LABOR LAW 1 – DEAN PORFI PANGANIBAN

CASES FOR FINALS

TH – 530:830PM

MATERNITY CHILDREN’S HOSPITAL VS. SECRETARY OF LABOR

GR No. 78909 June 30,1989
Medialdea, J.

FACTS:

This is a petition for certiorari seeking the annulment of the Decision of the respondent
Secretary of Labor dated September 24, 1986, affirming with modification the Order of
respondent Regional Director of Labor, Region X, dated August 4, 1986, awarding salary
differentials and emergency cost of living allowances (ECOLAS) to employees of petitioner, and
the Order denying petitioner's motion for reconsideration dated May 13, 1987, on the ground of
grave abuse of discretion.

Petitioner is a semi-government hospital, managed by the Board of Directors of the

Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as
holdover President. The hospital derives its finances from the club itself as well as from paying
patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity
Sweepstakes Office and the Cagayan De Oro City government.

Petitioner has forty-one (41) employees. Aside from salary and living allowances, the
employees are given food, but the amount spent therefor is deducted from their respective
salaries.
On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of Labor and
Employment, Region X, for underpayment of their salaries and ECOLAS, which was docketed as
ROX Case No. CW-71-86.

The Regional Director issued an Order dated August 4, 1986, directing the payment of
P723,888.58, representing underpayment of wages and ECOLAs to all the petitioner's
employees. Petitioner appealed from this Order to the Minister of Labor and Employment, Hon.
Augusto S. Sanchez, who rendered a Decision on September 24, 1986, modifying the said Order
in that deficiency wages and ECOLAs should be computed only from May 23, 1983 to May 23,
1986.

On October 24, 1986, the petitioner filed a motion for reconsideration which was denied
by the Secretary of Labor in his Order dated May 13, 1987.

ISSUE:

Whether or not the petitioners are entitled to payment for the underpayment of their
salaries and ECOLAS (Emergency Cost of Living Allowance)?

RULING:
 Yes. This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as
amended by E.O. No. 111. Labor standards refer to the minimum requirements prescribed by
existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance
and other monetary and welfare benefits, including occupational, safety, and health standards
(Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office,
dated September 16, 1987).

MAXIMO CALALANG VS. A. D. WILLIAMS

GR No. 47800 December 2, 1940
LAUREL, J.

FACTS:

 Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, filed a
WRIT OF PROHIBITION against the respondents;
o A.D. Williams (Chairman, National Traffic Commission)
o Vicente Fragrante (Director of Public Works)
o Sergio Bayan (Acting Secretary, Public Works and Communications)
o Eulogio Roriguez, (Mayor, City of Manila)
o Juan Dominguez (Acting Chief of Police, City of Manila)
 It is alleged in the petition that the National Traffic Commission, in its resolution of July
17, 1940, resolved to recommend to the Director of Public Works and to the Secretary of
Public Works and Communications that animal-drawn vehicles be prohibited from
passing
o along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas
Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.;
o and along Rizal Avenue extending from the railroad crossing at Antipolo Street to
Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date
of the opening of the Colgante Bridge to traffic;
o that the Chairman of the National Traffic Commission, on July 18, 1940
recommended to the Director of Public Works the adoption of the measure
proposed in the resolution aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548
 Commonwealth Act No. 548 authorizes said Director of Public Works, with the
approval of the Secretary of Public Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on national roads
 August 2, 1940, the Director of Public Works, in his first indorsement to the
Secretary of Public Works and Communications, recommended to the latter the approval
of the recommendation made by the Chairman of the National Traffic Commission as
aforesaid, with the modification that the closing of Rizal Avenue to traffic to animal-
drawn vehicles be limited to the portion thereof extending from the railroad crossing at
Antipolo Street to Azcarraga Street
 August 10, 1940, the Secretary of Public Works and Communications, in his second
indorsement addressed to the Director of Public Works, approved the recommendation
of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn
vehicles, between the points and during the hours as above indicated, for a period of
one year from the date of the opening of the Colgante Bridge to traffic; that
the Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused
 to be enforced the rules and regulations thus adopted; that as a consequence of such
enforcement, all animal-drawn vehicles are not allowed to pass and pick up passengers
in the places above-mentioned to the detriment not only of their owners but of the
riding public as well.

ISSUES:

 PETITIONER’S CONTENTION: C.A.548 UNCONSTITUTIONAL

o because it constitutes an undue delegation of legislative power
o unlawful interference with legitimate business or trade and abridge the right to
personal liberty and freedom of locomotion
o infringe upon the constitutional precept regarding the promotion of social justice
to insure the well-being and economic security of all the people

ASSAILED LAW/ STATUTE

 CA 548 (SEC.1)
o To promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive
orders of the President of the Philippines, the Director of Public Works, with the
approval of the Secretary of Public Works and Communications, shall
promulgate the necessary rules and regulations to regulate and control
the use of and traffic on such roads and streets. Such rules and
regulations, with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or other structures within a
reasonable distance from along the national roads. Such roads may be
temporarily closed to any or all classes of traffic by the Director of
Public Works and his duly authorized representatives whenever the
condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest, or for a
specified period, with the approval of the Secretary of Public Works and
Communications

RULING:

 Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the
paramount police power of the state.
 CA 548 aims to promote safe transit upon and avoid obstructions on national
roads, in the interest and convenience of the public
 It was inspired by a desire to relieve congestion of traffic.

