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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

INSULAR LIFE V NLRC (BASIAO) 179 SCRA 459 NARVASA; November 15, 1989

DEAN ANTONIO
account of . . . (explicitly specified causes) . . . - in April 1972, the parties entered into another contract - an Agency Manager's Contract, while Basiao concurrently fulfilled his commitments under the first contract with the Company. - In May 1979, the Company terminated the Agency Manager's Contract. After vainly seeking a reconsideration, Basiao sued the Company in a civil action and this (he claimed) prompted the latter to terminate also his engagement under the first contract and to stop payment of his commissions starting April 1, 1980. - Basiao filed w/ the Ministry of Labor a complaint against the Company and its president. The complaint sought to recover commissions allegedly unpaid, plus attorney's fees. The respondents claim: Ministry had no jurisdiction over Basiao's claim, asserting that he was not the Company's employee, but an independent contractor and that the Company had no obligation to him for unpaid commissions under the terms and conditions of his contract. - The Labor Arbiter found for Basiao. He ruled that the underwriting agreement had established an employer-employee relationship between him and the Company, and this conferred jurisdiction on the Ministry of Labor to adjudicate his claim. Said official's decision directed payment of his unpaid commissions ". . . equivalent to the balance of the first year's premium remaining unpaid, at the time of his termination, of all the insurance policies solicited by . . . (him) in favor of the respondent company . . ." plus 10% attorney's fees. - This decision was, on appeal by the Company, affirmed by the NLRC. ISSUE WON Basiao had become the Company's employee by virtue of the contract invoked by him, thereby placing his claim for unpaid commissions within the original and exclusive jurisdiction of the Labor Arbiter under the provisions of Section 217 of the Labor Code HELD NO - Basiao was not an employee of the petitioner, but a commission agent, an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. The Labor Arbiter erred in taking cognizance of, and adjudicating, said claim, being without jurisdiction to do so, as did the respondent NLRC in affirming the Arbiter's decision. This conclusion renders it unnecessary and premature to consider Basiao's claim for commissions on its merits.

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Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employeremployee relationship between him and the company. NATURE Petition for certiorari and prohibition to review the resolution of the NLRC. FACTS - In 1968, Insular Life Assurance Co., Ltd. (Company) and Melecio T. Basiao entered into a contract by w/c Basiao was "authorized to solicit w/in the Phils applications for insurance policies and annuities in accordance with the existing rules and regulations" of the Company; he would receive "compensation, in the form of commissions . . . ", and the "rules in Rate Book and its Agent's Manual, as well as all its circulars and those which may from time to time be promulgated by it . . ." were made part of said contract. - The contract also contained provisions governing the relations of the parties, the duties of the Agent, the acts prohibited to him, and the modes of termination of the agreement, viz.: "RELATION WITH THE COMPANY. The Agent shall be free to exercise his own judgment as to time, place and means of soliciting insurance. Nothing herein contained shall therefore be construed to create the relationship of employee and employer between the Agent and the Company. However, the Agent shall observe and conform to all rules and regulations which the Company may from time to time prescribe. "TERMINATION. The Company may terminate the contract at will, without any previous notice to the Agent, for or on

LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO
was not an employee but an independent contractor. - Investment Planning Corporation of the Philippines v SSS: there was no employeremployee relationship between a commission agent and an investment company, but that the former was an independent contractor where said agent and others similarly placed were: (a) paid compensation in the form of commissions based on percentages of their sales, any balance of commissions earned being payable to their legal representatives in the event of death or registration; (b) required to put up performance bonds; (c) subject to a set of rules and regulations governing the performance of their duties under the agreement with the company and termination of their services for certain causes; (d) not required to report for work at any time, nor to devote their time exclusively to working for the company nor to submit a record of their activities, and who, finally, shouldered their own selling and transportation expenses. - Sara v NLRC: one who had been engaged by a rice miller to buy and sell rice and palay without compensation except a certain percentage of what he was able to buy or sell, did work at his own pleasure without any supervision or control on the part of his principal and relied on his own resources in the performance of his work, was a plain commission agent, an independent contractor and not an employee. JARDIN V NLRC (PHILJAMA INTL) 326 SCRA 299 QUISUMBING; February 23, 2000 Four-fold test for employer-employee relations: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control the employees conduct. NLRC found that the boundary system is a leasehold system which takes it out of the ordinary notion of control over employees conduct. The SC iterated its ruling that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employeremployee and not of lessor-lessee NATURE Special civil action for certiorari seeks to annul the decision of public respondent promulgated on October 28, 1994, in NLRC NCR CA No. 003883-92, and its resolution

