LABOR LAW 2 Test to Determine the Existence of EE Rel

Test to Determine the Existence of EE Rel Hacienda Leddy/Ricardo Gamboa Jr v. Villegas GR 179654, 2014 PERALTA, J.
Legend Hotel v Realuyo GR 153511, 2012 BERSAMIN, J F:
F: 1. Paquito Villegas performed sugar farming job and other “odd jobs” since 1960
1. Hernani S. Realuyo (Joey R. Roa) was a pianist in the Tanglaw Restaurant of for P45/day and in coconut lumber for P34/day. He was allowed to erect a
Legend Hotel. He received a “talent fee” of P400/night which was raised to house in a small portion of the land of Hacienda Leddy (former name H. Teresa
P750. He worked from 7pm to 10pm for 3 to 6 times of performance per night. owned by Gamboa Sr.).
2. Because of cost cutting he was dismissed. Realuyo filed for Illegal Dismissal. 2. In 1993, Ricardo Gamboa Jr (Er) fired Villegas without any notice or reason.
3. LT of Er: no EE rel. Reasons: Villegas filed for illegal dismissal.
(1) service contract states no EE rel 3. LT of Er:
(2) “talent fee” is received not “salary.” (1) He was paid on piece-rate basis without supervision
(3) no power of control to means and methods. (2) His job is not usually necessary and desirable, hence not a regular Ee
4. LA: dismissed complaint. Reason see #3 (3) Villegas stopped working in 1992, so he was not dismissed.
5. NLRC: affirmed LA (4) He only worked in Feb 3 and Feb 11, 1993
6. CA: set aside LA and NLRC. Reason: 4. LA: there was illegal dismissal
(1) Power of Control—supervised and controlled what and when to perform. 5. NLRC: set aside LA
(2) he is regular Ee due to sheer length of service, he had been converted 6. CA: set aside LA; reinstated LA
from contractual to regular Ee. 7. SC: affirmed CA
7. SC: CA is affirmed. I: WON There is Er-Ee Relationship. YES
I: WON there is EE Rel. YES (in the case there are 3 issues (1) EE Rel (2) Validity
of Termination (3) procedural: Petition for certiorari) R:
R: 1. There is Er-Ee Relationship.
1. There is Er-Ee Relationship a. Petitioner did not categorically deny its existence. It only denied that
(1) the selection and Through service contract both parties entered Villegas was a “regular Ee” only as “casual Ee”.
engagement of the employee; 2. He was a “regular” Ee.
a. Basis: Art. 280
(2) the payment of wages; Talent fee is within the term “wage”
(1) engaged to perform activities which are necessary or desirable in
(3) the power of dismissal Evidenced by memorandum informing the usual business or trade of the employer; and
respondent of the discontinuance of his service (2) those casual employees who have rendered at least one year of
because of the present business or financial service, whether continuous or broken, with respect to the activity in
condition which he is employed.
(4) the power to control the employer need not actually supervise the b. In req. (1), the long period of doing “odd jobs” is that the same was either
employee’s conduct performance of duties by the employee, for it necessary or desirable to Hacienda Leddy
sufficed that the employer has the right to wield c. In req. (2), the petitioner’s length of service (>20YR) is an indication of
that power. the regularity.
2. SC’s answer to other LT of Er: 3. SC’s answer to other LT of Er:
a. “Service contract states no EE rel”: contract and nature of actual work are a. “Piece-rate basis”: It is Considered as wage (A. 97); Payment by the piece
both considered; Any stipulation in writing can be ignored when the is just a method of compensation and does not define the essence of the
employer utilizes the stipulation to deprive the employee of his security relations.
of tenure. b. “he stopped working”: No proof of abandonment of Ee shown by Er.
b. “Talent fee”: considered as wage; The term ‘wage’ is broadly defined in c. “He worked only for 2 days”: why erect a house if employed for 2 days
Article 97 of the LC as remuneration or earnings, capable of being only? It only means he was repeatedly hired
expressed in terms of money however designated NOTE: quantum of proof is substantial evidence which is understood as such
c. “valid retrenchment”: No, because of Er’s failure to substantiate claim of relevant evidence as a reasonable mind might accept as adequate to support a
financial losses. conclusion, even if other equally reasonable minds might conceivably opine
NOTE: Quantum of Evidence: substantial evidence, which is that amount of otherwise.
relevant evidence that a reasonable mind might accept as adequate to justify a
conclusion.
Who has jurisdiction to determine EE Rel.
Meteoro et al v Creative Creatures GR 171275 2009 NACHURA
F:
1. Creative is engaged in the business of production of set designs for tapings,
concerts, theatrical performances. Its primary client is ABSCBN. Petitioners
are artists, carpenters and welders.
2. Petitioners filed a complaint for non-payment of benefits of regular Ee in DOLE-
NCR, followed by a complaint for Illegal Dismissal in NLRC
3. LT of Er:
(1) No EE rel, hence jurisdiction is not in DOLE
(2) they were contractual Ee and/or independent talent workers.
4. DOLE-NCR: Creative must pay the petitioners
5. DOLE Reg Dir. Issued an Order to pay the complainants.
Reasons:
(1) there is EE rel
(2) DOLE-NCR has jurisdiction since it involves viol of Labor Standards Law
(3) this is an DOLE’s exercise of visitorial and enforcement powers (A. 128 LC)
6. DOLE secretary: affirmed DOLE Regional Director.
7. CA: assailed DOLE Sec for lack of jurisdiction; it should be in NLRC because
the respondent consistently denied EE Rel.
