You are on page 1of 15


160 SCRA 171; April 15, 1998
On the strength of a contract, Tourist World Service Inc. (TWS) leased the
premises belonging to Mrs. SegundinaNoguera for the former s use as a branch
office. Lina Sevilla bound herself solidarily liable with TWS for the prompt paymentof
the monthly rentals thereon. When the branch office was opened, it was run by
appellant Sevilla payable to TWS by anyairline for any fare brought in on the efforts
of Sevilla, 4% was to go to Sevilla and 3% was to be withheld by TWS.
TWS appears to have been informed that Sevilla was connected with a rival
firm, the Philippine Travel Bureau, and,since the branch office was anyhow losing,
the TWS considered closing down its office. Two resolutions of the TWS board
of directors were passed to abolish the office of the manager and vice president of
the branch office and authorizing thecorporate secretary to receive the properties in
the said branch office.
Subsequently, the corporate secretary went to the branch office, and finding
the premises locked and being unable tocontact Sevilla, padlocked the premises to
protect the interests of TWS.When neither Sevilla nor her employees could enter the
locked premises, she filed a complaint against TWS with aprayer for the issuance of
a mandatory preliminary injunction.
The trial court dismissed the case holding that TWS, being the true lessee,
was within its prerogative to terminate thelease and padlock the premises. It
likewise found that Sevilla was a mere employee of TWS and as such, was bound by
the actsof her employer.
The CA affirmed. Hence this petition.
1.Whether or not there was an employer-employee relationship between TWS and
1. NO. It was a principal-agent relationship. In this jurisdiction, there has been no
uniform test to determine the existence of an employer-employee relation. In
general, we have relied on the so-called right of control test, where the person
for whom the services are performed reserves a right to control not only the end to
be achieved but also the means to be used in reaching such end.
In addition, the existing economic conditions prevailing between the parties,
like the inclusion of the employee in the payrolls, are also considered in determining
the existence of an employer-employee relationship.
Sevilla was not subject to control by TWS either as to the result of the enterprise or
as to the means used in connection therewith. Under the contract of lease, Sevilla
bound herself in solidum for the rental payments; an arrangement that would belie
the claims of master-servant relationship for a true employee cannot be made to
part with his own money in pursuance of his employers business, or otherwise
assume liability thereof.

Also, Sevilla was not in the companys payroll. She retained 4% in commissions from
airline bookings, the remaining 3% going toTWS. Unlike an employee who usually
earns a fixed salary, she earned compensation in fluctuating amounts depending on
her booking successes.
The fact that Sevilla has been designated branch manager does not make her, ergo,
TWS employee. Employment is determined by the right of control test and
certain economic parameters. Titles are weak indicators.
When Sevilla agreed to man TWS Ermita branch office, she did so pursuant to a
contract of agency. It is the essence of this contract that the agent renders services
in representation or on behalf of another. In the case at bar, Sevilla solicited airline
fares, but she did so for and on behalf of her principal, TWS.

