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Book Three

Conditions of Employment
(Art. 82- Art. 155)

I. Conditions of Employment: Coverage and Exclusion
 Elements of employment relationship/ General Principles
 Four-fold test:
 Cases of Employer-Employee Relationship:

 Villamaria vs. CA April 19, 2006 (G.R. No. 165881)

- Petition for review assailing the decision and resolution of the CA which set aside the decision of
the NLRC, which in turn affirmed the Decision[4] of the Labor Arbiter dismissing the complaint
filed by respondent Jerry V. Bustamante.
- Petitioner Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship
engaged in assembling passenger jeepneys with a public utility franchise to operate along
the Baclaran-Sucat route. By 1995, Villamaria stopped assembling jeepneys and retained only
nine, four of which he operated by employing drivers on a boundary basis. One of those drivers
was respondent Bustamante who drove the jeepney with Plate No. PVU-660. Bustamante
remitted P450.00 a day to Villamaria as boundary and kept the residue of his daily earnings
as compensation for driving the vehicle. In August 1997, Villamaria verbally agreed to sell
the jeepney to Bustamante under the boundary-hulog scheme, where Bustamante would
remit to Villarama P550.00 a day for a period of four years; Bustamante would then become
the owner of the vehicle and continue to drive the same under Villamarias franchise. It was also
agreed that Bustamante would make a downpayment of P10,000.00.
- The parties agreed that if Bustamante failed to pay the boundary-hulog for three days, Villamaria
Motors would hold on to the vehicle until Bustamante paid his arrears, including a penalty
of P50.00 a day; in case Bustamante failed to remit the daily boundary-hulog for a period of one
week, the Kasunduan would cease to have legal effect and Bustamante would have to return the
vehicle to Villamaria Motors.
- Under the Kasunduan, Bustamante was prohibited from driving the vehicle without prior
authority from Villamaria Motors. Thus, Bustamante was authorized to operate the vehicle to
transport passengers only and not for other purposes. He was also required to display an
identification card in front of the windshield of the vehicle; in case of failure to do so, any fine that
may be imposed by government authorities would be charged against his account. Bustamante
further obliged himself to pay for the cost of replacing any parts of the vehicle that would be lost
or damaged due to his negligence. In case the vehicle sustained serious damage, Bustamante
was obliged to notify Villamaria Motors before commencing repairs. Bustamante was not allowed
to wear slippers, short pants or undershirts while driving. He was required to be polite and
respectful towards the passengers. He was also obliged to notify Villamaria Motors in case the
vehicle was leased for two or more days and was required to attend any meetings which may be
called from time to time. Aside from the boundary-hulog, Bustamante was also obliged to pay
for the annual registration fees of the vehicle and the premium for the vehicles
comprehensive insurance. Bustamante promised to strictly comply with the rules and
regulations imposed by Villamaria for the upkeep and maintenance of the jeepney.
- Bustamante continued driving the jeepney under the supervision and control of Villamaria. As
agreed upon, he made daily remittances of P550.00 in payment of the purchase price of the
vehicle. Bustamante failed to pay for the annual registration fees of the vehicle, but
Villamaria allowed him to continue driving the jeepney.
- On July 24, 2000, Villamaria took back the jeepney driven by Bustamante and barred the
latter from driving the vehicle.
- On August 15, 2000, Bustamante filed a Complaint[7] for Illegal Dismissal against Villamaria and
his wife Teresita.
- In his Position Paper,[8] Bustamante alleged that he was employed by Villamaria in July 1996
under the boundary system, where he was required to remit P450.00 a day. After one year of
continuously working for them, the spouses Villamaria presented the Kasunduan for his

