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149011 machineries, work premises and other materials to qualify it as an

June 28, 2005 independent contractor. On the other hand, it is gathered that the lot,
building, machineries and all other working tools utilized by Aballa et al. in
FACTS: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose carrying out their tasks were owned and provided by SMC.
Cooperative (Sunflower) entered into a one-year Contract of Service and such And from the job description provided by SMC itself, the work assigned to
contract is renewed on a monthly basis until terminated. Pursuant to this, Aballa et al. was directly related to the aquaculture operations of SMC. As for
respondent Prospero Aballa rendered services to SMC. janitorial and messengerial services, that they are considered directly related
to the principal business of the employer has been jurisprudentially
After one year of service, Aballa filed a complaint before NLRC praying that recognized. Furthermore, Sunflower did not carry on an independent business
they be declared as regular employees of SMC. On the other hand, SMC filed or undertake the performance of its service contract according to its own
before the DOLE a Notice of Closure due to serious business losses. Hence, manner and method, free from the control and supervision of its principal,
the labor arbiter dismissed the complaint and ruled in favor of SMC. Aballa SMC, its apparent role having been merely to recruit persons to work for SMC.
then appealed before the NLRC. The NLRC dismissed the appeal finding that All the foregoing considerations affirm by more than substantial evidence the
Sunflower is an independent contractor. existence of an employer- employee relationship between SMC and Aballa.
Since Aballa who were engaged in shrimp processing performed tasks usually
On appeal, the Court of Appeals reversed NLRCs decision on the ground that necessary or desirable in the aquaculture business of SMC, they should be
the agreement between SMC and Sunflower showed a clear intent to abstain deemed regular employees of the latter and as such are entitled to all the
from establishing an employer-employee relationship. benefits and rights appurtenant to regular employment. They should thus be
awarded differential pay corresponding to the difference between the wages
ISSUE: Whether or not Aballa and other employees of Sunflower are and benefits given them and those accorded SMCs other regular employees.
employees of SMC?
HELD: The test to determine the existence of independent contractorship is COMMISSION and MELECIO BASIAO, G.R. No. 84484 November
whether one claiming to be an independent contractor has contracted to do 15, 1989
the work according to his own methods and without being subject to the
control of the employer, except only as to the results of the work. In FACTS : Petitioner entered contract with Basiao for insurance policies and
legitimate labor contracting, the law creates an employer-employee annuities in accordance with the existing rules and regulations" of the
relationship for a limited purpose, to ensure that the employees are paid their Company; he would receive "compensation, in the form of commissions ... as
wages. The principal employer becomes jointly and severally liable with the provided in the Schedule of Commissions" of the contract to "constitute a
job contractor, only for the payment of the employees wages whenever the part of the consideration of ... (said) agreement;" and the "rules in ... (the
contractor fails to pay the same. Other than that, the principal employer is Company's) Rate Book and its Agent's Manual, as well as all its circulars ...
not responsible for any claim made by the employees. In labor-only and those which may from time to time be promulgated by it.
contracting, the statute creates an employer-employee relationship for a Some four years later, in April 1972, the parties entered into another contract
comprehensive purpose: to prevent a circumvention of labor laws. The an Agency Manager's Contract and to implement his end of it Basiao
contractor is considered merely an agent of the principal employer and the organized an agency or office to which he gave the name M. Basiao and
latter is responsible to the employees of the labor-only contractor as if such Associates, while concurrently fulfilling his commitments under the first
employees had been directly employed by the principal employer. The contract with the Company. In May, 1979, the Company terminated the
Contract of Services between SMC and Sunflower shows that the parties Agency Manager's Contract. After vainly seeking a reconsideration, Basiao
clearly disavowed the existence of an employer-employee relationship sued the Company in a civil action and this, he was later to claim, prompted
between SMC and private respondents. The language of a contract is not, the latter to terminate also his engagement under the first contract and to
however, determinative of the parties relationship; rather it is the totality of stop payment of his commissions starting April 1, 1980. Basiao thereafter
the facts and surrounding circumstances of the case. A party cannot dictate, filed with the then Ministry of Labor a complaint against the Company and its
by the mere expedient of a unilateral declaration in a contract, the character president. Without contesting the termination of the first contract, the
of its business, whether as labor-only contractor or job contractor, it being complaint sought to recover commissions allegedly unpaid there under, plus
crucial that its character be measured in terms of and determined by the attorney's fees. The respondents disputed the Ministry's jurisdiction over
criteria set by statute. What appears is that Sunflower does not have Basiao's claim, asserting that he was not the Company's employee, but an
substantial capitalization or investment in the form of tools, equipment,
independent contractor and that the Company had no obligation to him for formerly working as an overseas contract worker, asked for financial
unpaid commissions under the terms and conditions of his contract. assistance from the mother of Amelita. Since then, as an indication of
The Labor Arbiter to whom the case was assigned found for Basiao. He ruled gratitude, private respondent voluntarily helped the mother of Amelita in
that the underwriting agreement had established an employer-employee overseeing the business.
relationship between him and the Company, and this conferred jurisdiction on January 1996, the mother of Amelita passed away, so the latter then took
the Ministry of Labor to adjudicate his claim. Said official's decision directed over the management of the business. She then discovered that there were
payment of his unpaid commissions "... equivalent to the balance of the first arrears in the payment of taxes and other government fees, although the
year's premium remaining unpaid, at the time of his termination, of all the records purported to show that the same were already paid. Amelita then
insurance policies solicited by ... (him) in favor of the respondent made some changes in the business operation and private respondent and
company ..." plus 10% attorney's fees. This decision was, on appeal by the his wife were no longer allowed to participate in the management thereof. As
Company, affirmed by the National Labor Relations Commission. Hence, the a consequence, the latter filed a complaint charging that petitioner had
present petition for certiorari and prohibition illegally terminated his employment. the labor arbiter rendered a decision in
favor of petitioner on October 25, 1996 declaring that no employer-employee
ISSUE: relationship existed between the parties and, therefore, his office had no
Whether, as Basiao asserts, he had become the Company's employee jurisdiction over the case.
by virtue of the contract invoked by him, thereby placing his claim private respondent appealed to the NLRC. NLRC remanded the case to LA. MR
for unpaid commissions within the original and exclusive jurisdiction was filed by the petitioner which was denied.
of the Labor Arbiter under the provisions of Section 217 of the Labor
Code, or, contrarily, as the Company would have it, that under said RULING:
contract Basiao's status was that of an independent contractor 1) HISTORY: the legal history of the NLRC. It was first established in the
whose claim was thus cognizable, not by the Labor Arbiter in a labor Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions
case, but by the regular courts in an ordinary civil action. were expressly declared to be appealable to the Secretary of Labor and,
ultimately, to the President of the Philippines.
HELD: May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the
The Court, therefore, rules that under the contract invoked by him, Basiao same to take effect six months after its promulgation. 8 Created and
was not an employee of the petitioner, but a commission agent, an regulated therein is the present NLRC which was attached to the Department
independent contractor whose claim for unpaid commissions should have of Labor and Employment for program and policy coordination only. 9 Initially,
been litigated in an ordinary civil action. The Labor Arbiter erred in taking Article 302 (now, Article 223) thereof also granted an aggrieved party the
cognizance of, and adjudicating, said claim, being without jurisdiction to do remedy of appeal from the decision of the NLRC to the Secretary of Labor, but
so, as did the respondent NLRC in affirming the Arbiter's decision. This P.D. No. 1391 subsequently amended said provision and abolished such
conclusion renders it unnecessary and premature to consider Basiao's claim appeals. No appellate review has since then been provided for.
for commissions on its merits. the argument that this Court has no jurisdiction to review the decisions of the
NLRC, and formerly of the Secretary of Labor, since there is no legal provision
ST. MARTIN FUNERAL HOME vs. NATIONAL LABOR RELATIONS for appellate review thereof, the Court nevertheless rejected that thesis. It
COMMISSION and BIENVENIDO ARICAYOS, G.R. No. 130866 held that there is an underlying power of the courts to scrutinize the acts of
September 16, 1998 such agencies on questions of law and jurisdiction even though no right of
review is given by statute; that the purpose of judicial review is to keep the
FACTS: Private respondent alleges that he started working as Operations administrative agency within its jurisdiction and protect the substantial rights
Manager of petitioner St. Martin Funeral Home on February 6, 1995. However, of the parties; and that it is that part of the checks and balances which
there was no contract of employment executed between him and petitioner restricts the separation of powers and forestalls arbitrary and unjust
nor was his name included in the semi-monthly payroll. On January 22, 1996, adjudications.
he was dismissed from his employment for allegedly misappropriating the remedy of the aggrieved party is to timely file a motion for
P38,000.00 which was intended for payment by petitioner of its value added reconsideration as a precondition for any further or subsequent remedy, 12
tax (VAT) to the Bureau of Internal Revenue (BIR). and then seasonably avail of the special civil action of certiorari under Rule
Petitioner on the other hand claims that private respondent was not its 65, 13 for which said Rule has now fixed the reglementary period of sixty
employee but only the uncle of Amelita Malabed, the owner of petitioner St. days from notice of the decision. Curiously, although the 10-day period for
Martins Funeral Home. Sometime in 1995, private respondent, who was finality of the decision of the NLRC may already have lapsed as contemplated
in Section 223 of the Labor Code, it has been held that this Court may still On March 17, 1994, complainants filed their reply position paper and
take cognizance of the petition for certiorari on jurisdictional and due process affidavit. Correspondingly, a rejoinder was filed by respondent on May 16,
considerations if filed within the reglementary period under Rule 65. The 1994.
Court is, therefore, of the considered opinion that ever since appeals from the On August 17, 1994, from the Minutes of the scheduled hearing, respondent
NLRC to the Supreme Court were eliminated, the legislative intendment was failed to appear, and that the Office will evaluate the records of the case
that the special civil action of certiorari was and still is the proper vehicle for whether to conduct a formal trial on the merits or not, and that the
judicial review of decisions of the NLRC. The use of the word appeal in corresponding order will be issued. On January 16, 1996, the Labor Arbiter
relation thereto and in the instances we have noted could have been a lapsus issued an order to the effect that the case is now deemed submitted for
plumae because appeals by certiorari and the original action for certiorari are resolution.
both modes of judicial review addressed to the appellate courts. The On April 30, 1998, the Labor Arbiter a quo issued the assailed decision
important distinction between them, however, and with which the Court is dismissing the complaint for lack of merit. On June 26, 1998, complainants
particularly concerned here is that the special civil action of certiorari is not satisfied with the aforecited ruling interposed the instant appeal before
within the concurrent original jurisdiction of this Court and the Court of the NLRC. The NLRC held that respondents attained the status of regular
Appeals; 23 whereas to indulge in the assumption that appeals by certiorari seasonal workers of Hda. Maasin II having worked therein from 1964-1985. It
to the Supreme Court are allowed would not subserve, but would subvert, the found that petitioner failed to discharge the burden of proving that the
intention of Congress as expressed in the sponsorship speech on Senate Bill termination of respondents was for a just or authorized cause. Hence,
No. 1495. respondents were illegally dismissed and should be awarded their money
2) Appeal. claims. The Court of Appeals affirmed the NLRCs ruling, with the modification
-review of NLRC Decision is through Rule 65. that the backwages and other monetary benefits shall be computed from the
-jurisdiction: SC AND CA time compensation was withheld in accordance with Article 279 of the Labor
-by way of hierarchy: the review shall be initially filed before CA. Code, as amended by Republic Act No. 6715.

