotiation )here the terms and conditions of employment inoled are not amon thosefi@ed by la). Th"s% 5ECT$O3 1. Terms and conditions of employment or improements thereof, e@cept those that are fi@ed by la), may bethe s"bect of neotiations bet)een d"ly reconied employees: oraniations and appropriate oernment a"thorities.>

The same e@ec"tie order has also proided for the eneral mechanism for the settlement of labor disp"tes in the p"blic sector to )it%5ECT$O3 1*. The Ciil 5erice and labor la)s and proced"res, )heneer applicable, shall be follo)ed in the resol"tion of complaints,rieances and cases inolin oernment employees. $n case any disp"te remains "nresoled after e@ha"stin all the aailable remedies"nder e@istin la)s and proced"res, the parties may ointly refer the disp"te to the ;"blic 5ector abor( Manaement Co"ncil for appropriateaction.>

#oernment employees may, therefore, thro"h their "nions or associations, either petition the Conress for the betterment of the termsand conditions of employment )hich are )ithin the ambit of leislation or neotiate )ith the appropriate oernment aencies for theimproement of those )hich are not fi@ed by la). $f there be any "nresoled rieances, the disp"te may be referred to the ;"blic 5ectorabor ( Manaement Co"ncil for appropriate action. !"t employees in the ciil serice may not resort to stries, )al(o"ts and othertemporary )or stoppaes, lie )orers in the priate sector, to press"re the #oernment to accede to their demands. As no) proided"nder 5ec. 4, R"le $$$ of the R"les and Re"lations to #oern the E@ercise of the Riht of #oernment( Employees to 5elf( Oraniation,

)hich too effect after the instant disp"te arose, ItJhe terms and conditions of employment in the oernment, incl"din any politicals"bdiision or instr"mentality thereof and oernment( o)ned and controlled corporations )ith oriinal charters are oerned by la) andemployees therein shall not strie for the p"rpose of sec"rin chanes thereof.>

The abor Code itself proides that terms and conditions of employment of oernment employees shall be oerned by the Ciil 5ericea), r"les and re"lations. More importantly, E.O. 3o. 1-< ests the ;"blic 5ector abor ( Manaement Co"ncil )ith "risdiction oer"nresoled labor disp"tes inolin oernment employees. Clearly, the 3RC has no "risdiction oer the disp"te.

This bein the case, the Reional Trial Co"rt )as not precl"ded, in the e@ercise of its eneral "risdiction "nder !.;. !l. 12, as amended,from ass"min "risdiction oer the 555:s complaint for damaes and iss"in the in"nctie )rit prayed for therein. Fnlie the 3RC, the;"blic 5ector abor ( Manaement Co"ncil has not been ranted by la) a"thority to iss"e )rits of in"nction in labor disp"tes )ithin its

"risdiction. Th"s, since it is the Co"ncil, and not the 3RC, that has "risdiction oer the instant labor disp"te, resort to the eneral co"rts ofla) for the iss"ance of a )rit of in"nction to enoin the strie is appropriate.

AER INDUSTRIES CORORATION O" THE HILIINES v. HON. BIENENIDO E. LAGUESMA, U*(&s&$&t#2 o/ L#o #*(E0-'o20&*t, HON. HENRY ABEL, D)&$to o/ t& D&-#t0&*t o/ L#o #*( E0-'o20&*t R&g)o*#' O//)$& No. FI #*(o t&R&-&s&*t#t)o* O//)$& o/ t& I*(ust)#' R&'#t)o*s D)v)s)o* o )'' #$t /o #*( )* )s &#'/, CO7 BISLIG SUERISORY ANDTECHNICAL STA"" EMLOYEES UNION, ASSOCIATED LABOR UNION #*( "EDERATION O" "REE @OR:ERS

"#$ts%;aper $nd"stries Corporation of the ;hilippines &;$CO;' is enaed in the man"fact"re of paper and timber prod"cts, )ith principal place ofoperations at Tabon, !isli, 5"riao del 5"r. $t has oer ,<<<employees, 44 of )hom are s"perisory and technical staff employees. Moreor less 4-7 of these s"perisory and technical staff employees are sinatory members of the priate respondent ;$CO;(!isli 5"perisoryand Technical 5taff Employees Fnion &;!5T5EF'.

;!5T5EF instit"ted a ;etition- for Certification Election to determine the sole and e@cl"sie barainin aent of the s"perisory andtechnical staff employees of ;$CO; for collectie barainin areement &C!A' p"rposes.

?"rin the pre(election conference, ;$CO; H"estioned and obected to the incl"sion of some section heads and s"perisors in the list ofoters )hose positions it aerred )ere reclassified as manaerial employees in the liht of the reoraniation effected by it. Fnder the

7<

http://www.lawphil.net/judjuris/juri2000/apr2000/gr_101738_2000.html#fnt8






Reised Oraniational 5tr"ct"re of the ;$CO;, the company )as diided into fo"r &4' main b"siness ro"ps, namely% ;aper ;rod"cts!"siness, Timber ;rod"cts !"siness, 9orest Reso"rce !"siness and 5"pport 5erices !"siness. A ice( president or assistant ice(president heads each of these b"siness ro"ps. A diision manaer heads the diisions comprisin each b"siness ro"p. A departmentmanaer heads the departments comprisin each diision. 5ection heads and s"perisors, no) called section manaers and "nit manaers,head the sections and independent "nits, respectiely, comprisin each department. ;$CO; adanced the ie) that considerin the alleedpresent a"thority of these section manaers and "nit manaers to hire and fire, they are classified as manaerial employees, and hence,ineliible to form or oin any labor oraniation.

9ollo)in the s"bmission by the parties of their respectie position papers and eidence on this iss"e, the Med(Arbiter iss"ed an order,holdin that s"perisors and section heads of the petitioner are manaerial employees and therefore e@cl"ded from the list of oters forp"rposes of certification election.

Issu&% )hether the s"perisors and section heads of the petitioner are manaerial employees and therefore e@cl"ded from the list of oters forp"rposes of certification election

H&'(% &3ote% This holdin is no loner controllin in liht of the later r"lin of the Co"rt that s"perisors are officers and members of themanaerial staff, and hence, fall "nder the term manaerial employees:.'

3o. Manaerial employees are raned as Top Manaers, Middle Manaers and 9irst ine Manaers. Top and Middle Manaers hae thea"thority to deise, implement and control strateic and operational policies )hile the tas of 9irst(ine Manaers is simply to ens"re thats"ch policies are carried o"t by the ran(and( file employees of an oraniation. Fnder this distinction, manaerial employees> therefore fallin 2 cateories, namely, the manaers> per se composed of Top and Middle Manaers, and the s"perisors> composed of 9irst(ineManaers. Th"s, the mere fact that an employee is desinated manaer> does not ipso facto mae him one. ?esination sho"ld bereconciled )ith the act"al ob description of the employee, for it is the ob description that determines the nat"re of employment.

$n this case, a thoro"h dissection of the ob description of the concerned s"perisory employees and section heads indisp"tably sho) thatthey are not act"ally manaerial b"t only s"perisory employees since they do not lay do)n company policies. ;$CO;:s contention that thes"bect section heads and "nit manaers e@ercise the a"thority to hire and fire / is ambi"o"s and H"ite misleadin for the reason that anya"thority they e@ercise is not s"preme b"t merely adisory in character. Theirs is not a final determination of the company policies inasm"chas any action taen by them on matters relatie to hirin, promotion, transfer, s"spension and termination of employees is still s"bect toconfirmation and approal by their respectie s"perior. Th"s, )here s"ch po)er, )hich is in effect recommendatory in character, is s"bect toeal"ation, reie) and final action by the department heads and other hiher e@ec"ties of the company, the same, altho"h present, is noteffectie and not an e@ercise of independent "dment as reH"ired by la).

NATIONAL SUGAR RE"INERIES COR. v. NLRC #*( NBSR SUERISORY UNION, ?ACI@U TUCG.R. No. 11561. M#$ 4+, 1993REGALADO, !.

"#$ts%

3ational 5"ar Refineries Corporation &3A5FRE9CO' operates s"ar refineries located at !"idnon, $loilo and !atanas. The !atanasrefinery )as priatied on April 11, 12 p"rs"ant to ;roclamation 3o. /<. 1 ;riate respondent "nion represents the former s"perisors ofthe 3A5FRE9CO !atanas 5"ar Refinery.

;etitioner implemented a +ob Eal"ation &+E' ;roram affectin all employees, from ran(and(file to department heads. The +E ;roram

)as desined to rationalied the d"ties and f"nctions of all positions, reestablish leels of responsibility, and reconie both )ae andoperational str"ct"res. +obs )ere raned accordin to effort, responsibility, trainin and )orin conditions and relatie )orth of the ob. As ares"lt, all positions )ere re(eal"ated, and all employees incl"din the members of respondent "nion )ere ranted salary ad"stments andincreases in benefits commens"rate to their act"al d"ties and f"nctions.

9or abo"t ten years prior to the +E ;roram, the members of respondent "nion )ere treated in the same manner as ran(and fileemployees. As s"ch, they "sed to be paid oertime, rest day and holiday pay p"rs"ant to the proisions of Articles -7, and 4 of the aborCode as amended. 6ith the implementation of the +E ;roram, the follo)in ad"stments )ere made% &1' the members of respondent "nion

)ere re(classified "nder leels 5(/ to 5(- )hich are considered manaerial staff for p"rposes of compensation and benefits0 &2' there )as anincrease in basic pay of the aerae of /<N of their basic pay prior to the +E ;roram, )ith the "nion members no) enoyin a )ide ap&;1,2*.<< per month' in basic pay compared to the hihest paid ran(and(file employee0 &' loneity pay )as increased on top of

71






The H"estion )hether a ien employee is e@empt from the benefits of the la) is a fact"al one dependent on the circ"mstances of thepartic"lar case, $n determinin )hether an employee is )ithin the terms of the stat"tes, the criterion is the character of the )or performed,rather than the title of the employee:s position.

The +ob Dal"e Contrib"tion 5tatements 7 of the "nion members )ill sho) that these s"perisory employees are "nder the directs"perision of their respectie department s"perintendents and that enerally they assist the latter in plannin, oraniin, staffin, directin,

controllin comm"nicatin and in main decisions in attainin the company:s set oals and obecties. These s"perisory employees arelie)ise responsible for the effectie and efficient operation of their respectie departments. More specifically, their d"ties and f"nctionsincl"de, amon others, the follo)in operations )hereby the employee%

12. assists the department s"perintendent in the follo)in%. plannin of systems and proced"res relatie to department actiities0h. oraniin and sched"lin of )or actiities of the department, )hich incl"des employee shiftin sched"led and mannin

complement0i. decision main by proidin releant information data and other inp"ts0

. attainin the company:s set oals and obecties by iin his f"ll s"pport0. selectin the appropriate man to handle the ob in the department0 andl. preparin ann"al departmental b"det01. obseres, follo)s and implements company policies at all times and recommends disciplinary action on errin s"bordinates014. trains and "ides s"bordinates on ho) to ass"me responsibilities and become more prod"ctie01/. cond"cts semi(ann"al performance eal"ation of his s"bordinates and recommends necessary action for their

deelopment=adancement01*. represents the s"perintendent or the department )hen appointed and a"thoried by the former017. coordinates and comm"nicates )ith other inter and intra department s"perisors )hen necessary01-. recommends disciplinary actions=promotions01. recommends meas"res to improe )or methods, eH"ipment performance, H"ality of serice and )orin conditions02<. sees to it that safety r"les and re"lations and proced"re and are implemented and follo)ed by all 3A5FRE9CO employees,

recommends reisions or modifications to said r"les )hen deemed necessary, and initiates and prepares reports for any obseredabnormality )ithin the refinery0

21. s"perises the actiities of all personnel "nder him and oes to it that instr"ctions to s"bordinates are properly implemented0 and22. performs other related tass as may be assined by his immediate s"perior.

The members of respondent "nion dischare d"ties and responsibilities )hich inel"ctably H"alify them as officers or members of themanaerial staff, as defined in 5ection 2, R"le $ !oo $$$ of the aforestated R"les to $mplement the abor Code, i.% &1' their primary d"ty

consists of the performance of )or directly related to manaement policies of their employer0 &2' they c"stomarily and re"larly e@ercisediscretion and independent "dment0 &' they re"larly and directly assist the manaerial employee )hose primary d"ty consist of themanaement of a department of the establishment in )hich they are employed &4' they e@ec"te, "nder eneral s"perision, )or alonspecialied or technical lines reH"irin special trainin, e@perience, or no)lede0 &/' they e@ec"te, "nder eneral s"perision, specialassinments and tass0 and &*' they do not deote more than 2<N of their ho"rs )ored in a )or()ee to actiities )hich are not directlyand clearly related to the performance of their )or hereinbefore described.

The "nion members sho"ld be considered as officers and members of the manaerial staff and are, therefore, e@empt from the coerae ofArticle -2. ;erforce, they are not entitled to oertime, rest day and holiday.

UNION O" "ILIRO EMLOYEES ?U"E v. BENIGNO IAR, !R., NATIONAL LABOR RELATIONS COMMISSION #*( NESTLJHILIINES, INC. ?/o0&'2 "ILIRO, INC.

G.R. No. 594 !#*u#2 4, 1994

"#$ts%

9ilipro, $nc. &no) 3estle ;hilippines, $nc.' filed )ith the 3ational abor Relations Commission &3RC' a petition for declaratory relief seeina r"lin on its rihts and obliations respectin claims of its monthly paid employees for holiday pay in the liht of the Co"rt:s decision in#hartered 8an$ Employees /ssociation v . ple.

Arbitrator Diar rendered a decision directin 9ilipro to pay its monthly paid employees holiday pay p"rs"ant to Article 4 of the Code, s"bectonly to the e@cl"sions and limitations specified in Article -2 and s"ch other leal restrictions as are proided for in the Code.

7




9ilipro filed a motion for clarification seein &1' the limitation of the a)ard to three years, &2' the e@cl"sion of salesmen, salesrepresentaties, tr"c driers, merchandisers and medical representaties &hereinafter referred to as sales personnel' from the a)ard of theholiday pay, and &' ded"ction from the holiday pay a)ard of oerpayment for oertime, niht differential, acation and sic leae benefitsd"e to the "se of 2/1 diisor.

;etitioner F9E ans)ered that the a)ard sho"ld be made effectie from the date of effectiity of the abor Code, that their sales personnelare not field personnel and are therefore entitled to holiday pay, and that the "se of 2/1 as diisor is an established employee benefit )hich

cannot be diminished.

The respondent arbitrator iss"ed an order declarin that the effectiity of the holiday pay a)ard shall retroact to 3oember 1, 174, the dateof effectiity of the abor Code. 8e ad"ded, ho)eer, that the company:s sales personnel are field personnel and, as s"ch, are not entitledto holiday pay. 8e lie)ise r"led that )ith the rant of 1< days: holiday pay, the diisor sho"ld be chaned from 2/1 to 2*1 and ordered thereimb"rsement of oerpayment for oertime, niht differential, acation and sic leae pay d"e to the "se of 2/1 days as diisor.

Issu& K 1% hether or not 3estle:s sales personnel are entitled to holiday pay0 and

H&'( K 1%

The petitioner maintains that the period bet)een -%<< a.m. to 4%<< or 4%< p.m. comprises the sales personnel:s )orin ho"rs )hich can bedetermined )ith reasonable certainty.

The Co"rt does not aree. The la) reH"ires that the act"al ho"rs of )or in the field be reasonably ascertained. The company has no )ay ofdeterminin )hether or not these sales personnel, een if they report to the office before -%<< a.m. prior to field )or and come bac at 4%<p.m, really spend the ho"rs in bet)een in act"al field )or.

The petitioner asserts that the company:s sales personnel are strictly s"perised as sho)n by the 5O? &5"perisor of the ?ay' sched"le andthe company circ"lar dated March 1/, 1-4.

The 5O? sched"le aderted to by the petitioner does not in the least sinify that these sales personnel:s time and performance ares"perised. The p"rpose of this sched"le is merely to ens"re that the sales personnel are o"t of the office not later than -%<< a.m. and arebac in the office not earlier than 4%<< p.m.

ie)ise, the Co"rt fails to see ho) the company can monitor the n"mber of act"al ho"rs spent in field )or by an employee thro"h theimposition of sanctions on absenteeism contained in the company circ"lar of March 1/, 1-4.

The criteria for rantin incentie bon"s are% &1' attainin or e@ceedin sales ol"me based on sales taret0 &2' ood collection performance0&' proper compliance )ith ood maret hyiene0 &4' ood merchandisin )or0 &/' minimal maret ret"rns0 and &*' proper tr"cmaintenance.

The aboe criteria indicate that these sales personnel are ien incentie bon"ses precisely beca"se of the diffic"lty in meas"rin theiract"al ho"rs of field )or. These employees are eal"ated by the res"lt of their )or and not by the act"al ho"rs of field )or )hich arehardly s"sceptible to determination.

Issu& K 4% )hether or not, concomitant )ith the a)ard of holiday pay, the diisor sho"ld be chaned from 2/1 to 2*1 days and )hether or not thepreio"s "se of 2/1 as diisor res"lted in oerpayment for oertime, niht differential, acation and sic leae pay

H&'( K 4%

9ollo)in the criterion laid do)n in the #hartered 8an$ case, the "se of 2/1 days: diisor by respondent 9ilipro indicates that holiday pay isnot yet incl"ded in the employee:s salary, other)ise the diisor sho"ld hae been 2*1.The respondent arbitrator:s order to chane the diisor from 2/1 to 2*1 days )o"ld res"lt in a lo)er daily rate )hich is iolatie of theprohibition on non(dimin"tion of benefits fo"nd in Article 1<< of the abor Code. To maintain the same daily rate if the diisor is ad"sted to2*1 days, then the diidend, )hich represents the employee:s ann"al salary, sho"ld correspondinly be increased to incorporate the holidaypay. There is th"s no merit in respondent 3estle:s claim of oerpayment of oertime and niht differential pay and sic and acation leaebenefits, the comp"tation of )hich are all based on the daily rate, since the daily rate is still the same before and after the rant of holidaypay.

74




SAN MIGUEL BRE@ERY, INC., v. DEMOCRATIC LABOR ORGANI;ATION, ET AL.G.R. No. L71833 !u'2 31, 1963

"#$ts%After the mornin roll call, the employees leae the plant of the company to o on their respectie sales ro"tes either at 7%<< a.m. for softdrins tr"cs, or -%<< a.m. for beer tr"cs. They do not hae a daily time record. The company neer reH"ire them to start their )or as

o"tside sales personnel earlier than the aboe sched"le.

The sales ro"tes are so planned that they can be completed )ithin - ho"rs at most, or that the employees co"ld mae their sales on theirro"tes )ithin s"ch n"mber of ho"rs ariable in the sense that sometimes they can be completed in less than - ho"rs, sometimes * to 7ho"rs, or more. The moment these o"tside or field employees leae the plant and )hile in their sales ro"tes they are on their o)n, and oftentimes )hen the sales are completed, or )hen main short trip delieries only, they o bac to the plant, load aain, and mae anotherro"nd of sales. These employees receie monthly salaries and sales commissions in ariable amo"nts. The amo"nt of compensation theyreceie is "ncertain dependin "pon their indiid"al efforts or ind"stry. !esides the monthly salary, they are paid sales commission thatrane from ;<, ;4<, sometimes ;*<, ;7<, to sometimes ;<, ;1<< and ;1< a month, at the rate of ;<.<1 to ;<.<1(W per case.

$t is contended that since the employees concerned are paid a commission on the sales they mae o"tside of the reH"ired - ho"rs besidesthe fi@ed salary that is paid to them, the Co"rt of $nd"strial Relations erred in orderin that they be paid an oertime compensation asreH"ired by the Eiht(8o"r abor a) for the reason that the commission they are paid already taes the place of s"ch oertimecompensation. $ndeed, it is claimed, oertime compensation is an additional pay for )or or serices rendered in e@cess of - ho"rs a day byan employee, and if the employee is already ien e@tra compensation for labor performed in e@cess of - ho"rs a day, he is not coered bythe la). 8is sit"ation, the company contends, can be liened to an employee )ho is paid on piece()or, paiao>, or commission basis,

)hich is e@pressly e@cl"ded from the operation of the Eiht(8o"r abor a).

Issu&% )hether or not members of the respondent "nion are entitled to oertime and niht(shift differential pay

H&'(%3o. The Eiht(8o"r abor a) only has application )here an employee or laborer is paid on a monthly or daily basis, or is paid a monthly ordaily compensation, in )hich case, if he is made to )or beyond the reH"isite period of - ho"rs, he sho"ld be paid the additionalcompensation prescribed by la). This la) has no application )hen the employee or laborer is paid on a piece()or, paiao>, or commissionbasis, reardless of the time employed. The philosophy behind this e@emption is that his earnins in the form of commission based on theross receipts of the day. 8is participation depends "pon his ind"stry so that the more ho"rs he employs in the )or the reater are his

ross ret"rns and the hiher his commission.

The reasons for e@cl"din an o"tside salesman are fairly apparent. 5"ch salesman, to a reater e@tent, )ors indiid"ally. There are norestrictions respectin the time he shall )or and he can earn as m"ch or as little, )ithin the rane of his ability, as his ambition dictates. $nlie" of oertime he ordinarily receies commissions as e@tra compensation. 8e )ors a)ay from his employer:s place of b"siness, is nots"bect to the personal s"perision of his employer, and his employer has no )ay of no)in the n"mber of ho"rs he )ors per day.

MERCIDAR "ISHING CORORATION &-&s&*t&( 2 )ts &s)(&*t DOMINGO B. NAAL v. NATIONAL LABOR RELATIONSCOMMISSION #*( "ERMIN AGAO, !R.G.R. No. 1145+ O$to& 8, 1998

"#$ts%

This case oriinated from a complaint filed by priate respondent 9ermin Aao, +r. aainst petitioner for illeal dismissal, iolation of ;.?. 3o.-/1, and non(payment of fie days serice incentie leae for 1<. ;riate respondent had been employed as a bodeero> or ship:sH"artermaster on 9ebr"ary 12, 1--. 8e complained that he had been constr"ctiely dismissed by petitioner )hen the latter ref"sed himassinments aboard its boats after he had reported to )or on May 2-, 1<.

;riate respondent alleed that he had been sic and th"s allo)ed to o on leae )itho"t pay for one month from April 2-, 1< b"t that )hen he reported to )or at the end of s"ch period )ith a health clearance, he )as told to come bac another time as he co"ld not bereinstated immediately. Thereafter, petitioner ref"sed to ie him )or. 9or this reason, priate respondent ased for a certificate ofemployment from petitioner on 5eptember *, 1<. 8o)eer, )hen he came bac for the certificate on 5eptember 1<, petitioner ref"sed toiss"e the certificate "nless he s"bmitted his resination. 5ince priate respondent ref"sed to s"bmit s"ch letter "nless he )as ienseparation pay, petitioner preented him from enterin the premises.

7/




The abor Arbiter orderin petitioner to reinstate priate respondent )ith bac)aes, pay him his 1th month pay and incentie leae pay for1<. The 3RC, on appeal, "pheld the decision of the A. The 3RC dismissed petitioner:s claim that it cannot be held liable for sericeincentie leae pay by fishermen in its employ as the latter s"pposedly are field personnel> and th"s not entitled to s"ch pay "nder theabor Code.

Issu&%

)hether fishin cre) members can be classified as field personnel

8eld%3o. ?"rin the entire co"rse of their fishin oyae, fishermen employed by petitioner hae no choice b"t to remain on board its essel.Altho"h they perform non(aric"lt"ral )or a)ay from petitioner:s b"siness offices, the fact remains that thro"ho"t the d"ration of their

)or they are "nder the effectie control and s"perision of petitioner thro"h the essel:s patron or master.

AUTO BUS TRANSORT SYSTEMS, INC. v. ANTONIO BAUTISTAG.R. No. 16365 M#2 16, 4

"#$ts%5ince 24 May 1/, respondent Antonio !a"tista has been employed by petitioner A"to !"s Transport 5ystems, $nc. &A"tob"s', as drier(

cond"ctor )ith trael ro"tes Manila(T""earao ia !a"io, !a"io( T""earao ia Manila and Manila(Tab" ia !a"io. Respondent )aspaid on commission basis, seen percent &7N' of the total ross income per trael, on a t)ice a month basis.

Respondent )as paid on commission basis, seen percent &7N' of the total ross income per trael, on a t)ice a month basis.

On < +an"ary 2<<<, )hile respondent )as driin A"tob"s 3o. 114 alon 5ta. 9e, 3"ea Dicaya, the b"s he )as driin accidentallyb"mped the rear portion of A"tob"s 3o. 124, as the latter ehicle s"ddenly stopped at a sharp c"re )itho"t iin any )arnin.

Respondent aerred that the accident happened beca"se he )as compelled by the manaement to o bac to Ro@as, $sabela, altho"h hehad not slept for almost 24 ho"rs, as he had "st arried in Manila from Ro@as, $sabela. Respondent f"rther alleed that he )as not allo)edto )or "ntil he f"lly paid the amo"nt of ;7/,//1./<, representin thirty percent &<N' of the cost of repair of the damaed b"ses and thatdespite respondent:s pleas for reconsideration, the same )as inored by manaement. After a month, manaement sent him a letter oftermination.

Th"s, respondent instit"ted a Complaint for $lleal ?ismissal )ith Money Claims for nonpayment of 1th month pay and serice incentieleae pay aainst A"tob"s.

Issu& K 1% )hether or not respondent is entitled to serice incentie leae "nder Art. /

H&'(% K1%Bes. Respondent is not a field personnel b"t a re"lar employee )ho performs tass "s"ally necessary and desirable to the "s"al trade ofpetitioner:s b"siness. Accordinly, respondent is entitled to the rant of serice incentie leae.

$t is of "dicial notice that alon the ro"tes that are plied by these b"s companies, there are its inspectors assined at strateic places )hoboard the b"s and inspect the passeners, the p"nched ticets, and the cond"ctor:s reports. There is also the mandatory once(a()ee carbarn or shop day, )here the b"s is re"larly checed as to its mechanical, electrical, and hydra"lic aspects, )hether or not there are

problems thereon as reported by the drier and=or cond"ctor. They too, m"st be at specific place as IsicJ specified time, as they enerallyobsere prompt depart"re and arrial from their point of oriin to their point of destination. $n each and eery depot, there is al)ays the?ispatcher )hose f"nction is precisely to see to it that the b"s and its cre) leae the premises at specific times and arrie at the estimatedproper time. These, are present in the case at bar. The drier, the complainant herein, )as therefore "nder constant s"perision )hile in theperformance of this )or. 8e cannot be considered a field personnel.

Issu& K 4% )hether or not the (year prescriptie period proided "nder Article 21 of the abor Code, as amended, is applicable to respondent:s claimof serice incentie leae pay

H&'( K 4%

7*




Article 21 of the abor Code states that all money claims arisin from employer(employee relationship shall be filed )ithin three &' yearsfrom the time the ca"se of action accr"ed0 other)ise, they shall be foreer barred.

$n the application of this section of the abor Code, the piotal H"estion to be ans)ered is )hen does the ca"se of action for money claimsaccr"e in order to determine the reconin date of the three(year prescriptie period.

To properly constr"e Article 21 of the abor Code, it is essential to ascertain the time )hen the third element of a ca"se of action transpired.

5tated differently, in the comp"tation of the three(year prescriptie period, a determination m"st be made as to the period )hen the actconstit"tin a iolation of the )orers: riht to the benefits bein claimed )as committed. 9or if the ca"se of action accr"ed more than years before the filin of the money claim, said ca"se of action has already prescribed in accordance )ith Article 21.

ConseH"ently, in cases of nonpayment of allo)ances and other monetary benefits, if it is established that the benefits bein claimed haebeen )ithheld from the employee for a period loner than years, the amo"nt pertainin to the period beyond the three(year prescriptieperiod is therefore barred by prescription. The amo"nt that can only be demanded by the arieed employee shall be limited to the amo"ntof the benefits )ithheld )ithin years before the filin of the complaint.

The ca"se of action of an entitled employee to claim his serice incentie leae pay accr"es from the moment the employer ref"ses torem"nerate its monetary eH"ialent if the employee did not mae "se of said leae credits b"t instead chose to aail of its comm"tation.Accordinly, if the employee )ishes to acc"m"late his leae credits and opts for its comm"tation "pon his resination or separation fromemployment, his ca"se of action to claim the )hole amo"nt of his acc"m"lated serice incentie leae shall arise )hen the employer fails topay s"ch amo"nt at the time of his resination or separation from employment.

Applyin Article 21 of the abor Code in liht of this pec"liarity of the serice incentie leae, )e can concl"de that the three &'(yearprescriptie period commences, not at the end of the year )hen the employee becomes entitled to the comm"tation of his serice incentieleae, b"t from the time )hen the employer ref"ses to pay its monetary eH"ialent after demand of comm"tation or "pon termination of theemployee:s serices, as the case may be.

$n the case at bar, respondent had not made "se of his serice incentie leae nor demanded for its comm"tation "ntil his employment )asterminated by petitioner. 3either did petitioner compensate his acc"m"lated serice incentie leae pay at the time of his dismissal. $t )asonly "pon his filin of a complaint for illeal dismissal, one month from the time of his dismissal, that respondent demanded from his formeremployer comm"tation of his acc"m"lated leae credits. 8is ca"se of action to claim the payment of his acc"m"lated serice incentie leaeth"s accr"ed from the time )hen his employer dismissed him and failed to pay his acc"m"lated leae credits.

Therefore, the prescriptie period )ith respect to his claim for serice incentie leae pay only commenced from the time the employer failed

to compensate his acc"m"lated serice incentie leae pay at the time of his dismissal. 5ince respondent had filed his money claim afteronly one month from the time of his dismissal, necessarily, his money claim )as filed )ithin the prescriptie period proided for by Article 21of the abor Code.

ALE!ANDRO MARAGUINOT, !R. #*( AULINO ENERO v. NATIONAL LABOR RELATIONS COMMISSION ?SECOND DIISION$o0-os&( o/ &s)()*g Co00)ss)o*& RAUL T. AUINO, Co00)ss)o*& ROGELIO I. RAYALA #*( Co00)ss)o*& ICTORIANO R.CALAYCAY ?-onente, IC DEL ROSARIO #*( IA "IMSG.R. No. 14969 !#*u#2 44, 1998

"#$ts%Aleandro Mara"inot, +r. )as employed by priate respondents on 1- +"ly 1- as part of the filmin cre) )ith a salary of ;7/.<< per

)ee. Abo"t fo"r months later, he )as desinated Assistant Electrician )ith a )eely salary of ;4<<.<<, )hich )as increased to ;4/<.<< in

May 1<. $n +"ne 11, he )as promoted to the ran of Electrician )ith a )eely salary of ;47/.<<, )hich )as increased to ;/.<< in5eptember 11.

;a"lino Enero, on his part, claims that priate respondents employed him in +"ne 1< as a member of the shootin cre) )ith a )eelysalary of ;7/.<<, )hich )as increased to ;42/.<< in May 11, then to ;47/.<< on 21 ?ecember 11.

;etitioners: tass consisted of loadin, "nloadin and arranin moie eH"ipment in the shootin area as instr"cted by the cameraman,ret"rnin the eH"ipment to Dia 9ilms: )areho"se, assistin in the fi@in> of the lihtin system, and performin other tass that thecameraman and=or director may assin.

77




5ometime in May 12, petitioners so"ht the assistance of their s"perisors, Mrs. Aleandria Cesario, to facilitate their reH"est that priaterespondents ad"st their salary in accordance )ith the minim"m )ae la). Mrs. Cesario informed petitioners that Mr. Dic del Rosario )o"ldaree to increase their salary only if they sined a blan employment contract. As petitioners ref"sed to sin, priate respondents forcedEnero to o on leae in +"ne 12, then ref"sed to tae him bac )hen he reported for )or on 2< +"ly 12. Mean)hile, Mara"inot )asdropped from the company payroll from - to 21 +"ne 12, b"t )as ret"rned on 22 +"ne 12. 8e )as aain ased to sin a blanemployment contract, and )hen he still ref"sed, priate respondents terminated his serices on 2< +"ly 12. ;etitioners th"s s"ed for illealdismissal before the abor Arbiter.

;riate respondents assert that they contract persons called prod"cers> K also referred to as associate prod"cers> K to prod"ce> or maemoies for priate respondents0 and contend that petitioners are proect employees of the association prod"cers )ho, in t"rn, act asindependent contractors. As s"ch, there is no employer(employee relationship bet)een petitioners and priate respondents.

;riate respondents f"rther contend that it )as the associate prod"cer of the film 'ahirap 'aging +ogi ,> )ho hired petitioner Mara"inot.The moie shot from 2 +"ly "p to 22 +"ly 12, and it )as only then that Mara"inot )as released "pon payment of his last salary, as hisserices )ere no loner needed. Anent petitioner Enero, he )as hired for the moie entitled Sigaw ng +!so,> later re(tired *arito and +!so.> 8e )ent on acation on - +"ne 12, and by the time he reported for )or on 2< +"ly 12, shootin for the moie had already beencompleted.

Issu& K 1% )hether an employer(employee relationship e@isted bet)een petitioners and priate respondents or any one of priate respondents

H&'( K1%The contractin o"t of labor is allo)ed only in case of ob contractin. 5ection -, R"le D$$$, !oo $$$ of the Omnib"s R"les $mplementin theabor Code describes permissible ob contractin in this )ise%

5ec. -. +ob contractin. K There is ob contractin permissible "nder the Code if the follo)in conditions are met%

&1' The contractor carries on an independent b"siness and "ndertaes the contract )or on his o)n acco"nt "nder his o)n responsibilityaccordin to his o)n manner and method, free from the control and direction of his employer or principal in all matters connected )ith theperformance of the )or e@cept as to the res"lts thereof0 and

&2' The contractor has s"bstantial capital or inestment in the form of tools, eH"ipment, machineries, )or premises, and other materials )hich are necessary in the cond"ct of his b"siness.>

Ass"min that the associate prod"cers are ob contractors, they m"st then be enaed in the b"siness of main motion pict"res. As s"ch,and to be a ob contractor "nder the precedin description, associate prod"cers m"st hae tools, eH"ipment, machinery, )or premises, andother materials necessary to mae motion pict"res. 8o)eer, the associate prod"cers here hae none of these. ;riate respondents:eidence reeals that the moie(main eH"ipment are s"pplied to the prod"cers and o)ned by D$DA. These incl"de enerators, cables and

)ooden platforms, cameras and shootin eH"ipment0> in fact, D$DA lie)ise o)ns the tr"cs "sed to transport the eH"ipment. $t is th"s clearthat the associate prod"cer merely leases the eH"ipment from D$DA.

;riate respondent f"rther narrated that D$DA:s enerators broe do)n d"rin petitioners: last moie proect, )hich forced the associateprod"cer concerned to rent enerators, eH"ipment and cre) from another company. This only sho)s that the associate prod"cer did nothae s"bstantial capital nor inestment in the form of tools, eH"ipment and other materials necessary for main a moie. ;riaterespondents in effect admit that their prod"cers, especially petitioners: last prod"cer, are not enaed in permissible ob contractin.

$f priate respondents insist that the associate prod"cers are labor contractors, then these prod"cers can only be labor(only> contractors,

defined by the abor Code as follo)s%

Art. 1<*. Contractor or s"bcontractor. K

There is labor(only> contractin )here the person s"pplyin )orers to an employer does not hae s"bstantial capital or inestment in theform of tools, eH"ipment, machineries, )or premises, amon others, and the )orers recr"ited and placed by s"ch persons are performinactiities )hich are directly related to the principal b"siness of s"ch employer. $n s"ch cases, the person or intermediary shall be consideredmerely as an aent of the employer )ho shall be responsible to the )orers in the same manner and e@tent as if the latter )ere directlyemployed by him.>

A more detailed description is proided by 5ection , R"le D$$$, !oo $$$ of the Omnib"s R"les $mplementin the abor Code%

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)itho"t e@ceedin the b"det. At bottom, the director is ain to a s"perisor )ho merely oersees the actiities of ran(and(file employees )ith control "ltimately restin on the employer.

$t may not be alidly ar"ed then that petitioners are act"ally s"bect to the moie director:s control, and not D$DA:s direction. The directormerely instr"cts petitioners on ho) to better comply )ith D$DA:s reH"irements to ens"re that a H"ality film is completed )ithin sched"le and

)itho"t e@ceedin the b"det. At bottom, the director is ain to a s"perisor )ho merely oersees the actiities of ran(and(file employees )ith control "ltimately restin on the employer.

Moreoer, appointment slips iss"ed to all cre) members state% ?"rin the term of this appointment yo" shall comply )ith the d"ties andresponsibilities of yo"r position as )ell as obsere the r"les and re"lations prom"lated by yo"r s"periors and by Top Manaement.:

Aside from control, the element of selection and enaement is lie)ise present in the instant case and e@ercised by D$DA.

All the circ"mstances indicate an employment relationship bet)een petitioners and D$DA alone, th"s the ineitable concl"sion is thatpetitioners are employees only of D$DA.

Issu& K4% )hether petitioners )ere "n"stly dismissed

H&'( K4%;riate respondents e@pressly admitted that petitioners )ere part of a )or pool0 and, )hile petitioners )ere initially hired possibly as proectemployees, they had attained the stat"s of re"lar employees in ie) if D$DA:s cond"ct.

A proect employee or a member of a )or pool may acH"ire the stat"s of a re"lar employee )hen the follo)in conc"r%

1' There is a contin"o"s rehirin of proect employees een after cessation of a proect0 and2' The tass performed by the alleed proect employee> are ital, necessary and indispensable to the "s"al b"siness or trade of the

employer.

8o)eer, the lenth of time d"rin )hich the employee )as contin"o"sly re(hired is not controllin, b"t merely seres as a bade of re"laremployment.

$n the instant case, the eidence on record sho)s that petitioner Enero )as employed for a total of 2 years and enaed in at least 1-proects, )hile petitioner Mara"inot )as employed for some years and )ored on at least 2 proects. Moreoer, as petitioners: tass

inoled, amon other chores, the loadin, "nloadin and arranin of moie eH"ipment in the shootin area as instr"cted by thecameramen, ret"rnin the eH"ipment to the Dia 9ilms: )areho"se, and assistin in the fi@in> of the lihtin system, it may not be ainsaidthat these tass )ere vital, necessary and indispensable to the !s!al b!siness or trade of the employer . As reards the "nderscored phrase,it has been held that this is ascertained by considerin the nat"re of the )or performed and its relation to the scheme of the partic"larb"siness or trade in its entirety.

A )or pool may e@ist altho"h the )orers in the pool do not receie salaries and are free to see other employment d"rin temporarybreas in the b"siness, proided that the )orer shall be aailable )hen called to report for a proect. Altho"h primarily applicable to re"larseasonal )orers, this set("p can 1lie)ise be applied to proect )orers insofar as the effect of temporary cessation of )or is concerned.This is beneficial to both the employer and employee for it preents the "n"st sit"ation of coddlin labor at the e@pense of capital> and atthe same time enables the )orers to attain the stat"s of re"lar employees.

once a proect or )or pool employee has been% &1' contin"o"sly, as opposed to intermittently, re(hired by the same employer for the same

tass or nat"re of tass0 and &2' these tass are ital, necessary and indispensable to the "s"al b"siness or trade of the employer, then theemployee m"st be deemed a re"lar employee, p"rs"ant to Article 2-< of the abor Code and "rispr"dence.

As petitioners had already ained the stat"s of re"lar employees, their dismissal )as "n)arranted, for the ca"se inoed by priaterespondents for petitioners: dismissal, vi.% completion of proect, )as not, as to them, a alid ca"se for dismissal "nder Article 2-2 of theabor Code. As s"ch, petitioners are no) entitled to bac )aes and reinstatement, )itho"t loss of seniority rihts and other benefits thatmay hae accr"ed. 3eertheless, follo)in the principles of s"spension of )or> and no pay> bet)een the end of one proect and the startof a ne) one, in comp"tin petitioners: bac )aes, the amo"nts correspondin to )hat co"ld hae been earned d"rin the periods from thedate petitioners )ere dismissed "ntil their reinstatement )hen petitioners: respectie 5hootin Fnits )ere not "ndertain any moieproects, sho"ld be ded"cted.

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Moreoer, it )o"ld appear that petitioner not only proided the )orplace, b"t s"pplied as )ell the materials "sed for the paintins, beca"sehe admitted that he paid arama only for the latter:s serices.

Second. That petitioner had the riht to hire and fire )as admitted by him in his position paper s"bmitted to the 3RC, the pertinent portionsof )hich stated%

Complainant did not no) ho) to "se the aailable comfort rooms or toilets in and abo"t his )or premises. 8e )as "rinatin riht at theplace )here he )as )orin )hen it )as so easy for him, as eerybody else did and had he only )anted to, to o to the comfort rooms. !"tno, the complainant had to mae a irt"al "rinal o"t of his )or placeX The place then st"n to hih heaens, nat"rally, to the consternation ofrespondents and eeryone )ho co"ld smell the malodor.

#ien s"ch circ"mstances, the respondents had eery riht, nay all the compellin reason, to fire him from his paintin ob "pon discoeryand his admission of s"ch acts. 3onetheless, tho"h thoro"hly scolded, he )as not fired. $t )as he )ho stopped to paint for respondents.>

!y statin that he had the riht to fire arama, petitioner in effect acno)leded arama to be his employee. 9or the riht to hire and fire isanother important element of the employer(employee relationship.

)hird. ;ayment of )aes is one of the fo"r factors to be considered in determinin the e@istence of employer(employee relation. 6aes aredefined as rem"neration or earnins, ho)eer desinated, capable of bein e@pressed in terms of money, )hether fi@ed or ascertained on atime, tas, piece, or commission basis, or other method of calc"latin the same, )hich is payable by an employer to an employee "nder a

)ritten or "n)ritten contract of employment for )or done or to be done, or for serices rendered or to be rendered.> That arama )oredfor Tan on a fi@ed piece()or basis is of no moment. ;ayment by res"lt is a method of compensation and does not define the essence of therelation. $t is a method of comp"tin compensation, not a basis for determinin the e@istence or absence of employer(employee relationship.One may be paid on the basis of res"lts or time e@pended on the )or, and may or may not acH"ire an employment stat"s, dependin on

)hether the elements of an employer(employee relationship are present or not.

The R"les $mplementin the abor Code reH"ire eery employer to pay his employees by means of payroll. The payroll sho"ld sho) amonother thins, the employee:s rate of pay, ded"ctions made, and the amo"nt act"ally paid to the employee. $n the case at bar, petitioner didnot present the payroll to s"pport his claim that arama )as not his employee, raisin spec"lations )hether his fail"re to do so proes thatits presentation )o"ld be aderse to his case.

The primary standard for determinin re"lar employment is the reasonable connection bet)een the partic"lar actiity performed by theemployee in relation to the "s"al trade or b"siness of the employer. $n this case, there is s"ch a connection bet)een the ob of arama

paintin billboards and m"rals and the b"siness of petitioner.

The fact that arama )as not reported as an employee to the 555 is not concl"sie on the H"estion of )hether he )as an employee ofpetitioner.

3either does the fact that arama painted for other persons affect or alter his employment relationship )ith petitioner. On the other hand,5am"el Dillalba, for )hom arama had rendered serice, admitted in a s)orn statement that he )as told by arama that the latter )oredfor petitioner.

arama had been employed by petitioner since 1--. Fnder the la), therefore, he is deemed a re"lar employee and is th"s entitled tosec"rity of ten"re, as proided in Art. 27 of abor Code%

ART. 27. Sec!rity of )en!re. K $n cases of re"lar employment, the employer shall not terminate the serices of an employee e@cept for a

"st ca"se or )hen a"thoried by this Title. An employee )ho is "n"stly dismissed from )or shall be entitled to reinstatement )itho"t lossof seniority rihts and other priilees and to his f"ll bac)aes, incl"sie of allo)ances, and to his other benefits or their monetaryeH"ialent comp"ted from the time his compensation )as )ithheld from him "p to the time of his act"al reinstatement.>

$f the employee has been performin the ob for at least one year, een if not contin"o"sly b"t intermittently, the repeated and contin"inneed for its performance is s"fficient eidence of the necessity, if not indispensability, of that actiity to the b"siness of his employer. 8ence,the employment is also considered re"lar, altho"h )ith respect only to s"ch actiity, and )hile s"ch actiity e@ists.

$t is claimed that arama abandoned his )or. There is no eidence to sho) this. Abandonment reH"ires t)o elements% &1' the fail"re toreport for )or or absence )itho"t alid or "stifiable reason, and &2' a clear intention to seer the employer(employee relationship, )ith thesecond element as the more determinatie factor and bein manifested by some oert acts. Mere absence is not s"fficient. 6hat is more,

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the b"rden is on the employer to sho) a deliberate and "n"stified ref"sal on the part of the employee to res"me his employment )itho"t anyintention of ret"rnin.

Issu& K 4% )hether priate respondent arama )as illeally dismissed

H&'( K 4%

Bes. $n this case, by his ref"sal to ie arama )or to do and orderin arama to et o"t of his siht as the latter tried to e@plain his side,petitioner made it plain that arama )as dismissed. Frinatin in a )or place other than the one desinated for the p"rpose by theemployer constit"tes iolation of reasonable re"lations intended to promote a healthy enironment "nder Art. 2-2&1' of the abor Code forp"rposes of terminatin employment, b"t the same m"st be sho)n by eidence. 8ere there is no eidence that arama did "rinate in aplace other than a rest room in the premises of his )or.

