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- HOURS WORKED. Hours worked shall be
a) All time during which an employee is required to be on duty or to be at a prescribed
workplace, and
b) All time during which an employee is suffered or permitted to work.
Rest periods of short duration during work hours shall be counted as hours worked.
Rest periods of short duration
- Rest periods of short duration during work hours shall be counted as hours worked (Art. 84)
4 instances or principles of Hours worked
1. All hours are hours worked which the employee is required to give his employer,
REGARDLESS of whether or not such hours are spent in productive labor or involve physical
or mental exertion
2. An employee need not leave the premises of the workplace in order that his rest period
shall not be counted, it being enough that he stops working, may rest completely and may
leave his workplace, to go elsewhere, whether within or outside the premises of his
3. If the work performed was necessary, or it benefitted the employer, or the employee
could not abandon his work at the end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as hours worked, if the work
was with the knowledge of his employer or immediate supervisor
4. The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered time either if the imminence of the resumption of
work requires the employees presence at the place of work or if the interval is too brief to
be utilized effectively and gainfully in the employees own interest.
If the employee could not abandon his work because he has no replacement
- (one of the principles in determining whether the time spent by an employee is considered
hours worked)
- Rule: all time spent for such work shall be considered as hours worked, if the work was with
the knowledge of his employer or immediate supervisor
Company time
Interruption on his work
- The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered time either if the imminence of the resumption of
work requires the employees presence at the place of work or if the interval is too brief to
be utilized effectively and gainfully in the employees own interest.
Preliminary and postliminary activities
- Preliminary- before work
- Postliminary- after actual work
- RULE: deemed performed during work hours, where such activities are controlled or
required by the employer and are pursued necessarily and primarily for the employers
Waiting hours when considered compensable
- Waiting time spent by an employee shall be considered as working time it waiting is
considered an integral part of his work or if the employee is required or engaged by an
employer to wait.
Meal period

- The employee must be completely relieved from duty for the purpose of eating regular
meals. If this is the case, meal time is not compensable.
- EXCEPTION: the employee is not relieved if he is required to perform his duties, whether
active or inactive, while eating. (Compensable)
- Noncompensable meal break is free time. If not, then compensable, whether the worker is
able to eat or not.
While sleeping
- A worker sleeping may be working.
- Whether sleeping time allowed an employee will be considered as part of his working time
will depend upon the express or implied agreement of the parties. In the absence of
agreement, it will depend upon the nature of the service and its relation to the working time.
- RULE: Sleeping time may be considered working time if it is subject to serious interruption
or takes place under conditions substantially less desirable than would be likely to exist at
the employees home.
- HOWEVER, sleeping time will not be regarded as working time if there is an opportunity for
comparatively uninterrupted sleep under fairly desirable conditions, even though the
employee is required to remain on or near the employers premises and must hold himself in
readiness for a call to action employment.
Working on call
- An employee who is required to remain on call on the employers premises or so close
thereto that he cannot use the time effectively for his own purposes is working while on
- An employee who is not required to remain on the employers premises but is merely
required to leave words at his home or with company officials where he may be reached is
not working while on call.
For public health workers,
- the time when a public health worker is place on On Call status shall not be considered
as hours worked but shall entitle the public health worker to an On Call pay equivalent to
50% of his/her regular wage. On call status refers to a condition when public health
workers are called upon to respond to urgent or immediate need for health/medical
assistance or relief work during emergencies such that he/she cannot devote the time for
his/her own use. (Sec. 15, RA 7305)
Travel time
- Time spent in traveling has been held to constitute working time within the overtime
provisions of the Fair Labor Standards Act under some circumstances.
1. Travel from home to work Normal travel from home to work is not worktime. But when
an employee receives an emergency call outside of his regular working hours and is required
to travel to his regular place of business or some other work site, all of the time spent in
such travel is working time.
2. Travel that is all in days work Time spent by an employee in travel as part of his
principal activity, such as travel from jobsite to jobsite during the workday, must be counted
as hours worked.
3. Travel away from home Travel that keeps an employee away from home overnight is
travel away from home.
- Travel away from home is worktime when it cuts across the employees workday. The time
is hours worked not only on a regular working days during normal working hours but also
during the corresponding hours on nonworking days.
Lectures, trainings, meetings, programs

