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1. San Miguel Corporation vs Etcuban
❖ Reasonable Causal Connection Rule”; Under the “reasonable causal connection
rule,” if there is a reasonable causal connection between the claim asserted and
the employer-employee relations, then the case is within the jurisdiction of the
labor courts.
❖ Damages incurred by employees as a result of an alleged fraudulent
retrenchment program and the allegedly defective “contract of termination” are
merely the civil aspect of the injury brought about by their illegal dismissal, and
the civil ramifications of their actual claim cannot alter the reality that it is
primordially a labor matter and, as such, is cognizable by labor courts.
❖ If the consent of a contracting party is vitiated by fraud, the contract is not void
but, merely, voidable.

San Miguel Corporation (SMC) informed its Mandaue City Brewery employees
that it was suffering from heavy losses and financial distress which could eventually
lead to its total closure. SMC offered its “Retrenchment to Prevent Loss Program” to its
employees. The offering of the retrenchment program was coupled with an unsolicited
advise from SMC that it would be in the best interest of the affected employees to avail
of the said program since, by doing so, they would be able to obtain their retrenchment
benefits and privileges with ease. SMC admonished its employees that their failure to
avail of the retrenchment program might lead to difficulty in following-up and obtaining
their separation pay from SMCʼs main office in Manila. After their inclusion in the
retrenchment program, respondents were given their termination letters and separation
pay. In return, respondents executed “receipt and release” documents in favor of SMC.
Sometime in May of 1986, respondents got hold of an SMC publication allegedly
revealing that SMC was never in financial distress during the time when they were being
retrenched but was, in fact, enjoying a growth in sales. Respondents filed a complaint
before the NLRC for the declaration of nullity of the retrenchment program. In their
complaint, respondents alleged that they were former regular employees of SMC who
were deceived into severing their employment due to SMCʼs concocted financial
distress story and fraudulent retrenchment program. Those who were retrenched in
1983, at the very latest, had only until 1987 to institute a complaint against SMC. The
records will show that all the above captioned cases were filed in 1988. Their cases
were dismissed, not because of lack of jurisdiction, but because their cause of action
already prescribed, the cases having been filed after the three-year prescriptive period.
the contract of termination which plaintiffs were allegedly induced to sign is not void
from the beginning. At most, such contract is voidable, plaintiffsʼ consent thereto being
allegedly vitiated by fraud and deceit. Defendant corporation inculcated into the minds
of defendants the worry of non-recovery of their benefits in the event defendant
corporation closes down, induced plaintiffs to accept the “offer of retrenchment.”
Thereupon, they were paid their so-called “separation pay.” defendant corporation never
suffered any business reverses or losses in its operation.”

When the consent of one of the contracting parties is vitiated by fraud or deceit,
the resulting contract is only voidable or annulable, not void or inexistent. A scrutiny of

Issue: Whether or not the contract of termination of services entered into by plaintiffs with defendants is void from the beginning due to inexistent cause of action under Article 1409 of the Civil Code. and (4) the presence or absence of the power of control. ❖ As a rule. the fraudulent representations of SMC only affected the consent of respondents in entering into the said contract. the last one is the most important. 2. affect the cause of their “contract of termination. voidable. Filipinas Broadcasting vs NLRC ❖ Employer-Employee Relationship. places the case within the jurisdiction of the civil courts. . it is the regular courts that have jurisdiction. (2) the payment of wages. merely. must have a reasonable causal connection with any of the claims provided for in that article.—The following are generally considered in the determination of the existence of an employer-employee relationship: (1) the manner of selection and engagement. the Decision of the Court of Appeals dated 16 May 1996 and its Resolution dated 14 November 1996 are hereby REVERSED and SET ASIDE and the Resolution dated 21 June 1994 of the Regional Trial Court of Cebu. The fact that SMC was never in financial distress does not. Jurisprudence has evolved the rule that claims for damages under paragraph 4 of Article 217. premises considered. Branch 19. if there is a reasonable causal connection between the claim asserted and the employer- employee relations. WB the allegations of the present complaint reveals that plaintiffsʼ cause of action is not actually based on an employer. Only if there is such a connection with the other claims can the claim for the damages be considered as arising from employer-employee relations. then the case is within the jurisdiction of our labor courts. Ruling: Jurisprudence has developed the “reasonable causal connection rule. If the consent of a contracting party is vitiated by fraud.employee relationship between the plaintiffs and the defendants. to be cognizable by the Labor Arbiter.” Rather.” Under this rule. factual findings of the NLRC are binding on this Court. However. In the absence of such nexus. in any way. this Court may review questions of fact. Elements to determine the existence of an employer-employee relationship. Illegally dismissed employee has only a single cause of action although the act of dismissal may be a violation not only the Labor Code but also of the Civil Code. when the findings of the NLRC and the labor arbiter are contradictory. ❖ There could be no employer-employee relationship where the element of control is absent. the contract is not void but. WHEREFORE. of these four. (3) the presence or absence of the power of dismissal. REINSTATED. in CEB15310.