$nstead of orderin his reinstatement as proided in Art. 27 of the abor Code, the abor Arbiter fo"nd that the relationship bet)een theemployer and the employee has been so strained that the latter:s reinstatement )o"ld no loner sere any p"rpose. The parties do notdisp"te this findin. 8ence, the rant of separation pay in lie" of reinstatement is appropriate. This is of co"rse in addition to the payment ofbac)aes sho"ld be comp"ted from the time of arama:s dismissal "p to the time of the finality of this decision, )itho"t any ded"ction orH"alification.

The !"rea" of 6orin Conditions classifies )orers paid by res"lts into t)o ro"ps, namely0 &1' those )hose time and performance iss"perised by the employer, and &2' those )hose time and performance is "ns"perised by the employer. The first inoles an element ofcontrol and s"perision oer the manner the )or is to be performed, )hile the second does not. $f a piece )orer is s"perised, there is anemployer(employee relationship, as in this case. 8o)eer, s"ch an employee is not entitled to serice incentie leae pay since he is paid afi@ed amo"nt for )or done, reardless of the time he spent in accomplishin s"ch )or.

EDRO CHAE; v. NATIONAL LABOR RELATIONS COMMISSION, SUREME AC:AGING, INC. #*( ALIN LEE, '#*t M#*#g&G.R. No. 1+63 !#*u#2 15, 4

"#$ts%The respondent company, 5"preme ;acain, $nc., is in the b"siness of man"fact"rin cartons and other pacain materials for e@portand distrib"tion. $t enaed the serices of the petitioner, ;edro Chae, as tr"c drier on October 2/, 1-4. As s"ch, the petitioner )astased to delier the respondent company:s prod"cts from its factory in Marieles, !ataan, to its ario"s c"stomers, mostly in Metro Manila.The respondent company f"rnished the petitioner )ith a tr"c. Most of the petitioner:s deliery trips )ere made at nihttime, commencin at

*%<< p.m. from Marieles, and ret"rnin thereto in the afternoon t)o or three days after. The delieries )ere made in accordance )ith thero"tin slips iss"ed by respondent company indicatin the order, time and "rency of deliery. $nitially, the petitioner )as paid the s"m of;/<.<< per trip. This )as later ad"sted to ;4-<.<< per trip and, at the time of his alleed dismissal, the petitioner )as receiin ;<<.<<per trip.

5ometime in 12, the petitioner e@pressed to respondent Alin ee, respondent company:s plant manaer, his &the petitioner:s' desire toaail himself of the benefits that the re"lar employees )ere receiin s"ch as oertime pay, nihtshift differential pay, and 1th month pay,amon others. Altho"h he promised to e@tend these benefits to the petitioner, respondent ee failed to act"ally do so.

The petitioner filed a complaint for re"lariation. !efore the case co"ld be heard, respondent company terminated the serices of thepetitioner. ConseH"ently, the petitioner filed an amended complaint aainst the respondents for illeal dismissal, "nfair labor practice andnon(payment of oertime pay, nihtshift differential pay, 1th month pay, amon others.

The respondents, for their part, denied the e@istence of an employer(employee relationship bet)een the respondent company and thepetitioner. They aerred that the petitioner )as an independent contractor as eidenced by the contract of serice )hich he and therespondent company entered into.

Issu& K1% )hether there e@isted an employer(employee relationship bet)een the respondent company and the petitioner

H&'( K1%Bes. The elements to determine the e@istence of an employment relationship are% &1' the selection and enaement of the employee0 &2' thepayment of )aes0 &' the po)er of dismissal0 and &4' the employer:s po)er to control the employee:s cond"ct. The most important element

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is the employer:s control of the employee:s cond"ct, not only as to the res"lt of the )or to be done, b"t also as to the means and methodsto accomplish it. All the fo"r elements are present in this case.

9irst. Fndeniably, it )as the respondents )ho enaed the serices of the petitioner )itho"t the interention of a third party.

5econd. 6aes are defined as rem"neration or earnins, ho)eer desinated, capable of bein e@pressed in terms of money, )hetherfi@ed or ascertained on a time, tas, piece or commission basis, or other method of calc"latin the same, )hich is payable by an employer to

an employee "nder a )ritten or "n)ritten contract of employment for )or done or to be done, or for serice rendered or to be rendered.>That the petitioner )as paid on a per trip basis is not sinificant. This is merely a method of comp"tin compensation and not a basis fordeterminin the e@istence or absence of employer(employee relationship. One may be paid on the basis of res"lts or time e@pended on the

)or, and may or may not acH"ire an employment stat"s, dependin on )hether the elements of an employer(employee relationship arepresent or not.14 $n this case, it cannot be ainsaid that the petitioner receied compensation from the respondent company for the sericesthat he rendered to the latter.

Third. The respondents: po)er to dismiss the petitioner )as inherent in the fact that they enaed the serices of the petitioner as tr"cdrier. They e@ercised this po)er by terminatin the petitioner:s serices albeit in the "ise of seerance of contract"al relation> d"ealleedly to the latter:s breach of his contract"al obliation.

9o"rth. As earlier opined, of the fo"r elements of the employer(employee relationship, the control test> is the most important. Compared toan employee, an independent contractor is one )ho carries on a distinct and independent b"siness and "ndertaes to perform the ob, )or,or serice on its o)n acco"nt and "nder its o)n responsibility accordin to its o)n manner and method, free from the control and direction ofthe principal in all matters connected )ith the performance of the )or e@cept as to the res"lts thereof. 8ence, )hile an independentcontractor enoys independence and freedom from the control and s"perision of his principal, an employee is s"bect to the employer:spo)er to control the means and methods by )hich the employee:s )or is to be performed and accomplished.

Altho"h the respondents denied that they e@ercised control oer the manner and methods by )hich the petitioner accomplished his )or, acaref"l reie) of the records sho)s that the latter performed his )or as tr"c drier "nder the respondents: s"perision and control. Theirriht of control )as manifested by the follo)in attendant circ"mstances%

1. The tr"c drien by the petitioner beloned to respondent company0

2. There )as an e@press instr"ction from the respondents that the tr"c shall be "sed e@cl"siely to delier respondent company:s oods0

. Respondents directed the petitioner, after completion of each deliery, to par the tr"c in either of t)o specific places only, to )it% at its

office in Metro Manila at 22< Osmea 5treet, Maati City or at !E;U, Marieles, !ataan0

4. Respondents determined ho), )here and )hen the petitioner )o"ld perform his tas by iss"in to him ate passes and ro"tin slips.

a. The ro"tin slips indicated on the col"mn REMARP5, the chronoloical order and priority of deliery s"ch as 1st drop, 2nd drop,rd drop, etc. This meant that the petitioner had to delier the same accordin to the order of priority indicated therein.

b. The ro"tin slips, lie)ise, sho)ed )hether the oods )ere to be deliered "rently or not by the )ord RF58 printed thereon.c. The ro"tin slips also indicated the e@act time as to )hen the oods )ere to be deliered to the c"stomers as, for e@ample, the

)ords tomorro) mornin> )as )ritten on slip no. 277*.

These circ"mstances proe that the respondents e@ercised control oer the means and methods by )hich the petitioner accomplished his )or as tr"c drier of the respondent company.

Issu& K4% )hether the respondents alidly dismissed the petitioner

H&'( K4%Bes. As a r"le, the employer bears the b"rden to proe that the dismissal )as for a alid and "st ca"se. $n this case, the respondents failedto proe any s"ch ca"se for the petitioner:s dismissal. They insin"ated that the petitioner abandoned his ob. To constit"te abandonment,these t)o factors m"st conc"r% &1' the fail"re to report for )or or absence )itho"t alid or "stifiable reason0 and &2' a clear intention toseer employer(employee relationship. Obio"sly, the petitioner did not intend to seer his relationship )ith the respondent company for atthe time that he alleedly abandoned his ob, the petitioner "st filed a complaint for re"lariation, )hich )as forth)ith amended to one forilleal dismissal. A chare of abandonment is totally inconsistent )ith the immediate filin of a complaint for illeal dismissal, more so )hen itincl"des a prayer for reinstatement.

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3either can the respondents: claim that the petitioner )as "ilty of ross nelience in the proper maintenance of the tr"c constit"te a alidand "st ca"se for his dismissal. #ross nelience implies a )ant or absence of or fail"re to e@ercise sliht care or dilience, or the entireabsence of care. $t einces a tho"htless disreard of conseH"ences )itho"t e@ertin any effort to aoid them. The nelience, to )arrantremoal from serice, sho"ld not merely be gross b"t also habit!al . The sinle and isolated act of the petitioner:s nelience in the propermaintenance of the tr"c alleed by the respondents does not amo"nt to ross and habit"al nelect> )arrantin his dismissal.

Th"s, the lac of a alid and "st ca"se in terminatin the serices of the petitioner renders his dismissal illeal. Fnder Article 27 of theabor Code, an employee )ho is "n"stly dismissed is entitled to reinstatement, )itho"t loss of seniority rihts and other priilees, and tothe payment of f"ll bac)aes, incl"sie of allo)ances, and other benefits or their monetary eH"ialent, comp"ted from the time hiscompensation )as )ithheld from him "p to the time of his act"al reinstatement. 8o)eer, as fo"nd by the abor Arbiter, the circ"mstancesobtainin in this case do not )arrant the petitioner:s reinstatement. A more eH"itable disposition, as held by the abor Arbiter, )o"ld be ana)ard of separation pay eH"ialent to one month for eery year of serice from the time of his illeal dismissal "p to the finality of this

"dment in addition to his f"ll bac)aes, allo)ances and other benefits.

UNIERSITY O" ANGASINAN "ACULTY UNION v. NATIONAL LABOR RELATIONS COMMISSION #*( UNIERSITY O"ANGASINANG.R. Nos. 6+841743 !#*u#2 49, 1993

"#$ts%;etitioner filed aainst the Fniersity of ;anasinan before the Arbitration !ranch of the 3RC in ?a"pan City complaints for nonpaymentof benefits "nder ;.?. 3o. 171 and emerency cost of liin allo)ance &ecola' to teachers, and for prompt and acc"rate comp"tation ofbenefits "nder ;.?. 3o. 4/1 and the payment of ecolas0 nonpayment of e@tra loads0 nonpayment of salary differentials for s"mmer "nder ;.?.3o. 4/10 and iolation of 6ae Order 3o. 1 and delayed payment of salaries.

Issu&% )hether petitioner is entitled to the benefits prayed for d"rin, amon others, s"mmer breas

H&'(%Bes. The R"les $mplementin ;.?. 3o. 171 )hich too effect on A""st 1-, 1-< proide%

5ec. *. Allo)ances of f"ll(time and part(time employees. K Employees shall be paid in f"ll the monthly allo)ance on the basis of the scalesproided in 5ection hereof, reardless of the n"mber of their re"lar )orin days if they inc"r no absences d"rin the month. $f they inc"r

absences )itho"t pay, the amo"nts correspondin to the absences may be ded"cted from the monthly allo)ance proided that indeterminin the eH"ialent daily allo)ance of s"ch ded"ction, the applicable monthly allo)ance shall be diided by thirty &<' days.>

This 5ection, )hich is a irt"al reprod"ction of 5ection 12 of the old R"les $mplementin ;.?. 3o. 112, has been interpreted by this Co"rt asreH"irin that the f"ll amo"nt of the cost of liin allo)ance mandated by la) sho"ld be ien monthly to each employee if the latter has

)ored contin"o"sly for each month, reardless of the n"mber of the re"lar )orin days.

The *o wor$, no pay > principle does not apply in the instant case. The petitioner:s members receied their re"lar salaries d"rin thisperiod. $t is clear from the . . . la) that it contemplates a no )or> sit"ation )here the employees ol"ntarily absent themseles. ;etitioners,in the case at bar, certainly do not, ad vol!ntatem absent themseles d"rin semestral breas. Rather, they are constrained to taemandatory leae from )or. 9or this, they cannot be fa"lted nor can they be ber"ded that )hich is d"e them "nder the la). To a certaine@tent, the priate respondent can specify dates )hen no classes )o"ld be held. 5"rely, it )as not the intention of the framers of the la) toallo) employers to )ithhold employee benefits by the simple e@pedient of "nilaterally imposin no )or> days and conseH"ently aoidin

compliance )ith the mandate of the la) for those days.

HILIINE AIRLINES, INC. v. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ROMULUS ROTACIO #*( DR.HERMINIO A. "ABROSG.R. No. 1348 "&u#2 4, 1999

"#$ts%;riate respondent )as employed as fliht s"reon at petitioner company. 8e )as assined at the ;A Medical Clinic at 3ichols and )as ond"ty from 4%<< in the afternoon "ntil 12%<< midniht.

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On 9ebr"ary 17, 14, at aro"nd 7%<< in the eenin, priate respondent left the clinic to hae his dinner at his residence, )hich )as abo"tfie(min"te drie a)ay. A fe) min"tes later, the clinic receied an emerency call from the ;A Caro 5erices. One of its employees, Mr.Man"el Acosta, had s"ffered a heart attac. The n"rse on d"ty, Mr. Merlino E"sebio, called priate respondent at home to inform him of theemerency. The patient arried at the clinic at 7%/< in the eenin and Mr. E"sebio immediately r"shed him to the hospital. 6hen priaterespondent reached the clinic at aro"nd 7%/1 in the eenin, Mr. E"sebio had already left )ith the patient. Mr. Acosta died the follo)in day.

Fpon learnin abo"t the incident, ;A Medical ?irector ?r. #odofredo !. !anon ordered the Chief 9liht 5"reon to cond"ct an

inestiation. The Chief 9liht 5"reon, in t"rn, reH"ired priate respondent to e@plain )hy no disciplinary sanction sho"ld be taen aainsthim.

$n his e@planation, priate respondent asserted that he )as entitled to a thirty(min"te meal brea0 that he immediately left his residence "ponbein informed by Mr. E"sebio abo"t the emerency and he arried at the clinic a fe) min"tes later0 that Mr. E"sebio paniced and bro"htthe patient to the hospital )itho"t )aitin for him.

9indin priate respondent:s e@planation "nacceptable, the manaement chared priate respondent )ith abandonment of post )hile ond"ty. 8e )as ien ten days to s"bmit a )ritten ans)er to the administratie chare.

After eal"atin the chare as )ell as the ans)er of priate respondent, petitioner company decided to s"spend priate respondent for threemonths effectie ?ecember 1*, 14.

;riate respondent filed a complaint for i lleal s"spension aainst petitioner.

Issu&% )hether priate respondent )as illeally dismissed

H&'(%Bes. As reards the leality of priate respondent:s s"spension. The facts do not s"pport petitioner:s alleation that priate respondentabandoned his post on the eenin of 9ebr"ary 17, 14. ;riate respondent left the clinic that niht only to hae his dinner at his ho"se,

)hich )as only a fe) min"tes: drie a)ay from the clinic. 8is )hereabo"ts )ere no)n to the n"rse on d"ty so that he co"ld be easilyreached in case of emerency. Fpon bein informed of Mr. Acosta:s condition, priate respondent immediately left his home and ret"rned tothe clinic. These facts belie petitioner:s claim of abandonment.

The eiht(ho"r )or period does not incl"de the meal brea. 3o)here in the la) may it be inferred that employees m"st tae their meals )ithin the company premises. Employees are not prohibited from oin o"t of the premises as lon as they ret"rn to their posts on time.

;riate respondent:s act, therefore, of oin home to tae his dinner does not constit"te abandonment.

HILIINES ENGINEERS= SYNDICATE, INC. v. HON. !OSE S. BAUTISTA, ARSENIO I. MARTINE;, BALTA;AR M. ILLANUEA,EMILIO C. TABIGNE #*( AMADO C. BUGAYONG, &s)()*g !u(g& #*( Asso$)#t& !u(g&s &s-&$t)v&'2 o/ t& Cout o/ I*(ust)#'R&'#t)o*s "EDERICO BENITE;, DE@EY BAYING, ANDRES ULAS, DEL"IN GALASGAS, UE;ON BASORA, ET AL.G.R. No. L716++ "&u#2 49, 196+

"#$ts%On ?ecember 2-, 1/-, respondent 9ederico !enite toether )ith *4 other employees of petitioner, a domestic corporation enaed in theconstr"ction b"siness, loded a complaint )ith respondent co"rt, allein that they had been employed by the firm in ario"s capacities0 thatthey had rendered nihttime serice d"rin certain periods at ario"s rates per ho"r0 that for obs of similar nat"re and cateory, petitioneronly paid them )aes eH"ialent to those of )orers on the day shift, )itho"t any e@tra compensation for niht )or0 that for s"ch niht

)or, they )ere entitled to additional compensation of /<N0 and that to prosec"te their claim, they )ere forced to hire co"nsel for an areedfee of 1<N of s"ch claim. The complaint attached a sched"le of their names, bade n"mbers, rates of pay, n"mber of days, total daytimecompensation act"ally receied and the e@pected /<N differential increment pay.

Issu&% )hether or not "pon the enactment of Rep"blic Act -7/, the C$R lost its "risdiction oer claims for additional compensation for re"lar niht )or

H&'(%The broad po)ers conferred by Common)ealth Act 1< on the C$R hae been c"rtailed by Rep"blic Act -7/ )hich limited them to the fo"rcateories therein e@pressed, in line )ith the p"blic policy of allo)in settlement of ind"strial disp"tes ia the collectie barainin process0

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b"t )e find no coent reason for concl"din that a s"it of this nat"re K for e@tra compensation for niht )or falls o"tside the domain ofind"strial co"rt )ithal, the record does not sho) that employer(employee relation bet)een the */ respondents the petitioner had ceased.

After the passae of Rep"blic Act -7/, this Co"rt not only "pheld the ind"strial co"rts ass"mption of "risdiction oer cases for salarydifferentials and oertime pay or for payment of additional compensation for rendered on 5"ndays and holidays and for niht )or b"t hasalso s"pported s"ch co"rt r"lin that )or at niht sho"ld be paid more than )or done at daytime, and that if that )or is done beyond the

)orer:s re"lar ho"rs of d"ty, he sho"ld also be paid additional compensation for oertime )or.

CRISTONICO B. LEGAHI v. NATIONAL LABOR RELATIONS COMMISSION #*( UNITED HILIINE LINES, INC., NORTHSOUTHSHI MGT., ?TE, LTD., SINGAORE, GREGORIO . DE LIMA, !R., TOR :ARLSEN #*( IONEER INSURANCE < SURETY COR.G.R. No. 1444+ Nov&0& 18, 1999

"#$ts%$n a complaint filed )ith the ;hilippine Oerseas Employment Administration &;OEA', Cristonico !. eahi alleed that he )as hired asChief Coo> aboard M=D 9ederal 3ord> by the 3orthso"th 5hip Manaement &;TE', td., 5inapore and represented by its local aentFnited ;hilippine ines, $nc. &F;$'.

The contract of employment stip"lated that his term of employment )as for ten months beinnin October , 12 )ith a basic monthlysalary of F54/<.<< )ith 44 ho"rs )eely as minim"m n"mber of ho"rs )ored )ith a fi@ed oertime pay &OT' of 1-/.<< and days leae

)ith pay eery month.

5ometime in 3oember, 12 petitioner )as ased by the 5hipmaster to prepare a ict"allin cost statement for the month of October, 12.After learnin that s"ch preparation inoles mathematical sills, as it )o"ld reH"ire estimation of food cost, al"e of stocs, etc. he intimatedthat he did not no) ho) to do s"ch )or as it )as not part of the d"ties of a chief coo. 8e )as told that it )as not a diffic"lt ob and that heonly needed to copy the preio"s forms. After m"ch rel"ctance, petitioner nonetheless prepared the statement in deference to the5hipmaster.

$n ?ecember, petitioner )as reH"ested aain to prepare the ict"allin cost statement for the month of 3oember. 8e obeyed since he )asafraid he )o"ld earn the ire of his s"periors if he ref"sed.

5ometime in +an"ary, 1, the 5hipmaster ased petitioner to do the ict"allin cost statement for ?ecember )hich he complied. On+an"ary *, 1, the 5hipmaster reH"ested the petitioner to prepare a corrected ict"allin statement for the same month of ?ecember.;etitioner ased the 5hipmaster if he co"ld defer the correction as he )as b"sy doin his chores. The response certainly did not sit )ell )ith

the 5hipmaster so he )as called for a meetin )hich petitioner did not attend.

On +an"ary 14, 1, a committee )as formed headed by the 5hipmaster himself )ith the Chief Officer, Chief Enineer and !os"n asmembers.

$n this meetin, the 5hipmaster read to him the offenses he committed on board. 8e )as ased to ans)er the chares b"t petitioner opted toremain silent. Thereafter, petitioner )as informed that he )as dismissed.

The ne@t day, petitioner )as repatriated to the ;hilippines thro"h the assistance of the ;hilippine Cons"late.

Fpon arrial or on 9ebr"ary 1*, 1, petitioner filed )ith the ;OEA a complaint for illeal dismissal aainst priate respondents. 8e so"htthe payment of his salary correspondin to the "ne@pired portion of his contract, "npaid oertime pay, leae pay, salary differential anddamaes.

Issu&% )hether petitioner:s dismissal from his employment is alid

H&'(%3o. To constit"te a alid dismissal from employment, t)o &2' reH"isites m"st conc"r% &a' the dismissal m"st be for any of the ca"ses proidedin Article 2-2 of the abor Code, and &b' the employee m"st be accorded d"e process, the elements of )hich are notice and the opport"nityto be heard and to defend himself. ;roced"ral d"e process reH"ires that the employee m"st be apprised of the chares aainst him. 8em"st be ien reasonable time to ans)er the chares, allo)ed ample opport"nity to be heard and defend himself, and assisted by arepresentatie if the employee so desires. T)o )ritten notices are reH"ired before termination of employment can be leally effected. Theyare% &1' notice )hich apprises the employee of the partic"lar acts or omissions for )hich his dismissal is so"ht, and &2' the s"bseH"ent

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notice )hich informs the employee of the employer:s decision to dismiss him0 3 not to mention the opport"nity to ans)er and reb"t thechares aainst him, in bet)een s"ch notices.

$n the case at bar, the eidence on record belies priate respondents: claim that petitioner )as afforded d"e process.

as early as +an"ary *, 1, the employer had already decided to dismiss petitioner and sent home for his alleed ref"sal to obey the ordersof his s"periors. On +an"ary 14, 1, the committee read to petitioner his alleed offenses )hich )ere his ref"sal to tae orders from his

s"perior on +an"ary * and his leain the essel )itho"t permission on +an"ary 1. 6hen petitioner remained silent, the committee informedhim that he )as dismissed. 8e )as sent home that same day. ;etitioner )as not ien reasonable time to ans)er the chares h"rled aainsthim or to defend himself. The notice apprisin him of the chares and the notice of dismissal )ere done in one mornin K all in the +an"ary14 committee hearin. The s"bmission that the entry in the loboo made on +an"ary * )hich stated that for petitioner:s ref"sal to taeorders from the master of the ship he )ill be sent home in first possible port> )as s"fficient compliance of the first notice reH"irement is not

)ell(taen. This is not the ind of notice that satisfies d"e process contemplated by la). $n s"ch a case )here there is a fail"re to comply )ith the reH"irements of the la) as to the notice and hearin, the dismissal is certainly tainted )ith illeality.

On the s"bstantie iss"e, there is no "st ca"se for petitioner:s dismissal. The ict"allin cost statement for the month of +an"ary )as not yetd"e )hen he )as ased to prepare the same on +an"ary * of that month. A ict"allin cost statement )as necessary to sho) the foode@pense inc"rred for the past month, not for the present month. Th"s, from the ict"allin statements s"bmitted for the month of October,3oember and ?ecember, 12, it can be seen that the period indicated therein bean on the first day of each month and ended on the lastday of said month. This means that the report for October )as made in 3oember, for 3oember in ?ecember, and that for ?ecember in+an"ary. 5"ch bein the case, petitioner:s ref"sal to prepare the ict"allin statement of +an"ary )as "stified since the ict"allin cost forthe month of +an"ary )as not yet d"e or necessary.

9or )illf"l disobedience to be considered as "st ca"se for dismissal, the employee:s cond"ct m"st be )illf"l or intentional, the )illf"lnessbein characteried by a )ronf"l and pererse attit"de and the order iolated m"st hae been reasonable, la)f"l, made no)n to theemployee and m"st pertain to the d"ties )hich he has been enaed to dischare.

$n the instant case, it )as act"ally not petitioner:s d"ty to prepare the ict"allin statement. The alleation that this )as part of his d"ty aschief coo and the fact that he )as a)are of s"ch d"ty )hen he )as interie)ed for the post is only self(serin and )itho"t basis. Theemployment contract does not mention anythin that this )as part of his d"ty as chief coo. Een ass"min that petitioner ref"sed to obeythe order of his s"perior to prepare a corrected ict"allin cost statement for ?ecember, altho"h he maintained that he "st ased for time todo it, as he )as then b"sy performin his "s"al d"ty, )hich )e beliee to be the case, his ref"sal cannot be considered as one beincharacteried by a )ronf"l and pererse attit"de.> 9rom the beinnin, petitioner already intimated that he did not no) ho) to accomplishthe ict"al cost statement since it entailed some mathematical sills )hich he admittedly did not hae. $ndeed, to "se his o)n )ords, he

came aboard only to coo.> 8is capability on man"al sill )as limited to cooin and nothin more and for )hich reason he applied for the ob as chief coo and )as eent"ally hired as s"ch. The fact that he )as able to do the ict"allin cost statements for the past three months )as an e@tra )or on his part. 8is fail"re or alleed ref"sal to o on )ith the )or did not merit the seerest penalty of dismissal from theserice and his immediate repatriation )itho"t een affordin him d"e process of la).

;etitioner:s dismissal )itho"t a alid ca"se constit"te a breach of contract. ConseH"ently, he sho"ld only be paid the "ne@pired portion of hisemployment contract. 8o)eer, the payment of the oertime pay sho"ld be disallo)ed. $n the same ein, the claim for day:s leae pay for the"ne@pired portion of the contract is "n)arranted since the same is ien d"rin the act"al serice of the seaman.

HILIINE NATIONAL BAN: v. HILIINE NATIONAL BAN: EMLOYEES ASSOCIATION ?EMA #*( COURT O" INDUSTRIALRELATIONSG.R. No. L73459 !u'2 3, 1984

"#$ts%This case started on +an"ary 2-, 1*/ in conseH"ence of the certification of the ;resident of the ;hilippines of an ind"strial disp"te bet)eenthe ;hilippine 3ational !an Employees Association &;EMA, for short', on the one hand, and the ;hilippine 3ational !an &;3!, for short',on the other, )hich arose from no more than the alleed fail"re of the ;3! to comply )ith its commitment of oraniin a Committee on;ersonnel Affairs to tae chare of screenin and deliberatin on the promotion of employees coered by the collectie baraininareement then in force bet)een the said parties. On +an"ary 2-, 1*/, the $nd"strial Co"rt iss"ed an order aimed at settlin the disp"tetemporarily bet)een the parties, )hich )as certified by the ;resident. ;ertinent portions of the order read th"s%

1. That in order to settle the strie and for the employees to ret"rn to )or immediately startin +an"ary 2, 1*/, the Committee on;ersonnel Affairs is hereby created to start f"nctionin on 9ebr"ary 1, 1*/0

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f. That in ret"rn for this concession, an in"nction aainst f"t"re stries or loco"ts shall be iss"ed by the Co"rt to last for a period of si@months b"t )hich shall terminate een before that period sho"ld all disp"tes of the parties be already resoled0>

;riate respondent filed another pleadin s"bmittin to this Co"rt for determination certain matters )hich it claims cannot be resoled by theparties, )hich are as follo)s%

a. $n a Resol"tion 3o. 11*2 dated 5eptember 1*, 1/7, the Respondent:s !oard of ?irectors approed a reision of the comp"tationof oertime pay retroactie as of +"ly 1, 1/4, and a"thoried a recomp"tation of the re"lar one( ho"r and e@tra oertime alreadyrendered by all officers and employees of the Respondent !an.

b. 5ince the rant of the benefits in H"estion, the employees of the Respondent, represented by the petitioner, hae al)aysconsidered them to be a part of their salaries and=or frine benefits0 neertheless, the Respondent, in 1*, )itho"t "st ca"se,

)ithdre) said benefits and in spite of repeated demands ref"sed, and still ref"ses to reinstate the same "p to the present.c. After the prom"lation of the ?ecision in 3ational 6ater)ors and 5e)erae A"thority s. 3A6A5A Consolidated Fnions, et al.

#.R. 3o. (1--, A". 1, 1*4, the ;etitioner has repeatedly reH"ested Respondent that the cost of liin allo)ance andloneity pay be taen into acco"nt in the comp"tation of oertime pay, effectie as of the rant of said benefits on +an"ary 1,1/-, in accordance )ith the r"lin in said ?ecision of the 5"preme Co"rt.

d. Fntil no) Respondent has not taen any concrete steps to)ard the payment of the differential oertime and nihttime pays arisinfrom the cost of liin allo)ance and loneity pay.

Issu&% )hether or not members of the respondent "nion are entitled to oertime pay, COA, loneity pay

H&'(%Ov&t)0& o> is act"ally the lenthenin of ho"rs deeloped to the interests of the employer and the reH"irements of his enterprise. $tfollo)s that the )ae or salary to be receied m"st lie)ise be increased, and more than that, a special additional amo"nt m"st be added tosere either as enco"raement or ind"cement or to mae "p for the thins he loses )hich. And on this score, it m"st al)ays be borne inmind that )ae is indisp"tably intended as payment for )or done or serices rendered.

@#g&= paid to any employee shall mean the rem"neration or earnins, ho)eer desinated, capable of bein e@pressed in terms of money, )hether fi@ed or ascertained on a time tas, piece, commission basis or other method of calc"latin the same, )hich is payable by anemployer to an employee "nder a )ritten or "n)ritten contract of employment for wor$ done or to be done or for services rendered or to berendered and incl"des the fair and reasonable al"e as determined by the 5ecretary of abor, of board, lodin or other facilities c"stomarilyf"rnished by the employer to the employee.

5"pplements are e@tra rem"neration or benefits receied by )ae earners from their employers and incl"de b"t are not restricted to pay foracation and holidays not )ored0 paid sic leae or maternity leae0 oertime rate in e@cess of )hat is reH"ired by la)0 pension, retirement,and death benefits0 profit(sharin, family allo)ances0 Christmas, )ar ris and cost"of"living bon!ses; or other bon!ses other than those paid as a reward for e(tra o!tp!t or time spent on the -ob.

$n order to meet the effects of "ncertain economic conditions affectin adersely the liin conditions of )ae earners, employers, )heneerthe financial conditions of the enterprise permit, rant them )hat has been called as cost(of(liin allo)ance.

$n the case at bar, the cost(of(liin allo)ance bean to be ranted in 1/- and the loneity pay in 1-1. $n other )ords, they )ere rantedby ;3! "pon realiin the diffic"lt pliht of its labor force in the face of the "n"s"al inflationary sit"ation in the economy of the co"ntry, )hich,ho)eer ac"te, )as neertheless e@pected to improe. There )as th"s eident an inherently continent character in said allo)ances. They

)ere not intended to be re"lar, m"ch less permanent additional part of the compensation of the employees and )orers.

M"ch less )ere they dependent on e@tra or special )or done or serice rendered by the correspondin recipient. Rather, they )ere basedon the needs of their families as the conditions of the economy )arranted.

5o also )ith the loneity pay0 manifestly, this )as not based on the daily or monthly amo"nt of )or done or serice rendered it )as moreof a rat"ity for their loyalty, or their hain been in the ban:s employment for consideration periods of time. $ndeed, )ith partic"lar referenceto the loneity pay, the then e@istin collectie barainin contract e@pressly proided% ... That this benefit shall not form part of the basicsalaries of the officers so affected.>

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;EMA may contend that the e@press e@cl"sion of the loneity pay, means that the cost(of(liin al lo)ance )as not intended to be e@cl"ded.Considerin, ho)eer, the continent nat"re of the allo)ances and their lac of relation to )or done or serice rendered, )hich in a sensemay be other)ise in respect to loneity pay ;EMA:s contention is "ntenable.

As far as loneity pay is concerned, it is beyond H"estion that the same cannot be incl"ded in the comp"tation of oertime pay for the erysimple reason that the contrary is e@pressly stip"lated in the collectie barainin areement and, as sho"ld be the case, i t is settled that theterms and conditions of a collectie barainin areement constit"te the la) bet)een the parties.

The matter of the cost(of(liin allo)ance has to be e@amined from another perspectie, namely, that )hile ;EMA had been al)aysdemandin for its interation into the basic pay, it neer s"cceeded in ettin the conformity of ;3! thereto, and so, all collectie baraininareements entered into periodically by the said parties did not proide therefor.

3ot)ithstandin the portions of the 3A6A5A:s opinion relied "pon by ;EMA, there is nothin in CA 444 that co"ld "stify its post"re thatcost(of(liin allo)ance sho"ld be added to the re"lar )ae in comp"tin oertime pay.

Tr"e, it is there stated that for p"rposes of comp"tin oertime compensation, re"lar )ae incl"des all payments )hich the parties haeareed shall be receied d"rin the )or )ee, incl"din ( differential payments for )orin at "ndesirable times, s"ch as at niht and theboard and lodin c"stomarily f"rnished the employee. ... The re"lar rate: of pay also ordinarily incl"des incentie bon"s or profit(sharinpayments made in addition to the normal basic pay, and it )as also held that the hiher rate for niht, 5"nday and holiday )or is "st asm"ch a re"lar rate as the lo)er rate for daytime )or. The hiher rate is merely an ind"cement to accept employment at times )hich arenot as desirable from a )ormen:s standpoint.

!"t no)here did 3A6A5A refer to e@tra, temporary and continent compensation "nrelated to )or done or serice rendered, )hich ase@plained earlier is the ery nat"re of cost(of( liin allo)ance.

the basis of comp"tation of oertime pay beyond that reH"ired by CA 444 m"st be the collectie barainin areement, or, to reiterate O"rpost"lation therein and in !isi n Manaa)a, s!pra, it is not for the co"rt to impose "pon the parties anythin beyond )hat they haeareed "pon )hich is not tainted )ith illeality. On the other hand, )here the parties fail to come to an areement, on a matter not leallyreH"ired, the co"rt ab"ses its discretion )hen it oblies any *f them to do more than )hat is leally oblied.

$n the absence of any specific proision on the matter in a collectie barainin areement, )hat are decisie in determinin the basis for thecomp"tation of oertime pay are t)o ery ermane considerations, namely, &1' )hether or not the additional pay is for e@tra )or done orserice rendered and &2' )hether or not the same is intended to be permanent and re"lar, not continent nor temporary and ien only toremedy a sit"ation )hich can chane any time. 6e reiterate, oertime pay is for e@tra effort beyond that contemplated in the employment

contract, hence )hen additional pay is ien for any other p"rpose, it is illoical to incl"de the same in the basis for the comp"tation ofoertime pay.

NATIONAL SEMICONDUCTOR ?H: DISTRIBUTION, LTD. v. NATIONAL LABOR RELATIONS COMMISSION ?+TH DIISION #*(EDGAR HILI C. SANTOSG.R. No. 1434 !u*& 46, 1998

"#$ts%;etitioner 3ational 5emicond"ctor &8P' ?istrib"tion, td. &35C for breity', a forein corporation licensed to do b"siness in the ;hilippines,man"fact"res and assembles electronic parts for e@port )ith principal office at the Mactan E@port ;rocessin Uone, Mactan, ap"(ap" City.;riate respondent Edar ;hilip C. 5antos )as employed by 35C as a technician in its 5pecial ;rod"cts #ro"p )ith a monthly salary of;/,/<1.<< assined to the raeyard shift startin at ten o: cloc in the eenin "ntil si@ o: cloc in the mornin.

On - +an"ary 1 5antos did not report for )or on his shift. 8e res"med his d"ties as niht shift Technician 5"pport only on +an"ary1. 8o)eer, at the end of his shift the follo)in mornin, he made 2 entries in his daily time record &?TR' to mae it appear that he

)ored on both the -th and th of +an"ary 1.

8is immediate s"perisor, Mr. +oel imsiaco, "nno)n to priate respondent 5antos, receied the report that there )as no technician in theraeyard shift of - +an"ary 1. Th"s, imsiaco checed the ?TRs and fo"nd o"t that 5antos indeed did not report for )or on - +an"ary.!"t )hen he checed 5antos: ?TR aain in the mornin of +an"ary 1 he fo"nd the entry made by 5antos for the day before.

$nformal inestiations )ere cond"cted by manaement. 5antos )as reH"ired in a memorand"m to e@plain in )ritin )ithin 4- ho"rs fromnotice )hy no disciplinary action sho"ld be taen aainst him for dishonesty, falsifyin daily time record &?TR' and iolation of company r"les

<




and re"lations. On 11 +an"ary 1 5antos s"bmitted his )ritten e@planation allein that he )as ill on the day he )as absent. As reardsthe entry on - +an"ary, he alleed that it )as merely d"e to oersiht or carelessness on his part.

9indin 5antos: e@planation "nsatisfactory, 35C dismissed him on 14 +an"ary 1 on the ro"nd of falsification of his ?TR, )hich act )asinimical to the company and constit"ted dishonesty and serio"s miscond"ct.

Issu&%

?id respondent 3ational 5emicond"ctor &8P' ?istrib"tion td. illeally dismiss complainant Edar ;hilip 5antosL

H&'(%3o. ;riate respondent has been in petitioner:s employ for fie &/' years K startin 1 +an"ary 1-- )hen he )as hired to 14 +an"ary 1

)hen his serices )ere terminated K and petitioner neer denied that priate respondent rendered niht shift )or.

!y choosin not to f"lly and completely disclose information to proe that it had paid all the niht shift differentials d"e to priate respondent,petitioner failed to dischare the b"rden of proof.

$t is not disp"ted that complainant )as re"larly assined to a niht shift &1<%<< ;.M. to 7%<< A.M.'. Fnder 5ection 2, R"le $$, !oo Three ofthe $mplementin R"les of the abor Code, complainant is entitled to an additional benefit of not less ten percent &1<N' of his re"lar )aefor each ho"r of )or performed. The record is bereft of eidence that respondent has paid complainant this benefit. The best eidence forrespondent corporation )o"ld hae been the payrolls, o"chers, daily time records and the lie )hich "nder 5ections *, 7, -, 11 and 12, R"leQ, !oo $$$ of the $mplementin R"les it is oblied to eep. $ts fail"re ies rise to the pres"mption that either it does not hae them or if itdoes, their presentation is pre"dicial to i ts ca"se.

5antos )as accorded f"ll opport"nity to be heard before he )as dismissed. ;etitioner f"rnished priate respondent notice as to the partic"laracts )hich constit"ted the ro"nd for his dismissal. !y reH"irin him to s"bmit a )ritten e@planation )ithin 4- ho"rs from receipt of thenotice, the company ae him the opport"nity to be heard in his defense. ;riate respondent aailed of this chance by s"bmittin a )rittene@planation.

That the inestiations cond"cted by petitioner may not be considered formal or recorded hearins or inestiations is immaterial. A formal ortrial type hearin is not all times and in all instances essential to d"e process, the reH"irements of )hich are satisfied )here the parties areafforded fair and reasonable opport"nity to e@plain their side of the controersy. $t is deemed s"fficient for the employer to follo) the nat"ralseH"ence of notice, hearin and "dment.

ROMEO LAGATIC v. NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DEELOMENT CORORATION, STEHEN ROFAS,!ESUS GO, GRACE LIUSON, #*( ANDRE@ LIUSONG.R. No. 141+ !#*u#2 48, 1998

"#$ts%Romeo aatic )as employed in May 1-* by Cityland, first as a probationary sales aent, and later on as a maretin specialist. 8e )astased )ith solicitin sales for the company, )ith the correspondin d"ties of acceptin call(ins, referrals, and main client calls and coldcalls. Co'( $#''s refer to the practice of prospectin for clients thro"h the telephone directory. Cityland, beliein that the same is aneffectie and cost(efficient method of findin clients, reH"ires all its maretin specialists to mae cold calls. The n"mber of cold callsdepends on the sales enerated by each% more sales mean less cold calls. ie)ise, in order to assess cold calls made by the sales staff, as

)ell as to determine the res"lts thereof, Cityland reH"ires the s"bmission of daily proress reports on the same.

Cityland iss"ed a )ritten reprimand to petitioner for his fail"re to s"bmit cold call reports for 5eptember 1<, October 1 and 1<, 11. This

not)ithstandin, petitioner aain failed to s"bmit cold call reports for 5eptember 2, /, -, 1<, 11, 12, 1/, 17, 1-, 1, 2<, 22, and 2-, as )ell asfor October *, -, , 1<, 12, 1 and 14, 12. ;etitioner )as reH"ired to e@plain his inaction, )ith a )arnin that f"rther non(compliance )o"ldres"lt in his termination from the company. $n a reply dated October 1-, 12, petitioner claimed that the same )as an honest omissionbro"ht abo"t by his concentration on other aspects of his ob. Cityland fo"nd said e@c"se inadeH"ate and, on 3oember , 12,s"spended him for three days, )ith a similar )arnin.

3ot)ithstandin the aforesaid s"spension and )arnin, petitioner aain failed to s"bmit cold call reports for 9ebr"ary /, *, -, 1< and 12,1. 8e )as erbally reminded to s"bmit the same and )as een ien "p to 9ebr"ary 17, 1 to do so. $nstead of complyin )ith saiddirectie, petitioner )rote a note, TO 8E 6$T8 CO? CA5X 68O CARE5L> and e@hibited the same to his co(employees. To )orsenmatters, he left the same lyin on his des )here eeryone co"ld see it.

1




petitioner receied a memorand"m reH"irin him to e@plain )hy Cityland sho"ld not mae ood its preio"s )arnin for his fail"re to s"bmitcold call reports, as )ell as for iss"in the )ritten statement aforementioned. On 9ebr"ary 24, 1, he sent a letter(reply allein that hisfail"re to s"bmit cold call reports sho"ld trot be deemed as ross ins"bordination. 8e denied any no)lede of the damain statement, TO8E 6$T8 CO? CA5X>

9indin petitioner "ilty of ross ins"bordination, Cityland sered a notice of dismissal "pon him. Arieed by s"ch dismissal, petitioner fileda complaint aainst Cityland for illeal dismissal, illeal ded"ction, "nderpayment, oertime and rest day pay, damaes and attorney:s fees.

Issu& K1% )hether petitioner )as illeally dismissed

H&'( K1%3o. To constit"te a alid dismissal from employment, t)o reH"isites m"st be met, namely% &1' the employee m"st be afforded d"e process,and &2' the dismissal m"st be for a alid ca"se.

;etitioner is "ilty of )illf"l disobedience. @)''/u' ()so&()&*$& reH"ires the conc"rrence of at least t)o reH"isites% the employee:s assailedcond"ct m"st hae been )illf"l or intentional, the )illf"lness bein characteried by a )ronf"l and pererse attit"de0 and the order iolatedm"st hae been reasonable, la)f"l, made no)n to the employee and m"st pertain to the d"ties )hich he had been enaed to dischare.

;etitioner:s fail"re to comply )ith Cityland:s policy of reH"irin cold call reports is clearly )illf"l, ien the 2- instances of his fail"re to do so,despite a preio"s reprimand and s"spension. More than that, his )ritten statement sho)s his open defiance and disobedience to la)f"lr"les and re"lations of the company. ie)ise, said company policy of reH"irin cold calls and the concomitant reports thereon is clearlyreasonable and la)f"l, s"fficiently no)n to petitioner, and in connection )ith the d"ties )hich he had been enaed to dischare.

On the proced"ral aspect, petitioner claims that he )as denied d"e process. 6ell settled is the dict!m that the t)in reH"irements of noticeand hearin constit"te the elements of d"e process in the dismissal of employees. Th"s, the employer m"st f"rnish the employee )ith t)o

)ritten notices before the termination of employment can be effected. The first apprises the employee of the partic"lar acts or omissions for )hich his dismissal is so"ht0 the second informs him of the employer:s decision to dismiss him.

$n the case at bar, petitioner )as notified of the chares aainst him in a memorand"m dated 9ebr"ary 1, 1, )hich he receied on9ebr"ary 2, 1. 8e s"bmitted a letter(reply thereto on 9ebr"ary 24, 1, )herein he ased that his fail"re to s"bmit cold call reports benot interpreted as ross ins"bordination. 8e )as ien notice of his termination on 9ebr"ary 2*, 1. This chronoloy of eents clearlysho) that petitioner )as sered )ith the reH"ired )ritten notices.

The reH"irement of a hearin is complied )ith as lon as there )as an opport"nity to be heard, and not necessarily that an act"al hearin becond"cted. ;etitioner had an opport"nity to be heard as he s"bmitted a letter(reply to the chare. 8e, ho)eer, add"ced no other eidenceon his behalf. $n fact, he admitted his fail"re to s"bmit cold call reports, prayin that the same be not considered as ross ins"bordination.

