1
岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
Article 82: Employer-Employee Relationship
1- Francisco v. NLRC
[G.R. No.170087, August 31, 2006]
Doctrine:
When the control test is not sufficient to give a complete picture of the
relationship between the parties, two-tiered test must be applied. The proper
standard of economic dependence is whether the worker is dependent on the
alleged employer for his continued employment in that line of business.
FACTS:
 In 1995, petitioner was hired by Kasei Corporation during its
incorporation stage. She was designated as Accountant and
Corporate Secretary and was assigned as Liaison Officer.
 In 1996, petitioner was designated as Acting Manager and was
assigned to handle recruitment of all employees and perform
management administration functions; represent the company in all
dealings with government agencies, especially with the BIR, SSS
and in the city government of Makati; and to administer all other
matters pertaining to the operation of Kasei Restaurant which is
owned and operated by Kasei Corporation.
 For five years, petitioner performed the duties of Acting Manager.
Her salary was P27,500.00 plus P3,000.00 housing allowance and a
10% share in the profit of Kasei Corporation.
 In January 2001, petitioner was replaced as Manager and reduced
her salary by P2,500.00 a month. On October 15, 2001, petitioner
was informed that she is no longer connected with the company.
ISSUE: WON there is an employer-employee relationship between petitioner
and Kasei Corp.
SC RULING: YES, there is an employer-employee relationship between
petitioner and Kasei Corporation.
There are instances when, aside from the employer’s power to control the
employee with respect to the means and methods by which the work is to be
accomplished, economic realities of the employment relations help provide a
comprehensive analysis of the true classification of the individual, whether
as employee, independent contractor, corporate officer or some other
capacity.
The better approach would therefore be to adopt a two-tiered test involving:
(1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished; and (2) the
underlying economic realities of the activity or relationship.
The determination of the relationship between employer and employee
depends upon the circumstances of the whole economic activity, such as: (1)
the extent to which the services performed are an integral part of the
Employer’s business; (2) the extent of the workers investment in equipment
and facilities; (3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss; (5) the amount of initiative,
skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship
between the worker and the employer; and (7) the degree of dependency of
the worker upon the employer for his continued employment in that line of
business.
The proper standard of economic dependence is whether the worker is
dependent on the alleged employer for his continued employment in that line
of business. By applying the control test, there is no doubt that petitioner is
an employee of Kasei Corporation because she was under the direct control
and supervision of Seiji Kamura, the corporations Technical Consultant.
Under the broader economic reality test, the petitioner can likewise be said to
be an employee of respondent corporation because she had served the
company for six years before her dismissal, receiving check vouchers
indicating her salaries/wages, benefits, 13th month pay, bonuses and
allowances, as well as deductions and Social Security contributions from
August 1, 1999 to December 18, 2000. It is therefore apparent that petitioner
is economically dependent on respondent corporation for her continued
employment in the latter’s line of
business.
Based on the foregoing, there can be no other conclusion that petitioner is an
employee of respondent Kasei Corporation. She was selected and engaged by

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
the company for compensation, and is economically dependent upon
respondent for her continued employment in that line of business.
2- Sonza v. ABS-CBN
[G.R. No. 138051, June 10, 2004]
Doctrine:
The control test is the most important test our courts apply in distinguishing
an employee from an independent contractor. This test is based on the extent
of control the hirer exercises over a worker. The greater the supervision and
control the hirer exercises, the more likely the worker is deemed an employee,
and the less control the hirer exercises, the more likely the worker is
considered an independent contractor.
FACTS:
 In May 1994, respondent ABS-CBN signed an Agreement with the
Mel and Jay Management and Development Corporation
(MJMDC). ABS-CBN was represented by its corporate officers
while MJMDC was represented by SONZA, as President and
General Manager, and Tiangco, as EVP and Treasurer. Referred to
in the Agreement as AGENT, MJMDC agreed to provide SONZAs
services exclusively to ABS-CBN as talent for radio and television.
ABS-CBN agreed to pay for SONZAs services a monthly talent fee
of P310,000 for the first year and P317,000 for the second and third
year of the Agreement. ABS-CBN would pay the talent fees on the
10th and 25th days of the month.
 On 30 April 1996, SONZA filed a complaint against ABS-CBN
before the DOLE. SONZA complained that ABS-CBN did not pay
his salaries, separation pay, service incentive leave pay, 13th month
pay, signing bonus, travel allowance and amounts due under the
Employees Stock Option Plan (ESOP).
 ABS-CBN filed a Motion to Dismiss on the ground that no
employer-employee relationship existed between the parties.
ISSUE: WON there is an employer-employee relationship between petitioner
and ABS-CBN.
LA RULING:
There is no employer-employee relationship between petitioner and ABS-
CBN. It must be noted that complainant was engaged by respondent by reason
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of his peculiar skills and talent as a TV host and a radio broadcaster. Unlike
an ordinary employee, he was free to perform the services he undertook to
render in accordance with his own style. The fact that per the May 1994
Agreement complainant was accorded some benefits normally given to an
employee is inconsequential. Whatever benefits complainant enjoyed arose
from specific agreement by the parties and not by reason of employer-
employee relationship. The fact that complainant was made subject to
respondents Rules and Regulations, likewise, does not detract from the
absence of employer-employee relationship.
NLRC and CA RULING:
There is no employer-employee relationship between petitioner and ABS-
CBN.
SC RULING: NO, there is no employer-employee relationship between
petitioner and ABS-CBN.
Case law has consistently held that the elements of an employer-employee
relationship are: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer’s power
to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called control test, is the most
important element.
As to the selection and engagement of the employee: ABS-CBN engaged
SONZAs services to co-host its television and radio programs because of
SONZAs peculiar skills, talent and celebrity status. Independent contractors
often present themselves to possess unique skills, expertise or talent to
distinguish them from ordinary employees. The specific selection and hiring
of SONZA, because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship.
As to payment of wages: All the talent fees and benefits paid to SONZA were
the result of negotiations that led to the Agreement. If SONZA were ABS-
CBNs employee, there would be no need for the parties to stipulate on
benefits such as SSS, Medicare, x x x and 13th month pay which the law
automatically incorporates into every employer-employee contract.
Whatever benefits SONZA enjoyed arose from contract and not because of
an employer-employee relationship.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
As to power of dismissal: For violation of any provision of the Agreement,
either party may terminate their relationship. SONZA failed to show that
ABS-CBN could terminate his services on grounds other than breach of
contract, such as retrenchment to prevent losses as provided under labor laws.
As to power of control, which is the most important: Applying the control
test to the present case, we find that SONZA is not an employee but an
independent contractor. This test is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an employee. The converse
holds true as well the less control the hirer exercises, the more likely the
worker is considered an independent contractor. ABS-CBN did not assign
any other work to SONZA. How
SONZA delivered his lines, appeared on television, and sounded on radio
were outside ABS-CBNs control. SONZA did not have to render eight hours
of work per day. The clear implication is that SONZA had a free hand on
what to say or discuss in his shows provided he did not attack ABS-CBN or
its interests.
3- Javier v. Flyace Corp.
[G.R. No. 192558, February 15, 2012]
Doctrine:
Whoever claims entitlement to the benefits provided by law should establish
his or her right thereto. Hence, a person who claims to be an employee must
establish such claim.
FACTS:
 Javier filed a complaint before the NLRC for underpayment of
salaries and other labor standard benefits. He alleged that he was an
employee of Fly Ace since September 2007, performing various
tasks at the respondents warehouse such as cleaning and arranging
the canned items before their delivery to certain locations, except in
instances when he would be ordered to accompany the company’s
delivery vehicles, as pahinante; that he reported for work from
Monday to Saturday from 7:00 oclock in the morning to 5:00 oclock
in the afternoon; that during his employment, he was not issued an
identification card and payslips by the company; that thereafter,
Javier was terminated from his employment without notice; and that
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he was neither given the opportunity to refute the cause/s of his
dismissal from work.
 For its part, Fly Ace denied that Javier is its employee and averred
that it was engaged in the business of importation and sales of
groceries. Javier was contracted by its employee, Mr. Ong, as extra
helper on a pakyaw basis. Mr. Ong contracted Javier roughly 5 to 6
times only in a month whenever the vehicle of its contracted hauler,
Milmar Hauling Services, was not available.
ISSUE: Whether or not the petitioner is an employee of Fly Ace Corporation.
RULING IN LA:
Petitioner is not an employee of Fly Ace Corporation. It ruled that Javier has
no employee ID showing his employment with the Respondent nor any
document showing that he received the benefits accorded to regular
employees of the Respondents. Respondent Fly Ace is not engaged in
trucking business but in the importation and sales of groceries. Since there is
a regular hauler to deliver its products, we give credence to Respondents
claim that complainant was contracted on pakiao basis.
RULING IN NLRC:
The NLRC reversed the decision of the LA and ruled that the LA skirted the
argument of Javier and immediately concluded that he was not a 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 relationship. Payment by result x x x is a method of compensation
and does not define the essence of the relation. It is a mere method of
computing compensation, not a basis for determining the existence or absence
of an employer-employee relationship.
RULING IN CA:
The CA annulled the NLRC findings that Javier was indeed a former
employee of Fly Ace and -reinstated the dismissal of Javier’s complaint as
ordered by the LA.
SC RULING: NO, petitioner is not an employee of Fly Ace Corporation.
No particular form of evidence is required to prove the existence of such
employer-employee relationship. Any competent and relevant evidence to
prove the relationship may be admitted. The rule of thumb remains: the onus

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
probandi falls on petitioner to establish or substantiate such claim by the
requisite quantum of evidence. Whoever claims entitlement to the benefits
provided by law should establish his or her right thereto x x x. Sadly, Javier
failed to adduce substantial evidence as basis for the grant of relief.
In this case, the LA and the CA both concluded that Javier failed to establish
his employment with Fly Ace. By way of evidence on this point, all that Javier
presented were his self-serving statements purportedly showing his activities
as an employee of Fly Ace. Clearly, Javier failed to pass the substantiality
requirement to support his claim. Hence, the Court sees no reason to depart
from the findings of the CA.
4 – SMCEU v. Judge Bersamira (found in Azucena)
[G.R. No. 87700, June 13, 1990]
Doctrine:
A labor dispute can nevertheless exist regardless of whether the disputants
stand in the proximate relationship of employer and employee. The existence
of a labor dispute is not negative by the fact that the plaintiffs and defendants
do not stand in the proximate relation of employer and employee.
FACTS:
 Sometime in 1983 and 1984, SanMig entered into contracts for
merchandising services with Lipercon and D'Rite. These companies
are independent contractors duly licensed by the DOLE. In said
contracts, it was expressly understood and agreed that the workers
employed by the contractors were to be paid by the latter and that
none of them were to be deemed employees or agents of SanMig.
There was to be no employer-employee relation between the
contractors and/or its workers, on the one hand, and SanMig on the
other.
 Petitioner SMCEU is the duly authorized representative of the
monthly paid rank-and-file employees of SanMig with whom the
latter executed a CBA.
 In a letter, the Union advised SanMig that some Lipercon and D'Rite
workers had signed up for union membership and sought the
regularization of their employment with SMC. The Union alleged
that this group of employees, while appearing to be contractual
workers supposedly independent contractors, have been
continuously working for SanMig for a period ranging from 6
4
months to 15 years and that their work is neither casual nor seasonal
as they are performing work or activities necessary or desirable in
the usual business or trade of SanMig. Thus, it was contended that
there exists a "labor-only" contracting situation. It was then
demanded that the employment status of these workers be
regularized.
 SMC filed a verified Complaint for Injunction and Damages before
respondent Court. The Union filed a Motion to Dismiss SanMig's
Complaint on the ground of lack of jurisdiction over the case/nature
of the action, which motion was opposed by SanMig.
ISSUE: WON there the Respondent Court has jurisdiction in issuing the
injunction.
RULING IN THE RTC:
The respondent Court issued injunction. The absence of employer-employee
relationship negates the existence of labor dispute. Verily, this court (RTC)
has jurisdiction to take cognizance of Sanmig's grievance.
The evidence so far presented indicates that plaintiff has contracts for services
with Lipercon and D'Rite. The application and contract for employment of
the defendants' witnesses are either with Lipercon or D'Rite. What could be
discerned is that there is no employer-employee relationship between plaintiff
and the contractual workers employed by Lipercon and D'Rite. This,
however, does not mean that a final determination regarding the question of
the existence of employer-employee relationship has already been made. To
finally resolve this
dispute, the court must extensively consider and delve into the manner of
selection and engagement of the putative employee; the mode of payment of
wages; the presence or absence of a power of dismissal; and the Presence or
absence of a power to control the putative employee's conduct.
SC RULING: NO, the respondent Court has no jurisdiction in issuing the
injunction.
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes
"any controversy or matter concerning terms and conditions of employment
or the association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
employer and employee." A labor dispute, as defined by the law, does exist
herein is evident.
Whether or not the Union demands are valid; whether or not SanMig's
contracts with Lipercon and D'Rite constitute "labor-only" contracting and,
therefore, a regular employer-employee relationship may, in fact, be said to
exist; whether or not the Union can lawfully represent the workers of
Lipercon and D'Rite in their demands against SanMig in the light of the
existing CBA; whether or not the notice of strike was valid and the strike
itself legal when it was allegedly instigated to compel the employer to hire
strangers outside the working unit; — those are issues the resolution of which
call for the application of labor laws, and SanMig's causes of action in the
Court below are inextricably linked with those issues.
As the case is indisputably linked with a labor dispute, jurisdiction belongs
to the labor tribunals. As explicitly provided for in Article 217 of the Labor
Code, prior to its amendment by R.A. No. 6715 on 21 March 1989, since the
suit below was instituted on 6 March 1989, Labor Arbiters have original and
exclusive jurisdiction to hear and decide the following cases involving all
workers.
5- Locsin et. al. v. PLDT
[G.R. No. 185251, October 2, 2009]
Doctrine:
The power of control, in this case, has been explained as the “right to control
not only the end to be achieved but also the means to be used in reaching
such end.” With the conclusion that respondent directed petitioners to remain
at their posts and continue with their duties, it is clear that respondent
exercised the power of control over them; thus, the existence of an employer-
employee relationship.
FACTS:
 Respondent PLDT and the SSCP entered into a Security Services
Agreement whereby SSCP would provide armed security guards to
PLDT to be assigned to its various offices. Pursuant to such
agreement, petitioners Raul Locsin and Eddie Tomaquin, among
other security guards, were posted at a PLDT office.
 Then respondent issued a Letter terminating the Agreement. Despite
the termination of the Agreement, however, petitioners continued to
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secure the premises of their assigned office. They were allegedly
directed to remain at their post by representatives of respondent. In
support of their contention, petitioners provided the Labor Arbiter
with copies of petitioner Locsin’s pay slips for the period after the
said termination of Agreement.
 Then, after a year, petitioners’ services were terminated. Thus,
petitioners filed a complaint before the Labor Arbiter for illegal
dismissal and recovery of money claims.
ISSUE: WON there is an employer-employee relationship between the
petitioners and PLDT.
RULING IN LA: Petitioners were found to be employees of PLDT and not
of SSCP. Such conclusion was arrived at with the factual finding that
petitioners continued to serve as guards of PLDTs offices. As such
employees, petitioners were entitled to substantive and procedural due
process before termination of employment. The Labor Arbiter held that
respondent failed to observe such due process requirements.
RULING IN NLRC: The NLRC affirmed the decision of the LA.
RULING IN CA: The CA reversed the decision of LA and NLRC. The CA
applied the four-fold test in order to determine the existence of an employer-
employee relationship between the parties but did not find such relationship.
It determined that SSCP was not a labor-only contractor and was an
independent contractor having substantial capital to operate and conduct its
own business. The CA further bolstered its decision by citing the Agreement
whereby it was stipulated that there shall be no employer-employee
relationship between the security guards and PLDT.
SC RULING: YES, there is employer-employee relationship between the
petitioners and PLDT.
From the foregoing circumstances, reason dictates that we conclude that
petitioners remained at their post under the instructions of respondent. We
can further conclude that respondent dictated upon petitioners that the latter
perform their regular duties to secure the premises during operating hours.
This, to our mind and under the circumstances, is sufficient to establish the
existence of an employer-employee relationship.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
To reiterate, while respondent and SSCP no longer had any legal relationship
with the termination of the Agreement, petitioners remained at their post
securing the premises of respondent while receiving their salaries, allegedly
from SSCP. Clearly, such a situation makes no sense, and the denials
proffered by respondent do not shed any light to the situation. It is but
reasonable to conclude that, with the behest and, presumably, directive of
respondent, petitioners continued with their services. Evidently, such are
indicia of control that respondent exercised over petitioners.
Such power of control has been explained as the right to control not only the
end to be achieved but also the means to be used in reaching such end. With
the conclusion that respondent directed petitioners to remain at their posts
and continue with their duties, it is clear that respondent exercised the power
of control over them; thus, the existence of an employer-employee
relationship.
Evidently, respondent having the power of control over petitioners must be
considered as petitioners’ employer from the termination of the Agreement
on wards as this was the only time that any evidence of control was exhibited
by respondent over petitioners.
6- People’s Broadcasting Service v. Secretary of Labor
[G.R. No. 179652, March 6, 2012]
Doctrine:
The Department of Labor and Employment 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.
FACTS:
 Private respondent Jandeleon Juezan filed a complaint against
petitioner before (DOLE) Regional Office, for illegal deduction,
nonpayment of service incentive leave, 13th month pay, premium
pay for holiday and rest day and illegal diminution of benefits,
delayed payment of wages and non-coverage of SSS, PAG-IBIG
and Philhealth.
 After summary investigation, DOLE found that private respondent
was an employee of petitioner, and was entitled to his money.
Bombo Radyo appealed the decision, but the DOLE dismissed the
same. The Court of Appeals (CA) afirmed such dismissal.
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 When the matter reached the Supreme Court, the CA decision was
reversed and set aside. The Court found that there was no employer-
employee relationship between Bombo Radyo 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 National Labor Relations Commission (NLRC) was held to be
the primary agency in determining the existence of an employer-
employee relationship. From this decision, the Public Attorney’s
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 can be considered as co-
extensive with the power to determine the existence of an employer-
employee relationship. The Court treated the Motion for
Clarification as a second motion for reconsideration, granting said
motion and reinstating the petition.
ISSUE: WON the DOLE has the power to determine the existence of
employer-employee relationship in its exercise of its visitorial and its
enforcement power.
RULING:
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 NLRC’s 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. The

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
Court issued the declaration that at least prima facie showing of the absence
of an employer-employee relationship be made to oust the DOLE of
jurisdiction. But it is precisely the DOLE that will be faced with that
evidence, and it is the DOLE that will weigh it, to see if the same does
successfully refute the existence of an employer-employee relationship.
7- Ymbong v. ABS-CBN
(Same as #20)
[G.R. No. 184885, March 7, 2012]
See Case Digest #20
8- Professional Services v. CA
[G.R. No. 126297, February 11, 2008]
(P.S. sorry mahaba, 3 yung discussion ng doctrine dito nakakaloka,
employer-employee relationship bet hospital and consultant, doctrine of
apparent authority and doctrine of corporate responsibility)
Facts:
 April 4, 1984 Natividad Agana was admitted at the Medical City
General Hospital (Medical City) because of difficulty of bowel
movement and bloody anal discharge. Dr. Miguel Ampil diagnosed her
to be suffering from "cancer of the sigmoid."
 Thus, on April 11, 1984, Dr. Ampil, assisted by the medical staff of
Medical City, performed an anterior resection surgery upon her. During
the surgery, he found that the malignancy in her sigmoid area had spread
to her left ovary, necessitating the removal of certain portions of it.
 Thus, Dr. Ampil obtained the consent of Atty. Enrique Agana,
Natividad's husband, to permit Dr. Juan Fuentes, respondent in G.R. No.
126467, to perform hysterectomy upon Natividad.
 Dr. Fuentes performed and completed the hysterectomy. Afterwards,
Dr. Ampil took over, completed the operation and closed the incision.
However, the operation appeared to be flawed with remarks from the
attending nurse.
 After a couple of days, Natividad complained of excruciating pain in
her anal region. She consulted both Dr. Ampil and Dr. Fuentes about it.
They told her that the pain was the natural consequence of the surgical
operation performed upon her. Dr. Ampil recommended that Natividad
consult an oncologist to treat the cancerous nodes which were not
removed during the operation.
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 The couple went to US to seek further treatment. She was told to be free
of cancer and was advised to return to PH.
 In short, they discovered a gauze protruding from her vagina. Dr. Ampil
removed it by hand and told her the pain would go away. It didn’t. So
they went to Polymedic Hospital and they saw another gauze which
infected her vagina vault, and she needed to undergo another surgery.
She underwent surgery.
 Natividad and her husband led with the Regional Trial Court, Branch
96, Quezon City a complaint for damages against PSI (owner of Medical
City), Dr. Ampil and Dr. Fuentes.
 Pending the resolution of the case, Natividad died.
 the trial court rendered judgment in favor of spouses Agana finding PSI,
Dr. Ampil and Dr. Fuentes jointly and severally liable. CA affirmed
with modification
 SC on certiorari ruled in favor of the Aganas holding that PSI is jointly
and severally liable with Dr. Ampil for the following reasons:
1. there is an employer-employee relationship between Medical
City and Dr. Ampil. The Court relied on Ramos v. Court of
Appeals, holding that for the purpose of apportioning
responsibility in medical negligence cases, an employer-
employee relationshipin effect exists between hospitals and
their attending and visiting physicians;
2. PSI's act of publicly displaying in the lobby of the Medical City
the names and specializations of its accredited physicians,
including Dr. Ampil, estopped it from denying the existence of
an employer-employee relationship between them under the
doctrine of ostensible agency or agency by estoppel; and
3. PSI's failure to supervise Dr. Ampil and its resident physicians
and nurses and to take an active step in order to remedy their
negligence rendered it directly liable under the doctrine of
corporate negligence.
 This is a MR
Issue: WON SC is right (lol)
Held:
Citing Ramos case,
 In the first place, hospitals exercise significant control in the
hiring and firing of consultants and in the conduct of their work
within the hospital premises. Doctors who apply for "consultant"

