DEPARTMENT OF FOREIGN AFFAIRS
VS. NATIONAL LABOR RELATIONS
COMMISSION
G.R. No. 113191, 18 September 1996
FACTS:
On 27 January 1993, private respondent
Magnayi filed an illegal dismissal case against
ADB. Two summonses were served, one sent
directly to the ADB and the other through the
Department of Foreign Affairs. ADB and the
DFA notified respondent Labor Arbiter that the
ADB, as well as its President and Officers,
were covered by an immunity from legal
process except for borrowings, guaranties or
the sale of securities pursuant to Article 50(1)
and Article 55 of the Agreement Establishing
the Asian Development Bank in relation to
Section 5 and Section 44 of the Agreement
Between The Bank And The Government Of
The Philippines Regarding The Bank's
Headquarters.
The Labor Arbiter took cognizance of the
complaint on the impression that the ADB had
waived its diplomatic immunity from suit and,
in time, rendered a decision in favor
Magnayi.
The ADB did not appeal the decision.
Instead, on 03 November 1993, the DFA
referred the matter to the NLRC; in its referral,
the DFA sought a "formal vacation of the void
judgment." When DFA failed to obtain a
favorable decision from the NLRC, it filed a
petition for certiorari.
ISSUES:
1. Whether or not ADB is immune from suit
2. Whether or not the DFA has the legal
standing to file the present petition
RULING:
1. Under the Charter and Headquarters
Agreement, the ADB enjoys immunity from
legal process of every form, except in the
specified cases of borrowing and guarantee
operations, as well as the purchase, sale and
underwriting of securities. The Bank’s
officers, on their part, enjoy immunity in
respect of all acts performed by them in
their official capacity. The Charter and the
Headquarters Agreement granting these
immunities and privileges are treaty
covenants and commitments voluntarily
assumed by the Philippine government, which
must be respected.
Being an international organization that has
been extended a diplomatic status, the ADB
is independent of the municipal law.
"One of the basic immunities of an
international organization is immunity from
local jurisdiction, i.e., that it is immune from
the legal writs and processes issued by the
tribunals of the country where it is found. The
obvious reason for this is that the subjection
of such an organization to the authority of the
local courts would afford a convenient medium
thru which the host government may interfere
in their operations or even influence or control
its policies and decisions of the organization;
besides, such subjection to local jurisdiction
would impair the capacity of such body to
discharge its responsibilities impartially on
behalf of its member-states."
2. Yes. The DFA's function includes, among its
other mandates, the determination of persons
and institutions covered by diplomatic
immunities, a determination which, when
challenged, entitles it to seek relief from the
court so as not to seriously impair the conduct
of the country's foreign relations. The DFA
must be allowed to plead its case whenever
necessary or advisable to enable it to help
keep the credibility of the Philippine
government before the international
community. When
international agreements are concluded, the
parties thereto are deemed to have likewise
accepted the responsibility of seeing to it that
their agreements are duly regarded. In our
country, this task falls principally on the DFA
as being the highest executive department
with the competence and authority to so act in
this aspect of the international arena. In a
jurisprudence, the Court has explained the
matter in good detail stating that:
"In Public International Law, when a state or
international agency wishes to plead
sovereign or diplomatic immunity in a foreign
court, it requests the Foreign Office of the
state where it is sued to convey to the court
that said defendant is entitled to immunity.
"In the Philippines, the practice is for the
foreign government or the international
organization to first secure an executive
endorsement of its claim of sovereign or
diplomatic immunity. But how the Philippine
Foreign Office conveys its endorsement to the
courts varies. In International Catholic
Migration Commission vs. Calleja, the
Secretary of Foreign Affairs just sent a letter
directly to the Secretary of Labor and
Employment, informing the latter that the
respondent-employer could not be sued
because it enjoyed diplomatic immunity.
"In some cases, the defense of sovereign
immunity was submitted directly to the local
courts by the respondents through their
private counsels. In cases where the foreign
states bypass the Foreign Office, the courts
can inquire into the facts and make their own
determination as to the nature of the acts and
transactions involved."
JUSMAG PHILS VS. NLRC
G.R. NO. 108813, Dec 15, 1994
FACTS:
Florento Sacramento (private respondent)
was one of the 74 security assistance support
personnel working at the Joint United States
Military Assistance Group to the Philippines
He had been with JUSMAG from 1969- 1992.
When dismissed, he held the position of
illustrator 2 and incumbent Pres. of JUSMAG
Phils. Filipino Civilian Employees Association,
a labor org. duly registered with DOLE. His
services were terminated allegedly due to the
abolition of his position. Sacramento filed a
complaint with DOLE on the ground that he
was illegally suspended and dismissed from
service by JUSMAG. He asked for
reinstatement. JUSMAG filed a Motion to
Dismiss invoking immunity from suit. The
Labor Arbiter in an Order, dismissed the
complaint for want of jurisdiction. Sacramento
appealed to the NLRC which held that the
petitioner had lost his right not to be sued
because (1) the principle of estoppel
JUSMAG failed to refute the existence of
employer- employee relationship (2) Jusmag
has waived its right to immunity from suit
when it hired the services to private
respondent. Hence, this petition.
ISSUE:
Whether or not JUSMAG has immunity from
suit.
RULING:
Yes.
When JUSMAG took the services of the
private respondent, it was performing a
governmental function in behalf of the United
States pursuant to the Military Assistance
Agreement between the Phils. and the US.
JUSMAG consists of Air, Naval and Army
group and its primary task was to advise and
assist the Phils. on air force, army and naval
matters. A suit against JUSMAG is one
against the United States government, and in
the absence of any waiver or consent of the
latter to the suit, the complaint against
JUSMAG cannot prosper. Immunity of State
from suitis one of these universally recognized
principles. In international law, "immunity" is
commonly understood as an exemption of the
state and its organs from the judicial
jurisdiction of another state. This is anchored
on the principle of the sovereign equality of
states under which one state cannot assert
jurisdiction over another in violation of the
maxim par in parem non habet imperium(an
equal has no power over an equal).As it
stands now, the application of the doctrine of
immunity from suit has been restricted to
sovereign or governmental activities and does
not extend to commercial, private and
proprietary acts
SEAFDEC V ACOSTA,
G.R. No.s 97468-70, Sept. 2, 1993
FACTS:
SEAFDEC-AQD is a department of an
international organization, the Southeast
Asian Fisheries Development Center,
organized through an agreement in 1967 by
the governments of Malaysia, Singapore,
Thailand, Vietnam, Indonesia and the
Philippines with Japan as the sponsoring
country.
Juvenal Lazaga was employed as a Research
Associate on a probationary basis by
SEAFDEC-AQD. Lacanilao in his capacity as
Chief of SEAFDEC-AQD sent a notice of
termination to Lazaga informing him that due
to the financial constraints being experienced
by the department, his services shall be
terminated. SEAFDEC-AQD's failure to pay
Lazaga his separation pay forced him to file a
case with the NLRC. The Labor Arbiter and
NLRC ruled in favor of Lazaga. Thus
SEAFDEC-AQD appealed, claiming that the
NLRC has no jurisdiction over the case since
it is immune from suit owing to its international
character and the complaint is in effect a suit
against the State which cannot be maintained
without its consent.
ISSUES:
1. Whether or not the NLRC have jurisdiction
over SEAFDEC-AQD
2. Whether or not the SEAFDEC-AQD
estopped for its failure to raise the issue of
jurisdiction at the first instance?
RULING:
1. SEAFDEC-AQD is an international agency
beyond the jurisdiction of public respondent
NLRC. Being an intergovernmental
organization, SEAFDEC including its
Departments (AQD), enjoys functional
independence and freedom from control of the
state in whose territory its office is located.
Permanent international commissions and
administrative bodies have been created by
the agreement of a considerable number of
States for a variety of international purposes,
economic or social and mainly non-political. In
so far as they are autonomous and beyond
the control of any one State, they have a
distinct juridical personality independent of the
municipal law of the State where they are
situated. As such, according to one leading
authority "they must be deemed to possess a
species of international personality of their
own."
One of the basic immunities of an
international organization is immunity from
local jurisdiction, i.e., that it is immune from
the legal writs and processes issued by the
tribunals of the country where it is found. The
obvious reason for this is that the subjection
of such an organization to the authority of the
local courts would afford a convenient medium
thru which the host government may interfere
in there operations or even influence or
control its policies and decisions of the
organization; besides, such subjection to local
jurisdiction would impair the capacity of such
body to discharge its responsibilities
impartially on behalf of its member-states.
2. Respondent Lazaga's invocation of
estoppel with respect to the issue of
jurisdiction is unavailing because estoppel
does not apply to confer jurisdiction to a
tribunal that has none over a cause of action.
Jurisdiction is conferred by law. Where there
is none, no agreement of the parties can
provide one. Settled is the rule that the
decision of a tribunal not vested with
appropriate jurisdiction is null and void.
U.S. VS. HON. RODRIGO,
G.R. No. 79470, February 26, 1990
FACTS:
Fabian Genove filed a complaint for damages
against petitioners Anthony Lamachia,
Wilfredo Belsa, Rose Crtalla and Peter
Orascion for his dismissal as a cook in the US
Air Force Recreation Center. Belsa, Cartalla
and Orascion testified that Genova poured
urine into the soup stock that was served to
customers. Lamachia suspended him and
referred the case to a board of arbitrators who
found Genove guilty and recommended his
dismissal. Genove then filed an MS complaint
in the RTC of Baguio against the individual
petitioners, who moved to dismiss the case in
the basis that Lamachia was immune from
suit as per acts done in his official capacity as
an officer of the US Air Force. The motion was
denied by the RTC, so the petitioners filed a
petition for Certiorari and prohibition with
preliminary injunction before the Supreme
Court.
ISSUE:
Whether or not the petitioners can use State
Immunity (Art. XVI, Sec. 3, 1987 Constitution)
as defense.
RULING:
The rule that a State may not be sued without
its consent is one of the generally accepted
principles of international law that were have
adopted as part of the law of our land. Even
without such affirmation, we would still be
bound by the generally accepted principles of
international law under the doctrine of
incorporation. All states are sovereign equals
and cannot assert jurisdiction over one
another. While the doctrine appears to prohibit
only suits against the state without its
consent, it is also applicable to complaints
filed against officials of the states for acts
allegedly performed by them in the discharge
of their duties. The rule is that if the judgment
against such officials will require the state
itself to perform an affirmative act to satisfy
the same, the suit must be regarded as
against the state although it has not been
formally impleaded. When the government
enters into a contract, it is deemed to have
descended to the level of the other contracting
party and divested of its sovereign immunity
from suit with its implied consent.
It bears stressing at this point that the
aforesaid principle do not confer on the USA a
blanket immunity for all acts done by it or its
agents in the Philippines. Neither may the
other petitioners claim that they are also
insulated from suit in this country merely
because they have acted as agents of the
United States in the discharge of their official
functions.
There is no question that the USA, like any
other state, will be deemed to have impliedly
waived its non-suability if it has entered into a
contract in its proprietary or private capacity
(commercial acts/jure gestionis). It is only
when the contract involves its sovereign or
governmental capacity (governmental
acts/jure imperii) that no such waiver may be
implied.
In the case at bar, the restaurant services
offered at the John Hay Air Station partake of
the nature of a business enterprise
undertaken by the US government in its
proprietary capacity, as they were operated for
profit, as a commercial and not a
governmental activity. Not even the US
government can claim such immunity because
by entering into the employment contract with
Genove in the discharge of its proprietary
functions, it impliedly divested itself of its
sovereign immunity from suit. But, the court
still dismissed the complaint against
petitioners on the ground that there was
nothing arbitrary about the proceedings in the
dismissal of Genove, as the petitioners acted
quite properly in terminating Genove’s
employment for his unbelievably nauseating
act.
EBRO III VS. NLRC,
G.R. No. 110187, Sept. 4, 1996
FACTS:
Private respondent International Catholic
Migration Commission is a non-profit agency
engaged in international humanitarian and
voluntary work. June 24, 1985, ICMC
employed petitioner Jose G. Ebro III to teach
"English as a Second Language and Cultural
Orientation Training Program" at the refugee-
processing center. The employment contract
provided in pertinent part that the monthly
salary for the first 6 months probationary
period is P3,155.00 inclusive of cost of living
allowance. Upon being made regular after
successful completion of the six (6) months
probationary period your monthly salary will
be adjusted to P3,445.00 inclusive of cost of
living allowance and if either party wishes to
terminate employment, a notice of two (2)
weeks should be given in writing to the party.
After six months, ICMC notified petitioner that
effective December 21, 1985, the latter's
services were terminated for his failure to
meet the requirements of classroom
performance up to the standards set in the
Guide for Instruction; regular attendance in
the mandated teacher training, and in the
schedule team meetings, one-on-one
conferences with the supervisor, etc.; and
compliance with ICMC and PRPC policies and
procedures.
On February 4, 1986, petitioner filed a
complaint for illegal dismissal, unfair labor
practice, underpayment of wages, accrued
leave pay, 14th month pay, damages,
attorney's fees, and expenses of litigation.
Petitioner alleged that there was no objective
evaluation of his performance to warrant his
dismissal and that he should have been
considered a regular employee from the start
because ICMC failed to acquaint him with the
standards under which he must qualify as
such. He prayed for reinstatement with
backwages, moral, and exemplary, and
nominal damages plus interest on the above
claims with attorney's fees.
After the parties had formally offered their
evidence, private respondents submitted their
memorandum on July 31, 1989 in which,
among other things, they invoked ICMC's
diplomatic immunity on the basis of the
Memorandum of Agreement signed on July
15, 1988 between the Philippines government
and ICMC.
The Labor Arbiter held that ICMC's legal
immunity under the Memorandum could not
be given retroactive effect since "[that would]
deprive complainant's property right without
due process and impair the obligation of
contract of employment." He also expressed
doubt on the ground that it was provided for
by agreement and not through an act of
Congress. Accordingly, the Labor Arbiter
ordered ICMC to reinstate petitioner as
regular teacher without loss of seniority rights
and to pay him one year backwages, other
benefits, and ten percent attorney's fees for a
total sum of P70,944.85.
Both parties appealed to the NLRC. On
August 13, 1990, petitioner moved to dismiss
private respondent's appeal because of the
latter's failure to post a cash/surety bond. In
its order of October 13, 1992, however, the
NLRC ordered the case dismissed on the
ground that, under the Memorandum of
Agreement between the Philippine
government and ICMC, the latter was immune
from suit.
ISSUE:
Whether or not the Memorandum of
Agreement executed on July 15, 1988 granted
ICMC immunity from suit
RULING:
Yes.
The grant of immunity from local jurisdiction to
ICMC is clearly necessitated by their
international character and respective
purposes. The objective is to avoid the danger
of partiality and interference by the host
country in their internal workings. The
exercise of jurisdiction by the Department of
Labor in these instances would defeat the
very purpose of immunity, which is to shield
the affairs of international organizations, in
accordance with international practice, from
political pressure or control by the host
country to the prejudice of member State of
the organization, and to ensure the
unhampered performance of their functions.
Art III §4 of the Convention on the Privileges
and Immunities of the Specialized Agencies of
the United Nations requires that the waiver of
the privilege must be express. There was no
such waiver of immunity in this case. Nor can
ICMC be estopped from claiming diplomatic
immunity since estoppel does not operate to
confer jurisdiction to a tribunal that has none
over a cause of action.
Finally, neither can it be said that recognition
of ICMC's immunity from suit deprives
petitioner of due process. As pointed out in
ICMC v. Calleja, petitioner is not exactly
without remedy for whatever violation of rights
it may have suffered for the following reason:
Section 31 of the Convention on the Privileges
and Immunities of the Specialized Agencies of
the United Nations provides that "each
specialized agency shall make provision for
appropriate modes of settlement of: (a)
disputes arising out of contracts or other
disputes of private character to which the
specialized agency is a party." Moreover,
pursuant to Article IV of the Memorandum of
Agreement between ICMC and the Philippine
Government, whenever there is any abuse of
privilege by ICMC, the Government is free to
withdraw the privileges and immunities
accorded.
International organization
G.R. No. 86773 February 14, 1992
SOUTHEAST ASIAN FISHERIES
DEVELOPMENT CENTER-
AQUACULTURE DEPARTMENT
(SEAFDEC-AQD), DR. FLOR
LACANILAO (CHIEF), RUFIL CUEVAS
(HEAD, ADMINISTRATIVE DIV.), BEN
DELOS REYES (FINANCE OFFICER),
petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and JUVENAL LAZAGA,
respondents.
NOCON, J.:
Facts: SEAFDEC-AQD is a department of an
international organization, the Southeast
Asian Fisheries Development Center,
organized through an agreement entered into
in Bangkok, Thailand on December 28, 1967
by the governments of Malaysia, Singapore,
Thailand, Vietnam, Indonesia and the
Philippines with Japan as the sponsoring
country (Article 1, Agreement Establishing the
SEAFDEC).
On April 20, 1975, private respondent Juvenal
Lazaga was employed as a Research
Associate an a probationary basis by the
SEAFDEC-AQD and was appointed Senior
External Affairs Officer on January 5, 1983
with a monthly basic salary of P8,000.00 and
a monthly allowance of P4,000.00. Thereafter,
he was appointed to the position of
Professional III and designated as Head of
External Affairs Office with the same pay and
benefits.
On May 8, 1986, petitioner Lacanilao in his
capacity as Chief of SEAFDEC-AQD sent a
notice of termination to private respondent
informing him that due to the financial
constraints being experienced by the
department, his services shall be terminated
at the close of office hours on May 15, 1986
and that he is entitled to separation benefits
equivalent to one (1) month of his basic salary
for every year of service plus other benefits
(Rollo, p. 153).
Upon petitioner SEAFDEC-AQD's failure to
pay private respondent his separation pay, the
latter filed on March 18, 1987 a complaint
against petitioners for non-payment of
separation benefits plus moral damages and
attorney's fees with the Arbitration Branch of
the NLRC (Annex "C" of Petition for
Certiorari).
Petitioners in their answer with counterclaim
alleged that the NLRC has no jurisdiction over
the case inasmuch as the SEAFDEC-AQD is
an international organization and that private
respondent must first secure clearances from
the proper departments for property or money
accountability before any claim for separation
pay will be paid, and which clearances had
not yet been obtained by the private
respondent.
Labor arbiter rendered a decision in favor of
the employee (Private Respondent) and
ordering the respondents to pay the
complainant full payment, separation pay and
post-employment benefits.
Said decision was affirmed by the Fifth
Division of the NLRC.
Petitioners instituted this petition for certiorari
alleging that the NLRC has no jurisdiction to
hear and decide respondent Lazaga's
complaint since SEAFDEC-AQD is immune
from suit owing to its international character
and the complaint is in effect a suit against the
State which cannot be maintained without its
consent.
Issue: WON NLRC has jurisdiction over the
case.
Ruling: No. Petitioner Southeast Asian
Fisheries Development Center-Aquaculture
Department (SEAFDEC-AQD) is an
international agency beyond the jurisdiction of
public respondent NLRC.
SEAFDEC-AQD was organized during the
Sixth Council Meeting of SEAFDEC on July 3-
7, 1973 in Kuala Lumpur, Malaysia as one of
the principal departments of SEAFDEC
(Annex "I", id.) to be established in Iloilo for
the promotion of research in aquaculture.
Paragraph 1, Article 6 of the Agreement
establishing SEAFDEC mandates:
1. The Council shall be the supreme organ of
the Center and all powers of the Center shall
be vested in the Council.
Being an intergovernmental organization,
SEAFDEC including its Departments (AQD),
enjoys functional independence and freedom
from control of the state in whose territory its
office is located.
As Senator Jovito R. Salonga and Former
Chief Justice Pedro L. Yap stated in their
book, Public International Law (p. 83, 1956
ed.):
Permanent international commissions and
administrative bodies have been created by
the agreement of a considerable number of
States for a variety of international purposes,
economic or social and mainly non-political.
Among the notable instances are the
International Labor Organization, the
International Institute of Agriculture, the
International Danube Commission. In so far
as they are autonomous and beyond the
control of any one State, they have a distinct Petitioners,
juridical personality independent of the vs.
municipal law of the State where they are JOCELYN M. GALERA, Respondent.
situated. As such, according to one leading
authority "they must be deemed to possess a x - - - - - - - - - - - - - - - - - - - - - - -x
species of international personality of their G.R. No. 169239
own." (Salonga and Yap, Public International
Law, 83 [1956 ed.]) JOCELYN M. GALERA, Petitioner,
vs.
The then Minister of Justice likewise opined WPP MARKETING COMMUNICATIONS,
that Philippine Courts have no jurisdiction
INC., JOHN STEEDMAN, MARK
over SEAFDEC-AQD in Opinion No. 139, WEBSTER, and NOMINADA LANSANG,
Series of 1984 —
Respondents.
