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Labor Standards MSU 2014 - Incio

Sonza v ABSCBN GR 13805 (June 10, 2004)


Facts:

In May 1994, respondent ABS-CBN signed an Agreement with the Mel and Jay Management and Development Corporation
(MJMDC).

On 1 April 1996, SONZA wrote a resignation letter to ABS-CBN in view of recent events concerning his programs and career that
he considered as acts of the station being violative of the Agreement thus constituting a breach thereof.

On 30 April 1996, SONZA filed a complaint against ABS-CBN before the Department of Labor and Employment. SONZA
complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13 th month pay, signing bonus, travel
allowance and amounts due under the Employees Stock Option Plan (ESOP).

The Labor Arbiter ruled: the talent as above-described cannot be considered as an employee. It must be noted
that complainant was engaged by respondent by reason of his peculiar skills and talent as a TV host and a radio
broadcaster. Unlike an ordinary employee, he was free to perform the services he undertook to render in accordance with his
own style. The benefits conferred to complainant under the May 1994 Agreement are certainly very much higher than those generally
given to employees. Moreover, his engagement as a talent was covered by a specific contract. Likewise, he was not bound to render
eight (8) hours of work per day as he worked only for such number of hours as may be necessary. The fact that per the May 1994
Agreement complainant was accorded some benefits normally given to an employee is inconsequential. Whatever benefits
complainant enjoyed arose from specific agreement by the parties and not by reason of employer-employee relationship. The
fact that complainant was made subject to respondents Rules and Regulations, likewise, does not detract from the absence
of employer-employee relationship. As held by the Supreme Court, The line should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining
it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only
to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means to
achieve it. (Insular Life Assurance Co., Ltd. vs. NLRC, et al., G.R. No. 84484, November 15, 1989).

x x x (Emphasis supplied)[7]

SONZA appealed to the NLRC. NLRC affirmed the Labor Arbiters Decision. He went to CA. CA dismiss the case and affirmed
NLRC. Hence this petition.

Issue:

WON EMPLOYER-EMPLOYEE RELATIONSHIP EXISTED BETWEEN SONZA AND ABS-CBN.

Ruling:

Case law has consistently held that the elements of an employer-employee relationship are: (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.[18] The last element, the so-called control test, is the most important
element.[19]

A. Selection and Engagement of Employee

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Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary
employees. The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed
by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship.

B. Payment of Wages

All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. If SONZA were ABS-
CBNs employee, there would be no need for the parties to stipulate on benefits such as SSS, Medicare, x x x and 13 th month
pay[20] which the law automatically incorporates into every employer-employee contract. [21] Whatever benefits SONZA enjoyed arose
from contract and not because of an employer-employee relationship.[22]

ABS-CBN agreed to pay SONZA such huge talent fees precisely because of SONZAs unique skills, talent and celebrity status not
possessed by ordinary employees. Obviously, SONZA acting alone possessed enough bargaining power to demand and receive such
huge talent fees for his services. The power to bargain talent fees way above the salary scales of ordinary employees is a
circumstance indicative, but not conclusive, of an independent contractual relationship.

The payment of talent fees directly to SONZA and not to MJMDC does not negate the status of SONZA as an independent
contractor. The parties expressly agreed on such mode of payment. Under the Agreement, MJMDC is the AGENT of SONZA, to whom
MJMDC would have to turn over any talent fee accruing under the Agreement.

C. Power of Dismissal

For violation of any provision of the Agreement, either party may terminate their relationship. SONZA failed to show that ABS-
CBN could terminate his services on grounds other than breach of contract, such as retrenchment to prevent losses as provided under
labor laws.[23]

During the life of the Agreement, ABS-CBN agreed to pay SONZAs talent fees as long as AGENT and Jay Sonza shall faithfully
and completely perform each condition of this Agreement. [24] Even if it suffered severe business losses, ABS-CBN could not retrench
SONZA because ABS-CBN remained obligated to pay SONZAs talent fees during the life of the Agreement. This circumstance
indicates an independent contractual relationship between SONZA and ABS-CBN.

SONZA admits that even after ABS-CBN ceased broadcasting his programs, ABS-CBN still paid him his talent fees. Plainly, ABS-
CBN adhered to its undertaking in the Agreement to continue paying SONZAs talent fees during the remaining life of the Agreement
even if ABS-CBN cancelled SONZAs programs through no fault of SONZA.[25]

D. Power of Control

In Alberty-Vlez v. Corporacin De Puerto Rico Para La Difusin Pblica (WIPR) [27] that a television program host is an
independent contractor. We quote the following findings of the U.S. court: Several factors favor classifying Alberty as an independent
contractor. First, a television actress is a skilled position requiring talent and training not available on-the-job. Second,
Alberty provided the tools and instrumentalities necessary for her to perform. Others provided equipment for filming and
producing the show, but these were not the primary tools that Alberty used to perform her particular function. If we accepted this
argument, independent contractors could never work on collaborative projects because other individuals often provide the equipment
required for different aspects of the collaboration. Third, WIPR could not assign Alberty work in addition to filming Desde Mi
Pueblo

Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor. The
control test is the most important test our courts apply in distinguishing an employee from an independent contractor.[29] This test is
based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the
more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the
more likely the worker is considered an independent contractor.[30]

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First, SONZA contends that ABS-CBN exercised control over the means and methods of his work.

SONZAs argument is misplaced. ABS-CBN engaged SONZAs services specifically to co-host the Mel & Jay programs. ABS-
CBN did not assign any other work to SONZA. To perform his work, SONZA only needed his skills and talent. How SONZA delivered
his lines, appeared on television, and sounded on radio were outside ABS-CBNs control. SONZA did not have to render eight hours of
work per day. The Agreement required SONZA to attend only rehearsals and tapings of the shows, as well as pre- and post-production
staff meetings.[31] ABS-CBN could not dictate the contents of SONZAs script. However, the Agreement prohibited SONZA from
criticizing in his shows ABS-CBN or its interests.

