GREAT PACIFIC LIFE ASSURANCE CORPORATION (GREPALIFE) VS.

JUDICO HONORATO (GR NO. 73887 DECEMEBER 21, 1989)

FACTS Petition for certiorari to review the decision NLRC dated
September 9, 1985
Orderin petitioner !repa"ife to reconi#e private respondent$onorato%&d
ico, as its re&"ar emp"o'ee as de(ned &nder )rt* +81 of theLabor Code*
Remandin the case to its oriin for the determination of privaterespond
ent %&dico,s mone' c"aims*$onorato%&dico ("ed a comp"aint for i""ea"
dismissa" aainst !repa"ife, a d&"'orani#ed ins&rance (rm*Said comp"aint
pra'ed for award of mone' c"aims consistin of-
Separation pa',
.npaid sa"ar' and 1/th month pa',
Ref&nd of cash bond,
0ora" and e1emp"ar' damaes and attorne',s fees*!repa"ife admits that
%&dico entered into an areement of aenc' with them tobecome a debit
aent attached in Ceb& Cit'*!repa"ife de(nes a debit aent as 2an
ins&rance aent se""in3servicin ind&stria""ife p"ans and po"ic' ho"ders* )s
a debit aent, %&dico had de(nite wor4 assinments inc"&din b&t
not "imited toco""ection of premi&ms from po"ic'ho"ders and se""in
ins&rance to prospectivec"ients*P&b"ic respondent NLRC a"so fo&nd o&t
that comp"ainant was initia""' paid P +55*55 as a""owance for thirteen 61/7
wee4s reard"ess of prod&ction and "ater a certainpercentae
denominated as sa"es reserve of his tota" co""ections b&t not "esser than P
+55*55*%&dicowas promoted to the position of 8one S&pervisor and was
iven additiona"6s&pervisor,s7 a""owance (1ed at P115*55 per wee4*9&rin
the third wee4 of November 1981, he was reverted to his former position
asdebit aent b&t, for &n4nown reasons, not paid so:ca""ed wee4"' sa"es
reserve of at"east P +55*55*;ina""' on %&ne +8, 198+, comp"ainant was
dismissed b' wa' of termination of hisaenc' contract*Petitioner assai"s
and ar&es that the respondent is not an emp"o'ee and that
hiscompensation was not based on an' (1ed n&mber of ho&rs he was
re<&ired todevote to the service of compan' b&t rather it was the
prod&ction or res&"t of hise=orts or his wor4 that was
bein compensated>hat the so:ca""ed a""owance for the (rst thirteen
wee4s that %&dico wor4ed asdebit aent, cannot be constr&ed as sa"ar'
b&t as a s&bsid' or a wa' of assistancefor transportation and mea"
e1penses of a new debit aent d&rin the initia" periodof his trainin which
was (1ed for thirteen 61/7 wee4s*Said contentions of petitioner were
stron"' re?ected b' respondent he maintainsthat he received a de(nite
amo&nt as his wae 4nown as 2sa"es reserve2 the fai"&reto maintain the
same wo&"d brin him bac4 to a beinner,s emp"o'ment with a(1ed
wee4"' wae of P +55*55 reard"ess of prod&ction*$e was assined a
de(nite p"ace in the o@ce to wor4 on when he is not in the (e"dand in
addition to canvassin and ma4in re&"ar reports*$e was b&rdened with
the ?ob of co""ection and to ma4e re&"ar wee4"' reportthereto for which
an anemic performance wo&"d mean dismissa"*$e earned o&t of his
faithf&" and prod&ctive service, a promotion to 8oneS&pervisor with
additiona" s&pervisor,s a""owance, 6a de(nite or (1ed amo&nt of P115*557
that he was dismissed primari"' beca&se of anemic performance and
notbeca&se of the termination of the contract of aenc' s&bstantiate the
fact that hewas indeed an emp"o'ee of the petitioner and not an
ins&rance aent in theordinar' meanin of the term
HELD An the case of !repa"ife v* %&dico, the Co&rt &phe"d the e1istence of
an emp"o'er:emp"o'ee re"ationship between the ins&rance compan' and
its aents, despite the fact that the compensation that the aents on
commission received was not paid b' the compan' b&t b' the investor or
the person ins&red* >he re"evant factor remains, as stated ear"ier,
whether the 2emp"o'er2 contro"s or has reserved the riht to contro" the
2emp"o'ee2 not on"' as to the res&"t of the wor4 to be done b&t a"so as to
the means and methods b' which the same is to be accomp"ished*

I!"#$%& L'() *. NLRC (N+*. 1,, 1989)FACTS
FACTS- Ans&"ar Life 6compan'7 and Basiao entered into a contract b'
which Basiao was a&thori#ed to so"icit forins&rance in accordance with the
r&"es of the compan'* $e wo&"d a"so receive compensation, in the form
of commissions* >he contract a"so contained the re"ations of the parties,
d&ties of the aent and the acts prohibited tohim inc"&din the modes of
termination*)fter C 'ears, the parties entered into another contract D an
)enc' 0anaerEs Contact D and to imp"ementhis end of it, Basiao
orani#ed an aenc' whi"e conc&rrent"' f&"(""in his commitment &nder
the (rst contract* >he compan' terminated the )enc' 0anaerEs
Contract* Basiao s&ed the compan' in a civi" action* >h&s,the compan'
terminated BasiaoEs enaement &nder the (rst contract and stopped
pa'ment of his commissions*
ISSUE F3N Basiao had become the compan'Es emp"o'ee b' virt&e of the
contract, thereb' p"acin his c"aim for&npaid commissions
HELD No*R&"es and re&"ations overnin the cond&ct of the b&siness
are provided for in the Ans&rance Code* >heser&"es mere"' serve as
&ide"ines towards the achievement of the m&t&a""' desired res&"t witho&t
dictatin themeans or methods to be emp"o'ed in attainin it* Ats aim is
on"' to promote the res&"t, thereb' creatin noemp"o'er:emp"o'ee
re"ationship* At is &s&a" and e1pected for an ins&rance compan' to
prom&"ate a set of r&"es to&ide its commission aents in se""in its
po"icies which prescribe the <&a"i(cations of persons who ma'
be ins&red*None of these rea""' invades the aentEs contract&a"
preroative to adopt his own se""in methods or to se""ins&rance at his
own time and convenience, hence cannot ?&sti(ab"e be said to estab"ish
an emp"o'er:emp"o'eere"ationship between Basiao and the compan'* >he
respondents "imit themse"ves to pointin o&t that BasiaoEs contract with
the compan' bo&nd him
toobserve and conform to s&ch r&"es* No showin that s&ch r&"es were in f
act prom&"ated which e=ective"'contro""ed or restricted his choice of
methods of se""in ins&rance* >herefore, Basiao was not an emp"o'ee of
the petitioner, b&t a commission aent, an independent contractwhose
c"aim for &npaid commissions sho&"d have been "itiated in an ordinar'
civi" action*Fherefore, the comp"ain of Basiao is dismissed*
E!-.-$+/%)0'% B&'1%!!'-%, I!- *". NLRC, G.R. N+. 87298, N+*)34)&
5, 19967 265 SCRA 1
P+"1)0 4. P'#" M+&%0+" +! N+*)34)& 12, 2211
(Labor Standards Inexistence of employer-employee relationship)
F%-1" Private respondent was a sa"es division manaer of private
petitioner and was in chare of se""in the "atterEs prod&cts thro&h sa"es
representatives* )s compensation, private respondent receive
commissions from the prod&cts so"d b' his aents* )fter resinin from
o@ce to p&rs&e his private b&siness, he ("ed a comp"aint aainst the
petitioner, c"aimin for non:pa'ment of separation pa' and other bene(ts*
Petitioner a""eed that comp"ainant was not its emp"o'ee b&t an
independent dea"er a&thori#ed to promote and se"" its prod&cts and in
ret&rn, received commissions therefrom* Petitioner did not have an' sa"ar'
and his income from petitioner was dependent on the vo"&me of sa"es
accomp"ished* $e had his own o@ce, (nanced the b&siness e1pense, and
maintained his own wor4force* >h&s petitioner ar&ed that it had no
contro" and s&pervision over the comp"ainant as to the manner and means
he cond&cted his b&siness operations*
>he Labor )rbiter r&"ed that comp"ainant was an emp"o'ee of the
petitioner compan'* Petioner had contro" over the comp"ainant since the
"atter was re<&ired to ma4e periodic reports of his sa"es activities to the
compan'*
I""#) Fhether or not there e1ists an emp"o'er:emp"o'ee re"ationship*
H)$0 No* Contro" of emp"o'eeEs cond&ct is common"' rearded as the
most cr&cia" and determinative indicator of the presence or absence of an
emp"o'er:emp"o'ee re"ationship* .nder this, an emp"o'er:emp"o'ee
re"ationship e1ists where the person for whom the services are performed
reserves the riht to contro" not on"' the end to be achieved, b&t a"so the
manner and means to be &sed in reachin that end*
>he fact that petitioner iss&ed memoranda to private respondent and to
other division sa"es manaers did not prove that petitioner had act&a"
contro" over them* >he di=erent memoranda were mere"' &ide"ines on
compan' po"icies which the sa"es manaers fo""ow and impose on their
respective aents*
ALIPIO R. RUGA, *". NATIONAL LABOR RELATIONS COMMISSION
Facts: Petitioners were the (shermen:crew members of G3B Sand'man AA,
one of severa" (shin vesse"s owned and operated b' private respondent
9e !&#man ;ishin Hnterprises which is primari"' enaed in the (shin
b&siness with port and o@ce at Cama"ian, Camarines S&r* Petitioners
rendered service aboard said (shin vesse" in vario&s capacities, as
fo""ows- )"ipio R&a and %ose Parma patron3pi"otI H"adio Ca"deron, chief
enineerI La&rente Ba&t&, second enineerI %aime Barbin, master
(shermanI Nicanor ;rancisco, second (shermanI Phi"ip Cervantes and
H"e&terio Barbin, (shermen*
;or services rendered in the cond&ct of private respondent,s re&"ar
b&siness of 2traw"2 (shin, petitioners were paid on percentae
commission basis in cash b' one 0rs* Pi"ar de !&#man, cashier of private
respondent* )s areed &pon, the' received thirteen percent 61/J7 of the
proceeds of the sa"e of the (sh:catch if the tota" proceeds e1ceeded the
cost of cr&de oi" cons&med d&rin the (shin trip, otherwise, the'
received ten percent 615J7 of the tota" proceeds of the sa"e* >he
patron3pi"ot, chief enineer and master (sherman received a minim&m
income of P/55*55 per wee4 whi"e the assistant enineer, second
(sherman, and (sherman:winchman received a minim&m income of
P+K5*55 per wee4*
On September 11, 198/ &pon arriva" at the (shin port, petitioners were
to"d b' %ore de !&#man, president of private respondent, to proceed to
the po"ice station at Cama"ian, Camarines S&r, for investiation on the
report that the' so"d some of their (sh:catch at midsea to the pre?&dice of
private respondent* Petitioners denied the chare c"aimin that the same
was a co&ntermove to their havin formed a "abor &nion and becomin
members of 9efender of And&stria" )ric&"t&ra" Labor Orani#ations and
!enera" For4ers .nion 69A)LO!F.7 on September /, 198/*
9&rin the investiation, no witnesses were presented to prove the chare
aainst petitioners, and no crimina" chares were forma""' ("ed aainst
them*
Notwithstandin, private respondent ref&sed to a""ow petitioners to ret&rn
to the (shin vesse" to res&me their wor4 on the same da', September
11, 198/*
On September ++, 198/, petitioners individ&a""' ("ed their comp"aints for
i""ea" dismissa" and non:pa'ment of 1/th month pa', emerenc' cost of
"ivin a""owance and service incentive pa', with the then 0inistr' 6now
9epartment7 of Labor and Hmp"o'ment, Reiona" )rbitration Branch No* L,
Leaspi Cit', )"ba'* >he' &niform"' contended that the' were arbitrari"'
dismissed witho&t bein iven amp"e time to "oo4 for a new ?ob*
I""#) Fhether or not the (shermen:crew members of the traw" (shin
vesse" G3B Sand'man AA are emp"o'ees of its owner:operator, 9e !&#man
;ishin Hnterprises*
R#$'!8 9isp&tin the (ndin of p&b"ic respondent that a 2?oint (shin
vent&re2 e1ists between private respondent and petitioners, petitioners
c"aim that p&b"ic respondent e1ceeded its ?&risdiction and3or ab&sed its
discretion when it added facts not contained in the records when it stated
that the pi"ot:crew members do not receive compensation from the boat:
owners e1cept their share in the catch prod&ced b' their own e=ortsI that
p&b"ic respondent inored the evidence of petitioners that private
respondent contro""ed the (shin operationsI that p&b"ic respondent did
not ta4e into acco&nt estab"ished ?&rispr&dence that the re"ationship
between the (shin boat operators and their crew is one of direct
emp"o'er and emp"o'ee*
Fe have consistent"' r&"ed that in determinin the e1istence of an
emp"o'er:emp"o'ee re"ationship, the e"ements that are enera""'
considered are the fo""owin 6a7 the se"ection and enaement of the
emp"o'eeI 6b7 the pa'ment of waesI 6c7 the power of dismissa"I and 6d7
the emp"o'er,s power to contro" the emp"o'ee with respect to the means
and methods b' which the wor4 is to be accomp"ished* 8 >he emp"o'ment
re"ation arises from contract of hire, e1press or imp"ied* 9 An the absence
of hirin, no act&a" emp"o'er:emp"o'ee re"ation co&"d e1ist*
;rom the fo&r 6C7 e"ements mentioned, we have enera""' re"ied on the so:
ca""ed riht:of:contro" test where the person for whom the services are
performed reserves a riht to contro" not on"' the end to be achieved b&t
a"so the means to be &sed in reachin s&ch end* >he test ca""s mere"' for
the e1istence of the riht to contro" the manner of doin the wor4, not the
act&a" e1ercise of the riht*
>he petition is !R)N>H9* >he <&estioned reso"&tion of the Nationa" Labor
Re"ations Commission dated 0a' /5,1985 is hereb' RHLHRSH9 and SH>
)SA9H* Private respondent is ordered to reinstate petitioners to their
former positions or an' e<&iva"ent positions with /:'ear bac4waes and
other monetar' bene(ts &nder the "aw* No prono&ncement as to costs*
P%8#'+ T&%!"/+&1 C+&/+&%1'+! * NLRC, 295 SCRA 6,
>he re"ationship of ta1i owners and ta1i drivers is the same as that
between ?eepne' owners and ?eepne' drivers &nder the Mbo&ndar'
s'stemN* >he ta1i operator e1ercises contro" over the driver* An 0artine# v
NLRC this co&rt a"read' r&"ed that the re"ationship of ta1i owners and ta1i
drivers is the same as that between ?eepne' owners and ?eepne' drivers
&nder the Mbo&ndar' s'stem*N An both cases the emp"o'er:emp"o'ee
re"ationship was deemed to e1ist, vi#- M>he re"ationship between ?eepne'
owners3operators on one hand and ?eepne' drivers on the other &nder the
bo&ndar' s'stem is that of emp"o'er:emp"o'ee and not of "essor:
"essee*111 >h&s, private respondent were emp"o'ees 111 beca&se the'
had been enaed to perform activities which were &s&a""' necessar' or
desirab"e in the &s&a" trade or b&siness of the emp"o'er*
J+ *". NLRC, G.R. N+. 12162,, F)4&#%&. 2, 22227 325 SCRA 537
(Labor Standards Existence of employer-employee relationship)
F%-1" Private respondent wor4in as a barber on piece:rate basis was
desinated b' petitioners as careta4er of their barbershop* Private
respondentEs d&ties as careta4er, in addition to his bein a barber, were-
17 to report to the owners of the barbershop whenever the aircondition
&nits ma"f&nction and3or whenever water or e"ectric power s&pp"' was
interr&ptedI +7 to ca"" the "a&ndr' woman to wash dirt' "inenI /7 to
recommend app"icants for interview and hirinI C7 to attend to other
needs of the shop* ;or this additiona" ?ob, he was iven an honorari&m
e<&iva"ent to13/ of the net income of the shop*
Private respondent "eft his ?ob vo"&ntari"' beca&se of his mis&nderstandin
with his co:wor4er and demanded separation pa' and other monetar'
bene(ts* PetitionerEs contends that respondent was not their emp"o'ee
b&t their Mpartner in tradeN whose compensation was based on a sharin
arranement per hairc&t or shavin ?ob done*
I""#) Fhether or not there e1ist an emp"o'er:emp"o'ee re"ationship*
H)$0 Oes* An determinin the e1istence of an emp"o'er:emp"o'ee
re"ationship, the fo""owin e"ements are considered- 17 se"ection and
enaement of wor4erI +7 power of dismissa"I /7 the pa'ment of waesI
and C7 the power to contro" the wor4erEs cond&ct, with the "atter ass&min
primac' in the overa"" consideration* >he power of contro" refers to the
e1istence of the power and not necessari"' to the act&a" e1ercise thereof*
At is not essentia" for the emp"o'er to act&a""' s&pervise the performance
of d&ties of the emp"o'eeI it is eno&h that the emp"o'er has the riht to
wie"d that power*
B)"% *. T&%9%!+
FACTS Respondent P)0PA ("ed a Petition for Certi(cation
H"ection* Petitioner opposed a""ein that there is no HR:HH re"ationship
between Besa and petitioners* >hese petitioners are shoe shiners paid on
a commission basis* >he<&estion of HR:HH re"ationship became a
primordia" consideration in reso"vin whether or not the s&b?ect
shoeshiners have the ?&ridica" persona"it' and standin to present a
petition for certi(cation as we"" as to vote therein*
ISSUE F3N HR:HH re"ationship e1ists betweem shoe shiners and Besa
HELD No*Shoe shiner is di=erent from a piece
worPer-Piece Fo4erShoe shiner1* paid for wor4 accomp"ished1* contrib&te
s an'thin to the capita" of theemp"o'er+* the emp"o'er pa's his waes+*
paid direct"' b' his c&stomer/* paid for wor4 accomp"ished
witho&tconcern to the pro(t derived b' emp"o'er/* the proceeds derived
from the trade aredivided share with respondent BHS)C* the emp"o'er
s&pervises and contro"s hiswor4C* respondent does not e1ercise
contro" >h&s, shoe shiners are not emp"o'ees of the compan', b&t are
partners, beca&se there is no contro" b' theowner and shoe shiners have
their own c&stomers whom the' chare a fee and divide the proceeds
e<&a""' withthe owner*
ABANTE VS. LAMADRID C/5 SCR) /K8* 0a' +8, +55C
FACTS Petitioner was emp"o'ed b' respondent compan' Lamadrid
Bearin and Parts Corporation asasa"esman coverin the who"e area of
0indanao* $is averae month"' income was more or "ess P1K,555*55, b&t
"ater was increased to appro1imate"' P+5, +K9*55* )side from se""in the
merchandise of Respondent Corporation, he was a"so tas4ed to co""ect
pa'ments from his vario&s c&stomers* Petitionerenco&ntered (ve
c&stomers3c"ients with bad acco&nts*Petitioner was confronted b'
respondent Lamadrid over the bad acco&nts and warned that if hedoes
not iss&e his own chec4s to cover the said bad acco&nts, his commissions
wi"" not be re"eased andhe wi"" "ose his ?ob* Not contented with the
iss&ance of the foreoin chec4s as sec&rit' for the badacco&nts,
respondents 2tric4ed2 petitioner into sinin two doc&ments, which he
"ater discovered to bea Promissor' Note and a 9eed of Rea" Hstate
0ortae*9&e to (nancia" di@c&"ties, petitioner in<&ired abo&t his
membership with the SSS in order toapp"' for a sa"ar' "oan* >o his disma',
he "earned that he was not covered b' the SSS and therefore wasnot
entit"ed to an' bene(t* Fhi"e doin his &s&a" ro&nds as commission
sa"esman, petitioner washanded b' his c&stomers a "etter from the
respondent compan' warnin them not to dea" withpetitioner since it no
"oner reconi#ed him as a commission sa"esman* Petitioner th&s ("ed a
comp"aintfor i""ea" dismissa" with mone' c"aims aainst respondent
compan' and its president, %ose Lamadrid,before the NLRC*
ISSUE whether or not an emp"o'er:emp"o'ee re"ationship e1ists between
p"ainti= and respondentcompan'
RULING >o ascertain the e1istence of an emp"o'er:emp"o'ee
re"ationship, ?&rispr&dence has invariab"'app"ied the fo&r:fo"d test,
name"'- 617 the manner of se"ection and enaementI 6+7 the pa'ment
of waesI 6/7 the presence or absence of the power of dismissa"I and 6C7
the presence or absence of thepower of contro"* Of these fo&r, the "ast one
is the most important* .nder the contro" test, an emp"o'er:emp"o'ee
re"ationship e1ists where the person for whom the services are performed
reserves the rihtto contro" not on"' the end achieved, b&t a"so the
manner and means to be &sed in reachin that end*Fhere a person who
wor4s for another does so more or "ess at his own p"eas&re and is
nots&b?ect to de(nite ho&rs or conditions of wor4, and in t&rn is
compensated accordin to the res&"t of hise=orts and not the amo&nt
thereof, no re"ationship of emp"o'er:emp"o'ee e1ists*Petitioner )bante
was a commission sa"esman who received

