You are on page 1of 28

WMSU LLB2A

MAS

CASES: LABOR LAW I - EXISTENCE OF
EMPLOYER-EMPLOYEE RELATIONSHIP
TABLE OF CONTENTS
Grepalife vs Judico................................................................................................................................................................... 2
Ruga vs NLRC ............................................................................................................................................................................ 6
Paguio vs NLRC....................................................................................................................................................................... 13
Jo vs NLRC................................................................................................................................................................................. 19
Besa vs Trajano ...................................................................................................................................................................... 24

1

WMSU LLB2A

MAS

GREPALIFE VS JUDICO
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 73887 December 21, 1989
GREAT PACIFIC LIFE ASSURANCE CORPORATION, petitioner,
vs.
HONORATO JUDICO and NATIONAL LABOR RELATIONS COMMISSION, respondents.
G.A. Fortun and Associates for petitioner.
Corsino B. Soco for private respondent.

PARAS J.:
Before us is a Petition for certiorari to review the decision of the National Labor Relations Commission (NLRC,
for brevity) dated September 9, 1985 reversing the decision of Labor Arbiter Vito J. Minoria, dated June 9,
1983, by 1) ordering petitioner insurance company, Great Pacific Life Assurance Corporation (Grepalife, for
brevity) to recognize private respondent Honorato Judico, as its regular employee as defined under Art. 281
of the Labor Code and 2) remanding the case to its origin for the determination of private respondent
Judico's money claims.
The records of the case show that Honorato Judico filed a complaint for illegal dismissal against Grepalife, a
duly organized insurance firm, before the NLRC Regional Arbitration Branch No. VII, Cebu City on August 27,
1982. Said complaint prayed for award of money claims consisting of separation pay, unpaid salary and 13th
month pay, refund of cash bond, moral and exemplary damages and attorney's fees.
Both parties appealed to the NLRC when a decision was rendered by the Labor Arbiter dismissing the
complaint on the ground that the employer-employee relations did not exist between the parties but ordered
Grepalife to pay complainant the sum of Pl,000.00 by reason of Christian Charity.
On appeal, said decision was reversed by the NLRC ruling that complainant is a regular employee as defined
under Art. 281 of the Labor Code and declaring the appeal of Grepalife questioning the legality of the
payment of Pl,000.00 to complainant moot and academic. Nevertheless, for the purpose of revoking the
supersedeas bond of said company it ruled that the Labor Arbiter erred in awarding Pl,000.00 to complainant
in the absence of any legal or factual basis to support its payment.
Petitioner company moved to reconsider, which was denied, hence this petition for review raising four legal
issues to wit:

2

for unknown reasons. Stated otherwise. He earned out of his faithful and productive service.00. Industrial life plans are those whose premiums are payable either daily. He was assigned a definite place in the office to work on when he is not in the field.WMSU LLB2A MAS I.00. III. (insurance plans sold and premium collections).00 per week. Petitioner defines a debit agent as "an insurance agent selling/servicing industrial life plans and policy holders. not paid so-called weekly sales reserve of at least P 200. was based on actual production. petitioner contends that Judico's compensation. complainant was promoted to the position of Zone Supervisor and was given additional (supervisor's) allowance fixed at P110. Petitioner assails the findings of the NLRC that private respondent is an employee of the former. Petitioner admits that on June 9. (a definite or fixed amount of P110. 156. During the third week of November 1981.00 regardless of production. Rollo). is that of agent and principal to be governed by the Insurance Code and the Civil Code provisions on agency. weekly or monthly and which are collectible by the debit agents at the home or any place designated by the policy holder" (p.(p. private respondent Judico entered into an agreement of agency with petitioner Grepalife to become a debit agent attached to the industrial life agency in Cebu City. 159. in the form of commissions and bonuses. 1976. Public respondent NLRC also found out that complainant was initially paid P 200. cannot be construed as salary but as a subsidy or a way of assistance for transportation and meal expenses of a new debit agent during the initial period of his training which was fixed for thirteen (13) weeks. he was burdened with the job of collection and to make regular weekly report thereto for which an anemic performance would mean dismissal. Petitioner argues that Judico's compensation was not based on any fixed number of hours he was required to devote to the service of petitioner company but rather it was the production or result of his efforts or his work that was being compensated and that the so-called allowance for the first thirteen weeks that Judico worked as debit agent. II. or one of employer-employee. 00 as allowance for thirteen (13) weeks regardless of production and later a certain percentage denominated as sales reserve of his total collections but not lesser than P 200. arising from their agency relations. Sometime in September 1981. private respondent Judico had definite work assignments including but not limited to collection of premiums from policy holders and selling insurance to prospective clients.00) 3 . and in addition to canvassing and making regular reports. complainant was dismissed by way of termination of his agency contract. a promotion to Zone Supervisor with additional supervisor's allowance. Such admission is in line with the findings of public respondent that as such debit agent. the insurance company. Said contentions of petitioner are strongly rejected by private respondent. Whether the public respondent NLRC has jurisdiction to take cognizance of a controversy between insurance agent and the insurance company. IV. Rollo) The crux of these issues boil down to the question of whether or not employer-employee relationship existed between petitioner and private respondent. Minoria and in ordering the case remanded to said Labor Arbiter for further proceedings. Whether insurance agents are entitled to the employee benefits prescribed by the Labor Code. Whether the relationship between insurance agents and their principal. Whether the public respondent acted correctly in setting aside the decision of Labor Arbiter Vito J. to be governed by the Labor Code. He maintains that he received a definite amount as his Wage known as "sales reserve" the failure to maintain the same would bring him back to a beginner's employment with a fixed weekly wage of P 200. Finally on June 28. 1982. he was reverted to his former position as debit agent but.

Undoubtedly. Applying the aforementioned test to the case at bar.00 weekly "allowance". 21 SCRA 294. by nature of his position and work. the kind of performance but also the power of dismissal. and for which an anemic performance would mean a dismissal. private respondent. they are not required to account for their time nor submit a report of their activities. whether he produces or not is of no moment as his salary is based on his production. Padilla. an ordinary commission insurance agent works at his own volition or at his own leisure without fear of dismissal from the company and short of committing acts detrimental to the business interest of the company or against the latter. Whereas. vs. One salient point in the determination of employer-employee relationship which cannot be easily ignored is the fact that the compensation that these agents on commission received is not paid by the insurance company but by the investor (or the person insured). SSS. the amount of results. his anemic performance or even dead result does not become a ground for dismissal. his contract of services with petitioner is not for a piece of work nor for a definite period.00 for thirteen weeks regardless of production. Sarmiento and Regalado. the undisputed facts show that he was controlled by petitioner insurance company not only as to the kind of work. Premises considered. Melencio-Herrera (Chairperson). they shoulder their own selling expenses as well as transportation. as We have held in Investment Planning Corp..00 aside from the regular P 200. concur. The agents who belong to the second category are not required to report for work at anytime. The test therefore is whether the "employer" controls or has reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished.WMSU LLB2A MAS that he was dismissed primarily because of anemic performance and not because of the termination of the contract of agency substantiate the fact that he was indeed an employee of the petitioner and not an insurance agent in the ordinary meaning of the term. had been a regular employee of petitioner and is therefore entitled to the protection of the law and could not just be terminated without valid and justifiable cause. But. JJ . SO ORDERED. We can readily see that the element of control by the petitioner on Judico was very much present. He was assigned a definite place in the office to work on when he is not in the field. On the other hand. in private respondent's case. After determining the commission earned by an agent on his sales the agent directly deducts it from the amount he received from the investor or the person insured and turns over to the insurance company the amount invested after such deduction is made. the appealed decision is hereby AFFIRMED in toto. a definite amount of P110. and in addition to his canvassing work he was burdened with the job of collection. and they are paid their commission based on a certain percentage of their sales. an insurance company may have two classes of agents who sell its insurance policies: (1) salaried employees who keep definite hours and work under the control and supervision of the company. In both cases he was required to make regular report to the company regarding these duties. 4 . That private respondent Judico was an agent of the petitioner is unquestionable. The record shows that petitioner Judico received a definite minimum amount per week as his wage known as "sales reserve" wherein the failure to maintain the same would bring him back to a beginner's employment with a fixed weekly wage of P 200. and (2) registered representatives who work on commission basis. they do not have to devote their time exclusively to or work solely for the company since the time and the effort they spend in their work depend entirely upon their own will and initiative. Furthermore. Conversely faithful and productive service earned him a promotion to Zone Supervisor with additional supervisor's allowance.