DOCTRINE
 Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but
the humanization of laws and the equalization of social and economic forces
by the State so that justice in its rational and objectively secular conception may at
least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-
 constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principle of salus populi est suprema lex.
 Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that
should be equally and evenly extended to all groups as a combined force in our social
and economic life, consistent with the fundamental and paramount objective of the state
of promoting the health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number.”

SAN MIGUEL CORP. VS CA ET. AL.

G.R. No. 146775 January 30, 2002
Kapunan, J.:

FACTS:
On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District
Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta.
Filomena, Iligan City. In the course of the inspection, it was discovered that there was
underpayment by SMC of regular Muslim holiday pay to its employees.
Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that (t)he provisions
of this Code shall be applicable only to Muslims.
RULING:
There should be no distinction between Muslims and non-Muslims as regards payment
of benefits for Muslim holidays. The Court of Appeals did not err in sustaining Undersecretary
Espaol who stated:
Assuming arguendo that the respondents position is correct, then by the same token, Muslims
throughout the Philippines are also not entitled to holiday pays on Christian holidays declared
by law as regular holidays. We must remind the respondent-appellant that wages and other
emoluments granted by law to the working man are determined on the basis of the criteria laid
down by laws and certainly not on the basis of the workers faith or religion.
At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that nothing herein shall
be construed to operate to the prejudice of a non-Muslim.
In addition, the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE
Secretary Bienvenido E. Laguesma on 14 December 1999 categorically stated:
Considering that all private corporations, offices, agencies, and entities or establishments
operating within the designated Muslim provinces and cities are required to observe Muslim
holidays, both Muslim and Christians working within the Muslim areas may not report
for work on the days designated by law as Muslim holidays.
 PENARANDA VS. BANGANGA PLYWOOD CORP ET.AL
GR No: 159577 May 3, 2006

FACTS:

In June 1999, Peñaranda was hired by Baganga Plywood Corporation (owned by Hudson Chua)
to take charge of the operations and maintenance of its steam plant boiler. Peñaranda was
employed as a Foreman/Boiler Head/Shift Engineer tasked to do the following tasks among
others:
“1. To supply the required and continuous steam to all consuming units at minimum cost.
“2. To supervise, check and monitor manpower workmanship as well as operation of boiler and
accessories.
“3. To evaluate performance of machinery and manpower.
xxx
“5. To train new employees for effective and safety while working.
xxx
“7. To recommend personnel actions such as: promotion, or disciplinary action.
xxx
In 2001, BPC shut down due to some repairs and maintenance. BPC did not technically fire
Peñaranda but due to the latter’s insistence, BPC gave him his separation benefits.
BPC subsequently reopened but Peñaranda did not reapply.
Peñaranda now claims that BPC still needed to pay him his overtime pays and premium pays.
The NLRC ruled that Peñaranda is a managerial employee and as such he is not entitled to
overtime and premium pay as stated under the Labor Code. Peñaranda appealed. He said that
he is not a managerial employee.

ISSUE:

Whether or not Peñaranda is entitled to overtime and premium pay.

HELD:

No. Though there is an error made by the NLRC in finding Peñaranda as a managerial
employee, the Supreme Court still ruled that Peñaranda is not entitled to overtime and premium
pay.
Peñaranda is not a managerial employee. Under the Implementing Rules and Regulations of the
Labor Code, managerial employees are those that perform the following:
“(1) Their primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof;
“(2) They customarily and regularly direct the work of two or more employees therein;
“(3) They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any other change
of status of other employees are given particular weight.”
Peñaranda does not meet the above requirements.
Peñaranda is instead considered as a managerial staff. Under the Implementing Rules and
Regulations of the Labor Code, managerial staffs are those that perform the following:
“(1) The primary duty consists of the performance of work directly related to management
policies of the employer;
“(2) Customarily and regularly exercise discretion and independent judgment;
“(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision
thereof; or (ii) execute under general supervision work along specialized or technical lines
requiring special training, experience, or knowledge; or (iii) execute under general supervision
special assignments and tasks; and
“(4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in
paragraphs (1), (2), and (3) above.”
Peñaranda’s function as a shift engineer illustrates that he was a member of the managerial
staff. His duties and responsibilities conform to the definition of a member of a managerial staff
under the Implementing Rules.
Peñaranda supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the
engineering section. This work necessarily required the use of discretion and independent
judgment to ensure the proper functioning of the steam plant boiler.
Further, Peñaranda in his position paper admitted that he was a supervisor for BPC. As
supervisor, petitioner is deemed a member of the managerial staff.

FEATI UNIVERSITY VS BAUTISTA & FEATI UNIVERSITY FACULTY

G.R. No. L-21278 December 27, 1966
ZALDIVAR, J.

FACTS:

January 14, 1963, the President of Feati University Faculty Club (PAFLU) wrote a letter
to Mrs. Victoria L. Araneta, President of Feati University informing her that it registered as a
labor union. PAFLU sent another letter with 26 demands in relation to their employment and
requesting an answer within 10 days from receipt thereof. Araneta answered the letters,
requesting that she be given at least 30 days to study thoroughly the different phases of the
demands. Meanwhile counsel for Feati, wrote a letter to the President of PAFLU demanding
proof of its majority status and designation as a bargaining representative. The President of
PAFLU rejected the extension of time and filed a notice of strike with the Bureau of Labor due
to Feati’s refusal to bargain collectively.