00. the relationship between him and Villamaria was dual: that of vendor-vendee and employer-employee. the alternator was gone. the jeepney figured in an accident and its license plate was confiscated. while the power to dismiss was not mentioned in the Kasunduan. Villamarias directives (to drive carefully.000.00 in daily installments and that he would thereafter continue driving the vehicle along the same route under the same franchise. Under the Kasunduan. and was assured that it would be done. the CA reversed and set aside the NLRC decision.00 downpayment and the vehicles annual registration fees. . However. and to inform him about provincial trips. The CA ratiocinated that Villamarias exercise of control over Bustamantes conduct in operating the jeepney is inconsistent with the formers claim that he was not engaged in the transportation business. [19] insisting that the Kasunduan did not extinguish the employer-employee relationship between him and Villamaria.  The appellate court ruled that the Labor Arbiter had jurisdiction over Bustamantes complaint. Instead of complying with his obligations.[10] the spouses Villamaria admitted the existence of the Kasunduan. Due to negotiations with the apprehending authorities.00 a day. While he did not receive fixed wages. park the vehicle in his garage. alleging that the NLRC erred . In view of Villamarias supervision and control as employer. . It explained that the existence of an employment relationship did not depend on how the worker was paid but on the presence or absence of control over the means and method of the employees work. 2000. Paraaque Cityfor two weeks. The Villamaria spouses took the jeepney from him on July 24. the juridical relationship between Bustamante and Villamaria was that of vendor and vendee. When the vehicle was finally retrieved. he was later arrested and his drivers license was confiscated because apparently. which prompted them to issue the Paalaala.000. he kept only the excess of the boundary-hulog which he was required to remit daily to Villamaria under the agreement. There was no evidence that petitioner was allowed to let some other person drive the jeepney. Bustamante told her: Di kunin ninyo. The NLRC rendered judgment[20] dismissing the appeal for lack of merit. hence.) was a means to control the way in which Bustamante was to go about his work.[22] . In its Decision[25] dated August 30. don decent attire. 2004. 2003. When the security guard at the gasoline station requested that the vehicle be retrieved and Teresita Villamaria asked Bustamante for the keys. the tires were worn. it did not mean that Villamaria could not exercise it. the Labor Arbiter rendered judgment [17] in favor of the spouses Villamaria and ordered the complaint dismissed. Bustamante maintained that he remained an employee because he was engaged to perform activities which were necessary or desirable to Villamarias trade or business. etc. Bustamante stopped making his remittances despite his daily trips and even brought the jeepney to the province without permission. 2002. and he was no longer allowed to drive the vehicle since then unless he paid them P70. Bustamante elevated the matter to the CA via Petition for Certiorari. wear an identification card. Bustamante filed a Motion for Reconsideration. the jeepney was not impounded. . with the assurance that he (Bustamante) would own the jeepney by March 2001 after paying P550. the fact that the boundary represented installment payments of the purchase price on the jeepney did not remove the parties employer-employee relationship. signature. On March 15. In this case. Worse. He further narrated that in July 2000. he informed the Villamaria spouses that the surplus engine of the jeepney needed to be replaced. the replacement engine that was installed was taken from a stolen vehicle. the Labor Arbiter had no jurisdiction over the complaint. In their Position Paper. but alleged that Bustamante failed to pay the P10.  The NLRC ruled that under the Kasunduan. They further alleged that Bustamante eventually failed to remit the requisite boundary-hulog of P550. . Bustamante appealed the decision to the NLRC. which the NLRC resolved to deny on May 30. . and the battery was no longer working.  The CA further held that. Bustamante even abandoned the vehicle in a gasoline station in Sucat.

o 4. hours of work. within thirty (30) calendar days after the submission of the case by the parties for decision without extension. exemplary and other forms of damages arising from the employer-employee relations. vests on the Labor Arbiter exclusive original jurisdiction only over the following: x x x (a) Except as otherwise provided under this Code.00) regardless of whether accompanied with a claim for reinstatement. o 5. whether or not the complainant/plaintiff is entitled to any or all of such reliefs. the following cases involving all workers. Unfair labor practice cases. rates of pay. Cases arising from violation of Article 264 of this Code. including questions involving the legality of strikes and lockouts. . nor does it enlarge the cause of action stated or change the legal effect of what is alleged.  The rule is that. now petitioner. those cases that workers may file involving wage. Termination disputes. While the appellate court recognized that a weeks default in paying the boundary- hulog constituted an additional cause for terminating Bustamantes employment. If accompanied with a claim for reinstatement. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. and other terms and conditions of employment. [34] In determining which body has jurisdiction over a case. Social Security. Villamaria. involving an amount exceeding five thousand pesos (P5. Claims for actual.[35]  Article 217 of the Labor Code. as well as. [33] A prayer or demand for relief is not part of the petition of the cause of action.000.. it held that the latter was illegally dismissed. Medicare and maternity benefits. and o 6. o 2. SC’s Ruling: We resolve these issues in the affirmative. arising from employer-employee relationship. Except claims for Employees Compensation. an employer-employee relationship is an indispensable jurisdictional requisite. are determined by the material allegations of the complaint in relation to the law involved and the character of the reliefs prayed for. moral. (c) Cases arising from the interpretation or implementation of collective bargaining agreements. seeks relief from this Court (SC) . the nature of an action and the subject matter thereof. o 3.[36] The jurisdiction of Labor Arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes . and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. all other claims. the better policy is to consider not only the status or relationship of the parties but also the nature of the action that is the subject of their controversy. the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide. as amended. even in the absence of stenographic notes. whether agricultural or non-agricultural: o 1. which court or agency of the government has jurisdiction over the same.  In the foregoing cases. including those of persons in domestic or household service.