JOSEFINA BENARES vs. JAIME PACHO, RODOLFO PANCHO JR, ISSUE: W/N the petitioner is guilty of illegal dismissal with money claims.
HELD: YES, the Supreme Court dismissed the instant petition and affirmed
FACTS: the Decision of the Court of Appeals base on the following premise:
On July 24, 1991, complainants thru counsel wrote the Regional Director of Petitioner underscores the NLRC decisions mention of the payroll she
the Department of Labor and Employment, Bacolod City for intercession presented despite the fact that she allegedly presented 235 sets of payroll,
particularly in the matter of wages and other benefits mandated by law. not just one payroll. This circumstance does not in itself evince any grave
On September 24, 1991, a routine inspection was conducted by personnel of abuse of discretion on the part of the NLRC as it could well have been just an
the Bacolod District Office of the Department of Labor and Employment. innocuous typographical error. Verily, the NLRCs decision, affirmed as it was
Accordingly, a report and recommendation was made, hence, the by the Court of Appeals, appears to have been arrived at after due
endorsement by the Regional Director of the instant case to the Regional consideration of the evidence presented by both parties. The SC finds no
Arbitration Branch, NLRC, Bacolod City for proper hearing and disposition. reason to disturb the finding that respondents were illegally terminated.
On October 15, 1991, complainants alleged to have been terminated without When there is no showing of clear, valid and legal cause for the termination
being paid termination benefits by respondent in retaliation to what they of employment, the law considers the matter a case of illegal dismissal and
have done in reporting to the Department of Labor and Employment their the burden is on the employer to prove that the termination was for a just or
working conditions viz-a-viz (sic) wages and other mandatory benefits. authorized cause.25 In this case, as found both by the NLRC and the Court of
On July 14, 1992, notification and summons were served to the parties Appeals, petitioner failed to prove any such cause for the dismissal of
wherein complainants were directed to file a formal complaint. respondents.
On July 28, 1992, a formal complaint was filed for illegal dismissal with money
claims. From the records, summons and notices of hearing were served to the RAUL G. LOCSIN and EDDIE B. TOMAQUIN Vs. PHILIPPINE LONG
parties and apparently no amicable settlement was arrived, hence, the DISTANCE TELEPHONE COMPANY, G.R. No. 185251, October 2,
parties were directed to file their respective position papers. 2009
On January 22, 1993, complainant submitted their position paper, while
respondent filed its position paper on June 21, 1993. Facts: On November 1, 1990, respondent Philippine Long Distance Telephone
Company (PLDT) and the Security and Safety Corporation of the
Philippines (SSCP) entered into a Security Services Agreement (Agreement) respondent, including due process requirements in the termination of their
whereby SSCP would provide armed security guards to PLDT to be services.
assigned to its various offices. Pursuant to such agreement, Both the Labor Arbiter and NLRC found that respondent did not
petitioners Raul Locsin and Eddie Tomaquin, among other security observe such due process requirements. Having failed to do so,
guards, were posted at a PLDT office. On August 30, 2001, respondent respondent is guilty of illegal dismissal.
issued a Letter dated August 30, 2001 terminating the Agreement Virginia G. Neri vs. National Labor Relations Commission, et al. [224
effective October 1, 2001. Despite the termination of the Agreement, SCRA 717 July 23, 1993]
however, petitioners continued to secure the premises of their assigned Facts:
office. They were allegedly directed to remain at their post by Respondents are sued by two employees of Building Care Corporation, which
representatives of respondent. In support of their contention, provides janitorial and other specific services to variousfirms, to compel Far
petitioners provided the Labor Arbiter with copies of petitioner Bast Bank and Trust Company to recognize them as its regular employees
Locsins pay slips for the period of January to September 2002 and be paid the same wages which its employeesreceive.Building Care
Then, on September 30, 2002, petitioners services were terminated. Thus, Corporation (BCC, for brevity), in the proceedings below, established that it
petitioners filed a complaint before the Labor Arbiter for illegal had substantial capitalization of P1 Millionor a stockholders equity of P1.5
dismissal and recovery of money claims such as overtime pay, Million. Thus the Labor Arbiter ruled that BCC was only job contracting and
holiday pay, premium pay for holiday and rest day, service incentive leave that consequently its employeeswere not employees of Far East Bank and
pay, Emergency Cost of Living Allowance, and moral and exemplary Trust Company (FEBTC, for brevity). on appeal, this factual finding was
damages against PLDT. affirmed by respondentNational Labor Relations Commission (NLRC, for
The Labor Arbiter rendered a Decision finding PLDT liable for illegal brevity). Nevertheless, petitioners insist before us that BCC is engaged in
dismissal. It was explained in the Decision that petitioners were found to "labor-only"contracting hence, they conclude, they are employees
be employees of PLDT and not of SSCP. Such conclusion was of respondent FEBTC.On 28 June 1989, petitioners instituted complaints
arrived at with the factual finding that petitioners continued to serve against FEBTC and BCC before Regional Arbitration Branch No. 10 of
as guards of PLDTs offices. As such employees, petitioners were entitled theDepartment of Labor and Employment to compel the bank to accept them
to substantive and procedural due process before termination of as regular employees and for it to pay the differential between thewages
employment. being paid them by BCC and those received by FEBTC employees with similar
Issue: Is there employer-employee relationship? length of service.
Ruling: Yes. From the foregoing circumstances, reason dictates that Issue:
we conclude that petitioners remained at their post under the Whether or not BCC is only a job contracting company, hence petitioners are
instructions of respondent. We can further conclude that respondent not regular employees of FEBTC.
dictated upon petitioners that the latter perform their regular duties to SC Ruling:
secure the premises during operating hours. This, to our mind and We cannot sustain the petition.Respondent BCC need not prove that it made
under the circumstances, is sufficient to establish the existence of an investments in the form of tools, equipment, machineries, work premises,
employer-employee relationship. To reiterate, while respondent and SSCP no among others,because it has established that it has sufficient capitalization.
longer had any legal relationship with the termination of the Agreement, The Labor Arbiter and the NLRC both determined that BCC had a capital stock
petitioners remained at their post securing the premises of respondent of P1 million fully subscribed and paid for. BCC is therefore a highly
while receiving their salaries, allegedly from SSCP. Clearly, such a situation capitalized venture and cannot be deemed engaged in "labor-
makes no sense, and the denials proffered by respondent do not shed any only"contracting.It is well-settled that there is "labor-only" contracting where:
light to the situation. It is but reasonable to conclude that, with the behest (a) the person supplying workers to an employer does not have substantial
and, presumably, directive of respondent, petitioners continued with their capital orinvestment in the form of tools, equipment, machineries, work
services. Evidently, such are indicia of control that respondent premises, among others;
exercised over petitioners. and
Evidently, respondent having the power of control over petitioners , (b) the workers recruited and placed by such personare performing activities
must be considered as petitioners employerfrom the termination of which are directly related to the principal business of the employer.Article
the Agreement onwardsas this was the only time that any 106 of the Labor Code defines "labor-only" contracting thusArt. 106.
evidence of control was exhibited by respondent over petitioners and in light Contractor or subcontractor
of our ruling in Abella. Thus, as aptly declared by the NLRC, . . . . There is "labor-only" contracting where the person supplying workers to
petitioners were entitled to the rights and benefits of employees of anemployer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises,among others, and the workers HERNANI S. REALUYO, ALSO KNOWN AS JOEY ROA, RESPONDENT.
recruited by such persons are performing activities which are directly related G.R. No. 153511, July 18, 2012
to the principalbusiness of such employer . . . . (emphasis supplied).Based on
the foregoing, BCC cannot be considered a "labor-only" contractor because it FACTS:
has substantial capital. While there may be noevidence that it has investment - This labor case for illegal dismissal involves a pianist employed to
in the form of tools, equipment, machineries, work premises, among others, it perform in the restaurant of a hotel.
is enough that it has substantialcapital, as was established before the Labor - August 9, 1999: Realuyo, whose stage name was Joey R. Roa, filed a
Arbiter as well as the NLRC. In other words, the law does not require both complaint for alleged unfair labor practice, constructive illegal
substantial capital andinvestment in the form of tools, equipment, dismissal, and the underpayment/nonpayment of his premium pay for
machineries, etc. This is clear from the use of the conjunction "or". If the holidays, separation pay, service incentive leave pay, and 13 th month
intention was to require thecontractor to prove that he has both capital and pay. He prayed for attorneys fees, moral damages of P100,000.00
the requisite investment, then the conjunction "and" should have been used. and exemplary damages for P100,000.00
But, havingestablished that it has substantial capital, it was no longer - Roa averred that he had worked as a pianist at the Legend Hotels
necessary for BCC to further adduce evidence to prove that it does not fall Tanglaw Restaurant from September 1992 with an initial rate of
within thepurview of "labor-only" contracting. There is even no need for it to P400.00/night; and that it had increased to P750.00/night. During his
refute petitioners' contention that the activities they perform are employment, he could not choose the time of performance, which
directlyrelated to the principal business of respondent bank.Even assuming had been fixed from 7:00PM to 10:00pm for three to six times a week.
ex argumenti that petitioners were performing activities directly related to - July 9, 1999: the management had notified him that as a cost-cutting
the principal business of the bank, under the"right of control" test they must measure, his services as a pianist would no longer be required
still be considered employees of BCC. In the case of petitioner Neri, it is effective July 30, 1999.
admitted that FEBTC issued a jobdescription which detailed her functions as a - In its defense, petitioner denied the existence of an employer-
radio/telex operator. However, a cursory reading of the job description shows employee relationship with Roa, insisting that he had been only a
that what was soughtto be controlled by FEBTC was actually the end-result of talent engaged to provide live music at Legend Hotels Madison
the task, eg., that the daily incoming and outgoing telegraphic transfer of Coffee Shop for three hours/day on two days each week; and stated
fundsreceived and relayed by her, respectively, tallies with that of the that the economic crisis that had hit the country constrained
register. The guidelines were laid down merely to ensure that the desired management to dispense with his services.
end-result was achieved. It did not, however, tell Neri how the radio/telex - December 29,1999: the Labor Arbiter (LA) dismissed the complaint
machine should be operated.More importantly, under the terms and for lack of merit upon finding that the parties had no employer-
conditions of the contract, it was BCC alone which had the power to reassign employee relationship, because Roa was receiving talent fee and
petitioners. Theirdeployment to FEBTC was not subject to the bank's not salary, which was reinforced by the fact that Roa received his
acceptance. Cabelin was promoted to messenger because the FEBTC branch talent fee nightly, unlike the regular employees of the hotel who are
managerpromised BCC that two (2) additional janitors would be hired from paid monthly.
the company if the promotion was to be effected. Furthermore, BCC was to - NLRC affirmed the LAs decision on May 31, 2001.
bepaid in lump sum unlike in the situation in Philippine Bank of - CA set aside the decision of the NLRC, saying CA failed to take into
Communications where the contractor, CESI, was to be paid at a daily rate on consideration that in Roas line of work, he was supervised and
a perperson basis. And, the contract therein stipulated that the CESI was controlled by the hotels restaurant manager who at certain times
merely to provide manpower that would render temporary services. In would require him to perform only tagalong songs or music, or wear
thecase at bar, Neri and Cabelin were to perform specific special services. barong tagalong to conform with the Filipinana motif of the place and
Consequently, petitioners cannot be held to be employees of FEBTC asBCC the time of his performance is fixed. As to the status of Roa, he is
"carries an independent business" and undertaken the performance of its considered a regular employee of the hotel since his job was in
contract with various clients according to its "own manner andmethod, free furtherance of the restaurant business of the hotel. Granting
from the control and supervision" of its principals in all matters "except as to that Roa was initially a contractual employee, by the sheer length of
the results thereof."The Petition for Certiorari is dismissed. service he had rendered for the company, he had been converted
into a regular employee.