SONZA claims that ABS-CBNs power not to broadcast his shows proves ABS-CBNs power over the means and methods of the
performance of his work. Although ABS-CBN did have the option not to broadcast SONZAs show, ABS-CBN was still obligated to pay
SONZAs talent fees. Thus, even if ABS-CBN was completely dissatisfied with the means and methods of SONZAs performance of his
work, or even with the quality or product of his work, ABS-CBN could not dismiss or even discipline SONZA. All that ABS-CBN could
do is not to broadcast SONZAs show but ABS-CBN must still pay his talent fees in full.[35]

Clearly, ABS-CBNs right not to broadcast SONZAs show, burdened as it was by the obligation to continue paying in full SONZAs
talent fees, did not amount to control over the means and methods of the performance of SONZAs work. ABS-CBN could not
terminate or discipline SONZA even if the means and methods of performance of his work - how he delivered his lines and appeared
on television - did not meet ABS-CBNs approval. This proves that ABS-CBNs control was limited only to the result of SONZAs
work, whether to broadcast the final product or not. In either case, ABS-CBN must still pay SONZAs talent fees in full until the
expiry of the Agreement.

In Vaughan, et al. v. Warner, et al.,[36] the United States Circuit Court of Appeals ruled that vaudeville performers were
independent contractors although the management reserved the right to delete objectionable features in their shows. Since the
management did not have control over the manner of performance of the skills of the artists, it could only control the result of the work
by deleting objectionable features.[37]

SONZA further contends that ABS-CBN exercised control over his work by supplying all equipment and crew. No doubt, ABS-
CBN supplied the equipment, crew and airtime needed to broadcast the Mel & Jay programs. However, the equipment, crew and
airtime are not the tools and instrumentalities SONZA needed to perform his job. What SONZA principally needed were his talent or
skills and the costumes necessary for his appearance. [38] Even though ABS-CBN provided SONZA with the place of work and the
necessary equipment, SONZA was still an independent contractor since ABS-CBN did not supervise and control his work.

A radio broadcast specialist who works under minimal supervision is an independent contractor.[40] SONZAs work as television
and radio program host required special skills and talent, which SONZA admittedly possesses. The records do not show that ABS-
CBN exercised any supervision and control over how SONZA utilized his skills and talent in his shows.

Second, SONZA urges us to rule that he was ABS-CBNs employee because ABS-CBN subjected him to its rules and standards
of performance. SONZA claims that this indicates ABS-CBNs control not only [over] his manner of work but also the quality of his
work.

The Agreement stipulates that SONZA shall abide with the rules and standards of performance covering talents[41] of ABS-
CBN. The Agreement does not require SONZA to comply with the rules and standards of performance prescribed for
employees of ABS-CBN. The code of conduct imposed on SONZA under the Agreement refers to the Television and Radio
Code of the Kapisanan ng mga Broadcaster sa Pilipinas (KBP), which has been adopted by the COMPANY (ABS-CBN) as its
Code of Ethics.[42] The KBP code applies to broadcasters, not to employees of radio and television stations. Broadcasters are not
necessarily employees of radio and television stations. Clearly, the rules and standards of performance referred to in the Agreement
are those applicable to talents and not to employees of ABS-CBN.

Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that: Logically, the line should be drawn between rules that
merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be
employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The

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Labor Standards MSU 2014 - Incio

first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result
and the means used to achieve it.[44]

The Vaughan case also held that one could still be an independent contractor although the hirer reserved certain supervision to
insure the attainment of the desired result. The hirer, however, must not deprive the one hired from performing his services according
to his own initiative.[45]

Lastly, SONZA insists that the exclusivity clause in the Agreement is the most extreme form of control which ABS-CBN
exercised over him.

This argument is futile. Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an
independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not
necessarily the same as control.

The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry. [46] This practice is not
designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station.

MJMDC as Agent of SONZA

SONZA insists that MJMDC is a labor-only contractor and ABS-CBN is his employer.

In a labor-only contract, there are three parties involved: (1) the labor-only contractor; (2) the employee who is ostensibly under
the employ of the labor-only contractor; and (3) the principal who is deemed the real employer. Under this scheme, the labor-only
contractor is the agent of the principal. The law makes the principal responsible to the employees of the labor-only contractor as if
the principal itself directly hired or employed the employees.[48] These circumstances are not present in this case.

There are essentially only two parties involved under the Agreement, namely, SONZA and ABS-CBN. MJMDC merely acted as
SONZAs agent. The Agreement expressly states that MJMDC acted as the AGENT of SONZA. The records do not show that
MJMDC acted as ABS-CBNs agent. MJMDC, which stands for Mel and Jay Management and Development Corporation, is a
corporation organized and owned by SONZA and TIANGCO. The President and General Manager of MJMDC is SONZA himself. It is
absurd to hold that MJMDC, which is owned, controlled, headed and managed by SONZA, acted as agent of ABS-CBN in entering into
the Agreement with SONZA, who himself is represented by MJMDC. That would make MJMDC the agent of both ABS-CBN and
SONZA.

Talents as Independent Contractors

ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like SONZA
as independent contractors. SONZA argues that if such practice exists, it is void for violating the right of labor to security of tenure.

The right of labor to security of tenure as guaranteed in the Constitution [53] arises only if there is an employer-employee
relationship under labor laws. Not every performance of services for a fee creates an employer-employee relationship. To hold that
every person who renders services to another for a fee is an employee - to give meaning to the security of tenure clause - will lead to
absurd results.