had not been an employee of the respondent DZRC Radio Station before February 16. Mr. 1992. Labor Arbiter Emeterio Ranola dismissed the complaint for lack of merit. Mapa resigned as a radio reporter in order to run for an elective office in the May 1992 elections and was paid all his salaries and benefits for the period of his employment commencing from January 16.” Mapa sought employment from DZRC as a radio reporter. the said complainant took a leave of absence. Issue: Whether or not there is an employee-employer relationship? Whether or not Private Respondent Was Not an Employee During the Period in Controversy? Ruling: Facts alleged by the private respondent and relied upon by the public respondent do not prove an employer-employee relationship. but only from his own advertising sponsors. Mapa Was Not Subject to Control of Petitioner. 1992. The complainant (herein private respondent) began to work for the respondent as a radio reporter starting March 11. Larry Brocales granted the request of Mapa to be accommodated only as a volunteer reporter of DZRC on a part-time basis. Again the complainant took a leave of absence because of his desperation over the failure of respondent to make good its promise of payment of salaries. private respondent “volunteered” his services. petitioner did not exercise the power to dismiss private respondent during the period in question. He was reinstated on January 16. WB Facts: Complainant Simeon M. 1992. 1992 up to February 27. 1992 when he decided to run for an elective office in the town of Daraga. 1992. 1994. Mapa. Respondent did not pay the complainant for all the services rendered by the latter from March 11. 12 Hence. private respondent willingly acted as a volunteer reporter. 1990. 1992 until February 27. Nevertheless. Petitioner did not act on his application for employment as a radio reporter because private respondent admittedly failed to present a clearance from his former employer. There was no employer-employee relations that existed between the complainant and the respondent since March 11. Taking pity on Mapa and pending the issuance of the clearance from PBN-DZGB Legaspi. The NLRC subsequently denied petitionerʼs motion for reconsideration 11 on November 9. 1990. Jr. 1990 up to January 16. 1992. 1992. this petition. Unfortunately. complainantʼs previous employer. On May 14. finding that no employer- employee relationship existed between Mapa and DZRC during the period March 11. 1990 until February 16. 1992.. 1990 to February 16. that complainantʼs employment with respondent is being blocked by Ms. Brenda Bayona of DZGB. Mapa advertised his sponsors and pocketed the payment of these sponsors for his advertising services. upon being informed by then respondentʼs Station Manager. He was but a volunteer reporter when accommodated to air his report on the respondent radio station as his application for employment with the respondent as field reporter had not been accepted yet or approved before February. . fully cognizant that he was not an employee and that he would not receive any compensation directly from the petitioner. Albay. Plaridel Brocales. Mr. the respondent paid salary to the complainant only for the period from January 16. 1992 and resigned on February 27.

No one at the DZRC had the power to regulate or control private respondentʼs activities or inputs. 1993 dismissing the case for lack of merit is hereby REINSTATED. Castor Reyes and Alfredo Velmonte) were readmitted upon showing to the satisfaction of respondents that they did not commit unlawful acts during the strike. Thereafter. the petition is hereby GRANTED and the assailed Decision and Resolution are hereby SET ASIDE. 1958". 1958. Uncontroverted is the statement that the private respondent was a regular employee from January 16. 1992. July and August. 1958. for which period he received all employee benefits. with only 34 strikers not re-admitted. is not covered by private respondentʼs complaint. 3. "On July 29. it must be stressed again. But such period. twenty seven (27) of the employees mentioned in paragraph 6 of the complaint and three (3) employees who were not included as complainants in this case (Francisco Baltazar. Clearly. Unlike the regular reporters. "the striking employees decided to call off their strike and to report back to work on June 2. WB The most crucial test—the control test—demonstrates all too clearly the absence of an employer-employee relationship. without however stating the specific acts allegedly committed. 1958. we find amply supported by the records. private respondent was not an employee during the period in question. It appears that. The Order of the Labor Arbiter dated October 13. When practically all the strikers had secured clearances from the fiscal's office. ito lang nakita ko http://www. "It is not denied that when the strikers reported for work on June 2. the CIR prosecutor filed a complaint for unfair labor practice against the companies". Said the CIR: Upon the termination of the investigations conducted by the respondents on those included in Exhibit '15'. Insular Life Assurance Co. he was not subject to any supervision by petitioner or its officials. in respect of back wages from June 2.html) "On May 20. WHEREFORE. No costs. naming in paragraph 6 thereof the 63 strikers not readmitted on June 2. 63 members of the Union were refused readmission because they had pending criminal charges". the Companies readmitted only some but adamantly refused re-admission to 34 officials and members of the Unions who were most active in the strike. vs Secretary of Labor and Employment Facts: (di ko mahanap sa gr_49267_1986. In sum. 29 strikers had been readmitted. which Public Respondent NLRC relies upon.lawphil. 1958. the evidence. Urbanes. by August. on the ground that they committed 'acts inimical to the interest of the respondent's. this court said. at various dates in the months of June. Jr. . 1958. does not justify the reversal of the labor arbiterʼs ruling which. 1958. in turn. 1992 to February 28. the (respondent) Unions went on strike and picketed the offices of the Insular Life Building at Plaza Moraga".