/J commission of his ross sa"es*No <&ota was imposed on him b' the
respondent* $e was not re<&ired to report to the o@ce at an'time or
s&bmit an' periodic written report on his sa"es performance and activities*
$e was notdesinated b' respondent to cond&ct his sa"es activities at an'
partic&"ar or speci(c p"ace* $e p&rs&edhis se""in activities witho&t
interference or s&pervision from respondent compan' and re"ied on his
ownreso&rces to perform his f&nctions* Respondent compan' did not
prescribe the manner of se""in themerchandiseI he was "eft a"one to
adopt an' st'"e or strate' to entice his c&stomers* 0oreover,petitioner
was free to o=er his services to other companies enaed in simi"ar or
re"ated mar4etinactivities as evidenced b' the certi(cations iss&ed b'
vario&s c&stomers*
FILIPINAS BROADCASTING NET:OR;, INC., petitioner
vs. NATIONAL LABOR RELATIONS COMMISION
>he facts as viewed b' private respondent are as fo""ows-
[7]
M>he comp"ainant 6herein private respondent7 bean to wor4 for the
respondent as a radio reporter startin 0arch 11, 1995* On 0a' 1C, 1995,
&pon bein informed b' then respondentEs Station 0anaer, 0r* P"aride"
Broca"es, that comp"ainantEs emp"o'ment with respondent is bein
b"oc4ed b' 0s* Brenda Ba'ona of 98!B, comp"ainantEs previo&s emp"o'er,
the said comp"ainant too4 a "eave of absence* An the (rst wee4 of %&ne,
1995, the respondent thr& 0r* )ntonio L"arena, then an emp"o'ee of the
respondent, as4ed the comp"ainant to ret&rn to wor4 even as he was
ass&red that his sa"aries wi"" be paid to him a"read'* >h&s, the comp"ainant
contin&ed to wor4 for the respondent since then* On September 5, 1991,
aain the comp"ainant too4 a "eave of absence beca&se of his desperation
over the fai"&re of respondent to ma4e ood its promise of pa'ment of
sa"aries* $e was reinstated on %an&ar' 1K, 199+ and resined on ;ebr&ar'
+G, 199+ when he decided to r&n for an e"ective o@ce in the town of
9araa, a"ba'* .nfort&nate"', the respondent paid sa"ar' to the
comp"ainant on"' for the period from %an&ar' 1K, 199+ &p to ;ebr&ar' +G,
199+* Respondent did not pa' the comp"ainant for a"" the services
rendered b' the "atter from 0arch 11, 1995 &p to %an&ar' 1K, 199+*N
>he fo""owin are enera""' considered in the determination of the
e1istence of an emp"o'er:emp"o'ee re"ationship- 617 the manner of
se"ection and enaement, 6+7 the pa'ment of waes, 6/7 the presence or
absence of the power of dismissa", and 6C7 the presence or absence of the
power of contro"I of these fo&r, the "ast one is the most important*
Q+5R
Power of Dismissal
Li4ewise, the evidence on record shows that petitioner did not e1ercise the
power to dismiss private respondent d&rin the period in <&estion* in
September 1991, Private Respondent 0apa ceased actin as a vo"&nteer
reporter, not beca&se he was (red , b&t beca&se he stopped sendin his
reports* Anacio Casi, O@ce S&pervisor of 98RC, dec"ared in his a@davit
that 0apa to"d him that Mhe QwasR <&ittin a"read' beca&se his sponsors
were no "oner pa'in him of QsicR his month"' contract with them*N 0apa
did not controvert this statement* An fact, his aforesaid "etter of October
1G, 1991 e1pressed his hope of bein Miven the chance to be reconi#ed
as a re&"ar reporter*N Private respondentEs attit&de in said "etter is
inconsistent with the notion that he had been dismissed*
Power of control
>he most cr&cia" test D the contro" test D demonstrates a"" too c"ear"' the
absence of an emp"o'ee:emp"o'ee re"ationship* No one at the 98RC had
the power to re&"ate or contro" private respondentsE activities or inp&ts*
.n"i4e the re&"ar reporters, he was not s&b?ect to an' s&pervision b'
petitioner or its o@cia"s* Re&"ar reporters Mare re<&ired b' the petitioner
to adhere to a proram sched&"e which de"ineates the time when the' are
to render their reports, as we"" as the topic to be reported &pon* >he
s&bstance of their reports are QsicR oftentimes screened b' the station
prior to QtheirR act&a" airin* An contrast, vo"&nteer reporters are never
iven s&ch a proram sched&"e b&t are mere"' advised to inform the
station of the reports the' wo&"d ma4e from time to time*N
[24]
Andeed, 98RC, the petitionerEs radio station , e1ercised no editoria" rihts
over his reports* $e had no (1ed da' or time for ma4in his reportsI in
fact, he was not re<&ired to report an'thin at a""* Fhether he wo&"d air
an'thin depended entire"' on him and his convenience*
USHIO MAR;ETING *". NATIONAL LABOR RELATIONS COMMISSION
<G.R. N+. 125,,1. A#8#"1 28, 1998=
F%-1" Petitioner &res &s to ann&" the decision of the Nationa" Labor
Re"ationsCommission 6NLRC7 which reversed the Labor )rbiter,s decision
which denied
petitionerEs motion for reconsideration*

Private respondent Severino )ntonio was an e"ectrician who wor4ed within
the premises
of petitioner .shioEs car accessor' shop in Banawe, S&e#on Cit'* On
)&&st ++, 199C,
private respondent ("ed a comp"aint for i""ea" dismissa", non:pa'ment of
overtime pa',ho"ida' pa', and other bene(ts aainst petitioner .shio
0ar4etin which was doc4etedas NLRC NCR Case No* 58:5K1CG:9C and
assined to Labor )rbiter ;ac&ndo L* Leda*

An PetitionerEs 0otion to 9ismiss, she a""eed that it was a sin"e
proprietorship enaed
in the b&siness of se""in a&tomobi"e spare parts
and accessories* Petitioner c"aimedthat private respondent was not amon
her emp"o'ees b&t a free "ance operator who
waitQedR on the shopEs c&stomers sho&"d the "atter re<&ire his services
*On %an&ar' 1/, 1995, Labor )rbiter ;ac&ndo L* Leda premisin on the
a""eationscontained in the 0otion to 9ismiss s&bmitted b' the petitioner
Compan', iss&ed anorder dismissin the comp"aint of private respondent
Severino )ntonio aainst petitioner.shio 0ar4etin Corp*

