LABOR LAW 2 Test to Determine the Existence of EE Rel

Test to Determine the Existence of EE Rel Hacienda Leddy/Ricardo Gamboa Jr v. Villegas GR 179654, 2014 PERALTA, J.
Legend Hotel v Realuyo GR 153511, 2012 BERSAMIN, J F:
F: 1. Paquito Villegas performed sugar farming job and other “odd jobs” since 1960
1. Hernani S. Realuyo (Joey R. Roa) was a pianist in the Tanglaw Restaurant of for P45/day and in coconut lumber for P34/day. He was allowed to erect a
Legend Hotel. He received a “talent fee” of P400/night which was raised to house in a small portion of the land of Hacienda Leddy (former name H. Teresa
P750. He worked from 7pm to 10pm for 3 to 6 times of performance per night. owned by Gamboa Sr.).
2. Because of cost cutting he was dismissed. Realuyo filed for Illegal Dismissal. 2. In 1993, Ricardo Gamboa Jr (Er) fired Villegas without any notice or reason.
3. LT of Er: no EE rel. Reasons: Villegas filed for illegal dismissal.
(1) service contract states no EE rel 3. LT of Er:
(2) “talent fee” is received not “salary.” (1) He was paid on piece-rate basis without supervision
(3) no power of control to means and methods. (2) His job is not usually necessary and desirable, hence not a regular Ee
4. LA: dismissed complaint. Reason see #3 (3) Villegas stopped working in 1992, so he was not dismissed.
5. NLRC: affirmed LA (4) He only worked in Feb 3 and Feb 11, 1993
6. CA: set aside LA and NLRC. Reason: 4. LA: there was illegal dismissal
(1) Power of Control—supervised and controlled what and when to perform. 5. NLRC: set aside LA
(2) he is regular Ee due to sheer length of service, he had been converted 6. CA: set aside LA; reinstated LA
from contractual to regular Ee. 7. SC: affirmed CA
7. SC: CA is affirmed. I: WON There is Er-Ee Relationship. YES
I: WON there is EE Rel. YES (in the case there are 3 issues (1) EE Rel (2) Validity
of Termination (3) procedural: Petition for certiorari) R:
R: 1. There is Er-Ee Relationship.
1. There is Er-Ee Relationship a. Petitioner did not categorically deny its existence. It only denied that
(1) the selection and Through service contract both parties entered Villegas was a “regular Ee” only as “casual Ee”.
engagement of the employee; 2. He was a “regular” Ee.
a. Basis: Art. 280
(2) the payment of wages; Talent fee is within the term “wage”
(1) engaged to perform activities which are necessary or desirable in
(3) the power of dismissal Evidenced by memorandum informing the usual business or trade of the employer; and
respondent of the discontinuance of his service (2) those casual employees who have rendered at least one year of
because of the present business or financial service, whether continuous or broken, with respect to the activity in
condition which he is employed.
(4) the power to control the employer need not actually supervise the b. In req. (1), the long period of doing “odd jobs” is that the same was either
employee’s conduct performance of duties by the employee, for it necessary or desirable to Hacienda Leddy
sufficed that the employer has the right to wield c. In req. (2), the petitioner’s length of service (>20YR) is an indication of
that power. the regularity.
2. SC’s answer to other LT of Er: 3. SC’s answer to other LT of Er:
a. “Service contract states no EE rel”: contract and nature of actual work are a. “Piece-rate basis”: It is Considered as wage (A. 97); Payment by the piece
both considered; Any stipulation in writing can be ignored when the is just a method of compensation and does not define the essence of the
employer utilizes the stipulation to deprive the employee of his security relations.
of tenure. b. “he stopped working”: No proof of abandonment of Ee shown by Er.
b. “Talent fee”: considered as wage; The term ‘wage’ is broadly defined in c. “He worked only for 2 days”: why erect a house if employed for 2 days
Article 97 of the LC as remuneration or earnings, capable of being only? It only means he was repeatedly hired
expressed in terms of money however designated NOTE: quantum of proof is substantial evidence which is understood as such
c. “valid retrenchment”: No, because of Er’s failure to substantiate claim of relevant evidence as a reasonable mind might accept as adequate to support a
financial losses. conclusion, even if other equally reasonable minds might conceivably opine
NOTE: Quantum of Evidence: substantial evidence, which is that amount of otherwise.
relevant evidence that a reasonable mind might accept as adequate to justify a
conclusion.
