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LABOR CASE DIGESTS

Labor Standards and Social Legislation

Arellano University School of Law

5:30-8:30 pm, Thursday

Dean Porfirio DG. Panganiban, Jr.

KAREN CAMILLE SATIADA


LIST OF CASES

Article 1-6: Labor in General

1. Maternity Childrens Hospital vs. Secretary of Labor


2. Calalang vs. Williams
3. People vs. Vera Reyes
4. People vs. Pomar
5. Phil. Association of Service Exporters Inc vs. Drilon
6. Cerezo vs. Atlantic Gulf and Pacific Co
7. Abella vs. NLRC
8. Euro-Linea, Phils. Inc, vs. NLRC
9. Manila Electric Company vs. NLRC
10. Sosito vs. Aguinaldo Development Corporation
11. Colgate Palmolive Philippines vs. Ople
12. Mendoza vs. Rural Bank of Lucban
13. Gelmart Industries Phils. Inc. vs. NLRC
14. Lagatic vs. NLRC
15. China Banking Corporation vs. Borromeo
16. Associated Watchmen and Security Union vs. Lanting
17. Pampanga Bus Company vs. Pambusco Employees
18. Gregorio Araneta Employees vs. Roldan
19. Phil. Steel Workers Union vs. CIR
20. Tiong King vs. CIR
21. Roldan vs. Cebu Portland Cament. Co
Article 5: Rules and Regulations

22. Rizal Empire Insurance Group vs. NLRC


23. Philippine Association of Service Exporters vs. Drilon
24. CBTC Employers Union vs. Clave
Article 6: Applicability

25. National Housing Corporation vs. Juco


26. National Service Corp vs. NLRC
27. Republic vs. CA
28. Luzon Development Bank vs . Association of Luzon Development Bank et.al.
29. Social Security System Employees Association vs. CA
Article 7-11: Emancipation of Tenants
30. Association of Small Landowners of the Philippines vs. Secretary of Agrarian
Reform
31. Acuna vs. Arroyo
32. Pabico vs. Juico
33. Maanay vs. Juico
34. Alita vs. CA
35. Gonzales vs. CA
36. Luz farms vs. Secretary of Agrarian Report
Article 13: Recruitment and Placement

37. People vs. Panis


38. People vs. Goce
39. Darvin vs. CA and People of the Philippines

Article 19-24: Overseas Employment

40. Eastern Shipping Lines vs. POEA


41. Abdu Basar and Kathleen Saco
42. PHILSA International Placement vs. Secretary of Labor
43. Pacific Asia Overseas Shipping Corp. vs. NLRC
44. Millares and Lagda vs. NLRC
45. Tierra International Corporation vs. NLRC
46. Dilan vs. POEA Administrator
47. Vinta Maritime Co. vs. NLRC and Basconcillo
48. Marsaman Manning Agency vs. NLRC
49. Asian Center for Career and Employment Services vs. NLRC and Ibno
Mediales
50. Athena International Manpower services Inc. vs. Villanos
51. Eastern Shipping Lines vs. POEA
52. Inter Orient Maritime Enterprise Inc. vs. NLRC
53. Norse Management Corporation vs. National Seamen Board
54. NFD International Manning Agents vs. NLRC, et al.

Article 20: National Seamen Board

55. Phil.International Shipping Corporation vs. NLRC


56. Mc Kenzie vs. Cul
57. Virjen Shipping and Marine Services vs. NLRC
58. Suzara vs. Benipayo
59. Chavez vs. Bonto-Perez, Rayala, et al.
Article 25-39: Regulations of Recruitment and Placement Activities

60. Finman General Assurance vs. Inocencio


61. Eastern Assurance and Surety Corp. vs. Secretary of Labor
62. Salazar vs. Achacoso and Marquez
Article 34: Prohibited Practices

63. Soriano vs. offshore Shipping and Marketing corp.


64. Seagull Maritime Corp. vs. Balatongnan
Article 35: Suspension and/or Cancellation of License Authority

65. Catan vs. NLRC


66. Royal Crowne International vs. NLRC
67. Facilities Management Corp. vs. De La Osa
Article 38: Illegal Recruitment

68. People of the Philippines vs. Bulu Chowdry


69. People of the Philippines vs. Cabais
70. People of the Philippines vs. Flores
71. People vs. Sagayado
72. People vs. Benzon Ong
73. People vs. Calonzo
74. People vs. Hernandez
75. People vs. F. Hernandez, K. Reichl and Y.G. de Reichl
76. People vs. tan Tiong Meng
77. People vs. Arabia and Tomas
78. People vs. Verano
79. People of the Philippines vs. Espanol
80. People of the Philippines vs. Roxas
81. People of the Philippines vs. Remullo
82. People of the Philippines vs. S. Angeles
Article 40: Employment of Non-Resident Aliens

83. Almodiel vs. NLRC, et al.


84. General Miling Corp. vs. Torres
85. Dee C. Chuan and sons vs. CIR
Article 57-72: Apprentices

86. Nitto Enterprises vs. NLRC and R. Capili


87. Filamer Christian Institute vs. Hon. Intermediate Appellate Court
Article 82-95: Conditions of Employment

88. Brotherhood Labor Unity Movement of the Philippines vs. Zamora


89. Tabas, et., al vs. California Manufacturing Co. et al.
90. Sevilla vs. CA
91. Continental Marble Corporation vs. NLRC
92. Encyclopedia Britannica Inc. vs. NLRC
93. Dy Keh Beng vs. International Labor and Marine Union
94. Zanotte Shoes vs. NLRC
95. Air Material wing Savings and Loan association inc. vs. NLRC
96. Hydro Resources Contractors Corp. vs Pagalilauan
97. Insular Assurance Co. vs. NLRC
98. Angelina Francisco vs. NLRC , Kasei Corp. etc
99. Opulencia Ice Plant vs. NLRC
100. Domasig vs. NLRC
101. Equitable Banking Corporation vs. NLRC and R.L. Sadac
102. Zamudio vs. NLRC
103. Paguio vs. NLRC et.al.
104. Great Pacific Life Assurance Corp. vs. Judico
105. Feati University vs. Hon. Jose S. Bautista and Feati Faculty Club
106. Citizens League of Free Workers et, al vs. Abbas
107. Villamaria vs. CA and Bustamante
108. Sy et.al vs. Hon. Court of Appeals and J. Sahot
109. Makati Haberdashery , Inc, vs., NLRC
110. Cauddanetaan Piece Workers Union vs. Undersecretary Bienvenido
Laguesma
111. Ruga et.al. vs. NLRC
112. A. Maraguinot and P.Enero vs. NLRC and Viva Films
113. Orlando Farm Growers vs. NLRC
Article 82: Excluded Employees

114. National Sugar Refineries Corp. vs. NLRC


115. Penaranda vs. Banganga Plywood Corp et.al.
116. Auto Bus Transport System Inc . vs. Bautista
117. Union of Filipino Employees vs. Vivar
118. San Miguel Brewery Inc. vs. Domestic Labor Organization
119. Abundio Cadiz vs. Philippine Sinter Corporation
120. Rosales vs. Tan Que
121. Adriano Quintos vs. D.D Transport Co., Inc.,
122. Lara vs. Del Rosario
Article 83: Hours of Work

123. Manila Terminal Co. Inc vs. CIR et.al


124. Interphil Laboratories Employees Union FFW, et al vs. Interphil Laboratories

Article 84: Hours Worked

125. Pan American World Airways System vs. Pan American Employees
Association
126. Jose Gayona vs. Good Earth Emporium and Supermarket
127. University of Pangasinan Faculty Union vs. University of Pangasinan
128. Luzon Stevedoring Co. Inc. vs. Luzon Marine Department Union
129. Cagampan et. al vs.NLRC
130. National Development Company vs. CIR
131. FSime Darby Pilipinas Inc vs. NLRC
132. Mercury Drug Co Inc vs. Nardo Dayao et.al
133. National Shipyards and Steele Corporation vs.
134. Bisig ng Manggagawa ng Philippine Refining Co. Inc
135. PNB vs. PNB Employees Assn
136. Pamapanga Sugar Development Co. vs. CIR
Article 87-88: Offset Overtime
137. NWSA vs. NWSA Consolidated Unions
Article 91-93: Rest Days
138. Cf: De Leon vs. Pampanga Sugar Development Co Inc
139. Sto. Domingo vs. Phil. Rock Products
Article 94: Holiday and Holiday Pays

140. Jose Rizal College vs. NLRC and NATOW


141. San Miguel Corp vs. CA et. al
142. Insular Bank of Asia and American Employees Union vs. Hon. Amado G.
Inciong
143. The Chartered Bank Employees Association vs. Hon. Blas Ople
144. Obango vs. NLRC and Antique Electric Cooperative Inc.
145. Union of Filipro Employees vs.Benigno Vivar Jr NLRC and Nestle Phils Inc
146. Wellington Investment and Manufacturing Corporation vs.Cresenciano
B.Trajano
147. Jose Rizal College vs. NLRC
148. Baltazar vs. San Miguel Brewery Inc
149. Davao Integrated Port Stevedoring Services vs. Abarquez
150. Kwok vs. Philippine Carpet Manufacturing Corp

Article 97: Wages and Salary

151. Songco et. al vs.NLRC


152. Ruga et. al vs.NLRC
153. State Marine Corporation and Royal Line vs. Cebu Seamens Association Inc
154. Philippine Marine Corporation and Royal Line vs. Cebu Seamens Association
155. International School Alliance of Educators vs. Hon. Quimbinsing

Article 99-101: Minimum Wage

156. Atok Big Wedge Mining Co. Inc vs. Atok Big Wedge Mutual Benefit
Association
157. De Racho vs. Municipality of Iligan
158. Planas Commercial vs. NLRC, A. Ofialda et.al
Article 100: Elimination or Diminution of Benefits

159. Davao Integrated Ports Stevedoring Services vs. Abarquez


160. Cebu Autobus Company vs.United Cebu Autobus Employees Assn
161. Nestle Philippines vs. NLRC
162. R. Tiangco and V. Tiangco vs. Hon. Vicente Leogardo, Jr.
163. Globe Mackay Cable vs. NLRC
164. Samahan ng Manggagawa sa Topform Manufacturing vs. NLRC
165. Pag-asa Steel Works vs.CA, et.al
166. Lexal Laboratories vs. Court of Industrial Relations et.al
167. National Sugar Refineries Corp. vs. NLRC
168. American Wire and Cable Daily Rated Employees Union vs .American Wire
and Cable Co and the Court of Appeals
169. Traders Royal Bank vs. NLRC
170. National Federation of Sugar Workers vs. Ovejera
171. Universal Corn Products vs. NLRC
172. Philippine Airlines vs.NLRC and Airline Pilots Assn. of the Philippines
173. San Miguel Corporation vs. Inciong
174. Philippine Duplicators Inc vs. NLRC
175. Isalama Machine Works vs. NLRC et. al
176. Alliance of Government Workers et. al vs. Minister of Labor and Employment
Article 101: Payment by Results
177. Tan vs. Lagrama
178. Lambo vs. NLRC
179. Makati Haberdashery vs. NLRC
180. Labor Congress of the Philippines vs. NLRC and Empire Food Products
Article 102: Payment of Wages
181. Jimenez et. al. vs. NLRC and Juanatas
Article 106: Labor-Only Contracting
182. Neri vs. NLRC, Far East Bank and Trust Co
183. Manila Water Co. vs. Pena
184. San Miguel Corp vs. Aballa
185. Philippine Bank of Communication vs. NLRC
186. Tabas et. al. vs. California Manufacturing Company
187. Mafinco Trading Corporation vs. Ople, NLRC et.al.
188. Insular Life Insurance Co. Ltd. Vs. NLRC
189. Rhone-Poulenc Agrochemicals Philippines, Inc vs. NLRC
190. Escario et. al. vs. NLRC
Article 119: Prohibition Regarding Wages
191. Radio Communication of the Philippines Inc. vs. Secretary of Labor
192. Apodaca vs. NLRC
193. Metropolitan Bank and Trust Compnany Employee vs. NLRC
194. National Federation of Labor vs. NLRC
195. Manila Mandarin Employees Union vs. NLRC
Article 120-127: Wage Studies, Wage Agreements and Wage Determination
196. Cagayan Sugar Milling Co. vs. Secretary of Labor et. al.
197. ECOP vs. NWPC
Administration and Enforcement
198. Meycauayan College vs. Drilon
199. St. Joseph College vs. St. Joseph College Workers Association
200. COCOFED et.al vs. Hon. Cresenciano B. Trajano et.al.
201. Cebu Oxgygen and Acetelyn vs. Drilon
202. Odin Security Agency vs. Hon. Dionisio Dela Serna et.al
203. Urbanes etc. vs. Hon. Security of Labor
Article 130-138: Employment of Women
204. Zialcita vs. PAL
205. Gualberto vs. Marinduques Industrial Mining Corporation
Article 156-161: Health, Safety and Social Welfare Benefits

206. Philippine Global Communication Inc


207.
Article 166-184: Employees Compensation and State Insurance fund
208. Jose B. Sarmiento vs. Employees Compensation Commission et. al.
209. Raro vs. Employees Compensation Commission
210. Belarmino vs. Employees Compensation Commission
211. Hinoguin vs. Employees Compensation Commission
212. GSIS vs. CA AND F. Alegre
213. Velariano vs. ECC and GSIS
214. Iloilo Dock and Engineering Corporation vs. WCC et.al
215. Alano vs.ECG
216. Lazo vs.Employees Compensation Commission
217. Menez vs. ECC
218. Mabuhay Shipping Service vs. nlrc
219. Interiorent Maritime Enterprises vs. Pineda
220. NAESS Shipping Philippines vs. NLRC
221. YSMAEL Maritime Corporation vs. Avelino
Article 191-193: Disability Benefits
222. Vicente vs. ECC
223. Abaya vs. ECC
224. Ornilno vs. ECC
225. Vicente vs. ECC
226. GSIS vs. CA
Article 194 : Death Benefits
227. Canonizado vs. Almeda Lopez
228. Manzano vs ECC
Article 195-205:
229. ECC vs. Sanico
230. Suanes vs. Workmens Compensation Commission
Article 280: Regular and Casual Employment

231. Philippine Federation of Credit Cooperatives, Inc v.NLRC


232. De Leon v. NLRC
233. Violeta v. NLRC
234. Romares v. NLRC
235. Phil Federation of Credit Cooperatives, Inc v. NLRC
236. Phil. Fruit and Vegetable Industries, Inc v.NLRC
237. De Leon v. NLRC
238. E. Ganzon, Inc v. NLRC
239. Hacienda Fatima v. National Federation of Sugarcane Workers
240. Magante v. NLRC
241. Tacloban Sagkahan Rice etc. v. NLRC
242. Ecal v. NLRC
243. Kimberly etc. v. Drilon
244. Mercado v. NLRC
245. Datu and Co, Inc. v. NLRC
246. International Pharmaceutical, Inc. v. NLRC
247. Millares v. NLRC
Article 281: Probationary Employment

248. Labor Congress of the Phil. v. NLRC


249. Highway Copra Trades v.NLRC
250. San Miguel Corp v. NLRC
251. International Catholic Migration Commission v. NLRC
252. De la Cruz, Jr v.NLRC
253. Grand Motors Corp. v. MOLE
254. International Catholic Migration Commission v. NLRC
255. Phil. Federation of Credit Cooperatives , Inc v. NLRC
256. Escorpizo v.University of Baguio
257. Cebu Marine Beach Resort v. NLRC
258. Magcalas v. NLRC
259. Lao Construction v. NLRC
260. ALU-TUCP v.NLRC
261. Kiamco v. NLRC
262. Phil. Jai-Alai and Amusement Corp v. Clave
263. Sandoval Shipyards, Inc v. NLRC
264. Magante v. NLRC
265. Tucor Industries, Inc v. NLRC
266. Rada v. NLRC
267. Mamansag v. NLRC
268. Uy v. NLRC
269. Phil. Airlines Inc, v. NLRC
270. Villa v. NLRC
271. Phil. Fruits and Vegetables Industries, Inc. v. NLRC
272. Imbuido v. NLRC
273. Maraguinot v. NLRC
274. A.M. Oreta and Co.,Inc v. NLRC
275. Southern Cotabato v.NLRC
276. Purefoods Corp. v. NLRC
277. Aguilar Corp. v. NLRC
278. Tabas v. California Manufacturing Co. Inc.
279. Phil Geothermal Inc v. NLRC
280. Mercado v. NLRC
281. International Pharmaceutical, Inc. v .NLRC
282. Cebu Engineering and Development Co. v. NLRC
283. Highway Copra Traders v. NLRC
284. Brent School v. Zamora
285. Cielo v. NLRC
286. International Pharmaceuticals, Inc. v.NLRC
287. St. Theresas School v. NLRC
288. Servidad v. NLRC
289. Purefoods Corp. v. NLRC
290. Phil. Tabacco etc v. NLRC
291. San Miguel Corp v. NLRC
292. Grand Motors Corp v. MOLE
293. Orient Express Placement Philippines v. NLRC
294. International Catholic Migration Commission v. NLRC
295. Bernardo v. NLRC
296. Escorpizo v. University of Baguio
297. A Prime Security Services Inc. v. NLRC
298. De La Cruz, Jr. v. NLRC
299. Mariwasa Manufacturing Inc. v. Leogardo
300. Phil. Federation of Credit Corporation, etc. v. NLRC
301. Escorpizo v. University of Baguio
302. St. Michael Academy v. NLRC
Article 282: Termination by Employer

303. InternationalCatholic Migration Commission vs. NLRC


304. Orient Express Placement Philippines vs. NLRC
305. Manila Trading and Supply Co, Inc. v. Zulueta
306. Makati Haberdashery, Inc. v. NLRC
307. Ocean East Agency Corp v. NLRC
308. Arboleda v. NLRC
309. Samson v. NLRC
310. PNCC v. NLRC
311. Golden Thread Knitting Industrial Inc. v. NLRC
312. Austria v. NLRC
313. Philippine Aeolus Automotive United Corp v. NLRC
314. Naguit, Jr. v. NLRC
315. Cebu Filveneer Corp v. NLRC
316. Westin Phil. Plaza Hotel v. NLRC
317. Tierra International Production Corp. v. NLRC
318. Legahi v. NLRC
319. Vitarich Corp v. NLRC
320. Rosario v. Victory Rice Mill
321. PNOC-EDC v. Abella
322. National Sugar refineries Corp. v. NLRC
323. Judy Philippines Inc. v. NLRC
324. PLDT v. NLRC
325. Tres Reyes v. Maxims Tea House
326. Philippine Aeolus Automotive United Corp. v. NLRC
327. Cebu Filveneer Corp v. NLRC
328. Citibank N.A. v. Gatchalian
329. RDS Trucking v. NLRC
330. Paguio Transport Corp v. NLRC
331. Jardine Davies, Inc. v NLRC
332. Panday v. NLRC
333. Farrol v. Court of Appeals
334. Sulpicio Lines, Inc. v.Gulde
335. Santos v. San Miguel Corp.
336. Greenhills Products, Inc. v. NLRC
337. Vitarich v. NLRC
338. Cathedral School of Technology v. NLRC
339. International Rice Research Institute v. NLRC
340. Oania v. NLRC
341. Lim v.NLRC
342. Escobin v.NLRC
343. Metro Transit Corp. Inc. v. NLRC
344. Leonardo v.NLRC and Fuerte v. Aquino
345. Hacienda Dapdap v. NLRC
346. Premiere Development Bank v. NLRC
347. Phil. Airlines, Inc. v. NLRC
348. CMP Federal Security Agency, Inc. v. NLRC
349. Mendoza vs. NLRC
350. Batongbacal v. Associated Bank
351. Manila Electric Co. Inc. v. NLRC
352. Brent School v. Zamora
353. Romares v. NLRC
354. Santos v. NLRC
355. Chua-Qua v. Clave
356. Aparente Sr. v. NLRC
357. Lacorte v. Inciong
358. Starlite etc. v. NLRC
359. Quiambao v. NLRC
360. San Miguel Corp v. NLRC
361. Westin Phil. Plaza Hotel v. NLRC
362. Phil. Wireless, Inc v. NLRC
363. Globe- Mackay Cable and Radio Corp. v. NLRC
364. Phil. Airlines v. NLRC
365. Kwikway Engineering Works v. NLRC
366. Wiltshire File Co., Inc. v. NLRC
367. Almodiel v. NLRC
368. Escareal v. NLRC
369. AG & P United Rank and File Assn v. NLRC
370. Caffco International Ltd v. Office MOLE
371. Sebuguero v. NLRC
372. Wiltshire File Co.., Inc. v. NLRC
373. Tierra International Construction Corp. v.NLRC
374. Guerrero v. NLRC
375. Tierra International Construction Corp. v. NLRC
376. Almodiel v. NLRC
377. Panlilio v. NLRC
378. Lopez Sugar Corporation v. Federation of Free Workers
379. Revidad v. NLRC
380. Balbalec v. NLRC
381. San Miguel Jeepney Service v. NLRC
382. Lopez Sugar Corporation v. Federation of Free Workers
383. Revidad v. NLRC
384. Catatista v. NLRC
385. Central Azucarera de la Carlota v. NLRC
386. Somerville Stainless Steel Corp. v. NLRC
387. Bago-Medellin Sugar Can Planters Assn., Inc. v. NLRC
Article 287: Retirement From Service

388. Habana v. NLRC


389. Azcor Manufacturing, Inc. v. NLRC
390. Metro Transit Organization, Inc. v. NLRC
391. Reyes v. CA
392. Wilt Hahn Enterprises v. Maghuyop
393. Cheniver Deco Print Technics Corporation v. NLRC
394. Admiral Realty Co., Inc. v. NLRC
395. Phil. Wireless Inc. v. NLRC
396. Pascua v. NLRC
397. Intertrod Maritime Inc. v. NLRC
398. Manila Broadcasting Co. v. NLRC
399. Valdez v. NLRC

MATERNITY CHILDRENS HOSPITAL VS. SECRETARY OF LABOR


G.R. NO. 78909
JUNE 30 1984

Facts:
Petitioner is a semi-government hospital, managed by the Board of Directors of the
Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado,
as holdover President. The hospital derives its finances from the club itself as well as
from paying patients, averaging 130 per month. It is also partly subsidized by the
Philippine Charity Sweepstakes Office and the Cagayan De Oro City
government. Petitioner has forty-one (41) employees. Aside from salary and living
allowances, the employees are given food, but the amount spent therefor, is deducted
from their respective salaries (pp. 77-78, Rollo).

On May 23, 1986, ten (10) employees of the petitioner employed in different
capacities/positions filed a complaint with the Office of the Regional Director of Labor
and Employment, Region X, for underpayment of their salaries and ECOLAS, which was
docketed as ROX Case No. CW-71-86.
The Regional Director issued and order based on the reports of the Labor Standard and
Welfare Officers, directing payment of P723, 888.58 representing underpayment of
wages and ECOLAs to all the petitioners employees. Petitioner appealed to the Minister
of Labor and Employment which modified the decision as to the period for the payment
ECOLAs only. A motion for reconsideration was filed by petitioner and was denied by the
Secretary of Labor.

Issue:
Whether or not that the salaries of the petitioner including the ECOLAS included on the
labor standards prescribed by law.

Held:
Labor standards refer to the minimum requirements prescribed by existing laws, rules,
and regulations relating to wages, hours of work, cost of living allowance and other
monetary and welfare benefits, including occupational, safety, and health standards
(Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional
Office, dated September 16, 1987).

CALALANG V. WILLIAMS
70 PHIL 726, GR NO. 47800
DECEMBER 2, 1940

FACTS:

The National Traffic Commission resolved that animal-drawn vehicles be prohibited


from passing along some major streets such a Rizal Ave. in Manila for a period of one
year from the date of the opening of the Colgante Bridge to traffic. The Secretary of
Public Works approved the resolution on August 10,1940. The Mayor of Manila and the
Acting Chief of Police of Manila have enforced the rules and regulation. As a
consequence, all animal-drawn vehicles are not allowed to pass and pick up passengers
in the places above mentioned to the detriment not only of their owners but of the
riding public as well.

ISSUE:

Does the rule infringe upon the constitutional precept regarding the promotion of social
justice? What is Social Justice?

HELD:

No. The regulation aims to promote safe transit and avoid obstructions on national
roads in the interest and convenience of the public. Persons and property may be
subject to all kinds of restraints and burdens in order to secure the general comfort,
health, and prosperity of the State. To this fundamental aims of the government, the
rights of the individual are subordinated.
Social justice is neither communism, nor despotism, nor atomism, nor anarchy, but
the humanization of laws and the equalization of social and economic forces by the
State so that justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all
the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principles of Salus Populi est Suprema Lex.(Justice
Laurel)

PEOPLE VS. VERA REYES


G..R. NO. L-45748
APRIL 5, 1939
IMPERIAL, J.

Facts:
Defendant was charged in the Court of First Instance of Manila by the assistant city fiscal
with a violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958. The
information alleged that from September 9 to October 28, 1936, the accused, in his
capacity as president and general manager of the Consolidated Mines, having engaged
the services of Severa Velasco de Vera as stenographer, at an agreed salary of P35 a
month willfully and illegally refused to pay the salary of said stenographer
corresponding to the above-mentioned period of time, which was long due and payable,
in spite of her repeated demands.
After the hearing, the court sustained the demurrer, declaring unconstitutional the last
part of section 1 of Act No. 2549 as last amended by Act No. 3958, which considers as an
offense the facts alleged in the information, for the reason that it violates the
constitutional prohibition against imprisonment for debt, and dismissed the case, with
costs de oficio. The fiscal appealed from said order. In the appeal, the Solicitor-General
contends that the court erred in declaring Act No. 3958 unconstitutional, and in
dismissing the cause. The last part of section 1 of Act No. 2549, as last amended by
section 1 of Act No. 3958 considers as illegal the refusal of an employer to pay, when he
can do so, the salaries of his employees or laborers on the fifteenth or last day of every
month or on Saturday of every week, with only two days extension, and the
nonpayment of the salary within the periods specified is considered as a violation of the
law. The same Act exempts from criminal responsibility the employer who, having failed
to pay the salary, should prove satisfactorily that it was impossible to make such
payment.

Issue:
Whether the last part of section 1 of Act No. 2549 as last amended by Act No. 3958 is
constitutional and valid.

Held:
The court held that this provision is null because it violates the provision of section 1
(12), Article III, of the Constitution, which provides that no person shall be imprisoned
for debt. We do not believe that this constitutional provision has been correctly applied
in this case. A close perusal of the last part of section 1 of Act No. 2549, as amended by
section 1 of Act No. 3958, will show that its language refers only to the employer who,
being able to make payment, shall abstain or refuse to do so, without justification and
to the prejudice of the laborer or employee. An employer so circumstanced is not unlike
a person who defrauds another, by refusing to pay his just debt. In both cases the deceit
or fraud is the essential element constituting the offense. The first case is a violation of
Act No. 3958, and the second is estafa punished by the Revised Penal Code. In either
case the offender cannot certainly invoke the constitutional prohibition against
imprisonment for debt.
The Court of Appeal held that the last part of section 1 of Act No. 2549, as last amended
by section 1 of Act No. 3958, is valid, and reversed the appealed order with instructions
to the lower court to proceed with the trial of the criminal case until it is terminated,
without special pronouncement as to costs in this instance.

PEOPLE VS POMAR
G.R. NO. L-22008
NOVEMBER 3, 1924
JOHNSON, J.

FACTS
Julio Pomar, manager and person-in-charge of a tobacco factory, employed Macaria
Fajardo as cigar-maker. She was granted vacation leave beginning July 16, 1923 by
reason of pregnancy. On October 26, 1923, a case was filed against defendant Pomar for
failing to pay Fajardo her regular wages corresponding to 30 days before and 30 days
after her delivery and confinement, in accordance with Act 3071. Defendant Pomar
contended that his act does not constitute any offense because Act No. 3071
unconstitutional.

ISSUE
WON Act 3071 is valid and constitutional

HELD
No. Act 3071 is unconstitutional. While it is contended that the Act is within the police
power of the State, it cannot be exercised in contravention of the constitution.
The right to enter into lawful contracts constitutes one of the liberties of the people of
the State. If that right be struck down or arbitrarily interfered with, there is substantial
imprisonment of the people under the Constitution. The right to enter into lawful
contracts is as essential to the laborer as it is to the capitalist. A citizen cannot be
compelled to give employment to another citizen nor can anyone be employed against
his will. Liberty includes the right to labor but also to refuse to labor and consequently
the right to labor or for labor and to terminate such contracts and to refuse to make
such contracts.

PHIL. ASSOCIATION OF SERVICE EXPORTERS INC VS DRILON


G.R. NO. 81958
JUNE 30, 1988
SARMIENTO, J.

FACTS:
The Philippine Association of Service Exporters, Inc. (PASEI) challenges the
Constitutional validity of Department Order No. 1, Series of 1988, of the Department of
Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in
this petition for certiorari and prohibition. Specifically, the measure is assailed for
"discrimination against males or females;" that it "does not apply to all Filipino workers
but only to domestic helpers and females with similar skills;" and that it is violative of
the right to travel. It is held likewise to be an invalid exercise of the lawmaking power,
police power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making
processes affecting their rights and benefits as may be provided by law." Department
Order No. 1, it is contended, was passed in the absence of prior consultations. It is
claimed, finally, to be in violation of the Charter's non-impairment clause, in addition to
the "great and irreparable injury" that PASEI members face should the Order be further
enforced.

ISSUE: Whether or not the Department Order No. 1 in nature of the police power is valid
under the Constitution?

HELD:
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed validity. In the absence of clear and
convincing evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should be
nullified. There is no question that Department Order No. 1 applies only to "female
contract workers," but it does not thereby make an undue discrimination between the
sexes. It is well-settled that "equality before the law" under the Constitution does not
import a perfect Identity of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest on substantial distinctions; (2)
they are germane to the purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of the same class.
The Court is well aware of the unhappy plight that has befallen our female labor force
abroad, especially domestic servants, amid exploitative working conditions marked by
physical and personal abuse. As precisely the caretaker of Constitutional rights, the
Court is called upon to protect victims of exploitation. In fulfilling that duty, the Court
sustains the Government's efforts.

The same, however, cannot be said of our male workers. In the first place, there is no
evidence that, except perhaps for isolated instances, our men abroad have been
afflicted with an identical predicament. Suffice it to state, then, that insofar as
classifications are concerned, this Court is content that distinctions are borne by the
evidence. Discrimination in this case is justified.
There is likewise no doubt that such a classification is germane to the purpose behind
the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to
"enhance the protection for Filipino female overseas workers" this Court has no quarrel
that in the midst of the terrible mistreatment Filipina workers have suffered abroad, a
ban on deployment will be for their own good and welfare.

The Order does not narrowly apply to existing conditions. Rather, it is intended to apply
indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending
review of the administrative and legal measures, in the Philippines and in the host
countries . . ."), meaning to say that should the authorities arrive at a means impressed
with a greater degree of permanency, the ban shall be lifted.
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas
deployment. From scattered provisions of the Order, it is evident that such a total ban
has not been contemplated.

The consequence the deployment ban has on the right to travel does not impair the
right. The right to travel is subject, among other things, to the requirements of "public
safety," "as may be provided by law. Neither is there merit in the contention that
Department Order No. 1 constitutes an invalid exercise of legislative power. It is true
that police power is the domain of the legislature, but it does not mean that such an
authority may not be lawfully delegated. As we have mentioned, the Labor Code itself
vests the Department of Labor and Employment with rule-making powers in the
enforcement whereof.

The non-impairment clause of the Constitution, invoked by the petitioner, must yield to
the loftier purposes targeted by the Government. Freedom of contract and enterprise,
like all other freedoms, is not free from restrictions, more so in this jurisdiction, where
laissez faire has never been fully accepted as a controlling economic way of life.

This Court understands the grave implications the questioned Order has on the business
of recruitment. The concern of the Government, however, is not necessarily to maintain
profits of business firms. In the ordinary sequence of events, it is profits that suffer as a
result of Government regulation. The interest of the State is to provide a decent living to
its citizens. The Government has convinced the Court in this case that this is its intent.
We do not find the impugned Order to be tainted with a grave abuse of discretion to
warrant the extraordinary relief prayed for.

ABELLA VS NLRC
G.R. NO. 71813
JULY 20, 1987
PARAS, J.

FACTS:
On June 27, 1960 the petioner, Rosalina Perez Abella leased a farm land known as
Hacienda Danao-Ramona, for a period of ten (10) years. She opted to extend the leased
contract for another ten(10) years. During the existence of the lease, she employed the
private respondents Ricardo Dionele, Sr.,and Romeo Quitco. Upon the expiration of her
leasehold rights, petitioner dismissed private respondents and turned over the hacienda
to the owners thereof on October 5, 1981, who continued the management, cultivation
and operation of the farm.

On November 20, 1981, private respondents filed a complaint against the petitioner at
the Ministry of Labor and Employment, Bacolod City District Office, for overtime pay,
illegal dismissal and reinstatement with backwages. After the parties had presented
their respective evidence, Labor Arbiter Manuel M. Lucas, Jr., in a Decision dated July
16, 1982, ruled that the dismissal is warranted by the cessation of business, but granted
the private respondents separation pay. Petitioner appealed, the National Labor
Relations Commission, in a Resolution affirmed the decision and dismissed the appeal
for lack of merit. Petitioner filed a Motion for Reconsideration, but the same was
denied. Hence, the present petition.

ISSUE:
Whether or not private respondents are entitled to separation pay?

HELD:
The petition is devoid of merit. Article 284 of the Labor Code as amended by BP 130 is
the law applicable in this case. The purpose of Article 284 as amended is obvious-the
protection of the workers whose employment is terminated because of the closure of
establishment and reduction of personnel. Without said law, employees like private
respondents in the case at bar will lose the benefits to which they are entitled
for the thirty three years of service in the case of Dionele and fourteen years in the case
of Quitco. Although they were absorbed by the new management of the hacienda, in
the absence of any showing that the latter has assumed the responsibilities of the
former employer, they will be considered as new employees and the years of service
behind them would amount to nothing.
It is well-settled that in the implementation and interpretation of the provisions of the
Labor Codeand its implementing regulations, the workingman's welfare should be the
primordial and paramount consideration.

The instant petition is hereby dismissed and Decision of the Labor Arbiter and the
resolution of the ministry of labor and employment are hereby affirmed.

EURO-LINEA PHIL, INC. VS. NLRC


G.R. NO. 78782
DECEMBER 1 , 1987
PARAS, J.

Laborers Welfare: Liberal Approach

Facts:

Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping expediter
on a probationary basis for a period of six months. Prior to hiring by petitioner, Pastoral
had been employed by Fitscher Manufacturing Corporation also as shipping expediter.
On 4 February 1984, Pastoral received a memorandum terminating his probationary
employment in view of his failure to meet the performance standards set by the
company. Pastoral filed a complaint for illegal dismissal against petitioner. On 19 July
1985, the Labor Arbiter found petitioner guilty of illegal dismissal. Petitioner appealed
the decision to the NLRC on 5 August 1985 but the appeal was dismissed. Hence the
petition for review seeking to reverse and set aside the resolution of public respondent
NLRC, affirming the decision of the Labor Arbiter, which ordered the reinstatement of
complainant with six months backwages.

Issue:

Whether or not the National Labor Relations Commission acted with grave abuse of
discretion amounting to excess of jurisdiction in ruling against the dismissal of the
respondent, a temporary or probationary employee, by his employer.

Ruling:

Although a probationary or temporary employee has a limited tenure, he still enjoys the
constitutional protection of security of tenure.

Furthermore, what makes the dismissal highly suspicious is the fact that while petitioner
claims that respondent was inefficient, it retained his services until the last remaining
two weeks of the six months probationary employment. No less important is the fact
that private respondent had been a shipping expediter for more than one and a half
years before he was absorbed by petitioner. It therefore appears that the dismissal in
question is without sufficient justification.

It must be emphasized that the prerogative of management to dismiss or lay-off an


employee must be done without abuse of discretion, for what is at stake is not only
petitioner's position but also his means of livelihood. The right of an employer to freely
select or discharge his employees is subject to regulation by the State, basically in the
exercise of its paramount police power.

Petition dismissed for lack of merit and decision by the NLRC is affirmed.

MANILA ELECTRIC COMPANY VS. NLRC


G.R. NO. 78763
JULY 12,1989
MEDIALDEA, J.

FACTS: Apolinario Signo was employed in Meralco as supervisor-leadman since Jan


1963. In 1981, he supervised the installation of electricity in de Laras house in Antipolo.
De Laras house was not yet within the required 30-meter distance from the Meralco
facility hence he is not yet within the service scope of Meralco. As a workaround, Signo
had it be declared that a certain sarisari store nearer the facility be declared as de Laras
so as to facilitate the installation. Evertything would have been smooth thereafter but
due to fault of the Power Sales Division of Meralco, de Lara was not billed for a year.
Investigation was conducted and Meralco found out the irregularity in Signos work on
de Laras electricity installation. Signo was dismissed on May 18, 1983. Signo filed a case
for illegal dismissal and for backwages. The Lanor Arbiter ruled that though there is a
breach of trust in the actuations of Signo dismissal is a harsh penalty as Signo has been
employed for more than 20 years by Meralco and has been commended twice before
for honesty. The NLRC affirmed the Labor Arbiter. Meralco appealed.

ISSUE: Whether or not there has been due process in the dismissal of Signo.

HELD: The SC sustained the decision of the NLRC. Well-established is the principle that
findings of administrative agencies which have acquired expertise because their
jurisdiction is confined to specific matters are generally accorded not only respect but
even finality. Judicial review by this Court on labor cases does not go so far as to
evaluate the sufficiency of the evidence upon which the proper labor officer or office
based his or its determination but is limited to issues of jurisdiction or grave abuse of
discretion. Notwithstanding the existence of a valid cause for dismissal, such as breach
of trust by an employee, nevertheless, dismissal should not be imposed, as it is too
severe a penalty if the latter has been employed for a considerable length of time in the
service of his employer. Reinstatement of respondent Signo is proper in the instant case,
but without the award of backwages, considering the good faith of the employer in
dismissing the respondent.

SOSITO VS. AGUINALDO DEVELOPMENT CORPORATION


G.R. NO. L-48926
DECEMBER 14, 1987
CRUZ, J.

Facts:
Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging
company, and was in charge of logging importation, with a monthly salary of P675.00,
when he went on indefinite leave with the consent of the company on January 16, 1976.
On July 20, 1976, the private respondent, through its president, announced a
retrenchment program and offered separation pay to employees in the active service as
of June 30, 1976, who would tender their resignations not later than July 31, 1976. The
petitioner decided to accept this offer and so submitted his resignation on July 29, 1976,
"to avail himself of the gratuity benefits" promised. However, his resignation was not
acted upon and he was never given the separation pay he expected. The petitioner
complained to the Department of Labor, where he was sustained by the labor arbiter.
The company was ordered to pay Sosito the sum of P 4,387.50, representing his salary
for six and a half months. On appeal to the National Labor Relations Commission, this
decision was reversed and it was held that the petitioner was not covered by the
retrenchment program.

Issue: whether or not the petitioner is entitled to separation pay under the
retrenchment program of the private respondent.

Held: The petitioner is not one of those entitled for separation pay under the
retrenchment program. It is clear from the memorandum that the offer of separation
pay was extended only to those who were in the active service of the company as of
June 30, 1976. It is equally clear that the petitioner was not eligible for the promised
gratuity as he was not actually working with the company as of the said date. Being on
indefinite leave, he was not in the active service of the private respondent although, if
one were to be technical, he was still in its employ. Even so, during the period of
indefinite leave, he was not entitled to receive any salary or to enjoy any other benefits
available to those in the active service.
COLGATE PALMOLIVE PHILIPPINES VS. OPLE
G.R. NO. 73681
JUNE 30, 1988
PARAS, J.

Facts:
On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of
Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to
bargain, dismissal of union officers/members; and coercing employees to retract their
membership with the union and restraining non-union members from joining the union.
MOLE declared that the union is not authorized.Union reiterated the issue in its Notice
to Strike, alleging that it was duly registered with the Bureau of Labor Relations under
Registry No. 10312-LC with a total membership of 87 regular salesmen (nationwide) out
of 117 regular salesmen presently employed by the company as of November 30, 1985
and that since the registration of the Union up to the present, more than 2/3 of the
total salesmen employed are already members of the Union, leaving no doubt that the
true sentiment of the salesmen was to form and organize the Colgate-Palmolive
Salesmen Union. The Minister directly certified the respondent Union as the collective
bargaining agent for the sales force in petitioner company and ordered the
reinstatement of the three salesmen to the company on the ground that the employees
were first offenders.

Issue:
Whether the Minister of Labor correctly certified the respondent as the petitioners
union.

Held:
No.
Petitioner concedes that respondent Minister has the power to decide a labor dispute in
a case assumed by him under Art. 264 (g) of the Labor Code but this power was
exceeded when he certified respondent Union as the exclusive bargaining agent of the
company's salesmen since this is not a representation proceeding as described under
the Labor Code. Moreover the Union did not pray for certification but merely for a
finding of unfair labor practice imputed to petitioner-company.

The procedure for a representation case is outlined in Arts. 257-260 of the Labor Code,
in relation to the provisions on cancellation of a Union registration under Arts.239-240
thereof, the main purpose of which is to aid in ascertaining majority representation.
Contrary to the respondent Minister's observation, the holding of a certification election
at the proper time is not necessarily a mere formality as there was a compelling legal
reason not to directly and unilaterally certify a union whose legitimacy is precisely the
object of litigation in a pending cancellation case filed by certain "concerned salesmen,"
who also claim majority status. Even in a case where a union has filed a petition for
certification elections, the mere fact that no opposition is made does not warrant a
direct certification. More so as in the case at bar, when the records of the suit show that
the required proof was not presented in an appropriate proceeding and that the basis of
the direct certification was the Union's mere allegation in its position paper that it has
87 out of 117 regular salesmen. In other words, respondent Minister merely relied on
the self-serving assertion of the respondent Union that it enjoyed the support of the
majority of the salesmen, without subjecting such assertion to the test of competing
claims.

The order of the respondent Minister to reinstate the employees despite a clear finding
of guilt on their part is not in conformity with law. Reinstatement is simply incompatible
with a finding of guilt. Where the totality of the evidence was sufficient to warrant the
dismissal of the employees the law warrants their dismissal without making any
distinction between a first offender and a habitual delinquent. Under the law,
respondent Minister is duly mandated to equally protect and respect not only the labor
or workers' side but also the management and/or employers' side. The law, in
protecting the rights of the laborer, authorizes neither oppression nor self-destruction
of the employer. To order the reinstatement of the erring would in effect encourage
unequal protection of the laws as a managerial employee of petitioner company
involved in the same incident was already dismissed and was not ordered to be
reinstated.

MENDOZA VS. RURAL BANK OF LUCBAN


G.R. NO. 155421
JULY 7, 2004
PANGANIBAN, J.

Facts:

On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board
Resolution Nos. 99-52 and 99-53, that in line with the policy of the bank to familiarize
bank employees with the various phases of bank operations and further strengthen the
existing internal control system[,] all officers and employees are subject to reshuffle of
assignments. Moreover, this resolution does not preclude the transfer of assignment of
bank officers and employees from the branch office to the head office and vice-versa."
Petitioner filed a Complaint before Arbitration Branch No. IV of the National Labor
Relations Commission (NLRC). The Complaint -- for illegal dismissal, underpayment,
separation pay and damages. Petitioner argues that he was compelled to file an action
for constructive dismissal, because he had been demoted from appraiser to clerk and
not given any work to do, while his table had been placed near the toilet and eventually
removed.

He adds that the reshuffling of employees was done in bad faith, because it was
designed primarily to force him to resign.After the NLRC denied his Motion for
Reconsideration, petitioner brought before the CA a Petition for Certiorari assailing the
foregoing Resolution. The Court of appeals Find that no grave abuse of discretion could
be attributed to the NLRC.
Hence, this Petition.

Issue:
Whether the petitioner was constructively dismissed from his employment?

Held:
The Petition has no merit.

Constructive dismissal is defined as an involuntary resignation resorted to when


continued employment is rendered impossible, unreasonable or unlikely; when there is
a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility
or disdain by an employer becomes unbearable to the employee. Jurisprudence
recognizes the exercise of management prerogatives. For this reason, courts often
decline to interfere in legitimate business decisions of employers. Indeed, labor laws
discourage interference in employers' judgments concerning the conduct of their
business. The law must protect not only the welfare of employees, but also the right of
employers.

The law protects both the welfare of employees and the prerogatives of management.
Courts will not interfere with business judgments of employers, provided they do not
violate the law, collective bargaining agreements, and general principles of fair play and
justice. The transfer of personnel from one area of operation to another is inherently a
managerial prerogative that shall be upheld if exercised in good faith -- for the purpose
of advancing business interests, not of defeating or circumventing the rights of
employees.

GELMART INDUSTRIES PHILS., INC. VS. NLRC


G.R. NO. 85668
AUGUST 10, 1989
GANCAYCO, J.

Facts:
Private respondent Felix Francis started working as an auto-mechanic for petitioner
Gelmart Industries Phils., Inc. (hereinafter referred to as GELMART) sometime in 1971
As such, his work consisted of the repair of engines and under chassis, as well as trouble
shooting and overhauling of company vehicles. He is likewise entrusted with some tools
and spare parts in furtherance of the work assigned to him.

On April 11, 1987, private respondent was caught by the security guards taking out of
GELMART's premises one (1) plastic container filled with about 16 ounces of "used'
motor oil, without the necessary gate pass to cover the same as required under
GELMART's rules and regulations. By reason thereof, petitioner, on April 13, 1987, was
placed under preventive suspension pending investigation for violation of company
rules and regulations. Under the said rules, theft and/or pilferage of company property
merits an outright termination from employment.

After due investigation, or on May 20, 1987, private respondent was found guilty of
theft of company property. As a consequence, his services were severed.
Thereafter, private respondent filed a complaint for illegal dismissal before the NLRC. In
a decision dated February 26, 1988, Labor Arbiter Ceferina J. Diosana ruled that private
respondent was illegally dismissed and, accordingly, ordered the latter's reinstatement
with full backwages from April 13, 1987 up to the time of actual reinstatement.

Issue:
Whether or not the National Labor Relations Commission (NLRC) committed a grave
abuse of discretion amounting to lack or excess of jurisdiction in ordering the
reinstatement of private respondent to his former position with payment of backwages
equivalent to six (6) months.

Held:
Consistent with the policy of the State to bridge the gap between the underprivileged
workingmen and the more affluent employers, the NLRC rightfully tilted the balance in
favor of the workingmen and this was done without being blind to the concomitant
right of the employer to the protection of his property.
Thus, without being too harsh to the employer, on the one hand, and naively liberal to
labor, on the other, the NLRC correctly pointed out that private respondent cannot
totally escape liability for what is patently a violation of company rules and regulations.
Considering that private respondent herein has no previous derogatory record in his
fifteen (15) years of service with petitioner GELMART the value of the property pilfered
(16 ounces of used motor oil) is very minimal, plus the fact that petitioner failed to
reasonably establish that non-dismissal of private respondent would work undue
prejudice to the viability of their operation or is patently inimical to the company's
interest, it is more in consonance with the policy

LAGATIC VS. NLRC


G.R. NO. 121004
JANUARY 28, 1998
ROMERO, J.:

FACTS:
Cityland employed Petitioner, Romeo Lagatic, as a marketing specialist in May 1986. He
was tasked with with soliciting sales for the company as well as accepting call-ins,
referrals, and making client calls and cold calls. It was believed by Cityland that cold calls
is an effective and cost-efficient method of finding clients and required all marketing
specialist to make the same but requires submissions of daily progress reports on cold
calls for assessment and to determine its results. Petitioner was suspended for 3 days on
November 1992, for his failure to submit cold call reports on different days of
September and October 1992 despite a written reprimand for infractions of the same
committed a year earlier and a warning that if he continues to not comply with the
requirement it will result in termination.

Petitioner failed again to submit cold call reports for 5 days of February 1993 despite the
aforesaid suspension and warning. He was then verbally reminded to submit the reports
and was given an extension up to Feb. 17, 1993. Petitioner still did not comply and
instead wrote a note with the words, TO HELL WITH COLD CALLS! WHO CARES?, and
exhibiting it to his co-employees. He left the note lying on top of his desk where
everyone could see it to worsen the matter.
On Feb. 23, 1993, a memorandum was received by the Petitioner requiring him to
explain why Cityland should not implement their previous warning for his failure to
submit cold call reports, as well as, for the written statement he exhibited. The
petitioner replied through a letter that his not complying with the submission of cold
call reports must not be deemed as gross insubordination and he denied having
knowledge about the damaging statement that was being accused of him.

Cityland found the petitioner of guilty of gross insubordination and then served upon
him a notice of dismissal on Feb. 26, 1993. The petitioner then felt wronged by the
dismissal and filed a complaint against Cityland for illegal dismissal, illegal deduction,
underpayment, overtime and rest day pay, damages and attorneys fees. The labor
arbiter dismissed it but it was appealed and affirmed by the NLRC.

ISSUE:
Whether or not the respondent NLRC gravely abused its discretion in not finding the
petitioner illegally dismissed.

HELD:
The petition lacks merit.

To constitute a valid dismissal from employment, two requisites must be met, namely:
(1) the employee must be afforded due process, and (2) the dismissal must be for a valid
cause.
Petitioner loses sight of the fact that except as provided for, or limited by, special laws,
an employer is free to regulate, according to his discretion and judgment, all aspects
of employment. Employers may, thus, make reasonable rules and regulations for the
government of their employees, and when employees, with knowledge of an
established rule, enter the service, the rule becomes a part of the contract of
employment. It is also generally recognized that company policies and regulations,
unless shown to be grossly oppressive or contrary to law, are generally valid and binding
on the parties and must be complied with.
Corollarily, an employee may be validly dismissed for violation of a reasonable company
rule or regulation adopted for the conduct of the company business. An employer
cannot rationally be expected to retain the employment of a person whose x x x lack of
regard for his employers rules x x x has so plainly and completely been bared.
Petitioners continued infraction of company policy requiring cold call reports, as
evidenced by the 28 instances of non-submission of aforesaid reports, justifies his
dismissal. He cannot be allowed to arrogate unto himself the privilege of setting
company policy on the effectivity of solicitation methods. To do so would be to sanction
oppression and the self-destruction of the employer.

More than that, his written statement shows his open defiance and disobedience to
lawful rules and regulations of the company. Likewise, said company policy of requiring
cold calls and the concomitant reports thereon is clearly reasonable and lawful,
sufficiently known to petitioner, and in connection with the duties which he had been
engaged to discharge. There is, thus, just cause for his dismissal.
CHINA BANKING CORPORATION V. BORROMEO
G.R. NO. 156515
OCTOBER 19, 2004
CALLEJO, SR., J.

Facts:

Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking


Group of China Banking Corporation for the Mindanao Area. Without authority from the
Executive Committee or Board of Directors of the bank, he approved several DAUD/BP
(Drawn Against Uncollected Deposits/Bills Purhcased) accommodations amounting to
P2,441,375 in favour of Joel Maniwan. Such checks, which are not sufficiently funded by
cash, are generally not honoured by banks. This came to the knowledge of the bank
authorities. A memorandum was issued to the Mariano seeking clarification relative15
to the matter. The respondent accepted full responsibility for committing an error in
judgment and abuse of discretion.

Mariano resigned from the Bank and apologized for all the trouble I have caused
because of the Maniwan case. The respondent, however, vehemently denied
benefitting therefrom. His acts having constituted violation of the Banks Code of Ethics,
the respondent was directed to restitute the amount of P1,507,736.79 representing 90%
of the total loss of P1,675,263.10 incurred by the Bank. However, in view of his
resignation and considering the years of service in the Bank, the management
earmarked only P836,637.08 from the respondents total separation benefits or pay.
The said amount would be released upon recovery of the sums demanded from
Maniwan in a civil case filed against him by the bank with the RTC in Cagayan de Oro
City.
The respondent made a demand on the bank for the payment of his separation pay and
other benefits, but the bank maintained its position to withhold the sum of
P836,637.08. Thus, Mariano filed with the NLRC a complaint for payment of separation
pay, mid-year bonus, profit share and damages against the bank.

The Labor Arbiter ruled in favour of the bank. Respondent appealed to the NLRC but it
affirmed in toto the findings of the Labor Arbiter. The CA, however, alleging that
respondent was denied his right to due process, set aside the NLRC decision and
ordered that the records of the case be remanded to the Labor Arbiter for further
hearings on the factual issues involved. The bank filed a motion for reconsidered but
denied the same. Hence, this petition.

Issue:

Whether or not the bank has the prerogative/right to impose on the respondent what it
considered the appropriate penalty under the circumstances pursuant to its company
rules and regulations.

Held:

The petition is meritorious.The bank was left with no other course but to impose the
ancillary penalty of restitution. It was certainly within the banks prerogative to impose
on the respondent what it considered the appropriate penalty under the circumstances
pursuant to its company rules and regulations.

The petitioners bank business is essentially imbued with public interest and owes great
fidelity to the public it deals with. It is expected to exercise the highest degree of
diligence in the selection and supervision of their employees. As a corollary, and like all
other business enterprises, its prerogative to discipline its employees and to impose
appropriate penalties on erring workers pursuant to company rules and regulations
must be respected. The law, in protecting the rights of labor, authorized neither
oppression nor self-destruction of an employer company which itself is possessed of
rights that must be entitled to recognition and respect.

Significantly, the respondent is not wholly deprived of his separation benefits. As the
Labor Arbiter stressed in his decision, the separation benefits due the complainant
were merely withheld. Even the petitioner bank itself gives the assurance that as soon
as the bank has satisfied a judgment in the civil case, the earmarked portion of his
benefits will be released without delay.

WHEREFORE, the petition is granted. The decision of the CA is reversed and set aside.
The Resolution of the NLRC is reinstated.
ASSOCIATED WATCHMEN AND SECURITY UNION VS. LANTING
G.R. NO. L 14120
FEBRUARY 29, 1960
LABRADOR, J.

Facts:
Petitioner and its members declared a strike against respondent-company and other
shipping firms. Subsequently, through the Court of Industrial Relations (CIR), the strikers
expressed their willingness to return to work. However, the respondent-company stated
that it would re-instate the said strikers if the petitioner would file a bond of Php 5,
000.00. Petitioner did not comply with said condition, thus, their members were not re-
instated by the respondent-company. Eventually, petitioners filed a case against the
respondent-company for allegedly committing unfair labor practice. The trial court
decided in favor of the petitioners on the basis that the bond hinders the re-
employment of the union members. The CIR, however, reversed the trial courts
decision.

Issue:
Is the respondent company guilty of unfair labor practice when it asked the petitioner to
file a bond of Php 5, 000.00 in order for the latters members to be re-instated?

Ruling:
No, the Supreme Court finds no merit in the petitioners contention that the
respondent-company committed unfair labor practice. As embodied in the Labor Code,
the employers are vested with certain rights that they may exercise so as to protect
their interests and capital.

In the present case, the Court ruled in favor of the respondents due to the following
reasons:
The law gives respondent company the right to protect its interest, especially, when in
this case, the union members abandoned their posts without notice when they joined
the strike. Consequently, the acts of the union members exposed the company to
possible dangers such as theft and pilferage.
It was obvious that the bond asked by the respondent company was not demanded
from the petitioner. The agreement between the two parties was plain and simple re-
instatement shall be applied to those agencies who are willing to file the bond.
There is no existing contract between the two parties and that the union members were
not direct employees of the respondent company. Said union members were merely
casual guards of the said company.

Therefore, the Court affirms the decision of the CIR and costs are imposed against the
petitioner.
PAMPANGA BUS COMPANY, INC., VS. PAMBUSCO EMPLOYEES' UNION, INC.
G.R. NO. 46739
SEPTEMBER 23, 1939

FACTS:
On May 31, 1939, the Court of Industrial Relations issued an order, directing the
petitioner herein, Pampanga Bus Company, Inc., to recruit from the respondent,
Pambusco Employees'Union, Inc., new employees or laborers it may need to replace
members of the union who may be dismissed from the service of the company, with the
proviso that, if the union fails to provide employees possessing the necessary
qualifications, the company may employ any other persons it may desire. This order, in
substance and in effect, compels the company, against its will, to employ preferentially,
in its service, the members of the union.

Issue:
Whether or not the said order issued by the CIR valid and not violative of the right of the
employer to select employees.

Held:
We hold that the court has no authority to issue such compulsory order. The general
right to make a contract in relation to one's business is an essential part of the liberty of
the citizens protected by the due-process clause of the Constitution. The right of the
laborer to sell his labor to such person as he may choose is, in its essence, the same as
the right of an employer to purchase labor from any person whom it chooses. The
employer and the employee have thus an equality of right guaranteed by the
Constitution. Section of Commonwealth Act No. 213 confers upon labor organizations
the right "to collective bargaining with employers for the purpose of seeking better
working and living conditions, fair wages, and shorter working hours for laborers, and, in
general, to promote the material, social and moral well-being of their members." This
provision in granting to labor unions merely the right of collective bargaining, impliedly
recognizes the employer's liberty to enter or not into collective agreements with them.
Indeed, we know of no provision of the law compelling such agreements. Such a
fundamental curtailment of freedom, if ever intended by law upon grounds of public
policy, should be effected in a manner that is beyond all possibility of doubt. The
supreme mandates of the Constitution should not be loosely brushed aside. As held by
the Supreme Court of the United States in Hitchman Coal & Co. vs. Mitchell (245 U. S.,
229; 62Law. ed., 260, 276):

GREGORIO ARANETA EMPLOYEES UNION VS. ROLDAN


G.R. NO. L-6846
JULY 20, 1955

FACTS
A petition for certiorari to review the Resolution of the Court of Industrial Relations
dated March 31, 1953.

The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947 with a
capital of P200,000. The total investment in that Division in 1953 was about P3,000,000.
To reduce this overcapitalization, the Board of Directors felt that it was necessary either
to invite fresh capital from outside or to adopt a retrenchment policy. When Heacock
and Company refused the invitation to invest in the enterprise, the Board took the
alternative of retrenchment.
The Board decided not to import as much merchandise as usual. It also reduced credits.
All these plans required a reduction in the volume of business necessitating likewise a
reduction of personnel and caused the laying off of 17 employees. The selection of
those to be laid off was made by a technical man and approved by the Board. These
employees were given one month separation pay, except Nicolas Gonzalez who refused
to receive it.

The reorganization of the Agricultural Division was adopted by unanimous resolution of


the Board of Directors as a consequence of the retrenchment policy. This was adopted
even before the petitioner, "Gregorio Araneta Employees' Union", was organized and;
consequently, it was never directed against the union. Judge Bautista adds: ". . .
Considering this fact, and taking into account all the circumstances of this case,
especially the actual reduction of business of said Division, the court fails to find
sufficient justification for altering the action of the Board of Directors regarding those
employees, who received their severance pay".
Judge Bautista, however, believed that Gonzales should not have been separated
because his work was shifted to another employee by the name of Augusto Achacoso,
who was thus overburdened.

Both parties filed their respective motions for reconsideration with the court en banc.
The latter modified the decision of Associate Judge Bautista in its resolution of March
31, 1953, prepared by the Presiding Judge Arsenio C. Roldan and concurred in by
Associate Judges Modesto Castillo and Juan L. Lantin. The modification consists only in
holding that the laying off of Gonzalez was also legal. Judge Bautista dissented with
regard to the separation of Gonzalez, giving the same reasons he gave in his original
opinion.

ISSUE:
Whether or not the company engaged in unfair labor practice by adopting a policy of
retrenchment aimed at the Union or any of its members.

HELD:
We find no reason for disturbing the decision of the Court of Industrial Relations, en
banc. The laying off of the 17 employees was due to the retrenchment policy which the
Company had to adopt in order to reduce the overcapitalization and minimize expenses.
The volume of business was considerably reduced.

It should be noted that the retrenchment policy was adopted before even the
organization of the petitioning union. It was not, therefore, aimed at the Union or any of
its members for union or labor activities. It was not an unfair labor practice.
In view of the foregoing, the petition is denied, without pronouncement as to costs. It is
so ordered.

PHILIPPINE STEEL METAL WORKERS UNION V. CIR


G.R. NO. L-2028
APRIL 28, 1949
REYES, J.

Facts:

This is a petition for certiorari to review an order of the Court of Industrial Relations on
the ground that the same was rendered in excess of jurisdiction and with grave abuse of
discretion.

On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of
Labor Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to
bargain, dismissal of union officers/members; and coercing employees to retract their
membership with the union and restraining non-union members from joining the union.

The said order was issued of said court involving an industrial dispute between the
respondent company (a corporation engaged in the manufacture of tin plates,
aluminum sheets, etc.) and its laborers some of whom belong to the Philippine Sheet
Metal Workers' Union (CLO) and some to the Liberal Labor Union.

The dispute was over certain demands made upon the company by the laborers, one of
the demands, being for the recall of eleven workers who had been laid off. Temporarily
taken back on certain conditions pending final determination of the controversy, these
eleven workers were in the end ordered retained in the decision handed down by the
court on February 19, 1947.

The petitioner tried to prove that the 11 laborers were laid off by the respondent
company due to their union activities.

On February 10, 1947, that is, nine days before the decision came down, filed a motion
in the case, asking for authority to lay off at least 15 workers in its can department on
the ground that the installation and operation of nine new labor-saving machines in said
department had rendered the services of the said workers unnecessary.
Issue:

W/N the firing of the laborers due to their union activities is valid?

Ruling:

Yes. The right to reduce personnel should, of course, not be abused. It should not be
made a pretext for easing out laborers on account of their union activities. But neither
should it be denied when it is shows that they are not discharging their duties in a
manner consistent with good discipline and the efficient operation of an industrial
enterprise.

The petitioner contends that the order complained of was made with grave abuse of
discretion and in excess of jurisdiction in that it is contrary to the pronouncement made
by the lower court in its decision in the main case where it disapproved of the dismissal
of eleven workers "with whom the management is displeased due to their union
activities." It appears, however, that the pronouncement was made upon a distinct set
of facts, which are different from those found by the court in connection with the
present incident, and that very decision, in ordering the reinstatement of the eleven
laborers, qualifies the order by saying that those laborers are to be retained only "until
the occurrence of facts that may give rise to a just cause of their laying off or dismissal,
or there is evidence of sufficient weight to convince the Court that their conduct is not
satisfactory."

After a careful review of the record, we find that the Court of Industrial Relations has
neither exceeded its jurisdiction nor committed grave abuse of discretion in rendering
the order complained of. The petition for certiorari is, therefore, denied, but without
costs against the petitioner for the reasons stated in its motion to litigate as pauper.

TIONG KING VS. COURT OF INDUSTRIAL RELATIONS


G.R. NO. L-3587
DECEMBER 21, 1951
PARAS, J.