8. SC: Affirmed CA, DOLE has no jurisdiction
I: Who has the jurisdiction over money claims, DOLE or NLRC? NLRC in this case
because of A. 128 XPN Clause
R:
1. NLRC has jurisdiction because DOLE is divested of jurisdiction to decide the
case under the “exception clause” (A. 128b)
a. GR (A. 128a): DOLE Regional Director may decide money claims of Ees
regardless of the amount in the exercise of its visitorial and enforcement
powers.
b. XPN (A. 128b): DOLE Regional Director is divested jurisdiction over a labor
Standard case when the employer contests the findings of the labor
regulations officer and raises issues thereon; (laging dine-deny ni Er na
merong EE rel mula umpisa sa labor inspector hanggang sa CA).
Elements of A. 128b according to Bay Haven v Abuan:
(a) that the employer contests the findings of the labor regulations officer
and raises issues thereon;
(b) that in order to resolve such issues, there is a need to examine
evidentiary matters; and
(c) that such matters are not verifiable in the normal course of inspection.
Applying the elements of A. 128b, respondent (a) contested the findings of the
labor inspector during and after the inspection and raised issues (b) the resolution
of which necessitated the examination of evidentiary matters (c) not verifiable in
the normal course of inspection. Hence, the Regional Director was divested of
jurisdiction.
Reasonable Causal Connection
Indophil Textile Mills v Adviento 171212 2014 PERALTA
F:
1. Indophil is in the business of manufacturing thread for weaving. Respondent
is Engr. Salvador Adviento worked as the Civil Engineer to maintain its
facilities. He developed chronic poly sinusitis and allergic rhinitis. He was
advised by the doctor to avoid dust.
2. He filed for illegal dismissal in NLRC. He filed complaint in RTC for gross
negligence against Indophil to provide a safe work environment with a prayer
for damages.
Instances of Indophil’s gross negligence
a. Petitioner’s textile mills have excessive flying textile dust and waste in
its operations and no effort was exerted by petitioner to minimize or totally
eradicate it;
b. Petitioner failed to provide adequate and sufficient dust suction facilities;
c. Textile machines are cleaned with air compressors aggravating the dusty
workplace;
d. Petitioner has no physician specializing in respiratory-related illness
considering it is a textile company;
e. Petitioner has no device to detect the presence or density of dust which
is airborne;
f. Despite earnest plead of the Ees, the mgmt., failed to heed the same.
3. Indophil filed for motion to dismiss
LT: RTC has no jurisdiction but the LA because of A. 217a4 and there is EE rel.
4. RTC: indophil is guilty of gross negligence, a case of quasi-delict
5. CA: affirmed RTC
6. SC: affirmed CA and RTC
I: Who has the jurisdiction in this case of claim of damages, RTC or NLRC? RTC bec
there is no Reasonable Causal Connection between the claim (of damages in A.
217) and EE rel.
R: This is a case of Quasi-Delict, hence RTC has the jurisdiction.
1. Engr. Adviento’s claim is specifically grounded on gross negligence to provide
for a safe work environment—a case of quasi delict.
- The pertinent provision of Article 2176 of the Civil Code which governs quasi-
delict provides that:
Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no preexisting contractual relation between
the parties, is called quasi-delict.
- Er cannot use EE rel as the preexisting contract because the gross negligence
of not maintaining a hazardous work environment cannot be simply considered
as a breach of contract but already a violation of the Civil Code.
- Theirs is a simple action for damages for tortious acts allegedly committed
by the defendants. Such being the case, the governing statute is the Civil Code
and not the Labor Code.
2. A. 217a4 only applies when there is Reasonable Causal Connection bet the
claims provided for A. 217 and EE rel.
Reasonable Causal Connection Rule; If there is a reasonable causal connection
between the claim asserted and the employer-employee relations, then the case is
within the jurisdiction of the labor courts; and in the absence thereof, it is the
regular courts that have jurisdiction.
RCC is a test to determine who WON the LA has the jurisdiction over damages.
Effect When no EE Rel exists or when the main issue does not involve EE Rel Corporate Officer or Employee
Georg Grotjahn GMBH v Hon. Isnani (RTC) 109272 1994 PUNO, J Matling
F: F:
1. GMBH is a German Company of Motor vehicle. Respondent Romana R. 1.
Lanchinebre was a sales representative of petitioner from 1983 to mid- 2.
1992. 3.
2. Romana had a loan and cash advances with GMBH. She failed to fully
settle them.
3. She filed for illegal suspension/dismissal in NLRC. GMBH filed for collection
of money against her in RTC.
4. RTC (Hon. Isnani): dismissed the case. Reason:
(1) RTC has no jurisdiction but LA under A. 217 LC.
(2) Cash advances and loans were contracted during the existence of EE 4.
rel.
5. SC: set aside RTC
I: Who has jurisdiction, RTC or LA? RTC, because this is a simple collection of
money 5.
Does GMBJ has the capacity to sue? YES under Omnibus Investment Code 6.
R: 7.
1. This Civil Case is a simple collection of a sum of money brought by
petitioner, as creditor, against private respondent Romana Lanchinebre,
as debtor. The fact that they were employer and employee at the time of
the transaction does not negate the civil jurisdiction of the trial court. The
case does not involve adjudication of a labor dispute but recovery of a
sum of money based on our civil laws on obligation and contract. I: Whether the RTC or the LA has the jurisdiction. LA
2. Not every dispute between an employer and employee involves matters Determinative Issue: Whether the position generally created by by-laws is
that only labor arbiters and the NLRC can resolve in the exercise of their considered as corporate officer. NO, It must be specifically mentioned in by-laws.
adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and
the NLRC under Article 217 of the Labor Code is limited to disputes arising R:
from an employer-employee relationship which can only be resolved by 1.
reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.
