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Judico, the Court upheld the existence of an employer-employee relationship between the insurance company and its agents, despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured. The relevant factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. In the case of Cosmopolitan Funeral Homes, Inc. v. Maalat, the employer similarly denied the existence of an employeremployee relationship, as the claimant according to it, was a “supervisor on commission basis” who did not observe normal hours of work. This Court declared that there was an employer-employee relationship, noting that “[the] supervisor, although compensated on commission basis, [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes.”
G.R. No. L-72654-61 January 22, 1990 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. As agreed upon, they received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip, otherwise, they received ten percent (10%) of the total proceeds of the sale. The patron/pilot, chief engineer and master fisherman received a minimum income of P350.00 per week while the assistant engineer, second fisherman, and fishermanwinchman received a minimum income of P260.00 per week. On September 11, 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) on September 3, 1983. During the investigation, no witnesses were presented to prove the charge against petitioners, and no criminal charges were formally filed against them. Notwithstanding, private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same day, September 11, 1983. On September 22, 1983, 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, Regional Arbitration Branch No. V, Legaspi City, Albay. They uniformly contended that they were arbitrarily dismissed without being given ample time to look for a new job. Issue:
NLRC. (b) the payment of wages. 2) power of dismissal. . 2011 (Labor Standards – Existence of employer-employee relationship) Facts: Private respondent working as a barber on piece-rate basis was designated by petitioners as caretaker of their barbershop. (c) the power of dismissal.R. 3) the payment of wages. Private respondent left his job voluntarily because of his misunderstanding with his co-worker and demanded separation pay and other monetary benefits. We have consistently ruled that in determining the existence of an employer-employee relationship. The petition is GRANTED. In determining the existence of an employer-employee relationship. we have generally 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. 121605. the elements that are generally considered are the following (a) the selection and engagement of the employee. 2000. in addition to his being a barber. Ruling: Disputing the finding of public respondent that a "joint fishing venture" exists between private respondent and petitioners. From the four (4) elements mentioned. Petitioner’s contends that respondent was not their employee but their “partner in trade” whose compensation was based on a sharing arrangement per haircut or shaving job done. Private respondent’s duties as caretaker. it is enough that the employer has the right to wield that power. the following elements are considered: 1) selection and engagement of worker. 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. Jo vs. The test calls merely for the existence of the right to control the manner of doing the work. De Guzman Fishing Enterprises. that public respondent ignored the evidence of petitioners that private respondent controlled the fishing operations. 4) to attend to other needs of the shop. not the actual exercise of the right. were: 1) to report to the owners of the barbershop whenever the aircondition units malfunction and/or whenever water or electric power supply was interrupted. No. 9 In the absence of hiring. 3) to recommend applicants for interview and hiring.1985 is hereby REVERSED and SET ASIDE. Held: Yes. 324 SCRA 437 Posted by Pius Morados on November 10.Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-operator. with the latter assuming primacy in the overall consideration. 8 The employment relation arises from contract of hire. that public respondent did not take into account established jurisprudence that the relationship between the fishing boat operators and their crew is one of direct employer and employee. Issue: Whether or not there exist an employer-employee relationship. It is not essential for the employer to actually supervise the performance of duties of the employee. Private respondent is ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. and 4) the power to control the worker’s conduct. no actual employer-employee relation could exist. February 2. For this additional job. 2) to call the laundry woman to wash dirty linen. petitioners claim that public respondent exceeded its jurisdiction and/or abused its discretion when it added facts not contained in the records when it stated that the pilot-crew members do not receive compensation from the boat-owners except their share in the catch produced by their own efforts. No pronouncement as to costs. G. The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. The questioned resolution of the National Labor Relations Commission dated May 30. express or implied. he was given an honorarium equivalent to1/3 of the net income of the shop.