FACTS:
Gaw Pun So owned and operated a tailor shop known as the Army Shirt Factory, located
in his own house at Nos. 231-245 Soler Street, Manila. In January, 1948, he had a labor
dispute with his personnel and, pending the case in the Court of Industrial Relations,
Gaw Pun So, irked and worried by the incidents of litigation, thought of dissolving the
business and selling the sewing machines. Tiong King offered to take over the business
by leasing the place and the sewing machines. The transfer was put in writing. Tiong
King continued the Army Shirt Factory from the month of February with the same
employees had by Gaw Pun So. This transfer was known to the personnel, so much so
that the latter, as petitioner in the pending dispute in the Court of Industrial Relations,
prayed that Tiong King be included as a respondent. In due time, the National Tailors
Association entered that all cases were terminated against the respondents. This
agreement was duly approved by the Court of Industrial Relations. On April 27, 1948,
Tiong King filed a petition in the Court of Industrial Relations Case No. 117-V-3, alleging
that since he operated his shop in February, 1948, he had continually suffered losses;
that as there remained only very little of the capital originally invested, and that he was
definitely closing the shop on May 30, 1948. Tiong King accordingly prayed that he be
allowed to close his tailor shop and business from six o'clock in the afternoon of May 29,
1948. On May 29, 1948, Presiding Judge Arsenio C. Roldan of the Court of Industrial
Relations issued an order enjoining Tiong King not to close his factory and not to
dismiss, suspend or lay off any laborer or employee without previous authority of said
court. Upon petitioner for reconsideration filed by counsel for Tiong King, the Court of
Industrial Relations promulgated a resolution dated May 27, 1949, allowing Tiong King
to close his business and shop, subject to the condition that, upon reopening the same,
his former personnel would be taken back. Upon motion for reconsideration filed by
counsel for the National Tailor's Association, the Court of Industrial Relations,
promulgated a resolution dated October 31, 1949, reaffirming their stand on there
solution of the Court of Industrial Relations under date of July 1, 1949.The present
appeal by certiorari was taken by Tiong King against the last resolution of the Court of
Industrial Relations.

ISSUE:
Whether or not he was the owner or operator thereof and had the right to file the
petition in the Court of Industrial Relations to close the tailors shop.

HELD:
Upon this point, it is only sufficient to recall that the National Tailors Association
entered into a stipulation with Tiong King alone whereby they agreed that all cases
against the former owners of the business were terminated. That Tiong King was
conceded to be the owner and operator of the army shirt factory at the time his petition
to close it was filed, is conclusively borne out by the fact that Presiding Judge Roldan in
his decision of January 13, 1949, ordered Tiong King, and not Gaw Pun So, to pay the
salaries and wages of the personnel. It is contended, however, that "If at all the court
has approved of the agreement between the National Tailors' Association and Mr. Tiong
King it was because 'this arrangement is a very good solution to the present conflict
as it is advantageous not only to the union but also the management, and,is in
consonance with the contract entered into between the management and the new
workers." This contention is followed with the remark that the approval of said
agreement did not include a finding that Tiong King was either the owner or the lessee
of the Army Shirt Factory. We are unable to agree. In entering into the agreement with
the National Tailors Association, Tiong King acted in his own behalf, regardless of the
former owners of the business. Indeed, it was covenanted that all the cases against the
latter were deemed terminated. Considerations of fair play and justice demand that
Tiong King be given the full legal effect of said agreement which before the sanction of
the Court of Industrial Relations. There being no question that Tiong King's capital
invested in the Army Shirt Factory was almost exhausted at the time of the filing of his
petition to close it, said petition must necessity be granted. It is admitted by all the
Judges of the Court of Industrial Relations that an employer may close his business,
provided the same is done in good faith and is due beyond his control. To rule
otherwise, would be oppressive and inhuman. The court reversed the resolution of the
Court of Industrial Relations dated October 31, 1949, and affirmed the resolution of said
court dated May 27, 1949.

RIZAL EMPIRE INSURANCE GROUP V NLRC


G.R. NO. 73140
MAY 29, 1987
PARAS, J.

Facts:

In August, 1977, herein private respondent Rogelio R. Coria was hired by herein
petitioner Rizal Empire Insurance Group as a casual employee with a salary of P10.00 a
day. On January 1, 1978, he was made a regular employee, having been appointed as
clerk-typist, with a monthly salary of P300.00. Being a permanent employee, he was
furnished a copy of petitioner company's "General Information, Office Behavior and
Other Rules and Regulations." In the same year, without change in his position-
designation, he was transferred to the Claims Department and his salary was increased
to P450.00 a month. In 1980, he was transferred to the Underwriting Department and
his salary was increased to P580.00 a month plus cost of living allowance, until he was
transferred to the Fire Department as filing clerk. In July, 1983, he was made an
inspector of the Fire Division with a monthly salary of P685.00 plus allowances and
other benefits.

On October 15, 1983, private respondent Rogelio R. Coria was dismissed from work,
allegedly, on the grounds of tardiness and unexcused absences. Accordingly, he filed a
complaint with the Ministry of Labor and Employment (MOLE), and in a Decision dated
March 14, 1985 (Record, pp. 80-87), Labor Arbiter Teodorico L. Ruiz reinstated him to
his position with back wages. Petitioner filed an appeal with the National labor Relations
Commission (NLRC) but, in a Resolution dated November 15, 1985 (Ibid, pp. 31-32), the
appeal was dismissed on the ground that the same had been filed out of time. Hence,
the instant petition.
Issue:

Whether or not NLRC committed a grave abuse of discretion amounting to lack of


jurisdiction in dismissing petitioners appeal on a technicality.

Held:

Rule VIII of the Revised Rules of the National Labor Relations Commission on appeal,
provides:

SECTION 1. (a) Appeal. Decision or orders of a labor Arbiter shall be final and
executory unless appealed to the Commission by any or both of the parties within ten
(10) calendar days from receipt of notice thereof.

SECTION 6. No extension of period. No motion or request for extension of the period


within which to perfect an appeal shall be entertained.

The record shows that the employer (petitioner herein) received a copy of the decision
of the Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File
Memorandum of Appeal on April 11, 1985 and filed the Memorandum of Appeal on
April 22, 1985. Pursuant to the "no extension policy" of the National Labor Relations
Commission, aforesaid motion for extension of time was denied in its resolution dated
November 15, 1985 and the appeal was dismissed for having been filed out of time.

The Revised Rules of the National Labor Relations Commission are clear and explicit and
leave no room for interpretation. Moreover, it is an elementary rule in administrative
law that administrative regulations and policies enacted by administrative bodies to
interpret the law which they are entrusted to enforce, have the force of law, and are
entitled to great respect (Espanol v. Philippine Veterans Administration, 137 SCRA 314
[1985]).

Under the above-quoted provisions of the Revised NLRC Rules, the decision appealed
from in this case has become final and executory and can no longer be subject to
appeal.

Even on the merits, the ruling of the Labor Arbiter appears to be correct; the consistent
promotions in rank and salary of the private respondent indicate he must have been a
highly efficient worker, who should be retained despite occasional lapses in punctuality
and attendance. Perfection cannot after all be demanded.

WHEREFORE, this petition is DISMISSED.

SO ORDERED.
PASEI VS. DRILON
163 SCRA 386
JUNE 30, 1988
SARMIENTO, J.

FACTS:

The Department of Labor and Employment issued an order suspending the deployment
of Filipino domestic and household workers, in view of the heightened abuses
committed against OFWs abroad. The petitioner, a local recruitment agency, petitioned
for the invalidation of such order for alleged violation of equal protection clause.

ISSUE:
Whether or not the deployment ban a valid exercise of police power? What is police
power?

HELD:

Yes, the deployment ban of domestic helpers is a valid exercise of police power. Police
Power is the inherent power of the State to enact legislation that may interfere with
personal liberty and property in order to promote the general welfare.

CBTC EMPLOYERS UNION VS. CLAVE


141 SCRA 9
JANUARY 7, 1986
DE LA FUENTE, J.

Facts:
Commercial Bank and Trust Company Employees' Union lodged a complaint with the
Department of Labor, against Commercial trust Bank for non-payment of the holiday
pay benefits provided for under Art 95 of the Labor Code in relation to Rule X, Book III
of the Rules and Regulations Implementing the Labor Code. Failing to arrive at an
amicable settlement at conciliation level, the parties opted to submit their dispute for
voluntary arbitration. The issue presented was, whether the permanent employees of
the Bank within the collective bargaining unit paid on a monthly basis are entitled to
holiday pay effective November 1, 1974, pursuant to Article 94 of the Labor Code. In
addition, the disputants signed a Submission Agreement stipulating as final,
unappealable and executory the decision of the Arbitrator, including subsequent
issuances for clarificatory and/or relief purposes, notwithstanding Article 262 of the
Labor Code.The Union filed a Manifestation stating that in the event that said
Interpretative Bulletin regarding holiday pay would be adverse to the present claim
union respectfully reserves the right to take such action as may be appropriate to
protect its interests, a question of law being involved. An Interpretative Bulletin which
was inexistent at the time they said commitment was made and which maybe contrary
to the law itself should not bar the right of the union to claim for its holiday pay
benefits.Voluntary Arbitrator stated that, there is more reason to believe that, if the
Bank has never made any deduction from its monthly-paid employees for unworked
Saturdays, Sundays, legal and special holidays, it is because there is really nothing to
deduct properly since the monthly salary never really included pay for such unworked
days-and which give credence to the conclusion that the divisor '250' is the proper one
to use in computing the equivalent daily rate of the monthly-paid employees that both
the decree itself and the Rules mentioned enumerated the excepted workers. It is a
basic rule of statutory construction that putting an exception limits or modifies the
enumeration or meaning made in the law. It is thus easy to see that a mere reading of
the Decree and of the Rules would show that the monthly-paid employees of the Bank
are not expressly included in the enumeration of the exception.Voluntary Arbitrator
directed the bank to pay its monthly paid employees their legal holidaypay. The next
day, the Department of Labor released Policy Instructions No. 9 which clarifies
controversies on the entitlement of monthly paid employees. The new determining rule
is this: If themonthly paid employee is receiving not less than P 240, the maximum
monthly minimum wage, and his monthly pay is uniform from January to December, he
is presumed to be already paid the ten (10) paid legal holidays. However, if deductions
are made from his monthly salary on account of holidays in months where they occur,
then he is still entitled to the ten (10) paid legal holidays.

Issue:
Whether the permanent employees of the bank are entitled to holiday pay

Held:
Yes. They are entitled to holiday pay. In excluding the union members of herein
petitioner from the benefits of the holiday pay law, public respondent predicated his
ruling on Section 2, Rule IV, Book IIIof the Rules to implement Article 94 of the labor
Code promulgated by the then Secretary of labor and Policy Instructions No. 9. The
questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy
Instruction No. 9 add another excluded group, namely, 'employees who are uniformly
paid by the month'. While the additional exclusion is only in the form of a presumption
that all monthly paid employees have already been paid holiday pay, it constitutes a
taking away or a deprivation towards the employee.

NATIONAL HOUSING CORP. V. JUCO


G.R. NO. L-64313
JANUARY 17, 1985
GUTIERREZ, JR., J.

FACTS: Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/
MOLE but his case was dismissed by the labor arbiter on the ground that the NHA is a
govt-owned corp. and jurisdiction over its employees is vested in the CSC. On appeal,
the NLRC reversed the decision and remanded the case to the labor arbiter for further
proceedings. NHA in turn appealed to the SC

ISSUE: Are employees of the National Housing Corporation, a GOCC without original
charter, covered by the Labor Code or by laws and regulations governing the civil
service?
HELD: Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service
embraces every branch, agency, subdivision and instrumentality of the Government,
including every government owned and controlled corporation.
The inclusion of GOCC within the embrace of the civil service shows a deliberate effort
at the framers to plug an earlier loophole which allowed GOCC to avoid the full
consequences of the civil service system. All offices and firms of the government are
covered.
This consti provision has been implemented by statute PD 807 is unequivocal that
personnel of GOCC belong to the civil service and subject to civil service requirements.
"Every" means each one of a group, without exception. This case refers to a GOCC. It
does not cover cases involving private firms taken over by the government in
foreclosure or similar proceedings.

NATIONAL SERVICE CORPORATION VS NLRC


G.R. NO. L-69870
NOVEMBER 29, 1988
PADILLA, J.

Facts:
Eugenio Credo was an employee of the National Service Corporation. She claims she was
illegally dismissed. NLRC ruled orderingher reinstatement. NASECO argues that NLRC has
no jurisdiction to order her reinstatement. NASECO as a government corporation
byvirtue of its being a subsidiary of the NIDC, which is wholly owned by the Phil.
National Bank which is in turn a GOCC, the terms andconditions of employment of its
employees are governed by the Civil Service Law citing National Housing v Juco.

Issue:
W/N employees of NASECO, a GOCC without original charter, are governed by the Civil
Service Law.

Ruling:
NO. The holding in NHC v Juco should not be given retroactive effect, that is to cases
that arose before its promulgation of Jan 17, 1985. To do otherwise would be
oppressive to Credo and other employees similarly situated because under the 1973
Constibut prior to the ruling in NHC v Juco, this court recognized the applicability of the
Labor jurisdiction over disputes involving terms andconditions of employment in
GOCC's, among them NASECO.In the matter of coverage by the civil service of GOCC, the
1987 Consti starkly differs from the 1973 consti where NHC v Juco wasbased. It provides
that the "civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government,including government owned or controlled corporation
with original charter." Therefore by clear implication, the civil service doesnot include
GOCC which are organized as subsidiaries of GOCC under the general corporation law.

REPUBLIC OF THE PHILIPPINES VS. COURT OF APPEALS


G.R. NO. 87676
DECEMBER 20, 1989
GRINO-AQUINO, J.

FACTS
NPDC was originally created in 1963 under Executive Order No. 30, as the Executive
Committee for the development of the Quezon Memorial, Luneta and other national
parks, and later renamed as the National Parks Development Committee under
Executive Order No. 68, on September 21, 1967, it was registered in the Securities and
Exchange Commission (SEC) as a non-stock and non-profit corporation, known as "The
National Parks Development Committee, Inc.
On March 20, 1988, NPDCEA (TUPAS local Chapter No. 967) and NPDCSA (TUPAS
Chapter No. 1206), labor unions of employees of National Parks Development
Committee ,staged a stake at the Rizal Park, Fort Santiago, Paco Park, and Pook ni
Mariang Makiling at Los Banos, Laguna, alleging unfair labor practices.
On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III, a
complaint against the union to declare the strike illegal and to restrain it on the ground
that the strikers, being government employees, have no right to strike although they
may form a union.
Lower court dismissed the case for lack of jurisdiction as the case should be under the
jurisdiction of Department of Labor as there exist an Employer- Employee Relationship.
Court of appeals affirmed the order of the trial court, hence, this petition for review.

Issue
whether the petitioner, National Parks Development Committee (NPDC), is a
government agency, or a private corporation, for on this issue depends the right of its
employees to strike.

Ruling
Since NPDC is a government agency, its employees are covered by civil service rules and
regulations (Sec. 2, Article IX, 1987 Constitution). Its employees are civil service
employees (Sec. 14, Executive Order No. 180).
While NPDC employees are allowed under the 1987 Constitution to organize and join
unions of their choice, there is as yet no law permitting them to strike. In case of a labor
dispute between the employees and the government, Section 15 of Executive Order No.
180 dated June 1, 1987 provides that the Public Sector Labor- Management Council, not
the Department of Labor and Employment, shall hear the dispute. Clearly, the Court of
Appeals and the lower court erred in holding that the labor dispute between the NPDC
and the members of the NPDSA is cognizable by the Department of Labor and
Employment.
WHEREFORE, the petition for review is granted. The decision of the Court of Appeals in
CA-G.R. SP No. 14204 is hereby set aside. The private respondents' complaint should be
filed in the Public Sector Labor-Management Council as provided in Section 15 of
Executive Order No. 180. Costs against the private respondents.

LUZON DEVELOPMENT BANK VS. ASSOCIATION OF LUZON DEVELOPMENT BANK, ET


AL.
G.R. NO. 120319
OCTOBER 6, 1995
ROMERO, J.

Facts:
From a submission agreement of the Luzon Development Bank (LDB) and the
Association of Luzon Development Bank Employees (ALDBE) arose an arbitration case to
resolve the following issue: whether or not the company has violated the Collective
Bargaining Agreement provision and the Memorandum of Agreement dated April1994,
on promotion. At a conference, the parties agreed on the submission of their respective
Position Papers on December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as
Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the
other hand, failed to submit its Position Paper despite a letter from the Voluntary
Arbitrator reminding them to do so. As of May 23, 1995 no Position Paper had been
filed by LDB. On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator
rendered a decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the CollectiveBar
gaining Agreement provision nor the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.

Issue:
Which court has the jurisdiction for the appellate review of adjudications of all quasi-
judicial entities

Held:
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court
of Appeals shall exercise:
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders
or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards
or commissions ,including the Securities and Exchange Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling within
the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442,as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The voluntary arbitrator no less performs a state function pursuant to a governmental
power delegated to him under the provisions there for in the Labor Code and he falls,
therefore, within the contemplation of the term "instrumentality" in the afore quoted
Sec. 9 of B.P. 129. The fact that his functions and powers are provided for in the Labor
Code does not place him within the exceptions to said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein A fortiori, the decision or award of the
voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95,
just like those of the quasi-judicial agencies, boards and commissions enumerated
therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No.
1-91 to provide a uniform procedure for the appellate review of adjudications of all
quasi-judicial entities not expressly excepted from the coverage of Sec. 9 of B.P. 129 by
either the Constitution or another statute In the same vein, it is worth mentioning that
under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration
is deemed a special proceeding of which the court specified in the contract , or if none
be specified, the Regional Trial Court for the province or city in which one of the parties
resides or is doing business, or in which the arbitration is held, shall have jurisdiction. A
party to the controversy may, at any time within one (1) month after an award is made,
apply to the court having jurisdiction for an order confirming the award
and the court must grant such order unless the award is vacated, modified or corrected.

In effect, this equates the award or decision of the voluntary arbitrator with that of the
regional trial court. Consequently, in a petition for certiorari from that award or
decision, ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals

SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA) VS. CA


G.R. NO. 85279
JULY 28, 1989
CORTES, J.

Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint
for damages with a prayer for a writ of preliminary injunction against petitioners,
alleging that on June 9, 1987, the officers and members of SSSEA staged an illegal strike
and baricaded the entrances to the SSS Building, preventing non-striking employees
from reporting for work and SSS members from transacting business with the SSS; that
the strike was reported to the Public Sector Labor - Management Council, which
ordered the strikers to return to work; that the strikers refused to return to work; and
that the SSS suffered damages as a result of the strike. The complaint prayed that a writ
of preliminary injunction be issued to enjoin the strike and that the strikers be ordered
to return to work; that the defendants (petitioners herein) be ordered to pay damages;
and that the strike be declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union's
demands, which included: implementation of the provisions of the old SSS-SSSEA
collective bargaining agreement (CBA) on check-off of union dues; payment of accrued
overtime pay, night differential pay and holiday pay; conversion of temporary or
contractual employees with six (6) months or more of service into regular and
permanent employees and their entitlement to the same salaries, allowances and
benefits given to other regular employees of the SSS; and payment of the children's
allowance of P30.00, and after the SSS deducted certain amounts from the salaries of
the employees and allegedly committed acts of discrimination and unfair labor
practices.

Issue:
Whether or not employees of the Social Security System (SSS) have the right to strike.

Held:
The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that
the State "shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law" [Art. XIII, Sec. 31].
Resort to the intent of the framers of the organic law becomes helpful in understanding
the meaning of these provisions. A reading of the proceedings of the Constitutional
Commission that drafted the 1987 Constitution would show that in recognizing the right
of government employees to organize, the commissioners intended to limit the right to
the formation of unions or associations only, without including the right to strike.

Considering that under the 1987 Constitution "the civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government, including government-
owned or controlled corporations with original charters" [Art. IX(B), Sec. .2(l) see also
Sec. 1 of E.O. No. 180 where the employees in the civil service are denominated as
"government employees"] and that the SSS is one such government-controlled
corporation with an original charter, having been created under R.A. No. 1161, its
employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295,
November 24,1988] and are covered by the Civil Service Commission's memorandum
prohibiting strikes. This being the case, the strike staged by the employees of the SSS
was illegal.

ASSOCIATION OF SMALL LANDOWNERS O F THE PHILIPPINES VS. SECRETARY OF DAR


G.R. No. 78742
JULY 14, 1989
CRUZ, J.

Facts:

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to
owners of rice and corn lands not exceeding seven hectares as long as they are
cultivating or intend to cultivate the same. Their respective lands do not exceed the
statutory limit but are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be


ejected or removed from his farmholding until such time as the respective rights of the
tenant- farmers and the landowner shall have been determined in accordance with the
rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree. They therefore ask the
Court for a writ of mandamus to compel the respondent to issue the said rules.

The public respondent argues that P.D. No. 27 has been amended by LOI 474 removing
any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other
purposes from which they derive adequate income for their family. And even assuming
that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27
have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim
Guidelines on Retention by Small Landowners, with an accompanying Retention Guide
Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines
of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory
Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners
to Apply for Retention and/or to Protest the Coverage of their Landholdings under
Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding
applications for retention under these measures, the petitioners are now barred from
invoking this right.

The petitioners insist that the above-cited measures are not applicable to them because
they do not own more than seven hectares of agricultural land.

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it
also adopted one whole and separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions for the uplift of the common
people. These include a call in the following words for the adoption by the State of an
agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the
right of farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. To this end, the State shall encourage and undertake the just
distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or
equity considerations and subject to the payment of just compensation. In determining
retention limits, the State shall respect the right of small landowners. The State shall
further provide incentives for voluntary land-sharing.

Issue:
Whether or not all rights acquired by the tenant-farmer under P.D. No. 27, as
recognized under E.O. No. 228, are retained by him even under R.A. No. 6657.
Held:

P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972
and declared that he shall "be deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by him was to be actually
issued to him unless and until he had become a full-fledged member of a duly
recognized farmers' cooperative." It was understood, however, that full payment of the
just compensation also had to be made first, conformably to the constitutional
requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of
the land they acquired by virtue of Presidential Decree No. 27.

The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. No outright change of
ownership is contemplated either.

This should counter-balance the express provision in Section 6 of the said law that "the
landowners whose lands have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them thereunder, further, that original
homestead grantees or direct compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same areas as long as they continue
to cultivate said homestead."
R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is
one of its most controversial provisions.

Retention Limits. Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which
shall vary according to factors governing a viable family-sized farm, such as commodity
produced, terrain, infrastructure, and soil fertility as determined by the Presidential
Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the
landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of
the landowner, subject to the following qualifications: (1) that he is at least fifteen (15)
years of age; and (2) that he is actually tilling the land or directly managing the farm;
Provided, That landowners whose lands have been covered by Presidential Decree No.
27 shall be allowed to keep the area originally retained by them thereunder, further,
That original homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.

All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and
recognized. Landowners who were unable to exercise their rights of retention under
P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the
conditions therein prescribed. Subject to the above-mentioned rulings all the petitions
are DISMISSED, without pronouncement as to costs.

ACUA VS. ARROYO


G.R. NO. 79310
JULY 14, 1989

Facts:

RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 was
signed into law by then President Corazon Aquino. There were a number of legal
questions challenging the constitutionality of the several measures enacted to
implement the CARL.

In the instant case, the petitioners are landowners and sugar planters in the Victorias
Mill District in Negros Occidental. Co-petitioner Planters Committee is an organization
composed of 1,400 planter-members. This petition seeks to prohibit the
implementation of Proclamation No. 131 and EO No. 229.

The petitioners claim that the power to provide for a CARP as decreed by the
constitution belongs to Congress and not the President. Even assuming that the interim
legislative power of the President was properly exercised, Proc. No. 131 and EO No. 229
would still have to be annulled for violating the constitutional provisions on just
compensation, due process and equal protection.
Section 2 of Proc. No. 131 provides:

Agrarian Reform Fund.- There is hereby created a special fund, to be known as the
Agriarian Reform Fund, an initial amount of FIFTY BILLION PEOS to cover the estimated
cost of the CARP from 1987 -1992 which shall be sourced from the receipts of the sale of
the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth
received through the PCGG and such other sources as government may deem
appropriate. The amounts collected and accruing to this special fund shall be
appropriated automatically for the purpose authorized in this Proclamation. The money
needed to cover the cost of the contemplated expropriated has yet to be raised and
cannot be appropriated at this time.

Petitioners contend that taking must be simultaneous with payment of just


compensation as it is traditionally understood, i.e., with money and in full, but no such
payment is contemplated in Sec. 5 of EO No. 229.

The petitioners also argue that in the issuance of the two measures, no effort was made
to make a careful study of the sugar planters situation. To the extent that the sugar
planters have been lumped in the same legislation with other farmers, although they
are a separate group with problems exclusively their own, their right to equal protection
has been violated.

Issue:

Whether or not Proc. No. 31 and EO No. 229 are valid.

Held:

The Court upheld the presumption of constitutionality in favour of Proc. No. 131 and EO
No. 229. Contrary to the petitioners contention, a pilot project to determine the
feasibility of CARP and a general survey on the peoples opinion thereon are not
indispensable prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to
show that they belong to a different class and should be treated differently.

Regarding the issue of just compensation, it cannot be denied that the issue involved in
the case is a revolutionary kind of expropriation.

The expropriation in the instant case affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the maximum retention
limits allowed their owners. This kind of expropriation is intended for the benefit not
only of a particular community but of the entire Filipino nation.
Such a program will involve not mere million of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed that the
amount of P50 billion initially appropriated, which is already staggering as it is by our
present standards.

We assume that the framers of the Constitution were aware of this difficulty when they
called for agrarian reform as a top priority project of the government. It is a part of this
assumption that when they envisioned the expropriation that would be needed, they
also intended that the just compensation would have to be paid not in the orthodox
way but a less conventional if more practical method. There can be doubt that they
were aware of the financial limitations of the government and had no illusions that
there would be enough money to pay in cash and in full for the lands they wanted to be
distributed among the farmers. we may therefore assume that their intention was to
allow such manner of payment as is now provided for by the CARP Law, particularly the
payment of the balance, or indeed of the entire amount of the just compensation, with
other things of value.

Accepting the theory that payment of the just compensation is not always required to
be made fully in money, we further that the proportion of cash payment to the other
things of value constituting the total payment, as determined on the basis of the areas
of the lands expropriated, is not unduly oppressive upon the landowner.

Hence, the validity of Proc. No. 131 and EO No. 229 is SUSTAINED.

GONZALES VS. CA
G.R. NO. 36213
JUNE 29, 1989

Facts:

The petitioners leased a lot in the subdivision on which they built their house, and, by
tolerance of the subdivision owner, they cultivated some vacant adjoining lots. The
Court of Agrarian Relations, as well as the Court of Appeals, ruled that "the plaintiffs are
not de jure agricultural tenants."

On October 26, 1988, Lucia A. Sison filed a motion to be substituted in lieu of the private
respondents Andres Agcaoile (who died on May 20, 1976) and Leonora Agcaoile (who
died on March 22, 1979) as she inherited, and is now the registered owner of, nine (9)
unsold lots in the subdivision covered.

On February 22, 1989, this Court granted her motion. The facts of this case are not
disputed and are recited in the appealed decision dated December 6, 1972 of the Court
of Appeals.
Issue:

W/N an agricultural tenancy relationship can be created over land embraced in an


approved residential subdivision.

Held:

There is no merit in the petitioners' argument that inasmuch as residential and


commercial lots may be considered "agricultural" (Krivenko vs. Register of Deeds, 79
Phil. 461) an agricultural tenancy can be established on land in a residential subdivision.
The Krivenko decision interpreting the constitutional prohibition against transferring
private agricultural land to individuals, corporations, or associations not qualified to
acquire or hold lands of the public domain, save in the case of hereditary succession
(Art. XIII Sec. 5, 1935 Constitution; later Art. XIV, Sec. 14, 1973 Constitution; Art. XII, Sec.
7, 1987 Constitution) has nothing to do with agricultural tenancy. An agricultural
leasehold cannot be established on land which has ceased to be devoted to cultivation
or farming because of its conversion into a residential subdivision.

Petitioners may not invoke Section 36(l) of Republic Act No. 3844 which provides that
"when the lessor-owner fails to substantially carry out the conversion of his agricultural
land into a subdivision within one year after the dispossession of the lessee, the lessee
shall be entitled to reinstatement and damages," for the petitioners were not
agricultural lessees or tenants of the land before its conversion into a residential
subdivision in 1955. Not having been dispossessed by the conversion of the land into a
residential subdivision, they may not claim a right to reinstatement.

On the other hand, the petitioners' tactic of entering the subdivision as lessee of a
homelot and thereafter cultivating some unsold lots ostensibly for temporary use as a
home garden, but covertly for the purpose of later claiming the land as "tenanted" farm
lots, recalls the fable of the camel that sought shelter inside its master's tent during a
storm, and once inside, kicked its master out of the tent. Here, the private respondents'
tolerance of the petitioners' supposedly temporary use of some vacant lots in the
subdivision was seized by the latter as a weapon to deprive the respondents of their
land.

WHEREFORE, finding no reversible error in the decision of the Court of Appeals, We


deny the petition for review for lack of merit.

PEOPLE VS. PANIS


G.R. NO. L-58674-77
JULY 11, 1990

Facts:
Four informations were filed on January 9, 1981, in the Court of First Instance of
Zambales and Olongapo City alleging that Serapio Abug, private respondent herein,
"without first securing a license from the Ministry of Labor as a holder of authority to
operate a fee-charging employment agency, did then and there wilfully, unlawfully and
criminally operate a private fee-charging employment agency by charging fees and
expenses (from) and promising employment in Saudi Arabia" to four separate
individuals named therein, in violation of Article 16 in relation to Article 39 of the Labor
Code.

Abug filed a motion to quash on the ground that the informations did not charge an
offense because he was accused of illegally recruiting only one person in each of the
four informations. Under the proviso in Article 13(b), he claimed, there would be illegal
recruitment only "whenever two or more persons are in any manner promised or
offered any employment for a fee."

The posture of the petitioner is that the private respondent is being prosecuted under
Article 39 in relation to Article 16 of the Labor Code; hence, Article 13(b) is not
applicable. However, as the first two cited articles penalize acts of recruitment and
placement without proper authority, which is the charge embodied in the informations,
application of the definition of recruitment and placement in Article 13(b) is
unavoidable.

Issue:

Whether or not the petitioner is guilty of violating Article 13(b) of P. D. 442, otherwise
known as the Labor Code.

Held:

Article 13(b) of P. D. 442, otherwise known as the Labor Code, states that, "(b)
'Recruitment and placement' refers to any act of canvassing, 'enlisting, contracting,
transporting, hiring, or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment and
placement."

As we see it, the proviso was intended neither to impose a condition on the basic rule
nor to provide an exception thereto but merely to create a presumption. The
presumption is that the individual or entity is engaged in recruitment and placement
whenever he or it is dealing with two or more persons to whom, in consideration of a
V
i
fee, an offer or promise of employment is made in the course of the "canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring (of) workers."

At any rate, the interpretation here adopted should give more force to the campaign
against illegal recruitment and placement, which has victimized many Filipino workers

r seeking a better life in a foreign land, and investing hard-earned savings or even
borrowed funds in pursuit of their dream, only to be awakened to the reality of a cynical
deception at the hands of their own countrymen.

J
Acknowledgement: Peter De Guzman

MILLARES AND LAGDA VS. NLRC

e
G.R. NO. 110524
JULY 29, 2002
KAPUNAN, J.

FACTS:

n Douglas Millares was employed by ESSO International Shipping Company through its
local manning agency,Trans-Global MaritimeAgency, as a machinist he was promoted as
Chief Engineer which position Millares applied for a leave of absence for almost 1month.
The Trans-Global, approved the request for leave of absence. Millares wrote to the
Operations Manager of Exxon InternationalCo.informing him of his intention to avail of
the optional retirement plan under the Consecutive Enlistment Incentive Plan
(CEIP)considering that he had already rendered more than twenty (20) years of
continuous service. Esso International, denied the requestfor optional retirement on the

S
following grounds, to wit: (1) he was employed on a contractual basis; (2) his contract of
enlistment(COE) did not provide for retirement before the age of sixty (60) years; and
(3) he did not comply with the requirement for claimingbenefits under the CEIP, i.e., to
submit a written advice to the company of his intention to terminate his employment
within thirty (30)days from his last disembarkation date Millares requested for an

h extension of his leave of absence for another 15days. TheCrewing Manager, Ship Group
A, Trans-Global, wrote petitioner Millares advising him that respondent Esso
International "hascorrected the deficiency in its manpower requirements specifically in
the Chief Engineer rank by promoting a First AssistantEngineer to this position as a

i
result of (his) previous leave of absence which expired last August 8, 1989. The
adjustment in saidrank was required in order to meet manpower schedules as a result
of (his) inability.Esso International advised Millares that hisabsence without leave, which
is equivalent to abandonment of his position,On the other hand Lagda was employed by

p
Esso International as wiper/oiler He was promoted as Chief Engineer in 1980, a
positionhe continued to occupy until his last COE expired on April 10, 1989.Lagda
applied for a leave of absence from June 19,1989 up tothe whole month of August 1989.
Then the Trans-Globals approved petitioner Lagdas leave of absence from June 22,
1989 to July20, 1989[7] and advised him to report for re-assignment on July 21, 1989.

p
Lagda wrote a letter to Operations Manager of EssoInternational, through Trans-
Globals President informing him of his intention to avail of the optional early
retirement plan in view of his twenty (20) years continuous service in the company
Trans-Global denied petitioner Lagdas request for availment of theoptional early
retirement scheme on the same grounds upon which petitioner Millares request was
denied.he requested for anextension of his leave of absence up to August 26, 1989 and
the same was approved. However Esso International throughPersonnel
Administrator,adise petitioner Lagda that in view of his "unavailability
for contractual sea service," he had beendropped from the roster of crew members
effective September 1, 1989.Millares and Lagda filed a complaint-affidavit,
for illegal dismissal and non-payment of employee benefits
against privaterespondents Esso International and Trans-Global, before the
POEA. POEA: dismissing the complaint for lack of merit. NLRCdismissing petitioners
appeal and denying their motion for new trial for lack of merit.

ISSUE: WHETHER OR NOT THEY ARE REGULAR EMPLOYEES.

RULING:SC: Art. 280. Regular and casual employment. - The provisions of written
agreement to the contrary notwithstanding and regardlessof the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has been
engaged toperform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where theemployment has been fixed for a
specific project or undertaking the completion or termination of which has been
determined at thetime of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment isfor the duration of
the season.An employment shall be deemed to be casual if it is not covered by the
preceding paragraph. Provided, That, any employee whohas rendered at least one year
of service, whether such service is continuous or broken, shall be considered a regular
employeewith respect to the activity in which he is employed and his employment shall
continue while such activity exists. The primarystandard to determine
a regular employment is the reasonable connection between the particular
activity performed by theemployee in relation to the usual business or trade of the
employer. The test is whether the former is usually necessary or desirablein the usual
business or trade of the employer The connection can be determined by considering the
nature of the work performed and its relation to the scheme of the particular business
or trade in its entirety. Also, if the employee has been performing the job for at least
one year, even if the performance isnot continuous or merely intermittent, the law
deems the repeated and continuing need for its performance as sufficient evidence
of the necessity if not indispensability of that activity to the business. Hence,
the employment is also considered regular, but only withrespect to such activity and
while such activity exists.[it is undisputed that petitioners were employees of private
respondents until their services were terminated on September 1, 1989.They served
in their capacity as Chief Engineers, performing activities which were necessary
and desirable in the business of private respondents Esso International,
a shipping company; and Trans-Global, its local manning agency which supplies
themanpower and crew requirements of Esso Internationals vessels.It is, likewise, clear
that petitioners had been in the employ of private respondents for 20 years. The records
reveal that petitioners were repeatedly re-hired by private respondents even after
theexpiration of their respective eight-month contracts. Such repeated re-
hiring which continued for 20 years, cannot but beappreciated as sufficient evidence of
the necessity and indispensability of petitioners service to the private respondents
business or trade. Verily, as petitioners are by express provision of Article 280 of
the Labor Code, considered regular employees.there was no valid cause for the
termination of petitioners. It will be recalled, that petitioner Millares was dismissed for
allegedlyhaving "abandoned" his post; and petitioner Lagda, for his
alleged "unavailability for contractual sea service." However, thatpetitioners did not
abandon their jobs such as to justify the unlawful termination of their employment is
borne out by the records.Toconstitute abandonment, two elements must concur: (1) the
failure to report for work or absence without valid or justifiable reason;and (2) a clear
intention to sever the employer-employee relationship.Furthermore, the absence of
petitioners was justified by thefact that they secured the approval of respondents to
take a leave of absence after the termination of their last contracts of enlistment.
Clearly, petitioners termination is illegal.

DITAN VS. POEA ADMINISTRATOR


G.R. NO. 79560
DECEMBER 3, 1990

Facts:

Andres E. Ditan was recruited by private respondent Intraco Sales Corporation, through
its local agent, Asia World, the other private respondent, to work in Angola as a welding
supervisor. The contract was for nine months, at a monthly salary of US$1,100.00 or
US$275.00 weekly, and contained the required standard stipulations for the protection
of our overseas workers.

Arriving on November 30, 1984, in Luanda, capital of Angola, the petitioner was
assigned as an ordinary welder in the INTRACO central maintenance shop from
December 2 to 25, 1984. On December 26, 1984, he was informed, to his distress that
would be transferred to Kafunfo, some 350 kilometers east of Luanda. This was the
place where, earlier that year, the rebels had attacked and kidnapped expatriate
workers, killing two Filipinos in the raid. Naturally, Ditan was reluctant to go. However,
he was assured by the INTRACO manager that Kafunfo was safe and adequately
protected by government troops; moreover and this was more persuasive he was
told he would be sent home if he refused the new assignment. In the end, with much
misgiving, he relented and agreed.
On December 29, 1984, his fears were confirmed. The Unita rebels attacked the
diamond mining site where Ditan was working and took him and sixteen other Filipino
hostages, along with other foreign workers. The rebels and their captives walked
through jungle terrain for 31 days to the Unita stronghold near the Namibian border.

They trekked for almost a thousand kilometers. They subsisted on meager fare. Some of
them had diarrhea. Their feet were blistered. It was only on March 16, 1985, that the
hostages were finally released after the intercession of their governments and the
International Red Cross. Six days later, Ditan and the other Filipino hostages were back
in the Philippines.

The repatriated workers had been assured by INTRACO that they would be given priority
in re-employment abroad, and eventually eleven of them were taken back. Ditan having
been excluded, he filed in June 1985 a complaint against the private respondents for
breach of contract and various other claims. Specifically, he sought the amount of
US$4,675.00, representing his salaries for the unexpired 17 weeks of his contract;
US$25,000.00 as war risk bonus; US$2,196.50 as the value of his lost belongings;
US$1,100 for unpaid vacation leave; and moral and exemplary damages in the sum of
US$50,000.00, plus attorney's fees.

All these claims were dismissed by POEA Administrator Tomas D. Achacoso in a decision
dated January 27, 1987. 2 This was affirmed in toto by respondent NLRC in a resolution
dated July 14, 1987, 3 which is now being challenged in this petition.

Issue:

Whether or not Ditan is entitled to any relief and his case is under the jurisdiction of
NLRC?

Held:

Yes. The fact that stands out most prominently in the record is the risk to which the
petitioner was subjected when he was assigned, after his reluctant consent, to the
rebel-infested region of Kafunfo. This was a dangerous area.

The petitioner had gone to that foreign land in search of a better life that he could share
with his loved ones after his stint abroad. That choice would have required him to come
home empty-handed to the disappointment of an expectant family.

It is not explained why the petitioner was not paid for the unexpired portion of his
contract which had 17 more weeks to go. The hostages were immediately repatriated
after their release, presumably so they could recover from their ordeal. The promise of
INTRACO was that they would be given priority in re-employment should their services
be needed. In the particular case of the petitioner, the promise was not fulfilled. It
would seem that his work was terminated, and not again required, because it was really
intended all along to assign him only to Kafunfo.

The private respondents stress that the contract Ditan entered into called for his
employment in Angola, without indication of any particular place of assignment in the
country. This meant he agreed to be assigned to work anywhere in that country,
including Kafunfo. When INTRACO assigned Ditan to that place in the regular course of
its business, it was merely exercising its rights under the employment contract that
Ditan had freely entered into. Hence, it is argued, he cannot now complain that there
was a breach of that contract for which he is entitled to monetary redress.

The private respondents also reject the claim for war risk bonus and point out that POEA
Memorandum Circular No. 4, issued pursuant to the mandatory war risk coverage
provision in Section 2, Rule VI, of the POEA Rules and Regulations on Overseas
Employment, categorizing Angola as a war risk took effect only on February 6,
1985"after the petitioner's deployment to Angola on November 27, 1984."
Consequently, the stipulation could not be applied to the petitioner as it was not
supposed to have a retroactive effect.

The paramount duty of this Court is to render justice through law. The law in this case
allows two opposite interpretations, one strictly in favor of the employers and the other
liberally in favor of the worker. The choice is obvious. We find, considering the totality
of the circumstances attending this case, that the petitioner is entitled to relief. The
petitioner went to Angola prepared to work as he had promised in accordance with the
employment contract he had entered into in good faith with the private respondents.
Over his objection, he was sent to a dangerous assignment and as he feared was taken
hostage in a rebel attack that prevented him from fulfilling his contract while in
captivity. Upon his release, he was immediately sent home and was not paid the salary
corresponding to the unexpired portion of his contract. He was immediately repatriated
with the promise that he would be given priority in re-employment, which never came.
To rub salt on the wound, many of his co-hostages were re-employed as promised. The
petitioner was left only with a bleak experience and nothing to show for it except
dashed hopes and a sense of rejection.

Under the policy of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that those with less privileges
in life should have more privileges in law.

WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED. The private
respondents are hereby DIRECTED jointly and severally to pay the petitioner: a) the
current equivalent in Philippine pesos of US$4,675.00, representing his unpaid salaries
for the balance of the contract term; b) nominal damages in the amount of P20,000.00;
and c) 10% attorney's fees. No costs.
SO ORDERED.

VINTA MARITIME COMPANY V NLRC


G.R. NO. 113911
JANUARY 23, 1998

Facts:

Leonides Basconsillo, private respondent, filed a complaint with the Philippine Overseas
Employment Administration IPOEA) for illegal dismissal against Vinta Maritime Co. Inc.
and Elkano Ship Management, Inc. petitioners alleged that Leonides was dismissed for
his gross negligence and incompetent performance as chief engineer of the M/V
Boracay.

The POEA ruled that private respondent was illegally dismissed. On appeal, the NLRC
affirmed the POEA. Likewise, the NLRC denied the motion for reconsideration. Hence,
this petition.

Issue:

Whether or not private respondent is illegally dismissed.

Held:

The absence of a valid cause for termination in this case is apparent. For an employees
dismissal to be valid, (1) the dismissal must be for a valid cause and (2) the employee
must be afforded due process. Petitioners allege that private respondent was dismissed
because of his incompetence, enumerating incidents in proof thereof. However, this is
contradicted by private respondents seamans book which states that his discharge was
due to an emergency leave. Moreover, his alleged incompetence is belied by the
remarks made by petitioners in the same book that private respondents services were
highly recommended and that his conduct and ability were rated very good .
Petitioners allegation that such remark and ratings were given to private respondent as
an accommodation for future employment fails to persuade. The Court cannot consent
to such an accommodation, even if the allegation were true, as it is a blatant
misrepresentation. It cannot exculpate petitioners based on such misrepresentation.
When petitioners issued the accommodation, they must have known its possible
repercussions.

Due process, the second element for a valid dismissal, requires notice and hearing.
Before the employee can be dismissed under Art. 282, the Code requires the service of a
written notice containing a statement of the cause/s of termination and giving said
employee ample opportunity to be heard and to defend himself. A notice of termination
in writing is further required if the employees dismissal is decided upon. The employer
must furnish the worker with two written notices before termination of employment
can be legally effected: (1) notice which apprises the employee of the particular acts or
omissions for which his dismissal is sought and (2) subsequent notice which informs the
employee of the employers decision to dismiss. The twin requirements of notice and
hearing constitute the essential elements of due process, and neither of these elements
can be eliminated without running afoul of the constitutional guaranty.

Illegally dismissed workers are entitled to the payment of their salaries corresponding to
the unexpired portion of their employment where the employment is for a definite
period. Conformably, the administrator and the NLRC properly awarded private
respondent salaries for the period of the effectivity of his contract.

WHEREFORE, the petition is hereby dismissed. The challenged decision and resolution
are affirmed.

MARSAMAN MANNING AGENCY VS. NLRC


G.R. NO. 127195
AUGUST 25, 1999
R.A. 8042 (Migrant Workers Act)

Facts:

Private respondent Wilfredo T. Cajeras was hired by petitioner MARSAMAN, the local
manning agent of petitioner DIAMANTIDES, as Chief Cook Steward on the MV Prigipos,
owned and operated by DIAMANTIDES, for a contract period of ten (10) months. Cajeras
started work on 8 August 1995, but less than two (2) months later, he was repatriated to
the Philippines allegedly by "mutual consent."

Private respondent Cajeras filed a complaint for illegal dismissal against petitioners with
the NLRC alleging that he was dismissed illegally, denying that his repatriation was by
mutual consent, and asking for his unpaid wages, overtime pay, damages, and
attorney's fees.

On 29 January 1996 Labor Arbiter resolved the dispute in favor of private respondent
Cajeras ruling that the latter's discharge from the MV Prigipos allegedly by "mutual
consent" was not proved by convincing evidence.

Petitioners appealed to the NLRC. On 16 September 1996 the NLRC affirmed the
appealed findings and conclusions of the Labor Arbiter. Petitioners' motion for
reconsideration was denied by the NLRC in its Resolution dated 12 November 1996.

Hence, the petition contending that, among other things, the NLRC committed grave
abuse of discretion in ordering a monetary award beyond the maximum of three (3)
months' salary for every year of service set by RA 8042.

Issue:

Whether or not the NLRC committed grave abuse of discretion

Ruling:

On the amount of salaries due private respondent, the rule has always been that an
illegally dismissed worker whose employment is for a fixed period is entitled to payment
of his salaries corresponding to the unexpired portion of his employment. On 15 July
1995, RA 8042 otherwise known as the "Migrant Workers and Overseas Filipinos Act of
1995" took effect, Sec. 10 of which provides:

Sec. 10. In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest at twelve percent (12%) per annum,
plus his salaries for the unexpired portion of the employment contract or for three (3)
months for every year of the unexpired term whichever is less.

A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an
illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired
portion of his employment contract or three (3) months' salary for every year of the
unexpired term, whichever is less, comes into play only when the employment contract
concerned has a term of at least one (1) year or more.

To follow petitioners' thinking that private respondent is entitled to three (3) months
salary only simply because it is the lesser amount is to completely disregard and
overlook some words used in the statute while giving effect to some. This is contrary to
the well-established rule in legal hermeneutics that in interpreting a statute, care should
be taken that every part or word thereof be given effect since the law-making body is
presumed to know the meaning of the words employed in the statue and to have used
them advisedly.

The questioned Decision and Resolution of public respondent National Labor Relations
Commission are AFFIRMED.

ASIAN CENTER FOR CAREER AND EMPLOYMENT SYSTEM AND SERVICES, INC.
(ACCESS),VS. NATIONAL LABOR RELATIONS COMMISSION AND IBNO MEDIALES
G.R. NO. 131656
OCTOBER 12, 1998

Facts:
petitioner hired respondent IBNO MEDIALES to work as a mason in Jeddah, Saudi Arabia
with a monthly salary of 1,200 Saudi Riyals (SR). The term of his contract was two (2)
years, from February 28, 1995 until February 28, 1997. On May 26, 1996, respondent
applied with petitioner for vacation leave with pay and was granted. While en route to
the Philippines, his co-workers informed him that he has been dismissed. respondent
filed a complaint with the labor arbiter for illegal dismissal. And found guilty and to pay
the unexpired portion of the respondent s contract which is 1,200 multiplied by 8
months representing the unexpired portion. Petitioner appealed to the NLRC but the
latter affirmed the decision of labor arbiter but modified the appealed decision by
deleting the order of refund of excessive placement fee for lack of jurisdiction.
Petitioner moved for reconsideration with respect to the labor arbiters award by
invoking Section 10 RA 8042 that a worker dismissed from overseas employment
without just, valid or authorized cause is entitled to his salary for the unexpired portion
of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less that is why it should be three years should be used for the
unexpired portion. NLRC denied the motion. Hence, this petition for certiorari.

Issue:

Whether or not the monetary awards granted by the NLRC to private respondent is
correct?

Held:

The SC affirmed the decisions of NLRC with modifications regarding the basis of amount
that the petitioner will pay to the respondent for the unexpired portion of employment
contract. In the case at bar, petitioners illegal dismissal from service is no longer
disputed. Petitioner merely impugns the monetary awards granted by the NLRC to
private respondent. The effectivity of Section 10 RA 8042 took effect a year earlier from
his vacation leave. Hence, it applies to the case. The respondent should be paid by
petitioner the 3 months unexpired portion of the contract.

ATHENNA INTERNATIONAL MANPOWER SERVICES, INC. vs. VILLANOS


G.R. No. 151303.
April 15, 2005
QUISUMBING,J:

Facts:

The petitioner is a domestic corporation engaged in recruitment and placement of


workers for overseas employment. Respondent applied to work overseas as caretaker
thru petitioner. The petitioner asked for a placement fee amounting to P100,000 but the
respondent begged to reduced the fee and it was reduced to P94,000 with the
petitioner paying only P30,000 and the remaining will be paid through salary
deductions. Upon arrival on Taiwan, he was assigned to a mechanical shop, owned by
Hsien, as a hydraulic installer/repairer for car lifters, instead of the job for which he was
hired. He did not, however, complain because he needed money to pay for the debts he
incurred back home. Barely a month after his placement, he was terminated by Hsien
and received his salary and instructed for departure to the Philippines. Upon arrival, the
respondent went to petitioners office and demanded for the reimbursement of P30,000
but instead the petitioner gave him a summary of expenses relating his deployment. The
respondent filed a complaint before Adjudication Office of the POEA. However, because
of financial constraints, he had to go home to Polanco, Zamboanga del Norte and filed a
complaint against petitioner for illegal dismissal, violation of contract, and recovery of
unpaid salaries and other benefits before the NLRC Sub-Regional Arbitration Branch No.
9, Dipolog City. In its defense, petitioner alleged that under the employment contract,
respondent was to undergo a probationary period of forty (40) days. However, at the
job site, respondent was found to be unfit for his work, thus he resigned from his
employment and requested for his repatriation signing a statement to that effect. The
Labor Arbiter rendered a Decision holding petitioner and Wei Yu Hsien solidarily liable
for the wages representing the unserved portion of the employment contract, the
amount unlawfully deducted from respondents monthly wage, moral damages,
exemplary damages and attorneys fees. On appeal, the NLRC reversed the Labor Arbiter
and dismissed the complaint for lack of merit. It found that respondent was not at all
dismissed, much less illegally. Respondent seasonably filed a motion for
reconsideration, which the NLRC denied in its second resolution. respondent appealed
to the Court of Appeals and granted the petition and reversing the questioned
resolutions of the NLRC.

Issue:

1. Did the respondent voluntarily resign or was he illegally dismissed?

2. Assuming that the respondent was illegally dismissed, was it proper for the Court of
Appeals to affirm in toto the monetary awards in the Decision of the Labor Arbiter?

Held:

The SC denied the petition and affirmed with modification the resolution by the Court of
Appeals. On the first issue, An employee voluntarily resigns when he finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of the
exigency of the service; thus, he has no other choice but to disassociate himself from his
employment. In this case respondent avers that petitioner did not explain why he was
unqualified nor inform of any qualifications needed for the job prior to his deployment
as mandated by Art 281[9] of the Labor Code and failed to prove the legality of the
dismissal, despite the fact that the burden of proof lies on the employment and
recruitment agency. On the second issue, the SC declared the petitioner solidarily liable
with Wei Yu Hsien to pay the unexpired portion based on Sec 10 RA 8042. Lastly,
because of the breach of contract and bad faith alleged against the employer and the
petitioner, we must sustain the award of P50,000 in moral damages and P50,000 as
exemplary damages, in addition to attorneys fees of ten percent (10%) of the aggregate
monetary awards.

EASTERN SHIPPING LINES V POEA


G.R. NO. 76633
OCTOBER 18, 1988

FACTS:
A Chief Officer of a ship was killed in an accident in Japan. The widow filed a complaint
for charges against the Eastern Shipping Lines with POEA, based on a Memorandum
Circular No. 2, issued by the POEA which stipulated death benefits and burial for the
family of overseas workers. ESL questioned the validity of the memorandum circular as
violative of the principle of non-delegation of legislative power. It contends that no
authority had been given the POEA to promulgate the said regulation; and even with
such authorization, the regulation represents an exercise of legislative discretion which,
under the principle, is not subject to delegation. Nevertheless, POEA assumed
jurisdiction and decided the case.

ISSUE:
Whether or not the Issuance of Memorandum Circular No. 2 is a violation of non-
delegation of powers.

RULING:
No. SC held that there was a valid delegation of powers.
The authority to issue the said regulation is clearly provided in Section 4(a) of Executive
Order No. 797. ... "The governing Board of the Administration (POEA), as hereunder
provided shall promulgate the necessary rules and regulations to govern the exercise of
the adjudicatory functions of the Administration (POEA)."

It is true that legislative discretion as to the substantive contents of the law cannot be
delegated. What can be delegated is the discretion to determine how the law may be
enforced, not what the law shall be. The ascertainment of the latter subject is a
prerogative of the legislature. This prerogative cannot be abdicated or surrendered by
the legislature to the delegate.

The reasons given above for the delegation of legislative powers in general are
particularly applicable to administrative bodies. With the proliferation of specialized
activities and their attendant peculiar problems, the national legislature has found it
more and more necessary to entrust to administrative agencies the authority to issue
rules to carry out the general provisions of the statute. This is called the "power of
subordinate legislation."

With this power, administrative bodies may implement the broad policies laid down in a
statute by "filling in' the details which the Congress may not have the opportunity or
competence to provide. This is effected by their promulgation of what are known as
supplementary regulations, such as the implementing rules issued by the Department of
Labor on the new Labor Code. These regulations have the force and effect of law.

There are two accepted tests to determine whether or not there is a valid delegation of
legislative power:
1. Completeness test - the law must be complete in all its terms and conditions when it
leaves the legislature such that when it reaches the delegate the only thing he will have
to do is enforce it.
2. Sufficient standard test - there must be adequate guidelines or stations in the law to
map out the boundaries of the delegate's authority and prevent the delegation from
running riot.

Both tests are intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and exercise a
power essentially legislative.

NORSE MANAGEMENT CO. VS. NATIONAL SEAMEN BOARD


G.R. NO. L-54204
SEPTEMBER 30, 1982
RELOVA, J.

Facts:

Napoleon B. Abordo, the deceased husband of private respondent Restituta C. Abordo,


was the Second Engineer of M.T. "Cherry Earl" when he died from an apoplectic stroke
in the course of his employment with petitioner NORSE MANAGEMENT COMPANY
(PTE). The M.T. "Cherry Earl" is a vessel of Singaporean Registry. In her complaint for
compensation benefits filed before the National Seamen Board, private respondent
alleged that the amount of compensation due her from petitioners should be based on
the law where the vessel is registered. Petitioners contend that the law of Singapore
should not be applied in this case because the National Seamen Board cannot take
judicial notice of the Workmen's Insurance Law of Singapore instead must be based on
Boards Memeorandum Circular No. 25. Ministry of Labor and Employment ordered the
petitioner to pay jointly and severally the private respondent. Petitioner appealed to the
Ministry of Labor but same decision. Hence, this petition.
Issue:

Whether or not the law of Singapore ought to be applied in this case.

Held:

The SC denied the petition. It has always been the policy of this Board, as enunciated in
a long line of cases, that in cases of valid claims for benefits on account of injury or
death while in the course of employment, the law of the country in which the vessel is
registered shall be considered. In Section 5(B) of the Employment Agreement between
petitioner and respondents husband states that In the event of illness or injury to
Employee arising out of and in the course of his employment and not due to his own
willful misconduct, EMPLOYER will provide employee with free medical attention. If such
illness or injury incapacitates the EMPLOYEE to the extent the EMPLOYEE's services
must be terminated as determined by a qualified physician designated by the
EMPLOYER and provided such illness or injury was not due in part or whole to his willful
act, neglect or misconduct compensation shall be paid to employee in accordance with
and subject to the limitations of the Workmen's Compensation Act of the Republic of
the Philippines or the Workmen's Insurance Law of registry of the vessel whichever is
greater. Finally, Article IV of the Labor Code provides that "all doubts in the
implementation and interpretation of the provisions of this code, including its
implementing rules and resolved in favor of labor.

NFD INTERNATIONAL MANNING AGENTS VS. NLRC


G.R. NO. 116629
JANUARY 16, 1998
PUNO, J.

Facts:

The private respondents (wives of the two deceased husbands) filed for death
compensation benefits under the POEA Standard Contract of employment before the
petitioners but were denied on the ground that the seamans deaths were due to their
own wilful act who implanted fragments of reindeer horn in their respective sexual
organs that due to the lack of sanitary conditions at the time and place of implantation,
all three seamen suffered "severe tetanus" and "massive viral infections;" that Misada
and Envidiado died within days of the other; that the third seaman, Arturo Fajardo,
narrowly missed death only because the vessel was at port in Penang, Malaysia at the
time the tetanus became critical. Private respondents filed separate complaints before
the POEA Adjudication Office. POEA Administrator dismissed the case for lack of merit.
Private respondents appealed to respondent Commission. During the pendency of the
appeal, private respondents submitted additional documentary evidence in support of
their Memorandum on Appeal. Respondent Commission reversed the POEA
Administrator and ordered petitioners to pay private respondents. Hence this petition.

Issue:

Whether respondent Commission gravely erred in finding that the deaths of the two
seamen did not come as a result of their wilful and deliberate act.

Held:

The SC dismissed the petition and affirmed the decision of NLRC. According to Part II,
Section C, no. 6 of POEA Standard Employment Contract Governing the Employment of
All Filipino Seamen on Board Ocean-Going Vessels No compensation shall be payable in
respect of any injury, incapacity, disability or death resulting from a willful act on his
own life by the seaman, provided, however, that the employer can prove that such
injury, incapacity, disability or death is directly attributable to him. In this case, the
testimonies of the officers are insufficient to prove the fact that death of two seamen
were caused by self-inflicted injuries and in fact Fajardo, one who did the same, did not
submit any testimony regarding the implantation. No autopsy report was presented to
corroborate their testimonies. Based on medical reports cause of death of Misada was
due to viral infection, while Envidiado was due to viral myocarditis. Hence, petitioners
evidence insufficiently proves the fact that the deaths of the two seamen were caused
by their own wilful and deliberate act.

VIRJEN SHIPPING AND MARINE SERVICES VS. NLRC


125 SCRA 577
NOVEMBER 18, 1983
GUTIERREZ, JR., J.

Facts:
Certain seamen entered into a contract of employment for a 12-month period. Some
three months after thecommencement of their employment, the seamen demanded a
50% increase of their salaries and benefits. Theseamen demanded this increase while
their vessel was on route to a port in Australia controlled by the InternationalTransport
Federation (ITP) where the ITF could detain the vessels unless it paid its season ITF
rates.The agent of the owner of the vessel agreed to a 25% increase, but when the
vessel arrived in Japan shortly afterwards, the seamen were repatriated to Manila and
their contract terminated.Two motions for reconsideration filed with Second Division
were denied by said Division. Another motion forreconsideration was filed with the
Supreme Court en banc which gave its due course, after finding that there was aneed to
reconcile the decision of the Second Division with that of the First Division with the
Wallen Decision. In thatdecision, the First Division had ruled that the termination of
the seamen was illegal.
Issue:
Whether or not the termination of the seamen was illegal.

Held:
The termination of the contract of the seamen was illegal. A manning contract involves
the interests not only of the signatories thereto, such as the local Filipino recruiting
agent, the foreign owner of vessel and the Filipinoseamen in general as well as the
country itself. Conformably to the power vested in the NSB, the law requires that
allmanning contracts shall be approved by said agency. The stringent rules governing
Filipino seamen abroad foreignships are dictated by national interest.

SUZARA VS. BENIPAYO


G.R. NO. 57999
SUZARA VS. NLRC
AUGUST 15, 1989
GUTIERREZ, J.

Facts:

A group of Filipino seamen entered into separate contracts of employment with


Magsaysay lines at specified salary rates. When vessel reached Manila Magsaysay Lines
demanded from Seamen over payment made to them in Canada the seamen demanded
and received additional wages prescribed by the International Transport workers
Federation (ITF) in amounts over and above the rates appearing in their contract
approved earlier by the National Seamen Board . When the vessel docked at Nagoya , an
NSB representative boarded the vessel He called a meeting among seamen, an urged
them to sign an agreement, which they did. It turned out that in the agreement the
following statement was inserted the amounts were received and held by crew
members in trust for ship owners when reached Manila Magsaysay Lines demanded
from seamen the overpayments made to them in Canada. When they refused, it filed
charges against them before the NSB.NSB declared the seamen guilty of breach of their
employment contracts suspended these men for three years, prompting the workers to
bring the case up to the Supreme Court

Issue:
Whether the Seaman demanded and received additional wages prescribes International
Transport Workers Federation.

Held:
The Supreme Court reversed and set aside the decision of NSB-National seamen Board
and the NLRC, it held that Seamen were not guilty of the offense for which they were
charged and order Magsaysay Lines to pay the seamen their earned but unpaid wages
overtime pay Special Agreement that the parties entered into Vancouver. The criminal
cases were ordered dismissed. The Court reiterate the Vir-jen pronouncements.
Decision: The Supreme Court By Justice Guitterez

CHAVEZ VS. BONTO-PEREZ, RAYALA, ET AL.


G.R. NO. 109808
MARCH 1, 1995
PUNO, J.

Facts:
Chavez is a dancer who was contracted by Centrum Placement & Promotions
Corporation to perform in Japan for 6 months. The contract was for $1.5k a month,
which was approved by POEA. After the approval of said contract, Chavez entered into a
side contract reducing her salary with her Japanese employer through her local
manager-agency (Jaz Talents Promotion). The salary was reduced to $500 and $750 was
to go to Jaz Talents. In February 1991 (two years after the expiration of her contract),
Chavez sued Centrum Placement and Jaz Talents for underpayment of wages before the
POEA.
The POEA ruled against her. POEA stated that the side agreement entered into by
Chavez with her Japanese employer superseded the Standard Employment Contract;
that POEA had no knowledge of such side agreement being entered into; that Chavez is
barred by laches for sleeping on her right for two years.

ISSUE: Whether or not Chavez is entitled to relief.

HELD: Yes. The SC ruled that the managerial commission agreement executed by Chavez
to authorize her Japanese Employer to deduct her salary is void because it is against our
existing laws, morals and public policy. It cannot supersede the standard employment
contract approved by the POEA with the following stipulation appended thereto:

It is understood that the terms and conditions stated in this Employment Contract are in
conformance with the Standard Employment Contract for Entertainers prescribed by the
POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or changes
made in any part of this contract without prior approval by the POEA shall be null and
void;

The side agreement which reduced Chavezs basic wage is null and void for violating the
POEAs minimum employment standards, and for not having been approved by the
POEA. Here, both Centrum Placement and Jaz Talents are solidarily liable.
Laches does not apply in the case at bar. In this case, Chavez filed her claim well within
the three-year prescriptive period for the filing of money claims set forth in Article 291
of the Labor Code. For this reason, laches is not applicable.

FINMAN GENERAL ASSURANCE CORP. vs. INOCENCIO


G.R. No. 90273-75
November 15, 1989
Feliciano, J.