- Attendance in such need not be counted as working time if the following criteria are met:
1. Attendance is outside of the employees regular working hours
2. Attendance is in fact voluntary
3. The employee does not perform any productive work during such attendance.
Semestral Break
- Regular full-time monthly paid teachers in a private school are entitled to salary and
emergency cost-of-living allowance during semestral break. (Read University of Pangasinan
Faculty Union vs. University of Pangasinan)
Work hours of Seamen
- A labourer need not leave the premises of the factory, shop or boat in order that his period
of rest shall not be counted, it being enough that he ceases to work, may rest completely
and leave or may leave at his will the spot where he actually stays while working, to go
somewhere else, whether within or outside the premises of said factory, shop or boat..
- A worker is entitled to overtime pay only for work in actual service beyond eight hours.
Who has the burden of proof in determining hours worked?
- When an employer alleges that his employee works less than the normal hours of
employment as provided for in the law, he bears the burden of proving his allegation with
clear and satisfactory evidence.
Meal periods can be shortened
GENERAL RULE: not less than 1 hour time-off for regular meals non-compensable
Except: meal period of not less than 20 mins. in the following cases compensable hours
1. Where the work is non-manual work in nature or does not involve strenuous physical
2. Where the establishment regularly operates not less than 16 hours a day
3. In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer
4. Where the work is necessary to prevent serious loss of perishable goods
Shortened meal periods upon employees request
The employees themselves may request that their meal period be shortened so that they
can leave work earlier than the previously established schedule.
The shortened period is not compensable.
The DOLE in allowing such arrangement, imposes, certain conditions (see p. 291)
Diminution of salary and benefits
Night Shift Differential (NSD) every employee shall be paid a night shift differential of not
less than 10% of his regular wage for each hour of work performed between ten oclock in
the evening and six oclock in the morning.
NSD = (10% x regular wage/hr.) x no. of hrs. of work between 10 pm 6 am
If work done between 10 pm and 6 am is OT work, the NSD should be based on the OT
Employees NOT Covered by NSD:
1. Those of the government and any of its political subdivisions, including governmentowned and/or controlled corporations

2. Those of retail and service establishments regularly employing not more than 5 workers
3. Domestic helpers and persons in the personal service of another
4. Managerial employees
5. Field personnel and other employees whose time and performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely commission
basis, or those who are paid a fixed amount for performing work irrespective of the time
consumed in the performance thereof
OT Pay
Overtime Pay (OT) is an additional pay for service or work rendered in excess of eight
hours a day by employees or laborers in employment covered by the Eight-hour Labor Law
OT on a Regular Day: regular wage + at least 25% thereof
OT on a Holiday/Eees Rest Day: rate of 1st 8 hrs. on holiday/rest day + at least 30%
thereof. Since the
OT work is considered hourly, the pay rate is computed also on per hour basis. The daily
wage is divided by 8 to get the hourly base rate.
Daily rate
If employee is paid on a monthly salary basis, the daily rate is obtained by the following
Daily Rate = (monthly salary x 12) / Total no of days considered paid in a year
Permissible for the employer to stipulate that the employees monthly salary constitutes
payment for all the days of the month, including rest days and holidays, where the
employees monthly salary, when converted by the increased divisor into its daily
equivalent, would still meet minimum wage.
Work Day
24-hr period commencing from the time an employee regularly starts to work regardless of
whether the work is broken or continuous
Undertime NOT Offset by OT an employees regular pay rate is lower than the OT rate.
Offsetting the undertime hours against the OT hours would result in undue deprivation of the
employees extra pay for OT work.
Right to OT pay cannot be waived. But when the alleged waiver of OT pay is in
consideration of benefits and privileges which may even exceed the OT pay, the waiver may
be permitted.
Instance when to render OT
Conditions to be entitled to OT pay:
1. Actual rendition of OT work
2. Submission of sufficient proof that said work was actually performed
3. OT work is with the knowledge and consent of the employer
Compulsory OT Work (provided employee paid the additional compensation required):
1. Country at war/National or Local
2. Emergency Completion of work started before the 8th hour and is necessary to prevent
serious obstruction or prejudice to the business
3. Urgent work to be performed on Machines to avoid serious loss or damage to employer
4. Necessary to Prevent loss of life/property or Imminent danger to public safety
5. Necessary to prevent loss or damage to perishable goods
6. Necessary to avail of favorable weather or environmental condition

Compressed Work Week (CWW)

the number of workdays is reduced but the number of work hours in a day is increased to
more than eight, but NO overtime pay may be claimed
an alternative arrangement whereby the normal workweek is reduced to less than six days
but the total number of work hours per week shall remain at 48 hours
Should the work shift revert to 8 hrs., the reversion shall not constitute a diminution of
Pay OT in CWW
Adoption of the CWW scheme is valid only if the conditions stated in the Advisory are
observed; otherwise overtime pay may still be claimed.
The conditions are:
1. The scheme is expressly and voluntarily supported by the majority of the employees
2. In firms using substances, or operating in conditions that are hazardous to health, a
certification is needed from an accredited safety organization or the firm's safety committee
that work beyond eight hours is within the limits or levels of exposure set by DOLE's
occupational safety and health standards.
3. The DOLE regional office is duty notified.
Flexible Work Arrangements (FWA)
is considered as a better alternative than the outright termination of the services of
employees or the closure of the establishment
It refers to an alternative arrangements or schedules other than the traditional or standard
work hours, workdays or workweek
Reduction of workdays
Where the normal workdays per week are reduced but should not last for more than six
Rotation of workers
Where the employees are rotated or alternately provided work within the workweek
Forced Leave
where the employees are required to go on leave for several days or weeks, utilizing their
leave credits if there are any