Issu& K4% )hether petitioner is entitled to salary differentials, bac)aes, separation pay, oertime pay, rest day pay and "npaid commissions

H&'( K4%3o. 6hile it is tr"e that an increase in salary )o"ld ca"se an increase in AR, )ith the same bein ded"cted from credits earned, th"slessenin his commissions, the fact remains that petitioner still receies his basic salary )itho"t ded"ctions. ;etitioner:s ar"ment that he isindebted to respondent by ;1,41<.<< is fallacio"s as his basic salary remains the same and he contin"es to receie the same, reardless ofhis collections. The fail"re to attain a CE eH"ialent to the AR of ;/,*4<.<< only means that the difference )o"ld be credited to his C3 for thene@t month. Clearly, the p"rpose of the same is to enco"rae sales personnel to accelerate their sales in order for them to earn

commissions.

Additionally, there is no la) )hich reH"ires employers to pay commissions, and )hen they do so, there is no la) )hich prescribes a methodfor comp"tin commissions. The determination of the amo"nt of commissions is the res"lt of collectie barainin neotiations, indiid"alemployment contracts or established employer practice. 5ince the form"la for the comp"tation of commissions )as presented to andaccepted by petitioner, s"ch prescribed form"la is in order. As to the alleation that said form"la diminishes the benefits bein receied bypetitioner )heneer there is a )ae increase, it m"st be noted that his commissions are not meant to be in a fi@ed amo"nt. $n fact, there )asno ass"rance that he )o"ld receie any commission at all. No*7()0)*ut)o* o/ &*&/)ts, as applied here, merely means that the companymay not remoe the privilege of sales personnel to earn a commission, not that they are entitled to a fi@ed amo"nt thereof.

2




A ro"tine inspection cond"cted by a abor Enforcement Officer on A""st *, 11 of the 6ellinton 9lo"r Mills, an establishment o)ned andoperated by petitioner 6ellinton $nestment and Man"fact"rin Corporation &hereafter, simply 6ellinton'. The officer thereafter dre) "p areport, a copy of )hich )as e@plained to and receied by> 6ellinton:s personnel manaer, in )hich he set forth his findin of non(paymentof re"lar holidays fallin on a 5"nday for monthly(paid employees.

6ellinton so"ht reconsideration of the abor $nspector:s report. $t ar"ed that the monthly salary of the company:s monthly(salariedemployees already incl"des holiday pay for all re"lar holidays and hence there is no leal basis for the findin of alleed non(payment of

re"lar holidays fallin on a 5"nday. $t e@po"nded on this thesis in a position paper s"bseH"ently s"bmitted to the Reional ?irector,assertin that it pays its monthly(paid employees a fi@ed monthly compensation "sin the 14 factor )hich "ndeniably coers and alreadyincl"des payment for all the )orin days in a month as )ell as all the 1< "n)ored re"lar holidays )ithin a year.

Issu&% )hether or not a monthly(paid employee, receiin a fi@ed monthly compensation, is entitled to an additional pay aside from his "s"al holidaypay, )heneer a re"lar holiday falls on a 5"nday

H&'(%3o. Eery )orer sho"ld, accordin to the abor Code, be paid his re"lar daily )ae d!ring reg!lar holidays, e@cept in retail and sericeestablishments re"larly employin less than ten &1<' )orers0> this, of co"rse, een if the )orer does no )or on these holidays. There"lar holidays incl"de% 3e) Bear:s ?ay, Ma"ndy Th"rsday, #ood 9riday, the ninth of April, the first of May, the t)elfth of +"ne, the fo"rth of+"ly, the thirtieth of 3oember, the t)enty(fifth of ?ecember, and the day desinated by la) for holdin a eneral election &or nationalreferend"m or plebiscite'.

;artic"larly as reards employees )ho are "niformly paid by the month, the monthly minim"m )ae shall not be less than the stat"toryminim"m )ae m"ltiplied by */ days diided by t)ele.> This monthly salary shall sere as compensation for all days in the month )hether

)ored or not,> and irrespectie of the n"mber of )orin days therein.> $n other )ords, )hether the month is of thirty &<' or thirty(one &1'days: d"ration, or t)enty(eiht &2-' or t)enty(nine &2' &as in 9ebr"ary', the employee is entitled to receie the entire monthly salary. 5o, too,in the eent of the declaration of any special holiday, or any fort"ito"s ca"se precl"din )or on any partic"lar day or days &s"ch astransportation stries, riots, or typhoons or other nat"ral calamities', the employee is entitled to the salary for the entire month and theemployer has no riht to ded"ct the proportionate amo"nt correspondin to the days )hen no )or )as done. The monthly compensation iseidently intended precisely to aoid comp"tations and ad"stments res"ltin from the continencies "st mentioned )hich are ro"tinelymade in the case of )orers paid on daily basis.

$n 6ellinton:s case, at the time of the inspection cond"cted by the abor Enforcement Officer, it )as and had been payin its employees asalary of not less than the stat"tory or established minim"m )ae, and that the monthly salary th"s paid )as not less than the stat"tory

minim"m )ae m"ltiplied by */ days diided by t)ele.> There is, in other )ords, no iss"e that to this e@tent, 6ellinton complied )ith theminim"m norm laid do)n by la).

Apparently the monthly salary )as fi@ed by 6ellinton to proide for compensation for eery )orin day of the year incl"din the holidaysspecified by la) K and e@cl"din only 5"ndays. $n fi@in the salary, 6ellinton "sed )hat it calls the 60= factor 0> that is to say, it simplyded"cted /1 5"ndays from the */ days normally comprisin a year and "sed the difference, 14, as basis for determinin the monthlysalary. The monthly salary th"s fi@ed act"ally coers payment for 14 days of the year, incl!ding reg!lar and special holidays, as well asdays when no wor$ is done by reason of fort!ito!s ca!se, as above specified, or ca!ses not attrib!table to the employees.

The abor Officer )ho cond"cted the ro"tine inspection of 6ellinton discoered that in certain years, t)o or three re"lar holidays hadfallen on 5"ndays. 8e reasoned that this had precl"ded the enoyment by the employees of a non()orin day, and the employees hadconseH"ently had to )or an additional day for that month. This ratiocination receied the approal of his Reional ?irector )ho opined that

)hen a re"lar holiday falls on a 5"nday, an e@tra or additional )orin day is created and the employer has the obliation to pay its

employees for the e@tra day e@cept the last 5"nday of A""st since the payment for the said holiday is already incl"ded in the 14 factor.

The theory loses siht of the fact that the monthly salary in 6ellinton K )hich is based on the so(called 14 factor> K acco"nts for all */days of a year0 i.e., 6ellinton:s 14 factor> leaes no day "nacco"nted for0 it is payin for all the days of a year )ith the e@ception only of/1 5"ndays.

The respondents: theory )o"ld mae each of the years in H"estion &1--, 1-, 1<', a year of *- days. ;"rs"ant to this theory, noemployer optin to pay his employees by the month )o"ld hae any definite basis to determine the n"mber of days in a year for )hichcompensation sho"ld be ien to his )or force. 8e )o"ld hae to ascertain the n"mber of times leal holidays )o"ld fall on 5"ndays in allthe years of the e@pected or e@trapolated lifetime of his b"siness. Alternatiely, he )o"ld be compelled to mae ad"stments in hisemployees: monthly salaries eery year, dependin on the n"mber of times that a leal holiday fell on a 5"nday.

4




There is no proision of la) reH"irin any employer to mae s"ch ad"stments in the monthly salary rate set by him to tae acco"nt of lealholidays fallin on 5"ndays in a ien year, or, contrary to the leal proisions bearin on the point, other)ise to recon a year at more than*/ days. As earlier mentioned, )hat the la) reH"ires of employers optin to pay by the month is to ass"re that the monthly minim"m )aeshall not be less than the stat"tory minim"m )ae m"ltiplied by */ days diided by t)ele,> and to pay that salary for all days in the month

)hether )ored or not,> and irrespectie of the n"mber of )orin days therein.> That salary is d"e and payable reardless of thedeclaration of any special holiday in the entire co"ntry or a partic"lar place therein, or any fort"ito"s ca"se precl"din )or on any partic"lar

day or days &s"ch as transportation stries, riots, or typhoons or other nat"ral calamities', or ca"se not imp"table to the )orer.

!OSE RI;AL COLLEGE v. NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE O" TEACHERSO""ICE@OR:ERSG.R. No. L76+84 D&$&0& 1, 1985

"#$ts%;etitioner is a non(stoc, non(profit ed"cational instit"tion d"ly oranied and e@istin "nder the la)s of the ;hilippines. $t has three ro"psof employees cateoried as follo)s% &a' personnel on monthly basis, )ho receie their monthly salary "niformly thro"ho"t the year,irrespectie of the act"al n"mber of )orin days in a month )itho"t ded"ction for holidays0 &b' personnel on daily basis )ho are paid onact"al days )ored and they receie "n)ored holiday pay and &c' colleiate fac"lty )ho are paid on the basis of st"dent contract ho"r.!efore the start of the semester they sin contracts )ith the collee "ndertain to meet their classes as per sched"le.

Fnable to receie their correspondin holiday pay, as claimed, from 17/ to 177, priate respondent 3ational Alliance of Teachers andOffice 6orers &3ATO6' in behalf of the fac"lty and personnel of +ose Rial Collee filed )ith the Ministry of abor a complaint aainst thecollee for said alleed non(payment of holiday pay.

Issu&% )hether or not the school fac"lty )ho accordin to their contracts are paid per lect"re ho"r are entitled to "n)ored holiday pay

H&'(%5"bect holiday pay is proided for in the abor Code &;residential ?ecree 3o. 442, as amended', )hich reads%

Art. 4. Riht to holiday pay K &a' Eery )orer shall be paid his re"lar daily )ae d"rin re"lar holidays, e@cept in retail and sericeestablishments re"larly employin less than ten &1<' )orers0

&b' The employer may reH"ire an employee to )or on any holiday b"t s"ch employee shall be paid a compensation eH"ialent to t)ice hisre"lar rate0 ...>

and in the $mplementin R"les and Re"lations, R"le $D, !oo $$$, )hich reads%

5EC. -. 7oliday pay of certain employees. K &a' ;riate school teachers, incl"din fac"lty members of collees and "niersities, may notbe paid for the re"lar holidays d"rin semestral acations. They shall, ho)eer, be paid for the re"lar holidays d"rin Christmas acations....>

Fnder the foreoin proisions, apparently, the petitioner, altho"h a non(profit instit"tion is "nder obliation to ie pay een on "n)oredre"lar holidays to ho"rly paid fac"lty members s"bect to the terms and conditions proided for therein.

The Co"rt beliees that the aforementioned implementin r"le is not "stified by the proisions of the la) )hich after all is silent )ith respect

to fac"lty members paid by the ho"r )ho beca"se of their teachin contracts are oblied to )or and consent to be paid only for )oract"ally done &e@cept )hen an emerency or a fort"ito"s eent or a national need calls for the declaration of special holidays'. Re"larholidays specified as s"ch by la) are no)n to both school and fac"lty members as no class days0> certainly the latter do not e@pectpayment for said "n)ored days, and this )as clearly in their minds )hen they entered into the teachin contracts.

On the other hand, both the la) and the $mplementin R"les oernin holiday pay are silent as to payment on 5pecial ;"blic 8olidays.

$t is readily apparent that the declared p"rpose of the holiday pay )hich is the preention of dimin"tion of the monthly income of theemployees on acco"nt of )or interr"ptions is defeated )hen a re"lar class day is cancelled on acco"nt of a special p"blic holiday andclass ho"rs are held on another )orin day to mae "p for time lost in the school calendar. Other)ise stated, the fac"lty member, altho"hforced to tae a rest, does not earn )hat he sho"ld earn on that day. !e it noted that )hen a special p"blic holiday is declared, the fac"lty

/




member paid by the ho"r is depried of e@pected income, and it does not matter that the school calendar is e@tended in ie) of the days orho"rs lost, for their income that co"ld be earned from other so"rces is lost d"rin the e@tended days. 5imilarly, )hen classes are called off orshortened on acco"nt of typhoons, floods, rallies, and the lie, these fac"lty members m"st lie)ise be paid, )hether or not e@tensions areordered.

;REM$5E5 CO35$?ERE?, the decision of respondent 3ational abor Relations Commission is hereby set aside, and a ne) one is herebyRE3?ERE?%

&a' e(empting petitioner from payin ho"rly paid fac"lty members their pay for re"lar holidays, )hether the same be d"rin the reg!lar semesters of the school year or d"rin semestral, Christmas, or 8oly 6ee acations0

&b' b"t orderin petitioner to pay said fac"lty members their re"lar ho"rly rate on days declared as special holidays or for some reasonclasses are called off or shortened for the ho"rs they are s"pposed to hae ta"ht, )hether e@tensions of class days be ordered or not0 incase of e@tensions said fac"lty members shall lie)ise be paid their ho"rly rates sho"ld they teach d"rin said e@tensions.

INTERNATIONAL SCHOOL ALLIANCE O" EDUCATORS ?ISAE v. HON. LEONARDO A. UISUMBING )* )s $#-#$)t2 #s t&S&$&t#2 o/ L#o #*( E0-'o20&*t HON. CRESENCIANO B. TRA!ANO )* )s $#-#$)t2 #s t& A$t)*g S&$&t#2 o/ L#o #*(E0-'o20&*t DR. BRIAN MACCAULEY )* )s $#-#$)t2 #s t& Su-&)*t&*(&*t o/ I*t&*#t)o*#' S$oo'7M#*)'# #*( INTERNATIONALSCHOOL, INC.G.R. No. 1488+ !u*& 1, 4

"#$ts%;riate respondent $nternational 5chool, $nc. &the 5chool, for short', p"rs"ant to ;residential ?ecree 72, is a domestic ed"cationalinstit"tion established primarily for dependents of forein diplomatic personnel and other temporary residents.

The 5chool hires both forein and local teachers as members of its fac"lty, classifyin the same into t)o% &1' forein(hires and &2' local(hires.The 5chool employs fo"r tests to determine )hether a fac"lty member sho"ld be classified as a forein(hire or a local hire%

a. 6hat is one:s domicileLb. 6here is one:s home economyLc. To )hich co"ntry does one o)e economic alleianceLd. 6as the indiid"al hired abroad specifically to )or in the 5chool and )as the 5chool responsible for brinin that indiid"al to the

;hilippinesL

5ho"ld the ans)er to any of these H"eries point to the ;hilippines, the fac"lty member is classified as a local hire0 other)ise, he or she isdeemed a forein(hire.

The 5chool rants forein(hires certain benefits not accorded local(hires. These incl"de ho"sin, transportation, shippin costs, ta@es, andhome leae trael allo)ance. 9orein(hires are also paid a salary rate t)enty(fie percent &2/N' more than local(hires. The 5chool "stifiesthe difference on t)o sinificant economic disadantaes> forein(hires hae to end"re, namely% &a' the dislocation factor> and &b' limitedten"re.

Issu&% )hether the point(of(hire classification employed by the 5chool is discriminatory to 9ilipinos and that the rant of hiher salaries to forein(hires constit"tes racial discrimination

H&'(%Bes. The employer in this case has failed to dischare this b"rden. There is no eidence here that forein(hires perform 2/N more efficientlyor effectiely than the local(hires. !oth ro"ps hae similar f"nctions and responsibilities, )hich they perform "nder similar )orinconditions. The 5chool cannot inoe the need to entice forein(hires to leae their domicile to rationalie the distinction in salary rates

)itho"t iolatin the principle of eH"al )or for eH"al pay.

6hile the Co"rt reconies the need of the 5chool to attract forein(hires, salaries sho"ld not be "sed as an enticement to the pre"dice oflocal(hires. The local(hires perform the same serices as forein(hires and they o"ht to be paid the same salaries as the latter. 9or thesame reason, the dislocation factor> and the forein(hires: limited ten"re also cannot sere as alid bases for the distinction in salary rates.The dislocation factor and limited ten"re affectin forein(hires are adeH"ately compensated by certain benefits accorded them )hich are notenoyed by local(hires, s"ch as ho"sin, transportation, shippin costs, ta@es and home leae trael allo)ances.

*




ATO:7BIG @EDGE MINING CO., INC. v. ATO:7BIG @EDGE MUTUAL BENE"IT ASSOCIATIONG.R. No. L7456 M#$ 3, 193

"#$ts%?emand )as s"bmitted to petitioner by respondent "nion thro"h its officers for ario"s concession, amon )hich )ere &a' an increase of

;<./< in )aes, &b' comm"tation of sic and acation leae if not enoyed d"rin the year, &c' ario"s priilees, s"ch as free medical care,medicine, and hospitaliation, &d' riht to a closed shop, chec off, etc., &e' no dismissal )itho"t prior "st ca"se and )ith a priorinestiation, etc. 5ome of the demands, )ere ranted by the petitioner, and the other )ere reected, and so hearins )ere held andeidence s"bmitted on the latter. After the hearin the respondent co"rt rendered a decision, the most important proisions of )hich )erethose fi@in the minim"m )ae for the laborers at ;.2<, declarin that additional compensation representin efficiency bon"s sho"ld not beincl"ded as part of the )ae, and main the a)ard effectie from 5eptember 4, 1/<.

Issu&% )hether the efficiency bon"s paid the laborer sho"ld hae been incl"ded in his )ae

8eld%3o. 6hether or not bon"s forms part of )aes depends "pon the circ"mstances or condition for its payment. $f it is an additionalcompensation )hich the employer promised and areed to ie )itho"t any conditions imposed for its payment, s"ch as s"ccess of b"sinessor reater prod"ction or o"tp"t, then it is part of the )ae. !"t if it is paid only if profits are realied or a certain amo"nt of prod"ctiityachieed, it cannot be considered part of the )aes. $n the case at bar, it is not payable to all b"t to laborers only. $t is also paid on the basisof act"al prod"ction or act"al )or accomplished. $f the desired oal of prod"ction is not obtained or the amo"nt of act"al )oraccomplished, the bon"s does not accr"e. $t is eidence that "nder the circ"mstances it is paid only )hen the labor becomes more efficientor more prod"ctie. $t is only an ind"cement for efficiency, a prie therefor, not a part of the )ae.

RODUCERS BAN: O" THE HILIINES v. NATIONAL LABOR RELATIONS COMMISSION #*( RODUCERS BAN: EMLOYEESASSOCIATIONG.R. No. 151 M#$ 48, 41

"#$ts%;rod"cers !an of the ;hilippines, a banin instit"tion, has been proidin seeral benefits to its employees since 171 )hen it started itsoperation. Amon the benefits it had been re"larly iin is a mid(year bon"s eH"ialent to an employee:s one(month basic pay and a

Christmas bon"s eH"ialent to an employee:s one )hole month salary &basic pay pl"s allo)ance'.

6hen ;.?. -/1, the la) rantin a 1th month pay, too effect, the basic pay preio"sly bein ien as part of the Christmas bon"s )asapplied as compliance to it &;.?. -/1', the allo)ances remained as Christmas bon"s.

9rom 1-1 "p to 1-, the ban contin"ed iin one month basic pay as mid(year bon"s, one month basic pay as 1th month pay b"t theChristmas bon"s )as no loner based on the allo)ance b"t on the basic pay of the employees )hich is hiher.

$n the early part of 1-4, the ban )as placed "nder conseratorship b"t it still proided the traditional mid(year bon"s.

!y irt"e of an alleed Monetary !oard Resol"tion 3o. 1/**, ban only ae a one(half &1=2' month basic pay as compliance of the 1thmonth pay and none for the Christmas bon"s.

;riate respondent ar"es that the mid(year and Christmas bon"ses, by reason of their hain been ien for thirteen consec"tie years,hae ripened into a ested riht and, as s"ch, can no loner be "nilaterally )ithdra)n by petitioner )itho"t iolatin Article 1<< of;residential ?ecree 3o. 442 )hich prohibits the dimin"tion or elimination of benefits already bein enoyed by the employees. Altho"hpriate respondent concedes that the rant of a bon"s is discretionary on the part of the employer, it ar"es that, by reason of its lon andre"lar concession, it may become part of the employee:s re"lar compensation.

On the other hand, petitioner asserts that it cannot be compelled to pay the alleed bon"s differentials d"e to its depressed financialcondition, as eidenced by the fact that in 1-4 it )as placed "nder conseratorship by the Monetary !oard. Accordin to petitioner, its"stained losses in the mill ions of pesos from 1-4 to 1--, an assertion )hich )as affirmed by the labor arbiter. Moreoer, petitioner pointso"t that the collectie barainin areement of the parties does not proide for the payment of any mid(year or Christmas bon"s.

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Issu& K 1% )hether priate respondent is entitled to the bon"ses pay prayed for

H&'( K1%3o. A o*us is an amo"nt ranted and paid to an employee for his ind"stry and loyalty )hich contrib"ted to the s"ccess of the employer:sb"siness and made possible the realiation of profits. $t is an act of enerosity ranted by an enlihtened employer to sp"r the employee toreater efforts for the s"ccess of the b"siness and realiation of bier profits. The rantin of a bon"s is a manaement preroatie,

somethin ien in addition to )hat is ordinarily receied by or strictly d"e the recipient. Th"s, a bon"s is not a demandable and enforceableobliation, e@cept )hen it is made part of the )ae, salary or compensation of the employee.

8o)eer, an employer cannot be forced to distrib"te bon"ses )hich i t can no loner afford to pay. To hold other)ise )o"ld be to penalie theemployer for his past enerosity.

Issu& K4% )hether priate respondent is entitled to 1th month pay

H&'( K4%3o. ;? -/1 reH"ires all employers to pay their employees receiin a basic salary of not more than ; 1,<<< a month, reardless of thenat"re of the employment, a 1th month pay, not later than ?ecember 24 of eery year. 8o)eer, employers already payin their employeesa 1th month pay or its eH"ialent are not coered by the la). Fnder the Reised #"idelines on the $mplementation of the 1th Month ;aya), the term eH"ialent> shall be constr"ed to incl"de Christmas bon"s, mid(year bon"s, cash bon"ses and other payments amo"ntin tonot less than 1=12 of the basic salary. The intention of the la) )as to rant some relief ( not to all )orers ( b"t only to those not act"ally paida 1thmonth salary or )hat amo"nts to it, by )hateer name called. $t )as not enisioned that a do"ble b"rden )o"ld be imposed on theemployer already payin his employees a 1th month pay or its eH"ialent )hether o"t of p"re enerosity or on the basis of a bindinareement. To impose "pon an employer already iin his employees the eH"ialent of a 1th month pay )o"ld be to penalie him for hisliberality and in all probability, the employer )o"ld react by )ithdra)in the bon"ses or resist f"rther ol"ntary rants for fear that if and )hena la) is passed iin the same benefits, his prior concessions miht not be ien d"e credit.

$n the case at bar, een ass"min the tr"th of priate respondent:s claims reardin the payments receied by its members in the form of1th month pay, mid(year bon"s and Christmas bon"s, it is noted that, for each and eery year inoled, the total amo"nt ien by petitioner

)o"ld still e@ceed, or at least be eH"al to, one month basic salary and th"s, may be considered as an eH"ialent> of the 1thmonth paymandated by ;? -/1.

Issu& K 3% )hether priate respondent is entitled to holiday pay

H&'( K3%3o. The red"ction of the diisor to < &from 14' )as done for the sole p"rpose of increasin the employees: oertime pay, and )as notmeant to e@cl"de holiday pay from the monthly salary of petitioner:s employees. $n fact, it )as e@pressly stated in the inter(officememorand"m ( also referred to by priate respondent in its pleadins ( that the diisor of 14 )ill still be "sed in the comp"tation for cashconersion and in the determination of the daily rate. Th"s, based on the records of this case and the parties: o)n admissions, the Co"rtholds that petitioner has complied )ith the reH"irements of Article 4 of the abor Code.

HILIINE AGRICULTURAL COMMERCIAL AND INDUSTRIAL @OR:ERS UNION ?ACI@U7TUC v. NATIONAL LABORRELATIONS COMMISSION AND ALLACAR TRANSIT, INC.G.R. No. 1599+ August 1+, 199

"#$ts%;etitioner ;hilippine Aric"lt"ral Commercial and Aric"lt"ral 6orers Fnion K TFC; is the e@cl"sie barainin aent of the ran and fileemployees of respondent Dallacar Transit, $nc. ;etitioner "nion instit"ted a complaint )ith 3RC Reional Arbitration !ranch for payment of1th month pay in behalf of the driers and cond"ctors of respondent company:s Disayan operation on the ro"nd that altho"h said driersand cond"ctors are compensated on a p"rely commission> basis as described in their Collectie !arainin Areement &C!A', they area"tomatically entitled to the basic minim"m pay mandated by la) sho"ld said commission be less than their basic minim"m for - ho"rs )or.

Issu&% )hether or not the b"s driers and cond"ctors of respondent Dallacar Transit, $nc. are entitled to 1th month pay

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6ae a) had taen effect, the petitioners reH"ired their employees on board their essels, to pay the s"m of ;.4< for eery meal, )hile themasters and officers )ere not reH"ired to pay their meals and that beca"se Captain Carlos Asensi had ref"sed to yield to the eneralred"ction of salaries, the petitioners dismissed said captain )ho no) claims for reinstatement and the payment of bac )aes from?ecember 2/, 1/2, at the rate of ;/4<.<<, monthly.

5ince the beinnin of the operation of the petitioner:s b"siness, all the cre) of their essels hae been sinin shippin articles> in )hichare stated opposite their names, the salaries or )aes they )o"ld receie. All seamen, )hether members of the cre) or dec officers or

enineers, hae been f"rnished free meals by the ship o)ners or operators. All the shippin articles sined by the master and the cre)members, contained, amon others, a stip"lation, that in consideration of )hich serices to be d"ly performed, the said master herebyarees to pay to the said cre), as )aes, the s"ms aainst their names respectiely e@pressed in the contract0 and to s"pply them )ithproisions, and d"rin the d"ration of the contract the master of the essel )ill proide each member of the cre) s"ch daily s"bsistence asshall be m"t"ally areed daily "pon bet)een said master and cre)0 or, in lie" of s"ch s"bsistence the cre) may resere the riht to demandat the time of e@ec"tion of these articles that adeH"ate daily rations be f"rnished each member of the cre). $t is, therefore, apparent that,aside from the payment of the respectie salaries or )aes, set opposite the names of the cre) members, the petitioners bo"nd themselesto s"pply the cre) )ith ship:s proisions, daily s"bsistence or daily rations, )hich incl"de food.

This )as the sit"ation before A""st 4, 1/1, )hen the Minim"m 6ae a) became effectie. After this date, ho)eer, the companiesbean ded"ctin the cost of meals from the )aes or salaries of cre) members0 b"t no s"ch ded"ctions )ere made from the salaries of thedec officers and enineers in all the boats of the petitioners.

Issu&% )hether s"ch ded"ctions are leal

H&'(%3o. 5"ch ded"ctions are not a"thoried. $n the coast)ise b"siness of transportation of passeners and freiht, the men )ho compose thecomplement of a essel are proided )ith free meals by the shipo)ners, operators or aents, beca"se they hold on to their )or and d"ties,reardless of the stress and strain concomitant of a bad )eather, "nmindf"l of the daners that l"r ahead in the midst of the hih seas.>

$t is ar"ed that the food or meals ien to the dec officers, marine enineers and "nlicensed cre) members in H"estion, )ere merefacilities> )hich sho"ld be ded"cted from )aes, and not s"pplements> )hich sho"ld not be ded"cted from s"ch )aes.

Su--'&0&*ts, therefore, constit"te e@tra rem"neration or special priilees or benefits ien to or receied by the laborers oer and aboetheir ordinary earnins or )aes. "#$)')t)&s, on the other hand, are items of e@pense necessary for the laborer:s and his family:s e@istenceand s"bsistence so that by e@press proision of la), they form part of the )ae and )hen f"rnished by the employer are ded"ctible

therefrom, since if they are not so f"rnished, the laborer )o"ld spend and pay for them "st the same

$n short, the benefit or priilee ien to the employee )hich constit"tes an e@tra rem"neration aboe and oer his basic or ordinary earninor )ae, is s"pplement0 and )hen said benefit or priilee is part of the laborers: basic )aes, it is a facility. The criterion is not so m"ch )iththe ind of the benefit or item &food, lodin, bon"s or sic leae' ien, b"t its p"rpose. Considerin, therefore, that the meals )ere freelyien to cre) members prior to A""st 4, 1/1, )hile they )ere on the hih seas not as part of their )aes b"t as a necessary matter in themaintenance of the health and efficiency of the cre) personnel d"rin the oyae>, the ded"ctions therein made for the meals ien afterA""st 4, 1/1, sho"ld be ret"rned to them, and the operator of the coast)ise essels affected sho"ld contin"e iin the same benefit.

NORMA MABE;A v. NATIONAL LABOR RELATIONS COMMISSION, ETER NGHOTEL SUREMEG.R. No. 1186 A-)' 18, 1995

"#$ts%3orma Mabea contends that aro"nd the first )ee of May, 11, she and her co(employees at the 8otel 5"preme in !a"io City )ereased by the hotel:s manaement to sin an instr"ment attestin to the latter:s compliance )ith minim"m )ae and other labor standardproisions of la).

;etitioner sined the affidait b"t ref"sed to o to the City ;rosec"tor:s Office to s)ear to the eracity and contents of the affidait asinstr"cted by manaement. The affidait )as neertheless s"bmitted on the same day to the Reional Office of the ?epartment of abor andEmployment in !a"io City.

As leaned from the affidait, the same )as dra)n by manaement for the sole p"rpose of ref"tin findins of the abor $nspector of ?OE&in an inspection of respondent:s establishment on 9ebr"ary 2, 11' apparently aderse to the priate respondent.

1<<




After she ref"sed to proceed to the City ;rosec"tor:s Office K on the same day the affidait )as s"bmitted to the Cordillera Reional Officeof ?OE K petitioner aers that she )as ordered by the hotel manaement to t"rn oer the eys to her liin H"arters and to remoe herbelonins from the hotel premises. Accordin to her, respondent stronly chided her for ref"sin to proceed to the City ;rosec"tor:s Officeto attest to the affidait. 5he thereafter rel"ctantly filed a leae of absence from her ob )hich )as denied by manaement. 6hen sheattempted to ret"rn to )or on May 1<, 11, the hotel:s cashier, Mararita Choy, informed her that she sho"ld not report to )or and,instead, contin"e )ith her "nofficial leae of absence. ConseH"ently, on May 1, 11, three days after her attempt to ret"rn to )or,

petitioner filed a complaint for il leal dismissal before the Arbitration !ranch of the 3ational abor Relations Commission.

Issu& K1% )hether petitioner )as illeally dismissed

H&'( K1%Bes. The circ"mstances "pon )hich priate respondent anchored his claim that petitioner abandoned> her ob )ere not eno"h to constit"te

"st ca"se to sanction the termination of her serices "nder Article 2- of the abor Code. 9or abandonment to arise, there m"st beconc"rrence of t)o thins% 1' lac of intention to )or0 and 2' the presence of oert acts sinifyin the employee:s intention not to )or.

Respondent does not disp"te the fact that petitioner tried to file a leae of absence )hen she learned that the hotel manaement )asdispleased )ith her ref"sal to attest to the affidait. The fact that she made this attempt clearly indicates not an intention to abandon b"t anintention to ret"rn to )or after the period of her leae of absence, had it been ranted, shall hae e@pired.

9"rthermore, )hile absence from )or for a proloned period may s"est abandonment in certain instances, mere absence of one or t)odays )o"ld not be eno"h to s"stain s"ch a claim. The oert act &absence' o"ht to "nerrinly point to the fact that the employee has nointention to ret"rn to )or, 18 )hich is patently not the case here. $n fact, seeral days after she had been adised to tae an informal leae,petitioner tried to res"me )orin )ith the hotel, to no aail. $t )as only after she had been repeatedly reb"ffed that she filed a case for illealdismissal. These acts militate aainst the priate respondent:s claim that petitioner abandoned her ob.

Loss o/ $o*/)(&*$& sho"ld ideally apply only to cases inolin employees occ"pyin positions of tr"st and confidence or to thosesit"ations )here the employee is ro"tinely chared )ith the care and c"stody of the employer:s money or property. To the first class belonmanaerial employees, i.e., those ested )ith the po)ers or preroaties to lay do)n manaement policies and=or to hire, transfer, s"spend,lay(off, recall, dischare, assin or discipline employees or effectiely recommend s"ch manaerial actions0 and to the second class beloncashiers, a"ditors, property c"stodians, etc., or those )ho, in the normal and ro"tine e@ercise of their f"nctions, re"larly handle sinificantamo"nts of money or property.

$n the case at bar, the s"spicio"s delay in priate respondent:s filin of H"alified theft chares aainst petitioner lon after the latter e@posedthe hotel:s scheme &to aoid its obliations as employer "nder the abor Code' by her act of filin illeal dismissal chares aainst thepriate respondent )o"ld hardly )arrant serio"s consideration of loss of confidence as a alid ro"nd for dismissal.

Issu& K4% )hether or not the dismissal by the priate respondent of petitioner constit"tes an "nfair labor practice

H&'( K4%Bes. The piotal H"estion in any case )here "nfair labor practice on the part of the employer is alleed is )hether or not the employer hase@erted press"re, in the form of restraint, interference or coercion, aainst his employee:s riht to instit"te concerted action for better termsand conditions of employment. 6itho"t do"bt, the act of compellin employees to sin an instr"ment indicatin that the employer obseredlabor standards proisions of la) )hen he miht hae not, toether )ith the act of terminatin or coercin those )ho ref"se to cooperate

)ith the employer:s scheme constit"tes "nfair labor practice. The first act clearly preempts the riht of the hotel:s )orers to see better

terms and conditions of employment thro"h concerted action.

;araraph &f' of Article 24- of the abor Code distinctly maes it an "nfair labor practice to dismiss, dischare or other)ise pre"dice ordiscriminate aainst an employee for hain ien or bein abo"t to ie testimony.> 9or in not iin positie testimony in faor of heremployer, petitioner had resered not only her riht to disp"te the claim and proffer eidence in s"pport thereof b"t also to )or for betterterms and conditions of employment.

The labor arbiter accepted priate respondent:s bare claim that the reason the monetary benefits receied by petitioner bet)een 1-1 to1-7 )ere less than minim"m )ae )as beca"se petitioner did not factor in the meals, lodin, electric cons"mption and )ater she receiedd"rin the period in her comp"tations. #rantin that meals and lodin )ere proided and indeed constit"ted facilities, s"ch facilities co"ldnot be ded"cted )itho"t the employer complyin first )ith certain leal reH"irements. 6itho"t satisfyin these reH"irements, the employer

1<1




simply cannot ded"ct the al"e from the employee:s aes. 9irst, proof m"st be sho)n that s"ch facilities are c"stomarily f"rnished by thetrade. 5econd, the proision of ded"ctible facilities m"st be ol"ntarily accepted in )ritin by the employee. 9inally, facilities m"st be charedat fair and reasonable al"e.

These reH"irements )ere not met in the instant case. ;riate respondent failed to present any company policy or "ideline to sho) that themeal and lodin are part of the salary0 he failed to proide proof of the employee:s )ritten a"thoriation0 and, he failed to sho) ho) hearried at the al"ations.

More sinificantly, the food and lodin, or the electricity and )ater cons"med by the petitioner )ere not facilities b"t s"pplements. A benefitor priilee ranted to an employee for the conenience of the employer is not a facility. The criterion in main a distinction bet)een the t)onot so m"ch lies in the ind &food, lodin' b"t the p"rpose. Considerin, therefore, that hotel )orers are reH"ired to )or different shiftsand are e@pected to be aailable at ario"s odd ho"rs, their ready aailability is a necessary matter in the operations of a small hotel, s"chas the priate respondent:s hotel.

$t is therefore eident that petitioner is entitled to the payment of the deficiency in her )aes eH"ialent to the f"ll )ae applicable from May1, 1-- "p to the date of her illeal dismissal.

Additionally, petitioner is entitled to payment of serice incentie leae pay, emerency cost of liin allo)ance, niht differential pay, and1th month pay for the periods alleed by the petitioner as the priate respondent has neer been able to add"ce proof that petitioner )aspaid the aforestated benefits.

MAYON HOTEL < RESTAURANT, ACITA O. O #*(o !OSE"A O LAM v. ROLANDO ADANA, CHONA BUMALAY, ROGER BURCE,EDUARDO ALAMARES, AMADO ALAMARES, EDGARDO TORRE"RANCA, LOURDES CAMIGLA, TEODORO LAURENARIA,@ENE"REDO LOERES, LUIS GUADES, AMADO MACANDOG, ATERNO LLARENA, GREGORIO NICERIO, !OSE ATRACTIO,MIGUEL TORRE"RANCA, #*( SANTOS BROOLAG.R. No. 1563+ M#2 16, 4

"#$ts%;etitioner Mayon 8otel Resta"rant is a sinle proprietor b"siness reistered in the name of petitioner ;acita O. ;o, )hose mother,petitioner +osefa ;o am, manaes the establishment. The hotel and resta"rant employed abo"t 1* employees.

?"e to the e@piration and non(rene)al of the lease contract for the rented space occ"pied by the said hotel and resta"rant at Rial 5treet,the hotel operations of the b"siness )ere s"spended on March 1, 17. The operation of the resta"rant )as contin"ed in its ne) location at

Eliondo 5treet, eapi City, )hile )aitin for the constr"ction of a ne) Mayon 8otel Resta"rant at ;earanda 5treet, eapi City. Only of the 1* employees contin"ed )orin in the Mayon Resta"rant at its ne) site.

The 1* employees filed complaints for "nderpayment of )aes and other money claims aainst petitioners.

Issu& K1%6ere respondents oeres, #"ades, Macando, Atractio, larena and 3icerio illeally dismissedL

H&'( K1%Bes. 6hile the $'osu& of the hotel operations in April of 17 may hae been temporary, )e hold that the eidence on record belie anyclaim of petitioners that the '#27o// of respondents on that same date )as merely temporary. On the contrary, )e find s"bstantial eidencethat petitioners intended the termination to be permanent. ")st, respondents oeres, Macando, larena, #"ades, 3icerio and Alamaresfiled the complaint for illeal dismissal )00&()#t&'2 #/t& the clos"re of the hotel operations in Rial 5treet, not)ithstandin the alleed

temporary nat"re of the clos"re of the hotel operations, and petitioners: alleations that the employees assined to the hotel operations ne)abo"t this beforehand. S&$o*(, in their position paper s"bmitted to the abor Arbiter, petitioners inoed Article 2-* of the abor Code toassert that the employer(employee relationship )as merely s"spended, and therefore the claim for separation pay )as premat"re and

)itho"t leal or fact"al basis. But t&2 0#(& *o 0&*t)o* o/ #*2 )*t&*t to &$#'' t&s& &s-o*(&*ts to o> u-o* $o0-'&t)o* o/ t&*& -&0)s&s. T)(, the ario"s pleadins on record sho) that petitioners held respondents, partic"larly oeres, as responsible formismanaement of the establishment and for ab"se of tr"st and confidence. ;etitioner +osefa ;o am:s affidait on +"ly 21, 1-, fore@ample, sH"arely blamed respondents, specifically oeres, !"malay and Camila, for ab"sin her leniency and ca"sin petitioner Mayon8otel Resta"rant to s"stain contin"o"s losses "ntil it is closed.> 5he then asserts that respondents are not entitled to separation pay forthey )ere not terminated and if eer the b"siness ceased to operate it )as beca"se of losses.> Aain, petitioners mae the same alleationin their memorand"m on appeal )ith the 3RC, )here they alleed that years prior to the e@piration of the lease in 17, the operation ofthe 8otel had been s"stainin consistent losses, and these )ere solely attrib"ted to respondents, b"t most especially d"e to oeres:s

1<2




mismanaement and ab"se of petitioners: tr"st and confidence. Een the petition filed in this co"rt made reference to the separation of therespondents d"e to seere financial losses and reerses,> aain imp"tin it to respondents: mismanaement. The ehemence of petitioners:acc"sation of mismanaement aainst respondents, especially aainst oeres, is inconsistent )ith the desire to recall them to )or."out, petitioners: memorand"m on appeal also aerred that the case )as filed not beca"se of the b"siness bein operated by them orthat they )ere s"pposedly not receiin benefits from the abor Code )hich is tr"e, b"t beca"se of the fact that t& sou$& o/ t&)')v&')oo(, &t& '&g#' o )00o#', #s sto--&( o* M#$ 31, 1995 , )hen the o)ner of the b"ildin terminated the ease Contract.>9ifth, petitioners had inconsistencies in their pleadins &)ith the 3RC, CA and )ith this Co"rt' in referrin to the clos"re, i.e., in the petition

filed )ith this co"rt, they assert that there is no illeal dismissal beca"se there )as only a temporary cessation or s"spension of operationsof the hotel and resta"rant d"e to circ"mstances beyond the control of petitioners, and that is, the non(rene)al of the lease contract...> Andyet, in the same petition, they also assert that% &a' the separation of respondents )as d"e to seere financial losses and reerses leadin tot& $'osu& o/ t& us)*&ss0 and &b' -&t)t)o*& ;acita ;o #( to $'os& so- and )as banr"pt and has no liH"idity to p"t "p her o)nb"ildin to ho"se Mayon 8otel Resta"rant. S)t, and finally, the "ncontroerted findin of the abor Arbiter that petitioners terminated allthe other respondents, by not employin them )hen the 8otel and Resta"rant transferred to its ne) site on ;earanda 5treet. $ndeed, in thissame memorand"m, petitioners referred to all respondents as former employees of Mayon 8otel Resta"rant.

These factors may be inconcl"sie indiid"ally, b"t )hen taen toether, they lead "s to concl"de that petitioners really intended to dismissall respondents and merely "sed the termination of the lease &on Rial 5treet premises' as a means by )hich they co"ld terminate theiremployees.

The Co"rt )as not impressed by petitioners: claim that seere b"siness losses "stified their fail"re to reinstate respondents. The eidence toproe this fact is inconcl"sie. !"t more important, serio"s b"siness losses do not e@c"se the employer from complyin )ith the clearance orreport reH"ired "nder Article 2- of the abor Code and its implementin r"les before terminatin the employment of its )orers. $n theabsence of "stifyin circ"mstances, the fail"re of petitioners to obsere the proced"ral reH"irements set o"t "nder Article 2-4, taints theiract"ations )ith bad faith, especially since they claimed that they hae been e@periencin losses in the three years before 17. To say theleast, if it )ere tr"e that the lay(off )as temporary b"t then serio"s b"siness losses preented the reinstatement of respondents, thenpetitioners sho"ld hae complied )ith the reH"irements of )ritten notice. The reH"irement of la) mandatin the iin of notices )asintended not only to enable the employees to loo for another employment and therefore ease the impact of the loss of their obs and thecorrespondin income, b"t more importantly, to ie the ?epartment of abor and Employment &?OE' the opport"nity to ascertain the erityof the alleed a"thoried ca"se of termination.

6hile the Co"rt reconies the riht of the employer to terminate the serices of an employee for a "st or a"thoried ca"se, the dismissal ofemployees m"st be made )ithin the parameters of la) and p"rs"ant to the tenets of fair play. And in termination disp"tes, the b"rden ofproof is al)ays on the employer to proe that the dismissal )as for a "st or a"thoried ca"se. 6here there is no sho)in of a clear, alidand leal ca"se for termination of employment, the la) considers the case a matter of illeal dismissal.

The Co"rt therefore reinstate the abor Arbiter:s decision )ith the follo)in modifications%

&a' 5eparation pay for the illeal dismissal of respondents oeres, Macando and larena0 &5antos !roola cannot be rantedseparation pay as he made no s"ch claim'0

&b' ' Retirement pay for respondents #"ades, 3icerio, and Alamares, )ho at the time of dismissal )ere entitled to their retirementbenefits p"rs"ant to Article 2-7 of the abor Code as amended0 and

&c' ?amaes for respondents oeres, Macando, larena, #"ades, 3icerio, Atractio, and !roola.

Issu& K4%Are respondents entitled to their money claims d"e to "nderpayment of )aes, and nonpayment of holiday pay, rest day premi"m, 5$;,COA, oertime pay, and niht shift differential payL

H&'( K4%Bes. Respondents hae set o"t )ith partic"larity in their complaint, position paper, affidaits and other doc"ments the labor standard benefitsthey are entitled to, and )hich they alleed that petitioners hae failed to pay them. $t )as therefore petitioners: b"rden to proe that theyhae paid these money claims.

The doc"ments petitioners s"bmitted, i.e., affidaits e@ec"ted by some of respondents d"rin an oc"lar inspection cond"cted by an inspectorof the ?OE0 notices of inspection res"lt and 9acility Eal"ation Orders iss"ed by ?OE, are not s"fficient to proe payment. ?espiterepeated orders from the abor Arbiter, petitioners failed to s"bmit the pertinent employee files, payrolls, records, remittances and othersimilar doc"ments )hich )o"ld sho) that respondents rendered )or entitlin them to payment for oertime )or, niht shift differential,premi"m pay for )or on holidays and rest day, and payment of these as )ell as the COA and the 5$; G doc"ments )hich are not inrespondents: possession b"t in the c"stody and absol"te control of petitioners !y choosin not to f"lly and completely disclose information

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and present the necessary doc"ments to proe payment of labor standard benefits d"e to respondents, petitioners failed to dischare theb"rden of proof. $ndeed, petitioners: fail"re to s"bmit the necessary doc"ments )hich as employers are in their possession, in spite of ordersto do so, ies rise to the pres"mption that their presentation is pre"dicial to its ca"se.