On ;ebr&ar' +8, 1995, private respondent assisted b' the P&b"ic
)ttorne'Es O@ce,
appea"ed the order of the $onorab"e Labor )rbiter to the Commission* An
hismemorand&m, private respondent a""eed that .shio 0ar4etin hired
his services on 15November 1981 &nti" %&"' /, 199C as an e"ectrician with
a dai"' sa"ar' of one h&ndredthirt' two pesos 6P1/+*557 per da'*
I""#) Fhether or not there was an emp"o'ee:emp"o'er re"ationship*
H)$0 >he factors to be considered in determinin the e1istence of an
emp"o'er:emp"o'ee re"ationship are- 617 the se"ection and enaement of
the emp"o'eeI 6+7 thepa'ment of waesI 6/7 the power of dismissa"I and
6C7 the power to contro" the
emp"o'eeEs cond&ct* >he so
:ca""ed 2contro" test2 is common"' rearded as the mostcr&cia" and
determinative indicator of the presence or absence of an emp"o'er:
emp"o'ee re"ationship* .nder the contro" test, an emp"o'er:emp"o'ee
re"ationshipe1ists where the person for whom the services are performed
reserves the riht tocontro" not on"' the end achieved, b&t a"so the
manner and means to be &sed inreachin that end*
Ditan vs. POEA Administrator [G.R. No. 79560 Decemer !" #990]
F%-1" )ndres H* 9itan was recr&ited b' private respondent Antraco Sa"es
Corporation, thro&h its "oca" aent, )sia For"d, the other
private respondent, to wor4 in )no"a as a we"din s&pervisor* >he
contract was for nine months, at a month"' sa"ar' of .ST1,155*55 or
.ST+G5*55 wee4"', and contained the re<&ired standard stip&"ations for
the protection of o&r overseas wor4ers* )rrivin on November /5, 198C, in
L&anda, capita" of )no"a, the petitioner was assined as an ordinar'
we"der in the AN>R)CO centra" maintenance shop from 9ecember + to +5,
198C* On 9ecember +K, 198C, he was informed, to his distress that wo&"d
be transferred to Paf&nfo, some /55 4i"ometers east of L&anda* >his was
the p"ace where, ear"ier that 'ear, the rebe"s had attac4ed and 4idnapped
e1patriate wor4ers, 4i""in two ;i"ipinos in the raid* Nat&ra""', 9itan was
re"&ctant to o* $owever, he was ass&red b' the AN>R)CO manaer that
Paf&nfo was safe and ade<&ate"' protected b' overnment troopsI
moreover, he was to"d he wo&"d be sent home if he ref&sed the new
assinment* An the end, with m&ch misivin, he re"ented and areed* On
9ecember +9, 198C, his fears were con(rmed* >he .nita rebe"s
attac4ed the diamond minin site where 9itan was wor4in and too4 him
and si1teen other ;i"ipino hostaes, a"on with other forein wor4ers* >he
rebe"s and their captives wa"4ed thro&h ?&n"e terrain for /1 da's to the
.nita stronho"d near the Namibian border* >he' tre44ed for a"most a
tho&sand 4i"ometers* >he' s&bsisted on meaer fare* Some of them had
diarrhea* >heir feet were b"istered* At was on"' on 0arch 1K, 1985, that the
hostaes were (na""' re"eased after the intercession of their overnments
and the Anternationa" Red Cross* Si1 da's "ater, 9itan and the other ;i"ipino
hostaes were bac4 in the Phi"ippines* >he repatriated wor4ers had been
ass&red b' AN>R)CO that the' wo&"d be iven priorit' in re:emp"o'ment
abroad, and event&a""' e"even of them were ta4en bac4* 9itan havin
been e1c"&ded, he ("ed in %&ne 1985 a comp"aint aainst the private
respondents for breach of contract and vario&s other c"aims* Speci(ca""',
he so&ht the amo&nt of .STC,KG5*55, representin his sa"aries for the
&ne1pired 1G wee4s of his contractI .ST+5,555*55 as war ris4 bon&sI
.ST+,19K*55 as the va"&e of his "ost be"oninsI .ST1,155 for &npaid
vacation "eaveI and mora" and e1emp"ar' damaes in the s&m of
.ST55,555*55, p"&s attorne',s fees*
)"" these c"aims were dismissed b' POH) )dministrator >omas 9* )chacoso
in a decision dated %an&ar' +G, 198G* + >his was a@rmed in toto
b' respondent NLRC in a reso"&tion dated %&"' 1C, 198G, / which is now
bein cha""ened in this petition*
I""#) Fhether or not this case is within NLRC ?&risdictiona and if 9itan is
entit"ed to an' re"iefU
H)$0 Oes* >he fact that stands o&t most prominent"' in the record is the
ris4 to which the petitioner was s&b?ected when he was assined, after his
re"&ctant consent, to the rebe":infested reion of Paf&nfo* >his was a
danero&s area* >he petitioner had one to that forein "and in search of a
better "ife that he co&"d share with his "oved ones after his stint abroad*
>hat choice wo&"d have re<&ired him to come home empt':handed to the
disappointment of an e1pectant fami"'* At is not e1p"ained wh' the
petitioner was not paid for the &ne1pired portion of his contract which had
1G more wee4s to o* >he hostaes were immediate"' repatriated after
their re"ease, pres&mab"' so the' co&"d recover from their ordea"* >he
promise of AN>R)CO was that the' wo&"d be iven priorit' in re:
emp"o'ment sho&"d their services be needed* An the partic&"ar case of the
petitioner, the promise was not f&"(""ed* At wo&"d seem that his wor4 was
terminated, and not aain re<&ired, beca&se it was rea""' intended a""
a"on to assin him on"' to Paf&nfo*
>he private respondents stress that the contract 9itan entered into ca""ed
for his emp"o'ment in )no"a, witho&t indication of an' partic&"ar p"ace of
assinment in the co&ntr'* >his meant he areed to be assined to wor4
an'where in that co&ntr', inc"&din Paf&nfo* Fhen AN>R)CO assined
9itan to that p"ace in the re&"ar co&rse of its b&siness, it was mere"'
e1ercisin its rihts &nder theemp"o'ment contract that 9itan had free"'
entered into* $ence, it is ar&ed, he cannot now comp"ain that there was a
breach of that contract for which he is entit"ed to monetar' redress* >he
private respondents a"so re?ect the c"aim for war ris4 bon&s and point o&t
that POH) 0emorand&m Circ&"ar No* C, iss&ed p&rs&ant to the mandator'
war ris4 coverae provision in Section +, R&"e LA, of thePOH) R&"es and
Re&"ations on Overseas Hmp"o'ment, cateori#in )no"a as a war ris4
too4 e=ect on"' on ;ebr&ar' K, 19852after the petitioner,s dep"o'ment to
)no"a on November +G, 198C*2 Conse<&ent"', the stip&"ation co&"d not
be app"ied to the petitioner as it was not s&pposed to have a retroactive
e=ect*
>he paramo&nt d&t' of this Co&rt is to render ?&stice thro&h "aw* >he "aw
in this case a""ows two opposite interpretations, one strict"' in favor of the
emp"o'ers and the other "ibera""' in favor of the wor4er* >he choice is
obvio&s* Fe (nd, considerin the tota"it' of the circ&mstances attendin
this case, that the petitioner is entit"ed to re"ief* >he petitioner went to
)no"a prepared to wor4 as he had promised in accordance with
the emp"o'ment contract he had entered into in ood faith with the
private respondents* Over his ob?ection, he was sent to a danero&s
assinment and as he feared was ta4en hostae in a rebe" attac4 that
prevented him from f&"(""in his contract whi"e in captivit'* .pon his
re"ease, he was immediate"' sent home and was not paid the sa"ar'
correspondin to the &ne1pired portion of his contract* $e was
immediate"' repatriated with the promise that he wo&"d be iven priorit'
in re:emp"o'ment, which never came* >o r&b sa"t on the wo&nd, man' of
his co:hostaes were re:emp"o'ed as promised* >he petitioner was "eft
on"' with a b"ea4 e1perience and nothin to show for it e1cept dashed
hopes and a sense of re?ection*
.nder the po"ic' of socia" ?&stice, the "aw bends over bac4ward to
accommodate the interests of the wor4in c"ass on the h&mane
?&sti(cation that those with "ess privi"ees in "ife sho&"d have more
privi"ees in "aw*
I$%" *". NLRC, G.R. N+". 92395>97, 7 F)4&#%&. 19917 193 SCRA 682
(Labor Standards Agents hired without nowledge and consent of
recruitment agency)
F%-1" Petitioners app"'in for overseas emp"o'ment in 9oha, Satar, with
CB>3Shei4 Anternationa", were assisted b' a "iaison o@cer of private
respondent )"" Season 0anpower Anternationa" Services, who processed
their papers and ave them trave" e1it passes 6>HPS7* )fter bein
dep"o'ed and wor4ed for C months witho&t bein paid, the' ("ed a
comp"aint to recover their &npaid sa"aries and for waes coverin the
&ne1pired portion of their contracts aainst private respondent*
I""#) FON a recr&itment aenc' be "iab"e for &npaid waes and other
c"aims of overseas wor4ers who appear to be recr&ited b' its aent
witho&t its 4now"ede and consent*
H)$0 No* At is tr&e that the r&"es and re&"ations of the POH) provide that
the private emp"o'ment or recr&itment aenc' is made to ass&me f&"" and
comp"ete responsibi"it' for a"" acts of its o@cia"s and representatives done
in connection with recr&itment and p"acement* $owever, where the
recr&itment was act&a""' made b' respondent aenc'Es aent in beha"f of
CB>3Shie4 Anternationa", not the private respondent, and the name of
private respondent was on"' &sed as a means to enab"e petitioners to be
iss&ed >HPS for trave" p&rposes, obvio&s"' witho&t the 4now"ede and
consent of private respondent, the "atter cannot be he"d "iab"e for the
c"aims of petitioners*
JMM P&+3+1'+! %!0 M%!%8)3)!1, I!-. *". CA, G.R. N+. 12229,,
A#8#"1 ,, 19967
(Labor Standards Artist !ecord "oo as a re#uirement for o$erseas
employment contract)
F%-1" >he dep"o'ment of fema"e entertainers to %apan was contro""ed b'
the overnment thro&h 9epartment Order No* /, wherein said
entertainers were re<&ired an )rtist Record Boo4 as a precondition to the
processin b' the POH) of an' contract for overseas emp"o'ment*
Petitioners contends that overseas emp"o'ment is a propert' riht within
the meanin of the Constit&tion and avers that the a""eed deprivation
thereof thro&h the onero&s re<&irement of an )RB vio"ates d&e process
and constit&tes an inva"id e1ercise of po"ice power*
I""#) FON an )rtist Record Boo4 is a va"id re<&irement for overseas
emp"o'ment*
H)$0 Oes* >he )RB re<&irement and the <&estioned 9epartment order
re"ated to its iss&ance were iss&ed p&rs&ant to a va"id e1ercise of po"ice
power which considers the we"fare of ;i"ipino performin artists,
partic&"ar"' the women*
ASIAN CENTER FOR CAREER AND EMPLO?MENT S?STEM AND
SERVICES, INC. (ACCESS), petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION %!0 IBNO MEDIALES, respondents.
9 H C A S A O N
An this petition for certiorari, petitioner )SA)N CHN>HR ;OR C)RHHR V
H0PLOO0HN> SOS>H0 V SHRLACHS, ANC* 6)CCHSS7 see4s to modif' the
monetar' awards aainst it in the 9ecision of respondent Nationa" Labor
Re"ations Commission 6NLRC7, dated October 1C, 199G, a case for i""ea"
dismissa"*
>he records disc"ose that petitioner hired respondent ABNO 0H9A)LHS to
wor4 as a mason in %eddah, Sa&di )rabia, with a month"' sa"ar' of 1,+55
Sa&di Ri'a"s 6SR7* >he term of his contract was two 6+7 'ears, from
;ebr&ar' +8, 1995 &nti" ;ebr&ar' +8, 199G*
On 0a' +K, 199K, respondent app"ied with petitioner for vacation "eave
with pa' which he earned after wor4in for more then a 'ear* $is
app"ication for "eave was ranted* Fhi"e en ro&te to the Phi"ippines, his
co:wor4ers informed him that he has been dismissed from service* >he
information t&rned o&t to be tr&e*
On %&ne 1G, 199K, respondent ("ed a comp"aint with the "abor arbiter for
i""ea" dismissa", non:pa'ment of overtime pa', ref&nd of transportation
fare, i""ea" ded&ctions, non:pa'ment of 1/
th
month pa' and sa"ar' for the
&ne1pired portion of his emp"o'ment contract*
On 0arch 1G, 199G, the "abor arbiter fo&nd petitioner &i"t' of i""ea"
dismissa"*
[1]
>he dispositive portion reads-
MAN LAHF O; >$H ;ORH!OAN!, ?&dment is hereb' rendered dec"arin the
i""ea"it' of comp"ainantEs dismissa" and orderin the respondent )CCHSS
and3or )B9.LL)$ LHLAN) to pa' the comp"ainant the amo&nt of SR 1/,+55
representin comp"ainantEs pa'ment for the &ne1pired portion of his
contract and ref&nd of the i""ea"it' ded&cted amo&nt "ess P5,555*55, the
"ea""' a""owed p"acement fee*
MRespondent are f&rther ordered to pa' attorne'Es fees e<&iva"ent to ten
percent 615J7 of the ?&dment award or the amo&nt of SR 1,/+5, within
ten 6157 da's from receipt hereof*
M)"" other iss&es are dismissed for "ac4 of merit*
MSO OR9HR9*N 6emphasis s&pp"ied7
At is noteworth', however, that in the bod' of his decision, the "abor
arbiter app"ied Section 15 R*)* 85C+,
[2]
the "aw re"ative to the protection of
;i"ipino overseas:wor4ers, and comp&ted private respondentEs sa"ar' for
the &ne1pired portion of his contract as fo""ows- SR1,+55 1 / months
W SR/,K55*
On appea" b' petitioner, the NLRC a@rmed the fact&a" (ndins of the "abor
arbiter b&t modi(ed the appea"ed decision b' de"etin the order of ref&nd
of e1cessive p"acement fee for "ac4 of ?&risdiction*
[3]
Petitioner moved for reconsideration with respect to the "abor arbiterEs
award of SR1/,+55 in the dispositive portion of the decision, representin
respondentEs sa"ar' for the &ne1pired portion of his contract* invo4in
Section 15 R*)* 85C+* Petitioner &red that its "iabi"it' for respondentEs
sa"ar' is for on"' three 6/7 months* Petitioner c"aimed that it sho&"d pa'
on"' SR /*K55 6SR 1,+55 1 / months7 for the &ne1pired portion of
respondentEs emp"o'ment and SR/K5 615J of SR/,K557 for attorne'Es
fees*
[4]
>he NLRC denied petitionerEs motion* At r&"ed that R*)* 85C+ does not
app"' as respondentEs emp"o'ment which started in ;ebr&ar' 1995
occ&rred prior to its e=ectivit' on %&"' 15, 1995*
[5]
$ence, this petition for certiorari%
An the case at bar, petitionerEs i""ea" dismissa" from service is no "oner
disp&ted* Petitioner mere"' imp&ns the monetar' awards ranted b' the
NLRC to private respondent* At s&bmits that a"tho&h the &ne1pired
portion of private respondentEs emp"o'ment contract is eiht 687 months,
[6]
it is "iab"e to pa' respondent on"' three 6/7 months of his basic sa"ar',
p&rs&ant to Section 15 of R*)* 85C+, or SR1,+55 6month"' sa"ar'7
m&"tip"ied b' / months, for a tota" of SR/,K55* Petitioner c"aims that the
NLRC erred in r&"in that as private respondentEs emp"o'ment started on"'
on ;ebr&ar' +8, 1995, R*)* 85C+, which too4 e=ect on %&"' 15, 1995, wo&"d
not app"' to his case* Petitioner ar&es that it is not the date of
emp"o'ment b&t the date of dismissa" which sho&"d be considered in
determinin the app"icabi"it' of R*)* 85C+* Petitioner pra's that the award
in the NLRC 9ecision dated October 1C, 199G, be chaned to SR/,K55
instead of 1/,+55 and that the award of attorne'Es fees be de"eted*
Fe a@rm with modi(cations*
)s a r&"e, ?&risdiction is determined b' the "aw at the time of the
commencement of the action*
[7]
An the case at bar, private respondentEs
ca&se of action did not accr&e on the date of his date of his emp"o'ment
or on ;ebr&ar' +8, 1995* $is ca&se of action arose on"' from the:time he
was i""ea""' dismissed b' petitioner from service in %&ne 199K, after his
vacation "eave e1pired* At is th&s c"ear that R*)* 85C+ which too4 e=ect a
'ear ear"ier in %&"' 1995 app"ies to the case at bar*
.nder Section 15 of R*)* 85C+, a wor4er dismissed from overseas
emp"o'ment witho&t ?&st, va"id or a&thori#ed ca&se is entit"ed to his sa"ar'
for the &ne1pired portion of his emp"o'ment contract or for three 6/7
months for ever' 'ear of the &ne1pired term, whichever is "ess*
An the case at bar, the &ne1pired portion of private respondentEs
emp"o'ment contract is eiht 687 months* Private respondent sho&"d
therefore be paid his basic sa"ar' correspondin to three 6/7 months or a
tota" of SR/,K55*
[8]
Fe note that this same comp&tation was made b' the "abor arbiter in
the bod' of his decision*
[9]
9espite said comp&tation in the bod' of the
decision, however, the "abor arbiter awarded hiher s&m 6SR1/,+557 in
the dispositive portion*
>he enera" r&"e is that where there is a conXict between the dispositive
portion or the fallo and the bod' of the decision, the fallo contro"s* >his
r&"e rests on the theor' that the fallo is the (na" order whi"e the opinion in
the bod' is mere"' a statement orderin nothin* $owever, where the
inevitab"e conc"&sion from the bod' of the decision is so c"ear as to show
that there was a mista4e in the dispositive portion, the bod' of the
decision wi"" prevai"*
[10]
Fe (nd that the "abor arbiterEs award of a hiher amo&nt in the dispositive
portion was c"ear"' an error for there is nothin in the te1t of the decision
which s&pport the award of said hiher amo&nt* Fe reiterate that the
correct award to private respondent for the &ne1pired portion of his
emp"o'ment contract is SR/,K55*
Fe come now to the award of attorne'Es fees in favor of private
respondent* )rtic"e ++58 of the Civi" Code a""ows attorne'Es fees to be
awarded when its c"aimant is compe""ed to "itiate with third persons or to
inc&r e1penses to protect his interest b' reason of an &n?&sti(ed act or
omission of the part' for whom it is so&ht* 0oreover, attorne'Es fees are
recoverab"e when there is s&@cient showin of bad faith*
[11]
>he Labor
Code,
[12]
on the other hand, (1es the attorne'Es fees that ma' be
recovered in an amo&nt which sho&"d not e1ceed 15J of the tota" amo&nt
of waes awarded*
An the case at bar, petitionerEs bad faith in dismissin private respondent
is manifest* Respondent was made to be"ieve that he wo&"d be
temporari"' "eavin %eddah, Pindom of Sa&di )rabia, for a /5:da'
vacation "eave with pa'* $owever, whi"e on board the p"ane bac4 to the
Phi"ippines, his co:emp"o'ees to"d him that he has been dismissed from
his ?ob as he was iven on"' a one:wa' p"ane tic4et b' petitioner* >r&e
eno&h, private respondent was not a""owed to ret&rn to his ?obsite in
%eddah after his vacation "eave* >h&s, private respondent was compe""ed
to ("e an action for i""ea" dismissa" with the "abor arbiter and hence
entit"ed to an award of attorne'Es fees*
AN LAHF O; >$H ;ORH!OAN!, the decision of the p&b"ic respondent
Nationa" Labor Re"ations Commission, dated October 1C, 199G, is
);;AR0H9 with modi(cations- petitioner is ordered to pa' private
respondent ABNO 0H9A)LHS the peso e<&iva"ent of the amo&nts of
SR/,K55 for the &ne1pired portion of his emp"o'ment
contract, and SR/K5 for attorne'Es fees* No costs*
ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC.
FACTS Petitioner )ntonio Serrano was hired b' respondents !a""ant
0aritime Services, Anc* and 0ar"ow Naviation Co*, Anc*, &nder a POH):
approved contract of emp"o'ment for 1+ months, as Chief O@cer, with the
basic month"' sa"ar' of .ST1,C55, p"&s TG553month overtime pa', and G
da's paid vacation "eave per month*
On the date of his depart&re, Serrano was constrained to accept a
downraded emp"o'ment contract &pon the ass&rance and representation
of respondents that he wo&"d be Chief O@cer b' the end of )pri" 1998*
Respondents did not de"iver on their promise to ma4e Serrano Chief
O@cer*
$ence, Serrano ref&sed to sta' on as second O@cer and was repatriated
to the Phi"ippines, servin on"' two months and G da's, "eavin an
&ne1pired portion of nine months and twent':three da's*
.pon comp"aint ("ed b' Serrano before the Labor )rbiter 6L)7, the
dismissa" was dec"ared i""ea"*
On appea", the NLRC modi(ed the L) decision based on the provision of
R) 85C+*
Serrano ("ed a 0otion for Partia" Reconsideration, b&t this time he
<&estioned the constit&tiona"it' of the "ast c"a&se in the 5th pararaph of
Section 15 of R) 85C+*
ISSUES
1* Fhether or not the s&b?ect c"a&se vio"ates Section 15, )rtic"e AAA of the
Constit&tion on non:impairment of contractsI
+* Fhether or not the s&b?ect c"a&se vio"ate Section 1, )rtic"e AAA of the
Constit&tion, and Section 18, )rtic"e AA and Section /, )rtic"e YAAA on "abor
as a protected sector*
HELD
On the (rst iss&e*
>he answer is in the neative* PetitionerEs c"aim that the s&b?ect c"a&se
&nd&"' interferes with the stip&"ations in his contract on the term of his
emp"o'ment and the (1ed sa"ar' pac4ae he wi"" receive is not tenab"e*
>he s&b?ect c"a&se ma' not be dec"ared &nconstit&tiona" on the ro&nd
that it impines on the impairment c"a&se, for the "aw was enacted in the
e1ercise of the po"ice power of the State to re&"ate a b&siness, profession
or ca""in, partic&"ar"' the recr&itment and dep"o'ment of O;Fs, with the
nob"e end in view of ens&rin respect for the dinit' and we"":bein of
O;Fs wherever the' ma' be emp"o'ed*
On the second iss&e*
>he answer is in the a@rmative*
>o ;i"ipino wor4ers, the rihts &aranteed &nder the foreoin
constit&tiona" provisions trans"ate to economic sec&rit' and parit'*
.pon c&rsor' readin, the s&b?ect c"a&se appears facia""' ne&tra", for it
app"ies to a"" O;Fs* $owever, a c"oser e1amination revea"s that the
s&b?ect c"a&se has a discriminator' intent aainst, and an invidio&s impact
on, O;Fs at two "eve"s-
;irst, O;Fs with emp"o'ment contracts of "ess than one 'ear vis:Z:vis
O;Fs with emp"o'ment contracts of one 'ear or moreI
Second, amon O;Fs with emp"o'ment contracts of more than one 'earI
and
>hird, O;Fs vis:Z:vis "oca" wor4ers with (1ed:period emp"o'mentI
>he s&b?ect c"a&se sin"es o&t one c"assi(cation of O;Fs and b&rdens it
with a pec&"iar disadvantae*
>h&s, the s&b?ect c"a&se in the 5th pararaph of Section 15 of R*)* No*
85C+ is vio"ative of the riht of petitioner and other O;Fs to e<&a"
protection*
>he s&b?ect c"a&se Mor for three months for ever' 'ear of the &ne1pired
term, whichever is "essN in the 5th pararaph of Section 15 of Rep&b"ic )ct
No* 85C+ is 9HCL)RH9 .NCONS>A>.>AON)L*
A""+-'%1'+! +( M%&'!) O@-)&" %!0 S)%3)! +( R).)" %!0 L'3 C+.
*". L%8#)"3%,
(Labor Standards &arine o'cers are managerial employees)
F%-1" Petitioner &nion c"aims that the positions ma?or patron, minor
patron, chief mate and chief enineer are not manaeria" emp"o'ees b&t
ran4 and ("e, and hence these emp"o'ees wo&"d be e"iib"e to form part of
the &nion and ta4e part in the certi(cation e"ection* Petitioner contends
that the marine o@cers in <&estion m&st possess the power to "a' down
and form&"ate manaement po"icies aside from ?&st e1ec&tin s&ch
po"icies* Said marine o@cers do not have this power beca&se the' mere"'
naviate the ba' and rivers of Pasi and Bataan ha&"in LP!s*
P&b"ic respondent opined in an eva"&ation of the afore:mentioned ?ob
descriptions that these are manaeria" positions based on )rtic"e +1+ 6m7
of the Labor Code which de(nes manaeria" emp"o'ees as Mone who is
vested with powers or preroatives to "a' down and e1ec&te manaement
po"icies and3or to hire, transfer , s&spend, "a':o=, reca"", dischare, assin
or discip"ine emp"o'ees*N
I""#) FON the positions of ma?or patron, minor patron, chief mate and
chief enineer are manaeria"*
H)$0 Oes* >he ?ob description on record disc"oses that the ma?or patronEs
d&ties inc"&de ta4in comp"ete chare and command of the ship and
performin responsibi"ities and d&ties of a ship captainI the minor patron
a"so commands the vesse", p"'in the "imits of in"and waterwa's, ports
and est&ariesI the chief mate performs the f&nctions of an e1ec&tive
o@cer ne1t in command to the captainI and the chief marine enineer
ta4es over:a"" chare of the operations of the shipEs mechanica" and
e"ectrica" e<&ipment*
>h&s the e1ercise of discretion and ?&dment in directin a shipEs co&rse is
as m&ch manaeria" in nat&re as decisions arrived at in the con(nes of the
more conventiona" board room or e1ec&tive o@ce*
M)&-'0%& F'"A'!8 C+&/+&%1'+! *". NLRC, G.R. N+. 112,75. O-1+4)&
8, 19987 297 SCRA 552
(Labor Standards (ishermen are not )eld personnels* Article +,)
F%-1" Private respondent emp"o'ed as a MbodeeroN or shipEs
<&artermaster comp"ained of bein constr&ctive"' dismissed b' petitioner
corporation when the "atter ref&sed him assinments aboard its boats
after he had reported to wor4* >he Larbor )rbiter rendered a decision
orderin petitioner corporation to reinstate comp"ainant with bac4 waes,
pa' him his 1/
th
month pa' and incentive "eave* Petitioner c"aims that it
cannot be he"d "iab"e for service incentive "eave pa' b' (shermen in its
emp"o' as the "atter s&pposed"' are M(e"d personne"N and th&s not
entit"ed to s&ch pa' &nder the Labor Code*
)rtic"e 8+ of the Labor Code provides amon others that M(e"d personne"N
sha"" refer to non:aric&"t&ra" emp"o'ees who re&"ar"' perform their
d&ties awa' from the principa" p"ace of b&siness or branch of o@ce of the
emp"o'er and whose act&a" ho&rs of wor4 in the (e"d cannot be
determined with reasonab"e certaint'*
I""#) FON (shermen are considered (e"d personne"*
H)$0 No* )"tho&h (shermen perform non:aric&"t&ra" wor4 awa' from
their emp"o'erEs b&siness o@ces, the fact remains that thro&ho&t the
d&ration of their wor4 the' are &nder the e=ective contro" and s&pervision
of the emp"o'er thro&h the vesse"Es patron or master*
C)$)"1'%$, )1 %$. *" S+#1A)&! M'!0%!%+ EB/)&'3)!1%$ S1%1'+!, et
a"!*R* No* L:1+955, Posted (Labor Standards Agricultural Employees)
F%-1" >he 0inim&m Fae Law provides that in order than an emp"o'ee
or "aborer ma' be paid the minim&m wae of P+*55 a da', he m&st be
emp"o'ed b' an enterprise enaed in aric&"t&reI said enterprise sho&"d
operate a farm comprisin more than 1+ hectaresI and said emp"o'ee
or "aborer sho&"d be enaed in aric&"t&re*
Section + of the 0inim&m Fae Law 6R) K5+7 provides a de(nition of
aric&"t&re- )ric&"t&re inc"&des farmin in a"" its branches and amon
other thins inc"&de c&"tivation and ti""ae of the soi", dair'in, the
prod&ction, c&"tivation, rowin, and harvestin of an' aric&"t&ra" or