Parties were called to the Conciliation Division of the Bureau of Labor but efforts to conciliate
them failed. On February 18, 1963, PAFLU declared a strike and established picket lines in the
premises of Feati resulting in the disruption of classes in the University. The President of the
Philippines certified to the Court of Industrial Relations (CIR) the dispute between Feati and
PAFLU pursuant to the provisions of Section 10 of Republic Act No. 875.

3 cases were filed with the CIR

(1) CIR Case No. 41-IPA – PAFLU’s petition to declare in contempt of court since Feati refused
to accept them back to work in violation of the return-to-work order of March 30, 1963 and has
employed other professors and/or instructors to take their places. Also includes the motion to
dismiss filed by Feati contending that the CIR has no jurisdiction over the case.

(2) CIR Case No. 1183-MC – PAFLU’s petition for certification election praying that it be certified
as the sole and exclusive bargaining representative. This case was later withdrawn since the
Case 41-IPA had already been certified by the President to the CIR and has absorbed the issues
herein.

(3) CIR Case No. V-30 – PAFLU’s complaint for indirect contempt of court filed against the
administrative officials of the Feati reiterating Case 41-IPA.

May 10, 1963: Feati filed before the SC a petition for certiorari and prohibition with writ of
preliminary injunction which was issued upon the Feati's filing a bond of P50,000 (increased
from P1,000), ordering CIR Judge Jose S. Bautista to desist and refrain from further proceeding.
On the strength of the presidential certification, Judge Bautista set the case for hearing. Feati,
thru counsel filed a motion to dismiss the case upon the ground that the CIR has no jurisdiction
over the case, because: (1) the Industrial Peace Act is NOT applicable to the University, it being
an educational institution, nor to the members of the Faculty Club, they being independent
contractors (2) the presidential certification is violative of Section 10 of the Industrial Peace Act,
as the University is not an industrial establishment and there was no industrial dispute which
could be certified to the CIR. Judge Bautista denied the motion to dismiss and ordered the
strikers to return immediately to work and the University to take them back under the last
terms and conditions existing before the dispute arose.

Without the motion for reconsideration having been acted upon by the CIR en banc, Judge
Bautista set the case for hearing on the merits but was cancelled upon Feati’s petition for
certiorari alleging that Judge Jose S. Bautista acted without, or in excess of, jurisdiction, or with
grave abuse of discretion, in taking cognizance of, and in issuing the questioned orders in, CIR
Cases Nos. 41-IPA 1183-MC and V-30. Feati claims that it is not an employer within the
contemplation of R.A. 875, because it is not an industrial establishment. It also claims that it is
only a lessee of the services of its professors and/or instructors pursuant to a contract of
services entered into between them because the University does not exercise control over their
work.

ISSUE:

Whether can be considered an employer and PAFLU as an employee to be covered by

R.A. 875 and have right to unionise

RULING:

YES. Petition for certiorari and prohibition with preliminary injunction in Case G.R. No. L-
21278 is dismissed.

The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term employer
include any person acting in the interest of an employer, directly or indirectly, but shall not
include any labor organization (otherwise than when acting as an employer) or any one acting
in the capacity or agent of such labor organization.

In this case, the University is operated for profit hence included in the term of employer.
Professors and instructors, who are under contract to teach particular courses and are paid for
their services, are employees under the Industrial Peace Act.

Professors and instructors are not independent contractors. university controls the work of the
members of its faculty; that a university prescribes the courses or subjects that professors
teach, and when and where to teach; that the professors’ work is characterized by regularity
and continuity for a fixed duration; that professors are compensated for their services by wages
and salaries, rather than by profits; that the professors and/or instructors cannot substitute
others to do their work without the consent of the university; and that the professors can be
laid off if their work is found not satisfactory. All these indicate that the university has control
over their work; and professors are, therefore, employees and not independent contractors.

Moreover, even if university professors are considered independent contractors, still they would
be covered by Rep. Act No. 875. Professors, instructors or teachers of private educational
institutions who teach to earn a living are entitled to the protection of our labor laws — and one
such law is Republic Act No. 875.

To certify a labor dispute to the CIR is the prerogative of the President under the law, and this
Court will not interfere in, much less curtail, the exercise of that prerogative. The jurisdiction of
the CIR in a certified case is exclusive. The parties involved in the case may appeal to the
Supreme Court from the order or orders thus issued by the CIR. The return-to-work order
cannot be considered as an impairment of the contract entered into with the replacements.
Besides, labor contracts must yield to the common good and such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and similar subjects.

MANILA MANDARIN EMPLOYEES UNION VS. NATIONAL LABOR RELATIONS

COMMISSION
GR No.: 108556 November 19, 1996
NARVASA, C.J.

FACTS:

On October 30, 1986, the Manila Mandarin Employees Union, as exclusive bargaining agent of
the rank-and-file employees of the Manila Mandarin Hotel, Inc., filed with the NLRC Arbitration
Branch a complaint in its members behalf to compel MANDARIN to pay the salary differentials
of the individual employees concerned because of wage distortions in their salary structure
allegedly created by the upward revisions of the minimum wage pursuant to various Presidential
Decrees and Wage Orders, and the failure of MANDARIN to implement the corresponding
increases in the basic salary rate of newly-hired employees.

