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Test to Determine Existence of E-E Relationship

[G.R. No. 199166. April 20, 2015.]
ABS-CBN Corporataion employed AmaliaVillafuerte as Manager for its Regional
Network Group in Naga City. Thru Villafuerte, ABS-CBN engaged the services of
petitioners Nelson Begino (Begino) and Gener Del Valle (Del Valle) sometime in 1996
as Cameramen/Editors for TV Broadcasting. Ma. Cristina Sumayao and Monina AvilaLlorin were likewise similarly engaged as reporters. With their services engaged by
ABS-CBN thru Talent Contracts which provided terms ranging from three (3) months to
one (1) year, the petitioners, Sumayao and Llorin, were given Project Assignment Forms
which detailed the particular project they would work on as well as the budget and the
daily technical requirements thereof. In the aforesaid capacities, petitioners were tasked
with coverage of news items for subsequent daily airings in respondents TV Patrol Bicol
The Petitioners, Sumayao and Llorin, filed a complaint against ABS-CBN for their
regularization, underpayment of overtime pay, holiday pay, 13th month pay, service
incentive leave pay, damages and attorney's fees. The petitioners alleged that they
performed functions necessary and desirable in ABS-CBN's business in support of their
Although their work involved dealing with emergency situations at any time of the
day or night, petitioners claimed that they were not paid the labor standard benefits the
law extends to regular employees. To avoid paying what is due them, however,
respondents purportedly resorted to the simple expedient of using said Talent Contracts
and/or Project Assignment Forms which denominated petitioners as talents, despite the
fact that they are not actors or TV hosts of special skills. As a result of this iniquitous
situation, petitioners asseverated that they merely earned an average of P7,000.00 to
P8,000.00 per month, or decidedly lower than the P21,773.00 monthly salary ABS-CBN
paid its regular rank-and-file employees. Considering their repeated re-hiring by
respondents for ostensible fixed periods, this situation had gone on for years since TV
Patrol Bicol has continuously been aired.
Having been terminated during the pendency of the case, Petitioners filed on 10
July 2007 a second complaint against respondents, for regularization, payment of labor
standard benefits, illegal dismissal and unfair labor practice. Labor Arbiter Quiones
ruled on the matter by declaring that Llorin, Del Valle, Begino and Sumayao as regular
employees of ABS-CBN and that the latter was ordered to pay an amount representing
salaries/wage differentials, holiday pay, service incentive leave pay and 13th month pay,
to include 10% of the judgment award.

Aggrieved by the foregoing decision, respondents elevated the case on appeal
before the NLRC which ruled in affirming Labor Arbiter Quiones decision.
ABS-CBN filed the Rule 65 petition for certiorari docketed before the CA. The CA
rendered the herein assailed decision, reversing the findings of the Labor Arbiter and
the NLRC.
The Petitioners opted to file a motion for reconsideration, which was denied in a CA
resolution, hence, this petition.
Whether or not the CA erred in contradicting the determination made by both the Labor
Arbiter & NLRC of the existence of an employer-employee relationship between the
The Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or
Project Assignment Forms and the terms and condition embodied therein, petitioners
are regular employees of ABS-CBN.
To determine the existence of said relation, case law has consistently applied the fourfold test, to wit:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employer's power to control the employee on the means and methods by which
the work is accomplished.
Of these criteria, the so-called control test is generally regarded as the most crucial
and determinative indicator of the presence or absence of an employer-employee
relationship. Under this test, an employer-employee relationship is said to exist where
the person for whom the services are performed reserves the right to control not only
the end result but also the manner and means utilised to achieve the same.
TEOTIMO ESTRELLADO, respondents. [G.R. No. 205300. March 18, 2015.]
Fonterra contracted the services of Zytron Marketing and Promotions Corp. (Zytron) for
the marketing of its milk and dairy products. Pursuant to their contract, Zytron provided
Fonterra with Largado (in 2003) and Estrellado (in 2002) as trade merchandising
representatives (TMRs).
Sometime in 2006 Fonterra terminated its promotions contract with Zytron and entered
into a manpower supply agreement with A.C. Sicat Marketing and Promotional Services
(A.C. Sicat). It appears Largado and Estrellado wanted to continue as TMRs for
Fonterra and therefore they submitted their job applications with A.C. Sicat. A.C. Sicat



hired them for a term of five months.

After the expiration of the 5-month period, Largado and Estrellados contracts were not
renewed. The latter filed a case for illegal dismissal (among other claims) against
Fonterra, Zytron and A.C. Sicat but did not assert any claim against Zytron and A.C.
The Labor Arbiter found in favor of respondents. The NLRC affirmed the Labor Arbiter.
But when the case reached the Court of Appeals the CA said respondents (i.e.,
complainants in the original case before the LA) were illegally dismissed as early as
June 6, 2006 because Zytron was in its view not a legitimate job contractor (thus
making Fonterra the real employer and the one liable for respondents alleged illegal
dismissal) and respondents transfer to A.C. Sicat is tantamount to a completely new
engagement by another employer.
Issue: Whether or not there was illegal dismissal
No. The Court ruled that the respondents employment with Zytron was not illegally
terminated. As correctly held by the Labor Arbiter and the NLRC, the termination of
respondents employment with Zytron was brought about by the cessation of their
contracts with the latter. As ruled by the NLRC, (1) respondents were not illegally
dismissed. As a matter of fact, they were the ones who refused to renew their contract
and that they voluntarily complied with the requirements for them to claim their
corresponding monetary benefits in relation thereto; and (2) they were consecutively
employed by Zytron and A.C. Sicat, not by Fonterra.
By refusing to renew their contracts with Zytron, respondents effectively resigned from
the latter. Resignation is the voluntary act of employees who are compelled by personal
reasons to dissociate themselves from their employment, done with the intention of
relinquishing an office, accompanied by the act of
Here, it is obvious that respondents were no longer interested in continuing their
employment with Zytron. Their voluntary refusal to renew their contracts was brought
about by their desire to continue their assignment in Fonterra which could not happen in
view of the conclusion of Zytrons contract with Fonterra. Hence, to be able to continue
with their assignment, they applied for work with A.C. Sicat with the hope that they will
be able to continue rendering services as TMRs at Fonterra since A.C. Sicat is
Fonterras new manpower supplier. This fact is even acknowledged by the CA in the
assailed Decision where it recognized the reason why respondents applied for work at
A.C. Sicat. The CA stated that [t]o continuously work as merchandisers of Fonterra
products, [respondents] submitted their job applications to A.C. Sicat xxx.6 This is
further bolstered by the fact that respondents voluntarily complied with the requirements
for them to claim their corresponding monetary benefits in relation to the cessation of
their employment contract with Zytron.

In short, respondents voluntarily terminated their employment with Zytron by refusing to
renew their employment contracts with the latter, applying with A.C. Sicat, and working
as the latters employees, thereby abandoning their previous employment with Zytron.
Too, it is well to mention that for obvious reasons, resignation is inconsistent with illegal
dismissal. This being the case, Zytron cannot be said to have illegally dismissed
respondents, contrary to the findings of the CA.
LIZA and RAMON ESCUETA, Respondents. [G.R NO. 170087, AUGUST 31, 2006]
Petitioner was hired by Kasei Corporation during its incorporation stage. She
was designated as Accountant and Corporate Secretary and was assigned to handle all
the accounting needs of the company, however she was not entrusted with the
corporate documents; neither did she attend any board meeting nor required to do so.
She never prepared any legal document and never represented the company as its
Corporate Secretary, but she was prevailed upon to sign documentation for the
company. She was also designated as Liason Officer to secure business permits,
construction permits and other licenses for the initial operation of the company.
In 1996, petitioner was designated Acting Manager, she was assigned to
handle recruitment of all employees and perform management administration functions.
For 5 years, petitioner performed the duties of Acting Manager.
In January 2001, petitioner was replaced by Liza R. Fuentes as Manager and
the petitioner was assured that she would still be connected with Kasei Corporation as
Technical Assistant to Seiji Kamura and in charge of all BIR matters. Petitioner did not
receive her salary from the company and was informed that she is no longer connected
with the company. Petitioner filed an ction for constructive dismissal before the labor
Private respondents averred that petitioner is not an employee of Kasei
Corporation. They alleged that as technical consultant, petitioner performed her work at
her own discretion without control and supervision of Kasei Corporation. She had no
daily time record and she came to the office any time she wanted. The company never
interfered with her work except that from time to time, the management would ask her
opinion on matters relating to her profession. The petitioner did not go through the usual
procedure of selection of employees and her designation as technical consuktant
depended solely upon the will of management. As such, her consultancy may be
terminated any time considering that her services were only temporary in nature and
dependent on the needs of the corporation.
ISSUE: Won there was an employer-employee relationship between the parties.
In certain cases the control test is not sufficient to give a complete picture of
the relationship between the parties, owing to the complexity of such a relationship
where several positions have been held by the worker. There are instances when, aside
from the employers power to control the employee with respect to the means and
methods by which the work is to be accomplished, economic realities of the



employment relations help provide a comprehensive analysis of the true classification of

the individual, whether as employee, independent contractor, corporate officer or some
other capacity.
The better approach would therefore be to adopt a two-tiered test involving: 1)
putative employers power to control the employee with respect to the means and
methods by which the work is to be accomplished; and 2) the underlying economic
realities of the activity or relationship. This two-tiered test would provide us with a
framework of analysis, which would take into consideration the totality of circumstances
surrounding the true nature of the relationship between the parties. This is especially
appropriate in this case where there is no written agreement or terms of reference to
base the relationship on; and due to the complexity of the relationship based on the
various positions and responsibilities given to the worker over the period of the latters
The determination of the relationship between employer and employee
depends upon the circumstances of the whole economic activity, such as: 1) the extent
to which the services performed are an integral part of the employers business; 2) the
extent of the workers investment in equipment and facilities; 3) the nature and degree
of control exercised by the employer; 4) the workers opportunity for profit or loss; 5) the
amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; 6) the permanency and duration of the relationship between the
worker and the employer; and 7) the degree of dependency of the worker upon the
employer of his continued employment in that line of business.
The proper standard of economic dependence is whether the worker is
dependent on the alleged employer for his continued employment in that line of
business. Based on the foregoing, there can be no other conclusion that petitioner is an
employee of respondent Kasei Corporations. She was selected and engaged by the
company for compensation, and is economically dependent upon respondent for her
continued employment in that line of business. Her main job function involved
accounting and tax services rendered to respondent corporation on a regular basis over
an indefinite period of engagement. Respondent corporation hired and engaged
petitioner for compensation, with the power to dismiss her for cause. More importantly,
respondent corporation had the power to control petitioner with the means and methods
by which the work is to be accomplished.

if he was seen oncompany



forthe release of his taxi (overhauled

due tomechanical defects)

Dismissed because of the

unfoundedsuspicion that he was
organizing alabor union

Company denies that Francisco is


Dismissed after falling short of

therequired boundary for his taxi
unit; fellshort because of P700
spent on anurgent repair

Company admits that Endraca is an

employee spare driver. Endraca could
not have been terminated inMarch
2006 because he stopped reporting
forwork in July 2003 (but willing to
accommodatehim again as he was
never really dismissed)

Tenazas, Francisco, and Endraca also filed a Motion to Admit Additional Evidence:
(a) Joint Affidavit of the petitioners; (b) Affidavit of Good Faith of Aloney Rivera (co
-driver); (c) pictures of the petitioners wearing company shirts; (d) Tenazas
Certification/Record of Social Security System (SSS) contributions.
LA: No illegal dismissal because no proof of an overt act of dismissal committed
by R. Villegas Taxi; Francisco failed to prove he was an employee
NLRC: Reversed LA; the additional evidence sufficiently established the
existence of employer-employee relationship and illegal dismissal (for all three)
CA: Tenazas and Endraca were indeed employees and were illegally
dismissed, but Francisco failed to establish his relationship with the company
ISSUE: WON there was an employer-employee relationship (re: Francisco) NO


[G.R. No. 192998, April 2, 2014]
FACTS: Bernard Tenazas, Jaime Francisco, and Isidro Endraca filed a complaint for
illegaldismissal against R. Villegas Taxi Transport, and/or Romualdo Villegas and
Andy Villegas.