In return. Petitioner opposed alleging that there is no ER-EE relationship between Besa and petitioners. the employer supervises and controls his work Shoe shiner 1. These petitioners are shoe shiners paid on a commission basis. respondent Basiao has been an agent for petitioner company. Some four years later. and is authorized to solicit within the Philippines applications for insurance policies and annuities in accordance with the existing rules and regulations of the company. respondents. Trajano FACTS: Respondent KAMPI filed a Petition for Certification Election.Besa v. 1979.R. the employer pays his wages 3. but are partners. because there is no control by the owner and shoe shiners have their own customers whom they charge a fee and divide the proceeds equally with the owner. 1980. FACTS: Since 1968. In May. Shoe shiner is different from a piece worjer: Piece Woker 1. shoe shiners are not employees of the company. The complaint sought to recover commissions allegedly unpaid thereunder. paid directly by his customer 3. After vainly seeking a reconsideration. the parties entered into another contract — an Agency Manager's Contract — and to implement his end of it Basiao organized an agency or office to which he gave the name M. 84484 November 15. prompted the latter to terminate also his engagement under the first contract and to stop payment of his commissions starting April 1. he would receive compensation. respondent does not exercise control Thus.. the Company terminated the Agency Manager's Contract. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO. ISSUE: W/N ER-EE relationship exists betweem shoe shiners and Besa HELD: No. in April 1972. petitioner. paid for work accomplished without concern to the pr ofit derived by employer 4. 1989] INSULAR LIFE ASSURANCE CO. Basiao sued the Company in a civil action and this. plus attorney's .. Basiao thereafter filed with the then Ministry of Labor a complaint against the Company and its president. paid for work accomplished 2. he was later to claim. No. LTD. The question of ER-EE relationship became a primordial consideration in resolving whether or not the subject shoe shiners have the juridical personality and standing to present a petition for certification as well as to vote therein. vs. Basiao and Associates. the proceeds derived from the trade are divided share wit h respondent BESA 4. while concurrently fulfilling his commitments under the first contract with the Company. in the form of commissions. contributes anything to the capital of the employer 2. INSULAR LIFE ASSURANCE vs NLRC Case Digest [G.
The respondents limit themselves to pointing out that Basiao's contract with the Company bound him to observe and conform to such rules and regulations as the latter might from time to time prescribe. It was agreed that office expenses would be deducted from Limjo co’s commissions. Absent such showing. As compensation. much less that any rules existed or were issued which effectively controlled or restricted his choice of methods — or the methods themselves — of selling insurance. Logically. the Court will not speculate that any exceptions or qualifications were imposed on the express provision of the contract leaving Basiao ". INC. place and means of soliciting insurance. therefore. which address both the result and the means used to achieve it.fees. free to exercise his own judgment as to the time. No showing has been made that any such rules or regulations were in fact promulgated. he would receive commissions from the products sold by his agents. HELD: The SC ruled in favor of Insular Life. Of such a character are the rules which prescribe the qualifications of persons who may be insured. ISSUE: Whether or not there exist an employer-employee relationship between Basiao and Insular Life. not only to the relations between insurer and insured but also to the internal affairs of the insurance company. create no employer-employee relationship unlike the second. which aim only to promote the result. The respondents disputed the Ministry's jurisdiction over Basiao's claim. hence cannot justifiably be said to establish an employer-employee relationship between him and the company. A line must be drawn somewhere.. usual and expected for an insurance company to promulgate a set of rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it requires or prohibits. rules that under the contract invoked by him. None of these really invades the agent's contractual prerogative to adopt his own selling methods or to sell insurance at his own time and convenience. and also reserve to the Company the determination of the premiums to be paid and the schedules of payment. if the recognized distinction between an employee and an individual contractor is not to vanish altogether. NLRC 264 SCRA 4 Facts: Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of selling the products through some sales representatives. ENCYCLOPEDIA BRITANNICA INC vs NLRC Case Digest ENCYCLOPEDIA BRITANNICA (Philippines). but an independent contractor. an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. The distinction acquires particular relevance in the case of an enterprise affected with public interest. He was also allowed to use the petitioner’s name. vs.. The first. It is. therefore. Rules and regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the Insurance Commissioner. goodwill and logo." The Court. and those that control or fix the methodology and bind or restrict the party hired to the use of such means. and is on that account subject to regulation by the State with respect. but a commission agent. as is the business of insurance. subject insurance applications to processing and approval by the Company. the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it. asserting that he was not the Company's employee. . 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. NLRC Decision set aside. Basiao was not an employee of the petitioner.