On January 15, 1987, the Union filed its Position Paper amplifying the allegations of its
complaint and setting forth the legal bases of its demands against MANDARIN; and on March
25, 1987, it filed an Amended Complaint presenting an additional claim for payment of salary
differentials to the union members affected, allegedly resulting from underpayment of wages.
The Labor Arbiter eventually ruled in favor of the UNION, holding that there were in fact wage
distortions entitling its members to salary adjustments totalling P26,173,601.25 -- for 541
employees -- as well as underpayments amounting to P1,978,296.18 -- 182 employees.
The Union filed with NLRC Arbitration Branch a complaint on wage distortions. The Labor
Arbiter ruled in favor of the Union while the NLRC Commissioner Zapanata reversed the same.
The Union contends that the Mandarin hotel file its appeal three days beyond the reglementary
period.
ISSUE:

Whether or not the NLRC had jurisdiction to take cognizance of MANDARINS appeal from the
Labor Arbiters decision.

RULING:

The court rules that the Commission acted correctly in accepting and acting on Mandarin’s
appeal. The employee who was authorized to receive payment so the respondent was allowed
to pay docketing fee on the next business day which was February 4, 1991. In review of the
considerations and in the interest of justice was quite served when Mandarin’s appeal was given
due course despite delayed payment of fees, the reglementary period confers a directory, not a
mandatory, power to dismiss an appeal.

SILVERIO, LYRA AUREA L. MANILA TERMINAL CO. INC., VS. CIR, ET AL.
G.R. NO. L-4148 JULY 16, 1952
PARAS, CJ.

FACTS:

On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as to the
petitioner, undertook the arrastre service in some of the piers in Manila's Port Area at the
request and under the control of the United States Army. The petitioner hired some thirty men
as watchmen on twelve-hour shifts at a compensation of P3 per day for the day shift and P6
per day for the night shift. On February 1, 1946, the petitioner began the postwar operation of
the arrastre service at the present at the request and under the control of the Bureau of
Customs, by virtue of a contract entered into with the Philippine Government. The watchmen of
the petitioner continued in the service with a number of substitutions and additions, their
salaries having been raised during the month of February to P4 per day for the day shift and
P6.25 per day for the nightshift. On March 28, 1947, Dominador Jimenez, a member of the
Manila Terminal Relief and Mutual Aid Association, sent a letter to the Department of Labor,
requesting that the matter of overtime pay be investigated, but nothing was done by the
Department. On April 29, 1947, Victorino Magno Cruz and five other employees, also member
of the Manila Transit Mutual Aid Association, filed a 5-point demand with the Department of
Labor, including overtime pay, but the Department again filed to do anything about the matter.
On May 27, 1947, the petitioner instituted the system of strict eight-hour shifts. On June 19,
1947, the Manila Port Terminal Police Association, not registered in accordance with the
provisions of Commonwealth Act No. 213, filed a petition with the Court of Industrial Relations.
On July 16, 1947, the Manila Terminal Relief and Mutual Aid Association was organized for the
first time, having been granted certificate No. 375 by the Department of Labor. On July 28,
1947, Manila Terminal Relief and Mutual Aid Association filed an amended petition with the
Court of Industrial Relations praying, among others, that the petitioner be ordered to pay its
watchmen or police force overtime pay from the commencement of their employment. On May
9, 1949, by virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the
President of the Philippines, the entire police force of the petitioner was consolidated with the
Manila Harvor Police of the Customs Patrol Service, a Government agency under the exclusive
control of the Commissioner of Customs and the Secretary of Finance The Manila Terminal
Relief and Mutual Aid Association will hereafter be referred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1, 1950, as
amended on April 18, 1950, while dismissing other demands of the Association for lack of
jurisdiction, ordered the petitioner to pay to its police force —

a. Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as
additional overtime compensation for the period from September 1, 1945 to May 24,
1947;
b. Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00
a.m. during the same period:
c. Additional compensation of 50 per cent for work performed on Sundays and legal
holidays during the same period;
d. Additional compensation of 50 per cent for work performed on Sundays andlegal
holidays from May 24, 1947 to May 9, 1949; and
e. Additional compensation of 25 per cent for work performed at night from May 29, 1947
to May 9, 1949.
f.
With reference to the pay for overtime service after the watchmen had been integrated into the
Manila Harbor Police, Judge Yanson ruled that the court has no jurisdiction because it affects
the Bureau of Customs, an instrumentality of the Government having no independent
personality and which cannot be sued without the consent of the State. (Metran vs. Paredes,
45. Off. Gaz., 2835.)

The petitioner find a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Judge Yanson, concurred in by
Judge Jose S. Bautista, promulgated on July 13, 1950, a resolution denying both motions for
reconsideration. Presiding Judge Arsenio C. Roldan, in a separate opinion concurred in by Judge
Modesto Castillo, agreed with the decision of Judge Yanson, as to the dismissal of other
demands of the Association, but dissented therefrom as to the granting of overtime pay. In a
separate decisive opinion, Judge Juan S. Lanting concurred in the dismissal of other demands of
the Association. With respect to overtime compensation, Judge Lanting ruled:

The decision under review should be affirmed in so far it grants compensation for overtime on
regular days (not Sunday and legal holidays)during the period from the date of entrance to duty
to May 24, 1947, such compensation to consists of the amount corresponding to the four hours'
overtime at the regular rate and an additional amount of 25 per cent thereof.

As to the compensation for work on Sundays and legal holidays, the petitioner should pay to its
watchmen the compensation that corresponds to the overtime (in excess of 8 hours) at the
regular rate only, that is, without any additional amount, thus modifying the decision under
review accordingly.

The watchmen are not entitled to night differential pay for past services, and therefore the
decision should be reversed with the respect thereto.

