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Midterm Case

Digest Compilation
2017
LLB 242N Labor
Standards Law
KIMBERLY E. URBIZTONDO
EH 401

8/14/2017

1.THE APPLICABLE LAWS
2.BASIC PRINCIPLES
CASES:
1. Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004
2. Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]
3. Phil. Global Communication vs. De Vera, 459 SCRA 260 [2005]
4. ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006
5. Francisco vs. NLRC, 500 SCRA 690 [06]
6. Nogales et al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006
7. Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007
8. Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008
9. Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009
10. Tongko vs. Manufacturer Life Insurance Co. (Phils), Inc., et al., G.R. No. 167622, January 25, 2011, En Banc, see June
29, 2010 Main Decision
11. Semblante et al., vs. Court of Appeals, et al., G.R. No. 196426, August 15, 2011
12. Bernarte vs. Phil. Basketball Association et al., G.R. No. 192084, September 14, 2011
13. Lirio vs. Genovia, G.r. No. 169757, November 23, 2011
14. Jao vs. BCC Products Sales Inc. G.R. No. 163700, April 18, 2012
15. Legend Hotel (Manila) vs. Realuyo G.R. No. 153511, July 18, 2012
16. The New Philippine Skylanders, Inc., vs. Dakila, G.r. No. 199547, Sept. 24, 2012
17. Tesoro et al., vs. Metro Manila Retreaders Inc., et al., GR No. 171482, March 12, 2014
18. Royale Homes Marketing Corp., vs. Alcantara, GR No. 195190, July 28, 2014
19. Fuji Television Network Inc. vs. Espiritu, GR No. 204944-45, December 3, 2014
20. Cabaobas et al., vs. Pepsi Cola GR No.176908, March 25, 2015
21. Begino et al., vs. ABS-CBN Corp., GR No. 199166, April 20, 2015
22. Social Security System vs. Ubana, GR No. 200114, Aug 25, 2015
23. Century Properties Inc. vs. Babiano, et al., GR No. 220978, July 5, 2016
24. Lu vs. Enopia, GR No. 197899, March 6, 2017
3.HIRING OF EMPLOYEE
CASES:
1. PT&T vs. NLRC, 272 SCRA 596 [1997]
2. Duncan Asso. Of Detailman-PTGWO vs. Glaxo Wellcome Phils., G.R. No. 162994, Sept. 17, 2004
3. Star Paper Corp., vs. Simbol, G.R. No. 164774, April 12, 2006
4. Del Monte Phils vs. Velasco, G.R. No. 153477, March 6, 2007
5. Yrasuegui vs. Phil Air Lines, G.R. No. 168081, October 17, 2008
4.WAGES & WAGE RATIONALIZATION ACT
4.AVIOLATION OF WAGE ORDER

CASES:
1. S.I.P. Food House et al., vs. Batolina, GR No. 192473, Oct 11, 2010
2. SLL International Cables Specialist vs. NLRC, GR No. 172161, March 2, 2011
3. Vergara, Jr. vs. Coca-Cola Bottlers Phils Inc. G.R. No. 176985, April 1, 2013
4. Royal Plant Workers Union vs. Coca-Cola Bottlers Phils Inc. -Cebu Plant, G.R. No. 198783, April 15, 2013
5. The National Wages & Productivity Commission et al., vs. The Alliance of Progressive Labor et al., GR No. 150326,
March 12, 2014
6. David/Yiels Hog Dealer vs. Macasio, GR No. 195466, July 2, 2014
7. Our Haus Realty Development Corp., vs. Parian et al., GR No. 204651,
August 6, 2014
8. Milan et al., vs. NLRC GR No. 202961, February 4, 2015
9. Toyota Pasig Inc vs. De Peralta, GR No. 213488, Nov 7, 2016

5.WAGE ENFORCEMENT AND RECOVERY
CASES:
1. Tiger Construction and Development Corp vs. Abay et al., GR No. 164141, Feb. 26, 2010
2. People’s Broadcasting (Bombo Radyo Phils) vs. Sec. of DOLE et al., GR No. 179652, March 6, 2012 Resolution on the
main Decision of May 8, 2009
3. Superior Packaging Corp., vs. Balagsay et al., G.R. No. 178909, October 10, 2012

6.WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES
CASES:
1. SHS Perforated Materials, Inc. et al., vs. Diaz, GR No. 185814, Oct. 13, 2010
2. Nina Jewelry Manufacturing of Metal Arts Inc. vs. Montecillo, G.R. No. 188169, November 28, 2011
3. Locsin II vs. Mekeni Food Corp., GR No. 192105, December 9, 2013
4. TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union, GR No. 191714, Feb 26, 2014
5. Wesleyan University-Phils., vs. Wesleyan University-Phils., Faculty & Staff Asso., GR No. 181806, March 12, 2014
6. Bluer Than Blue Joint Ventures Co., vs. Esteban, GR No. 192582, April 7, 2014, citing2011 Nina Jewelry Manufacturing
of Metal Arts Inc. vs. Montecillo
7. Netlink Computer Inc. vs. Delmo, GR No. 160827, June 18, 2014

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Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401

8. PLDT vs. Estranero, GR No. 192518, October 15, 2014
9. Milan et al vs. NLRC, GR No. 202961, Feb. 4, 2015
10. Galang et al., vs. Boie Takeda Chemicals Inc. et al., GR No. 183934, July 20, 2016

7.PAYMENT OF WAGES
CASES:
1. Congson vs. NLRC, 243 SCRA 260 [1995]
2. North Davao Mining vs. NLRC, 254 SCRA 721 [1996]
3. Heirs of Sara Lee vs. Rey, G.R. No. 149013, Aug. 31, 2006

8.CONDITIONS OF EMPLOYMENT
CASES:
1. San Juan De Dios Hospital vs. NLRC, 282 SCRA 316 [1997]
2. Simedarby vs. NLRC, 289 SCRA 86 [1998]
3. Phil. Airlines vs. NLRC, 302 SCRA 582 [1999]
4. Linton Commercial Co., Inc., vs. Hellera et al., G.R. No. 163147, October 10, 2007
5. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, Oct. 15, 2008
6. Dasco et al., vs. Phiktranco Service Enterprise, GR No. 211141, June 29, 2016
7. HSY Marketing Ltd., Villatique, GR No. 219569, August 17, 2016
8. A. Nate Casket Maker et al., vs. Arango, et al., GR No. 192282, October 5, 2016

9.MINIMUM LABOR STANDARD BENEFITS
CASES:
1. San Miguel Corp., vs. CA, G.R. No. 146775, Jan. 30, 2002
2. Tan vs. Lagrama, G.R. No. 151228, August 15, 2002
3. Lambo vs. NLRC, 317 SCRA 420
4. R&E Transport vs. Latag, G.R. No. 155214, Feb. 13, 2004
5. Asian Transmission vs. CA, 425 SCRA 478 [2004]
6. Autobus Transport System vs. Bautista, G.R. No. 156364, May 16, 2005
7. San Miguel Corp., vs. Del Rosario, G.R. No. 168194, Dec. 13, 2005
8. Penaranda vs. Baganga Plywood Corp., G.R. No. 159577, May 3, 2006
9. Leyte IV Electric Cooperative Inc vs. LEYECO IV Employees Union-ALU, G.R. No. 1577745, October 19, 2007, citing
Wellington Investment vs. Trajano, 245 SCRA 561 [1995], and Odango vs. NLRC, G.R. No. 147420, June 10, 2004
10. Bahia Shipping Services vs. Chua, G.R. No. 162195, April 8, 2008, citing Cagampan vs. NLRC, 195 SCRA 533 [1998]
11. PNCC Skyway Traffic Management and Security Division Workers Organization, GR No. 171231, Feb. 17, 2010
12. Radio Mindanao Network Inc. et al., vs. Ybarola, Jr. G.R. No. 198662, Sept. 12, 2012
13. Robina Farms Cebu vs. Villa, GR No. 175869, April 18, 2016
14. Dela Salle Araneta University vs. Bernardo, GR No. 190809, February 13, 2017

10.OTHER SPECIAL BENEFITS
CASES:
1. Reyes vs. NLRC et al., G.R. No. 160233, August 8, 2007, citing Boie Takeda Chemicals vs. Dela Serna, 228 SCRA 329
[1993] & Phil. Duplicators vs. NLRC, 241 SCRA 380 [1995]
2. Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU, G.R. No. 170734, May
14, 2008
3. Universal Robina Sugar Milling Corp. vs. Caballeda, G.R. No. 156644, July 28, 2008
4. Cercado vs. Uniprom, Inc. G.R. No. 188154, October 13, 2010
5. Radio Mindanao Network Inc, et al., vs. Ybarola, Jr. et al., G.R. No. 198662, September 12, 2012
6. Padillo vs. Rural bank of Nabunturan Inc. G.r. No. 199338, Jan. 21, 2013
7. Grace Christian High School vs. Lavandera, GR No. 177845, August 20, 2014
8. Goodyear Philippines Inc. vs. Angus, GR No. 185449, November 12, 2015
9. Banco De Oro Unibank vs.Sagaysay,GR No. 214961, Sept 16, 2015
10. Perez vs. Camparts Industries Inc. GR No. 197557, October 5, 2016
11. Catotocan vs. Lourdes School of Quezon City Gr No. 213486, April 26, 2017
12. Philippine Airlines vs. Hassaram, GR. No. 217730, June 5, 2017

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Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401

000 for the second and third year. ABS-CBN did not instruct SONZA how to perform his job. skills and celebrity status. Judico. Lazaro had failed during the said period. 435 SCRA 472 [2004] Principle: employee-employer relationship is determined by the er-ee test especially with the control test Different kinds of worker(whether task basis. Independent contractors often present themselves to possess unique skills. that is. proprietor of Royal Star Marketing (Royal Star). 2004 Principle: Hosts in tv and radio programs are independent contractors (talents) and not employees of the broadcasting company because the element of control on their means. is the most important element. Sonza’s services to co-host its television and radio programs are because of his peculiar talents. rate basis) and/or Working hours in a day are not the factors that determines an ee-er relationship Facts: Private respondent Rosalina M. separation pay. ABS- CBN was represented by its corporate officers while MJMDC was represented by Sonza. and sounded on radio were outside ABS-CBN’s control. Clearly. the more likely the worker is considered an independent contractor. Individuals with special skills. but also as to the means and methods by which the same is accomplished. we find that SONZA is not an employee but an independent contractor. For violation of any provision of the Agreement. whether the "employer" controls or has 3|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . averring instead that she was a mere sales agent whom he paid purely on commission basis.R. which SONZA admittedly possesses. not only as to the result of the work done. A radio broadcast specialist who works under minimal supervision is an independent contractor. ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. Laudato (Laudato) filed a petition before the SSC for social security coverage and remittance of unpaid monthly social security contributions against her three (3) employers.[3]Laudato alleged that despite her employment as sales supervisor of the sales agents for Royal Star from April of 1979 to March of 1986. whether the employer controls or has reserved the right to control the employee. The greater the supervision and control the hirer exercises. On April 1996. In Grepalife v. Applying the control test to the present case. ABS-CBN merely reserved the right to modify the program format and airtime schedule "for more effective programming. To perform his work. expertise or talent to distinguish them from ordinary employees. Social Security Commission. The converse holds true as well – the less control the hirer exercises. the fact that Laudato was paid by way of commission does not preclude the establishment of an employer-employee relationship. Laudato could not be deemed an employee of Royal Star. All the talent fees and benefits paid to SONZA were the result of negotiations that led to the Agreement. However. ABS-CBN agreed to pay Sonza a monthly talent fee of P310. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.1. ABS-CBN.13th month pay. to report her to the SSC for compulsory coverage or remit Laudatos social security contributions. ABS-CBN claims that there exists a prevailing practice in the broadcast and entertainment industries to treat talents like Sonza as independent contractors. 138051. The right of labor to security of tenure cannot operate to deprive an individual. 000 for the first year and P317. signing bonus. The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer- employee relationship under labor laws. The right to life and livelihood guarantees this freedom to contract as independent contractors. appeared on television. This test is based on the extent of control the hirer exercises over a worker. G. Lazaro alsomaintained that Laudato was not subjected to definite hours and conditions of work. travel allowance and amounts under the Employees Stock Option Plan (ESOP). expertise or talent enjoy the freedom to offer their services as independent contractors. 2. the more likely the worker is deemed an employee. As such. as stated earlier. the power of dismissal and the employer’s power to control the employee on the means and methods by which the work is accomplished. Referred to in the agreement as agent. How SONZA delivered his lines. Sonza vs. Issue: Whether or not there was employer-employee relationship between the parties.[4] Lazaro denied that Laudato was a sales supervisor of Royal Star. Lazaro (Lazaro). but not conclusive. the payment of wages. manner and method is only minimal Facts: In May 1994. service incentive pay.[5] Issue: WON Lazaro is entitled for the social security contributions/ WON there is an employee-employer relationship Ruling: Yes. because of his unique skills. CA also affirmed the decision of NLRC. Sonza filed with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries. ABS-CBN signed an agreement with the Mel and Jay Management and Development Corporation (MJMDC)." ABS-CBN’s sole concern was the quality of the shows and their standing in the ratings. Lazaro vs. and Tiangco as its EVP and treasurer. possessed with special skills. despite the fact that the compensation that the agents on commission received was not paid by the company but by the investor or the person insured. the so-called "control test". of his right to contract as an independent contractor. After the said letter. Ruling: Case law has consistently held that the elements of an employee-employer relationship are selection and engagement of the employee. of an independent contractual relationship.[17] the Court upheld the existence of an employer-employee relationship between the insurance company and its agents. the determination of employer- employee relationship warrants the application of the control test. The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. Sonza wrote a letter to ABS-CBN where he irrevocably resigned in view of the recent events concerning his program and career. commission basis. as President and general manager. Sonza’s work as television and radio program host required special skills and talent. ABS-CBN continued to remit Sonza’s monthly talent fees but opened another account for the same purpose. June 10. It is an accepted doctrine that for the purposes of coverage under the Social Security Act. No. SONZA only needed his skills and talent. expertise and talent. MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as talent for radio and television. Among the respondents was herein petitioner Angelito L. which is engaged in the business of selling home appliances. job basis. either party may terminate their relationship. talent and celebrity status not possessed by ordinary employees. ABS-CBN contended that no employee-employer relationship existed between the parties. is a circumstance indicative. The specific selection and hiring of SONZA. The last element.[18] The relevant factor remains. NLRC affirmed the decision of the Labor Arbiter.

although compensated on commission basis. Management and treatment of employees that may necessitate hospitalization including emergency cases and accidents. Hence. My plan of works and targets shall cover the duties and responsibilities required of a practitioner in industrial medicine which includes the following: 1. If he were an employee he could not negotiate as to his hours of work. it being made clear therein that respondent will cover "the retainership the Company previously had with Dr. This is proof that the complainant understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. v. Eulau" and that respondent’s "retainer fee" will be at P4. and all matters referred which are medical in nature. Conduct home visits whenever necessary. and thus was subject to the control of management as to how she implements its policies and its end results. The parties agreed and formalized respondent’s proposal in a document denominated as RETAINERSHIP CONTRACT which will be for a period of one year subject to renewal. 5. evaluating conditions of employees applying for sick leave of absence and subsequently issuing proper certification. the illegal dismissal case. Inc. Holding of clinic hours in the morning and afternoon for a total of five (5) hours daily for consultation services to employees.[20] the employer similarly denied the existence of an employer-employee relationship. We are disinclined to reverse this finding. Conduct pre-employment physical check-up of prospective employees with no additional medical fee. This shows that the respondent PHILCOM did not have control over the schedule of the complainant as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. Retainership agreement went on from 1981 until 1996. I have the necessary qualifications. But he never raised those issues.M. as the claimant according to it. 2. Applying the four-fold test to this case.reserved the right to control the "employee" not only as to the result of the work to be done but also as to the means and methods by which the same is to be accomplished. [is] exempt from the observance of normal hours of work for his compensation is measured by the number of sales he makes. I shall readjust my private schedule to be available for the herein proposed extended hours. Attend to certain medical administrative functions such as accomplishing medical forms.00 a month. Laudato oversaw and supervised the sales agents of the company. should you consider this proposal. This Court declared that there was an employer-employee relationship. 3. 4. may I propose an extended two-hour service (1:00-3:00 P. Maalat. Phil. 3. Application of preventive medicine including periodic check-up of employees. you may state an offer based on your belief that I can very well qualify for the job having worked with your organization for some time now.) during which period I can devote ample time to both groups depending upon the urgency of the situation. it can be inferred that respondent was an independent contractor and not an employee of petitioner.[19] Neither does it follow that a person who does not observe normal hours of work cannot be deemed an employee. medically. De Vera.[21] Laudato was a sales supervisor and not a mere agent.000. In Cosmopolitan Funeral Homes. Global Communication vs. in the absence of countervailing evidence from Lazaro and also in light of the fact that Laudatos calling cards from Royal Star indicate that she is indeed a sales supervisor. therein proposing his plan of works required of a practitioner in industrial medicine (see Ruling). Said contract was renewed yearly.[22] As such. An ordinary employee would consider the SSS payments important and thus make sure they would be paid. FACTS: Dr. ISSUE: W/N an employer-employee relationship exists between PhilCom and De Vera RULING: NO. was a supervisor on commission basis who did not observe normal hours of work. 6. the complainant would have noticed that no SSS deductions were made on his remuneration or that the respondent was deducting the 10% tax for his fees and he surely would have complained about them if he had considered himself an employee of PHILCOM. The 4|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . x x x” The fact that respondent was not considered an employee was recognized by De vera himself in a signed letter #2 to the respondent: ‘To carry out your memo effectively and to provide a systematic and workable time schedule which will serve the best interests of both the present and absent employee. De Vera via a letter #1 offered his services to PhilCom. noting that [the] supervisor. we initially find that it was respondent himself who sets the parameters of what his duties would be in offering his services to petitioner. K. This is borne by no less than his letter #1 which reads: “x x x I shall have the time and effort for the position of Company physician with your corporation if you deemed it necessary. training and experience required by such position and I am confident that I can serve the best interests of your employees. 459 SCRA 260 [2005] CONCEPT: Applying the four-fold test. SC highlighted this portion of LA’s decision: "xxx After more than ten years of services to PHILCOM. On the subject of compensation for the services that I propose to render to the corporation. when De Vera’s services were terminated by PhilCom. The tenor of this letter indicates that the complainant was proposing to extend his time with the respondent and seeking additional compensation for said extension.

as written. Sick Leave Pay. respondents were not included to the CBA. a fixed amount for performance services irrespective of the time consumed. Hence. and not regular employees RULING: NO." As correctly observed by the petitioner. and 13th Month Pay with Damages against the petitioner before the NLRC. their compensation is computed on a program basis. However. even if the performance is not continuous and merely intermittent. 4. or where the work is continuous or intermittent. This clearly shows that the complainant never considered himself an employee of PHILCOM and thus. and may be extended/renewed provided that the program is on-going. respondent need not remit anything to the SSS in favor of the complainant. the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. As such." Clearly. We agree with respondents’ contention that where a person has rendered at least one year of service. Nazareno. Respondent takes no issue on the fact that petitioner’s business of telecommunications is not hazardous in nature. the employment is considered regular. he would have noticed that in non-hazardous workplaces. Sept. a PA’s engagement is coterminous with the completion of the program. 2006 CONCEPT: It is not the will or word of the employer which determines the nature of employment of an employee but the nature of the activities performed by such employee in relation to the particular business or trade of the employer. Citing Magsalin vs National Organization of Working Men: In determining whether an employment should be considered regular or non-regular. Petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA). Had only respondent read carefully the very statutory provision invoked by him. 26. He could even embark in the private practice of his profession. a PA may also be assigned to new programs upon the cancellation of one program and the commencement of another. the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. subject to such regulations as the Secretary of Labor may prescribe. adding that the law. anchors and talents occasionally "sideline" for other programs they produce. Holiday Pay.000. of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. if the employee has been performing the job for at least a year. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. G. The successive "retainership" agreements of the parties definitely hue to the very statutory provision relied upon by respondent. ABS-CBN vs. respondent has never cited even a single instance when petitioner interfered with his work. the employer may engage the services of a physician "on retained basis. De Vera went about performing his work at the company premises. The standard is whether the work undertaken is necessary or desirable in the usual business or trade of the 5|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . reporters. a part-time physician who needed to stay in the premises of the non-hazardous workplace for two (2) hours. regardless of the nature of the activity performed. while it is true that the provision requires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees. Also. the employment is considered regular as long as the activity exists. therefore. what applies here is the last paragraph of Article 157 which. not to mention the fact that respondent’s work hours and the additional compensation therefor were negotiated upon by the parties. as claimed by ABS-CBN. Premium Pay. PhilCom had no control over the means and methods by which Dr. Finally. whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. remarkably absent from the parties’ arrangement is the element of control. not employ. to stress. since petitioner refused to recognize PAs as part of the bargaining unit. Service Incentive Pay. which thereby negates the element of control in their relationship. They were issued ABS-CBN employees’ IDs and were required to work for a minimum of eight hours a day. (See Article 280 of the Labor Code) Citing Universal Robina Corporation vs Catapang: The primary standard. the parties themselves practically agreed on every terms and conditions of respondent’s engagement. but only with respect to such activity and while such activity exists. for various radio programs in the Cebu Broadcasting Station. Here. such as drama talents in other productions. nothing is there in the law which says that medical practitioners so engaged be actually hired as employees. For sure. FACTS: ABS-CBN employed respondents Nazareno. the elements of an employer-employee relationship are wanting in this case. Deiparine. including Sundays and holidays. We may add that the records are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees. No. 164156. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. Underpayment of Overtime Pay.R. Nazareno et al. It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary. filed a Complaint for Recognition of Regular Employment Status. Petitioner maintained that PAs. They were assigned at the news and public affairs. In fine. only requires the employer "to retain". Gerzon. They were made to perform the following tasks and duties: xxx xxx xxx and they were under the control and supervision of the Assistant Station Manager and the News Manager. As such program employees. complainant never bothered to ask the respondent to remit his SSS contributions. ISSUE: W/N respondents are talents. and Lerasan as production assistants (PAs). with a monthly compensation of P4. provides that the employer may engage the services of a physician and dentist "on retained basis". the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. As program employees.

much less the procedure of hiring the employee or the manner of paying the salary or the actual time spent at work. a circumstance negating independent contractual relationship. and in some cases the length of time of its performance and its continued existence. As regular employees. 4th.  Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible. and (2) the underlying economic realities of the activity or relationship (Economic Conditions). Although she was designated as Corporate Secretary. her salary was reduced by P2. Corp’s Contentions:  Francisco is not its employee since she performed her work at her own discretion without control and supervision of Kasei Corporation. when there is a demotion in rank or a diminution in pay. After a year. The persisting need for their services is sufficient evidence of the necessity and indispensability of such services to petitioner’s business or trade. 500 SCRA 690 [06] CONCEPT:  Employer-Employee Relationship Two-tiered Test: (1) the putative employer's power to control the employee with respect to the means and methods by which the work is to be accomplished (Control Test).00 a month until September. she was not entrusted with the corporate documents. necessary and indispensable to the usual trade or business of the employer. It is the character of the activities performed in relation to the particular trade or business taking into account all the circumstances. she did not report for work and filed an action for constructive dismissal before the labor arbiter. that they did not observe the required office hours. respondents became regular employees by operation of law. represent the company in all dealings with government agencies. unreasonable or unlikely. She was not paid her salary on the following month because she is no longer connected with the company. does not furnish an independent business or professional service. In the selection and engagement of respondents. NLRC. The degree of control and supervision exercised by petitioner over respondents through its supervisors negates the allegation that respondents are independent contractors. Thereafter. In proving the employer-employee relationship between petitioner and respondents: 1st. 2nd. 3rd. and was assigned to handle all the accounting needs of the company. no peculiar or unique skill. After a few years. and to administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei Corporation. insensibility or disdain by an employer becomes unbearable to an employee. such work is a regular employment of such employee and not an independent contractor. respondents are entitled to the benefits granted to all other regular employees of petitioner under the CBA. or when a clear discrimination. her consultancy may be terminated any time considering that her services were only temporary in nature and dependent on the needs of the corporation. neither did she attend any board meeting nor required to do so. What determines whether a certain employment is regular or otherwise is not the will or word of the employer.500. FACTS: Francisco was hired as Accountant and Corporate Secretary of Kasei Corp. it is undisputed that respondents had continuously performed the same activities for an average of five years. Petitioner had no daily time record and she came to the office any time she wanted. Petitioner could always discharge respondents should it find their work unsatisfactory. she was then designated as the Acting Manager – assigned to handle recruitment of all employees and perform management administration functions. It is of no moment that petitioner hired respondents as "talents. The principal test is whether or not the project employees were assigned to carry out a specific project or undertaking. and respondents are highly dependent on the petitioner for continued work. The so-called "talent fees" of respondents correspond to wages given as a result of an employer-employee relationship. Here. They are regular employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors. she was replaced by Fuentes as Manager. it can be a strong factor to determine whether the employee was hired for a specific undertaking or in fact tasked to perform functions which are vital. Since she was no longer paid her salary. the duration and scope of which were specified at the time the employees were engaged for that project. It is obvious that one year after they were employed by petitioner. Their assigned tasks are necessary or desirable in the usual business or trade of ABS-CBN.  Petitioner's designation as technical consultant depended solely upon the will of management.employer. 6|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . the management would ask her opinion on matters relating to her profession. and that they were permitted to join other productions during their free time are not conclusive of the nature of their employment. As such. Respondents cannot be considered "talents" because they are not actors or actresses or radio specialists or mere clerks or utility employees. The company never interfered with her work except that from time to time." The fact that respondents received pre-agreed "talent fees" instead of salaries. The presumption is that when the work done is an integral part of the regular business of the employer and when the worker. While length of time may not be a sole controlling test for project employment. 5. She was also designated as Liaison Officer to the City of Makati to secure permits and other licenses for the initial operation of the company. Francisco vs. Respondents did not have the power to bargain for huge talent fees. It follows then that respondents are entitled to the benefits provided for in the existing CBA between petitioner and its rank-and-file employees. relative to the employer. to which the worker oftentimes acquiesces. talent or celebrity status was required from them because they were merely hired through petitioner’s personnel department just like any ordinary employee.

2000. In addition to the standard of right-of-control. ISSUE: WON CMC is vicariously liable for the negligence of Dr. After examining. Dr. the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal. She reported for work regularly and served in various capacities as Accountant. RULING: Yes. December 19. While Corazon was on her last trimester of pregnancy. the better approach would be to adopt a two-tiered test involving: (1) the putative employer's power to control the employee with respect to the means and methods by which the work is to be accomplished (Control Test). and if in the affirmative. or its agent. 13th month pay. 1999 to December 18. is prejudicial to the employee and amounts to her constructive dismissal. owing to the complexity of such a relationship where several positions have been held by the worker. CMC pointed out that Dr. when there is a demotion in rank or a diminution in pay. can help in determining the existence of an employer-employee relationship. G. 6. Estrada solely liable for damages. Yes. the plaintiff must also prove that the hospital had knowledge of and acquiesced in them. vs. 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. executed and signed the “Consent on Admission and Agreement” and “Admission Agreement. ISSUES: 1. she and her spouse prompted to see Dr. and that no employer-employee relationship existed between the former and the latter. NLRC: affirmed LA. the existing economic conditions prevailing between the parties. and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent. Estrada. 7|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .R. A diminution of pay. 142625. with substantially the same job functions. Estrada was a consultant to be considered as an independent-contractor. was under the exclusive prenatal care of Dr. Liaison Officer. Estrada.” Corazon Nogales died after giving birth due to “hemorrhage. bonuses and allowances. (2) where the acts of the agent create the appearance of authority. that is. 2. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible. 2. Under the broader economic reality test. Thus. Estrada even if he is an independent contractor. Dr. Estrada noted an increase in her blood pressure and development of leg edema indicating preeclampsia.” Petitioners filed a complaint for damages with the RTC of Manila against CMC. post partum. she was illegally dismissed. which is a dangerous complication of pregnancy. CA: reversed NLRC. SSS records were also submitted showing that petitioner's latest employer was Seiji Corporation. courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. a plaintiff must show that: (1) the hospital. In this jurisdiction.. Yes. and (2) the underlying economic realities of the activity or relationship (Economic Conditions). like the inclusion of the employee in the payrolls. her husband. which happened when her salary was reduced to P2. CA (motion for reconsideration): denied. CA: affirmed the RTC’s ruling. insensibility or disdain by an employer becomes unbearable to an employee. However. WON there was an employer-employee relationship between petitioner and private respondent Kasei Corporation. Generally. in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties. there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura. In their defense. By applying the control test. consistent with ordinary care and prudence. who was pregnant. and the rest of CMC medical staff for her death. Capitol Medical Center et al. or when a clear discrimination. the corporation's Technical Consultant. receiving check vouchers indicating her salaries/wages. acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. there has been no uniform test to determine the existence of an employer-employee relation. When Nogales started to experience mild labor pains. rendering accounting and tax services to the company and performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite period of engagement. Estrada at his home. No. RULING: 1. FACTS: Corazon Nogales. LA: Francisco was illegally dismissed. Nogales et al. he advised her immediate admission to the Capitol Medical Center (“CMC”). WON petitioner was illegally dismissed. 2006 CONCEPT: For a hospital to be liable under the doctrine of apparent authority. benefits. Acting Manager and Corporate Secretary.500 per month. Upon admission at the CMC. RTC: Dr. as well as deductions and Social Security contributions from August 1.. Rogelio Nogales. Technical Consultant.  Petitioner was not among the employees reported to the BIR. unreasonable or unlikely.

Hence.. Prior to Corazon's admission and supposed hysterectomy. which began on January 1. the Spouses Nogales knew or should have known that Dr. It is sometimes characterized as an inquiry on whether the plaintiff acted in reliance upon the conduct of the hospital or its agent. CA: Granted respondent’s appeal. 7. 1993. employer’s lack of control over the means and methods by which the work is to be accomplished by the employee means there is no employee-employer relationship FACTS: Respondent Dr. respondent made another inquiry with the DOLE and SSS which both advised that respondent should be considered an employee of the company. to 4:00 p. 2007 CONCEPT: Four-fold test in determining employee-employer relationship. to 8:30 a. an exception to this principle – the "doctrine of apparent authority. Respondent filed a complaint with the NLRC seeking recognition as a regular employee of petitioner company and prayed for the payment of all benefits of a regular employee. the hospital need not make express representations to the patient that the treating physician is an employee of the hospital. 1988 to December 31. and recognized as valid the Retainer Agreement between the parties. Estrada as a member of its medical staff. Estrada’s relationship with CMC played a significant role in the spouses’ decision in accepting Dr. The last one expired on December 31. respondent shall be entitled only to such retainer fee as may be due him at the time of termination. The Retainer Agreement. February 15. Estrada was an employee or agent of CMC. But as early as September 1992.R. respondent was already making inquiries about his status with the petitioner company. a hospital can be held vicariously liable for the negligent acts of a physician providing care at the hospital. Inc. including 13th Month Pay. Despite the non-renewal of the Retainer Agreement. CMC clothed Dr. respondent agrees to perform the duties and obligations in the Comprehensive Medical Plan. readily accommodated Corazon and updated Dr. Upon his request for Corazon's admission. Service Incentive Leave Pay. 8|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . It extended its medical staff and facilities to him. Dr. the contents of which reinforced Rogelio's belief that Dr. Estrada was a member of CMC's medical staff. as earlier stated. No. Dean N. Second case likewise dismissed in view of the previous finding of Labor Arbiter that respondent is not an employee of Coca-Cola Bottlers Phils. The second factor focuses on the patient's reliance. Petitioner company. Estrada of her condition. vs." Under this doctrine. that the physician is an independent contractor. and Christmas Bonus. RULING: No. and in case of its termination. or should have known. compensation is fixed at P3. ISSUE: Whether or not employer-employee relationship exists between the parties. treatment. In other words. which prompted him to file an illegal dismissal case with the NLRC. Thereafter. respondent shall observe clinic hours at the company’s premises from Monday to Saturday of a minimum of two (2) hours each day or a maximum of two (2) hours each day or treatment from 7:30 a. Holiday Pay.00 per month. Coca-Cola Bottlers Phils. however. CMC made Rogelio sign consent forms printed on CMC letterhead. which is the CMC. In this regard. The management refused to do so. the plaintiff must also prove that the hospital had knowledge of and acquiesced in them. by virtue of a Retainer Agreement which states that: the agreement is only for a period of 1 year beginning January 1. Estrada’s connection with a reputable hospital. CMC asked Rogelio to sign release forms. Climaco is a medical doctor who was hired by petitioner Coca Cola Bottlers Phils. rather a representation may be general and implied. The first factor focuses on the hospital's manifestations and is sometimes described as an inquiry whether the hospital acted in a manner which would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. CMC’s defense that all it did was “to extend to Corazon its facilities” is untenable.In general. Moreover. LABOR ARBITER: First case dismissed. Estrada’s services as the ob-gyne for Corazon’s delivery. and 3:00 p. Petitioner company lacked the power of control over respondent’s performance of his duties. through its personnel. In this case. Rogelio testified that he and his wife specifically chose Dr. First. did not take action. He first submitted a letter to the Philippine College of Occupational Medicine which replied that respondent should be considered as a regular part-time physician and must receive all benefits of an employee under the Labor Code. are in the business of treatment.m. consistent with ordinary care and prudence. Employer-employee relationship existed between the parties. Estrada. (2) where the acts of the agent create the appearance of authority.. he received the letter from the company concluding their retainership agreement. a plaintiff must show that: (1) the hospital.m. consistent with ordinary care and prudence. Cost of Living Allowance.. Dr.800. Inc. respondent continued to perform his functions as company doctor to Coca-Cola until he received a letter dated March 9. The Court cannot close its eyes to the reality that hospitals. G. For a hospital to be liable under the said doctrine.m. and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent. CMC granted staff privileges to Dr. however. Estrada to handle Corazon’s delivery because of Dr. 1988 (although can be renewed annually). such as CMC. Estrada was not an employee of CMC. or its agent. While the case was pending.m. There is. 1995 from petitioner company concluding their retainership agreement effective 30 days from receipt thereof. CMC. In the instant case. unless the patient knows. or consultation.. and that no employee-employer relationship shall exist between the parties whilst this contract is in effect. CMC impliedly held out Dr. respondent inquired from the management of petitioner company whether it was agreeable to recognizing him as a regular employee. 1988. Second. Climaco. 146881. was renewed annually. respondent is directly responsible to the employee concerned for any injury on the employee during the course of his examination. regardless of whether the physician is an independent contractor. acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital. a hospital is not liable for the negligence of an independent contractor-physician. Estrada with apparent authority thereby leading the Spouses Nogales to believe that Dr." The doctrine of apparent authority essentially involves two factors to determine the liability of an independent-contractor physician. and that he shall be on call at all times during the other workshifts to attend to emergency case/s. NLRC: Dismissed respondent’s appeal for lack of merit. there is no showing that before and during Corazon’s confinement at CMC. if such injury was committed through professional negligence or incompetence or due to the other valid causes for action. Through CMC's acts.

private respondents maintained specfic work-schedules. the operating room. Desipeda did not give Merceditha. which contains the respondent’s objectives. and the classification as "salary" of their remuneration. That conversation was reported to Dr. LABOR ARBITER: Dismissed the spouses’ complaints for want of jurisdiction upon a finding that there was no employer-employee relationship between the parties. complainant maintains his own private clinic attending to his private practice in the city. The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no employer- employee relationship exists between the parties. Desipeda who was then the Medical Director of the hospital. but are necessary incidents to the Retainership Agreement. the payslips and BIR W-2 (now 2316) Forms which reflect their status as employees. (3) the power of dismissal. which is in accordance with the provisions of the Agreement. That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room. duties and obligations. no operations can be undertaken in those areas. employees of [petitioner] company. where he services his patients. the identification cards it issued them. Such is not the prevailing situation here. Court finds that the schedule of work and the requirement to be on call for emergency cases do not amount to such control. how to immunize. charge nurses and orderlies. Calamba Medical Center vs.R. it is not essential for the employer to actually supervise the performance of duties of the employee. More importantly. the fourth requisite or the "control test" in the determination of an employment bond being absent. The Court also notes that the Retainership Agreement granted to both parties the power to terminate their relationship upon giving a 30-day notice.. who was not involved in the said incident. Without the approval or consent of petitioner or its medical director. She was just later informed by the Human Resource Department (HRD) officer that that was part of petitioner's cost cutting measures. NLRC et al. NLRC and CA: Reversed. any work schedule. (2) the payment of wages. 8.Four-fold test: (1) the selection and engagement of the employee. it being enough that it has the right to wield the power. incompetence or other valid causes of action. 25. but did not control the means and methods by which respondent performed his assigned tasks. or the so-called “control test. DOLE issued a return-to-work Order to the striking union ofcers and employees of petitioner pending resolution of the labor dispute. In fact. The Labor Arbiter reasoned that the Comprehensive Medical Plan. Desipeda eventually fired Ronaldo for his failure to report back to work despite the DOLE Order and his alleged participation in the strike. They are given a retainer’s fee by the hospital as well as shares from fees obtained from patients. namely. when Ronaldo was suspended. in each case. RULING: Yes. Ronaldo amended his complaint to Illegal Dismissal. Considering that there is no employer-employee relationship between the parties. FACTS: Ronaldo Lanzanas and Merceditha Lanzanas are doctors employed by Calamba Medical Center. In the same month.” Petitioner company. which is not allowed under the Labor Code for he is a managerial employee. this is subject to a special billing. harm or damage caused through professional negligence. an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. 176484. Ronaldo filed a case for Illegal Suspension in March 1998. Moreover. it enrolled respondents in the SSS and Medicare (Philhealth) program. Merceditha filed for Illegal Dismissal in the NLRC. In the present case. It 9|Page Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . One time. and (4) the power to control the employee’s conduct. G. The Labor Arbiter and the NLRC correctly found that petitioner company lacked the power of control over the performance by respondent of his duties. Inc. does not tell respondent “how to conduct his physical examination. Dr. petitioner itself provided incontrovertible proof of the employment status of respondents. bills them accordingly — and if it is an employee of respondent company who is attended to by him for special treatment that needs hospitalization or operation. an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. ISSUE: Whether or not there exists an employee-employer relationship between petitioner and private respondents. Nov. as determined by petitioner through its medical director. does not constitute illegal dismissal of respondent. or any department or ward for that matter. under the control test. On the other hand. which consisted of 24-hour shifts totaling forty-eight hours each week and which were strictly to be observed under pain of administrative sanctions.” considered to be the most important element. respondents' work is monitored through its nursing supervisors. No. through the Comprehensive Medical Plan. Desipeda. Trinidad talking to another doctor about how low the admission rate to the hospital is. Hence. An employee is required to stay in the employer’s workplace or proximately close thereto that he cannot utilize his time effectively and gainfully for his own purpose. Ronaldo was overheard by Dr. or how to diagnose and treat his patients. 2008 CONCEPT: Four-fold test in determining employee-employer relationship. Because the company lacks the power of control that the contract provides that respondent shall be directly responsible to the employee concerned and their dependents for any injury. For control test to apply. petitioner company did not wield the sole power of dismissal or termination. Eventually Ronaldo was suspended. Respondent is not at all further required to just sit around in the premises and wait for an emergency to occur so as to enable him from using such hours for his own benefit and advantage. the rank and file employees organized a strike against the hospital for unfair labor practices. the termination of the Retainership Agreement. provided guidelines merely to ensure that the end result was achieved. Under the control test.