160 SCRA 568
The petitioner, Herminio Flores and his wife, worked for respondent,
Nuestro in his funeral parlor since June 1976 as helper-utility man and as
bookkeeper and cahier respectively.
On October 7, 1980, respondent registered the petitioner spouses with the
SSS, as
his employee. Thereafter, the spouses received an increase in their respective
On October 30, 1982, Herminio and Nuestro had an altercation, during which
latter physically assaulted the former.
Herminio then filed a complaint for physical injuries against Nuestro. As a
result of the incident, the Flores family had to leave their quarters at the funeral
parlor and seek protection from the Pilar, Bataan Police. Thereafter, petitioners filed
illegal dismissal charges against respondent. On the part of the respondent, he
denied the existence of employer-employee relationship, and further alleged that
petitioners were the ones to voluntarily abandon their work
1. Was there an employee-employer relationship in this case?
2. Do the actions of the petitioners constitute abandonment?
1. YES. There was an employee-employer relationship. That the respondent
registered the petitioners with the Social Security System is proof that they
were indeed his employees. The coverage of the Social Security Law is
predicated on the existence of an employer-employee relationship
2. NO. On the issue of abandonment, however, we find the ruling of the NLRC
that petitioners had abandoned their employment to be contrary to the
evidence. To constitute abandonment, there must be a clear and deliberate
intent to discontinue one's employment without any intention of returning
back. The record shows that petitioners were only compelled to leave the
premises, which they regarded as their home, when the respondent inflicted
physical injuries upon petitioner Herminio Flores. Apparently, what they had
given up was only their place of residence but not their jobs. The immediate
filing of a complaint for illegal dismissal against respondent with a prayer for
reinstatement shows that petitioners were not abandoning their work. As
aptly observed by the Solicitor General, to uphold the ruling of the
respondent Commission that the petitioners abandoned their job "is to put a
premium on the commission of a crime by an employer against an employee
to force the latter to leave his employment so as to preclude said employee
from seeking reinstatement with backwages."


166 SCRA 533, G.R. No. 76633, October 18, 1988
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed
in an accidentin Tokyo, Japan on March 15, 1985. His widow sued for damages under
Executive Order No. 797 and Memorandum Circular No. 2 of the POEA.
The petitioner, as owner of the vessel, argued that the complaint was
cognizable not by the POEA but by the Social Security System and should have been
filed against the State Fund Insurance. The POEA nevertheless assumed jurisdiction
and after considering the position papers of the parties ruled in favour of the
complainant and was awarded the sum of P192,000.00 by the POEA for the death of
her husband.
Whether or not the POEA had jurisdiction over the case as the husband was not an
Yes. The Philippine Overseas Employment Administration was created under
Executive Order No. 797, promulgated on May 1, 1982, to promote and monitor the
overseas employment of Filipinos and to protect their rights. It replaced the National
Seamen Board created earlier under Article 20 of the Labor Code in 1974. Under
Section 4(a) of the said executive order, the POEA is vested with "original and
exclusive jurisdiction over all cases, including money claims, involving employeeemployer relations arising out of or by virtue of any law or contract involving Filipino
contract workers, including seamen." These cases, according to the 1985Rules and
Regulations on Overseas Employment issued by the POEA, include, claims for
death, disability and other benefits arising out of such employment. The award of
P180,000.00 for death benefits and P12,000.00 for burial expenses was made by
the POEA pursuant to its Memorandum Circular No. 2, which became effective on
February 1,1984. This circular prescribed a standard contract to be adopted by both
foreign and domestic shipping companies in the hiring of Filipino seamen for
overseas employment


161 SCRA 151
Rodito Nasayao claimed that sometime in May 1974, he was appointed plant
manager of Continental Marble with an alleged compensation of P3,000.00 a month
or 25% of the monthly net income of the company, whichever is greater.
When the company failed to pay his salary for the months of May, June and
July 1974, Nasayao filed a complaint with NLRC. Continental Marble denied that
Rodito Nasayao was its employee. They claimed that the undertaking agreed by the
parties was a joint venture, a sort of partnership, wherein Nasayao was to keep the
machinery in good working condition and in return, he would get the contracts from
end-users for the installation of marble products, in which the company would not
In addition, Nasayao was to receive an amount equivalent to 25% of the net
profits that the petitioner corporation would realize, should there be any. Since there
had been no profits during said period, private respondent was not entitled to any
Whether or not the private respondent Nasayao was employed as plant manager of
petitioner Continental Marble Corporation.
NO. There was nothing in the record which would support the claim of Rodito
Nasayao that
he was an employee of the petitioner corporation. He was not included in the
company payroll nor in the list of company employees furnished by the Social
Security System.
Most of all the element of control is lacking. It appears that the petitioner had
no control over the conduct of Rodito Nasayao in the performance of his work. He
decided for himself on what was to be done and worked at his own pleasure. He was
not subject to indefinite hours or conditions of work and in turn was compensated
according to the results of his on effort. He has a free hand in running the company
and its business, so much so, that the petitioner did not know until very later that
Nasayao collected old accounts receivables, not covered by their agreement, which
he converted to his personal use.