a dual juridical relationship was created between petitioner and respondent: that of employer-employee and vendor-vendee. 78720 is AFFIRMED. Indeed. the Court ruled in National Labor Union v.[42] and was analogously applied to govern the relationships between auto-calesa owner/operator and driver. This doctrine was affirmed. under the boundary-hulog scheme incorporated in the Kasunduan. petitioner. The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not sufficient to change the relationship between them.[44] and taxi owner/operator and driver.[45] . the owner/operator exercises control and supervision over the driver. . Costs against petitioner. SP No. being the holder of the certificate of public convenience. . that is. as the owner of the vehicle and the holder of the franchise. The failure of the employer to discharge this burden means that the dismissal is not justified and that the employee is entitled to reinstatement and back wages. The management of the business is still in the hands of the owner/operator. the employer-employee relationship would likewise be terminated unless petitioner would allow respondent to continue driving the jeepney on a boundary basis of P550. the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator.R. Bernardo[41] and Lantaco.[37] Not every dispute between an employer and employee involves matters that only the Labor Arbiter and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. Sr. by seeing to it that the route provided in his franchise. Under this system. in Magboo v. The decision of the Court of Appeals in CA-G. well-settled is the rule that. v. petitioner retained ownership of the jeepney although its material possession was vested in respondent as its driver. We agree with the ruling of the CA that. in a business establishment. the petition is DENIED. the latters daily earnings are remitted to the owner/operator less the excess of the boundary which represents the drivers compensation. arising from an employer-employee relationship which can only be resolved by reference to the Labor Code. the case falls within the exclusive jurisdiction of the Labor Arbiter and the NLRC even though a claim for damages might be asserted as an incident to such claim. the employer has the burden of proving that the dismissal of an employee is for a just cause. Moreover. Under the boundary-hulog scheme. .[46] . who. IN LIGHT OF ALL THE FOREGOING. Dinglasan[40] that the jeepney owner/operator-driver relationship under the boundary system is that of employer- employee and not lessor-lessee. Moreover. As early as 1956. The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver. must see to it that the driver follows the route prescribed by the franchising and regulatory authority. under similar factual settings.00 daily installment payment for a week. The Kasunduan did not extinguish the employer-employee relationship of the parties extant before the execution of said deed. Actions between employers and employees where the employer-employee relationship is merely incidental is within the exclusive original jurisdiction of the regular courts. and the rules promulgated with regard to the business operations. other labor statutes or their collective bargaining agreement. the agreement would be of no force and effect and respondent would have to return the jeepney to petitioner.[39] . .[38] When the principal relief is to be granted under labor legislation or a collective bargaining agreement. and the rules and regulations of the Land Transportation Regulatory Board are duly complied with. It is unlike in lease of chattels where the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. Indubitably. Llamas. an identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.00 daily despite the termination of their vendor- vendee relationship. In case respondent failed to make his P550. is entitled to exercise supervision and control over the respondent.[43] bus owner/operator and conductor.[57] .

suspension and dismissal. The complaint for unfair labor practice1 for violation of section 4 (a) subsections (4) and (6) of the Industrial Peace Act." . does not dispute the respondent courts basic ruling that the fifteen drivers and helpers are in truth and in fact its employees and that its making use of its salesmen and propagandists. but petitioner refused to do so. affirmed by its resolution en banc of April 11. "The salary of the driver or helper also comes from the respondent corporation in the form of 'driver allowance' which is appropriated for the purpose. Of course. categorically held petitioners disclaimer of the employee status of drivers and 17 helpers to be baseless and untenable as follows: "In accordance with the "memorandum of instructions. It therefore rendered the following judgment against petitioner: . petitioner denied the unfair labor practice imputed to it and countered that the fifteen drivers and helpers were not its employees. employed as drivers and helpers of petitioner. and not separate and independent employees of its salesmen and propagandists. In answer. SC’s Ruling: . was filed by the acting prosecutor of respondent court against petitioner. nevertheless. as the ostensible "employers" of the drivers and helpers was in effect but an elaborate artifice to deprive the drivers and helpers of their status as employees of petitioner.R. it could not be denied that it is the respondent corporation that pays the wages and salaries of the driver or helper. entitled to enjoy all the privileges. . This allowance is given to the salesman or propagandist who in turn pays the same to the driver or helper for salaries or wages. Petitioner in this appeal. CIR (G. Appeal by certiorari from respondent court's decision in an unfair labor practice case that the fifteen drivers and helpers not recognized by petitioners are in truth and in fact its employees. therefore. and that the union had asked petitioner to negotiate with respect to said fifteen drivers and helpers who were being excluded from the benefits of their subsisting collective bargaining agreement. The union prayed for a desistance order and that petitioner be ordered to bargain collectively in good faith and to grant the drivers and helpers the same benefits and privileges extended to and enjoyed by all its other employees. ." which the respondent corporation issues to the salesman or propagandist. Nevertheless. the authority of the saleman or propagandist to employ the driver or helper emanates from the respondent corporation. but separate and independent employee's of its salesmen and propagandists who exercised discretion and control over their selection.  Alhambra Industries vs. rights and benefits provided for all its other regular employees under its collective bargaining agreement with respondent union. . the respondent corporation is the "employer" of the driver or helper and not the salesman or propagandist who is merely expressly authorized by the former to engage such services. Respondent court in its decision. No. It is. were being discriminated against by petitioner's not affording the the benefits and privileges enjoyed by all the other employees for no justifiable reason other than their union membership. employment. compensation." Exhibit "24. . apparent that in truth and in fact. L-15984) . rights and benefits provided for all other employees under the collective bargaining agreements." . . it is really from here that the latter is authorized by the former to engage the services of a driver or helper. we realize that this mode of paying the salaries or wages of the driver or helper indirectly through the salesman or propagandist will save the respondent corporation the burden of record keeping and other similar indirect costs. The lone error assigned by petitioner in its brief is that respondent court "acted in excess of jurisdiction in entering judgment against petitioner in spite of its finding that the petitioner had not committed any act of unfair labor practice. upon the charges of respondent union that fifteen of the union members. and are therefore entitled retroactively to all the privileges. So that even when the driver or helper does not apply directly to the respondent corporation for the job but to the salesman or propagandist. 1966. From all the foregoing consideration we are convinced that the driver and helper is an "employee" of respondent corporation. It is therefore clear that the terms and conditions of employment of the driver or helper are those fixed and determined by the respondent corporation." .

