LABOR LAW CASE DIGESTS
EMPLOYER EMPLOYEE RELATIONSHIP
1. Brotherhood Labor Unity Movement of the Phil. v. Zamora
Facts:
The petitioners are workers who have been employed at the San
Miguel Parola Glass Factory as “pahinantes” or “kargadors” for almost
seven years. They worked exclusively at the SMC plant, never having
been assigned to other companies or departments of San Miguel Corp,
even when the volume of work was at its minimum. Their work was
neither regular nor continuous, depending on the volume of bottles to
be loaded and unloaded, as well as the business activity of the
company. However, work exceeded the eight-hour day and
sometimes, necessitated work on Sundays and holidays. -for this, they
were neither paid overtime nor compensation.
Sometime in 1969, the workers organized and affiliated themselves
with Brotherhood Labor Unity Movement (BLUM). They wanted to be
paid to overtime and holiday pay. They pressed the SMC management
to hear their grievances. BLUM filed a notice of strike with the Bureau
of Labor Relations in connection with the dismissal of some of its
members. San Miguel refused to bargain with the union alleging that
the workers are not their employees but the employees of an
independent labor contracting firm, Guaranteed Labor Contractor.
The workers were then dismissed from their jobs and denied entrance
to the glass factory despite their regularly reporting for work. A
complaint was filed for illegal dismissal and unfair labor practices.
Issue:
Whether or not there was employer-employee (ER-EE)relationship
between the workers and San Miguel Corp.
Held:
YES. In determining if there is an existence of the (ER-EE)
relationship, the four-fold test was used by the Supreme Court. These
are:
· The selection and engagement of the employee
· Payment of wages
· Power of dismissal
· Control Test- the employer’s power to control the employee with
respect to the means and methods by which work is to be
accomplished
In the case, the records fail to show that San Miguel entered into mere
oral agreements of employment with the workers. Considering the
length of time that the petitioners have worked with the company, there
is justification to conclude that they were engaged to perform activities
necessary in the usual business or trade. Despite past shutdowns of
the glass plant, the workers promptly returned to their jobs. The term
of the petitioner’s employment appears indefinite and the continuity
and habituality of the petitioner’s work bolsters the claim of an
employee status.
As for the payment of the workers’ wages, the contention that the
independent contractors were paid a lump sum representing only the
salaries the workers where entitled to have no merit. The amount paid
by San Miguel to the contracting firm is no business expense or capital
outlay of the latter. What the contractor receives is a percentage from
the total earnings of all the workers plus an additional amount from the
earnings of each individual worker.
The power of dismissal by the employer was evident when the
petitioners had already been refused entry to the premises. It is
apparent that the closure of the warehouse was a ploy to get rid of the
petitioners, who were then agitating the company for reforms and
benefits.
The inter-office memoranda submitted in evidence prove the
company’s control over the workers. That San Miguel has the power
to recommend penalties or dismissal is the strongest indication of the
company’s right of control over the workers as direct employer.
*SC ordered San Miguel to reinstate the petitioners with 3 years
backwages.
2. ANGELINA FRANCISCO vs. NLRC
500 SCRA 690 (2006)
Facts: Petitoner was hired by Kasei Corporation during the
incorporation stage. She was designated as accountant and corporate
secretary and was assigned to handle all the accounting needs of the
company. She was also designated as Liason Officer to the City of
Manila to secure permits for the operation of the company.
In 1996, Petitioner was designated as Acting Manager. She was
assigned to handle recruitment of all employees and perform
management administration functions. In 2001, she was replaced by
Liza Fuentes as Manager. Kasei Corporation reduced her salary to
P2,500 per month which was until September. She asked for her
salary but was informed that she was no longer connected to the
company. She did not anymore report to work since she was not paid
for her salary. She filed an action for constructive dismissal with the
Labor Arbiter.
The Labor Arbiter found that the petitioner was illegally dismissed.
NLRC affirmed the decision while CA reversed it.
Issue: Whether or not there was an employer-employee relationship.
