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[1] Tan v. Lagrama
The first involves an element of control and supervision over the manner the work
is to be performed, while the second does not. If a piece worker is supervised,
GR No. 151228 | August 15, 2002 | Employees Paid by Results | Vica
there is an EER. However, such an employee is not entitled to service incentive
Petitioner: ROLANDO Y. TAN leave pay since he is paid a fixed amount for work done, regardless of the time he
Respondents: LEOVIGILDO LAGRAMA and THE HONORABLE COURT OF APPEALS spent in accomplishing such work.
Recit-Ready: Lagrama is a painter, making ad billboards and murals for the motion Application: Hence, even if there’s EER between Lagrama and Tan, the SC deleted
pictures shown at the Empress, Supreme, and Crown Theaters for more than 10 the service incentive leave pay awarded to him.
years. His employer (Tan) alleged that he was urinating inside his work area. He
denied the allegation, but Tan said, “I don't want you to draw anymore. From now
FACTS: (NOTE: THIS IS A REPEAT CASE; FIRST ASSIGNED UNDER MODULE 2 -
on, no more drawing. Get out." He then filed a case for illegal dismissal and sought
A)
payment of service incentive leave pay, among others.
1. Rolando Tan (petitioner) is the president of Supreme Theater
Corporation and the general manager of Crown and Empire Theaters in
The SC ruled that Lagrama was illegally dismissed. There’s EER between Lagrama
Butuan City. Leovigildo Lagrama (private respondent) is a painter,
and Tan because all the elements of the four-fold test were present in this case.
making ad billboards and murals for the motion pictures shown at the
1. Tan had the power of selection and engagement because it’s undisputed
Empress, Supreme, and Crown Theaters for more than 10 years, from
that it was him who engaged the services of Lagrama without the
September 1, 1988 to October 17, 1998.
intervention of a third party.
2. On October 17, 1998, Lagrama was summoned by Tan. Tan told him in
2. Tan had control over Lagrama with respect to the means and methods by
Cebuano, “you again urinated inside your work area." When Lagrama
which the latter’s work is to be accomplished because:
asked what Tan was saying, Tan told him, again in Cebuano, "don't say
a. Lagrama worked in a designated work area inside the Crown
anything further. I don't want you to draw anymore. From now on, no
Theater, for the use of which Tan prescribed rules. The rules
more drawing. Get out."
included the observance of cleanliness and hygiene and a
3. Lagrama denied the charge against him. He claimed that he was not the
prohibition against urinating in the work area and any place other
only one who entered the drawing area and that, even if the charge was
than the toilet or the rest rooms.
true, it was a minor infraction to warrant his dismissal. However,
b. Tan did not only provide the workplace, but supplied as well the
everytime he spoke, Tan shouted "Gawas" ("Get out"), leaving him with
materials used for the paintings, because he admitted that he
no other choice but to leave the premises.
paid Lagrama only for the latter's services.
4. Lagrama then filed a complaint for illegal dismissal and sought
c. The fact that Lagrama worked for at least 3 to 4 days a week
reinvestigation and payment of 13th month pay, service incentive leave
proves regularity in his employment by Tan.
pay, salary differential, and damages. On the other hand, Tan denied that
3. Tan himself admitted that he had the power to dismiss Lagrama.
Lagrama was his employee and asserted that Lagrama was an
4. (IMPT???) Lagrama was paid wages. The fact that Lagrama worked for
independent contractor. To support his contention, Tan argued, among
Tan on a fixed piece-work basis is of no moment. Payment by result is a
others, that Lagrama himself admitted during the conferences before
method of computing compensation, not a basis for determining the
the Labor Arbiter (LA) that he was paid on a fixed piece-work basis, i.e.,
existence or absence of EER.
that he was paid for every painting turned out as ad billboard or mural
for the pictures shown in the three theaters, on the basis of a "no
Doctrine: The Bureau of Working Conditions classifies workers paid by results into
mural/billboard drawn, no pay" policy.
two groups, namely:
a. those whose time and performance is supervised by the employer; and
5. The LA declared the dismissal illegal, but the NLRC reversed the LA's in one week. Even assuming this to be true, the fact
decision. The CA then reversed the NLRC's decision; thus, the present that Lagrama worked for at least 3 to 4 days a week
petition. proves regularity in his employment by Tan.
3. Tan had the power to dismiss because:
ISSUES: W/N Lagrama was entitled to service incentive leave. NO a. He himself admitted this in his position paper submitted to the
NLRC by stating that given the things Lagrama had allegedly
RATIO: done, he had the right to fire Lagrama.
b. He himself said that he waited for Lagrama to report for work
There’s EER between Lagrama and Tan because the four-fold test was satisfied. but the latter simply stopped reporting for work. This statement
1. Tan had the power of selection and engagement because it’s reinforces the conviction that Lagrama was indeed his
undisputed that it was him who engaged the services of Lagrama employee, for only an employee can nurture such an
without the intervention of a third party. expectancy, the frustration of which, unless satisfactorily
2. Tan had control (most impt element) over Lagrama with respect to the explained, can bring about some disciplinary action on the part
means and methods by which the latter’s work is to be accomplished. of the employer.
a. An independent contractor is free from the control and direction 4. (IMPT???) Lagrama was paid wages. The fact that Lagrama worked for
of the principal in all matters connected with the performance Tan on a fixed piece-work basis is of no moment. Payment by result is a
of the work except as to the results thereof; whereas, an method of computing compensation, not a basis for determining the
employee is subject to the employer's power to control the existence or absence of EER.
means and methods by which the employee's work is to be a. The Rules Implementing the Labor Code require every employer
performed and accomplished. to pay his employees by means of payroll. The payroll should
b. In this case, the evidence shows that the Lagrama performed show among other things, the employee's rate of pay,
his work as painter under the supervision and control of Tan. deductions made, and the amount actually paid to the
i. He worked in a designated work area inside the Crown employee.
