labstan cases2

8/10/2019 Labstan cases2

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BITOY JAVIER (DANILO P. JAVIER),Petitioner,vs.FLY ACE CORPORATION/FLORDELYN CASTILLO,Respondents.MENDOZA,J.:February 15, 2012

FACTS

On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of salaries and other labor standardbenefits. Healleged that he was an employee of Fly Ace since September 2007, performing various tasks at the respondentswarehousesuch as cleaning and arranging the canned items before their delivery to certain locations, except in instances when hewouldbe ordered to accompany the companys delivery vehicles, aspahinante

; that he reported for work from Monday to Saturdayfrom 7:00 oclock in the morning to 5:00 oclock in the afternoon; that during his employment, he was not issued anidentificationcard and payslips by the company; that on May 6, 2008, he reported for work but he was no longer allowed to enter thecompany premises by the security guard upon the instruction of Ruben Ong(Mr. Ong)

, his superior;5

that after several minutesof begging to the guard to allow him to enter, he saw Ong whom he approached and asked why he was being barred fromentering the premises; that Ong replied by saying, "Tanungin mo anak mo;"

6

that he then went home and discussed the matterwith his family; that he discovered that Ong had been courting his daughter Annalyn after the two met at a fiestacelebration inMalabon City; that Annalyn tried to talk to Ong and convince him to spare her father from trouble but he refused toaccede; thatthereafter, Javier was terminated from his employment without notice; and that he was neither given the opportunity torefute thecause/s of his dismissal from work.Fly Ace averred that it was engaged in the business of importation and sales of groceries. Sometime in December 2007,Javierwas contracted by its employee, Mr. Ong, as extra helper on apakyaw

basis at an agreed rate of P 300.00 per trip, which was

later increased to P 325.00 in January 2008. Mr. Ong contracted Javier roughly 5 to 6 times only in a month whenever the

vehicle of its contracted hauler, Milmar Hauling Services, was not available. On April 30, 2008, Fly Ace no longer neededtheservices of Javier. Denying that he was their employee, Fly Ace insisted that there was no illegal dismissal.8

Fly Ace submitted acopy of its agreement with Milmar Hauling Services and copies of acknowledgment receipts evidencing payment to Javierfor hiscontracted services bearing the words, "daily manpower(pakyaw/piece rate pay)" and the latters signatures/initials.

Labor ArbiterLA dismissed the complaint. Javier failed to present proof that he was a regular employee of Fly Ace. [no ID,documents, payslips. Fly Ace is not engaged in trucking business but in the importation and sales of groceries. Sincethere is a
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regular hauler to deliver its products, we give credence toRespondents claim that complainant was contracted on "pakiao"basis.NLRCIt was of the view that apakyaw

-basis arrangement did not preclude the existence of employer-employee relationship."Payment by result x x x is a method of compensation and does not define the essence of the relation. It is a mere method

ofcomputing compensation, not a basis for determining the existence or absence of an employer-employee relationship.10"TheNLRC further averred that it did not follow that a worker was a job contractor and not an employee, just because the workhewas doing was not directly related to the employers trade or business or the work may be considered as "ext ra" helper as in thiscase; and that the relationship of an employer and an employee was determined by law and the same would prevailwhateverthe parties may call it.Finding Javier to be a regular employee, the NLRC ruled that he wasentitled to a security of tenure. For failing to presentproof of a valid cause for his termination, Fly Ace was found to be liable for illegal dismissal of Javier who was likewise

entitledto backwages and separation pay in lieu of reinstatement.Court of AppealsReinstated dismissal of complaint. Javier failed to prove by substantial evidence er-ee relationship. Did not

pass the control test.ISSUE:WON Javier was regular employee of Fly Ace. NO, onus probandi was on Javier and he failed to provide substantialevidence.RATIO:In an illegal dismissal case, theonus probandirests on the employer to prove that its dismissal of an employee was for a validcause. However, before a case for illegal dismissal can prosper, an employer-employee relationship must first beestablished.Existence of an employer-employee relationship between him and Fly Ace is essentially aquestion of fact. In dealing withfactual issues in labor cases, "substantial evidence

that amount of relevant evidence which a reasonable mind might acceptas adequate to justify a conclusionis sufficient."27

Pigcaulan vs. security and Credit

D E C I S I O N

DEL CASTILLO, J.:

It is not for an employee to prove non-payment of benefits to which he is entitled by law. Rather, it is on theemployer that the burden of proving payment of these claims rests.

This Petition for Review on Certiorari[if !supportFootnotes][1][endif]

assails the February 24, 2006 Decision[if

!supportFootnotes][2][endif]of the Court of Appeals (CA) in CA-G.R. SP No. 85515, which granted the petition for certiorarifiled

therewith, set aside the March 23, 2004[if !supportFootnotes][3][endif]

and June 14, 2004[if !supportFootnotes][4][endif]

Resolutions of the
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National Labor Relations Commission (NLRC), and dismissed the complaint filed by Oliver R. Canoy (Canoy) andpetitioner Abduljuahid R. Pigcaulan (Pigcaulan) against respondent Security and Credit Investigation, Inc. (SCII) and itsGeneral Manager, respondent Rene Amby Reyes. Likewise assailed is the June 28, 2006 Resolution

[if !supportFootnotes][5][endif]

denying Canoys and Pigcaulans Motion for Reconsideration.[if ! supportFootnotes][6][endif]

Factual Antecedents

Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to SCIIs different

clients. Subsequently, however, Canoy and Pigcaulan filed with the Labor Arbiter separate complaints

[if ! supportFootnotes][7][endif]

for underpayment of salaries and non-payment of overtime, holiday, rest day, service incentive leave and 13th monthpays. These complaints were later on consolidated as they involved the same causes of action.

Canoy and Pigcaulan, in support of their claim, submitted their respective daily time records reflecting the numberof hours served and their wages for the same. They likewise presented itemized lists of their claims for the correspondingperiods served.

Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries and otherbenefits under the law; that the salaries they received were above the statutory minimum wage and the rates provided bythe Philippine Association of Detective and Protective Agency Operators (PADPAO) for security guards; that their holidaypay were already included in the computation of their monthly salaries; that they were paid additional premium of 30% inaddition to their basic salary whenever they were required to work on Sundays and 200% of their salary for work done onholidays; and, that Canoy and Pigcaulan were paid the corresponding 13

thmonth pay for the years 1998 and 1999. In

support thereof, copies of payroll listings[if !supportFootnotes][8][endif]

and lists of employees who received their 13thmonth pay for

the periods December 1997 to November 1998 and December 1998 to November 1999[if !supportFootnotes][9][endif]

werepresented. In addition, respondents contended that Canoys and Pigcaulans monetary claims should only be limited to

the past three years of employment pursuant to the rule on prescription of claims.

Ruling of the Labor Arbi ter

Giving credence to the itemized computations and representative daily time records submitted by Canoy andPigcaulan, Labor Arbiter Manuel P. Asuncion awarded them their monetary claims in his Decision


dated June 6, 2002. The Labor Arbiter held that the payroll listings presented by the respondents did not prove thatCanoy and Pigcaulan were duly paid as same were not signed by the latter or by any SCII officer. The 13

thmonth payroll

was, however, acknowledged as sufficient proof of payment, for it bears Canoys and Pigcaulans signatures. Thus,without indicating any detailed computation of the judgment award, the Labor Arbiter ordered the payment of overtimepay, holiday pay, service incentive leave pay and proportionate 13

thmonth pay for the year 2000 in favor of Canoy and

Pigcaulan, viz:

WHEREFORE, the respondents are hereby ordered to pay the complainants: 1)their salary differentials in the amount of P166,849.60 for Oliver Canoy and P121,765.44 for

Abduljuahid Pigcaulan; 2) the sum of P3,075.20 for Canoy and P2,449.71 for Pigcaulan forservice incentive leave pay and; [3]) the sum of P1,481.85 for Canoy and P1,065.35 forPigcaulan as proportionate 13th month pay for the year 2000. The rest of the claims aredismissed for lack of sufficient basis to make an award.

SO ORDERED.[if ! supportFootnotes][11][endif]

Ruling of the Nat ional Labor Relat ions Commission

Respondents appealed to the NLRC. They alleged that there was no basisfor the awards made because aside from the self-serving itemized computations, no representative daily time record waspresented by Canoy and Pigcaulan. On the contrary, respondents asserted that the payroll listings they submitted should


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have been given more probative value. To strengthen their cause, they attached to their Memorandum on Appealpayrolls

[if ! supportFootnotes][12][endif]bearing the individual signatures of Canoy and Pigcaulan to show that the latter have received

their salaries, as well as copies of transmittal letters[if ! supportFootnotes][13][endif]

to the bank to show that the salaries reflected inthe payrolls were directly deposited to the ATM accounts of SCIIs employees.