Who has jurisdiction to determine EE Rel.
Meteoro et al v Creative Creatures GR 171275 2009 NACHURA
F:
1. Creative is engaged in the business of production of set designs for tapings,
concerts, theatrical performances. Its primary client is ABSCBN. Petitioners
are artists, carpenters and welders.
2. Petitioners filed a complaint for non-payment of benefits of regular Ee in DOLE-
NCR, followed by a complaint for Illegal Dismissal in NLRC
3. LT of Er:
(1) No EE rel, hence jurisdiction is not in DOLE
(2) they were contractual Ee and/or independent talent workers.
4. DOLE-NCR: Creative must pay the petitioners
5. DOLE Reg Dir. Issued an Order to pay the complainants. Reasons:
(1) there is EE rel
(2) DOLE-NCR has jurisdiction since it involves viol of Labor Standards Law
(3) this is an DOLE’s exercise of visitorial and enforcement powers (A. 128 LC)
6. DOLE secretary: affirmed DOLE Regional Director.
7. CA: assailed DOLE Sec for lack of jurisdiction; it should be in NLRC because
the respondent consistently denied EE Rel.
8. SC: Affirmed CA, DOLE has no jurisdiction
I: Who has the jurisdiction over money claims, DOLE or NLRC? NLRC in this case
because of A. 128 XPN Clause
R:
1. NLRC has jurisdiction because DOLE is divested of jurisdiction to decide the
case under the “exception clause” (A. 128b)
a. GR (A. 128a): DOLE Regional Director may decide money claims of Ees
regardless of the amount in the exercise of its visitorial and enforcement
powers.
b. XPN (A. 128b): DOLE Regional Director is divested jurisdiction over a labor
Standard case when the employer contests the findings of the labor
regulations officer and raises issues thereon; (laging dine-deny ni Er na
merong EE rel mula umpisa sa labor inspector hanggang sa CA).
Elements of A. 128b according to Bay Haven v Abuan:
(a) that the employer contests the findings of the labor regulations officer
and raises issues thereon;
(b) that in order to resolve such issues, there is a need to examine
evidentiary matters; and
(c) that such matters are not verifiable in the normal course of inspection.
Applying the elements of A. 128b, respondent (a) contested the findings of the
labor inspector during and after the inspection and raised issues (b) the resolution
of which necessitated the examination of evidentiary matters (c) not verifiable in
the normal course of inspection. Hence, the Regional Director was divested of
jurisdiction.
Reasonable Causal Connection
Indophil Textile Mills v Adviento 171212 2014 PERALTA
F:
1. Indophil is in the business of manufacturing thread for weaving. Respondent
is Engr. Salvador Adviento worked as the Civil Engineer to maintain its
facilities. He developed chronic poly sinusitis and allergic rhinitis. He was
advised by the doctor to avoid dust.
2. He filed for illegal dismissal in NLRC. He filed complaint in RTC for gross
negligence against Indophil to provide a safe work environment with a prayer
for damages.
Instances of Indophil’s gross negligence
a. Petitioner’s textile mills have excessive flying textile dust and waste in
its operations and no effort was exerted by petitioner to minimize or totally
eradicate it;
b. Petitioner failed to provide adequate and sufficient dust suction facilities;
c. Textile machines are cleaned with air compressors aggravating the dusty
workplace;
d. Petitioner has no physician specializing in respiratory-related illness
considering it is a textile company;
e. Petitioner has no device to detect the presence or density of dust which
is airborne;
f. Despite earnest plead of the Ees, the mgmt., failed to heed the same.
3. Indophil filed for motion to dismiss
LT: RTC has no jurisdiction but the LA because of A. 217a4 and there is EE rel.
4. RTC: indophil is guilty of gross negligence, a case of quasi-delict
5. CA: affirmed RTC
6. SC: affirmed CA and RTC
I: Who has the jurisdiction in this case of claim of damages, RTC or NLRC? RTC bec
there is no Reasonable Causal Connection between the claim (of damages in A.
217) and EE rel.
R: This is a case of Quasi-Delict, hence RTC has the jurisdiction.
1. Engr. Adviento’s claim is specifically grounded on gross negligence to provide
for a safe work environment—a case of quasi delict.
- The pertinent provision of Article 2176 of the Civil Code which governs quasi-
delict provides that:
Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no preexisting contractual relation between
the parties, is called quasi-delict.