. On October 6. SC’s Ruling: The contention is without merit. rights and benefits that are given to all the other regular employees retroactive as of the effectivity of the first agreement of March 14. This is a petition to review on certiorari the resolution of the National Labor Relations Commission (NLRC) which affirmed the labor arbiter's decision ordering herein petitioner. ACCORDINGLY. (petitioner) corporation is the "employer" of the driver or helper and not the salesman or propagandist who is merely expressly authorized by the former to engage such services. . to pay him 12 months backwages in the amount of P18.00 and to pay attorney's fees in the amount of P1. as such lawyer. vs. His relationship with those to whom he renders services. . Hydro Resources Contractors Corporation to reinstate Rogelio A." ." The reality.000. 4 but instead remarked that since the grant of employees' benefits hinged on the court's decision on their status as such employees. petitioner corporation hired the private respondent Aban as its "Legal Assistant. 1980. The petitioner contends that its relationship with Aban is that of a client with his lawyer. the judgment appealed from is affirmed. For a lawyer to so argue is not only demeaning to himself (sic). The labor arbiter ruled that Aban was illegally dismissed. In form. can never be considered an employee. Hence. This ruling was affirmed by the NLRC on appeal. The only issue raised by the petitioner is whether or not there was an employer-employee relationship between the petitioner corporation and Aban.800. the petitioner argues that the labor arbiter and NLRC have no jurisdiction over the instant case. its judgment that said drivers and helpers "should be given and/or extended all the privileges. Aban filed a complaint against the petitioner for illegal dismissal. 1989 (GR No.00. this present petition. 1980 because of his alleged failure to perform his duties well." Petitioner's failure to comply with its duty under the collective bargaining agreement to extend the privileges. Aban to his former position without loss of seniority rights. to order the cessation of an unfair labor practice and "take such affirmative action as will effectuate the policies of this Act. Aban received a letter from the corporation informing him that he would be considered terminated effective October 4. . 1966 is lifted and set aside. . can never be governed by the labor laws.  Hydro Resources Corp. 1978. supra. It is its position that "(a) lawyer as long as he is acting as such. 1962 up to the present. . L-62909) . petitioner "could not have been guilty of refusal to bargain in accordance with the Act. The writ of preliminary injunction heretofore issued on May 17. . as long as he is performing acts constituting practice of law. respondent court but discharging its function under section 5(c) of the Act. The petitioner questions the jurisdiction of the public respondents considering the alleged absence of an employer-employee relationship. rights and benefits thereof to the drivers and helpers as its actual employees clearly amounted to the commission of an unfair labor practice." . . On September 4. April 18. On October 24. It is speciously grounded on mere form rather than the realities of the case. respondent court gently treated petitioner's scheme to deprive the fifteen drivers and helpers of their rightful status as employees and did not denounce it as a betrayal of the salutary purpose and objective of the Industrial Peace Act. 1980. With costs against petitioner. however." In ordering. Pagalilaun. but also his profession and to his brothers in the profession." Thus. is that respondent court expressly found that "in truth and in fact. And consequently respondent court properly ordered in.  Petitioner's appeal must be dismissed.