hortic&"t&ra" commodities, the raisin of "ivestoc4 or po&"tr', and an'
practices performed b' a farmer or on a farm as an incident to or in
con?&nction with s&ch farmin operations, b&t does not inc"&de the
man&fact&rin or processin of s&ar, cocon&ts, abaca, tobacco,
pineapp"es or other farm prod&cts*
Respondent e1perimenta" station, which operates a farm comprisin of
9K5 hectares, is an aenc' of the B&rea& of P"ant And&str' which are both
enaed in aric&"t&re or are dedicated in aric&"t&ra" f&nctions as
provided b' sections 1G5/ and 1G5C of the Revised )dministrative Code*
Petitioners, emp"o'ees of the e1perimenta" station a""eed that the' are
entit"ed to the minim&m wae of PC*55 a da', instead of P+*55, which was
act&a""' paid them b' the respondent e1perimenta" station* >he )&ditor
!enera" rendered a decision that the' are entit"ed to the "atter amo&nt*
I""#) FON emp"o'ees of an e1perimenta" station enaed in aric&"t&re
are aric&"t&ra" emp"o'ees*
H)$0 Oes* Fhere an e1perimenta" station operates a farm comprisin
9K5 hectares, and, thro&h its emp"o'ees and "aborers act&a""' ti""s the
soi", introd&ces and p"ants seeds of the best crop varieties fo&nd b' it
after st&d' and e1periment, raises said crops in the best approved
methods of c&"tivation, inc"&din the spacin of each p"ant or seed"in and
the amo&nt of water needed thro&h irriation, weedin, etc*, and the
other proper harvestin of the crops, inc"&din the timin and method,
discovers p"ant pests and their eradication b' means of treatment with
the proper insecticides, and thereafter e1tracts the seeds from the harvest
for sa"e and distrib&tion to farmers, there can be no <&estion that a"" these
acts and f&nctions fa"" within the de(nition of aric&"t&re provided in the
0inim&m Fae Law, and conse<&ent"', are aric&"t&ra"*
At fo""ows that the "aborers and farm wor4ers who act&a""' carr' o&t and
perform these f&nctions are a"so enaed in aric&"t&re*
Some emp"o'ees in the e1perimenta" station ma' be enaed in o@ce
wor4* An as m&ch as the' are a"" emp"o'ed b' the same, which is a farm
enterprise, and their wor4 is incidenta" to aric&"t&re, the' ma' a"so be
considered as aric&"t&ra" wor4ers and emp"o'ees*
M'$$%&)" *". N%1'+!%$ L%4+& R)$%1'+!" C+33'""'+!, 32, SCRA
,22 (1999)
(Labor Standards wages, customary facilities)
$acts- )rtic"e 9G, par* 6f7, of the Labor Code de(ned MwaeN as the
rem&neration or earnins, however desinated, capab"e of bein
e1pressed in terms of mone', whether (1ed or ascertained on a time,
tas4, piece, or commission basis, or other method of ca"c&"atin the same,
which is pa'ab"e b' an emp"o'er to an emp"o'ee &nder a written or
&nwritten contract of emp"o'ment for wor4 done or to be done, or for
services rendered or to be rendered and inc"&des the fair and reasonab"e
va"&e, as determined b' the Secretar' of Labor, of board, "odin, or other
faci"ities c&stomari"' f&rnished b' the emp"o'er to the emp"o'ee*
11K emp"o'ees of Paper And&stries Corporation of the Phi"ippines 6PACOP7
in Bis"i, S&riao de" S&r were terminated &nder a retrenchment proram
as a so"&tion to a ma?or (nancia" setbac4* )side from their one month
basic pa', petitioners be"ieve that the a""owances the' a""eed"' re&"ar"'
received on a month"' basis sho&"d have a"so been inc"&ded in the
comp&tation of their separation*
PACOP rants the fo""owin a""owances-
%ta&& a''o(ance)mana*ers a''o(ance to those who "ive in rented ho&ses near
the mi"" site which ceases whenever a vacanc' occ&rs in the compan'Es
free ho&sin faci"ities*
+rans,ortation a''o(ance in the form of advances for act&a" transportation
e1penses s&b?ect to "i<&idation is iven to 4e' o@cers and manaers who
&se their own vehic"es in the performance of their d&ties* >his privi"ee is
discontin&ed when the conditions no "oner obtain*
-is'i* a''o(ance is iven to manaers and o@cers on acco&nt of the hosti"e
environment prevai"in therein* Once the recipient is transferred
e"sewhere, the a""owance ceases*
)pp"'in )rt* 9G, par 6f7 of the Labor Code which de(nes MwaeN, the
H1ec&tive Labor )rbiter opined that the s&b?ect a""owances, bein
c&stomari"' f&rnished b' respondent PACOP and re&"ar"' received b'
petitioners, formed part of the "atterEs wae*
$owever, the NLRC decreed that the a""owances did not form part of the
sa"ar' base &sed in comp&tin separation pa' since the same were
continenc':based*
.ss/e- Fhether or not the a""owances in <&estion are considered faci"ities
c&stomari"' f&rnished*
0e'd- No* MC&stomar'N is fo&nded on "on estab"ished and constant
practice connotin re&"arit'* >he receipt of a""owance on a month"' basis
does not ipso facto characteri#e it as re&"ar and formin part of sa"ar'
beca&se the nat&re of the rant is a factor worth considerin*
>he s&b?ect a""owances were temporari"', not re&"ar"' received b'
petitioners beca&se once the conditions for the avai"ment ceased to e1ist,
the a""owance reached the c&to= point* >he petitionersE contin&o&s
en?o'ment of the disp&ted a""owances was based on continencies the
occ&rrence of which wrote (nis to s&ch en?o'ment*
ISAGANI ECAL, CRISOLOGO ECAL, NELSON BUENAOBRA, NARDING
BANDOGELIO, :ILMER ECHAGUE, ROGELIO CASTILLO, ALFREDO
FERNANDO, OLIGARIO BIGATA, ROBERTO FERRER AND HONESTO
TANAEL, R)/&)")!1)0 4. ISAGANI ECAL, /)1'1'+!)&",
*".
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION),
JIMM? MATCHU;A AND HI>LINE TIMBER, INC., respondents*
!)NC)OCO, -%.p
As there an emp"o'er:emp"o'ee re"ationship between petitioners and
private respondent $i:Line >imber, Anc* or mere"' an emp"o'er:
independent contractor re"ationship between said private respondent and
petitioner Asaani Hca" with the other petitioners bein mere contract
wor4ers of Hca"U An the case of the "atter, is Hca" enaed in 2?ob2
contractin or 2"abor:on"'2 contractinU Fhat then is the e1tent of the
"iabi"it' of private respondentU >hese are the <&estions raised in this
petition*
>his case traces its oriin from two conso"idated comp"aints for i""ea"
dismissa" and mone' c"aims ("ed b' petitioners Asaani Hca", Criso"oo
Hca", Ne"son B&enaobra, Nardin Bandoe"io, Fi"mer Hcha&e, Roe"io
Casti""o, )"fredo ;ernando, O"iario Biata, Roberto ;errer and $onesto
>anae" aainst private respondents $i:Line >imber, Anc* 6hereinafter
referred to as $i:Line7 and %imm' 0atch&4a, the compan' foreman, with
the 9epartment of Labor and Hmp"o'ment doc4eted as NLRC case No*
R)B:5/:59:515G:8G and No* R)B AAA:59:511K:8G*
An their comp"aints3position papers, petitioners a""eed, amon others,
that the' have been emp"o'ed b' $i:Line as fo""ows- Asaani Hca", from
;ebr&ar', 198KI Criso"oo Hca", B&enaobra, Bandoe"io, ;ernando, Biata,
;errer and >anae", from 0arch /, 198KI and Casti""o and Hcha&e, from
0a' 1, 198KI that e1cept for Asaani Hca", the' were a"" receivin a sa"ar'
of P /5*55 a da'I that the' were re<&ired to report for wor4 G da's a wee4
inc"&din rest da's, "ea" ho"ida's, e1cept Christmas and !ood ;rida' from
G-55 )*0* to G-55 P*0*I that the' were not iven "ivin a""owance, overtime
pa', premi&m pa' for rest da's and "ea" ho"ida's, 1/th month pa' and
service incentive "eave pa'I and, that on %&ne K, 198G, the' were not
a""owed to wor4 and instead were informed that their services were no
"oner needed*
Private respondents, on the other hand, denied the e1istence of an
emp"o'er:emp"o'ee re"ationship between the compan' and the petitioners
c"aimin that the "atter are &nder the emp"o' of an independent
contractor, petitioner Asaani Hca", an emp"o'ee of the compan' &nti" his
resination on ;ebr&ar' C, 198G*
)fter s&bmission of the s&pp"ementa" position papers and other evidence
b' the parties, the "abor arbiter rendered his decision dated %&ne 15, 1988
(ndin no emp"o'er:emp"o'ee re"ationship between the parties* >h&s, he
dismissed the two cases for "ac4 of merit*
1
On appea", p&b"ic respondent Nationa" Labor Re"ations Commission 6NLRC7
a@rmed the aforesaid decision of the "abor arbiter in a reso"&tion dated
October +, 1989*
+
>he motion for reconsideration of petitioners was denied in a reso"&tion
dated 0arch 1+, 1995*
/
An this petition for certiorari, petitioners primari"' <&estion the (ndin of
the p&b"ic respondent NLRC that no emp"o'er:emp"o'ee re"ationship
e1isted between them and $i:Line >imber, Anc* >he' contend that
petitioner Asaani Hca" is not an independent contractor b&t a mere
emp"o'ee of $i:Line Line*
An response, the So"icitor !enera" points o&t that the iss&e of whether or
not an emp"o'er:emp"o'ee re"ationship e1ists between the parties is a
<&estion of fact and the (ndins of the "abor arbiter and the NLRC on this
iss&e are conc"&sive &pon this Co&rt if the' are s&pported b' s&bstantia"
evidence
C
as in this case*
>he NLRC r&"ed [
Fe have caref&""' e1amined and eva"&ated the basis of the decision of the
Labor )rbiter and to O&r mind his fact&a" (ndins are indeed s&pported b'
s&bstantia" evidence* >h&s, we cite a few of the c"ear and convincin
evidence and record which compe""ed the Labor )rbiter to disreard the
c"aim of the comp"ainants that there was 6an7 emp"o'er:emp"o'ee
re"ationship between the contendin parties* ;irst"', the a@davit of
respondents, personne" o@cer, H"i#abeth Natividad, dated ++ )pri" 1988,
c"ear"' attestin to the fact that comp"ainants, e1cept Asaani Hca", who
wor4ed at their p"ant at Boca&e, B&"acan, from +C )pri" 198K &p to C
;ebr&ar' 198G and who tendered his resination on the "atter date, were
not at a"" emp"o'ees of respondentsI second"', the pa'ro""s of the
respondents do not indicate that said comp"ainants were emp"o'ees of the
respondentsI third"', the Sin&mpaan Sa"a'sa' of %ose 0endo#a, the
Secretar':>reas&rer of the $i:Line For4ers .nion:Confederation of ;ree
Laborers 6C;L7, a reistered "abor .nion &nder Re* Cert* No* 6;H9:C+57:
KG5K:11, iss&ed 0arch, 198G, to the e=ect that none of the comp"ainants,
e1cept Asaani Hca", were "isted as members of the &nion and3or
emp"o'ees of respondentsI and "ast"', two 6+7 Sin&mpaan Sa"a'sa' dated
++ )pri" 1988 e1ec&ted b' respondents, compan' &ard $onorio >*
Batt&n and ;oreman C"emente S* Sa"es, respective"', attestin that it
was on"' Asaani Hca" who wor4ed with respondents b&t resined on C
;ebr&ar' 198G to wor4 as 6an7 independent contractor*
5
Petitioners c"aim that the NLRC based its decision so"e"' on the evidence
aforestated and comp"ete"' inored the evidence the' presented th&s
den'in them d&e process* >he Co&rt caref&""' e1amined the records of
the case and (nds that the NLRC "imited itse"f to a s&per(cia" eva"&ation of
the re"ationship of the parties based main"' on the aforestated doc&ments
with emphasis on the compan' pa'ro""s witho&t reard to the partic&"ar
circ&mstances of the case*
>he (ndin of the NLRC that Asaani Hca" is no "oner an emp"o'ee of $i:
Line "ine is amp"' s&pported b' the evidence on record* $is resination
"etter dated ;ebr&ar' C, 198G statin 2a4o po a' mareresin na sa a4in
trabaho bi"an 2"aborer2 sapa4a,t na4ita 4o na mas ma"a4i an 4i4itain
4&n manonontrata na "aman 2
K
spea4s for itse"f* >his was
&ns&ccessf&""' reb&tted b' petitioners*
>o determine whether there e1ists an emp"o'er:emp"o'ee re"ationship, the
fo&r:wa' test sho&"d be app"ied, name"'- 617 se"ection and enaement of
the emp"o'eeI 6+7 the pa'ment of waesI 6/7 the power of dismissa"I and
6C7 the power to contro" the emp"o'ee,s cond&ct[the "ast bein the most
important e"ement*
G
Neither the NLRC nor the "abor arbiter &ti"i#ed these
&ides in their disposition of the comp"aint*
>he records show that $i:Line does not choose the wor4ers b&t mere"'
accepts whoever ma' be se"ected b' petitioner Asaani Hca"* Petitioners
are not inc"&ded in the pa'ro""* Anstead a "&mp s&m of P1,C55*55 is iven
to Asaani Hca" or his representative So"omon de "os Santos, ever' fo&r
da's, to cover their waes for the period which the petitioners divide
amon themse"ves*
Private respondents a""ee that Asaani Hca" c&stomari"' removes some of
his "aborers at the $i:Line sawmi"" and assins them to other sawmi""sI
however, there was no evidence add&ced to show that indeed Hca"
re&"ar"' or even once transferred some of his wor4ers to other sawmi""s*
Petitioners wor4ed at the compan' compo&nd at Fa4as, Boca&e, B&"acan,
at "east eiht ho&rs a da', for seven da's a wee4 so that it wo&"d be
impossib"e for them to (nd time to wor4 in some other sawmi""* On %&ne K,
198G, the compan' &ni"atera""' terminated the services of petitioners
witho&t notice a""eed"' on the ro&nd that its contract with Asaani Hca"
has a"read' e1pired*
)s to the matter of contro", it wo&"d seem that petitioners were most"' "eft
on their own to devise the most e1peditio&s wa' of sereatin "&mber
materia"s as to si#es and of "oadin and &n"oadin the same in the
chamber for dr'in* $owever, their tas4 is performed within the wor4
premises of $i:Line, speci(ca""' at its Pi"n 9r'in Section, so it cannot be
said that no amo&nt of contro" and s&pervision is e1erted &pon them b'
the compan' thro&h their foremen, private respondent 0atch&4a and
C"emente S* Sa"es* 0oreover, the ver' nat&re of the tas4 performed b'
petitioners re<&ires ver' "imited s&pervision as there are on"' so man'
wa's of sereatin "&mber accordin to their si#es and of "oadin and
&n"oadin them in the dr'er so that a"" that the compan' has to do is to
chec4 on the res&"ts of their wor4*
>he foreoin observation s&ests that there is a certain re"ationship
e1istin between the parties a"tho&h a c"ear:c&t characteri#ation of s&ch
re"ationship [ whether it is an emp"o'er:emp"o'ee re"ationship or an
emp"o'er:independent contractor re"ationship [ is &navai"in* $ence, a
c"oser scr&tin' of said re"ationship is in order*
Petitioners &re that even ass&min arguendo that Asaani Hca" is an
independent contractor, he sho&"d be considered on"' a "abor s&pp"ier
who is deemed an aent of the compan' so that petitioners sho&"d en?o'
the stat&s of bein its emp"o'eesI therefore, $i:Line sho&"d be he"d "iab"e
for i""ea""' dismissin petitioners and for the non:pa'ment of bene(ts d&e
them* Private respondents, however, maintain that Asaani Hca" is an
independent contractor or a ?ob contractor*
>he So"icitor !enera" adopts the theor' that Hca" is an independent
contractor* $owever, he fa&"ts the "abor arbiter for his fai"&re to determine
the bene(ts d&e petitioners, an iss&e raised b' the "atter, on the ro&nd
that $i:Line, bein an indirect emp"o'er, is ?oint"' and severa""' "iab"e with
Asaani Hca" to the e1tent of the wor4 performed b' the emp"o'ees as if
the' were direct"' emp"o'ed b' it* $e, therefore, see4s the remand of the
case to the "abor arbiter for determination of the &npaid bene(ts of
petitioners*
>he pertinent provisions of the Labor Code, as amended, are-
)rt* 15K* /ontractor or subcontractor* [ Fhenever an emp"o'er enters
into a contract with another person for the performance of the former,s
wor4, the emp"o'ees of the contractor and of the "atter,s s&bcontractor, if
an', sha"" be paid in accordance with the provisions of this Code*
An the event that the contractor or s&bcontractor fai"s to pa' the waes of
his emp"o'ees in accordance with this Code, the emp"o'er sha"" be ?oint"'
and severa""' "iab"e with his contractor or s&bcontractor to s&ch
emp"o'ees to the e1tent of the wor4 performed &nder the contract, in the
same manner and e1tent that he is "iab"e to emp"o'ees direct"' emp"o'ed
b' him*
>he Secretar' of Labor ma', b' appropriate re&"ations, restrict or prohibit
the contractin o&t of "abor to protect the rihts of wor4ers estab"ished
&nder this Code* An so prohibitin or restrictin, he ma' ma4e appropriate
distinctions between "abor:on"' contractin and ?ob contractin as we"" as
di=erentiations within these t'pes of contractin and determine who
amon the parties invo"ved sha"" be considered the emp"o'er for p&rposes
of this Code, to prevent an' vio"ation or circ&mvention of an' provision of
this Code*
>here is 2"abor:on"'2 contractin where the person s&pp"'in wor4ers to an
emp"o'er does not have s&bstantia" capita" or investment in the form of
too"s, e<&ipment, machineries, wor4 premises, amon others, and the
wor4ers recr&ited and p"aced b' s&ch person are performin activities
which are direct"' re"ated to the principa" b&siness of s&ch emp"o'er* An
s&ch cases, the person or intermediar' sha"" be considered mere"' as an
aent of the emp"o'er who sha"" be responsib"e to the wor4ers in the same
manner and e1tent as if the "atter were direct"' emp"o'ed*
)rt* 15G* Indirect Employer* [ >he provisions of the immediate"'
precedin )rtic"e sha"" "i4ewise app"' to an' person, partnership,
association or corporation which, not bein an emp"o'er, contracts with an
independent contractor for the performance of an' wor4, tas4, ?ob or
pro?ect*
.nder the provisions of )rtic"e 15K, pararaphs 1 and +, an emp"o'er who
enters into a contract with a contractor for the performance of wor4 for
the emp"o'er does not thereb' estab"ish an emp"o'er:emp"o'ee
re"ationship between himse"f and the emp"o'ees of the contractor* >he "aw
itse"f, however, creates s&ch a re"ationship when a contractor fai"s to pa'
the waes of his emp"o'ees in accordance with the Labor Code, and on"'
for this "imited p&rpose, i*e* to ens&re that the "atter wi"" be paid the
waes d&e them*
8
On the other hand, the "ea" e=ect of a (ndin that a contractor is mere"'
a 2"abor on"'2 contractor was e1p"ained in 0hilippine "an of
/ommunications $s* 1ational Labor !elations /ommission, et al*,
9
[
* * * >he 2"abor:on"'2 contractor [ i*e*, 2the person or intermediar'2 [ is
considered 2mere"' as an aent of the emp"o'er*2 >he emp"o'er is made
b' the stat&te responsib"e to the emp"o'ees of the 2"abor on"'2 contractor
as if s&ch emp"o'ee had been direct"' emp"o'ed b' the emp"o'er* >h&s,
where 2"abor:on"'2 contractin e1ists in a iven case, the stat&te itse"f
imp"ies or estab"ishes an emp"o'er:emp"o'ee re"ationship between the
emp"o'er 6the owner of the pro?ect7 and the emp"o'ees of the 2"abor:on"'2
contractor, this time for a comprehensive p&rpose- 2emp"o'er for
p&rposes of this Code, to prevent an' vio"ation or circ&mvention of an'
provision of this Code*2 >he "aw in e=ect ho"ds both the emp"o'er and the
,"abor:on"', contractor responsib"e to the "atter,s emp"o'ees for the more
e=ective safe&ardin of the emp"o'ees, rihts &nder the Labor Code*
Sections 8 and 9, R&"e LAAA, Boo4 AAA of the Omnib&s R&"es imp"ementin the
Labor Code set forth the distinctions between 2?ob2 contractin and 2"abor:
on"'2 contractin [
Sec* 8* -ob contracting* [ >here is ?ob contractin permissib"e &nder the
Code if the fo""owin conditions are met-
617 >he contractor carries on an independent b&siness and &nderta4es the
contract wor4 on his own acco&nt &nder his own responsibi"it' accordin
to his own manner and method, free from contro" and direction of his
emp"o'er or principa" in a"" matters connected with the performance of the
wor4 e1cept as to the res&"ts thereof, and
6+7 >he contractor has s&bstantia" capita" or investment in the form of
too"s, e<&ipments, machineries, wor4 premises, and other materia"s which
are necessar' in the cond&ct of his b&siness*
Sec* 9* Labor-only contracting [ 6a7 )n' person who &nderta4es to s&pp"'
wor4ers to an emp"o'er sha"" be deemed to be enaed in "abor:on"'
contractin where s&ch person-
617 9oes not have s&bstantia" capita" or investment in the form of too"s,
e<&ipments, machineries, wor4 premises and other materia"sI and
6+7 >he wor4ers recr&ited and p"aced b' s&ch person are performin
activities which are direct"' re"ated to the principa" b&siness or operations
of the emp"o'er in which wor4ers are habit&a""' emp"o'ed*
6b7 Labor:on"' contractin as de(ned herein is hereb' prohibited and the
person actin as contractor sha"" be considered mere"' as an aent or
intermediar' of the emp"o'er who sha"" be responsib"e to the wor4ers in
the same manner and e1tent as if the "atter were direct"' emp"o'ed b'
him*
111 111 111
)pp"'in the foreoin provisions, the Co&rt (nds petitioner Asaani Hca"
to be a 2"abor:on"'2 contractor, a mere s&pp"ier of manpower to $i:Line*
Asaani Hca" was on"' poor "aborer at the time of his resination on
;ebr&ar' C, 198G who cannot even a=ord to have his da&hter treated for
ma"n&trition* $e resined and became a s&pp"ier of "aborers for $i:Line,
beca&se he saw an opport&nit' for him to earn more than what he was
earnin whi"e sti"" in the pa'ro"" of the compan'* )t the same time, he
contin&ed wor4in for the compan' as a "aborer at the 4i"n dr'in section*
$e de(nite"' does not have s&@cient capita" to invest in too"s and
machineries* Private respondents, however, c"aim that the b&siness
contracted b' Hca" did not re<&ire the &se of too"s, e<&ipment and
machineries and the contracted tas4 had to be e1ec&ted in the premises
of $i:Line* Precise"', the ?ob assined to petitioners has to be e1ec&ted
within the wor4 premises of $i:Line where the' &se the machineries and
e<&ipment of the compan' for the dr'in of "&mber materia"s* Hven the
compan',s personne" o@cer H"i#abeth Natividad admitted that Hca"
resined in order to s&pp"' manpower to the compan' on a tas4
basis*
15
B' the ver' a""eations of private respondents, it is <&ite c"ear
that Asaani Hca" on"' s&pp"ies manpower to $i:Line within the conte1t of
2"abor:on"'2 contractin as de(ned b' "aw*
>here is a"so no <&estion that the tas4 performed b' petitioners is direct"'
re"ated to the b&siness of $i:Line* Petitioners were assined to sort o&t the
"&mber materia"s whether wet or fresh 4i"n as to si#es and to carr' them
from the stoc4pi"e to the dr'er where the' are "oaded for dr'in after
which the' are &n"oaded* >he wor4 of petitioners is an intera" part of the
operation of the sawmi"" of $i:Line witho&t which prod&ction and compan'
sa"es wi"" s&=er*
) (ndin that Asaani Hca" is a 2"abor:on"'2 contractor is e<&iva"ent to a
(ndin that an emp"o'er:emp"o'ee re"ationship e1ists between the
compan' and Hca" inc"&din the "atter,s 2contract wor4ers2 herein
petitioners, the re"ationship bein s&ch as provided b' the "aw itse"f*
11
Andeed, the "aw prohibits 2"abor:on"'2 contractin and creates an
emp"o'er: emp"o'ee re"ationship for the protection of the "aborers* >he
Co&rt had in fact observed that b&sinessmen, with the aid of "aw'ers,
have tried to avoid the brinin abo&t of an emp"o'er:emp"o'ee
re"ationship in some of their enterprises beca&se that ?&ridica" re"ation
spawns ob"iations connected with wor4men,s compensation, socia"
sec&rit', medicare, minim&m wae, termination pa' and &nionism*
1+
>his &nscr&p&"o&s practice is <&ite evident in the case at bar* At is
compan' po"ic' that once an emp"o'ee is assined to the 4i"n dr'in
section, he is no "oner inc"&ded in the pa'ro"" and is then paid on a tas4
basis, even if he had "on been emp"o'ed with the compan'* Since the
emp"o'ee wi"" no "oner be inc"&ded in the pa'ro"", it becomes eas' for the
compan' to den' the re&"ar emp"o'ment of s&ch a wor4er and is ab"e to
avoid whatever ob"iations it ma' have &nder an emp"o'er:emp"o'ee
re"ationship* 0oreover, $i:Line "imits the period of &nderta4in to on"' fo&r
da's pres&mab"' to ma4e termination of the services of petitioners easier
and to prevent them from attainin re&"ar stat&s* >he compan' had no
do&bt ta4en advantae of these "aborers in order to escape "iabi"it' for
bene(ts and privi"ees accr&in to one ho"din a re&"ar emp"o'ment*
Fitho&t a "aw prohibitin 2"abor:on"'2 contractin to protect the rihts of
"abor, these poor wor4ers wi"" a"wa's be at the merc' of the emp"o'er*
Since petitioners perform tas4s which are &s&a""' necessar' or desirab"e in
the main b&siness of $i:Line, the' sho&"d be deemed re&"ar emp"o'ees
of the "atter
1/
and as s&ch are entit"ed to a"" the bene(ts and rihts
app&rtenant to re&"ar emp"o'ment*
Bein re&"ar emp"o'ees, the' sho&"d have been a=orded d&e process
prior to their dismissa"*
1C
Anstead the' were &nceremonio&s"' dismissed
on %&ne K, 198G when the' were not a""owed to enter the compan',s
premises b' the sec&rit' &ards* >he ar&ment of private respondents
that the contract of Hca" with the compan' e1pired cannot be s&stained*
Petitioners ma' on"' be dismissed for an a&thori#ed or ?&st ca&se and
after d&e process*
)t this ?&nct&re, Fe note that petitioners and private respondents a""ee
conXictin dates of emp"o'ment of the former* Petitioners c"aim that as
ear"' as 0arch or 0a', 198K, the' have a"read' been wor4in with $i:Line
Line, whi"e private respondents contend that it was on"' in )pri", 198G that
the' had been enaed b' the compan'* >his Co&rt is not a trier of facts
and there is not eno&h basis in the records to enab"e .s to come &p with
de(nite dates of emp"o'ment* $owever, whatever be the date of their
emp"o'ment, petitioners wi"" sti"" be considered emp"o'ees of the
compan'* Af petitioners had started their emp"o'ment in 198K, the' wo&"d
have rendered more than 1 'ear of service at the time of their dismissa"
and, therefore, sho&"d be considered re&"ar emp"o'ees* Hven if the' have
been enaed on"' in )pri" of 198G, the' wi"" sti"" be deemed re&"ar