4. One of the basic immunities of an DECISION
international organization is immunity from
local jurisdiction, i.e., that it is immune from CARPIO, Acting C.J.:
the legal writs and processes issued by the
Facts: Petitioner is Jocelyn Galera (GALERA),
tribunals of the country where it is found. ( See
an American citizen who was recruited from
Jenks, Id., pp. 37-44) The obvious reason for
the United States of America by private
this is that the subjection of such an
respondent John Steedman, Chairman-WPP
organization to the authority of the local courts
Worldwide and Chief Executive Officer of
would afford a convenient medium thru which
Mindshare, Co., a corporation based in Hong
the host government may interfere in there
Kong, China, to work in the Philippines for
operations or even influence or control its
private respondent WPP Marketing
policies and decisions of the organization;
Communications, Inc. (WPP), a corporation
besides, such subjection to local jurisdiction
registered and operating under the laws of
would impair the capacity of such body to
Philippines. Employment of GALERA with
discharge its responsibilities impartially on
private respondent WPP became effective on
behalf of its member-states. In the case at
September 1, 1999 solely on the instruction of
bar, for instance, the entertainment by the
the CEO and upon signing of the contract,
National Labor Relations Commission of Mr.
without any further action from the Board of
Madamba's reinstatement cases would
Directors of private respondent WPP. Four
amount to interference by the Philippine
months had passed when private respondent
Government in the management decisions of
WPP filed before the Bureau of Immigration
the SEARCA governing board; even worse, it
an application for petitioner GALERA to
could compromise the desired impartiality of
receive a working visa, wherein she was
the organization since it will have to suit its
designated as Vice President of WPP.
actuations to the requirements of Philippine
Petitioner alleged that she was constrained to
law, which may not necessarily coincide with
sign the application in order that she could
the interests of the other member-states. It is
remain in the Philippines and retain her
precisely to forestall these possibilities that in
employment.
cases where the extent of the immunity is
specified in the enabling instruments of
On December 14, 2000, petitioner GALERA
international organizations, jurisdictional
alleged she was verbally notified by private
immunity from the host country is invariably
respondent STEEDMAN that her services had
among the first accorded. (See Jenks, Id.;
been terminated from private respondent
See also Bowett, The Law of International
WPP. A termination letter followed the next
Institutions, pp. 284-1285).
day. Thus, a complaint for illegal dismissal
Corporate Officers (termination) and their was filed against WPP.
monetary claims
The LA held that WPP, Steedman, Webster,
G.R. No. 169207 March 25, and Lansang liable for illegal dismissal and
2010 damages. Arbiter Madriaga stated that Galera
was not only illegally dismissed but was also
WPP MARKETING COMMUNICATIONS,
not accorded due process. The NLRC
INC., JOHN STEEDMAN, MARK
reversed the LA decision. The NLRC stressed
WEBSTER, and NOMINADA LANSANG,
that Galera was WPPs Vice-President, and
therefore, a corporate officer at the time she
was removed by the Board of Directors. Such
being the case, the imperatives of law require
that we hold that the Arbiter below had no
jurisdiction over Galeras case as, again, she
was a corporate officer at the time of her
removal.
On appeal, the CA reversed the NLRC
decision. It ruled that a person could be
considered a "corporate officer" only if
appointed as such by a corporations Board of
Directors, or if pursuant to the power given
them by either the Articles of Incorporation or
the By-Laws.
Issue: WON Galera is considered as
corporate officer.
Ruling: No. Under Section 25 of the
Corporation Code, the corporate officers are
the president, secretary, treasurer and such
other officers as may be provided in the by-
laws.
An examination of WPPs by-laws resulted in a
finding that Galeras appointment as a
corporate officer (Vice-President with the
operational title of Managing Director of
Mindshare) during a special meeting of WPP's
Board of Directors is an appointment to a non-
existent corporate office. WPPs by-laws
provided for only one Vice-President. At the
time of Galeras appointment on 31 December
1999, WPP already had one Vice-President in
the person of Webster. Galera cannot be said
to be a director of WPP also because all five
directorship positions provided in the by-laws
are already occupied. Finally, WPP cannot
rely on its Amended By-Laws to support its
argument that Galera is a corporate officer.
The Amended By-Laws provided for more
than one Vice-President and for two additional
directors. Even though WPPs stockholders
voted for the amendment on 31 May 2000, the
SEC approved the amendments only on 16
February 2001. Galera was dismissed on 14
December 2000. WPP, Steedman, Webster,
and Lansang did not present any evidence
that Galeras dismissal took effect with the
action of WPP's Board of Directors.
The appellate court further justified that
Galera was an employee and not a corporate
officer by subjecting WPP and Galera’s
relationship to the four-fold test: (a) the
selection and engagement of the employee;
(b) the payment of wages; (c) the power of
dismissal; and (d) the employer’s power to
control the employee with respect to the
means and methods by which the work is to
be accomplished. The appellate court found:
x x x Sections 1 and 4 of the employment
contract mandate where and how often she is
to perform her work; sections 3, 5, 6 and 7
show that wages she receives are completely
controlled by x x x WPP; and sections 10 and
11 clearly state that she is subject to the
regular disciplinary procedures of x x x WPP.
Another indicator that she was a regular
employee and not a corporate officer is
Section 14 of the contract, which clearly
states that she is a permanent employee —
not a Vice-President or a member of the
Board of Directors.
Whether Galera is entitled to the
monetary award
Employment of GALERA with private
respondent WPP became effective on
September 1, 1999 solely on the instruction
of the CEO and upon signing of the contract,
without any further action from the Board of
Directors of private respondent WPP.
Four months had passed when private
respondent WPP filed before the Bureau
of Immigration an application for
petitioner GALERA to receive a working
visa, wherein she was designated as Vice
President of WPP. Petitioner alleged that she
was constrained to sign the application in
order that she could remain in the Philippines
and retain her employment.24
The law and the rules are consistent in stating
that the employment permit must be acquired
prior to employment. The Labor Code states:
"Any alien seeking admission to the
Philippines for employment purposes and any
domestic or foreign employer who desires to
engage an alien for employment in the
Philippines shall obtain an employment permit
from the Department of Labor."25 Section 4,
Rule XIV, Book 1 of the Implementing Rules
and Regulations provides:
Employment permit required for entry. — No
alien seeking employment, whether as a
resident or non-resident, may enter the
Philippines without first securing an
employment permit from the Ministry. If an
alien enters the country under a non-working
visa and wishes to be employed thereafter, he
may only be allowed to be employed upon
presentation of a duly approved employment
permit.
Galera cannot come to this Court with unclean
hands. To grant Galera’s prayer is to sanction
the violation of the Philippine labor laws
requiring aliens to secure work permits before
their employment. We hold that the status quo
must prevail in the present case and we leave
the parties where they are. This ruling,
however, does not bar Galera from seeking
relief from other jurisdictions.
WHEREFORE, we PARTIALLY GRANT the
petitions in G.R. Nos. 169207 and 169239.
We SET ASIDE the Decision of the Court of
Appeals.
G.R. No. 157802 October 13,
2010
MATLING INDUSTRIAL AND
COMMERCIAL CORPORATION,
RICHARD K. SPENCER, CATHERINE
SPENCER, AND ALEX MANCILLA,
Petitioners,
vs.
RICARDO R. COROS, Respondent.
DECISION
BERSAMIN, J.:
Facts: After his dismissal by Matling as its
Vice President for Finance and Administration,
the respondent filed on August 10, 2000 a
complaint for illegal suspension and illegal
dismissal against Matling and some of its
corporate officers (petitioners) in the NLRC,
Sub-Regional Arbitration Branch XII, Iligan
City.3
The petitioners moved to dismiss the
complaint,4 raising the ground, among others,
that the complaint pertained to the jurisdiction
of the Securities and Exchange Commission
(SEC) due to the controversy being intra-
corporate inasmuch as the respondent was a
member of Matling’s Board of Directors aside
from being its Vice-President for Finance and
Administration prior to his termination.
The respondent opposed the petitioners’
motion to dismiss,5 insisting that his status as
a member of Matling’s Board of Directors was
doubtful, considering that he had not been
formally elected as such; that he did not own a
single share of stock in Matling, considering
that he had been made to sign in blank an
undated indorsement of the certificate of stock
he had been given in 1992; that Matling had
taken back and retained the certificate of
stock in its custody; and that even assuming
that he had been a Director of Matling, he had
been removed as the Vice President for
Finance and Administration, not as a Director,
a fact that the notice of his termination dated
April 10, 2000 showed.
On October 16, 2000, the LA granted the
petitioners’ motion to dismiss,6 ruling that the
respondent was a corporate officer because
he was occupying the position of Vice
President for Finance and Administration and
at the same time was a Member of the Board
of Directors of Matling; and that, consequently,
his removal was a corporate act of Matling
and the controversy resulting from such
removal was under the jurisdiction of the SEC,
pursuant to Section 5, paragraph (c) of
Presidential Decree No. 902.
The respondent appealed to the NLRC and
the latter reversed the decision of the LA.
Ruling of the CA
The petitioners elevated the issue to the but
said petition was dismissed.
Issue: Whether the respondent was a
corporate officer of Matling or not.
Ruling: No.
Section 25 of the Corporation Code provides:
Section 25. Corporate officers, quorum.--
Immediately after their election, the directors
of a corporation must formally organize by the
election of a president, who shall be a
director, a treasurer who may or may not be a
director, a secretary who shall be a resident
and citizen of the Philippines, and such other
officers as may be provided for in the by-
laws. Any two (2) or more positions may be
held concurrently by the same person, except
that no one shall act as president and
secretary or as president and treasurer at the
same time.
The directors or trustees and officers to be
elected shall perform the duties enjoined on
them by law and the by-laws of the
corporation. Unless the articles of
incorporation or the by-laws provide for a
greater majority, a majority of the number of
directors or trustees as fixed in the articles of
incorporation shall constitute a quorum for the
transaction of corporate business, and every
decision of at least a majority of the directors
or trustees present at a meeting at which
there is a quorum shall be valid as a corporate
act, except for the election of officers which
shall require the vote of a majority of all the
members of the board.
Directors or trustees cannot attend or vote by
proxy at board meetings.
Conformably with Section 25, a position must
be expressly mentioned in the By-Laws in
order to be considered as a corporate office.
Thus, the creation of an office pursuant to or
under a By-Law enabling provision is not
enough to make a position a corporate office.
An "office" is created by the charter of the
corporation and the officer is elected by the
directors or stockholders. On the other hand,
an employee occupies no office and generally
is employed not by the action of the directors
or stockholders but by the managing officer of
the corporation who also determines the
compensation to be paid to such employee.
In this case, respondent was appointed vice
president for nationwide expansion by
Malonzo, petitioner’'s general manager, not by
the board of directors of petitioner. It was also
Malonzo who determined the compensation
package of respondent. Thus, respondent was
an employee, not a "corporate officer." The
CA was therefore correct in ruling that
jurisdiction over the case was properly with
the NLRC, not the SEC (now the RTC).
This interpretation is the correct application of
Section 25 of the Corporation Code, which
plainly states that the corporate officers are
the President, Secretary, Treasurer and such
other officers as may be provided for in the
By-Laws. Accordingly, the corporate officers in
the context of PD No. 902-A are exclusively
those who are given that character either by
the Corporation Code or by the corporation’s
By-Laws.
In order that the SEC (now the regular courts)
can take cognizance of a case, the
controversy must pertain to any of the
following relationships:
a) between the corporation, partnership or
association and the public;
b) between the corporation, partnership or
association and its stockholders, partners,
members or officers;
c) between the corporation, partnership or
association and the State as far as its
franchise, permit or license to operate is
concerned; and
d) among the stockholders, partners or
associates themselves.
The fact that the parties involved in the
controversy are all stockholders or that the
parties involved are the stockholders and the
corporation does not necessarily place the
dispute within the ambit of the jurisdiction of
SEC. The better policy to be followed in
determining jurisdiction over a case should be
to consider concurrent factors such as the
status or relationship of the parties or the
nature of the question that is the subject of
their controversy. In the absence of any one of
these factors, the SEC will not have
jurisdiction. Furthermore, it does not
necessarily follow that every conflict between
the corporation and its stockholders would
involve such corporate matters as only the
SEC can resolve in the exercise of its
adjudicatory or quasi-judicial powers.29
The criteria for distinguishing between
corporate officers who may be ousted from
office at will, on one hand, and ordinary
corporate employees who may only be
terminated for just cause, on the other hand,
do not depend on the nature of the services
performed, but on the manner of creation of
the office. In the respondent’s case, he was
supposedly at once an employee, a
stockholder, and a Director of Matling. The
circumstances surrounding his appointment to
office must be fully considered to determine
whether the dismissal constituted an intra-
corporate controversy or a labor termination
dispute.
We must also consider whether his status as
Director and stockholder had any relation at
all to his appointment and subsequent
dismissal as Vice President for Finance and
Administration. Obviously enough, the
respondent was not appointed as Vice
President for Finance and Administration
because of his being a stockholder or Director
of Matling. He had started working for Matling
on September 8, 1966, and had been
employed continuously for 33 years until his
termination on April 17, 2000, first as a
bookkeeper, and his climb in 1987 to his last
position as Vice President for Finance and
Administration had been gradual but steady.
Even though he might have become a
stockholder of Matling in 1992, his promotion
to the position of Vice President for Finance
and Administration in 1987 was by virtue of
the length of quality service he had rendered
as an employee of Matling. His subsequent
acquisition of the status of
Director/stockholder had no relation to his
promotion. Besides, his status of
Director/stockholder was unaffected by his
dismissal from employment as Vice President
for Finance and Administration.
G.R. No. 185567 October 20,
2010
ARSENIO Z. LOCSIN, Petitioner,
vs.
NISSAN LEASE PHILS. INC. and LUIS
BANSON, Respondents.
DECISION
BRION, J.:
Facts: On January 1, 1992, Locsin was
elected Executive Vice President and
Treasurer (EVP/Treasurer) of NCLPI. As
EVP/Treasurer, his duties and responsibilities
included: (1) the management of the finances
of the company; (2) carrying out the directions
of the President and/or the Board of Directors
regarding financial management; and (3) the
preparation of financial reports to advise the
officers and directors of the financial condition
of NCLPI.6 Locsin held this position for 13
years, having been re-elected every year
since 1992, until January 21, 2005, when he
was nominated and elected Chairman of
NCLPI’s Board of Directors.7
On August 5, 2005, a little over seven (7)
months after his election as Chairman of the
Board, the NCLPI Board held a special
meeting at the Manila Polo Club. One of the
items of the agenda was the election of a new
set of officers. Unfortunately, Locsin was
neither re-elected Chairman nor reinstated to
his previous position as EVP/Treasurer.8
Aggrieved, on June 19, 2007, Locsin filed a
complaint for illegal dismissal with prayer for
reinstatement, payment of backwages,
damages and attorney’s fees before the Labor
Arbiter against NCLPI and Banson, who was
then President of NCLPI.9
The Compulsory Arbitration Proceedings
before the Labor Arbiter.
On July 11, 2007, instead of filing their
position paper, NCLPI and Banson filed a
Motion to Dismiss,10 on the ground that the
Labor Arbiter did not have jurisdiction over the
case since the issue of Locsin’s removal as
EVP/Treasurer involves an intra-corporate
dispute.
On March 10, 2008, Labor Arbiter Concepcion
issued an Order holding that her office
acquired "jurisdiction to arbitrate and/or
decide the instant complaint finding extant in
the case an employer-employee
relationship."11
NCLPI, on June 3, 2008, elevated the case to
the CA through a Petition for Certiorari under
Rule 65 of the Rules of Court. 12 NCLPI raised
the issue on whether the Labor Arbiter
committed grave abuse of discretion by
denying the Motion to Dismiss and holding
that her office had jurisdiction over the
dispute.
The CA Decision - Locsin was a corporate
officer; the issue of his removal as
EVP/Treasurer is an intra-corporate dispute
under the RTC’s jurisdiction.
On August 28, 2008,13 the CA reversed and
set aside the Labor Arbiter’s Order denying
the Motion to Dismiss and ruled that Locsin
was a corporate officer.
Issue: Whether Locsin’s position as Executive
Vice-President/Treasurer makes him a
corporate officer thereby excluding him from
the coverage of the Labor Code?
Ruling: Yes. CA correctly ruled that no
employer-employee relationship exists
between Locsin and Nissan.
Locsin was undeniably Chairman and
President, and was elected to these positions
by the Nissan board pursuant to its By-laws. 39
As such, he was a corporate officer, not an
employee. The CA reached this conclusion by
relying on the submitted facts and on
Presidential Decree 902-A, which defines
corporate officers as "those officers of a
corporation who are given that character
either by the Corporation Code or by the
corporation’s by-laws." Likewise, Section 25 of
Batas Pambansa Blg. 69, or the Corporation
Code of the Philippines (Corporation Code)
provides that corporate officers are the
president, secretary, treasurer and such other
officers as may be provided for in the by-laws.
Even as Executive Vice-President/Treasurer,
Locsin already acted as a corporate officer
because the position of Executive Vice-
President/Treasurer is provided for in Nissan’s
By-Laws. Article IV, Section 4 of these By-
Laws specifically provides for this position.
In this case, Locsin was elected by the NCLPI
Board, in accordance with the Amended By-
Laws of the corporation. The following factual
determination by the CA is elucidating:
More important, private respondent failed to
state any such "circumstance" by which the
petitioner corporation "engaged his services"
as corporate officer that would make him an
employee. In the first place, the Vice-
President/Treasurer was elected on an annual
basis as provided in the By-Laws, and no
duties and responsibilities were stated by
private respondent which he discharged while
occupying said position other than those
specifically set forth in the By-Laws or
required of him by the Board of Directors. The
unrebutted fact remains that private
respondent held the position of Executive
Vice-President/Treasurer of petitioner
corporation, a position provided for in the
latter’s by-laws, by virtue of election by the
Board of Directors, and has functioned as
such Executive Vice-President/Treasurer
pursuant to the provisions of the said By-
Laws. Private respondent knew very well that
he was simply not re-elected to the said
position during the August 5, 2005 board
meeting, but he had objected to the election of
a new set of officers held at the time upon the
advice of his lawyer that he cannot be
"terminated" or replaced as Executive Vice-
President/Treasurer as he had attained
tenurial security.42
We fully agree with this factual determination
which we find to be sufficiently supported by
evidence. We likewise rule, based on law and
established jurisprudence, that Locsin, at the
time of his severance from NCLPI, was the
latter’s corporate officer.
The Question of Jurisdiction
Given Locsin’s status as a corporate officer,
the RTC, not the Labor Arbiter or the NLRC,
has jurisdiction to hear the legality of the
termination of his relationship with Nissan. As
we also held in Okol, a corporate officer’s
dismissal from service is an intra-corporate
dispute.
G.R. No. 168757 January 19,
2011
RENATO REAL, Petitioner,
vs.
SANGU PHILIPPINES, INC. and/ or
KIICHI ABE, Respondents.
DECISION
DEL CASTILLO, J.:
Facts: Petitioner Renato Real was the
Manager of respondent corporation Sangu
Philippines, Inc., a corporation engaged in the
business of providing manpower for general
services, like janitors, janitresses and other
maintenance personnel, to various clients. In
2001, petitioner, together with 29 others who
were either janitors, janitresses, leadmen and
maintenance men, all employed by
respondent corporation, filed their respective
Complaints2 for illegal dismissal against the
latter and respondent Kiichi Abe, the
corporation’s Vice-President and General
Manager. These complaints were later on
consolidated.
With regard to petitioner, he was removed
from his position as Manager through Board
Resolution 2001-033 adopted by respondent
corporation’s Board of Directors. Petitioner
complained that he was neither notified of the
Board Meeting during which said board
resolution was passed nor formally charged
with any infraction. He just received from
respondents a letter4 dated March 26, 2001
stating that he has been terminated from
service effective March 25, 2001 for the
following reasons: (1) continuous absences at
his post at Ogino Philippines Inc. for several
months which was detrimental to the
corporation’s operation; (2) loss of trust and
confidence; and, (3) to cut down operational
expenses to reduce further losses being
experienced by respondent corporation.
Rulings of the Labor Arbiter and the
National Labor Relations Commission
The Labor Arbiter rendered a decision in favor
of the petitioner and his co-complainants
(employees).
Respondents thus appealed to the National
Labor Relations Commission (NLRC) and
raised therein as one of the issues the lack of
jurisdiction of the Labor Arbiter over
petitioner’s complaint. Respondents claimed
that petitioner is both a stockholder and a
corporate officer of respondent corporation,
hence, his action against respondents is an
intra-corporate controversy over which the
Labor Arbiter has no jurisdiction.
The NLRC found such contention of
respondents to be meritorious. Aside from
petitioner’s own admission in the pleadings
that he is a stockholder and at the same time
occupying a managerial position.
Ruling of the Court of Appeals .
In the assailed Decision10 dated June 28,
2005, the CA sided with respondents and
affirmed the NLRC’s finding that aside from
being a stockholder of respondent
corporation, petitioner is also a corporate
officer thereof and consequently, his complaint
is an intra-corporate controversy over which
the labor arbiter has no jurisdiction.
Issue: From the foregoing and as earlier
mentioned, the core issue to be resolved in
this case is whether petitioner’s complaint for
illegal dismissal constitutes an intra-corporate
controversy and thus, beyond the jurisdiction
of the Labor Arbiter.
Ruling: No intra-corporate relationship
between the parties.
"‘Corporate officers’ in the context of
Presidential Decree No. 902-A are those
officers of the corporation who are given that
character by the Corporation Code or by the
corporation’s by-laws. There are three specific
officers whom a corporation must have under
Section 25 of the Corporation Code. These
are the president, secretary and the treasurer.
The number of officers is not limited to these
three. A corporation may have such other
officers as may be provided for by its by-laws
like, but not limited to, the vice-president,
cashier, auditor or general manager. The
number of corporate officers is thus limited by
law and by the corporation’s by-laws."22
Respondents claim that petitioner was
appointed Manager by virtue of Section 1,
Article IV of respondent corporation’s By-Laws
which provides:
ARTICLE IV
OFFICER
Section 1. Election/Appointment – and that same does not satisfy the
Immediately after their election, the Board of
Directors shall formally organize by electing
the President, Vice-President, the Secretary at
said meeting.
The Board, may from time to time,
appoint such other officers as it may
determine to be necessary or proper . Any
two (2) or more positions may be held
concurrently by the same person, except that
no one shall act as President and Treasurer or
Secretary at the same time.
We have however examined the records of
this case and we find nothing to prove that
petitioner’s appointment was made pursuant
to the above-quoted provision of respondent
corporation’s By-Laws. No copy of board
resolution appointing petitioner as Manager or
any other document showing that he was
appointed to said position by action of the
board was submitted by respondents. What
we found instead were mere allegations of
respondents in their various pleadings24 that
petitioner was appointed as Manager of
respondent corporation and nothing more.