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
slots, visiting or attending, are required to submit proof of
completion of residency, their educational qualifications; generally,
evidence of accreditation by the appropriate board (diplomate),
evidence of fellowship in most cases, and references. These
requirements are carefully scrutinized by members of the hospital
administration or by a review committee set up by the hospital who
either accept or reject the application. This is particularly true with
respondent hospital.
 After a physician is accepted, either as a visiting or attending
consultant, he is normally required to attend clinico-
pathological conferences, conduct bedside rounds for clerks,
interns and residents, moderate grand rounds and patient
audits and perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the hospital, and/or
for the privilege of admitting patients into the hospital. In
addition to these, the physician's performance as a specialist is
generally evaluated by a peer review committee on the basis of
mortality and morbidity statistics, and feedback from patients,
nurses, interns and residents. A consultant remiss in his duties,
or a consultant who regularly falls short of the minimum
standards acceptable to the hospital or its peer review
committee, is normally politely terminated.
 In other words, private hospitals hire, fire and exercise real control
over their attending and visiting "consultant" staff. While
"consultants" are not, technically employees, a point which
respondent hospital asserts in denying all responsibility for the
patient's condition, the control exercised, the hiring, and the
right to terminate consultants all fulfill the important hallmarks
of an employer-employee relationship, with the exception of the
payment of wages. In assessing whether such a relationship in
fact exists, the control test is determining. Accordingly, on the
basis of the foregoing, we rule that for the purpose of allocating
responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals and
their attending and visiting physicians. This being the case, the
question now arises as to whether or not respondent hospital is
solidarily liable with respondent doctors for petitioner's condition.
 The basis for holding an employer solidarily responsible for the
negligence of its employee is found in Article 2180 of the Civil Code
which considers a person accountable not only for his own acts but
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also for those of others based on the former's responsibility under a
relationship of partia ptetas.
 The control test was used to test the relationship wherein the hospital
exercises control in the hiring and ring of consultants, like Dr. Ampil,
and in the conduct of their work.
 PSI merely offered a general denial stating that consultants are
“independent contractors” not employees. Even assuming that Dr.
Ampil is not an employee of Medical City, but an independent
contractor, still the said hospital is liable to the Aganas.
 DOCTRINE OF APPARENT AUTHORITY
 Citing Nogales v. CMC, a hospital is not liable for the negligence
of an independent contractor-physician. There is, however, an
exception to this principle. The hospital may be liable if the
physician is the "ostensible" agent of the hospital. This exception
is also known as the "doctrine of apparent authority." (Sometimes
referred to as the apparent or ostensible agency theory.)
 The doctrine of apparent authority essentially involves two factors
to determine the liability of an independent contractor-physician.
 The first factor focuses on the hospital's manifestations and is
sometimes described as an inquiry whether the hospital acted
in a manner which would lead a reasonable person to conclude
that the individual who was alleged to be negligent was an
employee or agent of the hospital. In this regard, the hospital
need not make express representations to the patient that the
treating physician is an employee of the hospital; rather a
representation may be general and implied.
 The doctrine of apparent authority is a specie of the doctrine of
estoppel. Article 1431 of the Civil Code provides that "[t]hrough
estoppel, an admission or representation is rendered conclusive
upon the person making it, and cannot be denied or disproved as
against the person relying thereon." Estoppel rests on this rule:
"Whether a party has, by his own declaration, act, or omission,
intentionally and deliberately led another to believe a particular
thing true, and to act upon such belief, he cannot, in any litigation
arising out of such declaration, act or omission, be permitted to
falsify it.
 The second factor focuses on the patient's reliance. It is
sometimes characterized as an inquiry on whether the plaintiff
acted in reliance upon the conduct of the hospital or its agent,
consistent with ordinary care and prudence.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 PSI argues that the doctrine of apparent authority cannot apply to
these cases because spouses Agana failed to establish proof of their
reliance on the representation of Medical City that Dr. Ampil is its
employee.
 This is not present in this case. Atty. Agana categorically testified that
one of the reasons why he chose Dr. Ampil was that he knew him to be
a staff member of Medical City, a prominent and known hospital.
 Clearly, PSI is estopped from passing the blame solely to Dr. Ampil. Its
act of displaying his name and those of the other physicians in the public
directory at the lobby of the hospital amounts to holding out to the public
that it offers quality medical service through the listed physicians. This
justifies Atty. Agana's belief that Dr. Ampil was a member of the
hospital's staff. It must be stressed that under the doctrine of
apparent authority, the question in every case is whether the
principal has by his voluntary act placed the agent in such a
situation that a person of ordinary prudence, conversant with
business usages and the nature of the particular business, is justified
in presuming that such agent has authority to perform the
particular act in question. In these cases, the circumstances yield a
positive answer to the question.
 The challenged Decision also anchors its ruling on the doctrine of
corporate responsibility. The duty of providing quality medical
service is no longer the sole prerogative and responsibility of the
physician. This is because the modern hospital now tends to organize a
highly-professional medical staff whose competence and performance
need also to be monitored by the hospital commensurate with its
inherent responsibility to provide quality medical care. Such
responsibility includes the proper supervision of the members of its
medical staff. Accordingly, the hospital has the duty to make a
reasonable effort to monitor and oversee the treatment prescribed
and administered by the physicians practicing in its premises.
 PSI had been remiss in its duty. It did not conduct an immediate
investigation on the reported missing gauzes to the great prejudice and
agony of its patient. The testimony of Dr. Jocson shows lack of concern
for the patients. Such conduct is reflective of the hospital's manner of
supervision. Not only did PSI breach its duty to oversee or supervise all
persons who practice medicine within its walls, it also failed to take an
active step in fixing the negligence committed. This renders PSI, not
only vicariously liable for the negligence of Dr. Ampil under Article
9
2180 of the Civil Code, but also directly liable for its own negligence
under Article 2176.
 Moreover, there is merit in the trial court's finding that the failure of PSI
to conduct an investigation "established PSI's part in the dark conspiracy
of silence and concealment about the gauzes."
9- South East International Rattan Inc. v. Coming
[G.R. No. 186621, March 12, 2014]
Facts:
 South East International Rattan, Inc. (SEIRI) is a domestic corporation
engaged in the business of manufacturing and exporting furniture to
various countries with principal place of business at Paknaan, Mandaue
City, while petitioner Estanislao Agbay, as per records, is the President
and General Manager of SEIRI
 Jesus J. Coming filed a complaint for illegal dismissal, underpayment
of wages, non-payment of holiday pay, 13th month pay and service
incentive leave pay, with prayer for reinstatement, back wages, damages
and attorney's fees.
 he was hired by petitioners as Sizing Machine Operator on March 17,
1984. Initially he was paid on a pakiao basis but was paid P15.00/day
starting June 1984. In 1990, he was laid off from work for no reason and
was asked to come back after 2 mos, with instructions not to complain
or they may not call him back. He was dismissed January 1, 2002 for no
lawful reason. He was told the company was not doing well financially.
 He waited 1 year, when he was not called back, he filed a complaint
before the regional arbitration branch.
 petitioners denied having hired respondent asserting that SEIRI was
incorporated only in 1986, and that respondent actually worked for
SEIRI's furniture suppliers because when the company started in 1987
it was engaged purely in buying and exporting furniture and its business
operations were suspended from the last quarter of 1989 to August 1992.
He was not included in the list submitted in SSS.
 LA ruled that respondent was a regular employee and the termination of
his employment was illegal with payment of separation pay, backwages,
wage differential, 13th month pay, holiday pay, service incentive leave
pay.
 NLRC set aside. MR denied

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 CA reinstated LA’s decision with modification on the computation of
backwages which should be computed from the time of illegal
termination until the finality of this decision. MR denied.
Issue: WON there is employer-employee relationship
Held:
Employer-employee relationship is a question of fact.
To ascertain the existence of an employer-employee relationship
jurisprudence has invariably adhered to the four-fold test, to wit:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employee's conduct, or the so-called
"control test.
In resolving the issue of whether such relationship exists in a given case,
substantial evidence — that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion — is sufficient.
Although no particular form of evidence is required to prove the existence of
the relationship, and any competent and relevant evidence to prove the
relationship may be admitted, a finding that the relationship exists must
nonetheless rest on substantial evidence.
Respondent contends that: The payroll and pay records did not include the
name of respondent. The affidavit of Ms. Agbay stated that after SEIRI
started its business in 1986 purely on export trading, it ceased operations in
1989 as evidenced by Certi cation dated January 18, 1994 from the Securities
and Exchange Commission (SEC); that when business resumed in 1992,
SEIRI undertook only a little of manufacturing; that the company never hired
any workers for varnishing and pole sizing because it bought the same from
various suppliers, including Faustino Apondar; respondent was never hired
by SEIRI; and while it is true that Mr. Estanislao Agbay is the company
President, he never dispensed the salaries of workers.
In Tan v. Lagrama, the Court held that the fact that a worker was not reported
as an employee to the SSS is not conclusive proof of the absence of employer-
employee relationship. Otherwise, an employer would be rewarded for his
failure or even neglect to perform his obligation.
10
Nor does the fact that respondent's name does not appear in the payrolls and
pay envelope records submitted by petitioners negate the existence of
employer-employee relationship. For a payroll to be utilized to disprove the
employment of a person, it must contain a true and complete list of the
employee. 37 In this case, the exhibits offered by petitioners before the NLRC
consisting of copies of payrolls and pay earnings records are only for the
years 1999 and 2000; they do not cover the entire 18-year period during
which respondent supposedly worked for SEIRI.
Apondar's certification likewise stated that respondent worked for him since
1999 through his brother Vicente as "sideline" but only after regular working
hours and "off and on" basis. Even assuming the truth of the foregoing
statements, these do not foreclose respondent's regular or full-time
employment with SEIRI. In effect, petitioners suggest that respondent was
employed by SEIRI's suppliers, Mayol and Apondar but no competent proof
was presented as to the latter's status as independent contractors.
Petitioners' admission that the five affiants were their former employees is
binding upon them. While they claim that respondent was the employee of
their suppliers Mayol and Apondar, they did not submit proof that the latter
were indeed independent contractors; clearly, petitioners failed to discharge
their burden of proving their own affirmative allegation. There is thus no
showing that the five former employees of SEIRI were motivated by malice,
bad faith or any ill-motive in executing their affidavit supporting the claims
of respondent.
In any controversy between a laborer and his master, doubts reasonably
arising from the evidence are resolved in favor of the laborer.
As a regular employee, respondent enjoys the right to security of tenure under
Article 279 of the Labor Code and may only be dismissed for a just or
authorized cause, otherwise the dismissal becomes illegal.
Respondent, whose employment was terminated without valid cause by
petitioners, is entitled to reinstatement without loss of seniority rights and
other privileges and to his full back wages, inclusive of allowances and other
bene ts or their monetary equivalent, computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement. Where reinstatement is no longer viable as an option, back
wages shall be computed from the time of the illegal termination up to the

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
nality of the decision. Separation pay equivalent to one month salary for every
year of service should likewise be awarded as an alternative in case
reinstatement in not possible.
10 – Tenazas et. al. v. R. Villegas Taxi Transport
[G.R. No. 192998, April 2, 2014]
Facts:
 Bernard A. Tenazas (Tenazas) and Jaime M. Francisco (Francisco) led
a complaint for illegal dismissal against R. Villegas Taxi Transport
and/or Romualdo Villegas. Endraca filed a similar case prior, hence this
was consolidated.
 Tenazas alleged that on July 1, 2007, the taxi unit assigned to him was
sideswiped by another vehicle, causing a dent on the left fender near the
driver seat. The cost of repair for the damage was estimated at P500.00.
Upon reporting the incident to the company, he was scolded by
respondents Romualdo and Andy and was told to leave the garage for
he is already red. He was even threatened with physical harm should he
ever be seen in the company's premises again. Despite the warning,
Tenazas reported for work on the following day but was told that he can
no longer drive any of the company's units as he is already fired.
 Francisco, on the other hand, averred that his dismissal was brought
about by the company's unfounded suspicion that he was organizing a
labor union. He was instantaneously terminated, without the benefit of
procedural due process
 Endraca, for his part, alleged that his dismissal was instigated by an
occasion when he fell short of the required boundary for his taxi unit.
He related that before he was dismissed, he brought his taxi unit to an
auto shop for an urgent repair. He was charged the amount of P700.00
for the repair services and the replacement parts. As a result, he was not
able to meet his boundary for the day.
 respondents admitted that Tenazas and Endraca were employees of the
company, the former being a regular driver and the latter a spare driver.
The respondents, however, denied that Francisco was an employee of
the company or that he was able to drive one of the company's units at
any point in time.
 That Tenaza was not dismissed, the unit however was under repair. He
was advised to wait but he did not report to work.
 LA ruled there was no illegal dismissal.
 NLRC reversed the decision.
11
 CA affirmed finding Tenazas and Endraca as regular employees,
Francisco failed to establish his relation with the company.
Issue: WON CA committed a grave abuse of discretion amounting to lack or
excess of jurisdiction
Held:
 In reviewing the decision of the NLRC, the CA found that no substantial
evidence was presented to support the conclusion that Francisco was an
employee of the respondents and accordingly modi ed the NLRC
decision. It stressed that with the respondents' denial of employer-
employee relationship, it behooved Francisco to present substantial
evidence to prove that he is an employee before any question on the
legality of his supposed dismissal becomes appropriate for discussion.
Francisco, however, did not offer evidence to substantiate his claim of
employment with the respondents. Short of the required quantum of
proof, the CA correctly ruled that the NLRC's finding of illegal
dismissal and the monetary awards which necessarily follow such ruling
lacked factual and legal basis and must therefore be deleted.
 [J]udicial review of decisions of the NLRC via petition for certiorari
under Rule 65, as a general rule, is confined only to issues of lack or
excess of jurisdiction and grave abuse of discretion on the part of the
NLRC. The CA does not assess and weigh the sufficiency of evidence
upon which the LA and the NLRC based their conclusions. The issue is
limited to the determination of whether or not the NLRC acted without
or in excess of its jurisdiction, or with grave abuse of discretion in
rendering the resolution, except if the findings of the NLRC are not
supported by substantial evidence. (Anonas Construction v. NLRC)
 It is an oft-repeated rule that in labor cases, as in other administrative
and quasi-judicial proceedings, "the quantum of proof necessary is
substantial evidence, or such amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion."
"[T]he burden of proof rests upon the party who asserts the affirmative
of an issue." Corollarily, as Francisco was claiming to be an employee
of the respondents, it is incumbent upon him to proffer evidence to prove
the existence of said relationship.
 "[I]n determining the presence or absence of an employer-employee
relationship, the four fold test is evoked.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 There is no hard and fast rule designed to establish the aforesaid
elements. Any competent and relevant evidence to prove the
relationship may be admitted.
 In this case, however, Francisco failed to present any proof substantial
enough to establish his relationship with the respondents. He failed to
present documentary evidence like attendance logbook, payroll, SSS
record or any personnel le that could somehow depict his status as an
employee. a mere allegation in the position paper is not tantamount to
evidence. Bereft of any evidence, the CA correctly ruled that Francisco
could not be considered an employee of the respondents.
 CA's order of reinstatement of Tenazas and Endraca, instead of the
payment of separation pay, is also well in accordance with prevailing
jurisprudence. In Macasero v. Southern Industrial Gases Philippines,
 [A]n illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement. The two reliefs provided are
separate and distinct. The normal consequences of respondents'
illegal dismissal, then, are reinstatement without loss of seniority
rights, and payment of backwages computed from the time
compensation was withheld up to the date of actual reinstatement.
Where reinstatement is no longer viable as an option, separation
pay equivalent to one (1) month salary for every year of service
should be awarded as an alternative. The payment of separation
pay is in addition to payment of backwages.
 Clearly, it is only when reinstatement is no longer feasible that the
payment of separation pay is ordered in lieu thereof. For instance, if
reinstatement would only exacerbate the tension and strained relations
between the parties, or where the relationship between the employer and
the employee has been unduly strained by reason of their irreconcilable
differences, it would be more prudent to order payment of separation
pay instead of reinstatement.
 This doctrine of strained relations, however, should not be used
recklessly or applied loosely nor be based on impression alone. "It bears
to stress that reinstatement is the rule and, for the exception of strained
relations to apply, it should be proved that it is likely that if reinstated,
an atmosphere of antipathy and antagonism would be generated as to
adversely affect the efficiency and productivity of the employee
concerned." The strained relations must be demonstrated as a fact.
 After a perusal of the NLRC decision, this Court failed to find the
factual basis of the award of separation pay to the petitioners. The
NLRC decision did not state the facts which demonstrate that
12
reinstatement is no longer a feasible option that could have justified the
alternative relief of granting separation pay instead.
 A bare claim of strained relations by reason of termination is insufficient
to warrant the granting of separation pay.
 As a rule, no strained relations should arise from a valid and legal act
asserting one's right. 48 Although litigation may also engender a certain
degree of hostility, the understandable strain in the parties' relation
would not necessarily rule out reinstatement which would, otherwise,
become the rule rather the exception in illegal dismissal cases.
11- Tongko v. Manufacturer’s Life Insurance Co.
[G.R. No. 167622, November 7, 2008]
Facts:
 Renato De Dios was Manulife’s then-president. Gregorio Tongko
started his professional relationship with Manulife by virtue of a Career
Agents Agreement which states that he is an independent contractor and
that nothing in there was to be construed or interpreted as creating an
employer-employee relationship. That the Agent shall canvass for
applications for Life Insurance, Annuities, Group policies and other
products offered by the Company, and collect, in exchange for
provisional receipts issued by the Agent, money due or to become due
to the Company, and that the company may terminate the agreement for
breach of any of its provisions
 Tongko was named as Unit Manager in Manulife’s Sales Agency Org,
then a branch manager
 The problem started sometime in 2001, when Manulife instituted
manpower development programs in the regional sales management
level. Relative thereto, De Dios addressed a letter dated November 6,
2001 to Tongko regarding an October 18, 2001 Metro North Sales
Managers Meeting. In a letter stating (mahaba yun, eto na ung
gist/ending) “It would appear, however, that despite the series of
meetings and communications, both one-on-one meetings between
yourself and SVP Kevin OConnor, some of them with me, as well as
group meetings with your Sales Managers, all these efforts have failed
in helping you align your directions with Managements avowed agency
growth policy.”
 He was sent a termination letter.
 Tongko filed a complaint for illegal dismissal alleging employer-
employee relationship, stating that Manulife exercised control over him

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
stating that it was Manulife who hired, promoted and gave various
assignments to him. It was the company who set objectives as regards
productions, recruitment, training programs and all activities pertaining
to its business.
 LA ruled in favor of Manulife stating that there was no employer-
employee relationship in this case, the four-fold test none were present.
 NLRC reversed applying the four fold test and stating that Manulife had
control over Tongko as evidenced by the letter sent full of complaint
and criticism. MR denied
 CA reversed and NLRC has no jurisdiction. It also applied the four-fold
test.
Issue: WON there was employer-employee relationship between Manulife
and Tongko?
Held:
Note: If employer-employee relationship exists -> NLRC has jurisdiction
No employer-employee relationship -> RTC has jurisdiction
 Four-fold test (from Pacific Consultants International Asia Inc. v.
Schonfeld:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employers power to control the employees conduct.
It is the so-called control test which constitutes the most important index
of the existence of the employer-employee relationship that is, whether
the employer controls or has reserved the right to control the employee
not 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. Stated otherwise,
an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not
only the end to be achieved but also the means to be used in reaching
such end.
 NLRC and CA both applied the four-fold test but differed in the
interpretation.
 In Sonza v. ABS-CBN Broadcasting Corporation, we explained that not
all forms of control would establish an employer-employee
relationship… Logically, the line should be drawn between rules that
merely serve as guidelines towards the achievement of the mutually
desired result without dictating the means or methods to be
13
employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such
means. The first, which aim only to promote the result, create no
employer-employee relationship unlike the second, which address
both the result and the means used to achieve it.
 In Insular case, “No showing has been made that any such rules or
regulations were in fact promulgated, much less that any rules
existed or were issued which effectively controlled or restricted his
choice of methods or the methods themselves of selling insurance.
Absent such showing, the Court will not speculate that any
exceptions or qualifications were imposed on the express provision
of the contract leaving Basiao ... free to exercise his own judgment
as to the time, place and means of soliciting insurance.”
 Based on the foregoing cases, if the specific rules and regulations
that are enforced against insurance agents or managers are such
that would directly affect the means and methods by which such
agents or managers would achieve the objectives set by the
insurance company, they are employees of the insurance company.
 In the instant case, Manulife had the power of control over Tongko that
would make him its employee. Several factors contribute to this
conclusion.
 In the agreement signed by both parties, an agent of Manulife must
comply with three (3) requirements: (1) compliance with the regulations
and requirements of the company; (2) maintenance of a level of
knowledge of the companys products that is satisfactory to the
company; and (3) compliance with a quota of new businesses.
 Among the company regulations are different codes of conduct
which demonstrate the power of control exercised by the company over
Tongko. The fact that Tongko was obliged to obey and comply with the codes
of conduct was not disowned by respondents. Morever, Manulife’s evidence
establishes the fact that Tongko was tasked to perform administrative duties
that establishes his employment with Manulife.
 REVERSED.
12- TAPE Inc. v. Servaña
[G.R. No. 167648, January 28, 2008]
Facts:
 Television and Production Exponents Inc. or TAPE is a domestic
corporation engaged in the production of television programs, such as