WMSU LLB2A MAS 5 .

C. Espinas & Associates for petitioners.WMSU LLB2A MAS RUGA VS NLRC Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. PHILIP CERVANTES and ELEUTERIO BARBIN. Eladio Calderon. Laurente Bautu. For services rendered in the conduct of private respondent's regular business of "trawl" fishing.R. president of private respondent. master fisherman. LAURENTE BAUTU. whether or not they were illegally dismissed from their employment. and if so. for investigation on the report that they sold some of their fish-catch at midsea to the prejudice of private respondent. As agreed upon. Pilar de Guzman. Philip Cervantes and Eleuterio Barbin. they received thirteen percent (13%) of the proceeds of the sale of the fishcatch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip. as follows: Alipio Ruga and Jose Parma patron/pilot. NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING ENTERPRISES and/or ARSENIO DE GUZMAN. 1 On September 11. RUGA.J. The patron/pilot. Tomas A. JOSE PARMA. 1990 ALIPIO R. 1983 upon arrival at the fishing port. petitioners. Petitioners 6 . they received ten percent (10%) of the total proceeds of the sale. NICANOR FRANCISCO. petitioners were told by Jorge de Guzman. vs. chief engineer. No.: The issue to be resolved in the instant case is whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are employees of its owner-operator. De Guzman Fishing Enterprises. ELADIO CALDERON. second engineer. and fisherman-winchman received a minimum income of P260.00 per week while the assistant engineer. to proceed to the police station at Camaligan. cashier of private respondent. JAIME BARBIN. J. second fisherman.00 per week. Petitioners rendered service aboard said fishing vessel in various capacities. otherwise. Records show that the petitioners were the fishermen-crew members of 7/B Sandyman II. Camarines Sur. one of several fishing vessels owned and operated by private respondent De Guzman Fishing Enterprises which is primarily engaged in the fishing business with port and office at Camaligan. FERNAN. chief engineer and master fisherman received a minimum income of P350. respondents.C. fishermen. second fisherman. Reyes for private respondent. Camarines Sur. Jaime Barbin. petitioners were paid on percentage commission basis in cash by one Mrs. Nicanor Francisco. L-72654-61 January 22.

that. Petitioners assail the ruling of the public respondent NLRC that what exists between private respondent and petitioners is a joint venture arrangement and not an employer-employee relationship. no witnesses were presented to prove the charge against petitioners. On May 30. petitioners invite attention to the following: that they were directly hired by private respondent through its general manager. supervised and controlled the conduct of their fishing operations as to the fixing of the schedule of the fishing trips. and no criminal charges were formally filed against them. Legaspi City. de Guzman. one of the petitioners herein. Coralde rendered a joint decision 5 dismissing all the complaints of petitioners on a finding that a "joint fishing venture" and not one of employer-employee relationship existed between private respondent and petitioners. which were communicated to the patron/pilot by radio (single side band). thru its operations manager. Regional Arbitration Branch No. petitioners individually filed their complaints for illegal dismissal and non-payment of 13th month pay. after the case was submitted for resolution. through its operations manager. Albay. on the manner the fishing operations were conducted. docketed as Cases Nos. To stress that there is an employer-employee relationship between them and private respondent. 1985. 1983. they had been employed by private respondent from 8 to 15 years in various capacities. On December 27. after two (2) previously scheduled joint hearings were postponed due to the absence of private respondent. the instant petition. On October 24. among others. 1983. Labor Arbiter Asisclo S. with the then Ministry (now Department) of Labor and Employment. 1983. mode of payment of compensation for services rendered by the fishermen-crew members. 1984. September 11. Conrado S. the Labor Arbiter scheduled the case for joint hearing furnishing the parties with notice and summons. private respondent. submitted its position paper denying the employer-employee relationship between private respondent and petitioners on the theory that private respondent and petitioners were engaged in a joint venture. testified. the volume or number of tubes of the fishcatch the time to return to the fishing port. Notwithstanding. the National Labor Relations Commission promulgated its resolution 6 affirming the decision of the labor arbiter that a "joint fishing venture" relationship existed between private respondent and petitioners. and the circumstances leading to their dismissal. and its operations manager. V. Hence. the pilot/captain of the 7/B Sandyman II. 1983. emergency cost of living allowance and service incentive pay. 2 They uniformly contended that they were arbitrarily dismissed without being given ample time to look for a new job. except for Laurente Bautu. that they were not allowed to join other outfits even the other vessels owned by private respondent without the permission of the operations manager. private respondent refused to allow petitioners to return to the fishing vessel to resume their work on the same day. that they were compensated on percentage commission basis of the gross sales of the fish-catch which were delivered to them in cash by private 7 .WMSU LLB2A MAS denied the charge claiming that the same was a countermove to their having formed a labor union and becoming members of Defender of Industrial Agricultural Labor Organizations and General Workers Union (DIALOGWU) on September 3. Alipio Ruga. petitioners appealed to the National Labor Relations Commission. 1983. On September 22. From the adverse decision against them. 1449-83 to 1456-83. Conrado de Guzman. 3 After the parties failed to reach an amicable settlement. that private respondent. the direction of the fishing vessel. 4 On March 31. Arsenio de Guzman. During the investigation.

as in the case of petitioners herein. vs. the Solicitor General pointed out that the boat-owners in the Pajarillo case. This peculiar circumstance and the fact that their representative is a non-lawyer provide equitable justification to conclude 8 . Fundamental considerations of substantial justice persuade Us to decide the instant case on the merits rather than to dismiss it on a mere technicality. and that they have to follow company policies. 115 SCRA 347 (1982). In so doing. that there is no employer-employee relationship between the boat-owner and the pilot and crew members when the boat-owner supplies the boat and equipment while the pilot and crew members contribute the corresponding labor and the parties get specific shares in the catch for their respective contribution to the venture. no undue sympathy is to be accorded to any claim of a procedural misstep. convince Us to adopt a more liberal attitude in applying to petitioners the 10-calendar day rule in the filing of appeals with the NLRC from the decision of the labor arbiter. private respondent herein. Mrs. Inc. from compulsory coverage of the SSS on the ground that there is no employer-employee relations between the boat-owner and the fishermen-crew members following the doctrine laid down inPajarillo vs.. the circumstances peculiar to petitioners' occupation as fishermen-crew members. supra. In applying to the case at bar the doctrine in Pajarillo vs. Case No. As adverted to earlier. Jose Dialogo who received the decision eight (8) days earlier. et al.WMSU LLB2A MAS respondent's cashier. Aside from seeking the dismissal of the petition on the ground that the decision of the labor arbiter is now final and executory for failure of petitioners to file their appeal with the NLRC within 10 calendar days from receipt of said decision pursuant to the doctrine laid down in Vir-Jen Shipping and Marine Services. thus "the well-settled doctrine is that in labor cases before this Tribunal. Disputing the finding of public respondent that a "joint fishing venture" exists between private respondent and petitioners.1984 by their non-lawyer representative during the arbitration proceedings. 17 SCRA 1014 (1966). rules and regulations imposed on them by private respondent. did not control the conduct of the fishing operations and the pilot and crew members shared in the catch. who spend one (1) whole week or more 7 in the open sea performing their job to earn a living to support their families. petitioners claim that public respondent exceeded its jurisdiction and/or abused its discretion when it added facts not contained in the records when it stated that the pilot-crew members do not receive compensation from the boat-owners except their share in the catch produced by their own efforts. We rule in favor of petitioners. Inc. of the Philippines. 1984 only on July 3. SSS). we exercise the prerogative accorded to this Court enunciated in Firestone Filipinas Employees Association. or on June 25." Circumstances peculiar to some extent to fishermen-crew members of a fishing vessel regularly engaged in trawl fishing. Records reveal that petitioners were informed of the labor arbiter's decision of March 31. Firestone Tire and Rubber Co. that public respondent did not take into account established jurisprudence that the relationship between the fishing boat operators and their crew is one of direct employer and employee. impress upon Us that in the ordinary course of events. SSS. 1984. the information as to the adverse decision against them would not reach them within such time frame as would allow them to faithfully abide by the 10-calendar day appeal period. the Solicitor General claims that the ruling of public respondent that a "joint fishing venture" exists between private respondent and petitioners rests on the resolution of the Social Security System (SSS) in a 1968 case. 61 SCRA 340 (1974). Pilar de Guzman. 708 (De Guzman Fishing Enterprises vs. vs. who during the pendency of the case understandably have to earn a living by seeking employment elsewhere. exempting De Guzman Fishing Enterprises. that public respondent ignored the evidence of petitioners that private respondent controlled the fishing operations. the idea being that its power be exercised according to justice and equity and substantial merits of the controversy. as in the case at bar. SSS. NLRC.