Broken Time
The minimum working hours fixed by the Act need not be continuous to constitute as the
legal working day of eight hours as long as the eight hours is within the working day. (Ex.
When an employee is required to work 4 hours in the morning and 4 hours in the evening)

(Under Flexible Work Arrangements) The employees agree to avail themselves of the
holidays at some other days. Provided that there is no diminution of existing benefits as a
result of such arrangement.

Undertime not offset by overtime

Where a worker incurs undertime hours during his regular holiday work, said undertime hour
should not be offset against the overtime hours. The proper method is to deduct the
undertime hours from the accrued leave to pay the employees overtime compensation to
which he is entitled.

Emergency Overtime work exceptions

An employee may be so required to work overtime in any of the following cases:
-When the country is at war or when any other national or local emergency has been
declared by National

Assembly of Chief Executive

-When it is necessary to prevent loss of life or property or in case of imminent danger to
public safety due to an actual or impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity
-When the work is necessary to prevent loss or damage to perishable goods
- Where the completion or continuation of the work started before the eighth hour is
necessary to prevent serious obstruction or prejudice to the business or operations f the

Weekly Rest
It is the duty of the employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than 24 consecutive hours after every 6 consecutive
normal work days.

Who determines rest day

The employer shall determine and schedule the weekly rest day subject to collective
bargaining agreement and to such rules and regulations as the Sec of Labor may provide.

The employer shall also respect the preference of the employees as to their weekly rest day
if such preference is based on religious grounds.

When employer may require work on rest day

The employer may require work his employees to work on any day:
-In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon,
earthquake, epidemic, or other disaster or calamity to prevent loss of life and property, or
imminent danger to public safety
- In cases of urgent work to be performed on the machinery, equipment, or installation, to
avoid serious loss which the employer may suffer
-To prevent loss or damage to perishable goods
-Where the nature of the work requires continuous operations and the stoppage of work may
result in irreparable injury or loss to the employer
-Under other circumstances analogous or similar to the foregoing as determined by the Sec
of Labor

When rest day cannot be determined

When the nature of the work of the employees is such that he has no regular workdays and
no regular workdays can be scheduled, he shall be paid an additional compensation of
atleast 30% of his regular wage for work performed on Sundays and holidays.

Premium Pay
Premium pay refers to the additional compensation required by law to be paid to employees
for work performed on working days, such as rest days and special holidays.

Special Holiday plus rest day

Where the employee works on special holiday falling on his rest day, he shall be entitled to
an additional compensation of at least 50% of his basic wage rate, or a total of 150%

Holiday Pay

Special non-working holiday

-no pay if employee does not work on such day
-plus 30% to basic wage rate if employee works on such day, hence, 130%

Regular Holiday
-100% of basic wage rate if employee does not work on such day
-plus 100% to basic wage rate if employee works on such day, hence, 200%

Who are not entitled to holiday pay?

- field personnel
- Retail and establishments regularly employing less than 10 workers.

Who are field personnel?

Field personnel are non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose actual hours of
work in the field cannot be determined.
Purpose of Holiday Pay
On holidays, being days of rest and cessation from work, laborers are given the opportunity
to satisfy their mental, moral and spiritual needs. A laborer deprived of that opportunity to
satisfy those needs when he is compelled to work during holidays, and it is that deprivation
which the law seeks to compensate in requiring the employers to give additional
compensation for service rendered by their laborers during those days.