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
the long-running variety program, "Eat Bulaga!". Its president is
Antonio P. Tuviera (Tuviera). Respondent Roberto C. Servaña had
served as a security guard for TAPE from March 1987 until he was
terminated on 3 March 2000.
 Respondent led a complaint for illegal dismissal and nonpayment of
bene ts against TAPE. He alleged that he was rst connected with Agro-
Commercial Security Agency but was later on absorbed by TAPE as a
regular company guard.
 On 2 March 2000, respondent received a memorandum informing him
of his impending dismissal on account of TAPE's decision to contract
the services of a professional security agency. And he did not receive
his benefits as granted by law
 In a motion to dismiss which was treated as its position paper, TAPE
countered that the labor arbiter had no jurisdiction over the case in the
absence of an employer- employee relationship between the parties.
 They also contend that that in 1995, when his contract with RPN-9
expired, respondent was retained as a talent and a member of the support
group, until such time that TAPE shall have engaged the services of a
professional security agency; among others.
 TAPE averred that respondent was an independent contractor falling
under the talent group category and was working under a special
arrangement which is recognized in the industry. 5
 Respondent for his part insisted that he was a regular employee having
been engaged to perform an activity that is necessary and desirable to
TAPE's business for thirteen (13) years.
 LA ruled in favor of respondent relying on the nature of the work of
respondent, which is securing and maintaining order in the studio, as
necessary and desirable in the usual business activity of TAPE.
 NLRC reversed sating that respondent was a mere program employee.
In such industry, security services may not be deemed necessary and
desirable in the usual business of the employer. Even without the
performance of such services on a regular basis, respondent's company's
business will not grind to a halt.
 CA reversed and ordered reinstatement.
Issue: WON an employer-employee relationship exists
Held:
four fold test
Under the control test, there is an employer-employee relationship when the
person for whom the services are performed reserves the right to control not
14
only the end achieved but also the manner and means used to achieve that
end.
1. the selection and engagement of the employee;
When the security agency's contract with RPN-9 expired in 1995,
respondent was absorbed by TAPE or, in the latter's language, "retained
as talent." Clearly, respondent was hired by TAPE. Respondent presented
his identi cation card to prove that he is indeed an employee of TAPE.
That the ID was used not only as security measure but to mainly identify
the holder thereof as a bona fide employee of the firm who issues it.
2. the payment of wages;
Respondent claims that the monthly salary P5,444.44 is referred to as
talent fees. Wages, as defined in the Labor Code, are remuneration or
earnings, however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece or commission
basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for service rendered or to
be rendered. It is beyond dispute that respondent received a fixed amount
as monthly compensation for the services he rendered to TAPE.
3. the power of dismissal;
The Memorandum informing respondent of the discontinuance of his
service proves that TAPE had the power to dismiss respondent.
4. the employer's power to control the employee with respect to the
means and method by which the work is to be accomplished. The
most important factor involves the control test.
Control is manifested in the bundy cards submitted by respondent in
evidence. He was required to report daily and observe de nite work hours.
To negate the element of control, TAPE presented a certi cation from M-
Zet Productions to prove that respondent also worked as a studio security
guard for said company. Notably, the said certi cate categorically stated
that respondent reported for work on Thursdays from 1992 to 1995. It
must be recalled that during that time he was under RPN-9. TAPE
absorbed him only in 1995.
TAPE also failed to establish that respondent is an independent
contractor. TAPE relies on Policy Instruction No. 40, issued by the
Department of Labor, in classifying respondent as a program employee
and equating him to be an independent contractor. However, TAPE

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
failed to adduce any evidence to prove that it complied with the
requirements laid down in the policy instruction. It did not even present
its contract with respondent. Neither did it comply with the contract-
registration requirement.
We cannot subscribe to private respondents' conflicting theories. The
theory of private respondents that petitioner is an independent contractor
runs counter to their very own allegation that petitioner is a talent or a
program employee. An independent contractor is not an employee of the
employer, while a talent or program employee is an employee. The only
difference between a talent or program employee and a regular employee
is the fact that a regular employee is entitled to all the benefits that are
being prayed for. This is the reason why private respondents try to seek
refuge under the concept of an independent contractor theory. For if
petitioner were indeed an independent contractor, private respondents
will not be liable to pay the benefits prayed for in petitioner's complaint.
More importantly, respondent had been continuously under the employ
of TAPE from 1995 until his termination in March 2000, or for a span of
5 years. Regardless of whether or not respondent had been performing
work that is necessary or desirable to the usual business of TAPE,
respondent is still considered a regular employee under Article 280 of
the Labor Code
In sum, we find no reversible error committed by the Court of Appeals
in its assailed decision. However, with respect to the liability of
petitioner Tuviera, president of TAPE, absent any showing that he acted
with malice or bad faith in terminating respondent, he cannot be held
solidarily liable with TAPE
13-Encyclopedia Britannica v. NLRC
[G.R. No. 87098, November 4, 1996]
Facts:
 Private respondent Benjamin Limjoco was a Sales Division Manager of
petitioner Encyclopaedia Britannica and was in charge of selling
petitioner's products through some sales representatives. As
Issue: WON an employer-employee relationship exists
compensation, private respondent received commissions from the
Held:
products sold by his agents. He was also allowed to use petitioner's
15
name, goodwill and logo. It was, however, agreed upon that office
expenses would be deducted from private respondent's commissions.
 Limjoco resigned from office to pursue his private business.
 He then filed a complaint against petitioner Encyclopaedia Britannica
with the Department of Labor and Employment, claiming for non-
payment of separation pay and other benefits, and also illegal deduction
from his sales commissions
 Encyclopaedia Britannica alleged that complainant Benjamin Limjoco
was not its employee but an independent dealer authorized to promote
and sell its products and in return, received commissions therefrom.
Limjoco did not have any salary and his income from the petitioner
company was dependent on the volume of sales accomplished. He also
had his own separate office, financed the business expenses, and
maintained his own workforce. The salaries of his secretary, utility man,
and sales representatives were chargeable to his commissions. Thus,
petitioner argued that it had no control and supervision over the
complainant as to the manner and means he conducted his business
operations. The latter did not even report to the office of the petitioner
and did not observe fixed office hours. Consequently, there was no
employer- employee relationship.
 Limjoco maintained otherwise. He alleged that he was hired by the
petitioner in July 1970, was assigned in the sales department, and was
earning an average of P4,000.00 monthly as his sales commission. He
was under the supervision of the petitioner's officials who issued to him
and his other personnel, memoranda, guidelines on company policies,
instructions and other orders. He was, however, dismissed by the
petitioner when the Laurel-Langley Agreement expired.
 LA ruled that Limjoco was an employee of the company. That they had
control over Limjoco since latter was required to make periodic reports
of his sales activities to the company. All transactions were subject to
the final approval of the petitioner, an evidence that petitioner company
had active control on the sales activities.
 NLRC affirmed stating there was no evidence supporting the
independent contractor. The petitioner still exercised control over
Limjoco through its memoranda and guidelines and even prohibitions
on the sale of products other than those authorized by it.
 four fold test

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 The fact that petitioner issued memoranda to private respondents and to
other division sales managers did not prove that petitioner had actual
control over them. The different memoranda were merely guidelines on
company policies which the sales managers follow and impose on their
respective agents.
 It should be noted that in petitioner's business of selling encyclopedias
and books, the marketing of these products was done through dealership
agreements. The sales operations were primarily conducted by
independent authorized agents who did not receive regular
compensations but only commissions based on the sales of the products.
These independent agents hired their own sales representatives,
financed their own office expenses, and maintained their own staff.
Thus, there was a need for the petitioner to issue memoranda to private
respondent so that the latter would be apprised of the company policies
and procedures. Nevertheless, private respondent Limjoco and the other
agents were free to conduct and promote their sales operations. The
periodic reports to the petitioner by the agents were but necessary to
update the company of the latter's performance and business income.
 Private respondent was not an employee of the petitioner company.
While it was true that the petitioner had fixed the prices of the products
for reason of uniformity and private respondent could not alter them, the
latter, nevertheless, had free rein in the means and methods for
conducting the marketing operations.
 Private respondent was merely an agent or an independent dealer of the
petitioner. He was free to conduct his work and he was free to engage
in other means of livelihood. At the time he was connected with the
petitioner company, private respondent was also a director and later the
president of the Farmers' Rural Bank.
 In ascertaining whether the relationship is that of employer-employee
or one of independent contractor, each case must be determined by its
own facts and all features of the relationship are to be considered. 6 The
records of the case at bar showed that there was no such employer-
employee relationship.
 As stated earlier, "the element of control is absent; where a person who
works for another does so more or less at his own pleasure and is not
subject to definite hours or conditions of work, and in turn is
compensated according to the result of his efforts and not the amount
thereof, we should not find that the relationship of employer and
employee exists. In fine, there is nothing in the records to show or would
"indicate that complainant was under the control of the petitioner" in
16
respect of the means and methods 8 in the performance of complainant's
work.
 REVERSED.
14- Atok Big Wedge Co. Inc. v. Gison
[G.R. No. 169510, August 8, 2011]
Parties: Atok Big Wedge Company Inc. (petitioner)
Jesus P. Gison (respondent)
FACTS:
 In 1992 – Jesus Gison worked as part-time consultant on retainer
basis in Atok Big Wedge Company through its then Asst. Vice-
President and Acting Resident Manager, Rutillo A. Torres.
 As a consultant on retainer basis, Gison assisted Atok's retained
legal counsel with matters pertaining to the prosecution of cases
against illegal surface occupants within the area covered by the
company's mineral claims. Gison was likewise tasked to perform
liaison work with several government agencies, which he said
was his expertise.
 Atok did not require Gison to report to its office on a regular basis,
except when occasionally requested by the management to discuss
matters needing his expertise as a consultant. Gison received a
retainer fee of P3,000 a month for his services.
 The parties executed a retainer agreement, but such agreement was
misplaced and can no longer be found. This arrangement
continued for the next eleven years.
 Sometime thereafter, since Gison was getting old, he requested that
Atok cause his registration with the Social Security System (SSS),
but petitioner did not accede to his request. He later reiterated his
request but it was ignored by respondent considering that he was
only a retainer/consultant.
 February 4, 2003 - Gison led a Complaint with the SSS against
petitioner for the latter's refusal to cause his registration with the
SSS. On the same date, Mario Cera, in his capacity as resident
Manager of Atok issued a memorandum advising Gison that within
30 days from receipt thereof, Atok is terminating his retainer
contract since his service are no longer necessary.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 February 21, 2003 – Gison filed a Complaint for illegal dismissal,
unfair labor practice, underpayment of wages, non-payment of 13th
month pay, vacation pay and sick leave pay with the NLRC,
Regional Arbitration Branch, Cordillera Administrative Region
against Atok Big Wedge Company, Mario Cere and Teofilo
Asuncion Jr.
 Labor Arbiter Rolando D. Gambito rendered a Decision ruling in
favor of the petitioner. Finding no employer-employee relationship
between petitioner and respondent, the Labor Arbiter dismissed the
complaint for lack of merit.
 Upon appeal to the NLRC, the NLRC issued a Resolution affirming
the decision of the Labor Arbiter. The MR was likewise denied.
 Aggrieved, Gison filed a petition for review under Rule 65 of the
Rules of Court before the CA. The CA annulled and set aside the
decision of the NLRC.
 In ruling in favor of the respondent, the CA opined, among other
things, that both the Labor Arbiter and the NLRC may have
overlooked Article 280 of the Labor Code, or the provision which
distinguishes between two kinds of employees, i.e., regular and
casual employees. Applying the provision to the respondent's case,
he is deemed a regular employee of the petitioner after the lapse of
one year from his employment. Considering also that respondent
had been performing services for the petitioner for eleven years,
respondent is entitled to the rights and privileges of a regular
employee.
ISSUE: Whether or not an employer-employee relationship exists between
Atok and Gison
HELD: NO. There is no employer-employee relationship between Atok and
Gison.
 Well-entrenched is the doctrine that the existence of an employer-
employee relationship is ultimately a question of fact and that
the findings thereon by the Labor Arbiter and the NLRC shall
be accorded not only respect but even finality when supported
by substantial evidence. Being a question of fact, the determination
whether such a relationship exists between petitioner and respondent
was well within the province of the Labor Arbiter and the NLRC.
Being supported by substantial evidence, such determination should
have been accorded great weight by the CA in resolving the issue.
17
 To ascertain the existence of an employer-employee relationship
jurisprudence has invariably adhered to the four-fold test, to wit:
(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power
to control the employee's conduct, or the so-called "control
test." Of these four, the last one is the most important. The so-called
"control test" is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-
employee relationship. Under the control test, an employer-
employee relationship exists where the person for whom the services
are performed reserves the right to control not only the end achieved,
but also the manner and means to be used in reaching that end.
 Applying the aforementioned test, an employer-employee
relationship is apparently absent in the case at bar. Among other
things, respondent was not required to report everyday during
regular office hours of petitioner. Respondent's monthly retainer
fees were paid to him either at his residence or a local
restaurant. More importantly, petitioner did not prescribe the
manner in which respondent would accomplish any of the tasks
in which his expertise as a liaison officer was needed; respondent
was left alone and given the freedom to accomplish the tasks using
his own means and method. Respondent was assigned tasks to
perform, but petitioner did not control the manner and methods
by which respondent performed these tasks. Verily, the absence
of the element of control on the part of the petitioner engenders a
conclusion that he is not an employee of the petitioner.
 Moreover, the absence of the parties' retainership agreement
notwithstanding, respondent clearly admitted that petitioner hired
him in a limited capacity only and that there will be no employer-
employee relationship between them.
 Respondent was well aware of the agreement that he was hired
merely as a liaison or consultant of the petitioner and he agreed to
perform tasks for the petitioner on a temporary employment status
only. However, respondent anchors his claim that he became a
regular employee of the petitioner based on his contention that the
"temporary" aspect of his job and its "limited" nature could not have
lasted for eleven years unless some time during that period, he
became a regular employee of the petitioner by continually
performing services for the company.
 Contrary to the conclusion of the CA, respondent is not an

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
employee, much more a regular employee of petitioner. The
appellate court's premise that regular employees are those who
perform activities which are desirable and necessary for the business
of the employer is not determinative in this case. In fact, any
agreement may provide that one party shall render services for and
in behalf of another, no matter how necessary for the latter's
business, even without being hired as an employee. Hence,
respondent's length of service and petitioner's repeated act of
assigning respondent some tasks to be performed did not result to
respondent's entitlement to the rights and privileges of a regular
employee.
 Furthermore, despite the fact that petitioner made use of the services
of respondent for eleven years, he still cannot be considered as a
regular employee of petitioner. Article 280 of the Labor Code, in
which the lower court used to buttress its findings that respondent
became a regular employee of the petitioner, is not applicable in the
case at bar. Indeed, the Court has ruled that said provision is not
the yardstick for determining the existence of an employment
relationship because it merely distinguishes between two kinds
of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits,
to join or form a union, or to security of tenure; it does not apply
where the existence of an employment relationship is in dispute. It
is, therefore, erroneous on the part of the Court of Appeals to rely
on Article 280 in determining whether an employer-employee
relationship exists between respondent and the petitioner.
 Considering that there is no employer-employee relationship
between the parties, the termination of respondent's services by the
petitioner after due notice did not constitute illegal dismissal
warranting his reinstatement and the payment of full backwages,
allowances and other benefits.
15- Dumpit-Murillo v. Court of Appeals
[G.R. No. 164652, June 8, 2007]
Parties: Thelma Dumpit-Murillo (petitioner)
Court of Appeals, Associated Broadcasting Company, Jose Javier
and Edward Tan (respondents)
18
FACTS:
 October 2, 1995 – Associated Broadcasting Company (ABC) hired
Thelma Dumpit-Murillo as a newscaster and co-anchor for Balitang-
Balita, an early evening news program under Talent Contract No.
NT95-1805. The contract was for a period of three months. It was
renewed under Talent Contracts Nos, NT95-1915, NT96-3002,
NT98-4984 and NT99-5649. In addition, Dumpit’s services were
engaged for the program “Live on Five”.
 September 30, 1999 – After four years of repeated renewals,
Dumpit’s talent contract expired.
 Two weeks after the expiration of the last contract, Dumpit sent a
letter to Mr. Jose Javier, Vice President for News and Public Affairs
of ABC, informing the latter that she was still interested in renewing
her contract subject to a salary increase. Thereafter, petitioner
stopped reporting for work.
 On November 5, 1999, she wrote Mr. Javier another letter:
 Dear Mr. Javier, On October 20, 1999, I wrote you a letter
in answer to your query by way of a marginal note "what
terms and conditions" in response to my first letter dated
October 13, 1999. To date, or for more than fifteen (15)
days since then, I have not received any formal written
reply . . . In view hereof, should I not receive any formal
response from you until Monday, November 8, 1999, I will
deem it as a constructive dismissal of my services.
 A month later, Dumpit sent a demand letter to ABC, demanding:
(a) reinstatement to her former position; (b) payment of unpaid
wages for services rendered from September 1 to October 20,
1999 and full backwages; (c) payment of 13th month pay,
vacation/sick/service incentive leaves and other monetary
benefits due to a regular employee starting March 31, 1996.
 ABC replied that a check covering petitioner's talent fees for
September 16 to October 20, 1999 had been processed and prepared,
but that the other claims of petitioner had no basis in fact or in law.
 December 20, 1999 – Dumpit filed a complaint against ABC, Mr.
Javier and Mr. Edward Tan for illegal constructive dismissal,
nonpayment of salaries, overtime pay, premium pay, separation pay,
holiday pay, service incentive leave pay, vacation/sick leaves and
13th month pay. She likewise demanded payment for moral,
exemplary and actual damages, as well as for attorney’s fees.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 The parties agreed to submit the case for resolution after settlement
failed during the mandatory conference/conciliation. On March 29,
2000, the Labor Arbiter dismissed the complaint.
 On appeal, the NLRC reversed the Labor Arbiter in a Resolution
dated August 30, 2000. The NLRC held that an employer-employee
relationship existed between petitioner and ABC; that the subject
talent contract was void; that the petitioner was a regular employee
illegally dismissed; and that she was entitled to reinstatement and
back wages or separation pay, aside from 13th month pay and
service incentive leave pay, moral and exemplary damages and
attorney's fees.
 After its motion for reconsideration was denied, ABC elevated the
case to the Court of Appeals in a petition for certiorari under Rule
65. The petition was first dismissed for failure to attach particular
documents, but was reinstated on grounds of the higher interest of
justice. Thereafter, the appellate court ruled that the NLRC
committed grave abuse of discretion, and reversed the decision of
the NLRC.
 The appellate court reasoned that petitioner should not be
allowed to renege from the stipulations she had voluntarily
and knowingly executed by invoking the security of tenure
under the Labor Code. According to the appellate court,
petitioner was a fixed-term employee and not a regular
employee within the ambit of Article 280 of the Labor
Code because her job, as anticipated and agreed upon, was
only for a specified time.
ISSUE: Whether or not the CA committed a reversible error in its Decision
HELD: YES. CA committed a reversible error in its Decision.
Private respondents ‘contention: The Court of Appeals did not err when it
upheld the validity of the talent contracts voluntarily entered into by
petitioner. It further stated that prevailing jurisprudence has recognized and
sustained the absence of employer-employee relationship between a talent
and the media entity which engaged the talent's services on a per talent
contract basis, citing the case of Sonza v. ABS-CBN Broadcasting
Corporation.
Dumpit’s argument: An employer-employee relationship was created when
19
the private respondents started to merely renew the contracts repeatedly
fifteen times or for four consecutive years.
 The Court agrees with Dumpit. The Court of Appeals committed
reversible error when it held that petitioner was a fixed-term
employee. Petitioner was a regular employee under
contemplation of law. The practice of having fixed-term
contracts in the industry does not automatically make all talent
contracts valid and compliant with labor law. The assertion that
a talent contract exists does not necessarily prevent a regular
employment status.
 Further, the Sonza case is not applicable. In Sonza, the television
station did not instruct Sonza how to perform his job. How Sonza
delivered his lines, appeared on television, and sounded on radio
were outside the television station's control. Sonza had a free hand
on what to say or discuss in his shows provided he did not attack the
television station or its interests. Clearly, the television station did
not exercise control over the means and methods of the performance
of Sonza's work.
 In the case at bar, ABC had control over the performance of
petitioner's work. Noteworthy too, is the comparatively low P28,000
monthly pay of petitioner vis the P300,000 a month salary of Sonza,
that all the more bolsters the conclusion that petitioner was not in
the same situation as Sonza.
 In Manila Water Company, Inc. v. Pena, the Court said that the
elements to determine the existence of an employment relationship
are: (a) the selection and engagement of the employee, (b) the
payment of wages, (c) the power of dismissal, and (d) the
employer's power to control. The most important element is the
employer's control of the employee's conduct, not only as to the
result of the work to be done, but also as to the means and methods
to accomplish it.
 The duties of petitioner as enumerated in her employment contract
indicate that ABC had control over the work of petitioner. Aside
from control, ABC also dictated the work assignments and payment
of petitioner's wages. ABC also had power to dismiss her. All these
being present, clearly, there existed an employment relationship
between petitioner and ABC.
 Concerning regular employment, the law provides for two kinds of
employees, namely: (1) those who are engaged to perform

