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JUNE 19 fulfilled, then, it is possible that there can still be an ER-EE employee.

Power to control!
Let us begin with Employee’s Compensation. The beginning of The next question is: is our relationship Father ER-EE? Even if the 3
employee’s compensation is Picart vs. Smith (last clear chance? :o). are not there – I did not select you nor hire you, I do not pay wages – but,
I control. Pag-ingon nako let us pray, manindog mo  What I say you
There is a cart loaded with coal. It is on rails. One of the rails write down. Mag-ingon ko magtest ta ugma, magtest ta. So, I have day-
was broken or disjointed. So much so that when the cart goes over it, to-day control, not only as to the goal to pass but also the means and
it sinks, then, recovers. It has been 3 days like that. The employees methods. Therefore, does that make you (us, students) my employees and
reported that to the supervisor. Nothing is done. I (Father as our professor) as your employer?
Employee in question is pushing the cart. His companions warn The power of control test is the most important test but it is not the
him: Naay tigmahan (hehe .. sori .. wala ko kabalo sa term ). Ayaw only test. It is greatly material in the determination of the existence of a
paluyo dira. Wala siya nagpatuo, nagpaluyo siya. Natikwang ang cart. contract of an ER-EE but it is not the only test.
Nadat-ugan siya.
When you talk about coal carts, it’s supposed to be 1 ton. Look at LVN vs. PHIL. MUSICIANS GUILD.
The defense of the employer: negligence. Giingnan na siya ayaw The argument of LVN is this: You musicians, you think you are our
paluyo dira, tua nagdiretso! employees. That is why you want to make a union vis-à-vis us. We are not
Cause of action of the employee: the employer is negligent. He your employers. You are not our employees. We are engaged in the
did not repair that. That is gross negligence because he ignored 3 business of making movies. You are engaged in the making of music.
notices. Kana lang daan, dili na ta ER-EE. Sine mi, music mo. How can we be your
Can the employee recover? employer? Precisely because I do not know about music, I hire a musical
Negligence is beside the point because our employee’s director. The musical director is my employee. I ask him, pangitag music
compensation now is a no-fault system. that will be fitting for this film. I give you lump sum amount. We contract.
All you have to do is: Movie company, musical director. Lump sum amount, say P300,000.
1. you are employed Pangita ug music ini. Ang title ani kay “Caregiver”. Basaha nang script,
2. it occurred at the workplace pangita ug music ana. Siya na ang mangita.
3. it occurred during working hours The movie company does not know the business of music. It cannot
That is enough. That is work-related injury, sickness or death. know who are the good musicians. Who are the drummers that are worthy
of their instruments? Who are the good wind instruments players? Mayo
How many of you have gone through the ER-EE relationship kaya ni siya mu-tayhop ug trumpeta kay dako ug lawas? They do not
cases, this list of cases? know.
So, how come they are employees?
Supposed you are asked in the bar question: Is the rendition of Supreme Court says you might have begun like that. But then, you
service or labor essential in an ER-EE relationship? changed. How? You hired a musical director. But you told the musical
If you say yes, where is it in the 4 requisites for the existence director, anhi magpractice sa studio. Klaruhon ta na! Arun makuha nimo
of ER-EE relationship? Does it say one, renders labor to another? ang imong tao, naay LVN bus. Gamita na. Unya, call slips. Tagai na ug
NO. The four requisites, as enunciated in Al Lagadan case (Viana vs. call slips imong musicians. Nganong dili na man lang i-call, butangan pa
May 31, 1956), and repeated in LVN vs. PHIL. MUSICIANS GUILD man ug slips? Kay, record na siya sa opisina sa pagkaon. Pila ka packed
(January 28, 1961), are: lunch ang gamiton. Mao ra tong tagaan ug packed lunch. Asa gikan ang
1. selection and hiring packed lunch? Sa musical director? Sa LVN! Ang nagpatawag nila kay
2. payment of wages LVN.
3. power to fire That indicates control. All those instances indicate control.
4. power to control not only the goals to be achieved but And finally, with the so-called final take, when they decide the
also the means and methods used particular rendition of the music that is going to be attached to the movie,
whether or not the musicians are called upon to be part of the visual take of
Haa man ang service dira? the movie, because they are part of the scene of the movie, they are
Now, because you have read those cases of ER-EE relationship, playing there, or they have no part. They just provide the music. In the
why is it that rendition of services is not one of the requisites of ER-EE final take, the musical director fades out from the scene. And the one who
relationship? determines the final take is the movie director.
Simply because if the employee does not render service, he Tan-awa naghilak si Sharon, paspasan na ang violin 
would cease to be an employee. ER-EE relationship would cease. The Ang movie director na ang nagbuot ana. And it is measured by
contract of employment would cease. seconds. That is how movies are finally edited. Either the movie fits into
Mu-leave ka kay magbakasyon ka. Wala na, humana ang imong the music or the music fits into the movie.
pagka-employee. Nagkasakit ka, wala ka nitrabaho. Di na ka
employee kay wala ka naman nag-render ug service. (Talks about a scene in the film Butch Cassidy and the Sundance Kid,
But you still remain an employee, isn’t it? You go on leave and if starring Paul Newman, where the scene inspired the song Raindrops Keep
that is provided for in your individual contract or CBA, you continue to Fallin’ on My Head … aaaah! )
receive your regular salary.
Do you receive ECOLA kung kanang mu-absent ka, wala It is the musical director who gives the material. But finally, the one
nitrabaho or vacation leave? What is ECOLA? Dili na siya sakit  who chooses the precise version is the movie director because in the end,
Emergency Cost of Living Allowance, which is? Kamo lain inyong gina- he is the final creator of the film.
adtuan sa internet?  Adto mo sa National Wages and Productivity That is why the Supreme Court said, attention to detail is fulfillment of
Commission. All the Labor Standard wages in all the regions are there. the 4th requirement. Control, not just as to the goal or the end product, but
Diri sa Davao, non-agricultural, the highest classification for also as to the means and methods to produce that end product.
wages in our jurisdiction, P234 basic and ECOLA is P16. That is what makes LVN vs. PHIL. MUSICIANS GUILD a very
Unya, naay Wage Order No. 15 (?), another ECOLA P15. revolutionary ruling.
Effective June 16, basic is P250 plus ECOLA of P15. Before that Wage
Order No. 15, the ECOLA was P16, P234 ang basic, P250 tanan. If you will go through some of the quoted cases there, in the United
Karon, Wage Order No. 15, 2 na ang ECOLA. Naa nay gidugan na States, for a while, they side-tracked into the economic entity test. How
ECOLA P15. P15 plus P16, P31 na karon ang ECOLA. Karong much machinery per worker is invested? That is the test. The Supreme
September, the old ECOLA of Wage Order No. 15 will be integrated Court of the US found that is inadequate. It does not fit all kinds of cases.
into the basic. Mahimo na ang basic P 250, ang ECOLA P 15, so P Finally, they withdraw from that ruling. They went back to the power of
265. control test.
Can you receive ECOLA if wala ka nagtrabaho? YES. It always
goes with the basic. Everytime you are entitled to the basic, you are The other cases show you precisely how the test is met.
entitled to ECOLA.
The issue is now whether you are working or not working. The Location separation does not violate (?) the power of control
issue is are you receiving the basic. If you receive the basic, you are test. The employer may be separated from the employee physically but
entitled to ECOLA. the test is still met. That is shown in the case of STERLING PRODUCTS
vs. SOL (February 28, 1963).
If you are not working and one of the requisites for ER-EE Her job is to find out whether the company that contracted certain
relationship is actual rendition of service and you are no longer advertisements to be aired by certain radio stations at definite times are
rendering service, because you are lying in your banig, masakiton ka, complying with their obligations under the contract. The contract for
therefore, you took a sick leave, then, you are no longer an employee. advertisement stipulates that advertisements for Sterling Products should be
So, to go back, selection and hiring, payment of wages, power to aired at certain times, let us say, noon, evening and early morning and they
dismiss and power to control. Those are the 4 requisites. are paid per exposure.
LVN vs. PHIL. MUSICIANS GUILD brings out the particular Who will verify that? They hire somebody to be a radio monitor. Mao
insight that the first 3 requisites, selection and hiring, payment of na siya tig-paminaw. The radio monitor is not informed about the contract.
wages and power to dismiss, may not be fulfilled. But if the 4 th one is
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The radio monitor is just told to record the time you hear these The last question: whether or not the control test can be met even if
advertisements. control is intermittent. To pass the control test, must control be continuous
That job does not require the radio monitor to report at Sterling and uninterrupted?
office. She just stays at home and listens to the radio.
When she is finally fired for some other reasons, she claims RJL MARTINEZ FISHING vs. NLRC (January 31, 1984)
security of tenure. The company says no, you are not our employee. These are unskilled workers. Their job is to unload the fishing boats of
You are a casual employee, just hired for the advertisements. RJL Martinez. RJL Martinez Fishing has 50 deep sea fishing boats. At least
She says, I am your employee. You gave me an ID. The 1 or 2, sometimes more than 5, land (dock siguro .. ) during the day.
employer says that is not definitive. Is that one of the requisites of And these workers, wade up to their waste and carry the fish all the way to
ER-EE relationship? You have an ID? Maybe that ID was given to you dry land from the shore. RJL Martinez had to hire workers who will unload
so that you can go inside the premises to collect your salary. the fishing catch.
The issue is can the control test be met even if the employer is When these workers were asking for ECOLA, RJL Martinez decided to
far away from the employee on a regular, habitual basis? In everyday terminate them. They said, no, you cannot terminate us. We are your
of your work, you do not really need him to be close to you, to employees. RJL said: How you be our employees? You unload us but
supervise you and control the means and methods you are using to then, when there is another ship coming, you also go there and unload and
achieve the goal. you also receive salary or compensation from them. So, you are not under
The Supreme Court says yes, the control test in this instance is our control. How can you say to your employer controlling the means and
met. Why? Because of the number of forms Sol had to fill out. She methods when after you unload our ships, there are other ships.
fills it out. RJL Martinez says our engagement with you is per loading and
In other words, in effect, the form supervises the employee. unloading. After that, no more. You are casual, you are not regular. That
Pagmuingon siya, 10:45 Astring-o-sol ad. Aah! Namakak man ni siya is the argument of RJL Martinez.
kay wala man tay contrata na ana ba, na 10:45. 12 noon naa ta. To put it in other terms, RJL Martinez says: kung tinuod pa mi na
So, she is monitored by the forms. So, it is possible to supervise. employer, ang control namo ninyo continous. Load ka, unload ka. Wala
It is possible to control the means and methods used. naman kay loadan, puyo dira. Ayaw na balhin-balhin sa uban. Dira ka
lang. Paghulat dinha. Unya wa naman. Paghulat dinha kay ikaw controlled
Kining mga repair crews, let us say Davao Light and Power ka nako. That is what is RJL Martinez is saying.
Company, there are several crews. Naay short circuit sa Buhangin. The employees are saying that they taking it against us that we look
Larga mo. Are they supervised or are they not supervised? They can for more work when the work that you give us is not enough. You just
be supervised. They are monitored by radio. Their odometer is read count the hours that we have unloaded based on a rate, which is minimum
by the security guard before they leave the guard house. Pagbalik ana wage. That is what you pay us. That is why to fill up our hours, we go to
niya, record na sad. Mahibaw-an na pila ka kilometro na sila. Wala ba other fishing boats when they arrive. But the moment your fishing boats
sila niadto sa Times Beach unya nagkilaw  Mahibaw-an man na. arrive, because we are your employees, we leave the other fishing boats.
That is still location separation and yet, you can be monitored. We go and unload from your ships.
Then, RJL Martinez says, for the control test to be met, it must be
DY KEH BENG vs. INTERNATIONAL LABOR (May 25, continuous. There must be no gap. Otherwise, there is no control.
1979). We are talking here about a maker of kaings. In Cebuano, it The Supreme Court says no. Control can be proven even if it is
is called bukag. Big baskets. discontinuous.
Apparently, it is farmed out to workers. Some of them make it in
the premises of the employer, others bring the materials home and Notice the requirements of this test which commentator’s say is the