2.
Industrial and Commercial Corp et al v Ricardo R Coros BERSAMIN, J
Ricardo Coros was the VP for Finance and Admin in Matling.
He filed for Illegal suspension and Illegal dismissal in the NLRC.
Matling moved to dismiss the case.
LT of Matling:
a. The case is an intra-corporate dispute because he was a member of
BOD and he was the VP for Finance and Admin; as such the
jurisdiction belongs to RTC
b. The By-Laws shows that the President has the power to create new
offices. The President made Coros VP and BOD member.
LT of Coros:
a. He is not a member of BOD. He did not own a share; He was not
elected.
b.
LA: dismissed the case. He was a corp officer and BOD member
NLRC: set aside LA. The case is not an Intra-corporate dispute
CA: affirmed NLRC, reasons:
a. A position is considered a Corporate officer if (1) listed in the by-laws,
(2) created and elected by BOD
b. The position of Coros was only created by the President, hence it is
not a corporate office but an ordinary office.
LA has jurisdiction.
a. A. 217 covers the LA and NLRC’s jurisdiction over employees.
b. Sec. 5.2 RA 8799 (Securities Regulation Code) transfers the
jurisdiction from SEC to RTC.
c. If Coros is a regular officer, RTC has jurisdiction; if corporate officer,
LA has jurisdiction.
Coros is a regular officer only.
a. Section 25 of Corp Code requires that Corporate Officers must be
provided in the By-Laws.
b. The creation of an office under a By-Law provision is not enough, the
position must be expressly mentioned in the By-Laws.
c. This is the correct interpretation, otherwise it can easily make the
BOD circumvent the constitutional guarantee of the security of tenure
of the employee by claiming that a certain position is a creation of
by-laws.

Intra-corporate dispute is a controversy which involves corporate officers. The

jurisdiction of which is in RTC, and the applicable law is SRC.
1. Who cannot unionize for purposes of collective bargaining. 2. GR: Employees of Coop cannot unionize (BENECO case)
Benguet Electric Cooperative v Hon. Ferrer-Caleja | GR 79025 | 1989 XPN: Employees of Coop who are not members-owners may unionize (Asiapro case)
RP represented by SSS v AsiaPro Cooperative | GR 172101 | 2007
F: F:
1. Beneco Worker’s Labor Union-Association of Democratic Labor Organizations (BWLU-ADLO) filed a 1. Asiapro, as a cooperative, is composed of owners-members. Under its by-laws, owners-members
petition for direct certification as the sole and exclusive bargaining representative of all the rank and are of two categories, to wit: (1) regular member, who is entitled to all the rights and privileges of
file employees of BENECO. membership; and (2) associate member, who has no right to vote.
a. Beneco Employees Labor Union (BELU) opposed the petition contending that BELU was certified a. The Coop engaged in a Service Contract with DOLE-Stanfilco Division. These owner-members
as the sole and exclusive bargaining representative of the said workers, that it filed against do not receive any compensation from the Coop. Instead they receive a share in service surplus
BENECO of unfair labor practice, that the pendency of these cases bars any representation generated by the services they rendered.
question. b. The owner-members requested the Coop to register them in SSS as self-employed and remit
b. Beneco filed a motion to dismiss claiming that it is a non-profit electric cooperative engaged in contributions shared equally by them and the Coop.
providing electric services, hence the workers are not eligible to for unions since they are joint c. The SSS considered the Service Contract of the Coop with Stanfilco as a Manpower Contractor,
owners of the coop. and as such the Coop must register in SSS as an Employer under compulsory coverage and pay
2. Med-Arbiter: allowed certification of BWLU but only to Beneco’s rank and file employees who are the unpaid contributions.
non-members and without any involvement in the actual ownership of the cooperative. 2. SSS (Republic) filed a complaint for compulsory coverage of the Coop. The Coop filed a motion to
3. Bureau of Labor Relations (BLR) director Calleja: affirmed med-arb, but allowed the members- dismiss the complaint.
employees to also vote. 3. LT of SSS: There is Er-Ee relationship, because the performance of the services of the owners-
4. The certification election was held, BELU won the election over BWLU. In the said election the members are under the full and sole control of the Coop.
employees who were members-consumers were allowed to vote. Beneco protested this. 4. LT of Coop: No Er-Ee relationship, hence SSC has no jurisdiction; owners-members are the
5. LT of BENECO cooperative itself; hence, it cannot be its own employer
a. A. 256 of LC says a valid certification election required “valid votes” 5. SSC, decision: dismissed the Coop’s motion to dismiss
at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving
the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in
6. CA, decision: set aside SSC
the unit. 7. SC, decision: set aside CA, reinstated SSC
b. The certification election held was null and void since members-employees of petitioner I:
cooperative who are not eligible to form and join a labor union for purposes of collective (1) WON there SSC has jurisdiction over the Coop. YES.
bargaining were allowed to vote. (2) DETERMINATIVE ISSUE: WON there is Er-Ee Relationship. YES.