The NLRC, however, in a Resolution[if ! supportFootnotes][14][endif]

dated March 23, 2004, dismissed the appeal andheld that the evidence show underpayment of salaries as well as non-payment of service incentive leavebenefit. Accordingly, the Labor Arbiters Decision was sustained. The motion for reconsideration thereto was likewise

dismissed by the NLRC in a Resolution


dated June 14, 2004.

Ruling of the Court of A ppeals

In respondents petition for certiorariwith prayer for the issuance of a temporary restraining order and preliminaryinjunction

[if ! supportFootnotes][16][endif]before the CA, they attributed grave abuse of discretion on the part of the NLRC in finding

that Canoy and Pigcaulan are entitled to salary differentials, service incentive leave pay and proportionate 13thmonth pay

and in arriving at amounts without providing sufficient bases therefor.

The CA, in its Decision[if !supportFootnotes][17][endif]

dated February 24, 2006, set aside the rulings ofboth the Labor Arbiter and the NLRC after noting that there were no factual and legal bases mentioned in the questionedrulings to support the conclusions made. Consequently, it dismissed all the monetary claims of Canoy and Pigcaulan onthe following rationale:

First. The Labor Arbiter disregarded the NLRC rule that, in cases involving money awards and at all events, asfar as practicable, the decision shall embody the detailed and full amount awarded.

Second. The Labor Arbiter found that the payrolls submitted by SCII have no probative value for being unsignedby Canoy, when, in fact, said payrolls, particularly the payrolls from 1998 to 1999 indicate the individual signatures ofCanoy.

Third. The Labor Arbiter did not state in his decision the substance of the evidence adduced by Pigcaulan andCanoy as well as the laws or jurisprudence that would show that the two are indeed entitled to the salary differential andincentive leave pays.

Fourth. The Labor Arbiter held Reyes liable together with SCII for the payment of the claimed salaries andbenefits despite the absence of proof that Reyes deliberately or maliciously designed to evade SCIIs alleged financialobligation; hence the Labor Arbiter ignored that SCII has a corporate personality separate and distinct from Reyes. To

justify solidary liability, there must be an allegation and showing that the officers of the corporation deliberately ormaliciously designed to evade the financial obligation of the corporation.


Canoy and Pigcaulan filed a Motion for Reconsideration, but same was denied by the CA in a Resolution[if

!supportFootnotes][19][endif]dated June 28, 2006.

Hence, the present Petition for Review on Certiorari.

Issues

The petition ascribes upon the CA the following errors:

I. The Honorable Court of Appeals erred when it dismissed the complaint onmere alleged failure of the Labor Arbiter and the NLRC to observe the prescribed form ofdecision, instead of remanding the case for reformation of the decision to include the desireddetailed computation.

II. The Honorable Court of Appeals erred when it [made] complainants suffer theconsequences of the alleged non-observance by the Labor Arbiter and NLRC of the prescribedforms of decisions considering that they have complied with all needful acts required to supporttheir claims.


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III. The Honorable Court of Appeals erred when it dismissed the complaintallegedly due to absence of legal and factual [bases] despite attendance of substantial

evidence in the records.[if ! supportFootnotes][20][endif]

It is well to note that while the caption of the petition reflects both the names of Canoy and Pigcaulan aspetitioners, it appears from its body that it is being filed solely by Pigcaulan. In fact, the Verification and Certification ofNon-Forum Shopping was executed by Pigcaulan alone.

In his Petition, Pigcaulan submits that the Labor Arbiter and the NLRC are not strictly bound by therules. And even so, the rules do not mandate that a detailed computation of how the amount awarded was arrived atshould be embodied in the decision. Instead, a statement of the nature or a description of the amount awarded and thespecific figure of the same will suffice. Besides, his and Canoys claims were supported by substantial evidence in the

form of the handwritten detailed computations which the Labor Arbiter termed as representative daily time records,showing that they were not properly compensated for work rendered. Thus, the CA should have remanded the caseinstead of outrightly dismissing it.

In their Comment,[if ! supportFootnotes][21][endif]

respondents point out that since it was only Pigcaulan who filed thepetition, the CA Decision has already become final and binding upon Canoy. As to Pigcaulans arguments, respondentssubmit that they were able to present sufficient evidence to prove payment of just salaries and benefits, which bits ofevidence were unfortunately ignored by the Labor Arbiter and the NLRC. Fittingly, the CA reconsidered these pieces ofevidence and properly appreciated them. Hence, it was correct in dismissing the claims for failure of Canoy andPigcaulan to discharge their burden to disprove payment.

Pigcaulan, this time joined by Canoy, asserts in his Reply[if ! supportFootnotes][22][endif]

that his filing of the presentpetition redounds likewise to Canoys benefit since their complaints were consolidated below. As such, they maintain thatany kind of disposition made in favor or against either of them would inevitably apply to the other. Hence, the institution ofthe petition solely by Pigcaulan does not render the assailed Decision final as to Canoy. Nonetheless, in said reply theyappended Canoys affidavit

[if ! supportFootnotes][23][endif]where he verified under oath the contents and allegations of the petition

filed by Pigcaulan and also attested to the authenticity of its annexes. Canoy, however, failed to certify that he had not

filed any action or claim in another court or tribunal involving the same issues. He likewise explains in said affidavit thathis absence during the preparation and filing of the petition was caused by severe financial distress and his failure toinform anyone of his whereabouts.

Our Ruling

The assailed CA Decision is considered final as to Canoy.

We have examined the petition and find that same was filed by Pigcaulan solely on his own behalf. This is veryclear from the petitions prefatory which is phrased as follows:

COMES NOW Petitioner Abduljuahid R. Pigcaulan, by counsel, unto thisHonorable Court x x x. (Emphasis supplied.)

Also, under the heading Parties, only Pigcaulan is mentioned as petitioner and consistent with this, the body of thepetition refers only to a petitioner and never in its plural form petitioners. Aside from the fact that the Verification andCertification of Non-Forum Shopping attached to the petition was executed by Pigcaulan alone, it was plainly andparticularly indicated under the name of the lawyer who prepared the same, Atty. Josefel P. Grageda, that he is theCounsel for Petitioner Adbuljuahid Pigcaulanonly. In view of these, there is therefore, no doubt, that the petition wasbrought only on behalf of Pigcaulan. Since no appeal from the CA Decision was brought by Canoy, same has alreadybecome final and executory as to him.


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Canoy cannot now simply incorporate in his affidavit a verification of the contents and allegations of the petition as

he is not one of the petitioners therein. Suffice it to state that it would have been different had the said petition been filedin behalf of both Canoy and Pigcaulan. In such a case, subsequent submission of a verification may be allowed as non-compliance therewith or a defect therein does not necessarily render the pleading, or the petition as in this case, fatallydefective.

[if ! supportFootnotes][24][endif] The court may order its submission or correction, or act on the pleading if the attending

circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice maybe served thereby. Further, a verification is deemed substantially complied with when one who has ample knowledge to

swear to the truth of the allegations in the complaint or petition signs the verification, and when matters alleged in thepetition have been made in good faith or are true and correct.[if ! supportFootnotes][25][endif]

However, even if it were so, we notethat Canoy still failed to submit or at least incorporate in his affidavit a certificate of non-forum shopping.

The filing of a certificate of non-forum shopping is mandatory so much sothat non-compliance could only be tolerated by special circumstances and compelling reasons.

[if !supportFootnotes][26][endif] This

Court has held that when there are several petitioners, all of them must execute and sign the certification against forumshopping; otherwise, those who did not sign will be dropped as parties to the case.

[if !supportFootnotes][27][endif] True, we held that

in some cases, execution by only one of the petitioners on behalf of the other petitioners constitutes substantialcompliance with the rule on the filing of a certificate of non-forum shopping on the ground of common interest or commoncause of action or defense.

[if !supportFootnotes][28][endif] We, however, find that common interest is not present in the instant

petition. To recall, Canoys and Pigcaulans complaints were consolidated because they both sought the same reliefsagainst the same respondents. This does not, however, mean that they share a common interest or defense. Theevidence required to substantiate their claims may not be the same. A particular evidence which could sustain Canoysaction may not effectively serve as sufficient to support Pigcaulans claim.