;etitioners ne@t claim that the cost of the food and snacs proided to respondents as facilities sho"ld hae been incl"ded in reconin thepayment of respondents: )aes. They state that altho"h on the s"rface respondents appeared to receie minimal )aes, petitioners hadranted respondents other benefits )hich are considered part and parcel of their )aes and are allo)ed "nder e@istin la)s. They claim that

these benefits mae "p for )hateer inadeH"acies there may be in compensation.

The cost of meals and snacs p"rportedly proided to respondents cannot be ded"cted as part of respondents: minim"m )ae.

Een rantin that meals and snacs )ere proided and indeed constit"ted facilities, s"ch facilities co"ld not be ded"cted )itho"tcompliance )ith certain leal reH"irements. As stated in M#&# v. NLRC, the employer simply cannot ded"ct the al"e from the employee:s

)aes )itho"t satisfyin the follo)in% &a' proof that s"ch facilities are c"stomarily f"rnished by the trade0 &b' the proision of ded"ctiblefacilities is ol"ntarily accepted in )ritin by the employee0 and &c' the facilities are chared at fair and reasonable al"e. The records areclear that petitioners failed to comply )ith these reH"irements. There )as no proof of respondents: )ritten a"thoriation. $ndeed, the aborArbiter fo"nd that )hile the respondents admitted that they )ere ien meals and merienda, the H"ality of food sered to them )as not )hat

)as proided for in the 9acility Eal"ation Orders and it )as only )hen they filed the cases that they came to no) of this s"pposed 9acilityEal"ation Orders. ;etitioner +osefa ;o am herself #(0)tt&( that she did not inform the respondents of the facilities she had applied for.

More important, )e note the "ncontroerted testimony of respondents on record that they )ere reH"ired to eat in the hotel and resta"rant sothat they )ill not o home and there is no interr"ption in the serices of Mayon 8otel Resta"rant. As r"led in M#&#, food or snacs orother conenience proided by the employers are deemed as s"pplements if they are ranted for the conenience of the employer. Thecriterion in main a distinction bet)een a s"pplement and a facility does not so m"ch lie in the ind &food, lodin' b"t the p"rpose.Considerin, therefore, that hotel )orers are reH"ired to )or different shifts and are e@pected to be aailable at ario"s odd ho"rs, theirready aailability is a necessary matter in the operations of a small hotel, s"ch as petitioners: b"siness. The ded"ction of the cost of mealsfrom respondents: )aes, therefore, sho"ld be remoed.

SEILLA TRADING COMANY v. A..A. TOMAS E. SEMANA, SEILLA TRADING @OR:ERS UNIONSUERG.R. No. 14+6 A-)' 48, 4+

"#$ts%9or t)o to three years prior to 1, petitioner 5eilla Tradin Company &5eilla Tradin, for short', a domestic corporation enaed in

tradin b"siness, oranied and e@istin "nder ;hilippine la)s, added to the base fi"re, in its comp"tation of the 1th(month pay of itsemployees, the amo"nt of other benefits receied by the employees )hich are beyond the basic pay. These benefits incl"ded%

&a' Oertime premi"m for re"lar oertime, leal and special holidays0&b' eal holiday pay, premi"m pay for special holidays0&c' 3iht premi"m0&d' !ereaement leae pay0&e' Fnion leae pay0&f' Maternity leae pay0&' ;aternity leae pay0&h' Company acation and sic leae pay0 and&i' Cash conersion of "n"sed company acation and sic leae

;etitioner then effected a chane in the comp"tation of the thirteenth month pay, as follo)s%1th(month pay Y net basic pay

12 months

)here%net basic pay Y ross pay G &non(basic pay or other benefits'

3o) e@cl"ded from the base fi"re "sed in the comp"tation of the thirteenth month pay are the follo)in%a' Oertime premi"m for re"lar oertime, leal and special holidays0b' eal holiday pay, premi"m pay for special holidays0c' 3iht premi"m0

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http://www.lawphil.net/judjuris/juri1997/apr1997/gr_118506_1997.html




d' !ereaement leae pay0e' Fnion leae pay0f' Maternity leae pay0' ;aternity leae pay0h' Company acation and sic leae pay0 andi' Cash conersion of "n"sed acation=sic leae.

8ence, the ne) comp"tation red"ced the employees: thirteenth month pay. The daily piece(rate )orers represented by priate respondent5eilla Tradin 6orers Fnion G 5F;ER &Fnion, for short', a d"ly oranied and reistered "nion, thro"h the #rieance Machinery in theirCollectie !arainin Areement, contested the ne) comp"tation and red"ction of their thirteenth month pay.

Issu&% )hether or not the e@cl"sion of leaes and other related benefits in the comp"tation of 1th(month pay is alid

H&'(%3o. Fnder ;residential ?ecree -/1 and its implementin r"les, the basic salary of an employee is "sed as the basis in the determination ofhis 1th(month pay. Any compensations or rem"nerations )hich are deemed not part of the basic pay is e@cl"ded as basis in thecomp"tation of the mandatory bon"s.

Fnder the R"les and Re"lations $mplementin ;residential ?ecree -/1, the follo)in compensations are deemed not part of the basicsalary%

a' Cost(of(liin allo)ances ranted p"rs"ant to ;residential ?ecree /2/ and etter of $nstr"ction 3o. 1740b' ;rofit sharin payments0c' All allo)ances and monetary benefits )hich are not considered or interated as part of the re"lar basic salary of the employee at

the time of the prom"lation of the ?ecree on ?ecember 1*, 17/.

Fnder a later set of 5"pplementary R"les and Re"lations $mplementin ;residential ?ecree -/1 iss"ed by the then abor 5ecretary !lasOple, overtime pay, earnings and other rem!nerations are e@cl"ded as part of the basic salary and in the comp"tation of the 1th(month pay.

The e@cl"sion of cost(of(liin allo)ances "nder ;residential ?ecree /2/ and etter of $nstr"ction 3o. 174 and profit sharin paymentsindicate the intention to strip basic salary of other payments )hich are properly considered as frine> benefits. ie)ise, the catch(alle@cl"sionary phrase all allo)ances and monetary benefits )hich are not considered or interated as part of the basic salary> sho)s also theintention to strip basic salary of any and all additions )hich may be in the form of allo)ances or frine> benefits.

Moreoer, the 5"pplementary R"les and Re"lations $mplementin ;residential ?ecree -/1 is een more empathic in declarin thatearnins and other rem"nerations )hich are not part of the basic salary shall not be incl"ded in the comp"tation of the 1th(month pay.

9rom 17/ to 1-1, petitioner had freely, ol"ntarily and contin"o"sly incl"ded in the comp"tation of its employees: thirteenth month pay, )itho"t the payments for sic, acation and maternity leae, premi"m for )or done on rest days and special holidays, and pay for re"larholidays. The considerable lenth of time the H"estioned items had been incl"ded by petitioner indicates a "nilateral and ol"ntary act on itspart, s"fficient in itself to neate any claim of mistae.

A company practice faorable to the employees had indeed been established and the payments made p"rs"ant thereto, ripened into benefitsenoyed by them. And any benefit and s"pplement bein enoyed by the employees cannot be red"ced, diminished, discontin"ed oreliminated by the employer, by irt"e of 5ec. 1< of the R"les and Re"lations $mplementin ;.?. 3o. -/1, and Art. 1<< of the abor Code ofthe ;hilippines )hich prohibit the dimin"tion or elimination by the employer of the employees: e@istin benefits.

$n the case at bar, -&t)t)o*& S&v)''# T#()*g >&-t t& -#$t)$& o/ )*$'u()*g *o*7#s)$ &*&/)ts su$ #s -#)( '&#v&s /o u*us&( s)$>'&#v& #*( v#$#t)o* '&#v& )* t& $o0-ut#t)o* o/ t&) 13t70o*t -#2 /o #t 4 2&#s. T)s, & u'& ')>&)s& $o*st)tut&s vo'u*t#2&0-'o2& -#$t)$& )$ $#**ot & u*)'#t&#''2 )t(#* 2 t& &0-'o2& )tout v)o'#t)*g At. 1 o/ t& L#o Co(&%

At. 1. -rohi'ition against elimination or diminution of 'enefits . Not)*g )* t)s Boo> s#'' & $o*stu&( to &')0)*#t& o )* #*2 #2 ()0)*)s su--'&0&*ts, o ot& &0-'o2&& &*&/)ts &)*g &*o2&( #t t& t)0& o/ -o0u'g#t)o* o/ t)s Co(&.

AG7ASA STEEL @OR:S, INC. v. COURT O" AEALS, "ORMER SIFTH DIISION #*( AG7ASA STEEL @OR:ERS UNION [email protected]. No. 1666+5 M#$ 31, 46

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"#$ts%;etitioner ;a(Asa 5teel 6ors, $nc. is a corporation d"ly oranied and e@istin "nder ;hilippine la)s and is enaed in the man"fact"re ofsteel bars and )ire rods. ;a(Asa 5teel 6orers Fnion is the d"ly a"thoried barainin aent of the ran(and(file employees of petitioner.

On +an"ary -, 1-, the Reional Tripartite 6aes and ;rod"ctiity !oard &6ae !oard' of the 3ational Capital Reion &3CR' iss"ed 6aeOrder 3o. 3CR(<*.2 $t proided for an increase of ;1.<< per day in the salaries of employees receiin the minim"m )ae, and a

conseH"ent increase in the minim"m )ae rate to ;1-.<< per day. ;etitioner and the Fnion neotiated on ho) to o abo"t the )aead"stments. ;etitioner for)arded a letter to the Fnion )ith the list of the salary ad"stments of the ran(and(file employees after theimplementation of 6ae Order 3o. 3CR(<*, and the notation that said ad"stments )ere in accordance )ith the form"la ItheyJ haedisc"ssed and )ere desined so as no distortion shall res"lt from the implementation of 6ae Order 3o. 3CR(<*.>

On 5eptember 2, 1, petitioner and the Fnion entered into a Collectie !arainin Areement &C!A', effectie +"ly 1, 1 "ntil +"ly 1,2<<4. 5ection 1, Article D$ &5alaries and 6ae' of said C!A proides%

5ection 1. 6A#E A?+F5TME3T ( The COM;A3B arees to rant all the )orers, )ho are already re"lar and coered by thisA#REEME3T at the effectiity of this A#REEME3T, a eneral )ae increase as follo)s%

+"ly 1, 1 . . . . . . . . . . . ;1/.<< per day per employee+"ly 1, 2<<< . . . . . . . . . . . ;2/.<< per day per employee+"ly 1, 2<<1 . . . . . . . . . . . ;<.<< per day per employee.>

The aforesaid )ae increase shall be implemented across the board. Any 6ae Order to be implemented by the Reional Tripartite 6aeand ;rod"ctiity !oard shall be in addition to the )ae increase aderted to aboe. 8o)eer, if no )ae increase is ien by the 6ae!oard )ithin si@ &*' months from the sinin of this A#REEME3T, the Manaement is )illin to ie the follo)in increases, to )it%

+"ly 1, 1 . . . . . . . . . . . ;2<.<< per day per employee+"ly 1, 2<<< . . . . . . . . . . . ;2/.<< per day per employee+"ly 1, 2<<1 . . . . . . . . . . . ;<.<< per day per employee

On October 14, 1, 6ae Order 3o. 3CR(<77 )as iss"ed, and on October 2*, 1, its $mplementin R"les and Re"lations. $t proidedfor a ;2/./< per day increase in the salary of employees receiin the minim"m )ae and increased the minim"m )ae to;22./< per day.;etitioner paid the ;2/./< per day increase to all of its ran(and(file employees.

On +"ly 1, 2<<<, the ran(and(file employees )ere ranted the second year increase proided in the C!A in the amo"nt of ;2/.<< per day.

On 3oember 1, 2<<<, 6ae Order 3o. 3CR(<- too effect. 5ection 1 thereof proides%

5ection 1. Fpon the effectiity of this 6ae Order, priate sector )orers and employees in the 3ational Capital Reion receiin theprescribed daily minim"m )ae rate of ;22./< shall receie an increase of T6E3TB 5$Q ;E5O5 and 9$9TB CE3TADO5 &;2*./<' per day,thereby settin the ne) minim"m )ae rate in the 3ational Capital Reion at T6O 8F3?RE? 9$9TB ;E5O5 &;2/<.<<' per day.>

Then Fnion president "cenio !rin reH"ested petitioner to implement the increase "nder 6ae Order 3o. 3CR(<- in faor of the company:sran(and(file employees. ;etitioner reected the reH"est, claimin that since none of the employees )ere receiin a daily salary rate lo)erthan ;2/<.<< and there )as no )ae distortion, it )as not oblied to rant the )ae increase.

Issu&%

)hether or not the company )as oblied to rant the )ae increase "nder 6ae Order 3o. 3CR(<- as a matter of practice

H&'(%3o. ;etitioner is not oblied to rant the )ae increase "nder 6ae Order 3o. 3CR(<- either by irt"e of the C!A, or as a matter ofcompany practice.

6ae Order 3o. 3CR(<- specifically proides that only those in the priate sector in the 3CR receiin the prescribed daily minim"m )aerate of ;22.<< per day )o"ld receie an increase of ;2*./< a day, thereby settin the ne) minim"m )ae rate in said reion to ;2/<.<<per day. There is no disp"te that, )hen the order )as iss"ed, the lo)est paid employee of petitioner )as receiin a )ae hiher than;2/<.<< a day. As s"ch, its employees had no riht to demand for an increase "nder said order.

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L#27o// is a temporary termination initiated by the employer, b"t )itho"t pre"dice to the reinstatement or recall of the )orers )ho haebeen temporarily separated. The reasons for layin off employees are aried% lac of )or, sh"tdo)n for repairs, b"siness reerses, and thelie. Al)ays, ho)eer, there is the e@pectation that the employees )ho hae been laid off )ill be recalled or rehired. This sit"ation isoerned by R"le $, 5ection 12, of !oo D$ of the $mplementin R"les and Re"lations of the abor Code, )hich proides%

5ec. 12. 5"spension of Relationship. K The employer(employee relationship shall be deemed s"spended in case of s"spension ofoperation of the b"siness or "ndertain of the employer for a period not e@ceedin si@ &*' months. ...>

9rom +"ne 2, 11 "p to the time the complainant(appellee filed her complaint on +an"ary 21, 12, there )as more than * months thatalready elapsed and yet, the appellant failed to recall the appellee to let her res"me )orin. $f the appellant )as not yet in a possession torecall or reinstate the appellee after * months, "p to )hen shall appellant let her eep in )aitin. Of co"rse, she cannot be allo)ed to )aitinterminably. That is the reason )hy the la) imposes a period of * months )ithin )hich the res"mption of employer(employee relationshipm"st be res"med in temporary lay(offs.

$n the absence of )ae rates based on time and motion st"dies determined by the labor secretary or s"bmitted by the employer to the laborsecretary for his approal, )ae rates of piece(rate )orers m"st be based on the applicable daily minim"m )ae determined by theReional Tripartite 6aes and ;rod"ctiity Commission. To ens"re the payment of fair and reasonable )ae rates, Article 1<1 of the aborCode proides that the 5ecretary of abor shall re"late the payment of )aes by res"lts, incl"din pa$yao, piece)or and other nontime

)or.> The same stat"tory proision also states that the )ae rates sho"ld be based, preferably, on time and motion st"dies, or those arriedat in cons"ltation )ith representaties of )orers: and employers: oraniations. $n the absence of s"ch prescribed )ae rates for piece(rate

)orers, the ordinary minim"m )ae rates prescribed by the Reional Tripartite 6aes and ;rod"ctiity !oards sho"ld apply. This is incompliance )ith 5ection - of the R"les $mplementin 6ae Order 3os. 3CR(<2 and 3CR(<2(A K the preailin )ae order at the time ofdismissal of priate respondent, i%

5ec. -. <or$ers +aid by Res!lts. K a' All )orers paid by res"lts incl"din those )ho are paid on piece )or, taay, paya), or tas basis,shall receie not less than the applicable minim"m )ae rates prescribed "nder the Order for the normal )orin ho"rs )hich shall note@ceed - ho"rs )or a day, or a proportion thereof for )or of less than the normal )orin ho"rs.

The ad"sted minim"m )ae rates for )orers paid by res"lts shall be comp"ted in accordance )ith the follo)in steps%

1' /mo!nt of increase in /'< ( 0>> Y N increase ;reio"s AM62' E@istin rate=piece @ N increase Y increase in rate=piece0' E@istin rate=piece [ increase in rate=piece Y ad"sted rate=piece.

b' The )ae rates of )orers )ho are paid by res"lts shall contin"e to be established in accordance )ith Art. 1<1 of the abor Code, asamended and its implementin re"lations.>

On 3oember 2, 11, priate respondent )as orally informed of the termination of her employment. 6ae Order 3o. 3CR(<2, in effect atthe time, set the minim"m daily )ae for non(aric"lt"ral )orers lie priate respondent at ;11-.<<. This )as the rate "sed by the laborarbiter in comp"tin the separation pay of priate respondent.

Moreoer, since petitioner employed piece(rate )orers, it sho"ld hae inH"ired from the secretary of labor abo"t their prescribed specific )ae rates. $n any eent, there bein no s"ch prescribed rates, petitioner, after cons"ltation )ith its )orers, sho"ld hae s"bmitted for thelabor secretary:s approal time and motion st"dies as basis for the )ae rates of its employees. This responsibility of the employer is clear"nder 5ection -, R"le D$$, !oo $$$ of the Omnib"s R"les $mplementin the abor Code%

5ec. -. +ayment by res!lt . &a' On petition of any interested party, or "pon its initiatie, the ?epartment of abor shall "se all aailable

deices, incl"din the "se of time and motion st"dies and cons"ltations )ith representaties of employers: and )orers: oraniations, todetermine )hether the employees in any ind"stry or enterprise are bein compensated in accordance )ith the minim"m )ae reH"irementsof this R"le.

&b' The basis for the establishment of rates for piece, o"tp"t or contract )or shall be the performance of an ordinary )orer of minim"msill or ability.

&c' An ordinary )orer of minim"m sill or ability is the aerae )orer of the lo)est prod"cin ro"p representin /<N of the total n"mberof employees enaed in similar employment in a partic"lar establishment, e@cl"din learners, apprentices and handicapped )orersemployed therein.

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&d' 6here the o"tp"t rates established by the employer do not conform )ith the standards prescribed herein, or )ith the rates prescribed bythe ?epartment of abor in an appropriate order, the employees shall be entitled to the difference bet)een the amo"nt to )hich they areentitled to receie "nder s"ch prescribed standards or rates and that act"ally paid them by employer.>

$n the present case, petitioner as the employer "nH"estionably failed to dischare the foreoin responsibility. ;etitioner did not s"bmit to thesecretary of labor a proposed )ae rate K based on time and motion st"dies and reached after cons"ltation )ith the representaties fromboth )orers: and employers: oraniation K )hich )o"ld hae applied to its piece(rate )orers. 6itho"t those s"bmissions, the labor

arbiter had the d"ty to "se the daily minim"m )ae rate for non(aric"lt"ral )orers preailin at the time of priate respondent:s dismissal,as prescribed by the Reional Tripartite 6aes and ;rod"ctiity !oards.

$t is clear, therefore, that the applicable minim"m )ae for an eiht(ho"r )orin day is the basis for the comp"tation of the separation pay ofpiece(rate )orers lie priate respondent. Th"s, the labor arbiter correctly "sed the f"ll amo"nt of ;11-.<< per day in comp"tin priaterespondent:s separation pay. The Co"rt arees )ith the follo)in comp"tation%

Considerin therefore that complainant had been laid(off for more than si@ &*' months no), )e stronly feel that it is already reasonable forthe respondent to pay the complainant her separation pay of one month for eery year of serice, a fraction of si@ &*' months to beconsidered as one )hole year. 5eparation pay sho"ld be comp"ted based on her minim"m salary as )ill be determined here"nder.

5eparation pay 1 month Y 1* years;11-.<< @ 2* @ 1* years Y ;4,<--.<<.

The amo"nt ;11-.<<> represents the applicable daily minim"m )ae per 6ae Order 3os. 3CR(<2 and 3CR(<2(A0 2*>, the n"mber of )orin days in a month after e@cl"din the fo"r 5"ndays )hich are deemed rest days0 1*>, the total n"mber of years spent by priaterespondent in the employ of petitioner.

Issu& K4%8o) sho"ld the separation pay be comp"tedL

H&'( K4%;etitioner H"estions not only the basis for comp"tin priate respondent:s monthly )ae0 it also contends that priate respondent:sseparation pay sho"ld not hae been comp"ted at one month:s pay for eery year of serice. !eca"se priate respondent sho"ld beconsidered retrenched, the separation pay sho"ld be one month:s pay or at least one=half &1=2' month pay for eery year of serice,

)hicheer is hiher, and not one &1' month:s pay for eery year of serice as p"blic respondent had r"led.>

$n this case, p"blic respondent held that priate respondent )as constr"ctiely dismissed, p"rs"ant to Article 2-* of the abor Code )hichreads%

Art. 2-*. 6hen employment not deemed terminated. K The bonafide s"spension of the operation of a b"siness or "ndertain for a periodnot e@ceedin si@ &*' months, or the f"lfillment by the employee of a military or ciic d"ty shall not terminate employment. $n all s"ch cases,the employer shall reinstate the employee to his former position )itho"t loss of seniority rihts if he indicates his desire to res"me his )ornot later that one &1' month from his res"mption of operations of his employer or from his relief from the military or ciic d"ty.>

;riate respondent, ho)eer, neither ased for reinstatement nor appealed from the labor arbiter:s findin that she )as not illeallydismissed0 she merely prayed for the rant of her monetary claims. Th"s, )e s"stain the a)ard of separation pay made by p"blicrespondent, for employees constr"ctiely dismissed are entitled to separation pay.

9"rthermore, the Co"rt cannot s"stain petitioner:s claim that priate respondent )as retrenched. 9or retrenchment to be considered a

ro"nd for termination, the employer m"st sere a )ritten notice on the )orers and the ?epartment of abor and Employment at least onemonth before the intended date thereof. ;etitioner did not comply )ith this reH"irement.

"RAN:LIN BAGUIO AND 1 OTHERS, BONI"ACIO IGOT AND 6 OTHERS, ROY MAGALLANES AND + OTHERS, CLAUDIO BONGO,EDUARDO ANDALES #*( + OTHERS v. NATIONAL LABOR RELATIONS COMMISSION ?3( DIISION, GENERAL MILLINGCORORATION #*(o "ELICIANO LUOG.R. No. 59+78 O$to& +, 1991

"#$ts%

111




;riate respondent 9eliciano F;O, a b"ildin contractor, entered into a contract )ith #MC, a domestic corporation enaed in flo"r andfeeds man"fact"rin, for the constr"ction of an anne@ b"ildin inside the latter:s plant in Ceb" City. $n connection )ith the aforesaid contract,F;O hired herein petitioners either as carpenters, masons or laborers.

F;O terminated petitioners: serices, on different dates. As a res"lt, petitioners filed Complaints aainst F;O and #MC before the 3RCReional Arbitration !ranch for "npaid )aes, COA differentials, bon"s and oertime pay.

Issu&%6hat is liability of an employer in ob contractinL

H&'(%The Co"rt "pholds the solidary liability of #MC and F;O for the latter:s liabilities in faor of employees )hom he had earlier employed anddismissed. Recoery, ho)eer, sho"ld not be based on Article 1<* of the abor Code. This proision treats specifically of labor(only>contractin, )hich is not the set("p bet)een #MC and F;O. Article 1<* proides%

Art. 1<*. #ontractor or s!bcontractor. K 6heneer an employer enters into a contract )ith another person for the performance of theformer:s )or, the employees of the contractor and of the latter:s s"bcontractor, if any, shall be paid in accordance )ith the proisions of thisCode.

$n the eent that the contractor or s"bcontractor fails to pay the )aes of his employees in accordance )ith this Code, the employer shall be ointly and seerally liable )ith his contractor or s"bcontractor to s"ch employees to the e@tent of the )or performed "nder the contract, inthe same manner and e@tent that he is liable to employees directly employed by him.

There is labor(only> contractin )here the person s"pplyin )orers to an employer does not hae s"bstantial capital or inestment in theform of tools, eH"ipment, machineries, )or premises, amon others, and the )orers recr"ited and placed by s"ch persons are performinactiities )hich are directly related to the principal b"siness of s"ch employer. $n s"ch cases, the person or intermediary shall be consideredmerely as an aent of the employer )ho shall be responsible to the )orers in the same manner and e@tent as if the latter )ere directlyemployed by him.>

A person is deemed to be enaed in P'#o o*'2Q $o*t#$t)*g )here &1' the person s"pplyin )orers to an employer does not haes"bstantial capital or inestment in the form of tools, eH"ipment, machineries, )or premises, amon others0 and &2' the )orers recr"itedand placed by s"ch person are performin actiities )hich are directly related to the principal b"siness of s"ch employer.

5ince the constr"ction of an anne@ b"ildin inside the company plant has no relation )hatsoeer )ith the employer:s b"siness of flo"r and

feeds man"fact"rin, labor(only> contractin does not e@ist. Article 1<* is th"s inapplicable.

$nstead, it is ob contractin,> coered by Article 1<7, )hich is inoled, readin%

Art. 1<7. Indirect Employer. K The proisions of the immediately precedin Article shall lie)ise apply to any person, partnership,association or corporation )hich, not bein an employer, contracts )ith an independent contractor for the performance of any )or, tas, obor proect.>

There is Po $o*t#$t)*gQ )here &1' the contractor carries on an independent b"siness and "ndertaes the contract )or on his o)nacco"nt "nder his o)n responsibility accordin to his o)n manner and method, free from the control and direction of his employer orprincipal in all matters connected )ith the performance of the )or e@cept as to the res"lts thereof0 and &2' the contractor has s"bstantialcapital or inestment in the form of tools, eH"ipment, machineries, )or premises, and other materials )hich are necessary in the cond"ct ofhis b"siness. $t may be that F;O s"bseH"ently ran o"t of capital and )as "nable to satisfy the a)ard to petitioners. That )as an after(the(

fact deelopment, ho)eer, and does not detract from his stat"s as an independent contractor.

#MC H"alifies as an indirect employer.> $t entered into a contract )ith an independent contractor, F;O, for the constr"ction of an anne@b"ildin, a )or, tas, ob or proect not directly related to #MC:s b"siness of flo"r and feeds man"fact"rin. !ein an indirect employer,>#MC is solidarily liable )ith F;O for any iolation of the abor Code p"rs"ant to Article 1< thereof, readin%

Art. 1<. Solidary Liability. ? The proisions of e@istin la)s to the contrary not)ithstandin, eery employer or indirect employer shall beheld responsible )ith a contractor or s"bcontractor for any iolation of any proision of this Code. 9or p"rposes of determinin the e@tent oftheir ciil liability "nder this Chapter, they shall be considered as direct employers.>

112




s"bscribed. 8ence, it cannot be considered as enaed in labor(only contractin bein a hihly capitalied ent"re. Moreoer, )hile the anitorial serices performed by 9elipe oterte p"rs"ant to the areement bet)een 9$5B3 and ?E $MA may be considered directly relatedto the principal b"siness of 9$5B3 )hich is the man"fact"re of polyester fiber, neertheless, they are not necessary in its operation. On thecontrary, they are merely incidental thereto, as opposed to bein interal, )itho"t )hich prod"ction and company sales )ill not s"ffer.+"dicial notice has already been taen of the eneral practice in priate as )ell as in oernment instit"tions and ind"stries of hirin anitorialserices on an independent contractor basis. ConseH"ently, ?E $MA bein an independent ob contractor, no direct employer(employeerelationship e@ists bet)een petitioner 9$5B3 and priate respondent 9elipe oterte.

6ith respect to its liability, ho)eer, petitioner cannot totally e@c"lpate itself from the fact that respondent ?E $MA is an independent obcontractor. 6e aree )ith the 5olicitor #eneral that not)ithstandin the lac of a direct employer(employee relationship bet)een 9$5B3and 9elipe oterte, the former is still ointly and seerally liable )ith respondent ?E $MA for oterte:s monetary claims "nder Art. 1< of theabor Code )hich e@plicitly proides G

The proisions of e@istin la)s to the contrary not)ithstandin, eery employer or indirect employer shall be held responsible )ith hiscontractor or s"bcontractor for any iolation of any proision of this Code. 9or p"rposes of determinin the e@tent of their ciil liability "nderthis Chapter, they shall be considered as direct employers>

!OSE Y. SON;A v. ABS7CBN BROADCASTING CORORATIONG.R. No. 1381 !u*& 1, 4+

"#$ts%Respondent A!5(C!3 !roadcastin Corporation &A!5(C!3>' sined an Areement &Areement>' )ith the Mel and +ay Manaement and?eelopment Corporation &M+M?C>'. A!5(C!3 )as represented by its corporate officers )hile M+M?C )as represented by 5O3UA, as;resident and #eneral Manaer, and Carmela Tianco &T$A3#CO>', as ED; and Treas"rer. The Areement listed the serices 5O3UA

)o"ld render to A!5(C!3, as follo)s%

a. Co(host for Mel +ay radio proram, -%<< to 1<%<< a.m., Mondays to 9ridays0b. Co(host for Mel +ay teleision proram, /%< to 7%<< p.m., 5"ndays.

A!5(C!3 areed to pay for 5O3UA:s serices a monthly talent fee of ;1<,<<< for the first year and ;17,<<< for the second and third yearof the Areement. A!5(C!3 )o"ld pay the talent fees on the 1<th and 2/th days of the month.

5O3UA filed a complaint aainst A!5(C!3 before the ?epartment of abor and Employment, 3ational Capital Reion in "eon City.

5O3UA complained that A!5(C!3 did not pay his salaries, separation pay, serice incentie leae pay, 1th month pay, sinin bon"s,trael allo)ance and amo"nts d"e "nder the Employees 5toc Option ;lan &E5O;>'.

A!5(C!3 filed a Motion to ?ismiss on the ro"nd that no employer(employee relationship e@isted bet)een the parties.

Mean)hile, A!5(C!3 contin"ed to remit 5O3UA:s monthly talent fees thro"h his acco"nt at ;C$ !an.

Issu&% )hether an employer(employee relationship e@isted bet)een 5ona and A!5(C!3

8eld%3o. 5ona is an independent contractor.

Case la) has consistently held that the elements of an employer(employee relationship are% &a' the selection and enaement of theemployee0 &b' the payment of )aes0 &c' the po)er of dismissal0 and &d' the employer:s po)er to control the employee on the means andmethods by )hich the )or is accomplished. The last element, the so(called $o*to' t&st>, is the most important element.

A!5(C!3 enaed 5O3UA:s serices to co(host its teleision and radio prorams beca"se of 5O3UA:s pec"liar sills, talent and celebritystat"s. 5O3UA contends that the discretion "sed by respondent in specifically selectin and hirin complainant oer other broadcasters ofpossibly similar e@perience and H"alification as complainant belies respondent:s claim of independent contractorship.>

$ndependent contractors often present themseles to possess "niH"e sills, e@pertise or talent to distin"ish them from ordinary employees.The specific selection and hirin of 5O3UA, 'ecause of his uniue skills, talent and cele'rity status not possessed 'y ordinary employees, is a circ"mstance indicatie, b"t not concl"sie, of an independent contract"al relationship. $f 5O3UA did not possess s"ch

114




"niH"e sills, talent and celebrity stat"s, A!5(C!3 )o"ld not hae entered into the Areement )ith 5O3UA b"t )o"ld hae hired himthro"h its personnel department "st lie any other employee.

A!5(C!3 directly paid 5O3UA his monthly talent fees )ith no part of his fees oin to M+M?C. 5O3UA asserts that this mode of feepayment sho)s that he )as an employee of A!5(C!3. 5O3UA also points o"t that A!5(C!3 ranted him benefits and priilees )hich he

)o"ld not hae enoyed if he )ere tr"ly the s"bect of a alid ob contract.>

All the talent fees and benefits paid to 5O3UA )ere the res"lt of neotiations that led to the Areement. $f 5O3UA )ere A!5(C!3:semployee, there )o"ld be no need for the parties to stip"late on benefits s"ch as 555, Medicare, @ @ @ and 1th month pay> )hich the la)a"tomatically incorporates into eery employer(employee contract. 6hateer benefits 5O3UA enoyed arose from contract and not beca"seof an employer(employee relationship.

5O3UA:s talent fees, amo"ntin to ;17,<<< monthly in the second and third year, are so h"e and o"t of the ordinary that they indicatemore an independent contract"al relationship rather than an employer(employee relationship. A!5(C!3 areed to pay 5O3UA s"ch h"etalent fees precisely beca"se of 5O3UA:s "niH"e sills, talent and celebrity stat"s not possessed by ordinary employees. Obio"sly, 5O3UAactin alone possessed eno"h barainin po)er to demand and receie s"ch h"e talent fees for his serices. The po)er to barain talentfees )ay aboe the salary scales of ordinary employees is a circ"mstance indicatie, b"t not concl"sie, of an independent contract"alrelationship.

9or iolation of any proision of the Areement, either party may terminate their relationship. 5O3UA failed to sho) that A!5(C!3 co"ldterminate his serices on ro"nds other than breach of contract, s"ch as retrenchment to preent losses as proided "nder labor la)s.

?"rin the life of the Areement, A!5(C!3 areed to pay 5O3UA:s talent fees as lon as A#E3T and +ay 5ona shall faithf"lly andcompletely perform each condition of this Areement.> Een if it s"ffered seere b"siness losses, A!5(C!3 co"ld not retrench 5O3UAbeca"se A!5(C!3 remained obliated to pay 5O3UA:s talent fees d"rin the life of the Areement. This circ"mstance indicates anindependent contract"al relationship bet)een 5O3UA and A!5(C!3.

5O3UA admits that een after A!5(C!3 ceased broadcastin his prorams, A!5(C!3 still paid him his talent fees. ;lainly, A!5(C!3adhered to its "ndertain in the Areement to contin"e payin 5O3UA:s talent fees d"rin the remainin life of the Areement een if A!5(C!3 cancelled 5O3UA:s prorams thro"h no fa"lt of 5O3UA.

5O3UA assails the abor Arbiter:s interpretation of his rescission of the Areement as an admission that he is not an employee of A!5(C!3.The abor Arbiter stated that if it )ere tr"e that complainant )as really an employee, he )o"ld merely resin, instead.> 5O3UA did act"allyresin from A!5(C!3 b"t he also, as president of M+M?C, rescinded the Areement. 5O3UA:s letter clearly bears this o"t. 8o)eer, the

manner by )hich 5O3UA terminated his relationship )ith A!5(C!3 is immaterial. 6hether 5O3UA rescinded the Areement or resinedfrom )or does not determine his stat"s as employee or independent contractor.

Applyin the $o*to' t&st to the present case, the Co"rt finds that 5O3UA is not an employee b"t an independent contractor. The control testis the most important test o"r co"rts apply in distin"ishin an employee from an independent contractor. This test is based on the e@tent ofcontrol the hirer e@ercises oer a )orer. The reater the s"perision and control the hirer e@ercises, the more liely the )orer is deemedan employee. The conerse holds tr"e as )ell G the less control the hirer e@ercises, the more liely the )orer is considered an independentcontractor.

5O3UA contends that A!5(C!3 e@ercised control oer the means and methods of his )or.

5O3UA:s ar"ment is misplaced. A!5(C!3 enaed 5O3UA:s serices specifically to co(host the Mel +ay> prorams. A!5(C!3 did notassin any other )or to 5O3UA. To perform his )or, 5O3UA only needed his sills and talent. 8o) 5O3UA deliered his lines, appeared

on teleision, and so"nded on radio )ere o"tside A!5(C!3:s control. 5O3UA did not hae to render eiht ho"rs of )or per day. TheAreement reH"ired 5O3UA to attend only rehearsals and tapins of the sho)s, as )ell as pre( and post(prod"ction staff meetins. A!5(C!3 co"ld not dictate the contents of 5O3UA:s script. 8o)eer, the Areement prohibited 5O3UA from criticiin in his sho)s A!5(C!3 orits interests. The clear implication is that 5O3UA had a free hand on )hat to say or disc"ss in his sho)s proided he did not attac A!5(C!3or its interests.

A!5(C!3 did not instr"ct 5O3UA ho) to perform his ob. A!5(C!3 merely resered the riht to modify the proram format and airtimesched"le for more effectie prorammin.> A!5(C!3:s sole concern )as the H"ality of the sho)s and their standin in the ratins. Clearly,A!5(C!3 did not e@ercise control oer the means and methods of performance of 5O3UA:s )or.

11/




5O3UA claims that A!5(C!3:s po)er not to broadcast his sho)s proes A!5(C!3:s po)er oer the means and methods of theperformance of his )or. Altho"h A!5(C!3 did hae the option not to broadcast 5O3UA:s sho), A!5(C!3 )as still obliated to pay5O3UA:s talent fees. Th"s, een if A!5(C!3 )as completely dissatisfied )ith the means and methods of 5O3UA:s performance of his )or,or een )ith the H"ality or prod"ct of his )or, A!5(C!3 co"ld not dismiss or een discipline 5O3UA. All that A!5(C!3 co"ld do is not tobroadcast 5O3UA:s sho) b"t A!5(C!3 m"st still pay his talent fees in f"ll.

5O3UA f"rther contends that A!5(C!3 e@ercised control oer his )or by s"pplyin all eH"ipment and cre). 3o do"bt, A!5(C!3 s"pplied

the eH"ipment, cre) and airtime needed to broadcast the Mel +ay> prorams. 8o)eer, the eH"ipment, cre) and airtime are not the toolsand instr"mentalities> 5O3UA needed to perform his ob. 6hat 5O3UA principally needed )ere his talent or sills and the cost"mesnecessary for his appearance.-Een tho"h A!5(C!3 proided 5O3UA )ith the place of )or and the necessary eH"ipment, 5O3UA )asstill an independent contractor since A!5(C!3 did not s"perise and control his )or. A!5(C!3:s sole concern )as for 5O3UA to displayhis talent d"rin the airin of the prorams.

A radio broadcast specialist )ho )ors "nder minimal s"perision is an independent contractor. 5O3UA:s )or as teleision and radioproram host reH"ired special sills and talent, )hich 5O3UA admittedly possesses. The records do not sho) that A!5(C!3 e@ercised anys"perision and control oer ho) 5O3UA "tilied his sills and talent in his sho)s.

5O3UA "res the Co"rt to r"le that he )as A!5(C!3:s employee beca"se A!5(C!3 s"bected him to its r"les and standards ofperformance. 5O3UA claims that this indicates A!5(C!3:s control not only IoerJ his manner of )or b"t also the H"ality of his )or.>

The Areement stip"lates that 5O3UA shall abide )ith the r"les and standards of performance $ov&)*g t#'&*ts> of A!5(C!3. TheAreement does not reH"ire 5O3UA to comply )ith the r"les and standards of performance prescribed for employees of A!5(C!3. Thecode of cond"ct imposed on 5O3UA "nder the Areement refers to the Teleision and Radio Code of the Papisanan n ma !roadcaster sa;ilipinas &P!;'.

astly, 5O3UA insists that the e@cl"siity cla"se> in the Areement is the most e@treme form of control )hich A!5(C!3 e@ercised oer him.

This ar"ment is f"tile. !ein an e@cl"sie talent does not by itself mean that 5O3UA is an employee of A!5(C!3. Een an independentcontractor can alidly proide his serices e@cl"siely to the hirin party. $n the broadcast ind"stry, e@cl"siity is not necessarily the same ascontrol.

The hirin of e@cl"sie talents is a )idespread and accepted practice in the entertainment ind"stry. This practice is not desined to controlthe means and methods of )or of the talent, b"t simply to protect the inestment of the broadcast station. The broadcast station normallyspends s"bstantial amo"nts of money, time and effort in b"ildin "p its talents as )ell as the prorams they appear in and th"s e@pects that

said talents remain e@cl"sie )ith the station for a commens"rate period of time.> 3ormally, a m"ch hiher fee is paid to talents )ho aree to )or e@cl"siely for a partic"lar radio or teleision station. $n short, the h"e talent fees partially compensates for e@cl"siity, as in thepresent case.

$n a labor(only contract, there are three parties inoled% &1' the labor(only> contractor0 &2' the employee )ho is ostensibly "nder the employof the labor(only> contractor0 and &' the principal )ho is deemed the real employer. Fnder this scheme, t& P'#o7o*'2Q $o*t#$to )s t&#g&*t o/ t& -)*$)-#'. The la) maes the principal responsible to the employees of the labor(only contractor> as if the principal itselfdirectly hired or employed the employees. These circ"mstances are not present in this case.

There are essentially only t)o parties inoled "nder the Areement, namely, 5O3UA and A!5(C!3. M+M?C merely acted as 5O3UA:saent. The Areement e@pressly states that M+M?C acted as the A#E3T> of 5O3UA. The records do not sho) that M+M?C acted as A!5(C!3:s aent. M+M?C, )hich stands for Mel and +ay Manaement and ?eelopment Corporation, is a corporation oranied and o)ned by5O3UA and T$A3#CO. The ;resident and #eneral Manaer of M+M?C is 5O3UA himself. $t is abs"rd to hold that M+M?C, )hich is o)ned,

controlled, headed and manaed by 5O3UA, acted as aent of A!5(C!3 in enterin into the Areement )ith 5O3UA, )ho himself isrepresented by M+M?C. That )o"ld mae M+M?C the aent of both A!5(C!3 and 5O3UA.

As 5O3UA admits, M+M?C is a manaement company deoted &$'us)v&'2 to manain the careers of 5O3UA and his broadcast partner,T$A3#CO. M+M?C is not enaed in any other b"siness, not een ob contractin. M+M?C does not hae any other f"nction apart fromactin as aent of 5O3UA or T$A3#CO to promote their careers in the broadcast and teleision ind"stry.

The riht of labor to s&$u)t2 o/ t&*u& as "aranteed in the Constit"tion arises only if there is an employer(employee relationship "nderlabor la)s. 3ot eery performance of serices for a fee creates an employer(employee relationship.

11*




The Fniersity is an establishment or enterprise that is incl"ded in the term ind"stry> and is coered by the proisions of Rep"blic Act 3o.-7/. 3o), )as there a labor disp"te bet)een the Fniersity and the 9ac"lty Cl"bL

Rep"blic Act 3o. -7/ defines a labor disp"te as follo)s%

The term P'#o ()s-ut&Q incl"des any controersy concernin terms, ten"re or conditions of employment, or concernin the association orrepresentation of persons in neotiatin, fi@in, maintainin, chanin, or seein to arrane terms or conditions of employment reardless

of )hether the disp"tants stand in pro@imate relation of employer and employees.>The test of )hether a controersy comes )ithin the definition of labor disp"te> depends on )hether the controersy inoles or concernsterms, ten"re or condition of employment> or representation.> $t is admitted by the Fniersity, in the instant case, that on +an"ary 14, 1*the ;resident of the 9ac"lty Cl"b )rote to the ;resident of the Fniersity a letter informin the latter of the oraniation of the 9ac"lty Cl"b asa labor "nion, d"ly reistered )ith the !"rea" of abor Relations0 that aain on +an"ary 22, 1* another letter )as sent, to )hich )asattached a list of demands consistin of 2* items, and asin the ;resident of the Fniersity to ans)er )ithin ten days from date of receiptthereof0 that the Fniersity H"estioned the riht of the 9ac"lty Cl"b to be the e@cl"sie representatie of the maority of the employees andased proof that the 9ac"lty Cl"b had been desinated or selected as e@cl"sie representatie by the ote of the maority of said employees0that on 9ebr"ary 1, 1* the 9ac"lty Cl"b filed )ith the !"rea" of abor Relations a notice of strie allein as reason therefor the ref"sal ofthe Fniersity to barain collectiely )ith the representatie of the fac"lty members0 that on 9ebr"ary 1-, 1* the members of the 9ac"ltyCl"b )ent on strie and established picet lines in the premises of the Fniersity, thereby disr"ptin the sched"le of classes0 that on March1, 1* the 9ac"lty Cl"b filed Case 3o. ***(F; for "nfair labor practice aainst the Fniersity, b"t )hich )as later dismissed &on April 2,1* after Case 41($;A )as certified to the C$R'0 and that on March 7, 1* a petition for certification election, Case 3o. 11-(MC, )as filedby the 9ac"lty Cl"b in the C$R. All these admitted facts sho) that the controersy bet)een the Fniersity and the 9ac"lty Cl"b inoledterms and conditions of employment, and the H"estion of representation. 8ence, there )as a labor disp"te bet)een the Fniersity and the9ac"lty Cl"b, as contemplated by Rep"blic Act 3o. -7/. $t hain been sho)n that the Fniersity is an instit"tion operated for profit, that isan employer, and that there is an employer(employee relationship, bet)een the Fniersity and the members of the 9ac"lty Cl"b, and ithain been sho)n that a labor disp"te e@isted bet)een the Fniersity and the 9ac"lty Cl"b, the contention of the Fniersity, that thecertification made by the ;resident is not only not a"thoried by 5ection 1< of Rep"blic Act -7/ b"t is iolatie thereof, is ro"ndless.