Individuals with special skills, expertise or talent enjoy the freedom to offer their services as independent contractors. The right to
life and livelihood guarantees this freedom to contract as independent contractors. The right of labor to security of tenure cannot
operate to deprive an individual, possessed with special skills, expertise and talent, of his right to contract as an independent
contractor. An individual like an artist or talent has a right to render his services without any one controlling the means and methods by
which he performs his art or craft. This Court will not interpret the right of labor to security of tenure to compel artists and talents to
render their services only as employees. If radio and television program hosts can render their services only as employees, the station

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owners and managers can dictate to the radio and television hosts what they say in their shows. This is not conducive to freedom of
the press.

Bernarte v PBA et al GR 192084 (September 14, 2011)


Facts:
Bernarte was invited to join the PBA as referees. During the leadership of Commissioner Emilio Bernardino, they were made
to sign contracts on a year-to-year basis. On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising
him that his contract would not be renewed citing his unsatisfactory performance on and off the court. Respondents averred that
complainants entered into two contracts of retainer with the PBA.
The Labor Arbiter6 declared petitioner an employee whose dismissal by respondents was illegal. The NLRC affirmed the
Labor Arbiters judgment. The Court of Appeals overturned the decisions of the NLRC and Labor Arbiter.

Issue:
WON petitioner is an employee of respondents, which in turn determines whether petitioner was illegally dismissed.

Ruling:
To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test, to wit:
(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. The so-called control test is the most
important indicator of the presence or absence of an employer-employee relationship.19
The contractual stipulations do not pertain to, much less dictate, how and when petitioner will blow the whistle and make calls.
On the contrary, they merely serve as rules of conduct or guidelines in order to maintain the integrity of the professional basketball
league. As correctly observed by the Court of Appeals, how could a skilled referee perform his job without blowing a whistle and
making calls? x x x [H]ow can the PBA control the performance of work of a referee without controlling his acts of blowing the whistle
and making calls?20
In Sonza v. ABS-CBN Broadcasting Corporation: not all rules imposed by the hiring party on the hired party indicate that the
latter is an employee of the former. The Court held:

We find that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-
rating television and radio programs that comply with standards of the industry. We have ruled that:

Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services
being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall
squarely with the case of Insular Life Assurance Co., Ltd. v. NLRC. In said case, we held that:
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually
desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result,
create no employer-employee relationship unlike the second, which address both the result and the means used to achieve
it.22

We agree with respondents that once in the playing court, the referees exercise their own independent judgment, based on the rules of
the game, as to when and how a call or decision is to be made. The referees decide whether an infraction was committed, and the PBA
cannot overrule them once the decision is made on the playing court. The referees are the only, absolute, and final authority on the
playing court. Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and cannot
control the referee when he blows the whistle because such authority exclusively belongs to the referees. The very nature of
petitioners job of officiating a professional basketball game undoubtedly calls for freedom of control by respondents.

Unlike regular employees who ordinarily report for work eight hours per day for five days a week, petitioner is required to report for
work only when PBA games are scheduled or three times a week at two hours per game. In addition, there are no deductions for
contributions to the Social Security System, Philhealth or Pag-Ibig, which are the usual deductions from employees salaries. These
undisputed circumstances buttress the fact that petitioner is an independent contractor, and not an employee of respondents.

In Yonan v. United States Soccer Federation, Inc: a soccer referee, is an independent contractor. Generally, if an employer has the
right to control and direct the work of an individual, not only as to the result to be achieved, but also as to details by which the result is
achieved, an employer/employee relationship is likely to exist. The Court must be careful to distinguish between control[ling] the
conduct of another party contracting party by setting out in detail his obligations consistent with the freedom of contract, on the one
hand, and the discretionary control an employer daily exercises over its employees conduct on the other. The Federation did not
supervise Yonan, but rather evaluated his performance after matches. That the Federation evaluated Yonan as a referee does not
mean that he was an employee. There is no question that parties retaining independent contractors may judge the performance of
those contractors to determine if the contractual relationship should continue. A position that requires special skills and independent
judgment weights in favor of independent contractor status. Though substantial training supports an employment inference, that
inference is dulled significantly or negated when the putative employers activity is the result of a statutory requirement, not the
employers choice. x x x

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The fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the former. For a hired party to
be considered an employee, the hiring party must have control over the means and methods by which the hired party is to perform his
work, which is absent in this case. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between
PBA and petitioner. Conversely, if PBA decides to discontinue petitioners services at the end of the term fixed in the contract the same
merely results in the non-renewal of the contract, as in the present case. The non-renewal of the contract between the parties does not
constitute illegal dismissal of petitioner by respondents.

Semblante and Pilar v CA et al GR 196426 (August 15, 2011)


Facts:
Petitioners Semblante and Pilar assert that they were hired by respondents-spouses Vicente and Maria Luisa Loot, the
owners of Gallera de Mandaue (the cockpit), as the official masiador and sentenciador, respectively, of the cockpit sometime in 1993.
On November 14, 2003, however, petitioners were denied entry into the cockpit upon the instructions of respondents, and
were informed of the termination of their services effective that date. This prompted petitioners to file a complaint for illegal dismissal
against respondents.
In a Decision dated June 16, 2004, the Labor Arbiter found petitioners to be regular employees of respondents. The Labor
Arbiter also ruled that petitioners were illegally dismissed, and so ordered respondents to pay petitioners their backwages and
separation pay.[7]
The NLRC reversed such decision and held that there was no employer-employee relationship between petitioners and
respondents. Petitioners went to the CA. The CA held that respondents (being referees and bet-takers in a cockfight) need to have the
kind of expertise that is characteristic of the game to interpret messages conveyed by mere gestures. Hence, petitioners are akin to
independent contractors who possess unique skills, expertise, and talent to distinguish them from ordinary employees. Further,
respondents did not supply petitioners with the tools and instrumentalities they needed to perform work. Petitioners only needed their
unique skills and talents to perform their job as masiador and sentenciador.

