G.R. No.

162401

January 31, 2006

CORAZON ALMIREZ, Petitioner,

vs.
INFINITE LOOP TECHNOLOGY CORPORATION, EDWIN R. RABINO and COURT OF APPEALS, Respondents.
Corazon Almirez (petitioner) was hired as a Refinery Senior Process Design Engineer for a specific project by respondent Infinite
Loop Technology Corporation (Infinite Loop) through its General Manager/President-co-respondent Edwin R. Rabino (Rabino)
who, by letter1 dated September 30, 1999 to petitioner, furnished the details of the employment of her services as follows:
Subject: Acceptance of Professional Services
Refinery Senior Process Design Engineer
Dear Ms. Almirez
This is to confirm acceptance of your services as per attached Terms and Conditions. Your services will commence effective
October 18, 1999 up to the completion of the scope of services and continuation thereof with a guaranty of 12 continuous
months as outlined in the attachment or until a mutually agreed date.
We thank you for considering our company as a valued partner in the advancement of Petroleum Processing Technology in our
country.
x x x x (Emphasis and underscoring supplied)
As indicated in the above-quoted portion of Rabinos letter, the terms and conditions attendant to the acceptance of petitioners
"Professional Services"2 were attached to it reading:
Scope of Professional Services
The Senior Process Design Engineer shall work together with the Process Design Consultant in performing the scope of services
below which includes but are not limited to the following:
1. Prepare the Process Design Terms of Reference or Basis of Design and other data required for the proposed 1,200,000
BPSD Petroleum Refinery. These data are to be used in securing the services of a Basic Design Engineering Company
as well as part of Project Accomplishment of Infinite Loop Technology Corp.
2. Review and revise/improve as necessary the existing conceptual process block diagram or Process Flow Scheme of
the proposed petroleum refinery. Various capacity combinations are to be considered to develop process design modules
of 1,200,000 BPSD total capacity.
3. Implement new process technologies that can meet the requirements of Japanese, Australian and US petroleum
product standard by the year 2004. As well as the Philippine Clean Air Act provisions applicable to the proposed
1,200,000 BPSD petroleum refinery. Petroleum Product Standards required shall be researched and be part of the Basis
of Design or Term of Reference.
4. Participate in discussions during the solicitation of proposals from Basic Design Engineering Companies.
5. Review the progress of work being done by the Basic Design Engineering Company and coordinate with the company
management team for an efficient and effective project implementation.
6. Make reports and recommendations to the company management team regarding work progress, revisions and
improvement of process design on a regular basis as required by company management team.
7. Represent the Company in technical meetings to be held locally or abroad.
8. Perform other related works that are necessary in completing the Engineering Procurement and Construction (EPC) bid
documents and progress reports relevant to schedules of deliveries to the Project Proponent as required by the company.
9. Continue related works when the construction stage of this Proposed Refinery will push through.
10. Serve as technical consultant to Infinite Loop Technology Corp. on other relevant works or projects when required.
x x x x (Emphasis in the original; underscoring supplied)
Terms of Payments
Professional Fee: US$ 2,000.00 per month (net of tax)
To be paid 50/50 split in US Dollars or

equivalent Peso every 15th and 30th of the month

Length of Service: Guaranteed minimum of 12 continuous months
or up to completion of services, or until a
mutually agreed date.
Reimbursable Expenses:
Work related expenses which include but not
limited to the following:
- Communication Expenses (Cellular
phone, fax, tels)
- Representation Expenses
- Out of town travel expenses
Other Benefits:
- US$ 300.00 per month as transportation
allowance (Engineer to use her
personal car in the performance of
work) to be paid in equivalent pesos
every end of the month.
- Project Bonus at the end of the contract
to be mutually agreed upon by both parties.
Others:
Infinite Loop Technology Corporation to provide
the ff:
- Laptop Computer (Pentium III or best
available model with modems etc.)
- Printer/ Scanner
- Process Simulation Softwares to be identified later (Emphasis in the original; underscoring supplied)
The letter, as well as the attached documents, bore the signature of petitioner and Rabino.
For her services, petitioner received the following amounts on the dates indicated: 3

Voucher date

Amount

11/23/99

Salary for Nov. 1-15, 1999

P20,000.00

12/02/99

Salary for Nov. 15-30, 1999

8,000.00

12/15/99

Full payment for Nov. 15-30 salary

2,000.00

Salary for Dec. 1-15, 1999

10,000.00

1/17/00

Salary for Jan. 1-15, 2000

12,000.00

1/16/00

Salary for Jan. 16-31, 2000

12,500.00

1/20/00

Salary for Jan. 1-15, 2000

12,500.00

---------------

Total

P77,000.00

By letter4 dated February 2, 2000, petitioner conveyed to Infinite Loop through Rabino her disappointment with the "salary" she
was receiving in this wise:
x x x When I agreed with a salary of P30,000.00 monthly, my understanding is that, this amount is already net of tax x x x.
However, when I received my salary for the month of January which is only partial, (P25,000) and even less because [of] SSS and
tax deductions x x x
I understand that tax should be deducted from my salary for your Accounting records but I would like to ask you not to deduct it
from the P30,000.00 salary I am supposed to be receiving. Currently I am paying my SSS contributions voluntarily so there is no
need for the company to pay my monthly contributions.
I would like to render my service at Infinite Loop based on the contract that I signed and I am willing to serve as technical
consultant to Infinite Loop on other relevant works or projects while we are waiting for the Masbate refinery project.
x x x x (Emphasis and underscoring supplied)
Responding,5 Rabino stated that petitioners letter "was totally different [from] what [they] verbally agreed [upon]" in her house;
that "like any other proposed project, [the Proposed 1,200,000 BPSD Petroleum Refinery] can be deferred like its present status;"
and that since "the financial side for the engineering design for the proposed [project] is not yet available x x x it would be prudent
to SUSPEND her professional services as Senior Process Design Engineer effective February 7, 2000." Rabino assured petitioner
that her professional services would be resumed once they are provided with the initial payment requested from the project
proponent.
By letter6 dated August 9, 2000, petitioner, through counsel, wrote Rabino "to compensate [her with] the total amount of her
contract," thus:
Our client MS. CORAZON S. ALMIREZ has referred to us for appropriate legal action concerning her contract with your company
as a refinery process design engineer.
In the said contract, which was accepted by our said client on September 30, 1999, you stated that our clients services "will
commence effective October 18, 1999 up to the completion of the scope of the services and continuation thereof with a guaranty
of 12 continuous months as outlined in the attachment or until a mutually agreed date". However, despite your guarantee of at
least 12 continuous months of service, you suspended her professional services effective February 7, 2000. The same is a clear
violation of the terms and conditions of the contract. Moreover, you have paid her only a total amount of SEVENTY FOUR
THOUSAND TWO HUNDRED TWENTY NINE & 17/100 PESOS (P74,229.17), which is way below than the agreed professional
fee of US $2,000.00 a month net of tax. On account of your blatant violation of the terms and conditions of the contract, our client
suffered sleepless nights, anxiety and besmirched reputation. She was constrained to resign from her job as an engineer at the
Technoserve International Co., Inc., in view of her contract with your company.
In view thereof, formal demand is hereby made on you to compensate our client the total amount of her contract or the amount of
US DOLLARS: twenty thousand ($ 20,000.00), MORE OR LESS, within five (5) days from your receipt hereof, failing which we
shall, much to our regret, be constrained to file the necessary action in court.
Rabino later wrote petitioner, by letter of November 15, 2000, 7 as follows:

Thank you for reminding us about our agreement about this possible landmark project. You all know that Infinite Loop Tech. Corp.
is the lead company in this undertaking in association with other companies forming a consortium to cope up with the huge
financial and technical requirement of this project. We all have invested a lot of group resources for this, but unfortunately the
Project Proponent, Arrox Resources Corp., have encountered re-organization and have not yet paid us for this project.
At the moment, the former Chairman of Arrox Resources Corp. is still in contact with us. We all hope that this project will push thru
after our country would overcome all the peace and order, economic and political crisis we are encountering now.
We all hope that you would bear with us. We would inform you soonest once any development from the project proponent would
be relayed to us.
On December 12, 2000, petitioner filed a complaint against Infinite Loop and Rabino before the National Labor Relations
Commission (NLRC) for "breach of contract of employment," praying that judgment be rendered in her favor ordering Infinite Loop
to pay:
(1) $22,000.00 or its peso equivalent representing salaries and wages;
(2) P300,000.00 as and for moral damages;
(3) P100,000.00 as and for exemplary damages; and
(4) 10% of the total claim as and for attorneys fees.
Infinite Loop moved to dismiss8 petitioners complaint on the ground that the NLRC has no jurisdiction over the parties and the
subject matter, there being no employee-employer relationship between them as the contract they entered into was one of
services and not of employment.
By Resolution of November 14, 2001, the Labor Arbiter, finding that paragraph No. 6 of the Scope of Professional Services of
petitioner showed that "the companys management team exercises control over the means and methods in the performance of
[petitioners] duties as Refinery Process Design Engineer," held that there existed an employer-employee relationship between the
parties.
The Labor Arbiter thus ordered Infinite Loop and Rabino to jointly and severally pay petitioner the sum of US$ 24,000.00 in its
peso equivalent at the date of payment less advances in the amount of P77,000.00 plus 5% thereof by way of attorneys fees. It
dismissed petitioners claim for damages, however.9
Infinite Loop and Rabino (hereafter respondents) appealed to the NLRC. By Resolution 10 dated September 19, 2002, the NLRC,
finding that employer-employee relation between the parties indeed existed, dismissed respondents appeal.
Before the Court of Appeals to which respondents elevated the case, they argued that the NLRC:
I.
x x x ABUSED ITS DISCRETION AMOUNTING TO LACK OF JURISDICTION AND ERRED IN NOT FINDING THAT THE LABOR
ARBITER HAS NO JURISDICTION OVER THE CAUSES OF ACTION PLEADED IN THE COMPLAINT, I.E., NON PAYMENT OF
PROFESSIONAL FEE AND BREACH OF CONTRACT.
II.
x x x COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION AND COMMITTED
REVERSIBLE ERROR IN NOT FINDING THAT [PETITIONER] IS NOT AN EMPLOYEE OF [INFINITE LOOP].
III.
x x x SERIOUSLY ERRED IN NOT FINDING THE ENVISIONED ENGAGEMENT OF [PETITIONER] AS A REFINERY PROCESS
ENGINEER IS CO-TERMINOUS WITH THE PROJECT, WHICH PROJECT DID NOT MATERIALIZE.11 (Underscoring supplied)
The appellate court, finding that "[petitioner] was hired to render professional services for a specific project" and her "primary
cause of action is for a sum of money on account of [Infinite Loops] alleged breach of contractual obligation to pay her agreed
professional fee," held by Decision12 dated October 20, 2003 that no employer-employee relationship existed between the parties,
hence, the NLRC and the Labor Arbiter have no jurisdiction over the complaint. It accordingly reversed the NLRC decision and
dismissed petitioners complaint.
Hence, the present petition, petitioner contending that the appellate court erred when it:
A.
x x x INCONSISTENTLY RULED THAT THERE WAS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PARTIES
BUT AT THE SAME TIME IT CITED THAT [PETITIONER] IS A PROJECT EMPLOYEE. MOREOVER, THE ASSAILED
JUDGMENT IS BASED ON MISAPPRECIATION OF FACTS.
B.