13 Clearly thus. 9 In the absence of hiring. 8 The employment relation arises from contract of hire. their position. invoked by the public respondent as authority for the ruling that a "joint fishing venture" existed between private respondent and petitioners is not applicable in the instant case. express or implied. and that they only share in their own catch produced by their own efforts. and its operations manager. the conduct of the fishing operations was monitored by private respondent thru the patron/pilot of 7/B Sandyman II who is responsible for disseminating the instructions to the crew members. (c) the power of dismissal. 12 While performing the fishing operations. to be under the control and supervision of private respondent's operations manager. obtained a favorable judgment in Case No. We have consistently ruled that in determining the existence of an employer-employee relationship. 708 exempting it from compulsory coverage of the SSS law is not supported by evidence on record. 1983 as assistant engineer. The conduct of the fishing operations was undisputably shown by the testimony of Alipio Ruga. not the actual exercise of the right. or seven (7) days after receipt of the decision. SSS. and (d) the employer's power to control the employee with respect to the means and methods by which the work is to be accomplished. We have generally relied on the so-called right-of-control test 10 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. Petitioner Alipio Ruga was hired on September 29. (b) the payment of wages. Arsenio de Guzman. where the Court found that the pilots therein are not under the order of the boat-owners as regards their employment. The conclusion of public respondent that there had been no change in the situation of the parties since 1968 when De Guzman Fishing Enterprises. but upon their own volition as to when. 11 The case of Pajarillo vs. The aforementioned circumstances obtaining in Pajarillo case do not exist in the instant case. and the number of tubes of fish-catch in one day. the patron/pilot of 7/B Sandyman II. the elements that are generally considered are the following (a) the selection and engagement of the employee. It was erroneous for public respondent to apply the factual situation of the parties in the 1968 case to the instant case in the light of the changes in the conditions of employment agreed upon by the private respondent and petitioners as discussed earlier. Matters dealing on the fixing of the schedule of the fishing trip and the time to return to the fishing port were shown to be the prerogative of private respondent. Conrado de Guzman and have been under the employ of private respondent for a period of 8-15 years in various capacities. There is neither light of control nor actual exercise of such right on the part of the boat-owners in the Pajarillo case. petitioners received instructions via a single-side band radio from private respondent's operations manager who called the patron/pilot in the morning. on the other hand. 1984. their appeal with the NLRC through registered mail. through its general manager. supra. private respondent herein. that they simply join every trip for which the pilots allow them. except for Laurente Bautu who was hired on August 3. They are told to report their activities. From the four (4) elements mentioned. were directly hired by private respondent. how long and where to go fishing. that the boat-owners do not in any way control the crew-members with whom the former have no relationship whatsoever. that they go out to sea not upon directions of the boat-owners. The test calls merely for the existence of the right to control the manner of doing the work. 1974 as patron/captain of the fishing 9 . without any reference to the owners of the vessel.WMSU LLB2A MAS that there is substantial compliance with the ten-calendar day rule of filing of appeals with the NLRC when petitioners filed on July 10. no actual employer-employee relation could exist. the herein petitioners. Records show that in the instant case. as distinguished from the Pajarillo case where the crew members are under no obligation to remain in the outfit for any definite period as one can be the crew member of an outfit for one day and be the member of the crew of another vessel the next day.

Jose Parma was employed on September 29. it must be noted that petitioners received compensation on a percentage commission based on the gross sale of the fish-catch i. 13% of the proceeds of the sale if the total proceeds exceeded the cost of the crude oil consumed during the fishing trip. While tenure or length of employment is not considered as the test of employment. of board. which was given credence by public respondent. Even on the assumption that petitioners indeed sold the fish-catch at midsea the act of private respondent virtually resulting in their dismissal evidently contradicts private respondent's theory of "joint fishing venture" between the parties herein. Eladio Calderon started as a mechanic on April 16. Furthermore. whether fixed or ascertained on a time. in which each party has an equal proprietary interest in the capital or property contributed 16 and where each party exercises equal lights in the conduct of the business. Philip Cervantes was hired as winchman on August 1. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. otherwise only 10% of the proceeds of the sale. capable of being expressed in terms of money. the dismissal of petitioners was tainted with illegality. petitioners were unjustifiably not allowed to board the fishing vessel on September 11. 14 Aside from performing activities usually necessary and desirable in the business of private respondent. piece or commission basis. lodging. thus: (f) "Wage" paid to any employee shall mean the remuneration or earnings. and included the fair and reasonable value. there is nothing in the records showing such a sharing scheme as preferred by private respondent. including partnership. that petitioners get paid in the form of share in the fish-catch which the patron/pilot as head of the team distributes to his crew members in accordance with their own understanding 15 is not supported by recorded evidence. 1974 as assistant engineer. the fact that on mere suspicion based on the reports that petitioners allegedly sold their fishcatch at midsea without the knowledge and consent of private respondent. task. In that sense. Except that such claim appears as an allegation in private respondent's position paper. . 1976. however designated. 17 It would be inconsistent with the principle of parity of standing between the joint co-venturers as regards the conduct of business. 1972 while Eleuterio Barbin was hired as winchman on April 15. . or other method of calculating the same. Jaime Barbin started as a pilot of the motor boat until he was transferred as a master fisherman to the fishing vessel 7/B Sandyman II. or for services rendered or to be rendered. as determined by the Secretary of Labor. 1983 to resume their activities without giving them the opportunity to air their side on the accusation against them unmistakably reveals the disciplinary power exercised by private respondent over them and the corresponding sanction imposed in case of violation of any of its rules and regulations. if private respondent would outrightly exclude petitioners from the conduct of the business without first resorting to other measures consistent with the nature of a joint venture undertaking. or other facilities customarily furnished by the employer to the employee.WMSU LLB2A MAS vessel. A joint venture. nevertheless the hiring of petitioners to perform work which is necessary or desirable in the usual business or trade of private respondent for a period of 8-15 years since 1968 qualify them as regular employees within the meaning of Article 281 of the Labor Code as they were indeed engaged to perform activities usually necessary or desirable in the usual fishing business or occupation of private respondent. The virtual dismissal of petitioners from their employment was characterized by undue haste when less extreme measures consistent with the requirements of due process should have been first exhausted. 1968 until he was promoted as chief engineer of the fishing vessel. presupposes generally a parity of standingbetween the joint co-venturers or partners. private respondent should have discussed with an open mind the advantages 10 . .e. Instead of arbitrary unilateral action. Such compensation falls within the scope and meaning of the term "wage" as defined under Article 97(f) of the Labor Code. The claim of private respondent.