The petitioner has filed a present petition for certiorari.

ISSUE:
Whether or not he petitioner's watchmen is entitled to extra compensation for past overtime
work?

RULING:

Yes, they are entitled. Sections 3 and 5 of Commonwealth Act 444 expressly provides for the
payment of extra compensation in cases where overtime services are required, with the result
that the employees or laborers are entitled to collect such extra compensation for past overtime
work.
The court said tha, It is high time that all employers were warned that the public is interested in
the strict enforcement of the Eight-Hour Labor Law. This was designed not only to safeguard
the health and welfare of the laborer or employee, but in a way to minimize unemployment by
forcing employers, in cases where more than 8-hour operation is necessary, to utilize different
shifts of laborers or employees working only for eight hours each.
The appealed decision was affirmed.

RUGA ET AL. VS. NLRC

G.R. No. 72654-61 January 22, 1990
FERNAN, C.J.

FACTS:

On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge de Guzm
an, president of private respondent, to proceed to the police station at Camaligan, Camarines S
ur, for investigation on the report that they sold some of their fish-catch at midsea to the prejud
ice of private respondent. Petitioners denied the charge claiming that the same was a counterm
ove to their having formed a labor union and becoming members of Defender of Industrial Agric
ultural Labor Organizations and General Workers Union (DIALOGWU) on September 3, 1983.
During the investigation, no witnesses were presented to prove the charge against petitioners,
and no criminal charges were formally filed against them. Notwithstanding, private respondent r
efused to allow petitioners to return to the fishing vessel to resume their work on the same day,
September 11, 1983

ISSUE:

Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are e
mployees of its owner-operator, De Guzman Fishing Enterprises, and if so, whether or not they
were illegally dismissed from their employment.

HELD:

Yes, the court held that the petitioners were employeess of De Guzman Fishing Enterprises. Eve
n on the assumption that petitioners indeed sold the fish-catch at midsea the act of private resp
ondent virtually resulting in their dismissal evidently contradicts private respondent's theory of "
joint fishing venture" between the parties herein. A joint venture, including partnership, presup
poses generally a parity of standing between the joint co-venturers or partners, in which each p
arty has an equal proprietary interest in the capital or property contributed 16 and where each
party exercises equal lights in the conduct of the business. 17 It would be inconsistent with the
principle of parity of standing between the joint co-venturers as regards the conduct of business
, if private respondent would outrightly exclude petitioners from the conduct of the business wit
hout first resorting to other measures consistent with the nature of a joint venture undertaking,
Instead of arbitrary unilateral action, private respondent should have discussed with an open mi
nd the advantages and disadvantages of petitioners' action with its joint co-venturers if indeed t
here is a "joint fishing venture" between the parties. But this was not done in the instant case.
Petitioners were arbitrarily dismissed notwithstanding that no criminal complaints were filed aga
inst them. The lame excuse of private respondent that the non-filing of the criminal complaints
against petitioners was for humanitarian reasons will not help its cause either.

MAKATI HABERDASHERY, INC. v. NLRC

GR No. 83380-81 November 15, 1989
Fernan, CJ
FACTS:

The private respondents herein have been working for Makati Haberdashery, Inc (MHI)
as tailors, seamstress, sewers, basters and “plantsadoras”. They are paid on a piece-rate basis
except Maria Angeles and Leonila Serafina who are paid on a monthly basis. They are also
given a daily allowance of P3.00 provided they report for work before 9:30am everyday. They
are required to work from or before 9:30am up to 6:00 or 7:00pm from Monday to Saturday
and during peak periods even on Sundays and holidays.
On 1984, the Sandigan ng Manggagawang Pilipino, a labor organization of the workers,
filed a complaint for (a) underpayment of the basic wage, and living allowance; (b) non-
payment of overtime work, holiday pay, service incentive pay, 13th month pay; and (c) other
benefits provided for under some Wage Orders.

During the pendency of the first case, Dioscoro Pelobello left with Salvador Rivera, a
salesman of MHI, an open package, which was discovered to contain a “jusi” barong tagalog.
When confronted, Pelobello replied that the same was ordered by Casimiro Zapata for his
customer. Zapata allegedly admitted that he copied the design of MHI. But in the afternoon,
when again questioned about the said barong, Pelobello and Zapata denied ownership of the
same. Consequently, a memorandum was issued to them to explain why no action should be
taken against them for accepting a job order which is prejudicial and in direct competition with
the business of the company. Both allegedly did not submit their explanation and did not report
for work. Hence, they were dismissed by MHI. They filed a complaint for illegal dismissal.

Labor Arbiter Ceferina J. Diosana found MHI guilty of illegal dismissal, violating the
decrees on the cost of living allowance, service incentive leave pay and the 13th Month Pay but
dismissed the claims for underpayment re: violation of the minimum wage law for lack of merit.
The NLRC affirmed the LA’s decision.

ISSUE:

Is there employer-employee relationship existing between MHI and the respondent

workers?
HELD:

YES. We have repeatedly held in countless decisions that the test of employer-employee
relationship is four-fold: (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. It is the
so-called “control test” that is the most important element.

This simply means the determination of whether the employer controls or has reserved
the right to control the employee not only as to the result of the work but also as to the means
and method by which the same is to be accomplished.