hence. an employer-employee relationship exists between the resident physicians and the training hospitals. (Phils). even without being hired as an employee. "Clinic Policies and Employee Manual" claimed to have been prepared by respondent doctor exists. he was presumed to be speaking for himself [and] for his wife Merceditha. 2011. Lanzanas] declared that he was going to boycott the scheduling of their workload by the medical doctor. the Court rules that there was Illegal Dismissal for both spouses. which is contrary to the rules on sub-contracting.. The labor arbiter declared petitioners to be regular employees of Shangri-la and ordered the latter to grant them the wages and benefits due to them as regular employees. FACTS: Petitioners Escasinas and Singco are registered nurses. Lanzanas] has given rise to the presumption that her sympath[y] [is] with her husband. (2) power of dismissal. non-payment of holiday pay. pay their SSS premium as well as their wages if they were not indeed her employees. [and that when [Dr. RULING: No. and (4) the power to control the worker's conduct. No.R. it is not petitioners’ employer. En Banc. In fact. Shangri-la claimed however that petitioners were not its employees but of respondent doctor. but they are the employees of respondent doctor. et al. lacking as she does in substantial capital and that the clinic is being run by the Shangri-la. 2009 CONCEPT: To establish an employer-employee relationship. 1998 was the first and only time that he was apprised of the reason for his dismissal. This set-up is precisely true in the case of an independent contractorship as well as in an agency agreement. 10.employee relationship is established by the presence of the following determinants: (1) the selection and engagement of the workers. the maintenance of a clinic and provision of medical services to its employees is required under the Labor Code. assigned at the emergency rooms and ward sections. however the court ruled against their favor. January 25. Inc. the various office directives issued by Shangri-la’s officers do not imply that it is Shangri-la’s management and not respondent doctor who exercises control over them or that Shangri-la has control over how the doctor and the nurses perform their work. Merceditha. It is unlikely that respondent doctor would report petitioners as workers. Lanzanas on April 25. His was a "termination upon receipt" situation. March 4. Escasinas et al. It would be preposterous for an employer to report certain persons as employees and pay their SSS premiums as well as their wages if they are not its employees. he was not with respect to his supposed participation in the strike and failure to heed the return-to-work order. as Shangri-la does not control how the work should be performed by petitioners. While he was priorly made to explain on his telephone conversation with Miscala. As for the case of Dr. They were considered non-training general practitioners. vs. it having been effected without any just or authorized cause and without observance of due process. Contrary to the petitioner’s argument. her dismissal was worse. Further. Existence of an employer. With respect to the supervision and control of the nurses and clinic staff. He was not afforded even the slightest opportunity to explain his side. 167622. Petitioners filed with the NLRC a complaint for regularization. which are not directly related to Shangri-la’s principal business – operation of hotels and restaurants. In respondents' case. Tongko vs. (3) the payment of wages by whatever means. under Section 15. they were not undergoing any specialization training. In addition. and the training program is duly accredited or approved by the appropriate government agency. 178827. In fine. Besides. see June 29. Petitioners insist that under the Labor Code. the Labor Code does not require the engagement of full-time nurses as regular employees of a company. No. That Shangri-la provides the clinic premises and medical supplies for use of its employees and guests does not necessarily prove that respondent doctor lacks substantial capital and investment. At the very least." 9. They were engaged by respondent doctor Pepito in her clinic at respondent Shangri-la of which she was a retained physician. Rule X of Book III of the Implementing Rules of the Labor Code. That respondent doctor is a labor-only contractor for she has no license or business permit and no business name registration.. it ruled in favor of the respondents and dismissed the petitioner’s complaint for finding that no employer-employee relationship exists between petitioners and Shangri-la. petitioner never proffered any valid cause for her dismissal except its view that "her marriage to [Dr. Any agreement may provide that one party shall render services for and in behalf of another. their engagement should be deemed as regular employment. governs how they perform their respective tasks and responsibilities. hence this petition. they added that respondent doctor cannot be a legitimate independent contractor. Manufacturer Life Insurance Co. Motion for reconsideration was filed but denied. it is not disputed that a document. G. Shangri-las Mactan Island Resort et al.bears noting at this juncture that mandatory coverage under the SSS Law is premised on the existence of an employer-employee relationship. unless there is a training agreement between them. night shift differentail and 13th month pay against respondent. underpayment of wages. The Court holds that respondent doctor is a legitimate independent contractor. It further ruled that respondent doctor was only Shangri-la’s in-house physician. The termination notice sent to and received by Dr. ISSUE: WON petitioners are employees of Shangri-la. and not the employee manual being followed by Shangri-la’s regular workers. Upon appeal to the NLRC. Finally. no matter how necessary for the latter’s business. 2010 Main Decision 10 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 ..Contrary to petitioners’ contention. to which petitioners gave their conformity and in which they acknowledged their co-terminus employment status. Shangri-la is required to hire a full-time registered nurse. there must be a showing that the employer has the power to control the worker’s conduct.R.. It is thus presumed that said document. also and employee. Petition is denied. hence. Shangri-la is only mandated to furnish its employees with services of a full-time registered nurse but not necessarily to hire or employ. Petitioners brought the case to the CA. with the latter assuming primacy in the overall consideration. claiming that they are regular employees of Shangri-la. G.

on the delivery of insurance policies. evidence shows that Tongko’s role as an insurance agent never changed during his relationship with Manulife.CONCEPT: In an agency relationship. they must have the nature of dictating the means or methods to be employed in attaining the result. He also distributes the winnings after he deducts the “arriba”. The hallmarks of an employer-employee relationship in the management system established are: exclusivity of service. he became a Branch Manager and subsequently became a Regional Sales Manager. The law likewise obligates the agent to render an account. or the commission of the cockpit. these control measures cannot be read as indicative of labor law control. an employer-employee relationship exist. Petitioners Marticio Semblante and Dubrick Pilar assert that they were hired by respondents-spouses Vicente and Maria Luisa Loot.. For this reason. Petitioners perform their duties through their expertise and knowledge free from direction and control of respondents. not as an employee. 11. of the CA. an important lesson that the first Insular Life case teaches us is that a commitment to abide by the rules and regulations of an insurance company does not ipso facto make the insurance agent an employee. As an agent. From this perspective. should not merely relate to the mutually desirable result intended by the contractual relationship.. Hence. There was an existence of employer-employee relationship. particularly on the matter of expenses and reimbursements. The Insurance Code imposes obligations on both the insurance company and its agents in the performance of their respective obligations under the Code. this Tongko still failed to align his directions with Management’s avowed agency growth policy. 2011 TOPIC: Existence of employer-employee relationship and application of four-fold test. the provisions of the Insurance Code cannot be disregarded as this Code expressly envisions a principal-agent relationship between the insurance company and the insurance agent in the sale of insurance to the public. Neither do guidelines somehow restrictive of the insurance agent’s conduct necessarily indicate "control" as this term is defined in jurisprudence. Tongko essentially remained an agent. No. Tongko lacks the evidence on record showing that Manulife ever exercised means-and-manner control. G. 2006 Resolution of the NLRC. the principal is allowed to have an element of control over his agent without intruding to the labor law concept of control for purpose of employment. as the official masiador and sentenciador. The sentenciador Pilar oversees the proper 11 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . NLRC: In favor of Tongko. but moved up in this role through Manulife’s recognition that he could use other agents approved by Manulife. The general law on agency. The second phase was when Tongko was named Unit Manager. To these extents. The masiador Semblante calls and takes the bets from the gamecock owners and bettors and orders the start of the fight. his tasks were to canvass for applications for insurance products and collect money due to the company. ISSUE: WON there was an employer-employee relationship. LABOR ARBITER: Ruled in favor of Manulife. Later on. 2010. over Tongko during his ascent in Manulife’s sales ladder. It was found out Tongko’s region was the lowest performer in terms of recruiting. but operating under his guidance and in whose commissions he had a share. FACTS: This is a petitioner for certiorari under Rule 45 assailing and seeking to set aside the decision and resolution dated May 29. Petitioners not employees of respondents. RULING: NONE. on the other hand. we can take judicial notice that as a matter of Insurance Code-based business practice. August 15. control of assignments and removal of agents under the private respondent’s unit. The contractual relationship between Tongko and Manulife had two basic phases. which is a cockpit. Tongko then filed an illegal dismissal complaint alleging that he was an employee of Manulife. Significantly. on the representations to be made to potential customers. et al. or of fixing the methodology and of binding or restricting the party hired to the use of these means. 196426. The first phase under a Career Agent’s Agreement provided that it is understood and agreed that the Agent is an independent contractor and nothing contained therein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. the owners of Gallera de Mandaue. particularly on licenses and their renewals. FACTS: Tongko was initially an insurance agent of Manulife who was promotedto the role of a manager. control can be imposed through rules and regulations without intruding into the labor law concept of control for purposes of employment. the principal may impose on the agent specific instructions on how an account shall be made. and on measures to ensure ethical business practice in the industry. in this sense. Foremost among these are the directives that the principal may impose on the agent to achieve the assigned tasks. In this sense. By the Agreement’s express terms. he was terminated. of the cockpit sometime in 1993. respectively. From jurisprudence. CA affirmed the October 18.R. All these are obviously absent in the present case. Manulife instituted manpower development programs at the regional sales management levelT where he first step was to transfor Manulife into a big league player and to increase the number of agents to at least 1. CA: Upheld the decision of Labor Arbiter. on the matter of compensation. He received several letters with respect to this concern. to the extent that they do not involve the means and manner of undertaking these tasks. Guidelines indicative of labor law "control. and furnishing of company facilities and materials as well as capital described as Unit Development Fund." as the first Insular Life case tells us. If changes occurred at all. Court of Appeals. the changes did not appear to be in the nature of their core relationship. an agency relationship prevails in the insurance industry for the purpose of selling insurance. respectively. Semblante et al. vs.000 strong for a start. even to a limited extent. However. expressly allows the principal an element of control over the agent in a manner consistent with an agency relationship. thus. the collection of premiums. 2009 and Feb 23. Tongko served as an "insurance agent" for Manulife.

Petitioners are akin to independent contractors who possess unique skills and talents to distinguish them from ordinary employees. As a general rule. NLRC held that there was no Employer-Employee relationship. On March 1. Elements of the four-fold test are: (1) the selection and engagement of the employee. he was no longer made to sign a contract. On the other hand. respondent Martinez issued a memorandum to Guevarra expressing dissatisfaction over his questioning on the assignment of referees officiating out-of-town games. He felt that the dismissal was caused by his refusal to fix a game upon order of Ernie De Leon. They alleged that they have never violated any rules of the cockpit. legally or illegally.500 a week or P14. The first contract was for the period January 1. September 14. Respondents claimed that petitioners don’t have regular working hours and are free to decide if they report for work or not. albeit belated. As found both by the NLRC and the CA. Basketball Association et al. the Court held that the procedural aspect should not defeat the substantive rights of respondents to be free from unwarranted burden of answering for an illegal dismissal for which they were never responsible. Respondents denied that petitioners were their employees and alleged that they were associates of respondents’ independent contractors Tomas Vega. Beginning 2002. complainant Guevarra alleges that he was invited to join the PBA pool of referees in February 2001. For their services as masiador and sentenciador.000 per month. 2001. 192084. On January 15. No. or until the early hours of the morning depending on the needs of the cockpit. Wednesday. Phil. and were informed of their termination effective on that date. NLRC: Affirmed Labor Arbiter’s judgement. Lastly. What is important is that there is control over the means and methods by which the hired party must perform his duty. moral. The ID cards were only given to them to indicate that they were free from normal entrance fee. excluding monthly derbies and cockfights held on special holidays. 25 2005. LABOR ARBITER & NLRC: Declared petitioner an employee whose dismissal was illegal. 2011 TOPIC: Distinction between independent contractor and employee. since respondents were without power or prerogative to do so. and not by the petitioners. Respondents aver. for instance. NLRC reversed its resolution on the postulate that their appeal was meritorious and the filing of an appeal bond. ISSUE: WON there is an employer-employee relationship HELD: NO. was not made to sign a contract during the first conference of the All-Filipino Cup which was from February 23. 14 2004. Labor Arbiter Julie Rendoque found petitioners to be regular employees of respondents as they performed work that was necessary and indispensable to the business of respondents. respondents had no part in petitioners’ selection and management. During the term of Commissioner Eala. NLRC denied appeal for non-perfection. This prompted the petitioners to file a complaint for illegal dismissal. Court of Appeals: Overturned decision of labor arbiter and NLRC. 12. that complainants entered into two contracts of retainer with the PBA in the year 2003. (3) power of dismissal. FACTS: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees.gaffing of fighting cocks. and (4) power to control employee’s conduct. As to the procedural aspect of none posting of appeal bond. LABOR ARBITER: June 16. determines the physical condition of the cocks and the capabilities to continue the fight and declares result. petitioners were denied entry to the cockpit upon instruction of respondents. which is the most important element. 2003. however. On May 6. factual issues 12 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 2004. Ordered the reinstatement and payment of backwages. It was only during the second conference when he was made to sign a one-and-a-half-month contract for the period July 1 to August 5. After the lapse of the latter period. while Pilar gets P3.. Semblante receives P2. 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. dated Aug. 2003. Hence. the petitioners performed their functions masiador and sentenciador free from the direction and control of respondents. They work every Tuesday. However. Petitioners had both been issued employees’ ID cards that they wear when they work. he signed a yearly contract as Regular Class C referee. It was only on October 11 2004 that they filed the appeal bond. Petitioners relied mainly on their “expertise that is characteristic of the cockfight gambling”. Beginning February 2004. Respondents not being petitioners’ employers. he filed the appeal with the NLRC on Sept 24 2004 BUT without posting a cash or surety bond equivalent to the monetary award.000 per month. Their working days start at 1pm until 12 midnight.R. they were made to sign contracts on a year-to-year basis. could never have dismissed. Relationship of employer-employee fails to pass four-fold test of employment. 2003 to June 2003.000 per week or a total of P8. G. 2003. in a motion for recon. Their compensation was also paid out of the arriba. ISSUE: WON petitioner is an employee of respondents HELD: NO. During the leadership of Commissioner Emilio Bernardino. Saturday. changes were made on the terms of their employment. It was a total shock for Bernarte who was awarded Referee of the year in 2003. She also ruled that they were illegally dismissed therefore entitled to backwages and separation pay. 2003 to July 15. in a resolution. and Sunday every week. on the other hand. petitioners. and exemplary damages and attorney’s fees. NLRC: Respondents counsel received the decision on Sept. he signed a contract as trainee. November 14 2003. Complainant Bernarte. is a substantial compliance with the rules. (2) payment of wages. PBA decided not to renew their contracts. 2004. CA: Decided in favor of respondents. Respondents did not exercise any form of control over the means and methods by which petitioner performed his work as a basketball referee. and the second was for September 1 to December 2003. Repeated hiring does not prove EE relationship. Within the 10-day appeal period. which is a percentage deducted from the bets. The existence of an employer-employee relationship is ultimately a question of fact. Bernarte vs.

equipment and recording studio and that they would share the net profits of the album sales. Facts: Respondent Genovia was hired as studio manager by petitioner Lirio. 13. except on the result thereof. i. the referees exercise their own independent judgment. Lirio insists that Genovia could not have been hired as a studio manager. The very nature of petitioner's job of officiating a professional basketball game undoubtedly calls for freedom of control by respondents. In addition. Moreover. [Note: no particular form of evidence is required to prove the existence of an employer-employee relationship. However. 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. absolute. based on the rules of the game. whether for unsatisfactory services. as in the present case. and the carrier single Genovia composed and arranged was finally aired. CA – set aside the ruling of NLRC. owner of Celkor Ad Sonicmix Recording Studio.000." was applied here. Any competent and relevant 13 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Under the said agreement. Lirio vs. and (2) he had no control over the time and manner by which respondent Genovia composed or arranged the songs. G.000. and copies of petty cash vouchers showing the amounts he received and signed for in the payrolls. Celine Mei.00 for services rendered as a studio technician as well as moral and exemplary damages. property or industry to a common fund with the intention of dividing the profits among themselves. case law has consistently applied the four-fold test. Respondent Genovia was able to prove the four elements of employee-employer relationship through documentary evidence. Lirio then verbally dismissed Genovia from work. but he was denied his compensation by Lirio despite several demands. one of which is where there are conflicting findings of fact between the Court of Appeals. His work was from Monday to Friday..00 a month. the same merely results in the non-renewal of the contract. such as in the present case. to wit: (a) the selection and engagement of the employee. or for whatever other reason. Ruling: Yes. but also as to the means and methods to accomplish it. or. and that he be awarded unpaid commission in the amount of P2. and (2) the only deductions from the fees received by the referees are withholding taxes. as to when and how a call or decision is to be made. (c) the power of dismissal. the hiring party must have control over the means and methods by which the hired party is to perform his work. that he be paid separation pay. The so-called "control test" is the most important indicator of the presence or absence of an employer-employee relationship. No. NLRC – reversed the ruling of the LA for failure of respondent to prove with substantial evidence the four elements to determine employee-employer relationship. on the other.r. Lirio asked Genovia to compose and arrange songs for Celine and promised that he would draft a contract to assure respondent of his compensation for such services. 169757. and they officiate games at an average of two hours per game.00 per hour as recording technician. 2011 Topic: The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee. To determine the existence of an employer-employee relationship. The doctrine that "if doubt exists between the evidence presented by the employer and the employee. which is three times a week spread over an average of only 105 playing days a year.000 and an additional commission of P100. Genovia filed a complaint for illegal dismissal and prayed for his reinstatement without loss of seniority rights.e. For a hired party to be considered an employee. The referees decide whether an infraction was committed. 9am-6pm. Genovia shall be entitled to draw advances of P7. Conversely. The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between PBA and petitioner. and highlights the satisfactory services rendered by petitioner warranting such contract renewal. backwages and overtime pay. which shall be deductible from his share of the net profits and only until such time that the album has been produced [this was his explanation for the alleged “salary” that Genovia received from him]. Labor Arbiter – there was an employee-employer relationship and Genovia was illegally dismissed. Accordingly. and the PBA cannot overrule them once the decision is made on the playing court. The referees are the only. He was to receive a monthly salary of P7. The album was completed. Additionally. and (d) the employer's power to control the employee's conduct. (b) the payment of wages. or violation of the terms and conditions of the contract. The non-renewal of the contract between the parties does not constitute illegal dismissal of petitioner by respondents.are beyond the province of this Court. November 23. the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the former. he was able to provide a document denominated as "payroll" certified correct by petitioner which showed that respondent received a monthly salary of P7. if PBA decides to discontinue petitioner's services at the end of the term fixed in the contract. on one hand. As a defense. the following circumstances indicate that petitioner is an independent contractor: (1) the referees are required to report for work only when PBA games are scheduled. petitioner Lirio claims that their relationship was an informal partnership under Article 1767 of the Civil Code because (1) they agreed to contribute money. and (d) the employer's power to control the employee on the means and methods by which the work is accomplished. which is absent in this case. The most important element is the employer's control of the employee's conduct. this rule admits of exceptions. to manage and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other prospective clients. there is employee-employer relationship. Lirio was to provide all the financing. Issue: WON there is employee-employer relationship between petitioner and respondent. a former talent of ABS-CBN Star Records. the scales of justice must be tilted in favor of the latter. (c) the power of dismissal. (b) the payment of wages. Later. and final authority on the playing court. not only as to the result of the work to be done. in the alternative. Lirio approached Genovia to produce an album for his daughter. and the NLRC and Labor Arbiter. We agree with respondents that once in the playing court.000 with the corresponding deductions due to absences incurred by respondent. Genovia. since the recording studio has no personnel except petitioner and that Genovia verbally agreed with petitioner to co-produce the album.

however. Lirio certainly had the power to check on the progress and work of respondent as stated in his Position Paper and that it was agreed that he would help and teach respondent how to use the studio equipment. BCC Products Sales Inc. Issues: WON there is employer-employee relationship? Ruling: No. I am a CPA (Certified Public Accountant) by profession but presently associated with. Petitioner counters. is the most important element. Inc. or after his employment with respondents had been terminated on December 12. barred him from entering the premises of BCC where he then worked. On the other hand. acting upon the instruction of Ty. non-payment of wages.000. 2. He alleged that on October 19. It can also be deduced from the March 1996 affidavit of petitioner that BCC challenged his authority to deliver some 158 checks to SFC. it should be clear that respondents did not exercise the power of control over him. that their issuance of the ID to petitioner was only for the purpose of facilitating his entry into the BCC premises in relation to his work of overseeing the financial operations of BCC for SFC. G. who was a highly educated professional. to wit: (a) the selection and engagement of the employee. Considering that he contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC. 2012 Concept: Application of the Four-Fold Test with regards to an employee hired as a Talent and Whether Talent Fees can be considered as a wage under the definition of the Labor Code.evidence to prove the relationship may be admitted. and that the affidavit referred to his subsequent employment by SFC following the termination of his employment by BCC. The last element.R. for instance. or employment by. The Court looked for the four elements of employment in this case and found it wanting. the major creditor and supplier of BCC. as follows: 1. 1995 for illegal dismissal. that petitioner executed an affidavit in March 1996. to not secure a written document of the terms of his employment with BCC [Note: he was not able to present any employment contract before any of the tribunals]. and that he filed a complaint dated December 28. operated or run by one Terrance L. 1995 were frustrated because he continued to be barred from entering the premises of BCC. Ty. July 18. reinstatement with full backwages. No. the Court has consistently looked for the following incidents. Topic: In determining the presence or absence of an employer-employee relationship. The Court likewise noted of the confusion about the date of his alleged illegal dismissal which provides another indicium of the insincerity of petitioner’s assertion of employment by BCC. (c) the power of dismissal. It is not essential for the employer to actually supervise the performance of duties of the employee. the security guards of BCC. Petitioner’s name also did not appear in the payroll of BCC despite him having approved the payroll as comptroller. among others. 1995. that his attempts to report to work in November and December 12. For one. employed him as comptroller starting from September 1995 with a monthly salary of P20. the so-called control test. (President and General manager). 163700.R. filed an action for illegal dismissal against petitioner. Sobien Food Corporation (SFC. Jao vs. and that SFC had posted him as its comptroller in BCC to oversee BCC’s finances and business operations and to look after SFC’s interests or investments in BCC. and its President. or employed by. 153511. Respondents countered that petitioner was not their employee but the employee of Sobien Food Corporation (SFC). Inc. to handle the financial aspect of BCC’s business. 15. there is no employer-employee relationship. In the course of my association with. respondent Terrance Ty..00. The power of control refers merely to the existence of the power. as it is sufficient that the former has a right to wield the power. because he thereby acted for the benefit and in the interest of SFC more than of BCC. 14. Legend Hotel (Manila) vs. April 18. Facts: Petitioner Jao maintained that respondent BCC Product Sales. 1995.] Petitioner Lirio wielded the power to dismiss as respondent stated that he was verbally dismissed by petitioner. CA – reversed NLRC’s decision. LA – dismissed petitioner's complaint for want of an employer-employee relationship between the parties. I have been entrusted by my employer to oversee and supervise collections on account of receivables due SFC from its customers or clients.. and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. thereafter. stating. (b) the payment of wages. Realuyo G. damages and attorney’s fees. No. NLRC – reversed the LA’s decision. for short). Sobien Food Corporation with the same business address as abovestated. the Court found it unusual for the petitioner. 14 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . petitioner failed to prove that his relationship with respondent was one of partnership since such relationship was not supported by any written agreement. that the affidavit did not establish the absence of an employer-employee relationship between him and respondents because it had been executed in March 1996. that the ID should not be considered as evidence of petitioner’s employment in BCC. No employer-employee relationship existed between petitioner BCC and the private respondent. certain checks due and turned over by one of SFC’s customers is BCC Product Sales. and respondent.

He was subjected to the rules on employees' representation check and chits. or wear barong tagalog to conform with Filipiniana motif of the place and the time of his performance is fixed by the respondents from 7:00 pm to 10:00 pm. The law affords protection to an employee. whose terms are not restricted to those fixed in the written contract. Court of Appeals: Reversed the NLRC. however. . ||| Clearly. he was notified by the management of the Hotel of their cost-cutting met hod as his services as a pianist would no longer be needed. three to six times a week. piece. The restaurant's manager required him at certain times to perform only Tagalog songs or music.. 2. respondent received compensation for the services he rendered as a pianist in petitioner's hotel.|. One of the arguments raised by the Petitioner Hotel was that there was no employer-employee relationship. Petitioner cannot use the service contract to rid itself of the consequences of its employment of respondent. . The inequality that characterizes employer-employee relations generally tips the scales in favor of the employer. The New Philippine Skylanders. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. Ruling: YES. There is no denying that the remuneration denominated as talent fees was fixed on the basis of his talent and skill and the quality of the music he played during the hours of performance each night. 199547. howsoever designated by petitioner. or for services rendered or to be rendered.00 upon restaurant manager Velazco's recommendation. 24. regardless of how petitioner chose to designate the remuneration. he was supervised and controlled by respondent's restaurant manager who at certain times would require him to perform only tagalog songs or music. petitioner's control of both the end achieved and the manner and means used to achieve that end was demonstrated by the following. are also considered. Issue Number 1: Whether or not Employer-Employee relationship existed between the parties Ruling: YES. STECD Issue Number 3: Whether or Not Legend Hotel exercised the power to control. a privilege granted to other employees. No. and d. Issue Number 2: Whether or not Talent Fees are considered as wages under the Labor Code. for it sufficed that the employer has the right to wield that power 16. IDEScC b. was still considered as included in the term wage in the sense and context of the Labor Code. or to wear barong Tagalog to conform to the Filipiniana motif. Sept. It is the law that defines and governs an employment relationship. Anent this. vs. Realuyo. lodging. three to six times a week. Labor Arbiter and NLRC: Denied the complaint because of the absence of an Employer-Employee relationship. Dakila. capable of being expressed in terms of money. task. However. 1. He was given an intial rate at 400 pesos a night and was later increased to 750 a night. were his wages. that respondent performed his work as a pianist under petitioner's supervision and control. In May 1997. which petitioners had fixed from 7:00 pm to 10:00 pm. There is no denying that whatever amounts he received for his performance. G. 1.00 per three hours of performance from 7:00 pm to 10:00 pm. Article 97 (f) of the Labor Code clearly states: . 2. c. Reasoned that the Power of Control is the most decisive which is present in the case at bar: In this regard. Such rate of remuneration was later increased to P750.) Power of Selection. Any stipulation in writing can be ignored when the employer utilizes the stipulation to deprive the employee of his security of tenure.) Respondent's remuneration.) Petitioner could not seek refuge behind the service contract entered into with respondent. He could not choose the place of his performance. and does not countenance any attempt to subvert its spirit and intent. and includes the fair and reasonable value.Facts: Respondent in the name of Hernani S. He could not choose the time of his performance. public respondent failed to take into consideration that in petitioner's line of work. whether fixed or ascertained on a time. to wit: a. albeit denominated as talent fees. 2012 Concept: To determine if there was an Illegal Dismissal is premised on the existence of an employer-employee relationship. or other facilities customarily furnished by the employer to the employee. Ruling: YES. His time of performance was from 7:00 pm to 10:00pm for 3 to 6 times a week. Facts: Respondent Dakila was employed by petitioner corporation as early as 1987 and terminated for cause in April 1997 when the corporation was sold. as determined by the Secretary of Labor. it is worth remembering that the employer need not actually supervise the performance of duties by the employee. for other factors. like the nature of the work the employee has been called upon to perform. however designated. wage paid to any employee shall mean the remuneration or earnings. insisting that he had only a talent engaged to provide live music for three hours/ a day on two days each week. or other method of calculating the same.) Respondent was paid P400. taking into account the prevailing rate for similar talents in the entertainment industry. A review of the records shows. Inc. Relevantly. or commission basis. Petitioner could not choose the time of his performance. Specifically. evidenced by the express written recommendation for the increase of his remuneration.r. such that the employee is often scarcely provided real and better options. of board. he was rehired as consultant by the petitioners under a Contract for Consultancy Services dated 15 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . three to six nights a week. also known by his stage name as Joey Roa worked as a pianist at the Legend Hotel’s Tanglaw Restaurant.

petitioners began to default on their obligation to submit periodic liquidation of their operational expenses. respondent Dakila filed a complaint for constructive illegal dismissal.. collectively called “Bandag”. In support of his claim. et al.April 30. beyond the ambit of a petition for review on certiorari under Rule 45 of the Rules of Court unless there is a clear showing of palpable error or arbitrary disregard of evidence which does not obtain in this case. Records reveal that both the LA and the NLRC. that the consultancy contract was a scheme to deprive him of the benefits of regularization. Jennifer M. Inc. However. no employer-employee relationship existed between them. The latter was not included in petitioners' payroll and paid a fixed amount under the consultancy contract. in their position paper. Labor Arbiter.. negating his dismissal. His request. Consequently. Inc. Moreover. Daily Attendance Sheets and other documents prescribing the manner in which his tasks were to be accomplished under the control of the petitioners and acknowledging his status as a regular employee of the corporation. vs. Bandag developed a franchising scheme that would enable others to operate tire and retreading businesses using its trade name and service systems. non-payment of retirement benefits. 2007. Notwithstanding the execution of the SFA. was not acted upon. the most important element. however. incentive pay. 171482. he was terminated from service effective May 1. He was not required to observe regular working hours and was free to adopt means and methods to accomplish his task except as to the results of the work required of him. 2014 Doctrine: The test in determining employer – employee relationship are: (a) the selection and engagement of the employee. 2007 until his actual reinstatement as well as the payment of his unpaid benefits under the Collective Bargaining Agreement (CBA). He averred. which consequently. and its President and General Manager. March 12. (c) the power of dismissal. Hence. The New Philippine Skylanders. et al. Contention of Respondents: Petitioners freely resigned from their employment and decided to avail the opportunity to be independent entrepreneurs under the franchise scheme. Facts: Petitioners Tesoro. Metro Manila Retreaders Inc. Thereafter. 13th month pay and damages against Bandag with the NLRC. Labor Arbiter: respondent Dakila was illegally dismissed and ordered his reinstatement with full backwages computed from the time of his dismissal on May 1. respondent Dakila terminated his contract in a letter dated April 19.. trade name and they systems prescribed by the owner. (b) the payment of wages. and damages against petitioners. No employer – employee relationship existed between Bandag and petitioners. In 1998. Ruling: YES. Control Petitioners knew that when their agreement to operate Bandag’s franchise branches would substantially change their former 16 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . they remained employees of Bandag. petitioners.. have found substantial evidence to show that respondent Dakila was a regular employee who was dismissed without cause. The last is called the “control test”. under/non- payment of wages and other benefits of a regular employee. among others. before the NLRC. Issue: WON the petitioners remained to be Bandag’s employees (salesmen) under the franchise scheme it entered into with them. Instead. Bandag’s SFAs created on their faces an arrangement that gave petitioners the privilege to operate and maintain Bandag branches in the way of franchises with petitioners earning profits based on the performance of their branches. aTcESI On the other hand. 2007 and sought for the payment of his retirement benefits pursuant to the Collective Bargaining Agreement. the SFA’s being but a circumvention of their status as regular employees. asserted that respondent Dakila was a consultant and not their regular employee. 2007. The expenses out of these funds would be deducted from petitioners’ sales to determine their incomes. Issue: Whether or not there was an employer-employee relationship as basis for illegal dismissal. Tesoro et al. GR No. NLRC and CA: Dismissed the complaint. The issue of illegal dismissal is premised on the existence of an employer-employee relationship between the parties herein. he submitted. refer to the decision of the Labor Arbiter which is the basis for SC’s decision. 2007. Franchising is a business method of expansion that allows an individual or group of individuals to market a product or a service and to use of the patent. non-payment of wages. Bandag would provide funding support to the petitioners subject to a regular or periodic liquidation of their revolving funds. et al used to work as salesmen for respondents Metro Manila Retreaders. and (d) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. led Bandag to terminate their respective SFA. Official Business Itinerary Slips. no employer – employee relationship existed between them and the petitioners. thus. NLRC and CA: Sustained the Labor Arbiter. 1997. in a letter dated April 19. thus. Under the SFA. claiming to have assumed tasks necessary and desirable in the trade or business of petitioners and under their direct control and supervision. Petitioners quit their jobs as salesmen and entered into separate Service Franchise Agreements (SFAs) with Bandag. as affirmed by the CA. which offered repair and retread services for used tires. Ruling: No. copies of his time cards. among others. Contention of Petitioners: File a complaint for constructive dismissal. respondent Dakila informed petitioners of his compulsory retirement effective May 2. In other words. He declared respondent Dakila to be a regular employee on the basis of the unrebutted documentary evidence showing that he was under the petitioners' direct control and supervision and performed tasks that were either incidental or usually desirable and necessary in the trade or business of Petitioner Corporation for a period of ten years. not just its end result. after a length of time. 17. Eñano-Bote. It is essentially a question of fact. The important factor to consider is still the element of control over how the work itself is done. trademark.

Respondent: Filed a complaint for Illegal Dismissal.. 2014 Doctrine: Not every form of control that a hiring party imposes on the hired party is indicative of employer – employee relationship. Applying the four-fold test. NLRC also considered the fact that Alcantara was not receiving monthly salary but was being paid on commission basis as stipulated in the contract. according to him amounted to his dismissal from work without any valid or just cause and in gross disregard of the proper procedure for dismissing employees. (c) the power of dismissal. Moreover. the contract provides that “no employer – employee relationship exists” between the parties. this Court has generally relied on the four-fold test. such “control” is not the “control” contemplated in employer – employee relationships. the characterization made by the parties in their contract as to the nature of their juridical relationship cannot be simply ignored. the most important element. He alleged that he is a regular employee. (c) the power of dismissal. Control in such relationships addresses the details of the day to day work. the NLRC concluded that Alcantara’s complaint is cognizable by the regular courts. Facts: Petitioner Royale Homes appointed respondent Alcantara as its Marketing Director for a fixed period of one year.2 million for the services he rendered to it. and that the company gave him P1. Ruling: Not an employee. The juridical relationship of the parties based on Control Test In determining the existence of an employer – employee relationship. His work consisted mainly of marketing petitioner’s real estate inventories on an exclusive basis. These funds to do not represent wages but are more in the nature of capital advances for operations. (b) the payment of wages. particularly in this case where the parties’ written contract equivocally states their intention at the time they entered into it. The juridical relationship of the parties based on their written contract The primary evidence of the nature of the parties’ relationship in this case is the written contract that they signed and executed in pursuance of their mutual agreement. which. The test in determining employer – employee relationship are: (a) the selection and engagement of the employee. In this case. Alcantara. Being an independent contractor. Issue: WON Alcantara was an independent contractor or an employee of Royale Homes. CA: Reversed NLRC. Since the terms of the contract are clear and leave no doubt upon the intention of the contracting parties. He prayed to be reinstated to his former position without loss of seniority right and other privileges. GR No. 195190. Respondent Alcantara was reappointed for several consecutive years. respondent announced publicly and openly that he would leave the company and that he would no longer finish the unexpired term of his contract. He alleged that the executive officers of petitioner told him that they were wondering why he still had the gall to come to office and sit at his table. It is clear that they did not want to be bound by employer – employee relationship at the time of the signing of the contract.relationship. Petition is DENIED. to wit: (a) the selection and engagement of the employee. Franchisee is required to follow a certain established system. Petitioner: Denied that Alcantara was an employee. (b) the payment of wages. Petitioners’ income depended on the profits they make. the exclusivity clause has made Alcantara economically dependent on the petitioner. It based its ruling mainly on the contract which does not require Alcantara to observe regular working hours and was also free to adopt the selling methods he deemed most effective and can even recruit sales agents for assistance. petitioner had no control on how respondent would accomplish his tasks and responsibilities as he was free to solicit sales at any time and by any manner which he may deem appropriate and necessary. is performing tasks that are necessary and desirable to its business. NLRC: Alcantara is NOT an employee but a mere independent contractor. Wages Petitioner cannot use the revolving funds feature of the SFAs as evidence of their employer – employee relationship with Bandag. CA remanded the case to the Labor Arbiter. While the existence of employer – employee relationship is a matter of law. 18. Alcantara is an employee. petitioner exercised some degree of control over Alcantara. the last covering the period of January 1 to December 31. and (d) the employer’s power to 17 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . and (d) the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished. The last is called the “control test”. July 28. Rules and regulations that merely serve as guidelines towards the achievement of a mutually desired result without dictating the means and methods of accomplishing it do not establish the employer – employee relationship. 13th month pay. Complaint dismissed for lack of jurisdiction. the literal meaning of its stipulations should control. vs. overtime pay and holiday pay as he was paid purely on commission basis. Franchisors may impose guidelines that somehow restrict the petitioners’ conduct which do not necessarily indicate “control”. The important factor to consider is still the element of control over how the work itself is done. Royale Homes Marketing Corp. 2003 as Division 5 Vice President of Sales. It argued that the appointment paper of respondent is clear that it engaged his services as an independent sales contractor for a fixed term of one year only and that respondent never received any salary. Though Bandag continued to exercise control over petitioners’ work. Labor Arbiter: Alcantara was an employee with a fixed term of employment period and that the pre-termination of his contract was against the law. In a special management meeting. In addition. not just its end result.

project. 2014 CONCEPT: It is the burden of the employer to prove that a person whose services it pays for is an independent contractor rather than a regular employee with or without a fixed term. the Chief of News Agency of Fuji. Jurisdiction Since Alcantara was not an employee of petitioner but a mere independent contractor. It is deemed to be such an important factor that the other requisites may even be disregarded. GR No. Art 280 of Labor Code classifies employees into regular. sick leave and vacation leave with pay until reinstated. Borbolla dismissed Arlene's complaint saying that she was an independent contractor.00. and casual." However." After several verbal and written communications. attorney's fees. Alcantara was not required to observe definite hours of work. the most determinative factor in ascertaining the existence of employer – employee relationship is the “right of control test”. etc. year-end bonus. seasonal. PhilHealth or Pag-Ibig. Sometime in January 2009." for "under protest. Petitioner did not assign other tasks to him and he had full control over the means and methods of accomplishing his tasks. vs. Labor Arbiter has no jurisdiction over the case and that the same is cognizable by the regular courts. Arlene affixed her signature on the non-renewal contract with the initials "U. It held that Arlene was a regular employee. and separation pay." Another 18 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .050. She informed Fuji about her condition." The day after Arlene signed the non-renewal contract. As long as the level of control does not interfere with the means and methods of accomplishing the assigned tasks.5%. Arlene was diagnosed with lung cancer. Espiritu ("Arlene") was engaged by Fuji Television Network.P. 204944-45. and pay her backwages. It further classifies regular employees into two kinds: (1) those "engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer". A person who performs work for another and is subjected to its rules. regulations and code of ethics does not necessarily become an employee. 19. In consideration of the non-renewal contract. The National Labor Relations Commission reversed the Labor Arbiter's decision. For where the person for whom the services are performed reserves the right to control not only the end to be achieved. unlike Jay Sonza who was a news anchor.control the employee with respect to the means and methods by which the work is to be accomplished. and legal interest of 12% per annum of the total monetary awards. and (4) her contract was for a fixed term. The contract also provided that the parties release each other from liabilities and responsibilities under the employment contract. ("Fuji") as a news correspondent/producer "tasked to report Philippine news to Fuji through its Manila Bureau field office. Payment of wages The element of wages is also absent in this case. Fuji Television Network Inc. Arlene "acknowledged receipt of the total amount of US$18. December 3. As provided in the contract. Fuji alleges that Arlene was an independent contractor. but also the means by which such end is reached. Arlene S. the rules imposed by the hiring party on the hired party do not amount to the labor law concept of control that is indicative of employer – employee relationship. talk show host. Labor Arbiter Corazon C. employer – employee relationship is deemed to exist. she filed a complaint for illegal dismissal with the NCR Arbitration Branch of NLRC. Yoshiki Aoki. In this case. Petition is GRANTED. As the party claiming the existence of employer – employee relationship. Arlene claimed that she was left with no other recourse but to sign the non-renewal contract. informed Arlene "that the company will have a problem renewing her contract" since it would be difficult for her to perform her job. whether such service is continuous or broken. In turn. and (2) casual employees who have "rendered at least one year of service. Arlene also argues that Sonza is not applicable because she was a plain reporter for Fuji. RULING: Arlene is a regular employee and was illegally dismissed by Fuji. citing Sonza v. moral damages. Among the four. Alcantara failed to prove the elements thereof. 13th-month pay. particularly petitioner’s power of control over the means and method of accomplishing the work. and who enjoyed a celebrity status. No payslip or payroll was ever presented and there is no proof that petitioner deducted from his supposed salary withholding tax or that it registered him with SSS. Arlene and Fuji signed a non-renewal contract on May 5. ISSUE: Whether Arlene was a regular employee and whether she was illegally dismissed or not. (3) she had the power to bargain with her employer. Inc. Not every form of control in indicative of employer – employee relationship. Decision of CA is reversed and set aside. That a person has a disease does not per se entitle the employer to terminate his or her services. (2) her salary was US$1. There is no proof that he received fixed monthly salary. ABS-CBN and relying on the following facts: (1) she was hired because of her skills. FACTS: In 2005. mid-year and year-end bonuses. exemplary damages. She "insisted that she was still fit to work as certified by her attending physician." Arlene's employment contract initially provided for a term of 1 year but was successively renewed on a yearly basis with salary adjustment upon every renewal. Alcantara’s remunerations consist only of commission override of 0. Espiritu. which is higher than the normal rate. In the assailed decision. the CA affirmed the NLRC with the modification that Fuji immediately reinstate Arlene to her position as News Producer without loss of seniority rights.900. 2009 where it was stipulated that her contract would no longer be renewed after its expiration.00 representing her monthly salary from March 2009 to May 2009. mid-year bonus.