x x x FAILED TO CONSIDER THE RELIEF MENTIONED IN [PETITIONERS] COMPLAINT FOR PAYMENT OF SALARY x x x
C.
x x x RULED THAT THE SEPARATION FROM SERVICE OF [PETITIONER] BECAUSE OF THE PROJECTS
DISCONTINUANCE DID NOT RESULT TO ILLEGAL DISMISSAL.13
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the four-fold test, to wit: (1)
the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal; and
(4) the presence or absence of the power of control. Of these four, the last one, the so called "control test" is commonly regarded
as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. 14
Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves
the right to control not only the end achieved, but also the manner and means to be used in reaching that end.15
From the earlier-quoted scope of petitioners professional services, there is no showing of a power of control over petitioner. The
services to be performed by her specified what she needed to achieve but not on how she was to go about it.
Contrary to the finding of the Labor Arbiter, as affirmed by the NLRC, above-quoted paragraph No. 6 of the "Scope of [petitioners]
Professional Services" requiring her to "[m]ake reports and recommendations to the company management team regarding work
progress, revisions and improvement of process design on a regular basis as required by company management team" does not
"show that the companys management team exercises control over the means and methods in the performance of her duties as
Refinery Process Design Engineer." Having hired petitioners professional services on account of her "expertise and qualifications"
as petitioner herself proffers in her Position Paper,16 the company naturally expected to be updated regularly of her "work
progress," if any, on the project for which she was specifically hired.
In bolstering her contention that there was an employer-employee relationship, petitioner draws attention to the pay slips and
Infinite Loops deduction of her SSS, Philhealth, and withholding tax, and to the designation of the payments to her as "salaries."
The deduction from petitioners remuneration of amounts representing SSS premiums, Philhealth contributions and withholding
tax, was made in the only payslip issued to petitioner, that for the period of January 16-31, 2000, 17 the other amounts of
remuneration having been documented by cash vouchers. Such payslip cannot prove the existence of an employer-employee
relationship between the parties.
The cases of Equitable Banking Corp. v. NLRC18 and Nagusara v. NLRC19 should be differentiated from the present case, as the
employers in these two cases did not only regularly make similar deductions from the therein complainants remuneration but also
registered and declared the complainants with the SSS and Medicare (Philhealth) as their employees.
As for the designation of the payments to petitioner as "salaries," it is not determinative of the existence of an employer-employee
relationship. "Salary" is a general term defined as "a remuneration for services given." It is the above-quoted contract of
engagement of services-letter dated September 30, 1999, together with its attachments, which is the law between the parties.
Even petitioner concedes rendering service "based on the contract," 20 which, as reflected earlier, is bereft of a showing of power of
control, the most crucial and determinative indicator of the presence of an employer-employee relationship.
Lapanday Agricultural Devt. Corp vs. CA
Dispute Settlement (Jurisdiction; Procedure)
LAPANDAY AGRICULTURAL DEVT. CORP. vs. CA
G.R. No. 112139, January 31, 2000
GONZAGA-REYES, J.
FACTS:This is a petition for review on Certiorari of the decision of the CA which affirmed the decision of RTC on the caseentitled
Commando Security Service Agency vs. Lapanday Dev. Corp.On June 1986, plaintiff Commando Security Service Agency, Inc.,
and defendant Lapanday AgriculturalDevelopment Corporation entered into a Guard Service Contract. Plaintiff provided security
guards in defendant'sbanana plantation.On June 16, 1984, Wage Order No. 5 was promulgated directing an increase of P3.00 per
day on the minimumwage of workers in the private sector and a P5.00 increase on the ECOLA. This was followed on November
1,1984 by Wage Order No. 6 which further increased said minimum wage by P3.00 on the ECOLA.Plaintiff demanded that its
Guard Service Contract with defendant be upgraded in compliance with Wage OrderNos. 5 and 6. Defendant refused. Their
Contract expired on June 6, 1986 without the rate adjustment called forWage Order Nos. 5 and 6 being implemented. Defendant
opposed the Complaint by raising the followingdefenses: (1) the rate adjustment is the obligation of the plaintiff as employer of the
security guards; (2) assumingits liability, the sum it should pay is less in amount; and (3) the Wage Orders violate the impairment
clause of theConstitution.RTC decided in favor of the plaintiff. Petitioner filed a motion for reconsideration which was denied.
ISSUE:
1. Whether or not the money claims fall under the jurisdiction of NLRC.
2. Whether or not the petitioner is liable to the for the wage adjustment provided under Wage Order No. 5and 6.
HELD:

1. RTC has jurisdiction over the subject matter of the present case. It is well settled in the law
and jurisprudence that where no employer-employee relationship exists between the parties and no issueinvolved which may be
resolved by reference to the Labor Code, other labor statutes or any CBA, it is theRTC that has jurisdiction. In its complaint private
respondent is not seeking relief under the Labor Codebut seeks payment of sum of money and damages on account of breach of
obligation under their GuardService Agreement.
2. No, the petitioner is not liable. It is only when contractor pays the increases mandated that it can claim anadjustment from the
principal to cover the increases payable to the security guards. The liability of thepetitioner to reimburse the respondent only
arises if and when respondent actually pays its employees theincreases granted by wage orders.WHEREFORE, the petition is
GRANTED. The decision of the Court of Appeals dated May 24, 1993 isREVERSED and SET ASIDE. The complaint of private
respondent COMMANDO SECURITY SERVICE AGENCY, INC. is hereby DISMISSED