Ruling: The court held that in this jurisdiction, there has been no
uniform test to determine the existence of an employer-employee
relation. Generally, courts have relied on the so-called right of control
test where the person for whom the services are performed reserves
a right to control not only the end to be achieved but also the means
to be used in reaching such end. In addition to the standard of right-
of-control, the existing economic conditions prevailing between the
parties, like the inclusion of the employee in the payrolls, can help in
determining the existence of an employer-employee relationship.
The better approach would therefore be to adopt a two-tiered test
involving: (1) the putative employer’s power to control the employee
with respect to the means and methods by which the work is to be
accomplished; and (2) the underlying economic realities of the activity
or relationship.
In Sevilla v. Court of Appeals, the court observed the need to consider
the existing economic conditions prevailing between the parties, in
addition to the standard of right-of-control like the inclusion of the
employee in the payrolls, to give a clearer picture in determining the
existence of an employer-employee relationship based on an analysis
of the totality of economic circumstances of the worker.
Thus, the determination of the relationship between employer and
employee depends upon the circumstances of the whole economic
activity, such as: (1) the extent to which the services performed are an
integral part of the employer’s business; (2) the extent of the worker’s
investment in equipment and facilities; (3) the nature and degree of
control exercised by the employer; (4) the worker’s opportunity for
profit and loss; (5) the amount of initiative, skill, judgment or foresight
required for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the worker and
the employer; and (7) the degree of dependency of the worker upon
the employer for his continued employment in that line of business.
The proper standard of economic dependence is whether the worker
is dependent on the alleged employer for his continued employment in
that line of business.
By applying the control test, there is no doubt that petitioner is an
employee of Kasei Corporation because she was under the direct
control and supervision of Seiji Kamura, the corporation’s Technical
Consultant. It is therefore apparent that petitioner is economically
dependent on respondent corporation for her continued employment
in the latter’s line of business.
There can be no other conclusion that petitioner is an employee of
respondent Kasei Corporation. She was selected and engaged by the
company for compensation, and is economically dependent upon
respondent for her continued employment in that line of business. Her
main job function involved accounting and tax services rendered to
Respondent Corporation on a regular basis over an indefinite period
of engagement. Respondent Corporation hired and engaged petitioner
for compensation, with the power to dismiss her for cause. More
importantly, Respondent Corporation had the power to control
petitioner with the means and methods by which the work is to be
accomplished.
3. ABS-CBN BROADCASTING CORPORATION vs. MARLYN
NAZARENO et al. G.R. No. 164156 September 26, 2006
Facts: Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is
engaged in the broadcasting business and owns a network of
television and radio stations, whose operations revolve around the
broadcast, transmission, and relay of telecommunication signals. It
sells and deals in or otherwise utilizes the airtime it generates from its
radio and television operations. It has a franchise as a broadcasting
company, and was likewise issued a license and authority to operate
by the National Telecommunications Commission.
Petitioner employed respondents Nazareno, Gerzon, Deiparine, and
Lerasan as production assistants (PAs) on different dates. They were
assigned at the news and public affairs, for various radio programs in
the Cebu Broadcasting Station. On December 19, 1996, petitioner and
the ABS-CBN Rank-and-File Employees executed a Collective
Bargaining Agreement (CBA) to be effective during the period from
December 11, 1996 to December 11, 1999. However, since petitioner
refused to recognize PAs as part of the bargaining unit, respondents
were not included to the CBA.
On October 12, 2000, respondents filed a Complaint for Recognition
of Regular Employment Status, Underpayment of Overtime Pay,
Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay,
and 13th Month Pay with Damages against the petitioner before the
NLRC. The Labor Arbiter rendered judgment in favor of the
respondents, and declared that they were regular employees of
petitioner as such, they were awarded monetary benefits. NLRC
affirmed the decision of the Labor Arbiter. Petitioner filed a motion for
reconsideration but CA dismissed it.
Issue: Whether or not the respondents were considered regular
employees of ABS-CBN.
