kapisanan ng mga kargador sa pier

ASSIGNMENT #2 CASE DIGESTS EMPLOYER-EMPLOYEE RELATIONSHIP

UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner, vs. HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES, INC. respondents. FACTS: Petitioner is a union of supervisory employees. It appears that on March 20, 1995 the union filed a petition for certification election on behalf of the route managers at PepsiCola Products Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal, by the Secretary of Labor and Employment, on the ground that the route managers are managerial employees and, therefore, ineligible for union membership under the first sentence of Art. 245 of the Labor Code, which provides: Ineligibility of managerial employees to join any labor organization; right of supervisory employees. — Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. Petitioner brought this suit challenging the validity of the order dated August 31, 1995, as reiterated in the order dated September 22, 1995, of the Secretary of Labor and Employment. Its petition was dismissed by the Third Division for lack of showing that respondent committed grave abuse of discretion. But petitioner filed a motion for reconsideration, pressing for resolution its contention that the first sentence of Art. 245 of the Labor Code, so far as it declares managerial employees to be ineligible to form, assist or join unions, contravenes Art. III, §8 of the Constitution which provides: The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. ISSUES: (1) whether the route managers at Pepsi-Cola Products Philippines, Inc. are managerial employees and (2) whether Art. 245, insofar as it prohibits managerial employees from forming, joining or assisting labor unions, violates Art. III, §8 of the Constitution. HELD:1. Yes, route managers are considered managerial employees. We have in this case an expert's view that the employees concerned are managerial employees within the purview of Art. 212 which provides: (m) "managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline

employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book. The term "manager" generally refers to "anyone who is responsible for subordinates and other organizational resources." FIRST-LINE MANAGERS — The lowest level in an organization at which individuals are responsible for the work of others is called first-line or first-level management. First-line managers direct operating employees only; they do not supervise other managers. Examples of first-line managers are the "foreman" or production supervisor in a manufacturing plant, the technical supervisor in a research department, and the clerical supervisor in a large office. First-level managers are often called supervisors. MIDDLE MANAGERS — The term middle management can refer to more than one level in an organization. Middle managers direct the activities of other managers and sometimes also those of operating employees. Middle managers' principal responsibilities are to direct the activities that implement their organizations' policies and to balance the demands of their superiors with the capacities of their subordinates. A plant manager in an electronics firm is an example of a middle manager. TOP MANAGERS — Composed of a comparatively small group of executives, top management is responsible for the overall management of the organization. It establishes operating policies and guides the organization's interactions with its environment. Typical titles of top managers are "chief executive officer," "president," and "senior vicepresident." Actual titles vary from one organization to another and are not always a reliable guide to membership in the highest management 2 classification. As can be seen from this description, a distinction exists between those who have the authority to devise, implement and control strategic and operational policies (top and middle managers) and those whose task is simply to ensure that such policies are carried out by the rank-and-file employees of an organization (first-level managers/supervisors). What distinguishes them from the rank-and-file employees is that they act in the interest of the employer in supervising such rank-and-file employees. "Managerial employees" may therefore be said to fall into two distinct categories: the "managers" per se, who compose the former group described above, and the "supervisors" who form the latter group. Whether they belong to the first or the second

1

kapisanan ng mga kargador sa pier
30

category, managers, vis-a-vis employers, employees.

are,

likewise,

Unlike supervisors who basically merely direct operating employees in line with set tasks assigned to them, route managers are responsible for the success of the company's main line of business through management of their respective sales teams. Such management necessarily involves the planning, direction, operation and evaluation of their individual teams and areas which the work of supervisors does not entail. The route managers cannot thus possibly be classified as mere supervisors because their work does not only involve, but goes far beyond, the simple direction or supervision of operating employees to accomplish objectives set by those above them. They are not mere functionaries with simple oversight functions but business administrators in their own right. 2. No, Art. 245, insofar as it prohibits managerial employees from forming, joining or assisting labor unions, does not violate Art. III, §8 of the Constitution Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. — Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-andfile employees but may join, assist or form separate labor organizations of their own. This provision is the result of the amendment of the Labor Code in 1989 by R.A. No. 6715, otherwise known as the Herrera-Veloso Law. Unlike the Industrial Peace Act or the provisions of the Labor Code which it superseded, R.A. No. 6715 provides separate definitions of the terms "managerial" and "supervisory employees," as follows: Art. 212. Definitions. . . . (m) "managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire transfer, suspend, lay off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book. Although the definition of "supervisory employees" seems to have been unduly restricted to the last phrase of the definition in the Industrial Peace Act, the legal significance given to the phrase "effectively recommends" remains the same. In fact, the distinction between top and middle managers, who set management policy, and front-line supervisors, who are merely responsible for ensuring that such policies are carried out by

the rank and file, is articulated in the present definition. When read in relation to this definition in Art. 212(m), it will be seen that Art. 245 faithfully carries out the intent of the Constitutional Commission in framing Art. III, §8 of the fundamental law. Nor is the guarantee of organizational right in Art. III, §8 infringed by a ban against managerial employees forming a union. The right guaranteed in Art. III, §8 is subject to the condition that its exercise should be for purposes "not contrary to law." In the case of Art. 245, there is a rational basis for prohibiting managerial employees from forming or joining labor organizations. As Justice Davide, Jr., himself a constitutional commissioner, said in his ponencia inPhilips Industrial 31 Development, Inc. v. NLRC: In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or joint a labor union equally applies to them. In Bulletin Co., Inc. v. Hon. Augusto Sanchez, elaborated on this rationale, thus: Publishing Court

this

. . . The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial 32 employees in Union membership. To be sure, the Court in Philips Industrial was dealing with the right of confidential employees to organize. But the same reason for denying them the right to organize justifies even more the ban on managerial employees from forming unions. After all, those who qualify as top or middle managers are executives who receive from their employers information that not only is confidential but also is not generally available to the public, or to their competitors, or to other employees. It is hardly necessary to point out that to say that the first sentence of Art. 245 is unconstitutional would be to contradict the decision in that case. WHEREFORE, the petition is DISMISSED.

2

kapisanan ng mga kargador sa pier
40

Separate Opinions DAVIDE, JR., J., concurring and dissenting; I concur with the majority that the "route managers" of private respondent Pepsi-Cola Products Philippines, Inc. are managerial employees. However, I respectfully submit that contrary to the majority's holding, Article 245 of the Labor Code is unconstitutional, as it abridges Section 8, Article III of the Constitution. It is then indubitably clear from the foregoing that the intent of the Constitutional Commission was to abrogate the law prohibiting managerial employees from joining, assisting, or forming unions or labor organizations. In this regard, there is absolutely no need to decipher the intent of the framers of the 1987 Constitution vis-a-vis Article 245 (originally 246) of the Labor Code, there being no ambiguity or vagueness in the wording of the present Section 8, Article III of the 1987 Constitution. The provision is clear and written in simple language; neither were there any confusing debates thereon. More importantly, the purpose of Commissioner Lerum's amendments was unequivocal: he did not merely intend an implied repeal, but an express repeal of the offending article of the Labor Code. The approval of the amendments left no doubt whatsoever, as faithfully disclosed in the Records of the Constitutional Commission, that all employees meaning rankand-file, supervisory and managerial — whether from the public or the private sectors, have the right to form unions for purposes not contrary to law. It is then indubitably clear from the foregoing that the intent of the Constitutional Commission was to abrogate the law prohibiting managerial employees from joining, assisting, or forming unions or labor organizations. In this regard, there is absolutely no need to decipher the intent of the framers of the 1987 Constitution vis-a-vis Article 245 (originally 246) of the Labor Code, there being no ambiguity or vagueness in the wording of the present Section 8, Article III of the 1987 Constitution. The provision is clear and written in simple language; neither were there any confusing debates thereon. More importantly, the purpose of Commissioner Lerum's amendments was unequivocal: he did not merely intend an implied repeal, but an express repeal of the offending article of the Labor Code. The approval of the amendments left no doubt whatsoever, as faithfully disclosed in the Records of the Constitutional Commission, that all employees meaning rankand-file, supervisory and managerial — whether from the public or the private sectors, have the right to form unions for purposes not contrary to law. PUNO, J., separate concurring; To declare Article 245 of the Labor Code unconstitutional cuts deep into our existing industrial life and will open the floodgates to unionization at all levels of the industrial hierarchy. Such a ruling will wreak havoc on the existing set-up between management and labor. If all managerial employees will be allowed to unionize, then all who are in the payroll of the company, starting from the president, vice-president, general managers and everyone, with the exception of the directors, may go on strike or picket the

employer. Company officers will join forces with the supervisors and rank-and-file. Management and labor will become a solid phalanx with bargaining rights that could be 41 enforced against the owner of the company. The basic opposing forces in the industry will not be management and labor but the operating group on the one hand and the stockholder and bondholder group on the other. The industrial problem defined in the Labor Code comes down to a contest over a fair division of the gross receipts of industry between 42 these two groups. And this will certainly bring ill-effects on our economy. VITUG, J., separate concurring and dissenting; I submit, with due respect, that the members of petitioning union, not really being "managerial employees" in the true sense of the term, are not disqualified from forming or joining labor organizations under Article 245 of the Labor Code. I submit, accordingly, that, firstly, the members of petitioner union or the so-called route managers, being no more than supervisory employees, can lawfully organize themselves into a labor union within the meaning of the Labor Code, and that, secondly, the questioned provision of Article 245 of the Labor Code has not been revoked by the 1987 Constitution. (CLAU)

3

Independent contractors often present themselves to possess unique skills. but not conclusive. crew and airtime are not the “tools and instrumentalities” Sonza needed to perform his job. The Agreement does not require Sonza to comply with the rules and standards of performance prescribed for employees of ABS-CBN. He complained for non-payment of his salaries. crew and airtime needed to broadcast the “Mel & Jay” programs. (b) the payment of wages. Sonza further contends that ABS-CBN exercised control over his work by supplying all equipment and crew. which the NLRC denied as well. 13th month pay. travel allowance and amounts due under the Employees Stock Option Plan (ESOP). Clearly. It also stated that he is waiving and renouncing recovery of the remaining amount stipulated but reserves the right to seek recovery of the other benefits under said Agreement. Being an exclusive talent does not by itself mean that Sonza is an employee of ABS-CBN. Sonza appealed to the NLRC which rendered its Decision affirming the Labor Arbiter’s decision. To perform his work. Ruling: There is no employer-employee relationship between Sonza and ABS-CBN. ABS-CBN did not instruct Sonza how to perform his job. However. signing bonus. because of his unique skills. SONZA only needed his skills and talent. (DEUS) 4 . The records do not show that ABS-CBN exercised any supervision and control over how Sonza utilized his skills and talent in his shows. not to employees of radio and television stations. In the broadcast industry. The code imposed on Sonza refers to KBP code. Sonza insists that the “exclusivity clause” in the Agreement is the most extreme form of control which ABSCBN exercised over him. ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties but the Labor Arbiter denied the motion to dismiss. Lastly. Broadcasters are not necessarily employees of radio and television stations. MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as talent for radio and television. the equipment. The specific selection and hiring of Sonza. Sonza urges us to rule that he was ABS-CBN’s employee because ABS-CBN subjected him to its rules and standards of performance. and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. service incentive leave pay. ABS-CBN did not assign any other work to Sonza. Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee. (c) the power of dismissal. Referred to in the Agreement as “AGENT. ABS-CBN Facts: ABS-CBN signed an Agreement with Mel and Jay Management and Development Corporation (MJMDC). What Sonza principally needed were his talent or skills and the costumes necessary for his appearance. ABS-CBN could not retrench Sonza because ABS-CBN remained obligated to pay his talent fees during the life of the Agreement. If Sonza did not possess such unique skills. informing them that he irrevocably resigns in view of recent events concerning his programs and career. Sonza had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. whether to broadcast the final product or not. Even if it suffered severe business losses. Issue: WON there is an employer-employee relationship between Sonza and ABS-CBN. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. Sonza wrote a letter to ABS-CBN. In effect. ABS-CBN engaged Sonza’s services specifically to co-host the “Mel & Jay” programs.kapisanan ng mga kargador sa pier SONZA vs. expertise or talent to distinguish them from ordinary employees. the present case does not call for an application of the Labor Code provisions but an interpretation and implementation of the May 1994 Agreement. there would be no need for the parties to stipulate on benefits which the law automatically incorporates into every employer-employee contract. If Sonza were ABSCBN’s employee. ABS-CBN would not have entered into the Agreement with Sonza but would have hired him through its personnel department just like any other employee. is a circumstance indicative. Sonza failed to show that ABS-CBN could terminate his services on grounds other than breach of contract. talent and celebrity status. A radio broadcast specialist who works under minimal supervision is an independent contractor. The Labor Arbiter then considered the case submitted for resolution and rendered his Decision dismissing the complaint for lack of jurisdiction. Clearly. ABSCBN supplied the equipment. such as retrenchment to prevent losses as provided under labor laws. Sonza filed a motion for reconsideration. talent and celebrity status not possessed by ordinary employees. ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. Sonza filed a complaint against ABS-CBN before the DOLE. ABS-CBN’s control was limited only to the result of Sonza’s work. Hence this present petition. The Agreement stipulates that Sonza shall abide with the rules and standards of performance “covering talents” of ABS-CBN. This circumstance indicates an independent contractual relationship between Sonza and ABS-CBN. Whatever benefits he enjoyed arose from contract and not because of an employeremployee relationship. and not on the Labor Code. separation pay. No doubt. exclusivity is not necessarily the same as control. Sonza’s cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the regular courts. The KBP code applies to broadcasters. Sonza’s claims are all based on the May 1994 Agreement and stock option plan. All the talent fees and benefits paid to Sonza were the result of negotiations that led to the Agreement. The acts of the station are violative of the Agreement and such letter will serve as a notice rescission of said Agreement. of an independent contractual relationship.