-Control test" (Viana vs. Alejo Al-Lagadan, 1956): "In determining the existence of employeremployee relationship, the following elements are generally considered, namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees' conduct although the latter is the most important element (35 Am. Jur. 445). . . ," - However, not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employer-employee relationship between them in the legal or technical sense of the term. - Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it. - Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. Of such a character are the rules which prescribe the qualifications of persons who may be insured, subject insurance applications to processing and approval by the Company, and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. None of these really invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an employeremployee relationship between him and the company. - Mafinco Trading Corporation v Ople: a person engaged to sell soft drinks for another, using a truck supplied by the latter, but with the right to employ his own workers, sell according to his own methods subject only to prearranged routes, observing no working hours fixed by the other party and obliged to secure his own licenses and defray his own selling expenses, all in consideration of a peddler's discount given by the other party for at least 250 cases of soft drinks sold daily,

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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO
Ratio Only one motion for reconsideration from the same party is allowed before the NLRC in line with the policy of assisting the parties in obtaining an expeditious and inexpensive settlement of labor cases. When the NLRC entertained the second motion for reconsideration, it therefore committed grave abuse of discretion. Reasoning - The phrase "grave abuse of discretion amounting to lack or excess of jurisdiction" has settled meaning in the jurisprudence of procedure. It means such capricious and whimsical exercise of judgment by the tribunal exercising judicial or quasi-judicial power as to amount to lack of power. - In this case before us, private respondent exhausted administrative remedy available to it by seeking reconsideration of public respondents decision dated April 28, 1994, which public respondent denied. With this motion for reconsideration, the labor tribunal had ample opportunity to rectify errors or mistakes it may have committed before resort to courts of justice can be had. Thus, when private respondent filed a second motion for reconsideration, public respondent should have forthwith denied it in accordance with Rule 7, Section 14 of its New Rules of Procedure which allows only one motion for reconsideration from the same party, thus: "SEC. 14. Motions for Reconsideration. --Motions for reconsideration of any order, resolution or decision of the Commission shall not be entertained except when based on palpable or patent errors, provided that the motion is under oath and filed within ten (10) calendar days from receipt of the order, resolution or decision with proof of service that a copy of the same has been furnished within the reglementary period the adverse party and provided further, that only one such motion from the same party shall be entertained." [Emphasis supplied] - The rationale for allowing only one motion for reconsideration from the same party is to assist the parties in obtaining an expeditious and inexpensive settlement of labor cases For obvious reasons, delays cannot be countenanced in the resolution of labor disputes. The dispute may involve no less than the livelihood of an employee and that of his loved ones who are dependent upon him for food, shelter, clothing, medicine, and education. It may as well involve the survival of a business or an industry. - As correctly pointed out by petitioner, the second motion for reconsideration filed by private respondent is indubitably a prohibited pleading which should have not been entertained at all. Public respondent cannot just disregard its own rules on the pretext of "satisfying the ends of justice", especially