respondents. payment of wages. JR. Aside from selling. The element of control is absent where a person who works for another does so more or less at his own pleasure and is not subject to definite hours or conditions of work. . bad blood ensued between the parties due to some bad accounts that Lamadrid forced petitioner to cover. as a commission salesman. Petitioner filed a complaint for illegal dismissal with money claims against respondent company and its president. Later petitioner found out that respondent had informed his customers not to deal with petitioner since it no longer recognized him as a commission salesman. petitioner. In ascertaining the employee-employer relationship.R. The Labor Arbiter ruled that Limjoco was an employee of the company. Limjoco maintained otherwise. is an employee of respondent corporation. Petitioner alleged that Limjoco was not an employee of the company but an independent dealer authorized to promote and sell its products and in return.. an employee-employer relationship exists where the person for whom the services are performed reserves a right to control not only the end to be achieved. The power of control is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employee-employer relationship. NLRC also affirmed the decision and opined that there was no evidence supporting allegation that Limjoco was an independent contractor or dealer. [G. he was also tasked with collection. often required Abante to report to a particular area and occasionally required him to go to Manila to attend conferences. but also the manner and means to be employed in reaching that end. Limjoco resigned to pursue his private business and filed a complaint against petitioner for alleged non-payment of separation pay and other benefits and also illegal deduction from sales commissions. and JOSE LAMADRID. vs. No.In 1974. Hence. By way of defense. power of dismissal and power to control the employee’s conduct. the factual circumstances must be considered. there was no employeeemployer relationship. Limjoco was not an employee of the company since he had the free rein in the means and methods for conducting the marketing operations. In determining the relationship. Under the control test. Email ThisBlogThis!Share to TwitterShare to Facebook ABANTE vs LAMADRID BEARING & PARTS CO. ABANTE. Jose Lamadrid. Petitioner also claims that it had no control and supervision over the complainant as to the manners and means he conducted his business operations. the following elements must be present: selection and engagement of the employee. He was free to conduct his work and he was free to engage in other means of livelihood. He was merely an agent or an independent dealer of the petitioner. received commissions therein. Respondent corporation through its president. ISSUE: Whether or not petitioner. respondents countered that petitioner was not its employee but a freelance salesman on commission basis. Case Digest EMPERMACO B. He alleged he was hired by the petitioner and was assigned in the sales department. President. LAMADRID BEARING & PARTS CORP. Ruling: There was no employee-employer relationship. Issue: Whether or not there was an employee-employer relationship between the parties. and in turn is compensated in according to the result of his efforts and not the amount thereof. Later on. 159890 May 28. 2004] FACTS: Petitioner was a salesman of respondent company earning a commission of 3% of the total paid up sales covering the whole area of Mindanao. The issuance of guidelines by the petitioner was merely guidelines on company policies which sales managers follow and impose on their respective agents.
He pursued his selling without interference or supervision from the company. Moreover.t apply where there is no employer-employee relationship. and pay for regular holidays which petitioner. Davao Fruits Corporation vs Associated Labor Unions. (2) the payment of wages. 1994. as well as pay for regular holidays. premiums for work done on rest days and special holidays. He was assigned at the PAL Medical Clinic at Nichols and was on duty from 4:00 in the afternoon until 12:00 midnight. 851 provides that “overtime pay. equivalent to their sick. petitioner was free to offer his services to other companies. excluded from the computation of the 13th month pay for 1982. private respondent left the clinic to have his . premiums for work done on rest days and special holidays. It is true that he was paid in commission yet no quota was imposed therefore a dismal performance would not warrant a ground for dismissal. Art... Issue: WON in the computation of the 13th month pay under PD No. He was not designated to conduct services at a particular area or time. 851. 85073. and pay for regular holidays may be excluded in the computation and payment thereof. vacation and maternity leaves. Held: Yes. It follows therefore. 2011 (Labor Standards – Fringe benefits not included in 13th month pay) Facts: Respondent ALU for and in behalf of all the rank-and-file workers and employees of petitioner sought to recover from the latter the 13th month pay differential for 1982 of said employees.HELD: To determine the existence of an employee-employer relationship. Inc. vacation and maternity leaves. these were only intended to guide him. 280 is not a crucial factor because it only determines two kinds of employees. at around 7:00 in the evening. It doen. The company did not prescribe the manner of selling merchandise. 225 SCRA 562 Posted by Pius Morados on November 10. August 24. we apply the four fold test: 1) the manner of selection and engagement. Sec. hilippine Airlines.R. NLRC 302 SCRA 582 (1999) Facts: Private respondent was employed as flight surgeon at petitioner company. payments for sick. an employer-employee relationship is notably absent in this case. (3) the presence or absence of the power of dismissal. and (4) the presence or absence of the power of control. vs. No. Applying the aforementioned test. premium for work done on rest days and special holidays. G. vacation and maternity leaves. Inc. While the term commission under Article 96 of the LC was construed as being included in the term “wage”. Whatever compensation an employee receives for an 8 hour work daily or the daily wage rate is the basic salary. that payments for sick. On February 17. NLRC Case Digest Philippine Airlines. there is no categorical pronouncement that the payment of commission is conclusive proof of the existence of an employee-employer relationship. 4 of the Supplementary Rules and Regulations Implementing PD No. 1993. Any compensation or remuneration other than the daily wage rate is excluded. vs. While he was sometimes required to report to Manila. There was no specific office hours he was required to observe. Basic salary does not merely exclude the benefits expressly mentioned but all payments which may be in the form of fringe benefits or allowances. are likewise excluded in computing the basic salary for the purpose of determining the 13th month pay. allegedly in disregard of company practice since 1975. earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. The decision of the CA is affirmed.