Ruling: The respondents are regular employees of ABS-CBN. It was
held that where a person has rendered at least one year of service,
regardless of the nature of the activity performed, or where the work is
continuous or intermittent, the employment is considered regular as
long as the activity exists, the reason being that a customary
appointment is not indispensable before one may be formally declared
as having attained regular status.
In Universal Robina Corporation v. Catapang, the Court states that the
primary standard, therefore, of determining regular employment is the
reasonable connection between the particular activity performed by
the employee in relation to the usual trade or business of the employer.
The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can be
determined by considering the nature of work performed and its
relation to the scheme of the particular business or trade in its entirety.
Also, if the employee has been performing the job for at least a year,
even if the performance is not continuous and merely intermittent, the
law deems repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity
to the business. Hence, the employment is considered regular, but
only with respect to such activity and while such activity exists.
Additionally, respondents cannot be considered as project or program
employees because no evidence was presented to show that the
duration and scope of the project were determined or specified at the
time of their engagement. In the case at bar, however, the employer-
employee relationship between petitioner and respondents has been
proven. In the selection and engagement of respondents, no peculiar
or unique skill, talent or celebrity status was required from them
because they were merely hired through petitioner’s personnel
department just like any ordinary employee. Respondents did not have
the power to bargain for huge talent fees, a circumstance negating
independent contractual relationship. Respondents are highly
dependent on the petitioner for continued work. The degree of control
and supervision exercised by petitioner over respondents through its
supervisors negates the allegation that respondents are independent
contractors.
The presumption is that when the work done is an integral part of the
regular business of the employer and when the worker, relative to the
employer, does not furnish an independent business or professional
service, such work is a regular employment of such employee and not
an independent contractor. As regular employees, respondents are
entitled to the benefits granted to all other regular employees of
petitioner under the CBA . Besides, only talent-artists were excluded
from the CBA and not production assistants who are regular
employees of the respondents. Moreover, under Article 1702 of the
New Civil Code: “In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living of
the laborer.”
4. LOPEZ vs. BODEGA CITY DIGEST
G.R. No. 155731 September 3, 2007
LOLITA LOPEZ, petitioner,
vs.
BODEGA CITY (Video-Disco Kitchen of the Philippines) and/or
ANDRES C. TORRES-YAP, respondents.
Respondent Bodega City (Bodega City) is a corporation duly
registered and existing under and by virtue of the laws of the Republic
of the Philippines, while respondent Andres C. Torres-Yap (Yap) is its
owner/ manager. Petitioner was the “lady keeper” of Bodega City
tasked with manning its ladies’ comfort room.
In a letter signed by Yap dated February 10, 1995, petitioner was made
to explain why the concessionaire agreement between her and
respondents should not be terminated or suspended in view of an
incident that happened on February 3, 1995, wherein petitioner was
seen to have acted in a hostile manner against a lady customer of
Bodega City who informed the management that she saw petitioner
sleeping while on duty.
Yap informed petitioner that because of the incident that happened
respondents had decided to terminate the concessionaire agreement
between them.
Petitioner filed a complaint for illegal dismissal against respondents
contending that she was dismissed from her employment without
cause and due process.
In their answer, respondents contended that no employer-employee
relationship ever existed between them and petitioner; that the latter’s
services rendered within the premises of Bodega City was by virtue of
a concessionaire agreement she entered into with respondents.
Labor Arbiter rendered judgment finding that petitioner was an
employee of respondents and that the latter illegally dismissed her.3
NLRC SET ASIDE AND VACATED LA Decision.
ISSUE:
Whether or not petitioner is an employee of respondents.
RULING:
In an illegal dismissal case, the onus probandi rests on the employer
to prove that its dismissal of an employee was for a valid cause.13
However, before a case for illegal dismissal can prosper, an employer-
employee relationship must first be established.14
In filing a complaint before the Labor Arbiter for illegal dismissal based
on the premise that she was an employee of respondent, it is
incumbent upon petitioner to prove the employee-employer
relationship by substantial evidence.15
The NLRC and the CA found that petitioner failed to discharge this
burden, and the Court finds no cogent reason to depart from their
findings.