emp"o'ees for as ear"ier indicated, Asaani Hca" is a 2"abor:on"'2 contractor
and petitioners perform activities direct"' re"ated to the principa" b&siness
of $i:Line Line*
Petitioners, havin been i""ea""' dismissed on %&ne K, 198G, are entit"ed to
bac4waes e<&iva"ent to three 'ears witho&t <&a"i(cations and ded&ctions
in "ine with prevai"in ?&rispr&dence*
F$HRH;ORH, the decision of p&b"ic respondent NLRC is hereb' RHLHRSH9
and SH> )SA9H* Private respondent $i:Line >imber, Anc* is hereb' ordered
to reinstate petitioners to their former positions with bac4waes
e<&iva"ent to three 6/7 'ears witho&t ded&ctions and <&a"i(cations* >he
records of the case are remanded to the "abor arbiter for determination of
the &npaid bene(ts d&e petitioners* No costs*
CORPORAL VS NLRC
>he barbershop c"aims it had no contro" over its barbers* >he power to
contro" refers to the
e1istence of the power and not necessari"' to the act&a" e1ercise thereof,
nor is it essentia" for the
emp"o'er to act&a""' s&pervise the performance of d&ties of the
emp"o'ee* At is eno&h that the
emp"o'er has the riht to e1ercise the power* )s to the Mcontro" test,N the
fo""owin facts ind&bitab"'
revea" that the respondent compan' wie"ded contro" over the wor4
performance of petitionersI in that
617 the' wor4ed in the barber shop owned and operated b' the
respondentsI 6+7 that the' were re<&ired
to report dai"' and observe de(nite ho&rs of wor4I 6/7 the' were not free
to accept other emp"o'ment
e"sewhere b&t devoted their f&"" time wor4in at the New Loo4s Barber
Shop for a"" the (fteen 6157 'ears
the' have wor4ed &nti" )pri" 15, 1995I 6C7 that some have wor4er with
respondentEs since the ear"'
19K5EsI 657 that petitioner Patricia Nas was instr&cted b' the respondents
to watch the other si1 6K7
petitioners in their dai"' tas4* Certain"', respondent compan' was c"othed
with the power to dismiss an'
or a"" of them for ?&st and va"d ca&se* Petitioners were &nar&ab"'
performin wor4 necessar' and
desiriab"e in the b&siness of respondent compan'*
CECILIO P. DE LOS SANTOS %!0 BU;LOD MANGGAGA:A NG
CAMARA (BUMACA), petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION
BHLLOSALLO, -*-
>his is a petition for certiorari &nder R&"e K5 assai"in the 9ecision of
p&b"ic respondent Nationa" Labor Re"ations Commission 6NLRC7 which
remanded this case to the Labor )rbiter who r&"ed that petitioner Ceci"io P*
de "os Santos was i""ea""' dismissed b' private respondent Camara Stee",
Anc*, and as a conse<&ence, ordered his immediate
reinstatement* Speci(ca""', the dispositive portion of the Labor )rbiter,s
9ecision prom&"ated +/ 0a' 1999 states :
F$HRH;ORH, presimes considered, respondent Camara Stee" And&stries,
Anc* is hereb' ordered to reinstate comp"ainant Ceci"io de "os Santos to his
former position within ten 6157 da's from receipt of this Reso"&tion witho&t
"oss of seniorit' rihts and other bene(ts with f&"" bac4 waes from date of
dismissa" &p to act&a" date of reinstatement which is hereb' comp&ted as
of even date as fo""ows-
;rom 83+/39/ : 1+31539/ W /*G/ mos*
P118 1 +K da's 1 /*G/ mos* W P11,CC/*KC
1+31K39/ : /3+939C W /*C/ mos*
P1/5 1 +K da's 1 /*C/ mos* W 1+,5/9*/5
>ota" Bac4waes as of /3+939C P+/,C8+*9C
Respondent Camara Stee" And&stries, Anc* is a"so ordered to pa'
comp"ainant 15J for and as attorne',s fees*
)"" other c"aims are hereb' dismissed for "ac4 of merit*
On / 0a' 1991 petitioner 9e "os Santos started wor4in at Camara Stee"
And&stries Anc* 6C)0)R) S>HHL7, a compan' enaed in the man&fact&re
of stee" prod&cts s&ch as LP! c'"inders and dr&ms* $e was (rst assined
at the LP! assemb"' "ine, then "ater, as operator of a b"astin
machine* Fhi"e performin his tas4 as s&ch operator, he met an accident
that forced him to o on "eave for one and a ha"f 61:13+7 months* .pon his
ret&rn, he was desinated as a ?anitor assined to c"ean the premises of
the compan', and occasiona""', to transfer scrap and arbae from one
site to another*
Q1R
On 11 0a' 199/ petitioner was doin his &s&a" chores as a ?anitor of
C)0)R) S>HHL when he momentari"' "eft his p&shcart to answer the ca""
of Narciso $onrado, scrap in:chare, who s&mmoned him to the compan'
c"inic* >here $onrado handed him a bo1 which he p"aced on top of a dr&m
in his p&shcart for transfer to the other "ot of the compan' near ate
+* On his wa' o&t of ate +, however, the sec&rit' &ard on d&t' fo&nd in
the bo1 handed to him b' $onrado two 6+7 pieces of e"ectric cab"e
meas&rin +*+K inches each and another piece of 1*GK meters with a tota"
estimated va"&e of P55*55 toP155*55* )pprehensive that he miht be
chared with theft, petitioner 9e "os Santos e1p"ained that the e"ectric
cord was dec"ared a scrap b' $onrado whose instr&ctions he was on"'
fo""owin to transfer the same to the ad?acent "ot of the compan' as scrap*
Narciso $onrado admitted responsibi"it' for the ha&" and his error in
dec"arin the e"ectric cab"es as scrap* >he enera" manaer, apparent"'
appeased b' $onradoEs apo"o', iss&ed a memorand&m ac4now"edin
receipt of his "etter of apo"o' and e1c&"pated him of an' wrondoin*
>a4in an &ne1pected $olte face, however, the compan' thro&h its
co&nse" ("ed on 9 %&"' 199/ a crimina" comp"aint for fr&strated <&a"i(ed
theft aainst $onrado and herein petitioner 9e "os Santos* >he comp"aint
however was s&bse<&ent"' dismissed b' the Provincia" Prosec&tor of Pasi
for "ac4 of evidence*
Q+R
On +/ )&&st 199/, &pon re<&est of >op:;"ite, a""eed manpower aenc'
of 9e "os Santos, C)0)R) S>HHL terminated his services*
)rieved b' his i""ea" termination, 9e "os Santos so&ht reco&rse with
the Labor )rbiter who on +9 0arch 199C rendered a decision orderin
respondent C)0)R) S>HHL to reinstate 9e"os Santos to his former position
within ten 6157 da's witho&t "oss of seniorit' rihts and other bene(ts with
f&"" bac4 waes from date of dismissa" &p to act&a" reinstatement as
herein before stated*
C)0)R) S>HHL went to the NLRC for reco&rse* >op:;"ite ("ed a &otion for
Inter$ention pra'in that it be permitted to intervene in the appea" as co:
respondent and, accordin"', be a""owed to s&bmit its own memorand&m
and other p"eadins*
Q/R
On +/ 0a' 1995 the NLRC reversed the Labor )rbiter and ordered the
ret&rn of the entire records of the case to the arbitration branch of oriin
for f&rther proceedins* An its 9ecision, NLRC speci(ed the reasons for the
remand to the Labor )rbiter :
QCR
(irst, as respondents have broad"' imp"ied, havin a""eed that he was an
emp"o'ee of Camara Stee", it was comp"ainantEs b&rden to prove this
a""eation as a fact, not mere"' thro&h his &ncorroborated statements
b&t thro&h independent evidence* )s noted b' respondents, he has not
s&bmitted one piece of evidence to s&pport his premise on this matter
e1cept for his sworn statement*
Secondly, the )rbiter maintained that the contract of services s&bmitted
b' respondents was ins&@cient to prove that comp"ainant was an
emp"o'ee of >op:;"ite, b&t he has obvio&s"' omitted consideration of
)nne1es ;, !, $ and A which are time sheets of the comp"ainant with >op:
;"ite and the correspondin time cards which he p&nches in for Camara
Stee"*
>he NLRC f&rther noted that &nder the circ&mstances it became
appropriate to cond&ct a forma" hearin on the partic&"ar iss&e of whether
an emp"o'er:emp"o'ee re"ationship e1isted between the parties, which
iss&e was determinative of the nat&re of petitioner,s dismissa" b' C)0)R)
S>HHL* >hat bein so, accordin to the NLRC, it was necessar' for the
Labor )rbiter to iss&e the appropriate directive to s&mmon >op:;"ite as a
necessar' part' to the case, for the manpower aenc' to s&bmit its own
evidence on the act&a" stat&s of petitioner*
)s pointed o&t b' petitioner, the errors in the disp&ted decision b' the
NLRC are- 6a7 NLRC vio"ated d&e process of "aw when it did not consider
the evidence on recordI 6b7 C)0)R) S>HHL, and not >op:;"ite, is the rea"
emp"o'er of petitionerI 6c7 Contrar' to the (ndin of NLRC, >op:;"ite was
made a part' respondent in the i""ea" dismissa" case doc4eted as NLRC:
NCR No* 55:58:55/5+:9/ and the NLRC was therefore in error in
remandin the case to the Labor )rbiter for f&rther proceedins*
Petitioner 9e "os Santos contends that NLRC was in rave error when it
r&"ed that, with the e1ception of a bare assertion on his sworn statement,
he 2has not s&bmitted one piece of evidence to s&pport his
premise2
Q5R
that he was in fact an emp"o'ee of C)0)R) S>HHL*
>o &nderscore NLRC,s oversiht, petitioner brins to o&r attention and
speci(es the pieces of evidence which he presented before the Labor
)rbiter on 19 November 199/ : a"so appended as )nne1es to petitioner,s
22ra$erse to /amara3s 0osition 0aper and !eply-2 6a7 )nne1 MHN to MH:1N :
)pprova" sinat&re of CamaraEs 9epartment head, Re'na"do Narisma,
witho&t which petitioner cannot render overtimeI 6b7 )nne1 M;N :
PetitionerEs dai"' time record for 83/39+ to 83939+I 6c7 )nne1 M;:1N :
Sinat&re of private respondent 0ercedita Pastrana, approvin in her
capacit' as )ssistant 0anaer of Camara Stee"I 6d7 )nne1 M;:+N :
Sinat&re of private respondent 9ennis )"bano, Personne" 0anaer of
Camara Stee" And&stries Anc* a"so co:sinin for approva"I 6e7 )nne1 M;:/N :
Sinat&re of Narisma, as 9epartment $ead of Camara Stee" And&stries Anc*
where petitioner is wor4inI 6f7 )nne1 M!N : 9ai"' >ime Record of petitioner
for G3K39+ to G31+39+I 67 )nne1 M!:1N : Sinat&re of Camara Stee"
)ssistant 0anaerI 6h7 )nne1 M!:+N : Sinat&re of CamaraEs Personne"
0anaer, 9ennis )"bano, approvinI 6i7 )nne1 M!:/N : Sinat&re of
CamaraEs 9epartment $ead where petitioner is wor4in, 0r* Narisma,
approvinI 6?7 )nne1 M$N to M$:1N : PetitionerEs 9ai"' >ime Card
6representative samp"es7 with name and "oo of Camara Stee" And&stries
Anc*I and, 647 )nne1 M%N : )@davit of Comp"ainant*
)"" these pieces of evidence which, accordin to petitioner 9e "os Santos,
were not proper"' considered b' NLRC, p"ain"' and c"ear"' show that the
power of contro" and s&pervision over him was e1ercised so"e"' and
e1c"&sive"' b' the manaers and s&pervisors of C)0)R) S>HHL* Hven the
power to dismiss was a"so "oded with C)0)R) S>HHL when it admitted in
pae / of its Rep"' that &pon re<&est b' >op:;"ite, the stee" compan'
terminated his emp"o'ment after bein a""eed"' ca&ht committin theft*
Petitioner 9e "os Santos a"so advances the view that >op:;"ite, far from
bein his emp"o'er, was in fact a 2"abor:on"'2 contractor as borne o&t b' a
contract whereb' >op:;"ite &ndertoo4 to s&pp"' C)0)R) S>HHL wor4ers
with 2warm bodies2 for its factor' needs and edi(ces* $e insists that s&ch
contract was not a ?ob contract b&t the s&pp"' of "abor on"'* )"" thins
considered, he is of the (rm be"ief that for a"" "ea" intents and p&rposes,
he was an emp"o'ee : a re&"ar one at that : of C)0)R) S>HHL*
An its comment, private respondent C)0)R) S>HHL avers that far from
bein its emp"o'ee, 9e "os Santos was mere"' a pro?ect emp"o'ee of >op:
;"ite who was assined as ?anitor in private respondent compan'* >his
m&ch was ac4now"eded b' >op:;"ite in its &otion for Inter$ention ("ed
before the NLRC*
QKR
S&ch a""eation, accordin to private respondent
C)0)R) S>HHL, s&pports a"" a"on its theor' that 9e "os Santos,
assinment to the "atter as ?anitor was based on an independent contract
e1ec&ted between >op:;"ite and C)0)R) S>HHL*
QGR
Respondent C)0)R) S>HHL f&rther ar&es that cr'sta" c"ear in the &otion
for Inter$ention of >op:;"ite is its a""eation that it was in fact petitioner,s
rea" emp"o'er as his sa"aries and bene(ts d&rin the contract&a" period
were paid b' >op:;"iteI not on"' that, 9e "os Santos was dismissed b'
C)0)R) S>HHL &pon the recommendation of >op:;"ite* >hese ine"&ctab"'
show that >op:;"ite was not on"' a ?ob contractor b&t was in tr&th and in
fact the emp"o'er of petitioner*
An his petition, 9e "os Santos vioro&s"' insists that he was the emp"o'ee
of respondent C)0)R) S>HHL which in t&rn was not on"' den'in the
a""eation b&t was (ner:pointin >op:;"ite as petitioner,s rea"
emp"o'er* 9e "os Santos aain ob?ects to this assertion and c"aims that
>op:;"ite, far from bein an emp"o'er, was mere"' a 2"abor:on"'2
contractor*
An the ma#e and X&rr' of c"aims and co&nterc"aims, severa" contentio&s
iss&es contin&e to stic4 o&t "i4e a sore th&mb* Fas 9e "os Santos i""ea""'
dismissedU Af so, b' whomU Fas his emp"o'er respondent C)0)R)
S>HHL, in whose premises he was a""eed"' ca&ht stea"in, or was it >op:
;"ite, the manpower services which a""eed"' hired himU
Ane1tricab"' intertwined in the reso"&tion of these iss&es is the
determination of whether there e1isted an emp"o'er:emp"o'ee
re"ationship between C)0)R) S>HHL and respondent 9e Los Santos, and
whether >op:;"ite was an 2independent contractor2 or a 2"abor:on"'2
contractor* ) (ndin that >op:;"ite was a 2"abor:on"'2 contractor red&ces it
to a mere aent of C)0)R) S>HHL which b' stat&te wo&"d be responsib"e
to the emp"o'ees of the 2"abor:on"'2 contractor as if s&ch emp"o'ees had
been direct"' emp"o'ed b' the emp"o'er*
Htched in an &nendin stream of cases are the fo&r 6C7 standards in
determinin the e1istence of an emp"o'er:emp"o'ee re"ationship,
name"'- 6a7 the manner of se"ection and enaement of the p&tative
emp"o'eeI 6b7 the mode of pa'ment of waesI 6c7 the presence or
absence of power of dismisssa"I and, 6d7 the presence or absence of
contro" of the p&tative emp"o'ee,s cond&ct* 0ost determinative amon
these factors is the so:ca""ed 2contro" test*2
)s shown b' the evidence on record, 9e "os Santos was hired b' C)0)R)
S>HHL after &nderoin an interview with one Car"os S&i#o, its time4eeper
who wor4ed &nder the direct s&pervision of one Renato Pacion, a
s&pervisor of C)0)R) S>HHL* >hese a""eations are contained in the
a@davit
Q8R
e1ec&ted b' 9e "os Santos and were never disp&ted b' C)0)R)
S>HHL* )"so remainin &ncontroverted are the pieces of doc&mentar'
evidence add&ced b' 9e "os Santos consistin of dai"' time records
mar4ed )nne1es 2;2 and 2!2 which, a"tho&h bearin the headin and
"oo of >op:;"ite, were sined b' o@cers of respondent C)0)R) S>HHL,
and )nne1es 2$2 and 2A2 with the headin and "oo of C)0)R) S>HHL*
Ancidenta""', we do not aree with NLRC,s s&bmission that the dai"' time
records serve no other p&rpose than to estab"ish mere"' the presence of
9e "os Santos within the premises of C)0)R) S>HHL* Contrari"', these
records, which were sined b' the compan'Es o@cers, prove that the
compan' e1ercised the power of contro" and s&pervision over its
emp"o'ees, partic&"ar"' 9e "os Santos* >here is dearth of proof to show
that >op:;"ite was the rea" emp"o'er of 9e "os Santos other than a na4ed
and &ns&bstantiated denia" b' C)0)R) S>HHL that it has no power of
contro" over 9e "os Santos* Records wo&"d attest that even the power to
dismiss was vested with C)0)R) S>HHL which admitted in its !eply that
2>op:;"ite re<&ested C)0)R) S>HHL to terminate his emp"o'ment after he
was ca&ht b' the sec&rit' &ard committin theft*2
) c&rsor' readin of the above dec"aration wi"" con(rm the fact that the
dismissa" of 9e "os Santos co&"d on"' be e=ected b' C)0)R) S>HHL and
not b' >op:;"ite as the "atter co&"d on"' 2re<&est2 for 9e "os Santos,
dismissa"* Af >op:;"ite was tr&"' the emp"o'er of 9e "os Santos, it wo&"d not
be as4in permission from or 2re<&estin2 respondent C)0)R) S>HHL to
dismiss 9e "os Santos considerin that it co&"d ver' we"" dismiss him
witho&t C)0)R) S>HHL,s assent*
)"" the foreoin considerations a@rm b' more than s&bstantia" evidence
the e1istence of an emp"o'er:emp"o'ee re"ationship between 9e "os
Santos and C)0)R) S>HHL*
)s to whether petitioner 9e "os Santos was i""ea""' terminated from his
emp"o'ment, we are in f&"" areement with the Labor )rbiter,s (ndin that
he was i""ea""' dismissed* )s correct"' observed b' the Labor )rbiter, it
was Narciso $onrado, scrap in:chare, who handed the bo1 containin the
e"ectrica" cab"es to 9e "os Santos* No shred of evidence can show that 9e
"os Santos was aware of its contents, or if ever, that he conspired with
$onrado in bi"4in the compan' of its propert'* Fhat is certain however is
that whi"e $onrado admitted, in a "etter of apo"o', his c&"pabi"it' for the
&nfort&nate incident and was &nconditiona""' foriven b' the compan', 9e
"os Santos was not on"' &nceremonio&s"' dismissed from service b&t was
chared before the co&rt for <&a"i(ed theft 6"ater dismissed b' the p&b"ic
prosec&tor for "ac4 of evidence7* ;or s&re, 9e "os Santos cannot be he"d
more &i"t' than $onrado who, bein the scrap in:chare, had the power
to c"assif' the cab"es concerned as scrap*
Neither can we ratif' C)0)R) S>HHL,s contention that petitioner was
va"id"' dismissed for "oss of tr&st and con(dence* )s provided for in the
Labor Code-
)rt* +8+* 2ermination by employer : )n emp"o'er ma' terminate an
emp"o'ment for an' of the fo""owin ca&ses- 1 1 1 6c7 ;ra&d or wi""f&"
breach b' the emp"o'ee of the tr&st reposed in him b' his emp"o'er or
d&"' a&thori#ed representative 1 1 1 1
Of co&rse, it m&st be stressed that "oss of con(dence as a ?&st ca&se for
the termination of emp"o'ment is based on the premise that the emp"o'ee
ho"ds a position of tr&st and con(dence, as when he is entr&sted with
responsibi"it' invo"vin de"icate matters, and the tas4 of a ?anitor does
not fa"" s<&are"' &nder this cateor'*
Petitioner 9e "os Santos ar&es that >op:;"ite was mere"' a 2"abor:on"'2
contractor* >o fortif' his stance, 9e "os Santos brins to o&r attention the
contract of service
Q9R
dated 8 ;ebr&ar' 1991 between C)0)R) S>HHL and
>op:;"ite which provides-
17 >he contractor 6>op:;"ite7 sha"" provide wor4ers 6non:s4i""ed7 si1 6K7 da's
a wee4 for the C"ientEs 6Camara7 factor' and edi(ces*
$owever, both respondent C)0)R) S>HHL and >op:;"ite
Q15R
are adamant in
their be"ief that the "atter was not a 2"abor:on"'2 contractor as the' re"' on
another provision of the contract which states :
+7 >he Contractor warrants the honest', re"iabi"it', ind&str' and
cooperative disposition of the person it emp"o's to perform the ?ob s&b?ect
to this contract, and sha"" emp"o' s&ch persons on"' as are in possession
of hea"th certi(cates and po"ice c"earances 1 1 1 1
>he precedin provisions do not ive a c"ear and cateorica" answer as
reards the rea" character of >op:;"ite,s b&siness* ;or whatever its worth,
the invocation of the contract of service is a tacit admission b' both
parties that the emp"o'ment of 9e "os Santos was b' virt&e of s&ch
contract* Be that as it ma', >op:;"ite, m&ch "ess C)0)R) S>HHL, cannot
dictate, b' the mere e1pedient of a &ni"atera" dec"aration in a contract,
the character of its b&siness, i*e*, whether as 2"abor:on"'2 contractor, or
?ob contractor, it bein cr&cia" that its character be meas&red in terms of
and determined b' the criteria set b' stat&te* >he case of 2iu $%
1L!/
Q11R
s&ccinct"' en&nciates this stat&tor' criteria :
%ob contractin is permissib"e on"' if the fo""owin conditions are met- 17
the contractor carries on an independent b&siness and &nderta4es the
contract wor4 on his own acco&nt &nder his own responsibi"it' accordin
to his own manner and method, free from the contro" and direction of his
emp"o'er or principa" in a"" matters connected with the performance of the
wor4 e1cept as to the res&"ts thereofI and +7 the contractor has
s&bstantia" capita" or investment in the form of too"s, e<&ipment,
machineries, wor4 premises, and other materia"s which are necessar' in
the cond&ct of the b&siness*
2Labor:on"' contractin2 as de(ned in Sec* C, par* 6f7, R&"e LAAA:), Boo4 AAA,
of the 4mnibus !ules Implementing the Labor /ode states that a 2"abor:
on"'2 contractor, prohibited &nder this R&"e, is an arranement where the
contractor or s&bcontractor mere"' recr&its, s&pp"ies or p"aces wor4ers to
perform a ?ob, wor4 or service for a principa" and the fo""owin e"ements
are present- 6a7 >he contractor or s&bcontractor does not have
s&bstantia" capita" or investment to act&a""' perform the ?ob, wor4 or
service &nder its own acco&nt or responsibi"it'I and, 6b7
>he emp"o'ees recr&ited, s&pp"ied or p"aced b' s&ch contractor or
s&bcontractor are performin activities which are direct"' re"ated to the
main b&siness of the principa"*
)pp"'in the foreoin provisions, the Co&rt (nds >op:;"ite to be a 2"abor:
on"'2 contractor, a mere s&pp"ier of "abor to C)0)R) S>HHL, the rea"
emp"o'er* Other than its open dec"aration that it is an independent
contractor, no s&bstantia" evidence was add&ced b' >op:;"ite to bac4 &p
its c"aim* Ats reve"ation that it provided a sweeper to petitioner wo&"d not
s&@ce to convince this Co&rt that it possesses ade<&ate capita"i#ation to
&nderta4e an independent b&siness*
Q1+R
Neither wi"" the s&bmission prosper
that 9e "os Santos did not perform a tas4 direct"' re"ated to the
principa" b&siness of respondent C)0)R) S>HLL* )s ear"' as in 5uarin $%
1L!/
Q1/R
we r&"ed that 2the ?obs assined to the petitioners as mechanics,
?anitors, ardeners, (remen and rassc&tters were direct"' re"ated to the
b&siness of Nove"t' as a arment man&fact&rer,2 reasonin that 2for the
wor4 of ardeners in maintainin c"ean and we"":4ept ro&nds aro&nd the
factor', mechanics to 4eep the machines f&nctionin proper"', and
(remen to "oo4 o&t for (res, are direct"' re"ated to the dai"' operations of
a arment factor'*2
An its comment respondent C)0)R) S>HHL empathica""' ar&es that >op:
;"ite, a"tho&h imp"eaded as respondent in NLRC:NCR Cases Nos* 55:
5G5CGK1:9/ and 55:58555K1:9/, s&b?ect of the present appea", was never
s&mmoned for which reason it was deprived of proced&ra" d&e processI
basica""' the same "ine of ar&ment adopted b' the NLRC in its decision to
remand the case to the arbitration branch of oriin* C)0)R) S>HHL
obvio&s"' wants wants to impress &pon &s that >op:Xite, bein a necessar'
part', sho&"d have been s&mmoned and the fai"&re to do so wo&"d ?&stif'
the remand of the case to the Labor )rbiter*
Fe are not pers&aded* >he records show that >op:;"ite was not on"'
imp"eaded in the aforementioned case b&t was in fact a=orded an
opport&nit' to be heard when it s&bmitted a position paper* >his m&ch
was admitted b' >op:;"ite in par* 5 of its &otion for Inter$ention where it
stated that 2movant s&bmitted its position paper in the cases mentioned
in the precedin pararaph b&t the Presidin )rbiter inored the c"ear and
"ea" basis of the position of the movant*2
Q1CR
An other words, the fai"&re
of >op:;"ite to receive s&mmons was not a fata" proced&ra" Xaw beca&se it
was never deprived of the opport&nit' to venti"ate its side and cha""ene
petitioner in its position paper, not to mention the comment which it
s&bmitted thro&h co&nse" before this Co&rt*
Q15R
At moved to intervene not
beca&se it had no notice of the proceedins b&t beca&se its position paper
a""eed"' was not considered b' the Labor )rbiter* Fhi"e ?&risdiction over
the person of the defendant can be ac<&ired b' service of s&mmons, it
can a"so be ac<&ired b' vo"&ntar' appearance before the co&rt which
inc"&des s&bmission of p"eadins in comp"iance with the order of the co&rt
or trib&na"* A fortiori, administrative trib&na"s e1ercisin <&asi:
?&dicia" powers are &nfettered b' the riidit' of certain proced&ra"
re<&irements s&b?ect to the observance of f&ndamenta" and essentia"
re<&irments of d&e process in ?&sticiab"e cases presented before
them* An "abor cases, a p&ncti"io&s adherence to strinent technica" r&"es
ma' be re"a1ed in the interest of the wor4inman* ) remand of the case,
as the NLRC envisions, wo&"d compe" petitioner, a "ow"' wor4er, to tread
once aain the ca"var' of a protracted "itiation and Xae""ate him into
s&bmission with the "ash of technica"it'*
F$HRH;ORH, the petition is !R)N>H9 and the appea"ed 9ecision of the
NLRC is RHLHRSH9 and SH> )SA9H and the 9ecision of the Labor )rbiter
prom&"ated +/ 0a' 1999 is RHANS>)>H9 and )9OP>H9 as the 9ecision in
this case*
MARIVELES SHIP?ARD CORP. VS. CA )1 %$.G.R. N+.
155135N+*)34)& 11, 2223
FACTSPetitioner enaed the services of Lonest ;orce Anvestiation and
Sec&rit' )enc', Anc* torender sec&rit' services at its premises* Lonest
;orce then dep"o'ed its sec&rit' &ards, herein privaterespondents, at the
petitionerEs ship'ard* $owever, petitioner fo&nd the services rendered b'
privaterespondents &nsatisfactor' and inade<&ate ca&sin it to terminate
its contract with Lonest ;orce and int&rn, the "atter terminated the
emp"o'ment of said respondents* Conse<&ent"', private respondents
("eda case for i""ea" dismissa", &nderpa'ment of waes p&rs&ant to the
PNPSOSA):P)9P)O rates, non:pa'ment of overtime pa', premi&m pa' for
ho"ida' and rest da', service incentive "eave pa', 1/th
monthpa' and attorne'Es fees, aainst both Lonest ;orce and petitioner,
before NLRC, who in t&rn so&ht the&ardsE reinstatement with f&""
bac4waes and witho&t "oss of seniorit' rihts* Petitioner appea"ed to
theNLRC, contendin that it sho&"d not be he"d ?oint"' and severa""' "iab"e
with Lonest ;orce for&nderpa'ment of waes and overtime pa's beca&se
it had been re"iio&s"' and prompt"' pa'in the bi""sfor the sec&rit'
services sent b' Lonest ;orce and that these are in accordance with the
stat&tor'minim&m wae*