LEGEND HOTEL (MANILA), OLWNED BY TITANIUM CORPORATION - CA held that the dismissal was due to retrenchment in order to avoid
AND/OR, NELSON NAPUD, IN HIS CAPACITY AS THE PRESIDENT OF or minimize business losses, which is recognized by law under Art.
PETITIONER CORPORATION, VS. 283 of the Labor Code.
claim is contrary to the records. Indeed, the memorandum
ISSUES: informing respondent of the discountinuance of his service
- WON there was employer-employee relationship between the two, because of the financial condition of petitioner showed the
and if so, latter had the power to dismiss him from employment.
- WON Roa was validly terminated
Investment Planning v. SSS
- YES. Employer-employee relationship existed between the FACTS:
o Roa was undeniably employed as a pianist of the restaurant. Petitioner is a domestic corporation engaged in business
The hotel wielded the power of selection at the time it management and sale of securities. It has 2 classes of agents selling
entered into the service contract dated Sept. 1, 1992 with investment plans: 1) salaried employees who have fixed hours of work under
Roa. The hotel could not seek refuge behind the service the control of the company; 2) registered representatives are on commission
contract entered into with Roa. It is the law that defines and basis.
governs an employment relationship, whose terms are not
restricted to those fixed in the written contract, for other Petitioner applied to SSS for exemption of coverage of these
factors, like the nature of the work the employee has been registered representatives. However, it was denied on the ground that these
called upon to perform, are also considered. registered employees are employees of the petitioner.
o The law affords protection to an employee, and does not
countenance any attempt to subvert its spirit and intent. Any ISSUE: W/N petitioners registered representatives are employees
stipulation in writing can be ignored when the employer
utilizes the stipulation to deprive the employee of his security
of tenure. The inequality that characterizes employer- HELD:
employee relationship generally tips the scales in
favor of the employer, such that the employee is often No. These representatives are in reality commission agents. They are
scarcely provided real and better options. not required to report for work anytime. They shoulder their own selling
o The argument that Roa was receiving talent fee and not expenses as well as transportation and they are paid with commission based
salary is baseless. There is no denying that the remuneration on a certain percentage of their sales.
denominated as talent fees was fixed on the basis of his
talent, skill, and the quality of music he played during the Where there is no element of control and where a person who works
hours of his performance. Roas remuneration, albeit for another is not subject to definite hours of work and in turn compensated
denominated as talent fees, was still considered as included according to the result of his efforts and not the amount thereof, there is no
in the term wage in the sense and context of the Labor Code, employer-employee relationship.
regardless of how petitioner chose to designate the
remuneration, as per Article 97(f) of the Labor Code.
o The power of the employer to control the work of the BERNARD TENAZAS v. R. VILLEGAS TAXI TRANSPORT G.R. No. 192998
employee is considered the most significant determinant of 02 APRIL 2014
the existence of an employer-employee relationship. This is
the so-called control test, and is premised on whether the FACTS:
person for whom the services are performed reserves the Bernard Tenazas, Jaime Francisco, and Isidro Endraca filed a complaint for
right to control both the end achieved and the manner and illegal dismissal against R. Villegas Taxi Transport, and/or Romualdo Villegas
means used to achieve that end. and Andy Villegas. PETITIONERS CLAIM
o Lastly, petitioner claims that it had no power to dismiss TENAZAS - Taxi unit was sideswiped by another vehicle (damage = P500);
respondent due to his not being even subject to its Code of fired after reporting the incident, even threatened w/ physical harm if he was
Discipline, and that the power to terminate the working seen on company premises. FRANCISCO - Dismissed because of the
relationship was mutually vested in the parties, in that either unfounded suspicion that he was organizing a labor union EDRACA
party might terminate at will, with or without cause. This Dismissed after falling short of the required boundary for his taxi unit; fell
short because of P700 spent on an urgent repair R. VILLEGAS TAXIS CLAIM On May 23, 2008, the petitioner Danilo (Bitoy) Javier filed a complaing against
TENAZAS - Company admits that Tenazas is an employee regular driver. the respondents (Fly Ace Corporation / Flordelyn Castillo) for underpayment
Tenazas was never terminated; he failed to report back to work after being of salaries and other labor standard benefits. Javier worked for the
told to wait for the release of his taxi (overhauled due to mechanical defects) respondents company since September 2007 as an all around worker around
FRANCISCO - Company denies that Francisco is an employee ENDRACA - the respondents warehouse and a pahinante for the companys
Company admits that Endraca is an employee spare driver . Endraca could deliveries. The petitioner claims that he worked for the respondent from 7:00
not have been terminated in March 2006 because he stopped reporting for AM to 5:00 PM, Monday to Saturday during his time of employment but was
work in July 2003 (but willing to accommodate him again as he was never never issued a company ID nor any payslips like the other employees. On
really dismissed) Tenazas, Francisco, and Endraca also filed a Motion to Admit May 6, 2008, the petitioner was barred from entering the companys
Additional Evidence: (a) Joint Affidavit of the petitioners; (b) Affidavit of Good premises and despite repeated pleading to allow him to resume work he was
Faith of Aloney Rivera (co-driver); (c) pictures of the petitioners wearing not allowed to. Petitioner further claims that when asked for a reason on why
company shirts; he was being barred from working, his superior a certain Ruben Ong (Mr. Ong)
(d) Tenazas Certification/Record of Social Security System (SSS) replied by telling him
contributions. Tanungin mo anak mo Petitioner claims that Mr. Ong had been courting his
LA: No illegal dismissal because no proof of an overt act of dismissal daughter and apparently after being spurned had terminated Javier without a
committed by R. Villegas Taxi; Francisco failed to prove he was an employee chance to refute the cause/s of his dismissal. To support his allegations, the
NLRC: Reversed LA; the additional evidence sufficiently established the petitioner presented an affidavit of one Bengie Valenzuela who alleged that
existence of employer-employee relationship and illegal dismissal (for all petitioner was a stevedore or pahinante of Fly Ace from September 2007 to
three) January 2008. The said affidavit was subscribed before the Labor Arbiter. Fly
Ace on the other hand claims that the petitioner was contracted by its
Issue: WON there was an Employer-employee relationship employee Mr. Ong as a pahinante on a pakyaw (or per work) basis at an
agreed rate of 300 per trip (later increased to 325 on January 2008). Mr. Ong
Held: The burden of proof rests upon the party who asserts the affirmative of had contracted the petitioner only roughly 5 to 6 times per month whenever
an issue. As Francisco was claiming to be an employee of R. Villegas Taxi, it is their contracted hauler (Milmar Hauling Services) was not available. Fly Ace
incumbent upon him to proffer evidence to prove the existence of the submitted their contract with Milmar, and copies of acknowledgement
relationship. There is no hard and fast rule to establish the elements of receipts evidencing the payment for the petitioners services with the words
employer-employee relationship. Any competent and relevant evidence may daily manpower (pakyaw/piece rate pay) with the petitioners signature /
be admitted, e.g., identification cards, cash vouchers, social security initials to try and prove that petitioner was not one of their employees. LA
registration, appointment letters or employment contracts, payrolls, dismissed the complaint for lack of merit, saying that the petitioner failed to
organization charts, personnel lists. Francisco failed to present substantial present proof of his regular employment with the company: Complainant has
evidence to establish the relationship. No documentary evidence submitted, no employee ID showing his employment with the Respondent nor any
like an attendance logbook, payroll, SSS record, or any personnel file that document showing that he received the benefits accorded to regular
depicts his status as an employees of the Respondents. His contention that Respondent failed to give
employee. He could also have at least presented his social security records him said ID and payslips implies that indeed he was not a regular employee
stating his contributions, name and address of employer (which Tenazas of Fly Ace considering that complainant was a helper and that Respondent
presented). Another taxi operator, Emmanuel Villegas, also claimed to be company has contracted a regular trucking for the delivery of its products.