On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of salaries and
other labor standard benefits. He alleged that he was an employee of Fly Ace since
September 2007, performing various tasks at the respondents warehouse such as cleaning
and arranging the canned items before their delivery to certain locations, except in
instances when he would be ordered to accompany the companys delivery vehicles, as
pahinante; that he reported for work from Monday to Saturday from 7:00 oclock in the
morning to 5:00 oclock in the afternoon; that during his employment, he was not issued an
identification card and payslips by the company; that on May 6, 2008, he reported for work
but he was no longer allowed to enter the company premises by the security guard upon the
instruction of Ruben Ong (Mr. Ong), his superior;[5] that after several minutes of begging to
the guard to allow him to enter, he saw Ong whom he approached and asked why he was
being barred from entering the premises; that Ong replied by saying, Tanungin mo anak
mo; [6] that he then went home and discussed the matter with his family; that he
discovered that Ong had been courting his daughter Annalyn after the two met at a fiesta
celebration in Malabon City; that Annalyn tried to talk to Ong and convince him to spare her
father from trouble but he refused to accede; that thereafter, Javier was terminated from his
employment without notice; and that he was neither given the opportunity to refute the
cause/s of his dismissal from work.
To support his allegations, Javier presented an affidavit of one Bengie Valenzuela who
alleged that Javier was a stevedore or pahinante of Fly Ace from September 2007 to January
2008. The said affidavit was subscribed before the Labor Arbiter (LA).[7]
For its part, Fly Ace averred that it was engaged in the business of importation and sales of
groceries. Sometime in December 2007, Javier was contracted by its employee, Mr. Ong, as
extra helper on a pakyaw basis at an agreed rate of 300.00 per trip, which was later
increased to 325.00 in January 2008. Mr. Ong contracted Javier roughly 5 to 6 times only in
a month whenever the vehicle of its contracted hauler, Milmar Hauling Services, was not
available. On April 30, 2008, Fly Ace no longer needed the services of Javier. Denying that
he was their employee, Fly Ace insisted that there was no illegal dismissal.[8] Fly Ace
submitted a copy of its agreement with Milmar Hauling Services and copies of
acknowledgment receipts evidencing payment to Javier for his contracted services bearing
the words, daily manpower (pakyaw/piece rate pay) and the latters signatures/initials.
Whether or not the petitioner is a regular employee of the respondent.
No. The Court affirms the assailed CA decision.
It must be noted that the issue of Javiers alleged illegal dismissal is anchored on the
existence of an employer-employee relationship between him and Fly Ace. This is essentially
a question of fact. the onus probandi falls on petitioner to establish or substantiate such
claim by the requisite quantum of evidence. Whoever claims entitlement to the benefits
provided by law should establish his or her right thereto x x x. Sadly, Javier failed to adduce
substantial evidence as basis for the grant of relief.
In this case, the LA and the CA both concluded that Javier failed to establish his employment
with Fly Ace. By way of evidence on this point, all that Javier presented were his self-serving
statements purportedly showing his activities as an employee of Fly Ace. Clearly, Javier
failed to pass the substantiality requirement to support his claim. Hence, the Court sees no

reason to depart from the findings of the CA. The Court is of the considerable view that on
Javier lies the burden to pass the well-settled tests to determine the existence of an
employer-employee relationship, viz: (1) the selection and engagement of the employee; (2)
the payment of wages; (3) the power of dismissal; and (4) the power to control the
employees conduct. Of these elements, the most important criterion is whether the
employer controls or has reserved the right to control the employee not only as to the result
of the work but also as to the means and methods by which the result is to be accomplished.
In this case, Javier was not able to persuade the Court that the above elements exist in his
case. He could not submit competent proof that Fly Ace engaged his services as a regular
employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what
his conduct should be while at work. In other words, Javiers allegations did not establish
that his relationship with Fly Ace had the attributes of an employer-employee relationship on
the basis of the above-mentioned four-fold test.
The Courts decision does not contradict the settled rule that payment by the piece is just a
method of compensation and does not define the essence of the relation.[37] Payment on
a piece-rate basis does not negate regular employment. The term wage is broadly defined
in Article 97 of the Labor Code as remuneration or earnings, capable of being expressed in
terms of money whether fixed or ascertained on a time, task, piece or commission basis.
Payment by the piece is just a method of compensation and does not define the essence of
the relations. Nor does the fact that the petitioner is not covered by the SSS affect the
employer-employee relationship. However, in determining whether the relationship is that
of employer and employee or one of an independent contractor, each case must be
determined on its own facts and all the features of the relationship are to be
considered.[38] Unfortunately for Javier, the attendant facts and circumstances of the
instant case do not provide the Court with sufficient reason to uphold his claimed status as
employee of Fly Ace.