Facts:
Pan Pacific Overseas is a recruitment agency which offers jobs abroad duly registered
with the POEA. Finman General is acting as Pan Pacifics surety (as required by POEA
rules and Art. 31 of the Labor Code). Pan Pacific was sued by William Inocencio and 3
others for alleged violation of Article 32 and 34 of the Labor Code. Inocencio alleged
that Pan Pacific charged and collected fees but failed to provide employment abroad.
POEA ruled in favor of Inocencio et al and had impleaded Finman (upon request of
Inocencio) in the complaint as well (Pan Pacific changed business address without prior
notice to POEA). The Labor Secretary affirmed POEAs ruling. Finman General asserts
that it should not be impleaded in the case because it is not a party to the contract
between Pan Pacific and Inocencio et al.

ISSUE:
Whether or not Finman General is solidarily liable in the case at bar.

HELD:
Yes. Since Pan Pacific had thoughtfully refrained from notifying the POEA of its new
address and from responding to the complaints, petitioner Finman may well be
regarded as an indispensable party to the proceedings before the POEA. Whether
Finman was an indispensable or merely a proper party to the proceedings, the SC held
that the POEA could properly implead it as party respondent either upon the request of
Inocencio et al or motu propio. Such is the situation under the Revised Rules of Court.
Finman General is solidarily liable. Under Section 176 of the Insurance Code, as
amended, the liability of a surety in a surety bond (Finman) is joint and several with the
principal obligor (Pan Pacific).

Further, Article 31 of the Labor Code provides:


Art. 31. Bonds. All applicants for license or authority shall post such cash and surety
bonds as determined by the Secretary of Labor to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and, conditions of
employment as appropriate.
xxx
The Secretary of Labor shall have the exclusive power to determine, decide, order or
direct payment from, or application of, the cash and surety bond for any claim or
injury covered and guaranteed by the bonds.

EASTERN ASSURANCE & SURETY CORPORATION VS. SECRETARY OF LABOR


G.R. NO. L-79436-50
JANUARY 17, 1990
NARVASA, J.

Facts:
J&B Manpower is an overseas employment agency registered with the POEA and
Eastern Assurance was its surety beginning January 1985. From 1983 to December 1985,
J&B recruited 33 persons but none of them were ever deployed. These 33 persons sued
J&B and the POEA as well as the Secretary of Labor ruled in favor of the 33 workers and
ordered J&B to refund them (with Eastern Assurance being solidarily liable). Eastern
Assurance assailed the ruling claiming that POEA and the Secretary of Labor have no
jurisdiction over non-employees (since the 33 were never employed, in short, no
employer-employee relations).

ISSUE: Whether or not Eastern Assurance can be held liable in the case at bar.

HELD: Yes. But only for the period covering from January 1985 when the surety took
effect (as already held by the Labor Secretary). The Secretary of Labor was given power
by Article 34 (Labor Code) and Section 35 and 36 of EO 797 (POEA Rules) to restrict and
regulate the recruitment and placement activities of all agencies, but also to
promulgate rules and regulations to carry out the objectives and implement the
provisions governing said activities.

Implicit in these powers is the award of appropriate relief to the victims of the offenses
committed by the respondent agency or contractor, specially the refund or
reimbursement of such fees as may have been fraudulently or otherwise illegally
collected, or such money, goods or services imposed and accepted in excess of what is
licitly prescribed. It would be illogical and absurd to limit the sanction on an offending
recruitment agency or contractor to suspension or cancellation of its license, without
the concomitant obligation to repair the injury caused to its victims.

Though some of the cases were filed after the expiration of the surety bond agreement
between J&B and Eastern Assurance, notice was given to J&B of such anomalies even
before said expiration. In this connection, it may be stressed that the surety bond
provides that notice to the principal is notice to the surety. Besides, it has been held
that the contract of a compensated surety like respondent Eastern Assurance is to be
interpreted liberally in the interest of the promises and beneficiaries rather than strictly
in favor of the surety.
SALAZAR VS. ACHACOSO
G.R. NO. 81510
MARCH 14, 1990
SARMIENTO, J.

Facts:
Rosalie Tesoro of Pasay City in a sworn statement filed with the POEA, charged
petitioner with illegal recruitment. Public respondent Atty. Ferdinand Marquez sent
petitioner a telegram directing him to appear to the POEA regarding the complaint
against him. On the same day, after knowing that petitioner had no license to operate a
recruitment agency, public respondent Administrator Tomas Achacoso issued a Closure
and Seizure Order No. 1205 to petitioner. It stated that there will a seizure of the
documents and paraphernalia being used or intended to be used as the means of
committing illegal recruitment, it having verified that petitioner has (1) No valid
license or authority from the Department of Labor and Employment to recruit and
deploy workers for overseas employment; (2) Committed/are committing acts
prohibited under Article 34 of the New Labor Code in relation to Article 38 of the same
code. A team was then tasked to implement the said Order. The group, accompanied by
mediamen and Mandaluyong policemen, went to petitioners residence. They served
the order to a certain Mrs. For a Salazar, who let them in. The team confiscated assorted
costumes. Petitioner filed with POEA a letter requesting for the return of the seized
properties, because she was not given prior notice and hearing. The said Order violated
due process. She also alleged that it violated sec 2 of the Bill of Rights, and the
properties were confiscated against her will and were done with unreasonable force and
intimidation.

Issue:
Whether or Not the Philippine Overseas Employment Administration (or the Secretary
of Labor) can validly issue warrants of search and seizure (or arrest) under Article 38 of
the Labor Code

Held:
Under the new Constitution, . . . no search warrant or warrant of arrest shall issue
except upon probable cause to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to be seized.
Mayors and prosecuting officers cannot issue warrants of seizure or arrest. The Closure
and Seizure Order was based on Article 38 of the Labor Code. The Supreme Court held,
We reiterate that the Secretary of Labor, not being a judge, may no longer issue search
or arrest warrants. Hence, the authorities must go through the judicial process. To that
extent, we declare Article 38, paragraph (c), of the Labor Code, unconstitutional and of
no force and effect The power of the President to order the arrest of aliens for
deportation is, obviously, exceptional. It (the power to order arrests) cannot be made to
extend to other cases, like the one at bar. Under the Constitution, it is the sole domain
of the courts. Furthermore, the search and seizure order was in the nature of a general
warrant. The court held that the warrant is null and void, because it must identify
specifically the things to be seized.

SORIANO VS. OFFSHORE SHIPPING AND MARKETING CORP.


G.R. NO. 78409
SEPT. 14, 1989
FERNAN, C.J.

Facts:
In search for better opportunities and higher income, petitioner Norberto Soriano, a
licensed Second Marine Engineer, sought employment and was hired by private
respondent Knut Knutsen O.A.S. through its authorized shipping agent in the Philippines,
Offshore Shipping and Manning Corporation. As evidenced by the Crew Agreement,
petitioner was hired to work as Third Marine Engineer on board Knut Provider" with a
salary of US$800.00 a month on a conduction basis for a period of fifteen (15) days. He
admitted that the term of the contract was extended to six (6) months by mutual
agreement on the promise of the employer to the petitioner that he will be promoted to
Second Engineer. Thus, while it appears that petitioner joined the aforesaid vessel on
July 23, 1985 he signed off on November 27, 1985 due to the alleged failure of private
respondent-employer to fulfill its promise to promote petitioner to the position of
Second Engineer and for the unilateral decision to reduce petitioner's basic salary from
US$800.00 to US$560.00. Petitioner was made to shoulder his return airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas
Employment Administration(POEA for short), a complaint against private respondent for
payment of salary differential, overtime pay, unpaid salary for November, 1985 and
refund of his return airfare and cash bond allegedly in the amount of P20,000.00
contending therein that private respondent unilaterally altered the employment
contract by reducing his salary of US$800.00 per month to US$560.00,causing him to
request for his repatriation to the Philippines. In resolving aforesaid case, the Officer-in-
Charge of the Philippine Overseas
EmploymentAdministration or POEA found that petitioner-
complainant's total monthly emolument isUS$800.00 inclusive of fixed overtime as
shown and proved in the Wage Scale submitted to the Accreditation Department of its
Office which would therefore not entitle petitioner to any salary differential; that the
version of complainant that there was in effect contract substitution has no grain of
truth because although the Employment Contract seems to have corrections on it, said
corrections or alterations are in conformity with the Wage Scale duly approved by the
POEA; that the withholding of a certain amount due petitioner was justified to answer
for his repatriation expenses which repatriation was found to have been requested by
petitioner himself as shownin the entry in his Seaman's Book; and that petitioner
deposited a total amount of P15,000.00only instead of P20,000.00 cash
bond. Dissatisfied, both parties appealed the aforementioned decision of the POEA to
the National Labor Relations Commission. Complainant-petitioner's appeal was
dismissed for lack of merit while respondents' appeal was dismissed for having been
filed out of time. Petitioner's motion for reconsideration was likewise denied. Hence this
recourse.

Issue:
Whether or not POEA acted in excess of its jurisdiction?

Decision:
As clearly explained by respondent NLRC, the correction was made only to specify the
salary and the overtime pay to which petitioner is entitled under the contract. It was a
mere breakdown of the total amount into US$560.00 as basic wage and US$240.00 as
overtime pay. Otherwise stated, with or without the amendments the total emolument
that petitioner would receive under the agreement as approved by the POEA is
US$800.00 monthly with wage differentials or overtime pay included.

SEAGULL MARITIME CORP. VS BALATONGAN, NLRC & POEA


G.R. NO. 82252
FEBRUARY 28, 1989
GANCAYCO, J.

Facts:

On November 2, 1982, a "crew Agreement" was entered into by private respondent


Nerry D. Balatongan and Philimare Shipping and Equipment Supply (hereinafter called
Philimare) whereby the latter employed the former as able seaman on board its vessel
"Santa Cruz" (renamed "Turtle Bay") with a monthly salary of US $ 300.00. Said
agreement was processed and approved by the National Seaman's Board (NSB) on
November 3, 1982.

While on board said vessel and parties entered into a supplementary contract of
employment on December 6, 1982 which provides among others: (1) The employer shall
be obliged to insure the employee during his engagement against death or permanent
invalidity caused by accident on board up to US $ 40,000 - for death caused by accident
and US $ 50,000 - for permanent total disability caused by accident.
On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result of
which he was hospitalized at the Suez Canal Authority Hospital. Later, he was
repatriated to the Philippines and was hospitalized at the Makati Medical Center from
October 23, 1983 to March 27, 1984. On August 19, 1985 the medical certificate was
issued describing his disability as "permanent in nature."
Balatongan demanded payment for his claim for total disability insurance in the amount
of US $ 50,000.00 as provided for in the contract of employment but his claim was
denied for having been submitted to the insurers beyond the designated period for
doing so.

Thus, Balatongan filed on June 21, 1985 a complaint against Philimare and Seagull
Maritime Corporation in the Philippine Overseas Employment Administration (POEA) for
non-payment of his claim for permanent total disability with damages and attorney's
fees.

After the parties submitted their respective position papers with the corresponding
documentary evidence, the officer-in-charge of the Workers Assistance and
Adjudication Office of the POEA rendered for respondents to pay complainant the
amount of US $ 50,000.00 representing permanent total disability insurance and
attorney's fees at 10% of the award. Payment should be made in this Office within ten
(10) days from receipt hereof at the prevailing rate of exchange. This Office cannot
however rule on damages, having no jurisdiction on the matter.

Seagull and Philimare appealed said decision to the National Labor Relations
Commission (NLRC) on June 4, 1986. Hence, Seagull and Philimare filed this petition for
certiorari with a prayer for the issuance of a temporary restraining order.

Issue:

W/N the supplementary contract of employment entered into between petitioners and
respondent is a prohibited practice to afford greater benefits to the employee

Held:

This Court is not a trier of facts and the findings of the public respondents are conclusive
in this proceeding. Public respondents found that petitioner Philimare and private
respondent entered into said supplementary contract of employment on December 6,
1982. Assuming for the sake of argument that it was petitioners' principal which entered
into said contract with private respondent, nevertheless petitioner, as its manning agent
in the Philippines, is jointly responsible with its principal thereunder.

The Court finds that the respondent NLRC did not commit a grave abuse of discretion in
denying petitioners, motion for leave to file third-party complaint and substitution
inclusion of party respondent. Such motion is largely addressed to the discretion of the
said Commission. Inasmuch as the alleged transfer of interest took place only after the
POEA had rendered its decision, the denial of the motion so as to avoid further delay in
the settlement of the claim of private respondent was well-taken. At any rate,
petitioners may pursue their claim against their alleged successor-in-interest in a
separate suit.
CATAN VS. NLRC
G.R. NO. 77279
APRIL 15, 1988
CORTES, J.

FACTS
Petitioner, a duly licensed recruitment agency, recruited private respondent to work in
Saudi Arabia as a steelman. The term of the contract provides for 1 year and with
automatic renewal. It was renewed when private respondent was not repatriated by his
Saudi employer but instead was assigned to work as a crusher plant operator and
crushed his ankle by the machine he was operating. After the expiration of the renewed
term, private respondent returned to the Philippines, had his ankle operated and
incurred expenses. After, he returned to Saudi Arabia to resume his work and was
repatriated. Upon his return, he had his ankle treated for which he incurred further
expenses.2.On the basis of the provision in the employment contract that the employer
shall compensate the employee if he is injured or permanently disabled in the course of
employment, private respondent filed a claim, against petitioner with respondent
Philippine Overseas Employment Administration. The POEA rendered judgment in favor
of private respondent. On appeal, respondent NLRC affirmed the decision. Not satisfied
with the resolution of the POEA, petitioner instituted the instant special civil action for
certiorari, alleging grave abuse of discretion on the part of the NLRC.

RULING
1.The court said that there is no merit in petitioners contention. A private employment
agency may be sued jointly and solidarily with its foreign principal for violations of the
recruitment agreement and the contracts of employment.

2.Even if indeed petitioner and the Saudi principal had already severed their agency
agreement at the time private respondent was injured, petitioner may still be sued for a
violation of the employment contract because no notice of the agency agreement's
termination was given to the private respondent:

3.Petitioner contends that even if it is liable for disability benefits, the NLRC gravely
abused its discretion when it affirmed the award of medical expenses when the said
expenses were the consequence of private respondent's negligence in returning to work
in Saudi Arabia when he knew that he was not yet medically fit to do so.
4z.The court said that theres No evidence introduced to prove that private respondent
was not medically fit to work when he returned to Saudi Arabia. Nowhere does it say it
the medical certificate issued by the camp doctor that he was not medically fit to work.

ROYAL CROWNE INTERNATIONAL VS. NLRC


G.R. NO. 78085
OCTOBER 16, 1989
CORTES, J.

FACTS:
Petitioner, a duly licensed private employment agency, recruited and deployed private
respondent Virgilio for employment with ZAMEL as an architectural draftsman in Saudi
Arabia. Service agreement was executed by private respondent and ZAMEL whereby the
former was to receive per month a salary of US$500.00 plus US$100.00 as allowance for
a period of one year commencing from the date of his arrival in Saudi Arabia. However,
ZAMEL terminated the employment of private respondent on the ground that his
performance was below par. For three successive days thereafter, he was detained at
his quarters and was not allowed to report to work until his exit papers were ready. On
February 16, 1984, he was made to board a plane bound for the Philippines. Private
respondent then filed a complaint for illegal termination against Petitioner Royal
Crown Internationale and ZAMEL with the POEA.

Petitioner contends that there is no provision in the Labor Code, or the omnibus rules
implementing the same, which either provides for the "third-party liability" of
an employment agency or recruiting entity for violations of an employment
agreement performed abroad, or designates it as the agent of the foreign-based
employer for purposes of enforcing against the latter claims arising out of
anemployment agreement. Therefore, petitioner concludes, it cannot be held jointly
and severally liable with ZAMEL for violations, if any, of private respondent's service
agreement.

ISSUE:
Whether or not petitioner as a private employment agencymay be held jointly and
severally liable with the foreign-based employer for any claim which may arise in
connection with the implementation of the employment contracts of the employees
recruited and deployed abroad.

HELD:
Yes, Petitioner conveniently overlooks the fact that it had voluntarily assumed solidary
liability under the various contractual undertakings it submitted to the Bureau
of Employment Services. In applying for its license to operate a private employment
agency for overseas recruitment and placement, petitioner was required to submit,
among others, a document or verified undertaking whereby it assumed all
responsibilities for the proper use of its license and the implementation of the contracts
of employment with the workers it recruited and deployed for overseas employment. It
was also required to file with the Bureau a formal appointment or agency contract
executed by the foreign-based employer in its favor to recruit and hire personnel for the
former, which contained a provisionempowering it to sue and be sued jointly and
solidarily with the foreign principal for any of the violations of the recruitment
agreement and the contracts of employment. Petitioner was required as well to post
such cash and surety bonds as determined by the Secretary of Labor to guarantee
compliance with prescribed recruitment procedures, rules and regulations, and terms
and conditions of employment as appropriate.

These contractual undertakings constitute the legal basis for holding petitioner, and
other private employment or recruitment agencies, liable jointly and severally with its
principal, the foreign-based employer, for all claims filed by recruited workers which
may arise in connection with the implementation of the service agreements or
employment contracts.

FACILITIES MANAGEMENT CORPORATION VS. DE LA ROSA


GR L-38649
MARCH 26, 1979
MAKASIAR, J.

Facts:
Facilities Management Corporation and J. S. Dreyer are domiciled in Wake Island while J.
V. Catuira is an employee of FMC stationed in Manila. Leonardo dela Osa was employed
by FMC in Manila, but rendered work in Wake Island, with the approval of the
Department of Labor of the Philippines. De la Osa was employed as (1) painter with an
hourly rate of $1.25 from March 1964 to November 1964, inclusive; (2) houseboy with
an hourly rate of $1.26 from December 1964 to November 1965, inclusive; (3) houseboy
with an hourly rate of $1.33 from December 1965 to August 1966, inclusive; and (4)
cashier with an hourly rate of $1.40 from August 1966 to March 27 1967, inclusive. He
further averred that from December, 1965 to August, 1966, inclusive, he rendered
overtime services daily, and that this entire period was divided into swing and graveyard
shifts to which he was assigned, but he was not paid both overtime and night shift
premiums despite his repeated demands from FMC, et al. In a petition filed on 1 July
1967, dela Osa sought his reinstatement with full backwages, as well as the recovery of
his overtime compensation, swing shift and graveyard shift differentials.

Subsequently on 3 May 1968, FMC, et al. filed a motion to dismiss the subject petition
on the ground that the Court has no jurisdiction over the case, and on 24 May 1968, de
la Osa interposed an opposition thereto. Said motion was denied by the Court in its
Order issued on 12 July 1968. Subsequently, after trial, the Court of Industrial Relations,
in a decision dated 14 February 1972, ordered FMC, et al. to pay de la Osa his overtime
compensation, as well as his swing shift and graveyard shift premiums at the rate of 50%
per cent of his basic salary. FMC, et al. filed the petition for review on certiorari.

Issue:
Whether the mere act by a non-resident foreign corporation of recruiting Filipino
workers for its own use abroad, in law doing business in the Philippines.
Whether FMC has been "doing business in the Philippines" so that the service of
summons upon its agent in the Philippines vested the Court of First Instance of Manila
with jurisdiction.

Held:
In its motion to dismiss, FMC admits that Mr. Catuira represented it in the Philippines
"for the purpose of making arrangements for the approval by the Department of Labor
of the employment of Filipinos who are recruited by the Company as its own employees
for assignment abroad." In effect, Mr. Catuira was alleged to be a liaison officer
representing FMC in the Philippines. Under the rules and regulations promulgated by
the Board of Investments which took effect 3 February 1969, implementing RA 5455,
which took effect 30 September 1968, the phrase "doing business" has been
exemplified with illustrations, among them being as follows: ""(1) Soliciting orders,
purchases (sales) or service contracts. Concrete and specific solicitations by a foreign
firm, not acting independently of the foreign firm, amounting to negotiation or fixing of
the terms and conditions of sales or service contracts, regardless of whether the
contracts are actually reduced to writing, shall constitute doing business even if the
enterprise has no office or fixed place of business in the Philippines; (2) appointing a
representative or distributor who is domiciled in the Philippines, unless said
representative or distributor has an independent status, i.e., it transacts business in its
name and for its own account, and not in the name or for the account of the principal;
xxx (4) Opening offices, whether called 'liaison' offices, agencies or branches, unless
proved otherwise. xxx (10) Any other act or acts that imply a continuity of commercial
dealings or arrangements, and contemplate to that extent the performance of acts or
works, or the exercise of some of the functions normally incident to, or in the
progressive prosecution of, commercial gain or of the purpose and objective of the
business organization."

FMC may be considered as "doing business in the Philippines" within the scope of
Section 14 (Service upon private foreign corporations), Rule 14 of the Rules of Court
which provides that "If the defendant is a foreign corporation, or a non-resident joint
stock company or association, doing business in the Philippines, service may be made on
its resident agent designated in accordance with law for that purpose or, if there be no
such agent, on the government official designated by law to that effect, or on any of its
officers or agents within the Philippines." Indeed, FMC, in compliance with Act 2486 as
implemented by Department of Labor Order IV dated 20 May 1968 had to appoint Jaime
V. Catuira, 1322 A. Mabini, Ermita, Manila "as agent for FMC with authority to execute
Employment Contracts and receive, in behalf of that corporation, legal services from
and be bound by processes of the Philippine Courts of Justice, for as long as he remains
an employee of FMC." It is a fact that when the summons for FMC was served on Catuira
he was still in the employ of the FMC. Hence, if a foreign corporation, not engaged in
business in the Philippines, is not barred from seeking redress from courts in the
Philippines (such as in earlier cases of Aetna Casualty & Surety Company, vs. Pacific Star
Line, etc. [GR L-26809], In Mentholatum vs. Mangaliman, and Eastboard Navigation vs.
Juan Ysmael & Co.), a fortiori, that same corporation cannot claim exemption from
being sued in Philippine courts for acts done against a person or persons in the
Philippines.

PEOPLE VS. CHOWDURY


G.R. NO. 129577-80
FEBRUARY 15, 2000
PUNO, J.

Facts: Bulu Chowdury was charged with the crime of illegalrecruitment in large scale by
recruiting Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis for employment
in Korea. Evidence shows that accused appellant interviewed private complainant in
1994 at Craftrades office. At that time, he was an interviewer of Craftrade which was
operating under temporary authority given by POEA pending the renewal of license. He
was charged based on the fact that he was not registered with the POEA as employee of
Craftrade and he is not in his personal capacity, licensed to recruit overseas workers.
The complainants also averred that during theirapplications for employment for abroad,
the license of Craftrade was already expired.

For his defense Chowdury testified that he worked as interviewer at Craftrade from
1990 until 1994. His primary duty was to interview job applicants for abroad. As a mere
employee, he only followed the instructions given by his superiors, Mr. Emmanuel
Geslani, the agency's President and General Manager, and Mr. UtkalChowdury, the
agency's Managing Director.

Issue: Whether or not accused-appellant knowingly and intentionally participated in the


commission of the crime charged.

Held: No, an employee of a company or corporation engaged in illegal recruitment may


be held liable as principal, together with his employer, if it is shown that he actively and
consciously participated in illegal recruitment. In this case, Chowdury merely performed
his tasks under the supervision of its president and managing director. The prosecution
failed to show that the accused-appellant is conscious and has an active participation
in the commission of the crime of illegal recruitment. Moreover, accused-appellant was
not aware of Craftrade's failure to register his name with the POEA and the prosecution
failed to prove that he actively engaged inrecruitment despite this knowledge. The
obligation to register its personnel with the POEA belongs to the officers of the agency.
A mere employee of the agency cannot be expected to know the legalrequirements
for its operation. The accused-appellant carried out his duties as interviewer of
Craftrade believing that the agency was duly licensed by the POEA and he, in turn, was
duly authorized by his agency to deal with the applicants in its behalf. Accused-appellant
in fact confined his actions to his job description. He merely interviewed the applicants
and informed them of the requirements fordeployment but he never received money
from them. Chowdury did not knowingly and intentionally participated in the
commission of illegal recruitment being merely performing his task and unaware of
illegality of recruitment.
PEOPLE V. NELLIE CABAIS Y GAMUELA
G.R. NO. 129070
MARCH 16, 2001.

FACTS
Accused was convicted of illegal recruitment committed in large scale by a syndicate,
and sentenced to life imprisonment and a fine. She was also convicted for two counts of
estafa, and sentenced to (a) in Criminal Case No. 13999-R, to six (6) months and one (1)
day of prision correccional, as minimum, to seven (7) years, eight (8) months and
twenty-one (21) days of prision mayor, as maximum, and to indemnify the offended
party Joan Merante, in the amount of P40,000.00 as actual damages, and costs; (b) in
Criminal Case No. 14000-R, to six (6) months and one (1) day of prision correccional, as
minimum, to six (6) years, eight (8) months and twenty (20) days of prision mayor, as
maximum, and to indemnify the offended party, Nancy Oidi, in the amount of
P21,000.00 as actual damages, and costs.

HELD:
The essential elements of illegal recruitment committed in large scale are: (1) that the
accused engaged in acts of recruitment and placement of workers as defined under
Article 13 (b) or in any prohibited activities under Article 34 of the Labor Code; (2) that
the accused had not complied with the guidelines issued by the Secretary of Labor and
Employment, particularly with respect to the requirement to secure a license or an
authority to recruit and deploy workers, either locally or overseas; and (3) that the
accused committed the unlawful acts against three (3) or more persons, individually or
as a group.

Accused-appellant contends that she was not involved in recruitment but was merely an
employee of a recruitment agency. An employee of a company or corporation engaged
in illegal recruitment may be held liable as principal, together with his employer, if it is
shown that he actively and consciously participated in illegal recruitment. In this case,
accused was the one who informed complainants of job prospects in Korea and the
requirements for deployment. She also received money from them as placement fees.
All of the complainants testified that they personally met accused-appellant and
transacted with her regarding the overseas job placement offers. Complainants parted
with their money, evidenced by receipts signed by accused Cabais and accused Forneas.
Thus, accused-appellant actively participated in the recruitment of the complainants.
Furthermore, accused-appellant did not possess any license to engage in recruitment
activities, as evidenced by a certification from the POEA and the testimony of a
representative of said government agency. Her acts constituted recruitment, and
considering that she admittedly had no license or authority to recruit workers for
overseas employment, accused-appellant is guilty of illegal recruitment. Despite the fact
that she was just an ordinary employee of the company, her criminal liability would still
stand for being a conspirator with the corporate officers in undertaking illegal
recruitment activities. Since the recruitment involves three or more persons, accused-
appellant is guilty of illegal recruitment in a large scale punishable under Article 39 of
the Labor Code with life imprisonment and a fine of one hundred thousand pesos.
As to the charges of estafa, accused-appellant contends that she is not liable for the
offenses charged because she did not appropriate for her own use the money given to
her by complainants as placement and passport fees. The elements of estafa are: (a)
that the accused defrauded another by abuse of confidence or by means of deceit, and
(b) that damage or prejudice capable of pecuniary estimation is caused to the offended
party or third person. From the foregoing, the fact that the money was appropriated by
accused for her own use is not an element of the crime of estafa. Thus, accused-
appellant Cabais contention under such ground is untenable. Moreover, accused-
appellant misrepresented herself to complainants as one who can make arrangements
for job placements in Korea. Complainants were successfully induced to part with their
money, causing them damage and prejudice. Consequently, accused-appellant is guilty
of estafa.

PEOPLE OF THE PHILIPPINES VS. LUZ GONZALES-FLORES


G.R. NO. 138535-38
APRIL 19, 2001
MENDOZA, J.

Facts:
The accused, conspiring together, confederating with several persons whose true names
and whereabouts have not as yet been ascertained and helping one another, did then
and there wilfully, unlawfully and feloniously defraud LARRY TIBOR Y MABILANGAN in
the following manner, to wit: the said accused, by means of false manifestations and
fraudulent representations which they made to said complainant to the effect that they
had the power and capacity to recruit and employ complainant abroad as [a] seaman
and could facilitate the processing of the pertinent papers if given the necessary amount
to meet the requirements thereof, and by means of other similar deceits, induced and
succeeded in inducing said complainant to give and deliver, as in fact gave and delivered
to said accused the amount of P38,000.00 on the strength of said manifestations and
representations, said accused well knowing that the same were false and fraudulent and
were made solely to obtain, as in fact they did obtain the amount of P38,000.00 which
amount once in possession, with intent to defraud LARRY TIBOR Y MABILANGAN
wilfully, unlawfully and feloniously mis-appropriated misapplied and converted to their
own personal use and benefit) to the damage and prejudice of said complainant in the
amount of P38,000.00, Phi1ippine Currency.
On the other hand, in Criminal Case No. Q-94-59473, the information for illegal
recruitment in large scale charged:

That on or about the month of August, 1994, in Quezon City, Philippines, the said
accused, conspiring together, confederating with several persons whose true names and
whereabouts have not as yet been ascertained and helping one another, did then and
there, wilfully, unlawfully and feloniously canvass, enlist, contract and promise
employment to the following persons, to wit:
RONALD F[R]EDERI[Z]O Y HlJSENIA
LARRY TIBOR Y MABILANGAN
FELIXBERTO LEONGSON, JR. y CASTANEDA
after requiring them to submit certain documentary requirements and exacting from
them the total amount of P128,000,00 Philippine Currency as recruitment fees such
recruitment activities being done without the required license or authority from the
Department of Labor.

That the crime described above is committed in large scale as the same was perpetrated
against three (3) or more persons individually or as group as penalized under Articles 38
and 39) as amended by P.D. 2018, of the Labor Code.6
That night, accused-appellant came to see Felixberto and reiterated her proposal.
Felixberto said he wanted the job but he only had P10,000.00. Accused-appellant told
him the amount would be sufficient as an initial payment.
Accused-appellant came back with Joseph Mendoza, whose brother-in-Iaw, Engr.
Leonardo Domingo, according to accused- appellant, was recruiting seamen. Thereafter,
accused-appellant and Mendoza took complainant, Cloyd, and Jojo's wife, Clarita, to a
house on Second Street, near Camp Crame in Quezon City, where the latter were
introduced to Andy Baloran.7 Complainant and his companions were told that Baloran
was an employee of the National Bureau of Investigation and he would take care of
processing the applications for employment. Baloran told complainant and the other job
applicants that those who would be employed would be paid a monthly salary of US$
l,000.00, plus tips, and given vacation leaves of 45 days with pay. Baloran asked
complainant to submit his picture, bio-data, and birth certificate, which complainant
later did. Accused-appellant then asked complainant to give her the P10,000.00 as initial
payment. Complainant handed her the money and asked for a receipt, but accused-
appellant told him not to worry and assured him that she would be responsible if
anything untoward happened. Complainant, therefore, did not insist on asking accused-
appellant for a receipt. Accused-appellant said she gave the money to Baloran.

Two days later, Baloran and Domingo went to the compound where Felixberto and
accused-appellant were residing and called Felixberto, Cloyd, and Jojo to a meeting.
Domingo told the applicants that he was the chief engineer of the luxury ocean liner
where they would embark and repeated to them the salaries and other benefits which
they would receive. He told them not to get impatient.
Accused-appellant later saw complainant to collect the balance of P35,000.00.
Complainant was told to give the money to accused-appellant at Wendy's in Cubao,
Quezon.City on August 12, 1994.

At the appointed date and place, complainant and his wife delivered the amount to
accused-appellant who, in turn, handed it to Baloran. No receipt was, however, issued
to Felixberto.

Another meeting was held on August 16, 1994 at the Mandarin Hotel in Makati City by
accused-appellant, Domingo, Baloran, Mendoza, the Leongson spouses, the Malgapo
spouses, and Jojo Bumatay. The applicants were told by Domingo that they would be
employed as waiters and attendants in the luxury liner and asked them again to wait a
while.

On August 18, 1994, accused-appellant saw complainant again to collect the P 25,000.00
balance. Felixberto paid the amount to accused- appellant four days later. As in the case
of the first two payments, no receipt was given for the P25,000.00. Accused-appellant
told him that she would turn over the amount to Baloran. Although complainant
regularly followed up his application with accused-appellant, he was told each time to
have patience and to just wait for the call from Domingo or from Baloran. But Felixberto
never heard from either one of these two.

Issue: Whether the accused is guily of illegal recruitment.

Held:
Yes. In these cases, according to the certification of the POEA, accused-appellant had no
license or authority to engage in any recruitment activities. In fact, this was stipulated at
the trial. Accused-appellant claims, however, that she herself was a victim of illegal
recruitment and that she simply told complainants about job opportunities abroad.
The allegation is untenable. Art. 13 (b) of the Labor Code defines "recruitment and
placement" as referring to any act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals, contract services, promising
or advertising for employment, locally or abroad, whether for profit or not. The same
article further states that any person or entity which, in any manner, offers or promises
for a fee employment to two or more persons shall be deemed engaged in recruitment
and placement.

The evidence for the prosecution shows that accused-appellant sought out
complainants and promised them overseas employment. Despite their initial reluctance
because they lacked the technical skills required of seamen, complainants were led to
believe by accused-appellant that she could do something so that their applications
would be approved. Thus, because of accused-appellant's misrepresentations,
complainants gave her their moneys. Accused-appellant's companions, Domingo,
Baloran, and Mendoza, made her ploy even more plausible.
PEOPLE V. SAGAYDO
G.R. NOS. 124671-75
SEPTEMBER 29, 2000
PARDO, J.

Facts:
The accused appellant made representations to each of the private complainants that
she could send them to Korea to work as factory workers, constituting a promise of
employment which amounted to recruitment as defined under Article 13 (b) of the
Labor Code.
The accused denied having recruited any of the private complainants. She claimed that
they came to her voluntarily after being informed that she was able to send her three
sons to Korea.

Issue: Whether or not Linda Sagaydo is guilty of illegal recruitment.

Held: From the testimonies of the private complainants that the trial court found to be
credible and untainted with improper motives, there is no denying that accused-
appellant gave the complainants the distinct impression that she had the power or
ability to send them abroad for work such that the latter were convinced to part with
their money in order to be employed. As against the positive and categorical
testimonies of the complainants, mere denial of accused-appellant cannot prevail.
As to the license requirement, the record showed that accused-appellant did not have
the authority to recruit for employment abroad, per certification issued by the POEA
Regional Extension Unit in Baguio City.
Illegal recruitment has been defined to include the act of engaging in any of the
activities mentioned in Article 13 (b) of the Labor Code without the required license or
authority from the POEA. Under the aforesaid provision, any of the following activities
would constitute recruitment and placement: canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, including referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or
not. Article 13 (b) further provides that any person or entity which, in any manner,
offers or promises for a fee employment to two (2) or more persons shall be deemed
engaged in recruitment and placement. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more persons, individually or as a
group. This crime requires proof that the accused: (1) engaged in the recruitment and
placement of workers defined under Article 13 or in any of the prohibited activities
under Article 34 of the Labor Code; (2) does not have a license or authority to lawfully
engage in the recruitment and placement of workers; and (3) committed the infraction
against three or more persons, individually or as a group.
The absence of receipts cannot defeat a criminal prosecution for illegal recruitment. As
long as the witnesses can positively show through their respective testimonies that the
accused is the one involved in prohibited recruitment, he may be convicted of the
offense despite the absence of receipts.

PEOPLE V BENZON ONG


G. R. NO. 119594
JANUARY 18, 2000
MENDOZA, J.

Facts:
Accused, representing himself to have the capacity to contract, enlist, hire and transport
Filipino workers for employment abroad, did then and there willfully, unlawfully and
feloniously, for a fee, recruit and promise employment/job placement to the nine
complainants in Taiwan, without first obtaining or securing license or authority from the
proper governmental agency.

Accused-appellant claims that when complainants filled out their respective bio-data,
application forms and other documents for employment in Taiwan, they knew that they
were applying for employment abroad through the Steadfast Recruitment Agency. He
claims that he merely suggested to them the opportunity to work overseas but that he
never advertised himself as a recruiter.

Accused-appellant denies that the signatures in the receipts of payments are his. To be
sure, the presentation of the receipts acknowledging payments is not necessary for the
successful prosecution of accused-appellant.

Accused-appellant contends that the elements of estafa have not been proven by the
prosecution, specifically, the requirement that complainants must have relied on the
false pretenses of accused-appellant, because complainants knew that he was not a
licensed recruiter.

Issue: Whether or not Benzon Ong committed the crime of illegal recruitment

Held: To prove illegal recruitment, it must be shown that the accused-appellant gave
complainants the distinct impression that he had the power or ability to send
complainants abroad for work such that the latter were convinced to part with their
money in order to be employed Illegal recruitment is considered an offense involving
economic sabotage if any of these qualifying circumstances exist, namely, (a) when
illegal recruitment is committed by a syndicate, i.e., if it is carried out by a group of
three or more persons conspiring and/or confederating with one another; or, (b) when
illegal recruitment is committed in large scale, i.e., if it is committed against three or
more persons individually or as a group. The essential elements of the crime of illegal
recruitment in large scale are: (1) the accused engages in acts of recruitment and
placement of workers defined under Art. 13(b) or in any prohibited activities under Art.
34 of the Labor Code; (2) the accused has not complied with the guidelines issued by the
Secretary of Labor and Employment, particularly with respect to the securing of a
license or an authority to recruit and deploy workers, either locally or overseas; and (3)
the accused commits the unlawful acts against three or more persons, individually or as
a group. As defined, a "license" is that which is issued by the Department of Labor and
Employment authorizing a person or entity to operate a private employment agency,
while an "authority" is that issued by the DOLE entitling a person or association to so
engage in recruitment and placement activities as a private recruitment agency. It is the
lack of the necessary license or authority that renders the recruitment unlawful or
criminal.

The evidence shows that he made misrepresentations to them concerning his authority
to recruit for overseas employment and collected various amounts from them for
placement fees. Clearly, accused-appellant committed acts constitutive of large scale
illegal recruitment.
He was positively identified by complainants as the person who had recruited them for
employment in Taiwan. He succeeded in inveigling them into paying various amounts to
him for their placement fees. Their testimonies dovetail with each other in material
points
Moreover, it is settled that a person who is convicted of illegal recruitment may, in
addition, be convicted of estafa under Art. 315(2)(a) of the Revised Penal Code. There is
no problem of double jeopardy because illegal recruitment is malum prohibitum, in
which the criminal intent is not necessary, whereas estafa is malum in se in which the
criminal intent of the accused is necessary.

PEOPLE V. CALONZO
G.R. NOS. 115150-55
SEPTEMBER 27, 1996
BELLOSILLO, J.

Facts:
Firstly, he deluded complainants into believing that jobs awaited them in Italy by
distinctly impressing upon them that he had the facility to send them for work
abroad. He even showed them his passport to lend credence to his claim. To top it all,
he brought them to Bangkok and not to
Italy. Neither did he have any arrangements in Bangkok for the transfer of his
recruits to Italy. Secondly, POEA likewise certified that neither Calonzo nor R. A. C.
Business Agency was licensed to recruit workers for employment abroad. Appellant
admitted this fact himself. Thirdly, appellant recruited five (5) workers thus making the
crime illegal recruitment in large scale constituting economic sabotage.
Complainants were all united in pointing to the Calonzo as the person who enticed
them to apply for employment abroad. Of course, Calonzo could not explain what
motivated the complaining witnesses to file these cases against him. The most that
Calonzo could do on the witness stand was to deny all the charges against him. Alas, his
denial is at most lame and cannot prevail over the positive assertions of the complaining
witnesses.

Issue: Whether or not Calonzo committed illegal recruitment in large scale.

Held: Article 13, par. (b), of the Labor Code defines recruitment and placement as
(A)ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not; Provided, that any person or
entity which, in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement.
Illegal recruitment is specifically defined in Art. 38 of the Code thus -
Any recruitment activities, including the prohibited practices enumerated under Article
34 of this Code, to be undertaken by non-licensees or non-holders of authority shall be
deemed illegal and punishable under Article 39 of this Code x x x x
Illegal recruitment when committed by a syndicate or in large scale shall be considered
an offense involving economic sabotage and shall be penalized in accordance with
Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or scheme defined under
the first paragraph hereof. Illegal recruitment is deemed committed in large scale if
committed against three (3) or more persons individually or as a group.
The absence of evidence as to an improper motive actuating the principal witnesses of
the prosecution strongly tends to sustain no improper motive existed and their
testimony is worthy of full faith and credit. Accused-appellant's denial cannot prevail
over the positive assertions of complainants who had no motive to testify falsely against
her except to tell the truth.

Calonzo defrauded complainants through deceit. They were obviously misled into
believing that he could provide them employment in Italy. As a result, the five (5)
complainants who desperately wanted to augment their income and improve their lot
parted with their hard-earned money.

PEOPLE V. DE REICHL
PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. FRANCISCO HERNANDEZ (AT
LARGE), KARL REICHL, AND YOLANDA GUTIERREZ DE REICHL, ACCUSED.
KARL REICHL AND YOLANDA GUTIERREZ DE REICHL, ACCUSED-APPELLANTS.
G.R. NOS. 141221-36
MARCH 7, 2002
PUNO, J.
Facts:
In April 1993, eight informations for syndicated and large scale illegal recruitment and
eight informations for estafa were filed against accused-appellants, spouses Karl and
Yolanda Reichl, together with Francisco Hernandez. Only the Reichl spouses were tried
and convicted by the trial court as Francisco Hernandez remained at large.
The complainants namely, Narcisa Autor de Hernandez, Leonora Perez, Melanie Bautista
Annaliza Perez, Edwin Coling, Estela Abel de Manalo, Anicel Umahon and Charito Balmes
have their own similar stories about the illegal recruitment conducted by the accused-
appellants. They recounted that accused Hernandez was the one convincing each of
them to apply for employment abroad. Accused Hernandez asked for the payment for
the processing of their papers, travel documents and visas. Complainants then were
introduced by Hernandez to spouse Reichl who in turn promised them for employment
abroad. The spouse issued reciept for the payments made by the complainants. The
promises of employment however did not pushed through and the complainants
remained in the Philippines. Upon demands, the accused spouse promise them to
refund the payment if their employments never materialized. These agreements were
reduced into a document but the accused spouse never complies with their obligations.
There was also a certification from the Philippine overseas employment Administration
(POEA) that Francisco Hernandez, Karl Reichl and Yolanda Gutierrez Reichl in their
personal capacities were neither licensed nor authorized by the POEA to recruit workers
for overseas employment.
As for their part, the spouse denied any of involvement of Hernandez's recruitment and
their knowledge of promises for overseas employment. They further contended that
they cannot be convicted of illegal recruitment committed in large scale as the several
information were only filed by single complainant.

Issue: Whether or not the accused-appellants were guilty of syndicated and large scale
illegal recruitment.

Held: They cannot be convicted of illegal recruitment committed in large scale. Where
only one complainant filed individual complaints as in this case, there is no illegal
recruitment in large scale. However, they are guilty of syndicated illegal recruitment.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying
out any unlawful or illegal transaction, enterprise or scheme defined under the first
paragraph of Article 38 of the Labor Code. It has been shown that Karl Reichl, Yolanda
Reichl and Francisco Hernandez conspired with each other in convincing private
complainants to apply for an overseas job and giving them the guaranty that they would
be hired as domestic helpers in Italy although they were not licensed to do so. Thus, the
accused appellants are liable for illegal recruitment committed by a syndicate.

PEOPLE V. TOMMY TAN


G.R. NO. 153460
JANUARY 29, 2007
PADILLA, J.

Facts:
Accused-appellant Tan Tiong Meng alias Tommy Tan was charged and convicted with
illegal recruitment in large scale and 6 counts of estafa before the regional trial court of
cavity city. The complainants namely: Ernesto Orcullo, Manuel Latina, Neil Mascardo,
Librado C. Pozas, EdgardoTolentino and Cavino Asiman have similar stories about the
illegal recruitment activities of the accused. Each of them recounted that they were
informed of job employment in Taiwan. The transactions happened in certain house of
Borja where the accused-appellant assured the complainants of employment at
Rainbow Ship Co.. They were asked to pay a certain amount for placement and
processing fees. The accused issued receipts. The promise of employment however did
not push through and the complainants decided to file a complaint for illegal
recruitment. They later found out that the accused-appellant was not a licensed
overseas recruiter.

Issue: Whether or not the accused-appellant was guilty of illegal recruitment in large
scale.

Held: Yes, the Labor Code defines recruitment and placement as any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for employment, locally or abroad,
whether for profit or not; Provided, that any person or entity which, in any manner,
offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement.
It is clear that accused - appellant's acts of accepting placement fees from job applicants
and representing to said applicants that he could get them jobs in Taiwan constitute
recruitment and placement under the above provision of the Labor Code. The accused
was not also licensed by the POEA and thus making him an illegal recruiter. Moreover,
illegal recruitment is deemed committed in large scale if committed against three or
more persons individually or as a group. In this case, the accused- appellant committed
illegal recruitment in large scale for having recruited six complainants.

PEOPLE V ARABIA AND TOMAS


G.R. NO. 138431-36
SEPTEMBER 12, 2001
GONZAGA-REYES, J.

Facts:
Sometime in the month of October, 1992, in Quezon City, Philippines, the said accused,
conspiring together, confederating with and mutually helping each other, did then and
there willfully, unlawfully and feloniously defraud Rolando Rustia by means of false
manifestations and fraudulent representation which they made him to the effect that
they had the power and capacity to recruit and employ him and could facilitate the
processing of the pertinent papers if given the necessary amount to meet the
requirements thereof, and by means of other similar deceits, induced and succeeded in
inducing said Rolando Rustia to give and deliver, as in fact he gave and delivered to said
accused the amount of P23,000.00 on the strength of said manifestations and
representations, said accused well knowing that the same were false and fraudulent
and were made solely to obtain, as in fact they did obtain the amount of P23,000.00,
which amount once in possession, with intent to defraud Rolando Rustia, willfully,
unlawfully and feloniously misappropriated, misapplied and converted to their own
personal use and benefit, to the damage and prejudice of said Rolando Rustia in the
aforesaid amount of P23,000.00, Philippine Currency.

Private complainants were not able to leave for Taiwan because appellants told them
that the person who was supposed to accompany them to Taiwan did not arrive. The
departure date was thus reset to January 16, 1993, but private complainants were still
unable to leave because of the same excuse that appellants gave.
Private complainants asked for the return of their money as they were no longer
interested in working abroad. They were informed by Arabias sister, however, that
appellants were arrested by the NBI and detained at the Quezon City Jail. Records also
showed that appellants were neither licensed nor authorized to recruit workers for
overseas employment

Issue: Whether or not the Arabia and Tomas are guilty of the crime charged.

Held: Undoubtedly, accused Arabia and Tomas were engaged in recruiting workers for
employment abroad and the only defense they have is denial. Large-scale illegal
recruitment has the following essential elements:The accused undertook recruitment
activity defined under Article 13 or any prohibited practice under Art. 34 of the Labor
Code, he did not have the license or the authority to lawfully engage in the recruitment
and placement of workers and he committed the same against three or more persons,
individually or as a group.

These essential elements are present in this case. Accused-appellants recruited at least
four persons, giving them the impression that they had the capability to send them to
Taiwan for employment. They collected various amounts allegedly for recruitment and
placement fees without license or authority to do so. It is settled that the fact that an
accused in an illegal recruitment case did not issue the receipts for amounts received
from the complainants has no bearing on his culpability so long as complainants show
through their respective testimonies and affidavits that the accused was involved in the
prohibited recruitment. Thus, the accused-appellants were guilty of illegal recruitment
in large scale.
PEOPLE V VERANO
G.R. NO. 110109
NOVEMBER 21, 1996
ROMERO, J.

Facts:
Sometime in October 1987, Verano while at her residence at Sta. Ana Manila informer
her cousin Alfonso and the latters friends Joe and Arturo that she was recruiting
salesmen for employment in Bahrain. Accused asked him to pay for various expenses
and fees including cost of processing of travel papers, cost of plane tickets, medical
examination and recruitment fees.

Complainants Alfonso, Jose and Arturo paid the total installments covered by receipts
signed by the accused. Afterwards, accused promised that they could depart for Bahrain
for their promised employment.

For three times on various dates, the complainants proceeded to the Manila
International airport and waited for the accused to deliver their plane tickets, passports,
and visas before their supposed flight to Bahrain, but the accused failed to deliver them.
This prompted them to go to WPD headquarters to lodge their complaint. Despite
verbal demands from the three complainants, the accused failed to return the amounts
paid to her. It appeared from the records of the POEA that the accused was not a
licensed labor recruiter.

Issue: Whether Verano is guilty of illegal recruitment in large scale


Held: The court found the accused guilty beyond reasonable doubt of the crime illegal
recruitment in large scale and sentenced her to suffer the penalty of life imprisonment
to pay fine of P100,000 and ordered to pay the offended parties, Arturo and Alfonso
plus interest at the legal rate from February 22, 1988, the date of the filing of the
information. In addition to the foregoing, the accused was also found guilty beyond
reasonable doubt of the crime estafa.

PEOPLE V. ESPANOL
G.R. NO. 105676
APRIL 10, 1996
KAPUNAN, J.

Facts:
In or abour February or August 1988, at Quezon city, accused Espanol canvassed,
enlisted, contracted and promised employment to 14 persons, exacting total of P21,500
as recruitment fees without authority or license from the POEA. Accused introduced
himself to 14 private complainants as one who had rich and influential relatives in
California, USA. The positions promised were for a dressmaker, cook, dishwasher, driver
and housemaid. And accused exacted payments for processing of travel documents in
amounts ranging from P1,000-P3,000.

On several occasions, complainants talked to the accused, who kept promising that he
could send them to abroad. When the complainants sensed that they were deceived,
they demanded the return of the money, but accused failed and started hiding. They
chanced on him and forcibly took him to the police station where they gave their sworn
statements. Accuseds defense was that he did not know the applicants except one, that
he had no brother or sister in CA, USA.

Held: The accused is a dangerous member of society who feels happy and comfortable
victimizing the poor, innocent and the gullible of their hard-earned money. Evidence
woven together proves the pattern of illegal recruitment, hence mere denial must
necessarily fall.

The court found the accused guilty beyond reasonable doubt of the crime charged and
sentenced him to suffer eight years imprisonment and to pay a fine and likewise aksed
to reimburse sum of P21,500 to the 14 private complainants.

PEOPLE V. ROXAS
G.R. NO. 140762
SEPTEMBER 10, 2003
VITUG, J.

Facts:
Accused FC Roxas, doing business under the name and style of FC Roxas Construction,
with office address at Rm. 212 Manufacturers Building, Sta Cruz, Manila, was a licensed
private recruitment entity (Service contractor) whose authority was issued on February
20, 1984 and expired on March 25, 1988. (A service contractor acts as the employer of
its recruits with respect to projects it contracted to service abroad).
As a service contractor, it is not allowed to charge, directly or indirectly, any fee from
the workers except the authorized documentation fee of P1,500.

During the period of January 1984 to july 1986, the accused FC Construtction Co.
demanded and received from its applicants, herein private complainants numbering
about 22, various sums of money ranging from P1,500 to P8,500 in excess of the limits
set forth by law. The complainants, furthermore, were not able to work abroad, were no
able to issue travel documents and despite efforts, were not refunded the money paid
to and received by the accused.

The accused Roxas did not deny the receipts covering the different sums of money paid
by the private complainants. He reasoned out that the amount paid to and received by
him were for passporting and ticketing of the private complainants
Issue: Whether or not the accused is guilty of illegal recruitment.

Held: The court found that the excuse of the accused to be highly unjustified and
definitely unconvincing. Besides the accused has jumped bail, and despite the issuance
of the warrant of arrest, he has not been apprehended. As a matter of fact, he was tried
in absentia. The fundamental rule that the plight of the accused is consistent with his
guilt was made applicable to his case.

Accused is thereby guilty in violation of Article 32 of Labor Code; Fees to be paid by


workers. - Any person applying with a private fee-charging employment agency for
employment assistance shall not be charged any fee until he has obtained employment
through its efforts or has actually commenced employment. Such fee shall be always
covered with the appropriate receipt clearly showing the amount paid. The Secretary of
Labor shall promulgate a schedule of allowable fees.

PEOPLE V. REMULLO
G.R. NOS. 124443-46
JUNE 6, 2002
QUISUMBING, J.

Facts:
Nimfa Remullo by means of false pretenses and fraudulent representation made prior to
or with the commission of the fraud, with intent to defraud the complainant to the
effect that she would send her to abroad for the purpose of employment and would
need certain amount for the expenses in the processing of papers thereof, which
representations the accused well knew was false and fraudulent and was only made by
her to induce said complainant to give and pay, as in fact the latter gave and paid her to
the amount of P15,000which the accused once in possession of the said amount would
appropriate and convert to her own personal use and benefit, to the damage and
prejudice of the complainant.

Other complainants averred that they went to appellants house sometime in 1993
where they were told that she was recruiting for factory workers in Malaysia. They were
asked to fill up forms and go to the office of Jamila and Co., the recruimtnet agency
where Remullo worked, in addition, she even asked them to submit a passport, pictures
and clearance from the NBI and then undergo medical examination and a placement fee
which the appellant did not provide an official receipt.
Upon the scheduled flight, the complainants werent able to get on it and they were told
by Remullo that they lacked requirement imposed by POEA. Their passports were
cancelled and marked offloaded as it was also marked as for tourists only.
Private complainant Mejia inquired to Jamila and Co and found out that Remullo did not
submit any papers to their office and further certified that she was not authorized to
receive payments in behalf of the agency.
Issue: whether or not Remullo is guilty of the crime charged against her.

Held: Article 13 (b) of the Labor Code provides:


ART. 13. Definitions. xx
Recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contact
services, promising or advertising for employment, locally or abroad, whether for profit
or not: Provided, That any person or entity which, in any manner, offers or promises for
a fee employment to two or more persons shall be deemed engaged in recruitment and
placement.

The court is convinced that private complainants, the main witnesses for the
prosecution, were enticed by appellant to apply for jobs abroad. The three private
complainants filled up application forms at appellants house, and each paid appellant
the amount of P15,000 as placement fee. However, she acted without license or lawful
authority to conduct recruitment of workers for overseas placement. The POEAs
licensing branch issued a certification stating that appellant, in her personal capacity,
was not authorized to engage in recruitment activities. Evelyn Landrito, general
manager of the placement agency where appellant used to work, denied that the scope
of appellants work included recruiting workers and receiving placement fees. Such lack
of authority to recruit is also apparent from a reading of the job description of a
marketing consultant, the post that appellant occupied at Jamila and Co.

In the face of evidence pointing to her wrongdoing, appellant only offers denials, while
pointing to an alleged ill motive on the part of private complainants that prompted
them to testify against her. According to appellant, private complainants failed to find
the responsible parties, namely Steven Mah and his companion Lani Platon, and so are
now going after her.
Appellants arguments fail to persuade us of her innocence. The defense of denial is
intrinsically weak, a self-serving negative evidence that cannot prevail over the
testimony of credible witnesses who testified on affirmative matter.

Anent appellants conviction for estafa in Criminal Cases Nos. 95-654 to 95-656, we find
no error committed by the trial court. Their conviction and sentence are fully supported
by the evidence on record. For charges of estafa to prosper, the following elements
must be present: (1) that the accused defrauded another by abuse of confidence or by
means of deceit, and (2) that damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person. In this case, appellant clearly defrauded
private complainants by deceiving them into believing that she had the power and
authority to send them on jobs abroad. By virtue of appellants false representations,
private complainants each parted with their hard-earned money. Each complainant
paid P15,000 as recruitment fee to appellant, who then appropriated the money for her
own use and benefit, but failed utterly to provide overseas job placements to the
complainants. In a classic rigmarole, complainants were provided defective visas,
brought to the airport with their passports and tickets, only to be offloaded that day,
but with promises to be booked in a plane flight on another day. The recruits wait in
vain for weeks, months, even years, only to realize they were gypped, as no jobs await
them abroad. No clearer cases of estafa could be imagined than those for which
appellant should be held criminally responsible.

PEOPLE V. ANGELES
G.R. NO. 132376
APRIL 11, 2002
YNARES-SANTIAGO, J.

Facts:
Maria Tolosa Sardea was working in Saudi Arabia when she received a call from her
sister, Priscilla Agoncillo, who was in Paris, France. Priscilla advised Maria to return to
the Philippines and await the arrival of her friend, accused-appellant Samina Angeles,
who will assist in processing her travel and employment documents to Paris,
France. Heeding her sisters advice, Maria immediately returned to the Philippines.
Marceliano Tolosa who at that time was in the Philippines likewise received instructions
from his sister Priscilla to meet accused-appellant who will also assist in the processing
of his documents for Paris, France.

Although Samina did not deceive complainants into believing that she could find
employment for them abroad, nonetheless, she made them believe that she was
processing their travel documents and parted with their money believing also that it
would be used to pay plane tickets, hotel accommodations and other travel
requirements.

Issue: Whether or not Angeles is guilty with four (4) counts of estafa and one (1) count
of illegal recruitment.

Held: Accused-appellant posits that the prosecution did not present a single evidence to
prove that she promised or offered any of the complainants jobs abroad. Illegal
recruitment is committed when two (2) elements concur: 1) that the offender has no
valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and 2) that the offender undertakes either any
activity within the meaning of recruitment and placement defined under Article 13(b),
or any prohibited practices enumerated under Article 34.

Article 13(b), of the Labor Code provides, thus:


(b) Recruitment and placement refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment locally or abroad, whether
for profit or not: Provided, that any person or entity which, in any manner, offers or
promises for a fee employment to two or more persons shall be deemed engaged in
recruitment and placement.

To prove illegal recruitment, it must be shown that the accused-appellant gave


complainants the distinct impression that he had the power or ability to send
complainants abroad for work such that the latter were convinced to part with their
money in order to be employed. To be engaged in the practice of recruitment and
placement, it is plain that there must at least be a promise or offer of an employment
from the person posing as a recruiter whether locally or abroad.

Clearly, Samina Angeles defrauded complainants by falsely pretending to possess the


power and capacity to process their travel documents.

Article 315 of the Revised Penal Code imposes the penalty of prision correccional in its
maximum period to prision mayor in its minimum period, if the amount of the fraud is
over P12,000.00 but does not exceed P22,000.00; if the amount exceeds P22,000.00,
the penalty provided shall be imposed in its maximum period, adding one year for each
additional P10,000.00. However, the total penalty which may be imposed shall not
exceed twenty years.

ALMODIEL V. NLRC
G.R. NO. 100641
JUNE 14, 1993
NOCON, J.

Facts: Petitioner is a CPA hired as Cost Accounting Manager of Respondent Raytheon


Philippines, Inc. As such, his major duties were (1) plan, coordinate, and carry out year-
end physical inventory; (2) formulate and issue out hard copies of standard product
costing and other cost/pricing analysis if needed and required; and set up the written
cost accounting system for the whole company. However, when the standard cost
accounting system for Raytheon plans worldwide was adopted and installed in the
Philippine operations, the services of the petitioner was reduced to only the submission
of period reports that would use computerized forms prescribed and designed by the
international head office of the company in California, USA.

On January 27, 1989, petitioner was told of the abolition of his position on the ground of
redundancy. He was constrained to file the complaint for illegal dismissal after his
request to have him transferred to another department was denied. He also alleged that
the functions of his position were absorbed by the Payroll/MIS/Finance Department
which is headed by a resident alien without working permit from the DOLE.

ISSUE: Whether or not the termination of the petitioner on the ground of redundancy
was tainted with malice, bad faith and irregularity.
Held: Termination of an employee's services because of redundancy is governed by
Article 283 of the Labor Code which provides as follows:

Art. 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to installation of labor-saving devices,
redundancy, 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, by serving a written notice on the worker and the
Department of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to installation of labor-saving devices or redundancy,
the worker affected thereby shall be entitled to a separation pay equivalent to at least
one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closure or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses,
the separation pay shall be equivalent to at least one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. A fraction of at least six
(6) months shall be considered as one (1) whole year.

There is no dispute that petitioner was duly advised, one (1) month before, of the
termination of his employment on the ground of redundancy in a written notice by his
immediate superior
Raytheon had a broad latitude of discretion in abolishing his position. An employer has a
much wider discretion in terminating employment relationship of managerial personnel
compared to rank and file employees. The reason obviously is that officers in such key
positions perform not only functions which by nature require the employer's full trust
and confidence but also functions that spell the success or failure of an enterprise.
Article 40 of the Labor Code which requires employment permit refers to non-resident
aliens. The employment permit is required for entry into the country for employment
purposes and is issued after determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of application to perform the
services for which the alien is desired. Since Ang Tan Chai is a resident alien, he does not
fall within the ambit of the provision.

Finding no grave abuse of discretion on the part of the National Labor Relations
Commission in reversing and annulling the decision of the Labor Arbiter and that on the
contrary, the termination of petitioner's employment was anchored on a valid and
authorized cause under Article 283 of the Labor Code, the instant petition for certiorari
must fail.

DEE C. CHUAN AND SONS VS. COURT OF INDUSTRIAL RELATIONS


85 PHIL 431
JANUARY 31, 1950
TUASON, J.
FACTS: Dee C. Chuan & Sons, Inc. assails the validity of an order of the Court of
Industrial Relations. The order made upon petitioner's request for authority to hire"
about twelve(12) more laborers from time to time and on a temporary basis," contains
the proviso that "the majority of the laborers to be employed should be native." The
petition was filed pending settlement by the court of a labor dispute (strike) between
the petitioner and Kaisahan Ng Mga Manggagawa sa Kahoy sa Pilipinas. It is next said
that "The Court of Industrial Relations cannot intervene in questions of selection of
employees and workers so as to impose unconstitutional restrictions," and that "The
restrictions of the number of aliens that may be employed in any business, occupation,
trade or profession of any kind, is a denial of the equal protection of the laws." Although
the brief does not name the persons who are supposed to be denied the equal
protection of the laws, it is clearly to be inferred that aliens in general are in petitioner's
mind. Certainly, the order does not, directly or indirectly, immediately or remotely,
discriminate against the petitioner on account of race or citizenship. The order could
have been issued in a case in which the employer was a Filipino. As a matter of fact the
petitioner insists that 75 % of its shares of stock are held by Philippine citizens, a
statement which is here assumed to be correct.

ISSUE:Whether or not the order of CIR is valid and constitutional?

RULING:
Yes. Costs against petitioners. Ratio. An alien may question the constitutionality of a
statute (or court order) only when and so far as it is being, or is about to be, applied to
his disadvantage. (16 C.J.S. 157 et seq.) The prospective employees whom the petitioner
may contemplate employing have not come forward to seek redress; their identity has
not even been revealed. Clearly the petitioner has no case in so far as it strives to
protect the rights of others, much less others who are unknown and undetermined. We
are of the opinion that the order under consideration meets the test of reasonableness
and public interest. The passage of Commonwealth Act No. 103 was "in conformity with
the constitutional objective and . . . the historical fact that industrial and agricultural
disputes have given rise to disquietude, bloodshed and revolution in our country."
(Antamok Goldfields Mining Co. vs. Court of Industrial Relations, 40 Off. Gaz., 8th Supp.,
173.)

NITTO ENTERPRISES VS. NLRC AND R. CAPILI


G.R. NO. 114337
SEPT. 29, 1995
KAPUNAN, J.