INC.), respondents.
G.R. No. 79255
January 20, 1992
FACTS: This labor dispute stems from the exclusion of sales personnel from the
holiday pay award and the change of the divisor in the computation of benefits from
251 to 261 days.
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed
with the National Labor Relations Commission (NLRC) a petition for declaratory relief
seeking a ruling on its rights and obligations respecting claims of its monthly paid
employees for holiday pay in the light of the Court's decision in Chartered Bank
Employees Association v. Ople (138 SCRA 273 [1985]).
Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for
voluntary arbitration and appointed respondent Benigno Vivar, Jr. as voluntary
On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to pay its
monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only
to the exclusions and limitations specified in Article 82 and such other legal
restrictions as are provided for in the Code.
Filipro filed a motion for clarification seeking (1) the limitation of the award to three
years, (2) the exclusion of salesmen, sales representatives, truck drivers,
merchandisers and medical representatives (hereinafter referred to as sales
personnel) from the award of the holiday pay, and (3) deduction from the holiday
pay award of overpayment for overtime, night differential, vacation and sick leave
benefits due to the use of 251 divisor.
Petitioner UFE answered that the award should be made effective from the date of
effectivity of the Labor Code, that their sales personnel are not field personnel and
are therefore entitled to holiday pay, and that the use of 251 as divisor is an
established employee benefit which cannot be diminished.
On January 14, 1986, the respondent arbitrator issued an order declaring that the
effectivity of the holiday pay award shall retroact to November 1, 1974, the date of
effectivity of the Labor Code. He adjudged, however, that the company's sales
personnel are field personnel and, as such, are not entitled to holiday pay. He
likewise ruled that with the grant of 10 days' holiday pay, the divisor should be
changed from 251 to 261 and ordered the reimbursement of overpayment for
overtime, night differential, vacation and sick leave pay due to the use of 251 days
as divisor.
Whether or not Nestle's sales personnel are entitled to holiday pay; and

NO. It is undisputed that these sales personnel start their field work at 8:00
a.m. after having reported to the office and come back to the office at 4:00 p.m. or
4:30 p.m. if they are Makati-based. The requirement for the salesmen and other
similarly situated employees to report for work at the office at 8:00 a.m. and return
at 4:00 or 4:30 p.m. is not within the realm of work in the field as defined in the
Code but an exercise of purely management prerogative of providing administrative
control over such personnel. This does not in any manner provide a reasonable level
of determination on the actual field work of the employees which can be reasonably
ascertained. The theoretical analysis that salesmen and other similarly-situated
workers regularly report for work at 8:00 a.m. and return to their home station at
4:00 or 4:30 p.m., creating the assumption that their field work is supervised, is
surface projection. Actual field work begins after 8:00 a.m., when the sales
personnel follow their field itinerary, and ends immediately before 4:00 or 4:30 p.m.
when they report back to their office. The period between 8:00 a.m. and 4:00 or
4:30 p.m. comprises their hours of work in the field, the extent or scope and result
of which are subject to their individual capacity and industry and which "cannot be
determined with reasonable certainty." This is the reason why effective supervision
over field work of salesmen and medical representatives, truck drivers and
merchandisers is practically a physical impossibility. Consequently, they are
excluded from the ten holidays with pay award
Moreover, the requirement that "actual hours of work in the field cannot be
determined with reasonable certainty" must be read in conjunction with Rule IV,
Book III of the Implementing Rules which provides that Field personnel and other
employees whose time and performance is unsupervised by the employer are
entitled to holidays with pay.

