ANASTACIO

 VIANA  v.  ALEJO  Al-­‐LAGADAN   sufficed  to  characterize  him  as  an  employee  of  Viana.  The  Court  doesn’t  agree  with  
May  31,  1956/Concepcion,  J.   this.  
By  Cate  Alegre   • In   determining   the   existence   of   employer-­‐employee   relationship,   the  
  following   elements   are   generally   considered:   (1)   the   selection   and  
Summary   engagement   of   the   employee;   (2)   the   payment   of   wages;   (3)   the   power   of  
Alejandro   Al-­‐Lagadan’s   parents   wants   to   claim   compensation   under   the   Workmen’s   dismissal;   and   (4)   the   power   to   control   the   employees’   conduct   –   the   most  
Compensation   Act   alleging   that   Viana   was   their   son’s   employer.   SC   remanded   the   case   to   important  element  
the  Commission  to  elicit  further  facts  to  establish  the  ee-­‐er  relationship  in  this  case.   • Assuming   that   Alejandro’s   share   could   partake   the   nature   of   wages,   the   second  
  element  therefore  exists.  The  records  doesn’t  contain  any  specific  data  regarding  the  
Doctrine:   third  and  fourth  elements  
In   determining   the   existence   of   employer-­‐employee   relationship,   the   following   • For   the   first   element,   the   facts   are   insufficient   to   warrant   a   reasonable   conclusion.  
elements   are   generally   considered:   (1)   the   selection   and   engagement   of   the   According  to  Atty.  Morente  (lawyer  of  the  WCC),  the  crew  members  are  selected  and  
employee;  (2)  the  payment  of  wages;  (3)  the  power  of  dismissal;  and  (4)  the  power   engaged   by   the   patron   and   subject   to   his   control   and   may   be   dismissed   by   him.  
to  control  the  employees’  conduct  –  the  most  important  element   Viana  averred  that  a  contract  of  partnership  existed.  If  Alejandro  was  a  partner,  then  
  neither  Viana  nor  the  patron  can  control  or  dismiss  him.  
Facts    
• Petitioner   Anastacio   Viana   owned   the   fishing   sailboat   Magkapatid   and   Alejandro   Al-­‐ Case   was   remanded   to   the   Workmen’s   Compensation   Commission   for   further   evidence  
Lagadan  was  a  crew  member  of  the  said  boat.  On  September  3,  1948,  the  boat  sunk   and   findings   to   determine   the   employer-­‐employee   relationship   (who   selected   and  
as  a  consequence  of  a  collision  with  the  USS  Tingles,  a  US  Navy  vessel   engaged   the   services   of   the   crew;   if   selected   by   the   patron,   was   Viana   part   of   the  
• Respondents   Alejo   Al-­‐Lagadan   and   Filomena   Piga   (parents   of   Alejandro)   filed   a   decision;  could  Viana  refuse  to  accept  any  of  the  crew  members;  did  Viana  have  authority  
claim  for  compensation  under  Act  No.  3428   to  determine  the  work  conditions  and  who  could  dismiss  the  members)  
• February  23,  1953  –  a  referee  of  the  Workmen’s  Compensation  Commission  ordered  
Viana  to  pay  the  respondents  
• October   22,   1954   –   the   decision   was   affirmed   by   the   Workmen’s   Compensation  
Commissioner  
• Viana:    
1) The  gross  income  of  his  business  for  1947  was  less  than  P10,000  hence  the  case  
doesn’t  fall  under  the  purview  of  Act  No.  3428  
2) Alejandro   Al-­‐Lagadan   was,   at   the   time   of   his   death,   his   industrial   partner   and  
not  his  employee  
o The  owner  receives  ½  of  the  earnings  and  the  ½  is  divided  pro  rata  among  its  
members   (4   parts   to   the   patron   or   captain,   3   parts   to   the   piloto   or   next   in  
command,   1   ½   parts   to   the   wheelsman   and   1   part   each   for   the   crew  
members)  
 
Issues  
1. WON  the  case  falls  under  the  purview  of  Act  No.  3438    
2. WON  Al-­‐Lagadan  is  Viana’s  employee  –  REMANDED  
Held  
1. The  first  ground  raised  by  Viana  is  untenable.  
• Viana  did  not  invoke  this  before  the  rendition  of  the  Referee’s  decision    and  was  only  
made  when  he  sought  a  review  of  the  said  decision  by  the  Workmen’s  Compensation  
Commissioner.  
• The   non-­‐applicability   of   the   Act   is   a   matter   of   defense   which   cannot   be   availed   of  
unless  pleaded  in  the  employer’s  answer  to  the  claim  for  compensation  
 