Articles 83 and 85 of the Labor Code read: Normal hours of work—The normal hours of work of any employee shall not exceed eight (8) hours a day. When private respondent reached the clinic at around 7:51 in the evening. Eusebio immediately rushed him to the hospital. Ruling: The Court does not agree with the petitioner.000. he returned to the clinic at 7:51 in the evening upon being informed of the emergency. the clinic received an emergency call from the PAL Cargo Services. Eusebio about the emergency and he arrived at the clinic a few minutes later. Art. called private respondent at home to inform him of the emergency. exclusive of time for meals. The Chief Flight Surgeon required private respondent to explain why no disciplinary sanction should be taken against him. which was about five-minute drive away. Issue: Whether or not being a full-time employee is obliged to stay in the company premises for not less than eight (8) hours. Mr. Manuel Acosta. In his explanation.—Every employer shall give his employees. Finding private respondent’s explanation unacceptable. A few minutes later. After evaluating the charge as well as the answer of private respondent. Merlino Eusebio. Rule I. 1994. the management charged private respondent with abandonment of post while on duty. had suffered a heart attack. laboratory technicians. in which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for work on the sixth day. for five (5) days a week. regardless of sex. Health personnel in cities and municipalities with a population of at least one million (1. attendants and all other hospital or clinic personnel.—Subject to such regulations as the Secretary of Labor may prescribe. In his answer. that Mr. Section 7. In fact. 85. Eusebio panicked and brought the patient to the hospital without waiting for him. Mr. private respondent reiterated the assertions in his previous explanation. dieticians. Godofredo B. Upon learning about the incident. he may not leave the company premises during such time. social workers. even to take his meals. except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee. Meal and Rest Periods. Meal periods. He was given ten days to submit a written answer to the administrative charge. Hence.000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day.dinner at his residence. private respondent asserted that he was entitled to a thirty-minute meal break. One of its employees. it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. For purposes of this Articl e. 1994. He said that he only left the clinic to have his dinner at home. petitioner company decided to suspend private respondent for three months effective December 16. 7. except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours. Acosta died the following day. The patient arrived at the clinic at 7:50 in the evening and Mr. “health personnel” shall include: resident physicians. . Mr. (b) Where the establishment regularly operates not less than sixteen hours a day. psychologists. (a) Where the work is non-manual work in nature or does not involve strenuous physical exertion. PAL Medical Director Dr. nurses. The nurse on duty. Mr. Eusebio had already left with the patient. not less than one (1) hour time-off for regular meals. nutritionists. pharmacists. Book III of the Omnibus Rules Implementing the Labor Code further states: Sec. He further denied that he abandoned his post on February 17. that he immediately left his residence upon being informed by Mr. midwives. Banzon ordered the Chief Flight Surgeon to conduct an investigation. paramedical technicians.
400. AND MARLOW NAVIGATION CO. and $1640 for March 1999) as well as moral and exemplary damages. which reads: Sec. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term.442. leaving an unexpired portion of nine (9) months and twenty-three (23) days. but this time he questioned the constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042. the eight-hour work period does not include the meal break. ANTONIO M. 10. under a POEA-approved contract of employment for 12 months.770. 1995. plus $700/month overtime pay. the NLRC modified the LA decision and awarded Serrano $4669. – x x x In case of termination of overseas employment without just. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive dismissal and for payment of his money claims in the total amount of US$26.90 for March 1998. Nowhere in the law may it be inferred that employees must take their meals within the company premises. On appeal. Inc. Serrano filed a Motion for Partial Reconsideration. representing his salaray for three (3) months of the unexpired portion of the aforesaid contract of employment. Money Claims.000 upon the assurance and representation of respondents that he would be Chief Officer by the end of April 1998.. representing three (3) months salary at $1400/month. GALLANT MARITIME SERVICES. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Serrano was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1.73 (based on the computation of $2590/month from June 1998 to February 199. equipment or installations to avoid serious loss which the employer would otherwise suffer.(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries. and 7 days paid vacation leave per month. the date of his departure. . and Marlow Navigation Co. however. Serrano refused to stay on as second Officer and was repatriated to the Philippines on May 26. with the basic monthly salary of US$1. The LA declared the petitioner’s dismissal illegal and awarded him US$8. Private respondent’s act of going home to take his dinner does not constitute abandonment. serving only two (2) months and seven (7) days of his contract. 1998. $413. Inc. GR No. plus $45 for salary differential and for attorney’s fees equivalent to 10% of the total amount. no compensation for damages as prayed was awarded. as Chief Officer. On March 19. This decision was based on the provision of RA 8042. INC.50. Hence. and (d) Where the work is necessary to prevent serious loss of perishable goods. Thus. whichever is less. which was made into law on July 15. 167614 – March 24.. 1998. the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum. INC.. plus 445 salary differential and 10% for attorney’s fees. Respondents did not deliver on their promise to make Serrano Chief Officer. 2009 En banc FACTS: Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services. valid or authorized cause as defined by law or contract. SERRANO VS.