Rada vs NLRC
January 9, 1992
FACTS: In 1977, Rada was contracted by Philnor Consultants and Planners, Inc as a
driver. He was assigned to a specific project in Manila.The contract he signed was
for 2.3 years. His task was to drive employees to the project from 7am to 4pm. He
was allowed to bring home the company vehicle in order to provide a timely
transportation service to the other project workers. The project he was assigned to
was not completed as scheduled hence, since he has a satisfactory record, he was
re-contracted for an additional 10 months. After 10 months the project was not yet
completed. Several contracts thereafter were made until the project was finished
in1985. At the completion of the project, Rada was terminated as his employment
was co-terminous with the project. He later sued Philnorfor nonpayment of
separation pay and overtime pay. He said he is entitled to be paid OT pay because
he uses extra time to get to the project site from his home and from the project site
to his home every day - in total, he spends an average of 3 hours OT every day.
Whether or not Rada is entitled to separation pay and OT pay.
Separation Pay - NO
The SC ruled that Rada was a project employee whose work was coterminous with
the project for which he was hired. Project employees, as distinguished from regular
or non-project employees, are mentioned in Section 281 of the Labor Code as those
'where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee. Project employees are not entitled to termination pay
if they are terminated as a result of the completion of the project or any phase
thereof in which they are employed, regardless of the number of projects in which
they have been employed by a particular construction company. Moreover, the
company is not required to obtain clearance from the Secretary of Labor in
connection with such termination.'
OT Pay - YES
Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain
specified points along EDSA in going to th project site and drops them off at the
same points on his way back from the field office going home to Marikina, Metro
Manila is not merely incidental to Rada's job as a driver. On the contrary, said
transportation arrangement had been adopted, not so much for the convenience of
the employees, but primarily for the benefit of Philnor. As embodied in Philnors
memorandum, they allowed their drivers to bring home their transport vehicles in
order for them to provide a timely transport service and to avoid delay not really
so that the drivers could enjoy the benefits of the company vehicles nor for them to
save on fair


195 SCRA 533
On April 17 and 18,1985, petitioners, all seamen, entered into separate
contracts of employment with the Golden Light Ocean Transport, Ltd., through its
local agency, private respondent ACE MARITIME AGENCIES, INC.
Petitioners were deployed on May 7, 1985, and discharged on July 12, 1986.
Thereafter, petitioners collectively and/or individually filed complaints for
nonpayment of overtime pay, vacation pay and terminal pay against private
respondent. In addition, they claimed that they were made to sign their contracts in
blank. Likewise, petitioners averred that although they agreed to render services on
board the vessel Rio Colorado managed by Golden Light Ocean Transport, Ltd., the
vessel they actually boarded was MV "SOIC I" managed by Columbus Navigation.
Two (2) petitioners, Jorge de Castro and Juanito de Jesus, charged that
although they were employed as ordinary seamen (OS), they actually performed the
work and duties of Able Seamen (AB).
Private respondent was furnished with copies of petitioners' complaints and
summons, but it failed to file its answer within the reglementary period. Thus, on
January 12, 1987, an Order was issued declaring that private respondent has waived
its right to present evidence in its behalf and that the cases are submitted for
decision. On August 5, 1987, the Philippine Overseas Employment Administration
(POEA) rendered a Decision dismissing petitioners' claim for terminal pay but
granted their prayer for leave pay and overtime pay. On appeal, the NLRC reversed
the decision;
Hence, the petition. Petitioner contends, inter alia, that they are entitled to
leave pay and overtime pay.
Whether or not petitioners are entitled to leave pay and overtime pay
The court sustains the finding of respondent NLRC that petitioners were
actually paid more than the amounts fixed in their employment contracts. Even as
the denial of petitioners' terminal pay by the NLRC has been justified, such denial
should not have been applied to petitioners Julio Cagampan and Silvino Vicera. For,
a deeper scrutiny of the records by the Solicitor General has revealed that the fact
of overpayment does not cover the aforenamed petitioners since the amounts
awarded them were equal only to the amounts stipulated in the crew contracts.
Since petitioners Cagampan and Vicera were not overpaid by the company, they
should be paid the amounts of US$583.33 and US$933.33, respectively.
As regards the question of overtime pay, the NLRC cannot be faulted for
disallowing the payment of said pay because it merely straightened out the
distorted interpretation asserted by petitioners and defined the correct
interpretation of the provision on overtime pay embodied in the contract
conformably with settled doctrines on the matter. Notably, the NLRC ruling on the
disallowance of overtime pay is ably supported by the fact that petitioners never
produced any proof of actual performance of overtime work. In short, the contract
provision guarantees the right to overtime pay but the entitlement to such benefit