2. Case   was   remanded   to   determine   the   employer-­‐employee   relationship  
existing  in  this  case  
• According   to   the   Referee,   as   well   as   the   Commissioner,   the   mere   fact   that  
Alejandro’s   share   n   the   understanding   could   be   reckoned   in   terms   of   money,  
Vda.  De  Cruz  vs.  Manila  Hotel    
April  30,  1957|  Bengzon.     RATIO:  
By:  Ian   • An  independent  contractor  is  one  who  in  rendering  services,  exercises  
  an   independent   employment   or   occupation   and   represents   the   will   of  
SUMMARY:     his  employer  only  as  to  the  results  of  his  work  and  not  as  to  the  means  
Tirso   Cruz1   and   his   orchestra   are   claiming   gratuity   benefits   from   Manila   Hotel   "whereby  it  is  accomplished"  
alleging   that   they   are   employees   of   the   hotel   entitled   to   the   same.     SC   ruled   that   • Factors   to   be   considered   are   whether   the   contractor   is   carrying   on   an  
Cruz   is   an   independent   contractor   so   there   is   no   er-­‐ee   relationship   between   independent  business  
him/them  and  the  Hotel  hence  they  are  not  entitled  to  gratuity.     o Whether  the  work  is  part  of  the  employer's  general  business;    
  o The  nature  and  extent  of  the  work;    
DOCTRINE:    Er-­‐ee  relationship  vs.  Independent  contractor   o The  skill  required;    
An   independent   contractor   is   one   who   in   rendering   services,   exercises   an   o The  term  and  duration  of  the  relationship;    
independent  employment  or  occupation  and  represents  the  will  of  his  employer   o the  right  to  assign  the  performance  of  the  work  to  another;    
only   as   to   the   results   of   his   work   and   not   as   to   the   means   "whereby   it   is   o the  power  to  terminate  the  relationship;    
accomplished"   o the   existence   of   a   contract   for   the   performance   of   a   specified  
    piece  of  work;    
FACTS:   o the  control  and  supervision  of  the  work;    
For   several   years   bandleader   Tirso   Cruz   and   his   orchestra   (hereafter   “Cruz   et   o the   employer's   powers   and   duties   with   respect   to   the   hiring,  
al.”)  have  furnished  music  to  the  Manila  Hotel  (hereafter  “Hotel”).   firing  and  payment  of  the  contractor's  servants;    
• May   22,   1954-­‐   Corp   owning   the   Hotel   gave   written   notice   to   its   o the  control  of  the  premises;    
employees  that  beginning  July  1,  1954,  the  Hotel  would  be  leased  to  the   o the  duty  to  supply  the  premises,  tools,  appliances,  material  and  
Bay  View  Hotel  and  those  employees  to  be  laid  off  would  be  granted  a   labor;  and    
separation   gratuity   computed   according   to   specified   terms   and   o the  mode,  manner,  and  terms  of  payment.''    
conditions.      
• Cruz     and   his   orchestra   claimed   gratuity   but   the   mngt   denied   their   In  the  case  at  bar:  
claim  saying  they  were  not  its  employees.     • By   Annex   1,   the   Hotel   contracted   or   engaged   the   “services   of   your  
• December   1954-­‐   Cruz   et   al.   instituted   action   before   the   CFI   of   Manila.   orchestra”   composed   of   fifteen   musicians   including   yourself   plus   Ric  
The   complaint   attached   a   copy   of   the   announcement   marked   as   “Annex   Cruz  as  vocalist"  at  P250  per  day,  said  orchestra  to  "play  from  7:30  p.m.  
A”.   to  closing  time  daily".    
o Defense-­‐  filed  Motion  to  Dismiss-­‐  alleged  that  Cruz  et  al.  are  not   • What   pieces   the   orchestra   shall   play,   and   how   the   music   shall   be  
its  employees  under  the  contract  marked  as  “Exhibit  1”  which   arranged   or   directed,   the   intervals   and   other   details—such   are   left   to  
was  submitted  to  the  court.     the  leader's  discretion.    
o Cruz  et  al.  are  not  GSIS  members.   • The  musical  instruments,  the  music  papers  and  other  paraphernalia  are  
• CFI-­‐   dismissed   the   complaint-­‐   Cruz   et   al.   had   no   cause   of   action   vs.   not  furnished  by  the  Hotel,  they  belong  to  the  orchestra,  which  in  turn  
defendant  because  they  were  not  employees.   belongs  to  Tirso  Cruz—  not  to  the  Hotel.    
• Appeal   directly   to   the   SC   involving   only   questions   of   law.   (During   the   • The   individual   musicians,   and   the   instruments   they   handle   have   not  
pendency  of  the  case  Cruz  died  so  he  was  substituted  by  his  legal  heirs.)   been   selected   by   the   Hotel.   It   reserved   no   power   to   discharge   any  
  musician.    
ISSUE/HELD:   • How  much  salary  is  given  to  the  individual  members  is  left  entirely  to  
WON  Cruz  et  al.  are  employees  of  the  Hotel  hence  entitled  to  gratutity.   "the  orchestra"  or  the  leader.  Payment  of  such  salary  is  not  made  by  the  
No.  Tirso  Cruz  was  not  an  employee  but  an  independent  contractor  furnishing   Hotel  to  the  individual  musicians,  but  only  a  lump-­‐sum  compensation  is  
the  service  of  his  orchestra  to  the  Hotel.     given  weekly  to  Tirso  Cruz.  
 