Rollo. or by "pakiao basis" still that fact did not alter the character of their relationship with Dr. We have examined the jurisprudence on the matter and find the same to be supportive of petitioners' stand. 4 pp..WMSU LLB2A MAS and disadvantages of petitioners' action with its joint co-venturers if indeed there is a "joint fishing venture" between the parties.1985 is hereby REVERSED and SET ASIDE. as his team leader in charge of recruiting said fishermen to work for him. we affirmed the finding of the WCC that there existed an employer-employee relationship between the boat-owner and the fishermen crew members not only because they worked for and in the interest of the business of the boat-owner but also because they were subject to the control. Labor Arbiter. concur. WHEREFORE. Abong as employees of the latter. Court of Industrial Relations. The questioned resolution of the National Labor Relations Commission dated May 30. 112 SCRA 159 (1982). claimed that he was not the employer of the fishermen crew members because of an alleged partnership agreement between him. 28-30. Feliciano. The said ruling is premised on the principle that all these activities i. InNegre vs. not industrial partners. repairs. and Simplicio Panganiban. Simplicio Panganiban. of the boat-owners. form part of the regular operation of the company fishing business. Jr. 3. concurs in the result. WCC. 3 pp. drydock. But this was not done in the instant case. J. supervision and dismissal of the boat-owner. Footnotes 1 p. JJ. 2 pp. 40. In Philippine Fishing Boat Officers and Engineers Union vs. we held that the employer-employee relationship between the crew members and the owners of the fishing vessels engaged in deep sea fishing is merely suspended during the time the vessels are drydocked or undergoing repairs or being loaded with the necessary provisions for the next fishing trip. Joint Decision. Bidin and Cortés. Agustin Abong.. Ibid. p. we held that fishermen crew members who were recruited by one master fisherman locally known as "maestro" in charge of recruiting others to complete the crew members are considered employees.e. Petitioners were arbitrarily dismissed notwithstanding that no criminal complaints were filed against them. Private respondent is ordered to reinstate petitioners to their former positions or any equivalent positions with 3-year backwages and other monetary benefits under the law. Records. 54 SCRA 379 (1973) where petitioner therein. SO ORDERED. Gutierrez. the petition is GRANTED. in view of the foregoing. that while these fishermen crew members were paid in kind. Ibid. The lame excuse of private respondent that the non-filing of the criminal complaints against petitioners was for humanitarian reasons will not help its cause either. 54-101. owner of the fishing boat. the alleged "partner" of Dr. WCC 135 SCRA 653 (1985). thru its agent.. In an earlier case of Abong vs.. loading of necessary provisions. as financier. 11 . Dr. No pronouncement as to costs. 1-8. Abong.

NLRC. p. 62909. vs. Gocheco Lumber Co. p. Records. 13 p.. 7. 9 Yu Chuck vs. Broadway Motors. 612. l SCRA 132. 15 p. Bautista vs.S. Kong Li Po. vs. 70 SCRA 139.S. 22. 7 p. 350.P. Inciong. 608 (1924).N. Rollo.. Memorandum for Private Respondent. Labor Arbiter Pagalilauan G.. 78. vs. 2d. Records. vs. Continental Marble Corporation vs. Tabas. vs. 61. 14 Ochoco vs. Trajano. NLRC. 40-46. citing Alabama Highway Express. p. vs. Mansol vs. 17 Ibid. NLRC. 90 SCRA 161 (1979). Inc. citing Bautista Treatise on Philippine Partnership Law. pp. 131 SCRA 72. 6 pp. 8 Hydro-Resources Contractor Corporation vs. et al.R. Co. G. 2. No. 131. 80680. No. 1989. 1989. p. Ople. January 26. Philippine Musicians Guild. Shipside Inc. 160 SCRA 171 (1988). 146 SCRA 501. Ople. 118 SCRA 99. pp.S. Private Respondent's Position Paper.N. P. T. Local.WMSU LLB2A MAS 5 Annex "D" Petition..R. 12 .N. 173 (1961). p. 61-65. 156 SCRA 522. 108 S.. 16 Sevilla vs. International Labor and Marine Union of the Philippines. Inc. Inc. Rollo. 46 Phil. p. Besa vs. T. 10 LVN Pictures. T. 120 SCRA 774 (1983). 23. 161 SCRA 151. California Mfg. 2. 11 Dy Keh Beng vs.. 12 pp. Rollo. p. Mafinco Trading Corporation vs. al. 34. 61-62. 37. Records. Rosario Brothers. 7-8. et. Court of Appeals. Co. 158 SCRA 665. April 18. 941 (1955). Records. NLRC. 96 Phil.

Apart from commissions. ROBINA Y.: On 22 June 1992. 1992. petitioner was also entitled to a monthly allowance of P2. YOLANDA E. nor any responsibility for your operating expenses or for any liability you may incur. METROMEDIA TIMES CORPORATION. appointing the latter to be an account executive of the firm. Paguio. petitioner. into an agreement with petitioner Efren P.respondents. You are not an employee of the Metromedia Times Corporation nor does the company have any obligations towards anyone you may employ.000.R. Basically. FREDERICK D. petitioner was to solicit advertisements for "The Manila Times. ARAGON. The only rights and obligations between us are those set forth in this agreement. 2003 EFREN P.WMSU LLB2A MAS PAGUIO VS NLRC Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. thirty (30) days prior to effectivity of termination. 147816 May 9. 1992."3 13 . The commissions. respondent Metromedia Times Corporation entered. published by respondent company. viz: "12. was to receive compensation consisting of a 15% commission on direct advertisements less withholding tax and a 10% commission on agency advertisements based on gross revenues less agency commission and the corresponding withholding tax. barely two months after the renewal of his contract.00-monthly quota. for the fifth time.1 Again.00 as long as he met the P30. released every fifteen days of each month. for his efforts. VITUG."2 On 15 August 1992. "13. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties. Either party may terminate this agreement at any time by giving written notice to the other. GOKONGWEI. petitioner received the following notice from respondent firm "Dear Mr. J." a newspaper of general circulation.. NATIONAL LABOR RELATIONS COMMISSION. were to be given to petitioner only after the clients would have paid for the advertisements. Petitioner. "This is in accordance with our contract signed last July 1. "Please be advised of our decision to terminate your services as Account Executive of Manila Times effective September 30. GO and ALDA IGLESIA. JR. vs. LIBERATO GOMEZ. PAGUIO.000. Paguio. the contentious points raised by the parties had something to do with the following stipulations of the agreement. No.

000. with entitlement to backwages without loss of seniority rights. In his petition for review on certiorari. no definite cause for petitioner's termination was given.000. In their defense. b) the mode of payment of wages. "WHETHER OR NOT PETITIONER IS ENTITLED TO BACKWAGES AND MORAL DAMAGES. i. respondents pointed to the last provision thereof stating that both parties could opt to end the contract provided that either party would serve. or the nonconcurrence. Rejecting the assertion of petitioner that he was a regular employee. On appeal. "WHETHER OR NOT PETITIONER'S DISMISSAL IS LEGAL. although it (might) not be known when..4Asserting their right to terminate the contract with petitioner. Petitioner also prayed that respondent company officials be held accountable for acts of unfair labor practice."6 Petitioner appealed the ruling of the NLRC before the Court of Appeals which upheld in toto the findings of the commission. He likewise adjudged that Liberato I. The labor arbiter found for petitioner and declared his dismissal illegal. the corresponding notice to the other. general manager of respondent corporation.000. the NLRC held: "The decisive determinant would not be the activities that the employee (was) called upon to perform but rather.was it or was it not one of regular employment? A "regular employment. a day certain being understood to be that which (would) necessarily come.00. petitioner filed a case before the labor arbiter. pirating clients from his co-executives and failing to produce results.00 moral damages and for P200. without any force."7 The crux of the matter would entail the determination of the nature of contractual relationship between petitioner and respondent company . of the following factors . on account of his educated stature. without loss of seniority rights. the National Labor Relations Commission (NLRC) reversed the ruling of the labor arbiter and declared the contractual relationship between the parties as being for a fixed-term employment. thirty days prior to the intended date of termination. is aptly gauged from the concurrence. having indeed personally prepared his pleadings without the aid of counsel. c) the presence or absence of the power of dismissal.a) the manner of selection and engagement of the putative employee.00 exemplary damages.e. The NLRC declared a fixed-term employment to be lawful as long as "it was agreed upon knowingly and voluntarily by the parties." whether it is one or not. asking that his dismissal be declared unlawful and that his reinstatement. and d) the presence or absence of the power to control the conduct of the putative employee or the power to control the employee with respect to the means or methods by which his work is to be accomplished.WMSU LLB2A MAS Apart from vague allegations of misconduct on which he was not given the opportunity to defend himself. be held liable to petitioner for moral damages in the amount of P20. duress or improper pressure being brought to bear upon the worker and absent any other circumstances vitiating his consent. was an unlikely victim of a lopsided contract. for P500. petitioner raised the following issues for resolution: "WHETHER OR NOT PETITIONER'S CONTRACT WITH PRIVATE RESPONDENT'S COMPANY IS FOR A FIXED PERIOD. The arbiter ordered respondent Metromedia Times Corporation and its officers to reinstate petitioner to his former position. be ordered. the day certain agreed upon by the parties for the commencement and termination of their employment relationship."5 The finding of the NLRC was primarily hinged on the assumption that petitioner. Aggrieved. and to pay him his commissions and other remuneration accruing from the date of dismissal on 15 August 1992 up until his reinstatement.8 The "control test" 14 . Gomez. respondent Metromedia Times Corporation asserted that it did not enter into any agreement with petitioner outside of the contract of services under Articles 1642 and 1644 of the Civil Code of the Philippines.