he was not among the known survivors of that sinking and had been missing since then. and the parties getting specific shares for their respective contributions. There is no showing that outside of their one third share. Respondents filed with the SSC a petition for social security coverage and payment of contributions in order to avail of the benefits accruing from the death of Fermin. Bienvenido Orense. They only share in their own catch produced by their own efforts. No compelling reason whatsoever is shown by petitioner for this Court to reverse the SSC’s findings and conclusions. are accorded respect and even finality 8 by this Court. Petitioner denied its liability. HELD: The issue of whether or not an employer-employee relationship exists in a given case is essentially a question of 6 fact. owners of the ill-fated fishing boat. Thus. Petitioner’s claims are a mere reiteration of arguments unsuccessfully raised before the SSC and the CA. vs. SPOUSES WELLINGTON and FLORDELIZA BROGADA. or fee of the pilot and crew-members. 5 . after which. they merely wait for the boat's return and receive their share in the catch. where there is an employer-employee relationship" (Sec. It appears to us therefore that the undertaking is in the nature of a joint venture. was a registered member-employer. Act 1161. Whether there was an employer-employee relationship between petitioners' deceased son.R. filed a petition with the Social Security Commission against Reynaldo Mercado and Marcelino Cosuco. The latter perform no service for the boat-owners. neither the pilots nor the crew-members receive compensation from boat-owners. The his parents. Orense. 2006 ASIATIC DEVELOPMENT CORPORATION. Orense for one of petitioner’s clients when he was shot and killed. was employed as "tripulante" (crew member) of the fishing boat "F/B Saint Theresa". Social Security System (SSS) filed a petition in intervention showed that "F/B Saint Theresa". An employee is defined as a "person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services. with the boat-owner supplying the boat and its equipment (sic). ISSUE: WON ee-er relationship exists. Respondent Cosuco denied all and that he already sold the fishing boat to respondent Mercado. owned by Marcelino Cosuco and operated by Reynaldo Mercado. petitioner is liable for unpaid social security contributions. as amended by Rep. They alleged that Fermin worked as survey aide under Engr. as affirmed by the CA. salary. If it gives no return. ISSUE: 1. CA TOPIC: employer-employee relationship FACTS: Arturo Villavilla. a person who joins the outfit is entitled to a share or participation in the fruit of the fishing trip. It claimed that Fermin was the employee of Engr. Fermin was working on a project with Engr. the latter should be held liable in damages equivalent to the benefits due the petitioners for failure to report Arturo for coverage pursuant to Social Security Act. Social Security Commission issued an Order dismissing the petition for lack of cause of action. and the pilot and crew-members contributing the necessary labor. respondents. the boat-owners obviously are not responsible for the wage. and that in the event petitioners succeeded in proving the employment of Arturo with private respondents. (FAITH) ANDRES VILLAVILLA and ESTER GADIENTE VILLAVILLA vs. Both the SSC and CA found that Fermin was petitioner’s employee. In petitions for review on certiorari under Rule 45.kapisanan ng mga kargador sa pier G. Their sole participation in the venture is the furnishing or delivery of the equipment used for fishing. petitioner. Act 2658). Rep. No. Factual findings of quasi-judicial bodies like the SSC. by private respondents for not registering Arturo Villavilla with the System as their employee as mandated by law. as amended. herein petitioners. While this Court has recognized several 9 exceptions to this rule. For his part. 1996. if there is any. It argued that there was no employer-employee relationship between it and Fermin. but mainly for their own benefit. the boat-owners have anything to do with the distribution of the rest of the catch among the pilots and the crew members. HELD: 1. when adopted and confirmed by the CA and if supported by substantial evidence. When the boat sank off in Palawan.whether there was a violation of the Social Security Act. the men get nothing. none of these exceptions finds application here. petitioner’s geodetic engineer. son of petitioners. In the undertaking in question. In the present case. The same was affirmed by CA. 8[d]. FACTS: Respondents Wellington and Flordeliza Brogada are the parents of Fermin B. 169136 July 14. for death compensation benefits of Arturo whom respondents failed to register as their employee. only questions of law may be raised by the parties and passed upon 7 by this Court. Brogada who was allegedly employed 4 by petitioner Asiatic Development Corporation from July 1994 up to his death in November 14. Arturo Villavilla 2.

exercised no power of dismissal over Arturo Villavilla. respondent as well as intervenor are not answerable to petitioners for any death benefits under the law. (LORI) 6 .kapisanan ng mga kargador sa pier The existence of employer-employee relationship are not present in the case at bar. the “control test”. it is clear that there was no employeremployee relationship between petitioner's son Arturo and private respondent Mercado. including the petitioners. JCT Group. A fortiori. save for its conclusion that petitioners were absorbed by. Save for this conclusion. assailed decision affirmed. As such. neither had he any power of control or had reserved the right to control Arturo Villavilla as to the result of the work to be done as well as the means and methods by which the same is to be accomplished. As mentioned earlier. Thereafter. De Soleil & American Inter-Fashion Corp. & who exercises control in the methods & the results by w/c the work is accomplished. In the case before Us. is the most important. 2. Indeed. who pays their wages. De Soleil ceased business operations. & Cuevas. PCGG. and there was no such uniform salary involved. The test for determining an ErEe relationship hinges on resolving who has the power to select employees. In finding for petitioners.whether or not it partook only of a consultancy agreement. (KICIANG) Miguel v. In resolving the status of a MOA. Following the EDSA Revolution. When the MOA expired. the only way to find out whether Respondents JCT & Cuevas are liable to petitioners is by remanding the case to the lower court. private respondent Reynaldo Mercado had no connection with the selection and engagement of Arturo Villavilla. (AIFC) took over Glorious Sun’s manufacturing plant. JCT Group. facilities & equipment & absorbed its employees. the labor arbiter made no determination whether there was Er-Ee relationship between respondents & petitioners &. Arturo could not be made subject of compulsory coverage under the Social Security Act. The NLRC modified the labor arbiter’s decision by absolving Glorious Sun from liability & dismissing respondents’ appeal. It is therefore imperative to determine the nature of the MOA --. AIFC. Inc. Issue: Whether the labor arbiter & the NLRC gravely abused their discretion when they ruled in favor of petitioners without determining the existence of an Er-Ee relationship between them & respondents Held: Yes. The defense of respondents is anchored on an alleged lack of ErEe relationship w/ petitioners as stipulated in the former’s MOA w/ De Soleil. the labor arbiter considered them regular employees for the reason that ‘they performed duties. The Labor Arbiter decided in favor of petitioners. the test for determining an ErEe relationship has to be applied. whether the former assumed the obligations of the latter’s previous employers. responsibilities & functions necessary & desirable to the business of garments manufacturing & exportation & had been also working for more than a year at the time of the cessation of business operation. Petition denied.. in which no ErEe relationship existed between respondents & petitioners. who has the power to dismiss them. or their work continued under JCT. much less private respondent Cosuco. hence. Glorious Sun. It found no factual basis for the ruling that JCT had become the employer of petitioners after the cessation of operations of Glorious Sun. JCT. effectively terminating petitioners’ employment. JCT further claims that any relationship w/ De Soleil & the latter’s employees was severed upon the termination of the MOA. if so. The CA reversed the decision & remanded the case to the Labor Arbiter for further proceedings. (JCT) & De Soleil executed a Management & Operating Agreement (MOA) for the purpose of servicing De Soleil’s export quota & preserve its profitability. Inc. private respondents cannot be said to have violated said law when they did not register him with the Social Security System. The NLRC decision is also silent on the basis for its ruling that JCT became the employer of petitioners after Glorious Sun ceased operations. The last factor. Facts: Glorious Sun was a garment exporter until it folded up. Petitioners filed complaints for illegal dismissal & payment of backwages & other monetary claims before the NLRC against De Soleil. the PCGG sequestered De Soleil & AIFC & took over their assets & operations.

That. a corporation engaged in the business as Management Service Consultant undertaking and managing for a fee projects. upon the recommendation of the UNION. if any. appeal. informing them that they need not report for work anymore after April 14. offered to the other employees who may wish to avail of the separation package due to the reconstruction of Wack Wack. NATIONAL LABOR RELATIONS COMMISSION. Wack Wack filed a notice with the DOLE on April 14. NLRC’s ruling that BSMI is a labor-only contractor hence. BSMI saw that the positions of Cagasan and Dominguez were redundant as this was being handled by another department. in addition. In view of the reconstruction of the whole clubhouse complex. The two were terminated. Consequently. BSMI hired the respondents. Its Articles of Incorporation proves its sufficient capitalization. and BUSINESS STAFFING AND MANAGEMENT. namely. Respondent FACTS: A fire destroyed a large portion of the main clubhouse of the Wack Wack Golf and Country Club (Wack Wack).. Nowhere does it appear in the Agreement that the petitioner assured the respondents of continuous employment in Wack Wack. INC. including its kitchen. regardless of the number of years of service rendered. the cash equivalent of unused vacation and sick leave credits. The respondents signed their respective release and quitclaims after receiving their money benefits. CAGASAN. and the UNION officers and the UNION lawyer on the other. vs. the petitioner cannot be validly ordered to reinstate the respondents and pay them their claims for backwages. computed without premium. When the respondents voluntarily signed their quitclaims and accepted the separation package offered by the petitioner. the petitioner is principally liable is not correct. Notices to 54 employees were also sent out. Petitioners. Hence. proportionate 13th month pay. MARTINA G. and not with Wack Wack. Inc. The right to hire and fire is another element of the employeremployee relationship which actually existed between the respondents and BSMI. already ceased to be employees of the petitioner. It must be recalled that said respondents availed of the special separation package offered by the petitioner. and other benefits. All qualified employees who may have been separated from the service under the above package shall be considered under a priority basis for employment by concessionaires and/or contractors. ISSUE: Does NLRC committed grave abuse of discretion in ordering Wack Wack to reinstate the respondents Cagasan and Dominguez with backwages when indubitable evidence shows 7 . CARMENCITA F. Respondents file an illegal dismissal case before the Labor Arbiter but dismissed it. they. Qualified employees were given priority in being hired by its concessionaires and/or contractors such as BSMI when it entered into a management contract with the petitioner. 1997. There being no employer-employee relationship between the petitioner and respondents Cagasan and Dominguez. (NICOLE) • Respondents Dominguez and Cagasan availed of the benefits. They were further told that they would be informed once full operations in Wack Wack resume. said employees shall also receive the other benefits due them. When appealed to NLRC. in the amount equivalent to one-and-one-half months salary for every year of service. Wack Wack Golf Employees Union and Wack wack officers made an agreement that: • The affected employees of F & B who are members of the UNION hereby agree to accept the special separation benefit package agreed upon between the CLUB management on the one hand. it reversed the decision of the Arbiter and said that the respondents be reinstated. 1997 but that they would still be paid their salaries up to May 14. The Club may even persuade an employee-applicant for availment under the package to remain on his/her job. It had provided management services to various industrial and commercial business establishments. the latter have no cause of action for illegal dismissal and damages against the petitioner. likewise. thenceforth. Pursuant to the agreement. Wack Wack entered into a Management Contract with Business Staffing and Management. but was. BSMI is an independent contractor. 1997 that it was going to suspend the operations of the Food and Beverage (F & B) Department one (1) month thereafter. However. or be assigned to another position. and even by the Club upon full resumption of operations. This special separation package was thought of and agreed by the two parties (Wack Wack and the Union) after a series of discussions and negotiations to avert any labor unrest due to the closure of Wack Wack. Priority was given to the employees of the F & B Department. DOMINGUEZ. that the said respondents were no longer employees of Wack Wack when they filed their complaints with the Labor Arbiter? HELD: YES.kapisanan ng mga kargador sa pier WACK WACK GOLF & COUNTRY CLUB. (BSMI).

and [4] the power to control the employee’s conduct. De Vera was an “independent contractor” and that he “was not dismissed but rather his contract with [PHILCOM] ended when said contract was not renewed after December 31. renewal of the contract was only made verbally. If he were an employee he could not negotiate as to his hours of work. on a finding that De Vera is Philcom’s “regular employee” and accordingly directed the company to reinstate him to his former position without loss of seniority rights and privileges and with full backwages from the date of his dismissal until actual reinstatement.[10] modifying that of the NLRC by deleting the award of traveling allowance. for the years 1995 and 1996.[19] It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary. informed De Vera of its decision to discontinue the latter’s “retainer’s contract with the Company effective at the close of business hours of December 31. petitioner. vs. After more than ten years of services to PHILCOM.[21] Here. respondent need not remit anything to the SSS in favor of the complainant. to wit: [1] the selection and engagement of the employee. GARCIA. Remarkably absent from the parties’ arrangement is the element of control. Philcom’s present recourse on its main submission that Issue Whether an employer-employee relationship exists between petitioner and respondent. The parties agreed and formalized respondent’s proposal in a document denominated as RETAINERSHIP CONTRACT[4] which will be for a period of one year subject to renewal. Held In a long line of decisions. He likewise professed that since he was not conversant with labor laws. is a corporation engaged in the business of communication services and allied activities. the 8 . RICARDO DE VERA. [3] the power of dismissal. has invariably adhered to the four-fold test. therein proposing his plan of works required of a practitioner in industrial medicine. in determining the existence of an employer-employee relationship.[22] In fine. the Court of Appeals rendered a decision. he did not give much attention to the designation as anyway he worked on a full-time basis and was paid a basic monthly salary plus fringe benefits. De Vera. like any other regular employees of Philcom. on the rationale that as a “retained physician” under a valid contract mutually agreed upon by the parties. It appears that on 15 May 1981. reversed (the word used is “modified”) that of the Labor Arbiter. Eulau” and that respondent’s “retainer fee” will be at P4. De Vera’s status vis a vis petitioner when the latter terminated his engagement. Labor Arbiter Ramon Valentin C. He averred that he was designated as a “company physician on retainer basis” for reasons allegedly known only to Philcom. We may add that the records are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees.”[18] Clearly.00 a month. and ordering payment of separation pay to De Vera in lieu of reinstatement. CA Philcom then went to the Court of Appeals on a petition for certiorari. thru a letter[6] bearing on the subject boldly written as “TERMINATION – RETAINERSHIP CONTRACT”. the latter. (PhilCom). [2] the payment of wages. This clearly shows that the complainant never considered himself an employee of PHILCOM and thus.. the complainant never bothered to ask the respondent to remit his SSS contributions. PETITIONER's claim On 22 January 1997. Labor arbiter On 21 December 1998. considered to be the most important element. This shows that the respondent PHILCOM did not have control over the schedule of the complainant as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. INC. respondent. Reyes came out with a decision[7] dismissing De Vera’s complaint for lack of merit. not to mention the fact that respondent’s work hours and the additional compensation therefor were negotiated upon by the parties. alleging that that he had been actually employed by Philcom as its company physician since 1981 and was dismissed without due process. Said contract was renewed yearly. it being made clear therein that respondent will cover “the retainership the Company previously had with Dr. Inc. via a letter. or the so-called “control test”. The turning point in the parties’ relationship surfaced in December 1996 when Philcom. 1) The tenor of his letter indicates that the complainant was proposing to extend his time with the respondent and seeking additional compensation for said extension.kapisanan ng mga kargador sa pier PHILIPPINE GLOBAL COMMUNICATIONS. On 12 September 2002. petitioner had no control over the means and methods by which respondent went about performing his work at the company premises. J. He could even embark in the private practice of his profession. At the crux of the controversy is Dr.[5] The retainership arrangement went on from 1981 to 1994 with changes in the retainer’s fee.[15] the Court. the elements of an employer-employee relationship are wanting in this case. offered his services to the petitioner. whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished.000. while respondent Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. However. 1996” because management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. 1996”. This is proof that the complainant understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. in a decision[8] dated 23 October 2000.: Facts: Petitioner Philippine Global Communications. K. NLRC On De Vera’s appeal to the NLRC. De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC). Hence.