                                                                                                                         
 
1Not   sure   if   the   actor   pero   baka   hindi   kasi   di   ba   may   the   III   ung   actor   (and   1957  
case  to)?  (sorry  lang  kwenta  ng    footnote  J)    
LVN  Pictures  v.  Philippine  Musicians  Guild   industrial   unrest.   The   causes   of   strikes   and   industrial   unrest  
January  28,  1961  |  Concepcion,  J.   (employers’   refusal   to   bargain   collectively   and   workers’  
By:  Jadd   inability  to  successfully  bargain)  are  addressed  by  encouraging  
Topical  issue  is  discussed  under  Ratio  1)E-­‐F.   collective   bargaining   and   protecting   freedom   of   association  
  and   selection   of   bargaining   representatives   regarding  
SUMMARY:   employment  terms  and  conditions.  
The   Philippine   Musicians   Guild   (FFW)   filed   a   petition   for   certification   election.   2. On  the  applicability  of  labor  laws  to  other  kinds  of  employees:  
The  CIR  decided  in  the  musicians’  favor.  The  SC  affirmed  the  CIR,  applying  the   The   labor   laws   may   also   apply   to   other   kinds   of   employees  
Control  Test  and  finding  that  the  musicians  are  employees.   such   as   independent   contractors,   not   just   employees   in   the  
  traditional  sense.  
DOCTRINE:   3. On  the  need  to   consider   economic   facts:  Economic  facts  should  
Control   Test:   An   employer-­‐employee   relationship   exists   where   the   person   for   also   be   taken   into   account,   in   addition   to   technical   and   legal  
whom  the  services  are  performed  reserves  a  right  to  control  not  only  the  end  to   classifications,   to   give   a   broad   definition   to   “employees”   and  
be  achieved  but  also  the  means  to  be  used  in  reaching  such  end.  (Citing  Alabama   “employers”   in   situations   where   economic   relationships   do   not  
Highway  Express  Co.  v.  Local  612)   clearly  fall  under  these  categories.  (Court  in  cited  case  gave  the  
  example  of  contractualization,  where  “’employees’  are  brought  
FACTS:   into   an   economic   relationship   with   ‘employers’   who   are   not  
• The   Philippine   Musicians   Guild   (FFW)   petitioned   the   CIR   for   their  ‘employers.’”)  
certification   as   the   sole   and   exclusive   bargaining   agency   for   all   C) The   CIR   also   cited   the   case   of   Connor   Lumber   Co.,   stating   that   the  
musicians   working   in   LVN,   Sampaguita,   and   Premiere.   (95%   of   the   statutory   definition   of   “employee”   has   a   wide   scope.   “Any  
musicians  were  part  of  the  PMG.)   employee”  refers  to  employees  in  the  conventional  as  well  as  legal  
• Only  LVN  and  Sampaguita  appealed.   sense  but  excludes  those  expressly  excluded  by  statute.  
  D) Applying   these   cases   to   the   Philippine   setting   regarding   the  
ISSUES/HELD:   statutory  definition  of  employees:  
1) WON  the  musicians  are  employees  of  the  companies  –  YES   1. On  the  Industrial  Peace  Act’s  purposes:  
2) WON  a  petition  for  certification  election  (PCE)  can  be  entertained  when   1) Eliminate   causes   of   industrial   unrest   by   protecting   self-­‐
the  employer-­‐employee  relationship  is  contested  –  YES   organization  for  collective  bargaining;  
3) WON   there   must   be   an   allegation   that   the   members   of   the   Guild   2) Promote  industrial  peace  through  collective  bargaining  
constitute  a  proper  bargaining  unit  –  NO   2. The   CIR   states   that   the   employment   contract   alone   does   not  
  determine  whether  one  is  a  worker,  rather,  whether  the  law’s  
RATIO:   purpose   can   be   effected   by   securing   their   guaranteed   rights  
1) Yes,   the   musicians   are   company   employees.   (The   SC   agreed   with   the   and  protection.  
CIR’s   decision.)   The   CIR   referred   to   American   jurisprudence   which   E) On  the  Control  Test:  
looked   into   the   purpose   of   the   labor   laws   in   relation   to   defining   1. The   test:   Where   the   person   for   whom   the   services   are  
employers   and   employees.   In   particular,   the   Control   Test   was   relied   performed  reserves  the  right  to  control  not  only  the  end  to  be  
upon.  This  test  was  then  applied  to  the  instant  case,  and  it  was  held  that   achieved,   but   also   the   manner   and   means   to   be   used   in  
based  on  the  circumstances,  the  musicians  are  considered  employees.   reaching   the   end.   (Citing   United   Insurance   Company   and  
A) On   the   Court’s   basis:   The   CIR   referred   to   American   jurisprudence   Alabama  Highway  Express  Co.  v.  Local  612)  
since   the   Industrial   Peace   Act   (RA   875,   the   Labor   Code’s   2. On   the   decisive   nature   of   the   test   in   determining   employer-­‐
predecessor)   is   substantially   the   same   as   the   Wagner   Act   and   the   employee   relations:   Such   a   relationship   was   held   to   exist  
Taft-­‐Hartley  Law.   between  management  and  workers  despite  the  intervention  of  
B) The   CIR   discussed   the   case   of   NLRB   v.   Hearts   Publication   (1944):   an   independent   contractor   who   had   and   exercised   the   power  
The   term   “employee”   should   be   understood   in   the   context   of   the   to  hire  and  fire.  (Citing  Gilchrist  Timber  Co.)  
law  and  the  facts  in  the  economic  relationship.   3. On   the   application   of   the   Control   Test   where   there   are   persons  
1. On   the   purpose   of   the   labor   laws:   These   facilitate   the   flow   of   working   under   independent   contractors:   Where   the  
commerce   by   minimizing   obstructions   such   as   strikes   and   independent   contractors   have   sufficient   authority   over   the  
 persons   working   under   their   immediate   supervision   to   3. Philippine   Manufacturing   Co.   v.   Vda.   De   Geronimo   involved  
warrant   their   exclusion   from   the   unit,   the   employees   working   casual,   not   integral   work   (painting   the   tank   of   a   soap  