what they bring back are finished products. most important test of ER-EE relationship. The power to control not just
Can they form a union vis-à-vis Dy Keh Beng who owns the the goal or end to be achieved but also the means and methods used to
establishment? If they can, that means they are employees of Dy Keh achieve the goal.
Beng. If they cannot, they are not employees. They are independent Read the cases. You still have time to read these. It is not really yet
contractors making baskets and passing them on to Dy Keh Beng. bar review. Basic, fundamental na 
But they formed a union. So, they are asserting that they are
employees. When Dy Keh Beng dismissed them, they filed an unfair JUNE 26
labor practice complaint, meaning that they are employees and they
were dismissed because they were forming a union. I would like to bring to your attention this latest case of:
The issue is are they employees in the first place? PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO
Dy Keh Beng says my obligation as an employer I have to deny ANIMALS (PSPCA) vs. COA (Sept. 25, 2007)
the control test. And it is very easy for me to do that. I do not even Why is this case important? It is decided en banc and the ponente is
know these workers. How can I control them? They cannot present Justice Austria-Martinez.
any evidence that I control them. In fact, they just claim that they are There are several provisions in the Labor Code which says that
my employees but they have not given any evidence of my control. government employees are not included. They are not included in the
Wala sila nakapakita ug bundy clock, time card. Wala sila Labor Code.
nakapakita ug notice na na-late mo. There is no evidence. Therefore, There is no problem when it comes to employees of the National
I cannot be their employer because they have not proven control. Government, employees of the subdivisions like Davao City, employees of
In order to meet the control test, is it necessary that you actually instrumentalities like the AFP or PNP or the agencies like the BIR and
adduce evidence of exercise of control? Bureau of Customs. But the problem comes in when it is government-
The Supreme Court says no, no need. What is needed is to owned or controlled corporations.
prove reservation of that right. Ipakita nimo dinha that you have You are already familiar with the original charter that has been applied
the right to control, you can control but you did not control. by the Supreme Court in the Lumanta case.
Reservation of the right to control is what is now important than Namely, under Article IX-B, of the Constitution that defines the ambit
evidence of actual exercise of control. of government employees in government-owned or controlled corporations
How can that be proven? Because there are definite standards must have an original charter.
for the kaing. The size is pre-determined. The particular make, the If the corporation was directly created by law and its constitution and
materials, the width, that is given. And according to the Supreme by-laws is a law, then, it is government-owned and controlled corporation.
Court, it escapes common sense that Dy Keh Beng did not accept any Therefore, it is not covered by the Labor Code. That is the original
basket that is given. Kagamay sa basket, dili man na dawaton kay dili charter test, the charter test.
man na kaing. That is how you exercise control. Here comes the case of Philippine Society for the Prevention of Cruelty
That is important because in subcontracting, this comes up again. to Animals vs. COA (534 SCRA 112).
Many times, the workers of the subcontractor will say that we are PSPCA was created by Act 1285 on January 19, 1905. Tigulang na di
really the employees of the principal. Why? Because it is not our ai ning Prevention of Cruelty to Animals. The law creating it directly is Act
agency that supervises us. It is the client of our agency who 1285. When you say Act, it is not Commonwealth Act. It is not Republic
supervises us. Kinsa man nagscreen namo na mu-apply mi aning Act. It is not Presidential Act. It is an Act, which means US Congress pa,
special offer? Sila. Kinsa man nag-interview namo? Ang Procter and under the US government.
Gamble, dili ning Davao Manpower. Kinsa man nag-assign namo na Nganong karon lang ni hilabti sa COA? The case does not say so. But
kining Surf mao ni among ibaligya? Ang kliyente. Kinsa man nag- the case says that COA came there for a survey audit preparatory to their
supervise namo? Ang kliyente sa among amo. auditing already, in detail, the financial situation of PSPCA. Why? Because
So, the most important test is the power to control the means they got a lot of money from foreign sources.
and methods. Therefore, they are the employees. They just the When the COA reported to PSPCA to survey them, this society refused.
manpower agency as a conduit. Therefore, there is labor-only They said that “we are private.” But the COA said, how can you be private
contracting. You cancel out the agency kay wala man jud sila when you were created by Act 1285? And you are, by that Act, granted
nagsupervise. The only employer they have is the client. power to arrest all those violators of animal laws. You are empowered to
Remember, even if you cannot prove actual exercise, if you can impose fines.
prove reservation of the power to control, that is enough. But then PSPCA said that was withdrawn by a later law, CA 148
November 8, 1936. Now, they can no longer arrest and collect fines.
Before, they could. But after the law, no more. They are strictly private.
2
Then, the COA said how are you different are you from the Boy incorporated by virtue of Act No. 1285, enacted on January 19, 1905.
Scouts of the Philippines, which was created by law and was declared Settled is the rule that laws in general have no retroactive effect, unless the
by the Supreme Court as government? Boy Scouts of the Philippines is contrary is provided.
a government-owned and controlled corporation because it was also There are a few exceptions. Statutes can be given retroactive effect in
created by an act. In fact, the act specifies that it is the official youth the following cases: (1) when the law itself so expressly provides; (2) in
program of the government and the number one boy scout of the case of remedial statutes; (3) in case of curative statutes; (4) in case of
Philippines is the president of the Republic, regardless of whether it is laws interpreting others; and (5) in case of laws creating new rights. 1[18]
a male or a female. None of the exceptions is present in the instant case.
So, that was the main argument. In a legal regime where the charter test doctrine cannot be applied,
The question is: Is this a government-owned and controlled the mere fact that a corporation has been created by virtue of a special law
corporation, covered by Civil Service, COA, etc? does not necessarily qualify it as a public corporation.
This is where the Supreme Court in an en banc decision, There being neither a general law on the formation and organization of
unanimous, says that it is not. Supreme Court says that the original private corporations nor a restriction on the legislature to create private
charter test cannot be applied to Philippine Society for the Prevention corporations by direct legislation, the Philippine Commission at that moment
of Cruelty to Animals. in history was well within its powers in 1905 to constitute the petitioner as a
Why can it not be applied? private juridical entity.
According to the Supreme Court, the original charter test has its
beginnings in the 1935 Constitution and later. Since the underpinnings So, the Supreme Court said that this case is different from the case of:
of the charter test were introduced only by the 1935 Constitution and VETERANS FEDERATION OF THE PHIL vs. REYES
not earlier, it follows that the test cannot apply to the petitioner, (483 SCRA 526 – February 28, 2006)
Philippine Society for the Prevention of Cruelty to Animals, because it This is an en banc decision. This is by Chico-Nazario.
was incorporated by virtue of Act 1285 January 19, 1905. This time the Supreme Court declared Veterans Federation as
The Supreme Court said settled is the rule that laws in general government.
have no retroactive effect, unless the contrary is provided. And the reverse here is true, ha. Veterans Federation is an
Then, you have this other argument that there is really no aggrupation of different veterans clubs. And the veterans clubs are all
connection with government with the PSPCA. They never received funded by private funds. Amot ang membership fees of the veterans. After
funds. They were never commissioned by the government. They you are formed, you are federated with the Veterans Federation.
were never audited by COA. They raise their own funds. And they And the Veterans Federation is affiliated with the Department of
were never in practice nor deputized by the government to implement National Defense. In fact, it was placed under direct supervision of the
or enforce laws and rules against cruelty to animals. DND Secretary. It has functions, in time of war, to oversee the recruitment,
etc. It has to coordinate with the government.
PSPCA vs. COA (Sept. 25, 2007) And the Supreme Court said that the Veterans Federation is a
FACTS: PSPCA was incorporated by virtue of Act No. 1285, enacted governmental corporation. It is a government-owned and controlled
on January 19, 1905. At the time of the enactment of Act No. 1285, corporation. That is why it was granted tax exemption under RA 1178.
the original Corporation Law, Act No. 1459, was not yet in existence.
PSPCA was initially imbued under its charter with the power to VETERANS FEDERATION OF THE PHIL vs. REYES
apprehend violators of animal welfare laws. In addition, the petitioner (483 SCRA 526 – February 28, 2006)
was to share one-half (1/2) of the fines imposed and collected through FACTS: Veterans Federation of the Philippines (VFP) is a corporate body
its efforts for violations of the laws related thereto. Subsequently, organized under RA 2640, dated 18 June 1960, as amended, and duly
however, the power to make arrests as well as the privilege to retain a registered with the SEC.
portion of the fines collected for violation of animal-related laws were A DND Departnment Circular was issued and entitled as Further
recalled by virtue of C.A. No. 148. Implementing the Provisions of Sections 1 and 2 of RA 2640. The said rules
On Dec. 1, 2003, an audit team from COA visited the office of shall govern and apply to the management and operations of the of VFP.
PSPCA to conduct an audit survey. The petitioner demurred on the VFP received a letter informing it of the order to conduct Management
ground that it was a private entity not under the jurisdiction of COA. Audit of the VFP. VFP alleged that the challenged department circular could
Petitioner explained that although PSPCA was created by special not validly lay standards classifying the VFP, an essentially civilian
legislation, this necessarily came about because in January 1905 there organization, within the ambit of statutes only applying to government
was as yet neither a Corporation Law or any other general law under entities. Petitioner claims that it is not a public nor a governmental entity
which it may be organized and incorporated, nor a SEC which would but a private organization, and advances this claim to prove that the
have passed upon its organization and incorporation. issuance of DND Department Circular No. 04 is an invalid exercise of
Petitioner argues that it exercises no governmental functions, that respondent Secretary’s control and supervision.
nowhere in its charter is it indicated that it is a public corporation, that Petitioner vigorously argues that the VFP is a private non-government
if it were a government body, that there would have been no need for organization, pressing on the following contentions:
the State to grant it tax exemptions, that the employees of the 1. VFP does not possess the elements which would qualify it as a
petitioner are registered and covered by the SSS, that PSPCA does not public office, particularly the possession/delegation of a portion of
receive any form of financial assistance from the government, that sovereign power of government to be exercised for the benefit of the
C.A. No. 148 effectively deprived the petitioner of its powers to make public;
arrests and serve processes as these functions were placed in the 2. VFP funds are not public funds;
hands of the police force, that no government appointee or 3. VFP funds come from membership dues;
representative sits on the board of trustees of PSPCA, that its charter 4. The lease rentals raised from the use of government lands
fails to show that any act or decision of the petitioner is subject to the reserved for the VFP are private in character and do not belong to
approval of or control by any government agency, except to the extent the government;
that it is governed by the law on private corporations in general and 5. VFP retains its essential character as a private, civilian federation of
that the Committee on Animal Welfare, under the Animal Welfare Act veterans voluntarily formed by the veterans themselves to attain a unity
of 1998, includes members from both the private and the public of effort, purpose and objectives;
sectors. 6. The Administrative Code of 1987 does not provide that the VFP is an
The respondents contend that since the petitioner is a “body attached agency; and
politic” created by virtue of a special legislation and endowed with a 7. DBM declared that the VFP is a non-government organization and
governmental purpose, then, indubitably, the COA may audit the issued a certificate that the VFP has not been a direct recipient of any
financial activities of the latter. funds released by the DBM