reiterating the constitutional challenge against the subject clause. none should be denied the protection of the laws which is enjoyed by. education.A. . when it sees fit. HELD: On the first issue. and cannot affect acts or contracts already perfected. however. morals. Rather. Article XIII on labor as a protected sector. 8042. No. liberty. No. abridging or in any manner changing the intention of the parties thereto. Police power legislations adopted by the State to promote the health. Article II and Section 3. Section 18. 8042. their provisions are read into contracts and deemed a part thereof. a system of classification into its legislation. but skirted the constitutional issue raised by herein petitioner Serrano. the non-impairment clause under Section 10. profession or calling. others in like circumstances. hence. The answer is in the negative. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. or spared the burden imposed on. impaired the employment contract of the parties. however. As aptly observed by the OSG. and Section 18. particularly the recruitment and deployment of OFWs.A. Article II and Section 3. Article III of the Constitution provides: No law impairing the obligation of contracts shall be passed. without distinction as to place of deployment. To Filipino workers. The CA affirmed the NLRC ruling on the reduction of the applicable salary rate. Such rights are not absolute but subject to the inherent power of Congress to incorporate. Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging. Section 1. The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation. Whether or not the subject clause violate Section 1. the enactment of R. with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed. when the parties executed their 1998 employment contract. Section 10. and 4) it applies equally to all members of the class. as to laws already in existence. But even if the Court were to disregard the timeline. to be valid. they were deemed to have incorporated into it all the provisions of R. Article III of the Constitution. Hence. while all monetary obligations should be borne by them in equal degree. good order. 2. The answer is in the affirmative. full protection of their rights and welfare. Serrano filed a Petition for Certiorari with the Court of Appeals (CA).The NLRC denied the Motion. On the second issue. and general welfare of the people are generally applicable not only to future contracts but even to those already in existence. Article XIII accord all members of the labor sector. for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare.A. Petitioner’s claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary package he will receive is not tenable. peace. particularly the subject clause. the subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause. or property without due process of law nor shall any person be denied the equal protection of the law. No. Thus. the classification must comply with these requirements: 1) it is based on substantial distinctions. for the law was enacted in the exercise of the police power of the State to regulate a business. safety. 2) it is germane to the purposes of the law. Whether or not the subject clause violates Section 10. the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity: all monetary benefits should be equally enjoyed by workers of similar category. Article III of the Constitution guarantees: No person shall be deprived of life. Article III of the Constitution on non-impairment of contracts. ISSUES: 1. it cannot be argued that R. 3) it is not limited to existing conditions only.
What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history. The idea that private business interest can be elevated to the level of a compelling state interest is odious. the Government has failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of the discrimination against OFWs under the subject clause. No. In fine. No. and an invidious impact on. in the computation of the monetary benefits of fixed-term employees who are illegally discharged. Second. while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands.A. However. illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since been differently treated in that their money claims are subject to a 3-month cap. even if the purpose of the subject clause is to lessen the solidary liability of placement agencies visa-vis their foreign principals. especially when the favored sector is composed of private businesses such as placement agencies. among OFWs with employment contracts of more than one year.There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest. such as the public interest in safeguarding health or maintaining medical standards. Upon cursory reading. There can never be a justification for any form of government action that alleviates the burden of one sector. and the burden is upon the government to prove that the classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such interest. b) the middle-tier or intermediate scrutiny in which the government must show that the challenged classification serves an important state interest and that the classification is at least substantially related to serving that interest. there are mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs. the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve. such callous and cavalier rationale will have to be rejected. OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one year or more. OFWs and local workers with fixed-term employment who were illegally discharged were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. There being a suspect classification involving a vulnerable sector protected by the Constitution. prior to R. In sum. it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts. but imposes the same burden on another sector. and c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with the exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class is presumed unconstitutional. and Third. or in maintaining access to information on matters of public concern. the subject clause appears facially neutral. Assuming that. as advanced by the OSG. . But with the enactment of R. 8042. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. a closer examination reveals that the subject clause has a discriminatory intent against. OFWs vis-à-vis local workers with fixed-period employment. but none on the claims of other OFWs or local workers with fixed-term employment. for it applies to all OFWs. and determines whether it serves a compelling state interest through the least restrictive means. Moreover. specifically the adoption of the subject clause. OFWs at two levels: First. 8042. In the present case. The Court concludes that the subject clause contains a suspect classification in that. the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of placement agencies. the Court now subjects the classification to a strict judicial scrutiny. whereas no such limitation is imposed on local workers with fixed-term employment. It is akin to the paramount interest of the state for which some individual liberties must give way.A.