she was not given the chance to present medical certificates. bottling and distribution of soft drink products. The burden of proving compliance with these requisites is on the employer. It did not ask her how her condition would affect her work. Fuji did not allege that it ceased operations or that Arlene's position. the No evidence was presented by Fuji to prove that reinstatement was no longer feasible. Her monthly salary amounting to US$1. wages should not be the conclusive factor in determining whether one is an employee or an independent contractor. and when she did not agree." "the timely submission of news and current events reports pertaining to the Philippines. Arlene was entitled to security of tenure. On the power to control. Pepsi Cola GR No. For failure of Fuji to comply with due process. v. she was not illegally dismissed." She also had to report for work in Fuji's office in Manila from Mondays to Fridays. The test in this kind of contract is not the necessity grid desirability of the employee's activities. Worse.176908.e. as provided for in her contract. As a regular employee.167. and all other benefits. backwages including allowances. one of which is the Tanauan Plant in Tanauan. her salary was withheld. the CA and the NLRC found that Arlene was dismissed because of her health condition. On reinstatement. In 1999. Her contract also indicated that Fuji had control over her work because she was required to work for 8 hours from Monday to Friday. Neither was there any showing that she had a celebrity status. The expiration of Arlene's contract does not negate the finding of illegal dismissal by Fuji. Nothing in the records shows that Arlene's reinstatement would cause an atmosphere of antagonism in the workplace. the disease cannot be cured within six (6) months. Arlene was not an independent contractor. PCPPI implemented a company-wide retrenchment program denominated as Corporate-wide Rightsizing Program (CRP) from 1999 to 2000. but there was no showing that she was hired because of unique skills that would distinguish her from ordinary employees. reporting interviewing subjects in front of a video camera. The manner by which Fuji informed Arlene that her contract would no longer be renewed is tantamount to constructive dismissal. 20. it did not present any certificate from a competent public health authority. What Fuji did was to inform her that her contract would no longer be renewed. although on flexible time. two requirements must be complied with: (1) the employee's disease cannot be cured within six (6) months and his "continued employment is prohibited by law or prejudicial to his health as well as to the health of his co-employees". 1999. Arlene's tasks included monitoring and getting news stories. was recognized in Brent School. There is no evidence showing that Arlene was accorded due process. no employee shall be dismissed. was no longer available. Cabaobas et al. Leyte. After informing her employer of her lung cancer. Arlene was illegally dismissed The Court of Appeals' modification of the National Labor Relations Commission's decision was proper because the law itself provides that illegally dismissed employees are entitled to reinstatement. Employees under fixed- term contracts cannot be independent contractors because in fixed-term contracts. In addition. "but the day certain agreed upon by the parties for the commencement and termination of the employment relationship. Fuji's argument that Arlene was an independent contractor under a fixed-term contract is contradictory. She had no equipment and had to use the facilities of Fuji to accomplish her tasks. unless there are just or authorized causes and only after compliance with procedural and substantive due process is conducted. Fuji had the power to dismiss Arlene. and traveling to Fuji's regional office in Thailand. Zamora. Arlene alleged that Fuji gave her instructions on what to report. and (2) certification issued by a competent public health authority that even with proper medical treatment. i.To avert further losses.. Article 280 provides that the nature of work must be "necessary or desirable in the usual business or trade of the employer" as the test for determining regular employment. an employer-employee relationship exists. 8 hours per day. Because of this.900. March 25. For dismissal under Article 284 to be valid. Arlene was a regular employee with a fixed-term contract The test for determining regular employment is whether there is a reasonable connection between the employee's activities and the usual business of the employer. Arlene was asked to sign a letter of resignation prepared by Fuji. Non-compliance leads to the conclusion that the dismissal was illegal. 19 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . That the successive renewals of Arlene's contract indicated the necessity and desirability of her work in the usual course of Fuji's business..00 appears to be a substantial sum. Arlene was hired by Fuji as a news producer. Thus. on the right to security of tenure.classification of employees. employees with fixed-term contracts. Due process must still be observed in the pre-termination of fixed-term contracts of employment. and retrenched 47 employees of its Tanauan Plant on July 31. which operates plants all over the country. Thus. Arlene had become a regular employee with the right to security of tenure. Inc. hence. 2015 CONCEPT: STARE DECESIS in labor cases FACTS: Respondent PCPPI is a domestic corporation engaged in the manufacturing.390. vs." Application of the four-fold test The Court of Appeals did not err when it relied on the ruling in Dumpit-Murillo and affirmed the ruling of the NLRC finding that Arlene was a regular employee. Even the mode of transportation in carrying out her functions was controlled by Fuji. To make matters worse. Fuji also argues that Arlene's contract merely expired. However. PCPPI's Tanauan Plant allegedly incurred business losses in the total amount of P29.

et al. Pepsi-Cola Products. Molon. and the legality of its employees' termination. Philippines. Inc. Bose rendered a Decision finding the dismissal of petitioners as illegal and ordered reinstatement. v. the settled rule in quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee. Inc. while petitioners belong to the second batch retrenched on February 15. 2013 in the related case of Pepsi-Cola Products Philippines. 1999. the Court finds that the September 11. BUT during the pendency of the petition. PCPPI countered that petitioners were dismissed pursuant to its CRP to save the company from total bankruptcy and collapse. Inc. from becoming the certified bargaining agent of PCPPI's rank-and-file employees. namely. was informed of the cessation of their employment on February 15. CA Afirmed. LEPCEU-ALU. Molon and the present case are identical. a valid exercise of management prerogatives. the remaining question is whether the factual circumstances of this present case are substantially the same as the Pepsi-Cola Products Philippines. The Court sustains PCPPI's contention. That the validity of the same PCPPI retrenchment program had already been passed upon and. PCPPI contends that the petition for review on certiorari should be denied and the CA decision should be affirmed under the principle of stare decisis. Petitioners then filed their respective complaints for illegal dismissal before the NLRC RAB entitled "Kempis. 27 of said employees. v." (SECOND BATCH) Petitioners alleged that PCPPI was not facing serious financial losses because after their termination. v. i. Leyte Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU). It also declared the retrenchment program of Pepsi Cola Products Phils. the Court still finds no reason to disturb the CA ruling that affirmed the NLRC. Molon. Even upon evaluation of petitioners' arguments on its supposed merits. Inc. such issue of union-busting was duly resolved by the NLRC and absent any perceived threat to LEPCEU-ALU's existence or a violation of respondents' right to self-organization — as demonstrated by the foregoing actuations — Pepsi cannot be said to have committed union busting or ULP in this case.. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion.000. In support of its argument that its CRP is a valid exercise of management prerogative. subject matters and causes of action between the parties in Pepsi-Cola Products Philippines. pursuant to its CRP. v. Inc. petitioners. Inc. After all. this Court rendered a Decision dated February 18. the NLRC rendered a Consolidated Decision declaring PCPPI not guilty of union busting/unfair labor practice and dismissing LEPCEU-ALU's Notice of Strike. impels the Court to accord a similar disposition and uphold the legality of same program. Labor Arbiter Vito C. 2000. PCPPI appealed to the NLRC of Tacloban City. 1999. 199166. They also alleged that PCPPI's CRP was just designed to prevent their union. P27. Molon. Pepsi-Cola Products. Guided by the jurisprudence on stare decisis. Inc. In its Position Paper. The principle of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things which are established) is well entrenched in Article 8 of the New Civil Code which states that judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines. and not even a preponderance of evidence is necessary. the Court ruled that PCPPI had validly implemented its retrenchment program. the validity of PCPPI's retrenchment program. even if other minds. The only difference between the two cases is the date of the employees' termination. such must be reasonably necessary and likely to prevent business losses which." (FIRST BATCH) On Jan 15. In view of the Court's ruling in Pepsi-Cola Products Philippines. equally reasonable. 21. PCPPI submitted audited financial statements showing that it suffered financial reverses in 1998 in the total amount of P700. April 20. Molon. 2002 NLRC Decision has exhaustively discussed PCPPI's compliance with the requirement that for a retrenchment to be valid. et al.. RULING: The petition has no merit. (case from the first batch of employees) ISSUE: The legality of their dismissal pursuant to PCPPI's retrenchment program. belong to the first batch of employees retrenched on July 31. as substantial evidence is considered sufficient. the Court observes that Pepsi had validly implemented its retrenchment program and complied with all the requirements. serious. An abandonment of the ruling in Pepsi-Cola Products Philippines. v. Inc. There is no dispute that the issues. filed complaints for illegal dismissal before the NLRC "Molon. 2000. v. On December 15.000 of which was allegedly incurred in the Tanauan Plant in 1999... the Court finds no such reasons were shown to obtain in this case. The Court rules in the affirmative. thereafter. In that case. sustained in the related case of Pepsi-Cola Products Philippines. Molon pertaining to the dismissal of the complaints for illegal dismissal filed by Molon.000. On petitioners' contention that the true motive of the retrenchment program was to prevent their union. albeit involving different parties. Begino et al. At any rate. Molon on the same issue of the validity of PCPPI's retrenchment program must be based only on strong and compelling reasons. After a careful review of the records. v. On the issue of whether the retrenchment of the petitioners' former co-employees was in accord with law. it sent notices of termination to them and to the Department of Labor and Employment. ABS-CBN Corp.On Sept 24. vs. et al. thus. GR No. Inc. from becoming the certified bargaining agent of all the rank-and-file employees of PCPPI.e. 2000. actual and real..000. might conceivably opine otherwise. pursuant to PCPPI's CRP. Philippines. 2015 Principle: the test to determine whether employment is regular or not is the reasonable connection between the activity performed by the employee in relation to the business or trade of the employer 20 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 2002. On September 11. Molon case. v. but substantial. 2000. et al. et al. who are permanent and regular employees. are not merely de minimis. if already incurred.

even if the performance is not continuous or merely intermittent. 200114. petitioners were given Project Assignment Forms which detailed. petitioners were supposedly engaged on the basis of the skills. but she was required to work for SSS continuously under 21 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . on the nature of the activities to be performed by the employee. 22. she was transferred to the SSS Retirees Association as Processor at the Membership Section until her resignation on August 26.00 monthly. simply for the purpose of upholding the standards of the company and the strictures of the industry. damages and attorney's fees. 2015 Principle: Labor Code and Civil Service Commission cannot apply but is still liable under Civil Code Facts: Debbie Ubana filed a complaint. were required to comply with the Company's policies which entailed prior approval and evaluation of their performance. 2002.00 or P846. while a regular SSS Processor receives a monthly salary of P18. petitioners were supposedly engaged on the basis of the skills. knowledge or expertise they already possessed and. the same was allegedly limited to the imposition of general guidelines on conduct and performance. Time and again. petitioners were hired as talents. petitioners were. Although petitioners were inevitably subjected to some degree of control. she was instead referred to DBP Service Corporation for "transitory employment. to act as reporters and/or cameramen for TV Patrol Bicol for designated periods and rates.00 daily or P5. to act as reporters and/or cameramen for TV Patrol Bicol for designated periods and rates. 1996. However. The employees perform functions necessary and essential to the business of ABS-CBN which repeatedly employed them for a long-running news program of its Regional Network Group in Naga City. On December 16. (c) the power of dismissal. Issue: Whether they are to be considered as regular employees or not Ruling: To determine the existence of an employee-employer relationship. the record shows that.622. the duration of a particular project as well as the budget and the daily technical requirements thereof. Aug 25. Never subjected to any control or restrictions over the means and methods by which they performed or discharged the tasks for which their services were engaged. the duration and scope to be done. As cameramen/editors and reporters. holiday pay. for said reason. Fully aware that they were not considered or to consider themselves as employees of a particular production or film outfit. As Processor. and (d) the employer's power to control the employee on the means and methods by which the work is accomplished. provided terms are ranging from three (3) months to one (1) year. Contention of ABS-CBN: Talent Contracts and/or Project Assignment Forms. at most. 13th month pay. she was made to sign a six-month Service Contract Agreement by DBP Service Corporation with a daily wage of only P171. considering the nature of the employer's business. The "control test" is generally regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Talent Contracts and/or Project Assignment Forms. petitioners were provided the equipments they needed. Under this test. it has been ruled that the test to determine whether employment is regular or not is the reasonable connection between the activity performed by the employee in relation to the business or trade of the employer. in some cases. It matters little that petitioners' services were engaged for specified periods for TV Patrol Bicol and that they were paid according to the budget allocated therefor.038. case law has consistently applied the four-fold test. (b) the payment of wages. They filed a complaint before the NLRC claiming that they were regular employees and are subject to underpayment of overtime pay. In finding that petitioners were regular employees. service incentive leave pay. Never subjected to any control or restrictions over the means and methods by which they performed or discharged the tasks for which their services were engaged. Specifically providing that nothing in the Talent contract shall be deemed or construed to establish an employer-employee relationship between the parties. alleging that she applied for employment with the SSS. petitioners were continuously re-hired by respondents over the years. she was paid only P229. at most. 2001. after all. required no further training from ABS-CBN." On May 28. Ubana.00. even the length of time of the performance and its continued existence.Facts: ABS-CBN is a television and radio broadcasting corporation engaged the services of the respondents as reporters sometime in 1996 and 2002 which they regularly renewed over the years. simply for the purpose of upholding the standards of the company and the strictures of the industry. Aside from the fact that said program is a regular weekday fare of the ABS-CBN's Regional Network Group in Naga City. from their initial engagement in the aforesaid capacities. briefed whenever necessary regarding the general requirements of the project to be executed. if not indispensability of that activity in the business. the law deems the repeated or continuing performance as sufficient evidence of the necessity. In the course of said employment. petitioners were. and. the NLRC further ruled that the exclusivity clause and prohibitions in their Talent Contracts and/or Project Assignment Forms were likewise indicative of respondents' control over them. to wit: (a) the selection and engagement of the employee. knowledge or expertise they already possessed and.45 daily wage. The nature of the employment depends. the petitioners averred that they were under the direct control and supervision of ABS-CBN. after passing the examinations and accomplishing all the requirements for employment. petitioners were hired as talents. required no further training from ABS-CBN. the same was allegedly limited to the imposition of general guidelines on conduct and performance. Social Security System vs. briefed whenever necessary regarding the general requirements of the project to be executed. 1996 Service Contract Agreement with DBP Service Corporation was never renewed. Her May 28. petitioners alleged that they performed functions necessary and desirable in ABS-CBN's business. GR No. If the employee has been performing the job for at least one year. petitioners were undoubtedly performing functions necessary and essential to ABS-CBN's business of broadcasting television and radio content. Fully aware that they were not considered or to consider themselves as employees of a particular production or film outfit. 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 utilized to achieve the same. among other matters. for said reason. Although petitioners were inevitably subjected to some degree of control.

she was paid only P5. vs. He tendered his resignation but later he was terminated 8 days later. then there is no labor dispute cognizable by the Labor Arbiters or the NLRC. or P229. GR No. Babiano. Babiano and Concepcion filed before the NLRC for non-payment of commissions and damages against CPI. As a vital government entity charged with ensuring social security. The Issue Before the Court 1. If it cannot guarantee the security of those who work for it. thus the CA is correct in ruling that Labor Code.622. This is a glaring violation of the Confidentiality and Non-Compete Clause. March 6.00.038. 2. CPI sent a notice to explain why he should not be charged with disloyalty. Lu vs. 2016 Doctrine: The existence of an employer-employee relationship cannot be negated by expressly repudiating it in the management contract and providing therein that the "employee" is an independent contractor when the terms of the agreement clearly show otherwise.00 monthly. the agony of dissatisfaction. 'in the exercise of his rights and in the performance of his duties. and observe honesty and good faith'. it nonetheless failed to include all of respondents' earned commissions thus. The Labor Arbiter ruled in favor of CPI. This is proven by (a) CPI hired and promoted Concepcion (b) the monthly "subsidy" and cash incentives that Concepcion was receiving from CPI are actually remuneration in the concept of wages (c) CPI had the power to discipline or even dismiss Concepcion (d) CPI possessed the power of control because in the performance of her duties as Project Director. she was constantly assured of being absorbed into the SSS plantilla. She signed two contracts and both stipulated that no employee employer relationship exist. His employment contract contains a clauses which bars him from disclosing confidential information to business competing with CPI while he is employed and after 1 year from termination or resignation. there was due process and termination was based on just cause. it ruled that there is a proper money claim from employee-employer relationship. Concepcion also tendered. Processor who has worked with petitioner for six long years. He is receiving a salary. 220978. [to] act with justice. et al. 2017 22 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Yes. and that some of respondent's claims may not be entertained since these pertain to benefits enjoyed by government employees. While the employment contract is denominated as "Contract of Agency for Project Director" the existence of employer-employee relations could not be negated by the mere expedient of repudiating it in a contract. Concepcion's right to her earned commissions is a substantive right which cannot be impaired by an erroneous computation of what she really is entitled to. The Confidentiality and Non-Compete Clause is not limited to acts done after the cessation of employer-employee relationship. Because of the oppressive and prejudicial treatment by SSS. CPI maintained that the they are just agents tasked with selling projects. Petitioner may not hide under its service contracts to deprive respondent of what is justly due her. yet she was merely exploited and given empty and false promises. 2 days before Babiano tendered. She asserted that she dedicated six years of her precious time faithfully serving SSS. WHEREFORE. that Babiano’s acts constituted just cause for termination however forefeiture is confiscatory and unreasonable. WON the CPI would be liable for unpaid commissions? Ruling of the Court: 1. she did not exercise independent discretion. at the same time. 197899. Enopia. On Appeal. July 5. it is indeed unfair and unjust that as. conflict of interest and breach of trust. 2002 as she could no longer stand being exploited. since there exists an employer-employee relationship between Concepcion and CPI. while a regular SSS employee with the same designation and who performs identical functions is paid a monthly salary of P18. Debbie’s contention (1) her case is predicated not on labor laws but on Articles 19 and 20 of the Civil Code for petitioner's act of exploiting her and enriching itself at her expense by not paying her the correct salary commensurate to the position she held within SSS. foregoing more satisfying employment elsewhere. The Facts: Babiano was hired by CPI as Director for Sales who eventually was promoted for VP for Sales. or P846. and injustice. it is doubtful that it can even discharge its directive to promote the social security of its members in line with the fundamental mandate to promote social justice and to insure the well-being and economic security of the Filipino people. WON there was a breach of contract? 2.different assignments with a maximum daily salary of only P229. not by employees contracted via legitimate manpower service providers. demoralization. otherwise his compensation will be forfeited. She signed a Contract of Agency for Project Director and receives a monthly subsidy. anxiety. allowance and sales commission. Yes.00 daily. After receiving that Babiano provided a competitor with information and being AWOL for 5 days. necessitating the increase in award of unpaid commissions in Concepcion's favor. Babiano categorically admitted that he sought employment with a competitor before his formal resignation. Century Properties Inc. which brings the subject matter within the jurisdiction of the NLRC and (2) its existing manpower services agreements with DBP Service Corporation and SSS Retirees Association are legitimate.. the latter being responsible to the former only for the proper payment of wages under Article 19 and 20 of CC. CPI went to CA. (emphasis emphatically supplied) SSS’s contention (1) maintains that there is a direct causal connection between respondent's claims and her employment.00. the NLRC concurred with the Labor Arbtiter. Concepcion was hired as a Sales Agent who was promoted to Project Director. Hence this appeal. There exists an employer-employee relationship. commission and incentive. 23.45 daily wage. it should lead in setting the example by treating everyone with justice and fairness. Issue: whether or not regular courts have jurisdiction over the case Ruling: Since there is no employer-employee relationship between the parties herein. give everyone his due. while the CA affirmed the NLRC ruling. There being no employer-employee relation or any other definite or direct contract between respondent and petitioner. the petition is PARTLY GRANTED 24. she was forced to resign on August 26. GR No. The very broad Article 19 of the Civil Code requires every person. He revealed he was accepted as VP in a competitor company.

her employment was to be immediately terminated upon expiration of the agreed period. they are entitled to security of tenure under the Constitution. who had already gained the status of a regular employee. After August 8. An employer is free to regulate. Enupia et al alleged that their refusal to sign the JVA is not a cause of action for termination. 279 of the Labor Code. as crew members of a fishing motor boat. any competent and relevant evidence to prove the relationship may be admitted Facts: Enupia et al were hired by Lu. except in cases of unlawful discrimination or those which may be provided by law. It was the master fisherman who hires the employees. The payment of respondents' wages based on the percentage share of the fish catch would not be sufficient to negate the employer-employee relationship existing between them. They share for the expense of the maintenance and repair of the mother boat and the purchase of nets. 1991 and July 8. discrimination.F. and the right against. RULING: SC ruled that the stipulation is violative of Art. there was no employer-employee relationship. and pursuant to their Reliever Agreement. according to his discretion and best business judgment. It is settled that no particular form of evidence is required to prove the existence of an employer-employee relationship. NLRC. its branch supervisor sent to private respondent a memorandum requiring her to explain the discrepancy. not being shown to be one of those just causes for termination under Article 282. this time in replacement of one Erlinda F. The case was not settled amicably. While he admits that he maintains radio contact with the fisherman at sea. 3.Doctrine: Existence of Employer-Employee Relationship is a question of fact. ropes and payaos. from June 10. is therefore illegal. PT&T. Enupia et al filed for illegal dismissal and monetary claims. The coverage of the Social Security Law is predicated on the existence of an employer- employee relationship. she was reminded about the company’s policy of not accepting married women for employment. 1991 to July 1. Labor Arbiter handed down a decision declaring that private respondent. which she readily contested by initiating a complaint for illegal dismissal. 1991. 1992. said public respondent upheld the labor arbiter and it ruled that private respondent had indeed been the subject of an unjust and unlawful discrimination by her employer. 272 SCRA 596 [1997] CONCEPT: The policy of not accepting or considering as disqualified from work any woman who contracts marriage is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment. Petitioner wielded the power of dismissal over respondents when he dismissed them after they refused to sign the joint fishing venture agreement. Enupia et al and Lu had an income-sharing agreement with additional back incentive. all aspects of employment. Under Art. Tenorio who went on maternity leave. Lu proposed a joint venture agreement (JVA) between him and Enupia et al. Lu alleged that Salili. a privilege that by all accounts inheres in the individual as an intangible and inalienable right. They asked for a refund of the share taken from their income for the repair and maintenance of boat as well as the purchase of materials. Any competent and relevant evidence to prove the relationship may be admitted. 1991. 1991 vice on C. It should be remembered that the control test merely calls for the existence of the right to control. Thereafter. Petitioner’s policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test of. The act of asking them to sign the joint fishing venture agreement is violative of their security of tenure. Enupia et al appealed before the NLRC which affirmed the ruling of the Labor Arbiter. ISSUE: Whether or not discrimination merely by reason of the marriage of a female employee is expressly prohibited by Article 136. 1990 until April 20. It was established that petitioner exercised control over respondents. such is only for the monitoring of their requests. They then went to the CA which eventually reversed the ruling of the NLRC. As Enupia et al were Lu’s regular employees. FACTS: Grace de Guzman was initially hired by petitioner as a reliever for a fixed period from November 21. claiming that their relationship was one of a joint venture where he provides the vessel and other paraphernalia while Enupia provides labor by fishing in the high seas. Dizon who went on leave during both periods. the right to security of tenure guarantees the right of employees to continue in their employment absent a just cause for termination. in the two successive reliever agreements which she signed on June 10. On appeal to the National Labor Relations Commission (NLRC). afforded all women workers by our labor laws and 23 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Thus. Issue: WON there was an employer-employee relationship that exist between Lu and Enupia et al? Held: Yes. the fact that petitioner had registered the respondents with SSS is proof that they were indeed his employees. 1991. 1991 to August 8. An inquiry in the Social Security System (SSS) that the employer of Enupia et al is the company owned by Lu (MTGR). private respondent’s services as reliever were again engaged by petitioner. Lu denied dismissing Enupia et al. The Labor Arbiter dismissed the petition for lack of merit. 1991. ruling that there was employer-employee relationship. from hiring to firing. Lu terminated them immediately. It now appears that private respondent had made the a representation that she was single even though she contracted marriage months before. but it likewise assaults good morals and public policy. Hence this petition. PT&T vs. When petitioner supposedly learned about the same later. 136 of the Labor Code. the master fisherman had informed him that the respondents refused to sign the agreement and have decided to return the vessel. Private respondent was dismissed from the company effective January 29. Lu contends that the relationship was that of a joint venture partnership. was illegally dismissed by petitioner. Under the Reliever Agreement which she signed with PT&T Company. and not necessarily the exercise thereof. her services were terminated.HIRING OF EMPLOYEE CASES: 1. In that memorandum. a sole proprietor of a tuna company. And respondents' termination based on their refusal to sign the same. Itdeprives a woman of the freedom to choose her status. no particular form of evidence is required to prove the existence of an employer-employee relationship. ruling no employer-employee relationship that exist. and from July 19.

and affirming Glaxo’s right to transfer Tecson to another sales territory. On November 15.he must resign. Respondent’s act of concealing the true nature of her status from PT&T could not be properly characterized as willful or in bad faith as she was moved to act the way she did mainly because she wanted to retain a permanent job in a stable company. unreasonable.R. Its employees are free to cultivate relationships with and marry persons of their own choosing. marketing strategies and other confidential programs and information from competitors. She supervised the district managers and medical representatives of her company and prepared marketing strategies for Astra in that area. In other words. 2000. and conditions that they may deem convenient. the same should be evenly applied and must not inflict adverse effects on a racial or sexual group which is protected by federal job discrimination laws.Glaxo has a right to guard its trade secrets. a privilege that by all accounts inheres in the individual as an intangible and inalienable right. and (2) that there is factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. Reminders from Tecson’s district manager did not stop him from marrying. 2004 FACTS: Petitioner Pedro Tecson was hired by respondent Glaxo Wellcome Philppines(glaxo) as medical representative on Oct. The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. it may even be said that petitioner’s policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage. 162994.Tecson married Bettsy.by no less than the Constitution. Simbol. 17. Tecson filed for a petition for review on the CA and the CA promulgated that the NCMB did not err in rendering its decision. to disclose to management any existing of future relationship by consanguinity or affinity with co-employees or employees of competing drug companies and if ever that such management find such conflict of interest.66 this Court held that in order to justify a BFOQ. an involuntary resignation resorted to when continued employment becomes impossible. Constructive dismissal is defined as a quitting. while it is true that the parties to a contract may establish any agreements. Further. G. an Astra’s Branch Coordinatior in Albay. vs. Thereafter. Simbol. There was no merit in Tecson’s contention that he was constructively dismissed when he was transferred from the Camarines Norte-Camarines Sur sales area to the Butuan City-Surigao City-Agusan del Sur sales area. but it likewise assaults good morals and public policy. she was practically forced by that very same illegal company policy into misrepresenting her civil status for fear of being disqualified from work. when there is a demotion in rank or diminution in pay. he bought the matter to GrievanceCommittee but the parties failed to resolve such issue. or a total of P50. Glaxo Wellcome Phils. The record does not show that Tecson was demoted or unduly discriminated upon by reason of such transfer. the management and the employee will explore the possibility of a transfer to another department in a non-counterchecking position or preparation for employment outside the company after six months. abhors any stipulation or policy in the nature of that adopted by petitioner PT&T.. Carried to its logical consequences. especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry. it is clear that Glaxo does not impose an absolute prohibition against relationships between its employees and those of competitor companies. manufacturing formulas. 2006 Similarly. or unlikely. The challenged company policy does not violate the equal protection clause of the Constitution as petitioners erroneously suggest. public order. Glaxo offered Tecson a separation pay of one-half (½) month pay for every year of service. ISSUE: Whether or not the policy of a pharmaceutical company prohibiting its employees from marrying employees of another pharmaceutical company is valid? RULING: This petition was denied. Duncan Asso. and when he was excluded from attending the company’s seminar on new products which were directly competing with similar products manufactured by Astra.24. hence this petition for certiorari.. good customs. No less than the Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth. Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. That Glaxo possesses the right to protect its economic interests cannot be denied.67 24 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Petitioner’s policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment. 3. Tecson was reassigned to another place and was not given products that the Astra company has and he was not included in products seminars and training. No. In laying down the assailed company policy. job requirements which establish employer preference or conditions relating to the marital status of an employee are categorized as a sex-plusdiscrimination where it is imposed on one sex and not on the other. The government. Star Paper Corp. Hence. the same should not be contrary to law.R. terms. morals. Of Detailman-PTGWO vs. or public policy.000.00 but he declined the offer.1994 thereafter signed a contract of employment which stipulates among others that he agrees to study and abide existing company rules. G. The Employee Code of Conduct of Glaxo similarly provides that an employee is expected to inform management of any existing or future relationship by consanguinity or affinity with co-employees or employees of competing drug companies. 2. April 12. the National Conciliation and Mediation Board (NCMB) rendered its Decision declaring as valid Glaxo’s policy on relationships between its employees and persons employed with competitor companies. If management perceives a conflict of interest or a potential conflict between such relationship and the employee’s employment with the company. It is a settled principle that the commands of the equal protection clause are addressed only to the state or those acting under color of its authority. A recon was filed in appellate court but it was denied. tending as it does to deprive a woman of the freedom to choose her status. insensibility or disdain by an employer becomes unbearable to the employee. Tecson requested for time in complying said policy by asking for a transfer in the Glaxo’s milk division in which the other company had no counterpart. From the wordings of the contractual provision and the policy in its employee handbook. Under American jurisprudence. Petitioners contention it was violative of constitutional law which is the equal protection clause and he was constructively dismissed while the respondents contention that it is a valid exercise of it s management prerogatives. or when a clear sdiscrimination. No. 164774. to repeat. in Star Paper Corporation v. the employer must prove that (1) the employment qualification is reasonably related to the essential operation of the job involved. Sept. What the company merely seeks to avoid is a conflict of interest between the employee and the company that may arise out of such relationships.

The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In order to achieve this, it
must necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the aircraft. The weight
standards of PAL should be viewed as imposing strict norms of discipline upon its employees.

In other words, the primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety. It cannot be
gainsaid that cabin attendants must maintain agility at all times in order to inspire passenger confidence on their ability to care for
the passengers when something goes wrong. It is not farfetched to say that airline companies, just like all common carriers, thrive
due to public confidence on their safety records. People, especially the riding public, expect no less than that airline companies
transport their passengers to their respective destinations safely and soundly. A lesser performance is unacceptable.

The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and caprices of the passengers.
The most important activity of the cabin crew is to care for the safety of passengers and the evacuation of the aircraft when an
emergency occurs. Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines need cabin attendants who have
the necessary strength to open emergency doors, the agility to attend to passengers in cramped working conditions, and the stamina
to withstand grueling flight schedules.

On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in case of emergency. Aircrafts
have constricted cabin space, and narrow aisles and exit doors. Thus, the arguments of respondent that "[w]hether the airline’s flight
attendants are overweight or not has no direct relation to its mission of transporting passengers to their destination"; and that the
weight standards "has nothing to do with airworthiness of respondent’s airlines," must fail.

In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ.68 BFOQ is valid "provided it reflects
an inherent quality reasonably necessary for satisfactory job performance."

Hence, the petitioner was legally dismissed. However, he is entitled to separation pay. Normally, a legally dismissed employee is not
entitled to separation pay. This may be deduced from the language of Article 279 of the Labor Code that "[a]n employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement." Luckily for petitioner, this is not an ironclad rule.

Exceptionally, separation pay is granted to a legally dismissed employee as an act "social justice,"101 or based on "equity."102 In both
instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the
employee.103

Here, We grant petitioner separation pay equivalent to one-half (1/2) month’s pay for every year of service.

4. Del Monte Phils vs. Velasco, G.R. No. 153477, March 6, 2007

CONCEPT: The company cannot dismiss a female employee if her frequent absences were due to illnesses as a consequence of her
pregnancy provided that such were justified.

FACTS: Lolita M. Velasco (respondent) started working with Del Monte Philippines (petitioner) on October 21, 1976 as a seasonal
employee and was regularized on May 1, 1977. Her latest assignment was as Field Laborer.

On June 16, 1987, respondent was warned in writing due to her absences. On May 4, 1991, respondent, thru a letter, was again warned
in writing by petitioner about her absences without permission and a forfeiture of her vacation leave entitlement for the year 1990-
1991 was imposed against her.

On September 14, 1992, another warning letter was sent to respondent regarding her absences without permission during the year
1991-1992. Her vacation entitlement for the said employment year affected was consequently forfeited.

In view of the said alleged absences without permission, on September 17, 1994, a notice of hearing was sent to respondent notifying
her of the charges filed against her for violating the Absence Without Official Leave rule: that is for excessive absence without
permission on August 15-18, 29-31 and September 1-10, 1994. The hearing was set on September 23, 1994. Respondent having failed to
appear on September 23, 1994 hearing, another notice of hearing was sent to her resetting the investigation on September 30, 1994. It
was again reset to October 5, 1994.

On January 10, 1995, after hearing, the petitioner terminated the services of respondent effective January 16, 1994 due to excessive
absences without permission.

Feeling aggrieved, respondent filed a case for illegal dismissal against petitioner asserting that her dismissal was illegal because she
was on the family way suffering from urinary tract infection, a pregnancy-borne, at the time she committed the alleged absences. She
explained that for her absence from work on August 15, 16, 17 & 18, 1994 she had sent an application for leave to her supervisor, Prima
Ybañez. Thereafter, she went to the company hospital for check-up and was advised accordingly to rest in quarters for four (4) days
or on August 27 to 30, 1994. Still not feeling well, she failed to work on September 1, 1994 and was again advised two days of rest in
quarters on September 2-3, 1994. Unable to recover, she went to see an outside doctor, Dr. Marilyn Casino, and the latter ordered her
to rest for another five (5) consecutive days, or from September 5 to 9, 1994. She declared she did not file the adequate leave of
absence because a medical certificate was already sufficient per company policy. On September 10, 1994 she failed to report to work
but sent an application for leave of absence to her supervisor, Prima Ybañez, which was not anymore accepted.

Labor Arbiter sided with Del Monte. However, NLRC and CA sided with Velasco.

ISSUE: Was Velasco illegally dismissed?
RULING: YES.

1. It is violative of Article 137 of the Labor Code.
Article 137 of the Labor Code provides that it shall be unlawful to “(1) To deny any woman employee the benefits provided for in this
Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided
under this Code; (2) To discharge such woman on account of her pregnancy, while on leave or in confinement due to her pregnancy;
or(3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.”

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In this case, by the measure of substantial evidence, what is controlling is the finding of the NLRC and the CA that respondent was
pregnant and suffered from related ailments. It would be unreasonable to isolate such condition strictly to the dates stated in the
Medical Certificate or the Discharge Summary. It can be safely assumed that the absences that are not covered by, but which
nonetheless approximate, the dates stated in the Discharge Summary and Medical Certificate, are due to the continuing condition of
pregnancy and related illnesses, and, hence, are justified absences. The petitioner admits these facts in its Petition for Review.8 And,
as the CA aptly held, it was no less than the company doctor who advised the respondent to have "rest-in-quarters" for four days on
account of a pregnancy-related sickness.

Medical and health reports abundantly disclose that during the first trimester of pregnancy, expectant mothers are plagued with
morning sickness, frequent urination, vomiting and fatigue all of which complainant was similarly plagued with.

The Filflex Industrial and Manufacturing Co. case is not applicable, principally because the nature and gravity of the illness involved
in that case – chronic asthmatic bronchitis – are different from the conditions that are present in the instant case, which is pregnancy
and its related illnesses.

The Court takes judicial notice of the fact that the condition of asthmatic bronchitis may be intermittent, in contrast to pregnancy
which is a continuing condition accompanied by various symptoms and related illnesses.

2. Velasco was able to subsequently justify her absences in accordance with company rules and policy.
The Court finds no cogent reason to disturb the findings of the NLRC and the CA that the respondent was able to subsequently
justify her absences in accordance with company rules and policy; that the respondent was pregnant at the time she incurred the
absences; that this fact of pregnancy and its related illnesses had been duly proven through substantial evidence; that the respondent
attempted to file leaves of absence but the petitioner’s supervisor refused to receive them; that she could not have filed prior leaves
due to her continuing condition; and that the petitioner, in the last analysis, dismissed the respondent on account of her pregnancy,
a prohibited act.

3. Petitioner cannot use her history of absences to lay down a pattern of absenteeism or habitual disregard of company rules
to justify the dismissal of respondent.
Petitioner puts much emphasis on respondent’s "long history" of unauthorized absences committed several years beforehand.
However, petitioner cannot use these previous infractions to lay down a pattern of absenteeism or habitual disregard of company
rules to justify the dismissal of respondent. The undeniable fact is that during her complained absences in 1994, respondent was
pregnant and suffered related illnesses.

In fine, the Court finds no cogent reason to disturb the findings of the CA and the NLRC.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated July 23, 2001 and the Resolution dated May 7, 2002 of the
Court of Appeals are AFFIRMED.

5. Yrasuegui vs. Phil Air Lines, G.R. No. 168081, October 17, 2008

CONCEPT: Failure to comply with the weight standards of flight companies is a ground for legal dismissal, it being under the
principle of “bona fide occupational qualification”. The Supreme Court cited Star Paper Corporation vs. Simbol.

FACTS:
Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc. (PAL). He stands five feet and
eight inches (5’8") with a large body frame. The proper weight for a man of his height and body structure is from 147 to 166 pounds,
the ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual1 of PAL.

The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended vacation leave from
December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently, petitioner failed to meet the company’s weight
standards, prompting another leave without pay from March 5, 1985 to November 1985. Despite the suggestion of the company to
consult their company physician and their requests to comply with the weight standards, Yrasuegui still failed to comply.

On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, and considering the
utmost leniency extended to him which spanned a period covering a total of almost five (5) years, his services were considered
terminated effective immediately. Hence, the petitioner claimed that he was illegally dismissed.
Labor Arbiter and the NLRC ruled in favour of Yrasuegui. CA reversed the decision of NLRC.
ISSUE: Was the petitioner illegally dismissed?
RULING: NO.
Our Ruling

I. The obesity of petitioner is a ground for dismissal under Article 282(e) 44 of the Labor Code.

A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification of an
employee in order to keep the job. Tersely put, an employee may be dismissed the moment he is unable to comply with his ideal
weight as prescribed by the weight standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code.
As explained by the CA:

x x x [T]he standards violated in this case were not mere "orders" of the employer; they were the "prescribed weights" that a cabin
crew must maintain in order to qualify for and keep his or her position in the company. In other words, they were standards that
establish continuing qualifications for an employee’s position. In this sense, the failure to maintain these standards does not fall
under Article 282(a) whose express terms require the element of willfulness in order to be a ground for dismissal. The failure to meet
the employer’s qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d) and is therefore one that
falls under Article 282(e) – the "other causes analogous to the foregoing."

in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia Government and Service Employee’s
Union (BCGSEU),63 the Supreme Court of Canada adopted the so-called "Meiorin Test" in determining whether an employment
policy is justified. Under this test, (1) the employer must show that it adopted the standard for a purpose rationally connected to the
performance of the job;64 (2) the employer must establish that the standard is reasonably necessary65 to the accomplishment of that
work-related purpose; and (3) the employer must establish that the standard is reasonably necessary in order to accomplish the

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legitimate work-related purpose.