1978. confirmed by respondent National Labor Relations Commission in a Resolution dated August 1. the Writ of certiorari is granted." ACCORDINGLY. On November 14. Research and Legal Services. This is elementary. It was already conceded that of the 63 Union members not readmitted on June 2. ❖ An illegally dismissed employee is entitled to back wages from the time he was dismissed to the time of his actual reinstatement. 1958 are entitled to backwages despite their reinstatement in June. 1958. Even if a Service Contractor could very well be an independent contractor and that a particular employee appeared in its payroll. ❖ Independent Contractors. 1958. Hence. 1958. July and August. 1978. a Labor Arbiter. 1977. 1958. otherwise that would be double pay. to dismissed members of the Union who had admittedly been reinstated long before the date of the judgment. The Order of the Labor Arbiter dated May 23. it will not be considered as the employer where its principal had control and supervision over the employeeʼs work—the principal should be considered as the employer. Alberto. and payment of three years back wages. . No costs. July and August. This Court could not have intended to order the reinstatement of." In proceedings for the implementation of the judgment of this Court. 1977. Petitioner companies had only "adamantly refused readmission to 34". The Union submission that all strikers refused readmission on June 2. As commented for the public respondent by Ruben M. but only during June. 1958. 1958. the NLRC Chief. are hereby REVERSED and SET ASIDE. 4. upheld the claim of respondent Unions that the 29 strikers who were not readmitted on June 2. 1971 "ordering the respondents to reinstate the dismissedmembers of the petitioning Union" could only refer to the 34 strikers refuse readmission. and the Resolution of the NLRC dated August 1. in an Order dated May 23. excluding the 29 who had already been readmitted during the mentioned period of June. should also be entitled to the three years back pay together with the 34 strikers who were never readmitted. 1978. July and August. "The fact of payment of wages after reinstatement naturally precludes the assessment of backwages for the same period. WB 1958. would be tantamount to unjust enrichment at the expense of the employers. Trader’s Royal Bank vs NLRC ❖ The fact that an employeeʼs allegations were never controverted at any stage of the proceedings affirms that such averments were true. July and August. the judgment of January 30. 29 were subsequently readmitted during June. these certiorari proceedings were instituted by petitioner companies questioning the propriety of NLRC's interpretation of this Court's judgment in L-25291. that the "Court considers the fixing and limitation of the backwages award to their total equivalent of three years without qualification and deduction as applicable to and fully justified in the case at bar.

Españolaʼs dismissal was the result of a valid termination of its service agreement with ROYAL. Alberto G. After being dismissed ROYAL declined to give him any further assignment since his job was allegedly coterminous with its contract with TRB. An illegally dismissed employee is entitled to back wages from the time he was dismissed to the time of his actual reinstatement. it was the Labor Arbiter who came up with the erroneous conclusion. However. 29 dated 26 June 1974 which was duly issued by the Administrative Officer of AGRO. (AGRO) assigned Rogelio Española to work as a janitor at the Iloilo Branch of petitioner Traders Royal Bank (TRB). This assignment was covered by Mission Order No. The fact that Españolaʼs allegations were never controverted at any stage of the proceedings affirms that such averments were true. the NLRCʼs ruling with regard to the salary differentials and 13th month pay differentials must be sustained. He disregarded the uncontroverted allegations of Española and hastily concluded that since ROYAL was an independent contractor. Inc. we believe it was TRB. TRB asserts that aside from the agreement itself which reveals that it was ROYAL which provided the janitorsʼ salary. Thus. Royal Protective and Janitorial Services. beginning 23 March 1988. Espinosa. National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter and ruled that Española was not an employee of ROYAL but of TRB. (ROYAL). On the contrary. Labor Arbiter ruled in favor of TRB holding that Española had no cause of action against it as there was no employer- employee relationship between them. On 15 July 1988 TRB and ROYAL executed a new service agreement whereby ROYAL would continue supplying janitorial services TRB for one year. But if he was really TRBʼs employee then he would be entitled to reinstatement and full back wages as he was illegally dismissed. Since Española was illegally dismissed he is entitled to reinstatement with full back wages. it was Españolaʼs direct employer. . Who was Españolaʼs real employer? If Española was ROYALʼs employee then he would have no recourse against TRB since his dismissal was caused by the legitimate termination of a service contract. WB Facts: Agro-Commercial Security Services Agency. and that he would perform the same functions. Inc. and that the janitors were its own employees. Who then had control over Españolaʼs conduct? Was it ROYAL or TRB? Between the two. The NLRC erred in ruling that he was only entitled to back wages from 16 March 1994 to 30 September 1996. ROYAL sent a notice to private respondent Española informing him that due to TRBʼs decision to end their contract his services were no longer needed. The contract also stated that if there was no notice to terminate at the end of the one (1) year period it would remain in force on a monthly basis. Issue: Whether or not NLRC abused its discretion? Whether or not there is an employee-employer relationsship? Ruling: The NLRC therefore did not abuse its discretion in ruling that Española was not the employee of ROYAL. Sometime in 1982 Española was informed that he would be absorbed by a new agency.