must first be established. Realistically speaking, a seaman, by the very nature of his
job, stays on board a ship or vessel beyond the regular eight-hour work schedule.
For the employer to give him overtime pay for the extra hours when he might be
sleeping or attending to his personal chores or even just lulling away his time would
be extremely unfair and unreasonable.


258 SCRA 643
FACTS: Respondent Meynardo J. Hernandez was hired by Stolt-Nielsen Marine
Services (Phils.) Inc. as radio officer on board M/T Stolt Condor for a period of ten
months. He boarded the vessel on January 20, 1990.
On April 26, 1990, the ship captain ordered private respondent to carry the
baggage of crew member Lito Loveria who was being repatriated. He refused to
obey the order out of fear in view of the utterance of said crew member
"makakasaksak ako" and also because he did not perceive such task as one of his
duties as radio officer. As a result of such refusal, private respondent was ordered to
disembark on April 30, 1990 and was himself repatriated on May 15, 1990. He was
paid his salaries and wages only up to May 16, 1990.
Private respondent filed before public respondent POEA a complaint for illegal
dismissal and breach of contract paying for, among other things, payment of
salaries, wages, overtime and other benefits due him for the unexpired portion of
the contract which was six (6) months and three (3) days.
Petitioner in its answer alleged that private respondent refused to follow the
"request" of the master of the vessel to explain to Lolito Loveria, the reason for the
latter's repatriation and to assist him in carrying his baggage, all in violation of
Article XXIV, Section I of the Collective Bargaining Agreement (CBA) and the POEA
Standard Contract. Hence, private respondent, after being afforded the opportunity
to explain his side, was dismissed for gross insubordination and serious misconduct.
Respondent denied that the master of the vessel requested him to explain to
Loveria the reason for the latter's repatriation. Thereafter, POEA Administrator
rendered an award in favor of private respondent. Aggrieved, petitioner StoltNielsen appealed to the National Labor Relations Commission (NLRC). The NLRC
concurred with the POEA Administrator in ruling that private respondent, having
been illegally dismissed, was, therefore, entitled to the monetary award.
It further stated that private respondent's duty as a radio officer or radio
operator does not include the carrying of the luggage of any seaman or explaining
to said seaman the reason for his repatriation. Thus, concluded the NLRC, his
termination on this ground was not proper and, therefore, he had every right to the
monetary award. The NLRC likewise granted private respondent's claim for fixed
overtime pay and attorney's fees.
Whether or not private respondent was entitled to the award of over-time pay.
NO. The Court reiterated that the rendition of overtime work and the
submission of sufficient proof that said work was actually performed are conditions
to be satisfied before a seaman could be entitled to overtime pay which should be
computed on the basis of 30% of the basic monthly salary. In short, the contract
provision guarantees the right to overtime pay but the entitlement to such benefit
must first be established. Realistically speaking, a seaman, by the very nature of his
job, stays on board a ship or vessel beyond the regular eight-hour work schedule.
For the employer to give him overtime pay for the extra hours when he might be

sleeping or attending to his personal chores or even just lulling away his time would
be extremely unfair and unreasonable.