)"so, petitioner contends that it sho&"d not be he"d "iab"e for overtime pa'
as privaterespondents fai"ed to present proof that overtime wor4 was
act&a""' performed*

$owever, the "abortrib&na" a@rmedi n totothe decision of the Labor
)rbiter* Petitioner moved for reconsideration, b&t thiswas denied b' the
NLRC* >he petitioner then ("ed a specia" civi" action for certiorari assai"in
the NLRC ?&dment for havin been rendered with rave ab&se
of discretion with the Co&rt of )ppea"s, which wasa"so o&triht dismissed
b' the respondent co&rt d&e to a defective certi(cate of non:for&m
shoppinand non:s&bmission of the re<&ired doc&ments to accompan'
said petition* >he petitioner then movedfor reconsideration of the order of
dismissa" b&t was a"so denied b' the appe""ate co&rt, hence, thispetition*
I""#) Fhether or not petitioner is ?oint"' and severa""' "iab"e with
Lonest ;orce
H)$0 Oes, PetitionerEs "iabi"it' is ?oint and severa" with that of Lonest
;orce, p&rs&ant to )rtic"es 15K,15G and 159 of the Labor Code* Fhen the
petitioner contracted with Lonest ;orce, petitioner becamean indirect
emp"o'er of private respondents p&rs&ant to )rtic"e 15G* ;o""owin )rtic"e
15K, when theaenc' as contractor fai"ed to pa' the &ards, the
corporation as principa" becomes ?oint"' and severa""'"iab"e for the &ardsE
waes*

>his is mandated b' the Labor Code to ens&re comp"iance with
itsprovisions, inc"&din pa'ment of stat&tor' minim&m wae*

>he sec&rit' aenc' is he"d "iab"e b' virt&e of its stat&s as direct
emp"o'er, whi"e the corporation is deemed the indirect emp"o'er of the
&ards for thep&rpose of pa'in their waes in the event of fai"&re of the
aenc' to pa' them*