his employer a fact not denied or questioned by Francisco in any of his Respondent Fly Ace is not engaged in trucking business but in the
pleadings. Petition DENIED. SC agreed with CAs order of reinstatement importation and sales of groceries. Since there is a regular hauler to deliver
instead of separation pay. (*Strained relations must be demonstrated as a its products, we give credence to Respondents claim that complainant was
fact. In this case, no facts demonstrated that the relations were so strained contracted on "pakiao" basis. As to the claim for underpayment of salaries,
as to make reinstatement no longer a feasible action. the payroll presented by the Respondents showing salaries of workers on
"pakiao" basis has evidentiary weight because although the signature of the
BITOY JAVIER (DANILO P. JAVIER), vs. FLY ACE complainant appearing thereon are not uniform, they appeared to be his true
CORPORATION/FLORDELYN CASTILLO. signature. On appeal at the NLRC, Javier was favored. It ruled that the LA
skirted the argument of Javier and immediately concluded that he was not a
FACTS regular employee simply because he failed to present proof. It was of the
view that a *pakyaw
-basis arrangement did not preclude the existence of employer-employee his claim. The lone affidavit executed by one Bengie Valenzuela was
relationship. On March 18, 2010, the CA annulled the NLRC findings that unsuccessful in strengthening Javiers cause. The Court cannot ignore the
Javier was indeed a former employee of Fly Ace and reinstated the dismissal inescapable conclusion that his mere presence at the workplace falls short in
of Javiers complaint as ordered by the LA. In an illegal dismissal case the proving employment therein. The supporting affidavit could have, to an
onus probandi rests on the employer to prove that its dismissal was for a extent, bolstered Javiers claim of being tasked to clean grocery items when
valid cause. However, before a case for illegal dismissal can prosper, an there were no scheduled delivery trips, but no information was offered in this
employer-employee relationship must first be established. x x x it is subject simply because the witness had no personal knowledge of Javiers
incumbent upon private respondent to prove the employee-employer employment. The Court is of the considerable view that on Javier lies the
relationship by substantial evidence. It is incumbent upon private respondent burden to pass the well-settled tests to determine the existence of an
to prove, by substantial evidence, that he is an employee of petitioners, but employer-employee relationship, viz : (1) the selection and engagement of
he failed to discharge his burden. The non-issuance of a company-issued the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
identification card to private the power to control the employees conduct. Of these elements, the most
respondent supports petitioners contention that private respondent was not important criterion is whether the employer controls or has reserved the right
its employee. Case was elevated to the SC on appeal. to control the employee not only as to the result of the work but also as to
the means and methods by which the result is to be accomplished. In this
ISSUES case, Javier was not able to persuade the Court that the above elements exist
1. WON the CA erred in holding that the petitioner was not a regular in his case. Fly Ace does not dispute having contracted Javier and paid him on
employee of FLY ACE (NO) a "per trip" rate as a stevedore, albeit on a pakyaw
basis. The Court cannot fail to note that Fly Ace presented documentary
2. WON the CA erred in holding that the petitioner is not entitles to his proof that Javier was indeed paid on a pakyaw basis per the acknowledgment
monetary claims (NO) receipts admitted as competent evidence by the LA. Unfortunately for Javier,
his mere denial of the signatures affixed therein cannot automatically sway
The Court affirms the assailed CA decision. It must be noted that the issue of us to ignore the documents because "forgery cannot be presumed and must
Javiers alleged illegal dismissal is anchored on the existence of an employer be proved by clear, positive and convincing evidence and the burden of proof
-employee relationship between him and Fly Ace. This is essentially a lies on the party alleging forgery." Considering the above findings, the Court
question of fact. Generally, the Court does not review errors that raise factual does not see the necessity to resolve the second issue presented. The Courts
questions decision does not contradict the settled rule that "payment by the piece is
. However, when there is conflict among the factual findings of the just a method of compensation and does not define the essence of the
antecedent deciding bodies like the LA, the NLRC and the CA, "it is proper, in relation." Payment on a piece-rate basis does not negate regular
the exercise of Our equity jurisdiction, to review and re-evaluate the factual employment. "The term wage is broadly defined in Article 97 of the Labor
issues and to look into the records of the case and re-examine the questioned Code as remuneration or earnings, capable of being expressed in terms of
findings." In dealing with factual issues in labor cases, "substantial evidence money whether fixed or ascertained on a time, task, piece or commission
that amount of relevant evidence which a reasonable mind might accept as basis. Payment by the piece is just a method of compensation and does not
adequate to justify a conclusion is sufficient." As the records bear out, the define the essence of the relations. Nor does the fact that the petitioner is not
LA and the CA found Javiers claim of employment with Fly Ace as wanting covered by the SSS affect the employer-employee relationship. However , in
and deficient. The Court is constrained to agree. Although Section 10, Rule VII determining whether the relationship is that of employer and employee or
of the New Rules of Procedure of the NLRC allows a relaxation of the rules of one of an independent contractor, each case must be determined on its own
procedure and evidence in labor cases, this rule of liberality does not mean a facts and all the features of the relationship are to be considered. While the
complete dispensation of proof. In sum, the rule of thumb remains: the onus Constitution is committed to the policy of social justice and the protection of
probandi the working class, it should not be supposed that every labor dispute will be
falls on petitioner to establish or substantiate such claim by the requisite automatically decided in favor of labor. Management also has its rights which
quantum of evidence. "Whoever claims entitlement to the benefits provided are entitled to respect and enforcement in the interest of simple fair play. Out
by law should establish his or her right thereto. Javier failed to adduce of its concern for the less privileged in life, the Court has inclined, more often
substantial evidence as basis for the grant of relief. While Javier remains firm than not, toward the worker and upheld his cause in his conflicts with the
in his position that as an employed stevedore of Fly Ace, he was made to employer. Such favoritism, however, has not blinded the Court to the rule
work in the company premises during weekdays arranging and cleaning that justice is in every case for the deserving, to be dispensed in the light of
grocery items for delivery to clients , no other proof was submitted to fortify the established facts and the applicable law and doctrine.
employee-employer relationship and not partnership and that Genovia wa
Lirio v. Genovia November 2011) sillegally dismissed. NLRC reversed: Genovia failed to prove with substantial
Facts: evidence that he was selected and engaged by petitioner, that petitioner had
the power to dismiss him, and that they had the power to control him not
Resp. Genovia was hired as studio manager by petitioner Lirio, owner of only as to the result of his work, but also as to the means and methods of
Celkor Ad Sonicmix Recording Studio(Celkor) particularly, to manage and accomplishing his work. CA set aside the ruling of the NLRC.
operate Celkor and to promote and sell the recording studio's services to ISSUE: Whether or not the relationship between Lirio and Genovia was an
music enthusiasts and other prospective clients. informal partnership.
He was to receive a monthly salary of P7,000 and an additional commission
of P100.00 per hour as recording technician. His work was from Monday to HELD: No. It was not partnership but an employer-employee relationship. CA
Friday, 9am-6pm. A few days after he started working as a studio manager, decision affirmed. The elements to determine the existence of an
petitioner approached him and told him about his project to produce an employment relationship are: (a) the selection and engagement of the
album for his 15-year-old daughter, Celine Mei Lirio, a former talent of ABS- employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
CBN Star Records. Petitioner asked respondent to compose and arrange employer's power to control the employee's conduct. The most important
songs for Celine and promised that he (Lirio)would draft a contract to assure element is the employer's control of the employee's conduct, not only as to
respondent of his compensation for such services.The album was completed the result of the work to be done, but also as to the means and methods to
and the carrier single Genovia composed and arranged was finally aired but accomplish it. All the aforesaid elements are present and was proven by
he was denied his compensation by Lirio despite several demands. Lirio told Genovia through documentary evidence:
Genovia that:a.He was practically a nobody and had proven nothing yet in (a) a document denominated as "payroll" (dated July 31, 2001 to March 15,
the music industry, respondent did not deserve a high compensation, and he 2002) certified correct by petitioner which showed that respondent received a
should be thankful that he was given a job to feed his family.b.Genovia was monthly salary of P7,000.00 (P3,500.00 every 15thof the month and another
entitled only to 20% of the net profit, and not of the gross sales of the album, P3,500.00 every 30th of the month) with the corresponding deductions due to
and that thesalaries he received and would continue to receive as studio absences incurred by respondent; and (2) copies of petty cash vouchers,
manager of Celkor would be deducted from the said 20% net profit share Lirio showing the amounts he received and signed for in the payrolls. Petitioner
then verbally dismissed Genovia from work. Genovia filed a complaint for wielded the power to dismiss as respondent stated that he was verbally
illegal dismissal and prayed for his rein statement without loss of seniority dismissed by petitioner, and respondent, thereafter, filed an action for illegal
rights, or, in the alternative, that he be paid separation pay, backwages and dismissal against petitioner. Petitioner certainly had the power to check on
overtime pay; and that he be awarded unpaid commission in the amount of the progress and work of respondent as stated in hisPosition Paper and that it
P2,000.00 for services rendered as a studio technician as well as moral and was agreed that he would help and teach respondent how to use the studio
exemplary damages. Lirios defense: Respondent could not have been hired equipment. Lirio failed to prove that his relationship with respondent was one
as a studio manager, since the recording studio has no personnel except of partnership. Such claim was not supported by any written agreement: In
petitioner. Respondent verbally agreed with petitioner to co-produce the the payroll dated July 31, 2001 to March 15, 2002, there were deductions
album based on the following terms and conditions: (1) petitioner shall from the wages of respondent for his absence from work, which negates
provide all the financing, equipment and recording studio; (2) Celine MeiLirio petitioner's claim that the wages paid were advances for respondents work
shall sing all the songs; (3) respondent shall act as composer and arranger of in the partnership. It is a well-settled doctrine, that if doubts exist between
all the lyrics and the music of the five songs he already composed and the the evidence presented by the employer and the employee, the scales of
revival songs; (4) petitioner shall have exclusive right to market the album; justice must be tilted in favor of the latter. It is a time-honored rule that in
(5) petitioner was entitled to 60% of the net profit, while respondent and controversies between a laborer and his master, doubts reasonably arising
Celine Mei Lirio were each entitled to 20% of the net profit; and (6) from the evidence or in the interpretation of agreements and writing should
respondent shall be entitled to draw advances of P7,000.00 a month, which be resolved in the formers favor.
shall be deductible from his share of the net profits and only until such time
that the album has been produced. Accordingly, their relationship was an
informal partnership under Article 1767 of the Civil Code because: They LOLITA LOPEZ, PETITIONER, VS. BODEGA CITY (VIDEO-DISCO
agreed to contribute money, property or industry to a common fund with the KITCHENOF THE PHILIPPINES) AND/OR ANDRES C. TORRES-YAP,
intention of dividing the profits among themselves Petitioner had no control RESPONDENTS.
over the time and manner by which respondent composed or arranged the
songs, except on the result thereof. Labor Arbiter ruled that there was an FACTS
Respondent Bodega City (Bodega City) is a corporation, while respondent allowance for five (5) days. The CA did not err when it held that a solitary
Andres C.Torres-Yap (Yap) is its owner/ manager of Bodega City. Petitioner was petty cash voucher did not prove that petitioner had been receiving salary
the "lady keeper"of Bodega City tasked with manning its ladies' comfort from respondents or that she had been respondents' employee for 10 years.
room.2 Bodega alleged that Lopez have acted in a hostile manner against a Indeed, if petitioner was really an employee of respondents for that length of
lady customer who informed the management that she saw petitioner time, she should have been able to present salary vouchers or pay slips and
sleeping while on duty. Petitioner Lopez filed with NLRC, a complaint for illegal not just a single petty cash voucher. The Court agrees with respondents that
dismissal contending that she was dismissed from her employment without petitioner could have easily shown other pieces of evidence such as a
cause and due process. In their answer, respondents Bodega contended that contract of employment, SSS or Medicare forms, or certificates of withholding
no employer-employee relationship by virtue of a concessionaire agreement tax on compensation income; or she could have presented witnesses to prove
she entered into with respondents. The complaint was dismissed by the Labor her contention that she was an employee of respondents. Petitioner failed to
Arbiter for lack of merit. However, on appeal, the NLRC set aside the order of do so. The only evidence presented by petitioner as proof of her alleged
dismissal and remanded the case for further proceedings. Upon remand, the employment are her ID card and one petty cash voucher for a five-day
case was assigned to a different Labor Arbiter. Thereafter, hearings were allowance which were disputed by respondents. To prove the element of
conducted and the parties were required to submit memoranda and other control, there is nothing in the agreement which specifies the methods by
supporting documents. The Judgment finds that Lopez was an employee of which petitioner should achieve these results. Thus, petitioner was not
respondents and that the latter illegally dismissed her. Respondents(Bodega) dismissed by respondents. Instead, as shown by the letter of Yap to her
filed an appeal with the NLRC. On March 22, 2001, the NLRC issued a their contractual relationship was terminated by reason of respondents'
Resolution, the dispositive portion of which reads as follows: WHEREFORE, termination of the subject concessionaire agreement.