5ection 1< of Rep"blic Act 3o. -7/ proides%

6hen in the opinion of the ;resident of the ;hilippines there e@ists a labor disp"te in an ind"stry indispensable to the national interest and )hen s"ch labor disp"te is certified by the ;resident to the Co"rt of $nd"strial Relations, said Co"rt may ca"se to be iss"ed a restraininorder forbiddin the employees to strie or the employer to loco"t the employees, and if no other sol"tion to the disp"te is fo"nd, the Co"rtmay iss"e an order fi@in the terms and conditions of employment.>

To certify a labor disp"te to the C$R is the preroatie of the ;resident "nder the la), and this Co"rt )ill not interfere in, m"ch less c"rtail, thee@ercise of that preroatie. The "risdiction of the C$R in a certified case is e@cl"sie. Once the "risdiction is acH"ired p"rs"ant to thepresidential certification, the C$R may e@ercise its broad po)ers as proided in Common)ealth Act 1<. All phases of the labor disp"te andthe employer(employee relationship may be threshed o"t before the C$R, and the C$R may iss"e s"ch order or orders as may be necessaryto mae effectie the e@ercise of its "risdiction. The parties inoled in the case may appeal to the 5"preme Co"rt from the order or ordersth"s iss"ed by the C$R.

Issu& K3% )hether the ret"rn(to()or order and the order implementin the same is alid

H&'( K3%Bes. The Fniersity allees that the orders are illeal "pon the ro"nds% &1' that Rep"blic Act 3o. -7/, s"pplementin Common)ealth Act3o. 1<, has )ithdra)n from the C$R the po)er to iss"e a ret"rn(to()or order0 &2' that the only po)er ranted by 5ection 1< of Rep"blic Act

3o. -7/ to the C$R is to iss"e an order forbiddin the employees to strie or forbiddin the employer to loco"t the employees, as the casemay be, before either continency had become a fait accompli0 &' that the tain in by the Fniersity of replacement professors )as alid,and the ret"rn(to()or order of March <, 1* constit"ted impairment of the obliation of contracts0 and &4' the C$R co"ld not iss"e saidorder )itho"t hain preio"sly determined the leality or illeality of the strie.

The contention of the Fniersity that Rep"blic Act 3o. -7/ has )ithdra)n the po)er of the Co"rt of $nd"strial Relations to iss"e a ret"rn(to( )or order e@ercised by it "nder Common)ealth Act 3o. 1< can not be s"stained. 6hen a case is certified by the ;resident to the Co"rt of$nd"strial Relations, the case thereby comes "nder the operation of Common)ealth Act 3o. 1<, and the Co"rt may e@ercise the broadpo)ers and "risdiction ranted to it by said Act. 5ection 1< of Rep"blic Act 3o. -7/ empo)ers the Co"rt of $nd"strial Relations to iss"e anorder fi@in the terms of employment.> This cla"se is broad eno"h to a"thorie the Co"rt to order the striers to ret"rn to )or and theemployer to readmit them.

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6hen a case is certified to the C$R by the ;resident of the ;hilippines p"rs"ant to 5ection 1< of Rep"blic Act 3o. -7/, the C$R is ranteda"thority to find a sol"tion to the ind"strial disp"te0 and the sol"tion )hich the C$R has fo"nd "nder the a"thority of the presidentialcertification and conformable thereto cannot be H"estioned.

Fntenable also is the claim of the Fniersity that the C$R cannot iss"e a ret"rn(to()or order after strie has been declared, it beincontended that "nder 5ection 1< of Rep"blic Act 3o. -7/ the C$R can only preent a strie or a loco"t K )hen either of this sit"ation had

not yet occ"rred.

There is no reason or ro"nd for the contention that ;residential certification of labor disp"te to the C$R is limited to the preention of striesand loco"ts. Een after a strie has been declared )here the ;resident beliees that p"blic interest demands arbitration and conciliation,the ;resident may certify the ease for that p"rpose. The practice has been for the Co"rt of $nd"strial Relations to order the striers to )or,

pending the determination of the !nion demands that impelled the stri$e. There is nothin in the la) to indicate that this practice isabolished.>

ie)ise "ntenable is the contention of the Fniersity that the tain in by it of replacements )as alid and the ret"rn(to()or order )o"ld bean impairment of its contract )ith the replacements. As stated by the C$R in its order of March <, 1*, it )as areed before the hearin ofCase 41($;A on March 2, 1* that the striers )o"ld ret"rn to )or "nder the stat!s &!o arranement and the Fniersity )o"ld readmitthem, and the ret"rn(to()or order )as a confirmation of that areement. This is a declaration of fact by the C$R )hich )e cannot disreard.The fac"lty members, by striin, hae not abandoned their employment b"t, rather, they hae only ceased from their labor. The striinfac"lty members hae not lost their riht to o bac to their positions, beca"se the declaration of a strie is not a ren"nciation of theiremployment and their employee relationship )ith the Fniersity. The employment of replacements )as not a"thoried by the C$R. Theemployment of replacements by the Fniersity prior to the iss"ance of the order of March <, 1* did not est in the replacements apermanent riht to the positions they held. 3either co"ld s"ch temporary employment bind the Fniersity to retain permanently thereplacements.

The ret"rn(to()or order cannot be considered as an impairment of the contract entered into by petitioner )ith the replacements.

The Fniersity also maintains that there )as no more basis for the claim of the members of the 9ac"lty Cl"b to ret"rn to their )or, as theirindiid"al contracts for teachin had e@pired on March 2/ or 1, 1*, as the case may be, and conseH"ently, there )as also no basis forthe ret"rn(to()or order of the C$R beca"se the contract"al relationships hain ceased there )ere no positions to )hich the members of the9ac"lty Cl"b co"ld ret"rn to. This contention is not )ell taen. This ar"ment loses siht of the fact that )hen the professors and instr"ctorsstr"c on 9ebr"ary 1-, 1*, they contin"ed to be employees of the Fniersity for the p"rposes of the labor controersy not)ithstandin thes"bseH"ent termination of their teachin contracts, for 5ection 2&d' of the $nd"strial ;eace Act incl"des amon employees any indiid"al

)hose )or has ceased a conseH"ence of, or in connection )ith, any c"rrent labor disp"te or of any "nfair labor practice and )ho has notobtained any other s"bstantially eH"ialent and re"lar employment.>

HILIINE AIRLINES, INC. v. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER CORNELIO LINSANGAN,UNICORN SECURITY SERICES, INC., #*( "RED BAUTISTA, &t #'.G.R. No. 146 O$to& 48, 1996

"#$ts%;riate respondent Fnicorn 5ec"rity 5erices, $nc. &F55$' and petitioner ;hilippine Airlines, $nc. &;A' e@ec"ted a sec"rity sericeareement. F55$ )as desinated therein as the CO3TRACTOR. Amon the pertinent terms and conditions of the areement are as follo)s%

&4' T8E CO3TRACTOR shall assin to ;A an initial force of EI47)A *E B20C bodies . . . )hich may be decreased or increased by

areement in )ritin . . . . $t is, of co"rse, "nderstood that the CO3TRACTOR "ndertaes to pay the )aes or salaries and cost of liinallo)ance of the "ards in accordance )ith the proisions of the abor Code, as amended, the different ;resident ?ecrees, Orders and )iththe r"les and re"lations prom"lated by competent a"thorities implementin said acts, ass"min all responsibilities therefor.

@ @ @

&*' 6itho"t any e@pense on the part of ;A, CO3TRACTOR shall see to it that the "ards assined to ;A . . . are proided, at the e@penseof CO3TRACTOR, )ith the necessary firearms, amm"nitions and facilities needed for the rendition of the sec"rity serices as aforesaid0

&7' CO3TRACTOR shall select, enae and dischare the "ards, employees, or aents, and shall other)ise direct and control theirserices herein proided or heretofore to be set forth or prescribed. The determination of )aes, salaries and compensation of the "ards or

11




employees of the CO3TRACTOR shall be )ithin its f"ll control b"t shall in no )ay contraene e@istin la)s on the matter. $t is f"rther"nderstood that CO3TRACTOR as the employer of the sec"rity "ards arees to comply )ith all releant la)s and re"lations, incl"dincomp"lsory coerae "nder the 5ocial 5ec"rity Act, abor Code, as amended and the Medical Care Act, in its operations. Altho"h it is"nderstood areed bet)een parties hereto that CO3TRACTOR in the performance of its obliations "nder this Areement, is s"bect to thecontrol and direction of ;A merely as to the res"lt as to be accomplished by the )or or serices herein specified, and not as to the meansand methods for accomplishin s"ch res"lt, CO3TRACTOR hereby )arrants that it )ill perform s"ch )or or serices in s"ch manner as )illachiee the res"lt herein desired by ;A.

&-' ?iscipline and administration of the sec"rity "ards shall be the sole responsibility of the CO3TRACTOR to the end that CO3TRACTORshall be able to render the desired sec"rity serice reH"irements of ;A CO3TRACTOR, therefore, shall conform to s"ch r"les andre"lations that may be iss"ed by ;A. 9or this p"rpose, Anne@ A>, )hich forms part of this Areement, contains s"ch r"les and re"lationsand CO3TRACTOR is e@pected to comply )ith them. At its discretion, +/L may, ho)eer, )or o"t )ith CO3TRACTOR s"ch r"les andre"lations before their implementation.

&' 5ho"ld ;A at any time hae any "stifiable obection to the presence in its premises of any of CO3TRACTOR:s officer, "ard or aent"nder this Areement, it shall send s"ch obection in )ritin to CO3TRACTOR and the latter shall immediately tae proper action.

&1<' The sec"rity "ards employed by CO3TRACTOR in performin this Areement shall be paid by the CO3TRACTOR and it is distinctly"nderstood that there is no employee(employer relations bet)een CO3TRACTOR and=or his "ards on the one hand, and ;A on the other.CO3TRACTOR shall hae entire chare, control and s"perision of the )or and serices herein areed "pon, and ;A shall in no mannerbe ans)erable or acco"ntable for any accident or in"ry of any ind )hich may occ"r to any "ard or "ards of the CO3TRACTOR in theco"rse of, or as a conseH"ence of, their performance of )or and serices "nder this Areement, or for any in"ry, loss or damae arisinfrom the nelience of or carelessness of the "ards of the CO3TRACTOR or of anyone of its employ to any person to persons or to its ortheir property )hether in the premises of ;A or else)here0 and the CO3TRACTOR hereby coenants and arees to ass"me, as it doeshereby ass"me, any and all liability or on acco"nt of any s"ch in"ry, loss or damae, and shall indemnify ;A for any liability or e@pense itmay inc"r by reason thereof and to hold ;A free and harmless from any s"ch liability.

@ @ @

&1' 9or and in consideration of the serices to be rendered by CO3TRACTOR "nder these presents, ;A shall pay CO3TRACTOR theamo"nt of ;E5O5 *I*E 9 =>50>> #)VS B+1.=>C +ER 7:R m!ltiplied by 1> ho!rs e&!ivalent to +ESS )< 7:*DRED SEVE*)A IVE )7:S/*D *I*E 7:*DRED *I*E 9 250>> #)VS, ;hilippine c"rrency, K &;27/,<./-' the basis of eiht &-' )orin ho"rs peroffice="ard a day, 5"ndays and holidays incl"ded, the same to be payable on or before the 1/th of each month for serices on the first halfof the month and on or before the end of the month for serices for the 2nd half of the month.

3othin herein contained shall preent the parties from meetin for a reie) of the rates sho"ld circ"mstances )arrant.

@ @ @

&2<' This Areement shall tae effect on > December 0123 and shall be in force for a period of SIF BC '*)7S ? > G:*E 0122thereafter it shall contin"e indefinitely "nless sooner terminated "pon thirty &<' days notice sered "pon by one party to the other, e@cept asproided for in Articles 1*, 17 1- hereof.>

5ometime in A""st of 1--, ;A reH"ested 1* additional sec"rity "ards. F55$ proided )hat )as reH"ested0 ho)eer, ;A insisted that )hat F55$ did )as merely to pic o"t 1* "ards from the -* already assined by it and directed them to render oertime d"ty.

On 1* 9ebr"ary 1<, ;A terminated the sec"rity serice areement )ith F55$ )itho"t iin the latter the <(day prior notice reH"ired in

pararaph 2< thereof. $nstead, ;A paid each of the sec"rity "ards act"ally assined at the time of the termination of the areement anamo"nt eH"ialent to their one(month salary to compensate for the lac of notice.

F55$ filed )ith the 3RC Arbitration !ranch a complaint 4 aainst ;A for the recoery of ;7/,*<<.<< representin termination pay benefitd"e the alleed 1* additional sec"rity "ards, )hich ;A failed and ref"sed to pay despite demands. $t f"rther ased for an a)ard of not lessthan ;1/,<<<.<< for each of the 1* "ards as damaes for the delay in the performance of ;A:s obliation, and also for attorney:s fees in anamo"nt eH"ialent to 1<N of )hateer miht be recoered.

Issu&% )hether employer(employee relationship e@isted bet)een ;A and the sec"rity "ards proided by F55$ "nder the sec"rity sericeareement

12<




H&'(%3o. $n determinin the e@istence of an employer(employee relationship, the follo)in elements are enerally considered% &1' the selectionand enaement of the employee0 &2' the payment of )aes0 &' the po)er to dismiss0 and &4' the po)er to control the employee:s cond"ct.

$t )as F55$ )hich &a' selected, enaed or hired and dischared the sec"rity "ards0 &b' assined them to ;A accordin to the n"mberareed "pon0 &c' proided, at its o)n e@pense, the sec"rity "ards )ith firearms and amm"nitions0 &d' disciplined and s"perised them or

controlled their cond"ct0 and &e' determined their )aes, salaries, and compensation0 and &f' paid them salaries or )aes. Een if )edisreard the e@plicit coenant in said areement that there e@ists no employer(employee relationship bet)een CO3TRACTOR and=or his"ards on the one hand, and ;A on the other> all other considerations confirm the fact that ;A )as not the sec"rity "ards: employer.

Considerin then that no employer(employee relationship e@isted bet)een ;A and the sec"rity "ards, the abor Arbiter had no "risdictionoer the claim. Article 217 of the abor Code &;.?. 3o. 442', as amended, ests "pon abor Arbiters e@cl"sie oriinal "risdiction only oerthe follo)in%

1. Fnfair labor practice cases02. Termination disp"tes0. $f accompanied )ith a claim for reinstatement, those cases that )orers may file inolin )aes, rates of pay, ho"rs of )or and

other terms and conditions of employment04. Claims for act"al, moral, e@emplary and other forms of damaes arisin from employer(employee relations0/. Cases arisin from any iolation of Article 2*/ of this Code, incl"din H"estions inolin leality of stries and loco"ts0 and*. E@cept claims for Employees Compensation, 5ocial 5ec"rity, Medicare and maternity benefits, all other claims, arisin from

employer(employee relations, incl"din those of persons in domestic or ho"sehold serice, inolin an amo"nt e@ceedin fietho"sand pesos &;/,<<<.<<' reardless of )hether accompanied )ith a claim for reinstatement.

$n all these cases, an employer(employee relationship is an indispensable "risdictional reH"isite.

The abor Arbiter cannot aoid the "risdictional iss"e or "stify his ass"mption of "risdiction on the prete@t that ;A )as the indirect employer of the sec"rity "ards "nder Article 1<7 in relation to Articles 1<* and 1< of the abor Code and, therefore, it is solidarily liable

)ith F55$. these Articles are inapplicable to ;A "nder the facts of this case. Article 1<7 proides%

Art. 1<7. Indirect employer . K The proisions of the immediately precedin Article shall lie)ise apply to any person, partnership,association or corporation )hich, not bein an employer, contracts )ith an independent contractor for the performance of any )or, tas, obor proect.>

The precedin Article referred to, )hich is Article 1<*, partly reads as follo)s%

Art. 1<*. #ontractor or s!bcontractor . K 6heneer an employer enters into a contract )ith another person for the performance of theformer:s )or, the employees of the contractor and of the latter:s s"bcontractor, if any, shall be paid in accordance )ith the proisions of thisCode.

$n the eent that the contractor or s"bcontractor fails to pay the wages of his employees in accordance )ith this Code, the employer shall be ointly and seerally liable )ith his contractor or s"bcontractor to s"ch employees to the e@tent of the )or performed "nder the contract, inthe same manner and e@tent that he is liable to employees directly employed by him.:

6hile F55$ is an independent contractor "nder the sec"rity serice areement and ;A may be considered an indirect employer, that stat"sdid not mae ;A the employer to the sec"rity "ards in eery respect. ;A may be considered an indirect employer only for p"rposes of

"npaid )aes since Article 1<*, )hich is applicable to the sit"ation contemplated in 5ection 1<7, speas of wages. The concept of indirect employer only relates or refers to the liability for !npaid wages. Read toether, Articles 1<* and 1< simply mean that the party )ith )hom anindependent contractor deals is solidarily liable )ith the latter for "npaid )aes, and only to that e@tent and for that p"rpose that the latter isconsidered a direct employer.

3o alid claim for )aes or separation pay can arise from the sec"rity serice areement in H"estion by reason of its termination at theinstance of ;A. The areement contains no proision for separation pay. A breach thereof co"ld only ie rise to damaes "nder the CiilCode, )hich is coniable by the appropriate re"lar co"rt of "stice. !esides, there is no s"bstantial proof that F55$ in fact proided 1*additional "ards. On the contrary, ;A )as able to proe in the anne@es attached to its s"pplemental motion to dismiss that the 1* "ards

)ere act"ally piced o"t from the oriinal ro"p and )ere "st reH"ired to render oertime serice.

121




On April 2<, 1-*, the )orers and employees of $TC staed a strie. The strie )as amicably settled on April 2*, 1-* by irt"e of aMemorand"m of Areement entered into bet)een oreno Tansoc, as o)ner and operator of petitioner $TC and of both 5tanply ;lant andthe !"t"an os, $nc. ;lant, and the striin )orers=employees of 5tanply and !"t"an os, $nc., )herein the priate respondents )ereamon those employed by 5tanply.

;"rs"ant to the aforementioned Memorand"m of Areement, petitioners admitted almost all of the striin )orers, bac to )or, e@ceptpriate respondents. 8ence, priate respondents )ere forced to plead for their reinstatement. 8o)eer, the same proed f"tile een after the

lapse of 7 months of )aitin and incessant follo)("ps.

;riate respondents filed )ith the Arbitration !ranch of the 3ational abor Relations Commission &3RC' a complaint for illeal dismiss andreinstatement )ith bac)aes aainst petitioner $TC.

Issu&% )hether or not priate respondents )ere employees of petitioners

H&'(%Bes. 5ection , R"le D$$$, !oo $$$ of the Omnib"s R"les. $mplementin the abor Code in the follo)in terms%

5ec. . Labor"only contracting. K &a' Any person )ho "ndertaes to s"pply )orers to an employer shall be deemed to be enaed inlabor(only contractin )here s"ch person%

&1' ?oes not hae s"bstantial capital or inestment in the form of tools, eH"ipment, machineries, )or premises and other materials0 and&2' The )orers recr"ited and placed by s"ch person are performin actiities )hich are directly related to the principal b"siness oroperations of the employer in )hich )orers are habit"ally employed.&b' abor(only contractin as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as anagent or intermediary of the employer )ho shall be responsible to the )orer in the same manner and e@tent as if the latter )ere directlyemployed by him.>

The labor(only: contractor i.e., the person or intermediary is considered merely as an aent of the employer.: The employer is made by thestat"te responsible to the employees of the labor(only: contractor as if s!ch employees had been directly employed by the employer. Th"s,

)here labor(only: contractin e@ists in a ien case, the stat"te i tself implies or establishes an employer(employee relationship bet)een theemployer &the o)ner of the proect' and the employees of the labor(only: contractor, this time for a comprehensive p"rpose% employer forp"rposes of this #ode, to prevent any violation or circ!mvention of any provision of this #ode.’ The la) in effect holds both the employer andthe labor(only: contractor responsible to the latter:s employees for the more effectie safe"ardin of the employees: rihts "nder the abor

Code.:

8ence, a findin that a contractor is a labor(only> contractor is eH"ialent to a findin that there e@ists an employer(employee relationshipbet)een the o)ner of the proect and the employees of the labor only contractor since that relationship is defined and prescribed by the la)itself.

UNITED SECIAL @ATCHMAN AGENCY v. THE HONORABLE COURT O" AEALS, CESAR AMA, BEN!AMIN ERE;, !OSEABRIAD, EDUARDO ALARBA, ANTONIO AILA, OSCAR BERNARDO, !AIME COLUMBRES, MARIO COLUMBRES, RONNIEDESCUTODO, CONDORDIO EMINO, NOEL "LAIA, ANDRES GEDUCOS, AN"ILO IHALAS, !UAN MI!ARES, MARCELO MI!ARES,CANESIO OMBA!IN, ANTONIO AMA, CRISULO AMA, !R., DANILO AMA, ESTA"ANO AMA, EITO AMA, !R., ROMYAMOSA, !ESUS ANIALES, DOMING ANI;ALES, ARNALDO ERE;, "IDEL ILOTON, CONCORDIO DE LOS REYES, ICENTEROBLES, ALE!ANDRO ROTAO, GERARDO SUMANGHID, NOEL SULIDO, MONICO TIEMO, AL"REDO ELEN;UELA, ARTURO

ALEN;UELA, ROMY ELARDE, ELISEO ILLA"LORG.R. No. 14+56 !u'2 8, 43

"#$ts%A complaint for illeal dismissal and payment of money claims )as filed by respondent employees aainst F56A and !anco 9ilipino 5ainsand Mortae !an &!9>'. $t stemmed from the termination of the Contract for 5ec"rity 5erices entered into bet)een F56A and !9. Theparties areed that the party terminatin the CO3TRACT shall ie &a' T8$RTB &<'(day notice prior to the date of termination to the otherparty.>

The contract too effect on 1 +"ne 14. 8o)eer, on +"ne 14, or t)o &2' days later, !9 terminated the contract. The termination letterdated +"ne 14, b"t receied on +"ne 17, adised F56A of the termination to tae effect < days from receipt thereof.

12




F56A alleed that, "pon receipt of the letter, Mr. Anel !ali)a, its Operations Manaer, immediately notified all the affected employeesstationed at the !9 branches abo"t the termination of their contract. 8e adised them to report to the office for reassinment. Only thirty &<'o"t of the si@ty(seen &*7' "ards reported and they )ere ien ne) assinments. O"t of the remainin thirty(seen &7', t)enty(one &21'filed, on 4 A""st 14, a complaint for illeal dismissal and payment of money claims aainst F56A and !9 )ith the Reional Arbitration!ranch of the 3ational abor Relations Commission &3RC>'.

The employees claimed that they )ere p"t on a floatin stat"s. They denied that F56A, represented by Mr. !ali)a, notified them of thestandin offer of the aency to reassin them to other clients after the termination of the contract )ith !9. ?"e to their dismissal, they prayedfor separation pay.

Issu&% )hether respondents )ere illeally dismissed

H&'(%Bes. $t is the contention of F56A that the respondents )ere not illeally dismissed, b"t that they ref"sed to report to the office after thetermination of the contract )ith !9. Alleedly, it )as the fa"lt of the respondents that they did not hae any )or assinment. There bein noilleal dismissal, they ar"e that the 3RC erred in a)ardin separation pay to the employees.

$t )as established that the respondents )ere p"t on a temporary off(detail, )hich e@ceeded the allo)able period of * months, amo"ntin toconstr"ctie dismissal. There is th"s no f"rther need to d)ell on the H"estions of fact raised in this petition.

;"rs"ant to a leitimate ob contractin, F56A and !9 are ointly and seerally liable in the payment of the )aes of the employees, and foriolation of any proision of the abor Code. 6e note that a compromise areement of the employees )as e@ec"ted bet)een !9 and theemployees. 8o)eer, the compromise areement dealt only )ith salary differential. $t did not incl"de nor does it precl"de the a)ard ofseparation pay. $n liht of the illeal dismissal of the respondents, F56A is liable to pay the respondents separation pay eH"ialent to 1month pay for eery year of serice.

ABUNDIO BARAYOGA #*( BISUDECO7HILSUCORCOR"ARM @OR:ERS UNION ?ACI@U CHA7TC v. ASSET RIATI;ATION o0u'g#t&(%TRUSTG.R. No. 1653 O$to& 4+, 4

"#$ts%!is"deco(;hils"cor Corfarm 6orers Fnion is composed of )orers of !icolandia 5"ar ?eelopment Corporation &!$5F?ECO', a s"arplantation mill located in 8imaao, ;ili, Camarines 5"r.

Asset ;riatiation Tr"st &A;T', a p"blic tr"st )as created "nder ;roclamation 3o. /<, as amended, mandated to tae title to and possessionof, consere, proisionally manae and dispose of non(performin assets of the ;hilippine oernment identified for priatiation ordisposition.

;"rs"ant to 5ection 2 of ;roclamation 3o. /<, former ;resident Coraon AH"ino iss"ed Administratie Order 3o. 14 identifyin certainassets of oernment instit"tions that )ere to be transferred to the 3ational #oernment. Amon the assets transferred )as the financialclaim of the ;hilippine 3ational !an aainst !$5F?ECO in the form of a sec"red loan. ConseH"ently, by irt"e of a Tr"st Areemente@ec"ted bet)een the 3ational #oernment and A;T on 9ebr"ary 27, 1-7, A;T )as constit"ted as tr"stee oer !$5F?ECO:s acco"nt )iththe ;3!.

5ometime later, !$5F?ECO contracted the serices of ;hilippine 5"ar Corporation &;hils"cor' to tae oer the manaement of the s"arplantation and millin operations "ntil A""st 1, 12.

Mean)hile, beca"se of the contin"ed fail"re of !$5F?ECO to pay its o"tstandin loan )ith ;3!, its mortaed properties )ere foreclosedand s"bseH"ently sold in a p"blic a"ction to A;T, as the sole bidder. On April 2, 11, A;T )as iss"ed a 5heriff:s Certificate of 5ale.

The "nion filed a complaint for "nfair labor practice, illeal dismissal, illeal ded"ction and "nderpayment of )aes and other labor standardbenefits pl"s damaes.

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$n the meantime, A;T:s !oard of Tr"stees iss"ed a resol"tion acceptin the offer of !icol(Aro($nd"strial Cooperatie &!A;C$' to b"y thes"ar plantation and mill. Aain, on 5eptember 2, 12, the board passed another resol"tion a"thoriin the payment of separation benefitsto !$5F?ECO:s employees in the eent of the company:s priatiation. Then, on October <, 12, !A;C$ p"rchased the foreclosed assetsof !$5F?ECO from A;T and too oer its s"ar millin operations "nder the trade name ;eafrancia 5"ar Mill &;ens"mil'.

The "nion alleed that )hen ;hils"cor initially too oer the operations of the company, it retained !$5F?ECO:s e@istin personnel "nder thesame terms and conditions of employment. 3onetheless, at the start of the season sometime in May 11, ;hils"cor started recallin

)orers bac to )or, to the e@ception of the "nion members. Manaement told them that they )ill be re(hired only if they resin from the"nion. +"st the same, thereafter, the company started to employ the serices of o"tsiders "nder the paya) system.

Issu&% )hether A;T is liable to pay petitioners: monetary claims, incl"din bac )aes from May 1, 11, to October <, 12 &the date of the saleof !$5F?ECO assets to !A;C$'

H&'(%3o. ;"rs"ant to Administratie Order 3o. 14, 5eries of 1-7, ;3!:s assets, loans and receiables from its borro)ers )ere transferred to A;Tas tr"stee of the national oernment. Amon the liabilities transferred to A;T )as ;3!:s financial claim aainst !$5F?ECO, not the latter:sassets and chattel. !$5F?ECO remained the o)ner of the mortaed properties in A""st 1--, )hen the ;hilippine 5"ar Corporation&;hils"cor' "ndertoo the operation and manaement of the s"ar plantation "ntil A""st 1, 12, "nder a so(called Contract of easebet)een the t)o corporations. At the time, A;T )as merely a sec"red creditor of !$5F?ECO.

$t )as only in April 11 that A;T foreclosed the assets and chattels of !$5F?ECO beca"se of the latter:s contin"ed fail"re to payo"tstandin loan obliations to ;3!=A;T. The properties )ere sold at p"blic a"ction to A;T, the hihest bidder, as indicated in the 5heriff:sCertificate of 5ale iss"ed on April 2, 11. $t )as only in 5eptember 12 &after the e@piration of the lease=manaement Contract )ith;hils"cor in A""st 12', ho)eer, )hen A;T too oer !$5F?ECO assets, preparatory to the latter:s priatiation.

$n the present case, petitioner("nion:s members )ho )ere not recalled to )or by ;hils"cor in May 11 see to hold A;T liable for theirmonetary claims and alleedly illeal dismissal. 5inificantly, prior to the act"al sale of !$5F?ECO assets to !A;C$ on October <, 12,the A;T board of tr"stees had approed a Resol"tion. The Resol"tion a"thoried the payment of separation benefits to the employees of thecorporation in the eent of its priatiation. 3ot incl"ded in the Resol"tion, tho"h, )ere petitioner("nion:s members )ho had not beenrecalled to )or in May 11.

The d"ties and liabilities of !$5F?ECO, incl"din its monetary liabilities to its employees, )ere not all a"tomatically ass"med by A;T asp"rchaser of the foreclosed properties at the a"ction sale. Any ass"mption of liability m"st be specifically and cateorically areed "pon.

Fnless e@pressly ass"med, labor contracts lie collectie barainin areements are not enforceable aainst the transferee of an enterprise.

3o s"ccession of employment rihts and obliations can be said to hae taen place bet)een the t)o. !et)een the employees of!$5F?ECO and A;T, there is no priity of contract that )o"ld mae the latter a s"bstit"te employer that sho"ld be b"rdened )ith theobliations of the corporation.

9"rthermore, "nder the -)*$)-'& o/ #so-t)o*, a bona fide b"yer or transferee of all, or s"bstantially all, the properties of the seller ortransferor is not oblied to absorb the latter:s employees. The most that the p"rchasin company may do, for reasons of p"blic policy andsocial "stice, is to ie preference of reemployment to the sellin company:s H"alified separated employees, )ho in its "dment arenecessary to the contin"ed operation of the b"siness establishment.

$n any eent, the national oernment &in )hose tr"st A;T preio"sly held the mortae credits of !$5F?ECO' is not the employer ofpetitioner("nion:s members, )ho had been dismissed sometime in May 11, een before A;T too oer the assets of the corporation.

8ence, "nder e@istin la) and "rispr"dence, there is no reason to e@pect any ind of bailo"t by the national oernment. Een the 3RCfo"nd that no employer(employee relationship e@isted bet)een A;T and petitioners.

The liabilities of the preio"s o)ner to its employees are not enforceable aainst the b"yer or transferee, "nless &1' the latter "neH"iocallyass"mes them0 or &2' the sale or transfer )as made in bad faith. Th"s, A;T cannot be held responsible for the monetary claims of petitioners

)ho had been dismissed een before it act"ally too oer !$5F?ECO:s assets.

Moreoer, it sho"ld be remembered that A;T merely became a transferee of !$5F?ECO:s assets for p"rposes of conseration beca"se ofits lien on those assets (( a lien i t ass"med as assinee of the loan sec"red by the corporation from ;3!. 5"bseH"ently, A;T, as the hihestbidder in the a"ction sale, acH"ired o)nership of the foreclosed properties.

12/




Releant to this transfer of assets is Article 11< of the abor Code, as amended by Rep"blic Act 3o. *71/, )hich reads%

Article 11<. <or$er’s preference in case of ban$r!ptcy. H $n the eent of banr"ptcy or liH"idation of the employer:s b"siness, his )orersshall enoy first preference as reards their "npaid )aes and other monetary claims shall be paid in f"ll before the claims of the4overnment and other creditors may be paid.>

Fnder Articles 2241 and 2242 of the Ciil Code, a mortae credit is a special preferred credit that enoys preference )ith respect to a

specific=determinate property of the debtor. On the other hand, the )orer:s preference "nder Article 11< of the abor Code is an ordinarypreferred credit. 6hile this proision raises the )orer:s money claim to first priority in the order of preference established "nder Article 2244of the Ciil Code, the claim has no preference oer special preferred credits.

6orers: claims for "npaid )aes and monetary benefits cannot be paid o"tside of a banr"ptcy or "dicial liH"idation proceedins aainstthe employer. The application of Article 11< of the abor Code is continent "pon the instit"tion of those proceedins, d"rin )hich allcreditors are conened, their claims ascertained and inentoried, and their preferences determined.

TRADERS ROYAL BAN: EMLOYEES UNION7INDEENDENT v. NATIONAL LABOR RELATIONS COMMISSION #*( EMMANUELNOEL A. CRU;G.R. No. 1494 M#$ 1+, 1995

"#$ts%;etitioner Traders Royal !an Employees Fnion and priate respondent Atty. Emman"el 3oel A. Cr", head of the E.3.A. Cr" andAssociates la) firm, entered into a retainer areement on 9ebr"ary 2*, 1-7 )hereby the former obliated itself to pay the latter a monthlyretainer fee of ;,<<<.<< in consideration of the la) firm:s "ndertain to render the serices en"merated in their contract. ;arenthetically,said retainer areement )as terminated by the "nion on April 4, 1<.

?"rin the e@istence of that areement, petitioner "nion referred to priate respondent the claims of its members for holiday, mid(year andyear(end bon"ses aainst their employer, Traders Royal !an &TR!'. After the appropriate complaint )as filed by priate respondent, thecase )as certified by the 5ecretary of abor to the 3RC.

The 3RC rendered a decision in the foreoin case in faor of the employees, a)ardin them holiday pay differential, mid(year bon"sdifferential, and year(end bon"s differential.

;endin the hearin of the application for the )rit of e@ec"tion, TR! challened the decision of the 3RC before the 5"preme Co"rt. TheCo"rt, in its decision prom"lated on A""st <, 1<, 6 modified the decision of the 3RC by deletin the a)ard of mid(year and year(endbon"s differentials )hile affirmin the a)ard of holiday pay differential.

The ban ol"ntarily complied )ith s"ch final "dment and determined the holiday pay differential to be in the amo"nt of ;17/,74.2.;etitioner neer contested the amo"nt th"s fo"nd by TR!. The latter d"ly paid its concerned employees their respectie entitlement in saids"m thro"h their payroll.

After priate respondent receied the aboe decision of the 5"preme Co"rt, he notified the petitioner "nion, the TR! manaement and the3RC of his riht to e@ercise and enforce his attorney:s lien oer the a)ard of holiday pay differential.

;riate respondent filed a motion before abor Arbiter oreno for the determination of his attorney:s fees, prayin that ten percent &1<N' ofthe total a)ard for holiday pay differential comp"ted by TR! at ;17/,74.2, or the amo"nt of ;17,/7.4, be declared as his attorney:s

fees, and that petitioner "nion be ordered to pay and remit said amo"nt to him.

Issu&% )hether 3RC committed rae ab"se of discretion amo"ntin to lac of "risdiction in "pholdin the a)ard of attorney:s fees in the amo"ntof ;17,/74.4, or ten percent &1<N' of the ;17/,74.2 ranted as holiday pay differential to its members, in iolation of the retainerareement

H&'(%3o. There are t)o commonly accepted concepts of attorney:s fees, the so(called o()*#2 and &t#o()*#2. $n its ordinary concept, anattorney:s fee is the reasonable compensation paid to a la)yer by his client for the leal serices he has rendered to the latter. The basis ofthis compensation is the fact of his employment by and his areement )ith the client.

12*




$n its &t#o()*#2 concept, an attorney:s fee is an indemnity for damaes ordered by the co"rt to be paid by the losin party in a litiation.The basis of this is any of the cases proided by la) )here s"ch a)ard can be made, s"ch as those a"thoried in Article 22<-, Ciil Code,and is payable not to the la)yer b"t to the client, "nless they hae areed that the a)ard shall pertain to the la)yer as additionalcompensation or as part thereof.

$t is the first type of attorney:s fees )hich priate respondent demanded before the labor arbiter.

3o claim for attorney:s fees )as filed by priate respondent before the 3RC )hen it acted on the money claims of petitioner, nor before the5"preme Co"rt )hen it reie)ed the decision of the 3RC. $t )as only after the 8ih Trib"nal modified the "dment of the 3RC a)ardinthe differentials that priate respondent filed his claim before the 3RC for a percentae thereof as attorney:s fees.

$t )o"ld obio"sly hae been impossible, if not improper, for the 3RC in the first instance and for the 5"preme Co"rt thereafter to mae ana)ard for attorney:s fees )hen no claim therefor )as pendin before them. Co"rts enerally r"le only on iss"es and claims presented tothem for ad"dication. Accordinly, )hen the labor arbiter ordered the payment of attorney:s fees, he did not in any )ay modify the "dmentof the 5"preme Co"rt.

As an ad"nctie episode of the action for the recoery of bon"s differentials, priate respondent:s present claim for attorney:s fees may befiled before the 3RC een tho"h or, better stated, especially after its earlier decision had been reie)ed and partially affirmed. $t is )ellsettled that a claim for attorney:s fees may be asserted either in the ery action in )hich the serices of a la)yer had been rendered or in aseparate action.

6hile a claim for attorney:s fees may be filed before the "dment is rendered, the determination as to the propriety of the fees or as to theamo"nt thereof )ill hae to be held in abeyance "ntil the main case from )hich the la)yer:s claim for attorney:s fees may arise has becomefinal. Other)ise, the determination to be made by the co"rts )ill be premat"re. Of co"rse, a petition for attorney:s fees may be filed beforethe "dment in faor of the client is satisfied or the proceeds thereof deliered to the client.

A la)yer has t)o options as to )hen to file his claim for professional fees. 8ence, priate respondent )as )ell )ithin his rihts )hen hemade his claim and )aited for the finality of the "dment for holiday pay differential, instead of filin it ahead of the a)ard:s completeresol"tion. To declare that a la)yer may file a claim for fees in the same action only before the "dment is reie)ed by a hiher trib"nal

)o"ld deprie him of his aforestated options and render ineffectie the foreoin prono"ncements of this Co"rt.

The ;,<<<.<< )hich petitioner pays monthly to priate respondent does not coer the serices the latter act"ally rendered before the laborarbiter and the 3RC in behalf of the former. As stip"lated in ;art C of the areement, the monthly fee is intended merely as a consideration

for the la) firm:s commitment to render the serices en"merated in ;art A &#eneral 5erices' and ;art ! &5pecial eal 5erices' of theretainer areement.

The difference bet)een a compensation for a commitment to render leal serices and a rem"neration for leal serices act"ally renderedcan better be appreciated )ith a disc"ssion of the t)o inds of retainer fees a client may pay his la)yer. These are a eneral retainer, or aretainin fee, and a special retainer.

A g&*&#' &t#)*&, or retainin fee, is the fee paid to a la)yer to sec"re his f"t"re serices as eneral co"nsel for any ordinary lealproblem that may arise in the ro"tinary b"siness of the client and referred to him for leal action. The f"t"re serices of the la)yer aresec"red and committed to the retainin client. 9or this, the client pays the la)yer a fi@ed retainer fee )hich co"ld be monthly or other)ise,dependin "pon their arranement. The fees are paid )hether or not there are cases referred to the la)yer. The reason for the rem"nerationis that the la)yer is depried of the opport"nity of renderin serices for a fee to the opposin party or other parties. $n fine, it is acompensation for lost opport"nities.

A s-&$)#' &t#)*& is a fee for a specific case handled or special serice rendered by the la)yer for a client. A client may hae seeral casesdemandin special or indiid"al attention. $f for eery case there is a separate and independent contract for attorney:s fees, each fee isconsidered a special retainer.

The ;,<<<.<< monthly fee proided in the retainer areement bet)een the "nion and the la) firm refers to a eneral retainer, or a retaininfee, as said monthly fee coers only the la) firm:s plede, or as e@pressly stated therein, its commitment to render the leal sericesen"merated.> The fee is not payment for priate respondent:s e@ec"tion or performance of the serices listed in the contract, s"bect to somepartic"lar H"alifications or perm"tations stated there.

127




#enerally speain, )here the employment of an attorney is "nder an e@press alid contract fi@in the compensation for the attorney, s"chcontract is concl"sie as to the amo"nt of compensation. The Co"rt cannot, ho)eer, apply the foreoin r"le in the instant petition and treatthe fi@ed fee of ;,<<<.<< as f"ll and s"fficient consideration for priate respondent:s serices, as petitioner )o"ld hae it.

The ;,<<<.<< is independent and different from the compensation )hich priate respondent sho"ld receie in payment for his serices.6hile petitioner and priate respondent )ere able to fi@ a fee for the latter:s promise to e@tend serices, they )ere not able to come intoareement as to the la) firm:s act"al performance of serices in faor of the "nion. 8ence, the retainer areement cannot control the

meas"re of rem"neration for priate respondent:s serices.

;riate respondent is entitled to an additional rem"neration for p"rs"in leal action in the interest of petitioner before the labor arbiter andthe 3RC, on top of the ;,<<<.<< retainer fee he receied monthly from petitioner. The la) firm:s serices are decidedly )orth more thans"ch basic fee in the retainer areement. Th"s, in ;art C thereof on 9ee 5tr"ct"re,> it is een proided that all attorney:s fees collected fromthe aderse party by irt"e of a s"ccessf"l litiation shall belon e@cl"siely to priate respondent, aside from petitioner:s liability forappearance fees and reimb"rsement of the items of costs and e@penses en"merated therein.

The al"e of priate respondent:s leal serices sho"ld not be established on the basis of Article 111 of the abor Code alone. 5aid articleproides%

Art. 111. Attorney:s fees. K &a' $n cases of "nla)f"l )ithholdin of )aes the c"lpable party may be assessed attorney:s fees eH"ialent toten percent of the amo"nt of the )aes recoered.>

The implementin proision 38 of the foreoin article f"rther states%

5ec. 11. /ttorney’s fees. K Attorney:s fees in any "dicial or administratie proceedins for the recoery of )aes shall not e@ceed 1<N ofthe amo"nt a)arded. The fees may be ded"cted from the total amo"nt d"e the )innin party.>

$n the first place, the fees mentioned here are the e@traordinary attorney:s fees recoerable as indemnity for damaes s"stained by andpayable to the preailin part. $n the second place, the ten percent &1<N' attorney:s fees proided for in Article 111 of the abor Code and5ection 11, R"le D$$$, !oo $$$ of the $mplementin R"les is the ma@im"m of the a)ard that may th"s be ranted. Article 111 th"s fi@es onlythe limit on the amo"nt of attorney:s fees the ictorio"s party may recoer in any "dicial or administratie proceedins and it does not eenpreent the 3RC from fi@in an amo"nt lo)er than the ten percent &1<N' ceilin prescribed by the article )hen circ"mstances )arrant it.

The meas"re of compensation for priate respondent:s serices as aainst his client sho"ld properly be addressed by the r"le of &!ant!mmer!it lon adopted in this "risdiction. /uantum meruit , meanin as m"ch as he deseres,> is "sed as the basis for determinin the

la)yer:s professional fees in the absence of a contract, +1b"t recoerable by him from his client.

5o as not to needlessly prolon the resol"tion of a comparatiely simple controersy, the Co"rt deem it "st and eH"itable to fi@ in the presentreco"rse a reasonable amo"nt of attorney:s fees in faor of priate respondent. The Co"rt holds that the amo"nt of ;1<,<<<.<< is areasonable and fair compensation for the leal serices rendered by priate respondent to petitioner before the labor arbiter and the 3RC.

CARLOS . GALADORES, ET AL. v. CRESENCIANO B. TRA!ANO, D)&$to o/ t& Bu&#u o/ L#o R&'#t)o*s, MANGGAGA@A NG:OMUNI:ASYON SA ILIINAS ?"I@U, HILIINE LONG DISTANCE COMANY ?LDT, #*( !OSE C. ESINASG.R. No. 565 S&-t&0& 1, 1986

"#$ts%Respondent Co"nsel has been the leal co"nsel of respondent Fnion since 1*4. 9or his serices, he )as hired on a case to case

continent fee basis. On 5eptember 7, 1-, he receied a letter from the Fnion ;resident readin%

The 9ree Telephone 6orers Fnion once aain reH"est yo" to appear as co"nsel in the on oin labor disp"te at ;?T. $n consideration ofyo"r serices therein, the "nion binds itself to compensate yo" for yo"r fees and e@penses therein on a continent basis. The amo"nt shallbe 1<N of any improement, )ith retroactie effect, of the ;?T:s last offer to the deadloc in C!A neotiations )hich )e no) )ill res"lt ina comp"lsory arbitration. A s"pportin board resol"tion )ill later confirm the letter.>

;?T:s last offer> referred to on the )ae increases )as% ;2< for the first year of the proposed C!A0 ;1<< for the second year0 and ;<for the third year.

12-




The Minister of abor and Employment ass"med "risdiction oer all "nresoled iss"es in the barainin deadloc bet)een ;?T and theFnion.

The Minister of abor a)arded across(the(board )ae increases of ; <=month effectie 3oember , 1-20 ;1//=month effectie3oember , 1-, and ;1//=month effectie 3oember , 1-4, in addition to the Christmas bon"s of 1=2 month pay per employeeeffectie ?ecember, 1-, and other frine benefits.

The E@ec"tie !oard of the Fnion passed a resol"tion reH"estin ;?T to ded"ct ;11/.<< per employee for the leal serices e@tended tothe Fnion by respondent Co"nsel.

;etitioners initially n"mberin *<< and finally /,2/-, filed a letter(complaint before the MOE thro"h their a"thoried representatie,petitioner Carlos #aladores assailin the imposition of ;1<.<< &later corrected to ;1//.<<' per employee as attorney:s fees of respondentsco"nsel. ;etitioners too the position that the attorney:s fees of respondent co"nsel )ere not only "nreasonable b"t also iolatie of Article242&o' of the abor Code0 and that he ded"ctions cannot ien leal effect by a mere !oard resol"tion b"t needs the ratification by theeneral membership of the Fnion.