It is not unusual for a big corporation to hire a staff of lawyers as its in-house counsel.. 1989):  This Court has consistently ruled that the determination of whether or not there is an employer-employee relation depends upon four standards:  (1) the manner of selection and engagement of the putative employee. NLRC. The two classes of lawyers often work closely together but one group is made up of employees while the other is not. nurses. .00 attorney's fees. At the same time. April 15.M. exercised control over Aban by defining the duties and functions of his work. This latter duty is not an act of a lawyer in the exercise of his profession but rather a duty for the benefit of the corporation. Pucan 159 SCRA 107 (1988). Consunji. Nuestro. Considering that the private respondent was illegally dismissed from his employment in 1980. Flores v. it may also contract with a law firm to act as outside counsel on a retainer basis.000. No. He also assisted the Personnel Officer in processing appointment papers of employees. A lawyer. January 26. may very well be an employee of a private corporation or even of the government. public relations practitioners. and to reasonable attorney's fees in the amount of P5. (D. .. 7 SCRA 116). No. rank them in its table of organization. As stated in the case of Tabas v. pay them regular salaries. NLRC. he is entitled to reinstatement to his former or similar position without loss of seniority rights. dentists. 1988). The petitioner paid him a basic salary plus living allowance. Luzon Brokerage v. Inc.  (2) the mode of payment of wages.R. Aban was employed by the petitioner to be its Legal Assistant as evidenced by his appointment paper (Exhibit "A"). California Manufacturing Co. Santos v. exercised its power to hire and fire the respondent employee and more important. (City Trust Finance Corp. 143 SCRA 132.000.00 in attorney's fees. This Court is not without a guide in deciding whether or not an employer-employee relation exists between the contending parties or whether or not the private respondent was hired on a retainer basis. Luzon Labor Union. . The above-mentioned facts show that the petitioner paid Aban's wages. the right-of-control test has been held to be the decisive factor. the petitioner will pay him separation pay in lieu of reinstatement. . (Exhibit "B"). Aban was dismissed on his alleged failure to perform his duties well. A similar arrangement may exist as to doctors. Of the four.00. like any other professional. 66890. Should reinstatement not be feasible. WHEREFORE. .000. NLRC. . Metro Drug v. The petitioner is ordered to reinstate the private respondent to his former or a similar position without loss of seniority rights and to pay three (3) years backwages without qualification or deduction and P5. 80680. and other professionals. the petitioner shall pay the private respondent termination benefits in addition to the above stated three years backpay and P5. . the petition is hereby DISMISSED for lack of merit. and otherwise treat them like its other officers and employees.. v.  (3) the presence or absence of a power of dismissal. 157 SCRA 87. and  (4) the presence or absence of a power to control the putative employee's conduct.R. . Should reinstatement prove no longer feasible. Thereafter. 154 SCRA 166. if it is still feasible. (G. et al. v. Aban worked solely for the petitioner and dealt only with legal matters involving the said corporation and its employees. to backwages without qualification or deduction for three years. G.

" with which the petitioners claimed to be affiliated. is less a measure of employer control than an assurance that the work is fairly distributed. 6 . caddies by occupation. all but two of the seventeen petitioners of their own accord withdrew their claim for social security coverage. Commercial Employees Association. the caddies were still employees of the club. the "Philippine Technical. alleged in essence that although the petitioners were employees of the Manila Golf and Country Club. That question appears to have been involved. showing that the Club has not the measure of control over the incidents of the caddies' work and compensation that an employer would possess. That which gave rise to the present petition for review was originally filed with the Social Security Commission (SSC) via petition of seventeen (17) persons who styled themselves "Caddies of Manila Golf and Country Club-PTCCEA" for coverage and availment of benefits under the Social Security Act as amended. . . He may . about to leave the premises of the club where he worked. were allowed into the Club premises to render services as such to the individual members and guests playing the Club's golf course and who themselves paid for such services. leaving Fermin Llamar the lone appellant. The IAC would point to the fact that the Club suggests the rate of fees payable by the players to the caddies as still another indication of the latter's status as employees. The question before the Court here is whether or not persons rendering caddying services for members of golf clubs and their guests in said clubs' courses or premises are the employees of such clubs and therefore within the compulsory coverage of the Social Security System (SSS)." This. In the case before the SSC. Deemed of title or no moment by the Appellate Court was the fact that the caddies were paid by the players. It seems to the Court. A caddy is not required to exercise his occupation in the premises of petitioner. Raymundo Jomok's appeal was dismissed at his instance. they were not the Club's employees. a caddy who is absent when his turn number is called simply losing his turn to serve and being assigned instead the last number for the day. that the intendment of such fact is to the contrary. however. . Fermin Llamar and Raymundo Jomok. 17 . . no matter that the case which produced this ruling had a slightly different factual cast. docketed as SSC Case No. 5443. . It quoted with approval from an American decision 10 to the effect that: "whether the club paid the caddies and afterward collected in the first instance. "PTCCEA" being the acronym of a labor organization. alleging in substance that the petitioners. . that they observed no definite working hours and earned no fixed income. there appears nothing in the record to refute the petitioner's claim that:  (Petitioner) has no means of compelling the presence of a caddy. apparently having involved a claim for workmen's compensation made by a caddy who. The Commission dismissed the petition for lack of merit. the latter had not registered them as such with the SSS. all initiated by or on behalf of herein private respondent and his fellow caddies. that as such caddies. not by the Club. SC’s Ruling: The Court agrees with petitioner that the group rotation system so-called. The petition. and hence. the respondent Club filed answer praying for the dismissal of the petition. Clerical. was hit and injured by an automobile then negotiating the club's private driveway. IAC 237 SCRA 207 . the petitioners were not subject to the direction and control of the Club as regards the manner in which they performed their work. By and large. Subsequently. The case continued. avowedly coming to realize that indeed there was no employment relationship between them and the Club.  Cases of NO Employer-employee Relationship  Manila Golf Club vs. From this Resolution appeal was taken to the Intermediate appellate Court by the union representing Llamar and Jomok. and was eventually adjudicated by the SSC after protracted proceedings only as regards the two holdouts. in three separate proceedings. After the appeal was docketed 5 and some months before decision thereon was reached and promulgated. either directly or peripherally. a domestic corporation.