premises duly considered, the Decision appealed from is hereby ordered SET
ASIDE and VACATED, and in its stead, a new one entered DISMISSING the G & M (PHIL.), INC., v. WILLIE BATOMALAQUE
above-entitled case for lack of merit. Petitioner (LOPEZ_filed an MR of the 461 SCRA 111 (2005)
above-quoted NLRC Resolution, but the NLRC denied the same. Aggrieved,
petitioner filed a Petition for Certiorari with the CA. The CA promulgated the FACTS: Abdul Aziz Abdullah Al Muhaimid Najad Car Maintenance Association
presently assailed Decision dismissing her special civil action for certiorari. (Abdul Aziz) hired Willie Batomalaque as car painter through a recruiter and
Petitioner moved for reconsideration but her motion was denied. Hence, agent petitioner G & M Phil., Inc. (G&M). Their contract is for 2 years.
herein petition based on the following grounds: (RULE 45)1.Petitioner
contends that it was wrong for the CA to conclude that even if she did not Batomalaque started working on March 10, 1992, but on June 7, 1994, he was
sign the document evidencing the concessionaire agreement, she impliedly repatriated. He then filed a complaint against G&M, Abdul Aziz and Country
accepted and thus bound herself to the terms and conditions contained in the Empire Insurance Company for non-payment and underpayment of salaries
said agreement when she continued to perform the task which was allegedly and damages with the Philippine Overseas Employment Administration
specified therein for a considerable length of time.2. Petitioner claims that (POEA). The Labor Arbiter (LA) credited Batomalaques complaint for
the concessionaire agreement was only offered to her during her tenth year underpayment of salaries during the first year of his contract but denied his
of service and after she organized a union and filed a complaint against other claims, and ordered G&M and other defendants to pay Batomalaque.
respondents. Prior to all these, petitioner asserts that her job as a "lady On appeal, the National Labor Relations Commission affirmed the decision of
keeper" was a task assigned to her as an employee of respondents. the LA.

ISSUES : Whether or not Lopez is an employee of respondents. ISSUE: Whether or not G&M has the obligation to prove that Batomalaque
was paid his salaries in full
HELD: To ascertain the existence of an employer-employee relationship,
jurisprudence has invariably applied the four-fold test, namely: (1) the HELD: Specifically with respect to labor cases, the burden of proving payment
manner of selection and engagement; (2) the payment of wages; (3) the of monetary claims rests on the employer, the rationale being that the
presence or absence of the power of dismissal; and (4) the presence or pertinent personnel files, payrolls, records, remittances and other similar
absence of the power of control. Of these four, the last one is the most documents which will show that overtime, differentials, service incentive
important. The so-called "control test" is commonly regarded as the most leave and other claims of workers have been paid are not in the possession
crucial and determinative indicator of the presence or absence of an of the worker but in the custody and absolute control of the employer.
employer-employee relationship. To prove the element of payment of wages,
petitioner presented a petty cash voucher showing that she received an
Aside, however, from its bare allegation that its principal Abdul Aziz had fully ISSUE: Whether or not Bautista is entitled to Service Incentive Leave. If he is,
paid Batomalaques salaries, G&M did not present any evidence, e.g., payroll Whether or not the three (3)-year prescriptive period provided under Article
or payslips, to support its defense of payment. G&M thus failed to discharge 291 of the Labor Code, as amended, is applicable to respondents claim of
the onus probandi. G&M, as the recruiter and agent of Abdul Aziz, is thus service incentive leave pay.
solidarily liable with the latter for the unpaid wages of Batomalaque.
HELD: Yes, Bautista is entitled to Service Incentive Leave. The Supreme
On repeated occasions, the Court ruled that the debtor has the burden of Court emphasized that it does not mean that just because an employee is
showing with legal certainty that the obligation has been discharged by paid on commission basis he is already barred to receive service incentive
payment. To discharge means to extinguish an obligation, and in contract law leave pay.
discharge occurs either when the parties have performed their obligations in The question actually boils down to whether or not Bautista is a field
the contract, or when an event the conduct of the parties, or the operation of employee.
law releases the parties from performing. Thus, a party who alleges that an According to Article 82 of the Labor Code, field personnel shall refer to non-
obligation has been extinguished must prove facts or acts giving rise to the agricultural employees who regularly perform their duties away from the
extinction. principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.
The fact of underpayment does not shift the burden of evidence to As a general rule, field personnel are those whose performance of their
Batomalaque because partial payment does not extinguish the obligation. job/service is not supervised by the employer or his representative, the
Only when the debtor introduces evidence that the obligation has been workplace being away from the principal office and whose hours and days of
extinguished does the burden of evidence shift to the creditor who is then work cannot be determined with reasonable certainty; hence, they are paid
under a duty of producing evidence to show why payment does not specific amount for rendering specific service or performing specific work. If
extinguish the obligation. required to be at specific places at specific times, employees including
drivers cannot be said to be field personnel despite the fact that they are
Auto Bus Transport Systems vs Bautista G.R. No. 156367 May performing work away from the principal office of the employee. Certainly,
16, 2005 Bautista is not a field employee. He has a specific route to traverse as a bus
driver and that is a specific place that he needs to be at work. There are
inspectors hired by Auto Bus to constantly check him. There are inspectors in
bus stops who inspects the passengers, the punched tickets, and the driver.
Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May
Therefore he is definitely supervised though he is away from the Auto Bus
1995. He was assigned to the Isabela-Manila route and he was paid by
main office. On the other hand, the 3 year prescriptive period ran but
commission (7% of gross income per travel for twice a month).In January
Bautista was able to file his suit in time before the prescriptive period
2000, while he was driving his bus he bumped another bus owned by Auto
expired. It was only upon his filing of a complaint for illegal dismissal, one
Bus. He claimed that he bumped the he accidentally bumped the bus as he
month from the time of his dismissal, that Bautista demanded from his
was so tired and that he has not slept for more than 24 hours because Auto
former employer commutation of his accumulated leave credits. His cause of
Bus required him to return to Isabela immediately after arriving at Manila.
action to claim the payment of his accumulated service incentive leave thus
Damages were computed and 30% or P75,551.50 of it was being charged to
accrued from the time when his employer dismissed him and failed to pay his
Bautista. Bautista refused payment.
accumulated leave credits. Therefore, the prescriptive period with respect to
Auto Bus terminated Bautista after due hearing as part of Auto Bus
his claim for service incentive leave pay only commenced from the time the
management prerogative. Bautista sued Auto Bus for Illegal Dismissal. The
employer failed to compensate his accumulated service incentive leave pay
Labor Arbiter Monroe Tabingan dismissed Bautistas petition but ruled that
at the time of his dismissal. Since Bautista had filed his money claim after
Bautista is entitled to P78,117.87 13th month pay payments and P13,788.05
only one month from the time of his dismissal, necessarily, his money claim
for his unpaid service incentive leave pay. The case was appealed before the
was filed within the prescriptive period provided for by Article 291 of the
National Labor Relations Commission. NLRC modified the LAs ruling. It
Labor Code.
deleted the award for 13th Month pay. The court of Appeals affirmed the NLRC.
Auto Bus averred that Bautista is a commissioned employee and if that is not
reason enough that Bautista is also a field personnel hence he is not entitled
150478. April 15, 2005]
to a service incentive leave.
FACTS: The 76 individual respondents were part of the workforce of Hacienda not enough that they perform work or services that are seasonal in nature.
Bino consisting of 220 workers, performing various works, such as cultivation, They must have been employed only for the duration of one (1) season. While
planting of cane points, fertilization, watering, weeding, harvesting, and the records sufficiently show that the respondents work in the hacienda was
loading of harvested sugarcanes to cargo trucks. On July 18, 1996, during the seasonal in nature, there was, however, no proof that they were hired for the
off-milling season, petitioner Starke issued an Order or Notice which stated, duration of one season. In fact, the payrolls submitted by the petitioners,
thus: show that they availed the services of the respondents since 1991. Absent
any proof to the contrary, the general rule of regular employment should,
To all Hacienda Employees: therefore, stand. It bears stressing that the employer has the burden of
proving the lawfulness of his employees dismissal. Petition is denied.
Please bear in mind that all those who signed in favor of CARP are expressing
their desire to get out of employment on their own volition. Wherefore, ST. LUKE'S MEDICAL CENTER, INCORPORATED, vs.
beginning today, July 18, only those who did not sign for CARP will be given JENNIFER LYNNE C. FADRIGO G.R. No. 185933 November
employment by Hda. Bino. (Sgd.) Hortencia Starke
25, 2009
The respondents regarded such notice as a termination of their employment.
As a consequence, they filed a complaint for illegal dismissal, wage Respondent Jennifer Lynne C. Fadrigo (respondent) was the Customer Affairs
differentials, 13th month pay, holiday pay and premium pay for holiday, Department Manager of petitioner SLMC. As such, respondent supervised the
service incentive leave pay, and moral and exemplary damages with the Wellness Program Office (WPO), which administers SLMCs check up
NLRC-RAB. The respondents alleged that they are regular and permanent packages.
workers of the hacienda and that they were dismissed without just and lawful On April 23, 2005, Dr. Charity Gorospe called up the WPO to refer a patient
cause. They further alleged that they were dismissed because they applied as for immediate check up. The call was answered by Michelle Rillo (Rillo), a
beneficiaries under the Comprehensive Agrarian Reform Program (CARP) over trainee at the front desk, who transferred the call to Hazel Tingzon (Tingzon),
the land owned by petitioner Starke. For her part, petitioner Starke recounted a casual employee. Tingzon explained to Dr. Gorospe the mechanics of
that the companys Board of Directors petitioned the Sangguniang Bayan of undergoing a check up, which could not be administered immediately as Dr.