under   the   independent   contractors’   supervision   are   included   manufacturer.)  
but  the  contractors  themselves  are  excluded.  (Citing  Connor)   4. Vda.  De  Cruz  v.  The  Manila  Hotel  Co.  involved  the  GSIS  law.  
4. Another   example   of   the   application   of   the   Control   Test   in   2) Yes,   a   petition   for   certification   election   can   be   entertained   when   the  
relation   to   independent   contractors:   Despite   being   called   employer-­‐employee  relationship  is  contested.  
independent   contractors,   they   will   be   considered   employees   A) There  is  no  basis  for  saying  otherwise.  
where   the   employer’s   control   indicates   that   they   are   really   3) No,  an  allegation  that  the  Guild  members  constitute  a  proper  bargaining  
employees.  (Citing  John  Hancock  Insurance  Co.)   unit  is  not  necessary.  
F) Applying  these  concepts  to  the  case  of  the  musicians:   A) PCEs   are   investigations   of   a   non-­‐adversarial,   fact-­‐finding   character.  
1. The  musicians’  work  is  an  integral  part  of  the  motion  picture:   The   investigating   agency   is   a   disinterested   investigator   regarding  
1) The   producer   chooses   the   musicians   from   the   music   the  employees’  choice  of  representative.  
director.   The   producer   and   director   agree   on   a   price,   and   B) The   companies   actually   contest   whether   the   musicians   are  
the   musical   director   engages   his   own   men   and   pays   their   employees.  
compensation.   C) The  determination  of  this  issue  is  discretionary,  and  generally  final.  
2) The   musicians   are   called   for   recording   through   call   slips   in   (Citing  NLRB  v.  May  Dept.  Store  Co.)  
the   company’s   name,   showing   details   such   as   the   1. Exception:   Where   there   is   arbitrariness   or   caprice.   (Citing  
musician’s  name,  instrument,  date,  time,  place  of  pickup.   Marshall  Field  &  Co.  v.  NLRB)  
3) The   company   provides   the   studio,   transportation,   and  
dinner.  
4) It   is   the   motion   picture   director   (a   company   employee)  
who  supervises  the  recordings  and  tells  them  what  to  do  in  
detail.   He   supervises   all   the   action,   including   the  
appearance  of  musicians  in  scenes.  
2. The  companies  have  control  over  the  musicians:  
1) They  call  the  musicians  through  company  call  slips;  
2) They  arrange  schedules  in  the  studio  for  recording;  
3) They  furnish  transportation  and  meals  to  the  musicians;  
4) They   supervise   and   direct   in   detail   the   musicians’  
performance   through   the   motion   picture   director,   to   suit  
the  music  to  the  picture.  
G) The  SC  thinks  that  the  CIR  is  correct,  and  that  its  decision  is  in  line  
with  Maligaya  Ship  Watchmen  Agency  v.  Associated  Watchmen  and  
Security   Union   (1958).   The   argument   for   a   relationship   of  
independent   contractors   was   even   stronger   in   that   case,   since   the  
third  parties  with  whom  the  management  and  workers  contracted  
with  were  registered  and  licensed  to  engage  in  the  ship  watchman  
business.  
H) The  cases  cited  by  the  companies  were  not  applicable.  
1. Sunripe   Coconut   Product   Co.   v.   CIR:   Even   though   they   were  
employed   as   piece-­‐workers   under   the   “pakiao”   system,   they  
were  required  to  ensure  that  the  nuts  are  pared  whole  or  that  
not  much  meat  is  wasted.  There  was  a  limitation  or  control  as  
to  the  means  in  accomplishing  the  service.  
2. Viana   v.   Al-­‐Lagadan   did   not   settle   the   relationship   because   it  
was  remanded  for  further  evidence.  
Torillo  v.  Leogardo   • By   virtue   of   a   motion   to   quash   filed   by   Aberdeen   Court,   a   restraining  
May  27,  1991  |  Fernan,  CJ.   order   was   issued   by   the   Ministry   of   Labor-­‐NCR   enjoining   the   sheriff  
By:  Kiko   from   proceeding   with   the   auction   sale.   The   restraining   order   was  
  eventually  recalled.  
(No  discussion  on  employer-­‐employee  relationship.    Baka  nagkamali  si  Sir  ng  citation.)   • Upon  appeal  to  the  Office  of  the  Minister  of  Labor,  the  restraining  order  
SUMMARY:  Torillo  invited  his  co-­‐employees  for  a  night  out  to  celebrate  his  birthday.  
was   reinstated   with   the   clarification   that   the   order   does   not   include  
Aberdeen  court  requested  its  employees  to  refrain  from  going  as  the  following  day  was  a  
working  day,  Despite  such  orders,  Torillo  pushed  through  with  the  activity  inspite  of  
backwages.    
warnings  from  Aberdeen  Court.  When  Torillo  reported  for  work  the  next  day,  he  was   • Torillo   filed   a   motion   for   reconsideration   was   denied.   Hence,   this  
informed  that  he  is  dismissed  from  his  employment  for  having  defied  Aberdeen  Court’s   recourse  by  Torillo.  
request.  The  dismissal  was  found  illegal  and  Torillo  was  awarded  separation  pay  and    
backwages.  A  clarificatory  order  was  issued  stating  that  the  award  should  not  include   ISSUES/HELD:  
backwages.   WON   backwages   should   be   awarded?   Yes,   an   illegally   dismissed   employee  
  should  be  awarded  both  backwages  and  separation  pay.  
DOCTRINE:  The  clarification  that  the  affirmative  relief  of  backwages  is  available    
only  where  reinstatement  is  ordered  is  erroneous.  Article  279  of  the  Labor  Code   RATIO:  
provides  that  "an  employee  who  is  unjustly  dismissed  from  work  shall  be   Preliminarily,  it  must  be  stressed  that  the  illegality  of  petitioner's  dismissal  is  a  
entitled  to  reinstatement  without  loss  of  seniority  rights  and  other  privileges   matter  long  settled.    The  finding  of  illegality  of  dismissal  having  
and  to  his  full  backwages."   thus  attained  finality,  petitioner  now  questions  the  scope  and  extent  of  the  
  reliefs  granted  to  him  by  public  respondent.  
   