"The Court has stressed time and again that
allegations must be proven by sufficient
evidence because mere allegation is definitely
not evidence."25
As earlier stated, complainant-appellee
Renato Real was hired as the manager of
respondent-appellant Sangu. As such, his
position was reposed with full trust and
confidence. x x x
While respondents repeatedly claim that
petitioner was appointed as Manager pursuant
to the corporation’s By-Laws, the above-
quoted inconsistencies in their allegations as
to how petitioner was placed in said position,
coupled by the fact that they failed to produce
any documentary evidence to prove that
petitioner was appointed thereto by action or
with approval of the board, only leads this
Court to believe otherwise. It has been
consistently held that "[a]n ‘office’ is created
by the charter of the corporation and the
officer is elected (or appointed) by the
directors or stockholders."27 Clearly here,
respondents failed to prove that petitioner was
appointed by the board of directors. Thus, we
cannot subscribe to their claim that petitioner
is a corporate officer. Having said this, we find
that there is no intra-corporate relationship
between the parties insofar as petitioner’s
complaint for illegal dismissal is concerned
relationship test.
G.R. No. 201298 February 5,
2014
RAUL C. COSARE, Petitioner, vs.
BROADCOM ASIA, INC. and DANTE
AREVALO, Respondents.
FACTS:
Petitioner was hired by respondent as a
salesman. He was eventually promoted to
Assistant Vice President for Sales and Head
of the Technical Coordination, with a monthly
salary and average commissions of
₱18,000.00 and ₱37,000.00, respectively.
Alex F. Abiog was appointed as Broadcom’s
Vice President for Sales and thus, became
Cosare’s immediate superior. Sometime,
Cosare sent a confidential Memo to Arevalo to
inform him of the following anomalies which
were allegedly being committed by Abiog
against the company:
1. Late sa work maaga umaalis,
2. Advice clients sa competitiors
bumili,
3. Under the table dealings,
4. Puro reklamo sya about sa salary.
Sabi ni Cosare kay Arevalo: di nya intention
palitan si Abiog, gusto nya lang isumbong kasi
bad daw.
Arevalo failed to act on Cosare’s accusations.
Cosare was instead called for a meeting
wherein he was asked to tender his
resignation in exchange of financial
assistance (300K). Cosare refused.
Arevalo charged Cosare of serious
misconduct and willful breach of trust:
1. Persuading a costumer to buy from
competitors.
2. Abandoning company vehicle.
3. Failure to submit sales reports and
tardiness.
4. Failure to record any sales for the
past immediate 12 months.
He was given 48 hrs to explain. Till then he
was suspended.
Cosare was barred from entering the
company premises and was told to wait
outside for further instructions but no
instructions were given. Pumunta sya sa
barangay at nagpa blotter.
Cosare attempted to give a memo to the
company to deny the allegations pero ayaw
tanggapin yung memo dahil tapos na daw
yung 48 hrs.
Cosare filed a complaint that he was
constructively dismissed and illegally
suspended. Respondents denied Cosare’s
allegations, valid daw (Same reasons sa 2 nd
enumeration)
Labor Arbiter: dismissed Cosare’s complaint.
NLRC: reversed LA decision. ordered to pay
backwages, and separation pay, as well as
damages, in the total amount of
₱1,915,458.33.
CA: respondents during the pendency of the
CA appeal, they raised a new argument, i.e.,
the case involved an intra-corporate
controversy which was within the jurisdiction
of the RTC, not the LA. The case involved a
complaint against a corporation filed by a
stockholder, who, at the same time, was a
corporate officer.
CA: granted Appeal. Lack of Jurisdiction
finding it unnecessary to resolve the main
issues. Hence, this petition.
ISSUES:
WON the case instituted by Cosare was an
intra-corporate dispute that was within the
original jurisdiction of the RTC, and not of the
LAs; and
WON Cosare was constructively and illegally
dismissed from employment by the
respondents.
HELD:
First Issue: It’s a No.
An intra-corporate controversy, which falls
within the jurisdiction of regular courts, has
been regarded in its broad sense to pertain to
disputes that involve any of the following
relationships:
1. between the corporation,
partnership or association and the
public;
2. between the corporation,
partnership or association and the
state in so far as its franchise,
permit or license to operate is
concerned;
3. between the corporation,
partnership or association and its
stockholders, partners, members or
officers; and
4. among the stockholders, partners or
associates, themselves.
Settled jurisprudence, however, qualifies that
when the dispute involves a charge of illegal
dismissal, the action may fall under the
jurisdiction of the LAs upon whose jurisdiction,
as a rule, falls termination disputes and claims
for damages arising from employer-employee
relations as provided in Article 217 of the
Labor Code. Consistent with this
jurisprudence, the mere fact that Cosare was
a stockholder and an officer of Broadcom at
the time the subject controversy developed
failed to necessarily make the case an intra-
corporate dispute.
In Matling Industrial and Commercial
Corporation v. Coros,the Court distinguished
between a "regular employee" and a
"corporate officer" for purposes of establishing
the true nature of a dispute or complaint for
illegal dismissal and determining which body
has jurisdiction over it. Succinctly, it was
explained that "[t]he determination of whether
the dismissed officer was a regular employee
or corporate officer unravels the conundrum"
of whether a complaint for illegal dismissal is
cognizable by the LA or by the RTC. "In case
of the regular employee, the LA has
jurisdiction; otherwise, the RTC exercises the
legal authority to adjudicate.
Applying the foregoing to the present case,
the LA had the original jurisdiction over the
complaint for illegal dismissal because
Cosare, although an officer of Broadcom for
being its AVP for Sales, was not a "corporate
officer" as the term is defined by law.
Second Issue: Yes.
Constructive dismissal occurs when there is
cessation of work because continued
employment is rendered impossible,
unreasonable, or unlikely as when there is a
demotion in rank or diminution in pay or when
a clear discrimination, insensibility, or disdain
by an employer becomes unbearable to the
employee leaving the latter with no other
option but to quit.
The Court emphasized in King of Kings
Transport, Inc. v. Mamac 553 Phil. 108 the
standards to be observed by employers in
complying with the service of notices prior to
termination:
The first written notice to be served on the
employees should contain the specific causes
or grounds for termination against them, and a
directive that the employees are given the
opportunity to submit their written explanation
within a reasonable period. "Reasonable
opportunity" under the Omnibus Rules means
every kind of assistance that management
must accord to the employees to enable them
to prepare adequately for their defense. This
should be construed as a period of at least
five (5) calendar days from receipt of the
notice to give the employees an opportunity to
study the accusation against them, consult a
union official or lawyer, gather data and
evidence, and decide on the defenses they
will raise against the complaint. Moreover, in
order to enable the employees to intelligently
prepare their explanation and defenses, the
notice should contain a detailed narration of
the facts and circumstances that will serve as
basis for the charge against the employees. A
general description of the charge will not
suffice. Lastly, the notice should specifically
mention which company rules, if any, are
violated and/or which among the grounds
under Art. 282 is being charged against the
employees.
In sum, the respondents were already
resolute on a severance of their working
relationship with Cosare, notwithstanding the
facts which could have been established by
his explanations and the respondents full
investigation on the matter. In addition to this,
the fact that no further investigation and final
disposition appeared to have been made by
the respondents on Cosares case only
negated the claim that they actually intended
to first look into the matter before making a
final determination as to the guilt or innocence
of their employee. This also manifested from
the fact that even before Cosare was required
to present his side on the charges of serious
misconduct and willful breach of trust, he was
summoned to Arevalos office and was asked
to tender his immediate resignation in
exchange for financial assistance.
The charge of abandonment was inconsistent
with this imposed suspension. "Abandonment
is the deliberate and unjustified refusal of an
employee to resume his employment. To
constitute abandonment of work, two
elements must concur: (1) the employee must
have failed to report for work or must have
been absent without valid or justifiable reason;
and (2) there must have been a clear intention
on the part of the employee to sever the
employer-employee relationship manifested
by some overt act."Cosares failure to report to
work beginning April 1, 2009 was neither
voluntary nor indicative of an intention to
sever his employment with Broadcom. It was
illogical to be requiring him to report for work,
and imputing fault when he failed to do so
after he was specifically denied access to all
of the company's assets. Hence, the Court
held Petitioner was constructively dismissed
by respondent.
Court reiterated that an illegally or
constructively dismissed employee is entitled
to: (1) either reinstatement, if viable, or
separation pay, if reinstatement is no longer
viable; and (2) backwages. The award of
exemplary damages was also justified given
the NLRC's finding that the respondents acted
in bad faith and in a wanton, oppressive and
malevolent manner when they dismissed
Cosare. It is also by reason of such bad faith
that Arevalo was correctly declared solidarily
liable for the monetary awards.
G.R. No. 141093 February 20, 2001
PRUDENTIAL BANK and TRUST
COMPANY, petitioner, vs. CLARITA T.
REYES, respondent.
FACTS:
Before being dismissed, Reyes was the
Assistant Vice President in the foreign
department of Prudential Bank tasked with the
duties, among others, to collect checks drawn
against overseas banks payable in foreign
currency and to ensure the collection of
foreign bills or checks purchased, including
the signing of transmittal letters covering the
same.
The auditors of the Bank discovered that two
checks, No.011728-7232-146, in the amount
of US$109,650.00, and No. 011730-7232-146,
in the amount of US$115,000.00, received by
the Bank on April 6, 1989, drawn ,by the
Sanford Trading against Hongkong and
Shanghai Banking Corporation, Jurong
Branch, Singapore, in favor of Filipinas Tyrom,
were not sent out for collection to Hongkong
Shanghai Banking Corporation on the alleged
order of the complainant until the said checks
became stale.
The Bank created a committee to investigate
the findings of the auditors involving the two
checks which were not collected and became
stale.
After a review of the Committee's findings, the
Board of Directors of the Bank resolved not to
re-elect complainant any longer to the position
of assistant president pursuant to the Bank's
By-laws.
On July 19, 1991, complainant was informed
of her termination of employment from the
Bank by Senior Vice President Benedicto L.
Santos on the ground of loss of trust and
confidence, the same being acts of serious
misconduct in the performance of your duties
resulting in monetary loss to the Bank.
In her position paper, complainant alleged that
the real reason for her dismissal was her filing
of the criminal cases against the bank
president, the vice president and the auditors
of the Bank, such filing not being a valid
ground for her dismissal.
LA: Dismissal was without legal basis and
ordered to pay Reyes her back wages and her
reinstatement.
NLRC: Reversed. Dismissal valid.
CA: Reversed NLRC decision for lack of merit.
Dismissal not Valid.
ISSUE:
WON the NLRC has jurisdiction over cases
involving the removal from office of corporate
officers or cases involving intra-corporate
controversies.
WON the Dismissal was valid.
HELD:
FIRST ISSUE: It’s a Yes.
An intra-corporate controversy, which falls
within the jurisdiction of regular courts, has
been regarded in its broad sense to pertain to
disputes that involve any of the following
relationships:
1. between the corporation,
partnership or association and the
public;
2. between the corporation,
partnership or association and the
state in so far as its franchise,
permit or license to operate is
concerned;
 3. between the corporation,
partnership or association and its
stockholders, partners, members or
officers; and
4. among the stockholders, partners or
associates, themselves.
petitioner contends that complainant is a
corporate officer, an elective position under
the corporate by-laws and her non-election is
an intra-corporate controversy cognizable by
the SEC invoking lengthily a number of this
Court's decisions.
HOWEVER, Petitioner Bank can no longer
raise the issue of jurisdiction under the
principle of estoppel. The Bank participated in
the proceedings from start to finish. It filed its
position paper with the Labor Arbiter. When
the decision of the Labor Arbiter was adverse
to it, the Bank appealed to the NLRC. When
the NLRC decided in its favor, the bank said
nothing about jurisdiction. Even before the
Court of Appeals, it never questioned the
proceedings on the ground of lack of
jurisdiction. It was only when the Court of
Appeals ruled in favor of private respondent
did it raise the issue of jurisdiction. The Bank
actively participated in the proceedings before
the Labor Arbiter, the NLRC and the Court of
Appeals. While it is true that jurisdiction over
the subject matter of a case may be raised at
any time of the proceedings, this rule
presupposes that laches or estoppel has not
supervened.
SECOND ISSUE: It’s a No.
The dismissal of private respondent on the
ground of loss of trust and confidence was
without basis.
Respondent Bank heavily relied on the
testimony and affidavit of Remittance Clerk
Joven' in trying to establish loss of confidence.
However, Joven's allegation that petitioner
instructed her to hold the subject two dollar
checks amounting to $224,650.00 falls short
of the requisite proof to warrant petitioner's
dismissal.
The non-release of the dollar checks was
reported to top management sometime on 15
November 1989 when complainant,
accompanied by Supervisor Dante Castor and
Analiza Castillo, reported the matter to Vice
President Santos. And yet, it was only on 08
March 1991, after a lapse of sixteen (16)
months from the time the non-release of the
checks was reported to the Vice President,
that complainant was issued a memorandum
directing her to submit an explanation. And it
took the bank another four (4) months before
it dismissed complainant.
The delayed action taken by respondent
against complainant lends credence to the
assertion of the latter that her dismissal was a
mere retaliation to the criminal complaints she
filed against the bank's top officials.
It clearly appears from the foregoing that the
complainant herein has no knowledge of,
much less participation in, the non-release of
the dollar checks under discussion. Ms. Joven
is solely responsible for the same. Incidentally,
she was not even reprimanded by the bank.
G.R. No. 164888 December 6,
2006
RURAL BANK OF CORON (PALAWAN),
INC., EMPIRE COLD STORAGE AND
DEVELOPMENT CORPORATION,
CITIZENS DEVELOPMENT
INCOPRORATED, CARIDAD B. GARCIA,
SANDRA G. ESCAT, LORNA GARCIA,
and OLGA G. ESCAT, petitioners, vs.
ANNALISA CORTES, respondent.
FACTS:
Virgilio Garcia, "founder" of petitioner
corporations, hired the then still single
Annalisa Cortes (respondent) as clerk of the
Rural Bank of Coron.
After Virgilio died, his son Victor took over the
management of the corporations. Anita Cortes
(Anita), the wife of Victor Garcia, was also
involved in the management of the
corporations. Respondent later married Anita’s
brother Eduardo Cortes.
Anita soon assumed the position of Vice
President of petitioner Citizens Development
Incorporated (CDI) and practically controlled
the financial operations of almost all of the
other corporations in the course of which she
allowed some of her relatives and in-laws,
including respondent, to hold several key
sensitive positions thereat.
Respondent became the Financial Assistant,
Personnel Officer and Corporate Secretary of
The Rural Bank of Coron, Personnel Officer of
CDI, and also Personnel Officer and
Disbursing Officer of The Empire Cold
Storage Development Corporation (ECSDC).
She simultaneously received salaries from
these corporations.
On examination of the financial books of the
corporations by petitioner Sandra Garcia
Escat, a daughter of Virgilio Garcia who was
previously residing in Spain, she found out
that respondent was involved in several
anomalies, drawing petitioners to terminate
respondent’s services on November 23, 1998
in petitioner corporations.
Respondent’s counsel thus demanded the
payment of respondent’s unpaid salary,
separation pay equivalent to 12 months
salary, 13th month pay and other benefits.
Petitioner did not pay prompting the
respondent to file a case for illegal dismissal
and non-payment of salaries.
Petitioners moved for the dismissal of the
complaint on the ground of lack of jurisdiction,
contending that the case was an intra-
corporate controversy involving the removal of
a corporate officer, respondent being the
Corporate Secretary of the Rural Bank of
Coron, Inc., hence, cognizable by the
Securities and Exchange Commission (SEC)
pursuant to Section 5 of PD 902-A.
LA: aside from her being Corporate Secretary
of Rural Bank of Coron, Cortes was likewise
appointed as Financial Assistant & Personnel
Officer. A Financial Assistant & Personnel
Officer is not a Corporate Officer of the
petitioners’ corporation, thus, pursuant to
Article 217 of the Labor Code, as amended,
the instant case falls within the ambit of
original and exclusive jurisdiction of this
Office. Ruled in favor of Cortes.
NLRC: petitioners timely filed the appeal, held
that the same was not accompanied by an
appeal bond, a mandatory requirement under
Article 223 of the Labor Code and Section 6,
Rule VI of the NLRC New Rules of Procedure.
CA: Denied the Appeal.
Hence, this petition.
ISSUE:
WON the NLRC has Jurisdiction over the case
notwithstanding it involves an intra-corporate
controversy.
HELD: It’s a Yes.
The appellate court did not thus err in
dismissing the petition before it. And contrary
to petitioners’ assertion, the appellate court
dismissed its petition not "on a mere
technicality." For the non-posting of an appeal
bond within the reglementary period divests
the NLRC of its jurisdiction to entertain the
appeal.
It bears emphasis that all that is required to
perfect the appeal is the posting of a bond to
ensure that the award is eventually paid
should the appeal be dismissed. Petitioners
should thus have posted a bond, even if it
were only partial, but they did not. No
relaxation of the Rule may thus be
considered.
In the case at bar, petitioner did not post a full
or partial appeal bond within the prescribed
period, thus, no appeal was perfected from
the decision of the Labor Arbiter. For this
reason, the decision sought to be appealed to
the NLRC had become final and executory
and therefore immutable. Clearly then, the
NLRC has no authority to entertain the
appeal, much less to reverse the decision of
the Labor Arbiter.
Section 5 of PD 902-A has been amended by
the enactment of Republic Act No. 8799, the
Securities Regulation Code, in 2000. Section
5.2 of RA 8799 provides:
The [SEC]’s jurisdiction over all cases
enumerated under Section 5 of Presidential
Decree No. 902-A is hereby transferred to the
Courts of general jurisdiction or the
appropriate Regional Trial Court: Provided
that the Supreme Court in the exercise of its
authority may designate the Regional Trial
Court branches that shall exercise jurisdiction
over these cases. The [SEC] shall retain
jurisdiction over pending cases involving intra-
corporate disputes submitted for final
resolution which should be resolved within
one (1) year from the enactment of this Code.
The [SEC] shall retain jurisdiction over
pending suspension of
payments/rehabilitation cases filed as of 30
June 2000 until finally disposed.
G.R. No. 61594 September 28, 1990
PAKISTAN INTERNATIONAL AIRLINES
CORPORATION, petitioner, vs HON.
BLAS F. OPLE, in his capacity as
Minister of Labor; HON. VICENTE
LEOGARDO, JR., in his capacity as
Deputy Minister; ETHELYNNE B.
FARRALES and MARIA MOONYEEN
MAMASIG, respondents.
FACTS:
On 2 December 1978, petitioner Pakistan
International Airlines Corporation ("PIA"), a
foreign corporation licensed to do business in
the Philippines, executed in Manila 2 separate
contracts of employment, one with private
respondent Ethelynne B. Farrales and the
other with private respondent Ma. M.C.
Mamasig, provided:
Sec 5. DURATION OF EMPLOYMENT AND
PENALTY
This agreement is for a period of three (3)
years, but can be extended by the mutual
consent of the parties.
Sec 6. TERMINATION
Notwithstanding anything to contrary as
herein provided, PIA reserves the right to
terminate this agreement at any time by giving
the EMPLOYEE notice in writing in advance
one month before the intended termination or
in lieu thereof, by paying the EMPLOYEE
wages equivalent to one month's salary.
Sec 10. APPLICABLE LAW:
This agreement shall be construed and
governed under and by the laws of Pakistan,
and only the Courts of Karachi, Pakistan shall
have the jurisdiction to consider any matter
arising out of or under this agreement.
Roughly one (1) year and four (4) months
prior to the expiration of the contracts of
employment, PIA sent separate letters to
private respondents advising both that their
services as flight stewardesses would be
terminated. PIA claimed that both were
habitual absentees, were in the habit of
bringing in from abroad sizeable quantities of
“personal effects”.
private respondents Farrales and Mamasig
jointly instituted a complaint, docketed as
NCR-STF-95151-80, for illegal dismissal and
non-payment of company benefits and
bonuses, against PIA with the then Ministry of
Labor and Employment ("MOLE"). Regional
Director of MOLE ordered the reinstatement
of private respondents with full backwages or,
in the alternative, the payment to them of the
amounts equivalent to their salaries for the
remainder of the fixed three-year period of
their employment contracts having attained
the status of regular employees since PIA was
not able to show evidence of respondents
alleged tardiness.
PIA appealed. Invoking paragraphs 5 and 6 of
the contract of employment, PIA claimed that
it is authorized to shorten the 3-year term at
any time and for any cause satisfactory to
itself. It argued that its relationship with
Farrales and Mamasig was governed by the
provisions of its contract rather than by the
general provisions of the Labor Code.
ISSUE:
WON the employment contract should prevail
over the general provisions of the Labor Code.
WON the provision in the contract that the
venue for settlement of any dispute arising out
of or in connection with the agreement is to be
resolved only in courts of Karachi Pakistan is
valid.
HELD:
FIRST ISSUE: It’s a No.
The principle of party autonomy in contracts is
not an absolute principle. The rule in Article
1306 of the Civil Code is that the contracting
parties may establish such stipulations as they
may deem convenient, “provided they are not
contrary to law, morals, good customs, public
order or public policy.” Thus, counter-
balancing the principle of autonomy of
contracting parties is the equally general rule
that provisions of applicable law, especially
provisions relating to matters affected with
public policy, are deemed written into the
contract. The law relating to labor and
employment are impressed with public
interest. The law relating to labor and
employment is clearly such an area and
parties are not at liberty to insulate
themselves and their relationships from the
impact of labor laws and regulations by simply
contracting with each other. It is thus
necessary to appraise the contractual
provisions invoked by petitioner PIA in terms
of their consistency with applicable Philippine
law and regulations. Paragraph 5 of that
employment contract was inconsistent with
Articles 280 and 281 of the Labor Code and
thus, cannot be given effect.