Taxi unit was sideswiped by

anothervehicle (damage = P500);
fired afterreporting the incident,
even threatenedw/ physical harm


Company admits that Tenazas is an
employee regular driver. Tenazas was
never terminated; he failed toreport
back to work after being told to wait

The burden of proof rests upon the party who asserts the affirmative of an
issue. As Francisco was claiming to be an employee of R. Villegas Taxi, it is
incumbent upon him to proffer evidence to prove the existence of the relationship.
There is no hard and fast rule to establish the elements of employer-employee
relationship. Any competent and relevant evidence may be admitted, e.g.,
identification cards, cash vouchers, social security registration, appointment letters
or employment contracts, payrolls, organization charts, personnel lists.
Francisco failed to present substantial evidence to establish the relationship.
No documentary evidence submitted, like an attendance logbook, payroll, SSS
record, or any personnel file that depicts his status as an employee. He could also
have at least presented his social security records stating his contributions, name
and address of employer (which Tenazas presented). Another taxi operator,
Emmanuel Villegas, also claimed to be his employer a fact not denied or



questioned by Francisco in any of his pleadings.

Petition DENIED. SC agreed with CAs order of reinstatement instead of
separation pay. (*Strained relations must be demonstrated as a fact. In this case, no
facts demonstrated that the relations were so strained as to make reinstatement no
longer a feasible option.)
ESTANISLAO1 AGBAY, Petitioners, vs.JESUS J. COMING, Respondent.
[G.R. No. 186621 March 12, 2014]
Petitioner South East International Rattan, Inc. (SEIRI) is a domestic
corporation engaged in the business of manufacturing and exporting furniture to various
countries with principal place of business at Paknaan, Mandaue City, while petitioner
EstanislaoAgbay, as per records, is the President and General Manager of SEIRI.4On
November 3, 2003, respondent Jesus J. Coming filed a complaint 5 for illegal dismissal,
underpayment of wages, non-payment of holiday pay, 13th month pay and service
incentive leave pay, with prayer for reinstatement, back wages, damages and attorneys
Respondent alleged that he was hired by petitioners as Sizing Machine
Operator on March 17, 1984. Initially, his compensation was on "pakiao" basis but
sometime in June 1984, it was fixed at P150.00 per day which was paid weekly. Without
any apparent reason, his employment was interrupted as he was told by petitioners to
resume work in two months time. Being an uneducated person, respondent was
persuaded by the management as well as his brother not to complain, as otherwise
petitioners might decide not to call him back for work. Fearing such consequence.
Respondent was dismissed on January 1, 2002 without lawful cause. He was
told that he will be terminated because the company is not doing well financially.
REGIONAL ARBITRATION BRANCH - Almost passed when he finally filed the
complaint before the regional arbitration branch. Petitioners denied having hired
respondent asserting that SEIRI was incorporated only in 1986, and that respondent
actually worked for SEIRIs furniture suppliers because when the company started in
1987 it was engaged purely in buying and exporting furniture and its business
operations were suspended from the last quarter of 1989 to August 1992. They stressed
that respondent was not included in the list of employees.
With the denial of petitioners that respondent was their employee, the latter
submitted an affidavit11 signed by five former co-workers stating that respondent was
one of the pioneer employees who worked in SEIRI for almost twenty years.
In his Decision12 dated April 30, 2004, Labor Arbiter Ernesto F. Carreon ruled
that respondent is a regular employee of SEIRI and that the termination of his
employment was illegal.
NLRC - Petitioners appealed to the National Labor Relations
WHEREFORE, premises considered, the decision of the Labor Arbiter is
hereby SET ASIDE and VACATED and a new one entered DISMISSING the complaint.
NLRC likewise denied respondents motion for reconsideration.19

COURT OF APPEALS - Respondent elevated the case to the CA via a petition for
certiorari under Rule 65. CA reversed the NLRC and ruled that there existed an
employer-employee relationship between petitioners and respondent who was
dismissed without just and valid cause.
Labor Arbiter is directed to make the proper adjustment in the computation of
the award of separation pay as well as the monetary awards of wage differential, 13th
month pay, holiday pay and service incentive leave pay.
Petitioners filed a motion for reconsideration but the CA denied it
1. Whether or Not there exist employer-employee relationship
2. Whether or not Coming was illegaly dismissed
The issue of whether or not an employer-employee relationship exists in a
given case is essentially a question of fact. As a rule, this Court is not a trier of facts and
this applies with greater force in labor cases.22 Only errors of law are generally reviewed
by this Court.23 This rule is not absolute, however, and admits of exceptions. For one,
the Court may look into factual issues in labor cases when the factual findings of the
Labor Arbiter, the NLRC, and the CA are conflicting.
To ascertain the existence of an employer-employee relationship jurisprudence
has invariably adhered to the four-fold test, to wit: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power
to control the employees conduct, or the so-called "control test."26 In resolving the issue
of whether such relationship exists in a given case, substantial evidence is sufficient.
Although no particular form of evidence is required to prove the existence of the
relationship, and any competent and relevant evidence to prove the relationship may be
admitted, a finding that the relationship exists must nonetheless rest on substantial
x xx As to the "control test", the following facts indubitably reveal that
respondents wielded control over the work performance of petitioner, to wit: (1) they
required him to work within the company premises; (2) they obliged petitioner to report
every day of the week and tasked him to usually perform the same job; (3) they
enforced the observance of definite hours of work from 8 oclock in the morning to 5
oclock in the afternoon; (4) the mode of payment of petitioners salary was under their
discretion, at first paying him on pakiao basis and thereafter, on daily basis; (5) they
implemented company rules and regulations; (6) [Estanislao] Agbay directly paid
petitioners salaries and controlled all aspects of his employment and (7) petitioner
rendered work necessary and desirable in the business of the respondent company.34
The Court held that the fact that a worker was not reported as an employee to
the SSS is not conclusive proof of the absence of employer-employee relationship. Nor
does the fact that respondents name does not appear in the payrolls and pay envelope
records submitted by petitioners negate the existence of employer-employee
relationship. For a payroll to be utilized to disprove the employment of a person, it must
contain a true and complete list of the employee. 37 In this case, the exhibits offered by
petitioners before the NLRC consisting of copies of payrolls and pay earnings records



are only for the years 1999 and 2000; they do not cover the entire 18-year period during
which respondent supposedly worked for SEIRI.
Petitioners admission that the five affiants were their former employees is
binding upon them. While they claim that respondent was the employee of their
suppliers Mayol and Apondar, they did not submit proof that the latter were indeed
independent contractors; clearly, petitioners failed to discharge their burden of proving
their own affirmative allegation.40
In any controversy between a laborer and his master, doubts reasonably
arising from the evidence are resolved in favor of the laborer.41
As a regular employee, respondent enjoys the right to security of tenure under
Article 27942 of the Labor Code and may only be dismissed for a just 43 or
authorized44 cause, otherwise the dismissal becomes illegal.
Respondent, whose employment was terminated without valid cause by
petitioners, is entitled to reinstatement without loss of seniority rights and other
privileges and to his full back wages, inclusive of allowances and other benefits or their
monetary equivalent, computed from the time his compensation was withheld from him
up to the time of his actual reinstatement. Where reinstatement is no longer viable as an
option, back wages shall be computed from the time of the illegal termination up to the
finality of the decision. Separation pay equivalent to one month salary for every year of
service should likewise be awarded as an alternative in case reinstatement in not
WHEREFORE, the petition for review on certiorari is DENIED. The Decision
dated February 21, 2008 and Resolution dated February 9, 2009 of the Court of
Appeals in CA-G.R. No. CEB-SP No. 02113 are hereby AFFIRMED and UPHELD.
184885, March 7, 2012]

Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting

Corporation (ABS-CBN) in 1993 at its regional station in Cebu as a television talent,
co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended
to radio when ABS-CBN Cebu launched its AM station DYAB in 1995 where he
worked as drama and voice talent, spinner, scriptwriter and public affairs program

Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995,
he worked as talent, director and scriptwriter for various radio programs aired over

On January 1, 1996, the ABS-CBN Head Office in Manila issued the POLICY ON
EMPLOYEES SEEKING PUBLIC OFFICE (The Policy for brevity). The pertinent
portions read:


Any employee who intends to run for any public office
position, must file his/her letter of resignation, at least 30 days prior to the
official filing of the certificate of candidacy either for national or local election.
2. Further, any employee who intends to join a political group/party or
even with no political affiliation but who intends to openly and
aggressively campaign for a candidate or group of candidates must file a
request for leave of absence subject to managements approval. at least
30 days prior to the start of the planned leave period.
Because of the impending May 1998 elections and based on his immediate
recollection of the policy at that time, Dante Luzon, Asst. Station Manager of DYAB
issued a MEMORANDUM stating the ff:
any employee/talent who wants to run for any position in the
coming election will have to file a leave of absence the moment
he/she files his/her certificate of candidacy. The services rendered
by the concerned employee/talent to this company will then be
temporarily suspended for the entire campaign/election period.
Luzon, however, admitted that upon double-checking of the exact text of the Policy
and subsequent confirmation with the ABS-CBN Head Office, he saw that the
Policy actually required SUSPENSION for those who intend to campaign for a
political party or candidate and RESIGNATION for those who will actually run in the
After the issuance of said Memorandum, Luzon claims that Ymbong informed him
that he would leave radio for a couple of months because he will campaign for the
administration ticket. However, it was only after the elections that they found
out that Ymbong actually ran for public office himself at the eleventh hour.
Ymbong, on the other hand, claims that in accordance with the Memorandum, he
informed Luzon through a letter that he would take a few months leave of
absence from March 8, 1998 to May 18, 1998 since he was running for
councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug approached Luzon and advised him that he
will run as councilor for Naga, Cebu. According to Luzon, he clarified to Patalinghug
that he will be considered resigned and not just on leave once he files a certificate
of candidacy. Patalinghug, thereafter submitted to Luzon his Letter of
Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections. Later,
both tried to come back to ABS-CBN Cebu but only to be informed by Luzon that
they cannot work there anymore because of company policy.