4.WAGES & WAGE RATIONALIZATION ACT

4.AVIOLATION OF WAGE ORDER

CASES:

1. S.I.P. Food House et al., vs. Batolina, GR No. 192473, Oct 11, 2010

CONCEPT: REQUISITES TO ESTABLISH EMPLOYEE-EMPLOYER RELATIONSHIP; WHEN IS BOARD ANG LODGING
(FACILITIES) DEDUCTIBLE FROM WAGE

FACTS:

GSIS Multi-Purpose Cooperative (GMPC) is an entity organized by the employees of the Government Service Insurance
System (GSIS). GMPC wanted to operate a canteen in the new GSIS Building. Since it had no capability and expertise in said
business, it contracted the services of SIP, owned by Spouses Pablo. The respondents worked as waiters and waitresses in the
canteen. In Feb 2004, GMPC terminated SIPs concession contract. This termination led to the dismissal of the respondents, hence
they filed for illegal dismissal with money claims.

RESPONDENTS’ CONTENTION:
1) SIP did not implement Wage Orders 5 to 11 for the years of 1997 to 2004; 2) they did not receive overtime pay for work
rendered from 6:30 am to 5:30 pm; 3) other benefits (service incentive, maternity benefit of Flordeliza Matias, non-remittance of their
SSS contribution.

SIP’S CONTENTION:
SIP claimed that the respondents were not its employees but of GMPC’s, since it only operated the canteen in behalf of
GMPC. When the concession contract was terminated, GMPC already operated the canteen on its own.

LABOR ARBITER’S DECISION:
Complaint was dismissed for lack of merit. LA found that respondents were GMPC’s employees, and not SIP’s as there
existed a labor-only contracting relationship between the two entities. Money claims were dismissed since SIP is not liable for unpaid
salaries because it had complied with the minimum statutory requirement and had extended better benefits than GMPC (free board
and lodging). No overtime pay as it was improbable that respondents regularly worked beyond 8 hours a day.

NLRC DECISION:
SIP was the respondent’s employer, but they were not illegally dismissed since the termination of the concession contract
constituted an authorized cause for the severance of employer-employee relations. Nevertheless, respondents were awarded with the
claimed benefits, except overtime pay (no evidence that they rendered 2 hours overtime work), because SIP failed to present proof of
compliance with the law of wage, 13th month pay and service incentive leave.

CA DECISION:
It affirmed the award. However, it found merit in SIP’s objection that in a government agency (GSIS), there are only 20
official business days in a month and not 26. Nevertheless, it affirmed the NLRC decision finding that SIP is the employer of the
respondents. The motion for recon of SIP was denied, hence the petition.

ISSUE:
1) WON there is Employer-Employee relationship between respondents and SIP - YES
2) WON the furnished board and lodging can be deducted from the respondents’ wage - NO
RULING:
1. SIP WAS THE EMPLOYER OF RESPONDENTS. THERE IS E-E RELATIONSHIP.

When the concession was terminated, they were denied entrance to the premises. Thus, spouses Pablo, thru their counsel,
sent a protest letter to GMPC. In the letter, they admitted that the respondents in this case are their employees because said letter is
worded as follows, “x x x you barred our clients and their employees/helpers from entering said premises x x x”. Moreover, the
spouses did not deny that they paid the salary of the respondents.

In addition, there is E-E relationship between SIP and the respondents because the former exercised the essential
elements of an E-E relationship such as hiring, payment of wages and the power of control.

2. THE FURNISHED BOARD AND LODGING CANNOT BE SET-OFF FOR THE UNDERPAYMENT OF THE
RESPONDENTS’ WAGES

In Mabeza v NLRC, it was held that that the employer cannot simply deduct from the employee’s wages the value of the
board and lodging without satisfying the following requirements: (1) proof that such facilities are customarily furnished by the
trade; (2) voluntary acceptance in writing by the employees of the deductible facilities; and (3) proof of the fair and
reasonable value of the facilities charged. As the CA aptly noted, it is clear from the records that SIP failed to comply with these
requirements.

SC also said that there are only 20 days a month upon which the monetary award should be computed, since respondents
explicitly claim their salaries and benefits for the services rendered from Monday to Friday or 5 days a week.

PETITION HAS NO MERIT.

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petitioners. 3. as follows: Basic Monthly Salary + Monthly Average Performance Incentive (which is the total performance incentive earned during the year immediately preceding ÷ 12 months) × No. CA DECISION: It affirmed that the respondents were regular employees because they performed functions which were the regular and usual business of petitioners. SLL and Sonny claimed that the private respondents were merely project employees.R. payrolls records and similar documents are in the possession of the employer. provided that such deduction is with the written authorization of the employees concerned. the Annual Performance Incentive Pay of RSMs. or the electricity and water allegedly consumed by private respondents in this case were not facilities but supplements. DISTINGUISHED FROM SUPPLEMENTS FACTS: Sometime in 1996 and 1997. 2) the provision of deductible facilities must be voluntarily accepted in writing by the employee. True enough. if for EMPLOYERS – NON-DEDUCTIBLE. In such cases. Also. Nevertheless. failed to present any evidence such as payroll or pay slips. vs. the employer may deduct from the wages of the employees not more than 70% of the value of the meals and snacks enjoyed by the latter.for the purpose of maintaining the efficiency and health of its workers while they were working at their respective projects. 13th month. Sonny decided to cut down overtime work. water and snacks should be added to their basic pay. FACILITIES . SUPPLEMENTS on the other hand is defined as constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. When private respondents asked to work overtime. Coca-Cola Bottlers Phils Inc. and SSSs shall be considered in the computation of retirement benefits. The failure to submit the project completion was also proof that the respondents were not project employees but regular employees. 2011 . As stipulated in Coca-Cola’s retirement plan. Moreover. before the value of facilities can be deducted from the employees’ wages. said respondents were regular employees because they were repeatedly hired by Sonny.are items of expense necessary for the laborer's and his family's existence and subsistence so that by express provision of law (Sec. which in this case was Cebu. Respondents were also underpaid because the allowances given cannot be deducted from their wages because it was furnished without their consent. Edgardo and Danilo were hired by Sonny (Manager of SLL) as trainee cable/lineman. the following requisites must all be attendant: 1) proof must be shown that such facilities are customarily furnished by the trade. 2013 CONCEPT: PRINCIPLE OF NON-DIMINUTION OF BENEFITS. Motion for recon was denied. the private respondents were engaged as project employees by Sonny in four different projects. they would have to go home to Cebu at their own expense. holiday pay.2. transportation. Faced with economic problems. It also found that no project completion was filed with the nearest Public Employment Office as required by DOLE. of Years in Service. burden of proving monetary claims rests on the employer – rationale of which is that the files. non-payment of wages. 172161. they went home to Cebu. and 3) facilities must be charged at reasonable value. Sonny refused. Jr. there was no illegal dismissal because it was petitioners’ prerogative to deny any request for overtime work. ISSUE: WON the facilities (the allowances) can be deducted from the wages of the private respondents . March 2. They were paid full minimum wage. Afterwards. In labor cases. Vergara. 2 provides that an employer may provide subsidized meals and snacks to his employees provided that the subsidy shall not be less that 30% of the fair and reasonable value of such facilities. Mere availment is not sufficient to allow deductions from employees’ wages. it was without respondents’ consent. On whether the value of the facilities should be included in the computation of the "wages" received by private respondents. 2[g]). the party who alleges payment as defense has the burden of proving it. the allowances cannot be deducted because again. LABOR ARBITER DECISION: LA Belarmino decided that it had jurisdiction because “workplace” included the place where the employee was supposed to report back after a temporary detail. and said that if they insist. G. After training. NLRC. TAKE NOTE . and service incentive leave. the facilities were for the benefit of petitioners . the significant one is that project in Camarin Caloocan City with Furukawa Corp as the general contractor. respondents Roldan. GR No. but only reported to work as substitutes to regular workers. as a District Sales Supervisor (DSS) for Las Pinas. they allegedly received higher wage rate than that prescribed in Rizal and Manila. 28 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 31. 176985. No. They allege that the food allowance of P63 per day as well as allowance for lodging. or when there is needed extra workers. As defined. April 1. Section 1 of DOLE Memorandum Circular No. With the allowances. they filed a complaint for illegal dismissal. Nevertheless. In this case. DSSs. it was ruled that petitioners were not liable for illegal dismissal because the act of the respondents of going home was an act of indifference when petitioners prohibited overtime work. Complaint should also be dismissed because it should have been filed in Manila where the work was done. Petitioners appeal to SC. It is of the view that the food and lodging. they form part of the wage and when furnished by the employer are deductible therefrom. CONCEPT: FACILITIES – WHEN DEDUCTIBLE.NO RULING: PETITION HAS NO MERIT As a general rule on payment of wages.FOR WHOSE BENEFIT: if for EMPLOYEES – DEDUCTIBLE. PETITION DENIED. REGULAR COMPANY PRACTICE FACTS: Ricardo Vergara was an employee of Coca-Cola from May 1968 until Kan. As the project was ongoing. Furukawa delayed in the delivery of imported materials which led to the non-completion of the project on time. As an answer. SLL International Cables Specialist vs. electricity. In this case. aside from bare allegations. 2002. Manila. As to status of employment. NLRC DECISION: LA decision was affirmed. assignment or travel.

With this task of moving constantly to check on the machinery and equipment assigned to him. The chairs were not removed indiscriminately. – NO RULING: Employees have a vested right over existing benefits voluntarily granted to them by their employees by virtue of the principle of non-diminution of benefits. a bottling operator does not need a chair anymore. Ricardo failed to meet the collection qualifiers in order to be eligible to receive SMI as part of the retirement plan. and manner of work. It did not violate.016. according to its own discretion and judgment. transfer of employees. the rotation is this: after two and a half (2 ½) hours of work. Arbitration then ensued where the Arbitration ruled for the employees. the payment of SMI was deleted. Appeal to the CA was made and the CA reversed the decision. This directive is in line with the "I Operate. who claimed that the SMI were included in their retirement package. However. Issue: WON the removal of the chairs violated the CBA. To be considered as a regular company practice. dismissal and recall of workers. time. which was paid and then a Compromise agreement was afterwards executed affirming such payment. Coca-Cola Bottlers Phils Inc. 4. processes to be followed. Prior to September 2008. Inc. In the case of the plant in Cebu City. sale and distribution of soft drink products. In September 2008 and up to the present. wherein every bottling operator is given the responsibility to keep the machinery and equipment assigned to him clean and safe. work assignments. Ricardo utterly failed to adduce proof to establish his allegation that SMI has been consistently. -Cebu Plant. Under the employ of each bottling plant are bottling operators. there are 20 bottling operators who work for its Bottling Line 1 while there are 12-14 bottling operators who man its Bottling Line. They were represented by herein petitioners and initiated their grievance system in accordance to their CBA. the rotation has changed and bottling operators are now given a 30-minute break after one and one half (1 ½) hours of work. Held: Procedural Aspect: Rule 43 is the proper remedy to petition a review of a decision or award as granted by a voluntary arbitrator. work supervision. Appeal and subsequent motion for reconsideration was denied. the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time. Specifically. I Maintain. Bottling Operators in Bottling Line 2 were provided were chairs upon their request and in 1988 the Bottling Operators in Bottling Line 1 followed suit and were granted the same. As established. April 15. I Maintain. petitioner’s directive to remove them. he failed to meet the trade receivable qualifier. ISSUE: WON the SMI should be included in the computation of petitioner’s retirement benefits on the ground of consistent company practice.2 Rule 42 of the 1997 Rules of Civil Procedure A Valid Exercise of Management Prerogative The Court has held that management is free to regulate. working regulations. In 1974. Royal Plant Workers Union vs. launched to enable the Union to perform their duties and responsibilities more efficiently. Labor Laws and the General Principles of Justice and Fair Play. there is no substantial evidence to prove that the grant of SMI to all retired DSS had ripened into company practice. LABOR ARBITER and NLRC DECISION: LA directed Coca-Cola to reimburse the amount illegally deducted from petitioner’s retirement package and to integrate therein his SMI privilege. (CCBPI) is a domestic corporation engaged in the manufacture. which pointed out the various stop-gap measures undertaken by it beginning 1999 in order to arrest the deterioration of its accounts receivables balance. Ricardo moved to partially execute the reimbursement of illegal deduction. place. all aspects of employment. In the present controversy. G. Ricardo filed a complaint before the NLRC claiming that he is entitled to an additional P474. deliberately and voluntarily granted to all retired DSS without any qualification or conditions. DECISION OF CA. However a gridlock still transpired between both parties. The only evidence he presented where the testimonies of formers DSSs Renato Hidalgo and Ramon Velazquez. PETITION DENIED.67 which Coca-Cola allegedly deducted illegally. (3) the practice is not due to error in the construction or application of a doubtful or difficult question of law. Pursuant to LA decision. the bottling operators are given a 30-minute break and this goes on until the shift ends. without prejudice to his appeal to the CA of the NLRC decision which deleted the SMI payment. – No.R. Courts justification is Jurisprudence and Sec. which included the payment of SMI. These testimonies were sufficiently countered by Coca-Cola by presenting the affidavits of its witnesses. and discipline. 198783. 29 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . supervision of workers. I Clean" program of petitioner for bottling operators. Hence the petition.600 as Salmes Management Incentives and to the amount of P496. The bottling operators took issue with the removal of chairs. representing the unpaid accounts of two dealers within his jurisdiction. There is diminution of benefits when: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long period of time. Sometime in September 2008. the chairs provided for the operators were removed pursuant to a national directive of petitioner. and (4) the diminution or discontinuance is done unilaterally by the employer. and that it has been made consistently and deliberately. No. hence. 2013 Facts: Petitioner Coca-Cola Bottlers Philippines. where certain conditions were to be met in order to qualify. I Clean" program. including hiring. it cannot be denied that CCBPI removed the operators’ chairs pursuant to a national directive and in line with its "I Operate. Further herein respondent rationalized that it would prevent the bottling operators will now avoid sleeping thus would also prevent injuries. lay-off of workers. (2) the practice is consistent and deliberate. They were carefully studied with due regard to the welfare of the members of the Union. In this case. On appeal to NLRC. working methods.

salary or compensation making them enforceable obligations. 30 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 6727 was enacted into law. Further the CBA provided. tasked the RTWPBs to determine and fix minimum wage rates applicable in their region.. NCR-07 exempted certain sectors and industries from its coverage (Agricultural Workers. incomes and productivity improvement at the enterprise. the term "benefits" mentioned in the non-diminution rule refers to monetary benefits or privileges given to the employee with monetary equivalents. The National Wages & Productivity Commission et al. March 12. NCR – 07 imposing an increase of P25. No similar requirement is mandated for men or male workers. The RTWPBs were also mandated to receive. Safety and Social Welfare Benefit provisions under Book IV of the Labor Code of the Philippines.In short.O. They contended that neither the NWPC nor the RTWPB-NCR had the authority to expand the non- coverage and exemptible categories under the wage order. the removal of the chairs was compensated by the reduction of the working hours and increase in the rest period. 6727 created the NWPC and the RTWPBs of the different regions. Section 3 of Republic Act No.50/day on the wages of all private sector workers and employees in the NCR and pegging the minimum wage rate in the NCR at P223. hence. The CA correctly ruled that the Labor Code. industry and national levels. A break time of thirty (30) minutes after working for only one and a half (1 ½) hours is a just and fair work schedule. CA Reversed the decision of NWPC) Issue: WON NWPC AND RTWPB has authority to expand the non-coverage and exemptible categories under the wage order Held: The petition for review on certiorari is meritorious. the assailed sections of the wage order should be voided. On October 14 1999. GR No. subject to the guidelines issued by the NWPC. the NWPC had the authority to prescribe the rules and guidelines for the determination of the minimum wage and productivity measures. (NWPC upheld the validity of Sec 2 and Sec 9 of the Wage Order. Indisputably. 6727.. No Violation of Labor Laws The rights of the Union under any labor law were not violated. shall not be understood as establishing an obligation on the company’s part. and the RTWPB-NCR had the power to issue wage orders. Section 2 and Section 9 of Wage Order No. The appeal was docketed as NWPC Case No. No Violation of Article 100 of the Labor Code The operators’ chairs cannot be considered as one of the employee benefits covered in Article 100 of the Labor Code. Such benefits or privileges form part of the employees’ wage. vs. only requires employers to provide seats for women. The directive did not expose the bottling operators to safety and health hazards. Republic Act No. among others.. The Alliance of Progressive Labor et al.50/day. Distressed Establishments. RTWPB – NCR issued Wage Order No. process and act on applications for exemption from the prescribed wage rates as may be provided by law or any wage order. when they could sit down. the Alliance of Progressive Labor (APL) and the Tunay na Nagkakaisang Manggagawa sa Royal (TNMR) filed an appeal with the NWPC assailing Section 2(A) and Section 9(2) of Wage Order No. Workers in Small Establishments employing less than 10 workers. In order to rationalize wages throughout the Philippines. This Court has already decided several cases regarding the non-diminution rule where the benefits or privileges involved in those cases mainly concern monetary considerations or privileges with monetary equivalents Petition is Denied 5. There was no violation either of the Health. It must be stressed that all concerned bottling operators in this case are men. W. no matter how long or how often. Republic Act No. No Violation of the general principles of justice and fair play The Court completely agrees with the CA ruling that the removal of the chairs did not violate the general principles of justice and fair play because the bottling operators’ working time was considerably reduced from two and a half (2 ½) hours to just one and a half (1 ½) hours and the break period. As shown in the foregoing. Hence. There is no law that requires employers to provide chairs for bottling operators. The Union should not complain too much about standing and moving about for one and one-half (1 ½) hours because studies show that sitting in workplaces for a long time is hazardous to one’s health (there were different studies provided by the court in its decision to support this claim) No Violation of the CBA The CBA15 between the Union and CCBPI contains no provision whatsoever requiring the management to provide chairs for the operators in the production/manufacturing line while performing their duties and responsibilities. shall be considered as purely voluntary acts by the management and that the continuance of such benefits and/or privileges. provincial or industry levels. empowered the NWPC to formulate policies and guidelines on wages. provinces or industries therein. Further. 2014 Facts: On June 9. 6727.99-001. 1989. that benefits and/or privileges. CCBPI’s exercise of its management prerogative was made in good faith without doing any harm to the workers’ rights. Exporters including indirect exporters with at least 50% export sales and with forward contracts with their foreign buyers/principals) Feeling aggrieved by their non-coverage by the wage adjustment. to prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional. Section 3 of Republic Act No. However. and to review regional wage levels set by the RTWPBs to determine whether the levels were in accordance with the prescribed guidelines and national development plans. NCR-07. it is understood that it was a purely voluntary act on the part of CCBPI and the long practice did not convert it into an obligation or a vested right in favor of the Union. The bottling operators’ new work schedule is certainly advantageous to them because it greatly increases their rest period and significantly decreases their working time. was increased to 30 minutes between rotations. Since the matter of the chairs is not expressly stated in the CBA. 150326. In the Court’s view. the removal of the chairs was designed to increase work efficiency. and to issue the corresponding wage orders. not expressly given therein but which are presently being granted by the company and enjoyed by the employees.

SIL and 13th month pay only if he is 31 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and Service Incentive Leave (SIL) pay. P500. accordingly. and (3) approved and disapproved his leaves. Lastly. Macasio. regardless of the actual number of hours that he spent chopping the delivered hogs. The very fact that the validity of the assailed sections of Wage Order No. depending on the volume of the delivered hogs. and that he only has ten employees. the presence (or absence) of employer supervision as regards the worker’s time and performance is the key. He argued that.David claimed that he issued the Certificate of Employment. NCR-07 is presumed to be regularly issued in the absence of any strong showing of grave abuse of discretion on the part of RTWPB-NCR.” for nonpayment of overtime pay. Second. holiday.m. and (3) was not engaged to report for work and. 2014 CONCEPT: The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of Service Incentive Leave (SIL) and holiday pay. he is not entitled to overtime. not entitled to overtime pay.00 in 2006 and P400. He alleged that he hired Macasio as a butcher or chopper on “pakyaw” or task basis who is. by establishing full time boards to police wages round- the-clock. holiday pay. 195466.The LA concluded that since Macasio was engaged on “pakyaw” or task basis. He also claimed payment for moral and exemplary damages and attorney’s fees. submitting to the NWPC precisely the issue of the validity of the Section 2(A) and Section 9(2) of Wage Order No. in arriving at its decision. Macasio alleged before the Labor Arbiter that he had been working as a butcher for David since January 6. and ends at 2:00 a. upon Macasio’s request. the RTWPBs investigate and study all the pertinent facts to ascertain the conditions in their respective regions. they are logically vested with the competence to determine the applicable minimum wages to be imposed as well as the industries and sectors to exempt from the coverage of their wage orders. the requisite approval or review was complied with.00 in 2007. holiday pay and 13th month pay. reporting time and hogs to be chopped. NCR-07. did not receive any fee when no hogs were delivered. only for overseas employment purposes. as well as the manner by which he was to perform his work. (2) received the fixed amount of P700.00 in 2005. first. of the following day or earlier. v. which was increased from P600. National Wages and Productivity Commission. In creating the RTWPBs. David/Yiels Hog Dealer vs. this Court all too clearly pronounced that Congress meant the RTWPBs to be creative in resolving the annual question of wages without Labor and Management knocking on the doors of Congress at every turn. 1999. David pointed out that Macasio: (1) usually starts his work at 10:00 p. Macasio added that David owned the hogs delivered for chopping. The NWPC. CA: explained that as a task basis employee. The Labor Arbiter gave credence to David’s claim that he engaged Macasio on “pakyaw” or task basis. firstly. David also rented the workplace. In the nature of their functions. meetings. SIL and 13th month pay.m. Any party aggrieved by the wage order issued by the RTWPBs could appeal. He pointed to the Certificate of Employment that David issued in his favor which placed the date of his employment. The presumption of validity is made stronger by the fact that its validity was upheld by the NWPC upon review Petition is granted. He further claimed that David employs about twenty-five (25) butchers and delivery drivers. and secondly. FACTS: Macasio filed before the Labor Arbiter a complaint against petitioner Ariel L.The wage orders issued by the RTWPBs could be reviewed by the NWPC motu proprio or upon appeal. Wage Order No. 6. Congress intended to rationalize wages. therefore. pointing out that David: (1) set the work day. (2) daily paid his salary of P700. GR No. Macasio disputed David’s allegations. 1995. doing business under the name and style “Yiels Hog Dealer. APL and TNMR appealed on October 26. David did not start his business only in 2005. David. Accordingly. social-economic data and informations gathered prior to the issuance of Wage Order No. July 2. he reported for work every day which the payroll or time record could have easily proved had David submitted them in evidence. Hence. In Employers Confederation of the Phils. The RTWPBs are the thinking group of men and women guided by statutory standards and bound by the rules and guidelines prescribed by the NWPC. in January 2000.00 per engagement. NCR-07. Macasio claimed that David exercised effective control and supervision over his work. and for payment of service incentive leave (SIL). weighed the arguments of the parties and ruled that the RTWPB-NCR had substantial and justifiable reasons in exempting the sectors and establishments enumerated in Section 2(A) and Section 9(2) based on the public hearings and consultations. Macasio is excluded from the coverage of holiday. Labor Arbiter and NLRC: dismissed Macasio’s complaint for lack of merit. albeit erroneously. by giving the boards enough powers to achieve this objective. David claimed that he started his hog dealer business in 2005. NCR-07 had been already passed upon and upheld by the NWPC meant that the NWPC had already given the wage order its necessary legal imprimatur.00. Here. CA Decision is set aside. as well as the work tools and implements. and 13th month pay.

As with holiday and SIL pay. On May 2010. the Supreme Court find that the CA legally erred in finding that the NLRC gravely abused its discretion in denying this benefit to Macasio. irrespective of the time consumed in the performance thereof” are exempted.al were all laborers working for petitioner Our Haus Realty Development Corporation. vs. The Supreme Court reject this assertion of the petitioner. their wages were below the minimum rates prescribed in the following wage orders from 2007 to 2010. The Supreme Court agree with the CA that Macasio does not fall under the definition of “field personnel. Impliedly. Our Haus failed to 32 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . four elements generally need to be considered. Section 3(e) of the Rules and Regulations Implementing PD 851 exempts employees “paid on task basis” without any reference to “field personnel. they filed with the LA a complaint for underpayment of their daily wages claiming that except for Tenedero. Macasio regularly performed his duties at David’s principal place of business.. and third. 2014 CONCEPT: There is no substantial distinction between deducting and charging a facility’s value from the employee’s wage FACTS: Respondents Alexander Parian et. in line with Article 97(f) of the Labor Code. In determining the total amount of the respondents’ daily wages. Since Macasio cannot be considered a “field personnel. 851 enumerates the exemptions from the coverage of 13th month pay benefits.To determine the existence of an employer-employee relationship. Parian et al. LA did not give merit on the laborers’ contention that that the value of their meals should not be considered in determining their wages’ total amount since the requirements set under Section 413 of DOLE Memorandum Circular No.. (3) the power of dismissal. Our Haus Realty Development Corp.” ISSUE: (1) Whether or not a worker paid in "pakyaw" basis is entitled to holiday pay and Service? (2) Whether or not A worker engaged in "pakyaw" basis is entitled to 13th month pay? HELD: (1) YES. 7. whether one of employment or independent contractorship. SIL pay even as he was engaged on “pakyaw” or task basis. They also claimed that Our Haus failed to pay them their holiday. 204651. an employee must be one of those expressly enumerated to be exempted.e. The respondents were among those who were affected who were asked to take vacation leaves. In determining whether workers engaged on “pakyaw” or task basis is entitled to holiday and Service Incentive Leave (SIL) pay. Macasio’s relationship with David satisfies this test. August 6. David confuses engagement on “pakyaw” or task basis with the lack of employment relationship.likewise a “field personnel. David supervised his time and performance of duties. namely: (1) the selection and engagement of the employee.” The CA’s finding in this regard is supported by the established facts of this case: first. his actual hours of work could be determined with reasonable certainty. the petitioner company experienced financial distress and had to suspend some of its construction projects to alleviate its condition. GR No.The payment of an employee on task or pakyaw basis alone is insufficient to exclude one from the coverage of Service Incentive Leave (SIL) and holiday pay. as opposed to straight-hour wage payment. and (4) the power to control the employee’s conduct. a company engaged in the construction business. is the non-consideration of the time spent in working. and those who are paid a fixed amount for performing a specific work. second. David asserts that their “pakyawan” or task basis arrangement negates the existence of employment relationship. A distinguishing characteristic of “pakyaw” or task basis engagement.” then he is not exempted from the grant of holiday. the law did not intend to qualify the exemption from its coverage with the requirement that the task worker be a “field personnel” at the same time. these laborers were asked to report back to work but instead of doing so. “employers of those who are paid on task basis. the value of these benefits should be considered. (2) the payment of wages. Section 3 of the Rules and Regulations Implementing P. With respect to the payment of 13th month pay however. Note that unlike the IRR of the Labor Code on holiday and SIL pay. 215 were not complied with. Under said law. (2) NO.. 13th month and overtime pays. and gave them free lodging near the construction project they were assigned to. Our Haus also subsidized their meals (3 times a day). i. 13th month pay benefits generally cover all employees. Besides.” This could only mean that insofar as payment of the 13th month pay is concerned. LA: ruled in favor of Our Haus who claimed that the respondents’ wages complied with the law’s minimum requirement because aside from paying the monetary amount of the respondents’ wages. Eventually.D. The governing law on 13th month pay is PD 8 5 1. Service Incentive Leave (SIL). These elements or indicators comprise the so-called “four-fold” test of employment relationship. the presence (or absence) of employer supervision as regards the worker’s time and performance is the key. Engagement on “pakyaw” or task basis does not characterize the relationship that may exist between the parties.

It DENY this petition and AFFIRMED CA’s decision. real or personal. Yes.000 regardless of any claim for reinstatement except those claims for employee compensation. vs. The issue arose when respondent Solid Mills declared that they will cease business operations due to serious business losses of which. petitioners were properly informed.present any proof that they agreed in writing to the inclusion of their meals’ value in their wages. the act of Solid Mills falls within a clearance procedure which is a procedure instituted to ensure that the properties. A right to possess a property granted by employer to an employee by virtue of the former’s liberality is not an employment benefit but is rather considered a debt creating an obligation to return possession of such property back to the employer. which can be a ground for the employer to withhold wages and benefits due to the employees pending its return. 2010. 8. are returned to the employer before the employee's departure is standard procedure among employers and is allowed under our laws as a valid exercise for withholding of wages by virtue of a debt due. Medicare and Maternity benefits. the Court held that NLRC did not commit grave abuse of discretion in its rulings. Solid Mills. are returned to the employer before the employee's departure. NLRC has jurisdiction. Moreover. Hence. several employees were allowed by Solid Mills to occupy SMI village which was a property owned by Solid Mills. Facts: Petitioners consist of several employees of respondent corporation. They were represented by their collective bargaining agent which was the National Federation of Labor Unions. Issues: 1. Petitioners are among those who refused to vacate and who did not sign the agreement and instead demanded their benefits and pay. the same cannot be credited and further ruled that they are entitled to their respective proportionate 13th month payments for the year 2010 and SIL payments for at least three years. Yes. One of the agreements in the employment was that Solid Mills will grant “by way of goodwill and in the spirit of generosity” financial assistance less accountabilities to members of the union. 116 and Art. February 4. The claims is not only limited to claims by an employee but includes claims by an employer against its employee. 2015 Concept: Claims arising from employer-employee relationship falling within the jurisdiction of NLRC is not only limited to claims by an employee against the employer but also claims of an employer against the employee. Herein petitioner’s argument is a vain attempt to circumvent the minimum wage law by trying to create a distinction where none exists because in reality. 202961. Under Art. Petitioners argued that Solid Mills cannot legally withhold their benefits because its payment is based on company policy and practice and that their possession of the SMI property should not be considered within the meaning of “accountabilities” in their agreement. the NLRC has jurisdiction over claims arising from employer-employee relationship with an amount exceeding 5. While under Art. Thus. NLRC and CA ruled in favor of Solid Mills. immediately preceding May 31. 217 (6) of the Labor Code. There is no substantial distinction between deducting and charging a facility’s value from the employee’s wage. Whether or not the withholding of the benefits and separation pay was proper. such jurisdiction covers rights over a property when it is sufficiently connected to the labor issue such that it is necessary to determine an issue related to rights or claims arising from an employer-employee relationship. they were justified in withholding the benefits and separation pay. Jurisdiction of NLRC covers property rights as long as it is necessary to determine an issue related to rights or claims arising from an employer-employee relationship and is connected to the labor issue. Art. Employees were then made to sign a memorandum of agreement to effect that vacating the SMI Village is a pre-condition for the release of their termination benefits and leave pay. Labor Arbiter ruled in favor of petitioners ruling that there was illegal withholding of wages. 2. However. Milan et al. NLRC: Reversed the decision of LA. Social Security. the employees received notices to vacate SMI Village. it maintains LA’s decision that they are not entitled to overtime pay since the exact dates and times when they rendered overtime work had not been proven. apply to both. In consequence of this. the date when the respondents left Our Haus. Thus. Whether or not NLRC has jurisdiction. real or personal.. 113 (3) of the labor code allows an employer to deduct when such employer is authorized by law or regulations issued by the Secretary of Labor and Employment. CA: affirmed the NLRC rulings finding that there is no distinction between deduction and charging and that the legal requirements before any deduction or charging can be made. 100 of the labor code. withholding of wages and diminution of wages is prohibited. Here. by the employee in favor of the employer when the employer decides to withdraw such. belonging to the employer but are in the possession of the separated employee. ISSUE: Whether or not the laborers are entitled to their respective proportionate 13th month payments for the year 2010 and SIL payments for at least three years? HELD: YES. Ruling: 1. A clearance procedure which is a procedure instituted to ensure that the properties. the legal requirements for creditability apply to both. that is due. Clearance procedure 33 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Through such agreement. ruling that Solid Mills’ act of letting employees dwell in SMI Village was merely an act of liberality on its part which can be revoked at any time at its discretion. belonging to the employer but are in the possession of the separated employee. withholding was proper. deduction and charging both operate to lessen the actual take- home pay of an employee. NLRC GR No. 2. It ruled that that the laborers did not authorize Our Haus in writing to charge the values of their board and lodging to their wages.

248. and according to respondent. Art. The claims of commissions.248. Manalo. The said jurisdiction is not affected by the amount of claim involved pursuant to RA 7730. It is employer who has the burden of proof of payment even in cases where the employee alleges non-payment rather than the employee having the burden of proving non-payment. 9. Issue: 1. Yes. tax rebates. Toyota Pasig Inc vs. whether ascertained on a time. since petitioner failed to overcome the burden. the Director of Regional Office No. Here. Under Art. thus the withholding of the wages and benefits was proper. and success share/profit sharing. She also suffered the same fate. the claims will not be discarded. who was also an employee of petitioner. she was preventively suspended and was later terminated upon her receipt of the notice of termination. Under law. Hence. were later dismissed from service. 213488. Respondent then filed a case claiming payment of her earned substantial commissions. Abay et al.08 of respondent. piece. organized a collective bargaining unit the members of which. 2. The case was then set for summary hearing. 1706 of the new civil code allows withholding of wages for a debt due. 97 (f) of the labor code. Issue came when her husband. She was initially hired as a cashier and attained the position of Insurance sales executive due to her excellence in the work as was shown when she was awarded Best Sales Insurance Executive from 2007 to 2011. Here.00) as provided 34 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Feb.000. 2002 stating that this case falls under the original and exclusive jurisdiction of the National Labor Relations Commission (NLRC) on the ground that the aggregate money claim of each worker exceeds the jurisdictional amount of the Office which is Five Thousand Pesos Only (P5. FACTS: An inspection was conducted by DOLE officials at the premises of petitioner Tiger Construction and Development Corporation (TCDC) based on a complaint filed by respondents Reynaldo Abay and fifty-nine (59) others before the Regional Office of the DOLE. respondent’s claims fall within the definition of “wages”. Tiger Construction and Development Corp vs. No. V. Facts: Respondent was an employee of petitioner corporation. 97(f) of the labor code. “wage paid to an employee shall mean the remuneration of earnings. NLRC and CA agreed with LA that respondent is guilty of the accusations but it ordered petitioner to pay the claim of P617. Here. task. the term ‘accountabilities’ was construed in its ordinary sense which is essentially a debt or obligation.WAGE ENFORCEMENT AND RECOVERY CASES: 1. Glenda A. 5. the claims will not be discarded just because respondent was not able to produce supporting documents. the return of the property became an obligation on the part of petitioners when the employer-employee relationship ceased. 164141. or commission basis”. Since Solid Mills’ act of allowing petitioners to dwell in SMI Village was merely an act of liberality on its part. the property can be demanded back at its will. Whether or not the claims will be discarded for failure of respondent to substantiate such claims. have jurisdiction over labor standards violations based on findings made in the course of inspection of an employer's premises. she was then accused of fraud in the processing of several insurance transactions in that she claimed commissions in those transactions instead of considering such under the marketing department’s new business accounts. Ma. GR No. Nov 7. the petitioner did not allege payment of the claims or at least allege that respondent is not entitled to such claims. capable of being expressed in terms of money. Before the hearing could take place. GR No. once an employee alleges non-payment of specific claims in his/her complaint with particularity. are given to respondent as incentives or forms of encouragement in order for her to put extra effort in performing her duties as an insurance sales executive are included in the term “commission” which falls within the definition of “wages” under Art. it is still the employer who has to prove payment rather than the employee to prove non-payment. however designated. is a standard procedure among employers and is allowed under our laws. This is for the reason that the nature of the work of a salesman is to stimulate growth in sales which can be achieved by encouraging such employees to put more effort in their jobs through commissions. As long as accountabilities are incurred because of employer-employee relationship. issued an Order on July 25. Hence. Petitioner in defense. amounting to P617. tax rebates for achieved monthly targets. Whether or not the claims of respondent is included in the definition of “wages” in the labor code. 2. 26. commissions are indubitably included in a sales employee’s wages. Several labor standard violations were noted. instead it merely required petitioner to pay the unpaid salary.08. Ruling: 1. With this. Labor Arbiter found respondent liable for the accusations against her and did not order the payment of the benefits claimed by respondent. 2016 Concept: Commissions are included in the definition of wages. as such was included in the term accountabilities. contended that respondent was terminated with just cause and that the claims she is asking are unfounded and unsupported by documents and that such claims do not partake of unpaid wages/salaries. the regional directors. the one who pleads payment has the burden of proving it and even if the employee alleges non-payment. De Peralta.. it can be a subject of a clearance procedure. 2010 CONCEPT: The DOLE Secretary and her representatives. Moreover. including her husband. and other benefits dating back from July 2011 to January 2012.

TCDC did not interpose an appeal within the prescribed period. thus divesting itself of jurisdiction over the case. or it appears. 2002 Order endorsing the case to the NLRC. Director Manalo issued an Order directing TCDC to pay P2. and private respondent failed to prove the existence of an employer-employee relationship. Director Manalo finally issued an Order dated January 29. that no employer-employee relationship existed in the first place. for illegal deduction. 15 the DOLE Secretary and her representatives. 2003 Order of Director Manalo allegedly on the ground of lack of jurisdiction. The DOLE had no jurisdiction over the case. CA dismissed the petition on the ground that it had been given the opportunity to be heard. It becomes apparent that petitioner is merely using the alleged lack of jurisdiction in a belated attempt to reverse or modify an order or judgment that had already become final and executory. Sec.. Petition is denied. are concerned. If the DOLE finds that there is no employer- employee relationship. People’s Broadcasting (Bombo Radyo Phils) vs. 35 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . the case was set for summary hearing on August 19. Director Manalo's initial endorsement of the case to the NLRC. 2012 Resolution on the main Decision of May 8. 2002. have jurisdiction over labor standards violations based on findings made in the course of inspection of an employer's premises. the DOLE is fully empowered to make a determination as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power. The Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC. VII. Tomas issued another inspection authority in the same case. the DOLE exercises jurisdiction to the exclusion of the NLRC. did not oust or deprive her of jurisdiction over the case. upon review. Tomas issued an Order and held that jurisdiction over the case properly belongs with the regional director. Director Manalo's endorsement to the NLRC was a clear error. FACTS: Jandeleon Juezan filed a complaint against petitioner with the DOLE Regional Office No. as amended by Republic Act (RA) No. Such mistakes of its agents cannot bind the State. In this case the findings of the Regional Director were not based on substantial evidence. She therefore retained the jurisdiction to decide the case when it was eventually returned to her office by the DOLE Secretary. after said Order has attained finality and is already in the execution stage. premium pay for holiday and rest day and illegal diminution of benefits. Sto.235.under Article 217 of the Labor Code of the Philippines. as RA 7730 had effectively removed the jurisdictional limitations found in Articles 129 and 217 of the Labor Code insofar as inspection cases. Cebu City. TCDC filed a Motion for Reconsideration and a Supplemental Pleading to the Motion for Reconsideration reiterating the argument that Director Manalo had lost jurisdiction over the matter. The DOLE Regional Director found that private respondent was an employee of petitioner. may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court. 179652.90 to its employees representing underpayment of salaries. ISSUE: May the DOLE make a determination of whether or not an employer-employee relationship exists. the regional directors. the jurisdiction is properly with the NLRC. 13th month pay. 7730. Convinced by the petitioner’s contention.123. subject to judicial review. The NLRC returned the entire records of the case to Director Manalo on the ground that the NLRC does not have jurisdiction over the complaint. it cannot be co-extensive to its visitorial and enforcement power. of DOLE et al. thus Director Manalo was not prevented from continuing to exercise jurisdiction over the case. and was entitled to his money claims. Director Manalo issued a Writ of Execution. as amended by RA 7730. nonpayment of service incentive leave. However. 2. ISSUE: Whether or not petitioner can still assail the January 29. RULING: Under Article 128 (b) of the Labor Code. DOLE Secretary Patricia A. The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated. as there was no employer-employee relationship present. pursuant to the visitorial and enforcement powers of the DOLE Secretary. where petitioner claimed that it had been denied due process. The said jurisdiction is not affected by the amount of claim involved. however. but failed on the ground that petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond. hence. CA dismissed the petition for certiorari and denied the motion for reconsideration. to the exclusion of the NLRC. Director Manalo again endorsed the case to the NLRC Regional Arbitration Branch V (Legaspi City). not review by the NLRC. They issued a Notice of Inspection Results to petitioner directing it to rectify the violations within five days from notice. The matter was brought before the CA. on the mistaken opinion that the claim was within the latter's jurisdiction. TCDC filed an admittedly belated appeal with the DOLE Secretary saying that Director Manalo's actions concerning the case are null and void for having been issued without jurisdiction. 2009 CONCEPT: If a complaint is brought before the DOLE and there is a finding by the DOLE that there is an existing employer- employee relationship. GR No. Having the case in her office once more. 128 (b) of the Labor Code. 2003 denying petitioner's motion for reconsideration for lack of merit. DOLE officials conducted another investigation of petitioner's premises and the same violations were discovered. and underpayment of service incentive leave pay and regular holiday pay. Furthermore. delayed payment of wages and noncoverage of SSS. to what extent? RULING: Under Art. PAG-IBIG and Philhealth. it takes cognizance of the matter. Petitioner allegedly questioned the inspector's findings and argued that the proceedings before the regional office had been rendered moot by the issuance of the July 25. thus. the DOLE may well make the determination that no employer-employee relationship exists. and if so. If the DOLE makes a finding that there is an existing employer-employee relationship. March 6. Secretary Sto. The findings of the DOLE. and that the DOLE Secretary had jurisdiction over the matter. that any finding by the DOLE is merely preliminary. Petitioner sought reconsideration of the Director's Order. 13th month pay. For failure to comply with the directive.