FACTS:   The   clarification   that   the   affirmative   relief   of   backwages   is   available   only   where  
• Valentino   Torillo   alias   “Lady   Valerie”   was   employed   as   an   organist   by   reinstatement  is  ordered  is  erroneous.  
Aberdeen   Court   with   a   daily   compensation   of   P115.00   for   a   five   hour    
work   a   day.   He   invited   his   co-­‐employees   for   a   night   out.   Aberdeen   Article  279   of  the  Labor  Code  provides  that  "an  employee  who  
Court,   through   its   floor   manager,   objected   to   such   activity,   requesting   is  unjustly  dismissed  from  work  shall  be  entitled  to  reinstatement  without  loss  
its   employees   to   refrain   from   attending   the   affair   because   the   following   of  seniority  rights  and  other  privileges  and  to  his  full  backwages."  
day   was   a   working   day.   Nonetheless,   Torillo   pushed   through   with   his   Backwages  in  general  are  granted  on  grounds  of  equity  for  earnings  which  a  
birthday  celebration.   worker  or  employee  has  lost  due  to  his  illegal  dismissal.   Reinstatement,  on  
• Torillo   reported   for   work   the   next   day.   Aberdeen   Court   informed   the  other  hand,  means  restoration  to  a  state  of  condition  from  which  one  had  
petitioner   that   he   was   being   dismissed   from   his   employment   effective   been  removed  or  separated.  
that  the  same  day  for  having  defied  Aberdeen  Court’s  order.    
• Torillo   filed   with   the   Ministry   of   Labor   and   Employment   a   complaint   Backwages  and  reinstatement  are  two  reliefs  given  to  an  illegally  dismissed  
against   Aberdeen   Court   for   illegal   dismissal   with   prayer   for   employee.    They  are  separate  and  distinct  from  each  other.    However,  in  the  
reinstatement   with   backwages,   including   payment   of   his   unpaid   wages,   event  that  reinstatement  is  no  longer  possible,  separation  pay  is  awarded  to  
holiday   pay   and   premium   pay.   Aberdeen   Court   justified   Torillo’s   the  employee.    Thus,  the  award  of  separation  pay  is  in  lieu  of  reinstatement  
dismissal   claiming   that   he   abandoned   his   work   in   failing   to   report   after   and  not  of  backwages.    In  other  words,  an  illegally  dismissed  employee  is  
his  birthday  celebration.   entitled  to  (1)  either  reinstatement,  if  viable,  or  separation  pay  if  reinstatement  
• Director   Estrella   of   the   Ministry   of   Labor   ruled   that   the   theory   of   is  no  longer  viable  and  (2)  backwages.  
abandonment   of   work   was   without   legal   and   factual   basis   and   found    
that   the   dismissal   was   illegal.   Seven   years   later,   the   appeal   of   Aberdeen   In  the  light  of  the  above  rulings  of  this  Court,  petitioner,  by  reason  of  his  illegal  
Court  was  dismissed.   dismissal  is  entitled  to  both  separation  pay  and  backwages.    However,  the  
• An   urgent   motion   for   execution   was   filed   by   Torillo.   This   was   granted   amount  of  backwages  shall  be  based  on  the  Mercury  Drug  Rule  which  limits  
and   Aberdeen   court   was   ordered   to   pay   the   total   amount   of   P280K,   backwages  of  illegally  dismissed  employees  to  an  amount  equivalent  to  their  
representing  backwages,  legal  holiday  pay,  separation  pay,  and  unpaid   wages  for  three  (3)  years,  without  qualification  and  deduction.    The  Court  has  
wages.   adopted  the  practice  of  fixing  the  amount  of  backwages  at  a  reasonable  level  
without  qualification  and  deduction  so  as  to  relieve  the  employees  from  proving  
their  earnings  during  their  layoffs  and  the  employer  from  submitting  counter  
proofs  and  thus  obviate  the  twin  evils  of  idleness  on  the  part  of  the  employees  
and  attrition  and  undue  delay  in  satisfying  the  award  on  the  part  of  the  
employer.    This  practice  has  been  hailed  as  a  realistic,  reasonable  and  mutually  
beneficial  solution.    An  award  of  backwages  equivalent  to  three  years  (where  
the  case  is  not  terminated  sooner)  serves  as  the  base  figure  for  such  awards  
without  deduction.  
 