Issue: WON petitioners are employees of respondents.

Ruling:
Petitioners are NOT employees of respondents, since their relationship fails to pass muster the four-fold test of employment:
(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, which is the most important element.[18]
As found by both the NLRC and the CA, respondents had no part in petitioners selection and management; [19] petitioners
compensation was paid out of the arriba (which is a percentage deducted from the total bets), not by petitioners; [20] and petitioners
performed their functions as masiador and sentenciador free from the direction and control of respondents.[21] In the conduct
of their work, petitioners relied mainly on their expertise that is characteristic of the cockfight gambling, [22] and were never given by
respondents any tool needed for the performance of their work.[23]
Respondents, not being petitioners employers, could never have dismissed, legally or illegally, petitioners, since respondents
were without power or prerogative to do so in the first place.

Atok Big Wedge Company v Gison GR 169510 (August 8, 2011)


Facts:
In February 1992, respondent Jesus P. Gison was engaged as part-time consultant on retainer basis by petitioner Atok Big
Wedge Company, Inc. as a consultant on retainer basis and liaison work with several government agencies. Petitioner did not require
respondent to report to its office on a regular basis, except when occasionally requested by the management to discuss matters
needing his expertise as a consultant. As payment for his services, respondent received a retainer fee of P3,000.00 a month,[3] which
was delivered to him either at his residence or in a local restaurant. The said arrangement continued for the next eleven years.
Sometime thereafter, since respondent was getting old, he requested that petitioner cause his registration with the SSS, but petitioner
did not accede to his request. The company issued a Memorandum terminating his retainer contract. The respondent filed a
Complaint[6] for illegal dismissal, unfair labor practice, underpayment of wages, non-payment of 13th month pay, vacation pay, and sick
leave pay with the NLRC. The Labor Arbiter found no employer-employee relationship between petitioner and respondent. Respondent
then appealed the decision to the NLRC. The NLRC affirmed the lower courts decision. Aggrieved, respondent filed a petition before
CA. CA reversed the decision of NLRC.

Issue:
WON an employer-employee relationship exists between petitioner and respondent.

Ruling:
Petitioner insists that respondent is not a regular employee and not entitled to reinstatement.
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 employee's conduct, or the so-called "control test." [18] Of these four, the last one is the most important. [19] The so-called
control test is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-
employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in
reaching that end.[20]
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Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at bar. Among
other things, respondent was not required to report everyday during regular office hours of petitioner. Respondent's monthly retainer
fees were paid to him either at his residence or a local restaurant. More importantly, petitioner did not prescribe the manner in which
respondent would accomplish any of the tasks in which his expertise as a liaison officer was needed; respondent was left alone and
given the freedom to accomplish the tasks using his own means and method. Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by which respondent performed these tasks. Verily, the absence of the element of
control on the part of the petitioner engenders a conclusion that he is not an employee of the petitioner.

Moreover, the absence of the parties' retainership agreement notwithstanding, respondent clearly admitted that
petitioner hired him in a limited capacity only and that there will be no employer-employee relationship between them. As
averred in respondent's Position Paper:[21]

2. For the participation of complainant regarding this particular problem of Atok, Mr. Torres offered him a pay in the amount of
Php3,000.00 per month plus representation expenses. It was also agreed by Mr. Torres and the complainant that his
participation on this particular problem of Atok will be temporary since the problem was then contemplated to be
limited in nature, hence, there will be no employer-employee relationship between him and Atok.
Respondent's length of service and petitioner's repeated act of assigning respondent some tasks to be performed
did not result to respondent's entitlement to the rights and privileges of a regular employee.

Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still cannot be
considered as a regular employee of petitioner. Article 280 of the Labor Code, in which the lower court used to buttress its
findings that respondent became a regular employee of the petitioner, is not applicable in the case at bar. Indeed, the Court
has ruled that said provision is not the yardstick for determining the existence of an employment relationship because it merely
distinguishes between two kinds of employees, i.e., regular employees and casual employees, for purposes of determining the right of
an employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the existence of an
employment relationship is in dispute.[24] It is, therefore, erroneous on the part of the Court of Appeals to rely on Article 280 in
determining whether an employer-employee relationship exists between respondent and the petitioner

Considering that there is no employer-employee relationship between the parties, the termination of respondent's services by
the petitioner after due notice did not constitute illegal dismissal warranting his reinstatement and the payment of full backwages,
allowances and other benefits.

Sandigan Bank and Sandigan Realty v NLRC and Javier GR 112877 (February 26, 1996)
Facts:

Private respondent Javier worked as a realty sales agent of the petitioner Sandigan Realty from November 2, 1982 (or November
9, 1982)[4] to November 30, 1986. Subsequently, that is, on 1 December 1986, Javier was hired as a marketing collector of petitioner
Sandigan Bank by Angel Andan, the President of both the Sandigan Bank and Sandigan Realty.

On 20 April 1990, Javier was advised by Angel Andan not to report for work anymore. This in effect was a notice of dismissal.
The advice of her termination notwithstanding, Javier reported for work at the bank on the next working day or on 23 April
1990. Though she signed the attendance sheet, she left when she could not find her table.

On 18 May 1990, Javier filed a complaint against petitioners and Angel Andan with the NLRC for illegal dismissal, seeking
reinstatement and payment of backwages and moral and exemplary damages.

On October 6, 1992, the labor arbiter rendered judgment reinstating Javier etc. On appeal, the NLRC affirmed the decision of the
Labor Arbiter.

Issue:

WON the respondent NLRC abused its discretion in finding that private respondent was a regular employee of the petitioner
Sandigan Realty, entitled to backwages and separation pay because of her alleged illegal separation therefrom.

Ruling:

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; ELEMENTS OF EMPLOYER-EMPLOYEE


RELATIONSHIP. - In determining the existence of an employer-employee relationship, the following elements are generally

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considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
employers power to control the employee with respect to the means and methods by which the work is to be accomplished.