Diaz. 2012 CONCEPT: The DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an employer-employee relationship. Later that afternoon. Cesar Luz (Luz). The DOLE.R. In addition to the above-mentioned responsibilities. incidental and collateral to the DOLE's primary function of enforcing labor standards provisions. however. is the treasurer and one of the board directors. among others. with the modification in that Luz was absolved of any personal liability under the award.. however. October 10. Inc. Petitioner Hartmannshenn. Petitioner Schumacher. for underpayment of wages. Balagsay et al. in which capacity he determines the administration and direction of the day-to-day business affairs of SHS. As such. 2005 to January 18. As to respondents work. The petitioner also refutes respondents' alleged belated argument that the latter are its employees. he and the respondent held meetings. Thus. however. during meetings with the respondent. In addition. RULING: The DOLE clearly acted within its authority when it determined the existence of an employer-employee relationship between the petitioner and respondents as it falls within the purview of its visitorial and enforcement power under Article 128 (b) of the Labor Code as amended by RA 7730. ISSUE: Whether or not DOLE has the authority to make a finding of an employer-employee relationship concomitant to its visitorial and enforcement power. is merely preliminary. Respondent Diaz was hired by petitioner SHS as Manager for Business Development on probationary status from July 18.000. considering that it is beyond the visitorial and enforcement power of the DOLE to make such conclusion. with a monthly salary of P100. The petitioner therefore. The next day. 6. is its president. Superior Packaging Corp. GR No. payrolls. Such determination. During respondents employment. which involves the manufacture and sale of commercial and industrial corrugated boxes. respondent was also instructed by Hartmannshenn to report to the SHS office and plant at least two (2) days every work week to observe technical processes involved in the manufacturing of perforated materials. Respondent allegedly failed to make any concrete business proposal or implement any specific measure to improve the productivity of the SHS office. Taguiang informed him that it was being withheld and that he had to immediately communicate with Hartmannshenn. 2010 FACTS: SHS is a start-up corporation organized and existing under the Philippines and registered with the PEZA. vs. respondent was said not to have returned Hartmannshenn's calls and e-mails. Both entities have an arrangement where ECCP handles the payroll requirements of SHS to simplify business operations and minimize operational expenses. In addition. CA affirmed the Secretary of DOLE's orders. the DOLE is fully empowered to make a determination as to the existence of an employer- employee relationship in the exercise of its visitorial and enforcement power.3. No. perform all functions. his instructions to respondent were either sent by electronic mail or relayed through telephone or mobile phone. and to learn about the products of the company. non-payment of premium pay for worked rest.. is merely preliminary. to which Diaz denied. 178909. However. 36 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . such conclusion may be made only upon consideration of evidentiary matters and cannot be determined solely through a labor inspection. et al. Inc. citing illegal and unfair labor practices. not review by the NLRC. incidental and collateral to the DOLE's primary function of enforcing labor standards provisions. He was tasked to perform sales/marketing functions. 185814. Such determination.) v. subject to judicial review. Pursuant to a complaint filed by the respondents against the petitioner and its President. The petition for review is denied. SHS Perforated Materials.. a German national. When he would be in the Philippines. through its Accounting Services Department headed by Taguiang. A finding that a contractor is a "labor-only" contractor is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor. respondent called and inquired about his salary. are solidarily liable for respondents' unpaid money claims. Secretary of the Department of Labor and Employment. According to the petitioner. because of business exigencies. Their appeal to the Secretary of DOLE was dismissed. The petitioner is now before the Court on petition for review under Rule 45 of the Rules of Court assailing among others the finding that it is engaged in labor-only contracting and is consequently an indirect employer. represent the company in its events. also a German national. the Department of Labor and Employment (DOLE) conducted an inspection of the petitioner's premises and found several violations. 2006. duties and responsibilities to be assigned by the employer in due course. vs. and other just debts of SHS of whatever nature upon maturity. Hartmannshenn instructed Taguiang not to release respondents salary. Hartmannshenn expressed his dissatisfaction over respondents poor performance. FACTS: The petitioner engaged the services of Lancer to provide reliever services to its business. G. the wages of SHS employees are paid out by ECCP.WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING WAGES CASES: 1. They filed a motion for reconsideration on the ground that respondents are not its employees but of Lancer and that they pay Lancer in lump sum for the services rendered. respondent served on SHS a demand letter and a resignation letter.00. overtime pay and non-payment of salary. Oct. being the principal employer and Lancer. being the labor-only contractor. the court cited the case of People's Broadcasting (Bombo Radyo Phils. he is authorized to pay all bills. Schumacher is also the EVP of the European Chamber of Commerce of the Philippines (ECCP) which is a separate entity from SHS. Hartmannshenn was often abroad and.. stating that it can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an employer-employee relationship. which respondent was hired to market and sell. 13. denied its motion in its Resolution. there was no close supervision by him.

Inc. such as the freedom to prescribe work assignments. G. and (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor. entitled to reinstatement without loss of seniority rights and other privileges as well as to full back wages. THE RULING OF THE COURT OF APPEALS . – No employer.judgment is hereby rendered declaring complainant as having been illegally dismissed and further ordering his immediate reinstatement without loss of seniority rights and benefits. No. requiring them to post cash bonds or deposits in varying amounts but in no case exceeding 15% of the latter's salaries per week. and the deduction is to recompense the employer for the amount paid by him as premium on the insurance. thus." it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. Withholding of wages and kickbacks prohibited. The respondents claimed otherwise insisting that petitioner left the goldsmiths with no option but to post the deposits. Any withholding of an employee’s wages by an employer may only be allowed in the form of wage deductions under the circumstances provided in Article 113 of the Labor Code. 2. 2011 Facts: Respondents were employed as goldsmiths by the petitioner Niña Jewelry Manufacturing of Metal Arts. except: (a) In cases where the worker is insured with his consent by the employer. Montecillo. but to sign authorizations allowing the former to deduct from the latter's salaries amounts not exceeding 15% of their take home pay should it be found that they lost the gold entrusted to them."12 Although management prerogative refers to "the right to regulate all aspects of employment. Management prerogative refers "to the right of an employer to regulate all aspects of employment. and other benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual reinstatement. Respondent.29 Respondent is. in his own behalf or in behalf of any person. however. November 28. To sanction such an interpretation would be contrary to Article 116 of the Labor Code. agrees with the LA and the CA that respondent was forced to resign and was. The additional amount for 13th month pay is deleted We disagree with petitioners. Held: THE RULING OF THE LABOR ARBITER . which provides: ART. 116. – It shall be unlawful for any person. (b) For union dues. as set forth below: ART. in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned. 113. however.The CA reversed the NLRC THE RULING OF THE SUPREME COURT – AFFIRMED CA WITH MODIFICATION.R. regulation regarding transfer of employees. 188169. and dismissal and recall of work. working methods. 37 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . vs. as it is clearly provided in respondent’s Probationary Contract of Employment that such is deemed included in his salary. Nina Jewelry Manufacturing of Metal Arts Inc. is not entitled to the additional amount for 13th month pay. The deposits shall be returned upon completion of the gold smiths' work and after an accounting of the gold received. There were incidents of theft involving goldsmiths in Niña Jewelry's employ. The respondents alleged that they were constructively dismissed by the petitioner as their continued employments were made dependent on their readiness to post the required deposits. constructively dismissed This Court has held that probationary employees who are unjustly dismissed during the probationary period are entitled to reinstatement and payment of full back wages and other benefits and privileges from the time they were dismissed up to their actual reinstatement. The next day after the policy was imposed. The petitioner alleged that the goldsmiths were given the option not to post deposits. It is also ordered that complainant be deemed as a regular employee. *WON respondent voluntarily resigned. lay-off and discipline.Issue: * WON the temporary withholding of respondents salary/wages by petitioners was a valid exercise of management prerogative. THE RULING OF THE NLRC . intimidation. the withholding thereof is thus unlawful. which were intended to answer for any loss or damage which Niña Jewelry may sustain by reason of the goldsmiths' fault or negligence in handling the gold entrusted to them. supervision of their work. the respondents no longer reported for work and signified their defiance against the new policy which at that point had not even been implemented yet. The petitioner imposed a policy for goldsmiths. As correctly pointed out by the LA.On appeal. inclusive of allowances. the NLRC reversed the decision of the LA."13 The Court. thus. stealth. to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force. "absent a showing that the withholding of complainant’s wages falls under the exceptions provided in Article 113. directly or indirectly. threat or by any other means whatsoever without the worker’s consent. processes to be followed. Wage Deduction. shall make any deduction from the wages of his employees.

unreasonable or unlikely. As attested to by the respondents' fellow goldsmiths in their Joint Affidavit. or is necessary or desirable as determined by the Secretary of Labor in appropriate rules and regulations. shall make any deduction from the wages of his employees. the respondents just promptly stopped reporting for work 3. This was appealed to the NLRC. Deposits for loss or damage — No employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools. Instead of airing their concerns. The petitioners failed to prove that their imposition of the new policy upon the goldsmiths under Niña Jewelry's employ falls under the exceptions specified in Articles 113 and 114 of the Labor Code. the Niña Jewelry may not impose the policy. if not unjust enrichment would occur since the vehicle was still in the possession of Mekeni. or equipment supplied by the employer. the company replied that said car benefit only applies to those employees who rendered service for a total of 5 yrs. Article 114. 113. occupations or business where the practice of making deposits is a recognized one. Recovery by Locsin of the purchase price of the vehicle would lead to unjust enrichment. Constructive dismissal occurs when there is c e s s a t i o n o f w o r k b e c a u s e c o n t i n u e d e m p l o y m e n t i s r e n d e r e d i m p o s s i b l e . NLRC: NLRC reversed the decision and ordered Mekeni to pay the unpaid compensation and benefits. On February 2004 Locsin resigned and by that time a total of one hundred twelve thousand and five hundred pesos has already been deducted from his monthly salary and was applied as the employees share for the car plan. Court of Appeals. CA justified the said decision stating that said payments by Locsin are to be treated as rentals since there was no stipulation stating otherwise applying the Elisco Tool Manufacturing Corporation v. ordering respondent Mekeni to turnover the disputed vehicle upon the payment of one hundred thousand pesos and four hundred thirty-five pesos and eighty four centavos. 192105. as well as the amortization payments on the service vehicle. Mekeni furnished a Honda civic worth Two-hundred eighty thousand pesos. except when the employer is engaged in such trades. LABOR ARBITER: Decision was rendered in favor of the complainant Locsin. 2) There is NO constructive dismissal. Subsequently Locsin made personal and written follow-ups for the unpaidm salaries and commissions. attorney's fees and 13th month pay. Mekeni is also ordered to pay the employee’s part in the car plan since it would form part of the benefits of the said employee. this was in addition to the benefits and compensation.. in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned. insensibility. Articles 113 and 114 of the Labor Code are clear as to what are the exceptions to the general prohibition against requiring deposits and effecting deductions from the employees' salaries. but upon negotiation the parties have not reached any compromis which led to the return of the car by Locsin to the company on May of 2006. in his own behalf or in behalf of any person. The petitioners did not whimsically or arbitrarily impose the policy to post cash bonds or make deductions from the workers' salaries. and 2) WON there is constructive dismissal. Respondent Mekeni food corporation hired Petitioner Antonio Locsin II as the Regional Sales Manager in Makeni’s National Capital Region Supermarket and South Luzon operations. The 50% of the said car plan was to be paid by Mekeni and the other 50% is to be paid by Locsin through salary deduction of Five thousand pesos each month. Garcia. or when a clear discrimination. Wage Deduction — No employer. when there is a demotion in rank or diminution in pay or both. or regulations issued by the Secretary of Labor. or disdain by an employer becomes unbearable to the employee. GR No. Mekeni Food Corp. and later filed their amended complaint which excluded their earlier prayer for separation pay but sought reinstatement and payment of back wages. Issues: 1) WON Niña Jewelry Manufacturing of Metal Arts. and c)(c)In cases where the employer is authorized by law or regulations issued by the Secretary of Labor. ART. benefits and offer to purchase the service vehicle. December 9. However. 2013 Facts: March 2004. The petitioners should first establish that the making of deductions from the salaries is authorized by law.The respondents then filed a complaint for illegal dismissal and for the award of separation pay against the petitioner. materials. Court of Appeals The Court of Appeals modified the NLRC decision and deleted the portion wherein Mekeni is ordered to reimburse Locsin’s payment under the car plan and all other else are affirmed. except: a) (a)In cases where the worker is insured with his consent by the employer. Upon said resignation Locsin offered that he be allowed to purchase the said service vehicle by paying the outstanding balance thereon. and the deduction is to recompense the employer for the amount paid by him as premium on the insurance. Inc. Issue: 38 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . b) (b)For union dues. may impose the policy for their goldsmiths requiring them to post cash bonds or deposits. This prompted the petitioner to file a case against Mekeni and/or it’s President Prudencio S. Locsin II vs. Held: 1) NO. the workers were convened and informed of the reason behind the implementation of the new policy.

Under Article 22 of the Civil Code. On the evening of the field trip a sales officer of petitioners campaigned against the union in the forthcoming certification election. vs.. Issue: Whether or not Unfair Labor Practice was committed by petitioners against respondents. a quasi-contractual relation was created between them. In their desire to improve the working conditions. The next day seventeen employees were barred to enter the the petitioner’s factory premises and was ordered to transfer to another T&H warehouse because of its expansion. 4. Which prompted herein respondents to seek the assistance of the National Conciliation and Mediation Board wherein they were able to arrive into a certain compromise. acquires or comes into possession of something at the expense of the latter without just or legal ground. the votes for “no union” prevailed. the vehicle did not fully benefited the employee but it was more beneficial on the part of the employer. voluntary and unilateral acts which give rise to the juridical relation of quasi-contract. petitioners sponsored a field trip for its employees.. Supreme Court: Supreme Court decided in the affirmative that said company committed ULP against the respondents. NLRC: Reversed and ruled in favor of respondents. Second point. bu t even after such filing . Theruling involves an agreement wherein it was stipulated that said payments would constitute as rentals but in the present. Subsequently. warning of employees of dire consequences should the union prevail and escorting them to the polling center) and discriminating in regard to conditions of employment in order to discourage union membership (assigning union officers and active union members as grass cutters on rotation basis). the union filed a petition for certification election. save when the employer itself has to filethe petition. Free disposal of such vehicle is only given after the full payment. Mekeni may not enrich itself by charging petitioner for the use of the vehicle which was absolutely necessary to the full and effective promotion of its business. This prompted herein respondent union to file its protest with respect to the certification election proceedings. The following day. TH Shopfitters Corp. 2014 Doctrine: A certification election is the sole concern of the workers. A day before the scheduled election. clearly it was Mekeni who was reaping the full benefits in the use thereof. “every person who through an act of performance by another. shall return the same to him. Facts: On September 7.” Article 2142 of the same Code likewise clarifies that there are certain lawful. one cannot find any other stipulation stating that if petitioner failed to completely cover one-half of the cost of the vehicle then all the deductions will be treated as rentals. but respondents alleged that petitioners never complied with their agreement. T&H Shopfitters Corp. 2004 herein respondents T&H Shopfitters Union filed a complaint for Unfail Labor Practice by way of Union Busting and Illegal Lockout against herein petitioner T&H Shopfitters Corp before the Labor Arbiter. et al. An order was issued to hold the certification elections in both T&H Shopfitters and Gin Queen. Court of Appeals: Dismissed the appeal and affirmed the decision of NLRC. Held: The reliance of the Court of Appeals in the Elisco tools ruling is of no avail. Any benefit or privilege enjoyed by the petitioner while using the said car was merely incidental since it was under Mekeni’s control and supervision. 191714. to the end that no one shall be unjustly enriched or benefited at the expense of another. In their contention respondents stated that the affected employees were not given regular work assignments.. petition is GRANTED IN PART. Afterwards the said seventeen employees were repeatedly ordered to go on forced leave due to inavailability of work. Stating that said respondents (herein petitioner) committed Unfair Labor Practices acts consisting in interfering with the exercise of the employees’ right to self. Labor Arbiter: Dismissed respondent Union’s complaint and all their money claims due to lack of merit. Union. Due to the heavy pressure exerted by petitioners. To point out the said car was used and has clearly depreciated. Feb 26. while subcontractors were continuously hired to perform their functions. The officers and members of the T&H Union were purportedly excluded from the said trip. The petitioners are 39 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .organization (specifically. Whether or Not the petitioner is entitled for the reimbursement of the amounts paid to purchase the said service vehicle under the car plan. Thus. Petitioner cannot also recover the other half paid by Mekeni as it will also lead to unjust enrichment since it was not part of his compensation package. respondents and other employees of the petitioner held their first formal meeting. through the sponsored field trip on the day preceding the certification election. GR No. the employees were escorted from the field trip to the polling center in Zambales to cast their votes. its rol e in the certification proc ess ceases and became s merely a bystander. or any other means. In the absence of specific terms and conditions governing the car plan arrangement between the petitioner and Mekeni. The said vehicle was material for the petitioner to cover the vast sales territory assigned to him and sales or marketing of Mekeni’s products could not have been booked or made fast enought ot move Mekeni’s inventory.

Issue: Whether the petitioner's unilateral acts violated the rule on non-diminution of benefits. applies only if the benefit is based on an express policy. which was unacceptable to respondent. Ruling: Yes. While petitioner contends that such practice is illegal or unauthorized and that the benefits were erroneously given by the previous administration. to the exclusion of union members. An exception to the rule is when the practice is due to error in the construction or application of a doubtful or difficult question of law. 5) assigning union members to the Cabangan site to work as grass cutters. hours of work. The parties signed a 5- year CBA effective June 1. it must be consistently and deliberately made by the employer over a long period of time. Petitioners have no business persuading and/or assisting its employees in their legally protected independent process of selecting their exclusive bargaining representative. Petitioner cannot..13 to wit: Article 257. must be corrected immediately after its discovery. Court of Appeals. Insular Life Co. the literal meaning of the stipulation shall govem. The error. eliminate the two-retirement policy and implement a one-retirement policy as this would violate the rule on non- diminution of benefits.being accused of violations of paragraphs (a). Besides.The one-retirement policy and the Memorandum are contrary to law. and (e) of Article 257 (formerly Article 248) of the Labor Code. 4) the continuous hiring of subcontractors performing respondents’ functions.Affirmed the nullification of the one-retirement policy and the Memorandum. Unfair labor practices of employers. Wherefore the decision of the Court of Appeals is AFFIRMED. There is nothing in the CBA to indicate or even suggest that the "Plan" referred to in the CBA is the PERAA Plan. or coerce employees in the exercise of their right to self-organization. In the case. one from the Private Education Retirement Annuity Association (PERAA) Plan and another from the CBA Retirement Plan. such were all orchestrated to restrict respondents’ free exercise of their right to self-organization. it should be resolved in favor of labor. as this is mandated by no less 40 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Wesleyan University-Phils. however. restrain. non-profit educational institution duly organized and existing under the laws of the Philippines while respondent WUP Faculty and Staff Association is a duly registered labor organization acting as the sole and exclusive bargaining agent of all rank-and-file faculty and staff employees of petitioner. it may reasonably be said. Moreover. reasonably support an inference that. Unilateral changes or suspensions in the implementation of the provisions of the CBA cannot be allowed without the consent of both parties. not later than August 30 of each year.—It shall be unlawful for an employer to commit any of the following unfair labor practices: (a) To interfere with. To be considered a practice. namely: 1) sponsoring a field trip to Zambales for its employees.. However.that is. the rule on Non-Diminution of Benefits would still apply.. all unused vacation leave shall be converted to cash and paid to the employee at the end of each school year. The questioned acts of petitioners. . Article 100 of the Labor Code explicitly prohibits employers from eliminating or reducing the benefits received by their employees. indeed. When the provision of the CBA is clear. any doubt in the interpretation of the provisions of the CBA should be resolved in favor of respondent. The CBA Retirement Plan and the PERAA Plan are not the same. The Memorandum. 3) escorting its employees after the field trip to the polling centre. without the consent of respondent. This rule. But respondent is not amenable to the unilateral changes made by petitioner because the guidelines are violative of existing practices and the CBA. xxxx (e) To discriminate in regard to wages. xxxx © To contract out services or functions being performed by union members when such will interfere with. a written contract. 181806. vs. Facts: Petitioner Wesleyan University-Philippines (WUP) is a non-stock. 2) the active campaign by the sales officer of petitioners against the union prevailing as a bargaining agent during the field trip. The two- retirement policy is a practice. Ltd. restrain or coerce employees in the exercise of their right to self-organization. states that vacation and sick leave credits are not automatic as leave credits would be earned on a month-to-month basis. Voluntary Arbitrator. otherwise. the practice of giving two retirement benefits to petitioner’s employees is supported by substantial evidence. tends to interfere with the free exercise of the employees’ rights. before the scheduled certification election. GR No. however. x x x The test of whether an employer has interfered with and coerced employees in the exercise of their right to self organization was laid down in the case of Insular Life Assurance Co. no evidence was presented by petitioner to substantiate its allegations. if there is doubt in its interpretation.. 2014 Doctrine: A Collective Bargaining Agreement is a contract entered into by an employer and a legitimate labor organization concerning the terms and conditions of employment. or has ripened into a practice. 2008. and 6) the enforcement of work on a rotational basis for union members. 5. and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Wesleyan University-Phils. Petitioner also announced its plan of implementing a one-retirement policy. and that it is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by statements of threats of the employer if there is reasonable inference that anti-union conduct of the employer does have an adverse effect on self organization and collective bargaining. (c). March 12. Respondent argued that there is an established practice of giving two retirement benefits. 2003 until May 31. whether the employer has engaged in conduct which. the Memorandum issued imposes a limitation not agreed upon by the parties nor stated in the CBA. Faculty & Staff Asso. The CBA provides that all covered employees are entitled to 15 days sick leave and 15 days vacation leave with pay every year and that after the second year of service. Petitioner issued a Memorandum providing guidelines on the implementation of vacation and sick leave credits as well as vacation leave commutation. taken together. leaving no doubt on the intention of the parties. however. ltd Employees Association – NATU vs.

illegal suspension. it is not the job title but the actual work that the employee performs that determines whether he or she occupies a position of trust and confidence. Ruling: (1) No. (c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage. 7. She did so. The acts committed by the respondent do not amount to a wilful breach of trust. out of curiosity and without any obvious intention of defrauding the petitioner. in his own behalf or in behalf of any person. Netlink Computer Inc. Respondent was given her final pay. The Omnibus Rules Implementing the Labor Code. No. In her explanation. Her duties were more than that of a sales clerk. Facts: Respondent was employed as Sales Clerk. GR No. less inventory variances incurred by the store amounting to ₱8. Petitioners are ordered to refund to respondent the amount of P 8. Labor Arbiter. the nature of her work included inventory and cashiering. Petitioner failed to sufficiently establish that respondent was responsible for the negative variance it had in its sales for the year 2005 to 2006 and that respondent was given the opportunity to show cause why deduction from her last salary should not be made. rest day and separation pay. Given that respondent had in her care and custody the store’s property and funds.than the Constitution. 2003. shall make any deduction from the wages of his employees. 160827. 2004. except in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. provides: SECTION 14.Reversed the decision of the LA and dismissed the case for illegal dismissal. Decision of the Labor Arbiter is REINSTATED with MODIFICATION. Issues: (1) Whether respondent’s act constitutes just cause to terminate her employment with the company on the ground of loss of trust and confidence. – Where the employer is engaged in a trade. respondent admitted that she used the universal password three times on the same day in 2005. meanwhile. Court of Appeals. 2014 Doctrine: No employer. unpaid salary during her preventive suspension and attorney’s fees. Delmo. Aside from attending to customers and tending to the shop. but a notice of termination was sent to her. Subsequently.304.R. Bluer Than Blue Joint Ventures Company/Mary Ann Dela Vega vs. finding her explanation unsatisfactory and terminating her employment immediately on the ground of loss of trust and confidence. and (d) That the deduction from the wages of the employee does not exceed 20 percent of the employee’s wages in a week. among others. that the award of separation pay is computed from January 2. (b) That the employee is given reasonable opportunity to show cause why deduction should not be made. Respondent’s preventive suspension was lifted. 6. There must be a showing that her acts were done with "moral perverseness" that would justify the claimed loss of trust and confidence attendant to her job. the employer may make wage deductions or require the employees to make deposits from which deductions shall be made. While respondent's position was denominated as sales clerk. The petitioner received a report that several employees have access to its point-of- sale (POS) system through a universal password given by Flores. she is considered as a rank-and-file employee occupying a position of trust and confidence. 192582 April 7. materials. in his own behalf or in behalf of any person. and not from November 25. NLRC. (2) Yes.93. it was discovered that it was respondent who gave Flores the password. after she learned of it from two other employees. Deduction for loss or damage. As consistently ruled by the Court. respondent filed a complaint for illegal dismissal. Glyza Esteban G. vs. however. Respondent was also placed under preventive suspension for ten days. Article 113 of the Labor Code provides that no employer. The petitioner sent a letter memorandum to respondent asking her to explain in writing why she should not be disciplinary dealt with for tampering with the company’s POS system through the use of an unauthorized password.Set aside the decision of NLRC. 2014 Concept: In the absence of a written agreement between the employer and the employee that sales commissions shall be paid in a foreign currency. including benefits and bonuses. (2) Whether the petitioner illegally deducted the store’s negative variance for the year 2005 to 2006 from the respondent's salary.Respondent was illegally dismissed and awarded her separation pay. shall make any deduction from the wages of his employees. backwages. occupation or business where the practice of making deductions or requiring deposits is recognized to answer for the reimbursement of loss or damage to tools. respondent also assumed cashiering duties. subject to the following conditions: (a) That the employee concerned is clearly shown to be responsible for the loss or damage.304. a function that clearly falls within the sphere of rank-and-file positions imbued with trust and confidence. Respondent signed a quitclaim and release in favor of the petitioner. the latter has the right to be paid in such foreign currency once the same has become an established practice 41 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . June 18. except in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. holiday pay. Upon investigation. or equipment supplied by the employer to the employee. The petitioner justified the deduction on the basis of alleged trade practice and that it is allowed by the Labor Code.93 which was illegally deducted from her salary.

and pay Delmo backwages and 13th month pay from 1996-1998 and the unpaid commissions (as above stated). GR No. October 15. forbade Netlink from unilaterally reducing. The rate of exchange at the time of payment.e.45 in the form of advance payment.  NLRC: modified the LA decision because of the existence of valid and just causes for Delmo’s termination and ordered netlink to pay Delmo the amount awarded by LA except for the backwages. Ruling: YES  As a general rule. and suspension memoranda were given to employees who violated company rules and regulations. The absence of the contractual stipulation notwithstanding. he was not furnished the twin requirements of notice and the opportunity to be heard. PLDT vs. National Labor Relations Commission where it was ruled that "where the dismissal of an employee is in fact for a just and valid cause and is so proven to be but he is not accorded his right to due process. 192518. Netlink was still liable to pay Delmo in US dollars because the practice of paying its sales agents in US dollars for their US dollar denominated sales had become a company policy."  Petitioner also failed to refute by evidence that Delmo is not entitle to commissions payable in US dollar. 1991. and the authorized personnel in the field project assignments. “Sebuguero vs. but such actions were considered as a necessary management tool to instill discipline.89 and US$7. Estranero. or other employee benefits" in Article 100 is construed to mean the compensation and privileges received by an employee aside from regular salaries or wages. Netlink Computer.. petitioner has paid the respondent in the amount of P216. The evidence on record shows that the ALCATEL.of the former. Instead of denying the allegation. However. the phrase "supplements. Otherwise would result to diminution of benefits. There was no written contract between Netlink and Delmo stipulating that the latter's commissions would be paid in US dollars.  He then requested payment of his commissions.  1996. Said amount should therefore be deducted Delmo is not entitled to 13th month pay since the termination was valid although deprived of his right to due process. Allegedly. the company issued a memoranda detailing his supposed infractions of the company’s attendance policy.  MR denied. Inc.  CA affirmed subject to modification: since the payment of the commission is made to depend on the future and uncertain event — which is the payment of the accounts by the persons who have transacted business with the petitioner. The obligation therefore to pay commission has not yet arisen. Netlink only sought a declaration that the US dollar commissions be paid using the exchange rate at the time of sale.  1998. 8. To rule otherwise would be to cause an unjust diminution of the commissions due and owing to Delmo.  NETLINK countered that that there were guidelines regarding company working time and its utilization and how the employees' time would be recorded.  With the payment of US dollar commissions having ripened into a company practice. petitioner failed to refute by evidence that respondent is not entitled to the said commission. Delmo worked in the field most of the time.588. not the rate of exchange at the time of the sales. 2014 Concept: Set-off of employee’s loan against the latter’s separation pay by the employer cannot be validly made unless there is 42 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 1998. Delmo (Delmo) as account manager tasked to canvass and source clients and convince them to purchase the products and services of Netlink. and in and out in the afternoon.  He was able to generate sales worth P35.558. Later on.00. which has been incorporated in Article 100 of the Labor Code. Verily. Issue: WON payment of commissions should be made in US dollars. private respondent's biggest client has not paid fully the amount it owes to the petitioner as of March 10.000. reprimand. there is no way that the commissions due to Delmo were to be paid in US dollars or their equivalent in Philippine currency determined at the time of the sales.  DENIED. LA decision: favoring Delmo declared that the latter was illegally dismissed and ordered Netlink to reinstate. all personnel were required to use the bundy clock to punch in and out in the morning. controls. the devaluation of the peso cannot be used as a shield against the complainant because that should have been the lookout of the respondent company in providing for such a clause that in case of devaluation. the price agreed upon should be at the exchange rate when the contract of sale had been consummated the complainant should not be made to suffer.000. He was not required to accomplish time cards to record his personal presence. Netlink claimed that it would be losing on the business transactions closed by Delmo due to the high costs of equipment. discontinuing or eliminating the practice. thedismissal shall be upheld but the employer must be sanctioned for noncompliance with the requirements of or for failure to observe due process. Excepted from the rules were the company officers. Delmo was refused entry to the company premises by the security guard pursuant to memorandum.  Delmo filed a complaint for illegal dismissal. This was impliedly admitted by Netlink when it did not refute the allegation that the commissions earned by Delmo and its other sales agents had been paid in US dollars. Products and Services (Netlink)hired Eric S. and in fact his biggest client (ALCATEL) had not yet paid Netlink asserted that warning.30. from which he earned commissions amounting to P993. also the petitioner’s contention that the computation of these commissions should be based on the value of peso in relation to a dollar at the time of sale is untenable. all obligations shall be paid in Philippine currency unless there is stipulation to the contrary. Facts:  On November 3. In order to force him to resign. like stressing his supposed absences and tardiness. diminishing.799. i. but Netlink refused and only gave him partial cash advances chargeable to his commissions. more or less. Netlink began to nitpick and fault find.  The principle of non-diminution of benefits.

2003. Solid Mills filed its Department of Labor and Employment termination report and later. and on the condition that the employees. it is the burden of petitioners to present proof of the validity of the deductions. pay invoked by PLDT was dismissed for lack of jurisdiction. filed a complaint for illegal dismissal with claim for reinstatement before the NLRC. HELD: NO.  The instant case is not about jurisdiction to determine the validity of the set-off but more of the petitioner's authority to deduct from the redundancy pay of the respondent his outstanding loans obtained from different entities. The IRR of LC meanwhile. Release and Quitclaim for his severance from employment. aimed at reducing its work force.  Attracted by the separation pay offered by the company. to withhold any amount from the wages of a worker without the worker's consent. Bonus. Petitioners failed to present convincing evidence that.  MR denied. 2015 CONCEPT: An employer is allowed to withhold terminal pay and benefits pending the employee’s return of the employer’s properties.  Respondent’s length of service was 8 years therefor he was not qualified for a retirement pay which requires that the employee have worked for at least 15 years. the respondent was no longer allowed to report to work. Proof insufficient.  PLDT’s contention as to the set-off made by them. thus availed of the offered personnel reduction program. the respondent had outstanding liabilities arising from various loans he obtained from different entities which summed to P267. the respondent declared that he has no objection to being included in the redundancy program of PLDT.00.  CA affirmed and ruled there must be proof that there is a personal written authorization from respondent authorizing petitioners to deduct from his terminal pay his outstanding loans from said entities. much less consent. Feb. would vacate the premises anytime the Company deems fit. except in cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. PLDT CANNOT VALIDLY DEDUCT THE LOANS FROM RESP.  Article 116 17 of the Labor Code clearly provides that it is unlawful for any person. 202961.  It is clear in Article 113 15 of the Labor Code that no employer. PLDT employed the respondent as an Auto-Mechanic/Electrician Helper. As Solid Mills’ employees. Facts:  On July 1.consent obtained from the employee in writing.  The deductions made to the respondent's redundancy pay do not fall under any of the circumstances provided under Article 113. they were offered separation Or redundancy package of 200% of their basic monthly salary for every year of service. if entitled.  In the year 1995.  LA DECISION: favored resp. He was then made to sign a deed denominated as a Receipt. Due to serious business losses.’ outstanding loan against sep. Job Grade 3 with a monthly salary of P15.000. 9. SIL. Thus. 1995.  However. After.000. among others.  CA’s decision affirmed.  PLDT offered the affected employees an attractive redundancy pay consisting of 100% of their basic monthly salary for every year of service. directly or indirectly. In the inter-office Memorandum dated April 21. PLDT deducted the said amount from the payment that the respondent was supposed to receive as his redundancy pay. On the contrary respondent maintains that petitioners unilaterally made the application of deductions without his knowledge. Solid Mills sent to petitioners’ individual notices to vacate SMI Village.  PLDT has no legal right to withhold the respondent's redundancy pay and other benefits to recompense for his outstanding loan obligations to different entities.  Consequently. a property owned by Respondent Solid Mills. indeed respondent.00 at the time of his separation from the service in 2003. which LA claimed that they had no jurisdiction because the same did not arise from E-E relationship may only be brought through a special civil action in regular courts. Milan et al vs.  Notice of Separation Due to Redundancy was submitted to the Department of Labor and Employment on April 25.’ REDUNDANCY PAY. shall make any deduction from the wages of his employees. They were required to sign a memorandum of agreement with release 43 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .028. NLRC. or when the deductions are with the written authorization of the employees for payment to a third person. this was out of liberality and for the convenience of its employees.  This prompted the respondent to retract his availment of the separation pay.37 (the same total amount of his redundancy pay). has knowledge and consented to these deductions. The respondent was nonetheless entitled to 200% of his basic monthly salary for every year of service by way of redundancy pay or equivalent to P240. The respondent's entitlement to his redundancy pay is mandated by law which the petitioners cannot unjustly deny. Thus. PLDT adopted a company-wide Manpower Reduction Program (MRP). However. According to Solid Mills. the respondent expressed his conformity to his inclusion in the MRP. ISSUE: Whether or not the petitioners can validly deduct the respondent's outstanding loan obligation from his redundancy pay. nor was it established with certainty that the respondent has consented to the said deductions or that the petitioners had authority to make such deductions. 2003.etc) amounted to 27k+. petitioners were informed that Solid Mills will cease its operations. petitioners were no longer allowed to report for work.  Resp. in addition to their retirement benefits. ordered PLDT to pay the redundancy pay in full and declared that the set-off made to resp. petitioners and their families were allowed to occupy SMI Village. 4. Agreed with LA that it is not a labor dispute but one arising from debtor-creditor relation where PLDT stands as collecting agent  MR denied. GR No.  NLRC affirmed. provides that deductions from the wages of the employees may be made by the employer when such deductions are authorized by law. He was also entitled to other benefits (13th. in his own behalf or in behalf of any person. the respondent's position was included in those declared as redundant. For those who were not qualified to the retirement benefits.

and CA: The Labor Arbiter ruled in favor of petitioners.chanrobleslaw 2. OUR LAW SUPPORTS THE EMPLOYERS’ INSTITUTION OF CLEARANCE PROCEDURES BEFORE THE RELEASE OF WAGES. The return of the property’s possession became an obligation or liability on the part of the employees when the employer-employee relationship ceased. Petitioners rose from the ranks and were promoted to Regional Sales Managers. They argued that their accrued benefits and separation pay should not be withheld because their payment is based on company policy and practice. asked 44 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Withholding of the wages. GR No. that said agreement only provides that the benefits shall be “less accountabilities. and due benefits. When the National Sales Director position became vacant. NLRC reversed the Labor Arbiters ruling and NLRC’s ruling was affirmed by the CA. and 13th month pay. The employees’ benefits are also not being reduced.cralawred “Debt” in this case refers to any obligation due from the employee to the employer. in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned. Hence. termination payments. Petitioners refused to sign the documents and demanded to be paid their benefits and separation pay. ISSUE: Can respondent solid mills withhold the employee’s terminal pay and other benefits of the employees if the employees have not returned the property belonging to solid mills? RULING: YES. Solid Mills argued that petitioners’ complaint was premature because they had not vacated its property. shall make any deduction from the wages of his employees. belonging to the employer but are in the possession of the separated employee.” which should not be interpreted to include such possession. On the other hand. As Regional Sales Managers. Requiring clearance before the release of last payments to the employee is a standard procedure among employers. the General Manager. and 3. 13th month pay. et al. It is only subjected to the condition that the employees return properties properly belonging to the employer. Withholding of payment by the employer does not mean that the employer may renege on its obligation to pay employees their wages. No employer. and to the demolition of the constructed houses inside as condition for the release of their termination benefits and separation pay. 113. respondent Solid Mills has the right to withhold petitioners’ wages and benefits because of this existing debt or liability. HOWEVER. Boie Takeda Chemicals Inc. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment.” 10. petitioners filed complaints before the Labor Arbiter for alleged non-payment of separation pay. July 20. Thus. 183934. accrued sick and vacation leaves. There is no reason to limit its scope to uniforms and equipment. and separation pay would be released. Wage deduction. (Emphasis supplied) THE CIVIL CODE PROVIDES THAT THE EMPLOYER IS AUTHORIZED TO WITHHOLD WAGES FOR DEBTS DUE: Article 1706. as petitioners would argue. NLRC. shall not be made by the employer. vs. in his own behalf or in behalf of any person. are returned to the employer before the employee’s departure. and the deduction is to recompense the employer for the amount paid by him as premium on the insurance. (BTCI) hired petitioners Ernesto Galang and Ma. Respondents Solid Mills argue that petitioners’ failure to turn over respondent Solid Mills’ property “constituted an unsatisfied accountability” for which reason “petitioners’ benefits could rightfully be withheld. It includes any accountability that the employee may have to the employer... Petitioners argue that respondent Solid Mills and NAFLU (employees’ labor union) memorandum of agreement has no provision stating that benefits shall be paid only upon return of the possession of respondent Solid Mills’ property. whether public or private. Kazuhiko Nomura (Nomura). In cases where the worker is insured with his consent by the employer. For union dues. Inc. real or personal. 2016 Concept: To be considered as a regular company practice the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time. As a general rule. except: 1. According to the Labor Arbiter. As an exception to the general rule that wages may not be withheld and benefits may not be diminished. employers are prohibited from withholding wages from employees as provided in the art. they belong to the sales department of BTCI. the Labor Code provides: Art.and quitclaim before their vacation and sick leave benefits. Olga Jasmin Chan. Labor Arbiter. Galang et al. and that it has been made consistently and deliberately Facts: Respondent Boie Takeda Chemicals. Also. Solid Mills illegally withheld petitioners’ benefits and separation pay. except for a debt due. This is only consistent with the equitable principle that “no one shall be unjustly enriched or benefited at the expense of another. 100 and 116 of the Labor Code. Clearance procedures are instituted to ensure that the properties. Employees who signed the memorandum of agreement were considered to have agreed to vacate SMI Village.