Kabankalan for authority to re-classify, from agricultural to industrial, Gorospe wanted. Dr. Gorospe informed SLMCs Corporate President, Jose
commercial and residential, the whole of Hacienda Bino, except the portion Ledesma (Ledesma), of the incident. Ledesma then called the WPO to inquire
earmarked for the CARP. She asserted that half of the workers supported the if it was its policy to reject patients, like what it did to Dr. Gorospes referral.
re-classification but the others, which included the herein respondents, opted The WPO staff denied that they declined Dr. Gorospes request for immediate
to become beneficiaries of the land under the CARP. Petitioner Starke alleged admission of her patient, and added that the request for check up was
that in July 1996, there was little work in the plantation as it was off-season; already being processed for scheduling.At around 5 oclock in the afternoon
and so, on account of the seasonal nature of the work, she issued the order of the same day, respondent, who was then at home enjoying her rest day,
giving preference to those who supported the re-classification. She pointed received a phone call from SLMCs Associate Director for Corporate Affairs,
out that when the milling season began in October 1996, the work was Marilen Lagniton (Lagniton), informing her what had transpired at the WPO on
plentiful again and she issued notices to all workers, including the that day; and directing respondent to instruct Tingzon and Rillo not to report
respondents, informing them of the availability of work. However, the for duty the following day. Respondent immediately called the WPO. She was
respondents refused to report back to work. With respect to the respondents able to talk to Gail Manalastas (Manalastas), a senior associate, who also
money claims, petitioner Starke submitted payrolls evidencing payment relayed to her what had happened in the office. Respondent, however, was
thereof. not able to talk to Tingzon and Rillo because the two already went home. She
tried to reach them through their cellular phones to inform them of Lagnitons
ISSUE: Whether or not respondents are seasonal employees. instruction not to report for work, but respondents efforts proved futile. Thus,
respondent instructed Manalastas to tell Tingzon and Rillo not to work the
HELD: The SC held that the primary standard for determining regular following day and to wait for her at her office. In the morning of April 24,
employment is the reasonable connection between the particular activity 2005, Lagniton called the WPO and found out that Tingzon and Rillo were in
performed by the employee in Relation to the usual trade o business of the the office. She talked to the two and instructed them to go home. Thus, when
employer. There is no doubt that the respondents were performing work respondent arrived in the office, Tingzon and Rillo had already gone home. 3
necessary and desirable in the usual trade or business of an employer. For On April 27, 2005, respondent received a memorandum4 from Lagniton
respondents to be excluded from those classified as regular employees, it is requiring her to show cause why no disciplinary action should be taken
against her for insubordination, gross inefficiency and incompetence due to dismissal is unjustified.25 The CA, therefore, committed no reversible error in
the April 23 incident. The memorandum stated that respondent allowed a not sustaining the legality of respondents dismissal.
trainee and a casual employee, Rillo and Tingzon, to man the WPO during Article 279 of the Labor Code mandates that an employee who was unjustly
official business hours. Likewise, respondent allegedly failed to comply with dismissed from work shall be entitled to reinstatement without loss of
the management order to immediately pull out Rillo and Tingzon. On May 16, seniority rights and other privileges and to his full backwages, inclusive of
2005, respondent received a memorandum 7 from Muit advising the former of allowances, as well as to other benefits or their monetary equivalent,
the COVED decision to terminate her employment effective May 18, 2005. In computed from the time her compensation was withheld up to the time of
the presence of several employees, respondent was subjected to a thorough her actual reinstatement.26 Since the circumstances obtaining in this case do
search by security officers, pursuant to SLMCs directive. Claiming not warrant respondents reinstatement due to her strained relations with
termination without cause, respondent filed with the Labor Arbiter a SLMC, the award by the CA of separation pay, in lieu of reinstatement, in
complaint for illegal dismissal with prayer for reinstatement. SLMC and the addition to full backwages, is in order.
COVED members responded that there was a valid termination. They
asserted that respondent was dismissed for a just cause and with due Singer Sewing Machine vs. Drilon
process. Respondent willfully breached her duty when she allowed a trainee
and a casual employee to man the WPO during official business hours; and FACTS:
when she ignored the management directive to immediately pull out the The respondent union filed a petition for direct certification as the sole and
personnel involved in the incident, justifying the termination of her exclusive bargaining agent of all collectors of petitioner company. The
employment. The Labor Arbiter rendered a decision9 finding respondents company opposed the petition on the ground that the union members are
dismissal illegal. On appeal, the National Labor Relations Commission (NLRC) actually not employees but are independent contractor based on the
reversed the Labor Arbiter. Respondent then elevated the NLRC ruling via collection agency agreement which they signed. The respondent asserted
certiorari to the CA, which rendered the now assailed Decision 13 reversing the that they perform the most desirable and necessary activities for the
NLRC and reinstating, but with modification, the Labor Arbiters decision. continuous and effective operations of the business of the petitioner. They
contended that the collectors are employees because the agent shall utilize
Issue: WON respondent was validly dismissed. only receipt forms authorized and issued by the company. Monthly collection
Ruling: quota was also required by the company.
Undoubtedly, respondent cannot be dismissed for loss of confidence arising
from alleged gross inefficiency and insubordination. We are not unmindful of ISSUE:
the employers right to dismiss an employee based on fraud or willful breach W/N ER-EE relationship exists between petitioner and respondent
of trust. However, the loss of confidence must be based not on an ordinary
breach by the employee of the trust reposed in him by the employer, but, in HELD:
the language of Article 282(c) of the Labor Code, on a willful breach. A breach Applying the control test, there is no ER-EE relationship exists. Hence, if the
is willful if it is done intentionally, knowingly and purposely, without justifiable union members are not employees, no right for purposes of bargaining, nor
excuse, as distinguished from an act done carelessly, thoughtlessly, to be certified as such bargaining agent can ever be recognized. Not all
heedlessly, or inadvertently. It must rest on substantial grounds and not on collecting agents are employees and neither are all collecting agents
the employers arbitrariness, whims, caprices or suspicion; otherwise, the independent contractors. The requirement that collection agents utilize only
employee would eternally remain at the mercy of the employer. It should be receipt forms and report forms issued by the company and reports shall be
genuine and not simulated; nor should it appear as a mere afterthought to submitted at least once a week is not necessarily an indication of control over
justify an earlier action taken in bad faith or as a subterfuge for causes that the means by which the job of collection is to be performed. The monthly
are improper, illegal or unjustified. It has never been intended to afford an collection quota is a normal requirement. It is clear that the company and
occasion for abuse because of its subjective nature. There must, therefore, be each collecting agent intended that the company take control only over the
an actual breach of duty committed by the employee, which must be amount of collection, which is the result of the job performed. No such words
established by substantial evidence.23 In this case, SLMC utterly failed to as to hire and employ are present. Moreover, the agreement did not fix an
establish the requirements prescribed by law and jurisprudence for a valid amount for wages nor the required working hours. Compensation is earned
dismissal on the ground of breach of trust and confidence. The principle only on the basis of the tangible results produced such as the total collections
echoed and reechoed in jurisprudence is that the onus of proving that the made. There is also nothing in the agreement which implies control by the
employee was dismissed for a just cause rests on the employer, 24 and the company over the means and methods in achieving the end. Since private
latters failure to discharge that burden would result in a finding that the respondents are not employees of the company, they are not entitled to the
constitutional right to join or form a labor organization for purposes of necessary in the conduct of his business. Gamo and the copra workers did
collective bargaining. Wherefore, the petition for certification election is not exercise independent judgment in the performance of their tasks. The
dismissed. tools used by Gamo and his copra workers like the karit, bolo, pangbunot,
panglugit and pangtapok are not sufficient to enable them to complete the
job. Reliance on these primitive tools is not enough. In fact, the
accomplishment of their task required more expensive machineries and
equipment, like the trucks to haul the harvests and the drying facility, which
petitioner corporation owns. Thus between Gamo and the petitioner, there
South Davao Development Co. vs Gamo (2009) G.R. 171814 exist a valid job contracting.
Petitioner South Davao Development Company is the operator of a coconut LEOPOLDO GUARIN and ONE HUNDRED TWENTY (120) OTHERS vs.
and mango farm in San Isidro, Davao Oriental and NLRC, LIPERCON SERVICES, INC., and/or NOVELTY PHILIPPINES, INC
Inawayan/Baracatan, Davao del Sur. On 1963 petitioner hired respondent G.R. No. 86010 October 3, 1989
Sergio L. Gamo (Gamo) as a foreman. Sometime in 1987, petitioner Facts:
appointed Gamo as a copra maker contractor. Respondents Ernesto Belleza, Novelty Philippines, Inc. is a domestic corporation that is engaged in the
Carlos Rojas, Maximo Malinao were all employees in petitioners coconut garment manufacturing business. Lipercon Services, Inc. is also a domestic
farm, while respondents Felix Terona, Virgilio Cosep, Maximo Tolda, and corporation which is engaged in business as a service contractor providing
Nelson Bagaanwere assigned to petitioners mango farm. All of the workers for other companies. On July 6, 1983, Novelty and Lipercon entered
abovenamed respondents (copra workers) were later transferred by petitioner into a "Contract of Services" in which Lipercon, and Novelty agreed among
to Gamo as the latters copraceros. From 1987 to 1999, Gamo and petitioner others, that Lipercon will provide Novelty contractual
entered into a profit-sharing agreement wherein 70% of the net proceeds of Laborers/Helpers/Janitors. In the contract of service, it was expressly
the sale of copra went to petitioner and 30% to Gamo. The copra workers stipulated that no Employer-employee relationship shall exist between
were paid by Gamo from his 30% share. Petitioner wanted to standardize employees provided by Lipercon, petitioners herein, and the Novelty.
payments to its "contractors" in its coconut farms. Petitioner proposed a Petitioners worked for Novelty for some three years. On December 31, 1986,
newpayment scheme to Gamo. The new scheme provided a specific price for Novelty terminated its agreement with Lipercon, resulting in the dismissal of
each copra making activity. Gamo submitted his counter proposal. Petitioner the petitioners. On January 9, 1987, petitioners filed a complaint for illegal
did not accept Gamos counter proposal since it was higher by at least fifty dismissal against both Lipercon and Novelty. Labor Arbiter ruled that the
percent (50%) from its original offer. Without agreeing to the new petitioners were regular employees of Novelty and declared their dismissal
payment scheme, Gamo and his copra workers started to do harvesting work. illegal. Lipercon Services, Inc., on appeal, alleged that the decision was
Petitioner told them to stop. Eventually, petitioner and Gamo agreed that the contrary to the facts of the case and not in conformity with the evidence on
latter may continue with the harvest provided that it would be his last record and that the Executive Labor Arbiter gravely abused his discretion
"contract" with petitioner. Gamo suggested to petitioner to look for a when he ruled that Lipercon Services, Inc. merely acted as an agent of
new "contractor" since he was not amenable to the new payment scheme. Novelty Philippines, Inc. in the hiring and placement of the complainants. he
Gamo and petitioner failed to agree on a payment scheme, thus, petitioner NLRC rendered a decision holding that Lipercon was an independent
did not renew the "contract" of Gamo. Gamo and the copra workers alleged contractor and that the petitioners were its employees.
that they were illegally dismissed. Issue:
Issue: Whether or not Lipercon Services, Inc. is an independent contractor and that
Whether or not a valid job contracting exist between petitioner and Gamo. petitioners are its employees.