2. ID.; ID.; ID.; RIGHT OF CONTROL TEST, CONSTRUED. - This Court has generally relied on the so-called right of control test in
making such a determination. Where the person for whom the services are performed reserves a right to control not only the end
to be achieved but also the means by which such end is reached, the relationship is deemed to exists. Stated differently, it is the
power of control which is the most determinative factor. It is deemed to be such an important factor that the other requisites may
even be disregarded.

3. ID.; ID.; ID.; REALTY SALES AGENT NOT AN EMPLOYEE; NOT ENTITLED TO SECURITY OF TENURE; REASON. - As it
appears that Sandigan Realty had no control over the conduct of Javier as a realty sales agent since its only concern or interest
was in the result of her work and not in how it was achieved, there cannot now be any doubt that Javier was not an employee,
much less a regular employee of the Sandigan Realty. Hence, she cannot be entitled to the right to security of tenure nor to
backwages and separation pay as consequence of her separation therefrom. Evidently, the legal relation of Javier to the
Sandigan Realty can be that of an independent contractor, where the control of the contracting party is only with respect to the
result of the work, as distinguished from an employment relationship where the person rendering service is under the control of
the hirer with respect to the details and manner of performance.

4. ID.; ID.; ID.; MARKETING COLLECTOR, A REGULAR EMPLOYEE; ENTITLED TO SECURITY OF TENURE. - Private respondent
Anita Javier as marketing collector of petitioner Bank, by virtue of her employment status, is, under the law entitled to security of
tenure, which means that she has the right to continue in employment until the same is terminated under contitions required by
Article 279 of the Labor Code, as amended.

5. ID.; ID.; ID.; ID.; ENTITLED TO REINSTATEMENT AND BACKWAGES IN CASE OF ILLEGAL DISMISSAL. - There being a
finding of illegal dismissal of private respondent Anita Javier, her reinstatemet should follow as a matter of course, unless it be
shown that the same is no longer possible, in which case, payment of separation pay will be ordered, in lieu thereof. In this case,
we do not find any such showing or basis to preclude private respondents reinstatement. In effect, the petitioner bank is liable to
private respondent only for backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from
the time her compensation was withheld from her up to the time of her actual reinstatement, at the rate of her latest monthly
salary and allowance which was in the total amount of P2,350.00 as shown by Javiers latest Notice of Salary Adjustment.

6. ID.; ID.; ID.; ID.; ID.; EARNINGS ELSEWHERE SHOULD BE DEDUCTED FROM BACKWAGES. - Earnings derived elsewhere by
Javier from the date of dismissal up to the date of reinstatement, if there be any, should be deducted from said backwages. In this
connection, it must be pointed out that the NLRC applied the old rule, otherwise known as the Mercury Drug Rule, and so, as to
the rate of P2,400.00, no evidence was presented as basis. The rule that should apply in this case is that provided in Article 279
of the Labor Code, as amended by Section 34, Republic Act No. 6715, as aforequoted, which took effect on March 21, 1989,
considering that the private respondents dismissal occurred thereafter, or on April 20, 1990.

Great Pacific Life Assurance Corp v NLRC et al GR 80750-51 (July 23, 1990)
Facts:

Brothers Rodrigo and Ernesto Ruiz (private respondents herein) entered into individual agency agreements with petitioner
Grepalife in 1977, each starting out as trainee-agents and later promoted to higher positions. On July 6,1981, Ernesto was designated
as district manager under a three-year Agreement of Managership. However, he was dismissed from service on November 30, 1983,
before the lapse of the period fixed in the contract, when upon audit he was found to have delayed the remittance of premium
collections in his possession and to have appropriated for his own use. Grepalife then designated Rodrigo as officer-in charge.
Unfortunately, Rodrigo proved to be made of the same stuff as his brother. The brothers filed a case of illegal dismissal. The labor
arbiter found that Rodrigo and Ernesto: (1) were employees of Grepalife; (2) committed acts inimical to Grepalife's business; and (3)
were dismissed without first being afforded due process by way of a notice in writing of the grounds for their dismissal. However,
despite such findings, the labor arbiter ordered their reinstatement without backwages. NLRC affirmed the factual findings of the labor
arbiter but reversed the order of reinstatement on the ground that Grepalife cannot ' be compelled to retain an employee found guilty of
acts inimical to its interest. Nevertheless, 'separation pay" was awarded in favor of private respondents for petitioner's failure to
observe due process prior to their termination from employment.

Issue:
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WON there exist an employer-employee relationship.

Ruling:

The relationships of the Ruiz brothers and Grepalife were those of employer-employee.

Article 280 of the Labor Code provides that "[the provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. ..." Furthermore,
in determining who is considered an "employee', the Court has time and again applied the "four-fold" test,* with control being the most
crucial and determinative indicator of an employer-employee relationship. The 'employer" must have control (or must have reserved the
right to control) not only over the result of the "employee's" work but also the means and methods by which it is to be accomplished
[Investment Planning Corp. of the Philippines v. SSS, G.R. No. L-19124, November 18, 1967, 21 SCRA 924; Mafinco Trading Corp. v.
Ople, G.R. No. L-37790, March 25, 1976, 70 SCRA 139; Rosario Brothers, Inc. v. Ople, G.R. No. 53590, July 31, 1984, 131 SCRA 72;
Brotherhood Labor Unity Movement of the Philippines v. Zamora, G.R. No.
L-48645, January 7, 1987,147 SCRA 49; Grepalife v. NLRC, G.R. No. 73887, December 21, 1989].

First, their work at the time of their dismissal as zone supervisor and district manager are necessary and desirable to the
usual business of the insurance company. They were entrusted with supervisory, sales and other functions to guard Grepalife's
business interests and to bring in more clients to the company, and even with administrative functions to ensure that all collections,
reports and data are faithfully brought to the company.