Whether petitioners were constructively dismissed from service. but it was reversed by the NLRC for failure to prove that they were indeed constructively dismissed. instead of the petitioners. and that it has been made consistently and deliberately. Under these two definitions. petitioners arc not covered by any agreement. Petitioners also argue that the retirement package given to them is lower compared to others who were holding the similar position at the time of their retirement. For its part. There is also no dispute that petitioners received more than what is mandated by Article 287 of the Labor Code. Neither was there any circumstance that would make petitioners' continued employment unreasonable or impossible. Upon petitioners' retirement. BTCI hired Villanueva who only had three years of service in the company. They claimed that this is the same retirement package given to previous retirees namely. Specifically. while no demotion in rank or diminution in pay may be attendant." It exists where there is cessation of work because continued employment is rendered impossible. Aggrieved of not being the one promoted. who was promoted with them to the same position. BTCI by practice grants the same retirement benefits to managers. Petitioners were not discriminated against in terms of their retirement package. a collective bargaining agreement or employment contract. unreasonable or unlikely. Petitioners were not constructively dismissed from service Constructive dismissal has often been defined as a "dismissal in disguise" or "an act amounting to dismissal but made to appear as if it were not. 45 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . and a new position of Operations Manager was created. and full ownership of service vehicle tax free. Based on both parties' evidence. claim that they should have received a larger pay because BTCI has given more than what they received to previous retirees. and has only three years of experience in sales. the positions of Regional Sales Manager were abolished. and because he was merely three years away from normal retirement. however. BTCI argues that no constructive dismissal can occur because there was no movement or transfer of position or diminution of salaries or benefits. petitioners received their retirement package and other monetary pay from BTCI.petitioners to apply for the position of National Sales Director. or an established employer policy. that the employee has no choice but to resign. insensibility or disdain by the employer. unreasonable or unlikely. The Arguments Petitioners argue that they were constructively dismissed because of the acts of BTCI 's General Manager Nomura. Then. and that the appointment of Villanueva was within the management prerogative. constructive dismissal may still exist when continued employment has become so unbearable because of acts of clear discrimination. Petitioners cite the case of one Sarmiento. No. petitioners intimated their intention to retire. Petitioners also failed to show that employment is rendered impossible. petitioners were informed that BTCI. former Regional Sales Director Jose Sarmiento. petitioners inquired if they could avail of early retirement package due to health reasons. Thereafter. Petitioners admitted that they have previously intended to retire and were actually the ones who requested to avail of an early retirement. Sarmiento allegedly received a more generous package compared to what petitioners received. As to the payment of retirement benefits. BCTI claims that the complaint is only an attempt to extort additional benefits from the company. They claim that they were forced into resigning because instead of promoting them to the position of National Sales Directors. who has no background or experience in sales to speak of. and former National Sales Director Melchor Barretto. Petitioners believed that Villanueva did not apply for the position. insisted that such retirement package does not exist and Sarmiento's case was exceptional since he was just a few years shy from the normal retirement age. Petitioners. Although petitioners are managers (and are not covered by the CBA). however. promoted Edwin Villanueva as National Sales Director. II. Issues: I. No. In this case. as an offer involving a demotion in rank and a diminution in pay. and that it has already become a company practice. Our labor laws respect the employer's inherent right to control and manage effectively its enterprise and do not normally allow interference with the employer's judgment in the conduct of his business. The promotion of employees to managerial or executive positions rests upon the discretion of management. and who opted for early retirement in 2001. what is essentially lacking is the voluntariness in the employee's separation from employment. Ruling: I. BTCI insists that petitioners have been paid according to the Collective Bargaining Agreement (CBA) between BTCI and BTCI Supervisory Union. In some cases. The burden of proof that the benefit has ripened into company practice rests with the employee: To be considered as a regular company practice the employee must prove by substantial evidence that the giving of the benefit is done over a long period of time. however. Other employees cited by petitioners all received retirement benefits computed on the CBA provisions. petitioners were neither demoted nor did they receive a diminution in pay and benefits. BTCI admits that it gave Sarmiento additional financial assistance because of serious health problems. (Sarmiento). Jr. and II. they requested Nomura if they could avail of the early retirement package of 150% plus 120% of monthly salary for every year of service tax free. Nomura. NLRC. Later. Whether petitioners are entitled to a higher retirement package. CA affirmed NLRC’s decision. Labor Arbiter. and CA: The labor arbiter ruled that the petitioner was constructively dismissed. The entitlement of employees to retirement benefits must specifically be granted under existing laws.

they were informed that they had been replaced by a new set of workers. Holiday pay. respondent NLRC should have deleted. WON the value of the tuna intestine and liver should be computed in arriving at the daily wage. Arada. or is necessary because as specified in appropriate regulations to be issued by the Secretary of Labor or as stipulated in a collective bargaining agreement. all retired in the same year. the available and logical remedy is reinstatement. A year cannot be considered long enough to constitute the grant of retirement benefits to these employees as company practice. rest day pay. these employees." (Emphasis supplied) Undoubtedly. Re: Separation pay: Under existing laws and jurisprudence. by checks or money order. holiday pay. Rolando Arada. even when expressly requested by the employee. The agreement made by the party even expressly requested by the worker will not shield the prohibition. according to petitioner. ordering petitioner to pay for the differential wage pay. On 15 June 1990. petitioner consistently refused to re-admit private respondents in his establishment. There exist a strained relationship. including Sarmiento. private respondents filed a case before NLRC for underpayment of wages and non-payment of overtime pay. that is. 7. RULING: 1. the registered owner of Southern Fishing Industries. petitioner's practice of paying the private respondents the minimum wage by means of legal tender combined with tuna liver and intestines runs counter to the abovecited provision of the Labor Code. received significantly larger retirement benefits. — No employer shall pay the wages of an employee by means of promissory notes.00 per tuna per movement (3 movements from fishing boat to truck. "ARTICLE 102.PAYMENT OF WAGES CASES: 1. coupons. 2. During the first week of June 1990. petitioner notified his workers of his proposal to reduce the rate-per-tuna movement due to the scarcity of tuna. separation pay may be awarded to the employee in lieu of reinstatement. and Rafael cannot be used as precedents to prove this specific company practice because these employees were not shown to be similarly situated in terms of rank. private respondents filed another case against petitioner. Petitioner even replaced private 46 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . from cold storage to vessel for shipment). Private respondents were uniformly paid at a rate of P1. by reason of strained relationship between the employer and employee. as it was the agreement between the parties in the employment contract. Firstly. is when the circumstances prescribed in the second paragraph of Article 102 are present. and five (5)-day service incentive leave pay. truck to cold storage. No. On 2 July 1990. As a permissible exception to the general rule. whenever there is a finding of illegal dismissal. does not shield petitioner. Private respondents resisted the proposed rate reduction. the cases of Ducay. The only instance when an employer is permitted to pay wages in forms other than legal tender. 243 SCRA 260 [1995] FACTS: Private respondents were regular piece-rate workers of petitioner. Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code. They were instructed to wait for further notice but were in vain. Wages shall be paid only by means of legal tender. Petitioner argued: Re: Wage differential pay: The value of the tuna intestine and liver should be computed in arriving at the daily wage of herein complainants because the very essence of the agreement between complainants and respondent is: complainants shall be paid only P1. 2. The fact that said method of paying the minimum wage was not only agreed upon by both parties in the employment agreement but even expressly requested by private respondents. Congson vs. WON reinstatement should be granted in lieu of separation pay. Labor Code only allow wage to be paid in legal tender. Labor Arbiter & NLRC ruled in favor of respondents. NLRC. tokens. tickets. containing an additional claim for separation pay should their complaint for constructive dismissal be upheld. rest day and SIL were not granted for lack of evidence presented. 13 th month pay. and Sarmiento. Also. nor are the applicable retirement packages corresponding to their ranks alike. Article 102 of the Labor Code is clear. Labor Arbiter directed the parties to submit their position papers. and for constructive dismissal. Since there was no finding or even allegation of strained relationship between petitioner and private respondents. It should be noted that tuna intestines and liver are easily disposed of in any public market. vouchers. chits. ISSUES: 1.Petitioners presented evidence showing that Anita Ducay. However. When they reported for work the next day.00 per tuna per movement BUT the intestines and liver of the tuna delivered shall go to the herein complainants. No. 13th month pay. the award of separation pay in Labor Arbiter Aponesto's decision. Marcielo Rafael. Conciliation conferences were scheduled but there did not reach an agreement. Therefore. SIL and separation pay. or any object other than legal tender. Forms of Payment.

In case of termination due to the installation of labor saving devices or redundancy." 2. it appears that. Book III of the Omnibus Rules Implementing the Labor Code. WON North Davao Mining violated the Labor Code regarding place of payment of wages. Maco to Tagum which is 2 1/2 hours by travel and the risks in commuting all the time in collecting complainants' salaries. the Philippine National Bank (PNB) became part owner thereof as a result of a conversion into equity of a portion of loans obtained by North Davao from said bank. 2. In the case of Arturo Lagniton. the employees had to collect their salaries at a bank in Tagum. When it ceased operations.000. And secondly. 1986. 283. redundancy. . the fact that less separation benefits were granted when the company finally met its business death cannot be characterized as discrimination. in protecting the rights of the laborer. had already indicated their aversion to their continued employment in petitioner's establishment. in which the aggregate losses amounted to over P20 billion — the Labor Code does not impose any obligation upon the employer to pay separation benefits. we ruled that the refusal of the dismissed employee to be re-admitted is constitutive of strained relations. it had been giving separation pay equivalent to thirty (30) days' pay for every year of service.". and for equitable reasons. whichever is higher. would justify the granting of backwages equivalent to two (2) days in a month as prayed for. — The employer may also terminate the employment of any employee due to the installation of labor saving devices.000. Indeed. Closure of establishment and reduction of personnel.respondents with a new set of workers to perform the tasks of private respondents. from the beginning of its operations in 1981 until its closure in 1992. petitioner North Davao completely ceased operations due to serious business reverses. A fraction of at least six (6) months shall be considered one (1) whole year. for obvious reasons.000. et al.00) per year. authorizes neither oppression nor self-destruction of the employer. "Art. Where. National Labor Relations Commission (3rd Division) and CARE Philippines. the closure was due to business losses — as in the instant case. vs. From 1988 until its closure in 1992. ISSUE: 1. Where the closure was due to business losses the Labor Code does not impose any obligation upon the employer to pay separation benefits. Moreover.North Davao Mining vs. retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. North Davao Mining Corporation (North Davao) was incorporated in 1974 as a 100% privately-owned company. PNB transferred all its loans to and equity in North Davao in favor of the national government. we held that strained relationship is fairly established if the records of the case showed consistent refusal of the employer to accept the dismissed employee. 1992. In the case of Felix Esmalin vs. However. whichever is higher. from the very start. Later. 283 governs the grant of separation benefits "in case of closures or cessation of operation" of business establishments "NOT due to serious business losses or financial reverses . On May 31. computed on their basic monthly pay. in addition to the commutation to cash of their unused vacation and sick leaves. 2. however. . Violation of Section 4. as the region where North Davao operated was plagued by insurgency and other peace and order problems. NLRC. private respondents themselves. its remaining employees were separated and given the equivalent of 12. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. 'From the evidence on record. Sr." (emphasis supplied) The underscored portion of Art. No. Therefore. "(t)he law. 'Corollary to the above findings. Yes. Such action was dictated not by a discriminatory management option but by its complete inability to continue its business life due to accumulated losses. The very filing of their second case before Labor Arbiter specially for separation pay is conclusive of private respondents' intention to sever their working ties with petitioner.5 days' pay for every year of service. the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. On June 30. later turned them over to petitioner Asset Privatization Trust (APT). WON the reduction in payment of separation pay on the day of closure due to serious financial loss is discriminatory to the separated employees. 254 SCRA 721 [1996] FACTS: Petitioner. during the life of the petitioner corporation. for each of the five years prior to its closure. . DavaoDel Norte.00 round trip fare during pay days. North Davao suffered net losses averaging three billion pesos (P3. one cannot squeeze blood out of a dry stone. this arrangement lasted from 1981 up to 1990. Considering further the distance between Amacan.' 47 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . we find that the hours spend by complainants in collecting salaries at a bank in Tagum. National Labor Relations Commission. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. some 58 kilometers from their workplace and about 2 1/2 hours' travel time by public transportation. RULING: 1. we likewise hold respondents liable for the transportation expenses incurred by complainants at P40. Nor water out of parched land. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. Rule VIII. Davao del Norte shall be considered compensable hours worked.

Respondent in many instances change the credit terms of certain IBMs from the 52-day limit to an "unauthorized" term ranging from 60 days or 90 days. Both agreed and in the meantime. With respect to rank-and-file personnel. loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question. Ruling: No. resulting to higher service fee to be paid to IBMs. the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence. Even in light of this "promotion. that recent decisions of this Court have distinguished the treatment of managerial employees from that of rank-and-file personnel in the application of the doctrine of loss of trust and confidence. respondent managed the Cagayan de Oro branch for three months pending the appointment of a new BOM." the petitioner still has the right to legally terminate respondent if the former has belief that the latter cannot be trusted. Upon his resignation. 31. such as the custody. Villagracia resigned. proof beyond reasonable doubt is not required. 149013. G. or care and protection of the employer's property. on June 25. held the position of Credit Administration Supervisor or CAS at the Cagayan de Oro City branch of the petitioner. to supervise the credit and collection of payments and outstanding accounts due to the petitioner from its independent dealers and various customers. Respondent argued that she was illegally dismissed and further argued that the loss of trust and confidence advanced by the petitioner is negated by the fact that respondent. ISSUE: 1. handling. Heirs of Sara Lee vs. Issue: WON Policy Instructions No. as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct. 1996.00. which affirmed the Labor Arbiter's decision. after Villagracia's resignation. the dealers are paid "Services Fees. RULING: 1. The petitioner. ascribing grave abuse of discretion on the part of NLRC in concluding that Policy Instructions No. and to screen prospective IBMs. Hence. This situation applies where a person is entrusted with confidence on delicate matters.R. known either as "Independent Business Managers" (IBMs) or "Independent Group Supervisors" (IGSs).000." the amount of which depends on the volume and value of their sales. respondent requested instead that a formal investigation be conducted. No. however. 2006 FACTS: The House of Sara Lee (petitioner) is engaged in the direct selling of a variety of product lines for men and women with dealers to sell the aforementioned merchandise. 8. in the case of managerial employees. 282 SCRA 316 [1997] Facts: Petitioners sent a written request for the expeditious implementation and payment by respondent. WON respondent was validly terminated. of the "40-Hours/5-Day workweek" with compensable weekly two days off as provided for by Republic Act 5901 as clarified for enforcement by the Secretary of Labor's Policy Instructions No. NLRC. dismissed the complaint. would obtain at discounted rates the merchandise on credit and then sell the same products to their own customers at fixed prices. Law and jurisprudence have long recognized the right of employers to dismiss employees by reason of loss of trust and confidence. thus. formally dismissed the respondent for breach of trust and confidence. petitioners filed a complaint regarding their "claims for statutory benefits under the above-cited law and policy issuance. in order to constitute a just cause for dismissal." The Labor Arbiter. thus. loss of trust justifies termination. The nature of her work requires a substantial amount of trust and confidence on the part of the employer. San Juan De Dios Hospital vs. 54 dated April 12. On the ground of loss of trust and confidence. Cynthia Rey (respondent). Under existing company policy. was allowed to manage the Cagayan de Oro City branch and by the fact that she was commended for her good performance. Petitioners appealed before public respondent National Labor Relations Commission (NLRC). Respondent hospital failed to give a favorable response. But. but without prejudice to the outcome of the administrative investigation. More so. which would either be 38 days for IGSs or 52 days for IBMs. In turn. It must be noted. respondent occupied a highly sensitive and critical position and may thus be dismissed on the ground of loss of trust and confidence. it is sufficient that there is some basis for the loss of confidence. 54 is valid or not. Petitioner then suspended respondent however. respondent's suspension was lifted. 1996. Yes. the act complained of must be "work- related. Branch Office Manager. this petition." such that the employee concerned is unfit to continue working for the employer. and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position. 54 "proceeds from a wrong interpretation of RA 5901" and Article 83 of the Labor Code. The degree of proof required in labor cases is not as stringent as in other types of cases. Aug. Loss of confidence as a just cause for dismissal is premised on the fact that an employee concerned holds a position of trust and confidence. on April 15.3. in the case of supervisors or personnel occupying positions of responsibility. Rey. There is nothing in the law (Article 83 of the Labor Code) that supports then Secretary of Labor's assertion that "personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5- 48 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . These dealers. 1988. But as to a managerial employee. The Total Service Fee discrepancy as a result of credit term adjustment amounts to P211. The primary duty of the CAS is to strictly monitor each of these deadlines. Meanwhile. Being the Credit Administration Supervisor of the Cagayan de Oro and Butuan City branches of the petitioner. and that mere uncorroborated assertions and accusations by the employer will not be sufficient.CONDITIONS OF EMPLOYMENT CASES: 1. however. San Juan de Dios Hospital. the dealers must remit the proceeds of their sales within a designated credit period.

289 SCRA 86 [1998] Facts: Sime Darby Salaried Employees Association. even to take his meals. he may not leave the company premises during such time. nurses. called private respondent at home to inform him of the emergency. On the following day the patient died.000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day. 3. Art. laboratory technicians. Simedarby vs. NLRC. In his explanation. The LA and the NLRC dismissed the complaint as this was a valid exercise of management prerogative. PAL Medical Director Dr. for five (5) days a week. For purposes of this Article. The SC held that the change in work schedule is a valid exercise of management prerogative. private respondent is obliged to stay in the company premises for not less than eight hours. in turn. psychologists. 5901 reveals nothing therein that gives two days off with pay for health personnel who complete a 40-hour work or 5-day workweek. it shall be the duty of every employer to 49 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Eusebio had already left with the patient. He was assigned at PAL Medical Clinic at Nichols and whose work schedule is from 4:00 in the afternoon until 12:00 midnight. A perusal of Republic Act No.) Whether or not full-time employees are obliged to stay in the company premises for not less than eight (8) hours and may not leave the company’s premises during meals. Fabros left the clinic to have his dinner at his residence. in which case they shall be entitled to an additional compensation of at least thirty per cent (30%) of their regular wage for work on the sixth day. Private respondent reached the clinic at around 7:51 in the evening however. Around 7 o’clock pm of February 17. COURT’S RULING 1. 83. Needless to say. the clinic received an emergency call from the PAL Cargo Services. the Secretary of Labor exceeded his authority by including two days off with pay in contravention of the clear mandate of the statute.) Whether or not all employees illegally dismissed are entitled for moral damages. Airlines vs. Employees are not prohibited from going out of the premises as long as they return to their post on time. The Explanatory Note of House Bill No.) NO. Upon receiving the call the nurse on duty. midwives. it applied to all employees similarly situated. 2. pharmacists.Phil. Banzon ordered the Chief Flight Surgeon to conduct an investigation. Normal hours of work. a five-minute drive from the clinic. Herminio A. Further. Eusebio about the emergency and he arrived at the clinic a few minutes later and that Eusebio panicked and brought the patient to the hospital without waiting for him. the NLRC reversed its decision because it deprived the workers of benefits resulting in an unjust diminution of company privileges. Fabros (Fabros) was employed as flight surgeon at Philippine Airlines (PAL). paramedical technicians. Fabros averred that he was entitled to a thirty-minute meal break and that he immediately left his residence upon being informed by. Meal periods. required private Fabros to explain why no disciplinary sanction should be taken against him. The Chief Flight Surgeon.000. dieticians. Fabros argues that being a full-time employee. Issue: WON there was an unjust diminution of company privileges Ruling: No. exclusive of time for meals.day workweek in any given workweek". Therefore. Upon Motion for Reconsideration. The management charged Fabros with abandonment of post while on duty because according to them his explanation was unacceptable. Merlino Eusebio (Eugenio). nutritionists. “health personnel” shall include: resident physicians. the same will be upheld by the Courts.—Subject to such regulations as the Secretary of Labor may prescribe. attendants and all other hospital or clinic personnel. Health personnel in cities and municipalities with a population of at least one million (1. Articles 83 and 85 of the Labor Code read: Art. Upon learning about the incident. except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours. 5901) explicitly states that the bill's sole purpose is to shorten the working hours of health personnel and not to dole out a two days off with pay. 1994. It complies with the 8-hour work period provided for in the Code and even gave the employees 1 full hour of break without interruption by the employer. The SC also stated that so long as such prerogative is exercised in good faith by the employer. social workers. an association of monthly salaried employees. The patient arrived at the clinic at 7:50 in the evening and was rushed by Eusebio to the hospital. filed a complaint against Sime Darby Pilipinas. That One of its employees had suffered a heart attack. ISSUE 1. A few minutes later. NLRC FACTS Private respondent Dr. 2. 16630 (later passed into law as Republic Act No. 85.—the normal hours of work of any employee shall not exceed eight (8) hours a day. It alleged that the change in work schedule as well as the removal of the 30-minute paid on call lunch break of the monthly salaried employees constitute unfair labor practice and is discriminatory.

and (d) Where the work is necessary to prevent serious loss of perishable goods. while the company suffered a loss of 50 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .. 3. regardless of sex. NLRC. (c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries. 2007 FACTS Linton. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Rule I. Aggrieved. Inc. there was notice and consultations with the workers and supervisors. the eight-hour work period does not include the meal break. ISSUE Whether there was an illegal reduction of work when Linton implemented a compressed workweek by reducing from six to three the number of working days with the employees working on a rotation basis. on December 17. Linton submitted an establishment termination report concerning the rotation of its workers. sixty-eight workers filed a Complaint for illegal reduction of workdays. No. Linton proceeded with the implementation of the new policy without the approval by DOLE. These negate the existence of bad faith on the part of PAL. The compressed workweek arrangement was unjustified and illegal. 2. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.give his employees not less than sixty (60) minutes time-off for their regular meals. The bulletin states that a reduction of the number of regular working days is valid where the arrangement is resorted to by the employer to prevent serious losses due to causes beyond his control.—Every employer shall give his employees. In the case at bar. except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee. consistent with the ruling in Philippine Graphic Arts Inc. The company's operation was to resume on January 6. G. 1997 informing the workers that effective January 12. there is no showing that the management of Petitioner Company was moved by some evil motive in suspending private respondent. The Court held that as a rule moral damages are recoverable only where the dismissal or suspension of the employee was attended by bad faith or fraud. This means that each worker would be working on a rotation basis for three working days only instead of six days a week. 1998 due to the currency crisis that affected its business operations. Also.R. taking into consideration the following: 1. October 10. 1998. (a) Where the work is non-manual work in nature or does not involve strenuous physical exertion. Linton Commercial Co. It involves a state of mind dominated by ill will or motive. Linton then submitted an establishment termination report to the Department of Labor and Employment (DOLE) regarding the temporary closure of the establishment. or was done in a manner contrary to morals. vs.. Private Fabros’ act. 7. in determining the validity of reduction of working hours — that the company was suffering from losses. 1997. Linton issued another memorandum on January 7. a consensus were reached on how to deal with deteriorating economic conditions and 5. It suspended private respondent on an honest. 2.. issued a memorandum . Section 7. Employees are not prohibited from going out of the premises as long as they return to their posts on time. Further the Bureau of Working Conditions of the DOLE. 4. therefore. However upon close examination of petitioners' financial reports for 1997-1998 shows that. equipment or installations to avoid serious loss which the employer would otherwise suffer. Meal and Rest Periods. of going home to take his dinner does not constitute abandonment. it is evident from the facts that PAL gave Fabros all the opportunity to refute the charge against him and to defend himself. good customs or public policy. 1998. COURT’S RULING YES. 163147. The person claiming moral damages must prove the existence of bad faith by clear and convincing evidence for the law always presumes good faith. On the same day. it was a more humane solution instead of a retrenchment of personnel. Hellera et al. 1997 to January 5. v. Inc. 4. It was sufficiently proven that the company was suffering from losses. the arrangement was temporary. where the Court upheld for the validity of the reduction of working hours. Although the bulletin stands more as a set of directory guidelines than a binding set of implementing rules. it has one main consideration. released a bulletin in determining when an employer can validly reduce the regular number of working days. Citing the case of Philippine Graphic Arts.. Therefore. or constituted an act oppressive to labor.informing its employees about the company's decision to suspend its operations from December 18. Book III of the Omnibus Rules Implementing the Labor Code further states: Sec. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. albeit erroneous. Bad faith does not simply mean negligence or bad judgment. such as when there is a substantial slump in the demand for his goods or services or when there is lack of raw materials. belief that private respondent's act of leaving the company premises to take his meal at home constituted abandonment of post which warrants the penalty of suspension.) NO. (b) Where the establishment regularly operates not less than sixteen hours a day. Not every employee who is illegally dismissed or suspended is entitled to damages. not less than one (1) hour time-off for regular meals. it would implement a new compressed workweek of three (3) days on a rotation basis.

00 in 1997. HSY Marketing Ltd. Records show that Linton continued its business operations during the effectivity of the compressed workweek. June 29..422.645. Bisig Manggagawa sa Tryco vs.O. Further their actual work could be determined with reasonable certainty. However. petitioners would end up failing to meet the standards. Phiktranco Service Enterprise. which spanned more than the maximum period. Respondent contended that petitioners are not entitled for overtime pay since they were bus drivers and thus can be considered field personnel. to date. Linton failed to comply with these standards. they were only paid 404. Under D. 21.00 pesos per round trip without overtime pay and below minimum wage. Subsequently. as an EXCEPTION. Field personnel maybe considered as A Regular Employee if they are subjected to the supervision of the employer and such hours of work they have rendered maybe determined and thus they may be entitled of Overtime Pay and Service Incentive Leave. Article 286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a period not exceeding six (6) months. The court has ruled that while it is true that the management has the prerogative to come up with measures to ensure profitability or loss minimization. On the other hand. Subsequently. NLRC. if already incurred. no definite guidelines have yet been set to determine whether the alleged losses are sufficient to justify the reduction of work hours. Villatique. respondent cannot invoke the doctrine of strained relations to support his prayer for the award of separation pay. On the one hand. 6. GR No. 5. and factory workers. However.e. Oct. and (4) the alleged losses. GR No. retrenchment) or Article 286 (i. 211141. And while Linton had suffered from losses for that year. G. the Memorandum of Agreement was validly entered since there was no diminution of benefits as they were entitled to the same wage as if they had a regular work week schedule. If the standards set in determining the justifiability of financial losses under Article 283 (i. vs. (2) the losses are actual or reasonably imminent. (3) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses. Dasco et al. Issue: WON petitioners are entitled for overtime payment in lieu of the agreement Held: NO. Issue: WON Petitioners are entiled for overtime pay being bus drivers Held: Yes. Permitting reduction of work and pay at the slightest indication of losses would be contrary to the State's policy to afford protection to labor and provide full employment. for retrenchment to be justified. No. which in this case was done through a reduced workweek that resulted in an unsettling diminution of the periodic pay for a protracted period. 15. They are not considered as field personnel since they were under control of the employer in which they are tasked to be at a specific place in a specific time. No. 219569. it retained a considerable amount of earnings and operating income. financial losses must be shown before a company can validly opt to reduce the work hours of its employees..P3. 2016 DOCTRINE: The liability for the payment of separation pay is but a legal consequence of illegal dismissal where reinstatement is no longer feasible. Petitioners are not entitled for the overtime payment. waiver of overtime pay shall be valid provided that the agreement has been entered into by the parties voluntarily. a regular employee may validly waive his right of overtime pay after rendering work beyond 8 hours if he has entered into a Compressed Work Week (CWW). as there is no reinstatement to speak of. Further. as an EXCEPTION. suspension of work) of the Labor Code were to be considered. A year of financial losses would not warrant the immolation of the welfare of the employees. are proven by sufficient and convincing evidence. 2016 Principle: Field personnel as a GENERAL RULE are not entitled for Overtime Pay and Service Incentive Leave (SIL). Petitioners are entitled for overtime pay notwithstanding that they are bus driver who perform work outside of the office or workplace of their employer. August 17.. they entered into a memorandum of agreement with their employer in which they entered into a Compressed Work Week schedule in which it provided that their regular working hours will be 8:00 am to 6:12 pm from Monday to Friday and that they expressly waive their right to overtime pay .e. such privilege is not absolute. 2008 Principle : A regular employee is entitled for overtime pay for rendering work after 8 hours as a general rule.R. Moreover. Facts: Petitioners are employers of Tryco Pharma in which they were employed as helpers. 7. Thus they should be considered as regular employees and therefore entitled for Overtime Pay and Service Incentive Leave. As previously stated. any claim of actual or potential business losses must satisfy the following standards: (1) the losses incurred are substantial and not de minimis. Facts: Petitioners are DRIVERS of respondent who drive buses 2-3 days per round trip. They were also monitored by checkers and dispatchers. FACTS: 51 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 151309. However. Management prerogative must be exercised in good faith and with due regard to the rights of labor. or the expected imminent losses sought to be forestalled. there remained enough earnings to sufficiently sustain its operations. This prompted petitioner to file a complaint against respondent to claim for their overtime pay.. petitioners filed for non-payment of overtime pay representing the work they’ve rendered from 5:00 to 6:12 pm.

petitioners told them to go home because their employment had been terminated. Company drivers who are under the control and supervision of management officers are regular employees entitled to such benefits.. The appropriate course of action is to reinstate employee without payment of backwages. vacation leave pay. shield the latter from liability from employee claims in case of illegal dismissal. directed petitioner to pay separation pay and the equivalent of the service incentive leave pay ISSUES: 1. In this case it was shown in respondent’s unrebutted Affidavit that HSY Marketing was the mother-company. respondent is entitled to service incentive leave pay as the respondent was a regular employee of the petitioner. presumably to evade liability for his recklessness. YES. 8. When they refused to sign. This is because an employee who had not been dismissed. In 2007. Book V of the Omnibus Rules Implementing the Labor Code. claims of underpayment. Nate Casket Maker et al. Under Article 279 of the Labor Code as aforestated.  LA and NLRC Ruling: dismissed complaint  CA Ruling: reversed LA and NLRC. As regular employees. dummy companies that allow the mother company to avoid employer-employee relations and. et al. et al. his salary was withheld. respondent went on absence without leave. which respondent was asked to reimburse. They employed respondents in their casket- making business from 1998 until their alleged termination in March 2007. No substantial evidence was presented to show that he was indeed dismissed or was prevented from returning to his work or that there was a deliberate refusal of respondent to resume his employment without any intention of returning. Pakyaw workers are considered regular employees for as long as their employers exercise control over them. his money claims cannot prosper as he was not terminated.. 192282. he filed a complaint for illegal dismissal with money claims against Fabulous Jeans. In 2003. Thus. Petitioners agreed that respondents are regular employees. an employee unjustly dismissed from work is entitled to reinstatement and backwages. 2011. closure. while driving. non-payment of separation pay. 2007. as required in Sec. while respondents’ mode of compensation was on a per-piece basis. If respondent voluntarily chooses not to return to work. unfair labor practices. before the NLRC. among others. which he refused to do. but found petitioner to be respondent’s employer. the status and nature of their employment was that of regular employees. as there is no reinstatement to speak of. when respondent was allegedly required to sign a resignation letter. Arqueza et al. contended that after they paid for Dorataryo's hospitalization and medical expenses.  LA. respondents allege that they were made to sign a “Contract of Employment” dated February 3. respondent cannot invoke the doctrine of strained relations to support his prayer for the award of separation pay. which stated that during the period of employment. and non-payment of overtime pay. WON respondents were illegally dismissed 2. 2. they met with respondents in order to present a proposed employment agreement which would change the existing pakyaw system to "contractual basis" and would provide for vacation leave and sick leave pay and other benefits given to regular employees. Moreover. WON respondents who are pakyaw workers are entitled to overtime pay. in reality. consequently. Fabulous Jeans shouldered the hospitalization and medical expenses of Dorataryo. NO. holiday pay. service incentive leave and 13th month pay against petitioners. NLRC and CA Ruling: dismissed the charge of illegal dismissal. respondents were entitled to security of tenure and could be dismissed only for just or authorized causes and after the observance of due process. and its owner. cannot be reinstated. Alexander G. However. bumped into a pedestrian. The Court upholds the unanimous conclusion that respondent had not been dismissed at all nor is he considered to have voluntarily resigned from work. Rule XIV. petitioner. but to no avail. much less illegally dismissed. 3. FACTS: Petitioners Armando and Anely Nate are the owners of A. Under Article 279 of the Labor Code as aforestated. In their defense. respondents were entitled to security of tenure and could be dismissed only for just or authorized causes and after the observance of due process. an employee unjustly dismissed from work is entitled to reinstatement and backwages. NO (to separation pay) YES (to service incentive leave pay). Respondents then filed a Complaint for illegal dismissal. petitioner hired respondent as a field driver for Fabulous Jeans & Shirt & General Merchandise. then he must be considered to have resigned. Nate Casket Maker. Since respondent was the one who refused to report for work. Convinced that he was already terminated. Arango. The liability for the payment of separation pay is but a legal consequence of illegal dismissal where reinstatement is no longer feasible. Petitioners are found to have violated the respondents’ rights to security of tenure and constitutional right to due process in not even serving them with a written notice of termination which would recite any valid or just cause for their dismissal. holiday pay. YES. WON respondent has been illegally dismissed 3. 2. Thus. as a result. respondents would not be eligible to earn or receive any sick leave pay. vs. However. WON employer-employee relationship exists between the parties 2. On February 24. In 2011. respondent. WON respondent is entitled to separation pay and service incentive leave pay RULING: 1. October 5. he should be considered as having voluntarily severed his own employment. declared respondents’ illegal dismissal and entitlement to monetary benefits required by law ISSUES: 1. service incentive leave pay and 13 th month pay RULING: 1. Ryan Dorataryo. A. or any other benefits given to refular employees such as 13th month pay and bonuses. The Court had already exposed the practice of setting up "distributors" or "dealers" which are. Reinstatement restores the employee who was unjustly dismissed to the position from which he was 52 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 2016 DOCTRINE: As regular employees. and the like. Respondent was shown to have been hired by petitioner and required to report for work at its store. GR No. among others.

which provides: Art. SMC appealed to the DOLE main office in Manila. commemorating the end of the fasting season. of Presidential Decree No. Right to holiday pay. SMC went to SC for relief via a petition for certiorari. 30. otherwise known as the Code of Muslim Personal Laws. 2002 Facts: On 17 October 1992. which the Court referred to the Court of Appeals. Issues: 1. 170. Still. SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. and Zamboanga and in such other Muslim provinces and cities as may hereafter be created. 146775. Lanao del Norte. conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Macaraya. d) ‘Īd-ul-Fitr (Hari Raya Puasa). 169. but they could receive instead separation pay in lieu of reinstatement if such is no longer practicable. 9. SMC contested the findings and DOLE conducted summary hearings on 19 November 1992. Ruling: The court ruled the issues in negative. which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal. the appeal was dismissed for lack of merit and the order of Director Macaraya was affirmed.R. Since respondents cannot be considered as "field personnel. Provinces and cities where officially observed. 1083 provides that "the provisions of this Code shall be applicable only to Muslims. Filomena. while the grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal. Respondents are entitled to reinstatement. removed. and e) ‘Īd-ūl-Adhā (Hari Raya Haji). they are not entitled to 13th month pay. are exempted. which falls on the first day of the tenth lunar month of Shawwal. CA. However. Iligan District Office. the Department of Labor and Employment (DOLE). vs. However. Muslim holidays may also be officially observed in other provinces and cities. Title I. The appellate court modified the order with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic salary. offices. 3. The foregoing provisions should be read in conjunction with Article 94 of the Labor Code. b) Maulid-un-Nabī (Birthday of the Prophet Muhammad). which falls on the twenty-seventh day of the seventh lunar month of Rajab. In addition.. 2. San Miguel Corp.MINIMUM LABOR STANDARD BENEFITS CASES: 1. both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays. undersecretary Trajano and undersecretary Espanol have jurisdiction in issuing the assailed compliance orders. irrespective of the time consumed in the performance thereof. Hence. Its motion for reconsideration having been denied for lack of merit. 94. Whether or not SMC was not accorded with due process of law in the issuance of the compliance order. the 1999 Handbook on Workers’ Statutory Benefits. the governing law on 13th month pay provides in Sec 3(e) that employees paid on a task basis and those who are paid a fixed amount for performing a specific work. which falls on the tenth day of the twelfth lunar month of Dhū’l-Hijja. 2.The following are hereby recognized as legal Muslim holidays: a) ‘Amun Jadīd (New Year). Official Muslim holidays. No. SMC filed a petition for certiorari before the SC. Jan. there should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. c) Lailatul Isrā Wal Mi’rāj (Nocturnal Journey and Ascension of the Prophet Muhammad). Whether or not regional director Macaraya. directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order. Iligan. Whether or not public respondents seriously erred and committed grave abuse of discretion when they granted Muslim Holiday Pay to non-Muslim employees of SMC. YES (except to 13th month pay). It was discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. North Cotabato. agencies. Lanao del Sur. Iligan City. b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. which states: Art. Muslim holidays are provided under Articles 169 and 170. Art. Alan M. PD 851." then they are not exempted from the grant of holiday and SIL pay even as they were engaged on pakyaw or task basis. Director IV of DOLE Iligan District Office issued a compliance order. Pagadian. Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker’s faith or religion. G. ." However. . and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays. Maguindanao. – a) Every worker shall be paid his regular daily wage during regular holidays. 1083. Book V. Marawi. 28 May 1993 and 4 and 5 October 1993. which falls on the first day of the first lunar month of Muharram. Petitioner asserts that Article 3(3) of Presidential Decree No. 53 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . categorically stated: Considering that all private corporations. DOLE sent a copy of the inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta. except in retail and service establishments regularly employing less than ten (10) workers. dated 17 December 1993. (2) Upon proclamation by the President of the Philippines.(1) Muslim holidays shall be officially observed in the Provinces of Basilan.