FACTS: Petitioner Nitto Enterprises, a company engaged in the sale of glass and
aluminum products, hired Roberto Capili sometime in May 1990 as an apprentice
machinist, molder and core maker as evidenced by an apprenticeship agreement 2for a
period of six (6) months from May 28, 1990 to November 28, 1990 with a daily wage
rate of P66.75 which was 75% of the applicable minimum wage. On August 2, 1990,
Roberto Capili who was handling a piece of glass which he was working on, accidentally
hit and injured the leg of an office secretary who was treated at a nearby hospital.
Further, Capili entered a workshop within the office premises which was not his work
station. There, he operated one of the power press machines without authority and in
the process injured his left thumb. The following day he was asked to resign. Three days
after, , private respondent formally filed before the NLRC Arbitration Branch, National
Capital Region a complaint for illegal dismissal and payment of other monetary benefits.
The Labor Arbiter rendered his decision finding the termination of private respondent as
valid and dismissing the money claim for lack of merit. On appeal, NLRC issued an order
reversing the decision of the Labor Arbiter. The NLRC declared that Capili was a regular
employee of Nitto Enterprises and not an apprentice. Consequently, Labor Arbiter
issued a Writ of Execution ordering for the reinstatement of Capili and to collect this
back wages. Petitioner, Nitto Enterprises filed a case to the Supreme Court.

ISSUE:
Does the NLRC correctly rule that Capili is a regular employee and not an apprentice of
Nitto Enterprises?

RULING:
Yes. The apprenticeship agreement between petitioner and private respondent was
executed on May 28, 1990 allegedly employing the latter as an apprentice in the trade
of "care maker/molder. However, the apprenticeship Agreement was filed only on June
7, 1990.Notwithstanding the absence of approval by the Department of Labor and
Employment, the apprenticeship agreement was enforced the day it was signed. The act
of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step toward sits final approval and does not
instantaneously give rise to an employer-apprentice relationship.
Nitto Enterprises did not comply with the requirements of the law. It is mandated that
apprenticeship agreements entered into by the employer and apprentice shall be
entered only in accordance with the apprenticeship program duly approved by the
Minister of Labor and Employment. Thus, the apprenticeship agreement has no force
and effect; and Capili is considered to be a regular employee of the company.

FILAMER CHRISTIAN INSTITUTE VS. HON. INTERMEDIATE APELLATE COURT


G.R. NO. 75112
AUGUST 17, 1992
GUTIERREZ, JR., J.

FACTS: Daniel Funtecha was a working student of Filamer. He was assigned as the school
janitor to clean the school 2 hours every morning. Allan Masa was the son of the school
president and at the same time he was the schools jeepney service driver. On October
20, 1977 at about 6:30pm, after driving the students to their homes, Masa returned to
the school to report and thereafter have to go home with the jeep so that he could fetch
the students early in the morning. Masa and Funtecha live in the same place so they
usually go home together. Funtecha had a student drivers license so Masa let him take
the drivers seat. While Funtecha was driving, he accidentally hit an elderly Kapunan
which led to his hospitalization for 20 days. Kapunan filed a criminal case and an
independent civil action based on Article 2180 against Funtecha.
In the independent civil action, the lower court ruled that Filamer is subsidiarily liable
for the tortious act of Funcheta and was compelled to pay for damages based on Article
2180 which provides that employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks.
Filamer assailed the decision and it argued that under Section 14, Rule X, Book III of the
Labor Code IRR, working scholars are excluded from the employment coverage hence
there is no employer-employee relations between Filamer and Funcheta; that the
negligent act of Funcheta was due to negligence only attributable to him alone as it is
outside his assigned task of being the school janitor. The CA denied Filamers appeal but
the Supreme Court agreed with Filamer. Kapunan filed for a motion for reconsideration.

ISSUE: Whether or not Filamer should be held subsidiarily liable.

HELD: Yes. This time, the SC ruled in favor of Kapunan (actually his heirs cause by this
time Kapunan was already dead). The provisions of Section 14, Rule X, Book III of the
Labor Code IRR was only meant to provide guidelines as compliance with labor
provisions on working conditions, rest periods, and wages is concerned. This does not in
any way affect the provisions of any other laws like the civil code. The IRR cannot defeat
the provisions of the Civil Code. In other words, Rule X is merely a guide to the
enforcement of the substantive law on labor.

There is a distinction hence Section 14, Rule X, Book III of the Rules is not the decisive
law in a civil suit for damages instituted by an injured person during a vehicular accident
against a working student of a school and against the school itself.

The present case does not deal with a labor dispute on conditions of employment
between an alleged employee and an alleged employer. It invokes a claim brought by
one for damages for injury caused by the patently negligent acts of a person, against
both doer-employee and his employer. Hence, the reliance on the implementing rule on
labor to disregard the primary liability of an employer under Article 2180 of the Civil
Code is misplaced. An implementing rule on labor cannot be used by an employer as a
shield to void liability under the substantive provisions of the Civil Code.

Funtecha is an employee of Filamer. He need not have an official appointment for a


drivers position in order that Filamer may be held responsible for his grossly negligent
act, it being sufficient that the act of driving at the time of the incident was for the
benefit of Filamer (the act of driving the jeep from the school to Masas house is
beneficial to the school because this enables Masa to do a timely school transportation
service in the morning). Hence, the fact that Funtecha was not the school driver or was
not acting with the scope of his janitorial duties does not relieve Filamer of the burden
of rebutting the presumption juris tantum that there was negligence on its part either in
the selection of a servant or employee, or in the supervision over him. Filamer has failed
to show proof of its having exercised the required diligence of a good father of a family
over its employees Funtecha and Allan.

BROTHERHOOD LABOR UNITY MOVEMENT OF THE PHILIPPINES VS. ZAMORA


G.R. NO. 48645
JANUARY 7, 1987
GUTIERREZ, JR., J.

FACTS:
Unrebutted evidence and testimony on record establish that the petitioners are
workers who have been employed at the San Miguel Parola Glass Factory since 1961,
averaging about seven (7) years of service at the time of their termination. They
worked as "cargadores" or "pahinante" at the SMC Plant loading, unloading, piling or
palleting empty bottles and woosen shells to and from company trucks and
warehouses. At times, they accompanied the company trucks on their delivery routes.
The petitioners worked exclusive at the SMC plant, never having been assigned to
other companies or departments of SMC plant, even when the volume of work was at
its minimum. On February 20, 1969, all the petitioners were dismissed from their jobs
and, thereafter, denied entrance to respondent company's glass factory despite their
regularly reporting for work. A complaint for illegal dismissal and unfair labor practice
was filed by the petitioners.

ISSUES: San Miguel refused to bargain with the petitioner union alleging that the
workers are not their employees. The elemental question in labor law of whether or
not an employer-employee relationship exists between petitioners-members of the
"Brotherhood Labor Unit Movement of the Philippines"(BLUM) and respondent San
Miguel Corporation, is the main issue in this petition.

DECISION:
The petition is granted. The San Miguel Corporation is ordered to reinstate
petitioners, with three(3) years backwages. However, where reinstatement is no
longer possible, the respondent SMC is ordered to pay the petitioners separation pay
equivalent to one (1) month pay for every year of service.

TABAS ET., AL VS. CALIFORNIA MANUFACTURING CO. ET., AL


G.R. NO. L-80680
JANUARY 26, 1989
SARMIENTO, J.

FACTS: The petitioners petitioned the National Labor Relations Commission for
reinstatement and payment of various benefits, including minimum wage, overtime pay,
holiday pay, thirteen-month pay, and emergency cost of living allowance pay, against
the respondent, the California Manufacturing Company. California denied the existence
of an employer-employee relation between the petitioners and the company and
impleaded Livi Manpower Services, Inc. as a party-respondent.

The petitioners were then made to sign employment contracts with durations of six
months, upon the expiration of which they signed new agreements with the same
period. Pending proceeding they were notified by California that they would not be
rehired. As a result, they filed an amended complaint charging California with illegal
dismissal.

ISSUE: Whether or not there exist an employee-employer relationship between


petitioners and California Manufacturing Company

HELD:
Yes. The existence of an employer-employees relation is a question of law and being
such, it cannot be made the subject of agreement. Hence, the fact that the manpower
supply agreement between Livi and California had specifically designated the former as
the petitioners' employer and had absolved the latter from any liability as an employer,
will not erase either party's obligations as an employer, if an employer-employee
relation otherwise exists between the workers and either firm. At any rate, since the
agreement was between Livi and California, they alone are bound by it, and the
petitioners cannot be made to suffer from its adverse consequences.

The Court has consistently ruled that the determination of whether or not there is an
employer-employee relation depends upon four standards: (1) the manner of selection
and engagement of the putative employee; (2) the mode of payment of wages; (3) the
presence or absence of a power of dismissal; and (4) the presence or absence of a
power to control the putative employee's conduct. Of the four, the right-of-control test
has been held to be the decisive factor.

SEVILLA VS. CA
G.R. NO. L-44182-3
APRIL 15, 1988
SARMIENTO, J.

FACTS: The petitioners invoke the provisions on human relations of the Civil Code in this
appeal by certiorari. Mrs. Segundina Noguera, party of the first part; the Tourist World
Service, Inc., represented by Mr. Eliseo Canilao as party of the second part, and
hereinafter referred to as appellants, the Tourist World Service, Inc. leased the premises
belonging to the party of the first part at Mabini St., Manila for the former-s use as a
branch office. In the said contract the party of the third part held herself solidarily liable
with the party of the part for the prompt payment of the monthly rental agreed on.
When the branch office was opened, the same was run by the herein appellant Una 0.
Sevilla payable to Tourist World Service Inc. by any airline for any fare brought in on the
efforts of Mrs. Lina Sevilla, 4% was to go to Lina Sevilla and 3% was to be withheld by
the Tourist World Service, Inc.

On November 24, 1961 the Tourist World Service, Inc. appears to have been informed
that Lina Sevilla was connected with a rival firm, the Philippine Travel Bureau, and, since
the branch office was anyhow losing, the Tourist World Service considered closing down
its office. On June 17,1963, appellant Lina Sevilla refiled her case against the herein
appellees and after the issues were joined, the reinstated counterclaim of Segundina
Noguera and the new complaint of appellant Lina Sevilla were jointly heard following
which the court ordered both cases dismiss for lack of merit.
In her appeal, Lina Sevilla claims that a joint bussiness venture was entered into by and
between her and appellee TWS with offices at the Ermita branch office and that she was
not an employee of the TWS to the end that her relationship with TWS was one of a
joint business venture appellant made declarations.

ISSUE: Whether or not the padlocking of the premises by the Tourist World Service, Inc.
without the knowledge and consent of the appellant Lina Sevilla entitled the latter to
the relief of damages prayed for and whether or not the evidence for the said appellant
supports the contention that the appellee Tourist World Service, Inc. unilaterally and
without the consent of the appellant disconnected the telephone lines of the Ermita
branch office of the appellee Tourist World Service, Inc.?

HELD: The trial court held for the private respondent on the premise that the private
respondent, Tourist World Service, Inc., being the true lessee, it was within its
prerogative to terminate the lease and padlock the premises. It likewise found the
petitioner, Lina Sevilla, to be a mere employee of said Tourist World Service, Inc. and as
such, she was bound by the acts of her employer. The respondent Court of Appeal
rendered an affirmance.

In this jurisdiction, there has been no uniform test to determine the evidence of an
employer-employee relation. In general, we have relied on the so-called right of control
test, "where the person for whom the services are performed reserves a right to control
not only the end to be achieved but also the means to be used in reaching such end."
Subsequently, however, we have considered, in addition to the standard of right-of
control, the existing economic conditions prevailing between the parties, like the
inclusion of the employee in the payrolls, in determining the existence of an employer-
employee relationship.

CONTINENTAL MARBLE CORPORATION VS. NLRC


G.R. NO. L-43825
MAY 9, 1988
PADILLA, J.

FACTS: Private respondent Rodito Nasayao claimed that sometime in May 1974, he was
appointed plant manager of the petitioner corporation, with an alleged compensation of
P3,000.00, a month, or 25% of the monthly net income of the company, whichever is
greater, and when the company failed to pay his salary for the months of May, June, and
July 1974, Rodito Nasayao filed a complaint with the National Labor Relations
Commission, Branch IV, for the recovery of said unpaid varies. Petitioners denied that
Rodito Nasayao was employed in the company as plant manager with a fixed monthly
salary of P3,000.00. They claimed that the undertaking agreed upon by the parties was a
joint venture, a sort of partnership, wherein Rodito Nasayao was to keep the machinery
in good working condition and, in return, he would get the contracts from end-users for
the installation of marble products, in which the company would not interfere. In
addition, private respondent Nasayao was to receive an amount equivalent to 25% of
the net profits that the petitioner corporation would realize, should there be any.
Petitioners alleged that since there had been no profits during said period, private
respondent was not entitled to any amount.

The case was submitted for voluntary arbitration and the parties selected the herein
respondent Jose T. Collado as voluntary arbitrator. In the course of the proceedings,
however, the herein petitioners challenged the arbitrators capacity to try and decide
the case fairly and judiciously and asked him to desist from further hearing the case.
But, the respondent arbitrator refused. In due time, or on 29 December 1975, he
rendered judgment in favor of the complainant, ordering the herein petitioners to pay
Rodito Nasayao the amount of P9,000.00, within 10 days from notice.

ISSUE: Whether or not Voluntary Arbitration award, generally final or there are
exceptions?

HELD: A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial


capacity. There is no reason why her decisions involving interpretation of law should be
beyond this Courts review. Administrative officials are presumed to act in accordance
with law and yet we do hesitate to pass upon their work where a question of law is
involved or where a showing of abuse of authority or discretion in their official acts is
properly raised in petitions for certiorari.
The decisions of the voluntary arbitrators must be given the highest respect and as a
general rule must be accorded a certain measure of finality. This is especially true where
the arbitrator chosen by the parties enjoys first rate credentials. It is not correct
however, that this respect precludes the exercise of judicial review over their decisions.
In spite of statutory provisions making final the decisions of certain administrative
agencies, the SC may take cognizance of petitions questioning these decisions where
want of jurisdiction, grave abuse of discretion, violation of due process, denial of
substantial justice, or erroneous interpretation of the law are brought to its attention.

ENCYCLOPEDIA BRITANNICA INC. VS. NLRC


G.R. NO. 87098
NOV. 4, 1996
TORRES, JR., J.

FACTS: Private respondent was a sales division manager of private petitioner and was in
charge of selling the latters products through sales representatives. As compensation,
private respondent receive commissions from the products sold by his agents. After
resigning from office to pursue his private business, he filed a complaint against the
petitioner, claiming for non-payment of separation pay and other benefits.
Petitioner alleged that complainant was not its employee but an independent dealer
authorized to promote and sell its products and in return, received commissions
therefrom. Petitioner did not have any salary and his income from petitioner was
dependent on the volume of sales accomplished. He had his own office, financed the
business expense, and maintained his own workforce. Thus petitioner argued that it had
no control and supervision over the complainant as to the manner and means he
conducted his business operations. The Labor Arbiter ruled that complainant was an
employee of the petitioner company.

Petioner had control over the complainant since the latter was required to make
periodic reports of his sales activities to the company.

ISSUE: Whether or not there exists an employer-employee relationship.

HELD: No. Control of employees conduct is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee
relationship. Under this, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching that end. The fact that
petitioner issued memoranda to private respondent and to other division sales
managers did not prove that petitioner had actual control over them. The different
memoranda were merely guidelines on company policies which the sales managers
follow and impose on their respective agents.

DY KEH BENG VS. INTERNATIONAL LABOR AND MARINE UNION ET., AL.
G.R NO. L-32245
MAY 25, 1979
DE CASTRO, J.

FACTS: A charge for ULP was filed against Dy Keh beng for discriminatory acts within the
meaning of RA 875, Section 4(a.1) and 4(a.2) by dismissing Carlos N. Solano and Ricardo
Tudla for their union activities. A case was filed in court and Dy Keh Beng contended
that he did not know Tudla and that Solano was not his employee because the latter
came to the establishment only when there was work which he did on pakiaw basis,
each piece of work being done under a separate contract. The CIR held that an Er-Ee
relationship existed between Dy Keh Beng and complainants Tudla and Solano, although
Solano was admitted to have worked on piece basis. Petitioner anchors his contention
of the non-existence of employee-employer relationship on the control test., arguing
that there was no evidence to show that petitioner had the right to direct the manner
and method of respondents work.

ISSUE: Whether or not there existed an employee-employee relation between


petitioner Dy Keh Beng and respondents Solano and Tudla.

HELD: The Court held in the affirmative. According to the Hearing Examiner, the
evidence tended to show that the two became employees of Dy Keh Beng from 1953
and 1955, respectively, and that except in the event of illness, their work with the
establishment was continuous although their services were compensated on piece
basis. It should be borne in mind that the control test calls merely for the existence of
the right to control the manner of doing the work, not the actual exercise of the right.
Considering that the establishment of Dy Keh Beng is engaged in the manufacture of
baskets known as kaing, it is natural to expect that those working under Dy Keh Beng
would have to observe, among others, Dys requirements of size and quality of the
kaing.

ZANOTTE SHOES VS. NLRC


G.R. NO. 100665
FEB. 13, 1995
VITUG, J.

FACTS: Private respondents Joseph Lluz, et. al averred that they started to work for
petitioners Zanotte Shoes/ Leonardo Lorenzo between 1975 to 1987. They alleged that
they worked for a minimum of 12 hours daily, including Sundays and holidays when
needed and that they were paid on piece-work basis. Private respondents claimed that
it angered petitioner Lorenzo when they requested to be made members of the SSS and
that when they demanded an increase in their pay rates, they were prevented from
entering the work premises. Private respondents filed a complaint for illegal discharge
against petitioners. Petitioners, in their Answer, claim that their business operations
were only seasonal, normally twice a year- one in June and another in December, when
heavy job orders would come in. They contend that private respondents were engaged
on purely contractual basis and paid the rates conformably with their respective
agreements. The Labor Arbiter rendered judgment in favor of private respondents. He
declared that there was an employer-employee relationship between petitioners and
private respondents and that the latter were regular employees of the former. The
Labor Arbiter concluded that there is neither dismissal nor abandonment, but ordered
petitioners to pay the private respondents their separation pay. The NLRC, on appeal,
affirmed the Labor Arbiters decision.

ISSUE: Whether or not there is an employer-employee relationship between petitioners


and private respondents.

HELD: YES. There is an employer-employee relationship between petitioners and private


respondents. The work of private respondents is clearly related to and in the pursuit of
the principal activity of the petitioners. The indicia used for determining the existence of
an employer-employee relationship, all extant in the case at bench, include: (1) the
selection and engagement of the employee, (2) the payment of wages, (3) the power of
dismissal, and(4)the employers power to control the employee with respect to the
result of the work to be done and to the means and methods by which the work is to be
accomplished. The last requirement, so herein posed as an issue, refers to the existence
of the right to control and not necessarily to the actual exercise of the right. The Court,
however, finds the award of separation pay to be unwarranted. The Labor Arbiter,
sustained by the NLRC, concluded that there was neither dismissal nor abandonment.
The fact of the matter is that petitioners have repeatedly indicated their willingness to
accept the private respondents, but the latter have steadfastly refused the offer. For
being without any clear legal basis, the award of separation pay must thus be set aside.
There is nothing, however, that prevents petitioners from voluntarily giving private
respondents some amounts on ex gratia basis.

AIR MATERIAL WING SAVINGS AND LOAN ASSOCIATION INC., VS. NLRC
G.R. NO. L -11870
JUNE 30, 1994
CONCEPCION, J.

FACTS: Private respondent Luis S. Salas was appointed "notarial and legal counsel" for
petitioner AirMaterial Wings Savings and Loan Association in 1980. The appointment
was renewed for three years in an implementing order dated January 23, 1987.
Subsequently, on January 9, 1990, the petitioner issued another order reminding Salas
of the approaching termination of his legal services under their contract. This prompted
Salas to lodge a complaint against AMWSLAI for separation pay, vacation and sick leave
benefits, cost of living allowances, refund of SSS premiums, moral and exemplary
damages, payment of notarial services rendered from February 1, 1980 to March 2,
1990, and attorney's fees. Instead of filing an answer, AMWSLAI moved to dismiss for
lack of jurisdiction. It averred that there was no employer-employee relationship
between it and Salas and that his monetary claims properly fell within the jurisdiction of
the regular courts. Salas opposed the motion and presented documentary evidence to
show that he was indeed an employee of AMWSLAI.
Nevertheless, most of Salas' claims were dismissed by the labor arbiter in his decision
dated November 21, 1991.It was there held that Salas was not illegally dismissed and so
not entitled to collect separation benefits. His claims for vacation leave, sick leave,
medical and dental allowances and refund of SSS premiums were rejected on the
ground that he was a managerial employee. He was also denied moral and exemplary
damages for lack of evidence of bad faith on the part of AMWSLAI. Neither was he
allowed to collect his notarial fees from 1980 up to 1986 because the claim therefore
had already prescribed. However, the petitioner was ordered to pay Salas his notarial
fees from 1987 up to March 2,1990, and attorney's fee equivalent to 10% of the
judgment award. On appeal, the decision was affirmed in toto by the respondent
Commission, prompting the petitioner to seek relief in the Supreme Court, hence, the
case at bar.

ISSUE: Whether or not Salas can be considered an employee of the petitioner


company?

RULING: The Supreme Court had held in a long line of decisions that the elements of an
employer-employee relationship are: (1) selection and engagement of the employee; (2)
payment of wages; (3)power of dismissal; and (4) employer's own power to control
employee's conduct. The terms and conditions set out in the letter-contract entered
into by the parties on January23, 1987, clearly show that Salas was an employee of the
petitioner. His selection as the company counsel was done by the board of directors in
one of its regular meetings. The petitioner paid him a monthly compensation/retainer's
fee for his services. Though his appointment was for a fixed term of three years, the
petitioner reserved its power of dismissal for cause or as it might deem necessary for its
interest and protection. No less importantly, AMWSLAI also exercised its power of
control over Salas by defining his duties and functions as its legal counsel, to wit: (1) To
act on all legal matters pertinent to his Office; (2) To seek remedies to effect collection
of overdue accounts of members without prejudice to initiating court action to protect
the interest of the association; and (3) To defend by all means all suit against the
interest of the Association.

HYDRO RESOURCES CONTRACTORS CORP. VS. PAGALILAUAN


172 SCRA 399
APRIL 18, 1989
GUTIERREZ, JR., J.

FACTS: Petitioner corporation hired the private respondent Aban as its "Legal Assistant"
and received basic monthly salary of P1,500.00 plus an initial living allowance of P50.00
which gradually increased to P320.00. On September 4, 1980, Aban received a letter
from the corporation informing him that he would be considered terminated effective
October 4, 1980 because of his alleged failure to perform his duties well.

Aban filed a complaint against the petitioner for illegal dismissal. The labor arbiter ruled
that Aban was illegally dismissed. This ruling was affirmed by the NLRC on appeal.
Hence, this present petition.

ISSUE: Whether or not there was an employer-employee relationship between the


petitioner corporation and Aban.

HELD: The Supreme Court dismissed the petition for lack of merit, and reinstate Aban to
his former or a similar position without loss of seniority rights and to pay three (3) years
backwages without qualification or deduction and P5,000.00 in attorney's fees. Should
reinstatement not be feasible, the petitioner shall pay the private respondent
termination benefits in addition to the above stated three years backpay and P5,000.00
attorney's fees.

A lawyer, like any other professional, may very well be an employee of a private
corporation or even of the government. This Court has consistently ruled that the
determination of whether or not there is an employer-employee relation depends upon
four standards: (1) the manner of selection and engagement of the putative employee;
(2) the mode of payment of wages; (3) the presence or absence of a power of dismissal;
and (4) the presence or absence of a power to control the putative employee's conduct.
Of the four, the right-of-control test has been held to be the decisive factor.
In this case, Aban received basic salary plus living allowance, worked solely for the
petitioner, dealt only with legal matters involving the said corporation and its
employees and also assisted the Personnel Officer in processing appointment papers of
employees which is not act of a lawyer in the exercise of his profession. These facts
showed that petitioner has the power to hire and fire the respondent employee and
more important, exercised control over Aban by defining the duties and functions of his
work which met the four standards in determining whether or not there is an employee-
employer relationship.

INSULAR ASSURANCE CO. VS. NLRC


G.R. NO. 119930
MARCH 12, 1998
BELLOSILLO, J
.
FACTS: Since 1968, respondent Basiao has been an agent for petitioner company, and is
authorized to solicit within the Philippines applications for insurance policies and
annuities in accordance with the existing rules and regulations of the company. In
return, he would receive compensation, in the form of commissions.
Some four years later, in April 1972, the parties entered into another contract an
Agency Manager's Contract and to implement his end of it Basiao organized an
agency or office to which he gave the name M. Basiao and Associates, while
concurrently fulfilling his commitments under the first contract with the Company. In
May, 1979, the Company terminated the Agency Manager's Contract. After vainly
seeking a reconsideration, Basiao sued the Company in a civil action and this, he was
later to claim, prompted the latter to terminate also his engagement under the first
contract and to stop payment of his commissions starting April 1, 1980.

Basiao thereafter filed with the then Ministry of Labor a complaint against the Company
and its president. The complaint sought to recover commissions allegedly unpaid
thereunder, plus attorney's fees. The respondents disputed the Ministry's jurisdiction
over Basiao's claim, asserting that he was not the Company's employee, but an
independent contractor.

ISSUE: Whether or not there exist an employer-employee relationship between Basiao


and Insular Life?

HELD: The SC ruled in favor of Insular Life.


Not every form of control that the hiring party reserves to himself over the conduct of
the party hired in relation to the services rendered may be accorded the effect of
establishing an employer-employee relationship between them in the legal or technical
sense of the term

ANGELINA FRANCISCO VS. NLRC, KASEI CORP. ETC.


G.R. NO. 170087
AUGUST 31, 2006
YNARES-SANTIAGO, J.

FACTS:
Petitioner was hired by Kasei Corporation during the incorporation stage. She was
designated as accountant and corporate secretary and was assigned to handle all the
accounting needs of the company. She was also designated as Liason Officer to the City
of Manila to secure permits for the operation of the company.

In 1996, Petitioner was designated as Acting Manager. She was assigned to handle
recruitment of all employees and perform management administration functions. In
2001, Liza Fuentes replaced her as Manager. Kasei Corporation reduced her salary
toP2,500 per month which was until September. She asked for her salary but was
informed that she was no longer connected to the company. She did not anymore
report to work since she was not paid for her salary. She filed an action for constructive
dismissal with the Labor Arbiter.

The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed the
decision while CA reversed it.

ISSUE:
Whether or not there was employer-employee relationship.

HELD:
Petitioner is an employee of Kasei Corporation.

The court held that in this jurisdiction, there has been no uniform test to determine the
existence of an employer-employee relation. Generally, courts have relied on the so-
called right of control test where the person for whom the services are performed
reserves aright to control not only the end to be achieved but also the means to be used
in reaching such end. In addition to the standard of right-of-control, the existing
economic conditions prevailing between the parties, like the inclusion of the employee
in the payrolls, can help in determining the existence of an employer-employee
relationship.

The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employers power to control the employee with respect to the means and
methods by which the work is to be accomplished; and (2) the underlying economic
realities of the activity or relationship.

Petitioner was selected and engaged by the company for compensation, and is
economically dependent upon respondent for her continued employment in that line
of business. There is no doubt that petitioner is an employee of Kasei Corporation
because she was under the direct of it.

OPULENCIA ICE PLANT VS. NLRC


G.R. NO. 98368
DECEMBER 15, 1993
BELLOSILLO, J.

FACTS:
Manuel P. Esita was a compressor operator of Tiongson Ice Plant in San Pablo City (for
20 years). In 1980 he was hired as compressor operator-mechanic for the ice plants of
petitioner Dr. Melchor Opulencia located in Tanauan, Batangas, and Calamba, Laguna.
Initially assigned at the ice plant in Tanauan, Esita would work from seven o'clock in the
morning to five o'clock in the afternoon receiving a daily wage of P35.00. In 1986, Esita
was transferred to the ice plant in Calamba, which was then undergoing overhauling,
taking the place of compressor operator Lorenzo Eseta, who was relieved because he
was already old and weak. For less than a month, Esita helped in the construction-
remodeling of Dr. Opulencia's house. In February 1989, for demanding the correct
amount of wages due him, Esita was dismissed from service. Consequently, he filed with
Sub-Regional Arbitration in San Pablo City, a complaint for illegal dismissal,
underpayment, non-payment for overtime, legal holiday, premium for holiday and rest
day, 13th month, separation/retirement pay and allowances against petitioners.

ISSUE:
Whether or not there was an employee-employer relationship between Opulencia and
Esita.

HELD:
Yes. Because no particular form of evidence is required to prove the existence of an
employer-employee relationship. Any competent and relevant evidence to prove the
relationship may be admitted. For, if only documentary evidence would be required to
show that relationship, no scheming employer would ever be brought before the bar of
justice, as no employer would wish to come out with any trace of the illegality he has
authored considering that it should take much weightier proof to invalidate a written
instrument.
On the claim that Esita's construction work could not ripen into a regular employment in
the ice plant because the construction work was only temporary and unrelated to the
ice-making business, needless to say, the one month spent by Esita in construction is
insignificant compared to his nine-year service as compressor operator in determining
the status of his employment as such, and considering further that it was Dr. Opulencia
who requested Esita to work in the construction of his house.

In allowing Esita to stay in the premises of the ice plant and permitting him to cultivate
crops to augment his income, there is no doubt that petitioners should be commended;
however, in view of the existence of an employer-employee relationship as found by
public respondents, we cannot treat humanitarian reasons as justification for
emasculating or taking away the rights and privileges of employees granted by law.
Benevolence, it is said, does not operate as a license to circumvent labor laws. If
petitioners were genuinely altruistic in extending to their employees privileges that are
not even required by law, then there is no reason why they should not be required to
give their employees what they are entitled to receive.

Moreover, as found by public respondents, Esita was enjoying the same privileges
granted to the other employees of petitioners, so that in thus treating Esita, he cannot
be considered any less than a legitimate employee of petitioners.

DOMASIG VS. NLRC


G.R. NO. 118101
SEPTEMBER 16, 1996
PADILLA, J.

FACTS:

Domasig filed a complained against CATA Garments Corporation for illegal dismissal,
unpaid commission and other monetary claimed. He alleged that he was dismissed
when CATA learned that a rival company pirated him. CATA claimed that he is not a
regular employee but a mere commission agent who receives commission (no regular
time schedule). Petitioner submitted his ID and cash vouchers reflecting salary
payments. Labor Arbiter ruled in favor of Domasig but NLRC reversed such ruling.

ISSUE:

Whether or not there exist an employee-employer relationship.

HELD:

Yes. Substantial evidences: In a business establishment, an identification card is usually


provided not only as a security measure but mainly to identify the holder thereof as a
bona fide employee of the firm that issues it. Together with the cash vouchers covering
petitioners salaries for the months stated therein. Petitioner employed by CATA for
more than 1 year.
EQUITABLE BANKING CORPORATION VS. NLRC AND R.L SADAC
G.R. NO. 102467
JUNE 13, 1997
VITUG, J.

FACTS:
Atty. Sadac was appointed as VP for the Legal Department of Equitable. Nine lawyers,
members of the said department, filed a letter-petition for Sadacs abusive conduct,
mismanagement, ineffectiveness and indecisiveness. They warned that they would
resign en masse if Atty. Sadac were retained in his position. The Board asked Sadac to
voluntarily resign rather than conduct a formal hearing to terminate him. Atty. Sadac
filed a complaint for illegal dismissal and damages.

ISSUE:
Whether or not there is employee-employer relationship.

HELD:
Yes. Aside from his work as VP, he was also working under the supervision of the
President and Board of Directors. As employed for 8 years, Atty. Sadac received pay slips
for monthly salaries. The bank withheld his taxes with BIR. The bank also enrolled him as
employee under the SSS and Medicare programs. He contributed to Equitables
Employees Provident Fund. A lawyer, like any other professional, may work in a
company and be employed as a regular employee.

The Court resolved first the issue of employee-employer relationship and ruled in the
affirmative on the ground that private respondent participated as part of management
and is one of its senior officers holding the position of Vice-President. Upon finding that
private respondent is an employee of petitioner, the latter violated the right to due
process of private respondent when the latter's request of full hearing was not granted.
While it is true that the essence of due process is simply an opportunity to be heard or,
as applied in administrative proceedings, an opportunity to explain one's side, meetings
in the nature of consultation and conferences such as the case here, however, may not
be valid substitutes for the proper observance of notice and hearing. However,
reinstatement, which is the consequence of illegal dismissal, has markedly been
rendered undesirable. Private respondent shall, instead, be entitled to back wages from
the time of his dismissal until reaching sixty years of age and, thereupon, to retirement
benefits in accordance with Article 287 of the Labor Code and Sec 14, Rule 1, Book VI of
the Implementing rules of the Labor Code.

ZAMUDIO VS. NLRC


G.R. NO. 76723
MARCH 25, 1990

FACTS:
Petitioners rendered services essential for the cultivation of respondents farm. While
the services were not continuous in the sense that they were not rendered everyday
throughout the year, as is the nature of farm work, petitioners had never stopped
working for respondent from year to year from the time he hired them to the time he
dismissed.

ISSUE:
Whether or not the petitioners are considered employees so that employee-employer
relationship may exist.

HELD:
The nature of their employment, i.e. Pakyao basis, does not make petitioner
independent contractors. Pakyao workers are considered employees as long as the
employer exercises control over the means by which such workers are to perform their
work inside private respondents farm, the latter necessarily exercised control over the
performed by petitioners.

The seasonal nature of petitioners work does not detract from the conclusion that
employer employee relationship exits. Seasonal workers whose work is not merely for
the duration of the season, but who are rehired every working season are considered
regular employees. The circumstances that petitioners do not appear in respondents
payroll do not destroy the employer employee relationship between them. Omission
of petitioners in the payroll was not within their control; they had no hand in the
preparation of the payroll. This circumstance, even if true, cannot be taken against
petitioners.

PAGUIO VS. NLRC


G.R. NO. 147816
MAY 9, 2003
VITUG, J.

FACTS:
Metro Times Corporation, publisher of "The Manila times" hired petitioner as account
executive tasked to solicit advertisements for the said newspaper. In return he will
receive commission equivalent to 15% on direct advertisements subject to tax
deductions. Furthermore he receives a monthly allowance of 2000 if he meets the
quota. On August 15, 1992 barely 2 months after the fifth renewal of his contract with
the company he was informed about his termination based on accusations not clearly
established. In their contract, there is a stipulation, which states that petitioner in not
an employee of the company. Moreover, it states that either party may terminate the
contract after 30 days notice. Respondent filed a complaint for illegal dismissal. Labor
Arbiter found respondent company liable for illegal dismissal and ordered the
reinstatement of the petitioner. On appeal NLRC reversed the decision affirmed in toto
by CA, hence the appeal.

ISSUES:
Whether or not petitioner is an employee of the said company.
Whether or not the dismissal was proper.

HELD:
The prime question here is whether petitioner is a regular employee or not. A regular
employee is one who is engaged to perform activities, which are necessary and
desirable in the usual business or trade of the employer as against those which are
undertaken for a specific project or are seasonal. Even in these latter cases, where such
person has rendered at least one year of service, regardless of the nature of the activity
performed or of whether it is continuous or intermittent, the employment is considered
regular as long as the activity exists, it not being indispensable that he be first issued a
regular appointment or be formally declared as such before acquiring a regular status.
Admittedly, company's president acceded that petitioners work is of great importance
in the survival of the company being the advertisements solicited by the petitioner are
the lifeblood of the company.

GREAT PACIFIC LIFE ASSURANCE CORP. VS. JUDICO


G.R. NO. 73887
DECEMBER 21, 1989
PARAS, J.

FACTS:
On August 27, 1982, the private respondent filed a complaint for illegal dismissal against
the petitioner. The private respondent was a debit agent, defined as an insurance
agent selling/servicing industrial life plans and policyholders. He had definite work
assignments including but not limited to selling insurance and collection of premiums
from policyholders. As compensation, he was initially paid PHP200.00 as allowance for
thirteen weeks regardless of production and later a certain commission from his total
collections. He was promoted to the position of Zone Supervisor and was given
additional allowance fixed atPHP110.00 per week. However, he was reverted back to his
former position after two months for unknown reasons and was finally dismissed by
way of termination of agency contract.

The petitioner contended that the private respondent was not an employee of the
company entitled to the protection of the law against illegal dismissal. The latters
compensation, in the form of commissions and bonuses, was based on actual
production.
The Labor Arbiter dismissed the complaint on the ground that the employer-employee
did not exist between the parties. On appeal, the NLRC reversed the ruling stating that
the private respondent was a regular employee as defined under Article 281 of the
Labor Code.

ISSUE:
Whether or not an employee-employer relationship existed between the petitioner and
the private respondent.

HELD:
One salient point in the determination of employer-employee relationship which cannot
be easily ignored is the fact that the compensation that these agents on commission
received is not paid by the insurance company but by the investor (or the person
insured). The test is whether the employer controls or has reserved the right to
control the employee not only as to the result of the work to be done but also as to
the means and methods by which the same is to be accomplished.
The private respondent received a definite minimum amount per week as his wage
known as sales reserve. He was assigned a definite place in the office to work on when
he is not in the field; and in addition to his canvassing work he was burdened with the
job of collection. Conversely, he was promoted to Zone Supervisor with additional
allowance of a definite amount aside from the regular weekly allowance. His contract
of services was neither for a piece of work nor for a definite period.

The private respondent was controlled by the petitioner not only as to the kind of work;
the amount of results, the kind of performance but also the power of dismissal. Thus, he
was an employee of the petitioner.

The appealed decision is AFFIRMED.

FEATI UNIVERSITY VS. HON. JOSE S. BAUTISTA AND FEATI UNIVERSITY FACULTY CLUB
G.R. NO. L-21278
DECEMBER 27, 1966
ZALDIVAR, J.

FACTS:
A strike was declared by the members of Feati Unity Faculty Club resulting in the
disruption of the classes. Despite further efforts from Department of Labor, the dispute
between the union and management of Feati was not settled. The President of the PH
certified the dispute to the Court of Industrial Relations. Cases were filed with CIR. CIR
ordered that striking faculty members would return to work and the University to admit
them under status quo agreement. The latter prayed for dismissal of the case on the
ground that CIR has no jurisdiction. It contended that the Industrial Peace Act is not
applicable to the university and the members of the Faculty club are mere independent
contractors.

ISSUE:
Whether FEATI is an employer within the purview of the Industrial Peace Act.

HELD:
The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term
employer include any person acting in the interest of an employer, directly or indirectly,
but shall not include any labor organization (otherwise than when acting as an
employer) or any one acting in the capacity or agent of such labor organization.

In this case, the University is operated for profit hence included in the term of employer.
Professors and instructors, who are under contract to teach particular courses and are
paid for their services, are employees under the Industrial Peace Act.
Professors and instructors are not independent contractors. University controls the
work of the members of its faculty; that a university prescribes the courses or subjects
that professors teach, and when and where to teach; that the professors work is
characterized by regularity and continuity for a fixed duration; that professors are
compensated for their services by wages and salaries, rather than by profits; that the
professors and/or instructors cannot substitute others to do their work without the
consent of the university; and that the professors can be laid off if their work is found
not satisfactory. All these indicate that the university has control over their work; and
professors are, therefore, employees and not independent contractors.

The principal consideration in determining whether a workman is an employee or an


independent contractor is the right to control the manner of doing the work, and it is
not the actual exercise of the right of interfering with the work, but the right to control,
which constitutes the test.

CITIZENS LEAGUE OF FREE WORKERS ET. AL., VS. ABBAS


G.R. NO. L-21212
SEPTEMBER 23, 1966
DIZON, J.

FACTS:
The petitioners used to lease the auto-calesas operated by the private respondents on a
daily rental basis. After sometime, the petitioners tried to get the private respondents
to recognize them as employees instead of lessees and to bargain on that basis. The
private respondents refused to negotiate. On February 20, 1963, the petitioners
declared a strike and since then paralyzed the auto-calesa operations through threats,
intimidation and violence.

On March 11, 1963, the private respondents filed a complaint with the CFI to restrain
the petitioners and to recover damages. The complaint also prayed for the issuance of a
writ of preliminary junction ex-parte restraining defendants therein from committing
said acts of violence and intimidation during the pendency of the case.

Consequently, the petitioners filed a complaint of unfair labor practice against the
private respondents on the ground, among others, of the latters refusal to bargain with
them. They also filed a motion to declare the writ of preliminary injunction void since
the same had expired by virtue of Section 9 (d) of Republic Act 875 wherein there
cannot be any ex parte grant of a restraining order in a case involving a labor dispute.
In his order of March 21, 1963, however, the respondent judge denied said motion on
the ground that there was no employer-employee relationship between the petitioners
and private respondents.

ISSUE:
Whether or not there was an employer-employee relationship between the parties.

HELD:
Stating the case of Isabelo Doce vs. Workmen' s Compensation Commission, et al., the
Court held that a driver of a jeep who operates the same under the boundary system is
considered an employee within the meaning of the law and as such the case comes
under the jurisdiction of the Court of Industrial Relations. The lessor-lessee relationship
cannot be sustained between an operator and his drivers for the sole ground that the
latter were not paid any fixed wage and that their compensation was the excess of the
total amount of fares earned. The drivers did not have any interest in the business
because they did not invest anything in the acquisition of the jeeps and did not
participate in the management thereof, their service as drivers of the jeeps being their
only contribution to the business. There was a labor dispute between the parties from
the beginning. The writ of preliminary injunction was set aside.

VILLAMARIA VS. CA AND BUSTAMANTE


G.R. NO. 165881
APRIL 19, 2006
CALLEJO, SR., J.

FACTS:
Petitioner was the owner of the jeepneys, which the private respondent is the one who
is driving in a boundary basis. Villamaria and Bustamante entered into a contract were
the petitioner agreed to sell the jeepney entitled Kasunduan ng Bilihan ng Sasakayan sa
Pamamagitan ng Boundary-Hulog were Bustamante would remit to Villamaria P550.00
a day for a period of four years. Both parties agreed in such terms and stipulations of
the contract. When the private respondent failed to pay the boundary-hulog, Villarama
took back the jeepney driven by Bustamante and barred the latter from driving the
vehicle. Due to the action of petitioner, Bustamante files a complaint before the court.

ISSUE:
Whether or not there exist an employee-employer relationshop.

HELD:
Yes. The juridical relationship of employer-employee between petitioner and
respondent was not negated by the foregoing stipulation in the Kasunduan, considering
that petitioner retained control of respondents conduct as driver of the vehicle. Even if
the petitioner was allowed to let some other person drive the unit, it was not shown
that he did so; that the existence of an employment relation is not dependent on how
the worker is paid but on the presence or absence of control over the means and
method of the work; that the amount earned in excess of the boundary hulog is
equivalent to wages; and that the fact that the power of dismissal was not mentioned in
the Kasunduan did not mean Villamaria never exercised such power, or could not
exercise such power. Hence, the employer- employee relationship exists.
SY ET. AL., VS. HON. COURT OF APPEALS AND J. SAHOT
G.R. NO. 142293
FEBRUARY 27, 2003
QUIZUMBING, J.

FACTS:
Complainant started working with respondent SBT Trucking in 1958 at age 23, first as a
fire truck helper and later as truck driver, until 1994 when at age 59 he was separated
for his inability to work due to sickness. When he inquired with the SSS, he learned that
the trucking company never paid his SSS premiums. The company contended that he
was never an employee but an industrial partner and that he would not have been
separated if he returned to his work after his sick leave; it was he, rather, that could not
resume his work.

ISSUE:
Whether or not an employee-employer relationship existed between the parties.

HELD:
It shows that the complainant was only 23 years old when he started working with
respondent as truck helper. SC questioned how a 23 year old man, working as a truck
helper, be considered an industrial partner. Hence the Court ruled that complainant was
only an employee, not a partner of respondents from the time complainant started
working for respondent. There was no written agreement, no proof that the
complainant received a share in petitioners profits, nor was there anything to show he
had any participation with respect to the running of the business.

The elements to determine the existence of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employers power to control the employees conduct. The most
important element is the employers control of the employees conduct, not only as to
the result of the work to be done, but also as to the means and methods to accomplish
it.
As found by the appellate court, petitioners owned and operated a trucking business
since the1950s and by their own allegations, they determined private respondents
wages and rest day. Records of the case show that private respondent actually engaged
in work as an employee. During the entire course of his employment he did not have the
freedom to determine where he would go, what he would do, and how he would do it.
He merely followed instructions of petitioners and was content to do so, as long as he
was paid his wages. Indeed, said the CA, private respondent had worked as a truck
helper and driver of petitioners not for his own pleasure but under the latters control.
MAKATI HABERDASHERY INC. VS. NLRC
G.R. NOS. 83380-81
NOVEMBER 15, 1989
FERNAN, C.J.,

FACTS:
Individual complainants have been working for Makati Haberdashery Inc. as tailors,
seamsters, sewers, basters and plantsadoras. They were paid on a piece-rate basis
except two who were paid on a monthly basis. In addition to their piece-rate, they were
given daily allowance of P3.00 provided they report for work before 9:30am everyday.
They were required to work from or before 9:30am up to 6-7pmfrom Monday to
Saturday and during peak periods even on Sundays and holidays. The Sandigan ng
Manggagawang Pilipino filed a complaint for underpayment of the basic wage,
underpayment of living allowance, nonpayment of overtime work, nonpayment of
holiday pay and other money claims. The Labor Arbiter rendered judgment in favor of
complainants, which the NLRC affirmed. Petitioner urged that the NLRC erred in
concluding that an employer-employee relationship existed between the petitioners
and the workers.

ISSUE:
Whether or not employee-employer relationship existed between petitioners and its
workers.

HELD:
The test of employer-employee relationship is four-fold: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and
(4) the power to control the employee's conduct. It is the so-called "control test" that is
the most important element. This simply means the determination of whether the
employer controls or has reserved the right to control the employee not only as to the
result of the work but also as to the means and method by which the same is to be
accomplished.

The facts at bar indubitably reveal that the most important requisite of control is
present. As gleaned from the operations of petitioner, when a customer enters into a
contract with the haberdashery or its proprietor, the latter directs an employee who
may be a tailor, pattern maker, sewer or "plantsadora" to take the customer's
measurements, and to sew the pants, coat or shirt as specified by the customer.
Supervision is actively manifested in all these aspects the manner and quality of
cutting, sewing and ironing.
CAURDANETAAN PIECE WORKERS UNION VS. UNDERSECRETARY BIENVENIDO
LAGUESMA
G.R. NO. 113542
FEBRUARY 24, 1998
PANGANIBAN, J.

FACTS:
Complainants worked as cargador at the warehouse and rice mills of Private
Respondent Corfarm. As cargadores, they loaded, unloaded and piled sacks of palay
from the warehouse to the cargo trucks and those brought by cargo trucks for delivery
to different places. They were paid by Corfarm on a piece-rate basis. When Corfarm
denied them some benefits, they formed their union. Corfarm replaced them with non-
members of the union.

Respondent Corfarm denies that it had the power of control over the complainants
rationalizing that they were street-hired workers engaged from time to time to do
loading and unloading work; there was no superintendent-in-charge to give orders; and
there were no gate passes issued, nor tools, equipment and paraphernalia issued by
Cofarm for loading and unloading. It attributes error to the Solicitor General's reliance
on Art. 280 of the Labor Code. Citing Brent School, Inc. vs. Zamora, private respondent
asserts that a literal application of such article will result in absurdity, where
petitioners members will be regular employees not only of respondents but also of
several other rice mills, where they were allegedly also under service. Finally, Corfarm
submits that the OSGs position is negated by the fact that petitioners members
contracted for loading and unloading services with respondent company when such
work was available and when they felt like it.

ISSUE:
Whether or not the street-hired cargadores are considered as regular emplyoyees.

HELD:
The court considers the cargadores as regular employee. It is undeniable that
petitioner's members worked as cargadores for private respondent. They loaded,
unloaded and piled sacks of palay from the warehouses to the cargo trucks and from the
cargo trucks to the buyers. This work is directly related, necessary and vital to the
operations of Cofarm. Moreover, Cofarm did not even allege, much less prove, that
petitioner's members have substantial capital or investment in the form of tools,
equipment, machineries, and work premises among others. Furthermore, said
respondent did not contradict petitioner's allegation that it paid wages directly to these
workers without the intervention of any third party independent contractor. It also
wielded the power of dismissal over the petitioners. Clearly, the workers are not
independent contractors.
RUGA ET. AL VS NLRC
G.R. NO. L-72654-61
JANUARY 22, 1990
FERNAN, C.J.:

FACTS:
On September 11, 1983 upon arrival at the fishing port, petitioners were told by Jorge
de Guzman, president of private respondent, to proceed to the police station at
Camaligan, Camarines Sur, for investigation on the report that they sold some of their
fish-catch at midsea to the prejudice of private respondent. Petitioners denied the
charge claiming that the same was a countermove to their having formed a labor union
and becoming members of Defender of Industrial Agricultural Labor Organizations and
General Workers Union (DIALOGWU) on September 3, 1983.

During the investigation, no witnesses were presented to prove the charge against
petitioners, and no criminal charges were formally filed against them. Notwithstanding,
private respondent refused to allow petitioners to return to the fishing vessel to resume
their work on the same day, September 11, 1983.

On September 22, 1983, petitioners individually filed their complaints for illegal
dismissal and non-payment of 13th month pay, emergency cost of living allowance and
service incentive pay, with the then Ministry (now Department) of Labor and
Employment, Regional Arbitration Branch No. V, Legaspi City, Albay, docketed as Cases
Nos. 1449-83 to 1456-83. 2 They uniformly contended that they were arbitrarily
dismissed without being given ample time to look for a new job.
On October 24, 1983, private respondent, thru its operations manager, Conrado S. de
Guzman, submitted its position paper denying the employer-employee relationship
between private respondent and petitioners on the theory that private respondent and
petitioners were engaged in a joint venture. 3

After the parties failed to reach an amicable settlement, the Labor Arbiter scheduled the
case for joint hearing furnishing the parties with notice and summons. On December 27,
1983, after two (2) previously scheduled joint hearings were postponed due to the
absence of private respondent, one of the petitioners herein, Alipio Ruga, the
pilot/captain of the 7/B Sandyman II, testified, among others, on the manner the fishing
operations were conducted, mode of payment of compensation for services rendered
by the fishermen-crew members, and the circumstances leading to their dismissal. 4

On March 31, 1984, after the case was submitted for resolution, Labor Arbiter Asisclo S.
Coralde rendered a joint decision 5 dismissing all the complaints of petitioners on a
finding that a "joint fishing venture" and not one of employer-employee relationship
existed between private respondent and petitioners.

From the adverse decision against them, petitioners appealed to the National Labor
Relations Commission.
On May 30, 1985, the National Labor Relations Commission promulgated its
resolution 6 affirming the decision of the labor arbiter that a "joint fishing venture"
relationship existed between private respondent and petitioners.

Issue:
whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II
are employees of its owner-operator, De Guzman Fishing Enterprises, and if so, whether
or not they were illegally dismissed from their employment.

Held:
Petitioners assail the ruling of the public respondent NLRC that what exists between
private respondent and petitioners is a joint venture arrangement and not an employer-
employee relationship.

Aside from seeking the dismissal of the petition on the ground that the decision of the
labor arbiter is now final and executory for failure of petitioners to file their appeal with
the NLRC within 10 calendar days from receipt of said decision pursuant to the doctrine
laid down in Vir-Jen Shipping and Marine Services, Inc. vs. NLRC, 115 SCRA 347 (1982),
the Solicitor General claims that the ruling of public respondent that a "joint fishing
venture" exists between private respondent and petitioners rests on the resolution of
the Social Security System (SSS) in a 1968 case, Case No. 708 (De Guzman Fishing
Enterprises vs. SSS), exempting De Guzman Fishing Enterprises, private respondent
herein, from compulsory coverage of the SSS on the ground that there is no employer-
employee relations between the boat-owner and the fishermen-crew members
following the doctrine laid down in Pajarillo vs. SSS, 17 SCRA 1014 (1966). In applying to
the case at bar the doctrine in Pajarillo vs. SSS, supra, that there is no employer-
employee relationship between the boat-owner and the pilot and crew members when
the boat-owner supplies the boat and equipment while the pilot and crew members
contribute the corresponding labor and the parties get specific shares in the catch for
their respective contribution to the venture, the Solicitor General pointed out that the
boat-owners in the Pajarillo case, as in the case at bar, did not control the conduct of
the fishing operations and the pilot and crew members shared in the catch.

Fundamental considerations of substantial justice persuade Us to decide the instant


case on the merits rather than to dismiss it on a mere technicality. In so doing, we
exercise the prerogative accorded to this Court enunciated in Firestone Filipinas
Employees Association, et al. vs. Firestone Tire and Rubber Co. of the Philippines, Inc., 61
SCRA 340 (1974), thus "the well-settled doctrine is that in labor cases before this
Tribunal, no undue sympathy is to be accorded to any claim of a procedural misstep, the
idea being that its power be exercised according to justice and equity and substantial
merits of the controversy."

We have consistently ruled that in determining the existence of an employer-employee


relationship, the elements that are generally considered are the following (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished. The employment relation
arises from contract of hire, express or implied. 9 In the absence of hiring, no actual
employer-employee relation could exist.

The conclusion of public respondent that there had been no change in the situation of
the parties since 1968 when De Guzman Fishing Enterprises, private respondent herein,
obtained a favorable judgment in Case No. 708 exempting it from compulsory coverage
of the SSS law is not supported by evidence on record. It was erroneous for public
respondent to apply the factual situation of the parties in the 1968 case to the instant
case in the light of the changes in the conditions of employment agreed upon by the
private respondent and petitioners as discussed earlier.

While tenure or length of employment is not considered as the test of employment,


nevertheless the hiring of petitioners to perform work which is necessary or desirable in
the usual business or trade of private respondent for a period of 8-15 years since 1968
qualify them as regular employees within the meaning of Article 281 of the Labor Code
as they were indeed engaged to perform activities usually necessary or desirable in the
usual fishing business or occupation of private respondent. 14

Furthermore, the fact that on mere suspicion based on the reports that petitioners
allegedly sold their fish-catch at midsea without the knowledge and consent of private
respondent, petitioners were unjustifiably not allowed to board the fishing vessel on
September 11, 1983 to resume their activities without giving them the opportunity to
air their side on the accusation against them unmistakably reveals the disciplinary
power exercised by private respondent over them and the corresponding sanction
imposed in case of violation of any of its rules and regulations. The virtual dismissal of
petitioners from their employment was characterized by undue haste when less
extreme measures consistent with the requirements of due process should have been
first exhausted. In that sense, the dismissal of petitioners was tainted with illegality.

WHEREFORE, in view of the foregoing, the petition is GRANTED. The questioned


resolution of the National Labor Relations Commission dated May 30,1985 is hereby
REVERSED and SET ASIDE. Private respondent is ordered to reinstate petitioners to their
former positions or any equivalent positions with 3-year backwages and other monetary
benefits under the law. No pronouncement as to costs.
SO ORDERED.
MARAGUINOT AND P. ENERO VS NLRC AND VIVA FILMS
GR NO. 120969
JANUARY 22, 1998

FACTS:

Maraguinot and Enero were separately hired by Vic Del Rosario under Viva Films as part
of the filming crew. Sometime in May 1992, sought the assistance of their supervisor to
facilitate their request that their salary be adjusted in accordance with the minimum
wage law.

On June 1992, Mrs. Cesario, their supervisor, told them that Mr. Vic Del Rosario would
agree to their request only if they sign a blank employment contract. Petitioners refused
to sign such document. After which, the Mr. Enero was forced to go on leave on the
same month and refused to take him back when he reported for work. Mr. Maraguinot
on the other hand was dropped from the payroll but was returned days after. He was
again asked to sign a blank employment contract but when he refused, he was
terminated.

Consequently, the petitioners sued for illegal dismissal before the Labor Arbiter. The
private respondents claim the following: (a) that VIVA FILMS is the trade name of VIVA
PRODUCTIONS, INC. and that it was primarily engaged in the distribution & exhibition of
movies- but not then making of movies; (b) That they hire contractors called
producers who act as independent contractors as that of Vic Del Rosario; and (c) As
such, there is no employee-employer relation between petitioners and private
respondents.

The Labor Arbiter held that the complainants are employees of the private respondents.
That the producers are not independent contractor but should be considered as labor-
only contractors and as such act as mere agent of the real employer. Thus, the said
employees are illegally dismissed.

The private respondents appealed to the NLRC which reversed the decision of the Labor
Arbiter declaring that the complainants were project employees due to the ff. reasons:
(a) Complainants were hired for specific movie projects and their employment was co-
terminus with each movie project; (b)The work is dependent on the availability of
projects. As a result, the total working hours logged extremely varied; (c) The extremely
irregular working days and hours of complainants work explains the lump sum payment
for their service; and (d) The respondents alleged that the complainants are not
prohibited from working with other movie companies whenever they are not working
for the independent movie producers engaged by the respondents.

A motion for reconsideration was filed by the complainants but was denied by NLRC. In
effect, they filed an instant petition claiming that NLRC committed a grave abuse of
discretion in: (a) Finding that petitioners were project employees; (b) Ruling that
petitioners were not illegally dismissed; and (c) Reversing the decision of the Labor
Arbiter.

In the instant case, the petitioners allege that the NLRC acted in total disregard of
evidence material or decisive of the controversy.

Issues:

(a) W/N there exist an employee- employer relationship between the petitioners and
the private respondents.

(b) W/N the private respondents are engaged in the business of making movies.

(c) W/N the producer is a job contractor.

Held:

There exist an employee- employer relationship between the petitioners and the private
respondents because of the ff. reasons that nowhere in the appointment slip does it
appear that it was the producer who hired the crew members. Moreover, it was VIVAs
corporate name appearing on heading of the slip. It can likewise be said that it was VIVA
who paid for the petitioners salaries.

Respondents also admit that the petitioners were part of a work pool wherein they
attained the status of regular employees because of the ff. requisites: (a) There is a
continuous rehiring of project employees even after cessation of a project; (b) The tasks
performed by the alleged project employees are vital, necessary and indispensable to
the usual business or trade of the employer; and (c) However, the length of time which
the employees are continually re-hired is not controlling but merely serves as a badge of
regular employment.

Since the producer and the crew members are employees of VIVA and that these
employees works deal with the making of movies. It can be said that VIVA is engaged of
making movies and not on the mere distribution of such.

The producer is not a job contractor because of the ff. reasons: (Sec. Rule VII, Book III of
the Omnibus Rules Implementing the Labor Code.)

a. A contractor carries on an independent business and undertakes the contract work on


his own account under his own responsibility according to his own manner and method,
free from the control and direction of his employer or principal in all matters connected
with the performance of the work except as to the results thereof. The said producer
has a fix time frame and budget to make the movies.
b. The contractor should have substantial capital and materials necessary to conduct his
business. The said producer, Del Rosario, does not have his own tools, equipment,
machinery, work premises and other materials to make motion pictures. Such materials
were provided by VIVA.

It can be said that the producers are labor-only contractors. Under Article 106 of the
Labor Code (reworded) where the contractor does not have the requisites as that of the
job contractors.

ORLANDO FARM GROWERS ASSOCIATION/GLICERIO AOVER VS. NLRC


GR NO. 129076
NOVEMBER 25, 1998

Facts:
Petitioner Orlando Farm Growers Association (Anover is the president) is an association
of landowners engaged in the production of export quality bananas located in
Kinamayan, Sto. Tomas, Davao del Norte, established for the sole
purpose of dealing collectively with Stanfilco on matters concerning technical services,
canal maintenance, irrigation and pest control, among others. Respondents (about 20
complainants) were hired as farm workers by several member-landowners but,
nonetheless, were made to perform functions as packers and harvesters in the
plantation of petitioner association.3.January 8, 1993 July 30, 1994 respondents were
dismissed on various dates. Thus, they filed against petitioner for illegal dismissal and
monetary benefits. Petitioners liabilities to complainants are joint and solidary, with its
responsibleofficers.4.September 6, 1995

Issue:
Whether or not an unregistered association may be an employer independent of the
respective members it represents

Held:
YES. Petition is DISMISSED. NLRC judgment affirmed but remanded back to Labor Arbiter
Sancho to specify the amount each respondent is entitled to.

Ratio:
The law does not require an employer to be registered before he may considered as one
within the definition of the Labor Code.
Art 212 (e) of the Labor Code defines an employer as any person acting inthe interest of
an employer, directly or indirectly.

To determine the existence of employer employee relationship (Filipinas Broadcasting


Network v. NLRC):1.The manner of selection and engagement2.Payment of
wages3.Presence or absence of the power of dismissal4.Presence or absence of the
power of control (most important element. Evidence to support existence of employer
employee relationship.

During the subsistence of the association, several circulars andmemoranda


were issued concerning, among otherthings, absences without formal request, loitering i
n the work area and disciplinarymeasures with which every worker is enjoined to
comply.

NATIONAL SUGAR REFINERIES CORP. VS. NLRC


G.R. NO. 101761
MARCH 24, 1993
REGALADO, J.

Facts: Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation


which is fully owned and controlled by the Government, operates three (3) sugar
refineries located at Bukidnon, Iloilo and Batangas. The Batangas refinery was privatized
on April 11, 1992 pursuant to Proclamation No. 50.

Private respondent union represents the former supervisors of the NASUREFCO


Batangas Sugar Refinery, namely, the Technical Assistant to the Refinery Operations
Manager, Shift Sugar Warehouse Supervisor, Senior Financial/Budget Analyst, General
Accountant, Cost Accountant, Sugar Accountant, Junior Financial/Budget Analyst, Shift
Boiler Supervisor,, Shift Operations Chemist, Shift Electrical Supervisor, General Services
Supervisor, Instrumentation Supervisor, Community Development Officer, Employment
and Training Supervisor, Assistant Safety and Security Officer, Head and Personnel
Services, Head Nurse, Property Warehouse Supervisor, Head of Inventory Control
Section, Shift Process Supervisor, Day Maintenance Supervisor and Motorpool
Supervisor.

On June 1, 1988, petitioner implemented a Job Evaluation (JE) Program affecting all
employees, from rank-and-file to department heads which was designed to rationalized
the duties and functions of all positions, reestablish levels of responsibility, and
recognize both wage and operational structures. Jobs were ranked according to effort,
responsibility, training and working conditions and relative worth of the job. As a result,
all positions were re-evaluated, and all employees including the members of respondent
union were granted salary adjustments and increases in benefits commensurate to their
actual duties and functions.

The Courts glean from the records that for about ten years prior to the JE Program, the
members of respondent union were treated in the same manner as rank-and file
employees. As such, they used to be paid overtime, rest day and holiday pay pursuant to
the provisions of Articles 87, 93 and 94 of the Labor Code as amended. On May 11,
1990, petitioner NASUREFCO recognized herein respondent union, which was organized
pursuant to Republic Act NO. 6715 allowing supervisory employees to form their own
unions, as the bargaining representative of all the supervisory employees at the
NASUREFCO Batangas Sugar Refinery. Two years after the implementation of the JE
Program, specifically on June 20, 1990, the members of herein respondent union filed a
complainant with the executive labor arbiter for non-payment of overtime, rest day and
holiday pay allegedly in violation of Article 100 of the Labor Code.

Issue: Whether or not the members of respondent union are entitled to overtime, rest
day and holiday pay.

Ruling: The members of the union are not entitled to overtime, rest and holiday pay
since they fall within the classification of managerial employees which makes them a
part of the exempted employees.