Respondents Fnion and Co"nsel, on the other hand, proffered the ar"ment that the attorney s fees bein e@acted pertained to his sericesd"rin comp"lsory arbitration proceedins and cannot be considered as neotiation fees or attorney:s fees )ithin the conte@t of Article 242&o'of the abor Code and that contrary to petitioners: claim that Respondent Co"nsel s"rfaced only as la)yer of the Fnion )hen the employeesthemseles enaed in mass action to force a sol"tion to the deadloc in their neotiations, he appeared contin"o"sly from 5eptember -,1- "ntil the decision in the case )as rendered on October 2, 1-. ;etitioners proposed a sol"tion offerin to pay ;1<.<< per employee,b"t Respondent Co"nsel ref"sed.

Issu&% )hether attorney:s fees may be chared aainst indiid"al members of respondent Fnion

H&'(%3o. Article 222&b' of the abor Code proides%

Article 222. Appearance and 9ees.

@ @ @

&b' 3o attorney:s fees, neotiation fees or similar chares of any ind arisin from any collectie barainin neotiations or concl"sion of the

collectie barainin areement shall be imposed on any indiid"al member of the contractin "nion0 ;roided, ho)eer, that attorney:s feesmay be chared aainst "nion f"nds in an amo"nt to be areed "pon by the parties. Any contract, areement or arranement of any sort tothe contrary shall be n"ll and oid.>

6hile Article 242 of the same Code reads%

Art. 242. Rihts and conditions of membership in a labor oraniation. The follo)in are the rihts and conditions of membership in a labororaniation%

@ @ @

&o' Other than for mandatory actiities "nder the Code, no special assessment, attorney:s fees, neotiation fees or any other e@traordinaryfees may be checed off from any amo"nt d"e an employee )itho"t indiid"al )ritten a"thoriation d"ly sined by the employee. The

a"thoriation sho"ld specifically state the amo"nt, p"rpose and beneficiary of the ded"ction.>

The Omnib"s R"les $mplementin the abor Code also proide that ded"ctions from )aes of the employees may only be made by theemployer in cases a"thoried by la), incl"din ded"ctions for ins"rance premi"ms adanced by the employer on behalf of the employees as

)ell as "nion d"es )here the riht to chec(off is a"thoried in )ritin by the indiid"al employee himself.

3o chec(offs from any amo"nts d"e employees may be effected )itho"t indiid"al )ritten a"thoriations d"ly sined by the employeespecifically statin the amo"nt, p"rpose and beneficiary of the ded"ction. The reH"ired indiid"al a"thoriations in this case are )antin. $nfact, petitioner employees are ioro"sly obectin.

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MERCURY DRUG CO., INC. v. NARDO DAYAO, ET AL.G.R. No. L73+4 S&-t&0& 3, 1984

"#$ts%A erified petition )as filed by 3ardo ?ayao and 7< others aainst Merc"ry ?r" Co., $nc., and=or Mariano "e, ;resident #eneralManaer, and Merc"ry ?r" Co., $nc., Employees Association prayin, )ith respect to respondent corporation and its president and eneralmanaer% 1' payment of their "npaid bac )aes for )or done on 5"ndays and leal holidays pl"s 2/c=c additional compensation from date

of their employment "p to +"ne <, 1*20 2' payment of e@tra compensation on )or done at niht0 ' reinstatement of +an"ario Referenteand Oscar Echalar to their former positions )ith bac salaries0 and, as aainst the respondent "nion, for its disestablishment and the ref"ndof all monies it had collected from petitioners.

Issu& K1% )hether C$R erred in s"stainin priate respondents: claims for 2/N 5"nday and leal holiday premi"ms

H&'( K1%3o. The Co"rt is not impressed by the ar"ment that "nder the contracts of employment the petitioners are not entitled to s"ch claim for thereason that the same are contrary to la). ;ayment of e@tra or additional pay for serices rendered d"rin 5"ndays and leal holidays ismandated by la). Een ass"min that the petitioners had areed to )or on 5"ndays and leal holidays )itho"t any f"rther considerationthan their monthly salaries, they are not barred neertheless from claimin )hat is d"e them, beca"se s"ch areement is contrary to p"blicpolicy and is declared n"n and oid by la).

Issu& K4% )hether C$R erred in s"stainin priate respondents: claims for nihttime )or premi"ms

H&'( K4%3o. 6itnesses for petitioners declared they )ored on re"lar days and on eery other 5"nday and also d"rin all holidays0 that for sericesrendered on 5"ndays and holidays they )ere not paid for the first 4 ho"rs and )hat they only receied )as the oertime compensationcorrespondin to the n"mber of ho"rs after or in e@cess of the first fo"r ho"rs0 and that s"ch payment is bein indicated in the oertime payfor )or done in e@cess of eiht ho"rs on re"lar )orin days. $t is also claimed that their nihttime serices co"ld )ell be seen on theirrespectie daily time records.

The respondent co"rt:s r"lin on additional compensation for )or done at niht is, therefore, not )itho"t eidence. Moreoer, the petitioner(company did not deny that the priate respondents rendered nihttime )or. T& P#)v& u'&Q is not applicable in the case at bar.Additional compensation for nihttime )or is fo"nded on p"blic policy, hence the same cannot be )aied.

COMMANDO SECURITY AGENCY v. NATIONAL LABOR RELATIONS COMMISSION #*( NEMESIO DECIERDOG.R. No. 98++ !u'2 4, 1994

"#$ts%;riate respondent 3emesio ?ecierdo )as a sec"rity "ard of the petitioner since 9ebr"ary 1-1. $n April 1-7, petitioner entered into acontract to proide "ardin serices to the Alsons ?eelopment and $nestment Corporation &A5O35 for breity' for a period of one year,i.e., from April 11, 1-7 to April 1<, 1--, "nless rene)ed "nder s"ch terms and conditions as may be m"t"ally acceptable. The n"mber of"ards to be assined by the petitioner )o"ld depend on A5O3:s demand, sometimes 2 "ards on a daily shift, and sometimes 4 "ards.?ecierdo )as one of the "ards assined to the Aldeinco !"ildin by the petitioner.

Maria Mila ?. 5amonte, ;roperties Administration 8ead of A5O35, reH"ested the petitioner for a periodic resh"fflin> of "ards. ;"rs"ant

to that reH"est of its client, petitioner sered a recall order on ?ecierdo.

A ?etail Order )as iss"ed to ?ecierdo assinin him to the ;acific Oil Company in !"na)an, ?aao City, )ith instr"ction to report to themanaer, b"t ?ecierdo ref"sed to accept the assinment.

On the effectie date of the detail order, ?ecierdo filed a complaint for illeal dismissal, "nfair labor practice, "nderpayment of )aes,oertime pay, niht premi"m, 1th month pay, holiday pay, rest day pay and incentie leae pay.

Issu& K1% )hether ?ecierdo had abandoned his employment

1<




H&'( K1%3o. The first ro"nd of the petition is not )ell taen for the 3RC did find that ?ecierdo had ien "p his ob and chose separation pay in l ie"of reinstatement. As a res"lt, the 3RC dismissed the chare of illeal dismissal and "nfair labor practice aainst the petitioner and denied?ecierdo:s claim for separation pay.

Issu& K4% )hether petitioner )as denied d"e process of la)

H&'( K4%3o. ;roced"ral d"e process merely reH"ires notice and opport"nity to be heard )hich the petitioner )as ien then it filed its position paper.The petitioner )as properly notified and een too part in the conciliation conference for the amicable settlement of the case. $t )as madea)are of the nat"re and specifics of the chares aainst it b"t failed to ref"te them e@pectin that a hearin )o"ld be called. 8o)eer, theabor Arbiter proceeded to decide the case based on the parties: position papers, the records s"bmitted by petitioner, and the report and thecomp"tations made by the Corporate A"ditin E@aminer reardin the s"ms )hich ?ecierdo )as entitled to recoer. That proced"recomplied )ith the Reised R"les of the 3RC, partic"larly 5ections 2 and , )hich proide%

5ec. 2. S!bmission of position papers. K ?"rin the initial conference=hearin, or immediately thereafter. the abor Arbiter shall reH"ire theparties to sim"ltaneo"sly s!bmit to him their respective verified position papers, which shall cover only the iss!es raised in the complaint,accompanied by all s!pporting doc!ments then available to them and the affidavits of their witnesses which shall ta$e the place of their direct testimony . The parties shall thereafter not be allo)ed to allee, or present eidence to proe, facts not referred to and any ca"se orca"ses of action not incl"ded in their complaint or position papers, affidaits and other doc"ments. The parties shall f"rnish each other )ithcopies of the position papers, toether )ith the s"pportin affidaits and doc"ments s"bmitted by them.

5ec. . Determination of necessity of hearing. K $mmediately after the s"bmission by the parties of their position papers and s"pportinproofs, the Labor /rbiter shall determine whether there is a need for a formal hearing or investigation . At this state, he may, in his discretion,and for the p"rpose of main s"ch determination, elicit pertinent facts or information, incl"din doc"mentary eidence, if any, from any partyor )itness to complete, as far as possible, the facts of the case. 9acts or information so elicited may sere as basis for his clarification orsimplication and limitation of the iss"es in the case, enco"rain for this p"rpose the s"bmission by the parties of admissions andstip"lations of fact to abbreiate the proceedins. 8e shall participate actiely in the preparation of s"ch stip"lations, main s"estions on

)hat facts the parties need not proe.>

The abor Arbiter may, in his so"nd discretion, dispense )ith a hearin and reH"ire, instead, the parties to file their respectie positionpapers toether )ith all the s"pportin proofs all that respondent had to do )as present its payrolls and other records )hich it is reH"ired toeep and maintain and it co"ld already be determined on the face thereof if complainant:s monetary claims had act"ally been paid or not

complainant:s entitlements )ere comp"ted by the Corporate A"ditin E@aminer on the basis of respondent:s records )hich )as sec"red byirt"e of a s!bpoena d!ces tec!m.

Issu& K3% )hether ?ecierdo is in estoppel

H&'( K3%3o. ;etitioner:s contention that ?ecierdo is estopped from complainin abo"t the 2/N ded"ction from his salary representin petitioner:sshare in proc"rin ob placement for him, is not )ell taen. That proision of the employment contract )as illeal and iniH"ito"s, hence, n"lland oid.

"IE ! TAFI #*(o !UAN S. ARMAMENTO v. NATIONAL LABOR RELATIONS COMMISSION, DOMINGO MALDIGAN #*( GILBERTO

SABSALONG.R. No. 111+5+ August 44, 199+

"#$ts%;riate respondents ?omino Maldian and #ilberto 5absalon )ere hired by the petitioners as ta@i driers and, as s"ch, they )ored for 4days )eely on a 24(ho"r shiftin sched"le. Aside from the daily bo"ndary> of ;7<<.<< for air(conditioned ta@i or ;4/<.<< for non(air(conditioned ta@i, they )ere also reH"ired to pay ;2<.<< for car )ashin, and to f"rther mae a ;1/.<< deposit to ans)er for any deficiency intheir bo"ndary,> for eery act"al )orin day.

$n less than 4 months after Maldian )as hired as an e@tra drier by the petitioners, he already failed to report for )or for "nno)n reasons.ater, petitioners learned that he )as )orin for Mine of #old> Ta@i Company. 6ith respect to 5absalon, )hile driin a ta@icab of

11




petitioners on 5eptember *, 1-, he )as held "p by his armed passener )ho too all his money and thereafter stabbed him. 8e )ashospitalied and after his dischare, he )ent to his home proince to rec"perate.

$n +an"ary, 1-7, 5absalon )as re(admitted by petitioners as a ta@i drier "nder the same terms and conditions as )hen he )as firstemployed, b"t his )orin sched"le )as made on an alternatie basis,> that is, he droe only eery other day. 8o)eer, on seeraloccasions, he failed to report for )or d"rin his sched"le.

5absalon failed to remit his bo"ndary> of ;7<<.<< for the preio"s day. Also, he abandoned his ta@icab in Maati )itho"t f"el refill )orth;<<.<<. ?espite repeated reH"ests of petitioners for him to report for )or, he adamantly ref"sed. After)ards it )as reealed that he )asdriin a ta@i for !"lala Company.>

5ometime in 1-, Maldian reH"ested petitioners for the reimb"rsement of his daily cash deposits for 2 years, b"t herein petitioners toldhim that not a sinle centao )as left of his deposits as these )ere not een eno"h to coer the amo"nt spent for the repairs of the ta@i he

)as driin. This )as alleedly the practice adopted by petitioners to reco"p the e@penses inc"rred in the repair of their ta@icab "nits. 6henMaldian insisted on the ref"nd of his deposit, petitioners terminated his serices. 5absalon, on his part, claimed that his termination fromemployment )as effected )hen he ref"sed to pay for the )ashin of his ta@i seat coers.

;riate respondents filed a complaint )ith the Manila Arbitration Office of the 3ational abor Relations Commission charin petitioners )ithilleal dismissal and illeal ded"ctions.

Respondent 3RC held that the ;1/.<< daily deposits made by respondents to defray any shortae in their bo"ndary> is coered by theeneral prohibition in Article 114 of the abor Code aainst reH"irin employees to mae deposits, and that there is no sho)in that the5ecretary of abor has reconied the same as a practice> in the ta@i ind"stry. ConseH"ently, the deposits made )ere illeal and therespondents m"st be ref"nded therefor.

Issu&% )hether petitioner is liable for illeal ded"ctions

H&'(%Bes. Article 114 of the abor Code proides as follo)s%

Art. 114. Deposits for loss or damage. K 3o employer shall reH"ire his )orer to mae deposits from )hich ded"ctions shall be made forthe reimb"rsement of loss of or damae to tools, materials, or eH"ipment s"pplied by the employer, e@cept )hen the employer is enaed ins"ch trades, occ"pations or b"siness )here the practice of main deposits is a reconied one, or is necessary or desirable as determined

by the 5ecretary of abor in appropriate r"les and re"lations.>

Clearly, the same does not apply to or permit deposits to defray any deficiency )hich the ta@i drier may inc"r in the remittance of hisbo"ndary.> Also, )hen priate respondents stopped )orin for petitioners, the alleed p"rpose for )hich petitioners reH"ired s"ch"na"thoried deposits no loner e@isted. $n other case, any balance d"e to priate respondents after proper acco"ntin m"st be ret"rned tothem )ith leal interest.

9rom 1-7(11, 5absalon )as able to )ithdra) his deposits thro"h vales or he inc"rred shortaes, s"ch that he is een indebted topetitioners in the amo"nt of ;,44-.<<. 6ith respect to Maldian:s deposits, nothin )as mentioned H"estionin the same een in thepresent petition. 5ince the eidence sho)s that he had not )ithdra)n the same, he sho"ld be reimb"rsed the amo"nt of his acc"m"latedcash deposits.

On the matter of the car )ash payments, the labor arbiter had this to say in his decision% Anent the iss"e of illeal ded"ctions, there is no

disp"te that as a matter of practice in the ta@i ind"stry, after a to"r of d"ty, it is inc"mbent "pon the drier to restore the "nit he has drien tothe same clean condition )hen he too it o"t, and as claimed by the petitioners, priate respondents )ere made to sho"lder the e@pensesfor )ashin, the amo"nt doled o"t )as paid directly to the person )ho )ashed the "nit, th"s )e find nothin illeal in this practice, m"chmore to consider the amo"nt paid by the drier as illeal ded"ction in the conte@t of the la).>

ConseH"ently, priate respondents are not entitled to the ref"nd of the ;2<.<< car )ash payments they made. $t )ill be noted that there )asnothin to preent priate respondents from cleanin the ta@i "nits themseles, if they )anted to sae their ;2<.<<.

On the last iss"e of attorney:s fees or serice fees for priate respondents: a"thoried representatie, Article 222 of the abor Code, asamended by 5ection of ;residential ?ecree 3o. 1*1, states that non(la)yers may appear before the 3RC or any labor arbiter only &1' ifthey represent themseles, or &2' if they represent their oraniation or the members thereof. 6hile it may be tr"e that #"illermo 8. ;"lia

12




)as the a"thoried representatie of priate respondents, he )as a non(la)yer )ho did not fall in either of the foreoin cateories. 8ence,by clear mandate of the la), he is not entitled to attorney:s fees.

SECIAL STEEL RODUCTS, INC. v. LUTGARDO ILLAREAL AND "REDERIC: SOG.R. No. 1+33+ !u'2 8, 4+

"#$ts%5pecial 5teel ;rod"cts, $nc., petitioner, is a domestic corporation enaed in the principal b"siness of importation, sale, and maretin of!O8ER steel prod"cts. "tardo C. Dillareal and 9rederic #. 5o, respondents, )ored for petitioner as assistant sales manaer andsalesman, respectiely.

5ometime in May 1, respondent Dillareal obtained a car loan from the !an of Commerce, )ith petitioner as s"rety, as sho)n by acontin"in s"retyship areement> and promissory note> )herein they ointly and seerally areed to pay the ban ;7-*,*11.*< in 72monthly installments.

5ometime in A""st 14, petitioner sponsored> respondent 9rederic 5o to attend a trainin co"rse in Papfenber, A"stria cond"cted by!O8ER, petitioner:s principal company. This trainin )as a re)ard for respondent 5o:s o"tstandin sales performance. 6hen respondentret"rned months thereafter, petitioner directed him to sin a memorand"m proidin that !O8ER reH"ires trainees from Papfenber tocontin"e )orin )ith petitioner for a period of years after the trainin. Other)ise, each trainee shall ref"nd to !O8ER *,<<<.<< &F5dollars' by )ay of set(off or compensation. On +an"ary 1*, 17 or 2 years and 4 months after attendin the trainin, respondent resinedfrom petitioner.

$mmediately, petitioner ordered respondents to render an acco"ntin of its ario"s Christmas iea)ays they receied. These )ereintended for distrib"tion to petitioner:s c"stomers.

$n protest, respondents demanded from petitioner payment of their separation benefits, commissions, acation and sic leae benefits, andproportionate 1th month pay. !"t petitioner ref"sed and instead, )ithheld their 1thmonth pay and other benefits.

Respondents filed )ith the abor Arbiter a complaint for payment of their monetary benefits aainst petitioner and its president, A""sto;ardo.

Issu&%May an employer )ithhold its employees: )aes and benefits as lien to protect its interest as a s"rety in the latter:s car loan and for

e@penses inc"rred in a trainin abroadL

H&'(%3o. Article 11* of the abor Code, as amended, proides%

ART. 11*. <ithholding of wages and $ic$bac$s prohibited. G It s#'' & u*'#/u' /o #*2 -&so*, ()&$t'2 o )*()&$t'2, to )to'( #*2#0ou*t /o0 t& #g&s ?#*( &*&/)ts o/ # o>& or ind"ce him to ie "p any part of his )aes by force, stealth, intimidation, threat orby any other means )hatsoeer )tout t& o>&=s $o*s&*t.>

;etitioner has no leal a"thority to )ithhold respondents: 1th month pay and other benefits. 6hat an employee has )ored for, hisemployer m"st pay. Th"s, an employer cannot simply ref"se to pay the )aes or benefits of its employee beca"se he has either defa"lted inpayin a loan "aranteed by his employer0 or iolated their memorand"m of areement0 or failed to render an acco"ntin of his employer:sproperty.

The contract e@ec"ted by petitioner and respondent Dillareal &in faor of the !an of Commerce' is a $o*t#$t o/ su&t2. $n fact, it isdenominated as a contin"in s"retyship areement.> 8ence, petitioner co"ld not "st "nilaterally )ithhold respondent:s )aes or benefits asa preliminary remedy "nder Article 2<71. $t m"st file an action aainst respondent Dillareal.

As to respondent 5o, petitioner maintains that there can be a set(off or leal compensation bet)een them. ConseH"ently, it can )ithhold his1th month pay and other benefits.

9or leal compensation to tae place, the reH"irements set forth in Articles 127- and 127 of the Ciil Code, H"oted belo), m"st be present.

ART$CE 127-. Compensation shall tae place )hen t)o persons, in their o)n riht, are creditors and debtors of each other.

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ART$CE 127. $n order that compensation may be proper, it is necessary%

&1' That each one of the obliors be bo"nd principally, and that he be at the same time a principal creditor of the other0&2' That both debts consist in a s"m of money, or if the thins d"e are cons"mable, they be of the same ind, and also of the same

H"ality if the latter has been stated0:&' That the t)o debts be d"e0

&4' That they be liH"idated and demandable0&/' That oer neither of them there be any retention or controersy, commenced by third persons and comm"nicated in d"e time to the

debtor.>

$n the present case, set(off or leal compensation cannot tae place bet)een petitioner and respondent 5o beca"se they are not m"t"allycreditor and debtor of each other.A caref"l readin of the Memorand"m reeals that the l"mp s"m compensation of not less than F5 *,<<<.<< )ill hae to be ref"nded> byeach trainee to !O8ER, not to petitioner.

METROOLITAN BAN: < TRUST COMANY EMLOYEES UNION7ALU7TUC #*( ANTONIO . BALINANG v. NATIONAL LABORRELATIONS COMMISSION ?4*( D)v)s)o* #*( METROOLITAN BAN: #*( TRUST COMANYG.R. No. 14636 S&-t&0& 1, 1993

"#$ts%On 2/ May 1-, the ban entered into a collectie barainin areement )ith the M!TCEF, rantin a monthly ;<< )ae increaseeffectie <1 +an"ary 1-, ;*<< )ae increase <1 +an"ary 1<, and ;2<< )ae increase effectie <1 +an"ary 11. The M!TCEF hadalso barained for the incl"sion of probationary employees in the list of employees )ho )o"ld benefit from the first ;<< increase b"t theban had adamantly ref"sed to accede thereto. ConseH"ently, only re"lar employees as of <1 +an"ary 1- )ere ien the increase to thee@cl"sion of probationary employees.

!arely a month later, Rep"blic Act *727 too effect. $ts proisions, pertinent to this case, state%

5ec. 4. &a' Fpon the effectiity of this Act, the stat"tory minim"m )ae rates of all )orers and employees in the priate sector, )hetheraric"lt"ral or non(aric"lt"ral, shall be increased by t)enty(fie pesos &;2/' per day, ...% +rovided , That those already receiin aboe theminim"m )ae rates "p to one h"ndred pesos &;1<<.<<' shall also receie an increase of t)enty(fie pesos &;2/.<<' per day ...

@ @ @

&d' $f e@pressly proided for and areed "pon in the collectie barainin areements, all increase in the daily basic )ae rates ranted bythe employers three &' months before the effectiity of this Act shall be credited as compliance )ith the increases in the )ae ratesprescribed herein, provided that, )here s"ch increases are less than the prescribed increases in the )ae rates "nder this Act, the employershall pay the difference. 5"ch increase shall not incl"de anniersary )ae increases, merit )ae increase and those res"ltin from there"lariation or promotion of employees.

6here the application of the increases in the )ae rates "nder this 5ection res"lts in distortions as defined "nder e@istin la)s in the )aestr"ct"re )ithin an establishment and ies rise to a disp"te therein, s"ch disp"te shall first be settled ol"ntarily bet)een the parties and inthe eent of a deadloc, the same shall be finally resoled thro"h comp"lsory arbitration by the reional branches of the 3ational aborRelations Commission &3RC' hain "risdiction oer the )orplace.

$t shall be mandatory for the 3RC to cond"ct contin"o"s hearins and decide any disp"te arisin "nder this 5ection )ithin t)enty &2<'calendar days from the time said disp"te is formally s"bmitted to it for arbitration. The pendency of a disp"te arisin from a )ae distortionshall not in any )ay delay the applicability of the increase in the )ae rates prescribed "nder this 5ection.>

;"rs"ant to the aboe proisions, the ban ae the ;2/ increase per day, or ;7/< a month, to its probationary employees and to those )hohad been promoted to re"lar or permanent stat"s before <1 +"ly 1- b"t )hose daily rate )as ;1<< and belo). The ban ref"sed to iethe same increase to its re"lar employees )ho )ere receiin more than ;1<< per day and recipients of the ;<< C!A increase.

Contendin that the ban:s implementation of Rep"blic Act *727 res"lted in the cateoriation of the employees into &a' the probationaryemployees as of < +"ne 1- and re"lar employees receiin ;1<< or less a day )ho had been promoted to permanent or re"lar stat"s

14




before <1 +"ly 1-, and &b' the re"lar employees as of <1 +"ly 1-, )hose pay )as oer ;1<< a day, and that, bet)een the t)o ro"ps,there emered a s"bstantially red"ced salary ap, the M!TCEF so"ht from the ban the correction of the alleed distortion in pay.

Issu&% )hether or not the implementation by the Metropolitan !an and Tr"st Company of Rep"blic Act 3o. *727, mandatin an increase in pay of;2/ per day for certain employees in the priate sector, created a distortion that )o"ld reH"ire an ad"stment "nder said la) in the )aes ofthe latter:s other ario"s ro"ps of employees

H&'(%Bes. @#g& ()stot)o* means a sit"ation )here an increase in prescribed )ae rates res"lts in the elimination or seere contradiction ofintentional H"antitatie differences in )ae or salary rates bet)een and amon employee ro"ps in an establishment as to effectielyobliterate the distinctions embodied in s"ch )ae str"ct"re based on sills, lenth of serice, or other loical bases of differentiation.

6ae distortion can so e@ist )hen, as a res"lt of an increase in the prescribed )ae rate, an elimination or seere contraction of intentionalH"antitatie differences in )ae or salary rates> )o"ld occ"r bet)een and amon employee ro"ps in an establishment as to effectielyobliterate the distinctions embodied in s"ch )ae str"ct"re based on sills, lenth of serice, or other loical bases of differentiation.> $nmandatin an ad"stment, the la) did not reH"ire that there be an elimination or total abroation of H"antitatie )ae or salary differences0 aseere contraction thereof is eno"h. The contraction bet)een personnel ro"pins comes close to eihty(three &-N', )hich cannot, byany stretch of imaination, be considered less than seere.

The intentional H"antitatie differences> in )ae amon employees of the ban has been set by the C!A to abo"t ;<< per month as of <1+an"ary 1-. $t is intentional as it has been arried at thro"h the collectie barainin process to )hich the parties are thereby concl"ded.The intention of the parties, )hether the benefits "nder a collectie barainin areement sho"ld be eH"ated )ith those ranted by la) ornot, "nless there are compellin reasons other)ise, m"st preail and be ien effect.

The Co"rt finds the form"la s"ested then by Commissioner !onto(;ere to )ell be the appropriate meas"re to balance the respectiecontentions of the parties in this instance. 5"ch form"la is as follo)s%

Minim"m 6ae Y N @ ;rescribed Y ?istortion Ad"stmentAct"al 5alary

ILA@ AT BU:LOD NG MANGGAGA@A ?IBM v. NATIONAL LABOR RELATIONS COMMISSION ?")st D)v)s)o*, HON. CARMENTALUSAN #*( SAN MIGUEL CORORATION

G.R. No. 9198 !u*& 45, 1991

"#$ts%Fpon the effectiity of the Rep"blic Act 3o. *727, other)ise no)n as the 6ae Rationaliation Act, on +"ne /, 1-, the "nion no)n asIlaw at 8!$lod *g 'anggagawa BI8'C> K said to represent 4,/<< employees of 5an Mi"el Corporation K presented to the company ademand for correction of the sinificant distortion in the )orers: )aes. $n that demand, the Fnion e@plicitly inoed 5ection 4 &d' of RA*727. !"t the Fnion claims that demand )as inored.

The Fnion:s position )as that the )orers: ref"se to )or beyond - ho"rs eeryday startin October 1*, 1-> as a leitimate means ofcompellin 5MC to correct the distortion in their )aes bro"ht abo"t by the implementation of the said la)s &R.A. **4< and R.A. *727' tone)ly(hired employees. That decision to obsere the eiht ho"rs )or shift )as implemented on October 1*, 1- by some -<< daily(paid

)orers at the ;olo ;lant:s prod"ction line &of 5an Mi"el Corporation Ihereafter, simply 5MCJ' oined by others at statistical H"ality controland )areho"se, all members of $!M.

This abandonment of the lon(standin sched"le of )or and the reersion to the eiht(ho"r shift apparently ca"sed s"bstantial losses to5MC. $ts claim is that there ens"ed )or disr"ption and lo)er efficiency res"ltin in t"rn, in lost prod"ction of 2,<<4,1</ cases of beer0 that inmoney terms, 5MC lost ;174,*/7,/- in sales and ;4-,<4,11 in reen"es and the #oernment lost e@cise ta@ reen"e of ;42 million,comp"ted at the rate of ;21 per case collectible at the plant.

5MC filed )ith the Arbitration !ranch of the 3ational abor Relations Commission a complaint aainst the Fnion and its members to declarethe strie or slo)do)n illeal and to terminate the employment of the "nion officers and shop ste)ards.

Issu&%

1/




)hether the strie or slo)do)n )as illeal

H&'(%Bes. $n the partic"lar instance of distortions of the )ae str"ct"re )ithin an establishment> res"ltin from the application of any prescribed

)ae increase by irt"e of a la) or )ae order, 5ection of Rep"blic Act 3o. *727 prescribes a specific, detailed and comprehensieproced"re for the correction thereof, thereby implicitly e@cl"din stries or loco"ts or other concerted actiities as modes of settlement of theiss"e. The proision states that%

the employer and the "nion shall negotiate to correct the distort(ions. Any disp"te arisin from )ae distortions shall be resoled thro"h thegrievance proced!re !nder their collective bargaining agreement and, if it remains "nresoled, thro"h vol!ntary arbitration. Fnlessother)ise areed by the parties in )ritin, s"ch disp"te shall be decided by the ol"ntary arbitrator or panel of ol"ntary arbitrators )ithin ten&1<' calendar days from the time said disp"te )as referred to ol"ntary arbitration.

$n cases )here there are no collectie areements or reconied labor "nions, the employers and )orers shall endeaor to correct s"chdistortions. Any disp"te arisin therefrom shall be settled thro!gh the *ational #onciliation and 'ediation 8oard and, if it remains "nresoledafter ten &1<' calendar days of conciliation, shall be referred to the appropriate branch of the *ational Labor Relations #ommission B*LR#C .$t shall be mandatory for the 3RC to cond"ct contin"o"s hearins and decide the disp"te )ithin t)enty &2<' calendar days from the timesaid disp"te is s"bmitted for comp"lsory arbitration.

The pendency of a disp"te arisin from a )ae distortion shall not in any way delay the applicability of any increase in prescribed wagerates p"rs"ant to the proisions of la) or 6ae Order.>

5ection 1*, Chapter $ of r"les implementin RA *727, after reiteratin the policy that )ae distortions be first settled ol"ntarily by the partiesand eent"ally by comp"lsory arbitration, declares that, /ny iss!e involving wage distortion shall not be a gro!nd for a stri$e5loc$o!t .>

Moreoer, the collectie barainin areement bet)een the 5MC and the Fnion also prescribes a similar esche)al of stries or other similaror related concerted actiities as a mode of resolin disp"tes or controersies, enerally, said areement clearly statin that settlement ofall disp"tes, disareements the stip"lated rieance proced"re and "ltimately by arbitration. The proisions are as follo)s%

5ection 1. Any and all disp"tes, disareements and controersies of any ind bet)een the COM;A3B and the F3$O3 and=or the )orersinolin or relatin to )aes, ho"rs of )or, conditions of employment and=or employer(employee relations arisin d"rin the effectiity ofthis Areement or any rene)al thereof, shall be settled by arbitration in accordance )ith the proced"re set o"t in this Article. 3o disp"te,disareement or controersy )hich may be s"bmitted to the rieance proced"re in Article $Q shall be presented for arbitration "nless all thesteps of the rieance proced"re are e@ha"sted &Article D K Arbitration'.

5ection 1. The F3$O3 arees that there shall be no stries, )alo"ts, stoppae or slo)do)n of )or, boycotts, secondary boycotts, ref"salto handle any merchandise, picetin, sit(do)n stries of any ind, sympathetic or eneral stries, or any other interference )ith any of theoperations of the COM;A3B d"rin the terms of this areement &Article D$'.>

The Fnion )as th"s prohibited to declare and hold a strie or other)ise enae in non(peacef"l concerted actiities for the settlement of itscontroersy )ith 5MC in respect of )ae distortions, or for that matter0 any other iss"e inolin or relatin to )aes, ho"rs of )or,conditions of employment and=or employer(employee relations.> The partial strie or concerted ref"sal by the Fnion members to follo) thefie(year(old )or sched"le )hich they had therefore been obserin, resorted to as a means of coercin correction of )ae distortions,>

)as therefore forbidden by la) and contract and, on this acco"nt, illeal.

MANILA MANDARIN EMLOYEES UNION v. NATIONAL LABOR RELATIONS COMMISSION, S&$o*( D)v)s)o*, #*( t& MANILA

MANDARIN HOTELG.R. No. 186 Nov&0& 19, 1996

"#$ts%The Manila Mandarin Employees Fnion &hereafter F3$O3', as e@cl"sie barainin aent of the ran(and(file employees of the ManilaMandarin 8otel, $nc. &hereafter MA3?AR$3', filed )ith the 3RC Arbitration !ranch a complaint in its members: behalf to compelMA3?AR$3 to pay the salary differentials of the indiid"al employees concerned beca"se of )ae distortions in their salary str"ct"realleedly created by the "p)ard reisions of the minim"m )ae p"rs"ant to ario"s ;residential ?ecrees and 6ae Orders, and the fail"reof MA3?AR$3 to implement the correspondin increases in the basic salary rate of ne)ly(hired employees.

The releant ;residential ?ecrees and 6ae Orders )ere specified by the F3$O3 as follo)s%

1*




a. ;? 1-, amendin ;? 2-, mandatin an increase in the stat"tory minim"m )ae by ;.<< spread o"t oer a period of three years, asfollo)s% ;1.<< startin +"ly 1, 17-0 ;1.<< startin May 1, 170 and ;1.<< startin May 1, 1-<.

b. ;? 1*14, proidin that )orers coered by ;? 1-, )hether aric"lt"ral or non(aric"lt"ral, sho"ld receie an increase of ;2.<< intheir stat"tory minim"m )ae effectie April 1, 17, the same representin an acceleration of the remainin increases "nder ;? 1-0 andthat all non(aric"lt"ral )orers in Metro Manila shall receie a minim"m )ae of ;12.<<0

c. ;? 171, iss"ed on A""st 1-, 1-<, proidin an increase in the minim"m daily )ae rates and for additional allo)ance0 increasin theminim"m daily )ae rates by ;1.<<, and proidin that all priate employers shall pay their employees )ith )aes or salaries not e@ceedin;1,/<<.<< a month, an additional mandatory liin allo)ance of ;*<.<< a month for non(aric"lt"ral )orers, ;4/.<< for plantation )orersand ;<.<< a month for aric"lt"ral non(plantation )orers0

d. ;? 17/1, iss"ed on ?ecember 14, 1-<, increasin the stat"tory daily minim"m )aes by interatin the ;4.<< mandatory allo)ance"nder ;? /2/ and ;? 112 into the basic pay of all coered )orers0

e. 6ae Order 3o. 1, iss"ed on March 2*, 1-1, increasin the mandatory emerency liin allo)ance of all )orers )ith salaries or )aesof ;1,/<<.<< a month by ;2.<< a day for non(aric"lt"ral )orers, ;1./< a day for aric"lt"ral plantation )orers, ;1.<< a day for aric"lt"ralnon(plantation )orers, effectie March 22, 1-10

f. 6ae Order 3o. 2 iss"ed on +"ly *, 1- increasin the mandatory basic minim"m )ae and. liin allo)ance for non(aric"lt"ral andaric"lt"ral )orers in the follo)in manner>

1' 9or non(aric"lt"ral employees, receiin not more than ;1,-<<.<< monthly, ;1.<< a day as minim"m )ae and ;1./< a day ascost of liin allo)ance0

2' 9or plantation aric"lt"ral employees, ;1.<< a day as minim"m )ae and ;<./< a day as cost of liin allo)ance s"bect to thesame salary ceilin proided in the immediately precedin section0 and

' 9or non(plantation aric"lt"ral employees, ;1.<< a day as minim"m )ae0 and

also, proidin that effectie October 1, 1-, the liin allo)ance rates as ad"sted in the precedin section shall be f"rther increaseds"bect to the same salary ceilin, for non(aric"lt"ral employees, by ;1.<<.

. 6ae Order 3o. iss"ed 3oember 7, 1- increasin the stat"tory minim"m )ae rates for )orers in the priate sector by ;1.<< perday effectie 3oember 1, 1-, and also increasin the stat"tory )ae rates by ;1.<< per day, effectie ?ecember 1, 1-0

h. 6ae Order 3o. 4 iss"ed on May 1, 1-4 increasin the stat"tory daily minim"m )aes, after interatin the mandatory liin allo)ance"nder ;?s 1*14, 1*4, 1*7- and 171 into the basic pay of all coered employees, effectie May 1, 1-40 K after the interation, theminim"m daily )ae rate )as increased by ;11.<< for non(aric"lt"ral )orers.

i. 6ae Order 3o. / iss"ed on +"ne 11, 1-4 increasin the stat"tory daily minim"m )ae rates and liin allo)ances of )orers in thepriate sector by ;.<< effectie +"ne 1*, 1-4 K the minim"m daily )ae rates became ;/.<< for Metro Manila and ;4.<< for o"tsideMetro Manila0 and

. 6ae order 3o. *, effectie 3oember 1, 1-4, increasin the stat"tory minim"m )ae rate by ;2.<< per day.>

Issu&% )hether or not a )ae distortion e@ists as a conseH"ence of the rant of a )ae increase to certain employees

H&'(%3o. The clear mandate of those iss"ances )as merely to increase the preailin minim"m )aes of partic"lar employee ro"ps. There )ereno across(the(board increases to all employees0 increases )ere reH"ired only as reards those specified therein. $t )as therefore incorrectfor the F3$O3 to claim that all its members became a"tomatically entitled to across(the(board increases "pon the effectiity of the ?ecreesand 6ae Orders in H"estion. And een if there )ere )ae distortions, )hich is not the case here, the appropriate remedy there"nderprescribed is for the employer and the "nion to neotiate> to correct them0 or, if the disp"te be not thereby resoled, to thresh o"t thecontroersy thro"h the rieance proced"re in the collectie barainin areement, or thro"h conciliation or arbitration.

The F3$O3:5 $nternal Dice(;resident that there )ere more or less 1 persons fo"nd to hae s"ffered )ae distortion, and the F3$O3pointed o"t that )hile these thirteen employees occ"pied similar positions, they )ere receiin different rates of salary.

17




Respondent Commission ho)eer fo"nd that as e@plained by priate respondents, s"ch disparity )as d"e simply to the fact that theemployees mentioned had been hired on different dates and )ere th"s receiin different salaries0 or that an employee )as hired initially ata position leel carryin a hirin rate hiher than the others0 or that an employee failed to meet the c"t(off date in the rant of yearly C!Aincrease0 or that the "nion did not et the correct data on salaries.

The Co"rt arees that the claimed )ae distortion )as act"ally a res"lt of the F3$O3:5 fail"re to appreciate ario"s circ"mstances relatin

to the employment of the thirteen employees. 9or instance, )hile some of these employees occ"pied the same or similar positions, they )ere hired by the 8otel on different dates and at different salaries.

Respondent Commission correctly concl"ded that these did not represent cases of )ae distortion contemplated by the la) &Article 124,abor Code, as amended', i .e., a sit"ation )here an increase in prescribed )ae rates res"lts in the elimination or seere contraction ofintentional H"antitatie differences in )ae or salary rates bet)een and amon employees ro"ps in an establishment as to effectielyobliterate the distinctions embodied in s"ch )ae str"ct"re based on sills, lenth of serice, or other loical basis of differentiation.>

9inally, the matter of )ae distortion, act"al or imp"ted "nder the ario"s iss"ances "p to 6ae Order 3o. *, had been settled by the partiesthro"h the e@ec"tion of a Compromise Areement.

The abor Code reconies the concl"sieness of compromises as a means to settle and end labor disp"tes. Article 227 proides that anycompromise settlement, incl"din those inolin labor standard la)s, ol"ntarily areed "pon by the parties )ith the assistance of the!"rea" or the reional office of the ?epartment of abor, shall be final and bindin "pon the parties. The 3ational abor RelationsCommission or any co"rt shall not ass"me "risdiction oer iss"es inoled therein e@cept in case of non(compliance thereof or if there is

prima facie eidence that the settlement )as obtained thro"h fra"d, misrepresentation or coercion.>

Th"s, and aain ass"min arg!endo the e@istence of a )ae distortion, this )as corrected "nder the f"lly implemented> CompromiseAreement0 2/ and s"ch correction hain been e@plicitly acno)leded by the F3$O3, it is no) estopped from claimin that a distortion stills"bsists. $n the same manner, )hen the F3$O3 entered into a ne) collectie barainin areement )ith MA3?AR$3, proidin for )aeincreases in 1-7, it is deemed to hae thereby settled any remainin H"estion of )ae distortion, since the s"bect of )aes and )aedistortions )ere plainly and "naoidably an economic iss"e and the proper s"bect of collectie barainin.

RUBAN:ERS ASSOCIATION v. RUDENTIAL BAN: < TRUST COMANYG.R. No. 1314+5 !#*u#2 4, 1999

"#$ts%The Reional Tripartite 6aes and ;rod"ctiity !oard of Reion D iss"ed 6ae Order 3o. R! </(< )hich proided for a COA to )orersin the priate sector )ho haIdJ rendered serice for at least months before its effectiity, and for the same period ItJhereafter, in thefollo)in cateories% ;17./< in the cities of 3aa and easpi0 ;1/./< in the m"nicipalities of Tabaco, ?araa, ;ili and the city of $ria0 and;1<.<< for all other areas in the !icol Reion.

5"bseH"ently, the Reional Tripartite 6aes and ;rod"ctiity !oard of Reion D$$ iss"ed 6ae Order 3o. R! D$$(<, )hich directed theinteration of the COA mandated p"rs"ant to 6ae Order 3o. RO D$$(<2(A into the basic pay of all )orers. $t also established an increasein the minim"m )ae rates for all )orers and employees in the priate sector as follo)s% by ;1<.<< in the cities of Ceb", Manda"e andap"lap"0 ;/.<< in the m"nicipalities of Compostela, iloan, Consolacion, Cordoa, Talisay, Minlanilla, 3aa and the cities of ?aao,Toledo, ?"ma"ete, !ais, Canlaon and Tabilaran.

The petitioner then ranted a COA of ;17./< to its employees at its 3aa !ranch, the only branch coered by 6ae Order 3o. R! /(<,

and interated the ;1/<.<< per month COA into the basic pay of its ran(and(file employees at its Ceb", Mabolo and ;. del Rosariobranches, the branches coered by 6ae Order 3o. R! D$$(<.

Issu&% )hether or not a )ae distortion res"lted from respondent:s implementation of the aforecited 6ae Orders

H&'(%3o. The stat"tory definition of )ae distortion is fo"nd in Article 124 of the abor Code, as amended by Rep"blic Act 3o. *727, )hich reads%

Art. 124. 5tandards=Criteria for Minim"m 6ae 9i@in K

1-




9rom the aboe(H"oted rationale of the la), as )ell as the criteria en"merated, a disparity in )aes bet)een employees )ith similarpositions in different reions is necessarily e@pected. $n insistin that the employees of the same pay class in different reions sho"ld receiethe same compensation, petitioner has apparently mis"nderstood both the meanin of wage distortion and the intent of the la) to reionalie

)ae rates.

Daryin in each reion of the co"ntry are controllin factors s"ch as the cost of liin0 s"pply and demand of basic oods, serices andnecessities0 and the p"rchasin po)er of the peso. Other considerations "nderscore the necessity of the la). 6aes in some areas may be

increased in order to preent miration to the 3ational Capital Reion and, hence, to deconest the metropolis.

AEF MINING COMANY, INC. v. NATIONAL LABOR RELATIONS COMMISSION #*( SANDIGAN NG MANGGAGA@ANG ILIINO,&-&s&*t&( 2 RANUL"O EDRERA, &s)(&*tG.R. No. 864 "&u#2 4, 1994

"#$ts%Respondent Sandigan ng 'anggagawang +ilipino &Sandigan>' filed before the abor Arbiter a claim for Emerency Cost of iin Allo)ance&ECOA>' differential aainst petitioner Ape@ Minin Company, $nc. &Ape@>' allein that Ape@ had paid its employees in its Maco, ?aaodel 3orte operations, bet)een 1 3oember 1/4 "ntil 2- March 1-/, an areate c"m"latie daily ECOA of only ;1/.<< )hich )as;2.<< belo) the c"m"latie minim"m ECOA of ;17.<< &for non(aric"lt"ral )orers' established "nder 6ae Order 3o. *0 and thatpetitioner had belatedly ranted the additional ;2.<< startin on 2 March 1-/ only.

Ape@ denied hain failed to comply )ith 6ae Order 3o. *, contendin that it had, by preio"s areement, incorporated the alleed ;2.<<deficiency into the basic salary of its employees. $n t"rn, Sandigan denies that s"ch an areement had been made, b"t conceded that a;2.<< increase in basic salary had been made by Ape@, in compliance )ith a proision of the Collectie !arainin Areement &C!A>' thenin force bet)een Ape@ and Sandigan, and not in f"lfillment of Ape@:s obliation "nder 6ae Order 3o. *. 5 andigan pointed o"t that 6aeOrder 3o. * had taen effect on 1 3oember 1-4, seeral months after the ;2.<< had been interated by Ape@ into the basic salary of itsemployees.