Besides, assuming that the petition is also filed on his behalf, Canoy failed to show any reasonable cause

for his failure to join Pigcaulan to personally sign the Certification of Non-Forum Shopping. It is his duty, as a litigant, tobe prudent in pursuing his claims against SCII, especially so, if he was indeed suffering from financial distress. However,Canoy failed to advance any justifiable reason why he did not inform anyone of his whereabouts when he knows that hehas a pending case against his former employer. Sadly, his lack of prudence and diligence cannot merit the courtsconsideration or sympathy. It must be emphasized at this point that procedural rules should not be ignored simplybecause their non-observance may result in prejudice to a partys substantial rights. The Rules of Court should befollowed except only for the most persuasive of reasons.


Having declared the present petition as solely filed by Pigcaulan, this Court shall consider the subsequentpleadings, although apparently filed under his and Canoys name, as solely filed by the former.

There was no substantial evidence to support the grant of overtime pay.


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The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service incentive leave pay and 13thmonth

pay for the year 2000 in favor of Canoy and Pigcaulan. The Labor Arbiter relied heavily on the itemized computationsthey submitted which he considered as representative daily time records to substantiate the award of salarydifferentials. The NLRC then sustained the award on the ground that there was substantial evidence of underpayment ofsalaries and benefits.

We find that both the Labor Arbiter and the NLRC erred in this regard. The handwritten itemized computations areself-serving, unreliable and unsubstantial evidence to sustain the grant of salary differentials, particularly overtime

pay. Unsigned and unauthenticated as they are, there is no way of verifying the truth of the handwritten entries statedtherein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan, these representative daily timerecords, as termed by the Labor Arbiter, can hardly be considered as competent evidence to be used as basis to provethat the two were underpaid of their salaries. We find nothing in the records which could substantially support Pigcaulanscontention that he had rendered service beyond eight hours to entitle him to overtime pay and during Sundays to entitlehim to restday pay. Hence, in the absence of any concrete proof that additional service beyond the normal working hoursand days had indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.

Pigcaulan is entitled to holiday pay, service incentive leave pay and proportionate 13thmonth pay for year 2000.

However, with respect to the award for holiday pay, service incentive leavepay and 13

thmonth pay, we affirm and rule that Pigcaulan is entitled to these benefits.

Article 94 of the Labor Code provides that:

ART. 94. RIGHT TO HOLIDAY PAY.(a) Every worker shall be paid his regular

daily wage during regular holidays, except in retail and service establishments regularlyemploying less than ten (10) workers.

While Article 95 of the Labor Code provides:

ART. 95. RIGHT TO SERVICE INCENTIVE LEA VE. (a) Every employee who

has rendered at least one year of service shall be entitled to a yearly service incentive of fivedays with pay.

Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does not work.[if

!supportFootnotes][30][endif] Likewise, express provision of the law entitles him to service incentive leave benefit for he rendered

service for more than a year already. Furthermore, under Presidential Decree No. 851,[if !supportFootnotes][31][endif]

he should bepaid his 13

thmonth pay. As employer, SCII has the burden of proving that it has paid these benefits to its employees.

[if

!supportFootnotes][32][endif]

SCII presented payroll listings and transmittal letters to the bank to show that Canoy and Pigcaulan receivedtheir salaries as well as benefits which it claimed are already integrated in the employees monthly salaries. However, thedocuments presented do not prove SCIIs allegation. SCII failed to show any other concrete proof by means of records,

pertinent files or similar documents reflecting that the specific claims have been paid. With respect to 13

th

month pay,SCII presented proof that this benefit was paid but only for the years 1998 and 1999. To repeat, the burden of provingpayment of these monetary claims rests on SCII, being the employer. It is a rule that one who pleads payment has theburden of proving it. Even when the plaintiff alleges non-payment, still the general rule is that the burden rests on thedefendant to prove payment, rather than on the plaintiff to prove non-payment.

[if !supportFootnotes][33][endif] Since SCII failed to

provide convincing proof that it has already settled the claims, Pigcaulan should be paid his holiday pay, service incentiveleave benefits and proportionate 13

thmonth pay for the year 2000.

The CA erred in dismissing the claims instead of remanding the case to the Labor Arbiter for a detailed computation of thejudgment award.

Indeed, the Labor Arbiter failed to provide sufficient basis for the monetary


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awards granted. Such failure, however, should not result in prejudice to the substantial rights of the party. While wedisallow the grant of overtime pay and restday pay in favor of Pigcaulan, he is nevertheless entitled, as a matter of right,to his holiday pay, service incentive leave pay and 13

th month pay for year 2000. Hence, the CA is not correct in

dismissing Pigcaulans claims in its entirety.

Consistent with the rule that all money claims arising from an employer-employee relationship shall be filed withinthree years from the time the cause of action accrued,

[if !supportFootnotes][34][endif]Pigcaulan can only demand the amounts due

him for the period within three years preceding the filing of the complaint in 2000. Furthermore, since the records are

insufficient to use as bases to properly compute Pigcaulans claims, the case should be remanded to the Labor Arbiter fora detailed computation of the monetary benefits due to him.

WHEREFORE, the petition is GRANTED. The Decision datedFebruary 24, 2006 and Resolution dated June 28, 2006 of the Court of Appeals in CA-G.R. SP No. 85515 areREVERSED and SET ASIDE. Petitioner Abduljuahid R. Pigcaulan is hereby declared ENTITLED to holiday pay andservice incentive leave pay for the years 1997-2000 and proportionate 13

thmonth pay for the year 2000.

The case is REMANDEDto the Labor Arbiter for further proceedings to determine the exact amount and to makea detailed computation of the monetary benefits due Abduljuahid R. Pigcaulan which Security and Credit Investigation Inc.should pay without delay.

Philippine Airlines (PAL) vs Philippine Airlines Employees Association (PALEA).entry-headerPhilippine Airlines (PAL) intends to terminate 2,600 regular employees and then rehire them through an outsourcingcompany as contractuals retaining only rank-and-file workers. This action will substantially cut PALs salaries expensesand increase profit margin. However, Philippine Airlines Employees Association (PALEA) opposes this management

decision.PALEA held a protest inside the airport to show resistance of what they call an illegal termination and implementation ofoutsourcing scheme. PALEA claims that PALs action is a manifestation of corporate greed as the Company hadpresented P3 billion comprehensive income in the fiscal year of 2011. PALEA established a protest camp located in frontof PAL to express continuing resistance of the illegal termination and contractualization scheme.In my opinion, the PALEA failed to emphasize a significant fact: PAL which was incorporated in 1941 was suffering fromlosses since Cebu Air challenged the Companys market share 1997.PALEA argued that PALs action is a manifestation of corporate greed because despite a 3 billion net income in 2011,PAL still aspires for higher profit by cutting employee costs. PALEA failed to emphasize is that PAL has been sufferingwith negative or low free cash flows (cash flow from operations less cash flow from investing), and has accumulated adeficit of 257 million in 2007 and despite the capital restructuring initiated by the company that wiped out these deficit in2008; the Company still accumulated a deficit of 14 million as of 2011. One may argue that the Company is already in thecourse of turning the operations around since in 2011, PAL already presented 3 billion net income. Although the numberis encouraging, the profit margin generated by PAL is only 4% which is less than half of Cebu Airs 9% profit margin. Oneunfavorable increase in the prices of fuel will surely drag PAL back to losses.I recommend that PAL management should encourage teamwork between them and employees before deciding interminating and contractualization of the employees. The decision of terminating and rehiring them as contractuals mightsubstantially decrease costs but employee morale will be greatly compromised. The management should set profit goalsto achieve every quarter and present plans and strategies on how to achieve these goals. The formulation of the planshould also be in consideration of the employees suggestions to make them feel part in facing the daunting challenge ofturning PALs operation around. To make sure that the Company is on track of these goals and employees staymotivated, constant monitoring of the progress should be put in place.

Pacific Consultants v. SchonfeldCallejo, 2007, ThirdRespondent Klaus Schonfeld, a Canadian citizen, had been a consultant in the fieldof environmental engineering and water supply and sanitation. Pacicon PhilippinesInc., a subsidiary of Pacific Consultants International of Japan, is a corporationwith the primary purpose to engage in the business of providing specialty andtechnical services both in and out of the Philippines. The president of PPI, JensPeter Henrichsen, who was also the director of PCIJ, was based in Tokyo, Japan.Respondent was employed by PCIJ, through Henrichsen, as Sector Manager of PPIin its Water and Sanitation Department. However, PCIJ assigned him as PPI sector

manager in the Philippines. Respondent arrived in the Philippines and assumed hisposition as PPI Sector Manager. He was accorded the status of a resident alien.