It must of necessity be ascertained first whether or not the union members, as


supervisory employees, are to be considered as officers or members of the managerial
staff who are exempt from the coverage of Article 82 of the Labor Code.

It is not disputed that the members of respondent union are supervisory employees, as
defined employees, as defined under Article 212(m), Book V of the Labor Code on Labor
Relations, which reads: 'Managerial employee' is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharged, assign or discipline employees. Supervisory
employees are those who, in the interest of the employer effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment. All employees not falling within
any of those above definitions are considered rank-and-file employees of this Book."

Article 82 of the Labor Code states: The provisions of this title shall apply to employees
in all establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined by the
Secretary of Labor in Appropriate regulations.
As used herein, 'managerial employees' refer to those whose primary duty consists of
the management of the establishment in which they are employed or of a department
or subdivision thereof, and to other officers or members of the managerial staff.

They are clearly officers or members of the managerial staff because they meet all the
conditions prescribed by law and, hence, they are not entitled to overtime, rest day and
supervisory employees under Article 212 (m) should be made to apply only to the
provisions on Labor Relations, while the right of said employees to the questioned
benefits should be considered in the light of the meaning of a managerial employee and
of the officers or members of the managerial staff, as contemplated under Article 82 of
the Code and Section 2, Rule I Book III of the implementing rules.

In other words, for purposes of forming and joining unions, certification elections,
collective bargaining, and so forth, the union members are supervisory employees. In
terms of working conditions and rest periods and entitlement to the questioned
benefits, however, they are officers or members of the managerial staff, hence they are
not entitled thereto.

The union members will readily show that these supervisory employees are under the
direct supervision of their respective department superintendents and that generally
they assist the latter in planning, organizing, staffing, directing, controlling
communicating and in making decisions in attaining the company's set goals and
objectives. These supervisory employees are likewise responsible for the effective and
efficient operation of their respective departments.

Under the facts obtaining in this case, The Court is constrained to agree with petitioner
that the union members should be considered as officers and members of the
managerial staff and are, therefore, exempt from the coverage of Article 82. Perforce,
they are not entitled to overtime, rest day and holiday.

PENARANDA VS. BAGANGA PLYWOOD CORP.


G.R. NO. 159577
MAY 3, 2006
PANGANIBAN, C.J.

Facts: in June 1999, Petitioner Charlito Pearanda was hired as an employee of Baganga
Plywood Corporation (BPC) to take charge of the operations and maintenance of its
steam plant boiler. In May 2001, Pearanda filed a Complaint for illegal dismissal with
money claims against BPC and its general manager, Hudson Chua, before the NLRC. Due
to the fact that the parties failed to settle amicably, the labor arbiter directed the
parties to file their position papers.

"[Pearanda] through counsel in his position paper alleges that he was employed by
respondent [Baganga] on March 15, 1999 with a monthly salary of P5,000.00 as
Foreman/Boiler Head/Shift Engineer until he was illegally terminated on December 19,
2000. Further, [he] alleges that his services [were] terminated without the benefit of
due process and valid grounds in accordance with law. Furthermore, he was not paid his
overtime pay, premium pay for working during holidays/rest days, night shift
differentials and finally claims for payment of damages and attorneys fees having been
forced to litigate the present complaint.

"Upon the other hand, respondent [BPC] is a domestic corporation duly organized and
existing under Philippine laws and is represented herein by its General Manager
HUDSON CHUA, [the] individual respondent. Respondents thru counsel allege that
complainants separation from service was done pursuant to Art. 283 of the Labor Code.
The respondent [BPC] was on temporary closure due to repair and general maintenance
and it applied for clearance with the Department of Labor and Employment, Regional
Office No. XI to shut down and to dismiss employees (par. 2 position paper). And due to
the insistence of herein complainant he was paid his separation benefits (Annexes C and
D, ibid). Consequently, when respondent [BPC] partially reopened in January 2001,
[Pearanda] failed to reapply. Hence, he was not terminated from employment much
less illegally. He opted to severe employment when he insisted payment of his
separation benefits. Furthermore, being a managerial employee he is not entitled to
overtime pay and if ever he rendered services beyond the normal hours of work, [there]
was no office order/or authorization for him to do so. Finally, respondents allege that
the claim for damages has no legal and factual basis and that the instant complaint must
necessarily fail for lack of merit."

Ruling of the NLRC: Respondents filed an appeal to the NLRC, which deleted the award
of overtime pay and premium pay for working on rest days. According to the
Commission, petitioner was not entitled to these awards because he was a managerial
employee.

Ruling of the Court of Appeals: In its Resolution dated January 27, 2003, the CA
dismissed Pearandas Petition for Certiorari. The appellate court held that he failed to:
1) attach copies of the pleadings submitted before the labor arbiter and NLRC; and 2)
explain why the filing and service of the Petition was not done by personal service.
In its later Resolution dated July 4, 2003, the CA denied reconsideration on the ground
that petitioner still failed to submit the pleadings filed before the NLRC.

Issue: Whether or not Penaranda is entitled to overtime pay and premium pay for
working on rest days.

Held: Article 82 of the Labor Code exempts managerial employees from the coverage of
labor standards. Labor standards provide the working conditions of employees,
including entitlement to overtime pay and premium pay for working on rest days.29
Under this provision, managerial employees are "those whose primary duty consists of
the management of the establishment in which they are employed or of a department
or subdivision."

The Court disagrees with the NLRCs finding that petitioner was a managerial employee.
However, petitioner was a member of the managerial staff, which also takes him out of
the coverage of labor standards. Like managerial employees, officers and members of
the managerial staff are not entitled to the provisions of law on labor standards. Even
petitioner admitted that he was a supervisor. In his Position Paper, he stated that he
was the foreman responsible for the operation of the boiler. The term foreman implies
that he was the representative of management over the workers and the operation of
the department. Petitioners evidence also showed that he was the supervisor of the
steam plant. His classification as supervisor is further evident from the manner his salary
was paid. He belonged to the 10% of respondents 354 employees who were paid on a
monthly basis; the others were paid only on a daily basis. On the basis of the foregoing,
the Court finds no justification to award overtime pay and premium pay for rest days to
petitioner. Wherefore, the petition is denied. costs against petitioner.

AUTO BUS TRANSPORT SYSTEMS, INC., VS. BAUTISTA


G.R. NO. 156367
MAY 16, 2005
CHICO-NAZARIO, J.

Facts:
Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, Inc.
(Autobus), as driver-conductor with travel routes Manila-Tuguegarao via Baguio, Baguio-
Tuguegarao via Manila and Manila-Tabuk via Baguio. Respondent was paid on
commission basis, seven percent (7%) of the total gross income per travel, on a twice a
month basis.On 03 January 2000, while respondent was driving Autobus No. 114 along
Sta. Fe, Nueva Vizcaya, the bus he was driving accidentally bumped the rear portion of
Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without giving
any warning.Respondent further alleged that he was not allowed to work until he fully
paid the amount of P75,551.50, representing thirty percent (30%) of the cost of repair of
the damaged buses and that despite respondents pleas for reconsideration, the same
was ignored by management. After a month, management sent him a letter of
termination. Respondent instituted a Complaint for Illegal Dismissal with Money Claims
for nonpayment of 13th month pay and service incentive leave pay against Autobus.

Issue: Whether the private respondent is considered as field personel in which case, he
is exempted from incentive leave pay under Book III, Rule V, Section 1(d).

Held:
No.
According to the Implementing Rules, Service Incentive Leave shall not apply to
employees classified as "field personnel." The phrase "other employees whose
performance is unsupervised by the employer" must not be understood as a separate
classification of employees to which service incentive leave shall not be granted. Rather,
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."8

The same is true with respect to the phrase "those who are engaged on task or contract
basis, purely commission basis." Said phrase should be related with "field personnel,"
applying the rule on ejusdem generis that general and unlimited terms are restrained
and limited by the particular terms that they follow. Hence, employees engaged on task
or contract basis or paid on purely commission basis are not automatically exempted
from the grant of service incentive leave, unless, they fall under the classification of field
personnel.

Therefore, petitioners contention that respondent is not entitled to the grant of service
incentive leave just because he was paid on purely commission basis is misplaced. What
must be ascertained in order to resolve the issue of propriety of the grant of service
incentive leave to respondent is whether or not he is a field personnel.

As a general rule, [field personnel] are those whose performance of their job/service is
not supervised by the employer or his representative, the workplace being away from
the principal office and whose hours and days of work cannot be determined with
reasonable certainty; hence, they are paid specific amount for rendering specific service
or performing specific work. If required to be at specific places at specific times,
employees including drivers cannot be said to be field personnel despite the fact that
they are performing work away from the principal office of the employee.
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 employees
performance is unsupervised by the employer. Field personnel are those who regularly
perform their duties away from the principal place of business of the employer and
whose actual hours of work in the field cannot be determined with reasonable certainty.
Thus, in order to conclude whether an employee is a field employee, it is also necessary
to ascertain if actual hours of work in the field can be determined with reasonable
certainty by the employer. In so doing, an inquiry must be made as to whether or not
the employees time and performance are constantly supervised by the employer.

UNION OF FILIPINO EMPLOYEES VS VIVAR


G..R. NO. 79255
JANUARY 20, 1992
GUTIERREZ, JR., J.

Facts:
This labor dispute stems from the exclusion of sales personnel from the holiday
pay award and the change of the divisor in the computation of benefits from 251 to 261
days. On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed
with the National Labor Relations Commission (NLRC) a petition for declaratory relief
seeking a ruling on its rights and obligations respecting claims of its monthly paid
employees for holiday pay in the light of the Court's decision in Chartered Bank
Employees Association v. Ople (138 SCRA 273 [1985]). Both Filipro and the Union of
Filipino Employees (UFE) agreed to submit the case for voluntary arbitration and
appointed respondent Benigno Vivar, Jr. as voluntary arbitrator.

Filipro filed a motion for clarification seeking (1) the limitation of the award to
three years, (2) the exclusion of salesmen, sales representatives, truck drivers,
merchandisers and medical representatives (hereinafter referred to as sales personnel)
from the award of the holiday pay, and (3) deduction from the holiday pay award of
overpayment for overtime, night differential, vacation and sick leave benefits due to the
use of 251 divisor. Petitioner UFE answered that the award should be made effective
from the date of effectivity of the Labor Code, that their sales personnel are not field
personnel and are therefore entitled to holiday pay, and that the use of 251 as divisor is
an established employee benefit which cannot be diminished.

Issue:

WON the respondent's sales personnel are not field personnel under Article 82
of the Labor Code?

Held:

The criteria for granting incentive bonus are: (1) attaining or exceeding sales
volume based on sales target; (2) good collection performance; (3) proper compliance
with good market hygiene; (4) good merchandising work; (5) minimal market returns;
and (6) proper truck maintenance.

The Court thereby resolves that the grant of holiday pay be effective, not from
the date of promulgation of the Chartered Bank case or from the date of effectivity of
the Labor Code, but from October 23, 1984, the date of promulgation of the IBAA case.

SAN MIGUEL BREWERY V. DEMOCRATIC LABOR ORGANIZATION


8 SCRA 613
JULY 31, 1963
FACTS: The Democratic Labor Association filed a complaint against the San Miguel
Brewery, Inc., embodying 12 demands for the betterment of the conditions of
employment of its members. The company filed its answer to the complaint specifically
denying its material averments and answering the demands point by point. The
company asked for the dismissal of the complaint. During the hearing, the union
manifested its desire to confine its claim to its demands for overtime, night-shift
differential pay, and attorney's fees, although it was allowed to present evidence on
service rendered during Sundays and holidays, or on its claim for additional separation
pay and sick and vacation leave compensation.

After the case had been submitted for decision, Presiding Judge Jose S. Bautista, who
was commissioned to receive the evidence, rendered decision expressing his disposition
with regard to the points embodied in the complaint on which evidence, was presented.
The demands for the application of the Minimum Wage Law to workers paid on"pakiao"
basis, payment of accumulated vacation and sick leave and attorney's fees, as well as
the award of additional separation pay, were either dismissed, denied, or set aside. Its
motion for reconsideration having been denied by the industrial court en bane, which
affirmed the decision of the court a quo with few exceptions, the San Miguel Brewery,
Inc. interposed the present petition for review.

ISSUE: Whether or not outside or field sales personnel are entitled to the benefits of the
Eight-Hour Labor Law.

HELD: NO. After the morning roll call, the employees leave the plant of the company to
go on their respective sales routes and they do not have a daily time record but the
sales routes are so planned that they can be completed within 8 hours at most, and they
receive monthly salaries and sales commission in variable amounts, so that they are
made to work beyond the required eight hours similar to piecework, "pakiao", or
commission basis regardless of the time employed, and the employees' participation
depends on their industry, it is held that the Eight-Hour Labor Law has no application to
said outside or field sales personnel and that they are not entitled to overtime pay.
The Court is in the opinion that the Eight-Hour Labor Law only has application where an
employee or laborer is paid in a monthly or daily basis, or is paid a monthly or daily
compensation, in which case, if he is made to work beyond the requisite period of 8
hours, he should be paid the additional compensation prescribed by law. This law has no
application when the employee or laborer is paid on a piece-work, "pakiao", or
commission basis, regardless of the time employed. The philosophy behind this
exemption is that his earnings are in the form of commission based on the gross receipts
of the day. His participation depends upon his industry so that the more hours he
employs in the work the greater are his gross returns and the higher his commission.
This philosophy is better explained in Jewel Tea Co. vs. Willams , C.C.A. Okl., 118 F. 2d
202, as follows:"The reasons for excluding an outside salesman are fairly apparent. Such
salesman, to a great extent, works individually. There are no restrictions respecting the
time he shall work and he can earn as much or as little, within the range of his ability, as
his ambition dictates. In lieu of overtime he ordinarily receives commissions as extra
compensation. He works away from his employer's place of business, is not subject to
the personal supervision of his employer, and his employer has no way of knowing the
number of hours he works per day."

MANUEL LARA, ET.Al., vs. PETROLINO DEL ROSRIO, JR.


G.R. No. L-6339
April 20, 1954

FACTS

In 1950 defendant Petronilo Del Rosario, Jr., owner of twenty-five taxi cabs or cars,
operated a taxi business under the name of Waval Taxi. He employed among others
three mechanics and 49 chauffeurs or drivers, the latter having worked for periods
ranging from 2 to 37 months. On September 4, 1950, without giving said mechanics and
chauffeurs 30 days advance notice, Del Rosario sold his 25 units or cabs to La Mallorca, a
transportation company, as a result of which, according to the mechanics and
chauffeurs above-mentioned they lost their jobs because the La Mallorca failed to
continue them in their employment. They brought this action against Del Rosario to
recover compensation for overtime work rendered beyond eight hours and on Sundays
and legal holidays, and one month salary (mesada) provided for in article 302 of the
Code of Commerce because the failure of their former employer to give them one
month notices. Subsequently, the three mechanics unconditionally withdrew their
claims. So only the 49 drivers remained as plaintiffs.

ISSUE

Whether or not the claim of the plaintiffs-appellants for overtime compensation under
the Eight-Hour Labor Law is valid.

RULING

The Supreme Court held that the month pay (mesada) under article 302 of the Code of
Commerce, article 2270 of the new Civil Code (Republic Act 386) appears to have
repealed said Article 302 when it repealed the provisions of the Code of Commerce
governing Agency. This repeal took place on August 30, 1950, when the new Civil Code
went into effect, that is, one year after its publication in the Official Gazette. The alleged
termination of services of the plaintiffs by the defendant took place according to the
complaint on September 4, 1950, that is to say, after the repeal of Article 302 which
they invoke. Moreover, said Article 302 of the Code of Commerce, assuming that it were
still in force speaks of salary corresponding to said month. commonly known as
mesada. If the plaintiffs herein had no fixed salary either by the day, week, or month,
then computation of the months salary payable would be impossible. Article 302 refers
to employees receiving a fixed salary.

MANILA TERMINAL CO. INC., VS. CIR, ET AL.


G.R. NO. L-4148
JULY 16, 1952
PARAS, CJ.

FACTS:
On September 1, 1945, the Manila Terminal Company, Inc. hereinafter to be referred as
to the petitioner, undertook the arrastre service in some of the piers in Manila's Port
Area at the request and under the control of the United States Army. The petitioner
hired some thirty men as watchmen on twelve-hour shifts at a compensation of P3 per
day for the day shift and P6 per day for the night shift. On February 1, 1946, the
petitioner began the postwar operation of the arrastre service at the present at the
request and under the control of the Bureau of Customs, by virtue of a contract entered
into with the Philippine Government. The watchmen of the petitioner continued in the
service with a number of substitutions and additions, their salaries having been raised
during the month of February to P4 per day for the day shift and P6.25 per day for the
nightshift. On March 28, 1947, Dominador Jimenez, a member of the Manila Terminal
Relief and Mutual Aid Association, sent a letter to the Department of Labor, requesting
that the matter of overtime pay be investigated, but nothing was done by the
Department. On April 29, 1947, Victorino Magno Cruz and five other employees, also
member of the Manila Transit Mutual Aid Association, filed a 5-point demand with the
Department of Labor, including overtime pay, but the Department again filed to do
anything about the matter. On May 27, 1947, the petitioner instituted the system of
strict eight-hour shifts. On June 19, 1947, the Manila Port Terminal Police Association,
not registered in accordance with the provisions of Commonwealth Act No. 213, filed a
petition with the Court of Industrial Relations. On July 16, 1947, the Manila Terminal
Relief and Mutual Aid Association was organized for the first time, having been granted
certificate No. 375 by the Department of Labor. On July 28, 1947, Manila Terminal Relief
and Mutual Aid Association filed an amended petition with the Court of Industrial
Relations praying, among others, that the petitioner be ordered to pay its watchmen or
police force overtime pay from the commencement of their employment. On May 9,
1949, by virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of
the President of the Philippines, the entire police force of the petitioner was
consolidated with the Manila Harvor Police of the Customs Patrol Service, a Government
agency under the exclusive control of the Commissioner of Customs and the Secretary
of Finance The Manila Terminal Relief and Mutual Aid Association will hereafter be
referred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision of April 1,
1950, as amended on April 18, 1950, while dismissing other demands of the Association
for lack of jurisdiction, ordered the petitioner to pay to its police force
Regular or base pay corresponding to four hours' overtime plus 25 per cent thereof as
additional overtime compensation for the period from September 1, 1945 to May 24,
1947;
Additional compensation of 25 per cent to those who worked from 6:00 p.m. to 6:00
a.m. during the same period:
Additional compensation of 50 per cent for work performed on Sundays and legal
holidays during the same period;
Additional compensation of 50 per cent for work performed on Sundays and legal
holidays from May 24, 1947 to May 9, 1949; and
Additional compensation of 25 per cent for work performed at night from May 29, 1947
to May 9, 1949.
With reference to the pay for overtime service after the watchmen had been integrated
into the Manila Harbor Police, Judge Yanson ruled that the court has no jurisdiction
because it affects the Bureau of Customs, an instrumentality of the Government having
no independent personality and which cannot be sued without the consent of the State.
(Metran vs. Paredes, 45. Off. Gaz., 2835.)

The petitioner find a motion for reconsideration. The Association also filed a motion for
reconsideration in so far its other demands were dismissed. Judge Yanson, concurred in
by Judge Jose S. Bautista, promulgated on July 13, 1950, a resolution denying both
motions for reconsideration. Presiding Judge Arsenio C. Roldan, in a separate opinion
concurred in by Judge Modesto Castillo, agreed with the decision of Judge Yanson of
April 1, 1950, as to the dismissal of other demands of the Association, but dissented
therefrom as to the granting of overtime pay. In a separate decisive opinion, Judge Juan
S. Lanting concurred in the dismissal of other demands of the Association. With respect
to overtime compensation, Judge Lanting ruled:

The decision under review should be affirmed in so far it grants compensation for
overtime on regular days (not Sunday and legal holidays)during the period from the date
of entrance to duty to May 24, 1947, such compensation to consists of the amount
corresponding to the four hours' overtime at the regular rate and an additional amount
of 25 per cent thereof.
As to the compensation for work on Sundays and legal holidays, the petitioner should
pay to its watchmen the compensation that corresponds to the overtime (in excess of 8
hours) at the regular rate only, that is, without any additional amount, thus modifying
the decision under review accordingly.
The watchmen are not entitled to night differential pay for past services, and therefore
the decision should be reversed with the respect thereto.
The petitioner has filed a present petition for certiorari.

ISSUE:
Whether or not he petitioner's watchmen is entitled to extra compensation for past
overtime work.

HELD:
Sections 3 and 5 of Commonwealth Act 444 expressly provides for the payment of extra
compensation in cases where overtime services are required, with the result that the
employees or laborers are entitled to collect such extra compensation for past overtime
work.

INTERPHIL LABORATORIES EMPLOYEES UNION- FFW, ET. AL VS. INTERPHIL


LABORATORIES
G.R. NO. 142824
DECEMBER 19, 2001
KAPUNAN, J.

FACTS:

Interphil Laboratories Employees Union-FFW is the sole and exclusive bargaining agent
of the rank-and-file employees of Interphil Laboratories, Inc., a company engaged in the
business of manufacturing and packaging pharmaceutical products. They had a
Collective Bargaining Agreement (CBA) effective from 01 August 1990 to 31 July 1993.

Prior to the expiration of the CBA or sometime in February 1993, Allesandro G.


Salazar,1Vice-President-Human Resources Department of respondent company, was
approached by Nestor Ocampo, the union president, and Hernando Clemente, a union
director. The two union officers inquired about the stand of the company regarding the
duration of the CBA which was set to expire in a few months. Salazar told the union
officers that the matter could be best discussed during the formal negotiations which
would start soon.

In March 1993, Ocampo and Clemente again approached Salazar. They inquired once
more about the CBA status and received the same reply from Salazar. In April 1993,
Ocampo requested for a meeting to discuss the duration and effectivity of the CBA.
Salazar acceded and a meeting was held on 15 April 1993 where the union officers
asked whether Salazar would be amenable to make the new CBA effective for two (2)
years, starting 01 August 1993. Salazar, however, declared that it would still be
premature to discuss the matter and that the company could not make a decision at the
moment. The very next day, or on 16 April 1993, all the rank-and-file employees of the
company refused to follow their regular two-shift work schedule of from 6:00 a.m. to
6:00 p.m., and from 6:00 p.m. to 6:00 a.m. At 2:00 p.m. and 2:00 a.m., respectively, the
employees stopped working and left their workplace without sealing the containers and
securing the raw materials they were working on When Salazar inquired about the
reason for their refusal to follow their normal work schedule, the employees told him to
"ask the union officers." To minimize the damage the overtime boycott was causing the
company, Salazar immediately asked for a meeting with the union officers. In the
meeting, Enrico Gonzales, a union director, told Salazar that the employees would only
return to their normal work schedule if the company would agree to their demands as
to the effectivity and duration of the new CBA. Salazar again told the union officers that
the matter could be better discussed during the formal renegotiations of the CBA. Since
the union was apparently unsatisfied with the answer of the company, the overtime
boycott continued. In addition, the employees started to engage in a work slowdown
campaign during the time they were working, thus substantially delaying the production
of the company.

On 14 May 1993, petitioner union submitted with respondent company its CBA
proposal, and the latter filed its counter-proposal. On 03 September 1993, respondent
company filed with the National Labor Relations Commission (NLRC) a petition to
declare illegal petitioner union's "overtime boycott" and "work slowdown" which,
according to respondent company, amounted to illegal strike. The case, docketed NLRC-
NCR Case No. 00-09-05529-93, was assigned to Labor Arbiter Manuel R. Caday. On 22
October 1993, respondent company filed with the National Conciliation and Mediation
Board (NCMB) an urgent request for preventive mediation aimed to help the parties in
their CBAnegotiations.3The parties, however, failed to arrive at an agreement and on 15
November 1993, respondent company filed with the Office of the Secretary of Labor
and Employment a petition for assumption of jurisdiction.

On 24 January 1994, petitioner union filed with the NCMB a Notice of Strike citing unfair
labor practice allegedly committed by respondent company. On 12 February 1994, the
union staged a strike.

On 14 February 1994, Secretary of Labor Nieves Confesor issued an assumption


order 4over the labor dispute. On 02 March 1994, Secretary Confesor issued an order
directing respondent company to "immediately accept all striking workers, including the
fifty-three (53) terminated union officers, shop stewards and union members back to
work under the same terms and conditions prevailing prior to the strike, and to pay all
the unpaid accrued year end benefits of its employees in 1993.

"On 05 September 1995, Labor Arbiter Caday submitted his recommendation to the
then Secretary of Labor Leonardo A. Quisumbing.8Then Secretary Quisumbing approved
and adopted the report in his Order, dated 13 August 1997.

Hence, the present recourse where petitioner alleged


Issue:
Whether or not the Honorable Fifth Division of Court of Appeals committed grave
abuse?

Ruling:
On the matter of the authority and jurisdiction of the Secretary of Labor and
Employment to rule on the illegal strike committed by petitioner union, it is undisputed
that the petition to declare the strike illegal before Labor Arbiter Caday was filed long
before the Secretary of Labor and Employment issued the assumption order on 14
February 1994.However, it cannot be denied that the issues of "overtime boycott" and
"work slowdown" amounting to illegal strike before Labor Arbiter Caday are intertwined
with the labor dispute before the Labor Secretary. In fact, on 16 March 1994, petitioner
union even asked Labor Arbiter Caday to suspend the proceedings before him and
consolidate the same with the case before the Secretary of Labor.

The appellate court also correctly held that the question of the Secretary of Labor and
Employment's jurisdiction over labor and labor-related disputes was already settled in
International Pharmaceutical, Inc. vs. Hon. Secretary of Labor and Associated Labor
Union (ALU).

Anent the alleged misappreciation of the evidence proffered by the parties, it is


axiomatic that the factual findings of the Labor Arbiter, when sufficiently supported by
the evidence on record, must be accorded due respect by the Supreme Court.12Here,
the report and recommendation of Labor Arbiter Caday was not only adopted by then
Secretary of Labor Quisumbing but was likewise affirmed by the Court of Appeals. We
see no reason to depart from their findings.

WHEREFORE, the petition is DENIED DUE COURSE and the 29 December 1999 decision
of the Court of Appeals is AFFIRMED.SO ORDERED.

PAN AMERICAN WOLRD AIRWAYS SYSTEM VS. PAN AMERICAN EMPLOYEES ASSOC.
G.R. NO.:L 16275
FEBRUARY 23, 1961
J. REYES, J.B.L.

FACTS: Appeal by certiorari from the decision of the Court of Industrial Relations in case
No. 1055 V dated October 10, 1959, and its resolution en banc denying the motion for
reconsideration by the petitioner herein. The Court orders to compute the overtime
compensation due the aforesaid fourteen (14) aircraft mechanic and the 2 employees
from the Communication Department based on the time sheet of said employees from
February 23, 1952 July 15, 1958 and to submit his report within 30 days for further
disposition by the court. Petitioner contends that the finding of that the 1 hour meal
period should be considered work(deducting 15 minutes as time allowed for eating) is
not supported by substantial evidence.

ISSUE: Whether or not the 1 hour meal period should be considered as overtime work
(after deducting 15minutes)?

HELD: Yes. The Court ruled that during the so called meal period, the mechanics were
required to standby for emergency work; that if they happened not to be available
when called, they were reprimanded by the lead man; that as in fact it happened on
many occasions, the mechanics had been called from their meals or told to hurry
Employees Association up eating to perform work during this period. Judgment
appealed from is affirmed. Cost against appellant.

UNIVERSITY OF PANGASINAN FACULTY UNION V. UNIVERSITY OF PANGASINAN


G.R. NO. L-63122
FEBRUARY 20, 1984
GUTIERREZ, JR., J.

LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS; PRESIDENTIAL DECREES ON


EMERGENCY COST OF LIVING ALLOWANCE; REQUISITES FOR ENTITLEMENT TO
ALLOWANCES PROVIDED THEREUNDER.
2. "NO WORK, NO PAY" PRINCIPLE NOT APPLICABLE CASE AT BAR.
3. EMPLOYEES WHETHER PAID ON MONTHLY OR DAILY BASIS ENTITLED TO DAILY LIVING
ALLOWANCE WHEN PAID THEIR BASIC WAGE.
PURPOSE OF THE LAW.
5. PRESIDENTIAL DECREE 451; CONSTRUED.
REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF NATIONAL LABOR RELATIONS
COMMISSION ARE BINDING WHEN FULLY SUBSTANTIATED BY EVIDENCE.

Facts:
On December 18, 1981, the petitioner, through its President, Miss Consuelo Abad, filed
a complaint against the private respondent with the Arbitration Branch of the NLRC,
Dagupan District Office, Dagupan City. The complaint seeks: (a) the payment of
Emergency Cost of Living Allowances (ECOLA) for November 7 to December 5, 1981, a
semestral break; (b) salary increases from the sixty (60%) percent of the incremental
proceeds of increased tuition fees; and (c) payment of salaries for suspended extra
loads.

The petitioners members are full-time professors, instructors, and teachers of


respondent University. The teachers in the college level teach for a normal duration of
ten (10) months a school year, divided into two (2) semesters of five (5) months each,
excluding the two (2) months summer vacation. These teachers are paid their salaries
on a regular monthly basis.
In November and December, 1981, the petitioners members were fully paid their
regular monthly salaries. However, from November 7 to December 5, during the
semestral break, they were not paid their ECOLA. The private respondent claims that
the teachers are not entitled thereto because the semestral break is not an integral part
of the school year and there being no actual services rendered by the teachers during
said period, the principle of "No work, no pay" applies.

During the same school year (1981-1982), the private respondent was authorized by the
Ministry of Education and Culture to collect, as it did collect, from its students a fifteen
(15%) percent increase of tuition fees. Petitioners members demanded a salary
increase effective the first semester of said schoolyear to be taken from the sixty (60%)
percent incremental proceeds of the increased tuition fees. Private respondent refused,
compelling the petitioner to include said demand in the complaint filed in the case at
bar. While the complaint was pending in the arbitration branch, the private respondent
granted an across-the-board salary increase of 5.86%. Nonetheless, the petitioner is still
pursuing full distribution of the 60% of the incremental proceeds as mandated by the
Presidential Decree No. 451.

Aside from their regular loads, some of petitioners members were given extra loads to
handle during the same 1981-1982 schoolyear. Some of them had extra loads to teach
on September 21, 1981, but they were unable to teach as classes in all levels throughout
the country were suspended, although said days was proclaimed by the President of the
Philippines as a working holiday. Those with extra loads to teach on said day claimed
they were not paid their salaries for those loads, but the private respondent claims
otherwise.

Issue:
"WHETHER OR NOT PETITIONERS MEMBERS ARE ENTITLED TO ECOLA DURING THE
SEMESTRAL BREAK FROM NOVEMBER 7 TO DECEMBER 5, 1981 OF THE 1981-82 SCHOOL
YEAR.
"WHETHER OR NOT 60% OF THE INCREMENTAL PROCEEDS OF INCREASED TUITION FEES
SHALL BE DEVOTED EXCLUSIVELY TO SALARY INCREASE,
"WHETHER OR NOT ALLEGED PAYMENT OF SALARIES FOR EXTRA LOADS ON SEPTEMBER
21, 1981 WAS PROVEN BY SUBSTANTIAL EVIDENCE."cralaw virtua1aw library

Held:
It is beyond dispute that the petitioners members are full-time employees receiving
their monthly salaries irrespective of the number of working days or teaching hours in a
month. However, they find themselves in a most peculiar situation whereby they are
forced to go on leave during semestral breaks. These semestral breaks are in the nature
of work interruptions beyond the employees control. The duration of the semestral
break varies from year to year dependent on a variety of circumstances affecting at
times only the private respondent but at other times all educational institutions in the
country. As such, these breaks cannot be considered as absences within the meaning of
the law for which deductions may be made from monthly allowances. The "No work, no
pay" principle does not apply in the instant case. The petitioners members received
their regular salaries during this period. It is clear from the aforequoted provision of law
that it contemplates a "no work" situation where the employees voluntarily absent
themselves. Petitioners, in the case at bar, certainly do not, ad voluntatem, absent
themselves during semestral breaks. Rather, they are constrained to take mandatory
leave from work. For this they cannot be faulted nor can they be begrudged that which
is due them under the law. To a certain extent, the private respondent can specify dates
when no classes would be held. Surely, it was not the intention of the framers of the law
to allow employers to withhold employee benefits by the simple expedient of
unilaterally imposing "no work" days and consequently avoiding compliance with the
mandate of the law for those days.chanrobles.com.ph : virtual law library.

This Court is not guilty of usurpation of legislative functions as claimed by the


respondents. We expressed the opinion in the University of the East case that benefits
mandated by law and collective bargaining may be charged to the 12% return on
investments within the 40% incremental proceeds of tuition increase. As admitted by
respondent, we merely made this statement as a suggestion in answer to the
respondents query as to where then, under the law, can such benefits be charged. We
were merely interpreting the meaning of the law within the confines of its provisions.
The law provides that 60% should go to wage increases and 40% to institutional
developments, student assistance, extension services, and return on investments (ROI).
Under the law, the last item ROI has flexibility sufficient to accommodate other
purposes of the law and the needs of the university. ROI is not set aside for any one
purpose of the university such as profits or returns on investments. The amount may be
used to comply with other duties and obligations imposed by law which the university
exercising managerial prerogatives finds cannot under present circumstances, be
funded by other revenue sources. It may be applied to any other collateral purpose of
the university or invested elsewhere. Hence, the framers of the law intended this
portion of the increases in tuition fees to be a general fund to cover up for the
universitys miscellaneous expenses and, precisely, for this reason, it was not so
delimited. Besides, ROI is a return or profit over and above the operating expenditures
of the university, and still, over and above the profits it may have had prior to the
tuition increase. The earning capacities of private educational institutions are not
dependent on the increases in tuition fees allowed by P.D. 451. Accommodation of the
allowances required by law require wise and prudent management of all the university
resources together with the incremental proceeds of tuition increases. Cognizance
should be taken of the fact that the private respondent had, before PD 451, managed to
grant all allowances required by law. It cannot now claim that it could not afford the
same, considering that additional funds are even granted them by the law in question.
We find no compelling reason, therefore, to deviate from our previous ruling in the
University of the East case even as we take the second hard look at the decision
requested by the private Respondent. This case was decided in 1982 when PDs 1614,
1634, 1678, and 1713 which are also the various Presidential Decrees on ECOLA were
already in force. PD 451 was interpreted in the light of these subsequent legislations
which bear upon but do not modify nor amend, the same. We need not go beyond the
ruling in the University of the East case.

Finally, disposing of the respondents charge of petitioners lack of legal capacity to sue,
suffice it to say that this question can no longer be raised initially on appeal or certiorari.
It is quite belated for the private respondent to question the personality of the
petitioner after it had dealt with it as a party in the proceedings below. Furthermore, it
was not disputed that the petitioner is a duly registered labor organization and as such
has the legal capacity to sue and be sued. Registration grants it the rights of a legitimate
labor organization and recognition by the respondent University is not necessary for it
to institute this action in behalf of its members to protect their interests and obtain
relief from grievances. The issues raised by the petitioner do not involve pure money
claims but are more intricately intertwined with conditions of employment.

WHEREFORE the petition for certiorari is hereby GRANTED. The private respondent is
ordered to pay its regular fulltime teachers/employees emergency cost of living
allowances for the semestral break from November 7 to December 5, 1981 and the
undistributed balance of the sixty (60%) percent incremental proceeds from tuition
increases for the same schoolyear as outlined above. The respondent Commission is
sustained insofar as it DENIED the payment of salaries for the suspended extra loads on
September 21, 1981.

LUZON STEVEDORING CO. INC., VS. LUZON MARINE DEPARTMENT UNION


G. R NO. L-9265
APRIL 29, 1957

Facts:

Respondents filed a petition with the Court of Industrial Relations containing the full
recognition of the right of collective bargaining close stop and check off. Also, that the
worked performed in excess of (8) hours bw paid on overtime pay of 50% the regular
rate of pay, and that work performed on Sunday and Legal holidays be paid double the
regular rate pay. In one of the hearing of the case, the court ruled that the employees
entitled to receive overtime pay for work rendered in excess of 8 hours on ordinary day
including Sunday and Legal Holidays. Herein, petitioner sought for the reconsideration
of the decision only in so far as it interpreted that the period during which seaman is
board a tugboat shall be considered as working time for purpose of the 8 hours Labor
Law. However, it was denied.

Issue:
Whether or not the definition for hours work, as presently applied to dry land
laborers, equally applicable to seaman.

Held:

The court ruled that there is no need to set for seaman a criterion different from that
applied to laborers on land, that the only thing to be done is to determine the meaning
and scope of the working place. A labourer, need not leave the premises of the factory
shop or boat in order that his period of rest shall be counted, it being enough that he
cease to be work may rest completely and leave or may leave at his will the spot
where he actually stays while working.

CAGAMPAN, ET. AL. VS. NLRC


G.R. NOS. 85122-24
MARCH 24, 1991
PARAS, J.

Facts:
On April 17 and 18,1985, petitioners, all seamen, entered into separate contracts of
employment with the Golden Light Ocean Transport, Ltd., through its local agency,
private respondent ACE MARITIME AGENCIES, INC. Thereafter, petitioners collectively
and/or individually filed complaints for non-payment of overtime pay, vacation pay and
terminal pay against private respondent. In addition, they claimed that they were made
to sign their contracts in blank. Likewise, petitioners averred that although they agreed
to render services on board the vessel Rio Colorado managed by Golden Light Ocean
Transport, Ltd., the vessel they actually boarded was MV "SOIC I" managed by Columbus
Navigation. Two (2) petitioners, Jorge de Castro and Juanito de Jesus, charged that
although they were employed as ordinary seamen (OS), they actually performed the
work and duties of Able Seamen (AB). Private respondent was furnished with copies of
petitioners' complaints and summons, but it failed to file its answer within the
reglementary period. Thus, on January 12, 1987, an Order was issued declaring that
private respondent has waived its right to present evidence in its behalf and that the
cases are submitted for decision the Philippine Overseas Employment Administration
(POEA) rendered a Decision dismissing petitioners' claim for terminal pay but granted
their prayer for leave pay and overtime pay.

Issue:
Whether Cagampan even without sufficient evidence of actual rendition of overtime
work, would automatically be entitled to overtime pay.

Held:
No. The NLRC ruling on the disallowance of overtime pay is ably supported by the fact
that petitioners never produced any proof of actual performance of overtime work. The
contract provision means that the fixed overtime pay of 30% would be the basis for
computing the overtime pay if and when overtime work would be rendered. Simply,
stated, the rendition of overtime work and the submission of sufficient proof that said
work was actually performed are conditions to be satisfied before a seaman could be
entitled to overtime pay which should be computed on the basis of 30% of the basic
monthly salary. In short, the contract provision guarantees the right to overtime pay but
the entitlement to such benefit must first be established.
Realistically speaking, a seaman, by the very nature of his job, stays on board a ship or
vessel beyond the regular eight-hour work schedule. For the employer to give him
overtime pay for the extra hours when he might be sleeping or attending to his personal
chores or even just lulling away his time would be extremely unfair and unreasonable.

NATIONAL DEVELOPMENT COMPANY VS. CIR


G.R. NO. L-15422
NOVERNBER 30, 1962
REGALA, J.

FACTS:
At the National Development Co., a government-owned and controlled corporation,
there were four shifts of work. One shift was from 8 a.m. to 4 p.m., while the three
other shifts were from 6 a.m. to 2 p.m; then from 2 p.m. to 10 p.m. and, finally, from 10
p.m. to 6 a.m. In each shift, there was a one-hour mealtime period, to wit: From (1) 11
a.m. to 12 noon for those working between 6 a.m. and 2 p.m. and from (2) 7 p.m. to 8
p.m. for those working between 2 p.m. and 10 p.m.
The records disclose that although there was a one-hour mealtime, petitioner
nevertheless credited the workers with eight hours of work for each shift and paid them
for the same number of hours. However, since 1953, whenever workers in one shift
were required to continue working until the next shift, petitioner instead of crediting
them with eight hours of overtime work, has been paying them for six hours only,
petitioner that the two hours corresponding to the mealtime periods should not be
included in computing compensation.

ISSUE:
Whether or not the mealtime breaks should be considered working time

RULING:
The CIR correctly concluded that work in petitioner company was continuous and
therefore the mealtime breaks should be counted as working time for purposes of
overtime compensation.
Petitioner gives an eight-hour credit to its employees who work a single shift say from 6
a.m. to 2 p.m. Why cannot it credit them sixteen hours should they work in two shifts?
There is another reason why this appeal should dismissed and that is that there is no
decision by the CIR en bancfrom which petitioner can appeal to this Court. As already
indicated above, the records show that petitioner's motion for reconsideration of the
order of March 19, 1959 was dismissed by the CIR en banc because of petitioner's
failure to serve a copy of the same on the union.

SIME DARBY PILIPINAS INC. VS NLRC


G.R. NO. 119205
APRIL 15, 1998
BELLOSILLO, J
.
Facts:
Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive tires,
tubes and other rubber products. Sime Darby Salaried Employees Association (ALU-
TUCP), private respondent, is an association of monthly salaried employees of petitioner
at its Marikina factory. Prior to the present controversy, all company factory workers in
Marikina including members of private respondent union worked from 7:45 a.m. to 3:45
p.m. with a 30 minute paid on call lunch break.
On 14 August 1992 petitioner issued a memorandum to all factory-based employees
advising all its monthly salaried employees in its Marikina Tire Plant, except those in the
Warehouse and Quality Assurance Department working on shifts, a change in work
schedule effective 14 September 1992 thus
7:45 A.M. 4:45 P.M. (Mon to Fri) 7:45 A.M. 11:45 P.M. (Sat).
Coffee break time will be ten minutes only anytime between:
9:30 A.M. 10:30 A.M. and 2:30 P.M. 3:30 P.M.
Lunch break will be between: 12:00 NN 1:00 P.M. (Mon to Fri).
Excluded from the above schedule are the Warehouse and QA employees who are on
shifting. Their work and break time schedules will be maintained as it is now.
Since private respondent felt affected adversely by the change in the work schedule and
discontinuance of the 30-minute paid on call lunch break, it filed on behalf of its
members a complaint with the Labor Arbiter for unfair labor practice, discrimination and
evasion of liability pursuant to the resolution of this Court the Labor Arbiter dismissed
the complaint on the ground that the change in the work schedule and the elimination
of the 30-minute paid lunch break of the factory workers constituted a valid exercise of
management prerogative and that the new work schedule, break time and one-hour
lunch break did not have the effect of diminishing the benefits granted to factory
workers as the working time did not exceed eight (8) hours.

Issue: Whether or not the act of management in revising the work schedule of its
employees and discarding their paid lunch break constitutive of unfair labor practice?

Ruling: The Court ruled that the revision of work schedule is a management prerogative
and does not amount to unfair labor practice in discarding the paid lunch break.
The right to fix the work schedules of the employees rests principally on their employer.
In the instant case petitioner, as the employer, cites as reason for the adjustment the
efficient conduct of its business operations and its improved production.
It rationalizes that while the old work schedule included a 30-minute paid lunch break,
the employees could be called upon to do jobs during that period as they were on call.
Even if denominated as lunch break, this period could very well be considered as
working time because the factory employees were required to work if necessary and
were paid accordingly for working.

With the new work schedule, the employees are now given a one-hour lunch break
without any interruption from their employer. For a full one-hour undisturbed lunch
break, the employees can freely and effectively use this hour not only for eating but also
for their rest and comfort which are conducive to more efficiency and better
performance in their work.

Since the employees are no longer required to work during this one-hour lunch break,
there is no more need for them to be compensated for this period. The Court agrees
with the Labor Arbiter that the new work schedule fully complies with the daily work
period of eight (8) hours without violating the Labor Code. Besides, the new schedule
applies to all employees in the factory similarly situated whether they are union
members or not.

MERCURY DRUG CO., INC., VS. DAYAO


G.R. NO. L-30452, SEPTEMBER 30, 1982

FACTS
This is a verified petition dated March 17, 1964 which was subsequently amended on
July 31, 1964 filed by Nardo Dayao and 70 others against Mercury Drug Co., Inc.,and/or
Mariano Que, President & General Manager, and Mercury Drug Co., Inc.2.Employees
Association praying, with respect to respondent corporation and its president and
general manager: 1) payment of their unpaid back wages for work done on Sundays and
legal holidays plus 25 % additional compensation from date of their employment up to
June 30, 1962; 2) payment of extra compensation on work done at night; 3)
reinstatement of Januario Referente and Oscar Echalar to their former positions with
back salaries; and, as against the respondent union, for its disestablishment and the
refund of the money it had collected from petitioners. The CIR sustained the claim of
the petitioners for payment of back wages corresponding to the first four hours work
rendered on every other Sunday and first four hours on legal holidays should be denied
for lack of merit. The motion for reconsideration was denied. Thus, the instant petition
contending that private respondents' claims for 25%Sunday and Legal Holiday premiums
are not supported by substantial evidence, thus infringing upon the cardinal rights of
the petitioner, and that assuming it is, such premiums are already included in the salary
of private respondents.

ISSUE
Whether or not private respondents are entitled to the 25% Sunday and Legal Holiday
premiums.

Ruling
The contention is without merit. While an employer may compel his employees to
perform service on such days, the law nevertheless imposes upon him the obligation to
pay his employees at least 25% additional of their basic or regular salaries. Under
Section 4 of C. A. No. 444, no person, firm or corporation, business establishment or
place of center of labor shall compel an employee or laborer to work during Sundays
and legal holidays unless he is paid an additional sum of at least twenty-five per centum
of his regular remuneration :Provided, However, That this prohibition shall not apply to
public utilities performing some public service such as supplying gas, electricity, power,
water, or providing means of transportation or communication. Although a service
enterprise, respondent company's employees are within the coverage of C. A. No. 444,
as amended known as the Eight Hour Labor Law, for they do not fall within the category
or class of employees or laborers excluded from its provisions. In not giving weight to
the evidence of the petitioner company, the respondent court sustained the private
respondents' evidence to the effect that their 25%additional compensation for work
done on Sundays and Legal Holidays were not included in their respective monthly
salaries. The private respondents presented evidence through the testimonies of Nardo,
Dayao, Ernesto Talampas, and Josias Federico who are themselves among the
employees who filed the case for unfair labor practice in the respondent court and are
private respondents herein. The petitioner- company's contention that the respondent
court's conclusion on the issue of the 25% additional compensation for work done on
Sundays and legal holidays during the first four hours that the private respondents had
to work under their respective contracts of employment was not supported by
substantial evidence is, therefore, unfounded

BISIG NG MANGGAGAWA NG PHILIPPINE REFINING CO., INC., VS. PHILIPPINE


REFINING CO., INC.,
G.R. NO. L-27761
SEPTEMBER 30, 1981

FACTS:
This is an appeal from the decision of the Court of First Instance of Manila dated
December 8,
1966,inCivil Case No. 65082, holding that Christmas bonus and other fringe benefits are
excluded in thecomputation of the overtime pay of the members of the appellant union
under Section 6, Article VI of the1965 collective bargaining agreement which reads as
follows:Overtime pay at the rate of regular base pay plus 50% thereof shag be paid for
allwork performed in excess of eight hours on ordinary days within the work week(that
is to say, Monday to Friday).On April 15,1966, the Bisig ng Manggagawa ng Philippine
Refining Company, Inc., as the representativeunion of the rank and file employees of the
Philippine Refining Co., Inc., filed with the Court of FirstInstance of Manila a petition for
declaratory relief praying, among others That a declaratory judgment be rendered
declaring and adjudicating the rights andduties of petitioner and respondent under the
above quoted provision of their Collective 13 - agreements and further declaring that
the Christmas bonus of onemonth or thirty days pay and other de determinable benefits
should be included for the purpose of computation of the overtime pay spread
throughout the twelvemonths period of each year from August, 1963 up to the present
and subsequentlyhereafter; and that respondent be therefore directed to pay such
differential in theovertime pay of all the employees of the herein respondent ;Petitioner
union contended that the respondent company was under obligation to include the
employees'Christmas bonus and other fringe benefits in the computation of their
overtime pay by virtue of the ruling of this Court in the case of NAWASA vs. NAWASA
Consolidated Unions, et all G.R. No. L-18938, August 31,1964, 11 SCRA 766.On May 3,
1966, the Philippine Refining Co.. Inc. filed its answer to the petition alleging that never
did theparties intend, in the 1965 CBA and in prior agreements, to include the
employees' Christmas bonus andother fringe benefits in the computation of the
overtime pay and that the company precisely agreed to arate of 50%, which is much
higher than the 25% required by the Eight-Hour Labor Law (Commonwealth Act No. 444,
as amended), on the condition that in computing the overtime pay only the
"regular base pay"would be considered. After the requisite pre-trial was held, the CFI
of Manila issued an order limiting the issues to the proper interpretation of the above
quoted provision of the 1965 CBA and to the applicability to the case of theNAWASA
ruling and requiring the parties to submit evidence as to the circumstances under which
thequestioned provision had been included in the agreement of 1965. After
presentations of respective witnesses, the CFI of Manila rendered a decision on
December 8, 1966,.Said court held that while the NAWASA ruling concerning the
meaning of the phrase "regular pay" of theEight-Hour Labor Law could be applied to
employees of private corporations like the Philippine RefiningCompany, the same was,
nevertheless, inapplicable to the case at bar which involved the interpretation of the
phrase "regular base pay which was different from "regular pay". It declared that
"regular base
pay"referred only to the basic or monthly pay exclusive of Christmas bonus and other fri
nge benefits.Furthermore, the validity of the provision of the 1965 collective bargaining
agreement concerning thecomputation of the employees' overtime pay on the basis of
their "regular base pay" was upheld by thecourt for the reason that the same was even
higher than the overtime pay prescribed by law.

PHILIPPINE NATIONAL BANK VS. PHILIPPINE NATIONAL BANK EMPLOYEES


ASSOCIATION (PEMA)
G.R. NO. L-30279
JULY 30, 1982
BARREDO, J.
FACTS: PNB and PNB Employees Association (PEMA) had a dispute regarding the proper
computation of overtime pay. PEMA wanted the cost of living allowance (granted in
1958) and longevity pay (granted in 1961) to be included in the computation. PNB
disagreed and the 2 parties later went before the CIR to resolve the dispute. CIR decided
in favor of PEMA and held that PNB should compute the overtime pay of its employees
on the basis of the sum total of the employees basic salary or wage plus cost of living
allowance and longevity pay. The CIR relied on the ruling in NAWASA v NAWASA
Consolidated Unions, which held that for purposes of computing overtime
compensation, regular wage includes all payments which the parties have agreed shall
be received during the work week, including differentiated payments for working at
undesirable times, such as at night and the board and lodging customarily furnished the
employee. This prompted PNB to appeal, hence this case.

ISSUE: WON the cost of living allowance and longevity pay should be included in the
computation of overtime pay as held by the CIR

HELD: NO, Overtime pay is for extra effort beyond that contemplated in the
employment contract; additional pay given for any other purpose cannot be included in
the basis for the computation of overtime pay. Absent a specific provision in the CBA,
the bases for the computation of overtime pay are 2 computations, namely:

WON the additional pay is for extra work done or service rendered
WON the same is intended to be permanent and regular, not contingent nor temporary
as a given only to remedy a situation which can change any time.

Longevity pay cannot be included in the computation of overtime pay for the very
simple reason that the contrary is expressly stipulated in the CBA, which constitutes the
law between the parties.

As regards cost of living allowance, there is nothing in Commonwealth Act 444 [or the
8-hour Labor Law, now Art. 87 Labor Code] that could justify PEMAs posture that it
should be added to the regular wage in computing overtime pay. C.A. 444 prescribes
that overtime work shall be paid at the same rate as their regular wages or salary, plus
at least 25% additional. The law did not define what is a regular wage or salary. What
the law emphasized is that in addition to regular wage, there must be paid an
additional 25% of that regular wage to constitute overtime rate of pay. Parties were
thus allowed to agree on what shall be mutually considered regular pay from or upon
which a 25% premium shall be based and added to makeup overtime compensation.

No rule of universal application to other cases may be justifiably extracted from the
NAWASA case. CIR relies on the part of the NAWASA decision where the SC cited
American decisions whose legislation on overtime is at variance with the law in this
jurisdiction. The US legislation considers work in excess of forty hours a week as
overtime; whereas, what is generally considered overtime in the Philippines is work in
excess of the regular 8 hours a day. It is understandably material to refer to precedents
in the US for purposes of computing weekly wages under a 40-hour week rule, since the
particular issue involved in NAWASA is the conversion of prior weekly regular earnings
into daily rates without allowing diminution or addition.

To apply the NAWASA computation would require a different formula for each and
every employee. It would require reference to and continued use of individual earnings
in the past, thus multiplying the administrative difficulties of the Company. It would be
cumbersome and tedious a process to compute overtime pay and this may again cause
delays in payments, which in turn could lead to serious disputes. To apply this mode of
computation would retard and stifle the growth of unions themselves as Companies
would be irresistibly drawn into denying, new and additional fringe benefits, if not those
already existing, for fear of bloating their overhead expenses through overtime which,
by reason of being unfixed, becomes instead a veritable source of irritant in labor
relations.

**Overtime Pay Rationale Why is a laborer or employee who works beyond the regular
hours of work entitled to extra compensation called, in this enlightened time, overtime
pay?

Verily, there can be no other reason than that he is made to work longer than what is
commensurate with his agreed compensation for the statutorily fixed or voluntarily
agreed hours of labor he is supposed to do. When he thus spends additional time to his
work, the effect upon him is multi- faceted; he puts in more effort, physical and/or
mental; he is delayed in going home to his family to enjoy the comforts thereof; he
might have no time for relaxation, amusement or sports; he might miss important pre-
arranged engagements; etc. It is thus the additional work, labor or service employed
and the adverse effects just mentioned of his longer stay in his place of work that justify
and are the real reasons for the extra compensation that is called overtime pay.

**Overtime Pay Definition The additional pay for service or work rendered or
performed in excess of 8 hours a day by employees or laborers in employment covered
by the 8 hour Labor Law [C.A. 444, now Art. 87 Labor Code] and not exempt from its
requirements. It is computed by multiplying the overtime hourly rate by the number of
hours worked in excess of eight.

Disposition decision appealed from is REVERSED

NATIONAL WATERWORKS & SEWERAGE AUTHORITY VS. NWSA CONSOLIDATED


UNION, JESUS CENTENO, ET AL.,
G.R. NO. L-26894-96
FEBRUARY 28, 1969
FERNANDO, J.
Facts: Domingo, discharged the function of a supervisor. Likewise, coordinating
engineer, Zurban since September 13, 1955 until the date of his retirement was
corporate legal counsel, and Fabregas, was the chief of the administrative division
during the period of his claim were concerned. They were required to work overtime
but was not paid overtime pay, the peititioer contending that the fall within the
category managerial employee which is exempted from being paid of overtime pay.
The Court of Industrial Relations decided the case in their favour.

Issue: Whether the private respondents fall within the category of managerial
employees.

Held: No. "The most obvious distinction of a 'managerial employee' is his participation in
formulating company policies. Another is his power to hire or fire employees, and under
Rep. Act No. 2377, his exemption from the rigid observance of regular office hours. The
Court fails to find any indication that their primary duties bear any direct relation with
the [Nawasa] management or that they help formulate its policies. Neither is there any
indication that the three movants have the power to hire or fire employees of the
[Nawasa]. On the contrary, the very exhibits presented by the [Nawasa] ... show that the
power to hire and fire, and to formulate policies exclusively belong to the Board of
Directors and the General Manager. What is more, all the three movants were required
to observe official time, so much so that any undertime or absence incurred by them
were deducted from their accrued vacation or sick leave. They had to accomplish their
daily time records in Civil Service Form No. 48, wherein they had to record their time of
arrivals and departures, hence lack the freedom to come and go to their offices, or
move about at their own pleasure, which is the unmistakable mark of a 'managerial
employee'." 6
It was the conclusion of respondent Court then: "For the purpose of Rep. Act No. 2377,
therefore, the movants do not fall within the category of 'managerial employees', hence
are not barred from claiming overtime." 7

DE LEON V PAMPANGA SUGAR DEVELOPMENT CO.


20 SCRA 628
SEPTEMBER 30, 1969
CASTRO, J.

Facts: The respondent Pampanga Sugar Development Company (PASUDECO) operates a


sugar central at San Fernando, Pampanga. The petitioners, 21 all told, were its security
guards required to work eight hours a day, seven days a week. On November 28, 1961
the petitioners filed with the CIR a complaint seeking payment to them of premium or
differential pay in the total amount P49,581.79, plus attorney's fees of P3,000 and costs
of suit. Upon the finding that the "petitioners were paid their monthly salaries plus 25%
additional compensation for work on Sundays and Holidays as provided for by law and
that work on said days is one of the terms and conditions of their employment as
security guards." The Court of Industrial Relations dismissed the case. The petitioners'
claim, in essence, is that under the authority of section 4 of Commonwealth Act 444 as
amended (Eight-Hour Labor Law), for a Sunday or legal holiday work of not more than
eight hours, each of them is entitled to his monthly salary and his premium or
differential compensation.

Issue: Whether or not the petitioners are entitled to the 25% premium pay who worked
on Sunday or legal holiday??

Held: Yes, The import of the law and the decision in Manalo is that for work on Sundays
and legal holidays, the employer must pay the employee: (1) his regular remuneration,
or 100%; and (2) an additional sum of at least 25% of the regular remuneration, which is
called the "premium pay." In other words, the pay for Sundays and legal holidays is
125% of the pay for ordinary days, but only the excess of 25% is premium pay. With
respect to employees paid on a monthly basis, the first 100% (of the 125%),
corresponding to the regular remuneration, may or may not be included in the monthly
salary. If it is, then the employee is entitled to collect only the premium of 25%. If it is
not, then the employee has a right to receive the entire 125%. The court en banc
affirmed the decision of Court of Industrial relations, there is a finding that the
"petitioners were paid their monthly salaries plus 25% additional compensation for
work on Sundays and holidays."

JOSE RIZAL COLLEGE VS. NLRC AND NATOW


G.R. NO. L-65482
DECEMBER 1, 1987

FACTS:
Petitioner is a non-stock, non-profit educational institution duly organized and existing
under the laws of the Philippines. It has three groups of employees categorized as
follows: (a) personnel on monthly basis, who receive their monthly salary uniformly
throughout the year, irrespective of the actual number of working days in a month
without deduction for holidays; (b) personnel on daily basis who are paid on actual days
worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on
the basis of student contract hour. Before the start of the semester they sign contracts
with the college undertaking to meet their classes as per schedule. Unable to receive
their corresponding holiday pay, as claimed, from 1975 to 1977.

ISSUE:
The sole issue in this case is whether or not the school faculty who according to their
contracts are paid per lecture hour and are entitled to unworked holiday pay.

HELD:
Petitioner maintains the position among others, that it is not covered by Book V of the
Labor Code on Labor Relations considering that it is a non- profit institution and that its
hourly paid faculty members are paid on a "contract" basis because they are required to
hold classes for a particular number of hours. if a regular week day is declared a holiday,
the school calendar is extended to compensate for that day. Thus petitioner argues that
the advent of any of the legal holidays within the semester will not affect the faculty's
salary because this day is not included in their schedule while the calendar is extended
to compensate for special holidays.

Regular holidays specified as such by law are known to both school and faculty members
as no class days;" certainly the latter do not expect payment for said unworked days, and
this was clearly in their minds when they entered into the teaching contracts.
On the other hand, both the law and the Implementing Rules governing holiday pay are
silent as to payment on Special Public Holidays.

Declared purpose of the holiday pay which is the prevention of diminution of the
monthly income of the employees on account of work interruptions is defeated when a
regular class day is cancelled on account of a special public holiday and class hours are
held on another working day to make up for time lost in the school calendar.

PREMISES CONSIDERED, the decision of respondent National Labor Relations


Commission is hereby set aside, and a new one is hereby RENDERED: (a) exempting
petitioner from paying hourly paid faculty members their pay for regular holidays,
whether the same be during the regular semesters of the school year or during
semestral, Christmas, or Holy Week vacations; (b) but ordering petitioner to pay said
faculty members their regular hourly rate on days declared as special holidays or for
some reason classes are called off or shortened for the hours they are supposed to have
taught, whether extensions of class days be ordered or not; in case of extensions said
faculty members shall likewise be paid their hourly rates should they teach during said
extensions.

SAN MIGUEL CORPORATION V. COURT OF APPEALS ET AL


G.R. NO. 146775
JANUARY 30, 2002
KAPUNAN, J.

Facts:

The Department of Labor and Employment conducted a routine inspection in San


Miguel Corporation, Iligan City and it was discovered that there was underpayment by
SMC of regular Muslim holiday pay to its employees. DOLE sent a copy of inspection
result to SMC which the latter contested the findings. SMC failed to submit proof and
hence the Director of DOLE of Iligan District Office issued a compliance order to pay
both its Muslim and non-Muslim employees the Muslim Holidays. SMC appealed to
DOLE main office but dismissed for having been filed late but later on reconsidered
because it is within reglementary period but still dismissed for lack of merit. Hence, this
present petition for certiorari.

Issue:
Whether or not non-Muslim employees working in Muslim areas is entitled to Muslim
Holiday Pay.

Held:
The Supreme Court dismissed the petition and ordered the petitioner to pay its non-
Muslim employees. The basis for this decision were Articles 169 and 170 of P.D. No.
1083 Code of Muslim Personal Laws which listed all official Muslim holidays and
provincies and cities where officially observed. In this case, SMC is located in Iligan
which is covered in the those provisions. Also Article 169 and 170 of PD No. 1083 should
be read in conjunction with Article 94 of Labor Code which provides for the right of
every worker to be paid of holiday pay.

Petitioner asserts Art.3(3) of PD No. 1083 provides that it shall be applicable only to
Muslims. However, the Court said that said article declares that nothing herein shall be
construed to operate to the prejudice of a non-Muslim. There should be no distinction
between Muslims and non-Muslims as regards payment of benefits for Muslim holidays.

It was said also that the The Court of Appeals did not err in sustaining Undersecretary
Espaol who stated: Assuming arguendo that the respondents position is correct, then
by the same token, Muslims throughout the Philippines are also not entitled to holiday
pays on Christian holidays declared by law as regular holidays. We must remind the
respondent-appellant that 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 workers faith or religion.

INSULAR BANK OF ASIA AND AMERICA EMPLOYEES UNION VS. INCIONG


G.R. NO. L 52415
OCTOBER 23, 1984

FACTS:

The Union filed a complaint against the bank for the payment of holiday pay before the then
Department of Labor, Regional Office IV in Manila. Conciliation having failed on June 20, 1975,
and upon the request of both parties, the case was certified for arbitration on July 7, 1975. On
August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered decision granting petitioner's
complaint for payment of holiday pay. Respondent bank did not appeal from the said decision.
Instead, it complied with the order of the Labor Arbiter by paying their holiday pay up to and
including January 1976. P.D. 850 was promulgated amending the provisions of the Labor Code
on the right to holiday pay. Accordingly by authority of Article 5 of the Labor Code, the
Department of Labor (now Ministry of Labor) promulgated the rules and regulations for the
implementation of holidays with pay. The section reads:
Status of employees paid by the month. Employees who are
uniformly paid by the month, irrespective of the number of working
days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days
in the month whether worked or not.
Policy Instruction 9 was issued by the then Secretary of Labor on April 23, 1976, interpreting the
said rule. The bank, by reason of the ruling laid down by the rule implementing Article 94 of the
Labor Code and by Policy Instruction 9, stopped the payment of holiday pay to an its employees.
On August 30, 1976, the Union filed a motion for a writ of execution to enforce the arbiter's
decision dated August 1975, which the bank opposed. On October 18, 1976, the Labor Arbiter,
instead of issuing a writ of execution, issued an order enjoining the bank to continue paying its
employees their regular holiday pay. On November 17, 1976, the bank appealed from the order
of the Labor Arbiter to the NLRC. On 20 June 1978, the NLRC promulgated its resolution
dismissing the banks appeal, and ordering the issuance of the proper writ of execution. On
February 21, - 1979, the bank filed with the Office of the Minister of Lab or a motion for
reconsideration/appeal with urgent prayer to stay execution. On August 13, 1979 the NLRC
issued an order directing the Chief of Research and Information of the Commission to compute
the holiday pay of the IBAA employees from April 1976 to the present in accordance with the
Labor Arbiter dated August 25, 1975. On November 10, 1979, the Office of the Minister of
Labor, through Deputy Minister Amado Inciong, issued an order setting aside the resolution of
the NLRC dated June 20, 1978, and dismissing the case for lack of merit.