Furthermore, it cannot be gainsaid that Grepalife had control over private respondents' performance as well as the result of
their efforts. A cursory reading of their respective functions as enumerated in their contracts reveals that the company practically
dictates the manner by which their jobs are to be carried out. For instance, the District Manager must properly account, record and
document the company's funds spot-check and audit the work of the zone supervisors, conserve the company's business in the district
through 'reinstatements', follow up the submission of weekly remittance reports of the debit agents and zone supervisors, preserve
company property in good condition, train understudies for the position of district manager, and maintain his quota of sales (the failure
of which is a ground for termination). On the other hand, a zone supervisor must direct and supervise the sales activities of the debit
agents under him, conserve company property through "reinstatements", undertake and discharge the functions of absentee debit
agents, spot-check the records of debit agents, and insure proper documentation of sales and collections by the debit agents.

True, it cannot be denied that based on the definition of an "insurance agent" in the Insurance Code [Art. 300] some of the
functions performed by private respondents were those of insurance agents. Nevertheless, it does not follow that they are not
employees of Grepalife. The Insurance Code may govern the licensing requirements and other particular duties of insurance agents,
but it does not bar the application of the Labor Code with regard to labor standards and labor relations.

With respect to the second issue, petitioner argues that private respondents are not entitled to separation pay since there was
clear finding of just cause for dismissal, and furthermore "neither the law nor the rules implementing the same authorizes the award of
separation pay as 'penalty."

South Davao Development Company (Sodaco Agricultural Corporation) v Gamo et al GR 171814 (May 8, 2009)

Facts:

Petitioner corporation hired respondent Gamo as a foreman. Sometime in 1987, petitioner appointed Gamo as a copra maker
contractor. From 1987 to 1999, Gamo and petitioner entered into a profit-sharing agreement wherein 70% of the net proceeds of the
sale of copra went to petitioner and 30% to Gamo.

Petitioner wanted to standardize payments to its contractors in its coconut farms. On 2 October 1999, petitioner proposed a
new payment scheme to Gamo. Gamo and petitioner failed to agree on a payment scheme, thus, petitioner did not renew the
contract of Gamo. Gamo and the copra workers alleged that they were illegally dismissed.

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The labor arbiter dismissed[9] the complaint. He ruled that there was no employee-employer relationship between petitioner and
respondents. Respondents appealed to the NLRC. The NLRCs Resolution[10] reversed the arbiters decision and ruled that
respondents were petitioners employees. Petitioner moved[11] for reconsideration. The NLRC granted[12] the motion for reconsideration
and ruled that the nature of the job of the respondents could not result in an employer-employee relationship. Respondents filed a
petition for certiorari[14] under Rule 65 with the Court of Appeals. The Court of Appeals ruled that there existed an employer-employee
relationship.
Issue:
WON Gamo is an independent contractor. (or WON there exists an employer-employee relationship).
Ruling:
In Escario v. NLRC,[20] we ruled that there is permissible job contracting when a principal agrees to put out or farm out with a
contractor or a subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period,
regardless of whether such job or work service is to be performed within or outside the premises of the principal. [21] To establish the
existence of an independent contractor, we apply the following conditions: first, the contractor carries on an independent business and
undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected with the performance of the work except to the result thereof;
and second, the contractor has substantial capital or investments in the form of tools, equipment, machineries, work premises and
other materials which are necessary in the conduct of his business.[22]

The Implementing Rules and Regulation of the Labor Code defines investmentas tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the
job, work, or service contracted out.[23] The investment must be sufficient to carry out the job at hand.

In the case at bar, Gamo and the copra workers did not exercise independent judgment in the performance of their tasks. The
tools used by Gamo and his copra workers like the karit, bolo, pangbunot, panglugit and pangtapok are not sufficient to enable them to
complete the job.[24] Reliance on these primitive tools is not enough. In fact, the accomplishment of their task required more expensive
machineries and equipment, like the trucks to haul the harvests and the drying facility, which petitioner corporation owns.

In order to determine the existence of an employer-employee relationship, the Court has frequently applied the four-fold test:
(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, which is considered the most important element. [25] From the time they were
hired by petitioner corporation up to the time that they were reassigned to work under Gamos supervision, their status as petitioner
corporations employees did not cease. Likewise, payment of their wages was merely coursed through Gamo. As to the most
determinative testthe power of control, it is sufficient that the power to control the manner of doing the work exists, it does not require
the actual exercise of such power.[26] In this case, it was in the exercise of its power of control when petitioner corporation transferred
the copra workers from their previous assignments to work as copraceros. It was also in the exercise of the same power that petitioner
corporation put Gamo in charge of the copra workers although under a different payment scheme. Thus, it is clear that an employer-
employee relationship has existed between petitioner corporation and respondents since the beginning and such relationship did not
cease despite their reassignments and the change of payment scheme.

Gomez v PNOC Development and Management (PDMC) GR 174044 (November 27, 2009)
Facts:
Filoil, a government-owned corporation, appointed Gomez as its corporate secretary and legal counsel. Filoil was later on was
identified for privatization. To facilitate its conversion, the Filoil board of directors created a five-member task force headed by
petitioner Gomez who had been designated administrator. Filoil underwent reorganization and was later became the respondent PNOC
Development Management Corporation (PDMC). When this happened, Gomezs task force was abolished and its members, including
Gomez, were given termination notices. The matter was then reported to the Department of Labor and Employment on March 7, 1996.
[4]

Meantime, petitioner Gomez continued to serve as corporate secretary of respondent PDMC. On September 23, 1996 its
president re-hired her as administrator and legal counsel of the company. On May 24, 1998, the next president of PDMC extended her
term as administrator beyond her retirement age, [6] pursuant to his authority under the PDMC Approvals Manual. [7] She was supposed
to serve beyond retirement from August 11, 1998 to August 11, 2004. Meantime, a new board of directors for PDMC took over the
company.