$n a s"pplemental memorand"m, Ape@ reiterated that the daily salary increase of ;2.<< proided for in the then c"rrent C!A, to tae effecton 1 9ebr"ary 1-4, had been s"bseH"ently credited as partial compliance )ith the ;/.<< increment mandated by 6ae Order *o. &)hichtoo effect on 1* +"ne 1-4'. Th"s, Ape@, in compliance )ith 6ae Order 3o. /, accordinly increased the daily ECOA of its )orers by;.<< only &from ;.<< to ;12.<<', or ;2.<< less than the leislated ECOA increase of ;/.<< &)hich )o"ld hae increased the total dailyECOA from ;.<< to ;14.<<'. ;etitioner Ape@ added that the interation of ;2.<< allo)ance into the basic salary proided for in the C!Ahad been conformed to by Dicente Arnieo, 3ational ;resident of Sandigan, and that in any eent, 6ae Order 3o. / had itself a"thoried

s"ch interation. 5ince petitioner Ape@ had interated ;2.<< &o"t of the ;/.<<' ECOA proided for in 6ae Order 3o. /, )hen Ape@complied )ith the additional ECOA increase mandated by 6ae Order 3o. *, the res"ltin fi"re for the total or c"m"latie ECOA paid byApe@ appeared to be only ;1/.<<, "ntil one too into acco"nt the ;2.<< &o"t of the ;/.<< ECOA increase mandated by 6ae Order 3o. /'interated into the employees: basic salary. 9inally, petitioner Ape@ e@plained, it had ranted members of Sandigan an additional ;2.<<effectie 2 March 1-/ not as an admission that it had preio"sly failed to pay somethin leally d"e, b"t only as a meas"re to diff"se thetense atmosphere bet)een manaement and the "nion created by the mis"nderstandin oer the ostensible &as distin"ished from the real'total increase paid by petitioner Ape@ to its employees.

Issu&% )hether or not Ape@ complied )ith the increases mandated by 6ae Orders 3os. / and *

Coo''#2 )ssu&% )hether or not the ;2.<< per day increase in basic salary effectie startin on 1 9ebr"ary 1-4 ranted by petitioner Ape@ p"rs"ant to the

C!A, )as la)f"lly credited to)ards compliance )ith increases in ECOA reH"ired "nder 6ae Orders 3os. / and *

H&'(%Bes. The ;2.<< increase interated in the basic salary of Ape@:s, employees, effectie on and after 1 9ebr"ary 1-4, )as concededly ien"nder the proisions of the C!A. 5ection 4 of Article D$ of the C!A proided as follo)s%

$t is "nderstood that the rant of these eneral increases shall be as part of any increase in basic pay and=or allo)ance that may hereafterbe decreed or imposed by la).>

14<




!oth 6ae Order 3o. / and 6ae Order 3o. * e@pressly allo)ed the creditin of increases in )aes or allo)ances ranted "nder collectiebarainin areements to)ards compliance )ith increases in ECOA reH"irements prescribed by those 6ae Orders. 5ection 7 o f 6aeOrder 3o. / proided as follo)s%

/ll increases in wages and5or allowances granted by employers between ebr!ary 0, 012= and the effectivity of this order 0 G!ne 012=J shall be credited as compliance )ith the minim"m wage and allowance ad-!stments prescribed herein . . .

5"ch increases shall not incl"de anniersary )ae increases proided in collectie barainin areements "nless the areements e@presslyproide other)ise.>

5ection 4 of 6ae Order 3o. * had ery similar lan"ae%

/ll increases in wages and5or allowances granted by employers between G!ne 03, 012= and the effectivity of this order *ovember 0, 012=J shall be credited as compliance )ith the minim"m wage and allowance ad-!stments prescribed herein, proided that )here the increases areless than the applicable amo"nt proided in this order, the employer shall pay the difference. 5"ch increases shall not incl"de anniersary

)ae increases proided in collectie barainin areements "nless the areements e@pressly proide other)ise.

This 5ection shall not apply to merit )ae increases and those res"ltin from the re"lariation or promotion of employees.> &Emphasis andbracets s"pplied'

The creditability proisions in 6ae Orders 3os. / and * &as )ell as the parallel proisions in 6ae Orders 3os. 2, and 4' are ro"nded inan important p"blic policy. That p"blic policy may be seen to be the enco!ragement of employers to rant )ae and allo)ance increases totheir employees higher than the minim!m rates of increases prescribed by stat!te or administrative reg!lation.

Sandigan, ho)eer, ar"es that to consider the ;2.<< increase in basic salary effectie 1 9ebr"ary 1-4 proided by the C!A as compliance )ith the reH"irements of 6ae Orders 3os. / and *, )o"ld be to iolate Article 1<< of the abor Code as )ell as 5ection * of the R"les$mplementin 6ae Order 3o. *. These proisions read, respectiely%

Art. 1<<. +rohibition against elimination or dimin!tion of benefits K 3othin in &!oo Three K Conditions of Employment' shall beconstr"ed to eliminate or in any )ay diminish s!pplements, or other employee benefits being en-oyed at the time of prom!lgation of this#ode.>

5ec. *. *on"dimin!tion of benefits. K The stat"tory minim"m )ae rates shall be e@cl"sie of )hateer s!pplements and other benefits the )orers are en-oying witho!t cost at the time of the effectivity of this rder .>

The prohibition aainst elimination or dimin"tion of benefits set o"t in Article 1<< of the abor Code is specifically concerned )ith benefitsalready enoyed at the time of the prom"lation of the abor Code. Article 1<< does not, in other )ords, p"rport to apply to sit"ations arisinafter the prom"lation date of the abor Code. 5ection * of the R"les $mplementin 6ae Order 3o. * relates to s"pplements and otherbenefits> )hich employees are already enoyin witho!t cost at the time of the effectiity of 6ae Order 3o. *.> 5"ch benefits )hichemployees are already enoyin )itho"t cost> co"ld not, "nder 5ection *, s"ddenly be ascribed monetary al"e so as to offset or diminishincreases in the minim"m )ae rates prescribed by stat"te. Clearly, once more, 5ection * does not relate to the problem at hand.

Sandigan f"rther contends that the 1 9ebr"ary 1-4 ;2.<< increase in basic salary )as act"ally an anniersary )ae increase,> andtherefore not creditable "nder 5ection 7 of 6ae Order 3o. / and "nder 5ection 4 of 6ae Order 3o. *.

The ;2.<< increase )as ien by petitioner Ape@ "nder 5ection , R"le D$ of the C!A )hich reads as follo)s%

5ec. . The COM;A3B arees to rant general wage increases to all employees )ithin barainin "nit as follo)s%

a' T)o ;esos &;2.<<' general increase per day "pon the effectiity of this Areement &9ebr"ary 1, 1-4'0b' One ;eso and 9ifty Centaos &;1./<' general increase per day effective on the first anniversary date of this /greement &9ebr"ary

1, 1-/'0c' One ;eso and 9ifty Centaos &;1./<' general increase per day effective on the second anniversary date of this /greement

&9ebr"ary 1, 1-*'.

The ;2.<< increase effectie on 1 9ebr"ary 1-4 )as distin"ishable from the 2 increases of ;1./< each, the first bein effectie on the fi rstanniersary date of the C!A &1 9ebr"ary 1-/' and the second bein effectie on the second anniersary date &1 9ebr"ary 1-*'. $n other

)ords, the 2 increases of 1./< each, one bein effectie on 1 9ebr"ary 1-/ and the second effectie on 1 9ebr"ary 1-*, )ere precisely

141




the non(creditable anniersary )ae increases.> Een if it be ass"med, ho)eer, that the 1 9ebr"ary 1-4 ;2.<< increase )ere rearded&improperly' as an anniersary )ae increase> still that ;2.<< increase )o"ld be creditable to)ards the stat"torily mandated increases. 9or6ae Orders 3os. / and * themseles allo)ed creditin of anniersary )ae increases> stip"lated in a C!A to)ards stat"tory increases, if the C!A itself &as here' e@pressly allo)ed s"ch creditin. 5ection 4, Article D$ of the C!A, H"oted earlier, a"thoried the creditin of eneralincreases> to)ards stat"torily mandated increases in basic pay or allo)ance. At the same time, 5ection of Article D$ of the C!A, H"otedaboe, described the 2 anniersary )ae increases of ;1./< each, and the one(time ;2.<< increase, as each constit"tin a eneralincrease.>

$n respect of 6ae Order 3o. /, Ape@ credited the ;2.<< increase in basic salary, effectie 1 9ebr"ary 1-4, to)ards compliance )ith thestat"torily prescribed ECOA increase of ;/.<<. Th"s, the apparent c"m"lated increase in E#L/, as sho)n in Ape@:s boos, )as only;12.<<. 8o)eer, the act"al increases K the composite of basic salary and E#L/ K areated ;14.<<. 5ince s"ch creditin )ase@pressly allo)ed "nder 6ae Order 3o. /, it follo)s that petitioner Ape@ )as in compliance )ith 6ae Order 3o. /. 3o differential )astherefore d"e there"nder.

6hen 6ae Order 3o. * )as prom"lated, it prescribed an increase of ;.<< in ECOA. Ape@ paid this mandatory increase anddenominated all of it as ECOA. Th"s, the apparent c"m"lated increase )as ;1/.<<. 5ince, ho)eer, Ape@ had preio"sly increased thebasic salary by ;2.<< effectie 1 9ebr"ary 1-4, the aggregate act!al increase Bin basic salary pl!s E#L/C )as +03 .>>, the same total orc"m"lated increase contemplated by 6ae Orders 3os. / and *. Th"s, aain, Ape@ )as act"ally in compliance )ith the reH"irements of6ae Order 3o. *, )ith the res"lt that no differential )as act"ally d"e from it.

$t remains only to note that 5ection 7 of 6ae Order 3o. / and section 4 of 6ae Order 3o. * e@pressly a"thoried the creditin of all theincreases in )aes> or allo)ances.> Th"s, the fact that Ape@ had denominated the ;2.<< increase effectie 1 9ebr"ary 1-4, as anincrease in basic salary , rather than in ECOA, made no leal difference so far as concerns the creditability of s"ch increase. $ndeed,interation of the ;2.<< into the basic salary of the employees )as more beneficial to them than rantin the ;2.<< as part of their ECOA%the interation increased the base )ae for p"rposes of comp"tation of s"ch items as oertime and premi"m pay, frine benefits andmaternity pay. $n fact, the $mplementin R"les of 6ae Order 3o. /, and 6ae Order 3o. * itself, e@pressly a"thoried increases in basicsalary in lie" of increases in ECOA, proided the amo"nts thereof )ere not less than the amo"nts reH"ired by the 6ae Orders.

Ape@ hain la)f"lly credited the ;2.<< increase in basic salary to)ards compliance of the increase in ECOA prescribed by 6ae Orders3os. / and *, it follo)s that respondent Sandigan:s claim to a differential in ECOA lacs basis in fact and in la).

MEYCAUAYAN COLLEGE v. HONORABLE "RAN:LIN M. DRILON, )* )s $#-#$)t2 #s S&$&t#2 o/ t& D&-#t0&*t o/ L#o #*(E0-'o20&*t #*( MEYCAUAYAN COLLEGE "ACULTY AND ERSONNEL ASSOCIATION ?MC"A

G.R. No. 811++ M#2 5, 199

"#$ts%The board of tr"stees of petitioner reconied the Meyca"ayan Collee 9ac"lty and ;ersonnel Association as the employees: "nion in theMeyca"ayan Collee.

;rior to said reconition, petitioner and the "nion, then headed by Mrs. Teresita im, entered into a collectie barainin areement for 1-(1-*.

6hen the collectie barainin areement )as entered into, the follo)in presidential decrees )ere in effect% &a' ;.? 3o. 1- dated May2, 17- ad"stin the e@istin stat"tory minim"m )aes0 &b' ;.?. 3o. 171 dated A""st 1-, 1-< proidin for an increase in the minim"mdaily )ae rates and for additional mandatory liin allo)ances, and &c' ;.?. 3o. 17/1 dated May 14, 1-< increasin the stat"tory dailyminim"m )ae at all leels by ;4.<< after interatin the mandatory emerency liin allo)ance "nder ;.?. 3os. /2/ and 112 into the

basic pay of all coered )orers. 6ae Order 3o. 2 increasin the mandatory basic minim"m )ae and liin allo)ance )as also iss"ed on+"ly *, 1- "st before the col lectie barainin areement herein inoled )as entered into.

?"rin the lifetime of the collectie barainin areement, the follo)in )ere iss"ed% &a' 6ae Order 3o. dated 3oember 7, 1-increasin the minim"m daily liin allo)ance in the priate sector0 &b' 6ae Order 3o. 4 dated May 1, 1-4 interatin as of said date theemerency cost of liin allo)ances "nder ;.?. 3os. 1*14, 1*4 and 171 into the basic pay of coered )orers in the priate sector0 &c'6ae Order 3o. / dated +"ne 11, 1-4 increasin the cost of liin allo)ance of )orers in the priate sector )hose basic salary or )ae isnot more than ;1,-<< a month0 and &d' 6ae Order 3o. * dated October 2*, 1-4 increasin the daily liin allo)ances.

The "nion admits herein that its members )ere paid all these increases in pay mandated by la). $t appears, ho)eer, that in 1-7, shortlyafter "nion president Mrs. Teresita D. im, )ho held the manaerial position of reistrar of the collee, had t"rned oer the presidency of the

142




"nion to Mrs. 9e Dillarico, the latter "nintentionally ot a copy of the collectie barainin areement and discoered that Article $D thereofhad not been implemented by the petitioner.

Issu&% )hether increases in employees: salaries res"ltin from the implementation of presidential decrees and )ae orders, )hich are oer andaboe the areed salary scale contracted for bet)een the employer and the employees in a collectie barainin areement, precl"de theemployees from claimin the difference bet)een their old salaries and those proided for "nder said salary scale

3o. A collectie barainin areement is a contract"al obliation. $t is distinct from an obliation imposed by la). The terms and conditions ofa collectie barainin contract constit"te the la) bet)een the parties.

Th"s, hain entered into an areement )ith its employees, an employer may not be allo)ed to renee on its obliation "nder a collectiebarainin areement sho"ld, at the same time, the la) rant the employees the same or better terms and conditions of employment.Employee benefits deried from la) are e@cl"sie of benefits arried at thro"h neotiation and areement "nless other)ise proided by theareement itself or by la).

BATONG BUHAY GOLD MINES, INC. v. DELA SERNAG.R. No. 86963. August 6, 1999URISIMA, !.

"#$ts%

Elsie Rosalinda Ty, Antonia Mendelebar, Ma. Concepcion O. Reyes and 1,247 others filed a complaint aainst !aton !"hay #old Mines,$nc. for% &1' non(payment of their basic pay and allo)ances for the period of * +"ly 1- to / +"ly 1-40 &2' non(payment of their basic payand allo)ances for the period 1* +"ne 1-4 to / October0 &' non(payment of their salaries for the period 1* March 1-* to the present0 &4'non(payment of their 1th month pay for 1-/, 1-* and 1-70 &/' non(payment of their acation and sic leae, and the compensatoryleaes of mine site employees0 and &*' non(payment of the salaries of employees )ho )ere placed on forced leaes since 3oember, 1-/to the present, if this is not feasible, the affected employees be a)arded correspondin separation pay.

The abor 5tandards and 6elfare Officers s"bmitted their report )ith the follo)in recommendations%

68ERE9ORE, premises considered, this case is hereby s"bmitted )ith the recommendation that an Order of Compliance be iss"eddirectin respondent !aton !"hay #old Mines $nc. to pay complainants: Elsie Rosalina Ty, et al. ;4,-1-,74*.4< by )ay of "npaid salaries of

)orers from March 1*, 1-7 to present, "npaid and ECOA differentials "nder 6ae Order 3os. 2 and / "npaid 1th months pay for 1-/and 1-*, and "npaid acation=sic=compensatory leae benefits.>

The Reional ?irector adopted the recommendation of the 56Os. The complainants filed an e@(parte motion for the iss"ance of a )rit ofe@ec"tion and appointment of special sheriff. The Reional ?irector iss"ed an Order directin the respondent to p"t "p a cash or s"rety bondother)ise a )rit of e@ec"tion )ill be iss"ed. 6hen the respondent failed to post a cash=s"rety bond, and "pon motion for the iss"ance of a

)rit of e@ec"tion by the complainants, the Reional ?irector, on 14 5eptember 1-7 iss"ed a )rit of e@ec"tion appointin Mr. +ohn EspiridionRamos as 5pecial 5heriff and directin him to do the follo)in% Bo" are to collect the aboe(stated amo"nt from the respondent and depositthe same )ith Cashier of this Office for appropriate disposition to herein complainants "nder the s"perision of the office of the ?irector.Other)ise, yo" are to e@ec"te this )rit by attachin the oods and chattels of the respondent not e@empt from e@ec"tion or in case ofins"fficiency thereof aainst the real or immoable property of the respondent.>

The 5pecial 5heriff proceeded to e@ec"te the appealed Order on 17 5eptember 1-7 and seied three &' "nits of ;eterb"ilt tr"cs and then

sold the same by p"blic a"ction. Dario"s materials and motor ehicles )ere also seied on different dates and sold at p"blic a"ction by saidsheriff.

The p"blic respondent iss"ed an order "pholdin the "risdiction of the Reional ?irector and ann"llin all the a"ction sales cond"cted by5pecial 5heriff +ohn Ramos. The decretal portion of the said Order r"led% the p"blic a"ction sales cond"cted by special sheriff +ohn Ramosp"rs"ant to the )rit of e@ec"tion dated 14 5eptember 1-7 on 24 5eptember 2, 2<, 2, and 2 October 1-7 are all hereby declared 3FA3? DO$?. 9"rthermore, the personal properties sold and the proceeds thereof )hich hae been t"rned oer to the complainants thr" theirleal co"nsel are hereby ordered ret"rned to the c"stody of the respondent and the b"yers respectiely.>

Issu&s%

14




)hether the Reional ?irector has "risdiction oer the complaint filed by the employees of !!#M$

H&'(%

The s"bect labor standards case )as filed on 9ebr"ary /, 1-7 at )hich time Article 12- &b' read as follo)s%

Art. 12- &b' Visitorial and enforcement powers G &b' The Minister of abor or his d"ly a"thoried representatie shall hae the po)er to

order and administer, after d"e notice and hearin, compliance )ith the labor standards proisions of this Code based on the findins oflabor re"lation officers or ind"strial safety enineers made in the co"rse of inspection, and to iss"e )rits of e@ec"tion to the appropriatea"thority for the enforcement of their order, e@cept in cases )here the employer contests the findins of the labor re"lations officers andraises iss"es )hich cannot be resoled )itho"t considerin eidentiary matters that are not erifiable in the ordinary co"rse of inspection.>

Article 12- &b' reH"ires the conc"rrence of the follo)in elements in order to diest the Reional ?irector or his representaties of "risdiction, to )it% &a' that the petitioner &employer' contests the findins of the labor re"lations officer and raises iss"es thereon0 &b' that inorder to resole s"ch iss"es, there is a need to e@amine eidentiary matters0 and &c' that s"ch matters are not erifiable in the normal co"rseof inspection.

Raisin lac of "risdiction in a Motion to ?ismiss is not the contest contemplated by the e@ception cla"se "nder Article 12-&b' of the aborCode )hich )o"ld tae the case o"t of the "risdiction of the Reional ?irector and brin it before the abor Arbiter.

;etitioner:s ref"sal to allo) the abor 5tandards and 6elfare Officers to cond"ct inspection in the premises of their head office in Maati andthe fail"re to file their position paper is eH"ialent to a )aier of its riht to contest the claims of the employees. This Co"rt had occasion tohold there is no iolation of d"e process )here the Reional ?irector merely reH"ired the s"bmission of position papers and resoled thecase s"mmarily thereafter.I1J 9"rthermore, the iss"ance of the compliance order )as )ell )ithin the "risdiction of the Reional ?irector, as5ection 14 of the R"les on the ?isposition of abor 5tandards Cases proides%

S&$t)o* 1+. "#)'u& to A--&# G 6here the employer or the complainant fails or ref"ses to appear d"rin the inestiation, despite propernotice, for t)o &2' consec"tie hearins )itho"t "stifiable reasons, the hearin officer may recommend to t& R&g)o*#' D)&$to t&)ssu#*$& o/ # $o0-')#*$& o(& #s&( o* t& &v)(&*$& #t #*( o #* o(& o/ ()s0)ss#' o/ t& $o0-'#)*t #s t& $#s& 0#2 &.

The po)er then of the Reional ?irector &"nder the present state of la)' to ad"dicate employees money claims is s"bect to the conc"rrenceof all the reH"isites proided "nder 5ec. 2 of RA *71/, to )it%

&a' the claim is represented by an employer or person employed in domestic or ho"sehold serice, or ho"sehelper0&b' the claim arises from employer(employee relationship0

&c' the claimant does not see reinstatement0 and&d' the areate money claim of each employee or ho"sehelper does not e@ceed ;/,<<<.

The r"lin in Servando’s Inc. vs. Sec. of Labor and Employment and the Regional Director, Region VI, DLE , in effect, e@panded the "risdictional limitation proided for by RA *71/ as to incl"de labor standards cases "nder Article 12- &b' and no loner limited to ordinarymonetary claims "nder Article 12.

Rep"blic Act 77<, the la) oernin the isitorial and enforcement po)ers of the abor 5ecretary and his representaties reads%

Article 12- &b' Not)tst#*()*g t& -ov)s)o*s o/ At)$'&s 149 #*( 415 o/ t)s Co(& to the contrary, and in cases )here the relationshipof employer(employee still e@ists, the 5ecretary of abor and Employment or his d"ly a"thoried representaties shall hae the po)er toiss"e compliance orders to ie effect to the labor standards proisions of this Code and other labor leislation based on the findins of laboremployment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The 5ecretary or his d"ly a"thoried

representatie shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement of their orders, e@cept in cases )here theemployer contests the findins of the labor employment and enforcement officer and raises iss"es s"pported by doc"mentary proofs )hich

)ere not considered in the co"rse of inspection.

LAGUNA CAT NET@OR:, INC. v. HON. ALEF E. MARAAN, R&g)o*#' D)&$to, R&g)o* I, D&-t. o/ L#o #*( E0-'o20&*t ?DOLE,ENRICO SAGMIT, A$t)*g D&-ut2 S&)//, DOLE R&g)o* I, EDRO IGNACIO, DIOMEDES CASTRO, "E ESERAN;A CANDILLA,RUBEN LAMINA, !R., !OEL ERSIUNCULA, ALINO RUDENTE, !OEL RAYMUNDO, REGIE ROCERO, LINDA RODRIGUE;, !OHNSELUDO, ALBERTO REYES, #*( ANACLETA ALOISG.R. No. 139+94 Nov&0& 19, 44

144







"#$ts%;riate respondents filed their separate complaints p"rs"ant to Article 12- of the abor Code, as amended by Rep"blic Act 3o. 77<, )hichproides%

Article 12-. Disitorial and enforcement po)ers. ( &a' The 5ecretary of abor or his d"ly a"thoried representaties, incl"din labor re"lationofficers, shall hae access to employer:s records and premises at any time of the day or niht )heneer )or is bein "ndertaen therein,and the riht to copy therefrom, to H"estion any employee and inestiate any fact, condition or matter )hich may be necessary to determine

iolations or )hich may aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"antthereto.

&b' @ @ @

An order iss"ed by the d"ly a"thoried representatie of the 5ecretary of abor and Employment "nder this article may be appealed to thelatter. $n case said order inoles a monetary a)ard, an appeal by the employer may be perfected only "pon the postin of a cash or s"retybond iss"ed by a rep"table bondin company d"ly accredited by the 5ecretary of abor and Employment in the amo"nt eH"ialent to themonetary a)ard in the order appealed from.>

?OE Reion $D cond"cted an inspection )ithin the premises of a"na CATD and fo"nd that the latter iolated the la)s on payment of )aes and other benefits. There"pon, ?OE Reion $D reH"ested a"na CATD to correct its iolations b"t the latter ref"sed, promptin theReional ?irector to set the case for s"mmary inestiation. Thereafter, he iss"ed an Order dated A""st 1, 1- 4 directin a"na CATDto pay the concerned employees the s"m of ;2*1,<<.1 representin their "npaid claims, )ithin 1< days from notice, and to s"bmit proof ofpayment )ithin the same period.

$n ie) of a"na CATD:s fail"re to comply )ith the Order directin it to pay the "npaid claims of its employees, the ?OE Reional ?irectoriss"ed a )rit of e@ec"tion on +an"ary 2, 1 orderin the sheriff to collect in cash from a"na CATD the amo"nt specified in the )rit or, inlie" thereof, to attach its oods and chattels or those of its o)ner, ?r. !ernardino !ailon.

a"na CATD and ?r. !ailon, in his personal capacity, filed a motion to H"ash the )rit of e@ec"tion, notice of ley and sale on e@ec"tion andarnishment of ban deposits, b"t the motion )as denied by the RTC. $nstead of appealin to the 5ecretary of abor, a"na CATD filed

)ith the Co"rt of Appeals a motion for e@tension of time to file a petition for reie). The Co"rt of Appeals iss"ed a Resol"tion denyina"na CATD:s motion for e@tension and dismissin the case.

Issu&% )hether the Co"rt of Appeals erred in denyin its motion for e@tension and in dismissin the case

H&'(%3o. The Co"rt of Appeals )as correct in holdin that petitioner failed to e@ha"st all administratie remedies. As proided "nder Article 12- ofthe abor Code, as amended, earlier H"oted, an order iss"ed by the d"ly a"thoried representatie of the 5ecretary of abor may beappealed to the latter. Th"s, petitioner sho"ld hae first appealed to the 5ecretary of abor instead of filin )ith the Co"rt of Appeals amotion for e@tension of time to file a petition for reie).

CIRINEO BO@LING LA;A, INC. v. GERRY SENSING, BELEN "ERNANDE;, MIRASOL DIA;, MARGARITA ABRIL, DARIO BENITE;,MANUEL BENITE;, RONILLO TANDOC, EDGAR DI;ON, !OELYN UINTO, :AREN REMORAN, !ENI""ER RINGOR, DEARTMENTO" LABOR AND EMLOYMENT #*( COURT o/ AEALSG.R. No. 1+654 !#*u#2 1+, 4

"#$ts%Eliio ;aolo, +r., an employee of petitioner, filed a letter complaint )ith the ?OE, ?a"pan ?istrict Office, ?a"pan City, reH"estin for theinspection=inestiation of petitioner for ario"s labor la) iolations lie "nderpayment of )aes, 1th month pay, non(payment of rest daypay, oertime pay, holiday pay and serice incentie leae pay. ;"rs"ant to the isitorial and enforcement po)ers of the 5ecretary of aborand Employment, his d"ly a"thoried representatie "nder Article 12- of the abor Code, as amended, cond"cted inspections on petitioner:sestablishment the follo)in day. $n his inspection report, a abor and Employment Officer fo"nd that petitioner has thirteen /employees andhad committed the follo)in iolations% "nderpayment of minim"m )ae, 1th month pay, holiday premi"ms, oertime premi"ms, and non(payment of rest day.

"isito Cirineo and a certain 9e Cirineo Octaiano, o)ner of Esperana 5eafoods Pitchenette stationed in petitioner:s establishment, )rote?OE a letter reH"estin that the case be endorsed to the 3ational abor Relations Commission since the resol"tion of the case reH"ired

14/






eidentiary matters not disclosed or erified in the normal co"rse of inspection. They also s"bmitted doc"ments to sho) that petitioner andEsperana 5eafoods Pitchenette are separate and distinct b"siness entities and that some of the employees(a)ardees are act"allyemployees of the Esperana 5eafoods Pitchenette.

?OE iss"ed its Order- statin amon others%

Records sho) that respondent, "isito Cirineo and his representatie appeared before this Office d"rin the s"mmary inestiation of this

instant case b"t they neer once mentioned the iss"e of separate "ridical personalities. R&s-o*(&*t #( #'#2s &&* &*t o* s&tt')*gt& &s-&$t)v& $'#)0s o/ #'' t)t&&* ?13 $o*$&*&( &0-'o2&&s. I* t& -o$&ss, o&v&, & #$>*o'&(g&( &)*g t&) &0-'o2&. H&$#**ot #t t)s u*$tu& t&&/o& s#2, t#t so0& o/ t& ##(&&s )* ou ORDER #& &0-'o2&&s o/ #*ot& us)*&ss &*t)t2. This beinthe case, )e cannot rant his reH"est for indorsement to the 3RC.>

Issu&% )hether the abor Arbiter has "risdiction oer the instant case

H&'(%3o. ;etitioner ar"es that the po)er to ad"dicate money claims belons to the abor Arbiter )ho has e@cl"sie "risdiction oer employees:claims )here the areate amo"nt of the claims of each employee e@ceeds;/,<<<.<<0 and, that the abor Arbiter has "risdiction oer allother claims arisin from employer(employee relations, incl"din those of persons in domestic or ho"sehold serice, inolin an amo"nte@ceedin ;/,<<<.<<, )hether or not accompanied )ith a claim for reinstatement.

6hile it is tr"e that "nder Articles 12 and 217 of the abor Code, the abor Arbiter has "risdiction to hear and decide cases )here theareate money claims of each employee e@ceeds ;/,<<<.<<, said proisions of la) do not contemplate nor coer the isitorial andenforcement po)ers of the 5ecretary of abor or his d"ly a"thoried representaties.

Rather, said po)ers are defined and set forth in Article 12- of the abor Code &as amended by R.A. 3o. 77<' th"s%

Art. 12-. Disitorial and enforcement po)er. G

&a' The 5ecretary of abor or his d"ly a"thoried representaties, incl"din labor re"lation officers, shall hae access to employer:srecords and premises at any time of the day or niht )heneer )or is bein "ndertaen therein, and the riht to copy therefrom,to H"estion any employee and inestiate any fact, condition or matter )hich may be necessary to determine iolations or )hichmay aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant thereto.

&b' 3ot)ithstandin the proisions of Articles 12 and 217 of this Code to the contrary, and in cases )here the relationship of

employer(employee e@ists, the 5ecretary of abor and Employment or his d"ly a"thoried representaties shall hae the po)er toiss"e compliance orders to ie effect to the labor standards proisions of this Code and other labor leislation based on thefindins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse of inspection. The5ecretary or his d"ly a"thoried representaties shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement oftheir orders, e@cept in cases )here the employer contests the findin of the labor employment and enforcement officer and raisesiss"es s"pported by doc"mentary proofs )hich )ere not considered in the co"rse of inspection.

An order iss"ed by the d"ly a"thoried representatie of the 5ecretary of abor and Employment "nder this article may be appealed to thelatter. $n case said order inoled a monetary a)ard, an appeal by the employer may be perfected only "pon the postin of a cash or s"retybond iss"ed by a rep"table bondin company d"ly accredited by the 5ecretary of abor and Employment in the amo"nt eH"ialent to themonetary a)ard in the order appealed from.>

The aforeH"oted proision e@plicitly e@cl"des from its coerae Articles 12 and 217 of the abor Code by the phrase &3'ot)ithstandin the

proisions of Articles 12 and 217 of this Code to the contrary . . .> thereby retainin and f"rther strenthenin the po)er of the 5ecretary ofabor or his d"ly a"thoried representatie to iss"e compliance orders to ie effect to the labor standards proisions of said Code and otherlabor leislation based on the findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse ofinspection.

$n the case at bar, the Office of respondent Reional ?irector cond"cted inspection isits at petitioner:s establishment on 9ebr"ary and 14,1/ in accordance )ith the aboe(mentioned proision of la). $n the co"rse of said inspection, seeral iolations of the labor standardproisions of the abor Code )ere discoered and reported by 5enior abor Enforcement Officer Ed"iis A. Acero in his 3otice of$nspection Res"lts. $t )as on the bases of the aforesaid findins &)hich petitioner did not contest', that respondent Reional ?irector iss"edthe assailed Order for petitioner to pay priate respondents the respectie )ae differentials d"e them.

14*






Clearly, as the d"ly a"thoried representatie of respondent 5ecretary of abor, and in the la)f"l e@ercise of the 5ecretary:s isitorial andenforcement po)ers "nder Article 12- of the abor Code, respondent Reional ?irector had "risdiction to iss"e his imp"ned Order.

BRO:ENSHIRE MEMORIAL HOSITAL, INC. . THE HONORABLE MINISTER O" LABOR < EMLOYMENT AND BRO:ENSHIREMEMORIAL HOSITAL EMLOYEES AND @OR:ER=S UNION7""@ R&-&s&*t&( 2 EDUARDO A. A"UANG.R. No. 5+641 "&u#2 5, 199

"#$ts%;riate respondents filed a complaint aainst petitioner )ith the Reional Office of the ?OE. After d"e healin the Reional ?irectorrendered a decision n faor of priate respondents. +"dment hain become final and e@ec"tory, the Reional ?irector iss"ed a 6rit ofE@ec"tion )hereby some moable properties of the hospital &petitioner herein' )ere leied "pon and its operatin e@penses ept )ith theban )ere arnished. The ley and arnishment )ere lifted )hen petitioner hospital paid the claim of the priate respondents &2-1 hospitalemployees' directly.

After main said payment, petitioner hospital failed to contin"e to comply )ith 6ae Order 3o. / and lie)ise, failed to comply )ith the ne)6ae Order 3o. *, promptin priate respondents to file aainst petitioner another complaint.

Issu&% )hether or not the Reional ?irector has "risdiction oer money claims of )orers conc"rrent )ith the abor Arbiter

H&'(%The abor Arbiter has e@cl"sie oriinal "risdiction in the instant case. RA *71/ amended Art. 12 and Art. 217 of the abor Code, to readas follo)s%

ART. 12. Recovery of wages, simple money claims and other benefits .KFpon complaint of any interested party, the Reional ?irector ofthe ?epartment of abor and Employment or any of the d"ly a"thoried hearin officers of the ?epartment is empo)ered, thro"h s!mmary

proceeding and after d"e notice, to hear and decide any matter inolin the recoery of )aes and other monetary claims and benefits,incl"din leal interest, o)in to an employee or person employed in domestic or ho"sehold serice or ho"sehelper "nder this code, arisinfrom employer(employee relations, ;roided, That s"ch complaint does not incl"de a claim for reinstatement0 ;roided, f"rther, That theareate money claims of each employee or ho"sehelper do not e@ceed fie tho"sand pesos &;/,<<<.<<'. The Reional ?irector or hearinofficer shall decide or resole the complaint )ithin thirty &<' calendar days from the date of the filin of the same . . .

Any decision or resol"tion of the Reional ?irector or hearin officer p"rs"ant to this proision may be appealed on the same ro"nds

proided in Article 22 of this Code, )ithin fie &/' calendar days from 11 receipt of a copy of said decision or resol"tion, to the 3ationalabor Relations Commission )hich shall resole the appeal )ithin ten &1<' calendar days from the s"bmission of the last pleadin reH"iredor allo)ed "nder its r"les.

ART. 217. G!risdiction of Labor /rbiters and the #ommission. KE@cept as other)ise proided "nder this code, the abor Arbiters shall haeoriinal and e@cl"sie "risdiction to hear and decide, )ithin thirty &<' calendar days after the s"bmission of the case by the parties fordecision )itho"t e@tension, een in the absence of steno raphic notes, the follo)in cases inolin all )orers, )hether aric"lt"ral or non(aric"lt"ral%

&1' Fnfair labor practice cases0&2' Termination disp"tes0&' $f accompanied )ith a claim of reinstatement, those cases that )orers may file inolin )aes, rates of pay, ho"rs of )or and

other terms and conditions of employment0

&4' Claims for act"al, moral, e@emplary and other forms of damaes arisin from the employer(employee relation0&/' Cases arisin from any iolation of Article 2*4 of this Code, incl"din H"estions inolin the leality of stries and loco"ts0 and&*' E@cept claims for employees compensation, social sec"rity, medicare and maternity benefits, all other claims arisin from

employer(employee relations, incl"din those of persons in domestic or ho"sehold serice, inolin an amo"nt not e@ceedin fietho"sand pesos &;/,<<<.<<', )hether or not accompanied )ith a claim for reinstatement.

$t )ill be obsered that )hat in fact conferred "pon Reional ?irectors and other hearin officers of the ?epartment of abor &aside from theabor Arbiters' ad"dicatie po)ers, i.e., the po)er to try and decide, or hear and determine any claim bro"ht before them for recoery of

)aes, simple money claims, and other benefits, is Rep"blic Act *71/, proided that the follo)in reH"isites conc"r, to )it%

1' The claim is presented by an employee or person employed in domestic or ho"sehold serice, or ho"sehelper "nder the code0

147




2' The claimant, no loner bein employed, does not see reinstatement0 and' The areate money claim of the employee or ho"sehelper does not e@ceed fie tho"sand pesos &;/,<<<.<<'.

$n the absence of any of the reH"isites, the abor Arbiters hae e@cl"sie oriinal "risdiction oer all claims arisin from employer(employee relations, other than claims for employee:s compensation, social sec"rity, medicare and maternity benefits.

ALLIED INESTIGATION BUREAU, INC. v. HON. SECRETARY O" LABOR < EMLOYMENT, #$t)*g toug U*(&s&$&t#2

CRESENCIANO B. TRA!ANOG.R. No. 1446 Nov&0& 4+, 1999

"#$ts%;etitioner Allied $nestiation !"rea", $nc. is a sec"rity aency. $t entered into a sec"rity contract )ith 3oelty ;hilippines, $nc. &3;$, forbreity' )hereby it obliated itself to proide sec"rity serices to the latter.

;riate respondents Melin ;elayo and 5am"el 5"canel, t)o of the sec"rity "ards assined by petitioner to 3;$, filed a complaint )ith theOffice of respondent Reional ?irector charin petitioner )ith non(compliance )ith 6ae Order 3o. 3CR(<, )hich increased the minim"mdaily pay of )orers by ;17.<<, or from ;11-.<< to ;1/.<< effectie ?ecember 1*, 10 and f"rther, by ;1<.<<, or from ;1/.<< to;14/.<< daily beinnin April 1, 14. ;riate respondents, lie)ise, so"ht the recoery of )ae differentials.

The Office of Reional ?irector cond"cted inspection isits at petitioner:s establishment. The 5enior abor Enforcement Officer iss"ed a

3otice of $nspection Res"lts findin )ith non(implementation "nder 6.O. Z 3CR(<, non(remittance of 555 ;remi"ms, and K E@cessieded"ction or !ayanihan 5ystem &;2<.<<' eery pay day instead of ;/.<< only.

Issu& K 1% )hether or not respondent Reional ?irector acted )itho"t "risdiction in ad"dicatin the priate respondents: money claims )here theareate money claim of each of them e@ceeds ;/, <<<.<<

H&'( K1%3o. 6hile it is tr"e that "nder Articles 12 and 217 of the abor Code, the abor Arbiter has "risdiction to hear and decide cases )here theareate money claims of each employee e@ceeds ;/,<<<.<<, said proisions of la) do not contemplate nor coer the isitorial andenforcement po)ers of the 5ecretary of abor or his d"ly a"thoried representaties.

Rather, said po)ers are defined and set forth in Article 12- of the abor Code &as amended by R.A. 3o. 77<' th"s%

Art. 12-. Visitorial and enforcement power . K

(a) The 5ecretary of abor or his d"ly a"thoried representaties, incl"din labor re"lation officers, shall hae access to employer:srecords and premises at any time of the day or niht )heneer )or is bein "ndertaen therein, and the riht to copy therefrom,to H"estion any employee and inestiate any fact, condition or matter )hich may be necessary to determine iolations or )hichmay aid in the enforcement of this Code and of any labor la), )ae order or r"les and re"lations iss"ed p"rs"ant thereto.

(b) *otwithstanding the provisions of /rticles 0K1 and K03 of this #ode to the contrary , and in cases where the relationship of

employer"employee e(ists, the Secretary of Labor and Employment or his d!ly a!thoried representatives shall have the power toiss!e compliance orders to give effect to the labor standards provisions of this #ode and other labor legislation based on thefindings of labor employment and enforcement officers or ind!strial safety engineers made in the co!rse of inspection . The5ecretary or his d"ly a"thoried representaties shall iss"e )rits of e@ec"tion to the appropriate a"thority for the enforcement oftheir orders, e@cept in cases )here the employer contests the findins of the labor employment and enforcement officer and raises

iss"es s"pported by doc"mentary proofs )hich )ere not considered in the co"rse of inspection.

An order iss"ed by the d"ly a"thoried representatie of the 5ecretary of abor and Employment "nder this article may beappealed to the latter. In case said order involves a monetary award , an appeal by the employer may be perfected only !pon the

posting of a cash or s!rety bond iss!ed by a rep!table bonding company d!ly accredited by the Secretary of Labor and Employment in the amo!nt e&!ivalent to the monetary award in the order appealed from .

The aforeH"oted proision e@plicitly e@cl"des from its coerae Articles 12 and 217 of the abor Code by the phrase &3'ot)ithstandin theproisions of Articles 12 and 217 of this Code to the contrary . . . thereby retainin and f"rther strenthenin the po)er of the 5ecretary ofabor or his d"ly a"thoried representatie to iss"e compliance orders to ie effect to the labor standards proisions of said Code and other

14-




labor leislation based on the findins of labor employment and enforcement officers or ind"strial safety enineers made in the co"rse ofinspection.

$n the case at bar, the Office of respondent Reional ?irector cond"cted inspection isits at petitioner:s establishment on 9ebr"ary and 14,1/ in accordance )ith the aboe(mentioned proision of la). $n the co"rse of said inspection, seeral iolations of the labor standardproisions of the abor Code )ere discoered and reported by 5enior abor Enforcement Officer Ed"iis A. Acero in his 3otice of$nspection Res"lts. $t )as on the bases of the aforesaid findins &)hich petitioner did not contest', that respondent Reional ?irector iss"ed

the assailed Order for petitioner to pay priate respondents the respectie )ae differentials d"e them.

Clearly, as the d"ly a"thoried representatie of respondent 5ecretary of abor, and in the la)f"l e@ercise of the 5ecretary:s isitorial andenforcement po)ers "nder Article 12- of the abor Code, respondent Reional ?irector had "risdiction to iss"e his imp"ned Order.

Issu& K4% )hether or not respondent 5ecretary of abor Employment, actin thro"h Fndersecretary Cresenciano !. Traano, acted )ith raeab"se of discretion in dismissin herein petitioner:s appeal attacin the "risdiction of respondent Reional ?irector in ad"dicatin s"bectmoney claims of priate respondents

H&'( K4%3o. Art. 12- of the abor Code lie)ise e@plicitly proides that in case an order iss"ed by the d"ly a"thoried representatie of the 5ecretaryof abor and Employment inoles a monetary a)ard, an appeal by the employer may be perfected only "pon postin of a cash or s"retybond in an amo"nt eH"ialent to the monetary a)ard in the order appealed from.

5ince the Order appealed from inoles a monetary a)ard, an appeal by petitioner may be perfected only "pon postin of a cash or s"retybond iss"ed by a rep"table bondin company d"ly accredited by respondent 5ecretary of abor in the amo"nt eH"ialent to the monetarya)ard in the Order appealed from.

;etitioner herein did not post a cash or s"rety bond )hen it filed its appeal )ith the Office of respondent 5ecretary of abor. ConseH"ently,petitioner failed to perfect its appeal on time and the Order of respondent Reional ?irector became final and e@ec"tory. Th"s, the 5ecretaryof abor and Employment thr" Fndersecretary Cresenciano !. Traano correctly dismissed petitioner:s appeal.

LACIDO O. URBANES, !R., (o)*g us)*&ss u*(& t& *#0& < st2'& o/ CATALINA SECURITY AGENCY v. THE HONORABLESECRETARY O" LABOR AND EMLOYMENT #*( SOCIAL SECURITY SYSTEMG.R. No. 144591 "&u#2 19, 43

"#$ts%;lacido O. Frbanes, +r., doin b"siness "nder the name and style of Catalina 5ec"rity Aency, entered into an areement 1 to proidesec"rity serices to respondent 555.

?"rin the effectiity of the areement, petitioner reH"ested the 555 for the "p)ard ad"stment of their contract rate in ie) of 6ae Order3o. 3CR(< )hich )as iss"ed by the Reional Tripartite 6aes and ;rod"ctiity !oard(3CR p"rs"ant to Rep"blic Act *727 other)iseno)n as the 6ae Rationaliation Act, the pertinent proision of )hich )ae order reads%

5ection . I* t& $#s& o/ $o*t#$ts for constr"ction proects and /o s&$u)t2, anitorial and similar serices, t& -&s$)&( #0ou*t s&t/ot &&)* /o $ov&&( o>&s s#'' & o*& 2 t& -)*$)-#'s o t& $')&*ts of the constr"ction=serice contractors #*( t&$o*t#$t s#'' & (&&0&( #0&*(&( #$$o()*g'2. I* t& &v&*t, o&v&, t#t t& -)*$)-#' o $')&*t /#)'&( to -#2 t& -&s$)&()*$&#s&, t& $o*stu$t)o*s&v)$& $o*t#$tos s#'' & o)*t'2 #*( s&v&#''2 ')#'& )t t& -)*$)-#' o $')&*t .>

;etitioner filed a complaint )ith the ?OE(3CR aainst the 555 seein the implementation of 6ae Order 3o. 3CR(<.