ABS-CBN, however, agreed out of pure liberality to give them a chance to

wind up their participation in the radio drama, Nagbabagang Langit, since it
was rating well and to avoid an abrupt ending. The WINDING-UP, however,
dragged on for so long prompting Luzon to issue to Ymbong ANOTHER
MEMORANDUM (dated September 14, 1998) stating that his services are being
terminated immediately, much to the surprise of Ymbong.



Arguing that the ground cited by ABS-CBN for his dismissal was not
among those enumerated in the Labor Code. And even granting without
admitting the existence of the company policy supposed to have been
violated, Ymbong averred that it was necessary that the company policy
meet certain requirements before willful disobedience of the policy may
constitute a just cause for termination. Ymbong further argued that the
company policy violates his constitutional right to suffrage.

Patalinghug likewise filed an illegal dismissal complaint against ABS-CBN.

ABS-CBN prayed for the dismissal of the complaints arguing that there is no
employer-employee relationship between the company and Ymbong and
Patalinghug. ABS-CBN contended that they are not employees but TALENTS
as evidenced by their talent contracts. However, notwithstanding their status,
ABS-CBN has a standing policy on persons connected with the company whenever
they will run for public office.


Dismissal of Ymbong and Patalinghug ILLEGAL, directing respondent ABS-CBN to

immediately reinstate complainants to their former positions without loss of seniority
rights plus the payment of backwages to each complainant.


Ymbong thus filed an ILLEGAL DISMISSAL COMPLAINT against ABSCBN, Luzon and DYAB Station Manager Veneranda Sy.

In its Memorandum of Appeal, ABS-CBN contended that the LA has no jurisdiction

over the case because there is no employer-employee relationship between the
company and the complainants

In its Supplemental Appeal, ABS-CBN insisted that Ymbong and Patalinghug were
engaged as radio talents for DYAB dramas and personality programs and their
contract is one between a self-employed contractor and the hiring party which is a
standard practice in the broadcasting industry.


MODIFIED the decision of L.A. Nicasio C. Aninon, ordering ABS-CBN to reinstate

Ymbong and to pay his full backwages.

NLRC dismissed ABS-CBNs Supplemental Appeal for being filed out of time.

NLRC also held that ABS-CBN wielded the power of control over Ymbong and
Patalinghug, thereby proving the existence of an employer-employee
relationship between them.

As to the issue of whether they were illegally dismissed, the NLRC treated their

LA found that there exists an employer-employee relationship between ABSCBN and Ymbong and Patalinghug considering the stipulations in their
appointment letters/talent contracts.

LA noted particularly that the appointment letters/talent contracts

IMPOSED conditions in the performance of their work, specifically on
attendance and punctuality, which effectively placed them under the
control of ABS-CBN.

that although the subject company policy is reasonable and not contrary to
law, the same was not made known to Ymbong and Patalinghug and in
fact was SUPERSEDED by the 1998 Memorandum issued by
Luzon. Thus, there is no valid or authorized cause in terminating
Ymbong and Patalinghug from their employment.


it found that PATALINGHUG voluntarily resigned from employment

when he submitted his resignation letter, although the tenor of the
resignation letter is somewhat involuntary

As to YMBONG, NLRC ruled otherwise. That the Memorandum merely

states that an employee who seeks any elected position in the
government will only merit the temporary suspension of his services. It
held that under the principle of social justice, the March 25, 1998
Memorandum shall prevail and ABS-CBN is estopped from enforcing the
September 14, 1998 Memorandum issued to Ymbong stating that his
services had been automatically terminated when he ran for an elective

Imputing grave abuse of discretion on the NLRC, ABS-CBN filed a petition

for certiorari before the CA



REVERSED and SET ASIDE the Decision and Resolution of the NLRC.

Declared Ymbong resigned from employment and not to have been

illegally dismissed.

ruled that ABS-CBN is ESTOPPED from claiming that Ymbong was not its
employee after applying the provisions of the Policy. It noted that the
guidelines contained in the Policy specifically pertain to EMPLOYEES
and did not even mention TALENTS or INDEPENDENT
CONTRACTORS. By applying the subject company policy on
Ymbong, ABS-CBN had explicitly recognized him to be an employee
and not merely an independent contractor.

that the subject company policy is the controlling guideline and that
there is no illegal dismissal to speak of in the instant case as
Ymbong is considered resigned when he ran for an elective post
pursuant to the subject company policy.

Luzon had no authority to issue a memorandum that had the effect of

repealing or superseding a subsisting policy.

Hence, this petition.

(1) whether the subject Company Policy is valid; - YES
(2) whether Ymbong, by seeking an elective post, is deemed to have resigned and not
dismissed by ABS-CBN. YES
1. Policy No. HR-ER-016 is valid.

This is not the first time that this Court has dealt with a policy similar to Policy No.
HR-ER-016. In the case of Manila Broadcasting Company v. NLRC, this Court
What is involved in this case is an unwritten company policy
considering any employee who files a certificate of candidacy for any
elective or local office as resigned from the company.

Although 11(b) of R.A. No. 6646 does not require mass media
commentators and announcers such as private respondent to resign from
their radio or TV stations but only to go on leave for the duration of the
campaign period, we think that the company may nevertheless validly
require them to resign as a matter of policy.
In this case, the POLICY is justified on the following grounds:


Working for the government and the company at the same time is
clearly disadvantageous and prejudicial to the rights and interest
not only of the company but the public as well. In the event an
employee wins in an election, he cannot fully serve, as he is
expected to do, the interest of his employer. The employee has to
serve two (2) employers, obviously detrimental to the interest of
both the government and the private employer.

In the event the employee loses in the election, the impartiality

and cold neutrality of an employee as broadcast personality is
suspect, thus readily eroding and adversely affecting the
confidence and trust of the listening public to employers station.

so long as a companys MANAGEMENT PREROGATIVES are exercised

in good faith for the advancement of the employers interest and not for the
purpose of defeating or circumventing the rights of the employees under
special laws or under valid agreements, this Court will uphold them.

In the instant case, ABS-CBN validly justified the implementation of

the Policy. It is well within its rights to ensure that it maintains its
objectivity and credibility and freeing itself from any appearance of
impartiality so that the confidence of the viewing and listening public in it
will not be in any way eroded.

Even as the law is solicitous of the welfare of the employees, it must

also protect the right of an employer to exercise what are clearly
management prerogatives. The free will of management to conduct
its own business affairs to achieve its purpose cannot be denied.

2. Ymbong is deemed resigned when he ran for councilor.

As Policy No. HR-ER-016 (subject policy) is the subsisting company policy and
not Luzons March 25, 1998 Memorandum, Ymbong is deemed resigned when he
ran for councilor.

We find no merit in Ymbongs argument that [his] automatic termination x x x

was a blatant [disregard] of [his] right to due process as he was never asked
to explain why he did not tender his resignation before he ran for public
office as mandated by [the subject company policy].

separated from ABS-CBN not because he was dismissed but because he



Since there was no termination to speak of, the requirement of due process in
dismissal cases cannot be applied to Ymbong.

Thus, ABS-CBN is not duty-bound to ask him to explain why he did not tender his
resignation before he ran for public office as mandated by the subject company

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.
179652, MARCH 6,2012]
Private respondent Jandeleon Juezan filed a complaint against petitioner with
the Department of Labor and Employment (DOLE) for illegal deduction, nonpayment of
service incentive leave, 13th month pay, premium pay for holiday and rest day and
illegal diminution of benefits, delayed payment of wages and noncoverage of SSS,
PAG-IBIG and Philhealth. The DOLE Regional Director found that private respondent
was an employee of petitioner, and was entitled to his money claims. Hence, there is an
employer-employee ralationship. When the matter was brought before the CA it was
held DOLE Secretary had jurisdiction over the matter.The case was elevated to the
Supreme Court which found that there was no employer-employee relationship between
petitioner and private respondent. It was held that while the DOLE may make a
determination of the existence of an employer-employee relationship, this function could
not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of
the Labor Code, as amended by RA 7730. The National Labor Relations Commission
(NLRC) was held to be the primary agency in determining the existence of an employeremployee relationship. From this Decision, the Public Attorneys Office (PAO) filed a
Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as
to when the visitorial and enforcement power of the DOLE be not considered as coextensive with the power to determine the existence of an employer-employee

based on the evidence presented. Private respondent presented self-serving allegations
as well as self-defeating evidence. The findings of the Regional Director were not based
on substantial evidence, and private respondent failed to prove the existence of an
employer-employee relationship. The DOLE had no jurisdiction over the case, as there
was no employer-employee relationship present.
CASTILLO, respondents [G.R. No. 192558, February 15, 2012]

On May 23, 2008, Javier filed a complaint before the NLRC for UNDERPAYMENT

He alleged:
that he was an employee of Fly Ace since September 2007, performing
various tasks at the respondents warehouse such as cleaning and
arranging the canned items before their delivery to certain locations,
except in instances when he would be ordered to accompany the
companys delivery vehicles, as pahinante; Reporting for work from
Monday to Saturday from 7AM 5PM.
o that during his employment, he was not issued an identification card and
payslips by the company;
o that on May 6, 2008, he reported for work but he was no longer allowed to
enter the company premises by the security guard upon the instruction of
Ruben Ong (Mr. Ong), his superior,
o that after several minutes of begging to the guard to allow him to enter, he
saw Ong whom he approached and asked why he was being barred from
entering the premises to which Ong replied by saying, Tanungin mo anak
o that he discovered Ong had been courting his daughter Annalyn, who tried
to talk to Ong and convince him to spare her father from trouble but he
refused to accede;
o that thereafter, Javier was terminated from his employment without
notice; and was neither given the opportunity to refute the cause/s of
his dismissal from work.