WILLIAM DAYAG, EDUARDO CORTON, EDGARDO CORTON, LEOPOLDO NAGMA, ALOY FLORES, ROMEO PUNAY and
EDWIN DAYAG, petitioners, vs.HON. POTENCIANO S. CANIZARES, JR., NATIONAL LABOR RELATIONS
COMMISSION and YOUNGS CONSTRUCTION CORPORATION, respondents.
DECISION
ROMERO, J.:
On March 11, 1993, petitioners William Dayag, Edwin Dayag, Eduardo Corton, Edgardo Corton, Leopoldo Nagma, Aloy
Flores, and Romeo Punay filed a complaint for illegal dismissal, non-payment of wages, overtime pay, premium pay, holiday pay,
service incentive leave, 13th month pay, and actual, moral and exemplary damages against Alfredo Young, a building contractor
doing business under the firm name Youngs Construction. They filed the complaint with the National Capital Region Arbitration
Branch of the NLRC which docketed the same as NLRC-NCR-Case No. 00-03-01891-93. The case was subsequently assigned to
Labor Arbiter Potenciano Canizares, Jr.
Petitioners alleged that they were hired in 1990 by Young to work as tower crane operators at the latters construction site at
Platinum 2000 in San Juan, Metro Manila. In November 1991, they were transferred to Cebu City to work at the construction of his
Shoemart Cebu project. Petitioners worked in Cebu until February 1993, except for Punay who stayed up to September 29, 1992
only and Nagma, until October 21, 1992.
On January 30, 1993, William Dayag asked for permission to go to Manila to attend to family matters. He was allowed to do
so but was not paid for the period January 23-30, 1993, allegedly due to his accountability for the loss of certain construction
tools. Eduardo Corton had earlier left on January 16, 1993, purportedly due to harassment by Young. In February 1993, Edgardo
Corton, Aloy Flores and Edwin Dayag also left Cebu for Manila, allegedly for the same reason. Thereafter, petitioners banded
together and filed the complaint previously mentioned.
Instead of attending the initial hearings set by the labor arbiter, Young filed, on July 6, 1993, a motion to transfer the case to
the Regional Arbitration Branch, Region VII of the NLRC. He claimed that the workplace where petitioners were regularly assigned
was in Cebu City and that, in consonance with Section 1(a) of Rule IV of the New Rules of Procedure of the NLRC, [1]the case
should have been filed in Cebu City. Young submitted in evidence a certificate of registration of business name showing his
companys address as Corner SudlonEspaa Streets, Pari-an, Cebu City; its business permit issued by the Office of the Mayor of
Cebu City and a certification by the Philippine National PoliceCebu City Police Station 2 that petitioners had been booked therein
for qualified theft upon the complaint of Youngs Construction.
Petitioners opposed the same, arguing that all of them, except for Punay, were, by that time, residents of Metro Manila and
that they could not afford trips to Cebu City. Besides, they claimed that respondent had its main office at Corinthian Gardens in
Quezon City. Young, in reply, declared that the Corinthian Gardens address was not his principal place of business, but actually
his residence, which he also used as a correspondent office for his construction firm.
Agreeing that petitioners workplace when the cause of action accrued was Cebu City, the labor arbiter, on September 8,
1993, granted Youngs motion and ordered the transmittal of the case to the regional arbitration branch of Region VII. Petitioners
promptly appealed said order to the NLRC, which, however, dismissed the same on January 31, 1995, for lack of merit.
Citing Nestl Philippines, Inc. vs. NLRC[2] and Cruzvale, Inc. vs. Laguesma,[3] petitioners moved for a reconsideration of the
January 31, 1995 resolution of the Commission. Acting favorably on said motion, the Commission, on August 25, 1995, annulled
and set aside its resolution of January 31, 1995, and remanded the case to the original arbitration branch of the National Capital
Region for further proceedings. This prompted Young, in turn, to file his own motion for reconsideration seeking the reversal of the
August 25, 1995 resolution of the Commission. Finding the two above-cited cases to be inapplicable to instant case, the
Commission made a volte-face and reconsidered its August 25, 1995 resolution. It reinstated the resolution of January 31, 1995,
directing the transfer of the case to Cebu City. In addition, it ruled that no further motion of a similar nature would be
entertained. Hence, the recourse to this Court by petitioners, who raise the following as errors:
1. THE LABOR ARBITER A QUO ERRED IN ISSUING THE DISPUTED ORDER DATED SEPTEMBER 8, 1993 WHEN,
OBVIOUSLY, THE SAID MOTION TO TRANSFER VENUE WAS FILED IN VIOLATION OF SECTIONS 4 AND 5 OF
RULE 15 OF THE REVISED RULES OF COURT.
2. PUBLIC RESPONDENTS ERRED IN ISSUING THE DISPUTED JUDGMENT WHEN, OBVIOUSLY, THE RESPONDENT,
BY FILING ITS POSITION PAPER, HAS WAIVED ITS RIGHT TO QUESTION THE VENUE OF THE INSTANT CASE.