The Court applies the four-fold test expounded in Abante v. Lamadrid
Bearing and Parts Corp.,16 to wit:
To ascertain the existence of an employer-employee relationship,
jurisprudence has invariably applied the four-fold test, namely: (1) the
manner of selection and engagement; (2) the payment of wages; (3)
the presence or absence of the power of dismissal; and (4) the
presence or absence of the power of control. Of these four, the last
one is the most important. The so-called “control test” is commonly
regarded as the most crucial and determinative indicator of the
presence or absence of an employer-employee relationship. Under the
control test, an employer-employee relationship exists where the
person for whom the services are performed reserves the right to
control not only the end achieved, but also the manner and means to
be used in reaching that end.17
To prove the element of payment of wages, petitioner presented a
petty cash voucher showing that she received an allowance for five (5)
days.18 The CA did not err when it held that a solitary petty cash
voucher did not prove that petitioner had been receiving salary from
respondents or that she had been respondents’ employee for 10 years.
Indeed, if petitioner was really an employee of respondents for that
length of time, she should have been able to present salary vouchers
or pay slips and not just a single petty cash voucher. The Court agrees
with respondents that petitioner could have easily shown other pieces
of evidence such as a contract of employment, SSS or Medicare
forms, or certificates of withholding tax on compensation income; or
she could have presented witnesses to prove her contention that she
was an employee of respondents. Petitioner failed to do so.
Anent the element of control, petitioner’s contention that she was an
employee of respondents because she was subject to their control
does not hold water.
Petitioner failed to cite a single instance to prove that she was subject
to the control of respondents insofar as the manner in which she
should perform her job as a “lady keeper” was concerned.
It is true that petitioner was required to follow rules and regulations
prescribing appropriate conduct while within the premises of Bodega
City. However, this was imposed upon petitioner as part of the terms
and conditions in the concessionaire agreement embodied in a 1992
letter of Yap addressed to petitioner.
Petitioner does not dispute the existence of the letter; neither does she
deny that respondents offered her the subject concessionaire
agreement. However, she contends that she could not have entered
into the said agreement with respondents because she did not sign the
document evidencing the same.
Petitioner is likewise estopped from denying the existence of the
subject concessionaire agreement. She should not, after enjoying the
benefits of the concessionaire agreement with respondents, be
allowed to later disown the same through her allegation that she was
an employee of the respondents when the said agreement was
terminated by reason of her violation of the terms and conditions
thereof.
The principle of estoppel in pais applies wherein — by one’s acts,
representations or admissions, or silence when one ought to speak out
— intentionally or through culpable negligence, induces another to
believe certain facts to exist and to rightfully rely and act on such belief,
so as to be prejudiced if the former is permitted to deny the existence
of those facts.24
Hence, going back to the element of control, the concessionaire
agreement merely stated that petitioner shall maintain the cleanliness
of the ladies’ comfort room and observe courtesy guidelines that would
help her obtain the results they wanted to achieve. There is nothing in
the agreement which specifies the methods by which petitioner should
achieve these results.
Lastly, the Court finds that the elements of selection and engagement
as well as the power of dismissal are not present in the instant case.
It has been established that there has been no employer-employee
relationship between respondents and petitioner. Their contractual
relationship was governed by the concessionaire agreement
embodied in the 1992 letter. Thus, petitioner was not dismissed by
respondents. Instead, as shown by the letter of Yap to her dated
February 15, 1995,37 their contractual relationship was terminated by
reason of respondents’ termination of the subject concessionaire
agreement, which was in accordance with the provisions of the
agreement in case of violation of its terms and conditions.
In fine, the CA did not err in dismissing the petition for certiorari filed
before it by petitioner.
WHEREFORE, the instant petition is DENIED. The assailed Decision
and Resolution of the Court of Appeals are AFFIRMED. Costs against
petitioner.
SO ORDERED.
5. VICTORY LINER INC. vs RACE Case Digest
[G.R. No. 164820 March 28, 2007]
VICTORY LINER, INC., Petitioner, vs . PABLO M. RACE,
Respondent.