Indeed. Get out. However. The Bureau of Working Conditions 32 classifies workers paid by results into two groups. there is an employer-employee relationship. Supreme. As no amicable settlement had been reached. It declared that the dismissal illegal and order the payment of monetary benefits. If a piece worker is supervised. but the same must be shown by evidence. Labor Arbiter Rogelio P. Guikan karon. in accordance with the ruling in Bustamante v. 2. it was a minor infraction to warrant his dismissal. In this case. Tan vs. Section B of the Labor Code. petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. the issue could be resolved even without documentary proofs. Legaspi directed the parties to file their position papers. NLRC 33 and Mark Roche International v. the grant of separation pay in lieu of reinstatement is appropriate. and (2) those whose time and performance is unsupervised by the employer. Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. Tan appealed to the NLRC and reversing the decision of the Labor Arbiter. NLRC.") When Lagrama asked what Tan was saying. Further. The illegality of the act of dismissal constitutes discharge without just cause.On the question regarding the jurisdiction of the Regional Director Allan M. Gawas. This is of course in addition to the payment of back wages which. G. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders. No. Thus. 1998. The first involves an element of control and supervision over the manner the work is to be performed. In the case before us. even if the charge was true. He alleged that he had been illegally dismissed and sought reinvestigation and payment of 13th month pay. I don't want you to draw anymore. "Ayaw daghang estorya. private respondent Lagrama was summoned by Tan and upbraided: "Nangihi na naman ka sulod sa imong drawinganan. 279 of the Labor Code. wala nay drawing. there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection. 2002 Facts: Petitioner Rolando Tan is the president of Supreme Theater Corporation and the general manager of Crown and Empire Theaters in Butuan City. the Labor Arbiter found that the relationship between the employer and employee has been so strained that the latter's reinstatement would no longer serve any purpose. making ad billboards and murals for the motion pictures shown at the Empress. service incentive leave pay. as in this case. and in cases where the relationship of employer-employee still exists. by his refusal to give Lagrama work to do and ordering Lagrama to get out of his sight as the latter tried to explain his side. from September 1. salary differential. Anent the allegation that petitioner was not accorded due process." ("Don't say anything further. The Implementing Rules of the Labor Code provide that no worker shall be dismissed except for a just or authorized cause provided by law and after due process. Hence. Issue: Whether or not the respondent was illegally dismissed and thus entitled to payment of benefits provided by law. without any deduction or qualification. 151228. August 15. Ruling: The respondent was illegally dismissed and entitled to benefits. while illegality in the manner of dismissal is dismissal without due process. Macaraya. as pointed out in Makati Haberdashery v. SMC could not claim that it was not given an opportunity to defend itself. This provision has two aspects: (1) the legality of the act of dismissal. such an employee is not entitled to service incentive leave pay since. Dili ko gusto nga mo-drawing ka pa." ("You again urinated inside your work area. In addition. In any case. dismissal under the grounds provided for under Article 282 of the Labor Code and (2) the legality in the manner of dismissal. – (b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary. Visitorial and enforcement power. 1988 to October 17. (1) those whose time and performance is supervised by the employer. Urinating in a work place other than the one designated for the purpose by the employer constitutes violation of reasonable regulations intended to promote a healthy environment under Art. 34 he is paid a fixed amount for work done. provides: Article 128. The parties do not dispute this finding. while the second does not.") Lagrama denied the charge against him. He claimed that he was not the only one who entered the drawing area and that. namely. as amended by Republic Act No. On October 17. From now on. that is. NLRC should be computed from the time of Lagrama's dismissal up to the time of the finality of this decision. the Court agrees with the Solicitor General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. Here there is no evidence that Lagrama did urinate in a place other than a rest room in the premises of his work. no more drawing. Tan shouted "Gawas" ("Get out"). the court finds that SMC was furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. Tan told him.R. and regardless of the time he spent in accomplishing such work. 54 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . However. Lagrama filed a complaint with the National Labor Relations Commission (NLRC) in Butuan City. Private respondent Leovigildo Lagrama is a painter. 7730. and damages. Instead of ordering his reinstatement as provided in Art. leaving him with no other choice but to leave the premises. Hence. Lagrama. Article 128. a series of summary hearings were conducted by DOLE on 19 November 1992. 282(1) of the Labor Code for purposes of terminating employment. and Crown Theaters for more than 10 years. petitioner made it plain that Lagrama was dismissed. 28 May 1993 and 4 and 5 October 1993. 1998. everytime he spoke.

SEPARATION PAY 9.20 for Belocura. 317 SCRA 420 CONCEPT: FACT: Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents J.992. The fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. Considering that reinstatement would be impractical and hardly in the best interest of the parties. walked out of a meeting with private respondents and other employees. After hearing.719. 13th month pay.212.399. Since a worker is entitled to the enjoyment of ten paid regular holidays.648.110. It found that petitioner had not been dismissed from employment but merely threatened with a closure of the business if they insisted on their demand for a "straight payment of their minimum wage. is also Araw ng Kagitingan. 1998 was both Maundy Thursday and Araw ng Kagitingan.40 5.992.000. Regardless of the number of pieces they finished in a day. Holiday pay. this time April 9. as amended. holiday pay and 13th month pay are in accordance with the finding that petitioners are regular employees.C. and separation pay.896. they are entitled to reinstatement with backwages.719. he earns what he should earn. whether unworked. the employees voted to maintain the company policy of paying them according to the volume of work finished at the rate of P18. the amount of P10. Art.90 III.20 Less 10. Art. Gutierrez found private respondents guilty of illegal dismissal and accordingly ordered them to pay petitioners' claims of Backwages.24 or a total aggregate amount of Two Hundred Ten Thousand Two Hundred Twelve And 64/100 (P210. respectively. 1985 and March 3.20 for Lambo. 13th month pay. Although the worker is forced to take a rest.00 P64. According to the NLRC. Except for the award of attorney's fees in the amount of P19. that is. As in the case of the other 100 employees of private respondents. Since the petitioners were illegally dismissed." after petitioners. 13th month pay.00 V.20 P 96. 94 of the Labor Code. 13TH MO. the above computation is affirmed. petitioners filed a complaint against private respondents for illegal dismissal and sought recovery of overtime pay. Respondent Bisig ng Asian Transmission Labor Union protested. HOLIDAY PAY 1. In accordance with the grievance procedure in their CBA. according to the style of suits they made.102.383. petitioners were paid on a piece-work basis.64). With regard to petitioner Avelino Lambo.00 TOTAL P 84. It is correct to order to give separation pay in lieu of reinstatement. Despite the explanatory bulletin.719. Overtime pay. Backwages should be limited to three years without qualifications and deductions. The NLRC held petitioners guilty of abandonment of work and accordingly dismissed their claims except that for 13th month pay. 1989. although paid on a piece-rate basis.00 P 94. On January 17. and attorney's fees. Only petitioners allegedly insisted that they be paid the minimum wage and other benefits. 1989. NLRC. the law must be taken to mean exactly what it says. HELD: Yes. and additional 10% Attorney’s Fees 19. Holiday pay is a statutory benefit demandable under the law. Issue: Whether or not two holidays falling in the same date would reduce to nine the ten holiday pay benefits a worker is entitled to receive Ruling: NO Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.447.447.00 per dozen of tailored clothing materials. P96.896.984.00 11. Labor Arbiter Jose G. Tailor Shop and/or Johnny Co on September 10. 425 SCRA 478 [2004] Concept: Holiday pay is a statutory benefit demandable under the law. Overtime pay. holiday pay. on January 17. PAY 4. BACKWAGES P64. premium pay on holiday and rest day. that when the language of the law is clear and unequivocal. and separation pay amounting P94. Petitioner ASIAN TRANSMISSION CORPORATION opted to pay only 100% of the basic pay. OVERTIME PAY 13. In 1998.00. his holiday pay. 1993. Lambo vs.3.| Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. separation pay. service incentive leave pay.00 paid to him under the compromise agreement should be deducted from the total award of P94.20. affords a worker the enjoyment of ten paid regular holidays.00 4. with a fraction of at least six (6) months of service being considered as one (1) year. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions.30 IV. Asian Transmission vs. Facts: DOLE issued an Explanatory Bulletin clarifying that employees are entitled to 200% of their basic wage on April 9. 1985.719. which apart from being Good Friday. they were each given a daily pay of at least P64. regardless of whether an employee is paid on a monthly or daily basis.90 13. CA. NLRC revised the decision of the Labor Arbiter.000. the bulletin was reproduced.00 II. ISSUE: Whether or not Avelino and Belocura are entitled to receive benefits such as Backwages. and not under management prerogative. There is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.20 GRAND TOTAL P 181. during that meeting. including its 55 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .24.30 1. The provision is mandatory. The Voluntary Arbiter decided in favor of the Labor Union directing the employer to pay 200%. Under the rules of statutory construction.399. Holiday pay. The awards for overtime pay. AVELINO LAMBO VICENTE BELOCURA I. the controversy was submitted for voluntary arbitration. the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. Separation pay should be awarded to petitioners at the rate of one month salary for every year of service.110.383.

Hence. Issues: 1. 2005 Concept: Definition of field personnel in Book III. Autobus presented copies of letters. Along the routes that are plied by these bus companies. Facts: Since 24 May 1995. G. Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the rules shall justify an employer in withdrawing or reducing any benefits. employees engaged on task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service incentive leave. Bautista instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay against Autobus. They too. Whether or not the money claim is now barred by prescription 56 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . Rather. Art. was therefore under constant supervision while in the performance of this work. memos. gross negligence. Lastly. On January 3. Bautista. The driver. 2000. and warrants of arrest pertaining to several incidents wherein Bautista was involved. whether or not there are problems thereon as reported by the driver and/or conductor. unless. May 16. After a month. No. 7% of the total gross income per travel. respondent is not a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner's business. 82 of the Labor Code. and dishonesty. shall be resolved in favor oflabor. Bautista further alleged that he was not allowed to work until he fully paid the amount of P75. Coverage. the punched tickets. Bautista is entitled to the grant of service incentive leave 2. irregularity reports. For the working man's welfare should be the primordial and paramount consideration. Autobus Transport System vs. Rule V: SERVICE INCENTIVE LEAVE. February 2. as they generally observe prompt departure and arrival from their point of origin to their point of destination.1187 and service incentive leave computed at P13. Rule V: SERVICE INCENTIVE LEAVE SECTION 1.50. are present in the case at bar. supplements or payments for unworked regular holidays as provided in existing individual or collective agreement or employer practice or policy. purely commission basis" must not be understood as a separate classification of employees to which service incentive leave shall not be granted. Autobus avers that in the exercise of its management prerogative. In order to conclude whether an employee is a field employee. 2000. 156364. he accidentally bumped the rear portion of another bus owned by petitioner Autobus. should be interpreted with the definition of field personnel in Art. There is also the mandatory once-a-week car barn or shop day. it serves as an amplification of the interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable certainty". and hydraulic aspects. According to the observations by the Labor Arbiter. Bautista's employment was terminated only after the latter was provided with an opportunity to explain his side regarding the accident on January 3. These. there are its inspectors assigned at strategic places who board the bus and inspect the passengers. Whether or not Bautista's employment as driver-conductor of Autobus can be classified as field personnel (one of the exceptions to the employees entitled to service incentive leave) Ruling: NO Book III. management sent him a letter of termination. they fall under the classification of field personnel. where the bus is regularly checked as to its mechanical. which was dismissed. Autobus allege that Bautista's employment was replete with offenses involving reckless imprudence. it is necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. Therefore. the same was ignored by management. The Labor Arbiter found that the complaint for illegal dismissal has no leg to stand on but ordered Autobus to pay 13th month pay worth P78. Autobus not satisfied with the partial grant brought a petition with the CA. The rule on ejusdem generis that general and unlimited terms are restrained and limited by the particular terms that they follow should be applied. must be at a specific place at a specified time. 6.788.551. 2000.R. 82 of the Labor Code: "field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Inc as driver-conductor paid by commission basis. there is always the Dispatcher whose function is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper time. respondent Bautista has been employed by Auto Bus Transport Systems. provisions in their CBA showed that the petitioner had obligated itself to pay for the legal holidays as required by law. — This rule shall apply to all employees except: (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis. On. representing thirty percent (30%) of the cost of repair of the damaged buses and that despite respondent's pleas for reconsideration. 11. NLRC upon appeal. It is necessary to stress that the definition of a "field personnel" is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee's performance is unsupervised by the employer. and the conductor's reports. Sec.implementing rules and regulations. electrical. or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof The phrase "other employees whose performance is unsupervised by the employer" and "those who are engaged on task or contract basis. Furthermore. modified the decision of the Labor Arbiter by deleting the award of 13th month pay by virtue of The Rules and Regulations Implementing PD 851 stating that employees who are paid on purely commission are one of the exceptions of employees to be paid a 13th month pay. In each and every depot. Rule IV. purely commission basis.

Having none. San Miguel Corp. 13. The cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation. respondent was refused entry to petitioner’s premises. Furthermore. such as service incentive leave pay and 13th month pay computed from such date up to her actual reinstatement. for purposes of the Labor Code. his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave. Bautista had filed his money claim after only one month from the time of his dismissal. holding that respondent is a regular employee whose termination from employment was valid but ineffectual for petitioner’s failure to comply with the 30-day notice to the employee and DOLE. This construal. however. to wit. petitioner presented an affidavit of its Sales Manager and a memorandum of the company both to the effect that there is a need to redeploy its regular employees and terminate the employment of temporary employees. 2. otherwise. 2001. otherwise. shall be presumed to be paid for all the days in the month whether worked or not. Dec. 57 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . G. 3) If so. 2005 Facts: Respondent was employed by petitioners as key account specialist. In the case at bar. No. NLRC: Modified the decision of LA. It is settled jurisprudence that a cause of action has three elements. Petitioner informed respondent that her probationary employment will be severed at the close of the business hours of March 12. WON is entitled to any monetary benefit Ruling: 1. do not satisfy the requirement of substantial evidence that a reasonable mind might accept as adequate to support a conclusion. Labor Arbiter: Declared respondent a regular employee because her employer exceeded 6 months and holding that she was illegally dismissed as there was no authorize cause to terminate her employment. in view of an excess in manpower. Respondent was illegally dismissed. her dismissal would be illegal. if the employee entitled to service incentive leave does not use or commute the same. exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. the workingman's welfare should be the primordial and paramount consideration. As a regular employee. she is likewise entitled to other benefits. 2) WON respondent was illegally dismissed. namely. The best proof that petitioner should have presented to prove the probationary status of respondent is her employment contract. if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment.R. Respondent is a regular employee. and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. Petitioner: Claimed that respondent was a probationary employee whose services were terminated as a result of the excess manpower that could no longer be accommodated by the company. Respondent: Filed a complaint against petitioner for illegal dismissal and underpayment/non-payment of monetary benefits. Under Section 2. Having ruled that respondent is a regular employee. the employee may choose to either use his leave credits or commute it to its monetary equivalent if not exhausted at the end of the year. vs. he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave. Rule IV. she is entitled not only to reinstatement but also to payment of full backwages. irrespective of the number of working days therein. her termination from employment must be for a just or authorized cause. Book III of the Omnibus Rules Implementing the Labor Code. Del Rosario. but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the employee's services.Ruling: NO Article 291 of the Labor Code states that all money claims arising from employer-employee relationship shall be filed within three (3) years from the time the cause of action accrued. Redundancy. computed from the time her compensation was actually withheld up to her actual reinstatement. Respondent entitled not only to reinstatement but also to backwages. Respondent alleged that petitioner feigned an excess in manpower because after her dismissal. Jerome Sanchez and Marilou Marfil and re-employed two of her batch mates. The burden of proving the circumstances that would justify the employee’s dismissal rests with the employer. his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code. Issues: 1) WON respondent is a regular employee of petitioner. On March 13. Accordingly.2001. The three (3)-year prescriptive period commences. Rosendo To and Ruel Rocha. Therefore. (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created. She is however not entitled to holiday pay because records reveal that she is a monthly paid regular employee. the continuous employment of respondent as an account specialist for almost 11 months means that she was a regular employee and not a temporary reliever or a probationary employee. 3. it hired new recruits. These documents.. CA: Reinstated the decision of LA. they shall be forever barred. but deleted the award for holiday pay for lack of basis. 168194. (2) an obligation on the part of the named defendant to respect or not to violate such right. employees who are uniformly paid by the month. finding her to be an illegally dismissed regular employee. is in keeping with the rudimentary principle that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations. 7. Considering that respondent was illegally dismissed. In the case of service incentive leave.

No. Temporary closure of BPC did not terminate his employment. their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof. which also takes him out of the coverage of labor standards. 159577. Due to the insistence of complainant. 1. No. 147420. common. NLRC. he was paid his separation benefits. To follow-up supply of waste and other materials for fuel.. No. he was. On the basis of the foregoing. 82). and Odango vs. 2004 58 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . check and monitor manpower workmanship as well as operation of boiler and accessories. To check water from the boiler. To supply the required and continuous steam to all consuming units at minimum cost.R. night shift differentials and finally claimed for payment of damages and attorney’s fees having been forced to litigate the present complaint. He opted to sever employment when he insisted payment of his separation benefits. Managerial staff members are not entitled to the provisions in on the law on labor standards. he is not entitled to overtime pay and premium pay for working on rest days. After the parties failed to settle amicably. To train new employees for effective and safety white working. employee entitled to monetary benefits under Art. NLRC: Deleted the award of overtime pay and premium pay for working on rest days. 2) WON Penaranda is entitled to the payment of Overtime Pay and Other Monetary Benefits Ruling: Petition is not meritorious. Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its general manager. The IRR of the Labor Code states that managerial employees are those who meet the following conditions: a. Furthermore. To recommend personnel actions such as: promotion. 6. or (b) execute under general supervision work along specialized or technical lines requiring special training.” Facts: Sometime in June 1999. they have the authority to hire or Dre other employees of lower rank. June 10. c. petitioner was a managerial employee. 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 In line with this. citing Wellington Investment vs. 283 of the Labor Code. feedwater and softener. premium pay for working during holidays/rest days." 1. they customarily and regularly direct the work of two or more employees therein. LEYECO IV Employees Union-ALU. before NLRC.R. 9. Contention of BPC: Complainant’s separation from service was done pursuant to Art. 10. 7. and (3) above. Implement Chemical Dosing. 2. 8. hence he need not reapply when BPC reopened. 2007. 3. being a managerial employee he is not entitled to overtime pay and if ever he rendered services beyond the normal hours of work. To evaluate performance of machinery and manpower. 1577745. (2). Trajano. (2) Customarily and regularly exercise discretion and independent judgment. 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” (Art. or (c) execute under general supervision special assignments and tasks. October 19. Penaranda vs. (3) (a) 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. G. complainant failed to reapply. he was a member of the managerial staff. 82. 5. Since petitioner belongs to this class of employees. petitioner Charlito Peñaranda (Foreman/Bouler Head/Shift Engineer) was hired as an employee of BPC to take charge of the operations and maintenance of its steam plant boiler. Perform other task as required by the superior from time to time. not terminated from employment much less illegally. Labor Arbiter: There was no illegal dismissal and that complaint was premature because he was still employed by BPC. 9. Recommend parts and suppliers purchases. May 3. the Court finds no justification to award overtime pay and premium pay for rest days to petitioner. 2006 “Managerial employees and members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. 4. b. the labor arbiter directed the parties to file their opposition papers and submit supporting documents. G. Contention of Peñaranda: Alleged that his services were terminated without the benefit of due process and valid grounds in accordance with law. Leyte IV Electric Cooperative Inc vs. saying that petitioner was not entitled to these awards because he was a managerial employee CA: Denied reconsideration on the ground that petitioner still failed to submit the pleadings filed before the NLRC Issue: 1) WON Penaranda is a regular.R. Hence. BPC was on temporary closure due to repair and general maintenance and it applied for clearend with DOLE-RO XI to shut down and to dismiss employees. Furthermore. when BPC partially reopened. there was no office order/or authorization for him to do so. or knowledge. regenerate softener if beyond hardness limit. A managerial staff has the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of the employer. Baganga Plywood Corp. he was not paid his overtime pay. Hudson Chua. 2. and (4) who do not devote more than 20 percent 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). or disciplinary action. 245 SCRA 561 [1995]. experience. However. To supervise. However.8. In May 2001. G.

“The proper remedy from decisions of voluntary arbitrators is a petition for review under Rule 43 of the Rules of Court. the 51 unworked Sundays and the 51 unworked Saturdays. Thus.. CA: Dismissed petitioner’s petition. the vessel's master conducted an inquisitorial hearing to investigate the said incident.Bahia Shipping Services vs. 1. petitioner’s reply thereto and respondent’s rejoinder. reasoning that the recourse from a Voluntary Arbitrator is a petition for review under Rule 43 of the 1997 Rules of Procedure. respondent was dismissed from the service on the strength of an unsigned and undated notice of dismissal. it is absurd to grant respondent's claim of non-payment when they in fact admitted that they were being paid all of the days of the month even if not worked. 2 days thereafter. Petitioner appealed to the NLRC but it affirmed the decision of the LA with modifications. Obviously. In granting respondent's claim of non-payment of holiday pay.393. the proper remedy from an award of a voluntary arbitrator is a petition for review to the CA. On February 15. 1996 to July 17. hence. the employees are already paid their regular and special days. Issues: WON the CA erred in rejecting the petition for certiorari under Rule 65 of the Rules of Court filed by petitioner to assail the Decision of the Voluntary Arbitrator. for arbitration of the NCMB RO-VIII. 1997. 2008. entitlement to such benefit must first be established. thus with said formula. through its legal counsel. 195 SCRA 533 [1998] Doctrine: Although an employment contract may guarantee the right to overtime pay. or Rule 43 of the Rules of Civil Procedure. Chua. After exhausting the procedures of the grievance machinery. through Regional VP Vicente Casilan. his decisions and awards are appealable to the CA. Contention of Respondent: Alleged that it is not prevented from making separate demands for the payment of regular holidays concomitant with the provisions of the CBA. and several pay slips. The next day. Ruling: The general rule is that the proper remedy from decisions of voluntary arbitrators is a petition for review under Rule 43 of the Rules of Court. as a restaurant waiter on board a luxury cruise ship liner for a period of nine (9) months from October 18. which case was assigned to a Labor Arbiter (LA). respondent Reynaldo Chua the sum of US$1. The LA rendered a decision holding petitioner liable to respondent for illegal dismissal and unauthorized deductions. 1998. the respondent filed a complaint for illegal dismissal and other monetary claims. 1997. sent a reply to Casilan. otherwise the same cannot be allowed. which provided for a uniform procedure for appellate review of all adjudications of quasi-judicial entities. sent a letter to petitioner demanding holiday pay for all employees. Facts: Respondent Reynaldo Chua was hired by the petitioner shipping company. explaining that after pursuing all available pay slips.R. 1997. No. 1997. Petitioner then went to the CA 59 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . 162195. On March 24. the Voluntary Arbitrator should not have simply brushed aside petitioner's divisor formula. covering petitioner rank-and-file employees. a "double burden" was imposed upon petitioner because it was being made to pay twice for its employees' holiday pay when payment thereof had already been included in the computation of their monthly salaries. Hence. a voluntary arbitrator enjoys a status of a quasi-judicial agency. 10. board or officer exercising judicial or quasi-judicial functions acted in total disregard of evidence material to or decisive of the controversy. Moreover. the Voluntary Arbitrator sanctioned unjust enrichment in favor of the respondent and caused unjust financial burden to the petitioner. April 8. Therefore. Contention of Petitioner: Insisted payment of the holiday pay in compliance with the CBA provisions. In the case of Luzon Development Bank. the present petition for certiorari under Rule 65 should be rejected.054. Petitioner. it found that it had paid all employees all the holiday pays enumerated in the CBA. the days when no work is done. Such literal interpretation ignores the admission of respondent in its Position Paper that the employees were paid all the days of the month even if not worked. a computation in the amount of 1. Voluntary Arbitrator: Decided in favor of respondent. petitioner and respondent entered into a CBA. Bahia Shipping Services. which is embedded in Section 1. 1998. Petitioner and its foreign principal were directed to pay jointly and severally. as provided for in the CBA. Inc. Respondent. the master of the vessel served to the respondent an official warning-termination form pertaining to the said incident. reasoning that petitioner failed to show that it complied with the CBA mandate that holiday pay be reflected during any payroll period of occurrence since the payroll slips did not reflect any payment of the paid holidays. the parties agreed to submit the issue of the interpretation and implementation of the CBA on the payment of holiday pay. On March 8. citing Cagampan vs. By granting respondent's claim. “ Facts: On April 6. The Voluntary Arbitrator gravely abused its discretion in giving a strict or literal interpretation of the CBA provisions that the holiday pay be reflected in the payroll slips. for the unpaid legal holidays. stating that payment was presumed since the formula used in determining the daily rate of pay of the covered employees is Basic Monthly Salary divided by 30 days or Basic Monthly Salary multiplied by 12 divided by 360 days. G. for a period of 5 years effective Jan. the Court cannot allow this. This ruling has been repeatedly reiterated in subsequent cases and continues to be the controlling doctrine.230 representing his salary for the unexpired portion of the contract of employment limited to 3 months under RA 8042. NLRC. a special civil action for certiorari under Rule 65 of the Rules of Court is the proper remedy for one who complains that the tribunal. Nonetheless. the respondent reported for his working station one and one-half hours late. with its supporting documents consisting of a letter demanding payment of holiday pay. as such a petition cannot be a substitute for a lost appeal.

it is well within the power and authority of an employer to impose certain conditions. after respondent's repatriation. 198662. being the law between the parties. RMN alleged that Ybarola and Rivera each received a monthly salary of P9. CA: The CA set aside the assailed NLRC disposition. but a prerogative of management. PNCC Skyway Traffic Management and Security Division Workers Organization. 2002. 171231. respondent appealed to the CA which annulled the decision of the VA hence the current petition. respectively. vs. In the grant of vacation leave privileges to an employee. FACTS: RMN hired Ybarola and Rivera on June 15. Issue: Whether it is the prerogative of respondent PNCC to schedule the vacation leave of its employees Ruling: YES. It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee. In fine. In a Memorandum dated December 29. On November 15. petitioner elevated the matter to the DOLE-NCMB for preventive mediation. Aggrieved. 1983. the employer is given the leeway to impose conditions on the entitlement to and commutation of the same. Voluntary Arbitrator (VA) rendered a decision.250 and P481. their employment was terminated due to the reorganization of the company. the respondent did not accede to petitioner's demands and stood firm on its decision to schedule all the vacation leave of petitioner's members. the contested provision of the CBA is clear and unequivocal. Petitioner objected to the implementation of the said memorandum. No. Facts: Petitioner PNCC Skyway Corporation Traffic Management and Security Division Workers' Organization (PSTMSDWO) is a labor union duly registered with the DOLE. Due to the disagreement between the parties. However. G. 2010 Doctrine: Where the language of a CBA is plain and unambiguous.which rendered a decision affirming the NRLCs decision hence the current petition. Thus. petitioner and respondent entered into a CBA incorporating the terms and conditions of their agreement which included vacation leave and expenses for security license provisions. The rule is that where the language of a contract is plain and unambiguous. in the instant case. One of the provisions contained therein provides that: The Company shall schedule the vacation leave of employees during the year taking into consideration the request of preference of the employees. Hence. 2002. Issue: Whether respondent is entitled to overtime pay which was incorporated in his award for the unexpired portion of the contract despite the fact that he did not render overtime work. They were given separation pay of only P631. Ybarola. as it deems fit. Thus. et al. Sept. Respondent is not entitled to overtime pay which was incorporated in his award for the unexpired portion of the contract.250. its meaning should be determined without reference to extrinsic facts or aids. However. on the grant of vacation leaves. but a prerogative of management. their average salary rates as account managers were P60. Their commissions were merely profit-sharing bonuses. It pointed out that. NLRC: The Labor Arbiter ordered the payment of additional separation pay.. The CBA categorically provides that the scheduling of vacation leave shall be under the option of the employer.000 and P40.000 respectively. At the time. s 12. Furthermore. It ruled that bonuses are not included in the computation of separation pay. the CBA must be strictly adhered to and respected if its ends have to be achieved. Jr. thus: The scheduling of all vacation leaves shall be under the discretion of the union members entitled thereto. he could not have rendered any overtime work. Respondent PNCC Skyway Corporation is a corporation duly organized and operating under and by virtue of the laws of the Philippines. 2003. the parties agreed to submit the issue before the voluntary arbitrator. It insisted that the individual members of the union have the right to schedule their vacation leave. if the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties. the National Labor Relations Commission (NLRC) dismissed the complaint for lack of merit. the commissions were earned by actual 60 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . On September 15. They later filed cases for illegal dismissal with money claims. the literal meaning of its stipulation shall prevail. 11. the inclusion of his "guaranteed overtime" pay into his monthly salary as basis in the computation of his salaries for the entire unexpired period of his contract has no factual or legal basis and the same should have been disallowed. 1977 and June 1. in the grant of vacation leave privileges to an employee. 2012 CONCEPT: Commissions based on actual market transactions attributable to an employee’s actions forms part of that employee’s separation pay. its meaning should be determined without reference to extrinsic facts or aids. Radio Mindanao Network Inc. GR No. In the case at bar. as the grant of vacation leave is not a standard of law. Feb. as the grant of vacation leave is not a standard of law. the employer is given the leeway to impose conditions on the entitlement to and commutation of the same. Although an overseas employment contract may guarantee the right to overtime pay. For failure to settle the issue amicably. respondent's Head of the Traffic Management and Security Department (TMSD) published the scheduled vacation leave of its personnel for the year 2004.R. RMN argued that Ybarola and Rivera signed the release/quitclaim affidavits voluntarily. otherwise the same cannot be allowed. Argument of Petitioner: Petitioner contends that there is no factual or legal basis for the inclusion of said amount because. It is the prerogative of PNCC to schedule the vacation leave of its employees. The preference requested by the employees is not controlling because respondent retains its power and prerogative to consider or to ignore said request. it being improbable that respondent rendered overtime work during the unexpired term of his contract.177 as shown by the payrolls. entitlement to such benefit must first be established. 17. Ruling: NO. 12. Ybarola and Rivera executed release/quitclaim affidavits a few months after.

4. W/N Villa is entitled to SILP. His claim for retirement benefits should have prescribed. GR No. ISSUES: 1. FACTS: Bernardo taught as a part-time professional lecturer at DLS-AU since 1974. Ybarola and Rivera were given only half of the amount they were legally entitled to.177. It deemed the advice given to Villa—that is. Otherwise. which ordered the payment of backwages. W/N employees' commissions were profit-sharing bonuses 2. NO. RULING: 1. Considering their lengths of service— 25 years and 19 years. Although Villa applied for early retirement. She explained that the delivery receipts were not given to her on time and were overlooked. respectively—this is unconscionable. In 2001. W/N Bernardo’s claim has prescribed 3. not during appeal. In fact. 13. Robina Farms Cebu vs. she was informed that her application had been denied and was advised to tender a resignation with a request for financial assistance. W/N Villa had been illegally dismissed. Bernardo filed a complaint for non-payment of retirement benefits and damages. Dela Salle Araneta University vs. DLS-AU argued that Bernardo was not covered by the law since he was a part-time employee. April 18. NO. The employer is still obliged to prove that it fully paid the accrued service incentive leave pay to the employee. Bernardo. Profit-sharing bonuses are usually distributed equally. W/N employees who signed release/quitclaim affidavits may still recover RULING: 1. W/N Villa is entitled to her overtime pay. CA: The CA affirmed in toto the NLRC judgment. The latter was computed based on daily time records (DTRs). prompting this case for illegal dismissal. The offer of benefits must be certain while the acceptance to be retired should be absolute. This was modified by the NLRC. 14.market transactions attributable to the Ybarola and Rivera. After she applied for the program. 4. These commissions form part of their wages and should be included in the computation of separation pay. Yet. The burden of proving entitlement to overtime pay rests on the employee. Furthermore. Robina Farms did not admit Villa back to work after her suspension. Thus. most of their pay comes from commissions. NLRC: The Labor Arbiter ordered Villa’s reinstatement.” When the school refused to pay. 2002. to tender a resignation letter—as constructive dismissal. 2003. 2017 CONCEPT: Part-time employees receive retirement benefits. also known as the "New Retirement Law. Retirement is the result of a bilateral act of both the employer and the employee based on their voluntary agreement.50 per hour. 190809. 2. Robina Farms argued that Villa was merely angry because her application for the special retirement program was denied. Yet. 10 years have passed since then. part-time employees are covered under RA 7641. the retirement is involuntary and renders the employer liable for termination without cause. W/N part-time employees receive retirement benefits despite a lack of CBA 2. Despite her intention to continue work. DOLE informed him that he was entitled to receive benefits under RA 7641. though they received a guaranteed P9. 2. Reliance on daily time records is misplaced. A release/quitclaim affidavit is only valid when the employee is not shortchanged and no essential unfairness took place. she was suspended from March 8 to March 19. Robina Farms prevented her from doing so. several company officers advised her to tender a resignation letter with request for financial assistance. ISSUE: 1. Villa received a memo inquiring on her failure to issue invoices for unhatched eggs in January to February 2002. the company enticed her to avail of a special retirement program with higher benefits. all money claims shall be filed within three years from the time the cause of action accrues. FACTS: Villa worked for Robina Farms since August 1981. CA: The CA dismissed Robina Farms’s appeal. since as employee can render overtime work only when there was a prior authorization therefor by the management. but denied her monetary claims. she did so upon the belief that she would receive a higher benefit based on Robina Farms’s offer. 3. These acts are strong indication that petitioners wanted to sever the employer-employee relationship. they form a part of their salaries and separation pay. W/N Villa’s application for the special program shows her intention to retire early. 3. GR No. February 13. YES. NO. YES. Upon returning. DLS-AU informed him that he could not teach anymore due to the retirement age limit. 2. 175869. NLRC: The Labor Arbiter dismissed Bernardo’s complaint on the ground of prescription. Ybarola and Rivera received different amounts depending on the number of transactions they were able to accomplish. Bernardo was 75 years old at the time and was being paid P246. the offer of increased benefits must be certain while the acceptance to be retired should be absolute. service incentive leave pay (SILP) and overtime pay. This variance supports the finding that. Villa. On November 8. W/N the doctrine of equitable estoppel applies RULING: 61 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . YES. 2016 CONCEPT: For early retirement to be valid. The school further averred that Bernardo’s employment bond was severed when he reached the mandatory retirement age of 65. ISSUE: 1. This evidence should be presented in the proceedings before the Labor Arbiter. This was reversed by the NLRC. because under Article 291 of the Labor Code. It held that the school is estopped from claiming prescription because it permitted Bernardo to work beyond the mandatory retirement age.

Vacation Leave. the basis in computing his retirement benefits is his latest salary rate as the commissions he received are in the form of profit-sharing payments specifically excluded by Section 5 of Rule II of the Rules Implementing the New Retirement Law. or capacity for revenue production. Conversely. Samahan ng Mga Manggagawa sa Arco Metal-NAFLU. NLRC et al. The third element occurred when DLS-AU refused to pay Bernardo's retirement benefits. For the principle of equitable estoppel to apply. nor profit-sharing payments nor any other fringe benefit. A cause of action has three elements: (a) a right in favor of the plaintiff. were properly included in the term basic salary for purposes of computing the 13th month pay. the only employees exempted from retirement pay are: (1) those of the National Government and its political subdivisions. Further. G. Duplicators vs. No. its Implementing Rules. Dela Serna. YES. 3. 1996 Labor Advisory. kept its silence that Bernardo had already reached the compulsory retirement age of 65 years old. Reyes disagreed with the manner the company computed his separation pay.. Inc. then petitioner would receive no commissions at all. The court distinguished its conflicting decisions between Philippine Duplicators Case and Boie-Takeda Case. of the actual facts. which are generally tied to the productivity. actual or constructive. Medical representatives are not salesmen. if no collections were made by the salesmen. Petitioner filed for optional retirement upon reaching the age of 60. 160233.OTHER SPECIAL BENEFITS CASES: 1. August 8. SC ruled that commissions should be excluded. In this case. Insisting that his retirement benefits and 13thmonth pay must be based on the average monthly salary which consists of basic salary and average monthly commission. but merely supervised the salesmen under his control. It even continuously offered him contracts of employment for the next 10 years. 2.R. commissions paid by the Boie-Takeda Company to its medical representatives could not have been sales commissionsin the same sense that Philippine Duplicators paid the salesmen their sales commissions. or at least expectation that this conduct shall be acted upon. comprising a predetermined percentage of the selling price of the goods sold by each salesman.. but a portion of the salary structure which represents an automatic increment to the monetary value initially assigned to each unit of work rendered by a salesman. and sick leave) regardless of actual service they rendered within a year. of a corporation and such bonuses closely resemble profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done by each individual employee. 10. (b) an obligation on the part of the defendant to respect or not to violate such right. and (c) knowledge. Only when the salesmen were able to collect from the sale transactions can petitioner receive the commissions. citing Boie Takeda Chemicals vs. May 14. DLS-AU. Since part-time employees are not among those specifically exempted. NO. Labor Arbiter: Sales commission is part of the basic salary of a unit manager NLRC: Modified the decision of the Labor Arbiter by excluding the overriding commission in the computation of the retirement benefits and 13th month pay ISSUE: Should the overriding commission be included in the computation of the retirement benefits and 13th month pay? RULING: NO. The collection made by the salesmen from the sale transactions was the profit of private respondent from which petitioner had a share in the form of a commission. 170734. No. Only then did the period of prescription begin to run. and the October 24. Nondiminution of Benefits FACTS: 62 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . et al. the disputed commissions were not regularly received by him. (b) intent. direct or necessary relation to the amount of work he actually performed. Bernardo’s claim stands. the so-called commissions paid to or received by medical representatives of Boie-Takeda Chemicals or by the rank and file employees of Philippine Fuji Xerox Co. YES. Based on RA 7641. 2008 CONCEPT: Company practice of giving full benefits (13th month pay. Instead he filed a case for recovery of these monetary claims. NLRC. including government-owned and/or controlled corporations. or at least influenced by the other party. the salesmen’s commissions. there must be (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than.. they do not effect any sale of any article at all. In Philippine Duplicators Case. Under expressio unius est exclusio alterius. 241 SCRA 380 [1995] CONCEPT: Computation of Retirement Pay FACTS: Reyes was a salesman at Universal Robina’s Grocery Division in Davao City. service and agricultural establishments or operations regularly employing not more than 10 employees. 228 SCRA 329 [1993] & Phil. The salesmen’s commission are not overtime payments. Reyes vs. he refused to accept payment. 2. if they are covered by the Civil Service Law and its regulations. However..R. vs.1. and (2) those of retail. In fine. 2007. those which the party subsequently attempts to assert. the commissions which petitioner received were not part of his salary structure but were profit-sharing payments and had no clear. In this case. Aside from the fact that as unit manager petitioner did not enter into actual sale transactions. and (c) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. and inconsistent with. Arco Metal Products Co.. In Boie-Takeda Case. G. He became unit manager of Sales Department-South Mindanao and remained such until his retirement. were excluded from the term basic salary because these were paid to the medical representatives and rank-and-file employees as productivity bonuses. It should not be allowed to escape its obligation to pay Bernardo's retirement benefits.

and leave encashment of three union members in amounts proportional to the service they actually rendered in a year. ISSUE: Whether or not the prorated payment of the benefits constitute a violation under Art. had made payments to some employees who did not render one year service without pro-rating. Universal Robina Sugar Milling Corp. Thus. Sometime in December 2003. petitioner paid the 13th month pay. vs. Republic Act No. the company and NFL (bargaining agent) entered into a CBA. John Gokongwei. The law has been enacted as a labor protection measure and as a curative statute that absent a retirement plan devised by. whereas respondent is the labor union of petitioner’s rank and file employees. Found that there is no existing CBA or employment contract between the parties that provides for early compulsory retirement. President of URSUMCO issued a memorandum establishing the company policy on Compulsory Retirement. The other benefits were also to be computed in proportion to the length of service of the employee. 1993. 1997 while respondent Alejandro Cadalin worked for URSUMCO as crane operation from 1976 up to June 15. or a voluntary grant from. has retroactive effect. Agripino filed a complaint for illegal dismissal because his compulsory retirement was in violation of the provisions of RA 7641 and. 156644. In 1993. Whether RA 7641 can be given retroactive effect? YES 2. they filed a complaint before the National Conciliation and Mediation Board (NCMB). Caballeda. which is less than a full twelve (12) months. Ordered petitioner to pay benefits in full irrespective of actual services rendered within a year. In those years. 1992. July 28. as a social legislation. voluntarily and consistently granting full benefits to its employees regardless of the length of service rendered. having reached the age of 60. Jr. Caballeda and Cadalin. Whether or not Agripino Caballeda and Alejandro Cadalin voluntarily retired from the service? NO RULING: First issue: RA 7641. VOLUNTARY ARBITRATOR: Ruled in favor of petitioner. CA: Petitioner had an existing voluntary practice of paying such benefits in full to its employees. The voluntary grant of the benefits has been an established company practice. True. The principle of non-diminution of benefits is founded on the Constitutional mandate to "protect the rights of workers and promote their welfare. 1991 shall be considered retired on May 31. 1991. ISSUES: 1. an agreement with. claiming that on several occasions petitioner did not prorate the payment of the same benefits to seven (7) employees who had not served for the full 12 months. 7641 was enacted into law and it took effect on January 7. The giving of benefits irrespective of the actual service has not ripened into a practice. The parties submitted the case for voluntary arbitration. Jurisprudence has not laid down any rule specifying a minimum number of years within which a company practice must be exercised in order to constitute voluntary company practice.” and “to afford labor full protection. G. No. on December 9. CA: Declared that URSUMCO illegally dismissed the respondents since the Memorandum unilaterally imposed upon the respondents compulsory retirement at the age of 60. such as the names of other employees who did not fully serve for one year and thus were given prorated benefits. the prorated payment violates the rule against diminution of benefits under Article 100 of the Labor Code. Meanwhile.R. was in effect. Respondent protested the prorated scheme. SC ruled in favor of the respondents. amending Article 287 of the Labor Code. 100 of the Labor Code.” 3. NLRC: Reversed and held that Alejandro voluntarily retired because he submitted his application. It has been a company practice which grants full benefits to its employees regardless of the length of service rendered. Subsequently. including its implementing rules and regulations shall be rendered in favor of labor. RULING: YES. Dismissed the complaint for illegal dismissal. it had adopted a policy of freely. Petitioner is a company engaged in the manufacture of metal products.” Said mandate in turn is the basis of Article 4 of the Labor Code which states that “all doubts in the implementation and interpretation of this Code. were allegedly forced to retire pursuant to the company Memorandum earlier issued. an employer can 63 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . RA 7641 is undoubtedly a social legislation. in the past years. bonus. it could have easily presented other proofs. All employees corporate-wide who attain 60 years of age on or before April 30. under which the retirement benefits of the members of the collective bargaining unit shall be in accordance with law. 1997. 2008 CONCEPT: Compulsory and voluntary retirement FACTS: Respondent Agripino Caballeda worked as welder for Universal Robina Sugar Milling Corporation (URSUMCO) from March 1989 until June 23. LABOR ARBITER: Declared URSUMCO guilty of illegal dismissal. However Arco. there were only a total of seven employees who benefited from such a practice. a form of illegal dismissal. Later on. According to respondent. From a reading of the Collective Bargaining Agreement (CBA). if it wants to prove that it merely erred in giving full benefits. Indeed. one must have rendered at least one year of service. but it was an established practice nonetheless. They both accepted their retirement benefits. there is no doubt that in order to be entitled to the full monetization of sixteen (16) days of vacation and sick leave.