Issue:

Whether or not the monthly paid employees are excluded from the benefits of holiday pay.

Held:

No. The provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear
and explicit it provides for both the coverage of and exclusion from the benefits. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the
benefit is principally intended for daily paid employees, when the law clearly states that every
worker shall be paid their regular holiday pay

Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by the
then Secretary of Labor are null and void since in the guise of clarifying the Labor Codes
provisions on holiday pay, they in effect amended them by enlarging the scope of their
exclusion.

From Article 92 of the Labor Code, as amended by Presidential Decree 850, and Article 32 of the
same Code, it is clear that monthly paid employees are not excluded from the benefits of
holiday pay. However, the implementing rules on holiday pay promulgated by the then
Secretary of Labor excludes monthly paid employees from the said benefits by inserting, under
17 Rule IV, of the implementing rules, Section 2, which provides that: employees who are
uniformly paid by the month, irrespective of the number of working days therein, with a salary
of not less than the statutory or established minimum wage shall be presumed to be paid for all
days in the month whether worked or not." Even if contemporaneous construction placed upon
a statute by executive officers whose duty is to enforce it is given great weight by the courts, still
if such construction is so erroneous, the same must be declared as null and void. So long, as the
regulations relate solely to carrying into effect the provisions of the law, they are valid. Where
an administrative order betrays inconsistency or repugnancy to the provisions of the Act, the
mandate of the Act must prevail and must be followed. A rule is binding on the Courts so long as
the procedure fixed for its promulgation is followed and its scope is within the statutory
authority granted by the legislature, even if the courts are not in agreement with the policy
stated therein or its innate wisdom. Further, administrative interpretation of the law is at best
merely advisory, for it is the courts that finally determine what the law means.

THE CHARTERED BANK EMPLOYEES ASSOCIATION


vs.
HON. BLAS F. OPLE, and THE CHARTERED BANK,

G.R. No. L-44717 August 28, 1985

FACTS:

On May 20, 1975, petitioner instituted a complaint with the Ministry of Labor and Employment
(MOLE) against private respondent Chartered Bank, for the payment of ten (10) unworked legal
holidays, as well as for premium and overtime differentials for worked legal holidays from November
1, 1974. Both the arbitrator and the National Labor Relations Commission (NLRC) ruled in favor of
the petitioners ordering the respondent bank to pay its monthly paid employees, holiday pay for the
ten (10) legal holidays effective November 1, 1974 and to pay premium or overtime pay differentials
to all employees who rendered work during said legal holidays. On appeal, the Minister of Labor set
aside the decision of the NLRC and dismissed the petitioner's claim for lack of merit basing its
decision on Section 2, Rule IV, Book Ill of the Integrated Rules and Policy Instruction No. 9.
Petitioners contends that the respondent Minister of Labors promulgation of Section 2, Rule IV,
Book III of the Integrated Rules and Policy Instruction No. 9 as guidelines for the interpretation of
Articles 82 and 94 of the Labor Code and in applying said guidelines to this case constitutes a grave
abuse of his discretion of his authority to promulgate rules and regulations to implement construe
and clarify the Labor Code On the other hand, the private respondent contends that the questioned
guidelines did not deprive the petitioner's members of the benefits of holiday pay but merely
classified those monthly paid employees whose monthly salary already includes holiday pay and
those whose do not, and that the guidelines did not deprive the employees of holiday pay.

Issue:

Whether or not the monthly salaries of the petitioner's members already include holiday pay

Held:

NO. The Court held that the issue in the case at bar, was the same issue raised and resolved in the
case of Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong (132 SCRA 663),
which the Court ruled that Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction
No. 9, are contrary to the provisions of the Labor Code and, therefore, invalid. Since the private
respondent premises its action on the invalidated rule and policy instruction, it is clear that the
employees belonging to the petitioner association are entitled to the payment of ten (10) legal
holidays under Articles 82 and 94 of the Labor Code, aside from their monthly salary. They are not
among those excluded by law from the benefits of such holiday pay.

CEZAR ODANGO VS. NLRC


G.R. NO. 147420
JUNE 10, 2004

FACTS:
Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday
to Friday and half of Saturday. After a routine inspection, the Regional Branch of the
Department of Labor and Employment ("DOLE") found ANTECO liable for underpayment
of the monthly salaries of its employees. On 10 September 1989, the DOLE directed
ANTECO to pay its employees wage differentials amounting to P1,427,412.75. ANTECO
failed to pay.

Thus, on various dates in 1995, thirty-three (33) monthly-paid employees filed


complaints with the NLRC Sub-Regional Branch VI, Iloilo City, praying for payment of
wage differentials, damages and attorneys fees. Labor Arbiter Rodolfo G. Lagoc ("Labor
Arbiter") heard the consolidated complaints.

On 29 November 1996, the Labor Arbiter rendered a Decision in favor of petitioners


granting them wage differentials amounting to P1,017,507.73 and attorneys fees of
10%. Florentino Tongson, whose case the Labor Arbiter dismissed, was the sole
exception.
ANTECO appealed the Decision to the NLRC on 24 December 1996. On 27 November
1997, the NLRC reversed the Labor Arbiters Decision. The NLRC denied petitioners
motion for reconsideration in its Resolution dated 30 April 1998. Petitioners then
elevated the case to this Court through a petition for certiorari, which the Court
dismissed for petitioners failure to comply with Section 11, Rule 13 of the Rules of
Court. On petitioners motion for reconsideration, the Court on 13 January 1999 set
aside the dismissal. Following the doctrine in St. Martin Funeral Home v. NLRC,4 the
Court referred the case to the Court of Appeals.
On 27 September 2000, the Court of Appeals issued a Resolution dismissing the petition
for failure to comply with Section 3, Rule 46 of the Rules of Court. The Court of Appeals
explained that petitioners failed to allege the specific instances where the NLRC abused
its discretion. The appellate court denied petitioners motion for reconsideration on 7
February 2001.

ISSUES:
Whether or not the petitioners are entitled to their money claims.

HELD:
No. The Court rules that the petitioners are not entitled to their money claims.
Petitioner claim based on Section 2, Rule IV, Book III of the Implementing Rules and
Policy Instructions No. 9 issued by the Secretary (then Minister) of Labor which the court
in its ruling on Insular Bank of Asia v. Inciong, declared the said rule as null and void
since in the guise of clarifying the Labor Codes provisions on holiday pay, they in effect
amended them by enlarging the scope of their exclusion.
And that even assuming that Section 2, Rule IV of Book III is valid, petitioners claim will
still fail. The basic rule in this jurisdiction is "no work, no pay." The right to be paid for
un-worked days is generally limited to the ten legal holidays in a year.15 Petitioners
claim is based on a mistaken notion that Section 2, Rule IV of Book III gave rise to a right
to be paid for un-worked days beyond the ten legal holidays. In effect, petitioners
demand that ANTECO should pay them on Sundays, the un-worked half of Saturdays
and other days that they do not work at all. Petitioners line of reasoning is not only a
violation of the "no work, no pay" principle, it also gives rise to an invidious
classification, a violation of the equal protection clause. Sustaining petitioners
argument will make monthly-paid employees a privileged class who are paid even if they
do not work.

Thus, Section 2 cannot serve as basis of any right or claim. Absent any other legal basis,
petitioners claim for wage differentials must fail.

UNION OF FILIPRO EMPLOYEES V. BENIGNO VIVAR, JR.


G.R. NO. 79255
JANUARY 20, 1992

Facts:

On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with
the National Labor Relations Commission (NLRC) a petition for declaratory relief seeking
a ruling on its rights and obligations respecting claims of its monthly paid employees for
holiday pay in the light of the Court's decision in
Chartered Bank Employees Association v Ople.

Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case
for voluntary arbitration and appointed respondent Benigno Vivar, Jr. as voluntary
arbitrator. On January 2, 1980, Arbitrator Vivar rendered a decision directing Filipro to
pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject
only to the exclusions and limitations specified in Article 82 and such other legal
restrictions as are provided for in the Code.
Filipro filed a motion for clarification seeking (1) the limitation of the award to three
years,(2) the exclusion of salesmen, sales representatives, truck drivers, merchandisers
and medical representatives from the award of the holiday pay, and (3) deduction from
the holiday pay award of overpayment for overtime, night differential, vacation and sick
leave benefits due to the use of 251 divisor. Petitioner UFE answered that the award
should be made effective from the date of effectivity of the Labor Code, that their sales
personnel are not field personnel and are therefore entitled to holiday pay, and that the
use of 251 as divisor is an established employee benefit which cannot be diminished.

Both Nestle and UFE filed their respective motions for partial reconsideration.
Respondent Arbitrator treated the two motions as appeals and forwarded the case to
the NLRC which issued a resolution remanding the case to the respondent arbitrator on
the ground that it has no jurisdiction to review decisions in voluntary arbitration cases
pursuant to Article 263 of the Labor Code. However, in a letter the respondent
arbitrator refused to take cognizance of the case reasoning that he had no more
jurisdiction to continue as arbitrator because he had resigned from service.

Issue:
Whether or not Nestle's sales personnel are entitled to holiday pay.

Ruling:
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field
personnel as "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." The Court finds
that the clause "whose time and performance is unsupervised by the employer" did not
amplify but merely interpreted and expounded the clause "whose actual hours of work
in the field cannot be determined with reasonable certainty." The former clause is still
within the scope and purview of Article 82 which defines field personnel. Hence, in
deciding whether or not an employee's actual working hours in the field can be
determined with reasonable certainty, query must be made as to whether or not such
employee's time and performance is constantly supervised by the employer.

The respondent arbitrator's order to change the divisor from 251 to 261 days would
result in a lower daily rate which is violative of the prohibition on non-diminution of
benefits found in Article 100 of the Labor Code. To maintain the same daily rate if the
divisor is adjusted to 261 days, then the dividend, which represents the employee's
annual salary, should correspondingly be increased to incorporate the holiday pay.
There is thus no merit in respondent Nestle's claim of overpayment of overtime and
night differential pay and sick and vacation leave benefits, the computation of which are
all based on the daily rate, since the daily rate is still the same before and after the grant
of holiday pay.
Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use
of 251 days as divisor must fail in light of the Labor Code mandate that "all doubts in the
implementation and interpretation of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." (Article 4). Nevertheless, in order to fully
settle the issues, the Court resolved to take up the matter of effectivity of the holiday
pay award raised by Nestle.

Applying the operative fact aforementioned doctrine to the case at bar, it is not far-
fetched that Nestle, relying on the implicit validity of the implementing rule and policy
instruction before this Court nullified them, and thinking that it was not obliged to give
holiday pay benefits to its monthly paid employees, may have been moved to grant
other concessions to its employees, especially in the collective bargaining agreement.
This possibility is bolstered by the fact that respondent Nestle's employees are among
the highest paid in the industry. With this consideration, it would be unfair to impose
additional burdens on Nestle when the non-payment of the holiday benefits up to 1984
was not in any way attributed to Nestle's fault.

The Court thereby resolves that the grant of holiday pay be effective, not from the date
of promulgation of the Chartered Bank case nor from the date of effectivity of the Labor
Code, but from the date of promulgation of the IBAA case.

WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION VS. TRAJANO, ET


AL.
G.R. NO. 114698
JULY 3, 1995
NARVASA, CJ.

FACTS: By virtue of the routine inspection conducted by a Labor Enforcement Officer,


Wellington Flour Mills owned by the petitioner-company was found non-payment of
regular holidays falling on a Sunday for monthly-paid employees. Wellington argued
that the monthly-paid employees already includes holiday pay for all regular holidays
and there is no legal basis for the finding of alleged non-payment of regular holidays
falling on a Sunday. It further contends that it pays its monthly paid employees a fixed
monthly compensation using the 314 factor which undeniably covers and already
includes payment for all the working days in a month as well as all the 10 un-worked
regular holidays within a year. The Regional Director ordered the petitioner to pay the
employees additional compensation corresponding to 4 extra working days. However,
the petitioner argued that the company, using the 314 factor already gave complete
payment of all compensation due to its workers. Petitioner appealed and was acted on
by the respondent Undersecretary. But still, Regional Directors decision was affirmed.
Hence, this petition.

ISSUE: Whether or not a monthly-paid employees, receiving a fixed monthly


compensation, is entitled to an additional pay aside from his usual holiday pay
whenever a regular holiday falls on a Sunday.

HELD: Regional Directors decision, affirmed by the Undersecretary, is nullified and set
aside. Every worker should be paid his regular daily wage during regular holidays; except
in retail and service establishments regularly employing less than 10 workers, even if the
worker does not work on these regular holidays. The Wellington had been paying its
employees a salary of not less than the statutory minimum wage and that the monthly
salary, thus, paid was not less than the statutory minimum wage multiplied by 365 days
divided by 12. Apparently the monthly salary was fixed by Wellington to provide for
compensation for every working day of the year including holidays specified by law and
excluding only Sundays. Wellington leaves no day unaccounted for, it is paying for all the
days of a year with the exception only of 51 Sundays.

JOSE RIZAL COLLEGE VS. NLRC


G.R. NO. L-65482
DECEMBER 1, 1987
PARAS, J.

FACTS
Petitioner is a non-stock, non-profit educational institution duly organized and existing
under the laws of the Philippines. It has three groups of employees categorized as
follows: (a) personnel on monthly basis, who receive their monthly salary uniformly
throughout the year, irrespective of the actual number of working days in a month
without deduction for holidays; (b) personnel on daily basis who are paid on actual days
worked and they receive unworked holiday pay and (c) collegiate faculty who are paid
on the basis of student contract hour. Before the start of the semester they sign
contracts with the college undertaking to meet their classes as per schedule.
Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977,
private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf
of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a
complaint against the college for said alleged non-payment of holiday pay, docketed as
Case No. R04-10-81-72. Due to the failure of the parties to settle their differences on
conciliation, the case was certified for compulsory arbitration.
The Labor Arbiter rendered a decision that the faculty who are paid per student
compensation per student contract hour are not entitled to unworked regular holiday
pay. On appeal, respondent National Labor Relations Commission in a decision
promulgated on June 2, 1982, modified the decision appealed from, in the sense that
teaching personnel paid by the hour are declared to be entitled to holiday pay.

ISSUE
Whether or not the school faculty who according to their contracts are paid per lecture
hour are entitled to unworked holiday pay.

RULING
Regular holidays specified as such by law are known to both school and faculty
members as no class days;" certainly the latter do not expect payment for said
unworked days, and this was clearly in their minds when they entered into the teaching
contracts. On the other hand, both the law and the Implementing Rules governing
holiday pay are silent as to payment on Special Public Holidays.
It is readily apparent that the declared purpose of the holiday pay which is the
prevention of diminution of the monthly income of the employees on account of work
interruptions is defeated when a regular class day is cancelled on account of a special
public holiday and class hours are held on another working day to make up for time lost
in the school calendar. Otherwise stated, the faculty member, although forced to take a
rest, does not earn what he should earn on that day. Be it noted that when a special
public holiday is declared, the faculty member paid by the hour is deprived of expected
income, and it does not matter that the school calendar is extended in view of the days
or hours lost, for their income that could be earned from other sources is lost during the
extended days. Similarly, when classes are called off or shortened on account of
typhoons, floods, rallies, and the like, these faculty members must likewise be paid,
whether or not extensions are ordered.

BALTAZAR VS SAN MIGUEL INC.


G.R. NO. L-23076
FEBRUARY 27,1969
DIZON, J.

FACTS:
The petitioner is the salesman-in-charge of San Miguel Brewery, Inc. in
Dagupan warehouse with a monthly pay of P240.00, P5.00 per diem and a commission
of P0.75 per case sold. On October 9, 1956, 8 days after Baltazar was appointed as the
salesman-in-charge, the regular employees in Dagupan warehousewent on strike
because of unjust treatment. Baltazar was recalled to appellants Manila Office on the
13th of October, 1956 upon theorder of his superior and conduct an investigation. The
investigationfound that the employees grievances were well founded. The next day, the
strikers returned to their work voluntarily. On October 15, the petitioner was informed
that he was not to return to Dagupan anymore but he still reported to work at the main
office from October 16 to November 2, 1956 waiting for assignment. From November 3
to December 19 on the same year, he absented himself from work without consent
from his superiors and without advising them or anybody else of the reason for his
prolonged absence. He was dismissed from work because of petitioners unauthorized
absence and if the company would consider its health, welfare and retirement plan
requiring sick leave, still the petitioner did inexcusable actions since sick leave, to be
considered authorized and excusable, must be certified to by the company physician
and the appellant-company informed that Baltazar was dismissed effective November
30, 1956. Baltazar initiated a complaint which the trial court ruled that Baltazars
dismissal was justified but, however, ordering San Miguel Brewery Inc. to pay Baltazar
one month separation pay, plus the cash value of 6 months accumulated sick leave.

Issue:
Whether or not the petitioner is entitled to one month separation pay and the cash
value of 6 months accumulated sick leave.

Held:
No, the petitioner is not entitled to one month separation pay and the cash value of 6
months accumulated sick leave. Under the Marcaida vs. Philippine Education Company
53 O.G. No. 23, RA 1052 makes reference to termination of employment, instead of
dismissal, to exclude employees separated from the service for causes attributable to
their own fault. It is limited in its operation, to cases of employment without definite
period. When the employment is for a fixed duration, the employer may terminate it
even before the expiration of a stipulated period, should there be a substantial breach
of obligations by the employee; in which event the latter is not entitles to advance
notice or separation pay. it would patently, be absurd to grant a right thereto to an
employee guilty of the same breach of obligation, when the employment is without a
definite period, as if he were entitled to greater protection than employees engaged for
a fixed duration. In connection with the question of whether or not petitioner is entitled
to the cash value of 6 months accumulated sick leave, it appears that while under the
last paragraph of Article 5 of appellants Rules and Regulations of Health, Welfare and
Retirement Plan, unused sick leave may be accumulated up to a maximum of 6 months,
the same is not commutable or payable in cash upon the employees option.

KWOK VS. PHILIPPINE CARPET MANUFACTURING CORPORATION


G.R. NO. 149252
APRIL 28, 2005
CALLEJO, SR., J.

FACTS:
Petitioner filed a complaint against the respondent corporation for the recovery of
accumulated vacation and sick leave credits before the NLRC. Petitioner clung to the
verbal contract with Mr. Lim, the President of the respondent corporation and his
father-in-law for his claims. Petitioner obtained favorable judgment. In their appeal,
respondent averred that the position the petition held was not entitled cash
conversions of vacation and sick leave credits. The decision of the Labor Arbiter was
reversed. The Court of Appeals affirmed the reversed decision.

Issue:
Whether the verbal contract in favor of petitioner is valid.

Held:
No. It is true that for a contract to be binding on the parties thereto, it need not be in
writing unless the law requires that such contract be in some form in order that it may
be valid or enforceable or that it be executed in a certain way, in which case that
requirement is absolute and independent. (Art. 1356, NCC) But the court disbelieved
petitioners testimony and gave credence and probative weight to the collective
testimonies of the employees and officers of the respondent corporation, including Mr.
Lim, whom the petitioner presented as a hostile witness. Even assuming that the
petitioner was entitled of such benefits, there was no record to show the record of
absences to arrive at the actual number of leave credits. There was no conformity of
such agreement with the Board and if so, such claim was already barred by prescription
under Article 291 of the Labor Code.

SONGCO, ET AL. VS. NATIONAL LABOR RELATIONS COMMISSION


G.R. NO. L-50999
MARCH 23, 1990
MEDIALDEA, J.

FACTS: Zuelig filed an application for clearance to terminate the services of Songco, and
others, on the ground of retrenchment due to financial losses. During the hearing, the
parties agreed that the sole issue to be resolved was the basis of the separation pay
due. The salesmen received monthly salaries of at least P400.00 and commission for
every sale they made.

The Collective Bargaining Agreements between Zuelig and the union of which Songco, et
al. were members contained the following provision: "Any employee who is separated
from employment due to old age, sickness, death or permanent lay-off, not due to the
fault of said employee, shall receive from the company a retirement gratuity in an
amount equivalent to one (1) month's salary per year of service."

The Labor Arbiter ordered Zuelig to pay Songco et al., separation pay equivalent to their
one month salary (exclusive of commissions, allowances, etc.) for every year of service
with the company.
The National Labor Relations Commission sustained the Arbiter.

ISSUE: Whether or not earned sales commissions and allowances should be included in
the monthly salary of Songco, et al. for the purpose of computing their separation pay.

RULING:

In the computation of backwages and separation pay, account must be taken not only of
the basic salary of the employee, but also of the transportation and emergency living
allowances.

Even if the commissions were in the form of incentives or encouragement, so that the
salesman would be inspired to put a little more industry on jobs particularly assigned to
them, still these commissions are direct remunerations for services rendered which
contributed to the increase of income of the employee. Commission is the recompense
compensation or reward of an agent, salesman, executor, trustee, receiver, factor,
broker or bailee, when the same is calculated as a percentage on the amount of his
transactions or on the profit to the principal. The nature of the work of a salesman and
the reason for such type of remuneration for services rendered demonstrate that
commissions are part of Songco, et al's wage or salary.

The Court takes judicial notice of the fact that some salesmen do not receive any basic
salary, but depend on commissions and allowances or commissions alone, although an
employer-employee relationship exists.

STATES MARINE CORPORATION vs. CEBU SEAMEN'S ASSOCIATION, INC.

FACTS
Petitioners States Marine Corporation and Royal Line, Inc. were engaged in the business
of marine coastwise transportation, employing therein several steamships of Philippine
registry. They had a collective bargaining contract with the respondent Cebu Seamen's
Association, Inc. On September 12, 1952, the respondent union filed with the Court of
Industrial Relations (CIR), a petition (Case No. 740-V) against the States Marine
Corporation, later amended on May 4, 1953, by including as party respondent, the
petitioner Royal Line, Inc. The Union alleged unfair labor practices which includes non-
payment of overtime pay, sick leave, vacation leave, reduction of salaries, requirement
of payment of P.40 per meal when employees are on board their vessels and illegal
dismissal for Captain Asensi. Petitioner claim that very much below 30 members were
members of the said union and they cannot be held liable as there is no law which
provides for the payment of sick leave or vacation leave to employees or workers of
private firms. With the payment of meals, they claimed that the Congress had in mind
that the amount of P.40 per meal, furnished the employees should be deducted from
the daily wages. And no illegal dismissal happened to Captain Asensi as such had his
working contract ended. A decision was rendered on February 21, 1957 in favor of the
respondent union. The motion for reconsideration thereof, having been denied, the
companies filed the present writ of certiorari, to resolve legal question involved.

Issue
Whether or not States Marine Corporation and Royal Line, Inc is liable for the following
unfair labor practices against the respondent union

Ruling
"Supplements", constitute extra remuneration or special privileges or benefits given to
or received by the laborers over and above their ordinary earnings or wages. "Facilities",
on the other hand, are items of expense necessary for the laborer's and his family's
existence and subsistence so that by express provision of law (Sec. 2[g]), they form part
of the wage and when furnished by the employer are deductible therefrom, since if they
are not so furnished, the laborer would spend and pay for them just the same. Meals
were freely given to crew members prior to August 4, 1951, while they were on the high
seas "not as part of their wages but as a necessary matter in the maintenance of the
health and efficiency of the crew personnel during the voyage", the deductions therein
made for the meals given after August 4, 1951, should be returned to them, and the
operator of the coastwise vessels affected should continue giving the same benefit..

When the work is not continuous, the time during which the laborer is not working and
can leave his working place and can rest completely shall not be counted", find no
application in his case. Petitioner should be bound to pay overtime pay for hours
beyond 8 hours of work

Considering, however, that Captain Asensi had been laid-off for a long time and that his
failure to report for work is not sufficient cause for his absolute dismissal, respondents
are hereby ordered to reinstate him to his former job without back salary but under the
same terms and conditions of employment existing prior to his lay-off, without loss of
seniority and other benefits already acquired by him prior to March 20, 1952.

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS VS. HON. LEONARDO


QUISUMBING, ET AL.
G.R. NO. 128845
JUNE 1, 2000
KAPUNAN, J.

Facts: Private respondent International School, Inc. (the School, for short), pursuant to
Presidential Decree 732, is a domestic educational institution established primarily for
dependents of foreign diplomatic personnel and other temporary residents.1 To enable
the School to continue carrying out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the School to employ its own
teaching and management personnel selected by it either locally or abroad, from
Philippine or other nationalities, such personnel being exempt from otherwise
applicable laws and regulations attending their employment, except laws that have
been or will be enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires.
The School grants foreign-hires certain benefits not accorded local-hires includeing
housing, transportation, shipping costs, taxes, and home leave travel allowance.
Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires.
The School justifies the difference on two "significant economic disadvantages" foreign-
hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The
School explains:

When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, "a legitimate labor union and the
collective bargaining representative of all faculty members"4 of the School, contested
the difference in salary rates between foreign and local-hires.

On September 7, 1995, petitioner filed a notice of strike. DOLE Acting Secretary,


Crescenciano B. Trajano, issued an Order resolving the parity and representation issues
in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently
denied petitioner's motion for reconsideration in an Order dated March 19, 1997.

Petitioner now seeks relief in this Court.

Issue: Whether the principle of equal pay for equal work shall be applied in the case at
bar.

Held: Yes.
School contends that petitioner has not adduced evidence that local-hires perform work
equal to that of foreign-hires. The Court finds this argument a little cavalier. If an
employer accords employees the same position and rank, the presumption is that these
employees perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more. That would
be adding insult to injury. The employer has discriminated against that employee; it is
for the employer to explain why the employee is treated unfairly. The employer in this
case has failed to discharge this burden. There is no evidence here that foreign-hires
perform 25% more efficiently or effectively than the local-hires. Both groups have
similar functions and responsibilities, which they perform under similar working
conditions. The School cannot invoke the need to entice foreign-hires to leave their
domicile to rationalize the distinction in salary rates without violating the principle of
equal work for equal pay. Salary means a recompense or consideration made to a
person for his pains or industry in another man's business. Whether it be derived from
"salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it
the fundamental idea of compensation for services rendered. While we recognize the
need of the School to attract foreign-hires, salaries should not be used as an enticement
to the prejudice of local-hires. The local-hires perform the same services as foreign-hires
and they ought to be paid the same salaries as the latter. For the same reason, the
"dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases
for the distinction in salary rates. The dislocation factor and limited tenure affecting
foreign-hires are adequately compensated by certain benefits accorded them which are
not enjoyed by local-hires, such as housing, transportation, shipping costs, taxes and
home leave travel allowances. The Constitution enjoins the State to "protect the rights
of workers and promote their welfare," "to afford labor full protection." The State,
therefore, has the right and duty to regulate the relations between labor and capital.

CEBU INSTITUTE OF TECHNOLOGY (CIT) VS. HON. BLAS OPLE


G.R. NO. L-58870
DECEMBER 18, 1987
CORTES, J.

FACTS:
The case was originated from a complaint filed with the Regional Office No. VII of the
Ministry of Labor on February 11, 1981 against petitioner Cebu Institute of Technology
(CIT) by private respondents, Panfilo Canete, et al., teachers of CIT, for non-payment of:
a) cost of living allowances (COLA) under Pres. Dec. Nos. 525, 1123, 1614, 1678 and
1713, b) thirteenth (13th) month pay differentials and c) service incentive leave. By
virtue of an Order issued by the then Deputy Minister of Labor Carmelo C. Noriel, a
labor-management committee composed of one representative each from the Ministry
of Labor and Employment (MOLE), the Minister of Education, Culture and Sports
(MECS), and two representatives each from CIT and from the teachers was created. Said
committee was to ascertain compliance with the legal requirements for the payment of
COLA, thirteenth (13th) month pay and service incentive leave.
On September 29, 1981 the Ministry of labor and employment ordered the CIT pay its
teaching staff their COLA and Service incentive leave and further directed to integrate
into the basic salaries of its teachers.
Issue:
WON the claimed of the petitioner that the payment of COLA by way of salary increases
is in line with Pres. Dec. No. 451 and that the payment of the thirteenth month pay to its
employees was exempt from the payment of service incentive leave to its teachers who
were employed on contract basis.

Ruling:
The Order of respondent Minister of Labor and Employment dated September 29, 1981
is sustained insofar as it ordered petitioner Cebu Institute of Technology to pay its
teaching staff the following:

Cost of living allowance under Pres. Dec.Nos.525 and 1123 from February 1978 up to
1981;

Cost of living allowance under Pres. Dec. Nos. 1614, 1634, 1678 and 1713; and
Service incentive leave due them from 1978.

ASOK BIG WEDGE MINING CO. INC V ASOK BIG WEDGE MUTUAL BENEFIT
ASSOCIATION
G.R. L-3276
MARCH 3, 1953

Facts: On September 4, 1950, demand was submitted to petitioner by respondent union


through its officers for various concession, among which were (a) an increase of P0.50 in
wages, (b) commutation of sick and vacation leave if not enjoyed during the year, (c)
various privileges, such as free medical care, medicine, and hospitalization, (d) right to a
closed shop, check off, etc., (e) no dismissal without prior just cause and with a prior
investigation, etc. Some of the demands, were granted by the petitioner, and the other
were rejected, and so hearings were held and evidence submitted on the latter. After
the hearing the respondent court rendered a decision, the most important provisions of
which were those fixing the minimum wage for the laborers at P3.20, declaring that
additional compensation representing efficiency bonus should not be included as part of
the wage.

Issue: Whether or not additional compensation representing efficiency bonus should


not be part of the minimum wage, and the wage increase is valid?

Held: Yes, that the P3 minimum wage fixed in the law is still far below what is
considered a fair and just minimum is shown by the fact that this amount is only for the
year after the law takes effect, as thereafter the law fixes it at P4. Neither may it be
correctly contended that the demand for increase is due to an alleged pernicious
practice. Frequent demands for increase are indicative of a healthy spirit of wakefulness
to the demands of a progressing and an increasingly more expensive world. We,
therefore, find no reason or ground for disturbing the finding contained in the decision
fixing the amount of P3.20 as the minimum wage. if it is an additional compensation
which the employer promised and agreed to give without any conditions imposed for its
payment, such as success of business or greater production or output, then it is part of
the wage. But if it is paid only if profits are realized or a certain amount of productivity
achieved, it cannot be considered part of the wages. In the case at bar, it is not payable
to all but to laborers only. It is also paid on the basis of actual production or actual work
accomplished. If the desired goal of production is not obtained or the amount of actual
work accomplished, the bonus does not accrue. It is evidence that under the
circumstances it is paid only when the labor becomes more efficient or more
productive. It is only an inducement for efficiency, a prize there for, not a part of the
wage.

DE RACHO VS. MUNICIPALITY OF ILIGAN


G.R. NO. L-23542
JANUARY 2, 1968
BENGZON, J.P., J.

FACTS:
Plaintiff Juana T. Vda. de Racho and the decedent, Manuel Racho, were spouses and had
five minor children. On July 1, 1954 the decedent was appointed as market cleaner in
the Municipality of Ilagan, Isabela, at the rate of P660.00 per annum (P55.00 monthly)
which amount he received up to June 30, 1958. On July 1, 1958, decedent's salary was
increased to P720.00 per annum (P60.00 monthly) by virtue of a promotional
appointment extended to him by the Municipal Mayor. Decedent was then paid the
money value of his accumulated leaves. Decedent died intestate at Ilagan. Plaintiff then
filed on December 9, 1960 a claim for salary differentials with the Regional Office of the
Department of Labor, which dropped the case later for lack of jurisdiction. Based on the
foregoing facts, the Court of First Instance of Isabela ruled that defendant Municipality
of Ilagan must pay P1,766.00 to plaintiff representing the wage differentials and
adjusted terminal leave of the decedent from December 9, 1957 to May 23, 1960, based
on the monthly wage rate of P120.00 pursuant to the Minimum Wage Law.

ISSUE:
Whether or not the shortage and lack of available funds and expected revenue of a
municipality validly exempt from complying with the Minimum Wage Law.

HELD:
The appealed judgment is affirmed. Lack of funds of a municipality does not excuse it
from paying the statutory minimum wages to its employees, which, after all, is a
mandatory statutory obligation of the municipality. To uphold such defense of lack of
available funds would render the Minimum Wage Law futile and defeat its purpose. This
also disposes of the implication appellant is trying to make that its duty to pay minimum
wages is not a statutory obligation which would command preference in the municipal
budget and appropriation ordinance.
Moreover, we cannot sanction appellant's proposition that it would eventually and
gradually implement the Minimum Wage Law, "if and when its revenues can afford." The
law insofar as it affects government employees took effect in 1952. It should have
been implemented or at least steps to implement it should have been taken right
then. To excuse the defendant municipality now would be to permit it to benefit from its
non-feasance. It would also make the effectivity of the law dependent upon the will and
initiative of said municipality without statutory sanction. Defendant's remedy, therefore,
is not to seek an excuse from implementing the law but, as the lower court suggested, to
upgrade and improve its tax collection machinery with a view towards realizing more
revenues. Or, it could for the present forego all non-essential expenditures.

PLANAS COMMERCIAL V. NLRC, A. OFIALDA, ET AL


NOV. 11, 2005
G.R. NO. 144619

FACTS:
In September 1993, Morente, Allauigan and Ofialda and others filed a complaint for
underpayment of wages, non payment of overtime pay, holiday pay, service incentive
leave pay, and premium pay for rest day and holiday and night shift differential against
petitioners in the Arbitration Branch of NLRC. It alleged that Cohu is engaged in the
business of wholesale of plastic products and fruits of different kinds with more than 24
employees. Respondents were hired on January 1990, May 1990 and July 19991 as
laborers and were paid below the minimum wage for the past 3 years. They were
required to work for more than 8 hours a day and never enjoyed the minimum benefits.
Petitioners filed their comment stating that the respondents were their helpers. The
Labor Arbiter rendered a decision dismissing the money claims. Respondents filed an
appeal with the NLRC where it granted the money claims of Ofialda, Morente and
Allaguian. Petitioners appealed with the CA but it was denied. It said that the company
having claimed of exemption of the coverage of the minimum wage shall have the
burden of proof to the claim. In the present petition, the Petitioners insist that C. Planas
Commercial is a retail establishment principally engaged in the sale of plastic products
and fruits to the customers for personal use, thus exempted from the application of the
minimum wage law; that it merely leases and occupies a stall in the Divisoria Market and
the level of its business activity requires and sustains only less than ten employees at a
time. Petitioners contend that private respondents were paid over and above the
minimum wage required for a retail establishment, thus the Labor Arbiter is correct in
ruling that private respondents claim for underpayment has no factual and legal basis.
Petitioners claim that since private respondents alleged that petitioners employed 24
workers, it was incumbent upon them to prove such allegation which private
respondents failed to do.

Issue:
Whether or not petitioner is exempted from the application of minimum wage law

Held:
The contention of the petitioners that they are exempted by the law must be proven.
The petitioners have not successfully shown that they had applied for the exemption.
R.A. No. 6727 known as the Wage Rationalization Act provides for the statutory
minimum wage rate of all workers and employees in the private sector. Section 4 of the
Act provides for exemption from the coverage, thus: Sec. 4. (c) Exempted from the
provisions of this Act are household or domestic helpers and persons employed in the
personal service of another, including family drivers. Also, retail/service establishments
regularly employing not more than ten (10) workers may be exempted from the
applicability of this Act upon application with and as determined by the appropriate
Regional Board in accordance with the applicable rules and regulations issued by the
Commission. Whenever an application for exemption has been duly filed with the
appropriate Regional Board, action on any complaint for alleged non-compliance with
this Act shall be deferred pending resolution of the application for exemption by the
appropriate Regional Board. In the event that applications for exemptions are not
granted, employees shall receive the appropriate compensation due them as provided
for by this Act plus interest of one percent (1%) per month retroactive to the effectivity
of this Act. Clearly, for a retail/service establishment to be exempted from the coverage
of the minimum wage law, it must be shown that the establishment is regularly
employing not more than ten (10) workers and had applied for exemptions with and as
determined by the appropriate Regional Board in accordance with the applicable rules
and regulations issued by the Commission.

DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. RUBEN ABARQUEZ


G.R. NO. 102132
MARCH 19, 1993
ROMERO, J.

Facts:
Petitioner-company and respondent-union entered into a collective bargaining
agreement which includes provisions on sick leave with pay benefits each year to
employees who have rendered at least one year of service with the former. Unused sick
leaves shall then be converted into cash by the end of the year. Said CBA provision
covers both intermittent and non-intermittent employees but with differences in the
manner of computing the pay. Upon renewing the CBA, the petitioner-companys new
assistant manager discontinued the intermittent employees unused sick leave cash
conversion on the basis that the last sentence of the CBA disqualifies them to enjoy such
benefits. Further, said assistant manager stated that his predecessor committed a
wrongfully understood and applied the said CBA. Eventually, Voluntary Arbitrator Ruben
Abarquez decided on the matter and ruled in favor of the respondent-union. Petitioner-
company disagreed with Abarquez.

Issue:
Whether or not petitioner-company has the right to remove the existing benefits of the
employees?

Ruling:
No. The Supreme Court finds two applicable legal basis: (1) the essence of the terms and
conditions of a CBA which is more than regular contract but which is the law that
regulates the relationship between labor and capital. It is impressed with public interest
which requires it to yield to the common good; (2) Article 100 of the Labor Code which
prohibits the construction of labor provision which would lead to the elimination, or in
any way diminution of the supplements or other employee benefits.

In the instant case, and after careful scrutiny of the CBA between the parties, it was
clarified that the cash conversion of the unused sick leaves are applicable to employees
who have complied with the following requirements: (1) the employee should be
regular and at least rendered one year of service with the company; and (2) said claim
should be certified by a company-designated physician. From the said requirements, it is
quite obvious that both intermittent and non-intermittent employees could qualify to
receive the unused sick leaves as long as they have met the requirements of the CBA.
The contention of the petitioner-company, as to the last sentence of the CBA, only
applies to those employees who have not successfully satisfied the said provisions
above.
Therefore, the Court dismissed the petition and affirmed the decision of Abarquez.

NESTL PHILIPPINES, INC. VS. NLRC


G.R. NO. 91231
FEBRUARY 4, 1991
GRIO-AQUINO, J.

FACTS:
Nestl Philippines, Inc., by this petition for certiorari, seeks to annul, on the ground of
grave abuse of discretion, the decision dated August 8, 1989 of the National Labor
Relations Commission (NLRC), Second Division, in Cert. Case No. 0522 entitled, "In Re:
Labor Dispute of Nestl Philippines, Inc." insofar as it modified the petitioner's existing
non-contributory Retirement Plan.
Four (4) collective bargaining agreements separately covering the petitioner's
employees in its:
Alabang/Cabuyao factories;
Makati Administration Office. (Both Alabang/Cabuyao factories and Makati office were
represented by the respondent, Union of Filipro Employees [UFE]);
Cagayan de Oro Factory represented by WATU; and
Cebu/Davao Sales Offices represented by the Trade Union of the Philippines and Allied
Services (TUPAS),
all expired on June 30, 1987.
Thereafter, UFE was certified as the sole and exclusive bargaining agent for all regular
rank-and-file employees at the petitioner's Cagayan de Oro factory, as well as its
Cebu/Davao Sales Office.
In August, 1987, while the parties, were negotiating, the employees at Cabuyao resorted
to a "slowdown" and walk-outs prompting the petitioner to shut down the factory.
Marathon collective bargaining negotiations between the parties ensued.
On September 2, 1987, the UFE declared a bargaining deadlock. On September 8, 1987,
the Secretary of Labor assumed jurisdiction and issued a return to work order. In spite
of that order, the union struck, without notice, at the Alabang/Cabuyao factory, the
Makati office and Cagayan de Oro factory on September 11, 1987 up to December 8,
1987. The company retaliated by dismissing the union officers and members of the
negotiating panel who participated in the illegal strike. The NLRC affirmed the dismissals
on November 2, 1988.

On January 26, 1988, UFE filed a notice of strike on the same ground of CBA deadlock
and unfair labor practices. However, on March 30, 1988, the company was able to
conclude a CBA with the union at the Cebu/Davao Sales Office, and on August 5, 1988,
with the Cagayan de Oro factory workers. The union assailed the validity of those
agreements and filed a case of unfair labor practice against the company on November
16, 1988.

After conciliation efforts of the National Conciliation and Mediation Board (NCMB)
yielded negative results, the dispute was certified to the NLRC by the Secretary of Labor
on October 28, 1988.
After the parties had filed their pleadings, the NLRC issued a resolution on June 5, 1989,
whose pertinent disposition regarding the union's demand for liberalization of the
company's retirement plan for its workers, provides as follows:
xxx xxx xxx
Retirement Plan
The company shall continue implementing its retirement plan modified as follows:
for fifteen years of service or less an amount equal to 100% of the employee's
monthly salary for every year of service;
more than 15 but less than 20 years 125% of the employee's monthly salary for every
year of service;
20 years or more 150% of the employee's monthly salary for every year of service.
(pp. 58-59,Rollo.)
Both parties separately moved for reconsideration of the decision.
On August 8, 1989, the NLRC issued a resolution denying the motions for
reconsideration. With regard to the Retirement Plan, the NLRC held:
Anent management's objection to the modification of its Retirement Plan, We find no
cogent reason to alter our previous decision on this matter.

While it is not disputed that the plan is non-contributory on the part of the workers, tills
does not automatically remove it from the ambit of collective bargaining negotiations.
On the contrary, the plan is specifically mentioned in the previous bargaining
agreements (Exhibits "R-1" and "R-4"), thereby integrating or incorporating the
provisions thereof to the agreement. By reason of its incorporation, the plan assumes a
consensual character which cannot be terminated or modified at will by either party.
Consequently, it becomes part and parcel of CBA negotiations.

However, We need to clarify Our resolution on this issue. When we increased the
emoluments in the plan, the conditions for the availment of the benefits set forth
therein remain the same. (p. 32, Rollo.)

On December 14, 1989, the petitioner filed this petition for certiorari,

ISSUE:
1 Whether or not the retirement plan being non-contributory,a non-issue in the CBA
negotiations?
2 Whether or not there was a grave abuse of discretion on the part of the NLRC in
resolving the issue?

HELD:
1 Since the retirement plan has been an integral part of the CBA since 1972, the Union's
demand to increase the benefits due the employees under said plan, is a valid CBA issue.
The deadlock between the company and the union on this issue was resolvable by the
Secretary of Labor, or the NLRC, after the Secretary had assumed jurisdiction over the
labor dispute (Art. 263, subparagraph [i] of the Labor Code).
2 The NLRC's resolution of the bargaining deadlock between Nestl and its employees is
neither arbitrary, capricious, nor whimsical. The benefits and concessions given to the
employees were based on the NLRC's evaluation of the union's demands, the evidence
adduced by the parties, the financial capacity of the Company to grant the demands, its
longterm viability, the economic conditions prevailing in the country as they affect the
purchasing power of the employees as well as its concommitant effect on the other
factors of production, and the recent trends in the industry to which the Company
belongs (p. 57, Rollo). Its decision is not vitiated by abuse of discretion.

R. TIANGCO AND V. TIANGCO V. HON. VICENTE LEOGARDO, JR.


G.R. NO. L-57636
MAY 16, 1983
CONCEPCION, JR., J.

Facts:
Petitioner R. Tiangco was a fishing operator engaged in deep-sea fishing while V.
Tiangco was a fishbroker.

Mr. Ilustrisimo and 26 others were batillios engaged by petitioners to unload fishcatch
from the vessels and take them to the fish stall. The work of these batillios was limited
to days of arrival of the fishing vessels, hence, they work only a few days in a month
averaging 4 hours a day.

In April 1980, Mr. Illustrisimo, and others filed a complaint against the Tiangcos for (1)
nonpayment of legal holiday pay, (2) service incentive leave pay, as well as (3)
underpayment of emergency cost-of-living allowances [ECOLA] which used to be paid in
full irrespective of their work days.

The Tiangcos denied the laborers; contentions. But as regards the claim for emergency
allowance differentials, they admitted that they discontinued their practice of paying a
fixed monthly allowance, and allowances for nonworking days. They invoked the
principle of No work, no pay.

Ruling:

The workers claim is valid. Since the Tiangcos had been paying the workers a fixed
monthly emergency allowance since November 1976 to February 1980, as a matter of
practice and/or verbal agreement between the parties, the discontinuance of the
practice and/or verbal agreement between the petitioners and the private respondents
contravened the provisions of the Labor Code, particularly Article 100. It prohibits the
elimination or diminution of existing benefits such as the ECOLA. [Note that the monthly
allowance was initiated in November 1976, two years after the Labor Code was
promulgated in 1974.]

Section 15 of the rules on P.D. No. 525 and Sec. 16 of the rules on P.D. No. 1123 also
prohibit the diminution of any benefit granted to the employees under existing laws,
agreements and voluntary employer practice.

GLOBE MACKAY CABLE AND RADIO CORPORATION VS. NLRC,FFW


G.R. NO. 74156
JUNE 29, 1988
MELENCIO-HERRERA, J.,

FACTS: Wage Order No. 6 increased the cost-of -living allowance of non- Agricultural
workers in the private sector. Petitioner corporation (GMCR) complied with the said
Wage Order by paying its monthly-paid employees the mandated P3.00 per day COLA.
However, in computing said COLA, GMCR multiplied the P3.00 daily COLA by 22days,
which is the number of working days in the company.

Respondent Union disagreed with the computation of the monthly COLA claiming that
the daily COLA rate of P3.00 should be multiplied by 30 days to arrive at the monthly
COLA rate. The union alleged furthermore that prior to the effectivity of Wage Order
No. 6, GMCR had been computing and paying the monthly COLA on the basis of thirty
(30) days per month and that this constituted an employer practice, which should not be
unilaterally withdrawn.

ISSUE: Whether or not petitioner, in computing COLA based on the number of working
days of the company , violated Article100 of the Labor Code of the Philippines

HELD: There is no violation of Article 100 of the Labor Code on prohibition of wage
diminution. The primordial consideration for entitlement to COLA is that basic wage is
being paid. In other words, the payment of COLA is mandated only for the days that the
employees are paid their basic wage, even if said days are un worked. So that, on the
days that employees are not paid their basic wage, the payment of COLA is not
mandated. Peculiar to this case, however, is the circumstance that pursuant to the
Collective Bargaining Agreement (CBA) between Petitioner and Respondent Union, the
monthly basic pay is computed on the basis of five (5) days a week, or twenty two(22)
days a month. In determining the hourly rate of monthly paid employees for purposes of
computing overtime pay, the monthly wage is divided by the number of actual work
days in a month and then, by eight (8) working hours. If a monthly-paid employee
renders overtime work, he is paid his basic salary rate plus one-half thereof. Thus,
where the company observes a 5-day work week, it will have to be held that the COLA
should be computed on the basis of twenty two (22) days, which is the period during
which the employees of petitioner receive their basic wage. The CBA is the law between
the parties and, if not acceptable, can be the subject of future re-negotiation.

Payment in full by petitioner of the COLA before the execution of the CBA incompliance
with Wage Orders Nos. 1 to 5, should not be construed as constitutive of voluntary
employer practice, which cannot now be unilaterally withdrawn by petitioner. To be
considered as such, it should have been practiced over a long period of time, and must
be shown to have been consistent and deliberate. Adequate proof is wanting in this
respect. The test of long practice has been enunciated in Oceanic Pharmaceutical
Employees Union vs. Inciong such that respondent company agreed to continue giving
holiday pay knowing fully well that said employees are not covered by the law requiring
payment of holiday pay."Absent clear administrative guidelines, petitioner cannot be
faulted for erroneous application of the law. Payment may be said to have been made
by reason of a mistake in the construction or application of a "doubtful or difficult
question of law."Since it is a past error that is being corrected, no vested right may be
said to have arisen nor any diminution of benefit under Article 100 of the Labor Code
may be said to have resulted by virtue of the correction.

SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF


THE PHILIPPINES (SMTFM-UWP VS. NLRC.
G.R. NO. 113856
SEPTEMBER 7, 1998
ROMERO, J.

FACTS
Petitioner Samahang Manggagawa sa Top Form Manufacturing United Workers of
the Philippines (SMTFM) was the certified collective bargaining representative of all
regular rank and file employees of private respondent Top Form Manufacturing
Philippines, Inc.
he charge arose from the employer's refusal to grant across-the-board increases to its
employees in implementing Wage Orders Nos. 01 and 02 of the Regional Tripartite
Wages and Productivity Board of the National Capital Region (RTWPB-NCR). Such refusal
was aggravated by the fact that prior to the issuance of said wage orders, the employer
allegedly promised at the collective bargaining conferences to implement any
government-mandated wage increases on an across-the-board basis.

ISSUE
Whether or not the employer committed unfair labor practice by bargaining in bad faith
and discriminating against its employees.

RULING
The basic premise of this argument is definitely untenable. To start with, if there was
indeed a promise or undertaking on the part of private respondent to obligate itself to
grant an automatic across-the-board wage increase, petitioner union should have
requested or demanded that such "promise or undertaking" be incorporated in the CBA.
After all, petitioner union has the means under the law to compel private respondent to
incorporate this specific economic proposal in the CBA. It could have invoked Article 252
of the Labor Code defining "duty to bargain," thus, the duty includes "executing a
contract incorporating such agreements if requested by either party." Petitioner union's
assertion that it had insisted on the incorporation of the same proposal may have a
factual basis considering the allegations in the aforementioned joint affidavit of its
members. However, Article 252 also states that the duty to bargain "does not compel
any party to agree to a proposal or make any concession." Thus, petitioner union may
not validly claim that the proposal embodied in the Minutes of the negotiation forms
part of the CBA that it finally entered into with private respondent.

The Court likewise finds unmeritorious petitioner union's contention that by its failure
to grant across-the-board wage increases, private respondent violated the provisions of
Section 5, Article VII of the existing CBA as well as Article 100 of the Labor Code.
We agree with the Labor Arbiter and the NLRC that no benefits or privileges previously
enjoyed by petitioner union and the other employees were withdrawn as a result of the
manner by which private respondent implemented the wage orders. Granted that
private respondent had granted an across-the-board increase pursuant to Republic Act
No. 6727, that single instance may not be considered an established company practice.
Petitioner union's argument in this regard is actually tied up with its claim that the
implementation of Wage Orders Nos. 01 and 02 by private respondent resulted in wage
distortion.

PAG-ASA STEEL WORKS, INC. VS. CA AND PAG-ASA STEEL WORKERS UNION
G.R. NO.166647
MARCH 31, 2006

FACTS:
Petitioner Pag-Asa Steel Works, Inc. is a corporation duly organized and existing under
Philippine laws and is engaged in the manufacture of steel bars and wire rods. Pag-Asa
Steel Workers Union is the duly authorized bargaining agent of the rank-and-file
employees.

RTWPB of NCR issued a wage order which provided for a P 13.00 increase of the salaries
receiving minimum wages. The Petitioner and the union negotiated on the increase.
Petitioner forwarded a letter to the union with the list of adjustments involving rank and
file employees. In September 1999, the petitioner and union entered into an collective
bargaining agreement where it provided wage adjustments namely P15, P25, P30 for
three succeeding year. On the first year, the increase provided were followed until
RTWPB issued another wage order where it provided for a P25.50 per day increase in
the salary of employees receiving the minimum wage and increased the minimum wage
to P223.50 per day. Petitioner paid the P25.50 per day increase to all of its rank-and-file
employees.

On November 2000, Wage Order No. NCR-08 was issued where it provided the increase
of P26.50 per day. The union president asked that the wage order be implemented
where petitioner rejected the request claiming that there was no wage distortion and it
was not obliged to grant the wage increase. The union submitted the matter for
voluntary arbitration where it favored the position of the company and dismissed the
complaint. The matter was elevated to CA where it favored the respondents. Hence, this
petition.

Issue:
Whether or not the company was obliged to grant the wage increase under Wage Order
No. NCR-08 as a matter of practice.
Held:
The Court favors the petitioner that wage increase shall not be granted by virtue of CBA
or matter of practice by the company. It is submitted that employers unless exempt are
mandated to implement the said wage order but limited to those entitled thereto.
There is no legal basis to implement the same across-the-board. A perusal of the record
shows that the lowest paid employee before the implementation of Wage Order #8 is
P250.00/day and none was receiving below P223.50 minimum. This could only mean
that the union can no longer demand for any wage distortion adjustment. The provision
of wage order #8 and its implementing rules are very clear as to who are entitled to the
P26.50/day increase, i.e., "private sector workers and employees in the National Capital
Region receiving the prescribed daily minimum wage rate of P223.50 shall receive an
increase of Twenty-Six Pesos and Fifty Centavos (P26.50) per day," and since the lowest
paid is P250.00/day the company is not obliged to adjust the wages of the workers.
The provision in the CBA that "Any Wage Order to be implemented by the Regional
Tripartite Wage and Productivity Board shall be in addition to the wage increase
adverted above" cannot be interpreted in support of an across-the-board increase. If
such were the intentions of this provision, then the company could have simply
accepted the original demand of the union for such across-the-board implementation,
as set forth in their original proposal. The fact that the company rejected this proposal
can only mean that it was never its intention to agree, to such across-the-board
implementation. Wage Order No. NCR-08 clearly states that only those employees
receiving salaries below the prescribed minimum wage are entitled to the wage increase
provided therein, and not all employees across-the-board as respondent Union would
want petitioner to do. Considering therefore that none of the members of respondent
Union are receiving salaries below the P250.00 minimum wage, petitioner is not obliged
to grant the wage increase to them.

Moreover, to ripen into a company practice that is demandable as a matter of right, the
giving of the increase should not be by reason of a strict legal or contractual obligation,
but by reason of an act of liberality on the part of the employer. Hence, even if the
company continuously grants a wage increase as mandated by a wage order or pursuant
to a CBA, the same would not automatically ripen into a company practice.

NATIONAL SUGAR REFINERIES CORP V. NLRC


G.R. NO. 101761
MARCH 24, 1993
REGALADO, J.

Facts:
Petitioner National Sugar Refineries Corporation (NASUREFCO), a corporation which is
fully owned and controlled by the Government, operates three (3) sugar refineries
located at Bukidnon, Iloilo and Batangas. Private respondent union represents the
former supervisors of the NASUREFCO Batangas Sugar Refinery. In 1988, petitioner
implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file
to department heads. We glean from the records that for about ten years prior to the JE
Program, the members of respondent union were treated in the same manner as rank-
and file employees. As such, they used to be paid overtime, rest day and holiday pay
pursuant to the provisions of Articles 87, 93 and 94 of the Labor Code as amended with
the implementation of the JE Program, members of respondent union were re-classified
under levels S-5 to S-8 which are considered managerial staff for purposes of
compensation and benefits.

In June 1990, the members of herein respondent union filed a complainant with the
executive labor arbiter for non-payment of overtime, rest day and holiday pay allegedly
in violation of Article 100 of the Labor Code.

In 1991, Executive Labor Arbiter Pido directed NASUREFCO to pay for the wages
complained of. On appeal, in a decision promulgated on July 1991, respondent National
Labor Relations Commission (NLRC) affirmed the decision of the labor arbiter on the
ground that the members of respondent union are not managerial employees, and,
therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC
declared that these supervisory employees are merely exercising recommendatory
powers subject to the evaluation, review and final action by their department heads.

Issue:
Whether the Supervisors are considered Managerial Employees and should no longer
receive overtime, rest day and holiday pay.

Held:
Yes. Under Art. 82 Coverage. The provisions of this title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined by the
Secretary of Labor in Appropriate regulations. As used herein, 'managerial employees'
refer to those whose primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof, and to other
officers or members of the managerial staff. It is the submission of petitioner that while
the members of respondent union, as supervisors, may not be occupying managerial
positions, they are clearly officers or members of the managerial staff because they
meet all the conditions prescribed by law and, hence, they are not entitled to overtime,
rest day.
Quintessentially, with the promotion of the union members, they are no longer entitled
to the benefits which attach and pertain exclusively to their positions. Entitlement to
the benefits provided for by law requires prior compliance with the conditions set forth
therein. With the promotion of the members of respondent union, they occupied
positions which no longer met the requirements imposed by law. Their assumption of
these positions removed them from the coverage of the law, ergo, their exemption
there from. As correctly pointed out by petitioner, if the union members really wanted
to continue receiving the benefits which attach to their former positions, there was
nothing to prevent them from refusing to accept their promotions and their
corresponding benefits. As the saying goes by, they could not, as a simple matter of law
and fairness, get the best of both worlds at the expense of NASUREFCO.

Promotion of its employees is one of the jurisprudentially-recognized exclusive


prerogatives of management, provided it is done in good faith. In the case at bar,
private respondent union has miserably failed to convince this Court that the petitioner
acted implementing the JE Program. There is no showing that the JE Program was
intended to circumvent the law and deprive the members of respondent union of the
benefits they used to receive.

AMERICAN WIRE & CABLE DAILY RATED EMPLOYEES UNION VS. AMERCAN WIRE &
CABLE CO., INC., & THE COURT OF APPEALS
G.R. NO. 155059
APRIL 29, 2005

Facts: American Wire and Cable Co., Inc., is a corporation engaged in the manufacture
of wires and cables. There are two unions in this company, the American Wire and Cable
Monthly-Rated Employees Union and the American Wire and Cable Daily-Rated
Employees Union.

On 16 February 2001, an original action was filed before the NCMB of the Department
of Labor and Employment by the two unions for voluntary arbitration. They alleged that
the private respondent, without valid cause, suddenly and unilaterally withdrew and
denied certain benefits and entitlements which they have long enjoyed. These are
Service Award, 35% premium pay of an employees basic pay for the work rendered
during Holy Monday, Holy Tuesday, Holy Wednesday, December 23, 26, 27, 28 and 29,
Christmas Party and Promotional Increase.

Issue: Whether or not the respondent company violated Article 100 of the Labor Code.

Ruling: The Court ruled that company is not guilty of violating Art. 100 of the Labor
Code.

Article 100 of the Labor Code provides:

PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. Nothing in this


Book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code.
The certain benefits and entitlements are considered bonuses. A bonus can only be
enforceable and demandable if it has ripened into a company practice. It must also be
expressly agreed by the employer and employee or it must be on a fixed amount.

The assailed benefits were never subjects of any agreement between the union and the
company. It was never incorporated in the CBA. Since all these benefits are in the form
of bonuses, it is neither enforceable nor demandable.

TRADERS ROYAL BANK VS. NLRC


G.R. NO. 88168
AUGUST 30, 1990

FACTS
On November 1986, TRB employees union filed a complaint with the NLRC for
diminution of benefits regarding holiday pay, mid-year and year-end bonuses.2.NLRC
ordered the Bank to pay the employees holiday pay differentials for 1983-1986, as well
as mid-year and year-end bonus differential for 1986.

ISSUE
Did the NLRC abuse its discretion in ordering the payment of mid-year and year-end
bonus differentials?

HELD
YES. A bonus is a gratuity or an act of liberality of the giver which the recipient has no
right to demand as a matter of right. The granting of bonus is basically a management
prerogative which cannot be forced upon the employer. In the case at bar, the matter of
giving bonuses over and above lawful salaries and allowances is entirely on the profits
realized by the Bank. In 1986, the Bank weakened considerably due to suspicions that it
was a Marcos-owned and controlled bank, and was placed under sequestration by the
PCGG.The union contention that the granting of bonuses has ripened into a company
practice that may not be adjusted to the prevailing financial condition of the Bank, has
no legal or moral bases. Its fiscal condition having declined, the Bank may not be forced
to give bonuses it cannot pay, and in effect, be penalized for its past generosity to its
employees. There can be no diminution of benefits because bonuses are not part of
labor standards in the same class as salaries, cost of living allowances, holiday pay and
leave benefits. The NLRC is modified by deleting the award for bonus differentials for
1986

NATIONAL FEDERATION OF SUGAR WORKERS (NFSW) VS. OVAJERA


G.R. NO. L- 59743
MAY 31, 1982
PLANA, J.

FACTS:
In 1981, NFSW struck allegedly to compel the payment of the 13th month pay under PD
851, in addition to the Christmas, milling and amelioration bonuses being enjoyed by
CAC workers. The decision having become final and executory entry of judgment was
made. After the Marcopper decision had become final, NFSW renewed its demand that
CAC give the 13th month pay. CAC refused, NFSW filed with the Ministry of Labor and
Employment (MOLE) Regional Office in Bacolod City a notice to strike based on non-
payment of the 13th month pay. Six days after, NFSW struck.

ISSUE:
Whether or not under Presidential Decree 851 (13th Month Pay Law), CAC is obliged to
give its workers a 13th month salary in addition to Christmas, milling and amelioration
bonuses, the aggregate of which admittedly exceeds by far the disputed 13th month
pay?

HELD:
CAC is obliged to give its workers a 13th month salary in addition to Christmas, milling
and amelioration bonuses stipulated in a collective bargaining agreement amounting to
more than a months pay. When this agreement was forged on November 30,1981, the
original decision dismissing the petition in the aforecited Marcopper case had already
been promulgated by this Court. On the votes of only 7Justices, including the
distinguished Chief Justice, the petition of Marcopper Mining Corp. seeking to annul the
decision of Labor Deputy Minister Amado Inciong granting a 13th month pay to
Marcopper employees (in addition to mid- year and Christmas bonuses under a CBA)
had been dismissed. But amotion for reconsideration filed by Marcopper was pending as
of November 30, 1981. In December 1981,the original decision was affirmed when this
Court finally denied the motion for reconsideration. But theresolution of denial was
supported by the votes of only 5 Justices. The Marcopper decision is therefore a Court
decision but without the necessary eight votes to be doctrinal. This being so, it cannot
be said that the Marcopper decision "clearly held" that "the employer is liable to pay a
13th month pay separate and distinct from the bonuses already given," within the
meaning of the NFSW-CAC compromise agreement. At any rate, in view of the rulings
made herein, NFSW cannot insist on its claim that its members are entitled to a 13th
month pay in addition to the bonuses already paid by CAC. WHEREFORE, the petitionis
dismissed for lack of merit. No costs.

UNIVERSAL CORN PRODUCTS VS. NLRC


G.R. NO.L-60337
AUG. 21, 1987
SARMIENTO, J.