Theater, for the use of which Tan prescribed rules. The b. In this case, Tan did not present the payroll to support his claim
rules included the observance of cleanliness and that Lagrama was not his employee, raising speculations
hygiene and a prohibition against urinating in the work whether his failure to do so proves that its presentation would
area and any place other than the toilet or the rest be adverse to his case.
rooms.
ii. Tan's control over Lagrama's work extended not only to Lagrama is NOT entitled to service incentive leave pay (IMPT!!!)
the use of the work area, but also to the result of 1. The Bureau of Working Conditions classifies workers paid by results
Lagrama's work, and the manner and means by which into two groups, namely:
the work was to be accomplished. a. those whose time and performance is supervised by the
iii. Tan did not only provide the workplace, but supplied as employer; and
well the materials used for the paintings, because he b. those whose time and performance is unsupervised by the
admitted that he paid Lagrama only for the latter's employer.
services. 2. The first involves an element of control and supervision over the
iv. Lagrama claimed that he worked daily, from 8 o'clock in manner the work is to be performed, while the second does not. If a
the morning to 5 o'clock in the afternoon. Tan disputed piece worker is supervised, there is an EER, as in this case. However,
this allegation by maintaining that he paid Lagrama such an employee is not entitled to service incentive leave pay since he
P1,475.00 per week for the murals for the three is paid a fixed amount for work done, regardless of the time he spent in
theaters which the latter usually finished in 3 to 4 days accomplishing such work.
3. Hence, the S C deleted the service incentive leave pay awarded to him. b. the legality in the manner of dismissal.
2. In this case, by his refusal to give Lagrama work to do and ordering
Lagrama to get out of his sight as the latter tried to explain his side, Tan
made it plain that Lagrama was dismissed. Urinating in a work place
Lagrama was a regular employee (skippable). other than the one designated for the purpose by the employer
1. The primary standard for determining regular employment is the constitutes violation of reasonable regulations intended to promote a
reasonable connection between the particular activity performed by the healthy environment under Art. 282(1) of the Labor Code for purposes of
employee in relation to the usual trade or business of the employer. terminating employment, but the same must be shown by evidence.
a. In this case, there is such a connection between the job of Here there is no evidence that Lagrama did urinate in a place other than
Lagrama painting billboards and murals and the business of a rest room in the premises of his work.
Tan. To let the people know what movie was to be shown in a 3. Tan, as a defense, claimed that Lagrama abandoned his work. There is
movie theater requires billboards. Tan in fact admits that the no evidence to show this. Abandonment requires two elements: (1) the
billboards are important to his business. failure to report for work or absence without valid or justifiable reason,
2. The SC has held that if the employee has been performing the job for at and (2) a clear intention to sever the employer-employee relationship,
least one year, even if not continuously but intermittently, the repeated with the second element as the more determinative factor and being
and continuing need for its performance is sufficient evidence of the manifested by some overt acts. Mere absence is not sufficient. What is
necessity, if not indispensability, of that activity to the business of his more, the burden is on the employer to show a deliberate and unjustified
employer. Hence, the employment is also considered regular, although refusal on the part of the employee to resume his employment without
with respect only to such activity, and while such activity exists. any intention of returning.
a. Lagrama had been employed by petitioner since 1988, so he is 4. Instead of ordering his reinstatement as provided in Art. 279 of the
deemed a regular employee and is thus entitled to security of Labor Code, the LA found that the relationship between the employer
tenure. and the employee has been so strained that the latter's reinstatement
3. The fact that Lagrama was not reported as an employee to the SSS is would no longer serve any purpose. The parties do not dispute this
not conclusive on the question of w/n he was an employee of Tan. finding. Hence, the grant of separation pay in lieu of reinstatement is
Otherwise, an employer would be rewarded for his failure or even neglect appropriate. This is of course in addition to the payment of backwages
to perform his obligation. which should be computed from the time of Lagrama's dismissal up to
4. Neither does the fact that Lagrama painted for other persons affect or the time of the finality of this decision, without any deduction or
alter his employment relationship with Tan because he did so only qualification.
during weekends. Moreover, Samuel Villalba, for whom Lagrama had
rendered service, admitted in a sworn statement that he was told by Disposition of the Court
Lagrama that the latter worked for Tan. WHEREFORE, based on the foregoing, the petition is DENIED for lack of showing
that the Court of Appeals committed any reversible error. The decision of the
Lagrama was illegally dismissed (skippable). Court of Appeals, reversing the decision of the National Labor Relations
1. The employer has the burden of proving the lawfulness of his Commission and reinstating the decision of the Labor Arbiter, is AFFIRMED with
employee's dismissal. The validity of the charge must be clearly the MODIFICATION that the backwages and other bene;ts awarded to private
established in a manner consistent with due process. The Implementing respondent Leovigildo Lagrama should be computed from the time of his
Rules of the Labor Code provide that no worker shall be dismissed dismissal up to the time of the finality of this decision, without any deduction and
except for a just or authorized cause provided by law and after due quali;cation. However, the service incentive leave pay awarded to him is
process. This provision has two aspects: DELETED.
a. the legality of the act of dismissal, that is, dismissal under the
grounds provided for under Article 282 of the Labor Code; and