what applies here is the last paragraph of Article 157 which. not employ.[27] WHEREFORE. 2) The appellate court’s premise that regular employees are those who perform activities which are desirable and necessary for the business of the employer is not determinative in this case. to their retainership agreement as therein provided. The Secretary of Labor shall provide by appropriate regulations the services that shall be required where the number of employees does not exceed fifty (50) and shall determine by appropriate order hazardous workplaces for purposes of this Article. provides that the employer may engage the services of a physician and dentist “on retained basis”. with or without cause. The successive “retainership” agreements of the parties definitely hue to the very statutory provision relied upon by respondent. to stress. even without being hired as an employee.” As correctly observed by the petitioner. – It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of: (a) The services of a full-time registered nurse when the number of employees exceeds fifty (50) but not more than two hundred (200) except when the employer does not maintain hazardous workplaces. nothing is there in the law which says that medical practitioners so engaged be actually hired as employees. the petition is GRANTED and the challenged decision of the Court of Appeals REVERSED and SET ASIDE. Emergency medical and dental services. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement. as shown by their various “retainership contracts”. where no registered nurse is available. which thereby negates the element of control in their relationship. and argues that he satisfies all the requirements thereunder. a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. subject to such regulations as the Secretary of Labor may prescribe.kapisanan ng mga kargador sa pier parties themselves practically agreed on every terms and conditions of respondent’s engagement. and The services of a full-time physician. (ROBERT) (b) (c) Had only respondent read carefully the very statutory provision invoked by him. As such. only requires the employer “to retain”. and an emergency clinic. he would have noticed that in non-hazardous workplaces. we take it that any agreement may provide that one party shall render services for and in behalf of another.[24] adding that the law. Respondent takes no issue on the fact that petitioner’s business of telecommunications is not hazardous in nature. 3) Buttressing his contention that he is a regular employee of petitioner. when the number of employees exceeds two hundred (200) but not more than three hundred (300). The 21 December 1998 decision of the labor arbiter is REINSTATED. The services of a full-time registered nurse. while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees. For. the employer may engage the services of a physician “on retained basis. The provision relied upon reads: ART. no matter how necessary for the latter’s business. dentist and full-time registered nurse as well as a dental clinic.[25] 9 . and an infirmary or emergency hospital with one bed capacity for every one hundred (100) employees when the number of employees exceeds three hundred (300). respondent invokes Article 157 of the Labor Code. as written. in which case the services of a graduate first-aider shall be provided for the protection of the workers. a part-time physician and dentist. so can petitioner put an end. 157. With the recognition of the fact that petitioner consistently engaged the services of respondent on a retainer basis.

the instant petition. The management of the business is in the owner’s hands. These lack of valid cause and failure on the part of private respondent to comply with the twin-notice requirement underscored the illegality surrounding petitioners’ dismissal. illegal dismissal and illegal deduction of washing fees. NLRC granted aforesaid second motion for reconsideration ruling that it lacks jurisdiction over the case as petitioners and private respondent have no employeremployee relationship. No." Petitioners used to drive private respondent’s taxicabs every other day on a 24-hour work schedule under the boundary system. As consistently held by this Court. otherwise he would be responsible for the damages to the lessor. petitioners decided to form a labor union to protect their rights and interests. Neither were there two (2) written notices sent by private respondent informing each of the petitioners that they had been dismissed from work. A first motion for reconsideration was filed by the private respondent but was dismissed. Private respondent. (2) the payment of wages. In the case of jeepney owners/operators and jeepney drivers. set aside the judgment of the Labor Arbiter. RULING: YES. The Labor Arbiter dismissed said complaint for lack of merit. a domestic corporation engaged in the operation of "Goodman Taxi. the following are the four-fold test: ‘(1) the selection and engagement of the employee. petitioners are undoubtedly employees of private respondent because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of their employer. the fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. Hence. The just and authorized causes for termination of employment are enumerated under Articles 282. ISSUE: Whether or not there is an existence of an employer-employee relationship. inclusive of allowances..’ In a number of cases decided by this Court. Expectedly. refused to let petitioners drive their taxicabs. 283 and 284 of the Labor Code. The owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. can be dismissed only for just and authorized cause. we ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. and after affording them notice and hearing prior to termination.00 supposedly for the washing of the taxi units. an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages.R. Another motion for reconsideration was filed but this time. 119268. NLRC G. Private respondent admittedly regularly deducts from petitioners’ daily earnings the amount of P30. petitioners sought reconsideration of the labor tribunal’s decision which was denied. Hence. Petitioner filed with the Labor Arbiter a complaint against private respondent for unfair labor practice.kapisanan ng mga kargador sa pier JARDIN VS. There is an existence of an employer-employee relationship. On appeal to the NLRC. In the determination the existence of employer-employee relationship. termination of employment must be effected in accordance with law. and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. being employees of private respondent. In the instant case. (SYLVESTER) 10 . Hence. the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof. the former exercise supervision and control over the latter. February 23. The requirement of notice and hearing is set-out in Article 277 (b) of the said Code. Believing that the deduction is illegal. petitioners. private respondent had no valid cause to terminate the employment of petitioners. (3) the power of dismissal. We explained that in the lease of chattels. Philjama International Inc. 2000 FACTS: Petitioners were drivers of private respondent. Now. Under the law. upon learning about the plan of petitioners. and (4) the power of control the employees conduct.

a domestic corporation. ordering that he be reported as such for social security coverage and paid any corresponding benefits. WHEREFORE. . In the final analysis. avowedly coming to realize that indeed there was no employment relationship between them and the Club. By and large. review of which is sought. INTERMEDIATE APPELLATE COURT and FERMIN LLAMAR. . is reversed and set aside. the "Philippine Technical. that the intendment of such fact is to the contrary. . Even the group rotation of caddies is not absolute because a player is at liberty to choose a caddy of his preference regardless of the caddy's order in the rotation. ISSUE: Whether or not persons rendering caddying services for members of golf clubs and their guests in said clubs' courses or premises are the employees of such clubs and therefore within the compulsory coverage of the Social Security System (SSS). there appears nothing in the record to refute the petitioner's claim that: (Petitioner) has no means of compelling the presence of a caddy. . or another. Fermin Llamar and Raymundo Jomok. . The petition. From this Resolution appeal was taken to the Intermediate appellate Court which declared Fermin Llamar an employee of the Manila Gold and Country Club.. These are things beyond petitioner's control and for which it imposes no direct sanctions 18 on the caddies. It can happen that a caddy who has rendered services to a player on one day may still find sufficient time to work elsewhere. HELD:No. That which gave rise to the present petition for review was originally filed with the Social Security Commission (SSC) via petition of seventeen (17) persons who styled themselves "Caddies of Manila Golf and Country Club-PTCCEA" for coverage and availment of benefits under the Social Security Act as amended. . No pronouncement as to costs. is less a measure of employer control than an assurance that the work is fairly distributed. persons rendering caddying services for members of golf clubs and their guests in said clubs' courses or premises are not employees of such clubs and therefore not within the compulsory coverage of the Social Security System (SSS). It seems to the Court. and hence. and was eventually adjudicated by the SSC after protracted proceedings only as regards the two holdouts. the latter had not registered them as such with the SSS. INC. petitioner has no was of compelling the presence of the caddies as they are not required to render a definite number of hours of work on a single day. however. In the case before the SSC. He may work with any other golf club or he may seek employment a caddy or otherwise with any entity or individual without restriction by petitioner. The case continued. Clerical. The IAC would point to the fact that the Club suggests the rate of fees payable by the players to the caddies as still another indication of the latter's status as employees. vs. that as such caddies. Commercial Employees Association. (CLAU) 11 . he may then leave the premises of petitioner and go to such other place of work that he wishes (sic). The Court agrees with petitioner that the group rotation system so-called. all initiated by or on behalf of herein private respondent and his fellow caddies. docketed as SSC Case No. The Commission dismissed the petition for lack of merit. the petitioners were not subject to the direction and control of the Club as regards the manner in which they performed their work. . petitioner. . "PTCCEA" being the acronym of a labor organization. it being hereby declared that the private respondent. the respondent Club filed answer praying for the dismissal of the petition. engagement in some other place. caddies by occupation." with which the petitioners claimed to be affiliated. 5443. Subsequently. Fermin Llamar. Or a caddy who is on call for a particular day may deliberately absent himself if he has more profitable caddying.kapisanan ng mga kargador sa pier MANILA GOLF & COUNTRY CLUB. they were not the Club's employees. A caddy is not required to exercise his occupation in the premises of petitioner. . Under such circumstances. is not an employee of petitioner Manila Golf and Country Club and that petitioner is under no obligation to report him for compulsory coverage to the Social Security System. alleging in substance that the petitioners. FACTS: This case originally involved three separate proceedings. were allowed into the Club premises to render services as such to the individual members and guests playing the Club's golf course and who themselves paid for such services. all but two of the seventeen petitioners of their own accord withdrew their claim for social security coverage. alleged in essence that although the petitioners were employees of the Manila Golf and Country Club. respondents. the Decision of the Intermediate Appellant Court. showing that the Club has not the measure of control over the incidents of the caddies' work and compensation that an employer would possess. a caddy who is absent when his turn number is called simply losing his turn to serve and being assigned instead the last number for the 17 day.

Shortly. 1995 FACTS: This is a petition assailing the petitioner’s dismissal as Medical Specialist I of the National Center for Mental Health as illegal and violative of the constitutional provision on security of tenure. It bears emphasis that at the time of petitioner's promotion to the position of Medical Specialist I (temporary) in August of 1988. Soon. the appointment was for a definite and renewable period which. non-renewal of petitioner’s appointment as Medical Specialist I was recommended. however. 119. Finally.O. it is crystal clear. On August 20. Petitioner is guilty of estoppels or laches. He is estopped from insisting upon a right or claim which he had plainly abandoned when he. when it was not renewed. On August 1988. he was appointed to the position of Senior Resident Physician in a temporary capacity.R. from the facts of the case at bench. 347 which required board certification as prerequisite for renewal of specialist positions in various medical centers and it also extend appointments of Medical Specialist positions in cases where the termination of medical specialist who failed to meet the requirements for board certification. The petitioner was not illegally dismissed. of Health issued Department Order No. Under the reorganization. from all indications. The Solicitor General is correct in contending that the petitioner’s temporary appointment after the reorganization were valid and did not violate his constitutional right of security of tenure. he was promoted as Senior Resident Physician until the Ministry of Health reorganized the NCMH pursuant to E. allowed to continue in the service.kapisanan ng mga kargador sa pier FELIX VS. The petitioner filed a petition with the Merit System Protection Board alleging harassment by respondents. and receive his salary. that the petitioner accepted a temporary appointment (Medical Specialist I). did not involve a dismissal but an expiration of the petitioner's term. The Dept. Petitioner joined the NCMH as a Resident Physician in June 1979. 109704 January 17. ISSUE: Whether or not the petitioner was illegally dismissed from his position and that it is not a violative of his constitutional right of security of tenure. No. obviously without reservation. Stringent standards and requirements for renewal of specialistrank positions or for promotion to the next post-graduate residency year are necessary because lives are ultimately at stake. The failure to assert a claim or the voluntary acceptance of another position in government. leads to a presumption that the civil servant has either given up his claim of has already settled into the new position. As respondent Civil Service Commission has correctly pointed out. 1991. Petitioner’s insistence on being reverted back to the status quo prior to the reorganizations would therefore be akin to a college student asking to be sent to high school and staying there. Said decision was appealed to the Civil Service Commission which dismissed the same including the Motion for Reconsideration the petitioner has filed after which brought this appeal. BUENASEDA G. enthusiastically accepted the promotion. he was advised by the hospital authorities to vacate his cottage. no objection was raised by him about the change of position or the temporary nature of designation. it was later dismissed for lack of merit. He was. however. after reviewing petitioner's service record. RULING: NO. he was elevated to the position of Medical Specialist I (Temporary Status) which was renewed the following year. (SYLVESTER) 12 . allowances and other benefits even after being informed of the termination of his appointment.

Rule 45 of the 1997 Rules of Civil Procedure. Oscar Pasquin.. abandoned his job. the second element is the more determinative factor and should be manifested by some overt acts. a petition for review shall only raise questions of law considering that the findings of fact of the Court of Appeals are. a habitual absentee. This was the unanimous factual finding of the labor tribunals and the Court of Appeals. petitioner impliedly admitted that it was in fact the employer of private respondent. When he reported back to work. petitioner fell short of proving the requisites. requirement of notice. The reason is because labor officials are deemed to have acquired expertise in matters within their jurisdiction and therefore. Rule XXIII. No. According to the control test. ROGELIO EJANDRA. when Ejandra informed his manager that he was ready to report for work. One day. v. the latter gave him money to redeem his license. he was told that the company was still studying whether to allow him to drive again. Book V of Department Order No. ISSUES: 1. When he informed petitioners general manager of such fact. private respondent filed a complaint for illegal dismissal against petitioner.) WON respondent abandoned his work. Petitioner claimed that private respondent. 148508 : May 20. (b) A hearing or conference during which the employee concerned. as a general rule. The fact that petitioner paid private respondent on commission basis did not rule out the presence of an employee-employer relationship. with the assistance of counsel if the employee so desires. Petitioner is barred to negate the existence of an employer-employee relationship. petitioners manager told him to wait until his services were needed again. Guadalupe Branch. present his evidence or rebut the evidence presented against him. Private respondent was likewise accused of causing damage to the bus he used to drive. After he was apprehended for a traffic violation. HELD: NO. In the case at bar. Later on. 2. with petitioner being paid on commission basis. This doctrine applies with greater force in labor cases where the factual findings of the labor tribunals are affirmed by the Court of Appeals. Article 97(f) of the Labor Code clearly provides that an employees wages can be in the form of commissions. Petitioner. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination. their factual findings are generally accorded not only respect but also finality. conclusive upon and binding on this Court. By adopting said rulings. Petitioner maintained that private respondent was justifiably dismissed due to abandonment of work.kapisanan ng mga kargador sa pier G. Considering himself dismissed. 2004 R TRANSPORT CORPORATION. FACTS: Private respondent Rogelio Ejandra worked as a bus driver of petitioner bus corporation got almost six years. 2. In addition to the fact that petitioner had no valid cause to terminate private respondent from work. two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason and (2) a clear intention to sever the employer-employee relationship. and giving to said employee reasonable opportunity within which to explain his side. In its petition filed before this Court. the power to dismiss an employee is one of the indications of an employer-employee relationship. We disagree. Petitioner further argued that private respondent was not an employee because theirs was a contract of lease and not of employment. Of the two. Section 2. the following standards of due process shall be substantially observed: I. is given opportunity to respond to the charge. He went to the LTO office everyday but it was only after a week that he was able to get back his license. petitioner insists that the parties agreement was for a contract of lease of services. did not release his license until after a week. Ejendra immediately reported the incident to his manager. HELD: Under Section 1. the termination of the contract of lease of services did not require petitioner to respect private respondents rights to notice and hearing. the labor arbiter. that. private respondent abandoned his job and lied about the confiscation of his license. it violated the latters right to procedural due process by not giving him the required notice and hearing. he was apprehended by an LTO officer for obstruction of traffic for which his license was confiscated. who gave him P500 to redeem his license but was able to retrieve his license only after a week.the NLRC and the Court of Appeals were unanimous in finding that private respondent worked as a driver of one of the buses of petitioner and was paid on a 10% commission basis. Respondent. Mr. In all cases of termination of employment. Standards of due process. and are binding on this Court. To begin with. 9 provides for the procedure for dismissal for just or authorized cause: SEC. petitioner invoked our rulings on the right of an employer to dismiss an employee for just cause. WON petitioner was the lessor of private respondent. Denying the existence of an employer-employee relationship. as such. We have no reason to disturb all these factual findings because they are amply supported by substantial evidence.R.[15 In the instant case. It is the employer who has the burden of proof to show a deliberate and unjustified refusal of the employee to resume his employment without any intention of returning. Petitioners claim that private respondent was legally dismissed for abandonment was in fact a negative pregnant: an acknowledgement that there was no mutual termination of the alleged contract of lease and that private respondent was its employee. and 13 . Mere absence is not sufficient.) WON respondent was dismissed with just cause. To constitute abandonment. According to petitioner. his license was confiscated. petitioners absence was justified because the LTO.