RAMOS vs. CA Case Digest

Petitioner Erlinda Ramos was advised to undergo an operation for the
removal of her stone in the gall bladder. She was referred to Dr. Hosaka, a surgeon,
who agreed to do the operation. The operation was scheduled on June 17, 1985 in
the De los Santos Medical Center. Erlinda was admitted to the medical center the
day before the operation. On the following day, she was ready for operation as early
as 7:30 am. Around 9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted
to pull out his wife from the operating room. Dr. Hosaka finally arrived at 12:10 pm
more than 3 hours of the scheduled operation. Dr. Guiterres tried to intubate
Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm,
Erlinda was being wheeled to the Intensive care Unit and stayed there for a month.
Since the ill-fated operation, Erlinda remained in comatose condition until she died.
The family of Ramos sued them for damages.
Whether or not there was an employee-employer relationship that existed between
the medical center and Drs. Hosaka and Guiterrez.
Private Hospitals hire, fire and exercise real control over their attending and
visiting consultant staff. While consultants are not technically employees, the
control exercised, the hiring and the right to terminate consultants fulfill the
hallmarks of an employer-employee relationship with the exception of payment of
wages. The control test is determining.
In applying the four fold test, DLSMC cannot be considered an employer of
the respondent doctors. It has been consistently held that in determining whether
an employer-employee relationship exists between the parties, the following
elements must be present: (1) selection and engagement of services; (2) payment
of wages; (3) the power to hire and fire; and (4) the power to control not only the
end to be achieved, but themeans to be used in reaching such an end.
The hospital does not hire consultants but it accredits and grants him the
privilege of maintaining a clinic and/or admitting patients. It is the patient who pays
the consultants. The hospital cannot dismiss the consultant but he may lose his
privileges granted by the hospital. The hospitals obligation is limited to providing
the patient with the preferred room accommodation and other things that will
ensure that the doctors orders are carried out.
The court finds that there is no employer-employee relationship between the
doctors and the hospital.

Africa vs MOLE 170 Scra 776

*Real case name
G.R. No. 78210
February 28, 1989
KALIPOT Sino na kaso.. HAHAHA
FACTS: Petitioners, who are employees of the Stanfilco, filed a suit for assembly
time, moral damages and attorney's fees. They contend that being required to
arrived 30 minutes before work is compensable under the Labor code.
NLRC dismissed the case on the grounds that Surely, the customary
functions referred to in the above- quoted provision of the agreement includes the
long-standing practice and institutionalized non-compensable assembly time. This,
in effect, estopped complainants from pursuing this case.
Thus, this appeal.
ISSUE: Whether or not the 30-minute activity of the petitioners before the scheduled
working time is compensable under the Labor Code.
HELD: NO. Petitioners contend that the preliminary activities as workers of
respondents STANFILCO in the assembly area is compensable as working time (from
5:30 to 6:00 o'clock in the morning) since these preliminary activities are
necessarily and primarily for private respondent's benefit.
These preliminary activities of the workers are as follows:
(a) First there is the roll call. This is followed by getting their individual work
assignments from the foreman.
(b) Thereafter, they are individually required to accomplish the Laborer's Daily
Accomplishment Report during which they are often made to explain about their
reported accomplishment the following day.
(c) Then they go to the stockroom to get the working materials, tools and
(d) Lastly, they travel to the field bringing with them their tools, equipment and
All these activities take 30 minutes to accomplish (Rollo, Petition, p. 11).

Contrary to this contention, respondent avers that the instant complaint is not new,
the very same claim having been brought against herein respondent by the same
group of rank and file employees in the case of Associated Labor Union and
Standard Fruit Corporation, NLRC Case No. 26-LS-XI-76 which was filed way back
April 27, 1976 when ALU was the bargaining agent of respondent's rank and file
workers. The said case involved a claim for "waiting time", as the complainants
purportedly were required to assemble at a designated area at least 30 minutes
prior to the start of their scheduled working hours "to ascertain the work force
available for the day by means of a roll call, for the purpose of assignment or
reassignment of employees to such areas in the plantation where they are most