6. LT of BELU R:
a. members of a cooperative who are also rank and file employees are eligible to form, assist or 1. SSC has jurisdiction over the Coop.
join a labor union. a. Any issue regarding compulsory coverage of the SSS is within the jurisdiction of SSC such as
b. to deny the members of the cooperative the right to form, assist or join a labor union of their this case.
own choice for purposes of collective bargaining would amount to a patent violation of their b. The issue on the existence of Er-Ee Relationship for the PURPOSE of determining the coverage
right to self-organization. of SSS is within the jurisdiction of SSC and not NLRC. Basis: A. 217
c. since membership in petitioner cooperative is only nominal (i.e. no actual participation in the 2. There is EE rel.
management of the coop nor exercise of managerial functions), the rank and file employees (1) the selection and cooperative which has the exclusive discretion in the selection and
who are members thereof should not be deprived of their right to self-organization. engagement of the employee; engagement of the owners-members as well as its team leaders who will
7. SC: Reversed BLR-Director. be assigned at Stanfilco
I: (2) the payment of wages; the weekly stipends or the so-called shares in the service surplus given
WON member-consumers who are employees of BENECO could form, assist or join a labor union. NO by the respondent cooperative to its owners-members were in reality
R: wages
1. Members-consumers who are also employees cannot unionize for purposes of collective bargaining. (3) the power of dismissal cooperative which has the power to investigate, discipline and remove
a. The right to collective bargaining is not available to an employee of a cooperative who at the the ownersmembers and its team leaders
same time is a member and co-owner thereof; Employees who are neither members nor co-
(4) the power to control the it is the respondent cooperative which has the sole control over the
owners of the cooperative are entitled to exercise the rights to self-organization, collective
employee’s conduct manner and means of performing the services under the Service
bargaining and negotiation.
Contracts with Stanfilco as well as the means and methods of work
b. The fact that the members-employees of the cooperative do not participate in its actual
management does not make them, eligible to form, assist or join a labor organization; It is the
fact of ownership of the cooperative, not involvement in management, which disqualifies a The management of the affairs of the respondent cooperative is vested in its Board of Directors and not
member from joining any labor organization within the cooperative.
in its owners-members as a whole. Therefore, it is completely logical that the respondent cooperative, as
c. They cannot invoke the right to collective bargaining for “certainly an owner cannot bargain
a juridical person represented by its Board of Directors, can enter into an employment with its owners-
with himself or his co-owners.” [Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, et
al., supra.] member
d. Members of cooperatives have rights and obligations different from those of stockholders of
ordinary corporations; Because of the special nature of cooperatives, members-employees
cannot form or join a labor union
3. Supervisory Employees 4. Security Guards
Atlas Lithographic v Usec. Laguesma and KAMPIL| gr 96566 | 1992 Philips Industrial Devt. V NLRC|gr 88957 |1992
F: F:
1. The supervisory, administrative personnel, production, accounting and confidential employees of 1. Philips Employees Organization-FFW (PEO-FFW), is the certified bargaining agent of all the rank and
Atlas joined Kaisahan ng Mangagawang Pilipino (KAMPIL), a national federation/union, and formed file employees of Philips. The supervisors, confidential employees, security guards, temporary
the “supervisors union,” a local union. employees and sales representatives were excluded from PEO. In its latest CBA the subject of WON
2. KAMPIL filed a petition for certification election to be the sole bargaining agent of the supervisory the said employees should be included in the coverage of PEO was submitted for arbitration.
employees. Atlas opposed. 2. LA: included service engineers and sales representatives in the bargaining unit; excluded all
3. Med-Arb: ordered the certification election. confidential employees.
4. DOLE Usec. Laguesma: affirmed Med-arb 3. NLRC: set aside LA; confidential employees are also included.
5. LT of Atlas: 4. LT of Philips
a. A. 245 of LC KAMPIL cannot represent supervisory employees because it also represent the a. The rationale for such exclusion is that these Ees hold positions which are highly fiduciary
rank-and-file employees' union. To allow the supervisors to affiliate with KAMPIL is to nature; to include them in PEO may subject the company to breaches in security and undue
circumvent the Principle of the Separation of Unions in A. 245. advantage to the union.
b. The intent of A. 245 is to prevent a single labor organization from representing different classes 5. LT of OSG: support decision of LA not NLRC
of employees with conflicting interests. a. Confidential employees cannot join PEO. They cannot even form a union of their own for, as
Art. 245. Ineligibility of managerial employees to join any labor organization: right of supervisory held in Golden Farms, Inc. vs. Ferrer-Calleja.
employees.—Managerial employees are not eligible to join, assist or form any labor organization. b. However, sales representatives and service engineers may form a union because they have
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-
dissimilar interests that those of the rank and file employees as held in In Re: Globe Machine
file employees but may join, assist or form separate labor organizations of their own.
and Stamping Company (Note: SC says this Globe doctrine is inapplicable).
6. LT of Usec: despite affiliation with a national federation, the local union does not lose its personality
6. SC: Set aside NLRC; Reinstated LA
which is separate, and distinct from the national federation.
I:
7. SC: reversed Med-Arb and DOLE
1. WON service engineers, sales representatives and confidential employees (division secretaries, staff of
I:
general management, personnel and industrial relations department, secretaries of audit, EDP and
WON a local union of supervisory employees may be allowed to affiliate with a national federation of
financial system) are qualified to be part of the existing bargaining unit. NO to confidential Ees (Golden
labor organizations of rank-and-file employees for collective bargaining purposes under A. 245 of LC.
Farms case); NO MORE to engrs and sales reps. (naabutan ng passage ng RA 6715)
NO.