at the time of the incident.000. the servant was performing an act in furtherance of the interest and for the benefit of the petitioner. and was allowed. 1992) . The private respondents maintain that under Article 2180 an injured party shall have recourse against the servant as well as the petitioner for whom. In the final analysis. 1990 (Filamer Christian Institute v.00 litigation and actual expenses. P10. No. No pronouncement as to costs. an employee even if he was assigned to clean the school premises for only two (2) hours in the morning of each school day. and P3. is not an employee of petitioner Manila Golf and Country Club and that petitioner is under no obligation to report him for compulsory coverage to the Social Security System. It is undisputed that Funtecha was a working student. the Decision of the Intermediate Appellant Court. WHEREFORE. Court of Appeals. . 190 SCRA 477) reviewing the appellate court's conclusion that there exists an employer-employee relationship between the petitioner and its co-defendant Funtecha. . Funtecha allegedly did not steal the school jeep nor use it for a joy ride without the knowledge of the school authorities. IAC (G. The private respondents. work with any other golf club or he may seek employment a caddy or otherwise with any entity or individual without restriction by petitioner. We reinstate the Court of Appeals' decision penned by the late Justice Desiderio Jurado and concurred in by Justices Jose C. . the Court reconsiders its decision. under Section 14. being a part-time janitor and a scholar of petitioner Filamer.000. . Or a caddy who is on call for a particular day may deliberately absent himself if he has more profitable caddying. . the appellate court affirmed the trial court decision which ordered the payment of the P20. . heirs of the late Potenciano Kapunan. . engagement in some other place. Applying Civil Code provisions. Allan Masa. or another. it being hereby declared that the private respondent. Book III of the Rules and Regulations Implementing the Labor Code is not considered an employee of the petitioner. Rule X. to take over the vehicle while the latter was on his way home one late afternoon. P4. Funtecha requested the driver. . and viewing that the road was clear.000. and Serafin E. .R. Fermin Llamar. Campos.  . and that Funtecha was merely a working scholar who. is reversed and set aside. The Court ruled that the petitioner is not liable for the injuries caused by Funtecha on the grounds that the latter was not an authorized driver for whose acts the petitioner shall be directly and primarily answerable. in relation to the school. negotiating a sharp dangerous curb. review of which is sought. 75112 August 17. Camilon.  Filamer Christian Institute vs. . seek reconsideration of the decision rendered by this Court on October 16. 18 . Jr.  It can happen that a caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. petitioner has no was of compelling the presence of the caddies as they are not required to render a definite number of hours of work on a single day. he may then leave the premises of petitioner and go to such other place of work that he wishes (sic). Even the group rotation of caddies is not absolute because a player is at liberty to choose a caddy of his preference regardless of the caddy's order in the rotation.00 moral damages.000. After a re-examination of the laws relevant to the facts found by the trial court and the appellate court. The private respondents assert that the circumstances obtaining in the present case call for the application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of the petitioner. These are things beyond petitioner's control and for which it imposes no direct sanctions on the caddies. . He was. .00 liability in the Zenith Insurance Corporation policy.00 attorney's fees. . Under such circumstances. Allan Masa turned over the vehicle to Funtecha only after driving down a road. Having a student driver's license. .