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
activities which are usually necessary or desirable in the usual
business or trade of the employer; and (2) those who have
rendered at least one year of service, whether continuous or
broken, with respect to the activity in which they are employed.
In other words, regular status arises from either the nature of work
of the employee or the duration of his employment.
 In our view, the requisites for regularity of employment have been
met in the instant case. Gleaned from the description of the scope of
services aforementioned, petitioner's work was necessary or
desirable in the usual business or trade of the employer which
includes, as a pre-condition for its enfranchisement, its
participation in the government's news and public information
dissemination. In addition, her work was continuous for a period
of four years. This repeated engagement under contract of hire is
indicative of the necessity and desirability of the petitioner's work in
private respondent ABC's business.
 The contention of the appellate court that the contract was
characterized by a valid fixed- period employment is untenable. For
such contract to be valid, it should be shown that the fixed period
was knowingly and voluntarily agreed upon by the parties. There
should have been no force, duress or improper pressure brought to
bear upon the employee; neither should there be any other
circumstance that vitiates the employee's consent. It should
satisfactorily appear that the employer and the employee dealt with
each other on more or less equal terms with no moral dominance
being exercised by the employer over the employee. Moreover,
fixed-term employment will not be considered valid where, from the
circumstances, it is apparent that periods have been imposed to
preclude acquisition of tenurial security by the employee.
 In the case at bar, it does not appear that the employer and employee
dealt with each other on equal terms. Understandably, the petitioner
could not object to the terms of her employment contract because
she did not want to lose the job that she loved and the workplace that
she had grown accustomed to, which is exactly what happened when
she finally manifested her intention to negotiate. Being one of the
numerous newscasters/broadcasters of ABC and desiring to keep her
job as a broadcasting practitioner, petitioner was left with no choice
but to affix her signature of conformity on each renewal of her
contract as already prepared by private respondents; otherwise,
private respondents would have simply refused to renew her
20
contract. Patently, the petitioner occupied a position of weakness
vis-à-vis the employer. Moreover, private respondents' practice of
repeatedly extending petitioner's 3-month contract for four years is
a circumvention of the acquisition of regular status. Hence, there
was no valid fixed-term employment between petitioner and private
respondents.
 While this Court has recognized the validity of fixed-term
employment contracts in a number of cases, it has consistently
emphasized that when the circumstances of a case show that the
periods were imposed to block the acquisition of security of
tenure, they should be struck down for being contrary to law,
morals, good customs, public order or public policy.
 As a regular employee, petitioner is entitled to security of tenure
and can be dismissed only for just cause and after due
compliance with procedural due process. Since private
respondents did not observe due process in constructively
dismissing the petitioner, the Court hold that there was an illegal
dismissal.
16- Bernarte v. PBA
[G.R. No. 192084, September 14, 2011]
Parties: Jose Mel Bernarte (petioner)
Philippine Basketball Association (PBA), Jose Emmanuel M. Eala
and Perry Martinez (respondents)
FACTS:
 Complainants (Jose Mel Bernarte and Renato Guevarra) aver that
they were invited to join the PBA as referees. During the
leadership of Commissioner Emilio Bernardino, they were made to
sign contracts on a year-to-year basis. During the term of
Commissioner Eala, however, changes were made on the terms of
their employment.
 Complainant Bernarte, for instance, was not made to sign a
contract during the first conference of the All-Filipino Cup
which was from February 23, 2003 to June 2003. It was only
during the second conference when he was made to sign a one-and-
a-half-month contract for the period July 1 to August 5, 2003. I
 On January 15, 2004, Bernarte received a letter from the Office of
the Commissioner advising him that his contract would not be

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
renewed citing his unsatisfactory performance on and off the court.
It was a total shock for Bernarte who was awarded Referee of the
year in 2003. He felt that the dismissal was caused by his refusal to
fix a game upon order of Ernie De Leon.
 On the other hand, complainant Guevarra alleges that he was invited
to join the PBA pool of referees in February 2001. On March 1,
2001, he signed a contract as trainee. Beginning 2002, he signed a
yearly contract as Regular Class C referee. On May 6, 2003,
respondent Martinez issued a memorandum to Guevarra expressing
dissatisfaction over his questioning on the assignment of referees
officiating out-of-town games. Beginning February 2004, he was no
longer made to sign a contract.
 Respondents’ contention: that complainants entered into two
contracts of retainer with the PBA in the year 2003. The first
contract was for the period January 1, 2003 to July 15, 2003; and the
second was for September 1 to December 2003. After the lapse of
the latter period, PBA decided not to renew their contracts.
Complainants were not illegally dismissed because they were not
employees of the PBA. Their respective contracts of retainer were
simply not renewed. PBA had the prerogative of whether or not to
renew their contracts, which they knew were fixed.
 March 31, 2005 Decision – Labor Arbiter declared Bernarte an
employee whose dismissal by respondents were illegal.
Accordingly, the Labor Arbiter ordered the reinstatement of
Bernarte and the payment of back wages, moral and exemplary
damages and attorney’s fees. This was affirmed by the NLRC
 Respondents led a petition for certiorari with the Court of Appeals,
which overturned the decisions of the NLRC and Labor Arbiter. The
Court of Appeals found petitioner an independent contractor since
respondents did not exercise any form of control over the means and
methods by which petitioner performed his work as a basketball
referee.
ISSUE: Whether or not there exists an employer-employee relationship
between the parties.
HELD: No. There exists no employer-employee relationship between the
parties.
 The existence of an employer-employee relationship is ultimately a
21
question of fact. As a general rule, factual issues are beyond the
province of this Court. However, this rule admits of exceptions, one
of which is where there are conflicting findings of fact between the
Court of Appeals, on one hand, and the NLRC and Labor Arbiter,
on the other, such as in the present case.
 To determine the existence of an employer-employee relationship,
case law has consistently applied the four-fold test, to wit: (a) the
selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to
control the employee on the means and methods by which the work
is accomplished. The so-called "control test" is the most important
indicator of the presence or absence of an employer-employee
relationship.
 In this case, PBA admits repeatedly engaging petitioner's services,
as shown in the retainer contracts. PBA pays petitioner a retainer
fee, exclusive of per diem or allowances, as stipulated in the retainer
contract. PBA can terminate the retainer contract for petitioner's
violation of its terms and conditions. However, respondents argue
that the all-important element of control is lacking in this case,
making petitioner an independent contractor and not an employee of
respondents.
 Petitioner contends otherwise. Petitioner asserts that he is an
employee of respondents since the latter exercise control over the
performance of his work. Petitioner cites the following stipulations
in the retainer contract which evidence control: (1) respondents
classify or rate a referee; (2) respondents require referees to attend
all basketball games organized or authorized by the PBA, at least
one hour before the start of the first game of each day; (3)
respondents assign petitioner to officiate ballgames, or to act as
alternate referee or substitute; (4) referee agrees to observe and
comply with all the requirements of the PBA governing the conduct
of the referees whether on or off the court; (5) referee agrees (a) to
keep himself in good physical, mental, and emotional condition
during the life of the contract; (b) to give always his best effort and
service, and loyalty to the PBA, and not to officiate as referee in any
basketball game outside of the PBA, without written prior consent
of the Commissioner; (c) always to conduct himself on and off the
court according to the highest standards of honesty or morality; and
(6) imposition of various sanctions for violation of the terms and
conditions of the contract.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 The foregoing stipulations hardly demonstrate control over the
means and methods by which petitioner performs his work as a
referee officiating a PBA basketball game. The contractual
stipulations do not pertain to, much less dictate, how and when
petitioner will blow the whistle and make calls. On the contrary,
they merely serve as rules of conduct or guidelines in order to
maintain the integrity of the professional basketball league.
 The Court agrees with respondents that once in the playing court,
the referees exercise their own independent judgment, based on the
rules of the game, as to when and how a call or decision is to be
made. The referees decide whether an infraction was committed, and
the PBA cannot overrule them once the decision is made on the
playing court. The referees are the only, absolute, and final authority
on the playing court. Respondents or any of the PBA officers cannot
and do not determine which calls to make or not to make and cannot
control the referee when he blows the whistle because such authority
exclusively belongs to the referees. The very nature of petitioner's
job of officiating a professional basketball game undoubtedly calls
for freedom of control by respondents.
 Moreover, the following circumstances indicate that petitioner is an
independent contractor: (1) the referees are required to report for
work only when PBA games are scheduled, which is three times a
week spread over an average of only 105 playing days a year, and
they officiate games at an average of two hours per game; and (2)
the only deductions from the fees received by the referees are
withholding taxes.
 In other words, unlike regular employees who ordinarily report for
work eight hours per day for five days a week, petitioner is required
to report for work only when PBA games are scheduled or three
times a week at two hours per game. In addition, there are no
deductions for contributions to the Social Security System,
Philhealth or Pag-Ibig, which are the usual deductions from
employees' salaries. These undisputed circumstances buttress the
fact that petitioner is an independent contractor, and not an
employee of respondents.
 Furthermore, the applicable foreign case law declares that a referee
is an independent contractor, whose special skills and independent
judgment are required specifically for such position and cannot
possibly be controlled by the hiring party.
 In addition, the fact that PBA repeatedly hired petitioner does not by
22
itself prove that petitioner is an employee of the former. For a hired
party to be considered an employee, the hiring party must have
control over the means and methods by which the hired party is to
perform his work, which is absent in this case. The continuous
rehiring by PBA of petitioner simply signifies the renewal of the
contract between PBA and petitioner, and highlights the satisfactory
services rendered by petitioner warranting such contract renewal.
Conversely, if PBA decides to discontinue petitioner's services at
the end of the term fixed in the contract, whether for unsatisfactory
services, or violation of the terms and conditions of the contract, or
for whatever other reason, the same merely results in the non-
renewal of the contract, as in the present case. The non- renewal of
the contract between the parties does not constitute illegal dismissal
of petitioner by respondents.
17-Jardin v. NLRC
[G.R. No. 119268, February 23, 2000]
Parties: Angel Jardin, Demetrio Calagos, Urbano Marcos, Rosendo Marco,
Luis De Los Angeles, Joel Ordeniza and Amado Centeno (petitioners)
NLRC and Goodman Taxi (Philjama International Inc.)
(respondents)
FACTS:
 Petitioners were drivers of private respondent, Philjama
International, Inc., a domestic corporation engaged in the operation
of "Goodman Taxi." Petitioners used to drive private respondent's
taxicabs every other day on a 24-hour work schedule under the
boundary system. Under this arrangement, the petitioners earned
an average of P400.00 daily. Nevertheless, private respondent
admittedly regularly deducts from petitioners' daily earnings the
amount of P30.00 supposedly for the washing of the taxi units.
Believing that the deduction is illegal, petitioners decided to form a
labor union to protect their rights and interests.
 Upon learning about the plan of petitioners, private respondent
refused to let petitioners drive their taxicabs when they reported for
work on August 6, 1991, and on succeeding days. Petitioners
suspected that they were singled out because they were the leaders

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
and active members of the proposed union. Aggrieved, petitioners
filed with the labor arbiter a complaint against private respondent
for unfair labor practice, illegal dismissal and illegal deduction of
washing fees.
 In a decision dated August 31, 1992, the labor arbiter dismissed said
complaint for lack of merit.
 On appeal, the NLRC (public respondent herein), in a decision dated
April 28, 1994, reversed and set aside the judgment of the labor
arbiter. The labor tribunal declared that petitioners are employees of
private respondent, and as such, their dismissal must be for just
cause and after due process.
 Private respondent's first motion for reconsideration was denied.
Remaining hopeful, private respondent filed another motion for
reconsideration. This time, public respondent, in its decision dated
October 28, 1994, granted aforesaid second motion for
reconsideration. It ruled that it lacks jurisdiction over the case as
petitioners and private respondent have no employer-employee
relationship.
 Expectedly, petitioners sought reconsideration of the labor tribunal's
latest decision which was denied. Hence, the instant petition.
ISSUE: Whether or not the NLRC acted without or in excess of jurisdiction,
or with grave abuse of discretion in rendering the assailed decision
HELD: YES. NLRC acted without or in excess of jurisdiction, or with grave
abuse of discretion in rendering the assailed decision
 The phrase "grave abuse of discretion amounting to lack or excess
of jurisdiction" has settled meaning in the jurisprudence of
procedure. It means such capricious and whimsical exercise of
judgment by the tribunal exercising judicial or quasi-judicial power
as to amount to lack of power. In labor cases, this Court has declared
in several instances that disregarding rules it is bound to observe
constitutes grave abuse of discretion on the part of labor tribunal.
 In this case before us, private respondent exhausted administrative
remedy available to it by seeking reconsideration of public
respondent's decision dated April 28, 1994, which public respondent
denied. With this motion for reconsideration, the labor tribunal had
ample opportunity to rectify errors or mistakes it may have
committed before resort to courts of justice can be had. Thus, when
23
private respondent filed a second motion for reconsideration,
public respondent should have forthwith denied it in accordance
with Rule 7, Section 14 of its New Rules of Procedure which
allows only one motion for reconsideration from the same party.
 The rationale for allowing only one motion for reconsideration from
the same party is to assist the parties in obtaining an expeditious and
inexpensive settlement of labor cases. For obvious reasons, delays
cannot be countenanced in the resolution of labor disputes. The
dispute may involve no less than the livelihood of an employee and
that of his loved ones who are dependent upon him for food, shelter,
clothing, medicine, and education. It may as well involve the
survival of a business or an industry.
 But, there is another compelling reason why we cannot leave
untouched the flip-flopping decisions of the public respondent. As
mentioned earlier, its October 28, 1994 judgment is not in accord
with the applicable decisions of this Court. The labor tribunal’s
reason on reversing its decision goes against prevailing
jurisprudence.
 In a number of cases decided by this Court, it was ruled that the
relationship between jeepney owners/operators on one hand and
jeepney drivers on the other under the boundary system is that
of employer-employee and not of lessor-lessee. The Court
explained that in the lease of chattels, the lessor loses complete
control over the chattel leased although the lessee cannot be reckless
in the use thereof, otherwise he would be responsible for the
damages to the lessor. In the case of jeepney owners/operators and
jeepney drivers, the former exercise supervision and control over the
latter. The management of the business is in the owner's hands. The
owner as holder of the certificate of public convenience must see to
it that the driver follows the route prescribed by the franchising
authority and the rules promulgated as regards its operation. Now,
the fact that the drivers do not receive fixed wages but get only that
in excess of the so-called "boundary" they pay to the owner/operator
is not sufficient to withdraw the relationship between them from that
of employer and employee. The Court has applied by analogy the
abovestated doctrine to the relationships between bus
owner/operator and bus conductor, auto-calesa owner/operator and
driver, and recently between taxi owners/operators and taxi drivers.
Hence, petitioners are undoubtedly employees of private respondent
because as taxi drivers they perform activities which are usually

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
necessary or desirable in the usual business or trade of their
employer.
 As consistently held by this Court, termination of employment
must be effected in accordance with law. The just and
authorized causes for termination of employment are
enumerated under Articles 282, 283 and 284 of the Labor Code.
The requirement of notice and hearing is set-out in Article 277 (b)
of the said Code. Hence, petitioners, being employees of private
respondent, can be dismissed only for just and authorized cause, and
after affording them notice and hearing prior to termination. In the
instant case, private respondent had no valid cause to terminate the
employment of petitioners. Neither were there two (2) written
notices sent by private respondent informing each of the petitioners
that they had been dismissed from work. These lack of valid cause
and failure on the part of private respondent to comply with the twin-
notice requirement underscored the illegality surrounding
petitioners' dismissal.
 Under the law, an employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of
his actual reinstatement. It must be emphasized, though, that recent
judicial pronouncements distinguish between employees illegally
dismissed prior to the effectivity of Republic Act No. 6715 on March
21, 1989, and those whose illegal dismissals were effected after such
date. Thus, employees illegally dismissed prior to March 21,
1989, are entitled to backwages up to three (3) years without
deduction or qualification, while those illegally dismissed after
that date are granted full backwages inclusive of allowances and
other benefits or their monetary equivalent from the time their
actual compensation was withheld from them up to the time of
their actual reinstatement. The legislative policy behind Republic
Act No. 6715 points to "full backwages" as meaning exactly that,
i.e., without deducting from backwages the earnings derived
elsewhere by the concerned employee during the period of his illegal
dismissal. Considering that petitioners were terminated from work
on August 1, 1991, they are entitled to full backwages on the basis
of their last daily earnings.
24
18-Professional Services Inc. v. Court of Appeals
(Same as #8)
[G.R. No. 126297, February 11, 2008]
Parties: 1st Case (G.R. No. 126297)– Professional Services Inc. (petioner) and
Court of Appeals and Enrique Agana (respondents)
2nd Case (G.R. No. 126467) – Natividad (substituted by her children
Marcelino Agana III, Enrique Agana Jr., Emma Agana Andaya,
Jesus Agana and Raymund Agana) and Enrique Agana (petitioners)
and Court of Appeals and Juan Fuentes (respondents)
3rd Case (G.R. No. 127590) – Miguel Ampil (petitioner) and Court
of Appeals and Natividad Agana and Enrique Agana (respondents)
FACTS:
 April 4, 1984 – Natividad Agana was admitted at the Medical City
General Hospital because of difficulty of bowel movement and
bloody anal discharge. Dr. Ampil diagnosed her to be suffering
from “Cancer of the sigmoid.”
 April 11, 1984 - Dr. Ampil, assisted by the medical staff of Medical
City, performed an anterior resection surgery upon her. During the
surgery, he found that the malignancy in her sigmoid area had
spread to her left ovary, necessitating the removal of certain
portions of it. Thus, Dr. Ampil obtained the consent of Atty. Enrique
Agana, Natividad's husband, to permit Dr. Juan Fuentes, respondent
in G.R. No. 126467, to perform hysterectomy upon Natividad. Dr.
Fuentes performed and completed the hysterectomy. Afterwards,
Dr. Ampil took over, completed the operation and closed the
incision.
 However, the operation appeared to be flawed. In the corresponding
Record of Operation dated April 11, 1984, the attending nurses
entered these remarks: sponge count lacking 2
 announced to
surgeon searched done (sic) but to no avail continue for closure.
 After a couple of days, Natividad complained of excruciating pain
in her anal region. She consulted both Dr. Ampil and Dr. Fuentes
about it. They told her that the pain was the natural consequence of
the surgical operation performed upon her. Dr. Ampil recommended
that Natividad consult an oncologist to treat the cancerous nodes
which were not removed during the operation.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 May 9, 1984 - Natividad, accompanied by her husband, went to the
United States to seek further treatment. After four (4) months of
consultations and laboratory examinations, Natividad was told that
she was free of cancer. Hence, she was advised to return to the
Philippines.
 August 31, 1984 - Natividad flew back to the Philippines, still
suffering from pains. Two (2) weeks thereafter, her daughter found
a piece of gauze protruding from her vagina. Dr. Ampil was
immediately informed. He proceeded to Natividad's house where he
managed to extract by hand a piece of gauze measuring 1.5
inches in width. Dr. Ampil then assured Natividad that the pains
would soon vanish.
 Despite Dr. Ampil's assurance, the pains intensified, prompting
Natividad to seek treatment at the Polymedic General Hospital.
While confined thereat, Dr. Ramon Gutierrez detected the presence
of a foreign object in her vagina — a foul-smelling gauze
measuring 1.5 inches in width. The gauze had badly infected her
vaginal vault. A recto-vaginal fistula had formed in her reproductive
organ which forced stool to excrete through the vagina. Another
surgical operation was needed to remedy the situation. Thus, in
October 1984, Natividad underwent another surgery.
 November 12, 1984 - Natividad and her husband led with the
Regional Trial Court, Branch 96, Quezon City a complaint for
damages against PSI (owner of Medical City), Dr. Ampil and Dr.
Fuentes.
 February 16, 1986 - pending the outcome of the above case,
Natividad died. She was duly substituted by her above-named
children (the Aganas).
 March 17, 1993 - the trial court rendered judgment in favor of
spouses Agana nding PSI, Dr. Ampil and Dr. Fuentes jointly and
severally liable. On appeal, the Court of Appeals, in its Decision
dated September 6, 1996, affirmed the assailed judgment with
modification in the sense that the complaint against Dr. Fuentes was
dismissed.
 In its motion for reconsideration, PSI contends that the Court erred
in finding it liable under Article 2180 of the Civil Code, there being
no employer-employee relationship between it and its consultant,
Dr. Ampil. PSI stressed that the Court's Decision in Ramos holding
that "an employer-employee relationship in effect exists between
hospitals and their attending and visiting physicians for the purpose
25
of apportioning responsibility" had been reversed in a subsequent
Resolution.
ISSUE: Whether or not PSI’s contention has merit
HELD: No. PSI’s motion lacks merit.
 As earlier mentioned, the First Division, in its assailed Decision,
ruled that an employer-employee relationship "in effect" exists
between the Medical City and Dr. Ampil. Consequently, both are
jointly and severally liable to the Aganas.
 This ruling proceeds from the following ratiocination in Ramos: The
Court now discusses the responsibility of the hospital in this
particular incident. The unique practice (among private hospitals) of
filling up specialist staff with attending and visiting "consultants,"
who are allegedly not hospital employees, presents problems in
apportioning responsibility for negligence in medical malpractice
cases. However, the dificulty is only more apparent than real.
o In the first place, hospitals exercise significant control in
the hiring and firing of consultants and in the conduct
of their work within the hospital premises. Doctors who
apply for "consultant" slots, visiting or attending, are
required to submit proof of completion of residency, their
educational qualifications; generally, evidence of
accreditation by the appropriate board (diplomate),
evidence of fellowship in most cases, and references. These
requirements are carefully scrutinized by members of the
hospital administration or by a review committee set up by
the hospital who either accept or reject the application.
This is particularly true with respondent hospital.
o In other words, private hospitals hire, fire and exercise real
control over their attending and visiting "consultant" staff.
While "consultants" are not, technically employees, a point
which respondent hospital asserts in denying all
responsibility for the patient's condition, the control
exercised, the hiring, and the right to terminate consultants
all fulfill the important hallmarks of an employer-employee
relationship, with the exception of the payment of wages.
In assessing whether such a relationship in fact exists, the
control test is determining. Accordingly, on the basis of the