SECOND ISSUE: It’s a No again.
These circumstances, the employer-employee
relationship between the parties; the contract
being not only executed in the Philippines, but
also performed here, at least partially; private
respondents are Philippine citizens and
petitioner, although a foreign corporation, is
licensed to do business and actually doing
business and hence resident in the
Philippines; lastly, private respondents were
based in the Philippines in between their
assigned flights to the Middle East and
Europe – show that the Philippine courts and
administrative agencies are the proper fora
for the resolution of contractual disputes
between the parties. The employment
agreement cannot be given effect so as to bar
Philippine agencies and courts vested with
jurisdiction by Philippine law. Moreover, PIA
failed to plead and proved the contents of
Pakistan law on the matter, it is therefore
presumed that the applicable provisions of the
law of Pakistan are the same as the
applicable provisions of Philippine law. Hence,
the provision in the contract that the venue for
settlement of any dispute arising out of or in
connection with the agreement is to be
resolved only in courts of Karachi Pakistan is
not valid.
G.R. No. 166920 February 19,
2007
PACIFIC CONSULTANTS
INTERNATIONAL ASIA, INC. and JENS
PETER HENRICHSEN, Petitioners, vs.
KLAUS K. SCHONFELD, Respondent.
FACTS:
Respondent is a Canadian citizen and was a
resident of New Westminster, British
Columbia, Canada. He had been a consultant
in the field of environmental engineering and
water supply and sanitation. Pacicon
Philippines, Inc. (PPI) is a corporation duly
established and incorporated in accordance
with the laws of the Philippines. The primary
purpose of PPI was to engage in the business
of providing specialty and technical services
both in and out of the Philippines. It is a
subsidiary of Pacific Consultants International
of Japan (PCIJ). The president of PPI, Jens
Peter Henrichsen, who was also the director
of PCIJ, was based in Tokyo, Japan.
On January 7, 1998, Henrichsen transmitted a
letter of employment to respondent in
Canada, requesting him to accept the same
and affix his conformity thereto. Respondent
made some revisions in the letter of
employment and signed the contract. He then
sent a copy to Henrichsen. The letter of
employment contains among others a
stipulation which states:
“ Any question of interpretation, understanding
or fulfillment of the conditions of employment,
as well as any question arising between the
Employee and the Company which is in
consequence of or connected with his
employment with the Company and which
cannot be settled amicably, is to be finally
settled, binding to both parties through written
submissions, by the Court of Arbitration in
London.
Respondent arrived in the Philippines and
assumed his position as PPI Sector Manager.
He was accorded the status of a resident
alien.
As required by Rule XIV (Employment of
Aliens) of the Omnibus Rules Implementing
the Labor Code, PPI applied for an Alien
Employment Permit (Permit) for respondent
before the Department of Labor and
Employment (DOLE).
On May 5, 1999, respondent received a letter
from Henrichsen informing him that his
employment had been terminated effective
August 4, 1999 for the reason that PCIJ and
PPI had not been successful in the water and
sanitation sector in the Philippines. However,
on July 24, 1999, Henrichsen, by electronic
mail, requested respondent to stay put in his
job after August 5, 1999, until such time that
he would be able to report on certain projects
and discuss all the opportunities he had
developed. Respondent continued his work
with PPI until the end of business hours on
October 1, 1999.
Respondent filed with PPI several money
claims, including unpaid salary, leave pay, air
fare from Manila to Canada, and cost of
shipment of goods to Canada. PPI partially
settled some of his claims (US$5,635.99), but
refused to pay the rest.
On December 5, 2000, respondent filed a
Complaint for Illegal Dismissal against
petitioners PPI and Henrichsen with the Labor
Arbiter. In his Complaint, respondent alleged
that he was illegally dismissed; PPI had not
notified the DOLE of its decision to close one
of its departments, which resulted in his
dismissal; and they failed to notify him that his
employment was terminated after August 4,
1999. Respondent also claimed for separation
pay and other unpaid benefits. He alleged that
the company acted in bad faith and
disregarded his rights.
Petitioners filed a Motion to Dismiss the
complaint on the following grounds: (1) the
Labor Arbiter had no jurisdiction over the
subject matter; and (2) venue was improperly
laid. It averred that respondent was a
Canadian citizen, a transient expatriate who
had left the Philippines. He was employed and
dismissed by PCIJ, a foreign corporation with
principal office in Tokyo, Japan. Since
respondent’s cause of action was based on
his letter of employment executed in Tokyo,
Japan dated January 7, 1998, under the
principle of lex loci contractus, the complaint
should have been filed in Tokyo, Japan.
Petitioners claimed that respondent did not
offer any justification for filing his complaint
against PPI before the NLRC in the
Philippines. Moreover, under Section 12 of the
General Conditions of Employment appended
to the letter of employment dated January 7,
1998, complainant and PCIJ had agreed that
any employment-related dispute should be
brought before the London Court of
Arbitration. Since even the Supreme Court
had already ruled that such an agreement on
venue is valid, Philippine courts have no
jurisdiction.
LA: rendered a decision granting petitioners’
Motion to Dismiss.
The LA found, among others, that the January
7, 1998 contract of employment between
respondent and PCIJ was controlling; the
Philippines was only the “duty station” where
Schonfeld was required to work under the
General Conditions of Employment. PCIJ
remained respondent’s employer despite his
having been sent to the Philippines. Since the
parties had agreed that any differences
regarding employer-employee relationship
should be submitted to the jurisdiction of the
court of arbitration in London, this agreement
is controlling.
NLRC: agreed with the disquisitions of the
Labor Arbiter and affirmed the latter’s decision
in toto.
Respondent then filed a petition for certiorari
under Rule 65 with the CA. The CA found the
petition meritorious. Applying the four-fold test
of determining an employer-employee
relationship, the CA declared that respondent
was an employee of PPI. On the issue of
venue, the appellate court declared that, even
under the January 7, 1998 contract of
employment, the parties were not precluded
from bringing a case related thereto in other
venues. While there was, indeed, an
agreement that issues between the parties
were to be resolved in the London Court of
Arbitration, the venue is not exclusive, since
there is no stipulation that the complaint
cannot be filed in any other forum other than
in the Philippines. It ordered the remand of the
case to the Labor Arbiter for disposition of the
merits of the case.
ISSUE:
WON the principles of forum non conveniens
is applicable.
HELD: It’s a Yes.
Definition: Forum non conveniens is a
discretionary power that allows courts to
dismiss a case where another court, or forum,
is much better suited to hear the case. This
dismissal does not prevent a plaintiff from re-
filing his or her case in the more appropriate
forum.
The settled rule on stipulations regarding
venue, as held by this Court in the vintage
case of Philippine Banking Corporation v.
Tensuan, is that while they are considered
valid and enforceable, venue stipulations in a
contract do not, as a rule, supersede the
general rule set forth in Rule 4 of the Revised
Rules of Court in the absence of qualifying or
restrictive words. They should be considered
merely as an agreement or additional forum,
not as limiting venue to the specified place.
They are not exclusive but, rather permissive.
If the intention of the parties were to restrict
venue, there must be accompanying language
clearly and categorically expressing their
purpose and design that actions between
them be litigated only at the place named by
them.
In the instant case, no restrictive words like
“only,” “solely,” “exclusively in this court,” “in
no other court save —,” “particularly,”
“nowhere else but/except —,” or words of
equal import were stated in the contract. It
cannot be said that the court of arbitration in
London is an exclusive venue to bring forth
any complaint arising out of the employment
contract.
Petitioners contend that respondent should
have filed his Complaint in his place of
permanent residence, or where the PCIJ Application of the doctrine of forum non
holds its principal office, at the place where conveniens
the contract of employment was signed, in
London as stated in their contract. By
enumerating possible venues where THE MANILA HOTEL CORP. AND
respondent could have filed his complaint, MANILA HOTEL INTL. LTD., petitioners,
however, petitioners themselves admitted that vs. NATIONAL LABOR RELATIONS
the provision on venue in the employment COMMISSION, ARBITER CEFERINA J.
contract is indeed merely permissive. DIOSANA AND MARCELO G.
SANTOS, respondents.
Petitioners’ insistence on the application of the
principle of forum non conveniens must be PARDO, J .:
rejected. The bare fact that respondent is a
Canadian citizen and was a repatriate does FACTS:
not warrant the application of the principle for
the following reasons:  Private respondent Marcelo Santos
was an overseas worker employed
The Labor Code of the Philippines does not as a printer at the Mazoon Printing
include forum non conveniens as a ground for Press, Sultanate of Oman.
the dismissal of the complaint.
o Subsequently, in June
The propriety of dismissing a case based on 1988, he was directly
this principle requires a factual determination; hired by the Palace Hotel,
hence, it is properly considered as defense. Beijing, People's Republic
of China and later
In Bank of America, NT&SA, Bank of America
terminated due to
International, Ltd. v. Court of Appeals, this
retrenchment.
Court held that:
 On August 10, 1989, the Palace
x x x [a] Philippine Court may assume
Hotel informed respondent Santos
jurisdiction over the case if it chooses to do
by letter signed by Mr. Shmidt that
so; provided, that the following requisites are
his employment at the Palace Hotel
met: (1) that the Philippine Court is one to
print shop would be terminated due
which the parties may conveniently resort to;
to business reverses brought about
(2) that the Philippine Court is in a position to
by the political upheaval in China.
make an intelligent decision as to the law and
the facts; and, (3) that the Philippine Court o On September 5, 1989,
has or is likely to have power to enforce its the Palace Hotel
decision. x x x terminated the
employment of
in Philsec. Investment Corporation vs. Court
respondent Santos and
of Appeals, that the doctrine of forum non
paid all benefits due him,
conveniens should not be used as a ground
including his plane fare
for a motion to dismiss because Sec. 1, Rule
back to the Philippines.
16 of the Rules of Court does not include said
doctrine as a ground. This Court further ruled  On February 20, 1990, respondent
that while it is within the discretion of the trial Santos filed a complaint for illegal
court to abstain from assuming jurisdiction on dismissal with the Arbitration
this ground, it should do so only after vital Branch, National Capital Region,
facts are established, to determine whether NLRC.
special circumstances require the court’s
desistance; and that the propriety of o He prayed for an award
dismissing a case based on this principle of of nineteen thousand nine
forum non conveniens requires a factual hundred and twenty three
determination, hence it is more properly dollars (US$19,923.00) as
considered a matter of defense. actual damages, forty
thousand pesos
(P40,000.00) as
exemplary damages and
attorney's fees equivalent
 to 20% of the damages
prayed for.
o The complaint named
MHC, MHICL, the
Palace Hotel and Mr.
Shmidt as
respondents.
o The Palace Hotel and Mr.
Shmidt were not served
with summons and neither
participated in the
proceedings before the
Labor Arbiter.
 Labor Arbiter Ceferina J. Diosana,
decided in favor of the private
respondent.
 On July 23, 1991, petitioners
appealed to the NLRC, arguing that
the POEA, not the NLRC had
jurisdiction over the case.
 On August 28, 1992, the NLRC
promulgated a resolution, declaring
the decision of the labor arbirter for
lack of jurisdiction.
Issue:
 Whether or not the NLRC is the
most convenient venue or forum to
hear and decide the instant
controversy;
Ruling:
 NO.
 The Supreme Court held that under
the rule of forum non conveniens, a
Philippine court or agency may
assume jurisdiction over the case if
it chooses to do so provided:
o (1) that the Philippine
court is one to which the
parties may conveniently
resort to;
o (2) that the Philippine
court is in a position to
make an intelligent
decision as to the law and
the facts; and
o (3) that the Philippine
court has or is likely to
have power to enforce its
decision.
 NLRC is a NOT convenient forum
given that all the incidents of the
FACTS:
case from the time of recruitment,
to employment to dismissal
occurred outside the Philippines.
o The inconvenience is
compounded by the fact
that the proper
defendants, the Palace
Hotel and MHICL are not
nationals of the
Philippines. Neither .are
they "doing business in
the Philippines."
o Likewise, the main
witnesses, Mr. Shmidt and
Mr. Henk are non-
residents of the
Philippines.
 Neither can an intelligent decision
be made as to the law governing the
employment contract as such was
perfected in foreign soil.
o This calls to fore the
application of the
principle of lex loci
contractus (the law of the
place where the contract
was made
 This is not to say that Philippine
courts and agencies have no power
to solve controversies involving
foreign employers.
o This also does not mean
that the PH courts do not
have power over an
employment contract
executed in a foreign
country.
o If Santos were an
"overseas contract
worker", a Philippine
forum, specifically the
POEA, not the NLRC,
would protect him.
 Petition GRANTED, NLRC Decision
was ANNULLED.
PHILIPPINE NATIONAL
BANK, petitioner, vs. FLORENCE O.
CABANSAG, respondent.
PANGANIBAN, J.:
 In late 1998, [herein Respondent
Florence Cabansag] arrived in
Singapore as a tourist.
 She applied for employment, with
the Singapore Branch of the
Philippine National Bank, a private
banking corporation organized and
existing under the laws of the
Philippines, with principal offices at
the PNB Financial Center, Roxas
Boulevard, Manila.
o At the time, the Singapore
PNB Branch was under
the helm of Ruben C.
Tobias.
 Ruben C. Tobias found her
eminently qualified and wrote a
letter to the President of the Bank in
Manila, recommending the
appointment of Florence O.
Cabansag, for the position.
 However, despite the notations on
her initial performance reports, she
was told by her two flatmates that
Ruben C. Tobias has asked them to
tell Florence O. Cabansag to resign
from her job.
 Ruben C. Tobias confirmed the
veracity of the information, with the
explanation that her resignation
was imperative as a ‘cost-cutting
measure’ of the Bank.
 Despite of her refusals to tender a
resignation letter, on April 20, 1999,
she received a letter from Ruben C.
Tobias terminating her
employment with the Bank.
 The Labor Arbiter rendered
judgment in favor of the
Complainant and against the
Respondents, granting Cabansag’s
reinstatement and payment of
bckwages.
 PNB appealed the labor arbiter’s
Decision to the NLRC which
affirmed the Decision with
modifications
  The CA dismissed the Certiorari,
noting that petitioner bank had failed
to adduce in evidence the
Singaporean law supposedly
governing the latter’s employment
Contract with respondent.
o The appellate court found
that the Contract had
actually been processed
by the Philippine Embassy
in Singapore and
approved by the POEA,
which then used that
Contract as a basis for
issuing an Overseas
Employment Certificate in
favor of respondent.
ISSUE:
 Whether or not the arbitration of the
NLRC in the National Capital
Region is the most convenient
venue or forum to hear and decide
the instant controversy?
RULING:
 YES.
 The Supreme Court held that under
Section 1(a) of Rule IV of the NLRC
Rules of Procedure:
o Cases of Overseas
Filipino Worker (OFW)
shall be filed before the
Regional Arbitration
Branch where the
complainant resides or
where the principal
office of the
respondent/employer is
situated, at the option of
the complainant.
 Cabansag was employed by
petitioner in its branch office in
Singapore.
o Admittedly, she is a
Filipino and not a legal
resident of that state.
o She thus falls within the
category of "migrant
worker" or "overseas
Filipino worker."
 As such, it is her option to choose
the venue of her Complaint against
petitioner for illegal dismissal.
o The law gives her two
choices:
 (1) at the
Regional
Arbitration
Branch (RAB)
where she
resides or
 (2) at the RAB
where the
principal office
of her employer
is situated.
o Since her dismissal by
petitioner, respondent has
returned to the Philippines
-- specifically to her
residence at Filinvest II,
Quezon City. Thus, in
filing her Complaint
before the RAB office in
Quezon City, she has
made a valid choice of
proper venue.
Law Interpretation – Art. 4, LC Art. 1702,
New Civil Code of the Philippines (Note:
Discussion on Labor Code and the Civil Code)
GOVERNMENT SERVICE INSURANCE
SYSTEM, Petitioner, vs. JEAN E.
RAOET, Respondent.
BRION, J.:
FACTS:
 The respondent’s husband,
Francisco M. Raoet, entered
government service on July 16,
1974 as an Engineer Trainee at the
National Irrigation Administration
(NIA).
 On August 1, 1998, he was
promoted to the position of Engineer
A – the position he held until his
death on May 5, 2001.
 As Engineer A, Francisco
supervised the implementation of
construction activities of Lateral E
ISSUE:
and E-1. He was also tasked to
review and check the structural plan
and the facilities.
 In 2000, Francisco was diagnosed
with Hypertension, Severe, Stage
III, Coronary Artery Disease, and he
was confined at the Region I
Medical Center from July 16 to July
25, 2000.
o As the GSIS considered
this a work-related
condition, Francisco was
awarded 30 days
Temporary Total Disability
benefits, plus
reimbursement of medical
expenses incurred during
treatment.
 The respondent, as widow, filed with
the GSIS a claim for income
benefits accruing from the death of
her husband.
o GSIS denied the claim
on the ground that the
respondent did not submit
any supporting documents
to show that Francisco’s
death was due to peptic
ulcer.
 On appeal, the ECC affirmed the
findings of the GSIS in its decision
of July 24, 2002.
o According to the ECC, it
could not determine if
Francisco’s death was
compensable due to the
absence of documents
supporting the
respondent’s claim.
 The CA reversed ECC decision.
o The appellate court held
that while the Amended
Rules on Employees’
Compensation does not
list peptic ulcer as an
occupational disease,
Francisco’s death should
be compensable since its
immediate cause was
cardiac arrest.
  Whether or not peptic ulcer is a
compensable illness under PD 626?
RULING:
 YES!
 The Supreme Court held that
Contrary to the CA’s conclusion,
peptic ulcer is a compensable cause
of death, pursuant to ECC
Resolution No. 1676, which
unmistakably provides
o that peptic ulcer is a
compensable disease
listed under Annex "A,"
provided the claimant is
in an occupation that
involves prolonged
emotional or physical
stress, as
among professional
people, transport workers
and the like.
 In arriving at this conclusion, the
Court stressed that in determining
the compensability of an illness, it is
not required that the employment be
the sole factor in the growth,
development, or acceleration of a
claimant’s illness to entitle him to
the benefits provided for.
o It is enough that his
employment
contributed, even if
only in a small degree,
to the development of
the disease.
 The Court’s ruling is depedent
mainly from the character of P.D.
626 as a social legislation whose
primordial purpose is to provide
meaningful protection to the working
class against the hazards of
disability, illness, and other
contingencies resulting in loss of
income.
 In employee compensation, persons
charged by law to carry out the
Constitution’s social justice
objectives should adopt a liberal
attitude in deciding
compensability claims and should
not hesitate to grant compensability
where a reasonable measure of
work-connection can be inferred.
 Only this kind of interpretation can
give meaning and substance to the
law’s compassionate spirit as
expressed in Article 4 of the Labor
Code
o that all doubts in the
implementation and
interpretation of the
provisions of the Labor
Code, including their
implementing rules and
regulations, should be
resolved in favor of
labor.
 Petition was DENIED.
ARCO METAL PRODUCTS, CO., INC.,
and MRS. SALVADOR UY, petitioners,
vs. SAMAHAN NG MGA MANGGAGAWA
SA ARCO METAL-NAFLU (SAMARM-
NAFLU), respondent.
TINGA, J. :
FACTS:
 Petitioner is a company engaged in
the manufacture of metal products,
whereas respondent is the labor
union of petitioner’s rank and file
employees.
 Sometime in December 2003,
petitioner paid the 13th month pay,
bonus, and leave encashment of
three union members in amounts
proportional to the service they
actually rendered in a year,
which is less than a full twelve (12)
months.
 Respondent protested the prorated
scheme, claiming that on several
occasions petitioner did not
prorate the payment of the same
benefits to seven (7) employees
who had not served for the full 12
months.
o According to respondent,
the prorated payment
violates the rule against
diminution of benefits
under Article 100 of the
Labor Code.
 Thus, they filed a complaint before
the National Conciliation and
Mediation Board (NCMB). The
parties submitted the case for
voluntary arbitration.
 The voluntary arbitrator, Apron M.
Mangabat, ruled in favor of
petitioner.
o He also interpreted the
phrase "for each year of
service" found in the
pertinent CBA provisions
to mean that an employee
must have rendered one
year of service in order
to be entitled to the full
benefits provided in the
CBA
 Upon the filing of a Petition for
Review of the respondent, Court of
Appeals ruled that the CBA did not
intend to foreclose the application of
prorated payments of leave benefits
to covered employees.
o The appellate court found
that petitioner, however,
had an existing voluntary
practice of paying the
aforesaid benefits in
full to its employees,
thereby rejecting the claim
that petitioner erred in
paying full benefits to its
seven employees.
ISSUE:
 Whether the intent of the CBA
provisions is to grant full benefits
regardless of service actually
rendered by an employee to the
company.
RULING:
 NO.
 The Supreme Court held that
pursuant to the pertinent provisions
of the CBA, here is no doubt that in
order to be entitled to the full
monetization of sixteen (16) days of
vacation and sick leave, one must
have rendered at least one year
 of service. The clear wording of the
provisions does not allow any other
interpretation.
 HOWEVER, the petitioner granted,
in several instances, full benefits
to employees who have not
served a full year.
 In the years 1992, 1993, 1994,
1999, 2002 and 2003, petitioner had
adopted a policy of freely, voluntarily
and consistently granting full
benefits to its employees regardless
of the length of service rendered.
o True, there were only a
total of seven employees
who benefited from such a
practice, but it was an
established practice
nonetheless.
o Jurisprudence has not
laid down any rule
specifying a minimum
number of years within
which a company practice
must be exercised in order
to constitute voluntary
company practice.