FACTS:
In 1972, the petitioner and the Universal Corn Products Workers Union entered into a
collective bargaining agreement. The COMPANYagrees to grant all regular workers
within the bargaining unit with at least one (1) year of continuous service, a Christmas
bonusequivalent to the regular wages for seven (7) working days. The agreement had
a duration of three years. On account however of differences between the parties with
respect to certain economic issues, the collective bargaining agreement in question
expired withoutbeing renewed. In 1979, the parties entered into an "addendum"
stipulating certain wage increases covering the years from 1974 to1977.Simultaneously,
they entered into a collective bargaining agreement for the years from 1979 to 1981.
Like the "addendum," the newcollective bargaining agreement did not refer to the
"Christmas bonus" theretofore paid but dealt only with salary adjustments.According to
the petitioner, the new agreements deliberately excluded the grant of Christmas bonus
with the enactment of PresidentialDecree No. 851.It further claims that since 1975,
it had been paying its employees 13th-month pay pursuant to the Decree. For failure of
the petitioner topay the seven-day Christmas bonus for 1975 to 1978 inclusive, in
accordance with the 1972 CBA, the union went to the labor arbiter forrelief. In his
decision, the labor arbiter ruled that the payment of the 13th month pay precluded the
payment of further Christmas bonus.The union appealed to NLRC. The NLRC set aside
the decision of the labor arbiter appealed from and entered another one,
"directingrespondent company now the petitioner to pay the members concerned of
complainants union their 7-day wage bonus in accordancewith the 1972 CBA from 1975
to 1978.

ISSUE:
Whether or not the Christmas bonus can be considered as 13th month pay

HELD:
The collective bargaining agreement accords a reward, in this case, for loyalty, to certain
employees. This is evident from the stipulationgranting the bonus in question
to workers "with at least one (1) year of continuous service is a purpose not found in
P.D. 851. It isclaimed, however, that as a consequence of the impasse between the
parties beginning 1974 through 1979, no collective bargainingagreement was in force
during those intervening years. Hence, there is allegedly no basis for the money award
granted by therespondent labor body.The fact, therefore, that the new agreements are
silent on the seven-day bonus demanded should not preclude the private
respondents'claims thereon. The 1972 agreement is basis enough for such claims for the
whole writing is instinct with an obligation, imperfectlyexpress.WHEREFORE, premises
considered, the petition is hereby DISMISSED. The Decision of the public respondent
NLRC promulgated onFebruary 11, 1982, and its Resolution dated March 23, 1982, are
hereby AFFIRMED. The temporary restraining order issued on May 19,1982 is LIFTED

PHILIPPINE AIRLINES, INC. (PAL) VS. NLRC


G.R. NO. 114280
JULY 26, 1996
FRANCISCO, J.
FACTS: Refusing to pay its pilots their thirteenth month pay for unfair labor practice was
filed against Philippine Airlines by the Airline Pilots Association of the Philippines. The
Labor Arbiter ruled in favor of ALPAP and ordered PAL to pay its pilots belonging to
ALPAP their thirteenth month pay from 1988 to1990. Disputing PAL's contention, ALPAP
argued that the payment of the year-end bonus cannot be equated within the
thirteenth month pay since the payment of the former is conditional in character
andnot fixed in its amount, while that of the thirteenth month pay is mandatory in
character and definite in its. Both parties appealed to the National Labor Relations
Commission which in turn affirmed with modifications the decision of the Labor Arbiter.

ISSUE: Whether or not PAL can claim the exception provided under the law by equation
the year-endbonus with the payment of the thirteenth month pay deserves a very close
scrutiny in this case?

HELD: It appears that the rationale for the grant of the year-end bonus by PAL coincides
with the natureof the bonus which can be equated with the payment of a thirteenth
month pay. However, notwithstandingthe above disquisitions, the peculiar
circumstances in this case wavers against the outright application ofthe rule preventing
the imposition of a double burden against the employer who is already paying
theequivalent of the thirteenth month pay, and hereby exempt PAL from granting both
benefits of a year-endbonus and a thirteenth month pay to its pilots. The inclusion of a
provision for the continued payment ofthe year-end bonus in the 1988-1991 CBA of
ALPAP and PAL belies the latter contention that the grant ofthe year-end bonus was
intended to be credited as compliance with the mandate to pay the pilots athirteenth
month pay.As early as said date, PAL was therefore fully aware that it was legally
obliged togrant all its rank and file employees a thirteenth month pay. Moreover, there
is no rational basis forwithholding from the members of ALPAP the benefit of a year-end
bonus is addition to the thirteenthmonth pay, while the same being granted to the
other rank and field employees of PAL. WHEREFORE,finding no merit in the petitions,
the same are hereby DENIED and the Resolutions of public respondentNLRC
promulgated on November 23, 1993 and February 28, 1994 are hereby AFFIRMED.

SAN MIGUEL CORPORATION (CAGAYAN COCA-COLA PLANT) VS. INCIONG


G.R. NO. L-49774
FEBRUARY 24, 1981
DE CASTRO, J.

Facts: On January 3, 1977, Cagayan Coca-Cola Free Workers Union, private respondent
herein, filed a complaint against San Miguel Corporation (Cagayan Coca-Cola Plant),
petitioner herein, alleging failure or refusal of the latter to include in the computation of
13th- month pay such items as sick, vacation or maternity leaves, premium for work
done on rest days and special holidays, including pay for regular holidays and night
differentials.
An Order 3 dated February 15, 1977 was issued by Regional Office No. X where the
complaint was filed requiring herein petitioner San Miguel Corporation (Cagayan Coca-
Cola Plant) "to pay the difference of whatever earnings and the amount actually
received as 13th month pay excluding overtime premium and emergency cost of living
allowance. "
Herein petitioner appealed from that Order to the Minister of Labor in whose behalf the
Deputy Minister of Labor Amado G. Inciong issued an Order 4 dated June 7, 1978
affirming the Order of Regional Office No. X and dismissing the appeal for lack of merit.
Petitioner's motion for reconsideration having been denied, it filed the instant petition.

Issue: Whether in the computation of the 13th-month pay under Presidential Decree
851, payments for sick, vacation or maternity leaves, premium for work done on rest
days and special holidays, including pay for regular holidays and night differentials
should be considered.

Held: No.
The provision in dispute is Section 1 of Presidential Decree 851 and provides: All
employers are hereby required to pay all their employees receiving a basic salary of not
more than Pl,000 a month, regardless of the nature of the employment, a 13th-month
pay not later than December 24 of every year.

Section 2 of the Rules and Regulations for the implementation of Presidential Decree
851 provides:

b) Basic salary shall include all remunerations on earnings paid by an employer to an


employee for services rendered but may not include cost-of-living allowances granted
pursuant to Presidential Decree No. 525 or Letter of Instructions No. 174, profit sharing
payments and all allowances and monetary benefits which are not considered or
integrated as part of the regular or basic salary of the employee at the time of the
promulgation of the Decree on December 16, 1975.

Under Presidential Decree 851 and its implementing rules, the basic salary of an
employee is used as the basis in the determination of his 13th-month pay. Any
compensations or remunerations which are deemed not part of the basic pay is
excluded as basis in the computation of the mandatory bonus. Under a later set of
Supplementary Rules and Regulations Implementing Presidential Decree 851 issued by
the then Labor Secretary Blas Ople, overtime pay, earnings and other remunerations are
excluded as part of the basic salary and in the computation of the 13th-month pay.

The all-embracing phrase "earnings and other renumeration" which are deemed not
part of the basic salary includes within its meaning payments for sick, vacation, or
maternity leaves. Maternity premium for works performed on rest days and special
holidays pays for regular holidays and night differentials. As such they are deemed not
part of the basic salary and shall not be considered in the computation of the 13th-
month they, were not so excluded, it is hard to find any "earnings and other
remunerations" expressly excluded in the computation of the 13th-month pay. Then the
exclusionary provision would prove to be Idle and with no purpose.

PHILIPPINE DUPLICATORS, INC. VS. NLRC


G.R. NO. 110068
FEBRUARY 15, 1995

Facts:
On 11 November 1993, this Court, through its Third Division, rendered a decision
dismissing the petition for certiorari filed by petitioner Philippine Duplicators, Inc.
(Duplicators) in G.R. No. 110068. The Court upheld the decision of public respondent
National Labor Relations Commission (NLRC), which affirmed the order of Labor Arbiter
Felipe T. Garduque II directing petitioner to pay 13th month pay to private respondent
employees computed on the basis of their fixed wages plus sales commissions.
The Third Division also denied with finality on 15 December 1993 the Motion for
Reconsideration filed (on 12 December 1993) by petitioner. On 17 January 1994,
petitioner Duplicators filed (a) a Motion for Leave to Admit Second Motion for
Reconsideration and (b) a Second Motion for Reconsideration to set aside the rendered
decision to them.

Issue:
Is the Motion for Leave to Admit Second Motion for Reconsideration and Second
Motion for Reconsideration filed by the petitioner is valid and has a merit to set aside
the rendered decision in Duplicators?

Ruling:
The Motions for Leave to File a Second Motion for Reconsideration and the aforesaid
Second Reconsideration are denied by the court for lack of merit.

ISALAMA MACHINE WORKS V NLRC ET AL


G.R. NO. 100167
MARCH 2, 1995

Facts: On 25 March 1987, petitioner Isalama Machine Works Corporation and private
respondent Isalama Machine Works Corporation Labor Union-Workers Alliance Trade
Union entered into a collective bargaining agreement ("CBA") covering the period from
01 November 1986 to 03 October 1989. Following the signing of the CBA, the union
made repeated demands on the corporation, allegedly to no avail, for it to comply with
the CBA provisions. On 21 December 1987, the corporation paid the workers the 13th
month pay based on the average number of days actually worked during the year. The
union, through its president, private respondent Henry Baygan, demanded that the 13th
month pay should, instead, be made on the basis of a full one month basic salary. The
corporation countered that its own computation of the 13th month pay accorded with
the CBA provisions and Presidential Decree No. 851. On 05 January 1988, the union filed
a notice of strike with the Department of Labor and Employment, Region X, Cagayan de
Oro, alleging the commission of unfair labor practice and CBA violation by the
corporation. On 16 May 1988, the Executive Labor Arbiter rendered a decision holding
the strike to be illegal and declaring Baygan and the "participating" union members to
have thereby lost their employment status. After several conferences, the National
Conciliation and Mediation Board ("NCMB") succeeded in having the dispute amicably
settled except for the 13th month pay differential which remained in contention. The
union insisted that the failure of the corporation to implement fully the 13th month pay
provision of the CBA amounted to unfair labor practice.

Issue: Whether or not the workers should have a 13th month pay???

Held: Yes, In this case, the real reason for the strike is clearly traceable to the
unresolved dispute between the parties on 13th month pay differentials under
Presidential Decree No. 851, the proper manner of its application and computation. The
Court does not see this issue, given the quoted provisions of the law and its
implementing rules, to be constitutive of unfair labor practice. Section 9 of Rules and
Regulations Implementing Presidential Decree No. 851, in fact, specifically states that
"nonpayment of the thirteenth-month pay provided by the Decree and (the) rules shall
be treated as money claims cases and shall be processed in accordance with the Rules
Implementing the Labor Code of the Philippines and the Rules of the National Labor
Relations Commission." Private respondents, indeed, showed little prudence, if at all, in
their precipitate and ill-considered strike.

The NLRC likewise found private respondents to have violated Art. 264 of the Labor
Code when they blocked and barricaded the entrance of petitioner's premises
preventing free ingress and egress. Unfortunately for petitioner, however, the identity
of those who committed those illegal acts during the strike, except for Baygan, had not
been adequately established. Specifically, the NLRC said that no sufficient evidence
could be found "to pin down the afore-named 16 respondents as having committed
illegal acts during the strike," that could warrant a loss of their employment status. The
dismissal of Baygan, however, was warranted. Being the union president and leader of
the strike, his liability was greater than that of mere members, and he had the
responsibility to ensure that his followers respected the law. Article 248 of the Labor
Code, in turn, provides: Unfair labor practices of employers. It shall be unlawful for an
employer to commit any of the following unfair labor practice: (i) To violate a collective
bargaining agreement. This case arose in 1988 or prior to the effectivity of Republic Act
No. 6715; accordingly, the back salaries of the dismissed employee should be limited to
three years, without deduction or qualification, following the rule in Maranaw Hotels
and Resorts Corporation vs. Court of Appeals.

ALLIANCE OF GOVERNMENT WORKERS ET. AL. VS MINISTER OF LABOR AND


EMPLOYMENT
G.R. NO. L-60403
AUGUST 3, 1983
GUTIERREZ, JR. J.

FACTS:
The Philippine Government Employees Association (PGEA) filed a motion pursuant to
P.D. No. 851 in 1983. P.D. No. 851 requires all employers to pay 13th month pay to their
employees with a single exception that is found in Sec. 2 which provides that employers
who are already paying their employees 13th month pay or its equivalent are not
covered by this Decree. It is contended by the petitioners that the Sec. 3 of the IRR of
P.D. 851 also includes other types of employers who are not exempted by the decree.
They aver that the secretary, now Minister of Labor and Employment, is not included in
the decree or is not given authority by the decree to exempt from the requirement other
types of employers.

ISSUE:
Whether or not the private sectors or of government-owned and controlled
corporations and government agencies, are thereunder obligated to pay their
employees, receiving a basic salary of not more than P1,000 a month, a 13th-month pay
not later than December 24th of every year?

HELD:
It is the legislature or, in proper cases, the administrative heads of government and not
the collective bargaining process nor the concessions wrung by labor unions from
management that determine how much the workers in government-owned or controlled
corporations may receive in terms of salaries, 13th month pay, and other conditions or
terms of employment. There are government institutions, which can afford to pay two
weeks, three weeks, or even 13th-month salaries to their personnel from their
budgetary appropriations. Here as in other countries, government salaries and wages
have always been lower than salaries, wages, and bonuses in the private sector.
However, civil servants have no cause for despair. Service in the government may at
times be a sacrifice but it is also a welcome privilege. Section
3 of the Rules and Regulations Implementing Presidential Decree No. 851 is, therefore, a
correct interpretation of the decree. It has been implemented and enforced from
December 22, 1975 to the present; the petitioners have shown no valid reason why it
should be nullified because of their petition filed six and a half years after the issuance
and implementation of the rule. WHEREFORE, the petition is hereby DISMISSED for lack
of merit.

TAN V.LAGRAMA
G.R. NO. 151228
AUGUST 15, 2002
MENDOZA, J.
Facts: Lagrama works for Tan as painter of billboards and murals for the motion pictures
shown at the theaters managed by Tan for more than 10years. He was dismissed for
having urinated in his working area. Aggrieved, Lagrama filed a complaint for illegal
dismissal and non payment of benefits. Tan asserted that Lagrama was an independent
contractor as he was paid in piece-work basis

Issue:
Whether or not Lagrama is an independent contractor or an employee of Tan?

Held:
Lagrama is an employee, not an independent contractor
Four Fold Test

Power of Control - Evidence shows that the Lagrama performed his work as painter and
under the supervision and control of Tan.
Lagrama worked in a designated work area inside the theater of Tan for the use of which
petitioner prescribed rules, which rules included the observance of cleanliness and
hygeine and prohibition against urinating in the work area and any other place other
than rest rooms and Tan's control over Lagrama's work extended not only the use of
work area but also the result of Lagrama;s work and the manner and means by which
the work was to be accomplished. Lagrama is not an independent contractor because he
did not enjoy independence and freedom from the control and supervision of Tan and
he was subjected to Tan's control over the means and methods by which his work is to
be performed and accomplished

Payment of Wages - Lagrama worked for Tan on a fixed piece work basis is of no
moment. Payment by result is a method of compensation and does not define the
essence of the relation. Tat Lagrama was not reported as an employee to the SSS is not
conclusive, on the question whether he was an employee, otherwise Tan would be
rewarded for his failure or even neglect to perform his obligation.
Power of Dismissal By Tan stating that he had the right to fire Lagrama, Tan in effect
acknowledged Lagrama to be his employee

Power of Selection and Engagement of Employees Tan engaged the services of Lagrama
without the intervention of third party.

AVELINO LAMBO AND VICENTE BELOCURA VS. NLRC


G.R. NO. 111042
OCTOBER 26, 1999
MENDOZA, J.

Facts:
Petitioners were employed as tailors by private respondents. They worked from 8AM to
7PM daily with a regular income of Php 64.00. Eventually, petitioners filed a complaint
against private respondents for illegal dismissal. Petitioners sought to recover overtime
pay, holiday pay, premium pay on holidays and rest days, service incentive leave pay,
separation pay, 13th month pay, and attorneys fees. Adter hearing the case, the Labor
Arbiter decided in favor of the petitioners. However, upon appeal with NLRC, it was
found out that petitioners were not actually dismissed but were threatened with a
closure of the business if they insisted to demand their straight payment of minimum
wage. Afterwards, the petitioners walked-out from the meeting. Thus, NLRC set aside
the Labor Arbiters decision and instead held the petitioners guilty of abandonment of
work which resulted to the dismissal of the said monetary claims.

Issue:
Are petitioners entitled to the monetary claims and benefits?

Ruling:
Yes. The Court finds merit in the contentions of the petitioners that they were illegally
dismissed and, therefore, should be entitled to all the monetary benefits that they are
claiming for. Such decision is based on the following grounds:
There is an existing employer-employee relationship between the two parties because
of the capacity of the private respondents to control the employees work conduct. It is
established that the petitioners were required to regularly report for work within the
premises on the private-respondents establishment at a specific schedule for more than
a year.
Due to the establishment of the employer-employee relationship, and that it was
further seen that the employees were illegally dismissed, it is just right to award them
the said pays.

Therefore, the Court decided in favor of the petitioners and affirmed the Labor Arbiters
decision with the exception of including the attorneys fees in the computation.

MAKATI HABERDASHERY VS NLRC


G.R. NO. 83380-81
NOVEMBER 15, 1989

FACTS: Petition for certiorari to review the decision of the NLRC which affirmed the
decision of the Labor Arbiter who jointly heard and decided two cases filed by the Union
in behalf of the private respondents. Individual complainants are working for Makati
Haberdashery Inc as tailors, seamstress, sewers, basters, and plantsadoras and are
paid on a piece-rate basis (except two petitionerswho are paid on a monthly basis) In
addition, they are given a daily allowance of P 3.00 provided they report before 9:30
a.m.everyday. Work schedule: 9:30-6 or 7 p.m., Mondays to Saturdays and even on
Sundays and holidays during peak periods. The Sandigan ng Manggagawang Pilipino
filed a complaint for underpayment of the basic wages, underpayment of living
allowance, nonpayment of overtime work, nonpayment of holiday pay, and other
money claims. The Labor Arbiter rendered judgment in favor of complainants which the
NLRC affirmed but limited back wages to one year. Petitioner urged that the NLRC erred
in concluding that an employer-employee relationship existed between the petitioner
and the workers.

Issue: 1. WON employees paid on piece-rate basis are entitled to service incentive pay?
WON there is an Employer-Employee Relationship?

Held:
No, fall under exceptions set forth in the implementing rules (this will be reexamined
under Article 101).
Yes, evident in a Memorandum issued by the Assistant Manager.

Ratio:
As to the service incentive leave pay: as piece-rate workers being paid at a fixed amount
for performing work irrespective of time consumed in the performance thereof, they fall
under the exceptions stated in Sec1(d), Rule V, IRR, Book III, Labor Code. Service
Incentive Leave SECTION 1. Coverage. 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, purely commission
basis, or those who are paid a fixed amount for performing work irrespective of the time
consumed in the performance thereof;
Employer-Employee Relationship. There is such relationship because in the application
of the four-fold test, it was found that petitioners had control over the respondents not
only as to the result but also as to the means and method by which the same is to be
accomplished.

LABOR CONGRESS OF THE PHILIPPINES (LCP) VS. NLRC AND EMPIRE FOOD PRODUCTS
G.R. NO. 123938
MAY 21, 1998
DAVIDE, JR., J.

In this special civil action for certiorari under Rule 65, petitioners seek to reverse the 29
March 1995 resolution 1of the National Labor Relations Commission (NLRC) in NLRC RAB
III Case No. 01-1964-91 which affirmed the Decision 2 of Labor Arbiter Ariel C. Santos
dismissing their complaint for utter lack of merit.

FACTS:
The 99 persons named as petitioners in this proceeding were rank-and-file employees of
respondent Empire Food Products, which hired them on various dates (Paragraph 1,
Annex "A" of Petition, Annex "B;" Page 2, Annex "F" of Petition).
Petitioners filed against private respondents a complaint for payment of money claim[s]
and for violation of labor standard[s] laws (NLRC Case No. RAB-111-10-1817-90). They
also filed a petition for direct certification of petitioner Labor Congress of the Philippines
as their bargaining representative (Case No. R0300-9010-RU-005).
On October 23, 1990, petitioners represented by LCP President Benigno B. Navarro, Sr.
and private respondents Gonzalo Kehyeng and Evelyn Kehyeng in behalf of Empire Food
Products, Inc. entered into a Memorandum of Agreement which provided, among
others, the following:

That in connection with the pending Petition for Direct Certification filed by the Labor
Congress with the DOLE, Management of the Empire Food Products has no objection
[to] the direct certification of the LCP Labor Congress and is now recognizing the Labor
Congress of the Philippines (LCP) and its Local Chapter as the SOLE and EXCLUSIVE
Bargaining Agent and Representative for all rank and file employees of the Empire Food
Products regarding "WAGES, HOURS Of WORK, AND OTHER TERMS AND CONDITIONS
OF EMPLOYMENT;"
That with regards [sic] to NLRC CASE NO. RAB-III-10-1817-90 pending with the NLRC
parties jointly and mutually agreed that the issues thereof, shall be discussed by the
parties and resolve[d] during the negotiation of the Collective Bargaining Agreement;
That Management of the Empire Food Products shall make the proper adjustment of the
Employees Wages within fifteen (15) days from the signing of this Agreement and
further agreed to register all the employees with the SSS;
That Employer, Empire Food Products thru its Management agreed to deduct thru
payroll deduction UNION DUES and other Assessment[s] upon submission by the LCP
Labor Congress individual Check-Off Authorization[s] signed by the Union Members
indicating the amount to be deducted and further agreed all deduction[s] made
representing Union Dues and Assessment[s] shall be remitted immediately to the LCP
Labor Congress Treasurer or authorized representative within three (3) or five (5) days
upon deductions [sic], Union dues not deducted during the period due, shall be
refunded or reimbursed by the Employer/Management. Employer/Management further
agreed to deduct Union dues from non-union members the same amount deducted
from union members without need of individual Check-Off Authorizations [for] Agency
Fee;
That in consideration [of] the foregoing covenant, parties jointly and mutually agreed
that NLRC CASE NO. RAB-III-10-1817-90 shall be considered provisionally withdrawn
from the Calendar of the National Labor Relations Commission (NLRC), while the
Petition for direct certification of the LCP Labor Congress parties jointly move for the
direct certification of the LCP Labor Congress;
That parties jointly and mutually agreed that upon signing of this Agreement, no
Harassments [sic], Threats, Interferences [sic] of their respective rights under the law,
no Vengeance or Revenge by each partner nor any act of ULP which might disrupt the
operations of the business;
Parties jointly and mutually agreed that pending negotiations or formalization of the
propose[d] CBA, this Memorandum of Agreement shall govern the parties in the
exercise of their respective rights involving the Management of the business and the
terms and condition[s] of employment, and whatever problems and grievances may
arise by and between the parties shall be resolved by them, thru the most cordial and
good harmonious relationship by communicating the other party in writing indicating
said grievances before taking any action to another forum or government agencies;
That parties [to] this Memorandum of Agreement jointly and mutually agreed to
respect, abide and comply with all the terms and conditions hereof. Further agreed that
violation by the parties of any provision herein shall constitute an act of ULP. (Annex "A"
of Petition).

In an Order dated October 24, 1990, Mediator Arbiter Antonio Cortez approved the
memorandum of agreement and certified LCP "as the sole and exclusive bargaining
agent among the rank-and-file employee of Empire Food Products for purposes of
collective bargaining with respect to wages, hours of work and other terms and
conditions of employment" (Annex "B" of Petition).

On November 9, 1990, petitioners through LCP President Navarro submitted to private


respondents a proposal for collective bargaining (Annex "C" of Petition).
On January 23, 1991, petitioners filed a complaint docketed as NLRC Case No. RAB-III-
01-1964-91 against private respondents for:
Unfair Labor Practice by way of Illegal Lockout and/or Dismissal;
Union busting thru Harassments [sic], threats, and interfering with the rights of
employees to self-organization;
Violation of the Memorandum of Agreement dated October 23, 1990;
Underpayment of Wages in violation of R.A. No. 6640 and R.A. No. 6727, such as
Wages promulgated by the Regional Wage Board;
Actual, Moral and Exemplary Damages. (Annex "D" of Petition)

After the submission by the parties of their respective position papers and presentation
of testimonial evidence, Labor Arbiter Ariel C. Santos absolved private respondents of
the charges of unfair labor practice, union busting, violation of the memorandum of
agreement, underpayment of wages and denied petitioners' prayer for actual, moral
and exemplary damages. Labor Arbiter Santos, however, directed the reinstatement of
the individual complainants:

The undersigned Labor Arbiter is not oblivious to the fact that respondents have
violated a cardinal rule in every establishment that a payroll and other papers
evidencing hours of work, payments, etc. shall always be maintained and subjected to
inspection and visitation by personnel of the Department of Labor and Employment. As
such penalty, respondents should not escape liability for this technicality, hence, it is
proper that all individual complainants except those who resigned and executed
quitclaim[s] and releases prior to the filing of this complaint should be reinstated to their
former position[s] with the admonition to respondents that any harassment,
intimidation, coercion or any form of threat as a result of this immediately executory
reinstatement shall be dealt with accordingly.
SO ORDERED. (Annex "G" of petition)

On appeal, the National Labor Relations Commission vacated the Decision dated April
14, 1972 [sic] and remanded the case to the Labor Arbiter for further proceedings for
the following reasons:

The Labor Arbiter, through his decision, noted that ". . . complainant did not present any
single witness while respondent presented four (4) witnesses in the persons of Gonzalo
Kehyeng, Orlando Cairo, Evelyn Kehyeng and Elvira Bulagan . . ." (p. 183, Records), that
". . . complainant before the National Labor Relations Commission must prove with
definiteness and clarity the offense charged. . . ." (Record, p. 183); that ". . . complainant
failed to specify under what provision of the Labor Code particularly Art. 248 did
respondents violate so as to constitute unfair labor practice . . ." (Record, p. 183); that
"complainants failed to present any witness who may describe in what manner
respondents have committed unfair labor practice . . ." (Record, p. 185); that ". . .
complainant LCP failed to present anyone of the so-called 99 complainants in order to
testify who committed the threats and intimidation . . ." (Record, p. 185).
Upon review of the minutes of the proceedings on record, however, it appears that
complainant presented witnesses, namely, BENIGNO NAVARRO, JR. (28 February 1991,
RECORD, p. 91; 8 March 1991, RECORD, p. 92, who adopted its POSITION PAPER AND
CONSOLIDATED AFFIDAVIT, as Exhibit "A" and the annexes thereto as Exhibit "B", "B-1"
to "B-9", inclusive. Minutes of the proceedings on record show that complainant further
presented other witnesses, namely: ERLINDA BASILIO (13 March 1991, RECORD,
p. 93; LOURDES PANTILLO, MARIFE PINLAC, LENIE GARCIA (16 April 1991, Record, p. 96,
see back portion thereof ; 2 May 1991, Record, p. 102; 16 May 1991, Record, p. 103, 11
June 1991, Record, p. 105). Formal offer of Documentary and Testimonial Evidence was
made by complainant on June 24, 1991 (Record, p. 106-109)
The Labor Arbiter must have overlooked the testimonies of some of the individual
complainants which are now on record. Other individual complainants should have been
summoned with the end in view of receiving their testimonies. The complainants should
be afforded the time and opportunity to fully substantiate their claims against the
respondents. Judgment should be rendered only based on the conflicting positions of
the parties. The Labor Arbiter is called upon to consider and pass upon the issues of fact
and law raised by the parties.

Toward this end, therefore, it is Our considered view [that] the case should be
remanded to the Labor Arbiter of origin for further proceedings. (Annex "H" of Petition)
In a Decision dated July 27, 1994, Labor Arbiter Santos made the following
determination:

Complainants failed to present with definiteness and clarity the particular act or acts
constitutive of unfair labor practice.
It is to be borne in mind that a declaration of unfair labor practice connotes a finding
of prima facieevidence of probability that a criminal offense may have been committed
so as to warrant the filing of a criminal information before the regular court. Hence,
evidence which is more than a scintilla is required in order to declare
respondents/employers guilty of unfair labor practice. Failing in this regard is fatal to the
cause of complainants. Besides, even the charge of illegal lockout has no leg to stand on
because of the testimony of respondents through their guard Orlando Cairo (TSN, July
31, 1991 hearing; p. 5-35) that on January 21, 1991, complainants refused and failed to
report for work, hence guilty of abandoning their post without permission from
respondents. As a result of complainants['] failure to report for work, the cheese curls
ready for repacking were all spoiled to the prejudice of respondents. Under cross-
examination, complainants failed to rebut the authenticity of respondents' witness
testimony.

As regards the issue of harassments [sic], threats and interference with the rights of
employees to self-organization which is actually an ingredient of unfair labor practice,
complainants failed to specify what type of threats or intimidation was committed and
who committed the same. What are the acts or utterances constitutive of harassments
[sic] being complained of? These are the specifics which should have been proven with
definiteness and clarity by complainants who chose to rely heavily on its position paper
through generalizations to prove their case.

Insofar as violation of [the] Memorandum of Agreement dated October 23, 1990 is


concerned, both parties agreed that:

2 That with regards [sic] to the NLRC Case No. RAB III-10-1817-90 pending with the
NLRC, parties jointly and mutually agreed that the issues thereof shall be discussed by
the parties and resolve[d] during the negotiation of the CBA.
The aforequoted provision does not speak of [an] obligation on the part of respondents
but on a resolutory condition that may occur or may not happen. This cannot be made
the basis of an imposition of an obligation over which the National Labor Relations
Commission has exclusive jurisdiction thereof.

Anent the charge that there was underpayment of wages, the evidence points to the
contrary. The enumeration of complainants' wages in their consolidated Affidavits of
merit and position paper which implies underpayment has no leg to stand on in the light
of the fact that complainants' admission that they are piece workers or paid on
a pakiao [basis] i.e. a certain amount for every thousand pieces of cheese curls or other
products repacked. The only limitation for piece workers or pakiao workers is that they
should receive compensation no less than the minimum wage for an eight (8) hour work
[sic]. And compliance therewith was satisfactorily explained by respondent Gonzalo
Kehyeng in his testimony (TSN, p. 12-30) during the July 31, 1991 hearing. On cross-
examination, complainants failed to rebut or deny Gonzalo Kehyeng's testimony that
complainants have been even receiving more than the minimum wage for an average
workers [sic]. Certainly, a lazy worker earns less than the minimum wage but the same
cannot be attributable to respondents but to the lazy workers.

Finally, the claim for moral and exemplary damages has no leg to stand on when no
malice, bad faith or fraud was ever proven to have been perpetuated by respondents.
WHEREFORE, premises considered, the complaint is hereby DISMISSED for utter lack of
merit. (Annex "I" of Petition). 4

On appeal, the NLRC, in its Resolution dated 29 March 1995, 5 affirmed in toto the
decision of Labor Arbiter Santos. In so doing, the NLRC sustained the Labor Arbiter's
findings that: (a) there was a dearth of evidence to prove the existence of unfair labor
practice and union busting on the part of private respondents; (b) the agreement of 23
October 1990 could not be made the basis of an obligation within the ambit of the
NLRC's jurisdiction, as the provisions thereof, particularly Section 2, spoke of a
resolutory condition which could or could not happen; (c) the claims for underpayment
of wages were without basis as complainants were admittedly"pakiao" workers and
paid on the basis of their output subject to the lone limitation that the payment
conformed to the minimum wage rate for an eight-hour workday; and (d) petitioners
were not underpaid.
Their motion for reconsideration having been denied by the NLRC in its Resolution of 31
October 1995, 6petitioners filed the instant special civil action for certiorari.

ISSUES:
1 Whether or not the petitioners have been illegally dismissed by private respondents.
Whether or not the petitioners are entitled to full back wages and other privileges, and
separation pay in lieu of reinstatement.

HELD:
1 Private respondents, moreover, in considering petitioners' employment to have been
terminated by abandonment, violated their rights to security of tenure and
constitutional right to due process in not even serving them with a written notice of
such termination. 12 Section 2, Rule XIV, Book V of the Omnibus Rules Implementing the
Labor Code provides:

Sec. 2. Notice of Dismissal Any employer who seeks to dismiss a worker shall furnish
him a written notice stating the particular acts or omission constituting the grounds for
his dismissal. In cases of abandonment of work, the notice shall be served at the
worker's last known address.

2 Petitioners are therefore entitled to reinstatement with full back wages pursuant to
Article 279 of the Labor Code, as amended by R.A. No. 6715. Nevertheless, the records
disclose that taking into account the number of employees involved, the length of time
that has lapsed since their dismissal, and the perceptible resentment and enmity
between petitioners and private respondents which necessarily strained their
relationship, reinstatement would be impractical and hardly promotive of the best
interests of the parties. In lieu of reinstatement then, separation pay at the rate of one
month for every year of service, with
a fraction of at least six (6) months of service considered as one (1) year, is in order. 13

That being said, the amount of back wages to which each petitioner is entitled,
however, cannot be fully settled at this time. Petitioners, as piece-rate workers having
been paid by the piece, 14 there is need to determine the varying degrees of production
and days worked by each worker. Clearly, this issue is best left to the National Labor
Relations Commission.

As to the other benefits, namely, holiday pay, premium pay, 13th month pay and service
incentive leave which the labor arbiter failed to rule on but which petitioners prayed for
in their complaint, 15 we hold that petitioners are so entitled to these benefits. Three
(3) factors lead us to conclude that petitioners, although piece-rate workers, were
regular employees of private respondents. First, as to the nature of petitioners' tasks,
their job of repacking snack food was necessary or desirable in the usual business of
private respondents, who were engaged in the manufacture and selling of such food
products; second, petitioners worked for private respondents throughout the year, their
employment not having been dependent on a specific project or season; and third, the
length of time 16that petitioners worked for private respondents. Thus, while
petitioners' mode of compensation was on a "per piece basis," the status and nature of
their employment was that of regular employees.

The Rules Implementing the Labor Code exclude certain employees from receiving
benefits such as nighttime pay, holiday pay, service incentive leave 17 and 13th month
pay, 18 inter alia, "field personnel and other employees whose time and performance is
unsupervised by the employer, including those who are engaged on task or contract
basis, purely commission basis, or those who are paid a fixed amount for performing
work irrespective of the time consumed in the performance thereof." Plainly,
petitioners as piece-rate workers do not fall within this group. As mentioned earlier, not
only did petitioners labor under the control of private respondents as their employer,
likewise did petitioners toil throughout the year with the fulfillment of their quota as
supposed basis for compensation. Further, in Section 8 (b), Rule IV, Book III which we
quote hereunder, piece workers are specifically mentioned as being entitled to holiday
pay.

Sec. 8. Holiday pay of certain employees.


Where a covered employee is paid by results or output, such as payment on piece work,
his holiday pay shall not be less than his average daily earnings for the last seven (7)
actual working days preceding the regular holiday: Provided, however, that in no case
shall the holiday pay be less than the applicable statutory minimum wage rate.
In addition, the Revised Guidelines on the Implementation of the 13th Month Pay Law,
in view of the modifications to P.D. No. 851 19 by Memorandum Order No. 28, clearly
exclude the employer of piece rate workers from those exempted from paying 13th
month pay, to wit:

EXEMPTED EMPLOYERS
The following employers are still not covered by P.D. No. 851:
d. Employers of those who are paid on purely commission, boundary or task basis, and
those who are paid a fixed amount for performing specific work, irrespective of the time
consumed in the performance thereof, except where the workers are paid on piece-rate
basis in which case the employer shall grant the required 13th month pay to such
workers. (emphasis supplied)

The Revised Guidelines as well as the Rules and Regulations identify those workers who
fall under the piece-rate category as those who are paid a standard amount for every
piece or unit of work produced that is more or less regularly replicated, without regard
to the time spent in producing the same. 20

As to overtime pay, the rules, however, are different. According to Sec. 2(e), Rule I, Book
III of the Implementing Rules, workers who are paid by results including those who are
paid on piece-work, takay, pakiao, or task basis, if their output rates are in accordance
with the standards prescribed under Sec. 8, Rule VII, Book III, of these regulations, or
where such rates have been fixed by the Secretary of Labor in accordance with the
aforesaid section, are not entitled to receive overtime pay. Here, private respondents
did not allege adherence to the standards set forth in Sec. 8 nor with the rates
prescribed by the Secretary of Labor. As such, petitioners are beyond the ambit of
exempted persons and are therefore entitled to overtime pay. Once more, the National
Labor Relations Commission would be in a better position to determine the exact
amounts owed petitioners, if any.

JIMENEZ ET. AL. V. NLRC AND JUANATAS


G.R. NO. 116960
APRIL 2, 1996

Facts:

On June 29, 1990, private respondents Pedro and Fredelito Juanatas, father and son,
filed aclaim for unpaid wages/commissions, separation pay and damages against JJ's
Trucking and/or Dr. Bernardo Jimenez. Said respondents, as complainants therein,
alleged that in December,1987, they were hired by herein petitioner Bernardo Jimenez
as driver/mechanic and helper,respectively, in his trucking firm, JJ Trucking. They were
assigned to a ten-wheeler truck to haulsoft drinks of Coca-Cola Bottling Company and
paid on commission basis, initially fixed at 17%but later increased to 20% in 1988.

Private respondents further alleged that for the years 1988 and 1989 they received only
a partialcommission of P84,000.00 from petitioners' total gross income of almost
P1,000,000.00 for thesaid two years. Consequently, with their commission for that
period being computed at 20% of said income, there was an unpaid balance to them of
P106,211.86; that until March, 1990 whentheir services were illegally terminated, they
were further entitled to P8,050.00 which added upto a grand total of P114,261.86 due
and payable to them.

Disputing the complaint, petitioners contend that respondent Fredelito Juanatas was
not anemployee of the firm but was merely a helper of his father Pedro; that all
commissions for 1988and 1989, as well as those up to March, 1990, were duly paid; and
that the truck driven byrespondent Pedro Juanatas was sold to one Winston Flores in
1991 and, therefore, privaterespondents were not illegally dismissed.

After hearings duly conducted, and with the submission of the parties'
position/supportingpapers, Labor Arbiter Rogue B. de Guzman rendered a decision
ordering respondents JJ'sTrucking and/or Dr. Bernardo Jimenez to pay jointly and
severally complainant Pedro Juanatasa separation pay of P15,050.00, plus attorney's fee
equivalent to 10% of the award. Thecomplaint of Fredelito Juanatas is hereby dismissed
for lack of merit.On appeal filed by private respondents, the NLRC modified the decision
of the labor arbiter declaring Fredelito Juanatas as respondents' employee and shares in
the commission andseparation pay awarded to complainant Pedro Juanatas, his father.
Further, respondent JJ'sTrucking and Dr. Bernardo Jimenez are jointly and severally
liable to pay complainants their unpaid commissions in the total amount of P84,387.05.
Hence, this petition for certiorari, seeking the annulment of the decision of respondent
NLRCdenying petitioners' motion for reconsideration.

Issue:
Whether or not respondent NLRC committed grave abuse of discretion in ruling (a) that
private respondents were not paid their commissions in full, and (b) that respondent
Fredelito Juanatas was an employee of JJ's Trucking.

Ruling:
On the first issue, there is no reason to disturb the findings of respondent NLRC that the
entire amount of commissions was not paid, because of the evident failure of
petitioners to present evidence that full payment thereof has been made.

As a general rule, one who pleads payment has the burden of proving it. Even where the
plaintiff (herein private respondent) must allege non-payment, the burden of evidence
rests on the defendant (herein petitioners) to prove payment, rather than on the
plaintiff to prove non-payment.

In the instant case, the right of respondent Pedro Juanatas to be paid a commission
equivalent to 17%, later increased to 20%, of the gross income is not disputed by
petitioners. Although private respondents admit receipt of partial payment, petitioners
still have to present proof of full payment.
The testimony of petitioners which merely denied the claim of private respondents,
unsupported by documentary evidence, is not sufficient to establish payment. Although
petitioners submitted a notebook showing the alleged vales of private respondents for
the year 1990, the same is inadmissible and cannot be given probative value considering
that it is not properly accomplished, is undated and unsigned, and is thus uncertain as to
its origin and authenticity.

Hence, for failure to present evidence to prove payment, petitioners defaulted in their
defenseand in effect admitted the allegations of private respondents.With respect to
the second issue, NLRC erred in holding that the son, Fredelito, was an employee of
petitioners. In the case at bar, the elements of an employer-employee relationship, are
not present. The agreement was between petitioner JJ's Trucking and respondent Pedro
Juanatas. The hiring of a helper was discretionary on the part of Pedro. Hence, Fredelito
was not an employee of petitioners.

WHEREFORE, the judgment of respondent National Labor Relations Commission is


AFFIRMED, with the MODIFICATION that declaring Fredelito Juanatas is not an
employee of petitioners and not entitled to share in the award for commission and
separation pay.

VIRGINIA G. NERI VS. NLRC


224 SCRA 717
JULY 23, 1993

FACTS: Petitioners instituted complaints against FEBTC and BCC to compel the bank to
accept them as regular employeesand for it to pay the differential between the wages
being paid them by BCC and those received by FEBTC employeeswith similar length of
service. They contended that BCC in engaged in labor-only contracting because it failed
toadduce evidence purporting to show that it invested in the form of tools, equipment,
machineries, work premisesand other materials which are necessary in the conduct of
its business. Moreover, petitioners argue that they performduties which are directly
related to the principal business or operation of FEBTC.

ISSUE: Whether or not BCC was engaged in labor-only contracting.

HELD: It is well-settled that there is labor-only contracting where: (a) the person
supplying workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others; and, (b) the
workers recruited and placed by such person are performing activities which are directly
related o the principal business of the employer.BCC need not prove that it made
investments in the form of tools, equipment, machineries, work premises, among
others, because it has established that it has sufficient capitalization. This fact was both
determined by the Labor Arbiter and the NLRC as BCC had a capital stock of P1 million
fully subscribed and paid for. BCC is therefore a highly capitalized venture and cannot be
deemed engaged in labor-only contracting.

While there may be no evidence that it has investment in the form of tools, equipment,
machineries, work premises, among others, it is enough that it has substantial capital, as
was established before the Labor Arbiter as well as the NLRC. The law does not require
both substantial capital and investment in the form of tools, equipment, machineries,
etc. This is clear from the use of the conjunction "or" instead of and. Having
established that it has substantial capital, it was no longer necessary for BCC to further
adduce evidence to prove that it does not fall within the purview of "labor-only"
contracting. There is even no need for it to refute petitioners' contention that the
activities they perform are directly related to the principal business of respondent bank.
On the other hand, the Court has already taken judicial notice of the general practice
adopted in several government and private institutions and industries of hiring
independent contractors to perform special services. These services range from
janitorial, security and even technical or other specific services such as those performed
by petitioners Neri and Cabelin. While these services may be considered directly related
to the principal business of the employer, nevertheless, they are not necessary in the
conduct of the principal business of the employer.

MANILA WATER COMPANY, INC. VS. PENA


G.R. NO. 158255
JULY 8, 2004

FACTS
Petitioner Manila Water Company, Inc. is one of the two private concessionaires
contracted by the Metropolitan Waterworks and Sewerage System (MWSS) to manage
the water distribution system in the East Zone of Metro Manila, pursuant to Republic
Act No. 8041, otherwise known as the National Water Crisis Act of 1995. Under the
Concession Agreement, petitioner undertook to absorb former employees of the MWSS
whose names and positions were in the list furnished by the latter, while the
employment of those not in the list was terminated on the day petitioner took over the
operation of the East Zone, which was on August 1, 1997. Private respondents, being
contractual collectors of the MWSS, were among the 121 employees not included in the
list; nevertheless, petitioner engaged their services without written contract from
August 1, 1997 to August 31, 1997. Thereafter, on September 1, 1997, they signed a
three-month contract to perform collection services for eight branches of petitioner in
the East Zone.
Before the end of the three-month contract, the 121 collectors incorporated the
Association Collectors Group, Inc. (ACGI), which was contracted by petitioner to collect
charges for the Balara Branch. Subsequently, most of the 121 collectors were asked by
the petitioner to transfer to the First Classic Courier Services, a newly registered
corporation. Only private respondents herein remained with ACGI. Petitioner continued
to transact with ACGI to do its collection needs until February 8, 1999, when petitioner
terminated its contract with ACGI.

Private respondents filed a complaint for illegal dismissal and money claims against
petitioner, contending that they were petitioners employees as all the methods and
procedures of their collections were controlled by the latter. On the other hand,
petitioner asserts that private respondents were employees of ACGI, an independent
contractor. It maintained that it had no control and supervision over private
respondents manner of performing their work except as to the results. Thus, petitioner
did not have an employer-employee relationship with the private respondents, but only
a service contractor-client relationship with ACGI.

ISSUE
Whether or not there exists an employer-employee relationship between petitioner and
private respondents.

RULING
We agree with the Labor Arbiter that ACGI was not an independent contractor.
First, ACGI does not have substantial capitalization or investment in the form of tools,
equipment, machineries, work premises, and other materials, to qualify as an
independent contractor. While it has an authorized capital stock of P1,000,000.00, only
P62,500.00 is actually paid-in, which cannot be considered substantial capitalization.
The 121 collectors subscribed to four shares each and paid only the amount of P625.00
in order to comply with the incorporation requirements. Further, private respondents
reported daily to the branch office of the petitioner because ACGI has no office or work
premises. In fact, the corporate address of ACGI was the residence of its president, Mr.
Herminio D. Pea. Moreover, in dealing with the consumers, private respondents used
the receipts and identification cards issued by petitioner. Second, the work of the
private respondents was directly related to the principal business or operation of the
petitioner. Lastly, ACGI did not carry on an independent business or undertake the
performance of its service contract according to its own manner and method, free from
the control and supervision of its principal, petitioner. Prior to private respondents
alleged employment with ACGI, they were already working for petitioner, subject to its
rules and regulations in regard to the manner and method of performing their tasks.
This form of control and supervision never changed although they were already under
the seeming employ of ACGI. These are indications that ACGI was not left alone in the
supervision and control of its alleged employees. Consequently, it can be concluded that
ACGI was not an independent contractor since it did not carry a distinct business free
from the control and supervision of petitioner.
Under this factual milieu, there is no doubt that ACGI was engaged in labor-only
contracting, and as such, is considered merely an agent of the petitioner. In labor-only
contracting, the statute creates an employer-employee relationship for a
comprehensive purpose: to prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and the latter is responsible to
the employees of the labor-only contractor as if such employees had been directly
employed by the principal employer. Since ACGI is only a labor-only contractor, the
workers it supplied should be considered as employees of the petitioner.

SAN MIGUEL CORPORATION V. PROSPERO ABALLA


G.R. NO. 149011
JUNE 28, 2005
CARPIO-MORALES,J

Facts:
Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose
Cooperative(Sunflower) entered into a one-year Contract of Service and such contract is
renewed on amonthly basis until terminated. Pursuant to this, respondent Prospero
Aballa rendered servicesto SMC.After one year of service, Aballa filed a complaint
before NLRC praying that they be declared asregular employees of SMC. On the other
hand, SMC filed before the DOLE a Notice of Closuredue to serious business losses.
Hence, the labor arbiter dismissed the complaint and ruled infavor of SMC. Aballa then
appealed before the NLRC. The NLRC dismissed the appeal findingthat Sunflower is an
independent contractor.On appeal, the Court of Appeals reversed NLRCs decision
on the ground that the agreementbetween SMC and Sunflower showed a clear intent
to abstain from establishing an employer-employee relationship.

Issue:
Whether or not Aballa and other employees of Sunflower are employees of SMC?

Held:
The test to determine the existence of independent contractorship is whether
oneclaiming to be an independent contractor has contracted to do the work according
to his ownmethods and without being subject to the control of the employer, except
only as to the resultsof the work. In legitimate labor contracting, the law creates an
employer-employee relationshipfor a limited purpose, to ensure that the employees are
paid their wages. The principal
employer becomes jointly and severally liable with the job contractor, only for the
payment of theemployees wages whenever the contractor fails to pay the same. Other
than that, the principalemployer is not responsible for any claim made by the
employees. In labor-only contracting, thestatute creates an employer-employee
relationship for a comprehensive purpose: to prevent acircumvention of labor laws. The
contractor is considered merely an agent of the principalemployer and the latter
is responsible to the employees of the labor-only contractor as if suchemployees had
been directly employed by the principal employer.The Contract of Services between
SMC and Sunflower shows that the parties clearly disavowedthe existence of an
employer-employee relationship between SMC and private respondents.The language
of a contract is not, however, determinative of the parties relationship; rather it isthe
totality of the facts and surrounding circumstances of the case. A party cannot dictate,
bythe mere expedient of a unilateral declaration in a contract, the character of its
business,whether as labor-only contractor or job contractor, it being crucial that its
character be measuredin terms of and determined by the criteria set by statute. What
appears is that Sunflower doesnot have substantial capitalization or investment in the
form of tools, equipment, machineries,work premises and other materials to qualify it
as an independent contractor. On the other hand,it is gathered that the lot, building,
machineries and all other working tools utilized by Aballa etal. in carrying out their tasks
were owned and provided by SMC.And from the job description provided by SMC itself,
the work assigned to Aballa et al.
wasdirectly related to the aquaculture operations of SMC. As for janitorial and messeng
erialservices, that they are considered directly related to the principal business of the
employer hasbeen jurisprudentially recognized. Furthermore, Sunflower did not carry
on an independent business or undertake the performance of its service contract
according to its own manner andmethod, free from the control and supervision of its
principal, SMC, its apparent role havingbeen merely to recruit persons to work for
SMC.All the foregoing considerations affirm by more than substantial evidence the
existence of anemployer- employee relationship between SMC and Aballa. Since Aballa
who were engaged inshrimp processing performed tasks usually necessary or desirable
in the aquaculture businessof SMC, they should be deemed regular employees of the
latter and as such are entitled to allthe benefits and rights appurtenant to regular
employment. They should thus be awardeddifferential pay corresponding to the
difference between the wages and benefits given them andthose accorded SMCs other
regular employee

TABAS VS. CALIFORNIA MANUFACTURING CO.


GR NO. 80680
JANUARY 26, 1989
SARMIENTO, J.

Facts:
Petitioners filed a petition in the NLRC for reinstatement and payment of various
benefits against California Manufacturing Company. The respondent company then
denied the existence of an employer-employee relationship between the company and
the petitioners. Pursuant to a manpower supply agreement, it appears that the
petitioners prior their involvement with California Manufacturing Company were
employees of Livi Manpower service, an independent contractor, which assigned them
to work as promotional merchandisers. The agreement provides that:
California has no control or supervisions whatsoever over Livi's workers with respect to
how they accomplish their work or perform, Californias obligation It was further
expressly stipulated that the assignment of workers to California shall be on a seasonal
and contractual basis that cost of living allowance and the 10 legal holidays will be
charged directly to California at cost and that payroll for the preceding week shall be
delivered by Livi at California's premises.
Issue:
Whether principal employer is liable.

Held:
Yes. The existence of an employer-employee relation cannot be made the subject of an
agreement.

Based on Article 106, labor-only contractor is considered merely as an agent of the


employer, and the liability must be shouldered by either one or shared by both. There is
no doubt that in the case at bar, Livi performs manpower services, meaning to say, it
contracts out labor in favor of clients. We hold that it is one notwithstanding its
vehement claims to the contrary, and notwithstanding the provision of the contract that
it is an independent contractor. The nature of ones business is not determined by
self-serving appellations one attaches thereto but by the tests provided by statute and
prevailing case law. The bare fact that Livi maintains a separate line of business does
not extinguish the equal fact that it has provided California with workers to pursue the
latters own business. In this connection, we do not agree that the petitioners had been
made to perform activities which are not directly related to the general business of
manufacturing, Californias purported principal operation activity. Livi, as a
placement agency, had simply supplied California with the manpower necessary to carry
out its California merchandising activities, using its California premises and equipment.

MAFINCO TRADING CORP. VS. OPLE


G.R. NO. L-37790
MARCH 25, 1976
AQUINO, J.

FACTS:
Cosmos Aerated Water Factory, a firm based at Malabon, Rizal, appointed petitioner
Mafinco as its sole distributor of Cosmos soft drinks in Manila. Rodrigo Repomanta and
Mafinco executed a peddling contract whereby Repomanta agreed to buy and sell
Cosmos soft drinks. Rey Moralde entered into a similar contract. Months later, Mafinco
terminated the peddling contract with Repomanta and Moralde. Consequently,
Repomanta and Moralde, through their union, filed a complaint with the NLRC, charging
the general manager of Mafinco for illegally dismissing them.4.Mafinco filed a motion to
dismiss the complaint on the ground that the NLRC had no jurisdiction because
Repomanta and Moralde were not its employees but were independent contractors. It
stressed that there was termination of the contract not a dismissal of an employee.
ISSUE:
Whether or not there exist an employer-employee relationship between petitioner
Mafinco and private respondents Repomanta and Moralde.

HELD:
The Supreme Court held that under the peddling contracts, Repomanta and Moralde
were not employees of Mafinco but were independent contractors as found by the NLC
and its fact finder and by the committee appointed by the Secretary of Labor to look
into the status of Cosmos and Mafinco peddlers. A contract whereby one engages to
purchase and sell soft drinks on trucks supplied by the manufacturer but providing that
the other party (peddler) shall have the right to employ his own workers, shall post a
bond to protect the manufacturer against losses, shall be responsible for damages
caused to third persons, shall obtain the necessary licenses and permits and bear the
expenses incurred in the sale of the soft drinks is not a contract of employment.

INSULAR LIFE INSURANCE CO. LTD VS NLRC


G.R. NO. 84484
NOVEMBER 15, 1989
NARVASA, J.

FACTS:
Insular Life (company) and Basiao entered into a contract by which Basiao was
authorized to solicit forinsurance in accordance with the rules of the company. He
would also receive compensation, in the form of commissions. The contract also
contained the relations of the parties, duties of the agent and the acts prohibited tohim
including the modes of termination.After 4 years, the parties entered into another
contract an Agency Managers Contact and to implementhis end of it, Basiao
organized an agency while concurrently fulfilling his commitment under the first
contract. The company terminated the Agency Managers Contract. Basiao sued the
company in a civil action. Thus,the company terminated Basiaos engagement under the
first contract and stopped payment of his commissions.

ISSUE:
W/N Basiao had become the companys employee by virtue of the contract, thereby
placing his claim forunpaid commissions

HELD:
No.Rules and regulations governing the conduct of the business are provided for in the
Insurance Code. Theserules merely serve as guidelines towards the achievement of the
mutually desired result without dictating themeans or methods to be employed in
attaining it. Its aim is only to promote the result, thereby creating noemployer-
employee relationship. It is usual and expected for an insurance company to promulgate
a set of rules toguide its commission agents in selling its policies which prescribe the
qualifications of persons who may be insured.None of these really invades the agents
contractual prerogative to adopt his own selling methods or to sellinsurance at his own
time and convenience, hence cannot justifiable be said to establish an employer-
employeerelationship between Basiao and the company. The respondents limit
themselves to pointing out that Basiaos contract with the company bound him
toobserve and conform to such rules. No showing that such rules were in fact
promulgated which effectivelycontrolled or restricted his choice of methods of selling
insurance. Therefore, Basiao was not an employee of the petitioner, but a commission
agent, an independent contractwhose claim for unpaid commissions should have been
litigated in an ordinary civil action.Wherefore, the complain of Basiao is dismissed.

RHONE-POULENC AGROCHEMICALS PHILIPPINES, INC. VS. NLRC


G.R. NOS. 102633-35
JANUARY 19, 1993

FACTS
The petitioner is a domestic corporation engaged in the manufacture of agro-chemicals.
Its business operations involve the formulation, production, distributionand sale in the
local market of its agro-chemical products.On January 1, 1988, as a consequence of the
sale by Union Carbide, Inc. of all itsagricultural-chemical divisions worldwide in favor of
Rhone-Poulenc Agrochemie,France, the petitioner's mother corporation, the petitioner
acquired from UnionCarbide Philippines Far East, Inc. the latter's agro-chemical
formulation plant inNamayan, Mandaluyong, Metro Manila.In 1987, prior to the sale,
Union Carbide had entered into a contract with CSI for thelatter's supply of janitorial
services. During the transition period, Union Carbidecontinued to avail itself of CSI's
janitorial services. Thus, petitioner Rhone-Poulencfound itself sharing the Namayan
plant with Union Carbide while the factory wasbeing serviced and maintained by
janitors supplied by CSI.Midway through the transition period, Union Carbide instructed
CSI to reduce thenumber of janitors working at the plant from eight (8) to seven
(7).Private respondent Paulino Roman, one of the janitors, was recalled by CSI
onFebruary 15, l988 for reassignment. However, Roman refused to acknowledgereceipt
of the recall memorandum.On March 9, 1988, Union Carbide formally notified CSI of the
termination of their janitorial service agreement, effective April 1, 1988, citing as reason
the global buy-out by Rhone-Poulenc, Agrochemie, France of Union Carbides Inc.'s agro-
chemicalbusiness.CSI thereafter issued a memorandum dated March 20, 1988 to the
seven remaining janitors assigned to the Namayan plant, including respondent Urcisio
Orain, recallingand advising them to report to the CSI office for reassignment. Like
Roman, the janitors refused to acknowledge receipt of the recall
memorandum.Meanwhile, in anticipation of the March 31, 1988 pull-out by Union
Carbide, thepetitioner started screening proposals by prospective service contractors.
Rhone-Poulenc likewise invited CSI to submit to its Bidding Committee a cost quotation
ofits janitorial services. However, another contractor, the Marilag Business andIndustrial
Services, Inc. passed the bidding committee's standards and obtained the janitorial
services contract.On April 1, 1988, the eight janitors reported for work at the Namayan
plant but wererefused admission and were told that another group of janitors had
replaced them.These janitors then filed separate complaints for illegal dismissal,
payment of 13thmonth salary, service leave and overtime pay against Union Carbide,
Rhone-Poulenc and CSI.

ISSUES
1.Whether or not the janitors were employees of Union Carbide
2.Whether or not the CSI is a labor only contractor
3.Whether or not petitioner absorbed the janitors in its workforce

RULING
The court held that the petition is meritorious. In determining the existence of
employer-employee relationship, the following elements are generally considered,
namely: (1) the selection and engagement of employees (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employee's conduct
although the latter is the most important element. There is no employer-employee
relationship between Union Carbide and the respondent janitors. The respondents
themselves admitted that they were selected and hired by CSI and were assigned to
Union Carbide. CSI likewise acknowledged that the two janitors were its employees. The
janitors drew their salaries from CSI and not from Union Carbide. CSI exercised control
over these janitors through Richard Barroga, also a CSI employee, who gave orders and
instructions to CSI janitors assigned to the Namayan

ESCARIO ET.AL. VS. NLRC


G.R. NO. 124055
JUNE 8, 2000
J.GUTTIERREZ, JR.

Facts:
Petitioners are merchandisers of respondent company. They withdraw stocks from the
warehouse, fix the prices, price-tagging, displaying the products and inventory. They
were paid by the company through an agent to avoid liability. They claim that they were
under the control and supervision of the company. They asked for regularization of their
status. They were then given notice of their termination. The company denied any
employer-employee relationship. They claim that they used an agent or independent
contractors to sell the merchandise. The Labor Arbiter ruled that there was an
employer-employee relationship. The NLRC set aside the decision and said that there
was no such relationship. The agent was a legitimate independent contractor.

Issue:
Whether or not the petitioners are employees of the company.

Held:
The Court ruled that there is no employer-employee relationship and that petitioners
are employees of the agent. The agent is a legitimate independent contractor. Labor-
only contractor occurs only when the contractor merely recruits, supplies or places
workers to perform a job for a principal. The labor-only
contractor doesnt have substantial capital or investment and the workers recruited
perform activities
directly related to the principal business of the employer. There is permissible
contracting only when the contractor carries an independent business and undertakes
the contract in his own manner and method, free from the control of the principal and
the contractor has substantial capital or investment. The agent ,and not the company,
also exercises control over the petitioners. No documents were submitted to prove that
the company exercised control over them. The agent hired the petitioners. The agent
also pays the petitioners, no evidence was submitted showing that it was the company
paying them and not the agent. It was also the agent who terminated their services. By
petitioning for regularization, the petitioners concede that they are not regular
employees.

RADIO COMMUNICATION OF THE PHILIPPINES INC. VS. SECRETARY OF LABOR


G.R. NO. 77959
JANUARY 9, 1989

Facts: On May 4, 1981, petitioner, a domestic corporation engaged in the


telecommunications business, filed with the National Wages Council an application for
exemption from the coverage of Wage Order No. 1. The application was opposed by
respondent United RCPI Communications Labor Association (URCPICLA-FUR), a labor
organization affiliated with the Federation of Unions of Rizal (FUR).

On May 22, 1981, the National Wages Council disapproved saidapplication and ordered
petitioner to pay its covered employees the mandatory living allowance of P2.00 daily
effective March 22, 1981.

As early as March 13, 1985, before the aforesaid case was elevated to this Court,
respondent union filed a motion for the issuance of a writ of execution, asserting
therein its claim to 15% of the total backpay due to all its members as "union service
fee" for having successfully prosecuted the latter's claim for payment of wages and for
reimbursement of expenses incurred by FUR and prayed for the segregation and
remittance of said amount to FUR thru its NationalPresident.

On October 24, 1985, without the knowledge and consent of respondent union,
petitioner entered into a compromise agreementwith Buklod ng Manggagawa sa RCPI-
NFL (BMRCPI-NFL) as the new bargaining agent of oppositors RCPI employees.
Thereupon, the parties filed a joint motion praying for the dismissal of the decision of
the National Wages Council for it had already been novated by the Compromise
Agreement re-defining the rights and obligations of the parties. Respondent Union on
November 7, 1985, countered by opposing the motion and alleging that one of the
signatories thereof - BMRCPI-NFL is not a party in interest in the case but that it was
respondent Union which represented oppositors RCPI employees all the way from the
level of the National Wages Council up the Supreme Court. Respondent Union,
therefore, claimed that the Compromise Agreement is irregular and invalid, apart from
the fact that there was nothing to compromise in the face of a final and executory
decision.

Director Severo M. Pucan issued an Order dated November 25, 1985 awarding to
URCPICLA-FUR and FUR 15% of the total backpay of RCPI employees as their union
service fees, and directing RCPI to deposit said amount with the cashier of the Regional
Office for proper disposition to said awardees. Despite said order, petitioner paid in full
the covered employees on November 29, 1985, without deducting the union service fee
of 15%. In an order dated May 7, 1986, NCR officer-in-charge found petitioner RCPI and
its employees jointly and severally liable for the payment of the 15% union service fee
amounting to P427,845.60 to private respondent URCPICLA-FUR and consequently
ordered the garnishment of petitioner's bank account to enforce said claim.

Secretary of Labor and Employment issued an order on August 18, 1986 modifying the
order appealed from by holding petitioner solely liable to respondent union for 10% of
the awarded amounts as attorney's fees.

Issue: Whether or not public respondents acted with grave abuse of discretion
amounting to lack of jurisdiction in holding the petitioner solely liable for "union service
fee to respondent URCPICLA-FUR.