ISSUE: Whether or not PSPCA qualifies as a government agency that ISSUE: Whether or not VFP is a private corporation
may be subject to audit by respondent COA
HELD: VFP is in fact a public corporation for the following reasons:
HELD: NO, PSPCA is not a government agency. The charter test 1. RA 2640 is entitled “An Act to Create a Public Corporation to be
cannot be applied. Known as the Veterans Federation of the Philippines, Defining its
Essentially, the “charter test” as it stands today provides: The Powers, and for Other Purposes”;
test to determine whether a corporation is government owned or 2. Any action or decision of the Federation or of the Supreme
controlled, or private in nature is simple. Is it created by its own Council shall be subject to the approval of the Secretary of
charter for the exercise of a public function, or by incorporation under Defense;
the general corporation law? Those with special charters are 3. VFP is required to submit annual reports of its proceedings for the
government corporations subject to its provisions , and its employees past year to the President of the Philippines or to the Secretary of
are under the jurisdiction of the Civil Service Commission, and are National Defense;
compulsory members of the Government Service Insurance System. 4. VFP was listed as among the government-owned and controlled
Since the underpinnings of the charter test had been corporations that will not be privatized; and
introduced by the 1935 Constitution and not earlier, it follows
that the test cannot apply to the petitioner, which was 1

3
5. In Ang Bagong Bayani – OFW Labor Party v. COMELEC , the SC The NLRC held the GSIS solely liable for payment of complainants'
held in a minute resolution that the “VFP is an adjunct of the money claims. CA reverted back to the ruling holding GSIS and LSWA
government”. jointly and severally liable for the payment of complainants' salary
The functions of VFP are executive functions designed to differentials.
implement RA 2640 but also the Constitutional mandate for the State GSIS avers that it cannot twice be held liable for complainants' salary
to provide immediate and adequate care, benefits and other forms of differentials since it fully paid complainants' salaries by incorporating in the
assistance to war veterans and veterans of military campaigns, their Security Service Contract the salary rate increases mandated by Wage
surviving spouses and orphans. Order Nos. 1 and 2; otherwise, it would be unjust enrichment on the part of
The fact that no budgetary appropriations have been released to complainants and/or LSWA at its expense. It submits that Articles 106 and
the VFP does not prove that it is a private corporation. If the DBM, 107 of the Labor Code were not contemplated by its framers to cover
however, is mistaken as to its conclusion regarding the nature of VFP’s principals or clients of service contractors who had already paid for the
incorporation, its previous assertions will not prevent future budgetary wages of the contractor or subcontractor.
appropriations to the VFP. The erroneous application of the law by
public officers does not bar a subsequent correct application of the ISSUE: Whether or not GSIS is solidarily liable for payment of
law. complainants-respondents’ salary differentials
Nevertheless, funds in the hands of the VFP from whatever
source are public funds, and can be used only for public purposes.
RULING: YES, GSIS is solidarily liable.
Neither is the civilian nature of VFP relevant in this case. The
The petition is bereft of merit.
Constitution does not contain any prohibition, express or implied,
Articles 106 and 107 of the Labor Code provide:
against the grant of control and/or supervision to the Secretary of
ART. 106. Contractor or subcontractor.– Whenever an employer enters
National Defense over a civilian organization.
into contract with another person for the performance of the former’s work,
The Administrative Code, by giving definitions of the various
the employees of the contractor and of the latter’s subcontractor, if any,
entities covered by it, acknowledges that its enumeration is not
shall be paid in accordance with the provisions of this Code.
exclusive.
In the event that the contractor or subcontractor fails to pay
Petitioner VFP is a public corporation. As such, it can be placed
the wage of his employees in accordance with this Code, the
under the control and supervision of the Secretary of National Defense,
employer shall be jointly and severally liable with his contractor or
who consequently has the power to conduct an extensive management
subcontractor to such employees to the extent of the work
audit of petitioner corporation.
performed under the contract, in the same manner and extent that
he is liable to employees directly employed by him.
xxx
So, read those 2 cases. Those are the latest cases on whether or ART. 107 Indirect employer.– The provisions of the immediately
not you are covered by the Labor Code. preceding Article shall likewise apply to any person, partnership, association
or corporation which, not being an employer, contracts with an independent
Another case that falls under when government is supposed to be contractor for the performance of any work, task, job or project. (Emphasis
not covered by the Labor Code. The other exception is Articles 106 to supplied.)
107, when it comes to joint and several liability of the contractor if the The joint and several liability of the employer or principal was
government is the contractor. enacted to ensure compliance with the provisions of the Code,
You are no strangers from the ruling of the Supreme Court that if principally those on statutory minimum wage. The contractor or
the contractor did not pay the salaries of the employees, the indirect subcontractor is made liable by virtue of his or her status as a direct
employer, even if it is government, is liable jointly and severally. That employer, and the principal as the indirect employer of the contractor’s
has been the ruling of the Supreme Court. employees. This liability facilitates, if not guarantees, payment of
the workers’ compensation, thus, giving the workers ample
Here comes the case of: protection as mandated by the 1987 Constitution. This is not
GSIS vs. NLRC, LANTING SECURITY unduly burdensome to the employer. Should the indirect employer
G.R. NO. 157647, October 15, 2007 be constrained to pay the workers, it can recover whatever
GSIS contracted a janitorial service provider. They entered into amount it had paid in accordance with the terms of the service
an agreement. In the middle of the agreement, there was a wage contract between itself and the contractor.
order. And the wage order precisely provided that the increase in the Under Article 1217 of the Civil Code, if the GSIS should pay the money
minimum wage was for the account of the indirect employer. The claims of complainants, it has the right to recover from LSWA whatever
contractor will not answer for the increase. amount it has paid in accordance with the terms of the service contract
So, the contractor went to the GSIS. Hain naman ang increase? between the LSWA and the GSIS.
Mao man ang sulti sa balaod. So, the GSIS paid the contractor. Now, Joint and solidary liability is simply meant to assure aggrieved workers
the contractor did not pay the employees the differential. of immediate and sufficient payment of what is due them. This is in line
The employees of the contractor sued both the contractor and with the policy of the State to protect and alleviate the plight of the working
GSIS, the indirect employer. class.
GSIS said “we have already paid. So, we have to be discharged
of the obligation. And we are government. So, we should not make
Before that, there was this case of:
this contractor solely liable because the money has already been paid.”
NATIONAL FOOD AUTHORITY vs. MASADA SECURITY AGENCY
What did the NLRC say?
453 SCRA 70 (2005) (see case digests)
NLRC says that you are the only one with visible assets.
You already came across this case.
Therefore, we are in agreement with the Sheriff to levy on your assets.
There was a new wage order. The new wage order says the increase
GSIS says, does it not matter if we are government?
in the basic is this much. And this is the increase mandated by this law is
The Supreme Court said: joint and several liability is for the
the responsibility of the indirect employer.
benefit of the workers. And this Court is mandated to uphold its
Masada Security went to NFA, the beleaguered agency, and asked for
benefit even if the indirect employer is government.
the increase and the roll-up cost which come as a result of the increase.
Kung increasan ka ug basic, mu-increase man pud ang imong 13 th month.
GSIS vs. NLRC, LANTING SECURITY Unya, security guards man ni. They work 365 days in a year man. So, naa
G.R. NO. 157647, October 15, 2007 nay premium pay, automatic. Every Sunday is considered your rest day.
FACTS: Lanting Security and Watchman Agency (LSWA) entered into So, you receive premium pay on Sunday. If mu-overtime ka, musaka pud
a Security Service Contract to provide security guards to the properties ang imong overtime because it is based on the basic.
of the GSIS. So, the security agency says, you are obligated not just to pay us the
During the effectivity of the contract, LSWA requested the GSIS bare minimum increase mandated by the law, but the necessary increases
for an upward adjustment of the contract rate in view of Wage Order 1 that will result because of the increase of the basic. It stands to reason
and 2. GSIS approved the upward adjustment. according to Masada Security.
On March 15, 1993, GSIS terminated the Security Service The NLRC said Masada is correct. The Court of Appeals that it stands
Contract with LSWA. Complainants filed separate complaints against to reason.
LSWA for underpayment of wages and non-payment of labor standard When they went to the Supreme Court, the Supreme Court says no.
benefits. LSWA filed a Third-Party Complaint against GSIS for The law only says the increase will be for the account of the indirect
underpayment of complainants' wages. GSIS alleged that the Third- employer. It does not say the increase plus the necessary following roll-up
Party Complaint states no cause of action against it; that LSWA increases.
obligated itself in the Security Service Contract to be solely liable for
the enforcement of and compliance with all existing labor laws, rules The interpretation therefore of the wage liability in Articles 106 and
and regulations; that the GSIS Board of Trustees approved the upward 107 seems to be interpreted strictly. You cannot be made to shoulder, if
adjustment on a month-to-month basis. you are an indirect employer, more than what the law literally says. Not
The Labor Arbiter held LSWA and GSIS jointly and severally liable even for consequential increases or the so-called roll-up costs.
for the payment of complainants' money claims, pursuant to Articles That is a Labor Relations term – roll-up costs. Kanang mag-collective
106 and 107 of the Labor Code. bargaining, mag-ingon ka na tagai ko ug P10 increase daily. Dili man na