were assisted by a liaison officer of private respondent All Season Manpower International Services. who processed their papers and gave them travel exit passes (TEPS). Held: No. dated May 23. Thus. Ltd. imposes administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents. with CBT/Sheik International. contains similar administrative disciplinary measures against erring foreign employers. vs. 2003. Petitioner informed the workers that it did not want to send back any workers because of the big risk due to the financial difficulties of Algosaibi-Bison Ltd.The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers. Issue: WON petitioner may be held solidarily liable with the foreign employer for any unpaid claims of private respondents against their foreign principal employer even as they have a stipulation to this effect. Respondent workers assured petitioner that they were willing to assume the risk and emphasized that they were willing to sign a written statement indicating that they would not hold petitioner liable for any delay or nonpayment of their salaries and any amounts due them from Algosaibi-Bison. As a rule.. 8042 is violative of the right of petitioner and other OFWs to equal protection. a recruiter is solidarily liable with unpaid wages of workers sent abroad.R. 2011 (Labor Standards – Recruiter not solidarily liable when workers agreed not to hold the recruiter liable) Facts: Herein respondents. Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing the solidary liability of their foreign principals. 186 SCRA 589 Posted by Pius Morados on November 10. Ltd. 193 SCRA 682 Posted by Pius Morados on November 10. they filed a complaint to recover their unpaid salaries and for wages covering the unexpired portion of their contracts against private respondent. the subject clause in the 5th paragraph of Section 10 of R. When Algosaibi-Bison Ltd went into bankruptcy. 2002. whichever is less” in the 5th paragraph of Section 10 of Republic Act No. 40 Filipino workers formerly employed with Algosaibi-Bison.A. 2011 (Labor Standards – Agents hired without knowledge and consent of recruitment agency) Facts: Petitioners applying for overseas employment in Doha. NLRC. Gayda. Ilas vs. The POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers. Nos. The subject clause “or for three months for every year of the unexpired term. 7 February 1991. Feagle Construction Corp. After being deployed and worked for 4 months without being paid. private respondents filed with the POEA a complaint against petitioner for unpaid claims with the liquidator of Algosaibi-Bison Ltd. dated February 4. Issue: WON a recruitment agency be liable for unpaid wages and other claims of overseas workers who appear to be recruited by its agent without its knowledge and consent. 8042 is DECLARED UNCONSTITUTIONAL. These disciplinary measures range from temporary disqualification to preventive suspension. Qatar. Requested petitioner recruiter to return them to their job site in Saudi Arabia. . It was under the foregoing circumstances that petitioner reluctantly agreed to send back private respondents to Saudi Arabia to help them in their dire financial need if they would sign the aforementioned statements. Case at bar is an exception because it was the workers who persuaded recruiter to send them back abroad despite knowledge that foreign employer might not pay their wages and they agreed not to hold recruiter responsible thereof. No. G. 90394-97.
120095.Held: No. It is true that the rules and regulations of the POEA provide that the private employment or recruitment agency is made to assume full and complete responsibility for all acts of its officials and representatives done in connection with recruitment and placement.R. The ARB requirement and the questioned Department order related to its issuance were issued pursuant to a valid exercise of police power which considers the welfare of Filipino performing artists. The rules further added that where an employer pays less than 1/12th of the employee’s basic salary. STANFILCO paid its workers the difference between 1/12th of their yearly basic salary and their year-end productivity bonus. Respondent ALU. August 5. profit sharing payments and other cash bonuses amounting to not less than 1/12th of the basic salary but shall not include cash and stock dividends. particularly the women. the latter cannot be held liable for the claims of petitioners. 1982. 3 of The Rules and regulations Implementing PD 851 provides that the term “its equivalent” shall include Christmas bonus. Petitioners contends that overseas employment is a property right within the meaning of the Constitution and avers that the alleged deprivation thereof through the onerous requirement of an ARB violates due process and constitutes an invalid exercise of police power. 260 SCRA 319 Posted by Pius Morados on November 10. can pay its difference) Facts: STANFILCO. the employer shall pay the difference. Held: Yes. Jr. Section 1 thereof required all employers to pay their employees receiving a basic salary of not more than P1. cost of living allowances and other allowances regularly enjoyed by the employees as well as non-monetary benefits. joined by petitioner’s employees filed a complaint for the non-implementation of the CBA provision on the year-end productivity bonus. Complying with the provision of PD 851 and relying on the interpretation of section 2 by the MOLE’s implementing rules.. 