Held: No. Attorney's fee due the oppositor is chargeable against RCPI. The defaulting
employer or government agency remains liable for attorney's fees because it compelled
the complainant to employ the services of counsel by unjustly refusing to recognize the
validity of the claim. (Cristobal vs. ECC)

It is undisputed that oppositor (private respondent herein) was the counsel on record of
the RCPI employees in their claim for EC0LA under Wage Order No. 1 since the inception
of the proceedings at the National Wages Council up to the Supreme Court. It had,
therefore, a valid claim for attorney's fee which it called union service fee.

As is evident in the compromise agreement, petitioner was bound to pay only 30% of
the amount due each employee on November 30, 1985, while the balance of 70% would
still be the subject of renegotiation by the parties. Yet, despite such conditions
beneficial to it, petitioner paid in full the backpay of its employees on November 29,
1985, ignoring the service fee due the private respondent. Worse, petitioner supposedly
paid to one Atty. Rodolfo M. Capocyan the 10% fee that properly pertained to herein
private respondent, an unjustified and baffling diversion of funds.
Finally, petitioner cannot invoke the lack of an individual written authorization from
the employees as a shield for its fraudulent refusal to pay the service fee of private
respondent. Be that as it may, the lack thereof was remedied and supplied by the
execution of thecompromise agreement whereby the employees, expressly approved
the 10% deduction and held petitioner RCPI free from any claim, suit or complaint
arising from the deduction thereof. When petitioner was thereafter again ordered to
pay the 10% fees to respondent union, it no longer had any legal basis or subterfuge for
refusing to pay the latter.

We agree that the Labor Code in requiring an individual written authorization as a


prerequisite to wage deductions seeks to protect the employee against unwarranted
practices that would diminish his compensation without his knowledge and consent.
However, for all intents and purposes, the deductions required of the petitioner and
the employees do not run counter to the express mandate of the law since the same are
not unwarranted or without their knowledge and consent. Also, the deductions for the
union service fee in question are authorized by law and do not require individual check-
off authorizations

APODACA VS. NLRC


G.R. NO. 80039
APRIL 18, 1989

FACTS:
Petitioner was employed in respondent corporation. He was persuaded by respondent
Mirasol to subscribe to 1,500 shares or for a total of P150,000.00. He paid P37,500.00.
On September 1, 1975, petitioner was appointed President and General Manager of the
However, on January 2, 1986, he
resigned. Petitioner instituted with the NLRC a complaint against private respondents
for the payment of his unpaid wages, his cost of living allowance, the balance of his
gasoline and representation expenses and his bonus compensation for 1986. Private
respondents admitted that there is due to petitioner the amount of P17,060.07 but this
was applied to the unpaid balance of his subscription in the amount of P95,439.93.
Petitioner questioned the set-off alleging that there was no call or notice for the
payment of the unpaid subscription and that, accordingly, the alleged obligation is not
enforceable.

ISSUES:
Whether or not NLRC has jurisdiction to resolve a claim for non-payment of stock
subscription (2) If so, whether or not an obligation arising there from be offset against
a money claim of an employee against the employer.
RULING:
NLRC has no jurisdiction to determine such intra-corporate
disputebetween the stockholder and the corporation as in the matter of unpaidsubscrip
tions. This controversy is within the exclusive jurisdiction of the Securities and Exchange
Commission.(2) No. the unpaid subscriptions are not due and payable until a call is
made by the corporation for payment. Private respondents have not presented a
resolution of the board of directors of Respondent Corporation calling for the payment
of the unpaid subscriptions. It does not even appear that a notice of such call has been
sent to petitioner by the respondent corporation. As there was no notice or call for the
payment of unpaid subscriptions, the same is not yet due and payable. Even if there was
a call for payment, the NLRC cannot validly set it off against the wages and other
benefits due petitioner. Article 113 of the Labor Code allows such
adeduction from the wages of the employees by the employer, only in threeinstances

NATIONAL FEDERATION OF LABOR VS. NLRC


G.R. NO. 103586
JULY 21, 1994

Facts: Several Wage Orders were promulgated by the then President Ferdinand E.
Marcos. This allegedly resulted to a wage distortion between the regular and the casual
employees. Grievance meetings were held by petitioner National Federation of Labor
("NFL") and private respondent Company addressing the impact which implementation
of the various Wage Orders had on the wage structure of the Company. On 21 June
1984, all the casual or non-regular employees of private respondent Company (at least
in its Davao Plant) were "regularized," or converted into regular employees, pursuant to
the request of petitioner NFL. On 1 July 1984, the effectivity date of the 1984 Collective
Bargaining Agreement between NFL and the Company, all regular employees of the
Company received an increase of P1.84 in their daily wage; the regular daily wage of the
regular employees thus became P35.84 as against P34.00 per day for non-regular
employees. As a result of the implementation of Wage Order No. 6, casual employees
received an increase of their daily wage from P34.00 to P36.00. At the same time, the
Company unilaterally granted an across-the-board increase of P2.00 in the daily rate of
all regular employees, thus increasing their daily wage from P35.84 to P37.84. Further,
on 1 July 1985, the anniversary date of the increases under the CBA, all regular
employees who were members of the collective bargaining unit got a raise of P1.76 in
their basic daily wage, which pushed that daily wage from P37.84 to P39.60, as against
the non-regular's basic wage of P36.00 per day. Finally, by November 1987, the lowest
paid regular employee had a basic daily rate of P64.64, or P10.64 more than the
statutory minimum wage paid to a non-regular employee. On 11 November 1987, the
NLRC En Banc rendered a decision which in effect found the existence of wage distortion
and required the Company to pay a P1.00 wage increase effective 1 May 1984. In the
computation submitted by the Union, there is a need to restore the P2.56 gap between
non-regulars or "casuals" and "regular workers." This difference in the basic wage of
these workers was existing at the time of the conclusion of the collective bargaining
agreement and before the implementation of Wage Orders No. 4 & 5. The imprecise
claim of respondent that there is P3.60 gap between non-regular and regulars may not
be sustained because as aforestated, this amount represents negotiated wage increase
which should not be considered covered and in compliance with the wage orders.
Considering, however, the present economic conditions and the outlay involved in
correcting the distortion in the wages of respondent's workers, this Commission, in the
exercise of its arbitral powers, feels that an increase of P1.00 on the present basic wage
of regular workers would significantly rectify or minimize the distortion in the wage
structure of respondent company caused by the implementation of the various wage
orders. Respondent is, therefore, required to implement the P1.00 wage increase
effective May 1, 1984 when Wage Order 4 took effect. On motion for partial
reconsideration filed by the Company, the above quoted portion of the NLRC En
Banc'sdecision was reconsidered and set aside by the NLRC Fifth Division. 3 The Fifth
Division of the NLRC in effect found that while a wage distortion did exist commencing
16 June 1984, the distortion persisted only for a total of fifteen (15) days and
accordingly required private respondent company to pay "a wage increase of P2.00 per
day to all regular workers effective June 16, 1984 up to June 30, 1984 or a total of
fifteen (15) days." 4 The rest of the decision of 11 November 1987 was left untouched.

Issue: Whether there existed a wage distortion

Held: Yes.
As used in Article 124 of the Labor Code, a wage distortion shall mean a situation where
an increase in prescribed wage rates results in the elimination or severe contraction
of intentional quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other logical bases
of differentiation. The concept of wage distortion assumes an existing grouping or
classification of employees which establishes distinctions among such employees on
some relevant or legitimate basis. This classification is reflected in a differing wage rate
for each of the existing classes of employees. The wage distortion anticipated in Wage
Orders Nos. 3, 4, 5 and 6 was a "distortion" (or "compression") which ensued from the
impact of those Wage Orders upon the different wage rates of the several classes of
employees. Thus distortion ensued where the result of implementation of one or
another of the several Wage Orders was the total elimination or the severe reduction of
the differential or gap existing between the wage rates of the differing classes of
employees. There did exist a two-fold classification of employees within the private
respondent Company: regular employees on the one hand and casual (or non-regular)
employees on the other. As can be seen from the figures referred to earlier, the
differential between these two (2) classes of employees existing before Wage Order No.
3 was reduced to zero upon the effectivity of Wage Order No. 5 on 16 June 1984.
Obviously, distortion consisting of complete elimination of the wage rate differential
had occurred. It is equally clear, however, that fifteen (15) days later, on 1 July 1984,
upon effectivity of the wage increase stipulated in the collective bargaining agreement
between the parties, a gap or differential of P1.84 was re-created. This restored
differential persisted after the effectivity of Wage Order No. 6 on 1 November 1984. By
operation of the same CBA, by 1 July 1985, the wage differential had grown to P3.60.

MANILA MANDARIN EMPLOYEES UNION VS. NLRC


GR 108556
NOVEMBER 19, 1996

FACTS:
The union filed with the NLRC arbitration branch a complaint on wage distortion. The
labor arbiter ruled in favor of the Union while the NRLC Commissioner Zapanta reversed
the same. The Union contends that the Mandarin Hotel filed its appeal three days
beyond the prescribed period.

ISSUES:
Whether or not NLRC acquired jurisdiction to take cognizance of Mandarins appeal
from Labor Arbiter
.
RULING:
The Court ruled that the Commission acted correctly in accepting and acting on
Mandarins appeal. The employee who was authorized to receive payment was not
around so the respondent was allowed to pay docketing fee on the next business day
which was February 4, 1991. In view of the considerations and in the interest of justice
was quite served when Mandarins appeal was given due course despite delayed
payment of fees the reglamentary period confers a directory, not a mandatory, power
to dismiss an appeal.

CAGAYAN SUGAR MILLING CO., V SECRETARY OF LABOR ET AL.,


G.R. NO. 128399,JANUARY 15, 1998

Facts: On November 16, 1993, Regional Wage Order No. RO2-02 was issued by the
Regional Tripartite Wage and Productivity Board, Regional Office No. II of the
Department of Labor and Employment (DOLE). It provided, inter alia, that: Sec. 1. Upon
effectivity of this Wage Order, the statutory minimum wage rates applicable to workers
and employees in the private sector in Region II shall be increased as follows: P 14.00
per day . . . Cagayan. On September 12 and 13, 1994, labor inspectors from the DOLE
Regional Office examined the books of petitioner to determine its compliance with the
wage order. They found that petitioner violated the wage order as it did not implement
an across the board increase in the salary of its employees.

Issue: Whether or not the petitioner violates the Wage Oder that mandates the increase
of minimum wage, and Regional Wage Order No. RO2-02 is valid, and violates Article
123 of the Labor Code?
Held: No, Article 123 of the Labor Code provides: Wage Order. - Whenever conditions in
the region so warrant, the Regional Board shall investigate and study all pertinent facts,
and, based on the standards and criteria herein prescribed, shall proceed to determine
whether a Wage Order should be issued. Any such Wage Order shall take effect after
(15) days from its complete publication in at least one (1) newspaper of general
circulation in the region. In the performance of its wage-determining functions, the
Regional Board shall conduct public hearings/consultations giving notices to employees'
and employers' groups and other interested parties. In sum, we hold that RO2-02-A is
invalid for lack of public consultations and hearings and non-publication in a newspaper
of general circulation, in violation of Article 123 of the Labor Code. We likewise find that
public respondent Secretary of Labor committed grave abuse of discretion in upholding
the findings of Regional Director Ricardo S. Martinez, Sr. that petitioner violated Wage
Order RO2-02. Decision of the Secretary of Labor, dated October 8, 1996, is set aside for
lack of merit.

ECOP VS. NWPC


G.R. NO. 96169, SEPTEMBER 24, 1991

FACTS:
Petitioners ECOP questioned the validity of the wage order issued by the RTWPB dated
October 23, 1990 pursuant to the authority granted by RA 6727. The wage order
increased the minimum wage by P17.00 daily in the National Capital Region.

The wage order is applied to all workers and employees in the private sector of an
increase of P 17.00 including those who are paid above the statutory wage rate. ECOP
appealed with the NWPC but dismissed the petition.

The Solicitor General in its comment posits that the Board upon the issuance of the
wage order fixed minimum wages according to the salary method. Petitioners insist that
the power of RTWPB was delegated, through RA 6727, to grant minimum wage
adjustments and in the absence of authority, it can only adjust floor wages.

ISSUE:
Whether or not the wage order issues by RTWPB dated October 23, 1990 is valid.

HELD:
The Court agrees with the Solicitor General. It noted that there are two ways in the
determination of wage, these are floor wage method and salary ceiling method. The
floor wage method involves the fixing of determinate amount that would be added to
the prevailing statutory minimum wage while the salary ceiling method involves where
the wage adjustment is applied to employees receiving a certain denominated salary
ceiling.
RA 6727 gave statutory standards for fixing the minimum wage.

The Commission noted that the increasing trend is toward the salary-cap method, which
has reduced disputes arising from wage distortions (brought about, apparently, by the
floor-wage method). Precisely, Republic Act No. 6727 was intended to rationalize wages,
first, by providing for full-time boards to police wages round-the-clock, and second, by
giving the boards enough powers to achieve this objective. The Court is of the opinion
that Congress meant the boards to be creative in resolving the annual question of wages
without labor and management knocking on the legislature's door at every turn. The
petition is DENIED.

MEYCAUAYAN COLLEGE V. DRILON


G.R. NO. 81122
MAY 7, 1990

Facts: Petitioner is a private educational institution operating in Meycauayan, Bulacan.


On January 16, 1987, its board of trustees recognized the Meycauayan College Faculty
and Personnel Association as the employees' union in the Meycauayan College. Prior to
said recognition or on July 17, 1983, petitioner and the union, then headed by Mrs.
Teresita V. Lim, entered into a collective bargaining agreement for 1983-1986. Article IV
thereof provided the salary scale for teachers. Later on the union discovered that
provisions of said article were not implemented. Consequently, on March 27, 1987, the
union filed with the Department of Labor and Employment, Regional Office No. III in San
Fernando, Pampanga, a notice of strike on the ground of unfair labor practice.
Petitioner's contention is that an agreement on a salary scale should be distinguished
from an agreement on a salary increase. Thus, it argues in fine that an agreement on a
salary scale should be considered as an addition to the salary increase imposed by law
and viceversa.

Issue:
Whether or not increases in employees' salaries resulting from the implementation of
presidential decrees and wage orders, which are over and above the agreed salary scale
contracted for between the employer and the employees in a collective bargaining
agreement, preclude the employees from claiming the difference between their old
salaries and those provided for under said salary scale.

Held:
Increments to the laborers financial gratification, be they in the form of salary increases
or changes in the salary scale are aimed at one thing - improvement of the economic
predicament of the laborers. As such they should be viewed in the light of the States
avowed policy to protect labor. Thus, having entered into an agreement with its
employees, an employer may not be allowed to renege on its obligation under a
collective bargaining agreement should, at the same time, the law grant the employees
the same or better terms and conditions of employment. Employee benefits derived
from law are exclusive of benefits arrived at through negotiation and agreement unless
otherwise provided by the agreement itself or by law.

The one-year prescriptive period is inapplicable in this case because of peculiar factual
circumstances which petitioner has not denied. Although the collective bargaining
agreement covers school years 1983 to 1986, a copy of the agreement was only made
available to the union in 1987. Immediately thereafter, the union sought its
implementation. The union members might have been aware of the existence of the
collective bargaining agreement but that fact that their president was actually a
management employee being petitioner's registrar, they must have been deterred from
demanding its implementation earlier. Hence, to apply the provisions of Article 290 (Art.
291) would be unfair and prejudicial to the union members particularly those who have
served petitioner for a number of years who stand to benefit most from the salary scale.

St. Josephs College vs. St. Josephs College Workers Association (Samahan)
G.R. NO. 155609, JANUARY 9, 2005

Facts: Petitioner and respondent has discrepancies in computing the incremental


proceeds of the tuition fee that is to be used for the payment in payment of personnel
benefits. Respondents figures are higher than that of the petitioners. The discrepancy
was due to the differences in the income received by the school in the previous year and
the present year. Petitioner avers that the base figure for computing the previous years
income should be based on the previous school years number of enrollees. Further,
petitioner defends that it could not give the amount computed by the respondent
because for them the school has not gained income but losses caused by the drop in the
enrollment rate. On the other hand, respondents contend that petitioners
computations would result in to a sharp reduction of incremental proceeds. Thus, a
small share of the proceeds shall be given to the respondents. Eventually, this leads
both parties to undergo voluntary arbitration. The Voluntary Arbiters decided in favor of
the respondents and ordered the petitioner to pay the respondents back wages,
allowance and other benefits retroactively. The Court of Appeals likewise sided with the
petitioners.

Issue: Whether or not the petitioners computations of incremental proceeds are with
merit and in accordance with the law?

Ruling: No, the Court ruled in accordance with Section 5(2) of Republic Act 6728 which
allows tuition fee increases in private school given that 70% of the said increase should
be disbursed as salaries, wages, allowances, and other benefits for the teaching and
non-teaching personnel. Thus, despite the petitioners contention that it could not grant
the computation of the respondent due to losses, the former should comply with this
said rule. The Court could not change what the legislature has laid down. Moreover, as
to the contention of the school that it has incurred losses, the petitioner has failed to
actually show the actual losses it has suffered.
Therefore, the Court denies the petition and affirms the decisions rendered by the lower
courts.

COCOFED ET. AL., VS. HON. CRESENCIANO B. TRAJANO


G.R. NO. 982767, FEBRUARY 15, 1995

FACTS: Philippine Coconut Producers Federation operates petitioner COCOFED


(Kalamansig), a coconut plantation utilized as a demonstration farm for replanting
and/or training area for coconut farmers, located in Kalamansig, Sultan Kudarat.
On November 15, 1988, a complaint inspection was conducted by the Department of
Labor and Employment, Region XII, Cotabato City in response to complaints filed by two
of petitioner's employees, Alex Edicto and Delia Pahuwayan. The inspection revealed
that petitioner was guilty of underpayment of wages, emergency cost of living
allowance (ECOLA) and 13th month pay. Accordingly, notice of inspection results was
issued: requiring petitioner to effect restitution or correction within five (5) days from
notice.

Summary Petitioner submitted its position paper claiming that it should be classified as
an establishment with less than 30 employees and with a paid-up capital of P500,000.00
or less as evidenced by the assessment of the municipal treasurer. Moreover,
complainants worked for less than eight hours, a minimum of four and maximum of six.
. . . A three (3) year actual payrolls from March 1985 to February 1989 showing the daily
actual payment made by the respondent to involved workers are substantial evidence
against the mere memorandum issued by the respondents on the matter. Further, such
payrolls submitted by respondents are not mere summaries of daily efforts of workers
but these are daily records showing workers actual daily rate.

ISSUE: Whether or not the petitioner was justified in paying an amount less than the
statutory minimum wage.

HELD: Petitioner would have us overturn the factual finding of public respondents that
its employees are daily paid workers. This we are unable to do for the payrolls
submitted by it support the latters' position. Findings of administrative agencies which
have acquired expertise because their jurisdiction is confined to specific matters are
generally accorded not only respect but finality. Moreover, there is absolutely nothing in
the records which show that petitioner's employees worked for less than eight hours.
Finally, there would have been no need for petitioner to make an offer increasing the
wage to P45.00 per day if complainants were indeed piece rate workers, as it claimed
and if their wages were not underpaid, as found by public respondents.
WHEREFORE, the petition is DISMISSED
ODIN SECURITY AGENCY V. HON. DIONISIO DELA SERNA ET. AL,
G.R. NO. 87439
FEB. 21, 1990

Facts:
The private respondents (employees) filed with the DOLE a complaint charging the
petitioner (employer) with underpayment of wages, illegal deductions, non payment of
night shift differential, overtime pay, etc. When conciliation efforts failed, the parties
were required to submit their position papers. Based on the position papers, the
Regional Director issued an order directing the employer to pay the employees the
benefits prayed for.

Claiming that he was denied due process, the petitioner filed a motion for
reconsideration which was treated as an appeal. The Undersecretary affirmed with
modification the order of the Regional Director.

Hence, this petition for certiorari and prohibition

Ruling:
Requirement of the process is satisfied when the parties are given an opportunity to
submit position papers; what the fundamental law abhors is not absence of previous
notice but the absolute lack of opportunity to be heard. The petitioner was not denied
due process, for several hearings were in fact conducted by the hearing officer of the
Regional Office of the DOLE and the parties submitted position papers upon which the
Regional Director based his decision in the case. The requirements of due process are
satisfied when the parties are given an opportunity to submit position papers.
Principle of jurisdiction by estoppel. The petitioner is estopped from questioning the
alleged lack of jurisdiction of the Regional Director over the private respondents claims.
Petitioner submitted to the jurisdiction of the Regional Director by taking part in the
hearings before him and by submitting a position paper. This act of participation
amounts to estoppel, [that is, action speaks louder than words: the law does not allow a
person to speak against his own act or deed.]

URBANES, JR. VS. SEC. OF LABOR


GR NO. 122791
FEBRUARY 19, 2003

FACTS: Petitioner Placido O. Urbanes, Jr., doing business under the name and style of
Catalina Security Agency, entered into an agreement to provide security services to
respondent Social Security System (SSS). During the effectivity of the agreement,
petitioner, by letter of May 16, 1994, requested the SSS for the upward adjustment of
their contract rate in view of Wage Order No. NCR-03 which was issued by the Regional
Tripartite Wages and Productivity Board-NCR pursuant to Republic Act 6727 otherwise
known as the Wage Rationalization Act .On June 24, 1994, petitioner pulled out his
agency's services from the premises of the SSS and another security agency, Jaguar, took
over. On June 29, 1994, petitioner filed a complaint with the DOLE-NCR against the SSS
seeking the implementation of Wage Order No. NCR-03.The Regional Director of the
DOLE-NCR rendered judgment in favor of the petitioner. SSS appealed to the Secretary
of Labor. The Secretary of Labor set aside the order of the Regional Director and the
Secretary held petitioner's security agency "JOINTLY AND SEVERALLY liable for wage
differentials, the amount of which should be paid DIRECTLY to the security guards
concerned.

ISSUE: Whether or not the Secretary of Labor have jurisdiction to review appeals from
decisions of the Regional Directors in complaints filed under Article 129 of the Labor
Code.

RULING: In the case at bar, even if petitioner filed the complaint on his and also on
behalf of the security guards, the relief sought has to do with the enforcement of the
contract between him and the SSS which was deemed amended by virtue of Wage
Order No. NCR-03. The controversy subject of the case at bar is thus a civil dispute, the
proper forum for the resolution of which is the civil courts. But even assuming arguendo
that petitioner's complaints were filed with the proper forum, for lack of cause of action
it must be dismissed. Articles 106, 107 and 109 of the Labor Code provide:

ART. 106. CONTRACTOR OR SUBCONTRACTOR. Whenever an employer enters into


contract with another person for the performance of the former's work, the employees
of the contractor and of the latter's subcontractor, if any, shall be paid in accordance
with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wage of his employees
in accordance with this Code, the employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of the work performed
under the contract, in the same manner and extent that he is liable to employees
directly employed by him.
xxx xxx xxx (Emphasis and underscoring)
ART. 107.INDIRECT EMPLOYER. The provisions of the immediately preceding Article
shall likewise apply to any person, partnership, association or corporation which, not
being an employer, contracts with an independent contractor for the performance of
any work, task, job or project.

ART. 109.SOLIDARY LIABILITY. The provisions of existing laws to the contrary


notwithstanding, every employer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provision of this Code. For purposes
of determining the extent of their civil liability under this Chapter, they shall be
considered as direct employers. In fine, the liability of the SSS to reimburse petitioner
arises only if and when petitioner pays his employee-security guards "the increases"
mandated by Wage Order No. NCR-03. The records do not show that petitioner has paid
the mandated increases to the security guards. The security guards in fact have filed a
complaint with the NLRC against petitioner relative to, among other things,
underpayment of wages.

VICENTE ATILANO/ROSE SHIPPING LINES VS. DE LA SERNA


G.R. NO. 82488
FEBRUARY 28, 1990

FACTS
On 20 May 1985, private respondents filed a letter-complaint in the Regional Office of
the then Ministry of Labor and Employment, Cebu City, against petitioner Rose Shipping
Lines and its Proprietor/Manager Vicente Atilano docketed as LSED Case No. 055-85.
The letter-complaint alleged violations by petitioner of labor standard laws on minimum
wages, allowances, 13th month pay and overtime pay.

Acting on the letter-complaint, the Office of the Regional Director ordered a Labor
Standards and Welfare Officer (LSW officer, hereinafter) to conduct a complaint
inspection on 22 July 1985 at the establishment of petitioner in Cebu City.
Several conciliation conferences on the motion to dismiss were subsequently held and
both parties agreed that they would submit their respective position papers after which
petitioner's motion to dismiss would be deemed submitted for resolution.

On 24 April 1986, public respondent Regional Director denied petitioner's motion to


amiss for lack of merit. A motion for reconsideration or appeal was filed with the
Secretary of the Department of Labor and Employment on 19 May 1986. Petitioner
more than a year later filed a Manifestation and Motion with the Secretary dated 23 July
1987, enclosing therein a different set of quitclaims and/or a also prepared by petitioner
but allegedly signed by private respondents dated 9 July 1986 (i.e., different from those
earlier referred to by petitioner in his ex-partemotion to dismiss filed with the Regional
Director On 3 March 1988, public respondent Under of Labor rendered the questioned
order dismissing petitioner's motion for reconsideration or appeal for lack of merit.

ISSUE
Whether or not the public respondents, Regional Director and Undersecretary of Labor,
have jurisdiction over the subject matter of the case.

RULING
We do not find petitioner's argument persuasive. We believe that the question of the
authenticity or genuineness of the quitclaims, releases and waivers supposedly signed
by private respondents, but vehemently denied by the latter, could be verified by the
Regional Director in the course of, and in connection with, examination of the
petitioner's books and records of which such supposed quitclaims, etc. (if at all genuine)
must have fanned part. We note also that after petitioner on 19 May 1986 filed a
motion for reconsideration or appeal from the Regional Director's order of 16 January
1986, with the Secretary of Labor, the Secretary of Labor requested the Regional
Director to conduct conferences or hearings for the purpose of verifying the
genuineness and authenticity of private respondents' signatures on the quitclaim papers
submitted by petitioner.The quitclaim papers which petitioner alleges embodied a
compromise or settlement agreement were in any case not duly executed, that is, they
were not signed in the presence of the Regional Director or his duly authorized
representative, in disregard of the requirements of Section 8, Rule II of the Rules on the
Disposition of Labor Standards Cases in the Regional Offices. We note that petitioner did
not submit any rebuttal evidence before the Regional Director or his representatives.
Thus, the lack of inspection was cured when the Regional Director called the parties to
several conferences, at which conferences, petitioner could have presented whatever
he had in his books and records to refute the claims of private respondents; petitioner
did not do so and his failure must be deemed a waiver of his right to contest the
conclusions of the Regional Director on the basis of the evidence and records actually
made available to him.

BROKENSHIRE MEMORIAL HOSPITAL VS. HON. MINISTER OF LABOR AND


EMPLOYMENT
G.R. NO. 74621
FEBRUARY 7, 1990
PARAS, J.

Facts:
This case originated from a complaint filed by private respondents against petitioner on
September 21, 1984 with the Regional Office of the MOLE, Region XI, Davao City for
non-compliance with the provisions of Wage Order No. 5. After due healing the Regional
Director rendered a decision dated November 16, 1984 in favor of private respondents.
Judgment having become final and executory, the Regional Director issued a Writ of
Execution whereby some movable properties of the hospital (petitioner herein) were
levied upon and its operating expenses kept with the bank were garnished. The levy and
garnishment were lifted when petitioner hospital paid the claim of the private
respondents (281 hospital employees) directly, in the total amount of P163,047.50
covering the period from June 16 to October 15, 1984. After making said payment,
petitioner hospital failed to continue to comply with Wage Order No. 5 and likewise,
failed to comply with the new Wage Order No. 6 which took effect on November 1,
1984, prompting private respondents to file against petitioner another complaint
docketed as ROXI-LSED-14-85, which is now the case at bar.

Issue:
Whether the Regional Director has jurisdiction over money claims of workers concurrent
with the Labor Arbiter.
Held:
Regional Director has no jurisdiction over workers' money claims, the Court in the three
(3) cases above-mentioned ruled that in view of the promulgation of Executive Order
No. 111, the ruling in the earlier case of Zambales Base Metals is already abandoned. In
accordance with the rulings in Briad Agro, L.M. Camus, and Maternity Children's
Hospital, the Regional Director exercises concurrent jurisdiction with the Labor Arbiter
over money claims. Thus, Executive Order No. 111 is in the character of a curative law,
that is to say, it was intended to remedy a defect that, in the opinion of the legislative
(the incumbent Chief Executive in this case, in the exercise of her lawmaking power
under the Freedom Constitution) had attached to the provision subject of the
amendment. This is clear from the proviso: "The provisions of Article 217 to the contrary
notwithstanding . . ." Plainly, the amendment was meant to make both the Secretary of
Labor (or the various Regional Directors) and the Labor Arbiter share jurisdiction.

RA 6715 amended Art. 129 and Art. 217 of the Labor Code, to read as follows:

ART. 129.Recovery of wages, simple money claims and other benefits.Upon complaint
of any interested party, the Regional Director of the Department of Labor and
Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide any
matter involving the recovery of wages and other monetary claims and benefits,
including legal interest, owing to an employee or person employed in domestic or
household service or househelper under this code, arising from employer-employee
relations, Provided, That such complaint does not include a claim for reinstatement;
Provided, further, That the aggregate money claims of each employee or househelper
do not exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer
shall decide or resolve the complaint within thirty (30) calendar days from the date of
the filing of the same.

Viewed in the light of RA 6715 and read in consonance with the case of Briad Agro
Development Corp., as reconsidered, We hold that the instant case falls under the
exclusive original jurisdiction of the Labor Arbiter RA 6715 is in the nature of a curative
statute. Curative statutes have long been considered valid in our jurisdiction, as long as
they do not affect vested rights. In this case, We do not see any vested right that will be
impaired by the application of RA 6715. Inasmuch as petitioner had already paid the
claims of private respondents in the amount of P163,047.50 pursuant to the decision
rendered in the first complaint, the only claim that should be deliberated upon by the
Labor Arbiter should be limited to the second amount given by the Regional Director in
the second complaint together with the proposal to offset the obligations.

SEAFDEC AQD V. NLRC


G.R. NO. 86773
FEBRUARY 14, 1992
NOCON, J.
Facts:
Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-
AQD) is a department of an international organization, the Southeast Asian Fisheries
Development Center, organized through an agreement entered into in Bangkok,
Thailand. Juvenal Lazaga was employed as a Research Associate. Lacanilao in his
capacity as Chief of SEAFDEC-AQD sent a notice of termination to private respondent
informing him that due to the financial constraints being experienced by the
department, his services shall be terminated. SEAFDEC-AQD's failure to pay Lazaga his
separation pay forced him to file a case with the NLRC. The LA and NLRC ruled in favor
of Lazaga. SEAFDEC-AQD claimed that the NLRC has no jurisdiction over the case.

Issue: W/N NLRC has jurisdiction over the case? NO

Held:
Petition Granted. Southeast Asian Fisheries Development Center-Aquaculture
Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction of public
respondent NLRC. Being an intergovernmental organization, SEAFDEC including its
Departments (AQD), enjoys functional independence and freedom from control of the
state in whose territory its office is located.

ZIALCITA, ET AL. V. PAL,


RO4-3-3398-76, 20
FEBRUARY 1977

Facts:
Complainant Zialcita, an international flight stewardess of PAL, wasdischarged from the
service on account of her marriage. In separating Zialcita, PALinvoked its policy which
stated that flight attendants must be single, and shall beautomatically separated from
employment in the event they subsequently getmarried. They claimed that this policy
was in accordance with Article 132 of theLabor Code. On the other hand, Zialcita
questioned her termination on account of her marriage, invoking Article 136 of the
same law.

Issue:
W/N Zialcita was validly terminated on account of her marriage.

Ruling
NO. When Presidential Decree No. 148, otherwise known as theWomen and Child Labor
Law, was promulgated in 13 March 1973, PALs policy hadmet its doom. However, since
no one challenged its validity, the said policy wasable to obtain a momentary reprieve.
Section 8 of PD148 is exactly the same provision reproduced verbatim in Article 136 of
the Labor Code, which waspromulgated on 1 May 1974 and took effect six months
later.Although Article 132 enjoins the Secretary of Labor to establish standardsthat will
ensure the safety and health of women employees and in appropriatecases shall by
regulation require employers to determine appropriate minimumstandards for
termination in special occupations, such as those of flight attendants,it is logical to
presume that, in the absence of said standards or regulations whichare yet to be
established, the policy of PAL against marriage is patently illegal.
Article 136 is not intended to apply only to women employed in ordinaryoccupations, or
it should have categorically expressed so. The sweepingintendment of the law, be it on
special or ordinary occupations, is reflected inthe whole text and supported by Article
135 that speaks of non-discriminationon the employment of women.

PHILIPPINE GLOBAL COMMUNICATIONS, INC. vs. RICARDO DE VERA


G.R. No. 157214
June 7, 2005

FACTS: De Vera and petitioner company entered into a contract where respondent was
to attend to the medical needs of petitioners employees while being paid a retainer fee
of P4,000 per month. Later, De Vera was informed y petitioner that the retainership will
be discontinued. Respondent filed a case for illegal dismissal.

ISSUE: Whether or not de Vera is an employee of PhilComm or an independent


contractor.

HELD: Applying the four fold test, de Vera is not an employee. There are several
indicators apart from the fact that the power to terminate the arrangement lay on both
parties:

from the time he started to work with petitioner, he never was included in its payroll;
was never deducted any contribution for remittance to the Social Security System (SSS);
he was subjected by petitioner to the ten (10%) percent withholding tax for his
professional fee, in accordance with the National Internal Revenue Code, matters which
are simply inconsistent with an employer-employee relationship;
the records are replete with evidence showing that respondent had to bill petitioner for
his monthly professional fees. 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.
Finally, the element of control s absent. Petition granted
JOSE B. SARMIENTO VS. EMPLOYEES' COMPENSATION COMMISSION & GOVERNMENT
SERVICE INSURANCE SYSTEM (NATIONAL POWER CORPORATION)
G.R. NO. L-65680
MAY 11, 1989

Facts:

Flordeliza Sarmiento was employed by the National Power Corporation in Quezon City
as accounting clerk in May 1974. At the time of her death on August 12, 1981 she was
manager of the budget division. History of the deceased's illness showed that symptoms
manifested as early as April 1980 as a small wound over the external auditory canal and
mass over the martoid region. Biopsy of the mass revealed cancer known as
"differentiated squamous cell carcinoma." The employee sought treatment in various
hospitals, namely, Veterans Memorial Hospital, United Doctors Medical Hospital and
Makati Medical Center. In March 1981, a soft tissue mass emerged on her left upper
cheek as a result of which her lips became deformed and she was unable to close her
left eye. She continued treatment and her last treatment at the Capitol Medical Center
on July 12, 1 981 was due to her difficulty of swallowing food and her general debility.
On August 12, 1981, she succumbed to cardiorespiratory arrest due to parotid
carcinoma. She was 40 years old.

On August 25, 1983, the respondent Commission affirmed the GSIS' decision. It found
that the deceased's death causation by parotid carcinoma is not compensable because
she did not contract nor suffer from the same by reason of her work but by reason of
embryonic rests and epithelial growth.
It may be noted that the petitioner was earlier paid GSIS benefits in the amount of
P142,285.03 but the claim for employee's compensation was disallowed.

Issue:
Whether or not the petitioner is entitled to the employees compensation.

Held:
The wisdom of the present scheme of workmen's compensation is a matter that should
be addressed to the President and Congress, not to this Court. Whether or not the
former workmen's compensation program with its presumptions, controversions,
adversarial procedures, and levels of payment is preferable to the present scheme must
be decided by the political departments. The present law was enacted in the belief that
it better complies with the mandate on social justice and is more advantageous to the
greater number of working men and women. Until Congress and the President decide to
improve or amend the law, our duty is to apply it.

WHEREFORE, the petition is DISMISSED. The decisions of the Government Service


Insurance System and the Employees' Compensation Commission denying the claim are
AFFIRMED.
SO ORDERED.

ZAIDA G. RARO VS EMPLOYEES' COMPENSATION COMMISSION AND GOVERNMENT


SERVICE INSURANCE SYSTEM (BUREAU OF MINES AND GEO-SCIENCES)
G.R. NO. L-58445
APRIL 27, 1989

Facts:
On March 17, 1975 the petitioner states that she was in perfect health when employed
as a clerk by the Bureau of Mines and Geo-Sciences at its Daet, Camarines Norte
regional office. Four years later, she began suffering from severe and recurrent
headaches coupled with blurring of vision. Forced to take sick leaves every now and
then, she sought medical treatment in Manila. She was then a Mining Recorder in the
Bureau. The petitioner was diagnosed at the Makati Medical Center to be suffering from
brain tumor. A claim for disability benefits filed by her husband with the Government
Service Insurance System (GSIS) was denied. A motion for reconsideration was similarly
denied. An appeal to the Employees' Compensation Commission resulted in the
Commission's affirming the GSIS decision.

Issue:
1. Whether brain tumor which causes are unknown but contracted during
employment is compensable under the present compensation laws.
2. Whether the presumption of compensability is absolutely inapplicable under the
present compensation laws when a disease is not listed as occupational disease.
(p. 17, Rollo)

Held:
Jurisprudence on the compensability of cancer ailments has of late become a source of
confusion among the claimants and the government agencies enforcing the employees'
compensation law. The strongly lingering influence of the principles of 94 presumption
of compensability" and "aggravation" found in the defunct Workmen's Compensation
Act but expressly discarded under the present compensation scheme has led to conflict
and inconsistency in employees' compensation decisions.
Employees' compensation is based on social security principles. All covered employers
throughout the country are required by law to contribute fixed and regular premiums or
contributions to a trust fund for their employees. Benefits are paid from this trust fund.
At the time the amount of contributions was being fixed, actuarial studies were
undertaken. The actuarially determined number of workers who would probably file
claims within any given year is important in insuring the stability of the said fund and
making certain that the system can pay benefits when due to all who are entitled and in
the increased amounts fixed by law.
BELARMINO VS. EMPLOYEES' COMPENSATION COMMISSION
G.R. NO. 90204
MAY 11, 1990

Facts:
This case involves a claim for benefits for the death of a lady school teacher which the
public respondents disallowed on the ground that the cause of death was not work-
connected.
Petitioner's wife, Oania Belarmino, was a classroom teacher of the Department of
Education, Culture and Sports at the Buracan Elementary School in Dimasalang,
Masbate .She had been teacher since October 18, 1971. Her husband, the petitioner, is
also a public school teacher.

That on January 14, 1982, at nine o'clock in the morning, while performing her duties as
a classroom teacher, Mrs. Belarmino who was in her 8th month of pregnancy,
accidentally slipped and fell on the classroom floor. Moments later, she complained of
abdominal pain and stomach cramps. For several days, she continued to suffer from
recurrent abdominal pain and a feeling of heaviness in her stomach, but, heedless of the
advice of her female co-teachers to take a leave of absence, she continued to report to
the school because there was much work to do. On January 25, 1982, eleven (11) days
after her accident, she went into labor and prematurely delivered a baby girl at home.

Her abdominal pains persisted even after the delivery, accompanied by high fever and
headache. She was brought to the Alino Hospital in Dimasalang, Masbate on February
11, 1982. Dr. Alfonso Alino found that she was suffering from septicemia post partum
due to infected lacerations of the vagina. She was discharged from the hospital after five
(5) days on February 16, 1982, apparently recovered but she died three (3) days later.
The cause of death was septicemia post partum. She was 33 years old, survived by her
husband and four (4) children, the oldest of whom was 11 years old and the youngest,
her newborn infant.

Issue:
Whether or not that there is no merit in the public respondents' argument that the
cause of the decedent's post partum septicemia "was the infected vaginal lacerations
resulting from the decedent's delivery of her child at home" for the incident in school
could not have caused septicemia post partum.

Held:
After a careful consideration of the petition and the annexes thereof, as well as the
comments of the public respondents, we are persuaded that the public respondents'
peremptory denial of the petitioner's claim constitutes a grave abuse of discretion.
Rule III, Section 1 of the Amended Rules on Employees' Compensation enumerates the
grounds for compensability of injury resulting in disability or death of an employee, as
follows:

Sec. 1. Grounds (a) For the injury and the resulting disability or death to be
compensable, the injury must be the result of an employment accident satisfying all of
the following conditions:

The employee must have been injured at the place where his work requires him to be;

The employee must have been performing his official functions; and

If the injury is sustained elsewhere, the employee must have been executing an order
for the employer.

For the sickness and the resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under Annex "A" of these Rules with
the conditions set therein satisfied; otherwise, proof must be shown that the risk of
contracting the disease is increased by the working conditions.

Only injury or sickness that occurred on or after January 1, 1975 and the resulting
disability or death shall be compensable under these Rules.

The argument is unconvincing. It overlooks the fact that septicemia post partum is a
disease of childbirth, and premature childbirth would not have occurred if she did not
accidentally fall in the classroom.

It is true that if she had delivered her baby under sterile conditions in a hospital
operating room instead of in the unsterile environment of her humble home, and if she
had been attended by specially trained doctors and nurses, she probably would not
have suffered lacerations of the vagina and she probably would not have contracted the
fatal infection. Furthermore, if she had remained longer than five (5) days in the hospital
to complete the treatment of the infection, she probably would not have died. But who
is to blame for her inability to afford a hospital delivery and the services of trained
doctors and nurses? The court may take judicial notice of the meager salaries that the
Government pays its public school teachers. Forced to live on the margin of poverty,
they are unable to afford expensive hospital care, nor the services of trained doctors
and nurses when they or members of their families are in. Penury compelled the
deceased to scrimp by delivering her baby at home instead of in a hospital.

The Government is not entirely blameless for her death for it is not entirely blameless
for her poverty. Government has yet to perform its declared policy "to free the people
from poverty, provide adequate social services, extend to them a decent standard of
living, and improve the quality of life for all (Sec. 7, Art. II, 1973 Constitution and Sec. 9,
Art. II, 1987 Constitution). Social justice for the lowly and underpaid public school
teachers will only be an empty shibboleth until Government adopts measures to
ameliorate their economic condition and provides them with adequate medical care or
the means to afford it. "Compassion for the poor is an imperative of every humane
society" (PLDT v. Bucay and NLRC, 164 SCRA 671, 673). By their denial of the petitioner's
claim for benefits arising from the death of his wife, the public respondents ignored this
imperative of Government, and thereby committed a grave abuse of discretion.

HINOGUIN VS EMPLOYEES COMPENSATION COMMISSION


G.R. 84307
APRIL 17, 1989
FELICIANO, J.

Facts:

Sgt. Lemick Hinoguin was a sergeant in A company, 14th Infantry Battalion, 5th
Infantry Division, Philippine Army. On August 1, 1985, Sgt. Hinoguin, Cpl. Rogelio Clavo
and Dft. Nicomedes Alibuyog sought permission from Capt. Frankie Besas, to go on
overnight pass to Aritao, Nueva Viscaya. Capt. Besas orally granted them permission to
go to Aritao and to take their issued firearms with them considering that Aritao was
regarded as a critical place.

The three soldiers went to Dft. Alibuyogs home for a meal and some drinks. At around
7:00 PM, the soldiers headed back to the headquarters. They boarded a tricycle. When
they reached the poblacion, Alibuyog dismounted from the tricycle. Not noticing that his
rifles safety lever was on semi-automatic, he accidentally touched the trigger, firing a
single shot in the process and hitting Sgt. Hinoguin in the left lower abdomen. Sgt.
Hinoguin died a few days after the incident.

In the investigation conducted by the 14th Infantry Battalion, it was found that the
shooting of Sgt. Hinoguin was purely accidental in nature and that he died in the line of
duty. The Life of Duty Board of Officers recommended that all benefits due the legal
dependents of the late Sgt. Hinoguin be given.

However, when the father of the deceased made a claim from GSIS, the same was
denied on the ground that the deceased was neither at his work place nor performing
his duty as a soldier of the Philippine Army at the time of his death. This denial was
confirmed by the respondent ECC.

Issue: WON the death of Sgt. Hinoguin is compensable.

Held:
Article 167 (k) of the Labor Code as amended defines a compensable injury quite
simply as any harmful change in the human organism from any accident arising out of
and in the course of the employment. The Amended (Implementing) Rules have,
however, elaborated considerably on the simple and succinct statutory provision. Rule
III, Section 1 (a) reads:

SECTION 1. Grounds. (a) For the injury and the resulting disability or death to be
compensable, the injury must be the result of an employment accident satisfying all of
the following grounds:

The employee must have been injured at the place work requires him to be;

The employee must have been performing his official functions; and

If the injury is sustained elsewhere, the employee must have been executing an order
for the employer.

The concept of a work place referred to in Ground 1, for instance, cannot always be
literally applied to a soldier on active duty status, as if he were a machine operator or a
worker in an assembly line in a factory or a clerk in a particular fixed office. Obviously, a
soldier must go where his company is stationed. In the instant case, Aritao, Nueva
Viscaya was not, of course, Carranglan, Nueva Ecija. Aritao being approximately 1-1/2
hours away from the latter by public transportation. But Sgt. Hinoguin, Cpl. Clavo and
Dft. Alibuyog had permission from their Commanding Officer to proceed to Aritao, and it
appears to us that a place which soldiers have secured lawful permission to be at cannot
be very different, legally speaking, from a place where they are required to go by their
commanding officer. They were not on vacation leave.

It may be noted in this connection that a soldier on active duty status is really on 24
hours a day official duty status and is subject to military discipline and military law 24
hours a day. He is subject to call and to the orders of his superior officers at all times, 7
days a week, except, of course, when he is on vacation leave status (which Sgt. Hinoguin
was not). Indeed, it appears to us that a soldier should be presumed to be on official
duty unless he is shown to have clearly and unequivocally put aside that status or
condition temporarily by, e.g., going on an approved vacation leave.

Thus, we think that the work-connected character of Sgt. Hinoguins injury and death
was not effectively precluded by the simple circumstance that he was on an overnight
pass to go to the home of Dft. Alibuyog, a soldier under his own command. Sgt.
Hinoguin did not effectively cease performing official functions because he was
granted a pass. While going to a fellow soldiers home for a few hours for a meal and
some drinks was not a specific military duty, he was nonetheless in the course of
performance of official functions.

GSIS VS CA & F. ALEGRE


G.R. NO. 128524
APRIL 20, 1999

Facts:

Private respondent Felonila Alegres deceased husband, SPO2 Florencio A. Alegre, was a
police officer assigned to the Philippine National Police station in the town of Vigan,
Ilocos Sur. On December 6, 1994, he was driving his tricycle and ferrying passengers
within the vicinity of Imelda Commercial Complex when SPO4 Alejandro Tenorio, Jr.,
Team/Desk Officer of the Police Assistance Center located at said complex, confronted
him regarding his tour of duty. SPO2 Alegre allegedly snubbed SPO4 Tenorio and even
directed curse words upon the latter. A verbal tussle then ensued between the two
which led to the fatal shooting of the deceased police officer.

Private respondent seasonably filed a claim for death benefits with petitioner
Government Service Insurance System (GSIS) pursuant to Presidential Decree No. 626.
In its decision on August 7, 1995, the GSIS, however, denied the claim on the ground
that at the time of SPO2 Alegres death, he was performing a personal activity which
was not work-connected. Subsequent appeal to the Employees Compensation
Commission (ECC) proved futile as said body, in a decision dated May 9, 1996, merely
affirmed the ruling of the GSIS.

Issue:
Whether or not a moonlighting policemans death be considered compensable?

Held:
The private respondent finally obtained a favorable ruling in the Court of Appeals when
on February 28, 1997, the appellate court reversed the ECCs decision and ruled that
SPO2 Alegres death was work-connected and, therefore, compensable. Citing Nitura v.
Employees Compensation Commission and Employees Compensation Commission v.
Court of Appeals,[4] the appellate court explained the conclusion arrived at, thus:

The Supreme Court held that the concept of a workplace cannot always be literally
applied to a person in active duty status, as if he were a machine operator or a worker in
an assembly line in a factory or a clerk in a particular fixed office.

The deceased was driving his tricycle, with passengers aboard, when he was accosted by
another police officer. This would lend some semblance of viability to the argument
that he was not in the performance of official duty at the time. However, the argument,
though initially plausible, overlooks the fact that policemen, by the nature of their
functions, are deemed to be on a round-the-clock duty.

Aggrieved, GSIS comes to us on petition for review on certiorari reiterating its position
that SPO2 Alegres death lacks the requisite element of compensability which is, that
the activity being performed at the time of death must be work-connected.
Under the pertinent guidelines of the ECC on compensability, it is provided that for the
injury and the resulting disability or death to be compensable, the injury must be the
result of an employment accident satisfying all of the following conditions:

The employee must have been injured at the place where his work requires him to be;

The employee must have been performing his official functions; and

If the injury is sustained elsewhere, the employee must have been executing an order
for the employer.[5]

As to the question of whether or not he was performing an official function at the time
of the incident, it has been held that a soldier on active duty status is really on a 24
hours a day official duty status and is subject to military discipline and military law 24
hours a day. He is subject to call and to the orders of his superior officers at all times,
seven (7) days a week, except, of course, when he is on vacation leave status. Thus, a
soldier should be presumed to be on official duty unless he is shown to have clearly and
unequivocally put aside that status or condition temporarily by going on approved
vacation leave.

The Court did not justify its grant of death benefits merely on account of the rule that
soldiers or policemen, as the case may be, are virtually working round-the-clock. Note
that the Court likewise attempted in each case to find a reasonable nexus between the
absence of the deceased from his assigned place of work and the incident that led to his
death. In other words, the 24-hour duty doctrine should not be sweepingly applied to all
acts and circumstances causing the death of a police officer but only to those which,
although not on official line of duty, are nonetheless basically police service in character.

ILOILO DOCK AND ENGINEERING CORP VS WCC


G.R. NO. L-26341
NOVEMBER 27, 1968

Facts:
An appeal by the Iloilo Dock and Engineering Company (hereinafter referred to as the
IDECO) from the decision dated February 28, 1966 of the Workmen's Compensation
Commission (hereinafter referred to as the Commission) affirming the decision of the
Regional Office VII in Iloilo City, and ordering the IDECO to pay to the widow and
children of Teodoro G. Pablo (Irenea M. Pablo and the minors Edwin, Edgar and Edna, all
surnamed Pablo) the sum of P4,000, to pay to the widow P89 as reimbursement for
burial expenses and P300 as attorney's fees, and to pay to the Commission the amount
of P46 as fees pursuant to section 55 of the Workmen's Compensation Act, as amended.
On January 29, 1960, Pablo, who was employed as a mechanic of the IDECO, while
walking on his way home, was shot to death in front of, and about 20 meters away
from, the main IDECO gate, on a private road commonly called the IDECO road. The
slayer, Martin Cordero, was not heard to say anything before or after the killing. The
motive for the crime was and still is unknown as Cordero was himself killed before he
could be tried for Pablo's death. At the time of the killing, Pablo's companion was
Rodolfo Galopez, another employee, who, like Pablo, had finished overtime work at 5:00
p.m. and was going home. From the main IDECO gate to the spot where Pablo was
killed, there were four "carinderias" on the left side of the road and two "carinderias"
and a residential house on the right side. The entire length of the road is nowhere
stated in the record.

Issue:
Whether Pablo's death comes within the meaning and intendment of that "deceptively
simple and litigiously prolific.

Held:
The statute is not intended to relieve completely an employee from the burden of
showing that accidental injuries suffered by him actually were sustained in the course of
his employment. "It is not the law that mere proof of an accident, without other
evidence, creates the presumption under section 21 of the Workmen's Compensation
Law (Consol. Law, c. 67) that the accident arose out of and in the course of the
employment. On the contrary, it has been frequently held, directly and indirectly, that
there must be some evidence from which the conclusion can be drawn that the injuries
did arise out of and in the course of the employment." Proof of the accident will give
rise to the statutory presumption only where some connection appears between the
accident and the employment.

But even without the foregoing pronouncement, the employer should still be held liable
in view of our conclusion that that portion of the road where Pablo was killed, because
of its proximity, should be considered part of the IDECO's premises. Hence, the injury
was in the course of employment, and there automatically arises the presumption
invoked in Rivera that the injury by assault arose out of the employment, i. e., there is
a causal relation between the assault and the employment.

We do say here that the circumstances of time, two minutes after dismissal from
overtime work, and space, twenty meters from the employer's main gate, bring Pablo's
death within the scope of the course factor. But it may logically be asked: Suppose it
were three minutes after and thirty meters from, or five minutes after and fifty meters
from, would the "proximity" rule still apply? In answer, we need but quote that portion
of the decision in Jean vs. Chrysler Corporation, supra, which answered a question
arising from an ingenious hypothetical question put forth by the defendant therein:
We could, of course, say "this is not the case before us" and utilize the old saw, "that
which is not before us we do not decide." Instead, we prefer to utilize the considerably
older law: "Sufficient unto the day is the evil thereof" (Matthew 1:34), appending,
however, this admonition: no statute is static; it must remain constantly viable to meet
new challenges placed to it. Recovery in a proper case should not be suppressed
because of a conjectural posture which may never arise and which if it does, will be
decided in the light of then existing law.

Since the Workmen's Compensation Act is basically a social legislation designed to


afford relief to workmen, it must be liberally construed to attain the purpose for which
it was enacted. Liberally construed, sec. 2 of the Act comprehends Pablo's death. The
Commission did not err in granting compensation.

ALANO VS ECC
G.R. NO. L-48594
MARCH 16, 1988

Facts:
That on June 27, 1977, Generoso C. Alano, brother of the deceased, filed the instant
claim for in come benefit with the GSIS for and in behalf of the decedent's children. The
claim was, however, denied on the same date on the ground that the "injury upon
which compensation is being claimed is not an employment accident satisfying all the
conditions prescribed by law." On July 19, 1977 appellant requested for a
reconsideration of the system's decision, but the same was denied and the records of
the case were elevated to this Commission for review.

A government employee during her lifetime, Dedicacion de Vera, worked as principal of


Salinap Community School in San Carlos City, Pangasinan. Her tour of duty was from
7:30 a.m. to 5:30 p.m. On November 29, 1976, at 7:00 A.M., while she was waiting for a
ride at Plaza Jaycee in San Carlos City on her way to the school, she was bumped and
run over by a speeding Toyota mini-bus which resulted in her instantaneous death. She
is survived by her four sons and a daughter.

Issue:
Whether or not the injury sustained by the deceased Dedicacion de Vera resulting in her
death is compensable under the law as an employment accident.

Held:
In this case, it is not disputed that the deceased died while going to her place of work.
She was at the place where, as the petitioner puts it, her job necessarily required her to
be if she was to reach her place of work on time. There was nothing private or personal
about the school principal's being at the place of the accident. She was there because
her employment required her to be there.

As to the Government Service Insurance System's manifestation, we hold that it is not


fatal to this case that it was not impleaded as a party respondent. As early as the case of
La O v. Employees' Compensation Commission, (97 SCRA 782) up to Cabanero v.
Employees' Compensation Commission (111 SCRA 413) and recently, Clemente v.
Government Service Insurance System (G.R. No. L-47521, August 31,1987), this Court
has ruled that the Government Service Insurance System is a proper party in employees'
compensation cases as the ultimate implementing agency of the Employees'
Compensation Commission. We held in the aforecited cases that "the law and the rules
refer to the said System in all aspects of employee compensation including enforcement
of decisions (Article 182 of Implementing Rules)."

LAZO VS EMPLOYEES COMPENSATION COMMISSION


G.R. NO. 78617
JUNE 18, 1990

Facts:
At about 6:00 o'clock in the morning of 19 June 1986, on his way home, the passenger
jeepney the petitioner was riding on turned turtle due to slippery road. As a result, he
sustained injuries and was taken to the Angono Emergency Hospital for treatment. He
was later transferred to the National Orthopedic Hospital where he was confined until
25 July 1986.

Petitioner, Salvador Lazo, is a security guard of the Central Bank of the Philippines
assigned to its main office in Malate, Manila. His regular tour of duty is from 2:00 o'clock
in the afternoon to 10:00 o'clock in the evening. On 18 June 1986, the petitioner
rendered duty from 2:00 o'clock in the afternoon to 10:00 o'clock in the evening. But, as
the security guard who was to relieve him failed to arrive, the petitioner rendered
overtime duty up to 5:00 o'clock in the morning of 19 June 1986, when he asked
permission from his superior to leave early in order to take home to Binangonan, Rizal,
his sack of rice.

Issue:
Whether or not the accident which involved the petitioner occurred far from his work
place and while he was attending to a personal matter.
Held:
In the case at bar, it can be seen that petitioner left his station at the Central Bank
several hours after his regular time off, because the reliever did not arrive, and so
petitioner was asked to go on overtime. After permission to leave was given, he went
home. There is no evidence on record that petitioner deviated from his usual, regular
homeward route or that interruptions occurred in the journey.

While the presumption of compensability and theory of aggravation under the


Workmen's Compensation Act (under which the Baldebrin case was decided) may have
been abandoned under the New Labor Code, 8 it is significant that the liberality of the
law in general in favor of the workingman still subsists. As agent charged by the law to
implement social justice guaranteed and secured by the Constitution, the Employees
Compensation Commission should adopt a liberal attitude in favor of the employee in
deciding claims for compensability, especially where there is some basis in the facts for
inferring a work connection to the accident.

This kind of interpretation gives meaning and substance to the compassionate spirit of
the law as embodied in Article 4 of the New Labor Code which states that 'all doubts in
the implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in favor of labor.'

The policy then is to extend the applicability of the decree (PD 626) to as many
employees who can avail of the benefits thereunder. This is in consonance with the
avowed policy of the State to give maximum aid and protection to labor. 9

There is no reason, in principle, why employees should not be protected for a


reasonable period of time prior to or after working hours and for a reasonable distance
before reaching or after leaving the employer's premises.

VICENTE VS. ECC


G.R. NO. 85024
JANUARY 23, 1991
SARMIENTO, J.

FACTS:

[P]etitioner was formerly employed as a nursing attendant at the Veterans Memorial


Medical Center in Quezon City. At the age of forty-five, and after having rendered more
than twenty-five years of government service, he applied for optional retirement under
the provisions of Section 12(c) of Republic Act No. 1616, giving as reason therefor his
inability to continue working as a result of his physical disability. The petitioner likewise
filed with the Government Service Insurance System (GSIS) an application for income
benefits claim for payment under Presidential Decree (PD) No. 626, as amended. Both
applications were accompanied by the necessary supporting papers, among them being
a Physicians Certification issued by the petitioners attending doctor. The petitioners
application for income benefits claim payment was granted but only for permanent
partial disability (PPD) compensation or for a period of nineteen months

ISSUE:

Whether or not the petitioner suffers from permanent total disability.

HELD:

YES. The decision of the respondent Employees Compensation Commission (ECC) was
set aside.

RATIO:

[T]he petitioners permanent total disability is established beyond doubt by several


factors and circumstances. Noteworthy is the fact that from all available indications, it
appears that the petitioners application for optional retirement on the basis of his
ailments had been approved. Considering that the petitioner was only 45 years old
when he retired and still entitled, under good behavior, to 20 more years in service, the
approval of his optional retirement application proves that he was no longer fit to
continue in his employment. For optional retirement is allowed only upon proof that the
employee-applicant is already physically incapacitated to render sound and efficient
service.

The sympathy of law on social security is towards its beneficiaries and the law by its own
terms, requires a construction of utmost liberality in its favor.

PEREZ VS EMPLOYEES COMPENSATION COMMISSION


G.R. NO. L-48488
APRIL 25, 1980

Facts:
On October 21, 1976, petitioner filed a claim for disability benefits under Presidential
Decree No. 626, as amended, with respondent Government Service Insurance System
(p. 1, ECC rec.).

On October 25, 1976, respondent GSIS denied said claim on the ground that petitioner's
ailments, rheumatoid arthritis and pneumonitis, are not occupational diseases taking
into consideration the nature of her particular work. In denying aforesaid claim,
respondent GSIS thus resolved:
Upon evaluation based on general accepted medical authorities, your ailments are
found to be the least causally related to your duties and conditions of work. We believe
that our ailments are principally traceable to factors which are definitely not work-
connected. Moreover, the evidences you have, submitted have not shown that the said
ailments directly resulted from your occupation as Teacher IV of Raja Soliman High
School, Manila (Letter-Resolution, p. 4, ECC Case No. 0462).

Petitioner now maintains that her ailments arose in the course of employment and were
aggravated by the condition and nature of her work. Specifically, she asserts that
"pneumonitis or baby pneumonia which has become chronic that led to bronchiectasis
which is irreversible and permanent in nature is compensable under No. 21 of
compensable diseases (Resolution No. 432 dated July 20, 1977) as conditions were
present as attested to by doctor's affidavits and certifications."

Issue:

Whether or not petitioners claims she contracted pneumonitis and/or bronchiectasis


with hemoptysis and rheumatoid arthritis on January 27, 1975 after wetting and chilling
during the course of employment which are permanent and recurring in nature and
work-connected.

Held:

Article 167 (1) of the new Labor Code provides that


'Sickness' means any illness definitely accepted as an occupational disease listed by the
Commission, or any illness caused by employment subject to proof by the employee
that the risk of contracting the same is increased by working conditions. ...

Rule 111, Section 1 (b) of the Amended Rules on Employees' Compensation thus
provides:

(b) For the sickness and the resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under Annex 'A' of these Rules with
the conditions set therein satisfied; otherwise, proof must be shown that the risk of
contracting the disease is increased by working conditions.

Rule III, Section 1 (c) of said Rules states:

Only inqiury or sickness that occurred on or after January 1, 1975 and the resulting
disability or death shall be compensable under these Rules.

The aforequoted provisions clearly establish that for an illness to be compensable, it


must either be:
An illness definitely accepted as an occupational disease; or

An illness caused by employment subject to proof by the employee that the risk of
contracting the same is increased by working conditions.

Significantly, also, the Employees' Compensation Commission, in its Resolutions Nos.


233 and 432, respectively dated March 16, 1977 and July 20, 1977, adopted a more
realistic construction of the provisions of the New Labor Code by including in the list of
compensable ailments and diseases, cardiovascular disease which comprehends
myocardial infarction, pneumonitis and bronchial asthma (Sepulveda vs. WCC, et al., L-
46290, Aug. 25,1978).

Furthermore, it must be stressed that "the approval of petitioner's application for


retirement is a clear indication that she was physically incapacitated to render efficient
service (Sudario vs. Republic, L-44088, Oct. 6, 1977; Dimaano vs. WCC, et al., supra).
Petitioner was allowed to retire under the disability retirement plan on August 31, 1975
at the age of 54 which is way below the compulsory retirement age of 65. Under
Memorandum Circular No. 133 issued by the retirement shall be recommended for
approval only when "the employee applicant is below 65 years of age and is physically
incapacitated to render further efficient service." Obviously, petitioner thus retired by
reason of her ailments.

Finally, Republic Act 4670, otherwise known as the Magna Charta for Public School
Teachers, recognized the enervating effects of these factors (duties and activities of a
school teacher certainly involve physical, mental and emotional stresses) on the health
of school teachers when it directed in one of its provisions that "Teachers shall be
protected against the consequences of employment injury in accordance with existing
laws. The effects of the physical and nervous strain on the teachers's health shall be
recognized as compensable occupational diseases in accordance with laws" (Pantoja vs.
Republic, et al.. L-43317, December 29, 1978.)