4
P10 daily. Ang amot ana sa SSS, musaka man. Mabalhin man ka ug reason of age is the burden of proof of the employer himself, not the
bracket. Iphon man na nimo to find out the total cost of your demand employee.
-13th month increases, overtime increases. And you tell the union, in Before that is the job of the unions, to gather all these data to prove
truth and in fact, your demand costs this much. For you, it is just a that there is discrimination. Let us say race – lagum ko, negro unya wala
very low increase. You multiply it with the number of workers and you ko pasudla dinha. How do I prove discrimination? Statistical. If in this city,
say this is the cost. No, that is not the cost. You have to include the its unskilled workers, the market for your labor is only local. If the city has
so-called roll-up cost. That is necessarily done in bargain. the population percentage of 40% black, 60% non-black and the labor
component of this particular factory is not 40-60, then, already, the
But the Supreme Court wala man nakaila kung unsa man and roll- employer must prove that this statistic is not indicative of discrimination.
up cost :o But now, for age, all you have to do is allege. Mao ni akong edad. I
Where will we (Masada Security) get that? was employed, then, I was removed. Now, it is the turn of the employer to
The Supreme Court said that you will get that from your own prove that there was no discrimination when you were removed. That is
share of the contract price of the agreement between you and National the rule.
Food Authority. You must have some shares. That is where you will Sa ato, wala pa na. Why? Pangutan-on man sa imong application
get it. form, how old are you? Date of birth? You cannot require any application
for the date of birth unless the age has direct relation to the job.
So, those are the 2 latest cases on the solidary liability of Articles Ana sila looking for a child actor? Unya 50 years old and above ka?
106 and 107. Discrimination oh?  That is direct relation to the job. Then, you can ask
for the date of birth. Unless it is directly related, you cannot.
Let me just bring to your attention the 3 instances where we
say there is an ER-EE relationship created by law. The law itself JULY 9
creates this ER-EE relationship.
Remember that ER-EE relationship is a contract. And under the More or less we have covered all the ER-EE relationship cases.
rules of contract, we follow the number one of principle, which is the
principle of autonomy. Parties are free whether or not to enter into I will just touch on an important particular issue: whether or not ER-
a contract. Dutlan na gani nimo ug pusil ang iyang bagolbagol, dili na EE relationship is a question of fact or a question of law.
na kontrata. Pinugsanay na na. Bisan pa naa kay hinungdan ngano
nimo gidutlan ug pusil. That is not valid because that is not free You will find just as many cases that will say where the ER-EE
consent. It must be voluntary. relationship is question of fact. Facts determine whether there exists and
ER-EE relationship. And there are cases also where the SC says ER-EE
What happens when the government says there is a contract, an relationship is a question of law.
ER-EE relationship, bisan wala ninyo but-a? That is what happens in
an ER-EE relationship enforced by law. What is the correct configuration of that particular question?

1. Indirect employer Reading through all the cases, the way to reconcile is this:
Company A engages Masada security to provide janitorial If the putative ER is only one, then, most likely, you will have
services. The price for the janitorial services is computed by square a question of fact and the requirements there for the existence of the ER-
meters. At how much are you willing to pay the janitorial services? EE relationship.
Once a week there must be a thorough shampoo of the floor. Once a If the requirements are hazy, like selection and hiring, payment of
month there must be a general cleaning of the ceiling, etc. Unya mu- wages, power to dismiss, then, the settling issue will be power of control,
bid ang different agencies based on the square meters. Iphon nimo not its existence but its reservation in the very least – whether or not the
pila katao imong ipadala. putative employer reserves the right to control, even if no evidence is given
The law says the if the agency cannot pay the employees na of its actual existence. If there is glimmer of evidence on that, then, the
iyang gipadala sa indirect employer, the indirect employer becomes trier of facts must hold that the ER-EE relationship exists. Why? Because
jointly and solidarily (severally ata dapat ) liable. He becomes like the presumption is or the biased is for the existence of the ER-EE
the employer because he must pay the wages that should have not relationship.
been paid but was not paid by the direct employer, the janitorial For purposes of the ordinary man, there is greater protection if there
agency. exists ER-EE relationship. That is why the law stretches the interpretation
Remember this test: if it is a bonafide contract, meaning, not of the 4 requirements – power to dismiss, selection and hiring, payment of
labor-only contracting, then, you can only be made liable as to the wages and power of control.
underpayment of wages and benefits. Wala ka tagai ug ECOLA, 13 th No where in the requirements does it say rendition of service.
month, overtime pay, premium pay. Kana. Mao na imong tubagon.
Pero if wala tagai ug maternity benefits, wala ka nay labot ni ana. In the same way, you see how the law operates on a contract of
That is not wages and benefits. That is social legislation. carriage. Is it interpreted in favor of the common carrier? NO, the common
When do you know it is bonafide? When you contract out the carrier is under very heavy exaction. It must exercise not only the diligence
services that the Supreme Court has said in NERI vs. NLRC as of a good father of a family but the greatest degree of diligence. Even if
contractable services. These are needs that may be contracted out. there is no carriage yet, the contract of carriage already exists. Even if the
What are these according to Neri? passenger has already reached his destination, for as long has not yet gone
a. security services out fully, freely and autonomously to charter his course anywhere, the
b. maintenance services contract of carriage still exists.
c. janitorial services That is why in ER-EE relationships, the requirements are stretched
d. other technical services precisely for the protection for ordinary worker.

That is: The picture however change when there are multiple putative
NERI vs. NLRC (July 21, 1993) (see case digests) employers, when there is contracting and sub-contracting. Once
The Supreme Court takes judicial notice of the widespread you have that picture, it is not the facts that determine. It is the law
practice, both in the public and private sector of contracting out that determines.
security services, janitorial services, maintenance services, and other
technical services. So much so, that even if certain personalities that are excluded by the
Labor Code like the government, why is it that they are still made to answer
Supreme Court can say that because if you go to the Supreme for the liabilities of the government even if they are government when there
Court webpage, one of their pages is for those who want to qualify to is non-payment or underpayment of wages? Because it is no longer the
bid for janitorial services of the court and security services. The facts that determine, it is the law itself that determines.
requirements are there. The Supreme Court has so many Once you have multiple putative employers, then, most likely, it is the
requirements. law that determines. In those cases, ER-EE relationship is a question of
The question is: suppose, those janitorial service providers or law, no longer a question of fact.
those security agencies fail to pay the guards and the janitors that are
seconded to the courts, who will be sued, jointly and severally?  Please keep that in mind  I cannot recall if that question has been
You should write a paper on that. asked in the Bar Examinations. But someday, it might be asked.
What will happen when they file a case? The Labor Arbiter will
not probably know yet the consequences here. Although, it will begin We have gone through the list of contracts close to, akin to, similar to
to know because who will it summon to appear?  Chief Justice Puno, ER-EE relationship. And our mind is now set, by reading through these
being the head of the Supreme Court?  cases, reading through these facts, gradually they built a horizon. That is
the use of reading cases – you accumulate a sense of facts stored in a
The ruling for the discrimination for age in the US Supreme Court background.
is the same as our ruling here on security of tenure. The burden of Then, you come through a set of facts, whether it may be in the bar
proof that the employer did not discriminate against an employee by examinations or later on when you are practicing as a lawyer. To make
sense of those facts, you put it against the horizon.
5
You give the data a chance to address you, a chance to speak to averred that such order is prejudicial not only to their economic stability but
you. In the end, it is your horizon  also to their families.
Upon their filing of a complaint, they were subsequently terminated.
The first thing that you do is you ask is this or is this not an ER- The LA dismissed the complaint for lack of jurisdiction. NLRC reversed the
EE relationship. What horizon will you use pertinent to the cases of decision ordering BSP to reinstate respondents with full back wages.
ER-EE relationship? If it does not make sense in any of those cases, BSP contends that it is under the CS Law because it is an organization
then, you slowly eliminate it. And your answer will be short. created under CA 111 (an Act to Create a Public Corporation to be known
If you decide that it is an ER-EE relationship, then, you move it as BSP) with obligation towards nation-building.
into another horizon because Article 82 lists a series of ER-EE
relationship that are not covered for purposes of Labor Standards Law. ISSUE: Who has jurisdiction?