It is not for an employee to prove non-payment of benefits to which he is entitled by law.
Rather, it is on the employer that the burden of proving payment of these claims rests.
Canoy and Pigcaulan were both employed by SCII as security guards and were assigned to
SCIIs different clients. Subsequently, however, Canoy and Pigcaulan filed with the Labor
Arbiter separate complaints[7] for underpayment of salaries and non-payment of overtime,
holiday, rest day, service incentive leave and 13th month pays. These complaints were later
on consolidated as they involved the same causes of action.
Canoy and Pigcaulan, in support of their claim, submitted their respective daily time
records reflecting the number of hours served and their wages for the same. They likewise
presented itemized lists of their claims for the corresponding periods served.
Respondents, however, maintained that Canoy and Pigcaulan were paid their just salaries
and other benefits under the law; that the salaries they received were above the statutory
minimum wage and the rates provided by the Philippine Association of Detective and
Protective Agency Operators (PADPAO) for security guards; that their holiday pay were
already included in the computation of their monthly salaries; that they were paid additional
premium of 30% in addition to their basic salary whenever they were required to work on
Sundays and 200% of their salary for work done on holidays; and, that Canoy and Pigcaulan
were paid the corresponding 13th month pay for the years 1998 and 1999. In support
thereof, copies of payroll listings[8] and lists of employees who received their 13th month
pay for the periods December 1997 to November 1998 and December 1998 to November
1999[9] were presented. In addition, respondents contended that Canoys and Pigcaulans
monetary claims should only be limited to the past three years of employment pursuant to
the rule on prescription of claims.
Whether or not Pigcaulan should be granted overtime pay.
Whether or not Pigcaulan is entitled to holiday pay, service incentive leave pay and
proportionate 13th month pay for year 2000
1. No. The Labor Arbiter ordered reimbursement of overtime pay, holiday pay, service
incentive leave pay and 13th month pay for the year 2000 in favor of Canoy and Pigcaulan.
The Labor Arbiter relied heavily on the itemized computations they submitted which he
considered as representative daily time records to substantiate the award of salary
differentials. The NLRC then sustained the award on the ground that there was substantial
evidence of underpayment of salaries and benefits.
We find that both the Labor Arbiter and the NLRC erred in this regard. The
handwritten itemized computations are self-serving, unreliable and unsubstantial evidence
to sustain the grant of salary differentials, particularly overtime pay. Unsigned and
unauthenticated as they are, there is no way of verifying the truth of the handwritten entries
stated therein. Written only in pieces of paper and solely prepared by Canoy and Pigcaulan,
these representative daily time records, as termed by the Labor Arbiter, can hardly be
considered as competent evidence to be used as basis to prove that the two were underpaid
of their salaries.
We find nothing in the records which could substantially support
Pigcaulans contention that he had rendered service beyond eight hours to entitle him to
overtime pay and during Sundays to entitle him to restday pay. Hence, in the absence of

any concrete proof that additional service beyond the normal working hours and days had
indeed been rendered, we cannot affirm the grant of overtime pay to Pigcaulan.
2. Yes. Article 94 of the Labor Code provides that:
ART. 94. RIGHT TO HOLIDAY PAY. (a) Every worker shall be paid his regular daily wage
during regular holidays, except in retail and service establishments regularly employing less
than ten (10) workers;
While Article 95 of the Labor Code provides:
ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE. (a) Every employee who has rendered at
least one year of service shall be entitled to a yearly service incentive of five days with pay.
Under the Labor Code, Pigcaulan is entitled to his regular rate on holidays even if he does
not work.[30] Likewise, express provision of the law entitles him to service incentive leave
benefit for he rendered service for more than a year already.
Furthermore, under
Presidential Decree No. 851,[31] he should be paid his 13th month pay. As employer, SCII
has the burden of proving that it has paid these benefits to its employees.[32]
SCII presented payroll listings and transmittal letters to the bank to show that Canoy and
Pigcaulan received their salaries as well as benefits which it claimed are already integrated
in the employees monthly salaries. However, the documents presented do not prove SCIIs
allegation. SCII failed to show any other concrete proof by means of records, pertinent files
or similar documents reflecting that the specific claims have been paid. With respect to
13th month pay, SCII presented proof that this benefit was paid but only for the years 1998
and 1999. To repeat, the burden of proving payment of these monetary claims rests on SCII,
being the employer. It is a rule that one who pleads payment has the burden of proving it.
Even when the plaintiff alleges non-payment, still the general rule is that the burden rests
on the defendant to prove payment, rather than on the plaintiff to prove non-payment.[33]
Since SCII failed to provide convincing proof that it has already settled the claims, Pigcaulan
should be paid his holiday pay, service incentive leave benefits and proportionate 13th
month pay for the year 2000.

Consistent with the rule that all money claims arising from an employer-employee
relationship shall be filed within three years from the time the cause of action accrued,[34]
Pigcaulan can only demand the amounts due him for the period within three years preceding
the filing of the complaint in 2000. Furthermore, since the records are insufficient to use as
bases to properly compute Pigcaulans claims, the case should be remanded to the Labor
Arbiter for a detailed computation of the monetary benefits due to him.