ISSUE: WON DOLE has jurisdiction to determine the ER-EE relationship.

No. If a complaint is brought before the DOLE to give effect to the labor standards
provisions of the Labor Code or other labor legislation, and there is a finding by the
DOLE that there is an existing employer-employee relationship, the DOLE exercises
jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employeremployee relationship, the jurisdiction is properly with the NLRC. In the present case,
the finding of the DOLE Regional Director that there was an employer-employee
relationship has been subjected to review by this Court, with the finding being that there
was no employer-employee relationship between petitioner and private respondent,

To support his allegations, Javier presented an affidavit of one Bengie Valenzuela

who alleged that Javier was a stevedore or pahinante of Fly Ace from September
2007 to January 2008. The said affidavit was subscribed before the Labor
Arbiter (LA).
Fly Ace averred that it was engaged in the business of importation and sales of
groceries. Sometime in December 2007, Javier was contracted by its employee,
Mr. Ong, as extra helper on a pakyaw basis at an agreed rate of 300.00 per trip,
which was later increased to 325.00 in January 2008. Mr. Ong contracted Javier
roughly 5 to 6 times only in a month whenever the vehicle of its contracted hauler,
Milmar Hauling Services, was not available. On April 30, 2008, Fly Ace no longer
needed the services of Javier. Denying that he was their employee, Fly Ace
insisted that there was no illegal dismissal. Fly Ace submitted a copy of its
agreement with Milmar Hauling Services and copies of acknowledgment receipts



evidencing payment to Javier for his contracted services bearing the words, daily
manpower (pakyaw/piece rate pay) and the latters signatures/initials.

On November 28, 2008, the LA DISMISSED the complaint for lack of merit on the
ground that Javier failed to present proof that he was a regular employee of
Fly Ace.
o His contention that Respondent failed to give him said ID and payslips
implies that indeed he was not a regular employee of Fly Ace considering
that complainant was a helper and that Respondent company has
contracted a regular trucking for the delivery of its products.
o Respondent Fly Ace is not engaged in trucking business but in the
importation and sales of groceries. Since there is a regular hauler to
deliver its products, we give credence to Respondents claim that
complainant was contracted on pakiao basis.
o As to the claim for underpayment of salaries, the payroll presented by
the Respondents showing salaries of workers on pakiao basis has
evidentiary weight because although the signature of the complainant
appearing thereon are not uniform, they appeared to be his true signature.

On appeal with the NLRC, Javier was favored. It ruled that the LA skirted
the argument of Javier and immediately concluded that he was not a
regular employee simply because he failed to present proof. It was of
the view that a pakyaw-basis arrangement did not preclude the existence
of employer-employee relationship.

Finding Javier to be a regular employee, the NLRC ruled that he was

entitled to a security of tenure. For failing to present proof of a valid cause
for his termination, Fly Ace was found to be liable for illegal dismissal of
Javier who was likewise entitled to backwages (45,770.83) and
separation pay in lieu of reinstatement (8,450.00).

On March 18, 2010, the CA ANNULLED the NLRC findings that Javier was indeed
a former employee of Fly Ace and REINSTATED the dismissal of Javiers
complaint as ordered by the LA.
In an illegal dismissal case the onus probandi rests on the employer to prove that
its dismissal was for a valid cause. However, before a case for illegal dismissal
can prosper, an EMPLOYER-EMPLOYEE RELATIONSHIP must first be
established. it is incumbent upon private respondent to prove the employeeemployer relationship by substantial evidence.
It is incumbent upon private respondent to prove, by substantial evidence,
that he is an employee of petitioners, but he failed to discharge his burden.
The non-issuance of a company-issued identification card to private respondent
supports petitioners contention that private respondent was NOT its employee.


Further, it found that Javiers work was NOT necessary and desirable to the
business or trade of the company, as it was only when there were scheduled
deliveries, which a regular hauling service could not deliver, that Fly Ace would
contract the services of Javier as an extra helper. Lastly, the CA declared that the
facts alleged by Javier did not pass the control test.

Hence, this appeal.

1. WON the CA erred in holding that the petitioner was not a regular employee of
2. WON the CA erred in holding that the petitioner is not entitles to his monetary
claims NO


It must be noted that the issue of Javiers alleged illegal dismissal is anchored on
the existence of an EMPLOYER-EMPLOYEE RELATIONSHIP between him and
Fly Ace. This is essentially a question of fact.

Generally, the Court does not review errors that raise factual questions. However,
when there is conflict among the factual findings of the antecedent deciding
bodies like the LA, the NLRC and the CA, "it is proper, in the exercise of Our
equity jurisdiction, to review and re-evaluate the factual issues and to look
into the records of the case and re-examine the questioned findings." In
dealing with factual issues in labor cases, "substantial evidence that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion is sufficient."

As the records bear out, the LA and the CA found Javiers claim of employment with
Fly Ace as wanting and deficient. The Court is constrained to agree. Although
Section 10, Rule VII of the New Rules of Procedure of the NLRC allows a
relaxation of the rules of procedure and evidence in labor cases, this rule of
liberality does not mean a complete dispensation of proof.

In sum, the rule of thumb remains: the ONUS PROBANDI falls on petitioner to
establish or substantiate such claim by the requisite quantum of
evidence. "Whoever claims entitlement to the benefits provided by law should
establish his or her right thereto. Javier failed to adduce substantial evidence as
basis for the grant of relief.

While Javier remains firm in his position that as an employed stevedore of Fly Ace,
he was made to work in the company premises during weekdays arranging and
cleaning grocery items for delivery to clients, no other proof was submitted to



fortify his claim. The lone affidavit executed by one Bengie Valenzuela was
unsuccessful in strengthening Javiers cause. The Court cannot ignore the
inescapable conclusion that his mere presence at the workplace falls short in
proving employment therein. The supporting affidavit could have, to an extent,
bolstered Javiers claim of being tasked to clean grocery items when there were no
scheduled delivery trips, but no information was offered in this subject simply
because the witness had no personal knowledge of Javiers employment

The Court is of the considerable view that on Javier lies the burden to pass the
well-settled tests to determine the existence of an EMPLOYER-EMPLOYEE
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the power to control the employees conduct not only as to the result of the
work but also as to the means and methods by which the result is to be
accomplished. (most important)

In this case, Javier was not able to persuade the Court that the above elements
exist in his case.

Fly Ace does not dispute having contracted Javier and paid him on a "per trip" rate
as a stevedore, albeit on a pakyaw basis. The Court cannot fail to note that Fly Ace
presented documentary proof that Javier was indeed paid on a pakyaw basis per
the acknowledgment receipts admitted as competent evidence by the LA.
Unfortunately for Javier, his mere denial of the signatures affixed therein cannot
automatically sway us to ignore the documents because "forgery cannot be
presumed and must be proved by clear, positive and convincing evidence and the
burden of proof lies on the party alleging forgery."
Considering the above findings, the Court does not see the necessity to
resolve the second issue presented.

The Courts decision does not contradict the settled rule that "payment by the piece
is just a method of compensation and does not define the essence of the
relation." Payment on a piece-rate basis does not negate regular employment.
"The term wage is broadly defined in Article 97 of the Labor Code as remuneration
or earnings, capable of being expressed in terms of money whether fixed or
ascertained on a time, task, piece or commission basis. Payment by the piece is
just a method of compensation and does not define the essence of the


relations. Nor does the fact that the petitioner is not covered by the SSS affect the
employer-employee relationship. However, in determining whether the
relationship is that of employer and employee or one of an independent
contractor, each case must be determined on its own facts and all the features
of the relationship are to be considered.
While the Constitution is committed to the policy of social justice and the protection
of the working class, it should not be supposed that every labor dispute will be
automatically decided in favor of labor. Management also has its rights which are
entitled to respect and enforcement in the interest of simple fair play. Out of its
concern for the less privileged in life, the Court has inclined, more often than not,
toward the worker and upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded the Court to the rule that justice is in every
case for the deserving, to be dispensed in the light of the established facts and the
applicable law and doctrine.


On November 1, 1990, respondent PLDT and the Security and Safety Corporation of
the Philippines (SSCP) entered into a Security Services Agreement whereby the latter
would provide armed security guards to PLDT to be assigned to its various offices.
Pursuant thereto, petitioners Locsin and Tomaquin, among other security guards, were
posted at a PLDT office.
PLDT terminated the Agreement effective October 1, 2001. However, despite such
termination, petitioners continued to secure the premises of their assigned office and
were allegedly directed to remain at their post by PLDT representatives. In support of
their contention, petitioners provided the Labor Arbiter with copies of Locsins pay slips.
On September 30, 2002, petitioners services were terminated. Thus, petitioners filed a
complaint before the Labor Arbiter for illegal dismissal and recovery of money claims
such as overtime pay, holiday pay, premium pay for holiday and rest day, service
incentive leave pay, Emergency Cost of Living Allowance, and moral and exemplary
damages against PLDT.
The Labor Arbiter rendered a Decision finding PLDT liable for illegal dismissal and
ordered to pay petitioners separation pay and back wages. Petitioners were found to be
employees of PLDT and not of SSCP through the factual finding that petitioners
continued to serve as guards of PLDTs offices.
PLDT appealed the above Decision to the NLRC which rendered a Resolution affirming
in toto the Arbiters Decision. Thus, PDLT filed a Motion for Reconsideration of the
NLRCs Resolution which was also denied.




PLDT filed a Petition for Certiorari with the CA asking for the nullification of the
Resolution issued by the NLRC as well as the Labor Arbiters Decision. The CA
rendered the assailed decision granting PLDTs petition and dismissing petitioners
complaint. The CA applied the four-fold test in order to determine the existence of an
employer-employee relationship between the parties but did not find such relationship. It
determined that SSCP was not a labor-only contractor and was an independent
contractor having substantial capital to operate and conduct its own business. The CA
further bolstered its decision by citing the Agreement whereby it was stipulated that
there shall be no employer-employee relationship between the security guards and

Thus, the Secretary of Labor issued Department Order No. 18-2002, Series of 2002,
implementing Art. 106 as follows:

From such assailed decision, petitioners filed a motion for reconsideration which was
denied in the assailed resolution. Hence, this petition.

(ii) the contractor does not exercise the right to control over the performance of the work
of the contractual employee.