ARTICLE 82. Coverage. — The provisions of this title shall HELD: CSC has jurisdiction. It is a GOCC with original charter. Considering
apply to employees in all establishments and undertakings whether for its character and the purpose of its function, the statutory designation of
profit or not, but not to government employees, managerial BSP as a “public corporation”, and the substantial participation of the
employees, field personnel, members of the family of the employer government in the selection of its members, there is no doubt that it falls
who are dependent on him for support, domestic helpers, persons in under CS Law. (Lakas Atenista transcription )
the personal service of another, and workers who are paid by results
as determined by the Secretary of Labor in appropriate regulations. So, this is one instance (PSPCA case) where the exclusion in Article 82
As used herein, "managerial employees" refer to those whose is disregarded.
primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof, b. Second instance is solidary liability in case of contracting
and to other officers or members of the managerial staff. and sub-contracting. If the government is involved as indirect
"Field personnel" shall refer to non-agricultural employees who employer and there is underpayment or non-payment of wages,
regularly perform their duties away from the principal place of business the government remains solidarily liable.
or branch office of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty. c. What is the third? We will jump to Labor Relations.
In the case of Association of Court Appeals Employees
What are those? (ACAE) vs. Laguesma, the Supreme Court said that the
Department of Labor can go to the Court of Appeals and
1. The first in the enumeration of the Labor Code, Article 82 is not supervise the certification for election of the Court of Appeals’
an exception but an exclusion – that is government employees. employees without violating the independence mandated of the
They are not included because there is no ER-EE relationship separate branches of the government - meaning the executive is
between the government and the government EE. They are not co-equal, separate and distinct and independent from the
covered. judiciary. There is no violation if the Department of Labor goes
But then again, because of certain provisions, they are covered. over and supervises.
What are some provisions that necessitate the coverage of In that way, there is also no violation of the exclusion of the
government? government employees if the union of government employees is
a. Case of of Philippine Society for the Prevention of required by Executive Order 180 to be registered both in the Civil
Cruelty to Animals (PSCPA) vs. COA 534 SCRA 112 Service and in the Department of Labor. That is the requirement
(2007) of EO 180.
Under Article IX-B of the Constitution, government EEs ACAE vs. CALLEJA
covers all those that are engaged by the national 203 SCRA 596
government, any of its subdivisions, agencies,
instrumentalities, including government-owned and FACTS: ACAE means Association of Court of Appeals Employees. They are
controlled corporations with original charter. government employees who formed a union. Subsequently, another union
Kanang mga in-ana, timan-an na niyo. Formula na na. was formed named as CACAE. They filed a complaint against the DOLE on
It should be one of your standard phases. the ground that the DOLE cannot supervise the election because that will be
The implication of Article IX-B of the Constitution is that tantamount to the executive branch interfering with the judiciary.
if you have an original charter, you are government. You
are excluded from the Labor Code. That is the implication. ISSUE: Whether or not the Bureau of Labor Relations has jurisdiction to
That is known as the original charter test. handle disputes among associations of employees working for the judiciary
The Supreme Court said that the Philippines Society for
Prevention of Cruelty to Animals, even if it has an original HELD: Under EO 180, the law governing certification elections in the CA, it
charter because it was directly created by law (Act 1285, is the function of the Court to regulate all activities of the judicial personnel.
dated January 19, 1905), it is still private because the This includes the Supreme Court, to the end that the independence,
original charter test cannot be given retroactive effectiveness and integrity of the Judiciary is not impaired or compromised.
effect. At the time it was created by law, there was no Claims for higher compensation or improved facilities must therefore be
Constitution - no 1935 Constitution, no 1973 Constitution, no viewed in terms of fiscal autonomy. Neither the DOLE nor the CSC, nor any
Constitution of 1987. other agency, have the jurisdiction to adjudicate such claims. Ultimately, all
Besides that, it really functions as a private entity. It unresolved legal questions are decided by the Court. However, in much
had private funding. Its administration of funds was private. the same way as the CSC conducts competitive examinations to grant the
Its application of private funds was not governmental in requisite eligibility to court personnel, the DOLE must handle the
nature. certification process in the CA, considering it expertise, machinery and
This is differentiated from Boy Scouts of the experience in this kind of activity. Therefore, the BLR must do the job.
Philippines vs. NLRC because the Boy Scouts was already There is no transgression of the doctrine of separation of powers.
created by an original charter before the 1935 Constitution. (Lakas Atenista Transcription )
Its administration has always been directly linked with the
government because it has always been used in the past as Right then and there, you have 3 exceptions to the general rule that
a direct arm for influencing the youth, which in the government employees are excluded from the purview of the Labor Code.
Constitution is supposed to be one of the pillars of the future
of our society. In all the various schools, boy scouting is a 2. The second group of workers is managerial employees.
specific program for the formation of the youth. Plus the
proviso that the number one boy scout is no less than the Managerial employees are of two kinds:
President of the Philippines, regardless of his or her gender. a. Managerial employees proper – those whose primary duty
When the law does not differentiate, neither should we consists of the management of the establishment or a
distinguish. That is a very important rule in Statutory department or a subdivision thereof
Construction. b. Managerial employees because they are members of the
Under the Boy Scout Law, the president, regardless of managerial staff
the gender, is the number one boy scout.
The decided case that is pertinent to this classification for purposes of
BOY SCOUTS OF THE PHILIPPINES vs. NLRC Labor Standard is National Sugar Refining vs. NLRC 220 SCRA 452
196 SCRA 176 (1993).

FACTS: In 1984, the Secretary-General of BSP issued five (5) special NATIONAL SUGAR REFINERIES vs. NLRC
orders (SO) for the respondents who were all rank-and-file employees.
The SO mandates that they will be transferred to BSP Camp in FACTS: The different workers involved in this case are workers of the
Asuncion, Davao del Norte from their camp in Makiling. Respondents following positions: technical assistant to the refinery operations manager,

6
shift sugar warehouse supervisor, senior financial budget analyst, c. Their type of work, their hours of work cannot be determined
general accountant cost accountant, shift boiler supervisor, shift with reasonable certainty.
operations chemist, shift process supervisor etc. The company
underwent a job evaluation program and the said positions were One of the cases that brings this about is the case of MERCIDAR
particularly recommended to be separately categorized as members of FISHING CORPORATION vs. NLRC, F. AGAO 297 SCRA 440 (1998). It
the managerial staff. As a consequence, their basic pay was raised by is a case of EEs in a deep-sea fishing boat. Does it mean that it has to be
50%. As soon as they were made into a separate category of workers, counted the entire time that he is out at sea as working time because it is
they formed a union distinct from those of the rank and file outside the place of office of the ER?
employees. They, then, entered into a CBA which no longer provided The answer is NO. Fishermen employed by petitioner have no choice
for overtime pay, premium pay and holiday pay. but to remain on board its vessel. Although they performed non-
2 years later, they asked from the Labor Arbiter for the agricultural work away from the petitioner’s business offices, the fact
reinstatement of the benefits which they once enjoyed. Their remains that throughout the duration of their work, they are under the
argument was that they are not managerial employees under the effective control and supervision of the petitioner through the vessels
definition or Art. 212(m) of the Labor Code and that is precisely why patron or master, as the NLRC correctly held.
they can form a union and that therefore, they are entitled to the
benefits which they received in the past since they ripened into a right. It is not automatic therefore that just because you work outside the
The Labor Arbiter ruled in their favor. Decision affirmed by the NLRC. place of office that you are a field personnel. What is more important is
that your hours of work cannot be determined with reasonable certainty.
HELD: They are members of the managerial staff since they are Why can it not be determined? Not because there is lack of supervision or
holding non-line positions which are connected to the line hierarchy of supervision is difficult, but because of the nature of their work. Bisan
the company. The definition of managerial employees in Article 82 of unsang tutok nimo sa iyang trabaho, di gyud ka makadetermine ug pila
the Labor Code should be applied instead of Article 212(m) since the iyang oras pagtrabaho.
issue here is hours of work and other benefits.
The SC ruled that when they are enjoying such benefits, they MERCIDAR FISHING CORP vs. NLRC
were entitled to it. However, since there was a job evaluation wherein
they were promoted into a different category, i.e. managerial FACTS: Private respondent had been employed as a “bodegero” or ship’s
employees, they are no longer entitled to it. The SC said: The test quartermaster. He alleged that he had been sick and thus allowed to go on
more rationale for this rule from a long practice requires an indubitable leave without pay for one month but that when he reported to work, he
showing that an employer agreed to continue giving the benefits was told to come back another time as he could not be reinstated
knowing fully well that the employees are not covered by the law immediately. Thereafter, petitioner refused to give him work. Private
requiring payment thereof. The employer did not continue to pay the respondent asked for a certificate of employment from petitioner. Petitioner
premiums on time pay the moment they were reclassified. It could refused to issue the certificate unless he submitted his resignation. Since
have been different if it continued and then it ceased. But since it did private respondent refused to submit such letter unless he was given
not continue, the employer is no guilty of diminution of benefits. separation pay, petitioner prevented him from entering the premises.
Petitioner alleged that it was private respondent who actually
If you read your commentaries, how did it distinguish managerial abandoned his work.
employees from rank and file? The Labor Arbiter ordered the respondent to reinstate complainant
If they use Labor Relations cases, chances are, their explanation with back wages, pay him his 13th month pay and incentive leave pay for
is less than accurate. Why? Because the managerial employee in 1990.
Labor Relations is not the same as the managerial employee in Labor On appeal, the NLRC dismissed petitioner’s claim that it cannot be held
Standards. The managerial employee in Labor Standards is broader. liable for service incentive leave pay by fishermen in its employ as the latter
The managerial employee in Book 5, Labor Relations, is smaller supposedly are “field personnel” and thus not entitled to such pay under the
compared to Labor Standards. Labor Code.
Example: Supervisors in Labor Relations have a limited exercise
of the right to self-organization. They are not really classified as ISSUE: Whether or not the fishing crew members cannot be classified as
managerial employees because if you are classified as managerial field personnel under Article 82 of the Labor Code.
employees in Labor Relations, you have absolutely no right to exercise
self-organization. HELD: The petition has no merit.
But when you cross, managerial employees under Labor “Field personnel” shall refer to non-agricultural employees who
Standards are broader. Supervisors are already managerial regularly perform their duties away from the principal place of business or
employees. They are not entitled to overtime. What is more, branch office of the employer and whose actual hours of work in the field
somebody who does not ostensibly do any managerial act because he cannot be determined with reasonable certainty.
does not have any to supervise, he is still considered as managerial, In deciding whether or not an employee’s actual working hours in the
and therefore, not entitled to overtime, premium pay and other field can be determined with reasonable certainty, query must be made as
benefits. to whether or not such employee’s time and performance is constantly
For instance, if you are a cost accountant, you have no supervised by the employer.
supervisors. Cost accounting now, unlike in the past, can be done with In this case, during the entire course of their fishing voyage, fishermen
the use of a PC. Before you would need filing clerks because your employed by petitioner have no choice but to remain on board its vessel.
records are all kept in hardcopy. Now, because you are just hooked Although they perform non-agricultural work away from petitioner’s
up to the system, it just needs most probably a CPA who will handle business offices, the fact remains that throughout the duration of their work
cost accounting for a large corporation and they have a way of they are under the effective control and supervision of petitioner through
retrieving costs. At the end of the day, you know your costs. the vessel’s patron or master as the NLRC correctly held.
Is that cost accountant, who has no contact at all with anybody, a (Lakas Atenista Transcription )
rank-and-file employee? The answer is NO, because he is explicitly left
out under Article 82 – members of the managerial staff. The classic example of a field personnel is the salesman. Sa iyang
Why is he included? Because he deals with managerial pagpamaligya, ayuhon na na iyang customer. Mangaon sila sa gawas.
information. Mostly, this managerial information is Labor Relations Pakan-on sa gawas. Sige sila storya, hoping that in the end he will get a
related, managerial related. It puts him in a difficult situation of job order.
having to compute for his rank-and-file benefit when he is in fact It would be unfair to the ER to count the entire time as working time.
always in association with managing. In other words, the very nature of his functions render it impossible to
The reason why management EEs in Labor Standards is because determine with certainty his hours of work.
they are not hired for the hours of work that they render. Why are Please remember that when it comes to field personnel. Not just
they hired? They are hired for their special training, to produce because they are outside.
results, to set-up goals, pursue the goals and monitor the pursuit of That is the reason why they are exempted. It would be unfair to the
goals. Time is not directly related. ER if their hours of work would be counted because frankly speaking, it
Does it mean that the manager does not have to show-up in the cannot be determined with reasonable certainty.
office? NO. But that is not the essence of his purpose of being
engaged. His purpose is not time related, but results related, goal 4. Domestic helpers
related, expertise. 5. Persons in the personal service of another
That is why their salaries are not computed on a time basis.
These two are similar. Unsa mang diperensiya aning duha?
3. We go to third group of EEs that are excluded. There is ER-EE Domestics serve for the personal comfort of a household. And they
relationship but it is excluded. Who are these? Field personnel. include the services of a family driver.
What do you have to remember about field personnel? 3 things. What is the significance of the inclusion of a family driver? The
a. The word field is anything but agricultural. inclusion of the family driver is significant to tell us that it is not the activity
b. Regularly perform their duties outside the offices of the ER that makes him domestic. It is the employer. Driving is an industrial task.
And yet, if you are a family driver, you are not an industrial worker. You