1990 is hereby GRANTED. 38 Phil. Funtecha is an employee of petitioner Filamer. it is not improbable (unlikely) that the school president also had knowledge of Funtecha's possession of a student driver's license and his desire to undergo driving lessons during the time that he was not in his classrooms. Moreover. the fact that Funtecha was not the school driver or was not acting within the scope of his janitorial duties does not relieve the petitioner of the burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a servant or employee. Jameson v. It is indubitable under the circumstances that the school president had knowledge that the jeep was routinely driven home for the said purpose. the reliance on the implementing rule on labor to disregard the primary liability of an employer under Article 2180 of the Civil Code is misplaced. 71 P 2d 937 [1937]) . has an obligation to pay damages for injury arising from the unskilled manner by which Funtecha drove the vehicle. 190 Va 906. 768. the existence of a presumptive liability of the employer is determined by answering the question of whether or not the servant was at the time of the accident performing any act in furtherance of his master's business. Litonjua and Leynes. Allan's job demands that he drive home the school jeep so he can use it to fetch students in the morning of the next school day. The Court reiterates that supervision includes the formulation of suitable rules and regulations for the guidance of its employees and the issuance of proper instructions intended for the protection of the public and persons with whom the employer has relations through his employees. He need not have an official appointment for a driver's position in order that the petitioner may be held responsible for his grossly negligent act. Driving the vehicle to and from the house of the school president where both Allan and Funtecha reside is an act in furtherance of the interest of the petitioner-school. Intermediate Appellate Court. the motion for reconsideration of the decision dated October 16. Hence. . the petitioner has failed to prove that it had imposed sanctions or warned its employees against the use of its vehicles by persons other than the driver. (Manuel Casada. WHEREFORE. The present case does not deal with a labor dispute on conditions of employment between an alleged employee and an alleged employer. Furthermore. 148 SCRA 353 [1987]) . the employee driving the vehicle derived some benefit from the act. . . An employer is expected to impose upon its employees the necessary discipline called for in the performance of any act indispensable to the business and beneficial to their employer. or in the supervision over him. In the present case. 628. 59 SE 2d 47 [1950]) Even if somehow. Manila Railroad Co. (Kohlman v. includes any act done by an employee. .. it being sufficient that the act of driving at the time of the incident was for the benefit of the petitioner. the petitioner has not shown that it has set forth such rules and guidelines as would prohibit any one of its employees from taking control over its vehicles if one is not the official driver or prohibiting the driver and son of the Filamer president from authorizing another employee to drive the school vehicle. The decision of the respondent appellate court affirming the trial court decision is REINSTATED. The petitioner.. (Cangco v. It invokes a claim brought by one for damages for injury caused by the patently negligent acts of a person. in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the injury or damage. Hence. supra. at p. Phoenix Construction. An implementing rule on labor cannot be used by an employer as a shield to avoid liability under the substantive provisions of the Civil Code. 50 ALR 1437 [1926]. . SC’s Ruling: Therefore. 210 NW 643. The clause "within the scope of their assigned tasks" for purposes of raising the presumption of liability of an employer. 772 [1918]). thus. Gavett. against both doer- employee and his employer. . Hyland. . v. (Bahia v. The petitioner has failed to show proof of its having exercised the required diligence of a good father of a family over its employees Funtecha and Allan. . the Court is constrained (forced) to conclude that the act of Funtecha in taking over the steering wheel was one done for and in behalf of his employer for which act the petitioner-school cannot deny any responsibility by arguing that it was done beyond the scope of his janitorial duties.

No. the respondent could not claim wages for the days he did not work. rest day pay. Rolando B. which reversed and set aside the decision of the NLRC. as he was employed by the petitioners under a no work no pay scheme.000. In opposing the complaint.[6] the respondent alleged that the petitioners employed him as a driver sometime in 1985. .00 and P500.  The CA disregarded the petitioners charge of abandonment against the respondent for their failure to show that there was deliberate and unjustified refusal on the part of the respondent to resume his employment.00.00 daily. The respondent claimed that the petitioners paid him a daily wage of P175. Catindig (collectively. The petitioners gave him a P3. . . 2004. thus negating the petitioners charge of abandonment. no illegal dismissal occurred. The labor arbiter likewise disregarded the petitioners charge of abandonment against the respondent. Moreover. reversed and set aside the NLRC resolution dated August 15. . As a result. 2009. . however. and reinstated the labor arbiters April 15. the petitioners again hired the respondent as a driver and offered him to stay inside the companys premises. the petitioners denied the respondent due process when they did . The Labor Arbiter Ruling  Labor Arbiter Rennell Joseph R. The CA Decision  The CA. but did not give him service incentive leave. Petition for review assailing the decision of the CA. The petitioners paid the respondent P175. Even assuming that there had been abandonment. his work was irregular and was not fixed. G. December 23. before the Labor Arbiter on June 22. The present petition traces its roots to the complaint[5] for illegal dismissal filed by the respondent against petitioners CRC Agricultural Trading and its owner. holiday pay. 2004. after which the petitioners no longer allowed him to work. hence. In his Sinumpaang Salaysay. the respondent and his family moved out of the petitioners compound and relocated to a nearby place. still paid him P700. respectively.R. the petitioners claimed that the respondent was a seasonal driver. ruled in the respondents favor declaring that he had been illegally dismissed. but under a no work no pay basis. The NLRC Ruling  The NLRC ruled that the respondent was not illegally dismissed and deleted the labor arbiters award of backwages and attorneys fees. . . The latter suspected that the receipts were falsified and stopped talking to him and giving him work assignments. The respondent brought the vehicle to a repair shop and subsequently gave the petitioners two receipts issued by the repair shop. or in February 1995. the respondents services could only be terminated after the observance of due process.  CRC Agricultural Trading and Rolando Catindig vs. 177664. The labor arbiter held that as a regular employee. The petitioners. He also alleged that the petitioners did not send him a notice of termination. and reinstated the decision of the Labor Arbiter finding respondent Robert Obias (respondent) illegally dismissed from his employment. NLRC and Roberto Obias. The respondent worked for the petitioners until he met an accident in 1989. . The CA also ruled that the respondents filing of a complaint for illegal dismissal manifested his desire to return to his job. as they had already lost trust and confidence in him after discovering that he had forged receipts for the vehicle parts he bought for them. After six years. in its decision dated February 20.00 on April 15 and 30. 2005 decision. in his decision of April 15. the petitioners ordered respondent to have the alternator of one of its vehicles repaired. and overtime pay. 2006. xxx The petitioners maintained that they did not anymore engage the respondents services after April 2003. The NLRC reasoned out that it was respondent himself who decided to move his family out of the petitioners lot. Dela Cruz. 2007.00 loan to help him build a hut for his family. but no longer gave him any salary after that. Sometime in March 2003. petitioners). 2005.