If termination is brought about by the completion of the contract or phase thereof. renewal premiums. specifying the ground or grounds for termination. If the appointment was terminated for any reason other than for cause. Aside from soliciting insurance for the petitioner. deposits on applications and payments on policy loans. NLRC FACTS: Petitioner entered into an agency contract with respondent Pantaleon de los Reyes authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which he would be paid compensation in the form of commissions.kapisanan ng mga kargador sa pier (c ) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances. De los Reyes was prohibited from working for other life insurance companies or with the government. Then petitioner and private respondent entered into another contract where the latter was appointed as Acting Unit Manager under its office the Cebu DSO V (157). In case of termination.. 1636. II. the acting unit manager would be reverted to agent status and assigned to any unit. In a written communication by petitioner to respondent De los Reyes. place and means of soliciting insurance. 14 . Private respondent worked concurrently as agent and Acting Unit Manager until he was notified by petitioner on 18 November 1993 that his services were terminated effective 18 December 1993. the foregoing notices shall be served on the employees last known address. grounds have been established to justify his termination. place and means of soliciting insurance. He could not also accept a managerial or supervisory position in any firm doing business in the Philippines without the written consent of petitioner. As in the previous agency contract. For termination of employment as based on authorized causes defined in Article 283 of the Code. organization and development within his designated territory of a sufficient number of qualified. Private respondent was also bound to turn over to the company immediately any and all sums of money collected by him. De los Reyes together with his unit force was granted freedom to exercise judgment as to time. III. the latter was urged to register with the Social Security System as a self-employed individual as provided under PD No. De los Reyes was also expressly obliged to participate in the companys conservation program. and violation of this stipulation was sufficient ground for termination of the contract. Respondent NLRC decided that respondent De los Reyes was under the effective control of petitioner in the critical and most important aspects of his work as Unit Manager. receive and collect initial premiums and balances of first year premiums.. It was similarly provided in the management contract that the relation of the acting unit manager and/or the agents of his unit to the company shall be that of independent contractor. If the termination is brought about by the failure of an employee to meet the standards of the employer in case of probationary employment. As such. It contained the stipulation that no employer-employee relationship shall be created between the parties and that the agent shall be free to exercise his own judgment as to time. the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department at least thirty days before the effectivity of the termination. Both petitioner and respondent NLRC treated the agency contract and the management contract entered into between petitioner and De los Reyes as contracts of agency. (FAITH) INSULAR LIFE ASSURANCE CO. Aside from soliciting insurance. Petitioner. and to supervise and coordinate the sales efforts of the underwriters in the active solicitation of new business and in the furtherance of the agencys assigned goals. competent and trustworthy underwriters. De los Reyes however was prohibited by petitioner from working for any other life insurance company. On 7 March 1994 he filed a complaint before the Labor Arbiter on the ground that he was illegally dismissed and that he was not paid his salaries and separation pay. no prior notice is required. private respondent was required to submit to the former all completed applications for insurance within ninety (90) consecutive days. As long as he was unit manager in an acting capacity.. it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. LTD. The contract was prepared by petitioner in its entirety and De los Reyes merely signed his conformity thereto. deliver policies. the duties and responsibilities of De los Reyes included the recruitment. vs. training.

The Labor Arbiter held that there was an ErEe relationship between the parties based on paragraph 6 of the Scope of Professional Services which showed that the company’s management team exercises control over the means & methods in the performance of petitioner’s duties. 2.[9] On the second test. finding that an ErEe relation between the parties existed. control of assignments and removal of agents under private respondents unit.200) was monthlystarting on the first month of the twelve (12) months of the appointment. Petitioner filed a complaint against Infinite Loop & Rabino before the NLRC for breach of contract of employment. furnishing of company facilities and materials as well as capital described as Unit Development Fund are but hallmarks of the management system in which herein private respondent worked. Exclusivity of service. capable of being expressed in terms of money. Complainant was required to meet certain manpower and production quotas. 31 Jan 2006 Carpio-Morales. petitioner. an ErEe relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved. above-quoted paragraph No. Infinite Loop Technology Corp. (a) selection and engagement of employee. as affirmed by the NLRC.kapisanan ng mga kargador sa pier ISSUE: Whether or not there is an existing employer-employee relationship between the two parties despite written contractual disavowals. A perusal of the appointment of complainant as Acting Unit Manager reveals that: 1. dismissed respondents’ appeal. Respondent (herein petitioner) controlled the assignment and removal of soliciting agents to and from complainants unit. Arrox Resources Corp. but also the manner & means to be used in reaching that end. be deemed as an exercise of control over the private respondent as these were merely directives that fixed the desired result without dictating the means or method to be employed in attaining it.. by letter to petitioner. J. a look at the provisions of the contract shows that private respondent was appointed as Acting Unit Manager only upon recommendation of the District Manager. Issue: Whether an ErEe relation existed between the parties Held: No. From the scope of petitioner’s professional services. (b) payment of wages. the so called “control test” is commonly regarded as the most crucial & determinative indicator of the presence of absence of an ErEe relationship. i. Rabino wrote petitioner that the project proponent. Complainant was to exclusively serve respondent company. 6 of the management contract. the last one. This obtaining. In determining the status of the management contract.e. Under Art. hence... The CA finding that petitioner was hired to render professional services for a specific project & her cause of action is for a sum of money on account of Infinite Loop’s alleged breach of contractual obligation to pay her agreed professional fee. the fourfold test on employment earlier mentioned has to be applied.It is worth considering that the payment of compensation by way of commission does not militate against the conclusion that private respondent was an employee of petitioner. To ascertain the existence of an ErEe relationship. furnished the details of her employment which included the Scope of Professional Services. 3. On the third and fourth test. as to the matter involving the power of dismissal and control by the employer. jurisprudence has invariably applied the 4-fold test. First test. This indicates that private respondent was hired by petitioner because of the favorable endorsement of its duly authorized officer. De los Reyes was not an employee but an independent contractor. Under the control test. GR No. (2) the payment of wages. price or commission basis. 6 of the "Scope of [petitioner’s] Professional Services" requiring her to "[m]ake reports and recommendations to the company management team regarding work progress. HELD: It is axiomatic that the existence of an employeremployee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the employee is an independent contractor when the terms of agreement clearly show otherwise. 97 of the Labor Code. there is no showing of a power of control over petitioner. whether fixed or ascertained on a time. The managers’ contract unquestionably demonstrate that the performance requirement imposed on De los Reyes was applicable quarterly while his entitlement to the free portion (P300) and the validated portion (P1. (c) power of dismissal. & (4) the presence of absence of the power of control. The NLRC. the latter of which is the most important of the test. through counsel. held that no ErEr relationship existed between the parties. Infinite Loop moved to dismiss the complaint on the ground that the NLRC has no jurisdiction over the parties & the subject matter as there was no ErEe relationship between them since the contract they entered into was one of services & not of employment. revisions and improvement of process design on a regular basis as required by company 15 .. to wit: (1) the manner of selection & engagement. Subsequently. by any stretch of imagination. Facts: Petitioner Almirez was hired as a Refinery Senior Process Design Engineer for a specific project by respondent Infinite Loop through its General Manager Rabino who. (KICIANG) Almirez v. The services to be performed by her specified what she needed to achieve but not on how she was to go about it. The very designation of the appointment of private respondent as acting unit manager obviously implies a temporary employment status which may be made permanent only upon compliance with company standards such as those enumerated under Sec. task. The following factual findings of the NLRC however contradict such claims. and. (3) the presence of absence of the power of dismissal. Of these 4. so-called four-fold test. collection of premiums. wrote Rabino demanding that respondent compensate her the total amount of her contract. 162401. Contrary to the finding of the Labor Arbiter. (d) power of control. there is no escaping the conclusion that private respondent Pantaleon de los Reyes was an employee of herein petitioner. petitioner asserts that its termination of De los Reyes was but an exercise of its inherent right as principal under the contracts and that the rules and guIdelines it set forth in the contract cannot. the NLRC & the Labor Arbiter have no jurisdiction over the complaint. have encountered re-organization & have not yet paid Infinite Loop for the project. wage shall mean however designated.

is bereft of a showing of power of control. (NICOLE) 16 . was not subject to control by the private respondent Tourist World Service. Inc. the existing economic conditions prevailing between the parties. The relationship here was a principal-agent but this does not mean that TWS may revoke this anytime. Lina Sevilla claims that a joint bussiness venture was entered into by and between her and appellee TWS with offices at the Ermita branch office and that she was not an employee of the TWS to the end that her relationship with TWS was one of a joint business venture. SEVILLA and LINA O. of the agent and the principal.Sevilla was found connected with the firm’s rival company and since the branch office was anyhow losing. we have considered. Tourist World Service. should be sentenced to pay moral damages for breach of contract under Articles 21 & 2219 of the Civil Code. TOURIST WORLD SERVICE. We rule therefore. and SEGUNDINA NOGUERA. The designation of the payments to petitioner as “salaries” is not determinative of the existence of an ErEe relationship.. in determining the existence of an employer-employee relationship. SEVILLA. and as such was designated manager.kapisanan ng mga kargador sa pier management team" does not "show that the company’s management team exercises control over the means and methods in the performance of her duties as Refinery Process Design Engineer. When neither the appellant Lina Sevilla nor any of her employees could enter the locked premises. Inc. appeal." if any.CANILAO. The corporate secretary. “Salary” is a general term defined as “a remuneration for services given”. a complaint wall filed by the herein appellants against the appellees with a prayer for the issuance of mandatory preliminary injunction. respondents-appellees. FACTS: Lessor Noguera enter into a contract of lease with Tourist World Services (TWS) for the establishment of a main branch. The trial court held that TWS is the true lessee and that SEvilla is only its employee. It is the contract of engagement of services which is the law between the parties. the most crucial and determinative indicator of the presence of an employer-employee relationship.. THE COURT OF APPEALS. ISSUE: Whether or not there is an employer-employee relationship between TWS and Sevilla? HELD: YES. There has been no uniform test to determine the evidence of an employer-employee relation. ELISEO S. "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. She even made herself solidarily liable in paying rentals that an ordinary employee will not do. (LORI) DR. 1962 to protect the interests of the Tourist World Service. being unable to contact Lina Sevilla. A payslip cannot prove the existence of an ErEe relationship between the parties. Sevilla was made solidarily liable for the prompt payment of monthly rents. Lina Sevilla. petitionersappellants. However. either as to the result of the enterprise or as to the means used. On one hand. TWS terminated the lease contract with Noguera. Inc. that for its unwarranted revocation of the contract of agency. like the inclusion of the employee in the payrolls. went over to the branch office finding the premises locked. The records will show that the petitioner. it is one coupled with an interest." which. and." Having hired petitioner’s professional services on account of her "expertise and qualifications" as petitioner herself proffers in her Position Paper. the agency having been created for mutual interest. INC. Hence. we have relied on the so-called right of control test. In general.. the company naturally expected to be updated regularly of her "work progress. on the project for which she was specifically hired. CARLOS L. he padlocked the premises on June 4. Even petitioner concedes rendering service "based on the contract. the Tourist World Service considered closing down its office. in addition to the standard of right-of control." However. TWS contend that the appellant was an employee of the appellee Tourist World Service. the private respondent. vs. as reflected earlier.

and adjudicating. NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO. rules that under the contract invoked by him. but an independent contractor and that the Company had no obligation to him for unpaid commissions under the terms and conditions of his contract. prompted the latter to terminate also his engagement under the first contract and to stop payment of his commissions starting 3 April 1. as did the respondent NLRC in affirming the Arbiter's decision. an independent contractor whose claim for unpaid commissions should have been litigated in an ordinary civil action. while concurrently fulfilling his commitments under the first contract 2 with the Company. 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. The contract also contained. Whatever this is meant to imply. provisions governing the relations of the parties. the Agent shall be free to exercise his own judgment as to time. plus attorney's fees. In Investment Planning Corporation of the Philippines us. finally. No showing has been made that any such rules or regulations were in fact promulgated. i. (b) required to put up performance bonds. LTD. This conclusion renders it unnecessary and premature to consider Basiao's claim for commissions on its merits. in April 1972. Without contesting the termination of the first contract. HELD Yes. Ltd.e. 1980.. nor to devote their time exclusively to working for the company nor to submit a record of their activities. the Court will not speculate that any exceptions or qualifications were imposed on the express provision of the contract leaving Basiao ". 1968.kapisanan ng mga kargador sa pier INSULAR LIFE ASSURANCE CO. free to exercise his own judgment as to the time. Basiao thereafter filed with the then Ministry of Labor a 4 complaint against the Company and its president. 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. and who. Basiao and Associates. (hereinafter simply called the Company) and Melecio T. (c) subject to a set of rules and regulations governing the performance of their duties under the agreement with the company and termination of their services for certain causes. Basiao was not an employee of the petitioner. the obvious reply would be that what is germane here is Basiao's status under the contract of July 2. Absent such showing. the complaint sought to recover commissions allegedly unpaid thereunder.: FACTS On July 2. he was later to claim. Insular Life Assurance Co. The Labor Arbiter erred in taking cognizance of. 1979. Basiao entered 1 into a contract by which: Basiao was "authorized to solicit within the Philippines applications for insurance policies and annuities in accordance with the existing rules and regulations" of the Company. therefore.." The Labor Arbiter's decision makes reference to Basiao's claim of having been connected with the Company for twenty-five years. NARVASA. After vainly seeking a reconsideration. shouldered their own selling and transportation expenses. any balance of commissions earned being payable to their legal representatives in the event of death or registration. 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.. petitioner. not the length of his relationship with the Company. being without jurisdiction to do so. place and means of soliciting insurance. (d) not required to report for work at any time. but a commission agent. vs. Some four years later. In May. 1968. respondents. The Court. Nothing herein contained shall therefore be construed to create the relationship of employee and employer between the Agent and the Company. place and means of soliciting insurance. the Agent shall observe and conform to all rules and regulations which the Company may from time to time prescribe. the Company terminated the Agency Manager's Contract. (ROBERT) 17 . said claim. J. this Court held that there was no employeremployee relationship between a commission agent and an investment company. among others. ISSUE Whether Basiao is a company employee or an independent contractor. but that the former was an independent contractor where said agent and others similarly placed were: (a) paid compensation in the form of commissions based on percentages of their sales.. Basiao sued the Company in a civil action and this.. However. The respondents disputed the Ministry's jurisdiction over Basiao's claim. 14 Social Security System a case almost on all fours with the present one. asserting that he was not the Company's employee.