7
are domestic. What makes you a domestic? Not the chore that you Please remember: if a domestic is made to perform industrial or
do but your ER. If it is a household, you are not an industrial worker if commercial task, ang maid nimo sa balay ingnan nimo na adto sa tindahan
you are a driver. You are not covered by the industrial minimum wage kay ni absent tong atong tindera. If they do that, you have assigned her to
rate. You are covered by the minimum wage rates of domestics, do commercial task. That transforms her. That makes her into a
which is P 800 in 1 st class cities, P 650 in 1 st class municipalities and commercial worker. And she ceases to receive domestic rates. She must
other places P 500. Mao na ba rate karun sa Davao? Wa nay maid na receive commercial rates.
makuha ug P800 
Technically, all the maids should be already be registered with the Please keep in mind that the transformation is only one way. Kung
SSS because the moment their wage reaches P 1,000, they must be ang imong tindera ingnan nimo adto didto kay nakuyapan ang maid, wa
compulsorily covered. nay mubantay sa bata. Pag-adto sa balay, nahimo ba siya ug domestic?
NO, she continues to be a commercial worker. You cannot lower her salary.
The difference between persons in the personal service of Her salary only goes up. The transformation only works one way.
another and domestic is that domestics are household. If you do not
have a household, then, it is personal service. If you are asked a question, what are the working hours of a
They are exempted from Labor Standards law because the type domestic? They are provided in the Civil Code, Article 1695. The working
of engagement is ante-dated, long before the Industrial Revolution. hours are not more than 10 hours.
But those considered in the personal service of another are the
valet. ARTICLE 1695. House helpers shall not be required to work more than
ten hours a day. Every house helper shall be allowed four days' vacation
If you are not married, you cannot have domestics. But you can each month, with pay.
have persons in the personal service.
Remember the RIGHTS OF HOUSE HELPERS/DOMESTICS:
In the case of APEX MINING vs. NLRC 199 SCRA 278 (1991),
these chamber maids who were serving the company house that 1. They have a right to an original contract of not more than 2
accommodated Japanese expatriates working for Apex Mining, the years.
maid there that were cleaning the house, cooking, doing the laundry of After 2 years ana, they can leave. That is Article 142.
the Japanese, when they were paid domestic rates, the Supreme Court
said that is violation.
ARTICLE 142. Contract of Domestic service. — The
What were they doing? They were doing domestic chores.
original contract of Domestic service shall not last for more than two
Manilhig, magluto, maglaba. Are they not associated with domestic
(2) years but it may be renewed for such periods as may be agreed
chores? Pedestrian language dictates that if they do that, maid sila.
upon by the parties.
But in law, that is not what is determinative of domestics. It is
the employers. The Supreme Court says that they should not be paid
domestic rates. They should be paid commercial or industrial 2. They have a right to the minimum wage of domestics , which is
minimum wage rates. now provided under Article 143. P 800, P 650, P 500.
The determination of the wage is the type of city or
municipality.
APEX MINING COMPANY, INC. vs. NATIONAL LABOR
RELATIONS COMMISSION and SINCLITICA CANDIDO
ARTICLE 143. Minimum wage. — (a) Househelpers shall
FACTS: be paid the following minimum wage rates:
 Candido was employed Apex Mining to perform laundry services (1) Eight hundred pesos (P800.00) a month for househelpers in
at its staff house located at Maco, Davao del Norte. On December 18, Manila, Quezon, Pasay and Caloocan cities and the municipalities of
1987, while she was attending to her assigned task and she was Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon,
hanging her laundry, she accidentally slipped and hit her back on a Parañaque, Las Piñas, Pasig and Marikina in Rizal Province.
stone. (2) Six hundred fifty pesos (P650.00) a month for those in other
 As a result of the accident she was not able to continue with her chartered cities and first-class municipalities; and
work. She was permitted to go on leave for medication. The manager (3) Five hundred fifty pesos (P550.00) a month for those in other
of Apex offered her the amount of P5,000.00 to persuade her to quit municipalities.
her job, but she refused the offer and preferred to return to work. Provided, That the employers shall review the employment contracts of
Petitioner did not allow her to return to work and dismissed her. their househelpers every three (3) years with the end in view of
 Candido filed a request for assistance with the DOLE. The Labor improving the terms and conditions thereof.
Arbiter rendered a decision in favor of Candido, which was affirmed by Provided, further, That those househelpers who are receiving at least
the NLRC. One thousand pesos (P1,000.00) shall be covered by the Social
Security System (SSS) and be entitled to all the benefits provided
ISSUE: Whether or not a househelper in the staff houses of an thereunder.
industrial company a domestic helper or a regular employee of the said
firm. 3. The right to an opportunity for at least an elementary education if
below 18.
RULING: Naa gani maid na kuhaon below 18, wala pa nahuman ug
 The term 'domestic servant' and shall refer to any person, grade school, what is your duty? Paeskwelahon nimo siya? NO,
whether male or female, who renders services in and about the your duty is to given them an opportunity for an elementary
employer's home and which services are usually necessary or desirable education.
for the maintenance and enjoyment thereof, and ministers exclusively So, dad-on nimo siya sa grade school. Ienrol nimo siya
to the personal comfort and enjoyment of the employer's family dinha. Pareporton nimo didto. Pero pagtan-aw niya siya
 The foregoing definition clearly contemplates such househelper or pinakatas-an didto. Unya ang teacher sige ingon sa iya sit down
domestic servant who is employed in the employer's home to minister there, bisan naglingkod na siya, ah, dili na siya mubalik  This
exclusively to the personal comfort and enjoyment of the employer's means you have complied with your obligation to provide an
family. Such definition covers family drivers, domestic servants, opportunity for an elementary education.
laundry women, yayas, gardeners, houseboys and other similar What is the youngest age for maid? 15 – covered sila ana.
househelps. Younger than 15 is illegal.
 The definition cannot be interpreted to include househelp or
laundry women working in staffhouses of a company, like petitioner 4. The right to just and human treatment. The right to an
who attends to the needs of the company's guest and other persons indemnity for an unjust termination .
availing of said facilities. By the same token, it cannot be considered to What is the indemnity or damages for unjust termination?
extend to the driver, houseboy, or gardener exclusively working in the Compensation already incurred plus 15-day pay, according to
company, the staffhouses and its premises. They may not be Article 149 of the Labor Code.
considered as within the meaning of a "househelper" or "domestic
servant" as above-defined by law. ARTICLE 149. Indemnity for unjust termination of
 The mere fact that the househelper or domestic servant is services. — If the period of household service is fixed, neither the
working within the premises of the business of the employer and in employer nor the househelper may terminate the contract before the
relation to or in connection with its business, as in its staffhouses for expiration of the term, except for a just cause. If the househelper is
its guest or even for its officers and employees, warrants the unjustly dismissed, he or she shall be paid the compensation already
conclusion that such househelper or domestic servant is and should be earned plus that for fifteen (15) days by way of indemnity.
considered as a regular employee of the employer and not as a mere If the househelper leaves without justifiable reason, he or she
family househelper or domestic servant. (Christ May Andolana ) shall forfeit any unpaid salary due him or her not exceeding fifteen
(15) days.