2. SUBJECT ISSUE: WON security guards may form or join a union. YES.
R:
R:
1. Supervisors cannot co-join a labor org with a rank-and-file Ees because of conflict of interest
• Managerial employees and secretaries may not form or join a union because of conflict of interest
a. Managerial employee is one who is vested with powers or prerogatives to lay down and
(Bulletin Publishing v Sanchez, 1968). The same rationale is made explicitly applicable to
execute management policies. A Supervisory employee is one who effectively recommends
confidential Ees (Golden Farms v. Ferrer-Calleja). “Said Ees may act as spies of either party to a
managerial actions in the interest of the employer.
CBA.” Lol!
b. Managerial employees are ineligible to join any labor organization; Supervisory employees may
Service engineers and salesmen who are considered as “supervisory Ees” may form their own
join a separate labor organizations of their own, but shall not be eligible for membership in a
bargaining unit separate from rank-and-file employees, because RA 6715 already amended A. 245.
labor organization of the rank-and-file employees.
• As to the guards, they are allowed to form or join a union. The original A. 245 of LC prohibits
2. Historical background of the law:
security personnel to join a union, but it has been repealed by EO 111 (1986).
a. Classification of employees under the Industrial Peace Act of 1953:(1) managerial employees;
(2) supervisors; and (3) rank-and-file employees. Supervisors, who were considered employees
in relation to their employer could join a union but not a union of rank-and-file employees.
b. Under PD 442 employees were classified into managerial and rank-and-file employees. Neither
the category of supervisors nor their right to organize under the old statute were recognized. LC
removed from supervisors the right to unionize among themselves.
c. The Omnibus Rule implementing PD 442 removed supervisory union.
d. RA 6715 (1989) reclassified employees into the old categories: (1) managerial employees; (2)
supervisors; and (3) rank-and-file employees. Supervisors may form a union provided that they
shall not join or assist in the organization of rank-and-file employees because of conflict of
interest. E.g. of Conflict of Interest: Members of the supervisory union might refuse to carry out
disciplinary measures against their co-member rank-and-file employees.
 6. ULP of Employers
5. Test to determine ULP Hacienda Fatima et al v National Federation of Sugarcane Workers-Foodland General Trade |GR 149440|
De Leon et al v. NLRC|gr 112661 |2001 2003
F: F:
1. Fortune Tobacco Corporation (FTC) and Fortune Integrated Services, Inc. (FISI) entered into a 1. After the union was certified, the workers staged a strike because they were not given work for 1
contract for security services to provide guards. Then, FISI change its name to Magnum Integrated month. Then a Conciliation Meeting was conducted to conciliate the Er and the Ees. However, the Er
Services, Inc. (MISI). reneged/go back on its commitment. The workers filed for ID and ULP.
2. To enforce the guards’ rightful benefits under Labor Standards, petitioners formed a union which 2. Er claimed that the workers refused to work or were choosy in their work.
was later certified as bargaining agent of all the security guards. LT of Er:
3. FTC terminated it service contract with FISI/MISI which resulted the displacement of 582 security a. Workers are seasonal Ees only not regular under A. 280 LC
guards. The complainants filed a case for ID and ULP1 b. Management prerogative
4. LT of De Leon et al: 3. LA: no illegal dismissal
a. They were regular employees of FTC. They performed duties under the supervision of FTC. 4. NLRC: set aside LA; guilty of ULP
b. FTC’s veil of corporate fiction must be pierced; FISI/MISI is an instrumentality of FTC. 5. CA: upheld NLRC
5. LT of FTC: a. While the work of the Ees are seasonal in nature, they were considered to be merely on leave
a. No EE Rel between FTC and complainants during the off-season and were therefore still employed
b. MISI was a separate and distinct corp. Hence, no cause of action against FTC. b. As they enjoy the security of tenure, any infringement upon this right is tantamount to ID.
6. LT of FISI/MISI: 6. SC: Ees are regular; guilty of ULP
a. No ID and ULP because complainants were not dismissed but were merely placed on floating I:
status pending re-assignment to other posts. The temporary displacement was due to WON the Ees are regular. YES
pretermination of FTC of the contract service. WON the Er is guilty of ULP. YES
7. LA: Guilty of union busting and ID. R:
a. Single Eer Principle: FTC and FISI are liable and should be considered as single employer having 1. Ees are regular.
same stockholders, same business address, same owner (Lucio Tan). FISI’s client was only FTC. a. Two conditions to be a seasonal Ee:
b. There is EE Rel, since FISI was a mere alter ego of FTC. i. They perform work that are seasonal in nature.
8. NLRC: set aside LA. Doctrine of piercing the corporate veil is inapplicable ii. They are employed only for the duration of one season.
9. SC: LA is correct. The Ees repeatedly worked as sugarcane workers for several years—for more than one season.
I: WON FTC is guilty of Union Busting, ID and ULP. YES Hence, they are regular Ees.
WON there is EE rel. YES b. Read #5a
R: c. The action of Er is not a valid exercise of management prerogative because the sudden changes
1. Guilty of UB, ID and ULP in work assignments reeked of bad faith. These changes came when the Ees formed a union.
a. There is sufficient ground to conclude that respondents were guilty of interfering with the right Union members were deprived of their jobs. This action amounts to ID.
of petitioners to self-organization which constitutes unfair labor practice under Article 248 of the d. The burden is on the employer to prove that the termination was for a valid and authorized
Labor Code. cause.
b. After the security guards formed their labor union, FTC preterminated its service contract with 2. Er is guilty of ULP
MISI without any reason. This fact indicate FTC’s effort to remove the complainants from the a. Because of its interference in the right to self-organization.