12 The law affords protection to an employee. does so. A stipulation in an agreement can be ignored as and when it is utilized to deprive the employee of his security of tenure. respondent corporation recognized petitioner's invaluable contribution to the business when it renewed. and Frederick Go. clearly necessary and desirable. Implicitly. an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. a regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. the advertising director. and that the same went on for more than a year. – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.13 The sheer inequality that characterizes employer-employee 15 . company president. not necessarily or exclusively upon the terms of their written or oral contract. whether such service is continuous or broken.11 That petitioner performed activities which were necessary and desirable to the business of the employer. regardless of the nature of the activity performed or of whether it is continuous or intermittent. "An employment shall be deemed to be casual if it is not covered by the proceeding paragraph: Provided. 280. its President. where such person has rendered at least one year of service. Robina Gokongwei.9 An indicum of regular employment. rightly taken into account by the labor arbiter. any employee who has rendered at least one year of service. to submit a daily sales activity report and also a monthly sales report as well. provides: "ART. and it will not countenance any attempt to subvert its spirit and intent.WMSU LLB2A MAS assumes primacy in the overall consideration.10 Metromedia Times Corporation exercised such control by requiring petitioner. Respondent company cannot seek refuge under the terms of the agreement it has entered into with petitioner. except 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 or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. That. Regular and Casual Employment. the advertising manager. Petitioner was an account executive in soliciting advertisements. in Article 280 thereof. not only as to the result of the work but also as to the manner and details of the performance desired. in defining their contractual relationship. herself admitted that the income generated from paid advertisements was the lifeblood of the newspaper's existence. Various solicitation letters would indeed show that Robina Gokongwei. not just once but five times. but also on the basis of the nature of the work petitioner has been called upon to perform." Thus defined. The law. directed and monitored the sales activities of petitioner. the employment is considered regular as long as the activity exists. Even in these latter cases. Alda Iglesia. for the survival and continued operation of the business of respondent corporation. was the reservation by respondent Metromedia Times Corporation not only of the right to control the results to be achieved but likewise the manner and the means used in reaching that end. its contract with petitioner. Under this test. among other things. it not being indispensable that he be first issued a regular appointment or be formally declared as such before acquiring a regular status. an employment relation obtains where work is performed or services are rendered under the control and supervision of the party contracting for the service. The Labor Code. could hardly be denied.

The notice of termination recites no valid or just cause for the dismissal of petitioner nor does it appear that he has been given an opportunity to be heard in his defense. The evidence. JJ. 1993. SO ORDERED. C.J. Gomez.000.WMSU LLB2A MAS relations.. Footnotes 1 The letter contract dated 22 June 1992 read Dear Mr. Gomez which award is deleted. and to set forth the terms and conditions of your contract. It is not shown that respondent company has fully bothered itself with either of these requirements in terminating the services of petitioner. All advertisements are subject to acceptance by us and we reserve the right in our absolute discretion to reject or omit any advertisements. Ynares-Santiago. concur. and the award of moral damages must thus be deleted. particularly by respondent Liberato I.A. Davide. The decision of the Court of Appeals in C. 2. You are authorized to solicit advertisements and quote advertising rates in accordance with and subject to all the terms and conditions in our rate cards. and Azcuna. G.. Jr. 4. 16 . SP No. A lawful dismissal must meet both substantive and procedural requirements. As account executive. WHEREFORE. 1992 to June 30. the instant petition is GRANTED. in fine. You will be paid fifteen (15) percent commission on direct advertisements less corresponding withholding tax.00 moral damages adjudged against respondent Liberato I. you will use your best efforts to obtain advertisements exclusively for us and for such projects that The Manila Times may decide to do from time to time. where the scales generally tip against the employee. The real question that should thus be posed is whether or not petitioner has been justly dismissed from service. often scarcely provides him real and better options. found by the appellate court is wanting that would indicate bad faith or malice on the part of respondents.R. the dismissal must be for a just or authorized cause and must comply with the rudimentary due process of notice and hearing. 1. 3. however.. Carpio. 527773 and that of the National Labor Relations Commission are hereby SET ASIDE and that of the Labor Arbiter is REINSTATED except with respect to the P20. Paguio: This letter is to appoint you as Account Executive for The Manila Times for a period of twelve (12) months effective July 1.

) 2 Rollo. If these terms and conditions are acceptable to you. commissions earned on paid advertisements covering the period from the sixteenth (16th ) to the end of the month shall be payable on the fifteenth (15) of the succeeding month. Commissions earned on paid advertisements covering the period from the first (1st) to the fifteenth (15) of every month shall be payable at the end of the same month. nor any responsibility for your operating expenses or for any liability you may incur. 7." Article 1644 provides: "In the lease of work or service. This agreement cannot be amended or modified in any way except with the duly authorized consent in writing of both parties. In no case. 10 For all ex-deal arrangements. But should you fail to meet your quota. subject to the corresponding withholding taxes authorized by law. You will be paid ten (10) percent commission on agency advertisements based on gross ad revenues less agency commission and corresponding withholding tax. Either party may terminate this agreement at any time by giving written notice to the other thirty (30) days prior to the effectivity of termination. or of work and service. will commission be paid until and unless the advertisements. The only rights and obligations between us are those set forth in this agreement. 17 . Walk-in advertisements. please indicate your conformity by signing below. 42. All payments must be paid direct to Metromedia Times Corporation. 9. one of the parties binds himself to execute a piece of work or to render to the other some service for a price certain. 82. (Rollo. not solicited by the Advertising staff. 4 Article 1642 of the Civil Code provides: "The contract of lease may be of things. are not commissionable.WMSU LLB2A MAS 5. have been paid for. 41-42. your allowance shall be charged against your future account. whether agency or direct. 13. You are not an employee of Metromedia Times Corporation nor does the Company have any obligations towards anyone you may employ. You will be paid your approved commission only after the payment for the liquidation (sold and/or consumed) of the goods received from the advertiser has been completed. pp. You will be entitled to a monthly allowance of P2. 43.000. 3 Rollo. but the relation of principal and agent does not exist between them. 6. the barter agreement and your commission will be subject to the written approval of the President and Treasurer on a case-to-case basis. 11.000. p.00 provided that you meet a monthly quota of P30. 8. p.00 in advertising lineage. p. 12. however. NLRC Decision dated 15 December 1998." 5 Rollo.