2011 (Labor Standards – Artist Record Book as a requirement for overseas employment contract) Facts: The deployment of female entertainers to Japan was controlled by the government through Department Order No. CA. regardless of the nature of their employment. however exempted from its coverage those employers already paying their employees a 13th month pay or its equivalent. 3. The company agrees to grant each worker within the bargaining unit a year-end productivity bonus equivalent to ten days of his basic daily wage if eighty percent or more of the average total production for the two preceding calendar years together with the current year’s estimate is attained. Sec. 1996. a 13th month pay not later than December 24 of every year. vs Leogardo. wherein said entertainers were required an Artist Record Book as a precondition to the processing by the POEA of any contract for overseas employment. vs. 2011 (Labor Standards – Employer paying a year-end bonus less than 1/12th of the basic pay required under the law. mid-year bonus. JMM Promotion and Management. No. Section 2. a company merged with petitioner Dole Philippines. the grant of a yearend productivity bonus to all workers within the collective bargaining unit. where the recruitment was actually made by respondent agency’s agent in behalf of CBT/Shiek International. No. 60018. Issue: WON an Artist Record Book is a valid requirement for overseas employment. PD 851 took effect. . 117 SCRA 938 Posted by Pius Morados on November 10. obviously without the knowledge and consent of private respondent. G. The CBA provided among others. Dole Philippines. not the private respondent. and the name of private respondent was only used as a means to enable petitioners to be issued TEPS for travel purposes. Inc. Thereafter. October 23. However. G. Inc. R. inc entered into a collective bargaining agreement with the Associated Labor Union.000 a month.
Unit Manager. In 1992 PICOP suffered a major financial setback allegedly brought about by the joint impact of restrictive government regulations on logging and the economic crisis. vs CA. It has been said that a tip denotes a voluntary act. NLRC 305 SCRA 501 Facts: Petitioners numbering one hundred sixteen occupied the positions of Technical Staff. To avert further losses. it acted well within the letter and spirit of the law and its implementing rules. Accordingly. Private respondent filed a complaint before the labor arbiter for vacation leave pay and unpaid tips amounting to US S36. Ace Navigation Co. In complying with PD 851. namely. On appeal.. the free bestowing of a gratuity without a consideration. Held: No.5 days of vacation leave with pay each month.Issue: WON productivity bonus agreed in the CBA is demandable aside from the 13th month pay provided for in the PD 851. et al. Inc. For in the event that an employer pays less than 1/12th of the employees’ basic salary. The Labor Arbiter ordered the recruitment agency and the principal to pay jointly and severally private respondent his vacation leave pay. notwithstanding its conditional nature. A bartender cannot feign ignorance on the practice of tipping and that tips are normally paid by customers and not by the employer. Held: No. including overtime pay for 12 hours of work daily plus tips of US S2. a tip lacked the essential element of a gift. private respondent.000. illares vs. Year-end productivity bonus granted by petitioner to private respondents pursuant to their CBA is. Section Manager. flat rate. in legal contemplation. Payment for overtime was included in the monthly salary. He was also entitled to 2. the supposed tips mentioned in the contract should be deemed included thereat. who works as a bartender on board the vessel MV Orient Express. NLRC ordered the payment of unpaid tips. Issue: WON employers are liable to pay tips. The claim for tips was dismissed for lack of merit. there is an element of compulsion in tipping. an integral part of their 13th month pay. it undertook a retrenchment program and terminated the services of petitioners. and that despite its apparent voluntariness. petitioner credited the year-end productivity bonus as part of the 13th month pay and adopted the procedure of paying only the difference between said bonus and 1/12th of the worker’s yearly basic salary. but whether considered from the standpoint of the giver or the recipient. Surigao del Sur. petitioners received separation pay computed at the rate of one (1) month basic pay for every year of service. Department Manager. 2011 (Labor Standards – Tips) Facts: Under the POEA approved contract of employment. Division Manager and Vice President in the mill site of respondent Paper Industries Corporation of the Philippines (PICOP) in Bislig.00 per passenger per day. ordinary and common meaning of the word “tip”. shall receive a monthly basic salary of US S450. It is presumed that the parties were aware of the plain.00. vs. all that the said employer is required to do under the law is to pay the difference. Believing however that the . 338 SCRA 70 Posted by Pius Morados on November 17. NLRC Case Digest Liduvino Millares.00.