PPI applied for an Alien Employment Permit for respondent before the DOLE andthe DOLE granted the application and issued the Permit to respondent. Respondentlater received a letter from Henrichsen informing him that his employment hadbeen terminated for the reason that PCIJ and PPI had not been successful in the

water and sanitation sector in the Philippines. Respondent filed with PPI severalmoney claims. PPI partially settled some of his claims, but refused to pay the rest.Respondent filed a Complaint for Illegal Dismissal.Petitioners aver that since respondent is a Canadian citizen, the CA erred inignoring their claim that the principles of forum non conveniens and lex locicontractus are applicable. They also point out that the contract of employment of
https://fundamentalenthusiast.wordpress.com/2013/03/18/philippine-airlines-pal-vs-philippine-airlines-employees-association-palea/https://fundamentalenthusiast.wordpress.com/2013/03/18/philippine-airlines-pal-vs-philippine-airlines-employees-association-palea/


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respondent was executed in Tokyo. Moreover, under Section 21 of the GeneralConditions for Employment incorporated in respondents letter of employment, thedispute between respondent and PCIJ should be settled by the court of arbitrationof London. Petitioners insist that the U.S. Labor-Management Act applies only toU.S. workers and employers, while the Labor Code applies only to Filipinoemployers and Philippine-based employers and their employees, not to PCIJ. Infine, the jurisdictions of the NLRC and Labor Arbiter do not extend to foreign

workers who executed employment agreements with foreign employers abroad,although "seconded" to the Philippines.SC: The petition is denied for lack of merit.The settled rule on stipulations regarding venue, as held by this Court in thevintage case of Philippine Banking Corporation v. Tensuan, is that while they areconsidered valid and enforceable, venue stipulations in a contract do not, as a rule,supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the absence of qualifying or restrictivewords. They should be considered merely as anagreement or additional forum, not as limiting venue to the specified place. Theyare not exclusive but, rather permissive. If the intention of the parties were torestrict venue, there must be accompanying language clearly and categoricallyexpressing their purpose and design that actions between them be litigated only atthe place named by them.Petitioners insistence on the application of the principle of forum non conveniensmust be rejected. The bare fact that respondent is a Canadian citizen and was arepatriate does not warrant the application of the principle for the followingreasons: First. The Labor Code of the Philippines does not include forum non

conveniens as a ground for the dismissal of the complaint. Second. The proprietyof dismissing a case based on this principle requires a factual determination; hence,it is properly considered as defense. Third. In Bank of America, NT&SA, Bank of

America International, Ltd. v. Court of Appeals, this Court held that: [a] PhilippineCourt may assume jurisdiction over the case if it chooses to do so; provided, thatthe following requisites are met: (1) that the Philippine Court is one to which theparties may conveniently resort to; (2) that the Philippine Court is in a position to

make an intelligent decision as to the law and the facts; and, (3) that the PhilippineCourt has or is likely to have power to enforce its decision.

Coca Cola Bottlers Inc. v. Climaco February 5, 2007 G.R. No. 146881 514 SCRA 164

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Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers Phils., Inc(Coca-Cola), by virtue of a Retainer Agreement. The Retainer Agreement, which began on January 1, 1988, wasrenewed annually. The last one expired December 31, 1993. Despite the non-renewal of the Retainer Agreement,respondent continued to perform his functions as company doctor to Coca-Cola until he received a letter from petitionercompany concluding their retainership agreement. It is noted that as early as September 1992, petitioner was alreadymaking inquiries regarding his status with petitioner company. Petitioner company, however, did not take any action.Respondent inquired from the management of petitioner company whether it was agreeable to recognize him as a regularemployee. The management refused to do so.

Respondent filed a Complaint before the NLRC seeking recognition as a regular employee of petitioner


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company and prayed for the payment of all benefits of a regular employee. While the complaint was pending before theLabor Arbiter, respondent received a letter from petitioner company concluding their retainership agreement effective 30days from receipt thereof. This prompted respondent to file a complaint for illegal dismissal against petitioner company.Respondent contend . The Labor Arbiter and NLRC declared that there is no employer-employee relationship existedbetween the parties. However, the Court of Appeals declared that respondent should be classified as a regular employeehaving rendered 6 years of service as plant physician by virtue of several renewed retainer agreements.

Issue: WON there exist an employer-employee relationship between the parties

Ruling:The court, in determining the existence of an employer-employee relationship, has invariably adhered to the

four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power ofdismissal; and (4) the power to control the employees conduct.

The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case showthat no employer-employee relationship exist between the parties, they correctly found that petitioner company lacked thepower of control over the performance by respondent of his duties. The Labor Arbiter reasoned that the ComprehensiveMedical Plan, which contains the respondents objectives, duties and obligations, does not tell respondent how toconduct his physical examination, how to immunize, or how to diagnose and treat his patients, employees of company, ineach case.

In effect, the Labor Arbiter held that petitioner company, through the Comprehensive Medical Plan, providedguidelines merely to ensure that the end result was achieved, but did not control the means and methods by whichrespondent performed his assigned tasks.

The NLRC affirmed the findings of the Labor Arbiter and stated that it is precisely because the company lacksthe power of control that the contract provides that respondent shall be directly responsible to the employee concernedand their dependents for any injury, harm or damage caused through professional negligence, incompetence or other

valid causes of action.In addition, the Court finds that the schedule of work and the requirement to be on call for emergency cases do

not amount to such control, but are necessary incidents to the Retainership Agreement. The Court agrees that there isnothing wrong with the employment of respondent as a retained physician of petitioner company and upholds the validityof the Retainership Agreement which clearly stated that no employe-employee relationship existed between the parties.Considering that there is no employer-employee relationship between the parties, the termination of the Retainership

Agreement , which is accordance with the provisions of the Agreement, does not constitute illegal dismissal ofrespondent.

DUMPIT MURILLO VS. CA AND ABCFACTS:Thelma Dumpit Murillo was employed asa newscaster and a co-anchor for Balitan-balitaby the Associated Broadcasting Company onOctober 2, 1995. The contract was for a periodof three months. On September 30, 1999, after

four years of repeated renewals, Petitioner stalent contract expired. No contract was againenteredinto by the parties to the previouscontract. The petitioners then wrote a letterdemanding her reinstatement to her formerposition, payment of backwages and services.On December 30, 1999, petitioner filed a caseagainst ABC for i llegal constructive dismissal.The labor arbiter ruled in favor of ABC. TheNLRC however reversed the decision and ruledthat an employer-employee relationship existedbetween petitioner and respondent and thatthe petitioner was a regular employee illegallydismissed. When the case reached the Court of

Appeals, the latter decided that Petitionershould not be allowed to renege from thestipulations she had voluntarily and knowingly

executed by invoking the security of tenure ofthe Labor Code, hence this appeal.ISSUE: WON an employee-employerrelationship existed between ABC andPetitioner and was she illegally dismissed.HELD:The CA committed reversible error when itheld that petitioner was a fixed term employee.Petitioner was a regular employee undercontemplation of law. The practice of havingfixed term contracts in the industry does notautomatically make all talent contracts valid


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and compliant with labor law.In Manila Water Company vs. Pena, theelements to determine the existence of anemployer employee relationship are: (a) theselection and engagement of the employee (b)the payment of wages, (c) the power ofdismissal, (d) the employers power to control.The duties of the Petitioner as enumerated in

her employment contract indicate that ABC had control over the work of the Petitioner. Asidefrom control, ABC also dictated the work

assignments and payment of Petitioner s wages.

ABC also had the power to dismiss her. All thesebeing present, clearly there existed anemployer-employee relationship betweenPetitioner and ABC.Concerning regular employment, the Lawprovides for two kinds of employees. (1) thoseengaged to perform activities which are usuallynecessary or desirable to the usual business ortrade of the employer, (2) those who haverendered at least one year of service, whethercontinuous broken.The Petitioner s work was necessary or

desirable in the usual business or trade of theemployer which includes its participation in the

Government s news and public informationdissemination. In addition, her work wascontinuous for four years. Her contract wasrenewed for over 15 times. This repetitiverenewal was indicative of Petitioner s work s

desirability and necessity. Hence it is concludedthat she is a regular employee

Consolidated broadcasting vs. oberoi

Assailed in this petition for review is the July 30, 2004 Decision[if ! supportFootnotes][1][endif]

of the Court of Appeals in CA-G.R. SP No. 77098, which affirmed the December 5, 2001 Decision

[if ! supportFootnotes][2][endif]of the National Labor Relations

Commission (NLRC) holding that respondents were regular employees of petitioner and that they were illegally dismissed.