Respondent Dr. Dean N. Climaco is a medical doctor who was hired by petitioner CocaCola Bottlers Phils., Inc (Coca-Cola), by virtue of a Retainer Agreement. The Retainer
Agreement, which began on January 1, 1988, was renewed annually. The last one expired
December 31, 1993. Despite the non-renewal of the Retainer Agreement, respondent
continued to perform his functions as company doctor to Coca-Cola until he received a letter
from Petitioner Company concluding their retainership agreement. It is noted that as early as
September 1992, petitioner was already making inquiries regarding his status with Petitioner
Company. Petitioner Company, however, did not take any action. Respondent inquired from
the management of Petitioner Company whether it was agreeable to recognize him as a
regular employee. The management refused to do so.
Respondent filed a Complaint before the NLRC seeking recognition as a regular
employee of Petitioner Company and prayed for the payment of all benefits of a regular
employee. While the complaint was pending before the Labor Arbiter, respondent received a
letter from Petitioner Company concluding their retainership agreement effective 30 days
from receipt thereof. This prompted respondent to file a complaint for illegal dismissal
against Petitioner Company. Respondent contend. The Labor Arbiter and NLRC declared that
there is no employer-employee relationship existed between the parties. However, the Court
of Appeals declared that respondent should be classified as a regular employee having
rendered 6 years of service as plant physician by virtue of several renewed retainer
WON the termination of respondent's employment is illegal.
No. Considering that there is no employer-employee relationship between the parties,
the termination of the Retainership Agreement, which is in accordance with the provisions of
the Agreement, does not constitute illegal dismissal of respondent. Consequently, there is no
basis for the moral and exemplary damages granted by the Court of Appeals to respondent
due to his alleged illegal dismissal.


Dumpit was hired by ABC as a newscaster in 1995. Her contract with the TV station
was repeatedly renewed until 1999. She then wrote Jose Javier (VP for News and Public
Affairs of ABC) advising him of her intention to renew the contract. However, Javier did not
Dumpit then demanded reinstatement as well as her backwages, service incentive
leave pays and other monetary benefits. ABC said they could only pay her backwages but
her other claims had no basis as she was not entitled thereto because she is considered as a
talent and not a regular employee.
WON the petitioner was illegally dismissed.
Yes. It does not appear that the employer and employee dealt with each other on
equal terms. Understandably, the petitioner could not object to the terms of her
employment contract because she did not want to lose the job that she loved and the
workplace that she had grown accustomed to, which is exactly what happened when she
finally manifested her intention to negotiate.
Being one of the numerous
newscasters/broadcasters of ABC and desiring to keep her job as a broadcasting practitioner,
petitioner was left with no choice but to affix her signature of conformity on each renewal of
her contract as already prepared by private respondents; otherwise, private respondents
would have simply refused to renew her contract. Patently, the petitioner occupied a
position of weakness vis--vis the employer. Moreover, private respondents practice of
repeatedly extending petitioners 3-month contract for four years is a circumvention of the
acquisition of regular status. Hence, there was no valid fixed-term employment between
petitioner and private respondents.
The Court has recognized the validity of fixed-term employment contracts in a number
of cases, it has consistently emphasized that when the circumstances of a case show that
the periods were imposed to block the acquisition of security of tenure, they should be
struck down for being contrary to law, morals, good customs, public order or public policy. As
a regular employee, petitioner is entitled to security of tenure and can be dismissed only for
just cause and after due compliance with procedural due process. Since private respondents
did not observe due process in constructively dismissing the petitioner, there was an illegal


Respondents alleged that they were employed as drama talents by DYWB-Bombo
Radyo, a radio station owned and operated by petitioner Consolidated Broadcasting System,
Inc. They reported for work daily for six days in a week and were required to record their
drama production in advance. Some of them were employed by petitioner since 1974, while
the latest one was hired in 1997. Their drama programs were aired not only
in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao areas.
Sometime in August 1998, petitioner reduced the number of its drama productions
from 14 to 11, but was opposed by respondents. After the negotiations failed, the latter
sought the intervention of the Department of Labor and Employment (DOLE), which
on November 12, 1998, conducted through its Regional Office, an inspection of DWYB
station. The results thereof revealed that petitioner is guilty of violation of labor standard
laws, such as underpayment of wages, 13 th month pay, non-payment of service incentive
leave pay, and non-coverage of respondents under the Social Security System.
Petitioner contended that respondents are not its employees and refused to submit
the payroll and daily time records despite the subpoena duces tecum issued by the DOLE
Regional Director. Petitioner further argued that the case should be referred to the NLRC
because the Regional Director has no jurisdiction over the determination of the existence of
employer-employee relationship which involves evidentiary matters that are not verifiable in
the normal course of inspection.
Vexed by the respondents complaint, petitioner allegedly pressured and intimidated
respondents. Respondents Oberio and Delta were suspended for minor lapses and the
payment of their salaries were purportedly delayed. Eventually, on February 3, 1999,
pending the outcome of the inspection case with the Regional Director, respondents were
barred by petitioner from reporting for work; thus, the former claimed constructive dismissal.
directing petitioner to pay respondents a total of P318,986.74
nonpayment/underpayment of the salary and benefits due them. However, on July 8, 1999, the
Regional Director reconsidered the April 8, 1999 order and certified the records of the case
to the NLRC, Regional Arbitration Branch VI, for determination of employer-employee
relationship. Respondents appealed said order to the Secretary of Labor.
On October 12, 1999, respondents filed a case for illegal dismissal,
petitioner. On April 10, 2000, the Labor Arbiter dismissed the case without prejudice while
waiting for the decision of the Secretary of Labor on the same issue of the existence of an
employer-employee relationship between petitioner and respondents.
On appeal to the NLRC, respondents raised the issue of employer-employee
relationship and submitted the following to prove the existence of such relationship, to wit:
time cards, identification cards, payroll, a show cause order of the station manager to
respondent Danny Oberio and memoranda either noted or issued by said
manager. Petitioner, on the other hand, did not present any documentary evidence in its
behalf and merely denied the allegations of respondents. It claimed that the radio station
pays for the drama recorded by piece and that it has no control over the conduct of
WON their dismissal was illegal.