5. of board. Book III. The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering. not regularly. Wage is defined in letter (f) as the remuneration or earnings. G. task. constitute income to the latter except if such allowances or benefits are furnished to the employee for the convenience of the employer and as necessary incident to proper performance of his duties in which case such benefits or allowances do not constitute taxable income. of the Rules Implementing the Labor Code may from time to time fix in appropriate issuances the "fair and reasonable value of board. et al. par. lodging and other facilities customarily furnished by an employer to his employees." it is not so with "facilities. vs Southern Mindanao Experimental Station. of the Labor Code.2… transportation. The Secretary of Labor and Employment under Sec. or other facilities customarily furnished by the employer to the employee. When an employer customarily furnishes his employee board.Board and lodging allowances furnished to an employee not in excess of the latter's needs and given free of charge. piece. 97." Thus Sec. or for services rendered or to be rendered and includes the fair and reasonable value. or other method of calculating the same. 6. No. Rule VII. Issue: Whether the allowances are included in the definition of "facilities" in Art. or commission basis. 1-87 pertinently provides —3. as determined by the Secretary of Labor and Employment. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done.allowances they allegedly regularly received on a monthly basis during their employment should have been included in the computation thereof they lodged a complaint for separation pay differentials. 1959 Posted by Pius Morados on November 15. L-12950. The court agrees with the observation of the Office of the Solicitor General that the subject allowances were temporarily. Revenue Audit Memo Order No. December 9. et al. Ruling: The allowances are not part of the wages of the employees. the criterion is not so much its kind but its purpose. In determining whether a privilege is a facility.R. 2011 ." Customary is founded on long-established and constant practice connoting regularity. being necessary and indispensable for their existence and subsistence. received by petitioners. Rule VII. Although it is quite easy to comprehend "board" and "lodging. 106 Phil 696. capable of being expressed in terms of money. as determined by the Secretary of Labor. and does. the fair and reasonable value thereof. (f). is included in "wage. Celestial. make an accounting/liquidation for such expense in accordance with the specific requirements of substantiation for such category or expense. of the Rules Implementing the Labor Code gives meaning to the term as including articles or services for the benefit of the employee or his family but excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employer's business. representation or entertainment expenses shall not constitute taxable compensation if: (a) It is for necessary travelling and representation or entertainment expenses paid or incurred by the employee in the pursuit of the trade or business of the employer. Book III. The inevitable conclusion is that subject allowances did not form part of petitioners' wages. lodging or other facilities. however designated. whether fixed or ascertained on a time.." Petitioners' allowances do not represent such fair and reasonable value as determined by the proper authority simply because the Staff/Manager's allowance and transportation allowance were amounts given by respondent company in lieu of actual provisions for housing and transportation needs whereas the Bislig allowance was given in consideration of being assigned to the hostile environment then prevailing in Bislig. lodging. and (b) The employee is required to.
Respondent experimental station. there can be no question that all these acts and functions fall within the definition of agriculture provided in the Minimum Wage Law. they may also be considered as agricultural workers and employees. through its employees and laborers actually tills the soil.00 a day. cultivation.. pineapples or other farm products. tobacco. but does not include the manufacturing or processing of sugar. . and harvesting of any agricultural or horticultural commodities. and their work is incidental to agriculture. abaca. and consequently.(Labor Standards – Agricultural Employees) Facts: The Minimum Wage Law provides that in order than an employee or laborer may be paid the minimum wage of P2. The Auditor General rendered a decision that they are entitled to the latter amount. and any practices performed by a farmer or on a farm as an incident to or in conjunction with such farming operations. are agricultural. Held: Yes. dairying. coconuts. is an agency of the Bureau of Plant Industry which are both engaged in agriculture or are dedicated in agricultural functions as provided by sections 1753 and 1754 of the Revised Administrative Code. which was actually paid them by the respondent experimental station. Petitioners. said enterprise should operate a farm comprising more than 12 hectares. employees of the experimental station alleged that they are entitled to the minimum wage of P4. Some employees in the experimental station may be engaged in office work.50 a day. etc. and thereafter extracts the seeds from the harvest for sale and distribution to farmers. instead of P2. Where an experimental station operates a farm comprising 960 hectares. the production. discovers plant pests and their eradication by means of treatment with the proper insecticides. introduces and plants seeds of the best crop varieties found by it after study and experiment. It follows that the laborers and farm workers who actually carry out and perform these functions are also engaged in agriculture. Section 2 of the Minimum Wage Law (RA 602) provides a definition of agriculture: Agriculture includes farming in all its branches and among other things include cultivation and tillage of the soil. In as much as they are all employed by the same. which is a farm enterprise. and the other proper harvesting of the crops. and. which operates a farm comprising of 960 hectares.50. Issue: WON employees of an experimental station engaged in agriculture are agricultural employees. he must be employed by an enterprise engaged in agriculture. including the timing and method. weeding. including the spacing of each plant or seedling and the amount of water needed through irrigation. and said employee or laborer should be engaged in agriculture. growing. raises said crops in the best approved methods of cultivation. the raising of livestock or poultry.