 Any benefit and supplement being
enjoyed by employees cannot be
reduced, diminished, discontinued
or eliminated by the employer.
o The principle of non-
diminution of benefits is
founded on the
Constitutional mandate to
"protect the rights of
workers and promote their
welfare," and "to afford
labor full protection."
 Said mandate in turn is the basis of
Article 4 of the Labor Code which
states that "all doubts in the
implementation and
interpretation of this Code,
including its implementing rules
and regulations shall be
rendered in favor of labor."
 Jurisprudence is replete with cases
which recognize the right of
employees to benefits which were
voluntarily given by the employer
and which ripened into company
practice.
o Thus in Davao Fruits
Corporation v. Associated
Labor Unions, et a where
an employer had freely
and continuously included
in the computation of the
13th month pay those
items that were expressly
excluded by the law, we
held that the act which
was favorable to the
employees though not
conforming to law had
thus ripened into a
practice and could not be
withdrawn, reduced,
diminished, discontinued
or eliminated.
o In Sevilla Trading
Company v. Semana, we
ruled that the employer’s
act of including non-basic
benefits in the
computation of the
13th month pay was a
voluntary act and had
ripened into a company
practice which cannot be
peremptorily withdrawn.
 The petition was DENIED.
MANOLO A. PEÑAFLOR, Petitioner, vs.
OUTDOOR CLOTHING
MANUFACTURING CORPORATION,
NATHANIEL T. SYFU, President,
MEDYLENE M. DEMOGENA, Finance
Manager, and PAUL LEE,
Chairman, Respondents.
BRION, J.:
FACTS:
 Peñaflor was hired as probationary HRD
Manager of Outdoor Clothing on
September 2, 1999.
 On March 13, 2000, more than six
months from the time he was hired,
Peñaflor learned that Outdoor Clothing’s
President, Nathaniel Syfu appointed
Edwin Buenaobra as the concurrent HRD
and Accounting Manager.
o After enduring what he claimed
as discriminatory treatment
at work, Peñaflor considered
the appointment of
Buenaobra to his position
as the last straw,.
 Peñaflor then filed his irrevocable
resignation from Outdoor Clothing
effective at the close of office hours on
March 15, 2000.
 He thereafter filed an illegal dismissal
complaint with the labor arbiter claiming
that he had been constructively
dismissed.
 The labor arbiter issued a decision in
Peñaflor’s favor on August 15, 2001.
 On appeal, the NLRC reversed the
labor arbiter’s ruling in its September
24, 2002 decision.
 The appellate court affirmed the
NLRC’s decision.
ISSUE:
 Whether Peñaflor’s undisputed
resignation was a voluntary or a forced
one, in the latter case making it a
constructive dismissal equivalent to an
illegal dismissal.
RULING:
 YES
 The Supreme Court held that while the
resignation letter of Peñaflor was
undated, there are three circumstances
which led the Court to believe that he
was forced to file resignation letter on
March 15, 2000.
o First, Peñaflor was never
informed about the
memorandum regarding the
acceptance of Buenaonbra,
when they directly concerned
him, particularly the turnover of
responsibilities to Buenaobra if
indeed Peñaflor had resigned
on March 1, 2000 and a
smooth turnover to Buenaobra
was intended
o Second, the pieces of
evidence pointing to a March 1,
2000 resignation – specifically,
 Syfu’s March 1, 2000
memorandum to Buenaobra
about Penaflor’s resignation
and Buenaobra’s own
acknowledgment and
acceptance – were only
presented to the NLRC on
appeal, not before the labor
arbiter.
 Thirdl, the memorandum of March 10,
2000 signed by Syfu informing the whole
office about the designation of
Buenaobra as concurrent Accounting and
HRD Manager.
o It was signed by the respective
officials on March 13, 2000,
showing that indeed it was
only on that day that the
appointment of Buenaobra
to the HRD position was
disclosed.
o This evidence is fully
consistent with Peñaflor’s
position that it was only in the
afternoon of March 13, 2000
that he was told, informally at
that, that Buenaobra had taken
over his position.
 It is more consistent with human
experience that Peñaflor indeed learned
of the appointment of Buenaobra only on
March 13, 2000 and reacted to this
development through his resignation
letter after realizing that he would only
face hostility and frustration in his
working environment.
 The applicable basic principle is that
expressed in Article 4 of the Labor Code
– that all doubts in the interpretation
and implementation of the Labor
Code should be interpreted in favor
of the workingman.
o This principle has been
extended by jurisprudence to
cover doubts in the evidence
presented by the employer and
the employee.
 As shown above, Peñaflor has, at very
least, shown serious doubts about the
merits of the company’s case,
particularly in the appreciation of the
clinching evidence on which the NLRC
and CA decisions were based.
o In such contest of evidence,
the cited Article 4 compelled
the Supreme Court to rule in
Peñaflor’s favor.
 Thus, the Court ruled that Peñaflor was
constructively dismissed given the hostile
and discriminatory working environment
he found himself in, particularly
evidenced by the escalating acts of
unfairness against him that culminated in
the appointment of another HRD
manager without any prior notice to him.
 Petition GRANTED. Payment of
backwages and separation pay (strained
relationship)
RAMIREZ V. CA (December 4, 2009)
FACTS:
 Mario Valcueba filed a complaint for
illegal dismissal and nonpayment of
wages against Hilario Ramirez.
o Valcueba claimed that
Ramirez hired him as a
mechanic. He was not
paid for rest days or
holidays, and was not
given his complete 13th
month pay.
o Valcueba was told by
Ramirez’ secretary that he
would not be allowed to
returned to work unless he
agreed to work on pakyaw
basis.
 Ramirez contends that Valcueba
intended to abandon his job, and
was never fired.
 LA: ruled in favor of Ramirez.
Ramirez filed an MR with Motion to Reduce
Appeal Bond.
o NLRC: Denied. (No
Bond.)
 CA: Dismissed for Ramirez’ failure
to properly verify his petition and to
state material dates.
ISSUE: WON the dismissal of the NLRC was
proper.
HELD: YES.
 The right to appeal is not a natural
right or a part of due process; it is
merely a statutory privilege, and
may be exercised only in the
manner prescribed by and in
accordance with the provisions of
law.
 ART. 223 LC:
o Decisions, awards, or
orders of the Labor Arbiter
are final and executory
unless appealed to the
Commission by any or
both parties within ten (10)
calendar days from receipt
of such decisions, awards,
or orders. Such appeal
may be entertained only
on any of the following
grounds:xxx
o In case of a judgment
involving a monetary
award, an appeal by the
employer may be
perfected only upon the
posting of a cash or surety
bond issued by a
reputable bonding
company duly accredited
by the Commission in the
amount equivalent to the
monetary award in the
judgment appealed from.
 Under the Rules, appeals involving
monetary awards are perfected only
upon compliance with the following
mandatory requisites, namely: (1)
payment of the appeal fees; (2) filing
of the memorandum of appeal; and
(3) payment of the required cash or
surety bond.
 The posting of a bond is
indispensable to the perfection of an
appeal in cases involving monetary
awards from the decision of the
labor arbiter.
 The word "only" in Articles 223 of
the Labor Code makes it
unmistakably plain that the
lawmakers intended the posting of a
cash or surety bond by the employer
to be the essential and exclusive
 means by which an employer's
appeal may be perfected. The word
"may" refers to the perfection of an
appeal as optional on the part of the
defeated party, but not to the
compulsory posting of an appeal
bond, if he desires to appeal. The
meaning and the intention of the
legislature in enacting a statute
must be determined from the
language employed; and where
there is no ambiguity in the words
used, then there is no room for
construction.
 Clearly, the filing of the bond is not
only mandatory but also a
jurisdictional requirement that must
be complied with in order to confer
jurisdiction upon the NLRC. Non-
compliance with the requirement
renders the decision of the Labor
Arbiter final and executory.
OLISA V. ESCARIO (September 27, 2010)
FACTS:
 Petitioners were regular employees
of the Pinakamasarap Corporation.
They were members of the
Malayang Samahan ng mga
Manggagawa sa Balanced Foods.
 All officers and some 200 members
of the Union walked out of PINA’s
premises and proceeded to the
barangay office to show support for
Juanito Cañete, an officer of the
Union charged with oral defamation
by Aurora Manor, PINA’s personnel
manager.
o After reaching a Any union officer who knowingly
settlement, the workers
returned.
 PINA put everyone involved under
preventive suspension. It then
terminated them after a month.
 PINA filed a complaint for unfair
labor practices before the LA.
 LA: walkout was illegal.
 The Union filed a Notice of Strike.
After the strike vote, a strike was
held.
 PINA charged the Union with unfair
labor practices and abandonment of
work, stating that they violated the
CBA.
 NLRC issued TRO to enjoin Union
from barricading entrance and exit
to PINA premises.
 LA: declared strike illegal.
 NLRC: sustained, but
abandonment.
o Art. 264 LC: the union
officers who knowingly
participate in the illegal
strike may be declared to
have lost their
employment status.
However, mere
participation of a union
member in the illegal
strike does not mean loss
of employment status
unless he participates in
the commission of illegal
acts during the strike.
o There was no showing the
Union deliberately refused
to return to work.
 CA: affirmed.
ISSUE: WON petitioners were unlawfully
dismissed.
HELD: NO.
 Art. 264: Any worker whose
employment has been terminated
as a consequence of an unlawful
lockout shall be entitled to
reinstatement with full backwages.
participates in an illegal strike and
any worker or union officer who
knowingly participates in the
commission of illegal acts during a
strike may be declared to have lost
his employment status;
 LC authorizes the award of full
backwages only when the
termination of employment is a
consequence of an unlawful lockout.
On the consequences of an illegal
strike, the provision distinguishes
between a union officer and a union
member participating in an illegal
strike.
o Union members more
benignly treated
o Officers were then not
illegally dismissed.
PHIL. TELEPHONE AND TELEGRAPH
no
CORP. V. NLRC (March 21, 1990)
FACTS:
 Bobby Toribiano was employed by
PT&T as a counter-clerk and long
distance operator. He was then
terminated for tampering with the
vodex receipt by changing the
amount therein.
 Bobby claims that he tampered with
the vodex receipt without malicious
interest. He claims that he was
terminated without proper
investigation and warning.
 LA: against PT&T, ordered to
reinstate Bobby.
 NLRC affirmed.
ISSUE: WON Bobby was illegally dismissed.
HELD: YES.
 LA found that Bobby did commit a
mistake in the entry receipt through
negligence, and that he repeatedly
brought such to the attention of
PT&T but was ignored.
 Well entrenched is the rule that
when the conclusions of the labor
arbiter are sufficiently corroborated
by the evidence on record, the same
should be respected by appellate
tribunals since he is in a better
position to assess and evaluate the
credibility of the contending parties.
 This ruling is only in keeping with
the constitutional mandate for the
State to afford full protection to labor
such that, when conflicting interests
of labor and capital are to be
weighed on the scales of social
justice, the heavier influence of the
latter should be counterbalanced by
the sympathy and compassion the
 law must accord the underprivileged
worker.
BAGUIO V. NLRC (October 4, 1991)
FACTS:
 Feliciano Lupo, a building
contractor, entered into a contract
with GMC for the construction of an
annex building inside the latter's
plant in Cebu City.
 Lupo hired the petitioners as
carpenters, masons, or laborers.
 Subsequently, Lupo terminated the
petitioners’ services.
 Petitioners filed a complaint against
Lupo and GMC for unpaid wages.
 LA: Lupo and GMC jointly and
severally liable.
 NLRC: absolved Lupo and GMC.
ISSUE: WON respondents are solidarily
liable to pay petitioners.
HELD: YES.
 Petitioner argues that under Art. 106
LC holds the employer jointly and
severally liable with his contractor
for unpaid wages of employees of
the latter.
 Art. 106 cannot be the basis for
recovery since it treats “labor-only”
contracts.
o A person is deemed to be
engaged in "labor only"
contracting where (1) the
person supplying workers
to an employer does not
have substantial capital or
investment in the form of
tools, equipment,
machineries, work
premises, among others;
and (2) the workers
recruited and placed by
such person are
performing activities which
are directly related to the
principal business of such
employer.
o Since the construction of
an annex building inside
the company plant has no
relation whatsoever with
the employer's business
of flour and feeds
manufacturing, "labor-
only" contracting does not
exist. Article 106 is thus
inapplicable.
 Art. 107 applies.
o Art. 107.Indirect
Employer. — The
provisions of the
immediately preceding
Article shall likewise apply
to any person,
partnership, association or
corporation which, not
being an employer,
contracts with an
independent contractor for
the performance of any
work, task, job or project.
 There is "job contracting" where
(1) the contractor carries on an
independent business and
undertakes the contract work on his
own account under his own
responsibility according to his own
manner and method, free from the
control and direction of his employer
or principal in all matters connected
with the performance of the work
except as to the results thereof; and
(2) the contractor has substantial
capital or investment in the form of
tools, equipment, machineries, work
premises, and other materials which
are necessary in the conduct of his
business.
 GMC is an indirect employer, and is
solidarily liable with Lupo for the
wages.
DBP V. NLRC (June 17, 1994)
FACTS:
 Private respondents were hired as
security guards by CISCOR. They
were assigned to secure the
premises of CISCOR’s clients,
which included DBP.
 DBP assigned respondents to
secure one of its assets, the
Riverside Mills Corporation.
 Private respondents resigned from
CISCOR. They then claimed for the
return of the cash bond and
payment for their 13th month pay
and leave pay.
 Since CISCOR failed to pay,
respondents filed a case for
recovery.
 LA: ordered CISCOR to pay.
 NLRC: affirmed. Held DBP and
CISCOR jointly and severally liable.
ISSUE: WON CISCOR and DBP are
solidarily liable.
HELD: YES.
 Petitioner contends that Art. 106
cannot be applied since there was
no failure on the part of CISCOR
and Medina, as direct employer, to
pay the claims of private
respondents, but only a failure on
the part of the latter to present the
proper clearance to pave the way
for the payment of the claims.
o Nothing in said Article 106
indicates that insolvency
or unwillingness to pay by
the contractor or direct
employer is a prerequisite
for the joint and several
liability of the principal or
indirect employer. In fact,
the rule is that in job
contracting, the principal
is jointly and severally
liable with the contractor.
( WALA PA YUNG KAY HAROLD)
ROSARIO BROTHERS INC. (MANILA
COD DEPARTMENT STORE), petitioner,
vs.
HON. BLAS F. OPLE, THE NATIONAL
LABOR RELATIONS COMMISSION, and
LEONARDO LOVERIA, MARIETTA
GALUT, LINDA TAPICERIA, JESUS S.
OLIVER, CLARITA SANGLE, RICARDO
ROXAS, ANTONIO MABUTOL, LUZ
BAYNO, NESTOR SANCHEZ, TITO
CASTALEDA, EDDIE RODRIGUEZ,
MANUEL MEJES, FRANCISCA
TAPICERIA, EDITHA BAYNO, ET
AL., respondents.
Facts:
Private respondents are tailors, pressers,
stitchers and similar workers hired by the
petitioner in its tailoring department (Modes
Suburbia).
For their services, they were paid weekly
wages on piece-work basis, minus the
withholding tax per Bureau of Internal
Revenue (BIR) rules.
They were registered with the Social Security
System (SSS) as employees of petitioner and
premiums were deducted from their wages;
they were also members of the Avenida-
Cubao Manila COD Department Store Labor
Union which has a Collective Bargaining
Agreement with the company.
They were required to report for work from
Monday through Saturday and to stay in the
tailoring shop for no less than eight (8) hours
a day, unless no job order was given them
after waiting for two to three hours, in which
case, they may leave and may come back in
the afternoon.
Their attendance was recorded through a
bundy clock just like the other employees of
petitioner.
A master cutter distributes job orders equally,
supervises the work and sees to it that they
were finished as soon as possible.
Private respondents filed with the Regional
Office of the Department of Labor a complaint
for violation of Presidential Decree 851 (13th
month pay) and Presidential Decree 525, as
amended by Presidential Decree 1123
(Emergency Living Allowance) against herein
petitioner.
Section 3, of the rules implementing PD 851
provides that "all employees of covered
employers shall be entitled to benefits
provided under the Decree ... regardless of
their position, designation or employment
status, and irrespective of the method by
which their wages are paid
Issue:
Whether or not there exist an employer
employee relationship.
Held:
The existence of employer-employee
relationship is determined by the following
elements, namely: (1) the selection and
engagement of the employee; (2) the payment
of wages; (3) the power of dismissal; and (4)
the power to control employees' conduct
although the latter is the most important
element.
On the other hand, an independent contractor
is one who exercises independent
employment and contracts to do a piece of
work according to his own methods and
without being subjected to control of his
employer except as to the result of his work.
1. In this case, as found by the public
respondent, the selection and hiring of private
respondents were done by the petitioner,
through the master cutter of its tailoring
department who was a regular employee.
2. Private respondents received their weekly
wages from petitioner on piece-work basis
which is within the scope and meaning of the
term "wage" as defined under Article 97(f) of
the New Labor Code.
f) "Wage" paid to any employee shag mean
the remuneration or earnings, however,
designated, capable of being expressed in
terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis,
or other method of calculating the same,
which is payable by an employer to an
employee under a written or unwritten
contract of employment for work done or to be
done or for services rendered or to be
rendered, and includes the fair and
reasonable value, as determined by the
Secretary of Labor, of board, lodging or other
facilities customarily furnished by the
employer to the employee.
3. Petitioner had the power to dismiss private
respondents, as shown by the various
memoranda issued for strict compliance by
private respondents, violations of which, in
extreme cases, are grounds for outright
dismissal.
4. Private respondents' conduct in the
performance of their work was controlled by
petitioner, such as: (1) they were required to
work from Monday through Saturday; (2) they
worked on job orders without waiting for the
deadline; (3) they were to observe cleanliness
in their place of work and were not allowed to
bring out tailoring shop patterns; and (4) they
were subject to quality control by petitioner.
5. Private respondents were allowed to
register with the Social Security System (SSS)
as employees of petitioner and premiums
were deducted from their wages just like its
other employees.
RAQUEL P. CONSULTA, Petitioner,
vs.
COURT OF APPEALS, PAMANA
PHILIPPINES, INC., RAZUL Z.
REQUESTO, and ALETA
TOLENTINO, Respondents.
Fact:
Pamana Philippines, Inc. ("Pamana") is
engaged in health care business.
Raquel P. Consulta ("Consulta") was a
Managing Associate of Pamana.
Consulta’s appointment dated 1
December 1987 states:
We are pleased to formally confirm your
appointment and confer upon you the
authority as MANAGING ASSOCIATE (MA)
effective on December 1, 1987 up to January
2, 1988. Your area of operation shall be within
Metro Manila.
In this capacity, your principal
responsibility is to organize, develop,
manage, and maintain a sales division
and a full complement of agencies and
Health Consultants (HealthCons) and to
submit such number of enrollments and
revenue attainments as may be required
of your position in accordance with
pertinent Company policies and
guidelines. In pursuit of this objective,
you are hereby tasked with the
responsibilities of recruiting, training and
directing your Supervising Associates
(SAs) and the Health Consultants under
their respective agencies, for the
purpose of promoting our corporate Love
Mission.
In the performance of such duties, you are
expected to uphold and promote the
Company’s interests and good image and to
abide by its principles and established norms
of conduct necessary and appropriate in the
discharge of your functions. The authority as
MA likewise vests upon you command
responsibility for the actions of your SAs and
HealthCons; the Company therefore reserves
the right to debit your account for any
accountabilities/financial obligations arising
therefrom.
By your acceptance of this appointment, it is
understood that you must represent the
Company on an exclusive basis, and must not
engage directly or indirectly in activities, nor
become affiliated in official or unofficial
capacity with companies or organizations
which compete or have the same business as
Pamana. It is further understood that his [sic]
self-inhibition shall be effective for a period of
one year from date of official termination with
the Company arising from any cause
whatsoever.
In consideration of your undertaking the
assignment and the accompanying duties and
responsibilities, you shall be entitled to
compensation computed as follows:
On Initial Membership Fee Entrance Fee 5%
Medical Fee 6%
On Subsequent Membership Fee 6%
You are likewise entitled to participate in sales
contests and such other incentives that may
be implemented by the Company.
This appointment is on a non-employer-
employee relationship basis, and shall be in
accordance with the Company Guidelines on
Appointment, Reclassification and Transfer of
Sales Associates.3
Consulta, claiming that Pamana did not pay
her commission for the FFCEA account, filed
a complaint for unpaid wages or commission
against Pamana through the Labor Arbiter
which decided in her favor. However the CA
reversed its decision.
Issue:
Whether or not there exist an employer
employee relationship.
Held: NO
Consulta was an independent agent and not
an employee of Pamana.
The four elements of an employer-employee
relationship, which have since been adopted
in subsequent jurisprudence, are (1) the
power to hire; (2) the payment of wages; (3)
the power to dismiss; and (4) the power to
control. The power to control is the most
important of the four elements.
It should, however, be obvious that not every
form of control that the hiring party reserves to
himself over the conduct of the party hired in
relation to the services rendered may be
accorded the effect of establishing an
employer-employee relationship between
them in the legal or technical sense of the
term.
In the present case, the power to control is
missing. Pamana tasked Consulta to
organize, develop, manage, and maintain a
sales division, submit a number of enrollments
and revenue attainments in accordance with
company policies and guidelines, and to
recruit, train and direct her Supervising
Associates and Health
Consultants.12 However, the manner in
which Consulta was to pursue these
activities was not subject to the control of
Pamana.
Consulta failed to show that she had to report
for work at definite hours. The amount of time
she devoted to soliciting clients was left
entirely to her discretion. The means and
methods of recruiting and training her sales
associates, as well as the development,
management and maintenance of her sales
division, were left to her sound judgment.