5. appointing the latter to be an account executive of the firm. viz: “You are not an employee of the Metromedia Times Corporation nor does the company have any obligations towards anyone you may employ. for P500. Petitioner filed a case before the labor arbiter.000.00 as long as he met the P30.698. thirty (30) days prior to effectivity of termination. asking that his dismissal be declared unlawful and that his reinstatement.075.000. Petitioner also prayed that respondent company officials be held accountable for acts of unfair labor practice. Paguio.00 exemplary damages. be ordered.43 is AFFIRMED. Apart from commissions. nor any responsibility for your operating expenses or for any liability you may incur.00-monthly quota. respondent Metromedia Times Corporation asserted that it did not enter into any agreement with petitioner outside of the contract of services under Articles 1642 and 1644 of the Civil Code of the Philippines. but with the modification that petitioner should pay private respondent full back wages from 16 March 1994 up to his actual reinstatement. the petition is DISMISSED. Issue: WHETHER OR NOT PETITIONER'S CONTRACT WITH PRIVATE RESPONDENTS COMPANY IS FOR A FIXED PERIOD? WHETHER OR NOT PETITIONER'S DISMISSAL IS LEGAL? WHETHER OR NOT PETITIONER IS ENTITLED TO BACKWAGES AND MORAL DAMAGES? . WB WHEREFORE.” In their defense.00 moral damages and for P200. Basically. Costs against petitioner. the contentious points raised by the parties had something to do with the following stipulations of the agreement. compensation consisting of a 15% commission on direct advertisements less withholding tax and a 10% commission on agency advertisements based on gross revenues less agency commission and the corresponding withholding tax. The assailed Decision of public respondent National Labor Relations Commission reversing that of the Labor Arbiter and ordering petitioner Traders Royal Bank to reinstate private respondent Rogelio Española and to pay him salary differentials of P15.00. with entitlement to backwages without loss of seniority rights. 13th month pay differentials of P3. Paguio vs NLRC Facts: Respondent Metromedia Times Corporation entered. for the fifth time.45 and attorneyʼs fees of P10.143. petitioner was also entitled to a monthly allowance of P2.000.000. into an agreement with petitioner Efren P. Either party may terminate this agreement at any time by giving written notice to the other.

WHEREFORE. An indicum of regular employment. the instant petition is GRANTED. later 6Bʼs Trucking Corporation in 1985. Elements to determine the existence of an employment relationship. 6. 527773 and that of the National Labor Relations Commission are hereby SET ASIDE and that of the Labor Arbiter is REINSTATED except with respect to the P20. SP No. In 1965. Sahot was already 59 years old. Facts: Private respondent Jaime Sahot started working as a truck helper for petitionersʼ family-owned trucking business named Vicente Sy Trucking. Throughout all these changes in names and for 36 years. Gomez which award is deleted. 1994. He was facing dismissal if he refused to work. The fact remained he could no longer work as his left thigh hurt abominably. jobless and penniless. ❖ The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with. He inquired about his medical and retirement benefits with the Social Security System (SSS) on April 25. but discovered that his premium payments had not been remitted by his employer. Sy vs Court of Appeals ❖ Employer-employee Relationship. They contend that private respondent . was the reservation by respondent Metromedia Times Corporation not only of the right to control the results to be achieved but likewise the manner and the means used in reaching that end. and thereafter known as SBT Trucking Corporation since 1994. But he could not retire on pension because petitioners never paid his correct SSS premiums. Petitioners ended his dilemma.00 moral damages adjudged against respondent Liberato I.000. renamed T. ❖ If doubt exists between the evidence presented by the employer and the employee. rightly taken into account by the labor arbiter. In April 1994. WB Ruling: National Labor Relations Commission (NLRC) reversed the ruling of the labor arbiter and declared the contractual relationship between the parties as being for a fixed-term employment. effective June 30.A. 1994. He had been incurring absences as he was suffering from various ailments. Petitioner appealed the ruling of the NLRC before the Court of Appeals which upheld in toto the findings of the commission. private respondent continuously served the trucking business of petitioners. ❖ Article 277 (b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer. he became a truck driver of the same family business. They carried out their threat and dismissed him from work. the scales of justice must be tilted in favor of the latter. Paulino Trucking Service. G. Requisites for an employeeʼs dismissal to be valid. The decision of the Court of Appeals in C. without distinction whether the employer admits or does not admit the dismissal. Sahot found himself in a dilemma. He ended up sick.R.