company and abate the growth of the union to block the enforcement of Labor Standards law. Er’s refusal to bargain, to their acts of economic inducements resulting in the promotion of
c. Termination of petitioners’ services was without basis and therefore illegal. those who withdrew from the union, the use of armed guards to prevent the organizers to come
2. There is EE rel. in, and the dismissal of union officials and members, one cannot but conclude that respondents
a. Labor Arbiter correctly applied the doctrine of piercing the corporate veil. Effects: did not want a union in their hacienda—a clear interference in the right of the workers to self-
i. FTC (Principal) and MISI (Service Contractor) organization.
ii. All respondents liable for unfair labor practice and illegal termination of petitioners’
employment;

1
ID – illegal dismissal; ULP – Unfair Labor Practice
7. ULP of Labor Organizations
Salunga v CIR and SMB et al| GR L-22456 | 1967
F:
1. Salunga was an Ee of SMB. He became a member of union. The CBA in its closed-shop provision
requires employees not to resign from the UNION for any cause other than voluntary resignation of
non payment of union dues by said employee.
2. He tendered his resignation from the Union and submitted a copy in SMB. SMB informed him that
his resignation will result to his termination from employment. So, he tried to withdraw his
resignation.
3. However the union asked SMB to implement the CBA and dismiss Salunga from his employment.
Salunga was subsequently dismissed by the Company.
4. He charged the union and the SMB with ULP.
LT of Salunga:
a. The Union acted arbitrarily for refusing to allow him without just cause to continue his
membership.
5. LT of Union:
a. Salunga’s critical attitude is disloyalty to the Union
6. CIR: guilty of ULP
7. CIR en banc: no ULP; dismissed the case
8. SC: Company is not guilty of ULP; Union is guilty of ULP
I:
WON the SMB and Union are guilty of ULP. NO, only the Union is guilty
R:
1. Union is guilty of ULP because it arbitrarily refused to admit Salunga without just cause.
a. GR: the State may not compel voluntary association like Unions to admit any individual because
membership is a matter of privilege
XPN: State may compel if the Labor Union holds a monopoly in the supply of labor using a
closed-shop agreement.
b. A closed shop, a union shop, or maintenance of membership clauses cause the
administration of discipline by unions to be affected with the public interest. Closed shop clause
is allowed but cannot be used arbitrarily to exclude qualified applicants for membership.
2. SMB is not guilty of ULP because it was reluctant to discharge Salunga.
a. When company was not guilty of unfair labor practice.—In the case at bar, the company was
reluctant—if not unwilling—to discharge petitioner. When the union first informed it of
petitioner’s resignation and urged implementation of Section 3 of the bargaining contract, the
company advised petitioner of its provisions, thereby intimating that he had to withdraw his
resignation in order to keep his employment. Besides, the company notified the union that it
would not take any action on the case and would consider petitioner still a member of the
union. When the latter, thereafter, insisted on petitioner’s discharge, the company still
demurred and explained that it was not taking sides and that its stand was prompted merely by
“humane” considerations, springing from the belief that petitioner had resigned from the union
without realizing its effect upon his employment. And, as the union reiterated its demand, the
company notified petitioner that it had no other alternative but to terminate his employment,
and dismissed him from the service, although with “regret”. Under the circumstances, the
company was not “unfair” to petitioner.
b. Right of employee dismissed from service due to unfair labor practice.—Having been dismissed
from the service owing to an unfair labor practice on the part of the union, petitioner is entitled
to reinstatement as member of the union and to his former or substantially equivalent position
in the company, without prejudice to his seniority and/or rights and privileges, and with back
pay, which back pay shall be borne exclusively by the union. In the exercise of its sound
judgment and discretion, the lower court may, however, take such measures as it may deem
best, including the power to authorize the company to make deductions for petitioner’s benefit,
from the sums due to the union by way of check off or otherwise.
8. ULP of Labor Organizations
Manila Mandarin Employees Union v NLRC and Beloncio | gr 76989 | 1987
F:
1. Melba Beloncio worked in Manila Mandarin Hotel as the assistant head waitress of its coffee shop.
2. Her Union expelled her membership for alleged inimical acts to the Union’s interests. The Union
demanded the dismissal of her employment on the basis of Union Security Clause of the CBA. The
Hotel was compelled to put her on forced leave because the Union filed a notice of strike on the
issue of ULP.
3. After her forced leave, she filed a complaint for ULP and ID against the Union and the Hotel.
4. LT of Union:
a. LA, NLRC has no jurisdiction because the dispute is an intraunion dispute.
5. LT of Beloncio
6. LA: Union is guilty of ULP; dismissed the charge against the hotel
7. NLRC: modified LA; Union is guilty; Hotel must reinstate her
8. SC:
I:
1. WON the Hotel and the Union is guilty of ULP. NO, only the Union is guilty.
2. WON NLRC has jurisdiction. YES, dispute is not purely intraunion but involves the interpretation of
CBA whether there was illegal dismissal.
R:
1. The Hotel is not guilty of ULP. It put her on forced leave only upon the Union’s insistence.
2. Union is guilty of ULP.
a. Union security clauses cannot be used by union officials against an employer, much less their
own members, except with a high sense of responsibility and fairness.
b. CONDITION OF CLOSED-SHOP: A closed-shop agreement governed by law and by principles of
justice, fair play, and legality. Union security clauses cannot be used by union officials against
an employer, much less their own members, except with a high sense of responsibility, fairness,
prudence, and judiciousness.
c. MEANING OF CLOSED-SHOP: A closed-shop agreement is an agreement whereby an employer
binds himself to hire only members of the contracting union who must continue to remain
members in good standing to keep their jobs. It is "the most prized achievement of unionism."