Also Pamana paid Consulta not for labor she
performed but only for the results of her labor.
Without results, Consulta’s labor was her own
burden and loss. Her right to compensation,
or to commission, depended on the tangible
results of her work17 - whether she brought in
paying recruits.
Aside from commissions, bonuses and other
benefits that depended solely on actual sales,
Pamana did not pay Consulta any
compensation for managing her sales
division, or for recruiting and training her sales
consultants. As a Managing Associate, she
was only entitled to commissions, bonuses
and other benefits, which depended solely on
her sales and on the sales of her group.
The Exclusivity Provision
Consulta’s appointment had an exclusivity
provision. The appointment provided that
Consulta must represent Pamana on an
exclusive basis. She must not engage directly
or indirectly in activities of other companies
that compete with the business of Pamana.
However, the fact that the appointment
required Consulta to solicit business
exclusively for Pamana did not mean that
Pamana exercised control over the
means and methods of Consulta’s work
as the term control is understood in labor
jurisprudence.20 Neither did it make Consulta
an employee of Pamana. Pamana did not
prohibit Consulta from engaging in any other
business, or from being connected with any
other company, for as long as the business or
company did not compete with Pamana’s
business.
Labor Arbiter no Jurisdiction
Consulta filed her action under Article 217(a)
(6) of the Labor Code. However, since there
was no employer-employee relationship
between Pamana and Consulta, the Labor
Arbiter should have dismissed Consulta’s
claim for unpaid commission. Consulta’s
remedy is to file an ordinary civil action to
litigate her claim.
MAMERTO S. BESA, doing business
under the name and style of BESA'S
CUSTOMBUILT SHOES, petitioner,
vs.
THE HONORABLE CRESENCIANO B.
TRAJANO, DIRECTOR OF THE BUREAU
OF LABOR RELATIONS, MINISTRY OF
LABOR AND EMPLOYMENT, AND
KAISAHAN NG MANGGAGAWANG
PILIPINO (KAMPIL-
KATIPUNAN), respondents.
Facts:
Private respondent Kaisahan ng
Mangagawang Pilipino KAMPIL for short) a
legitimate labor union duly registered with the
Ministry of Labor and Employment (MOLE, for
short), filed a Petition for Certification Election.
Petitioner opposed it alleging that —There is
no employer-employee relationship between
Besa's and the petitioners-signatories to the
petition;
Med-Arbiter, issued an order declaring that
there was an employer-employee relationship
between the parties and directed that an
election be conducted.
While the pre-election conference was in
progress, petitioner herein BESAS filed with
Us with petition for certiorari with Prohibition
and simultaneously filed with the Med-Arbiter
a motion to suspend the pre-election
conference.
It is the position of petitioner that if the
shoeshiners are not considered as employees
of Besa's the basic petition for certification
election must necessarily be dismissed for
failure to comply with the mandatory
requirements of the Labor Code, as amended,
that at least thirty (30%) percent of the
employees must support the petition for
certification election and that in order to be
certified as the sole and exclusive bargaining
agent, the union must be obtained a majority
of the valid votes cast by eligible voters.
Issue:
Whether or not an employer-employee
relationship exists between herein petitioner
and the seventeen (17) shoeshiners-members
of the respondent union, who, if the
relationship does exist, should be entitled to
the rights, privileges and benefits of an
employee as provided in the Labor Code.
Held:
The records of the case reveal that an
employer-employee relationship
does not exist between the 17 shoeshiners
and petitioner.
The shoe shiner is distinct from a piece
worker because while the latter is paid for
work accomplished, he does not, however,
contribute anything to the capital of the
employer other than his service. It is the
employer of the piece worker who pays his
wages, while the shoe shiner in this instance
is paid directly by his customer.
These shoe shiners are not employees of the
company, but are partners instead. This is
due to the fact that the owner/manager
does not exercise control and supervision
over the shoe shiners. That the shiners
have their own customers from whom they
charge the fee and divide the proceeds
equally with the owner, which make the owner
categorized them as on purely commission
basis.
A basic factor underlying the exercise of rights
under the Labor Code is the status of
employment. It is important in the
determination of who shall be included in a
proposed bargaining unit because it
is sinequa non. The fundamental and
essential condition that a bargaining unit be
composed of employees. Failure to establish
this juridical relationship between the union
members and the employer affects the legality
of the union itself. It means the ineligibility of
the union members to present a petition for
certification election as well as to vote therein.
"BROTHERHOOD" LABOR UNITY
MOVEMENT OF THE PHILIPPINES,
ANTONIO CASBADILLO, PROSPERO
TABLADA, ERNESTO BENGSON,
PATRICIO SERRANO, ANTONIO B.
BOBIAS, VIRGILIO ECHAS, DOMINGO
PARINAS, NORBERTO GALANG,
JUANITO NAVARRO, NESTORIO
MARCELLANA, TEOFILO B. CACATIAN,
RUFO L. EGUIA, CARLOS SUMOYAN,
LAMBERTO RONQUILLO, ANGELITO
AMANCIO, DANILO B. MATIAR, ET
AL., petitioners,
vs.
HON. RONALDO B. ZAMORA,
PRESIDENTIAL ASSISTANT FOR LEGAL
AFFAIRS, OFFICE OF THE PRESIDENT,
HON. AMADO G. INCIONG,
UNDERSECRETARY OF LABOR, SAN
MIGUEL CORPORATION, GENARO
OLIVES, ENRIQUE CAMAHORT,
FEDERICO OÑATE, ERNESTO
VILLANUEVA, ANTONIO BOCALING and
GODOFREDO CUETO, respondents.
Facts:
Petitioners are workers who have been
employed at the San Miguel Parola Glass
Factory since 1961, averaging about seven
(7) years of service at the time of their
termination. They worked as "cargadores" or
"pahinante" at the SMC Plant loading,
unloading, piling or palleting empty bottles
and woosen shells to and from company
trucks and warehouses. At times, they
accompanied the company trucks on their
delivery routes.
Work in the glass factory was neither regular
nor continuous, depending wholly on the
volume of bottles manufactured to be loaded
and unloaded, as well as the business activity
of the company. Work did not necessarily
mean a full eight (8) hour day for the
petitioners. However, work,at times, exceeded
the eight (8) hour day and necessitated work
on Sundays and holidays. For this, they were
neither paid overtime nor compensation for
work on Sundays and holidays.
Petitioners were paid every ten (10) days on a
piece rate basis, that is, according to the
number of cartons and wooden shells they
were able to load, unload, or pile.
The petitioners worked exclusive at the SMC
plant, never having been assigned to other
companies or departments of SMC plant,
even when the volume of work was at its
minimum.
Sometime in January, 1969, the petitioner
workers organized and affiliated themselves
with the petitioner union and engaged in union
activities. Believing themselves entitled to
overtime and holiday pay, the petitioners
pressed management, airing other grievances
such as being paid below the minimum wage
law, inhuman treatment, being forced to
borrow at usurious rates of interest and to buy
raffle tickets, coerced by withholding their
salaries, and salary deductions made without
their consent.
However, their gripes and grievances were not
heeded by the respondents.
The petitioner union 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
petitioner union alleging that the workers are
not their employees.
All the petitioners were dismissed from their
jobs and, thereafter, denied entrance to
respondent company's glass factory despite
their regularly reporting for work.
A complaint for illegal dismissal and unfair
labor practice was filed by the petitioners.
Issue:
WON there exist an employer employee
relationship
Held:
The evidence strongly indicates the existence
of an employer-employee relationship
between petitioner workers and respondent
San Miguel Corporation.
The respondent asserts that the petitioners
are employees of the Guaranteed Labor
Contractor, an independent labor contracting
firm.
The existence of an independent contractor
relationship is generally established by the
following criteria:
"whether or not the contractor is carrying on
an independent business; the nature and
extent of the work; the skill required; the term
and duration of the relationship; the right to
assign the performance of a specified piece of
work; the control and supervision of the work
to another; the employer's power with respect
to the hiring, firing and payment of the
contractor's workers; the control of the
premises; the duty to supply the premises
tools, appliances, materials and labor; and the
mode, manner and terms of payment"
None of the above criteria exists in the case at
bar.
Considering the length of time that the
petitioners have worked with the respondent
company, there is justification to conclude that
they were engaged to perform activities
necessary or desirable in the usual business
or trade of the respondent, and the petitioners
are, therefore regular employees.
Despite past shutdowns of the glass plant for
repairs, the petitioners, thereafter, promptly
returned to their jobs, never having been
replaced, or assigned elsewhere until the
present controversy arose. The term of the
petitioners' employment appears indefinite.
The continuity and habituality of petitioners'
work bolsters their claim of employee status
vis-a-vis respondent company.
Whether petitioners were employed by an
independent contractor  NO
The payment of the workers' wages is a
critical factor in determining the actuality of an
employer-employee relationship.
The alleged independent contractors in the
case at bar were paid a lump sum
representing only the salaries the workers
were entitled to, arrived at by adding the
salaries of each worker which depend on the
volume of work they. had accomplished
individually. These are based on payrolls,
reports or statements prepared by the
workers' group leader, warehousemen and
checkers, where they note down the number
of cartons, wooden shells and bottles each
worker was able to load, unload, pile or pallet
and see whether they tally. The amount paid
by respondent company to the alleged
independent contractor considers no business
expenses or capital outlay of the latter. Nor is
the profit or gain of the alleged contractor in
the conduct of its business provided for as an
amount over and above the workers' wages.
Control
Firmly establishing respondent SMC's role as
employer is the control exercised by it over
the petitioners that is, control in the means
and methods/manner by which petitioners are
to go about their work, as well as in
disciplinary measures imposed by it.
Because of the nature of the petitioners' work
as cargadores or pahinantes, supervision as
to the means and manner of performing the
same is practically nil.
For, how many ways are there to load and
unload bottles and wooden shells? The mere
concern of both respondent SMC and the
alleged contractor is that the job of having the
bottles and wooden shells brought to and from
the warehouse be done.
More evident and pronounced is respondent
company's right to control in the discipline of
petitioners.
Documentary evidence presented by the
petitioners establish respondent SMC's right
to impose disciplinary measures for violations
or infractions of its rules and regulations as
well as its right to recommend transfers and
dismissals of the piece workers. The inter-
office memoranda submitted in evidence
prove the company's control over the
petitioners. That respondent SMC has the
power to recommend penalties or dismissal of
the piece workers, even as to Abner Bungay
who is alleged by SMC to be a representative
of the alleged labor contractor, is the strongest
indication of respondent company's right of
control over the petitioners as direct employer.
There is no evidence to show that the alleged
labor contractor had such right of control or
much less had been there to supervise or deal
with the petitioners.
ALIPIO R. RUGA, JOSE PARMA, ELADIO
CALDERON, LAURENTE BAUTU, JAIME
BARBIN, NICANOR FRANCISCO, PHILIP
CERVANTES and ELEUTERIO
BARBIN, petitioners,
vs.
NATIONAL LABOR RELATIONS
COMMISSION and DE GUZMAN
FISHING ENTERPRISES and/or
ARSENIO DE GUZMAN, respondents.
Facts:
petitioners were the fishermen-crew members
of 7/B Sandyman II, one of several fishing
vessels owned and operated by private
respondent De Guzman Fishing Enterprises
which is primarily engaged in the fishing
business with port and office at Camaligan,
Camarines Sur.
Petitioners rendered service aboard said
fishing vessel in various capacities, as follows:
Alipio Ruga and Jose Parma patron/pilot;
Eladio Calderon, chief engineer; Laurente
Bautu, second engineer; Jaime Barbin, master
fisherman; Nicanor Francisco, second
fisherman; Philip Cervantes and Eleuterio
Barbin, fishermen.
For services rendered in the conduct of
private respondent's regular business of
"trawl" fishing, petitioners were paid on
percentage commission basis in cash by one
Mrs. Pilar de Guzman, cashier of private
respondent.
1983 upon arrival at the fishing port,
petitioners were told by Jorge de Guzman,
president of private respondent, to proceed to
the police station at Camaligan, Camarines
Sur, for investigation on the report that they
sold some of their fish-catch at midsea to the
prejudice of private respondent. Petitioners
denied the charge claiming that the same was
a countermove to their having formed a labor
union and becoming members of Defender of
Industrial Agricultural Labor Organizations and
General Workers Union (DIALOGWU).
Petitioners individually filed their complaints
for illegal dismissal and non-payment of 13th
month pay, emergency cost of living
allowance and service incentive pay, with the
then Ministry (now Department) of Labor and
Employment
To stress that there is an employer-employee
relationship between them and private
respondent, petitioners invite attention to the
following:
 that they were directly hired by
private respondent through its
general manager, Arsenio de
Guzman, and its operations
manager, Conrado de Guzman;
 that, except for Laurente Bautu, they
had been employed by private
 respondent from 8 to 15 years in
various capacities;
 that private respondent, through its
operations manager, supervised
and controlled the conduct of their
fishing operations as to the fixing of
the schedule of the fishing trips, the
direction of the fishing vessel, the
volume or number of tubes of the
fish-catch the time to return to the
fishing port, which were
communicated to the patron/pilot by
radio (single side band);
 that they were not allowed to join
other outfits even the other vessels
owned by private respondent
without the permission of the
operations manager;
 that they were compensated on
percentage commission basis of the
gross sales of the fish-catch which
were delivered to them in cash by
private respondent's cashier, Mrs.
Pilar de Guzman; and
 that they have to follow company
policies, rules and regulations
imposed on them by private
respondent.
Issue:
WON there exist an EER?
Held: YES
We have consistently ruled that in determining
the existence of an employer-employee
relationship, the elements that are generally
considered are the following (a) the selection
and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal;
and (d) the employer's power to control
the employee with respect to the means
and methods by which the work is to be
accomplished.
From the four (4) elements mentioned, We
have generally relied on the so-called right-of-
control test 10 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. The test calls merely for the existence of
the right to control the manner of doing the
work, not the actual exercise of the right.
Control
 Matters dealing on the fixing of the
schedule of the fishing trip and the
time to return to the fishing port
were shown to be the prerogative of
private respondent.
 While performing the fishing
operations, petitioners received
instructions via a single-side band
radio from private respondent's
operations manager who called the
patron/pilot in the morning.
 They are told to report their
activities, their position, and the
number of tubes of fish-catch in one
day.
Clearly thus, the conduct of the fishing
operations was monitored by private
respondent thru the patron/pilot of 7/B
Sandyman II who is responsible for
disseminating the instructions to the crew
members.
Control Test/ Test to Determine the
Existence of EER (Different Job/Work)
G.R. No. 170087 August 31, 2006
ANGELINA FRANCISCO, Petitioner,
vs.
NATIONAL LABOR RELATIONS
COMMISSION, KASEI CORPORATION,
SEIICHIRO TAKAHASHI, TIMOTEO
ACEDO, DELFIN LIZA, IRENE
BALLESTEROS, TRINIDAD LIZA and
RAMON ESCUETA, Respondents.
YNARES-SANTIAGO, J .:
In 1995, petitioner was hired by Kasei
Corporation during its incorporation stage.
She was designated as Accountant and
Corporate Secretary. She was also
designated as Liaison Officer to the City of
Makati
Although she was designated as Corporate
Secretary, she was not entrusted with the
corporate documents; neither did she attend
any board meeting nor required to do so.
In 1996, petitioner was designated Acting
Manager for 5 yrs where she was assigned to
handle recruitment of all employees and
perform management administration
functions; represent the company in all
dealings with government agencies and to
administer all other matters pertaining to the
operation of Kasei Restaurant
In January 2001, petitioner was replaced by
Liza R. Fuentes as Manager. Petitioner
alleged that she was required to sign a
prepared resolution for her replacement but
she was assured that she would still be
connected with Kasei Corporation.
Kasei Corporation reduced her salary and was
not paid her mid-year bonus allegedly
because the company was not earning well
Petitioner requested for her salary but to no
avail. Instead she was informed that she was
no longer connected with the company.
Since she was no longer paid her salary,
petitioner did not report for work and filed an
action for constructive dismissal before the
labor arbiter.
Private respondents contention:
that petitioner is not an employee of Kasei
Corporation. that petitioner was hired in 1995
as one of its technical consultants and act
concurrently as Corporate Secretary. As
technical consultant, petitioner performed her
work at her own discretion without control and
supervision of Kasei Corporation. Petitioner
had no daily time record and she came to the
office any time she wanted. The company
never interfered with her work except that
from time to time, the management would ask
her opinion on matters relating to her
profession. Petitioner did not go through the
usual procedure of selection of employees,
but her services were engaged through a
Board Resolution designating her as technical
consultant. The money received by petitioner
from the corporation was her professional
fee , and that she was not one of those
reported to the BIR or SSS as one of the
company’s employees.

The Labor Arbiter found that petitioner was
illegally dismissed
the NLRC affirmed with modification the
Decision of the Labor Arbiter,
the Court of Appeals reversed the NLRC
decision
hence, the present recourse
ISSUE:
WON there was an employer-employee
relationship between petitioner and private
respondent Kasei Corporation
HELD:
YES. Petitioner is considered as an employee
of Kasei Corp
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.
However, in certain cases the control test is
not sufficient to give a complete picture of the
relationship between the parties
The better approach would therefore be to
adopt a two-tiered test involving: (1) the
putative employer’s power to control the
employee with respect to the means and
methods by which the work is to be
accomplished; and (2) the underlying
economic realities of the activity or
relationship.
The proper standard of economic dependence
is whether the worker is dependent on the
alleged employer for his continued
employment in that line of business.
Based on the foregoing, there can be no other
conclusion that petitioner is an employee of
respondent Kasei Corporation. She was
selected and engaged by 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.
The corporation constructively dismissed
petitioner when it reduced her salary by
P2,500 a month from January to September
2001. This amounts to an illegal termination of
employment, where the petitioner is entitled to
full backwages. Since the position of petitioner
as accountant is one of trust and confidence,
and under the principle of strained relations,
petitioner is further entitled to separation pay,
in lieu of reinstatement.
[G.R. No. 66394. February 5, 1990.]
PARADISE SAUNA, MASSAGE
CORPORATION AND JUANITO
UY, Plaintiff-Appellee, v. ALEJANDRO NG
AND THE INTERMEDIATE APPELLATE
COURT, Defendants-Appellants.
GUTIERREZ, JR., J.
the petitioners agreed to lease in favor of the
private respondent their business called
"Paradise Sauna and Massage Corporation"
located at E. Rodriguez, Sr. Avenue, Quezon
City and that they entered into a contract
whereby the latter shall have full control and
management of the said business
that as such lessee, the private respondent
assumed control and management of the
petitioner’s business on January 1, 1976,
hired and paid personnel to beef up its
operations and tried religiously to comply with
his obligations
that the petitioner refused to accept the rental
for January 1977 and asked the private
respondent to vacate and leave the premises
instead thereby terminating his services and
forfeiting his guarantee bond of sixteen
thousand pesos (P16,000.00); petitioners,
assisted by Metrocom soldiers, entered the
private respondent’s office and through
intimidations, forcibly ejected him from the
premises, assumed full control and
supervision of the business and put another
person in his place who immediately took
possession of all cash sales for the day; that
for having breached their contract, the private
respondent suffered damages in the amount
of not less than P100,000.00 representing
unrealized profits from the operation of the
business
the private respondent was refused entry and
there was a notice to all the employees in
front of the premises signed by the petitioners
to the effect that the private respondent’s
services had been terminated
the petitioners counter-alleged that the
petitioner corporation is the operator of the
sauna bath and massage establishment in
question, that petitioner Uy was the former
manager and administrator of the said
establishment; that petitioner Uy relinquished
his position as manager-administrator of the
said establishment in favor of the private
respondent; that private respondent’s
appointment as manager-administrator was
terminated for violations of the terms and
conditions of his appointment, namely, failure
to pay water and electric bills, failure to pay
the salaries of the employees of the petitioner
corporation, failure to supply the provisions
necessary for the conduct of the petitioners’
sauna and massage business, failure to
perform efficiently
the lower court rendered judgment in favor of
the private respondent declaring the letter-
contract, as a contract of lease and not a
contract of employment;
On appeal, the then Intermediate Appellate
Court, affirmed in toto the decision of the trial
court
Hence, this petition
ISSUE:
WON there is employer - employee
relationship
HELD:
NO. The claim of the petitioners that
respondent Ng is their manager-administrator
is untenable since it fails to pass the control
test pertinent to the existence of an employer-
employee relationship.
The control test asks 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 methods
by which the said work is to be accomplished.
Such control by the petitioners over
respondent Ng is lacking. Exhibit A is in the
nature of a lease contract under Art. 1643 of
the Civil Code
We find no reason to disturb the findings of
the two courts below that the disputed
contract is a lease contract
(1) The respondent paid the petitioners a
fixed P8,000.00 monthly even when
the business suffers a loss.
(2) The monthly receipts received by the
petitioners from Alejandro Ng state
that they were given for rentals from
January to October 1976
(3) The respondent was responsible for
all licenses, permits, utilities and
services, including the installation
and repair of all equipment such as
airconditioning units. He had sole
control and management and did
not report to anybody.
the instant petition is DISMISSED. The term
of the lease having expired, the order to return
the massage clinic to the private respondent
is DELETED
G.R. No. 138051 June 10, 2004
JOSE Y. SONZA, petitioner,
vs.
ABS-CBN BROADCASTING
CORPORATION, respondent.
CARPIO, J.:
(MAHABA ITONG KASO TALAGA,
TIGNAN NYO MAN FULL TEXT)
In May 1994, respondent ABS-CBN Appeals rendered a Decision dismissing the
Broadcasting Corporation ("ABS-CBN") case
signed an Agreement with the Mel and Jay
Management and Development Corporation
("MJMDC"). ABS-CBN was represented by its Hence, this petition.
corporate officers while MJMDC was
represented by SONZA, as President and
General Manager, and Carmela Tiangco
ISSUE:
("TIANGCO"), as EVP and Treasurer.