The facts at bar indubitably reveal that the most important requisite of control is
present. As gleaned from the operations of MHI, when a customer enters into a contract with
the haberdashery or its proprietor, MHI directs an employee who may be a tailor, pattern
maker, sewer, or “planstadora” to take the customer’s measurements, and to sew the pants,
coat, or shirt as specified by the customer. Supervision is actively manifested in all these
aspects – the manner and quality of cutting, sewing and ironing.

From the memorandum alone, it is evident that MHI has reserved the right to control its
employees not only as to the result but also the means and methods by which the same are to
be accomplished. That private respondents are regular employees is further proven by the fact
that they have to report for work regularly from 9:30am to 6:00pm or 7:00pm and are paid an
additional allowance of P3.00 daily if they report for work before 9:30am and which is forfeited
when they arrive at or after 9:30am.

Since private respondents are regular employees, necessarily the argument that they are
independent contractors must fail. As established in the preceding paragraphs, private
respondents did not exercise independence in their own methods, but on the contrary were
subject to the control of petitioners from the beginning of their tasks to their completion. Unlike
independent contractors who generally rely on their own resources, the equipment, tools,
accessories and paraphernalia used by private respondents are supplied and owned by MHI.
Private respondents are totally dependent on petitioners in all these aspects.

MARAGUINOT, JR. and PAULINO ENERO vs. NATIONAL LABOR RELATIONS

COMMISSION
G.R. No. 120969. January 22, 1998
DAVIDE, JR., J.:

FACTS:

Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private

respondents on 18 July 1989 as part of the filming crew with a salary of P375.00 per week.
About four months later, he was designated Assistant Electrician with a weekly salary of
P400.00, which was increased to P450.00 in May 1990. In June 1991, he was promoted to the
rank of Electrician with a weekly salary of P475.00, which was increased to P593.00 in
September 1991.
 Petitioner Paulino Enero, on his part, claims that private respondents employed him in
June 1990 as a member of the shooting crew with a weekly salary of P375.00, which was
increased to P425.00 in May 1991, then to P475.00 on 21 December 1991.[3]
Petitioners tasks consisted of loading, unloading and arranging movie equipment in the shooting
area as instructed by the cameraman, returning the equipment to Viva Films warehouse,
assisting in the fixing of the lighting system, and performing other tasks that the cameraman
and/or director may assign.[4]

Sometime in May 1992, petitioners sought the assistance of their supervisor, Mrs.
Alejandria Cesario, to facilitate their request that private respondents adjust their salary in
accordance with the minimum wage law. In June 1992, Mrs. Cesario informed petitioners that
Mr. Vic del Rosario would agree to increase their salary only if they signed a blank employment
contract. As petitioners refused to sign, private respondents forced Enero to go on leave in June
1992, then refused to take him back when he reported for work on 20 July 1992. Meanwhile,
Maraguinot was dropped from the company payroll from 8 to 21 June 1992, but was returned
on 22 June 1992. He was again asked to sign a blank employment contract, and when he still
refused, private respondents terminated his services on 20 July 1992. Petitioners thus sued for
illegal dismissal before the Labor Arbiter. The NLRC, in reversing the Labor Arbiter, then
concluded that these circumstances, taken together, indicated that complainants (herein
petitioners) were project employees thus reversing the decision of the Labor Arbiter.

ISSUE:

Whether or not the NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in: (1) finding that petitioners were project employees; (2) ruling that
petitioners were not illegally dismissed; and (3) reversing the decision of the Labor Arbiter.

RULING:

Yes, a work pool may exist although the workers in the pool do not receive salaries and
are free to seek other employment during temporary breaks in the business, provided that the
worker shall be available when called to report for a project. Although primarily applicable to
regular seasonal workers, this set-up can likewise be applied to project workers insofar as the
effect of temporary cessation of work is concerned. This is beneficial to both the employer and
employee for it prevents the unjust situation of coddling labor at the expense of capital and at
the same time enables the workers to attain the status of regular employees.

The Courts ruling here is meant precisely to give life to the constitutional policy of
strengthening the labor sector, but, we stress, not at the expense of management. Lest it be
misunderstood, this ruling does not mean that simply because an employee is a project or work
pool employee even outside the construction industry, he is deemed, ipso jure, a regular
employee. All that we hold today is that once a project or work pool employee has been: (1)
continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or
nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business
or trade of the employer, then the employee must be deemed a regular employee, pursuant to
Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow circumvention
of labor laws in industries not falling within the ambit of Policy Instruction No. 20/Department
Order No. 19, hence allowing the prevention of acquisition of tenurial security by project or
work pool employees who have already gained the status of regular employees by the
employers conduct.
 In closing then, as petitioners had already gained the status of regular employees, their
dismissal was unwarranted, for the cause invoked by private respondents for petitioners
dismissal, viz., completion of project, was not, as to them, a valid cause for dismissal under
Article 282 of the Labor Code. As such, petitioners are now entitled to back wages and
reinstatement, without loss of seniority rights and other benefits that may have accrued.
Nevertheless, following the principles of suspension of work and no pay between the end of one
project and the start of a new one, in computing petitioners back wages, the amounts
corresponding to what could have been earned during the periods from the date petitioners
were dismissed until their reinstatement when petitioners respective Shooting Units were not
undertaking any movie projects, should be deducted.