Yes. The Supreme Court ruled that respondents were illegally dismissed. In labor
cases, the employer has the burden of proving that the dismissal was for a just cause; failure
to show this would necessarily mean that the dismissal was unjustified and, therefore,
illegal. To allow an employer to dismiss an employee based on mere allegations and
generalities would place the employee at the mercy of his employer; and the right to
security of tenure, which this Court is bound to protect, would be unduly emasculated. In
this case, petitioner merely contended that it was respondents who ceased to report to work,
and never presented any substantial evidence to support said allegation. Petitioner
therefore failed to discharge its burden, hence, respondents were correctly declared to have
been illegally dismissed.
Furthermore, if doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter the employer must
affirmatively show rationally adequate evidence that the dismissal was for a justifiable
cause. It is a time-honored rule that in controversies between a laborer and his master,
doubts reasonably arising from the evidence should be resolved in the formers favor. The
policy is to extend the doctrine to a greater number of employees who can avail of the
benefits under the law, which is in consonance with the avowed policy of the State to give
maximum aid and protection of labor.
When a person is illegally dismissed, he is entitled to reinstatement without loss of
seniority rights and other privileges and to his full backwages. In the event, however, that
reinstatement is no longer feasible, or if the employee decides not to be reinstated, the
employer shall pay him separation pay in lieu of reinstatement. Such a rule is likewise
observed in the case of a strained employer-employee relationship or when the work or
position formerly held by the dismissed employee no longer exists. In sum, an
illegally dismissed employee is entitled to: (1) either reinstatement if viable or separation
pay if reinstatement is no longer viable, and (2) backwages. In the instant controversy,
reinstatement is no longer viable considering the strained relations between petitioner and
respondents. As admitted by the latter, the complaint filed before the DOLE strained their
relations with petitioner who eventually dismissed them from service. Payment of
separation pay instead of reinstatement would thus better promote the interest of both
Respondents separation pay should be computed based on their respective one (1)
month pay, or one-half (1/2) month pay for every year of service, whichever is
higher, reckoned from their first day of employment up to finality of this decision. Full
backwages, on the other hand, should be computed from the date of their dismissal until the
finality of this decision.


Petitioner in this case sought to represent all rank-and-file promo employees of
respondent. It alleged that said group of employees is not represented by a Union. So, they
filed a petition for certification election before the Department of Labor and Employment.
Respondent, however, opposed said petition on the ground that there exists no employeremployee relation between the parties. Respondent here further claimed that the employees
sought to be represented by petitioner are not their employees but the employees of F. Garil
Manpower Services, a duly licensed local employment agency.

WON there is employer-employee relationship between respondent and the

employees sought to be represented by petitioner.

No. The Supreme Court stressed the "four-fold test" in determining the existence of
employer-employee relationship. The elements to determine the existence of an
employment relationship are: 1. the selection and engagement of the employee 2. the
payment of wages 3. the power of dismissal and 4. the employer's power to control the
employee's conduct
The most important element is the last element. That is, the employer controls the
conduct of an employee not only as to the result of the work to be done, but also as to the
means and methods to accomplish it. It bears stressing that the facts of the case clearly
indicate the existence of employer-employee relationship. The involvement of F. Garil, the
employment agency, is limited only to the recruitment aspect. Furthermore, despite of the
presence of a stipulation agreed into by the employment agency and herein respondent to
the extent that the rank-and-file employees are considered as the employees of the former,
the Supreme Court held that said contractual stipulation cannot override factual
circumstances firmly establishing the legal existence of an employer-employee relationship.