Referred to in the Agreement as "AGENT," WON there exist a employer - employee
MJMDC agreed to provide SONZA’s services relationship
exclusively to ABS-CBN as talent for radio
and television
ABS-CBN agreed to pay for SONZA’s HELD:
services a monthly talent fee of ₱310,000 for
NO. He is not to be considered as employee.
the first year and ₱317,000 for the second
and third year of the Agreement
SONZA wrote a letter to ABS-CBN’s The existence of an employer-employee
President, Eugenio Lopez III informing the relationship is a question of fact. It must be
latter that Jose Y. Sonza irrevocably resigned supported by substantial evidence.
and is waiving and renouncing recovery of
the remaining amount stipulated
SONZA filed a complaint against ABS-CBN Case law has consistently held that the
before the Department of Labor and elements of an employer-employee
Employment, National Capital Region in relationship are: (a) the selection and
Quezon City SONZA complained that ABS- engagement of the employee; (b) the payment
CBN did not pay his salaries, separation pay, of wages; (c) the power of dismissal; and (d)
the employer’s power to control the employee
service incentive leave pay, 13th month pay,
on the means and methods by which the work
signing bonus, travel allowance and amounts
is accomplished.18 The last element, the so-
due under the Employees Stock Option Plan
called "control test", is the most important
("ESOP")
element.
ABS-CBN filed a Motion to Dismiss on the
ground that no employer-employee
relationship existed between the parties
A. Selection and Engagement of
Labor Arbiter rendered his Decision dated 8 Employee
July 1997 dismissing the complaint for lack of
Independent contractors often present
jurisdiction - - - that complainant was
themselves to possess unique skills, expertise
engaged by respondent by reason of his
or talent to distinguish them from ordinary
peculiar skills and talent as a TV host
employees. The specific selection and hiring
and a radio broadcaster. Unlike an
of SONZA, because of his unique skills,
ordinary employee, he was free to
talent and celebrity status not possessed
perform the services he undertook to
by ordinary employees, is a circumstance
render in accordance with his own style
indicative, but not conclusive, of an
independent contractual relationship.
SONZA appealed to the NLRC. On 24
February 1998, the NLRC rendered a
B. Payment of Wages
Decision affirming the Labor Arbiter’s
decision. All the talent fees and benefits paid to SONZA
were the result of negotiations that led to the
Agreement. If SONZA were ABS-CBN’s
employee, there would be no need for the
SONZA filed a special civil action for certiorari
parties to stipulate on benefits such as "SSS,
before the Court of Appeals. the Court of
Medicare, x x x and 13th month pay"20 which
the law automatically incorporates into every
employer-employee contract.21Whatever
benefits SONZA enjoyed arose from contract
and not because of an employer-employee
relationship. SONZA’s talent fees, amounting
to ₱317,000 monthly in the second and third
year, are so huge and out of the ordinary that
they indicate more an independent contractual
relationship rather than an employer-
employee relationship. The power to bargain
talent fees way above the salary scales of
ordinary employees is a circumstance
indicative, but not conclusive, of an
independent contractual relationship.
C. Power of Dismissal
SONZA failed to show that ABS-CBN could
terminate his services on grounds other than
breach of contract. Even if it suffered severe
business losses, ABS-CBN could not retrench
SONZA because ABS-CBN remained
obligated to pay SONZA’s talent fees during
the life of the Agreement. This circumstance
indicates an independent contractual
relationship between SONZA and ABS-CBN.
D. Power of Control
The control test is the most important test
our courts apply in distinguishing an employee
from an independent contractor.29 This test is
based on the extent of control the hirer
exercises over a worker. The greater the
supervision and control the hirer exercises,
the more likely the worker is deemed an
employee.
ABS-CBN engaged SONZA’s services
specifically to co-host the "Mel & Jay"
programs. ABS-CBN did not assign any other
work to SONZA. To perform his work, SONZA
only needed his skills and talent. How SONZA
delivered his lines, appeared on television,
and sounded on radio were outside ABS-
CBN’s control. SONZA did not have to render
eight hours of work per day. The Agreement
required SONZA to attend only rehearsals and
tapings of the shows, as well as pre- and
post-production staff meetings. 31 ABS-CBN
could not dictate the contents of SONZA’s
script. ABS-CBN merely reserved the right to
modify the program format and airtime
schedule "for more effective
programming."34 ABS-CBN’s sole concern
was the quality of the shows and their
standing in the ratings. Clearly, ABS-CBN did
not exercise control over the means and
methods of performance of SONZA’s work.
ABS-CBN’s right not to broadcast SONZA’s
show, burdened as it was by the obligation to
continue paying in full SONZA’s talent fees,
did not amount to control over the means and
methods of the performance of SONZA’s
work. ABS-CBN could not terminate or
discipline SONZA even if the means and
methods of performance of his work - how he
delivered his lines and appeared on television
- did not meet ABS-CBN’s approval.
The Agreement stipulates that SONZA shall
abide with the rules and standards of
performance "covering talents"41 of ABS-
CBN. The Agreement does not require
SONZA to comply with the rules and
standards of performance prescribed for
employees of ABS-CBN. The KBP code
applies to broadcasters, not to employees of
radio and television stations. Broadcasters are
not necessarily employees of radio and
television stations. In this case, SONZA failed
to show that these rules controlled his
performance. We find that these general rules
are merely guidelines towards the
achievement of the mutually desired result,
which are top-rating television and radio
programs that comply with standards of the
industry.
Being an exclusive talent does not by itself
mean that SONZA is an employee of ABS-
CBN. Even an independent contractor can
validly provide his services exclusively to the
hiring party. In the broadcast industry,
exclusivity is not necessarily the same as
control. The hiring of exclusive talents is a
widespread and accepted practice in the
entertainment industry.46 This practice is not
designed to control the means and methods
of work of the talent, but simply to protect the
investment of the broadcast station.
WHEREFORE, we DENY the petition
PANDAGDAG LANG IN CASE ITANONG:
The right to life and livelihood guarantees this
freedom to contract as independent
contractors. The right of labor to security of
tenure cannot operate to deprive an individual,
possessed with special skills, expertise and
talent, of his right to contract as an
independent contractor.An individual like an
artist or talent has a right to render his
services without any one controlling the
means and methods by which he performs his
art or craft. This Court will not interpret the
right of labor to security of tenure to compel
artists and talents to render their services only
as employees. If radio and television program
hosts can render their services only as
employees, the station owners and managers
can dictate to the radio and television hosts
what they say in their shows. This is not
conducive to freedom of the press.
G.R. No. 155207 August 13, 2008
WILHELMINA S. OROZCO, petitioner,
vs.
THE FIFTH DIVISION OF THE
HONORABLE COURT OF APPEALS,
PHILIPPINE DAILY INQUIRER, and
LETICIA JIMENEZ
MAGSANOC, respondents.
NACHURA, J. :
In March 1990, PDI engaged the services of
petitioner to write a weekly column for its
Lifestyle section. She received compensation
of P250.00 – later increased to P300.00 – for
every column published
On November 7, 1992, petitioner’s column
appeared in the PDI for the last time.
Petitioner claims that her then editor, Ms. Lita
T. Logarta,6 told her that respondent Leticia
Jimenez Magsanoc, PDI Editor in Chief,
wanted to stop publishing her column for no
reason at all and because there were a;ready
too many columnists.
On the other hand, PDI claims that they
agreed to cut down the number of columnists
by keeping only those whose columns were
well-written, with regular feedback and
following. In their judgment, petitioner’s
column failed to improve, continued to be
superficially and poorly written, and failed to
meet the high standards of the newspaper.
Hence, they decided to terminate petitioner’s
column.
Aggrieved by the newspaper’s action,
petitioner filed a complaint for illegal
dismissal, backwages, moral and exemplary
damages, and other money claims
Petitioner argues that several factors exist to
prove that respondents exercised control over
her and her work, namely:
a. As to the Contents of her Column---
The PETITIONER had to insure that
the contents of her column hewed
closely to the objectives of its
Lifestyle Section ;
b. As to Time Control--- The
PETITIONER, as a columnist, had
to observe the deadlines of the
newspaper for her articles to be
published;
c. As to Control of Space---– The
PETITIONER was told to submit
only two or three pages of article for
the column, (sic) "Feminist
Reflections" per week.;
d. As to Discipline---The PETITIONER
was disciplined to submit her
articles on highly relevant and
significant issues on time by the
PRIVATE RESPONDENTS who
have a say on whether the topics
belong to those considered as
highly relevant and significant
ISSUE:
WON a newspaper columnist is an employee
of the newspaper which publishes the column.
HELD:
NO.
It is true that petitioner herself admitted that
she "was not, and [had] never been
considered respondent’s employee because
the terms of works were arbitrarily decided
upon by the respondent."
This Court has constantly adhered to the
"four-fold test" to determine whether there
exists an employer-employee relationship
between parties.24 The four elements of an
employment relationship are: (a) the selection
and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal;
and (d) the employer’s power to control the
employee’s conduct.
Petitioner has misconstrued the "control test,"
as did the Labor Arbiter and the NLRC.
Not all rules imposed by the hiring party
on the hired party indicate that the latter
is an employee of the former. Rules
which serve as general
guidelines towards the achievement of
the mutually desired result are not
indicative of the power of control .. The
main determinant therefore is whether the
rules set by the employer are meant to control
not just the results of the work but also the
means and method to be used by the hired
party in order to achieve such results.
Petitioner has not shown that PDI, acting
through its editors, dictated how she was to
write or produce her articles each week.
A careful examination reveals that the factors
enumerated by the petitioner are inherent
conditions in running a newspaper. In other
words, the so-called control as to time, space,
and discipline are dictated by the very nature
of the newspaper business itself
The perceived constraint on petitioner’s
column was dictated by her own choice of her
column’s perspective. The column title
"Feminist Reflections" was of her own
choosing, as she herself admitted, since she
had been known as a feminist writer.
The newspaper’s power to approve or reject
publication of any specific article she wrote for
her column cannot be the control
contemplated in the "control test," as it is but
logical that one who commissions another to
do a piece of work should have the right to
accept or reject the product.
Aside from the control test, this Court has also
used the economic reality test. Petitioner’s
main occupation is not as a columnist for
respondent but as a women’s rights advocate
working in various women’s
organizations.39 Likewise, she herself admits
that she also contributes articles to other
publications.40 Thus, it cannot be said that
petitioner was dependent on respondent PDI
for her continued employment in respondent’s
line of business.
The inevitable conclusion is that petitioner
was not respondent PDI’s employee but an
independent contractor, engaged to do
independent work.
The instant case presents a parallel to Sonza.
Petitioner was engaged as a columnist for her
talent, skill, experience, and her unique
viewpoint as a feminist advocate. How she
utilized all these in writing her column was not
subject to dictation by respondent
Considering that respondent PDI was not
petitioner’s employer, it cannot be held guilty
of illegal dismissal.
WHEREFORE, the foregoing premises
considered, the Petition is DISMISSED
G.R. No. 164652 June 8, 2007
THELMA DUMPIT-MURILLO, petitioner,
vs.
COURT OF APPEALS, ASSOCIATED
BROADCASTING COMPANY, JOSE
JAVIER AND EDWARD TAN,respondents.
QUISUMBING, J.:
1995,under Talent Contract No. NT95-
1805,4 private respondent Associated
Broadcasting Company (ABC) hired petitioner
Thelma Dumpit-Murillo as a newscaster and
co-anchor for Balitang-Balita, an early evening
news program. In addition, petitioner’s
services were engaged for the program "Live
on Five." The contract expired after 4 years
and petitioner informed Mr. Jose Javier, Vice
President for News and Public Affairs of ABC
that she was still interested in renewing her
contract subject to a salary increase.
Thereafter, petitioner stopped reporting for
work and sent a letter stating that the non-
response of ABC to her request will be
deemed as constructive dismissal of her
services.
A month later, petitioner sent a demand
letter7 to ABC, demanding: (a) reinstatement;
b) payment of unpaid wages for services; c)
payment of 13th month pay,
vacation/sick/service incentive leaves and
other monetary benefits. ABC replied that a
check covering petitioner’s talent fees had
been processed and prepared, but that the
other claims of petitioner had no basis
petitioner filed a complaint8 against ABC, Mr.
Javier and Mr. Edward Tan, for illegal
constructive dismissal, etc. the Labor Arbiter
dismissed the complaint
On appeal, the NLRC reversed the Labor
Arbiter--- that an employer-employee
relationship existed between petitioner and
ABC

After its motion for reconsideration was
denied, ABC elevated the case to the Court of
Appeals. the appellate court ruled that the
NLRC committed grave abuse of discretion,
and reversed the decision of the NLRC---that
petitioner should not be allowed to renege
from the stipulations she had voluntarily and
knowingly executed by invoking the security of
tenure under the Labor Code
Aggrieved, petitioner now comes to this Court
on a petition for review
ISSUE:
WON an employer-employee relationship was
created when the private respondents started
to merely renew the contracts repeatedly
fifteen times or for four consecutive years.
HELD:
YES. Petitioner was a regular employee
under contemplation of law. The practice of
having fixed-term contracts in the industry
does not automatically make all talent
contracts valid and compliant with labor law.
The assertion that a talent contract exists
does not necessarily prevent a regular
employment status.
Further, the Sonza case is not applicable.
In Sonza, the television station did not instruct
Sonza how to perform his job. The duties of
petitioner as enumerated in her
employment contract indicate that ABC
had control over the work of petitioner.
Aside from control, ABC also dictated the
work assignments and payment of
petitioner’s wages. ABC also had power
to dismiss her. All these being present,
clearly, there existed an employment
relationship between petitioner and ABC.
the law provides for two kinds of employees,
namely: (1) those who are engaged to
perform activities which are usually necessary
or desirable in the usual business or trade of
the employer; and (2) those who have
rendered at least one year of service, whether
continuous or broken, with respect to the
activity in which they are employed.30 In other
words, regular status arises from either the
nature of work of the employee or the duration
of his employment.
[T]he primary standard for determining regular
employment is the reasonable connection
between the particular activity performed by
the employee vis-à-vis the usual trade or
business of the employer.
In our view, the requisites for regularity of
employment have been met in the instant
case. petitioner’s work was necessary or
desirable in the usual business or trade of the
employer which includes, as a pre-condition
for its enfranchisement, its participation in the
government’s news and public information
dissemination. In addition, her work was
continuous for a period of four years. This
repeated engagement under contract of hire is
indicative of the necessity and desirability of
the petitioner’s work in private respondent
ABC’s business.
private respondents’ practice of repeatedly
extending petitioner’s 3-month contract for
four years is a circumvention of the acquisition
of regular status. Hence, there was no valid
fixed-term employment between petitioner
and private respondents --- fixed term
employment contracts are valid but when the
circumstances of a case show that the periods
were imposed to block the acquisition of
security of tenure, they should be struck down
for being contrary to law, morals, good
customs, public order or public policy
WHEREFORE, the challenged Decision of
the Court of Appeals which held that the
petitioner was a fixed-term employee, are
REVERSED and SET ASIDE
G.R. No. 183810 January 21,
2010
FARLEY FULACHE, MANOLO
JABONERO, DAVID CASTILLO,
JEFFREY LAGUNZAD, MAGDALENA
MALIG-ON BIGNO, FRANCISCO CABAS,
JR., HARVEY PONCE and ALAN C.
ALMENDRAS, Petitioners,
vs.
ABS-CBN BROADCASTING
CORPORATION, Respondent.
BRION, J.:
FACTS:
Fulache and Castillo were
drivers/cameramen; Atinen, Lagunzad and
Jabonero were drivers; Ponce and Almendras
were cameramen/editors; Bigno was a
PA/Teleprompter Operator-Editing, and Cabas
was a VTR man/editor (Petitioners)
filed two separate complaints for
regularization, unfair labor practice and
several money claims (regularization case)
against ABS-CBN Broadcasting Corporation-
Cebu (ABS-CBN)
The petitioners in this case are questioning
the CBA executed between ABS-CBN and the
ABS-CBN Rank-and-File Employees Union
(Union) because under such agreement, they
are only considered as temporary and not
regular employees. The petitioners claimed
that they should be recognized as regular
employees of ABS-CBN because they had
already rendered more than a year of service
in the company and, therefore, entitled to the
benefits of a regular employee.
ABS-CBN contracts on a case-to-case basis
the services of persons who possess the
necessary talent, skills to meet the
requirements of its programs and productions.
These contracted persons are called "talents"
and are considered independent contractors.
Instead of salaries, ABS-CBN pointed out that
talents are paid a pre-arranged consideration
called "talent fee" taken from the budget of a
particular program and subject to a ten
percent (10%) withholding tax. Talents do not
undergo probation. Their services are
engaged for a specific program or production,
or a segment thereof. Their contracts are
terminated once the program, production or
segment is completed.
ABS-CBN alleged that the petitioners’
services were contracted on various dates by
its Cebu station as independent
contractors/off camera talents, and they
were not entitled to regularization in
these capacities.
LABOR ARBITER (LA) : petitioners were
regular employees of ABS-CBN, not
independent contractors, and are entitled to
the benefits and privileges of regular
employees
ABS-CBN appealed to NLRC mainly
contending that the petitioners were
independent contractors, not regular
employees.
While the appeal of the regularization case
was pending, ABS-CBN dismissed Fulache,
Jabonero, Castillo, Lagunzad and Atinen (all
drivers) for their refusal to sign up contracts of
employment with service contractor Able
Services, an agency. The four drivers and
Atinen responded by filing a complaint
for illegal dismissal.
LA: dismissed due to redundancy, an
authorized cause under the law.
NLRC: on the regularization issue, the NLRC
stood by the ruling that the petitioners were
regular employees entitled to the benefits and
privileges of regular employees. On the illegal
dismissal case, the petitioners, while
recognized as regular employees, were
declared dismissed due to redundancy.
CA affirmed NLRC’s resolution.
ISSUE:
W/N Petitioners were regular employees and
that they were illegally dismissed
HELD:
They are regular employees.
The labor arbiter’s decision – affirmed all the
way up to the CA level – ruled against ABS-
CBN’s submission that they are independent
contractors. Now, as regular employees, are
they entitled to the CBA benefits?
YES.
As regular employees, the petitioners fall
within the coverage of the bargaining unit and
are therefore entitled to CBA benefits as a
matter of law and contract.
Section 1. APPROPRIATE BARGAINING
UNIT. – The parties agree that the appropriate
bargaining unit shall be regular rank-and-
file employees of ABS-CBN
BROADCASTING CORPORATION but shall
not include:
a) Personnel classified as Supervisor and
Confidential employees;
b) Personnel who are on “casual” or
“probationary” status as defined in Section 2
hereof;
c) Personnel who are on “contract” status or
who are paid for specified units of work such
as writer-producers, talent-artists, and
singers.
The inclusion or exclusion of new job
classifications into the bargaining unit shall be
subject of discussion between the COMPANY
and the UNION.
Under these terms, the petitioners are
members of the appropriate bargaining unit
because they are regular rank-and-file
employees and do not belong to any of the
excluded categories. Specifically, nothing in
the records shows that they are supervisory or
confidential employees; neither are they
casual nor probationary employees.
Thus, as regular rank-and-file employees,
they fall within CBA coverage under the CBA’s
express terms and are entitled to its benefits.
AS TO THE ILLEGAL DISMISSAL
Their dismissal was not only unjust and in bad
faith as the above discussions abundantly
show. The bad faith in ABS-CBN’s move
toward its illegitimate goal was not even
hidden; it dismissed the petitioners – already
recognized as regular employees – for
refusing to sign up with its service
contractor. Thus, from every perspective, the
petitioners were illegally dismissed.
By law, illegally dismissed employees are
entitled to reinstatement without loss of
seniority rights and other privileges and to full
backwages, inclusive of allowances, and to
other benefits or their monetary equivalent
from the time their compensation was withheld
from them
G.R. No. 184885 March 7, 2012
ERNESTO G. YMBONG, Petitioner,
vs.
ABS-CBN BROADCASTING
CORPORATION, VENERANDA SY AND
DANTE LUZON, Respondents.
VILLARAMA, JR., J.:
Petitioner Ernesto G. Ymbong started working
for ABS-CBN Broadcasting Corporation (ABS-
CBN) in 1993 at its regional station in Cebu as
a television talent, co-anchoring Hoy
Gising and TV Patrol Cebu. His stint in ABS-
CBN later extended to radio when ABS-CBN
Cebu launched its AM station DYAB in 1995
where he worked as drama and voice talent,
spinner, scriptwriter and public affairs program
anchor.
Like Ymbong, Leandro Patalinghug also
worked for ABS-CBN Cebu. Starting 1995, he
worked as talent, director and scriptwriter for
various radio programs aired over DYAB.
On January 1, 1996, the ABS-CBN Head
Office in Manila issued Policy No. HR-ER-016
or the “Policy on Employees Seeking Public
Office.” The pertinent portions read:
1. Any employee who intends to
run for any public office position, must
file his/her letter of resignation, at least
thirty (30) days prior to the official filing of the
certificate of candidacy either for national or
local election.
xxxx
3. Further, any employee who intends
to join a political group/party or even with
no political affiliation but who intends to
openly and aggressively campaign for a
candidate or group of candidates (e.g.
publicly speaking/endorsing candidate,
recruiting campaign workers, etc.) must file a
request for leave of absence subject to
management’s approval. For this particular
reason, the employee should file the leave
request at least thirty (30) days prior to the
start of the planned leave period.
Because of the impending May 1998 elections
and based on his immediate recollection of
the policy at that time, Dante Luzon, Assistant
Station Manager of DYAB issued the following
memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company
policy, any employee/talent who wants to
run for any position in the coming
election will have to file a leave of
absence the moment he/she files his/her
certificate of candidacy.