. the petitioners paid the respondent a daily wage of P175. the petitioners engaged the services of the respondent in 1995.[10]  First. The no work no pay scheme is merely a method of computing compensation. not serve him with two written notices.  The existence of an employer-employee relationship  A paramount issue that needs to be resolved before we rule on the main issue of illegal dismissal is whether there existed an employer-employee relationship between the petitioners and the respondent.  We conclude from all these that an employer-employee relationship existed between the petitioners and respondent. The CA added that reinstatement would no longer be beneficial to both the petitioners and respondent. Third.  The elements to determine the existence of an employment relationship are:  (1) the selection and engagement of the employee. not only as to the result of the work to be done.00. They. assuming this claim to be true. Thus. as the relationship between them had already been strained. Second.  The most important element is the employers control of the employees conduct. where.  (2) the payment of wages. not a basis for determining the existence or absence of employer-employee relationship. the petitioners exercised control over the means and methods by which the respondent accomplished his work as a driver. The fact the respondent was paid under a no work no pay scheme. with allowances ranging from P140.00 per day. is not significant.  (3) the power of dismissal. up to the time of his actual reinstatement. All the four elements are present in this case. but also as to the means and methods to accomplish it. This determination has been rendered imperative (essential) by the petitioners denial of the existence of employer-employee relationship on the reasoning that they only called on the respondent when needed. the respondent is entitled to full backwages without deduction of earnings derived elsewhere from the time his compensation was withheld from him. Finally. requested the respondent to live inside their compound so he (respondent) could be readily available when the petitioners needed his services.. and when the respondent performed his task. Undoubtedly. Petitioners determined how. i. the petitioners power to dismiss the respondent was inherent in the fact that they engaged the services of the respondent as a driver. and  (4) the employers power to control the employees conduct.00 to P200. a careful review of the record shows that the respondent performed his work as driver under the petitioners supervision and control. (1) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought. . and (2) a subsequent notice which advises the employee of the employers decision to dismiss him.e. in fact. The SC’s Ruling:  We do not find the petition meritorious.

138051. NLRC. 283 SCRA 319 -  Coca-Cola Bottlers Phils. Basiao. Supplements  Sonza vs. Climaco.R. 2004 -  Phil. Global Communication vs. 2004 -  Encyclopedia Britanica vs. 159890. CA. Dr. CA. Lamadrid Bearing & Parts. No.R. No. G. February 15. 145443. 179 SCRA 459 -  Ramos vs. May 28. G. 2007 - . NLRC. ABS-CBN. G. 380 SCRA 467 -  Carungcong vs. 237 SCRA 207 -  Consulta vs. 459 SCRA 260 [05] -  Manila Golf Club vs. G. June 10. No. vs. IAC. 2005 -  Insular Life vs.R. March 18.R. Sunlife. 146881. De Vera. 193 SCRA 271 -  Abante vs. 264 SCRA 4 [96] -  Singer Sewing Machine vs.. No.

 Francisco vs. NLRC. 484 SCRA 33 [2006] -  Dumpit-Murillo vs. Servana G.R. 2007 -  Traveno vs. 146989. 2007 -  Calamba Medical Center Inc. 176484. No. Bilon G. 2009 -  MERALCO vs. 2006 -  Big AA Manufacturer vs. CA G. 164205 September 3. 167648.R. Benamira G.R. NLRC G. No. 155207. 164652 June 8. July 14. February 7. 26. 2008 -  Orozco vs. 164156.R.R. Nazareno.al vs. January 28. 2008 -  Gabriel vs. 2005 - . No. Sept. CA G. G. vs. No. G.R. No. 500 SCRA 690 [06] -  ABS-CBN vs. 145271. 2005 -  TAPE et. Antonio. No. August 13.R. November 25. No.R. Bobomgon Banawa Growers Multi. No.

No. 2008 -  Field Personnel o Auto Bus Transport Systems. 2005 - o Far East Agricultural Supply Inc.R.NWSA Consolidated Unions. 159577 May 3. February 12. Managerial Employee o Penaranda vs. vs. NLRC 512 SCRA 222 -  Confidential Employee o Standard Chartered Bank Employees Union vs. Lebatique et. et. vs. 162813. 2006 - o NAWASA vs. 161933. 11 SCRA 766 - o McLeod vs. Standard Bank. May 16. 156367. G. Inc. No.R. Bautista G.al G. Banganga Plywood Corp.al G.R.R. No. 2007 - . April 22. No.