petitioners owned and operated a trucking business since the 1950s and by their own allegations. (b) the payment of wages. The most important element is the employerʼs control of the employeeʼs conduct. the National Labor Relations Commission modified the judgment of the Labor Arbiter. ruled that there was no illegal dismissal in Sahot’s case. On appeal. Sahot stated that he was no longer fit to continue working. at the rate of P2. the employer shall not terminate the employee . WB was not illegally dismissed as a driver because he was in fact petitionersʼ industrial partner. working as a truck helper.000 to Sahot for having served the company as a regular employee since January 1994 only. Labor Arbiter Ariel Cadiente Santos. such intention cannot be construed to be an abandonment. not an industrial partner. Instead. While it was very obvious that complainant did not have any intention to report back to work due to his illness which incapacitated him to perform his job. (2) Whether or not there was valid dismissal. They contended that Sahot had all the time to extend his leave or at least inform petitioners of his health condition. and (b) the employee must be afforded due process. be considered an industrial partner. and instead he demanded separation pay. Accordingly. It declared that private respondent was an employee. employer shall not terminate his employment unless there is a certification by competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. since the start. the NLRC ordered petitioners to pay private respondent separation pay in the amount of P60. The elements to determine the existence of an employment relationship are: (a) the selection and engagement of the employee.00 per year for 29 years of service. Issue: (1) Whether or not an employer-employee relationship existed between petitioners and respondent Sahot. pursuant to Article 284 9 of the Labor Code. For an employeeʼs dismissal to be valid. and (d) the employerʼs power to control the employeeʼs conduct. How can we entertain in our mind that a twenty-three (23) year old man. Ruling: A computation of the age of complainant shows that he was only twenty-three (23) years when he started working with respondent as truck helper. and (3) Whether or not respondent Sahot is entitled to separation pay. Hence we rule that complainant was only an employee. he should be deemed to have voluntarily resigned from his work. the same should have been considered as one of those falling under the just causes of terminating an employment. Petitioners add that due to Sahotʼs refusal to work after the expiration of his authorized leave of absence. If the disease or ailment can be cured within the period. they determined private respondentʼs wages and rest day.320.00. The Labor Arbiter concluded by ordering petitioners to pay “financial assistance” of P15. (a) the dismissal must be for a valid cause. not a partner of respondents from the time complainant started working for respondent.080. (c) the power of dismissal. Private respondent Sahot did not abandon his job but his employment was terminated on account of his illness.

A contract will be upheld as long as there is proof of consent. Lopez vs Bodega City ❖ While it is a settled rule that only errors of law are generally reviewed by this Court in petitions for review on certiorari of Court of Appeals decisions. upon the acceptance by the offeree of the offer made by the offeror. whichever is greater. the petition is DENIED and the decision of the Court of Appeals dated February 29. as in this case. ❖ Settled is the rule that contracts are perfected by mere consent.00. Petitioners must pay private respondent Jaime Sahot his separation pay for 36 years of service at the rate of one-half monthly pay for every year of service. subject matter and cause ❖ ID cards where the words “EMPLOYEEʼS NAME” appear printed therein do not prove employer-employee relationship where said ID cards are issued for the purpose of enabling certain“contractors. which is the equivalent of a charge. there are well-recognized exceptions to this rule. the employer clearly did not comply with the medical certificate requirement before Sahotʼs dismissal was effected. The law is clear on the matter. in filing a complaint before the Labor Arbiter for illegal dismissal based on the premise that she was an employee. the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it. ❖ Cash Vouchers. the requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with. and (2) the notice informing the employee of his dismissal. Burden of Proof. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. when the factual findings of the National Labor Relations Commission as affirmed by the Court of Appeals contradict those of the Labor Arbiter. 7. An employee who is terminated because of disease is entitled to “separation pay equivalent to at least one month salary or to one-half month salary for every year of service. with interest of six per centum (6%) per annum from finality of this decision until fully paid. The test for determining on whom the burden of proof lies is found in the result of an inquiry as to which party would be successful if no evidence of such matters were given. ❖ Employer-Employee Relationship. ❖ Control Test. and those that . to prove the employee-employer relationship by substantial evidence.” such as singers and band performers. Logically. It is incumbent upon a party. respondent Jaime Sahot is entitled to separation pay.880. to enter the premises of an establishment. WB but shall ask the employee to take a leave. amounting to P74. A solitary petty cash voucher does not prove that a person had been receiving salary from another or that she had been the latterʼs employee for ten (10) years. The employer is required to furnish an employee with two written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought. Evidence. 2000 is AFFIRMED. to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. WHEREFORE.