dated December 13, 1994 which denied petitioners motion for reconsideration. FACTS - Petitioners were drivers of private respondent, Philjama International Inc., a domestic corporation engaged in the operation of "Goodman Taxi." Petitioners used to drive private respondents taxicabs every other day on a 24-hour work schedule under the boundary system. Under this arrangement, the petitioners earned an average of P400.00 daily. Nevertheless, private respondent admittedly regularly deducts from petitioners daily earnings the amount of P30.00 supposedly for the washing of the taxi units. Believing that the deduction is illegal, petitioners decided to form a labor union to protect their rights and interests. - Upon learning about the plan of petitioners, private respondent refused to let petitioners drive their taxicabs when they reported for work on August 6, 1991, and on succeeding days. Petitioners suspected that they were singled out because they were the leaders and active members of the proposed union. Aggrieved, petitioners filed with the labor arbiter a complaint against private respondent for unfair labor practice, illegal dismissal and illegal deduction of washing fees. In a decision dated August 31, 1992, the labor arbiter dismissed said complaint for lack of merit. - On appeal, the NLRC (public respondent herein), in a decision dated April 28, 1994, reversed and set aside the judgment of the labor arbiter. The labor tribunal declared that petitioners are employees of private respondent, and, as such, their dismissal must be for just cause and after due process. - Private respondents first motion for reconsideration was denied. Remaining hopeful, private respondent filed another motion for reconsideration. This time, public respondent, in its decision dated October 28, 1994, granted aforesaid second motion for reconsideration. It ruled that it lacks jurisdiction over the case as petitioners and private respondent have no employeremployee relationship. It held that the relationship of the parties is leasehold which is covered by the Civil Code rather than the Labor Code. ISSUE WON the NLRC committed grave abuse of discretion in entertaining the motion for reconsideration and in holding that there is no employer-employee relationship in the boundary system. HELD YES

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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO
them notice and hearing prior to termination. In the instant case, private respondent had no valid cause to terminate the employment of petitioners. Neither were there two (2) written notices sent by private respondent informing each of the petitioners that they had been dismissed from work. These lack of valid cause and failure on the part of private respondent to comply with the twin-notice requirement underscored the illegality surrounding petitioners dismissal. - Under the law, an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement It must be emphasized, though, that recent judicial pronouncements distinguish between employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed after that date are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. The legislative policy behind Republic Act No. 6715 points to "full backwages" as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. Considering that petitioners were terminated from work on August 1, 1991, they are entitled to full backwages on the basis of their last daily earnings. SAN MIGUEL V MAERC INTEGRATED SERVICES 405 SCRA 579 BELLOSILLO; July 10, 2003 In deciding the question of control, the language of the contract is not determinative of the parties' relationship; rather, it is the totality of the facts and surrounding circumstances of each case. On the other hand, in labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the laboronly contractor as if such employees had been directly employed by the principal

when its disposition of a legal controversy ran afoul with a clear and long standing jurisprudence in this jurisdiction as elucidated in the subsequent discussion. Clearly, disregarding a settled legal doctrine enunciated by this Court is not a way of rectifying an error or mistake. In our view, public respondent gravely abused its discretion in taking cognizance and granting private respondents second motion for reconsideration as it wrecks the orderly procedure in seeking reliefs in labor cases. Obiter - There is another compelling reason why we cannot leave untouched the flip-flopping decisions of the public respondent. As mentioned earlier, its October 28, 1994 judgment is not in accord with the applicable decisions of this Court. The labor tribunal reasoned out as follows: - Four-fold test for employer-employee relations: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power of control the employees conduct. - NLRC found that the boundary system is a leasehold system which takes it out of the ordinary notion of control over employees conduct. - The SC iterated its ruling that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. - The SC explained that in the lease of chattels, the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter. The management of the business is in the owners hands. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. - As consistently held by this Court, termination of employment must be effected in accordance with law. The just and authorized causes for termination of employment are enumerated under Articles 282, 283 and 284 of the Labor Code. The requirement of notice and hearing is set-out in Article 277 (b) of the said Code. Hence, petitioners, being employees of private respondent, can be dismissed only for just and authorized cause, and after affording