Ruling: Ruling:
To establish the existence of an independent contractor, we apply the Following the definition of Labor-only contract and Job contracting in Sections
following conditions: first, the contractor carries on an independent business 8 and 9, Rule VIII, Book I of the Omnibus Rules implementing the Labor Code,
and undertakes the contract work on his own account under his own the "Contract of Services" between Lipercon and Novelty, Lipercon was a
responsibility according to his own manner and method, free from the control "labor-only" contractor, hence, only an agent of Novelty to procure workers
and direction of his employer or principal in all matters connected with the for the latter, the real employer. The jobs assigned to the petitioners as
performance of the work except to the result thereof; and second, the mechanics, janitors, gardeners, firemen and grasscutters were directly
contractor has substantial capital or investments in the form of tools, related to the business of Novelty as a garment manufacturer. Novelty
equipment, machineries, work premises and other materials which are contends that the services which are directly related to manufacturing
garments are sewing, textile cutting, designs, dying, quality control, P1 million fully subscribed and paid for. BCC is therefore a highly capitalized
personnel, administration, accounting, finance, customs, delivery and similar venture and cannot be deemed engaged in "labor-only" contracting.
other activities; and that allegedly, "[i]t is only by stretching the imagination It is well-settled that there is "labor-only" contracting where: (a) the person
that one may conclude that the services of janitors, janitresses, firemen, supplying workers to an employer does not have substantial capital or
grasscutters, mechanics and helpers are directly related to the business of investment in the form of tools, equipment, machineries, work premises,
manufacturing garments". Not so, for the work of gardeners in maintaining among others; and, (b) the workers recruited and placed by such person are
clean and well-kept grounds around the factory, mechanics to keep the performing activities which are directly related to the principal business of
machines functioning properly, and firemen to look out for fires, are directly the employer.
related to the daily operations of a garment factory. That fact is confirmed by Article 106 of the Labor Code defines "labor-only" contracting
Novelty's rehiring the workers or renewing the contract with Lipercon every Based on the foregoing, BCC cannot be considered a "labor-only" contractor
year from 1983 to 1986, a period of three (3) years. As Lipercon was a "labor- because it has substantial capital. While there may be no evidence that it has
only" contractor, the workers it supplied Novelty became regular employees investment in the form of tools, equipment, machineries, work premises,
of the latter. among others, it is enough that it has substantial capital, as was established
before the Labor Arbiter as well as the NLRC. In other words, the law does not
Virginia G. Neri vs. National Labor Relations Commission, et al. require both substantial capital and investment in the form of tools,
equipment, machineries, etc. This is clear from the use of the conjunction
Facts: "or". If the intention was to require the contractor to prove that he has both
Respondents are sued by two employees of Building Care Corporation, which capital and the requisite investment, then the conjunction "and" should have
provides janitorial and other specific services to various firms, to compel Far been used. But, having established that it has substantial capital, it was no
Bast Bank and Trust Company to recognize them as its regular employees longer necessary for BCC to further adduce evidence to prove that it does not
and be paid the same wages which its employees receive. Building Care fall within the purview of "labor-only" contracting. There is even no need for it
Corporation (BCC, for brevity), in the proceedings below, established that it to refute petitioners'
had contention that the activities they perform are directly related to the principal
substantial capitalization of P1 Million or a stockholders equity of P1.5 Million. business of respondent bank.
Thus the Labor Arbiter ruled that BCC was only job contracting and that
consequently its employees were not employees of Far East Bank and Trust De Ocampo vs. NLRC G.R. No. 101539 September 4, 199
Company (FEBTC, for brevity). on appeal, this factual finding was affirmed by
respondent National Labor Relations Commission (NLRC, for brevity). Facts: Cecile de Ocampo and the other petitioners are employees of the
Nevertheless, petitioners insist before us that BCC is engaged in "labor-only" Baliwag Mahogany Corporation. They are either officers or members of the
contracting hence, Baliwag Mahogany Corporation Union-CFW, the existing collective bargaining
they conclude, they are employees of respondent FEBTC. On 28 June 1989, agent of the rank and file employees in the company. In 1988, the company
petitioners instituted complaints against FEBTC and BCC before Regional and the union entered into a CBA containing, among other things, provisions
Arbitration Branch No. 10 of the Department of Labor and Employment to on conversion into cash of unused vacation and sick leaves; grievance
compel the bank to accept them as regular employees and for it to pay the machinery procedure; and the right of the company to schedule work on
differential between the wages being paid them by BCC and those received Sundays and holidays. In November, 1989, the union made several requests
by FEBTC employees with similar length of service. from the company.The company ruled to allow payment of unused vacation
and sick leaves for the period of 1987-1988 but disallowed cash conversion of
Issue: the 1988-1989 unused leaves. The company suspended 20 employees for a
Whether or not BCC is only a job contracting company, hence petitioners are period of 3 days because of failure to render overtime work. On the same
not regular employees of FEBTC. day, the union filed a notice of strike on the grounds of ULP particularly the
violation of the CBA provisions on non-payment of unused leaves and illegal
SC Ruling: dismissal of seven (7) employees. Later on, the company issued a notice of
We cannot sustain the petition. Respondent BCC need not prove that it made termination to three employees or union members including Cecile de
investments in the form of tools, equipment, machineries, work premises, Ocampo allegedly to effect cost reduction and redundancy. The members of
among others, because it has established that it has sufficient capitalization. the union conducted a picket at the main gate of the company. On the same
The Labor Arbiter and the NLRC both determined that BCC had a capital stock day, the company filed a petition to declare the strike illegal with prayer for
of injunction against the union.
During the election of union officers, Cecile de Ocampo was elected as
president. During the conciliation meeting held at NCMB, the issue pertaining Dispositive: The petition is DISMISSED for lack of merit and the resolution of
to the legality of the termination of three union members was raised by the the respondent Commission is hereby AFFIRMED.
union. But both parties agreed to discuss it separately. The union requested
for the presence of a NCMB representative during a strike vote held by the
union. The strike vote resulted in favor of the strike. The union staged a
strike. Afterwards, the company filed a petition to assume jurisdiction with
the DOLE. The company also filed an amended petition, praying among other
things, that the strike staged by the union be declared illegal, there being no Phil Bank v NLRC
genuine strikeable issue and the violation of the no-strike clause of the
existing CBA between the parties. FACTS:
The Secretary of Labor in an order, certified the entire labor dispute to the Petitioner and CESI entered into a letter agreement wherein CESI will provide
respondent Commission for compulsory arbitration and directed all striking Temporary Services to petitioner. Attached to the letter was a list of
workers including the dismissed employees to return to work and the passengers, assigned to work with the petitioner, including respondent
management to accept them back. The sheriff, with the assistance of the Orpiada. Orpiada rendered services within the premises of the bank. On
policemen removed the barricades and opened the main gate of the October 1976, petitioner requested CESI to withdraw Orpiadas assignment
company. Criminal complaints for illegal assembly, grave threats, and grave because Orpiadas services were no longer needed. Thus, Orpiada filed a
coercion werefiled against the petitioners. The union, through its President complaint against petitioner for illegal dismissal and failure to pay the 13 th
Cecile de Ocampo, requested the Regional Director of DOLE, to intervene in month pay.
the existing dispute with management. The respondent Commission rendered ISSUE:
a decision declaring the strikes staged illegal. W/N an ER-EE relationship existed between the bank and respondent
Issue: Whether or not there is a legal basis for declaring the loss of Yes. In the case at bar, Orpiada is not previously selected by the bank but
employment status by petitioners on account of the strike in respondent was assigned to work by CESI. The selection of Orpiada by CESI, was however
Company. subject to the acceptance of the bank. With respect to the payment of
Orpiadas wages, the bank remitted to CESI the daily rate or Orpiada and
Held: Yes. The Solicitor General claims that it is undisputed that the union CESI pays the latter his wages. He was also listed in the payroll of CESI with
resorted to illegal acts during the strike arguing that private respondents SSS deduction. In respect of the power of dismissal, the bank requested CESI
personnel manager specifically identified the union officers and members to withdraw Orpiadas assignment, which resulted to the latters termination.
who committed the prohibited acts and actively participated therein. With regards to power of control, Orpiada performed his functions within the
Ratio: The law on the matter is Article 264 (a) of the Labor Code, to wit: banks premises and not in CESA/Payment of wages and power of dismissal
Article 264. (a) Prohibited activities. (a) exist between CESI and Orpiada. However, selection and control exist
No strike or lockout shall be declared after assumption of jurisdiction by the between Orpiada and the bank. Thus, it is necessary to determine the
President or the Minister or after certification or submission of the dispute to relationship between the bank and CESI, whether the latter is a job
compulsory or voluntary arbitration or during the pendency of cases (independent) contactor or a labor-only contracting. In the present case, the
involving the same grounds for the strike or lockout. undertaking of CESI in favor of the bank was not the performance of a
Any worker whose employment has been terminated as a consequence of an specific job, but to produce its client the bank with a certain number of
unlawful lockout shall be entitled to reinstatement with full backwages. Any persons to work as messengers. Thus, Orpiada utilized the premises and
union officer who knowingly participates in an illegal strike and any worker or office equipment of the bank and not of CESI. Orpiada worked in the bank for
union officer who knowingly participates in the commission of illegal acts a period of 16 months. Under the Labor Code, any employee who has
during a strike may be declared to have lost his employment status rendered at least 1 year, whether continuous or not, shall be considered as a
The Solicitor General maintains that the illegality of the strike likewise stems regular employee. Therefore, CESI was only engaged in a labor-only
from the failure of the petitioners to honor the certification order and heed contracting with petitioner and Orpiada. As a result, petitioner is liable to
the return-to-work order issued by the Secretary of Labor. Opiada as if Opiada had been directly employer by the bank. Wherefore,
Unrebutted evidence shows that the individual petitioners defied the return- petition of certiorari is denied.
to-work order of the Secretary of Labor. Hence, the termination of the
services of the individual petitioners is justified on this ground alone.
alleged project employee are vital and necessary to the business
Maraguinot v. NLRC of employer The tasks of petitioners in loading movie equipment and
returning it to VIVAs warehouse and fixing the lighting system were vital,
FACTS: necessary and indispensable to the usual business or trade of the employer.
Petitioner maintains that he was employed by respondents as part of the Wherefore, petition is granted.
filming crew. He was later promoted as an electrician. Petitioners tasks
contained of loading movie equipment in the shoothing area. Petitioners EMPERMACO B. ABANTE, JR., petitioner, vs. LAMADRID BEARING &
sought the assistance of their supervisor, Cesario, to facilitate their request PARTS CORP. and JOSE LAMADRID, President, respondents.
that respondents adjust their salary in accordance with the minimum wage [G.R. No. 159890 May 28, 2004]
law. Mrs. Cesario informed petitioners that del Rosario would agree to
increase their salary only if they signed a blank employment contract. As FACTS: Petitioner was a salesman of respondent company earning a
petitioner refused to sign, respondents forced Enero (the other petitioner who commission of 3% of the total paid up sales covering the whole area of
worked as a crew member) to go on leave. However, when he reported to Mindanao. Aside from selling, he was also tasked with collection. Respondent
work, respondent refused to take him back. Maraguinot was dropped from the corporation through its president, often required Abante to report to a
company payroll but when he returned, he was again asked to sign a blank particular area and occasionally required him to go to Manila to attend
employment contract, and when he still refused, respondents terminated his conferences. Later on, bad blood ensued between the parties due to some
services. Petitioners thus sued for illegal dismissal. Private respondents assert bad accounts that Lamadrid forced petitioner to cover. Later petitioner found
that they contract persons called producers to produce or make movies for out that respondent had informed his customers not to deal with petitioner
private respondents and contend that petitioners are project employees of since it no longer recognized him as a commission salesman. Petitioner filed a
the associate producers, who act as independent contractors. Thus, there is complaint for illegal dismissal with money claims against respondent
no ER-EE relationship. However, petitioners cited that their performance of company and its president, Jose Lamadrid. By way of defense, respondents
activities is necessary in the usual trade or business of respondents and their countered that petitioner was not its employee but a freelance salesman on
work in continuous. commission basis.
