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Fonterra Brand Phils, Inc.

vs Largado and Estrellado


Case Digest GR 205300 March 18 2015
Full Text
Facts:
Fonterra contracted the services of Zytron to provide for trade merchandising representatives (TMRs) in the
marketing and promotion of its milk and dairy products. Among those TMRs whose services were engaged
are Largado and Estrellado, who are the respondents in this case. After 4 years, Fonterra terminated its
contract with Zytron and entered into an agreement for manpower supply with AC Sicat. Desirous of
continuing their work as TMRs in Fonterra, Largado and Estrellado submitted their job application with AC
Sicat, a legitimate job contracting company. AC Sicat hired their services as TMRs for a term of 5 months.

When their 5-month contract with AC Sicat were about to expire, they allegedly sought renewal thereof,
which was allegedly refused. This prompted them to file for complaints of illegal dismissal, regularization,
nonpayment of service incentive leave, 13th month pay, and actual and moral damages against Fonterra,
Zytron and AC Sicat.

Issue 1: W/N Largado and Estrellado were illegally terminated by Zytron


No. When Largado and Estrella refused to renew their contract with Zytron by applying with AC Sicat, they
effectively resigned from Zytron. Hence, they were not illegally dismissed because they voluntary
terminated their employment with the latter.
Issue 2: W/N Largado and Estrellado were illegally terminated by AC Sicat
No. There is no illegal dismissal to speak of since AC Sicat is a legitimate job contractor and their termination
is merely brought about by the expiration of their employment contracts with AC Sicat.
First, Largado and Estrellado were hired as fixed-term or project employees of AC Sicat. The determining
factor of such employment is not the duty of the employee but the day certain agreed upon by the parties
for the commencement and termination of the employment relationship. Second, the non-renewal of their
contracts by AC Sicat is a management prerogative, and failure of respondents to prove that such was done in
bad faith militates against their contention that they were illegally dismissed.

Hence, the expiration of their contract with AC Sicat simply caused the natural cessation of their fixed-term
employment thereat.
PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and
JANDELEON JUEZAN

G.R. No. 179652 March 6, 2012 VELASCO, JR.,


J
.: ARTICLE 128
DOCTRINE:
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to
make a determination as to the existence of an employer-employee relationship in the exercise
of its visitorial and enforcement power, subject to judicial review, not review by the NLRC.

FACTS:
Jandeleon Juezan filed a complaint against Peoples Broadcasting Service (Bombo) with the
DOLE Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive
leave, 13th month pay, among others. After the conduct of summary investigations, and after
the parties submitted their position papers, the DOLE Regional Director found that Juezan was
an employee of Bombo, and was entitled to his money claims. Bombo sought reconsideration
of the Directors Order, but failed.
The Acting DOLE Secretary dismissed Bombos appeal. When the matter was brought before
the CA, where Bombo claimed that it had been denied due process, it was held that Bombo was
accorded due process as it had been given the opportunity to be heard, and that the DOLE
Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article
129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had
been repealed by Republic Act No. (RA) 7730.

SC reversed the CA Decision and the complaint against Bombo was dismissed. The Court found
that there was no employer-employee relationship between Bombo and Juezan. It was held
that while the DOLE may make a determination of the existence of an employer-employee
relationship, this function could not be co-extensive with the visitorial and enforcement power
provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The NLRC was held to be
the primary agency in determining the existence of an employer-employee relationship. From
this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of Decision (with
Leave of Court). The PAO sought to clarify as to when the visitorial and enforcement power of
the DOLE be not considered as co-extensive with the power to determine the existence of an
employer-employee relationship. The SC revisits its former conclusion.

ISSUE:
Whether DOLE can make a determination of the existence of employer-employee relationship.

SC RULING: YES.
No limitation in the law was placed upon the power of the DOLE to determine the existence of
an employer-employee relationship. No procedure was laid down where the DOLE would only
make a preliminary finding, that the power was primarily held by the NLRC. The law did not say
that the DOLE would first seek the NLRCs determination of the existence of an employer-
employee relationship, or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to
determine whether or not an employer-employee relationship exists, and from there to decide
whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as
amended by RA 7730. The determination of the existence of an employer-employee
relationship by the DOLE must be respected. The expanded visitorial and enforcement power of
the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the
simple expedient of disputing the employer-employee relationship, force the referral of the
matter to the NLRC. If the DOLE makes a finding that there is an existing employer-employee
relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would
have no jurisdiction only if the employer-employee relationship has already been terminated,
or it appears, upon review, that no employer-employee relationship existed in the first place. If
a complaint is brought before the DOLE to give effect to the labor standards provisions of the
Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing
employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If
the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly
with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for
reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor
Code. If a complaint is filed with the NLRC, and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may
still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.

Chavez vs Bonto-Perez
Labor Standards Standard Employment Contract for Entertainers Laches

Chavez is a dancer who was contracted by Centrum Placement & Promotions Corporation to
perform in Japan for 6 months. The contract was for $1.5k a month, which was approved by
POEA. After the approval of said contract, Chavez entered into a side contract reducing her
salary with her Japanese employer through her local manager-agency (Jaz Talents Promotion).
The salary was reduced to $500 and $750 was to go to Jaz Talents. In February 1991 (two years
after the expiration of her contract), Chavez sued Centrum Placement and Jaz Talents for
underpayment of wages before the POEA.

The POEA ruled against her. POEA stated that the side agreement entered into by Chavez with
her Japanese employer superseded the Standard Employment Contract; that POEA had no
knowledge of such side agreement being entered into; that Chavez is barred by laches for
sleeping on her right for two years.