>his stat&tor' schemeives the wor4ers the amp"e protection consonant
with "abor and socia" ?&stice provisions of theConstit&tion* Petitioner
cannot evade its "iabi"it' b' c"aimin that it had re"iio&s"' paid
thecompensation of &ards as stip&"ated &nder the contract with the
sec&rit' aenc'*

Labor standards areenacted b' the "eis"at&re to a""eviate the p"iht of
wor4ers whose waes bare"' meet the spira"in costsof their basic needs*

Labor "aws are considered written in ever' contract*

Stip&"ations in vio"ationthereof are considered n&""*

Simi"ar"', "eis"ated wae increases are deemed amendments to
thecontract*

>h&s, emp"o'ers cannot hide behind their contracts in order to evade their
6or theircontractorsE or s&bcontractorsE7 "iabi"it' for noncomp"iance with
the stat&tor' minim&m wae*
ROSE:OOD PROCESSING, INC., /)1'1'+!)&, *".
NATIONAL LABOR RELATIONS COMMISSION, NAPOLEON C.
MAMON, ARSENIO GACCINGAN, ROMEO C. VELASCO, ARMANDO L.
BALLON, VICTOR E. ALDECA, JOSE L. CABRERA, VETERANS
PHILIPPINE SCOUT SECURIT? AGENC?, %!0D+& ENGR. SERGIO
JAMILA
F%-1" +( 1A) -%")
Private respondents were sec&rit' &ards of Leterans Phi"ippine Sco&t
Sec&rit' )enc'* Some were assined to other companies and detai"ed to
Rosewood, whi"e others are re:assined to other companies from
Rosewood, and sti"" others were p&t on MXoatinN stat&s witho&t
assinment* 0ost were &nderpaid or their waes were never paid* )""
these circ&mstances "ed to the ("in of a comp"aint for i""ea" dismissa",
&nderpa'ment of waes, and for nonpa'ment of overtime pa', "ea"
ho"ida' pa', premi&m pa' for ho"ida' and rest da', thirteenth month pa',
cash bond deposit, &npaid waes and damaes was ("ed aainst Leterans
Phi"ippine Sco&t Sec&rit' )enc' and3or Serio %ami"a AL 6co""ective"'
referred to as the 2sec&rit' aenc',2 for brevit'7* >hereafter, petitioner
Rosewood Processin, Anc* was imp"eaded as a third:part' respondent b'
the sec&rit' aenc'* An d&e co&rse, Labor )rbiter Ricardo C* Nora rendered
a conso"idated 9ecision dated 0arch +K, 199/ (ndin the sec&rit' aenc'
and Rosewood as so"idari"' "iab"e to pa' the monetar' bene(ts d&e the
sec&rit' &ards*
I""#) Fhether or not petitioner Rosewood was so"idari"' "iab"e with the
sec&rit' aenc' for the non:pa'ment of waes, as provided in )rtic"es
15K, 15G and 159 of the Labor Code*
R#$'!8 >he S&preme Co&rt he"d that whi"e it is &ndisp&tab"e that b'
operation of the provisions of )rtic"es 15K, 15G and 159, the Hmp"o'er
which is Rosewood has so"idar' "iabi"it' for pa'ment of wae di=erentia"s,
s&ch "iabi"it' however sho&"d on"' be to the e1tent of the period when the
respondent &ards were &nder its emp"o'ment* ;or the periods where said
&ards were assined somewhere e"se, the S&preme Co&rt he"d that
Rosewood cannot be "iab"e* >he S&preme Co&rt f&rther he"d that since
there was no evidence presented pointin to the fact that Rosewood
conspired with the sec&rit' aenc' in i""ea""' dismissin the &ards, it
cannot be made "iab"e to pa' bac4 waes as provided in )rtic"e 159*
;ina""', since an order to pa' bac4 waes and separation pa' is invested
with a p&nitive character, s&ch that an indirect emp"o'er sho&"d not be
made "iab"e witho&t a (ndin that it had committed or conspired in the
i""ea" dismissa", then Rosewood, which was no "oner the emp"o'er of the
&ards when the' were dismissed, sho&"d not be compe""ed to pa' since it
was c"ear that it too4 no part in the i""ea" dismissa"*
G.R. N+. 78713 F)4&#%&. 27, 1991
CAILODHENR? DEFERIA, EDDIE NORICO, FLORENTINO DE PAULA,
CARLOS PACHECO, HERNANI DEFERIA, ED:IN NORICO, CRISTOBAL
MORADAS, JOSE RABALA, LORETA PADASAS, CELESTINA MASION,
ELISA BA?OT, CIRIACA NICOR, NENITA MORADAS, ANTONIA
MIRASOL, ROSARIO CAMARITE, LEOPOLDO SUALA, DELIA
VALENTE, VENUS GUARRA, MERCEDES GUARRA %!0 MAR?>ANN
AGATO, /)1'1'+!)&",
*".
NATIONAL LABOR RELATIONS COMMISSION %!0 ERMA
INDUSTRIES, INC. ERNESTO MARCELO,&)"/+!0)!1".
>he facts, as athered from the records of both petitions, are as fo""ows-
On 0a' /, 19G9, the private respondent Hrma And&stries, Anc* 6hereinafter
referred as HR0)7, as private corporation enaed in e1portin shrimps,
prawns, s<&ids and other marine prod&cts and as represented b' its Lice:
President Serio Orit# L&is, %r*, entered into a contract with the private co:
respondent Ciri"o .ndan for the "atter to s&pp"' the former with marine
prod&cts in Baco"od Cit'*
/
.nder the said contract, HR0) wo&"d provide both the (nancin and the
e<&ipment to .ndan whi"e the "atter wo&"d be responsib"e for hirin the
wor4ers*
S&bse<&ent"', .ndan enaed the services of the nineteen 6197 individ&a"
petitioners to c"ean, behead, sort, prepare, and pac4 the marine prod&cts
for their shipment and de"iver' to HR0)*
Since the emp"o'ment of the petitioners in 198+ &p to %&ne /5, 198C, the'
wor4ed contin&o&s"' for .ndan who paid them on a piece:wor4 basis
or paiao* >he fema"e emp"o'ees who too4 chare of the c"eanin,
beheadin, and sortin phases of the wor4 were a""ed"' paid at the rate
of P5*1K per 4i"o or an averae wee4"' earnin of P8*55 to P++*55* >he
ma"e emp"o'ees, on the other hand, who were enaed in the preparation
and pac4in phases of the wor4 were paid at the rate of P5*+5 per 4i"o or
an earnin of PK5*55 to P155*55 a wee4* )"" the said emp"o'ees c"aimed to
wor4 ever'da', inc"&din S&nda's and "ea" ho"ida's from 8-55 o,c"oc4 )0
to K-55 o,c"oc4 P0*
C
Sometimes in )pri", 198C, the petitioners constit&tin a ma?orit' of the
emp"o'ees of .ndan, ?oined and became members of the co:petitioner
Commercia" and )ro:And&stria" Labor Orani#ation 6C)ALO7, a d&"'
reistered and e1istin "abor &nion*
5
On 0a' 9, 198C, the petitioners ("ed a petition for certi(cation e"ection as
the so"e and e1c"&sive barainin representative of the wor4ers of HR0)
with then 0inistr' 6now 9epartment7 of Labor and Hmp"o'ment, Reiona"
O@ce No* LA, which case was doc4eted as LR9 Case No* 5K/8:8C* )t the
same time, the petitioners ("ed a comp"aint aainst the private
respondents for non:pa'ment of wae di=erentia"s, emerenc' and cost
a""owances, 1/th month pa', niht shift di=erentia"s and service incentive
pa' with the Nationa" Labor Re"ations Commission, Reiona" )rbitration
Branch No* LA, which case was desinated as R)B 5+/5:8C* ) "etter
comp"aint was "i4ewise ("ed with the Socia" Sec&rit' S'stem for the fai"&re
of the private respondents to reister the petitioners as their emp"o'ees*
K
$owever, on %&ne /5, 198C, whi"e the petitioners were abo&t to report for
wor4 in the mornin, the' were s&rprised to see the entrance to their
wor4in p"ace c"osed with .ndan informin them of the sh&tdown of the
said b&siness*
Conse<&ent"', the petitioners ("ed another case desinated as R)B Case
No* 5/1/:8C with the Nationa" Labor Re"ations Commission, Reiona"
)rbitration Branch No* LA, Baco"od Cit' for &nfair "abor practice committed
b' the private respondents thro&h the a""eed pretended c"os&re of the
said b&siness* >he petitioners contended that the same b&siness
contin&ed to operate at another p"ace which was at the residence of
.ndan,s re"ative and that the p&rported c"os&re was made witho&t prior
notice to the then 0inistr' 6now 9epartment7 of Labor and Hmp"o'ment*
G
On October 9, 198C, the 0ed:)rbiter Rodo"fo !* Laoc dismissed the
petition for certi(cation e"ection ("ed b' the petitioners aainst HR0) on
the ro&nd that there was no e1istin emp"o'er:emp"o'ee re"ationship
between them and s&ested that the petitioners, emp"o'er appeared to
be .ndan*
8
On 0arch +G, 1985, Labor )rbiter Ricardo >* Octavio "i4ewise dismissed
R)B Case No* 5+/K:8C which was the comp"aint for the vio"ation of "abor
standard "aws on the same ro&nd that there was no emp"o'er:emp"o'ee
re"ationship between the said parties* On appea", the Nationa" Labor
Re"ations Commission in a Reso"&tion dated %an&ar' 8, 198G, a@rmed the
said decision of the Labor and denied a s&bse<&ent motion for
reconsideration*
0eanwhi"e, on October /5, 1985, Labor )rbiter %ose )&irre dismissed R)B
Case No* 5/1/:8C which was the comp"aint for &nfair "abor practice on the
same (ndin that there was no emp"o'er:emp"o'ee re"ationship between
the said parties* On appea", the Nationa" Labor Re"ations Commission in a
Reso"&tion dated )&&st /1, 198G, a@rmed the said decision of the Labor
)rbiter and denied a s&bse<&ent motion for reconsideration*
$ence, these twin petitions*
.pon the manifestation and motion of the So"icitor !enera", the said
petitions for certiorari were ordered conso"idated b' the Co&rt in a
Reso"&tion dated 9ecember 1C, 1988*
9
On 0arch +K, 1995, the Co&rt
reso"ved in !*R* No* 8+G18, to dispense with the comment of the private
respondents, d&e to their fai"&re &p to that "ate date to comp"' with the
reso"&tions of the Co&rt of %&"' 11, 1988 and September 19, 1988,
re<&irin them to ("e comment on the petition in that case, and th&s
considered these cases s&bmitted for decision*
>he common iss&es raised b' the said petitions as adverted to at the
o&tset are as fo""ows-
1* Fhether or not an emp"o'er:emp"o'ee re"ationship e1ists between
HR0) and the petitioners, and
+* Fhether or not HR0) is the indirect emp"o'er of petitioners so as to
ma4e it ?oint"' and severa""' "iab"e with Ciri"o .ndan for the petitioners,
c"aims*
15
Fith reard to the (rst iss&e, we a@rm the cha""ened r&"in of the
Nationa" Labor Re"ations Commission that, indeed, there is no emp"o'er:
emp"o'ee re"ationship between HR0) and the petitioners* Sett"ed
?&rispr&dence en&merates fo&r 6C7 e"ements necessar' to estab"ish the
e1istence of an emp"o'er:emp"o'ee re"ationship, to wit- 617 the se"ection
and enaement of the emp"o'eeI 6+7 the pa'ment of waesI 6/7 the
power of dismissa"I and 6C7 the power to contro" emp"o'ees, cond&ct*
11
Nowhere in the record of the case is there a showin b' the petitioners of
an' evidence as to s&bstantiate the presence of the said fo&r 6C7
e"ements* On the contrar', vario&s e1hibits
1+
of the petitioners, s&ch as
the a""eed a&thori#ation sined b' Ciri"o .ndan as O@cer:in:Chare of
HR0), sa"es and chare invoices, and co""ector,s and de"iver' receipts
p&rported showin the active invo"vement of HR0) in the said b&siness,
on"' demonstrates more convincin"' that it was .ndan who was the
direct and act&a" emp"o'er who had enaed the petitioners, paid their
waes, contro""ed their cond&ct, and &"timate"', dismissed them* An short,
we conc"&de rather that the emp"o'er:emp"o'ee re"ationship had e1isted
between .ndan and the petitioners*
Be that as it ma', notwithstandin the "ac4 of emp"o'er:emp"o'ee
re"ationship between HR0) and the petitioners, we however can not ho"d
HR0) free from an' "iabi"it' to the petitioners for the pa'ment of
emerenc' cost of "ivin a""owance, 1/th moth pa', and minim&m waes
d&e the "atter &nder app"icab"e "aws*
)ddressin the second iss&e, we aree with the So"icitor:!enera" in his
stron s&pport of the s&bmission on this score of the petitioners that
HR0) is their indirect emp"o'er and therefore so"idari"' "iab"e with .ndan*
>he ?oint and severa" "iabi"it' of HR0) with Car"os .ndan, the 2"abor:on"'2
contractor, arises not on"' from their contract b&t (nds (rm stat&tor'
basis in )rtic"es 15K, 15G, and 159 of the Labor Code which state-
)rt* 15K* /ontractor or sub-contractor* [ Fhenever an emp"o'er enters
into a contract with another person for the performance of the former,s
wor4, the emp"o'ees of the contractor and of the "atter,s s&b:contractor, if
an', sha"" be paid in accordance with the provisions of this Code*
An the event that the contractor or s&bcontractor fai"s to pa' the waes of
his emp"o'ees in accordance with this Code, the emp"o'er sha"" be ?oint"'
and severa""' "iab"e with his contractor or s&bcontractor to s&ch
emp"o'ees to the e1tent of the wor4 performed &nder the contract, in the
same manner and e1tent that he is "iab"e to emp"o'ees direct"' emp"o'ed
b' him*
111 111 111
>here is 2"abor:on"'2 contractin where the person s&pp"'in wor4ers to an
emp"o'er does not have s&bstantia" capita" or investment in the form of
too"s, e<&ipment, machineries, wor4 premises, amon others, and the
wor4ers recr&ited and p"aced b' s&ch persons are performin activities
which are direct"' re"ated to the principa" b&siness of s&ch emp"o'er* An
s&ch cases, the person or intermediar' sha"" be considered mere"' as an
aent of the emp"o'er who sha"" be responsib"e to the wor4ers in the same
manner and e1tent as if the "atter were direct"' emp"o'ed b' him*
111 111 111
)rt* 15G* Indirect employer* [ >he provisions of the immediate"'
precedin )rtic"e sha"" "i4ewise app"' to an' person, partnership,
association or corporation which, not bein an emp"o'er, contracts with an
independent contractor for the performance of an' wor4, tas4, ?ob or
pro?ect*
111 111 111
)rt* 159* Solidary liability* [ >he provisions of e1istin "aws to the
contrar' notwithstandin, ever' emp"o'er or indirect emp"o'er sha"" be
he"d responsib"e with his contractor or s&bcontractor for an' vio"ation of
an' provision of this Code* ;or p&rposes of determinin the e1tent of their
civi" "iabi"it' &nder this Chapter, the' sha"" be considered as direct
emp"o'ers*
Coro""ari"', the ?oint and severa" "iabi"it' imposed on HR0) is witho&t
pre?&dice to a c"aim for reimb&rsement b' it aainst Ciri"o .ndan of s&ch
s&ms which HR0) ma' have to pa' the petitioners*
15
)nent the chare aainst private respondent Car"os .ndan of &nfair "abor
practice in i""ea""' dismissin the petitioners thro&h the sham c"os&re
are of the said b&siness, we (nd the same meritorio&s* >he said act
constit&tes an interference and restraint on the petitioners in the e1ercise
of their riht to se"f:orani#ation
1K
as the "atter were then p&rs&in their
&nion a@"iation and membership with C)ALO*
An an ear"ier case, we str&c4 down a simi"ar attempt b' the emp"o'er to
avoid responsibi"it' for the va"id c"aims of its emp"o'ees, to wit-
111 111 111
)ravatin R)NSO0,s c"ear evasion of pa'ment of its (nancia"
ob"iations is the orani#ation of a 2r&n:awa' corporation,2 ROS)RAO, in
19K9 at the time the &nfair "abor practice case was pendin before the CAR
b' the same persons who were the o@cers and stoc4ho"ders of R)NSO0,
enaed in the same "ine of b&siness as R)NSO0, prod&cin the same "ine
of prod&cts, occ&p'in the same compo&nd, &sin the same machineries,
b&i"dins, "aborator', bodea and sa"es acco&nts departments &sed b'
R)NSO0, and which is sti"" in e1istence* Both corporations were c"osed
corporations owned and manaed b' members of the same fami"'* Ats
orani#ation proved to be a convenient instr&ment to avoid pa'ment of
bac4waes and the reinstatement of the ++ wor4ers* >his is another
instance where the (ction of separate and distinct corporate entities
sho&"d be disrearded*
1G
An s&m, we ho"d that .ndan as direct emp"o'er and HR0) as indirect
emp"o'er are ?oint"' and severa""' "iab"e to the petitioners for the vio"ation
of "abor standard "aws and &nfair "abor practice which the private
respondents, have fai"ed to den'*
F$HRH;ORH, the petitions are !R)N>H9 and a"" the cha""ened
Reso"&tions of the Nationa" Labor Re"ations Commission are hereb'
)NN.LLH9 and SH> )SA9H* Private respondent Car"os .ndan is ordered to
RHANS>)>H the petitioners to their same or s&bstantia""' e<&iva"ent
positions at the time of their termination, with three 'ears bac4waes and
witho&t "oss of seniorit' "ihts and bene(ts app&rtenant thereto*
Sho&"d the said reinstatement be rendered impossib"e b' the s&pervention
of circ&mstances, .ndan is f&rther ordered to P)O the petitioners
separation pa' e<&iva"ent to one 617 month,s sa"ar' for ever' 'ear of
service rendered, comp&ted at the minim&m dai"' wae "eve" at the time
of their termination*
An addition, we ;AN9 that each of the petitioners is entit"ed to mora"
damaes in the amo&nt of ;ive >ho&sand Pesos 6P5,555*557 for the
evident bad faith shown b' .ndan in i""ea""' dismissin the former*
An a"" instances, .ndan and HR0) are ?oint"' and severa""' "iab"e for a"" the
aforementioned monetar' awards* Costs aainst the private respondents*
PHILIPPINE FISHERIES DEVELOPMENT AUTHORIT?, Petitioner, *.
NATIONAL LABOR RELATIONS COMMISSION, %!0 ODIN SECURIT?
AGENC?, %" &)/&)")!1%1'*) +( '1" S)-#&'1. G#%&0", Respondents.
1* L)BOR )N9 SOCA)L LH!ASL)>AONSI PRANCAP)L )N9 CON>R)C>ORI
%OAN>LO )N9 SHLHR)LLO LA)BLH ;OR P)O0HN> O; .NP)A9 F)!HSI >HR0
\H0PLOOHRE CONS>R.H9* [ Notwithstandin that the petitioner is a
overnment aenc', its "iabi"ities, which are ?oint and so"idar' with that of
the contractor, are provided in )rtic"es 15K, 15G and 159 of the Labor
Code* >his p"aces the petitionerEs "iabi"ities &nder the scope of the NLRC*
0oreover, Boo4 >hree, >it"e AA on Faes speci(ca""' provides that the term
2emp"o'er2 inc"&des an' person actin direct"' or indirect"' in the interest
of an emp"o'er in re"ation to an emp"o'ee and sha"" inc"&de the
!overnment and a"" its branches, s&bdivisions and instr&menta"ities, a""
overnment:owned or contro""ed corporation and instit&tions as we"" as
non:pro(t private instit&tions, or orani#ations 6)rt* 9G QbR, Labor CodeI
Ha"e Sec&rit' )enc', Anc* v* NLRC, 1G/ SCR) CG9 Q1989RI Rabao v*
NLRC, +55 SCR) 158 Q1991R7* Sett"ed is the r&"e that in ?ob contractin,
the petitioner as principa" is ?oint"' and severa""' "iab"e with the contractor
for the pa'ment of &npaid waes* >he stat&tor' basis for the ?oint and
severa" "iabi"it' is set forth in )rtic"es 15G, and 159 in re"ation to )rtic"e
15K of the Labor Code*
+* A9*I A9*I A9*I F)!H OR9HRS, 0)N9)>ORO )N9 C)NNO> BH F)ALH9* [
An the case at bar, the action instit&ted b' the private respondent was for
the pa'ment of &npaid wae di=erentia"s &nder Fae Order No* K* >he
"iabi"ities of the parties were ver' we"" e1p"ained in the case of Ha"e
Sec&rit' v* NLRC, s&pra where the co&rt he"d- * * * 2>he so"idar' "iabi"it' of
P>SA and H)!LH, however, does not prec"&de the riht of reimb&rsement
from his co:debtor b' the one who paid QSee )rtic"e 1+1G, Civi" CodeR* At is
with respect to this riht of reimb&rsement that petitioners can (nd
s&pport in the aforecited contract&a" stip&"ation and Fae Order
provision* 2>hat Fae Orders are e1p"icit that pa'ment of the increases
are ]to be borneE b' the principa" or c"ient*E>o be borneE, however, does
not mean that the principa", P>SA in this case, wo&"d direct"' pa' the
sec&rit' &ards the wae and a""owance increases beca&se there is no
privit' of contract between them* >he sec&rit' &ardsE contract&a"
re"ationship is with their immediate emp"o'er, H)!LH* )s an emp"o'er,
H)!LH is tas4ed, amon others, with the pa'ment of their waes QSee
)rtic"e LAA Sec* / of the Contract for Sec&rit' Services, s&pra and Ba&tista
v* Ancion, !*R* No* 5+8+C, 0arch 1K, 1988, 158 SCR) 55KR* * * * >he Fae
Orders are stat&tor' and mandator' and can not be waived* >he petitioner
can not escape "iabi"it' since the "aw provides the ?oint and so"idar'
"iabi"it' of the principa" and the contractor for the protection of the
"aborers*
/* A9*I A9*I A9*I 9.H PROCHSS OBSHRLH9 AN C)SH )> B)R* [ >he
contention that it was deprived d&e process beca&se no hearin was
cond&cted does not deserve merit* ) decision on the merits is proper
where the iss&es raised b' the parties did not invo"ve intricate <&estions
of "aw* 6See B"&e Bar Cocon&t Phi"s* Anc* v* 0inister of Labor, 1GC SCR) +5
Q1989R7 >here can be no <&estion that the sec&rit' &ards are entit"ed to
wae ad?&stments* >he comp&tation of the amo&nt d&e to each individ&a"
&ard can be made d&rin the e1ec&tion of the decision where hearins
can be he"d* 6See Section /, R&"e LAAA of the New R&"es of Proced&re of the
NLRC7*
C* A9*I AN9ARHC> H0PLOOHRI HS>OPPH9 ;RO0 )SS)ALAN! CON>R)C>* [
Petitioner assai" the contract for sec&rit' services for bein void ab initio
on the ro&nd that it did not comp"' with the biddin re<&irements set b'
"aw* .ndeniab"', services were rendered a"read' and the petitioner
bene(tted from said contract for two 6+7 'ears now* >he petitioner is
therefore estopped from assai"in the contract*
5* A9*I P$AL* )SSOCA)>AON O; 9H>HC>ALH )N9 PRO>HC>ALH )!HNCO
OPHR)>ORS 6P)9P)O7I P.RPOSH ;OR A>S CRH)>AON* [ An the comp"aint
("ed, the private respondent a""eed that it re<&ested the Reiona"
9irector, NCR Reion of the 9epartment of Labor and Hmp"o'ment for
their intercession in connection with the i""ea" biddin and award made
b' the petitioner in favor of >riad Sec&rit' )enc' which was be"ow the
minim&m wae "aw* .ndeniab"', the private respondent is e<&a""' &i"t'
when it entered into the contract with the petitioner witho&t considerin
Fae Order No* K* >he private respondent tries to e1p"ain that the
Phi"ippine )ssociation of 9etective and Protective )enc' Operators
6P)9P)O7 which (1es the contract rate of the sec&rit' aencies was
&nab"e to (1 the new contract rate &nti" 0a' 1+, 198K* Fe, however,
aree with the post&re that the settin of waes &nder P)9P)O is of no
moment* >he P)9P)O memorand&m was not necessar' to ma4e Fae
Order No* K e=ective* >he P)9P)O memo was mere"' an interna"
areement amon the operators to set the cei"in of the contract rates* At
was aimed to c&rb the practice of sec&rit' aencies which were in
c&tthroat competition to re<&est for wae ad?&stments after proposa"s
were accepted in ood faith to the pre?&dice of the parties*
K* A9*I SHC.RA>O )!HNCOI C)NNO> HSC)PH LA)BALA>O ;OR P)O0HN> O;
.NP)A9 F)!HSI P)O0HN> O; F)!HS >O H0PLOOHHS !.)R)N>HH9
.N9HR >$H CONS>A>.>AON* [ it bears emphasis that it was the private
respondent which (rst deprived the sec&rit' personne" of their rihtf&"
wae &nder Fae Order No* K* >he private respondent is the emp"o'er of
the sec&rit' &ards and as the emp"o'er, it is chared with 4now"ede of
"abor "aws and the ade<&ac' of the compensation that it demands for
contract&a" services is its principa" concern and not an' otherEs 69e"
Rosario V Sons Loin Hnterprises, Anc* v* NLRC, 1/K SCR) KK9 Q1985R7*
!iven this pec&"iar circ&mstance, the private respondent sho&"d a"so be
fa&"ted for the &npaid wae di=erentia"s of the sec&rit' &ards* B' ("in
the comp"aint in its own beha"f and in beha"f of the sec&rit' &ards, the
private respondent wishes to e1c&"pate itse"f from "iabi"it' on the strenth
of the r&"in in the Ha"e case that the &"timate "iabi"it' rests with the
principa"* Nonethe"ess, the inescapab"e fact is that the emp"o'ees m&st be
&aranteed pa'ment of the waes d&e them for the performance of an'
wor4, tas4, ?ob or pro?ect* >he' m&st be iven amp"e protection as
mandated b' the Constit&tion 6See )rtic"e AA, Section 18 and )rtic"e YAAA,
Section /7* >h&s, to ass&re comp"iance with the provisions of the Labor
Code inc"&din the stat&tor' minim&m wae, the ?oint and severa" "iabi"it'
of the contractor and the principa" is mandated*
G* A9*I SOLA9)RO LA)BALA>O O; PRANCAP)L )N9 CON>R)C>ORI FA>$O.>
PRH%.9ACH >O >$H RA!$> O; RHA0B.RSH0HN> >O HA>$HR PRANCAP)L OR
9ARHC> H0PLOOHR )S F)RR)N>H9* [ Fe ho"d the petitioner and the
private respondent ?oint"' and severa""' "iab"e to the sec&rit' &ards for
the &npaid wae di=erentia"s &nder Fae Order No* K* )s he"d in the
Ha"e case, the sec&rit' &ardsE immediate reco&rse is with their direct
emp"o'er, private respondent Odin Sec&rit' )enc'* >he so"idar' "iabi"it'
is, however, witho&t pre?&dice to a c"aim for reimb&rsement b' the private
respondent aainst the petitioner for on"' one:ha"f of the amo&nt d&e
considerin that the private respondent is a"so at fa&"t for enterin into
the contract witho&t ta4in into consideration the minim&m wae rates
&nder Fae Order No* K*
>he petitioner <&estions the reso"&tion of the Nationa" Labor Re"ations
Commission 6NLRC7 dated %an&ar' 1G, 198/ settin aside the order of
dismissa" iss&ed b' the Labor )rbiter and the reso"&tion dated %&ne +5,
1995 den'in petitionerEs motion for reconsideration*
>he facts are as fo""ows-
>he petitioner is a overnment:owned or contro""ed corporation created b'
P*9* No* 9GG*
On November 11, 1985, it entered into a contract with the Odin Sec&rit'
)enc' for sec&rit' services of its A"oi"o ;ishin Port Comp"e1 in A"oi"o Cit'*
>he pertinent provision of the contract provides-chanrob"es*com - virt&a"
"aw "ibrar'
OBLA!)>AON O; >$H ;AS$AN! POR> CO0PLHY-chanrob1es virt&a" 1aw
"ibrar'
1* ;or and in consideration of the services to be rendered b' the )!HNCO
to the ;AS$AN! POR> CO0PLHY, the "atter sha"" pa' to the former per
month for eiht 687 ho&rs wor4 dai"' as fo""ows-chanrob1es virt&a" 1aw
"ibrar'
O.>SA9H 0H>RO 0)NAL)
Sec&rit' !&ard P1,995*55
Sec&rit' S&pervisor +,595*55
9et* Commander +,195*55*
>he Sec&rit' !ro&p of the )!HNCO wi"" be headed b' a detachment
commander whose main f&nction sha"" consist of the administration and
s&pervision contro" of the )!HNCOEs personne" in the ;AS$AN! POR>
CO0PLHY* >here sha"" be one s&pervisor per shift who sha"" s&pervise the
&ards on d&t' d&rin a partic&"ar shift*
>he above sched&"e of compensation inc"&des amon others, the
fo""owin-chanrob1es virt&a" 1aw "ibrar'
6a7 0inim&m wae 6Fae Order No* 57
6b7 Rest 9a' Pa'
6c7 Niht 9i=erentia" Pa'
6d7 Ancentive Leave Pa'
6e7 1/th 0onth Pa'
6f7 Hmerenc' Cost of Livin )""owance 6&p to Fae Order No* 57
67 CJ ContractorEs >a1
6h7 Operationa" H1penses
6i7 Overhead 6Ro""o, pp* 19G:1987
>he contract for sec&rit' services a"so provided for a one 'ear renewab"e
period &n"ess terminated b' either of the parties* At reads-chanrob1es
virt&a" 1aw "ibrar'
9* >his areement sha"" ta4e e=ect &pon approva" for a period of one 617
'ear &n"ess sooner terminated &pon notice of one part' to the other
provided, that sho&"d there be no notice of renewa" within thirt' 6/57 da's
before the e1pir' date, the same sha"" be deemed renewed, and provided
f&rther, that the part' desirin to terminate the contract before the e1pir'
date sha"" ive thirt' 6/57 da's written advance notice to the other part'*
6Ro""o, p* 1987
On October +C, 198G, and d&rin the e=ectivit' of the said Sec&rit'
)reement, the private respondent re<&ested the petitioner to ad?&st the
contract rate in view of the imp"ementation of Fae Order No* K which
too4 e=ect on November 1, 198C*chanrob"esvirt&a"aw"ibrar'
>he private respondentEs re<&est for ad?&stment was anchored on the
provision of Fae Order No* K which states-chanrob1es virt&a" 1aw "ibrar'
SHC>AON 9* An the case of contracts for constr&ction pro?ects and for
sec&rit', ?anitoria" and simi"ar services, the increases in the minim&m
wae and a""owance rates of the wor4ers sha"" be borne b' the principa" or
c"ient of the constr&ction3service contractor and the contracts sha"" be
deemed amended accordin"', s&b?ect to the provisions of Section /6c7 of
this Order* 6Ro""o, p* C97
Section G, par* c of the Sec&rit' Services Contract which ca""s for an
a&tomatic esca"ation of the rate per &ard in case of wae increase a"so
reads-chanrob1es virt&a" 1aw "ibrar'
>he terms and conditions herein set forth sha"" be modi(ed b' the
app"icab"e provisions of s&bse<&ent "aws or decrees, especia""' as the'
pertain to increases in the minim&m wae and occ&pationa" bene(ts to
wor4ers* 6Ro""o, p* CK7
Re<&ests for ad?&stment of the contract price were reiterated on %an&ar'
1C, 1988 and ;ebr&ar' 19, 1988 b&t were inored b' the petitioner*
>h&s on %&ne G, 1988, the private respondent ("ed with the O@ce of the
S&b:Reiona" )rbitrator in Reion LA, A"oi"o Cit' a comp"aint for &npaid
amo&nt of re:ad?&stment rate &nder Fae Order No* K toether with wae
sa"ar' di=erentia"s arisin from the interation of the cost of "ivin
a""owance &nder Fae Order No* 1, +, / and 5 p&rs&ant to H1ec&tive Order
No* 1G8 p"&s the amo&nt of P+5,555*55 as attorne'Es fees and cost of
"itiation*
On %&"' +9, 1988, the petitioner ("ed a 0otion to 9ismiss on the fo""owin
ro&nds-chanrob1es virt&a" 1aw "ibrar'
617 >he Commission has no ?&risdiction to hear and tr' the caseI
6+7 )ss&min it has ?&risdiction, the sec&rit' &ards of Odin Sec&rit'
)enc' have no "ea" persona"it' to s&e or be s&edI and
6/7 )ss&min the individ&a" &ards have "ea" persona"it' the action
invo"ves interpretation of contract over which it has no a&thorit'* 6Ro""o, p*
G57
On )&&st 19, 1988, the Labor )rbiter iss&ed an Order dismissin the
comp"aint statin that the petitionerEs bein a overnment:owned or
contro""ed corporation wo&"d p"ace it &nder the scope and ?&risdiction of
the Civi" Service Commission and not within the ambit of the NLRC*
>his Order of dismissa" was raised on )ppea" to the NLRC and on %an&ar'
1G, 1989 the NLRC iss&ed the <&estioned reso"&tion settin aside the
order and entered a decision rantin re"iefs to the private!espondent*
) motion for reconsideration was s&bse<&ent"' ("ed raisin amon others
that the reso"&tion is-chanrob"esvirt&a"aw"ibrar'
617 An vio"ation of the riht of the respondent to d&e process &nder the
Constit&tionI
6+7 !rantin ar&endo that the d&e process c"a&se was observed, the
reso"&tion rantin re"ief is witho&t an' "ea" basisI and
6/7 !rantin ar&endo that there is "ea" basis for the award, the
stip&"ation &nder the contract a""owin an increase of wae rate is void ab
initio* 6Ro""o, p* 8K7
On %&ne +5, 1995, the motion for reconsideration was denied*
>he petitioner now comes to this Co&rt reiteratin s&bstantia""' the same
ro&nds it raised in its motion for reconsideration, to wit-chanrob1es
virt&a" 1aw "ibrar'
617 >he Nationa" Labor Re"ations Commission fai"ed to observe d&e
process*
6+7 !rantin the award of the Nationa" Labor Re"ations Commission is
va"id, re"iefs ranted are not "ea"*
6/7 )ss&min the award comp"ies with the re<&irements of d&e process,
the Nationa" Labor Re"ations Commission erred when it fai"ed to dec"are
the contract for sec&rit' services void* 6Ro""o, pp* +51:+5+7
>he petitioner is a overnment:owned or contro""ed corporation with a
specia" charter* >his p"aces it &nder the scope of the civi" service 6)rt* YA
QBR Q1R and Q+R, 198G Constit&tion7I Bo' Sco&ts of the Phi"ippines v* NLRC,
19K SCR) 1GK Q1991RI PNOC:Hner' 9eve"opment Corp* v* NLRC, +51
SCR) C8G Q1991R7* $owever, the &ards are not emp"o'ees of the
petitioner* >he contract of services e1p"icit"' states that the sec&rit'
&ards are not considered emp"o'ees of the petitioner 6Ro""o, p* C57* >here
bein no emp"o'er:emp"o'ee re"ationship between the petitioner and the
sec&rit' &ards, the ?&risdiction of the Civi" Service Commission ma' not
be invo4ed in this case*
>he contract entered into b' the petitioner which is mere"' ?ob contractin
ma4es the petitioner an indirect emp"o'er* >he iss&e, therefore, is whether
or not an indirect emp"o'er is bo&nd b' the r&"ins of the NLRC*
Notwithstandin that the petitioner is a overnment aenc', its "iabi"ities,
which are ?oint and so"idar' with that of the contractor, are provided in
)rtic"es 15K, 15G and 159 of the Labor Code* >his p"aces the petitionerEs
"iabi"ities &nder the scope of the NLRC* 0oreover, Boo4 >hree, >it"e AA on
Faes speci(ca""' provides that the term 2emp"o'er2 inc"&des an' person
actin direct"' or indirect"' in the interest of an emp"o'er in re"ation to an
emp"o'ee and sha"" inc"&de the !overnment and a"" its branches,
s&bdivisions and instr&menta"ities, a"" overnment:owned or contro""ed
corporation and instit&tions as we"" as non:pro(t private instit&tions, or
orani#ations 6)rt* 9G QbR, Labor CodeI Ha"e Sec&rit' )enc', Anc* v*
NLRC, 1G/ SCR) CG9 Q1989RI Rabao v* NLRC, +55 SCR) 158 Q1991R7* >he
NLRC, therefore, did not commit rave ab&se of discretion in ass&min
?&risdiction to set aside the Order of dismissa" b' the Labor
)rbiter*chanrob"es virt&a" "aw"ibrar'
>he &nder"'in iss&e in this case is who sho&"d carr' the b&rden of the
wae increases*
Sett"ed is the r&"e that in ?ob contractin, the petitioner as principa" is
?oint"' and severa""' "iab"e with the contractor for the pa'ment of &npaid
waes* >he stat&tor' basis for the ?oint and severa" "iabi"it' is set forth in
)rtic"es 15G, and 159 in re"ation to )rtic"e 15K of the Labor Code* 69e"
Rosario and Sons Loin Hnterprises, Anc* v* NLRC, 1/K SCR) KK9 Q1985RI
Ba&io v* NLRC, +5+ SCR) CK5 Q1991RI Hca" v* NLRC, 195 SCR) ++C
Q1991R7* An the case at bar, the action instit&ted b' the private respondent
was for the pa'ment of &npaid wae di=erentia"s &nder Fae Order No* K*
>he "iabi"ities of the parties were ver' we"" e1p"ained in the case of Ha"e
Sec&rit' v* NLRC, s&pra where the co&rt he"d-chanrob1es virt&a" 1aw
"ibrar'
x x x
2>he so"idar' "iabi"it' of P>SA and H)!LH, however, does not prec"&de the
riht of reimb&rsement from his co:debtor b' the one who paid QSee
)rtic"e 1+1G, Civi" CodeR* At is with respect to this riht of reimb&rsement
that petitioners can (nd s&pport in the aforecited contract&a" stip&"ation
and Fae Order provision*
2>he Fae Orders are e1p"icit that pa'ment of the increases are ]to be
borneE b' the principa" or c"ient*E>o be borneE, however, does not mean
that the principa", P>SA in this case, wo&"d direct"' pa' the sec&rit' &ards
the wae and a""owance increases beca&se there is no privit' of contract
between them* >he sec&rit' &ardsE contract&a" re"ationship is with their
immediate emp"o'er, H)!LH* )s an emp"o'er, H)!LH is tas4ed, amon
others, with the pa'ment of their waes QSee )rtic"e LAA Sec* / of the
Contract for Sec&rit' Services, s&pra and Ba&tista v* Ancion, !*R* No*
5+8+C, 0arch 1K, 1988, 158 SCR) 55KR*
2Premises considered, the sec&rit' &ardsE immediate reco&rse for the
pa'ment of the increases is with their direct emp"o'er, H)!LH* $owever,
in order for the sec&rit' aenc' to comp"' with the new wae and
a""owance rates it has to pa' the sec&rit' &ards, the Fae Order made
speci(c provision to amend e1istin contracts for sec&rit' services b'
a""owin the ad?&stment of the consideration paid b' the principa" to the
sec&rit' aenc' concerned* Fhat the Fae Orders re<&ire, therefore, is
the amendment of the contract as to the consideration to cover the
service contractorEs pa'ment of the increases mandated* An the end,
therefore, &"timate "iabi"it' for the pa'ment of the increases rests with the
principa"*2cra"aw virt&a1aw "ibrar'
>he Fae Orders are stat&tor' and mandator' and can not be waived*
>he petitioner can not escape "iabi"it' since the "aw provides the ?oint and
so"idar' "iabi"it' of the principa" and the contractor for the protection of
the "aborers* >he contention that it was deprived d&e process beca&se no
hearin was cond&cted does not deserve merit* ) decision on the merits is
proper where the iss&es raised b' the parties did not invo"ve intricate
<&estions of "aw* 6See B"&e Bar Cocon&t Phi"s* Anc* v* 0inister of Labor, 1GC
SCR) +5 Q1989R7 >here can be no <&estion that the sec&rit' &ards are
entit"ed to wae ad?&stments* >he comp&tation of the amo&nt d&e to each
individ&a" &ard can be made d&rin the e1ec&tion of the decision where
hearins can be he"d* 6See Section /, R&"e LAAA of the New R&"es of
Proced&re of the NLRC7 Neither can the petitioner assai" the contract for
sec&rit' services for bein void ab initio on the ro&nd that it did not
comp"' with the biddin re<&irements set b' "aw* .ndeniab"', services
were rendered a"read' and the petitioner bene(tted from said contract for
two 6+7 'ears now* >he petitioner is therefore estopped from assai"in the
contract*chanrob"es "aw "ibrar' - red
S&ite noteworth' is the fact that the private respondent entered into the
contract when Fae Order No* K had a"read' been in force* >he contract
was entered into in November 11, 1985 one 'ear after the e=ectivit' of
Fae Order No* K which was on November 1, 198C* >he rates of the
sec&rit' &ards as stip&"ated in the contract did not consider the increases
in the minim&m wae mandated b' Fae Order No* K* >wo 'ears after,
the private respondent is now as4in for an ad?&stment in the contract
price p&rs&ant to the wae order provision*
S&ch action of the private respondent is rather dist&rbin and m&st not
remain &nchec4ed* An the comp"aint ("ed, the private respondent a""eed
that it re<&ested the Reiona" 9irector, NCR Reion of the 9epartment of
Labor and Hmp"o'ment for their intercession in connection with the i""ea"
biddin and award made b' the petitioner in favor of >riad Sec&rit'
)enc' which was be"ow the minim&m wae "aw* .ndeniab"', the private
respondent is e<&a""' &i"t' when it entered into the contract with the
petitioner witho&t considerin Fae Order No* K*
>he private respondent tries to e1p"ain that the Phi"ippine )ssociation of
9etective and Protective )enc' Operators 6P)9P)O7 which (1es the
contract rate of the sec&rit' aencies was &nab"e to (1 the new contract
rate &nti" 0a' 1+, 198K*
Fe, however, aree with the post&re that the settin of waes &nder
P)9P)O is of no moment* >he P)9P)O memorand&m was not necessar' to
ma4e Fae Order No* K e=ective* >he P)9P)O memo was mere"' an
interna" areement amon the operators to set the cei"in of the contract
rates* At was aimed to c&rb the practice of sec&rit' aencies which were in
c&tthroat competition to re<&est for wae ad?&stments after proposa"s
were accepted in ood faith to the pre?&dice of the
parties*chanrob"es*com*ph - virt&a" "aw "ibrar'
Fhi"e it is tr&e that sec&rit' personne" sho&"d not be deprived of what is
"awf&""' d&e them, it bears emphasis that it was the private respondent
which (rst deprived the sec&rit' personne" of their rihtf&" wae &nder
Fae Order No* K* >he private respondent is the emp"o'er of the sec&rit'
&ards and as the emp"o'er, it is chared with 4now"ede of "abor "aws
and the ade<&ac' of the compensation that it demands for contract&a"
services is its principa" concern and not an' otherEs 69e" Rosario V Sons
Loin Hnterprises, Anc* v* NLRC, 1/K SCR) KK9 Q1985R7*
!iven this pec&"iar circ&mstance, the private respondent sho&"d a"so be
fa&"ted for the &npaid wae di=erentia"s of the sec&rit' &ards* B' ("in
the comp"aint in its own beha"f and in beha"f of the sec&rit' &ards, the
private respondent wishes to e1c&"pate itse"f from "iabi"it' on the strenth
of the r&"in in the Ha"e case that the &"timate "iabi"it' rests with the
principa"* Nonethe"ess, the inescapab"e fact is that the emp"o'ees m&st be
&aranteed pa'ment of the waes d&e them for the performance of an'
wor4, tas4, ?ob or pro?ect* >he' m&st be iven amp"e protection as
mandated b' the Constit&tion 6See )rtic"e AA, Section 18 and )rtic"e YAAA,
Section /7* >h&s, to ass&re comp"iance with the provisions of the Labor
Code inc"&din the stat&tor' minim&m wae, the ?oint and severa" "iabi"it'
of the contractor and the principa" is mandated*
Fe, therefore, ho"d the petitioner and the private respondent ?oint"' and
severa""' "iab"e to the sec&rit' &ards for the &npaid wae di=erentia"s
&nder Fae Order No* K* )s he"d in the Ha"e case, the sec&rit' &ardsE
immediate reco&rse is with their direct emp"o'er, private respondent Odin
Sec&rit' )enc'* >he so"idar' "iabi"it' is, however, witho&t pre?&dice to a
c"aim for reimb&rsement b' the private respondent aainst the petitioner
for on"' one:ha"f of the amo&nt d&e considerin that the private
respondent is a"so at fa&"t for enterin into the contract witho&t ta4in
into consideration the minim&m wae rates &nder Fae Order No*
K*chanrob"es "aw"ibrar' - rednad
F$HRH;ORH, the <&estioned reso"&tions of the Nationa" Labor Re"ations
Commission are hereb' );;AR0H9 with the modi(cation that both the
petitioner and the private respondent are OR9HRH9 to pa' ?oint"' and
severa""' the &npaid wae di=erentia"s &nder Fae Order No* K witho&t
pre?&dice to the riht of reimb&rsement for one:ha"f of the amo&nt which
either the petitioner or the private respondent ma' have to pa' to the
sec&rit' &ards* Costs aainst the petitioner*
PACI:U *" NLRC, 257 SCRA 2,6
6Labor Standards D B&s drivers and cond&ctors on a p&re"' commission
basis are entit"ed to 1/th month pa'7
F%-1" Petitioner &nion comp"aint for pa'ment of 1/th month pa' to the
drivers and cond&ctors of respondent compan', on the ro&nd that
a"tho&h said drivers and cond&ctors are compensated on a p&re"'
commission basis as described in their CB), the' are a&tomatica""'
entit"ed to the basic minim&m pa' mandated b' "aw sho&"d said
commission be "ess than their basic minim&m for eiht 687 ho&rs wor4*
Respondent La""acar >ransit, Anc* contended that since said drivers are
compensated on a p&re"' commission basis, the' are not entit"ed to 1/th
month pa' p&rs&ant to the e1emptin provisions en&merated in
pararaph + of the Revised !&ide"ines on the Amp"ementation of the 1/th
0onth Pa' Law* Section of )rtic"e YAL of the CB) e1press"' provides that
drivers and cond&ctors paid on a p&re"' commission are not "ea""'
entit"ed to 1/th month pa'* Said CB), bein the "aw between the parties,
m&st be respected*
I""#) FON the b&s drivers and cond&ctors of respondent La""acar >ransit,
Anc* are entit"ed to 1/th month pa'*
H)$0 Oes* ;or p&rposes of entit"in ran4 and ("e emp"o'ees a 1/th month
pa', it is immateria" whether the emp"o'ees concerned are paid a
&aranteed wae p"&s commission or a commission with &aranteed wae
inasm&ch as the bottom "ine is that the' receive a &aranteed wae* >h&s
is correct"' constr&ed in the 0OLH H1p"anator' B&""etin No* 8K:1+*
>he 1/th month pa' of b&s drivers and cond&ctors m&st be one:twe"fth
6131+7 of their tota" earnins d&rin the ca"endar 'ear*
De,artment o& A*ric/'t/re vs. N1R2 G.R. No. #04269" Novemer ##" #99!
S&nda', %an&ar' +5, +559 Posted b' Co=eeho"ic Frites
Labe"s- Case Digests, Political Law
F%-1" Petitioner 9epartment of )ric&"t&re 69)7 and S&"tan Sec&rit'
)enc' entered into a contract for sec&rit' services to be provided b' the
"atter to the said overnmenta" entit'* P&rs&ant to their arranements,
&ards were dep"o'ed b' S&"tan Sec&rit' )enc' in the vario&s premises
of the 9)* >hereafter, severa" &ards ("ed a comp"aint for &nderpa'ment
of waes, nonpa'ment of 1/th month pa', &niform a""owances, niht shift
di=erentia" pa', ho"ida' pa', and overtime pa', as we"" as for damaes
aainst the 9) and the sec&rit' aenc'*
>he Labor )rbiter rendered a decision (ndin the 9) ?oint"' and severa""'
"iab"e with the sec&rit' aenc' for the pa'ment of mone' c"aims of the
comp"ainant sec&rit' &ards* >he 9) and the sec&rit' aenc' did not
appea" the decision* >h&s, the decision became (na" and e1ec&tor'* >he
Labor )rbiter iss&ed a writ of e1ec&tion to enforce and e1ec&te the
?&dment aainst the propert' of the 9) and thesec&rit' aenc'*
>hereafter, the Cit' Sheri= "evied on e1ec&tion themotor vehic"es of the
9)*
I""#) Fhether or not the doctrine of non:s&abi"it' of the State app"ies in
the case
H)$0 >he basic post&"ate enshrined in the Constit&tion that Mthe State
ma' not be s&ed witho&t its consentN reXects nothin "ess than a
reconition of the soverein character of the State and an e1press
a@rmation of the &nwritten r&"e e=ective"' ins&"atin it from the
?&risdiction of co&rts* At is based on the ver' essence of sovereint'* )
soverein is e1empt from s&it based on the "oica"
and practica"ro&nd that there can be no "ea" riht as aainst the
a&thorit' that ma4es the "aw on which the riht depends*
>he r&"e is not rea""' abso"&te for it does not sa' that the State ma' not be
s&ed &nder an' circ&mstances* >he State ma' at times be s&ed* >he
StateEs consent ma' be iven e1press"' or imp"ied"'* H1press consent ma'
be made thro&h a enera" "aw or a specia" "aw* Amp"ied consent, on the
other hand, is conceded when the State itse"f commences "itiation, th&s
openin itse"f to a co&nterc"aim, or when it enters into a contract* An this
sit&ation, the overnment is deemed to have descended to the "eve" of
the other contractin part' and to have divested itse"f of its soverein
imm&nit'*
B&t not a"" contracts entered into b' the overnment operate as a waiver
of its non:s&abi"it'I distinction m&st sti"" be made between one which is
e1ec&ted in the e1ercise of its soverein f&nction and another which is
done in its proprietar' capacit'* ) State ma' be said to have descended to
the "eve" of an individ&a" and can this be deemed to have act&a""' iven
its consent to be s&ed on"' when it enters into b&siness contracts* At does
not app"' where the contract re"ates to the e1ercise of its soverein
f&nctions*
An the case, the 9) has not pretended to have ass&med a capacit' apart
from its bein a overnmenta" entit' when it entered into the <&estioned
contractI nor that it co&"d have, in fact, performed an' act proprietar' in
character*
B&t, be that as it ma', the c"aims of the comp"ainant sec&rit'
&ardsc"ear"' constit&te mone' c"aims* )ct No* /58/ ives the consent of
the State to be s&ed &pon an' mone'ed c"aim invo"vin "iabi"it' arisin
from contract, e1press or imp"ied* P&rs&ant, however, to Commonwea"th
)ct /+G, as amended b' P9 11C5, the mone' c"aim m&st (rst be bro&ht
to the Commission on )&dit*
P)+/$)E" B&+%0-%"1'!8 *. S)-. +( DOLEG.R. !+. 1796,2. M%. 8,
2229
F%-1" %ande"eon %&e#an 6respondent7 ("ed a comp"aint aainst Peop"e^s
Broadcastin Service, Anc* 6BomboRad'o Phi"s*, Anc7 6petitioner7 for i""ea"
ded&ction, non:pa'ment of service incentive "eave, 1/ th month
pa', premi&m pa' for ho"ida' and rest da' and i""ea" dimin&tion of
bene(ts, de"a'ed pa'ment of waes and non:coverae of SSS, P)!:ABA!
and Phi"hea"th before the 9epartment of Labor and Hmp"o'ment
69OLH7Reiona" O@ce No* LAA,Ceb& Cit'*On the basis of the comp"aint, the
9OLH cond&cted a p"ant "eve" inspection on +/ September +55/*
An the Inspection !eport (orm*
the Labor Anspector wrote &nder the headin _;indins3Recommendations`
_non:dimin&tion of bene(ts` and _Note- Respondent den' emp"o'er:
emp"o'ee re"ationship with the comp"ainant: see Notice of Anspection
res&"ts*`Petitioner was re<&ired to rectif'3restit&te the vio"ations within
(ve 657 da's from receipt* No recti(cationwas e=ected b' petitionerI th&s,
s&mmar' investiations were cond&cted, with the parties event&a""'
ordered tos&bmit their respective position papers*An his
Order dated +G ;ebr&ar' +55C, 9OLH Reiona" 9irector )tt'* Rodo"fo
0* Sab&"ao 6Reiona"9irector7 r&"ed that respondent is an emp"o'ee of
petitioner, and that the former is entit"ed to his mone' c"aimsamo&ntin
to P+5/, G+K*/5* Petitioner so&ht reconsideration of the Order, c"aimin
that the Reiona" 9irector avecredence to the doc&ments o=ered b'
respondent witho&t e1aminin the oriina"s, b&t at the same time he
missed or fai"ed to consider petitioner^s evidence* Petitioner^s motion for
reconsideration was denied*
On appea" to the9OLH Secretar', petitioner denied once more the
e1istence of emp"o'er:emp"o'ee re"ationship* An its Order dated +G
%an&ar' +555, the )ctin 9OLH Secretar' dismissed the appea" on
the ro&nd that petitioner did not post acash or s&ret' bond and instead
s&bmitted a 9eed of )ssinment of Ban4 9eposit* Petitioner maintained
that there isno emp"o'er:emp"o'ee re"ationship had ever e1isted between
it and respondent beca&se it was the drama directorsand prod&cers who
paid, s&pervised and discip"ined respondent* At a"so added that the case
was be'ond the ?&risdiction of the 9OLH and sho&"d have been considered
b' the "abor arbiter beca&se respondent^s c"aime1ceeded P5,555*55*
I""#) 9oes the Secretar' of Labor have the power to determine the
e1istence of an emp"o'er:emp"o'eere"ationshipU
H)$0 No*C"ear"' the "aw accords a preroative to the NLRC over the c"aim
when the emp"o'er:emp"o'ee re"ationshiphas terminated or s&ch
re"ationship has not arisen at a""* >he reason is obvio&s* An the second
sit&ation especia""',the e1istence of an emp"o'er:emp"o'ee re"ationship is
a matter which is not easi"' determinab"e from an ordinar'inspection,
necessari"' so, beca&se the e"ements of s&ch a re"ationship are not
veri(ab"e from a mere oc&"ar e1amination* >he intricacies and imp"ications
of an emp"o'er:emp"o'ee re"ationship demand that the "eve" of scr&tin'
sho&"d be far above the c&rsor' and themechanica"*
Fhi"e doc&ments, partic&"ar"' doc&ments fo&nd in the emp"o'er^s
o@ce are the primar' so&rcemateria"s, what ma' prove decisive are
factors re"ated to the histor' of the emp"o'er^s b&siness operations,
itsc&rrent state as we"" as accepted contemporar' practices in the
ind&str'* 0ore often than not, the <&estion of emp"o'er:emp"o'ee
re"ationship becomes a batt"e of evidence, the determination of which
sho&"d be comprehensiveand intensive and therefore best "eft to the
specia"i#ed <&asi:?&dicia" bod' that is the NLRC*
At can be ass&med that the 9OLH in the e1ercise of its visitoria" and
enforcement power somehow has to ma4e a determination of the
e1istence of an emp"o'er:emp"o'ee re"ationship* S&ch preroativa"
determination, however, cannot be coe1tensive with the visitoria" and
enforcement power itse"f* Andeed, s&ch determination is mere"'
pre"iminar', incidenta" and co""atera" to the 9OLHEs primar' f&nction of
enforcin "abor standards provisions* >he determination of the e1istence
of emp"o'er:emp"o'ee re"ationship is sti"" primari"' "oded with the NLRC*
>his is the meanin of the c"a&se Min cases where the re"ationship of
emp"o'er:emp"o'ee sti"" e1istsN in )rt* 1+86b7*