among others. Wages are defined as “remuneration or earnings. 1998 Decision of the NLRC dismissing the petitioner’s complaint for illegal dismissal.00 per trip. dismissing the petitioner’s complaint for illegal dismissal. A motion for reconsideration was filed by the respondent. Pampanga. nightshift differential pay. The Labor Arbiter declared that the petitioner was a regular employee of the respondent company as he was performing a service that was necessary and desirable to the latter’s business. 2005 FACTS: Pedro Chavez was the truck driver of Supreme Packaging. the “control test” is the most important. Second. Although the respondents denied that they exercised control over the manner and methods by which the petitioner accomplished his work. Initially. and 13th month pay. CA made a complete turn around. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee. his (the petitioner’s) desire to avail himself of the benefits that the regular employees were receiving such as overtime pay. the respondents’ power to dismiss the petitioner was inherent in the fact that they engaged the services of the petitioner as truck driver. 146530. (2) the payment of wages.00 per trip and. The Labor Arbiter rendered decision finding the respondents guilty of illegal dismissal. but also as to the means and methods to accomplish it. not only as to the result of the work to be done. the recourse to this court by the petitioner. All the four elements are present in this case. No. The most important element is the employer’s control of the employee’s conduct. unfair labor practice and non-payment of overtime pay. the petitioner was receiving P900. respondent company terminated the services of the petitioner. The petitioner sought reconsideration but it was denied by the NLRC. NLRC reversed its earlier decision holding that no employer-employee relationship existed between the respondent company and the petitioner. Before the case could be heard. the petitioner filed a complaint for regularization with the Regional Arbitration in San Fernando. January 17. on May 25. the CA reinstated the July 10.” That the petitioner was paid on a per trip basis is not significant. Although he promised to extend these benefits to the petitioner. respondent Lee failed to actually do so. of the four elements of the employer-employee relationship. NLRC G. a careful review of the records shows that the latter performed his work as truck driver under the respondents’ supervision and control. A motion for reconsideration was filed by the respondent. however designated. respondent company’s plant manager. Inc. the petitioner expressed to respondent Alvin Lee. RULING: YES. Fourth. Third. Respondent then filed an appeal with the NLRC.00 per trip. the petitioner filed an amended complaint against the respondents for illegal dismissal.Thus. 1995. prove that the respondents exercised control over the means and methods by which the petitioner accomplished his work as truck driver of the respondent company. or for service rendered or to be rendered. First. This established the existence of an employer-employee relationship between the respondent company and the petitioner. among others.R. (SYLVESTER) 18 . 1995. the petitioner was paid the sum of P350. capable of being expressed in terms of money. On February 20. These circumstances. There is an employer-employee relationship between the respondent company and the petitioner. at the time of his alleged dismissal. This was later adjusted to P480. (3) the power of dismissal. Sometime in 1992. Consequently. Consequently. at this time. ISSUE: Whether or not there existed an employer-employee relationship between the respondent company and the petitioner. Hence. a business manufacturing cartons and other packaging materials for export and distribution.. to the Court’s mind. The Court of Appeals held that the respondents failed to discharge their burden to show that the petitioner’s dismissal was for a valid and just cause and declaring the respondent guilty of illegal dismissal and the decision of the Labor Arbiter was reinstated. He then filed a petition for certiorari to this court but was referred to the CA. it was the respondents who engaged the services of the petitioner without the intervention of a third party.kapisanan ng mga kargador sa pier CHAVEZ VS. 13th month pay. nightshift differential pay. The later ruled affirming the decision of the labor arbiter. and (4) the employer’s power to control the employee’s conduct. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done.

The language of a contract is not. 1998. Messengerial/Janitorial. x x x The cooperative shall have the entire charge. Bacolod City. 1994 and private respondents continued to perform their tasks until September 11. 19 . fully and speedily accomplish the work and services undertaken by the cooperative. this merely shows that it had at least P2. What appears is that Sunflower does not have substantial capitalization or investment in the form of tools. it is gathered from the evidence adduced by private respondents before the labor arbiter that their daily time 59 records were signed by SMC supervisors. There is no employer-employee relationship between the company and the cooperative. petitioner vs. free from the control and supervision of its principal. et al FACTS: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose Cooperative (Sunflower) entered into 1 a one-year Contract of Services commencing on January 1. whether as labor-only contractor or job contractor. x x x 8. Bacolod City. or the company and any members of the cooperative. These tend to disprove the independence of the contractor. Thus. xxx 3. ABALLA.e. control and supervision of third party respondent Sunflower. The contract was deemed renewed by the parties every month after its expiration on January 1. 1993." Private respondents filed a petition for certiorari before the Court of Appeals.kapisanan ng mga kargador sa pier SAN MIGUEL CORPORATION. rather it is the totality of the facts and surrounding circumstances of the case. All the foregoing considerations affirm by more than substantial evidence the existence of an employer-employee relationship between SMC and private respondents. to efficiently. otherwise known as the Cooperative Code. The Contract of Services between SMC and Sunflower shows that the parties clearly disavowed the existence of an employer-employee relationship between SMC and private respondents. receiving and packing formed an integral part of the shrimp processing operations of SMC. And from the job description provided by SMC itself. By Decision of December 29. machineries and all other working tools utilized by private respondents in carrying out their tasks were owned and provided by SMC. While indeed Sunflower was issued Certificate of Registration 55 No.00 in paid-up share capital as mandated by Section 5 56 of Article 14 of Republic Act No. which amount cannot be considered substantial capitalization. the work assigned to private respondents was directly related to the aquaculture operations of SMC. machineries. as they did. As for janitorial and messengerial services. 6938. IL0-875 on February 10. Labor Arbiter Drilon dismissed private respondents’ complaint for lack of merit. Sanitation/Washing/Cold Storage 2 the cooperative shall employ the necessary personnel and provide adequate equipment. or the cooperative and any of its members. C. On the other hand. Private respondents subsequently filed on September 25. it being crucial that its character be measured in terms of and determined by the criteria set by statute. xxx 4. materials.. The CA reversed the NLRC decision and accordingly found for private respondents. its apparent role having been merely to recruit persons to work for SMC. that they are considered directly related 58 to the principal business of the employer has been jurisprudentially recognized. VI. however. 1995. This circumstance is another indicium of the existence of a labor-only contractorship. The cooperative undertakes to pay the wages or salaries of its member-workers x x x Pursuant to the contract. to be renewed on a month to month basis until terminated by either party. Private respondents had been working in the aqua processing plant inside the SMC compound alongside regular SMC shrimp processing workers performing identical jobs under the same SMC supervisors. The pertinent provisions of the contract read: 1. private respondents filed a complaint before the NLRC. control and supervision of the work and services herein agreed upon. praying to be declared as regular employees of SMC. and power of dismissal. Fe. the nature of the work performed by private respondents in shrimp harvesting. determinative of the parties’ relationship. A party cannot dictate. it finding that third party respondent Sunflower was an independent contractor in light of its observation that "[i]n all the activities of private respondents. they were under the actual direction. Shrimp 2 Harvesting/Receiving. And control of the premises in which private respondents worked was by SMC. the character of its business. PROSPERO A. with claims for recovery of all benefits and privileges enjoyed by SMC rank and file employees. it is gathered that the lot. ISSUE: Whether or not employer-employee relationship exists between SMC and private respondents. Private respondents appealed to the NLRC. SMC argues that Sunflower could not have been issued a certificate of registration as a cooperative if it had no 54 substantial capital. there exists an employer-employee relationship between SMC and respondents. The cooperative agrees and undertakes to perform and/or provide for the company. Regional Arbitration Branch No. equipment. 1992 by the Cooperative Development Authority. as well as the payment of wages. 1995 which resulted in the termination of their services. render services at SMC’s Bacolod Shrimp Processing Plant at Sta. Sunflower engaged private respondents to. Sunflower did not carry on an independent business or undertake the performance of its service contract according to its own manner and method. i. HELD: Yes. work premises and other materials to qualify it as an independent contractor. Undoubtedly. tools and apparatus. Furthermore. In July 1995. SMC. on a non-exclusive basis for a period of one year the following services for the Bacolod Shrimp Processing Plant: A. 1995 4 an Amended Complaint to include illegal dismissal as additional cause of action following SMC’s closure of its 5 Bacolod Shrimp Processing Plant on September 15. by the mere expedient of a unilateral declaration in a contract. More. building. B. the NLRC dismissed the appeal for lack of merit.000.

They should thus be awarded differential pay corresponding to the difference between the wages and benefits given them and those accorded SMC’s other regular employees. 2005 FACTS: Petitioners were engaged by the Metropolitan Waterworks and Sewerage System (MWSS) as collectors-contractors. In 1997. The latter affirmed the ruling of the CSC and ruled that Agreement entered into by petitioners and MWSS was clear and unambiguous. the control test is the most important element. depending on which is most beneficial to private respondents. MWSS entered into a Concession Agreement with Manila Water Service. as mandated by Article 283 of the Labor Code or the separation pay awarded by SMC to other regular SMC employees that were terminated as a result of the retrenchment. namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. 2001 of the Court of Appeals are AFFIRMED with MODIFICATION. Regular employees of the MWSS. wherein the former agreed to collect from the concessionaires of MWSS. The assailed Decision dated February 7. and (2) those who have rendered at least one year of service. MWSS G. No. Petitioners filed a complaint with the CSC but was denied including the petitioner’s claim for retirement benefits and terminal leave pay were likewise denied. Petitioner San Miguel Corporation and Sunflower MultiPurpose Cooperative are hereby ORDERED to jointly and severally pay each private respondent differential pay from the time they became regular employees up to the date of their termination.kapisanan ng mga kargador sa pier Since private respondents who were engaged in shrimp processing performed tasks usually necessary or desirable in the aquaculture business of SMC. the Court has consistently adhered to the four-fold test. sewer and/or plumbing services which the MWSS bills from time to time. representing nominal damages for non-compliance with statutory due process. fees. A review of the circumstances surrounding the case reveals that petitioners are employees of MWSS. Of the four. As for those of private respondents who were engaged in janitorial and messengerial tasks. The law of course provides for two kinds of regular employees. RULING: YES. they fall under the second category and are thus entitled to differential pay and benefits extended to other SMC regular employees from the day immediately following their first year of service. the petition is DENIED. effectively terminating the contracts of service between petitioners and MWSS. WHEREFORE.000. Petitioner San Miguel Corporation is further ORDERED to pay each private respondent the amount of P50. the petitioners filed a petition for review with the Court of Appeals. separation pay equivalent to at least one (1) month pay or to at least one-half month pay for every year of service.00. June 30. Although termed as causes for termination of the Agreement.R. were absorbed by the concessionaires. SO ORDERED. The same goes true for the power to dismiss. a review of the same shows that the grounds indicated therein can similarly be grounds for termination of employment. 154472. The herein petitioners were employees of the MWSS. MWSS wielded its power of selection when it contracted with the individual petitioners. but not petitioners. and should be read and interpreted according to its literal sense. Regular employees of the MWSS were paid their retirement benefits. (2) whether he has control of the employee with respect to the means and methods by which work is to be accomplished. Petitioners now assert that the Court of Appeals rendered a decision not in accord with law and applicable jurisprudence. (CLAU) LOPEZ VS. Discontented with the decision of the CSC. 20 . and ten percent (10%) attorney’s fees based on the herein modified award. The award of backwages is DELETED. except those who had retired or opted to remain with the latter. assessments of rents for water. 2001 and Resolution dated July 11. For purposes of determining the existence of employeremployee relationship. they should be deemed 66 regular employees of the latter and as such are entitled to all 67 the benefits and rights appurtenant to regular employment. and Benpress-Lyonnaise. and (4) whether the employee was paid wages. with respect to the activity in which they are employed. ISSUE: Whether or not petitioners were employees of the MWSS and consequently entitled to the benefits they claim. Petitioner sought reconsideration but was also denied. Inc. whether continuous or broken. undertaking separate contracts or agreements. Those performing janitorial and messengerial services however acquired regular status only after rendering one-year service pursuant to Article 280 of the Labor Code. (3) whether he has the power to dismiss. wherein the collection of bills was transferred to said private concessionaires. whichever is higher. namely: (1) whether the alleged employer has the power of selection and engagement of an employee. charges.