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
foregoing, we rule that for the purpose of allocating
responsibility in medical negligence cases, an employer-
employee relationship in effect exists between hospitals
and their attending and visiting physicians. This being
the case, the question now arises as to whether or not
respondent hospital is solidarily liable with respondent
doctors for petitioner's condition.
 The basis for holding an employer solidarily responsible for the
negligence of its employee is found in Article 2180 of the Civil Code
which considers a person accountable not only for his own acts but
also for those of others based on the former's responsibility under a
relationship of partia ptetas.
 Clearly, in Ramos, the Court considered the peculiar relationship
between a hospital and its consultants on the bases of certain factors.
One such factor is the "control test" wherein the hospital exercises
control in the hiring and ring of consultants, like Dr. Ampil, and in
the conduct of their work.
 Actually, contrary to PSI's contention, the Court did not reverse
its ruling in Ramos. What it clarified was that the De Los Santos
Medical Clinic did not exercise control over its consultant, hence,
there is no employer-employee relationship between them. Thus,
despite the granting of the said hospital's motion for reconsideration,
the doctrine in Ramos stays, i.e., for the purpose of allocating
responsibility in medical negligence cases, an employer-employee
relationship exists between hospitals and their consultants.
 In the instant cases, PSI merely offered ageneral denial of
responsibility, maintaining that consultants, like Dr. Ampil, are
"independent contractors," not employees of the hospital. Even
assuming that Dr. Ampil is not an employee of Medical City, but an
independent contractor, still the said hospital is liable to the Aganas.
 PSI argues that the doctrine of apparent authority cannot apply to
these cases because spouses Agana failed to establish proof of their
reliance on the representation of Medical City that Dr. Ampil is its
employee. The argument lacks merit. Atty. Agana categorically
testifeid that one of the reasons why he chose Dr. Ampil was that he
knew him to be a staff member of Medical City, a prominent and
known hospital. Clearly, PSI is estopped from passing the blame
solely to Dr. Ampil. Its act of displaying his name and those of the
other physicians in the public directory at the lobby of the hospital
amounts to holding out to the public that it offers quality medical
26
service through the listed physicians. This justifies Atty. Agana's
belief that Dr. Ampil was a member of the hospital's staff. It must
be stressed that under the doctrine of apparent authority, the question
in every case is whether the principal has by his voluntary act placed
the agent in such a situation that a person of ordinary prudence,
conversant with business usages and the nature of the particular
business, is justified in presuming that such agent has authority to
perform the particular act in question. In these cases, the
circumstances yield a positive answer to the question.
 In sum, the Court found no merit in the motion for reconsideration,
and denied PSI’s motion with finality.
19- Locsin v. PLDT (Same as #5)
[G.R. No. 185251, October 2, 2009]
Parties: Raul G. Locsin and Eddie B. Tomaquin (petitioners)
Philippine Long Distance Company (respondent)
FACTS:
 November 1, 1990 – PLDT and the Security and Safety Corporation
of the Philippines (SSCP) entered into a Security Services
Agreement whereby SSCP would provide armed security guards to
PLDT to be assigned to its various offices.
 Pursuant to such agreement, petitioners Raul Locsin and Eddie
Tomaquin, among other security guards, were posted at a PLDT
office.
 August 30, 2001 – PLDT issued a letter dated August 30, 2001
terminating the Agreement effective October 1, 2001.
 Despite the termination of the Agreement, however, petitioners
continued to secure the premises of their assigned office. They
were allegedly directed to remain at their post by representatives of
respondent. In support of their contention, petitioners provided the
Labor Arbiter with copies of petitioner Locsin's pay slips for the
period of January to September 2002.
 September 30, 2002 – Locsin and Tomaquin’s services were
terminated.
 Thus, petitioners led a complaint before the Labor Arbiter for illegal
dismissal and recovery of money claims such as overtime pay,
holiday pay, premium pay for holiday and rest day, service incentive
leave pay, Emergency Cost of Living Allowance, and moral and

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
exemplary damages against PLDT.
 The Labor Arbiter rendered a Decision finding PLDT liable for
illegal dismissal. It was explained in the Decision that petitioners
were found to be employees of PLDT and not of SSCP. Such
conclusion was arrived at with the factual finding that petitioners
continued to serve as guards of PLDT's offices. As such employees,
petitioners were entitled to substantive and procedural due process
before termination of employment. The Labor Arbiter held that
respondent failed to observe such due process requirements.
 PLDT appealed the above Decision to the NLRC which rendered a
Resolution affirming in toto the Arbiter's Decision. Thus, PLDT led
a Motion for Reconsideration of the NLRC's Resolution which was
also denied.
 Consequently, PLDT led a Petition for Certiorari with the CA asking
for the nullification of the Resolution issued by the NLRC as well
as the Labor Arbiter's Decision. The CA rendered the assailed
decision granting PLDT's petition and dismissing petitioners'
complaint.
 The CA applied the four-fold test in order to determine the existence
of an employer-employee relationship between the parties but did
not find such relationship. It determined that SSCP was not a labor-
only contractor and was an independent contractor having
substantial capital to operate and conduct its own business. The CA
further bolstered its decision by citing the Agreement whereby it
was stipulated that there shall be no employer-employee relationship
between the security guards and PLDT.
ISSUE: Whether or not petitioners became employees of respondent after the
Agreement between SSCP and respondent was terminated C
HELD: YES. Petitioners became employees of respondent after the
Agreement between SSCP and respondent was terminated.
 Notably, respondent does not deny the fact that petitioners remained
in the premises of their offices even after the Agreement was
terminated. And it is this fact that must be explained.
 To recapitulate, the CA, in rendering a decision in favor of
respondent, found that: (1) petitioners failed to prove that SSCP was
a labor-only contractor; and (2) petitioners are employees of SSCP
and not of PLDT.
27
 In arriving at such conclusions, the CA relied on the provisions of
the Agreement, wherein SSCP undertook to supply PLDT with the
required security guards, while furnishing PLDT with a performance
bond in the amount of PhP707,000. Moreover, the CA gave weight
to the provision in the Agreement that SSCP warranted that it "carry
on an independent business and has substantial capital or investment
in the form of equipment, work premises, and other materials which
are necessary in the conduct of its business".
 Further, in determining that no employer-employee relationship
existed between the parties, the CA quoted the express provision of
the Agreement, stating that no employer-employee relationship
existed between the parties herein. The CA disregarded the pay slips
of Locsin considering that they were in fact issued by SSCP and not
by PLDT.
 From the foregoing explanation of the CA, the fact remains that
petitioners remained at their post after the termination of the
Agreement. Notably, in its Comment dated March 10, 2009,
respondent never denied that petitioners remained at their post until
September 30, 2002. While respondent denies the alleged
circumstances stated by petitioners, that they were told to remain at
their post by respondent's Security Department and that they were
informed by SSCP Operations Officer Eduardo Juliano that their
salaries would be coursed through SSCP as per arrangement with
PLDT, it does not state why they were not made to vacate their posts.
Respondent said that it did not know why petitioners remained at
their posts.
 In the ordinary course of things, responsible business owners or
managers would not allow security guards of an agency with
whom the owners or managers have severed ties with to continue
to stay within the business' premises. This is because upon the
termination of the owners' or managers' agreement with the security
agency, the agency's undertaking of liability for any damage that the
security guard would cause has already been terminated. Thus, in
the event of an accident or otherwise damage caused by such
security guards, it would be the business owners and/or managers
who would be liable and not the agency. The business owners or
managers would, therefore, be opening themselves up to liability for
acts of security guards over whom the owners or managers allegedly
have no control.
 At the very least, responsible business owners or managers would

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
inquire or learn why such security guards were remaining at their
posts, and would have a clear understanding of the circumstances of
the guards' stay. It is but logical that responsible business owners or
managers would be aware of the situation in their premises.
 The Court pointed out that with respondent's hypothesis, it would
seem that SSCP was paying petitioners' salaries while securing
respondent's premises despite the termination of their Agreement.
Obviously, it would only be respondent that would bene t from such
a situation. And it is seriously doubtful that a security agency that
was established for pro t would allow its security guards to secure
respondent's premises when the Agreement was already terminated.
 From the foregoing circumstances, reason dictates that we
conclude that petitioners remained at their post under the
instructions of respondent. The Court can further conclude that
respondent dictated upon petitioners that the latter perform
their regular duties to secure the premises during operating
hours. This, to our mind and under the circumstances, is
sufficient to establish the existence of an employer-employee
relationship. Certainly, the facts as narrated by petitioners are
more believable than the irrational denials made by respondent.
 To reiterate, while respondent and SSCP no longer had any legal
relationship with the termination of the Agreement, petitioners
remained at their post securing the premises of respondent while
receiving their salaries, allegedly from SSCP. Clearly, such a
situation makes no sense, and the denials proffered by respondent
do not shed any light to the situation. It is but reasonable to conclude
that, with the behest and, presumably, directive of respondent,
petitioners continued with their services. Evidently, such are indicia
of control that respondent exercised over petitioners.
 Such power of control has been explained as the "right to control
not only the end to be achieved but also the means to be used in
reaching such end". With the conclusion that respondent directed
petitioners to remain at their posts and continue with their duties, it
is clear that respondent exercised the power of control over
them; thus, the existence of an employer-employee relationship.
 The Court reiterated the importance of control as the most important
element by citing Tongko v. The Manufacturers Life Insurance Co.
[Please see ruling of this case in the separated digest for this case].
 Both the Labor Arbiter and NLRC found that respondent did not
observe such due process requirements. Having failed to do so,
28
respondent is guilty of illegal dismissal.
 Thus, the Court set aside the CA’s ruling and reinstated the
labor arbiter’s decision.
20-Ymbong v. ABS-CBN (Same as #7)
[G.R. No. 184885, March 7, 2012]
Parties:
Petitioner: Ernesto Ymbong
Respondents: ABSCBN, Veneranda Sy, Dante Luzon
Facts:
 Petitioner Ymbong worked for ABSCBN Cebu. So is Leandro
Patalinhug (di ko na idiscuss case nya kasi di naman sya nag appeal)
 ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or
the Policy on Employees Seeking Public Office. The pertinent
portions read:
1. Any employee who intends to run for any
public office position, must file his/her
letter of resignation, at least thirty (30)
days prior to the official filing of the
certificate of candidacy either for
national or local election.
xxxx
3. Further, any employee who intends to join a
political group/party or even with no
political affiliation but who intends to
openly and aggressively campaign for a
candidate or group of candidates (e.g.
publicly speaking/endorsing candidate,
recruiting campaign workers, etc.) must
file a request for leave of absence
subject to managements approval. For
this particular reason, the employee
should file the leave request at least
thirty (30) days prior to the start of the
planned leave period.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 Because of the impending May 1998 elections and based on his
immediate recollection of the policy at that time, Dante Luzon,
Assistant Station Manager of DYAB issued the following
memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any
employee/talent who wants to run for any position in the
coming election will have to file a leave of absence the
moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to
this company will then be temporarily suspended for the
entire campaign/election period.
 Luzon, however, admitted that upon double-checking of the
exact text of the policy and subsequent confirmation with the
ABS-CBN Head Office, he saw that the policy actually required
suspension for those who intend to campaign for a political
party or candidate and resignation for those who will actually
run in the elections.
 Luzon claims that Ymbong approached him and told him that
he would leave radio for a couple of months because he will
campaign for the administration ticket. It was only after the
elections that they found out that Ymbong actually ran for
public office himself at the eleventh hour.
 Ymbong, on the other hand, claims that in accordance with the
March 25, 1998 Memorandum, he informed Luzon through a
letter that he would take a few months leave of absence since
he was running for councilor of Lapu-Lapu City.
 Unfortunately, both Ymbong and Patalinghug lost in the May
1998 elections.
 Later, Ymbong and Patalinghug both tried to come back to
ABS-CBN Cebu. According to Luzon, he informed them that
they cannot work there anymore because of company
29
policy. This was stressed even in subsequent meetings and they
were told that the company was not allowing any
exceptions. ABS-CBN, however, agreed out of pure liberality
to give them a chance to wind up their participation in the radio
drama, Nagbabagang Langit, since it was rating well and to
avoid an abrupt ending.
 Ymbong in contrast contended that after the expiration of his
leave of absence, he reported back to work as a regular talent
and in fact continued to receive his salary. On September 14,
1998, he received a memorandum stating that his services are
being terminated immediately, much to his surprise. Thus, he
filed an illegal dismissal complaint
 ABS-CBN contended that they are not employees but talents as
evidenced by their talent contracts. However, notwithstanding
their status, ABS-CBN has a standing policy on persons
connected with the company whenever they will run for public
office
 Labor Arbiter: illegal dismissal; there exists an employer employee
relationship
o there exists an employer-employee relationship between
ABS-CBN and Ymbong and Patalinghug considering the
stipulations in their appointment letters/talent
contracts. The Labor Arbiter noted particularly that the
appointment letters/talent contracts imposed conditions in
the performance of their work, specifically on
attendance and punctuality, which effectively placed
them under the control of ABS-CBN.
 NLRC: ABSCBN should reinstate Ymbong with backwages. The
NLRC also held that ABS-CBN wielded the power of control over
Ymbong and Patalinghug, thereby proving the existence of an
employer-employee relationship between them.
 ABSCBN filed an MR. Denied. Filed a petition for certiorari with
CA
 CA: declared Ymbong resigned from employment and not to have
been illegally dismissed. The award of full back wages in his favor
was deleted accordingly.
o The CA ruled that ABS-CBN is estopped from claiming
that Ymbong was not its employee after applying the
provisions of Policy No. HR-ER-016 to him. It noted that
said policy is entitled Policy on Employees Seeking Public

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
Office and the guidelines contained therein specifically
pertain to employees and did not even mention talents or
independent contractors. It held that it is a complete
turnaround on ABS-CBNs part to later argue that Ymbong
is only a radio talent or independent contractor and not its
employee. By applying the subject company policy on
Ymbong, ABS-CBN had explicitly recognized him to be
an employee and not merely an independent contractor.
Issue: WON Policy No. HR-ER-016 is valid
Held: YES
 We have consistently held that so long as a companys management
prerogatives are exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or
under valid agreements, this Court will uphold them
 In the instant case, ABS-CBN validly justified the implementation
of Policy No. HR-ER-016. It is well within its rights to ensure that
it maintains its objectivity and credibility and freeing itself from any
appearance of impartiality so that the confidence of the viewing and
listening public in it will not be in any way eroded. Even as the law
is solicitous of the welfare of the employees, it must also protect the
right of an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own
business affairs to achieve its purpose cannot be denied.[
Issue: WON Policy No. HR-ER-016 was superseded by the March 25,
1998 Memorandum
Held: NO. CA correctly ruled that though Luzon, as Assistant Station
Manager for Radio of ABS-CBN, has policy-making powers in relation to his
principal task of administering the networks radio station in the Cebu region,
the exercise of such power should be in accord with the general rules and
regulations imposed by the ABS-CBN Head Office to its employees. Clearly,
the March 25, 1998 Memorandum issued by Luzon which only requires
employees to go on leave if they intend to run for any elective position is in
absolute contradiction with Policy No. HR-ER-016 issued by the ABS-CBN
Head Office in Manila which requires the resignation, not only the filing of a
leave of absence, of any employee who intends to run for public
office. Having been issued beyond the scope of his authority, the March 25,
30
1998 Memorandum is therefore void and did not supersede Policy No. HR-
ER-016.
Issue: WON Ymbong is deemed resigned when he ran for councilor
Held: YES. As Policy No. HR-ER-016 is the subsisting company policy and
not Luzons March 25, 1998 Memorandum, Ymbong is deemed resigned
when he ran for councilor.
Ymbongs overt act of running for councilor of Lapu-Lapu City is tantamount
to resignation on his part. He was separated from ABS-CBN not because he
was dismissed but because he resigned. Since there was no termination to
speak of, the requirement of due process in dismissal cases cannot be applied
to Ymbong. Thus, ABS-CBN is not duty-bound to ask him to explain why he
did not tender his resignation before he ran for public office as mandated by
the subject company policy.
21-Chavez v. NLRC
[G.R. No. 146530, January 17, 2005]
Parties:
Petitioner: Pedro Chavez
Respondent: NLRC, Supreme Packaging
Facts:
 The respondent company, Supreme Packaging, Inc., engaged the
services of the petitioner, Pedro Chavez, as truck driver on October
25, 1984.
 As such, the petitioner was tasked to deliver the respondent
companys products from its factory in Mariveles, Bataan, to its
various customers, mostly in Metro Manila. The respondent
company furnished the petitioner with a truck. Most of the
petitioners delivery trips were made at nighttime, commencing at
6:00 p.m. from Mariveles, and returning thereto in the afternoon two
or three days after. The deliveries were made in accordance with the
routing slips issued by respondent company indicating the order,
time and urgency of delivery. Initially, the petitioner was paid the
sum of P350.00 per trip. This was later adjusted to P480.00 per trip
and, at the time of his alleged dismissal, the petitioner was
receiving P900.00 per trip.
 Sometime in 1992, the petitioner expressed to respondent Alvin Lee,
respondent companys plant manager, his (the petitioners) desire to

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
avail himself of the benefits that the regular employees were
receiving such as overtime pay, nightshift differential pay, and 13th
month pay, among others. Although he promised to extend these
benefits to the petitioner, respondent Lee failed to actually do so.
 petitioner filed a complaint for regularization. Before the case could
be heard, respondent company terminated the services of the
petitioner. Consequently, petitioner filed an amended complaint
against the respondents for illegal dismissal, unfair labor practice
and non-payment of overtime pay, nightshift differential pay, 13th
month pay, among others.
 The respondents, for their part, denied the existence of an employer-
employee relationship between the respondent company and the
petitioner. They averred that the petitioner was an independent
contractor as evidenced by the contract of service which he and the
respondent company entered into. The respondents insisted that the
petitioner had the sole control over the means and methods by which
his work was accomplished. He paid the wages of his helpers and
exercised control over them. As such, the petitioner was not entitled
to regularization because he was not an employee of the respondent
company.
 Labor Arbiter: petitioner is a regular employee
 Respondent’s appeal with NLRC, NLRC: affirmed in toto LA
 Respondent’s MR with NLRC, NLRC: reveresed its decision, no
employer employee relationship, petitioner is an independent
contractor
 Petitioner’s MR with NLRC, NLRC: dismissed petitioner
 Petitioner’s appeal with CA, CA: regular employee
o The CA also reasoned that the petitioner could not be
considered an independent contractor since he had no
substantial capital in the form of tools and machinery. In
fact, the truck that he drove belonged to the respondent
company. The CA also observed that the routing slips that
the respondent company issued to the petitioner showed
that it exercised control over the latter. The routing slips
indicated the chronological order and priority of delivery,
the urgency of certain deliveries and the time when the
goods were to be delivered to the customers.
 Respondent’s MR with CA, CA: reversed its ruling
 Hence, this petition by petitioner Chvez
31
Issue: WON there exists an employer-employee relationship
Held: YES
 The elements to determine the existence of an employment
relationship are:
1) the selection and engagement of the employee;
2) the payment of wages;
3) the power of dismissal; and
4) the employers power to control the employees conduct
 The most important element is the employers control of the
employees conduct, not only as to the result of the work to be done,
but also as to the means and methods to accomplish it
1) First. Undeniably, it was the respondents who engaged the services
of the petitioner without the intervention of a third party.
2) Second. That the petitioner was paid on a per trip basis is not
significant. This is merely a method of computing compensation and
not a basis for determining the existence or absence of employer-
employee relationship. One may be paid on the basis of results or
time expended on the work, and may or may not acquire an
employment status, depending on whether the elements of an
employer-employee relationship are present or not. In this case, it
cannot be gainsaid that the petitioner received compensation from
the respondent company for the services that he rendered to the
latter.
3) Third. The respondents power to dismiss the petitioner was inherent
in the fact that they engaged the services of the petitioner as truck
driver. They exercised this power by terminating the petitioners
services albeit in the guise of severance of contractual relation due
allegedly to the latters breach of his contractual obligation.
4) Fourth. Compared to an employee, an independent contractor is
one who carries on a distinct and independent business and
undertakes to perform the job, work, or service on its own
account and under its own responsibility according to its own
manner and method, free from the control and direction of the
principal in all matters connected with the performance of the
work except as to the results thereof

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 Hence, while an independent contractor enjoys
independence and freedom from the control and
supervision of his principal, an employee is subject to the
employers power to control the means and methods by
which the employees work is to be performed and
accomplished
Their right of control was manifested by the following attendant
circumstances:
a. The truck driven by the petitioner belonged to respondent
company;
b. There was an express instruction from the respondents that
the truck shall be used exclusively to deliver respondent
companys good
c. Respondents directed the petitioner, after completion of
each delivery, to park the truck in either of two specific
places only, to wit: at its office in Metro Manila at 2320
Osmea Street, Makati City or at BEPZ, Mariveles,
Bataan and
d. Respondents determined how, where and when the
petitioner would perform his task by issuing to him gate
passes and routing slips. [21]
i. The routing slips indicated on the column
REMARKS, the chronological order and priority
of delivery such as 1st drop, 2nd drop, 3rd drop, etc.
This meant that the petitioner had to deliver the
same according to the order of priority indicated
therein.
ii. The routing slips, likewise, showed whether the
goods were to be delivered urgently or not by the
word RUSH printed thereon.
iii. The routing slips also indicated the exact time as
to when the goods were to be delivered to the
customers as, for example, the words tomorrow
morning was written on slip no. 2776.
32
22- Coco-Cola Bottlers Inc. v. Climaco
[G.R. No. 146881, February 5, 2007]
Parties:
Petitioner: Coca Cola Bottlers and Eric Montinola
Respondent: Dr. Dean Climaco
Facts:
 Respondent Dr. Dean N. Climaco is a medical doctor who was hired
by petitioner Coca-Cola Bottlers Phils., Inc. by virtue of a Retainer
Agreement that stated:
 The Retainer Agreement, which began on January 1, 1988, was
renewed annually. The last one expired on December 31, 1993.
Despite the non-renewal of the Retainer Agreement, respondent
continued to perform his functions as company doctor to Coca-Cola
 It is noted that as early as September 1992, petitioner was already
making inquiries regarding his status with petitioner company.
 Petitioner company, however, did not take any action. Hence,
respondent made another inquiry with (DOLE) Director Dennis P.
Ancheta, Legal Service, DOLE, stated that he believed that an
employer-employee relationship existed between petitioner and
respondent based on the Retainer Agreement and the
Comprehensive Medical Plan, and the application of the "four-fold"
test
 An inquiry was likewise addressed to the Social Security System
(SSS). SSS informed the latter that the legal staff of his office was
of the opinion that the services of respondent partake of the nature
of work of a regular company doctor and that he was, therefore,
subject to social security coverage.
 Respondent inquired from the management of petitioner company
whether it was agreeable to recognizing him as a regular employee.
The management refused to do so.
 On February 24, 1994, respondent filed a Complaint before the
NLRC seeking recognition as a regular employee of petitioner
company and prayed for the payment of all benefits of a regular
employee, including 13th Month Pay, Cost of Living Allowance,
Holiday Pay, Service Incentive Leave Pay, and Christmas Bonus.
 While the complaint was pending before the Labor Arbiter,
respondent received a letter dated March 9, 1995 from petitioner
company concluding their retainership agreement effective thirty