With  regards  to  petitioner's  separation  pay  which  was  awarded  to  him  in  lieu  of  
reinstatement,  he  shall  receive  the  amount  equivalent  to  one  month  
wage/salary  for  every  year  of  service,  including  the  three-­‐year  period  in  which  
backwages  are  awarded.    
 
Petitioner  Valentino  Torillo  was  illegally  dismissed  in  1978.    This  case  has  been  
pending  for  almost  thirteen  (13)  years.    In  the  interest  of  justice  and  equity  as  
well  as  to  avoid  any  further  ambiguities,  this  Court  shall  fix  the  exact  amount  
due  petitioner.    Thus,  based  on  the  records  of  the  case,   [30]    we  hold  that  the  
total  amount  due  to  petitioner  is  P146,255.37.  
Legend  Hotel  v.  Hernani  S.  Realuyo   1998   by   Christine   Velazco,   restaurant   manager,   for   the   increase   of   his  
18  July  2012  |  Bersamin,  J.   remuneration.  
By:  Jocs  Dilag    
  b. WAGES  -­‐  Legend  Hotel:  Remunerations  were  talent  fee  not  included  in  LC  
SUMMARY:   definition  of  wages    
The   Pianist.   Joey   was   a   pianist   in   Legend   Hotel   for   almost   7years   until   he   was   SC:  The  remuneration  he  receives  (P400  or  P750)  denominated  as  talent  
canned   because   of   alleged   cost-­‐cutting   measure   by   the   latter.   Is   Joey’s   fees   was   fixed   on   the   basis   of   his   talent   and   skill   and   the   quality   of   the  
remuneration   denominated   as   talent   fee   included   in   LC   definition   of   “wages”?   music  he  played  during  the  hours  of  performance  each  night,  taking  into  
Yes,   whatever   ER   calls   it,   it   is   still   included   in   the   sense   and   context   of   LC   account   the   prevailing   rate   for   similar   talents   in   the   entertainment  
definition  of  wages.   industry.   Remuneration   even   though   denominated   as   talent   fee   is  
  included  in  the  term  “wages”  provided  in  A97(f)2  of  Labor  Code.  Clearly,  
FACTS:   respondent   received   compensation   for   the   services   he   rendered   as   a  
Joey   R.   Roa   (stage   name)   worked   as   a   pianist   at   the   Legend   Hotel’s   Tanglaw   pianist   in   petitioner’s   hotel.   Hotel   cannot   use   the   service   contract   to   rid  
Restaurant   from   September   1992   with   an   initial   rate   of   P400.00/night   (later   itself  of  the  consequences  of  its  employment  of  respondent.  
increased  to  P750)  that  was  given  to  him  after  each  night’s  performance.  During    
his  employment,  he  could  not  choose  the  time  of  performance,  which  had  been   c. DISMISSAL   -­‐   The   memorandum   informing   Joey   of   the   discontinuance   of  
fixed   from   7:00   pm   to   10:00   pm   for   3  -­‐   6   times/week.   He   added   that   the   Legend   his   service   because   of   the   present   business   or   financial   condition   of   hotel  
Hotel’s  restaurant  manager  had  required  him  to  conform  with  the  venue’s  motif   showed  that  the  latter  had  the  power  to  dismiss  him  from  employment  
and   that   he   had   been   subjected   to   the   rules   on   employees’   representation    
checks  and  chits,  a  privilege  granted  to  other  employees.   d. CONTROL  –  He  could  not  choose  the  time  and    place  of  his  performance,  
9  July  1999:  The  management  had  notified  him  that  as  a  cost-­‐cutting  measure,   he’s   sometimes   required   to   perform   only   Tagalog   songs   or   music   or   to  
his  services  as  a  pianist  would  no  longer  be  required  effective  30  July.  Thus,  he   wear   barong   Tagalog   to   conform   to   the   Filipiniana   motif,   and   he   was  
filed   complaint   for   ULP,   constructive   illegal   dismissal,   underpayment   /   subjected   to   the   rules   on   employees’   representation   check   and   chits,   a  
nonpayment   of   premium   pay   for   holidays,   separation   pay,   service   incentive   privilege  granted  to  other  employees.  
leave  pay  and  13th  month  pay.    
Hotel:  He’s  just  a  talent  not  an  employee   Hotel’s  argument:  He  only  works  for  3  hours/day,  thus  he’s  not  an  employee  
LA:  Employer-­‐Employee  relationship  exists;     SC:   In   providing   that   the   "   normal   hours   of   work   of   any   employee   shall   not  
NLRC:  No  ER-­‐EE  relationship;     exceed   eight   (8)   hours   a   day,"   Article   83   of   the   Labor   Code   only   set   a  
CA:  Reinstated  LA   maximum   of   number   of   hours   as   "normal   hours   of   work"   but   did   not  
  prohibit  work  of  less  than  eight  hours.    
ISSUES/HELD:      
WON   Joey   was   an   employee   of   Legend.   YES,   all   four   requisites   of   ER-­‐EE   WRT  cause  of  termination  
relationship  are  present.   The   reason   given   by   Legend   Hotel   was   retrenchment   due   to   business   losses.  
WON   the   fact   that   he   doesn’t   work   for   8   hours   negates   the   ER-­‐EE     However,   in   termination   cases   the   burden   of   proving   that   the   termination   is  
relationship.  NO,  Labor  Code  only  set  a  maximum  number  of  hours  as  “normal   valid   lies   with   the   employer.   Here,   they   didn’t   even   try   to   submit   evidence   to  
work  hours”  (8hrs)  but  did  not  prohibit  work  of  less  than  8  hours.   prove   their   claim.   For   failing   to   substantiate   their   claim   with   substantial  
  evidence,  the  Ct  said  that  the  retrenchment  wasn’t  valid.  
If  he  is  an  employee,  whether  he  was  validly  terminated.  NO,  retrenchment    
was  not  valid  for  failing  to  prove  that  such  was  necessary  due  to  business  losses  
                                                                                                                           