emergency.” it held that Laudato was an employee of Royal Star. averring instead that she was a mere sales agent whom he paid purely on commission basis. rather than questions of law appropriate for review under a Rule 45 petition. meal. excluding per diems.” thus petitioners are not its employees. pursuant to his employment appointments. by engaging their services. to report her to the SSC for compulsory coverage or remit Laudato’s social security contributions. MWSS granted petitioners benefits usually given to employees. whether the employer controls or has reserved the right to control the employee. 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 21 . Lazaro (“Lazaro”). (SYLVESTER) LAZARO V. operating on the a priori premise or presumption that the recipient is already classified as an employee. The repeated and continuing need for the performance of the job has been deemed sufficient evidence of the necessity. and traveling allowances. but also as to the means and methods [14] by which the same is accomplished. applying the control test found that Laudato was an employee of Royal Star. The SSC. Among the respondents was herein petitioner Angelito L. The determination of an employer-employee relationship depends heavily on the particular factual circumstances attending the professional interaction of the [15] parties. SSS FACTS: Private respondent Rosalina M. and controlling not only the end result but the manner of achieving the same as well. and that under the so-called “control test. In Grepalife v. an employment relationship existed between them. Applying the “control test. 1146. however. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Petitioners are indeed regular employees of the MWSS. Lazaro denied that Laudato was a sales supervisor of Royal Star.D. cash gift. not only as to the result of the work done. simply begs the question. Lazaro had failed during the said period. ISSUE: It is argued that Royal Star had no control over Laudato’s activities. bonuses.” Laudato could not be deemed an employee.” that is. Lazaro’s arguments are nothing more but a mere reiteration of arguments unsuccessfully posed before two bodies: the SSC and the Court of Appeals. paying their wages in the form of commission. to wit: COLA.kapisanan ng mga kargador sa pier On the issue of remuneration. Significantly. They likewise put to issue factual questions already passed upon twice below. hazard pay. which is engaged in the business of selling home appliances. the determination of employer-employee relationship warrants the application of the “control test. Laudato (“Laudato”) filed a petition before the SSC for social security coverage and remittance of unpaid monthly social security contributions against her three (3) employers. Lazaro’s arguments may be dispensed with by applying precedents. It is axiomatic that the existence of an employer-employee relationship cannot be negated by expressly repudiating it in an agreement and providing therein that the employee is “not an MWSS employee” when the terms of the agreement and the surrounding circumstances show otherwise. and does not lay down any basis or standard for determining who are employees and who are not. if not indispensability of the activity to the business. Now the aspect of control. and other bonuses. Laudato could not be deemed an employee of Royal Star. Suffice it to say. proprietor of Royal Star Marketing (“Royal Star”). The Court is not a trier of facts and accords great weight to the factual findings of lower courts or agencies [16] whose function is to resolve factual matters. This assertion. the Court upheld the existence of an employer-employee relationship between the insurance company and its agents. HELD: It is an accepted doctrine that for the purposes of coverage under the Social Security Act. as sustained by the Court of Appeals. Although petitioner was not obliged to absorb the private respondents. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Lazaro also maintained that Laudato was not subjected to definite hours and conditions of work. subjecting them to its rules and imposing punishment in case of breach thereof. MWSS claims that the compensation received by petitioners does not fall under the definition of wages as provided in Section 2(i) of P. The provision is a simple statement of meaning. the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee [17] relationship. which is “the basic pay or salary received by an employee. After the parties submitted their respective position papers. As such. overtime pay and allowances. Judico. Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to March of 1986. We find no reversible error. the SSC promulgated a Resolutionruling in favor of Laudato. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. and ordered Royal Star to pay the unremitted social security contributions of Laudato.

vs. we agree with the labor arbiter that these matters constitute substantial evidence adequate to support a conclusion that petitioner was indeed an employee of private respondent. (KICIANG) 22 . Inc. Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. Laudato oversaw and supervised the sales agents of the company. 1986 as Salesman when the company was still named Cato Garments Corporation. because of a complaint against respondent by its workers. 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 [19] same is to be accomplished. v. Respondent denied complainants claim that he is a regular employee contending that he is a mere commission agent who receives a commission. HELD: It has long been established that in administrative and quasi-judicial proceedings. that three (3) years ago. as the claimant according to it. Petitioners contention that private respondents terminated his employment due to their suspicion that he was being enticed by another firm to work for it was not refuted by private respondents. petitioner is considered a regular employee. 13th month pay.Petitioner. noting that “[the] supervisor. NATIONAL LABOR FACTS: Complainant alleged that he started working with the respondent on July 6. 1992 he filed the instant complaint.” It should also be emphasized that the SSC. The labor arbiters conclusion that petitioners dismissal is therefore illegal. [20] Maalat. in the absence of countervailing evidence from Lazaro and also in light of the fact that Laudato’s calling cards from Royal Star indicate that she is indeed a sales supervisor. was a “supervisor on commission basis” who did not observe normal hours of work. This Court declared that there was an employer-employee relationship. substantial evidence being sufficient. On September 3. the NLRC found that decision of the Labor Arbiter not supported by evidence on record. substantial evidence is sufficient as a basis for judgment on the existence of employer-employee relationship. although compensated on commission basis.500. [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he [21] makes. found that Laudato was a [22] sales supervisor and not a mere agent. and that on August 29. In a business establishment. As such. On Appeal. complainant alleged that he was receiving a salary of P1. In Cosmopolitan Funeral Homes. and thus was subject to the control of management as to how she implements its policies and its end results. as stated earlier. Having been in the employ of private respondents continuously for more than one year. We are disinclined to reverse this finding. ISSUE: Whether or not there exists an employer-employee relationship between private respondents and petitioner. 1992. an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it. (FAITH) EDDIE DOMASIG. The Labor Arbiter held that complainant was illegally dismissed and entitled to reinstatement and backwages as well as underpayment of salary. under the law. It is entitled to great weight and respect. RELATIONS COMMISSION. Prior to his dismissal. service incentive leave and legal holiday. Any competent and relevant evidence to prove the relationship may be admitted. the employer similarly denied the existence of an employer-employee relationship. also as upheld by the Court of Appeals. The relevant factor remains. Proof beyond reasonable doubt is not required as a basis for judgment on the legality of an employers dismissal of an employee. it changed its name to Cata Garments Corporation. he was dismissed when respondent learned that he was being pirated by a rival corporation which offer he refused. Together with the cash vouchers covering petitioners salaries for the months stated therein.kapisanan ng mga kargador sa pier [18] insured. nor even preponderance of evidence for that matter. No particular form of evidence is required to prove the existence of such employer-employee relationship.00 a month plus commission. is not necessarily arbitrary or erroneous.

159890. It concluded that there was no ErEe relationship since the “control-test” was wanting in the case. for purposes of determining their rights to certain benefits. Due to financial difficulties. GR No. reports on sales. his commissions will not be released & he will lose his job. he was not designated by respondent to conduct his sales activities at any particular or specific place. as a commission salesman.. demanding that he make good the dishonored checks. but to serve as a guide and to upgrade his skills for a more efficient marketing performance. market strategies. he was warned that if he did not issued his own checks to cover said bad accounts. collection. Aside from selling merchadise. it was intended not to control the manner and means to be used in reaching the desired end. no relationship of employer-employee exists. 28 mar 2004 Ynares-Santiago. Respondents countered that petitioner was not its employee but a freelance salesman on commission basis. petitioner applied for a loan w/ the SSS. The CA affirmed the NLRC decision. he was also tasked to collect payments from his various customers. Petitioner’s contention that Art. is an employee of respondent corporation Held: No. price listings and new offers relayed by petitioner during his conferences to Manila do not indicate that he was under the control of respondent.kapisanan ng mga kargador sa pier Abante. competitors. such that a dismal performance or even a dead result will not result in any sanction or provide a ground for dismissal. he brought the matter to respondent. Said provision merely distinguishes between two kinds of employees. an employer-employee relationship is notably absent in this case. Petitioner filed a complaint for illegal dismissal w/ money claims against respondent company & its president. regular employees and casual employees. Petitioner issued personal checks in favor of respondent corporation on condition that the same shall not be deposited for clearing & that they shall be offset against his periodic commissions.e. refund of deductions. Based on the position papers submitted by the parties. 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. Issue: Whether petitioner. backwages. When he was confronted by respondent over some bad accounts. petitioner was free to offer his services to other companies engaged in similar or related marketing activities as evidenced by the certifications issued by various customers. Petitioner was sent a letter by respondent. Jr. Although he had the whole of Mindanao as his base of operation. Respondent corporation had complete control over his work because its President frequently directed him to report to a particular area for his sales & collection activities. As correctly observed by the appellate court. & occasionally required him to go to Manila to attend conferences. It is undisputed that petitioner Abante was a commission salesman who received 3% commission of his gross sales. J. While doing his usual rounds as commission salesman. he was left alone to adopt any style or strategy to entice his customers. He pursued his selling activities without interference or supervision from respondent company and relied on his own resources to perform his functions. 280 is a crucial factor in determining the existence of an employment relationship is wrong. When he learned that he was not covered by the SSS. v. the Labor Arbiter declared respondents liable to pay petitioner separation pay. The NLRC reversed the decision & dismissed the case for lack of cause of action. Yet no quota was imposed on him by the respondent. Lamadrid Bearing & Parts Corp. i. He was not required to report to the office at any time or submit any periodic written report on his sales performance and activities. unpaid commissions. The latter berated him & consequently deposited the personal checks which were dishonored by the drawee bank due to “Account Closed”. and in turn is compensated according to the result of his efforts and not the amount thereof. damages. Petitioner wrote back offering that the amount be charged to the commissions that he earned as commission salesman. Respondent company did not prescribe the manner of selling the merchandise. Article 280 does not apply where the existence of an employment relationship is in dispute. Moreover. petitioner was handed by his customers a letter from respondent company warning them not to deal w/ petitioner since it no longer recognized him as a commission salesman. & attorney’s fees. such as to join or form a union. Facts: Petitioner was employed by respondent company Lamadrid as a salesman earning a commission of 3% of the total paid-up sales covering Mindanao. Applying the control test. While it is true that he occasionally reported to the Manila office to attend conferences on marketing strategies. (LORI) 23 . or to security of tenure.

the law could be vulnerable of attack as undue taking of property for the benefit of another. vs. filed an Urgent Petition with the Department of Labor and Employment praying that the Secretary assume jurisdiction over the labor dispute and to enjoin the striking employees to go back to work. It should be observed that Article 283 of the Labor Code uses the phrase "retrenchment to prevent losses". d. They alleged that Asian Alcohol used the retrenchment program as a subterfuge for union busting. . 1992. High pole/high voltage and towing allowance. J. They also asseverated that Asian Alcohol was not bankrupt as it has engaged in an aggressive scheme of contractual hiring. respondents. collective bargaining negotiations proceeded. The six (6) private respondents are members of the union whose positions were abolished due to redundancy. management must faithfully comply with the substantive and procedural requirements laid down law and jurisprudence. ISSUE: Whether or not private respondents were illegally dismissed? HELD: NO. We have. respondents filed an illegal dismissal case with the Labor Arbiter. Redundancy exists when the service capability of the work force is in excess of what is reasonably needed to meet the demands on the enterprise. They were paid the equivalent of one month salary for every year of service as separation pay and all other benefits.00 for 1996 and P2. sold their majority rights to Prior Holdings. employees’ cooperative and housing equity assistance loan. however. 1996. 1995[2] and formed a CBA negotiating panel for the purpose. ROBERTO C. Inc. c. however. MEWA informed MERALCO of its intention to re-negotiate the terms and conditions of their existing 1992-1997 Collective Bargaining Agreement (CBA) covering the remaining period of two years starting from December 1. . who originally owned the controlling stocks in Asian Alcohol. THE HONORABLE SECRETARY OF LABOR LEONARDO QUISUMBING AND MERALCO EMPLOYEES AND WORKERS ASSOCIATION (MEWA). interpreted the law to mean that the employer need not keep all his employees until after his losses shall have materialized.200. They received individual notices of termination effective November 30. The Arbiter dismissed the case. NATIONAL LABOR RELATIONS COMMISSION.kapisanan ng mga kargador sa pier INDEPENDENT CONTRACTOR & LABOR-ONLY CONTRACTOR ASIAN ALCOHOL CORPORATION. MEWA filed a Notice of Strike with the National Capital Region Branch of the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) on the grounds of bargaining deadlock and unfair labor practices. The right of management to dismiss workers during periods of business recession and to install labor saving devices to prevent losses is governed by Art. The Labor Secretary granted the petition and assumed jurisdiction over the labor case. Loan for the employees’ cooperative. Appealed to NLRC. CARIAS. Rice Subsidy and retirement benefits for retirees. On September 7. Sick leave reserve of 15 days h.) MANILA ELECTRIC COMPANY. . MARTINEZ. in awarding the following economic benefits: a. i. most especially the discussion on SC's ruling. LEANDRO O. VERAYO and ERENEO S. Therefore. (Prior Holdings). Two months Christmas bonus. Benefits for collectors 24 . despite the series of meetings between the negotiating panels of MERALCO and MEWA. They claimed that they were singled out for separation by reason of their active participation in the union.” On April 23. Signing bonus. . vs. f. 2) . Dissatisfied with the decision.200. respondents. To thwart losses. this phrase means that retrenchment must be undertaken by the employer before losses are actually sustained. However. In its ordinary connotation.00 for 1997. Faced with the imminence of a strike. petitioner filed this petition contending that the Secretary of Labor gravely abused his discretion: 1). The 40-day union leave. 283 of the labor Code. TORMO. FACTS: Parsons family. Retrenchment and redundancy are just causes for the employer to terminate the services of workers to preserve the viability of the business. Thereafter. MARTINEZ. CARLOS A. Asian Alcohol appealed. petitioner. e.: Facts: MEWA is the duly recognized labor organization of the rankand-file employees of MERALCO. CEBU CITY and ERNESTO A. The next month. the parties failed to arrive at “terms and conditions acceptable to both of them. Otherwise. 1996. Integration of the Red Circle Rate Allowance g. in awarding wage increases of P2. Prior Holdings took over its management and operation. MERALCO on May 2. b. (NICOLE) (This case is quiet long and entails various topics that might be helpful in understanding various labor concepts. RAFAEL H. 1995. AMACIO. FOURTH DIVISION. MERALCO signified its willingness to re-negotiate through its letter dated October 17. I suggest that this case be read in full text. it reversed the decision of the Arbiter. SENDON. 1995 to November 30. However. they implemented organizational plan and other cost-saving measures including termination of 117 employees. 1997. and j. In exercising its right. Social benefits such as GHSIP and HMP for dependents. petitioner.