PEOPLEFS BROADCASTING SER
VICE (BOMBO RAD?O PHILS., INC.) *". THE SECRETAR? OF THE
DEPARTMENT OFLABOR
FACTS >he P&b"ic )ttorne'Es O@ce 6P)O7 ("ed a motion for C"ari(cation
of
the ear"ier 9ecision 6with Leave of Co&rt7 of the S&premeCo&rt on this
case* P)O so&ht to c"arif' as to when the visitoria" and enforcement
power of the 9OLH be not considered as co:e1tensive with the power
to determine the e1istence of an emp"o'er:emp"o'ee re"ationship* An
its Comment, the 9OLH so&htc"ari(cation as we"", as to the e1tent of its
visitoria" and enforcement power &nder the Labor Code, as amended*>he
S&preme Co&rt ear"ier r&"ed that there e1ist no emp"o'er:emp"o'ee
re"ationship between respondent %ande"eon %&e#anand petitioner Bombo
Rad'o Phi"s*, Anc** At f&rther r&"ed on the e1tent of visitoria" and
enforcement power of the Secretar' of Labor vis:Z:vis his ?&risdiction over
the cases invo"vin the determination of the e1istence of emp"o'er:
emp"o'ee re"ationship* At was he"d thatwhi"e the 9OLH ma' ma4e a
determination of the e1istence of an emp"o'er:emp"o'ee re"ationship, this
f&nction co&"d not be co:e1tensive with the visitoria" and enforcement
power provided in )rt* 1+86b7 of the Labor Code, as amended b' R)
GG/5* >he Nationa"Labor Re"ations Commission 6NLRC7 was he"d to be the
primar' aenc' in determinin the e1istence of an emp"o'er:
emp"o'eere"ationship* >his was the interpretation of the Co&rt of the
c"a&se Min cases where the re"ationship of emp"o'er :emp"o'ee sti"" e1istsN
in )rt* 1+86b7*
ISSUEFhether or not &nder the e1panded visitoria" and enforcement
powers of the Secretar' of Labor ranted b' R) GG/5, theSecretar' of
Labor has ?&risdiction over the cases invo"vin the determination of the
e1istence of emp"o'er:emp"o'ee re"ationship*
HELD>he Co&rt treated the 0otion for C"ari(cation as a second motion
for reconsideration, rantin said motion and reinstatin thepetition* At is
apparent that there is a need to de"ineate the ?&risdiction of the 9OLH
Secretar' vis:Z:vis that of the NLRC*.nder )rt* 1+86b7 of the Labor Code,
as amended b' R) GG/5, the 9OLH is f&""' empowered to ma4e a
determination as tothe e1istence of an emp"o'er:emp"o'ee re"ationship
in the e1ercise of its visitoria" and enforcement power, s&b?ect to ?&dicia"
review, notreview b' the NLRC* Af a comp"aint is bro&ht before the 9OLH
to ive e=ect to the "abor standards provisions of the Labor Code or other
"abor "eis"ation, and there is a (ndin b' the 9OLH that there is an
e1istin emp"o'er:emp"o'ee re"ationship, the 9OLH e1ercises ?&risdiction
to the e1c"&sion of the NLRC* Af the 9OLH (nds that there is no emp"o'er:
emp"o'ee re"ationship, the ?&risdiction is proper"'with the NLRC* Af a
comp"aint is ("ed with the 9OLH, and it is accompanied b' a c"aim for
reinstatement, the ?&risdiction is proper"' withthe Labor )rbiter, &nder )rt*
+1G6/7 of the Labor Code, which provides that the Labor )rbiter has
oriina" and e1c"&sive ?&risdiction over those cases invo"vin waes, rates
of pa', ho&rs of wor4, and other terms and conditions of emp"o'ment, if
accompanied b' a c"aim for reinstatement* Af a comp"aint is ("ed with the
NLRC, and there is sti"" an e1istin emp"o'er:emp"o'ee re"ationship, the
?&risdiction isproper"' with the 9OLH* >he (ndins of the 9OLH, however,
ma' sti"" be <&estioned thro&h a petition for certiorari &nder R&"e K5
of the R&"es of Co&rt*
Davao $r/its 2or,oration vs Associated 1aor 3nions" G.R. No. 4507!" A/*/st
24" #99!5 225 %2RA 562
Posted by Pius o!ados o" #o$e%be! 10& 2011
(Labor Standards Fringe benefits not included in 13
th
month pay)
$acts- Respondent )L. for and in beha"f of a"" the ran4:and:("e wor4ers
and emp"o'ees of petitioner so&ht to recover from the "atter the
1/
th
month pa' di=erentia" for 198+ of said emp"o'ees, e<&iva"ent to their
sic4, vacation and maternit' "eaves, premi&m for wor4 done on rest da's
and specia" ho"ida's, and pa' for re&"ar ho"ida's which petitioner,
a""eed"' in disreard of compan' practice since 19G5, e1c"&ded from the
comp&tation of the 1/
th
month pa' for 198+*
.ss/e- FON in the comp&tation of the 1/
th
month pa' &nder P9 No* 851,
pa'ments for sic4, vacation and maternit' "eaves, premi&ms for wor4
done on rest da's and specia" ho"ida's, and pa' for re&"ar ho"ida's ma'
be e1c"&ded in the comp&tation and pa'ment thereof*
0e'd- Oes* Basic sa"ar' does not mere"' e1c"&de the bene(ts e1press"'
mentioned b&t a"" pa'ments which ma' be in the form of frine bene(ts or
a""owances*
Sec* C of the S&pp"ementar' R&"es and Re&"ations Amp"ementin P9 No*
851 provides that Movertime pa', earnins and other rem&nerations which
are not part of the basic sa"ar' sha"" not be inc"&ded in the comp&tation of
the 1/
th
month pa'*
Fhatever compensation an emp"o'ee receives for an 8 ho&r wor4 dai"' or
the dai"' wae rate is the basic sa"ar'* )n' compensation or rem&neration
other than the dai"' wae rate is e1c"&ded* At fo""ows therefore, that
pa'ments for sic4, vacation and maternit' "eaves, premi&ms for wor4
done on rest da's and specia" ho"ida's, as we"" as pa' for re&"ar ho"ida's,
are "i4ewise e1c"&ded in comp&tin the basic sa"ar' for the p&rpose of
determinin the 1/
th
month pa'*
PA'$'//'!) D#/$'-%1+&", I!-. *". NLRC, 251 SCRA 382 (199,)
6Labor Standards D Commissions inc"&ded in the comp&tation of 1/th
month pa'7
F%-1" Petitioner Corporation pa's its sa"esmen a sma"" (1ed or
&aranteed waeI the reater part of the "atterEs waes or sa"aries bein
composed of the sa"es or incentive commissions earned on act&a" sa"es of
d&p"icatin machines c"osed b' them* >h&s the sa"es commissions
received for ever' d&p"icatin machine so"d constit&ted part of the basic
compensation or rem&neration of the sa"esmen of the Phi"ippine
9&p"icators for doin their ?ob*
>he Labor )rbiter directed Petitioner 9&p"icators to pa' 1/th month pa' to
private respondent emp"o'ees comp&ted on the basis of their (1ed waes
p"&s sa"es commission*
Sec* C of the S&pp"ementar' R&"es and Re&"ations Amp"ementin P9 No*
851 6Revised !&ide"ines Amp"ementin 1/th 0onth Pa'7 provides that
overtime pa', earnin and other rem&neration which are not part of the
basic sa"ar' sha"" not be inc"&ded in the comp&tation of the 1/th month
pa'*
Petitioner Corporation contends that their sa"es commission sho&"d not be
inc"&ded in the comp&tation of the 1/th month pa' invo4in the
conso"idated cases of Boie:>a4eda Chemica"s, Anc* vs $on* 9ionisio de"a
Serna and Phi"ippine ;&?i Yero1 Corp* vs $on* Crecencio >ra?ano, were the
so:ca""ed commissions of medica" representatives of Boie:>a4eda
Chemica"s and ran4:and:("e emp"o'ees of ;&?i Yero1 Co* were not inc"&ded
in the term Mbasic sa"ar'N in comp&tin the 1/th month pa'*
I""#) FON sa"es commissions comprisin a pre:determined percent of
the se""in price of the oods are inc"&ded in the comp&tation of the 1/th
month pa'*
H)$0 Oes* >hese commission which are an intera" part of the basic sa"ar'
str&ct&re of the Phi"ippine 9&p"icatorEs emp"o'ees:sa"esmen, are not
overtime pa'ments, nor pro(t:sharin pa'ments nor an' other frine
bene(t* >h&s, sa"esmenEs commissions comprisin a pre:determined
percent of the se""in price of the oods were proper"' inc"&ded in the
term Mbasic sa"ar'N for p&rposes of comp&tin the 1/th month pa'*
Commissions of medica" representatives of Boie:>a4eda Chemica"s and
ran4:and:("e emp"o'ees of ;&?i Yero1 Co* were not inc"&ded in the term
Mbasic sa"ar'N beca&se these were paid as Mprod&ctivit' bon&sesN which is
not inc"&ded in the comp&tation of 1/th month pa'*
D+$) PA'$'//'!)", I!-. *" L)+8%&0+, J&., G. R. N+. 62218, O-1+4)&
23, 19827 117 SCRA 938
(Labor Standards Employer paying a yearend bonus less than 1!1"
th
of the basic
pay re#uired under the law, can pay its difference)
$acts- S>)N;ALCO, a compan' mered with petitioner 9o"e Phi"ippines, inc
entered into a co""ective barainin areement with the )ssociated Labor
.nion* >he CB) provided amon others, the rant of a 'ear:end
prod&ctivit' bon&s to a"" wor4ers within the co""ective barainin &nit* >he
compan' arees to rant each wor4er within the barainin &nit a 'ear:
end prod&ctivit' bon&s e<&iva"ent to ten da's of his basic dai"' wae if
eiht' percent or more of the averae tota" prod&ction for the two
precedin ca"endar 'ears toether with the c&rrent 'earEs estimate is
attained*
>hereafter, P9 851 too4 e=ect* Section 1 thereof re<&ired a"" emp"o'ers to
pa' their emp"o'ees receivin a basic sa"ar' of not more than P1,555 a
month, reard"ess of the nat&re of their emp"o'ment, a 1/
th
month pa' not
"ater than 9ecember +C of ever' 'ear* Section +, however e1empted from
its coverae those emp"o'ers a"read' pa'in their emp"o'ees a 1/
th
month
pa' or its e<&iva"ent*
Sec* / of >he R&"es and re&"ations Amp"ementin P9 851 provides that
the term Mits e<&iva"entN sha"" inc"&de Christmas bon&s, mid:'ear bon&s,
pro(t sharin pa'ments and other cash bon&ses amo&ntin to not "ess
than 131+
th
of the basic sa"ar' b&t sha"" not inc"&de cash and stoc4
dividends, cost of "ivin a""owances and other a""owances re&"ar"'
en?o'ed b' the emp"o'ees as we"" as non:monetar' bene(ts* >he r&"es
f&rther added that where an emp"o'er pa's "ess than 131+
th
of the
emp"o'eeEs basic sa"ar', the emp"o'er sha"" pa' the di=erence*
Comp"'in with the provision of P9 851 and re"'in on the interpretation
of section + b' the 0OLHEs imp"ementin r&"es, S>)N;ALCO paid its
wor4ers the di=erence between 131+
th
of their 'ear"' basic sa"ar' and their
'ear:end prod&ctivit' bon&s* Respondent )L., ?oined b' petitionerEs
emp"o'ees ("ed a comp"aint for the non:imp"ementation of the CB)
provision on the 'ear:end prod&ctivit' bon&s*
.ss/e- FON prod&ctivit' bon&s areed in the CB) is demandab"e aside
from the 1/
th
month pa' provided for in the P9 851*
0e'd- No* Oear:end prod&ctivit' bon&s ranted b' petitioner to private
respondents p&rs&ant to their CB) is, in "ea" contemp"ation, an intera"
part of their 1/
th
month pa', notwithstandin its conditiona" nat&re* An
comp"'in with P9 851, petitioner credited the 'ear:end prod&ctivit'
bon&s as part of the 1/
th
month pa' and adopted the proced&re of pa'in
on"' the di=erence between said bon&s and 131+
th
of the wor4erEs 'ear"'
basic sa"ar', it acted we"" within the "etter and spirit of the "aw and its
imp"ementin r&"es* ;or in the event that an emp"o'er pa's "ess than
131+
th
of the emp"o'eesE basic sa"ar', a"" that the said emp"o'er is re<&ired
to do &nder the "aw is to pa' the di=erence*