3. THE PUBLIC RESPONDENTS ERRED IN CONCLUDING THAT THE WORKPLACE OF THE COMPLAINANTS IS AT
CEBU CITY AND IN DECLARING THAT THE PROPER VENUE IS AT CEBU CITY.
Petitioner contends that the labor arbiter acted with grave abuse of discretion when it entertained Youngs motion to transfer
venue since it did not specify the time and date when it would be heard by the labor arbiter. They raise the suppletory application
of the Rules of Court, specifically Sections 4 and 5 of Rule 15, [4] in relation to Section 3 of Rule I of the New Rules of Procedure of
the NLRC, in support of their contention.
We find no merit in petitioners argument. In a long line of decisions, [5] this Court has consistently ruled that the application of
technical rules of procedure in labor cases may be relaxed to serve the demands of substantial justice. As provided by Article 221
of the Labor Code rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of
this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due
process. Furthermore, while it is true that any motion that does not comply with the requirements of Rule 15 should not be
accepted for filing and, if filed, is not entitled to judicial cognizance, this Court has likewise held that where a rigid application of
the rule will result in a manifest failure or miscarriage of justice, technicalities may be disregarded in order to resolve the case.
Litigations should, as much as possible, be decided on the merits and not on technicalities. [6] Lastly, petitioners were able to file an
opposition to the motion to transfer venue which, undisputedly, was considered by the labor arbiter when he issued the disputed
order of September 8, 1993.There is, hence, no showing that petitioners have been unduly prejudiced by the motions failure to
give notice of hearing.
Given the foregoing, it seems improper to nullify Youngs motion on a mere technicality. Petitioners averments should be
given scant consideration to give way to the more substantial matter of equitably determining the rights and obligations of the
parties. It need not be emphasized that rules of procedure must be interpreted in a manner that will help secure and not defeat
justice.[7]
Likewise, petitioners harp on Youngs so-called waiver of his right to contest the venue of the instant case. They argue that
Young is estopped from questioning the venue herein as his motion to transfer venue was actually a position paper, a close
scrutiny of the same purportedly showing that he admitted and denied certain allegations found in petitioners complaint.
Petitioners contention rings hollow. Even if the questioned motion was at the same time a position paper, Section 1(c) of Rule
IV provides: (w)hen improper venue is not objected to before or at the time of the filing of position papers, such question shall be
deemed waived (Emphasis supplied). Consequently, there is no waiver of improper venue if a party questions venue
simultaneously with the filing of a position paper. Moreover, nowhere in the New Rules of Procedure of the NLRC is there a
requirement that a party must object solely to venue, on penalty of waiving the same. In fact, Section 1(d) provides that:
The venue of an action may be changed or transferred to a different Regional Arbitration Branch other than where the complaint
was filed by written agreement of the parties or when the Commission or Labor Arbiter before whom the case is pending so
orders, upon motion by the proper party in meritorious cases (Emphasis supplied).
Youngs acts are in consonance with this provision, for he seasonably made representations to transfer the venue of the
action in the proper motion.
Finally, while it is true that objections to venue are deemed waived if the respondent, through conduct, manifests satisfaction
with the venue until after the trial, or abides by it until the matter has proceeded to a hearing, [8] no waiver of the defense of venue
on the ground of estoppel by conduct can be attributed to Young, who consistently and persistently contested the same even
before trial.
Similarly, petitioners reliance on Nestl[9] and Cruzvale[10] is likewise misplaced. While Nestl ruled that Rule IV of the New
Rules of Procedure of the NLRC does not constitute a complete rule on venue in cases cognizable by labor arbiters, Section 2,
Rule 4 of the Rules of Court [11] having suppletory effect, it also held that the foregoing provision of the Rules of Court applies only
where the petitioners are labor unions or where a single act of an employer gives rise to a cause of action common to many of its
employees working in different branches or workplaces of the former. It is not denied that petitioners herein are not represented by
a union; nor were they assigned to different workplaces by Young. Likewise, Cruzvale is inapplicable to the case at bar, the issue
involved therein being the propriety of the DOLE Region IV Offices taking cognizance of a petition for certification election when
the companys place of business was in Cubao, Quezon City, while the workplace of the petitioning union was elsewhere. The
instant case does not involve any certification election; nor are the workplace of the employees and place of business of the
employer different.
Young cannot, however, derive comfort from the foregoing, this petition having been overtaken by events. In the recent case
of Sulpicio Lines, Inc. vs. NLRC [12] this Court held that the question of venue essentially pertains to the trial and relates more to the
convenience of the parties rather than upon the substance and merits of the case. It underscored the fact that the permissive rules
underlying provisions on venue are intended to assure convenience for the plaintiff and his witnesses and to promote the ends of
justice. With more reason does the principle find applicability in cases involving labor and management because of the doctrine
well-entrenched in our jurisdiction that the State shall afford full protection to labor. The Court held that Section 1(a), Rule IV of the
NLRC Rules of Procedure on Venue was merely permissive. In its words:
This provision is obviously permissive, for the said section uses the word may, allowing a different venue when the interests of
substantial justice demand a different one. In any case, as stated earlier, the Constitutional protection accorded to labor is a
paramount and compelling factor, provided the venue chosen is not altogether oppressive to the employer.

The rationale for the rule is obvious. The worker, being the economically-disadvantaged partywhether as complainant/petitioner or
as respondent, as the case may be, the nearest governmental machinery to settle the dispute must be placed at his immediate
disposal, and the other party is not to be given the choice of another competent agency sitting in another place as this will unduly
burden the former.[13] In fact, even in cases where venue has been stipulated by the parties, this Court has not hesitated to set
aside the same if it would lead to a situation so grossly inconvenient to one party as to virtually negate his claim. Again, in Sulpicio
Lines, this Court, citing Sweet Lines vs. Teves,[14] held that:
An agreement will not be held valid where it practically negates the action of the claimant, such as the private respondents herein.
The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his
witnesses and to promote the ends of justice. Considering the expense and trouble a passenger residing outside Cebu City would
incur to prosecute a claim in the City of Cebu, he would probably decide not to file the action at all. The condition will thus defeat,
instead of enhance, the ends of justice. Upon the other hand, petitioner had branches or offices in the respective ports of call of
the vessels and could afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was
done in the instant case will not cause inconvenience to, much less prejudice petitioner.
In the case at hand, the ruling specifying the National Capital Region Arbitration Branch as the venue of the present action
cannot be considered oppressive to Young. His residence in Corinthian Gardens also serves as his correspondent
office. Certainly, the filing of the suit in the National Capital Region Arbitration Branch in Manila will not cause him as much
inconvenience as it would the petitioners, who are now residents of Metro Manila, if the same was heard in Cebu. Hearing the
case in Manila would clearly expedite proceedings and bring about the speedy resolution of instant case.
WHEREFORE, premises considered, the resolution of February 12, 1996, of public respondent NLRC, transferring
the instant case to the Seventh Regional Arbitration Branch, Cebu City, is SET ASIDE. Instead, its resolution dated August 25,
1995, remanding the case to the Arbitration Branch of Origin, is hereby REINSTATED and AFFIRMED.

SAN MIGUEL CORPORATION, ANGEL G. ROA and MELINDA MACARAIG, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION (Second Division), LABOR ARBITER EDUARDO J. CARPIO, ILAW AT BUKLOD NG
MANGGAWA (IBM), ET AL., respondents.
DECISION
HERMOSISIMA, JR., J.:
In the herein petition for certiorari under Rule 65, petitioners question the jurisdiction of the Labor Arbiter to hear a complaint
for unfair labor practice, illegal dismissal, and damages, notwithstanding the provision for grievance and arbitration in the
Collective Bargaining Agreement.
Let us unfurl the facts.
Private respondents, employed by petitioner San Miguel Corporation (SMC) as mechanics, machinists, and carpenters, were
and still are, bona fide officers and members of private respondent Ilaw at Buklod ng Manggagawa.
On or about July 31, 1990, private respondents were served a Memorandum from petitioner Angel G. Roa, Vice-President
and Manager of SMCs Business Logistics Division (BLD), to the effect that they had to be seperated from the service effective
October 31, 1990 on the ground of redundancy or excesss personnel. Respondent union, in behalf of private respondents,
opposed the intended dismissal and asked for a dialogue with management.
Accordingly, a series of dialogues were held between petitioners and private respondents. Even before the conclusion of said
dialogues, the aforesaid petitioner Angel Roa issued another Memorandum on October 1, 1990 informing private respondents that
they would be dismissed from work effective as of the close of business hours on November 2, 1990. Private respondents were in
fact purged on the date aforesaid.
Thus, on February 25, 1991, private respondents filed a complaint against petitioners for Illegal Dismissal and Unfair Labor
Practices, with a prayer for damages and attorneys fees, with the Arbitration Branch of respondent National Labor Relations
Commission. The complaint[1] was assigned to Labor Arbiter Eduardo F. Carpio for hearing and proper disposition.
On April 15, 1991, petitioners filed a motion to dismiss the complaint, alleging that respondent Labor Arbiter had no
jurisdiction over the subject matter of the complaint, and that respondent Labor Arbiter must defer consideration of the unfair labor
practice complaint until after the parties have gone through the grievance procedure provided for in the existing Collective
Bargaining Agreement (CBA). Respondent Labor Arbiter denied this motion in a Resolution, dated September 23, 1991.
The petitioners appealed the denial to respondent Commission on November 8, 1991. Unimpressed by the grounds therefor,
respondent Commission dismissed the appeal in its assailed Resolution, dated August 11, 1992. Petitioners promptly filed a
Motion for Reconsideration which, however, was denied through the likewise assailed Resolution, dated October 29, 1992.
Hence, the instant petition for certiorari alleging the following grounds was filed by the petitioners:

I.
RESPONDENT LABOR ARBITER CANNOT EXERCISE JURISDICTION OVER THE ALLEGED ILLEGAL TERMINATION AND
ALLEGED ULP CASES WITHOUT PRIOR RESORT TO GRIEVANCE AND ARBITRATION PROVIDED UNDER THE CBA.
II
THE STRONG STATE POLICY ON THE PROMOTION OF VOLUNTARY MODES OF SETTLEMENT OF LABOR DISPUTES
CRAFTED IN THE CONSTITUTION AND THE LABOR CODE DICTATES THE SUBMISSION OF THE CBA DISPUTE TO
GRIEVANCE AND ARBITRATION.[2]
Petitioners posit the basic principle that a collective bargaining agreement is a contract between management and labor that
must bind and be enforced in the first instance as between the parties thereto. In this case, the CBA between the petitioners and
respondent union provides, under Section 1, Article V entitled ARBITRATION, that wages, hours of work, conditions of
employment and/or employer-employee relations shall be settled by arbitration. Petitioners thesis is that the dispute as to the
termination of the union members and the unfair labor practice should first be settled by arbitration, and not directly by the labor
arbiter, following the above provision of the CBA, which ought to be treated as the law between the parties thereto.
The argument is unmeritorious. The law in point is Article 217 (a) of the Labor Code. It is elementary that this law is deemed
written into the CBA. In fact, the law speaks in plain and unambiguous terms that termination disputes, together with unfair labor
practices, are matters falling under the original and exclusive jurisdiction of the Labor Arbiter, to wit:
Article 217. Jurisdiction of Labor Arbiters and the Commission - (a) Except as otherwise provided under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide x x x the following cases involving all workers, whether agricultural or nonagricultural:
(1) Unfair labor practice cases:
(2) Termination disputes;
The sole exception to the above rule can be found under Article 262 of the same Code, which provides:
Aricle 262. Jurisdiction over other labor disputes - The voluntary arbitrator or panel of voluntary arbitrators, upon agreement of the parties,
shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. (As added by R.A. 6715)
We subjected the records of this case, particularly the CBA, to meticulous scrutiny and we find no agreement between SMC and
the respondent union that would state in unequivocal language that petitioners and the respondent union conform to the
submission of termination disputes and unfair labor practices to voluntary arbitration. Section 1, Article V of the CBA, cited by the
herein petitioners, certainly does not provide so. Hence, consistent with the general rule under Article 217 (a) of the Labor Code,
the Labor Arbiter properly has jurisdiction over the complaint filed by the respondent union on February 25, 1991 for illegal
dismissal and unfair labor practice.
Petitioners point however to Section 2, Article III of the CBA, under the heading Job Security, to show that the dispute is a
proper subject of the grievance procedure, viz:
x x x The UNION, however, shall have the right to seek reconsideration of any discharge, lay-off or disciplinary action, and such requests for
reconsideration shall be considered a dispute or grievance to be dealt with in accordance with the procedure outlined in Article IV hereof [on
Grievance Machinery] x x x[3] (Emphasis ours)
Petitioners allege that respondent union requested management for a reconsideration and review of the companys decision to
terminate the employment of the union members. By this act, petitioners argue, respondent union recognized that the questioned
dismissal is a grievable dispute by virtue of Section 2, Article III of the CBA. This allegation was strongly denied by the respondent
union. In a Memorandum filed for the public respondent NLRC, the Solicitor General supported the position of the respondent
union that it did not seek reconsideration from the SMC management in regard to the dismissal of the employees.
Petitioners fail miserably to prove that, indeed, the respondent union requested for a reconsideration or review of the
management decision to dismiss the private respondents. A punctilious examination of the records indubitably reveals that at no
time did the respondent union exercise its right to seek reconsideration of the companys move to terminate the employment of the
union members, which request for reconsideration would have triggered the application of Section 2, Article III of the CBA, thus
resulting in the treatment of the dispute as a grievance to be dealt with in accordance with the Grievance Machinery laid down in
Article IV of, the CBA. Stated differently, the filing of a request. for reconsideration by the respondent union, which is the
condition sine qua non to categorize the termination dispute and the ULP complaint as a grievable dispute, was decidedly absent
in the case at bench.Hence, the respondent union acted well within their rights in filing their complaint for illegal dismissal and ULP
directly with the Labor Arbiter under Article 217 (a) of the Labor Code.
Second. Petitioners insist that involved in the controversy is the interpretation and implementation of the CBA which is
grievable and arbitrable by law under Article 217(c) of the Labor Code, viz:

ART. 217(c). Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements. (As amended by R.A. 6715).
Petitioners theorize that since respondents questioned the discharges, the main question for resolution is whether SMC had
the management right or prerogative to effect the discharges on the ground of redundancy, and this necessarily calls for the
interpretation or implementation of Article III (Job Security) in relation to Article IV (Grievance Machinery)of the CBA. [4]
Petitioners theory does not hold water. There is no connection whatsoever between SMCs management prerogative to effect
the discharges and the interpretation or implementation of Articles III and IV of the CBA. The only relevant provision under Article
III that may need interpretation or implementation is Section 2 which was cited herein. However, as patiently pointed out by this
court, said provision does not come into play considering that the union never exercised its right to seek reconsideration of the
discharges effected by the company. It would have been different had the union sought reconsideration. Such recourse under
Section 2 would have been treated as a grievance under Article IV (Grievance Machinery) of the CBA, thus calling for the possible
interpretation or implementation of the entire provision on Grievance Machinery as agreed upon by the parties. This was not the
case however. The union brought the termination dispute directly to the Labor Arbiter rendering Articles III and IV of the CBA
inapplicable for the resolution of this case.
The discharges, petitioners also contend, call for the interpretation or enforcement of company personnel policies, particulary
SMCs personnel policies on lay-offs arising from redundacy, and so, they may be considered grievable and arbitrable by virtue of
Article 2 17(c). Not necessarily so. Company personnel policies are guiding principles stated in broad, long-range terms that
express the philosophy or beliefs of an organizations top authority regarding personnel matters. They deal with matters affecting
efficiency and well-being of employees and include, among others, the procedure in the administration of wages, benefits,
promotions, transfer and other personnel movements which are usually not spelled out in the collective agreement. The usual
source of grievances, however, is the rules and regulations governing disciplinary actions. [5] Judging therefrom, the questioned
discharges due to alleged redundancy can hardly be cosidered company personnel policies and therefore need not directly be
subject to the grievance machinery nor to voluntary arbitration.
Third. Petitioners would like to persuade us that respondents ULP claims are merely conclusory and cannot serve to vest
jurisdiction to the Labor Arbiters. Petitioners argue with passion: How was the discharges (sic) right to self-organization restrained
by their termination? Respondent did not show.. There is no allegation of the existence of anti-union animus or of the ultimate
facts showing how the discharges affected the rights to self-organization of individual respondents. [6] In short, petitioners maintain
that respondents complaint does not allege a genuine case for ULP.
The Court is not convinced.
The complaint alleges that:
5. Individual complainants are bona fide officers and members of complainant Ilaw at Buklod ng Manggagawa (IBM). They are active and
militant in the affairs and activities of the union.
xxx xxx xxx
23. The dismissal or lock-out from work of the individual complainants clearly constitutes an act of unfair labor practices in the light of the fact
that the work being performed by the individual complainants are being contracted out by the respondent company, and, therefore, deprives
individual complainants of their right to work and it constitutes a criminal violation of existing laws.
xxx xxx xxx
25. The acts of the respondent company in economically coercing employees to accept payment of seperation and/or retirement benefits,
pending final resolution of the labor disputes between the parties constitute acts of unfair labor practice in the light of the fact that there is
undue interference, restraint, and coercion of employees in the exercise of their right to self-organization and collective bargaining. [7]
Short of pre-empting the proceedings before the Labor Arbiter, the above complaint, makes Out a genuine case for ULP.
In Manila Pencil Co. v. CIR,[8] This Court had occasion to observe that even where business conditions justified a lay-off of
employees, unfair labor practices were committed in the form of discriminatory dismissal where only unionists were permanently
dismissed. This was despite the valid excuse given by the Manila Pencil Company that the dismissal of the employees was due to
the reduction of the companys dollar allocations for importation and that both union members and non-union members were laidoff. The Court, thru Justice Makalintal, rebuffed the petitioner Company and said:
x x x The explanation, however, does not by any means account for the permanent dismissal of five of the unionists, where it does not appear
that non-unionists were similarly dismissed.
xxx xxx xxx
And the discrimination shown by the Company strongly is confirmed by the fact that during the period from October 1958 to August 17, 1959
it hired from fifteen to twenty new employees and ten apprentices. It says these employees were for its new lead factory, but is (sic) not shown
that the five who had been permanently dismissed were not suitable for work in that new factory.

A similar ruling was made by this Court in Peoples Bank and Trust Co. v. Peoples Bank and Trust Co. Employees
Union[9] involving the lay-off by a bank of sixty-five (65) employees who were active union members allegedly by reason of
retrechment. The Court likewise found the employer in that case to have committed ULP in effecting the discharges.
This Court was more emphatic however in Bataan Shipyard and Engineering Co., Inc. v. NLRC, et al.:[10]
Under the circumstances obtaining in this case, We are inclined to believe that the company had indeed been discriminatory in selecting the
employees who were to be retrenched. All of the retrenched employees are officers and members of the NAFLU. The record of the case is
bereft of any satisfactory explanation from the Company regarding this situation. As such, the action taken by the firm becomes highly
suspect. It leads Us to conclude that the firm had been discriminating against membership in the NAFLU, an act which amounts to
interference in the employees exercise of their right of self-organization. Under Art. 249 (now Art. 248) of the Labor Code of the
Philippines, such interference is considered an act of unfair labor practice on the part of the Company x x x. (Emphasis ours)
It matters not that the cause of termination in the above cited cases was retrenchment while that in the instant case was
redundancy. The important fact is that in all of these cases, including the one at bar, all of the dismissed employees were officers
and members of their respective unions, and their employers failed to give a satisfactory explanation as to why this group of
employees was singled out.
It may be the case that employees other than union members may have been terminated also by petitioner SMC on account
of its redundancy program. If that is true, the discharges may really be for a bona fide authorized cause under Article 283 [11] of the
Labor Code. On the other hand, it is also possible that such may only be a clever scheme of the petitioner company to
camouflage its real intention of discriminating against union members particularly the private respondents. In any case, these
matters will be best ventilated in a hearing before the Labor Arbiter.
It is for the above reason that we cannot hold the petitioners guilty of the ULP charge. This will be the task of the Labor
Arbiter. We however find that based on the cicumstances surrounding this case and settled jurisprudence on the subject, the
complaint filed by the private respondents on February 25, 1991 alleges facts sufficient to costitute a bona fide case of ULP, and
therefore properly cognizable by the Labor Arbiter under Article 2 17(a) of the Labor Code. This is consistent with the rule that
jurisdictioin over the subject matter is determined by the allegations of the complaint. [12]
Finally, petitioners try to impress on this Court the strong State policy on the promotion of voluntary modes of settlement of
labor disputes crafted in the Constitution and the Labor Code which dictate the submission of the CBA dispute to grievance and
arbitration.[13]
In this regard, the response of the Solicitor General is apt:
Petitioners deserve commendation for divulging and bringing to public respondents attention the noble legislative intent behind the law
mandating the inclusion of grievance and voluntary arbitration provisions in the CBA. However, in the absence of an express legal conferment
thereof, jurisdiction cannot be appropriated by an official or tribunal (sic) no matter how well-intentioned it is, even in the pursuit of the
clearest substantial right (Concurring Opinion of Justice Barredo, Estanislao v. Honrado, 114 SCRA 748, 29 June 1982).[14]
In the same manner, petitioners cannot arrogate into the powers of voluntary arbitrators the original and exclusive jurisdiction of Labor Arbiters
over unfair labor practices, termination disputes, and claims for damages, in the absence of an express agreement between the parties in order
for Article 262[15] of the Labor Law to apply in the case at bar.[16]
WHEREFORE, the instant petition is DISMISSED for lack of merit and the resolutions of the National Labor Relations
Commission dated August 11, 1992 and October 29, 1992 are hereby AFFIRMED.