Petitioners were dismissed on 20 July 1992, at a time when Republic Act No. 6715 was
already in effect. Pursuant to Section 34 thereof which amended Section 279 of the Labor Code
of the Philippines and Bustamante v. NLRC, petitioners are entitled to receive full back wages
from the date of their dismissal up to the time of their reinstatement, without deducting
whatever earnings derived elsewhere during the period of illegal dismissal, subject, however, to
the above observations.
 INSULAR LIFE ASSURANCE CO., LTD. vs. NATIONAL LABOR RELATIONS
COMMISSION et.al.
G.R. No. 84484 November 15, 1989
Narvasa, J.

FACTS:

In 1968, Insular Life Assurance Co., Ltd. and Melecio T. Basiao entered into a contract
wherein he was authorized by Insular Life Assurance to solicit within the Philippines applications
for insurance policies and annuities in accordance with its existing rules and regulations. He
would then receive compensation, in the form of commissions.
The contract also contained, among others, provisions governing the relations of the parties,
the duties of the Agent, the acts prohibited to him, and the modes of termination of the
agreement.

In 1972, the parties entered into another contract, an Agency Manager's Contract and to
implement his end of it Basiao organized an agency or office to which he gave the name M.
Basiao and Associates, while concurrently fulfilling his commitments under the first contract
with the Company.

In 1979, Insular Life Assurance terminated the Agency Manager's Contract. After vainly
seeking a reconsideration, Basiao sued the Insular Life Assurance in a civil action. This
prompted the latter to terminate also his engagement under the first contract and to stop
payment of his commissions.

ISSUE:

Whether or not Melecio Basiao is an employee or an independent contractor of Insular

Life Assurance Co., Ltd.

HELD:

There is no dearth of authority holding persons similarly placed as respondent Basiao to

be independent contractors, instead of employees of the parties for whom they worked.

The respondents limit themselves to pointing out that Basiao's contract with the Insular
Life Assurance bound him to observe and conform to such rules and regulations as the latter
might from time to time prescribe. 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."
The Court, therefore, rules that under the contract invoked by him, Basiao was not an employee
of the petitioner, but a commission agent, an independent contractor whose claim for unpaid
commissions should have been litigated in an ordinary civil action.

ST. JOSEPH’S COLLEGE vs. ST. JOSEPH’S COLLEGE WORKERS’ ASSOCIATION

(SAMAHAN)
G.R. No. 155609 January 17, 2005

FACTS:

Petitioner is a non-stock, non-profit Catholic educational institution while respondent is a

legitimate labor organization and currently the official bargaining representative of all
employees of petitioner. Respondent had an existing Collective Bargaining Agreement (CBA)
with petitioner. Petitioner increased its tuition fees for all its departments. Thus, in accordance
with Article VII, Section 1 of its CBA with respondent, providing for the 85% allocation of
incremental proceeds from every tuition fee increase for the adjustments of salary and benefits
of employees, respondents arrived at a computation and presented it to the petitioner, which
the latter averred by presenting a different computation based on the school’s income, not
merely on the categorical increase in tuition fee.

ISSUE:

Whether or not the incremental proceeds from a tuition fee increase is based on the
schools’ income and not on the categorical fee increase.

RULING:

The Petition has no legal merit. First, Section 5(2) of Republic Act (RA) 6728 allows a tuition fee
increase only under the condition that at least 70 percent of the increase shall be disbursed as
salaries, wages, allowances and other benefits for teaching and nonteaching personnel. The law
imposes this requirement without exceptions or qualifications. Second, the question of whether
to increase tuition fees within the parameters of the law lies within the discretion and power of
the school, not the personnel thereof. Hence, employees should not be held responsible for its
consequent ill effects. Third, Petitioner has failed to present evidence showing it actually
suffered bottom line losses as a direct and necessary consequence of the tuition fee increase.
Fourth, if the law is indeed disadvantageous to the educational system and grossly harmful to
private schools, the remedy lies not in this Court but in Congress.

ZIALCITA V. PHILIPPINE AIRLINES, INC.

Case No. RO4-3-3398-76 February 20, 1977
FACTS:

Complainant Zialcita, an international stewardess of Philippine Airlines, Inc. (PAL), was

discharged from the service on account of her marriage. In separating Zialcita, PAL invoked its
policy which stated that flight attendants must be single, and shall be automatically separated
from employment in the event they subsequently get married. They claimed that this policy was
in accordance with the provision of the Labor Code, Article 132. On the other hand, Zialcita
questioned her termination on account of her marriage, invoking Article 136 of the same law.

ISSUE:

Whether or not Zialcita was validly terminated on account of her marriage.

RULING:

No, the termination was improper. When Presidential Decree No. 148, otherwise known
as the Women and Child Labor Law, was promulgated in March 13, 1973, PAL’s policy had met
its doom. However, since no one challenged its validity, the said policy was able to obtain a
momentary reprieve. Section 8 of PD 148 is exactly the same provision reproduced verbatim in
Article 136 pf the Labor Code, which was promulgated on May 1, 1974 and took effect six
months later.
Although Article 132 enjoins the Secretary of Labor to establish standards that will
ensure the safety and health of women employees and in appropriate cases shall by regulations
require employers to determine appropriate minimum age and other standards for termination
in special occupations, such as those of flight attendants, it is logical to presume that, in the
absence of said standards or regulations which are yet to be established, the policy of PAL
against marriage is patently illegal.
Article 136 is not intended to apply only to women employed in ordinary occupations, or it
should have categorically expressed so. The sweeping intendment of the law, be it on special or
ordinary occupations, is reflected in the whole text and supported by Article 135 of non-
discrimination on the employment of women.