Ecal vs. vs.. 195 SCRA 224.M.. 86693. 13 Cielo vs. Escano. 187 SCRA 108. MAS 8 Hijos de F. Maalat.R. G.R. Inc. 7 Rollo. L-16600. 28 January 1991.R. Nos. NLRC. 201 SCRA 63. 18. 10 August 1989. No. No.. G. G.R.WMSU LLB2A 6 Rollo. Labor Code. 27 December 1961. 92777-78. NLRC. 11 Article 280. 59229. 193 SCRA 410. NLRC G. 9 Iloilo Chinese Commercial School vs. 3 SCRA 712. 22 August 1991. 10 Cosmopolitan Funeral Homes. 13 March 1991. NLRC. Oreta and Co. Fabrigar.R. p. 12 A. 18 . G. No... vs. et al. No. 74004. Inc. p. 78693. vs. 176 SCRA 218. Inc. 02 July 1990. 85.

All the employees. were absorbed by the new owners. to thresh out the problem. and its Resolution dated June 7. characterized by constant exchange of personal insults during working hours. sold the barbershop to petitioners Paz Martin Jo and Cesar Jo. in addition to his being a barber. (4) to attend to other needs of the shop. Private respondent's duties as caretaker. 1995. were: (1) to report to the owners of the barbershop whenever the airconditioning units malfunctioned and/or whenever water or electric power supply was interrupted. from February 1990 to March 1991 — P800.: This petition for certiorari seeks to set aside the Decision1 of National Labor Relations Commission (Fifth Division) promulgated on November 21. petitioners designated private respondent as caretaker of the shop because the former caretaker became physically unfit. In 1970. including private respondent. private respondent continued to be a barber and caretaker. In 1977. J. In this new location. vs. Atty. The bickerings.WMSU LLB2A MAS JO VS NLRC Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. 1994. 121605 February 2. (2) to call the laundry woman to wash dirty linen. The labor official immediately summoned private respondent and petitioners to a conference. The owners and the barbers shared in the earnings of the barber shop. Private respondent Peter Mejila worked as barber on a piece rate basis at Dina's Barber Shop. became serious so that private respondent reported the matter to Atty. The name of the barbershop was changed to Windfield Barber Shop. Accordingly. Prudencio Abragan. it was between the former and his fellow barber. For this additional job. NATIONAL LABOR RELATIONS COMMISSION and PETER MEJILA. respondents. which denied petitioners' motion for reconsideration. while one-third (1/3) went to the owners of the shop.nêt When the building occupied by the shop was demolished in 1986. Macaraya directed petitioners' counsel. Upon investigation. 1âwphi1. 19 . but with a fixed monthly honorarium as caretaker. to wit: from February 1986 to 1990 — P700. he was given an honorarium equivalent to one-third (1/3) of the net income of the shop. rather. it was found out that the dispute was not between private respondent and petitioners. the owner. Jorge Tinoy. Atty. petitioners. But soon a place nearby was rented by petitioners and the barbershop resumed operations as Cesar's Palace Barbershop and Massage Clinic. No. (3) to recommend applicants for interview and hiring. and from July 1992 P1. In November 1992. Dina Tan. The barbers got two-thirds (2/3) of the fee paid for every haircut or shaving job done.R.300. Allan Macaraya of the labor department. private respondent had an altercation with his co-barber. 2000 PAZ MARTIN JO and CESAR JO. QUISUMBING. the barbershop closed.

1993. Atty. 1992. 1993. he should be reinstated and paid his backwages starting from January 1. 1992 at one-half month pay of his earnings as a barbers. The NLRC sustained the labor arbiter's finding as to the existence of employer-employee relationship between petitioners and private respondent. On January 8. We rule and hold that he was illegally terminated.3 The Labor Arbiter dismissed the complaint. 1994. Despite the assurance that he was not being driven out as caretaker-barber. he began working as a regular barber at the newly opened Goldilocks Barbershop also in Iligan City. he becomes entitled to 13th month pay only in his capacity as caretaker at the last rate pay given to him. the complaint did not seek reinstatement as a positive relief. 1993. Abragan's office a new twist was added. private respondent filed a complaint2 for illegal dismissal with prayer for payment of separation pay. and as a caretaker the same should be reckoned from 1977 up to December 31. the decision appealed from is Vacated and Set Aside and a new one entered in accordance with the above-findings and awards. Complainant should be adjudged entitled to separation pay reckoned from 1970 up to the time he was dismissed on December 31. Significantly. 13th month pay. Abragan set another conference but private respondent did not appear in such meeting anymore. even workers paid on commission are given separation pay as they are considered employees of the company. Meanwhile. 1993 up . position paper but in hearings before the Labor Arbiter a quo attorney's fees equivalent to 10% of the money awards should likewise be paid to complainant. In order to give the parties enough time to cool off. but ordered petitioners to pay private respondent his 13th month pay and attorney's fees. on January 2. As complainant has been assisted by counsel not only in the preparation of the complaint. the petitioners were ordered to reinstate private respondent and pay the latter's backwages. On January 12. private respondent continued reporting for work at the barbershop. Both parties appealed to the NLRC. but it ruled that private respondent was illegally dismissed. the Labor Arbiter found that private respondent was an employee of petitioners. In a Decision dated November 21. In a Decision dated June 15. WHEREFORE. should reinstatement not be feasible on account of a strained employer-employee relationship.4 20 . separation pay and attorney's fees. Consequently. But. As complainant's income was mixed. he turned over the duplicate keys of the shop to the cashier and took away all his belongings therefrom. attorney's fees and damages. other monetary benefits. the time of his reinstatement and payment of separation pay. (commission and caretaker). and that private respondent was not dismissed but had left his job voluntarily because of his misunderstanding with his co-worker. SO ORDERED. With respect to separation pay. Hence. thus: For failure of respondents to observe due process before dismissing the complainant.WMSU LLB2A MAS During the mediation meeting held at Atty. it set aside the labor arbiter's judgment. private respondent demanded payment for several thousand pesos as his separation pay and other monetary benefits. 1993.

Hence. with petitioners having the final decision. petitioners tapped private respondent to serve concurrently as caretaker of the shop. (2) power of dismissal. Initially.WMSU LLB2A MAS Its motion for reconsideration having been denied in a Resolution dated June 7. private respondent earned two-thirds (2/3) of the fee paid per haircut or shaving job done. Undoubtedly. In fact. such task was far from being negligible as claimed by petitioners. Certainly.5 In determining the existence of an employer-employee relationship. 21 . petitioners had the power to dismiss private respondent being the ones who engaged the services of the latter. They claim that private respondent was their "partner in trade" whose compensation was based on a sharing arrangement per haircut or shaving job done. in that: (1) private respondent had to inform petitioners of the things needed in the shop. at the rate of one-third (1/3) of the shop's net income but subsequently pegged at a fixed amount per month. At the outset. we reiterate the doctrine that the existence of an employer-employee relationship is ultimately a question of fact and that the findings thereon by the labor arbiter and the NLRC shall be accorded not only respect but even finality when supported by ample evidence. Moreover. petitioners.7 These duties were complied with by the private respondent upon instructions of petitioners. 1995. the following facts indubitably reveal that petitioners controlled private respondent's work performance. As a barber. Furthermore. with the latter assuming primacy in the overall consideration. The issues for resolution are as follows: 1. It is not essential for the employer to actually supervise the performance of duties of the employee. They argue that private respondent's task as caretaker could be considered an employment because the chores are very minimal. hired private respondent as barber by absorbing the latter in their employ. and (4) the power to control the worker's conduct.m. Whether or not there exists an employee-employee relationship between petitioners and private respondent. 2. there was enough basis to declare private respondent an employee of petitioners. there is no cogent reason to disturb the findings of the labor arbiter and NLRC on the existence of employeremployee relationship between herein private parties. private respondent sued petitioners for illegal dismissal. the services performed by private respondent as barber is related to. it is enough that the employer has the right to wield that power. it was crucial to the business operation of petitioners as shown in the preceding discussion.m. The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. On the contrary. (3) he had to be at the shop at 9:00 a. Petitioners contend that public respondent gravely erred in declaring that private respondent was their employee. and could leave only at 9:00 p. As a caretaker. (3) the payment of wages by whatever means. because he was the one who opened and closed it. as new owners of the barbershop. and in the pursuit of the principal business activity of petitioners. (2) he could only recommend the hiring of barbers and masseuses. Later on. petitioners filed the instant petition. originally. the following elements are considered: (1) the selection and engagement of the workers. private respondent was paid by petitioners wages in the form of honorarium. Accordingly. albeit contested by the latter.6 Absent a clear showing that petitioners and private respondent had intended to pursue a relationship of industrial partnership. being the one entrusted with the key. Whether or not private respondent was dismissed from or had abandoned his employment. we entertain no doubt that private respondent was employed by petitioners as caretaker-barber.