W/N petitioners extended services to PLDT from the effectivity of the termination
constitutes an employer-employee relationship between respondent and the

YES. An Employer-Employee Relationship Existed Between the Parties. Rule 131,
Section 3(y) of the Rules of Court provides:
SEC. 3. Disputable presumptions.The following presumptions are satisfactory if
uncontradicted, but may be contradicted and overcome by other evidence:
(y) That things have happened according to the ordinary course of nature and the
ordinary habits of life.
In the ordinary course of things, responsible business owners or managers would not
allow security guards of an agency with whom the owners or managers have severed
ties with to continue to stay within the business premises, because upon the termination
of the owners or managers agreement with the security agency, the agencys
undertaking of liability for any damage that the security guard would cause has already
been terminated.
With the conclusion that respondent directed petitioners to remain at their posts and
continue with their duties, it is clear that respondent exercised the power of control over
them; thus, the existence of an employer-employee relationship. Such power of control
has been explained as the right to control not only the end to be achieved but also the
means to be used in reaching such end, and control is the most important element in
the determination of the existence of an employer-employee relationship. In Pacific
Consultants International Asia, Inc. v. Schonfeld, the Court set out the four elements
such relationship: (a) the selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the employers power to control the
employees conduct.

Section 5. Prohibition against labor-only contracting.Labor-only contracting is hereby

declared prohibited. For this purpose, labor-only contracting shall refer to an
arrangement where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal, and any of the following
elements are present:

The foregoing provisions shall be without prejudice to the application of Article 248 (C)
of the Labor Code, as amended. xxx
The right to control shall refer to the right reserved to the person for whom the services
of the contractual workers are performed, to determine not only the end to be achieved,
but also the manner and means to be used in reaching that end.
Evidently, PLDT having the power of control over petitioners must be considered as
petitioners employer from the termination of the Agreement onwards as this was the
only time that any evidence of control was exhibited by respondent over petitioners.
Thus, petitioners were entitled to the rights and benefits of employees of PLDT,
including due process requirements in the termination of their services. Respondent is
guilty of illegal dismissal.


NATIVIDAD and ENRIQUE AGANA, respondents, [G.R. No. 126297, February 11,
FACTS :On April 4, 1984, Natividad Agana was admitted at the Medical City General
Hospital due to bloody anal discharge. She was diagnosed to be suffering from cancer
of the sigmoid and was operated by Dr. Ampil. However, during the operation, it was
found to be flawed because 2 sponges were left in the patients body due to negligence.
Natividad and her husband later filed with the RTC of Quezon City a complaint for
damages against PSI, (owner of Medical City) Dr. Ampil and Dr. Fuentes.
The trial court rendered judgment in favor of the Aganas and found PSI, Dr.
Ampil and Dr. Fuentes jointly and severally liable. On appeal, the Court of Appeals
affirmed the assailed judgment with modification in the sense that the complaint against
Dr. Fuentes was dismissed. In 2007, the Supreme Court First Division rendered a
decision holding PSI jointly and severally liable with Dr. Ampil. PSI moved for a motion
for reconsideration assailing that there is no employer-employee relationship between it
and its consultant, Dr. Ampil.



ISSUE: WON there is an employer-employee relationship between the hospital and its
HELD: The Court relied its decision in on Ramos v. Court Appeals, holding that for the
purpose of apportioning responsibility in medical negligence cases, an employeremployee relationship in effect exists between hospitals and their attending and visiting
physicians. PSIs act of publicly displaying in the lobby of the Medical City the names
and specializations of its accredited physicians, including Dr. Ampil, estopped it from
denying the existence of an employer-employee relationship between them under the
doctrine of ostensible agency or agency by estoppe. PSIs further failure to supervise
Dr. Ampil and its resident physicians and nurses and to take an active step in order to
remedy their negligence rendered it directly liable under the doctrine of corporate
Hospitals exercise significant control in the hiring and firing of consultants and
in the conduct of their work within the hospital premises. In other words, private
hospitals hire, fire, and exercise real control over their attending and visiting consultant
staff. In the instant case, PSI merely offered a general denial of responsibility,
maintaining that Dr. Ampil is an independent contractor, not employee of the hospital.
Still, the hospital is liable to the Aganas. The hospital need not make express
representations to the patient that the treating physician is an employee of the hospital,
rather, a representation may be general and implied. The Court therefore denied PSIs
motion for reconsideration with finality.
CORPORATION, respondent [GR No.138051, June 10, 2004 ]
Carpio, J.:
In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed
an Agreement (Agreement) with the Mel and Jay Management and Development
Corporation (MJMDC). ABS-CBN was represented by its corporate officers while
MJMDC was represented by SONZA, as President and General Manager, and Carmela
Tiangco (TIANGCO), as EVP and Treasurer. Referred to in the Agreement as AGENT,
MJMDC agreed to provide SONZAs services exclusively to ABS-CBN as talent for radio
and television. The Agreement listed the services SONZA would render to ABS-CBN, as
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m., Mondays to
b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m., Sundays
ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000 for
the first year and P317,000 for the second and third year of the Agreement. ABS-CBN
would pay the talent fees on the 10th and 25th days of the month.

However on April 1, 1996, Petitioner Sonza, through MJMDC, demanded the
rescission of the contract between Sonza and ABS CBN. The letter was signed by
petitioner as the Companys President. In the letter, Sonza stated that he is waiving and
renouncing recovery of the remaining amount stipulated in paragraph 7 of the
Agreement but reserves the right to seek recovery of the other benefits under said
Later on, Sonza filed with the Dept. of Labor and Employment a complaint for the
payment of wages, signing bonus, and other benefits. Respondent responded that the
Labor Arbiter is without jurisdiction as there exist no employee-employer relationship
between the parties.
Whether or not Petitioner Sonza is an employee of the Respondent ABS-CBN.
The Court answered in the negative.
The Supreme Court upheld the decision of the Court of Appeals which in turn sustained
the ruling of the NLRC andwhich in turn sustained the Labor Arbiters decision to
dismiss the case because of lack of Jurisdiction. The Labor Arbiter found that there exist
no employee-employer relationship between Petitioner and Respondent.
The Petitioner is clearly an independent contractor. The employee-employer relationship
is between Sonza and MJMDC, and not ABSCBN. MJMDC acted as the agent of Sonza
between him and ABSCBN.
In determining whether there exist an employee-employer relationship between the
parties, the Court determined if the elements are present, namely: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employers power to control the employee on the means and methods by which
the work is accomplished
It was found that the selection of Sonza was indeed based on the decision of ABSCBN.
However, it was found that Wages paid to Sonza was by virtue of the contract entered
into by and between MJMDC, the agent of Sonza and ABSCBN. This is a circumstance
indicative, but not conclusive, of an independent contractual relationship.
On the third element, it was found by the Court that ABSCBN did not possess the power
of dismissal. They are bound to pay the Wages of Sonza even during severe business
losses during the life of the Agreement. Respondent could not retrench Sonza.
On the last element, which is the most important element, the Court found that
Respondent had no control on how Sonza performs his duties as long as he does not
attack the Respondent or its interest. The only control they have is to whether to air or
not the show of Sonza, but even then the latter is still obliged to pay the Petitioners
wages regardless.
In sum, the Court ruled that based on the aforementioned elements, there is no
employee-employer relation between Sonza and ABSCBN. Clearly, the present case
does not call for an application of the Labor Code provisions but an interpretation and




implementation of the May 1994 Agreement. In effect, SONZAs cause of action is for
breach of contract which is intrinsically a civil dispute cognizable by the regular courts.

enjoining petitioner from representingand/or acting in behalf of the employees of

Lipercon and DRite, and of calling a strike among others.

Case is dismissed with costs against Petitioner.

Respondent Court found the Complaint sufficient in form and substance and
issued a Temporary Restraining Order, and subsequently, an Order granting the
complaint of SanMig.



ISSUE: Whether or not there exists a labor dispute such that the RTC may notvalidly
assume jurisdiction to the exclusion of the NCMB-DOLE.

[G.R. No. 87700 June 13, 1990]

A "LABOR DISPUTE" as defined in Article 212 (1) of the Labor Code includes "any
controversy or matter concerning terms and conditions ofemployment or the association
or representation of persons in negotiating,fixing, maintaining, changing, or arranging
the terms and conditions ofemployment, regardless of whether the disputants stand in
the proximaterelation of employer and employee."

Sometime in 1983 and 1984, San Mig entered into contracts for merchandising
services with Lipercon and D'Rite. These companies are independent contractors duly
licensed by the DOLE. In said contracts, it was expressly understood and agreed that
the workers employed by the contractors were to be paid by the latter and that none of
them were to be deemed employees or agents of San Mig.
There was to be no employer-employee relation between the contractors
and/or its workers, on the one hand, and San Mig on the other.

While it is San Mig's submission that no employer-employee relationship exists between

itself, on the one hand, and the contractual workers of Lipercon and D'Rite on the other,
a labor dispute can nevertheless exist "regardless of whether the disputants stand in
the proximate relationship ofemployer and employee" provided the controversy
concerns, among others, the terms and conditions of employment or a "change" or
"arrangement" thereof.


Petitioner is the duly authorized representative of the monthly paid rank-andfile employees of San Mig with whom the latter executed a Collective Bargaining
Agreement effective 1 July 1986 to 30 June 1989. Section 1 of their CBA specifically
provides that "temporary, probationary, or contractemployees and workers are excluded
from the bargaining unit and,therefore, outside the scope of this Agreement."
In a letter dated 20 November 1988, the Union advised San Mig that some
Lipercon and D'Rite workers had signed up for union membership and sought the
regularization of their employment with SMC. The Union alleged that this group of
employees, while appearing to be contractual workers supposedly independent
contractors, have been continuously working for San Mig for a period ranging from 6
months to 15 years and that their work is neither casual nor seasonal as they are
performing work or activities necessary or desirable in the usual business or trade of
San Mig. Thus, it was contended that there exists a "labor-only" contracting situation. It
was then demanded that the employment status of these workers be regularized.
On 12 January 1989 and 30 January 1989, the Union filed two notices of strike
for unfair labor practice, CBA violations, and union busting. Conciliatory meetings were
then held before the National Conciliation and Mediation Board of DOLE (NCMBDOLE).
Beginning 14 February 1989 until 2 March 1989, series of pickets were staged
by Lipercon and D'Rite workers in various SMC plants and offices. On 6 March 1989,
SMC filed a verified Complaint for Injunction and Damages before respondent Court

Put differently, and as defined by law, the existence of a labor dispute is not determined
by the fact that the plaintiffs and defendants do not stand in the proximate relation of
employer and employee.That a labor dispute, as defined by the law, does exist here is
What the Union seeks is to regularize the status of the employees contracted by
Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig.
This matter definitely dwells on the working relationship between said employees vis-avis SanMig.
Terms, tenure and conditions of their employment and the arrangement of those terms
are thus involved bringingthe matter within the purview of a labor dispute.
Further, the Union also seeks to represent those workers, who have signed up for Union
membership, for the purpose of collective bargaining.
SanMig, for its part, resists that Union demand on the ground that there is no employeremployee relationship between it and those workers and because the demand violates
the terms of their CBA. Obvious then is that representation and association, for the
purpose of negotiating the conditions ofemployment are also involved.
Neither can it be denied that the controversy below is directly connected with the labor
dispute already taken cognizanceof by the NCMB-DOLE. As the case is indisputably
linked with a labor dispute, jurisdiction belongs tothe labor tribunals.