Austria v. NLRC G.R. No. 124382 August 16, 1999

Austria v. NLRC
G.R. No. 124382

August 16, 1999

KTA: Relationship of the church as an employer and the minister as an employee is purely secular in nature because it has no
relation with the practice of faith, worship or doctrines of the church, such affairs are governed by labor laws. The Labor Code
applies to all establishments, whether religious or not.
Facts:
The Seventh Day Adventists(SDA) is a religious corporation under Philippine law. The petitioner was a pastor of the SDA for 28
years from 1963 until 1991, when his services were terminated.
On various occasions from August to October 1991, Austria received several communications form Ibesate, the treasurer of the
Negros Mission, asking him to admit accountability and responsibility for the church tithes and offerings collected by his wife,
Thelma Austria, in his district and to remit the same to the Negros Mission.
The petitioner answered saying that he should not be made accountable since it was Pastor Buhat and Ibesate who authorized his
wife to collect the tithes and offerings since he was very ill to be able to do the collecting.

A fact-finding committee was created to investigate. The petitioner received a letter of dismissal citing:
1) Misappropriation of denominational funds;
2) Willful breach of trust;
3) Serious misconduct;
4) Gross and habitual neglect of duties; and
5) Commission of an offense against the person of employer's duly authorized representative as grounds for the termination of his
services.
Petitioner filed a complaint with the Labor Arbiter for illegal dismissal, and sued the SDA for reinstatement and backwages plus
damages. Decision was rendered in favor of petitioner.
SDA appealed to the NLRC. Decision was rendered in favor of respondent.
Issue:
1. Whether or not the termination of the services of the petitioner is an ecclesiastical affair, and, as such, involves the separation
of
church
and
state.
2. Whether or not the Labor Arbiter/NLRC has jurisdiction to try and decide the complaint filed by petitioner against the SDA.
Held/Ratio:
1. No. The matter at hand relates to the church and its religious ministers but what is involved here is the relationship of the
church as an employer and the minister as an employee, which is purely secular because it has no relationship with the practice
of faith, worship or doctrines. The grounds invoked for petitioners dismissal are all based on Art. 282 of Labor Code.
2. Yes. SDA was exercising its management prerogative (not religious prerogative) to fire an employee which it believes is unfit for
the job. It would have been a different case if Austria was expelled or excommunicated from the SDA.
PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) V.FABURADA

October 8, 2001

By: Aurea I. Gruyal

FACTS:

Private respondents Faburada et. al. filed a complaint

against PHCCI for illegal dismissal, premium pay, separation pay, wage differential, moral damages and
attorneys fees.

PHCCI filed a motion to dismiss on the ground that noemployer-employee relationship exists since
privaterespondents are all members and co-owners of thecooperative. Also, private respondents have not
exhausted the remedies provided in the coop by laws.
PHCCI also filed a supplemental motion to dismiss

alledging that RA 6939, the Cooperative Development Authority Law, requires conciliation or mediation within the
cooperative before a resort to judicial proceeding.

3.The Labor Arbiter ruled in favor of the private respondents, holding that the case is impressed with employeremployee relationship and that the laws on cooperatives is subservient to the Labor Code. The NLRC affirmed.

ISSUE: WON there is an employer-employee relationship between the parties and WON private respondents were
regular employees

HELD: YES.

RATIO:

Elements in determining existence of employer-employee relationship:

1) Selection and engagement of the worker or the power to hire

2) The power to dismiss

3) Payment of wages by whatever means

4) Power to control the workers conduct The above elements are present here. PHCCI through its Manager Mr.
Edilberto Lantaca, Jr. hired respondents as

Computer programmer and clerks. They worked regular working hours, were assigned specific duties, were paid
regular wages, and made to accomplish regular time records, and worked under the supervision of the manager.

Art. 280, Labor Code comprehends 3 kinds of employees:

1)REGULAR EMPLOYEES or those whose work is necessary or desirable to the usual business of the employer

2)PROJECT EMPLOYEES or those whoseemployment has been fixed for a specificproject or undertaking the
completion ortermination of which has been determined at the time of the engagement of the employee or where
the work or services to be performed is seasonal in nature and the employment is for the duration of the season

3)CASUAL EMPLOYEES or those who are neither regular nor project employees

There are 2 separate instances whereby it can be determined that an employment is regular:

1)If the particular activity performed by the employee is necessary or desirable in the usual business or trade of
the employer

2)If the employee has been performing the job for at least a year

Private respondents were rendering services necessary to the day-to-day operations of PHCCI. This alone qualified
them as regular employees. Moreover, all of them except one worked with PHCCI for more than 1 year.

That Faburada worked only on a part-time basis does not mean that he is not a regular employee .Regularity of
employment is not determined by the number of hours one works but by the nature and length of time one has
been in that particular job.

LABREL CASE DIGEST POOL / ATTORNEY JHONELLE ESTRADA / MONDAYS / 5:30 PM TO 8:30 PM / NEW ERA
UNIVERSITY COLLEGE OF LAW