nêt Bellosillo. Mendoza. At the outset. To constitute abandonment. there must be concurrence of the intention to abandon and some overt acts from which it may be inferred that the employee concerned has no more interest in working. concur. Fourth. in the exercise of its equity jurisdiction. he filed a complaint for illegal dismissal without praying for reinstatement. Corollarily... public respondent did not give credence to petitioners' claim that private respondent abandoned his job.8 In other words.9 In the case at bar. public respondent's assertion that the institution of the complaint for illegal dismissal manifests private respondent's lack of intention to abandon his job12 is untenable. he surrendered the shop's keys and took away all his things from the shop. he did not report anymore to the shop without giving any valid and justifiable reason for his absence. First. Such rule applies where the complainant seeks reinstatement as a relief. Footnotes 22 . Jr. constrained to agree with the findings of the Labor Arbiter that private respondent left his job voluntarily for reasons not attributable to petitioners. No costs. therefore. the Court. may look into the records of the case and reexamine the questioned findings. The decision of the Labor Arbiter dated June 15. Third.11 Second. it has no application where the complainant does not pray for reinstatement and just asks for separation pay instead13 as in the present case. 1993. jurisprudence has laid out the rules and valid ground for termination of employment. deliberate and unjustified refusal to resume employment and a clear intention to sever the employer-employee relationship on the part of the employee. Moreover. That he was illegally dismissed is belied by his own pleadings as well as contemporaneous conduct. there must be a clear. Nevertheless. Fifth.WMSU LLB2A MAS With regard to the second issue. is hereby reinstated. It goes without saying that the prayer for separation pay.14 contradicts private respondent's stance. SO ORDERED. the following circumstances clearly manifest private respondent's intention to sever his ties with petitioners. public respondent gravely erred as hereunder discussed.10 In this case. he immediately sought a regular employment in another barbershop. Buena and De Leon. being the alternative remedy to reinstatement. the labor arbiter was convinced that private respondent was not dismissed but left his work on his own volition because he could no longer bear the incessant squabbles with his co-worker. 1âwphi1. the petition is GRANTED. JJ. despite previous assurance that he could remain in petitioners' employ. private respondent even bragged to his co-workers his plan to quit his job at Cesar's Palace Barbershop and Massage Clinic as borne out by the affidavit executed by his former co-workers. we must stress that where the findings of the NLRC contradict those of the labor arbiter. WHEREFORE. On this score. The assailed Decision and Resolution of public respondent NLRC are reversed and set aside. The rule that abandonment of work is inconsistent with the filing of a complainant for illegal dismissal is not applicable in this case. We are. It was error and grave abuse of discretion for the NLRC to hold petitioners liable for illegal dismissal of private respondent.

242 SCRA 382. 145. 267 (1995). at 83. Santos v. 269 SCRA 453. Inciong. v. NLRC. Buat and Commissioner Leon G. 198 (1995). 221 (1997). 14 Bombase v. 191 SCRA 328. 249 SCRA 379. NLRC. 273 SCRA 352. 699 (1990). NLRC. v. 13 A' Prime Security Services Inc. Loadstar Shipping Co. 267 SCRA 47. NLRC. 764 (1988). NLRC. 235 SCRA 268. NLRC. 56 (1997). North Davao Mining Corp. 244 SCRA 797. 220 SCRA 142. supra. 145 (1993). Velasco v. 9 Tan v. p. v. 6 Equitable Banking Corporation v. 34-37. 5 AFP Mutual Benefit Association Inc. 209 (1997). v. Inter-Orient Maritime Enterprises Inc. 166 SCRA 759. 271 SCRA 216. 273 SCRA 200. v. 389 (1995). Gonzaga Jr. v. NLRC. Gallo. NLRC. 265 (1995). 500 (1995). NLRC. 254 SCRA 721. 187 SCRA 694. p. 245 SCRA 496. 660 (1994). Great Pacific Life Assurance Corp. 241 SCRA 261. Dagupan Bus Co. 23 . 11 Rollo. MAM Realty Development Corporation v. NLRC. NLRC. 386 (1995). 800-801 (1995). 10 Industrial Timber Corporation v. 8 A Prime Security Services Inc. v. NLRC. 731 (1996). at 60-61. Abella. at 84. 12 Id. 7 Id. 463 (1997). Inc. NLRC. v. 331 (1990). Cañete v. 248 SCRA 183. at 56-38. 4 Id. 61. NLRC.. Zanotte Shoes v. Magcalas v. 164 SCRA 67. 74 (1988). 2 Rollo. Reno Foods Inc. NLRC. 277 (1994). NLRC. 229 SCRA 654. and concurred by Presiding Commissioner Musib M. 3 Id. 371 (1997). Labor v. NLRC. 250 SCRA 259. NLRC. pp.. International School of Speech v.WMSU LLB2A MAS 1 Penned by Commissioner Oscar M. NLRC. Inc.

NCR in NCR-LRD-M-1044-85. if the relationship does exist. Commission has no jurisdiction over the subject matter and parties to the petition.R.WMSU LLB2A MAS BESA VS TRAJANO Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. vs. docketed as NCR-LRD-M-1-044-85 in the National Labor Relations Division of the National Capital Region. There is no employer-employee relationship between Besa's and the petitioners-signatories to the petition. Sometime in January. A-8-16585. This Hon. 72409 December 29. 1985. AND KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPILKATIPUNAN). THE HONORABLE CRESENCIANO B. 24 . and 4. BESA. 3.: This petition questions the decision of the Director of the Bureau of Labor Relations in BLR Case No. De Asis and Hernando Law Office for petitioner. More specifically. Labor Relations Division. respondents. private respondent Kaisahan ng Mangagawang Pilipino KAMPIL for short) a legitimate labor union duly registered with the Ministry of Labor and Employment (MOLE. and is therefore barred under the principle of res judicata. The subject of the present petition had previously been decided by the defunct Court of Industrial Relations. petitioner seeks the resolution of the question as to whether or not an employer-employee relationship exists between herein petitioner and the seventeen (17) shoeshiners-members of the respondent union. privileges and benefits of an employee as provided in the Labor Code. which affirmed the appealed order of the Med-Arbiter. J. doing business under the name and style of BESA'S CUSTOMBUILT SHOES. of the Omnibus Rules Implementing the Labor Code. DIRECTOR OF THE BUREAU OF LABOR RELATIONS. for short). MINISTRY OF LABOR AND EMPLOYMENT. Mendoza for private respondent. 1986 MAMERTO S. who. Book V. 2. Estebal M. Petitioner opposed it alleging that — 1. a certification election case. No. The petition fails to comply with the mandatory formal requirements under Sec. filed a Petition for Certification Election. 2. should be entitled to the rights. PARAS.petitioner. TRAJANO.