RONALDO B. ZAMORA, [G.R. No. L-48645, JANUARY 7, 1987]

ISSUE: Whether or not an employer-employee relationship exists between petitionersmembers of the Brotherhood Labor Unit Movement of the Philippines (BLUM) and
respondent San Miguel Corporation.

Unrebutted evidence and testimony on record establish that the petitioners are workers
who have been employed at the San Miguel Parola Glass Factory since 1961,
averaging about seven (7) years of service at the time of their termination.
They worked as cargadores or pahinantes at the SMC Plant loading, unloading,
piling or palleting empty bottles and wooden shells to and from company trucks and
warehouses. At times, they accompanied the company trucks on their delivery routes.
On their part, respondents moved for the dismissal of the complaint on the grounds that
the complainants are not and have never been employees of respondent company but
employees of the independent contractor; that respondent company has never had
control over the means and methods followed by the independent contractor who
enjoyed full authority to hire and control said employees; and that the individual
complainants are barred by estoppel from asserting that they are employees of
respondent company.
The petitioners strongly argue that there exists an employer-employee relationship
between them and the respondent company and that they were dismissed for unionism,
an act constituting unfair labor practice for which respondents must be made to
Work in the glass factory was neither regular nor continuous, depending wholly on the
volume of bottles manufactured to be loaded and unloaded, as well as the business
activity of the company. Work did not necessarily mean a full eight (8) hour day for the
petitioners. However, work, at times, exceeded the eight (8) hour day and necessitated
work on Sundays and holidays. For this, they were neither paid overtime nor
compensation for work on Sundays and holidays.
Sometime in January, 1969, the petitioner workers - numbering one hundred and forty
(140) organized and affiliated themselves with the petitioner union and engaged in
union activities. Believing themselves entitled to overtime and holiday pay, the
petitioners pressed management, airing other grievances such as being paid below the
minimum wage law, inhuman treatment, being forced to borrow at usurious rates of
interest and to buy raffle tickets, coerced by withholding their salaries, and salary
deductions made without their consent. However, their gripes and grievances were not
heeded by the respondents.
On February 20, 1969, all the petitioners were dismissed from their jobs and, thereafter,
denied entrance to respondent companys glass factory despite their regularly reporting
for work. A complaint for illegal dismissal and unfair labor practice was filed by the

In determining the existence of an employer-employee relationship, the elements that
are generally considered are the following:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employers power to control the employee with respect to the means and
methods by which the work is to be accomplished.
It is the so-called control test that is the most important element (Investment Planning
Corp. of the Phils. vs. The Social Security System, 21 SCRA 924; Mafinco Trading
Corp. vs. Ople, supra, and Rosario Brothers, Inc. vs. Ople, 131 SCRA 72).
Applying the above criteria, the evidence strongly indicates the existence of an
employer-employee relationship between petitioner workers and respondent San Miguel
Corporation. The respondent asserts that the petitioners are employees of the
Guaranteed Labor Contractor, an independent labor contracting firm.
Uncontroverted is the fact that for an average of seven (7) years, each of the petitioners
had worked continuously and exclusively for the respondent companys shipping and
warehousing department. Considering the length of time that the petitioners have
worked with the respondent company, there is justification to conclude that they were
engaged to perform activities necessary or desirable in the usual business or trade of
the respondent, and the petitioners are, therefore regular employees (Phil. Fishing Boat
Officers and Engineers Union vs. Court of Industrial Relations, 112 SCRA 159 and RJL
Martinez Fishing Corporation vs. National Labor Relations Commission, 127 SCRA
Despite past shutdowns of the glass plant for repairs, the petitioners, thereafter,
promptly returned to their jobs, never having been replaced, or assigned elsewhere until
the present controversy arose. The term of the petitioners employment appears
indefinite. The continuity and habituality of petitioners work bolsters their claim of
employee status vis-a-vis respondent company.
We find that Guaranteed and Reliable Labor contractors have neither substantial capital
nor investment to qualify as an independent contractor under the law. The premises,
tools, equipment and paraphernalia used by the petitioners in their jobs are admittedly
all supplied by respondent company. It is only the manpower or labor force which the
alleged contractors supply, suggesting the existence of a labor-only contracting
scheme prohibited by law (Article 106, 109 of the Labor Code; Section 9(b), Rule VIII,
Book III, Implementing Rules and Regulations of the Labor Code).
In fact, even the alleged contractors office, which consists of a space at respondent
companys warehouse, table, chair, typewriter and cabinet, are provided for by
respondent SMC. It is therefore clear that the alleged contractors have no capital outlay



involved in the conduct of its business, in the maintenance thereof or in the payment of
its workers salaries.
The payment of the workers wages is a critical factor in determining the actuality of an
employer-employee relationship whether between respondent company and petitioners
or between the alleged independent contractor and petitioners. It is important to
emphasize that in a truly independent contractor-contractee relationship, the fees are
paid directly to the manpower agency in lump sum without indicating or implying that the
basis of such lump sum is the salary per worker multiplied by the number of workers
assigned to the company.
The San Miguel Corporation is hereby ordered to REINSTATE petitioners, with three (3)
years backwages. However, where reinstatement is no longer possible, the respondent
SMC is ordered to pay the petitioners separation pay equivalent to one (1) month pay
for every year of service.

Art. 212 Definition of Labor Dispute

14. CITI BANK v COURT OF APEALS [G.R. No. 108961. November 27, 1998]
In 1983, Citibank and El Toro Security Agency, Inc. (hereafter El Toro) entered into
a contract for the latter to provide security and protective services to safeguard and
protect the bank's premises, situated at 8741 Paseo de Roxas, Makati, Metro Manila.
Citibank renewed the security contract with El Toro yearly until 1990. On April 22, 1990,
the contract between Citibank and El Toro expired.
On June 7, 1990, respondent Citibank Integrated Guards Labor Alliance-SEGATUPAS/FSM (hereafter CIGLA) filed with the National Conciliation and Mediation
Board (NCMB) a request for preventive mediation citing Citibank as respondent
therein giving as issues for preventive mediation the following:
a) Unfair labor practice;
b) Dismissal of union officers/members; and
c) Union busting.
On June 10, 1990, petitioner Citibank served on El Toro a written notice that the bank
would not renew anymore the service agreement with the latter. Simultaneously,
Citibank hired another security agency, the Golden Pyramid Security Agency.
On the same date, respondent CIGLA manifested with the NCMB that it was
converting its request for preventive mediation into a notice of strike for failure of
the parties to reach a mutually acceptable settlement of the issues.
Security guards formerly assigned to Citibank under the expired agreement loitered
around and near the Citibank premises in large groups of from twenty (20) and at times
fifty (50) persons. On June 14, 1990, respondent CIGLA filed a notice of strike
directed at the premises of the Citibank main office.

Faced with the prospect of disruption of its business operations, on June 5, 1990,
petitioner Citibank filed with the Regional Trial Court, Makati, a complaint for
injunction and damages against respondent CIGLA.
On June 18, 1990, respondent CIGLA filed with the trial court a motion to dismiss
the complaint. The motion alleged that:
a) The Court had no jurisdiction, this being labor dispute.
b) The guards were employees of the bank.
c) There were pending cases/labor disputes between the guards and the
bank at the different agencies of DOLE.
d) The bank was guilty of forum shopping.
Trial court denied respondent CIGLA's motion to dismiss Jurisdiction of the court
is determined by the allegations of the complaints. In the plaintiff's complaint there are
allegations, which negate any employer-employee relationship between it and the
CIGLA members.
Respondent CIGLA filed with the trial court a motion for reconsideration of the
above-mentioned order. On October 1, 1990, the trial court denied the motion.
Respondent CIGLA filed with the trial court its answer to the complaint, and
averred as special and affirmative defense lack of jurisdiction of the court over the
subject matter of the case. Treating the averment as motion to dismiss, the lower court
issued an order denying the motion.
On May 24, 1991, respondent CIGLA filed with the Court of Appeals a petition for
certiorari with preliminary injunction assailing the validity of the proceedings had
before the regional trial court.
After due proceedings, on March 31, 1992, the Court of Appeals promulgated its
decision in respondent CIGLA's favor.
On April 29, 1992, petitioner Citibank filed a motion for reconsideration of the
decision. On February 12, 1993, the Court of Appeals denied the motion.
1. Whether it is the labor tribunal or the regional trial court that has jurisdiction
over the subject matter of the complaint filed by Citibank with the trial court.
(Answer: RTC)
2. Whether there is a labor dispute between Citibank and the security guards,
members of respondent CIGLA. (Answer: THERE IS NO LABOR DISPUTE.)

The Labor Arbiter (labor tribunal) has no jurisdiction over a claim filed
where no employer-employee relationship existed between a company
and the security guards assigned to it by a security service contractor. In
this case, it was the security agency El Toro that recruited, hired and assigned
the watchmen to their place of work. It was the security agency that was
answerable to Citibank for the conduct of its guards.



This Court has held in many cases that "in determining the existence of an
employer-employee relationship, the following elements are generally
1) the selection and engagement of the employee;


[G.R. No. 120567. March 20, 1998]

2) the payment of wages;


3) the power of dismissal; and

Private respondents (Ferdinand Pineda and Godofredo Cabling) are flight stewards of
the petitioner. Both were dismissed from the service for their alleged involvement in the
April 3, 1993 currency smuggling in Hong Kong.

4) the employer's power to control the employee

with respect to the means and methods by which the workis to b
e accomplished".

It is a basic rule of procedure that jurisdiction of the court over the subject
matter of the action is determined by the allegations of the complaint,
irrespective of whether or not the plaintiff is entitled to recover upon all or some
of the claims asserted therein.

On the basis of the allegations of the complaint, it is safe to conclude that the
dispute involved is a civil one, not a labor dispute. Consequently, we rule
that jurisdiction over the subject matter of the complaint lies with the
regional trial court.



Article 212, paragraph l of the Labor Code provides the definition of a

"LABOR DISPUTE". It "includes any controversy or matter concerning
terms or conditions of employment or the association or representation
of persons in negotiating, fixing, maintaining, changing or arranging the
terms and conditions of employment, regardless of whether the
disputants stand in the proximate relation of employer and employee."