Respondents alleged that they were employed as drama talents by DYWB-Bombo Radyo, a radio station ownedand operated by petitioner Consolidated Broadcasting System, Inc. They reported for work daily for six days in a week

and were required to record their drama production in advance. Some of them were employed by petitioner since 1974,while the latest one was hired in 1997.

[if ! supportFootnotes][3][endif] Their drama programs were aired not only in Bacolod City but

also in the sister stations of DYWB in the Visayas and Mindanao areas.[if !supportFootnotes][4][endif]

Sometime in August 1998, petitioner reduced the number of its drama productions from 14 to 11, but was opposedby respondents. After the negotiations failed, the latter sought the intervention of the Department of Labor andEmployment (DOLE), which on November 12, 1998, conducted through its Regional Office, an inspection of DWYBstation. The results thereof revealed that petitioner is guilty of violation of labor standard laws, such as underpayment ofwages, 13

thmonth pay, non-payment of service incentive leave pay, and non-coverage of respondents under the Social

Security System.

Petitioner contended that respondents are not its employees and refused to submit the payroll and daily timerecords despite the subpoena duces tecum issued by the DOLE Regional Director. Petitioner further argued that the caseshould be referred to the NLRC because the Regional Director has no jurisdiction over the determination of the existenceof employer-employee relationship which involves evidentiary matters that are not verifiable in the normal course ofinspection.

Vexed by the respondents complaint, petitioner allegedly pressured and intimidated respondents. RespondentsOberio and Delta were suspended for minor lapses and the payment of their salaries were purportedlydelayed. Eventually, on February 3, 1999, pending the outcome of the inspection case with the Regional Director,respondents were barred by petitioner from reporting for work; thus, the former claimed constructive dismissal.

[if

!supportFootnotes][5][endif]

On April 8, 1999, the DOLE Regional Director issued an orderdirecting petitioner to pay respondents a total of P318,986.74 representing non-payment/underpayment of the salaryand benefits due them.

[if ! supportFootnotes][6][endif] However, on July 8, 1999, the Regional Director reconsidered the April 8, 1999

order and certified the records of the case to the NLRC, Regional Arbitration Branch VI, for determination of employer-employee relationship.

[if !supportFootnotes][7][endif] Respondents appealed said order to the Secretary of Labor.


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On October 12, 1999, respondents filed a case for illegal dismissal, underpayment/non-payment of wagesand benefits plus damages against petitioner. On April 10, 2000, the Labor Arbiter dismissed the case without prejudicewhile waiting for the decision of the Secretary of Labor on the same issue of the existence of an employer-employeerelationship between petitioner and respondents.

On appeal to the NLRC, respondents raised the issue of employer-employee relationship and submitted thefollowing to prove the existence of such relationship, to wit: time cards, identification cards, payroll, a show cause order ofthe station manager to respondent Danny Oberio and memoranda either noted or issued by said manager. Petitioner, on

the other hand, did not present any documentary evidence in its behalf and merely denied the allegations ofrespondents. It claimed that the radio station pays for the drama recorded by piece and that it has no control over theconduct of respondents.

On December 5, 2001, the NLRC rendered a decision holding that respondents were regular employees ofpetitioner who were illegally dismissed by the latter. It further held that respondents complied with the requirements of therule on forum shopping. The decretal portion thereof, provides:

WHEREFORE, premises considered, the decision of Labor Arbiter Ray Alan T. Drilon dated 10 April 2000 is SET ASIDEand VACATED and a new one entered.

Ordering respondent Consolidated Broadcasting System, Inc. (Bombo RadyoPhilippines), DYWB to reinstate the complainants without loss of seniority rights wi[th] full backwages computed from February 1999 up to the time of actual reinstatement.


Hence, petitioner filed the instant recourse.

The issues for resolution are as follows: (1) Did respondents violate the rule on forum shopping; (2) whetherthe NLRC correctly ruled on the merits of the case instead of remanding the case to the Labor Arbiter; (3) whetherrespondents were employees of petitioner; and (4) whether their dismissal was il legal.

Respondents complaint in the inspection case before the DOLE Regional Director alleged that they were under theemploy of petitioner at the time of the filing of said complaint. Pending the resolution thereof, they claimed to have beendismissed; hence, the filing of the present illegal dismissal case before the Labor Arbiter. The causes of action in thesetwo complaints are different, i.e., one for violation of labor standard laws, and the other, for illegal dismissal, but theentitlement of respondents to the reliefs prayed for hinges on the same issue of the existence of an employer-employeerelationship. While the decision on the said issue by one tribunal may operate as res judicataon the other, dismissal of

the present illegal dismissal case on the ground of forum shopping, would work injustice to respondents because it is thelaw itself which provides for two separate remedies for their distinct causes of action.

Under Article 217[if ! supportFootnotes][9][endif]

of the Labor Code, termination cases fall under the jurisdiction of LaborArbiters. Whereas, Article 128

[if ! supportFootnotes][10][endif]of the same Code vests the Secretary of Labor or his duly authorized

representatives with the power to inspect the employers records to determine and compel compliance with labor standardlaws. The exercise of the said power by the Secretary or his duly authorized representatives is exclusive to cases whereemployer-employee relationship still exists. Thus, in cases where the complaint for violation of labor standard lawspreceded the termination of the employee and the filing of the illegal dismissal case, it would not be in consonance with

justice to charge the complainants with engaging in forum shopping when the remedy available to them at the time theircauses of action arose was to file separate cases before different fora. Besides, in the instant case, respondent DannyOberio disclosed in the verification the pendency of the case regarding wage differential.

[if ! supportFootnotes][11][endif] In addition,


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said case was discussed in detail in the position paper,[if ! supportFootnotes][12][endif]

evincing the absence of any intention on thepart of respondents to mislead the Labor Arbiter.

Similarly, inBenguet Management Corporation v. Court of Appeals,[if ! supportFootnotes][13][endif]

petitioner filed separateactions to enjoin the foreclosure of real estate mortgages before the Regional Trial Courts of San Pablo City andZambales which has jurisdiction over the place where the properties were located. In both cases, petitioner contended,among others, that the loan secured by said mortgages imposed unauthorized penalties, interest and charges. The Courtdid not find the mortgagors guilty of forum shopping considering that since injunction is enforceable only within the

territorial limits of the trial court, the mortgagor is left without remedy as to the properties located outside the jurisdiction ofthe issuing court, unless an application for injunction is made with another court which has jurisdiction over the latterproperties.

By parity of reasoning, it would be unfair to hold respondents in the instant case guilty of forum shopping becausethe recourse available to them after their termination, but pending resolution of the inspection case before the DOLE, wasto file a case for illegal dismissal before the Labor Arbiter who has jurisdiction over termination disputes.

More importantly, substantial justice dictates that this case be resolved on the merits considering that the NLRCand the Court of Appeals correctly found that there existed an employer-employee relationship between petitioner andrespondents and that the latters dismissal was illegal, as will be discussed hereunder.

In the same vein, the NLRC correctly ruled on the merits instead of remanding the case to the LaborArbiter. Respondents specifically raised the issue of the existence of employer-employee relationship but petitionerrefused to submit evidence to disprove such relationship on the erroneous contention that to do so would constitute awaiver of the right to question the jurisdiction of the NLRC to resolve the case on the merits.

[if !supportFootnotes][14][endif] This is

rather odd because it was the stand of petitioner in the inspection case before the DOLE that the case should be certified

to the NLRC for the resolution of the issue of employer-employee relationship. But when the same issue was profferedbefore the NLRC, it refused to present evidence and instead sought the dismissal of the case invoking the pendency ofthe inspection case before the DOLE. Petitioner refused to meet head on the substantial aspect of this controversy andresorted to technicalities to delay its disposition. It must be stressed that labor tribunals are not bound by technical rulesand the Court would sustain the expedient disposition of cases so long as the parties are not denied due process.

[if

!supportFootnotes][15][endif] The rule is that, due process is not violated where a person is given the opportunity to be heard, but

chooses not to give his or her side of the case.[if ! supportFootnotes][16][endif]

Significantly, petitioner never claimed that it wasdenied due process. Indeed, no such denial exists because it had all the opportunities to present evidence before thelabor tribunals below, the Court of Appeals, and even before this Court, but chose not to do so for reasons which will notwarrant the sacrifice of substantial justice over technicalities.

On the third issue, respondents employment with petitioner passed the four-fold test on employer-employeerelations, namely: (1) the selection and engagement of the employee, or the power to hire; (2) the payment of wages; (3)the power to dismiss; and (4) the power to control the employee.