The so-called “control test” is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer- employee relationship. the last one is the most important.. In their answer. create no employer- employee relationship unlike the second. petitioner was made to explain why the concessionaire agreement between her and respondents should not be terminated or suspended in view of an incident that happened on February 3. an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved. NLRC SET ASIDE AND VACATED LA Decision. Petitioner filed a complaint for illegal dismissal against respondents contending that she was dismissed from her employment without cause and due process. Facts: Respondent Bodega City (Bodega City) is a corporation duly registered and existing under and by virtue of the laws of the Republic of the Philippines. and the Court finds no cogent reason to depart from their findings. However. The Court applies the four-fold test expounded in Abante v. Lamadrid Bearing and Parts Corp. The NLRC and the CA found that petitioner failed to discharge this burden. WB control or fix the methodology and bind or restrict the party hired to the use of such means—the first. Torres-Yap (Yap) is its owner/ manager. but also the manner and means to be used in reaching that end. which address both the result and the means used to achieve it. an employer-employee relationship must first be established. 1995.16 to wit: To ascertain the existence of an employer-employee relationship. Labor Arbiter rendered judgment finding that petitioner was an employee of respondents and that the latter illegally dismissed her. while respondent Andres C. the onus probandi rests on the employer to prove that its dismissal of an employee was for a valid cause. before a case for illegal dismissal can prosper. (3) the presence or absence of the power of dismissal. In a letter signed by Yap dated February 10. namely: (1) the manner of selection and engagement. jurisprudence has invariably applied the four-fold test. (2) the payment of wages. which aim only to promote the result. that the latter’s services rendered within the premises of Bodega City was by virtue of a concessionaire agreement she entered into with respondents. 1995. Petitioner was the “lady keeper” of Bodega City tasked with manning its ladies’ comfort room. Yap informed petitioner that because of the incident that happened respondents had decided to terminate the concessionaire agreement between them. wherein petitioner was seen to have acted in a hostile manner against a lady customer of Bodega City who informed the management that she saw petitioner sleeping while on duty. respondents contended that no employer-employee relationship ever existed between them and petitioner. Under the control test. ISSUE: Whether or not petitioner is an employee of respondents? RULING: In an illegal dismissal case. Of these four. . In filing a complaint before the Labor Arbiter for illegal dismissal based on the premise that she was an employee of respondent. and (4) the presence or absence of the power of control. it is incumbent upon petitioner to prove the employee-employer relationship by substantial evidence.

this was imposed upon petitioner as part of the terms and conditions in the concessionaire agreement embodied in a 1992 letter of Yap addressed to petitioner.Petitioner is likewise estopped from denying the existence of the subject concessionaire agreement. WB To prove the element of payment of wages. the concessionaire agreement merely stated that petitioner shall maintain the cleanliness of the ladies’ comfort room and observe courtesy guidelines that would help her obtain the results they wanted to achieve. She should not. petitioner was not dismissed by respondents. It has been established that there has been no employer-employee relationship between respondents and petitioner. petitioner’s contention that she was an employee of respondents because she was subject to their control does not hold water. or she could have presented witnesses to prove her contention that she was an employee of respondents. The CA did not err when it held that a solitary petty cash voucher did not prove that petitioner had been receiving salary from respondents or that she had been respondents’ employee for 10 years. It is true that petitioner was required to follow rules and regulations prescribing appropriate conduct while within the premises of Bodega City. Petitioner failed to do so. Thus. Their contractual relationship was governed by the concessionaire agreement embodied in the 1992 letter. or certificates of withholding tax on compensation income. . There is nothing in the agreement which specifies the methods by which petitioner should achieve these results. In fine. she contends that she could not have entered into the said agreement with respondents because she did not sign the document evidencing the same. going back to the element of control. the CA did not err in dismissing the petition for certiorari filed before it by petitioner. The Court agrees with respondents that petitioner could have easily shown other pieces of evidence such as a contract of employment. be allowed to later disown the same through her allegation that she was an employee of the respondents when the said agreement was terminated by reason of her violation of the terms and conditions thereof. Petitioner does not dispute the existence of the letter. the Court finds that the elements of selection and engagement as well as the power of dismissal are not present in the instant case. which was in accordance with the provisions of the agreement in case of violation of its terms and conditions. petitioner presented a petty cash voucher showing that she received an allowance for five (5) days.37 their contractual relationship was terminated by reason of respondents’ termination of the subject concessionaire agreement. neither does she deny that respondents offered her the subject concessionaire agreement. Indeed. Hence. Anent the element of control. However. after enjoying the benefits of the concessionaire agreement with respondents. Petitioner failed to cite a single instance to prove that she was subject to the control of respondents insofar as the manner in which she should perform her job as a “lady keeper” was concerned. as shown by the letter of Yap to her dated February 15. if petitioner was really an employee of respondents for that length of time. SSS or Medicare forms. However. she should have been able to present salary vouchers or pay slips and not just a single petty cash voucher. Instead. 1995. Lastly.