If at all, the dispute between Citibank and El Toro security agency is one
regarding the termination or non-renewal of the contract of services. This
is a civil dispute. El Toro was an independent contractor. Thus, no employeremployee relationship existed between Citibank and the security guard
members of the union in the security agency who were assigned to secure the
bank's premises and property. Hence, there was no labor dispute and no
right to strike against the bank.

WHEREFORE, the Court hereby GRANTS the petition for review on certiorari.
Decision of the Court of Appeal REVERSED and SET ASIDE.

One person in the name of Joseph Abaca was intercepted at the airport carrying a bag
containing 2.5 million pesos who allegedly found said plastic bag at the Skybed section
of arrival flight PR300/03 where private respondents served as flight attendants. After
having been implicated by Abaca in the incident before the respondents disciplinary
board, it is was Abaca himself who gave exculpating statements to the same board and
declared that the private respondents were not the owners of the said currencies. that
just as petitioners thought that they were already fully cleared of the charges, as they
no longer received any summons/notices
on the intended additional hearings
mandated by the Disciplinary Board, that they were already fully cleared of the
charges, as they no longer received any summons/notices on the intended additional
hearings mandated by the Disciplinary Board, they were surprised to find out that
they were terminated by PAL.
Aggrieved by said dismissal, private respondents filed with the NLRC a petition for
injunction praying that:
"I. Upon filing of this Petition, a temporary restraining order be issued, prohibiting
respondents (petitioner herein) from effecting or enforcing the Decision dated Feb. 22,
1995, or to reinstate petitioners temporarily while a hearing on the propriety of the
issuance of a writ of preliminary injunction is being undertaken;
"II. After hearing, a writ of preliminary mandatory injunction be issued ordering
respondent to reinstate petitioners to their former positions pending the hearing of this
case, or, prohibiting respondent from enforcing its Decision dated February 22,1995
while this case is pending adjudication;
"III. After hearing, that the writ of preliminary injunction as to the reliefs sought for be
made permanent, that petitioners be awarded full backwages, moral damages of PHP
500,000.00 each and exemplary damages of PHP 500,000.00 each, attorneys fees
equivalent to ten percent of whatever amount is awarded, and the costs of suit."
The NLRC issued the writ of injunction. PAL moved for reconsideration on the ground
that has no jurisdiction to issue an injunction or restraining order since this may be
issued only under Article 218 of the Labor Code if the case involves or arises from labor
disputes and thereby divesting the labor arbiter of its original and exclusive jurisdiction
over illegal dismissal cases.
ISSUE: W/N the NLRC acted with grave abuse of discretion on issuing the writ of
HELD: Yes.



In labor cases, Article 218 of the Labor Code empowers the NLRC"(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or
unlawful acts or to require the performance of a particular act in any labor dispute
which, if not restrained or performed forthwith, may cause grave or irreparable damage
to any party or render ineffectual any decision in favor of such party.
Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of
Procedure of the NLRC, pertinently provides as follows:
"Section 1. Injunction in Ordinary Labor Dispute.-A preliminary injunction or a
restraining order may be granted by the Commission through its divisions pursuant
to the provisions of paragraph (e) of Article 218 of the Labor Code, as amended,
when it is established on the bases of the sworn allegations in the petition that the
acts complained of, involving or arising from any labor dispute before the
Commission, which, if not restrained or performed forthwith, may cause grave or
irreparable damage to any party or render ineffectual any decision in favor of such
From the foregoing provisions of law, the power of the NLRC to issue an injunctive
writ originates from "any labor dispute" upon application by a party thereof, which
application if not granted "may cause grave or irreparable damage to any party or
render ineffectual any decision in favor of such party."
The term "labor dispute" is defined as "any controversy or matter concerning terms
and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing, or arranging the terms and conditions of
employment regardless of whether or not the disputants stand in the proximate
relation of employers and employees."
The petition for injunction directly filed before the NLRC is in reality an action for
illegal dismissal. This is clear from the allegations in the petition which prays for:
reinstatement of private respondents; award of full backwages, moral and exemplary
damages; and attorney's fees. As such, the petition should have been filed with the
labor arbiter who has the original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural:
(1) unfair LABOR PRACTICE;
(2) termination DISPUTES;
(3) If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
(4) Claims for actual, moral, exemplary and other forms of damages
arising from the employer- employee relations;
(5) Cases arising from any violation of Article 264 of this Code, including questions
involving the legalityof strikes and lockouts; and

(6) Except claims for employees compensation, social security, medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P 5,000.00), whether or not
accompanied with a claim for reinstatement.
The jurisdiction conferred by the foregoing legal provision to the labor arbiter is both
original and exclusive, meaning, no other officer or tribunal can take cognizance of,
hear and decide any of the cases therein enumerated. The only exceptions are
where the Secretary of Labor and Employment or the NLRC exercises the power of
compulsory arbitration, or the parties agree to submit the matter to voluntary
arbitration pursuant to Article 263 (g) of the Labor Code.
On the other hand, the NLRC shall have exclusive appellate jurisdiction over all
cases decided by labor arbiters as provided in Article 217(b) of the Labor Code. In
short, the jurisdiction of the NLRC in illegal dismissal cases is appellate in nature
and, therefore, it cannot entertain the private respondents' petition for injunction
which challenges the dismissal orders of petitioner. Article 218(e) of the Labor Code
does not provide blanket authority to the NLRC or any of its divisions to issue writs of
injunction, considering that Section 1 of Rule XI of the New Rules of Procedure of
the NLRC makes injunction only an ancillary remedy in ordinary labor disputes.

Managerial Employee
and HUDSON CHUA, Respondents. [G.R. No. 159577, May 3, 2006]
Ponente: Panganiban, C.J.

Sometime in June 1999: Petitioner Charlito Pearanda was hired as an employee

of Baganga Plywood Corporation (BPC) to take charge of the operations and
maintenance of its steam plant boiler.

May 2001:Pearanda filed a Complaint for illegal dismissal with money claims
against BPC and its general manager, Hudson Chua, before the NLRC.

The parties failed to settle amicably. They alleged the following before the Labor

1) He was employed by respondent on March 15, 1999 with a monthly salary
of P5,000.00 as Foreman/Boiler Head/Shift Engineer until he was illegally
terminated on December 19, 2000.
2) His services were terminated without due process and valid grounds in
accordance with law.
3) He was not paid his overtime pay, premium pay for working
duringholidays/rest days, night shift differentials and claims for payment of



damages and attorneys fees (having been forced to litigate the

1) Complainants separation from service was done pursuant to Art. 283 of
the Labor Code.
2) BPC was on temporary closure due to repair and general maintenance. It
applied for clearance with the Department of Labor and Employment,
Regional Office No. XI to shut down and to dismiss employees.
Due to complainants insistence, he was paid his separation benefits.
When BPC partially reopened in January 2001, Pearanda failed to
reapply. Hence, he was not terminated from employment, much less
illegally. He severed employment when he insisted on payment of his
separation benefits.
Furthermore, being a managerial employee he is not entitled to overtime
pay. If he ever rendered services beyond the normal hours of work, there
was no office order/or authorization for him to do so.
3) The claim for damages has no legal and factual basis, and the instant
complaint must necessarily fail for lack of merit.
Labor Arbiters Ruling:
There was no illegal dismissal.
Petitioners Complaint was premature, because he was still employed by BPC.
The temporary closure of BPCs plant did not terminate his employment.
Hence, he need not reapply when the plant reopened.
Petitioners money claims for illegal dismissal was weakened by his quitclaim
and admission during the clarificatory conference that he accepted separation
benefits, sick and vacation leave conversions and thirteenth month pay.
Petitioner was entitled to overtime pay, premium pay for working on rest days,
and attorneys fees in the total amount of P21,257.98.
NLRCs Ruling (May 8 and August 16, 2002):
Respondents filed an appeal to the NLRC, which deleted the award of overtime pay
and premium pay for working on rest days. According to the Commission, petitioner
was not entitled to these awards, because he was a managerial employee.
CAs Ruling:
In its Resolution dated January 27, 2003, the CA dismissed Pearandas
Petition for Certiorari, because he failed to:
1) Attach copies of the pleadings submitted before the labor arbiter and
NLRC; and
2) Explain why the filing and service of the Petition was not done by personal
In its Resolution dated July 4, 2003, the CA denied reconsideration on the
ground that petitioner still failed to submit the pleadings filed before the NLRC.

Petitioner filed a Petition for Review under Rule 45 of the Rules of Court with the
Supreme Court.


Did the NLRC commit grave abuse of discretion amounting to excess or lack of
jurisdiction when it entertained the respondents appeal despite the lapse of the
mandatory period ten-day period? (NOT LABOR-RELATED ISSUE)
Did the NLRC commit grave abuse of discretion amounting to an excess or lack of
jurisdiction when it rendered the assailed RESOLUTIONS REVERSING AND
SETTING ASIDE the Labor Arbitersfindings that Pearanda was:
A regular, common employee entitled to monetary benefits under Art. 82 of the
Labor Code, and
Entitled to the payment of OVERTIME PAY and OTHER MONETARY

Under the Rule VI, Sec. 1 of the New Rules of Procedure of the NLRC, an
appeal from the decision of the labor arbiter should be filed within 10 days from
receipt thereof.The parties alleging non-compliance with such rule have the
burden of substantiating their allegations.
Petitioners claim that respondents filed their appeal beyond the required
period was not substantiated.
1) He failed to indicate when respondents received the labor arbiters
2) He did not attach a copy of the challenged appeal.
Thus, the Court had no means to determine when the 10-day period
commenced and terminated.
Article 82 of the Labor Code exempts managerial employees from the
coverage of labor standards. Labor standards provide the working conditions
of employees, including entitlement to overtime pay and premium pay for
working on rest days. Under this provision, managerial employees are "those
whose primary duty consists of the management of the establishment in which
they are employed or of a department or subdivision."
Rule 1, Sec. 2(b) of Book III of theImplementing Rules of the Labor Code
state that managerial employees are those who meet the following conditions:
1) Their primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof;
2) They customarily and regularly direct the work of two or more employees
3) They have the authority to hire or fire other employees of lower rank; or
their suggestions and recommendations as to the hiring and firing and as
to the promotion or any other change of status of other employees are
given particular weight.
While the Court disagreed with the NLRCs finding that petitioner was a
managerial employee, it ruled that he was a member of the managerial staff,
which also takes him out of the coverage of labor standards. Rule 1, Sec. 2(c)
of Book III of the Implementing Rules of the Labor Code define members
of a managerial staff as those with the following duties and responsibilities:
1) The primary duty consists of the performance of work directly related to
management policies of the employer;





Customarily and regularly exercise discretion and independent judgment;

(i) Regularly and directly assist a proprietor or a managerial employee
whose primary duty consists of the management of the establishment in
which he is employed or subdivision thereof; or (ii) execute under general
supervision work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute under general
supervision special assignments and tasks; and
4) Who do not devote more than 20% of their hours worked in a workweek to
activities which are not directly and closely related to the performance of
the work described in paragraphs (1), (2), and (3).
As shift engineer, petitioners duties and responsibilities were as follows:
1) To supply the required and continuous steam to all consuming units at
minimum cost.*
2) To supervise, check and monitor manpower workmanship as well as
operation of boiler and accessories.*
3) To evaluate performance of machinery and manpower.*
4) To follow-up supply of waste and other materials for fuel.
5) To train new employees for effective and safety while working.*
6) Recommend parts and supplies purchases.
7) To recommend personnel actions such as: promotion, or disciplinary
8) To check water from the boiler, feedwater and softener, regenerate
softener if beyond hardness limit.
9) Implement Chemical Dosing.
10) Perform other task as required by the superior from time to time.