It adds membership and compulsory dues. By holding out to loyal members a promise of
employment in the closed-shop, it welds group solidarity.
d. VALIDITY OF CLOSED-SHOPA closed-shop is a valid form of union security, and such a provision
in a collective bargaining agreement is not a restriction of the right of freedom of association
guaranteed by the Constitution.
9. When not ULP
General Santos Coca-cola Plant Free Workers Union-TUPAS v Coca-cola Gen San et al | gr 178647 |
2009
F:
1. In the late 1990s, Cocacola experienced decline in profitability due to Asian economic crisis. To curb
the negative effects on the company, it implemented three (3) waves of an Early Retirement
Program. Many Ees availed the early retirement program. As a result vacancies were created.
2. Meanwhile Cocacola sent an inter-office memo to stop hiring Ees. Because of the freeze hiring
directive, Cocacola-Gen San engaged the services of JLBP to provide for man power.
3. The Union filed a notice of strike against Cocacola Gen San for contracting-out services regularly
performed by union members (“union busting”). The dispute was submitted to NLRC for arbitration.
4. LT of the Union:
a. Violation of Art. 248c
“ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS.—It shall be unlawful for an employer
to commit any of the following unfair labor practices:
xxx
(c) To contract out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their right to self-organization;
5. NLRC: Cocacola Gen San was not guilty of ULP for contracting out jobs to JLBP.
a. The Union failed to prove by substantial evidence that the action of Coca-cola Gen San was
meant to curtail the right to self-organization of petitioner’s members—an essential element of
ULP.
6. CA: affirmed NLRC
a. The service contract was not a labor-only contracting. JLBP was an independent contractor
b. The decision of coca cola to contract out jobs was a valid exercise of management prerogative
to meet exigent circumstances
7. SC: affirmed CA
I:
WON Coca-cola Gen San is guilty of ULP. NO because there was no prevention of the exercise of the
right to self-organization
R:
1. Coca-cola Gen San did not commit prohibited acts are related to the workers’ right to self-
organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not
unfair labor practices
a. It was the Union that had the burden of adducing substantial evidence to support its allegations
of unfair labor practice,17 which burden it failed to discharge.
b. MEANING OF ULP: Unfair labor practice refers to “acts that violate the workers’ right to
organize”—the prohibited acts are related to the workers’ right to self-organization and to the
observance of a Collective Bargaining Agreement (CBA)
10. Suspension of CBA due to financial losses is not ULP
Manila Mining Corp Employees Associtation – Federation of Free Workers Chapter v Manila Mining Corp |
gr 178222-23 | 2010
F:
1. MMC is engaged in large scale mining. The law requires MMC to make a “tailings containment
facility” to store its waste material. Consequently, MMC constructed tailing dams.
2. However, when the DENR permit of MMC expired, the MMC failed to renew due to its in ability to
secure an Environmental Compliance Certificate for not securing the consent of the residents near
the dams. This resulted to the lay off of more than 400 Ees.
3. MMC called for the suspension of CBA with the Union until resumption of mining operation. The Ees-
complainants filed for __.
LT of Ees/Union
a. Constructive dismissal.
i. Lay-off was done in bad faith because MMC was not suffering from financial losses; hence
the lay off is invalid.
ii. MMC terminated all union officers and active members; no criteria were employed in
choosing which employees to lay-off.
iii. Lay-off was without any proper notice to DOLE as required by A. 283 LC
b. ULP for unilaterally suspension of the negotiation for a CBA. The lay-off was due to the
formation of the union.
4. LT of MMC:
a. Temporary lay-off was done in good faith and a valid management prerogative pending the
issuance of the permit to continuously operate.
b. Although temporary lay-off for more than 6 months amounts to constructive dismissal under A.
286, MMC is under the exception where the employer does not have any control over the
nature, extent and period of the temporary suspension of operations.
c. MMC claimed an aggregate loss of 880M pesos.
5. LA: Temporary shutdown and temporary lay off are valid
6. NLRC: modified LA. MMC must pay separation pay 1mo/yr because a temporary lay-off, which
exceeded more than six (6) months, had the effect of severance of the employer-employee
relationship.
7. CA: modified NLRC 1/2mo/yr
8. SC: affirmed CA
I:
WON MMC is guilty of ULP. NO, the temporary lay-off and suspension of operation are valid; no “refusal
to bargain.”
R:
1. No ULP
a. Unfair labor practice cannot be imputed to MMC since, as ruled by the Court of Appeals, the call
of MMC for a suspension of the CBA negotiations cannot be equated to “refusal to bargain.”
b. The Union failed to prove bad faith in MMC’s actuations. For a charge of unfair labor practice to
prosper, it must be shown that the employer was motivated by ill-will, bad faith or fraud, or
was oppressive to labor.
c. While the law makes it an obligation for the employer and the employees to bargain collectively
with each other, such compulsion does not include the commitment to precipitately accept or
agree to the proposals of the other
d. Suspension of Operations; Article 286 of the Labor Code allows the bona fide suspension of
operations for a period not exceeding six (6) months, and during the suspension, the
employees are not deemed terminated
CASE DOCTRINES:
GENERAL PRINCIPLES OF LABOR:
1. Legend Hotel v. Realuyo
- The test to determine the employer-employee relationship is the existence of (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.
- Any stipulation in writing can be ignored when the employer utilizes the stipulation a. to deprive the
employee of his security of tenure.