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
(30) days from receipt thereof. This prompted respondent to file a
complaint for illegal dismissal
 Labor Arbiter - dismissed the complaint; no EE relationship because
no power of control, no illegal dismissal
 NLRC - affirmed LA
 MR - denied
 CA - illegal dismissal
 MR - Illegal dismissal
 Hence, this petition
Issue: WON there exists an employer-employee relationship b/n the parties
and termination of respondent is illegal
Held:
 The Court, in determining the existence of an employer-employee
relationship, has invariably adhered to the four-fold test:
1) the selection and engagement of the employee;
2) the payment of wages;
3) the power of dismissal; and
4) the power to control the employee’s conduct, or the so-
called "control test," considered to be the most important
element.
 The Court agrees with the finding of the Labor Arbiter and the
NLRC that the circumstances of this case show that no employer-
employee relationship exists between the parties. The Labor Arbiter
and the NLRC correctly found that petitioner company lacked the
power of control over the performance by respondent of his
duties. The Labor Arbiter reasoned that the Comprehensive Medical
Plan, which contains the respondent’s objectives, duties and
obligations, does not tell respondent "how to conduct his
physical examination, how to immunize, or how to diagnose and
treat his patients, employees of [petitioner] company, in each
case."
 In effect, the Labor Arbiter held that petitioner company, through
the Comprehensive Medical Plan, provided guidelines merely to
ensure that the end result was achieved, but did not control the
means and methods by which respondent performed his assigned
tasks.
33
 Court finds that the schedule of work and the requirement to be
on call for emergency cases do not amount to such control, but
are necessary incidents to the Retainership Agreement.
 The Court also notes that the Retainership Agreement granted to
both parties the power to terminate their relationship upon
giving a 30-day notice. Hence, petitioner company did not wield
the sole power of dismissal or termination
 The Court agrees with the Labor Arbiter and the NLRC that there is
nothing wrong with the employment of respondent as a retained
physician of petitioner company and upholds the validity of the
Retainership Agreement which clearly stated that no employer-
employee relationship existed between the parties.
 Considering that there is no employer-employee relationship
between the parties, the termination of the Retainership Agreement,
which is in accordance with the provisions of the Agreement, does
not constitute illegal dismissal of respondent.
23-Gabriel v. Bilon
[G.R. No. 146989, February 7, 2007]
Parties:
Petitioner – Melencio Gabriel (+) and Flordeliza Gabriel
Respondents – Nelson Bilon, Angel Brazil, Ernesto Pagaygay
Facts:
 Petitioner, represented by his surviving spouse, Flordeliza V.
Gabriel, was the owner-operator of a public transport business,
Gabriel Jeepney, with a fleet of 54 jeepneys plying the Baclaran-
Divisoria-Tondo route. Petitioner had a pool of drivers, which
included respondents, operating under a boundary system of P400
per day.
 respondents filed their separate complaints for illegal dismissal,
illegal deductions, and separation pay against petitioner with
(NLRC).
 Respondents alleged the following:
1) That they were required/forced to pay additional P55.00 per day
for the following: a) P20.00 police protection; b) P20.00
washing; c) P10.00 deposit; and [d)] P5.00 garage fees;

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
2) That on April 30, 1995, petitioner told them not to drive
anymore, and when they went to the garage to report for work
the next day, they were not given a unit to drive; and
3) That the boundary drivers of passenger jeepneys are considered
regular employees of the jeepney operators. Being such, they
are entitled to security of tenure. Petitioner, however, dismissed
them without factual and legal basis, and without due process.
 LA - illegal dismissal; pay P1034000 representing backwages and
separation pay
 Incidentally, Gabriel died. a copy of the above decision was
delivered personally to petitioners house. According to respondents,
petitioners surviving spouse, Flordeliza Gabriel, and their daughter,
after reading the contents of the decision and after they had spoken
to their counsel, refused to receive the same. Nevertheless, Bailiff
Alfredo V. Estonactoc left a copy of the decision with petitioners
wife and her daughter but they both refused to sign and acknowledge
receipt of the decision
 The labor arbiters decision was subsequently served by registered
mail at petitioners residence and the same was received on May 28,
1997.
 On May 16, 1997, counsel for petitioner filed an entry of appearance
with motion to dismiss the case for the reason that Gabriel died
 Gabriel appealed to NLRC - reversed; no EE
 Bilon’s MR to NLRC - dismissed the complaints; directed to
proceedings of intestate estate of Gabriel
 Bilon’s petition for certiorari to CA - there exists an EE; illegal
dismissal; death does not extinguish execution of judgment;
reinstatement of respondents
 Gabriel’s MR to CA - dismissed the MR
 Hence, this petition
Issue: WON there is an employer employee relationship that existed b/n
petitioner and respondents
Held: YES
 CITING MARTINEZ v. NLRC: T]he relationship
between jeepney owners/operators and jeepney drivers under
the boundary system is that of employer-employee and not
of lessor-lessee because in the lease of chattels the lessor loses
34
complete control over the chattel leased although the lessee cannot
be reckless in the use thereof, otherwise he would be responsible for
the damages to the lessor.
 In the case of jeepneyowners/operators and jeepney drivers, the
former exercises supervision and control over the latter. The fact
that the drivers do not receive fixed wages but get only that in excess
of the so-called boundary [that] they pay to the owner/operator is
not sufficient to withdraw the relationship between them from that
of employer and employee.
 Thus, private respondents were employees because they had been
engaged to perform activities which were usually necessary or
desirable in the usual business or trade of the employer
24-Felix v. Buenaseda
[G.R. No. 109704, January 17, 1995]
Parties:
Petitioner: Alfredo Felix
Respondents: Dr. Buenaseda (Director), Dr. Banez (Administrator), CSC
Facts:
 Taking advantage of this Court's decisions involving the removal of
various civil servants pursuant to the general reorganization of the
government after the EDSA Revolution, petitioner assails his
dismissal as Medical Specialist I of the National Center for Mental
Health (formerly the National Mental Hospital) as illegal and
violative of the constitutional provision on security of tenure
allegedly because his removal was made pursuant to an invalid
reorganization.
 Dr. Felix joined the National Center for Mental Health as a Resident
Physician. He was promoted to the temporary position of Senior
Resident Physician a position he held until the Ministry of Health
reorganized the National Center for Mental Health (NCMH) in
January of 1988, pursuant to Executive Order No. 119.
 In August of 1988, petitioner was promoted to the position of
Medical Specialist I (Temporary Status), which position was
renewed the following year
 In 1988, the Department of Health issued Department Order No.
347 which required board certification as a prerequisite for
renewal of specialist positions in various medical centers,

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
hospitals and agencies of the said department. Specifically,
Department Order No. 347 provided that specialists working in
various hospitals and branches of the Department of Health be
recognized as "Fellows" of their respective specialty societies and/or
"Diplomates" of their specialty boards or both. The Order was issued
for the purpose of upgrading the quality of specialties in DOH
hospitals by requiring them to pass rigorous theoretical and clinical
(bedside) examinations given by recognized specialty boards, in
keeping up with international standards of medical practice.
 Petitioner was one of the hundreds of government medical specialist
who would have been adversely affected by Department Order No.
347 since he was no yet accredited by the Psychiatry Specialty
Board. Under Department Order No. 478, extension of his
appointment remained subject to the guidelines set by the said
department order. On August 20, 1991, after reviewing
petitioner's service record and performance, the Medical
Credentials Committee of the National Center for Mental Health
recommended non-renewal of his appointment as Medical
Specialist I, informing him of its decision on August 22, 1991. He
was, however, allowed to continue in the service, and receive his
salary, allowances and other benefits even after being informed of
the termination of his appointment.
 Civil Service Commission: the temporary appointment (of
petitioner) as Medical Specialist I can be terminated at any time . .
." and that "[a]ny renewal of such appointment is within the
discretion of the appointing authority.";
 Consequently, in a memorandum dated March 25, 1992 petitioner
was advised by hospital authorities to vacate his cottage since he
was no longer with said memorandum
 petitioner filed a petition with the Merit System Protection Board
(MSPB) complaining about the alleged harassment by respondents
and questioning the non-renewal of his appointment. In a Decision
rendered on July 29, 1992, the (MSPB) dismissed petitioner's
complaint for lack of merit, finding that:
As an apparent incident of the power to appoint, the
renewal of a temporary appointment upon or after its
expiration is a matter largely addressed to the sound
discretion of the appointing authority. In this case, there is
no dispute that Complainant was a temporary employee
35
and his appointment expired on August 22, 1991. This
being the case, his re-appointment to his former position or
the renewal of his temporary appointment would be
determined solely by the proper appointing authority who
is the Secretary, Department of Health
 Said decision was appealed to the CSC but dismissed also the MR.
Hence this appeal
Issue: WON there was a violation of petitioner’s security of tenure
Held: NO
 A residency or resident physician position in a medical specialty is
never a permanent one. Residency connotes training and
temporary status. It is the step taken by a physician right after post-
graduate internship (and after hurdling the Medical Licensure
Examinations) prior to his recognition as a specialist or sub-
specialist in a given field.
 Under this system, residents, specialty those in university teaching
hospitals enjoy their right to security of tenure only to the extent that
they periodically make the grade, making the situation quite unique
as far as physicians undergoing post-graduate residencies and
fellowships are concerned. While physicians (or consultants) of
specialist rank are not subject to the same stringent evaluation
procedures,specialty societies require continuing education as a
requirement for accreditation for good standing, in addition to peer
review processes based on performance, mortality and morbidity
audits, feedback from residents, interns and medical students and
research output.
 The nature of the contracts of resident physicians meet traditional
tests for determining employer-employee relationships, but because
the focus of residency is training, they are neither here nor there.
Moreover, stringent standards and requirements for renewal of
specialist-rank positions or for promotion to the next post-graduate
residency year are necessary because lives are ultimately at stake.
 It bears emphasis that at the time of petitioner's promotion to the
position of Medical Specialist I (temporary) in August of 1988, no
objection was raised by him about the change of position or the
temporary nature of designation. The pretense of objecting to the
promotion to specialist rank apparently came only as an

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
afterthought, three years later, following the non-renewal of his
position by the Department of Health.
 We lay stress to the fact that petitioner made no attempt to oppose
earlier renewals of his temporary Specialist I contracts in 1989 and
1990, clearly demonstrating his acquiescence to — if not his
unqualified acceptance of the promotion (albeit of a temporary
nature) made in 1988. Whatever objections petitioner had against
the earlier change from the status of permanent senior resident
physician to temporary senior physician were neither pursued nor
mentioned at or after his designation as Medical Specialist I
(Temporary). He is therefore estopped from insisting upon a right or
claim which he had plainly abandoned when he, from all indications,
enthusiastically accepted the promotion.
25-Autobus Transport Systems v. Bautista
[G.R. No. 156367, May 16, 2005]
Parties:
Petitioner: Autobus Transport Systems
Respondent: Antonio Bautista
Facts:
 Respondent Antonio Bautista has been employed by petitioner Auto
Bus Transport Systems, Inc. (Autobus), as driver-conductor with
travel routes Manila-Tuguegarao via Baguio, Baguio- Tuguegarao
via Manila and Manila-Tabuk via Baguio. Respondent was paid on
commission basis, seven percent (7%) of the total gross income per
travel, on a twice a month basis.
 while respondent was driving Autobus No. 114 along Sta. Fe, Nueva
Vizcaya, the bus he was driving accidentally bumped the rear
portion of Autobus No. 124, as the latter vehicle suddenly stopped
at a sharp curve without giving any warning.
 Respondent alleged that he was not allowed to work until he fully
paid the amount of P75,551.50, representing thirty percent (30%) of
the cost of repair of the damaged buses and that despite respondents
pleas for reconsideration, the same was ignored by management.
After a month, management sent him a letter of termination.
 respondent instituted a Complaint for Illegal Dismissal with Money
Claims for nonpayment of 13thmonth pay and service incentive leave
pay against Autobus.
36
 Labor Arbiter: dismissed illegal dismissal casse; ordered petitioner
to pay 13th month pay and service incentive leave
 Petitioner appealed to NLRC. NLRC: deleted 13month pay,
maintained service incentive leave
 Petitioner appealed to CA. CA dismissed. Hence, the petition
Issue: Whether or not respondent is entitled to service incentive leave;
WON respondent is a field personnel
Held: YES; NO
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE
(a) Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive leave of five
days with pay.
Book III, Rule V: SERVICE INCENTIVE LEAVE
SECTION 1. Coverage. This rule shall apply to all employees except:
(d) Field personnel and other employees whose performance is
unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis,
or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
...
 According to Article 82 of the Labor Code, field personnel shall
refer to non-agricultural employees who regularly perform their
duties away from the 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. This definition
is further elaborated in the Bureau of Working Conditions (BWC),
Advisory Opinion to Philippine Technical-Clerical Commercial
Employees Association which states that:
o As a general rule, [field personnel] are those whose
performance of their job/service is not supervised by the

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
employer or his representative, the workplace being
away from the principal office and whose hours and days
of work cannot be determined with reasonable
certainty; hence, they are paid specific amount for
rendering specific service or performing specific work. If
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 performing work
away from the principal office of the employee.
 It is necessary to stress that the definition of a field personnel is not
merely concerned with the location where the employee regularly
performs his duties but also with the fact that the employees
performance is unsupervised by the employer. As discussed
above, field personnel are those who regularly perform their duties
away from the principal place of business of the employer and
whose actual hours of work in the field cannot be determined with
reasonable certainty. Thus, in order to conclude whether an
employee is a field employee, it is also necessary to ascertain if
actual hours of work in the field can be determined with reasonable
certainty by the employer.
In so doing, an inquiry must be made as to whether or not the employees
time and performance are constantly supervised by the employer.
 Held: Yes. It is of judicial notice that along the routes that are plied
by these bus companies, there are its inspectors assigned at strategic
places who board the bus and inspect the passengers, the punched
tickets, and the conductors reports. There is also the mandatory
once-a-week car barn or shop day, where the bus is regularly
checked as to its mechanical, electrical, and hydraulic aspects,
whether or not there are problems thereon as reported by the driver
and/or conductor. They too, must be at specific place as [sic]
specified time, as they generally observe prompt departure and
arrival from their point of origin to their point of destination. In each
and every depot, there is always the Dispatcher whose function is
precisely to see to it that the bus and its crew leave the premises at
specific times and arrive at the estimated proper time. These, are
present in the case at bar. The driver, the complainant herein, was
therefore under constant supervision while in the performance of
this work. He cannot be considered a field personnel.
37
 as correctly concluded by the appellate court, respondent is not a
field personnel but a regular employee who performs tasks
usually necessary and desirable to the usual trade of petitioners
business.
 Accordingly, respondent is entitled to the grant of service
incentive leave.
Issue: WON the claim of respondent has been barred by prescription
Held: NO
 Article 291 of the Labor Code states that all money claims arising from
employer-employee relationship shall be filed within three (3) years
from the time the cause of action accrued; otherwise, they shall be
forever barred.
 In the application of this section of the Labor Code, the pivotal question
to be answered is when does the cause of action for money claims accrue
in order to determine the reckoning date of the three-year prescriptive
period.
 In the computation of the three-year prescriptive period, a determination
must be made as to the period when the act constituting a violation of the
workers right to the benefits being claimed was committed. For if the
cause of action accrued more than three (3) years before the filing of the
money claim, said cause of action has already prescribed in accordance
with Article 291
 cause of action of an entitled employee to claim his service incentive
leave pay accrues from the moment the employer refuses to
remunerate its monetary equivalent if the employee did not make
use of said leave credits but instead chose to avail of its commutation.
Accordingly, if the employee wishes to accumulate his leave credits and
opts for its commutation upon his resignation or separation from
employment, his cause of action to claim the whole amount of his
accumulated service incentive leave shall arise when the employer
fails to pay such amount at the time of his resignation or separation
from employment.
 Applying Article 291 of the Labor Code in light of this peculiarity of the
service incentive leave, we can conclude that the three (3)-year
prescriptive period commences, not at the end of the year when the
employee becomes entitled to the commutation of his service incentive

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
leave, but from the time when the employer refuses to pay its
monetary equivalent after demand of commutation or upon
termination of the employees services, as the case may be.
 The above construal of Art. 291, vis--vis the rules on service incentive
leave, is in keeping with the rudimentary principle that in the
implementation and interpretation of the provisions of the Labor Code
and its implementing regulations, the workingmans welfare should be
the primordial and paramount consideration
 In the case at bar, respondent had not made use of his service incentive
leave nor demanded for its commutation until his employment was
terminated by petitioner. Neither did petitioner compensate his
accumulated service incentive leave pay at the time of his dismissal. It
was only upon his filing of a complaint for illegal dismissal, one month
from the time of his dismissal, that respondent demanded from his former
employer commutation of his accumulated leave credits.
 Since respondent had filed his money claim after only one month from
the time of his dismissal, necessarily, his money claim was filed within
the prescriptive period provided for by Article 291 of the Labor Code.
26-David v. Macasio
[G.R. No. 195466, July 2, 2014]
Petitioner: ARIEL L. DAVID, doing business under the name and style
"YIELS HOG DEALER,"
Respondent: JOHN G. MACASIO
FACTS: Macasio filed before the LA a complaint against petitioner Ariel L.
David, doing business under the name and style "Yiels Hog Dealer," for non-
payment of overtime pay, holiday pay and 13th month pay. He also
claimed payment for moral and exemplary damages and attorney’s fees.
Macasio also claimed payment for service incentive leave (SIL).
David claimed that he started his hog dealer business in 2005 and that he only
has ten employees. He alleged that he hired Macasio as a butcher or chopper
on "pakyaw" or task basis who is, therefore, not entitled to overtime pay,
38
holiday pay and 13th month pay pursuant to the provisions of the
Implementing Rules and Regulations (IRR) of the Labor Code. David
claims that Macasio was not his employee as he hired the latter on
"pakyaw" or task basis. He also claimed that he issued the Certificate of
Employment, upon Macasio’s request, only for overseas employment
purposes.
ISSUE: WON Macasio was engaged on pakyaw or task basis therefore
entitling him to overtime, holiday, SIL and 13th month pay
LA dismissed Macasio’s complaint for lack of merit. The LA gave credence
to David’s claim that he engaged Macasio on "pakyaw" or task basis. The LA
noted the following facts to support this finding: (1) Macasio received the
fixed amount of ₱700.00 for every work done, regardless of the number of
hours that he spent in completing the task and of the volume or number of
hogs that he had to chop per engagement; (2) Macasio usually worked for
only four hours, beginning from 10:00 p.m. up to 2:00 a.m. of the following
day; and (3) the ₱700.00 fixed wage far exceeds the then prevailing daily
minimum wage of ₱382.00. The LA added that the nature of David’s business
as hog dealer supports this "pakyaw" or task basis arrangement.
The LA concluded that as Macasio was engaged on "pakyaw" or task
basis, he is not entitled to overtime, holiday, SIL and 13th month pay.
The NLRC’s Ruling
NLRC affirmed the LA ruling. The NLRC observed that David did not
require Macasio to observe an eight hour work schedule to earn the fixed
₱700.00 wage; and that Macasio had been performing a non-time work,
pointing out that Macasio was paid a fixed amount for the completion of the
assigned task, irrespective of the time consumed in its performance. Since
Macasio was paid by result and not in terms of the time that he spent in the
workplace, Macasio is not covered by the Labor Standards laws on
overtime, SIL and holiday pay, and 13th month pay under the Rules and
Regulations Implementing the 13th month pay law.
 39
岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco

27-Sout East International Rattan Inc. Coming of immediate termination, they were bound by the company’s policy on,
among others, attendance and punctuality.
(Same as #9)
[G.R. No. 192998, April 2, 2014] Aside from the constant evaluation of their actions, petitioners were
reportedly subjected to an annual competency assessment alongside other
28- Tenazas et. al. v. R. Villegas Taxi Transport ABS-CBN employees, as condition for their continued employment.
(Same as #10) Although their work involved dealing with emergency situations at any
time of the day or night, petitioners claimed that they were not paid the
[G.R. No. 192998, April 2, 2014] labor standard benefits the law extends to regular employees. To avoid
paying what is due them, however, respondents purportedly resorted to the
29-Begino v. ABS-CBN simple expedient of using said Talent Contracts and/or Project Assignment
[G.R. No. 199166, April 20, 2015] Forms which denominated petitioners as talents, despite the fact that they are
not actors or TV hosts of special skills.
FACTS:
Respondent ABS-CBN Corporation, employed respondents Amalia
Respondents insisted that, pursuant to their Talent Contracts and/or Project
Villafuerte (Villafuerte) as Manager. Thru Villafuerte, ABS-CBN engaged
Assignment Forms, petitioners were hired as talents, to act as reporters and/or
the services of petitioners Nelson Begino and Gener Del Valle as
cameramen for TV Patrol Bicol for designated periods and rates. Although
Cameramen/Editors for TV Broadcasting. Petitioners Ma. Cristina Sumayao
petitioners were inevitably subjected to some degree of control, the same was
and Monina Avila-Llorin were likewise similarly engaged as reporters
allegedly limited to the imposition of general guidelines on conduct and
sometime in 1996 and 2002, respectively. With their services engaged by
performance, simply for the purpose of upholding the standards of the
respondents thru Talent Contracts which, though regularly renewed over the
company and the strictures of the industry. Never subjected to any control
years, provided terms ranging from three (3) months to one (1) year,
or restrictions over the means and methods by which they performed or
petitioners were given Project Assignment Forms which detailed, among
discharged the tasks for which their services were engaged, petitioners
other matters, the duration of a particular project as well as the budget and
were, at most, briefed whenever necessary regarding the general
the daily technical requirements thereof. In the aforesaid capacities,
requirements of the project to be executed.
petitioners were tasked with coverage of news items for subsequent daily
airings in respondents’ TV Patrol Bicol Program. Their Talent Contract
Having been terminated during the pendency of the case, Petitioners filed a
specifically provides that nothing therein shall be deemed or construed
second complaint against respondents, for regularization, payment of labor
to establish an employer-employee relationship between the parties.
standard benefits, illegal dismissal and unfair labor practice. Upon
respondents’ motion, this complaint was dismissed for violation of the rules
Claiming that they were regular employees of ABS-CBN, petitioners
against forum shopping.
filed against respondents the complaint before the NLRC. In support of
their claims for regularization, underpayment of overtime pay, holiday pay,
Labor Arbiter Quiñones resolved the case in favor of petitioners who,
13th month pay, service incentive leave pay, damages and attorney's fees,
having rendered services necessary and related to ABS-CBN’s business for
petitioners alleged that they performed functions necessary and desirable in
more than a year, were determined to be its regular employees and that the
ABS-CBN's business. Mandated to wear company IDs and provided all the
exclusivity clause and prohibitions under petitioners’ Talent Contracts
equipment they needed, petitioners averred that they worked under the
evinced respondents’ control over them.
direct control and supervision of Villafuerte and, at the end of each day,
were informed about the news to be covered the following day, the routes
NLRC: affirmed LA’s decision. Motion for reconsideration denied.
they were to take and, whenever the subject of their news coverage is quite
Respondents filed the Rule 65 petition for certiorari, which, in addition to
distant, even the start of their workday. Petitioners claimed that, under pain