and then as unit. ❖ Our ruling in the present case is specific to the insurance industry where the law permits an insurance company to exercise control over its agents within the limits prescribed by law and to engage independent agents for several transactions and within an unlimited period of time without the relationship amounting to employment. Facts: (Sorry.—Control over the performance of the task of one providing service—both with respect to the means and manner. are actually enjoyed by the workers. on the four-fold test on . and not the Insurance Code or Civil Code as claimed by Manulife. the instant petition is DENIED. branch and eventually regional sales manager of Manulife's Sales Agency Organization was an employee of Manulife. as defined by the Insurance Code and by the law of agency under the Civil Code. ❖ The fact that the work of the alleged independent contractor is usually necessary or desirable in the usual business or trade of the employer would establish a management structure that would mean that Tongko was Manulifeʼs employee. In resolving the issue of whether an employer-employee tie obtains. ❖ The four-fold test must be used to determine whether Tongko was an employee of Manulife or not. as guaranteed by the constitution. labor laws and jurisprudence shall apply. The assailed Decision and Resolution of the Court of Appeals are AFFIRMED. 8. attention was focused. WB WHEREFORE. Tongko vs Manufacturers Life Insurance Co. When there is doubt as to the law to be applied in a case with an allegation of an employer-employee relationship. as jurisprudential trend dictates.
 Ruling: The petition is meritorious. and the results of the service—is the primary element in determining whether an employment relationship exists. Phils. pursuant to a Career Agents Agreement (Agreement). first as an agent. di ko na kaya basahin 100+ pages ito. ❖ Tongko cannot be considered as an independent contractor of Manulife. Costs against petitioner. Manulifeʼs control fell short of this norm and carried only the characteristic of the relationship between an insurance company and its agents. and the results of the service—is the primary element in determining whether an employment relationship exists. ❖ Control over the performance of the task of one providing service—both with respect to the means and manner. Dasal nalang tayo na hindi itanong to haha) ISSUE: Whether or not Tongko during all the time he was directly or indirectly connected with the company. Requirements for a worker to be considered an independent contractor. ❖ The Court has the responsibility to ensure that the rights of labor.

The functions of the then district managers are similar to the functions of Tongko in the present case. whether such relationship exists. he maintains that. Thus. it appears that Manulife had control over the work of Tongko after his appointment as manager of the company's insurance sales force. While there was perhaps no written management contract whence Tongko's rights. 9. WB employment developed and invariably invoked by labor officials and this Court as a guiding. . if not governing norm. and
 (4) the control test. NLRC. who has the power to dismiss the employee. The control test meaning whether or not 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 the means and methods employed in reaching that end constitutes the most important index of the existence of an employer-employee relationship. Realuyo ❖ Wages. it was held that the employer company practically dictated the manner by which jobs were to be carried out.
 (2) the payment of wages. who pays the employeeʼs wages. the fact that the Agents Agreement was subsisting even after Tongko's appointment as manager does not militate against a conclusion that Tongko was Manulife's employee during his stint as a manager. as Justice Velasco cites.
 From the evidence on record. similar to the respondent in the Grepa case who was an insurance agent but also had a management contract. Ernesto Ruiz and Rodrigo Ruiz (the Grepalife case). duties and functions as unit/branch manager may easily be fleshed out as a prelude to determining if an employer-employee relationship with Manulife did exist. indubitably implying the existence of an employer-employee relationship between them.
 In the case of Great Pacific Life Assurance Corporation v. if the district managers in the Grepalife case were held by the court to be employees then Tongko who is in the same situation. and who exercises control of the methods and results by which the work of the employee is accomplished. other evidence was adduced to show such duties and responsibilities.
 The petition is partially granted such that Tongko may only be considered an employee of Manulife from the time of his appointment as manager. based on the facts and circumstances involved in a given situation. Legend Hotel vs.
 (3) the power of dismissal. These four elements are: (1) the selection and engagement of the employee. to determine. should also be deemed an employee of Manulife. The factors that determine the issue include who has the power to select the employee. according to Justice Velasco.