W/N ER-EE relationship exists ISSUE: Whether or not petitioner, as a commission salesman, is an employee
HELD: of respondent corporation.
Yes.With regards to VIVAs contention that it does not make movies but
merely distributes motion pictures, there is no sufficient proof to prove this HELD: To determine the existence of an employee-employer relationship, we
contention. In respect to respondents allegation that petitioners are project apply the four fold test: 1) the manner of selection and engagement; (2) the
employees, it is a settled rule that the contracting out of labor is allowed only payment of wages; (3) the presence or absence of the power of dismissal;
in case of job contracting. However, assuming that the associate producers and (4) the presence or absence of the power of control. Applying the
are job contactors, they must then be engaged in the business of making aforementioned test, an employer-employee relationship is notably absent in
motion pictures. Associate producers must have tools necessary to make this case. It is true that he was paid in commission yet no quota was imposed
motion pictures. However, the associate producers in this case have none therefore a dismal performance would not warrant a ground for dismissal.
of these. The movie-making equipment are supplied to the producers and There was no specific office hours he was required to observe. He was not
owned by VIVA. Thus, it is clear that the associate producer merely leases the designated to conduct services at a particular area or time. He pursued his
equipment from VIVA. In addition, the associate producers of VIVA cannot be selling without interference or supervision from the company. The company
considered labor-only contractors as they did not supply, recruit nor hire the did not prescribe the manner of selling merchandise. While he was
workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited crew sometimes required to report to Manila, these were only intended to guide
members. Thus, the relationship between VIVA and its producers or associate him. Moreover, petitioner was free to offer his services to other companies.
producers seems to be that of agency. With regards to the issue of illegal Art. 280 is not a crucial factor because it only determines two kinds of
dismissal, petitioners assert that they were regular employees who were employees. It doen;t apply where there is no employer-employee relationship.
illegally dismissed. Petitioners in this case had already attained the status of While the term commission under Article 96 of the LC was construed as being
regular employees in view of VIVAs conduct. Thus, petitioners are entitled to included in the term wage, there is no categorical pronouncement that the
back wages. A project employee or a member of a work pool may acquire the payment of commission is conclusive proof of the existence of an employee-
status of a regular employee when: a. there is a continuous rehiring of project employer relationship. The decision of the CA is affirmed.
employees even after a cessation of project b. the tasks performed by the
GREGORIO V. TONGKO, vs. THE MANUFACTURERS LIFE INSURANCE Petitioner Dealco Farms is a corporation engaged in the business of
CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS G.R. No. 167622 importation, production, fattening and distribution of live cattle for sale to
June 29, 2010 meat dealers, meat traders, meat processors, canned good manufacturers
and other dealers in Mindanao and in Metro Manila. Petitioner imports cattle
FACTS: by the boatload from Australia into the ports of General Santos City, Subic,
Petitioner Gregorio Tongko entered into a Career Agents Agreement with Batangas, or Manila. In turn, these imported cattle are transported to, and
respondent Manulife. As an agent, his duties consisted of, among others, housed in, petitioners farms in Polomolok, South Cotabato, or in Magalang,
canvassing for applications for group policies and other products of the Pampanga, for fattening until the cattle individually reach the market weight
company. Subsequently, Tongko was named unit manager, branch manager, of 430 to 450 kilograms.Respondents Albert Caban and Chiquito Bastida were
and regional sales manager. But when he failed to comply with policies of hired by petitioner on June 25, 1993 and October 29, 1994, respectively, as
Manulife, his Agency Agreement was terminated. Tongko filed a complaint escorts or "comboys" for the transit of live cattle from General Santos City to
with the NLRC Arbitration Branch. He essentially alleged despite the clear Manila. Respondents work entailed tending to the cattle during
terms of the letter terminating his Agency Agreement that he was Manulifes transportation. It included feeding and frequently showering the cattle to
employee before he was illegally dismissed. The labor arbiter decreed that no prevent dehydration and to develop heat resistance. On the whole,
employer-employee relationship existed between the parties. However, the respondents ensured that the cattle would be safe from harm or death
NLRC reversed the labor arbiters decision on appeal. When the case went to caused by a cattle fight or any such similar incident. Upon arrival in Manila,
the CA, it the cattle are turned over to and received by the duly acknowledged buyers
sustained the labor Arbiters decision. Manulife asserts that the labor or customers of petitioner, at which point, respondents work ceases. For
tribunals have no jurisdiction over Tongkos claim as he was not its employee every round trip travel which lasted an average of 12 days, respondents were
as characterized in the four-fold test. each paid P1,500.00. The 12-day period is occasionally extended when
petitioners customers are delayed in receiving the cattle. In a month,
ISSUE: respondents usually made two trips. On August 19, 1999, respondents were
Has the labor arbiter jurisdiction over his complaint for illegal dismissal? told by Dealcos hepe de viaje that their replacement had been effected
HELD: immediately, but no reason was given for their replacement. Respondents
No. Given the anemic state of the evidence, particularly on the requisite attempted to meet with petitioner but failed. Petitioner denies the existence
confluence of the factors that would show an employer-employee of an employer-employee relationship with respondents, claiming that: (a)
relationship, the court cannot conclusively find that the relationship exists in respondents are independent contractors who offer "comboy" services to
the present case, even if such relationship only refers to Tongkos additional various shippers and traders of cattle, not only to petitioner; (b) in the
functions. While a rough deduction can be made, the answer will not be fully performance of work on board the ship, respondents are free from the control
supported by the substantial evidence needed. Under this legal situation, the and supervision of the cattle owner since the latter is interested only in the
only conclusion that can be made is that the absence of evidence showing result thereof; (c) in the alternative, respondents can only be considered as
Manulifes control over Tongkos contractual duties points to the absence of casual employees performing work not necessary and desirable to the usual
any employer-employee relationship between Tongko and Manulife. In the business or trade of petitioner, i.e., cattle fattening to market weight and
context of the established evidence, Tongko remained an agent all along; production; and (d) respondents likewise failed to complete the one-year
although his subsequent duties made him a lead agent with leadership role, service period, whether continuous or broken, set forth in Article 280 of the
he was nevertheless only an agent whose basic contract yields no evidence Labor Code, as petitioners shipments were substantially reduced in 1998-
of means-and-manner control. In the case, it is a matter that the labor 1999, thereby limiting the escort or "comboy" activity for which respondents
tribunals cannot rule upon in the absence of an employer-employee were employed.
relationship. Jurisdiction over the matter belongs to the courts applying the
laws of insurance, agency and contracts. ISSUE:

Whether or not an employer-employee relationship existed between

DEALCO FARMS, INC. vs. NATIONAL LABOR RELATIONS COMMISSION petitioner and respondents and therefore the latters termination was illegal.
GR No. 153192 January 30, 2009 HELD:

FACTS: Complainants task of escorting the livestock shipped to Manila, taking care
of the livestock in transit, is an activity which is necessary and desirable in SSC promulgated a decision rendering that Laudato is a regular employee of
the usual business or trade of respondent. It is of judicial notice that the bulk Royal Star Marketing and entitled to social security contributions. Lazaro filed
of the market for livestock of big livestock raisers such as respondent is in a petition for review before the CA where CA ruled that Laudato was an
Manila. Hogs do not swim, they are shipped. The caretaker is a component of employee of Royal Star Marketing. This petition before the Court assails same
the business, a part of the scheme of the operation. More, it also appears that arguments raised by Lazaro in SSC. She raised that Laudato was not an
respondents had rendered service for more than one year doing the same employee of Royal Star Marketing since Royal Star had no control over the
task repeatedly, thus, even assuming they were casual employees they may activities of Laudato.
be considered regular employees with respect to the activity in which they
were employed and their employment shall continue while such activity Issue: Whether or not Laudato was a regular employee of Royal Star
exists (last par. of Art. 280). The presence of the four (4) elements in the Marketing and thus, entitled to social security contributions.
determination of an employer-employee relationship has been clearly
established by the facts and evidence on record, starting with the admissions Ruling: It is an accepted doctrine that for the purposes of coverage under
of petitioner who acknowledged the engagement of respondents as escorts of the Social Security Act, the determination of employer-employee relationship
their cattles shipped from General Santos to Manila, and the compensation of warrants the application of the control test, that is, whether the employer
the latter at a fee of P1,500.00 per trip. The element of control, controls or has reserved the right to control the employee, not only as to the
jurisprudentially considered the most essential element of the four, has not result of the work done, but also as to the means and methods by which the
been demolished by any evidence to the contrary. The branch has noticed same is accomplished.
that the preparation of the shipment of cattle, manning and feeding them
while in transit, and making a report upon their return to General Santos that The SSC, applying the control test found that Laudato was an employee of
the cattle shipped and which reached Manila actually tallied were all Royal Star. The Court agrees with the findings of the SSC and the CA. The fact
indicators of instructions, supervision and control by [petitioner] on that Laudato was paid by way of commission does not preclude the
[respondents] performance of work as escorts for which they were hired. This establishment of an employer-employee relationship.
we agree on all fours. The livestock shipment would cost thousands of pesos
and the certainty of it reaching its destination would be the only thing any In the case of Grepalife v. Judico, the Court upheld the existence of an
operator would consider at all time and under all circumstances. It is illogical employer-employee relationship between the insurance company and its
for [petitioner] to argue that the shipment was not necessary or desirable to agents, despite the fact that the compensation that the agents on
their business, as their business was mainly livestock production, because commission received was not paid by the company but by the investor or the
they were undeniably the owners of the cattle escorted by respondents. person insured. The relevant factor remains, as stated earlier, whether the
Should losses of a shipment occur due to respondents neglect these would "employer" controls or has reserved the right to control the "employee" not
still be petitioners loss, and nobody elses. only as to the result of the work to be done but also as to the means and
methods by which the same is to be accomplished.
ANGELITO LAZARO vs. SOCIAL SECURITY COMMISSION Neither does it follow that a person who does not observe normal hours of
435 SCRA 472 (2004) work cannot be deemed an employee.

Facts: Respondent Rosalina M. Laudato filed a petition before the SSC for In the case of Cosmopolitan Funeral Homes, Inc. v. Maalat, the employer
social security coverage and remittance of unpaid monthly social security similarly denied the existence of an employer-employee relationship, as the
contributions against her three (3) employers. Among the respondents was claimant according to it, was a supervisor on commission basis who did not
herein petitioner Angelito L. Lazaro, proprietor of Royal Star Marketing (Royal observe normal hours of work. This Court declared that there was an
Star), which is engaged in the business of selling home appliances. employer-employee relationship, noting that [the] supervisor, although
compensated on commission basis, [is] exempt from the observance of
Lazaro denied that Laudato was an employee but instead claimed that she normal hours of work for his compensation is measured by the number of
was an agent of the company. Lazaro also maintained that she was not sales he makes.
mandated to work of definite work hours and thus not deemed to be a regular
employee of Royal Star Marketing, the company of Lazaro.