Petitioner failed to controvert with substantial evidence the allegation of respondents that they were hired bythe former on various dates from 1974 to 1997. If petitioner did not hire respondents and if it was the director alone whochose the talents, petitioner could have easily shown, being in possession of the records, a contract to sucheffect. However, petitioner merely relied on its contention that respondents were piece rate contractors who were paid byresults.

[if !supportFootnotes][17][endif] Note that under Policy Instruction No. 40, petitioner is obliged to execute the necessary

contract specifying the nature of the work to be performed, rates of pay, and the programs in which they willwork. Moreover, project or contractual employees are required to be apprised of the project they will undertake under awritten contract. This was not complied with by the petitioner, justifying the reasonable conclusion that no such contractsexist and that respondents were in fact regular employees.

InABS-CBN v. Marquez,[if ! supportFootnotes][18][endif]

the Court held that the failure of the employer to produce the contractmandated by Policy Instruction No. 40 is indicative that the so called talents or project workers are in reality, regularemployees. Thus

Policy Instruction No. 40 pertinently provides:

Program employees are those whose skills, talents orservices are engaged by the station for a particular or specificprogram or undertaking and who are not required to observenormal working hours such that on some days they work for less
http://127.0.0.1:7861/source/Decisions.zip%3e713b,df%7CDecisions/2002/sep2002/126857.htmhttp://127.0.0.1:7861/source/Decisions.zip%3e713b,df%7CDecisions/2002/sep2002/126857.htmhttp://127.0.0.1:7861/source/Decisions.zip%3e713b,df%7CDecisions/2002/sep2002/126857.htm


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than eight (8) hours and on other days beyond the normal workhours observed by station employees and are allowed to enter intoemployment contracts with other persons, stations, advertisingagencies or sponsoring companies. The engagement of programemployees, including those hired by advertising or sponsoringcompanies, shall be under a written contract specifying, amongother things, the nature of the work to be performed, rates ofpay, and the programs in which they will work. The contract

shall be duly registered by the station with the BroadcastMedia Council within three days from its consummation.(Emphasis supplied)

Ironically, however, petitioner failed to adduce an iota proof that the requirementsfor program employment were even complied with by it. It is basic that project or contractualemployees are appraised of the project they will work under a written contract, specifying, interalia, the nature of work to be performed and the rates of pay and the program in which they willwork. Sadly, however, no such written contract was ever presented by the petitioner. Petitioneris in the best of position to present these documents. And because none was presented, wehave every reason to surmise that no such written contract was ever accomplished by theparties, thereby belying petitioners posture.

Worse, there was no showing of compliance with the requirement that after everyengagement or production of a particular television series, the required reports were filed withthe proper government agency, as provided no less under the very Policy Instruction invokedby the petitioner, nor under the Omnibus Implementing Rules of the Labor Code for projectemployees. This alone bolsters respondents contention that they were indeed petitionersregular employees since their employment was not only for a particular program.

Moreover, the engagement of respondents for a period ranging from 2 to 25 years and the fact that theirdrama programs were aired not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanaoareas, undoubtedly show that their work is necessary and indispensable to the usual business or trade of petitioner. Thetest to determine whether employment is regular or not is the reasonable connection between the particular activityperformed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been


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performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deemsthe repeated and continuing need for i ts performance as sufficient evidence of the necessity, if not indispensability of thatactivity to the business. Thus, even assuming that respondents were initially hired as project/contractual employees whowere paid per drama or per project/contract, the engagement of their services for 2 to 25 years justify their classificationas regular employees, their services being deemed indispensable to the business of petitioner.

[if !supportFootnotes][19][endif]

As to the payment of wages, it was petitioner who paid the same as shown by the payroll bearing the nameof petitioner company in the heading with the respective salaries of respondents opposite their names. Anent the power

of control, dismissal, and imposition of disciplinary measures, which are indicative of an employer-employee relationship,

[if

!supportFootnotes][20][endif] the same were duly proven by the following: (1) memorandum

[if !supportFootnotes][21][endif] duly noted by

Wilfredo Alejaga, petitioners station manager, calling the attention of the Drama Department to the late submission ofscripts by writers and the tardiness and absences of directors and talents, as well as the imposable fines of P100 to P200for future infractions; (2) the memorandum

[if !supportFootnotes][22][endif] of the station manager directing respondent Oberio to

explain why no disciplinary action should be taken against him for punching the time card of a certain Mrs. Fe Oberio whowas not physically present in their office; and (3) the station managers memorandum

[if !supportFootnotes][23][endif]suspending

respondent Oberio for six days for the said infraction which constituted violation of petitioners network policy. All these,taken together, unmistakably show the existence of an employer-employee relationship. Not only did petitioner possessthe power of control over their work but also the power to discipline them through the imposition of fines and suspensionfor violation of company rules and policies.

Finally, we find that respondents were illegally dismissed. In labor cases, the employer has the burden of provingthat the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal was unjustified and,therefore, illegal. To allow an employer to dismiss an employee based on mere allegations and generalities would placethe employee at the mercy of his employer; and the right to security of tenure, which this Court is bound to protect, wouldbe unduly emasculated.

[if !supportFootnotes][24][endif] In this case, petitioner merely contended that it was respondents who ceased

to report to work, and never presented any substantial evidence to support said allegation. Petitioner therefore failed todischarge its burden, hence, respondents were correctly declared to have been illegally dismissed.

Furthermore, if doubts exist between the evidence presented by the employer and the employee, the scalesof justice must be tilted in favor of the latter the employer must affirmatively show rationally adequate evidence that thedismissal was for a justifiable cause. It is a time-honored rule that in controversies between a laborer and his master,doubts reasonably arising from the evidence should be resolved in the formers favor. The policy is to extend the doctrineto a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowedpolicy of the State to give maximum aid and protection of labor.


When a person is illegally dismissed, he is entitled to reinstatement without loss of seniority rights and otherprivileges and to his full backwages. In the event, however, that reinstatement is no longer feasible, or if the employeedecides not to be reinstated, the employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewiseobserved in the case of a strained employer-employee relationship or when the work or position formerly held by thedismissed employee no longer exists. In sum, an illegally dismissed employee is entitled to: (1) either reinstatement ifviable or separation pay if reinstatement is no longer viable, and (2) backwages. In the instant controversy, reinstatementis no longer viable considering the strained relations between petitioner and respondents. As admitted by the latter, thecomplaint filed before the DOLE strained their relations with petitioner who eventually dismissed them fromservice. Payment of separation pay instead of reinstatement would thus better promote the interest of both parties.

Respondents separation pay should be computed based on their respective one (1) month pay, or one-half(1/2) month pay for every year of service, whichever is higher, reckoned from their first day of employment up to finality ofthis decision. Full backwages, on the other hand, should be computed from the date of their dismissal until the finality ofthis decision.


WHEREFORE, the petition is DENIED. The July 30, 2004 Decision of the Court of Appeals in CA-G.R. SP No.77098, finding respondents to be regular employees of petitioner and holding them to be illegally dismissed and directingpetitioner to pay full backwages, is AFFIRMEDwith the MODIFICATIONthat petitioner is ordered to pay respondentstheir separation pay instead of effecting their reinstatement.

Lakas ng Industriya ng Kapatirang Haligi ng Alyansa-Pinagbuklod ng Manggagawang Promo ngBurlingame v. Burlingame CorporationG.R. No. 162833. June 15, 2007.

Facts:Petitioner filed a petition for certification election before the DOLE. Petitioner sought to represent allrank-and-file employees of respondent, since it claims that there was no existing union representing therank-and-file promo employees. Petitioner prays that it be recognized by the respondent to be thecollective bargaining agent, or in the alternative, that a certification/consent election be held among saidregular rank-and-file promo employees. Respondent filed a MTD, arguing that there exists no employer-employee relationship between it and the petitioners members, and in fact, petitioners members areactually employees of F. Garil Manpower Services (F.Garil), a duly licensed local employment agency.To prove this, respondent presented a copy of its contract for manpower services with F. Garil.Med-Arbiter Parungo dismissed the petition for lack of employer-employee relationship. On appeal, theSec. of Labor ordered the immediate conduct of a certification election. Respondent filed an MR whichwas denied, so it appealed with the CA, which reversed the decision of the Sec. of Labor.