2. Hacienda Leddy v. Villegas
- An employee is deemed regular when (A. 280):
(1) he is engaged to perform activities which are necessary or desirable in the usual business or trade of
the employer; and
(2) those casual employees who have rendered at least one year of service, whether continuous or
broken, with respect to the activity in which he is employed.
- What determines whether a certain employment is regular or casual is A. 280 and not the contract,
will of employer, procedure of hiring or manner of paying salary.
3. Meteoro v. Creative Creatures (this case is deliberately omitted by Atty. Duguil)
- Who has jurisdiction to determine employer-employee relationship? LA/NLRC
- Who has jurisdiction over an employee’s money claim?
GR: DOLE because it is in the exercise of its visitorial and enforcement powers
XPN: NLRC if the employer contests the findings of the labor regulations officer who visited the
employer. (As such DOLE is divested of its jurisdiction)
4. Indophil Textile Mills v. Engr. Adviento
5. Georg Grotjahn GMBH v. Hon. Isnani
- Reasonable Causal Connection Rule - if there is a reasonable causal connection between the claim
asserted and the employer-employee relations, then the case is within the jurisdiction of the labor
courts; and in the absence thereof, it is the regular courts that have jurisdiction.
- e.g. of no RCC Rule:
(1) in the case of torts/quasi-delict (Indophil Case);
(2) in the case of simple collection of sum of money (Georg Grotjahn Case)
- Not every dispute between an employer and employee involves matters that only labor
arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The
jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to
disputes arising from an employer-employee relationship which can only be resolved by reference
to the Labor Code, other labor statutes, or their collective bargaining agreement.
6. Matling Industrial v. Coros
- Who has the jurisdiction over:
(1) Corporate officer? RTC because it involves an intra-corporate dispute
(2) Regular officer? LA/NLRC because it involves a labor dispute
- Who are the corporate officers? (Sec. 25 of Corporation Code)
(1) Corporate President (Note: VP is not included)
(2) Corporate Secretary
(3) Corporate Treasurer
(4) Those expressly mentioned in the By-Laws (must be enumerated in the By-Laws)
- What is the reason why express mention is necessary? To avoid circumvention of the constitutional
guarantee of the security of tenure
RIGHT TO SELF-ORGANIZATION
1. BENECO v. Ferrer-Caleja
2. Republic v. Asiapro
- May employees of a cooperative unionize?
GR: Employees of Coop who are members-owners may not unionize (BENECO case)
XPN: Employees of Coop who are not members-owners may unionize (Asiapro case)
3. Atlas Lithographic v. Usec. Laguesma (Atty. Duguil’s favorite)
- May a Supervisory Union and Rank-and-File Union join the same federation?
GR: Yes, both unions can validly affiliate with the same federation (Adamson Case)
XPN: No, when the members of the Supervisory Union directly supervise the members of the
Rank-and-File Union due to conflict of interest.
4. Philips Industrial v. NLRC
- May security guards unionize? Yes, the original A. 245 of LC prohibits security personnel to join a
union, but it has been repealed by EO 111 (1986).
- May confidential employees unionize?
GR: Yes
XPN: No, if they have access to labor relations information
5. De Leon v. NLRC
- Test to determine ULP: WON there is interference to the right of employees to self-organization
- Doctrine of Piercing the Veil of Corporate Entity – it means that the court will ignore a corporation’s
separate legal personality if such legal personality is used in bad faith or to shield fraud;
Effect of the doctrine: the courts will treat the corporation as a mere association of persons and
the liability will directly attach to them; or courts will treat the other corporation as a mere alter
ego of another corporation.
6. Hacienda Fatima v. National Federation of Sugarcane Workers
- ULP of Employers e.g.
(1) the employer-corp closed its operation and pre-terminated the security guards after they
unionized. (De Leon case)
(2) the employer refused to give work to sugarcane workers after their union was certified; the
employer’s refusal to bargain; employer’s acts of economic inducements resulting in the
promotion of those who withdrew from the union, the use of armed guards to prevent the
organizers to come in, and the dismissal of union officials and members, one cannot but
conclude that respondents did not want a union in their hacienda—a clear interference in the
right of the workers to self-organization. (Hacienda Fatima Case)
7. Salunga v. CIR and SMB
8. Manila Mandarin v. NLRC
- ULP of Labor Organization e.g.
(1) The Union acted arbitrarily in refusing to allow an employee to continue his union
membership without just cause thereby making the employee violate the closed-shop
agreement (Salunga case)
(2) The Union expelled the employer’s union membership for alleged inimical acts to the Union’s
interests, and forcing the employer-hotel by filing a notice of strike to put the employee on
leave (Manila Mandarin Case)
- Closed-shop agreement is governed by law and by principles of justice, fair play, and legality. Union
security clauses cannot be used by union officials against an employer, much less their own members,
except with a high sense of responsibility, fairness, prudence, and judiciousness.
9. Gen. San. Coca-Cola Plant Free Workers Union v. Coca-Cola Gen San
10. Manila Mining Corp Employees Assoc. v. Manila Mining Corp
- When there is no ULP:
 (1) the employer contracted out services with an independent contractor for additional workers
instead of union members without interference to the employees’ exercise of their right to self-
organization. Such contracting out of services is a valid exercise of management prerogative to
meet exigent circumstances. (GenSan Cocacola Case)
(2) Suspension of CBA due to financial losses (Manila Mining Corp Case)
(3) When the employer is reluctant, unwilling to discharge the employee, and only dismissed
the employee with “regret.” (Salunga Case)
(4) When the employer put her on forced leave only upon the Union’s insistence by filing a
notice of strike (Manila Mandarin Case).

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