ISSUE: Whether or not Chavez is entitled to relief.

HELD: Yes. The SC ruled that the managerial commission agreement executed by Chavez to
authorize her Japanese Employer to deduct her salary is void because it is against our existing
laws, morals and public policy. It cannot supersede the standard employment contract
approved by the POEA with the following stipulation appended thereto:

It is understood that the terms and conditions stated in this Employment Contract are in
conformance with the Standard Employment Contract for Entertainers prescribed by the POEA
under Memorandum Circular No. 2, Series of 1986. Any alterations or changes made in any part
of this contract without prior approval by the POEA shall be null and void;

The side agreement which reduced Chavezs basic wage is null and void for violating the POEAs
minimum employment standards, and for not having been approved by the POEA. Here, both
Centrum Placement and Jaz Talents are solidarily liable.

Laches does not apply in the case at bar. In this case, Chavez filed her claim well within the
three-year prescriptive period for the filing of money claims set forth in Article 291 of the Labor
Code. For this reason, laches is not applicable.

SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner,

vs.

JOY C. CABILES, Respondent.

G.R. No. 170139 August 5, 2014

FACTS:

Petitioner, Sameer Overseas Placement Agency, Inc., is a recruitment and placement


agency.

Respondent Joy Cabiles was hired thus signed a one-year employment contract for a
monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal, Co. Ltd.
(Wacoal) on June 26, 1997. She alleged that in her employment contract, she agreed to work as
quality control for one year. In Taiwan, she was asked to work as a cutter.

Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that she should immediately report to their
office to get her salary and passport. She was asked to prepare for immediate repatriation.
Joy claims that she was told that from June 26 to July 14, 1997, she only earned a total of
NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her plane ticket to Manila.

On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC against
petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LAs decision. CA affirmed
the ruling of the National Labor Relations Commission finding respondent illegally dismissed
and awarding her three months worth of salary, the reimbursement of the cost of her
repatriation, and attorneys fees

ISSUE:

Whether or not Cabiles was entitled to the unexpired portion of her salary due to
illegal dismissal.

HELD:

YES. The Court held that the award of the three-month equivalent of respondents
salary should be increased to the amount equivalent to the unexpired term of the employment
contract.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., this court
ruled that the clause or for three (3) months for every year of the unexpired term, whichever
is less is unconstitutional for violating the equal protection clause and substantive due process.

A statute or provision which was declared unconstitutional is not a law. It confers no


rights; it imposes no duties; it affords no protection; it creates no office; it is inoperative as if it
has not been passed at all.

The Court said that they are aware that the clause or for three (3) months for every
year of the unexpired term, whichever is less was reinstated in Republic Act No. 8042 upon
promulgation of Republic Act No. 10022 in 2010.

Songco vs. NLRC [G.R. No. L-50999 March 23, 1990]

Facts:
Zuellig (M) Inc. filed with the Department of Labor (Regional Office No. 4) a clearance to
terminate the services of petitioners Jose Songco, Romeo Cipres and Amancio Manuel due to
alleged financial losses. However, the petitioners argued that the company is not suffering any
losses and the real reason for their termination was their membership in the union. At the last
hearing of the case, the petitioner manifested that they no longer contesting their dismissal,
however, they argued that they should be granted a separation pay. Each of the petitioners was
receiving a monthly salary of P40, 000.00 plus commissions for every sale they made. Under the
CBA entered by the Zuellig Inc. and the petitioners, in Article XIV, Section 1(a), Any employee,
who is separated from employment due to old age, sickness, death or permanent lay-off not
due to the fault of said employee shall receive from the company a retirement gratuity in an
amount equivalent to one months salary per year of service. One month of salary as used in
this paragraph shall be deemed equivalent to the salary at date of retirement; years of service
shall be deemed equivalent to total service credits, a fraction of at least six months being
considered one year, including probationary employment. Other basis for petitioners
contention are Article 284 of the Labor Code with regards to reduction of personnel and
Sections 9(b) and 10 of Rule 1, Book VI of the Rules Implementing the Labor Code. The Labor
Arbiter rendered his decision directing the company to pay the complainants separation pay
equivalent to their one month salary (exclusive of commissions,allowances, etc.) for every year
of service that they have worked with the company. The petitioners appealed to the NLRC but it
was denied. Petitioner Romeo Cipres filed a Notice of Voluntary Abandonment and Withdrawal
of petition contending that he had received, to his full and complete satisfaction, his separation
pay. Hence, this petition.

Issue:
Whether or not earned sales commissions and allowancesshould be included in the monthly
salary of petitioners for the purpose of computation of their separation pay.

Held:
The petition is granted. Petitioners contention that in arriving at the correct and legal amount
of separation pay due to them, whether under the Labor Code or the CBA, their basic salary,
earned sales commissions and allowances should be added together. Insofar as whether the
allowances should be included in the monthly salary of petitioners for the purpose of
computation of their separation pay is concerned, this has been settled in the case of Santos vs.
NLRC, 76721, in the computation of back wages and separation pay, account must be taken not
only of the basic salary of petitioner but also of her transportation and emergency living
allowances. In the issue of whether commission should be included in the computation of their
separation pay, it is proper to define first commission. Blacks Law Dictionary defined
commission as the recompensed, compensation or reward of an agent, salesman, executor,
trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the
amount of his transactions or on the profit to the principal. The nature of the work of a
salesman and the reason for such type of remuneration for services rendered demonstrate
clearly that the commission are part of petitioners wage and salary. Some salesmen do not
receive any basic salary but depend on commission and allowances or commissions alone, are
part of petitioners wage and salary.

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