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Issue/s:Whether F. Garil is an independent contractor or a labor-only contractorHeld/Ratio:F. Garil is not an independent contractor, based on the criteria set out inDelos Santos vs. NLRC:

Job contracting is permissible only if the following conditions are met:

1) the contractor carries on an independent business and undertakes the contract work on his ownaccount under his own responsibility according to his own manner and method, free from thecontrol and direction of his employer or principal in all matters connected with the performanceof the work except as to the results thereof; and2) the contractor has substantial capital or investment in the form of tools, equipment,machineries, work premises, and other materials which are necessary in the conduct of thebusiness.

According to Sec. 5 of DOLE Dept. Order No. 18-02 s. 2002:Section 5.Prohibition against labor-only contracting.

Labor-only contracting is hereby declaredprohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or

subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal,and any of the following elements are [is] present:

i) The contractor or sub-contractor does not have substantial capital or investment whichrelates to the job, work or service to be performed and the employees recruited, supplied orplaced by such contractor or subcontractor are performing activities which are directly related to

the main business of the principal; orii) The contractor does not exercise the right to control over the performance of the work ofthe contractual employee.The foregoing provisions shall be without prejudice to the application of Article 248(C) of the LaborCode, as amended.Substantial capital or investment refers to capital stocks and subscribed capitalization in the case ofcorporations, tools, equipment, implements, machineries and work premises, actually and directly used bythe contractor or subcontractor in the performance or completion of the job, work or service contractedout The right to control shall refer to the right reserved to the person for whom the services of thecontractual workers are performed, to determine not only the end to be achieved, but also the manner andmeans to be used in reaching that end.First, F. Garil does not have substantial capitalization or investment in the form of tools, equipment,machineries, work premises, and other materials, to qualify as an independent contractor. No proof wasadduced toshow F. Garils capitalization.Second, the work of the promo-girls was directly related to the principal business or operation ofBurlingame. Marketing and selling of products is an essential activity to the main business of theprincipal.

Lastly, F. Garil did not carry on an independent business or undertake the performance of its servicecontract according to its own manner and method, free from the control and supervision of its principal,Burlingame.The four-fold testwill show that respondent is the employer of petitioners members. The elements todetermine the existence of an employment relationship are: (a) the selection and engagement of theemployee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control

the employees conduct. The most important element is the employers control of the employeesconduct, not only as to the result of the work to be done, but also as to the means and methods toaccomplish it.The contractual stipulations between Burlingame and F. Garil show the following:

Theactual hiring itself was done through the deployment of personnel to establishments byBurlingame.o

The involvement of F. Garil in the hiring process was only with respect to the recruitment


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aspect, i.e. the screening, testing and pre-selection of the personnel it provided toBurlingame.

F. Garil merely served as conduit in the payment of wagesto the deployed personnel.

o

Burlingame would pay the workers through F. Garil, stipulating that Burlingame shallpay F. Garil a certain sum per worker on the basis of eight-hour work every 15th and 30th

of each calendar month.

Burlingame

exercised control and supervisionover workers supplied by F. Garil.o

The contract also provides that any personnel found to be inefficient, troublesome,uncooperative and not observing the rules and regulations set forth by Burlingame shallbe reported to F. Garil and

may be replaced upon request.

o

Also implied in the provision on replacement of personnel carried upon request byBurlingame is the power to fire personnel.F. Garil was not left alone in the supervision and control of its alleged employees. It can be concludedthat F. Garil was not an independent contractor since it did not carry a distinct business free from thecontrol and supervision of Burlingame. Therefore, the contractual stipulation on the nonexistence of anemployer-employee relationship between Burlingame and the personnel provided by F. Garil hasno legaleffect.F. Garil was engaged in labor-only contracting, and as such, is considered merely an agent of Burlingame.In labor-only contracting, the law creates an employer-employee relationship to prevent a circumventionof labor laws. The contractor is considered merely an agent of the principal employer and the latter isresponsible to the employees of the labor-only contractor as if such employees had been directly mployed by the principalemployer.

Since F. Garil is a labor-only contractor, the workers it suppliedshould be considered as employees of Burlingame in the eyes of the law.The decision of the Sec. of Labor ordering the holding of a certification election is reinstated.

Far East vs. LebatiqueAbandonmentService Incentive LeaveField Personnel

In March 1996, Lebatique was hired as a driver by FAR EAST AGRICULTURAL SUPPLY, INC. with a daily wage ofP223.50. His job as a driver includes the delivery of animal feeds to the clients of the company. He must report either inthe morning or in the afternoon to make the deliveries.On January 24, 2000, Lebatique was suspended by Manuel Uy (brother of FEASIs General Manager Alexander Uy) forallegedly using the company vehicle illegally.On the same day, Lebatique filed a complaint for nonpayment of overtime pay against Alexander Uy.Uy summoned Lebatique and asked why he was claiming overtime pay. Lebatique said since he started working with thecompany he has never been paid OT pay. Uy consulted with his brother. On January 29, 2000, Uy told Lebatique to lookfor another job.Lebatique then filed an Illegal Dismissal case against the company.

The Labor Arbiter ruled in favor of Lebatique. Uy was ordered to reinstate Lebatique and at the same time to payLebatique his 13th month pay, back wages (time when case was pending), service incentive leave pay and OT payallamounting to P196,659.72.Uy argued that Lebatique was not dismissed and that he was merely suspended; that he abandoned his job; and thatLebatique was a field personnel not entitled to overtime pay and service incentive leave.ISSUE: Whether or not Lebatique is a field personnel.HELD: No. Lebatique is a regular employee.Uy illegally dismissed Lebatique when he told him to look for another job. Judging at the sequence of event, Lebatiqueearned the ire of Uy when he filed a complaint for nonpayment of OT pay on the day Lebatique was suspended by ManuelUy. Such is not a valid reason for dismissing Lebatique.Uy cannot therefore claim that he merely suspended Lebatique.Further, Lebatique did not abandon his job. His filing of this case is proof enough that he had no intention to abandon his


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job.To constitute abandonment as a just cause for dismissal, there must be:(a) absence without justifiable reason; and(b) a clear intention, as manifested by some overt act, to sever the employer-employee relationship.None of the above was proven by Uy.

Also, Lebatique is not a field personnel as defined above for the following reasons:(1) company drivers, including Lebatique, are directed to deliver the goods at a specified time and place;(2) they are not given the discretion to solicit, select and contact prospective clients; and

(3) Far East issued a directive that company drivers should stay at the clients premises during truck-ban hours which isfrom 5:00 to 9:00 a.m. and 5:00 to 9:00 p.m.As a regular employee, Lebatique is entitled to service incentive leave and OT pay.The Supreme Court affirmed the Labor Arbiters decision but remanded the case for properly computing Lebatiques OTpay taking in to consideration the companys time keeping records.

Field Personnel DefinedField personnel are those who regularly perform their duties away from the principal place of business of the employerand whose actual hours of work in the field cannot be determined with reasonable certainty.

PNOC-EDC v NLRC

Facts:

Danilo Mercado, an employee of the Philippine National Oil Company- Energy Development Corporation, was dismissedon the grounds of serious acts of dishonesty and violation of company rules and regulations allegedly committed asfollows:

1. Withdrew P1680.00 from company funds, appropriated P680.00 for personal use and paid the nipa supplier P1000.00.2. Withdrew P28.66 as payment for the fabrication of rubber stamp but appropriated the P8.66 for personal use.3. Absence without leave and without proper turn-over thus disrupting and delaying company work activities.4. Vacation leave without prior leave.

Mercado filed a complaint against PNOC-EDC before the NLRC Regional Arbitration Branch. After considerations ofposition papers presented by both parties, the labor arbiter ruled in favour of Mercado.

Issues:

1. Whether or not matters of employment of PNOC-EDC is within the jurisdiction of the labor arbiter and the NLRC.

2. Whether or not the labor arbiter and the NLRC are justified in ordering the reinstatement of the private respondent,payment of his savings, 13th month pay, and payment of damages as well as attorneys fees.

Held:

The High Court affirmed the resolution of the respondent NLRC with modification: reducing moral damages to P10000and exemplary damages to P5000.

1. The test whether a government-owned or controlled corporation is subject to Civil Service Law is the manner of itscreation. Those created by special charter are subject to its provision while those created under General Corporation Laware not within its coverage. The PNOC-EDC, having been incorporated under General Corporation Law, is subject to theprovisions of the Labor Law.

2. PNOC-EDCs accusations are not supported by evidence. Loss of trust or breach of confidence is a valid ground fordismissing an employee, but such loss or breach must have some basis.