8
5. The right to board, lodging and medical attendance free of Monday through Saturday and to stay in the tailoring shop for no less than
charge under Article 148. 8 hours a day, unless no job order was given them after waiting 2 to 3
hours, in which case, they may leave and may come in the afternoon. Their
Right na niya na pakan-on, patulgon dira. That is why attendance was recorded through a bundy clock just like the other
domestics cannot form a union. Kay gikan sila magstrike, kada employees of petitioner. Private respondents filed a complaint for violation
gabii, mupauli gihapon sa imo – diha gihapon matulog. Hiloan of PD 851 (13th month pay) and PD 525, as amended by PD 1123
tingali mo  Strike does not sever ER-EE relationship, is it not? (Emergency Living Allowance) against petitioner.
Petitioner contends that the employees are excluded from the
ARTICLE 148. Board, lodging and medical coverage of PD 525, 851 and 1123 because of the nature of their
attendance. — The employer shall furnish the househelper free employment, there being 'no fixed time with regards to entry and exit' and
of charge suitable and sanitary living quarters as well as adequate no fixed number of days of work, with respect to said employees.
food and medical attendance. On appeal, the Ministry of Labor examined carefully the decrees and
find absolutely no indication therein that the employees are indeed
6. The right to leave the service on 5-day notice if engagement excluded. Nor are the rules implementing the decrees supportive of the
is without a term under Article 150. petitioner's contention.
Section 2 of the rules implementing PD 525 provides: 'The Decree shall
ARTICLE 150. Service of termination notice. — If apply to all employees of covered employers, regardless of their position,
the duration of the household service is not determined either in designation or employment status, and irrespective of the method by which
stipulation or by the nature of the service, the employer or the their wages are paid, including temporary, casual, probationary, and
househelper may give notice to put an end to the relationship five seasonal employees and workers.' And Section 3, of the rules implementing
(5) days before the intended termination of the service PD 851 provides that 'all employees of covered employers shall be entitled
to benefits provided under the Decree . . . regardless of their position,
designation or employment status, and irrespective of the method by which
7. The right to employment certification
their wages are paid.' Section 2 of the same rules explicitly provides that
The industrial or commercial worker does not have the right
the rules apply to 'workers paid on piece-rate basis' or 'those who are paid
to demand from her ER certification as to the number of years
a standard amount for every piece or unit of work produced that is more or
that he was working.
less regularly replicated, without regard to the time spent in producing the
The main domestic right is the employment certification.
same.
Very few know that.
ISSUE: Whether or not an employer-employee relationship exists
JULY 10, 2008
between the petitioner and the private respondents.
Groups of workers that are excluded or exempted from Labor
RULING: Petition is devoid of merit. The selection and hiring of private
Standards benefits as provided in the Labor Code:
respondents were done by the petitioner, through the master cutter of its
1. Government employees
tailoring department who was a regular employee. Private respondents
2. Managerial employees
received their weekly wages from petitioner on piece-work basis, which is
3. Field personnel
within the scope and meaning of the term “wage” as defined under Article
4. Domestic helpers
97(f) of the New Labor Code. Petitioner had the power to dismiss private
5. Persons in the personal service of another
respondents. Private respondents’ conduct in the performance of their work
was controlled by petitioner and they were allowed to register with the SSS
(Ika-7th na ang pakiao workers. Based sa lectures niya before may isa
as employees of petitioner.
na hindi pa namention in class - members of the family of the
The SC affirmed the ruling of the Ministry of Labor.
employer who are dependent on him for support – so, eto ang ika-
6th .. i think )
But then, in LABOR CONGRESS of the PHIL vs. NLRC (290 SCRA
7. Pakiao workers 509 – 1998), it says the piece-rate employees are entitled to night-shift
Pakiao is a technical term in Labor, it is not just a word in the differential, holiday pay, service incentive leave, premium pay and 13 th
vernacular. It is an official and technical terms found in the Labor month pay in accordance with the rules to implement the Labor Code.
Code. You must get the spelling of the Labor Code – “pakiao”.
LABOR CONGRESS vs. NLRC (May 21, 1998)
The only problem is, in the Fair Labor Standards Act of the United FACTS: Petitioners were rank-and-file employees of respondent Empire
States (from which our Labor Standards laws were drawn), pakiao Food Products, which hired them on various dates. Petitioners filed a
workers or workers paid are of two kinds: complaint for illegal lockout and/or dismissal and underpayment of wages.
a. worker paid on a piece-rate basis Complainants' admitted that they are piece workers or paid on a
b. worker paid on a task basis. 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
Pakiao sa ato, piece rate, pakiao. When you are paid on a task workers is that they should receive compensation no less than the minimum
basis, pakiao gihapon. Dili kaayo differentiated. Our terminology wage for an 8-hour work.
covers a multitude of conditions. The Labor Arbiter ruled that there was no under payment of wages.
But in the Fair Labor Standards Act of the US, there are This was affirmed by the NLRC.
differentiations.
Why do I point that out? Because of the lack of differentiation, ISSUE: Whether or not petitioners should be reinstated from the date of
the Supreme Court itself committed a blunder. They mistake a certain their dismissal up to the time of their reinstatement, with backwages,
pakiao arrangement. The error of the Supreme Court is that they are statutory benefits, damages and attorney's fees.
actually amending the law. It is not judicial legislation, by the fact that
they supply something which is not there, therefore, they are HELD:
legislating. But they are really contravening. The failure to work for one day, which resulted in the spoilage of
In ROSARIO BROS vs. OPLE (134 SCRA 172 – 1984), it cheese curls does not amount to abandonment of work. In fact two (2)
says, this Court rules that tailors and similar workers hired in the days after the reported abandonment of work or on January 23, 1991,
tailoring department of a department store, although paid weekly petitioners filed a complaint for, among others, unfair labor practice, illegal
wages on piece-work basis, are employees paid on a piece-rate basis, lockout and/or illegal dismissal. One could not possibly abandon his work
not independent contractors. Dili pa na kaayo na grabe na sayop. and shortly thereafter vigorously pursue his complaint for illegal dismissal.
Then, it says, accordingly, as regular workers paid on piece-rate Petitioners are therefore entitled to reinstatement with full back wages.
basis, petitioners are not entitled to overtime pay, holiday pay, Nevertheless, the records disclose that taking into account the number of
premium pay, rest day pay and service incentives. employees involved, the length of time that has lapsed since their dismissal,
Correct pa na! and the perceptible resentment and enmity between petitioners and private
respondents which necessarily strained their relationship, reinstatement
ROSARIO BROTHERS, INC vs. OPLE, NLRC, et al would be impractical and hardly promotive of the best interests of the
(July 31, 1984) parties. In lieu of reinstatement then, separation pay at the rate of one
month for every year of service is in order.
FACTS: Private respondents are tailors, pressers, stitchers and Petitioners, as piece-rate workers having been paid by the piece, there
similar workers hired by the petitioner in its tailoring department. is need to determine the varying degrees of production and days worked by
Some had worked there since 1969 until their separation on January 2, each worker.
1978. For their services, they were paid weekly wages on piece-work As to the other benefits, namely, holiday pay, premium pay, 13th
basis, minus the withholding tax per BIR rules. They were registered month pay and service incentive leave which the labor arbiter failed to rule
with the SSS as employees of petitioner and premiums were deducted on but which petitioners prayed for in their complaint, we hold that
from their wages. They were members of the labor union which has a petitioners are so entitled to these benefits. Three factors lead us to
CBA with the company. They were required to report for work from