FACTS
In June 1993, respondent was employed by the petitioner as a bus
driver. On the night of 24 August 1994, the bus he was driving was
bumped by a Dagupan-bound bus. As a consequence thereof,
respondent suffered a fractured left leg and was rushed to the Country
Medical and Trauma Center in Tarlac City where he was operated on
and confined from 24 August 1994 up to 10 October 1994. One month
after his release from the said hospital, the respondent was confined
again for further treatment of his fractured left leg at the Specialist
Group Hospital in Dagupan City. His confinement therein lasted a
month. Petitioner shouldered the doctor’s professional fee and the
operation, medication and hospital expenses of the respondent in the
aforestated hospitals.
In January 1998, the respondent, still limping heavily, went to the
petitioner’s office to report for work. He was, however, informed by the
petitioner that he was considered resigned from his job. Respondent
refused to accede and insisted on having a dialogue with the
petitioner’s officer named Yolanda Montes. During their meeting,
Montes told him that he was deemed to have resigned from his work
and to accept a consideration of P50,000.00. Respondent rejected the
explanation and offer. Thereafter, before Christmas of 1998, he again
conversed with Montes who reiterated to him that he was regarded as
resigned but raised the consideration therein to P100,000.00.
Respondent rebuffed the increased offer. On 30 June 1999,
respondent, through his counsel, sent a letter to the petitioner
demanding employment-related money claims.
There being no response from the petitioner, the respondent filed
before the Labor Arbiter on 1 September 1999 a complaint for (1)
unfair labor practice; (2) illegal dismissal; (3) underpayment of wages;
(4) nonpayment of overtime and holiday premium, service incentive
leave pay, vacation and sick leave benefits, 13th month pay; (5)
excessive deduction of withholding tax and SSS premium; and (6)
moral and exemplary damages and attorney’s fees.
In its Position Paper dated 27 March 2000, petitioner claimed that the
respondent’s cause of action against petitioner had already prescribed
because when the former instituted the aforesaid complaint on 1
September 1999, more than five years had already lapsed from the
accrual of his cause of action on 24 August 1994.
ISSUE
Whether or not the cause of action of respondent has already
prescribed.
HELD
The SC held that the cause of action of respondent has not prescribed.
In illegal dismissal cases, the employee concerned is given a period
of four years from the time of his dismissal within which to institute a
complaint. This is based on Article 1146 of the New Civil Code which
states that actions based upon an injury to the rights of the plaintiff
must be brought within four years.
The four-year prescriptive period shall commence to run only upon the
accrual of a cause of action of the worker. It is settled that in illegal
dismissal cases, the cause of action accrues from the time the
employment of the worker was unjustly terminated. Thus, the four-
year prescriptive period shall be counted and computed from the date
of the employee’s dismissal up to the date of the filing of complaint for
unlawful termination of employment.
In the case at bar, it is error to conclude that the employment of the
respondent was unjustly terminated on 10 November 1994 because
he was, at that time, still confined at the hospital for further treatment
of his fractured left leg. He must be considered as merely on sick leave
at such time. Likewise, the respondent cannot also be deemed as
illegally dismissed from work upon his release from the said hospital
in December 1994 up to December 1997 since the records show that
the respondent still reported for work to the petitioner and was granted
sick and disability leave by the petitioner during the same period.
The respondent must be considered as unjustly terminated from work
in January 1998 since this was the first time he was informed by the
petitioner that he was deemed resigned from his work. During that
same occasion, the petitioner, in fact, tried to convince the respondent
to accept an amount of P50,000.00 as a consolation for his dismissal
but the latter rejected it. Thus, it was only at this time that the
respondent’s cause of action accrued. Consequently, the
respondent’s filing of complaint for illegal dismissal on 1 September
1999 was well within the four-year prescriptive period.
It is also significant to note that from 10 November 1994 up to
December 1997, the petitioner never formally informed the respondent
of the fact of his dismissal either through a written notice or hearing.
Indeed, it cannot be gainfully said that respondent was unlawfully
dismissed on 10 November 1994 and that the cause of action accrued
on that date.
Decision of the CA partly affirmed.