petitioner raised the following grounds: I THE INSTANT PETITION PRESENTS QUESTIONS OF LAW AND SUBSTANCE TO MERIT THE CONSIDERATION OF THIS HONORABLE COURT. petitioner herein BESAS filed with Us with petition for certiorari with Prohibition and simultaneously filed with the Med-Arbiter a motion to suspend the pre-election conference. In its Motion for Reconsideration. the Med-Arbiter on June 27. Petition for Certiorari). That on May 28. for lack of jurisdiction petition. 1985 upholding the finding of the Med-Arbiter that supervisors were appointed to oversee the bootblacks' performance. The petition filed before Us was dismissed for lack of merit but was reconsidered upon Motion of petitioner. the Opposition thereto. 1965). Director Severo Pucan of the Ministry of Labor and Employment. 25 . It declared that such is a finding of fact that is entitled to respect and that res judicata does not he as the parties and the causes of action in the certification election case are different from the parties and causes of action in CIR Cases Nos. declared that there was no employer-employee relationship between the shoeshiners and petitioner Besas (Order in NCR-LSED1-020-85). and the Reply to the Opposition. 1985. III THE QUESTIONED DECISION OF THE RESPONDENT DIRECTOR IS CONTRARY TO LAW AND APPLICABLE DECI SIONS OF THE SUPREME COURT ON THE MATTER. II THE QUESTIONED DECISION OF THE RESPONDENT DIRECTOR WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE AND THE SAME IS PURELY BASED ON SPECULATIONS. 2. 27. in dismissing the case for underpayment of commissions and non-payment of ECOLA. The legal ground therein cited was res judicata. That the subject of the present petition has previously been decided by the defunct Court of Industrial Relations. Petitioner appealed the order to the Director of BLR citing among others the following reasons — 1. SURMISES AND CONJECTURES. Director Pucan's findings were based on a letter-opinion of the Director of the Bureau of Working Conditions of the MOLE (Annex "B-2". While the pre-election conference was in progress. 2751 and 2949 ULP December 21. and is therefore barred under the principle of res judicata (CIR Case Nos. xxx xxx xxx Appeal was dismissed by the Director of BLR as contained in his decision dated Sept. issued an order declaring that there was an employer-employee relationship between the parties and directed that an election be conducted.WMSU LLB2A MAS Acting on the Petition. 2783. 2783-ULP 2751-ULP and 2949 ULP Thus the Petition of the Union (KAMPIL) before the Med-Arbiter for the holding of the certification election was granted. 1985. filed by the shoeshiners against Besas Custombuilt Shoes.

Since the respondent union did not obtain a clear majority for the "Yes" votes as required under Rule IV Sec. The question of employer-employee relationship became a primodial consideration in resolving whether or not the subject shoeshiners have the juridical personality and standing to present a petition for certification election as well as to vote i therein. that at least thirty (30%) percent of the employees must support the petition for certification election and that in order to be certified as the sole and exclusive bargaining agent. V THE RESPONDENT DIRECTOR ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DECIDING THAT THERE EXISTS AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE PETITIONER AND THE SHOESHINER-MEMBERS OF THE RESPONDENT UNION. however. it necessarily follows that the respondent union cannot be certified as the sole and exclusive bargaining agent of the workers of Besa's. 1965 that: The shoe shiner is distinct from a piece worker because while the latter is paid for work accomplished. The present petition merits Our consideration. The records of the case reveal that an employer-employee relationship does not exist between the 17 shoeshiners and petitioner. Be it noted that the defunct CIR in dismissing the cases for unfair labor practice filed by the shoeshiners against herein petitioner BESA declared in its Decision dated December 21. 33 voted for the union while 16 voted for no union. The main thrust of the instant petition is the question of employer-employee relationship between petitioner BESAS and 17 of the members of the herein respondent Union who are designated as shoeshiners. 26. It is the employer of the piece worker who pays his wages. he does not. the union must be obtained a majority of the valid votes cast by eligible voters. 8(f) of the Omnibus Rules of the Labor Code. which is a tie. The piece worker is paid for work accomplished without regard or concern to the profit as derived by his employer. contribute anything to the capital of the employer other than his service.WMSU LLB2A MAS IV THE PETITION FOR CERTIFICATION ELECTION FILED BY RESPONDENT UNION WITH THE MINISTRY OF LABOR AND EMPLOYMENT FAILED TO COMPLY WITH THE MANDATORY REQUIREMENTS UNDER ARTICLE 258 OF THE LABOR CODE. In the instant case. VI THE RESPONDENT DIRECTOR ACTED WITHOUT JURISDICTION IN TAKING COGNIZANCE OF THE BASIC PETITION CONSIDERING THAT THE SUBJECT MATTER AND THE PARTIES THEREOF HAVE BEEN DECIDED BY THE DEFUNCT COURT OF INDUSTRIAL RELATIONS AND IS THEREFORE BABRED BY THE PRINCIPLE OF RES ADJUDICATA. Among the 33 voters who opted for a union 17 persons are shoeshiners while 16 persons are non-shoeshiners. AND ITS IMPLEMENTING RULES. but in the case of the shoe shiners. if the 17 shoeshiners are declared ineligible and their votes are consequently nullified the result of the certification election would be 16 "Yes" votes (33 minus 17) and 16 "No" votes. It is the position of petitioner that if the shoeshiners are not considered as employees of Besa's the basic petition for certification election must necessarily be dismissed for failure to comply with the mandatory requirements of the Labor Code. 1985 at BESAS of the 53 eligible voters. During the certification election held on Nov. while the shoe shiner in this instance is paid directly by his customer. 49 cast their votes. the 26 . as amended. AS AMENDED.

27. 6. under obligation to extend to those on purely commission basis the benefit of Wage Order No. distinct from the shoe shiner in this instance who. but in the case of the shoe shiner. <äre||anº•1àw> Then too on Dec. the law does not preclude the employer in giving such benefit to all its employees including those which may not be covered by the mandate of the law. However. A basic factor underlying the exercise of rights under the Labor Code is the status of employment. no employer-employee relationship exists. 2 which provided for an increase both in minimum wage and cost of living allowance. All these are not obtaining in the case of a piece worker as he is in fact an employee in contemplation of law. 1983.WMSU LLB2A MAS proceeds derived from the trade are always divided share and share alike with respondent BESA. MOLE. in response to a letter of petitioner relative to the implementation of wage Order No. That the shiners have their own customers from whom they charge the fee and divide the proceeds equally with the owner. per our conversation. The attendant circumstances clearly show that there is no employer-employee relationship existing. but are partners instead. respondent BESA does not exercise any degree of control or supervision over their person and their work. This is due to the fact that the owner/manager does not exercise control and supervision over the shoe shiners. Consequently. payment of wages 3. opined as follows: Entitlement of the minimum requirements of the law particularly on wages and allowances presupposes the existence of employer-employee relationship which is determined by the concurrence of the following conditions: 1. is a partner in the trade. and such the owner/manager is not by law. (p. 1985 addressed to petitioner Annex B-2. BESA. 2. right to fire. BESA being absent the latter could not be held guilty of the unfair tabor practice acts imputed against him. Petition) The Office of the Solicitor General as counsel for public respondent agrees that in the present case. Annex "B1 " of said Decision). and 4. then Director Augusto Sanchez of the Bureau of Working Conditions. these shoe shiners are not employees of the company. right to hire 2. It is important in the determination of who shall be included in a proposed bargaining unit because it 27 . The Supreme Court in the Rosario Brothers case ruled that. employer-employee relationship between members of the Petitioning union and respondent MAMERTO B. control and supervision The most important condition to be considered is the exercise of control and supervision over the employees. which make the owner categorized them as on purely commission basis. in relation to respondent MAMERTO B. The shoe shiner can take his share of the proceeds everyday if he wanted to or weekly as is the practice of qqqBesas The employer of the piece worker supervises and controls his work. (Letter dated December 27. the persons concerned under your query are the shoe shiners and based on the decision rendered by Associate Judge Emiliano Tabigne of the defunct Court of Industrial Relations.

JJ. Feria (Chairman). concur. SO ORDERED. 1985. Failure to establish this juridical relationship between the union members and the employer affects the legality of the union itself. and d] power to control the employee's conduct although the latter is the most important element (Rosario Brothers Inc. 28 . 131 SCRA 72. Gutierrez. Existence of employer-employee relationship is determined by the following elements.. 1984) WHEREFORE. Fernan. Ople. vs. A-8165-85 (NCR-LRD-M1-044-85) is therefore hereby DISMISSED. It means the ineligibility of the union members to present a petition for certification election as well as to vote therein. namely. b] payment of wages. a] selection and engagement of the employee. Jr. Alampay. The Petition in BLR Case No.. c] powers of dismissal.WMSU LLB2A MAS is sine qua non. The fundamental and essential condition that a bargaining unit be composed of employees. judgment is hereby rendered giving due course to the Petition and declaring VOID the decision of the Director of the Bureau of Labor Relations dated September 27.