and (c) in mandating a union security “closedshop” regime in the bargaining unit. 5) .[24] Additionally. MERALCO adduced evidence in the form of historical consumption data showing that a lengthy consumption does not tend to rise during the Christmas period. this translates into the exercise of proper discretion and to the observance of due process. We find. factors such as the bargaining history of the company. 6) . the best way in approaching this task holistically is to consider the available objective facts. the trends and amounts of arbitrated and agreed wage awards and the company’s previous CBAs. he apparently misappreciated this evidence in favor of claims that do not have evidentiary support. . as against the union’s unsubstantiated Yuletide consumption claim. the union projection was based on a speculation of Yuletide consumption that the union failed to substantiate.00. while at the same time. in decreeing that the union be allowed to have representation in policy and decision making into matters affecting “personnel welfare. The Secretary of Labor apparently also acted arbitrarily and even whimsically in considering a number of legal points. even the Solicitor General himself considered that the Secretary gravely abused his discretion on at least three major points: (a) on the signing bonus issue.[26] They likewise sufficiently consider the employer’s costs and its overall wage structure. . The union disputes the allegation of MERALCO that the Secretary abused his discretion in issuing the assailed orders arguing that he acted within the scope of the powers granted him by law and by the Constitution. 4) .and one does not require a constitutional interpretation .900. . MERALCO’s income and the amount of money available for operating expenses . . being within the range that will not disrupt the wage trends in Philippine industries.kapisanan ng mga kargador sa pier 3) . .600. In fact. . . especially in a public utility like MERALCO. the decision maker must always take into account the “public interest” aspects of the case. based on our consideration of the parties’ positions and the evidence on record. reorganization or as a result of operational exigencies. While the union claimed that its cited figure is based on MERALCO’s 10-year income stream.is simply the standard of reasonableness. We find after considering the records that the Secretary gravely abused his discretion in making this wage award because he disregarded evidence on record. that the Secretary of Labor disregarded and misappreciated evidence. Issue: WON Sec of Labor decided the case brought before him with grave abuse of discretion Held: In this case we believe that the more appropriate and available standard . .[25] no data or computation of this 10-year stream appear in the record. including. . In considering a public utility.00 per month for the first year and another P1. in ordering for a closed shop when his original order for a maintenance of membership arrangement was not questioned by the parties.are subject to State regulation. We must also keep in mind that high operating costs will certainly and eventually be passed on to the consuming public as MERALCO has bluntly warned in its pleadings. and industry trends in general. (b) on the inclusion of confidential employees in the rank and file bargaining unit. affordability or capacity to pay should be taken into account but cannot be the sole yardstick in determining the wage award. rights and benefits as well as duties. in expanding the scope of the bargaining unit to all regular rank and file employees hired by the company in all its offices and operating centers and those it may employ by reason of expansion. . in exercising discretion in determining the retroactivity of the CBA. in ruling for the inclusion of all terms and conditions of employment in the collective bargaining agreement. where applicable.900. In layman’s terms. Both parties extensely discussed the factors that the decision maker should consider in making a wage award. .[23] On the other hand. After considering the various factors the parties cited. in ordering that Meralco should consult the union before any contracting out for more than six months. Where he considered MERALCO’s evidence at all. 8) . Our reason for this is that these increases sufficiently protects the interest of the worker as they are roughly 15% of the monthly average salary of P11. To our mind. To our mind.including labor costs .” 7) . the MERALCO projection had every reason to be reliable because it was based on actual and undisputed figures for the first six months of 1996. . we believe that the interests of both labor and management are best served by a wage increase of P1. (ROBERT) 25 . As a rule.[16] in legal parlance. the All-Asia Capital Report was nothing more than a newspaper report that did not show any specific breakdown or computations. particularly with respect to the wage award. reasonableness implies the absence of arbitrariness.00 per month for the second year of the two-year CBA term.

(DEUS) 26 . is that respondents worked alongside petitioner's regular employees who were performing identical work. allowances and other employment benefits and privileges of a regular employee. materials. on the other. they claiming to be "performing duties for the benefit of petitioner since their job is directly connected with its business. More significantly. Issue: WON Synergy is a job-only contractor or a legitimate contractor.” It expressly provided that Synergy was "an independent contractor and that there would be no employer-employee relationship between the contractor and/or its employees on one hand. all the complainants. and owner. and for regularization of employment status with petitioner.kapisanan ng mga kargador sa pier PHILIPPINE AIRLINES vs. On appeal by respondents to the NLRC. Respondents assigned by Synergy to petitioner filed complaints against petitioner for underpayment. workers. LIGAN Facts: Petitioner Philippine Airlines (PAL) and Synergy Services Corporation (Synergy) entered into an Agreement whereby Synergy undertook to "provide loading. It is gathered that the work performed by almost all of the respondents is directly related to the main business of petitioner and the equipment used by respondents are owned by petitioner. there is labor-only contracting. this present petition. The control test element echoes the prevailing jurisprudential trend elevating such element as a primary determinant of employer-employee relationship in job contracting agreements. and to give each of them the salaries. or (2) The contractor does not exercise the right to control over the performance of the work of the contractual employee. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. premium pay for rest days. 13th month pay and allowances. service incentive leave pay. For labor-only contracting to exist. Ruling: Synergy is a job-only contractor. supplies. While petitioner steadfastly asserted before the Labor Arbiter and the NLRC that Synergy has a substantial capital to engage in legitimate contracting. for it is the totality of the facts and surrounding circumstances of the case which is determinative of the parties' relationship. unloading. Thus. The express provision in the Agreement that Synergy was an independent contractor and there would be "no employeremployee relationship between Synergy and/or its employees on one hand. and petitioner on the other" is not legally binding and conclusive as contractual provisions are not valid determinants of the existence of such relationship.” The agreement specified a scope of services including the stipulation that “the contractor shall furnish all the necessary capital. work or service to be performed and the employees recruited. as its regular employees. equipment and tools. the decision was vacated and set aside. however. declaring that respondent Synergy is a labor-only contractor and ordering PAL to accept. any of the two elements should be present: (1) The contractor or subcontractor does not have substantial capital or investment which relates to the job. delivery of baggage and cargo and other related services to and from petitioner's aircraft. Even if only one of the two elements is present then. non-payment of premium pay for holidays." The labor arbiter found Synergy an independent contractor and dismissed respondents’ complaints but granted their money claims. facilities. it failed to present evidence thereon.

the NLRC granted Shangri-la’s and respondent doctor’s appeal and dismissed petitioners’ complaint for lack of merit. FACTS: Registered nurses Jeromie D. work premises. (3) the payment of wages by 27 . and the mode. 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. he may prescribe conditions and restrictions to insure the protection and welfare of the workers. (Emphasis supplied) The existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business.kapisanan ng mga kargador sa pier JEROMIE D. petitioners could not be regarded as regular employees of Shangri-la. In such case. Labor-only contracting. Pepito (respondent doctor) to work in her clinic at respondent Shangri-la’s Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. that petitioners were not its employees but of respondent doctor whom it retained via 2 Memorandum of Agreement (MOA) pursuant to Article 157 of the Labor Code. equipment. The case was docketed as RAB Case No. Labor Arbiter Ernesto F. machineries. 2007. firing and payment of the contractor's workers. SHANGRI-LA'S MACTAN ISLAND RESORT and DR. tools. Carreon declared petitioners to be regular employees of Shangri-la. the nature and extent of the work. respectively. 8. – There is job contracting permissible under the Code if the following conditions are met: 3 (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. 07-112089-02. work premises and other materials. Shangri-la and respondent doctor appealed to the NLRC. the term and duration of the relationship. – (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where such person: (1) Does not have substantial capital or investment in the form of tools. appliances. by Decision of May 22. Sec. the control and supervision of the work to another. the control of the premises. the right to assign the performance of a specified piece of work. however. Sec.employee relationship is established by the presence of the following determinants: (1) the selection and engagement of the workers. manner and terms of payment. petitioners filed with the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. In late 2002. Job contracting. 2003. The Arbiter thus ordered Shangri-la to grant them the wages and benefits due them as regular employees from the time their services were engaged. as amended. materials and 11 labor. By Decision of May 6. Jessica Joyce R. equipment. and (2) The contractor has substantial capital or investment in the form of tools.R. The appellate court concluded that all aspects of the employment of petitioners being under the supervision and control of respondent doctor and since Shangri-la is not principally engaged in the business of providing medical or healthcare services. VII) a complaint for regularization. JESSICA J. ISSUE: Whether respondent doctor can be considered a legitimate independent contractor HELD: Yes. the employer's power with respect to the hiring. underpayment of wages. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996. the Secretary of Labor shall determine through appropriate orders whether or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering the operating needs of the employer and the rights of the workers involved. 9. and that she maintained petitioners’ services upon their request. it finding that no employer-employee relationship exists between petitioner and Shangri-la. VII 1 (NLRC-RAB No. Petitioners. night shift differential and 13th month pay differential against respondents. ESCASINAS and EVAN RIGOR SINGCO. On the other hand. claiming that they are regular employees of Shangri-la. non-payment of holiday pay. vs. Shangri-la claimed. PEPITO. Petitioners thereupon brought the case to the Court of Appeals 5 which. the duty to supply the premises. Respondents. affirmed the NLRC Decision that no employer-employee relationship exists between Shangri-la and petitioners. (b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. machineries. by Dr. existence of an employer. and other materials which are necessary in the conduct of his business. (2) power of dismissal. (c) For cases not falling under this Article. the skill required. Respondent doctor for her part claimed that petitioners were already working for the previous retained physicians of Shangri-la before she was retained by Shangri-la. and (2) The workers recruited and placed by such persons are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed.

Labor-only contracting is hereby declared prohibited x x x labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests who avail of the clinic services. dismiss. Peerless and Excellent retained the right to select. provides: Prohibition against labor-only contracting. work premises. sourced from her P60. As to payment of wages. As Shangri-la does not control how the work should be performed by petitioners. machineries. There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools. the Court holds that respondent doctor is a legitimate independent contractor. With respect to the supervision and control of the nurses and clinic staff. hire. Section 5. supervise. work or service to be performed and the employees recruited. the relationships must be tested on the basis of how they actually operate. supplies or places workers to perform a job. and not the employee manual being followed by Shangri-la’s regular workers. . respondent doctor is the one who underwrites the following: salaries. control and discipline and pay the salaries of all personnel they assign to the petitioner. implemented by DOLE. 2007 are AFFIRMED. and (4) the power to control the worker's conduct. Ruling: Excellent and Peerless are labor-only contractors. The contract between the principal and the contractor is not the final word on how the contracted workers relate to the principal and the purported contractor. work or service for a principal. The Decision of the Court of Appeals dated May 22. Respondents state that they were hired either by the petitioner or by its contractors. governs how they perform their respective tasks and responsibilities. and any of the following elements are present: I) The contractor or subcontractor does not have sufficient capital or investment which relates to the job. filed a consolidated suit against the latter. 157. or II) The contractor does not exercise the right to control over the performance of the work of the contractual-employee. loading and unloading of the manufactured softdrinks are not part of the manufacturing process. In defense. DELA CRUZ Facts: Respondents. (CLAU) COCA-COLA vs. equipment. group life. Issue: WON Excellent and Peerless are independent contractors or labor-only contractors. and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the alter were directly employed by him On the matter of labor-only contracting. DO 18-02. Under these contracts. the petition is hereby DENIED. pay their SSS premium as well as their 15 wages if they were not indeed her employees. among others. It is unlikely that respondent doctor would report petitioners as workers. as well as value added taxes and withholding taxes. to which petitioners gave their 17 conformity and in which they acknowledged their co-terminus employment status. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal. with the latter assuming primacy in the overall 12 consideration. the petitioner contended that it entered into contracts of services with Peerless and Excellent to provide allied services. It is thus presumed that said document. 28 . "Clinic Policies 16 and Employee Manual" claimed to have been prepared by respondent doctor exists. They argued that the services they render are necessary and desirable in the regular business of the petitioner and that the petitioner’s contracts of services with Peerless and Excellent are in the nature of "labor-only" contracts prohibited by law. In such cases.000. but they do not enjoy the full remuneration. group personal accident 14 insurance and life/death insurance for the staff with minimum benefit payable at 12 times the employee’s last drawn salary. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests does not necessarily prove that respondent doctor lacks substantial capital and investment. 2007 and the Resolution dated July 10. Petitioner posited that there is no employeremployee relationship between the company and the respondents and belied the respondents’ submission that their jobs are usually necessary and desirable in its main business as a softdrinks manufacturer and the respondents’ tasks of handling. route helpers assigned to work in petitioner Coca-Cola Bottlers’ trucks. which are not directly related to Shangri-la’s principal business – operation of hotels and restaurants.kapisanan ng mga kargador sa pier whatever means. SSS contributions and 13 other benefits of the staff . benefits and privileges granted to the petitioner’s regular sales force. it is not disputed that a document. it is not petitioners’ employer. Against the above-listed determinants. the maintenance of a clinic and provision of medical services to its employees is required under Art. WHEREFORE. Besides.

the principal is jointly and severally liable with the contractor. NATIONAL LABOR RELATIONS COMMISSION. Respondents resigned from CISCOR and claimed the return of their cash bond and payment of their 13th month pay and service incentive leave pay. Hence. both CISCOR and petitioner. NLRC. their proportionate 13th month pay and service incentive leave pay were withheld to answer for liabilities incurred while private respondents were guarding Riverside Mills Corporation. Inc. and who had no control and supervision over the contracted personnel. Sunday Bacea. means and methods of selling and distribution. Alfredo Cos and Rogelio Villanueva were hired as security guards by Confidential Investigation and Security Corporation ("CISCOR"). CISCOR claimed that it incurred losses when respondents secured the premises of Riverside Mills Corporation. There is no doubt that private respondents are entitled to the cash benefits due them. held: 29 . (DEUS) DEVELOPMENT BANK OF THE PHILIPPINES. petitioner. cannot but be regular company employees. was not a proper. ISSUE: Whether or not the DBP is really liable for any of the claims of private respondents HELD: Petitioner’s interpretation of Article 106 of the Labor Code is quite misplaced. In these lights. no doubt. the petition is totally without merit and hence must be denied. explaining the aforesaid liability. CISCOR filed a motion with leave to implead petitioner bank and averred therein that in view of its contract with the petitioner whereby. the rule is that in job contracting. private respondents secured their clearance from CISCOR’s detachment commander. vs. They are therefore labor-only contractors. they only supplied the manpower that helped the company in the handing of products for sale and distribution. They were under the company’s supervision and control since sales and distribution were in fact not the purported contractors’ independent. private respondents’ cash bond deposit. vs. that petitioner. ALFREDO COS and ROGELIO VILLANUEVA.. not being an employer of the private respondents. Peerless and Excellent were mere suppliers of labor who had no sufficient capitalization and equipment to undertake sales and distribution of softdrinks as independent activities separate from the manufacture of softdrinks. engaged in component functions in the main business of the company under the latter’s supervision and control. Instead of getting such clearance from the petitioner. Hence. They were assigned to secure the premises of Development Bank of the Philippines ("DBP")Riverside Mills Corporation. the contracted personnel. 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.kapisanan ng mga kargador sa pier Excellent and Peerless were not independently selling and distributing company products. liable to pay such benefits because the law mandates the joint and several liability of the principal and the contractor for the protection of labor. In Eagle Security Agency. CISCOR undertook to guard petitioner’s premises. they were asked to first secure an individual/agency clearance from petitioner to show that no losses were incurred while they were guarding Riverside Mills Corporation. but CISCOR failed to pay. The petitioner is also. this Court. Consequently. under the Labor Code. for failure to secure the required clearance. The statutory basis for this joint and 5 6 several liability is set forth in Articles 107 and 109 in relation 7 to Article 106 of the Labor Code. but were component parts of sales and distribution operations that the company controlled in its softdrinks business. are jointly and severally liable to pay the salaries and other statutory benefits due the private respondents. for a certain service fee. respondents. Respondents filed their opposition and alleged. In fact. using their own equipment. GODOFREDO MORILLO. necessary or indispensable party to the case. FACTS: Private respondents Godofredo Morillo. Respondents who served as route helpers were really engaged in functions directly related to the overall business of the petitioner. JR. petitioner being an indispensable party to the case. discrete and separable activities. among others. SUNDAY BACEA.