LABOR LAW: Four-Fold Test to Determine the Existence of an Employer-Employee RelationshipTongko v. Manufacturers LIfe Insurance Co. (Phils.), Inc.(570 SCRA 503)

FACTS:The contractual relationship between Tongko and Manulife had two basic phases. The first phase began on July 1, 1977,under a Career

Agents Agreement, which provided that the Agent is an independent contractor and nothing contained herein shall beconstrued or interpreted ascreating an employer-employee relationship between the Company and the Agent.The second phase started in 1983 when Tongko was named Unit Manager in Manulifes Sales Agency Organization. In1990, he became aBranch Manager. In 1996), Tongko became a Regional Sales Manager. Tongkos gross earnings consisted ofcommissions, persistency income, andmanagement overrides. Since the beginning, Tongko consistently declared himself self-employed in his income taxreturns. Under oath, he declared his


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gross business income and deducted his business expenses to arrive at his taxable business income.Respondent Renato Vergel de Dios, sales manager, wrote Tongko a letter dated November 6, 2001 on concerns thatwere brought up duringthe Metro North Sales Managers Meeting, expressing dissatisfaction of Tongkos performance in their agent recruitingbusiness, which resulted in somechanges on how Tongko would conduct his duties, including that Tongko hire at his expense a competent assistant tounload him of routine tasks, whichhe had been complaining to be too taxing for him.

On December 18, 2001, de Dios wrote Tongko another letter which served as notice of termination of his AgencyAgreement with the companyeffective fifteen days from the date of the letter. Tongko filed an illegal dismissal complaint with the National LaborRelations Commission (NLRC),alleging that despite the clear terms of the letter terminating his Agency Agreement, that he was Manulifes employeebefore he was illegally dismissed.Thelabor arbiterdecreed that no employer-employee relationship existed between the parties.TheNLRCreversed the labor arbiters decision on appeal; it found the existence of an employer-employee relationship andconcluded thatTongko had been illegally dismissed.TheCourt of Appealsfound that the NLRC gravely abused its discretion in its ruling and reverted to the labor arbiters decision that no

employer-employee relationship existed between Tongko and Manulife.ISSUE:Is there an employer-employee relationship between Tongko and Manulife?.HELD:NO. In the determination of whether an employer-employee relationship exists between 2 parties, this court applies thefour-fold test todetermine the existence of the elements of such relationship. Jurisprudence is firmly settled that whenever the existenceof an employment relationshipis in dispute, four elements constitute the reliable yardstick: (a) the selection and engagement of the employee; (b) thepayment of wages; (c) the powerof dismissal; and (d) the employers power tocontrolthe employees conduct. IT is the so-called control test which constitutes the most important indexof existence of the employer-employee relationship that is, whether the employer controls or has reserved the right tocontrol the employee not only asto the result of the work to be done but also as to the means and methods by which the same is to be accomplished.Stated otherwise, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not onlythe end to be achieved butalso the means to be used in reaching such end. In the case at bar, the absence of evidence showing Manulifes controlover Tongkos contractualduties points to the absence of any employer-employee relationship between Tongko and Manulife. In the context of theestablished evidence, Tongkoremained an agent all along; although his subsequent duties made him a lead agent with leadership role, he wasnevertheless only an agent whosebasic contract yields no evidence of means-and-manner control. Claimant clearly failed to substantiate his claim ofemployment relationship by thequantum of evidence the Labor Code requires.Tongkos failure to comply with the guidelines of de Dios letter, as a ground for termination of Tongkos agency, is amatter that the labortribunals cannot rule upon in the absence of an employer-employee relationship. Jurisdiction over the matter belongs to

the courts applying the laws ofinsurance, agency and contracts.Dispositive:We REVERSE our Decision of November 7, 2008, GRANT Manulifes motion for reconsideration and, accordingly,DISMISSTongkos petition

Orozco vs. CAEmployee-employer Relationship in a PublicationBond Requirement When Employer Appeals in a Labor Case

Orozco was hired as a writer by the Philippine Daily Inquirer in 1990. She was the columnist of Feminist Reflectionsunder the Lifestyle section of the publication. She writes on a weekly basis and on a per article basis (P250-300/article).


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In 1991, Magsanoc as the editor-in-chief sought to improve the Lifestyle section of the paper. She said there were toomany Lifestyle writers and that it was time to reduce the number of writers. Orozcos column was eventually dropped. Orozco filed for a case for Illegal Dismissal against PDI and Magsanoc. Orozco won in the Labor Arbiter. The LA ruledthat there exists an employer-employee relationship between PDI and Orozco hence Orozco is entitled to receivebackwages, reinstatement, and 13th month pay.PDI appealed to the National Labor Relations Commission. The NLRC denied the appeal because of the failure of PDI topost a surety bond as required by Article 223 of the Labor Code. The Court of Appeals reversed the NLRC.ISSUE: Whether or not there exists an employer-employee relationship between PDI and Orozco. Whether or not PDIs

appeal will prosper.HELD: Under Article 223 of the Labor Code:ART. 223. Appeal.Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to theCommission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders.In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting ofa cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amountequivalent to the monetary award in the judgment appealed from.The requirement that the employer post a cash or surety bond to perfect its/his appeal is apparently intended to assurethe workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of theemployers appeal. It was intended to discourage employers from using an appeal to delay, or even evade, their obligationto satisfy their employees just and lawful claims.But in this case, this principle is relaxed by the Supreme Court considering the fact that the Labor Arbiter, in ruling that theOrozco is entitled to backwages, did not provide any computation.The case is then remanded to the Labor Arbiter for the computation. This necessarily pended the resolution of the otherissue of whether or not there exists an employer-employee relationship between PDI and Orozco.

Olongapo maintenance vs. Chantengco

NACHURA, J.:

This Petition for Review on Certiorariassails the July 29, 2002 Decision[if !supportFootnotes][1][endif]

of the Court of Appealsand its Resolution

[if ! supportFootnotes][2][endif]dated November 14, 2002 in CA-G.R. SP No. 67474, which, respectively, denied the

petition for certiorariand the motion for reconsideration filed by Olongapo Maintenance Services, Inc. (OMSI).

OMSI is a corporation engaged in the business of providing janitorial and maintenance services to various clients,including government-owned and controlled corporations. On various dates beginning 1986, OMSI hired the respondentsas janitors, grass cutters, and degreasers, and assigned them at the Ninoy Aquino International Airport (NAIA). OnJanuary 14, 1999, OMSI terminated respondents' employment.

Claiming termination without just cause and non-payment of labor standard benefits, respondents filed a complaintfor illegal dismissal, underpayment of wages, and non-payment of holiday and service incentive leave pays, with prayerfor payment of separation pay, against OMSI.

For its part, OMSI denied the allegations in the complaint. It averred that when Manila International AirportAuthority (MIAA) awarded to OMSI the service contracts for the airport, OMSI hired respondents as janitors, cleaners, anddegreasers to do the services under the contracts. OMSI informed the respondents that they were hired for the MIAAproject and their employments were coterminous with the contracts. As project employees, they were not dismissed fromwork but their employments ceased when the MIAA contracts were not renewed upon their expiration. The termination ofrespondents employment cannot, thus, be considered illegal.

In a Decision[if !supportFootnotes][3][endif]

dated November 19, 1999, the Labor Arbiter dismissed the complaint, viz.:WHEREFORE, premises considered, judgment is hereby rendered DISMISSING for lack of merit the claims forseparation pay, wage differentials and holiday pay except that respondent is hereby ordered to pay the seventy one (71)complainants listed in pages three and four of the latters position paper their service incentive leave pay.


On appeal by the respondents, the NLRC modified the Labor Arbiters ruling. It held that respondents were regularand not project employees. Hence, they are entitled to separation pay:

WHEREFORE, the decision appealed from is hereby modified by granting in addition to the grant of service


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incentive leave pay, payment of separation pay equivalent to half-month pay per [every] year of service or one month pay,whichever is higher.


OMSI sought reconsideration of the ruling, but the NLRC denied the motion on July 30, 2001.

Petitioner went up to the Court of Appeals via a petition for certiorari, imputing grave abuse of discretion to theNLRC for reversing the factual findings and the decision of the Labor Arbiter. However, the Court of Appeals dismissedthe petition. The appellate court agreed with the NLRC that the continuous rehiring of respondents, who performedtasks necessary and desirable in the usual business of OMSI, was a clear indication that they were regular, not projectemployees. The court added that OMSI failed to establish that respondents employment had been fixed for a specificproject or undertaking, the completion or termination of which had been determined at the time of their engagement or

hiring. Neither had it shown that respondents were informed of the duration and scope of their work when they werehired. Furthermore, OMSI did not submit to the Department of Labor and Employment (DOLE) reports of termination ofthe respondents, thereby bolstering res

labstan cases2

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