- Er cannot use EE rel as the preexisting contract because the gross negligence
of not maintaining a hazardous work environment cannot be simply considered
as a breach of contract but already a violation of the Civil Code.
- Theirs is a simple action for damages for tortious acts allegedly committed
by the defendants. Such being the case, the governing statute is the Civil Code
and not the Labor Code.
2. A. 217a4 only applies when there is Reasonable Causal Connection bet the
claims provided for A. 217 and EE rel.
Reasonable Causal Connection Rule; If there is a reasonable causal connection
between the claim asserted and the employer-employee relations, then the case is
within the jurisdiction of the labor courts; and in the absence thereof, it is the
regular courts that have jurisdiction.
RCC is a test to determine who WON the LA has the jurisdiction over damages.
Effect When no EE Rel exists or when the main issue does not involve EE Rel Corporate Officer or Employee
Georg Grotjahn GMBH v Hon. Isnani (RTC) 109272 1994 PUNO, J Matling Industrial and Commercial Corp et al v Ricardo R Coros BERSAMIN, J
F: F:
1. GMBH is a German Company of Motor vehicle. Respondent Romana R. 1. Ricardo Coros was the VP for Finance and Admin in Matling.
Lanchinebre was a sales representative of petitioner from 1983 to mid- 2. He filed for Illegal suspension and Illegal dismissal in the NLRC.
1992. 3. Matling moved to dismiss the case.
2. Romana had a loan and cash advances with GMBH. She failed to fully LT of Matling:
settle them. a. The case is an intra-corporate dispute because he was a member of
3. She filed for illegal suspension/dismissal in NLRC. GMBH filed for collection BOD and he was the VP for Finance and Admin; as such the
of money against her in RTC. jurisdiction belongs to RTC
4. RTC (Hon. Isnani): dismissed the case. Reason: b. The By-Laws shows that the President has the power to create new
(1) RTC has no jurisdiction but LA under A. 217 LC. offices. The President made Coros VP and BOD member.
(2) Cash advances and loans were contracted during the existence of EE 4. LT of Coros:
rel. a. He is not a member of BOD. He did not own a share; He was not
5. SC: set aside RTC elected.
I: Who has jurisdiction, RTC or LA? RTC b.
Does GMBJ has the capacity to sue? YES under Omnibus Investment Code 5. LA: dismissed the case. He was a corp officer and BOD member
R: 6. NLRC: set aside LA. The case is an Intra-corporate dispute
1. This Civil Case is a simple collection of a sum of money brought by 7. CA: affirmed NLRC, reasons:
petitioner, as creditor, against private respondent Romana Lanchinebre, a. A position is considered a Corporate officer if (1) listed in the by-laws,
as debtor. The fact that they were employer and employee at the time of (2) created and elected by BOD
the transaction does not negate the civil jurisdiction of the trial court. The b. The position of Coros was only created by the President, hence it is
case does not involve adjudication of a labor dispute but recovery of a not a corporate office but an ordinary office.
sum of money based on our civil laws on obligation and contract.
2. Not every dispute between an employer and employee involves matters I: Whether the RTC or the LA has the jurisdiction. RTC
that only labor arbiters and the NLRC can resolve in the exercise of their Determinative Issue: Whether the position generally created by by-laws is
adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and considered as corporate officer. NO, It must be specifically mentioned in by-laws.
the NLRC under Article 217 of the Labor Code is limited to disputes arising
from an employer-employee relationship which can only be resolved by R:
reference to the Labor Code, other labor statutes, or their collective 1. RTC has jurisdiction (before it was SEC)
bargaining agreement. a. A. 217 covers the LA and NLRC’s jurisdiction over employees.
b. Sec. 5.2 RA 8799 (Securities Regulation Code) transfers the
jurisdiction from SEC to RTC.
c. If Coros is a regular officer, RTC has jurisdiction; if corporate officer,
LA has jurisdiction
2. Coros is a regular officer only.
a. Section 25 of Corp Code requires that Corporate Officers must be
provided in the By-Laws.
b. The creation of an office under a By-Law provision is not enough, the
position must be expressly mentioned in the By-Laws.
c. This is the correct interpretation, otherwise it can easily make the
BOD circumvent the constitutional guarantee of the security of tenure
of the employee by claiming that a certain position is a creation of
by-laws.

Intra-corporate dispute is a controversy which involves corporate officers. The

jurisdiction of which is in RTC, and the applicable law is SRC.