On March 29, 1999 the new board of directors of respondent PDMC removed petitioner Gomez as corporate
secretary. Further, at the boards meeting on October 21, 1999 the board questioned her continued employment as administrator.
Petitioner Gomez for her part conceded that as corporate secretary, she served only as a corporate officer. But, when they named her
administrator, she became a regular managerial employee. Consequently, the respondent PDMCs board did not have to approve
either her appointment as such or the extension of her term in 1998.

Pending resolution of the issue, the respondent PDMCs board withheld petitioner Gomezs wages from November 16 to 30,
1999, prompting her to file a complaint for non-payment of wages, damages, and attorneys fees with the Labor Arbiter on December 8,
1999.
The Labor Arbiter granted the motion[15] upon a finding that Gomez was a corporate officer and that her case involved an
intra-corporate dispute that fell under the jurisdiction of the Securities and Exchange Commission (SEC) pursuant to Presidential
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Decree (P.D.) 902-A.[16] On motion for reconsideration, the National Labor Relations Commission (NLRC) remanded the case to the
arbitration branch for further proceedings.[17] It held that Gomez was a regular employee, not a corporate officer; hence, her complaint
came under the jurisdiction of the Labor Arbiter.

Upon elevation of the matter to the Court of Appeals, however, the latter rendered a decision on May 19, 2006, [18] reversing
the NLRC decision. The CA held that since Gomezs appointment as administrator required the approval of the board of directors, she
was clearly a corporate officer. Thus, her complaint is within the jurisdiction of the Regional Trial Court (RTC) under P.D. 902-A, as
amended by Republic Act (R.A.) 8799.[19] With the denial of her motion for reconsideration, [20] Gomez filed this petition for review
on certiorari under Rule 45.
Issue:
WON petitioner Gomez was, in her capacity as administrator of respondent PDMC, an ordinary employee whose complaint for
illegal dismissal and non-payment of wages and benefits is within the jurisdiction of the NLRC.
Ruling:
The relationship of a person to a corporation, whether as officer or agent or employee, is not determined by the nature of the
services he performs but by the incidents of his relationship with the corporation as they actually exist. [27] Here, respondent PDMC
hired petitioner Gomez as an ordinary employee without board approval as was proper for a corporate officer. When the company got
her the first time, it agreed to have her retain the managerial rank that she held with Petron. Her appointment paper said that she
would be entitled to all the rights, privileges, and benefits that regular PDMC employees enjoyed. [28] This is in sharp contrast to what
the former PDMC presidents appointment paper stated: he was elected to the position and his compensation depended on the will of
the board of directors.[29]

What is more, respondent PDMC enrolled petitioner Gomez with the Social Security System, the Medicare, and the Pag-Ibig
Fund. It even issued certifications dated October 10, 2008, [30] stating that Gomez was a permanent employee and that the company
had remitted combined contributions during her tenure. The company also made her a member of the PDMCs savings and provident
plan[31] and its retirement plan.[32] It grouped her with the managers covered by the companys group hospitalization insurance.
[33]
Likewise, she underwent regular employee performance appraisals,[34] purchased stocks through the employee stock option plan,
[35]
and was entitled to vacation and emergency leaves.[36] PDMC even withheld taxes on her salary and declared her as an employee
in the official Bureau of Internal Revenue forms. [37] These are all indicia of an employer-employee relationship which respondent
PDMC failed to refute.

Estoppel, an equitable principle rooted on natural justice, prevents a person from rejecting his previous acts and
representations to the prejudice of others who have relied on them. [38] This principle of law applies to corporations as well. The PDMC
in this case is estopped from claiming that despite all the appearances of regular employment that it weaved around petitioner Gomezs
position it must have technically hired her only as a corporate officer. The board and its officers made her stay on and work with the
company for years under the belief that she held a regular managerial position.

That petitioner Gomez served concurrently as corporate secretary for a time is immaterial. A corporation is not prohibited
from hiring a corporate officer to perform services under circumstances which will make him an employee. [39] Indeed, it is possible for
one to have a dual role of officer and employee. In Elleccion Vda. De Lecciones v. National Labor Relations Commission,[40] the Court
upheld NLRC jurisdiction over a complaint filed by one who served both as corporate secretary and administrator, finding that the
money claims were made as an employee and not as a corporate officer.

Dealco Farms Inc v NLRC et al. GR 153192 (January 30, 2009)