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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO
complainants' separation benefits in the total amount of P2,334,150.00. MAERC and SMC were also ordered to jointly and severally pay complainants their wage differentials in the amount of P845,117.00 and to pay attorney's fees in the amount of P317,926.70. - The National Labor Relations Commission (NLRC) ruled that MAERC was a labor-only contractor and that complainants were employees of SMC. The NLRC also held that whether MAERC was a job contractor or a labor-only contractor, SMC was still solidarily liable with MAERC for the latter's unpaid obligations, citing Art. 109 4 of the Labor Code. Thus, the NLRC modified the judgment of the Labor Arbiter and held SMC jointly and severally liable with MAERC for complainants' separation benefits. In addition, both respondents were ordered to pay jointly and severally an indemnity fee of P2,000.00 to each complainant. - SMC filed petition for certiorari ISSUE WON the complainants are employees of petitioner SMC or of respondent MAERC HELD Employees of SMC - In ascertaining an employer-employee relationship, the following factors are considered: (a) the selection and engagement of employee; (b) the payment of wages; (c) the power of dismissal; and, (d) the power to control an employee's conduct, the last being the most important. Application of the aforesaid criteria clearly indicates an employer-employee relationship between petitioner and the complainants. - Evidence discloses that petitioner played a large and indispensable part in the hiring of MAERC's workers. It also appears that majority of the complainants had already been working for SMC long before the signing of the service contract between SMC and MAERC. - The incorporators of MAERC admitted having supplied and recruited workers for SMC even before MAERC was created. The NLRC also found that when MAERC was organized into a corporation, the complainants who were then already working for SMC were made to go through the motion of applying for work with Ms. Olga Ouano, President and General Manager of MAERC, upon the instruction of SMC through its supervisors to make it appear that complainants were hired by MAERC. This was testified to by two (2) of the workers who were segregator and forklift operator assigned to the Beer Marketing Division at the SMC compound and who had been working with SMC under a purported contractor Jopard Services since March 1979 and March 1981, respectively. Both witnesses also testified that

employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees. FACTS - TWO HUNDRED NINETY-ONE (291) workers filed their complaints (nine [9] complaints in all) against San Miguel Corporation (petitioner herein) and Maerc Integrated Services, Inc. (respondent herein), for illegal dismissal, underpayment of wages, non-payment of service incentive leave pays and other labor standards benefits, and for separation pays from 25 June to 24 October 1991. The complainants alleged that they were hired by San Miguel Corporation (SMC) through its agent or intermediary Maerc Integrated Services, Inc. (MAERC) to work in two (2) designated workplaces in Mandaue City: one, inside the SMC premises at the Mandaue Container Services, and another, in the Philphos Warehouse owned by MAERC. They washed and segregated various kinds of empty bottles used by SMC to sell and distribute its beer beverages to the consuming public. They were paid on a per piece or pakiao basis except for a few who worked as checkers and were paid on daily wage basis. Complainants alleged that long before SMC contracted the services of MAERC a majority of them had already been working for SMC under the guise of being employees of another contractor, Jopard Services, until the services of the latter were terminated on 31 January 1988. SMC informed MAERC of the termination of their service contract by the end of June 1991. SMC cited its plans to phase out its segregation activities starting 1 June 1991 due to the installation of labor and costsaving devices. When the service contract was terminated, complainants claimed that SMC stopped them from performing their jobs; that this was tantamount to their being illegally dismissed by SMC who was their real employer as their activities were directly related, necessary and desirable to the main business of SMC; and, that MAERC was merely made a tool or a shield by SMC to avoid its liability under the Labor Code - MAERC for its part admitted that it recruited the complainants and placed them in the bottle segregation project of SMC but maintained that it was only conveniently used by SMC as an intermediary in operating the project or work directly related to the primary business concern of the latter with the end in view of avoiding its obligations and responsibilities towards the complaining workers. -The Labor Arbiter rendered a decision holding that MAERC was an independent contractor. He dismissed the complaints for illegal dismissal but ordered MAERC to pay