In March 1996, Lebatique was hired as a driver by FAR EAST AGRICULTURAL SUPPLY,
INC. with a daily wage of P223.50. His job as a driver includes the delivery of animal feeds to
the clients of the company. He must report either in the morning or in the afternoon to make
the deliveries.
On January 24, 2000, Lebatique was suspended by Manuel Uy (brother of FEASIs
General Manager Alexander Uy) for allegedly using the company vehicle illegally. On the
same day, Lebatique filed a complaint for nonpayment of overtime pay against Alexander
Uy summoned Lebatique and asked why he was claiming overtime pay. Lebatique said
since he started working with the company he has never been paid OT pay. Uy consulted
with his brother. On January 29, 2000, Uy told Lebatique to look for another job.
Lebatique then filed an Illegal Dismissal case against the company. Uy argued that
Lebatique was not dismissed and that he was merely suspended; that he abandoned his job;
and that Lebatique was a field personnel not entitled to overtime pay and service incentive
WON Lebatique was illegally dismissed from his employment.
Yes. Uy illegally dismissed Lebatique when he told him to look for another job. Judging
at the sequence of event, Lebatique earned the ire of Uy when he filed a complaint for
nonpayment of OT pay on the day Lebatique was suspended by Manuel Uy. Such is not a
valid reason for dismissing Lebatique. Uy cannot therefore claim that he merely suspended
Further, Lebatique did not abandon his job. His filing of this case is proof enough that
he had no intention to abandon his job. To constitute abandonment as a just cause for
dismissal, there must be:
(a) absence without justifiable reason; and
(b) a clear intention, as manifested by some overt act, to sever the employer-employee
None of the above was proven by Uy.

Pacific Consultants v. Schonfeld

Klaus Schonfeld, a Canadian citizen, had been a consultant in the field of environmental
engineering and water supply and sanitation. Pacicon Philippines Inc., a subsidiary of Pacific
Consultants International of Japan, is a corporation with the primary purpose to engage in
the business of providing specialty and technical services both in and out of the Philippines.
The president of PPI, Jens Peter Henrichsen, who was also the director of PCIJ, was based in
Tokyo, Japan. Respondent was employed by PCIJ, through Henrichsen, as Sector Manager of
PPI in its Water and Sanitation Department. However, PCIJ assigned him as PPI sector
manager in the Philippines. Respondent arrived in the Philippines and assumed his position
as PPI Sector Manager. He was accorded the status of a resident alien. PPI applied for an
Alien Employment Permit for respondent before the DOLE and the DOLE granted the
application and issued the Permit to respondent. Respondent later received a letter from
Henrichsen informing him that his employment had been terminated for the reason that PCIJ
and PPI had not been successful in the water and sanitation sector in the Philippines.
Respondent filed with PPI several money claims. PPI partially settled some of his claims, but
refused to pay the rest. Respondent filed a Complaint for Illegal Dismissal. Petitioners aver
that since respondent is a Canadian citizen, the CA erred in ignoring their claim that the
principles of forum non conveniens and lex loci contractus are applicable. They also point
out that the contract of employment of respondent was executed in Tokyo. Moreover, under
Section 21 of the General Conditions for Employment incorporated in respondents letter of
employment, the dispute between respondent and PCIJ should be settled by the court of
arbitration of London. Petitioners insist that the U.S. Labor-Management Act applies only to
U.S. workers and employers, while the Labor Code applies only to Filipino employers and
Philippine-based employers and their employees, not to PCIJ. In fine, the jurisdictions of the
NLRC and Labor Arbiter do not extend to foreign workers who executed employment
agreements with foreign employers abroad, although "seconded" to the Philippines.
The petition is denied for lack of merit. The settled rule on stipulations regarding venue, as
held by this Court in the vintage case of Philippine Banking Corporation v. Tensuan, is that
while they are considered valid and enforceable, venue stipulations in a contract do not, as a
rule, supersede the general rule set forth in Rule 4 of the Revised Rules of Court in the
absence of qualifying or restrictive words. They should be considered merely as an
agreement or additional forum, not as limiting venue to the specified place. They are not
exclusive but, rather permissive. If the intention of the parties were to restrict venue, there
must be accompanying language clearly and categorically expressing their purpose and
design that actions between them be litigated only at the place named by them.
Petitioners insistence on the application of the principle of forum non conveniens must be
rejected. The bare fact that respondent is a Canadian citizen and was a repatriate does not
warrant the application of the principle for the following reasons: First. The Labor Code of the
Philippines does not include forum non conveniens as a ground for the dismissal of the
complaint. Second. The propriety of dismissing a case based on this principle requires a
factual determination; hence, it is properly considered as defense. Third. In Bank of America,

NT&SA, Bank of America International, Ltd. v. Court of Appeals, this Court held that: [a]
Philippine Court may assume jurisdiction over the case if it chooses to do so; provided, that
the following requisites are met: (1) that the Philippine Court is one to which the parties
may conveniently resort to; (2) that the Philippine Court is in a position to make an
intelligent decision as to the law and the facts; and, (3) that the Philippine Court has or is
likely to have power to enforce its decision.