RATIO:   2XXX wage paid to any employee shall mean the remuneration or earnings, however designated,
WRT  ER-­‐EE  Relationship   capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece,
The  Ct  resolved  this  issue  by  enumerating  the  requisites  for  er-­‐ee  relationship   or commission basis, or other method of calculating the same, which is payable by an employer to
to  be  established:   an employee under a written or unwritten contract of employment for work done or to be done,
or for services rendered or to be rendered, and includes the fair and reasonable value, as
a. SELECTION   –   The   hotel   actually   wielded   the   power   of   selection   determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished
evidenced   by   the   express   written   recommendation   dated   January   12,   by the employer to the employee.
Javier  v.  Fly  Ace  Corp   b) In   December   2007,   Javier   was   contracted   employee   Mr.   Ong,   as   extra  
February  15,  2012  |  Mendoza,  J.   helper  on  a  pakyaw  basis  at  an  agreed  rate  per  trip.    
By:  Monica   c) Mr.   Ong   contracted   Javier   roughly   5   to   6   times   only   in   a   month  
  whenever  the  vehicle  of  its  contracted  hauler,  Milmar  Hauling  Services,  
SUMMARY:   was   not   available.   On   April   30,   2008,   Fly   Ace   no   longer   needed   the  
Javier   filed   a   complaint   for   illegal   dismissal   against   Fly   Ace   before   the   NLRC   services  of  Javier.    
alleging   that   he   was   a   regular   employee   working   as   a   stevedore/pahinante    
when   he   was   terminated   without   notice.   Fly   Ace   denied   that   Javier   was   its   Fly   Ace   denied   that   Javier   was   its   employee   and   insisted   that   there   was   no  
employee  because  he  was  only  contracted  on  a  “pakyaw”  basis.   illegal   dismissal.   It   submitted   a   copy   of   its   agreement   with   Milmar   Hauling  
  Services   and   copies   of   acknowledgment   receipts   evidencing   payment   to   Javier  
DOCTRINE:  (4-­‐fold  Test)   for  his  contracted  services  bearing  the  words,  “daily  manpower  (pakyaw/piece  
Before   a   case   for   illegal   dismissal   can   prosper,   an   employer-­‐employee   rate  pay)”  and  the  latter’s  signatures/initials.  
relationship  must  first  be  established  by  the  petitioner  by  substantial  evidence.    
  The  LA  dismissed  the  complaint  and  said  that  Javier  failed  to  present  proof  (ID,  
The   burden   lies   on   the   petitioner   to   pass   the   well-­‐settled   tests   to   determine   the   document  of  his  receipt  of  benefits  accorded  to  regular  employees)  that  he  was  
existence   of   an   employer-­‐employee   relationship,   viz:     (1)   the   selection   and   a   regular   employee   of   Fly   Ace,   and   that   since   there   is   a   regular   hauler   to   deliver  
engagement   of   the   employee;   (2)   the   payment   of   wages;   (3)   the   power   of   Fly   Ace’s   products,   more   weight   was   given   to   the   claim   that   Javier   was  
dismissal;   and   (4)   the   power   to   control   the   employee’s   conduct.   Of   these   contracted  on  “pakyaw”  basis.  
elements,   the   most   important   criterion   is   whether   the   employer   controls   or   has    
reserved  the  right  to  control  the  employee  not  only  as  to  the  result  of  the  work   The   NLRC   ruled   for   Javier   and   said   that   a   pakyaw-­‐basis   arrangement   did   not  
but  also  as  to  the  means  and  methods  by  which  the  result  is  to  be  accomplished.   preclude  the  existence  of  employer-­‐employee  relationship,  and  that  Javier  was  a  
  regular  employee  of  Fly  Ace  because  there  was  reasonable  connection  between  
FACTS:   the   particular   activity   he   performed   as   a   pahinante   in   relation   to   the   usual  
Javier  filed  a  complaint  before  the  NLRC  for  underpayment  of  salaries  and  other   business  or  trade  of  the  employer.  
labor  standard  benefits.    
  CA  annulled  the  NLRC  ruling  and  said  that  it  is  incumbent  upon  Javier  to  prove  
Javier  alleged  that:   the   employee-­‐employer   relationship   by   substantial   evidence,   but   he   failed   to  
a) he   was   an   employee   of   Fly   Ace   since   September   2007,   performing   discharge   his   burden.   The   non-­‐issuance   of   a   company-­‐issued   identification   card  
various  tasks  at  the  respondent’s  warehouse  except  when  he  would  be   to  Javier  supports  Fly  Ace’s  contention  that  Javier  was  not  its  employee.  
ordered  to  accompany  the  company’s  delivery  vehicles,  as  pahinante;      
b) he  reported  for  work  from  Monday  to  Saturday  from  7AM  to  5PM;     ISSUES/HELD:    
c) he   was   never   issued   an   identification   card   and   payslips   by   the   WON  Javier  was  regular  employee  of  Fly  Ace.  NO,  onus  probandi  was  on  Javier  
company;     and  he  failed  to  provide  substantial  evidence.  
d) on  May  6,  2008,  he  reported  for  work  but  he  was  no  longer  allowed  to    
enter  the  company  premises  by  the  security  guard  upon  the  instruction   RATIO:  
of  Ruben  Ong,  his  superior.  He  later  found  out  that  it  was  related  to  Mr.   Before   a   case   for   illegal   dismissal   can   prosper,   an   employer-­‐employee  
Ong  courting  his  daughter.   relationship   must   first   be   established.   Existence   of   an   employer-­‐employee  
e) thereafter,  Javier  was  terminated  from  his  employment  without  notice.     relationship   is   essentially   a   question   of   fact.   The   petitioner   needs   to   show   by  
  substantial   evidence   that   he   was   indeed   an   employee   of   the   company   against  
Javier  presented  an  affidavit,  subscribed  before  the  labor  arbiter,  of  one  Bengie   which   he   claims   illegal   dismissal.   "Whoever   claims   entitlement   to   the   benefits  
Valenzuela  who  alleged  that  Javier  was  a  stevedore  or  pahinante  of  Fly  Ace  from   provided   by   law   should   establish   his   or   her   right   thereto".   Javier   failed   to  
September  2007  to  January  2008.     adduce  substantial  evidence  as  basis  for  the  grant  of  relief.  
   