Issu&% )hether the 5ecretary of abor has "risdiction to reie) appeals from decisions of the Reional ?irectors in complaints filed "nder Article12 of the abor Code

H&'(%3o. $t is the RTC that has "risdiction oer the s"bect matter of the present case. It )s &'' s&tt'&( )* '# #*( u)s-u(&*$& t#t && *o&0-'o2&7&0-'o2&& &'#t)o*s)- &)sts &t&&* t& -#t)&s #*( *o )ssu& )s )*vo'v&( )$ 0#2 & &so'v&( 2 &/&&*$& to t&L#o Co(&, ot& '#o st#tut&s o #*2 $o''&$t)v& #g#)*)*g #g&&0&*t, )t )s t& R&g)o*#' T)#' Cout t#t #s u)s()$t)o*. I* )ts

14

http://www.lawphil.net/judjuris/juri2003/feb2003/gr_122791_2003.html#fnt1

http://www.lawphil.net/judjuris/juri2003/feb2003/gr_122791_2003.html#fnt1




$o0-'#)*t, -)v#t& &s-o*(&*t )s *ot s&&>)*g #*2 &')&/ u*(& t& L#o Co(& ut s&&>s -#20&*t o/ # su0 o/ 0o*&2 #*( (#0#g&so* #$$ou*t o/ -&t)t)o*&=s #''&g&( &#$ o/ )ts o')g#t)o* u*(& t&) Gu#( S&v)$& Co*t#$t. T& #$t)o* )s )t)* t& &#'0 o/ $)v)''# &*$& u)s()$t)o* ov& t& $#s& &'o*gs to t& &gu'# $outs. @)'& t& &so'ut)o* o/ t& )ssu& )*vo'v&s t& #--')$#t)o* o/'#o '#s, &/&&*$& to t& '#o $o(& #s o*'2 /o t& (&t&0)*#t)o* o/ t& so')(#2 ')#)')t2 o/ t& -&t)t)o*& to t& &s-o*(&*t

&& *o &0-'o2&7&0-'o2&& &'#t)o* &)sts.

$n the case at bar, een if petitioner filed the complaint on his and also on behalf of the sec"rity "ards, the relief so"ht has to do )ith the

enforcement of the contract bet)een him and the 555 )hich )as deemed amended by irt"e of 6ae Order 3o. 3CR(<. The controersys"bect of the case at bar is th"s a ciil disp"te, the proper for"m for the resol"tion of )hich is the ciil co"rts.

!"t een ass"min arg!endo that petitioner:s complaint )ere filed )ith the proper for"m, for lac of ca"se of action it m"st be dismissed.

Articles 1<*, 1<7 and 1< of the abor Code proide%

ART. 1<*. CO3TRACTOR OR 5F!CO3TRACTOR. G 6heneer an employer enters into contract )ith another person for the performanceof the former:s )or, the employees of the contractor and of the latter:s s"bcontractor, if any, shall be paid in accordance )ith the proisionsof this Code.

$n the eent that the contractor or s"bcontractor fails to pay the )ae of his employees in accordance )ith this Code, the employer shall be ointly and seerally liable )ith his contractor or s"bcontractor to s"ch employees to the e@tent of the )or performed "nder the contract, inthe same manner and e@tent that he is liable to employees directly employed by him.

ART. 1<7 $3?$RECT EM;OBER. G The proisions of the immediately precedin Article shall lie)ise apply to any person, partnership,association or corporation )hich, not bein an employer, contracts )ith an independent contractor for the performance of any )or, tas, obor proect.

ART. 1<. 5O$?ARB $A!$TB. G The proisions of e@istin la)s to the contrary not)ithstandin, eery employer or indirect employer shallbe held responsible )ith his contractor or s"bcontractor for any iolation of any proision of this Code. 9or p"rposes of determinin thee@tent of their ciil liability "nder this Chapter, they shall be considered as direct employers.>

$t is only )hen ItheJ contractor pays the increases mandated that it can claim an ad"stment from the principal to coer the increases payableto the sec"rity "ards. T& $o*$'us)o* t#t t& )gt o/ t& $o*t#$to ?#s -)*$)-#' (&to to &$ov& /o0 t& -)*$)-#' ?#s so')(#2$o7(&to #)s&s o*'2 )/ & #s -#)( t& #0ou*ts /o )$ ot o/ t&0 #& o)*t'2 #*( s&v&#''2 ')#'& )s )* ')*& )t At)$'& 1415o/ t& C)v)' Co(& )hich proides%

Art. 1217. ;ayment made by one the solidary debtors e@tin"ishes the obliation. $f t)o or more solidary debtors offer to pay, the creditormay choose )hich offer to accept.

8e )ho made payment mae claim from his co(debtors only the share )hich corresponds to each, )ith interest for the payment alreadymade. $f the payment is made before the debt is d"e, no interest for the interenin period may be demanded.>

$n fine, the liability of the 555 to reimb"rse petitioner arises only if and )hen petitioner pays his employee(sec"rity "ards the increases>mandated by 6ae Order 3o. 3CR(<.

The records do not sho) that petitioner has paid the mandated increases to the sec"rity "ards. The sec"rity "ards in fact hae filed acomplaint )ith the 3RC aainst petitioner relatie to, amon other thins, "nderpayment of )aes.

HILIINE TELEGRAH AND TELEHONE COMANY v. NATIONAL LABOR RELATIONS COMMISSION #*( GRACE DE GU;MANG.R. No. 118958 M#2 43, 1995

"#$ts%#race de #"man )as initially hired by petitioner as a relieer, specifically as a 5"pern"merary ;roect 6orer,> for a fi@ed period from3oember 21, 1< "ntil April 2<, 11 ice one C.9. Tenorio )ho )ent on maternity leae. Fnder the Relieer Areement )hich she sined

)ith petitioner company, her employment )as to be immediately terminated "pon e@piration of the areed period. Thereafter, from +"ne 1<,11 to +"ly 1, 11, and from +"ly 1, 11 to A""st -, 11, priate respondent:s serices as relieer )ere aain enaed by petitioner,this time in replacement of one Erlinda 9. ?ion )ho )ent on leae d"rin both periods. After A""st -, 11, and p"rs"ant to their RelieerAreement, her serices )ere terminated.

1/<




co"ld do s"ch a thin to any of his s"bordinates. $ sho"ld hae left the company )itho"t any )ord b"t $ feel that $ )o"ld be "nfair to those )ho miht be similarly sit"ated. $ hope that yo" )o"ld find time to inestiate the eracity of my alleations and mae each responsible for iso)n deed.

The letter prompted the president of #olden ?on"ts, $nc., to call petitioner to a meetin. ;etitioner )as then reH"ired to e@plain the letteraainst him. $t appears that petitioner areed to tender his resination. ;riate respondent moed s)iftly to separate petitioner. Th"s, priaterespondent approed petitioner:s application for leae of absence )ith pay from A""st /(2-, 1-. $t also iss"ed an inter(office

memorand"m all concerned> that petitioner )as no loner connected )ith the company effectie A""st /, 1-. T)o days later, Mr. ;rietosent a letter to petitioner confirmin their areement that petitioner )o"ld be officially separated from the priate respondent.

$n the interim, petitioner had a chane of mind as he )rote a letter seein reconsideration of the manaement:s decision to terminate him.

9or his fail"re to tender his resination, petitioner )as dismissed by priate respondent. 9eelin arieed, petitioner filed an illeal dismissalcase aainst priate respondent.

Issu&% )hether there )as alid ca"se to terminate petitioner

H&'(%Bes. oss of tr"st and confidence is a ood ro"nd for dismissin a manaerial employee. As a manaerial employee, petitioner is bo"nd bya more e@actin )or ethics. 8e failed to lie "p to this hiher standard of responsibility )hen he s"cc"mbed to his moral perersity. And

)hen s"ch moral perersity is perpetrated aainst his s"bordinate, he proides "stifiable ro"nd for his dismissal for lac of tr"st andconfidence. $t is the riht, nay, the d"ty of eery employer to protect its employees from oer se@ed s"periors.

To be s"re, employers are ien )ider latit"de of discretion in terminatin the employment of manaerial employees on the ro"nd of lac oftr"st and confidence.

DIOSCORO ". BACSIN v. EDUARDO O. @AHIMANG.R. No. 1+63

"#$ts%;etitioner is a p"blic school teacher of ;andan Elementary 5chool, ;andan, Mambaao, Cami"in ;roince. Respondent Ed"ardo O.

6ahiman is the father of AAA, an elementary school st"dent of the petitioner.

AAA claimed that petitioner ased her to be at his office to do an errand. Once inside, she sa) him et a folder from one of the cartons onthe floor near his table, and place it on his table. 8e then ased her to come closer, and )hen she did, held her hand, then to"ched andfondled her breast. 5he stated that he fondled her breast fie times, and that she felt afraid. A classmate of hers, one Dincent !. 5orrabas,claimin to hae )itnessed the incident, testified that the fondlin incident did happen "st as AAA related it

;etitioner )as chared )ith Miscond"ct in a 9ormal Chare by a Reional ?irector of the C5C. $n his defense, petitioner claimed that theto"chin incident happened by accident, "st as he )as handin AAA a lesson boo. 8e f"rther stated that the incident happened in abo"tt)o or three seconds, and that the irl left his office )itho"t any complaint.

Issu& K 1% )hether or not the petitioner co"ld be "ilty of acts of se@"al harassment, rae miscond"ct, )hich )as different from or an offense notalleed in the formal chare filed aainst him at the inception of the administratie case

H&'( K 1%;etitioner )as s"fficiently informed of the basis of the chare aainst him, )hich )as his act of improperly to"chin one of his st"dents. Th"sinformed, he defended himself from s"ch chare. The fail"re to desinate the offense specifically and )ith precision is of no moment in thisadministratie case.

The formal chare, )hile not specifically mentionin RA 7-77, The Anti(5e@"al 8arassment Act of 1/, imp"tes on the petitioner actscoered and penalied by said la). Contrary to the ar"ment of petitioner, the demand of a se@"al faor need not be e@plicit or stated. "nder5ection &b' &4' of RA 7-77, se@"al harassment in an ed"cation or trainin enironment is committed )hen the se@"al adances res"lt in anintimidatin, hostile or offensie enironment for the st"dent, trainee or apprentice. AAA een testified that she felt fear at the time petitionerto"ched her.

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motiated by malice or le)d desin. Eidently, she mis"nderstood his act"ations and constr"ed them as )or(related se@"al harassment"nder R.A. 7-77.

A mere cas"al b"ss on the chee is not a se@"al cond"ct or faor and does not fall )ithin the p"rie) of se@"al harassment "nder R.A. 3o.7-77. 5ection &a' thereof proides, to )it%

5ec. . 6or, Ed"cation or Trainin ( related 5e@"al 8arassment ?efined. ( 6or, ed"cation or trainin(related se@"al harassment is

committed by an employer, employee, manaer, s"perisor, aent of the employer, teacher, instr"ctor, professor, coach, trainor, or any otherperson )ho, hain a"thority, infl"ence or moral ascendancy oer another in a )or or trainin or ed"cation enironment, demands,reH"ests or other)ise reH"ires any se@"al faor from the other, reardless of )hether the demand, reH"est or reH"irement for s"bmission isaccepted by the obect of said Act.

a' $n a )or(related or employment enironment, se@"al harassment is committed )hen%

1' The se@"al faor is made as a condition in the hirin or in the employment, re(employment or contin"ed employment of saidindiid"al, or in rantin said indiid"al faorable compensation, terms, conditions, promotions or priilees0 or the ref"sal to rantse@"al faor res"lts in limitin, sereatin or classifyin the employee )hich in any)ay )o"ld discriminate, deprie or diminishemployment opport"nities or other)ise adersely affect said employees0

2' The aboe acts )o"ld impair the employee:s riht or priilees "nder e@istin labor la)s0 or' The aboe acts )o"ld res"lt in an intimidatin, hostile, or offensie enironment for the employee.>

The elements of se@"al harassment are as follo)s%

1' The employer, employee, manaer, s"perisor, aent of the employer, teacher, instr"ctor, professor, coach, trainor, or any otherperson has a"thority, infl"ence or moral ascendancy oer another0

2' The a"thority, infl"ence or moral ascendancy e@ists in a )orin enironment0' The employer, employee, manaer, s"perisor, aent of the employer, teacher, instr"ctor, professor, coach, or any other person

hain a"thority, infl"ence or moral ascendancy maes a demand, reH"est or reH"irement of a se@"al faor.

$ndeed, from the records on hand, there is no sho)in that respondent "de demanded, reH"ested or reH"ired any se@"al faor fromcomplainant in e@chane for faorable compensation, terms, conditions, promotion or priilees> specified "nder 5ection of R.A. 7-77.3or did he, by his act"ations, iolate the Canons of +"dicial Ethics or the Code of ;rofessional Responsibility.

STAR AER CORORATION, !OSEHINE ONGSITCO < SEBASTIAN CHUA v. RONALDO D. SIMBOL, @IL"REDA N. COMIA <LORNA E. ESTRELLAG.R. No. 16+55+ A-)' 14, 46

"#$ts%;etitioner 5tar ;aper Corporation is a corporation enaed in tradin G principally of paper prod"cts. +osephine Onsitco is its Manaer ofthe ;ersonnel and Administration ?epartment )hile 5ebastian Ch"a is its Manain ?irector.

Respondents Ronaldo ?. 5imbol, 6ilfreda 3. Comia and orna E. Estrella )ere all re"lar employees of the company.

5imbol )as employed by the company. 8e met Alma ?ayrit, also an employee of the company, )hom he married. ;rior to the marriae,Onsitco adised the co"ple that sho"ld they decide to et married, one of them sho"ld resin p"rs"ant to a company policy, i.%

1. 3e) applicants )ill not be allo)ed to be hired if in case he=she has IaJ relatie, "p to ItheJ rd deree of relationship, alreadyemployed by the company.

2. $n case of t)o of o"r employees &both sinles IsicJ, one male and another female' deeloped a friendly relationship d"rin theco"rse of their employment and then decided to et married, one of them sho"ld resin to presere the policy stated aboe.

5imbol resined p"rs"ant to the company policy.

Comia )as hired by the company. 5he met 8o)ard Comia, a co(employee, )hom she married. Onsitco lie)ise reminded them thatp"rs"ant to company policy, one m"st resin sho"ld they decide to et married. Comia resined.

1/4




Estrella )as hired. 5he met "isito U"ia. also a co()orer. ;etitioners stated that U"ia, a married man, ot Estrella prenant. Thecompany alleedly co"ld hae terminated her serices d"e to immorality b"t she opted to resin

Respondents offer a different ersion of their dismissal. 5imbol and Comia allee that they did not resin ol"ntarily0 they )ere compelled toresin in ie) of an illeal company policy. As to respondent Estrella, she allees that she had a relationship )ith co()orer U"ia )homisrepresented himself as a married b"t separated man. After he ot her prenant, she discoered that he )as not separated. Th"s, sheseered her relationship )ith him to aoid dismissal d"e to the company policy. On 3oember <, 1, she met an accident and )as

adised by the doctor at the Orthopedic 8ospital to rec"perate for 21 days. 5he ret"rned to )or on ?ecember 21, 1 b"t she fo"nd o"tthat her name )as on(hold at the ate. 5he )as denied entry. 5he )as directed to proceed to the personnel office )here one of the staffhanded her a memorand"m. The memorand"m stated that she )as bein dismissed for immoral cond"ct. 5he ref"sed to sin thememorand"m beca"se she )as on leae for 21 days and has not been ien a chance to e@plain. The manaement ased her to )rite ane@planation. 8o)eer, after s"bmission of the e@planation, she )as nonetheless dismissed by the company. ?"e to her "rent need formoney, she later s"bmitted a letter of resination in e@chane for her thirteenth month pay.

Issu&% )hether the policy of the employer bannin spo"ses from )orin in the same company iolates the rihts of the employee "nder theConstit"tion and the abor Code or is a alid e@ercise of manaement preroatie

H&'(%Bes. A reH"irement that a )oman employee m"st remain "nmarried co"ld be "stified as a bona fide occ"pational H"alification,> or !9O,

)here the partic"lar reH"irements of the ob )o"ld "sti fy the same, b"t not on the ro"nd of a eneral principle, s"ch as the desirability ofspreadin )or in the )orplace. A reH"irement of that nat"re )o"ld be alid proided it reflects an inherent H"ality reasonably necessary forsatisfactory ob performance.

There is no reasonable b"siness necessity in the case at bar. Respondents )ere hired after they )ere fo"nd fit for the ob, b"t )ere ased toresin )hen they married a co(employee. ;etitioners failed to sho) ho) the marriae of 5imbol, then a 5heetin Machine Operator, to Alma?ayrit, then an employee of the Repacin 5ection, co"ld be detrimental to its b"siness operations. 3either did petitioners e@plain ho) thisdetriment )ill happen in the case of 6ilfreda Comia, then a ;rod"ction 8elper in the 5electin ?epartment, )ho married 8o)ard Comia,then a helper in the c"tter(machine. The policy is premised on the mere fear that employees married to each other )ill be less efficient. $f )e"phold the H"estioned r"le )itho"t alid "stification, the employer can create policies based on an "nproen pres"mption of a perceieddaner at the e@pense of an employee:s riht to sec"rity of ten"re.

DUNCAN ASSOCIATION O" DETAILMAN7TG@O #*( EDRO A. TECSON v. GLAFO @ELLCOME HILIINES, INC.

G.R. No. 16499+ S&-t&0& 15, 4+

"#$ts%;edro A. Tecson )as hired by respondent #la@o 6ellcome ;hilippines, $nc. as medical representatie. Tecson sined a contract ofemployment )hich stip"lates, amon others, that he arees to st"dy and abide by e@istin company r"les0 to disclose to manaement anye@istin or f"t"re relationship by consan"inity or affinity )ith co(employees or employees of competin dr" companies and sho"ldmanaement find that s"ch relationship poses a possible conflict of interest, to resin from the company.

$f manaement perceies a conflict of interest or a potential conflict bet)een s"ch relationship and the employee:s employment )ith thecompany, the manaement and the employee )ill e@plore the possibility of a transfer to another department in a non(co"nterchecinposition> or preparation for employment o"tside the company after si@ months.

5"bseH"ently, Tecson entered into a romantic relationship )ith !ettsy, an employee of Astra ;harmace"ticals, a competitor of #la@o. !ettsy

)as Astra:s !ranch Coordinator in Albay. 5he s"perised the district manaers and medical representaties of her company and preparedmaretin strateies for Astra in that area.

Een before they ot married, Tecson receied seeral reminders from his ?istrict Manaer reardin the conflict of interest )hich hisrelationship )ith !ettsy miht enender. 5till, loe preailed, and Tecson married !ettsy in 5eptember 1-.

$n +an"ary 1, Tecson:s s"periors informed him that his marriae to !ettsy ae rise to a conflict of interest. Tecson:s s"periors remindedhim that he and !ettsy sho"ld decide )hich one of them )o"ld resin from their obs, altho"h they told him that they )anted to retain himas m"ch as possible beca"se he )as performin his ob )ell.

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Tecson reH"ested for time to comply )ith the company policy aainst enterin into a relationship )ith an employee of a competitor company.8e e@plained that Astra, !ettsy:s employer, )as plannin to mere )ith Ueneca, another dr" company0 and !ettsy )as plannin to aail ofthe red"ndancy pacae to be offered by Astra. 6ith !ettsy:s separation from her company, the potential conflict of interest )o"ld beeliminated. At the same time, they )o"ld be able to aail of the attractie red"ndancy pacae from Astra.

$n A""st 1, Tecson aain reH"ested for more time resole the problem. $n 5eptember 1, Tecson applied for a transfer in #la@o:s mildiision, thinin that since Astra did not hae a mil diision, the potential conflict of interest )o"ld be eliminated. 8is application )as denied

in ie) of #la@o:s least(moement(possible> policy.

$n 3oember 1, #la@o transferred Tecson to the !"t"an City(5"riao City(A"san del 5"r sales area. Tecson ased #la@o to reconsiderits decision, b"t his reH"est )as denied.

Tecson defied the transfer order and contin"ed actin as medical representatie in the Camarines 5"r(Camarines 3orte sales area. ?"rinthe pendency of the rieance proceedins, Tecson )as paid his salary, b"t )as not iss"ed samples of prod"cts )hich )ere competin )ithsimilar prod"cts

Issu&% )hether #la@o:s policy aainst its employees marryin employees from competitor companies is alid

H&'(%Bes. #la@o has a riht to "ard its trade secrets, man"fact"rin form"las, maretin strateies and other confidential prorams andinformation from competitors, especially so that it and Astra are rial companies in the hihly competitie pharmace"tical ind"stry.

The prohibition aainst personal or marital relationships )ith employees of competitor companies "pon #la@o:s employees is reasonable"nder the circ"mstances beca"se relationships of that nat"re miht compromise the interests of the company. $n layin do)n the assailedcompany policy, #la@o only aims to protect its interests aainst the possibility that a competitor company )ill ain access to its secrets andproced"res.

The challened company policy does not iolate the eH"al protection cla"se of the Constit"tion as petitioners erroneo"sly s"est. $t is asettled principle that the commands of the eH"al protection cla"se are addressed only to the state or those actin "nder color of its a"thority.The eH"al protection cla"se erects no shield aainst merely priate cond"ct, ho)eer, discriminatory or )ronf"l. The only e@ception occ"rs

)hen the state in any of its manifestations or actions has been fo"nd to hae become ent)ined or inoled in the )ronf"l priate cond"ct.Obio"sly, ho)eer, the e@ception is not present in this case. 5inificantly, the company act"ally enforced the policy after repeated reH"eststo the employee to comply )ith the policy. $ndeed, the application of the policy )as made in an impartial and een(handed manner, )ith d"e

reard for the lot of the employee.

$n any eent, from the )ordins of the contract"al proision and the policy in its employee handboo, it is clear that #la@o does not imposean absol"te prohibition aainst relationships bet)een its employees and those of competitor companies. $ts employees are free to c"ltiaterelationships )ith and marry persons of their o)n choosin. 6hat the company merely sees to aoid is a conflict of interest bet)een theemployee and the company that may arise o"t of s"ch relationships. As s"ccinctly e@plained by the appellate co"rt, th"s%

The policy bein H"estioned is not a policy aainst marriae. An employee of the company remains free to marry anyone of his or herchoosin. The policy is not aimed at restrictin a personal preroatie that belons only to the indiid"al. 8o)eer, an employee:s personaldecision does not detract the employer from e@ercisin manaement preroaties to ens"re ma@im"m profit and b"siness s"ccess.>

The assailed company policy )hich forms part of respondent:s Employee Code of Cond"ct and of its contracts )ith its employees, s"ch asthat sined by Tecson, )as made no)n to him prior to his employment. Tecson, therefore, )as a)are of that restriction )hen he sined his

employment contract and )hen he entered into a relationship )ith !ettsy. 5ince Tecson no)inly and ol"ntarily entered into a contract ofemployment )ith #la@o, the stip"lations therein hae the force of la) bet)een them and, th"s, sho"ld be complied )ith in ood faith.> 8e istherefore estopped from H"estionin said policy.

ULTRA ILLA "OOD HAUS, #*(o ROSIE TIO v. RENATO GENISTON, NATIONAL LABOR RELATIONS COMMISSION RESIDINGCOMMISSIONER ?+TH DIISIONG.R. No. 14+53 !u*& 43, 1999

"#$ts%

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Art. 14. $ndemnity for "n"st termination of serices. K $f the period of ho"sehold serice is fi@ed, neither the employer nor the ho"sehelpermay terminate the contract before the e@piration of the term, e@cept for a "st ca"se. $f the ho"sehelper is "n"stly dismissed, he or she shallbe paid the compensation already earned pl"s that for fifteen &1/' days by )ay of indemnity.

$f the ho"sehelper leaes )itho"t "stifiable reason he or she shall forfeit any "npaid salary d"e him or her not e@ceedin fifteen &1/' days.>

MENANDRO B. LAUREANO v. COURT O" AEALS AND SINGAORE AIRLINES LIMITEDG.R. No. 11+556 "&u#2 4, 4

"#$ts%Menandro !. a"reano, then ?irector of 9liht Operations and Chief ;ilot of Air Manila, applied for employment )ith priate respondentthro"h its Area Manaer in Manila. After the "s"al personal interie), defendant )rote to plaintiff, offerin a contract of employment as ane@patriate !(7<7 captain for an oriinal period of 2 years commencin on +an"ary 21, 17-. ;etitioner accepted the offer and commenced

)orin on +an"ary 2<, 17. After passin the si@(month probation period, petitioner:s appointment )as confirmed effectie +"ly 21, 17.

;riate respondent offered petitioner an e@tension of his t)o(year contract to / years effectie +an"ary 21, 17 to +an"ary 2<, 1-4 s"bectto the terms and conditions set forth in the contract of employment, )hich the latter accepted.

5ometime in 1-2, ;riate respondent hit by a recession, initiated cost(c"ttin meas"res. 17 e@patriate captains in the Airb"s fleet )erefo"nd in e@cess of the priate respondent:s reH"irement. ConseH"ently, priate respondent informed its e@patriate pilots incl"din plaintiff ofthe sit"ation and adised them to tae adance leaes. Realiin that the recession )o"ld not be for a short time, priate respondentdecided to terminate its e@cess personnel. $t did not, ho)eer, immediately terminate it:s A(<< pilots. $t reie)ed their H"alifications forpossible promotion to the !(747 fleet. Amon the 17 e@cess Airb"s pilots reie)ed, t)ele )ere fo"nd H"alified. Fnfort"nately, petitioner )asnot one of the t)ele.

;riate respondent informed petitioner of his termination effectie 3oember 1, 1-2 and that he )ill be paid months salary in lie" of threemonths notice. !eca"se he co"ld not "proot his family on s"ch short notice, petitioner reH"ested a three(month notice to afford him time toe@ha"st all possible aen"es for reconsideration and retention. ;etitioner ae only 2 months notice and 1 month salary. Arieed, plaintiffon +"ne 2, 1-, instit"ted a case for illeal dismissal before the abor Arbiter. ;etitioner moed to dismiss on "risdiction ro"nds. !eforesaid motion )as resoled, the complaint )as )ithdra)n. Thereafter, petitioner filed the instant case for damaes d"e to illeal termination ofcontract of serices before the co"rt a &!o

Issu& K1%$s the present action based on contract )hich prescribes in 1< years "nder Art. 1144 of the 3CC or one for damaes arisin from an in"ry tothe rihts of the petitioner )hich prescribes in 4 years "nder Art. 114* of the 3CCL

H&'( K1%3either Article 11447 nor Article 114*- of the Ciil Code is here pertinent. 6hat is applicable is Article 21 of the abor Code, vi%

Art. 21. 'oney claims. K All money claims arisin from employee(employer relations accr"in d"rin the effectiity of this Code shall befiled )ithin three &' years from the time the ca"se of action accr"ed0 other)ise they shall be foreer barred.>

$n illeal dismissal, it is settled, that the ten(year prescriptie period fi@ed in Article 1144 of the Ciil Code may not be inoed by petitioners,for the Ciil Code is a la) of eneral application, )hile the prescriptie period fi@ed in Article 22 of the abor Code Ino) Article 21J is a5;EC$A A6 applicable to claims arisin from employee(employer relations.

$n the liht of Article 21, aforecited, )e aree )ith the appellate co"rt:s concl"sion that petitioner:s action for damages d!e to illegal termination filed aain on +an"ary -, 1-7 or more than fo"r &4' years after the effectie date of his dismissal on 3oember 1, 1-2 hasalready prescribed.

Issu& K4% )hether petitioner:s separation from the company d"e to retrenchment )as alid

H&'( K4%Bes. The employment contract of petitioner allo)ed for pre(termination of employment. Contracts hae the force of la) bet)een the parties.

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HIL. INTEGRATED LABOR ASSISTANCE CORORATION v. NATIONAL LABOR RELATIONS COMMISSION AND LEONORA L.DAYAGG.R. No. 1433+ Nov&0& 19, 1996

"#$ts%?issatisfied )ith her income as a ?56? social )orer, eonora ?aya applied )ith petitioner ;hilippine $nterated abor AssistanceCorporation &;8$AC' for employment abroad. After complyin )ith the reH"irements for oerseas employment, ?aya paid a placement fee

of ;22,/<< on fie different occasions. ;8$AC, ho)eer, did not iss"e complete receipts coerin s"ch payments informin ?aya thats"ch receipts are "nnecessary> beca"se the payments )ere recorded in a lo boo.

?aya sined an employment contract )ith ;8$AC proidin for a fi@ed t)o(year term as a domestic helper=babysitter in 8onon )ith amonthly salary of 8P,2<< and an allo)ance of 8P2<=day. 5he left for 8onon on May 7, 12 and started )orin the follo)in day asthe domestic helper of Roer Chan Chan 8on:s family. On the seenth day of her )or, ?aya )as s"ddenly told by Mr. 8on:s )ife topac("p> and leae> at once. 5he )as ien 8P7/< for the serices rendered. Fpon her ret"rn, ?aya filed a complaint for illealdismissal, illeal e@action for non(iss"ance of receipts and payment of 8P7*,<<< &salary and allo)ance' for the "ne@pired portion of thecontract )ith the ;hilippine Oerseas Employment Aency &;OEA'. ;8$AC co"ntered that ?aya:s dismissal )as for ca"se d"e todishonesty> and misrepresentation> in her application that she )as preio"sly employed as a ho"sehelper and that she is an e@periencedbaby sitter thereby alleedly e@posin Mr. 8on:s baby to riss.

Issu&%

)hether petitioner:s liability is limited only to a 1/(day salary of the employee "nder Article 14 of the abor Code and not to the salarycorrespondin to the "ne@pired portion of the employment contract

H&'(%3o. &see Art. 14' The 1/(day salary is a)arded in the form of an indemnity d"e to "n"st dismissal, i.e., dismissal )itho"t "st ca"se andnotice and before the lapse of the contract term. The amo"nt is in addition to and not a s"bstit"te for the ho"sehelper:s salary for the"ne@pired portion of the contract. The 5alary for the "ne@pired portion of the contract, as a settled r"le, is a)arded as a res"lt of the iolationof her sec"rity of ten"re "nder the contract term.

;etitioner, as the recr"iter and aent of the forein employer, is solidarily liable )ith the latter for s"ch iolations and for the correspondina)ard. 8o)eer, considerin that ?aya failed to appeal the monetary a)ard ien by the ;OEA, )e cannot therefore rant her theadditional affirmatie relief constit"tin the 1/(day indemnity a)ard )hich the ;OEA and the 3RC failed to rant.

NATIONAL SUGAR RE"INERIES CORORATION, ARSENIO B. YULO, #*( CONRADO IADAD v. NATIONAL LABOR RELATIONSCOMMISSION, BEN!AMIN L. UIMBA, #*( !ENNY LAGRANA ?)* &-&s&*t#t)o* o/ & '#t& us#*( MONICO LAGRANAG. R. No. 11439 7 !u*& 41, 1999

"#$ts%$n 1*, respondent "imba )as detailed as a )areho"seman in the Calino amb"nao 5"armill, $nc., a sister corporation of petitioner3ational 5"ar Refineries Corporation &3A5FRE9CO', "ntil his transfer to petitioner corporation ten years later. On the other hand,respondent arana started )orin for 3A5FRE9CO in 17 as s"ar c"t(in coneyor tender. Thro"h the years the t)o )ere promoted"ntil "imba became the s"ar )areho"se s"perintendent and arana, the s"ar )areho"se s"perisor. These )ere the positions they

)ere holdin )hen they )ere dismissed 1-. At that time, "imba had sered the company and its sister corporation for 2< years and 1<months, )hile arana had sered 3A5FRE9CO for 1< years and 4 months.

5ometime in A""st 1--, 3A5FRE9CO held a biddin for the sale of "sed "te bas. +el Maretin )on the riht to p"rchase 1<<,<<<

pieces of class C bas. The manaement committee in chare of the disposal of the bas, of )hich respondent "imba )as a member,desinated the latter to s"perise the )ithdra)al of the sacs from the 3A5FRE9CO compo"nd. As the class C bas )ere mi@ed )ith themore e@pensie types &classes A and !', it )as areed that the b"yer, +el Maretin, )o"ld send its o)n personnel to 3A5FRE9CO for thesortin, co"ntin, and b"ndlin &5C!' of the 1<<,<<< bas into b"ndles of *<<. +el Maretin )as to )ithdra) /<,<<< bas in October 1--b"t only 4-,<<< )ere sereated from the stocpile. 6hen its )orers tried to sort and b"ndle the remainin 2,<<< bas, priate respondentsdid not allo) them as some bas )ere mi@ed )ith class A ones./ As a res"lt, +el Maretin )as only able to )ithdra) 4-,<<< bas. 6henthe )orers came bac on 3oember 12, 1-- for the remainin bas, respondent "imba directed respondent arana to hae Rodolfoilia, a "tility man on floatin stat"s, s"perise the sortin and b"ndlin of bas, )hich lasted "ntil 3oember 17, 1--.

On 3oember 2, 1--, +el Maretin sent t)o tr"cs to petitioner:s Calino plant to pic "p the sacs. The ate pass coerin the bas )as sined by respondent "imba, ;aH"ito Rebote, representin +el Maretin, and E@pedito !"ena, representin 3A5FRE9CO:s eneral

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manaer, Conrado Diadad. Fpon inspection of the tr"cs: caro at the ate, the "ard discoered that the b"ndles )ere padded. A reco"ntsho)ed an e@cess of 2<,/<< bas )orth ;124,7-7./<.

$n his report on the same day to respondent "imba, respondent arana e@plained that d"e to the assinment of )orers in the retrieal ofb"rnt sacs and liH"idation of ra) s"ar, )as able to assin only one person, ilia, to )atch the sortin of the bas. 8e added that on ilia:sday off on 3oember 17, 1--, he assined three other )orers to the ob. $n another report, dated 3oember 2/, 1--, aranarecommended the s"spension of ilia for thirty days for nelect of d"ty. $n t"rn, "imba s"bmitted a report of the incident to Arsenio del

Rosario, the administratie manaer of 3A5FRE9CO, attachin arana:s first report.

$n the third H"arter of 1-, the manaement noted a shortae of -,72- pic"ls of ra) s"ar from its stoc. The matter )as promptly reportedto 3A5FRE9CO:s head office in Manila. Actin on the report, the board of directors of 3A5FRE9CO created a committee to inestiate notonly the reported s"ar losses b"t also the attempted theft of "sed bas earlier.

On A""st 1<, 1-, priate respondents )ere placed on a <(day preentie s"spension. il ia )as s"spended for < days, effectie A""st, 1-, for nelect of d"ty in connection )ith the sortin and b"ndlin of the "sed bas in 3oember 1--. On 5eptember *, 1-, priaterespondents: s"spensions )ere e@tended for another < days pendin the inestiation by the committee. $n addition, they )ere reH"ired toe@plain in )ritin )hy they sho"ld not be dismissed for ross nelience sortin and b"ndlin and breach of tr"st. $n d"e time, boths"bmitted their )ritten e@planations.

;riate respondents "imba and arana receied memoranda informin them of their dismissal, effectie 3oember 1<, 1-, for rossnelience and loss of tr"st in connection )ith the )ithdra)al of the "sed bas. ;riate respondents "imba and arana receiedmemoranda informin them of their dismissal.

Issu&% )hether priate respondents )ere illeally dismissed

H&'(%Bes. ;riate respondents )ere "ilty of nelience in connection )ith the )ithdra)al of "sed bas by +el Maretin. 8o)eer, theirnelience )as neither ross nor habit"al so as to )arrant their dismissal from employment.

Respondents )ere remiss in their s"perision of the )ithdra)al of the sacs by the b"yer +el Maretin. $t is "ncontroerted that +elMaretin )as s"pposed to )ithdra) /<,<<< class C bas from the 3A5FRE9CO compo"nd in October 1--. 8o)eer, the b"yer )as ableto tae o"t only 4-,<<< sacs. $n his report to administratie manaer del Rosario on 3oember 1/, 1-, respondent "imba e@plained,amon others%

At abo"t %< ;.M., Mr. !enamin "imba, the 5"ar 6areho"se 5"perintendent, came to me and told me to )atch oer the b"ndlin ofempty bas beca"se nobody )as )atchin oer that )or. The area )here the b"ndlin of empty bas )as bein done )as near the place

)here $ )as )orin beca"se it )as "st beside the Ra) 5"ar 6areho"se. $mmediately after Mr. "imba ae me that assinment, $ )entto the area )here the b"ndlin of empty bas )as bein done b"t )hen $ arried there $ fo"nd that the b"ndlin )as already completed sothat $ immediately ret"rned to my preio"s )or of scrapin s"ar.>

Respondent "imba himself admitted to Arsenio del Rosario, the administratie manaer, that one man alone co"ld not s"perise the )ee(lon sortin, co"ntin, and b"ndlin of 42,<<< sacs. 9"rthermore, as earlier mentioned, respondent "imba, in a memorand"m, dated3oember 2/, 1--, een reH"ired respondent arana to e@plain, )ithin 4- ho"rs, )hy he sho"ld not be s"spended for nelect of d"ty inthe s"perision of the )ee(lon sortin, co"ntin, and b"ndlin of the "sed bas.

Respondent "imba co"ld hae preented the attempted pilferae of the enormo"s n"mber of e@cess bas by orderin a final chec of the

b"ndles before iss"in the ate pass to ;aH"ito Rebote, the representatie of +el Maretin. $t )as sho)n d"rin the hearin that the pass, )hich )o"ld hae been eno"h for the tr"cs to leae the compo"nd, )as prepared by the )areho"se department )hich respondent"imba heads. $t )as dated 3oember 2, 1--, the day of the bas: )ithdra)al, and sined by respondent "imba, ;aH"ito Rebote, andE@pedito !"ena. Pno)in that sacs )orth ;*,*<<.<< )ere abo"t to be taen o"t of the compo"nd by irt"e of the ate pass, the least thatrespondent "imba co"ld hae done )as to hae a b"ndle do"ble(checed before sinin the pass.

Respondent "imba testified that the iss"ance of the ate pass is ro"tine "pon payment of the bas. Een so, this does not e@c"se hisfail"re to order a do"ble(chec considerin that the bas )ere sorted, co"nted, and b"ndled for fie days by people hired by the b"yer )ithonly one 3A5FRE9CO personnel to )atch them, not to mention the fact that the b"yer had earlier been inoled in irre"larities inconnection )ith the first )ithdra)al of bas in October 1--.

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There are, ho)eer, a n"mber of factors )hich mitiate priate respondents: shortcomins. 9irstly, this is their first offense. Fnder Art. 2-2par. &b' of the abor Code, habit"ally, that is, repetition of similar acts, is an indispensable element for dismissals d"e to ross nelience.;etitioners ar"e that this condition )as met beca"se the sortin of the bas too place from 3oember 12 to 17, 1--, th"s, priaterespondents )ere alleedly nelient on more than one occasion. The reasonin is fla)ed. The entire sortin and b"ndlin of the sacsconstit"tes a sinle operation and sho"ld not be diided into parts.

Moreoer, priate respondents did not really hae m"ch choice in assinin only one man to )atch the sortin and b"ndlin of the sacs as it

is "ncontroerted that )hen +el Maretin )orers came bac on 3oember 12, 1--, the )areho"se department )as b"sy )ith otheractiities.

5econdly, petitioners hae not presented eidence to s"pport their claim of loss of confidence in priate respondents. Art. 2-2 par. &c' of theabor Code proides%

Art. 2-2. Termination by employer ( An employer may terminate an employee for any of the follo)in ca"ses%

@ @ @

&c' . . . )illf"l breach by the employee of the tr"st reposed in him employer.>

$n )i! v. *ational Labor Relations #ommission, it )as e@plained%

$n the lan"ae of the aforeH"oted Article 2-I2J &c' of the abor Code, the Iloss of confidenceJ m"st be based on the )illf"l breach of thetr"st reposed in the employee by his employer. Ordinary breach )ill not s"ffice0 it m"st be )illf"l. 5"ch breach is )illf"l if it is doneintentionally, no)inly, and p"rposely, )itho"t "stifiable e@c"se, as distin"ished from an act done carelessly, tho"htlessly orinadertently. I9"rthermoreJ, it m"st be based on s"bstantial eidence.>

Clearly, priate respondents: nelient acts cannot fall "nder this cateory.

Thirdly, petitioners themseles are not )itho"t blame. As noted by the abor Arbiter, it )as "n"s"al for 3A5FRE9CO to s"spend priaterespondents only on 5eptember *, 1-, nearly ten months after the letter )ere first inestiated for the attempted theft of the "sed sacs.;etitioners e@plain that this )as necessary for the "dicio"s appraisal and deliberation on the merits of the chares aainst IpriaterespondentJ.

The contention is "ntenable beca"se d"rin the interim, petitioner practically dropped the matter as priate respondents )ere neer

reprimanded and no mention )as eer made of the incident. $t )o"ld appear that petitioners did not really lose confidence in priaterespondents beca"se of this incident. $t )as only after the iss"e on the p"rported s"ar losses came o"t that they reied this matter.8o)eer, petitioners, in this appeal, hae abandoned their claim that priate respondents are responsible for the latter. This co"ld only meanthat they hae accepted priate respondents: e@planation that the alleed losses )ere act"ally ca"sed by the "nderstatement of )eihts inthe 8opper scale. $t is, therefore, no) late for petitioners to conince the Co"rt of somethin &that they hae lost confidence in priaterespondents' )hich in the first place they themseles did not beliee in.

DAAO "RUITS CORORATION v. ASSOCIATED LABOR UNIONS ?ALU /o )* &#'/ o/ #'' t& #*>7#*(7/)'& o>&s&0-'o2&&s o/DAAO "RUITS CORORATION #*( NATIONAL LABOR RELATIONS COMMISSIONG.R. No. 853 August 4+, 1993

"#$ts%

Respondent Associated abor Fnions &AF', for and in behalf of all the ran(and(file )orers and employees of petitioner, filed a complaintbefore the Ministry of abor and Employment, Reional Arbitration !ranch, aainst petitioner, for V;ayment of the Thirteenth(Month ;ay?ifferentials.V Respondent AF so"ht to recoer from petitioner the thirteenth month pay differential for 1-2 of its ran(and(file employees,eH"ialent to their sic, acation and maternity leaes, premi"m for )or done on rest days and special holidays, and pay for re"larholidays )hich petitioner, alleedly in disreard of company practice since 17/, e@cl"ded from the comp"tation of the thirteenth month payfor 1-2.

$n its ans)er, petitioner claimed that it erroneo"sly incl"ded items s"bect of the complaint in the comp"tation of the thirteenth month pay forthe years prior to 1-2, "pon a do"btf"l and diffic"lt H"estion of la).

Issu&%

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)hether in the comp"tation of the thirteenth month pay ien by employers to their employees "nder ;.?. 3o. -/1, payments for sic,acation and maternity leaes, premi"ms for )or done on rest days and special holidays, and pay for re"lar holidays may be e@cl"ded inthe comp"tation and payment thereof, reardless of lon(standin company practice

H&'(%Bes. ;residential ?ecree 3o. -/1, prom"lated on ?ecember 1*, 17/, mandates all employers to pay their employees a thirteenth monthpay. 8o) this pay shall be comp"ted is set forth in 5ection 2 of the VR"les and Re"lations $mplementin ;residential ?ecree 3o. -/1,V th"s%

5ECT$O3 2. . . .

&a' VThirteenth month payV shall mean one t)elfth &1=12' of the basic salary of an employee )ithin a calendar year.

&b' V!asic 5alaryV shall incl"de all rem"nerations or earnins paid by an employer to an employee for serices rendered b"t may not incl"decost of liin allo)ances ranted p"rs"ant to ;residential ?ecree 3o. /2/ or etter of $nstr"ctions 3o. 174, profit(sharin payments, and allallo)ances and monetary benefits )hich are not considered or interated as part of the re"lar or basic salary of the employee at the time ofthe prom"lation of the ?ecree on ?ecember 1*, 17/.>

The ?epartment of abor and Employment iss"ed on +an"ary 1*, 17* the V5"pplementary R"les and Re"lations $mplementin ;.?. 3o.-/1V )hich in pararaph 4 thereof f"rther defines the term Vbasic salary,V th"s%

4. Oertime pay, earnins and other rem"nerations )hich are not part of the basic salary shall not be incl"ded in the comp"tation of the 1thmonth pay.>

Clearly, the term Vbasic salaryV incl"des rem"nerations or earnins paid by the employer to employee, b"t e@cl"des cost(of(liin allo)ances,profit(sharin payments, and all allo)ances and monetary benefits )hich hae not been considered as part of the basic salary of theemployee as of ?ecember 1*, 17/. The e@cl"sion of cost(of(liin allo)ances and profit sharin payments sho)s the intention to stripVbasic salaryV of payments )hich are other)ise considered as VfrineV benefits. This intention is emphasied in the catch all phrase Vallallo)ances and monetary benefits )hich are not considered or interated as part of the basic salary.V !asic salary, therefore does not merelye@cl"de the benefits e@pressly mentioned b"t all payments )hich may be in the form of VfrineV benefits or allo)ances. Oertime pay,

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