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
taking exceptions to the findings of the assailed decision, faulted petitioners
for violating the rule against forum shopping.[16]
CA: rendered the herein assailed decision, reversing the findings of the Labor
Arbiter and the NLRC.
Petitioners’ motion for reconsideration of the foregoing decision was denied,
hence, this petition.
ISSUE: WON there is an employer-employee relationship between the
parties
HELD: Yes.
To determine the existence of said relation, case law has consistently
applied the four-fold test, to wit:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employer's power to control the employee on the means and methods
by which the work is accomplished.
Of these criteria, the so-called “control test” is generally regarded as the
most crucial and determinative indicator of the presence or absence of
an employer-employee relationship. Under this test, an employer-employee
relationship is said to exist where the person for whom the services are
performed reserves the right to control not only the end result but also the
manner and means utilized to achieve the same.
Article 280 of the Labor Code of the Philippines also provides as follows:
ART. 280. Regular and Casual Employment. — The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular where
the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be performed
is seasonal in nature and the employment is for the duration of the season.
40
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such actually exists.
The Court finds that, notwithstanding the nomenclature of their Talent
Contracts and/or Project Assignment Forms and the terms and condition
embodied therein, petitioners are regular employees of ABS-CBN. Time
and again, it has been ruled that the test to determine whether employment is
regular or not is the reasonable connection between the activity performed by
the employee in relation to the business or trade of the employer. As
cameramen/editors and reporters, petitioners were undoubtedly performing
functions necessary and essential to ABS-CBN’s business of broadcasting
television and radio content. Aside from the fact that said program is a regular
weekday fare of the ABS-CBN’s Regional Network Group in Naga City, the
record shows that, from their initial engagement in the aforesaid capacities,
petitioners were continuously re-hired by respondents over the years. To the
mind of the Court, respondents’ repeated hiring of petitioners for its long-
running news program positively indicates that the latter were ABS-CBN’s
regular employees.
If the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the
repeated or continuing performance as sufficient evidence of the necessity, if
not indispensability of that activity in the business. The nature of the
employment depends, after all, on the nature of the activities to be
performed by the employee, considering the nature of the employer’s
business, the duration and scope to be done, and, in some cases, even the
length of time of the performance and its continued existence.
As cameramen/editors and reporters, it also appears that petitioners were
subject to the control and supervision of respondents which, first and
foremost, provided them with the equipments essential for the discharge of
their functions. Prepared at the instance of respondents, petitioners’ Talent
Contracts tellingly provided that ABS-CBN retained “all creative,
administrative, financial and legal control” of the program to which they were
assigned. Aside from having the right to require petitioners “to attend and
participate in all promotional or merchandising campaigns, activities or
events for the Program,” ABS-CBN required the former to perform their

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
functions “at such locations and Performance/Exhibition Schedules” it
provided or, subject to prior notice, as it chose determine, modify or change.
Even if they were unable to comply with said schedule, petitioners were
required to give advance notice, subject to respondents’
approval.[34] However obliquely worded, the Court finds the foregoing terms
and conditions demonstrative of the control respondents exercised not only
over the results of petitioners’ work but also the means employed to achieve
the same.
The presumption is that when the work done is an integral part of the
regular business of the employer and when the worker, relative to the
employer, does not furnish an independent business or professional
service, such work is a regular employment of such employee and not an
independent contractor. The Court will peruse beyond any such agreement
to examine the facts that typify the parties’ actual relationship
Rather than the project and/or independent contractors respondents claim
them to be, it is evident from the foregoing disquisition that petitioners are
regular employees of ABS-CBN. This conclusion is borne out by the
ineluctable showing that petitioners perform functions necessary and
essential to the business of ABS-CBN which repeatedly employed them for
a long-running news program of its Regional Network Group in Naga City.
In the course of said employment, petitioners were provided the equipments
they needed, were required to comply with the Company's policies which
entailed prior approval and evaluation of their performance.
30-Chevron Philippines Inc. v. Galit
[G.R. No. 186114, October 7, 2015]
Petitioner: CHEVRON (PHILS.), INC.,
Respondents: VITALIANO C GALIT, SJS AND SONS
CONSTRUCTION CORPORATION AND MR. REYNALDO SALOMON
FACTS:
Respondent Galit filed against petitioner a Complaint for illegal dismissal,
underpayment/non-payment of 13th month pay, separation pay and
emergency cost of living allowance.
41
Galit alleged that: he is a regular and permanent employee of Chevron since
1982, having been assigned at the company's Pandacan depot; he is an "all-
around employee" whose job consists of cleaning the premises of the depot,
changing malfunctioning oil gaskets, transferring oil from containers and
other tasks that management would assign to him; in the performance of his
duties, he was directly under the control and supervision of Chevron
supervisors; on January 15, 2005, he was verbally informed that his
employment is terminated but was promised that he will be reinstated
soon; for several months, he followed up his reinstatement but was not
given back his job.
SJS claimed that: it is a company which was established in 1993 and was
engaged in the business of providing manpower to its clients on a "per
project/contract" basis; Galit was hired by SJS in 1993 as a project employee
and was assigned to Chevron, as a janitor, based on a contract between the
two companies; contrary to Galit's allegation, he started working for SJS only
in 1993; the manpower contract between SJS and Chevron eventually ended
on November 30, 2004 which resulted in the severance of Galit's
employment; SJS finally closed its business operations in December 2004; it
retired from doing business in Manila on January 21, 2005; Galit was paid
separation pay of P11,000.00.
On the other hand, petitioner contended in its Position Paper with Motion to
Dismiss that among others that he was subject to the supervision, discipline
and control of SJS; on November 30, 2004, the extended contract between
petitioner and SJS expired; subsequently, a new contract for janitorial
services was awarded by petitioner to another independent contractor;
petitioner was surprised that Galit filed an action impleading it; despite
several conferences, the parties were not able to arrive at an amicable
settlement.
Labor Arbiter dismissed the complaint against Chevron for lack of
jurisdiction, and against respondents SJS and Reynaldo Salomon for lack of
merit. Respondent filed an appeal with the NLRC which ordered SJS and
Sons Construction Corporation is to pay the complainant, severance
compensation, at the rate of one (1) month salary for every year of service.
The NLRC affirmed the findings of the LA that SJS was a legitimate job
contractor and that it was Galit's employer. However,"the NLRC found that
Gal it was a regular, and not a project employee, of SJS, whose

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
employment was effectively terminated when SJS ceased to operate.
Motion for reconsideration denied. Respondent then filed a petition
for certiorari with the CA assailing the above NLRC Decision and
Resolution.
Contrary to the- findings of the LA and the NLRC, the CA held that SJS was
a labor-only contractor, that petitioner is Galit's actual employer and that the
latter was unjustly dismissed from his employment.
ISSUES:
1. WON there is an employer-employee relationship between the
company and the respondent
HELD: Yes.
To ascertain the existence of an employer-employee relationship,
jurisprudence has invariably adhered to the four-fold test, to wit:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employee's conduct, or the so-called "control
test."
Of these four, the last one is the most important. The so-called "control test"
is commonly regarded as the most crucial and determinative indicator of
the presence or absence of an employer-employee relationship. Under the
control test, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only the
end achieved, but also the manner and means to be used in reaching that end.
In the instant case, the true nature of Galit's employment is evident from the
Job Contract between petitioner and SJS. The foregoing provisions of the Job
Contract demonstrate that the latter possessed the following earmarks of an
employer, to wit: (1) the power of selection and engagement of employees,
(2) the payment of wages; (3) the power to discipline and dismiss, (4) the
power to control the employee's conduct.
As to SJS' power of selection and engagement, Galit himself admitted in his
42
own affidavit that it was SJS which assigned him to work at Chevron's
Pandacan depot. As such, there is no question that it was SJS which
selected and engaged Galit as its employee.
2. WON SJS is an independent contractor
An independent contractor carries on an independent business and undertakes
the contract work on his own account, under his own responsibility, according
to his own manner and method, and free from the control and direction of his
employer or principal in all matters connected with the performance of the
work except as to the results thereof.. This embodies what has long been
jurisprudentially recognized as the control test, as discussed above.
In the instant case, SJS presented evidence to show that it had an independent
business by paying business taxes and fees and that it was registered as an
employer with the Social Security System. Moreover, there was no evidence
to show that SJS and its employees were ever subject to the control of
petitioner. On the contrary, as shown above, SJS possessed the right to control
its employees' manner and means of performing their work , including herein
respondent Galit.
31-World’s Best Gas Inc. v. Vital
[G.R. No. 211588, September 9, 2015]
Petitioner: WORLD'S BEST GAS, INC.,
Respondents: HENRY VITAL, JOINED BY HIS WIFE FLOSERFINA
VITAL
FACTS:
Vital was one of the incorporators of WBGI, holding P500,000.00 worth of
shares of stocks therein. As a separate business venture, Vital and his wife
sourced Liquefied Petroleum Gas (LPG) from WBGI and distributed the
same through ERJ Enterprises owned by them. As of respondents' last
statement of account, their outstanding balance with WBGI for unpaid
LPG amounted to P923,843.59
Vital was appointed as Internal Auditor and Personnel Manager and
continued to serve as such until his mandatory retirement. Upon his

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
retirement Vital's retirement benefits was computed at P82,500.00 by
multiplying his P15,000.00 monthly pay by 5.5 years, which was the number
of years he served as Internal Auditor and Personnel Manager.
After offsetting the P500,000.00 due from WBGI's acquisition of his shares
of stocks against ERJ Enterprises' P923,843.59 outstanding balance to
WBGI, Vital claimed that the unpaid salaries and separation pay due
him amounted to P845,000.00 and P250,000.00, respectively, leaving a net
amount of P671,156.41 payable to him. WBGI rejected Vital's claim and
contended that after offsetting, Vital actually owed it P369,156.19.
Vital filed a complaint before the NLRC for non-payment of separation and
retirement benefits, underpayment of salaries/wages and 13 thmonth pay,
illegal reduction of salary and benefits, and damages.
WBGI averred that the Labor Arbiter (LA) had no jurisdiction over the
complaint because Vital is not an employee, but a mere incorporator and
stockholder of WBGI, hence, no employer-employee relationship exists
between them.
LA dismissed the case for lack of jurisdiction
RTC declared that Vital was an employee of WBGI and thereby, upheld
his claim of P845,000.00 and P250,000.00 in unpaid salaries and
separation pay.
CA dismissed the appeal
ISSUE: WON the CA erred in ruling upon Vital's claim of P845,000.00 and
P250,000.00 in unpaid salaries and separation pay.
HELD:
It was alleged that RTC's adjudication of the first cause of action with regards
to Vital's claim for P845,000.00 and P250,000.00 in unpaid salaries and
separation pay was improper since the same is one which arose from Vital
and WBGI's employer-employee relations, involving an amount
exceeding P5,000.00, hence, belonging to the jurisdiction of the labor
arbiters pursuant to Article 217 of the Labor Code:
43
(a) Except as otherwise provided under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or non-agricultural:
xxx
6. Except claims for Employees' Compensation, Social Security, Medicare
and maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000.00) regardless
of whether accompanied with a claim for reinstatement.
Having no subject matter jurisdiction to resolve claims arising from
employer-employee relations, the RTC's ruling on Vital's claim of his
unpaid salaries and separation pay is, thus, null and void, and therefore,
cannot perpetuate even if affirmed on appeal, rendering the CA's
ratiocination that it "has the eventual authority to review the labor courts'
decision on the matter" direly infirm. As a result, WBGI's petition is
meritorious on this score. However, since the dismissal is grounded on lack
of jurisdiction, then the same should be considered as a dismissal without
prejudice. As such, Vital may re-file the same claim, including those
related thereto (e.g., moral and exemplary damages, and attorney's fees)
before the proper labor tribunal.
Contrary to its lack of jurisdiction over claims arising from employer-
employee relations, the RTC has:
(a) general jurisdiction to adjudicate on the P923,843.59 in arrearages
payable to WBGI from ERJ Enterprises, which was admitted by Vital
but not claimed by WBGI;30 and
(b) special jurisdiction, as a special commercial court, to adjudicate on Vital's
claim of P500,000.00 from WBGI's acquisition of his shares of
stocks.31 Indeed, even acting as a special commercial court, the RTC's
general jurisdiction to adjudicate on the first-mentioned claim is retained.
 44
岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco

32-Manila Memorial Park v. LLuz  Manila Memorial - nowhere is it provided in the Contract of Services
[G.R. No. 208451, February 3, 2016] that Manila Memorial controls the manner and means by which
respondents accomplish the results of their
Respondent: Ezard D. Lluz, et. al. Ward Trading and Services
work. Manila Memorial states that the company only wants its
contractors and the latter's employees to abide by company rules and
Art. 106. Contractor or subcontractor.
regulations.
xxx
Respondents - assert that they are regular employees
of Manila Memorial since Ward Trading cannot qualify as an independent
There is "labor-only" contracting where the person supplying workers to an
contractor but should be treated as a mere labor-only contractor.
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
ISSUE: WON an employer-employee relationship exists
recruited and placed by such person are performing activities which are
between Manila Memorial and respondents
directly related to the principal business of such employer. In such cases, the
person or intermediary shall be considered merely as an agent of the
HELD:
employer who shall be responsible to the workers in the same manner and
 Yes. It is clear from these provisions that contracting arrangements for
extent as if the latter were directly employed by him.
the performance of specific jobs or services under the law and its
implementing rules are allowed. However, contracting must be made to
FACTS:
a legitimate and independent job contractor since labor rules expressly
 2006 - Petitioner Manila Memorial entered into a Contract of Services
prohibit labor-only contracting.
with respondent Ward Trading. The Contract of Services provided that
 Labor-only contracting exists when the contractor or subcontractor
Ward Trading, as an independent contractor, will render interment and
merely recruits, supplies or places workers to perform a job, work or
exhumation services and other related work to Manila Memorial in order
service for a principal. Elements:
to supplement operations at Manila Memorial Park, Parañaque City.
1. The contractor or subcontractor does not have substantial capital or
 Among those assigned by Ward Trading to perform services at
investment which relates to the job, work or service to be performed
the Manila Memorial Park were respondents Ezard Lluz
and the employees recruited, supplied or placed by such contractor
 2007, respondents filed a Complaint for regularization and Collective or subcontractor are performing activities which are directly related
Bargaining Agreement benefits against Manila Memorial; Enrique B. to the main business of the principal; or
Lagdameo, and Ward Trading. Later on they filed an amended complaint 2. The contractor does not exercise the right to control the performance
to include illegal dismissal, underpayment of 13th month pay, and of the work of the contractual employee.
payment of attorney's fees.
 Ward Trading is a labor-only contractor and does not have substantial
 Manila Memorial sought the dismissal of the complaint for lack of capital or investment in the form of tools, equipment, machinery, work
jurisdiction since there was no employer-employee premises and other materials since it is Manila Memorial which owns the
relationship. Manila Memorial argued that respondents were the equipment used in the performance of work needed for interment and
employees of Ward Trading. exhumation services.
 LA - dismissed the complaint for failing to prove the existence of an  For failing to register as a contractor, a presumption arises that one is
employer-employee relationship. engaged in labor-only contracting unless the contractor overcomes the
 NLRC - reversed the LA's findings. The NLRC ruled that Ward Trading burden of proving that it has substantial capital, investment, tools and the
was a labor-only contractor and an agent of Manila Memorial. like.
 CA - found the existence of an employer-employee relationship  In this case, however, Manila Memorial failed to adduce evidence to
between Manila Memorial and respondents. prove that Ward Trading had any substantial capital, investment or