The foregoing enumeration, particularly items 1, 2, 3, 5 and 7, illustrated that

petitioners duties and responsibilities conformed to the definition of a member
of a managerial staff under the Implementing Rules.
He supervised the engineering section of the steam plant boiler (i.e. oversaw
the operation of the machines and the performance of the workers in the
engineering section). This work necessarily required the use of discretion and
independent judgment. As supervisor, petitioner was a member of the
managerial staff.
Even petitioner admitted that he was a supervisor. In his Position Paper, he
stated that he was the foreman responsible for the operation of the boiler. The
term foreman implies that he was the representative of management over the
workers and the operation of the department.
Petitioners evidence also showed that he was the supervisor of the steam
His classification as supervisor is further evident from the manner his salary
was paid. He belonged to the 10% of respondents 354 employees who were
paid on a monthly basis; the others were paid only on a daily basis.


The Court finds no justification to award overtime pay and premium pay for rest days to
petitioner. Petition denied with costs against petitioner.

[G.R. No. 169717, March 16, 2011]

On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of
Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a
petition for certification election among the regular rank-and-file employees of Charter
Chemical and Coating Corporation (respondent company) with the Mediation Arbitration
Unit of the DOLE, National Capital Region.
On April 30, 1999, Med-Arbiter DISMISSED said petition and ruled that petitioner union
is not a legitimate labor organization and has no right to file a petition for certification
election for the purpose of collective bargaining because of the following reasons:
1. The Charter Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and
"Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas" were not executed under oath and certified by
the union secretary and attested to by the union president as required by
Section 235 of the Labor Code in relation to Section 1, Rule VI of Department
Order (D.O.) No. 9, series of 1997.

The list of membership of petitioner union includes twelve (12) supervisory

employees. Under Article 245 of the Labor Code, said supervisory employees are
prohibited from joining petitioner union which seeks to represent the rankand-file employees of respondent company.

DOLE reversed the Med-Arbiters decision and allowed the certification election among
the regular rank-and-file employees of Charter Chemical and Coating Corporation.
The respondent company contends that petitioner union is not a legitimate labor
organization because its composition is a mixture of supervisory and rank-and-file
employees in violation of Article 245 of the Labor Code. It maintains that the ruling
in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union continues to be
good case law, which ruled that the illegal composition of petitioner union nullifies its
legal personality to file the subject petition for certification election and its legal
personality may be collaterally attacked in the proceedings for a petition for certification
The CA ruled that petitioner union cannot be considered a legitimate labor organization
pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor
ISSUE: Whether the mixture of rank-and-file and supervisory employee[s] of petitioner
unions membership is a ground for the cancellation of petitioner unions legal



NO, the inclusion of the aforesaid supervisory employees in petitioner union does
not divest it of its status as a legitimate labor organization.
As Rule II (Registration of Unions) of the Rules and Regulations Implementing R.A. No.
6715 (1989 Amended Omnibus Rules) provides:
"Sec. 1. Who may join unions. - x x x Supervisory employees and
security guards shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist
or form separate labor organizations of their own; Provided, that
those supervisory employees who are included in an existing rankand-file bargaining unit, upon the effectivity of Republic Act No. 6715,
shall remain in that unit x x x.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically,
the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules that the petition
for certification election indicate that the bargaining unit of rank-and-file employees has
not been mingled with supervisory employees was removed. Instead, what the 1997
Amended Omnibus Rules requires is a plain description of the bargaining unit.
In Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees UnionPGTWO in which the core issue was whether mingling affects the legitimacy of a labor
organization and its right to file a petition for certification election, the Court ruled that
while there is a prohibition against the mingling of supervisory and rank-and-file
employees in one labor organization, the Labor Code does not provide for the
effects thereof. Thus, the Court held that after a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate labor organization.
Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for
cancellation of its registration, unless such mingling was brought about by
misrepresentation, false statement or fraud under Article 239 of the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules,
as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had
already set the tone for it. Toyota and Dunlop no longer hold sway in the present
altered state of the law and the rules.
The applicable law and rules in the instant case are the same as those
in Kawashima because the present petition for certification election was filed in 1999
when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with
equal force here. As a result, petitioner union was not divested of its status as a
legitimate labor organization even if some of its members were supervisory
employees; it had the right to file the subject petition for certification election.

18. JUMUAD V. HI-FLYER FOOD, INC [G.R. No. 187887 September 7, 2011]
1. Jumuad was Area Manager in KFC Gaisano Mall, Cebu City (KFC-Gaisano); in
Cocomall, Cebu City (KFC-Cocomall); and in Island City Mall, Bohol (KFCBohol).
2. Hi Flyer conducted a food safety, service and sanitation audit at KFC-Gaisano.
Several sanitation violations were found, such as presence of rodents and a
defective chiller used for food storage.
3. Hi-Flyer audited the accounts of KFC-Bohol. It was discovered that there was,
1) cash shortage amounting to 62,290.85; 2) delay in the deposits of cash
sales by an average of three days; 3) the presence of two sealed cash-fordeposit envelopes containing paper cut-outs instead of cash; 4) falsified entries
in the deposit logbook; 5) lapses in inventory control; and 6) material product
4. In KFC-Cocomall branch, grout and leaks at the branchs kitchen wall, dried up
spills from the marinator, as well as a live rat under postmix, and signs of
rodent gnawing/infestation were found.
5. Hi-Flyer served Jumuad a Notice of Dismissal.
6. Jumuad filed a Complaint against Hi-Flyer and/or Jesus R. Montemayor for
ILLEGAL DISMISSAL before the NLRC on October 17, 2005, praying for
reinstatement and payment of separation pay, 13th month pay, service incentive
leave, moral and exemplary damages, and attorneys fees.
7. The LA (Labor Arbiter) ruled that Jumuad was illegally dismissed. No serious
cause for termination existed.
8. Jumuad appealed to the NLRC. He faulted the LA for not awarding backwages
and damages despite its finding that she was illegally dismissed.
9. Hi-Flyer and Montemayor also appealed to the NLRC. Assailed the finding
thatJumuad was illegally dismissed.
10. The NLRC affirmed in toto the LA decision. Dismissal of Jumuad was too
harsh. Even before the Irregularities Report and Notice of Charges to Jumuad,
e-mails between Montemayor and officers of Hi-Flyer showed that Hi-Flyer was
already determined to terminate Jumuad. Proof that Jumuad was denied due
process considering that no matter how she would refute the charges hurled
against her, the decision of Hi-Flyer to terminate her would not change.
11. Both Jumuad and Hi-Flyer sought reconsideration of the NLRC Decision but
their motions were denied.
12. Hi-Flyer appealed the case before the CA in Cebu City. Alleging grave abuse of
discretion on the part of the NLRC.
13. CA reversed the decision of the labor tribunal. Requirements of substantive
and procedural due process were complied with. Jumuad had an opportunity to
be heard when she submitted her written explanation and then, when she was
informed of the decision and the basis of her termination.
The e-mails did not equate to a predetermination of Jumuads termination. The
e-mail exchanges were mere discussions between Montemayor and other
officers of Hi-Flyer on whether grounds for disciplinary action or termination
existed. The e-mails just showed that Hi-Flyer extensively deliberated the



nature and cause of the charges against Jumuad.

The unacceptable sanitary conditions and the cash shortages at 3 of the 7
KFC branches supervised by Jumuad are enough bases for Hi-Flyer to lose its
trust and confidence in her.
14. Hence, Jumuad filed a Petition for Review on Certiorari before the SC.
ISSUE: W/N Jumuad was illegally dismissed.
HELD: No. Art. 282. Termination by Employer. An employer may terminate an
employment for any of the following causes:(a) Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative in
connection with his work; (b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative; (d) Commission of a crime or offense by the
employee against the person of his employer or any immediate member of his family or
his duly authorized representative; and (e) Other causes analogous to the foregoing.
To warrant removal from service for gross and habitual neglect of duty, it must be shown
that the negligence should not merely be gross, but also habitual. In breach of trust and
confidence, so long as it is shown there is some basis for management to lose its trust
and confidence and that the dismissal was not used as an occasion for abuse. In this
case, Jumuad willfully breached her duties as to be unworthy of the trust and
confidence of Hi-Flyer.Jumuad was a managerial employee. Jumuad executed
management policies and had the power to discipline the employees of KFC.
Article 212 (m) of the Labor Code defines a managerial employee as one who is

vested with powers or prerogatives to lay down and execute management
policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or
discipline employees.
The reports show that there were anomalies committed in the branches Jumuad
managed. On the principle of respondeat superior or command responsibility
alone, Jumuad may be held liable for negligence in the performance of her managerial
duties. She may not have been directly involved in causing the cash shortages in KFCBohol, but she also did not perform her duty monitoring and supporting the day to day
operations of the branches and ensure that all the facilities and equipment were
properly maintained and serviced which could have prevented the anomalies.Rather
than taking proactive steps to prevent the anomalies at her branches, Jumuad merely
effected remedial measures. In the restaurant business where the health and well-being
of the consuming public is at stake, this does not suffice.
Based on established facts, the mere existence of the grounds for the loss of trust and
confidence justifies petitioners dismissal.Hi-Flyer exercised in good faith its
management prerogative as there is no dispute that it has lost trust and confidence in
her and her managerial abilities, to its damage and prejudice. Her dismissal, was
therefore, justified.
The law imposes many obligations on the employer such as providing just
compensation to workers, observance of the procedural requirements of notice and
hearing in the termination of employment. On the other hand, the law also recognizes
the right of the employer to expect from its workers not only good performance,
adequate work and diligence, but also good conduct and loyalty. The employer may not
be compelled to continue to employ such persons whose continuance in the service will
patently be inimical to its interests.