which pertinently provides that the CA “shall have the power to try cases and conduct hearings. Facts: Respondent averred that he had worked as a pianist at the Legend Hotel’s Tanglaw Restaurant from September 1992 with an initial rate of P400. 1999. Retrenchment is one of the authorized causes for the dismissal of employees recognized by labor code. WB ❖ Employer-Employee Relationship. ❖ Hours of Work.” .00/night that was given to him after each night’s performance. Ruling: YES. 1999. Whether or not petition for certiorari to the CA is proper. Issues: 1. Whether or not there is ER-EE relationship. Whether or not retrenchment as a ground for respondent’s dismissal is valid. Article 83 of the Labor Code only set a maximum of number of hours as “normal hours of work” but did not prohibit work of less than eight hours. receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction. There is no longer any doubt that a petition for certiorari brought to assail the decision of the NLRC may raise factual issues. 129. He added that the Legend Hotel’s restaurant manager had required him to conform with the venue’s motif. Talent Fees. which had been fixed from 7:00 pm to 10:00 pm for three to six times/week. and that the loss of his employment made him bring his complaint. the management had notified him that as a cost-cutting measure his services as a pianist would no longer be required effective July 30.
 2. and the CA may then review the decision of the NLRC and pass upon such factual issues in the process. a privilege granted to other employees. including the power to grant and conduct new trials or further proceedings. insisting that Legend Hotel had been lucratively operating as of the filing of his complaint. was still considered as included in the term wage in the sense and context of the Labor Code. The power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer- employee relationship. regardless of how petitioner chose to designate the remuneration.00/ night.8 The power of the CA to review factual issues in the exercise of its original jurisdiction to issue writs of certiorari is based on Section 9 of Batas Pambansa Blg.
 3. he could not choose the time of performance. that he had been subjected to the rules on employees’ representation checks and chits. Any stipulation in writing can be ignored when the employer utilizes the stipulation to deprive the employee of his security of tenure. ❖ Control Test. that on July 9. Retrenchment. albeit denominated as talent fees. that he disputed the excuse. Respondentʼs remuneration. and that during his employment. ❖ Wages. ❖ Termination of Employment. that his rate had increased to P750.

three to six times a week. however. 
 That respondent worked for less than eight hours/day was of no consequence and did not detract from the CA’s finding on the existence of the employer-employee relationship. He could not choose the time of his performance. c. and is premised on whether the person for whom the services are performed reserves the right to control both the end achieved and the manner and means used to achieve that end. . albeit denominated as talent fees. which petitioners had fixed from 7:00 pm to 10:00 pm. as determined by the Secretary of Labor. piece. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. it is worth remembering that the employer need not actually supervise the performance of duties by the employee. In providing that the “normal hours of work of any employee shall not exceed eight (8) hours a day. capable of being expressed in terms of money. or commission basis. This is true. and d. notwithstanding petitioner’s insistence that respondent had only offered his services to provide live music at petitioner’s Tanglaw Restaurant. task. A review of the records shows. or to wear barong Tagalog to conform to the Filipiniana motif. petitioner’s control of both the end achieved and the manner and means used to achieve that end was demonstrated by the following. The restaurant’s manager required him at certain times to perform only Tagalog songs or music. The power of the employer to control the work of the employee is considered the most significant determinant of the existence of an employer-employee relationship. a privilege granted to other employees. 1998 by Christine Velazco. The power of selection was firmly evidenced by. Anent this. or other method of calculating the same. Respondent’s remuneration. Relevantly. that respondent performed his work as a pianist under petitioner’s supervision and control. regardless of how petitioner chose to designate the remuneration. was still considered as included in the term wage in the sense and context of the Labor Code. and despite petitioner’s position that what had really transpired was a negotiation of his rate and time of availability. Article 97(f) of the Labor Code clearly states: xxx wage paid to any employee shall mean the remuneration or earnings. whether fixed or ascertained on a time. petitioner’s restaurant manager.” Article 83 of the Labor Code only set a maximum of number of hours as “normal hours of work” but did not prohibit work of less than eight hours. for the increase of his remuneration. 1992 with respondent. for it sufficed that the employer has the right to wield that power. Petitioner actually wielded the power of selection at the time it entered into the service contract dated September 1. and includes the fair and reasonable value. He was subjected to the rules on employees’ representation check and chits. b. He could not choose the place of his performance. among others. or for services rendered or to be rendered. the express written recommendation dated January 12. or other facilities customarily furnished by the employer to the employee. Specifically. to wit: a. lodging. This is the so-called control test. of board. however designated. WB YES.

WB NO. It only claimed that respondent’s termination was due to its “present business/financial condition. we hold that there was no valid cause for the retrenchment of respondent. Here.” This bare statement fell short of the norm to show a valid retrenchment. It is a management prerogative resorted to by employers to avoid or to minimize business losses. namely: (a) The expected losses should be substantial and not merely de minimis in extent. and the expected imminent losses sought to be forestalled must be proved by sufficient and convincing evidence. the burden of proving that the dismissal was for a valid or authorized cause rests upon the employer. and (d) The alleged losses. it ought to be pointed out that a less exacting standard of proof would render too easy the abuse of retrenchment as a ground for termination of services of employees. if already incurred. (b) The substantial losses apprehended must be reasonably imminent. The Court has laid down the following standards that an employer should meet to justify retrenchment and to foil abuse. Anent the last standard of sufficient and convincing evidence. . In termination cases. petitioner did not submit evidence of the losses to its business operations and the economic havoc it would thereby imminently sustain. On this matter. Hence. (c) The retrenchment must be reasonably necessary and likely to effectively prevent the expected losses. Retrenchment is one of the authorized causes for the dismissal of employees recognized by the Labor Code. Article 283 of the Labor Code.