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
assets to perform the work contracted for. Thus, the presumption
that Ward Trading is a labor-only contractor stands.
 Consequently, Manila Memorial is deemed the employer of
respondents. As regular employees of Manila Memorial,
respondents are entitled to their claims for wages and other benefits
as awarded by the NLRC and affirmed by the CA.
33- Diamond Farms v. Southern Federation of Labor
Workers
[G.R. Nos. 173254-55 and 173263, January 13, 2016]
Petitioner: DFI
Respondents:
 Southern Philippines Federation of Labor (SPFL) -Workers Solidarity
Of Darbmupco/Diamond-SPFL
 Diamond Farms Agrarian Reform Beneficiaries Multi-Purpose
Cooperative (DARBMUPCO)
 Volter Lopez, Ruel Romero, Patricio Caprecho, Rey Dimacali, Elesio
Emanel, Victor Singson, Nilda Dimacali, Premitivo Diaz, Rudy Vistal,
Roger Montero, Josisimo Gomez snd Manuel Mosquera
Art. 106. Contractor or subcontractor.
xxx
There is "labor-only" contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are
directly related to the principal business of such employer. In such cases, the
person or intermediary shall be considered merely as an agent of the
employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
FACTS:
 Petitioner DFI owns an 800-hectare banana plantation in Alejal, Carmen,
Davao. Pursuant to RA 6657 CARL, commercial farms shall be subject
to compulsory acquisition and distribution, thus the original plantation
was covered by the law. However, DAR granted DFI a deferment
privilege to continue agricultural operations until 1998.
45
 Due to adverse marketing problems and observance of the so-called "lay-
follow" or the resting of a parcel of land for a certain period of time after
exhaustive utilization, DFI closed some areas of operation in the
original plantation and laid off its employees. The employees petitioned
the DAR for the cancellation of DFI's deferment privilege alleging that
DFI already abandoned its area of operations. DAR Regional Director
recalled DFI's deferment privilege resulting in the original plantation's
automatic compulsory acquisition and distribution under the CARL.
 Meanwhile, DFI offered to give up its rights and interest over the original
plantation in favor of the government by way of a Voluntary Offer to
Sell. DAR accepted DFI's offer to sell the original plantation. However,
out of the total 800 hectares, the DAR only approved the disposition of
689.88 hectares. Hence, the original plantation was split into two.
 The awarded plantation was turned over to qualified agrarian reform
beneficiaries ("ARBs") under the CARL. These ARBs are the same
farmers who were working in the original plantation. They subsequently
organized themselves into a multi-purpose cooperative named
"DARBMUPCO”
 DARBMUPCO entered into a Banana Production and Purchase
Agreement (BPPA) with DFI. They agreed to grow and cultivate only
high grade quality exportable bananas to be sold exclusively to DFI. The
BPPA is effective for 10 years.
 They also executed a "Supplemental to Memorandum Agreement"
(SMA). The SMA stated that DFI shall take care of the labor cost arising
from the packaging operation, cable maintenance, irrigation pump and
irrigation maintenance that the workers of DARBMUPCO shall conduct
for DFI's account under the BPPA.
 Due to DARBMUPCO’s lack of manpower, DFI engaged the services of
the respondent-contractors, who in turn recruited the respondent-
workers.
 1997, respondent Southern Philippines Federation of Labor (SPFL)
filed a petition for certification election in the Office of the Med-
Arbiter in Davao City. SPFL filed the petition on behalf of some 400
workers jointly employed by DFI and DARBMUPCO working in the
awarded plantation
 DARBMUPCO and DFI denied that they are the employers of the
respondent-workers. They claimed, instead, that the respondent-workers
are the employees of the respondent-contractors.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 Med-Arbiter granted the petition for certification election. It directed
the conduct of certification election and declared that DARBMUPCO
was the employer of the respondent-workers.
 DARBMUPCO appealed. Secretary of Labor declared DFI as the
employer of the respondent-workers.
 Meanwhile, SPFL, together with more than 300 workers, filed a case for
underpayment of wages, non-payment of 13th month pay and service
incentive leave pay and attorney's fees against DFI, DARBMUPCO and
the respondent-contractors before NLRC. LA held that the respondent-
contractors are "labor-only contractors." DFI is deemed as the statutory
employer of all the respondent-workers. The LA dismissed the case
against DARBMUPCO and the respondent-contractors.
 Upon appeal, NLRC ruled that DARBMUPCO and DFI are the statutory
employers of the workers rendering services in the awarded plantation
and the managed area, respectively.
 Pursuant to the Secretary’s Resolution approving the conduct of
certification election, DOLE conducted a certification election on
October 1, 1999. On even date, DFI filed an election protest but was
denied.
 CA - agreed with the ruling of the Secretary that DFI is the statutory
employer of the respondent-workers. It noted that the DFI hired the
respondent-contractors, who in turn procured their own men to work in
the land owned by DARBMUPCO.
o The fact that the respondent-workers worked in the land owned
by DARBMUPCO is immaterial. "Ownership of the land is not
one of the four (4) elements generally considered to establish
employer-employee relationship."
o DFI is the true employer of the respondent-workers because the
respondent-contractors are not independent contractors.
The lack of manpower of DARBMUPCO impelled DFI to hire contractors to
supply labor enabling DARBMUPCO to meet its quota.
ISSUE: Who among DFI, DARBMUPCO and the respondent-contractors is
the employer of the respondent-workers.
HELD:
 DFI is the employer of the workers. The Court upheld the CA
decision.
 Contracting or subcontracting - is an arrangement whereby a principal
(or employer) agrees to put out or farm out with a contractor or
46
subcontractor the performance or completion of a specific job, work or
service within a definite or predetermined period, regardless of whether
such job, work or service is to be performed or completed within or
outside the premises of the principal. It involves a trilateral relationship
among the principal or employer, the contractor or subcontractor, and the
workers engaged by the contractor or subcontractor.
 Job contracting is permissible under the Code if the following
conditions are met:
1. The contractor carries on an independent business and undertakes
the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with
the performance of the work except as to the results thereof; and
2. The contractor has substantial capital or investment in the form of
tools, equipment, machineries, work premises, and other materials
which are necessary in the conduct of his business.
 Job contracting shall be deemed as labor-only contracting, and is
prohibited by law, if a person who undertakes to supply workers to an
employer:
1. Does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises and other
materials; and
2. The workers recruited and placed by such person are
performing activities which are directly related to the principal
business or operations of the employer in which workers are
habitually employed.
 There is no evidence showing that respondent-contractors are
independent contractors. The respondent-contractors, DFI, and
DARBMUPCO did not offer any proof that respondent-contractors were
not engaged in labor-only contracting.
 DFI should have presented proof showing that respondent-contractors
carry on an independent business and have sufficient capitalization. The
record, however, is bereft of showing of even an attempt on the part of
DFI to substantiate its argument.
 Respondent-contractors admitted that they do not have substantial capital
or investment in the form of tools, equipment, machineries, work
premises and other materials, and they recruited workers to perform
activities directly related to the principal operations of their employer.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 DFI is the principal or employer - refers to the person who enters into
an agreement with a job contractor, either for the performance of a
specified work or for the supply of manpower.
 Four-fold test – EE Relationship
1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal; and
4. the power to control the employee's conduct.
 That DFI is the employer of the respondent-workers is bolstered by the
CA's finding that DFI exercises control over the respondent-
workers. DFI, through its manager and supervisors provides for the
work assignments and performance targets of the respondent-
workers. The managers and supervisors also have the power to directly
hire and terminate the respondent-workers. Evidently, DFI wields
control over the respondent-workers.
34-Lu v. Enopia
[G.R. No. 197899, March 6, 2017]
Petitioner: Joaquin Lu
Respondent: Tirso Enopia, et. al.
FACTS:
 Respondents were hired from January 20, 1994 to March 20, 1996 as
crew members of the fishing mother boat F/B MG-28 owned by
"Jake" Lu who is the sole proprietor of Mommy Gina Tuna Resources
(MGTR) based in General Santos City. They had an income-sharing
arrangement wherein 55% goes to Lu, 45% to the crew members, with
an additional 4% as "backing incentive." They also equally share the
expenses for the maintenance and repair of the mother boat, and for the
purchase of nets, ropes and payaos.
 August 199 - Lu proposed the signing of a Joint Venture Fishing
Agreement between them, but respondents refused to sign the same as
they opposed the one-year term provided in the agreement.
 According to the respondents, during their dialogue on August 18,
1997, Lu terminated their services right there and then because of their
refusal to sign the agreement. On the other hand, Lu alleged that the
master fisherman (piado) Ruben Salili informed him that petitioners still
refused to sign the agreement and have decided to return the vessel F/B
MG-28.
47
 August 25, 1997 - they filed their complaint for illegal dismissal,
monetary claims and damages.
 Respondents alleged - that their refusal to sign the Joint Venture Fishing
Agreement is not a just cause for their termination. Petitioners also asked
for a refund of the amount of P8,700,407.70 that was taken out of their
50% income share for the repair and maintenance of boat as well as the
purchase of fishing materials, as Lu should not benefit from such
deduction.
 Lu - denied having dismissed petitioners, claiming that their relationship
was one of joint venture where he provided the vessel and other fishing
paraphernalia, while petitioners, as industrial partners, provided labor by
fishing in the high seas. Lu alleged that there was no employer-employee
relationship.
LA findings and ruling
 Dismissed the case for lack of merit finding that there was no EE
relationship existing.
 (1) respondents were not hired by petitioner as the hiring was done by
the piado or master fisherman; (2) the earnings of the fishermen from the
labor were in the form of wages they earned based on their respective
shares; (3) they were never disciplined nor sanctioned by the petitioner;
and, (4) the income-sharing and expense-splitting was no doubt a
working set up in the nature of an industrial partnership.
 Checker and the use of radio were for the purpose of monitoring and
supplying the logistics requirements of the fishermen while in the sea
 NLRC decision - affirmed the LA Decision
 CA – reversed and set aside NLRC decision
 Petitioner exercised control over respondents (1) respondents were
the fishermen crew members of petitioner's fishing vessel, thus, their
services to the latter were so indispensable and necessary that without
them, petitioner's deep-sea fishing industry would not have come to
existence much less fruition; (2) he had control over the entire fishing
operations undertaken by the respondents through the master fisherman
(piado) and the assistant master fisherman (assistant piado) employed
by him; (3) respondents were paid based on a percentage share of the fish
catch did not in any way affect their regular employment status; and (4)
petitioner had already invested millions of pesos in its deep-sea fishing
industry, hence, it is highly improbable that he had no control over
respondents' fishing operations.
Lu filed petition for review on certiorari.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
ISSUE: WON there is an EE relationship between Lu and the respondents
HELD: Yes.
 The existence of an EE relationship is ultimately a question of fact.
 Gen rule: Courts will not review errors that raise factual questions.
 Exception: When there is a conflict among the factual findings of the
antecedent deciding bodies like the LA, the NLRC and the CA, it is
proper, in the exercise of equity jurisdiction.
 Four-fold test – all elements are present
1. the selection and engagement of the workers;
2. the power to control the worker's conduct;
3. the payment of wages by whatever means; and
4. the power of dismissal.
 It is settled that no particular form of evidence is required to prove the
existence of an employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted.
Proofs of EE relationship:
 Thus, the fact that petitioner had registered the respondents with SSS
is proof that they were indeed his employees.
 The 4% backing incentive fee which was divided among the fishermen
engaged in the fishing operations approved by petitioner was paid to
respondents after deducting the latter's respective vale or cash advance.
 It was established that petitioner exercised control over respondents. It
should be remembered that the control test merely calls for the existence
of the right to control, and not necessarily the exercise thereof.
 Lu was constantly monitoring or checking the progress of respondents'
fishing operations throughout the duration thereof, which showed their
control and supervision over respondents' activities.
 The payment of respondents' wages based on the percentage share of the
fish catch would not be sufficient to negate the employer-employee
relationship existing between them.
 Petitioner wielded the power of dismissal over respondents when he
dismissed them after they refused to sign the joint fishing venture
agreement.
Resolution
 Thus, respondents were illegally dismissed. An employee who is
unjustly dismissed from work shall be entitled to reinstatement without
48
loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.
 However, since most (if not all) of the respondents are already employed
in different deep-sea fishing companies, reinstatement is no longer
possible. Thus, MGTR should pay to each respondent his separation pay
equivalent to one month for every year of service reckoned from the time
he was hired as fishermen-crew member of F/B MG-28 by MGTR until
the finality of this judgment.
35-Weslayan University Phil. v. Maglaya Sr.
[G.R. No. 212774, January 23, 2017]
Petitioner: WUP
Respondent: Atty. Guillermo T. Maglaya
FACTS:
 WUP is a non-stock, non-profit, non-sectarian educational corporation
duly organized and existing under the Philippine laws.
 Maglaya was appointed as a corporate member on January 1, 2004, and
was elected as a member of the Board of Trustees on January 9, 2004
— both for a period of five 5 years. On May 25, 2005, he was elected as
President of the University for a five-year term. He was re-elected as a
trustee on May 25, 2007.
 2008 Memorandum - the incumbent Bishops of the United Methodist
Church apprised all the corporate members of the expiration of their
terms on December 31, 2008, unless renewed by the former. The said
members, including Maglaya, sought the renewal of their
membership in the WUP's Board, and signified their willingness to
serve the corporation.
 Chairman of the Board Dr. Dominador Cabasal - informed the
Bishops of the cessation of corporate terms of some of the members
and/or trustees since the by-laws provided that the vacancy shall only
be filled by the Bishops upon the recommendation of the Board.
 March 25, 2009 - Maglaya learned that the Bishops created an Ad
Hoc Committee to plan the efficient and orderly turnover of the
administration. He clarified that there was no agreement and any
discussion of the turnover because the corporate members still have valid
and existing corporate terms.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
 April 24, 2009 - the Bishops, through a formal notice to all the officers,
deans, staff, and employees of WUP, introduced the new corporate
members, trustees, and officers. They introduced Manuel Palomo as the
new Chairman of the Board, informed Maglaya of the termination of his
services and authority.
 Maglaya and other former members of the Board filed a Complaint for
Injunction and Damages.
 RTC Cabanatuan City – dismissed the complaint declaring the same
as a nuisance or harassment suit. It is clear from the by-laws of WUP that
insofar as membership in the corporation is concerned, which can only
be given by the College of Bishops of the United Methodist Church, it is
a precondition to a seat in the WUP Board. Consequently, the expiration
of the terms of the plaintiffs, including Maglaya, as corporate members
carried with it their termination as members of the Board.
 CA - affirmed the decision of the RTC.
 Maglaya – filed the present illegal dismissal case. He claimed that he
was unceremoniously dismissed in a wanton, reckless, oppressive and
malevolent manner on the eve of April 27, 2009. Tangonan and Soriano
acted in evident bad faith when they disregarded his five-year term of
office and delegated their protégé Palomo as the
new university president.
 Maglaya presented the following pieces of evidence: copies of his
appointment as President, his Identification Card, the WUP
Administration and Personnel Policy Manual which specified the
retirement of the university president, and the check disbursement in his
favor evidencing his salary, to substantiate his claim that he was a mere
employee.
 WUP - asseverated that the dismissal or removal of Maglaya, being a
corporate officer and not a regular employee, is a corporate act or intra-
corporate controversy under the jurisdiction of the RTC.
 LA – ruled in favor of WUP. Since he was appointed as President of
the University by the Board,Maglaya was a corporate officer and not a
mere employee. The instant case involves intra-corporate dispute which
was definitely beyond the jurisdiction of the labor tribunal.
 NLRC – reversed the decision of LA. Maglaya was illegally dismissed.
Although the position of the President of the University is a corporate
office, the manner of Maglaya's appointment, and his duties, salaries,
and allowances point to his being an employee and subordinate.The
control test is the most important indicator of the presence of employer-
employee relationship.
49
WUP filed petition for review on certiorari.
ISSUE: WON Maglaya is an employee or corporate officer of WUP
HELD: Maglaya is a corporate officer. Hence, the case does not fall
within the jurisdiction of NLRC.
 Corporate officers - in the context of Presidential Decree No. 902-A are
those officers of the corporation who are given that character by
the Corporation Code or by the corporation's by-laws. There are three
specific officers whom a corporation must have under Section 25 of
the Corporation Code. These are the president, secretary and the
treasurer.
 The president, vice-president, secretary and treasurer are commonly
regarded as the principal or executive officers of a corporation, and they
are usually designated as the officers of the corporation. However, other
officers are sometimes created by the charter or by-laws of a
corporation, or the board of directors may be empowered under the by-
laws of a corporation to create additional offices as may be necessary.
 The creation of the position is under the corporation's charter or by-laws,
and that the election of the officer is by the directors or stockholders must
concur in order for an individual to be considered a corporate officer, as
against an ordinary employee or officer.
 According to their by-laws, the president was one of the officers of the
corporation, and was an honorary member of the Board. He was
appointed by the Board and not by a managing officer of the corporation.
 The alleged "appointment" of Maglaya instead of "election" as provided
by the by-laws neither convert the president of university as a mere
employee, nor amend its nature as a corporate officer.
 Thus, the NLRC erred in taking cognizance of the case, and in
concluding that Maglaya was a mere employee and subordinate official.
 A corporate officer's dismissal is always a corporate act, or an intra-
corporate controversy which arises between a stockholder and a
corporation, and the nature is not altered by the reason or wisdom with
which the Board of Directors may have in taking such action.
 50
岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco

36-Nestle Philippines v. Puedan

NLRC ruling
[G.R. No. 220617, January 30, 2017]
 Reversed the decision. While ODSI indeed shut down its operations, it
Petitioner: Nestle Phils. Inc. (NPI)
failed to prove that such closure was due to serious business losses as it
Respondents: Benny A. Puedan, Jr. et. al.
did not present evidence.
 As such, it ruled that respondents are entitled to separation pay. In this
Ocho de Septiembre, Inc. (ODSI)
relation, the NLRC also found that since ODSI failed to notify
respondents of such closure, the latter are likewise entitled to nominal
FACTS:
damages.
 Respondents alleged that on various dates, ODSI and NPI hired them to
 ODSI is a labor-only contractor of NPI, considering that: (a) ODSI
sell various NPI products in the assigned covered area. After some time,
had no substantial capitalization or investment; (b) respondents
respondents demanded that they be considered regular employees of
performed activities directly related to NPI's principal business;
NPI, but they were directed to sign contracts of employment with ODSI
and (c) the fact that respondents' employment depended on the
instead. When respondents refused to comply with such directives, NPI
continuous supply of NPI products shows that ODSI had not been
and ODSI terminated them from their position.
carrying an independent business.
 Thus, they were constrained to file the complaint, claiming
 ODSI and NPI to pay each of the respondents: (a) separation pay
that: (a) ODSI is a labor-only contractor and, thus, they should be
amounting to 1/2 month pay for every year of service reckoned from the
deemed regular employees of NPI; and (b) there was no just or
time they were employed until the finality of the Decision;
authorized cause for their dismissal.
and (b) nominal damages in the amount of P30,000.00.
 ODSI averred - that it is a company engaged in the business of buying,
 Respondents moved for partial reconsideration.
selling, distributing, and marketing of goods and commodities of every
CA - affirmed the NLRC ruling. Despite ODSI and NPI's contract being
kind and it enters into all kinds of contracts for the acquisition thereof.
denominated as a "Distributorship Agreement," it contained provisions
ODSI admitted that on various dates, it hired respondents as its
demonstrating a labor-only contracting arrangement between them, as well
employees and assigned them to execute the Distributorship
as NPI's exercise of control over the business of ODSI.
Agreement with NPI.
 However, the business relationship between NPI and ODSI turned sour
ISSUE: WON ODSI is a labor-only contractor of NPI, and consequently,
when the former's sales department badgered the latter regarding the
WON NPI is respondents' true employer and, thus, deemed jointly and
sales targets. Eventually, NPI downsized its marketing and promotional
severally liable with ODSI for respondents' monetary claims.
support from ODSI which resulted to business reverses and in the latter's
filing of a petition for corporate rehabilitation and, subsequently, the
HELD: No.
closure of its Nestlé unit due to the termination of the Distributorship
 A closer examination of the Distributorship Agreement reveals that the
Agreement.
relationship of NPI and ODSI is not that of a principal and a
 LA - dismissed the complaint for lack of merit, but nevertheless,
contractor (regardless of whether labor-only or independent), but that
ordered, inter alia, ODSI and NPI to pay respondents nominal damages.
of a seller and a buyer/re-seller. NPI agreed to sell its products to ODSI
The LA found that: (a) respondents were unable to prove that they
at discounted prices, which in turn will be re-sold to identified
were NPI employees; and (b) respondents were not illegally
customers, ensuring in the process the integrity and quality of the said
dismissed as ODSI had indeed closed down its operations due to
products based on the standards agreed upon by the parties.
business losses.
 The goods manufactured by NPI are distributed to the market through
various distributors, e.g., ODSI, that in turn, re-sell the same to
designated outlets through its own employees such as the respondents.

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
Therefore, the reselling activities allegedly performed by the respondents
properly pertain to ODSI, whose principal business consists of the
"buying, selling, distributing, and marketing goods and commodities of
every kind" and "[entering] into all kinds of contracts for the acquisition
of such goods [and commodities]."
 The stipulations in the Distributorship Agreement do not operate to
control or fix the methodology on how ODSI should do its business
as a distributor of NPI products, but merely provide rules of conduct or
guidelines towards the achievement of a mutually desired result.
 The imposition of minimum standards concerning sales, marketing,
finance and operations is nothing more than an exercise of sound
business practice to increase sales and maximize profits for the benefit
of both Steelcase and its distributors. For as long as these requirements
do not impinge on a distributor's independence, then there is nothing
wrong with placing reasonable expectations on them
 ODSI was not a labor-only contractor of NPI; hence, the latter
cannot be deemed the true employer of respondents. As a
consequence, NPI cannot be held jointly and severally liable to ODSI's
monetary obligations towards respondents.
37- Fallerma v. San Juan De Dios
[G.R. Nos. 190015 & 190019, September 14, 2016]
Petitioners: Geraldine Michelle B. Fallarme, Andrea Martinez-Gacos
Respondents: San Juan De Dios Educational Foundation, Inc., (SJDDEFI)
FACTS:
 Petitioners were hired by San Juan de Dios Educational Foundation,
Inc., (respondent college), for full-time teaching positions.
Fallarme’s case
 Appointment was effective at the start of the 1st semester of SY 2003-
2004 as signified by a memorandum issued by the school informing her
that she had been hired. The memorandum did not specify whether she
was being employed on a regular or a probationary status. Aside from
being appointed to a faculty position, she was also appointed to perform
administrative work for the school as personnel officer and to serve as
head of the Human Development Counseling Services.
 It was only on 1 March 2006 that she was asked to sign and submit to
respondent Chona M. Hernandez, dean of general education, a written
51
contract on the nature of the former's employment and corresponding
obligations. The contract was denominated as "Appointment and
Contract for Faculty on Probation" and its effectivity period covered
the second semester of SY 2005-2006 — specifically from 4 November
2005 to 18 March 2006. The appointment contract specified the status
of Fallarme as a probationary faculty member.
 After the expiration of the contract, respondent college informed her that
it would not be renewed for the first semester of SY 2006-2007, due to
administrative prerogative.
Martinez-Gacos’ case
 Petitioner Martinez-Gacos taught at respondent college from the start of
SY 2003-2004 and continued to do so for a total of six semesters and one
summer. Her engagement as a faculty member was signified by a
memorandum similar to that of Fallarme’s.
 It was only on 1 March 2006 that the latter was ordered by respondent
Valeriano Alejandro III to sign and submit a written contract on the
nature of her employment and corresponding obligations. Under the
appointment contract, the probationary status of Martinez-Gacos was
likewise specified for the first time. After the lapse of the contract's
effectivity, she was similarly informed that her contract would not be
renewed for the first semester of SY 2006-2007 based on administrative
prerogative.
 They filed a Complaint against respondents for illegal dismissal,
reinstatement, back wages, and damages before the LA.
 Defense - respondents claimed that petitioners had been remiss in their
duties. Specifically, both of them reportedly sold computerized final
examination sheets to their students without prior school approval.
Allegedly, Fallarme also sold sociology books to students, while
Martinez-Gacos served as part-time faculty in another school and
organized out-of-campus activities, all without the permission of
respondent college. These infractions supposedly prevented it from
considering their services satisfactory.
 LA - petitioners were regular employees who were entitled to security of
tenure. 1992 Manual provides that provides that regularization must be
given to a teacher who (i) is employed as a full-time teacher; (ii) has
rendered three consecutive years of service; and (iii) has performed
satisfactorily within that period.
 NLRC - petitioners had failed to meet the third requirement for
regularization as prescribed by the 1992 Manual; that is, they had not

岷倫洛區 筆記 LABOR STANDARDS – Atty. Joyrich Golangco
served respondent college satisfactorily. NLRC found that certain
actions they had done without the requisite approval of respondent
college brought about their unsatisfactory performance during their
probationary period. However, given the failure of respondent to
observe due process, the NLRC ordered it to pay them P20,000 each
as indemnity.
CA - affirmed the NLRC Decision
ISSUES:
 Were petitioners regular employees of respondent college?
 Was petitioners' dismissal for a valid cause?
 If the dismissal of petitioners was for a valid cause, was the proper
dismissal procedure observed?
HELD 1: Yes.
 They were considered regular employees since Day One of their
employment.
 In this case, the first two requisites for regularization under the 1992
Manual — full-time faculty status and completion of the probationary
period — are conceded in favor of petitioners. However, the parties
disagree on the fulfillment of the third requisite: whether petitioners'
performance within the probationary period was satisfactory.
 It must be pointed out that the school's exercise of administrative
prerogative in this respect is not plenary as respondents would like us to
believe. The exercise of that prerogative is still subject to the limitations
imposed by the Labor Code and jurisprudence on valid probationary
employment.
 Valid probationary employment:
1. the employer must have made known to the probationary employee
the reasonable standard that the latter must comply with to qualify
as a regular employee; and
2. the employer must have informed the probationary employee of the
applicable performance standard at the time of the latter's
engagement.
 However, the records lack evidence that respondent college clearly and
directly communicated to petitioners, at the time they were hired, what
reasonable standards they must meet for the school to consider their
performance satisfactory and for it to grant them regularization as a
result.
52
HELD 2: Yes.
 We find that these infractions committed by petitioners in connection
with their jobs have been established by substantial evidence and
constitute willful disobedience or conduct analogous thereto.
 1st - act of selling computerized final examination sheets to students
without respondent college's permission, despite the prior advice of their
subject area coordinator, indicated a knowing disregard by petitioners of
their superior's express order not to do so.
 2nd - Fallarme sold textbooks to her students without permission, even
after the act had been clearly prohibited in a general meeting, her act also
indicated her willful disregard of a school policy.
 3rd - Martinez-Gacos' act of organizing out-of-campus activities without
the consent of respondent college and in violation of its Student
Handbook likewise shows traces of insubordination or acts analogous
thereto.
 It must be stressed that the rules and policies that were disobeyed by
petitioners are necessary incidents of the supervision and control schools
exercise over teachers as well as students.
 Employer has the right to dismiss its erring employees as a measure of
self-protection against acts inimical to its interest. With respect to
schools, this right must be seen in light of their recognized prerogative
to set high standards of efficiency for its teachers.
HELD 3: No.
 Although the dismissal of petitioner was for a valid cause, we
nevertheless find that respondent college failed to comply with the
proper procedure for their dismissal in violation of procedural due
process.
 Failed to observe two-notice rule
1. written notice specifying the ground for termination and giving a
reasonable opportunity for that employee to explain the latter's side;
and
2. written notice of termination indicating that upon due consideration
of all the circumstances, grounds have been established to justify the
latter's termination.
If the dismissal was for a valid cause, failure to comply with the proper
procedural requirements shall not nullify the dismissal, but shall only warrant
the payment of indemnity in the form of nominal damages. - P30,000