Facts:
Petitioner is a corporation engaged in the business of importation, production, fattening and distribution of live cattle for sale to
meat dealers, meat traders, meat processors, canned good manufacturers and other dealers in Mindanao and in Metro Manila.
Respondents Albert Caban and Chiquito Bastida were hired by petitioner on June 25, 1993 and October 29, 1994, respectively,
as escorts or comboys for the transit of live cattle from General Santos City to Manila. Respondents work entailed tending to the
cattle during transportation. It included feeding and frequently showering the cattle to prevent dehydration and to develop heat
resistance. On the whole, respondents ensured that the cattle would be safe from harm or death caused by a cattle fight or any such
similar incident.
On October 15, 1999, respondents Bastida and Caban, together with Ramon Maquinsay and Roland Parrocha, filed a Complaint
for illegal dismissal with claims for separation pay with full backwages, salary differentials, service incentive leave pay, 13 th month pay,
damages, and attorneys fees against petitioner, Delfin Alcoriza[2] and Paciano Danilo Ramis[3] before the National Labor Relations
Commission (NLRC)
In all, respondents alleged in their position paper that: (1) they were illegally dismissed, as they never violated any of petitioners
company rules and policies; (2) their dismissal was not due to any just or authorized cause; and (3) petitioner did not observe due
process in effecting their dismissal, failing to give them written notice thereof. Thus, respondents prayed for money claims, i.e., salary
differentials, service incentive leave pay, cost of living allowance (COLA) and 13th month pay. The Labor Arbiter granted respondents
claim for separation pay, COLA and union service fees. However, the Labor Arbiter denied respondents claim for backwages,
13th month pay, salary differential, service incentive leave pay and damages. On appeal the NLRC affirmed the Labor Arbiters ruling on
the existence of an employer-employee relationship between the parties and the total monetary award of P41,580.00 representing
respondents separation pay, COLA and union service fees.
Undaunted, petitioner filed a petition for certiorari before the CA. As previously adverted to, the CA denied due course and
dismissed the petition.
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Issue:
WON respondents were employees of petitioner and if they are entitled to their money claims.
Ruling:
In the case at bench, both the Labor Arbiter and the NLRC were one in their conclusion that respondents were not independent
contractors, but employees of petitioner. In determining the existence of an employer-employee relationship between the parties, both
the Labor Arbiter and the NLRC examined and weighed the circumstances against the four-fold test which has the following elements:
(1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control the employees conduct, or the
so-called control test.[14] Of the four, the power of control is the most important element. More importantly, the control test merely calls
for the existence of the right to control, and not necessarily the exercise thereof.[15]
Having failed to substantiate its allegation (petitioner) on the relationship between the parties, we stick to the settled rule in
controversies between a laborer and his master that doubts reasonably arising from the evidence should be resolved in the formers
favor.[18] The policy is reflected in no less than the Constitution,[19] Labor Code[20]and Civil Code.[21]

Moreover, petitioners other contention that the shipment and the escort of live cattle is not part of its business, thus, at most,
respondents may only be considered as casual employees, likewise fails to persuade.

First. Petitioner failed to disprove respondents claim that they were hired by petitioner as comboys from 1993 and 1994,
respectively. In fact, petitioner admits that respondents were engaged, at one point, as comboys, on a per trip or per contract
basis. This assertion petitioner failed anew to substantiate. Noteworthy is the fact that Maquinsays and Parrochas affidavit merely
contain a statement that the offer of their services as comboys or escorts was not limited to petitioner alone. The affidavits simply aver
that they, including herein respondents, were engaged by Dealco on a per trip basis, which commenced upon embarkation on a ship
for Manila and terminated upon their return to the port of origin. Maquinsay and Parrocha did not state that respondents engagement
by petitioner was on a one-time basis. As a result, petitioners claim remains an unsubstantiated and bare-faced allegation.

Second. Even assuming that respondents task is not part of petitioners regular course of business, this does not preclude
their attainment of regular employee status.
Article 280 of the Labor Code explicitly provides:

Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such activity exists.[22]

Undoubtedly, respondents were regular employees of petitioner with respect to the escort or comboy activity for which they had been
engaged since 1993 and 1994, respectively, without regard to continuity or brokenness of the service.

Lastly, considering that we have sustained the Labor Arbiters and the NLRCs finding of an employer-employee
relationship between the parties, we likewise sustain the administrative bodies finding of respondents illegal dismissal.

Maranaw Hotels and Resort Corp v CA et al GR 149660 (January 20, 2009)


Facts:

Private respondent Oabel was initially hired by petitioner as an extra beverage attendant on April 24, 1995. This lasted until
February 7, 1997. On September 16, 1996,[2] petitioner contracted with Manila Resource Development Corporation.[3] Subsequently,
private respondent Oabel was transferred to MANRED, with the latter deporting itself as her employer.[4] MANRED has intervened at all
stages of these proceedings and has consistently claimed to be the employer of private respondent Oabel.
On July 20, 1998, private respondent filed before the Labor Arbiter a petition for regularization of employment against the
petitioner. On August 1, 1998, however, private respondent Oabel was dismissed from employment. [6] Respondent converted her
petition for regularization into a complaint for illegal dismissal. The Labor rendered that the respondent is a project employee which
does not ripened (sic) into regular employee (sic). [7] Private respondent appealed before the National Labor Relations Commission
(NLRC). The NLRC reversed the ruling of the Labor Arbiter and held that: (1) MANRED is a labor-only contractor, and (2) private
respondent was illegally dismissed.

Petitioner duly filed its motion for reconsideration which was denied by the Court of Appeals.

Issue:

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WON the respondent is a regular employee.

Ruling:

Petitioner posits that it has entered into a service agreement with intervenor MANRED. The latter, in turn, maintains that
private respondent Oabel is its employee and subsequently holds itself out as the employer and offers the reinstatement of private
respondent.

Notably, private respondents purported employment with MANRED commenced only in 1996, way after she was hired by the
petitioner as extra beverage attendant on April 24, 1995. There is thus much credence in the private respondents claim that the service
agreement executed between the petitioner and MANRED is a mere ploy to circumvent the law on employment, in particular that which
pertains on regularization.

In this regard, it has not escaped the notice of the Court that the operations of the hotel itself do not cease with the end of
each event or function and that there is an ever present need for individuals to perform certain tasks necessary in the petitioners
business. Thus, although the tasks themselves may vary, the need for sufficient manpower to carry them out does not. In any event, as
borne out by the findings of the NLRC, the petitioner determines the nature of the tasks to be performed by the private respondent, in
the process exercising control.

This being so, the Court finds no difficulty in sustaining the finding of the NLRC that MANRED is a labor-only contractor.
[20]
Concordantly, the real employer of private respondent Oabel is the petitioner.

It appears further that private respondent has already rendered more than one year of service to the petitioner, for the period
1995-1998, for which she must already be considered a regular employee, pursuant to Article 280 of the Labor Code:

Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That
any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall
continue while such activity exists. (Emphasis supplied)

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