The services rendered by the concerned
employee/talent to this company will then be
temporarily suspended for the entire
campaign/election period.
For strict compliance.
After the issuance of the March 25,
1998 Memorandum, Ymbong got in touch
with Luzon. Luzon claims that Ymbong
approached him and told him that he would
leave radio for a couple of months because he
will campaign for the administration ticket. It
was only after the elections that they found
out that Ymbong actually ran for public office
himself at the eleventh hour. Ymbong, on the
other hand, claims that in accordance with the
March 25, 1998 Memorandum, he informed
Luzon through a letter that he would take a
few months leave of absence from March 8,
1998 to May 18, 1998 since he was running
for councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug
approached Luzon and advised him that he
will run as councilor for
Naga, Cebu. According to Luzon, he clarified
to Patalinghug that he will be considered
resigned and not just on leave once he files a
certificate of candidacy.
Later, Ymbong and Patalinghug both tried to
come back to ABS-CBN Cebu. According
to Luzon, he informed them that they cannot
work there anymore because of company
policy. This was stressed even in subsequent
meetings and they were told that the company
was not allowing any exceptions. ABS-CBN,
however, agreed out of pure liberality to give
them a chance to wind up their participation in
the radio drama, Nagbabagang Langit, since it
was rating well and to avoid an abrupt
ending. The agreed winding-up, however,
dragged on for so long prompting Luzon to
issue to Ymbong the memorandum dated
September 14, 1998 automatically terminating
them.
ISSUE:
1. Whether Policy No. HR-ER-016 is valid
2. Whether the March 25, 1998 Memorandum
issued by Luzonsuperseded Policy No. HR-
ER-016
3. Whether Ymbong, by seeking an elective
post, is deemed to have resigned and not
dismissed by ABS-CBN.
HELD:
1. ABS-CBN had a valid justification for
Policy No. HR-ER-016. Its rationale is
embodied in the policy itself, to wit:
ABS-CBN BROADCASTING
CORPORATION strongly believes that it is to
the best interest of the company to
continuously remain apolitical. While it
encourages and supports its employees
to have greater political awareness and
for them to exercise their right to
suffrage, the company, however, prefers
to remain politically independent and
unattached to any political individual or
entity.
Therefore, employees who [intend] to run
for public office or accept political
appointment should resign from their
positions, in order to protect the company
from any public misconceptions. To
preserve its objectivity, neutrality and
credibility, the company reiterates the
following policy guidelines for strict
implementation.
We have consistently held that so long as a
company’s management prerogatives are
exercised in good faith for the advancement of
the employer’s interest and not for the
purpose of defeating or circumventing the
rights of the employees under special laws or
under valid agreements, this Court will uphold
them. In the instant case, ABS-CBN validly
justified the implementation of Policy No. HR-
ER-016. It is well within its rights to ensure
that it maintains its objectivity and credibility
and freeing itself from any appearance of
impartiality so that the confidence of the
viewing and listening public in it will not be in
any way eroded. Even as the law is solicitous
of the welfare of the employees, it must also
protect the right of an employer to exercise
what are clearly management
prerogatives. The free will of management to
conduct its own business affairs to achieve its
purpose cannot be denied.
It is worth noting that such exercise of
management prerogative has earned a stamp
of approval from no less than our Congress
itself when on February 12, 2001, it enacted
Republic Act No. 9006, otherwise known as
the “Fair Election Act.” Section 6.6 thereof
reads:
6.6. Any mass media columnist,
commentator, announcer, reporter, on-air
correspondent or personality who is a
candidate for any elective public office or
is a campaign volunteer for or employed
or retained in any capacity by any
candidate or political party shall be
deemed resigned, if so required by their
employer, or shall take a leave of absence
from his/her work as such during the
campaign period: Provided, That any media
practitioner who is an official of a political
party or a member of the campaign staff of a
candidate or political party shall not use
his/her time or space to favor any candidate or
political party. [Emphasis and underscoring
supplied.]
2. The CA correctly ruled that
though Luzon, as Assistant Station Manager
for Radio of ABS-CBN, has policy-making
powers in relation to his principal task of
administering the network’s radio station in
the Cebu region, the exercise of such power
should be in accord with the general rules and
regulations imposed by the ABS-CBN Head
Office to its employees. Clearly, the March 25,
1998 Memorandum issued by Luzon which
only requires employees to go on leave if they
intend to run for any elective position is in
absolute contradiction with Policy No. HR-ER-
016 issued by the ABS-CBN Head Office in
Manila which requires the resignation, not
only the filing of a leave of absence, of any
employee who intends to run for public
office. Having been issued beyond the scope
of his authority, the March 25, 1998
Memorandum is therefore void and did not
supersede Policy No. HR-ER-016.
Also worth noting is that Luzon in his Sworn
Statement admitted the inaccuracy of his
recollection of the company policy when he
issued the March 25, 1998 Memorandum and
stated therein that upon double-checking of
the exact text of the policy statement and
subsequent confirmation with the ABS-CBN
Head Office in Manila, he learned that the
policy required resignation for those who will
actually run in elections because the company
wanted to maintain its independence. Since
the officer who himself issued the subject
memorandum acknowledged that it is not in
harmony with the Policy issued by the upper
management, there is no reason for it to be a
source of right for Ymbong.
3. As Policy No. HR-ER-016 is the
subsisting company policy and not Luzon’s
March 25, 1998 Memorandum, Ymbong is
deemed resigned when he ran for councilor.
We find no merit in Ymbong’s argument that
“[his] automatic termination x x x was a blatant
[disregard] of [his] right to due process” as he
was “never asked to explain why he did not
tender his resignation before he ran for public
office as mandated by [the subject company
policy].” Ymbong’s overt act of running for
councilor of Lapu-Lapu City is tantamount to
resignation on his part. He was separated
from ABS-CBN not because he was dismissed
but because he resigned. Since there was no
termination to speak of, the requirement of
due process in dismissal cases cannot be
applied to Ymbong. Thus, ABS-CBN is not
duty-bound to ask him to explain why he did
not tender his resignation before he ran for
public office as mandated by the subject
company policy.
Petition denied money claims amounting toP203,726.30. MR
denied; Appeal with the DOLE Secretary,
dismissed the appeal on the ground that
G.R. No. 179652 March 6, 2012 petitioner did not post a cash or surety bond
and instead submitted a Deed of Assignment
PEOPLE'S BROADCASTING SERVICE of Bank Deposit.
(BOMBO RADYO PHILS.,
INC.), Petitioner, APPEAL WITH THE CA: claiming that it was
vs. denied due process when the DOLE
THE SECRETARY OF THE Secretary disregarded the evidence it
DEPARTMENT OF LABOR AND presented and failed to give it the opportunity
EMPLOYMENT, THE REGIONAL to refute the claims of respondent. Petitioner
DIRECTOR, DOLE REGION VII, and maintained that there is no employer-
JANDELEON JUEZAN, Respondents. employee relationship had ever existed
between it and respondent because it was the
VELASCO, JR., J.: drama directors and producers who paid,
supervised and disciplined respondent. It also
FACTS:
added that the case was beyond the
The petition traces its origins to a complaint jurisdiction of the DOLE and should have
filed by Jandeleon Juezan (respondent) been considered by the labor arbiter because
against People’s Broadcasting Service, Inc. respondent’s claim exceeded P5,000.00. CA
(Bombo Radyo Phils., Inc) (petitioner) for denied.
illegal deduction, non-payment of service
WITH THE SC: petitioner argues that the
incentive leave, 13th month pay, premium pay
National Labor Relations Commission
for holiday and rest day and illegal diminution
(NLRC), and not the DOLE Secretary, has
of benefits, delayed payment of wages and
jurisdiction over respondent’s claim, in view of
non-coverage of SSS, PAG-IBIG and
Articles 217 and 128 of the Labor Code.
Philhealth (non-diminution of benefits in the
amount allegedly 6K) before the RESPONDENT’S POSITION: respondent
Department of Labor and Employment posits that the Court of Appeals did not abuse
(DOLE) Regional Office No. VII, Cebu its discretion. He invokes Republic Act No.
City.2 On the basis of the complaint, the 7730, which “removes the jurisdiction of the
DOLE conducted a plant level inspection on Secretary of Labor and Employment or his
23 September 2003. Labor Inspector wrote duly authorized representatives, from the
under the heading effects of the restrictive provisions of Article
“Findings/Recommendations” “non-diminution 129 and 217 of the Labor Code, regarding the
of benefits” and “Note: Respondent deny confinement of jurisdiction based on the
employer-employee relationship with the amount of claims.”; and wrong mode of
complainant- see Notice of Inspection results.” appeal.
PETITIONER’S POSITION: Management ISSUE: WON the Secretary of Labor have
representative informed that complainant is a the power to determine the existence of an
drama talent hired on a per drama ” employer-employee relationship.
participation basis” hence no employer-
HELD: No
employeeship [sic] existed between them. As
proof of this, management presented To resolve this pivotal issue, one must look
photocopies of cash vouchers, billing into the extent of the visitorial and
statement, employments of specific enforcement power of the DOLE found in
undertaking (a contract between the talent Article 128 (b) of the Labor Code, as amended
director & the complainant), summary of by Republic Act 7730. It reads:
billing of drama production etc. They (mgt.)
has [sic] not control of the talent if he ventures Article 128 (b) Notwithstanding the provisions
into another contract w/ other broadcasting of Articles 129 and 217 of this Code to the
industries. contrary, and in cases where the
relationship of employer-employee still
RULING OF DOLE REGIONAL exists, the Secretary of Labor and
DIRECTOR: respondent is an employee of Employment or his duly authorized
petitioner, and that the former is entitled to his representatives shall have the power to issue
compliance orders to give effect to the labor
standards provisions of this Code and other
labor legislation based on the findings of labor
employment and enforcement officers or
industrial safety engineers made in the course
of inspection xxx
The provision is quite explicit that the
visitorial and enforcement power of the
DOLE comes into play only “in cases
when the relationship of employer-
employee still exists.” Of course, a person’s
entitlement to labor standard benefits under
the labor laws presupposes the existence of
employer-employee relationship in the first
place.The clause signifies that the employer-
employee relationship must have existed even
before the emergence of the
controversy. Necessarily, the DOLE’s
power does not apply in two instances,
namely: (a) where the employer-
employee relationship has ceased; and
(b) where no such relationship has ever
existed.
The first situation is categorically covered by
Sec. 3, Rule 11 of the Rules on the
Disposition of Labor Standards
Cases15 issued by the DOLE Secretary. It
reads:
Rule II MONEY CLAIMS ARISING FROM
COMPLAINT/ROUTINE INSPECTION
Sec. 3. Complaints where no employer-
employee relationship actually exists. Where
employer-employee relationship no longer
exists by reason of the fact that it has already
been severed, claims for payment of
monetary benefits fall within the exclusive and
original jurisdiction of the labor
arbiters. Accordingly, if on the face of the
complaint, it can be ascertained that
employer-employee relationship no
longer exists, the case, whether
accompanied by an allegation of illegal
dismissal, shall immediately be endorsed
by the Regional Director to the
appropriate branch of the National Labor
Relations Commission (NLRC).
Clearly the law accords a prerogative to the
NLRC over the claim when the employer-
employee relationship has terminated or such
relationship has not arisen at all. The reason
is obvious. In the second situation especially,
the existence of an employer-employee
relationship is a matter which is not easily
determinable from an ordinary inspection,
necessarily so, because the elements of such hence cannot be relied upon as proof of
a relationship are not verifiable from a mere employer-employee relationship.
ocular examination. The determination of
which should be comprehensive and Petition GRANTED.
intensive and therefore best left to the
specialized quasi-judicial body that is the
NLRC. G.R. No. 204944-45 December
3, 2014
It can be assumed that the DOLE in the
exercise of its visitorial and enforcement FUJI TELEVISION NETWORK,
power somehow has to make a determination INC., Petitioner,
of the existence of an employer-employee vs.
relationship. Such prerogatival determination, ARLENE S. ESPIRITU, Respondent.
however, cannot be coextensive with the
DECISION
visitorial and enforcement power itself.
Indeed, such determination is merely LEONEN, J.:
preliminary, incidental and collateral to the
DOLE’s primary function of enforcing labor FACTS:
standards provisions. The determination of
the existence of employer-employee
relationship is still primarily lodged with the Arlene Espiritu was engaged by Fuji TV as
NLRC. News correspondent/producer. Her
employment contract provided for a term of 1
Thus, before the DOLE may exercise its
year, renewed on a yearly basis with salary
powers under Article 128, two important
adjustments. A fixed-term contract
questions must be resolved: (1) Does the
employer-employee relationship still exist, or
alternatively, was there ever an employer-
employee relationship to speak of; and (2) Are Sometime in Jan. 2009, Arlene was diagnosed
there violations of the Labor Code or of any with Lung Cancer. Fuji in turn informed her
labor law? that the company will have a problem in
renewing her contract since it would be
A mere assertion of absence of employer- difficult for her to perform her job. She insisted
employee relationship does not deprive the that was still fit as certified by her attending
DOLE of jurisdiction over the claim under physician.
Article 128 of the Labor Code. At least a prima
facie showing of such absence of relationship, After several exchange of communication,
as in this case, is needed to preclude the Arlene and Fuji signed a non-renewal contract
DOLE from the exercise of its power. providing that her contract could no longer be
renewed and that it releases both parties from
Without a doubt, petitioner, since the any liabilities.
inception of this case had been
consistent in maintaining that respondent
is not its employee. Certainly, a
Arlene received her monthly salary between
preliminary determination, based on the
March- May 2009 amounting to $18,060, plus
evidence offered, and noted by the Labor
year-end bonus, mid-year bonus and
Inspector during the inspection as well as
separation pay. However, Arlene affixed her
submitted during the proceedings before
signature on the contract with the initials “U.P.”
the Regional Director puts in genuine
for under protest.
doubt the existence of employer-
employee relationship. From that point
on, the prudent recourse on the part of
the DOLE should have been to refer That very day, she filed a complaint for illegal
respondent to the NLRC for the proper dismissal before the Labor Arbiter which
dispensation of his claims. Furthermore, as dismissed the same citing Sonza v. ABS-CBN
discussed earlier, even the evidence relied on that Arlene was not Fuji’s employee but an
by the Regional Director in his order are mere independent contractor.
self-serving declarations of respondent, and
Appealed to NLRC, it reversed LA’s decision
and held that she was a regular employee.
On appeal to the Court of Appeals, it affirmed
NLRC’s decision with the modification that she
be reinstated. She was deemed a regular
employee because she was engaged to
perform a work that was necessary or
desirable in the business of Fuji and that she
was not contracted on account of any peculiar
ability, special skill or talent (Kaya hindi
nagaapply si Sonza. Dumpit Murillo applicable
case!). It likewise held that she was illegally
dismissed for failure to comply with due
process.
Hence, this petition
ISSUE:
Whether or not Arlene was a regular
employee who was illegally dismissed
HELD: YES
As to her employment status
Fuji alleges that Arlene was an independent
contractor. The Court ascertained the EER to
resolve this issue.
The Court of Appeals did not err when it relied
on the ruling in Dumpit-Murillo and affirmed
the ruling of the National Labor Relations
Commission finding that Arlene was a regular
employee. Arlene was hired by Fuji as a news
producer, but there was no showing that she
was hired because of unique skills that would
distinguish her from ordinary employees.
Neither was there any showing that she had a
celebrity status. Her monthly salary amounting
to US$1,900.00 appears tobe a substantial
sum, especially if compared to her salary
whenshe was still connected with GMA.
Fuji had the power to dismiss Arlene, as
provided for in paragraph 5 of her professional
employment contract.200 Her contract also
indicated that Fuji had control over her work
because she was required to work for eight
(8) hours from Monday to Friday, although on
flexible time.
On the power to control, Arlene alleged that
Fuji gave her instructions on what to
report.202 Even the mode of transportation in
carrying out her functions was controlled by
Fuji.
Thus, the Court of Appeals did not err when it
upheld the findings of the National Labor
Relations Commission that Arlene was not an
independent contractor.
Having established that an employer-
employee relationship existed between Fuji
and Arlene, the next questions for resolution
are the following: Did the Court of Appeals
correctly affirm the National Labor Relations
Commission that Arlene had become a
regular employee? Was the nature of Arlene’s
work necessary and desirable for Fuji’s
usual course of business?
YES. In determining whether an employment
should be considered regular or non-regular,
the applicable test is the reasonable
connection between the particular activity
performed by the employee in relation to the
usual business or trade of the employer. The
standard, supplied by the law itself, is whether
the work undertaken is necessary or desirable
in the usual business or trade of the employer,
a fact that can be assessed by looking into the
nature of the services rendered and its
relation to the general scheme under which
the business or trade is pursued in the usual
course. It is distinguished from a specific
undertaking that is divorced from the normal
activities required incarrying on the particular
business or trade.
The Court of Appeals affirmed the finding of
the National Labor Relations Commission that
the successive renewals of Arlene’s contract
indicated the necessity and desirability of her
work in the usual course of Fuji’s business.
Because of this, Arlene had become a regular
employee with the right to security of tenure.
Arlene’s contract indicating a fixed term did
not automatically mean that she could never
be a regular employee. This is precisely what
Article 280 seeks to avoid. The ruling in Brent
remains as the exception rather than the
general rule.
Further, an employee can be a regular
employee with a fixed-term contract. The law
does not preclude the possibility that a regular
employee may opt to have a fixed-term
contract for valid reasons. This was
recognized in Brent: For as long as it was the
employee who requested, or bargained, that
the contract have a "definite date of
termination," or that the fixed-term contract be
freely entered into by the employer and the
employee, then the validity of the fixed-term
contract will be upheld.
Hence, Arlene is a Regular Employee. But
was she illegally dismissed? YES
We cannot subscribe to Fuji’s assertion that
Espiritu’s contract merely expired and that she
voluntarily agreed not to renew the same.
Even a cursory perusal of the subject Non-
Renewal Contract readily shows that the
same was signed by Espiritu under protest.
As a regular employee, Arlene was entitled to
security of tenure and could be dismissed only
for just or authorized causes and after the
observance of due process.
There is no evidence showing that Arlene was
accorded due process. After informing her
employer of her lung cancer, she was not
given the chance to present medical
certificates. Fuji immediately concluded that
Arlene could no longer perform her duties
because of chemotherapy. It did not ask her
how her condition would affect her work.
Neither did it suggest for her to take a leave,
even though she was entitled to sick leaves.
Worse, it did not present any certificate from a
competent public health authority. What Fuji
did was to inform her thather contract would
no longer be renewed, and when she did not
agree, her salary was withheld. Thus, the
Court of Appeals correctly upheld the finding
of the National Labor Relations Commission
that for failure of Fuji to comply with due
process, Arlene was illegally dismissed.
PETITION DENIED
NELSON V. BEGINO, GENER DEL
VALLE, MONINA A VILA-LLORIN AND
MA. CRISTINA SUMAYAO, Petitioners,
vs. ABS-CBN CORPORATION
(FORMERLY, ABS-CBN BROADCASTING
CORPORATION) AND AMALIA
VILLAFUERTE, Respondents.
G.R. No. 199166, 20 April 2015.
PEREZ, J.:
Respondent ABS-CBN, through Respondent
Villafuerte, engaged the services of
Petitioners as cameramen, editors or
reporters for TV Broadcasting. Petitioners
signed regularly renewed Talent Contracts (3
months - 1 year) and Project Assignment
Forms which detailed the duration, budget
and daily technical requirements of a
particular project. Petitioners were tasked with
coverage of news items for subsequent daily
airings in Respondents’ TV Patrol Bicol
Program.
The Talent Contract has an exclusivity clause
and provides that nothing therein shall be
deemed or construed to establish an
employer-employee relationship between the
parties.
Petitioners filed against Respondents a
complaint for regularization before the NLRC's
Arbitration branch.
In support of their complaint, Petitioners
claimed that they worked under the direct
control of Respondent Villafuerte - they were
mandated to wear company IDs, they were
provided the necessary equipment, they were
informed about the news to be covered the
following day, and they were bound by the
company’s policy on attendance and
punctuality.
Respondents countered that, pursuant to their
Talent Contracts and Project Assignment
Forms, Petitioners were hired as talents to act
as reporters, editors and/or cameramen.
Respondents further claimed they never
imposed control as to how Petitioners
discharged their duties. At most, they were
briefed regarding the general requirements of
the project to be executed.
While the case was pending, Petitioners
contracts were terminated, prompting the
latter to file a second complaint for illegal
dismissal.
The Arbitration Branch ruled that Petitioners
were regular employees, and ordered
Respondents to reinstate the Petitioners.
The NLRC affirmed the ruling, but the CA
overturned the decision.
ISSUE: W/N Petitioners are regular
employees of Respondents.
RULING: Yes.
Of the criteria to determine whether there is
an employer-employee relationship, the so-
called "control test" is generally regarded as
the most crucial and determinative indicator of
the said relationship.
Under this test, an employer-employee
relationship is said to exist where the person
for whom the services are performed reserves
the right to control not only the end result but
also the manner and means utilized to
achieve the same.
Notwithstanding the nomenclature of their
Talent Contracts and/or Project Assignment
Forms and the terms and condition embodied
therein, petitioners are regular employees of
ABS-CBN.
As cameramen, editors and reporters, it
appears that Petitioners were subject to the
control and supervision of Respondents which
provided them with the equipment essential
for the discharge of their functions. The
exclusivity clause and prohibitions in their
Talent Contract were likewise indicative of
Respondents' control over them, however
obliquely worded.
Also,the presumption is that when the work
done is an integral part of the regular
business of the employer and when the
worker does not furnish an independent
business or professional service, such work is
a regular employment of such employee and
not an independent contractor.