PHIL ASSOCIATION OF SERVICE EXPORTERS INC. VS. DRILON

GR No. 81958 June 30, 1988

FACTS:

Petitioner, Phil association of Service Exporters, Inc., is engaged principally in

the recruitment of Filipino workers, male and female of overseas employment. It challenges the
constitutional validity of Dept. Order No. 1 (1998) of DOLE entitled “Guidelines Governing the
Temporary Suspension of Deployment of Filipino Domestic and Household Workers.” It claims
that such order is a discrimination against males and females. The Order does not apply to
all Filipino workers but only to domestic helpers and females with similar skills, and that it is in
violation of the right to travel, it also being an invalid exercise of the lawmaking power. Further,
PASEI invokes Sec 3 of Art 13 of the Constitution, providing for worker participation in policy
and decision-making processes affecting their rights and benefits as may be provided by law.
Thereafter the Solicitor General on behalf of DOLE submitting to the validity of the challenged
guidelines involving the police power of the State and informed the court that the respondent
have lifted the deployment ban in some states where there exists bilateral agreement with the
Philippines and existing mechanism providing for sufficient safeguards to ensure the welfare
and protection of the Filipino workers.
ISSUE:

Whether or not there has been a valid classification in the challenged Department Order
No. 1.

RULING:

SC in dismissing the petition ruled that there has been valid classification,
the Filipino female domestics working abroad were in a class by themselves, because of the
special risk to which their class was exposed. There is no question that Order No.1 applies only
to female contract workers but it does not thereby make an undue discrimination between
sexes. It is well settled hat equality before the law under the constitution does not import a
perfect identity of rights among all men and women. It admits of classification, provided that:

1. Such classification rests on substantial distinctions

2. That they are germane to the purpose of the law
3. They are not confined to existing conditions
4. They apply equally to al members of the same class

In the case at bar, the classifications made, rest on substantial distinctions. Dept. Order
No. 1 does not impair the right to travel. The consequence of the deployment ban has on the
right to travel does not impair the right, as the right to travel is subjects among other things, to
the requirements of “public safety” as may be provided by law. Deployment ban of female
domestic helper is a valid exercise of police power. Police power as been defined as the state
authority to enact legislation that may interfere with personal liberty or property in order to
promote general welfare. Neither is there merit in the contention that Department Order No. 1
constitutes an invalid exercise of legislative power as the labor code vest the DOLE with rule
making powers.

MANUEL BELARMINO V. EMPLOYEES COMPENSATION COMMISSION AND GSIS

G.R. No. 90204

FACTS:
The case at hand covers death claim benefits of a school teacher whose death is not work
related. Mrs. Oania Belarmino, a teacher of the DECS was assigned to teach at Buracan
Elementary School in Dimasalang, Masbate. Her husband was also a public school teacher. It is
noteworthy that Mrs. Belarmino has been serving as a public school teacher for 11 years. On
Jan. 14, 1982, Mrs. Belarmino (8 months pregnant) accidentally slipped and fell on the
classroom floor. Moments later, she felt abdominal pains and stomach cramps. For several days,
she suffered from this pain. Her co-teachers advised her to file a leave of absence but she
didn’t heed to their advice. On Jan. 25, 1982, she prematurely delivered a baby girl at home.
Despite of the delivery, the pain on her abdomen as still persistent. Her doctors told her that
she was suffering from Septicemia Post Partum due to infected lacerations of the vagina. She
was discharged from the hospital and recovered but after three (3) days, she eventually died
due to the sickness. On April 21, 1983, Mr. Belarmino filed for death benefits but the GSIS
denied his petition stating that the cause of death was not an occupational disease and neither
was there any showing that aforesaid ailment was contracted by reason of her employment. On
appeal to the Employees Compensation Commission, the said Commission upheld the GSIS
decision.
ISSUE:
WON the husband can claim death benefits for her deceased wife even if the cause of death
was not an occupational one.
HELD:
Yes. The Court ruled that the respondents decision constitutes a grave abuse of discretion.

Rule III, Section 1 of the Amended Rules on Employees' Compensation enumerates the grounds
for compensability of injury resulting in disability or death of an employee, as follows:
Sec. 1. Grounds — (a) For the injury and the resulting disability or death to be compensable,
the injury must be the result of an employment accident satisfying all of the following
conditions:
(1) The employee must have been injured at the place where his work requires him to be;
(2) The employee must have been performing his official functions; and
(3) If the injury is sustained elsewhere, the employee must have been executing an order
for the employer.
(b) For the sickness and the resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under Annex "A" of these Rules with the
conditions set therein satisfied; otherwise, proof must be shown that the risk of contracting the
disease is increased by the working conditions.
(c) Only injury or sickness that occurred on or after January 1, 1975 and the resulting
disability or death shall be compensable under these Rules.

The illness, septicemia post partum which resulted in the death of Oania Belarmino, is
admittedly not listed as an occupational disease in her particular line of work as a classroom
teacher. However, as pointed out in the petition, her death from that ailment is compensable
because an employment accident and the conditions of her employment contributed to its
development. The condition of the classroom floor caused Mrs. Belarmino to slip and fall and
suffer injury as a result. The fall precipitated the onset of recurrent abdominal pains which
culminated in the premature termination of her pregnancy with tragic consequences to her.
Mrs. Belarmino's fall was the primary injury that arose in the course of her employment as a
classroom teacher, hence, all the medical consequences flowing from it: her recurrent
abdominal pains, the premature delivery of her baby, her septicemia post partum and death,
are compensable.