Thus. 4. Second Issue: Respondents were compulsorily retired. Under Art. in the absence of such agreement.A. On January 1. tantamount to illegal dismissal. There should be little doubt about the fact that the law can apply to labor contracts still existing at the time the statute has taken effect.6 UNIPROM reserved the option to retire employees who were qualified to retire under the program. Sometime in December 2000. we cannot simply assume that respondents were not subjected to the very same pressure. while the set minimum age for optional retirement is 60 years. but not beyond 65 years. the legally mandated age for compulsory retirement is 65 years. the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees.5 Under the revised retirement plan.R. we must apply Art. she was promoted as cashier and then as clerk typist. warranting the retroactive application of R. On April 1. The age of retirement is primarily determined by the existing agreement between the employer and the employees. and that its benefits can be reckoned not only from the date of the law's enactment but retroactively to the time said employment contracts have started. thus. in part at least. Uniprom. That prerogative is exclusively lodged in the employee. respond. wholly incompatible to petitioners' assertion that respondents voluntarily retired. this is a manifestation that respondents had no intention of relinquishing their employment. Cercado vs. the aforementioned requisites were adequately satisfied. Retirement is the result of a bilateral act of the parties. petitioners failed to establish all the requisites that would render a quitclaim valid. 1978 as a ticket seller assigned at Fiesta Carnival. UNIPROM amended the retirement plan in compliance with Republic Act (R. to the financial wellbeing of workers during their twilight years soon following their life of labor. Respondents did not voluntarily retire but were forced to retire. Inc. only Alejandro was able to claim a partial amount of his retirement benefit. NB: That prerogative is exclusively lodged in the employee) Generally.A. petitioners have the burden of proof that the quitclaim was voluntarily entered to. 287 of the Labor Code as amended. Retirement is the result of a bilateral act of the parties. including herein petitioner. while the set minimum age for optional retirement is 60 years. sustain the ruling of the CA that respondents did not voluntarily retire but were rather forced to retire. it is clear from the decisions of the LA. it may be stressed that the CBA does not per se specifically provide for the compulsory retirement age nor does it provide for an optional retirement plan. Absent any convincing proof of voluntariness in the submission of the documentary requirements and the execution of the quitclaim. 60 years or more. may be retired at his option or at the option of the company. However. No. (UNIPROM) on December 15. G. It merely provides that the retirement benefits accorded to an employee shall be in accordance with law. The Court imposed two (2) essential requisites in order that R. The age of retirement is primarily determined by the existing agreement between the employer and the employees. Later on. 7641 may be given retroactive effect: (1) the claimant for retirement benefits was still in the employ of the employer at the time the statute took effect.12 64 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . October 13. the retirement age shall be fixed by law. 7641 in this case. agrees to sever his or her employment with the former. 287 of the Labor Code which provides for two types of retirement: (a) compulsory (65). petitioner was not yet retired because she did not consented to the said agreement. It is evident from the records that when respondents were compulsorily retired from the service. 2010 Facts: Petitioner Lourdes A. To be precise. Respondents vigorously pursued this case all the way up to the Supreme Court. provided he has served at least five years in the establishment concerned. but she rejected the same. Inc. UNIPROM implemented a company-wide early retirement program for its 41 employees. a voluntary agreement between the employer and the employee whereby the latter. Araneta Center. Quezon City. 188154. Agripino was actually and totally deprived of his retirement benefit. who. and (b) optional (CBA. regardless of age. tantamount to illegal dismissal. In this case. employment contract. retirement plan. after reaching a certain age. R. and WON petitioner was validly retired pursuant thereto. at that time. UNIPROM instituted an Employees’ Non-Contributory Retirement Plan4 which provides that any participant with twenty (20) years of service. Furthermore.A.90. Thus. Cercado (Cercado) started working for respondent UNIPROM.) No. She was offered an early retirement package amounting to ₱171. On the other hand. However. NLRC and CA that petitioners are still liable to pay Alejandro the differential on his retirement benefits. the retirement age shall be fixed by law. thus. Under Art. In this case. 2001.982. after reaching a certain age. 7641 was already in full force and effect. 287 of the Labor Code as amended. Ruling: No. and (2) the claimant had complied with the requirements for eligibility for such retirement benefits under the statute. in the absence of such agreement. Labor Arbiters decision: The petitioner was illegally dismissed. agrees to sever his or her employment with the former. the legally mandated age for compulsory retirement is 65 years. Court of Appeal: CA set aside the decision of the LA and NLRC. with 22 years of continuous service to the company. 1980. NLRC Decision: The National Labor Relations commission affiremd the LA decision.A. Issues: 1) WON UNIPROM has a bona fide retirement plan. Without doubt. The court finds no reversible error and. a voluntary agreement between the employer and the employee whereby the latter. In sum. Respondent company was ordered to reinstate her with payment of full backwages. 7641. was 47 years old. The petitioners failed to prove that the respondents did not comply with the requirements for eligibility under the law for such retirement benefits.

and uncompelled. they are entitled for the additional separation pay. but ordered the payment of additional separation pay to the respondents – ₱ 490. et al. while the minimum age for optional retirement is set at 60 years. however. While an employer may unilaterally retire an employee earlier than the legally permissible ages under the Labor Code. because they failed to present proof that they earned the commission due to actual market transactions attributable to them. 7641. respectively.250.R. Article 297 of the Labor Code clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the 65 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . In this case. this kind of salary structure does not detract from the character of the commissions being part of the salary or wage paid to the employees for services rendered to the company.00.A. We reiterate the well-established meaning of retirement in this jurisdiction: Retirement is the result of a bilateral act of the parties.00 for Ybarola and ₱ 40.20 Acceptance by the employees of an early retirement age option must be explicit. Radio Mindanao Network Inc.55 for Rivera. Jr. In other words. Sometime in December 2002. The labor arbiter adjusted the separation pay award based on the respondents’ Certificates of Compensation Payment/Tax Withheld showing that Ybarola and Rivera were receiving an annual salary of ₱ 482. they were given only half of the amount they were legally entitled to. free. 6.r.. Jr. The motion raises substantially the same arguments presented in the petition and we find no compelling justification to grant the reconsideration prayed for. this prerogative must be exercised pursuant to a mutually instituted early retirement plan. plus. these advertisements are the "products" they sell. This has been upheld in numerous cases14 as a valid exercise of management prerogative.00 for Ybarola and ₱ 429. 198662.50 commissions. The petitioners insist that the respondents’ commissions were not part of their salaries. Dissatisfied with their separation pay.066. free to impose a retirement age earlier than the foregoing mandates. On July 18.. the respondents’ services were terminated as a result of RMN’s reorganization/restructuring.477. voluntary. For the option to be valid. yet. the respondents filed separate complaints (which were later consolidated) against RMN and its President. they executed release/quitclaim affidavits.517. 1983. given especially the respondents’ length of service – 25 years for Ybarola and 19 years for Rivera. 2013 Concepts: 1.Article 287 of the Labor Code. Rural bank of Nabunturan Inc.250. 2001 until the actual date of her reinstatement. they were given their separation pay – ₱ 631. a voluntary agreement between the employer and the employee whereby the latter. If reinstatement is no longer possible because the position that petitioner held no longer exists.000.303. after reaching a certain age. NLRC ruling: The NLRC set aside the labor arbiters decision and dismissed the complaint for lack of merit. They indicated that their monthly salary rates were ₱ 60. CA Ruling: The CA set aside the NLRC disposition. We find the motion for reconsideration unmeritorious. They submit that the commissions are profit- sharing payments which do not form part of their salaries. Eric S.00. Canoy. They eventually became account managers. et al. respectively. vs. 2007. Ybarola. On September 15. UNIPROM shall pay backwages as computed above. This is consistent with the preponderance of jurisprudence24 relative to the award of separation pay in case reinstatement is no longer feasible. Ybarola. and ₱ 481. by RMN. Rivera. No. soliciting advertisements and servicing various clients of RMN.00 for Rivera. An employer is.13 pegs the age for compulsory retirement at 65 years. they should have received the same amounts.000. the retirement plan containing it must be voluntarily assented to by the employees or at least by a majority of them through a bargaining representative. 199338. Ruling: Yes. 2012 Facts: Respondents Domingo Z. It reinstated the Labor Arbiters decision. 21. only the implementation and execution of the option may be unilateral. UNIPROM is guilty of illegal dismissal.11 and ₱ 586. a settlement under these terms is not and cannot be a reasonable one. as the CA noted. G. Jan. The variance in amounts the respondents received as commissions supports the CA’s finding that the salary structure of the respondents was such that they only received a minimal amount as guaranteed wage. Issue: WON Domingo Ybarola and Alfonzo Rivera are entitled for additional separation pay. Jr.00 for Rivera. G.173. Labor Arbiter Patricio Libo-on dismissed the illegal dismissal complaint. separation pay equivalent to one-month pay for every year of service. including attorney’s fees. No. 2002. thus. were hired on June 15. If these commissions had been really profit- sharing bonuses to the respondents. 1977 and June 1. agrees to sever his or her employment with the former.00 for Ybarola. but not the adoption and institution of the retirement plan containing such option. We are not convinced. in 2002. for illegal dismissal with several money claims. respectively. 5. in lieu of reinstatement. Ybarola and Rivera received ₱ 372. Petitioner is thus entitled to reinstatement without loss of seniority rights and to full backwages computed from the time of her illegal dismissal in February 16. No.998. the separation pay the respondents each received was deficient by at least ₱ 400. As the CA aptly noted. as the NLRC itself noted. To be sure. Padillo vs.000.61 and ₱ 697. September 12. and Alfonso E. a greater part of their income was derived from the commissions they get from soliciting advertisements. as amended by R.

the clear import of Padillo's September 10. considering as well the supervening length of time which had sadly overtaken the point of Padillo's death — an employee who had devoted twenty-nine (29) 66 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .70 as separation pay. as its SA Bookkeeper. On October 3. Respondents moved for reconsideration but the same was denied by the NLRC in its Resolution dated March 31. his request remained unheeded.Whether or not PADILLO is qualified to receive any retirement benefits under Article 300 Ruling 1. He wrote a letter addressed to respondent Oropeza expressing his intention to avail of an early retirement package.00 and which was set to mature on July 11. 2. No. with a fraction of at least six (6) months being considered as one whole year. fell short with respect to the sixty (60) year age requirement given that he was only fifty-five (55) years old when he retired. Padillo suffered a mild stroke due to hypertension which consequently impaired his ability to effectively pursue his work. 2007 letter and the fact that he stopped working before the foregoing date and never reported for work even thereafter show that it was Padillo who voluntarily retired and that he was not terminated by the Bank. NLRC's application of Abaquin was gravely misplaced considering its dissimilar factual milieu with the present case. 2007. Padillo was separated from employment due to his poor and failing health as reflected in a Certification dated December 4.000. Nevertheless. Not having received his claimed retirement benefits. thereby reinstating the Decision but with modification. . the Court concurs with the CA that financial assistance should be awarded but at an increased amount. It pronounced that separation pay on the ground of disease under Article 297 of the Labor Code should not be given to Padillo because he was the one who initiated the severance of his employment and that even before September 10. he already stopped working due to his poor and failing health Issues 1. given the inapplicability of Article 297 of the Labor Code to the case at bar. 2.health of his co-employees. receive any retirement benefits pursuant to Article 300 of the Labor Code considering that he was only fifty-five (55) years old when he retired. PP98013771 (Philam Life Plan) in favor of Padillo for a benefit amount of P100. Padillo should have met the age and tenure requirements set forth under Article 300 of LC to be entitled to the retirement benefits provided therein. Dissatisfied with the LA's ruling.00 as financial assistance. Due to liquidity problems which arose sometime in 2003. Facts The late Padillo. Relying on the case of Abaquin Security and Detective Agency. an employee must (1) retire when he is at least sixty (60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half (1/2) month salary for every year of service. Article 297 does not apply in this case. deprived of the right to ventilate demands collectively. Unfortunately. . 2009. he did so only because of his poor health condition. Plan Type 02FP10SC. considering that it was the petitioner and not the Bank who severed the employment relations. he was diagnosed with Hypertension S/P CVA (Cerebrovascular Accident) with short term memory loss. absent this equitable peculiarity. LA found Padillo disqualified to receive any benefits under Article 300 .Whether or not The Labor Code provision on termination on the ground of disease under Article 297 apply in this case. It likewise found the evidence insufficient to prove that the Bank has an existing company policy of granting retirement benefits to its aging employees. it applied the Labor Code provision on termination on the ground of disease — particularly. Padillo elevated the matter to the NLRC.903. All told. CA rendered a decision setting aside the Resolutions. During the latter part of 2007.000. It does not contemplate a situation where it is the employee who severs his or her employment ties. Aggrieved. it cannot be said that Padillo belonged to the same class of employees prohibited to self-organize. termination pay on the ground of disease under Article 297 of the Labor Code and the Court's ruling in Abaquin should not be applied. In this regard. that the Court merely awarded termination pay on the ground of disease in favor of security guard Antonio Jose because he belonged to a "special class of employees . Padillo a complaint for the recovery of unpaid retirement benefits. Despite several follow-ups. In Abaquin. NLRC's Fifth Division reversed and set aside the LA's ruling and ordered respondents to pay Padillo the amount of P164.000. Thus. LA dismissed Padillo's complaint but directed the Bank to pay him the amount of P100.The age and tenure requirements under Article 300 of the Labor Code are cumulative and non-compliance with one negates the employee's entitlement to the retirement benefits under Article 300 of the Labor Code altogether. Article 297— holding that while Padillo did resign. it necessarily follows that petitioners' claim for separation pay anchored on such provision must be denied. Art 300 of LC provides that in the absence of any applicable agreement. the Bank procured Philam Plan Certificate of Full Payment No. As borne from the records. Therefore. on top of the P100. Inc. 2009. In particular. 2010. Notably.00 as financial assistance exclusive of the P100. The CA held that Padillo could not.000. 2007 issued by the Bank. these age and tenure requirements are cumulative and non-compliance with one negates the employee's entitlement to the retirement benefits under Article 300 of the Labor Code altogether. the nature of which had been classified as a total disability. was employed by respondent Rural Bank of Nabunturan. With a veritable understanding that the award of financial assistance is usually the final refuge of the laborer. 88204.No. In this case. 2.000. absent any agreement with the Bank. however. treated as an advance from the amounts receivable under the Philam Life Plan. 2007. respondents filed a petition for certiorari with the CA. It does not contemplate a situation where it is the employee who severs his or her employment ties.00 Philam Life Plan benefit. Agreement No. It directed the respondents to pay Padillo the amount of P50.00 Philam Life Plan benefit which already matured on July 11. while Padillo was able to comply with the five (5) year tenure requirement — as he served for twenty-nine (29) years — he. A plain reading of the [Article 297 of the Labor Code] clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. the Bank took out retirement/insurance plans with Philippine American Life and General Insurance Company (Philam Life) for all its employees in anticipation of its possible closure and the concomitant severance of its personnel. in the absence of any applicable contract or any evolved company policy.

" The Court sees no reason to depart from this interpretation. P13. August 20.00. contrary to the provisions of Republic Act No. service allowance.5 days: 15 days plus 2. in the case of Elegir v. Nonetheless. The Court.662. the retirement package consists of 15 days salary. CA affirmed with modification the NLRC's Decision.5 days: 15 days plus 2. it computed Filipinas' retirement benefits differential as follows: Monthly salary P13. the term "one-half month salary" shall include all the following:… 67 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .5 = P13.5 days representing one-twelfth of the 13th month pay.00. and attorney's fees against GCHS and/or its principal. in light of the dictates of social justice. plus 13th month pay and SIL pay pro-rated to their one-twelfth (1/12) equivalent. — For the purpose of determining the minimum retirement pay due an employee under this Rule. being the more beneficent retirement scheme.35 x 20 = P279. At that time. further clarifies what comprises the "1/2 month salary" due a retiring employee. had been deposited to the trustee-bank in her name.. in the resulting benefit differentials due to divergent interpretations of the term "one-half (1/2) month salary" as used under the law.000. states that "an employee's retirement benefits under any collective bargaining [agreement (CBA)] and other agreements shall not be less than those provided" under the same — that is. 2014 Concept: ONE-HALF (1/2) MONTH SALARY means 22. 177845.00 as of May 31. it held that under Article 287 of the Labor Code.06/day P622.00 The LA. however.000.662.00 x 20 years = P204.years of dedicated service to the Bank — the Court. i.5.00/30 = P622.06 x 22.210. They asserted that the latter was considered retired on May 31. Filipinas filed a complaint for illegal (constructive) dismissal. 2001. Nonetheless. NLRC set aside the LA's award. awarded Filipinas retirement pay differentials based on her latest salary as follows: P18. P13. 5. at least one-half (1/2) month salary for every year of service.00 benefit receivable by the petitioners under the Philam Life Plan which remains undisputed. salary increase.e. RA 7641.00 based on her salary at the time of retirement. and. which was enacted on December 9. 1992. They differ. i.218.000. She pleaded with GCHS to allow her to continue teaching but her services were terminated. or the amount of P7..360.150. 2001. holds that the CA's financial assistance award should be increased from P50. GR No.717.as amended by RA 7641.00 . 1997 after having rendered 20 years of service pursuant to GCHS' retirement plan and that she was duly advised that her retirement benefits in the amount of P136. accordingly. 7. Accordingly.2 Components of One-half (1/2) Month Salary. still exclusive of the P100.00 = Retirement benefits differential P68.00 . Section 5.as amended. damages." GCHS denied that they illegally dismissed Filipinas. with a retirement pay of one-half (1/2) month for every year of service. Facts Filipinas was employed by (GCHS) as high school teacher since June 1977. she was informed that her services were to be terminated effective May 31. both the NLRC and the CA correctly ruled that Filipinas' retirement benefits should be computed in accordance with Article 287 of the Labor Code.5 days representing one-twelfth (1/12) of the 13th month pay and the remaining 5 days for [SIL].996.2. her services were retained on a yearly basis until May 11. but awarded her attorney's fees equivalent to five percent (5%) of the total award. (RA) 7641. NLRC awarded Filipinas retirement pay differentials in the amount of P27. 2001 when she was informed that her year-to-year contract would no longer be renewed. The LA found that GCHS has a retirement plan. She alleged that on May 11. separation pay.00 Issue Whether or not the CA committed reversible error in using the multiplier "22.210. Lavandera.85. the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.185. otherwise known as the "Retirement Pay Law. denied Filipinas' claims for service allowance.5 days" which is "arrived at after adding 15 days plus 2. amended Article 287 of the Labor Code. with a monthly salary of P18. plus 5 days of [SIL].Amount deposited in trust P136. On August 30.621.927. It held that "one-half month salary" equates it to "22.210.e. and damages for lack of sufficient bases. and ruled that Filipinas' retirement pay should be computed based on her monthly salary at the time of her retirement on May 31.13 x 22. Moreover." GCHS computed Filipinas' retirement pay without including one-twelfth (1/12) of her 13th month pay and the cash equivalent of her five (5) days SIL. Inc has recently affirmed that "one-half (1/2) month salary means 22.Amount deposited in trust 136. Labor Arbiter (LA) dismissed the illegal dismissal complaint for lack of merit. pursuant to GCHS' retirement plan which gives the school the option to retire a teacher who has rendered at least 20 years of service. however. days" in computing the retirement pay differentials of Filipinas. James Tan.624. promulgated to implement RA 7641. 2001. Filipinas was only 58 years old and still physically fit to work.057. Ruling NO. Rule II of the Implementing Rules of Book VI of the Labor Code. a fraction of at least six (6) months being considered as one whole year — and that "[u]nless the parties provide for broader inclusions.00.00 ÷ 30 days = 454.20.621.as amended by RA 7641.5 days representing one-twelfth (1/12) of the 13th month pay and the remaining 5 days for [SIL]. 1997.5 days = P10. 2001.00 to P75. Grace Christian High School vs. non-payment of service incentive leave (SIL) pay. regardless of age. the LA found the retirement benefits payable under GCHS retirement plan to be deficient vis-à-vis those provided under RA 7641. Dr. Philippine Airlines.00 = Retirement benefits differential P143.

“The parties finally agree that an employee shall be entitled to only one (1) benefit. Banco De Oro Unibank vs. and attorney’s fees. saying that she is entitled to separation pay in addition to the retirement pay. thus. Assuming that it is. Angus. requesting that although he agrees with Management’s decision for Angus to avail the early retirement benefit. Moreover. The Court held in several cases that an employee is entitled to recover both separation pay and retirement benefits in the absence of a specific prohibition in the Retirement Plan of CBA. clear that the whole 5 days of SIL are included in the computation of a retiring employees' pay. 2011 so that he could render at least five (5) years of employment which would consequently entitle him to 50% of his basic pay for every year of service upon his retirement. Since Angus refused to sign the Release and Quitclaim. 9. On January 8.89 and likewise executed a Release and Quitclaim. damages. fractions of 13th and 14th months pay. 2010 pursuant to the company’s retirement plan which mandates its retirement age at sixty (60) years old.GR No. The letter also provides that as company practice. or company policies. Goodyear. stating that the position he is holding is already redundant and is no longer necessary. GR No. Sagaysay requested that his services be extended up to May 16. Retirement benefits are a form of reward to the employee’s loyalty and service to the employer and are earned under existing laws. 8.92 years of service to the company and have reached the minimum age of 55 to qualify early retirement. November 12. FACTS: Angus was employed by Goodyear as Secretary to the Manager of Quality and Technology from 1966-2001. Guillermo Sagasyay was hired by Banco De Oro (BDO) as Senior Accounting Assistant as a result of a merger with united Overseas Bank with BDO as the surviving bank. Lastly. there was no prohibition of restriction on the availment of benefits under the company’s Retirement Plan and separation pay.927. a quitclaim cannot bar an employee from demanding benefits he is legally entitled. Guillermo was employed in UOB for two years and in Metrobank for twenty-eight (28) years. BDO informed Sagaysay that he will be formally retired on September 1.958. Angus filed before the Labor Arbiter a complaint for illegal dismissal with claims of separation pay. Angus accepted the checks which covered only 47 days’ pay per year of service and other company benefits. 2015 DOCTRINE: A retirement plan based on a company policy implemented prior to the hiring of an employee is deemed to have been accepted upon employment FACTS: On May 16. The National Labor Relations Commission affirmed the decision of the Labor Arbiter. the Human Resource Director. vs. …(b) The cash equivalent of not more than five (5) days of service incentive leave The rules are. 2006.Sagaysay. Goodyear Philippines Inc. considering that Angus has rendered 34. he annotated on the acknowledgement receipt that he received the same under protest and acceptance will be on the condition that she will be given an additional 3 days’ pay per year of service. An Establishment Termination Report was filed by Goodyear with the Department of Labor and Employment. The Court of Appeals partially granted Angus’ petition. The provision in Goodyear’s CBA. Separation pay is the amount given to the employee to provide during the period that he is looking for another employment and is recoverable only in instances enumerated in Article 298 and 299 of the Labor Code or in illegal dismissal when reinstatement is not feasible. 2001. termination due to redundancy or retrenchment is paid at 45 days pay per year of service. Since he had an outstanding loan and his children were still in college. 2002. On January 17. Sept 16. Goodyear took back the checks. whichever is higher” is not substantial evidence of the prohibition because it does not appear to be a substantial part of the CBA. 185449. One of the grounds in Article 298 is when the employee is terminated due to redundancy. there was no proof that the CBA Goodyear presented as evidence is the same CBA material to the case. Ramos wrote a letter to Angus. in summarizing the benefits of Angus. therefore she is entitled to separation pay. he asks for an additional 3 days for every year of service which will total to 50 days. On September 9. longevity pay. Angus received a letter from Goodyear through Ramos. emergency leave and any earned and unused vacation or sick leave. the management has decided to grant Angus early retirement benefit at 47 days per year of service. stating among others that the company has already offered her the most favorable separation benefits due to redundancy. An employee’s right to receive separation pay in addition to reitrement benefits depends upon the provisions of the company’s Retirement Plan and/or CBA. 2015 DOCTRINE: Retirement Pay and Separation Pay are not mutually exclusive in the absence of a specific prohibition in the Retirement Plan or the Collecting Bargaining Agreement. 214961. Angus responded to their letter. Angus finally accepted the check amounting to P1. The Labor Arbiter upheld the validity of Angus’ termination and declared that it was already a payment of separation due to redundancy. Goodyear implemented cost-saving measures which included the streamlining of its workforce. CBA. 68 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . stated that he will receive 47 days’ pay per year of service (which will come form the Pension Fund). Upon examination of the 2001-2004 CBA. ISSUE: Whether Angus is entitled both separation pay and early retirement benefit RULING: Yes. Retirement pay and separation pay are not mutually exclusive. However. 2010.

the amount which he would have received if he was made to retire at the age of sixty-five (65). the retirement plans were adopted after the employees were hired by their employer. The Labor Code permits the employers and employees to fix applicable retirement age. including the retirement plan. Prior to the resignation of Perez. (2) Unilateral act of retirement by the employee does not bind the employer with the provision of the company’s Retirement Plan. provided that the benefits under the Collective Bargaining Agreement or any other agreements shall not be less than those provided by the Code. exemplary damages. CII has the option to grant or deny the application for optional retirement and considering that it is experience financial crisis. 2016 DOCTRINE: (1) Termination of employment by the employee does not entitle the employee to separation pay. he assented to the provisions of the retirement plan. Another reason for their denial was that the Labor Code does not grant separation pay to voluntary resigning employees. spending 34 years of his life working in different banking establishments. The provisions will only be applied in absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. logically. CII defended their denial saying that in the Retirement Plan. Her application was denied. the most convincing detail that Sagaysay assented to the retirement plan was his e- mails to the bank. CII informed her that they could only give her P100. BDO appealed to the NLRC arguing that Sagaysay freely assented to its retirement plan. Further. her employment contract did not include the retirement plan. GR No. Sagaysay signed a Release.000 as gratuity for her twenty years of service as this was the only amount they could afford. NLRC found it difficult to believe that Sagaysay did not famliarize the retirement policy of the bank. he even requested that his services be extended. 1988. the date she resigned form work. he released and discharged the bank. regulations and policy of the bank. Lastly. its affiliates and subsidiaries from any action. In those e-mails. 10. 2006. ISSUE: Whether the June 1. and attorney’s fee against BDO before the Labor Arbiter.14 and stressed that Sagaysay was not dismissed but retired from service. Perez vs. he had every opportunity to question the same.00. BDO did not grant his wishes. stating that CII has no policy or rules on optional retirement benefits and that it has been affected by global crisis. she again filed for optional retirement to take advantage of a job offered to her in the States. the retirement plan was already in full force and effect. from the beginning she was adamant that she did not consent to the retirement plan of her employer. Sagaysay signed a quitclaim and received at amount of P98. or demand in connection with his employment. moral damages. the retirement plan came before the hiring of Sagaysay. Sagaysay filed a complaint for illegal dismissal with reinstatement and payment of backwages. RULING: Yes. Therefore they may contest to the validity of the same unless they consented to its implementation. Sagaysay was deemed to have assented to all existing rules. the LA said that he did not freely assent to the retirement plan and he was only made to sign a quitclaim in exchange for a small consideration. no employee questioned the retirement plan. The Cercado Case.376. NLRC concluded that when Sagaysay accepted his employment with BDO. In addition. Sagaysay was sufficiently informed of the retirement plan. but her application was denied.14.376. the petitioner was employed two years before the adoption of the employer’s retirement plan. However. the employee was forced to participate. He claimed that his family suffered damages amounting to P2. Her request for reconsideration was likewise denied. It stated that Sagaysay was forced to participate in the retirement plan.403. they content that CII cannot invoke the provisions of the CBA because the CBA containing optional retirement benefits is only for the rank-and-file employees. The Court of Appeals reversed the ruling of NLRC. she manifested her intention to avail of the optional retirement program since she was already qualified to retire under it. it cannot be said that he was naive in dealing with his employer and that he failed to exercise his free and voluntary will when faced with the documents relating to his retirement.00. saying that there was no negotiation between BDO and Sagaysay and therefore there was no mutual agreement. The Court in the Cercado case held that because of the automatic application of the retirement plan to the current employees without they voluntary consent. The NLRC reversed the ruing of the LA and explained that BDO’s retirement plan was effecting as early as June 1. but he did not. October 5. 1994 retirement plan is valid and effective against Sagaysay. When Sagaysay was employed on May 16. the same letter contained their deinal of Perez’ claim for optional retirement benefits. suit. While vacationing to the United States. Further. FACTS: Perez started her employment with Comparts Industries Inc. Perez received a letter from CII stating their acceptance of resignation. it has no choice but to disallow her intention.048. Perez had to go to the United States to attend to her mother who suffered a mild stroke. BDO on its part said that he was already paid the amount of P98. up to the present.225. According to Article 287 of the Labor Code. Given that Sagaysay is a seasoned banker. which was prior to the hiring of Sagaysay.376. claim. by accepting the employment offer of BDO. 2009 regarding the implementation of its retirement program. The quitclaim stated that in consideration of the amount given to him. 197557.14. he did not contest to the validity of the retirement plan and even recognized its provisions. reiterating that the normal retirement date was the first day of the month following the employees sixtieth (60th) birthday. In the case at bar. Waiver and Quitclaim for an in consideration of P98. The Labor Arbiter (LA) stressed that Sagaysay was illegally dismissed and that he was forced to avail of an optional retirement age of sixty (60) which was contrary to the provisions of Article 287 of the Labor Code. he was earning a monthly salary of P28. BDO also issued a memorandum on June 1. 1994. It has been twelve (12) years from the inception of the retirement plan. As of his last day of work. Further. the employee refused the early retiremet package provided by the employer. considering that he has previously worked for two other banks. Having knowledge of the retirement plant. this memorandum was addressed to all employees and officers. In the Cercado case. 69 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . she was eventually appointed as Marketing Manager and held that position from 1998 up to January 2009. in the present case. Camparts Industries Inc. in the case relied upon by the CA. In the previous Cases decided by the Court. (CII) on July 16. so she applied for optional retirement again. which was heavily relied upon by the Court of Appeals is inapplicable.

Retirement plan allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 yrs are not per se void. April 26. Lourdes School of Quezon City Gr No. On June 25. which provides for a compulsory 70 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . on February 15. Her voluntary acts and enjoyment of the monetary benefits with the new retirement plan cannot be considered that she was illegally dismissed or have been forced to retire. In a Letter dated January 29. 213486. does not entitle the employee to separation pay. Again. and attorney’s fees and further prayed for separation pay in the form of optional retirement benefits either under the Retirement Plan for CII officers or under the CBA for rank-and-file employees. Catotocan vs. in this case. she had already served for thirty-five (35) years. Therefore. LSQC issued an addendum on its retirement policy which adds that normal retirement will commence after completing “30 years of service” to the school. Fr. LSQC appointed her to the same post effective May 12. Full retirement benefits were given to her. 2006. 2009. Catotocan's retirement. CII is not liable to give Perez the optional retirement benefits provided therein. In the same letter. Termination of employment by the employee. On April 9. 2003. The Retirement Plan of CII Officers also provides for an optional/early retirement benefit. Catotocan was told that if she desires. Perez’ application was denied several times since CII still needed her services. Perez appealed before the Court of Appeals. On March 23. 2008 until April 3. 2009. Catotocan file a complaint for illegal dismissal and monetary claims before the LA. effective June 2006. or separation pay depending on the number of years of service. The Rector. She responded by submitting a "Letter of Intent" on February 14. Catotocan is already estopped from questioning the legality of the new retirement policy. it was provided that it should be with the consent of the company. However. 2008. 1. 2006. Catotocan asserts that her acceptance of retirement benefits will not stop her from pursuing an illegal dismissal complaint against LSQC Issue: Whether or not the illegal dismissal complaint of Catotocan will prosper. This normal retirement benefit shall be sum equal to 22. Her filing of illegal dismissal case was just an afterthought subsequent to LSQC’s denial of her fourth re-application for the Guidance Counselor position. LSQC appointed Catotocan as a Grade School Guidance Counselor for the school year 2006-2007 under a contractual status effective June 1. Perez filed a complaint before the NLRC-RAB No. in this provision. under the scheme that they will shoulder the cost of the health plan through salary deduction. LA. a Retirement Plan in a company partakes the nature of a contract. whichever is greater. 2006.000. Only in the absence of such an agreement shall the retirement age be fixed by law. Her unilateral act of retiring without the consent of CII does not bind the latter with the provisions of the retirement plan. No. was communicated to her on January 27. Ruling: NO. 2007. On August 16. The NLRC-RAB No. Catotocan. The NLRC ordered CII to pay Perez the amount of P100. Acuin. 2. CII has to give consent for the optional retorement to operate. Editha Catotocan as music teacher in Lourdes School of Quezon. VII for discrimination.5 days Pay for every year of Credited Service in accordance with the Collective Bargaining Agreement.NLRC and CA ruled that the respondent’s acts constituted implied consent to the school’s retirement policy and therefore barred from questioning its legality. By the school year 2005-2006. 2006 until March 31. granted the request. 2017 Facts: In 1971. Catotocan re-applied as Guidance Counselor for school year 2008-2009. as in this instance. VII ruled in favor of Perez. Being a managerial employee. ISSUES: (1) Whether Perez is entitled to separation pay (2) Whether Perez is entitled to the optional retirement benefits RULING: 1. 11. 2006. designed to provide the employee with the wherewithal during the period that he is looking for another employment and is recoverable only in instances enumeration under Articles 298 and 299 of the Labor Code or in illegal dismissal cases when reinstatement is not feasible. LSQC retired Catotocan sometime in June 2006 after completing 35 years of service. she is covered only by the Retirement Plan of CII Officers which provides for a normal retirement benefit and also an optional or early retirement. On November 25. Catotocan opposed to the new retirement policy. As the CA correctly ruled. Catotocan at age 59 re-applied for the position of GS Guidance Counselor. On May 11. Separation pay is the amount which an employee receives at the time of his severance from employment. 2009. together with other "retirees" who were re-hired. she may signify in writing her intent to continue serving the school on a contractual basis. moral damages. LSQC has a retirement plan providing for retirement at sixty (60) years old. wrote the LSQC Rector to request that they be included in the Valucare Health Maintenance Plan of the school. 2004. but LSQC no longer considered her application for the position. No. who also dismissed her appeal and affirmed the ruling of the NLRC. 2008. Consequently.

it is deemed part of his retirement pay. The Labor Code permits employers and employees to fix the applicable retirement age at 60 years or below subject to the consent of employees. while the minimum age for optional retirement is set at 60 years. voluntary. Due process only requires that notice of the employer's decision to retire an employee be given to the employee. Therefore. because the Plan was a retirement fund wholly financed by the company. which will be further added to the P125. provided that the employees' retirement benefits under any CBA and other agreements shall not be less than those provided therein. Facts: Hassaram a former pilot of PAL filed for illegal dismissal against PAL and the payment of retirement benefits. Labor Arbiter ruled that Article 287 of the Labor Code should be applied. Ruling: Plan must be considered part of his retirement pay. 71 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 . thereby rendering Article 287 of the Labor Code inapplicable.) Yes. These contributions comprise benefits received by the latter upon retirement.Notice of the employer’s decision to retire an employee is sufficient. or disability.) No. 2. Comparing the benefits under the two (2) retirement schemes. Article 287 is not applicable. it can readily be perceived that the 22. We already had the occasion to strike down the added requirement that an employer must first consult its employee prior to retiring him. allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure.PAL asserts that its own company retirement plans – both the PAL Pilots Retirement Benefit Plan and the 1967 PAL-ALPAP Retirement Plan – should have formed part of Hassaram’s retirement pay. there was no notation that she is accepting the retirement benefits under protest or without prejudice to the filing of an illegal dismissal case. separation from service.retirement age at 65 years. Philippine Airlines vs. as this requirement unduly constricts the exercise by management of its option to retire the said employee. acceptance by the employees of an early retirement age option must be explicit. 3. 2017 Concept: The determination factor in choosing which retirement scheme to apply is the one which has superior benefits.|| 12.000. Indeed. 217730. Issue: Whether the amount received by Hassaram under the Plan should be deemed part of his retirement pay. since the statute provided better benefits than the PAL- ALPAP. Whether Hassaram is entitled to receive retirement benefits under Article 287 of the Labor Code. it is to the petitioner's advantage that PAL's retirement plans were applied in the computation of his retirement benefits.5 days worth of salary for every year of service provided under Article 287 of the Labor Code cannot match the 240% of salary or almost two and a half worth of monthly salary per year of service provided under the PAL Pilots' Retirement Benefit Plan. retirement plans. NLRC ruled in favor of PAL on account of Hassaram’s receipt of retirement benefits under the plan was sufficient to discharge his claim for retirement pay.00 to which the petitioner is entitled under the PAL-ALPAP Retirement Plan. as in LSQC's retirement plan. but that his application was denied. No. Art 287 is applicable only to a situation where (1) there is no CBA or other applicable employment contract providing for retirement benefits for an employee. Or (2) there is a CBA or other applicable employment contract providing for a retirement benefits for an employee. it must be stressed that Catotocan's subsequent actions after her "retirement" are actually tantamount to her consent to the addendum to the LSQC's retirement policy to wit: (1) her repeated application and availment of re-hiring program (2) she received all of her retirement benefits (3) upon acceptance of the retirement benefits. combined with the retirement benefits under the CBA between PAL and ALPAP. CA ruled in favor of Hassaram that he is entitled to receive retirement benefits pursuant to Article 287 of the Labor Code. GR. He claimed that he had applied for retirement from PAL in August 200 after rendering 24 years of service as a pilot. 1. The provisions of the plan clearly provides that it is the company that contributes to a “retirement fund” for the account of the pilots. However. 2. Thus. Hassaram insists that the amount he received from the Plan represented only a return of his share in a distinct and separate provident fund established for PAL Pilots. Hassaram. June 5. Her voluntary acts constitutes implied consent to the new retirement policy While it may be true that Catotocan was initially opposed to the idea of her retirement at an age below 60 years. this scheme would allow Hassaram to receive superior retirement benefits. but is below the requirement set by law. and uncompelled. free.

wq 72 | P a g e Labor Standards Law Midterms Case Digests 2017 – Urbiztondo EH 401 .