Fly  Ace  averred  that:   All  that  Javier  presented  were  his  self-­‐serving  statements  purportedly  showing  
a) it  was  engaged  in  the  business  of  importation  and  sales  of  groceries.   his   activities   as   an   employee   of   Fly   Ace.   Clearly,   Javier   failed   to   pass   the  
substantiality  requirement  to  support  his  claim.    
  
The   lone   affidavit   executed   by   one   Bengie   Valenzuela   was   unsuccessful   in  
strengthening  Javier’s  claim  that  he  was  a  regular  employee.  In  said  document,  
all   Valenzuela   attested   to   was   that   he   would   frequently   see   Javier   at   the  
workplace  where  the  latter  was  also  hired  as  stevedore.  
 
The  Court  is  of  the  considerable  view  that  on  Javier  lies  the  burden  to  pass  the  
well-­‐settled   tests   to   determine   the   existence   of   an   employer-­‐employee  
relationship,   viz:   (1)   the   selection   and   engagement   of   the   employee;   (2)   the  
payment  of  wages;  (3)  the  power  of  dismissal;  and  (4)  the  power  to  control  the  
employee’s   conduct.   Of   these   elements,   the   most   important   criterion   is   whether  
the   employer   controls   or   has   reserved   the   right   to   control   the   employee   not  
only  as  to  the  result  of  the  work  but  also  as  to  the  means  and  methods  by  which  
the  result  is  to  be  accomplished.  
 
Javier  could  not  submit  competent  proof  that  Fly  Ace  engaged  his  services  as  a  
regular   employee;   that   Fly   Ace   paid   his   wages   as   an   employee,   or   that   Fly   Ace  
could   dictate   what   his   conduct   should   be   while   at   work.   In   other   words,   Javier’s  
allegations  did  not  establish  that  his  relationship  with  Fly  Ace  had  the  attributes  
of   an   employer-­‐employee   relationship   on   the   basis   of   the   above-­‐mentioned  
four-­‐fold   test.   All   that   Javier   laid   down   were   bare   allegations   without  
corroborative  proof.  
 
Fly  Ace  does  not  dispute  having  contracted  Javier  and  paid  him  on  a  "per  trip"  
rate  as  a  stevedore,  albeit  on  a  pakyaw  basis.  The  Court  cannot  fail  to  note  that  
Fly  Ace  presented  documentary  proof  that  Javier  was  indeed  paid  on  a  pakyaw  
basis  per  the  acknowledgment  receipts  admitted  as  competent  evidence  by  the  
LA.   Unfortunately   for   Javier,   his   mere   denial   of   the   signatures   affixed   therein  
cannot  automatically  sway  us  to  ignore  the  documents  because  "forgery  cannot  
be  presumed  and  must  be  proved  by  clear,  positive  and  convincing  evidence  and  
the  burden  of  proof  lies  on  the  party  alleging  forgery."  
 
One   final   note.   The   Court’s   decision   does   not   contradict   the   settled   rule   that  
"payment  by  the  piece  is  just  a  method  of  compensation  and  does  not  define  the  
essence  of  the  relation."  Payment  on  a  piece-­‐rate  basis  does  not  negate  regular  
employment.  "The  term  ‘wage’  is  broadly  defined  in  Article  97  of  the  Labor  Code  
as   remuneration   or   earnings,   capable   of   being   expressed   in   terms   of   money  
whether   fixed   or   ascertained   on   a   time,   task,   piece   or   commission   basis.  
Payment  by  the  piece  is  just  a  method  of  compensation  and  does  not  define  the  
essence  of  the  relations.  Nor  does  the  fact  that  the  petitioner  is  not  covered  by  
the   SSS   affect   the   employer-­‐employee   relationship.   However,   in   determining  
whether   the   relationship   is   that   of   employer   and   employee   or   one   of   an  
independent  contractor,  each  case  must  be  determined  on  its  own  facts  and  all  
the  features  of  the  relationship  are  to  be  considered.