9
conclude that petitioners, although piece-rate workers, were regular 8 to 12, 1 to 5 – 8 hours. Kinahanglan muhuman ka ug 25 na kalo.
employees of private respondents: Ug dili gani, dili ka sweldohan. It cannot be done. The quota is just a
(1) as to the nature of petitioners' tasks, their job of repacking snack matter of discipline. It is just a matter of issue of supervision. But it cannot
food was necessary or desirable in the usual business of private be the basis for remuneration. Why? Because you are now given time.
respondents, who were engaged in the manufacture and selling of
such food products; (2) petitioners worked for private respondents What is the bias of the Labor Code?
throughout the year, their employment not having been dependent on The bias of the Labor Code is your time. If there is doubt, you are
a specific project or season; and timed. If you are timed, you are entitled to at least the minimum wage.
(3) the length of time that petitioners worked for private respondents.
Thus, while petitioners' mode of compensation was on a "per If you are paid piece rate and you have a suspicion that the piece rate
piece basis," the status and nature of their employment was that of system is used to circumvent the minimum wage, what is your remedy?
regular employees. Under the Labor Code, you cannot file straight with the Labor Arbiter
The Rules Implementing the Labor Code exclude certain for underpayment or nonpayment of wages. You cannot do that. Your
employees from receiving benefits such as nighttime pay, holiday pay, remedy is first determine whether or not the piece-rate system has been
service incentive leave and 13th month pay, inter alia, "field personnel exploited to circumvent the minimum wage.
and other employees whose time and performance is unsupervised by On a verified petition, you go to the Regional Director of Labor and ask
the employer, including those who are engaged on task or contract for a time and motion study. That is your remedy.
basis, purely commission basis, or those who are paid a fixed amount And then, after making a time and motion study, because there are
for performing work irrespective of the time consumed in the guidelines, the piece rate is not supposed to be based on the fastest worker
performance thereof." Plainly, petitioners as piece-rate workers do not nor should it be based on the slowest worker, but on the average worker.
fall within this group. Not only did petitioners labor under the control If after time and motion study, the piece rate that is given to you ends
of private respondents as their employer, likewise did petitioners toil up with you getting less than the minimum wage for an average
throughout the year with the fulfillment of their quota as supposed performance of 8 hours, then, you can go to the Labor Arbiter and ask for
basis for compensation. Further, in Section 8(b), Rule IV, Book III, underpayment of wages.
piece workers are specifically mentioned as being entitled to holiday This time you have a backing from the Department of Labor – time
pay. and motion study.
In addition, the Revised Guidelines on the Implementation of the Keep that in mind.
13th Month Pay Law, in view of the modifications to P.D. No. 851 by
Memorandum Order No. 28, clearly exclude the employer of piece rate 2 Kinds of Pakiao Workers:
workers from those exempted from paying 13th month pay. 1. Piece-rate
According to Sec 2(e), Rule I, Book III of the Implementing 2. Payment by results
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 Remember, the provision on wages is not covered by Title 3. It is in
accordance with the standards prescribed under Sec. 8, Rule VII, Book an entirely different title. As to when you are paid, what you are paid, how
III, of these regulations, or where such rates have been fixed by the often you are paid, or where you are paid, that is a different provision.
Secretary of Labor in accordance with the aforesaid section, are not Muingon ka, kay piece-rate man ko, kada mahuman nako, ihap na ta
entitled to receive overtime pay. Here, private respondents did not dayon. Bayri ko dayon, di man kaha ko time worker. No, you cannot do
allege adherence to the standards set forth in Sec. 8 nor with the rates that.
prescribed by the Secretary of Labor. As such, petitioners are beyond You are still bound by the general rule that when it comes to wages,
the ambit of exempted persons and are therefore entitled to overtime payment may be made, twice a month, only at intervals not longer than 16
pay. days. That is a separate section in the Labor Code.
That is why the wages conditions are separated.
When you name benefits and yet Article 82 explicitly singles out
pakiao workers as not included in those benefits, is that judicial Muingon ka, nahuman naman nako pagsemento. Maghulat pa di ai ko
legislation? That is judicial booboo. ug two weeks una ko bayran? Naa kay 2 ka assistant. Gisabot nimo na
wala niy oras ha. Basta ganahan magtrabaho, magtrabaho. Wa gyud ninyo
The only correct thing with the Supreme Court is scholarship pahulayi. 2 mo ka adlaw, puli puli. Nahuman ninyo 3 ra ka adlaw.
because the moment they make a decision and it passed motion for Can the employer say that since wages are going to be paid once
reconsideration, it is fixed. As Justice Cardoso said, the Supreme every two weeks at intervals not more than 16 days, steady ra mo di ha?
Court is infallible because it is final. It is not final because it is They cannot do that. Why? Because of another factor. The engagement is
infallible. And the fallibility of the Supreme Court must be a constant casual in nature and the engagement has terminated. Therefore, there
worry of the judicial system. The players in the judicial system cannot must be a settlement because it has terminated. It is not open-ended.
voice out the shortcoming of the Supreme Court if they have an When it is open-ended, the fact (?) that payment is made in two
interest to pursue. Who can do that? The academicians. And you do weeks, in no case longer than 16 days, than can be followed.
that, by showing it. But if the engagement is casual in nature, then, at the completion,
there must be payment.
Article 82 says pakiao workers are not included in these benefits
– overtime. Then, here comes Davide and he says that these are What happens if you enter into an agreement that there is
piece-rate workers and as such, they are entitled to night shift retention?
differential, holiday pay, service incentive leave, premium pay and 13 th Retention – normally, if you contract to construct something.
month pay. Of what he says, only one is correct – 13 th month pay. Magpakural ka – in-ani and design sa kural, isemento ang foundation, 3 ka
13th month pay is correct because it is not in the Labor Code. And 13 th hollowblock ang lubong, ispecify tanan, mao ni ang materiales. Unya, this
month pay is special. should be finished in 30 days. Unya, retention – 10% of the contracted
There is one type of pakiao worker that is entitled to 13 th month price.
pay – that is the piece-rate pakiao worker. The pakiao worker that is Pagkahuman ana, bayran nimo siya unya muretain ka ug 10%. After
paid by results is not entitled to 13 th month pay. I am talking of PD 30 days, una pa nimo pulihi ang 10% pag nasatisfy na nimo na way naliki.
851 and the further guidelines issued by Corazon Aquino. Unsa man na? That is independent contracting. Wa nay labor ana.
Sayop ni. That is already independent contracting. Once there are retentions,
materials, and Labor Code labor ra man na. Sudlan na gani ug lain, di na
Why are pakiao workers taken out? na Labor Code but independent contracting.
They are taken out because the amount of their pay is related not So, you have to be clear about what the legally significant facts are.
to the time that they put in but to the industry that they devote.
If you are a pakiao worker, you are not a time worker. The basis If it is not uniform, then it is not piece rate. It is task basis.
of your pay is not time. The basis of your pay is output. If it is piece-
rate, its uniform output. That is why it is a uniform rate per piece For instance, you are trader and you drive a rig (20 ft van). Ang mag-
because pare-pareho man na. guyod ana kay prime mover. Actually, prime mover applies to God only 
Now, from Davao to any point in Mindanao, driver ka and paid on a
What happens if you are paid piece rate and you are given per trip basis. Unsa man ka? Piece rate or task basis? The trouble is the
hours? trip is not standard. Naa man na silay taripa sa trip nila: Davao to Iligan,
You report at 8. You have break time at 12 for 1 hour. Then, mao ni ang taripa. Davao to Gen San, mao ni ang taripa. They are paid by
you are dismissed at 5. What happens? results. That is not piece rate.
Under Fair Labor Standards Act of the United States, you have Unya tagaan ka ug problem – nabuthan siya ug tire, kabuang siya
become a time worker. And you must be paid at least the minimum pangita mekaniko, natulog sa ilalom sa truck. Is he entitled to overtime?
wage, regardless of the amount you finish. How can he be entitled to overtime when he is already exempted under
Article 82? He cannot be paid overtime. He is not paid on an hourly basis.
Suppose you are given time and you are also given quota He is not a time worker. He is a payment by results worker. He is a pakiao
worker, based on the results.

10
That is very clear ha because there are no materials involved in mangutana if labor, labor exam man ni. That is not just a Labor exam, that
driving. It is just strictly more on the part of the driver. is the bar exam. You are tested as to whether your entire knowledge of law
8. Retail and Service Establishment with not more than 5 is adequate. So, you have to ask if this is a labor problem or not. This
employees as they are exempted to night shift differential might be an independent contracting problem. So, you have to examine
That is from the rules implementing the Labor Code, Book III, the elements.
Rule 2, Section 1. Once you have decided that this is a labor case, then, the next
This particular exemption is aimed at sari-sari stores, which opens question is: does this follow under the exceptions because this is question
very early in the morning unya gabii na sila gasara. of labor standards. When you are discussing about hours of work, rates of
But they must not be more than 5 employees. pay, vacation leave, 13th month pay – those are all labor standards.
A retail establishment is one that sells goods or commodities Unya mangita ka ug hain ang union dinhi? Wa man.
not for the purpose of resale but for purposes of use and/or Unsa man ni? Pakiao workers? Domestic? Naa kay check-off list ba.
consumption. That is a retail. Ug imo na jud ni gitun-an, balik balik na nimo, usa ra ka tan-aw, bagting
A service establishment is one that dispenses services for the dayon ka .. mao ni. Balika dayon ug tan-aw. The horizon works! If you
satisfaction of a particular need of the customer. have sufficient familiarity, then, you will know what to do.
When you offer for service, it is for the satisfaction of a customer. If you decided that it is not excluded, that’s when you go to the merits
of the case, after you have cleared these two preliminary questions.
Sometime ago, the great Senator Jose W. Diokno was made the And then, you have to watch out for so-called “red-herrings” because
examiner of Civil Law. One of the questions he asked in Civil Law is that is the standard way labor examiners fool their examinees by putting
this: here is a customer of a restaurant. He ordered oyster soup. The false landmarks.
oyster soup was served on his table steaming hot. He looked at the So and so a probationary worker failed to report to work on his first
oyster soup and it looked inviting. He straight away drove into the day and then, he worked on the second day. And he was made to work 12
oyster soup. There was a glimmer at the bottom of the bowl. He hours to compensate for his absence. Is he entitled to overtime since he is
scoop it up and saw that it was a pearl. As he was about to pick the a probationary worker?
pearl with his thumb and forefinger, the head waiter tapped him on his Probationary has something to do with tenure, nothing to do with
shoulder. He said that belongs to us. That is not yours. labor standards. Madakpan gani ka ana and mao na ang makahassle nimo,
Gibayran nako ni. Ako ni. Dili na imo, sa restaurant na. So, wa na, taob ka.
naglalis sila. The question: who has the better right to the pearl? Whether he is probationary or regular, the issue is is he a time worker?
When Diokno was asked what is the answer, Diokno said it all If he is a time worker, he is entitled to overtime. If he is not a time worker,
depends whether the restaurant is also a take-out restaurant. If it is a he is not entitled to overtime. That is the whole point.
take-out restaurant, it is not only a service establishment since it Those are called red-herrings meant to distract you.
caters to your nutritional need not to mention the need of your palette --
for good tasting food to your satisfaction. If you can buy orders and
have it packaged and brought out, flesh and bones of the fried chicken
together, that means that it is a retail establishment also, not just a
service establishment.
So, if it is also a retail establishment, then you have a right to the
unedible thing such as the pearl. That is the reasoning of Diokno.

A beauty parlor is a service establishment. Musobra na gani sa 5


kabuok ang magptul-id sa kulot, magputol sa tass, sobra gani na 5,
not covered.

A bakery is a retail establishment. A barber shop is a service


establishment. What happens if there are more than 5 barbers there?
(walay answer .. hehe .. )

Those are the problematic associated with this particular section

9. Health personnel of cities of at least 1M population or


establishments that are weighted (?) to be at least 100 bed
capacity
Even if the population is less than 1M, if the hospital you are
working for has 100 bed capacity, according to its license, then, you
are covered.
What is the particular difference of health personnel that are
covered? As to the work week. A work week is at least 6 consecutive
working day for the ordinary industrial, agricultural or commercial
worker. But for health personnel in cities of 1M or of at least 100 bed
capacity hospitals or health institutions, then, there work week is only
5 days.
Can they be made to work fro 6 days? YES, but their rate of pay
on the 6th day is 130%. There is a premium on their work on the 6 th
day.
The wording of the law is such that even the gardener of a
hospital with 100 bed or a hospital in a 1M population city is covered
by health personnel because in the enumeration, it is “other
employees”.

10. Fishermen crew


We are talking here of Section 45, PD 704 – The Fisheries Act of
1975. This group of workers are exempted from the overtime pay of 8
hour Labor law.
So if you are out at sea, deep-sea fishing, and you are made to
work more than 8 hours of your working day, you will be paid for the
excess hours. But you will not be paid overtime rate. You will be paid
straight time pay. That is the rule with respect to fishermen crew.
That is because of the specific provision of Section 45, PD 704,
which as far as I know has not been repealed.

We are through with the excluded and exempted employees.

(Sabi sa start sa lecture 11 group of workers, 10 lang man .. kasama


na iyong hindi niya namention na members of the family of the ER
who are dependent on him for support )

You are given a problem. The first thing that you have to
determine is: Is this Labor Code or not? That is the question that you
must assess. Ayaw tukod dayon! Ayaw paghuna-huna na ngano man
11