the employees filed an appeal with the NLRC. twenty-one (21) filed.The NLRC.kapisanan ng mga kargador sa pier This joint and several liability of the contractor and the principal is mandated by the Labor Code to assure compliance of the provisions therein including the statutory minimum wage [Article 99. The NLRC ordered USWA to pay the employees their separation pay in light of its conclusion that there was no proof that the employees were notified to report for reassignment after the termination of the contract. We note that a compromise agreement of the employees was executed between BF and the employees. USWA and BF are jointly and severally liable in the payment of the wages of the employees. 3]. Only thirty (30) out of the sixty-seven (67) guards reported and they were given new assignments. amounting to constructive dismissal. are afforded great weight by the courts. Mr. upon receipt of the letter. task. 18 and Article XIII Sec. payment of the workers’ performance of any work. He advised them to report to the office for reassignment. and in the interest of stability of the governmental structure. advised USWA of the termination to take effect 30 days from receipt thereof. finding the conclusions on the issues of illegal dismissal and wage differential by the Arbiter without sufficient basis. However a compromise settlement was reached between BF and the employees. a complaint for illegal dismissal and payment of money claims against USWA and BF with the Regional Arbitration Branch of the National Labor Relations Commission (NLRC). On 29 August 1994. Proceeding from the fact that the dismissal of the employees was illegal and pursuant to a legitimate job contracting. Aggrieved. the compromise agreement dealt only with salary differential. This joint and several liability facilitates. However. (KICIANG) 30 . and both USWA and BF to pay the salary differential and attorneys fees. The principal. In the course of the proceedings. However.[4] The Labor Arbiter ordered USWA to pay the employees separation pay. if not guarantees. The termination letter dated 3 June 1994. the NLRC. should not be disturbed. (FAITH) UNITED SPECIAL WATCHMAN AGENCY vs CA FACTS: The Contract for Security Services[1]entered into between USWA and Banco Filipino Savings and Mortgage Bank (BF) took effect on 1 June 1994. is made the indirect employer of the contractor’s employees for purposes of paying the employees their wages should the contractor be unable to pay them. on 3 June 1994. Out of the remaining thirty-seven (37). thus giving the workers ample protection as mandated by the 1987 Constitution [See Article II Sec. on 4 August 1994.[7]The Arbiter approved the settlement.There is thus no further need to dwell on the questions of fact raised in this petition. USWA is liable to pay the respondents separation pay equivalent to one (1) month pay for every year of service. its Operations Manager. the complaint was amended to include all thirty-seven (37) employees. On appeal. Angel Baliwag. on 23 July 1998. they are conclusive. which exceeded the allowable period of six (6) months. It did not include nor does it preclude the award of separation pay. on the other hand. in its decision established that the respondents were put on a temporary offdetail. Labor Code]. but received on June 17. ISSUE: HELD: It is fundamental that (f)indings of facts of administrative bodies charged with their specific field of expertise. and for violation of any provision of the Labor Code. immediately notified all the affected employees stationed at the BF branches about the termination of their contract. job or project. five (5) of the thirty-seven employees reported to the office and were given new posts. or two (2) days later. USWA alleged that. In light of the illegal dismissal of the respondents. and in the absence of substantial showing that such findings are made from an erroneous estimation of the evidence presented. BF terminated the contract. The contractor is made liable by virtue of his status as direct employer. remanded the case.

It engaged the services of Nilo Layno Builders to do the specialized concrete works. Issue: 1) Whether Nilo Layno Builders was an independent contractor or a labor-only contractor 2) Whether an ErEe relationship existed between petitioner & private respondents Held: 1) Independent contractor. nonpayment th of 13 month pay. it could not be held liable for backwages and separation pay. the principal employer is not responsible for any claim made by the employees. a person who: (a) 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. Juxtaposing this provision vis--vis the facts of this case. the engineers of the petitioner visited the site to check whether the work was in accord with the plans and specifications of the principal. the law creates an employeremployee relationship for a limited purpose. a corporation engaged in the construction business. Further. he undertook the contract work on his own account and responsibility. work premises. Rule VIII. illegally dismissed the private complainants. Yes. proof of financial capability and list of equipment. task. Rules to Implement the Labor Code to assure the employees of the minimum labor standards and benefits provided by existing laws. machineries and implements to be used in the business. except as to the results. The Labor Arbiter found that NLB was a laboronly contractor. i. Nilo Layno Builders is undertaking permissible labor or job contracting. from time to time. In legitimate job contracting. It ordered petitioner to provide work for private respondents or pay separation pay. The monetary claims of private respondents were dismissed for lack of merit. Nilo Layno Builders is a duly licensed labor contractor carrying on an independent business for a specialized work that involves the use of some particular. the private respondents. Pursuant to the contract Nilo Layno Builders hired private respondents to perform work at the project. 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. the employees are eventually transferred or reassigned elsewhere. job or project has been performed for petitioners benefit or on its behalf. of the Omnibus Rules Implementing the Labor Code. to ensure that the employees are paid their wages. Thus. CA GR No. Book III. tools. and that as employer of the private respondents. machineries. to do specialized work in the Prince David Project of the petitioner. Nevertheless. There existed an employer-employee relationship between petitioner and private respondents albeit for a limited purpose. i. 154715. & severance pay in lieu of reinstatement. free from interference from any other persons. unusual and peculiar skills and expertise.. This liability covers the payment of service incentive leave th and 13 month pay of the private complainants during the time they were working at petitioners Prince David Project. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees wages whenever the contractor fails to pay the same. (LORI) 31 . Layno. This is exactly the situation obtaining in the case at bar. a requirement under Section 3. private respondents were deemed employees of the petitioner. As a licensed labor contractor. From the foregoing disquisition. private respondents filed a complaint against petitioner & its president for unfair labor practice. The petition for certiorari filed by petitioner was denied by the CA. Under Section 8. the petitioner did not. except only to the results of the work. the liability accrues for such period even if. in the same manner and extent that it is liable to its direct employees. As admitted by Nilo G. 11 Dec 2003 Ynares-Santiago. Rule VII-A. illegal dismissal. thus.. Book III. v. So long as the work. that he was the one paying the salaries of private respondents.kapisanan ng mga kargador sa pier New Golden City Builders & Development Corp. as it could not. J. entered into a construction contract w/ Prince David Dev’t Corp. it was plain conjecture on the part of the Labor Arbiter. like concrete works. The means and methods adopted by the private respondents were directed by Nilo Layno Builders except that. The test to determine the existence of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work 2) according to his own methods and without being subject to the control of the employer. it entered into a written contract with the petitioner. and (b) has substantial capital or investment in the form of tools. Rule VII-A. he had the power to terminate or dismiss them for just and valid cause. the NLRC and the Court of Appeals to conclude that Nilo Layno Builders was a labor-only contractor merely because it does not have investment in the form of tools or machineries. the Court finds that Nilo Layno Builders maintained effective supervision and control over the private complainants. Nilo Layno Builders hired its own employees. Other than that. Indubitably. it complied with the conditions set forth in Section 5. After completion of the phase for which NLB was contracted. among others. an independent contractor is one who undertakes job contracting. Rules to Implement the Labor Code. Hence. They failed to appreciate the fact that Nilo Layno Builders had substantial capitalization for it did not only provide labor to do the specified project and pay their wages. later on. but it furnished the materials to be used in the construction. form works and steel rebars works. equipments.e. Both parties appealed to the NLRC w/c held that private respondents were illegally dismissed & ordered petitioner to reinstate them & to pay their full backwages. Book III. and other materials which are necessary in the conduct of the business. Facts: Petitioner.e. it is jointly and severally liable with Nilo Layno Builders for the private complainants’ wages.

: Facts: Petitioner. as the one who exercised the powers of an employer over the "dispatchers. respondents." Petitioner argues that under an agreement with Regino de la Cruz. it is the latter who selects and engages the "dispatchers. 1996 Puno. In determining whether there is an employer-employee relationship between the parties the following questions must be considered: (a) who has the power of selection and engagement of the employee? (b) who pays the wages of employee? (c) who has the power of dismissal? and. Petitioner has failed to refute the evidence presented by private respondent. assisting passengers with their baggages as "dispatchers. NATIONAL LABOR RELATIONS COMMISSION and HERMES DELA CRUZ.kapisanan ng mga kargador sa pier PCi Automation v. Indeed the "control test" only requires the existence of the right to control the manner of doing the work in a person. 115920. Regino de la Cruz. which he can delegate. J." hung around his bus terminals. such finding being supported by substantial evidence. Petitioner insists that as "dispatcher. Petitioner denies that private respondent was his employee. He points to his Chief Dispatcher. MENDOZA. together with socalled "standbys." Petitioner alleges that he had no choice but to allow private respondent and other "standbys" to carry on their activities within the premises of his bus terminals. Private respondent worked in petitioner's bus terminals as a "dispatcher. and pays their wages. without supervision by him. not necessarily the actual exercise of the power by him. the power is exercised by Regino de la Cruz but it is power which is only delegated to him so that in truth the power inherently and 32 . to remind him regarding the discipline of the "dispatchers." private respondent worked in his own way. He alleges that he did not have the power of selection and dismissal nor the power of control over private respondent. According to petitioner. private respondent. TIU." assisting and guiding passengers and carrying their bags. 252 SCRA 493 (NICOLE) WILLIAM L. in the case at bar." dictates their time. vs. petitioner. Consequently.2 He also claims he allowed them to do so even if their services as so-called "dispatchers" were not needed in his business. Jan 29. He further argues that the "disciplinary memorandum" issued by him was not addressed to private respondent but to Regino de la Cruz. (d) who has the power to control the employee's conduct?4 Of these powers the power of control over the employees' conduct is generally regarded as determinative of the existence of the relationship. The Labor Arbiter and the NLRC found private respondent to be an employee of petitioner. supervises the performance of their work. Issue: Won an employer-employee relationship existed between petitioner and private respondent Held: We agree with the finding that an employer-employee relationship existed between petitioner and private respondent. NLRC GR No. is engaged in the transportation of passengers from Cebu City to the northern towns of Cebu. as employer of private respondent. J. as operator of the D'Rough Riders Transportation." Petitioner's contention is without merit.

The court finds substantial evidence to support that Product Image is a legitimate job or independent contractor. free exercise of the right to self-organization. machineries. The Labor Arbiter declared that respondents were guilty of illegal dismissal. Hence. at most. BAYER Facts: Gallego was contracted by Bayer Philippines as crop protection technician to promote and market Bayer products by making farm visits to convince the farmers to buy their products. prompting him to seek another employment. 33 . private respondent Hermes de la Cruz is actually the employee of petitioner. be considered a "labor-only" contractor and. the following conditions must be met: (a) the contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method. he instituted a complaint before the NLRC. 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. As he is acting in behalf of petitioner. security of tenure. and social welfare benefits. this petition for review. equipment. Among the circumstances that establish the status of Product Image as a legitimate job contractor are: (1) Product Image had. the argument would still be without merit. (b) the contractor has substantial capital or investment. On appeal by the respondents. Respondents Bayer and Guillermo denied the existence of employment relationship. work or.9 For this reason. however. He continued performing his duties and received compensation. service is to be performed or completed within or outside the premises of the principal. free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof. and (c) the agreement between the principal and contractor or subcontractor assures the contractual employees’ entitlement to all labor and occupational safety and health standards. or service within a definite or predetermined period. while petitioner is the real employer. work premises. we hold that Regino de la Cruz can. during the period in question. De la Cruz is a mere supervisor. but was reemployed by Product Image which is actually performing the same task as crop protection technician. and other materials which are necessary in the conduct of his business. in which he refused. what exists is a "labor-only" contract under which the person acting as contractor is considered merely an agent or intermediary of the employer who is responsible to the workers in the same manner and to the same extent as if they had been directly employed by him. Petitioner’s employment came to a halt.kapisanan ng mga kargador sa pier primarily is possessed by petitioner. Issue: Whether Product Image is a labor-only contractor and Bayer should be deemed petitioner’s principal employer. He received a memorandum that he will be transferred to Luzon and that he heard that respondents spread rumors that reached the dealers in Antique that he is no longer connected with Bayer and any transaction with him will not be honored. calling for him to return all pieces of service equipment. In the absence of these requisites. Product Image also posted a bond to answer for any claim of its employees for unpaid wages and other benefits that may arise out of the implementation of its contract with Bayer. the NLRC reversed the Arbiter’s decision and contended that petitioner was not dismissed but has abandoned his employment by failure to report on his duties. work. a mere agent of petitioner. while respondents Product Image and Bergonia admitted that the petitioner was hired as contractual employee and that he has stopped reporting for work among other things. a contract with Bayer for the promotion and marketing of Bayer products. and (2) the contractor has substantial capital or investment in the form of tools. therefore. Gallego was directed to submit a resignation letter and was ordered to quit. Even if this be his contention. Petitioner does not claim that Regino de la Cruz and his dispatchers were independent contractors. Believing he was terminated. Ruling: Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to farm out with a contractor or subcontractor the performance of a specific job. and (2) Product Image has an independent business and provides services nationwide to big companies such as Ajinomoto Philippines and Procter and Gamble Corporation. Under this arrangement. Job contracting is permissible only if the following conditions are met: (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. regardless of whether such job. (ROBERT) GALLEGO vs.

kapisanan ng mga kargador sa pier As to the question of Product Image being the employer of petitioner. Most determinative among these factors is the so-called “control test. In fine. the existence of an employer-employee relationship is determined on the basis of four standards. namely: (1) the manner of selection and engagement of the putative employee. (3) the presence or absence of power of dismissal. (DEUS) 34 . and (4) the presence or absence of control of the putative employee’s conduct.” If at all. It would be a rare contract of service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement. This is by no means the kind of control that establishes an employer-employee relationship as it pertains only to the results and not the manner and method of doing the work. Product Image is ineluctably the employer of petitioner. the only control measure retained by Bayer over petitioner was to act as his de facto supervisor in certifying to the veracity of the accomplishment reports he submitted to Product Image. Surely. (2) the mode of payment of wages. it would be foolhardy for any company to completely give the reins and totally ignore the operations it has contracted out.

Sign up to vote on this title
UsefulNot useful