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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO
minutes of the meeting held by the SMC officers on 5 December 1988. Among those matters discussed were the calling of SMC contractors to have workers assigned to segregation to undergo and pass eye examination to be done by SMC EENT company doctor and a review of compensation/incentive system for segregators to improve the segregation activities. - But the most telling evidence is a letter by Mr. Antonio Ouano, Vice-President of MAERC dated 27 May 1991 addressed to Francisco Eizmendi, SMC President and Chief Executive Officer, asking the latter to reconsider the phasing out of SMC's segregation activities in Mandaue City. The letter was not denied but in fact used by SMC to advance its own arguments. Briefly, the letter exposed the actual state of affairs under which MAERC was formed and engaged to handle the segregation project of SMC. It provided an account of how in 1987 Eizmendi approached the would-be incorporators of MAERC and offered them the business of servicing the SMC bottle-washing and segregation department in order to avert an impending labor strike. After initial reservations, MAERC incorporators accepted the offer and before long trial segregation was conducted by SMC at the PHILPHOS warehouse. - In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees' wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees. - On the other hand, in labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees. - This distinction between job contractor and labor-only contractor, however, will not discharge SMC from paying the separation benefits of the workers, inasmuch as MAERC was shown to be a labor-only contractor; in which case, petitioner's liability is that of a direct employer and thus solidarily liable with MAERC. - SMC also failed to comply with the requirement of written notice to both the

together with other complainants they continued working for SMC without break from Jopard Services to MAERC. - As for the payment of workers' wages, it is conceded that MAERC was paid in lump sum but records suggest that the remuneration was not computed merely according to the result or the volume of work performed. The memoranda of the labor rates bearing the signature of a Vice-President and General Manager for the Vismin Beer Operations as well as a director of SMC appended to the contract of service reveal that SMC assumed the responsibility of paying for the mandated overtime, holiday and rest day pays of the MAERC workers. SMC also paid the employer's share of the SSS and Medicare contributions, the 13th month pay, incentive leave pay and maternity benefits. In the lump sum received, MAERC earned a marginal amount representing the contractor's share. These lend credence to the complaining workers' assertion that while MAERC paid the wages of the complainants, it merely acted as an agent of SMC. - Petitioner insists that the most significant determinant of an employer-employee relationship, i.e., the right to control, is absent. The contract of services between MAERC and SMC provided that MAERC was an independent contractor and that the workers hired by it "shall not, in any manner and under any circumstances, be considered employees of the Company, and that the Company has no control or supervision whatsoever over the conduct of the Contractor or any of its workers in respect to how they accomplish their work or perform the Contractor's obligations under the Contract." - In deciding the question of control, the language of the contract is not determinative of the parties' relationship; rather, it is the totality of the facts and surrounding circumstances of each case. - Despite SMCs disclaimer, there are indicia that it actively supervised the complainants. SMC maintained a constant presence in the workplace through its own checkers. Its asseveration that the checkers were there only to check the end result was belied by the testimony of Carlito R. Singson, head of the Mandaue Container Service of SMC, that the checkers were also tasked to report on the identity of the workers whose performance or quality of work was not according to the rules and standards set by SMC. According to Singson, "it (was) necessary to identify the names of those concerned so that the management [referring to MAERC] could call the attention to make these people improve the quality of work." - Other instances attesting to SMC's supervision of the workers are found in the

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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO
- After the elections, UKCEU-PTGWO won over KILUSAN-OLALIA by 20 votes. This count considered the votes of the 64 employees as separate. - In a case regarding the status of the 64 employees in relation to the certification election, it was held by med-arbiter Sanchez that: 2)The other casual employees not performing janitorial and yard maintenance services were deemed labor-only contractuals and since labor-only contracting is prohibited, such employees were held to have attained the status of regular employees, the regularization being effective as of the date of the decision; 3. UKCEU-PTGWO, having garnered more votes than KILUSAN-OLALIA, was certified as the exclusive bargaining representative of KlMBERLY's employees; - Since the members were only considered regular at the time of the decision, their votes were not re-considered as regards the election. - winning union and company executed a CBA - KIMBERLY-OLALIA filed for a TRO on the CBA and included the question of the status of the 64 members in question. ISSUE WON the 64 employees were regular employees at the time of the certification election HELD YES - A280LC provides for two kinds of regular employees: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed - The individual petitioners herein who have been adjudged to be regular employees (by law) fall under the second category. These are the mechanics, electricians, machinists, machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and masons. It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the time of the filing of the petition for certification election by KILUSANOLALIA. - While the actual regularization of these employees entails the mechanical act of issuing regular appointment papers and compliance with such other operating procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual

employees concerned and the Department of Labor and Employment (DOLE) which must be given at least one (1) month before the intended date of retrenchment. The fines imposed for violations of the notice requirement have varied. The measure of this award depends on the facts of each case and the gravity of the omission committed by the employer. For its failure, petitioner was justly ordered to indemnify each displaced worker P2,000.00. Disposition Petition is DENIED. KIMBERLY INDEPENDENT LABOR UNION V DRILON 185 SCRA 190 REGALADO; May 9, 1990 FACTS - Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three-year collective bargaining agreement (CBA) with United Kimberly-Clark Employees Union-Philippine Transport and General Workers' Organization (UKCEUPTGWO) which expired on June 30, 1986. - Within the 60-day freedom period prior to the expiration of and during the negotiations for the renewal of the aforementioned CBA, some members of the bargaining unit formed another union called "Kimberly Independent Labor Union for Solidarity, Activism and Nationalism-Organized Labor Association in Line Industries and Agriculture (KILUSANOLALIA) - April 21, 1986, KILUSAN-OLALIA filed a petition for certification election. KIMBERLY and UKCEU-PTGWO did not object to the holding of a certification election but objected to the inclusion of the so-called contractual workers whose employment with KIMBERLY was coursed through an independent contractor, Rank Manpower Company (RANK, for short), as among the qualified voters. - On June 2, 1986, Med-Arbiter Bonifacio I. Marasigan, who was handling the certification election case issued an order declaring the following as eligible to vote in the certification election, thus: 1) regular rank-and-file laborers/employees of the respondent company; 2) casuals who have worked at least six (6) months; 3) Contractual employees who are allegedly in the employ of an independent contractor and who have also worked for at least six (6) months - During the pre-election conference, 64 casual workers were challenged by KIMBERLY and UKCEU-PTGWO on the ground that they are not employees of KIMBERLY but of RANK. It was agreed by all the parties that the 64 voters shall be allowed to cast their votes but that their ballots shall be segregated and subject to challenge proceedings.

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LABOR STANDARDS CASE DIGEST I ABAD Hizon, King James Carlo C.

DEAN ANTONIO IA

worker on the day immediately after the end of his first year of service - The law is explicit. As long as the employee has rendered at least one year of service, he becomes a regular employee with respect to the activity in which he is employed. The law does not provide the qualification that the employee must first be issued a regular appointment or must first be formally declared as such before he can acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn. - On the basis of the foregoing circumstances, and as a consequence of their status as regular employees, those workers not perforce janitorial and yard maintenance service were performance entitled to the payment of salary differential, cost of living allowance, 13th month pay, and such ther benefits extended to regular employees under the CBA, from the day immediately following their first year of service in the company. -These regular employees are likewise entitled to vote in the certification election held in July 1, 1986. Consequently, the votes cast by those employees not performing janitorial and yard maintenance service, which forms part of the 64 challenged votes, should be opened, counted and considered for the purpose of determining the certified bargaining representative. One Year Service: Kimberly v Drilon [1990] Those who have rendered at least one year of service, whether continuous or broken are deemed regular with respect to the activity in which they are employed. While the actual regularization of these employees entails the mechanical act of issuing regular appointment paper and compliance with such other operating procedures as may be adopted by the employer, it is more in keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual worker on the day immediately after the end of his first yr of service.